Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul'sweenye.
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Speaker 1: Breaking market headlines and corporate news from across the globe.
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Speaker 1: Intelligence with Alex Steel and Paulswhennye on Bloomberg Radio.
Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big
Speaker 2: business stories impacting Wall Street and the global markets.
Speaker 3: Each and every week we provide enough research and data
Speaker 3: on some of the two thousand companies and one hundred
Speaker 3: and thirty industries our analysts cover worldwide.
Speaker 2: Today we'll take a look at how one company is
Speaker 2: looking to fix your terrible board meetings.
Speaker 3: Plus we'll discuss how the energy transition will drive a
Speaker 3: significant uptick in demand for metals.
Speaker 2: But first, we got the Olympics coming up this summer
Speaker 2: in Paris. How cool was that going to be? But
Speaker 2: good luck try to get a hotel room there or
Speaker 2: trying to get accommodation to anywhere. You know, who would
Speaker 2: know about this stuff. Airbnb. Dave Stevenson joins us. He's
Speaker 2: the chief business officer for Airbnb. Dave talked to us
Speaker 2: about your business in Paris for this summer. What are
Speaker 2: you guys seeing.
Speaker 4: You know, one of the great things about having airbnbs
Speaker 4: in Paris is that the actual the volume of airbnbs
Speaker 4: have gone up pretty dramatically. We have forty percent more
Speaker 4: active listings than we had a year ago. And by
Speaker 4: having those extra listings, we're actually able to keep prices
Speaker 4: reasonable because we're able to add so much capacity to
Speaker 4: the stays there. So there are still places available. You know,
Speaker 4: we're only twenty four days out, but you know you
Speaker 4: can keep booking. There are airbnbs ready for guests to
Speaker 4: come from around the world.
Speaker 3: Yeah, because you know why everyone's leaving Paris. Yeah, all
Speaker 3: the preachers to like, get me out of here, and
Speaker 3: they're going this outh of France anyway, sorry, go ahead.
Speaker 4: So David, well, it's how bad they're actually able to earn,
Speaker 4: you know, two thousand euros on average for a host
Speaker 4: in Paris, and so yeah, many people do leave and
Speaker 4: share their homes and welcome people from other countries to
Speaker 4: come to the vilops.
Speaker 2: Talk to us about where the where you're seeing travelers
Speaker 2: come from to Paris.
Speaker 4: Yeah, it's interesting. Some of our top countries are the US,
Speaker 4: UK and actually people from other areas of France coming
Speaker 4: into Paris for the Olympics. We're also seeing some interesting
Speaker 4: trends where people are staying. You know, the Olympics are
Speaker 4: actually not only in Paris, They're kind of spread around
Speaker 4: the country and so you know, we're seeing people staying
Speaker 4: in airbnbs in Lelle where some of the basketball is
Speaker 4: being played. You know, We're seeing them in Leone where
Speaker 4: some of the football, you know, soccer matches are being played.
Speaker 4: You're seeing Spaniards and Brazilians stan Bordeaux because their national
Speaker 4: teams will be playing soccer out there. So we're not
Speaker 4: just seeing people come in Paris, They're staying in airbnbs
Speaker 4: all around the country.
Speaker 3: That's interesting. I did not know that you also transition
Speaker 3: recently from CFO to CBO. Is that so chief financial
Speaker 3: officer to Chief business Officer?
Speaker 5: How is that?
Speaker 2: Like?
Speaker 3: What how does your job change with that title?
Speaker 4: Yeah, no, I'm the Chief Business Officer I'm also the
Speaker 4: head of Employee Experience, so the head of HR, which
Speaker 4: I've been doing now for three years, but the chief
Speaker 4: business officer, you know, I'm focused on growth of a
Speaker 4: company and expanding into new and new business areas. So
Speaker 4: we're expanding beyond the kind of core stays business here
Speaker 4: at Airbnb into things like services and experiences over time,
Speaker 4: and so me and my team, that's what we're focused on,
Speaker 4: growing the existing business and expanding into new ones.
Speaker 2: So for just the business in general, how is travel
Speaker 2: this business as we crank up here in the US
Speaker 2: for fourth of July, and then of course in Europe
Speaker 2: they have their big travel during the summer, particularly August.
Speaker 2: Give us a sense of kind of where you're seeing
Speaker 2: the business these days.
Speaker 4: Yeah, you know, we're seeing more people travel this summer
Speaker 4: than they ever have before on Airbnb. Continency, great growth, yes,
Speaker 4: strong growth, especially from your Americans travel to Europe. You know,
Speaker 4: we continue to have a strong dollar, which enables strength there,
Speaker 4: and we're actually seeing you nice strength and people even
Speaker 4: traveling from US into Asia.
Speaker 3: US into Asia, okay, which is not rippin' dollar. Yeah,
Speaker 3: you just won't even go anywhere pretty much. What about
Speaker 3: the opposite, is anyone coming to the US. We're making
Speaker 3: any money on Airbnb here in the US anymore.
Speaker 1: Absolutely.
Speaker 4: I mean, the people are still traveling from overseas in
Speaker 4: the US. You know, actually the majority of our travel
Speaker 4: still is actually domestic travel in any given country. So
Speaker 4: we're kind of talking a lot about people moving around
Speaker 4: the world, but a lot of the travel is just
Speaker 4: people going. You know, in the US, it's a lot
Speaker 4: of beach destinations. You're seeing great traveled down to Florida,
Speaker 4: up onto the East Coast, you know, onto the Jersey
Speaker 4: Shore and other places. So you know, people are still
Speaker 4: traveling out to the beaches to visit with family and
Speaker 4: enjoy the fourth of July.
