Faber rattling

19 Feb 2021 By Dasha Afanasieva Follow @dasha_reuters

Artisan wants the $47 bln yoghurt maker to dump food and water laggards and prioritise higher-margin lines. A focus on medical nutrition echoes the health science push of the Swiss giant, which has outperformed under pressure from Dan Loeb. But boss Emmanuel Faber is in the way.

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French food group Danone on Feb. 19 reported sales of 23.6 billion euros for 2020, down 1.5% on a like-for-like basis. The decline was in line with analysts’ estimates, according a company-compiled consensus.

The maker of Activia yoghurt and Volvic water reported an operating profit of 3.3 billion euros, down 11% on a like-for-like basis. It said its recurring operating margin in 2021 would be broadly in line with the 14% it reported in 2020, although it warned that the first quarter would still be tough.

Activist investor Artisan Partners on Feb. 17 called on Danone to separate its medical nutrition business from its baby foods unit and offload its Asian water brand Mizone to boost returns. Artisan also wants Danone to sell underperforming brands. Artisan owns more than 3% of Danone.

Danone Chairman and Chief Executive Emmanuel Faber said on Feb. 19 that the company “fully recognize that our share price is not where we would like it to be” and said he was open to dialogue with shareholders.

Danone shares were up 3% at 57.3 euros by 0930 GMT on Feb. 19.

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Danone shares were up 3% at 57.3 euros by 0930 GMT on Feb. 19.

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