Strong Chinese demand for baby nutrition products and a slight European improvement helped food group Danone SA post higher than expected second-quarter growth.
Like-for-like second-quarter revenue increased by 6.7% to €5.72 billion, the Paris-based company said in a statement today. Volume increased by 4.1%, the strongest gain in eight consecutive quarters.
Danone's fresh dairy division, which makes up close to 60% of the group's revenue, saw second-quarter sales growth of 2.6% to €6.02 billion.
According to Danone, the Waters division maintained a 'solid growth trend' with sales up 10.5% like-for-like from Q2 2012 and volumes up 7.1%. 'Vigorous growth in emerging countries, particularly in Asia, continued to drive the division'. European water sales remained flat, impacted by 'adverse weather conditions', according to Danone.
Organic sales in baby nutrition jumped almost 14% during the quarter to hit €2.38 billion, with particular growth in China, owing to a spate of domestic food scandals, which have fueled demand for foreign baby formula products.
Along with other major infant formula makers, Danone reduced its baby food prices earlier this month in China, following an investigation by the Chinese government into price-fixing in the category.
"With sales up 6% in the first half, Danone is off to a strong start in 2013 in an economic and consumption context that remains difficult in Europe and in some cases volatile in emerging countries," chairman and CEO at Danone Franck Riboud said in a statement.
Riboud said the group's €200 million European cost-savings plan is running on schedule and should deliver the first benefits in the second half of the year.
© 2013 - ESM: European Supermarket Magazine by Ellen Lunney
