CORPORATE NEWS
The Euro area’s unemployment rate hit the highest mark 10%, since August 1998, according to Eurostat latest figures leading to 15.712 million jobless in November 2009. Of the EU 27, Eurostat estimates that 22.899 million people are seeking work , an additional 185 000 unemployed against the previous month, and 102 000 new job seekers in the Euro area. All member states recorded an increase of unemployed: the rate of male unemployment in the Euro area rose 2.4 points to 9.9%, faster than female’s 1.4 points to 10% from 8.6%. Per age group, the under 25 jobless rate deteriorated and rose to 21% (16.6% in November 2008), with Spain recording the highest rate 43.8%. France’s youth unemployment rate stood at 25.5%
PSA PEUGEOT has recalled 97 000 vehicles, Peugeot 107 and Citroen C1, following potential accelerators pedals defect detected on Toyota cars made in in the same plant in the Czech Republic. The Group announced that the « precautionary recall » concerns less than 10% of Peugeot 107s and Citroën C1s in circulation in Europe. Customers concerned with the faulty accelerator pedal will receive written notifications
Henri Proglio, recently appointed CEO of EDF, the public national electricity company, has forsaken € 450K yearly stipend as Veolia’s non executive President administrator, a private utilities company where he held tenure for 33 years and directed, following controversy over his two salaries, over € 2 million (including Veolia’s remuneration), astronomical by public remunerations standard. Frowned upon by the private sector, the EDF eye-brow raising appointment, Mr. Proglio has no experience in the electricity and nuclear sector, included a green light to keep Veolia‘s administrator’s post. Dubbed «French governance» by several astonished CAC 40 investors due to a potential conflict of interest, the Proglio controversy saw several members of government brush aside mounting criticism. Mrs Christine Lagarde, finance minister and Mr. Eric Woerth, budget minister, justified the Veolia post as « temporary» a week after contradictory statements and daily headlines. It also became known that Mr. Proglio holds five to six other non-executive administrators jobs at major private companies and for some listed on the stock exchange. President Nicolas SARKOZY justified Mr. Proglio’s salary «the best industrialist in the entire country» during a televised interview
AREVA was awarded three contracts with total value of € 260 million in the bio-energy sector in Brazil and Thailand. In Brazil, and via the Group’s subsidiary, Koblitz, AREVA signed a contract with Brazilian industrial Group Bertin, specialized in the bio ethanol industry, for the construction of 11 turnkey biomass plants which is scheduled to last four years. The wood-fired units will use dedicated eucalyptus plantations and will have a total output capacity of 380 MWe. The Group will also undertake, in a second contract, to retrofit the power generation unit in the Seresta sugar mill located in Alagoas state, north-east of Brazil. The upgraded unit will generate 50 MWe of electricity, which will be sold on the local grid providing a new source of income for its client. In north-east Thailand, AREVA will build two turnkey 10 MWe biomass plants fuelled by rice husks following the new contract awarded to the Group by Thai utility, Buasommai Electricity Generating Co. Two units were previously built by AREVA in Thailand in 2009 and are fully operational
ALSTOM reported 6% sales increase for the first nine months year-on-year to € 14.4 billion but order books plunged -47% to € 11.4 billion. Orders received at Alstom Power fell -48% to € 7.4 billion, as a direct result of the economic downturn affecting clients demand and future investments for new equipment. Sales rose however +7% to € 10.1 billion. Orders for the third quarter of the fiscal year 2009/2010 amounted to € 2.7 billion following two large coal contracts in Germany and in Slovenia with Thermal Systems & Products, two GT13 gas turbines in the Middle East, and a control system in South Africa. The Thermal Systems & Products Division sales for the first nine months year-on-year rose +12% to € 5.6 billion, orders received decreased by 55% due to lower order intake. The Transport Division orders at €4 billion fell -47%, also due to fewer orders. Order intake in the third quarter totaled €1.6 billion, with main contracts booked for regional trains and tramways in France. The Group’s total backlog reached €44 billion at 31 December 2009, representing approximately 27 months of sales
