Danone, already struggling with falling yoghurt sales as consumers shift to vegan alternatives, is getting hit by a decline in its bottled-water business.

Shares in Danone fell 3% as the €39bn French food giant lowered its sales growth forecast following a weaker-than-expected fourth-quarter performance at its European dairy business.

French multinational food and nutrition group Danone has forecast profitability will improve this year as it contains costs to adjust for difficult markets such as China and Russia.