Danone's dairy disappoints, water booms

Higher prices for raw materials, especially milk and plastic, weighed heavily on Danone's result in the first semester of 2011. The world's biggest yoghurt producer had to fight a decrease in the dairy sales and had its net profits drop under analysts' expectations.

 

Danone is the first large food producer to announce its semi-annual results, but started the trend in a rather negative way. Net profits were with 861 million euro (still a small rise compared to last year) well below the expected 899.1 million. The total sold volume of Danone group dropped by 0.3% - especially in the dairy segment, which makes up 60% of Danone's turnover. Both the higher dairy prices (+5.7%) and the reorganisation at Danone's Russian daughter Unimilk led to the weaker results. 

 

One segment in which Danone did earn a very positive result is that of bottled water: Evian and Volvic grew 17% in this year's first semester, largely because of the very warm spring in Europe and the temporary unavailability of tap water in Japan after the earthquake.

 

For the whole of 2011, Danone aims for a turnover growth of 6 to 8%, expanding mostly in the US and newer markets as China, India, Indonesia and Mexico.

 

Higher prices for raw materials, especially milk and plastic, weighed heavily on Danone's result in the first semester of 2011. The world's biggest yoghurt producer had to fight a decrease in the dairy sales and had its net profits drop under analysts' expectations.

 

Danone is the first large food producer to announce its semi-annual results, but started the trend in a rather negative way. Net profits were with 861 million euro (still a small rise compared to last year) well below the expected 899.1 million. The total sold volume of Danone group dropped by 0.3% - especially in the dairy segment, which makes up 60% of Danone's turnover. Both the higher dairy prices (+5.7%) and the reorganisation at Danone's Russian daughter Unimilk led to the weaker results. 

 

One segment in which Danone did earn a very positive result is that of bottled water: Evian and Volvic grew 17% in this year's first semester, largely because of the very warm spring in Europe and the temporary unavailability of tap water in Japan after the earthquake.

 

For the whole of 2011, Danone aims for a turnover growth of 6 to 8%, expanding mostly in the US and newer markets as China, India, Indonesia and Mexico.

 

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