|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||54.55 - 55.15|
|52-week range||54.02 - 83.95|
|Beta (5Y monthly)||0.53|
|PE ratio (TTM)||11.27|
|Forward dividend & yield||2.40 (4.36%)|
|Ex-dividend date||14 Jul 2020|
|1y target est||N/A|
(Bloomberg Opinion) -- “A new world: Deliver. Reshape. Review. Adapt.”No one can disagree with the direction of Danone SA’s new strategic blueprint announced on Monday. Much more debatable is whether the French food group that makes Activia yogurt and Evian mineral water can actually achieve it. Even before the pandemic struck, Danone was underperforming. Crowded grocery shelves and intense competition from nimbler upstarts left it struggling to lift sales and profit growth. Then Covid-19 hit demand in key segments such as bottled water and infant nutrition. As of Monday, the shares are still languishing around their March low.The group has had some successes over the years. For example, after paying $10 billion for plant-based beverage company WhiteWave in 2016, it obtained an enviable position in dairy alternatives, which are growing faster than the traditional sector. But the company has also seemed accident-prone. A brand revamp of the flagship yogurt Activia in 2016 proved to be disastrous and sales slumped.Danone forecast a revenue rebound in the second half of 2019, but this never materialized. It had to cut its full-year sales guidance last year.A fresh organizational structure should bring focus. The company announced a new finance director and is shifting to a system of management that’s organized by geography rather than product. It is also reviewing its portfolio. Operations in Argentina and at Vega, a North American sports nutrition business acquired as part of WhiteWave, are the first to be examined. Together these account for annual sales of about 500 million euros ($588 million). This is a good start, but Danone should go further.It would be wise to offload underperforming brands within the waters business, given pressure from consumers going out less and mounting environmental concerns over plastic. Duncan Fox, an analyst at Bloomberg Intelligence, says other good candidates for review would be some non-core dairy brands and parts of the nutrition business addressing specific medical conditions.Danone should have an advantage: Many of its products, such as yogurt, are sold in supermarkets, which are benefiting from more food and drink being consumed at home. The pandemic has further focused consumers’ attention on their health, something that should also benefit Danone’s plant-based portfolio, as an increasing number of people adopt vegan diets.But these factors haven’t yet translated into superior sales growth. The group also faces continued competition from the likes of Chobani, the U.S. greek yogurt maker, and now Oatly AB, the trendy oat milk manufacturer that is considering an initial public offering. It’s not clear that the new strategy will be enough to propel Danone to the 3%-5% annual sales growth target it announced on Monday. Both its 2020 profit margin forecast of 14% and the revenue expansion goal are behind its previously held guidance for this year, of 16% and 4%-5% respectively.Danone is currently trading at a record discount to rival Nestle SA on a forward price-to-earnings basis. That’s not surprising. Nestle’s chief executive officer Mark Schneider has done all the things that Danone says it wants to. He has reshaped the food giant, reviewed its portfolio, adapted to changing consumer tastes and delivered for shareholders. To close the discount, Danone needs to do the same. But it may already be too late.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Danone Chief Executive Officer Emmanuel Faber plans to trim underperforming businesses throughout the company’s portfolio as shares of the French yogurt maker languish near a six-year low.The company is studying a sale of the Vega protein powder brand as well as a unit in Argentina, potentially getting rid of assets with revenue of 500 million euros ($585 million). Faber said Monday some divisions could cut 20% to 30% of the products they make. The stock rose 1.4% in Paris until a market-wide trading disruption on Euronext.Faber said divestments will be “pruning” and ruled out an exit of any of the company’s existing categories, which are dairy and plant-based products, specialized nutrition and bottled water.“It took us more than 10 years to assemble this portfolio of categories, and there’s a clear cohesiveness,” the CEO said in a phone interview. “We would look at assets that don’t move the needle for Danone because they’re too small or would require to double in size locally, so someone else might be a better owner.”Danone has struggled for years amid a competitive grocery market in Europe, rising milk prices and upstart competitors such as Chobani in the U.S. The company has lost about a quarter of its market value in 2020.Two weeks after the 470 million-euros sale of a stake in Japanese beverage maker Yakult Honsha Co., Faber is set to make even more divestments. That may become easier as the company shifts to a system of management focused on geography rather than product groups. Danone announced the measures Monday as it reported a 2.5% drop in third-quarter revenue, on a like-for-like basis, and said that Chief Financial Officer Cecile Cabanis is leaving.Faber said that small brands, which were in vogue five years ago, have become less important. The company will also review factories, logistics, supplies and fleets in order to make them more efficient, the CEO said.Read more: Revenge of Hot Pockets: Covid-19 Reinvigorates Tired Old Brands“Danone is way behind the curve,” said Duncan Fox, an analyst at Bloomberg Intelligence. “It’s been several years of slow growth. The company may need to resort to larger asset sales across its categories for a year of transition in 2021.”Juergen Esser, currently CFO of Danone’s bottled-water business, will replace Cabanis, who leaves in February after 16 years at the company.Danone said it’s naming Shane Grant as a regional CEO for North America and Veronique Penchienati-Bosetta as CEO for Europe and the rest of the world. Henri Bruxelles will become chief operating officer.On Monday, it gave a forecast for a 14% recurring operating margin and 1.8 billion euros of free cash flow this year. The company withdrew guidance for this year in April as the slump in tourism and restaurants weighed on its bottled-water business.(Updates with CEO’s M&A comments in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
French food group Danone <DANO.PA> is planning what could become a string of asset disposals after an extensive review and management shake-up announced on Monday as it seeks to contend with the challenges posed by the coronavirus crisis. Danone said it is looking at strategic options for its Argentina business and its plant-based North American brand Vega, which have combined sales of about 500 million euros ($588 million), and would later conduct a more in depth portfolio review to prune underperforming assets. "This is a new world and therefore, in many ways, this company will need to reinvent itself again," Chairman and CEO Emmanuel Faber told analysts, adding that Danone's plan would also entail "very significant cost savings".