A tale of contrasting fortunes

ABB chief executive, Jörgen Centerman at this week's annual press conference Keystone Archive

There was contrasting news for two of Switzerland's best-known companies over the past week as the annual results season geared up.

There were more choppy waters for the Swiss-Swedish technology company, ABB, as a slowdown in sales and lower-than-expected profits pushed the group’s shares sharply lower on the Swiss stock market.

Sales were down 6 per cent on 1999 at SFr37.9 billion ($22.56 billion), while net profit rose six per cent to SFr2.38 billion.

The group’s new CEO, Jörgen Centermann, said he was disappointed with the figures and promised better times ahead.

It was a rather different story for the Basel-based healthcare group, Novartis, which announced record profits of SFr7.2 billion last year, a rise of 8 per cent on 1999.

Novartis said sales had topped SFr35 billion and described the performance as “excellent”. The company also announced that it was to spend an additional SFr1 billion on the launch of five new products.

The British food company, Compass, made an offer this week to buy the Swiss vending company, Selecta. If the deal is approved it will create a global force in catering and food vending machines.

Compass already owns a third of Selecta and is now offering SFr540 a share to take control of the remaining stock. This values Selecta, Europe’s leading food-vending business, at SFr1.35 billion.

The price offered represents a premium of 33 per cent above Selecta’s recent average trading price.

The construction chemicals specialist, Sika Finanz, boosted sales last year by more than 18 per cent to SFr2 billion. The company said it was on course to meet a net profit forecast of around SFr100 million.

The UBS financial services group announced on Thursday that it intends to change its capital structure to bring it more in line with other global financial institutions. The bank is planning a three for one share split after changes in Swiss law that will ease restrictions on minimum par value.

There was more bad news from Gretag Imaging this week, with the announcement that the company plans to cut 50 jobs at its site in Regensdorf.
The digital imaging technology group admitted that it had liquidity problems.

Car dealers are having a rough time with sales of new vehicles down seven per cent last year.
Dealers are coping with market saturation and are being advised to cut prices to meet sales targets.

There are no worries for the Swiss chocolate industry though which saw sales soar last year. The average Swiss is now eating 11.9 kilograms of chocolate a year – that’s an increase of 400 grams on 1999.

by Michael Hollingdale