Danone targets emerging markets for continued growth

By Helen Glaberson

- Last updated on GMT

Related tags: Investment, Saudi arabia, Danone

Emerging markets will be the target for continued growth Danone announced yesterday, as Asian markets contributed significantly to the company’s 15 per cent growth.

Full year targets were confirmed for the dairy giant with the publication of Danone’s third quarter results which reported a €4.347bn turnover.

Emerging Markets

The company reported gains of €636m from Asian markets where sales rose by 15.3 per cent, compared to Europe were they crept up by 2.1 per cent.

Chairman and CEO Franck Riboud said that the results provided further bolstered the Activia maker’s decision to continue investing in the emerging markets as priorities as they were drivers for both present and future growth.

However, Danone projected continued difficulties for Europe as financial, economic and social crises continue to weigh on consumption trends.

We are keeping up the pace and expanding our four business lines in all parts of the world. These positive results, achieved in the face of difficult economic conditions marked by weak consumer demand in Europe and rising raw material prices, enable us to confirm our full-year targets for growth and value creation,” ​said Riboud.

Baby nutrition booming

The company announced continued momentum for its diary and nutrition divisions. Danone’s baby nutrition division reported an 8.6 per cent rise and the company’s medical nutrition was up 8.4 per cent.

Fresh dairy products sales rose 5.5 per cent, with the company pinpointing the Activia brand as the main driver, accounting for nearly half of the rise in division growth.

Danone said: “This performance reflects the continuing strength of volume growth in all regions, despite an unfavorable basis for year-on-year comparisons and difficult economic conditions in Southern Europe. The main source of momentum remained priority markets, among them the US, Brazil, Russia, Saudi Arabia and Mexico.​”
Danone aims to increase its turnover by 6 per cent this. The company also projected an increase in operating free cash flow to at least 10 per cent and stability of its operating margin in 2010 compared to 2009.

Related topics: Manufacturers, Danone, Emerging Markets

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