DAX outlook: mood barometer cloudy outlook

Frankfurt In the past weeks there have been repeated attempts to recover the course, on some days one could believe that the corona pandemic has already been overcome. But on Friday, disillusionment returned – the collapsed ifo business climate index made the whole dilemma clear.

The course of the mood barometer looks like a “Highway to Hell”, was the analysis of the VP Bank. The index is now significantly below the values ​​of the crisis year 2009. The simple message for the future was: “Massive income losses are imminent. We will all get poorer. This applies not only to Germany, but to all economies. ”Sometimes it is better to hear the unvarnished truth.

Other analysts and experts are also skeptical about the weekly outlook. Cautious savings by consumers and companies create a completely different economic and inflation environment than one knows from the post-war period, the analysts at MFS Investment Management believe.

They expect the earnings recovery to be weaker than the market and point to the possible dilution of earnings through capital increases. They particularly highlight 2008 as a comparison.

“When the extreme risk of the international financial crisis subsided, companies were no longer concerned with distributions, but with recapitalization. To this end, new shares were issued – at the expense of existing shareholders, whose capital was heavily diluted, ”said the investment professionals. The new wave of recapitalization has probably just started. In the past few weeks, leisure companies and service providers in the United States and Europe have already offered new shares.

Warning to bargain hunters

The BLI – Banque de Luxembourg Investments is also cautious. “The financial markets are currently giving the impression that they are underestimating the extent of the economic damage and are counting on a rapid recovery as soon as the containment measures are reversed,” is the BLI’s assessment.

Many investors are conditioned to view any decline as an opportunity to buy. However, the analysts recall that while the fall in share prices in February / March was dramatic, the valuations were also very high. As a result, the markets today are anything but cheap, especially after the recent price recovery.

Quality companies with a very solid balance sheet, one or more sustainable competitive advantages and the ability to self-finance should be preferred. The main factor that will continue to speak for stocks remains the low interest rate level and thus the lack of alternatives. At the same time, gold will become an “indispensable part of a balanced portfolio because of the inflation risks.”

After the significant recovery since mid-March, the European stock market has recently lost some momentum, the Weberbank experts believe. In addition, the balance sheet season that is already underway shows significant impacts on corporate balance sheets due to the global “lockdowns”.

Correspondingly, the analysts have also significantly lowered their profit expectations for industrial companies, but also for the banking and energy sectors. Due to the economic slump, banks faced increased write-downs on their credit books and the massive drop in yields clouded interest income. Most recently, they also negatively impacted the rating agency Standard & Poor’s (S&P).

The Deutsche Bank and the Commerzbank were therefore particularly under pressure on Friday “We continue to distance ourselves from these sectors and prefer creditworthy pharmaceuticals or companies from the non-cyclical consumption. In addition, titles from the technology sector are promising in our eyes, ”said the Weberbank experts.

Central banks meet worldwide

If the economic situation continues to be poor, the states and central banks will have to take further support measures. Robert Greil, chief strategist at Merck Finck Privatbankiers, sees an opportunity for this next week because the European Central Bank, the US Federal Reserve and the Bank of Japan are meeting.

“As a result of the unprecedented economic downturn caused by the Covid 19 consequences, all central banks will reaffirm their willingness to support,” says Greil. The economic downturn left neither governments nor central banks a choice but to take further measures to support and recover the economy.

The gross domestic product for the first quarter of 2020 will be published in the euro area on Thursday, and new growth figures will come in the US on Wednesday. Further important economic data in Germany are the preliminary inflation figures and the labor market report for April.

According to DZ Bank, the next quarter should bring an improvement in the economy, but there does not have to be a “V” or “I” recovery. This is not ignored on the stock market, many stocks are up to 80 percent down.

A large number of “mega-caps” hold up against this, mainly in the USA. Amazon, Google, Microsoft, Netflix and Facebook, but also Adobe or Comcast, be stable on the way. Things are also going well for the great values ​​of the “old economy”, including Pepsico, Johnson & Johnson, Procter & Gamble, Home depot and Pfizer. The German Leading index Dax the strategists from DZ Bank see 11,200 points by the end of the year, and the S & P-500 for US equities at 2,800. This would at least stabilize in the medium term.

