(AOF) – The French food multinational Danone announces today the appointment of three Deputy General Managers (DGA) with expanded skills, to increase its performance in its markets by bringing together categories and regions: Véronique Penchienati-Bosetta, Shane Grant and Juergen Esser. Reporting directly to Antoine de Saint-Affrique, Chief Executive Officer of the group, they will continue to implement the Renew Danone strategy. Danone also announces the appointment of Pablo Perversi as General Manager Europe.
Pablo Perversi will report to Véronique Penchienati-Bosetta and will sit on Danone’s Executive Committee. Previously, he held the positions of Director of Innovation, Quality and Sustainable Development of Barry Callebaut and Vice-President Foods Europe and member of the Executive Committee of Unilever Europe.
Véronique Penchienati-Bosetta, currently International Managing Director, has been appointed Group DGA, International Managing Director and Specialized Nutrition, Waters, Global Marketing & Digital Managing Director. She will oversee the Europe, CNAO (China, North Asia and Oceania) and Rest of the World (CIS, AMEA) Zones. She will also lead the Specialized Nutrition and Waters categories, and the Global Marketing & Digital functions.
Shane Grant, until then Managing Director of the North America zone, has been appointed Group CEO, CEO Americas and CEO Dairy and plant-based products, and Global Sales. He will oversee the NORAM (North America) and LATAM (Latin America) Zones as well as the Dairy and Plant-based (EDP) category and the Global Customer & Commercial Leadership functions.
Juergen Esser, now Chief Financial Officer, Technology & Data, has been appointed Group DGA, in charge of the Finance, Technology & Data functions.
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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 €24.3 billion divided into 3 divisions: dairy or vegetable products for 54%, specialized nutrition for 31% and bottled water;
– Revenues balanced between Europe-North America (57%, including 22% for the United States) and the rest of the world -Argentina, Brazil, Mexico, China, Indonesia, Russia, Turkey and Morocco;
– Model 2030 “One Planet. One Health”: based on the purpose of “providing 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 chairing the 16-member board of directors, Antoine de Saint-Affrique as general manager and François Riboud being honorary chairman;
– Healthy balance sheet with, at the end of June, net debt of €11.5 billion and free cash flow of €674 million.
Challenges
– Renov Danone 2024 strategy:
– based on 4 pillars: identify the growth areas of the future, regain competitiveness, develop selectively and manage the portfolio,
– with new 2022-2024 objectives: 3 to 5% annual increase in sales and operating margin of +12% thanks to savings from the Local First plan,
– including an intermediate objective for 2023-2024: portfolio rotation of 10% of turnover, investments limited to 4.5% of turnover;
– Innovation strategy contributing to ¼ of annual sales and carried out in 2 international centers and 7 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;
– Long-standing environmental strategy:
– “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;
– Strengthening, with the purchase of Follow your Heart, of the plant-based products business (sales expected at €5 billion in 2025 vs. €2 billion in 2020);
– Benefits of the reinvestment program in product quality and capacity.
Challenges
– Impact of raw material inflation: 660 basis points on the operating margin despite the 10 to 12% rise in milk prices (+10% of sales), and, in France, tensions with producers milk and dispensers;
– Russia-Ukraine war: stoppage of the production of dairy products and infant nutrition in Russia (13 factories, 8,000 employees, or 5 to 6% of sales and 3 to 5% of operating profit);
– Total renewal of the board of directors, of 12 members in the long term, by 2023;
– After a 14.9% increase in turnover at the end of September, the 2nd increase in the 2022 target: 7 to 8% increase in revenues and operating margin of +12%.
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.