CORPORATE NEWS
Traders’ BONUSES for 2009 and in excess of € 27.5K will be the subject of 50% tax, similarly to the City of London, as announced by Mrs Christine Lagarde, Finance Minister, pending Parliament‘s vote, planned for next January. President Nicolas SARKOZY and British PM Gordon BROWN wrote a joint statement, published in the Wall Street Journal, which heralds a global solution to regulate the financial sector’s risk and rewards
Climate talks failed to reach a milestone in Copenhagen where world leaders agreed on keeping down CO2 emissions without concrete action plans. The Carbon tax, voted by Parliament in September, and due to become effective in France from January 1st was rejected by the Conseil Constitutionel, or High Court, on the basis of tax inequality as major polluters among which transport, the chemical and petro-chemical industries, and nuclear plants remain exempt from paying the tax. The request for a review of the new law was submitted by the Socialist Party who claimed victory over Government. Prime Minister François FILLON announced that a new Carbon Tax white paper will be produced by January 20th
RER A train conductors, Paris busiest suburban train with 1 million train riders per day, ended the longest strike in the history of SNCF since 1995, a total 18 days, over demand for an extra €168 per train conductor per month. Total loss incurred by SNCF was evaluated by the group at € 5 million. Commuters were left stranded as trains ran exclusively at rush hours between 7:30 am to 9:30 am and from 4:30pm. Union representatives acknowledged that their demand was partially met as the extra remuneration, € 150 will solely be paid to train conductors based on a traffic regulation performance, a nearly impossible target to meet as passengers regularly disrupt trains scheduling by holding doors
SNCF monopoly officially ended with the opening of passenger rail transportation to competitors following Dec. 13 European Union Directive applicable throughout Europe. The new law allows for national companies, public and private, to operate in any 27 member state as long as trains make the junction between two member states. Trenitalia and VEOLIA will start operating trains between Rome, Milan, Paris and Genoa effective from next spring
Christian LACROIX high fashion House filed for bankruptcy protection. A total 100 employees are to be made redundant
EDF expected record electricity consumption, to top January 7th at 92 400 MW due to freezing temperatures, between -1C and -8C, brought about by cold winds originating from Siberia. Social services and Red Cross staff served hot meals at kitchen soup halts to help the homeless. Shelters were opened in several major cities. The city of Besançon experienced a record -17C, north east of France. RTE, the electricity transporter, cut power for two hours in the PACA region (provence Alpes Cote d’Azur) and 2 million people in Marseilles were left without electricity for a limited time, a drastic measure taken to avoid a total black-out
GOOGLE was condemned by the Paris Commercial Tribunal to pay € 300K in damages to La Martinière, book publisher, as book digitization undertaken by Google violated copyright laws and deprived the plaintiff from substantial revenues. The judicial decision, a landmark for many publishers in France stops Google short from further digitization of art works. The Group also faces € 10 000 per day fine for books previously digitized and that remain available for free on the web
Over 2500 EUROSTAR travelers were stranded in five TGV trains in the Eurotunnel for over 15 hours, en route to London from Paris due to technical failures brought about by unusually cold temperatures. At London St Pancras terminal, 24000 passengers awaited trains to depart to Paris for three days pending traffic regulation. Eurostar announced that the Group will reimburse 7500 train tickets and has offered an extra GBP 150 (€ 150) per passenger who experienced the over extended delay under the tunnel
Teams of ARIANE 5, the space shuttle, celebrated its 30th anniversary on Dec 24th Based in Kourou, French Guyana, Ariane 5 has accomplished several successful launches as integral part of Arianespace
The European Commission announced MICROSOFT commitments to offer European users of Windows operating system the choice among different web browsers, other than Internet Explorer, effective from mid-March 2010. In addition, computer manufacturers and users will have the possibility to turn IE off. The decision, adopted by the Commission, renders legally binding commitments offered by Microsoft to boost competition on the web browser market. From the agreed target date, there will be a Choice Screen icon on the PC's desktop. The Choice Screen will not uninstall Microsoft's web browser. Microsoft is also prohibited from circumventing free and effective browser choice by any contractual, technical or other means. Within six months, and then yearly, Microsoft will report to the Commission on its implementation of the commitments
