Family business roundup: Peugeot, Ford, ArcelorMittal, Paccar post falls, Swatch profits up

Global economic difficulties continued to exert pressure on a number of family businesses, with ArcelorMittal, Peugeot and Ford all reporting falls in revenues this week.

French carmaker and Europe’s second biggest automotive company Peugeot reported on 25 July a 5.1% decrease in its half-yearly results, down from €31.135 billion during the first six months of 2011 to €29.6 billion in 2012. Its automotive division reported a loss of €660 million, down 10%.

Philippe Varin, chairman of the PSA Peugeot Citroen managing board, said the group, which earlier this month announced a restructuring plan, is "facing difficult times". Under the plan, the carmaker, controlled by the descendants of Jean-Pierre Peugeot, will close a plant and cut 8,000 French jobs.

Fellow carmaker Ford likewise has reported falls in its second quarter results – net income dropped 58% during the quarter, from $2.4 billion (€1.98 billion) a year ago to $1 billion. Revenues dropped 6.1% from $35.5 billion during the second quarter of 2011 to $33.3 billion, while it also reported a half-yearly fall of 4.4% to $65.7 billion during the same period in 2012. The company, chaired by family member Bill Ford, blamed international losses caused by uncertainty in Europe and higher tax rates.

Weak demand for steel and iron-ore saw ArcelorMittal’s net income fall by around €1 billion. EBITDA for the world’s largest steel maker, run by the London-based Mittal family, fell to $2.4 billion in the second quarter of 2012 from $3.4 billion the previous year. The company also said that revenues decreased during the first six months of 2012, from $46.66 billion in 2011 to $45.18 billion this year.

“Market conditions in the first half have been very challenging, indeed more challenging than we had expected due to a combination of factors, not least the still unresolved crisis in the eurozone,” the company said in a statement on 25 July.

Similarly, American truck-maker Paccar warned of weak sales for the rest of the year, even as it posted a 24% increase in profit for the second quarter of 2012, reporting a net income of $297.2 million compared to $239.7 million a year earlier.

“The weak economic growth in the United States, coupled with the ongoing uncertainty in the eurozone, could dampen truck orders for the remainder of 2012,” said chairman and chief executive officer Mark Piggott, a fourth-generation family member, in a statement on 24 July.

Only Swiss watchmaker Swatch posted strong positive results, reporting a 16.7% increase in watches and jewellery sales to CHF3.4 billion (€2.8 billion) and a 19.4% profit rise to CHF903 million.

The world’s biggest watchmaker, owned by the Hayek family, is forecasting positive growth for the second half of the year on the back of important brand events such as the London Olympics and the Ryder Cup. It said it hopes to achieve a record CHF8 billion in sales for 2012.