achieved sales revenue of 6.789 billion euros in the first quarter, a year-on-year increase of 4.1%, achieving a "good start" for 2024 performance. On April 18, French food and beverage giant Danone released its first quarter financial report for 2024. In the Chinese market, even in the off-season, its beverage brand Pulse still achieved strong growth. Behind this, it is inseparable from the strong support of pulsating electrolyte water. In 2023, Pulse officially enters the electrolyte water track, and the new Pulse electrolyte water product is allowing Danone to "get returns quickly." In the infant formula milk powder sector, Danone is also actively promoting new products.
According to industry insiders, strong technological R&D capabilities and supply chain systems are important reasons why Danone can quickly introduce new products and achieve performance growth. Facing the future, Danone is full of confidence and expects full-year sales revenue in 2024 to increase by 3%-5% year-on-year, with recurring operating profit margins improving moderately.
Steady growth in performance
On April 18, Danone's first quarter financial report for 2024 showed that, driven by growth in all categories, Danone achieved sales revenue of 6.789 billion euros in the first quarter, a year-on-year increase of 4.1%. Among them, sales volume and mix contributed to 1.2% growth, and price factors drove 2.9% growth.
Looking at regions, in the first quarter of 2024, Danone achieved sales revenue of 840 million euros in China, North Asia and Oceania, a year-on-year increase of 8.9%; sales revenue in Europe was 2.336 billion euros, a year-on-year increase of 2.8%; North America achieved sales revenue of 2.336 billion euros, a year-on-year increase of 2.8%. Sales revenue was 1.737 billion euros, a year-on-year increase of 2.5%. Growth was mainly driven by coffee series and high-protein yogurt products; Latin America achieved sales revenue of 727 million euros, a year-on-year increase of 4.1%; other regions of the world achieved sales revenue of 1.150 billion euros, a year-on-year increase of 6.0%.
In terms of categories, Danone’s three major businesses have all achieved revenue growth. Among them, the sales revenue of Danone's professional special nutrition business was 2.183 billion euros, a year-on-year increase of 3.8%; the sales revenue of the drinking water and beverage business was 1.132 billion euros, a year-on-year increase of 8.1%; the sales revenue of basic dairy products and plant-based products was 3.474 billion euros, a year-on-year increase of 3.0% %.
Regarding the performance in the first quarter of 2024, Danone CEO Sheng Ruian said: "We made a good start in 2024. Danone once again achieved high-quality growth in the first quarter of 2024, with net sales in the global market increasing by 4.1% year-on-year. , all categories have made positive contributions.”
In addition, Sheng Ruian also mentioned Danone’s measures in product portfolio adjustment. "Although the environment is still full of challenges, we are making good progress in the transformation process. We have consolidated the category foundation and actively promoted the development of advantageous categories and regional markets through the successful sale of the US dairy business Horizon Organic and Wallaby, as well as the French biscuit business Michel & Augustin has realized the rotation of its product portfolio," Sheng Ruian said.
Sheng Ruian is confident about Danone's performance in 2024. "We believe that Danone will continue to achieve great results through its unique value creation model in 2024, and look forward to an in-depth discussion of the next chapter of 'Renewing Danone' at the Capital Markets event in Amsterdam in June," said Sherrian.
Pulse had a strong start
Danone mentioned in the financial report that all businesses in the Chinese market have maintained strong growth. Among them, Pulse started strongly with high double-digit growth.
Looking at specific performance performance, Danone's global drinking water and beverage business grew by 8.1% in the first quarter of 2024, mainly driven by the pulsating business in the Chinese market. Pulse business in the Chinese market grew by 27% in the first quarter of 2024.
At Danone’s first quarter 2024 performance briefing, Danone Chief Financial Officer Juergen Esser mentioned that Pulse is an outdoor drinking product, so it is a highly seasonal product. Traditionally, the first and fourth quarters are smaller sales quarters for Pulse, and Danone's growth performance in the first quarter of 2024 gives Danone confidence in Pulse's sales performance in the upcoming peak season.
