CORPORATE NEWS
The ANTI TRUST Agency (Conseil de la Concurrence) imposed € 94.4 million fine to three major temporary work agencies, ADECCO, MANPOWER and VEDIORBIS, for illegal activities carried out between March 2003 and November 2004, in an agreement over price fixing and information sharing covering between 70% of the French market and 90% of major clients such as Eiffage, La Poste, Alstom, EDF, Servair, les Galeries Lafayette or Alcan. The temporary work agencies did not contest the charges and agreed to set up measures and tools aiming at preventing further market disruption. They had been condemned in 1997 over an illegal agreement to limit salary increases in the construction sector in Isère and in Savoie during the installation of the Albertville Olympic Games. The Agency also imposed € 5 million fine to SNCF for unfair practices following a complaint by Karavel-Promovacances, Lastminute and Switch concerning train tickets reservations over the Internet.Travel agencies who wanted to sell train tickets over the web, with the exception of voyages-sncf.com, the group’s own subsidiary, were barred from using SNCF reservation systems unless they paid, at a high cost, a software license to directly access the group’s reservation systems. Following substantial commitments from SNCF, in the future, E-agencies will benefit from all SNCF Internet promotional offers and web users will be allowed to print train tickets from their homes
President Nicolas SARKOZY proposed social measures to face the financial crisis which were deemed unsatisfactory by union leaders. The President also declared that company business tax (Taxe Professionnelle ) will be cut in 2010
The COST of days not worked since the financial crisis begun, € 50.5 million, more than tripled compared with € 16.6 million in 2005, according to the Secretary of State for the Labor Market
Industrial investments are expected to drop -12% in 2009 according to the National Office of Statistics; Unedic, the government body in charge of unemployment allowances, projects an additional 282 000 jobless this year. In 2008, FRANCE counted a total 2 114 300MN unemployed. In addition, white collar job offers are forecast to plunge -20% in 2009 according to Apec, the national unemployment agency for white collars and managers
Temporary JOBS dived -22.2% in Q4/08 year on year according to Insee figures. Employment in the industrial sector, excluding construction, fell -2.2% on the same period while the services sector’s work force decreased by 0.5%
Company bankruptcies, 50 000 last year, are not expected to decline but the ordinance for safeguard procedures, passed on December 18th, should allow to prevent massive liquidation rate increases. With the new law, company owners will be allowed to remain on board to work on financial conditions applicable to creditors and tribunals will be able to freeze debts for six months rather than declare immediate bankruptcy
AIR FANCE - KLM expects passenger traffic to decrease by 2% and cargo by 15% this year
ALCATEL LUCENT is to axe 200 white collar jobs and 400 subcontractors agreements will not be renewed; Group 3 SUISSES, sales on catalogues, plans to cut 674 jobs according to unions
PERNOD-RICARD posted net results up +15% to € 685 million for July to December period year on year. Sales of Martell cognac jumped +21%, Havana Club rhum +11% Mum Champaign +8% Chivas Whisky +6% and Ballantine’s +5%
CATERPILLAR announced that 733 jobs will be axed in Grenoble and Echirolles as order books declined -55% between 2008 and 2009 forecast. Staff in Grenoble have been impacted by days not worked
Government announced that five year state loans of € 6 billion at 6% interest rate will be borrowed by PEUGEOT and RENAULT: each car manufacturer has committed to renounce delocalizations and dividends to share holders will be limited. In addition, top executives will forsake bonuses which were unlikely due to the collapse of the car market. PEUGEOT and RENAULT issued separate statements in which they welcomed state aid to face the current financial crisis, and, announced their respective commitment to avoid implementing restructuring plans in 2009
PSA PEUGEOT CITROEN posted net loss of €343 million (from €58,676 million in 2007) for the year 2008. Sales and revenues fell - 7.4% to €54.356 million with global sales declining -4.9% to 3,260,388 units although market share remained at 5% worldwide, 13.8% in Western Europe and leadership in Light Commercial Vehicles, with 19.9% of the European market. The Group reduced its worldwide production by 26% , more significantly than the sector average, in the fourth quarter compared with the same period in 2007. New restructuring plans in both the Automobile Division and at Faurecia totaled €512 million, and €405 million in the Automobile Division and in Faurecia’s vehicle interior business. The Group expects Western European automotive markets to experience a further decline of around 20% in 2009 followed by stability in 2010, but intends to maintain investment and expenditure on automotive R&D at around € 3.5 billion. The Group plans 11 000 staff cut globally, between 6000 to 7000 in France through buy out packages, by the end of this year
