French food and beverage group Danone has posted like-for-like sales growth of 7% for the first nine months of the year, and confirmed its full-year targets.
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Consolidated sales for the first nine months rose by 4.4% to EUR11.24bn (US$15.9bn).
The company, which also posted like-for-like sales growth of 3.9% for the the third quarter, highlighted dairy and biscuits as its strongest performing categories, but said its drinks business had declined in the third quarter owing to bad weather and a fall in sales in China.
“The double-digit growth, quarter after quarter, of our Fresh Dairy business, the capacity of our teams to proactively manage the unfavourable impact of increases in raw material prices, and market share gains in all major geographies are strong indicators of the resilience of our growth model,” said chairman and CEO Franck Riboud.
Riboud said poor weather in Europe had also affected its business, while its continued dispute with its Wahaha drinks partner in China was also a negative factor. However, he said the strength of Danone’s growth model was “remarkable” and he was “very confident” that the group will meet its annual financial targets.”
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By GlobalDataThe company is forecasting an improvement in operating margin of 20 percentage points for the full year, with organic sales growth of between 6% and 8%.
Danone added that it had put through dairy price increases linked to input cost inflation in all regions. However, it said that growth in dairy sales in France and Spain was slower than in other regions reflecting strong prior period comparables.
The rest of Europe maintained double-digit growth in dairy sales, with Russia showing growth rates above 30%, the company said. Latin America saw mid-teens growth rates, supported by “very strong” growth in Argentina, while sales growth in North America accelerated into the mid-teens on the back of the continued progress of the Activia brand and the launch of Danactive (Actimel) earlier this year.
Meanwhile, the 6.6% growth in biscuit sales reflected growth in Europe of nearly 5%, and continued progress in Asia.
Danone’s 2007 audited results will be published on 14 February, 2008.
