Danone posted a 3.3% increase in its like-for-like second-quarter sales as it benefitted from strong growth of its infant formula brands in China.
The France-headquartered company – which owns brand such as Activia, Actimel and Evian – was however affected by lost dairy sales in Morocco. In total, second-quarter sales were €6.71 billion.
For the first half of the year, sales were €12.45 billion, while operating income rose by 3.9% to €1.78 billion.
Its international dairy and plant-based business, the company’s largest unit, posted a sales decrease of 2.4% in the second quarter, which were hit by a 40% reduction in sales in Morocco due to a consumer boycott. A truckers’ strike in Brazil – which also affected the latest Nestlé and Unilever results – meant revenue continued to decline in the country.
In Danone’s North American dairy and plant-based business, sales were up 1.4% in the second quarter, thanks to the growth of its coffee creamers brands and yogurt innovations.
In the company’s specialised nutrition division, sales were up 10.6% in the second quarter, boosted by a 30% sales growth in China, alongside growing contributions from Latin America, India and Africa.
Danone CEO Emmanuel Faber
Danone CEO Emmanuel Faber said: “In the first half of the year, Danone delivered another semester of strong results, combining sales growth momentum, strong margin improvement, and improved free cash flow. This performance, achieved despite ongoing volatility and unexpected headwinds in some markets, reflects the underlying strengths of our business and our continued financial discipline.
“The performance was underpinned by notable progress in rebalancing the growth profile of our portfolio and widening sources of growth, while delivering initial savings from our €1 billion efficiency program Protein. Excluding the exceptional situation in Morocco, all reporting entities delivered growth in the second quarter. Demand remained strong for specialised dutrition in China, waters achieved broad-based growth and essential dairy and plant-based returned to growth, reflecting benefits from the WhiteWave acquisition and organic improvements in fresh dairy in key regions.
“This leads me to confirm our guidance for the year. Looking to the longer term, we have this summer started to work on the Danone 2030 goals that were unveiled at our last annual shareholder meeting. These goals reinforce the importance of our ‘One Planet. One Health’ vision which has become a unique way to create and share sustainable value for all.”
Last month Danone agreed to acquire a 49.9% stake in Yashili New Zealand Dairy Company, which produces a range of dairy products such as infant formulas for consumers in China and New Zealand.
Danone’s investment arm, Danone Manifesto Ventures, is reportedly looking to invest in between 20 and 25 companies by 2020, focusing on a wide range of sectors in the food and beverage industry, from infant nutrition brands to alternative protein sources.
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