Current Affairs

March 4, 2024

Evonik Says Economic Recovery Unlikely in 2024, Plans 2,000 Job Cuts

March 4 (Reuters) – German chemicals group Evonik Industries said on Monday it did not expect an economic recovery in 2024 and announced up to 2,000 job cuts worldwide by 2026. The job cuts are expected to reduce costs by 400 million euros ($434.04 million) annually, the company said, adding that the majority – some 1,500 – would be in Germany. Chemical companies have been under pressure for more than a year, forced to reduce inventories on lower demand from industrial clients as energy prices soared.

“We will have to be prepared for the economic storm to continue in the global economy,” said CEO Christian Kullmann on a conference call, adding that the company hopes customers will be in a position to benefit from the more recent fall in energy prices. Evonik, whose products are used in items from animal feed and diapers to Pfizer/BioNTech’s COVID-19 vaccine, expects 2024 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of 1.7 billion to 2.0 billion euros ($1.84 billion-$2.17 billion).

This compares with a 2023 result of 1.66 billion euros which fell short of the 1.7 billion expected by analysts. The 2024 guidance is close to consensus and should reassure investors, JP Morgan said in a note. Evonik, a market leader in the production of amino acids used in poultry feeds, said on Monday it would sell its superabsorbents business to the International Chemical Investors Group (ICIG) for a price in the low triple-digit million-euro range.

The Essen-based company also said it would buy back shares worth up to 113.8 million euros including transaction costs. The group will propose an annual dividend of 1.17 euros per share, unchanged from the last year. Its 2023 sales fell 17% to 15.3 billion euros. Sales at its performance materials division, which accounted for around 13% of the total, fell by 22% to 2.55 billion euros after the company sold a production site in Luelsdorf in June.

https://www.reuters.com/business/evonik-says-recovery-unlikely-2024-plans-2000-job-cuts-2024-03-04/

February 28, 2024

Chemical M&A to Accelerate

Chemical Sector to See Increased M&A Momentum, Brenntag’s CEO Says

Published: Feb. 27, 2024 at 10:02 a.m. ET

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By Stefanie Haxel

The global chemical sector might see increased momentum in mergers and acquisitions, according to Brenntag’s chief executive officer.

The head of the German chemicals company, Christian Kohlpaintner, said in an interview with Dow Jones Newswires that dealmaking in the chemical industry seems to be accelerating, as reflected in the size of acquisitions being implemented.

“If you look at the top 50 distributors, in a short period of time, I would say in the last seven or eight years, they have increased their market share from 30% to almost 40%,” Kohlpaintner said, which he accredits to aggressive acquisitions.

Brenntag had doubled its acquisition budget in the fall of 2022 to between 400 million and 500 million euros ($434.1 million-$542.7 million) a year.

Although many players in the industry have grown significantly through acquisitions in recent years, the economies of scale aren’t enough to have a positive impact on manufacturers.

“This is the reason why, in our opinion, the consolidation of the market will occur at a higher speed and in larger steps,” Kohlpaintner said.

According to data from the Boston Consulting Group, the market for industrial chemicals is growing between 2% and 4% annually, and that for specialties is growing by 3% to 5%.

–Nina Kienle contributed to this story.

Write to Stefanie Haxel at stefanie.haxel@wsj.com

https://www.marketwatch.com/story/chemical-sector-to-see-increased-m-a-momentum-brenntag-s-ceo-says-99bbc6d3

February 22, 2024

Container Vessel Capacity Surges

Delivery of containership capacity hits record levels
Global container capacity is set to expand by 10% this year over 2023 despite expectations that vessel recycling will hit records levels. The amount of capacity delivered last year is staggering — some 2.2 million TEUs of vessel capacity came out of shipyards in 2023. Another 1.6 million TEUs of capacity are on the way. Other key metrics from orderbooks, along with additional global shipping charts, are on Gateway.  

https://www.joc.com/gateway/about

February 18, 2024

Market Share of Hotels vs Airbnb and other Home Sharing Platforms

Hotel Rooms Or Homes?

by Tyler Durden

Friday, Feb 16, 2024 – 11:20 PM

Even with Airbnb posting a net loss of $500 million in its fourth quarter of 2023, the past year was a success story for the short-term rental platform, which increased its annual revenue to roughly $10 billion and net income to $4.8 billion.

Nevertheless, as Statista’s Florian Zandt details below, the hotel business is still far more important regarding the revenue generated in the travel and tourism sector.

Infographic: Are Short-Term Rentals More Popular than Hotels? | Statista

You will find more infographics at Statista

As the chart above, based on Statista Mobility Market Insights data, shows, hotel accommodation has a larger revenue share in every one of the eight economies projected to generate the most revenue with cruises, package holidays, camping, hotels and vacation rentals.

Italy had the highest share of vacation rentals, which encompasses vacation homes and short-term rentals, in total market revenue with almost 16 percent. The relationship between Airbnb and the Southern European nation, in particular, is fraught. In November, Italian authorities seized 780 million euros from the online platform due to the suspicion of tax evasion. The case was settled in December with Airbnb agreeing to pay 576 million euros without admitting direct liability.

