Firstly, we know that Danone's share price is particularly sensitive to variations in the price of certain raw materials essential to the manufacture of its products. This is particularly the case with the price of milk and fruit, which are raw materials widely used by this industry.
As part of its development strategy in emerging countries, Danone also fears an increase in local products, which could weigh on its profitability in relation to the investments made and prevent its main brands from becoming well established in the retail sector.
For some time now, Danone has also been making a lot of noise about its medical nutrition business that could be resold, according to some rumours, to a competing company such as Nestlé or Hospira. Such a divestiture could of course have a significant impact on the company's results.
It goes without saying that, as with any other stock, Danone's results will have an undeniable influence on its share price at the time of publication. It is important to be aware of this before buying or selling Danone stocks.
Finally, it is important to note that Danone is theoretically operable since it does not include a reference shareholder. However, for the time being, it is blocking this type of transaction through certain dissuasive measures such as double voting rights, limited voting at shareholders' meetings or financial authorisation during a public offer period. The presence of Caisse des Dépôts in its capital is also a brake on a possible takeover bid.
The French company Danone is currently one of the giants of the food industry in the world. It produces and markets various types of products for mass distribution. The company's activities can be divided according to the proportion of sales they generate.
Danone manufactures its various products in no fewer than 197 factories around the world. The United States is the company's largest market, accounting for 11% of sales. This is followed by the French market with 10% of sales, China and Russia, which each generate 7% of sales, Indonesia, which generates 6% of sales, and the UK and Argentina. Spain and Mexico each generate 5% of Danone's sales, and Germany 4%. The remaining 33% is generated in the rest of the world.
Danone currently employs more than 798 people worldwide, mainly in France.
Photo credits: ©ricochet64/123RF.COM
We now invite you to discover who Danone's major direct competitors are in the food sector and around the world, with a presentation of the companies in this sector with the highest turnover.
This Swiss multinational is currently one of the world's major players in the food industry. It is not only the world's biggest in terms of sales, but also the largest international dairy company. The company processes and markets a wide range of products and beverages for human and animal consumption, and is one of Europe's major innovators in this field, with products such as Nescafé soluble coffee, freeze-dried meals and frozen foods. The group is also listed on the SIX Swiss Exchange.
This company, also known as the Pepsi-Cola Company, is an American multinational specialising in the agri-food sector and known for its drinks, including Pepsi-Cola, and its snack products. It is currently the second-largest food company in the world and the largest in North America in terms of sales. The group currently employs more than 285,000 people worldwide.
This American company specialises in soft drinks and is one of the largest companies in the United States with a worldwide reputation. It is the third largest company in the world in terms of sales after PepsiCo and Nestlé, and is headquartered in Atlanta, Georgia. The group is best known for its flagship product, Coca-Cola, which has become a symbol of Americanism since the end of the Second World War.
This American food company was formed when Heinz acquired the Kraft Foods Group in 2015. Kraft Heinz's cheese brands were acquired by the Lactalis group in 2020.
The Dutch-British multinational, headquartered in Rotterdam and London, is present in over a hundred countries and is the world's fourth-largest food company. It is also the world's leading ice cream and tea producer. The group offers four main product categories
This French multinational in the food industry is mainly active in the dairy products sector. It is the world leader in dairy products and number 3 in organic dairy products. The group is also the world leader in the cheese market. The Lactalis group currently employs more than 85,000 people in nearly 51 countries at 266 industrial sites around the world, and generated sales of more than €21 billion in 2020.
In addition to its competitors, Danone also has partners that enable it to remain competitive and gain even more market share.
In particular, it is a partner of Pepsi-Co with whom it has pooled part of their portfolios for the sale of beverages.
Danone has also partnered with Nestlé to manufacture plant-based plastic bottles for their beverages in 2017.
Finally, Danone has signed a partnership with Starbucks with the aim of creating the Evolution Fresh by Dannon brand and establishing itself on the yoghurt market in the United States.
It goes without saying that the Danone group's first asset is its positioning on the global food industry market. Indeed, the French group is currently the international leader in this sector and is also extremely well positioned in a few activities and types of products in particular. Indeed, Danone is notably the international leader in the fresh dairy products sector and alone accounts for more than 48% of sales. The company is the second largest seller of infant nutrition products, accounting for more than 23% of sales. Finally, Danone is the world number three in the bottled water sector with a 22% market share. It also benefits from an interesting position in the field of medical nutrition.
Investors in Danone shares also appreciate the long-term strategy implemented by the company. This strategy has the main objective of simplifying the group's business portfolio, but also of strengthening the visibility of its brands. Today, five of the company's brands alone generate sales of more than €500 million. Of course, the group's long-term strategy also includes the development of its activities and a long-term presence in emerging countries, which are currently the focus of much interest.
As part of this international development strategy, Danone has the intelligence to concentrate its most important projects in a few priority countries. These include Mexico, Indonesia, China, Russia, the United States and Brazil. These 6 countries offer many advantages, including a large population and therefore significant potential.
The Danone group has already strengthened its position on the US market. This has been made possible in particular thanks to the diversification of its activities in certain niches such as vegetable milk or organic dairy products through the purchase of a few American companies such as Mead Johnson or WhiteWave. Thanks to these recent acquisitions, Danone has succeeded in climbing to the top of the list of companies offering organic products and has doubled its presence in the United States.
Finally, the last advantage of the Danone share concerns the very rating of this company, which is among the best rated in the world, particularly in terms of its social responsibility. It thus gains the confidence of investors around the world.
Although the group's international development strategy is already bearing fruit, Danone's first disadvantage is its very significant exposure to the European market and particularly to the Western European market where it generates more than 40% of its sales. A drop in consumption in this region of the world could therefore have very significant consequences on its share price.
On the other hand, several specific sectors of activity of the Danone group have been showing a slight slowdown for some time. This is notably the case in the field of infant nutrition, and more particularly in the Chinese market, but also in the bottled water sector, also on the Chinese market but also on the European market.
Another important sector of activity for the Danone group, fresh dairy products, is struggling to consolidate in the United States. Indeed, the American market presents very strong price competition in this area. In Europe, this sector is also suffering the consequences of the doubts expressed about the rebound capacity of the Activia brand.
Finally, another investor concern this time concerns the recent acquisition of the WhiteWave company in 2017 for more than $12 billion. This company has indeed issued a profit warning in 2016 and therefore presents some financial risks that should not be overlooked.
To sell or buy Danone shares, you can use the services of an online broker or trading platform. Start by opening a trading account with a reputable online broker. Next, search for Danone's ticker symbol, which is 'BN' on Euronext Paris. Use your broker's trading interface to place an order to buy or sell Danone shares, specifying the number of shares you wish to buy or sell and the price at which you are prepared to execute the transaction. Once your order has been placed, it will be executed on the stock market.
The sites that deal with stock market information on the Danone share cite it under different codes. On the Reuters site, for example, it can be found under the name BN.PA, and on the Bloomberg site it can be found under the name BN FP. On the DataStream site, it is found under the code F :BSN, the ISIN code of this share is FR0000120644 and on some websites, this share is simply called DA.
The date of distribution of the dividend on Danone shares depends on the Board of Directors and the meeting which will determine the group's ability to generate a profit, its financial situation and any other important factor. This meeting will of course take place after the publication of the annual results. You can learn more about the history of this dividend directly on Danone's website.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. {etoroCFDrisk}% of retail CFD accounts lose money. You should consider whether you can afford to take the high risk of losing your money.
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
