Groupe Danone increased sales by more than 9% in the first half of 2008, despite a tough second quarter for its bottled water division.

 

Like-for-like sales excluding currency rate changes rose 9.6% to EUR7.7bn (US$12.1bn) during the six months, Danone said today (25 July).

 

Operating profit rose 15.8% to EUR701m, prompting the French dairy, water and nutrition group to reconfirm its full-year guidance.

 

There was a mixed performance from the group's bottled water division. Sales dipped by 0.8% in the second quarter as rises in emerging markets failed to offset difficult conditions in key European markets like France, UK and Spain.

 

Cost rises also caused Danone's profit margin on water to drop below 2007 levels.

 

Total water sales rose 2.6% to EUR2.1bn for the six months, largely thanks to double-digit growth in Asia and Latin America, and particularly Indonesia, Mexico and Argentina.

 

Group chairman Franck Riboud said the firm had accelerated its innovation programme "in those markets where we have recently started to witness softness in consumer spending".