Danone plans to triple health food sales - https://on.ft.com/2vIBUjI
Chief says French food group wants to encourage more sustainable eating and drinking
The boss of French group Danone that produces brands including Evian water and Activia yoghurt has set out plans to triple sales of health foods.
Emmanuel Faber, Danone’s chief executive, said the company was aiming for €5bn of sales from “plant-based” products by 2025, up from €1.7bn today, building on its 2016 acquisition of WhiteWave, an upmarket US foodmaker.
Mr Faber said there is “huge potential” for WhiteWave to sell new types of products as demand for organic, plant-based and GM-free food grows, and consumers look for healthier choices.
The top three fastest-growing food categories in the US in the past three years have all been healthy: plant-based, fruit and produce, according to market research company Nielsen. Four of the five weakest have been dairy based: milk products, yoghurts, other dairy and cheese.
At the moment, milk alternatives such as soya and almond make up about 80 per cent of Danone’s plant-based sales, while 15 per cent are from non-dairy yoghurts and 5 per cent from desserts. Danone wants to expand further into non-dairy ice cream, vegan cheese and vegan baby food, Mr Faber added.
“Danone has the healthiest portfolio in global food and we believe the structural growth of its plant-based portfolio is under-appreciated,” analysts at Barclays wrote last month.
The group also wants to widen distribution of plant-based products, with plans to market Alpro in Russia and Silk in Latin America. Both brands make dairy-free drinks and desserts.
The company hopes, Mr Faber said, to encourage consumers to adopt healthier and more sustainable eating and drinking habits, and aims to pursue a corporate model that extends beyond creating value for shareholders.
“If we don’t pay for sustainable agriculture, if we don’t pay for regenerative agriculture, there will not be agriculture,” he said. “Right now we are paying dividends, we are defining profits in a way which is simply not sustainable. We are shortening the cycle.”
Danone, which is 100 years old this year, is working towards “B Corp” certification by 2030, which means meeting a demanding set of externally-monitored social and environmental criteria. This month it will grant all of its 100,000 employees a share in the company, in order to make them feel more invested in its future. It is also launching a profit-sharing scheme for all employees.
For his part, the 55-year-old Mr Faber announced last month that he would forgo his retirement package, which analysts have calculated could be worth a total of about €28m. “It’s a totally personal decision,” said Mr Faber, who is paid an annual salary of €2.8m. “It’s consistent with the way I live and the way I want to live. And I do not have a need for what the market economy is allowing me to receive.”
Historically, Danone’s shares have traded at a discount to larger rivals such as Nestlé and Unilever because of “its reputation as a poor capital allocator”, notably paying a high price of $12.5bn for WhiteWave, according to Barclays analysts.
“We found it sometimes difficult to execute on the short term,” Mr Faber said. “The fact is that we have [had] some visible hiccups here and there and a trajectory of growth which has more volatility than some of our biggest competitors.” However, he said that Danone was improving its capital discipline, pointing to its plan to cut €1bn of costs in three years and its target to increase its margin to more than 16 per cent by 2020.
Mr Faber defended Danone’s long-term approach to sustainability. “This vision of the world is not going to be proven until it is in the share price of Danone,” he said. “It may take time because sustainability takes time.”
Maison Lejaby in exclusive sale talks with French entrepreneurs – report (translated)
08 MAY 2019
Stéphane Collaert and Thierry Le Guénic, entrepreneurs specialised in fashion and retail, have entered into exclusive negotiations for the acquisition of Maison Lejaby, a French corsetry and swimwear manufacturer owned by Triana, French daily Le Figaro reported.
The unsourced report noted that Collaert and Le Guénic already acquired earlier this year, the Chevignon fashion brand from Vivartetogether with Royer, a France-based privately-owned footwear trade specialist.
Walt Disney beats by $0.04, beats on revs
- Reports Q2 (Mar) earnings of $1.61 per share, excluding non-recurring items, $0.04 better than the S&P Capital IQ Consensus of $1.57; revenues rose 2.6% year/year to $14.92 bln vs the $14.53 bln S&P Capital IQ Consensus.
