WEBVTT - Vodafone Gains, Hensoldt Falls, Croda Dips

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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>Let's look at some stocks on the move today here

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<v Speaker 3>in Europe. I'm joined by Bloomberg brought a claimer lay

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<v Speaker 3>good morning clothing. Let's start with Vodafone, which return to

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<v Speaker 3>growth in Germany. So that's quite a significant move from Vodaphone.

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<v Speaker 4>Yeah, absolutely so return to growth in Germany, which is

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<v Speaker 4>its biggest market, and that is after bringing on one

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<v Speaker 4>in one as a.

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<v Speaker 1>New wholesale customer.

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<v Speaker 4>It also targets now the upper end of its guidance

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<v Speaker 4>for the full year, and so both of those things

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<v Speaker 4>have boosted the shares and really confirms that the ongoing

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<v Speaker 4>turnaround for Vodafone is paying off. So the focus over

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<v Speaker 4>the last couple of years for the company has been

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<v Speaker 4>really on simplifying operations and selling off some assets. So

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<v Speaker 4>it divested businesses in Italy and Spain over the last

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<v Speaker 4>few years and also merged with three here in the UK.

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<v Speaker 4>So now after those divestments in this merger, the focus

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<v Speaker 4>has really been on trying to revive growth in Germany

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<v Speaker 4>and it's quite difficult market. There's a lot of price

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<v Speaker 4>competition there. There's also a new regulatory change that is

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<v Speaker 4>stopping housing associations from bundling TV packages with rent, which

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<v Speaker 4>meant that Vodafon lost quite a lot of customers that

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<v Speaker 4>were on contracts like that.

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<v Speaker 1>But Vodafon has said that now the impact of that.

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<v Speaker 4>Law change has has mostly passed and the migration of

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<v Speaker 4>one on one customers onto its network is really starting

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<v Speaker 4>to feed through into earnings and helps kind of mitigate

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<v Speaker 4>all of those challenges.

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<v Speaker 1>So quite a positive morning for Vodafone.

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<v Speaker 3>Yeah, I'm so fascinated by the difference between mobile phone

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<v Speaker 3>bills between Europe and the US because there's a lot

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<v Speaker 3>of competition in Europe means it keeps the bills down,

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<v Speaker 3>and also there's sort of more regulation as separation of

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<v Speaker 3>the contract from the actual mobile phone set. Apparently that

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<v Speaker 3>also really helps with competition. But I think, yeah, it's

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<v Speaker 3>a very interesting distinction. If you ever want to get

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<v Speaker 3>a mobile phone in the US.

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<v Speaker 1>That's just tiding to know. Because I've paid ten pounds

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<v Speaker 1>for my current one.

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<v Speaker 3>Well in the US, I hear it's more like two

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<v Speaker 3>hundred bucks. Oh wow, one hundred and fifty to two

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<v Speaker 3>hundred bucks. That's the kind of an average in the US. Yeah,

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<v Speaker 3>I'm always interested in that. So anyway, let's look about Henslt.

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<v Speaker 3>Shall we an update there, the maker of censor systems

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<v Speaker 3>and radar electronics.

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<v Speaker 4>Yeah, so it told investors at his capital market stay

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<v Speaker 4>that it targets ten percent revenue growth for next year,

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<v Speaker 4>and that is a figure that actually disappointed investors are

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<v Speaker 4>quite a lot.

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<v Speaker 1>They expected more.

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<v Speaker 4>They said that the guidance was very much in line

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<v Speaker 4>with expectations, even though they had expected a bit of

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<v Speaker 4>an upgrade, and that there was really a lack of

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<v Speaker 4>a stronger outlook beyond twenty thirty. So that puts in

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<v Speaker 4>spotlight as well the valuation for this defense company, which

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<v Speaker 4>many now consider a little bit too stretched, a little

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<v Speaker 4>bit too demanding. Maybe the key thing is that who

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<v Speaker 4>knows that there will be a boost in the short

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<v Speaker 4>term for earnings for a Hensalt. We know that there's

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<v Speaker 4>contracts coming through, especially in Germany where the investment in

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<v Speaker 4>defense is obviously particularly significant.

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<v Speaker 1>But for investors now.

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<v Speaker 4>They need to see growth beyond that and beyond the

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<v Speaker 4>next few years. If that insane rise in the stock

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<v Speaker 4>price is to be justified.

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<v Speaker 3>Okay, so that on hen Salt. Let's also think about

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<v Speaker 3>Croder why are you watching that company? And also the

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<v Speaker 3>broader chemical sector.

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<v Speaker 4>Yeah, we had a new note from Jeffrey's analyst on

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<v Speaker 4>the chemical sector and they upgraded and downgraded a bunch

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<v Speaker 4>of stocks, and the analysts said that looking for twenty

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<v Speaker 4>twenty six earning support within that sector I was like

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<v Speaker 4>searching for Maraje in the desert. So that is obviously

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<v Speaker 4>not a good news for that sector as a whole.

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<v Speaker 4>In particular, within that a downgraded Croda as well as

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<v Speaker 4>Ivonic and Clariant because those phase the biggest challenges within

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<v Speaker 4>the sector. Upgraded other names like Yara and jivodorin Lances

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<v Speaker 4>as well, but across the board, analyst really did say

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<v Speaker 4>that it was really tough to pinpoint anything that can

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<v Speaker 4>buck the negative earnings momentum in that chemicals industry.

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<v Speaker 1>It's quite obviously a.

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<v Speaker 4>Tough sector because they depend so much on the health

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<v Speaker 4>of their end market. So if there's a slowdown in

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<v Speaker 4>consumer demand, that slows down demand for consumer chemicals, and

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<v Speaker 4>then same thing with the slowdown in industrial activity. So

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<v Speaker 4>it doesn't seem that they're out of the woods just

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<v Speaker 4>yet that sector.

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<v Speaker 2>The Stock Movers Report from Bloomberg Radio. Check back with

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