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Danone published a solid set of Q3 results, above the market expectations and driven by pricing. Although the volume contribution was still negative, an improvement has been seen since the last quarter and Danone is expecting a positive volume-mix by the end of the year. As we had expected, the FY 2023 guidance was raised.
Companies: Danone (BN:EPA)Danone SA (BN:PAR)
AlphaValue
The H1 results were solid, exceeding consensus expectations, but they were not so exceptionally outstanding to surprise the market positively (as Unilever did yesterday). The results were mainly driven by price/mix dynamics. However, the progress made towards the “Renew Danone” strategy and another successful quarter of delivery instill confidence and trust in the company.
A positive volume/mix (despite accelerated pricing) and an upgrade to the FY23 sales outlook confirmed that consumer demand has so far remained resilient. Given the significant discount to Nestle (16.3x FY23 P/E vs. 24.0x) and the positive momentum, the stock is becoming increasingly attractive.
A satisfactory year. Q4 volumes were inevitably light, but nothing worrying in the current environment. The FY23 guidance is in line with the consensus. Nothing very glorious, but enough to be happy about on a Danone scale.
A copy/paste of what we had previously seen from other consumer staples companies: a beat on price, lower-than-expected volume elasticity and a revenue guidance upgrade maintaining the margin target unchanged.
The trend for consumer companies finally looks good so far. Danone beat expectations from the top to the bottom-line with reassuring volume metrics. FY sales guidance upgraded, and EBIT guidance reiterated.
Danone shares are flying (+8% at mid day), well beyond what might have been expected following the sound/reassuring Q1 numbers. The main reason is Lactalis.
The Q1 sales beat, with growth across all segments and geographies, secures the FY22 guidance for now. Normalization of the figures expected looking forward.
Reinvestment has been the watchword of the CMD. While it could be the key for fundamental changes, this adds more pressure on margins in the current inflationary context. FY22 will therefore be challenging, but, looking forward, Antoine de Saint Affrique was able to convince us in part that things could move in the right direction. The mid-term guidance is not fantastic either, but given Danone’s historical tendency to lower its targets as time goes on, this caution is probably better.
The reiteration of the FY21 margin guidance is reassuring and proves that Danone is dealing with cost inflation (roughly) as well as its peers. Apart from this, we don’t see other major catalysts before Saint-Affrique’s announcements expected during the CMD in March 2022.
A mix of good operational and governance news, which is very welcome after Danone’s underperformance. However, we remain cautious on margin development given the weaknesses announced by peers.
No major surprise in the Q1 results, nor stunning news about a new CEO/strategy. The group, currently on a “break”, is attempting first to recover from the pandemic gradually and the guidance suggests that this will be the case.
Danone finally bows to investor pressure to split the Chairman and CEO roles. This is a good start, but we hope that the group will accompany this decision with strategic choices to relaunch growth.
The FY20 figures were roughly in line with the expectations. The FY21 outlook seems quite conservative, but positive comments about the potential split of Faber’s roles, divestments or buy-backs were welcomed. More information to come at the next CME on 25 March.
Sequential recovery from the Q2 lows. The group has restored FY20 guidance, with expectations of a 14% operating margin. A reshaping of the organisation and portfolio review are also supposed to drive mid-term 3-5% profitable growth. Wait and see.
Companies: Danone SA
Research Tree provides access to ongoing research coverage, media content and regulatory news on Danone SA. We currently have 65 research reports from 8 professional analysts.
Companies: A.G. BARR p.l.c.
