Danone1 1. Introduction · Danone1 1. Introduction Danone is a French agri-food multinational company created in 1919 in Barcelona by Isaac Carasso. It commercializes dairy and plant-based

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Danone1

1. Introduction

Danone is a French agri-food multinational company created in 1919 in Barcelona by Isaac

Carasso. It commercializes dairy and plant-based products, waters, early life nutrition and

medical nutrition.

Danone’s main vision is: “Danone, One planet. One health” 2. They think that people’s and

planet’s health are interconnected. On the other hand, their main purpose is bringing health

through food to as many people as possible and incentivize them to have more sustainable

and healthier practices.

This company has been building a double project since 1972: an economic and social

approach. Their three main pillars are: authenticity, flavor and health.

Danone is the third biggest dairy processing company in the world, behind Nestlé and

Lactalis and it is considered a world referent in innovation in the yogurt industry. Currently,

it possesses different renowned brands such as Font Vella, Aguas de Lanjarón, Volvic,

Latella or Actimel-Activia.

Their products are sold in more than 120 countries all over the world and it has more than

100,000 employees. In 2017, their sales went up to €24.7 billion and 66% of their trade is

from outside Europe.

2. History

Isaac Carasso was born in 1874 in Thessaloniki, a city in the Northeast of the current Greece

that was an important commercial area between the East and West. He realized that yogurts

existed around 1905 since they were sold by the Bulgarian sellers. At the same time, the

microbiologist Stamen Grigorov discovered the Lactobacillus bulgaricus that is still used

today in the yogurt production. Then, he started travelling around Bulgaria and Paris in order

1 Case written by Natalia Lisa, Maria Romeu, Laura Sánchez and Laia Vivet and supervised

by professor Oriol Amat. Universitat Pompeu Fabra, 2020.

2 Source: www.danone.com

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to find out yogurt’s properties. During the following years, different conflicts arose in his

hometown so, as well as other families, Carasso’s family decided to sought asylum in Spain.

After the First World War there were many children in our country that suffered from

intestinal infections. Mr. Carasso, aware of Elie Metchnikoff’s research that stated that lactic

ferments helped to extend our lives and having previous knowledge about yogurts, he decided

to introduce that new well-known product in the Balkans for its health benefits. That is why

in 1919 he launched ‘Danone’, in honor of his son Daniel, whose nickname was ‘Danon’.

In 1923 the medical school accepted the products sold by Carasso reaffirming all the healing

properties. Therefore, yogurts started to be prescribed by doctors.

Six years later, his son Daniel Carasso, at the age of 20, founded the Société Parisienne du

Yoghourt Danone, launched the product in France and opened the first retail outlet. The first

factory was opened in 1932 in Levallois-Perret.

In 1937, Dany the first fruit yogurt was launched while the flavored fruit was commercialized

in 1953.

In 1941, during the German occupation of France (World War II), Daniel and his wife

decided to move to NYC, where yogurt was still fairly unknown, in order to avoid

persecution. In 1942 he found that a yogurt business in the Bronx was for sale so he decided

to buy it and create the Dannon Milk Products Inc. Carasso, advised by the famous French

designer Raymond Loewy, changed the company’s name to Dannon in order to facilitate the

pronunciation and make it more appealing for customers.

In 1953, he decided to return to Spain in order to manage his businesses there and France,

where Daniel continued to pursue the dream he shares with his father, to meet people’s

nutritional needs and to innovate for the health of everyone. In 1959, he decided to sell the

American company to Beatrice Foods but it was repurchased by Danone in 1981.

In 1963 the first factory was opened in Spain in Aldaia (Valencia).

In 1967 Danone merged with Gervais, the leading fresh cheese producer in France, which

became Gervais Danone.

In 1972, Daniel met Antoine Riboud, the founder of Boussois-Souchon-Neuvesel (BSN), an

industrial glassmaker capable of competing on a European Scale. Carasso thought Riboud

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had an unmistakable entrepreneurial talent, so they decided to merge the two companies in

order to be able to grow internationally and create a food industry giant, the BSN-Gervais

Danone. Together, they launched the products to South-America, Asia and Eastern-Europe.

Also, in the same year, the well-known product Petit Suisse was introduced in the Spanish

market. Two years later, Natillas were launched and Font Vella joined BSN-Gervais Danone.

