WEBVTT - Whitbread Plan, Volkswagen, Air France-KLM's Bill

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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 take a look at some stocks on the move

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<v Speaker 3>today in Europe. I'm Stephen Carroll and I'm joined by

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<v Speaker 3>Bloomberg's Breaking News editor, Louise Moon. Louise, good morning. Plenty

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<v Speaker 3>of earnings to dig into today. Let's start with Whitbread.

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<v Speaker 1>Yeah, so this is the premiere in owner amongst hosts

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<v Speaker 1>of other hotels in the UK. So they are embarking

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<v Speaker 1>on a huge overhaul and this has essentially been sparked

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<v Speaker 1>by activist pressure. So the activist investor, Carvex Management, took

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<v Speaker 1>a stake at the end of last year and have

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<v Speaker 1>been pushing for a rethink to Whitbread strategic review that

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<v Speaker 1>had kind of already been ongoing, sparked by the Labor

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<v Speaker 1>government's budget in the UK and the higher taxes from that.

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<v Speaker 1>So they've announced a change to their strategic review this morning,

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<v Speaker 1>essentially cutting back on spending and selling hotels to eventually

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<v Speaker 1>reward shareholders. So it's a five year plan to generate

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<v Speaker 1>two billion pounds in free cash flow and they're going

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<v Speaker 1>to give that other aiming to give that back to shareholders.

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<v Speaker 1>By twenty thirty one, they'll recycle, in their words, so

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<v Speaker 1>sell and lease back one point five billion pounds worth

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<v Speaker 1>of their freehold hotel properties. They're also going to convert

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<v Speaker 1>their branded restaurants, so ones like Befeta in the UK

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<v Speaker 1>with hotel based food and drink offerings. So they say

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<v Speaker 1>that all of these measures could lead to a one

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<v Speaker 1>billion pound cost reduction.

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<v Speaker 4>It will also result or could also result.

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<v Speaker 1>They're expecting it to result in about three thy eight

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<v Speaker 1>hundred job losses. That's about thirteen percent of its workforce,

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<v Speaker 1>so really cutting back kind of across the board. Before

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<v Speaker 1>it achieves all of that, they've paused by backs for

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<v Speaker 1>twenty twenty seven, and shares initially fell twelve percent, which

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<v Speaker 1>was the most since twenty twenty. They did then pair loss,

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<v Speaker 1>but they initially fell twelve percent on the expectation. There's

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<v Speaker 1>the analysts noting the expectation that this restructuring will weigh

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<v Speaker 1>on the earnings, also noting that pause of buyback for

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<v Speaker 1>the moment and saying that there's some risk of downgrades

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<v Speaker 1>after mixed results.

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<v Speaker 4>They also had their four year results today.

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<v Speaker 1>And then there was a comment from CEO kind of

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<v Speaker 1>acknowledging this, saying that there will be a short term reaction,

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<v Speaker 1>but he's saying he's really confident for the medium term.

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<v Speaker 1>So kind of total overhaul for Whitbread there very interesting.

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<v Speaker 3>Let's go to car makers next, and Volkswagon.

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<v Speaker 4>Also pledging more cost cuts.

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<v Speaker 1>Essentially very tough competition primarily from Chinese car makers, to

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<v Speaker 1>the likes of Byd and the CFO noting that in

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<v Speaker 1>particular this morning they had their first quarter results coming

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<v Speaker 1>in weaker and shares falling. Shares have been really volatile

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<v Speaker 1>over the past year. Volkswagener has been contending with the

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<v Speaker 1>whole host of issues, including tariffs and this competition from China.

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<v Speaker 1>So a lot of these companies like Boyd coming into

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<v Speaker 1>Europe building new plants, new car making plants. The EU

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<v Speaker 1>put import Harris and China made evs, so that's encouraging

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<v Speaker 1>that even more. They are working on restrictions to encourage

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<v Speaker 1>a lot more local production. But essentially this is hitting

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<v Speaker 1>a lot of the European car makers. That's on top

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<v Speaker 1>of an overall kind of sluggish market anyway for evs,

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<v Speaker 1>So Volkswagen are saying they planned to be more efficient.

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<v Speaker 1>They already made progress on this during the first quarter,

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<v Speaker 1>but they kind of reiterated those plans. They're going to

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<v Speaker 1>downsize global operators and their output, reduce a lot of

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<v Speaker 1>complexity in the business and some of their model variants,

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<v Speaker 1>and they're aiming essentially to boost savings as a result

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<v Speaker 1>of that. So real pressure is being seen on the business. Okay,

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<v Speaker 1>and quickly on air France KLM, Yeah, really interesting. So

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<v Speaker 1>they're expecting their fuel bill to increase by two point

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<v Speaker 1>four billion euros this year due to the Middle East conflicts.

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<v Speaker 1>That will take it to a total of nine point

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<v Speaker 1>three billion euros. Also planning into rain costs even more.

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<v Speaker 1>As a result of that, they've trimmed their capacity outlook.

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<v Speaker 1>They say that those price increases aren't yet being seen results,

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<v Speaker 1>but they are expected to wait in the coming quarters.

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<v Speaker 1>So not good news in that. Sounds of really interesting.

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<v Speaker 1>Takeaway Shares however, did rise. They're taking a lot of

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<v Speaker 1>actions to kind of mitigate this and the impact that

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<v Speaker 1>this will have.

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<v Speaker 4>On the business.

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