WEBVTT - Mattel CEO on Creating Value as a Stand Alone Company 0:00:02.920 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.520 --> 0:00:12.880 This is Bloomberg Business Wait inside from the reporters and 0:00:13.080 --> 0:00:16.640 editors who bring you America's most trusted business magazine, plus 0:00:16.720 --> 0:00:20.840 global business, finance and tech news. The Bloomberg Business Week 0:00:20.880 --> 0:00:25.800 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:27.000 --> 0:00:29.480 All Right, folks, this is certainly our world. 0:00:29.520 --> 0:00:32.879 We are focusing so much on the politics, the geopolitical 0:00:33.720 --> 0:00:36.360 of our world right now, certainly the last few weeks. 0:00:36.360 --> 0:00:38.440 But we are also in the midst of earning season, 0:00:38.560 --> 0:00:40.639 and we're also in the midst of a market where 0:00:40.640 --> 0:00:42.320 you've got Wall Street getting a bit of a reality 0:00:42.440 --> 0:00:46.360 check after our disappointing start of that megacap earnings season, 0:00:46.440 --> 0:00:49.880 some concerns over the AI frenzy. Having said that while 0:00:49.920 --> 0:00:52.840 the major market averages, we are seeing a fair amount 0:00:52.880 --> 0:00:55.520 of selling today. One name that's definitely standing out is 0:00:55.560 --> 0:00:58.400 Mattel Shares, a mateller up about nine and a half 0:00:58.440 --> 0:01:01.360 percent today after the toymaker reported second quarter just at 0:01:01.360 --> 0:01:04.360 earnings per share that came in ahead of Wall Street estimates. 0:01:04.600 --> 0:01:07.360 Analysts were also positive on the results, highlighting the company's 0:01:07.360 --> 0:01:11.280 gross margin performance, which Morgan Stanley said had remained impressive. 0:01:11.600 --> 0:01:14.880 Second quarter revenue, it was declined to one point zero 0:01:14.959 --> 0:01:17.120 eight billiy did miss the one point one billion average 0:01:17.160 --> 0:01:19.480 of estimates compiled by Bloomberg by just a little bit. 0:01:20.000 --> 0:01:22.080 But we want to get into the quarter of the business. 0:01:22.360 --> 0:01:25.080 So much that's going on back with us. As Xinon cries, 0:01:25.120 --> 0:01:28.000 he's Mattel chairman and CEO. As a reminder, Mattel has 0:01:28.000 --> 0:01:30.640 the brands Barbie, Fisher Price, Hot Wheels, American Girl and 0:01:30.720 --> 0:01:34.080 many more. And I feel like in this very heavy environment, Einon, 0:01:34.319 --> 0:01:37.120 we are grateful to talk about the business of toys. 0:01:37.640 --> 0:01:40.200 Having said that, we are so delighted to have you back. 0:01:40.240 --> 0:01:41.240 Welcome back, How are you? 0:01:42.319 --> 0:01:43.880 Thank you, Carol, thank you, Tam. 0:01:43.959 --> 0:01:45.320 Great to be here now. 0:01:45.400 --> 0:01:47.720 I would say we would be remiss in this heavy 0:01:47.800 --> 0:01:50.640 environment that we want to just talk a little bit 0:01:50.640 --> 0:01:54.440 about the environment. You've been to the White House. We 0:01:54.720 --> 0:01:57.640 have talked politics with you. Before you are from Israel. 0:01:58.360 --> 0:02:01.560 We've talked with you many times side attack last October, 0:02:02.160 --> 0:02:05.920 Prime Minister Benjamin Netanyahoe before that joint session of the 0:02:06.000 --> 0:02:09.520 US Congress. As a CEO, how are you navigating all 0:02:09.560 --> 0:02:12.880 of this? How are you thinking about the GEO politics 0:02:12.880 --> 0:02:17.240 that continues to be a part of our world today. 0:02:18.960 --> 0:02:22.359 Well, of course, this is an important part of our 0:02:22.400 --> 0:02:26.240 life these days, especially for me as an Israeli. I 0:02:26.320 --> 0:02:29.920 keep thinking about the hostages and pray for the release 0:02:30.760 --> 0:02:31.720 as soon as possible. 0:02:33.680 --> 0:02:37.720 What about when it comes to today's speech by net 0:02:37.840 --> 0:02:40.560 and Yahoo? Is this something that's on your radar? It's 0:02:40.560 --> 0:02:42.720 the fourth time that he's addressed Congress, the first time 0:02:42.720 --> 0:02:46.040 that he's been in the United States since the war began. 