French food group Danone launches portfolio review to cope with COVID-19 world

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 Danone said on Monday it was launching a review of its assets and reshaping its management to better cope with challenges stemming from the coronavirus pandemic.

The world’s largest yoghurt maker, which is already looking at strategic options for 500 million euros ($585.40 million)worth of assets in Argentina and for North American plant-based brand Vega, said it aimed to “rapidly reconnect” with its goal to deliver mid-term like-for-like sales growth of 3-5%.

The consumer giant, owner of Evian and Badoit water and the Activia and actimel yoghurt brands also reinstated its forecasts for 2020, targeting a 14% recurring operating margin and 1.8 billion euros of free cash flow.

Danone also announced that Chief Financial Officer Cecile Cabanis would leave the company in February to be replaced by Juergen Esser, currently CFO of the Waters and Africa divisions.

This came as Danone posted a 2.5 % drop in like-for-like third quarter sales, slightly worse than analysts expectations of a 2.2% decline, as a fall in out-of-home consumption due to the pandemic continued to hit sales of its bottled waters division and travel restrictions in Asia weighed on its specialised nutrition sales in China.

Chairman and CEO Emmanuel Faber has had a strategy centered on diversifying the group’s portfolio into fast-growing products featuring probiotics, protein and plant-based ingredients to mitigate slower growth in dairy.

Danone shares have lost 25.30% so far this year, lagging a 2% gain for archrival Nestle and a 19% fall in the CAC-40 index of French blue chips.

($1 = 0.8541 euros)

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