Sunday 19 November 2017

Danone’s sales up 3pc to €5.4bn in first three months of 2017

Activia fat-free yoghurt
Activia fat-free yoghurt
Ellie Donnelly

Ellie Donnelly

Danone has reported strong results for the first three months of the year, with sales of €5.4bn, up 3pc year-on-year.

However organic sales at the food products corporation increased by just 0.7pc year-on-year, with volumes declining by 2.6pc.

The company, who’s brands include activia and actimel, reported positive organic sales growth in three of its four divisions.

In its fresh dairy division, organic sales declined 2.3pc year-on-year in the quarter, with volumes falling by 5.3pc.

The poor volume was driven mainly by Latin American and European markets.

European dairy in particular struggled despite the relaunch of the Activia brand, while market conditions in Brazil were difficult.

For the next three months of 2017 Danone expects low-single-digit negative sales growth in the fresh dairy division.

Read more: Single digit growth in milk prices predicted for European farmers

Sales of early life nutrition products were up 4.1pc on an organic basis, the solid performance highlighting major gains in developing a direct distribution model in China, where direct sales benefited from double-digit growth.

Meanwhile, Danone’s medical nutrition also grew strongly, with sales up 8.8pc on an organic basis. These figures reflect the division’s strong performance in Europe and continued growth in emerging markets, mainly driven by China.

Its sales of water products were up 1.7pc, however the segment was still impacted by the transition of Mizone and tough competition.

On the conference call announcing the results, Danone categorised its second quarter as a “transition quarter”, which suggests limited revenue progression.

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