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Li & Fung’s net profit for the 12-month period ended in December totaled $725 million, while revenues increased 3 percent to $20.7 billion.

The company said that preparation for the proposed spin-off is under way, and that it aims for a listing later this year. If approved, Bruce Rockowitz, Li & Fung’s group president and chief executive officer, will become ceo of the Global Brands Group. Spencer Fung, currently chief operating officer, would take over as ceo of Li & Fung.

“We feel by having two separate public companies, each one can focus on its roots and what it does right and what it does best,” Rockowitz said at a press conference Thursday.

“When you look at Li & Fung, we were historically a sourcing company. We developed a branding business because we wanted to develop the top 10 retailers in the United States. Our core is taking care of other people’s brands. It’s less volatile,” he explained.

The brands business, on the other hand, “has gone through a difficult time,” he acknowledged, but Li & Fung has built up a “great” portfolio and “we hope to make sure that the things that went wrong in the past don’t go wrong in the future. It is more volatile, but it’s a higher-margin business, so I think it’s an opportunity for investors to make their decision,” he continued.

Li & Fung’s trading network, its largest business unit, making up 62 percent of overall profit, reported a 1 percent increase in revenue, totaling $16.3 billion. The unit’s core operating profit rose 3 percent to $539.4 million.

The trading network business depends heavily on Chinese factories, which analysts say has become a source of concern, given rising labor costs. Rockowitz acknowledged rising operating costs in China but said that the country would continue to be a key market.

“China is developing; it’s moving from the coast into the interior. And I can say that, while some factories are definitely moving out of China, they are also moving to the interior of China, and they keep reinventing themselves,” he said. China is the largest market for sourcing, while Vietnam is the second largest and Bangladesh is third.

Li & Fung’s other two major business units, its distribution network and logistics network, also reported improvements in core operating profit and revenue.

The distribution network, which includes LF USA, reported core operating profit of $295.5 million, against a loss of $38.9 million the previous year. Li & Fung said the LF USA business “recovered and produced positive results through margin expansion and cost control.”

Core operating profit at the company’s logistics network unit jumped 50 percent to $35.8 million. Revenues rose 30 percent to $526.3 million, thanks to gains from partnerships plus new business.

Li & Fung noted it had “emerged stronger following a challenging 2012” and that it returned to 2011 operating levels.

“It wasn’t a very strong economic environment in 2013 and that was really the overriding theme, at least economically. In fact, if you go back to October, that was after back to school, that was quite poor, then the U.S. government had a shutdown and that time we were very concerned and we became, I’d say, more pessimistic about the year. We made up a lot of ground in the second half of the year in 2013,” Rockowitz said.

Looking forward, he said he is somewhat positive, noting that “the market itself has been incrementally better overall and slowly getting better, but it’s still not robust.”

The Hong Kong-based company also released a new three-year plan, emphasizing organic growth and investments in its operating platform and infrastructure. Under the plan, Li & Fung’s trading network aims to achieve a core operating profit that exceeds the company’s entire current core operating profit. The firm also aims to double the core operating profit of its logistics business.

Rockowitz highlighted that the company would be putting less emphasis on acquisitions in the future.

“When you look at the past three-year plans, we’ve done a lot of acquisitions, no doubt. Now we have our platform, we have scale in many areas; now we are in a position to leverage what we have and grow organically. Our three-year plan is really based on organic growth. Having said that, there will be some acquisitions.”

Li & Fung made 10 acquisitions in all of 2013 — a “relatively small” number for the company. So far in 2014, the company acquired The Licensing Company Limited, a global licensing agent in Europe.

So says chief executive officer Axel Dumas, who presented the French firm’s full-year results on Thursday, headlined by a record operating margin of 32.4 percent last year, a 0.3-point improvement over 2012 that was lifted partly by deft currency hedging.

Net income in 2013 rose by 6.8 percent to 790 million euros, or $1.05 billion, reflecting higher taxation, particularly in France.

Revenues last year rose 7.8 percent to 3.75 billion euros, or $4.99 billion, as reported.

Dollar figures are converted from euros at average exchange for the 12-month period ended Dec. 31.