Starting in 1979, BSN-Gervais Danone acquired some companies, such as Vandamme and

Volvic. In less than 20 years, Danone was able to become Europe's third largest food

company and it was leading the market in many countries such as France and Germany.

In 1985 the first skimmed yogurt was launched.

In 1987, Gervais Danone acquired European biscuit manufacturer Général Biscuit, owners of

the LU brand.

In 1993 Lanjarón joined the company.

In 1994 they decided to shorten the name to consolidate its position as a multinational food

and beverage group and simply call it ‘Group Danone’. They also created a new logo: a child

gazing up a star, in order to represent the ambition of the company to keep growing and going

further.

One year later, Actimel was launched in the market.

In 2001, the company was touched by the affair LU: the closing of a factory and the layoff

plan resulted in the protest and boycotts.

In 2006 Riboud and Muhammad Yunus, set up Grameen Danone Foods LTD, to offer healthy

and affordable food for people suffering from malnutrition in Bangladesh. This desire to

grow social entrepreneurship lead the creation of the foundation Danone communities.

In 2007, Danone sold his biscuit business to Kraft and instead it decided to buy Royal

Numico, a global leader in medical and baby nutrition, providing Danone new avenues of

growth and profitability.

In 2009 Font Vella launches the first recycled plastic bottle.

Among 2013 and 2014 the company gains some awards:

● European environment prize to Aguas Font Vella and Lanjarón

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● Danone is recognized as the best Spanish company with Corporative reputation.

● Recognition for the promotion of healthy habits during childhood.

In 2017, Danone obtains a new identity: “One planet, one health”.

Finally, 2019 was the 100th year of Danone.

To sum up, figure 1 shows the main important facts of Danone’s history.

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Figure 1. Important facts of the history of Danone

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3. Industry analysis and competitors

3.1. Sales evolution in the industry and sales ranking

Figure 2 shows Danone’s net global sales from 2012 until 2018. We can appreciate that the

company is always following a trend of sales above 20.000 million euros. In general, sales

have increased over the years with the heaviest change from 2016 to 2017 where they grew

13%. However, in 2014 and 2016 they had a little decline. Finally, in 2018, although Danone

has had a negative growth, it has remained almost the same: sales have decreased 0.7%.

Figure 2. Danone’s sales evolution from 2007 to 2019.

Source: https://www.valuespectrum.com

Danone is a multinational company that sells all around the world. As it can be seen in figure

3, in 2018, 55% of the sales were made in Europe, Canada and the United States of America,

whereas the remaining 45% corresponded to the other parts of the world: Asia-Pacific, Latin

America, Middle East and Africa. On the other hand, the United States, China and France

were the three countries where they sold more products during the last year.

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Figure 3. Danone’s sales by geographical area in 2018.

Source:https://www.danone.com/content/dam/danone-corp/danone-com/investors/en-all-

publications/2018/registrationdocuments/Danone%20-

%20Registration%20Document%202018.pdf

Danone has different divisions as shown in figure 4. Dairy products and plant-based food and

beverages (EDP) are the most significant part of Danone’s sales which represent 53% of total

sales -taking into account EDP International and EDP Noram together. Moreover, Danone’s

29% of sales were provided by the specialized nutrition division while the remaining 18%

was generated by the Waters industry.

Figure 4. Danone’s divisions sales.

Source:https://www.danone.com/content/dam/danone-corp/danone-com/investors/en-all-

publications/2018/registrationdocuments/Danone%20-

%20Registration%20Document%202018.pdf

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Danone is in a highly competitive market where there are large multinational companies with

higher revenues offering a wide range of products. Given the main competitors listed in the

next section, Danone has 10% of the market share in the food industry, as seen in figure 5.

Nonetheless, when we separate their products in divisions it is important to highlight that

Danone is currently the first leading company worldwide in Fresh Dairy Products and Plant-

Based Products and the first leading company in Europe in Advanced Medical Nutrition.

Finally, it is the second worldwide company in Early life nutrition and the third for Packaged

waters (by volume).

Figure 5. Food market industry.

Own source

Regarding the sales evolution in the dairy products industry -their most important one- in the

Spanish industry, MDD -“marcas blancas or distributors brands”- have been gaining market

share during the last years as a consequence of the financial crisis given they are cheaper.