It is worth mentioning that pulsating electrolyte water provides Danone with a significant boost. In 2023, Danone will officially enter the electrolyte water track. At Danone’s third-quarter performance meeting in 2023, Juergen Esser once said that the new pulsating electrolyte water product allows the brand to “get returns quickly.”
Chinese food industry analyst Zhu Danpeng pointed out that electrolyte water will become more functional in the post-epidemic era. Overall, Danone's electrolyte water achieved excellent performance in the off-season due to its strong R&D capabilities, complete channel component capabilities, and the blessing of brand effect, scale effect and fan effect. After continuously optimizing its product structure, Danone's overall development has entered a sustainable development node.
It is worth noting that Pulse is also making further plans in the electrolyte water track. Just recently, Pulse announced that its sports drink "Pulse + Electrolyte" has been upgraded. It is reported that this new product is aimed at daily sports scenarios. Each bottle contains at least 455mg of electrolytes, which can help people quickly rehydrate and restore their condition, and effectively replenish electrolytes lost during one hour of exercise.
As people pay more and more attention to sports, the demand for beverages such as electrolyte water that can replenish water and electrolytes in a timely manner is gradually increasing. The electrolyte water market has broad development prospects. Facing the electrolyte water market with great potential, many domestic brands are also making efforts in this category. Public information shows that in 2023, the total sales of Alien Electrolyte Water under Yuanqi Forest will exceed 2 billion yuan; Dongpeng Beverage mentioned in its 2023 financial report that its electrolyte beverage brand Hydration La has a good phased growth momentum. This new product The number of terminal outlets covered has exceeded one million and is still accelerating expansion.
According to industry insiders, Danone has a mature supply chain system and product research and development capabilities, and has differentiated advantages in the electrolyte water market.
The milk powder business performed well.
In the Chinese market, Danone's professional special nutrition business also got off to a good start this year. Among them, Danone's ELN (early life nutrition business, i.e. infant formula) recorded net sales growth in the first quarter of 2024, and its market share increased.
At the performance briefing meeting, juergen esser revealed his insights into China's infant formula market. Juergen Esser said: "The entire milk powder category in the Chinese market has not changed much. We have seen a slight improvement in the trend of the milk powder category as the transition period between new and old formulas is coming to an end. At present, we are cautiously navigating the market for infants and young children in the Chinese market. Formula milk powder is in the final switching stage to the new national standard product. "
In terms of sales channels for infant formula milk powder, juergen esser said that the purchase demand for infant formula milk powder through online channels is rising because Danone has a greater advantage in online channels. , which is good news for Danone.
It is worth mentioning that Danone is accelerating the pace of launching new infant formula milk powder. On April 14, Danone presented Aptamil 3 and Aptamil Youyi 3 at the French Consumer Museum. It is reported that Aptame Zhuozhen 3 adds 123mg/100g high-quality dha on the basis of the core ingredient golden ratio prebiotic design, as well as a dual-source OPO structure, which can promote the absorption of key nutrients in infants and young children; Aptame Youyi 3 Added "Lactoferrin Sparkling Chain", the core ingredient is tens of billions of CFU probiotics combined with self-protection prebiotics, which further enhances lactoferrin and helps stimulate self-protection.
Danone’s technical advantages and brand potential have created Danone’s core moat in the infant milk powder business sector. Jiang Han, a senior researcher at Pangu Think Tank, pointed out that Danone focuses on product innovation and differentiation. For infants and young children of different ages, Danone has launched a variety of targeted formula milk powders to meet the needs of different consumers. At the same time, Danone also actively cooperates with scientific research institutions to develop more advanced formulation technologies to enhance the nutritional value and health benefits of products.
faces the Chinese consumer market, which is full of growth potential, and Danone also revealed its confidence in future development. Looking into the future, Danone expects full-year sales revenue in 2024 to increase by 3%-5% year-on-year, with recurring operating profit margins improving moderately.
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