More: Yield in Corona times: With which investments you can still make money


Investors and banks dropped the chain

Dusseldorf The end was sealed shortly before the ghost hour. He decided to “file an application to open insolvency proceedings for insolvency with the Cologne District Court,” said the board of the restaurant chain Vapiano this Wednesday at exactly 11:57 p.m. Whether applications for subsidiaries also have to be made will be examined. Ruth Rigol was appointed as bankruptcy administrator for Vapiano by the Pluta law firm.

This makes it clear that all of the last attempts to rescue the pizza and pasta chain have failed; 55 restaurants in this country alone are likely to remain closed even after the current corona-related forced closure. At first, 2000 employees in Germany have no prospects, and the Danish Vapiano company has already filed for bankruptcy.

It is not yet clear how things will go in other countries. But one thing is certain: the once fairytale-like success story, which culminated with the IPO in 2017, came to an abrupt end.

No solution could be found for the “another significant increase in liquidity requirements of an additional 36.7 million euros”, which arose from the consequences of the corona pandemic, the board said. “In particular, no conclusive agreement could be reached with the financing banks and key shareholders on the contributions to the comprehensive financing solution sought,” it said. For this reason, the prospective funding from state corona aid programs could not be applied for.

There is a lot more to this detail in this sober message. If you ask questions in circles that are familiar with the processes, you hear that in the end it was really only about a few million euros that were supposed to have been in question. An insider spoke to the Handelsblatt of four million euros.

The shareholders, Vapiano co-founder Gregor Gerlach, major shareholders Hans-Joachim Sander and his wife, heiress to Wella Gisa Sander, and a consortium of six banks led by HypoVereinsbank (HVB) could not have agreed on their distribution. Another participant did not want to directly confirm the sum of four million euros, but spoke of a manageable single-digit million amount.

This sum would have remained as a necessary financial injection if Vapiano had received government support. And there were very positive signals from the state of North Rhine-Westphalia for this, confirm several insiders. At the beginning of the week, it had been heard from negotiating circles that possible state support was probably the least problem with the rescue attempts.

State of North Rhine-Westphalia would have jumped in

The state of North Rhine-Westphalia should have provided the majority of the required liquidity of 36.7 million euros through NRW.Bank and taken over the previous Vapiano shareholder Mayfair’s 47.4 percent stake. Mayfair, which is backed by the Tchibo heirs Günter and Daniela Herz, had only recently announced that it would sell its shares to a trustee.

Ultimately, there should have been a violent scramble behind the scenes as to which financial resources banks and investors are making available and who is foregoing certain claims. The dissent was enormous, it was said that the interests of six financing banks and the two investors could not be reconciled.

And ultimately, doubts have grown massively that Vapiano will succeed. Nobody dared to risk a “positive continuation forecast” if the restaurants were allowed to reopen after the corona-related forced closings, which are not yet foreseeable as yet.

Vapiano did not want to comment beyond the ad hoc announcement on request, but again pointed out that there were positive signals “regarding funds from state support programs”. No request has yet been received from the state of North Rhine-Westphalia, also from the investors Gerlach and Sander. Mayfair regretted that despite intensive efforts by the various parties, “the current step of filing for bankruptcy has become inevitable”. HVB did not want to comment on request.

It’s a rather abrupt withdrawal by investors and banks. Because only recently, the stricken restaurant chain announced that they had agreed with the shareholders and banks on a new financing immediately before the escalating corona crisis. 10.7 million euros were identified as liquidity requirements. The plans provided for Gerlach and the Sanders and the financing banks to contribute additional capital.

At the same time, banks’ credit conditions should be suspended. Mayfair, on the other hand, who had already contributed 22 million euros in additional capital in the past two years, no longer participated in these financial injections – and announced that it would transfer its shares to a trustee who, after successful restructuring, might sell them or should retransmit.

Then came the corona pandemic with its impact on the business, which, according to a company announcement on March 16, caused additional financing requirements of EUR 13.6 million. However, the amount has not yet taken into account the impact of the massive closings of restaurants that have become necessary to slow the spread of the virus.

