La Vie Est Belle

3. Cost Structure (Is the General & Admin (G&A) costs excessive?)

- Is their primary Manufacturing/Assembly a high-labour cost country?

- Is the majority of the Supply Chain in a high cost area?

Cost Structure

According to the registration document of Danone for 2012, the company has five leadings plants located in Mexico, Argentina, Brazil, United States, and Saudi Arabia for the Fresh Dairy Products Division. These five plants represent 28% of the division’s production.

The Labor cost is 93.90 in Mexico, 140.32 in Brazil, and 102.83 in the United States (values are expressed in index points).

Organizational Structure of Danone

According to the registration document (Annual Financial Report) of Danone for 2012, the Boards of Director has 14 members that are appointed by the shareholders

There are a Social Responsibility Committee, a Nomination and Compensation Committee, an Audit Committee, and an Executive Committee.

The Division of Fresh Dairy Products represents 36% of the workforce in, for a total of 102 401 employees as of December 31, 2012.

At this date, Danone has 252 companies, of which 231 are fully consolidated and 21 are associates. For the Fresh Dairy Products Division, we count 69 fully consolidated companies. The Top 20 of these companies represents more than three-fourth of the sales of this division. 5 companies out of the top 10 of the companies under the equity method are from the Fresh Dairy Products Division. Danone’s control ranges from 20% to 50%.

...