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<title>A YouTuber let the Cybertruck close on his finger to test the new sensor update. It didn’t go well.</title>
<link>https://americanceo.club/a-youtuber-let-the-cybertruck-close-on-his-finger-to-test-the-new-sensor-update-it-didnt-go-well/</link>
<comments>https://americanceo.club/a-youtuber-let-the-cybertruck-close-on-his-finger-to-test-the-new-sensor-update-it-didnt-go-well/#respond</comments>
<dc:creator><![CDATA[News Room]]></dc:creator>
<pubDate>Sat, 04 May 2024 03:09:53 +0000</pubDate>
<category><![CDATA[Finance]]></category>
<category><![CDATA[close]]></category>
<category><![CDATA[Cybertruck]]></category>
<category><![CDATA[didnt]]></category>
<category><![CDATA[finger]]></category>
<category><![CDATA[sensor]]></category>
<category><![CDATA[test]]></category>
<category><![CDATA[update]]></category>
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<description><![CDATA[A YouTuber tested if Tesla’s Cybertruck update makes the frunk safer by closing it on his finger. The frunk update worked well on produce, but crushed his finger and left it shaking with a dent. A Tesla engineer said the test was done wrong because the frunk increases in pressure every time. Tesla released an [...]
The post <a href="https://americanceo.club/a-youtuber-let-the-cybertruck-close-on-his-finger-to-test-the-new-sensor-update-it-didnt-go-well/">A YouTuber let the Cybertruck close on his finger to test the new sensor update. It didn’t go well.</a> appeared first on <a href="https://americanceo.club">American CEO Club</a>.
]]></description>
<content:encoded><![CDATA[<div>
<ul class="summary-list">
<li>A YouTuber tested if Tesla’s Cybertruck update makes the frunk safer by closing it on his finger.</li>
<li>The frunk update worked well on produce, but crushed his finger and left it shaking with a dent.</li>
<li>A Tesla engineer said the test was done wrong because the frunk increases in pressure every time.</li>
</ul>

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Tesla released an update to make the Tesla Cybertruck frunk safer when it closes.
So YouTuber Jeremy Judkins tested out whether the update actually makes the frunk safer by closing the frunk on a carrot, cucumber, banana — and eventually his finger.
The recent update is supposed to better detect obstructions before the frunk finishes closing and follows a series of viral videos of the frunk slicing through carrots while closing.
The YouTuber started the video by closing the frunk on produce like a carrot, cucumber, and banana before the update was installed. The frunk chopped all of the produce when it was placed in the frunk.

“It is destroying everything,” the YouTuber said.
The YouTuber then tried the same test with the update installed and was impressed with the improvement.
“With just a software update, the Tesla Cybertruck frunk is way safer,” he said. “We witnessed it destroy a ton of vegetables, and then post-update did nothing.”
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But when Judkins tried putting a thin tip of a carrot in the frunk, it did break off. He said that left people wondering if a fingertip would also come off if it got caught in the frunk.

Judkins then closed the frunk on his arm, which he said put a little pressure on it but wasn’t too bad. Next, he tried out his hand, which left a line, but also wasn’t severe.
Finally, Judkins placed his finger in the frunk. The frunk closed on his finger and left it shaking, with a dent, and what looked like a small cut or skin tear.
“It kind of locked down on it and I was a little freaked out because I didn’t know how to open it up,” Judkins said. “I was kind of trapped.”
The YouTuber said the frunk detected resistance for a little bit and opened.

Judkins said that after the finger test, a lead cybertruck engineer at Tesla said he did the video wrong.
The engineer told him the frunk increases in pressure every single time it closes and detects resistance, Judkins said. It’s going to assume you want to close the frunk and maybe something like a bag is getting in the way, which would make it close harder.
“Using this information, that means it closed on my finger harder than my hand and way harder than my arm,” the YouTuber wrote.
Judkins said the algorithm should favor safety instead of a bag getting in the way. But even when Judkins put a bag in the way of closing the frunk, it still closed, which meant it didn’t quite respond to resistance the way it should have.

The YouTuber attempted to try the test again with his finger without trying other objects or his arm first but backed away every time the frunk was about to close.
“You don’t know how bad it hurt the first time,” Judkins said. “I don’t want to do it again.”
Judkins said the update might make your banana safe, but fingers aren’t quite in the clear.
</div>
The post <a href="https://americanceo.club/a-youtuber-let-the-cybertruck-close-on-his-finger-to-test-the-new-sensor-update-it-didnt-go-well/">A YouTuber let the Cybertruck close on his finger to test the new sensor update. It didn’t go well.</a> appeared first on <a href="https://americanceo.club">American CEO Club</a>.
]]></content:encoded>
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<title>Legrand reports resilience amid market slowdown By Investing.com</title>
<link>https://americanceo.club/legrand-reports-resilience-amid-market-slowdown-by-investing-com/</link>
<comments>https://americanceo.club/legrand-reports-resilience-amid-market-slowdown-by-investing-com/#respond</comments>
<dc:creator><![CDATA[News Room]]></dc:creator>
<pubDate>Sat, 04 May 2024 03:05:50 +0000</pubDate>
<category><![CDATA[Stocks]]></category>
<category><![CDATA[Investing.com]]></category>
<category><![CDATA[Legrand]]></category>
<category><![CDATA[market]]></category>
<category><![CDATA[reports]]></category>
<category><![CDATA[resilience]]></category>
<category><![CDATA[slowdown]]></category>
<guid isPermaLink="false">https://americanceo.club/legrand-reports-resilience-amid-market-slowdown-by-investing-com/</guid>
<description><![CDATA[Legrand (LR.PA), the global specialist in electrical and digital building infrastructures, reported a decrease in sales for the first quarter of 2024, aligning with market expectations due to a slowdown in the building sector. Despite the sales dip, the company maintained good margin resilience and confirmed its full-year targets, including an adjusted operating margin before [...]
The post <a href="https://americanceo.club/legrand-reports-resilience-amid-market-slowdown-by-investing-com/">Legrand reports resilience amid market slowdown By Investing.com</a> appeared first on <a href="https://americanceo.club">American CEO Club</a>.
]]></description>
<content:encoded><![CDATA[
<div>
Legrand (LR.PA), the global specialist in electrical and digital building infrastructures, reported a decrease in sales for the first quarter of 2024, aligning with market expectations due to a slowdown in the building sector. Despite the sales dip, the company maintained good margin resilience and confirmed its full-year targets, including an adjusted operating margin before acquisitions of between 20% and 20.8%. Legrand also announced a dividend increase and remains optimistic about its data center business and acquisition strategy.
<h2>Key Takeaways</h2>
<ul>
<li>Legrand’s sales fell by 3.7% excluding exchange rates and Russia, with an organic decline of 5.4%.</li>
<li>The company confirmed its full-year sales growth target of low-single digits and an adjusted operating margin of 20% to 20.8%.</li>
<li>Legrand announced two acquisitions and one minority stake, focusing on data centers, assisted living, and connected solutions.</li>
<li>The company’s de-carbonization efforts were validated by the SBTi, with a commitment to a 90% reduction in GHG emissions by 2050.</li>
<li>A proposed dividend of €2.09 per share for 2023 represents a 10% increase from the previous year.</li>
</ul>
<h2>Company Outlook</h2>
<ul>
<li>Legrand expects a rebound in housing starts and investments in 2024.</li>
<li>The company plans to continue investing in growth through R&D, advertising, and launching new products.</li>
<li>Acquisitions are targeted to be value accretive within five years of full consolidation.</li>
</ul>
<h2>Bearish Highlights</h2>
<ul>
<li>The European residential market remains challenging, with no improvement seen in the non-residential office sector.</li>
<li>The US residential market, which represents 20% of Legrand’s debt, is only starting to bottom out.</li>
<li>China has experienced a decline in the residential market.</li>
</ul>
<h2>Bullish Highlights</h2>
<ul>
<li>Data centers are performing well, with strong growth expected in upcoming quarters.</li>
<li>Legrand’s data center sales are growing, with a high volume of quotes and orders for the white space.</li>
<li>The rest of the world, including India, is performing well.</li>
</ul>
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<h2>Misses</h2>
<ul>
<li>Q1 sales volume decreased, impacting EBIT margin.</li>
<li>The fast expanding segments, including connective and green products, had a weak quarter but are expected to improve.</li>
</ul>
<h2>Q&A Highlights</h2>
<ul>
<li>High inventory levels at distributors are not seen as a major concern for full-year top-line impact.</li>
<li>Legrand is planning to expand its data center portfolio with additional capabilities and products.</li>
<li>The company is managing deliberate pricing strategies, with targeted increases based on market conditions.</li>
<li>Supply chain constraints for data center products are anticipated due to demand but are considered manageable.</li>
</ul>
In summary, Legrand is navigating a challenging market environment with strategic acquisitions and a focus on growth sectors like data centers. The company’s commitment to innovation and sustainability, coupled with prudent financial management, positions it to weather the current slowdown and capitalize on future market improvements.
<h2>InvestingPro Insights</h2>
Legrand’s (LR.PA) recent financial performance and market activity provide a nuanced picture for investors. With a market capitalization of $26.83 billion USD and a P/E ratio that stands at 22.1, the company is seen as a substantial player in its industry, albeit trading at a premium relative to near-term earnings growth. The adjusted P/E ratio for the last twelve months as of Q4 2023 is slightly lower at 21.5, reflecting a more favorable valuation.
An InvestingPro Tip that stands out for Legrand is the company’s impressive gross profit margins, which reached 52.26% in the last twelve months as of Q4 2023. This indicates a strong ability to control costs relative to its sales, which is especially commendable given the broader industry challenges. Additionally, Legrand’s commitment to shareholder returns is underscored by its history of maintaining dividend payments for 19 consecutive years, with the dividend increasing for the past 4 years. This demonstrates a reliable track record of returning value to shareholders, even in fluctuating market conditions.
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While there are concerns, with two analysts having revised their earnings downwards for the upcoming period, Legrand’s operational strengths are evident in its gross profit of $4856.37 million USD and an operating income margin of 19.5% for the last twelve months as of Q4 2023. The company’s moderate level of debt and the fact that its liquid assets exceed short-term obligations suggest a solid financial footing that could support its strategic initiatives and dividend policy.
Investors interested in gaining further insights into Legrand’s financial health and stock performance can explore more InvestingPro Tips, with additional tips available at Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to these valuable investment insights.
<h2>Full transcript – Legrand Sa (LGRVF) Q1 2024:</h2>
Operator: Good morning, ladies and gentlemen, and welcome to today’s Legrand’s 2024 First Quarter Results Conference Call. For your information, this conference is being recorded. All participants are in a listen-only mode. Later there will be a question-and-answer session. At this time, I would like to hand the call over to CEO, Mr. Benoît Coquart and CFO, Mr. Franck Lemery. Please go ahead, sir.
Benoît Coquart: Thank you very much. Good morning everybody. Franck Lemery and myself are happy to welcome you to the Legrand 2024 Q1 conference call and webcast. As you know, we have published today our press release, financial statements and a slideshow to which we will refer. Those documents are available on the Legrand website. After a few opening remarks, we will comment the results into more details. I begin on page four of the deck with the three key highlights of this press release. First, in a building market in retreat, as expected, Legrand reports lower sales and good margin resilience. Those results are in line with our expectations. Second, we are actively executing our strategic road map. Third, we confirm our full year targets. As a reminder, we will host a Capital Market Day in September 2024 in London. So, moving to pages six and seven, I will start with an overview of sales. In the first quarter of 2024, excluding exchange rates and Russia, our sales decreased by minus 3.7% with an organic trend of minus 5.4% and a positive scope from acquisitions of plus 1.8%. Considering that the building market, which represents 80% of our sales, is experiencing, as expected, the market slowdown across most geographies, this limited decline in revenue highlights the strength of our business model, the solidity of our market positions and the execution capabilities of our teams. Regarding the two other elements on sales, the negative scope effect from Russia was minus 1.1% on the quarter and will be minus 0.6% on the full year 2024. The exchange rate effect was negative minus 1% on the quarter and based on average rates of April, it will be close to 0% for the full year. On page seven you will find the key takeaways per geographies on a like for like basis. The quarter was overall impacted by, first, difficult building markets as expected, including in Europe, US and China, and, second, by some technical shifts including less number of days, significant basis for comparison and to a lesser extent slight destocking. We expect a sequential improvement of the like-for-like sales evolution, with Q2 being better than Q1 and H2 better than H1. In total, the like-for-like decline in sales was minus 4.7% in Europe, minus 6% in North America and minus 5.8% in the rest of the world. These were the main comments I wanted to make on sales. I will now hand over to Franck for more color on our financial performance.
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Franck Lemery: Thank you, Benoît, and good morning to all of you. I will start on page eight commenting the adjusted operating margin. Before acquisitions, we recorded a solid adjusted operating margin of 20.6%. This level of profitability of the group once again demonstrates Legrand’s ability to protect its margin in the context of declining sales, thanks to its intact pricing power and a solid cost control. The impact of acquisition was of minus 0.1 points, meaning that the Q1 2024 adjusted operating margin stood at 20.5%. Going now to page nine and ten. First, the net profit stood at €266 million, representing 13.6% of our sales and, second, the free cash flow came to €146 million at 7.2% of sales for the quarter. It’s in line with group historical seasonality. On page eleven, two figures to illustrate the robustness of our balance sheet. We have a net debt-to-EBITDA ratio of 1.2 at the end of the quarter and a high cash position. Our cash generation and our balance sheet are clear enablers of the M&A development that Benoît will comment soon. This concludes the key financial topics I wanted to share with you this morning. I’m now handing over back to Benoît.