EUROCOPTER announced stable deliveries in 2009 with 558 new civil and military helicopters delivered and a consolidated turnover of € 4.6 billion spread between serial helicopters, 55%, support and services, 35%, and development and other activities,10% . Export share stood at 65% with 35% percent achieved in the company’s domestic markets. The drop in commercial unit sales was over-compensated by governmental orders, leading to the second-best result of order intakes in Eurocopter’s history. A net total of 344 new aircrafts, including 81 Super Puma/Cougar/EC225/EC725 family helicopters, were sold, amounting to € 5.8 billion. In 2009, order bookings reached a total export rate of 66%. Orders for military aircrafts accounted for 70% of total orders and 30% for civil products. With around 460 gross orders, the Group secured its leading market position in the civil and parabolic market. Total order backlog at the end of 2009 reached 1 300 helicopters to € 15.1 billion, an increase of more than € 1 billion compared with the end of 2008. Due to the difficult economic outlook, Eurocopter has launched an internal program titled SHAPE with cost reductions of €200 million per year and inventory reduction
AIRBUS announced record deliveries of 498 aircrafts in 2009 with A-320 aircrafts totaling 402 deliveries. Order intake amounted to 271 net aircrafts accounting for 54% of the world market share for an estimated USD 30.3 billion. Boeing delivered 481 aircrafts and took in 263 orders. However, the Group expects new orders to decline in 2010, as the economic recovery remains fragile worldwide. Super jumbo A-380 deliveries under performed, 10 against 20 initially forecast, due to technical difficulties which the Group acknowledged have impacted cost upwards significantly. The military aircraft A-400M failed to meet deadline deliveries at the cost of an extra € 5 billion leaving seven buyers reluctant to add on to the € 20 billion firm order signed in 2003 for a total 180 aircrafts
Leading composite indicators in Canada, Japan, France, Germany, Italy, The UK and the United States, the OECD’s seven largest economies, indicate recovery stronger than projected according to the Paris based Organization’s January report. CLIs give early signals of turning-points in economic activity and include the monthly index of industrial output and a business cycle. CLIs for NOVEMBER 2009 rose 1 point in the OECD, or 8.2 points above the level attained in November 2008 and project a recovery in economic activity for all OECD countries.
France’s leading composite indicator increased 1.2 points last November or 11.9 points above November 2008. In the Euro area, the indicator grew 1.1 point last November, (1 point in the USA) and grew 10.9 points above its November 2008 level, (6.8 points above November 2008). The leading composite Indicator in Germany increased 1.4 points in last November, 12.3 points above November 2009. In Italy the leading indicator rose 0.9 points, 13.8 points above November 2008. The UK’s leading indicator climbed 1.2 points last November, 10.7 points above November 2008. In Canada, the leading composite indicator increased 1 point, 9.4 points above November 2008. Non OCDE economies also showed signs of recovery: the Russian Federation leading composite indicator increased 1 point last November, 4.4 points above November 2008. In China the indicator rose 0.2 points, 7.6 points above November 2008 and in India the indicator remained unchanged last November but rose 4.3 points above November 2008. In Brazil, the leading composite indicator underperformed: it rose 0.8 points, down 1.3 points below November 2008
RENAULT along with six partners, EDF, GBH, (Groupe Bernard Hayot), Total Réunion, GE Money and the GERRI Agency of the Gerri Program (Grenelle Environment Forum in Reunion - Succeeding in Innovation) have signed a letter of intent on the experimentation of 50 electric vehicles in the island of Reunion, together with battery charge infrastructure powered mainly by renewable energies. Under the patronage of President Nicolas SARKOZY, all partners marked their commitment in the VERT project (acronym for Electric Vehicle for a Technological Reunion), which aims at to meet the mobility needs of a territory with a limited geographical area via testing the implementation of a network of charge infrastructures, sized in number and charge technique (normal or fast). Last week, the Group, which had benefited from state aid in 2008, a total € 6 billion equally with PSA Peugeot, made the headlines following rumors about the delocalization of the future Clio IV manufacturing, from Flint, France to Turkey. Summoned to the Elysée Palace, Carlos Ghosn, Renault’s President assured President Sarkozy of the car‘s partial manufacturing at Flint which counts 3500 workers
SOC GEN issued a profit warning as the Group expects Q4/09 results to record a total pre-tax negative impact of around €-1. 4 billion in relation to the US residential real estate market in the fourth quarter, in particular the increase in estimated calculated loss rates in 2005 subprime loans from 13% to 15% before liquidity discounts, and, a decrease in recovery rate to under 40% from 50% for loans and receivables
Credit loans to non-financial companies shrank further and fell -2.4% year-on-year (-1.7% in the previous month) up to November according to Banque de France latest survey. Net monthly credit lines quarterly average consequently fell -1.8% (-1.5% in the previous three-month period). In the industrial sector and overall, cash inventories improved in Q4/09 topping 8 points (-6 in Q4/08) although export margins, at -8, stood at levels similar to year-on-year levels in 2008 and in Q2/09
