Danone sales rise 3.5%, infant nutrition a key sales driver
Danone has posted consolidated sales growth of 3.5% for the first quarter of 2016, compared to the corresponding quarter in 2015, with sales standing at €5.3 billion.
The company’s early life nutrition division saw sales rise 4.8% on the first quarter in 2015, reflecting a 1.3% rise in volume and a 3.5% increase in value.
According to Danone, in Europe the underlying trend is unchanged and as it had anticipated, the high base effect had a slowing effect on apparent like-for-like growth rates.
Meanwhile in China, Danone reports that it continued to build a sustainable growth model by reinforcing its international brands (Aptamil and Nutrilon), managing the conversion of indirect online sales into direct sales, and developing its presence in specialised stores.
Sales in the rest of the world show good momentum, while some countries (Brazil and New Zealand) are significant growth drivers.
A statement from Danone said that growth includes a decline in volumes (-2.1%) and a price-mix improvement of +4.4%.
In Europe, Danone is continuing to make good progress in its transformation program, in line with its roadmap.
CEO of the company, Emmanuel Faber, said that with 3.5% organic growth, Danone delivered a performance fully in line with its 2016 agenda and priorities.
“This growth reflects stable or improving underlying trends across all our businesses, and positive results on key priorities.
“It includes progress on our dairy agenda, with a confirmed re-acceleration in the United States, and sequential improvement in Europe.
“For Waters, it reflects broad-based growth in on all our platforms and the continued transition of the Mizone brand, and for early life nutrition, ongoing actions to build a more sustainable growth model in China.”
Outlook for 2016
Danone is pursuing a major renovation of its brand portfolio, and is planning relaunches throughout the year for Danonino, Actimel and Activia, with a view to stabilizing sales in Europe by the end of 2016.
In 2016, Danone also anticipates upward trends in the cost of its main strategic raw materials.
Against this backdrop, it will continue to strengthen its model through a range of initiatives aimed at offsetting inflation and limiting its exposure to volatility.
Milk prices are thus expected to edge up, with variations from one geographical area to the next:
- Lower prices in Europe and the United States in the first half, with a possible rebound in the second half of the year, and
- Steady price increases in emerging countries all year long, particularly in the CIS.