Benoît Coquart: Thank you, Franck. We can now move to page 13. We confirm the full year targets announced in February with low-single-digit growth for sales, meaning organically into acquisitions and adjusted operating margin before acquisitions of between 20% and 20.8% of sales, at least 100% CSR achievement rate for the third and last year of our 2022-2024 roadmap. Let me now move to pages 15 and 16 detailing our ongoing acquisition strategy. We just announced two acquisitions and one minority stake. This means €80 million acquired sales already announced in 2024 with MSS, Innovation and Netrack deals. First, the acquisition of Innovation, the Dutch leader in healthcare software in the market for connected health and assisted living, with annual sales of more than €60 million. Second, Netrack, an Indian specialist in rack, notably for data centers, with around €10 million of annual sales. Last, we took a minority stake in UIOT, one of the Chinese leading players in wireless IoT smart home solutions. These acquisitions in the promising areas of data centers, assisted living and connected solutions further strengthen Legrand group’s leadership in its faster expanding segments, and we will keep up the strong pace of external growth in coming quarters. On page 18, a quick CSR update. We have reached an important milestone this year in our de-carbonization strategy with SBTi validating Legrand 2050 Net Zero commitment that is more ambitious than our previous 1.5 degree trajectory validated in 2021. This new commitment involves reducing the group’s GHG emissions by minus 90% across our entire value chain by 2050, with more demanding 2030 intermediary targets. Now a few words on the key agenda topics for incoming general meeting of shareholders which will take place on May 29; on page 20, with the proposed nomination of Ms. Menon as Independent Director. Her vast experience, including at Accenture (NYSE:) in India, would bring a key expertise to the Board in digital corporate strategy and CSR. Together with the proposed renewal of Jean-Marc Chéry, the CEO of STMicroelectronics, the Board composition would continue to be among the industry’s best practices with 75% of independent members, 42% of women and seven nationalities represented. Now on page 21, as announced previously, the proposed dividend for 2023 is of €2.09 per share, up plus 10% versus last year. To conclude on page 23, we are very happy to share the success of our first international employee share purchase plan proposed to more than 63% of employees, which testifies to the full confidence of Legrand teams in the group development model. Before we move to questions, I would like to remind you of our Capital Market Day scheduled on September 24, 2024 in London. The save the date and registration link will be available on our website today. Those were the key topics of this release. I suggest we now move to Q&A. Thank you.
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Operator: Thank you. [Operator Instructions] We will now take the first question coming from the line of Daniela Costa from Goldman Sachs. Please go ahead.
Daniela Costa: Hi, good morning. Thank you very much. I have two questions. The first one I wanted to ask is related to the free cash flow into the working capital buildup on the cash flow. If you could give us further details on what drove that and how do you expect that to recover or not recover throughout the year? And then I’ll ask my second question after this to make it easier.
Benoît Coquart: Okay. Hello, Daniela. I will let Franck answer the question. Go ahead, Franck.
Franck Lemery: Thank you, Benoît. Good morning, Daniela. Well, as I said in my previous comment, the cash flow is very usual for Q1, for quarter one. If you take, let’s say, for example, the last eight year average is 7.4%, the last two years average, it’s 8.9%. So we are totally aligned with a typical quarter. So on your working — the question on your working capital requirement, once again, it’s very close to last year number. It’s actually slightly below to last year numbers 11.7%. It was above 12% last year. And last year, you remember that we recorded a very high free cash flow, so no concern about the Q1 gate. There has been some inventory buildup during Q1, but it is typical to prepare for the seasonality. So in a nutshell, we are pretty confident to deliver usual a nice free cash flow of Legrand, let’s say, between 13%, 14%, 15% of sales. No doubt about that. It’s the Q1 seasonality.
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Daniela Costa: Okay, thank you. And my second question is just more regarding the organic trends. And if you could — I don’t know if I missed in your speech, but if you could maybe disaggregate pricing and volume and then within the volume environment, help us with the big things like how much growing — how much is data center growing, how much is office is declining, sort of like what the makeup. Thank you.
Franck Lemery: Sure. Okay, so first we had a pricing in Q1 of plus 0.5%, which is of course in line with our plan and actually in line with what we told you three months back because we told you that given the environment of the raw mats and components, we expect it to do a plus 1% maximum, so we are plus 0.5%. And to give you some context, our purchase price are slightly down. So the purchase price of raw mats and components is down minus 1.3%. When it comes to the market, so first comment, as I said during my speech, we have some technical shifts impacting Q1. I’ll not comment them again, but I can if you want. When it comes to the end market themselves, we haven’t seen any big shift versus H2 2023. Starting with Europe, we still face a difficult residential market in Europe, which is not a surprise given the fact that the bad statistics of 2023 are hitting us now. If you look, for example, at the residential permits, which were down 20% last year, it started to impact our top line in H2 and still impacting our top line in Q1. So, still difficult residential market and quite a flattish non-residential market in Europe and data centers are doing very well. As far as North America is concerned, as expected, residential is bottoming out. Unfortunately, it’s only 20% of the debt, if I may say, but this is clearly demonstrated in the statistics where the professional organization is expecting some rebound in 2024 in housing starts, in investments, in new single family, in residential improvements and so on and so forth, so the residential bottoming out and progressively hitting our P&L. No improvement on non-residential so far, especially on the office market. As far as data centers is concerned, the white space has been for a couple of months a bit soft because a number of major guys have been redesigning their data centers to accommodate AI, have started to order quite a lot in the gray space and are starting now actually to order for the white space. So bits of Q1 in the US on the white space, but we expect now very strong growth in the coming quarters. That’s what we can say. So overall, let’s say a building market which remains a bit difficult, especially in residential, in the office market in the US, data centers that should grow very significantly in the quarters to come. The last word maybe of the rest of the world, China is clearly down. But again, when you look at the residential statistics in China, especially residential new, the market is down, let’s say, between 20% and 30%. There is a pause in Africa, but which is not a concern and it’s a temporary pause and business will come again to growth in the coming quarters and the rest of the world is okay, including India. I don’t know if it answers your question, Daniela.
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Daniela Costa: It does. Thank you very much.
Franck Lemery: Thank you.
Operator: Thank you. We will now take the next question from the line of Gael de-Bray from Deutsche Bank. Please go ahead.
Gael de-Bray: Well, thanks very much. Good morning everyone. I have two questions, please, so maybe one at a time. So firstly, on the margin side, I mean, ten years ago, so Legrand probably had one of the highest margins in the industry, if not the highest. And now some of your peers, including ABB (ST:) Electrification, Etun [Phonetic] and a few others, have caught up and they report margins of between 20% and 25%. And we’ve seen improvements of up to 700 BPs for them over a few years. So is the Legrand margin pattern versus your peers purely a question of mix, you think, or is there anything else? And can you perhaps come back on the reasons why you consider a 20% margin objective and normal is appropriate for the group?
Benoît Coquart: Well, thanks Gael. I’m a bit uncomfortable commenting the other margin, especially if you take some subdivision margins, of course it’s a bit difficult to compare. Well, since you are pointing the margin on ABB, of course there is a seven point improvement, but the starting base was 8%, right if I remember properly. So moving from 8 to 15 and we are more than 20. So can hardly comment my competitors margin, I can comment my own margin, telling you that 20% EBIT margin, which is what we’ve been able to deliver consistently for quite some time, incorporating each year 20, 30 40, 50 BPs dilution coming from acquisition, implies if we had stop acquisitions, a 22% or 23% EBIT margin, not a 20% EBIT margin. So, the reason why Legrand is at 20 plus and not moving to 22 is because to the contrary of many of the listed peers which you have in your database and which are selling assets, we are buying assets. Every year we intend to deliver 3% to 4% or more if we can payment impact acquiring companies that do have a margin level which is most of the time below group’s average, and as a result, which dilute overall margin. So it has been the story of Legrand. Organically, if I may say, we have a margin which is improving 30, 40, 50, 60 BPs a year, and this improvement is consumed, if I may say, to finance the dilution coming from acquisitions. Last comment, which I would like to make, maybe to come back to the quarter comment, delivering a 20.5% EBIT margin, which, as you know, is all in, including additional restructuring expenses, including many things in a quarter where our top line is going down organically by more than minus 5%, I think, it’s quite an achievement and tends to be higher than what we were able to deliver a couple of years back. A couple of years back, with this level of evolution, we would have had 19% EBIT margin, now we have a 20.5% EBIT margin. So in a nutshell, I would not commend the margin of my competitor. Without acquisition or organic, the gross in margin is 30, 40, 50 BPs a year, which I believe is substantial. And last, we have a pretty healthier level of margin in Q1, given the drop in sales we have.
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Gael de-Bray: Okay, thank you. And maybe the second question on your M&A strategy. I think that with innovation, that’s probably the first time ever you make a software transaction. And I was curious to perhaps understand the sort of multiple that you’re ready to pay now on these sort of companies.
Benoît Coquart: Yeah. So actually it’s not the first time we do, but the first one was too small to be on your radar, Gael. So let me maybe tell you the story. So we have a business which we call Legrand Care, which is a bit too small for you to consider. It was last year, €100 billion of sales, and it is made of products that help old and disabled people to stay safely at home instead of going to a care place. So, typically, for example, personal alarm system, so that is if a person falls, it sends a signal to a monitoring center that sends somebody to take care of the person, so €100 million. And this business was built more than ten years back by a series of four small acquisitions; two in the UK, one in Spain, one in France, and it has been growing very nicely. As part of these €100 million, we already have 30% of our sales made with software with annual recurring revenue. And this 30% is actually coming mainly from a small acquisition, Gentec, we did in the UK 15 years back. And the software, which we sell, is the software used by the monitoring center to manage the pack of connected devices, as well as the course, incoming course from the person and so on and so forth. Innovation is doing exactly that on other geographies. This business for Legrand, the software piece, was concentrated in the UK. Innovation is doing that in a number of geographies in Europe, the Netherlands, Belgium and a few others. And on top of that, has developed a catalog of additional complementary software to manage the connection between the patient and the care system, as well as a portal to manage the patient engagement, if I may say. So, it’s very complementary to what we are doing with Legrand Care. It’s not something new in terms of — it’s an adjacent field, but it’s not diversification. Of course, Legrand Care, once Innovation we have been docked, will be €160 million business. We intend to make it a €200 million, €250 million, €300 million business. We don’t think, given the size of the market, which remains small, that it will ever be a €1 billion or €2 billion market. But it’s a nice piece of our market, which is experiencing nice growth. As far as the price is concerned, well, as a multiple of sales, it tends to be higher than the usual two times sale that we are paying, because the profitability of this company is substantially higher than gross profitability. It’s a software type of profitability. Now, when it comes to the price, we are sticking to our usual rule, i.e., this deal, as the other ones, is EVA accretive within five years of full consolidation, i.e., within five years of full consolidation, we have a return on capital employed, which is higher than the work. So, nothing specific, if I may say. We want this deal to be value accretive as for the other transactions. Now, as a matter of fact, given its level of profitability, indeed, as a multiple of sales, it’s higher than the usual two times.
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Gael de-Bray: So, I mean, in terms of the total amount you might have paid on this deal specifically, I mean, is it more than 300 million, something like this.
Benoît Coquart: We are not communicating on individual pricing, nor are we commenting on what is coming out in the press. So no comment on the price you will have anyway the cumulative price paid for Q2 acquisitions in the financial statement we will release end of July. But as you know, we are never commenting the individual price of transactions.
Gael de-Bray: Okay, thanks very much.
Operator: Thank you. We will now take the next question from the line of Max Yates from Morgan Stanley. Please go ahead.
Max Yates: Thank you. Good morning. I just wanted to ask on your comments on inventory destocking, could you just elaborate a little bit whether you were seeing that in any particular region? Is that a kind of new trend? Has it accelerated? And just in terms of giving us a feel of kind of where you think inventory levels are across your distributors and whether we should anticipate that continuing sort of into the second and third quarters? Thank you,
Benoît Coquart: Hello Max. Well, we mention it because it is part of those technical factors impacting a bit Q1. But frankly speaking, it’s not a big impact, it is limited to a few geographies, a bit in France and a bit elsewhere, but it’s not a major trend. We’re not seeing that across the board and we don’t believe that it is a start of a trend. Based on my discussions with distributors, even though I haven’t met the thousands of distributors we have, I don’t feel that they have entered into a systematic destocking approach or the more as some of them start to believe that the market will at some point rebound and then better prepare for that. So, one of very small impact, not the beginning of a trend, and I don’t have the feeling that our inventory is high at our distributors level. I have the feeling that it’s a pretty standard inventory. Now, of course, their inventory strategy in the quarters to come will depend on their expectation as far as the building market is concerned, but it’s not a big concern for us. And of course, we don’t believe that it should have a strong negative impact on our top line for the full year.
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Max Yates: Okay. And just maybe a quick sort of follow up and I guess thinking more sort of strategically about your data center business, my kind of interpretation of it is you’ve been a bit more targeted in the kind of products and areas that you want to focus on, sort of some of the areas like, like busways. Could you just talk about kind of whether in terms of your data center portfolio, you see any kind of major white spots or any kind of areas where you think you could sort of build up the business or are you kind of fundamentally happy kind of focusing on the kind of two or three areas where you really have strong positions. Thank you.
Benoît Coquart: For the data center, you mean?