Speaker 2: Dave, what's a typical or prototypical Airbnb customer look like?
Speaker 4: You know, there we have customers of all kinds. You know,
Speaker 4: it's everything from young gen Z, millennials to families. You know,
Speaker 4: a large number of our people in travel in airbnbur
Speaker 4: group travel. Multiple people travel together because you get more
Speaker 4: you might get multiple bedrooms, you have multiple amenities, often
Speaker 4: with a kitchen, you know, maybe a washer and dryer.
Speaker 4: It's one of the things reasons why we've recently launched
Speaker 4: some of these group travel features to enable more people
Speaker 4: to stay together more easily. We have things like shared Wishless,
Speaker 4: shared messaging capability, and that's helping in Paris where over
Speaker 4: fifty percent of the people traveling to the Paris Olympics
Speaker 4: have three or more people, and so the group travel
Speaker 4: is a key benefit of staying on Airbnb.
Speaker 3: That's a good point. What are there trends that you're
Speaker 3: you think you're going to be dealing with in twenty
Speaker 3: twenty five, kind of after we get through the Olympics.
Speaker 4: You know, I think we're going to continue to see
Speaker 4: strength and travel. I think one of the things we've
Speaker 4: seen since the pandemic is that people realize how much
Speaker 4: they miss being able to kind of travel, be with
Speaker 4: family and friends, that experiences are maybe more important than things.
Speaker 4: I think that trend will continue, and we're going to
Speaker 4: see people wanting to spend time with family and friends
Speaker 4: doing things together.
Speaker 1: So that's the big.
Speaker 4: Trend that we'll see in twenty twenty five, continued experiences.
Speaker 3: Our Thanks to Airbnb Chief business Officer Dave Stevensim.
Speaker 2: We now moved to the cloud space. ZECH, a cloud
Speaker 2: based software company, is now trying to fix any potential
Speaker 2: dread that you may have for an upcoming board meeting.
Speaker 3: The company distills hundreds of pages of corporate documents and
Speaker 3: to interactive websites for boards to expedite meetings, and even
Speaker 3: has an AI product. And recently ZECH announced it close
Speaker 3: a seven and a half million dollar investment led by
Speaker 3: Salesforce Ventures.
Speaker 2: For more and all this, we were joined by ZECH
Speaker 2: co founder Edward Norton. We first asked him more about
Speaker 2: what ZECH is trying to do.
Speaker 6: We're trying to make the experience between management of organizations,
Speaker 6: and I say that meaning corporations or nonprofits because obviously
Speaker 6: we've got a couple million nonprofit organizations in this country
Speaker 6: that have governance and boards and stuff like that. We're
Speaker 6: trying to take what we feel is an increasingly toxic
Speaker 6: dynamic and reform it into being what it's supposed to be,
Speaker 6: which is a relationship that that propels in organizations, supports,
Speaker 6: you know, brings additional leverage positivity to an organization. And
Speaker 6: we you know, I've definitely had some people say to me, like,
Speaker 6: you have an interesting day job, why would you get
Speaker 6: involved in.
Speaker 2: And your day job Just for folks that on the radio,
Speaker 2: Edward Norton Actor has been in a bunch of movies
Speaker 2: and all that kind of stuff.
Speaker 6: Yeah, the and I and I will I will admit that,
Speaker 6: you know, on the surface, like a software platform for
Speaker 6: for board governance features seems pretty esoteric. But it grew
Speaker 6: out of it grew out of my own experiences over
Speaker 6: the last thirty years, not dissimilar to years from serving
Speaker 6: on the board of arts organizations, serving on you know,
Speaker 6: conservation organization boards. And then as I built my own companies,
Speaker 6: and I've built a few software companies that that we
Speaker 6: had our own boards, people like Fred Wilson from Union
Speaker 6: Square or you know, Excel or gray Lock or these firms.
Speaker 6: We were on the management side and we were experiencing
Speaker 6: what it meant to have a board. And then when
Speaker 6: I sold one of my companies and I joined the
Speaker 6: board of GoFundMe, the company that acquired us, you know,
Speaker 6: I started sitting on corporate boards and my partners and
Speaker 6: I really started feeling that there was this elephant in
Speaker 6: the room, which is that is that companies go through
Speaker 6: four to eight times a year. They go pencils down
Speaker 6: to get ready for this thing that essentially to them
Speaker 6: feels like a hall monitoring moment and board members. On
Speaker 6: the other hand, when I was a board member, the
Speaker 6: thirty six hours before the meeting, you get a ninety
Speaker 6: page PDF and you're supposed to read it in the
Speaker 6: airport terminal, and then you go to the meeting and
Speaker 6: get it read back to you. You know what I mean,
Speaker 6: Like there was just and so.
Speaker 3: You're looking to make it a more what interactive visual
Speaker 3: engaging experience.
Speaker 6: I think we say two things. One is quantitatively, board
Speaker 6: meetings are an enormous waste of time for everybody, and
Speaker 6: that has to do with the amount of redundant time
Speaker 6: waste on setting these meetings up and the presentation materials.
Speaker 6: And that can be crushed down by having cloud based
Speaker 6: AI powered tools that make it like a tenth the
Speaker 6: time for a company. On zech a company can set
Speaker 6: up for a board meeting in one tenth the time
Speaker 6: that they were using to prep before it. Board members
Speaker 6: should get to read something that's you know, you wouldn't
Speaker 6: read in the New York Times or Bloomberg on a PDF.
