Danone cuts 2013 goals as China woes hit sales
French food group Danone on Wednesday cut its 2013 financial goals after sales in its high-margin baby food division fell a worse-than-expected 8.6 percent in the third quarter following an infant formula product recall in Asia.
The world's largest yoghurt maker, whose brands include Actimel and Activia, said action to restore sales in affected Asian markets was generating "very gradual" results and that it did not expect these sales to recover before early 2014.
Danone said growth improved in its core dairy division in the quarter, however, while its water business benefited from a hot summer in Europe.
Danone said third-quarter group sales rose 4.2 percent like-for-like to 5.259 billion euros ($7.1 billion), a slowdown from 6.5 percent growth in the second quarter.
This was below the average estimate of 4.8 percent in a Reuters poll of six analysts and in the company-compiled consensus of analysts.
For 2013, Danone said it now expected 2013 like-for-like sales growth of between 4.5 percent and 5 percent.
It now expects its full-year operating margin to decrease by 80 basis points against a previous forecast of a decline of between 30 and 50 points. Free cash flow is seen at between 1.5 billion and 1.6 billion euros,also below an initial forecast of 2 billion.
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