Container of remdesivir in a Gilead laboratory Image: AP
Shares in pharmaceutical and biotech companies are coming to the fore in the hope of protection against the corona virus. But in this difficult-to-understand industry, investors should take several pieces of advice to heart.
Dhe legendary co-founder of the software company SAP, Dietmar Hopp, turned 80 on Sunday, which even earned him congratulations from the Federal President. It is particularly noteworthy that Frank-Walter Steinmeier also talks about an investment by Hopp that has become known in these wild times: “With your work as a founder and patron you are changing the lives of many people,” the Federal President is quoted as saying. “In these times, we are watching your biotech company’s progress in developing a vaccine against the terrible coronavirus.”
This means the relatively young pharmaceutical company Curevac. In Tübingen, it is working flat out on a vaccine against the new coronavirus. Curevac is not yet on the stock market, but there are also many other listed pharmaceutical and biotech companies whose stocks have come under heavy scrutiny in the hope of vaccines and cures for the coronavirus. These include giants like the American company Gilead, or more agile speed boats like the Mainz company Biontech.
The rating agency warns of a significant deterioration in results.
Frankfurt The rating agency Standard & Poor’s (S&P) has given it a thumbs-up because of the economic impact of the corona crisis at Commerzbank, Deutsche Bank and other German financial institutions. At Commerzbank, S&P downgraded the credit rating by one grade to “BBB +”, the outlook remains “negative”, as the credit rating officers announced on Thursday.
At Deutsche Bank, S&P confirmed the rating of the creditworthiness with “BBB +”, but lowered the outlook to “negative” from “stable”. While the creditworthiness guards doubt that Commerzbank can implement its new strategy “Commerzbank 5.0”, including the planned sale of the Polish subsidiary mBank as planned, they see the restructuring of Deutsche Bank basically on track. Commerzbank and Deutsche Bank declined to comment.
With “BBB +” the credit ratings of the two largest German private banks are still three levels above the junk level. A negative outlook means that the credit rating is in danger of being lowered.
S&P warns that even if the economy begins to recover in the third quarter, all banks will see a significant deterioration in results, credit quality and, in some cases, capital resources. The risks that the economy will recover later and the situation will worsen are considerable.
At the Sparkassen-Finanzgruppe Hessen-Thüringen, which includes Landesbank Hessen-Thüringen (Helaba), S&P confirmed the credit rating with “A”, but lowered the outlook to “negative” from “stable” due to the corona crisis.
At the leasing provider Grenke The rating with “BBB +” also remained stable, here too the outlook was reduced to “negative” from “stable”. At Deutsche Pfandbriefbank (pbb), S&P left both the credit rating “A-” and the outlook “negative”.
More: False incentives, fraud, debts – the side effects of the corona crisis.
Hamburg Venture capitalist Klaus Hommels criticizes government aid for listed companies such as Tui and Adidas. The state subsidized the corporations “with a loan, although they could simply make a capital increase, in which the mostly foreign existing investors would have to invest,” he told the Handelsblatt. “We protect foreign investors in listed companies. This is where money comes in without old investors reinvesting. “
Hommels supports the European start-up lobby United Tech of Europe. “We want to protect start-ups, not venture capitalists. Therefore, a promotional measure makes sense in which the venture capitalists refill their own money, which is then replenished by the state, ”said the founder of the venture capitalist Lakestar.
But not all young companies could survive: “I think some startups will die that were only kept artificially alive anyway. For this you concentrate on the promising ones. If the government increases such rounds, even more money could flow into better projects in the crisis. ”
Hommels calls for government co-investments in collaboration with the industry. “Therefore, we also need a relevant advocacy group in Brussels with its own ethics, which in itself ensures that no free riders appear,” he said. However, individual European venture capitalists tried to take advantage of the situation. “Some are behaving impossible. We want to counteract this at the association level. It is not about winning the crisis, ”said the 53-year-old.
He sees the crisis as an opportunity for founders to concentrate on real problems. This could help Europe to become more independent of the United States in critical infrastructure. “We cannot rely on Americans for all system-related things. Think about it: The Americans could turn off the credit card infrastructure for us at any time, ”warns Hommels.
“Wouldn’t the biotech company Curevac be from Germans like that? SAP-Funded with founder Dietmar Hopp, the Americans would have snatched this vaccine developer out of our hands. This is a realization that is finally pervading: We have to finance our economy ourselves. ”
Read the entire interview here:
Mr. Hommels, have you postponed or canceled investment rounds yourself because of the crisis? The most important rule for me is: A promise, also verbally, has to be kept. This is a cultural asset because we come from the land of good merchants. We continue to look at new opportunities as normal.
There is no hesitation? Well, a no-go is when founders arrive with documents from pre-crisis times that they have not adapted to the new times. In addition, there is now a screening process for everyone: A few months ago, funding was less critical. Now there is a harder selection.