0:02:47.560 --> 0:02:50.280 As somebody from the country, how is it on your radar? 0:02:51.680 --> 0:02:53.640 Of course, it's on my radar. I haven't seen it, 0:02:53.680 --> 0:02:56.519 to be honest. I've been talking to our investors all 0:02:56.560 --> 0:02:59.960 morning following our earning. But it's something I tend towards 0:03:00.120 --> 0:03:03.240 later today, and so I'm sure we'll catch up with 0:03:03.320 --> 0:03:06.760 everything that we said in Congress today and the reactions 0:03:06.919 --> 0:03:09.880 in America, in Israel and around the world. 0:03:10.080 --> 0:03:13.000 All Right, one more questions on politics, the US race, 0:03:13.080 --> 0:03:16.680 which you know has consumed our world, all of the 0:03:16.720 --> 0:03:20.880 country the last three weeks, the November outcome. Does it 0:03:21.000 --> 0:03:24.120 matter for you as someone who runs a company, a 0:03:24.160 --> 0:03:27.839 well known, publicly iconic brand, global company, does it matter 0:03:27.919 --> 0:03:29.840 who's in the White House? Come November for you. 0:03:31.639 --> 0:03:36.200 Of course, we are following everything very closely the election 0:03:36.360 --> 0:03:41.440 process leading up to the November elections. But as a company, 0:03:41.520 --> 0:03:45.640 we have a long standing history of working with all 0:03:46.880 --> 0:03:49.800 government leaders around the world, not just in the US, 0:03:50.320 --> 0:03:54.680 and we are focused on executing our strategy and confident 0:03:54.720 --> 0:03:59.800 that we can work with everyone across the political spectrum. 0:04:00.000 --> 0:04:04.040 How would your strategy in unchanged if we saw former 0:04:04.080 --> 0:04:06.800 President Trump return to the White House and continue to 0:04:06.840 --> 0:04:11.160 see perhaps an even harsher stance towards China increased tariffs 0:04:11.160 --> 0:04:13.800 for example, that he's talked about, how would that affect 0:04:13.800 --> 0:04:14.720 your business. 0:04:16.000 --> 0:04:18.400 Well? As a company, our job is to design a 0:04:18.560 --> 0:04:22.400 flexible organization that can respond and react to market changes. 0:04:22.800 --> 0:04:26.240 And I'm not commenting specifically about terriffs or China, but 0:04:26.440 --> 0:04:28.520 in general, this is what we do as a company. 0:04:28.600 --> 0:04:31.640 We have a very strong supply chain, a very versatile 0:04:31.680 --> 0:04:35.080 business model, and we are designed to be able to 0:04:35.120 --> 0:04:39.760 respond to changes in the market in supply chain or 0:04:39.800 --> 0:04:42.760 a consumer taste for that matter. And this is something 0:04:42.839 --> 0:04:45.680 that we've done a really good job at over the 0:04:45.760 --> 0:04:50.560 last few years to create a flexible and responsive organization 0:04:50.880 --> 0:04:55.320 that can can adjust and operate in different types of environments. 0:04:55.360 --> 0:04:57.160 You know on what is flexible and responsive mean in 0:04:57.279 --> 0:05:00.440 terms of geography, where is your supply chain now in 0:05:00.560 --> 0:05:03.839 terms of in China versus other parts of the world, 0:05:04.040 --> 0:05:06.559 like how much of your products that are sold around 0:05:06.560 --> 0:05:08.800 the world are made in China versus other countries. 0:05:10.560 --> 0:05:13.040 In China we make less than a half of our 0:05:13.080 --> 0:05:16.760 product today. The industry average is about eighty to eighty 0:05:16.800 --> 0:05:20.080 five percent, so we're indexed meaningfully less in the industry. 