In the first quarter of 2015, Danone reported consolidated sales grew 8.1% to total €5,471 million.
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Excluding the impact of changes in the basis for comparison, which includes exchange rates and scope of consolidation, sales were up 4.8%. This reflects stable sales volumes (-0.2%) and a 5% increase in value.
The exchange-rate effect of 3.7% reflects favorable trends in some currencies, including the US dollar, the Chinese renminbi and the Indonesian rupiah. The -0.4% impact on scope of consolidation results primarily from the deconsolidation of Fresh Dairy Products operations in China starting in July 2014 and in Indonesia starting in December 2014.
The Fresh Dairy Products division recorded steady like-for-like sales in the first quarter of 2015 (0.2%), reflecting a positive 5.0% price/mix effect and a -4.8% decrease in volume.
As anticipated, business in Europe was in line with trends observed in previous quarter, with sales down by around -4%. This reflects a decline in sales volumes that was partly offset by an improved price/mix effect, and results in part from initiatives to streamline assortment and promotions, which were rolled out gradually since mid-2014.
These initiatives are under way throughout Europe; they are aimed at improving the division's gross margin and laying the foundations for a sequential improvement in sales volumes.
In Russia, sales are solid in an uncertain consumer environment, in which the division is closely guiding trends in its various product ranges. An enhanced portfolio value has thus continued to drive growth, while sales volumes kept declining.
In the United States, the division's performance was in line with the category as a whole, allowing Danone to confirm its leading position.
In the first quarter, the Waters division reported another strong growth in sales, up 8.7% like-forlike, driven by a 6.7% increase in volume and a 2.0% increase in value.
These figures reflect both a very good performance in Europe and continued strong growth in emerging markets, in particular Asia, with steady gains by the Aqua and Mizone brands. They come despite the impact of inventory reduction in China during the quarter.
Early Life Nutrition division sales grew by a strong 11.6% like-for-like in Q1 2015, albeit from bases for comparison that were less favorable than in the previous two quarters. Sales volumes were up 4.2% and the price/mix effect was a high 7.4%
The Medical Nutrition division reported Q1 2015 sales of 9.1% like-for-like, with volumes up 3.5%.
Danone assumes that economic conditions will remain difficult and unstable overall, with fragile or even deflationary consumer trends in Europe, emerging markets undermined by volatile currencies, and difficulties specific to a few major markets, in particular the CIS. ■