Danone’s infant formula recall and the Iran war have hit first-quarter sales at the French food group.
CEO Antoine de Saint-Affrique praised a “resilient” performance as the group grew like-for-like sales 2.7% to €6.7bn off the back of 1.5% volume/mix growth.
“Against a challenging backdrop, we delivered a solid performance,” said de Saint-Affrique, reaffirming the company’s guidance for 3%-5% sales growth for the full year.
“Our winning platforms continued to perform strongly, notably in dairy with high-protein skyr and kefir, in waters with Evian and Mizone, as well as in medical nutrition around the globe,” he said.
“We accelerated our transformation with the signing of two transactions that will further strengthen our portfolio: the acquisition of Huel, extending our presence in the fast-growing complete nutrition space, and the creation of a dairy joint venture with Arcor, unlocking new opportunities in Argentina. Meanwhile, we remained constructively dissatisfied and focused on delivering on our priorities and addressing the areas that still require further progress.”
Read more: Why pricey Huel will be worth the money for new owner Danone
The recall and Middle East conflict impacted EMEA results most severely. In the region, Danone’s like-for-like sales rose just 0.6% as volume/mix fell 1.4%.
Despite its slower growth, Danone largely outperformed market expectations. Strong growth of 6% in APAC and an acceleration to 3.4% like-for-like growth in the Americas has given investors “key areas of reassurance” according to Jefferies analyst David Hayes.
“This is a good enough update and probably sees [Danone’s] shares trade ahead of peers today,” he said.
“Group sales meet consensus expectations, and the commentary on improving momentum in US and the beat in China will be reassuring.”
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