Danone to sell assets, shake up management to revive business

Bloomberg October 19 | Updated on October 19, 2020

Puts businesses contributing €500 million up for sale; shifting to management system more focused on geography rather than product groups

Danone said it’s planning to sell assets and that Chief Financial Officer Cecile Cabanis is leaving in a management shake-up to revive the French yogurt maker.

The company is putting businesses that contribute €500 million ($585 million) up for sale and is shifting Danone to a system of management more focused on geography rather than product groups. Danone announced the measures on Monday as it reported a 2.5 per cent drop in third quarter revenue, on a like-for-like basis.

Chairman and Chief Executive Officer Emmanuel Faber has struggled to revive Danone amid a competitive grocery market in Europe, rising milk prices and upstart competitors such as Chobani in the US. The company has lost about a quarter of its market value this year and the stock is near a level first reached 14 years ago.

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Juergen Esser, currently CFO of Danone’s bottled water business, will replace Cabanis, who leaves in February.

Danone said it’s planning to sell its Argentinean business, and Vega, a plant-based brand it obtained through its $10-billion acquisition of WhiteWave. The company will also do a full review of its portfolio to weed out other underperforming assets.

Faber has been bringing in new blood to Danone’s management. Shane Grant, a former Coca-Cola Co executive, became head of the North American business in May. Last year, Nigyar Makhmudova, a manager from Mars Inc, became responsible for research and innovation.

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Now Danone said it’s naming two regional CEOs, who will be Grant for North America and Veronique Penchienati-Bosetta for Europe and the rest of the world. Henri Bruxelles will become chief operating officer.

The company withdrew its guidance for this year in April as the slump in tourism and restaurants weighs on its bottled-water business. Monday it gave a new forecast for a 14 per cent recurring operating margin and 1.8 billion euros of free cash flow this year.

Published on October 19, 2020

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