Money Buzz! Europa

Tag: coronavirus

  • How Covid-19 crisis will impact economies in Italy and Spain

    How Covid-19 crisis will impact economies in Italy and Spain

    According to Coface forecasts, Spain and Italy will be among the economies hardest hit by COVID-19, contracting by 12.8% and 13.6% respectively in 2020.

    Corporate insolvencies are expected to increase by 22% in Spain and 37% in Italy by 2021, relative to 2019 levels.

    For 2021, Coface forecasts that Spain and Italy’s GDP will rebound by 10.2% and 8.9%, leaving the economies 3.9% and 5.9% below 2019 levels.

    Higher prevalence of vulnerable enterprises in Italy with the spectre of zombie firms

    In order to assess the potential impact of this GDP contraction on company balance sheets, Coface ran simulations on the evolution of corporate solvency, using data from the Spanish and Italian central banks that accounts for differences across sectors and firm sizes.

    Even though interest rates are extremely low, corporate over-indebtedness is associated with depressed private investment. As a result, the COVID-19 crisis could exert durable downward pressure on a country’s growth potential, accelerating the “Japanization” of the eurozone.

    With this in mind, the balance sheets of Spanish and Italian companies should be analysed more closely. Examining the distribution of debt and liquidity in the corporate sector in Southern Europe should help to identify pockets of vulnerability.

    The current financial situation of companies in Spain and Italy is healthier than on the eve of the 2009 global financial crisis.

    Since then, Spanish companies have managed to significantly reduce their debt by 20 percentage points, reaching 37% of their assets in the third quarter of 2019.

    Italian companies have also improved their financial situation since the 59% peak in Q4 2011, albeit to a lesser degree. With a debt ratio of 50%, businesses in Italy are now the most indebted among the major European economies.

    The growing mismatch between financing and investment can be indicative of a high prevalence of “zombie” firms in Italy – companies steeped in debt that will not be able to sowing the seeds of future growth.

    Sectors at risk: automotive, construction, and retail

    Coface expects the vulnerability of firms to differ according to their sectors and size, not only in terms of the intensity of the shocks, but also given the pre-coronavirus fragility of their balance sheets.

    The major car manufacturers could be in difficulty because of their habit of keeping little liquidity: at the end of 2018, cash reserves as a percentage of sales were only 2.7% in Italy and 0.5% in Spain.

    As for the retail and construction sectors, with high leverage and low projected interest coverage rates, they appear particularly vulnerable, as do Italy’s small textile manufacturers.

    Coface observes a higher prevalence of potentially vulnerable companies in Italy. In most cases, this can be explained by lower initial cash flow, lower profitability, and slightly slower cost adjustments.

    In this context, many companies would survive only at the cost of substantially higher levels of debt.

  • Sharry launches touch-free elevator system for COVID-safe buildings

    Sharry launches touch-free elevator system for COVID-safe buildings

    Sharry, a Czech company, has developed a special solution for touch-free elevator control. This innovation contributes to countering the spread of COVID-19 and other diseases.

    Ondřej Langr, Sharry’s product manager, describes how this product works: “When a person passes through turnstiles on the ground floor, our system automatically calls an elevator set to stop on the floor where they work. If they miss the elevator or want to go to a different floor, they can simply use their mobile phone to choose the floor number”.

    ”Users can thus control the elevator from their mobile phones and avoid using its buttons, which in normal operation are touched several times a day by virtually every employee and visitor to the building. “We are developing this new technology in cooperation with major elevator suppliers and based on the requirements of our customers all over the world,” adds Ondřej Langr.

    The touch-free elevator system works uses special sensors – Bluetooth low energy beacons – located by the elevators.

    This proximity device runs on a single battery for up to four years and broadcasts its identifier to nearby portable electronic devices such as smartphones or smart watches.

    “When a user approaches the elevator beacon, the system automatically sends a push notification to their phone’s display, through which they can call the elevator. Their ‘favourite floors’ that they visit most often will be displayed, or they can choose a different one,” says the Sharry product manager.

    The new touch-free elevator feature is fully integrated with Sharry’s mobile access system.

    This feature will be available in Q3/2020 in the Sharry Workplace product line, and will be available for the Apple Watch in Q4/2020.

    “The world has changed. We must prepare for the fact that even after the coronavirus pandemic subsides, efforts will continue to eliminate contact with other people and things as much as possible. The future is touch-free. But touch-free elevator control is no science fiction, it’s already here,” points out Josef Šachta, Sharry’s CEO.