“A further increase in liquidity requirements is therefore expected,” the company said only a few days later when it declared bankrupt on March 20. “We do not know exactly where we are currently and how long the crisis will last,” said investor Sander. He was still convinced of the concept.

Zenith already exceeded at the IPO

In order to ward off the imminent bankruptcy filing, Vapiano boss Vanessa Hall simultaneously made an urgent appeal to the federal government to provide loans quickly. “If we do not soon see unbureaucratic and quick help for the companies concerned, the loss of jobs will no longer be an abstract risk, but will inevitably become a reality,” said Hall.

The British came to Vapiano in 2018 and should lead the weakening restaurant chain back on the road to success. In 2005, Vapiano passed the 10 million euro mark for the first time, then expanded with giant strides. At the top, the chain was represented in 33 countries with more than 230 restaurants, the turnover moved towards 300 million euros. And since 2017, the pizza and pasta specialist was listed on the stock exchange.

But when the chain, which had become a cult brand, went onto the trading floor, the descent had long been initiated. There were reports of poor hygiene, problems in dealing with employees. Above all, the criticism of long waiting times and the price-performance ratio in the restaurants and the associated weaker business weighed on Vapiano. After a minimal profit of 1.6 million euros in 2017, the loss was 101 million euros a year later.

At least not directly affected by the bankruptcy are the franchisees who operate 29 restaurants in 25 German cities. They had stressed just over a week ago that they were fully solvent. However, their restaurants, which are supplied by third-party companies and not via Vapiano, are currently also closed due to the state-imposed restrictions on public life. And what happens next is more than questionable. Because important components of their appearance on the market came from Vapiano: Finally, the restaurants adopted the Vapiano marketing concept and used the brand.

More: At Vapiano, the corona crisis has brought an already shaky business model to collapse


Disinfection instead of fragrance – the beauty company has to change direction

Darmstadt Anyone who asked Yvonne Rostock a few weeks ago about her time at the beauty company Coty, replied: “It was an exciting year.” Well, that was an understatement when she became DACH manager in January. The group, which generates more than eight billion euros a year in cosmetics, fragrances and personal care products, had already tumbled many months earlier: in mid-2019, global management announced a four-year turnaround plan, soon afterwards the traditional German brand Wella set the sales list.

And now the corona pandemic is also hailing the business with all the jars and feel-good accessories that are suddenly in the favor of consumers behind toilet paper and hand soap. Perfumeries, duty-free shops and hairdressers, where coty products from iconic brands such as Cool Water, Jil Sander or Gucci are traded and used, are closed. The group expects a 20 percent drop in sales and severe effects on profits.

So Rostock, like the competition from handle or L’Oréal changed production: In Rothenkirchen, Saxony, for example, where hair color and shampoo are usually filled, plastic canisters with blue disinfectant are now rolling off the conveyor belt – donations for care facilities and emergency workers in the region.

This is meaningful and good for the feeling of doing something – but does not help with the business turnaround. This is exactly what the Coty workforce already rotated in the research and production facilities – and in the Darmstadt headquarters with around 1,000 employees. There Rostock, after 17 years with L’Oréal in leading positions, hired at the beginning of 2019 as head of the luxury division for Germany, Austria and Switzerland (DACH).

A year later, almost exactly three months ago, she rose to become the DACH managing director – in line with the global turnaround plan, which also included reviewing the brand portfolio and a fundamental cultural change.

Yvonne Rostock

“For me, change means setting out, looking for new ways, keeping moving.”

(Photo: Coty)

Coty, whose name goes back to the perfumer and company founder François Coty, has long since grown from a tranquil family company to a globally branched group, in which the German industrial family Reimann today holds a majority of 60 percent through its holding company JAB. There you are covered when it comes to figures for regions and national companies. But Rostock says: “We are one of the leading markets within Coty and an important voice in the group.”

20 brands belong to the luxury portfolio she is responsible for, with perfumes like Gucci and Hugo Boss 2019 had a 26 percent market share in the fragrance segment in Germany and contributes to the fact that Coty is the number one in perfumes worldwide. Since the beginning of this year, Rostock has also been responsible for the “Consumer Beauty” area, which includes the Max Factor cosmetic brand; Coty is number three worldwide in decorative cosmetics.

