Danone (BN) sales fell 3% in the first quarter to €5.31bn as it faced into severe currency headwinds of -7.2% as the Argentine peso, the Brazilian real, the Mexican peso and the Russian rouble all declined.

However, the French group recorded a 3.5% improvement in like-for-like sales reflecting a 0.8% rise in volume and 2.7% in value.

CEO Emmanuel Faber said: “This growth reflects stable or improving underlying trends across all our businesses, and positive results on key priorities.

“After solid 2015 results, Q1 2016 results confirm my confidence that Danone is fully engaged in the right direction to keep adapting our growth model to ensure strong, profitable and sustainable growth as we move towards 2020, and to deliver another year of success in 2016.”

The fresh dairy products division reported like-for-like sales up 2.3% to £2.7bn supported as by strong growth in North America.

Solid growth in Europe, including France, Germany and Spain, helped like-for-like sales in the waters division jump 3.9% to £1bn, with growth in plain water and aqua drinks. The early life nutrition division saw sales rise 4.8% on a like-for-like basis to £1.2bn.

The group confirmed its full-year outlook of sales growth of 3% to 5% and a solid improvement of trading operating margin.

Analysts at Bernstein said despite Danone beating expectation for first quarter like-for-like growth that it was a “fairly soft start” to 2016 for the French group. It was Danone’s lowest growth since the second quarter of 2014, the investment firm added.

Danone is one of Liberum’s top picks in food 2015 and the firm expected shares to react positively after the business confirmed its full-year outlook. “2015 marked the first year of profitable growth in six years underpinned by a structural improvement in gross margin and operating costs,” Liberum analyst Robert Waldschmidt said. “In our view, Danone is now on the path to profitable, sustainable growth.”

Danone’s share price is up 3.2% today to €64.33 on the back of the first quarter update.

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