Danone CEO Riboud said results backed decision to invest in emerging markets

Danone CEO Riboud said results backed decision to invest in emerging markets

Danone Waters has posted an increase in third-quarter sales and confirmed its full-year targets for growth.

For the three months to the end of September, sales in the firm's waters division climbed 17.4% to EUR786m (US$1.10bn) and 8.7% on a like-for-like basis, the strongest since the fourth quarter of 2007, the bottled water producer said today (21 October).

A 7.6% rise in volumes reflected continued double-digit growth in emerging markets combined with a positive performance in mature markets, which the firm said were mainly attributable to favourable weather in Japan and, to a lesser extent, in Europe.

Total group sales, meanwhile, rose 15% to EUR4.35bn. Excluding the effects of changes in exchange rates and in the scope of consolidation, sales growth stood at 6.9% on a like-for-like basis.

For the first nine months of 2010, sales in the waters division reached EUR2.23bn from EUR2.02bn in the prior year period. Group sales climbed to EUR12.71bn from EUR11.30bn last year.

“These positive results, achieved in the face of difficult economic conditions marked by weak consumer demand in Europe and rising raw material prices,” said chairman and CEO Franck Riboud. “They also provide added support for our decision to continue investing in the emerging markets that are our priorities as drivers for both present and future growth.”

For the 2010 year, Danone confirmed its target of like-for-like sales growth of at least 6%, a “stable” trading operating margin versus 2009 on a like-for-like basis and an increase in free cash flow from operations of at least 10% versus 2009 on a reported basis.

Click here to view the full earnings release.