Dairy division sales dip impacts on Danone as growth slows

French food group Danone has reported a slowdown in first-quarter sales growth as sales volumes at its core dairy division were hit by the company passing on higher milk prices and sales in the baby food business also fell, though less sharply than feared.

However, the group maintained its forecasts of like-for-like sales growth this year of 4.5-5.5% and an operating margin changing by no more than 0.2 percentage points either way, from 13.19% of sales last year, as it was aiming for a return to “strong, sustainable, profitable growth” in the second half.

The world’s largest yoghurt maker, whose brands include Actimel and Activia, makes 60% of its revenue in dairy, a sector hit by a spike in milk prices.