  • NoSoapCompany wants smart hand sanitation units in public buildings

    NoSoapCompany wants smart hand sanitation units in public buildings

    The Dutch NoSoapCompany has launched a pan-European campaign to make smart disinfectant dispensers a permanent fixture in public buildings.

    With Europe coming out of lockdown and businesses and institutions reopening, it is of critical importance that customers and employees are protected against infection from the Covid-19 virus.

    Both the World Health Organization and the Centre for Disease Control and Prevention advocate hand hygiene as the single most efficient and cost-effective way to limit the spread of diseases.

    How NoSoapCompany high-tech hand sanitation unit works

    The company has launched a high-tech hand sanitation unit, HYiGO that connects to the cloud via IoT.

    The device sends a signal when the disinfectant needs to be replenished or when the battery needs to be charged. It also provides relevant usage-data which can provide entrepreneurs and institutions with valuable insights.

    Until recently, the smart dispenser was primarily found in hospitals and institutions such as the UMCG and the Martini Hospital, but also at Schiphol Airport, the WTC and The Hague’s Malietoren.

    The NoSoapCompany has expanded its production capacity in recent months to be able to deliver the dispenser throughout Europe.

    In the coming weeks, 2000 new devices will enter the European market.

  • Companies will return with only 40% of the employees back to the office

    Companies will return with only 40% of the employees back to the office

    With the ease of travel restrictions imposed by the Covid-19 pandemic, companies begin to resume their activity in the headquarters located in office buildings, but with only 40% of employees in a first phase, according to a survey of real estate consulting company Cushman & Wakefield Echinox.

    Thus, if during the period of isolation at home imposed by the authorities, only 4% of the employees continued their activity from the office, the occupancy degree of office buildings will ten times increase in the next period.

    However, more than half of the employees working in the services area will continue, at least for a while, to work from home, according to the survey applied between May 21 and 29 on a number of 33 companies in Bucharest and Cluj with a a total of over 17,000 employees working in office buildings.

    Half of these companies have returned or will return to the office with a significant share of employees during June, almost 20% of companies scheduled their return in September, while 13% of the surveyed companies, especially small and medium, intend to return to the office only at the beginning of next year.

    In this context, 30% of the interviewed companies say that in the next 12 months they will need less office space, 61% of the companies cover their office needs with the already contracted spaces, while 9% of the companies expect to need extra space.

    The stock of modern offices in Bucharest and Cluj reaches almost 3.5 million square meters, hosting over 300,000 employees in various fields, such as IT, telecom, financial services (banks – insurance), professional services (lawyers – consultants), media, etc.

  • CFOs in Romania expect massive drop in business

    CFOs in Romania expect massive drop in business

    The perception of the CFOs in Romania regarding the evolution of the main financial indicators of their companies has changed dramatically in only several months as a result of the COVID-19 pandemic, according to CFO Survey Romania, conducted by Deloitte in April-May 2020 based on opinions expressed by CFOs in Romania.

    Their main concern for this year is the drop in demand, as 73% of the survey participants estimate a decrease of the internal demand, and 45% of them, of the external demand.

    The share of those who expect revenues reduction is 67%, while at the end of 2019, 78% of them estimated increases in revenues, according to the survey.

    In this context, the CFOs’ main strategy for the next 12 months is cost reduction (58%), distantly followed by ensuring cash flow (16%) and organic growth (13%).

    Only 9% of respondents estimate increase in investment over the following 12 months, compared to 39%, at the end of 2019. The share of those who anticipate a reduction of the number of employees is 44%.

    Three quarters of the survey participants (75%) are pessimistic regarding the near future, as many of them expect their company’s financial prospects to be strongly affected by the economic crisis generated by the pandemic.

    As for the measures announced by Romania to support the local economy in the fight against the COVID-19 pandemic, 58% of the CFOs consider they are less effective than the ones announced by other European states.

    The main measures implemented by companies in the context of the COVID-19 outbreak were work from home (87%) and renegotiation of ongoing contracts (73%).

    As a result, companies in Romania saw as a priority the improvement of their IT systems to allow work from home (over 35%). Also, 28% of the respondents say they focused on the digital transformation in sales, customer care and supply chain.

  • The number of visitors in malls could return to normal in December

    The number of visitors in malls could return to normal in December

    Shopping centers are currently finalizing preparations for reopening, starting on June 15, to ensure compliance with the safety and social distancing measures.

    In total, investments in all equipment, supplies and staff needed to implement these measures exceed half a million euros for large shopping centers, according to Colliers International consultants.

    Shoppers will gradually resume their pre-pandemic habits, and traffic in the malls could return to normal during the Christmas season.

