Danone: Yogurts and plant-based driving improvement of EDP Noram
Danone: (BUY, Fair Value EUR80 (+22%))Yogurts and plant-based driving improvement of EDP Noram
The strong improvement at EDP Noram was the main positive of the H1 2018 results. This was driven by both yoghurts and plant-based food and beverages. We maintain our forecast of 2.9% organic sales growth in 2018, with EDP Noram +1.1%, EDP International -1.3%, Waters +4.7% and Specialized Nutrition +8%. We should see a slowdown in H2 due to Specialized Nutrition and EDP International. Our 2018 EBIT margin is unchanged at 14.7%. Synergies and savings should partly offset 1/ the steep rise in PET prices and US freight costs and 2/ the Moroccan boycott. We maintain our Buy recommendation. Our Fair Value is unchanged at EUR80.
Danone is engaged in activities in the global food and beverages industry. Co. operates in four markets: Fresh Dairy Products (Co. produces and sells yogurts, fermented dairy products and other fresh dairy products); Waters (Co. produces and sells natural waters as well as flavored and vitamin-enriched waters products); Early Life Nutrition (Co. produces baby formula, milk-and fruit-based desserts, cereals, small pots of baby food and ready-made baby food); and Medical Nutrition (Co. develops adult and pediatric clinical nutrition products to be taken orally, or through a catheter in the event of malnutrition related to illness or other causes).
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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