Speaker 6: You read it in a mobile friendly scroll right that
Speaker 6: we expect that now, and so everything about the user
Speaker 6: interface should be easier for both sides of the table.
Speaker 6: But also think about this, think about how much time,
Speaker 6: how many professional, talented people with time is valuable sit
Speaker 6: there in board meetings, approving minutes, approvals, approving stock option packages,
Speaker 6: things that they ought to be able to do from
Speaker 6: the airport lounge in advance. So we built governance function
Speaker 6: that can be interactive and mobile.
Speaker 2: And also so your customer is the board.
Speaker 6: The customer is the company and the board. You know, yeah,
Speaker 6: both sides, management and board members suffer in different ways,
Speaker 6: and we've tried to reform it. But when you crush
Speaker 6: the redundant inefficiency of time waste, you improve the quality
Speaker 6: of the meeting too, because a board meeting should be
Speaker 6: a forward looking experience, not a You don't want to
Speaker 6: spend hours looking backward. Everybody can ingest the looking backward
Speaker 6: part before the meeting. You want the meeting to be
Speaker 6: propulsive and additive to where the company or the organization
Speaker 6: is trying to go. And the best thing about what
Speaker 6: people are saying to us is not just oh, we
Speaker 6: really love the user interface. It's much easier, it's easier
Speaker 6: to read. We love that they're saying to us. This
Speaker 6: has radically improved the quality and the value of the
Speaker 6: meeting itself and what we're getting out of our board.
Speaker 3: So you guys just raised about seven and a half
Speaker 3: million Series A led by Salesforce Ventures, including some other
Speaker 3: guys as well.
Speaker 5: What are you gonna do with it?
Speaker 3: And what's sort of your angle here?
Speaker 5: Well?
Speaker 6: You know, I think if you look at I mean,
Speaker 6: first of all, Salesforce to this day is still I mean,
Speaker 6: they still are the greatest innovator in cloud based corporate tools.
Speaker 6: And I've known Mark Benyoff a long time, even though
Speaker 6: I never told him that we were doing this with
Speaker 6: his own team until it was done because I didn't
Speaker 6: I didn't want to, you know, I didn't want it
Speaker 6: to come from the top down. The Salesforce team is
Speaker 6: really phenomenal. But you know, our fantasy was to work
Speaker 6: with Salesforce because really nobody, nobody understands the business of
Speaker 6: cloud based corporate tools better than they do. And I
Speaker 6: also like their ethos as a company. I think they
Speaker 6: have a great customer service ethos there. But you know,
Speaker 6: if you look at think about today, would you ever
Speaker 6: get a FedEx package with with signature tabs on your
Speaker 6: legal documents?
Speaker 7: No?
Speaker 6: You get it in DocuSign now.
Speaker 5: Right, You don't.
Speaker 6: You don't manage your cap table in Excel spreadsheets anymore.
Speaker 6: You use Karta, and we've we've made this evolution towards
Speaker 6: Lots of aspects of corporate function have gone into the cloud,
Speaker 6: but this really critical function hasn't. And we think that
Speaker 6: on a business level. To be honest, if you look
Speaker 6: at you know Karta, which is a seven billion dollar
Speaker 6: private company, and docu sign is a fifteen billion dollar
Speaker 6: public company, there's an enormous market in relatively low priced
Speaker 6: corporate software tools, and we really thought this was a
Speaker 6: good business. We think there's a very large marketplace of
Speaker 6: companies and nonprofit orgs that need to reform this critical piece.
Speaker 3: All right, thanks, is that co founder Edward Norton. Coming up,
Speaker 3: we're going to break down the Supreme Court decision to
Speaker 3: overturn the Chevron Rule and how that could put climate
Speaker 3: targets at risk.
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
Speaker 2: depth research and data on two thousand companies and one
Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via
Speaker 2: b I go on the terminal.
Speaker 3: I'm Paul Sweeney, m Alex Steel, and this is Bloomberg.
Speaker 1: This is Bloomberg Intelligence with Alex Steelen Pohlsweened on Bloomberg Radio.
Speaker 3: Last week, the Supreme Court overturned a nineteen eighty four
Speaker 3: decision known as a Chevron rule that experts say, we'll
Speaker 3: make the EPA's job to regulate methane and carbon dioxide
Speaker 3: emissions more challenging, potentially putting US climate targets at risk
Speaker 3: for more. We spoke with Bloomberg Intelligence senior ESG Climate
Speaker 3: analyst Andrew John Stephenson.
Speaker 8: If you think about the Clean Air Act, that's the
Speaker 8: biggest thing the EUP has ever done. It started in
Speaker 8: nineteen seventy with one document that said basically, go to it.
Speaker 8: We need to reduce the amount of air pollution in
Speaker 8: the air. We need a lot of different levers to
Speaker 8: pull to make that happen. We're kind of deferring to
Speaker 8: experts to do that. And you know, they did it
Speaker 8: for about twenty years. And then they had another revision
Speaker 8: Clean Air Act too, and that's the one that we're
Speaker 8: enjoying today with when they basically said, you did a
Speaker 8: decent job, let's keep going, Let's keep driving down the
Speaker 8: air pollution. And you know, here we are today with
Speaker 8: the cleanest there we've seen in you know, since the
Speaker 8: nine early nineteen hundreds basically, so it's been very, very successful.
