CNBC Business | Business Round-Up

Business Round-Up

A look at what’s happening around Europe

A look at what’s happening around Europe

LUXURY

Puma runs up PPR profits

The good times continue at PPR. The French group reported an 8% rise in profits in the second-half of 2007, thanks to its acquisition of a controlling stake in fashion-conscious sportswear maker Puma and star performer Bottega Veneta. Full-year net income rose 35% to €922m. Last year PPR bought two-thirds of Puma which has just appointed hot UK designer Hussein Chalayan as creative director. Increased sales of Bottega Veneta and other luxury brands helped offset the effect of the dollar’s 9.5% drop against the euro, which cut into the company’s revenue and profit from the US and Japan. Bottega Veneta’s strong performance helped propel Gucci Group’s operating profit up 29% to €731m. On the flipside, operating losses at Yves Saint Laurent – which has just relaunched its flagship Paris store – fell to €32m from €49m.

AUTOMOTIVE

Geneva’s green gridlock

The 78th Geneva Motorshow showcased a global car industry in upheaval, caught between a hostile EU and the vagaries of national transport policies. While “green” innovations keep sprouting neither the industry nor governments can agree which are the best. “Green” solutions unveiled in Generva included: tweaks of the existing internal combustion engine (BMW); advanced fuel cell solutions (Honda); methane-powered two-cylinder cars (Fiat); hybrid technology (Toyota); weight reduction (Mazda) and improved diesel drive trains, hybrids and biofuels (PSA Peugeot Citröen). Elsewhere luxury brands continued their U-turn to address CO2 emissions. BMW has adopted the slogan “Efficient Dynamics”, while even Bentley unveiled a document on “Wellto- Wheel” emissions, arguing that it could meet EU targets if the entire life cycle of the car and its fuel were taken into account.

ENERGY

ENI fires up Venezuela

Italian oil and gas group Eni plans to invest €2.6bn in Venezuela, making the biggest commitment by a western company since President Hugo Chávez began to take control of the country’s oil industry in 2005. Eni has reached a deal in principle to develop an area of the Orinoco belt – possibly the world’s largest oil reserve – with Venezuela’s state oil company PDVSA. It is a gamble for Eni: if drilling is successful the company will gain access to Venezuela’s reserves ahead of European and US competitors, in return for bailing out Venezuela’s ailing oil industry. Eni has a strategy of being among the first big oil companies to invest in politically risky countries. It is the biggest foreign oil company in Libya, where it has operated since 1959.

HOSPITALITY

More Accor growth

Accor, Europe’s largest hotels group, has reported its operating profit for 2007 was up 25% and that it plans to return a further €750m to shareholders. The Parisbased company behind the Sofitel, Ibis and Mercure brands said pre-tax profit rose to €907m from €727m in 2006. The company had said in January it expected a pretax operating profit of “slightly above €900m”. In a statement, Accor sought to calm fears that a US-led economic slowdown will harm its traditionally cyclical business, fears which have led to a sharp share sell-off. The company has also been heavily investing in Asia, particularly in China.