ZCZC
BCN-35
EARNINGS-FOOD-FRANCE
Exchange rates sour Danone’s sales, but not target
PARIS, Oct 17, 2018 (BSS/AFP) – Danone said Wednesday its sales slid 4.4
percent in the third quarter due to the plunge in the value of emerging
market currencies, although the French food giant confirmed its annual target
of double-digit earnings growth.
The sales figure of 6.2 billion euros ($7.2 billion) was impacted by the
appreciation of the euro compared to Argentina’s peso, Turkey’s lira and
Brazil’s real, all of which fell by more than 20 percent.
When sales in those countries were converted into euros for global
accounting, they were considerably lower than in the same quarter last year,
dragging down the figure by an estimated 5.2 percentage points.
When the sales were restated at constant exchange rates, they grew by 1.4
percent.
Only the dairy and plant-based unit in North America saw sales growth at
current exchange rates, rising 1.4 percent to nearly 1.3 billion euros.
Elsewhere, they fell by 8.1 percent.
On a like-for-like basis, the waters unit showed 6.4 percent growth, but
its specialised nutrition unit still recorded a 1.5 percent contraction.
However, chief executive Emmanuel Faber said in a statement the company
has “the foundations in place to navigate current emerging market volatility
and currency headwinds, which will enable us to continue to deliver
sustainable profitable growth.
The company reaffirmed its guidance for the full year, which is double-
digit recurring earnings per share using constant exchange rates.
The company’s share price dropped 2.0 percent in early morning trading in
Paris, the worst performer on the CAC 40, which was up nearly 0.3 percent
overall.
BSS/AFP/HR/1435