Danone has reported a 16.6% increase in third-quarter sales today, thanks in part to a recovery in infant formula and water products in China.
The world’s largest yogurt maker said its sales were €6.45 billion during the third quarter – 16.6% higher than last year – reflecting a 0.4% increase in volume and a 4.3% rise in value.
In its Specialised Unit, sales were up 17.83%, reflecting growth in China as well as progress in the company’s strategic priorities, such as the expansion of Tailored Nutition products.
Early Life Nutrition generated growth of over 20%, driven by Danone’s brands in China, as a result of rising birth rates in the country.
However, its dairy business posted a reduction in sales of 2.3%, which was mainly due to a double-digit fall in Brazil. Excluding Brazil, Danone’s dairy sales were flat.
Commenting on the results, Danone CEO Emmanuel Faber said the positive results reflect the company’s ‘solid portfolio’ and a step up in innovation.
“The increase in like-for-like sales has been underpinned by the allocation of additional resources to serve rising demand in Specialised Nutrition, especially in China,” he said. “Strong headwinds remain in Brazil which continue to impact EDP (Essential Dairy and Plant-Based) International negatively. The integration of WhiteWave is on track and starting to deliver results.
“Our increased resource-allocation ability, served by an adaptive organisation, will enable us to pursue our decoupled growth and efficiency agendas to generate profitable growth in the coming periods.
“This confirms my confidence in meeting our objectives for the year, delivering solid shareholder returns and positioning the company for long-term sustainable growth, fully embracing the opportunities of the ongoing Alimentation Revolution.”
The results are a significant improvement on the company’s second-quarter results, when sales grew 0.2% on 2016. Performance was low in its Essential Dairy and Plant-Based business, which was down 1.8% in the second quarter, responding to the Activia relaunch in Europe.
As part of its 2020 objectives, Danone has targeted overall sales growth of between 4% and 5%, with growth higher than 5% in its Specialised Nutrition and Waters units.
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