Despite posting an anticipated marginal decline in operating profit for 2002, the French food and drinks group, Danone, delivered an upbeat forecast for the coming year.
The company reported a 1.18% decline in operating profit to €1.590 billion, on sales down 6.3% at €13.555 billion. Including currency effects and divestments, sales were down 10.7%. However, the results were in line with forecasts. Analysts had been forecasting operating profit of around €1.605 billion on turnover of €13.692 billion. Analysts also welcomed margin improvement at Danone and organic sales growth of 6% for the year and 8.1% in the fourth quarter.
Analysts were also pleased with the group’s upbeat forecast for the coming year. “We confirm our targets for 2003 starting from the principle that even if the context is difficult, we will achieve 5% to 7% turnover growth and improve our margins by 20-40 basis points,” said Danone’s chairman, Franck Riboud.
Net profit increased to €1.283 billion. In 2001, the group’s net profit was reduced to €132m following one-off charges. Earnings per share rose by 10.9% to €6.11. Danone said it would propose a dividend of €2.30.
The group said it planned to maintain capital expenditure near to the 2002 level of 4.5% sales. The group also substantially reduced its net debt, from €4.827 billion to €2.269 billion, finishing the year with gearing of 39%.
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