Groupe DANONE to incur a one-time charge of approximately 600M euros on its US and European HOD partnerships
The one-time charge consists of an impairment of its holding in DS Waters and a provision for its related commitment to Suntory.
28/01/05 Following a meeting of its Audit Committee, Groupe DANONE has announced that it would incur a charge of approximately 450 million euros in its 2004 consolidated accounts in relation to its holding in DS Waters, LLP, the US Home and Office Delivery bottled water activities (HOD) joint venture that it formed with Suntory Limited in late 2003.
This one-time charge consists of an impairment of its holding in DS Waters and a provision for its related commitment to Suntory.
Among factors leading to this impairment decision on its DS Waters holding, Danone cited slower volume growth patterns for the HOD industry, an increasingly aggressive pricing environment on HOD formats and faster than expected erosion of cooler rental revenues.
These negative factors have thus far more than offset the cost synergies generated by the combination of Danone and Suntory`s HOD businesses.
Danone has extended its review of HOD activities to Europe, and as a result, Danone will incur in 2004 an impairment of approximately 150 million euros in relation to Danone Springs of Eden BV, its joint venture with Eden Springs Ltd on the European HOD market.