Hermès reported operating income rose 8.9 percent to 1.21 billion euros, or $1.62 billion, leaving it with a cash pile that reached a historic high of 1 billion euros, or $1.36 billion.

“We may have a billion in cash, but we’re not Apple yet,” Dumas remarked to a round of chuckles among the analysts assembled at the company’s headquarters on the Rue du Faubourg Saint-Honoré here.

Sounding sanguine, Dumas voiced confidence for 2014, tinged with caution, echoing the stance of the previous ceo, Patrick Thomas, who retired earlier this year.

Dumas warned analysts to expect a drop in profit in 2014 given strong currency headwinds, particularly in Japan, where a declining yen prompted Hermès to raise prices by 10 percent on Feb. 17. A hike in value-added tax in the island nation, scheduled for April, is likely to further dampen demand.

The ceo sounded more bullish on China, saying consumers there are turning increasingly toward high-quality products whose appeal derives from elite craftsmanship, rather than logos. In addition, more women are shopping for luxury goods in China, and the clampdown on bribes and gifting there is a “fight against corruption, not luxury goods,” he said. Dumas noted that watches and liquors are hardest hit, along with brands associated with gifts, of which Hermès is not one.

“We haven’t seen any real impact on our financials in China,” he said.

In September, the company plans to open its Hermès Maison in Shanghai, only the fifth unit in the world with its own dedicated building and a complete product offering and cultural attractions under one roof. (The others are in New York, Tokyo, Seoul and Paris.) Hermès is also plotting a new unit in Beijing, and an expanded location in Chengdu.

In total, the company plans to open six stores this year, and renovate and enlarge 14 more.

“The idea is to increase the penetration with local customers,” Dumas explained.

He waved off a question about the brand’s Russian clientele, given the political crisis there and in Ukraine, noting the nationality accounts for “well below 5 percent” of the firm’s business, and Russians tend to shop mainly abroad.

Despite morose economic conditions in Europe, Dumas said that all countries have expanded their local clienteles with the exception of Spain and Greece.

The company provided no specific earnings or sales guidance for 2014, vowing to “reinvent itself and push the limits of excellence.”

In a research note, Bernstein Research analyst Mario Ortelli called the earnings underwhelming and said that, still, “we expect Hermès to deliver resilient revenue growth and maintain top-notch EBIT [earnings before interest and taxes] margins and ROIC [return on invested capital] thanks to its strong brand positioning at the top of the ‘exclusive’ niche.”

He cautioned that the stock price is bound to recede as its current pricing reflects an “M&A premium” fanned by the accumulation of a 23.1 percent stake by rival LVMH Moët Hennessy Louis Vuitton.

Golden Gate Capital, which lately has reaped a bundle from its bets on Zale and Eddie Bauer, disclosed late Thursday it has amassed a 9.5-percent stake in Ann Inc., the apparel chain’s New York-based parent.

Ann shares surged more than 10 percent in after-hours trading, rising above the $40 mark to hit 52-week highs.

The San Francisco investment firm revealed its cache of nearly 4.4 million shares in a 13-D filing with the Securities and Exchange Commission, typically signaling an activist stance.

However, in a Thursday letter to the company, Golden Gate execs took pains to praise Ann Taylor’s management under CEO Kay Krill.

In addition to Ann notching same-store sales increases in 14 of the past 16 fiscal quarters, Golden Gate execs noted that the company has added 68 new stores during the past three years, even as it has repositioned its brands.

“We believe that [Ann Inc.] is a great business, with a thoughtful strategy, led by an extremely competent management team who has a long track record of success,” Golden Gate said in the letter.

Still, the investment firm said it believes Ann’s stock is “significantly undervalued,” and sees room for operational improvements in several areas.

Despite sluggish mall traffic that has dogged mall-based chains in recent seasons, Golden Gate said Ann can add more stores in the US and abroad, and believes the retailer’s sales can increase to as much as $400 per square foot.

Golden Gate said Ann also needs “a clear and aggressive omni-channel strategy,” and advocated the development of “sub-brands” and new accessories.

The company, in a statement, said it welcomes new investors.

