23/05/2016 BBC Business Live


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This is Business Live from BBC News with Victoria


Europe's largest discount airline - Ryanair - warns that security fears


and intense competition could hit profits.


Live from London, that's our top story on Monday 23rd May.


Despite reporting a 43% increase in profit, the Budget carrier


Ryanair has warned of tough times ahead - we'll hear from one of


Also in the programme - sowing the seeds of a mega-takeover!


German pharma giant Bayer makes a bid for US


A potential tie-up would form the world's biggest


to date with the markets - where dismal trade data for Japan


pulled down the Nikkei - in an otherwise mixed


Europe is being pulled down by commodity stocks right


across-the-board. Are you a whiz in the kitchen, always mealtime a mess?


We will get the inside on a business which is trying to make cooking


easier. It comes up with recipes and sends you the exact measurements.


But at what cost? We will meet the founder.


And as a new guide to elevator etiquette is published -


People who take the lift only one floor?


Let us know, just use the hashtag BBCBizLive.


Hello and a very warm welcome to Business Live.


When a 43% uplift in profits is just not enough.


Some people and some industries are just too hard to please.


Europe's biggest budget airline, Ryanair, announced a big


rise in net income - but it fell short of expectations.


What's more - that profit growth is going to be cut right back -


to just 13% for the coming year, according to the company.


There's a big battle going on in the skies over


A price war is raging between carriers on specific routes,


Many of the traditional airlines are now leaner,


after adapting their business models to the challenge set out


No longer are you guaranteed a free meal on a full service


The big boys have also launched their own


These include Air France's Trans-avia, IAG's Vueling


So - what does the Finance Officer of Ryanair have


As we look into next year, we are looking at about a 13% increase on


last year's results. We will have our focus on costs, which is always


the case, expecting those to be down 1%. We have a ?200 million saving on


our fuel bill. We expect to have backed lower fares to our customers


in the next financial year. -- we expect to hand back.


John Strickland, airline expert from JLS Consulting is with me.


Let's talk about the figures. 43% rise. But the warning is what has


got everybody worried. The outlook is tough. It is what about the


threat of terrorism and the volatile price of fuel figures. It could have


an impact. No doubt. This year has been challenging, particularly in


the second half because of the terror attacks in Paris and


Brussels. Both markets where Ryanair is a player. As traffic control


strikes, as well. Particularly in France, affecting the business.


Companies are always cautious at the start of a business year. They


expect profits to grow at a better rate. And that assumes no external


factors. As for how the business model works from Ryanair. It is


about load, getting bums on seats, and they will cut prices to make


sure the planes are full. But that is not how the industry works


overall. It is critical. One word underpins that. Load is important,


but cost is important. Ryanair is zealous on keeping costs down. They


benefited last year with lower fuel prices. But it is a detailed


exercise day in day out that allows them to achieve the lower unit


costs. Anybody can fill planes, but many feel planes and lose money,


they are still turning very profitable performances. What is so


interesting about the industry is so many other people have tried this


model, but few have managed it. Ryanair and EasyJet dominate the


market. What are they doing differently? The cost focus is key.


Ryanair and EasyJet are well-established. They have fleets


which go to hundreds of aircraft. They have aircraft on order.


British -- British Airways, KLM, and Air France, have tried to do it with


low subsidiaries. But Air France and Lufthansa have been littered with


strikes, as well. If anybody wants -- was to ride out the threats, it


is Ryanair. But there are other factors, including the volatile fuel


price, and the terrorism threats. It is quite a sobering warning, isn't


it? The fortunes of the airlines often go hand-in-hand with the


fortunes of the wider public. Exactly. And going back to the issue


of cost and cash. Ryanair has big cash reserves which they put aside.


Which is unusual. Many airlines are weak with cash reserves in difficult


times. They need that as a buffer to make sure they have on place to go


if they get a revenue hit. -- a place to go. Other times of the


strikes they were expecting higher revenues at that time. It is OK to


be cautious. They still forecast profits to go up and stop they still


have the cost focus. And they can cut fares more, which they can


afford to do, because the fuel price will come down again which is a big


cost area for them. -- they still forecast profits to go up. Thank you


very much. Bayer, the German chemicals


conglomerate, has made a formal offer for Monsanto -


the US seed company. The transaction would create


an industry giant whose products include antibiotics,


genetically modified It would have a combined annual


revenue of more than $67 billion. Vietnam's VietJet agreed a firm


order of 100 Boeing 737s The deal makes it one


of the region's fastest The order comes as part


of President Obama's official Exports from Japan fell


by 10% in April compared It's the seventh


consecutive month of falls. The weak trade data


is thought to be mainly due to poorer demand from China


and other emerging economies. As Victoria touched on the start,


the FTSE 100 opening low, lots of uncertainty to kick off the week.