Speaker 2: Yeah I'm not that old, but I remember first going
Speaker 2: the Los Angeles earlier in my career and you could
Speaker 2: see the smog. Literally it was brown, it was orange,
Speaker 2: kind of funky. Now you rarely have ever have any
Speaker 2: problems out there, so I kind of have been a
Speaker 2: fan at EPA. It's given the Chevron ruling. What does
Speaker 2: it mean for climate in your part of the world.
Speaker 2: What's it mean for the energy industry?
Speaker 8: I mean, it's troubling on a couple fronts. The first
Speaker 8: is with respect to the oil and gas industry. The
Speaker 8: big oil companies have done a basically a fantastic job
Speaker 8: of driving down a big chunk of their pollution from methane.
Speaker 8: So methane is really the thing that you really want
Speaker 8: to address when it comes to the oil and gas industry,
Speaker 8: which is just sort of leaking natural gas into the atmosphere.
Speaker 8: And the bigger companies have done a fantastic job, but
Speaker 8: the smaller companies, basically are the private companies, haven't moved
Speaker 8: on it. And so the leadership we've seen from Exon
Speaker 8: Mobile and others. Has been really transformative in terms of
Speaker 8: what's happening for the bigger companies. But unless the APA
Speaker 8: does work to kind of push along the rest, and
Speaker 8: we're talking about still half of the production comes from
Speaker 8: small companies that are private, we're not going to get
Speaker 8: anywhere near where we need to go on from an
Speaker 8: emission standpoint from the oil and gas industry. So that's
Speaker 8: sort of one. The second is really with respect to
Speaker 8: the power sector. So the power sector, we need more power.
Speaker 8: We've basically gone from having a coma power growth over
Speaker 8: the last decade and now because of AI and evs,
Speaker 8: we have power demand somewhere around two and a half
Speaker 8: percent a year and that has to be filled with something.
Speaker 8: And it looks like gas is going to be a
Speaker 8: candidate in the next several years because there's just so
Speaker 8: much demand that needs to come online. And there was
Speaker 8: a ruling at least from the APA that the gas
Speaker 8: companies that they were going to build a new power
Speaker 8: plant would have to capture that gas, and that doesn't
Speaker 8: look like it's going to happen.
Speaker 3: So because of the ruling, I mean the power coma
Speaker 3: that was actually a grit I'm going to steal that.
Speaker 3: I hope that's okay. So you were a ESG climate analyst,
Speaker 3: so that's environmental, social and governance. Does the social and
Speaker 3: governance part of your job get affected by the Supreme
Speaker 3: Court decision?
Speaker 8: Well, so people, some of the people think of the
Speaker 8: environmental it does conclude chemicals and things like that. Obviously
Speaker 8: that's going to be a bigger problem the social If
Speaker 8: you think about health, that's really what's going to happen
Speaker 8: with respect to this ruling. So we are going to
Speaker 8: have poorer health. I mean, the ability for judges to
Speaker 8: make decisions that are very complicated, I mean you're talking
Speaker 8: about I mean I just mentioned the Clean Air Act.
Speaker 8: That's a fifty year project with thousands of people working
Speaker 8: on it to have an opinion on how to get
Speaker 8: from A to B. And we are now expected to
Speaker 8: have judges have an opinion that is just wildly professional
Speaker 8: in a number of areas, and that includes things like
Speaker 8: PF the kind of forever chemicals. So that's going to
Speaker 8: affect health and food safety. So there's a lot of
Speaker 8: things on that side that are going to be affected
Speaker 8: as well.
Speaker 2: So do we have any experience on kind of how
Speaker 2: this works out side of the regulatory agencies? Are the judges?
Speaker 2: Are they making reasonable rulings when applicable?
Speaker 8: So yeah, I mean the pushback was that these are
Speaker 8: the judges and the agencies. There's no interaction and there's
Speaker 8: quite a bit that goes on and I think the
Speaker 8: agency you'll only win about seventy percent of the time.
Speaker 8: So the judges actually have had input into this, but
Speaker 8: you're really relying and it can swing both ways. Which
Speaker 8: is the really kind of conterintuitive part is that you
Speaker 8: could have a judge that the sides it needs to
Speaker 8: be more stringent, right, so it can go in different directions.
Speaker 8: And I mean it's ultimately been deferred to the Chevron
Speaker 8: defense and they say, okay, well let the agencies deal
Speaker 8: with it. And now we have that kind of open air,
Speaker 8: open terrain. So it's very difficult to see how things
Speaker 8: move as smoothly and in such an organized fashion as
Speaker 8: we've had previously.
Speaker 3: Yeah, cause the other side will say, well, judges do
Speaker 3: this all the time, like they're ruling on different cases
Speaker 3: that they don't have an expertise about all the time.
Speaker 3: What's the difference for the companies that you cover? Which
Speaker 3: companies will be the most impacted.
Speaker 8: So the companies that are really if you think about
Speaker 8: what's going on with the growth of you let's just
Speaker 8: talk about power for a second. The companies that are
Speaker 8: really taking up a challenge with respect to you know,
Speaker 8: power demand going up and dealing with it. Really on
Speaker 8: a kind of the clean energy front. There's two benefits.
Speaker 1: You get.
Speaker 8: You get paid for capex right when you're a utility company.
