International Business News

Positioning high-end of Germany and its strong presence in emerging markets, causing a record growth, should protect Europe's largest economy from the impact of an economic slowdown in the U.S. or its neighbors in the euro area.

During the last two decades, German companies are well established in the markets of emerging Asia and Latin America, particularly in infrastructure which these economies need to grow.Germany and last year signed a cooperation agreement with Brazil to develop the infrastructure needed to organize the World Cup soccer in 2014 and the Olympics in 2016.

Controlling the production of capital equipment up-end the German strategy was used. Indeed, the demand for these products is very strong, and machinery and commercial vehicles alone representing nearly 50% of German exports.

"We are well represented in many markets that are now very important, but which were not specifically before.We are better represented than others, "says Volker Treier, chief economist of the Chamber of Commerce and Industry (DIHK).

This good exposure to growth markets is reflected by good orders to German companies, even as mature economies like the United States, struggling to recover.

Orders in the German manufacturing sector have increased by 3.2% on month in June, after a strong second quarter showing a growth of 2.2% over the first three months of the year, the strongest growth since the reunification in 1990.

Businesses benefit directly from this favorable environment.Of the 30 groups listed on the DAX index, 23 of them have published results above market expectations in the second quarter, and 12 have raised their forecasts.

EXPORT DEPENDENCE

But the economic profile of Germany, focusing on exports, has its downside.Last year, at the height of the recession, German exports have dropped sharply, causing an economic contraction of 4.7%, higher than the average contraction across the euro area – 4.1%.

"The sensitivity to exports has struck the German economy in 2008 and 2009, and now she supports a remarkable growth," explains Niels Thygesen, professor of economics at the University of Copenhagen.

During the recession, foreign groups often had no access to funds for the purchase of German equipment, explains Volket Treier. "Often, the financial structure does not follow.(…) Now, repeat orders. "

These include small and medium businesses, often family, the famous Mittelstand, which form the backbone of the German economy.

SUPPORT HOUSEHOLD AND CONSTRUCTION

Another key factor in recovery: households.German consumers, known for their sense of savings, have supported the growth in the second quarter after starting the year marked by sluggish consumption.

The construction sector also contributed to the improved economic situation of the country, bouncing over the period April to June after a particularly harsh winter, which had greatly affected the industry.

Economists expect growth in the German economy at least 3% in 2010, prompting the country's trade unions to demand a high wage growth, after agreeing to tighten its belt during the greater part of the decade elapsed.

Such a decision would certainly erode the competitiveness of Germany, but without affecting the economy significantly.

The powerful IG Metall union calls for a wage increase of 6% to 85,000 steelworkers, a claim well above the inflation rate of 1% of Germany.

Eiffage yesterday confirmed its forecast of sales for 2010 thanks to the growth of its backlog and achieved a 40% jump in net profit group share biannually.

The eighth group of European construction and concessions generally expected that sales suffer in 2010, and 2009, the reluctance of public procurement, while the branch motorway concessions observes it, a gradual recovery its activity.

"For now, we have been heavily affected by margins than they were at the top of the previous cycle in 2007, but we do not know when they ascend," said CEO Jean-Francois Roverato at a meeting analysts.

He noted that the shift of the French market over the last ten years, to concessions and public-private partnerships (PPP) would generate a "return to better fortune" in some time."The question is when," he added.

Eiffage, best known for the Millau Viaduct and the future stadium of Lille, has achieved a net profit after minority interests of 70 million euros in the first half thanks to the reduced cost of debt.

The operating profit has however declined by 2.6% to 412 million, within the scope of the downturn in work due to a climate of increased competition.

Alongside Eiffage, Bouygues has raised its annual target of revenue, thanks to TF1 and real estate, while still waiting for a 5% decline in construction.

Vinci, the world leader in construction and concessions, has published its interim results next to expectations, particularly thanks to the improvement of traffic conditions.

NEXT ISSUE OF THE OFFER OF WITHDRAWAL ON APRR

Eiffage, owner of motorway networks APRR (Autoroutes Paris-Rhin-Rhone) and Area (Rhone Alps), has already published July 30 in sales for the second quarter, emerged up 2.2% to 3.547 billion euros.

The company said that the outcome of a bid withdrawal filed on APRR Eiffarie early July by the joint venture between the Australian Eiffage and Macquarie would be published on September 24.

The offering will enable Eiffarie hold 100% of APRR and will be accretive to net income of the group in 2010, says Eiffage.

