BN Danone

   By Anthony Shevlin 
 

Shares in Danone SA (BN.FR) fell Wednesday after the French company released its third-quarter sales update which showed a strong negative hit from currency effects.

Sales for the three months ending Sept. 30 came to 6.19 billion euros ($7.17 billion) compared with EUR6.47 billion a year earlier. Although sales fell 4.4% on a reported basis, Danone said like-for-like sales grew 1.4%.

At 0829 GMT, shares in Danone traded at EUR62.69, down 3.6%.

Danone said sales were affected by the appreciation of the euro against the Turkish lira, Argentine peso and Brazilian real.

Danone Chief Executive Emmanuel Faber said: "We have the foundations in place to navigate current emerging-market volatility and currency headwinds, which will enable us to continue to deliver sustainable profitable growth."

Danone said the increasingly complex situation in Argentina makes it hard to predict what may happen in the future. The company said it will no longer include the country in its like-for-like sales reporting from 2019 due to the effect of hyperinflation.

Chief Financial Officer Cecile Cabanis said the performance trend in Argentina, which contributed 2.1% of Danone's net sales in 3Q, was improving during the quarter and the company expects the full-year sales growth to exceed the 0.3% rise recorded in the first nine months of the year.

Analysts at Citi said Danone's like-for-like sales in the quarter were up on consensus but "marked by rather extreme inflexions in its story."

Bryan Garnier said the slowdown in specialized nutrition, which has posted strong growth as of late, was stronger than expected.

Write to Anthony Shevlin at anthony.shevlin@dowjones.com; @anthony_shevlin

(END) Dow Jones Newswires

October 17, 2018 04:45 ET (08:45 GMT)

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