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PARIS, April 17 French food group Danone said consumer spending would remain under presure in Western Europe in 2012, but it kept its full-year goals intact after first-quarter sales growth beat expectations.
The world's largest yoghurt maker, with brands including Actimel and Activia, said turnaround plans in Russia and in the United States, where sales of its core dairy division have lagged, were showing the first signs of paying off.
Like-for-like sales grew 6.9 percent in the quarter, beating analysts' forecasts for 5.8 percent growth, driven by strong demand for baby food, medical nutrition - mostly liquids administered to hospital patients - and water in emerging markets.
Total sales, which include the effects of foreign exchange fluctuations, reached 5.117 billion euros ($6.68 billion), a reported rise of 7.6 percent.
Danone confirmed its target of 5-7 percent like-for-like sales growth for 2012 and a flat operating margin.
Danone, which competes with Nestle and Unilever , is the most exposed among big food groups to the euro zone debt crisis with around 40 percent of sales in the region. It makes 11 percent of its sales in France and a further 7 percent in austerity-hit Spain. ($1 = 0.7656 euros) (Reporting by Dominique Vidalon; Editing by Christian Plumb)