The Wall Street Journal-20080215-Danone-s Net Triples- Finance Chief Resigns
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Danone's Net Triples; Finance Chief Resigns
Full Text (454 words)PARIS -- Groupe Danone SA's full-year net profit tripled, with the gain mainly from the sale of the company's cookies unit.
The Paris-based maker of Activia yogurt and Evian bottled water said revenue this year would get a lift from the integration of Dutch baby- food maker Numico NV, which Danone acquired for 12.3 billion euros ($17.9 billion) in October.
Danone also said Antoine Giscard d'Estaing, its chief financial officer, resigned "to pursue other professional opportunities." He will be succeeded by Pierre-Andre Terisse, finance chief of Spanish tobacco company Altadis SA, who will join Danone March 1.
"Losing a CFO is never a good sign, especially just six months after the huge transformational deal in acquiring Numico," said Sanford Bernstein analyst Andrew Wood.
Danone fell 3.6% to 52.10 euros in Paris. The stock has declined 12% this year amid fears that a global economic slowdown and higher raw- material prices could dent revenue and earnings.
Net profit rose to 4.18 billion euros last year from 1.35 billion euros in 2006, boosted by a 3.1 billion euro gain from the sale of the cookies division to U.S.-based Kraft Foods Inc. Stripping out the gain and financing costs linked to the Numico deal, net profit would have been roughly flat at 1.19 billion euros. Danone sold the cookie unit as part of an effort to focus on health foods, letting go of such famous European brands as LU and Petit Dejeuner.
Revenue rose to 12.77 billion euros from 12.07 billion euros, boosted by 12% sales growth in the fresh-dairy division, which makes yogurt. Chief Executive Franck Riboud said it was the unit's strongest growth ever.
Danone didn't break out separate fourth-quarter figures.
"We would summarize the reporting as being good, driven by better- than-expected fourth-quarter performance and strong guidance for 2008," said Sanford Bernstein's Mr. Wood.
Danone predicts organic sales growth -- which strips out the impact of acquisitions and currency movements -- of 8% to 10% for this year, up from an earlier forecast of 6% to 8%.
The water division's revenue growth of 4% for the full year "is not fully representative of the performance of the underlying business," Danone said . It said the third quarter was hit by poor weather in Western Europe, and that its dispute with Hangzhou Wahaha Group Co. of China dragged on the full year's results. Danone battled last year with its Chinese joint-venture partner, accusing its founder, Zong Qinghou, of developing a separate business competing directly with the Wahaha-Danone business. Danone said it deconsolidated its Wahaha joint-venture business as of July. Lawsuits and arbitration were temporarily suspended in December after the partners decided to seek a solution. China is Danone's No. 3 market, after France and Spain.