Shore Capital
Ocean Harvest Technology (OHT) report FY2023 results in-line with expectations. Product revenues of €3.0m grew at 21% versus FY2022A despite an (expected) H2 2023A decline of 7%, and was a function of lower margin single seaweed sales, which can be volatile. H2 2023 OceanFeed blended sales of €1.3m grew at 21% versus H2 2022. The H2 2023 gross margin of 39.5% supported this and showed a sharp acceleration versus the 35.3% seen in H2 2022. 15 new customers were added across FY2023, and with a ver
Companies: Ocean Harvest Technology Group Plc
Cavendish
Companies: Anpario plc
We are reiterating our Buy rating and $0.25 price target for Starco Brands with the company announcing 4Q23 (December) results after the close on Monday. We believe 2024, with a full compliment of unique, value-added brands which leverage Starco's aerosol and marketing infrastructure in hand, and a laser focus on adding key categories and new relationships, is shaping up as another year of material progress for Starco. We believe there are also continued margin expansion opportunities from both
Companies: ELF EL STCB EPC COTY IPAR DGE IPAR EL UNILEVER EPC STCB ELF COTY
Small Cap Consumer Research LLC
AG Barr’s (BAG’s) FY23 results highlighted the strength of the brand portfolio as group volumes (+2.4%) outperformed the UK soft drinks category decline of 2.9%. Key brands IRN-BRU (33% of FY24 revenue) and Rubicon (19% of FY24 revenue) grew 8% and 15%, respectively, as flavour innovation and format mix helped to drive volume growth. Management anticipates margin enhancement initiatives to yield a 100bp operating margin uplift in FY25, aided by greater in-sourcing and other efficiency gains. M&A
Edison
Companies: Wynnstay Group plc (WYN:LON)SDX Energy PLC (SDX:LON)
The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. For the second year running, apart from global economic influences affecting world markets, performance in 2023 was dented by the capital-intensive nature of the sector. The HHI fell 3.7%, to 483.8, underperforming the main London markets – FTSE 100 (+3.8%) and FTSE All-Share (3.8%) but outperforming the FTSE AIM All-Share Index (
Companies: TXG NDVA TSVT BCOW Z29 TXG NCYT GNS SUN AMS OMG APH EKF EAH IMM AGL DEMG AGY TSTL IPO GDR ETX TRX HVO CTEC AVO OXB DEST VLG IXI VAL INDV AGR AVCT BAI 123F IMCR BCOW
Hardman & Co
Companies: Greencore Group Plc
Cyclical weakness in Carr’s Group’s Speciality Agriculture business has affected the company’s fortunes of late. However, the new management team, a strong net cash balance sheet and a record order book in the Engineering division offer optimism. Operational progress, particularly a reversal of fortunes in Speciality Agriculture, should rebuild confidence and a reduction in the current discount to our view of the underlying value.
Companies: Carr's Group PLC
FY23 results are much in line with overall expectations, helped by a much stronger H2 production and higher purchases of independent crops helping to fill the group’s rising mill capacity. A marginally higher than expected average CPO price mill-gate price of $729/tonne drove the revenue outperformance, but the change in production mix impacted gross margins while slightly higher than anticipated interest, tax and minority charges resulted in EBIT, PBT (Adj.) and EPS (Adj.) just below our foreca
Companies: M.P. Evans Group PLC
Greggs (GRG) enjoyed a stronger-than-expected end to FY23 with sales ahead of our estimates and consensus forecasts, enabling GRG to meet its profit expectations for the year. GRG’s strong revenue growth and an improved profit performance in FY23 means it has fared better than many other consumer-facing names during the year. With lower inflationary pressures, the company enters FY24 in a better place with respect to its selling price versus cost inflation than at the start of FY23, when it was
Companies: Greggs plc
Companies: Genus plc
Liberum
Today's news & views, plus announcements from SNN, DOM, GRI, FTSA, WINE
Companies: Naked Wines plc
Capital Access Group
Better than expected to date: The January trading update season has been better than expected, with the ratio of upgrades to downgrades running at 26:16 out of the 101 trading updates that we have analysed. It’s a surprisingly positive start to the New Year which reflects (1) realistic expectations captured in consensus forecasts, (2) consumers’ determination to enjoy Christmas and protect important areas of personal expenditure and (3) a reduction in supply as competitors exit.
Companies: MORE LGRS MPE MRK MTC RBG MEX ZAM
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