Paris: French food group Danone 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”. Danone, known globally for its yoghurt products, also spoke of its desire to “rapidly reconnect” with the group’s goal to deliver midterm sales growth of 3-5%.
There has been recurring speculation that the group’s waters business and notably the Mizone brand in China could be among non-performing assets eventually earmarked for disposal, though Faber told analysts on Monday he would be “patient” with Mizone. Danone earlier posted a 2.5% drop in like-forlike third-quarter sales, slightly worse than the 2.2% decline expected by analysts.