AIR FRANCE - KLM passenger traffic decreased by 4.6% in December of last year while the load factor gained 0.8 points to 79.7%. Last month passenger traffic had already declined -3.2% Per air route, and in December, traffic declined the most on the European network, -6.4%. Traffic on the Americas network decreased by 5.2%, on the Asia network by 4.1%, on Africa and Middle east by 2.3% and on the Caribbean and Indian Ocean by 3.7% The load factor on the European network improved by 1.3 points to 67.3%, 2.5 points to 86.5% on the Americas network, and one point to 83.2% for the Asia network. On the Caribbean and Indian Ocean network, the load factor declined -3.9 points to 77.8% but remained stable on the Africa and Middle East network at 80%. Cargo activities recorded 8.4 points increase and a load factor of 70.1% although traffic contracted by 8.5% with capacity down 19.4% Cargo traffic solely rose in Europe, +11.9% and fell in the Americas, Asia/Pacific, MEA, and Caribbean /Indian Ocean routes
Wages and salaries per hour worked increased a modest +1% in the year up to Q3/2009 compared with +3.1% in the Euro area of which +4.5% in Germany according to Eurostat figures. Similarly to France, shorter work week subsidies were implemented for the purpose of labor hoarding. In the previous quarter, and year-on-year, wages and salaries had risen +0.9% (+4.2% in the Euro area with +6% in Germany). The non-wage component rose +1.3% in Q3/09 year-on-year, +3.6% in the Euro area and +5.9% in Germany. Per sector and on the same period, services recorded the most strongest wage increase +1.3% while industry and construction saw wages decrease by 0.1% to +0.3% and +0.4% respectively compared with the previous quarter and year-on-year. In Germany industrial sector wages rose +8.3% in Q3/09, (+0.8% in Q2), +3.2% in construction (+3.4% in Q2) and +2% in the services group (+4.3% in the previous quarter)
FAURECIA SA, manufacturer of motor vehicle components, will acquire Emcon Technologies LLC (Emcon) a US manufacturer of exhaust emission controls following the European Commission’s approval under the EU Merger Regulation. After examining the operation, the Commission concluded that the merger would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it
LAFARGE S.A., the world leading cement maker, will undertake the development of a state-of-the art cement plant in Russia at Ferzikovo in Kaluga region, with production capacity of two million tons a year. The carbon footprint per ton of cement produced will, as a result, be cut by 31% and energy consumption will be halved from current levels. Lafarge also plans to make use of renewable energy sources at this plant. The Ferzikovo plant project will be funded by the EBRD under an existing Multiple Project Framework agreement between the Bank and the Group which covers the countries of Central Europe and the CIS. Previous projects under this framework have been implemented in Romania, Poland, Ukraine and Slovenia, as well as in Russia. The EBRD’s first equity investment in Lafarge’s Russian operations, €70 million in 2006, will be completed by an additional €120 million similar type investment in Lafarge Vostok SAS. Despite the severe impact on the cement sector brought about by the economic downturn, the Russian cement market holds strong growth prospects in the long term due to significant constructions needs in the housing, commercial real estate and infrastructure sector
WINTER SALES with up to 60% rebates which started on January 6th and are due to end on February 9th took off on a very good start despite artic temperatures, in Paris, as shoppers lined up at cash registers at major high street stores, jammed with locals and tourists alike
PERNOD RICARD announced a drop in sales , -3%, for the first half fiscal year 2009/2010, in line with the Group’s expectations, whose detailed financial statement will be released next month. According to the Group, sales very much mirrored the economic impact felt on local markets: satisfactory in Asia, « dynamic in China« but slower in the US, and « difficult« in Europe
IN THE NEWS
Philippe SEGUIN, President of the Court des Comptes, (Government Accountability Office) died at age 66 of a heart attack. A former President of the National Assembly, he also held governmental posts as Labor and Social Affairs Minister. Reputed to be bad tempered, politicians of the majority and the opposition nevertheless unanimously paid tribute to a great civil servant with intense integrity, independence and fair-play
