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Danone sees sales growth to miss target

GROUPE Danone SA, the world's biggest yogurt maker, said sales growth this year will miss its "medium-term" goal as consumer spending falters.

Revenue growth, excluding acquisitions and currency swings, will be "a few points" below the food producer's 8 percent to 10 percent objective, the Paris-based company said yesterday in an e-mailed statement. Danone also posted a 10-percent rise in 2008 profit that met analysts' estimates.

Global demand continued to deteriorate over the past three months, Danone said. The food maker relies on products including digestion-enhancing yogurt Activia to keep sales growing while offering cheaper goods, such as a range of 1-euro yogurt, to retain cash-strapped consumers in the recession.

"In light of the current specific environment, our focus in each of our business lines will be simple: grow wherever the growth is, continue to perform above the category and strengthen our market shares," Chief Executive Officer Franck Riboud said.

Danone, which also bottles Evian water, still aims to improve its operating margin this year and sees a per-share profit rise of 10 percent.

Net income last year increased to 1.31 billion euros (US$1.7 billion) from 1.19 billion euros a year earlier. That compared with the 1.32-billion-euro estimate of eight analysts surveyed by Bloomberg News. Danone restated last year's profit to exclude a one-time gain from the sale of a cookie unit.

Danone sold the cookie division to Kraft Foods Inc in July 2007, then bought Dutch baby-food maker Royal Numico NV for a share of the faster-growing health food market.

"While macro concerns in 2009 can result in people trading out of these products, one should not discount new consumers they gain every year," JP Morgan analyst Pablo Zuanic said.


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