Is it bad? On the contrary: that brings clarity. This is always the case in difficult times. In the financial crisis, for example, some of today’s very big companies were built – like Zalando, Uber and Airbnb. Why? Because their ideas are based on real needs, which are much more obvious in tough times. More modest means are then sufficient for such ideas.
In your opinion, what are these real needs at the moment? The topic of helping – something like Nebenan.de. In addition, delivery services go through the roof. Above all, venture capitalists are given a new role. If the biotech company Curevac had not been financed by Germans like SAP co-founder Dietmar Hopp, the Americans would have snatched this vaccine developer out of our hands. This is a realization that is finally pervading: We have to finance our economy ourselves.
Do we not have to count on fewer rounds of financing from overseas simply because travel is currently hardly possible? On the other hand, the acceptance of video calls has increased. Before Corona, I would have said that you should have met in person first – that’s always better because you get a feel for whether it fits on a human level. In the meantime, however, it is totally accepted to only meet virtually.
Would you make a deal if you only knew people by video? Meanwhile yes.
They have brought together start-up associations from several European countries – probably also via video calls – and are calling for more coordination on the current rescue plans. Why? Many small associations are not heard in Brussels, so we have to speak with one voice there.
Isn’t your industry lobbying much better than in previous crises? In Germany in particular, start-ups were included in the rescue packages very early on. Yes that’s true. Through the start-up association, we led Christian Miele with Jörg Kukies, Secretary of State for Finance, Thomas Jarzombek, Digital Representative, and KfW Capital’s Chief, Dr. Jörg Goschin, ideas exchanged. The three do a great job in this difficult situation. However, aid for start-ups is basically not government programs, but is based on initiatives by individuals. Just like Kukies and Jarzombek in Germany, individual politicians are doing this in other European countries. As associations at European level, we want to provide you with an overview and contacts.
How do you start? First we put an overview of the respective national programs online. We don’t want to evaluate, we want to enable a comparison and exchange of ideas.
Why is it needed? We need it to prevent deadweight effects. Otherwise no politician can assess what the relevant demands are. That is why we also need a relevant advocacy group in Brussels with its own ethics, which in itself ensures that no free riders appear.
Do you see black sheep in the industry? Yes, there are also venture capitalists in Germany who no longer stick to existing, written financing commitments in the crisis. Some are behaving impossible. We want to counteract this at the association level. We are not concerned with being crisis winners. Therefore, the aid programs also take some time, because it is very complicated to prevent deadweight effects.
Nevertheless, there is criticism of state aid for start-up financiers. After all, there is already the word risk in the risk capital asset class – and every investor should expect to lose his entire stake. At first glance this is understandable, but actually pure polemic. Have a look who really should receive billions of state aid: the listed companies Adidas and Tui. But there are hardly any German shareholders behind it. The state supports this with a loan, although they could simply make a capital increase, in which the mostly foreign existing investors would have to invest. In the case of listed companies, we protect foreign investors. This is where money comes in without old investors reinvesting. However, we want to protect start-ups, not venture capitalists. Therefore, a promotional measure makes sense, in which the venture capitalists refill their own money, which is then replenished by the state.
Couldn’t venture capitalists simply inject enough own money, which is still available in most funds? We plan with different scenarios when we finance start-ups. A reserve is always calculated. But such a lockdown case, in which sales are zero for months, is of course not factored in, so we technically don’t have the money at our disposal. The start-ups therefore need state aid in order to survive a break of several months unscathed – for this special situation alone.
Doesn’t that help you as a venture capitalist? No, it’s about the survival of innovative start-ups. I myself could just sit back and relax. But we go in full, help the companies, do 1000 things. We are even considering helping KfW Capital with personnel. It’s actually nice that we can now do something together with colleagues like Holtzbrinck Ventures and Eventures. It is a clean event.
They have long advocated that European start-ups should be less dependent on money from the United States and Asia. Do you think that the renationalization tendencies in the corona crisis, for example with closed borders, bring the topic more into the general consciousness? Yes, because we are now seeing what such a sell-out means: If we could not independently support start-ups in Europe, America could have stolen the German vaccine invention from Curevac. This concerns us all and certainly contributes to the general awareness of the need for action.
The Americans deny that. And wouldn’t that be an exception that occurs every 100 years anyway? No, that also applies to artificial intelligence, climate issues and many other systemically relevant fields. Do we want to fight the pandemic of movement data from Google and Apple be dependent? We cannot rely on Americans for all system-related matters. Think about it: The Americans could turn off the credit card infrastructure for us at any time.
Does the crisis raise awareness of this? If we do nothing there, we cannot act autonomously and become technically dependent. That mustn’t happen.
The idea of economic self-sufficiency has long since been a thing of the past in times of globalization, and many corporations operate globally without discrimination. Why should it be different in the start-up area? I am not concerned with start-ups, but with system-relevant infrastructures. However, these are also developed by start-ups.
