Another quarter of delivery

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.

The turnaround looks to be happening

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.

Danone finally gets its head above the water

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.

Echoing other staples reports

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.

Two good quarters in a row, let's hope it continues

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.

All eyes on Lactalis

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.

Strong Q1 performance should save the FY22 guidance

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 as the watchword 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.

FY21 margin guidance reiterated but FY22 should be at risk

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.

Let's see if Danone really succeeds where others seem to fail

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.

Recovery on track, but still looking for a new CEO

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.

Split Chairman and CEO roles (at last!)

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.

Much hope for the coming months

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.

Anpario+ (ANP, House Stock at 228p) - HY results; improving H2 outlook

Taking the Upper Brand: Brands Sector Overview

The earliest dated brand has long been contested; the majority point to Kongō Gumi, a family run construction company that specialised in Buddhist temples in Japan; its documented record of ownership goes back to 578 AD. Like Kongō Gumi, several different brands have withstood the test of time, albeit without then same degree of longevity. The term brand originates from the 1500s and means "to burn" in Ancient Norse and was initially used to mark cattle for ownership. This practice can be consid

Morning Note – 12 September 2023

Hilton Food Group+ (HFG, House Stock at 726p) - Long-term supply agreement signed with Walmart-Canada

Achieving milestones

Hybridan Small Cap Feast - 26 Jun 23

26th June 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objecti

Hybridan Small Cap Feast - 20 Sep 23

20th September 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment ob

LIBERUM: Cake Box: Trading accelerates as outlook improves

LIBERUM: Genus: Good progress tempered by currency and interest rates

Shares trading >20% below adj. NAV; positive category data

Chapel Down share price in recent weeks has retreated to a 22% discount to our adj. NAV of 38p. This is overdone and offers an attractive entry point on deep value and structural growth considerations. Recent Nielsen off-trade data for English sparkling wine remains highly positive, with April numbers in particular stellar (boosted by the King’s coronation). The growing season is anticipated to have got off to a good start as has the brand relaunch over Q2. While we make no forecast changes, our

Strong H1 & positive outlook strengthens confidence

Chapel Down has released an excellent H1 update, reinforcing the structural attractions of English wine and another period of good execution by the new team. We cite the strong 21% revenue growth, further market share gains, good operational progress and prospects of a strong harvest this year as key highlights. Our confidence in the NAV being an underpinning to the investment case is reinforced by leading brand data. We make no forecast changes but see good scope to upgrade at the Sept interims

Cake Box Holdings+ (CBOX, House Stock at 150p) - AGM TS – Forecasts maintained, Chairman stepping down & CMD date.

Hybridan Small Cap Feast 27/10/22

Dish of the day Joiners: Unicorn Mineral Resources (UMR) has joined the Standard Segment of the Main Market. Unicorn Mineral Resources plc is an Irish exploration company, incorporated on 25 March 2010. Unicorn’s focus is to explore for zinc in Ireland, and the Company has been working on several license blocks since 2010. It has targeted the highly prospective Limerick Basin. Unicorn raised £930k at 10 pence per share. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Ithaca Energ

AIM MARKET UPDATE June, July, August 2018

AIM showed no signs of a summer slowdown with three strong months with regards to total funds raised (new and further issues). June, July and August averaged over £700m per month, boosted by a particularly strong June which delivered 14 IPOs (historically AIM has 5-6 new joiners per month). Through the end of August 2018, the total amount raised (new and further issues) of £4.80bn is +15% on the same period in 2017 which itself was the best year since 2007.

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