Danone reports 0.8% rise in first-quarter sales, maintains full-year outlook

FRANCE – Global dairy giant, Danone has reported 0.8% increase in first-quarter sales to US$6.89 billion (€6.13 billion), confirming 2019 full-year profit guidance.

The company expects like-for-like sales growth of around 3% and recurring operating margin of more than 15% in the year 2019.

Consolidated sales during the quarter were boosted by a 3% rise in value, premium innovations and resilient pricing.

The period was impacted by a slow business in Morocco, offset by a boycott that started in April last year while Argentina contributed to company reported growth by +0.3%.

The company said overall reported sales were up 0.9% including currency

impact of -0.2%.

“The first quarter showed a start of the year in line with expectations and further progress in our transformation journey,” said Emmanuel Faber, Chairman and Chief Executive Officer.

“This performance has coincided with continued action to deliver sustainable profitable value growth, including the sale of Earthbound Farm, alongside the roll out of value-added innovations across businesses and geographies to make our portfolio more local, more appealing to younger generations, and better suited to fast-changing consumer trends.

“We are pleased with the momentum of the business, which will become increasingly visible from the second quarter.

“This gives us every confidence that we will meet our full-year guidance.

“We also remain totally committed to creating a company aligned with the food revolution, harnessing the collective voice of our 100,000 Danoners and realizing the vision of One Planet. One Health.”

Danone has announced Essential Dairy & Plant-based Noram and International as a single EDP entity from the first quarter.

Under the new reporting structure, Europe and Noram represents around two thirds of the entity.

Essential Dairy & Plant-based segment reported o.25 rise in sales with North America contributing lower sales while the US yogurts market was boosted by investments in growing segments such as plant-based, probiotics and low-sugar yogurts.

In Latin America, Mexico posted strong sales growth while Europe was supported by value-added innovation in fast growing trends such as organic, probiotics shots, plant-based and on-the-go.

Specialized Nutrition reported sales up +0.4% led by Advanced Medical Nutrition, which registered a mid-single digit increase.

In Early Life Nutrition, growth was adversely impacted by decreasing sales in China compared with the very strong 50% growth in Q1 2018.

Danone Waters delivered a solid broad-based sales growth of 3.9% which was particularly strong in Poland and Denmark, also supported by Asia (Indonesia).

In the U.S., Evian delivered strong growth as a result of expanded distribution and market share gains in convenience stores.

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