Challenges : Wishing to develop in renewables, Engie is selling its GTT nugget

Wishing to develop in renewables, Engie is selling its GTT nugget

Do you know GTT? A subsidiary of Engie, this SME specializing in the transport of liquefied natural gas is a nugget. It is now on the market.

On October 5, Engie sold 29.9% of its stake in Suez to Veolia. The former GDF Suez, which wants to develop in renewables and gas infrastructure, does not intend to stop there. Two months ago, Jean-Pierre Clamadieu, president of Engie, told Challenges that the energy company was going to "put under strategic review two-thirds of our customer solutions activities, which represents around 13 billion euros of turnover. " This Friday morning, on the occasion of the publication of the third quarter results, Engie announced that the activities of electrical installations, heating, ventilation and air conditioning will be out of the orbit of Engie. The company also announced that it could sell its 40% stake in GTT, a company specializing in containment systems for shipping and liquefied natural gas (LNG) storage, in whole or in part.

A separation that would be a real break because this company created almost 60 years ago has always been in the bosom of Engie. Based in Saint-Rémy-lès-Chevreuse and employing 450 people, Gaz Transport & Technigaz is a nugget. It has a unique membrane insulation system. To compress gas to -163 degrees in tanks, a perfect seal is required. GTT technology has won over nearly three quarters of LNG carriers in circulation. And in recent years, almost 100% of new models have been fitted with membranes. Today, the SME has an order book of 108 LNG carriers. Listed on the stock market in 2014, GTT is worth 3 billion euros (+ 90% in 5 years). Last year its net margin reached 50%. And it progressed further in the first six months of 2020 (56%).

LNG boom
The success story is expected to continue over the next few years. And this thanks to the rise in climate issues. Heavy fuel oil powered boats are thinking about using a more virtuous fuel. To reduce the CO2 footprint, LNG with a membrane tank is an opportunity. Especially for long-distance boats that have huge tanks and have not planned to refuel several times. The first LNG container ship has just been launched: the "Jacques Saadé", from the CMA CGM group. Eight other CMA CGM models will soon follow. The Ponant company, which makes round trips to the North Pole and the South Pole, has also ordered an LNG vessel. As for the German shipowner Hapag Lloyd, he decided to recycle the tanks of one of his container ships by opting for LNG.

The liquefied natural gas boom is still in its infancy. Ships don't really have a choice. As of January 1, 2020, new sulfur regulations oblige fleets to reduce their emissions by a factor of seven. One of the solutions is to opt for LNG which has the advantage of not emitting sulfur. GTT has found the right vein. Last year its turnover was 288 million euros. It could pass the 400 million mark this year. Engie should not have too much trouble finding a buyer for its subsidiary. It just remains to agree on the price.

WSJ : Covid Vaccine Stocks May Cause Excess Optimism, Losses

Covid Vaccine Stocks May Cause Excess Optimism, Losses
Vaccines from Pfizer and Moderna are essential to end the coronavirus pandemic, but investors should remain cautious

Coronavirus treatment stocks come with an important side effect: they tend to sell off on the news.

After months of grim pandemic headlines, this week finally brought signs of major progress: Pfizer PFE +2.14% and its partner BioNTech announced their Covid-19 vaccine was more than 90% effective. What’s more, Moderna —whose vaccine uses a similar technology to Pfizer’s—said Wednesday its vaccine candidate should have efficacy data soon. Even as Covid-19 cases are surging in the U.S., it is finally possible to imagine the end of the pandemic.

While that is wonderful news for public health and the economy, day traders should be on guard even if Moderna hits the mark. Pfizer and BioNTech both initially surged on Monday, but the euphoria didn’t last.

BioNTech shares have doubled since June, but are down more than 6% from Monday’s opening price. Pfizer shares are flat since May and down 8% from Monday’s open. Gilead Sciences GILD +0.98% stock is down about 30% since the spring, as investor enthusiasm for its antiviral Covid-19 treatment remdesivir has waned. Moderna shares have already risen nearly fivefold this year.

The danger for investors lies in conflating the importance of these drugs in fighting the pandemic with the attractiveness of the long-term business opportunity. The most lucrative medications have historically been drugs that patients need on a recurring basis. For instance, AbbVie’s ABBV +1.81% anti inflammatory drug Humira continues to generate billions in sales well into its second decade on the market. Rheumatoid arthritis patients who take Humira generally require a dose every two weeks. Statins, the blockbuster drug class of yesteryear, are typically taken daily.

