GROUPE Danone SA, the world's largest yogurt maker, said third-quarter sales rose 32 percent on higher dairy prices and stronger infant-formula revenue stemming from last year's takeover of Royal Numico NV.
Sales climbed to 3.85 billion euros (US$5 billion) from a restated 2.93-billion-euro a year earlier, the Paris-based company said yesterday. That beat the 3.84-billion-euro median estimate of eight analysts surveyed by Bloomberg.
The company raised prices on immunity-boosting milk beverage Actimel and other goods to recoup higher commodity costs that are weighing on earnings across the food industry. Danone reshaped itself last year by selling its cookie unit for 5.3 billion euros and buying the more profitable Numico for 12.3 billion euros to gain a larger share of the baby-food industry.
"The company has pricing power," said Guillaume Duchesne, a Geneva-based equity strategist at Fortis Private Banking, which oversees US$117 billion. "That's important because we're in a situation of pressure on margins."
Sales rose 8.3 percent excluding currencies and takeovers, said Danone, the bottler of Evian mineral water. That also beat analysts' estimates. The company stuck to its forecasts for annual sales growth of 8 percent to 10 percent excluding takeovers and exchange rates and a widening of 0.4 percent to 0.5 percent by its operating margin.
"The results are reassuring," said Clemence Bounaix, a Paris-based analyst at KBL Richelieu Gestion, which counts Danone stock among the US$5.1 billion it oversees. The yogurt maker bought Numico to become Europe's biggest maker of foods for young children.