The Ministry of Foreign and European Affairs announced that 22 French nationals were reported dead in Port-au-Prince, Haiti while 11 are still missing following January 12th earthquake with 7.0 magnitude that devastated the capital city and left nearly one million Haitians homeless. According to the preliminary damage assessment of the capital city produced by the European Union's very high satellite resolution imagery, more than 4000 physical structures were destroyed and around 2000 residential buildings have partially or totally collapsed leading to over 200 000 casualties. Since the day after the quake and according to the Ministry of Foreign and European Affairs, a total 1 115 people were evacuated from Haiti, 683 of whom are French nationals, and 391 are Haitian citizens. Over 1000 French personnel have been engaged in rescue operations. Search and rescue teams are assisted by one helicopter, and one civil security aircraft. A water purification unit was installed to provide clean water to 20 000 people a day. Military aircrafts, up to five, have been undertaking rotations daily to Martinique and Guadeloupe and have allowed for 100 tons of emergency equipment and goods to be landed to Haiti. The European Union pledged € 429 million for the reconstruction of the island where 21 member countries, and Russia, have been collaborating.
The EU Civil Protection Mechanism counts 12 search and rescue teams englobing around 400 staff and rescue dogs, two field hospitals, six advanced medical posts, 29 medical teams and four water sanitation units. Base-camps, family tents, additional medical teams, advanced medical posts, and goods were flown to the island. International financial aid pledges which include the IMF, and the World bank totaled within the first eight days after the quake over USD 400 million to help Haiti recover from chaos. The European Union Foreign Affairs Supremo Cathy Ashton is coordinating the EU response to the earthquake in Haiti, and met with senior members of the US Congress in Washington DC, with Secretary of State Hillary Clinton and with UN Secretary General Ban Ki-Moon but no official visit to devastated Port-au-Prince was announced. Europe’s « invisibility » was decried by commentators as a fast and joint plan to rescue Haiti, rather than individual country actions, finally materialized ten days after the quake.
The Elysée Palace announced that President Barack OBAMA and President SARKOZY have agreed to « coordinate and intensify their efforts to save lives and help the wounded». According to the Palace’s written statement, along with Brazil, Canada and « other countries directly concerned by the disaster quake » , both presidents have decided « to work jointly without delay on an upcoming international conference for the reconstruction and development of Haiti.»
The National debt reached a record €1457.4 billion or 75.8% of GDP in Q3 (74% in the previous quarter)
Car fleet renewals topped a historical high last year of 2 268 000 million new passenger car sales, or +10.7% compared with 2008, making 2009 the best year for the car market since 1990 according to the Ministère de la Relance, (Department of Economic Stimulus). Nearly 600 000 new vehicles benefited from cash incentives. French car manufacturers outperformed foreign cars with about 60% market share during the incentive period last year due to smaller models. By comparison and in 2008, French cars market penetration reached 52.8%
Former Prime Minister Dominique de VILLEPIN was cleared of master minding a smear campaign aimed at President Nicolas SARKOZY and involving fake Clearstream bank account listings following the Paris Tribunal court ruling where a four week public trial took place in September. The Paris Prosecutor has announced that he will appeal the Court’s decision
Foreign Direct Investments in France declined -38% to USD 37 billion in the fist half of last year compared with a year earlier according to the OECD investment December report while French direct investments abroad fell -31% to USD 88 billion. According to the report, M&A activities by firms in the OECD region melted, -60%, from USD 1 trillion to USD 545 billion in 2009 over 2008, « the largest year-on-year decline in recent history ». The organization forecasts no improvement and expects sharp declines in each FDI inflows and outflows in 2009
MARTINIQUE and French GUYANA overwhelmingly opted out to become collectivities (similarly to Polynesia) and remain fully French Departments on Jan. 10th following the referendum on an autonomous status. The "No" totaled 79% in Martinique and 69.8% in French Guyana. On January 24th, each department voted to merge the Regional and General chambers which administer daily activities rather than remain under territorial rules
Despite the severe economic downturn, airports maintained their respective positions in terms of passenger volume in Europe in 2008 : similarly to last year, PARIS CHARLES De GAULLE with 60 million passengers ranked second to London/Heathrow, the EU’s busiest airport with 67 million passengers (-1.4% compared with 2007) according to the European Commission. In addition, PARIS CHARLES De GAULLE airport recorded +1.6% passenger traffic in 2008 along with Roma/Fiumicino +7.4% and Munich +1.7% out of top ten airports. Frankfurt/Main remained third busiest airport with 53 million, travelers, but recorded -1.2% passenger traffic followed by Madrid/Barajas with 50 million passengers or -1.6% and Amsterdam/Schiphol with 47 million passengers (-0.7%).