    Non-food retailers were among those most affected by the pandemic

    Non-food retailers were among those most affected by measures taken during the state of emergency to prevent the spread of coronavirus.

    The closure of shopping centers has determined retail tenants to revise their revenue expectations for this year, with 45% expecting a drop of more than 30% and 39% expecting a drop of up to 30%, as showed in a study conducted in March by the retail division of Colliers International among 84 tenants and 21 owners in the retail sector in Romania.

    However, the tenants rely on the summer months to start recovering losses accumulated during the period when the stores were closed, even in the context of an estimated number of visitors at half the level from usual periods.

    Traffic is expected to increase in the next period and could return to normal in December.

    Google data suggest a gradual recovery of the traffic in commercial and leisure areas

    Mobility statistics published by Google, based on data collected from users’ smartphones, suggest a gradual, but consistent recovery of the traffic in commercial and leisure areas.

    In Bucharest, Cluj-Napoca and Timis, pedestrian traffic in these areas was 30-40% below a regular average at the beginning of June, compared to 80% below normal levels a few months back.

    In countries where restrictions were lifted earlier, figures look somewhat better and offer hope that the gradual improvement will continue in the next period.

    Anti Covid-19 measures taken by large shopping centers

    Thus, among measures taken by large shopping centers are gates or special rooms through which the body temperature of visitors can be measured or systems for monitoring the total number of visitors at any time within the center, so as to limit access to others visitors when the maximum limit set according to the authorities is reached.

    At the same time, shopping centers are ready to constantly disinfect common areas and escalators with specialized substances or UV lamps and will provide visitors dispensers with disinfectants, and as an additional measure will opt for the introduction of fresh air from outside instead of previous procedures for recirculating air inside the center.

  • COVID-19 pandemic has reduced the market capitalisation of companies

    COVID-19 pandemic has reduced the market capitalisation of companies

    The market capitalisation of the 100 largest listed companies in the world declined by 15%, representing USD 3,9 trillion în Q1 2020, because of the COVID-19 pandemic, after an increase of 20% in March – December 2019, according to PwC’s Global Top 100 companies.

    The companies in the Oil & Gas sector were hit hardest.

    As a result of this evolution, between 31 March 2019 and 31 March 2020, for which the ranking is made, the market value of the 100 largest listed companies in the world reached USD 21.5 trillion, 2% up from the previous corresponding period.

    Energy and the financial sector, the biggest declines. At the opposite pole, utilities, technology and health

    In the first three months of 2020, all sectors declined. The most affected was oil and gas, down 37%, followed by finance by 23%.

    The smallest decreases were registered by the utilities companies, of 1%, technology, which lost 11% of the market capitalization, and by the consumer service companies, with minus 6%.

    The latter’s evolution was supported by the 16% (USD 23 billion) growth of Netflix, one of the ten companies whose market value increased during that period.

    Top 10 most valuable companies. Saudi Aramco ranks first

    Saudi Aramco joined the Global Top 100 this year having undertaken the largest IPO in history in December 2019. Saudi Aramco entered the list in first position and has retained this position ever since, with a market capitalisation at 31 March 2020 of USD 1,6 trillion.

    Saudi Aramco has thus surpassed last year’s leader, Microsoft, which is now on second place, followed by Apple.

    Even with the COVID-19 disruption, the market capitalization of Microsoft and Apple each exceeded USD 1 trillion as of March 2020. The performance of Amazon, placed on fourth place, was boosted by a surge in demand created by movement restrictions.

    The world’s top 10, made up mainly of technology and e-commerce companies, is completed by Alphabet, Alibaba, Facebook, Tencent, Berkshire and Johnson & Johnson.

    Even with the impact of COVID-19, Tesla was the biggest riser in the three months to March 2020, of 28%, at the opposite pole is Citigroup, with a decrease of 49%.

    The US continues to dominate at the regional level

    For the sixth consecutive year, the US ranks first, having more than half (57) of the companies in the top followed by Europe, with 21 companies, China and its regions, with 12 companies.

    By region, European companies in the global Top 100 experienced the most significant reduction in Q1 2020, by 25% (USD 956 billion).

    The market capitalization of American companies in the ranking decreased by 14% (USD 2.2 trillion), and that of Chinese companies by 11%. Brazil, Australia and South Africa no longer appear in the ranking, after the exit of Petrobras, BHP and Naspers.

    Unicorns value is growing

    Regarding the unicorns, the value of the Top 100 Unicorns grew by 5% to USD 853 billion as at 31 March 2020.