RENAULT announced that it expects market conditions to worsen this year. Investments for vehicle projects have been put on hold at Chennai (India) and postponed at Tangiers (Morocco). Total investments in 2009 will be at least 20% lower than in 2008. In addition, the workforce adjustment plan, the Renault Voluntary Plan for Renault s.a.s, is proceeding in line with expectations. Some 1 700 employees have already officialized their departure from Renault s.a.s. and another 5 300 have applied to leave. A reduction of 1100 jobs will be achieved at the European subsidiaries, mainly through natural attrition. There will be no dividends to shareholders. In the medium/long term, Renault is transforming itself to adjust to the new automotive era. Strategic projects have already been launched to address new needs in individual mobility, such as the Entry range and electric vehicles
An increasing number of banks expect to leave unchanged their lending criteria as applied to the approval of loans or credit lines to SME’s in Q1/09 ( 57% vs. 41% ) and large enterprises (50% vs. 31%) compared with the previous quarter, according to the European Central Bank (ECB) Euro area bank lending February survey. Demands for loans are expected to decrease equally from small and large companies. Over the past three months and according to the survey results, the credit squeeze on short and long term loans worsened due to the increasing number of banks toughening up borrowing conditions for each loan category, respectively to 47% (from 44%) and to 57% (from 50%). Three factors regrouping banks‘ perception of risk, -- collateral demanded, expectations regarding general economic activities and industry or firm-specific outlook - - - influenced them the most into their overall lending policies. On the same period, net demand for loans by enterprises dived -40% (-26% in Q3) for fixed investment -60% (-36% in Q3) and for M&A activities and corporate restructuring -44% (-32%)
AREVA signed with EDF a record contract, over € 5 billion, for a long term uranium enrichment and will supply the future Georges Besse II centrifugation enrichment plant, EDF’s long-term enrichment services. GBII, which is located on the Tricastin site in the south of France, has been under construction since September 2006, at an estimated € 3 billion, one of France’s biggest industrial investments in the last decade. AREVA and EDF’s strategic enrichment partnership dates back to 1975, their first ever signed agreement. Since it first started supplying EDF with enriched uranium in 1979, AREVA has helped the utility meet a significant portion of its needs. In addition, AREVA and Nuclear Power Corporation of India Limited (NPCIL) signed a Memorandum of Understanding (MoU) to build at least 2 EPR™ reactors at Jaitapur in Maharashtra State in a future partnership in nuclear power generation. The officially signed contract, in wake of the bilateral agreement signed between India and France on 30th September, 2008 to work jointly for the development of peaceful use of nuclear energy, will allow for technical co-operation between NPCIL and AREVA on the setting up of two to six AREVA-built EPR™ reactors on NPCIL’s Jaitapur site, including life time fuel supply for these units. India is one of the fastest developing economies and requires huge addition in power generation to meet the ever growing demand for it. By 2030, the country's installed nuclear capacity could grow to 63 GWe according to Areva. NPCIL already runs 17 units with a total installed capacity of 4 120 MWe and is building 5 units with a total installed capacity of 2,660 Mwe
ACCOR SERVICES and MASTERCARD EUROPE announced the creation of a new company, PrePay Solutions through a joint venture. PrePay Solutions markets prepaid card-based solutions aimed at corporations, public sector and financial corporations. Each firm will develop through the new company solutions for its respective clients: corporate and government clients for Accor Services, banks and other financial institutions for MasterCard. At the same time, PrePay Solutions will market prepaid solutions direct to its own customers such as retailers
EADS announced that the U.S. Army awarded EADS North America a contract for five additional UH-72A Lakota Light Utility Helicopters (LUH) last month bringing the total number of aircraft on contract to 128
TOTAL reported record revenues for the fiscal year 2008 to € 13.9 billion or +14% year on year. In the short/medium term, the Group plans to increase R&D investments and hiring worldwide
