(AOF) – Danone announces that Sanjiv Mehta, Chief Executive Officer of Hindustan Unilever whose term ends on June 26, 2023, has been proposed to join the Board of Directors as an independent director. His appointment will be submitted to the vote of the shareholders at the General Meeting on April 27, to join the Board on July 1, 2023. The appointment of Sanjiv Mehta will allow the Board of Directors to benefit from his in-depth knowledge of the property sector. consumption and its unique and diversified international expertise, particularly in Asia.
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Key points
– World leader in the food industry: first in fresh dairy products (Activia, Gervais, Alpro, Oikos, Actimel brands, etc.), second worldwide in infant and medical nutrition (Blédina, Dumex, SGM, Aptamil, Theocate, etc.) and third in bottled waters (Mizone, Volvic, Evian and Acqua);
– Sales of €27.7 billion divided into 3 divisions: dairy or vegetable products for half, specialized nutrition for a third and bottled water;
– Revenues balanced between Europe (32%), North America (24%), China, North Asia and Oceania (12%) then Argentina, Brazil, Mexico, Indonesia, Turkey, Ukraine and Morocco ;
– Model 2030 “One Planet. One Health”: “bringing health through innovation”, accelerating growth, maximizing efficiency, developing committed brands and enhancing profitability;
– Open but blocked capital (double voting rights, voting limited to AGMs, etc.), Gilles Schnepp presiding over the board of directors renewed and limited to 13 members in 2023, Antoine de Saint-Affrique ensuring the general management and François Riboud being honorary president ;
-Healthy balance sheet with net debt reduced to €11.1 billion compared to €18 billion in shareholders’ equity and self-financing of €3 billion.
Challenges
– Renov Danone 2024 strategy aimed at identifying future growth areas, regaining competitiveness, selective development and portfolio management:
– based on 4 pillars: identify the growth areas of the future, regain competitiveness, develop selectively and manage the portfolio,
– 2022-2024 objectives: 3 to 5% annual increase in sales and operating margin of +12% thanks to savings from the Local First plan,
– 2023-2024 intermediate objective: portfolio rotation of 10% of revenue, investments limited to 4.5% of revenue;
– Innovation strategy contributing to ¼ of annual sales and carried out in 2 international centers and 8 specialized centers;
– 6 themes: microbiota, plant matrices, packaging and post-plastic, naturalness and organic, allergies and healthy ageing,
– co-construction with consumers using agile methods;
– new research & innovation center in Saclay
– Long-standing environmental strategy:
– global Re-Fuel program: by 2030, reduction of at least 42% of CO2 emissions excluding suppliers and use of renewables for 100% of electricity and 50% of overall energy consumption,
– “Acceleration plan for the climate” with €2 billion invested (2020-22) in the group’s brands, agriculture, packaging (84% recyclable) and digitalisation,
– “WeActForWater”: halving the use of virgin plastic, i.e., in 2025, 50% recycled PET (rPET) worldwide and 100% in Europe, accelerating carbon neutrality in Europe by 2025 (2020 for Evian and Volvic), water access funds (50 million people by 2030),
– B Corp certification for 50% of turnover;
– Portfolio rotation: towards a disposal of Horizon Organic and Wallaby, insufficiently profitable (3% of the group’s revenues) after the purchase of Follow your Heart, strengthening the plant-based products business (sales expected at €5 billion in 2025 vs €2 billion in 2020).
Challenges
-Disparities in margins, with specialized nutrition and Asia-Oceania being the most profitable;
-Strong impact of commodity inflation, 2/3 offset by volume and price effects;
– Russia-Ukraine war: stoppage of production in Russia, resulting in €500 million in depreciation;
– Fallout from heavy advertising investments in the second half of 2022;
-Summons to court by NGOs for lack of vigilance in plastics;
– After a 7.8% increase in turnover, 2023 objective: 3 to 5% increase in revenues and moderate improvement in the operating margin;
– 2022 dividend of €2, up 3.1%.
Find out more about the Agrifood sector
Soaring energy prices and a call for help
In the past, energy represented a fixed cost of 3% of turnover. This year, this percentage rises to 5% or even 7% for VSEs-SMEs, according to Ania (National Association of Food Industries). Professionals are very worried because until the end of 2022 they generally benefit from coverage to cushion these increases. However, they have not been renewed for 2023 and after. Consequently, 25 of the main inter-professional organizations (Intercereals, Inaporc, Semae, etc.) are calling on the State for help in the face of the erosion of their margins and their capacity to investment.
The State has proposed several devices, including an “electricity damper”, which are deemed insufficient. The organizations also deplore the failure of European negotiations to achieve a tariff shield to avoid distortions of competition. Agriculture and agri-food require a maximum ceiling price of €180/MWh, while many companies buy at prices above €500/MWh on the French market.