Faced with the sling of its shareholders, the CEO of Danone promises the "recovery" in 2021

Danone CEO Emmanuel Faber, under pressure from investment funds demanding his departure, promised on Friday that 2021 would mark the "recovery" after 2020 performances weighed down by the pandemic.

"2021 will therefore be a year of recovery," said the leader, quoted in a press release.

"We remain focused on preparing for our return to growth as of the second quarter [2021], and are fully confident that we are creating the right conditions and the right momentum to regain profitable growth as of the second half of the year."

Shareholders judge the company's performance to be insufficient

Managing Director of the French agribusiness flagship since 2014 and CEO since 2017, this boss known to advocate greener and more social capitalism is facing a sling of shareholders.

The Artisan Partners and Bluebell Capital Partners funds judge the company's performance to be insufficient without the Covid-19 crisis being sufficient to explain it, and question its management.

In one year, Danone shares have lost a quarter of their value on the Paris Stock Exchange.

"We fully recognize that our share price on the stock market is below our expectations and are happy, on the occasion of the publication of our annual results, to regain our ability to dialogue openly with our shareholders", continues Emmanuel Faber, in a modest allusion to the crisis of mistrust that targets him.

In 2020, the turnover of the French agri-food giant fell by 6.6% to 23.6 billion euros, a shortfall of around 1.7 billion compared to 2019. As for the margin current operating income, an indicator scrutinized by the markets, it stood at 14% (compared to 15.2% in 2019), a sign that profitability is declining.

The group expects this margin to remain "globally" at this level in 2021. Emmanuel Faber must detail these results throughout the morning, first in front of analysts and then in front of the press.

Unions concern

According to a source familiar with the matter, "governance was not on the agenda" of the board meeting held on Thursday to validate the annual accounts, de facto postponing any decision concerning the future. by Faber.

The silence of the group's directors has cast doubt on their intentions.

What worry the unions CFDT, FO and CGC: they have indicated that they support the current governance, even as Danone is preparing up to 2,000 job cuts around the world.

"I know (...) the uncertainties generated in our offices by the announcement" of this reorganization, underlines Emmanuel Faber.

"We are committed to clarifying as quickly as possible the consequences for everyone concerned."

In a letter on Wednesday, FO had asked the board of directors "to oppose the strategy led by activist funds" which "are used to having objectives exclusively based on profitability which would endanger the future. employees".

The French government has so far preferred to stay away from the fray.

"Let's say that governance is a matter of men," Minister Delegate for Industry Agnès Pannier-Runacher said on BFM Business on Wednesday evening.

"It is not quite the same thing as a question of a site that is closed or a business whose economic model could have consequences, like the case of Carrefour, on the entire agrifood and agriculture sector".

In January, the government opposed the offer of Canadian Couche-Tard to join forces with Carrefour.

The growth driver of plant food

In the meantime, Danone is continuing its strategic shift towards plant food, one of the axes defended by Emmanuel Faber.

The group announced Friday, without precise figures, the acquisition of the Californian company Follow Your Heart, "leader in the markets of cheese and mayonnaise of vegetable origin".

And he intends to "increase its worldwide sales of products of plant origin (...) to 5 billion euros in 2025".

This segment now represents more than 2 billion euros in turnover.