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☆ Bank rescue real estate turns from dowry to downer
▼ + stars: | 2023-03-30 | by ( Aimee Donnellan | ) www.reuters.com time to read: +3 min

Unlike many banks which got into trouble back in 2008, the Swiss lender has flogged much of its prime real estate. In the last financial crisis prime real estate played a big part of bank rescues. When Barclays (BARC.L) bought Lehman Brothers’ U.S. capital markets business in September 2008 the deal included the bankrupt investment bank’s headquarters. Today there is less real estate underpinning bank values. For buyers preparing to rescue embattled banks, real estate has turned from a dowry to a downer.

☆ Adidas adds risk by tripping over its sneakers
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 29 (Reuters Breakingviews) - Adidas (ADSGn.DE) is having a hard time keeping its feet out of its mouth. On Wednesday, the $28 billion sneaker maker withdrew a trademark objection to Black Lives Matter over its use of three stripes in its logo 48 hours after filing it. The timing of Adidas’s objection looks tin-eared. It could have devised a partnership arrangement with Black Lives Matter that featured both brands. Trying to pick a fight with an organisation popular with young consumers shows that Adidas’s biggest risk is its mouth.

☆ Easy Diageo succession belies new CEO’s hard job
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +2 min

On Tuesday, the 80 billion pound maker of Guinness and Don Julio tequila announced that Chief Operating Officer Debra Crew would replace CEO Ivan Menezes in July. Menezes has been gunning for 5%-7% annual revenue growth and a 6%-9% annual increase in operating profit over the next three years. The company operates with a 31% operating profit margin, higher than its closest rival Pernod Ricard (PERP.PA), which runs on 29%. With the price of staff, ingredients and packaging soaring, cost cutting will be hard to pull off. Diageo’s smooth succession may lay the path for a bumpy road.

☆ Tui’s pandemic payback sets path for takeoff
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +2 min

BRUSSELS, March 24 (Reuters Breakingviews) - Tui’s (TUI1n.DE) 1.8 billion euro capital raise releases it from government clutches and sets it up for brighter skies. The travel operator said on Friday it plans to issue new stock to raise 1.8 billion euros, at the high end of the 1.6 billion to 1.8 billion euros flagged in December by Chief Financial Officer Mathias Kiep. Like many travel companies Tui required funds to keep it afloat during the pandemic when holidays were cancelled and flights were grounded. The 2.7 billion euro company received a staggering 4.3 billion euros of German state aid during the Covid-19 outbreak and is repaying much of the remaining 2.6 billion euros of debt with its fresh funds. Tui’s revenue is expected to soar by over 17% this year to top 19 billion euros, according to Refinitiv estimates.

☆ Crowds swarm Art Basel Hong Kong as galleries report sales bonanza
▼ + stars: | 2023-03-23 | by ( ) www.reuters.com time to read: +2 min

[1/3] An installation titled "Calligraphic Wig" by Daniel Knorr is displayed at Art Basel in Hong Kong, China, March 23, 2023. Art Basel Hong Kong is one of the first big events the city has held since dropping its COVID-19 mask mandate this month. City authorities are welcoming the art fair as they try to reinvigorate the economy and promote Hong Kong as a vibrant cultural hub. Teresa Choi, a visitor from Macau, said Hong Kong was much busier than during COVID times. "Hong Kong has always been the international financial hub for Asia ... Travellers are regaining their confidence about Hong Kong and the economy and want to come."

☆ Credit Suisse rescue sends shockwaves far and wide: podcast
▼ + stars: | 2023-03-23 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, March 23 (Reuters Breakingviews) - The ailing Swiss lender was saved by UBS with a $3 bln takeover. In this Viewsroom podcast, Breakingviews columnists debate why the deal pushes up bank funding costs, how the new mega-lender affects Switzerland’s financial system, and why bank deposits are becoming less reliable. Listen to the podcastFollow @aimeedonnellan on TwitterSubscribe to Breakingviews’ podcasts, Viewsroom and The Exchange. Editing by Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Syngenta’s weakening crops may dim IPO prospects
▼ + stars: | 2023-03-22 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 22 (Reuters Breakingviews) - Syngenta’s earnings hit comes at an unfortunate time. Yet a 25% fall in fourth-quarter EBITDA may dim owner ChemChina’s hope for a bumper valuation. Valued on the same 9.2 times multiple as Corteva (CTVA.N), the business may command a valuation of less than $50 billion. In 2022, Syngenta reported the lowest EBITDA growth and margin of its three main rivals: Corteva, Bayer (BAYGn.DE) and BASF (BASFn.DE). They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Carlsberg CEO’s big job is to keep glass steady
▼ + stars: | 2023-03-17 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 17 (Reuters Breakingviews) - Carlsberg’s (CARLb.CO) new boss is unlikely to tinker with the company’s corporate recipe. The $21 billion Danish brewer on Thursday named Jacob Aarup-Andersen to replace outgoing Chief Executive Cees ’t Hart. A veteran from a rival brewer might have been better placed to introduce new products, and adapt to new industry trends. However, the new boss’s finance pedigree and track record managing businesses suggests that his main job will be to implement the group’s current strategy. It aims to increase revenue by 3% to 5% annually until 2027 and boost operating profit growth above that level.