0:05:20.600 --> 0:05:25.320 And we continue to diversify manufacturing footprint. This is not 0:05:25.360 --> 0:05:30.440 necessarily in response to any political risk, but as a company, 0:05:30.520 --> 0:05:33.200 our job is to create that flexibility. So we continue 0:05:33.200 --> 0:05:37.960 to diversify our manufacturing footprint, our own factories and some 0:05:38.000 --> 0:05:42.279 of the vendors that we work with across across different 0:05:42.480 --> 0:05:45.520 geographist to make sure that we have the right capabilities 0:05:46.040 --> 0:05:51.440 and still the ability to mobilize resources and adjust to 0:05:52.480 --> 0:05:56.839 opportunities as well as any changes in cost structure, in 0:05:56.960 --> 0:06:00.560 tariffs and capabilities that we are looking to continue to 0:06:00.760 --> 0:06:04.080 add to strengthen our capability our offering. 0:06:04.240 --> 0:06:06.679 All right, so as promised, let's get to the quarter. 0:06:06.760 --> 0:06:08.719 Let's get to the business. So talk to us about 0:06:08.720 --> 0:06:11.839 the quarter that was in the outlook. Tell us about 0:06:11.960 --> 0:06:15.479 where you are feeling real strength, where you're feeling some challenges. 0:06:17.160 --> 0:06:19.880 Well, this was a good second quarter and a good 0:06:19.920 --> 0:06:23.760 second half of first half of Mattel with significant growth, 0:06:23.760 --> 0:06:28.480 margin expansion, and improved profitability. We continue to strengthen our 0:06:28.520 --> 0:06:31.560 balance sheet and more than double free cash flow in 0:06:31.600 --> 0:06:36.880 the trailing twelve month. The industry performed better than anticipated, 0:06:37.279 --> 0:06:40.920 better than we anticipated, and Mattel gained share globally in 0:06:40.960 --> 0:06:44.400 the second quarter and the first half. And you talked 0:06:44.440 --> 0:06:48.000 about it before, Carol and Tim, I believe we spoke 0:06:48.040 --> 0:06:51.360 about how we continue to position the company for growth. 0:06:51.800 --> 0:06:55.000 We expect to grow in the second half of the 0:06:55.080 --> 0:06:59.880 year and reiterated a fullier guidance for the company. Looking ahead, 0:07:00.160 --> 0:07:03.240 we expect to outpace the industry, continue to gain more 0:07:03.279 --> 0:07:07.200 share in twenty twenty four, and grow sales and earnings 0:07:07.240 --> 0:07:08.360 in twenty twenty five. 0:07:09.200 --> 0:07:11.040 So talk to us about some of the different brands. 0:07:11.280 --> 0:07:13.960 Fisher Price launching something I grew up with, Big Time 0:07:14.480 --> 0:07:17.640 launching its new line Fisher Price would recently. How is 0:07:17.680 --> 0:07:20.800 that being received by retailers and by consumers and do 0:07:20.880 --> 0:07:24.400 you anticipate that this could be maybe a really top 0:07:24.440 --> 0:07:26.000 seller come the holidays. 0:07:27.280 --> 0:07:31.000 Fisher Price is such an incredible brand. It will be 0:07:31.040 --> 0:07:35.280 celebrating its ninety fourth anniversary this year. Fisher Price grew 0:07:35.280 --> 0:07:38.920 eleven percent in the second quarter, reflecting the early success 0:07:39.080 --> 0:07:42.360 of our new strategy, which is working well. We expect 0:07:42.400 --> 0:07:45.600 Fisher Price to grow in the second half to grow 0:07:45.640 --> 0:07:49.720 for the full year, driven by a new line of 0:07:49.760 --> 0:07:53.120 the wood segment that you mentioned that we're now expanding globally, 0:07:53.720 --> 0:07:57.720 more core lines product that are growing, and new franchises 0:07:58.000 --> 0:08:01.080 that we're adding to a little people collector. The brand 0:08:02.080 --> 0:08:06.400 is just is so much part of culture and has 0:08:06.600 --> 0:08:10.960 great trust by parents and families. We in terms of 0:08:11.040 --> 0:08:15.080 performance in the category, outperformed the industry gain share in 0:08:15.160 --> 0:08:17.800 the infant toddler in preschool category in the second quarter 0:08:17.920 --> 0:08:21.120 and the first half and was the number one with 0:08:21.360 --> 0:08:25.000 Mattel was the number one toy company globally in the category. 0:08:25.440 --> 0:08:29.600 You know, and what about hot wheels? Gross billings growth 0:08:29.640 --> 0:08:31.600 and gross billings for hot wheels was relatively weak in 0:08:31.640 --> 0:08:34.200 the second quarter. Give us an idea of the catalyst. 