Danone Reconfirms 2012 Targets With Third Quarter Growth
Published on Oct 17 2012 3:24 PM in A-Brands
Danone has attested that it is on track to meet its sales target of 5-7 per cent growth for 2012, with the announcement of its results for the third quarter, reporting strong growth in its waters and baby nutrition divisions. However, its share price dropped earlier today (17 Oct) as its sales for the quarter failed to meet market expectations.
The French FMCG giant declared like-for-like growth of 5 per cent for the quarter, and reported growth of 9.4 per cent, reaching €5.26 billion. Like-for-like sales increased 5.6 per cent for the first nine months of the year to €15.73 billion.
The results were underpinned by a strong performance in Asia, with like-for-like growth of 18.3 per cent in the quarter. Europe continued to decline, with consumption dropping in southern Europe. Sales dropped 1.5 per cent during the quarter, with like-for-like volumes falling 2.6 per cent in the first nine months of the year. The company admits that the drop-off in the Spanish market has been "steeper than anticipated".
The Waters division reported strong third-quarter growth, with a 12.3 per cent like-for-like increase, driven by a 5.4 per cent rise in sales volumes and a 6.9 per cent rise due to the price/mix effect. Sales in the first nine months jumped 10.5 per cent year-on-year, to €2.82 billion.
The group's Baby Nutrition business saw like-for-like sales rise 11.5 per cent in the third quarter, boosted by a 7.9 per cent hike in value.
Noting the difficulties in the market, Danone said, "Against this backdrop, our priorities are clear: we will continue to deploy our model in growth regions by investing in our product categories, our brands and our people. In Europe, we need to adapt our model to the slump in consumption and to the needs of our consumers, while building new sources of growth. Our teams will pursue these priorities with determination.” (17 Oct)
© 2012 - ESM: European Supermarket Magazine