Danone Aims for Profitable Growth via Focus on Core Activities, Expansion
March 08 2022 - 1:57AM
Dow Jones News
By Joshua Kirby
Danone SA said Tuesday that it will focus on selective expansion
as well as its core business categories ahead as it set out its
future strategy and growth targets.
Ahead of a capital-markets event Tuesday under new Chief
Executive Antoine de Saint-Affrique, the French food-products group
said its new strategic plan aims to build a model of sustainable
and profitable growth, based on four pillars.
The four focuses of the plan are restoring Danone's
competitiveness in core categories and geographies; selective
expansion of the company's presence across segments and
geographies; seeding of future growth avenues; and portfolio
rotation.
As well as the new strategy, Danone is targeting like-for-like
sales growth between 3% and 5% in 2022, 2023 and 2024. This year,
the company is aiming for a recurring operating margin above 12%,
as well as higher productivity than last year, with input-cost
inflation in the low-to-mid teens, based on current macroeconomic
assumptions.
In 2023 and 2024, recurring operating income should grow faster
than like-for-like sales, Danone said.
The company is also focusing on capital-allocation discipline,
with annual capital expenditure at a maximum 4.5% of net sales, and
net debt should be below three times earnings before interest,
taxes, depreciation and amortization. The dividend should be stable
or grow every year, Danone said.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
March 08, 2022 01:42 ET (06:42 GMT)
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