Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on DANONE. We currently have 9 research reports from 2 professional analysts.
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Fresh Dairy's turnaround in Europe will take longer than expected
19 Dec 16
Danone has adjusted its FY16 guidance on the back of a weaker than expected Q4 in Spain and Activia’s performance. Consequently, the company expects the FY16 top-line to be slightly below the guidance of 3-5%, whereas the operating margin should be above the 50-60bp guidance (with a possible positive impact of 5-10bp).
Q3: Transition in China weighs on results
18 Oct 16
Q3 update: sales grew lfl +2.1% (cons. +2.4%) with -0.7% volume growth and +2.8% pricing. On reported figures, sales were down 1.8% (FX: -4.1%, scope of consolidation +0.2%). OG by division: Fresh Dairy +2.2% (cons. +2.5%), Waters -0.1% (cons. +1%), Early Life Nutrition +1.7% (cons. +2.5%), Medical Nutrition +9.7% (cons. +7%). Fresh dairy saw stronger pricing +4.2% on the back of negative volumes in the CIS and LatAm regions. Waters were impacted by the transition phase and floods in China (excluding China, the Waters performance is up mid single-digit). The Early Life Nutrition performance was impacted by tough comparables and the transition from an indirect to a direct sales model in China (excluding indirect sales, ELN was up mid single-digit in China). Medical Nutrition’s excellent performance was driven across all geographies. The company maintains its FY guidance: 3-5% organic top-line growth and 50-60bp lfl improvement in the operating margin, although the top-line is likely to be in the lower range of this.
Very solid Q2; on track to deliver its FY guidance
28 Jul 16
Danone released its Q2 and H1 update. In Q2, sales grew organically 4.1% (cons. +3.7%) with volumes up +1% and pricing +3.1%. On reported figures sales were down 3% (FX:-7.7% and net acquisitions: +0.6%). OG by division: Fresh Dairy +3% (cons +2.7%), Waters 2.7% (cons. +2.7%), Early Life Nutrition +7.2% (cons. +6.2%) Medical Nutrition 7.1% (cons. +6.5%). OG by geography: Europe -0.2%, CIS&North America +4.8%, ALMA +8%. Overall, in H1 sales grew organically by +3.8%, whereas the operating margin was up +93bp lfl and +125bp on reported figures. Waters was the only division where the margin lfl was down (due to inventory adjustments in China). The company confirmed its FY guidance: 3-5% organic top-line growth and 50-60bp lfl improvement in the operating margin.
Danone finally gets exciting!
07 Jul 16
Danone has announced the acquisition of WhiteWave Foods (the US-based, natural and health-focused food group) for $12.5bn in cash (including $2.1bn debt). The proposed price per share of $56.25 offers a premium of around 24% to WhiteWave’s average close price over the past month and represents a c. 21.2x EBITDA multiple. The deal is expected to close by the end of the year. It is subject to WhiteWave shareholders and regulatory approval.
Q1 as expected; FX weighs on reported figures
19 Apr 16
Danone released its Q1 trading statement. The OG stood at 3.5% (cons. 3.2%) driven by pricing of +2.7% and volumes of +0.8%. The FX impact was -7.2%. Net acquisitions showed an impact of +0.7%. OG by division: Fresh Dairy +2.3% (cons. 2%), Waters +3.9% (cons. 2.1%), Baby Food +4.8% (cons. +5.5%) and Medical Nutrition +6.6% (cons. 6.7%). OG by region: Europe +0%, CIS & North America +5.1%, ALMA +6.3%. The group maintains its FY guidance: 3-5% OG in sales and a solid improvement in the organic operating margin.
Fresh Dairy improves but the FY16 guidance leaves mixed impression
23 Feb 16
Danone released its Q4 and FY results. In Q4, sales grew organically +3.6% (cons +3.2%) with 1.3% in volume and +2.3% in value. Q4 OG by division: Fresh dairy +2.6% (cons +2%), Waters +1.9% (cons +3.9%), Baby Nutrition +6% (cons +3.4%), Medical Nutrition +6.8% (cons +7.7%). For the FY, the revenue grew organically +4.4% (0.9% in volumes, 3.5% in value) and +6% on reported figures. The operating margin increased +17bp organically (FD +24bp, Waters margin -192bp, Baby Food +142bp, Medical Nutrition +1bp) and +32bp on reported figures. Net income was up +5%. The proposed dividend stood at €1.6 per share. In FY16, Danone expects 3-5% OG in sales (on rising raw material prices, a sluggish economic environment and volatile currencies) and a solid improvement in the organic operating margin.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
FY16 pre-close +ve surprise: Raising FY16, 17, 18 PBT c.1%, 4% and 6%
12 Jan 17
Today’s slightly better-than-expected FY16 pre-close trading statement prompts us to raise our FY16 PBT estimate by c.1%, reflecting the combination of (1) growth in several of HFG’s key markets, (2) strong overall operating performance, and (3) favourable fx translational benefits (recalling that 62% of FY15 sales were ex-UK). To reflect the positive profit contribution impact of the Portuguese j/v agreement signed on January 4th, the j/v income line is boosted by €1.5m (c.£1.3m) and €2.5m (c.£2.2m) in FY17 and FY18 respectively, representing upgrades of c.4% and c.6%. Once operating at full capacity utilisation, the j/v could well add €3m (c.£2.6m) in FY19. To reflect (1) our increased FY16-FY18 forecasts, (2) current peer EV/EBITDA valuation multiples, and (3) our view that HFG now deserves to trade at a premium to the peer group in view of its impressively strong financial track record (i.e. FY06-FY16 since IPO) for organic and investment-led profitable growth, combined with an array of emerging, highly promising initiatives (see our note “Start of a new chapter of growth” published on October 4th) to expand the scale and scope of HFG’s core business, we raise our TP to 805p (previously 755p). Maintain BUY.
10 for 17
09 Jan 17
As always at the start of a year, there are significant uncertainties about the year ahead but I think in 2017, the level of uncertainly has decisively moved up a gear. In fact, a leading economist at the LSE, Ethan Ilzetzki, was recently quoted as saying “I view the current global economic environment as the most uncertain in modern history”. Wow.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
19 Dec 16
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FY trading update: strategic goals kept despite challenging environment
17 Jan 17
Sales grew organically by 6% (H2: 7.6%, in line with our forecast and slightly better than consensus of 5.7%) and 6.8% on reported figures (in line with consensus, FX: 0.8%). Excluding Russell Stover, sales grew organically 7.4%. FY OG by region: Europe +7.4%, NAFTA +3.4% and ROW +10.2% (driven by Japan and Brazil). Global Retail recorded double- digit growth.