Danone’s first quarter sales up by a modest 0.8%

Danone’s first quarter results show a slight growth in sales despite decreased infant milk formula sales in China and the consumer boycott by Morocco last year.

On Wednesday, April 17, Danone announced that its first quarter sales were up by 0.8% to €6.14 billion from €6.09 billion in the first quarter last year.

Emmanuel Faber, chairman and chief executive officer of Danone, fobbed off the poor results by saying: “The first quarter showed a start of the year in line with expectations and further progress in our transformation journey.

“This performance has coincided with continued action to deliver sustainable profitable value growth – including the sale of Earthbound Farm – alongside the roll-out of value-added innovations across businesses and geographies to make our portfolio more local, more appealing to younger generations, and better suited to fast-changing consumer trends”.

Danone’s organic salad business, Earthbound Farm, was sold last week to Taylor Farms which it said was “in line with its portfolio management and capital allocation optimisation strategy”.

Essential Dairy Plant-based (EDP)

Their EDP reported a sale increase of 0.2% compared to the first quarter last year, which included a -3.8% decrease in volume and +4.0% rise in value.

Latin America showed the strongest sales growth. However, Morocco sales continued to be impacted by the consumer boycott, decreasing in line with quarter four in 2018.

The plant-based segment – which represents around 15% of EDP sales – posted mid-to-high single digit growth, with all brands growing and extending their market presence, with the exception of Vega.

Specialised Nutrition

The specialised nutrition segment reported sales up 0.4%, when compared to last year’s results – including a 1.3% rise in value and a -0.9% decline in volumes. Although, this is a significantly small increase when compared to the 2018 quarter one increase of 14%.

This sales growth was lead by Advanced Medical Nutrition, which registered a mid-single digit increase, with a strong sales growth in pediatrics.

Their Early Life Nutrition segment was hugely impacted by the decrease in sales in China when compared to the 50% growth in quarter one in 2018.

Although quarter one was slow, Danone expects quarter two to paint a very different picture.

In a statement – Emmanuel Faber, chairman and chief executive officer of Danone – said: “We are pleased with the momentum of the business, which will become increasingly visible from the second quarter. This gives us every confidence that we will meet our full-year guidance.

“We also remain totally committed to creating a company aligned with the food revolution, harnessing the collective voice of our 100,000 danoners and realising the vision of One Planet. One Health.”

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