The alternative would be an even stronger anchoring of free trade, so that national egotisms are excluded – for example a new edition of the failed transatlantic free trade agreement TTIP. I would have agreed with you when the President was still called Barack Obama. But at the moment, the politics of the Americans are not reliable.
Do you think that the crisis can lead to a stronger European response, for example in the area of start-up financing? In any case. There is now a chance to make the voice of start-ups audible in Brussels and explain what kind of regulation we need after the crisis.
How fast do you think the situation will return to normal? I can’t say that – at the moment everything depends on how quickly we get a vaccination.
Do you dare to predict how severe the slump will be?
I think some startups will die that were only kept artificially alive anyway. For this you concentrate on the promising ones. If the government increases such rounds, even more money could flow into better projects in the crisis.
Mr. Hommels, thank you for the interview.
More: Dependency on foreign donors is becoming a problem for start-ups
Frankfurt Without broad immunization of the population against the causative agent of Covid 19 disease, there will be no return to normal. This conviction is becoming increasingly popular both among virologists and in politics.
The development of a vaccine is thus the linchpin in the fight against the corona crisis. In the opinion of the American infection specialist Mark Denison, a kind of “Manhattan” project, as was once the case with the development of the American atomic bomb, is ultimately necessary to clean up the threat from Sars-CoV-2 and possible other corona viruses – a large-scale, concerted research project.
No such centrally controlled initiative is in sight. Vaccine development is now in full swing. After all, more than 80 vaccine projects have already been initiated worldwide. More than a dozen product candidates are likely to go into clinical trials this year or have already started. This increases confidence among many observers that the first vaccines may be available in 2021.
Mainz-based Biontech and its US partner Pfizerwho have now received approval for the first clinical tests are moving alongside competitors such as the US companies Moderna and Inovio as well as two Chinese companies – at the forefront in the fight against Covid-19.
According to experts, the largest possible number of projects is urgently required in view of the great need for vaccines and the many imponderables. “Nobody can say at the moment which type of vaccine will be the most successful and which technology will lead to approval fastest,” says Rolf Hömke, research spokesman for the pharmaceutical association VFA.
According to previous experience, new vaccine developments sometimes take decades. The approval for an Ebola vaccine four years after the start of research is already very quick. There is therefore no shortage of skeptical voices warning of excessive expectations regarding vaccine development.
Severin Schwan, the boss of the Swiss pharmaceutical giant Roche For example, it sees a likely scenario that no vaccine should be available before the end of 2021. And Geoffrey Porges, pharma expert at investment bank SVB Leering, even estimates that it will be possible to launch a mass-market vaccine in two to three years at the earliest. And even after that, it would still take years to generate herd immunity with a vaccination campaign.
The biotech companies Moderna and Biontech, on the other hand, are demonstrating much greater confidence. Both rely on a completely new vaccine technology based on messenger nucleic acids, the so-called messenger RNA (mRNA).
Technology is at an early stage
The basis for this is the function of RNA as an intermediate link between genes and proteins. In principle, mRNA can be used to reprogram body cells to produce certain proteins. The RNA specialists are trying to use this effect to develop both medicines and vaccines. The key challenge is to prepare the artificially produced mRNA so that it cannot be rejected by the immune system before it works in the cells.
The technology is still relatively early in development. So far, there is no approval for drugs or vaccines made from mRNA. Work on Covid-19 vaccines, however, offers companies an opportunity to help their technology break through in a particularly important field. This has also given the RNA pioneers a boost on the capital market.
No one can say at the moment which type of vaccine will be the most successful. Rolf Hömke, research spokesman VFA
Moderna is now valued at around $ 16 billion. Biontech weighs in at just under eleven billion dollars after the price rose by around twelve percent on Tuesday. The Mainz-based company, which is still half owned by the Strüngmann family, is the highest-rated German biotech company.
Biontech went to the US technology exchange Nasdaq last fall with an initial valuation of just under $ 4 billion. A listing in Germany was considered hopeless at the time.
Faster and cheaper
Compared to conventional vaccines, which are based on killed or modified viruses as well as fragments of viruses, the method offers the advantage that product candidates can be generated much faster. On the other hand, the development can theoretically be expanded faster and cheaper if successful.
The first Moderna product candidate entered clinical tests in March. Biontech is now following with four product candidates, which are initially to be tested in parallel on around 200 patients. In a second stage of the tests, Biontech and Pfizer want to add 500 further probants to the study, including older and particularly vulnerable people. Further clinical trials are planned in the United States and China, where Biontech is cooperating with the Chinese pharmaceutical manufacturer Fosun.
The Mainz-based company specializes in cancer therapy and has already clinically tested mRNA products as therapeutic vaccines in more than 400 patients in this area. Like its US competitor, Biontech therefore already has clinical experience with this type of active ingredient.
Company boss and founder Ugur Sahin is accordingly confident that even in the fight against Covid-19, strong immune reactions can be stimulated with mRNA vaccines.