0:08:34.360 --> 0:08:37.680 Tell the investing audience about the catalyst for a rebound 0:08:37.679 --> 0:08:39.640 for the holiday selling season and if there are any new 0:08:39.640 --> 0:08:42.560 products or advertising come in to help push it. 0:08:44.240 --> 0:08:48.360 Hotwords is another incredible brand. Hot Wheels is on track, 0:08:48.960 --> 0:08:53.600 on track for its seventh consecutive record year, seventh consecutive 0:08:53.600 --> 0:08:56.839 record year. We couldn't be more excited and confident about 0:08:57.160 --> 0:09:01.560 where hotwitods is growing. It grew in the second in 0:09:01.600 --> 0:09:04.840 the second quarter five percent, with more activation planned for 0:09:04.880 --> 0:09:08.720 the second half. We're growing the adult collector line and 0:09:08.800 --> 0:09:13.600 more adult product. We brought any distribution globally for Hotweels 0:09:13.600 --> 0:09:16.360 specifically as well as the rest of the portfolio, and 0:09:16.440 --> 0:09:19.440 we expect to accelerate growth in the RC and skate 0:09:19.760 --> 0:09:24.760 lines and of course have another season of Hot Wheels 0:09:24.800 --> 0:09:29.040 Let's Race on Netflix that is launching this fall. So 0:09:29.240 --> 0:09:34.040 great product activated by more content and just a great 0:09:34.080 --> 0:09:37.240 line by Hot Wheels on track for its seventh consecutive 0:09:37.679 --> 0:09:38.400 year of growth. 0:09:38.440 --> 0:09:41.040 All right, so Hot Wheels for guys and gals or kids, 0:09:41.080 --> 0:09:43.760 boys and girls, but also Barbie for boys and girls 0:09:43.760 --> 0:09:46.200 whoever wants it. But let's talk Barbie, which is another 0:09:46.240 --> 0:09:49.079 one of the iconic brands, you know, and I'm certainly 0:09:49.120 --> 0:09:53.160 of Mattel Barbie brand. I'm looking at the second quarter right, 0:09:53.280 --> 0:09:55.600 sales held back by a six percent decline in global 0:09:55.600 --> 0:09:59.640 buildings for the company's flagship flagship doll segment, which includes 0:09:59.679 --> 0:10:03.040 bar Be Toughier over your comparisons in the second half, 0:10:04.000 --> 0:10:07.000 did the movie, what are you continuing to see in 0:10:07.080 --> 0:10:09.640 terms of the impact that that has had on the 0:10:09.679 --> 0:10:11.520 Barbie line, and do you expect the brand to return 0:10:11.559 --> 0:10:12.720 to growth maybe next year. 0:10:14.320 --> 0:10:19.000 Barbie is an incredible brand that never sits still, and 0:10:19.040 --> 0:10:23.040 the movie expanded the audience even more. As you would imagine, 0:10:23.400 --> 0:10:26.760 Barbie was the number one doll property globally and continued 0:10:26.800 --> 0:10:29.559 to gain share in the second quarter this year. We're 0:10:29.559 --> 0:10:35.440 celebrating Barbie's sixty fifth anniversary with multiple activations and a 0:10:35.480 --> 0:10:38.520 new brand campaign that we're launching in the fall. We're 0:10:38.559 --> 0:10:41.760 launching also new segments supported by more shelf space in 0:10:41.840 --> 0:10:45.160 the second half, so Barbie will have even more reach 0:10:47.320 --> 0:10:51.199 in the marketplace. We're launching new offering for adult collectors 0:10:51.200 --> 0:10:53.760 as well as we did for Hot Wheels, and there 0:10:53.800 --> 0:10:58.600 will be more content on Netflix targeting the kid's audience. 0:10:59.440 --> 0:11:03.800 Barbie has consistently gained global share and continue to strengthen 0:11:03.800 --> 0:11:07.679 its position as the leader in the dolls category. And 0:11:07.760 --> 0:11:12.000 you know, Carol, Yeah, very few brands have the cultural 0:11:12.120 --> 0:11:15.640 relevance as Barbie, and we couldn't be more confident about 0:11:15.640 --> 0:11:19.400 the incredible franchise. But this incredible franchise and where it 0:11:19.440 --> 0:11:20.480 will go from here, well. 0:11:20.400 --> 0:11:23.240 I have to tell you on in the newsroom earlier 0:11:23.240 --> 0:11:26.800 this morning, a bunch of us, I will say, all women, Cec, 0:11:27.040 --> 0:11:30.240 myself and Elizabeth having a conversation. I was kind of 0:11:30.520 --> 0:11:33.120 very much into Barbie, but I also talked about American Girl, 0:11:33.200 --> 0:11:35.400 where my daughter was kind of all over it, and 0:11:35.440 --> 0:11:38.360 so was Cec and Elizabeth. Anyway, we talked for a 0:11:38.400 --> 0:11:41.920 while about this. I am curious about American Girl where 0:11:41.960 --> 0:11:46.040 it still fits into your portfolio because it's interesting, it 0:11:46.040 --> 0:11:48.320 has evolved, and we kind of went back to the 0:11:48.320 --> 0:11:51.040 beginning of the brand when it before it was even owned. 