|Bid||518.60 x 0|
|Ask||519.20 x 0|
|Day's range||501.00 - 525.00|
|52-week range||218.00 - 1,084.50|
|Beta (5Y monthly)||1.70|
|PE ratio (TTM)||3.56|
|Forward dividend & yield||0.45 (16.85%)|
|Ex-dividend date||12 Feb 2020|
|1y target est||15.65|
(Bloomberg) -- The prospect of bailing out more companies battered by the coronavirus pandemic is opening up a split in the German government, with free marketeers resisting a push for increased state intervention, according to people familiar with the matter.Chancellor Angela Merkel’s government in recent weeks has signaled it would help travel operator TUI AG and steelmaker Thyssenkrupp AG overcome a collapse in revenues. As the companies enter talks for multibillion-euro bailouts from the government rescue fund, the coalition is divided over how much power the state should take when it hands over taxpayer cash, the people said.The junior party in Merkel’s coalition, the center-left SPD, wants to reprise the model for the 9 billion-euro ($10.6 billion) bailout of Deutsche Lufthansa AG in which Berlin secured voting rights and two supervisory board seats. Conservatives in Merkel’s Christian Democratic Union are resisting, and want a so-called silent holding that would limit state interference, the people said.“Those who pay, need to have a say,” SPD lawmaker Andreas Schwarz, a member of the committee overseeing the rescue fund, said in a phone interview.The ideological clash shows how coronavirus has ended decades of light-touch government in Europe’s economic powerhouse. The outcome could signal a more assertive state presence in German industry for years to come.Read More: Merkel Is Seizing Her Chance to Revolutionize Germany’s EconomyThe Lufthansa rescue made the German government the biggest shareholder in the country’s flagship carrier, thrusting the state back into the heart of a company it privatized with fanfare more than 20 years ago.The latest dispute comes as TUI and Thyssenkrupp enter talks for government bailouts. TUI is expected to seek 1 billion to 2 billion euros after coronavirus upended the global travel market, while Thyssenkrupp is likely to seek a similar amount for its ailing steel division, people familiar with the matter said previously. Thyssenkrupp is also applying for extra money from a German government fund established to decarbonize heavy industry via hydrogen.The prospect of keeping steel production in Germany, where it can more easily oversee the shift to a manufacturing process with lower carbon emissions, adds an extra incentive for the government.No More LoansAlready heavily indebted, the companies won’t receive government loans like Adidas AG, which has paid back its debt, or shipbuilder MV Werften, a victim of the collapse in sea cruises, and will instead discuss capital injections with officials from the rescue fund.Thyssenkrupp on Thursday said it will eliminate 11,000 jobs over the next several years and forecast a net loss of more than 1 billion euros this year. The announcement sent the stock down by as much as 7.7% in early trading. As the government discusses support for the company, Economy Minister Peter Altmaier would prefer a silent participation that would inject capital without giving government voting rights or seats on the supervisory board, people familiar with the matter said.Opposing Altmaier, Germany’s finance ministry led by the SPD’s Olaf Scholz would like an active stake that would give politicians voting rights at the company. Mindful of public anger at taxpayer losses incurred in banking bailouts following the 2008 crisis, the SPD wants control to prevent a repeat.Read More: Thyssenkrupp in Talks for Over 5 Billion Euros in Steel AidAllied with the SPD, Thyssenkrupp’s labor unions would like to see the government take an active stake, potentially limiting management’s ability to slash jobs and close units.“The present situation shows how urgently necessary it is that the state takes a stake in Thyssenkrupp’s steel unit,” union official Knut Giesler said Tuesday after a potential buyer for its heavy plate steel mill, a maker of metals for use in construction, withdrew from talks.Fighting for survival after a collapse in international travel, TUI Chief Executive Officer Friedrich Joussen told Germany’s Spiegel magazine it couldn’t rule out the government taking a stake even as it looked to raise up to 1 billion euros in a new capital from investors.TUI, with 3 billion euros in loans, has received Germany’s second-biggest corona bailout so far, topped only by Lufthansa. Adding more debt could put the company at risk of breaching its covenants when a waiver of the debt limit rules expires in 10 months from now.(Updates with Thyssenkrup job cuts in 10th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- When U.K. travel brand Thomas Cook relaunched as an online travel agent last month, it needed a way to convince customers that it’s become a more reliable custodian of their money since its 2019 bankruptcy and that they’ve nothing to fear from booking a holiday during a pandemic.Its solution was to promise that most of the cash customers hand over long before they go on holiday will now be held in a ring-fenced trust account until they return.(1)For anyone who’s struggled this year to get a refund from an airline, cruise ship operator or travel agent, this will sound appealing. The model is bound to become much more common as regulators begin to understand the benefits. It’s about time.When British tour operators renew their licenses to operate in the coming weeks, some may be asked to keep customer prepayments in a segregated account, the Telegraph newspaper reported recently. Currently, travel companies and airlines are often free to spend the prepayments on whatever they like, and long before the trip happens.Because of the immediate need to ensure the travel industry remains solvent, a swift regulatory crackdown on that business model would be counterproductive right now. The bigger current worry is that travel groups barely have any new bookings. German airline Lufthansa AG plans to offer only up to 25% of last year’s flight capacity during the fourth quarter.However, after the financial crisis U.K. banks were forced to separate their core retail banking services from riskier investment banking. One day, there needs to be a similar reckoning about how travel groups protect customer cash.From the travel companies’ perspective getting customers to stump up money months before they travel is great — it’s like getting a big interest-free loan. Lufthansa, cruise operator Carnival Corp. and tour company TUI AG all held several billion dollars of customer cash, according to their most recent full financial results.When Covid-19 shut down global travel, consumers realized they were getting a raw deal. Many endured a Kafkaesque battle with company bureaucracies to get