Danone Q3 growth slows, confident for 2012

Reuters

By Dominique Vidalon

PARIS (Reuters) - French food group Danone said on Tuesday that softening commodity prices, robust growth in emerging markets and the expected benefits from the integration of Unimilk in Russia made it confident for 2012.

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The world's largest yoghurt maker, whose brands include Actimel and Activia, also kept its full-year 2011 outlook, though it reported slower sales growth in the third quarter due to sluggish dairy sales in Russia and the United States.

Chief Financial Officer Pierre Andre Terisse told a conference call that he expected fourth-quarter trends to be "broadly in line" with those of the third quarter.

Meanwhile, commodity prices -- notably milk and plastic -- were currently on a "softer trend," he said.

"We stand by our full-year targets for 2011. Danone is in very good shape, with operations in Asia, Latin America and Africa/Middle East continuing to post robust growth," Chief Executive Franck Riboud said in a statement.

"In Russia and the United States, we are working to strengthen our leading position, and our performance in Western Europe remains good," he added.

Danone, which also makes Evian water and Milupa baby food, said it still expected to grow underlying sales by 6-8 percent this year, having achieved 5.9 percent growth in the third quarter, slightly above analysts expectations of 5.6 percent.

It also reiterated its forecast for an increase of around 0.2 percentage points in its like-for-like 2011 operating margin.

Difficulties in Russian dairy and the loss of market share in U.S. dairy were largely responsible for a well-flagged sales slowdown from 8.7 percent growth in the first half.

Third-quarter sales reached 4.805 billion euros, a reported rise of 10.5 percent and in line with the 4.808 billion average of estimates in a Reuters poll of analysts.

(Editing by Lionel Laurent and James Regan)

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