Rabat - Despite the major consequences of the ongoing boycott, Centrale Danone was able to achieve its annual financial goals, owing to baby food sales in China.
Rabat – Despite the major consequences of the ongoing boycott, Centrale Danone was able to achieve its annual financial goals, owing to baby food sales in China.
Chief financial officer Cecile Cabanis announced the company’s achievements, saying that the company is “entering the second half with an operating model capable of offsetting these headwinds,” referring to Morocco’s boycott against high prices.
The company has also shared its future vision aiming for more progress to reinforce its sales growth and improve its recurring operating margin by 2020.
Chinese demand for baby food gave the company confidence. However, Morocco’s boycott costs the company an arm and a leg as it announced net loss of MAD 150 million in the first half of 2018. The company might have suffered more loss as the campaign is still ongoing.
The company has estimated that its sales in Morocco have declined by at least 40 percent in the second quarter of 2018.
In a press conference on July 27, Cabanis admitted that the “impact has been significant so far,” adding that the “unprecedented boycott” will have effects on Danone’s performance in the second half of 2018.
She added that the company has “adopted a cautious outlook for the remainder of the year” to mitigate the impacts of the boycott.
Cabanis also recalled the visit of the CEO of the company Emmanuel Faber to Morocco to personally address the major consequences of the boycott.
She added that the company is currently studying how to make relevant changes “in response to an environment where purchasing power is under pressure.”
“We are ready to provide greater transparency and engage in a client dialogue that we believe will be an important step towards restoring a normal situation,” she added.
The company said that its sales growth has increased by 24 percent (€ 1.2 billion) in the first half of 2018 internationally
Speaking about the company’s achievements, Faber said in a statement published on Friday that “this strong performance, achieved despite a volatile environment and unexpected adverse events in certain markets, reflects the strong fundamentals of our business and the maintenance of our financial discipline.”
He added that the performance “reflects a more balanced portfolio, based on more growth drivers.”
Since April, Centrale Danone released statements in an attempt to reconcile its consumers in Morocco. The boycott has also urged officials from the government to defend the company and called on Moroccan citizens to suspend the boycott.
CEO of Danone, however, reassured the government that the company will not leave Morocco as the country represents a very important market for the company.