Biontech and Pfizer start testing possible corona vaccine
Biontech is testing the four product candidates in doses between one and 100 micrograms – indirectly signaling that it is hoped that very low doses will produce strong protective effects. This quality is relatively important in view of the capacity expansion for the production of large quantities of vaccines. The lower the dosage, the cheaper and faster it will be to produce large quantities of vaccine for mass use.
Compared to the US competitor Moderna, which is testing its product candidates in doses of 25 to 250 micrograms, this indicates a certain technical advantage for the Mainz company. However, clinical studies in the next few months are unlikely to show whether this is confirmed.
Regardless, Pfizer and Biontech have announced plans to build capacity for “millions of vaccine doses” for the European and American markets by the end of the year. For 2021, “rapid expansion of the capacity to manufacture hundreds of millions of cans” is targeted. Production is to take place in both Biontech and Pfizer plants.
The two companies back their ambitions with high investments. To this end, Pfizer will initially pay $ 185 million to Biontech as part of the alliance, of which $ 72 million in advance and 113 million euros in the form of a capital participation. Depending on certain development successes, the Mainz biotech company is also entitled to further payments of up to 563 million euros.
The corona alliance of the two companies is one of the largest deals in the field to date. Biontech has also entered into a similar alliance with Pfizer with the Chinese company Fosun.
Similar to Biontech, that of SAPFounder Dietmar Hopp financed Curevac in Tübingen on an RNA-based vaccine. The start of clinical trials is planned for early summer here. The Belgian RNA research company Etheris meanwhile plans to go into clinical tests later this year with an RNA vaccine administered as a nasal spray.
In addition to the projects of the RNA specialists, several products based on established vaccine technologies have already started the clinical tests. Similar to the medication sector, these are candidates for whom certain development steps had already taken place before the new corona virus even appeared.
In particular, this includes vaccine projects against Sars and Mers infections, which are also caused by coronaviruses. Typical examples of this are the projects of Oxford University and the German Center for Infection Research. The US group Johnson & Johnson focuses on experience in developing an Ebola vaccine with his major project.
These vaccines are mainly based on so-called viral vectors, i.e. modified viruses that carry individual components of the Covid-19 pathogen. The challenge for these products is, among other things, that the production is more complex than for RNA products. Because the viruses first have to be propagated in cell cultures. The same applies to protein-based vaccines that are generated using genetically modified microorganisms.
The target for the vaccines, including the products from Moderna and Biontech, is practically the same target, the so-called spike protein on the shell of the coronavirus. The approximately 100 protein bumps on the surface of the pathogen give it its typical appearance and are considered crucial for its ability to penetrate cells.
Specifically, almost all vaccine projects aim to prophylactically activate the immune defense against these spike proteins and thus prevent viruses from entering the cells and multiplying.
More: New technologies are stirring up the vaccine market
if Germany can show something with pride in the battle of the big digital corporations, it is SAP from Walldorf, the invention of five ex-IBM forces 48 years ago. So it borders on self-harm that after only six months co-CEO Jennifer Morganalready logged out again. So forget all the great portraits of the first boss in the Dax, delete the hymns of praise of the chairman of the board and co-founder Hasso Plattner. According to our knowledge, the implosion at the top is also the result of an internal power struggle. Co-boss Christian Kleincarries out a strong standardization and centralization, the American wanted the subsidiaries more independence to let. Even the PR candle from Walldorf cannot hide the dispute between vanities, according to which clarity and determination are necessary in the Corona period. Aristotle thought that to hide a mistake with a lie was to replace a spot with a hole.
In the beginning it advised Robert Koch Institute refraining from autopsying Covid 19 dead, it is too dangerous. From Basel in Switzerland, where there were fewer concerns, the first results of an examination of 20 coronavirus deaths are now coming. They suffered from high blood pressure and Overweight, but above all there was a serious disturbance of the Microcirculation the lungs – the oxygen exchange no longer worked. The Hamburg medical examiner Klaus Püschel also had 100 virus victims examined, according to a report by NDR, WDR and “Süddeutscher Zeitung”. Similar to Basel is also here none of the dead without previous illnesses been.
New York futurologist Amy Webb speaks this week in the “Handelsblatt Disrupt” podcast.
(Photo: Getty Images)
Has become a trend researcher Amy Webb made a name worldwide. This week the New York professor speaks for Strategic future planning in the podcast “Handelsblatt Disrupt” with my colleague Sebastian Matthes. In the interview, Webb predicts the division of the world into two: in part with the People’s Republic of China and its partners, who used a digital surveillance infrastructure, as well as the rest of the other countries. China is using the crisis to expand the Artificial intelligenceto collect even more data, believes Webb. But data are like Algorithms the weapons of the future. And so it does Futurologist in the end worries “that the global pandemic will trigger an economic-technological war that we have never seen before”.
