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Press Release

02/11/04
Groupe DANONE 2003 Final Results
 
 

The Board of Directors of Groupe DANONE, meeting on February 10th, 2004, approved the 2003 audited consolidated accounts :

[1] : at constant scope of consolidation and exchange rates

[2] : Cash flow from operations less capital expenditures and changes in working capital

1. Like-for-like sales growth of +7.2%

Consolidated net sales amounted to EUR 13,131 million in 2003, decreasing by -3.1%. Exchange rates variation had a negative impact of -6.7% and changes in the scope of consolidation had a negative impact of -3.6%.

At constant scope of consolidation and exchange rates, sales increased by +7.2% for the full year of 2003, which is the highest organic growth rate reported over the last decade.

Sales by business line and area for 2003 were as follows:

The organic growth of +7.2% is derived from a +4.2% rise in volume and a +3.0% rise in value.

4th quarter 2003

4th quarter sales grew by +4.7% at constant scope of consolidation and exchange rates.

Sales by business line and area for 2003 were as follows:

4th quarter net sales decreased by -2.1%. Exchange rates variation had a negative impact of -5.1% and changes in the scope of consolidation had a negative impact of -1.7%.

2. Operating margin increased to 12.2%

In 2003, operating margin continued to grow, for the ninth consecutive year, reaching 12.2%, up +48 basis points compared to 2002.

The increase in operating margin includes a positive effect of 21 basis points (net) due to 2002 changes in the scope of consolidation:

- mainly related to the disposal of Galbani and the US domestic retail water business

- partly offset by the termination of royalties payment, following the final disposal of the

European beer activities to Scottish & Newcastle.

Operating income and margins by business line and area were as follows:

Operating result structure

[1] Including THEMIS project costs in 2002

3. EPS up by +5.6% (excl. exceptional one-time items)

2003 net income amounted to EUR 839 million vs EUR 1,283 million in 2002, which included the net capital gain related to the disposal of the European beer activities to Scottish & Newcastle.

Excluding exceptional one-time items, net result was up +1.3% in 2003.

4. Free Cash Flow still on a growing trend

Free cash flow continued to grow by +13% in 2003, driven both by the optimization of working capital and capital expenditures.

Capital expenditures amounted to 4.1% of net sales in 2003 compared to 4.5% in 2002.

Net financial debt went from EUR 2,269 million on December 31, 2002, to EUR 2,692 million on December 31, 2003 (representing a gearing ratio of 49%).

Financial investments amounted to EUR 1,088 million in 2003.

The Group has used its share buyback program authorization for EUR 368 million in 2003.

On February 10th, 2004, GROUPE DANONE's Board of Directors has decided, according to the authorization granted by the Annual General Meeting held on April 11th, 2003, to cancel 1.3 million shares held in treasury stock.

As a result, the authorized capital of GROUPE DANONE is made up of 133,675,493 shares and the company holds, directly or indirectly, 8,185,832 treasury shares.

5. Dividend for 2003 and two-for-one stock split

The Board will ask the Annual General Meeting of Shareholders, which will be held on April 15th, 2004 to approve:

- a dividend distribution of € 2.45 per share for 2003, representing an increase of 6.5% vs previous year

- a two-for-one stock split

For 2004, Groupe DANONE is confident to achieve its targets of a like-for-like sales growth between +5% and +7% and an operating margin improvement around +40 basis points.

2004 First Quarter Sales will be published on April 14th, 2004

Shareholder's Annual Meeting will be held on April 15th, 2004