Danone S.A. (BN.PA) | Investment Case

1. Company Snapshot

1.a. Company Description

Danone S.A. operates in the food and beverage industry in Europe, Noram, Latin America, the Asia Pacific, Africa, and the Middle East.The company operates through three segments: Essential Dairy & Plant-Based, Specialized Nutrition, and Waters.It produces and distributes yogurts; milk products; coffee creamers, drinks, and beverages; plant-based products; and ice creams, desserts, and nutritional powdered protein products under the Actimel, Activia, Alpro, Aptamil, Danette, Danio, Danonino, evian, Nutricia, Nutrilon, Volvic, as well as under the licensed brands, including International Delight, Dunkin' Donuts, and Bailey's.

The company also offers specialized nutrition products for pregnant and breastfeeding mothers, infants, and young children under the Aptamil, Nutrilon, Gallia, Cow & Gate, Blédina, Bebelac, Olvarit, and Happy Family Organics brands.In addition, it provides tube feeding products under the Nutrison name; oral nutritional supplements under the Fortimel and NutriDrink names; and hypoallergenic products for children with allergies primarily under the Aptamil ProSyneo, Aptamil Pepti Syneo, and Neocate Syneo names.Further, the company offers water with natural fruit extracts, fruit juice, and vitamins under the evian, Volvic, Aqua, Mizone, Bonafont, Villavicencio, Villa del Sur, Hayat, Sirma, Fontvella, Lanjarón, Salus, Aqua d'Or, and Zywiec Zdroj brands.

It distributes its products through retail chains and traditional market outlets; convenience stores; hospitals, clinics, and pharmacies; and e-commerce.The company was formerly known as Groupe Danone and changed its name to Danone S.A. in April 2009.Danone S.A. was incorporated in 1899 and is headquartered in Paris, France.

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1.b. Last Insights on BN

Danone's recent performance has been impacted by several factors. The company's portfolio reshaping and management initiatives have been in focus, as it works to refine its core brands and geographic focus. A recent share buyback of 3.8 million shares aims to offset the dilutive impact of employee shareholder plans, which is a positive event for shareholders. Additionally, Danone has invested $4M to expand its Texas plant to meet surging consumer demand for high-protein dairy products. The company has also joined thousands of peers with science-based climate targets validated by the Science Based Target initiative.

1.c. Company Highlights

Last Price	69.24
Change Percentage	0.26%
Open	69.2
Previous Close	69.06
Market Cap ( Millions)	44326
Volume	1100091
Year High	80.14
Year Low	63.52
M A 50	70.06
M A 200	73.01

FCF Yield	6.15%
Dividend Yield	3.11%
ROE	11.13%
Debt / Equity	89.37%
Net Debt / EBIDTA	432.96%
Price To Book	2.63
Price Earnings Ratio	24.41
Price To FCF	16.27
Price To sales	1.62
EV / EBITDA	18.94

2. Danone's 2025 Annual Results: Strong Growth and Margin Expansion

Danone reported strong and good quality results for 2025, with 4.5% like-for-like sales growth driven by positive volume mix contributing 2.7%. This growth led to a 44 basis point improvement in recurring operating margin, reaching 13.4%, and recurring earnings per share grew 4.6% to EUR 3.80. The company generated EUR 2.8 billion in free cash flow and improved its ROIC to double-digit territory with a 62 basis point increase. Actual EPS came in at EUR 1.88, beating estimates of EUR 1.84.

Publication Date: Feb -24

                                    📋 Highlights
                                    Strong Sales & Margin Growth::
                                                4.5% like-for-like sales growth (2.7% from volume/mix), 44 bps margin improvement to 13.4%, and EUR 3.80 recurring EPS (up 4.6%).
Free Cash Flow & ROIC::
                                                EUR 2.8B free cash flow and 10.7% ROIC (62 bps increase), reflecting operational efficiency and capital allocation discipline.
Category & Regional Performance::
                                                Double-digit growth in Specialized Nutrition (7.4%) and Medical Nutrition, with CNAO surging 11.7% and Latin America up 6%.
Strategic Innovations & Acquisitions::
                                                EUR 1B+ Oikos PRO revenue, Kate Farms acquisition ($500M platform), and 10.7% ROIC, driven by gut health, high-protein, and infant formula trends.
2026 Outlook & Risks::
                                                3-5% like-for-like sales growth guidance, potential 0.5-1% Q1 2026 impact from IMF recall, and EDP margin expansion to double digits in focus.

                                

Segmental Performance

The company's growth was powered by fast-growing platforms, including high protein, gut health, infant formula, and medical nutrition. High protein saw significant growth, with Oikos PRO exceeding EUR 1 billion revenue in the US. Infant Milk Formula saw strong results, with Aptamil achieving double-digit growth. Medical Nutrition also demonstrated strong growth across adult oral nutrition and tube feeding. EDP business grew 3.5%, Specialized Nutrition grew 7.4%, and Waters grew 1.9%.

Operational Highlights

Danone launched science-based innovations, such as Oikos Fusion, a high-protein product enriched with prebiotic fibers, and Alpro's Meal To Go drinks. The company is strengthening its capabilities, including operations, digital execution, and innovation. Danone invested in cutting-edge research, inaugurating its OneBiome Laboratory and acquiring The Akkermansia Company. The company made strategic acquisitions, including Kate Farm, which created a $500 million Medical Nutrition platform in the US.

Outlook and Guidance

For 2026, Danone expects net sales growth of 3-5% like-for-like, with recurring operating income growing faster than sales. The company remains focused on innovation, disciplined acquisition, and value creation, with a priority on high-growth, value-added segments. Analysts estimate next year's revenue growth at 4.1%. The Infant Milk Formula recall may have a one-off impact on Q1 2026 performance, estimated to be between 0.5% to 1% of net sales.