Drugs that patients take less often tend to be less valuable to investors, no matter how badly they are needed or how well they sell in the short term. Gilead booked nearly $900 million in remdesivir sales in the third quarter, but the company’s stock has still declined. It remains unknown how long Covid-19 vaccine protection can last in patients. But even if shots are required annually, a flood of competitors could arrive in the months ahead, which will put significant pressure on vaccine prices over the long term.

In the case of Moderna, the company has many other programs in development that could prove valuable over the long term. But recent history suggests that day traders should brace for a letdown.

Business of Fashion : Fashion Is Set for an M&A Frenzy in 2021


>>> Bridgewater Associates (Raymond Dalio) discloses updated portfolio positions

Bridgewater Associates (Raymond Dalio) discloses updated portfolio positions in 13F filing: New KO PEP WMT PG CL MCD positions
Highlights from 2020 Q3 filing as compared to Q2 2020:
  • New positions in: KO (~2.03 mln shares), WMT (~1.39 mln), PG (~1.23 mln), PEP (~0.69 mln), MDLZ (~0.69 mln), JNJ (~0.67 mln), ABT (~0.43 mln), CL (~0.43 mln), MCD (~0.35 mln), BSX (~0.33 mln), ADM (~0.27 mln), BILI (~0.25 mln), MNST (~0.25 mln), BF.B (~0.23 mln), CCEP (~0.22 mln), GSX (~0.21 mln), EL (~0.18 mln), DHR (~0.17 mln), K (~0.17 mln)
  • Increased positions in: NIO (to ~1.57 mln shares from ~0.86 mln shares), KHC (to ~0.58 mln from ~0.04 mln), SBUX (to ~0.55 mln from ~0.01 mln), WBA (to ~0.41 mln from ~0.02 mln), BABA (to ~1.33 mln from ~0.95 mln) PDD (to ~1.09 mln from ~0.75 mln), TME (to ~1.02 mln from ~0.69 mln) TCOM (to ~0.99 mln from ~0.67 mln)
  • Closed positions in: MO (from ~0.07 mln shares), PM (from ~0.05 mln), TJX (from ~0.03 mln), LUMN (from ~0.03 mln), FISV (from ~0.02 mln), DDD (from ~0.02 mln), FIS (from ~0.02 mln), PGR (from ~0.02 mln), PEAK (from ~0.02 mln), TMUS (from ~0.02 mln)
  • Decreased positions in: LOW (to ~0.07 mln shares from ~0.1 mln shares), SINA (to ~0.05 mln from ~0.07 mln), HD (to ~0.02 mln from ~0.04 mln), TSLA (to ~0.04 mln from ~0.05 mln--on split adjusted basis), SHW (to 16K from 22K) AAP (to 16K from 20K)

FT : Zoom and the lost art of interruption

Zoom and the lost art of interruption
Video calls cannot match the speed and rigour of real conversation

The greatest of biographies, all 1,200 pages of it, is reducible to some quick flurries of dialogue. When the star of The Life of Samuel Johnson speaks unimpeded, you can almost picture Boswell and the rest gazing thirstily at the alehouse taps. The experience for the reader is hardly less of a drag. It is when their jousting cross-talk starts that the myth of Georgian London — each tavern an intellectual smithy — becomes not just plausible, but alive.

Interruption, or at any rate the anticipation of it, is what keeps Johnson and his crew sharp. It is telling how many of his canonical lines (“You have desert enough in Scotland”) come in staccato exchanges.

My grievances with the world of online meetings are several and bitter. The sound is tinny. The hilarity of intruding pets and children has run its course as a comedic genre. The two-dimensional camera undersells the warp and weft of my hair. Of all the crimes of Zoom, though, much the worst is its chilling effect on interruption. To cut across someone is to risk that grim dance of confusion in which both parties talk simultaneously for a few seconds. It is the spoken equivalent of colliding pedestrians mirroring each other’s movements as they try to get past. Even the feigned obsequiousness (“No, you first, please”) is the same. And so we stay our tongues.

The cost will never be quantifiable. But it is no less real for that: in thoughts held back until they are forgotten (or worse, over-rehearsed), in grandstanders licensed to burble on, in an absence of the pressure and jeopardy that hones our speech without our quite knowing it. When it is one-sided or maps on to an existing inequity — man to woman, rich to poor — interruption can stink. It is just that its creative uses get lost in the condemnation.