The tourism and travel industry in the United States, the United Kingdom and Japan will continue to rely heavily on hotel bookings in 2024 according to Statista analysts, with between 54 and 62 percent of the corresponding total market revenue being provided by this segment. Germany has one of the lowest combined revenue share of hotels and vacation rentals, which can be attributed to the country’s inhabitants’ fondness for package holidays.

Overall, analysts forecast that revenue in all market segments will amount to $927 billion worldwide in the upcoming year.

The United States, China and Germany alone are projected to contribute almost half of this revenue.

https://www.zerohedge.com/personal-finance/hotel-rooms-or-homes

February 18, 2024

The Rise of Pickleball

Today’s Topics Hello! In years gone by a game of golf, a bike ride or a dog walk might have topped the list of potential Sunday activities. But, today, hundreds of thousands of people across America are increasingly turning to pickleball, the racket sport that’s still taking America by storm. Boredom, the mother of invention

Tracing its roots all the way back to 1965 when it was invented by a group of 3 dads who couldn’t find a shuttlecock to play badminton on a summer’s day, pickleball has had a slow-then-fast-then-reallyfast rise in America. On that day in Washington nearly 60 years ago, the trio improvised with what they had: table tennis paddles, a plastic ball, and a badminton court — a combination that, once the net was lowered a few feet, proved an entertaining and accessible game to a variety of ages and abilities.

From those humble beginnings, it took the sport decades to really capture people’s interest, spreading organically across America, eventually being played in every state by 1990. But, cut to the present day, and pickleball has taken the US by storm: according to the Sport & Fitness Industry Association, 8.9 million players played the sport in 2022, up more than 80% on the prior year, making it the fastest growing sport in America.
Serving everyone

Arguably the main driver of pickleball’s popularity boom is its low-commitment versatility. Thanks to its perforated ball — which slows the game down — and smaller court, pickleball demands less raw athletic ability than many other sports, giving it a broad appeal, with many kids and seniors picking up the game.

In 2021, almost 73% of all record pickleball participants were ‘casual’ players who played fewer than 7x per year. In that same year, roughly 29% of pickleball players were aged 18-34 years old, while 21% were kids, ~20% were 35-54, and a whopping ~18% were 65+ — an astonishingly even demographic split for an increasingly mainstream sport. Out of those who play the most frequently, the older demographic was the dominant force, accounting for nearly one-third of that “core” player group.
Space invaders

Played on a badminton-size court, pickleball can be played indoors or outdoors, standing up or in wheelchairs, and it’s relatively space-efficient. In fact — much to the chagrin of die-hard tennis players everywhere (including Chartr’s editor) — you can nearly squeeze playing space for 4 pickleball courts in the same area needed for 1 tennis court.

To meet the booming demand, the SFIA estimates that a further 25,000 pickleball courts — equating to a $900m infrastructure investment — are needed to keep up with demand, on top of the ~44,000 courts that are estimated to already exist nationwide.

Check the rules

As the sport continues to pick up momentum at both a grassroots and professional level (yes, there are a lot of pro pickleball tournaments now), people are increasingly flocking to the first online port of call when you want a quick summary of something you’d never heard of until recently: Wikipedia.
It wasn’t until the Covid era when the paddle sport really ratcheted up in earnest. Since then, as pickleball’s grown into a bonafide passion for millions of people — rather than a faddy pandemic pastime (looking at you, breadmaking and online yoga) — page views on the sport’s Wikipedia page have soared, as curious players look up the rules, the sport’s history and why on Earth it’s called pickleball (nothing to do with pickles and everything to do with… rowing). Hits to the Wikipedia page even surpassed those of tennis in 2020, according to data from Pageviews.

Brokeback

Although the game can be enjoyed by all ages, pickleball is not without its risks. As its popularity has skyrocketed, so too have pickleball-related injuries: the American Academy of Orthopaedic Surgeons recently reported that bone fractures resulting from pickleball have increased 90x over the last 20 years, the majority of which resulted from falls in the 60-69 age group.

That may put a strain on doctors in Utah, Arizona, Minnesota and Florida, where data from Google Trends reveals search interest in pickleball has been the highest over the past 12 months.
Big pickle

It’s fair to say that the Super Bowl isn’t under threat as the jewel in corporate America’s sporting crown, but pickleball is increasingly big business. Manufacturers of pickleball equipment are selling hundreds of millions of dollars worth of paddles, shoes and apparel every year, while developers are eyeing up unused retail space, spending millions to convert them into prestige pickleball playing spaces around the country.

As the pro scene begins to take off, a battle for pickle supremacy has been quietly taking place between rival leagues. Last September two of the biggest — Major League Pickleball and the PPA Tour announced a merger, with private equity investors injecting $50m into the combined venture.

Although prize funds at most pro events remain relatively small, top players can reportedly make 7 figures from sponsorship deals, prize money and appearance fees.

Love it or hate it, we haven’t had peak pickleball yet.

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