Six businesses finding an upside in the coronavirus crisis

Businesses will be counting the cost of the coronavirus pandemic for years. Some have been unable to survive the swift and brutal economic downturn. Others are having to borrow to survive. Almost all are making changes to the way they work to reduce the risk of resuming operations.

But at the same time, there are parts of the corporate world that have benefited from the huge restrictions brought in to day-to-day life, often at great speed, to try to stop the spread of Covid-19.

The Financial Times has talked to six of them about how they found some upside from changes to the way people everywhere work, talk, eat and shop.


An options floor trader works in unfamiliar surroundings

An options floor trader works in unfamiliar surroundings © Brendan McDermid/Reuters

As global economic prospects were slashed and markets convulsed by the pandemic, companies rushed to strengthen their finances, and corporate bond issuance surged.

This market pile-on, plus a whole ecosystem of traders and investors with no option but to work from home, has been a boon to MarketAxess, an electronic bond trading venue.

It has more users than ever and, in March, had record trading in US Treasury, corporate, municipal and eurobond debt.

Rick McVey, chief executive, said a cultural shift had already been under way in the $9.6tn US corporate bond market.

“Two things happened in a very different way during the peak volatility months of 2008. Overall market volumes in credit went down and the electronic trading share went down. So we’re in a very different place in 2020 in terms of institutional investors’ comfort with electronic trading,” he said.

MarketAxess qualified for the S&P 500 index of the biggest US companies last year and, from a mid-March low, its shares have risen more than 60 per cent, giving it a market capitalisation of $17.3bn.

Chart showing the volume of credit traded on MarketAxess

Personal contact remains important for fund managers and investment banks to discuss sentiment and ideas, and electronic trading is a competitive industry where expanding into new areas can be costly.

Even so, Daniel Fannon, an analyst at Jefferies, said there were likely to be lasting positive effects. “For clients that have a good experience with the MarketAxess platform and benefit from significant price improvement it would be hard to imagine them going back to over-the-counter trading,” he said.

Philip Stafford, Editor, FT Trading Room


Discord was utilised by French teachers during the country’s lockdown

Discord was utilised by French teachers during the country’s lockdown © AFP via Getty Images

Discord is the kind of app that would normally drive teachers crazy. A gaming-focused way to chat using text, voice and video, it already had 300m registered users and tens of millions of daily users before the pandemic hit.

Then in March, just as Zoom was taking over the corporate videoconferencing world, Discord found an unlikely new role as a home schooling aid.

In France, state-provided online education tools struggled as traffic surged in the early days of the lockdown. Discord was able to handle the influx of users much better, making it a de facto alternative for many teachers.

According to App Annie, which tracks app stores, Discord jumped into the top 10 most downloaded iPhone apps in France during March, with similar growth in Spain and Germany.

Chart showing rise of downloads of Discord

By mid-May, it remains in the top 50 mobile apps overall in the US and several European countries, in many cases ranking above more established rivals such as Skype, Twitch and Google Meet.

That is no mean feat for a five-year-old start-up. Like Slack, the business messaging app that began as a side project of a video game called Glitch, Discord’s founders Jason Citron and Stanislav Vishnevskiy started out building a games development studio, Hammer & Chisel, before moving into messaging.

The business has raised about $280m in private financing so far and is said to be in talks to raise new funds at a valuation that could exceed $3bn. It is also racing to update its product to capitalise on the new demand beyond its core audience. In March, it increased the number of people who could watch a “Go Live” broadcast from 10 to 50, making it more useful for teachers.

Investors such as Index Ventures believe that despite the apparent supremacy of Zoom, there would be plenty of room for other video services. “We think video is a really important platform that is pervasive and will probably not have an all-in-one provider like IBM or Microsoft” did in the PC era, said Danny Rimer, a partner at Index.

Tim Bradshaw, Global Technology Correspondent

Nissin Foods

An employee prepares noodles at the Cup Noodles Museum in Japan

An employee prepares noodles at the Cup Noodles Museum in Japan © AP

Shortly after China began to tighten its lockdown of cities in February, Japanese noodle champion Nissin Foods swung into action with one scenario in mind: panic buying of instant noodles by stay-at-home households.

In anticipation that the virus and lockdown would spread to Japan, it started talks with domestic retailers to increase shipments by 150 per cent. In normal times, it churns out 300 new products each year. But now, in a time of crisis, it focused its production on the most popular basic flavours.

These early steps paid off as hoarding of noodles quickly spread. Deemed a provider of “essential goods”, most of Nissin’s 36 factories in 16 countries operated throughout the crisis.

By the time its financial year had closed at the end of March, annual net profit had risen 52 per cent from a year earlier to a record ¥29bn ($269m), with sales of instant noodles up 6 per cent in Japan and 16 per cent in China in the final quarter. Demand also rose sharply in Brazil and the US.