If the problem were confined to the work calls, I could live with it, but it afflicts the social ones no less. Looking back, the richest conversations I have ever had with friends must have struck the adjoining tables as teetering on hostile. (Especially if they were lined with Americans, a culture that tends to underrate how polite it is by world standards.) But it was in that edge, that hair-trigger restlessness to cut in, to shoot down a lame phrase, that all the substance of those evenings lived. And because we know that, we have hardly bothered with video meetings of late. Better wait for the real thing than take it in turns to speak. We are not interviewing each other for a job. We are not confessing addictions.

“Banter”, in the British sense, is traduced now, pegged as it is to lad culture at its most feral. The word itself has become a kind of banter. But there was always more to it than the bawdy jokes. Anyone who has been on its business end knows that it is really just an impatience with meandering or soft-headed speech: it is interruption as conversational hygiene. It forces you to ensure the seaworthiness of a comment before putting it out. It forces you to think at pace. Video calls, which entail a second’s wait to see if a joke even lands, have none of its tautness. Companies that now swear by them make me wonder how stilted and clunky their meetings had been in real life. (Did they have to pass around a cushion to speak?) The social circles who have embraced them are yet harder to fathom.

I wonder if either market will survive a return to normal life. This week, the share price of Zoom and its rivals fell upon news of the promising Pfizer vaccine. But even before, as the novelty wore off, it was less and less obvious what distinguishes a video call from a phone call. Even with full sight of someone’s face, it is not much easier to spot the minute clues that constitute real-time feedback or brace you for an interruption. Sometimes it is a twinge of the brow or a lift of the finger. Sometimes it is just a shift in the atmosphere. Either way, the pressure keeps us honest. Even history’s greatest talkers were bores without it.

WWD : Fendi, LVMH Top Brass Discuss Ingrained Sustainability

Fendi, LVMH Top Brass Discuss Ingrained Sustainability
Fendi is unveiling a new dedicated web site as it plans the opening of a new leather goods factory in Tuscany.

MILAN — Sustainability needs to be ingrained in a company — there is no room for improvisation.

That’s a belief shared by Antoine Arnault, head of image, communications and environment at LVMH Moët Hennessy Louis Vuitton; Silvia Venturini Fendi, and Serge Brunschwig, chairman and chief executive officer of Fendi, who spoke to WWD in advance of the brand’s unveiling on Friday of a new section of its web site dedicated and committing to social responsibility and environmental sustainability.

Linked to the latter, a few days earlier Brunschwig had planted a Turkey oak, symbolizing dignity and courage, at the construction site of a new Fendi factory in Tuscany’s Bagno a Ripoli, outside Florence, which is expected to open in July 2022. It will allow the Rome-based company to further develop and produce its leather goods category, and serve as a training center.

“We wanted to give back to Tuscany one of its beautiful Chianti landscapes, renovating an old building rather than leaving something abandoned and dirty — the architects say we are remaking a hill. We are very proud of this,” said Brunschwig. The plant will allow Fendi to grow its capacity and, in addition to the 150 employees working in an existing factory, the company will progressively hire 300 to 350 new workers in two to three years.

Located on a surface area of eight hectares, and covering a 140,400-square-foot space designed by Milan-based architecture firm Piuarch, the building previously housed the Fornace Brunelleschi kiln. Works started in the area in August 2018 to clear and prepare the construction site.
Both the perimeter and interior walls will be made of glass and the courtyards will be enhanced by local varieties of plants and flowers. Fendi is aiming for the factory to achieve the LEED Platinum certification. A series of buildings connected with squares and stairs and located at different levels will be integrated into the Tuscan hillside. In addition, Fendi has conceived a public park in the same area, opposite the kindergarten, featuring playgrounds and following the same approach of biodiversity of the factory’s landscape.
“It’s wonderful, I am so happy,” enthused Venturini Fendi. “We are growing despite these difficult moments [connected to the COVID-19 pandemic]. There are growth prospects, and at the center of it all is our Made in Italy.”
“The heart of a company is the factory, and it’s always an emotion for me when I go to a factory. I know this will be a place integrated with the landscape, where people will be able to work in harmony. There will be a lot of glass and so much light, you’ll be able to see the hills outside, it’s very poetic. There will be an osmosis between the inside and the outside.”
She also said she was happy the factory would help repurpose an old building. “There is no need to build more.”
Addressing the new web site, Arnault said that at every LVMH house, the “new mind-set for every manager and management team is to put sustainability on top of a priority list. In the past few years the way of thinking has shifted and it’s now unthinkable for sustainability not to be factored in, whatever the project. We see it in building a new factory like this, and in the way most designers integrate this in their work. Eco design is becoming a top priority. From the cradle of the idea to the grave of the product, recycling and making new with old, sustainability is becoming inherent in the way we do our business, and we take pride in this because it’s not new for us.”