Max Yates: Yes, exactly.
Benoît Coquart: No, clearly the acquisition we have made, PDUs, busways, racks are just the start of the story. Every, let’s say, two or three years we are adding some capabilities in data centers, the last one being ZPE that we acquired in January in the US. And we don’t intend — right before that PE, a year-and-a-half ago we acquired a very small — very nice company in rear door cooling, liquid cooling called USystems. So we have a lot of ambitions to add additional capabilities, additional products to a portfolio being either white space or gray space. So I can confirm that we have a number of discussions going on and I hope that some of the discussions will come to a positive conclusion in the quarters to come. The 15% of sales in data center we did last year should continue to grow. We will add new product categories complementary to those we have. We will target both white space and gray space. And last, even though Q1 has been a bit soft in the US once again because investments started with a grey space, I confirmed that we are getting very high number of quotes, very high number of, of orders for the white space and we expect a very nice growth starting in April in this business.
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Max Yates: Well, I mean, just — sorry, just to push on. I mean, would you think about expanding into liquid cooling or would you — is there more UPS you’re looking at? Just any color would be helpful.
Benoît Coquart: Well, we are already liquid cooling because liquid cooling includes a number of different technologies. The rear door cooling I was mentioning is a type of liquid cooling because it’s channeling cool liquid in the door of the rack.
Max Yates: I was thinking more direct to chip.
Benoît Coquart: We are not in the immersion cooling or direct to chip cooling. If there is an opportunity, why not, we’ll see. But we don’t believe it is a must to be in direct to chip or immersion cooling because it will remain within a few years still a niche market for many reasons, I would be happy to elaborate. And we believe that still 90% of the market will be made of other type of cooling such as rear door cooling. And actually USystems has been experiencing very nice growth. But again, we are looking at many interesting opportunities and if we believe there is a technology or market segment which is set to grow within data center space, we will clearly invest in it.
Max Yates: That’s really helpful. Thank you very much.
Operator: Thank you. We will now take the next question from the line of Phil Buller from Bremberg. Please go ahead.
Phil Buller: Thank you. I’ve got a couple of questions please. Just firstly on the — I guess the tone of messaging sounds quite upbeat and positive. I understand it was in line with your expectations in terms of the Q1 results, but I think it was a little bit noise versus market expectations. So I understand the mechanical factors are kind of tough comps, but can you talk about what you’ve seen specifically in the quarter? Perhaps you can talk about March versus February or April versus March. As I understand there’s lots of mechanical factors, but what have you actually seen on the ground in terms of green shoots [Indiscernible] in the coming couple of quarters, please? That’s question one. Thanks.
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Benoît Coquart: Yeah, hello, Phil. Well, I’ll not comment March against Feb or Feb against Jan, because it doesn’t say anything about the trend. This being said, two comments, as far as the technical factors are concerned, well, I can give you a bit more granularity, we have approximately one day less in the quarter, which is not a lot, but of course which is playing. And number two, as far as number two, is a slight destocking, and number three, basic comparison. I remind you that Q1 2023 was up 7.4% for a full year, which was up only plus 2.7%. So if you put the three factors together, clearly it is hitting and impacting Q1. As far as the remaining nine months are concerned, the number of days won’t play anymore actually, should play the other way. The basis for comparison will become easier than it was in Q1. And as far as destocking is concerned, as I said, we don’t expect what happened in Q1 to be the start of a trend. So the technical factors should either be neutral or play the other way for the remaining nine months. Second comment, which I can make, is that, as I said during my introductory speech, we are expecting a sequential improvement Q2 being better than Q1 and H2 being better than H1, and the months of April is clearly in this exact trend.
Phil Buller: Okay, thank you.
Benoît Coquart: Again, it’s only one month.
Phil Buller: I understand. Just one point of clarification as well. You mentioned white space being a bit soft. Can you just help frame what that looks like? Is it flat? Is it down? Is it up mid teens?
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Benoît Coquart: Yeah, sure. Well, it’s a bit soft, but again, it’s not a surprise because when you build or when you refurbish a data center, you start with a grey space, you start with a power input, if I may say, switchgear transformer, UPS, power busbar. And then once it is done, of course, you are sketching your white space. Data center, it is up in Europe, but it’s a small number. And in Europe it’s strongly up in grey space, down in white space. And in the US, it’s slightly down, but with very fast and strong order buildup, which again, give us a lot of comfort. And you know that at PLO grand we are always very cautious when forecasting. But I can tell you that in data center it gives you a lot of comfort on the growth we will experience in the months to come.
Phil Buller: Thank you. And just finally, the comments about your — I guess not wanting to comment on the competitors, I totally understand that. Some of your competitions have evolved their businesses beyond recognition. ABB actually did a 22% margin in Q1 and grew 6% organically. So I understand that there are different strategies and approaches to M&A and divestitures or whatever, but how are you thinking about benchmarking yourselves versus the competition which has evolved? And are you focusing on your portfolio in any way with a view to divest assets? I know you acquire assets, attractive multiples, and make them better, but is there anything in your portfolio that you’re actually mind to review because of its lower margin or lower growth profile? Thanks.
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Benoît Coquart: Well, again, it’s difficult question to compare performance with a competitor. All the more you’re comparing again with ABB. ABB, as far as I know, it’s 20% of their business is in the building industry. 80% of our business is a building industry. So you are comparing apple to banana. I prefer to focus on Legrand. As far as Legrand is concerned, you have the main elements of our strategy. We intend to keep going even though the future is a bit soft. We’ve never been a conglomerate. We are a pure play, super focused. So there’s no significant asset which would be so underperforming either in top line or in bottom line that it would be a good idea to sell. We have, of course, traditional businesses which are going down more than others, but which are part of the portfolio and not easy to invest. But again, we are operating on a market on 80% of our sales are on the market, which for a couple of quarters have been a bit depressed. Is it a concern to Legrand? No, it’s not. Do we believe that some of those markets are bottoming out? Yes. Do we think that in the quarters to come, we should have a pretty good news and good statistics coming from the building industry that will help? Yes. And is our mission to go back to growth organically? The answer is yes. This being said, indeed, Q1 is a bit weak as expected, again, because the market is not very supportive. As far as the margin comparison with the peers, I already answered this question. Don’t ask me to improve the margin by seven points, starting with a 21% EBIT margin. The improvement of one of my peers’ margin came from the fact that they started from a very low base and of course, the management should be uploaded for that. But don’t compare an 8% EBIT company with a 21% EBIT company, it’s not exactly the same strategy that you have to follow.
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Phil Buller: Understood. Thanks very much.
Operator: Thank you. We will now take the next question from the line of Delphine Brault from ODDO BHF. Please go ahead.
Delphine Brault: Yes, hello. Good morning, everyone. So I have two questions. I will ask them one at a time. Coming back on the pricing of 0.5%, how much is coming from price increase done in 2023? So how much of carryover do you have in Q1? Because I’m a little bit surprised by this. 0.5, so did you agree on price decrease in some segments in Q1?
Benoît Coquart: Well, hello, Delphine. Well, I’m a bit surprised that you are surprised, if I may say, for two reasons, because, number one, it is exactly in line with what we said in Feb, max 1%, and number two, because this is very typical of Legrand in a context where the price of raw mats and components are going down. If you look at the past couple of years, when the price of raw mats and components going down, we are able to do 0.5%, 1%, 1.5% price increase, not 3% or 4%. And it is actually deliberate strategy from Legrand in a context where the price of raw mats and components is going down. We are very careful in keeping our competitivity and, as a result, we don’t want to do too much price increase. Now, are there targeted price increase here and there? As usual, not more than usual. When we have our price going up 0.5%, 1%, 1.5%, 2%, it is usually made of an average price increase on 80%, which is slightly higher, and then targeted price decrease; when you have some metal the price going down 20% on the product, which has a high content in metal, for example. There’s no reason that you don’t give that part of that to the market. But again, the total of all that is that our price is up 0.5%, which is completely in line both with our past practices and with our guidance. Now, when it comes to the remaining nine months, of course, we will continue to monitor very closely the price of raw mats and component. If the price remain negative, there’s no reason why we should do more pricing and we’ll stick to the 0.5% or 1% maximum. Let’s say, if for whatever reason, the price of raw mats and components was to go up again, which by the way, wouldn’t be a bad news for the state of the underlying economy, then we would keep our ability to do more pricing and we could very much end up with a higher price effect than plus one. So again, as you know, it is something which we carefully monitor and which we adjust on a quarter-by-quarter, if not on a month-by-month basis, taking into account the price of raw mats and components, the price of other input like wages and so on, as well as our competitive position. It’s a KPI which is carefully monitored, which is still — it is not the result of any pressure on price. We are not seeing any specific pressure on price, but we have decided to be very, very careful in doing price increase, distributing price increase, again, because we are in a context where the price of raw mats and components is going down.
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Delphine Brault: Okay, thank you. That’s very clear. Thank you. Second question is, can you help us with your full year guidance and provide a bit more color on the assumptions behind the top line guidance. What are your assumptions on the market trends in Europe and in the US? Do you rely on any recovery in specific regions or is it purely basis of comparison that will ease going forward?
Benoît Coquart: Well, our guidance, which is you have interplay, so you have to split between organic and inorganic. As far as organic is concerned, as you know, we are shooting for something between slightly down to slightly up. And when we designed this guidance, we knew that Q1 would be of course quite soft as far as assumptions are concerned. Number one, we won’t have any more most of those technical factors negative impact in Q1, as I said, with number of days reversing and with the basis for comparison helping us. Number two, we expect strong growth in data center, which, as a reminder, was last year 15% of our sales. So it’s something which is somehow substantial. Number three, we don’t expect a very significant recovery on our building market. Again, some of those segments should improve. Take for example the residential in the US, but it’s only 20% of our US sales, i.e., 8% for our group sales. But we don’t expect a major rebound in the market. We expect some statistics to improve along in 2024. Some of those good news punctually hitting our P&L end of the year, some other in 2025, but not a major rebound. This is for, let’s say, the underlying market. As far as pricing is concerned, I’ve already confirmed maximum 5% in a context where raw mats and components are helping us, but maximum 1% but potentially more if we needed to. This is for organic growth. As far as inorganic growth is concerned, as you know, we have a carryover impact of 1.5% coming from the acquisitions made last year. And we have as a clear target to acquire, not to consolidate, but to acquire companies representing 3% to 4% offer sales, i.e., you can make the math yourself, €250 million or €350 million, let’s say, that we will then consolidate depending on the date we buy them. We have already acquired close to 2% of our sales, ZPE, MSS, Netrack and Innovation. And we have a lot of discussions going on, including some of them quite advanced discussion. So I can clearly confirm that more acquisitions will be announced in the quarters to come. This is for the full year. And last element, the FX , as written in the press release, based on the application rate, it should be zero, but again, it should be more, it should be less, depending on how FX will evolve in the months to come.
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Delphine Brault: Thank you.
Operator: Thank you. We will now take the next question from the line of Alasdair Leslie from Bernstein. Please go ahead.
Alasdair Leslie: Thank you and good morning. So, yeah, just firstly on data centers, we’re getting quite a lot of questions on capacity additions and ability for suppliers to meet demand. I just wonder whether you saw any constraints at all on your side, whether you’ve got a lot of headroom in case kind of demand significantly upside surprises. You’re obviously pointing to strengthening demand in the next couple of quarters and maybe just remind us of any investments you’re making or might need to make to kind of support growth. And then I’ve got a follow up question.
Benoît Coquart: Thank you. Yes, of course we are doing. We expect to see some bottleneck or some constraint or challenges as far as supply chain is concerned, because some of those — on some of those products, the demand can be — and the orders we are getting and quotes we are making can be very significant. Some of those bottlenecks may not depend on us, but for example, when you are supplying a busbar system with a tap of box, within a tap of box, you may have some electrical components coming from a third party, not from Legrand. And sometimes the bottleneck is coming from the availability of some of those components. Now, this being said, we believe it is manageable. We have planned for this surge in demand for quite some time. So we have added the capacity whenever needed and we believe that it won’t be a significant issue. Worth mentioning, these additional capacity won’t change the group metrics, so we still expect to have a level of CapEx to sales, let’s say, between 3% to 3.5% of sales. It will not move up to 4% or 4.5% because we would need additional capacity. Capacity buildup has always been part of our plan, along with additional CapEx coming from new products, CapEx for productivity, CapEx for Industry 4.0 and so on. So yes, some challenge in the supply chain, which number two, which we believe are manageable and the plans are drafted for that. And number three, no changes in the group’s key KPI’s.
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Alasdair Leslie: Great, thank you. Maybe just to follow up there, one of your US peers, and I think this is sort of commented on by a few others as well, they’re saying high density AI workloads would be deployed in data centers first in North America, then the kind of the rest of the world would follow with maybe a nine month lag. I was just wondering whether you agree with that sort of timing. Is that what you’re seeing in your own businesses, obviously in Europe or perhaps you kind of see a stronger pickup in Europe already?
