Danone to replace bulk of board after investor onslaught

Danone said Thursday it would replace almost its entire board months after activist investors forced the ousting of the French food and beverage giant’s chief executive.

Among the casualties is former chief executive Franck Riboud, who is the son of Danone’s founder, and whose successor Emmanuel Faber was summarily dismissed in March under pressure from rebelling shareholders.

“The renewal will be completed by the general shareholders meeting of the spring of 2023,” the group said in a statement published alongside half-year results.

Only the recently-appointed chairman of the board Gilles Schnepp and two staff representatives on the 12-person body would remain, it said.

Danone, best-known for its eponymous yoghurts, also owns global water brands Evian and Volvic.

It has split its business into four divisions: dairy and plant-based products, waters, early life nutrition and medical nutrition.

Faber, who was ousted in March over complaints that his focus on social responsibility was holding back the company’s profitability, has been replaced by Antoine de Saint-Affrique, who joins in September from Swiss chocolate group Barry Callebaut.

Saint-Affrique has spent the bulk of his career at the food and consumer goods conglomerate Unilever, heading up its food division from 2011 to 2015.

Faber’s dismissal followed months of complaints from foreign shareholders about Danone’s underperforming share price.

US fund Artisan Partners and London-based Bluebell Capital were among shareholder rebels building up stakes in Danone as ammunition to force change.

During Faber’s reign at Danone, which is one of the world’s biggest food companies, it added a mission statement to its statutes combining profitability with social responsibility and environmental targets.

“We want finance to serve the economy, and the economy to serve the people,” Faber once said, a philosophy that one analyst said “certainly irritated financial markets a bit”.

The hedge funds also took aim at former finance director Cecile Cabanis, who will now also leave the board, having only recently been appointed as its vice president.

Danone’s second-quarter financial performance, also reported Thursday, meanwhile exceeded analysts’ expectations.

Sales rose 3.6 percent to close to €6.2 billion (£$5.28bn) and net profit by 5.2 percent to €1.07bn.

But spiking commodities prices weighed on the company’s profit margin from ordinary operations, which contracted to 13.1 percent from 14 a year earlier.