Business & Financial News

The coming months may have an air of "déjà vu" for Suez Environnement, which is likely to revise down its ambitions, as in 2009, due to the economic downturn and its impact on the volume of industrial waste.

The world number two environmental services will probably have to even make acquisitions and accelerate cost reductions to be closer to its goals 2012-2013, analysts say.

"Given the deterioration in the macroeconomic environment and its impact on the business 'waste', we believe that the group will have difficulty achieving its 2012-2013 horizon," said Julien Desmaretz, at Bryan Garnier.

Building on a "gradual economic recovery," Suez Environnement has announced that it was early 2011, at constant exchange rates, the increases of at least 5% of its turnover and 10% of its gross operating profit (EBIT, EBITDA) in 2011 compared to 2010.

He also said it expects, always at constant exchange rates, on average increases of at least 5% of its sales and at least 7% of its EBITDA over the period 2012 to 2013, he still has goals confirmed in early August .

But growth prospects that loomed earlier this year moved away, especially with the debt crisis in the eurozone, while Europe accounted for 73% of its turnover in 2010 and waste 47 %.

The International Monetary Fund even had to revise downwards in September growth forecast for 2011 and 2012.

"Asset rotation"

"We expect 6% growth in EBITDA in 2012 and 2013.For 2011, it will be fair: there are risks if the T4 seen a collapse in industrial production and prices of recycled materials, "says Yohann Terry, an analyst at Exane BNP Paribas.

While threatening a new credit crunch, the prudence of Suez Environnement on acquisitions and financial profile, however, now appear as assets against his great rival Veolia Environnement, the world leader in the industry.

Just before 2008, Veolia and had instead embarked on a series of acquisitions at the top of the cycle, particularly in Germany, Italy and the United States, which proved to be far less profitable than expected in times of crisis.

The prospects of Suez, however, been a little more pressure with the sale of 70% of Bristol Water in early October for 152 million euros, the group will probably have to make acquisitions of modest size to hope to achieve its objectives.

"The group has not changed its 'guidance', confident in its ability to fill the air hole as part of its policy of rotation of assets.Does this mean that the probability of transaction (s) reasonably sized acquisitions currently under consideration (s) by the management is high? "Questioned in a note to analysts at Natixis.

"We would not be surprised (…), even if its strategic focus is on organic growth," they add.

Julien Desmaretz, Suez Environnement would need to buy at least 650 million euros in assets, enterprise value, to achieve its objectives in 2012.

"Better prepared"

The group may also consider to increase its efforts in saving a lever that allowed him to limit the damage after the crisis of late 2008, while the slowdown in activity in its industrial and commercial customers affected volumes and its margins.

But having already held in February the objectives of its savings program for 2010-2012, which it expects a net gain of RBE 300 million in cumulative over three years, some analysts estimate that Suez Environnement has now limited room for maneuver.

"Given the bad experience of late 2008, management is probably better prepared for a new fall of the economy," notes, however, Yohann Terry.

In terms of dividend, the company said in February that it was an annual increase of about 5% for the years 2011 to 2013, a policy that the economy could again challenge.

"If the growth in consumption expenditure of municipalities, industrial production and commodity prices were to decline, the purpose of dividend growth would probably be revised down due to the impact on EPS and therefore the payout "said Yohann Terry.

Some analysts believe however that the group will continue to better withstand the stock market as Veolia, which has abandoned its goals this summer and in December will detail restructuring measures designed to make it more profitable.

Since the beginning of the year, the action Suez Environnement has lost 25.8% and Veolia has plunged 47%, while the CAC 40 fell by 15.11%.

The growth in world oil demand will grow less than expected in 2011 and will accelerate next year, predicted Wednesday the U.S. Agency for Energy Information (EIA).

The EIA, which has already significantly reduced its forecast last month, has not made this time only a small adjustment with growth forecast revised down 50,000 barrels per day (bpd).

The agency now predicts an increase in demand of 1.32 million bpd to 88.4 million bpd this year and an increase of 1.44 million bpd in 2012.

