WEBVTT - BMW Down, Auto1 Up, Hays Rises

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 3>Now, let's take a look at some of the stocks

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<v Speaker 3>on the move today in Europe. I'm Lizzie Burdon in

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<v Speaker 3>London with Stephen Carroll in Brussels, and we're joined by

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<v Speaker 3>Bloomberg reporter Chloe Melly. Chloe, I want to start with

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<v Speaker 3>BMW because we've seen shares slumping this morning on the

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<v Speaker 3>profitability outlooks slashed. They've also flagged weaker demand in China

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<v Speaker 3>and it seems to be spreading across the auto sector.

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<v Speaker 1>Yeah, absolutely so. As you said, BMW share is really

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<v Speaker 1>really taking a hit this morning and dragging down the

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<v Speaker 1>rest of that sector after cutting its profitability outlook, and

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<v Speaker 1>it blamed we demand in China's as you said, Lizzie,

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<v Speaker 1>but also the impact from the Iran war, and so

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<v Speaker 1>it will accelerate its cost cutting program as a result

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<v Speaker 1>of their weaker demand, although it didn't clarify whether or

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<v Speaker 1>not their meant job cut, so we'll be waiting for

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<v Speaker 1>more details there. And this comes just a month since

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<v Speaker 1>the new CEO took over, so it's a bit of

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<v Speaker 1>a tough start for him. And the big problem, and

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<v Speaker 1>it is a problem that's faced by all the carmakers

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<v Speaker 1>in Europe, really is that demand for electric cars. So

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<v Speaker 1>in the US there's been policy reversals and around electric

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<v Speaker 1>cars and a bit of a slump and demand as

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<v Speaker 1>a result. And then in China, which is really where

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<v Speaker 1>the problem is, the domestic manufacturers make much cheaper evs

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<v Speaker 1>and so the European car makers are just not as

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<v Speaker 1>competitive in that market and that is something that BMW

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<v Speaker 1>is really feeling at the moment. The weakness in China

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<v Speaker 1>is not new, according to analysts, and this is a

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<v Speaker 1>profit warning that was actually quite expected, and ANALYSTA Jeffries

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<v Speaker 1>said that a margin reset of such magnitude was unexpected,

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<v Speaker 1>so this might be a bit of a wake up

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<v Speaker 1>call actually for that entire industry, and this explained why

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<v Speaker 1>all of those carmakers were much weaker today because they'll

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<v Speaker 1>have to really tackle this weakness in China and try

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<v Speaker 1>and revise that demand there.

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<v Speaker 2>So that's the car makers, but a related company, Auto Worn,

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<v Speaker 2>which operates an online portal for buying and selling cars.

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<v Speaker 2>Their shares are on the rise to this morning.

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<v Speaker 1>Why, yeah, it's quite interesting in the context of car

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<v Speaker 1>makers not doing so well, But then what is doing

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<v Speaker 1>well is a platform for buying and selling used cars,

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<v Speaker 1>so this really points to some of the affordability problems

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<v Speaker 1>that consumers are having, so the consumer spending side of

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<v Speaker 1>things here as well. And so Auto one is up

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<v Speaker 1>quite strongly today after unveiling some long term financial targets.

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<v Speaker 1>So it expects as much as fifteen percent unit growth

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<v Speaker 1>for its much and division, which is the B to

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<v Speaker 1>B side of the business where used car dealers are

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<v Speaker 1>essentially buying inventory, and then as much as forty percent

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<v Speaker 1>unit growth for the retail segment. So that's very healthy

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<v Speaker 1>growth and it really follows in the trajectory of what

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<v Speaker 1>we saw from the earnings. Actually last month it had

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<v Speaker 1>record first quarter results because of that massive growth and

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<v Speaker 1>demand for used cars. The one thing that's a bit

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<v Speaker 1>unclear in which some analysts have flagged is the outlook

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<v Speaker 1>for cash flow. But overall, the targets do look very solid,

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<v Speaker 1>and we can see the gap in performance between those

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<v Speaker 1>carmakers and then those used car platforms actually widening, So

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<v Speaker 1>that's quite interesting.

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<v Speaker 3>And Chloe Hay shares the recruitment company hitting a two

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<v Speaker 3>month high.

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<v Speaker 1>Why Yeah, so completed a sale of operations in six

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<v Speaker 1>countries and then it's also exploring options for its operations

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<v Speaker 1>in seven other countries. So the market is reacting quite

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<v Speaker 1>positively to this decision to essentially streamline the business. Because

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<v Speaker 1>Hayes and all of the other recruitment firms in the UK,

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<v Speaker 1>So Robert Walters and Page Group have been having, of course,

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<v Speaker 1>quite a tough time. They're all down between thirty and

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<v Speaker 1>fifty percent this year, and they of course reflect the

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<v Speaker 1>difficulties that is faced by the labor market in a

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<v Speaker 1>lot of the countries in which they operate. You know,

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<v Speaker 1>both permanent and temporary recruitment is weak. Companies are really

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<v Speaker 1>hesitating to hire because of everything that's happening. Geopolitical uncertainty, inflation,

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<v Speaker 1>all of those things really weighing on those hiring trends,

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<v Speaker 1>and of course recruitment firms are really the first to

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<v Speaker 1>feel the impact. A lot of them have been reducing

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<v Speaker 1>the headcount and from what we've heard from hayesydate seems

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<v Speaker 1>that it's very likely that we'll see more of that

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<v Speaker 1>streamlining in that sector going forward.

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