Speaker 8: So the more of that capex that goes into renewables
Speaker 8: and grid and things like like that, you get basically
Speaker 8: one hundred percent of that money is you can earn
Speaker 8: a return on it, whereas if you build a gas
Speaker 8: plant you only get about half that because half of
Speaker 8: the cost of the plant is in fuel and you
Speaker 8: don't get paid for that is a utility. So the
Speaker 8: companies like Constellation Energy are still expected to do very
Speaker 8: well next Era Energy because of the IRA, are getting
Speaker 8: very strong incentives to continue to produce as much clean
Speaker 8: energy as they can, and they're going to there if
Speaker 8: you look at their stock prices, they've reflected that in
Speaker 8: the last little bit. But from the other side of
Speaker 8: the equation, which is the oil and gas industry, the
Speaker 8: leaders are already the leader, you know, and they've performed
Speaker 8: exceptionally well. If you look at the group that is
Speaker 8: the lowest methane producers have done very very well against
Speaker 8: the other.
Speaker 3: Guys, all right, thanks to Bloomberg Intelligence Senior ESG climate
Speaker 3: analyst Andrew John Stephenson.
Speaker 2: We next take a look at the Swedish Swiss company ABB.
Speaker 3: ABB is a technology leader in electrification and automation, enabling
Speaker 3: a more sustainable and resource efficient future.
Speaker 2: Guests hos Chessman and I were joined by ABB chairman
Speaker 2: Peter Vassar. We first asked Peter where the focus this
Speaker 2: company is these days.
Speaker 9: It's clearly it's the energy transition, which is not only
Speaker 9: the hard to abate sectors, it's in general the move
Speaker 9: from a more fossile driven energy system into an electric
Speaker 9: energy system. And there we obviously contribute with our products
Speaker 9: and systems, which gives us energy savings between twenty and
Speaker 9: forty or even fifty percent. So that's one angle. The
Speaker 9: other one is all linked to new technologies around automation
Speaker 9: and robotics, because we are we're leading company in both areas,
Speaker 9: and that has to do with the reshuring bringing things
Speaker 9: closer home again where the markets are but also in
Speaker 9: some countries dealing with the demographics because we have less
Speaker 9: and less people working in the working age, and therefore
Speaker 9: robotics and the automation becomes very important. And the last
Speaker 9: one is AI, which will revolutionize obviously all what's related
Speaker 9: to automation. In the future.
Speaker 5: We'll talk to us more about what you think is
Speaker 5: the best way to try to scale manufacturing. When it
Speaker 5: comes to the EVE charging space.
Speaker 9: I think what we really need on the emobility side,
Speaker 9: let me put it this way, is really work on
Speaker 9: two fronts. One is a technical side on the charging side,
Speaker 9: but the other one is also on the user friendliness side,
Speaker 9: so that they become actually more reliable, they are much
Speaker 9: more modern. On the manufacturing side, I think we have
Speaker 9: had clearly in some countries and regions there was some
Speaker 9: scarcity of manufacturing capacity, which I think have been sold.
Speaker 9: Was not an issue for ABB in that sense, but
Speaker 9: it's the product evolution which is very key.
Speaker 5: Now.
Speaker 9: On the other side, I think one that should not
Speaker 9: forget that the whole network of electrification needs to be
Speaker 9: up to speed. You cannot just actually consume much more energy.
Speaker 9: You also need to build the transmission lines that the
Speaker 9: power actually comes in where we have got let's say
Speaker 9: the charge is installed either for private passenger cars or
Speaker 9: for buses, ships, trains, whatever you want to call it.
Speaker 9: So I think we need much more infrastructure investments on
Speaker 9: the one side, and really really to actually get the
Speaker 9: EV charging and the passenger cars based on electrification much
Speaker 9: more developed in the future.
Speaker 2: Peter, who are some of your bigger customers that you're
Speaker 2: working with these days?
Speaker 9: We are here in the United States, so we have
Speaker 9: all kind of factoring companies in that sense. But on
Speaker 9: the industrial side, any any company you can think of,
Speaker 9: which are they are in manufacturing space, for example, they
Speaker 9: use our actification products, they use our automation products. So
Speaker 9: you have all the industrial companies and that's where we
Speaker 9: make the difference. The other side, utilities are very key.
Speaker 9: As I just said, they need to make sure we
Speaker 9: have an off supply.
Speaker 2: And I know, I'm just looking at our PGeo function
Speaker 2: where I can see where your revenue comes by geography,
Speaker 2: you're everywhere. You see certain parts of the world that
Speaker 2: are more in front of you know, kind of making
Speaker 2: the transition then some others.
Speaker 9: Yeah, I think I would say that Europe has started
Speaker 9: this rather early with the new green deal in Europe,
Speaker 9: but also moving into a very different energy systems paid
Speaker 9: some price with the wars in Russia. So energy prices
Speaker 9: have gone up and that some rethinking has taken place.
Speaker 9: I think here in the US you quite clearly see
Speaker 9: the demand is there in all industries now supported by
Speaker 9: the various acts you have here, either the Inflation Act
Speaker 9: or then also the Industrial Act, and that is driving investments.
Speaker 4: Now.
Speaker 9: It's much earlier days than in Europe. For example, Hia
Speaker 9: is a little bit of mixed back, I have to say.
Speaker 9: So you see some countries at the leading edge, like
Speaker 9: smaller countries like Singapore. In China, which is our second
Speaker 9: biggest market after the US, you see actually a lot
Speaker 9: of efforts now being put in place to change the
Speaker 9: electric system in China. A lot of TV cards are
Speaker 9: coming in and you can see that those really are
Speaker 9: now generating the growth in China by city subdued compared
Speaker 9: to the US at this stage. So indeed, we are
Speaker 9: operating across the world in more than one hundred countries.
