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French food group Danone keeps goals after strong start to 2022

PARIS (Reuters) – French food group Danone kept its financial goals for the 2022 full year after it delivered stronger-than-expected 7.1% sales growth in the first quarter amid a challenging environment marked by inflation, higher input costs and uncertainties linked to the war in Ukraine.

The robust start to the year reflected favourable year-ago comparables, price increases, stronger demand for China baby products formula, and a post-COVID improvement regarding the consumption of its water products outside of the home environment.

Danone, which is the world’s largest yoghurt maker, said its like-for-like sales rose 7.1% to 6.236 billion euros ($6.74 billion) in the first quarter, compared with expectations for a 5.5% rise in a company-compiled consensus of 19 analysts.

Danone’s new chief Antoine de Saint-Affrique is conducting a revival plan amid mounting input costs, coupled with further uncertainties caused by Russia’s invasion of Ukraine, which has forced Danone to suspend investments in Russia.

The group reiterated it expected its operating profit margin to decline to no more than 12% of sales in 2022 from 13.7% in 2021, with price-led like-for-like sales growth in a range of 3% to 5% against 3.4% in 2021.

($1 = 0.9246 euros)

Source : Reuters

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