Danone Sales Dented by Stronger Euro
April 19 2016 - 2:20AM
Dow Jones News
PARIS—French dairy maker Danone SA said Tuesday that
first-quarter sales dropped 3% as the strengthening euro curbed
revenue in emerging markets.
Danone, which manufactures Activia yogurt and Evian water, said
sales fell to €5.3 billion ($5.98 billion) from €5.5 billion in the
first three months of the year, in line with analyst estimates
according to a company-compiled consensus.
Stripping out currency shifts, acquisitions and disposals, sales
rose 3.5%, in line with the company's full-year sales target as the
company's four business units posted growth.
The trading update to the year comes as food giants wrestle with
slower economic growth in many markets and changing consumer
preferences. Nestlé SA last week reported its slowest first quarter
growth rate since 2009, although its organic growth came in
slightly ahead of analysts' expectations. Unilever PLC, the maker
of Ben & Jerry's ice cream, said its foods business remained a
relative laggard, with sales growing by just 1.9%.
Danone Chief Executive Emmanuel Faber, who took the reins of the
company in October 2014, has vowed to deliver "strong, profitable
and sustainable growth" by 2020, reviewing its business in China
and restructuring its fresh dairy unit where he has cut costs and
focused on its most popular brands.
Fresh dairy sales, which account for about half of group
revenue, rose 2.3% to €2.7 billion on a like-for-like basis
compared with the same period last year. First-quarter revenue at
its water division, which includes the Evian brand, increased 3.9%
on a like-for-like basis to €1 billion.
Meanwhile, the group's early-life nutrition business posted
revenue of €1.2 billion—4.8% above the first quarter last year on a
like-for-like basis.
Danone, which doesn't report profit at the three month stage,
confirmed its full-year targets but again warned that the economic
backdrop will remain difficult this year. Danone said rising raw
material costs would also likely continue to weigh on sales growth
throughout 2016.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
April 19, 2016 02:05 ET (06:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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