Danone moderates its ambitions for the current year

18/10/2019

18/10/2019

The Danone food group saw its turnover grow by 3.7% to 6.4 billion euros (7.0 billion francs) in the third quarter, but slightly revised down its forecasts for the year .

After revenue growth of 2.1% in the first nine months of the year in organic data, Danone said it was now aiming for 2019 a turnover growth of between 2.5% and 3% on a comparable basis, compared with 3% previously.
Its current operating margin target of more than 15% remains unchanged.
The move upmarket (+ 4.6%) remained the main driver of growth in the quarter, positive in all areas. Down 1.6%, volumes were affected by slower demand for Water in Europe and dairy products in Russia.
Sales of dairy and vegetable products remained stable over the quarter at 3.2 billion euros.
"North America and the CIS area face tough market conditions," concerning dairy products, while the momentum has "remained good" in other regions, the group said in the statement.
Morocco, which last year saw a boycott of dairy products that dragged sales down for a long time, posted sales growth of more than 10% this quarter.
Waters also remained stable at 1.2 billion euros.
"The weather conditions were not favorable in our key markets" this summer, explained the financial director, Cecile Cabanis, during a conference call.
Sales of Specialized Nutrition grew by 11.4% to 1.9 billion euros in the third quarter, combining a volume increase of 0.8% and a value effect of 9% due to many innovations.
In China, sales increased by more than 20% and increased in absolute value compared to the previous quarter to reach a record level of sales.

ats, awp, afp