Benoît Coquart: Well, we are much bigger in the US than in Europe and the rest of the world in data center, so I can comment very much on the trend in the US. I’m not sure that the evolution of our sales and the rest of the world and Europe is typical of a trend. Now. It would make sense that it happens this way. There are two trends that are impacting. As I already said, number one, grey space before white space, but again, it’s common sense to say that when you are building a data center, you first start with powering it before starting to manage the server. And number two, it wouldn’t be completely a surprise if indeed the rest of the world was following, because a lot of those investments are coming from the big guys, the Amazon (NASDAQ:) Web Services, the Microsoft (NASDAQ:), the Google (NASDAQ:), the Oracle (NYSE:) and so on and so forth. And of course, those are American companies, and it would make a lot of sense for them to start working on the next gen of data centers, first in the US and elsewhere. But to tell you what we are seeing at Legrand, we have, as I said, a very high level of orders, but not only in the US. We also have a lot of demand coming from Europe, coming from Asia. It’s not limited to the US, but again, we are much bigger in the US than elsewhere, so I’m not sure that the orders we are getting in Europe, in Asia, for example, are indicative of any trend.
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Alasdair Leslie: Very helpful. Thank you. Thank you, Benoît.
Operator: Thank you. We will now take the next question from the line of Andre Kukhnin from UBS. Please go ahead.
Andre Kukhnin: Good morning. Thank you very much for taking my question. Apologies. I had a technical difficulty, so I just wanted to follow up on data centers invariably. Was your business up, down or flat in Q1 in data centers, globally?
Benoît Coquart: Well, it was up in Europe, slightly down in the US, so globally, slightly down, because, you know that we are more exposed to US than elsewhere, but again, absolutely not a concern and very strong confidence. You know how strong those words are coming from Legrand. Very strong confidence on the growth we will experience starting in April and in the months to come.
Andre Kukhnin: Great. Thank you. And you said strong growth for the full year, which I guess strong is above 10% and probably more like in 15%, right, what we’ve seen from the [Indiscernible].
Benoît Coquart: Don’t ask me to be that precise. I would love to be that precise. Strong means strong and yes, again, the next nine months should be strong, but again, I cannot be more specific on that.
Andre Kukhnin: Thank you. I appreciate that. I just wanted also to dig into the profit bridge a little bit. We kind of see, I think, over 50% drop through there from organic growth to EBIT. And you said that net price is a positive with a positive gross price and the raw materials actually down. So I just wanted to understand what else is in the bridge there that drove this maybe a little bit higher than I would have expected a drop through — certainly drop through implied on volumes. Thank you.
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Benoît Coquart: Yeah. Okay. I’ll make broad comments and then Franck could comment in more detail. So indeed, our EBIT margin at 20.5% is down 170 BPs compared to last year, i.e, 160 BPs excluding acquisitions, but it’s down compared to last year, which was a superb quarter, but it’s a very good quarter above most of what we’ve been able to deliver over the past couple of years. It’s a very good quarter. If you take, for example, the average of 2019 — 2015 to 2019 margin, it was 19.5%. So it’s a very good level of margin. Basically, you have a gross margin, which indeed is supported by a favorable inflation balance between the selling price and cost of raw mats and components and, at the same time, you have plus 3% like-for-like growth in expenses, production and SG&A. So this is — it explained most of the reason, most of the impact, or most of the decrease in the margin. We have organic sales, which are down 5.4%, and production energy expenses, which are up 3%. It’s coming mainly from the fact that on a given quarter you cannot adjust your expense as much as the drop in sales and, number two, we have also kept increasing a number of discretionary expenses and some of those disclaimer expenses are growing high single digits. So gross sort of positive coming from the difference between selling price and price of raw mats and components, which is more than compensated by the fact that production and energy and expenses are increasing 3% where sales are down. Last topic, we have restructuring expenses which amounted to €11 million in Q1. And as you know, at Legrand, restructuring expenses are part of the operating margin, not below. It is to be compared to a typical year for Legrand restructuring expenses are at about €25 million to €30 million. So with €11 million, it’s quite healthy, if I may say Q1, as far as restructuring is concerned and again, it’s weighting on our margin. But what I would like you to understand is again, 20.5% margin while your sales are going down by almost 6% in volume, is quite of an achievement.
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Andre Kukhnin: Yes, I completely agree. I just wanted to get exactly that color on what’s inside there. And if I just may, on the discretionary expenses increase. Is this aligned with what you talked about before in terms of investing in feet on the street and marketing activities to stimulate growth?
Benoît Coquart: Well, yes, we keep looking at interesting opportunities and investing into growth whenever we can. But as I said several times, you can do whatever you want in a context where the building markets are difficult. You don’t expect that to lead from minus five to plus two. It is number of targeted expenses both in R&D, in advertising in order to fuel our growth. It is more — seeing that we are expensing to make the most of the market when there will rebound. You don’t manage a quarter solely to improve the KPIs of the given quarter. But we are confident in the fact that there will be some rebound in the building market because by a sense, the building markets are cyclical, so the residential market will rebound, the non-residential market will rebound, the data center market should continue to grow fast. And to make the most of this recovery, we keep investing in expenses for future growth. So, again, opening of rep offices, launch of new products. For example, we are just launching today, I mean, not today, but this month, our most iconic range in France called Celiane. We are launching the next generation of Celiane, very good news for the French status. And we have a series of launches that will come in the months to come. We have a level of R&D to sets, which is again close to 5%. So we are not cutting our R&D expenses and so on and so forth. So we are doing a number of expenses and investment to fuel growth, but it’s more to make the most of the market rebound than really to boost quarter sales.
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Andre Kukhnin: It’s very helpful. Thank you very much.
Operator: Thank you. We will now take the next question from the line of Eric Lemarié from CIC Market Solutions. Please go ahead.
Eric Lemarié: Hi. Good morning. Thanks for taking my question. I got two questions, actually. The first one, you mentioned data centers. But apart from data centers, what’s the performance of the other faster expanding segments in Q1 in Europe and North America, connective product and green product? And a second question on software. So you mentioned this acquisition of Innovation in the software business. Would you be ready to acquire software in other segments?
Benoît Coquart: Hello, Eric. As far as fast expanding are concerned, it’s down more or less as the rest of the group. But again, data center is almost half of that, so it’s not accretive to growth, which shouldn’t last. And again, based on the scenarios we have and the plans we have, we expect fast expanding segment to be accretive to the top line evolution in 2024, as it has been for the past couple of years. So it’s a, let’s say, weak quarter, but it’s not relevant of any trend, and it should improve. As far as software is concerned, we are not in a business which is software intensive. It’s not like in automation or stuff like that, or planning, or if you look at total [Phonetic] end market, it is not software intensive. We have niches where software matter, and connected care is one of those niches. You could say that BMS, whatever the name you put on it, is firmware intensive, but otherwise, it’s not a business which is software intensive. So we are not ruling out anything. Now you are a lot more likely to see in the coming quarters acquisitions of market share or technology and product position in the areas which are field of interest to Legrand, either fast expanding or potential products in order to saturate our channel than to see some additional software acquisition. Some may come, but again, since we are not in a business which is software intensive, we are more likely to see product type of acquisitions.
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Eric Lemarié: Okay. Okay. Thank you.
Benoît Coquart: Now let me do a bit of advertising for the next CMD. All those questions will be better discussed and we’ll have more time to answer into the details at the end of September. So I hope you and your colleagues will have the opportunity to join at our CMD in London.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
Benoît Coquart: Thank you very much everybody. Have a good day.
Franck Lemery: Bye.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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<title>Yuga Labs and Somnia Forge Path to Enhanced Metaverse Interactivity</title>
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<pubDate>Sat, 04 May 2024 02:56:50 +0000</pubDate>
<category><![CDATA[Crypto]]></category>
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<category><![CDATA[Labs]]></category>
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<description><![CDATA[In a significant stride toward the fusion of decentralized digital realms, Yuga Labs has joined forces with Somnia, a trailblazer in blockchain innovation, to amplify the capabilities within the metaverse sphere. This collaboration marks a pivotal junction in the trajectory of Web3, pointing toward a more interconnected and fluid virtual experience for users across the [...]
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<content:encoded><![CDATA[<div>

In a significant stride toward the fusion of decentralized digital realms, Yuga Labs has joined forces with Somnia, a trailblazer in blockchain innovation, to amplify the capabilities within the metaverse sphere. This collaboration marks a pivotal junction in the trajectory of Web3, pointing toward a more interconnected and fluid virtual experience for users across the globe.
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Somnia, known for its robust Layer 1 blockchain designed specifically for metaverse scalability, brings to the partnership a framework that can handle an immense volume of transactions, critical for supporting vast metaverse environments. Their omni-chain protocols aim to bridge various elements of the digital world, from non-fungible tokens (NFTs) to expansive virtual realities, ensuring a seamless experience across different platforms.
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Yuga Labs, the creator behind the cultural phenomenon Bored Ape Yacht Club (BAYC) and the expansive virtual world of Otherside, leverages its profound influence in the NFT space to introduce a richer, more interactive metaverse environment. Since its inception in 2021, Yuga Labs has not only popularized NFTs but has also driven significant economic activity within the sector, generating an estimated $19 billion in transactions across its collections.
<h2>A Gateway to Enhanced Digital Interaction</h2>
The integration of Somnia’s protocols with Yuga Labs’ Otherside is set to revolutionize the way holders of Yuga collections engage with digital spaces. This integration will enable users to participate in metaversal events using their avatars, exhibit their NFTs, and partake in Somnia quests to accumulate points and rewards. 
This initiative not only enhances the utility of Yuga’s NFTs but also enriches the user experience by offering diverse ways to interact within the digital ecosystem.
Additionally, the partnership will grant Yuga NFT holders special bonuses in upcoming Metaverse Browser quests hosted by Somnia. This browser acts as a decentralized portal, akin to platforms like Steam or the Epic Game Store, but for the metaverse, allowing users to navigate through various virtual experiences effortlessly.
<h2>Unveiling New Dimensions of Digital Assets</h2>
Paul Thomas, founder of Somnia, emphasized the transformative potential of this collaboration, stating, “Our partnership with Yuga Labs significantly elevates the NFT ecosystem by not just providing utility but by opening a portal to expansive, interactive experiences that redefine the scope of NFT functionalities.”
With this partnership, Yuga NFT holders will not be confined to static interactions but will be able to use their avatars across any virtual experience developed on Somnia’s platform. This level of interoperability is crucial for building a cohesive digital identity that traverses various platforms and experiences, from massive online events to more intimate social interactions.

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<title>Trump closed his eyes during Hope Hicks’ testimony. Ex-‘Apprentice’ contestant has theory why</title>
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<pubDate>Sat, 04 May 2024 02:40:49 +0000</pubDate>
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<description><![CDATA[Trump closed his eyes during Hope Hicks’ testimony. Ex-‘Apprentice’ contestant has theory why Criminal defense attorney and former contestant on “The Apprentice” Stacy Schneider details her interpretation of former President Donald Trump’s behavior in the courtroom during his ongoing hush money criminal trial.
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Trump closed his eyes during Hope Hicks’ testimony. Ex-‘Apprentice’ contestant has theory why
Criminal defense attorney and former contestant on “The Apprentice” Stacy Schneider details her interpretation of former President Donald Trump’s behavior in the courtroom during his ongoing hush money criminal trial. 
</div>
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<title>May The 4th Be With You: All 9 ‘Star Wars’ Skywalker Films Ranked</title>
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<pubDate>Sat, 04 May 2024 02:33:48 +0000</pubDate>
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<description><![CDATA[Star Wars fans are celebrating May The 4th Be With You on Saturday, the unofficial holiday for franchise creator George Lucas’ sprawling, blockbuster space opera. Of course, the official Star Wars saga didn’t kick off on May 4, 1977, but 21 days later on May 25. Since that point, Lucas finished his original Star Wars [...]
The post <a href="https://americanceo.club/may-the-4th-be-with-you-all-9-star-wars-skywalker-films-ranked/">May The 4th Be With You: All 9 ‘Star Wars’ Skywalker Films Ranked</a> appeared first on <a href="https://americanceo.club">American CEO Club</a>.
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<content:encoded><![CDATA[<div>
Star Wars fans are celebrating May The 4th Be With You on Saturday, the unofficial holiday for franchise creator George Lucas’ sprawling, blockbuster space opera.
Of course, the official Star Wars saga didn’t kick off on May 4, 1977, but 21 days later on May 25. Since that point, Lucas finished his original Star Wars trilogy with The Empire Strikes Back and Return of the Jedi.
Clearly compelled by the power of The Force, Lucas returned to the Star Wars Universe in 1999 with his prequel trilogy, which started with The Phantom Menace, which was followed by Attack of the Clones and Revenge of the Sith.
Just when Star Wars fans thought they saw the last big-screen Star Wars adventure, Disney’s blockbuster purchase of Lucasfilm for $4 billion in 2012 brought the franchise back to life. As such, the final three films in what came to be known as the Skywalker Saga came to be with the release of The Force Awakens in 2015, followed by The Last Jedi and The Rise of Skywalker.
But with Disney’s purchase of Lucasfilm, the company had bigger plans in mind than just completing the Skywalker Saga. A pair of spinoff films — Rogue One: A Star Wars Story and Solo: A Star Wars Story were produced in 2016 and 2019, respectively — and a slate of live-action Star Wars streaming shows were produced for Disney+, beginning with the release of The Mandalorian in 2019.
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As someone who actually saw Star Wars during its release in 1977 and all eight of its subsequent Skywalker Saga film episodes, I’ve come to know the franchise quite well. Here’s a list of the films in the core franchise ranked in descending order. Happy Star Wars Day and May the 4th Be With You.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">9. ‘Star Wars: Episode II – Attack Of The Clones’ (2002)</h2>
After the exhilaration of Star Wars returning to the big screen with Episode I: The Phantom Menace, Attack of the Clones just felt like a massive letdown. Perhaps the toughest thing to watch was the utter lack of chemistry between the future parents of Luke and Leia — Padme Amidala (Natalie Portman) and Anakin Skywalker (Hayden Christensen).
