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Danone posts tasty profit
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January 27, 2000: 6:25 a.m. ET
French food group's 1999 profit up 14% as streamlining continues
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LONDON (CNNfn) - Danone, France's biggest food maker, posted a stronger-than-expected 14 percent rise in 1999 net profit Thursday, attributing the gain to a tighter focus on drinks, dairy products and biscuits.
Profit rose to 681 million euros ($681 million), surpassing analysts' forecasts of about 670 million euros, according to a survey by Reuters. The operating profit margin rose to 10.5 percent from 10 percent in 1998, while sales rose 2.8 percent to 13.293 billion euros.
Danone in 1997 embarked on an ambitious streamlining program that has since gained momentum. Last year it sold its pre-made fresh and frozen dinner business along with its grocery arm, at the same time making acquisitions worth more than 2 billion francs ($305 million), including McKesson Water Products Co., the third-largest mineral water producer and distributor in the United States.
The company has also expressed interest in buying part of U.K. cookie maker United Biscuits.
Operating margins were highest in Danone's beverage business, at 12.3 percent, trailed by dairy products, at 11 percent, containers at 10.3 percent, and biscuits at 7.9 percent.
Fully diluted earnings per share climbed 14.9 percent to 9.37 euros aided by a large share-buyback program, the company said.
The rise in net income per share, stripping out capital gains and losses on disposals, was 10.3 percent, the company said.
Analysts said Danone was largely spared from the worst ravages of financial crises that last year hit consumer demand in Russia and Latin America, where rivals Unilever and Nestle have greater exposure.
Danone shares rose 0.8 percent to 228.7 euros in Paris Thursday morning. 
--from staff and wire reports
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