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Danone: 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.

BN.PA

EUR 72.06

0.03%

A-Score: 5.8/10

Publication date: February 20, 2026

Full Report

Author: Analystock.ai

📋 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.

Danone's A-Score