Groupe Danone to hold on to core businesses

by Eric Schroeder
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PARIS — Groupe Danone on Dec. 12 said all its business units are key, ending months of speculation that the Paris-based company would try to sell its medical nutrition division to raise cash for acquisitions. In addition to medical nutrition, Groupe Danone’s core businesses are fresh dairy products, waters and early life nutrition.

“When I was appointed in October, I shared with our 100,000 employees that there was no greater inspiration than our mission: bringing health through food to as many people as possible,” said Emmanuel Faber, chief executive officer. “As 2014 draws to an end, I want to re-emphasize 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.”

With the decision made not to sell the medical nutrition business, Mr. Faber said Groupe Danone can focus on expanding capacity and building development platforms in fast-growing regions, particularly Asia and Africa. He said investments made for this purpose over the past two years have resulted in a higher use of debt than in the past.

In addition to stating its commitment to its four core businesses, Groupe Danone confirmed its 2014 targets, including organic growth of more than 4.5% and trading operating margin down less than 20 basis points like-for-like. Free cash flow is expected to be between €1.3 billion and €1.4 billion. The company also announced several personnel appointments to strengthen its management team.

Gustavo Valle has been named executive vice-president of fresh dairy products. He most recently was executive vice-president of Europe, and earlier he led the development of the company’s dairy business in Brazil and the United States.

Pierre-Andre Terisse was named executive vice-president of the newly created Africa division. He previously was chief financial officer.

Succeeding Mr. Terisse as c.f.o. will be Cecile Cabanis. Ms. Cabanis joined Groupe Danone in 2004, and he has held a variety of key positions in finance, including corporate finance director and head of business development. Since 2010 she has been vice-president of finance for the fresh dairy products division.

The company’s board also approved two moves to ensure the “optimum deployment” of the company’s new governance structure. Laurent Sacchi has been tasked with serving as liaison between the chairman and the c.e.o. on major business topics for the company, and also will represent Groupe Danone in interaction with external bodies with which the company wants to strengthen its relations and dialog. Bertrand Austruy has been appointed general secretary, a new position that will combine legal affairs, regulatory matters, compliance and food safety, as well as communications and public affairs. Mr. Austruy joined Groupe Danone in 2001 and most recently was general counsel, vice-president of product compliance and food safety.

“The team we have appointed will focus on our short-term priorities and will take Danone to a new stage in its growth,” Mr. Faber said. “This new development reflects the medium-term goals set under our Danone 2020 roadmap.”
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