Sales for Q3 2013 are up +4.2% on a like for like basis and are steady despite unfavourable exchange rates and the major impact of the recall affecting selected infant formula products in Asia.
The figures also confirm the strong underlying dynamics observed in the first half: Europe continues to stabilize (-0.9%[1]), while sales are up +7.8%[1] in the North America, CIS, Asia-Pacific, Latin America and Africa/Middle East regions.
Focusing on Asia, the false alert issued by Fonterra concerning certain ingredients supplied to Danone triggered the recall of selected infant formula products and led to significant losses in sales, earnings and cash-flow. Action plans to restore sales are being deployed in affected markets and are generating results effectively but very gradually.
As a result, the Group has adjusted its 2013 targets: sales growth between +4.5% and +5%, trading operating margin down -80 bps, free cash-flow between €1.5 and €1.6bn excluding exceptional items.
Beyond these short-term developments, the Group is confident in both its ability to recover its positions in affected countries and in the strength of its growth model.
Source: Danone
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