Valuation Metrics

Danone's current valuation metrics are as follows: P/E Ratio at 25.39, P/B Ratio at 2.74, P/S Ratio at 1.71, EV/EBITDA at 19.67, Dividend Yield at 2.98%, Free Cash Flow Yield at 5.85%, ROIC at 5.86%, and ROE at 11.14%. The Net Debt / EBITDA ratio stands at 4.33. These metrics suggest that the market is pricing in a certain level of growth and profitability for the company.

3. NewsRoom

Danone: Convening to the Combined Shareholders’ Meeting of April 23, 2026

Apr -01

Source:

Danone backs proteins supplier Standing Ovation

Apr -01

Source:

Global Medical Nutrition Market to Reach USD 31.1 Billion by 2035, Driven by Preventive Healthcare Across North America, Europe & Asia-Pacific - Key Players Nestlé, Abbott, Danone & DSM Lead Innovation

Mar -31

Source:

Herbalife Acquires Cristiano Ronaldo-backed Supplement Company Bioniq

Mar -26

Source:

Danone successfully issues a triple-tranche bond totaling €1.6 billion equivalent

Mar -25

Source:

Danone strikes Argentina dairy JV

Mar -25

Source:

Assessing Danone (ENXTPA:BN) Valuation After Recent Share Price Weakness And Acquisition Activity

Mar -25

Source:

Danone and Arcor strengthen their strategic alliance to unlock new dairy opportunities in Argentina

Mar -24

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Essential Dairy and Plant-Based Products (EDP)

Expected Growth: 4.8%

Driven by increasing demand for healthy and sustainable food options, Danone's essential dairy and plant-based products, such as yogurt and milk, will experience growth, fueled by expanding distribution channels and innovative product offerings.

Specialized Nutrition

Expected Growth: 4.5%

Strong demand for tailored nutritional solutions, driven by increasing consumer awareness of specific life stages and health conditions, such as infant nutrition, allergy management and healthy aging, will fuel Danone's Specialized Nutrition segment growth.

Waters

Expected Growth: 4.5%

Increasing health awareness and demand for natural beverages drive growth in the bottled water segment, led by premium brands like Evian and Volvic

7. Detailed Products

Actimel

A probiotic yogurt drink that supports gut health and immune system

Danone Oikos

A Greek yogurt brand offering high-protein and low-fat yogurt products

Danone Activ

A range of probiotic yogurts and fermented milk products for gut health

Evian

A brand of bottled water sourced from the town of Evian-les-Bains in France

Volvic

A brand of bottled water sourced from the Auvergne region in France

Nutricia

A range of medical nutrition products for patients with specific dietary needs

Karicare

A range of infant formula and baby food products

Aptamil

A range of infant formula and baby food products

8. Danone S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Danone S.A. operates in the food industry, where substitutes are available, but the company's strong brand portfolio and product diversification mitigate the threat.

Bargaining Power Of Customers

Danone S.A. has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand reputation and product quality help to maintain customer loyalty.

Bargaining Power Of Suppliers

Danone S.A. relies on a network of suppliers for raw materials, packaging, and logistics. While the company has some bargaining power due to its size, suppliers may still exert some pressure on prices and delivery terms.

Threat Of New Entrants

The food industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and established distribution networks. This limits the threat of new entrants to Danone S.A.'s market share.

Intensity Of Rivalry

The food industry is highly competitive, with many established players competing for market share. Danone S.A. faces intense rivalry from companies like Nestle, Unilever, and General Mills, which can lead to pricing pressures and advertising wars.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	49.10%
Debt Cost	3.95%
Equity Weight	50.90%
Equity Cost	6.09%
WACC	5.04%
Leverage	96.45%

11. Quality Control: Danone S.A. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Imperial Brands

A-Score: 7.5/10

Value: 5.6

Growth: 5.0

Quality: 6.4

Yield: 9.4

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

Danone

A-Score: 5.8/10

Value: 3.0

Growth: 4.0

Quality: 5.2

Yield: 5.0

Momentum: 8.0

Volatility: 9.7

1-Year Total Return ->

LDC

A-Score: 5.6/10

Value: 6.0

Growth: 2.2

Quality: 4.2

Yield: 3.8

Momentum: 9.0

Volatility: 8.3

1-Year Total Return ->

Nestle

A-Score: 5.3/10

Value: 2.9

Growth: 3.6

Quality: 5.5

Yield: 5.6

Momentum: 5.5

Volatility: 9.0

1-Year Total Return ->

Cranswick

A-Score: 5.3/10

Value: 4.1

Growth: 6.7

Quality: 5.4

Yield: 1.9

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

ABF

A-Score: 5.0/10

Value: 6.5

Growth: 6.1

Quality: 4.9

Yield: 1.9

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-3.69%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.04%

Danone S.A. - FR0000120644

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on BN

1.c. Company Highlights

Less Volatile

Average Growth

Fairly Valued

Earnings Beats

Revenues Miss

Earnings Miss

Revenues Beats

Lower Growth

Strong Momentum

Expensive

Better Quality

Stable Momentum

Average Quality

2. Danone's 2025 Annual Results: Strong Growth and Margin Expansion

Segmental Performance

Operational Highlights

Outlook and Guidance

Valuation Metrics

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Essential Dairy and Plant-Based Products (EDP)

Expected Growth: 4.8%

Specialized Nutrition

Expected Growth: 4.5%

Waters

Expected Growth: 4.5%

7. Detailed Products

Actimel

Danone Oikos

Danone Activ

Evian

Volvic

Nutricia

Karicare

Aptamil

8. Danone S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Danone S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

69.24$

Current Price

69.24$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA