French food group Danone said it banked on synergies from its acquisition of U.S. organic food producer WhiteWave and on a one billion euro cost-cutting plan to lift its recurring operating margin above 16 percent of sales in 2020.
The world’s largest yoghurt maker made the forecast in a statement issued on the last of a two-day seminar in Evian, eastern France, to detail its long-term strategy.
Danone also said it targeted overall like-for-like sales growth of between 4 percent and 5 percent in 2020 against 2.9 percent in 2016. Its operating margin stood at 13.77 percent last year.
Danone unveiled in July 2016 plans to buy WhiteWave – maker of Silk almond milk and Earthbound Farm Organic salad – in its largest acquisition since 2007, a move it said would double the size of its U.S. business. The deal finally closed on April 12.
Whitewave’s products have outperformed mainstream packaged food businesses in recent years as they are in line with a consumer shift toward natural foods and healthier eating and should help Danone as it struggles with challenging conditions in dairy in Europe and babyfood in China.