European markets closed lower Tuesday, as the lackluster sentiment seen at the start of the week continued in the region and beyond.
The Stoxx 600 provisionally closed down with most sectors in the red, as the steady momentum that has powered the index's best month since January stalled.
French videogames publisher Ubisoft led losses, down 9%, after announcing it had raised 494.5 million euros ($541.2 million) in a placement of bonds convertible into equity. The company said the proceeds would be used for general corporate activities, along with up to 250 million euros for repurchasing outstanding bonds.
French consumer confidence improves as Germany remains gloomy
Consumer sentiment held steady in Germany this month, according to the monthly GfK survey, while figures from French statistics agency Insee showed households were slightly more optimistic.
In recession-hit Germany, "willingness to buy is growing slightly, while income expectations have experienced a slight decline," GfK said. Overall sentiment was unchanged after three months of decline, but remained at a low level with few signs of improvement on the horizon.
French consumer confidence improved but remained "relatively sluggish," Insee said, and households had a brighter outlook on their financial situation.
— Jenni Reid
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Rolls-Royce up 7% on plan for huge profit increase
Rolls-Royce topped morning stock gains, trading 6.7% higher at 10:15 a.m. U.K. time.
The engine-maker announced plans to increase operating profit to between £2.5 billion ($3.155 billion) to £2.8 billion in the medium term, up from £652 million in the full-year 2022, in part by improving margins in its civil aerospace business from 2.5% to 15%-17%.
It is also targeting free cashflow of £2.8-£3.1 billion and return on capital of 16-18%, and for margins in its defense division to rise from 11.8% to 14-16%.
CEO Tufan Erginbilgic said Rolls-Royce had a "clear and granular plan" to deliver the targets.
Erginbilgic joined the company at the start of 2023 to oversee a large-scale restructuring program that has seen thousands of jobs cut as it streamlines operations.
Rolls-Royce shares have taken a battering in recent years as it was hit hard by the aviation industry slowdown during the pandemic, but have soared more than 190% over the last year.
— Jenni Reid
Ubisoft down 8.8% after bond placement
French video games developer Ubisoft was down 9% at 8:36 a.m. London time after announcing on Tuesday that it had placed convertible bonds worth 494.5 million euros ($541.2 million).
The company said that net proceeds would be used to increase financial flexibility and to refinance existing debt.
"The success of this convertible bond, with a maturity of 8 years, a first ever for Ubisoft and a first since May 2019 for a non-rated European issuer, together with a 2.875% coupon and a 47.5% conversion premium, underlines investors' confidence in Ubisoft's credit standing as well as its long-term value creation potential," Ubisoft CFO Frédérick Duguet said in a statement.
Ubisoft shares have seen a mixed performance over the last year, as investors have balked at several delays to the release of major games, but eyed potential opportunity in the new rights it is set to acquire as part of Microsoft's takeover Activision Blizzard.
— Jenni Reid
Easyjet up 4.5% after reinstating dividend as airline soars to profit
EasyJet rose 4.5% at the trade open, as the company confirmed plans to reinstate its dividend after a three-year halt.
It came as the low-cost airline reported full-year pre-tax profits of £455 million ($574 million), up from a £178 million loss the previous year. Revenue hiked by 42%, as the company raised prices and increased passenger numbers by 19% on the year.
The dividend was announced at 4.5p per share payable in early 2024.
EasyJet flagged headwinds for its winter season from the conflict in the Middle East, which has impacted flights to Israel, Jordan and Egypt and which it said had impacted near-term flight searches and bookings across the industry.
— Jenni Reid
German firms slightly less likely to hire: Ifo
German companies' willingness to hire new staff declined slightly in November, the Ifo Institute said Tuesday.
Klaus Wohlrabe, head of surveys at the Ifo, said that German companies were putting off recruitment with "a solid foundation for recovery still not in sight," as they continue to experience a lack of new orders.
The research group found that manu