The days of rest in the Dax group Wirecard are over: Today, the final special report of KPMG’s auditors is to be published – on allegations dubious contracts and partners who have been featured in a Financial Times (FT) series. Bafin boss Felix Hufeldwants to study the work of the auditors carefully: “Payment service providers, like banks, must adhere to a comprehensive set of rules.” Bafin’s own investigations into who is involved strategic sales benefited from Wirecard shares prior to the release of “FT” items have been completed. The investigation by the Munich public prosecutor’s office, which uses the Bafin work, continues. According to our information, the German auditing agency for accounting has meanwhile also an investigation of the Wirecard balance sheet check initiated. So this company will soon be as open as an oyster after consumption.
Series hits like “Tiger King”: Netflix increases the number of paid subscriptions.
Corona time isNetflix-Time. You follow “social distancing”, stay at home and watch series after series, film after film. There is nothing else to be inferred from the most recent figures, the Streaming primus announced last night. After that, the number of paid subscriptions rose in the first quarter by 15.8 million to almost 183 million – which exceeded both the own forecasts and the expectations of the analysts. Series hits like “Tiger King” around Joe Exotic and its big cat zoo are so well received that Netflix is expecting 7.5 million new customers worldwide this quarter. Since the profit has also doubled at the moment, the share is growing again. The company of Reed Hastings is now worth more than the big rival Disney.
The Germans decided to end the season prematurely Handball player – and selected it THW Kiel according to an elaborated calculation model to master. in the Soccer After the Belgian league, the Dutch league also decided to end the season due to the corona restrictions. And in Scotland there is also an end in sight – that of the European association Uefa, contrary to what was announced, will not be punished with the exclusion of clubs from competitions. New regulations that take the corona virus into account are to be presented tomorrow, Thursday. That day, too German soccer Bundesliga decide that ghost games should continue in May. This is the only way to secure a rate of EUR 230 million from Sky for broadcasting rights – and many clubs first before broke rescue.
And then there’s the world performance artist Marina Abramovicwho first silenced her for years Online campaigns breaks against them. “Can’t you stop doing that?” Asks Abramovic, “don’t you see, that’s the art I’ve been doing for 50 years?” She really isn’t a “satanist” – a suspicion that her opponents have been stirring up since becoming one “Spirit Cooking” dinner loaded. Recently, ongoing anonymous online protests have resulted in Microsofta work with Abramovic, who promoted digital technologies, removed from the YouTube platform after 24,000 dislikes. She is looking for a positive way out of the matter, says the native Serb, “anxiety is the worst human emotion ”.
I wish you a positive, completely fear-free day. And if it consoles you: in 2020 we will experience art and performances again in the museum.
The double leadership at SAP around Jennifer Morgan and Christian Klein failed.
Germany has waited for years, oh what for decades, for a woman to be at the top DaxGroup is moving. Again and again names of promising candidates were circulating, it was of secondary importance who it would be, even in which company. It was just a matter of showing that even with us a woman can make it to the top.
The Dax is the leading German index, the 30 companies listed in the Dax are in the public interest like no other. Even if only 3.5 percent of all employees work there. Your bosses are heard everywhere.
And so October 11, 2019 was an important day for Deutschland AG. With the appointment of Jennifer Morgan and Christian Klein as Co-CEOs, the Supervisory Board appointed SAP not only the first Dax boss, but also committed herself to the rather rare – but popular with the software manufacturer – leadership model of the top two.
It was a strong statement of diversity in several ways: An American becomes the co-boss of a technology company founded in Germany, which is now one of the most valuable in the country. The public response was corresponding. In some cases, it bordered on jubilation arias on Morgan, combined with the hope of further promotions of women to top positions in the German economy.
Half a year later, it’s all past. Morgan is leaving SAP, and soon. Off, over, end. So great was the euphoria when she was appointed, so great is the disillusionment. And yes, the disappointment with SAP and the top levels.
Because the official reason that the corona crisis needs “clear leadership responsibility” is thin. Ultimately, it doesn’t matter why the double leadership at SAP failed, or from which side the decision came.
The fact is: it didn’t work and the collateral damage is huge. The signal that the first Dax boss is leaving after a few months and the man stays is devastating.
The filling of the CEO post is the most important personnel, which is often planned and prepared for years. One would think that everything that can lead to separation after such a short time, whether views on key strategic questions or character traits, has been clarified in advance. All the more so in the case of personnel with such an external impact as the appointment of a woman to be the first Dax boss.
Especially since SAP supervisory board chief Hasso Plattner let Morgan and Klein know that both had been “thoroughly prepared for a leadership role at the top of the company” and “complement each other perfectly”. Whatever motivation triggered the separation, it is questionable whether they justify the fatal effect.
More: After a few months, the double leadership broke: Jennifer Morgan leaves SAP, Christian Klein manages the company alone. The personnel raises many questions.
Dusseldorf Flash flash, broad smile, demonstrative unity: when the SAP-Chefs Christian Klein and Jennifer Morgan presented to the German public for the first time at the end of January, the spirit of optimism was noticeable. At the annual press conference, the two talked about how they wanted to increase customer satisfaction and develop software for recording CO2 emissions, often introduced with “Christian and I” or “Jen and I”.
