DANONE 
PARIS (Reuters) - Danone (>> DANONE) on Wednesday posted first-quarter sales that beat expectations, driven by a recovery in baby food sales in Asia and robust growth in bottled waters.
The world's largest yoghurt maker, which has yet to see a recovery in its core European dairy business, said economic conditions looked set to stay difficult, with deflationary consumer trends continuing in Europe, and kept its full-year sales and profitability goals.
The quarterly year-on-year underlying sales rise of 4.8 percent marked a slight acceleration from 4.7 percent like-for-like growth in the fourth quarter of 2014, Danone said.
The performance beat the company-compiled average of analyst estimates of 4.6 percent growth in group sales.
"This first set of results makes me strongly confident that Danone is on the right track to reach a decisive milestone in 2015," Chief Executive Emmanuel Faber said in a statement.
Total sales, which include the effects of foreign exchange fluctuations, reached 5.471 billion euros (3.94 billion pounds), a rise of 8.1 percent on a reported basis.
Danone kept its 2015 target of like-for-like sales growth of between 4 and 5 percent. It stuck to a forecast for a slight rise in its 2015 operating margin from 12.59 percent in 2014.
Danone, which competes with Nestle (>> Nestle SA) and Unilever (>> Unilever plc), has been seeking to rebuild its position in China after an infant formula product recall in Asia in 2013.
Baby food sales rose 11.6 percent in the quarter, broadly in line with analysts' expectations for 12 percent growth.
In China, which contributes 7 percent of group sales and was hardest hit by the crisis, demand for ultra-premium baby food brands, mostly sold online, was strong. Sales of the less premium Dumex infant formula however remained well below levels seen in early 2013.
(Editing by James Regan and David Holmes)
By Dominique Vidalon
