Danone sees 100mn euro hit from coronavirus in Q1

File: Dairy products and baby formula led the increases, with sales rising by 4.6 and 7.9 percent on a like-for-like basis.

File: Dairy products and baby formula led the increases, with sales rising by 4.6 and 7.9 percent on a like-for-like basis.

AFP

PARIS - French food giant Danone said it expects to take a 100-million-euro hit in first-quarter sales from the coronavirus outbreak, particularly in China, its second-largest market.

"The company currently estimates... around 100 million euros (in) lost sales," mostly in its waters business in China, said Danone, whose brands include Evian and Volvic. 

That meant overall sales in the first three months of the year were expected to be "broadly flat," compared to the 6.1 billion euros it booked in the first quarter of 2019, it said in a statement.

"Danone assumes that economic conditions in 2020 will remain particularly volatile and uncertain overall... with additional pressure on the world economy since the beginning of the year related to the COVID-19 outbreak." 

As a result, Danone said it would downgrade its forecast for earnings this year.

Earnings per share growth was expected to be "mid-single-digit" or around five percent, "reflecting sales growth of 2.0-4.0 percent and a recurring operating margin above 15 percent, as we accelerate investment and factoring in the assessment to date of the impact of coronavirus outbreak," it said. 

Danone said that business last year had been "strong", with group sales growing  2.6 percent to 25.3 billion euros.

Underlying or operating profit grew 18.1 percent to 3.2 billion euros, although bottom-line profit fell 18 percent to 1.9 billion as a result of one-off charges.

Source
AFP

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