Speaker 9: We get good insights at the moment. The driving forces
Speaker 9: are really the US and Europe, with let's say Asia
Speaker 9: apart from India, are lacking somewhat.
Speaker 5: So where else do you go to expand from here
Speaker 5: when you already are in so many places.
Speaker 9: It's quite clearly US is our key number one market
Speaker 9: and that's where we have a developing We have over
Speaker 9: the last ten years, we have put more than fourteen
Speaker 9: billion dollars into the US in terms of investments. We
Speaker 9: have got forty manufacturing sites in twenty states. We're operating
Speaker 9: in all states with our services, et cetera. So that's
Speaker 9: a key market. We see the electrification market in the
Speaker 9: US as key, but also the industrial one, which has
Speaker 9: a lot to do with bringing home let's say, manufacturing
Speaker 9: capabilities and capacity. And then the second one is clearly India,
Speaker 9: which at the moment is in terms of growth outstripping
Speaker 9: all other countries in a big way. They are very
Speaker 9: low in manufacturing capacity and that's where a lot of
Speaker 9: investments now for the high end manufacturing goes in. And
Speaker 9: then the third one will be Europe quite clearly as
Speaker 9: the European Change INDI energy system, but also the demographic
Speaker 9: issues which we have in Europe which will take out
Speaker 9: about fifty million kind of working people over the next
Speaker 9: ten years and that needs to be replaced by automation
Speaker 9: and robotics, so there's a lot of Freema spins on
Speaker 9: going there.
Speaker 2: Thanks to Peter Vasser, chairman of ABB.
Speaker 3: Coming up on the program a conversation with Next Era
Speaker 3: Energy CEO John Ketchum and how the demand for power
Speaker 3: is dramatically increasing.
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
Speaker 2: depth research and data on two thousand companies and one
Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via
Speaker 2: b I go on the terminal on Paul Sweeney.
Speaker 3: And am Alex Steel and this is Bloomberg.
Speaker 1: This is Bloomberg Intelligence with Alex Steele and Paul Sweeney
Speaker 1: on Bloomberg Radio.
Speaker 3: We begin with a look at the company Next Era Energy.
Speaker 3: It's ticker is NEE. Next Era Energy is a leading
Speaker 3: clean energy company headquartered in Juno Beach, Florida, and it
Speaker 3: provides clean, affordable, reliable electricity to approximately five point eight
Speaker 3: million customer accounts or more than twelve million people across Florida.
Speaker 2: For more on how the demand for power is dramatically increasing,
Speaker 2: we were joined by Next Era Energy President and CEO
Speaker 2: John Ketchum. We began by asking him more about what
Speaker 2: his company does.
Speaker 10: We're made up of two businesses. One we own the
Speaker 10: nation's largest rate regulated utility, Florida Power and Light, and
Speaker 10: two we are the world's leader in renewables when solar
Speaker 10: battery storage. A unique combination bringing those two companies together.
Speaker 3: But you still have like nuclear and gas too, right
Speaker 3: like it we do for the utility.
Speaker 10: Side, we do so we covered all. We're in every
Speaker 10: part of the energy value chain, not only renewables. We
Speaker 10: have six gigawatts of nuclear and one the best operators
Speaker 10: in the country on the nuclear side. And we also
Speaker 10: own gas fire generation. Seventy two percent of our generation
Speaker 10: fleet in Florida's actually natural gas fired. So we view
Speaker 10: ourselves really as a very credible source in being able
Speaker 10: to advise our customers on what the lowest cost option
Speaker 10: is for generation.
Speaker 2: Owning a utility electric utility in Florida would seem to
Speaker 2: be a tough business with all the weather down there.
Speaker 2: What happens when these storms come through? How do you guys?
Speaker 2: You have to almost be in a constant state of
Speaker 2: emergency almost to be able to react.
Speaker 10: We are battle tested. That's one of the great things
Speaker 10: about our company is that nothing catches us up by
Speaker 10: surprise and it comes from a culture of continuous improvement
Speaker 10: and innovation, and we practice and we drill, and we've
Speaker 10: had what forty nine hurricanes in the last twenty or
Speaker 10: thirty years. We're never caught by surprise. We're a company
Speaker 10: that is used to managing through diversity and that's one of.
Speaker 5: The strengths catch by surprise.
Speaker 3: So there was an investor presentation that you made and
Speaker 3: you did you where you outline your forecast this year
Speaker 3: through twenty twenty six. You're also twenty twenty seven midpoint
Speaker 3: profit forecast. That's the one that analysts said that falls
Speaker 3: short of our estimates. Yeah, and I guess the question
Speaker 3: is if data demand and data power is going to
Speaker 3: drive so much demand for your stuff, why isn't that
Speaker 3: midpoint higher.
Speaker 10: Well, here's what we see, and we talked a lot
Speaker 10: about this at the analyst day. There are three things
Speaker 10: that I think really differentiate next Era as part of
Speaker 10: our value story. One, we're seeing an inflection point and
Speaker 10: power demand. Two it's going to be met by renewables
Speaker 10: because it's low costs, fast to deploy, and it's clean.
Speaker 10: And no companies better positioned to meet it than we are.
Speaker 10: And our business model has always been what I would
Speaker 10: call a replacement cycle. We were building new renewables to
Speaker 10: replace higher cost coal plants, higher costs, less efficient gas
Speaker 10: fired units, oil fired units. We now have this new
Speaker 10: opportunity that's really emerged in the last six to nine months,
Speaker 10: which is what I call our growth cycle opportunity. It's
Speaker 10: a new demand that has come and it's across industries.
