Europe biz: Air France-KLM's new plan, Imperial's 'challenging year'
By Alex Hunt

Imperial Brands hit by US vaping fears

The firm formerly known as Imperial Tobacco - the owner of brands such as Winston and Gauloises cigarettes - has reported an 8.7 percent fall in operating profit for the year to the end of September to $2.8bn, despite a 5.1 percent rise in revenue to $40.7bn.

The firm's next generation products - such as vaping - saw 50 percent growth, but this was below what the firm had previously hoped for, partly as a result of "the increasingly competitive environment and regulatory uncertainty in the US."

The group's outgoing chief executive Alison Cooper said it had been a "challenging year with results below our expectations due to tough trading in Next Generation Products." She said the firm, which also announced that Thérèse Esperdy is to succeed Mark Williamson as chairman, was "implementing actions to drive a stronger performance in the coming year."

OPEC sees conventional vehicles remaining popular

The Vienna-based Organization of the Petroleum Exporting Countries has cut its long-term forecast for oil production, despite an overall increase in demand for energy.

The 2019 OPEC World Oil Outlook also says that the total vehicle fleet – including passenger and commercial vehicles – is estimated to grow by more than 1 billion by 2040 to around 2.4 billion.

"The long-term share of electric vehicles in the total fleet is projected to reach a level of around 13 percent in 2040, supported by falling battery costs and policy support, but the majority of the growth continues to be for conventional vehicles," it predicts.

Meanwhile in the UK, figures from car makers show overall vehicle sales down 2.9 percent so far this year, with electric car sales up 125 percent - although they still only account for 1.4 percent of sales.

Air France-KLM seeks to 'reinvent itself'

Air France plane in Paris (Credit: VCG)

Air France plane in Paris (Credit: VCG)

The Canadian at the helm of Air France-KLM, Ben Smith, has set out his plans for the future of the merged group as it moves on from its industrial disputes last year. 

At the top of his list is lifting profit margins to 7-8 percent, helped by "simplifying our fleet, clarifying our brand and market positioning and unlocking significant commercial and operational flexibility thanks to new labour agreements."

The group says it will focus on its three main brands with Air France focusing on premium travel and making Paris and France the world's leading inbound destination. KLM will seek to strengthen its position at Schipol airport and be the benchmark carrier for connecting traffic to and from Europe, while Transavia aims to "become the leading low-cost airline in France."

Eurozone 'not heading for recession'

Klaus Regling, head of the European Stability Mechanism, has said that the slowdown in the eurozone has been sharper than expected "but this does not necessarily mean that we are heading into a new recession".

Speaking at The Economist's 15th Annual Cyprus Summit, he added: "In my view, we have to remember that not every cyclical slowdown leads to a recession, and not every recession implies another crisis. It is important to look at the underlying dynamics. This slowdown in growth relates mainly to external factors, while domestic demand remains resilient."

He said that the main external risks were "the persistence of trade uncertainty and its impact on global growth, Brexit and geopolitical conflicts."

British retailers continue to attract shoppers

Retailers are braced for the election, plus a new Brexit deadline (Credit: VCG)

Retailers are braced for the election, plus a new Brexit deadline (Credit: VCG)

Shoppers in the UK have just about continued to spend, although retailers had to offer heavy discounts to tempt them, according to the British Retail Consortium. 

Chief executive Helen Dickinson said overall retail spending rose 0.6% year-on-year in October, but warned over the longer-term outlook "with Brexit still unresolved and a December election creating new uncertainties."

The BRC survey showed that in like-for-like terms - taking out any changes in retail space - sales were up just 0.1% compared with October 2018.