This seems to be a solid starting point for the new strategy, because Coty wants to focus on fragrances, cosmetics and skin care, and specifically invest in high-growth brands. Rostock, which says of itself, “Brands are my passion”, accommodates this.

At the world’s largest cosmetics group L’Oréal, she was most recently responsible for the L’Oréal Paris brand from Düsseldorf; previously, she managed the Maybelline brand and rebuilt the business for Eastern and Central Europe. It also suits the strategy change towards more luxury, which the previous Jimmy Choo boss Pierre Denis should drive as the future CEO. Rostock says: “Luxury is the segment that is growing in the fragrance market.”

Expensive takeover as a burden

It is no coincidence that the billion-dollar takeover of the beauty division of Procter & Gamble (P&G) in 2016 is considered the cause of the misery. According to an industry expert, the 41 brands incorporated were to a large extent “nice to have but not a must have” – And that where brands of the middle class are rapidly losing popularity and prices are spoiled by trading on the gray market and discounts on the net.

Analysts and business partners did honor the turnaround plan. But is it still durable? The global corporation’s share price has sunk more than 50 percent since the beginning of the year. Management and majority owner JAB have attuned shareholders to rough times and recommend that the dividend be paid out in shares over the next two quarters, not in cash. JAB wants to strengthen cash reserves. The rating agencies Standard & Poor’s and Moody’s only rate the shares of the heavily indebted group as speculative.

The former P&G-Business is not just a financial burden, it is also a cultural burden: according to insiders, Coty still has no grip on the integration of the US-dominated parts of the company. Nobody wants to speak openly, the industry is tightly wired.

However, reports of disappointed employees are abundant on applicant portals, and there is also skepticism among employee representatives: the new manager and her team would be granted every success, but many employees were simply insecure and frail.

Uncertainty is particularly great among employees of the hair care brand Wella, who are researching dyeing techniques at the highest level in Darmstadt or training hairdressers. But Wella, the global number two on the market, only plays a role in Coty’s future plans for debt repayment. According to reports from the beginning of March, among other things, Henkel and the financial investor KKR be interested, by summer sales should be regulated – actually. For the employees, the time is already like chewing gum.

Rostock is not scared. Without a doubt, she knows transformations, so she was responsible for the integration and resale of bodyshop at L’Oréal. Coty also said: “Changes make an organization agile. We are more dynamic and open today than we would have been without the changes in recent years. ”

The mother of two sons, who grew up in East Germany, also refers to her private history: With the fall of the wall, she “experienced a personal change that offered me great opportunities”. She wanted to pass this on, that was her “personal mantra: For me, change means setting out, looking for new ways, keeping moving. I feel comfortable with it. ”She also recognizes parallels to her branch, which sells dreams, and is always dependent on changing tastes:“ The cosmetics industry has always been in a state of change, ”she says. This is especially true in times of Conona.

More: This luxury expert is said to renovate the cosmetics giant Coty


Carsten Knobel has to get Henkel on track

Dusseldorf Carsten Knobel doesn’t stay long with nice phrases. He demands “a clear inventory and a self-critical look at our performance – also in comparison to the competition”. To be successful in the future, handle, “Be ready to break new ground”. Because the competition, according to the new Henkel boss, remains “intense in all areas, in consumer goods as well as in industrial business”.

With the warning words in the employee magazine “Henkel Life!” Knobel wants to commit the 53,000 employees of the company to new times. The 51-year-old, who has headed the Düsseldorf group since January, must put him back on a profitable growth path. He has to solve the problems in the beauty division, strengthen the adhesives business and improve the corporate culture in the group.

How he will change the strategy in contrast to his predecessor Hans Van Bylen, he does not want to reveal until Thursday at the annual press conference. However, it is clear that he is likely to forego concrete number targets for the next four years. Van Bylen had already said goodbye to this Henkel tradition. Rather, it is expected that Knobel will outline key points of his future strategy.

