This operation, which drew more than 4 billion euros of orders, a sign of investor confidence, should enable the food to extend the maturity profile of its debt while diversifying its sources of funding.
A financial strength reaffirmed
Even before this transaction, Danone had wished to reiterate at the beginning of November be perfectly in line to achieve the objectives of reducing debt and improving its credit ratios within the deadlines agreed with Moody's in November 2007.
The French group had at that time already confirmed to have sufficient sources of funding to repay 1.9 billion euros in cash and tickets to cover the potential exercise of options granted to minority shareholders amounting to 2.7 billion euros.
A Parisian analyst also believed that Danone was not confronted with the slightest risk of liquidity, especially since "the group could sell some non-strategic assets, such as Wahaha and Wimm Bill Dann, faster and reduce debt, according to the same expert.
Concerns about liquidity problems at least temporarily past, even with the acquisition of Numico, Danone must face a situation mast in the major industrialized countries but also the risk net retrenchment of activity in emerging countries .
A 2-digit growth in the current EPS in 2009
Danone has nevertheless reaffirmed its November 6 goals for the year 2008 at a meeting with investors in Paris, while showing however a relatively cautious for 2009.
"Despite the current turmoil besetting the world economies, we are fully confident in our ability to achieve our objectives for the year 2008", had said Emmanuel Faber, the deputy director general of Danone.
The group has set itself the target of revenue growth for comparable data between 8% and 10%, with activity expected in the fourth quarter increase between 5% and 6%.
Danone is also an increase of its current operating margin (EBIT) between 40 and 50 basis points in comparable data, and an increase in net current earnings per share of at least 15% (based on EPS pro forma 2.38 euros in 2007). ( Brands of the words )
Regarding the medium term, the food group has also confirmed its objectives of revenue growth for comparable data between 8% and 10% and an improvement in the current operating margin.
But there is a flat, Danone said anticipate growth "generally slowed" its markets in 2009, given the context of global economic slowdown. It aims for 2009 growth of sales in comparable data "a few points lower" to the goal of medium-term growth, which is 8% to 10%.
Behind these words, it should be noted that the turnover of the group Franck Riboud continue to grow. In addition, Danone table always on a continuum of its current operating margin (EBIT) growth and "two" of its current diluted earnings per share.
Strong brands
For these goals are achievable, however, should not be that the world economy from sinking dramatically and that the costs of raw materials such as milk, not soared again.
Danone still beyond the possibility of optimizing its purchases ... disposing of brands to focus on its high margin activities. In late October, Danone has indicated that its subsidiary Danone Asia signed an agreement with Suntory to sell its subsidiary Frucor in New Zealand and Australia for a total of over 600 million euros.
"This assignment is the result of the recent focus on natural mineral waters and drinks based water source. It will enable Danone to focus on growth opportunities in its strategic activities" the group said then.
But beyond any focus, Danone has strong brands. And even in China where the group remains entangled in the case of Wahaha, it should benefit from the acquisition of Numico (conducted in the summer of 2007). Local producers of baby milk had been discredited with the case of the poisoned milk. "
As such, Danone has a priori means to fulfill its objectives of results next year and confirm its status as defensive value. We recommend that Keep Danone portfolio.
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