0:11:50.920 --> 0:11:52.240 By you guys, about that. 0:11:52.320 --> 0:11:57.200 It really, you know, taught young individuals, young women, young 0:11:57.240 --> 0:12:00.640 girls about history, and you know they were very much 0:12:00.640 --> 0:12:02.720 tied to it. Now you've got a gap American Girl, 0:12:02.760 --> 0:12:07.040 You've got Disney collaborations. What's the thinking around American Girl. 0:12:08.440 --> 0:12:11.800 American Girl is a valued asset within the Mattel portfolio 0:12:12.240 --> 0:12:16.559 with significant fan base and great product. American Girl grew 0:12:16.679 --> 0:12:19.360 for the second quarter in a row, and we saw 0:12:19.720 --> 0:12:23.280 how American Girl is outpressing the industry in the large 0:12:23.280 --> 0:12:28.880 old category and the overall dull category, especially in the 0:12:28.920 --> 0:12:32.640 eighteen inch dolls and was up double digit. We saw 0:12:32.679 --> 0:12:37.000 the flapship flagship stores up, especially the new store in 0:12:37.200 --> 0:12:41.120 LA that was a high double digit. And we continued 0:12:41.200 --> 0:12:44.280 to optimize the rettled footprint to make sure that we 0:12:44.320 --> 0:12:48.960 are creating a holistic, omni channel experience for fans. And 0:12:49.040 --> 0:12:52.280 as you say, part of the success is how we 0:12:52.360 --> 0:12:56.320 evolved the brand and how we infuse brand purpose but 0:12:56.480 --> 0:12:59.680 also cultural relevance. And this is part of our secret 0:12:59.720 --> 0:13:02.760 sauce on the Mattel Playbook and how we continue to 0:13:02.800 --> 0:13:06.559 stay relevant and take brands that are timeless and make 0:13:06.600 --> 0:13:11.600 them timely and reach and engage consumers today and touch 0:13:11.960 --> 0:13:16.200 fans everywhere, touch their heart and mind and do things 0:13:16.200 --> 0:13:21.680 that really matter in society and engage fans at an 0:13:21.720 --> 0:13:22.440 emotional level. 0:13:22.520 --> 0:13:23.840 I have to ask you, I know there's been a 0:13:23.840 --> 0:13:25.560 Wall Street Barbie. I don't know that there's been an 0:13:25.559 --> 0:13:28.679 American Girl who works in investment banking. But having said that, 0:13:29.679 --> 0:13:31.959 a report on Monday that you guys have received a 0:13:32.000 --> 0:13:35.880 takeover approach from El Catterton, the private equity firm backed 0:13:35.880 --> 0:13:39.440 by LVMH. You've come out and said that you believe 0:13:39.480 --> 0:13:41.680 you the company can achieve a higher market value if 0:13:41.679 --> 0:13:45.800 it continues as an independent company. Are you open first 0:13:45.840 --> 0:13:48.080 of all, have they approached you and are you open 0:13:48.120 --> 0:13:48.800 to doing a deal? 0:13:50.520 --> 0:13:53.760 Well, as you would expect, we don't comment from the speculation. 0:13:54.480 --> 0:13:58.600 It's just now in. It's just you and me, so. 0:13:58.640 --> 0:14:01.200 Just between us, just between and the three of us. 0:14:01.559 --> 0:14:03.840 What I can say is that we're very confident in 0:14:03.880 --> 0:14:07.800 Motel strategy and our ability to create long term shareholder 0:14:07.880 --> 0:14:11.800 value as a stand alone company. This is what we're doing. 