Danone raises 2022 sales outlook amid strong demand for baby food and bottled water

French yoghurt maker Danone raised its 2022 revenue growth outlook after posting a 7.7 per cent jump in second quarter like-for-like sales, beating analysts’ forecasts of 5.6 per cent growth, reflecting price increases and strong demand for baby food and bottled water.

Danone, the world’s largest maker of yoghurts, has two large plants in Ireland: one in Macroom, Co Cork and one in Wexford. It said it now expected like-for-like sales growth in a 5 to 6 per cent range this year compared with a previously forecast 3 to 5 per cent range.

The consumer goods giant, whose brands include Evian and Badoit water and Activia yoghurt, said its first-half recurring operating margin declined to 12.1 per cent of sales from 13.1 per cent in the first half of 2021, due to higher input cost inflation.

Danone reiterated it expected its full-year recurring operating margin to be above 12 per cent, versus 13.7 per cent in 2021.

Danone’s new chief Antoine de Saint-Affrique is pursuing a revival plan amid mounting input costs and uncertainties caused by Russia’s invasion of Ukraine, which has forced Danone to suspend investments in Russia.

The company, which also makes infant milk formula under the Aptamil and Cow & Gate brands, has stepped up its shipments of the product from Europe — mostly from the UK and the Netherlands — to the United States in recent months in response to a US shortage.

— Reuters