Danone upbeat on 2019 despite disappointing margins
Stronger fourth-quarter sales lifts optimism for the food group despite a consumer boycott in Morocco and weaker demand for infant formula products in China
Paris — Food group Danone struck a confident note on prospects for 2019 after strong fourth-quarter sales, although some disappointment over margins weighed on the company’s shares. Danone, which bought US organic food group WhiteWave in 2017, delivered higher 2018 earnings and stronger-than-expected fourth quarter sales despite a consumer boycott in Morocco and weaker demand for infant formula products in China. Danone, the world’s largest yoghurt maker, also stabilised its Activia yoghurt brand in Europe in the final quarter of 2018, reversing years of decline. Its shares fell around 1% as the 2018 operating margin slightly missed market expectations, held back by an impairment charge tied to the Moroccan boycott. “Danone’s figures are a mixed bag. On the one hand, the sales figures show satisfactory progress but on the other hand the margins were a bit weaker than expected,” said Gregoire Laverne, fund manager at Roche Brune Asset Management, which recently sold its Danone shares...
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