PRPA reported Friday a net profit increase of 16.3% on back of recovery in traffic, especially trucks.

The group is held June 30 to 26.3% by its employees and 20% by the Strategic Investment Fund (ISF), the float is 35.7%

The action Eiffage closed down 1.34% to 35.99 euros on Tuesday, giving a market capitalization of 3.24 billion euros. It has lost 8.5% since the beginning of the year.

The vagaries of the economic recovery and the prospect of new banking regulations temper the optimism of investors after quarterly results exceeded expectations published this week by several major European banks.

Reversals of impairment greater than expected second quarter have offset the slowdown in investment banking, penalized by the threats of contagion of the crisis of the Greek sovereign debt investors who scalded.

Societe Generale has reported a profit of nearly one and half times higher than expected, and Standard Chartered, which operates mainly in Asia, has released a record result.

Lloyds has returned to the green to the first half thanks to a halving of asset impairments.

However, European banks have not divested of their caution, particularly when faced with the consequences of coming prudential reforms.Although the deadlines for application of solvency ratios so-called "Basel III have been repulsed, concerns remain about them.

"There is fragility in the global economy and nervousness in financial markets," said John Peace, Chairman of StanChart, adding that British banks were particularly disadvantaged by the rules on pay, taxation and financial regulation.

Most European banks which have published their results on Wednesday have followed the trend shown Monday by BNP Paribas and HSBC with a lower level of bad debts.

However, even if SocGen gained 0.6% at the Paris Stock Exchange in the afternoon, StanChart lost 6.3% to the London Stock Exchange.

The quarterly results and the prudence of banks are an excuse for profit taking while the lure investors to the sector had been increased by the publication, July 23, heartening results of resistance tests suffered by banks in the European Union.

The European banking stocks index yielded 1.2% on Wednesday afternoon, after having won over 20% since early July against 10% for pan-European Stoxx 600 index – and nearly 9% since the release of stress tests .

"The results show that emerging markets like China, India and Brazil are areas where we can go to generate meaningful activities," said Ted Huang, a fund manager Pinebridge Asia High Yield in the results of StanChart.

Against the trend, the German Postbank increased its provisions for impairment related to risky real estate loans and has revised downwards its objectives.

Allied Irish Banks The Irish, partly nationalized, has also reported a doubling of losses in the first half while making clear progress towards its recapitalization.

These two facilities join the Italian UniCredit, the first credit agency in Central and Eastern Europe, which was published on Tuesday a quarterly profit well below consensus, hit by a dramatic drop in trading revenue.

The rate of the Livret A, the product of savings the most widespread in France, went on Sunday from 1.25% to 1.75% to reflect the acceleration of inflation.

There were some 60 million books A and blue books in France in late 2009, according to figures released Wednesday by the Bank of France.

Individuals then held 59.3 million of outstanding books for 175.5 billion euros and 0.6 million corporate booklets for an outstanding $ 7.9 billion.

The higher rate of pay A booklet was announced July 13 after the publication of figures showing inflation in June rose 1.5% in consumer prices over the year.

The Bank of France is responsible for conducting, on January 15 and July 15 of each year, the calculation of rates of pay passbooks regulated according to formulas that take into account the rates on money market and the increase of consumer prices.

The distribution of the Livret A was extended on 1 January 2009 to all banking networks.

The distribution of the money invested in this product is very concentrated, 42% of assets being deposited on only 7% of books in late 2009, according to the report released Wednesday. Next, 30 million savings books were credited with less than 150 euros.

BP confirmed the upcoming resignation of its CEO, Tony Hayward, widely criticized for his handling of the oil spill in the Gulf of Mexico and its replacement by the American Robert Dudley.

This announcement coincides with a special charge of $ 32.2 billion (24.8 billion euros) related to the oil spill, which plunges the accounts of the British group into the red to the tune of 16.97 billion only for the quarter April-June.

"The tragedy of the explosion and damage wells Macondo environments that ensued marked a turning point," said the group's president, Carl-Henric Svanberg after announcing the departure of Tony Hayward.

"BP is a strong company but will now be (…) a different company."

Robert Dudley, 54, currently in charge of the group's activities in the U.S., oversees efforts to contain the oil spill, considered the worst in the history of the United States, which pollutes the region since the collapse of the Deepwater Horizon platform April 20.

He will be based in London after taking office and will sell the direction of the American branch in Lamar McKey, the company said.

