Danone suffers because of exchange rate fluctuations | RetailDetail

Danone suffers because of exchange rate fluctuations

Danone suffers because of exchange rate fluctuations

French food concern Danone had a 5.2 % lower turnover in the first quarter of 2014, mostly because of exchange rate fluctuations. In like-for-like turnover, there was a 2.2 % increase.

5.06 million euro turnover

The french manufacturer of yoghurt, water, baby food and medical food had to accept a 5.06 million euro turnover in the first quarter - with averse exchange rates (mostly in Argentina, Russia, Brazil and Indonesia) affecting the numbers 8.9 %. On a like-for-like basis, the company had a 2.2 % turnover increase, even though that was slightly below analyst expectations (at 2.3 %).

 

Financial director Pierre André Térisse had to admit that "milk price inflation remained above 10  %" and that the company had to increase its prices, which had its effect on sales volumes.

 

Baby food the only one in red

If every branch is considered on its own merit, then baby foods is the only branch which has had to take a hit on a like-for-like basis (- 7.7 %). The Fonterra crisis is still showing its negative effects, when that supplier from New Zealand warned for possible issues with botulism. That turned out to be futile, but did cause Chinese baby food sales to plummet. 

 

Every other branch moves ahead: fresh dairy + 3.9 % (despite volumes dropping 3.7 %), water + 8.9 % (volumes +5.4 %) and medical food + 5.2 % (volumes + 4.3 %). Danone confirmed its outlook for 2014 and estimates to get a similar 4.5 % to 5.5 % turnover growth and stable margins.

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