Danones water unit posted strong sales growth

Danone's water unit posted strong sales growth

Groupe Danone has reported a solid rise in H1 sales in its bottled water division, as “vigorous growth” in Asia boosted the unit's performance.

The French conglomerate, whose water brands include Volvic and Evian, said today (29 July) that its water unit's sales in the six months to the end of June were up by 9.6% to EUR1.99bn (US$2.64bn). Volumes in the unit also grew, by 5.9%.

Second-quarter sales grew by 10.5% with a 7.1% jump in volumes, eclipsing the first-quarter, when sales rose by 5.5%.

Europe, in contrast to Asia's emerging markets, saw sales continue to fall because of “adverse weather conditions”, Danone said.

Overall group sales grew 6% to EUR11.05bn in the first half, with Q2 sales up 6.5%, beating the consensus forecast among analysts of a rise of 5.7%.

In Europe, excluding the Commonwealth of Independent States (CIS), Danone said half-year group sales were down 4% year-on-year. However, its North American and CIS sales were up 9.3%, while the group's Asia-Pacific, Latin America, Middle East and Africa region saw sales increase 15.9%.

Danone reaffirmed its outlook for full-year sales growth of “at least” 5%. The company said it expected operating margins to fall by 30-50 basis points and that free cash-flow is expected to total around EUR2bn.

Shares in Danone were up 3.22% at EUR59.31 at 11:54 CET.

Danone chairman & CEO Franck Riboud said a restructuring plan in Europe that will cut around 900 jobs is “right on schedule, with the first benefits expected from the second semester onwards”.

To read the company's official statement, click here.

Expert analysis

Danone , Groupe in Soft Drinks (World)

Danone , Groupe in Soft Drinks (World)

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