Danone eyes more profit growth in 2018

Owner of Evian, Activia and Blédina faces investor pressure for better returns

Danone: demand for baby food and water in China more than offset weak dairy sales. Photograph: Bloomberg

Danone: demand for baby food and water in China more than offset weak dairy sales. Photograph: Bloomberg

 

Danone said on Friday it would accelerate sales growth this year and deliver a further rise in profits as it seeks to respond to pressure from investors.

The food group, which is the world’s largest yogurt maker, reported overall 2017 earnings that slightly beat expectations, with solid demand for baby food and water in China more than offsetting weak dairy sales.

Danone, whose brands include Evian water, Activia yogurt and Blédina baby food, said it was targeting a double-digit rise in 2018 underlying earnings per share, excluding the impact of the sale of a $1.9 billion stake in Japan’s Yakult announced this week.

The company, alongside consumer-goods peers such as Nestlé and Unilever, is under investor pressure to improve results, and it needs to deliver on 2020 profit-margin and sales-growth targets that it set last year.

Danone has been touted as a potential target for suitors or shareholders seeking better returns, given that profits and sales have disappointed some investors in recent years. – Reuters