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Danone to cut 900 jobs in Europe

Tuesday, February 19 08:07:33

Danone, the world's biggest yogurt maker, said it plans to cut 900 jobs in Europe after 2012 profitability declined on weak consumption in southern Europe.

The trading operating margin narrowed 0.5 percentage point to 14.2 percent, the Paris-based company said today in an e- mailed statement.

Net income from continuing operations rose to 1.82 billion euros ($2.4 billion) from 1.75 billion euros a year earlier, the Paris-based company said today in an e-mailed statement. The average estimate of 28 analysts surveyed by Bloomberg was 1.81 billion euros.

Demand for Danone's dairy products has weakened in southern Europe as the region's debt crisis spurs shoppers to switch to cheaper private-label products. The company in June lowered its profitability forecast and in December announced a cost-saving plan. A month earlier, investor Nelson Peltz said he owned about 1 percent of Danone through his Trian Fund Management LP and called for management to pare costs and focus on cash returns.

"2013 will be a year of transition," Chief Executive Officer Franck Riboud said in the statement. "A year aimed at returning our activities as a whole to strong, profitable growth by 2014."

So-called like-for-like sales increased 4.9 percent in the fourth quarter, exceeding analyst estimates of a 3.7 percent gain. The measure excludes divestments and currency changes. For the year, like-for-like revenue gained 5.4 percent.