their money back and they often had to make do with vouchers.Some travel agents are better at protecting their customers’ cash, and they’re calling loudest for change. “It’s scandalous that the money innocently paid for travel arrangements sometime in the future, is not required to be set aside in trust and solely spent delivering the contract,” Trailfinders says. It’s branded the current system a “protection racket.” In theory, customer prepayments are safe, even without ring-fencing. If you book a flight with a credit card it’s usually possible to get a refund if the travel company goes bust. But not everyone books this way and you’re just loading the risk onto the credit companies. That’s why the latter hold back customer money from travel companies they deem to be a financial worry. Brits who book a flight-inclusive holiday with so-called ATOL protection can also get a refund from the Air Travel Trust Fund if their travel company collapses. However, the fund was drained of cash after Thomas Cook’s demise. Setting up a trust account doesn’t guarantee that refunds would be processed quickly in the event of mass travel cancellations like those seen this year. But by preventing companies from spending the cash until customers have travelled, the money should at least be safe.(3) Travel groups are beginning to see the benefits of ring-fenced accounts, too. Saga Plc expects its decision to set up a trust account will give it a marketing advantage with its over-50s holiday clientele.Segregating customer prepayments would, however, increase a travel company’s cash requirements, which most of them can ill afford right now. For example, UBS analyst Cristian Nedelcu estimates that as much as 250 million euros ($296 million) of Tui’s cash could become “restricted” if regulators toughened up on ring-fencing. Tui had almost 6 billion euros of net debt, including lease liabilities, at the end of June and has twice had to turn to the German government for help this year.Tui’s chief executive officer, Fritz Joussen, said in May that ring-fencing customer deposits “would more or less destroy the industry.” The cash-flow impact could ripple through the travel sector, depriving hotels and other struggling suppliers of money.There’s little sign yet that the U.K. or other governments will force airlines to implement trust accounts, as some travel agents are demanding, and perhaps that’s no surprise given aviation’s precarious financial condition and the need to protect jobs.“While I think there likely would be public support for ring-fencing customer funds with airlines, too, at least in the current situation there is a risk that governments may end up footing the bill for large legacy carriers, so you can see that it might not be their top priority,” says Daniel Roeska, an analyst at Bernstein Research.Once there’s a vaccine and we’re all flying again, though, we shouldn’t forget the cavalier regard some airlines had for customer money. Better protecting that cash is the least the companies could do.(1) Thomas Cook is still be able to transfer a portion of the package holiday cash it receives to theairline, to cover the cost of the flight ticket.(2) Some trust accounts are able to use a portion of customer booking money to pay suppliers.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- New British measures aimed at slowing Covid-19’s spread, before it wreaks more drastic economic consequences, threaten to derail the country’s nascent consumer recovery. Many Brits had been hoping that the rebound would pick up steam with the impending Halloween celebrations and half-term school holidays.The measures from Boris Johnson’s government include new restrictions on pubs and restaurants, fresh advice for people to work from home if they can and keeping to six the number of people who can socialize together. From Thursday, pubs and restaurants will be limited to table service and they’ll have to close at 10 p.m. With last orders at 9 p.m., many businesses will effectively lose an entire sitting.When areas in northeast England introduced local hospitality restrictions last week, there was a sudden drop off in trade as people simply stayed home. But the implications are broader than the decision about whether to go out for the evening.All of this feels just steps away from a more comprehensive lockdown, and comes with the very real danger of undermining confidence. The measures send a signal to consumers that the virus is a threat once more, raising questions about whether social distancing measures already in place are enough. Just as they were starting to go out and spend again, Brits will undoubtedly become more nervous about both the health and economic implications of the pandemic.The timing is particularly difficult for consumer companies. Halloween can be a significant event for supermarkets and variety retailers such as B&M European Value Retail SA, which benefit from demand for sweets and plastic pumpkins. It’s an event that sets the stage for the rest of the year, and this year was seen especially as a barometer for things to come. Beyond the trick-or-treating, Halloween has become popular with adults too, who revel in partying at pubs and clubs in ghoulish costumes. That’s unlikely to be the case this year.The half-term holiday was also poised to be a big getaway week for tour operators and airlines. Travel companies had hoped business would pick up after many British families skipped their summer vacation abroad. With recent changes to travel advice, that demand has waned. European tour operator TUI AG said on Tuesday it had cut capacity for the winter season by a further 20%.It’s now impossible to guess what the year-end holiday season — which accounts for a large proportion of retailers’ and restaurants’ profits — will be like. That helps explain conflicting outlooks from British retailers last week. Next Plc was cautious. By contrast, John Lewis Partership Plc said it was expecting Christmas sales to be the same or better than 2019.Both views have their supporters. Affluent employees who have worked from home have amassed savings, which they might spend online. Those who’ve lost their job, or face redundancy with the cessation of the U.K. furlough support at the end of October, will be thinking differently. Whitbread Plc, owner of the Premier Inn hotel chain, said on Tuesday that it planned to cut as many as 6,000 jobs, almost a fifth of its workforce.There is a chance that by acting now with more stringent measures, the government will make sure some of the pain is out of the way by Christmas, saving the crucial trading period for retailers and restaurants. That’s highly uncertain, though, especially when so much spending in the run-up to the holiday will be determined by whether consumers have the festive feel-good factor. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.