These figures are higher than the predictions of the International Energy Agency, based in Paris, which expects growth of only 1.25 million bpd.

The Organization of Petroleum Exporting Countries (OPEC) has plans to increase the demand limited to 880,000 bpd in 2011 and an increase of 1.19 million bpd next year.

The EIA notes that if the supply of oil is still subject to a number of uncertainties, which she attributed to the instability in the Middle East, demand will continue to be penalized by the jolting of the economy.

"The downside risks dominate as fears continue to weigh on the pace of global recovery, the debt crisis continues in the European Union and other governments still face the challenge of deficits," said the EIA in its report.

Power focus on health is a major strategic focus for large food manufacturers, but their ambitions are hampered by regulations become more stringent and consumers more wary of offering is often expensive, analysts said.

The major industry players such as Danone, Nestle and Unilever should nevertheless continue to invest in these foods which the operating margin is much higher than ordinary food, they say.

The taxation of the "junk food" makes this strategy even more relevant.Denmark has introduced a tax on products that contain saturated fats and France wants to introduce a tax on sugary drinks.

The global market for "functional foods", expected to provide a benefit to consumers with diabetes or obesity, is estimated at 150 billion.

"The food chain can no longer ignore the trend nutrionnellement correct.This is an important issue given the aging population and increased diseases such as diabetes in developed countries, "said Isabelle Senande, director of studies at Xerfi.

But, she adds, "given the regulatory, industry think twice before launching."

One analyst, who requested anonymity, believes that for his position "is a condition of survival, not a niche market."But, he adds, "industry groups are becoming more cautious as inflation promises led to a tightening of regulations."

90% OF CASES ACCEPTED

The bifidus yoghurt, dairy products fortified with calcium and omega 3, or branded foods "low fat", "no sugar added" or "high fiber" are subject to strict control of the European Food Safety Authority (EFSA), which ensures that the benefits put forward by the industry are justified scientifically.

Danone, which boasts of wanting to "bring health through nutrition," had experienced a crushing defeat in 2009 yoghurt Essensis that would "feed the skin from within."For its part, Nestlé has had a few days ago to withdraw his drink Nesfluid after only one year of marketing.

The Danone Actimel can show that it "strengthens the body" and that Activia "helps regulate transit in 15 days". The European regulator has however endorsed Danacol "reduces cholesterol" or Densia and Petit Gervais "that help maintain bone density."

At the National Association of food industries, Cécile Rauzy, project quality, nutrition, regrets that the demands of the EFSA is based on criteria "that are not necessarily the field of nutrition but to the pharmacy," the that could "slow the nutrition research."

Of the 2758 claims assessed between 2008 and 2011, the EFSA has delivered 90% of negative opinions.In particular, it rejected all those on fiber because, judging that their beneficial effects on intestinal transit had not been demonstrated.

The EU regulation on consumer information, passed last week and will be published by the end of 2011, require nutrition labeling for all companies.

"This is a major change because of the 10,000 enterprises in the French food industry, 95% are SMEs, many of which have never been labeling or nutritional analysis," said Cecile Rauzy.

BYPASS STRATEGY

Also in 2012, all health claims must be submitted to the French health authorities and the EFSA opinion which must be approved by the European Commission before being published on a register of authorized health claims. Only after the company can rely on it.

For Cecilia Rauzy, this procedure could lead very long "all small businesses, as well as large groups, to question a reorientation of their research."In fact, few major innovations have recently arrived on the shelves of distributors, agribusiness around obstacles by offering natural products with no artificial additives or colorants.

Francis Priest, an analyst at CM-CIC Securities, believes however that "the consumer is willing to pay more for food really good for his health in mature as in the emerging".

With margins of 13% to 18% which gives it a medical food, against 12% for an ordinary product, a company completely marginalizes the impact of the rising cost of raw materials, says the analyst.

In order to develop this market, industry players segments of business or carry out acquisitions.

