PARIS (Reuters) – French food group Danone kept its financial goals for the 2022 full year after it delivered stronger-than-expected 7.1% sales growth in the first quarter amid a challenging environment marked by inflation, higher input costs and uncertainties linked to the war in Ukraine.

This year’s strong start was due to favourable comparables from the previous year, price increases and stronger demand for China baby formula. There has also been a post COVID improvement in water consumption outside the home.

Danone, the largest maker of yoghurt in the world, reported that its sales increased 7.1% to 6.32 billion euro ($6.74 billion), compared to the 5.5% increase expected by 19 analysts.

Antoine de Saint-Affrique (Danone) is the new chief of Danone. He has been working on a revival plan in light of rising input costs as well as further uncertainties resulting from Russia’s invasion. Danone had to cease investing in Russia.

It was reiterated by the group that it expects its operating margin to fall to no more then 12% of sales in 2022, from 13.7% for 2021. Price-driven like-for-like growth will be 3% to 5%, against 3.4% for 2021.

($1 = 0.9246 euros)