PARIS (dpa-AFX) - French dairy giant Danone SA (DANOY.PK) said Friday that all four of its business units, including Medical Nutrition, have a crucial role to play to achieve profitable, sustainable growth.
Danone also announced certain management changes, including the appointment of Cécile Cabanis as chief financial officer and said it will create a new Africa division as part of its efforts to boost its presence in emerging markets.
Looking ahead, Danone slightly altered its financial outlook for fiscal 2014, saying that results could be towards the lower end of its guidance ranges.
The world's largest yogurt-maker now forecasts fiscal 2014 organic growth of over 4.5 percent and trading operating margin to be down less than 20 basis points like-for-like. The company projects free cash-flow between 1.3 billion and 1.4 billion euros.
Danone had earlier forecast fiscal 2014 like-for-like sales growth of between 4.5 and 5.5 percent, and trading operating margin to be stable within a range of -20 to +20 basis points.
Emmanuel Faber, CEO of Danone said, '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.'
Danone, which makes Activia yogurt and Evian water, was also earlier said to be in talks to sell its medical-nutrition business to U.S. pharmaceutical and medication delivery company Hospira, Inc. (HSP) in a cash and stock deal that could value the unit at nearly $5 billion.
Some other suitors for the business reportedly included Swiss food giant Nestle SA (NSRGY), German healthcare group Fresenius SE and several buyout firms. However, the company's announcement today puts an end to speculation about the future of the medical nutrition business.
For the most recent third quarter, Medical Nutrition like-for-like sales climbed 10.1 percent, with volume growth of 5.6 percent. The company had stated that Medical Nutrition division reported its strongest sales increase in the past four years.
Danone said Friday that it will continue to expand capacity rapidly and build development platforms in fast-growing regions, particularly Asia and Africa. The company noted that investments made for this purpose over the past two years have resulted in a higher use of debt than in the past, and at a level that could imply a credit rating one notch lower.
As part of efforts to support the 'Danone 2020' ambition, Danone said it has made management changes that are effective January 1, 2015.
The company said that Gustavo Valle, currently serving as Executive Vice President of Europe, has been appointed Executive Vice President of Fresh Dairy Products. He is tasked with consolidating the division's return to growth initiated by Thomas Kunz.
Pierre-André Térisse has been appointed Executive Vice President of the newly-created Africa division. Since 2008, Pierre-André Térisse has served as the company's CFO.
Cécile Cabanis will replace Pierre-André Térisse as CFO, effective February 20, 2015. She joined Danone in 2004, and has served in a range of key positions in finance, including Corporate Finance Director, then head of Business Development. Since 2010, she has been Vice President Finance for the Fresh Dairy Products division.
Danone named Bertrand Austruy as General Secretary, a new function that combines legal affairs, regulatory matters, compliance and food safety, as well as communications and public affairs. Austruy joined Danone in 2001 and previously served as General Counsel, Vice President Product Compliance and Food Safety.
Danone said that Valle, Cabanis and Austruy will join the company's Executive Committee.
In mid-October, Danone reported a 3 percent increase in sales for the third quarter from the year-ago period, and recorded about 7 percent growth organically, reflecting stable sales volumes and a 7 percent growth due to the price/mix effect.
DANOY closed Thursday's trading at $13.61, down $0.20 or 1.45 percent on a volume of 135,400 shares.
In Paris, the stock is trading at 54.42 euros, down 0.99 euros or 1.79 percent on a volume of 784,019 shares.
Copyright RTT News/dpa-AFX