February 26, 2020 / 6:58 AM / a month ago

Food group Danone cuts 2020 guidance, coronavirus to hit Q1

PARIS, Feb 26 (Reuters) - Food group Danone lowered its 2020 guidance for sales and profitability on Wednesday, citing a particularly uncertain economic climate and the impact of the coronavirus.

Danone, which is the world’s largest yoghurt maker, also unveiled plans to invest 2 billion euros ($2.2 billion) over 2020-2022 to accelerate climate protection initiatives.

Danone, which expects the coronavirus health crisis to cut 100 million euros off its first quarter sales in China, said it was now targeting like-for-like sales growth of 2-4 percent in 2020 and an operating margin above 15%.

This compared with its previous 2020 goals of 4-5% sales growth and an operating margin above 16%.

Danone made the forecast after delivering 2019 like-for-like sales growth of 2.6%, near the bottom of an already lowered range of 2.5-3% provided in October.

Analysts’ estimates in a company-compiled consensus were for 2.5% sales growth for 2019.

The 2019 operating margin rose 76 basis points to 15.21% of sales, slightly above analysts’ expectations of 15.14%.

$1 = 0.9201 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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