Dairy adds sour taste to Danone's 'resilient' year
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Dairy adds sour taste to Danone's 'resilient' year

Danone the French food major reported the competitive market sales this fiscal driven largely by the success of its bottled water such as Evian and baby food brands, but its dairy business stagnated.

Danone in a statement said the competitive market sales this fiscal were driven largely by the success of its bottled water such as Evian and baby food brands, but its dairy business stagnated.

Danone in a statement said that bottom-line net profit jumped by 43 percent to 2.4 billion euros ($2.9 billion) last year, boosted by windfall gains from the sale of Stonyfield in the US and a positive impact from US tax reforms.

Underlying or operating profit rose by 17 percent to 3.5 billion euros, while revenues grew 12.5 percent to 24.6 billion euros.

Chief executive Emmanuel Faber said, "In 2017, Danone once again demonstrated the strength of its portfolio (and) the resilience of its business model. Despite volatile food and beverage markets and rising input costs, we delivered very strong full-year results. We closed the year with an accelerated sales growth rate, outperforming the industry average, along with very strong margin improvement."

Analysts at Jefferies welcomed the progress Danone had made on a group-wide basis, but noted the "recurring difficulties in fresh dairy products" business.

Sales in the "essential dairy and plant-based" food products division declined by 1.3 percent internationally and by 2.0 percent in the North American business.

Contrarily, sales in the specialised nutrition division, which comprises both baby foods and medical nutrition, jumped by 9.3 percent and sales of bottled water were up by 4.7 percent.

Looking ahead to the current year, chief financial officer Cecile Cabanis said, "Navigating sustained market volatility is becoming a normal and inherent part of our operating model. Our ongoing focus on accelerating growth and driving efficiencies makes us confident."

Underlying or operating profit rose by 17 percent to 3.5 billion euros, while revenues grew 12.5 percent to 24.6 billion euros.

Chief executive Emmanuel Faber said, "In 2017, Danone once again demonstrated the strength of its portfolio (and) the resilience of its business model. Despite volatile food and beverage markets and rising input costs, we delivered very strong full-year results. We closed the year with an accelerated sales growth rate, outperforming the industry average, along with very strong margin improvement."

Analysts at Jefferies welcomed the progress Danone had made on a group-wide basis, but noted the "recurring difficulties in fresh dairy products" business.

Sales in the "essential dairy and plant-based" food products division declined by 1.3 percent internationally and by 2.0 percent in the North American business.

Contrarily, sales in the specialised nutrition division, which comprises both baby foods and medical nutrition, jumped by 9.3 percent and sales of bottled water were up by 4.7 percent.

Looking ahead to the current year, chief financial officer Cecile Cabanis said, "Navigating sustained market volatility is becoming a normal and inherent part of our operating model. Our ongoing focus on accelerating growth and driving efficiencies makes us confident."

 
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