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French dairy giant Danone has posted “broad based” first quarter growth of 4.1% as sales volumes grew to start its financial year.
Sales for the first three months of 2024 stood at €6.8 bn, up 4.1% on a like-for-like basis, led by an increase of 1.2% from volume/mix and 2.9% from price.
On a reported basis, sales decreased by 2.5%, mainly because of the disposal of its dairy business in Russia starting from July 2023, and the negative impact from forex of 3.2%.
In the first quarter, Europe sales were up 2.8% on a like-for-like basis, as its EDP division (essential dairy and plant-based protein) continued its turnaround, notably led by Actimel, Activia, YoPro and Alpro brands, despite temporary shipment disruptions.
In North America, sales were up 2.5% on a like-for-like basis, led by coffee and high-protein yogurts, while China, North Asia & Oceania delivered 8.9% like-for-like sales growth driven by specialised nutrition.
Danone also said it was making “continued progress on fixing business models in emerging markets”, with sales in Latin American up 4,1% and by 6% in the rest of the world.
The group confirmed its 2024 guidance of like-for-like sales growth between 3% and 5% with moderate improvement in recurring operating margin.
CEO Antoine de Saint-Affrique commented: “We have delivered a good start to the year, with yet another quarter of quality growth and consistent delivery on our Renew Danone agenda.
“In what remains a challenging environment, we continued making good progress on our transformation agenda, strengthening our category fundamentals, intentionally driving our winning mixes and geographies while delivering on portfolio rotation with the successful closing of the disposals of our milk and dairy activity Horizon Organic and Wallaby in the US and Michel & Augustin.
“We are confident that 2024 will be another year where we deliver on our value creation model. With that in mind, we look forward to talking more about the next chapter of Renew Danone at our Capital Market Event in Amsterdam in June.”
Danone shares are up 1.8% to €59.58 so far this morning.
Morning update
Deliveroo continued to grow revenues in its first quarter, with transaction numbers and pricing up in the first three months of the year.
The delivery player said its gross transaction value (GTV) was up 6% year on year in constant currency
Orders returned to growth with a 2% increase, while GTV per order was up 4% in constant currency.
In particular, it saw solid GTV growth in UK and Ireland and improving trends iternationally.
In UKI, GTV growth was 6% YoY (7% in Q4 2023), in the context of a more stable but still uncertain consumer environment. Orders were flat, in line with overall market growth.
In International, GTV growth accelerated to 6% YoY in constant currency (1% in Q4 2023), with orders up 4%. This improvement in GTV growth rate was driven by France, UAE and Hong Kong, with Italy remaining strong.
Overall group revenues were 2% in the quarter in constant currency to £514m.
This is because its revenue take rate (as a percentage of GTV) decreased year on year, although it was flat sequentially against Q4 2023 due to continued targeted investments to capitalise on ongoing signs of stabilisation in consumer behaviour across our markets.
The group reaffirmed its 2024 guidance of GTV growth of 5%-9% and adjusted EBITDA of between £100m-£130m.
Will Shu, founder and CEO of Deliveroo, said: “I am pleased with the start we have made to this year, building on the strong progress in 2023. The team has been relentlessly focused on delivering service and value for money, helping drive a return to order growth and continued growth in GTV.
“We made particularly strong progress in international markets during the quarter, with notable improvements in France, UAE and Hong Kong, and continued strength in Italy.
“In UKI, while the consumer environment remains stable but uncertain, our commitment to offering fair prices and a flawless consumer experience is building strong foundations for the future and will continue to differentiate our business.
“I’m excited about building the best consumer experience possible and am confident in our ability to drive profitable growth and sustainable cash generation.”
On the markets this morning, the FTSE 100 is up another 0.5% to 7,890.4pts.
Deliveroo is up 5.9% to 128.3p after its trading update this morning.
Other risers include Naked Wines, up 4.8% to 57.6p, B&M European Value Retail, up 2.1% to 523.1p and Nichols, up 1.9% to 990p.
Fallers include Virgin Wines, down 2.6% to 46.8p, Greencore, down 1.6% to 127.2p and PZ Cussons, up 1.5% to 83.6p.
Yesterday in the City
The FTSE 100 clawed back some growth Tuesday’s heavy falls, rising 0.4% to 7,848pts.
Just Eat Takeaway.com dropped 5.2% back to 1,134p despite seeing gross transaction value (GTV) in the UK and Irish markets jumped by 11% to €1.7bn in the first quarter of 2024, with orders also up 1% year on year.
However, it was the only region that Just Eat managed to grow orders, with Northern Europe, Southern Europe and North America all in decline.
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