Danone, the world's biggest yogurt maker, plans to cut 900 jobs in Europe after 2012 profitability declined on weak consumption in southern Europe.

The trading operating margin narrowed 0.5 percentage point to 14.2 per cent, the Paris-based company said in a statement. Net income from continuing operations rose to €1.82 billion ($2.4 billion) from €1.75 billion a year earlier. Demand for Danone's dairy products has weakened in southern Europe as the region's debt crisis spurs shoppers to switch to cheaper private-label products. The company in June lowered its profitability forecast and in December announced a cost-saving plan. A month earlier, investor Nelson Peltz said he owned about 1 per cent of Danone through his Trian Fund Management LP and called for management to pare costs and focus on cash returns.

"2013 will be a year of transition," chief executive officer Franck Riboud said in the statement. "A year aimed at returning our activities as a whole to strong, profitable growth by 2014."

So-called like-for-like sales increased by 4.9 per cent in the fourth quarter, exceeding analyst estimates of a 3.7 per cent gain. The measure excludes divestments and currency changes. For the year, like-for-like revenue gained 5.4 per cent. Danone said it expects revenue in 2013 to rise at least 5 per cent, while the operating margin will probably decline by 30 basis points to 50 basis points on a like-for-like basis.

Danone chief financial officer Pierre-Andre Terisse said on a call with reporters that he had no comment on Nestle's plans to divest assets after its acquisition of an infant nutrition unit of Pfizer Inc.

Bloomberg