French consumer goods group Danone on Wednesday saw second-quarter sales beat forecasts, amid a bounceback at its nutrition unit that had been hit by an international baby milk recall.
Danone and several other major manufacturers recalled batches of infant formula earlier this year over the possible presence of a toxin which can cause nausea, vomiting and diarrhea.
Danone, whose brands include Evian and Badoit water, said second-quarter sales rose a higher-than-expected 4.4 per cent to €7.21 billion (£6.18bn) to compensate for a two percent fall in the first quarter in the wake of the recall.
That helped lift first half profits 13 per cent to €1.18bn as the group pursues a slew of acquisitions in the health and protein sectors.
The showing came despite what chief financial officer Juergen Esser told AFP a “challenging environment with fairly strong inflationary pressure”.
Oil prices weighed on transport and packaging costs, but Esser said productivity gains enabled the group to maintain its margins, with first half operating profit rising 2.3 per cent to €1.85bn amid sales growth across all its product categories.
Esser said high-protein yoghurts and medical nutrition as well as Evian and Volvic waters had led the way, adding the group sought “to keep price increases to a minimum and offset them internally through productivity gains”.
(AFP)