Although MDD have become stronger in Spain, Danone has been able to keep the second

leader position in the market, pictured in figure 6.

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Figure 6. market share in the market of 2008 and 2015.

Source: https://docplayer.es/93292072-Analisis-de-los-estados-financieros-de-danone-sa-en-

el-periodo-crisis-economica-y-recuperacion.htm

3.2. SWOT of the industry

STRENGTHS WEAKNESSES

1. Expenditure on food is essential for

all the population and it is

considered a fixed part of everyone’s

budget.

2. Consumers loyalty

3. Global presence

4. Product diversity

1. Global competition

2. Usually the products have a limited

innovation and progression

3. Pressure from large retailers to cut

prices

OPPORTUNITIES THREATS

1. Capacity to integrate or merge with

other companies

2. Rise in consumption of healthy

products and growth in the global

demand for nutritious food.

3. Growth in demand for new products

associated with the latest consumer

trend

4. Integration of technology into the

phase of production that allows a

rapid improvement and progress.

1. Increase in the sales of distributors

brands

2. Raw materials: price volatility and

availability of raw materials

3. Foreign exchange fluctuation

4. Environmental pressure: people are

becoming more aware that

consumption of certain food or

materials, for instance, plastics can

affect world resources.

5. Rapid developments in

contemporary and requirements of

the industry may lead to fast

obsolescence.

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3.3. Main competitors

With revenues of €24.65 billion, Danone is the top-seller in dairy products worldwide, the

third company in bottled water and the world’s second baby nutrition company. However, in

Spain, Danone is the traditional leader of dairy products.

Some of the most important competitors that Danone has to face are mentioned below.

Company Brief description

This Swiss business is the largest food company in the world. It

has over 2000 brands with a wide range of products in different

markets, for instance, milkshakes and yogurts.

Revenue: €83.1B

American multinational which is the second largest beverage,

food and snack company of the world. It is distributed in more

than 200 countries and offers around 100 brands.

Revenue: €58.0B

Meets everyday nutrition, hygiene and personal care of 2 billion

people with its 400 brands, such as Cornetto although being

focused on thirteen of them that turn over annually more than

1000M of dollars.

Revenue: €50.9B

It is known as the third largest food and beverage company in

North America and the fifth in the world. It provides meals for all

the occasions: at home, in restaurants or on the go. In addition,

they have different well-known brands such as Heinz and

Philadelphia.

Revenue: €23.5B

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3.4. Qualitative analysis

WHO

“I never accepted the idea of becoming a leader, because I think this is putting yourself in a

box, and letting people see your name in that box. I don’t even have an office for myself in

Danone. I share an office, a space, with other people.” - E. Faber3

Emmanuel Faber is the Chairman and Chief Executive Officer of Group Danone, he joined

the company in 1997 and since then, he has contributed in the company’s success. He

emphasizes that for him is essential to live a life that is as close as possible with everyone

else’s life. In addition, he hates routines, believes the best way to run a meeting is short and

for a better performance of the company, he always tries to hire people who are better than

him in the tasks he does.

Franck Riboud, was the Chairman and Chief Executive Officer of the company from 1996 to

2014. Nowadays is the Honorary Chairman and he ensures that the company is enforcing its

main values and culture.

Clara Gaymard, exercises the Manager position and is a member of the Board of Directors.

She has a huge knowledge of the key markets of Danone and a great experience at the

international level.

The Board of Directors is composed by 16 professionals and meets approximately 5 times a

year. The company also has some Specialized Committees such as the Audit Committee.

WHAT

Group Danone is a French corporation (société anonyme) that operates in more than 120

markets, all around the world. Its main activity is divided in 4 divisions:

3 Source: https://thesamewavelength.com/emmanuel-faber-coo-group-danone-on-leadership-

staying-free/

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1. Fresh dairy and plant-based products: they seek the demand of natural,

environmentally friendly and nutritious products. The main products of the division

include Activia, Actimel, Danonino, Danacol and Densia.

2. Waters: comprises the natural water business with the flavored and vitamin waters.

The main products are Evian, Volvic, Bonafont, Mizone.

3. Baby nutrition: specialized foods for infants and toddlers.

4. Medical Nutrition: focuses mainly on patients, infants afflicted with certain

illnesses and frail elderly people, the main brand is Nutricia.

