Danone (DANOY) reported strong sales growth and an improved operating margin in 2017, the world's largest yogurt producer said Friday, and will focus on improving sales growth and profits in the coming year, following its $12.5 billion acquisition of WhiteWave Foods.
"Despite volatile food and beverage markets and rising input costs, we delivered very strong full-year results, with double-digit recurring earnings per share growth in line with our latest guidance," said Danone chairman and CEO Emmanuel Faber, in a statement. "We closed the year with an accelerated sales growth rate, outperforming the industry average, along with very strong margin improvement and free cash flow above €2 billion."
Referring to what Faber called "the onboarding of WhiteWave," Danone said the integration of the U.S. organic food group was progressing well, with more than $50 million of synergies delivered in 2017. This was ahead of plan.
Like-for-like sales in 2017 rose 2.5% to €24.677 billion ($30.92 billion), slightly above analysts' expectations of 2.4% growth, the company said in its annual results presentation.
For 2018, the company said it is targeting double digit recurring EPS growth at constant exchange rates for 2018, excluding the impact of the sale of a partial stake in Japanese probiotic drink maker Yakult Honsha, announced earlier this week. That sale of part of its 21.29% holding, plus a participation in the Japanese company's share buy-back is expected to leave Danone with a 7% stake in Yakult.