Danone names new CEO as Riboud prepares for succession

Tue Sep 2, 2014 3:47pm EDT
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By Dominique Vidalon

PARIS (Reuters) - Danone (DANO.PA: Quote) said on Tuesday that Chairman and Chief Executive Franck Riboud would split his role after 18 years at the helm of the world's largest yoghurt maker, which is grappling with a series of setbacks in Asia and in Europe.

Riboud, 58, who took over from his late father, Antoine Riboud, in 1996, will remain as chairman and focus on the group's long-term strategy while Emmanuel Faber, 50, the chief operating officer, will become CEO, effective Oct. 1.

The change comes as Danone faces falling earnings due to weak baby food sales in Asia as a result of a health scare and sluggish dairy sales in Europe due to slow consumption and a spike in milk prices.

The group's lackluster performance notably attracted criticism from U.S. activist investor Nelson Peltz, who suggested in 2012 that Danone, whose products include Evian water and Activia yoghurt, could benefit from a leaner cost structure.

Danone's woes recently refocused investor attention on whether the group, which competes with the much larger Nestle NESN.VX and Unilever (ULVR.L: Quote), can survive on its own.

In July, Danone, which has annual revenue of 21 billion euros and a market value of 34 billion euros, said it was working on a plan to ensure long-term growth but denied the project was a strategic review, involving any major deals.

The change reflected Riboud's "desire to concentrate on the key strategic issues facing Danone in the medium and long term and to lay the groundwork for a smooth succession," the company said in a statement.

Natixis analyst Pierre Tegner said the move would "help improve operational execution" and reflected "the great lucidity, pragmatism and above all courage of Franck Riboud."   Continued...

Franck Riboud, Chairman and Chief Executive Officer of French food group Danone, poses for the media before the company's 2013 annual results presentation in Paris February 20, 2014.   REUTERS/Benoit Tessier