Thus, Danone has created a division "Medical Nutrition." Nestle it launched last year a division specializing in health encompasses both activities in the nutrition of infants and sick and Jenny Craig, its subsidiary concurrent Weight Watchers. Without complex, the Swiss group has offered in the wake of frozen pizza, Kraft Foods for $ 3.7 billion.

At the same time, 51% stake in Yoplait were acquired for 1.2 billion euros by the American General Mills, while PepsiCo has offered the Russian group of dairy and fruit juice Wimm-Bill -Dann to 4.1 billion euros.

The Belgian, French and Luxembourg governments reaffirmed at the end of a meeting held in Brussels this Sunday afternoon in solidarity in the search for a solution that ensures the future of Franco-Belgian bank Dexia.

In a statement released by the office of Belgian Prime Minister Yves Leterme, they say, give their full support to the proposals of management of the banking group, which will be presented at a Board of Directors scheduled at 15:00 in Brussels.

"The proposed solution, which is also the result of intense consultations with all relevant partners, will be presented to the Board of Directors of Dexia which is responsible for approving the proposals," said Yves Leterme.

The activities of the Franco-Belgian bank, first bank in size in Europe to be a victim of the crisis of sovereign debt in the euro zone could be split and the most risky assets confined to a separate structure.

For André-Yves Portnoff, prospective and strategy consultant, Director of the Observatory of the Revolution of the mind (Futuribles Group International), it is finally time to help SMEs to boost growth. Will be right at the end of Europe?

Yes, because the "baseline scenario" is always catastrophic. If nothing is done, Europe will accelerate its decline, with many catastrophic scenarios that may occur locally at the same time. Scenario brown, xenophobic governments, more or less fascist, with here and there an alternative left-wing populist. Black scenario, governments taken over by organized crime, mafia Italian and Slavic holding hands. Italy shows a partial combination of the two scenarios, all involving a collapse and worsening the economic strength and quality of life of Europe.And the Italian example shows that corruption is too expensive in a recession.

What is the economic model of a virtuous Europe?

A virtuous Europe rependrait confidence in its strengths, culture and a level of unparalleled quality, with a message but not ego-centered universal, that of humanism, of human rights, real democracy, not just formal. We argue in to action, citizens! for a Europe of the Enlightenment able to support Indignant over the world, offer them to overcome the rebellion and build together. This Europe would value its culture tolerant, secular, united, ingredients necessary for creativity, innovation, therefore, as history confirms Alexandria since the fall of the USSR. Europe is setting an ambitious industrial targets and strategy development.Far from closing on itself, it nouerait the necessary alliances in the world. It could, for example, rely on the last European champion Telecom, Nokia, Linux, free software also European in the beginning, the school computer teacher's Negroponte to start equipping our schools a European network computing Free. Instead, it subsidizes Microsoft and Google are bought shelves for our students. We think small!

Innovation, the salvation of the industrial countries?

The choice is simple: either maximize immediate profits of a few, as is the hold-up neo-liberal, and too bad if we destroyed the business and desertification territories. It removes grease staff is relocating, employees are demoralized, whatever is more than innovating.Thus, the industries of radio, TV Americans died, and Hewlett Packard, No. 1 worldwide PC just follow suit, he will abandon the PC, 32% of its turnover, 42 billion of revenue.

Either you bet on the future as many companies continued success we describe in action. Investing in people, loyalty is a friendly management's personal loyalty in turn clients. It stimulates creativity by listening and recognition. We innovate in products, services, processes, organization, partnership, it is different to escape the deadly competition on cost. And it does not seek to maximize immediate profits by killing the goose that lays golden eggs. Production, distribution must remain physically close to the essence of design and innovation, offshoring does not warrant that to get closer to markets.Repeat that innovation is not technical and can find its source at all levels. The company Favi thirty years of productivity gains three points thanks to innovations from its workers …

Why in France for decades no longer creates enough growth?

