Singular Bank : The world’s leading group in the dairy products segment (with a dominant position in Yogurt), in Water and in Infant and Medical Nutrition, has published its results for the last quarter of the year. Like-for-like sales (LFL) rose 7.0%, beating consensus on almost all measures, thanks to an 11.3% rise in prices and despite a 4.4% drop in volume. By business, EDP (Essential Dairy & Plant-based) grew by 7.6%, Water by 4.4% and SPN (Speciality Nutrition) by 7.1%. Turnover also increased in all geographic areas.
For the full year 2022, like-for-like sales grew by 7.8%, EBIT by 1% year-on-year thanks to EDP and a margin of 12.2% (13.7% in 2021). However, profit in 2022 stood at 959 million euros, 50% lower than in 2021, due to higher raw material prices and the partial withdrawal from Russia.
On the other hand, the guidance for 2023 estimates sales growth of 4% with a slight improvement in the EBIT margin. The 2022 results have been above consensus, but the 2023 comparable revenue forecast of 4% could be insufficient given the high inflationary context. Finally, the 2022 dividend of €2 represents a yield of 3.8%.
This defensive consumer company has suffered from scandals, reorganisations and CEO ousters for some time, but is turning a corner. It has good growth rates, margin expansion, and EPS growth. Danone has made strategic investments, notably in China and Africa. Finally, cost savings of €1 billion are expected in 2023 (including a 20% reduction in overheads and a reduction of around 1,500 to 2,000 positions in local and global headquarters) and structuring the group into five geographic segments with more decision-making power.