He credited his father Bernard Arnault’s initiative in 1992 to create a sustainability department “when the topic was not à la mode, and because it’s been rooted in the group for so long and infused in its values, now we are able to see everything with this in mind. We cannot decide one day to become green or eco-friendly on these topics, you need to have it in your roots to be real and more and more it feels natural.”
Brunschwig echoed this and said that Fendi realizes that transparency is increasingly important in this area. Accordingly, the company is pledging to “shed all possible and available information on activities and results on three axes: supply chain, environment measures and community.”
The most modern way to approach sustainability is “to talk to everybody, to communities, employees and clients, everyone is motivated by these subjects.”
“We acknowledge we are not perfect,” underscored Arnault. “We are absolutely conscious that with the scale of our group, with tens of thousands of suppliers, we cannot be absolutely perfect, we tend to be clear and not to pretend that we are absolutely irreproachable. We show good faith through transparency, asking people inside or outside that if they see anything out of the ordinary or not on the right track to alert us. This is one way to improve.”
Brunschwig touted the quality of Fendi’s sourcing and its commitment to employ increasingly more natural materials, such as BCI cotton. The second step will be the use of entirely organic cotton, he said. To wit, along with employing cellulose-based fibers for lining and packaging, among its different initiatives Fendi is also introducing the FF Green Interlace capsule collection, an evolution of the leather design introduced for spring 2020. The FF jacquard canvas will also be made with the same formula. Fendi’s Peekaboo and Baguette bags will be available in certified FF cotton and recycled polyester, with the Interlace technique. The fabric is cut into individual strips, which are then assembled, and hand knotted together. The knots are then folded on the opposite side and the bag is finished with a maxi metal needle.


Fendi’s Green Intrecciato Capsule. Aedo Pultrone
“I wanted this to be as natural as possible,” said Venturini Fendi. “This is all genuine, not a marketing ploy, because it’s very serious, starting from the foundations. There is a lot of work behind it, and a change in mentality.”
Sustainability also means supporting the community and Venturini Fendi and Brunschwig have been endorsing Fendi’s “hand in hand” project. Selected artisans, one in each Italian region, were asked to offer a unique interpretation of the Baguette, collaborating with the brand’s own artisans. Venturini Fendi enthused about the potential of the project, which helps preserve and transmit unique craftsmanship not only from generation to generation but around the world. The first designs derived from the project were shown during Fendi’s spring 2021 show last month.
Fendi has also long committed to the education and training of young talents through the Massoli Academy in Rome, which trains new tailors, and the participation in the LVMH Institute des Métiers d’Excellence training program.
“This is a great example of how practices can be shared between companies [under the LVMH umbrella],” said Arnault. He conceded that brands that are part of the group compete with one another, “except on these topics, they understand that in this case we need to share and be altruistic. Brands fight for locations, designers and employees, it’s a healthy consequence of decentralization; however, we mutualize our strength on important topics and Serge and Fendi do it well and I say it with great pride.”
Arnault continued by saying that LVMH needs training programs such as the Institute des Métiers d’Excellence. “Without shame, I can say that we could not continue our business without properly trained programs and they are directly linked to the success of our business. This is the right thing to do and robotization is not even in our mind. Italians should collectively be aware of and recognize more their treasures, and ensure they survive.”
Helping communities also meant that Fendi has supported storied glass company Mazzucato from Murano, Italy, whose business was hurt by the pandemic, by acquiring and disassembling 37 of its chandeliers to create new decorations for Fendi’s Christmas windows in cities such as Rome, Shanghai, Paris, London and New York. The decorations will be crafted from 49,340 square meters of leather waste coming from Fendi production plants together with sugarcane-derived foam obtained through processes using recycled and regenerated products.
Furs — a core and storied business for Fendi — may not be seen as sustainable by some, so asked to comment on this, Brunschwig said that “for Fendi, fur is a sustainable material, there is no question about it. Of course, the survival of the species and the well-being of animals is very important, there are certifications. We buy from farms that have the highest standards and we improve as we speak.”
Arnault was open to discuss this. “It is very important to tell the truth and this is a sensitive topic. Of course, we’ll do everything we need to do to be even more compliant to the [already] highest standards of certification. However, we should not be naïve. It’s not that if a group like ours stops to make fur people will stop to buy fur and I much prefer to sell fur to those clients but fur done in the right way. I won’t lie, yes, [the animals] die, but they are treated with the respect and humanity they deserve and with the standards that we put in this work — it cannot be done better. I’d rather be the bad guy and to sell it to the customers when done the right way than to let others do it in horrible conditions and do their business like that. I know it’s a difficult statement to hear but I am ready to take the consequences.”
Brunschwig also touted Fendi’s added value of craftsmanship in the development of the brand’s fur designs, and “giving customers the freedom to choose.”
The executive said the new web site will continue to update information and progress on sustainability, but Arnault pointed out that the group and its brands focus on “short-term goals, contrary to a lot of our friends and competitors whose claims and objectives are set for 2050 — far enough for the goals never to be seen and if they are not reached nobody will remember them. We want realistic and measurable goals, so that progress can be verified. I am not a fan of incantation and setting unrealistic, far away goals. I much prefer that people can come and point their fingers at us if we have not achieved our goals.”
Arnault said the group has received “a lot of help” from LVMH special adviser Stella McCartney. “She is our little red demon or blue angel, almost every day she has hints, ideas and suggestions and makes us meet the right people. It is very enriching because she is so knowledgeable about this topic.”
“The beauty of it is that everybody is interested in sustainability, it’s everybody’s problem,” said Brunschwig. “Customers ask more about how and where the product was made than its price,” said Arnault.

