Danone Reports Record Growth in Fourth Quarter

15/02/07 Groupe Danone has reported a strong top line performance (+9.7%) with net income from continuing operations at +15.8% and EPS growth at +17.9%. Full year like-for-like sales were up 9.7%. Net income from continuing operations of €1,194 million was up 15.8%. The 4th quarter’s record +11.5% growth on a like-for-like basis was driven by the stronger-than expected performance of beverage innovation in China, and a strong year-end in France which benefited from a low historical comparison.

Franck Riboud, Chairman and CEO of Groupe DANONE commented: “2006 was another year of strong performance and progress at Danone. We saw excellent top line growth in the period, which exceeded our targets, helped by a strong second half performance and an exceptionally strong Q4. Profitability also increased on a like-for-like basis at both the operating and net income levels with margins growing strongly for the twelfth consecutive year. Growth is driven by our clear strategic focus on innovation, our strength in healthy foods, our strong market positions and by enhancing our geographical footprint in existing and new territories. We enter the new financial year in a strong position, confirming our recently upgraded guidance, well placed to actively pursue both organic and non-organic growth.”

Fresh Dairy continued its broad-based growth (+9.2%) with its four blockbuster brands (Actimel, Activia, Danonino, Vitalinea) growing at more than 15%. France grew in low single-digits, while the rest of Europe grew in high single-digits, driven by the continued very strong performance in Russia, with all other countries growing healthily. Latin America grew above 20% with all geographies contributing evenly. North America grew above 10% supported by the launch of Activia and the continuous expansion of Stonyfield Farm in the organic segment.

Beverages had an outstanding year with +14.8% growth, driven by the exceptional performance from new product innovation in Asia. In a difficult trading environment, France was in slight decline but has succeeded in gaining value market share in the plain still water segment, as well as in the healthy beverage segment. Europe (excluding France) grew at double-digit supported by the strong performance in Spain, Germany and Poland.

Biscuits had an excellent year with +3.1% growth, demonstrating the division’s contribution to the Group’s profitable growth model. France was in positive territory, and although Eastern Europe has still not returned to growth, Poland has confirmed its turn-around, while Spain and Italy continued to have excellent results.