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Danone's CEO Praises Remarkable Growth in China, Fueled by Infant and Medical Nutrition Sales

World 27.02.2024
Source: The DairyNews
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In a recent announcement, Danone's CEO, Antoine de Saint-Affrique, expressed enthusiasm about the company's robust performance in China during FY23, characterizing it as "extremely strong." The notable growth was primarily attributed to the success of Danone's specialized nutrition portfolio, featuring infant and medical nutrition products.
Danone's CEO Praises Remarkable Growth in China, Fueled by Infant and Medical Nutrition Sales
For the fiscal year ending in 2023, Danone reported a seven percent increase in total sales, reaching €27.6 billion (US$29.9 billion) on a like-for-like basis. The recurring operating profit rose to €3.5 billion (US$3.79 billion), boasting a margin of 12.6 percent—a 40 basis points improvement from the previous year.

The star performer in Danone's portfolio was the specialized nutrition business in China, encompassing both infant and medical nutrition. This segment witnessed a notable 8.3 percent surge on a like-for-like basis, reaching €2.45 billion (US$2.65 billion). The entire China, North Asia, and Oceania region reported a remarkable 10.1 percent increase in sales, making it the fastest-growing region for Danone in FY23.

CEO Antoine de Saint-Affrique attributed the success to a strengthened infant formula portfolio and a thriving tube-feeding nutrition business. He emphasized the company's satisfaction with the quality and quantity of growth in China, acknowledging the outstanding performance during a Q&A session with analysts.

Danone's strategic initiatives in China include capitalizing on the consolidation in the infant nutrition sector after the government's introduction of a new national registration standard. The launch of Aptamil Essensis, the first SKU approved under the new standard, has positioned Danone as a premium offering in the market, featuring the patented Syneo formulation.

Furthermore, Danone is eyeing growth opportunities in tier three and four cities for its infant formula business in China, anticipating penetration and distribution expansion. The company also highlighted the success of Mizone, its vitamin and electrolyte drink brand, which experienced double-digit growth and regained competitive strength after a revamp.

Despite the remarkable growth in China, Europe remains Danone's largest specialized nutrition market, with a 3.4 percent increase in sales to €3.08 billion (US$3.33 billion) in the last fiscal year. Looking ahead, Danone aims to continue building resilience in its Chinese business by expanding its adult, medical, and pediatric nutrition portfolios with similar profitability.
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