The chemistry did eventually improve between the two, but not in enough time to save the second prequel movie. Plus, Liam Neeson’s monumental presence was sorely needed after his Jedi Master Qui-Gon Jinn was killed off in Episode I. At least Samuel L. Jackson’s Jedi Master Mace Windu stepped up, but it wasn’t enough.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">8. ‘Star Wars: Episode VIII – The Last Jedi’ (2017)</h2>
The most divisive of all Star Wars films between fans and the filmmakers, The Last Jedi first disappointed fans by not following through properly on the grand set-up at the conclusion of Episode VII – The Force Awakens.
To conclude the film, Rey (Daisy Ridley) finally finds Luke Skywalker (Mark Hamill) living as a hermit on a desolate island — and extends her arm toward him as she tries to hand him his lightsaber. The scene leaves fans with the impression that the Jedi master is back, but at the start of The Last Jedi, Luke takes the lightsaber and tosses it over his shoulder. Everything goes downhill from there with an introduction of settings and characters that felt too far out of the ordinary.
The Last Jedi isn’t a bad film, just a disappointing one and the least Star Wars-like film out of the nine movies in the Skywalker Saga.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">7. ‘Star Wars: Episode IX – The Rise of Skywalker’ (2019)</h2>
Trouble in the Star Wars camp began brewing mere months before the release of The Last Jedi when the original Episode IX director Colin Trevorrow was fired by the studio and The Force Awakens filmmaker J.J. Abrams was brought back to direct the last film in the Skywalker Saga.
Like The Last Jedi, The Rise of Skywalker isn’t a bad film, it just feels like its potential wasn’t fully realized — especially judging from what was revealed in the leak of Trevorrow’s purported script, which was subtitled Duel of the Fates. Instead, The Rise of Skywalker is a total fan service film that eventually encompasses many elements from the entire Star Wars saga. If it were a vinyl album, The Rise of Skywalker sort of feels like a Star Wars Greatest Hits sort of compilation with a safe ending.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">6. ‘Star Wars: Episode III – Revenge of the Sith’ (2005)</h2>
Fortunately, the pairing of Anakin Skywalker and Padme Amidala worked a lot better for Revenge of the Sith, and the looming threat of how Anakin gave into the forces of the Emperor Palpatine (Ian McDiarmid) didn’t disappoint.
Best of all, the brutal dual between Anakin and his Jedi Master Obi-Wan Kenobi (Ewan McGregor) was a perfect setup for the final transformation of his fallen apprentice into the suited Darth Vader, even if the Sith Lord’s proclamation of “Noooo!” upon learning of Padme’s death was mocked relentlessly by fans.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">5. ‘Star Wars: Episode 7 – The Force Awakens’ (2015)</h2>
This may not deserve a No. 5 slot based on the content of the movie, but the impact it had surely makes it earn its keep. The Force Awakens was exciting — if not for any other reason — because Star Wars was given new life after the property laid dormant for 10 years, apart from some animated projects.
On top of that, it was exciting to see characters introduced to the Star Wars Universe to expand the depth of the Skywalker Saga. Daisy Ridley’s Rey had a great presence as did her fellow Resistance fighters Finn (John Boyega) and Poe (Oscar Isaac).
Adam Driver’s Kylo Ren got off to a great beginning as a Star Wars villain as Darth Vader’s grandson in The Force Awakens, even the character’s path became jumbled in the trilogy’s final two episodes.
It was also wonderful to see the return of Luke, Leia (Carrie Fisher) and Han Solo (Harrison Ford), whose death proved meaningful given it was at the hands of his estranged son. Topping it off was the return of the “walking carpet” Chewbacca, which put Peter Mayhew back into the Wookie’s fur.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">4. ‘Star Wars: Episode 1 – The Phantom Menace’ (1999)</h2>
Like The Force Awakens, The Phantom Menace ranking is based on the film’s impact and not its all-around story. It was the biggest of all Star Wars comebacks since it marked the first franchise film since the end of the original trilogy.
Writer-director George Lucas was certainly well-intentioned with the first of his three prequel films. Thankfully, he found a pillar of strength in Liam Neeson’s Jedi Master Qui-Gon Jinn and a worthy apprentice in Obi-Wan Kenobi. Topping it off, though, was the introduction of the iconic – and very cool-looking -– villain Darth Maul (Ray Park)
Fans, however, criticized the casting of Jake Lloyd as the young Anakin Skywalker. None of the hate by fans over the casting decisions or the introduction of Jar Jar Binks (Ahmed Best) was warranted, though — for reasons I’ll explain below — because the Skywalker Saga is ultimately bigger than all of its characters.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">3. ‘Star Wars: Episode V – Return of the Jedi’ (1983)</h2>
By this point, you’ve probably realized that nothing can top the original Star Wars trilogy and Return of the Jedi served as a solid bookend to the film that redefined cinema in 1977. True, while Return of the Jedi doesn’t come closer to either of its predecessors, it’s still a great movie.
The pinnacle, of course, is the ultimate showdown between Darth Vader (James Earl Jones/David Prowse) and his son Luke Skywalker and Vader’s ultimate redemption after he tossed Emperor Palpatine (Ian McDiarmid) down a chasm. The film is truly completed, though, with Luke trying to save his father despite all of his sins, and the unmasking of Darth Vader (Sebastian Shaw) so he could look at his child with his own eyes.
Somewhat lost in the story were Han Solo and Leia as they were mostly stuck on the forest planet of Endor with the Ewoks. Some fans detest the furry bear-like creatures, but George Lucas made it clear from the beginning that his Star Wars episodes are ultimately family films, so characters like the Ewoks and yes, Jar-Jar Binks certainly serve their purpose.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">2. ‘Star Wars: Episode IV – A New Hope’ (1977)</h2>
What more can be said other than Star Wars — which helped define the blockbuster film era in the mid-1970s— is one of the greatest films ever made. It kicked off a sprawling film series and created the ultimate story between good and evil, and all of its characters instantly became endearing to moviegoers.
Luke, Leia, Han, Chewbacca and Obi-Wan Kenobi (Alec Guinness) and the film’s main droids C-3PO (Anthony Daniels) and R2-D2 (Kenny Baker) encompassed the good, while Darth Vader and Grand Moff Tarkin (Peter Cushing) represented evil.
On top of that, the film had among the best space battles ever created for the screen, including the showdown between the Rebellion and the evil Empire, concluding, of course, with Luke blowing up the Death Star via his X-Wing after Han Solo and Chewbacca helped clear his path. Key to the movie, though, was Darth Vader’s TIE Fighter being accidentally spun into space, setting up the best Star Wars movie of them all.
<h2 class="subhead-embed color-accent bg-base font-accent font-size text-align">1. ‘Star Wars: Episode V: The Empire Strikes Back’ (1981)</h2>
The Empire Strikes Back is easily the best Star Wars film of the Skywalker Saga, mainly because it dodges a case of a sophomore slump by laying out a narrative that is the opposite of the events of A New Hope. The film shows just how massive the evil Empire is and we learned that the Death Star from the first film was merely a weapon of the evil organization.
The middle episode of the original Star Wars trilogy has many revelatory moments as we’re introduced to Jedi Master Yoda (voiced by puppeteer Frank Oz), which expands the Jedi narrative. The environment is completely different by moving the Rebel base to the ice planet of Hoth. The love affair between Leia and Han Solo also grows and we learn more of Han’s backstory with the introduction of fellow scoundrel Lando Calrissian (Billy Dee Williams).
Best of all, there’s the revelation that Darth Vader is Luke’s father, which is revealed in a climactic lightsaber battle, which comes after Han Solo is frozen in Carbonite — which happens in one of the coolest scenes ever put on film.
All of these roads lead to one of the biggest cliffhangers in movie history, where Luke, Leia and their fellow Rebels’ future is in complete doubt. Directed by Irvin Kershner, the Empire didn’t just strike back, it packed so much punch that it left Star Wars fans on their behinds.
</div>
The post <a href="https://americanceo.club/may-the-4th-be-with-you-all-9-star-wars-skywalker-films-ranked/">May The 4th Be With You: All 9 ‘Star Wars’ Skywalker Films Ranked</a> appeared first on <a href="https://americanceo.club">American CEO Club</a>.
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<title>America’s big stagflation scare is over</title>
<link>https://americanceo.club/americas-big-stagflation-scare-is-over/</link>
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<pubDate>Sat, 04 May 2024 02:13:49 +0000</pubDate>
<category><![CDATA[Markets]]></category>
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<description><![CDATA[The US economy looks to have steered clear of danger after the specter of stagflation spooked markets and put analysts on edge in recent weeks. The key development was the April jobs report on Friday, which showed 175,000 positions were added last month, coming in well below the consensus forecast of 238,000. Further, average hourly [...]
The post <a href="https://americanceo.club/americas-big-stagflation-scare-is-over/">America’s big stagflation scare is over</a> appeared first on <a href="https://americanceo.club">American CEO Club</a>.
]]></description>
<content:encoded><![CDATA[The US economy looks to have steered clear of danger after the specter of stagflation spooked markets and put analysts on edge in recent weeks.
The key development was the April jobs report on Friday, which showed 175,000 positions were added last month, coming in well below the consensus forecast of 238,000. Further, average hourly earnings unexpectedly declined to 0.2%.
<div>
It was the perfect mix of data to thwart the stagflation narrative: Job additions weren’t weak enough to signal slowdown trouble, but also not strong enough to support higher-for-longer interest rates. And since elevated labor costs are part of the stagflation equation, the dip in average hourly earnings also signaled a period of languid growth will be avoided.
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</section>
The report brought full circle a stagflation discussion that started with the latest GDP print, which showed both a substantial slowdown from previous quarters and stubbornly high underlying inflation data. It sent alarm bells ringing around stagflation, which occurs when inflation stays high despite a cooling economy.
The elevated risk also caught the eye of Wall Street. JPMorgan’s chief strategist Marko Kolanovic was among the group, noting that such a scenario could come to challenge hopes for a US soft landing.
Fear is certainly warranted given the last stagflationary regime the US experienced, back in the 1970s. The era was plagued by high consumer prices, recessions, and a weak stock market.
And worry people did. According to Bank of America, stagflation-related headlines in the media spiked to a two-year high in the week following the GDP report.
But Friday’s jobs report brought needed relief.
To top economist Mohamed El-Erian, Friday’s data was a “Goldilocks report that will please the Fed and please the markets,” he told Bloomberg TV on Friday. Stocks are flying higher as a result, and interest rate cut bets rose back up.
It would have been a different story if the report printed even weaker, however. While light, the data remained above a stagflationary threshold, diffusing earlier concerns, and avoiding a possible market sell-off.
According to estimates from Bank of America’s Michael Harnett — published before the data was available — if the US added less than 125,000 in April, and average hourly earnings ticked above 0.4% from a month ago, that would only deepen the stagflationary outlook.
In that situation, odds of a equity sell-off were high, Harnett said. Instead, the benchmark S&P 500 has shot up to 1.14% as of 12 p.m. ET on Friday.
</div>
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<title>It’s getting really hard to find a job that pays well</title>
<link>https://americanceo.club/its-getting-really-hard-to-find-a-job-that-pays-well/</link>
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<pubDate>Sat, 04 May 2024 02:08:53 +0000</pubDate>
<category><![CDATA[Finance]]></category>
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<category><![CDATA[hard]]></category>
<category><![CDATA[job]]></category>
<category><![CDATA[pays]]></category>
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<description><![CDATA[The economy is settling into its new shape, and it might mean lower pay for new workers. Job growth in April was concentrated in traditionally low-paying sectors like healthcare and retail. Wage growth, though slower, still outpaces inflation, which is still a boon for workers. The economy is settling into its new shape after a [...]
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]]></description>
<content:encoded><![CDATA[<div>
<ul class="summary-list">
<li>The economy is settling into its new shape, and it might mean lower pay for new workers.</li>
<li>Job growth in April was concentrated in traditionally low-paying sectors like healthcare and retail.</li>
<li>Wage growth, though slower, still outpaces inflation, which is still a boon for workers.</li>
</ul>

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The economy is settling into its new shape after a long roller coaster ride — and it’s not all good news if you’re looking to land a big paycheck.
Jobs are still being added at a healthy clip and unemployment is still near a sustained historic low, according to the latest jobs report. It’s <a rel="nofollow noopener" target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-today-light-april-jobs-report-bond-yields-tumbling-2024-5?_gl=1*185uhy6*_ga*MTE4OTM5OTQ0Ni4xNzA5NzYyNDUx*_ga_E21CV80ZCZ*MTcxNDc1MzA3MS4xOTMuMS4xNzE0NzU0MDg0LjYwLjAuMA.." data-analytics-product-module="body_link">exactly</a> what the Federal Reserve might be looking for, and signals continued good news for an economy that’s been bolstered by a booming labor market.
“The growth in wages have outpaced inflation, which translates into more money in the pockets of working families. That is not an accident,” Acting Secretary of Labor Julie Su told Business Insider.
But there’s a dissonance in the job market; if you’re a college-educated, white-collar worker, you might know that all too well. That’s because the industries that led job growth in April are traditionally low-paying.

It’s yet another sign that higher-paying jobs are becoming more scarce, and it comes as more Americans find themselves employed, but not necessarily stable. It might also be falling more on the shoulders of women, who are <a rel="nofollow noopener" target="_blank" href="https://twitter.com/JosephPolitano/status/1786373594051641596" data-analytics-product-module="body_link">seeing historic employment figures</a>.
