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Update - EUROPE: Weather boosts Nestle, Danone water sales - analyst

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Good weather in Europe helped bottled water rivals Danone and Nestle to report "unusually strong" results for the third quarter of 2010, an analyst has said.

Danone said yesterday (21 October) that its bottled water sales rose by 17.4% to EUR786m (US$1.10bn) for the three months to the end of September. Sales rose by 8.7% on a like-for-like basis, the strongest since the fourth quarter of 2007.

Meanwhile, the Evian producer's rival, Nestle, today reported a 4.3% rise in like-for-like net water sales for the first nine months of this year. Both firms reported growth in Europe, where consumer demand for bottled water has faltered in the last couple of years and where national economies remain depressed.

"Both companies reported unusually strong Q3 performances in water," independent analyst James Amoroso told just-drinks. "Whilst Nestle was less specific about the effects of weather, Danone did mention the positive impact in Europe and this will also have benefited Nestle," he said.

However, he said the results showed that the two firms would continue to look outside of Europe for growth.

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"Both companies had strong underlying growth in their two main other geographies: Danone in emerging markets (ie Asia and Latin America) and Nestle in North America," he said.


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