The management blamed the volatility of exchange rates for the decline. A constant rate would have boosted sales about 8.5 per cent.
Sales for the year-end March 1994 also fell, to Sfr 56.89bn from Sfr57.49bn previously. Nestl, the Swiss-based food and beverage group, saw first-quarter results decline on the strong Swiss franc. Sales eased 1.5 per cent to Sfr13bn (£7.1bn) compared with Sf13.2bn for the same period last year.

Aegon said it was seeking to expand in Europe.Vital is the second-largest private life insurer in Norway with total assets of about Nkr42 bn (£4.1bn).Premium income was about Nkr3.7bn (£362m) in 1994, and Vital has a share of about 20 per cent of the Norwegian market for life and pension insurance.”Vital has grown substantially in the past five years, has a strong market position and an outstanding reputation and its strategy fits in well with that of Aegon,” the company said.Heinie Hakker, an analyst with BZW, said: “They are not paying goodwill for embedded value and if the takeover contributes to earnings from year one, shareholders will like it.”The takeover would boost its earnings per share from 1995 onwards, said the company.Vital tried in vain in January to find a foreign buyer.The deal must be approved by Norway’s regulators as it involves a foreign institution owning more than 10 per cent of a financial institution.. About 26 per cent was generated in Europe, outside the Netherlands. “Aegon’s ownership would secure Vital’s access to future capital and help it forge a strategic alliance with Norwegian banks, which would strengthen the distribution of its products.”In recommending the deal, Vital’s board said it believed membership in the Aegon group would be beneficial to customers and employees “because it will ensure the capital needed as a base for the continued growth of acitivities in Norway”.In 1994, over 30 per cent of Aegon’s revenues of 20bn guilders came from the US. Aegon, a Dutch insurer, is to buy Vital Forsikring, Norway’s second-biggest life insurer, for 694m guilders (£257m) in an agreed bid designed to give the Dutch company greater market share in Europe. Aegon said the deal would reduce its dependence on the United States market.
The deal is the latest in a series of acquisitions by the Dutch company.It paid £200m for Scottish Equitable in June 1993 and in November bought the Mutual Life Insurance Company of New York in a deal that gave an important boost to Aegon’s presence in the US.In a statement, the company said it believed the Norwegian market was on the move. An 11 per cent increase in total revenues produced a rise in the airline’s turnover from £371.1m to £404.5m.Midland’s increase in revenue is well ahead of most other European airlines, which Sir Michael said was due to several code-sharing agreements the company signed last year.Passenger capacity increased only 2 per cent, leading to an improved load factor of 61.4 per cent, against 56.3 per cent.Midland, 40 per cent-owned by the Scandinavian airline SAS, saw passenger growth on international and domestic routes, with services to Belfast and Frankfurt growing strongly.Total passengers on cross-border routes rose 22.7 per cent, which meant that for the first time international routes were responsible for more than half of all revenue – up from 50 to 56 per cent.On the domestic front, passenger numbers on routes from Heathrow to Leeds- Bradford and Teesside increased 8 per cent, reflecting the summer rail disruption.Midland has had talks with Eurostar, which operates the London-Paris Channel tunnel service, about cross-ticketing to enable passengers to be flexible about using a plane or train.Sir Michael said he was keen to go ahead with the idea but Eurostar had made no decision.Airline subsidies would remain an issue, and Sir Michael said he would oppose plans to approve £700m in aid for Spain’s Iberia.Midland is one of several private sector airlines taking legal action against EC approval for subsidies to Air France.. We will be on a plateau for a couple of years until the market absorbs the extra traffic.”The company made pre-tax profits of £4.4m in 1994, against £1.1m, and Sir Michael predicted further growth in profitability this year.

However, competition from the Channel tunnel was a real threat that would hold back passenger growth on Europe’s busiest airline route, said Sir Michael Bishop, chairman.
With the Channel tunnel not expected to reach full capacity until the summer, the real battle between the airlines and Eurotunnel has yet to begin.Sir Michael plans to counter the extra competition by launching services to two new European destinations this year, though he is not saying where until later in the year.However, airlines’ expansion strategy is to push into areas beyond the reach of Eurostar, and that probably means Midland will fly middle-to- Eastern Europe.Sir Michael said: “Airlines should not expect to see another rise in London-Paris traffic. British Midland, Britain’s second-biggest airline, saw a 24 per cent rise in profits last year due to a surge in traffic on its London to Paris route. Despite static profits from the two British businesses, a 14 per cent increase in profits from Farmers, the California mutual insurer managed by BAT, pushed trading profits from financial services 10 per cent ahead to £240m.. Total premium income slumped 24 per cent to £346m, with poor stock market performance blamed for a 56 per cent slide in the single premium investment product business.There were also clear signs that the insurance cycle is turning down in the 8 per cent fall to £676m in gross premium income at Eagle Star, the other UK business. But American Tobacco remains on track to meet forecasts at the time of acquisition that it could double last year’s profits of $200m over the next two years.Meanwhile, a £200m expansion is on track to double production capacity at Southampton for State Express 555, the favorite cigarette of Mao Tse- Tung and now the leading international brand in the Far East.The continuing bad publicity surrounding private pensions and other personal financial services hit premium income at Allied Dunbar, one of BAT’s two UK insurance businesses. BAT warned that its market share would slip by about 1 per cent once the Montclair brand was sold to satisfy the Federal Trade Commission. A new economic stabilisation plan mid-way through the year helped cigarette sales in the country jump.Souza Cruz yesterday reported net income of 32.9m Brazilian reals (£22.2m) for the first quarter of 1995, after a loss of 25.9m last time.Around 8 percentage points of BAT’s volume increase was due to the turnround in Brazil, with a further 10 points coming from acquisitions in the US, Russia and Uzbekistan.The rise, including 6 points of organic growth, fueled a 27 per cent increase in tobacco profits to £335m.BAT said American Tobacco, which raised its market share from 11 to 18.5 per cent in the US, was living up to expectations in terms of volume and financial benefit.

Despite a more normal tax rate in 1995, we will continue to reward shareholders with a significant real increase in the dividend.”BAT said tobacco volumes had jumped 24 per cent in the latest three months, boosted by the year-end acquisition of American Tobacco, and a strong recovery at Souza Cruz, the Brazilian subsidiary. Results released yesterday by the tobacco to financial services conglomerate showed that the pre-tax total rose 19 per cent to £498m in the three months to March, surprising many analysts, who were already braced for good figures after an upbeat forecast by the chairman Sir Patrick Sheehy last week.
After a strong run upwards from 443p two weeks ago, the shares lost 3p to 474p yesterday.Sir Patrick said: “All in all, the year has got off to a very good start for BAT Industries. Profits of £1.4m for 1995 would cut the forward p/e to 12, which looks good value, but the market in the shares will be tight.. Soaring cigarette sales have seen BAT Industries’ GPC “generic” overtake Marlboro to become America’s second-best selling brand in the first quarter of this year, helping to push profits to record levels. The two brothers have built Gus Carter into a chain of 72 shops since taking over from their father 10 years ago. They plan to double that that number in two to three years.Deregulation of the industry will add turnover this year.