Tony Hayward to take its share towards the non-executive of TNK-BP, BP's joint venture in Russia.He will receive compensation equivalent to one year's salary, or 1,045,000 pounds (1,250,000 euros).

Hayward had angered the U.S. administration for having complained of being overstretched since the beginning of the disaster and for having, during his congressional testimony, tried to dodge responsibility for his group.

Excluding costs related to oil spills and other non-operating expenses, BP poster for the second quarter adjusted earnings of the replacement cost of 4.98 billion dollars, in accordance with Reuters based on estimates of 11 analysts.

Adjusted earnings replacement cost excludes gains or losses related to changes in valuation reserves of fuel and is comparable to net income.

In a separate announcement, BP said its asset sales could reach a total of 30 billion dollars over the next 18 months, which could allow it to reduce its debt by between 10 and 15 billion dollars.

The group said it will review its dividend policy once established results for the fourth quarter.

Boeing said that delivery of the first 787 Dreamliner could be delayed until early 2011 instead of the fourth quarter of 2010, flight tests have revealed some difficulties.

Speaking at a teleconference with the press, Scott Fancher, general manager Dreamliner program, however, said the decision to postpone the delivery of first aircraft from All Nippon Airways (ANA) has yet been taken .

"We found some difficulties that challenge our schedule a bit," he said adding that these difficulties were related to issues of "configuration tools".

Around 17:30 GMT, Boeing retreated 0.51% to 64.42 dollars, wiping out a portion of losses just after the announcement of a possible further delay, while the Dow Jones yielded 0.57 %.

If ever the first delivery was postponed again, the behind the original schedule – May 2008 – would exceed two and a half years.

The beginning of the production launch of the plane was delayed five times in three years and the first flight, which occurred in December 2009, had been postponed six times, due to both a lack of parts, problems design and a two-month strike that affected Boeing plants in 2008.

"We want to play the card of caution and say it could be that delivery is delayed to the first part of next year. But at this point, our schedule still provides a delivery by the end of the year "Scott Fancher continued.

Moments earlier, Boeing said it had revised upwards its forecast of orders for new aircraft by 2029, thanks to an increase in the number of LCCs, the replacement of less fuel efficient aircraft and economic recovery.

The U.S. aircraft manufacturer estimates that 30,900 the number of orders over the next two decades, a figure up 6.5% compared to the forecast of 29,000 made last year.

Home sales in Spain rose for the fifth consecutive month in May, according to data released Monday by the Institute of Statistics, a sign of market stabilization.

Housing sales rose 11.9% in May on a year to reach 37,787 units. In one month, the increase is 10.1%.

The Spanish housing market, which had been boosted by lower borrowing rates over the past decade, has collapsed since the start of the financial crisis, affecting the full brunt of the Spanish economy.

At the height of the housing boom, more than 80,000 homes were sold every month.After the bubble burst, this figure fell to touch a low of 29,178 in April 2009.

Despite the recent rebound, the experts polled by Reuters believe that prices will continue to decline in 2010 and during much of 2011.

Fauchon intends to accelerate its development in the Middle East and make tea and chocolate its two main export products, having weathered the crisis and be able to break even.

With a turnover growth of 10% during the 2009-2010 fiscal year ended March 31, to 145 million euros, the luxury grocery relatively well through the crisis thanks to its business functions – which account for 18% of sales and grew 30% over the year – and thanks to Internet sales and business gifts which jumped 40%.

"I think the luxury food took its dimension of sharing and fun available," said Isabelle Capron, CEO of the company, in an interview with Reuters.

In times of crisis, "it differs less the purchase of a flash than a Ferrari," she smiled.

For the current year which started badly with the fall in April air traffic caused by the eruption of a volcano in Iceland, Isabelle Capron said it expects growth of 8%.

In terms of results, the company has managed to balance operational in 2009-2010 and is an operating profit of approximately 5% of sales within three years.

After a slow decline, the famous luxury shopping has been saved from bankruptcy in 2004 by Michel Ducros, company president – son of Gilbert Ducros, founder of the spices of the same name – which has acquired 90% the balance being taken by the management of the company and some private investors.

RENOVATION

Fauchon, shops and aging product line, then made a major restructuring led by its new CEO, an expert on marketing and advertising in schools formed the American Colgate.

"We renovated sites, product lines, image, teams, information systems (…) Everything has been reworked," she said.

