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Danone gets boost from baby-food sales in second quarter

Chinese demand for baby food and infant formula contributed to double-digit growth at its specialised nutrition division, alongside growing contributions from Latin America, India and Africa. 

Danone said it saw a 3.3% increase in its second-quarter sales compared to the same time last year, as Chinese consumers bought more infant formula and dairy sales picked up in North Africa. 

The world's largest yoghurt maker also reported that its adjusted operating profit climbed 7.9% on a like-for-like basis to €1.78bn ($2.08bn), helped by cost-driving measures and its takeover of US organic food maker WhiteWave last year. 

Chinese demand for baby food and infant formula contributed to double-digit growth at its specialised nutrition division, alongside growing contributions from Latin America, India and Africa. 

Meanwhile, Danone’s bottled water business also saw notable growth of 4.5% in the first half.

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In North America, Danone said that sales rose 1.4% in its dairy and plant-based business, thanks to growing demand for its coffee creamer brands and yoghurt innovations. 

“In the first half of the year, Danone delivered another semester of strong results, combining sales growth momentum, strong margin improvement, and improved free cash flow,” said Emmanuel Faber, Chairman and Chief Executive Officer.

“Demand remained strong for Specialized Nutrition in China, Waters achieved broad-based growth and Essential Dairy and Plant-Based returned to growth, reflecting benefits from the WhiteWave acquisition and organic improvements in fresh dairy in key regions. This leads me to confirm our guidance for the year. “

Danone noted that a consumer boycott in Morocco, launched on social media to protest high prices, negatively impacted its dairy sales in the country.

Despite this, the France-based firm said that “excluding the exceptional situation in Morocco” all entities delivered growth in the second quarter. 

“This performance, achieved despite ongoing volatility and unexpected headwinds in some markets, reflects the underlying strengths of our business and our continued financial discipline,” added Faber.