Wednesday 17 April 2019 8:53 am | Updated: Monday 03 June 2019 1:02 am

Danone stays on track despite falling Chinese birth rate and Moroccan protests

Evian-owner Danone confirmed its outlook for 2019 this morning as the firm said it was investing in products that cater to alternative diets.

Danone, which is the world’s largest yoghurt maker, said it was pouring cash into growing segments of the yoghurt market including plant-based, probiotic and low-sugar alternatives.

However, US sales growth slowed in a first quarter when it sold its American organic salads business Earthbound Farm, the firm said. The sale is set to hit net income by $100m (£77m), but will allow the firm to improve its recurring operating margin to above 15 per cent in 2019.

“This performance has coincided with continued action to deliver sustainable profitable value growth, including the sale of Earthbound Farm, alongside the roll-out of value-added innovations across businesses and geographies to make our portfolio more local, more appealing to younger generations, and better suited to fast-changing consumer trends,” said chief executive Emmanuel Faber.

Sales in its waters segment, which includes Evian and Volvic, grew life-for-like sales by 3.9 per cent to €1bn (£870m).

Meanwhile its essential dairy and plant based business increased by 0.2 per cent to €3.3bn.

Shares fell 1.8 per cent to €68.46 this morning.

A decreasing birth rate in China took a chunk out of Danone’s baby food segment, meaning like-for-like sales grew 0.4 per cent in its specialised nutrition segment. The firm also said that sales continue to be impacted by a boycott in Morocco where customers are protesting what they say are unfair prices.

“We are pleased with the momentum of the business, which will become increasingly visible from the second quarter. This gives us every confidence that we will meet our full-year guidance,” Faber said.