A few weeks later, the world looks different – and the “we” is over. On the night of Tuesday, SAP announced the end of dual leadership after only six months. Morgan (49) had agreed with the Supervisory Board “by mutual agreement to leave the company on April 30,” said the group. Klein (39) will take over the function as spokesman for the board alone.
The software manufacturer cites the worldwide corona epidemic, which was still a largely Chinese problem in January, as the reason for the surprising step. “In the past few weeks, Jen and I have found that SAP needs to act quickly and decisively and have a very clear management structure in the current situation,” said Klein in a conference call. “It was not a personal matter.” Thereupon, according to the official reading, Morgan resigned.
In fact, the corona crisis, which has almost brought the economy around the world to a standstill, poses major problems for SAP: many companies are cutting down their IT budgets. The software manufacturer has therefore lowered the forecast for the current year a few days ago.
Regardless of this, according to Handelsblatt information, there were disagreements about the strategy – the main focus was on the extent to which the Group organisationally integrated the acquisitions. Either way: The departure once again creates unrest among the workforce and uncertainty among the shareholders. The SAP rate fell more than five percent on Tuesday, albeit in a negative environment.
A proven leadership model
At SAP, double leadership is a proven management model for difficult times. In 2008, during the financial crisis, the group named Léo Apotheker as the new co-boss alongside Henning Kagermann, who stepped down in mid-2009. After Apotheker’s sudden departure in early 2010, Jim Hagemann Snabe and Bill McDermott took over. And when the American McDermott, who had been managing SAP alone since mid-2014, announced his resignation last October to become a small US cloud provider ServiceNow to change, Klein and Morgan were appointed as a new leadership duo.
The job description provided for a clear division of tasks: Klein, who deals intensively with operational processes and also controls, should ensure that SAP better links the many products in the portfolio – seamless integration has been one of the company’s promises since its foundation, Customers are vehemently demanding them.
Morgan, in turn, was supposed to leverage her sales talent, which she had demonstrated in the North American business, and lead the cloud business that is critical to SAP’s growth.
There is no longer any question of that. “I am firmly convinced that the co-CEO model has its place and its time – after all, I was once the co-CEO,” said Hasso Plattner, chairman of the supervisory board, in an email to the approximately 100,000 employees in the Handelsblatt . “But now is not the time.”
The corona crisis is comparable to nothing and makes “speed, clarity and determination urgently necessary,” emphasized the influential co-founder and major shareholder. Therefore, a single board spokesman is needed “for the benefit of our company and our customers”.
However, this reason irritates many, both internally and externally. Why, the question arises, should the division of tasks between two experienced managers only work in boom times, but not in the economic crisis with increasing complexity?
In addition: “SAP assumes a rather short period of impairments with an early end,” says Mirko Maier, analyst for the technology sector at Landesbank Baden-Württemberg (LBBW). According to the software manufacturer’s forecast, the situation should improve again by the end of the year.
One reason for the separation is probably the realignment of SAP. The management duo started with the promise to increase customer satisfaction. That leaves something to be desired: Many companies complain about inaccurate announcements and the lack of integration of the many solutions in the portfolio. The German software manufacturer stands for an integrated program package that customers can use to handle business processes efficiently, and it stands for reliability – which also justifies the high prices.
To ensure this, SAP has undertaken several restructurings in the past months. All units that appear to customers are now bundled with sales manager Adaire Fox-Martin, a large part of the product-related teams are under Thomas Saueressig, who is responsible for the “Product Engineering” department. Subsidiaries such as Ariba and Success Factors have lost a lot of independence and only exist on paper.
The Group has also largely integrated the service into the various departments; the responsible board member Michael Kleinemeier will retire at the end of April. In short: After the numerous takeovers of cloud specialists, who McDermott had long granted a lot of autonomy, SAP is now moving in the opposite direction: Management is bundling more and more power at its headquarters in Walldorf.
In the course of this, Morgan has also given up responsibilities – in addition to market research specialist Qualtrics, there is not much left in her department. She is said to have blocked herself against extensive integration of the subsidiaries for a long time.
Sales must go virtual
Now Klein continues with a clear team – the SAP board has only five members, four of whom are from Germany and are male. Only the Irish Adaire Fox-Martin ensures a little diversity in the leadership. The committee has the demanding task of continuing to work on the products and at the same time keeping the business going during the recession.
The crisis is likely to hamper new business for months or even years. “If there is a major global recession, companies will postpone all IT expenses that are not absolutely necessary,” says Christian Hestermann, analyst at the market research and consulting firm Gartner.
SAP supervisory board chief Hasso Plattner
“Speed, clarity and determination are urgently needed.”
Large and complex projects such as the introduction of the S / 4 Hana software, with which organizations control their business processes, can be affected by this, according to the software expert. “Many companies will rethink their plans and postpone them for a year or two.”
