Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The Stock Movers Report, your roundup of companies making moves
Speaker 2: in the stock market, harnessing the power of Bloomberg Data.
Speaker 3: Let's take a look at some stocks on the move
Speaker 3: today in Europe. I'm Stephen Carroll and I'm joined by
Speaker 3: Bloomberg's Breaking News editor, Louise Moon. Louise, good morning. Plenty
Speaker 3: of earnings to dig into today. Let's start with Whitbread.
Speaker 1: Yeah, so this is the premiere in owner amongst hosts
Speaker 1: of other hotels in the UK. So they are embarking
Speaker 1: on a huge overhaul and this has essentially been sparked
Speaker 1: by activist pressure. So the activist investor, Carvex Management, took
Speaker 1: a stake at the end of last year and have
Speaker 1: been pushing for a rethink to Whitbread strategic review that
Speaker 1: had kind of already been ongoing, sparked by the Labor
Speaker 1: government's budget in the UK and the higher taxes from that.
Speaker 1: So they've announced a change to their strategic review this morning,
Speaker 1: essentially cutting back on spending and selling hotels to eventually
Speaker 1: reward shareholders. So it's a five year plan to generate
Speaker 1: two billion pounds in free cash flow and they're going
Speaker 1: to give that other aiming to give that back to shareholders.
Speaker 1: By twenty thirty one, they'll recycle, in their words, so
Speaker 1: sell and lease back one point five billion pounds worth
Speaker 1: of their freehold hotel properties. They're also going to convert
Speaker 1: their branded restaurants, so ones like Befeta in the UK
Speaker 1: with hotel based food and drink offerings. So they say
Speaker 1: that all of these measures could lead to a one
Speaker 1: billion pound cost reduction.
Speaker 4: It will also result or could also result.
Speaker 1: They're expecting it to result in about three thy eight
Speaker 1: hundred job losses. That's about thirteen percent of its workforce,
Speaker 1: so really cutting back kind of across the board. Before
Speaker 1: it achieves all of that, they've paused by backs for
Speaker 1: twenty twenty seven, and shares initially fell twelve percent, which
Speaker 1: was the most since twenty twenty. They did then pair loss,
Speaker 1: but they initially fell twelve percent on the expectation. There's
Speaker 1: the analysts noting the expectation that this restructuring will weigh
Speaker 1: on the earnings, also noting that pause of buyback for
Speaker 1: the moment and saying that there's some risk of downgrades
Speaker 1: after mixed results.
Speaker 4: They also had their four year results today.
Speaker 1: And then there was a comment from CEO kind of
Speaker 1: acknowledging this, saying that there will be a short term reaction,
Speaker 1: but he's saying he's really confident for the medium term.
Speaker 1: So kind of total overhaul for Whitbread there very interesting.
Speaker 3: Let's go to car makers next, and Volkswagon.
Speaker 4: Also pledging more cost cuts.
Speaker 1: Essentially very tough competition primarily from Chinese car makers, to
Speaker 1: the likes of Byd and the CFO noting that in
Speaker 1: particular this morning they had their first quarter results coming
Speaker 1: in weaker and shares falling. Shares have been really volatile
Speaker 1: over the past year. Volkswagener has been contending with the
Speaker 1: whole host of issues, including tariffs and this competition from China.
Speaker 1: So a lot of these companies like Boyd coming into
Speaker 1: Europe building new plants, new car making plants. The EU
Speaker 1: put import Harris and China made evs, so that's encouraging
Speaker 1: that even more. They are working on restrictions to encourage
Speaker 1: a lot more local production. But essentially this is hitting
Speaker 1: a lot of the European car makers. That's on top
Speaker 1: of an overall kind of sluggish market anyway for evs,
Speaker 1: So Volkswagen are saying they planned to be more efficient.
Speaker 1: They already made progress on this during the first quarter,
Speaker 1: but they kind of reiterated those plans. They're going to
Speaker 1: downsize global operators and their output, reduce a lot of
Speaker 1: complexity in the business and some of their model variants,
Speaker 1: and they're aiming essentially to boost savings as a result
Speaker 1: of that. So real pressure is being seen on the business. Okay,
Speaker 1: and quickly on air France KLM, Yeah, really interesting. So
Speaker 1: they're expecting their fuel bill to increase by two point
Speaker 1: four billion euros this year due to the Middle East conflicts.
Speaker 1: That will take it to a total of nine point
Speaker 1: three billion euros. Also planning into rain costs even more.
Speaker 1: As a result of that, they've trimmed their capacity outlook.
Speaker 1: They say that those price increases aren't yet being seen results,
Speaker 1: but they are expected to wait in the coming quarters.
Speaker 1: So not good news in that. Sounds of really interesting.
Speaker 1: Takeaway Shares however, did rise. They're taking a lot of
Speaker 1: actions to kind of mitigate this and the impact that
Speaker 1: this will have.
Speaker 4: On the business.
Speaker 2: This Stock Movers report from Bloomberg Radio. Check back with
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