Danone Flags up Actimel and Activia Relaunches as Key to Shoring up Sales in Europe as Sales Fall Three Percent in Q1

19 Apr 2016 --- Danone has reported a three percent fall in sales in the first quarter, as it was hit by the strength of the Euro but has flagged up relaunches in 2016 of key brands Actimel and Activia to help shore up sales in Europe.

Sales dropped to €5.3 billion ($5.98 billion) from €5.5 billion ($6.2 billion) in the first three months of the year, as the French food and drinks giant warned economic conditions will remain tough in 2016.

Sales were up 3.5 percent if currency shifts, acquisitions and disposals were taken out. Danone did not disclose a profit figure for the three month period.

Like its competitors, Danone, whose brands include Evian, Volvic, and Activa, is battling changing consumer tastes.

Emmanuel Faber, chief executive, said: “With +3.5 percent growth, Danone delivered a performance fully in line with our 2016 agenda and priorities."

“This growth reflects stable or improving underlying trends across all our businesses, and positive results on key priorities. It includes progress on our Dairy agenda, with a confirmed re-acceleration in the United States, and sequential improvement in Europe.”

“For Waters, it reflects broad-based growth in on all our platforms and the continued transition of the Mizone brand, and for Early Life Nutrition, ongoing actions to build a more sustainable growth model in China.”

“As expected, Brazil presents complex challenges and we are still operating in a volatile environment. This strengthens our determination to remain disciplined and to focus on pace rather than spend when implementation our monitoring our growth agenda.”

Across it waters division, sales were at €1.065 billion ($1.2 billion), down on a reported basis 4.2 percent.

There was growth in plain water and aquadrinks, supported by strong category growth and brand activation plans. In Europe, Danone continued to win markets share in key markets including Germany, France and Spain.

Sales in ALMA (Asia Pacific/Latin America/Middle-East/Africa) reported a good performance. In Indonesia’s, its Aqua brand continued to generate very strong growth, while Argentina and Mexico were solid growth drivers.

In China, Danone said it was making inventory adjustments of its functional bottled water brand Mizone.

Across its Fresh Dairy Products unit, which makes up around half of group sales, sales were down 4.7 percent to €2.7 billion ($3.1 billion) on a reported basis.

In the US, Danone reported strong growth in its Fresh Dairy Products unit, helped by successful innovations which helped drive market share. In Russia, Danone continued to show resilience amid tough trading condition.

In Europe, Danone is pursuing a major overhaul of its brand portfolio, and is planning relaunches for its Danonino, Actimel and Activia brands, with a view to making sales more stable in Europe by the end of 2016.

Sales were up 0.5 percent up its Early Life Nutrition division.

Sales growth slowed in Europe while in China, Danone continued to supported brands Aptamil and Nutrition by developing its presence in specialized stores.