Remy reports 2014FY sales on 17 April. We expect Remy's Cognac organic sales to

decline -25% in Q4FYE y/y (-32% in Q3FY y/y). This performance will still be heavily

impacted by China destocking (China c35% of EBIT), and we do not believe that the

Chinese New Year has shown a meaningful inflection point in trend. However, Remy is

holding pricing firm in China. In the US, the high end on-trade is proving more resilient

than casual dining, but we expect Remy's shipments to run somewhat below depletions

in Q4FYE. UBSe -9.7% group organic sales decline for 14FY (-10.6% for Q4FYE)

compared with -7.5% previously.

* We now assume -33% organic EBIT decline for 2014FYE

Remy's former CEO indicated that 14FYE organic EBIT could be -20/-25% in November

2013. However, given greater than expected China destocking in Q4FY we lower our

assumption from -22% to -33%. Remy has indicated that every extra month of

destocking in Greater China (all depletion trends alike) impacts 14FY group EBIT by 8-

10%. In addition we believe A&P spend will remain high in 14FY in addition to higher

distribution costs (Remy is opening owned distribution in the UK on 1 April).

* Remy remains at the sharp end of the China anti-extravagance initiatives

While we remain positive on global Cognac mid to long-term, Remy's recovery will

likely lag its peers in China given that it over-indexes those channels impacted by antiextravagance

in China (35-40% of its China sales), and lacks the global distribution of

Pernod or Moet Hennessy to diversify demand as rapidly. While we expect 5% organic

sales growth for Cognac in 15FYE, we expect H115FY to see continued destocking.

* Valuation: Neutral, some valuation support from Cognac inventory value

We cut px EPS by -16% in 14FY (organic downgrade and higher tax rate of 33% on

country mix) and -17% in 15FY. We lower our DCF-based PT to €60, seeing some

support in the value of Remy's Cognac inventory (market value of 2-3x the book value

of €946m in 13FY), the potential to resume the buy back or make acquisitions given

1.7x net debt/EBITDA for 14FYE. Next catalyst is Pernod Asia seminar on 27 March.

Link to Translation : {http://bit.ly/1d6usCi}

Link to Original/French Article : {http://bit.ly/1oDpYEP}

Nestlé candidate acquisition of Danone Medical Nutrition

According to several sources, four candidates have come forward to take the medical division for sale by Danone and whose value could reach nearly € 3 billion. Among them: Nestlé.

Danone Medical Nutrition arouses envy. According to several sources, four candidates have emerged to resume division disposal by the French group and whose value could reach nearly € 3 billion. Starting with two competitors, Nestlé and German Fresenius, the world of dialysis, at the head of a network of 260 clinics. Are also mentioned a third industrial candidate, as well as investment fund Nordic EQT. According to Reuters, which announced in mid-February the sale of the medical division of Danone, U.S. pharmaceutical companies Abbott and Baxter were potential candidates.

The medical division of Danone is extremely profitable. She realized in 2013 a turnover of 1.34 billion euros, up 5.6%, and reached a operating margin of 18.16%. This is the second best group profitability after infant nutrition, and to bottled water and dairy products latter providing more than half of total revenues with sales of € 11.79 billions , an increase of 3.2%.

Danone intends to focus on dairy products and baby food business which requires investment. In addition, the group has suffered setbacks in China due to unfounded fears of Fonterra supplier of raw materials risk of botulism. This situation forced him to withdraw products from sale. Cost of operation: 370 million euros in sales and 300 million operating profit less.

Sharpen the image of group health concern

His side Nestlé continues to enhance its image concerned about the health group. The Swiss giant acquired in February 2013 Pamlab, a U.S. company specializing in medical nutrition, which sells products for patients with mild cognitive impairment, depression and neuropathy. It has also opened in Lausanne, an institute dedicated to research the study of non-communicable diseases (Alzheimer's disease, diabetes, etc..) And their relationship with food. The Swiss group hopes to develop foods that can prevent these diseases, slow transmission or perhaps even cure one day.

Nestlé already carried out in this sector "health science" a turnover of about 2 billion Swiss francs (1.6 billion euros) per year.The investment fund EQT is no stranger to the area medical. With 20 billion euros in assets under management, the key capital actor in Europe is particularly present in Atos Medical and BSN Medical. Contacted, Nestlé has made no comment.