We know that large groups are destroying jobs, it is entirely generated by SMEs. France and Europe, the fabric of large companies is not renewed. Large innovate less and less but prevent the growth of young champions, particularly in France, less so in Germany. Collusion among elites out of the same schools, electioneering and mental models are the bulk of state aid going to a few large groups.The situation has not improved since that July 1987, a report by the Ministry of Industry drew up an alarming picture of the French situation: "Our exports of high technology are insufficient. France is the only major OECD countries whose exports are dominated by sales of products with low technological intensity. The state aid is concentrated on a few sectors and companies. Large companies are the main beneficiaries of aid: 73 companies received 71% of total aid, more than their weight in the number of researchers (46%) or the volume of R & D (52% ). "

We must break with the "Republic of Buddies" or accept a costly meltdown. We know the solutions, we must stop talking and act effectively.The shock of the crisis and the pre-election period are favorable policies to require that they become serious, they simplify and focus the procedures, they open de facto or de jure public procurement for innovative SMEs by creating a affirmative, the first step towards the proliferation of French and European ETI and the formation of French and European world leaders, especially in high-tech sectors, high-growth, all that is the daily life of tomorrow in a massively interconnected .

An official with the International Monetary Fund said Wednesday that if any institution could buy bonds Spanish and Italian, along with the European Financial Stability Fund (EFSF) prior to distance himself a little later with this idea.

Antonio Borges, Director of the IMF's European Department, said at a news conference that the IMF "might even invest with the European Financial Stability Facility (EFSF).We would definitely ready to play this role. "

Greater involvement of the IMF in attempts to resolve the debt crisis in the euro area could reassure some investors who feel it is out of control.

"The investments we would do in Spain or Italy would be based on the certainty that these countries are on track, they are solvent and to take all necessary measures," said Antonio Borges.

"Because the EFSF now has the opportunity to invest in secondary markets, we could invest with him, to support the debt markets in Italy and Spain with an additional element of credibility," he said.

Later, Antonio Borges, issued a statement saying he wanted to "clarify some comments earlier held" by saying that the IMF could act directly on the bond markets.

"The IMF can only offer our resources to countries, it can not be used to intervene directly in the bond markets. We do no involvement in the market with the EFSF," said he.

The EFSF, with 440 billion euros, is seen as not sufficiently abundant in case of worsening of the crisis.And European officials are already thinking about increasing its response capacity through leverage.

ECB must remain active in the bond market-BORGES

At the press conference before his release correcting his remarks, Antonio Borges had said he wanted to wait for the ratification of the new powers of EFSF before further action by the IMF.

The IMF could go further and invest directly in bonds in Italy and Spain and for this he will have to create an investment vehicle specific, had said Antonio Borges.

He also felt that the European Central Bank should remain active in the bond market to help stabilize it, even after strengthening the powers of the European Financial Stability Fund, the EFSF.

ECB buys government bonds Spain and Italy on the secondary market since August to prevent the cost of borrowing in these countries do not rise to prohibitive levels.

The ECB considers that this action is somehow an extension of its monetary policy decisions.But many economists believe the central bank in the euro zone will no longer intervene in the market when the EFSF will feature its new powers including the purchase of debt on the secondary market.

"The ECB has a very important role to play in restoring market stability in Europe," said the director of the IMF's European department, Antonio Borges, at a press conference. "It is not possible to have a monetary union with the debt markets of extraordinary instability, as is the case today."

It is not, says the IMF, the spendthrifts save states, but to smooth out market fluctuations."A steady market intervention to stabilize the conditions would be most appropriate," said Antonio Borges.

Governments in the euro area might consider a way to make such operations more acceptable to the ECB, whose statutes forbid it to fund government.

"If that means give the ECB some degree of support from finance ministries across Europe, in order to provide additional comfort to make it easier, we would certainly very happy to see that happen, "said Antonio Borges.

"There are several ways to do so. This could simply be guaranteed by several ministries of finance, this could be the EFSF, there are many possibilities.The most important thing is to make it easier for the ECB to stabilize a presence in the markets, "he added.