Passenger traffic however, fell sharply on international flights between 2008-2007: Paris/Charles de Gaulle - New York/JFK with 1.2 million passengers recorded the sharpest drop -29.8% out of the top ten busiest extra-EU 27 routes. London Heathrow - New York/JFK, the number one route from Europe, with 2.8 million passengers observed a lesser drastic decline -1.3% unlike London Heathrow - Chicago/O'Hare -9% with 1.4 million passengers, the fifth busiest route
The Carbon tax, voted by Parliament in September , and due to become effective 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 following the ruling. Prime Minister François FILLON announced that a new Carbon Tax white paper will be produced by January 20th
Artic temperatures, -9C to -15C in the north-west of France disrupted traffic due to icy roads following heavy snow falls. The south east was also affected by heavy snow where several TGV trains were delayed. In Brettigny-Sur-Orge, south of Paris, temperatures dropped to a record -19.6C. Flights were delayed at Roissy and Orly airports. EUROSTAR cancelled 50% trains scheduled between Friday and Sunday 10th to avoid trains technical failures due to freezing temperatures on each sides of the tunnel. Last month, 2500 passengers were stranded for over 18 hours under the tunnel in five TGV trains for similar reasons
Building permits authorized, 397 310 constructions, dived -17.8% last year up to December nearly similarly to 2003 when permits fell under 400 000 units benchmark according to latest figures published by the Department of Ecology, Energy, Sustainable Development and Oceans. On the same period, new constructions fell -16.7% to 330 000 new units. Between January and December 2009, the number of new co-ops built rose +7.7% year-on-year to 33 000 units, an exception in the construction sector as new buildings fell overall -21.8%. New collective housing permits authorized declined the most, -27.1% followed by individual housing -18%. Only four departments, Champagne-Ardenne, Burgundy, the Centre, and Haute-Normandie saw new the number of new permits increase, respectively +1.9%, +7.4%, +10.7% and +24.4% In Q4/09, a total 110 000 new building permits were authorized or -7.3% year-on-year to the same quarter. On the same period, collective housing permits fell -18.7% unlike individual housing where permits rose +1.1%. Residential permits increased +4.3% to 9000 new permits. Expressed in provisional figures to be updated newt month, new constructions decreased overall by 10.6%, with new individual housing tumbling -17.9%, new residential constructions -16%, and new collective housing -7.5%
Counterfeited Euro banknotes increased around 8% in the second half of 2009, a total 447 000 fake notes withdrawn from circulation, according to the European Commission. As in the previous half-year, the €20 banknote was the most counterfeited denomination, or nearly half of all fake Euro notes followed by the €50 banknote or approximately one third of the total. The majority (more than 98%) of counterfeits recovered in the second half of 2009 were found in euro area countries, with only around 1% being found in EU Member States outside the euro area and less than 0.5% being found in other parts of the world. The three mid-range denominations (€20, €50 and €100) together accounted for 97% of all counterfeits while high denomination counterfeits, €200 and €500 stays very low
Retail sales dipped -1.2% in the Euro area with sales of non-food products declining -1.6% according to Eurostat latest figures for November 2009. Sales of food-drinks-tobacco fell -0.4%. In one year overall retail sales declined -4%, the strongest drop since June pushed down by major components: sales of non-food products slipped -4.2%, equally the biggest fall in six months, and sales of food-drinks-tobacco goods dropped-2.9%
