PARIS — Exchange rates affected first-half financial results from Groupe Danone S.A. While net income more than doubled, sales as reported slipped 3%.
|Cecile Cabanis, c.f.o. of Danone|
“H1 (sales) is showing a growth at 3.8% on a like-for-like basis and minus 3% on a reported basis, driven by unfavorable expected weakening currencies,” said Cecile Cabanis, chief financial officer of Paris-based Danone, in a July 28 earnings call.
Net income of €880 million ($975 million), or €1.43 ($1.58) per share on the common stock, was up 112% from €416 million, or €0.69 per share, in the first half of the previous fiscal year.
“(The results) are strong, and they do reflect the transformation of the company and, again, another quarter of progresses on our journey toward strong profitable and sustainable growth,” Ms. Cabanis said.
The exchange rates had a negative effect of 7.7% on sales. The effect reflected negative trends in currencies, including the Argentine peso, the Russian ruble, the Mexican peso and the Brazilian real.
Three of the four divisions within Groupe Danone reported volume growth in the first half with Waters up 5.9%, Early Life Nutrition up 1.6% and Medical Nutrition up 4.7%. Volume for Fresh Dairy Products slipped 2.1%.
Fresh Dairy Products reported first-half sales of €5,377 million ($5,995 million), down from €5,664 million in the first half of the previous year. Sales also fell for Water, to €2,393 million from €2,503 million. Sales rose for Early Life Nutrition, to €2,495 million from €2,445 million, and for Medical Nutrition, to €787 million from €780 million.
Geographically, the CIS and North America region reported first-half sales of €2,216 million, down from €2,305 million. Volume decreased by 3.3%.
Danone on July 7 said it had entered into a definitive merger agreement to acquire WhiteWave Foods, Denver, in a transaction representing a total enterprise value of about $12.5 billion, including debt and certain other WhiteWave liabilities. Ms. Cabanis in the July 28 earnings call said Danone is preparing to file a proxy.“But everything is moving according to plan so far,” she said.