PARIS Feb 15 French food group Danone
unveiled a new 1 billion euros ($1.1 billion) cost cutting plan,
saying the turnaround of its dairy division in Europe was taking
longer than expected while tough conditions in China would also
endure in 2017.
The world's largest yoghurt maker did not provide provide
sales or operating profit margin growth targets for the current
year, saying it would review its financial goals for 2017 after
closing its acquisition of U.S. organic food group WhiteWave,
which is slated for the first quarter.
Danone, which makes Activia yoghurt, Evian water and Bledina
babyfood, said like-for-like sales in 2016 rose 2.9 percent to
21.94 billion euros ($23.22 billion), in line with analysts'
expectations of 2.9 percent growth for 2016, which was a
slowdown from 4.4 percent growth in 2015.
The slowdown reflected tough market conditions in Spain and
problems with the relaunch of its Activia brand in Europe, which
held back dairy sales growth in the final quarter, while
pressures in the Chinese market weighed on baby food sales.
Danone had flagged the European dairy problem in December,
warning its 2016 sales growth would come below its original
target of 3-5 percent.
Its operating margin rose by 70 basis points to 13.77
percent, in line with analysts' expectations of 13.71 percent.
($1 = 0.9451 euros)
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)