Danone Sets Mid-Term Targets, Unveils Details of Organizational Plan
November 23 2020 - 2:13AM
Dow Jones News
By Giulia Petroni
Danone SA on Monday set its mid-term operating margin and growth
targets as it laid out the details of its structural
reorganization, including workforce reduction plans.
The French food company said it now targets mid-term recurring
operating margin at mid-to-high teen levels. It also expects cost
savings of 1 billion euros ($1.19 billion) by 2023, part of which
will be reinvested in its growth plan and the rest to secure margin
expansion.
The company said it expects to return to profitable growth as
soon as the second half of 2021, and its recurring operating margin
to be at pre-Covid-19 levels--more than 15%--by 2022. It also
confirmed its expects to reach 3% to 5% profitable revenue growth
on a like-for-like basis in the mid term.
As previously announced, the company is reorganizing its
structure, moving from a category-led to a local organizational
model. These measures, which will be gradually implemented in 2021,
will also lead to reductions of around 1,500 to 2,000 positions in
local and global headquarters.
The total one-off costs related to organizational activities are
expected to be around EUR1.4 billion for the 2021-23 period.
Danone also confirmed its guidance for the full-year, saying it
targets a recurring operating margin at 14% and EUR1.8 billion in
free cash flow in spite of challenging market conditions in the
fourth quarter.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
November 23, 2020 01:58 ET (06:58 GMT)
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