0:14:11.840 --> 0:14:14.760 You're seeing it in the quarter, you're seeing it at 0:14:14.800 --> 0:14:17.439 the start of this year, and you're seeing it since 0:14:17.440 --> 0:14:20.320 the start of the ten around in twenty eighteen. It's 0:14:20.360 --> 0:14:23.320 in the numbers. It's in our growth in top line 0:14:23.360 --> 0:14:26.440 by a billion dollars. It's how we continued to improve 0:14:26.520 --> 0:14:31.120 our adjusted growth margin by almost one thousand basis points 0:14:31.400 --> 0:14:34.480 and guided to a higher number another one hundred to 0:14:34.520 --> 0:14:38.600 one hundred and fifty points this year. Adjusted IBIDAH grew 0:14:38.840 --> 0:14:41.960 seven and a half times since we started the ten around, 0:14:42.440 --> 0:14:45.320 and our free cash flow went from a negative three 0:14:45.400 --> 0:14:48.440 hundred and twenty five million dollars to more than seven 0:14:48.520 --> 0:14:51.520 hundred million dollars at the end of last year. And 0:14:51.600 --> 0:14:54.720 of course we are now investment grade. It's a very 0:14:54.720 --> 0:14:56.160 weak puls So it's. 0:14:56.000 --> 0:14:58.000 Not just about price, maybe a better price. 0:15:00.080 --> 0:15:03.560 Well, it's about creating long term shareholder value and we 0:15:03.600 --> 0:15:07.320 are well positioned to build on our multi year trajectory 0:15:07.360 --> 0:15:10.080 and continue to execute our strategy and expect the share 0:15:10.160 --> 0:15:13.240 price to reflect this over time. 0:15:14.560 --> 0:15:15.840 What would make you do a deal? 0:15:19.120 --> 0:15:22.960 Well, broadly speaking, we are here to create long term 0:15:23.040 --> 0:15:27.840 shareholder value and we do it in every day. This 0:15:28.000 --> 0:15:31.480 is what we focused on and we consistently execute and 0:15:31.520 --> 0:15:35.080 deliver on the strategy. That's what we focused on, and 0:15:35.120 --> 0:15:38.920 we believe that we create that value, long term shareholder 0:15:39.000 --> 0:15:40.560 value as a standalone company. 0:15:41.600 --> 0:15:45.800 So to that point, Lina Dunham, stepping away from the 0:15:45.800 --> 0:15:48.080 poly pocket movie, what are your plans for that brand 0:15:48.120 --> 0:15:50.720 and tell us what's the next you know, big screen 0:15:50.840 --> 0:15:52.760 and you know, I think you guys have a ton 0:15:52.800 --> 0:15:54.560 of projects in the works. 0:15:54.640 --> 0:15:55.920 What can we look forward. 0:15:55.640 --> 0:16:00.960 To as we're very excited by the progress we're seeing 0:16:01.000 --> 0:16:05.240 in our film strategy. Mattel Films. Of course, the Barbe 0:16:05.240 --> 0:16:07.720 movie is set the scene, but there's so much more 0:16:07.880 --> 0:16:12.520 and we currently have sixteen projects in the making. We 0:16:12.680 --> 0:16:15.960 recently announced a release date for Masters of the Universes 0:16:15.960 --> 0:16:19.280 would be June fifth of twenty twenty six. We announced 0:16:19.280 --> 0:16:23.160 a new director for Matchbox and a new movie for 0:16:23.400 --> 0:16:26.560 Months de High at Universal with the Kiva Goldsman, a 0:16:26.600 --> 0:16:31.360 two time Oscar winning writer and producer. So there's a 0:16:31.360 --> 0:16:35.920 lot that is going on with everything at Mattel Films. 0:16:36.440 --> 0:16:42.440 The Polypocket project is progressing. Lily Collins is still attached 0:16:42.960 --> 0:16:46.120 and we're very excited about how this movie is shaping up, 0:16:46.400 --> 0:16:50.720 as well as the rest of the films. Late that again, 0:16:50.760 --> 0:16:54.640 it's all about It's all about collaborating with leading filmmakers 0:16:55.120 --> 0:16:58.240 to make standout quality movies based on our iconic brands 0:16:58.240 --> 0:17:02.400 that will resonate in culture and appeal to global audiences. 0:17:02.720 --> 0:17:04.560 Eno and Ken wants to know, does he get a movie? 0:17:04.560 --> 0:17:05.520 Does he get a movie? 