AREVA made the decision to sell its Transmission and Distribution business, Areva T&D, to Alstom/Schneider, one of three bidders which included General Electric and Toshiba/INCJ. According to the Group, all three bids were relatively similar in terms of value, representing more than four times the price paid by AREVA for the business five years ago. The acquiring consortium offered € 2.29 billion in equity value, (i.e. € 4.09 billion in enterprise value). The bid does not include any requirement for a seller’s warranty but includes a buyer’s commitment to maintain all European sites for a 3-year period. To ensure that all AREVA T&D team members are integrated properly, Alstom/Schneider have also agreed to offer to all European employees a similar position in the same geographic area, at an equivalent qualification level and without loss of compensation or seniority. In addition, and unless the economic environment deteriorates significantly, the buyers made a commitment not to implement any lay-off program except for voluntary terminations
The Group missed a € 20 billion contract awarded to a South Korean competitor to build four nuclear plants in Abu Dhabi. EDF, TOTAL and GDF SUEZ were part of the French consortium led by AREVA
AIR FRANCE KLM passenger traffic declined - 3.2% in November in line with 2.9% capacity and passenger unit revenue stayed quasi stable at 78% down 0.2 points. Per region, passenger traffic in Europe fell -3.5 %, in the Americas -3.3%, and in Asia -3.1%. In the MEA region, passenger traffic decreased by 3% and equally in the West Indies- Indian Ocean regions. Cargo activities fell -14.7%
Group BOUYGUES net profit in the fist nine months of the year fell -15% to € 1.02 billion impacted by the construction and real estate activities as order books declined substantially. Net sales fell -3% to € 23.16 billion with operating profit -18% to € 1.46 billion. Per branch, Bouygues Construction order intake declined -23% to to €6.5 billion, excluding recent major contracts signed while order book fell -8% at end-September to €11.5 billion. Sales increased +2%. Bouygues Immobilier (real estate) posted positive sales +8%, a +15% increase for residential property but -2% for commercial property due o the current economic context. Residential housing reservations rose +32% to €1.26 billion at end-September 2009, unlike Commercial reservations, at very low levels. At Colas (cement branch), the Group reported a -10% decline in sales due to three major factors, the postponement in the implementation of stimulus plans in France and in the US, a highly unfavorable economic situation in Eastern Europe and falling asphalt prices. Sales at TF1 (television channel) dropped -13% over the first nine months of 2009. Bouygues Telecom recorded +5% sales in the first nine months due to strong performance from each the fixed-line and mobile telephony, and attracted 172 000 new mobile customers in third-quarter 2009, (9 000 in Q3/08)
Tough competition raged between PEUGEOT and RENAULT with the end of car fleet incentives due to be reduced to € 700 next year from the current €1000. Peugeot web store and Renault shop advertised their respective models’ latest bonuses of up to € 5600 to December 31st
Total STATE AID approved for FRANCE by the European Commission to overcome the financial crisis and safeguard financial stability in 2008 and up to 11.11.2009 amounted to € 345.95 million or 0.85% of GDP with share of the banking sector accounting for 4.7% of total aid received according to the European Commission’s latest State Aid Scoreboard. In Germany, total aid stood at € 589.13 or 2.05% of GDP and 3.6% share of the aid to the banking sector. Ireland and Luxembourg claimed each the highest share of state aid for the banking sector respectively 10.9% and 29.1% while impact on GDP rated the highest of all EU 27 member states on Ireland or 19.16%. The EUROPEAN UNION’s overall aid granted to the region’s 27 member states rose to € 279.6 billion or 2.2% of GDP in 2008 from € 66.5 billion or 0.52% in 2007. Excluding crisis measures, total aid amounted to € 67.4 billion or 0.54% of GDP in 2008. The Scoreboard also includes in the recovery of illegal and incompatible aid, at the end of June 2009, € 9.4 billion. A total 9% of unlawful aid is still outstanding, as 91% of the total amount of illegal and incompatible aid was effectively repaid by beneficiaries
ALSTOM was awarded a supply contract of approximately €700 million by the Slovenian state-owned utility, Termoelektrarna Šoštanj d.o.o., for the construction of a 600 MW coal-fired steam power plant at Šoštanj in northeast Slovenia. The new plant, which is planned to be operational by the end of 2014, will be the country’s first power plant with supercritical steam parameters, allowing it to achieve the highest possible efficiency using local fuel. It will double Termoelektrarna Šoštanj d.o.o’s generation portfolio and generate approximately one third of Slovenia’s power production. It will allow the country to reduce its dependency on energy imports. The unit will be added to the existing Šoštanj power plant. Alstom will install a STF60 steam turbine, a TOPGAS generator, the water-steam cycle, the boiler and the ALSPA distributed control system to the new unit 6. Alstom Power has already carried out work on the Šoštanj power plant, modernizing the boiler for Unit 5 to reduce emissions in order to meet environmental requirements. The Group has also previously installed two 114 MW gas turbines in Slovenia (228 MW in total) as well as several steam turbines both for electricity production and district heating, and is executing service contracts in the country
