Danone has summer feeling

Related tags Cent Groupe danone Danone

The hot weather in July and August gave a major boost to third
quarter sales at Danone, whose brands include Evian and Volvic
bottled water.

The hot summer weather across Europe helped French group Danone lift its sales in the third quarter of the year, but figures continued to be impacted by the effect of currency translations.

Danone​, which owns the Evian and Volvic bottled water brands and is the world's largest supplier of water coolers through a joint venture with the Suntory Water Group, saw drinks sales grow by 15.3 per cent in the third quarter of the year, nearly twice the growth rate for the first half as a whole, helped by the hot weather in July and August.

But in actual terms, drinks sales were 3 per cent lower in the first nine months of the year at €2.9 billion as the impact of currencies and the disposal of Italian food group Galbani took their toll. Sales over the nine months from the drinks arm were also affected by the SARS outbreak earlier in the year, the company said.

Goldman Sachs last week predicted like-for-like growth of 7.4 per cent for the third quarter at Danone, but even this bullish forecast was far lower than the 9.4 per cent actually recorded during the period.

Total group sales for the nine months were €10.1 billion, up 8 per cent on a like-for-like basis but down 3.5 per cent in actual terms from the €10.5 billion posted a year earlier after a negative impact of 7.2 per cent from currency translation and a 4.2 reduction as a result of disposals.

Not surprisingly, the drinks arm showed the best growth during the period, registering 11.1 per cent growth over the nine months to €2.91 billion on a like-for-like basis. But the yoghurt unit also performed well, lifting comparable sales by 9.9 per cent to €4.67 billion over the nine months.

The biscuit arm, which includes brands such as LU, one of France's biggest sellers, and Jacob's in the UK, showed more modest growth, increasing sales by 1.3 per cent to €2.3 billion, again on a like-for-like basis. Actual sales fell by 5 per cent.

The group's other food brands, which include HP Sauce and Lea & Perrins in the UK, saw comparable sales edge slightly ahead (0.9 per cent) to €235 million. Reported sales were down 12 per cent, however.

Danone said it expected full year sales to grow by around 5 to 7 per cent this year, while the operating margin will be 20 to 40 basis points higher, at the top end of its forecasts.

Related topics Manufacturers Danone

Follow us