Danone records sales growth in all units during second quarter

FRANCE – Danone posted a 2.5% increase in like-for-like sales in the second quarter as it was boosted by the performance of its baby food products in China.

The company which owns brands such as Alpro, Actimel and Volvic posted sales of €6.5 billion (US$7.24 billion) for the quarter, with each of its segments posting positive figures.

For the first half of the year, like-for-like sales were up 1.7% to €12.65 billion (US$14.1 billion) and like-for-like operating income rose 6.4% to €1.86 billion (US$2.07 billion).

In Danone’s essential dairy and plant-based business, its largest unit, Alpro posted double-digit growth in the second quarter in Europe, while the company gained market share in the ready-to-drink coffee segment in North America.

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Within the specialized nutrition division, baby food sales in China delivered positive growth following three consecutive quarters of decline.

Danone drew attention to increased baby food sales in low-tier Chinese cities and through e-commerce.

Second-quarter revenue was up in the waters unit, but sales in Europe were slightly down, adversely impacted by poor weather conditions in May with temperatures below average.

Despite the positive sales figures, all three units posted a decline in volumes in the quarter.

“Our first-half results demonstrate our continued focus on the combination of strong execution and progress in the transformation of Danone, in order to drive agility and resilience, and deliver consistent profitable growth,” said Danone CEO Emmanuel Faber.

“I was pleased to see top-line accelerating in the second quarter, with growth across all our businesses.

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“The innovation momentum remains strong, while we have addressed most of the under performers in our portfolio.

“Our margin improvement was of high quality, driven by gross margin progression, and further savings from our protein efficiency programme.

For 2019, Danone is targeting like-for-like sales growth of around 3%.

“As this short-term delivery is served by our long-term focus on creating value in a responsible and inclusive way, we are well on track for our 2020 objectives.

“With unchanged expectations for the full year, I am confident that the improved fundamentals of our business will continue to drive top-line growth acceleration and margin expansion throughout rest of the year.”

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