AIR LIQUIDE was selected to supply two new hydrogen filling stations in Korea, destined to power fuel cell energy vehicles and planned for delivery in 2010 for the South-Korean government's national plan to promote the development of hydrogen energy. The new hydrogen filling stations, designed, developed and patented by the Group's Advanced Technologies teams, enable vehicles to fill up in less than 5 minutes in the same conditions as traditional fuels, for a driving range that can reach up to 500 kilometers for some vehicles. The first station, to be delivered in the first quarter of 2010 will supply hydrogen at a pressure of 350 bars
for the government project led by the automobile manufacturer Hyundai Motors. It will be installed on Jeju island within the Korea Institute of Energy Research (KIER), a research and development institute for renewable energy and, one of the beneficiaries of the South Korean’s government demonstration project. The second station will be used to fuel a bus at a pressure of 350 bars and various cars at pressures of 350 and 700 bars. It will be delivered to the Korea Automobile Testing & Research Institute (KATRI) in the second quarter of 2010 and will include dual pressure technology developed by Air Liquide for different types of fuel cell vehicles. The station will be installed close to the KATRI Gyeonggi-do race track, used for testing and research to improve vehicle safety. Over the last four years, Air Liquide has designed, built and commissioned a growing number of hydrogen filling stations, 46 of which have been installed throughout the world to date. In Canada, the Vancouver and Montreal airports will install these stations to supply part of their fleet of commercial vehicles. Another station will supply the largest fleet of hydrogen buses in the world - 20 vehicles - which will be deployed during the next Vancouver Winter Olympics
GOLD reached a new record high at USD 1216/once due to accrued demand in compensation of the USD constant depreciation, from emerging markets central banks to diversify their own reserves and China’s recent purchase from the IFM
IN THE NEWS
President Nicolas SARKOZY unveiled € 35 billion debt issuance and an additional € 30 billion to be issued by public-private companies or a total € 60 billion investment to modernize specific sectors. Five priorities were set by the President and include financing of € 19 billion destined to universities and R&D, the biggest share of the plan. Bio and nano technologies along with DSL, health, and sustainable development make part of the plan. The President declared at the Elysee Palace press conference that the plan aims at making French universities « campus of excellence » to match with the best universities worldwide. A total 10 universities will be « rigorously selected » to benefit from the plan. Patenting, was also underlined by the President as one of France’s R&D weaknesses, with a lesser number of patents compared with other developed countries. « Our country has neglected higher education for too long« , he said, « in 2006, France invested twice as less as the US in that sector and France’s expenses in higher education expressed in percentage of GDP between 1995 and 2006 declined.» With € 13 billion paid back by banks for state aid following the global financial crisis, the debt issuance will amount to € 22 billion. Opposition leaders criticized the plan which they dubbed « tomorrow’s taxes » as France’s current debt already accounts for 74% of GDP and has been projected by the IMF to reach 94% by 2011
Bank secrecy between France and Switzerland is likely to remain alive and well as Switzerland rejected the Memorandum of Understanding signed last month in retaliation against a list of HSBC clients stolen by a former employee and transmitted to the French Ministry of Budget. The stolen file will allow for a possible repatriation of funds to France, allegedly hidden to evade taxes. The news created furor in Switzerland
Current LEVELS of emergency oil stocks in Europe stand at 122 days of consumption, well above the mandatory 90 days set in the Energy Directive adopted by member states in September , according to the European Commission‘s Oil Supply Group meeting with member states. According to the Commission, Member States reported having sufficient stocks at their disposal to assure the uninterrupted operation of their refining and distribution systems, even in case of a lasting supply disruption. Freezing temperatures have been engulfing Europe due to cold winds originating from Siberia. The new directive, is to be transposed into Member States' national laws by 31 December 2012. Member states will be responsible for producing monthly statistical summary reporting on commercial stocks held within their national territories. Emergency stocks will be the subject of special monitoring. The data will be published monthly by the Commission
Entry into force of the LISBON TREATY became effective Dec.1, and provides the European Union with a permanent President of the European Council and a High Representative for Foreign Affairs and Security Policy. The Treaty’s main features include « national security which remains the sole responsibility of each member state ». Citizens of the European Union, can, when they total at least 1 million, submit an appropriate proposal on questions for which they deem that a judicial act by the Union is necessary. The Treaty also reiterates the Union’s foreign common policy