The website is dominated by the ongoing debate about the EU


referendum. Ryanair has been talking about the risk of Brexit. We have


touched on that with our guest, but also more talk about whether it will


cost jobs to the UK economy. This time coming from Radio 4's today's


programme. 400,000 jobs is the cost, apparently. But this will more than


likely be disputed by the other side in the campaigning towards the


referendum. That is the Business Secretary


saying that today. -- Shadow Business Secretary.


Japan's central bank governor has defended his controversial negative


interest policy which he first implemented in January this year.


He'd signalled that he's willing to cut rates even


Haru-Hiko Kuroda was speaking with our Asia Business


Correspondent, Karishma Vaswani, on the sidelines of the G7


We announced in January and actually implemented this new policy in the


middle of February. We are still early May. Although the impact on


the financial market is quite clear, and already made, but impact on the


economy and prices will take more time. But I don't say that it will


take one year, two years, or something like that, it will have a


clear impact on the economy soon. If we judge it necessary to have an


inflation target we can further ease our monetary policy in


three-dimensional 's. Quantity, quality and interest rate. We have


still enough room to do so. -- in three dimensions.


Asia markets traded mixed on Monday, with Japan's shares dropping


amid renewed strength in yen and fresh data showing the country's


This is how the session has opened up in Europe -


shares are lower in early trading - weighed down by losses


While Bayer slumped after making an offer for Monsanto.


Now - let's hear from Michelle Fleury in New York about what's


The US Federal reserve has long considered its June meeting as a


possible time to raise interest rates. But until last week investors


thought the probability of that happening was quite low. Some doubt


has crept in after several speeches by officials. The release of the


minutes from April's meetings. solid economic data. As policymakers


ponder whether the US economy is ready to handle an increase, one


thing they are looking for is signs of inflation. They may not get the


answer to that this week but there answer to that this week but there


are three reports which should provide more clues as to the direct


travel in the world's largest economy. The key report


OK, James, for now, thank you. I know you will come back with us to


talk about the papers. We speak to the boss of the business


aiming to bring domesticication to a generation that's always on the


move. The collapse of BHS will be back


in the spotlight today when MPs They want to hear from those


who sold off the retailer for just ?1 last year and whether they took


enough care when selling the firm. Maureen Hinton is the Global


Research Director at Verdict Retail. Maureen, what do the committee


hope to find out today? Well, I think that they want to find


out is who knew what when and whether there was enough diligence


to find out if they had the skills to run the company, but to finance


it and turn it around so it was profitable again. Considering Sir


Philip Green hadn't been able to do that was a tall order. We saw the


deal happen. Sold off for ?1, there were lots of questions about why BHS


got into this position and how it could be sold off for ?1. Why are


people only asking questions now and not at the time? I well, I think


because it went bust a month ago. That's why it suddenly came to


prominence with the public, but when it was sold, there was lots of talk


about it in the trade about who were these people that bought it and what


was going to happen to it? We have seen a ratcheting up in terms of the


war of words between all the parties involved in this. It makes you


wonder who is telling the truth here?


Well, I think the thing is that a Parliamentary Committee have made


assumptions primarily there was a lot of talk about the dividend and


whether the dividend was taken out when the pension fund was losing


money, but the dividend was taken out when the company was profitable


and it was only when the company started to lose money that the


pension fund went into deficit. So it's really finding out exactly what


happened. I think as more and more information comes out, it becomes


more clearer. Maureen Hinton, thank you. There is more online if you


need to stay up-to-date. The MPs set to question BHS directors and add


saOusors. -- advisors. The Business Live team


will stay across that story throughout the day as we hear


evidence about why it was sold off for ?1. What deals were done? And


crucially, the future perhaps for the 11,000 staff at those stores up


and down the country and crucially too, their pensions.


Ou're watching Business Live - our top story - Europe's biggest


Budget airline Ryanair has forecast a slowdown in profit growth.


The company says that terror attacks and increased competition


And now let's get the inside track on a business aiming


Marley Spoon are a global food company who deliver exact amounts


of ingredients to people who want to cook at home.


They were launched in Germany in 2014 and have since expanded


to the UK, the Netherlands, Australia and the US.


With the expansion of the West Coast US operations, Marley Spoon will be


The group also plans to expand its coverage throughout


the east coast of Australia, which it says will bring the service


Fabian Siegel, founder and CEO of Marley Spoon joins us now.


Good morning to you and welcome to the programme. Thank you for having


me. Now, reading your background is really interesting. You're from a


tech background and you are seeing this business as a tech business and


not a food business, explain how that works. Our company has a DNA.


