Danone, the French yoghurt maker, has announced that it is on track to meet the upper end of its guidance for the year, following stronger-than-expected first-half sales and earnings.
In the second quarter, Danone reported sales of €7.24 billion ($8 billion), a 6.4% increase compared to the same period last year on a like-for-like basis. This surpassed analysts’ predictions of €7.21 billion and brings the total sales for the first six months of the year to €14.17 billion.
Pricing was the key driver of sales growth in the last three months, although volumes did decline slightly compared to the previous year, according to Danone.
The company achieved a recurring operating profit of €1.73 billion in the first half, with an operating margin of 12.2%, slightly higher than analysts’ expectations. Danone attributed this success to significant investments in product development and promotional activities during this period.
Earlier this year, Danone raised its guidance for 2023 after reporting strong sales in the first quarter. The company now anticipates a sales growth range of 4%-6% on a like-for-like basis and expects to see a moderate improvement in its operating margin.
However, Danone also addressed the recent seizure of its Russia business, stating that it expects an impairment charge of around €200 million at the end of the year. The second-half results will not include any contribution from the Russia business.
Overall, Danone’s positive performance in the first half indicates promising prospects for meeting its targets and delivering impressive year-end results.