Danone adjusts 2016 guidance

By Jim Cornall

- Last updated on GMT

In Europe, Danone's key focus is the relaunch fo global brands, including Danonino, Actimel and Activia.
In Europe, Danone's key focus is the relaunch fo global brands, including Danonino, Actimel and Activia.
Danone has changed its outlook for 2016, upgrading its trading operating margin target from ‘solid improvement’ to a range of 50 to 60bps, and sales growth guidance in the range of 3% to 5%.

As part of its transformation plan by 2020, Danone said it continues to strengthen its balanced growth model.

Cécile Cabanis, Danone CFO, said, “We are not changing any of our agenda​.

“In 2016, we continue to implement our agenda to transform the company and increase the resilience of our business model through disciplined resources allocation, efficiencies and cost optimization.”

Targets unchanged

Danone noted that its 2020 targets remain unchanged: to generate a strong, profitable and sustainable growth.

Cabanis said that, “2016 is another important step in our journey towards 2020, and another key year for us to build more balance and a resilience model of profitable growth.”

“It's about making sure that we continue to be agile, to grasp opportunities for growth, making sure that we invest properly behind this growth, and that this growth is profitable and sustainable​.”

Growth in US dairy

Regarding dairy, Cabanis said, “It's about making sure that we sustain the acceleration of the growth in the US, it's also about implementing sustainable solutions to support safe return to growth in Europe.”

She said that, in the US,there is a new momentum, “and we are making sure that our plans, which include innovation, close dialog with retailers and effort to support growth will continue to consistently deliver quarter after quarter.”

China – volatile emerging market

On early life nutrition (ELN), Cabanis added that, “It's about making sure we take the right steps to build a more sustainable model of growth in a context of short-term acceleration of changes in China.”

In response to a question on why China was on a list of countries listed as ‘volatile emerging markets,’ Cabanis said that, “In China, given the changes in regulation for ELN, there is some short-term volatility, so we need to make sure we are really focused on how we want to build our model for the future and not trying to push for short-term growth. 

“China has gotten more volatile since last year.” 

Asked about Russia, she added that it is still a situation that is being closely monitored.

“We have a platform that is ready to accelerate but today we are not seeing a specific rebound.”

Relaunch of global brands

In Europe, Cabanis said that the key focus in 2016 is about the relaunch of global brands.

“We have started with Actimel and Danonino, and we are seeing some positive results and good signs of progress.

“The next step will be the relaunch of Activia in H2, so as of today we are convinced we have what it takes to complete the transformation and stabilize sales by the end of 2016.”

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