Danone delivers 6.7% organic growth

The company sold its sauces business in Britain and the United States and its stake in Spanish beer company Mahou in 2005.

15/02/06 Danone posted a 16 percent rise in its 2005 earnings per share and forecast further earnings growth as it raised its dividend per share by 26 percent.

Groupe Danone has reported strong increase in net income and underlying earnings per share in 2005 with full year like-for-like sales up +6.7%. The company said that for 2006 it is confident that it will achieve its targets of: like-for-like sales growth between +5% and +7%, trading operating margin improvement between + 20 to +40 basis points (on a like-for-like basis) and low double digit growth in underlying earnings per share. Danone raised its dividend per share by 26 percent. The company sold its sauces business in Britain and the United States and its stake in Spanish beer company Mahou as it seeks to reinforce its position in healthy eating and to expand in Asia.

Franck Riboud, Chairman and CEO of Groupe DANONE commented: “The robust financial performance of Groupe DANONE in 2005, completely in line with our overall objectives, illustrates the strength of our business model. This performance exemplifies our ability to achieve as we have done for the past six years. To deliver organic growth of 6.7%, while continuing to increase the operating margin of the group, despite the problems in our principal market and the increase in certain material costs, demonstrates the relevance of our chosen business strategies which are: the re-inforcement of our position in healthy eating, the development of new geographies, our intense effort in innovation, and the global deployment of our largest brands which have a sales potential of 1 billion euros each."