We love food and eating. While in the end we deliver products to


customers. There is a lot of software that people don't see when


they see the boxes coming to their home, but there is a lot of


technology that goes into getting the food to the customer's home


straight from the farm to the customer. So forgive the bluntness


of the question, but why would I use this? Why would I not order a


take-away? Why not just order a take-away? I think there is both. I


have a family. I have got three kids and sometimes we want a take-away,


do I want to feed pizza to my kids every day? I want to cook and bring


something healthy to the table and sit with everybody around the table


and have some community. Cooking is something that people just do, but


the way that supermarkets serve cooking is poor. I run into the


supermarket and I have to pick the stuff and in the end I end up


cooking the same stuff. Steak and broccoli every time, the same, you


know. I feel we want to have some change and this is something like, I


have a bamboo aloo here and I wouldn't cook that otherwise if


Marley Spoon didn't bring it to me. I'm going to open this and see if it


was something I could do. I want to talk about the cost of this.


Because, of course, this is not the cheapest way of cooking.


Particularly if you were a large family for example, buying in bulk


from a supermarket has got to be more cost effective for a family


than using one of these? Well, the interesting thing is cooking with


Marley Spoon is not more expensive than the supermarket. Why would that


be the case? Well, the thing is supermarkets, they throw away a lot


of food. There is more than 100 million tonnes of food thrown away


in the European Union. More than 30% of the fresh products thrown out by


the supermarket because it is perishable. Who pays for that? You


pay for that by the price. When you need celery and you need two sticks,


what do you do with the celery? You throw it away. It is not more


expensive to cook with Marley Spoon than the supermarket. OK, so the


idea is so eliminate food waste and therefore, reduce the costs to the


consumer. I'm chucking out less from my fridge? Right. I'm wondering


whether where this leaves the supermarket shop, is this an idea of


the past that we go to supermarkets or is so far into the future that it


is cyber? Customers that use Marley Spoon they replace the supermarket


for the cooking part which is 40% of the market is for cooking and 60%


other stuff. People that use Marley Spoon, they don't have to go to a


supermarket, they still have to buy the milk and the cereal. I think in


the end, does it make sense to have prime real estate on the high street


just to be there for perishable goods lying around and going to


waste? Yes, we replace the supermarkets for the part of cooking


and there is online retailers that do you a pantry. This looks great. I


would love to have this delivered. It is simple ingredients, how much


of them is a mark-up of the service you're offering? The trick here is,


the reason why we can offer this for the same price as the supermarket is


the supermarkets throw away 30% of their fresh products and they price


that in. You pay for that. This is our margin. We can offer this for


the same price as the supermarket which starts at ?3.75 per portion,


?3.75 per portion for a fresh home cooked meal. I think it is a more


sustainable way to cook at home without actually paying more and you


get the great recipe card. You have six simple steps. And everybody can


cook with these six simple steps a delightful meal. What people say


that use Marley Spoon, they try it out once and then specifically


customers with structured lives like families and empty nesters, people


who have a structured life, they actually really like to have a box


coming to their home once a week and the cooking has just been taken care


of. It looks very nice. And it smells amazing. We will put that to


the test. I will bring that in tomorrow.


Thank you. The world's largest insurer, AXA,


is to ditch its investments in the tobacco industry,


worth nearly $2 billion. It says investing in the sector


makes no sense, given that smoking kills some six million


people a year. Imogen Foulkes sat down


with the firm's new Chief Executive and asked him


about the new strategy. We are a large provider


of healthcare insurance and what we have seen more and more


that obviously chronic diseases We need to invest more


into prevention in order to prevent the chronic diseases


and we want to really support that and not invest in something


which creates more chronic diseases. You are a health insurance,


it is more than 50 years since Government officials first


warned about the dangers of tobacco? Yeah, but you can only see really


now that particular interbuckle that it has turned from a lethal


disease into a chronic disease and you see now the effects or now


is the right time to do it. Now is also the time


where the public awareness Let's see what other


stories are being talked James Quinn is back with us. Let's


start with this story in the Huffington Post. We have had a


couple of tweets. Ryan says his peeve is when people were too much


Cologne or perfume. By beggest bugbear at the BBC, we have eight


floors and it is people who go one floorment that's what the stairs are


for, is it not? I think so. One of the factors was small talk. People


you don't know asking you what the weather has been like today or how


busy your day is? Isn't it about everybody else listening to your


conversation? Different radio stations are playing and you can get


into the radio-free list. The danger with that, Radio 1, the lifts are


glass and everyone can see you when you're dancing! Let's turn our


attention away from lifts to Saudi which could do with a financial


lift. I see what you've done there, Ben! So cheesy! Contractors face


being paid in IOUs, that's astonishing that one of the world's


richest countries could be having to pay contract contractors with an


IOU? Saudi facing tough times. An article in the Telegraph pointing


out that IOUs are a real likelihood and workers will be paid in those


and what the impact will have on the population will be significant.


Yeah, one we'll watch closely. Jails, the time is against us today.


But that's a really interesting one and one we'll follow closely. James


There will be more business news throughout the day


on the BBC Live webpage and on World Business Report.


There. Hello there. Good morning, it was a dry and bright start


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