Depending on the product analysis, the target group changes, for instance, the baby nutrition

has as a target group children/babies whereas medical nutrition is specific for ill people.

HOW

One of the key factors in the Danone’s strategy is the advertising and promotional policies

(marketing). The strategy is based on innovation, brand recognition and market leadership.

Danone’s operating companies in each division and regional market are all supported by

common foundations defined by dedicated central organizations. Furthermore, since Danone

sells in very different markets around the world, each division is responsible for their own

advertising, promotional and sales strategies according to the local consumption patterns.

In addition, Danone keeps innovation as the key to his development since it is important for

them to continually adapt to consumers’ needs. These innovations are done with the need to

defend the role of the yogurt in a healthy diet.

In order to compete effectively with the main operators in these markets, the group has

decided to differentiate itself from its competitors in terms of its product range, quality/price

ratio and positioning.

This strategy enables Danone to develop a long-lasting, balanced and constructive

relationship with the major distribution networks by supplying leading products that generate

growth and profitability for both parties.

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Danone tries not to use financial debt in order to finance their operating activities. Usually its

operating cash-flows are enough, although, they occasionally take on additional debt to

finance external growth transactions or to pay dividends to its shareholders.

Regarding the distribution, Danone has three main approaches: major retail chains, traditional

market outlets and e-commerce.

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Average sector

Average sector with

profits 2018 % 2017 % 2016 % 2015

%

Non-current assets 63,20% 70,88% 33.843 76,61% 34.627 78,24% 24.836 56,51% 24.714

75,55%

Intangible assets 28,61% 36,39% 24.446 55,34% 24.946 56,36% 15.804 35,96% 15.779

48,24%

Fixed assets 25,37% 22,27% 6.176 13,98% 6.005 13,57% 5.035 11,46% 4.752

14,53%

Other fixed assets 9,22% 12,23% 3.221 7,29% 3.676 8,31% 3.997 9,09% 4.183

12,79%

Current Assets 36,80% 29,12% 10.334 23,39% 9.632 21,76% 19.113 43,49% 7.998

24,45%

Stock 11,83% 10,09% 1.789 4,05% 1.669 3,77% 1.380 3,14% 1.374

4,20%

Accounts receivable 12,70% 9,48% 2.689 6,09% 2.794 6,31% 2.524 5,74% 2.230

6,82%

Other current assets 6,12% 4,63% 818 1,85% 1.069 2,42% 1.571 3,57% 1.321

4,04%

Cash and cash equivalents 6,15% 4,93% 5.038 11,40% 4.100 9,26% 13.638 31,03% 3.073

9,39%

Total Assets 100,00% 100,00% 44.177 100,00% 44.259 100,00% 43.949 100,00% 32.712

100%

Net Equity 38,44% 39,60% 16.475 37,29% 14.529 32,83% 13.194 30,02% 12.669

38,73%

Share capital 3,22% 1,40% 171 0,39% 168 0,38% 164 0,37% 164

0,50%

Other shareholders funds 19,67% 17,99% 16.304 36,91% 14.361 32,45% 13.030 29,65% 12.505

38,23%

Non-current Liabilities 29,56% 32,59% 17.737 40,15% 19.271 43,54% 21.705 49,39% 10.841

33,14%

Long term loans 22,55% 27,20% 14.277 32,32% 15.529 35,09% 18.438 41,95% 7.835

23,95%

Other long term liabilities 2,98% 2,57% 2.215 5,01% 2.393 5,41% 1.881 4,28% 1.393

4,26%

Long term provisions 4,03% 2,82% 1.245 2,82% 1.349 3,05% 1.386 3,15% 1.613

4,93%

Current Liabilities 32,00% 27,81% 9.965 22,56% 10.459 23,63% 9.050 20,59% 9.202

28,13%

Short term loans 2,88% 2,33% 3.484 7,89% 3.791 8,57% 2.503 5,70% 2.988

9,13%

Account payable and other short-term operating debts 9,23% 5,94% 3.675 8,32% 3.904 8,82% 3.772 8,58% 3.334

10,19%

Other current liabilities 19,89% 19,53% 2.806 6,35% 2.764 6,25% 2.775 6,31% 2.880

8,80%

Total Equity and Liabilities 100,00% 100,00% 44.177 100,00% 44.259 100,00% 43.949 100,00% 32.712

100%

4. Annual accounts

4.1. Balance sheet

Figure 7. Balance sheets from 2015 to 2018. Source: Source: Amadeus, stock exchange data and own computations. Data in million euros and percentages

*In both industry computations, the subgroups in net equity does not give the 100% because there was not enough information.

