Danone reports 3.1% sales growth of US$7112m in nine-month sales report

FRANCE – Danone, a French multinational food-products corporation, has reported a 3.1% consolidated sales growth in first-nine months, with sales of US$7112 million.

According to the company, for the three months ending September 30, 2018, consolidated sales stood at US$7.13 billion, up 1.4% on a like-for-like basis, with a 3.3% rise in value more than offsetting a 1.9% decline in volume.

The reported sales were down 4.4% vs. the third quarter 2017, including a negative currency impact (5.2%) driven mainly by the appreciation of the euro against the Argentinian peso, Turkish lira and Brazilian real, which all depreciated by more than 20% in the quarter against last year;

“In the latest quarter, we have seen an encouraging return to growth in Essential Dairy and Plant-Based, alongside strong momentum in Waters.

This demonstrates how Danone is balancing growth across its businesses.

Our performance in EDP and Waters compensated for challenging conditions in China where Early Life Nutrition shows changes in market dynamics following a period of exceptional growth.

We also have the foundations in place to navigate current emerging market volatility and currency headwinds, which will enable us to continue to deliver sustainable profitable growth.

As a result, we have today reaffirmed our guidance for the full-year,” said Emmanuel Faber, Chairman and Chief Executive Officer.

Essential Dairy And Plant-Based (EDP) International registered another quarter of progress in its third quarter performance, with flat sales on a like-for-like basis, including a 5.9% decline in volumes and a 5.9% rise in value.

This represents a 2.6% rise excluding Morocco, with growth in all regions having improved.

Europe delivered an important step towards stabilization with an improving sales profile, while growth continued to be solid in Northern Europe, Southern Europe showed good signs of improvement.

Activia’s recovery is on track, returning to growth in many countries. Alpro, the second largest EDP brand in Europe, continued to grow at a double-digit rate and started to expand into Eastern Europe.

CIS delivered another quarter of strong sales growth, in a category driven by valorized yogurts.

Latin America posted mid-single-digit sales growth, showing progress in the Brazilian turnaround while volumes deteriorated in Argentina.

Sales continued to decline in Morocco, around 35%, affected by the consequences of a consumer boycott.

Essential Dairy And Plant-Based (EDP) Noram delivered its fifth consecutive quarter of meaningful growth acceleration with sales up 2.7% on a like-for-like basis (3.5% excluding Fresh Foods), including 3.4% increase in volume and 0.7% decline in value.

The company added that yogurt delivered solid sales growth and reinforced Danone’s leadership in the fastest-growing segment and dynamic growth in emerging segments, notably probiotics, kids and plant-based.

In Plant-based foods and beverages, Silk and So Delicious posted strong growth, benefitting from buoyant demand for nut-based beverages and successful expansion in adjacent segments (e.g. mousses and ice creams) and formats. Coffee Creamers also posted strong growth.

Trends in Premium Dairy improved, posting slightly decreasing sales but positive volumes in the third quarter.

In Fresh Foods, where sales declined for the quarter, the company remains focused on the business turnaround.

After 12 months of exceptional growth in China (more than 40% in H1 2018 compared to H1 2017), Specialized Nutrition posted a sales decline of 1.5% in the third-quarter on a like-for-like basis, including a 3.9% decline in volume and a 2.4% rise in value.

The Advanced Medical Nutrition delivered solid sales growth in the third quarter, driven by both paediatrics and adult care segments, while continuing to deliver a solid pipeline of patient-centred innovations.

Early Life Nutrition posted negative growth in the third quarter, as sales in China contracted by around 20%, reversing several quarters of exceptional growth, against an unfavourable year-on-year comparison and amid signs of changes in market dynamics in China.

Danone’s strong growth and year-on-year market share gains in direct channels, notably through Aptamil Platinum ultra-premium offering, did not fully offset the decline in the indirect channel.

Outside China, Early Life Nutrition posted solid quarterly growth, especially in Indonesia, Africa and the United States, while Europe was affected by adverse publicity in the UK following formula upgrade introduction.

Waters delivered a strong broad-based sales growth of 6.4%, driven by volume (2.2%) and a significant rise in value contribution (4.2%), reflecting positive mix effects resulting from accelerated innovations and targeted price increases.

Europe registered strong sales growth momentum, supported by successful aquadrinks innovations and benefitted from a hot summer season.

North America posted steep double-digit growth driven by expanded distribution of evian and a new marketing campaign supported by important influencers in the US. Asia reported strong growth despite a weak season in China, with strong growth for Aqua in Indonesia.

Latin America posted positive growth, including moderate growth in Mexico and more challenging conditions in Argentina.

“Excluding Morocco where we continue to face the consequences of a consumer boycott, sales were up 2.2% on a like-for-like basis in the third quarter and 3.8% for the nine months.”

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