Danone reported an 8.0 per cent increase in sales last year but has announced plans to reduce its headcount by 900 as a result of tough market conditions.

The French food-products giant said that s ales totalled €20.869bn in 2012. On a comparable basis, sales rose 5.4% last year.

Underlying net income rose to €1.818bn, from the €1.749bn registered in 2011, and in line with the consensus estimate.

However, Danone's trading operating margin fell back by 50 basis points on a like-for-like basis to 14.18%. The French company blamed the drop on "lower sales in Europe, particularly southern Europe".

Chief Executive Officer Franck Riboud said that "2013 will be a year of transition." Danone took advantage of this earnings report to give details on the savings plan announced last December.

As part of that programme, the company will cut around 900 management and administrative positions across 26 European countries in order to, in the words of the firm, "address a lasting downturn in the European economy and consumer trends that have led to a significant decline in its sales in the region."

Danone said it would return to "strong, profitable" growth in 2014.

JM

Related share prices