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just the Facts - Danone bottled water sales

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Danone is rumoured to be considering a sale of its bottled water business, but figures show that the unit continues to contribute a significant proportion of group sales.

Bloomberg reported today (18 October) that Danone has been talking to Suntory about the possible sale of its bottled water unit, potentially in order to expand further into infant nutrition.

However, a spokesperson for Danone told just-drinks that the water business remains strategic for the group. Figures on the group's water sales over the last three years appear to support this assertion, with water representing 16.9% of Danone's net sales in 2010.

That said, in 2009 water was overtaken by baby nutrition as the second most important contributor to Danone's net sales. Dairy is the largest contributor to sales and, according to nine-month figures released today, is on-track to increase its importance to Danone in 2011.

Some analysts have said that it could make sense for Danone to sell its waters business, particularly if it intends to move further into nutrition. The first chart below shows that Danone's waters business has the worst operating profit margins out of the company's four business units. This has easily been the case since 2008, when the group began detailing specific results for the waters business. Baby nutrition, meanwhile, has steadily improved margins.


Sectors: Soft drinks, Water

Companies: Groupe Danone, Suntory

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