Danone, the world’s biggest yoghurt-maker, reported first-quarter sales that exceeded analysts' estimates, boosted by higher demand for baby food in Asia.
Revenue rose 4.8 per cent from a year earlier on a like-for-like basis, Paris-based Danone said in a statement. That beat the 4.6-per-cent median analyst estimate in a Bloomberg survey. Volume declined 0.2 per cent. Analysts had predicted no change.
Emmanuel Faber, Danone’s chief executive officer since October, has forecast profitable growth this year, as Europe emerges from an economic slump. The maker of Activia yoghurt has yet to turn around its fresh dairy business, which has been weighed down by years of rising milk prices and weak consumer demand in Europe.
“The first set of results makes me strongly confident that Danone is on the right track to reach a decisive milestone in 2015,” Faber said in the statement.
Like-for-like sales of infant formula and baby food, which exclude acquisitions, disposals and currency effects, jumped 12 per cent in the first quarter, matching analysts’ predictions. The division has rebounded as China promotes e-commerce, driving sales of infant formula made in Europe, as consumers in that market rely on foreign-made products after a series of safety scares.
Revenue at the fresh dairy unit, which accounts for more than half of total revenue, rose 0.2 per cent on a like-for-like basis. The median analyst estimate was for no change. Sales in Europe fell around 4 per cent, Danone said, adding that a decline in volume was partly offset by better pricing.
Faber said in March that the Actimel fermented milk drink and Activia yoghurt brands grew in the fourth quarter.
'The European dairy-cost structure has now stabilised, thus bringing stability to what has been the main drag on group profits in the past three years,' Cedric Besnard, an analyst at Barclays Plc, wrote in a report on 7 April.
Total quarterly sales amounted to €5.47 billion ($5.81 billion), exceeding the €5.4-billion median analyst estimate.
Danone reiterated a forecast for a 2015 revenue increase of 4 per cent to 5 per cent on a like-for-like basis, combined with 'slight growth' in the operating margin.
Bloomberg News, edited by ESM