*Danone’s accounts are prepared in accordance with the International Financial Reporting Standards (IFRS) using the fair value, therefore, we do not have to make any adjustments regarding

inflation.

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4.2. Income statement

Average

sector

Average

sector with

profits 2018 % 2017 % 2016 % 2015

Revenues 100,00% 100% 24.711 100% 25.041 100% 22.035 100% 22.412 100%

Cost of materials 38,72% 55,29% 8.290 33,55% 8.357 33,37% 6.499 29,49% 6.556 29,25%

GROSS MARGIN 15,77% 28,86% 16.421 66,45% 16.684 66,63% 15.536 70,51% 15.856 70,75%

Staff costs 8,58% 11,00% 3.730 15,09% 3.677 14,68% 3.491 15,84% 3.440 15,35%

Depreciation of fixed assets 1,77% 1,34% 709 2,87% 596 2,38% 785 3,56% 1.680

7,50%

Research and development expenses 0,04% 0,05% 335 1,36% 342 1,37% 333 1,51% 307 1,37%

Other operating expenses 15,37% 14,09% 8.747 35,40% 8.179 32,66% 7.847 35,61% 8.058 35,95%

OPERATING RESULT (EBIT) 7,89% 17,87% 2.900 11,74% 3.890 15,53% 3.080 13,98% 2.371 10,58%

Financial income 1,01% 1,36% 210 0,85% 288 1,15% 197 0,89% 123 0,55%

Financial expenses 1,30% 2,27% 717 2,90% 886 3,54% 647 2,94% 569 2,54%

Financial result -0,28% -0,9 -507 -2,05% -598 -2,39% -450 -2,04% -446 -1,99%

EARNINGS BEFORE TAXES (EBT) 7,46% 16,53% 2.393 9,68% 3.292 13,15% 2.630 11,94% 1.925 8,59%

Income Tax 1,86% 4,28% 716 2,90% 842 3,36% 804 3,65% 626 2,79%

INCOME AFTER TAX 5,71% 12,42% 1.677 6,79% 2.450 9,78% 1.826 8,29% 1.299 5,80%

Extraordinary and other P/L -0,01% -0,05% 672 2,72% -1 0,00% -106 -0,48% -17 -0.08%

NET INCOME 5,78% 12,74% 2.349 9,51% 2.449 9,78% 1.720 7,81% 1.282 5,72%

Figure 8. Income statements from 2015 to 2018. Data in million euros and percentages. Source: Amadeus, stock exchange data and own computations.

*We have assumed that the minimum cash needed of the company and the industry is 10% of the current liabilities.

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In € millions 2018 2017

2016 2015

Net income 2,440 2,563

1,827 1,398

Share of profit of associates net of dividends received -729 -54 52

-58

Depreciation, amortization and impairment of tangible and intangible assets 1,601 974 786

1,217

Increases in (reversals of) provisions 13 153 51

148

Change in deferred taxes -135 -353 -65

-179

(Gains) losses on disposal of property, plant and equipment and financial investments -12 -284 -74

29

Expense related to Group performance shares 24 22 24

27

Cost of net financial debt 231 265 149

152

Net interest paid -218 -186 -148

-182

Net change in interest income (expense) 13 80 -

-30

Other components with no cash impact -44 -15 13

1

Cash flows provided by operating activities, before changes in net working capital 3,17 3,085 2,615

2,552

(Increase) decrease in inventories -167 -122 -24

-66

(Increase) decrease in trade receivables 807 -190 -110

-418

Increase (decrease) in trade payables -770 145 298

174

Change in other receivables and payables 70 40 -127

128

Change in working capital requirements -59 -127 37

-182

Cash flows provided by (used in) operating activities 3,111 2,958 2,552

2,369

Capital expenditure -941 -969 -925

-937

Proceeds from the disposal of property, plant and equipment 22 45 27

31

Net cash outflows on purchases of subsidiaries and financial investments -52 -10,949 -66

-596

Net cash inflows on disposal of subsidiaries and financial investments 1,305 441 110

