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Danone SA BN Stock Quote

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XPAR:BN

Morningstar‘s Stock Analysis BN

Valuation
Currency in EUR
Is it the right time to buy or sell?
Is it the right time to buy or sell?

1-Star Price

INVESTOR

5-Star Price

INVESTOR

Economic Moat

INVESTOR

Capital Allocation

INVESTOR

Renew Danone Plan Is on Track in Q3, but Rerating Should Wait as Volumes Disappoint

Ioannis Pontikis, CFA Senior Equity Analyst

Analyst Note

| Ioannis Pontikis, CFA |

Danone reported third-quarter sales with like-for-like sales up 9.5% (volume/mix down 1.4% and pricing up 10.9%, pro forma volume/mix down 0.2% excluding EDP Russia). The essential dairy and plant-based segment was up 6.3% on a basis (negative 6% volume/mix) while specialized nutrition and water were up 12.2% and 14.4%, respectively in the quarter, with strong performance across regions. Danone upgraded fiscal 2022 top-line guidance for a second time this year with price-led organic sales growth now expected at 7%-8% versus 5%-6% previously (versus 5.9% in our model) and unchanged guidance on operating margin of above 12% (versus our unchanged 12.4%), assuming 100% reinvestment of cost savings and a low teens to midteens level of input cost inflation based on current macroeconomic assumptions. In the long term, Danone expects 3%-5% organic sales growth (versus 2.8% in our model) and operating income growth higher than sales growth in the midterm (2023-24, in line with our estimates). We don't expect to make material changes to our EUR 56 fair value estimate. Given a high teens input cost inflation outlook for peers in fiscal 2022, we expect to dial down our margin forecasts for Danone closer to 12%, which we expect to offset higher top-line growth for the year, resulting in immaterial changes to our FVE. Shares trade in 4-star territory.

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Key Statistics BN

Company Profile BN

Business Description

Following the acquisition of WhiteWave, Danone restructured the firm into three broad segments: essential dairy and plant-based products, which represents just over half of group revenue; specialised nutrition; and bottled water. The firm's portfolio includes well-known brands such as Danone/Dannon dairy products, Nutrilon and Cow & Gate infant nutrition, and Evian and Volvic bottled water. Danone derives about 60% of its annual sales outside Western Europe, up from about just one third in 2001.

Contact
17, Boulevard Haussmann
Paris, 75009, France
T +33 144352020
Industry Packaged Foods
Most Recent Earnings Jun 30, 2006
Fiscal Year End Dec 31, 2022
Employees 98,105

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