For instance, the private education and health services sector led the pack in job growth last month — and while that might sound high-paying on its face, the data under the hood tells a different story. The bulk of job growth in the sector is happening in fields like <a rel="nofollow noopener" target="_blank" href="https://www.bls.gov/news.release/empsit.t17.htm" data-analytics-product-module="body_link">healthcare and social assistance</a>, which includes the traditionally low-paid workers in nursing and residential care facilities, and home healthcare workers.
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“Healthcare is not just doing well,” Julia Pollak, the chief economist at ZipRecruiter, told Business Insider. “Healthcare is dominating everything. It’s added 56,000 jobs in this report, but it has added over 750,000 jobs over the past year.”
<iframe title="Job growth by industry" aria-label="Bar Chart" id="datawrapper-chart-HEDF2" src="https://datawrapper.dwcdn.net/HEDF2/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="652" data-external="1"></iframe>
Indeed, job growth is concentrated in industries that are historically low-paying — and continue to pay less than the average across private industries. Those industries, and the subsets within them that are seeing big growth, also happen to be female-dominated, as Kate Bahn, the chief economist and SVP of research at the Institute for Women’s Policy Research, told BI.

“Where there’s been job growth has not been sectors where there has been high wage growth,” Bahn said, adding: “That’s interesting that there’s high labor demand in those industries — clearly — but it has not translated into high wage growth.”
The three sectors that saw net job growth of at least 20,000 last month all have average wages below those for all private employees:
<iframe title="Average hourly wages as of April 2024" aria-label="Bar Chart" id="datawrapper-chart-KdZrg" src="https://datawrapper.dwcdn.net/KdZrg/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="652" data-external="1"></iframe>
That points to a continued dynamic in the labor market: White-collar workers are seeing an employment slump, as Business Insider’s Aki Ito chronicled. The hiring rate for those making over $96,000 is at just 0.5% — its lowest level since 2014.
It’s all a bit of a mixed bag. As Pollak notes, “wage growth has come down sharply, but it’s mostly come down in industries where it was very rapid before.”

Wages in the lowest-paying sectors have <a rel="nofollow noopener" target="_blank" href="https://www.nber.org/system/files/working_papers/w31010/w31010.pdf" data-analytics-product-module="body_link">grown faster</a> than those in higher-paying industries over the last few years, as demand for hourly workers skyrocketed and employers turned toward raising pay and benefits to try to plug shortages in a tight labor market.
“I think low-paid jobs have gotten a little bit better compared to how really awful they used to be,” Bahn said.
But as Bahn notes, “there’s a lot of evidence that women are really constrained and limited in their labor mobility when they are in these career paths of women-dominated jobs like healthcare and education.”
And the rise of these jobs might also be further contributing to another growing group undergirding some of the holes in the economy. A growing share of workers in the US are what’s known as “ALICE”: Asset Limited, Income Constrained, Employed. That means that they’re holding down jobs, and making enough money to be ineligible for many social services — but still aren’t getting by.

The workers below that ALICE threshold are <a rel="nofollow noopener" target="_blank" href="https://www.unitedforalice.org/maps-and-data" data-analytics-product-module="body_link">doing even worse</a>. They’re concentrated in industries like retail trade, healthcare and social assistance, and accommodation and food services — all of the jobs currently booming.
But even if wage growth isn’t as high as it was before, Nick Bunker — the economic research director for North America for Indeed Hiring Lab — pointed out to Business Insider that “wages continue to outpace inflation,” which could be good for job seekers.
“I think that’s a sign that, hey, you’re going to get more bang for every wage gain than you have in the past,” Bunker said.
</div>
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<title>US rate-path ‘dot plot’ needs more context By Reuters</title>
<link>https://americanceo.club/us-rate-path-dot-plot-needs-more-context-by-reuters/</link>
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<pubDate>Sat, 04 May 2024 02:06:49 +0000</pubDate>
<category><![CDATA[Economy]]></category>
<category><![CDATA[context]]></category>
<category><![CDATA[dot]]></category>
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<description><![CDATA[PALO ALTO, California (Reuters) – The U.S. Federal Reserve should beef up its quarterly “dot plot” of policymakers’ interest-rate-path views by including the individual economic expectations that inform each one, Austan Goolsbee, president of the Chicago Fed, said on Friday. The dot plot, published every three months since 2012, is a graph depicting where each [...]
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]]></description>
<content:encoded><![CDATA[
<div>
PALO ALTO, California (Reuters) – The U.S. Federal Reserve should beef up its quarterly “dot plot” of policymakers’ interest-rate-path views by including the individual economic expectations that inform each one, Austan Goolsbee, president of the Chicago Fed, said on Friday. 
The dot plot, published every three months since 2012, is a graph depicting where each of the 19 U.S. central bankers expect the Fed’s policy rate to be at the end of each of the next few years. 
The latest one, published in March, shows the median Fed policymaker expected to need to cut short-term borrowing costs three times by the end of this year, though nearly half saw fewer rate cuts, and several saw just one rate cut or none. 
But in its current form, Goolsbee said in remarks prepared for delivery to a conference on monetary policy at Stanford University’s Hoover Institution, “the dot plot is just a collection of opinions without economic content.”
It’s impossible to know, for instance, if a policymaker who writes down fewer rate cuts this year fears the economy is overheating, or simply believes the economy has the capacity to grow faster and therefore can tolerate higher rates. 
The goal of Fed communications, Goolsbee said, should be to lay out the rationale for policy decisions, and the dot plot falls short.
“Because it can’t be connected to the economic conditions the participant thinks will justify that interest rate, there is nothing to tell us why they think this a reasonable choice,” he said. “A matrix that anonymously matches the economic forecasts to the rate path for each participant would answer some important questions.”
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His remarks come after European Central Bank board member Isabel Schnabel floated the idea of publishing an ECB “dot plot,” and as the Fed itself prepares for a review of its own policy framework, expected to begin later this year.
Goolsbee did not offer his own rate-path view, or explain the economic assumptions that underlie it. 
Earlier in the day Goolsbee said that recent cooling in the U.S. labor market gave him added confidence the economy is not overheating. 
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<title>Xenia Hotels & Resorts optimistic despite RevPAR dip By Investing.com</title>
<link>https://americanceo.club/xenia-hotels-resorts-optimistic-despite-revpar-dip-by-investing-com/</link>
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<pubDate>Sat, 04 May 2024 02:04:50 +0000</pubDate>
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<description><![CDATA[Xenia Hotels & Resorts, a company specializing in upscale and luxury hotel properties, reported mixed results for the first quarter of 2024. While the company experienced a 1.5% decrease in same-property Revenue Per Available Room (RevPAR), it saw an increase of 10% in adjusted Funds From Operations (FFO) per share, buoyed by strategic share buybacks. [...]
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]]></description>
<content:encoded><![CDATA[
<div>
Xenia Hotels & Resorts, a company specializing in upscale and luxury hotel properties, reported mixed results for the first quarter of 2024. While the company experienced a 1.5% decrease in same-property Revenue Per Available Room (RevPAR), it saw an increase of 10% in adjusted Funds From Operations (FFO) per share, buoyed by strategic share buybacks. 
The renovation of Hyatt Regency Scottsdale, a key property in Xenia’s portfolio, is on track for completion by the end of 2024. Despite the temporary drag on RevPAR growth due to renovations, Xenia maintains a strong outlook for the rest of the year, with expectations of a recovery in corporate and group rates and robust leisure demand in the summer.
<h2>Key Takeaways</h2>
<ul>
<li>Xenia Hotels & Resorts reported a decline in same-property RevPAR by 1.5%, but excluding the Hyatt Regency Scottsdale, RevPAR increased by 3.7%.</li>
<li>Adjusted FFO per share increased by 10%, benefiting from the company’s share repurchase program.</li>
<li>$120 million to $130 million is projected to be spent on property improvements for the year 2024.</li>
<li>The company expects the full renovation of Hyatt Regency Scottsdale to be completed by the end of 2024.</li>
<li>Xenia remains optimistic about earnings growth, particularly through renovated properties and those serving group and business transient customers.</li>
</ul>
<h2>Company Outlook</h2>
<ul>
<li>Xenia anticipates a 3.5% increase in same-property RevPAR at the midpoint for the full year.</li>
<li>Hotel EBITDA margin is expected to decrease by approximately 25 basis points from the second to fourth quarters.</li>
<li>The company forecasts earning about 20% of full-year adjusted EBITDAre in Q3 and nearly 30% in Q4.</li>
</ul>
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<h2>Bearish Highlights</h2>
<ul>
<li>The Hyatt Regency Scottsdale renovation is expected to impact RevPAR growth negatively in the first half of the year.</li>
<li>Some leisure-driven properties experienced RevPAR weakness.</li>
</ul>
<h2>Bullish Highlights</h2>
<ul>
<li>Business transient and Group demand are showing growth across the portfolio.</li>
<li>Strong leisure demand is expected to continue, especially during the summer months.</li>
<li>Supply growth is expected to remain muted in Xenia’s submarkets, which could support RevPAR growth.</li>
</ul>
<h2>Misses</h2>
<ul>
<li>The company reported a decrease in adjusted EBITDAre compared to Q1 2023.</li>
</ul>
<h2>Q&A Highlights</h2>
<ul>
<li>Executives discussed the expansion project, including the addition of 25 rooms and expanded meeting space, with completion expected by the end of Q3 2024.</li>
<li>Recovery in various markets, especially the tech industry, and large corporate accounts are gradually improving.</li>
<li>The company maintains rate levels achieved during COVID-19 for leisure stays.</li>
</ul>
Xenia Hotels & Resorts (ticker: XHR), while facing some headwinds in the first quarter, is positioning itself for a strong performance in the latter half of 2024. The company’s focus on strategic investments, such as the renovation of the Hyatt Regency Scottsdale and the expansion of its meeting spaces, is expected to pay dividends as these projects are completed. With a strong balance sheet and a proactive approach to managing its portfolio, Xenia is confident in its ability to create value for shareholders and capitalize on the recovering demand in the hospitality sector.
<h2>InvestingPro Insights</h2>
Xenia Hotels & Resorts (XHR) has demonstrated a strategic approach to enhancing shareholder value, as evidenced by the company’s aggressive share buyback program. This initiative has contributed to a 10% increase in adjusted Funds From Operations (FFO) per share, showcasing management’s commitment to capital allocation efficiency. Notably, Xenia’s share buybacks are a testament to the confidence the management team has in the company’s future prospects, aligning with the positive outlook for the hospitality sector’s recovery.
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InvestingPro Tips indicate that analysts are optimistic about Xenia’s performance, with two analysts revising their earnings upwards for the upcoming period. This sentiment is further bolstered by the company’s high shareholder yield, suggesting a favorable return to investors through dividends and share repurchases.
From a valuation perspective, Xenia is trading at a high earnings multiple, with a P/E Ratio of 75.55 and an adjusted P/E Ratio for the last twelve months as of Q1 2024 at 83.78. However, the company’s revenue valuation multiple remains low, which could signal an attractive entry point for investors looking for growth potential in the hospitality industry.
InvestingPro Data highlights Xenia’s solid financial position, with a market capitalization of $1.58 billion USD and liquid assets that exceed short-term obligations. Furthermore, the company’s dividend yield stands at 3.21%, with a notable dividend growth of 20.0% in the last twelve months as of Q1 2024, reflecting Xenia’s commitment to returning value to shareholders.
For investors seeking more in-depth analysis and additional InvestingPro Tips, visiting can provide a wealth of information. Currently, there are additional tips available on InvestingPro, offering a comprehensive perspective on Xenia’s financial health and market position. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing your investment research with valuable insights and data.
<h2>Full transcript – Xenia Hotels & Resorts Inc (XHR) Q1 2024:</h2>
Raymond James: Aldo Martinez – Finance Manager Marcel Verbaas – Chair and CEO Barry Bloom – President and COO Atish Shah – EVP and CFO
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Operator: Hello, and welcome to the Xenia Hotels & Resorts Inc. Q1 2024 Earnings Conference Call. My name is Alex. I’ll be coordinating the call today. [Operator Instructions] I’ll now hand it over to your host, Aldo Martinez, Finance Manager, to begin, please go ahead.
Aldo Martinez: Thank you, Alex, and welcome to Xenia Hotels & Resorts’ first quarter 2024 earnings call and webcast. I’m here with Marcel Verbaas, our Chair and Chief Executive Officer; Barry Bloom, our President and Chief Operating Officer; and Atish Shah, our Executive Vice President and Chief Financial Officer. Marcel will begin with a discussion on our performance, Barry will follow with more details on operating trends and capital expenditure projects and Atish will conclude today’s remarks on our balance sheet and outlook. We will then open the call for Q&A. Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K and other SEC filings which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued yesterday afternoon, along with the comments on this call, are made only as of today, May 3rd, 2024, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find the reconciliation of non-GAAP financial measures to net income and definitions of certain items referred to in our remarks in our first quarter earnings release, which is available on our Investor Relations section of our website. The property-level information we’ll be speaking about today is on the same-property basis for all 32 hotels, unless specified otherwise. An archive of this call will be available on our website for 90 days. I will now turn it over to Marcel to get started.
