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Danone sees “solid, profitable” growth

Danone has announced what it describes as solid and profitable organic growth in the first half of 2015 with like-for-like sales up 4.6% in the first half (8.8% as reported) and up 4.5% in the second quarter. Trading operating margin was up 53 basis points. Performance, said the company, is in line with Danone’s roadmap, […]

Danone has announced what it describes as solid and profitable organic growth in the first half of 2015 with like-for-like sales up 4.6% in the first half (8.8% as reported) and up 4.5% in the second quarter. Trading operating margin was up 53 basis points. Performance, said the company, is in line with Danone’s roadmap, laying a solid foundation for a model for profitable, sustainable growth.

In Europe, the company said it continued to adapt its Fresh Dairy Products portfolio, while benefiting from Chinese demand for international Infant Milk Formula (IMF) brands.

In China, following the accelerated structural changes in distribution dynamics for IMF, Danone has decided to reallocate its resources within this market and subsequently to revise downward long-term sales projections for Dumex, leading to an impairment of the brand.

Danone announced that it has reached a preliminary agreement with Mengniu and Yashili to merge Dumex in China with Yashili, building a strong local IMF brand platform, and to increase its shareholding in Mengniu.

“First-half growth of 4.6% and half a percentage point rise in margin are fully in line with our Roadmap,” said Emmanuel Faber, CEO. “With a still volatile overall context, we remain focused on our priorities: consolidating our model for profitable, sustainable growth and enhancing our brands and businesses’ ability to serve our consumers’ needs.”

“In Europe, where margins rose significantly, we are executing an overhaul of our Fresh Dairy Products business and finalizing the conditions necessary for a return to growth.”

“In China, we are strengthening our Early Life Nutrition business model, building on the success of our international brands and reinforcing our partnership with Mengniu and Yashili.”

“In the CIS and in North America, we are guiding our operations carefully through the current transition, to get growth back on track while pursuing investments to develop the category. In each region, half-year results confirm the efficient execution of our plans and the excellent work done by our 100,000 employees.”

“Building on our unique culture, brands, geographical platforms, talent of our teams and trust of our partners, we work every day to lay the foundations for sustainable, profitable growth and are moving to deploy our Danone 2020 transformation plan for economic and social value creation serving Danone’s corporate mission.”