Danone this morning (12 December) announced plans to form a new division for its operations in Africa – a region where it plans to invest more – and said it would retain its medical nutrition arm, which it had been rumoured to sell.
The moves were outlined alongside changes to the French food giant’s management team, including the appointment of a new CFO.
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Pierre-André Térisse, Danone’s current CFO, will take charge of the Africa unit, which the company said it had formed to “accelerate expansion” in what it called a “strategic region”. Cécile Cabanis, vice-president for finance within Danone’s fresh dairy products division, has been promoted to CFO.
The company also said its medical nutrition business – an asset it had been reported to be looking to offload – would be kept.
In a statement, CEO Emmanuel Faber said: “As 2014 draws to an end, I want to re-emphasise that message and reiterate that each of our core businesses – fresh dairy products, waters, early life nutrition and medical nutrition – has a role to play in living up to our mission and achieving the profitable, sustainable growth that is an integral part of our strategy.”
In an interview this morning with The Financial Times, Faber said Danone would look to grow the medical nutrition division “through a mix of organic growth, acquisitions and there may be joint ventures”. He added: “Maybe some day there will be marginal disposals – that doesn’t change what I said about the role of our four businesses.”
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By GlobalDataAsked about the reports during the year that said Danone had been in talks to sell the unit, Faber told the FT: “We have been extremely active for 20 years in designing our portfolio, we are talking to a number of people, testing, listening, studying because that is the name of what we are doing all the time.”
In another senior management change, Gustavo Valle has been appointed executive vice president for fresh dairy products. Danone said Valle, who has been in charge of its business in Europe, has been “tasked with consolidating the division’s return to growth initiated by Thomas Kunz”, who is set to leave the business.
Danone also narrowed its guidance for its 2014 organic sales growth and for its trading operating margins, a move that could also have weighed on its shares today. Today, it said it now expects organic sales to grow by over 4.5%; in October when the company announced its third-quarter results, it forecast growth of 4.5-5.5%. On trading operating margins, Danone now forecasts a fall of “less than 20 basis points like-for-like”. Two months ago, it gave a range of a decline of 20 basis points to an increase of 20 bps.
Click here for analysis of today’s announcement from Danone.