0:17:07.640 --> 0:17:11.240 Well, of course, we continue to look for opportunities to 0:17:11.320 --> 0:17:14.760 engage bands every way we can, and one day maybe 0:17:14.800 --> 0:17:17.240 you will have a movie as well. 0:17:16.400 --> 0:17:18.719 I'm open, I'm going to count on you. 0:17:18.760 --> 0:17:20.439 Maybe you can help me with the hot wheels on 0:17:20.440 --> 0:17:22.000 your desk, but you gave it to you gave it 0:17:22.040 --> 0:17:22.480 to my son. 0:17:22.680 --> 0:17:26.520 Little cameos in movies courtesy of Bloomberg Programming. You know, 0:17:26.720 --> 0:17:28.399 thank you as well. A lot on your plate, so 0:17:28.480 --> 0:17:30.600 appreciate all the time. You always give us a fine 0:17:30.640 --> 0:17:32.920 for us. Great to check in with you you on 0:17:33.000 --> 0:17:35.320 cries of course, folks. He is the CEO and chairman 0:17:35.400 --> 0:17:37.520 of Mittel, joining us. As we said, Mattel shares are 0:17:37.560 --> 0:17:40.440 up nine percent. They're up almost sixteen percent this week, 0:17:40.720 --> 0:17:45.879 fifteen percent pop on Monday, courtesy of some you know, 0:17:46.200 --> 0:17:47.880 maybe that chatter. 0:17:47.840 --> 0:17:49.280 Deal chat chat. How does that sound? 0:17:51.480 --> 0:17:55.320 You're listening to the Bloomberg Business Week podcast. Listen live 0:17:55.440 --> 0:17:58.080 each weekday. He's starting at two pm Eastern on Apple 0:17:58.119 --> 0:18:01.040 car Play and Android Auto with the Blomberg Business Ad. 0:18:01.240 --> 0:18:04.120 You can also listen live on Amazon Alexa from our 0:18:04.119 --> 0:18:08.520 flagship New York station jo Say Alexa playing Bloomberg eleven thirty. 0:18:10.080 --> 0:18:12.119 Our next guest is the CEO of the largest company 0:18:12.160 --> 0:18:14.680 that you've probably never heard of and less you work 0:18:14.680 --> 0:18:18.560 in the industry. Burns and McDonald is an engineering, architecture, construction, 0:18:18.600 --> 0:18:21.760 and environmental and consulting firm that plays in just a 0:18:21.880 --> 0:18:26.160 ton of industries. We're talking aviation, infrastructure, healthcare, military construction, 0:18:26.560 --> 0:18:30.359 consumer product manufacturing, food and beverage production, oil, gas, chemicals, 0:18:30.720 --> 0:18:33.440 renewable energy, telecommunications, and more. 0:18:33.600 --> 0:18:35.879 Kind of the economy in a snapshot, it's one hundred 0:18:35.880 --> 0:18:38.800 percent employee owned. They've got more than seventy offices in 0:18:38.840 --> 0:18:40.840 the US and around the world. Needless to say, Leslie 0:18:40.880 --> 0:18:42.560 Duke has a good idea and she's probably got a 0:18:42.600 --> 0:18:45.520 great idea of how economies tim around the world are doing. 0:18:45.680 --> 0:18:48.520 Welcome Leslie Duke, CEO of Burns and McDonald based in 0:18:48.600 --> 0:18:51.040 Kansas City, but joining us here in our Bloomberg Interactive 0:18:51.040 --> 0:18:51.720 Brokers studio. 0:18:51.720 --> 0:18:52.960 How are you very good. 0:18:52.920 --> 0:18:54.320 Tim Thank you so much for having me. 0:18:54.359 --> 0:18:56.600 It's good to be here with you both today and 0:18:56.640 --> 0:18:58.840 I look forward to visiting with I think some very 0:18:58.840 --> 0:19:02.840 interesting things going on in the energy and data center markets. 0:19:02.880 --> 0:19:05.080 It's a really fascinating time. 0:19:05.280 --> 0:19:08.119 Yeah, we talk a lot about energy and data centers 0:19:08.160 --> 0:19:10.760 because data centers are using so much energy. We're going 0:19:10.800 --> 0:19:11.919 to get to that in just a minute. But I 0:19:11.920 --> 0:19:14.960 want to start big picture because, as I mentioned, you 0:19:15.160 --> 0:19:17.280 guys play in everything, so you have a really good 0:19:17.359 --> 0:19:21.919 understanding of how economies around the world are doing at 0:19:21.960 --> 0:19:24.520 a high level. What are you seeing out there specifically 0:19:24.520 --> 0:19:25.080 in the US. 0:19:25.600 --> 0:19:28.119 Sure, we're mostly domestically focused, so I think I have 0:19:28.200 --> 0:19:31.400 a pretty good pulse on the US marketplace. Things are 0:19:31.400 --> 0:19:36.000 busy in the infrastructure business. We're soliciting and receiving a 0:19:36.040 --> 0:19:38.520 lot of work. Still, I think there was a little 0:19:38.520 --> 0:19:40.760 bit of a slow down in the second quarter would 0:19:40.760 --> 0:19:43.320 be what I would feel. Maybe a little into first quarter, 0:19:43.760 --> 0:19:46.720 we're back to a nice rhythm of work coming through 0:19:46.760 --> 0:19:47.360 our doors. 