UBS has relieved the market by announcing Tuesday that it still anticipates a modest net profit for its third quarter despite the loss of $ 2.3 billion due to unauthorized transactions a dishonest broker in London.

This estimate includes the cost of 400 million francs (329 million) in restructuring charges, said in a statement the number one bank in Switzerland.

UBS had announced in late August that it intended to eliminate almost 3,500 jobs to save about two billion francs by the end of 2013.

Net new money from wealth management activities should be comparable to the second quarter, the bank added.It recognizes that fraud will impact slightly the BIS tier 1 ratio, but qualifies its position as capital of "solid".

The action of UBS sells 0.99% to 9.99 francs at 10:42, while the Swiss blue chip index lost 1.39% and the index of European bank leaves 3.25%.

UBS was able to register gains on own credit related financial commitments at fair value at 1.5 billion francs.These contributions are "essentially attributable to widening credit spreads during the third quarter," said the establishment.

In addition, the bank recorded a gain on the sale of treasury investments of close to 700 million francs in Swiss Bank & Wealth Management.

Between April and June inflows into the wealth management had reached 5.6 billion, down by half compared to 11.1 billion in the first quarter.

UBS said Tuesday that the estimates had been made at an early stage of the procedure for closing the accounts.The bank, which will release its third quarter results on Oct. 25, said no new update was expected before then.

"Finally a nice surprise after a flood of negative news", analysts said the bank Wegelin in their fax in the morning.But they also believe that the bank will roll up their sleeves to restore confidence.

Sabine Bohn, an analyst at DZ Bank, agrees: "We appreciate that the net inflows are similar to those in the second quarter but we remain cautious, because the loss due to fraud and the resignation of CEO Oswald Grübel resulted in a big loss of confidence. "

Dirk Becker at Kepler Capital Markets, is more cautious: "It is too early to become positive to UBS, while resizing the investment bank will certainly create friction and unforeseen problems."

A new week promises to be tense on Wall Street, where investors are worried about a possible erosion of corporate earnings against the backdrop of the debt crisis in Europe and slowing Chinese economy.

The U.S. stock markets fell more than 2% Friday, signing the third quarter of their worst quarterly performance in three years, and some fear that the benefits of big names backed out because the rating is supported by foreign demand.

Past two years, export sales have averaged 30% of the turnover of listed companies in the S & P 500, allowing the results of many of them to exceed the expectations of analysts.

"If the euro falls, it will have a huge negative impact on companies like McDonald's," Judge Todd Schoenberger, LandColt of Trading.

"I do not expect quarterly results very fast", he adds. The ball must begin quarterly publication October 11 with Alcoa.

In addition, many U.S. multinationals have benefited in recent months the relative weakness of the dollar to support exports.But the euro shows a quarterly decline of more than 7% against the greenback, depriving companies of the damper.

Last major undertaking as to have lowered its profit forecast, Ingersoll-Rand fell by over 12% on Wall Street Friday after the announcement.

Of surprises anyway?

While the S & P 500 fell 14.3% in the third quarter, 1,700 billion in value gone up in smoke, a period of disappointing results could accentuate this downtrend, analysts said.

Most of them have lowered their expectations of results.According to Thomson Reuters data, earnings for the third quarter are expected up 13.3% over the same period of 2010, against an expected increase to 17% in early July.

In this context, investors will closely monitor the economic indicators to try to learn more about the state of U.S. growth.

The employment figures, released Friday, will be eagerly awaited, as well as the ISM index of purchasing managers in manufacturing (Monday) and services (Wednesday).

Still, some strategists believe to possible surprises on the forehead of the results, as Natalie Trunow, Calvert Investment Management.

"U.S. multinationals do not necessarily derive all their additional benefits (European market), and China, the statistics point to a slowdown but not a hard landing," said she.

Others point out that the drastic austerity measures that large firms have emerged after the 2008 financial crisis will maintain their accounts afloat.

"From our perspective, U.S. companies have learned to make a profit in this context (difficult)," wants to believe Hank Smith, chief investment officer at Haverford Trust.