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Sales growth slowed sharply at French consumer giant Danone (BN) in the third quarter, after a slump in baby formula sales in China and a consumer boycott in Morocco.
The world’s largest yogurt producer recorded 1.4% like-for-like sales growth to €6.2bn in the three months to 30 September, beating analyst expectations.
But this marked a steep decline in growth from 3.3% in the second quarter and 4.9% in the first quarter for the Cow & Gate and Aptamil maker.
Growth during the period was driven by 3.3% rise in value, as sales volumes fell 1.9%, driven by declining sales of infant nutrition products in China.
Sales of its ‘early life nutrition’ products in China fell 20% in the period, slumping heavily from 30% growth in the second quarter.
The group also continued to be impacted by a consumer boycott in Morocco, a country which accounts for 2% of company sales, with dairy sales down 40% in the quarter.
Warm weather in Europe however lifted sales in water brands Volvic and Evian, while growth also accelerated in its dairy and plant-based business in North America, where it is integrating organic food group WhiteWave.
It also highlighted a return to growth for Activia in areas of Europe, as well as double digit growth for Alpro in Europe, while expanding into Eastern Europe.
“In the latest quarter, we have seen an encouraging return to growth in Essential Dairy and Plant-Based, alongside strong momentum in Waters,” commented CEO Emmanuel Faber.
This demonstrates how Danone is balancing growth across its businesses. Our performance in EDP and Waters compensated for challenging conditions in China where Early Life Nutrition shows changes in market dynamics following a period of exceptional growth.
“We also have the foundations in place to navigate current emerging market volatility and currency headwinds, which will enable us to continue to deliver sustainable profitable growth. As a result, we have today reaffirmed our guidance for the full-year.”
Morning update
Listed sport nutrition business Science in Sport (SIS) has announced its launch into the Chinese market.
The brand highlighted its progress in expanding internationally through e-commerce channels, launching in China on Monday through Alibaba’s TMall Global Store.
The nutrition supplement supplier has launched with 27 products from its popular GO Energy, GO Hydro and REGO Rapid Recovery ranges.
“We are excited to be launching online in the world’s largest e-commerce market. Through TMall we now have access to one of the fastest growing markets in a low risk way,” commented CEO Stephen Moon.
“It extends our reach to an enormous, young consumer base where fitness is a priority and is being promoted by the Chinese Government.
“Our products appeal to elite and endurance athletes globally and we will continue to forge partnerships to build our brand, expand geographically to reach customers and provide retail channels to enable purchase and use.
“We are confident that our strategy will deliver consistently rapid sales growth in years to come.”
After edging higher yesterday, the FTSE 100 has continued its steady ascent, rising 0.1% to 7,066pts this morning.
This morning’s early risers include Paypoint (PAY), up 2.8% to 881.3p, Imperial Brands (IMB), up 1.6% to 2,581p, Hotel Chocolat Group (HOTC), up 1.5% to 269p and Just Eat (JE.), up 1.5% to 624.4p.
The early fallers include Cranswick (CWK), down 1.8% to 2,964p, PZ Cussons (PZC), down 1.6% to 224.7p and Majestic Wine (WINE), down 1.2% to 389.5p.
Yesterday in the city
Despite uneven trading throughout the day, the FTSE 100 ended yesterday 0.4% higher, up to 7,059pts after US shares improved and Theresa May received cabinet backing over Brexit.
Private label sandwich maker Greencore (GNC) regained value, jumping up 5.8% to 200p after it slumped heavily yesterday on the back of announcing the £817m sale of its US business.
Ocado Group (OCDO) also recorded strong growth, jumping 5.5% to 833.4p, after it was upgraded to a ‘buy’ rating by Merrill Lynch.
Other risers over the day’s trading included McColls (MCLS), up 5.3% to 130p, Purecircle Limited (PURE), up 5.1% to 338.5p, McBride (MCB), up 4.8% to 134.4p and SSP Group (SSPG), up 3.3% to 682.1p.
Dunhill cigarettes maker British American Tobacco (BATS) slid 4.6% to 3,176.5p after it warned that full year earnings are to dive 7% as a result of currency headwinds.
Other fallers included Hotel Chocolat Group (HOTC), down 3.6% to 265p, Tesco (TSCO), down 3.4% to 208.6p, Treatt (TET), down 2.8% to 432p and Marks and Spencer (MKS), down 2.3% to 286.1p.
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