Especially since SAP still has to do some persuasion, as Hestermann emphasizes: “The majority of existing customers find it difficult to switch to S / 4 Hana, and that’s even more so now.” The expensive implementation is not worthwhile for many companies. According to calculations by Gartner, less than 15 percent of the approximately 35,000 existing customers have started to switch to the version that has been on the market since 2015.
In this difficult situation, SAP now has to sell and introduce products virtually virtually – after all, it is impossible to predict how long the corona crisis will last, says Holger Müller, an analyst at Constellation Research. The virtual introduction of new IT systems has long been established in the industry. SAP also masters this, as the subsidiaries Success Factors and Qualtrics show.
In the case of complex projects, however, the German group is “still behind”: “This requires a change in the business model and mentality,” says Müller. In future, only Christian Klein will be responsible for this as sole CEO.
More: End of double leadership at SAP – co-boss Jennifer Morgan leaves
HSubstantial upheavals on the oil market hit the German stock market heavily on Tuesday. Unexpectedly brighter economic expectations did not help. The Dax increased its losses to 3.2 percent in the afternoon at 10,331 points.
The EuroStoxx 50 as the leading index of the euro zone lost as much as the Dax. For the M-Dax of medium-sized German values, the downturn was not quite as steep with minus 1.7 percent to 22,078 points.
There is currently a wide gap between supply and demand on the oil market. The corona pandemic is paralyzing the American economy, which is already floating in cheap oil – the need for the raw material is falling sharply as a result, and oil storage threatens to overflow. Should America’s oil industry with its many smaller companies come under even greater pressure, experts fear a wave of bankruptcies that could possibly also burden the financial sector.
Meanwhile, after a massive slump in the previous month due to the corona crisis, the economic expectations of the Mannheim ZEW Institute brightened significantly in April. The indicator rose much more strongly than analysts expected. “But it has to be taken into account that the rise in expectations is based on a dramatic slump in the situation,” said the economists at Helaba.
In the Dax, the focus was on SAP papers, less with final quarterly figures and more with personnel. So it irritated Börsianer that Jennifer Morgan left the software company as co-CEO and Christian Klein would be the sole boss after the two had started as a duo just over half a year ago. Barclays analyst James Goodman spoke of a big surprise. Morgan did a very good job. It was also criticized that SAP had lowered expectations for the free inflow of funds. The shares lost a good three percent.
Sartorius’ shares reached a further high at EUR 273, even though the group is reviewing the dividend. The pharmaceutical and laboratory equipment supplier now promises stronger sales growth for the full year due to the acquisition of Danaher parts. An expert also highlighted the strong order intake in the field of bioprocess technology. Most recently, Sartorius shares gained just under four percent.
In view of the concerns about the situation of the global economy associated with the oil price shock, cyclical values in particular came under pressure. This was shown in the Dax by the shares of Infineon and Volkswagen, the weakest index values, each losing more than six percent. In the front of the Dax, the Beiersdorf shares were a typically defensive value. The consumer goods manufacturer’s papers grew more than 1 percent and were the only winner in the Dax.
A new record high at Hellofresh with 33.32 euros caused bright spots in the cloudy market environment. In the corona crisis, the kockbox manufacturer particularly benefits from the trend to cook more at home. Recently, the paper became more expensive by more than five percent.
The euro fell somewhat. In the afternoon, the common currency was $ 1.0838. The European Central Bank (ECB) set the euro reference rate at $ 1.0860 on Monday.
In the German bond market, the Rex index fell 0.19 percent to 144.69 points. In return, the current yield rose from minus 0.48 percent the previous day to minus 0.45 percent. The Bund Future advanced by 0.34 percent to 173.10 points.
View of the Dax curve in the Frankfurt trading hall.
Dusseldorf The German stock market cannot escape yesterday’s drop in the price of oil. The DAX is down 2.3 percent in the morning trade at 10,435 points.
The topic on the markets is the oil price collapse on Monday evening, which occurred in Germany after the market closed. In the United States, the price of oil plummeted for the first time in its history due to the coronavirus pandemic. Sellers had to pay money for someone to take their oil: The price of the futures contract for the US variety WTI for May plummeted Monday by almost $ 56 to minus $ 37.63 a barrel (159 liters).
Dusseldorf The German stock market cannot escape yesterday’s drop in the price of oil. Of the Dax is down 1.9 percent in the first hour of trading at 10,473 points.
The topic on the markets is the oil price collapse on Monday evening, which occurred after Germany closed on the stock exchange. In the United States, the price of oil plummeted for the first time in its history due to the coronavirus pandemic. Sellers have to pay money for someone to take their oil: The price for the US WTI futures contract for May plummeted Monday by almost $ 56 to minus $ 37.63 a barrel (159 liters).
Why this is relevant: Should the US oil industry with its many smaller companies come under even greater pressure, experts fear a wave of bankruptcies that could possibly also burden the financial sector.