Link to translation : {http://bit.ly/1gZPMVP}

Link to Original/French Article : {http://bit.ly/1eY9S2f}

Now debt free, group communication could push fires on acquisitions. The question of integration of Havas in Vivendi does not exist today, says its CEO.

Appointed CEO of Havas in early January, Yannick Bolloré, 34, son of Vincent, speaks for the first time on its strategic vision for the future of the 37% subsidiary of the Bolloré group. Nine months after the announcement of the proposed merger between Publicis and Omnicom, placing it on the agility of his model, lighter and more mobile.

Havas prides itself on being the only holding French independent advertising. But the merger between the number two and number three worldwide, Publicis, Omnicom, the problem of your critical size ...

Havas will indeed remain, mechanically, the only independent French group, with headquarters remaining in Paris.

Publicis continues to assert that the merger does not mean the purchase of a French company by a foreign and the group founded by Marcel Bleustein-Blanchet will never be American ...

I hope for him that John Wren (Omnicom's boss, Ed) has not read this interview! That said, this is not the fact is the last French Havas group bring us customers, but the agility of our model, lighter and more mobile. It is easier to win a marathon 70 pounds when you weigh 100 pounds ... Let's be clear: Havas strategy is not to become the biggest. Although the issue size is real because it is necessary to have a global dimension. But Havas, with national, European customers (54% of our margin comes from Europe) and international, now holds the global scale: in Latin America, Brazil is in the top seven of our major markets and Asia Southeast Australia can boast a double-digit growth, thanks to the defense budget that we have to win.

You disclaim Havas is a target to be redeemed, including WPP, the current world leader?

Altogether. Our share is stable and Havas is now debt free, with net debt fell to 90 million. Specifically, Havas is not for sale and we are located in a much more logical buyer or seller.

And what form could then take these acquisitions? In recent years, the external growth of the group has been quite sluggish ...

It is true Havas has not had in recent years a policy of aggressive acquisitions. The group was very traumatized by costly and unsuccessful operations, such as the acquisition of Snyder, bought $ 2.1 billion in 2000 by the previous team. Five years later, in May 2005, the Bolloré group entered the capital of Havas, while indebted to the tune of € 750 million, and I'm not sure it still exists in its current form if we were not intervene. The ratio between net debt and our equity is now back to 7% by the end of fiscal 2013 (25% on average debt over the year), which should allow us to resume growth external. After that, what is important is to have a clear strategy.

Specifically, the strategy of Publicis, Omnicom is to partner to better counter the Net giants and regain control of datas, imperative for their advertisers. Against any attack decided to adopt Havas?

There are three options. Either we continue to buy targets small to medium size and redistribute 40% of our profits to shareholders. Acquisitions we look aim to strengthen our technological expertise and our presence in certain geographic areas. Either we participate in a horizontal consolidation of the sector by buying some of our rivals. But I do not see what customers would benefit. Or, finally, we are considering investing in certain occupations to link the world of datas more closely with the content. We have already invested in a platform to better leverage our datas. Havas Media has also mounted with Orange, last October in Los Angeles, an experiment called "Siliwood", an R & D meeting the growing interest marks the convergence between the media industry and the entertainment industry . We brought a great mathematician awarded the Fields Medal, the equivalent of the Nobel Prize.

Which means you have to carry this type of strategy?

We do not have a problem of resources. Havas has a credit line of more than one billion euros.

Havas stay in the Vivendi group, whose largest shareholder, Vincent Bolloré is poised to become chairman of the supervisory board in June, would it make sense?

This has been the case in the past, since the Compagnie Générale des Eaux, Vivendi has since become, Havas had bought in 1998. Advertising section was removed from the group in 2000 to become Havas Havas Advertising and short. Today, the question does not arise. And there is no record in the study. The main link between Vivendi and Havas is that its subsidiary Canal + is one of our major customers.

The acquisition of SFR Numericable, if it materializes, he risks losing your agency Gauls SFR budget, its second account in terms of margin?

Things are totally compartmentalized. The first case did not impact at all on the second. For the rest, we believe that our teams have all the skills to keep our customers.

Your father Vincent Bolloré it is very present in the daily management of Havas?

It is not quite the contrary. He left our board of directors in August. It would be my great honor to welcome him back.