Danone profit rises 4% on baby, medical nutrition

by Eric Schroeder
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PARIS — Net earnings at Groupe Danone in fiscal 2009 rose 4% to €1,361 million ($1,852 million), driven by a 3% increase in like-for-like sales to €14,982 million ($20,385 million). The gains also reflected stronger sales in the company’s baby nutrition and medical nutrition business units.

“2009 marks the end of numerous adjustments that we have implemented in the past 18 to 24 months in order to strengthen our model and adapt it to the new environment: this includes the change in our Asian footprint, the strengthening of our financial structure, the improvements of the category trends in waters and the focus on global brands in baby and medical,” said Franck Riboud, chairman and chief executive officer.

Like-for-like sales in the fresh dairy division rose 1.6% to €8,555 million in the full year and 4.6% in the fourth quarter, driven by better volume growth. Among brands, Danone said its Activia and Danacol product lines delivered strong performance, while Actimel continued to show noticeable improvements.

In the company’s water division, like-for-like sales were up 1% in the year and up 3.8% in the fourth quarter. Danone said volume growth continued to be driven entirely by emerging markets, with continued strong performances in Indonesia, Mexico and Argentina.

The company’s medical nutrition business posted like-for-like sales increases of 11.4% and 12.1% in the full year and fourth quarter, respectively, while the baby nutrition business had sales gains of 7.9% and 7% in the periods.

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