Chart showing sales of instant noodles in Japan

Sales of instant noodles in Japan, where the group still generates 70 per cent of its revenue, remained strong in April, increasing 22 per cent in value from a year earlier, according to research group Intage. Nissin’s shares have risen 23 per cent since mid-March.

Growth is expected to slow as lockdowns ease. But the company is still predicting another year of record profits: the stay-at-home trend is expected to continue and the global economy looks to be heading for an extended downturn. “We’re actually quite strong in a recession,” said Yukio Yokoyama, Nissin’s chief financial officer.

Kana Inagaki, Tokyo Correspondent

FRP Advisory

FRP Advisory was appointed to help liquidate café group Patisserie Valerie

FRP Advisory was appointed to help liquidate café group Patisserie Valerie © Reuters

The hit to company finances from lockdown has provided rich pickings for restructuring experts helping businesses consider options to avoid collapse.

“We are advising four times as many clients as usual — more than at any other time during my 30-year career,” said one senior insolvency practitioner.

For the founders of FRP Advisory, a boutique insolvency and restructuring firm based in London, the increase in calls came at an auspicious time. At the end of February, the 10-year-old firm floated on Aim, raising £80m to help it take advantage of an already rising number of insolvencies in the UK.

The retail and casual dining sectors have been particularly hit hard by changing consumer habits; FRP made its name as administrators to high street chains including BHS and Bonmarché. Last year it was appointed to help liquidate café chain Patisserie Valerie.

Companies that were already distressed now find themselves in dire straits. In the past month, FRP has been appointed as administrators to the department store Debenhams and restaurant chain Carluccio’s, beating larger competitors.

Chart showing number of company insolvencies

FRP announced to shareholders this month that its caseload had grown in “size and complexity” because of the pandemic and, as a result, it had made £11.5m in just two months since its IPO. Revenues for the year to April 30 are expected to be 16 per cent higher than last year at £63.2m. Its shares are up 50 per cent.

Tabby Kinder, Tax and Accountancy Correspondent

Delivery Hero

A cyclist for Foodora, which is part of Berlin-based Delivery Hero

A cyclist for Foodora, which is part of Berlin-based Delivery Hero © REUTERS

Logic suggests that online ordering would thrive with people unable to go out, but during the early weeks of lockdown, food delivery apps tended to suffer as restaurants were forced to close.

Berlin-based Delivery Hero, however, has bounced back. Its shares have risen by more than 60 per cent since mid-March and are now trading at an all-time high, valuing the company at about €17bn.

“We have seen a good recovery in most markets to pre-Covid levels,” Niklas Östberg, chief executive, said in an interview last month. Orders have nearly doubled compared with last year, to 239m in the first quarter.

Delivery Hero, and other apps including Uber Eats, Just Eat Takeaway and Deliveroo, boosted business by pushing into new delivery markets, including supermarkets and convenience stores.

But while its rivals have linked up with the likes of Carrefour and Marks and Spencer, Delivery Hero is planning to go it alone, opening dozens of its own small warehouses.

These “DMarts” are the equivalent of “dark kitchens” — food preparation outlets that exist only to serve delivery apps. They are already operating in Turkey, Kuwait, the United Arab Emirates, Singapore, Taiwan, Argentina and Chile and will be launching in Europe this year.

Chart showing Delivery Hero's share price

“We go directly to the source,” said Mr Östberg, securing supplies from food producers and consumer goods companies, using Delivery Hero’s scale as one of the world’s largest food delivery operators to strike better deals. He says that, as a result, consumers do not have to pay any mark-up and their goods are delivered within 15 minutes.

The company believes this style of “quick commerce” will be a market worth €450bn by the end of 2030.

Tim Bradshaw


Board member Manuela Lavazza smells the aroma of coffee blends during the opening of a Lavazza store in Milan in 2017

Board member Manuela Lavazza smells the aroma of coffee blends during the opening of a Lavazza store in Milan in 2017 © Reuters

Among Italy’s holy trinity of food staples — pasta, tomatoes and coffee — it is the last that has had the biggest revenue boost from the pandemic, says market research group Nielsen.

During the first two weeks of lockdown in March, ground coffee sales in the home of espresso were 22 per cent higher compared with a year ago. Lavazza, the family-owned brand that dates back to 1895, has felt the benefit.

“Our retail business grew by 15 per cent globally and by 10 per cent in Italy during the first four months of the year compared to 2019,” Antonio Baravalle, Lavazza’s chief executive, told the FT.

Like many other food and drink companies, it kept production going during the international lockdown. 

Not all parts of the business, which employs more than 3,000 people across five continents, have had an easy time, though. Business-to-business activity makes up 40 per cent of the company’s total revenue and while more people were at home and drinking coffee “this compensated for the halt experienced by our hotels, restaurants and catering channels only partially”, Mr Baravelle said.

Silvia Sciorilli Borrelli, Milan Correspondent