French food group Danone said price cuts and a step-up in advertising helped accelerate the recovery in fresh dairy sales volumes in the third quarter and added that it was confident about next year.
Sales at the group, whose top brands include Activia and Actimel yoghurts, fell 1.7 per cent to €3.78 billion in the three months to September 30th, a like-for-like rise of 4.1 per cent, Danone said this morning.
Dairy volumes rose 7 per cent, compared with 2.7 per cent in the second quarter.
Danone was expected to post third-quarter sales of €3.82 billion, according to the average of forecasts from 11 analysts polled by Reuters. Dairy volume growth was seen at 4.59 per cent on average.
"The operational adjustments we have been implementing since the start of the year are translating into an accelerated growth of our volumes and sales," chief executive Franck Riboud said in a statement.
"Our market share gains in fresh dairy and baby nutrition, the performance of our waters division in emerging countries and our capacity to innovate in medical nutrition have been particularly noticeable," he added.
Danone makes about 57 per cent of sales in dairy and has cut prices to buoy demand as the economic crisis dented consumers' budgets. It has also benefited from stable growth at its baby food and medical nutrition units.
Danone said second-half like-for-like sales growth would be close to 4 per cent, with a like-for-like improvement in operating margin of 60-70 basis points for the full year. It repeated its forecast for 2009 fully diluted earnings per share to rise 10 per cent.
Nestle, the world's biggest food group, said yesterday that nine-month sales fell 2.2 per cent to €79.5 billion Swiss francs, below analysts' average forecast of €80.3 billion, hit by currency effects.
The Swiss company reiterated its full-year forecasts.
Reuters