☆ Canada petrol king shows belated faith in own plan
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 16 (Reuters Breakingviews) - Alimentation Couche-Tard (ATD.TO) is expanding its empire of petrol station rest stops. On Thursday, the $44 billion Canadian gas station giant said it would buy some of TotalEnergies’ (TTEF.PA) European assets for 3.1 billion euros. The swoop is also a sign that Couche-Tard is more confident in its own business model than in the recent past. Back then, it seemed Couche-Tard was looking to diversify its empire of highway rest stops. But if EV battery power or home-charging facilities improve, Couche-Tard’s business model may not stack up.

☆ SVB’s collapse casts long and global shadow: podcast
▼ + stars: | 2023-03-16 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, March 16 (Reuters Breakingviews) - The US bank’s failure sparked a mass selloff in bank stocks. In this Viewsroom podcast, Breakingviews columnists debate the causes of investor jitters, the long-term implications of intervention by governments and regulators, and the latest concerns about Credit Suisse. Listen to the podcastFollow @aimeedonnellan on TwitterSubscribe to Breakingviews’ podcasts, Viewsroom and The Exchange. Editing by Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Kanye West blunder puts Adidas in play
▼ + stars: | 2023-03-15 | by ( Aimee Donnellan | ) www.reuters.com time to read: +4 min

After a disastrous breakup with the musician formerly known as Kanye West, the $28 billion sneaker maker is slashing dividends and heading for the first loss in decades. Last year, Adidas spent 12.3% of its 22.5 billion euros of revenue on marketing and similar expenses. If it were to return to the 13.9% it allocated in 2015, it would add 2 billion euros of extra costs over the next five years, Breakingviews calculations show. Swooping on Adidas would allow the U.S. athleisure giant to dominate sportswear by servicing women and men across a wide spectrum of categories. Shares in Adidas were down 2.4% at 144.50 euros by 0859 GMT on March 15.

☆ China’s unambitious goals reflect growing worries: podcast
▼ + stars: | 2023-03-09 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, March 9 (Reuters Breakingviews) - The People’s Republic is hoping to deliver 5% GDP growth this year and is creating a new finance watchdog. In this Viewsroom podcast, Breakingviews columnists discuss how jitters in real estate could hamper a recovery and how regulatory changes could create bigger problems. Listen to the podcastFollow @aimeedonnellan on TwitterSubscribe to Breakingviews' podcasts, Viewsroom and The Exchange. Editing by Peter Thal Larsen and Katrina HamlinOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ New Carlsberg CEO’s task: stay ahead of Heineken
▼ + stars: | 2023-03-07 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 7 (Reuters Breakingviews) - Carlberg’s (CARLb.CO) new boss may struggle to maintain its newfound fizz. The $21 billion Danish brewer revealed on Tuesday that Chief Executive Cees 't Hart will retire after eight years at the helm. The company now trades at nearly 11 times its expected EBITDA for 2023 according to Refinitiv data, a premium to arch rival Heineken (HEIN.AS). In 2022, Heineken grew revenue in its Asia-Pacific market by 70%, while Carlsberg’s sales in the region rose by 22%. If the new boss can’t keep pace, Carlsberg shareholders will face a painful hangover.

☆ UK’s Brexit fix has perks for all sides: podcast
▼ + stars: | 2023-03-02 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, March 2 (Reuters Breakingviews) - Prime Minister Rishi Sunak agreed a trade deal with the European Union this week. In this Viewsroom podcast, Breakingviews columnists explain what the accord will mean for future relations between Britain and the 27-nation bloc and how Northern Ireland may get an economic boost. Listen to the podcastFollow @aimeedonnellan on TwitterSubscribe to Breakingviews’ podcasts, Viewsroom and The Exchange. Editing by Thomas ShumOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ UK housebuilders face slow and painful refurb
▼ + stars: | 2023-03-01 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 1 (Reuters Breakingviews) - UK housebuilding is facing a bleak future. In previous slowdowns, the UK’s Conservative Party bailed out the sector with packages like Help to Buy, which subsidized mortgages to help buyers. After Wednesday’s 9% share price decline, it’s share price is now worth less than half of what it was before the outbreak of Covid-19. With little help on the horizon, UK housebuilders face a slow and painful rebuild. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ IAG takeoff weighed down by debt dilemma
▼ + stars: | 2023-02-24 | by ( Aimee Donnellan | ) www.reuters.com time to read: +3 min

Its $11 billion net debt pile, a legacy of an epic collapse in revenue during the pandemic, is tangibly more than its $9.4 billion market capitalisation. While Friday’s 2022 results showed operating profit of only 1.22 billion euros, well below the 3.3 billion euros it delivered in 2019, the last few years have seen big operating losses. Operating profit could be as high as 2.3 billion euros in 2023, according to company forecasts. More holidaymakers mean revenue last year was over 23 billion euros, compared to less than 8.5 billon euros in 2021. IAG announced an operating profit of 1.22 billion euros for 2022 and forecast 2023 operating profit in the range of 1.8 billion euros to 2.3 billion euros.

