The company recorded very strong performance in Specialized Nutrition, with exceptional growth in Early Life Nutrition China.
Like-for-like New Danone sales growth was 4.7%. Growth reflects a 0.4% increase in volume and a 4.3% rise in value.
Essential Dairy & Plant-Based or EDP International sales declined 2.3% on a "like- for-like New Danone" basis, reflecting a 7.4% decrease in volumes and a 5.1% increase in value.
This was due primarily to a steep double-digit fall in sales in Brazil, which continues to be impacted by adverse market conditions in a fragile economy. Excluding Brazil, the division's sales were broadly flat.
Looking ahead, the company confirmed its fiscal 2017 guidance. Danone still expects to deliver double-digit recurring earnings per share growth of more than 12%, at constant exchange rate, compared to the 3.10 euros recurring EPS reported in 2016.
This guidance is based on a moderate "Like-for-like New Danone" sales growth and sustained recurring operating margin improvement on a "like-for-like New Danone" basis.
Danone anticipates a year-on-year mid-single digit rise in the costs of its strategic raw materials. Further, Danone now anticipates a year-on-year steep rise in milk prices, with variations from one geographical area to the next.
Further, between 2017 and 2020, Danone will pursue the decoupling of its mid-term growth and short-term efficiency agenda, accelerating growth sequentially and maximizing efficiency immediately, through the 'Protein' efficiency program and the delivery of the synergies post the Whitewave acquisition.
By 2020, Danone targets overall like-for-like sales growth between 4% and 5%, including a strong like-for-like sales growth above 5% for EDP NORAM, Specialized Nutrition, Waters and, a like-for-like sales growth of between 3% and 4% for EDP International.
Danone aims for a recurring operating margin of over 16% in 2020. ■
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