Danone, the world's largest yoghurt maker, today raised its 2016 profit margin target, citing a tight control of costs as it battles volatile markets, notably in China.
The maker of Activia and Actimel yoghurt said in an unscheduled update that it now expected its trading operating margin to rise by 50 to 60 basis points in 2016.
It had previously forecast a "solid improvement" from a margin of 12.91% in 2015, with some analysts forecasting an increase of around 30 basis points.
Danone also reiterated its forecast for like-for-like sales growth in a range of 3-5% this year.
Analysts said this was positive news as investors were concerned about Danone's ability to improve margins and maintain its organic revenue growth rate.
Danone is facing volatility in China with uncertainty regarding new regulation on baby formula and e-commerce as well as slower growth for its Mizone water brand.
Emmanuel Faber, who took over as Danone CEO in October 2014, has vowed to return the French company to "strong profitable and sustainable growth" by 2020.
He has launched a review of its business in China and is overhauling its dairy division where it has cut costs and launched new products.
