Danone remains cautious in its objectives, the share drops
Tuesday, July 27th, 2010Danone issued a first-half operating result slightly better than expected and has carefully noted the objective of sales growth for the full year, considering that the crisis would continue to weigh on European consumption.
The food group, which focuses on further development of emerging markets, now provides that its comparable sales will grow at least 6% when he was previously an increase of at least 5%.
He always bet on an increase in operating free cash flow in historical data at least 10% and stability of its operating margin in 2010 compared to 2009.
"We continue to invest in countries, products and brands with strong potential: Child Nutrition in Asia, fresh dairy products in the United States, Brazil, Russia, where Danone and Unimilk merger provides us with very significant growth opportunities long term, "said Franck Riboud, CEO of Danone.
In a statement, he confirms that water and medical nutrition, the group continues "to identify potential for growth in emerging markets and through new models."
At the same time, Danone has continued its efforts to improve productivity, says its chief executive.
The action Danone, with brands ranging from yogurts Actimel waters of Evian, lost 2.23% to 45.285 euros at 9:38, while the CAC 40 0.93% but took the DJ Stoxx European " Food yielded 1.13%.
Commenting on the first half, Francis Priest, CM-CIC Securities, believes they are "good bill" but noted that Danone "remains cautious on the S2 due to a persistently difficult".
The analyst believes that the decline of the title, which takes place in small volumes, reflects disappointment with the failure to raise the target group at the ROC, which the market had anticipated.
INCREASE IN VOLUME OF THE 2ND QUARTER 8.9%
On a comparable basis, the EBIT of Danone rose 2% on a comparable basis to 1280 million euros over the period January to June, showing a margin of 15.30%.His current net income was up 10.1% to 848,000,000 euros.
Turnover amounted to 4.386 million in the second quarter (+6.9%) or 8.364 million in the half. Excluding the effects of exchange rates (+7.0%) and changes in scope of consolidation (+0.1%), it grew 6.9% on a comparable basis in the second quarter.This organic growth is divided into volumes rising by 8.9% and a decrease in value by 2.0%.
Sales rose only 1.4% to 2,420 million euros in Q2 while they increased by 15.3% to 635 million in Asia and 15.9% in the rest of the world to 1331000 .
The consensus Thomson Reuters StarMine, the operating result was expected of 1.265 million euros (+5%) and turnover of 8.261 million (+9.8%), representing an operating margin of 15.3 %.
The fresh dairy products division, which represents 55% of sales in Q2, increased its sales by 6.6% to 2.436 million euros over the period. On the entire first half, the operating margin of this sector appears to 13.94% (-94 bps).The volume effect was positive at 9.3% but the negative value effect of 2.7% due to price reductions made in several countries, Danone said.
The division "Water" (19% of sales) has seen its sales grow by 4.8% to 828 million while its margin declined 75 basis points over the first half to 13.70%.
Sales of the "Child Nutrition" (19.5% of sales) rose 8.7% to 857 million (margin down 27 bps in the first half to 19.19%).
Finally, those of the pole "medical nutrition" increased by 10.8% to 265 million (margin decline of 86 bps to 19.90% in the first half).
Free cash flow from operations increased 34.9% to EUR 858 million, or 10.3% of sales in the first half, against 636 million and 8.5% of sales from the same period of last year.
In turn, capital expenditures totaled 275 million euros, or 3.3% of turnover. This level is below the annual forecast, ranging from 4% to 5% in sales due to a timing effect, Danone said.
Net debt amounted to 3180 Danone million euros in the first half.
* Danone Graph comparing to its competitors:
here