French food group Danone has today unveiled a new €1 billion cost cutting plan.

It said the turnaround of its dairy division in Europe was taking longer than expected while tough conditions in China would also endure in 2017. 

The world's largest yoghurt maker did not provide provide sales or operating profit margin growth targets for the current year.

It said it would review its financial goals for 2017 after closing its acquisition of US organic food group WhiteWave, which is slated for the first quarter. 

Danone, which makes Activia yoghurt, Evian water and Bledina babyfood, said like-for-like sales in 2016 rose 2.9% to €21.94 billion.

This was in line with analysts' expectations of 2.9% growth for 2016, which was a slowdown from 4.4% growth in 2015. 

The slowdown reflected tough market conditions in Spain and problems with the relaunch of its Activia brand in Europe, which held back dairy sales growth in the final quarter, while pressures in the Chinese market weighed on baby food sales.

Danone had flagged the European dairy problem in December, warning its 2016 sales growth would come below its original target of 3-5%.