- Cable Networks Cable Networks revenues for the quarter increased 2% to $3.7 billion and operating income increased 2% to $1.8 billion. Higher operating income was due to an increase at ESPN. The increase at ESPN was due to higher affiliate revenue, partially offset by an increase in programming and production costs and a decrease in advertising revenue. Affiliate revenue growth reflected contractual rate increases, partially offset by a decline in subscribers. The increase in programming and production costs was due to contractual rate and production cost increases, partially offset by the benefit of a shift in the mix of College Football Playoff (CFP) games.
- Broadcasting revenues for the quarter decreased 2% to $1.8 billion and operating income decreased 29% to $247 million. The decrease in operating income was due to higher programming costs, lower program sales and a decrease in advertising revenue, partially offset by higher affiliate revenue from contractual rate increases. Higher programming costs were due to an increase in production cost write-downs and in the average cost of network programming.
- Parks, Experiences and Products revenues for the quarter increased 5% to $6.2 billion and segment operating income increased 15% to $1.5 billion Studio Entertainment revenues for the quarter decreased 15% to $2.1 billion and segment operating income decreased 39% to $534 million. Lower operating income was due to a decrease in theatrical and home entertainment distribution results, partially offset by an increase in TV/SVOD distribution.
- Direct-to-Consumer & International revenues for the quarter increased 15% to $955 million and segment operating loss increased from $188 million to $393 million. The increase in operating loss was due to our ongoing investment in ESPN+, which was launched in April 2018, costs associated with the upcoming launch of Disney+, a loss from the consolidation of Hulu and higher losses from streaming technology services, partially offset by an increase at our International Channels.
Closing Stock Market SummaryThe S&P 500 declined 0.2% on Wednesday, as investors remained cautious about a U.S.-China trade deal. The benchmark index was on pace to end a two-day slide, being up was much as 0.5% on optimism that a trade deal may still get done, but the recovery attempt faded in last 30 minutes of trading.
The Nasdaq Composite lost 0.3%, and the Russell 2000 lost 0.5%. The Dow Jones Industrial Average (unch) managed to finish unchanged.
President Trump pumped some optimism into the market after he tweeted that China's Vice Premier was coming to Washington to make a deal. Press Secretary Sarah Sanders later chimed in that the White House received an indication that China wants to make a deal. Both remarks sent stocks higher in a knee-jerk reaction despite both statements being nearly identical and neither giving the market any new information.
China had already confirmed it was planning on coming to the U.S. this week, and it wouldn't have done so if it didn't intend to work on a trade deal. The one new component, if true, is that Reuters indicated sources that China backtracked on nearly all aspects of a trade deal last week.
The report raises uncertainty about when, if it all, a deal might get done with the tariff rate on $200 billion of Chinese imports set to increase on Friday. Nevertheless, the stock market traded with modest, but broad-based, gains during the afternoon before fading into the close.
Most of the S&P 500 sectors finished little changed. The utilities (-1.4%) and communication services (-0.4%) sectors underperformed, while the health care (+0.1%) and real estate (+0.1%) sectors outperformed.
Shares of Lyft (LYFT 52.91, -6.43) dropped 10.8% after the company missed earnings estimates by a wide margin. The stock was also pressured by many ride-hailing drivers around the world turning off their apps Wednesday in protest for better pay, benefits, and worker protections.
U.S. Treasuries lost steam, sending yields higher, as equities gained traction during the day. The 2-yr yield increased two basis points to 2.30%, and the 10-yr yield increased three basis points to 2.48%. The U.S. Dollar Index held firm, finishing unchanged at 97.62. WTI crude rose 1.2% to $62.12/bbl following bullish inventory data out of the Energy Information Administration.
In economic data, the weekly MBA Mortgage Applications Index increased 2.7% following a 4.3% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the Producer Price Index for April, the Trade Balance report for March, and Wholesale Inventories for March on Thursday.
- Nasdaq Composite +19.7% YTD
- Russell 2000 +16.8% YTD
- S&P 500 +14.9% YTD
- Dow Jones Industrial Average +11.3% YTD