Europe Movers: KONE, Lonza Group, Louis Vuitton, Remy Cointreau, Volvo

Inga Muller
26 Jan, 2024
Frankfurt

European markets advanced in Friday's trading, and luxury stocks soared after Louis Vuitton and Remy Cointreau reported better-than-expected financial results.

The DAX index decreased 0.04% to 16,896.12, the CAC-40 index rose 1.7% to 7,588.71, and the FTSE 100 index inched higher by 1.1% to 7,612.82.

The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.74%; the UK gilts edged lower to 3.95%; and Italian bonds inched lower to 3.77%.

Volvo AB declined 1.1% to SEK 248.25 after the company reported mixed quarterly results.

Net sales in the fourth quarter increased by 10% to SEK 148.1 billion from SEK 134.3 billion and rose by 8% in constant currency.

Adjusted operating income increased to SEK 18,384 million from SEK 12,171 million, indicating an adjusted operating margin of 12.4% compared to 9.1%.

Adjusted operating income excludes the negative effects of SEK 1,490 million.

Earnings per share increased to SEK 5.93 from SEK 3.26 a year ago.

"The Board of Directors proposes an ordinary dividend of SEK 7.50 per share and an extra dividend of SEK 10.50 per share,” said Martin Lundstedt, President and CEO, in an update to investors.

Lonza Group soared 13% to CHF 420.0 after the Swiss pharmaceutical group reported better-than-expected earnings and revenues.

2023 sales increased 8% to 6.72 billion Swiss francs from 6.22 billion Swiss francs and rose 10.9% at constant currency rates.

Biologics division sales rose 13.6% to 3.7 billion francs, small molecule division sales rose 10% to 901 million francs, cell and gene division sales edged up 0.4% to 696 million francs, but capsules and health ingredients division sales dropped 8.3% to 1.2 billion francs.

Fiscal 2023 operating earnings, or EBITDA, fell 9.3% to 1.94 billion francs from 2.14 billion francs a year ago, and the EBITDA margin declined to 28.9% from 34.4% a year ago.

Core EBITDA increased 0.2% from the previous year to 2 billion francs, resulting in a margin of 29.8%, down from 32.1% a year ago.

The company estimated flat sales in constant currencies and core EBITDA margins in the "high twenties."

The company proposed a 14% increase in dividends to 4.0 francs from 3.50 francs a year ago.

KONE oyj increased 3.2% to €46.18 after the Finnish elevator group reported better-than-expected results.

Sales in the fourth quarter declined by 3.5% to €2,809.9 from €2,911.5 million and rose 0.7% on comparable exchange rates.

Net income was flat at €276.3 million, and basic earnings per share were flat at 53 cents.

Orders received increased by 5.4% to €2,049.2 from €1,944.2 million a year ago. On comparable exchange rates, orders rose by 10.5%.

Sales in 2023 increased 0.4% to €10.95 billion from €10.90 billion, net income increased 18.8% to €931.6 million from €784.5 million, and basic earnings per share rose 15% to €1.79 from €1.50 a year ago.

"KONE expects its sales to be stable or to grow slightly at comparable exchange rates in 2024. The improvement in adjusted EBIT margin is expected to continue in 2024, albeit with fewer tailwinds than in 2023," the company noted in an update to investors released Friday.

Remy Cointreau SA jumped 13.2% to €100.10 after the alcoholic beverage maker reported better-than-estimated sales.

Sales declined in the first nine months of fiscal year 2024 ending in December, partly because of the calendar shift in China and because consumers in the EMEA region avoid high-priced items because of high inflation.

Sales dropped 22.7% to €956.6 million, and cognac sales plunged 35.6% because of significant destocking of inventories in China ahead of earlier-than-normal Lunar Year holidays.

Cognac sales in the U.S. were down because of the intense promotional environment during the year-end holiday period and ongoing inventory reductions.

For the full fiscal year 2024, the company anticipates sales weakness in the U.S. to persist before improving in the next financial year, sales growth to be moderated by a "persistent inflationary environment," and sales in APAC to be tempered by a slower economic recovery in China.

The company estimated fiscal year 2024 sales to decline by about 20% on an organic basis, near the low end of its previous estimated range.

Louis Vuitton soared 11.4% to €763.20 after the French luxury group reported better-than-expected financial results, indicating resilient demand for luxury products. 

Total revenue in 2023 increased 9% to €86.2 billion, and net income soared 8% to €22.8 billion, but operating cash flow fell 20% to €81 billion.

Fashion and leather goods sales increased 9% to €42.2 billion, watches & jewelry sales advanced 3% to €10.9 billion, perfumes & cosmetics sales rose 7% to €8.2 billion, but wines & spirits sales declined 7% to €6.6 billion.

Selective Retailing division sales surged 20% to €17.9 billion.

"All business groups reported strong organic revenue growth, with the exception of Wines & Spirits, which was faced with a high basis of comparison and high inventory levels," the company said in its earnings update released Friday.

Europe, Japan, and the rest of Asia achieved double-digit organic growth.

In the fourth quarter, organic revenue growth came to 10% to €23.9 billion.