Speaker 10: It's not just data centers get a lot of discussion,
Speaker 10: but it's industrial electrification, reshoring, and manufacturing as well. But
Speaker 10: when you think about it, we're having all these discussions
Speaker 10: with these customers now. Take data centers, for example, it
Speaker 10: takes two to three years to build a data center,
Speaker 10: so they won't need the power until twenty twenty seven.
Speaker 10: We might sign a contract today, but the power comes
Speaker 10: in twenty seven, which means it contributes in twenty eight.
Speaker 10: And so we're trying to explain to investors, Look, we
Speaker 10: have a tremendous long term growth outlook, but a lot
Speaker 10: of this growth cycle demand is really going to start
Speaker 10: materializing and producing revenues and earnings in twenty seven, which
Speaker 10: means it really starts to contribute in twenty eight.
Speaker 2: As you walk through me Manhattan. You probably see some
Speaker 2: empty office space here. I think they all move down
Speaker 2: to your state. Talk to us about how that's impacted
Speaker 2: your business in terms of demand and maybe what you
Speaker 2: have to invest back into your grid.
Speaker 10: Yeah, and that's what's great about our business right is
Speaker 10: the Barbell approach. We've got the nation's leading great regularly
Speaker 10: utility in Florida and the world's leader in renewables in Florida.
Speaker 10: We're seeing tremendous growth over the next twenty years. We're
Speaker 10: projecting a forty four percent increase in GDP. We have
Speaker 10: one thousand people a day moving to the state of Florida.
Speaker 10: Four of the five fastest growing metropolitan areas in the
Speaker 10: United States are in Florida. Florida, we're a country, it
Speaker 10: would have the fourteenth largest economy in the world, and
Speaker 10: we're there to power all that growth. So our growth
Speaker 10: story is not only about what I just discussed about
Speaker 10: all this renewable demand that we see power in AI
Speaker 10: and industry and manufacturing across the United States, but it's
Speaker 10: also all the growth that we see right in our
Speaker 10: own backyard in Florida.
Speaker 3: Talk to me about rates. So you're going to need
Speaker 3: to invest a lot, right, Like there's maybe an enormous
Speaker 3: investment cycle, as you mentioned, like the growth cycle for utilities, Right,
Speaker 3: what is it like on the regulated side of going
Speaker 3: back to the government and saying, Okay, guys, I got
Speaker 3: to invest it, you've got to raise the rates.
Speaker 1: Yeah.
Speaker 10: And so what we do is we have done a
Speaker 10: terrific job of taking cost out of our business. So
Speaker 10: when you look at what we've been able to do
Speaker 10: over the last twenty years, our O and M on
Speaker 10: a dollar per megawate hour basis is seventy percent seventy
Speaker 10: percent lower than the national average. That's three billion dollars
Speaker 10: we put in our customer's pocketbook every single year compared
Speaker 10: to an average utility. And we've always been able to
Speaker 10: make really smart capital investment decisions around bringing low cost
Speaker 10: generation into the fold. And the lowest cost generation option
Speaker 10: that we have in Florida is sole in storage. So
Speaker 10: although we're investing more capital, it's actually lowering the bill
Speaker 10: because it's a lot cheaper than other generation alternatives, combined
Speaker 10: with our ability to take cost out with the way
Speaker 10: we operate.
Speaker 2: But for you, from your investor's perspective, is a unit
Speaker 2: of power from a renewable source. What's a profit margin
Speaker 2: on that versus maybe an existing source.
Speaker 10: Well, when you think about renewables, I mean, renewables, you know,
Speaker 10: have really strong returns and they're low cost, and you
Speaker 10: talked about you know, interest rates, you being one of
Speaker 10: the factors. We pass those costs through to our customers.
Speaker 10: And so the cost of wind and solar has gone
Speaker 10: up a little bit as we've seen some pressure you
Speaker 10: know here from the macro environment, So have cost increase
Speaker 10: for every other type of generation. Actually, gas fired generation
Speaker 10: has really gone up in price. And so you know,
Speaker 10: what we have seen with gas fire technology is a
Speaker 10: fifty percent increase in the last twelve months. That has
Speaker 10: not happened to renewables, making renewables even lower costs than
Speaker 10: they've ever been on a relative basis to gas turbine options.
Speaker 3: So what I hear is that everything is just more
Speaker 3: expensive because that's the environment that we're in. But because
Speaker 3: you're able to take costs out, the rate payer may
Speaker 3: not get hit as hard. Is that a fair statement?
Speaker 10: That's exactly right. And so what we've been able to
Speaker 10: do in Florida, our bill is thirty seven percent lower
Speaker 10: than the national average, thirty seven percent. It's because of
Speaker 10: our ability to take all those costs out of the
Speaker 10: company and also offer them low cost renewable solutions as
Speaker 10: part of the generation mix. And when you put those
Speaker 10: two together, that's how we're able to achieve that thirty
Speaker 10: seven percent lower bill than the rest of the nation.
Speaker 10: That's a really compelling customer value proposition and investor value proposition.
Speaker 2: All right, thanks to John Ketchum, President and CEO of
Speaker 2: Next Era Energy.
Speaker 3: Staying with energy, we have something here at Bloomberg called
Speaker 3: Bloomberg New Energy Finance. The idea behind it is to
Speaker 3: provide data on commodities, power, transport, industries, buildings and agriculture
Speaker 3: plus new technology.
Speaker 2: This week we looked at how the energy transition will
Speaker 2: drive a significant uptick in demand for metals.