The manager had to learn that times were difficult before he made his first important appearance. He actually wanted to present himself to the international financial market as the new CEO in the London hotel “The May Fair”. But because of the corona virus, Knobel canceled the glamorous event at short notice and now only presents his ideas in front of video cameras at the Düsseldorf company headquarters during a webcast.

Henkel’s business has so far not been significantly affected by the epidemic. But that could change in the next few weeks. But even without the corona effect, Knobel has enough to do to meet the high expectations of the financial market, the Henkel family and employees.

Because in December, his predecessor Van Bylen announced that the adjusted return on sales would drop to only 15 percent in the current year. Last year it should have dropped from 17.6 percent to just 16.2 percent.


This is also due to the fact that Van Bylen, who left early at the end of last year, left his successor Knobel with some construction sites. In particular, the problems in the smallest Beauty Care division with brands such as Schauma and Syoss have so far not been solved. The business is split into two: it is going well in the professional business with hairdressers and badly in mass business.

Van Bylen, who moved to the top in May 2016, did not want to make a clear decision: either to sell the unprofitable mass business or to sell the entire beauty care division. “We see good opportunities to accelerate growth,” he repeated on many occasions.

Small luxury shop

“Henkel has had no real innovations in the beauty care business in recent years,” criticizes Heiko Feber, an analyst at Bankhaus Lampe in Düsseldorf. “There are also no luxury brands to compete with L’Oréal or Beiersdorf keep up. “

In this business, Henkel is small compared to its competitors. The US group Procter & Gamble (P&G) increased its organic sales last year by eight percent to $ 12.9 billion. L’Oréal recently had a turnover of almost 27 billion euros. At Henkel, organic growth fell by 2.3 percent to EUR 2.9 billion in the first nine months.

But Knobel could expand the beauty business through a takeover. The Wella brand is currently back on the market. The US company Coty wants to get rid of it after he bought it from P&G in 2015. At that time Henkel was already working on Wella, but then got out of the bidding race because the price was too high for the Düsseldorfers and the overall package did not really fit.

The possible purchase is controversial among analysts. “I consider the Wella takeover to be risky given the stipulated price of more than 15 times EV / Ebitda,” says Jörg Philipp Frey from Bankhaus Warburg in Hamburg. “The two previous owners have not succeeded in making Wella a success.” Van Bylen had already tried last year to bring the business with beauty care products and detergents and household care products back to the fore.

At the beginning of the year, he made around 300 million more available for marketing. But the big growth effect has so far failed to materialize.

In bulk business with consumer goods, it is important to consistently invest in marketing, says Fabrice Roghé, consumer goods expert at the Boston Consulting Group (BCG). “If you neglect that, it will take revenge later.” Van Bylen’s predecessor Kasper Rorsted had trimmed Henkel for profitability. Investments in growth were neglected.

In addition, Knobel must succeed in stabilizing the large adhesives division in particular. In the first nine months of 2019, it generated 47 percent of Group sales of EUR 15.1 billion. It ensured high sales and returns for many years. However, the business field weakened recently because Henkel was feeling the doldrums in the automotive industry in its core business with industrial adhesives.

Knobel seeks closeness

Jan-Dirk Auris, responsible for the adhesives division on the board, is encouraging himself for the next few years. “I am firmly convinced that we will grow strongly in the three major areas of sustainability, mobility and networking in the future,” he told Handelsblatt last year. Above all, he hopes for a boom in electric cars.

Knobel should like that. Above all, he has to motivate the employees to support his strategy. Because “many employees feel that it is time to set more positive accents again,” as Birgit Helten-Kindlein, head of the works council, once remarked. Unlike Van Bylen, Knobel is looking more closely for employees, for example at lunch in one of the canteens on the company’s premises in Düsseldorf.

It is well received. “Some employees like to take a selfie with the CEO”, is heard.

Simone Bagel-Trah, head of the supervisory board and shareholders’ committee, would still prefer if Knobel did one thing above all: to stop the downward slide in the share price since June 2017 from 127.75 to just 85 euros.

More: Beiersdorf is growing, but car crisis and corona bring uncertainty – the flash analysis.