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Marcel Verbaas: Thanks, Aldo, and good morning, everyone. Our operating results continued to be encouraging in the first quarter as strong group demand and steady improvement in business transient demands grew same-property portfolio RevPAR and total revenues that exceeded our expectations for the quarter. A consistent focus on expense controls by our operators and asset management team in a continued inflationary environment allowed us to also achieve a same-property hotel EBITDA margin that was a bit ahead of our expectations. As a result, our adjusted EBITDAre came in above our internal forecast as well. For the first quarter of 2024, we reported net income of $8.5 million, adjusted EBITDAre of $65.3 million, and adjusted FFO per share of $0.44. While adjusted EBITDAre declined from the first quarter of 2023, we had anticipated this as Hyatt Regency Scottsdale at Gainey Ranch had record high performance last year when Phoenix hosted the Super Bowl and overall market demand was extremely strong. Despite the lapping of this outperformance and the high level of EBITDA disruption resulting from the ongoing transformative renovation at our Scottsdale resort during the quarter, our adjusted FFO per share increased by 10% over last year. This was mostly driven by the significant amount of share buybacks we completed in 2023, which we continued at a slower pace during the early part of the first quarter this year. Although same-property RevPAR for our 32 hotel portfolio decreased by 1.5% for the quarter, RevPAR actually increased by a healthy 3.7% when excluding Hyatt Regency Scottsdale, despite the negative impact of the Easter holiday occurring at the end of March this year. This increase was mainly driven by a significant 310 basis point increase in occupancy for these 31 hotels. We saw particular strength in a number of our large group-oriented hotels such as our Houston hotels, Hyatt Regency Portland, and Park Hyatt Aviara, as well as at Marriott San Francisco Airport and Hyatt Regency Santa Clara. We continue to believe that these two high-quality hotels possess some of the greatest earnings growth potential within our portfolio. Additionally, Grand Bohemian Hotel Orlando is hitting its stride now that the comprehensive renovation is fully behind us and Canary Hotel Santa Barbara had outsized revenue and earnings growth compared to last year as we lapped the room renovation that took place mainly in the first quarter of last year. On a same-property basis, first quarter same-property hotel EBITDA of $70.7 million was 8.5% below 2023 levels and hotel EBITDA margin decreased 228 basis points. Excluding Hyatt Regency Scottsdale, first quarter Hotel EBITDA increased 4.7%, and Hotel EBITDA margin decreased just 14 basis points. We continue to be pleased with these margin results as overall inflation remained at an elevated level during the quarter. As we have noted over the past several quarters, the trends across our portfolio continue to indicate that our demand segmentation mix is reverting towards pre-pandemic levels with group and business transient demand recovering and leisure demand normalizing. Group demand was a particular bright spot during the first quarter. same-property group room revenues excluding Hyatt Regency Scottsdale increased 8.1% as compared to the same period last year. We also saw a modest improvement in business transient demand with continued increases in midweek occupancy. And while leisure demand has largely stabilized across the portfolio, we did see some further retracement in a few of our more leisure-dependent assets and markets in the quarter, particularly in Napa and Savannah. Now, turning to our capital expenditure projects. We continue to project that we will spend between $120 million and $130 million on property improvements during the year. While Barry will provide additional details on the $33.4 million we invested into the portfolio during the quarter in his remarks, I would like to highlight the progress we are making on the transformational renovation and upgrading of Hyatt Regency Scottsdale. The project is progressing as planned and we still anticipate a completion by the end of 2024 with approximately $65 million to $70 million that will be spent during this year. After completing the adult pool and its H2Oasis pool bar in January, the large family pool and its F&B amenities were fully completed and operational in early April. The new pool complex is spectacular and significantly improved over the resort’s previous amenities. The earlier reviews have been very positive and we expect that this new pool complex will be well received by our anticipated higher-rated leisure and group demand. We also believe that this upgrade of the pool complex will enable us to attract significant staycation leisure demands during the slower summer season in the years ahead. We also continue to make progress on the renovation of all guest rooms. We have now completed the renovation of 230 rooms and we anticipate that a total of almost 300 out of our current 491 rooms will be fully renovated by the end of May. The remaining guest rooms, including the additional five rooms that will be created as part of this project, will be completed in continual phase until final completion by the end of the third quarter. We are also making good progress on the approximately 12,000 square foot expansion of the Arizona ballroom. We continue to expect that this ballroom expansion, as well as the renovation of all existing ballrooms, meeting spaces, and pre-function space will be completed by the end of the year. We have also commenced the renovation of the public space, including the lobby, lobby bar, hotel market, and all indoor and outdoor dining spaces. As announced last quarter, we are collaborating with celebrity chef, Richard Blais on all food and beverage offerings at the relaunched resort. We are thrilled we are expanding our relationship with Chef Blais, with whom we have developed an excellent working relationship at Park Hyatt Aviara, Hyatt Regency Grand Cypress, and Hyatt Centric Key West. We continue to expect completion of these components by the end of the third quarter. Restaurant concepts and menus are nearly finalized as work has now begun in each of the food and beverage outlets. And finally, we continue to expect completion of all improvements to the resort’s building facade, infrastructure and grounds to be completed by the end of 2024. The renovation and transformation of all of these components will continue to displace a significant amount of revenue and EBITDA as the overall guest experience is meaningfully impacted. We expect that the majority of the remaining revenue disruption will occur during the second and the third quarters and subside as the fourth quarter progresses. We now expect the impact of renovation disruption to be a bit higher than previously projected as we have gotten deeper into the project and the sequencing of demolition and construction has become clear. Atish will provide further details on our outlook, including our renovation disruption during his remarks. We continue to be extremely excited about this project and the earnings growth potential that we expect will be created by this transformation. The Phoenix Scottsdale luxury resort market remains strong and the soon-to-be-launched Grand Hyatt Scottsdale will be a formidable competitor in this luxury peer set. Looking ahead across the portfolio, we remain cautiously optimistic for the remainder of 2024. As we have previously outlined, we believe we have significant embedded earnings growth potential within our portfolio, primarily through our recently renovated properties, our hotels that primarily cater to group and business transient customers, and our two most recent acquisitions, W Nashville and Hyatt Regency Portland at the Oregon Convention Center. Additionally, we continue to expect strong RevPAR growth at our properties in our recovering northern California markets, San Francisco and Santa Clara. We saw these themes play out in the first quarter as we experienced encouraging results at our recently renovated properties, Grand Bohemian Orlando and Canary Hotel Santa Barbara, as well as further gains at properties that were renovated in recent years, including Hyatt Regency Grand Cypress, our Houston properties and Waldorf Astoria Atlanta Buckhead. We also had strong results at our other large Group-oriented hotels, our Northern California assets, and our most recently acquired hotels, particularly Hyatt Regency Portland. We are off to a good start in the second quarter. We estimate that excluding Scottsdale, same-property of RevPAR increased 6.2% in April as compared to the same period in 2023. When including Hyatt Regency Scottsdale, which continued to deliver very strong results through May of 2023, we estimate that April RevPAR is up 0.9% compared to last year. Given its performance through May of last year and the renovation disruption we are experiencing this year, we continue to expect that Hyatt Regency Scottsdale will be a drag on RevPAR growth through the first half of the year, after which, the comparisons will become more favorable. We remain particularly optimistic regarding our portfolio performance and earnings growth potential, as we look ahead to 2025 and beyond. We expect recent demand trends in our portfolio to continue, and are looking forward to the additional growth we expect to get from completion of the Scottsdale project. We continue to believe that supply growth will remain muted in our submarkets over the next several years, and especially in the upper upscale and luxury segments where our hotels and resorts are positioned. This will provide a very favorable backdrop for potential RevPAR growth, as we have seen in previous cycles in the lodging industry, when supply growth has been subdued. With our high quality and further improved portfolio, we expect to be well-positioned to take advantage of these dynamics. I will now turn the call over to Barry to provide more details on our operating results and our capital projects.
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Barry Bloom: Thank you, Marcel, and good morning, everyone. For the first quarter, our 32 Same-Property portfolio RevPAR was $176.86, based on occupancy of 67.4%, at an average daily rate of $262.39, a decrease of 1.5% as compared to the first quarter in 2023. Excluding Hyatt Regency Scottsdale, first quarter RevPAR was $178.07, an increase of 3.7% as compared to 2023. This increase reflected 3.1 points of occupancy gain and a decline of 1% in average daily rate as compared to the first quarter of 2023. As Marcel indicated in his remarks, the Same-Property leaders in terms of RevPAR growth in the quarter included our hotels that were lapping first quarter 2023 renovations at Canary Santa Barbara and Grand Bohemian Orlando. Additionally, RevPAR grew significantly at Hyatt Regency Santa Clara, up 26.3%, Waldorf Astoria Atlanta Buckhead up 15.9%, Fairmont Pittsburgh up 9.8%, Portland, where our two hotels were each up approximately 9.5%, Houston, where each of our hotels were up over 8.5%, Park Hyatt Aviara up 7.6%, and Marriott San Francisco Airport, which was up 5%. The growth in these markets is a result of clearly improving business transient and Group demand that we are seeing across the portfolio. Conversely, we experienced RevPAR weakness compared to the first quarter of 2023 at a couple of our leisure-driven properties, including Bohemian Savannah Riverfront and Andaz Napa. As expected, results in the first quarter grew as each month progressed. Looking at each month of the quarter, excluding Hyatt Regency Scottsdale, January RevPAR was $157.14, up 11.1% to January 2023. February RevPAR was $178.71, up 0.6% compared to February 2023. And March RevPAR was up — was $198.40, up 0.9% compared to March 2023. Notably, occupancy grew each month during the quarter. We are optimistic about the recovery in corporate and Group rates as we continue to achieve higher midweek occupancies across the portfolio, particularly on Tuesday and Wednesday nights, where these higher occupancies are providing meaningful rate compression opportunities. We note that compared to 2019, which excludes Hyatt Regency Scottsdale, Hyatt Regency Portland, and W Nashville, daily occupancies still trail by approximately 5.5 to 7 occupancy points each day of the week, with the exception of Mondays and Thursdays, which have been slower to recover, trailing 2019 by approximately 10 to 11 occupancy points. Business from the largest corporate accounts across our portfolio continues to be significantly behind 2019, while corporate business from small and medium-sized accounts has recovered much more significantly. Group business continues to be a bright spot across the portfolio, where we continue to see a reversion to pre-pandemic patterns. For the first quarter, excluding Hyatt Regency Scottsdale, Group room revenues were up just over 8% as compared to the first quarter of last year. Notably, much of this growth was in occupancy, with room nights up approximately 7%, with rate up approximately 1%. This reflects a continued trend in our mix of Group business, with association Group business now recovering at a stronger pace than corporate Group business. Now, turning to expenses and profit, first quarter, same-property Hotel EBITDA was $70.7 million, a decrease of 8.5% on a total revenue decline of 0.6% compared to the first quarter of 2023, resulting in 228 basis points of margin decline. Excluding Hyatt Regency Scottsdale, Hotel EBITDA was $67.2 million, an increase of 4.7% on a total revenue increase of 5.3%, resulting in a margin decline of just 14 basis points. This modest decline in Hotel EBITDA margin for the quarter reflected our operator’s ability to manage expenses while continuing to improve guest services and satisfaction. Overall, labor expenses increased over last year, which was expected due to higher occupancy levels. Our operators continue to control overtime more effectively now that staffing levels have normalized. In the undistributed departments, expenses in A&G and property operations were well controlled, while sales and marketing expenditures continue to increase as hotels grow their sales teams and continue expenditures on digital marketing efforts. Energy expenses for the quarter declined year-over-year as a result of the warmer weather and reduced pricing in certain markets compared to last year. Turning to CapEx. During the first quarter we invested $33.4 million in portfolio improvements. As Marcel discussed, we continued our significant work on the approximate $110 million transformative renovation and upbranding of the 491-room Hyatt Regency Scottsdale Resort and Spa at Gainey Ranch, and are pleased that the project continues to be both on time and on budget. In addition to our work in Scottsdale, in the first quarter, we completed the renovation of all meeting rooms at the Waldorf Astoria Atlanta Buckhead, a complete renovation and reconcepting of the restaurant at Bohemian Hotel Savannah, and a renovation of ELWAY’S Downtown Steakhouse at the Ritz-Carlton Denver. Planned renovations will take place in our Texas hotels during the seasonally slower summer months, including renovation of the restaurant and creation of an M-Club at Marriott Woodlands Waterway, renovation of the lobbies at the Wesson Oaks and Gallery of Houston, relocation of the fitness facility, and addition of a concierge lounge at the Wesson Oaks Houston, and continuing with approximately $20 million of infrastructure and sustainability projects across the portfolio as the year progresses. We are excited about the work our in-house project management team has completed, and even more excited about the projects that we have underway and in various stages of planning in 2024. With that, I will turn the call over to Atish.