The other burden is the new quarterly figures. Already on Monday, exchange expert Stephan Heibel warned after evaluating the Handelsblatt survey Dax-Sentiment: “Downside potential threatens during the reporting season, because company figures will show the extent of the economic damage of the quarantine measures in the coming days and weeks”.
This forecast became reality a day later: IBM was the first company in the US tech industry to present figures and, due to the extreme uncertainty, canceled all forecasts for 2020. Even if company boss Arvind Krishna emphasized the healthy balance sheet and financial situation of the company. After all, the “high dividend is certain”.
But Wall Street does not want to hear anything about it: the stock plummeted by a good four percent. And IBM paper also fell by around four percent on the German stock market.
In the US, the other technology giants are like Microsoft, Amazon (AWS Cloud), Google Cloud, Alibaba or Oracle will follow in the coming days. They will not be able to avoid every negative trend either.
In Germany, accordingly SAP– Share under pressure, which has to work out two negative reports. In addition to the weak numbers from IBM, the company separates from its co-boss Jennifer Morgan in the midst of the corona crisis. The 48-year-old will leave SAP on April 30.
The share loses 2.6 percent at the opening. The software manufacturer is the most valuable DAX company and, due to its high market capitalization, has the greatest influence of all 30 values on the price development of the stock market barometer.
It doesn’t help that Europe’s largest software company made a significant profit in the first quarter. Between January and March, Walldorf residents earned 811 million euros. SAP had already released preliminary figures and had to cut its annual forecast due to the Corona crisis. The final indicators from SAP corresponded to the preliminary, a dealer said.
The requirements from overseas are weak: the oil price collapse has not only burdened the US stock exchanges, but has also clearly lost the Asian markets. Futures on the US selection index S&P 500 have turned negative after initial gains, signaling a weaker opening of the trade.
Look at the individual values
Drägerwerk: The medical technology manufacturer, which is very busy due to the corona pandemic, has apparently raised new capital. The manufacturer of ventilation machines and other devices for intensive care medicine claims to have gross proceeds of EUR 76.50 million from the issue of around one million preferred shares. The shares were placed with institutional investors by means of an accelerated placement process. The share loses 1.7 percent. Last week had the hedge fund Sandbar Asset Management its speculation on falling prices of the Drägerwerk share has increased to 0.71 percent three freely tradable shares.
Danone: Due to the uncertainties resulting from the corona pandemic, the French food company has now completely withdrawn its already reduced annual targets. The effects of the global shutdown are not foreseeable. In the first quarter, the group posted sales growth of 1.7 percent to 6.24 billion euros. The share loses 0.4 percent.
Sartorius: The laboratory supplier started the year with double-digit growth rates. With an increase in sales of 16.5 percent to EUR 509.9 million, the operating result rose by 20.9 percent to EUR 137.9 million. The Management Board raised its forecast for the full year and increased the share by 4.9 percent.
Look at other asset classes
The price of US oil is after its historic fall into negative territory on Tuesday again climbed slightly above zero dollars. With weak trading, the price of the US WTI futures contract rose by $ 39 in May to $ 0.94 a barrel (159 liters). In contrast, the price of the North Sea variety Brent fell by 3.6 percent to $ 24.67.
On Monday, the oil price in the United States plummeted by just under $ 56 to minus $ 37.63 a barrel (159 liters) due to the coronavirus pandemic, thus falling for the first time in its history.
The pandemic has caused global oil demand to collapse by almost a third. Buyers are faced with the problem that the oil storage capacity will soon be exhausted.
The yield differential remains on the bond market (Spread) between German and Italian government bonds at a high level. With a term of ten years, this value is 2.37 percent. The corresponding Italian bonds are currently returning at 1.944 percent and are approaching their monthly highs.
The European heads of state and government are unlikely to make a final decision about a reconstruction fund at the EU summit. That was what EU diplomats said. Chancellor Angela Merkel had already rejected so-called corona bonds yesterday.
“When planning wealth, the rule is: never get out completely!”
What the chart technique says
The leading German index is again approaching its important support zone, which is in the range of 10,391 to 10,279 points. From the second brand, the leading index started its rally in December 2018, which continued until a record high in February 2020. The brand was “confirmed” last Tuesday because the index ended trading right there.
Just below that there are so-called price gaps for which there were no quotes this year. The last gap would be closed at a Dax level of 10,097 points.
At 11,025 meters there is an important resistance on the top. There is the so-called 50 percent correction of the overarching trend, at which counter-movements very often end. Currently related to the Dax, this means that the downward trend has so far been from the record high in mid-February at 13,795 points to the low point in mid-March at 8255 points.
The 50 percent mark is accordingly at 11,025 points, i.e. exactly in the middle between record high and low point. With the increase to 10,820 points last Tuesday, the index of this brand has already approached.
Should the Frankfurt benchmark break this 11,025 point mark, the next resistance would be at 11,266 points, the August 2019 interim low.