Danone: +2.7% Organic Growth in Q1 Despite Infant Milk Recall
Danone reported a revenue of €6,708 million in the first quarter of 2026, marking a +2.7% increase on a like-for-like basis, driven by volume and price gains. However, reported data shows a -2.0% decline, affected by adverse currency effects of -5.6%, while regional performance varies significantly: Asia-Pacific accelerates at +6.0%, but EMEA is stagnant at +0.6%.
Diverse Regional Trajectories Masked by Overall Growth
The +2.7% growth on a like-for-like basis in Q1 2026 conceals contrasting trajectories across geographical areas. In Asia-Pacific, dynamism prevails with a +6.0% increase on a like-for-like basis, supported by a positive volume/mix of +6.2%. China, North Asia, and Oceania (CNAO) even posted a growth of +10.3%, driven by a volume/mix increase of +10.5%, thanks to Specialized Nutrition and the Water category, particularly the Mizone brand. Meanwhile, in the Americas, growth stands at +3.4% on a like-for-like basis, driven by a volume/mix of +2.5%. North America progresses by +1.5%, with solid performances in high-protein ranges and a very strong dynamic from ST?K. Conversely, EMEA shows limited growth of +0.6% on a like-for-like basis, with a volume/mix decrease of -1.4%. Europe alone records a growth of +0.4% despite a positive price effect of +1.5%, revealing a real weakness in volumes. Specialized Nutrition is impacted by infant milk recalls and the conflict in the Middle East.
Contrast Between Comparable and Reported Data Highlights Currency Impact
The contrast between like-for-like and reported data underscores the massive impact of currency movements. While organic growth stands at +2.7%, reported revenue declines by -2.0%, penalized by an unfavorable currency effect of -5.6%. This depreciation mainly reflects the weakness of the US dollar, Argentine peso, Indonesian rupiah, and Chinese renminbi against the euro. The effects of scope (+0.5%) and the positive contribution of hyperinflation (+0.3%) provide slight compensation but remain insufficient to neutralize the currency headwinds. This -5.6% deterioration illustrates the company's vulnerability to exchange rate volatility, particularly significant as the EMEA, the leading region, also suffers from volume weakness.
Despite Q1 Challenges, Danone Confirms 2026 Guidance
Despite the challenges of the first quarter, Danone has confirmed its guidance for 2026, targeting like-for-like revenue growth between +3% and +5%, coupled with a requirement for current operating income to grow faster than revenue. This guidance aligns the company with its medium-term ambition. However, Q1 2026 sets a trajectory of +2.7%, slightly behind the lower limit of the +3% range. The executive management highlights the resilience of the health-focused portfolio and points to growth drivers such as high-protein dairy products, kefir, evian, and global medical nutrition. Two strategic operations have been announced to support this ambition: the acquisition of Huel, enhancing complete nutritional solutions, and the creation of a joint venture with Arcor in Argentina for dairy products. However, achieving the guidance will depend on currency stabilization and an acceleration in EMEA, where volume dynamics remain under pressure.