0:19:48.320 --> 0:19:50.680 Construction has been robust. 0:19:50.320 --> 0:19:53.600 Throughout and a lot of people ask me about the 0:19:53.600 --> 0:19:57.760 election and how that's impacting our business, and we do 0:19:57.800 --> 0:20:00.920 think there's some finance that slowed down. People are kind 0:20:00.920 --> 0:20:04.600 of waiting on some things, but generally speaking, there's. 0:20:04.440 --> 0:20:05.240 Still a lot to do. 0:20:05.400 --> 0:20:07.760 So some of the funding that's come out of the 0:20:07.800 --> 0:20:12.920 government recently, the IJA and IRA funding has really fueled 0:20:12.960 --> 0:20:15.280 a lot of projects in our industry. 0:20:14.840 --> 0:20:16.199 And so that's been good for business. 0:20:16.240 --> 0:20:18.760 It has been great for business, and I think that 0:20:18.840 --> 0:20:20.879 it's also you know, we're a little bit of a 0:20:20.960 --> 0:20:25.199 counter economy business as it is, so we're resilient in 0:20:25.240 --> 0:20:29.160 that way. But I think that then there are these 0:20:29.200 --> 0:20:33.320 other business renewable energy, or data centers that are coming 0:20:33.359 --> 0:20:35.560 in at a time where other things may be slowing down. 0:20:35.600 --> 0:20:38.040 And when you have the diversity Burns and mac does, 0:20:38.640 --> 0:20:41.600 you are able to swing your workforce over and start 0:20:41.600 --> 0:20:44.159 to respond to things that are very very hot right now. 0:20:44.560 --> 0:20:47.159 And we certainly are seeing that across the board when 0:20:47.240 --> 0:20:47.880 it comes to both. 0:20:48.000 --> 0:20:50.080 When you do a project, though, I mean, how long 0:20:50.080 --> 0:20:51.640 does it go on for? So it kind of gives 0:20:51.640 --> 0:20:53.159 you a certain amount of lead time. Right when you 0:20:53.200 --> 0:20:55.679 say that, you guys are kind of counter you know, 0:20:55.720 --> 0:20:58.160 the economy in terms of what's going on the cycles. 0:20:58.280 --> 0:20:59.920 Give us an idea, like remind us. 0:21:00.080 --> 0:21:01.760 Sure, you know, it depends on the project. So there's 0:21:01.760 --> 0:21:04.400 some that are pretty quick hitters. Data for an, for example, 0:21:04.520 --> 0:21:06.879 is very fast moving. They can they can build a 0:21:06.960 --> 0:21:09.600 data center in less than two years now. 0:21:09.520 --> 0:21:11.520 Because it's basically a box with a bunch of machines. 0:21:11.640 --> 0:21:12.800 A box and a bunch of machines. 0:21:12.800 --> 0:21:15.960 Now they get electricity, that's right, They need power in 0:21:16.000 --> 0:21:20.360 that electricity. Yeah, that's exactly right. And power is really 0:21:20.440 --> 0:21:22.399 I mean, we laugh a lot about it, but it 0:21:22.480 --> 0:21:26.679 is becoming extremely constrained because the need is growing. The 0:21:26.760 --> 0:21:30.560 hyper scale is real. So the scarcity of places in 0:21:30.600 --> 0:21:35.560 the United States that can actually attract hyper scale is shrinking, 0:21:35.720 --> 0:21:37.960 so it's harder and harder to find a place you 0:21:37.960 --> 0:21:39.200 can put a hyper scale data. 0:21:39.240 --> 0:21:42.160 Is that constraining the development of data centers right now? 0:21:42.520 --> 0:21:44.000 The build out it is. 0:21:44.440 --> 0:21:46.919 Changing the way that they're looking at how they need 0:21:46.960 --> 0:21:48.760 to get ahead of it. So I think there's a 0:21:48.960 --> 0:21:52.320 much broader look at how to approach data and power, 0:21:52.920 --> 0:21:56.960 including owning it themselves. So data may not wait on 0:21:57.040 --> 0:22:00.199 an electric utility today, and they may start to own 0:22:00.440 --> 0:22:04.399 their own power island off grid, maybe use the grid 0:22:04.440 --> 0:22:06.960 for reliability and backup power. 0:22:06.720 --> 0:22:08.840