Danone has recently recorded a 3.3 per cent drop in first-quarter sales on a like-for-like (LFL) basis but has reiterated its goal of returning to growth in Q2. On a reported basis, sales were down 9.4 per cent, mainly driven by the negative impact of exchange rates (7.0 per cent) that resulted from currency devaluations against the euro in the United States, Latin America, Indonesia, Turkey and Russia.
In terms of regional dynamics, Europe and North America sales declined by 2.8 per cent on a like-for-like basis, from a high base of comparison that was driven by the pantry loading that benefited these regions in March 2020 for Specialized Nutrition and, to a lesser extent, Essential Dairy and Plant-based. Rest of the World sales decreased 4.2 per cent, with China, Latin America, and Africa experiencing continued pressure in the quarter.
Sales rose by 1.6 per cent LFL to €3.15 billion for Danone’s Essential Dairy and Plant-based (EDP) division. However, this was largely offset by a 7.7 per cent drop in its Specialized Nutrition unit and an 11.6 per cent decline in water sales.
Furthermore, in the first quarter, the company’s specialised nutrition net sales declined by 7.7 per cent on a like-for-like basis, with a decrease of 7.0 per cent in volume and -0.7 per cent in value, from a high base of comparison driven by the pantry loading of March 2020. Adult Medical Nutrition delivered another quarter of strong growth, driven by China. Infant Nutrition remained penalized by Covid-related channel disruptions in China, with cross-border channels sales down around 45 per cent.