    The outlook for unicorns remains positive in the medium term. Some public companies have seen a surge in demand since COVID-19 took hold which has translated into valuation growth, particularly technology / technology enabled and health care businesses – sectors where unicorns are well represented.

    Similarly to the Global Top 100, the US dominates the Top 100 unicorns, representing half of the list in terms of number of companies and value, China ranks second with 26 companies and Europe is on third place, with ten companies, of which six from Great Britain and three from Germany.

  • ALRO continues the COVID-19 prevention and impact mitigation program

    ALRO continues the COVID-19 prevention and impact mitigation program

    ALRO, one of the largest vertically integrated aluminium producers in Europe, measured by production capacity, implemented additional and complementary safety measures to those introduced at the beginning of the COVID-19 health crisis.

    The access on the company’s premises is allowed after the personnel’s body temperature is checked through cameras placed at the gates’ area and the divisions’ work schedules were changed to minimise contact between employees.

    An extended Work From Home program has been implemented and additional rest breaks were introduced in special designed places according to the authorities’ guidelines and recommendations, where wearing a mask is not mandatory.

    ALRO has implemented complex protocols and procedures since the outbreak of the COVID-19 health crisis, in coordination with the central and local authorities and compliance with the recommendations of the World Health Organization for industrial sites.

    All employees received protective medical materials and equipment

    All employees received protective medical materials and equipment and were instructed on how to prevent COVID-19 infections, factory areas are cleaned, sanitized and disinfected regularly, recommendations for physical distance and hygiene measures were visually marked on the premises, plexiglass panels were installed in certain areas, and the company performes preventive real-time tests.

    From an incipient phase of COVID-19 crisis outbreak, ALRO has also implemented contingency plans simulating the case of one or more employees are infected with COVID-19, thus ensuring that the operations are not disrupted and the Company remains fully operational and delivers on time.

    ALRO supported efforts to prevent and mitigate the effects of COVID-19

    So far, the Company has also supported efforts to prevent and mitigate the effects of COVID-19 by donating over RON 440,000 and protective equipment, reflective vests and video thermo-scanners to Slatina County Emergency Hospital, the Romanian Red Cross, Olt and the International Police Association of Romania, Olt.

    Furthermore, ALRO also supported Bucharest Fundeni Hospital with RON 30,000 for the acquisition of testing equipment for medical staff and patients.

  • World Bank sees the deepest recession since the Second World War

    World Bank sees the deepest recession since the Second World War

    According to World Bank forecasts, the global economy will shrink by 5.2% this year. 

    That would represent the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870, the World Bank says in its June 2020 Global Economic Prospects.

    Economic activity among advanced economies is anticipated to shrink 7% in 2020 as domestic demand and supply, trade, and finance have been severely disrupted.

    Emerging market and developing economies (EMDEs) are expected to shrink by 2.5% this year, their first contraction as a group in at least sixty years.

    Per capita incomes are expected to decline by 3.6%, which will tip millions of people into extreme poverty this year.

    In CEE, Serbia has the slowest GDP decline this year and Croatia the biggest growth in 2021

    For the Bulgarian economy, the forecast is a decline of 6.2% for 2020 and a recovery next year to a growth of 4.3%. 

    Croatia will suffer a GDP decline of -9.3% in 2020 and a recovery of 5.4% in 2021.

    Hungarian economy will have a decline of -5.0% this year and a rise of 4.5% next year.

    Poland is in a better situation with an economic decline of -4.2% in 2020, but a slower recovery, of just 2.8% in 2021.

    For Romania, GDP will decrease by -5.7% this year and a rise of 5.4% in 2021.

    Serbian GDP will decline by -2.5% in 2020 and a recovery of 4.0% in 2021.

  • Pirelli to screen employees in Italy for Covid-19

    Pirelli to screen employees in Italy for Covid-19

    Pirelli will offer the group’s roughly 3.100 employees in Italy, the possibility of undergoing serological screening for Covid-19 aimed at further strengthening the safe restart of activities after the lockdown.

    Pirelli will offer rapid testing, through needle prick to the fingertip, and, should the result call for it, conduct at the same time venous exams and swabs as well.

    The serological screening will be carried out with the maximum level of safety inside company areas with the support of qualified health workers.

    The scheme, employee participation in which will be voluntary, is one of a number measures Pirelli has adopted for the restart of activities aimed at protecting the health of all employees, which is the company’s priority.

  • Pandemic hit Austrian Airlines ”with full force” in the first quarter

    Pandemic hit Austrian Airlines ”with full force” in the first quarter

    • Austrian Airlines revenue decline of 24% in the first quarter of 2020;
    • Strong year-on-year drop in passenger volume of 27%.

