CEO of Yogurt Giant Danone Steps Aside After Clash With Activists
15 Marzo 2021 - 05:51AM
Noticias Dow Jones
By Nick Kostov
PARIS -- Danone SA's Chief Executive and Chairman Emmanuel Faber
has stepped down from the yogurt maker after a clash with
investors, marking a rare victory for activist funds in France's
rigid corporate landscape.
Mr. Faber's leadership of the company, which makes Dannon and
Activia yogurts, came under scrutiny months ago when activist
investors Blue Bell Capital Partners in London and Wisconsin-based
investor Artisan Partners called for his ouster, citing the firm's
lackluster share price and underperforming dairy and water brands.
Another shareholder, Los Angeles-based Causeway Capital Management,
called for Danone's management to be held accountable for missing
targets.
On Monday, Danone said Gilles Schnepp -- who previously ran a
French electrical equipment group and joined the board in December
-- would take over as nonexecutive chairman. Two senior Danone
executives -- Véronique Penchienati-Bosetta, who leads the firm's
international business, and CEO of North America Shane Grant --
will lead the company while a search for a new chief executive is
carried out.
"These are decisive first steps towards putting Danone back on a
profitable growth trajectory," Bluebell Capital said Monday.
The company's shares rose 4% in early trading. Mr. Faber
couldn't be immediately reached for comment.
Activist investors have zeroed in on European packaged goods
companies in recent years, but their demands have struggled to gain
traction on the continent, where corporate culture tends to favor
continuity. Pernod Ricard SA, the French drinks giant, has been
pressured by activist investor Elliott Management Corp., who called
for better profit margins and governance. Nestlé SA found itself
under pressure from activist investor Dan Loeb who demanded the
Swiss firm sell its 23% stake in French cosmetics giant L'Oréal
SA.
Danone's move brings the curtain down on Mr. Faber's
six-and-a-half year tenure at a difficult time. The Paris-based
company has been hit hard by the coronavirus pandemic, with the
firm reporting a drop in sales for 2020. In particular, Danone's
bottled water business, best known for the Evian and Volvic brands,
struggled as sales to restaurants and bars fell because of
widespread lockdowns. Meanwhile, the firm's baby-food business has
been under pressure in China, where competition from local brands
is rising and birthrates fell 15% last year.
Danone shares are up 11% since Mr. Faber took over in October
2014. Meanwhile, rival Nestlé's stock has risen 43%, and Unilever
PLC by 55%.
Mr. Faber's performance has come under intense pressure in
recent months. Despite buying U.S. dairy-alternative brand
WhiteWave for $10.4 billion in 2016 -- a deal that more than
doubled its North American business -- the French firm has been
losing market share to smaller rivals in the growing sector for
plant-based products.
In February, Mr. Faber pushed back against criticism, telling
financial analysts that Danone met its margin target last year and
over-delivered on cash-flow. He also said that Danone had increased
market share in a number of key businesses in 2020, including
infant milk formula in China, water in Europe and dairy in North
America.
Earlier this month, Danone's board said Mr. Faber would step
down as CEO while remaining chairman. That approach didn't satisfy
the activist investors who said the company needed a clean
break.
The investors were critical of Mr. Faber's restructuring plan,
announced in November. The plan included a reduction in costs of 1
billion euros, equivalent to $1.2 billion, over the next three
years. It also delegated more power to country managers, stripped
out costs at its Paris headquarters and divested parts of its
portfolio.
During his tenure, Mr. Faber became known for his interest in
sustainable agriculture and talked frequently about the
environmental and social impact of Danone's activities.
Danone last year adopted the French "entreprise à mission"
framework, committing itself to pursue a social and environmental
purpose beyond profit. The company also began reporting a
carbon-adjusted earnings per share metric.
However, some people who worked with him say he was an
uncompromising boss who pushed his employees too hard.
"Some people told him 'You're asking far too much of us. We
can't sell yogurts, and at the same time save the planet,'" said
one person close to Mr. Faber.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
March 15, 2021 07:36 ET (11:36 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Danone (EU:BN)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Danone (EU:BN)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024