Danone sales rise on price increases but inflation weighs on profits

Sales at Danone, the French maker of yoghurts and other food products, rose last year as the company increased prices in the final quarter of 2022, but inflation and high costs weighed on its profit margin.

Sales rose 7.8 per cent last year on a like for like basis, which strips out currency impacts, to €27.7bn, beating expectations. The company raised prices 8.7 per cent year on year, led by sharp increases in North America and Europe in the final months of 2022.

Recurring operating profit grew slightly to €3.4bn for the year, but the company’s margin fell by 1.54 percentage points to 12.2 per cent due to higher costs and inflation, which were only partially offset by the price increases.

“While 2022 was a year of unprecedented external challenges and volatility, for Danone it has also been a year of deep transformation and solid delivery,” said chief executive Antoine de Saint-Affrique.

“Building on 2022 momentum, we are entering 2023 with renewed ambition and confidence in our strategy. In 2023, we will pursue our transformation, and further invest in our brands, products and capabilities while delivering in line with the midterm guidance defined last year,” he added.

The company has laid out a 2023 target of like-for-like sales growth of between 3 and 5 per cent with “moderate improvement” in recurring operating margin.

It also proposed a dividend of €2 per share for 2022, up 3 per cent on last year.