CNBC Business | BUSINESS ROUND-UP

BUSINESS ROUND-UP

Company digest

A look at what’s happening around the globe

RETAIL

Britain’s organic growth

The Soil Association’s latest Organic Market Report says that annual spending on organically produced food, cosmetics and clothes in the UK –Europe’s biggest market – has reached the £2bn (€3bn) milestone. The boom has extended from food to cosmetics, with at least 200 natural beauty products launched this year compared to 73 during 2006. Analyst firm Organic Monitor estimates the worth of the natural and organic cosmetics market as £140m.

AUTOMOTIVE

Porsche zooms ahead

Porsche’s revenues are set to double in the next five years, from $10bn (€7.3bn) this year to $21.3bn in 2012, according to analyst Morgan Stanley, while car sales will double over the same period from 99,000 to nearly 200,000. For the fiscal year ended 31 July, analysts forecast net profit of $2bn, up 33%, and an operating margin of 19.8%. Porsche has reversed its fortunes over a decade by outsourcing production elements of the entry-level Boxster to Finland’s Valmet Automotie and by co-developing the Cayenne SUV with Volkswagen. Porsche is adding a new four-door coupe, the Panamera in 2009, for which it will share parts, electronics development, and production facilities with Volkswagen.

AVIATION

City eyes runway success

London City Airport has applied for planning permission to increase take-offs and landings by around 50% by 2010, as it takes advantage of rising demand from business travellers and private jet users. Passenger numbers have been rising rapidly this year, with increases of more than 20% during several months, as business travellers from Canary Wharf and the City of London financial districts take advantage of the growing network of European and domestic short-haul destinations and the opportunity to avoid the increasing congestion at the main London airports.

MANAGEMENT

Branson cedes Virgin territory

Sir Richard Branson has stepped back from day-to-day management of Virgin, handing over executive control of his empire to his deputies. The 57-year-old billionaire has begun referring to himself publicly as the “founder” of Virgin, as he focuses on new business development. Branson has been winding down his hands-on involvement in Virgin for several years, but has now severed executive control completely.

While he remains chairman of Virgin Group, Stephen Murphy, an accountant who has been with Virgin since 1993, is now the Group’s chief executive and chairman of Virgin Atlantic. Gordon McCallum, a former consultant at McKinsey, is responsible for new ventures.

BRANDING

Once-hot US brands feel chill

Coca-Cola, McDonald’s and Nike are among the iconic American brands that suffered year-on-year declines in their “likeability” among global consumers, according to a new brand perception study from market research firm GfK Roper Consulting. Last year’s report showed these brands had improved their appeal to consumers in markets outside of the US, but souring sentiment toward US brands, especially among consumers in developing markets in Asia, caused an abrupt reversal from the previous year’s gains.

ENERGY & ENVIRONMENT

Power launching

French president Nicolas Sarkozy hailed the 18-months-in-the-making €90bn merger between Franco-Belgian energy group Suez and its rival Gaz de France. The resulting company, GDF Suez, is the world’s third-largest listed power company, controlled by the French state, directly and through state-owned companies. The new group’s market value ranks it behind Electricite de France SA, the French state-controlled operator of 58 nuclear reactors, and Germany’s E.ON.

FINANCE

Ethics triumph in short term

Returns from ethical funds have surged ahead of those from traditional funds – but only in the short term, according to the latest survey by Investment, Life & Pensions Moneyfacts. The survey shows that the average ethical fund has delivered superior returns to both non-ethical funds and the FTSE 100 index over one and three years. So-called “green” funds have typically returned 18.36% over one year and 57.23% over three years. Non-ethical funds have risen 13.73% and 52.39% over the same periods, while the FTSE 100 increased 13.28% and 48.02% respectively.

TELECOMS

India’s new call centre

Nokia Siemens Networks is to invest up to $100m in India over the next three years in a move to strengthen its grip in one of the fastest-growing markets for telecoms equipment. The investment includes setting up a manufacturing plant for wireless network equipment in the southern state of Tamil Nadu and establishing offices throughout India.

LUXURY

Hermès luxuriates despite weak dollar

French luxury goods company Hermès International reported a first-half net profit of €128.1m, up 9% on €117.5m a year earlier. The company said a weak dollar had had an “appreciable impact” on net profit, which would otherwise have risen 20% at constant exchange rates. It cited its ad campaigns as one reason for continued growth. Sales in the first half of 2007 rose 2.9% to €721.1m.

BREWING

Muted cheer for dear beer

Heineken, the world’s fourth-largest brewer, reported operating profits of €906m for the first half of the year, a 25% rise on the 2006. While volumes rose 30%, the Dutch firm admitted it had been “a little too bullish” in its goal of selling 1 million hectolitres, blaming higher prices and the “mixed weather” in Europe at the beginning of the summer. Brewers are facing soaring malt costs, the result of poor harvests and demand from emerging markets and biofuels producers.

Email Story

Print Page

October 2007

News & Views

BUSINESS ROUND-UP

Sectors:

Related Stories:

NEXT

Still Plenty of Fizz

Radar

Radar

Comments

Post a new comment

CNBC MAGAZINE

INTERACTIVE

ARCHIVES