☆ Wood Group has grounds to face down Apollo
▼ + stars: | 2023-02-23 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 23 (Reuters Breakingviews) - John Wood Group (WG.L) has a seriously pushy bidder. While the latest 230 pence a share one represents a 50% premium to Wood Group’s closing price on Wednesday, the target has reasonable grounds to say no. Wood Group’s latest offer implies only around seven times on the same metric. Admittedly Wood Group shares are hovering around 200 pence, far below Apollo’s offer. Still, if he’s right and Wood Group trades on the same multiple at its peers, it would be worth nearly 3.8 billion pounds.

☆ Ukraine’s long shadow on business and geopolitics: podcast
▼ + stars: | 2023-02-23 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Feb 23 (Reuters Breakingviews) - It’s been 12 months since Russian President Vladimir Putin’s bloody invasion. In this Viewsroom podcast, Breakingviews columnists discuss how energy markets have changed for good, how defence companies are benefiting, and another potential conflict troubling CEOs and investors. Listen to the podcastFollow @aimeedonnellan on TwitterSubscribe to Breakingviews’ podcasts, Viewsroom and The Exchange. Editing by Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Fresenius takes tentative step on road to breakup
▼ + stars: | 2023-02-22 | by ( ) www.reuters.com time to read: +2 min

On Tuesday evening the $17 billion German medical technology company said it will relinquish control of its listed dialysis firm, Fresenius Medical Care (FMEG.DE), in order to focus on its core businesses. Fresenius currently controls the dialysis business and can appoint its board despite only owning a 32% stake, thanks to its arcane German legal structure. The news sent Fresenius Medical Care stock up around 12% on Wednesday. His core intravenous drugs and hospital operating divisions should be worth 20 billion euros each, according to the UK bank. That implies a total value for the group including debt of 48 billion euros, far above its current 40 billion euro enterprise value.

☆ Hotels share revival shrugs off two crises
▼ + stars: | 2023-02-21 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 21 (Reuters Breakingviews) - Hotel groups are in restoration mode. Chief Executive Keith Barr reckons the year ahead will continue to see strong demand, boosted by China’s re-opening. In 2019, the People’s Republic accounted for around 10% of the hotel market, and its citizens spent over $250 billion on international tourism, according to the World Tourism Organisation. Yet Covid-19 may still hurt spending in the Middle kingdom, and geopolitical tensions may lead to fewer Chinese people travelling. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ NatWest calls time on UK banks’ rate-hike party
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +2 min

But NatWest Chief Executive Alison Rose has brought that excitement to an end. It’s surprising that Rose thinks lending margins have maxed out already. Higher rates take a while to feed into revenue because so many borrowers have long-term or fixed-rate debt, which reprices slowly. That would be a cause for celebration among households and firms with spare cash, but it might bring the bank share-price party to an end. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ The big bet against Japan’s new central bank boss: podcast
▼ + stars: | 2023-02-16 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Feb 16 (Reuters Breakingviews) - The world’s third largest economy picked Kazuo Ueda to be governor of the Bank of Japan. In this Viewsroom podcast, Breakingviews columnists discuss the challenges facing this outsider as international investors continue to bet against the BOJ keeping rates low. props.value : props.error;Listen to the podcastFollow @aimeedonnellan on TwitterSubscribe to Breakingviews' podcasts, Viewsroom and The Exchange. Editing by Katrina HamlinOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ New Adidas CEO throws Yeezy in kitchen sink
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +2 min

But if Adidas decides to write off the Yeezy inventory altogether, it will lose another 500 million euros. In the worst scenario, with one-off costs in 2023 of up to 200 million euros, the $27 billion sportswear maker expects to report a 700 million euro operating loss this year. The company had already announced that ending its partnership with the musician would shrink its net income by 250 million euros in 2022. Shareholders however seem surprised that Adidas might not try to repurpose the trainers, instead of writing off the inventory. Yeezy is not the only problem for Adidas.

☆ Europe is playing catch-up in green subsidy race: podcast
▼ + stars: | 2023-02-09 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Feb 9 (Reuters Breakingviews) - The U.S. unveiled $369 bln of climate subsidies for consumers and manufacturers. In this Viewsroom podcast, Breakingviews columnists explain why Brussels may need to launch a similarly ambitious plan or risk losing its share of jobs of the future. Listen to the podcastFollow @aimeedonnellan on TwitterloadingEditing by Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Fertiliser boom reveals food security price power
▼ + stars: | 2023-02-08 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 8 (Reuters Breakingviews) - A top fertiliser maker has emerged as the surprise winner of Europe’s energy crisis. Food security concerns helped Yara weather the crisis. That and a war in potash and wheat exporter Ukraine created scarcity, which drove up the price of its much-desired products. Before Wednesday’s 5% share bump, it traded on just 4 times its expected 2023 earnings. Now that Yara has proved it can weather a major crisis, this gap is likely to narrow.

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