Buhlmann's Corner

Are the German DAX companies getting dusty or is everything just coincidence?

What is really going on between the Rhine and the Elbe?

The large, blue German bank proudly presents a conversion concept. A sort of renovation and reconstruction concept after the passage of Anshu's Army. The concept should cost or to put it more correctly: consume and destroy over 7 billion €. Is it worth it?

With a current market value of €15 billion, €7 billion of program costs are currently being spent to generate quarterly revenues (Q1 2019) of €13 billion. In arithmetical terms, 7 billion is spent to receive 7 billion.

It would certainly be more efficient to set up a new bank without legacies with €7 billion, without inherited burdens, litigation risks and accumulated pension commitments, and to sell the old one for €1 to the baker from Berlin, who once was willing to buy the Schneider real estate package for this price. At that times they had mutated into NPLs because of a few "peanuts". The right question is: why didn't the supervisory board discover the Sewing concept in 2012, but only in 2019?

Then there's Bayer, the company whose market value of 10% is lower than its most recent successful acquisition. The Bayer Supervisory Board, which was elected by the stockholders, (presumably) approved the purchase of the Monsanto pearl in final analysis and, according to the old rule, was discharged for this resolution by a large majority. That was not achieved by the Board of Management, which today weakens its position in the fight against the lawyers.

The Supervisory Board is now taking over (because it has been discharged, sic!) the management of Glyphosat, although it is not actually allowed to do so. But some shareholders want it that way. Apparently the company is acting consistently and expensively according to the unwritten German rule: "und wenn ich nicht mehr weiterweiß, dann bilde ich einen Arbeitskreis" (if there is no solution, solve it with a working group)

But there are also board members who may surprise you:

BASF, for example, came around the corner and warned of declining profits - instead of +10%, they are now expecting -30% in 2019.  A swing of 40% in such a short time means either that the CFO has been on vacation for a longer period or that the accounting has been hacked or ... that things can get even worse.  As yet, the Supervisory Board has not reacted.

Change of scene to Daimler. At the shareholders' meeting, not all participants cheered for Dieter Zetsche, who retired on the same evening. At the behest of the Chairman of the Supervisory Board, Manfred Bischoff, he replied in spite of my public objection, all shareholder questions.  Even those concerning the future. And the new man, Ola Källenius, had to watch and remain silent.

After this childish theater, Zetsche went in the certainty after two years cooling-off to take over the chairmanship of the supervisory board and his successor came hand in hand with Harald Wilhelm (CFO successor of Bodo Uebber) ... and sent the shareholders immediately and twice on profit warning. That teaches me 3 things:

The newcomers have swept the past together.  The mistakes cannot cool down in 24 months, so that the old CEO can become the new Chairman of the Supervisory Board. Airbus not only builds better aircraft than Boeing, but also has what it takes to train good CFOs.

Facebook pays USD 5 billion for a misdeed and at the same time gets 2.4% more customers, similar to Volkswagen.

Even if VW, which despite Dieselgate is the only car manufacturer without profit warning in the trade war between nations and propulsion systems, sensibly reduces the brand expansion and even if Facebook is pursued and smashed by the state - the Deutsch Bank smashes itself.

The behavior is figuratively speaking just as stupid as that of the airlines, which turn passengers into pure flight victims. No matter if Ryanair, Air Asia or Deutsche Lufthansa, more and more often they take off with a delay of 30 minutes or more, which does not change the fact that the flight closes 30 minutes before the official departure time. 30 years ago, i.e. before ESTA, APIS and just as much harassing as useless check-in procedures, the plane was reached even if you drove half an hour before to the then still affordable parking lot ... was that a coincidence?