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Danone to slash 900 jobs

Feb 19 2013 17:54

Paris - French food industry group Danone said it would cut 900 management and administration jobs across Europe as it reported a flat net profit for 2012 of €1.81bn ($2.4bn).

The cuts represent 10% of managerial staff in Europe with the aim of saving €200m over two years and to boost flagging sales in Europe, the firm said.

Danone chairperson and chief executive Franck Riboud said in a statement that European sales were "under pressure from a severe deterioration in overall consumer demand", falling by 3.0% last year compared to the level in 2011.

"Clearly this situation is not sustainable, and we will overcome it," Riboud said in a statement.

But outside Europe sales grew by an average of 10.0% generating 60% of the group's total sales with Russia now Danone's top market by sales on near equal footing with France.

The current operating margin fell by 0.5% points.

The company said that the job cuts would be achieved by relocation within the company and through voluntary departures. The company said it would a provision €450m in 2013.

The price of shares in the company rose by 5.50% in afternoon trading on a Paris market up by 1.67%.

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