Danone 2009 earnings boosted by baby food sales

(AP) — French yogurt and bottled water company Groupe Danone SA on Thursday reported 2009 earnings rose 3.7 percent from the previous year, boosted by strong growth in its baby food division and demand in Asia.

Full-year 2009 profit rose to euro1.36 billion ($1.9 billion) from euro1.3 billion in 2008. The maker of Evian mineral water and Activia yogurt said sales rose 3.2 percent on a like-for-like basis, which excludes currency effects and acquisitions, reaching euro15.2 billion compared with euro15 billion a year earlier.

The operating margin increased to 15.3 percent in 2009, the company said in a statement.

The figures were partly helped by a capital gain on Danone's sale of its Frucor fruit juice and beverage brand.

Danone, which bought Dutch baby food maker Royal Numico NV in 2007 as part of a reorganization to focus on health foods, said its baby nutrition division saw sales rise 7.9 percent in 2009 on a like-for-like basis.

Like-for-like sales in the water division were up 1 percent, while in the fresh dairy division they were up 1.6 percent, the company said. Revenues in the company's medical nutrition area were up 11.4 percent.

Overall sales of Danone products in Asia grew by 11 percent, while the European market dropped slightly, by 0.3 percent.

The Paris-based company said it is still aiming for like-for-like sales growth of at least 5 percent in 2010. The company cut its medium term sales growth target to that figure in November — previously, it had been aiming for growth of 8-10 percent.

"Danone assumes it will continue to face a challenging financial, economic and social environment in 2010, with continued difficult consumption trends in western economies, weak emerging currencies and inflation of raw materials," the company said.