Danone set for more cost cuts after modest fiscal year | Progresiv
Danone has unveiled new plans to cut an additional 1 billion euros in costs, even as it reported modest profit and sales figures for its last fiscal year. 
In 2016, sales were down 2.1% to 21.9 billion euros, while recurring operating profit grew by 4.5% to 3.02 billion euros, and recurring net profit was up 6.7% to 1.9 billion euros. However, on an underlying basis, sales were up 2.9%, operating profit rose by 8.4%, and net profit grew by 10.4%.
Danone reported growth across all its divisions, with the strongest performance coming from its Medical Nutrition division – sales up 7.4%, volumes up 4.8%. The Waters division saw sales and volumes grow by 2.9%, while the Early Life Nutrition division recorded a 3.5% increase in sales and a 0.5% uptick in volumes.
However, its largest division, Fresh Dairy Products, only saw sales grow by 2% while volumes declined by 2.6%. Danone attributed this to a longer-than-expected revival of its European dairy operations, and tough conditions in China.
The group also unveiled plans for a new “comprehensive programme of efficiency”, called ‘Protein’, under which it will look to deliver savings of 1 billion euros by 2020. The group did not offer specifics of where the savings will come from, but said it aims to re-invest some of those savings into “relevant growth projects”.
Danone did not offer sales or margin forecasts for 2017, but said it aims to deliver earnings-per-share growth of more than 5%. It added that it will review its targets after the completion of the WhiteWave Foods acquisition, set to take place in the first quarter. (www.kamcity.com)
