Baby food and growth markets keep Danone on course

Baby food strongest grower

Danone had a rise in sales of 4.3% to 5.34
billion euro in the first quarter of this year. Comparable sales (not including
currency fluctuations) rose by 5.6 percent: 3% because of extra volumes, 2.6%
was because of higher prices.

The French company saw the sales of baby food
rise by 7.8%, while medical food had 6.2% higher sales. The water division
climbed by 4.6%, while the dairy branch had to be satisfied with a rise in
sales of no more than 0.5% percent.

Western Europe remains difficult

“The solid performance in the first quarter
once again reflects the contrast between robust growth in growing markets and
the slow market in Europe”, says CEO Franck Riboud. In Western Europe sales of
Danone did shrink again: -5.1%. Danone had the
largest growth in Latin-America, Asia, the Middle East and Africa: +16.6%. The
United States, Canada, Central and Eastern Europe are somewhere in between with
+8.5%.

Danone did confirm their earlier prospects for
2013: a comparable growth in sales of at least 5%, in combination with a
decreased operational margin by 30 to 50 basis points. Analysts do however
predict rising pressure on prices in Russia and China.