Danone sales for the Q2 2020 declined by 5.7%, as out-of-home consumption falls then led to 28% decline in its bottled water division. The company, which owned Badoit water and Evian is projected to announce a report with 3.3% decline. The company has signaled that the pandemic-associated cost will most likely burden on its remaining 2020 profit margin. Operating profit margin had slid to 14% of sales in the H1 2020, compared to H1 2019 with 14.7%.
The company’s chief of finance, Emmanuel Faber, had warned in relation to the same coronavirus-related cost ahead for the remainder of the year, but confident although H2 2020 will have been challenging of the year, sales growth will improve in 2021. Danone’s recurring operating income booked at €1.7 billion ($2 billion) in H1 2020, showing a year-on-year decline of 8.7%, as the company had to face expenses in employee safety during the pandemic, also in ensuring business continuity.
The evolving strategy implemented by Danone has been the diversification of the company portfolio, and joining into fast-growing products such as protein and plant-based ingredients as a way to lessen slower growth in dairy-based products. The company procured WhiteWave, U.S organic food producer, in 2017 for $12.5 billion to help the group in line with healthy eating trends.