Speaker 3: Bloomberg and EF estimates six trillion dollars worth of key
Speaker 3: metals will be needed between twenty twenty two and twenty fifty,
Speaker 3: and to reach net zero emissions by mid century that
Speaker 3: number leaps to ten trillion.
Speaker 1: For more.
Speaker 2: We were joined by sung at Choie Bloomberg, BNEF Metals
Speaker 2: and mining analysts. We first to ask some to comment
Speaker 2: about the amount of metal that would be needed in
Speaker 2: the energy transition.
Speaker 7: As we progress through the technologies where we shift from
Speaker 7: fossil fuel to clean energy, and with the innovation and technologies,
Speaker 7: especially in the transportation sector and data sector as well
Speaker 7: and power grids more, obviously more metals will be needed.
Speaker 7: In order to get the electrons flow. You need metals.
Speaker 7: That's pretty obvious right now. The particular categories of metals
Speaker 7: that are of interesting is lithium and copper. Those two
Speaker 7: metals are very interesting at this moment.
Speaker 2: Where do we get these metals and is that a
Speaker 2: concern where we.
Speaker 7: Do get them? Yes, that is a concern. So for me,
Speaker 7: demand is is of a concern, but it isn't too
Speaker 7: much of concern. Supply is more of the concern. The
Speaker 7: reason for that is the reason that I say that
Speaker 7: is because many of the places that have had this
Speaker 7: particular resource, such as copper and lithium in areas where
Speaker 7: it has very sensitive political and social landscape. And in
Speaker 7: order to get those you know, supply out of the ground, right,
Speaker 7: miners have to navigate through those complicated situations. Right For example,
Speaker 7: many people forecast that the copper will be in surplus
Speaker 7: for twenty twenty four, but will be a surplus. It
Speaker 7: will be a slight surplus. For twenty twenty four, there was,
Speaker 7: there was the expectation. But then at the start of
Speaker 7: this year right in Panama, Cobrat Panama was you know
Speaker 7: done for many reasons. Right as a result of that,
Speaker 7: we're experiencing this, you know, run open copper prices right
Speaker 7: because there's a displocation between a copper minds plot and
Speaker 7: the smell the capacity.
Speaker 3: So here is where I think raises the problem because
Speaker 3: you're looking at a structural shift among metals that are cyclical.
Speaker 3: So that's one area where we were surprised to the upside,
Speaker 3: and now we're going to see a deficit. But then
Speaker 3: I look at lithium, and we knew the ev revolution
Speaker 3: and the batteries, we were going to need lithium. So
Speaker 3: all of a sudden the lithium guys, and a lot
Speaker 3: of them are in South America. When Game Busters, they're like,
Speaker 3: we need all this lithium. It's going to be awesome.
Speaker 3: The demand's going to be there, and then the price
Speaker 3: is crashed and then they had to shut down some
Speaker 3: of their operations because it wasn't economic anymore. We do
Speaker 3: need the lithium, but we didn't needed that day.
Speaker 2: How do we manage that with everything?
Speaker 7: You know, timing is everything, but it's really impossible to
Speaker 7: predict any type of timing with any type of investments. Right,
Speaker 7: So copper is in this moment right now. For lithium,
Speaker 7: that was two years ago, right, all this hype around
Speaker 7: you know, electric vehicles use of lithium, difficulties in getting lidium,
Speaker 7: so all the investments poured in into lidium space and
Speaker 7: as a result of that, there's currently there is an
Speaker 7: oversupply issue with lithium.
Speaker 1: Right.
Speaker 7: But despite the oversply issue, the lithium industry is really
Speaker 7: at the cusp of a paradigm shift in technology innovation. Right.
Speaker 7: There's this thing called direct lithium extraction technology where you take.
Speaker 2: The direct lithium extraction, yes.
Speaker 7: Direk lithium distraction technology. So there's two routes where you
Speaker 7: could extract lithium. There's mainly a hard rock with them
Speaker 7: where you take the spodium, you mind it at the
Speaker 7: rock and you process it.
Speaker 5: All.
Speaker 7: The process is brian. You take you take the brian
Speaker 7: and you extract the lithium out of it but water,
Speaker 7: but using evaporating method, so you basically you're using some
Speaker 7: like to evaporate the water out of it and extract
Speaker 7: lithium and that takes two years. Now DL or diark
Speaker 7: lithium extractions. That's gonna bring that lead time down to
Speaker 7: two weeks instead of two years. Oh so main competition
Speaker 7: versus you know, heart rock that is right now, that's
Speaker 7: going to be a you know, game changer for the
Speaker 7: industry where it's gonna actually lower the cost card. It
Speaker 7: may load the cost card. It's a bit too early
Speaker 7: to tell right now, but at the you know, at
Speaker 7: the cost of commercialization of this technology, it may loader
Speaker 7: the cost card and it may you know, change the
Speaker 7: industry forever.
Speaker 3: Our thanks to Sung Choi, Bloomberg and e F Metals
Speaker 3: and Mining Analysts.
Speaker 2: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio,
Speaker 2: providing in depth research and data on two thousand companies
Speaker 2: in one hundred and thirty industries.
Speaker 3: And remember you can access Bloomberg Intelligence through b I Go.
Speaker 3: I'm a terminal, I'm Alex.
Speaker 2: Steel, and I'm Paul Sweeney.
Speaker 10: Stay with us.
Speaker 2: Today's top stories and global business headlines are coming up
Speaker 2: right now.