• Danone H1 LFL sales up 4.6%
  • 53 bps rise in operating margin
  • Trading operating income up 9.3%

Danone has insisted its fresh dairy operations are poised for a "return to growth" despite lower revenues at the unit in the first half of 2015.

Reporting its half-year results this morning, Danone said its fresh dairy sales dipped 0.4% on a like-for-like basis. Volumes fell 3.9%.

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Danone CEO Emmanuel Faber said the company continued to make progress on its turnaround efforts in fresh dairy. "We are executing an overhaul of our fresh dairy products business and finalising the conditions necessary for a return to growth."

The Activia owner's total first-half group sales increased 8.8% on a reported basis and 4.6% organically, rising to EUR11.39bn.

The group's overall top line beat consensus analyst expectations for growth of 4.4%.

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Gains were underpinned by an 11.3% rise in early life nutrition sales as well as higher revenues from Danone's medical nutrition and waters businesses.

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Danone also reported a 53 basis point improvement in operating margin, with trading operating income rising 9.3% to EUR1.38bn in the six months. Underlying EPS grew 6.8% to EUR1.37 per share.

Danone confirmed its outlook for full-year organic growth of 4-5% and a slight improvement in trading operating margins.

Alain Oberhuber, an analyst with MainFirst, said Danone's organic growth rates "remain the highest in the sector with a gradual improvement in operating margins". He said the company posted a "stronger" organic growth rate than anticipated while earnings were on-target.

The company also announced changes to the structure of its infant formula business in China. Click here for details.