FT Lex : Goldman Sachs: ruff justice

Goldman Sachs: ruff justice
It is worth looking at who has not been included in the new partnership appointments

The appointment of partners at Goldman Sachs is a chance for the bank to parade its new Wall Street stars.

This year, however, the constellation is smaller than usual. Promotions via the winnowing process known as “cross-ruffing” has shrunk by about a third under chief executive David Solomon. It is also notable for its diversity. Of the 60 executives Goldman Sachs promoted to its elite partnership rank on Thursday, nearly half are women and ethnic minorities.

The heterogeneity tallies with Goldman’s diversity-hiring goals, which include boosting US entry-level analyst and associate hires to 50 per cent women, 11 per cent black and 14 per cent Latino.

Of course, the bank’s well-publicised diversity drive has its limits. Goldman pledged earlier this year not to take companies public unless they had at least one diverse board candidate. From 2021 the target increases to two. But the initiative does not apply to Asia, where the issue is particularly acute.

Keeping a lid on numbers is a reflection of the bank’s ambitious plan to cut $1.3bn in costs over three years. But it is worth looking at who has not been included in the new partnerships. Two-thirds of the Class of 2020 are traders or investment bankers. A handful are from engineering and risk management. There is no one from Marcus, Goldman’s much-vaunted but underwhelming consumer banking unit — a key plank to its plans to diversify revenue base.

How does this fit in with plans by Goldman, on the back foot in recent years, to regain its relevance by expanding into areas like cash management? A surge in trading revenues may have boosted profits to a decade high in the last quarter, but such gains are notoriously fickle. A placid Biden presidency in the US and successful Covid-19 vaccine could neuter market upheavals next year.

Goldman’s strategic aspirations are supposed to centre on a transition to a broader mix of businesses. Keeping representatives of those businesses out of the elite partnership suggests it may not be as confident in that plan as it claims.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:

  • REV -8.1%, AMWL -6.9%, BLNK -4.4%, PLTR -3.1%, VXRT -2.6% (also provides clinical update)

Other news:

  • SAVA -19.5% (stock offering)
  • GFF -10.4% (increases dividend)
  • BIGC -6.3% (prices follow-on offering of a total of 5 mln shares of Series 1 common stock at $68.00 per share)
  • KROS -4.3% (prices 2.6 mln shares of common stock at $50.00 per share)
  • ORGO -4.1% (prices offering of 17.5 mln shares of common stock at $3.25 per share)
  • OVID -3.7% (files for $250 mln mixed securities shelf offering)
  • LSF -3.5% (new COO)
  • RUTH -1.7% (new CFO)
  • ORIC -1.7% (priced an upsized underwritten public offering of 5,040,000 shares of its common stock at a price of $23.00/share)
  • TWNK -1.4% (S&P outlook revised to stable on Voortman integration and rev growth)

Analyst comments:

  • KOD -2% (downgraded to Neutral from Buy at Goldman)
  • DOW -1.5% (downgraded to Mkt Perform from Outperform at Bernstein)
  • LYB -0.6% (downgraded to Mkt Perform from Outperform at Bernstein)
  • WELL -0.6% (downgraded to In-line from Outperform at Evercore ISI)