Convinced of the power of a brand embodying the 120 years of French luxury food, Isabelle Capron initially wanted to give a new Fauchon strong visual identity made in black, white and fuchsia, while keeping the logo the effects of mirror from the 1930s.

"It should be quite radical and very visible," she says.

The renovation of the store's historic Place de la Madeleine in Paris, this revival has embodied the style codes closer to the fashion of the store.

Black lacquer, pink mirrors and tinted windows, the two shops of the place have also seen their product lines fresh completely redesigned.

To facilitate the transition in its stores, Fauchon opened a bakery and a bar area with caviar, pastries modernized with "collections" of flashes and bright colors for buttons or winks at the news (home sold lightning rainbow on the day of the "gay pride").The catering products are being reviewed while offering self-service will open in September.

If the activity is divided equally between the fresh produce and groceries, the latter, which requires less manpower, offers higher margins and can easily be exported.

TEA AND CHOCOLATE IN FIRST LINE

In the grocery store, what are tea and chocolate (which each accounted for 18% of group sales) that are the subject of attention and should be the engine of international growth.

"We invest in tea and chocolate, our two major providers of business growth and profitable recurring," said Isabelle Capron, inaugurated Monday a new line of chocolates numbered dubbed "Shock Made in F" produced in collaboration with chocolate Pascal Caffet, Best Worker of France in which Fauchon took 33% stake.

Fauchon carries today, 25% of its turnover in France and 50% in Japan, where it is established for decades through a partnership with department store chain Takashimaya but where growth prospects are limited.

To grow, the company looks to the Middle East, which accounts for 15% of its sales and where it intends to open over 20 stores in the next two years, in sales that could reach 30% of turnover within five years.

The appetite of this region in the world for sweet foods makes an ideal target for the confectionery and chocolate.

Besides France, Japan and the Middle East are the only regions in the world where Fauchon has a local manufacturing enabling it to offer fresh produce.Elsewhere, shops selling grocery products that can be exported.

BACK IN CHINA AND THE UNITED STATES

After a setback in China, where the company recently closed a large store opened in Beijing in 2007 – too large, misplaced – Fauchon has opted for a model shop "gifts" to smaller area. She has just opened one in Hong Kong and said to be in contact "advanced" with partners for openings in mainland China.

United States Fauchon also suffered a defeat and closed its shops in New York but wants to expand free "if you can find the right partner".

Russia, very hard hit by the crisis, also has the longer term, among the strategic development zones of Fauchon.

Oracle has announced a net quarterly profit above expectations, this suggests that the recovery of IT spending continues with companies investing in large infrastructure.

The specialist said that professional software maker Sun Microsystems servers – acquired in January while he was in deficit – helped, excluding special items, totaling more than $ 400 million operating profit.

"Oracle is ahead of its roadmap," said an analyst with Piper Jaffray.

The company earned for the fourth quarter of fiscal year 2009-2010 ended May 31 net income excluding items of $ 0.60 while analysts on average expected $ 0.54, according to Thomson Reuters IB / E / S.

Turnover increased 39% to $ 9.5 billion, a level in line with market expectations. Oracle has acquired Sun for 5.6 billion dollars.

"We did better than expected both in terms of sales as net income," said Jeff Epstein, CFO of Oracle, said in a statement.

Sales of new software rose 14% from a year ago to $ 3.1 billion.Three months ago, Oracle had told anticipate a sales growth of between 3% and 13%.

The Oracle President Charles Phillips said the group took "significant market share" in its German rival SAP software in business management.

After finishing down 2.03% to 22.22 dollars on Wall Street, the title of Oracle jumped more than 4% in trading after-hours trade.

The action, however, declined by some 16% since it hit a high of nine in mid-April.

Johnson Controls said to be still interested in some of Visteon's business despite rejection suffered by its offer of 1.2 billion dollars (one billion euros) on Tuesday.

In a statement, the American automotive supplier said it had sent a letter to his competitor in which it reaffirmed its proposed acquisition, without giving further details.

Visteon said Tuesday its rejection of the bid from Johnson Controls for its determination to stick to its own roadmap to exit from bankruptcy.

On May 21, Johnson was caught short financial analysts by offering to buy the business vehicle interiors and electronics.

Visteon, a leading supplier of Ford, was placed last year under the protection of Chapter 11 of U.S. bankruptcy law in order to reorganize its business and to clean up its balance sheet.

In the first three months of the year, the OEM posted a net profit of 233 million against two million a year ago.