Shares in French dairy giant Danone jumped more than 5% yesterday to hit €79 on the Paris stock exchange after the company posted healthy half-year results.

On Thursday, Danone announced half-year sales of more than €12.6bn, with like-for-like sales growing by just under 2% for the period.

Operating profits for the six-month period rose by 4% to stand at close to €1.9bn, as profit margins in the business widened from 14.3% last year to an even stronger 14.7% this year.

Danone said the strong growth in half-year profits was down to further savings coming from its cost-cutting programme, called Program Protein. This cost-cutting initiative is seeking to slash €1bn in costs from Danone’s business by 2020.

In its essential dairy and plant-based division, Danone reported half-year sales growth of 1% to €6.6bn. However, sales volumes in the division declined by 2.5%, which was mainly a result of a fall in sales of traditional dairy products such as yoghurts. Sales of plant-based products under the Alpro brand remain very strong, the company said.

Infant formula

In its specialised nutrition division, which includes its infant formula business, Danone reported sales growth of 2% to €3.7bn, despite a 1% decline in sales volumes. Danone said its infant nutrition business returned to growth in the period after showing some weakness last year.

After three consecutive sales quarters of decline, Danone said its infant nutrition business in China delivered slightly positive growth as the company targeted lower tier cities in China via sales promotions online.

Emmanuel Faber, chief executive of Danone, said he was pleased to see top-line growth across each of Danone’s key business units.

“The innovation momentum remains strong, while we have addressed most of the underperformers in our portfolio. Our margin improvement was of high quality, driven by gross margin progression, and further savings from our protein efficiency programme,” added Faber.

For its full year, Danone has forecast like-for-like sales growth of 3% and is targeting its operating profit margin to rise above 15%.