Four sectors have been affected the most in the European Union by announced job losses in January due to the economic downturn: metal and machinery, motor industry, financial services, transport and storage reported a net loss of more than 100 000 jobs in the four months from October 2008 to January 2009 according to the Monthly monitoring report on EU employment and social situation
GDP is expected to fall -0.6% in Q1/09 according to Banque de France forecast. According to the projection, France has entered into recession by recording two successive quarters of negative growth. The EUROPEAN COMMISSION showed skepticism as to FRANCE’s capacity to reduce its budget deficit, estimated at 3.2% in 2008 as « risks are linked in particular to the markedly favourable macroeconomic assumptions and the current uncertain environment, but they also reflect the high deficits recorded when economic conditions were more favorable». France’s deficit is set to increase to 4.4% in 2009, before falling to below 3% in 2011 as per new projections. The reduction programme foresees a consolidation of public finances through a restrictive stance, especially in 2010. The 3% target is set by the Stability and Convergence Programmes applicable to all EU 27 member states. Ireland, Greece, Spain, Latvia and Malta also reported large economic imbalances and were officially requested by the Commission, along with France, to reduce their deficits
GDP fell -1.5% in each the Euro area and the EU27 in Q4/08 (-0.2%in Q3 in each area) according to a Eurostat flash estimate. Year on year to Q4, growth declined -1.2% in the Euro area and -1.1% in the EU 27. Over the whole year 2008, GDP rose +0.7% in the Euro area and + 0.9% in the EU27. In the US, GDP decreased by 1.0% in Q4/08 ( -0.1% in the third quarter) and year on year to Q4 by 0.2%
Unemployment figures worsened in December as an estimated 45 800 jobless registered at national Job Centers according to the Minister of Finance taking 2008 to the strongest increase of unemployed in the last 15 years, + 215 000 jobless. In 2008, FRANCE counted a total 2 114 300MN unemployed. In the Euro area, unemployment rose to 8% in December 2008, the highest in two years according to Eurostat. The Euro area counted an estimated 12 472 million jobless and in the EU 27 17 911 million are seeking work. This month, Unedic, the government body in charge of unemployment allowances, projects an additional 282 000 jobless. In addition, white collar job offers are forecast to plunge -20% in 2009 according to Apec, the national unemployment agency for white collars and managers
The TRADE GAP deteriorated and reached a record € 55.7 billion in 2008 (€41.7bn in 2007) due to the energy bill according to figures released by Customs
Producer prices fell -1.9% in December, the hardest drop since 1999 according to Insee, due to energy products, intermediate goods and the food and agriculture products. In the Euro area, prices decreased by 1.3% and in the EU 27 by 1.4% based on figures released by Eurostat
Government announced that the € 26 bn Recovery Plan will involve « 1000 projects » to boost the economy. Projects range from landmark preservations (€ 620 million) to energy, thermal upgrading and industrial de-pollution (€ 220million) cathedral renovations and museum constructions ( € 100million) prisons renovations (€ 80million) and constructions for low income housing (€1.1 billion). Public works will benefit from € 870 million for railways, roads and highways renewals, and, € 85million will be dedicated to improve tunnels safety standards. A total € 170million will be dedicated to upgrade and build in land waterways and piers, € 25 million to projects pertaining to DSL, and € 30mn for farms energy efficiency via the National Fund for Regional Development. The opposition deemed the plan unsatisfactory
A total €1 billion state loans and subsidies will be granted to the south west to rescue the wood sector following the destruction of over 300 000 hectares of pine trees in the Landes forest caused by storm Klaus last month; a wind storm struck the west coast of France and left over 500 000 homes without electricity the day after the storm according to ERDF. Airports had been shut down in anticipation and over 200 flights were cancelled or delayed due to strong winds but quickly resumed
New PASSENGER CAR registrations fell -3.8% in January year on year according to CCFA to a total 149 385 units sold. Registrations of Light Vehicles declined - 6.6% on the same period to 178 105 units and Light Utility Vehicles by a more drastic -19.9%. The hardest fall, -28,4%, was recorded by Industrial Vehicles, over 5 tons, to 4 328 units sold
