Company news in brief

Lindt posts on-target sales despite US slowdown

Swiss chocolate maker Lindt & Spruengli yesterday said its organic sales rose 5.1% in 2018, in line with its "around 5%" goal despite being hit by a slowdown in North America. Reported sales, which include currency swings, rose 5.5% to 4.31 billion Swiss francs (US$4.39 billion), as "strong increases" in its Europe and the Rest of the World regions compensated for problems in the United States, Lindt said. The maker of Lindor chocolate balls and gold-foil wrapped Easter bunnies said its sales growth in North America slowed to 2.8% for 2018, down from 4% in the first half of the year. The market environment "remained very challenging" with saturated chocolate markets in Europe and the United States, and retailers also faced rising price competition, Lindt said. Chocolate makers have been grappling with slowing demand for their sweet treats, particularly in the US market where Lindt has needed more time to bring the Russell Stover brand up to speed. – Nampa/Reuters



Volkswagen, Ford to announce automotive alliance

Volkswagen AG and Ford Motor Co were expected to unveil an alliance yesterday that combines forces on commercial vehicles and is likely to expand into joint development of electric and self-driving technology, moves meant to save them billions of dollars. Ford and VW would announce their partnership against the backdrop of the Detroit car show, VW chief executive Herbert Diess told reporters on Monday. The companies in recent months have discussed cooperating in vans and other commercial vehicles, and have said that any expanded alliance would not involve a merger or equity stakes. The two companies have been exploring closer cooperation as trade frictions force carmakers to rethink where they build vehicles for Europe, the United States and China. The expanding alliance highlights the growing pressure on all global car manufacturers to manage the costs of developing electric and self-driving vehicles, as well as technology required to meet tougher emissions standards for millions of internal combustion vehicles they will sell in the years to come. Slowdowns in the world's largest car markets - China and the United States - have ratcheted up the pressure to cut costs. – Nampa/Reuters



Airbus steps up pressure on suppliers over Canadian jet

Europe's Airbus is ratcheting up pressure on suppliers like United Technologies to cut costs for its Canadian-developed A220 jetliner as it expands factory facilities to cope with anticipated demand for the former Bombardier model. Long seen as low on the list of priorities for top suppliers as Canada struggled to break into the main airliner market, the A220 now has the clout of the world's second largest planemaker behind it after Airbus bought the loss-making project last year.

Philippe Balducchi, head of an Airbus-led venture which took over production last July, said the planemaker was looking for a "significant double-digit" percentage reduction in costs but played down suggestions that it could slash costs by half. Speaking at the Mirabel airplane plant outside Montreal which Bombardier now shares with Airbus, Balducchi indicated the bulk of the reduction in costs would come from the supply chain as Airbus uses its greater clout in negotiations for parts.

Cutting costs is key to lifting the programme out of the red while avoiding a repeat of reportedly low prices that fanned trade tensions between the United States and Canada in 2017.

Airbus rival Boeing claimed Bombardier sold airplanes to Delta at unfairly low prices but later lost its complaint. – Nampa/Reuters



HSBC settles FX deals worth billions on blockchain

HSBC has settled US$250 billion worth of forex trades using blockchain in the last year, it said on Monday, suggesting the heavily hyped technology is gaining traction in a sector until now hesitant to embrace it. The bank has settled over three million forex trades and made over 150 000 payments since February using blockchain, it said in a statement. HSBC would not give data on forex trades settled by traditional processes, saying only that those settled by blockchain represented a "small" proportion. Still, the data marks a significant milestone in the use of blockchain by mainstream finance, which has until now been reluctant to start using the technology at any scale.

Blockchain is a shared database that can process and settle transactions in minutes. Originally conceived to underpin the cryptocurrency bitcoin, the technology does not require third-parties for checks and its entries cannot be changed, making it highly secure.

Banks and other financial firms have invested hundreds of millions of dollars in the technology, hoping it will simplify and slash costs in processes from settlements to payments. – Nampa/Reuters



Shell teams up with pension fund to bid for Eneco

Royal Dutch Shell and Dutch pension fund manager PGGM are considering a joint bid for Dutch energy company Eneco, which analysts estimate to be worth around 3 billion euro (US$3.4 billion).

The 53 municipalities that own Eneco, which is heavily invested in sustainable energy projects, said in December they will sell it via an auction later this year.

Shell and PGGM, who gave no financial details, said they were looking for "a long term commitment" with Eneco, which is expected to appeal to energy companies that want to increase their exposure to renewable energy production.

The decision to sell Eneco in an auction ended a heated battle between its board and shareholders, who wanted to cash in on their stakes. The board had said it would prefer a stock market listing or partial sale that would ensure continuity as a renewables-oriented company. – Nampa/Reuters