The French food giant Danone has managed to increase its sales again after a number of lesser quarters. After a 3,7% decline in sales in the first quarter, sales in the second quarter increased by 6,6% compared to the same period in 2020.
The French group is thus slowly leaving the impact of the corona crisis behind. Despite the higher turnover, the operating margin was lower than last year. The company had to contend with rising procurement costs as well as one-off costs related to a project and the transformation of Danone's business. Total net profit after tax rose from €1,02 billion to €1,07 billion.
Recovery broadly supported
The recovery in sales is due to strong performance from all 3 divisions of the company. For example, the turnover from the (vegetable) dairy division increased by 4,8%. According to the company, the traditional dairy branch grew solidly, while the vegetable branch of this division realized a growth of more than 10% for the sixth consecutive quarter.
In the 'specialist nutrition' division, turnover grew by 2,8% in the second quarter. This growth was driven by higher prices for products sold (+4,2%). Volumes, on the other hand, declined slightly (-1,4%). Sales of baby food in Europe showed solid growth. In China the picture was mixed. Brands produced in the country grew in the second quarter, but brands that came from abroad certainly did not. This imported flow of goods actually shrank by 45% to 60%.
Water sales rose very strongly in the second quarter (+19,5%) due to the relaxed corona measures. Consumers are on the road again more often, which has benefited sales. The market share of the Danone brands has also grown.
Outlook positive
Despite the short-term uncertainties, Danone expects net profit to grow again in the second half of the year. Full-year operating margins will return to 2020 levels. The company estimates global economies will open further as vaccination campaigns roll out. Danone does warn of inflation in prices for milk, ingredients, packaging and logistics.
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