Industrial output in the Euro area in December declined -2.6% compared with the previous month, and plummeted -12% in one year , according to Eurostat figures. On the same period in the EU 27, output fell -2.3% and -11.5% In December and in the Euro area, intermediate goods production recorded the strongest output gap -5.7%, (-20.3% in one year) capital goods decreased by 2.5% (-11.7%) durable consumer goods by 2.8% (-14.5%) Non durable Consumer goods output dipped -0.9% (-3.9%) and energy rose +1% (-3.3% in one year). Year on year to December, massive production gaps were observed in Estonia -20.7% Sweden -18.4% Finland -15.6% Slovakia -16.7% Slovenia and Romania each -17.5% France’s major trade partners recorded strong gaps as well: in Spain -19.6% in Germany -12.3% in Italy -14.3% and in the UK -8.8%
EUROPEAN UNION EXPORT licenses of wheat reached a record 11.8 Mt (3.3 Mt last year and 6 Mt two years ago) and corn, a historical high 1Mt, according to figures released by Onic, France’s national office of cereals and grains. Output of French wheat is expected to decrease to 37.2 Mt while harvesting is projected at 33 Mt (in excess of 5.7 Mt compared with the previous year) but stocks remain high due to market contractions in France and in the EU: local consumption of wheat is expected under 15.4Mt and exports to the EU under 6.8 Mt. However, prices remain on an upward trend due to deteriorating harvesting in Argentina, unusually cold weather in Europe and the US, and the reduction of acres cultivated. French Channel wheat 1 stood at $/t 200.08 in mid December
The Czech Republic announced that the EU 27 summit to discuss the financial crisis and prevent protectionism will be held on March 1st . France was criticized by some member states within the European Union following President Nicolas SARKOZY €6 billion automobile industry bail out plan which includes car manufacturers’ commitment to avoid delocalization. The European Commission has officially requested FRANCE to explain the €6 billion automobile industry bail out plan so as to ensure that free movement of people and goods is not infringed upon
The European Commission has taken action against FRANCE for failing to implement into national law certain Directives regarding transparency obligations of listed companies. A reasoned opinion, the second stage of the infringement procedure laid down in Article 226 of the EC Treaty, will be sent to France for missing the transposition deadline, 8 March 2008. The Directive aims at raising the quality of information available to investors on companies’ performance and financial position as well as on changes in major shareholdings. If there is no satisfactory reply within two months, the Commission may refer the matter to the European Court of Justice
RETAIL sales stayed flat in December in each the Euro area and the EU 27 compared with the previous month. Figures were unavailable for France. The hardest declines were recorded in Slovenia -9%, Portugal -6.9% Estonia -3.2% and Poland -1.5% In Germany retail sales fell -0.2% and in Spain -0.3%. Luxembourg and Slovakia posted the only positive figures out of the EU 27 respectively +4% and +1.3% In one year, sales fell -0.8% in the EU 27 and -1.6% in the Euro area. Only four member states recorded retail sales growth out of all member states for which figures were released: sales in Belgium rose +1.8% in Poland +4.6% in Slovakia +3.2% and in the UK +1.8% while the hardest falls involved Denmark -9% Estonia -13.2% Spain -5.9% Latvia -16.9% Lithuania -8.9% Luxembourg -5.9% Portugal -6.3% and Slovenia -5.3%
The European Investment Bank (EIB) approved a € 200 million loan, out of a total € 400million investment, to finance the Poitou-Charentes Region photovoltaic program for the production, by 2012, of 73 Gwh of solar energy. Poitou Charentes is presided by Ségolène ROYAL. Photovoltaic panels will be installed on public, industrial and commercial buildings and solar farms. The program, which was adopted by the region in January of last year, will create 1000 jobs and will foster the decentralised production of renewable energy, strengthen regional energy independence, and boost players in the photovoltaic sector. The Poitou-Charentes Region will guarantee the loans
The European Commission’s Ombudsman has urged the European Commission to set up a comprehensive register of the documents it produces or receives. This follows a complaint from the British NGO, Statewatch, about the Commission's failure to register the vast majority of its documents. According to the Commission, the establishment of a comprehensive register is impossible at this point in time, but planned for 2010, mainly because of the use of incompatible registers in its different departments. The Ombudsman was unconvinced. He considered the Commission's failure to comply with the legal obligation to establish such a register to constitute maladministration