2

(Increase) decrease in long-term loans and other long-term financial assets -9 4 6

-19

Cash flows provided by (used in) investment activities 326 -11,437 -848

-1,519

Increase in share capital and additional paid-in capital 47 47 46

39

Purchase of treasury shares (net of disposals) and DANONE call options − 13 32

198

Issue of perpetual subordinated debt securities 1,245

Interest on perpetual subordinated debt securities -14 −

Dividends paid to Danone shareholders -431 -279 -985 -314

Buyout of non-controlling interests -120 -107 -295 -1,929

Dividends paid -79 -86 -94 -97

Contribution from non-controlling interests to capital increases - 1 6 -3

Transactions with non-controlling interests -199 -193 -383 -2,029

Net cash flows on hedging derivatives -8 -52 50 22

Bonds issued during the period 300 - 11,237 2,049

Bonds repaid during the period -3,251 -1,487 -638 -603

Net cash flows from other current and non-current financial debt 27 -564 -442 -101

Net cash flows from short-term investments -815 9,559 -10,531 -242

Cash flows provided by (used in) financing activities -3.437 8,289 -1,616 -982

Effect of exchange rate and other changes 14 272 -151 -228

Increase (decrease) in cash and cash equivalents 200 81 38 -361

Cash and cash equivalents as of January 1 638 557 519 880

Cash and cash equivalents as of December 31 839 638 557 519

Supplementary disclosures

Income tax payments during the year -556 -1,116 -891 -804

4.3. Cash flow statement

Figure 9. Cash flow statement from 2015 to 2018. Data in million euros.

Source: https://www.danone.com/about-danone/publications.html

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4.4. Profitability

ROE =

Net

income/Equity EBIT/Sales Sales/Assets

(Assets/Equity) x

(EBT/EBIT) Net Profit/EBT

Average sector 0,15 0,10 0,77 1,26 0,78

Average sector with

profits 0,17 0,24 0,40 2,34 0,77

2018 0,14 0,12 0,56 2,21 0,98

2017 0,17 0,16 0,56 2,58 0,74

2016 0,13 0,14 0,50 2,84 0,65

2015 0,10 0,11 0,69 2,10 0,67

Figure 10. Profitability from 2015 to 2018.

Source: Own computations, Amadeus and stock exchange data.

4.5.Ratios

Average sector Average sector

with profits 2018 2017 2016 2015

DEBT AND CAPITALIZATION

Debt = Liabilities / Assets 0,62 0,60 0,63 0,67 0,70 0,61

Debt Quality= Current Liabilities / Total

Liabilities 0,52 0,46 0,36 0,35 0,29 0,46

Repayment Capacity= Cash flow /Loans 0,16 0,11 0,17 0,16 0,12 0,27

Cost of debt= Financial Expenses / Loans 0,05 0,04 0,04 0,05 0,03 0,05

Financial Expenses= Financial Expenses / Sales 0,02 0,03 0,03 0,04 0,03 0,03

LIQUIDITY

Liquidity= Current Assets / Current Liabilities 1,15 1,05 1,04 0,92 2,11 0,87

Treasury= Debtors + Cash / Current Liabilities 0,59 0,52 0,78 0,66 1,79 0,58

Acid Test= Cash / Current Liabilities 0,19 0,18 0,51 0,39 1,51 0,33

Z (UPF)= -3,9 + 1,28 CA/CL+ 6,1 E/A+ 6,5

NI/A+ 4,8 NI/E 1,00 1,14 0,73 0,45 1,51 0,32

Working Capital (real) (euros)= Current assets –

Current liabilities 11.807.987 2.083.264 369.000 -827.000 10.063.000 -1.204.000

Operating CA= Inventory + Clients + Other

operating CA + Minimum cash required 83.268.339 43.636.212 5.474.500 5.508.900 4.809.000 4.524.200

Operating CL= Suppliers + Other operating CL

+ Accruals 71.624.320 40.493.049 3.675.000 3.904.000 3.772.000 3.334.000

Working capital needed = operating current

assets - operating current liabilities 11.644.019 3.143.163 1.799.500 1.604.900 1.037.000 1.190.200

Working Capital Deficit (euros) 163.968 -1.059.899 -1.430.500 -2.431.900 9.026.000 -2.394.200

ASSETS MANAGEMENT

Non-current assets turnover= Sales / Non-

current assets 1,23 0,56 0,73 0,72 0,88 0,91

Current assets turnover= Sales / Current assets 2,11 1,37 2,39 2,58 1,15 2,80

DEADLINES

Inventories days= Stocks / Daily cost of sales 113,45 122,76 78,77 72,90 77,50 76,50

Days receivable (days)= Clients / Daily Sales 59,82 86,66 39,82 41,10 41,98 36,32

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Figure 11. Ratios from 2015 to 2018.

