EMEA

Volkswagen’s restart faces further roadblocks

1 Aug 2024

The bloated $56 bln German carmaker is cutting costs further, as it tries to hit bold profit targets. CEO Oliver Blume’s 6.3% operating margin is better than it looks. But Chinese competition and stringent carbon targets make for a tricky road ahead.

Shell-BP fantasy M&A has some grounding in reality

1 Aug 2024

Merging the two big UK oil groups is an idea that’s decades old. Shell boss Wael Sawan has minimal need or inclination to take the plunge. But $97 bln BP’s cheap valuation and potential synergies mean his hand might be forced if a rival lobbed in a bid, or if oil prices slumped.

Carmakers strain to navigate the next swerves

1 Aug 2024

After responding to the unexpected success of $720 bln Tesla, older manufacturers now face rising China exports amid slower EV growth. In this Viewsroom podcast, Breakingviews columnists discuss how GM, VW and others – including governments – are handling the nascent trade war.

Green hydrogen fever gets needed doses of reality

1 Aug 2024

Over the past five years, supporters argued the low-carbon gas would be a big fossil fuel killer. Cost and science makes much of that fanciful. Fortescue nixing production goals and EU targets being dubbed too ambitious suggest the industry is getting more practical and smaller.

Oil is an imperfect gauge of Middle East risk

31 Jul 2024

Brent crude prices rose 2.5% after senior Hezbollah and Hamas leaders died in strikes blamed on Israel. Oil traders have grounds to see the danger of a wider war as limited, but automated trading may increasingly act to muffle any concerns. It’s hard to tell which is right.

HSBC’s growth engine has insufficient horsepower

31 Jul 2024

Wealth revenue is rising at the $167 bln lender, but not necessarily fast enough to offset the hit from falling rates. The key transaction-banking unit, meanwhile, is stagnant. To fix it, new CEO Georges Elhedery will need investors’ patience and a dose of economic good luck.

UK ratesetters can stop worrying and start cutting

31 Jul 2024

Markets are split on whether the Bank of England will lower borrowing costs from a 16-year high of 5.25% on Thursday. Governor Andrew Bailey worries about services prices, wages and growth. But a glimpse into the future shows that those bugbears are less scary than they look.

Diageo’s succession hangover has fuzzy duration

30 Jul 2024

The $67 bln drinkmaker’s 2023 promotion of CEO Debra Crew was seamless. But Diageo’s share price has slumped since, and some of the problems are self-inflicted. Crew’s future may hinge on a rebound of US consumer sentiment, rather than any bold change of strategy.

Posh UK wealth group flaunts takeover credentials

30 Jul 2024

St. James’s Place is drawing in new client money and cutting costs. That eases concerns that well-heeled Brits would abandon its high-priced service after a recent fee overhaul. Even after a 25% stock pop, the 3.8 bln pound group is cheap. A takeover or buyout looks plausible.

UK’s half-empty fiscal glass is slowly filling up

30 Jul 2024

Finance minister Rachel Reeves announced public spending cuts to fill a 22 bln pound hole left by the old government and raise pay for teachers and doctors. She will also need to hike taxes. But a better financial picture in future years tempers her gloomy narrative.

Philips’ share-price revival is only half finished

29 Jul 2024

The Dutch medical group’s orders are finally growing again, boosting the stock by 10%. Yet Philips is still well below its 2021 peak, before a faulty sleep-aid crisis. Keeping margins high and sales rising may help, but selling the consumer unit may complete the rejuvenation.

SocGen’s valuation salvation may lie in a breakup

29 Jul 2024

The 19 bln euro French bank trades at a 60% discount to rivals – the widest gap in a decade. None of its core units are particularly attractive, making a revival tough. But selling listed holdings, worth 8 bln euros, could fund a deeper restructuring and make M&A more plausible.

Rose-colored Ray-Bans shade brand rehab realities

26 Jul 2024

EssilorLuxottica is paying $1.5 bln for Supreme, whose cachet suffered under Vans owner VF. Streetwear strays from the buyer’s eyewear expertise and the imputed return on capital looks modest. American Apparel also serves as one of many cautionary tales on fashion after it frays.

Paris Olympics warrant medal for budget restraint

26 Jul 2024

The French capital has forked out $9 bln on the Games, but compared to some previous hosts the cost overruns have not been excessive. Pre-existing infrastructure helped. Given France’s political ructions and high deficits and debt, such relative sangfroid is well timed.

Consumer titans have Covid-era issue, in reverse

26 Jul 2024

In the pandemic, Nestlé and Unilever’s higher prices were accompanied by falling sales. Now they are tempting consumers to buy more products, but prices are harder to budge. One issue hasn’t changed: the giants’ vulnerability to cheaper and healthier eating habits.

Anglo American has a job to exit post-BHP hole

25 Jul 2024

The $38 bln miner unveiled better-than-expected half-year earnings. But after fending off his Australian suitor, Anglo boss Duncan Wanblad has to give impatient investors good news on his self-help plans. Coal and diamond headaches make that increasingly hard to do.

Carmakers drive efficiency hopes into a ditch

25 Jul 2024

The shares of carmakers Nissan and Stellantis fell around 7% after weak results. The tough US market is hurting sales, erodes the European group’s high margins and hinders its Japanese peer’s turnaround. Unsold cars and cautious consumers mean any recovery will take time.

UMG pays steep price for platform addiction

25 Jul 2024

The $42 bln music group’s shares sank by more than 25% on Thursday, falling below their 2021 IPO. Lower-than-expected growth in subscription revenues underlines the company’s painful dependence on pricing decisions made by big players like Amazon or Apple.

Reckitt gives weak scrub to valuation stain

24 Jul 2024

The $40 bln Dettol maker is selling cleaning brands and pledging to exit its baby milk unit. The result should be a leaner company and less depressed share price. But the lack of a clear timeline limits the benefit and leaves investors fretting over infant formula litigation.

Euro-banks offer glimpse of possible bad-debt wave

24 Jul 2024

Deutsche upped its forecast loan-loss charge, contributing to a 7% share-price fall. BNP’s default provision spiked, and UniCredit’s has too in Germany. Most of the bad news relates to just a few specific corporate clients. But there will be more if rates stay higher for longer.