Danone SA (ADR)(OTCMKTS:DANOY) reported that like-for-like sales growth in 3Q2016 came at 2.1% while it was 3.2% for first nine months of the year. Reported sales growth came at -1.8% showing a negative currency effect of -4.1% while sales growth in the first three quarters of 2016 was -2.6% confirming a negative currency impact of -6.3%.
The management speaks
Emmanuel Faber, the CEO of Danone, commented that within a volatile context, in 3Q2016 they continued on prioritization of business model transformation towards consistent profitable growth, and to improve its resilience, via disciplined resource allocation. Their focus was on strategic growth prospects, avoiding tactical resources allocations, and working on cost optimization and increased efficiencies.
Danone continues to balance the mid, short and long-term agenda of their makeover. While China is transitioning, resulting in short-term volatility and adversely impacting sales growth, they have continued to establish a solid growth agenda, balancing the fundamentals of their unique business portfolio, and the development potential of their brands in each of their segments. The CEO took on this opportunity to thank all its teams for their full commitment and engagement in implementing this agenda and assisting in fulfillment of company’s mission.
In 3Q2016, consolidated sales came at €5,537 million, registering a growth of 2.1% like-for-like. This growth shows a slight decline of -0.7% in volume while a rise of 2.8% in value. Reported sales declined 1.8%, including impact of exchange rates and in the scope of consolidation.
The exchange-rate impact highlights negative trends in currencies comprising the British pound, the Mexican peso, the Chinese renminbi and the Argentine peso. The Fresh Dairy Products segment posted sales of growth 2.2% like-for-like, comprising decline of 2.3% in volume led by the Latam and the CIS region. The value growth recorded in this segment was 4.5%.
In Europe, Danone continued to focus on its transformation progress. After the relaunch of Actimel and Danonino brands in 2Q2016, the firm has continued its renovation strategy with a new identity, packaging and positioning for the Activia brand in September.