Danone sees profits halve despite price increases

Last year, Danone has achieved a strong increase in sales thanks to price increases. However, volumes are under pressure and profits are evaporating due to the withdrawal from Russia and a major reorganisation plan.

Improvement in sight

In 2022, Danone’s sales grew by 13.9 % to reach 27.7 billion euros, despite price increases. These were not enough to cope with increased production costs, as net profit fell from 1.9 billion in 2021 to 959 million last year.

The dairy giant pulled out of Russia, which entailed a write-down of 500 million. In 2023, the company anticipates a further 500 million in additional costs in this regard. The implementation of its ‘Local First’ reorganisation plan also weighed down the results.

The figures are in line with expectations, though. CEO Antoine de Saint-Affrique draws encouragement from a good fourth quarter and expects margins to recover slightly in 2023.