    ”The pandemic hit our company with full force”, states Austrian Airlines CFO Wolfgang Jani, commenting on developments.

    ”This blow is also reflected in our earnings. We will likely see the full effects in the coming months. However, it is already obvious today that it will take years for us to weather the crisis”, he adds.

    Austrian Airlines fleet has been grounded since March 19, 2020 as a consequence of the pandemic. Beforehand, the flight schedule for China and later for Europe had to be drastically slashed due to the spread of the coronavirus.

    Even though the far greater impact will be felt in the second quarter of this year, the corona-related development is also reflected in the financial figures for the first quarter: Revenue and passenger volume of the airline were both down by about one-quarter compared to the prior-year period. In turn, this led to adjusted earnings before interest and taxes (adjusted EBIT) of minus EUR 136 million in the first quarter of 2020.

    Austrian Airlines carried 1.9 million passengers in the first three months

    Austrian Airlines carried 1.9 million passengers in the first three months of the current year, comprising a decline of 27 percent from the comparable period of 2019. The flight offering in available seat kilometers had to be reduced by 19 percent to 4.5 billion.

    Capacity utilization (passenger load factor) fell to 68.2 percent due to the crisis. Many passengers actually did not travel despite valid flight bookings.

    The regularity of operation, an indicator with little significance at the present time in light of the coronavirus crisis, was down to 95.2 percent in the first quarter of 2020. The punctuality rate on departure could be improved to 88.1 percent, whereas the punctuality rate on arrival rose to 88.6 percent.

    Austrian Airlines operated a total of 22.727 flights during this period, or 253 flights per day.

    First-quarter revenue fell to EUR 287 million

    First-quarter revenue fell by 24 percent to EUR 287 million, and total operating revenue also decreased by 24 percent to EUR 304 million.

    Operating expenditures were down twelve percent to EUR 440 million. Earnings expressed as adjusted EBIT (adjusted earnings before interest and taxes) equaled minus EUR 136 million, comprising a decline of 37 percent from the previous year (Q1 2019: minus EUR 99 million). EBIT plummeted to minus EUR 197 million. The deviation between the adjusted EBIT and EBIT can be attributed to a revaluation of the aircraft fleet. (Refer to the chart on the last page for details.)

    The total staff of Austrian Airlines amounted to 6.943 employees as at the balance sheet date of March 31, 2020 (March 31, 2019: 7.061 employees).

  • G20 fiscal packages to fight the coronavirus crisis exceeds $4,68 trillion

    G20 fiscal packages to fight the coronavirus crisis exceeds $4,68 trillion

    Data gathered by Buyshares.co.uk indicates that the cumulative fiscal package to the Coronavirus pandemic by G20 member countries is $ 4.68 trillion.

    The fiscal package is not final because the COVID-19 pandemic is yet to be contained fully.

    Japan has the highest fiscal package

    Japan has the highest fiscal response to the pandemic at $996.45 billion which is 19.5% of the country’s $5.110 trillion GDP. The United States package stands at $562.1 billion, representing 11% of the $21.2 trillion GDP. Australia with a GDP of $1.45 trillion has a fiscal response of $495.67 billion.

    Canada’s fiscal response is $429.24 billion, representing 8.4% of the country’s $2.8 trillion GDP. Brazil is fifth with a fiscal response package of $332.15 billion or 6.5% of the country’s GDP of $2.02 trillion.

    Other G20 countries with notable responses to the current pandemic include Poland ($316.82 billion), Germany ($250.39 billion), France ($204.4 billion), China ($194.18 billion), and Saudi Arabia ($163.52 billion) and the United Kingdom ($153.3 billion). South Africa has the least fiscal response of $5.11 billion which is only 0.1% of the $350 billion GDP.

    Buyshares.co.uk’s research also overviewed the size of fiscal packages announced by G20 countries in response to the financial and COVID-19 crisis in 2009 and 2020. Japan’s fiscal response to the financial crisis was 2.2% of the GDP compared to the Coronavirus crisis which is 19.5% of the GDP.

    The United States’ fiscal package to the financial crisis and COVID-19 was 11% and 5.9% of the GDP respectively. Australia’s response to the current pandemic is 9.7%  of the GDP while for the financial crisis the rate stood at 1.8%.

    Elsewhere, Canada’s response to the pandemic represented 8.4% of the GDP while in 2009, such a fiscal response was 2.8% of the GDP. For Brazil, the fiscal package released to mitigate the financial crisis in 2009 represented 0.5% of the GDP compared while theCovid -19 management package represents 6.5% of the GDP.