Source: own computations.

5. Questions

1. Analyze the main qualitative strengths and weaknesses of Danone.

2. Analyze the balance sheet, income statement and cash flow statement in order to

identify the main financial strengths and weaknesses of Danone. In addition, study

Danone’s ratios and compare them with the industry.

2.1. Analysis of the Balance Sheet.

2.2. Analysis of the Income Statement.

2.3. Analysis of the Cash flow Statement.

2.4. Analysis of the ratios and comparison with the industry.

3. Construct a cause and effect diagram.

4. Propose some recommendations to improve Danone’s performance. Demonstrate

their effectiveness.

Days payables (days)= Suppliers / Daily cost of

sales 88,56 72,31 161,81 170,51 211,84 185,62

SALES

Sales growth= Last year’s sales / Previous year

sales 0,77 0,54 0,99 1,13 0,98 1,06

PROFITABILITY, SELF-FINANCING AND

GROWTH

Return on assets= EBIT / Assets 0,08 0,10 0,07 0,09 0,07 0,07

Return on equity =Net Income / Equity 0,15 0,17 0,14 0,17 0,13 0,10

Cash flow / Sales 0,05 0,08 0,12 0,12 0,11 0,13

Cash flow / Assets 0,04 0,03 0,07 0,07 0,06 0,09

Dividends / Net profit NA NA 0,18 0,11 0,57 0,24

Dividends / Net equity NA NA 0,03

0,02 0,02 0,02

STOCK EXCHANGE RATIOS

Price Earnings Ratio NA 19,2 16,9

17,8 21,6 29,7

Price to book NA 2,8 2,43

3,10 3,5 3,8

Dividend yield (DPS / Share Price) NA 0,029 0,0315

0,0272 0,0282 0,0257

18

6. Bibliography

“Danone compra WhiteWave su mayor adquisición en diez años”

https://www.elmundo.es/economia/2016/07/07/577e0deb22601d465f8b456f.html

“Danone pone al consumidor en el centro de su estrategia de innovación“

https://lapublicidad.net/danone-vuelve-a-poner-al-consumidor-en-el-centro-de-su-estrategia-

de-innovacion/

“La evolución de los yogures” http://www.qcom.es/lacteos/especial-lacteos/la-evolucion-de-

los-yogures_28238_2811_31052_0_1_in.html

Ayuso, Miguel (8/05/2019) “La historia desconocida de Danone: la empresa que sobrevivió

a seis guerras y logró llevar el yogur a los supermercados”

https://www.directoalpaladar.com/cultura-gastronomica/historia-desconocida-danone-

empresa-que-sobrevivio-a-seis-guerras-logro-llevar-yogur-a-supermercados

Bhasin, Hitesh “SWOT analysis of Danone” https://www.marketing91.com/swot-analysis-

danone/

Durà, Cristina and Guillén, Ariadna “Qualitative and Quantitative analysis of Danone”

http://diposit.ub.edu/dspace/bitstream/2445/46829/1/Qualitative%20and%20Quantitative%20

Analysis%20of%20Danone.pdf

http://corporate.danone.es/es

https://www.danone.com/

Interbrand “Best Brands – Interbrand” https://www.interbrand.com/best-brands/best-global-

brands/2018/ranking/danone/

Santamaria, José (January 2018) “Análisis de los estados financieros de Danone SA”

https://docplayer.es/93292072-Analisis-de-los-estados-financieros-de-danone-sa-en-el-

periodo-crisis-economica-y-recuperacion.html

Tobar, Sandra (27/04/18) “Danone se muestra incapaz de reflotar el negocio del yogur”

https://www.merca2.es/danone-reflotar-negocio-yogur/

Zaccaria, Bruno (3/10/13) “Marketing Danone”

https://es.slideshare.net/BrunoZaccaria/marketing-danone