French food group Danone posted its weakest third-quarter results in six years on Wednesday but kept its full-year outlook and said it saw no repeat of soaring milk prices in 2008, boosting its shares.
The maker of Actimel yoghurt drinks and Evian water reaffirmed on Wednesday it expected full-year sales to grow 6 to 8 percent and operating margins to improve at least 20 basis points despite higher prices for milk and other raw materials.
"When we look at the full impact on 2007 (of higher milk prices) numbers will be around 300 million euros additional versus what was a year ago," Chief Financial Officer Antoine Giscard d'Estaing told a conference call with analysts. "This will be more than offset by pricing, productivity and operating leverage," he added.
Danone said price increases accounted for 3.2 percentage points of its third quarter like-for-like sales growth of 3.9 percent, which according to analysts at Sanford Bernstein was the slowest rate of growth since the third quarter of 2001.
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