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Atish Shah: Thank you, Barry. I will provide an update on two items, our balance sheet and our 2024 guidance. As to our balance sheet, we continue to have a strong balance sheet with ample liquidity. With no near-term maturities, a significant unencumbered asset base, and limited interest rate exposure, balance sheet continues to be a point of strength for the company. At quarter end, our leverage ratio was 5.2 times trailing 12 months net debt to EBITDA. As a reminder, our long-term target is a leverage ratio in the low 3 times to low 4 times range. We expect to move closer to that range in 2025 as we see the Scottsdale project ramp up post-renovation. To wrap up the balance sheet discussion, note that we repurchased a small amount of stock, about $6 million during the quarter. As you may recall, during 2023, we repurchased about 9% of our outstanding shares at about $12.75 per share. While we continue to consider our stock at the current price level to be an attractive use of our capital, we are balancing that with a few other factors, including liquidity in our stock, current-year CapEx outlays, and reducing our leverage target — our leverage ratio to be closer to our target range. Next, I’ll turn to our 2024 guidance. At the midpoint, our current full year guidance is in line with the guidance we provided at the end of February. While the first quarter came in better than expected, given that we are still early in the year and visibility of the back half of the year continues to be limited, we are maintaining guidance midpoints at prior levels. What has increased is our level of confidence in achieving full year guidance, and we will continue to monitor recent trends to see if the broad momentum over the last several weeks continues over the months ahead. With regard to our first quarter results, adjusted EBITDAre benefited from nearly $1 million of business interruption insurance proceeds that were recognized a quarter earlier than expected. As for our full year RevPAR, we continue to expect same-property RevPAR to increase 3.5% at the midpoint of the range, or 4% exclusive of Scottsdale. Looking at our business by demand segment on the group side and excluding Scottsdale, our group room revenue case for the second through fourth quarters is up nearly 4%. Of the 4% increase, 90% is driven by rate. About 25% of expected group room nights for the balance of the year have yet to be booked. In terms of booking activity or group production, it continues to increase as group rooms revenue booked in the first quarter for future quarters in the year was ahead of that booked during the first quarter of 2023 for the comparable period. As to leisure demand, as we look ahead to the summer, our operators are expecting robust demand, including more international travelers as well as more US travelers staying domestic when compared to trends observed last year. Finally, as to corporate transient demand, during the first quarter, we benefited from higher-than-expected midweek business transient demand, particularly at some of our larger hotels, and we expect that to continue. As to the expense picture, we continue to experience moderation in expense pressure relative to last year. For the second to fourth quarter, we expect Hotel EBITDA margin to decrease about 25 basis points. Excluding the impact of Scottsdale, we expect Hotel EBITDA margin for the second to fourth quarters to increase — excuse me, decrease about 15 basis points. As to adjusted EBITDAre, the midpoint of our full year range is $254 million. By quarter, the second quarter weighting is slightly ahead of the weighting we had in the first quarter or in the approximate mid-to-high 20% range. For the third quarter, we expect to earn about 20% of full year adjusted EBITDAre. In the final quarter of the year, we expect to earn nearly 30% of full year adjusted EBITDAre. This weighting reflects a slightly lower mix of earnings in the second quarter versus prior guidance. One of the drivers of this change is higher-than-expected renovation disruption in the second quarter. As reflected in last night’s release, we now expect renovation disruption for the year to be $16 million versus the $14 million we had previously expected. This change is due to the fine-tuning of construction timing at Scottsdale, and it’s more impactful in the second quarter. As we get into the second half of 2024, the comps become easier, and our renovation activity turns into a comparative tailwind as the year progresses. And finally, our adjusted FFO per diluted share guidance is unchanged with the midpoint at $1.69, which reflects about 9% growth in adjusted FFO per diluted share versus 2023. To wrap up, during the first quarter, our portfolio benefited from stronger-than-expected business transient and Group demand, particularly in some of our larger hotels. We are hopeful that this broad momentum continues into the remainder of the year. Our focus on the ramp-up of consumer properties, certain markets which are still in recovery, as well as successful execution on Scottsdale continues, and we expect that the setup for 2025 and beyond will continue to improve in the months ahead. And with that, we’ll turn the call back over to begin our Q&A session.
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Operator: [Operator Instructions] Our first question comes from Michael Bellisario of Baird. Your line is now open. Please go ahead.
Michael Bellisario: Thanks, everyone. Good morning.
Marcel Verbaas: Good morning, Mike.
Michael Bellisario: First question is probably for Barry here. The slide deck references cooling leisure demand in Nashville. Not totally surprising given the recent data, but you only mentioned Napa and I believe Savannah in your prepared remarks, so maybe help us understand what you’re seeing at the W, how that hotel performed in the quarter relative to your expectations, and the broader market.
Barry Bloom: Yes, sure. When we think about — when we generally talk about transient hotels, those are generally our smaller leisure-focused hotels, which is why the commentary on Napa and Savannah. Obviously, W Nashville is a very diversified demand base, and one that we’ve talked about historically is where we’ve really refocused the hotel and trying to achieve better penetration at corporate transient and Group segments, which it has done. The overall backdrop in Nashville, particularly with the number of luxury hotels that have been unmarked the last few years, resulted in both in the market and at W Nashville a little softness in leisure demand during the first quarter, but leisure demand is not the primary driver in the first quarter in Nashville, really never has been. So, we’ll have a much better indication as we move through Q2 and Q3, which are much, much stronger months in the market overall and have historically been much stronger periods of time for the W Nashville as well.
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Michael Bellisario: Got it. Understood. And then a bigger picture question for Marcel on capital allocation and strategies. Remind us how you and the Board are thinking about value creation for shareholders, what metrics are you focused on and sort of what are the risk-adjusted returns that you’re targeting when looking at investment opportunities? That’s all from me. Thank you.
Marcel Verbaas: Sure. Thanks, Michael. Atish has obviously spoken about this in his remarks too, and we continue to look at capital allocation as needing to be balanced between the various levers that we can pull to drive value for shareholders. Obviously last year, we talked quite a bit about not seeing a lot of acquisition opportunities and being very focused on value that we saw in potential share buybacks, which we obviously were very active in last year. And also, as Atish pointed out, we still believe that there is good value in the stock where we are today, but we are balancing that with the needs that we have with cash outlays for CapEx, and clearly Scottsdale is a big part of that for this year, and also wanting to maintain a good amount of dry powder going forward for potential acquisitions. So, clearly, as we kind of work through the main expenditures we have this year, we also are keeping a very close eye on what’s out there in the acquisition markets. Clearly, you haven’t seen us be active on that side yet here in recent times, but we do feel like the pipeline is building a little bit better now where there may be some opportunities for us here going forward. Clearly, interest rates are higher than where they were previously, as everyone knows, so that’s probably moved up the requirements a little bit on what kind of returns we’re looking for, but we’re certainly looking for that un-levered double-digit type returns. And obviously, to the extent that there’s more risk and there is more renovation risk or any other risk related to that, you’re going to look for some better returns to get to those risk-adjusted returns in that range.
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Operator: Thank you. Our next question comes from Ari Klein of BMO Capital Markets. Your line is now open. Please go ahead.
Ari Klein: Thanks, and good morning. Maybe just on the high Scottsdale, I’m curious what you’re seeing from a Group booking standpoint as you look beyond this year. What kind of uplifts are you seeing on the rate side? Maybe if we can talk to you pace at that asset, as I acknowledge that it’s still pretty early.
Barry Bloom: Yeah. Thanks, Ari, for the question, and it’s a good question. It’s one that the data moves so much when you’re looking at really kind of small numbers, if you will, and different booking patterns as we look into ‘25. We by — in another quarter or two, obviously, we’ll have a much, much better sense of how that’s really shaping up for 2025. Rate is up significantly. Booking (NASDAQ:) pace in terms of room nights is where we expected it to be, recognizing that a lot of Groups, particularly higher-end Groups, they’re waiting until closer to the finish line and looking to see the product before they really start putting business on the books for the very latter part of ’24 when we’ll have a lot of product available for them, and then into ’25 as well.
Ari Klein: Got it. Thanks. And then, Atish, I think you mentioned expectations for inbound international travel recovery, maybe helping you here a bit in the summer. I’m curious how those views may have changed or if they’ve changed at all given the US dollar trend.
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Atish Shah: Yeah. That’s a good question, Ari. I think there are certain markets which are still very significantly off where they were in pre-COVID in terms of international inbound. We think about some of the markets in Asia, some of the European and Latin American markets that might come into a market like Orlando. So, I think even despite kind of the move on the currency side, there’s still sentiment that there’s a lot more potential for inbound business. And certainly, if you look at the lift going into markets like San Francisco, that has increased quite a bit, as well as international lifts coming into a market like Orlando. International is not a huge driver of our portfolio, but certainly in those two markets, we do see some international business that comes into the market. So, that’s just another point around confidence in leisure business this summer.
Ari Klein: Thanks. And if I could just go back to the Hyatt Scottsdale, can you just talk a little bit about the cadence of the, yeah, I think you took up the EBITDA impact for the year. Just the cadence of that, how things may be shifted around impact first half of the year versus second half of the year and whatnot.
Atish Shah: Yeah, sure. I mean, the $16 million by quarter, maybe we’ll just give you that. So, $4 million in the first quarter, $7 million in the second, $4 million in the third, and $1 million in the last quarter of the year. So, that’s how you get to the $16 million. And as we had mentioned, the increase from $14 million to $16 million really is more oriented around the second quarter. Year over year, so it’s slightly different. Obviously, we had $12 million of disruption last year. How that shook out by quarter was no disruption in the first quarter, $1 million of disruption in the second quarter, $5 million in the third quarter, and $6 million in the fourth quarter. So, the year-over-year change is obviously $4 million, more disruption this year than last year at Gainey Ranch. But you can just subtract those two and you get to how that $4 million comes in. Obviously, $10 million more disruption in the first half and $6 million of a tailwind in the second half, really more in the fourth quarter than in the third. So, hopefully that helps.
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Ari Klein: Yeah. Thanks. Appreciate the color.
Operator: Thank you. Our next question comes from Dori Kesten of Wells Fargo. Your line is now open. Please go ahead.
Dori Kesten: Thanks. Good morning. On the W Nashville, has your outlook for the remainder of the year shifted at all within the updated guidance? And then I’m just wondering if you finalized plans for the new F&B space there?
Barry Bloom: Yeah. No. Our outlook and how we perform there in first quarter and what we’re seeing through the rest of the year is right in line with our expectations coming into the year. Look, again, we feel very good about the market and particularly good about the property and the ability they’ve had to grow the segments where they needed to. And we’ve also had, as we enjoyed in the first quarter, I think, some better focus on the middle of P&L where we’re driving a little more EBITDA and more EBITDA margin than we might have expected coming into the year. In terms of food and beverage, we’ve not outlined a plan for a long-term replacement for the Dutch, which is the three-meal restaurant, which left in the very beginning of this year. We’re still looking at a number of different concepts, but the property has performed acceptably, certainly, and to our expectation with the unbranded restaurant, which has been very successful for breakfast and lunch and is working on strategies while we figure out a long-term strategy for lunch and dinner.
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Dori Kesten: Okay. And then just back on Gainey Ranch, at what point do you bring in the majority of meeting planners to show them the renovated space? I’m just — I’m trying to determine like in what time frame you’d see a real solidification of your 25 rooms on the book.
Barry Bloom: Yes, I mean, obviously, we’re actively in the market. The sales teams are doing site tours every day. There’s just not a lot for the guests to see, particularly in terms of the expansion of the meeting space, although we’re now at a point where you can actually see the structure. So, that’s actually a huge plus as opposed to cleared land next to the existing ballroom facility. So, we’ve actually seen a pretty good uptick in terms of number of site visits and things like that at the encouragement of the hotel. So, I guess the simple answer is, there is no particular point in time, and we had a lot of experiences when we did the ballroom expansion at Grand Cypress. There’s no particularly mark in time when there’s a huge flood of business. It’s a continual effort and focus on getting people excited about the product. There are some people that simply won’t book the product until it’s done, but that’s not where the focus is, and that would be business to be out in the latter half of ’25 and then ’26 and ’27 in a property like this.
Marcel Verbaas: Yeah, on the positive side, as we talk about the various components that we’re doing there, there’s obviously continuous progress that we’re making. I mean, when someone goes to the property now, they can see the newer rooms because we have a good number of our rooms that are completed. They can see the pool complex, which, like I said, is spectacular at this point. And they can see the true progress, like Barry just pointed out, and what’s going on with the meeting space. The biggest challenge here for the next two quarters, really the second quarter and the third quarter, is working our way through these public spaces and the lobby and all the F&B offerings, and that’s obviously very impactful to the guest experience. So as we get done with this, which really remains on target to be done by the end of the third quarter. We’re getting into the fourth quarter with an essentially fully renovated property with the exception of finishing up the meeting spaces and then some of the infrastructure and external facade work that will still be going on. So it’s going to be a point here kind of towards the end of the third quarter where people will be able to come into the property and get a real good sense of what the final product is going to look like.
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Dori Kesten: Okay. Great. Thanks so much.
Operator: Thank you. Our next question comes from Austin Wurschmidt of KeyBanc Capital Markets. Your line is now open. Please go ahead.
Austin Wurschmidt: Great. Thanks, and good morning, everybody. Wanted to hit a little bit on some of the markets that have been slower to recover, and I’m just curious if these regions and markets like the Bay Area and Portland, to name a couple, are seeing a more durable recovery at this point in demand, and how are booking pace, Group and/or transient continuing to ramp as you look out through the rest of the year?
Barry Bloom: Yeah, thanks, Austin. Appreciate the question. I think if you look at each of those markets and the growth we achieved in those in Q1, so Santa Clara and Portland in particular, too, I think you referenced in two of our, I think, really good success stories for the quarter, not only show obviously the gap that we’ve now talked about in getting back to stabilized levels, but that we’re achieving those significantly. And we’re seeing continued growth. Certainly in terms of Santa Clara, the tech business has been — is the biggest piece that obviously has come back. There are some particular demand generators and specific companies in our backyard there that have really increased their amount of travel by individual travelers, their amount of Group travel. We’ve never really talked about booking pace kind of by property or by market, but suffice it to say that we continue to indicate those markets not only have an opportunity for recovery, but they’re doing substantial — driving substantial improvement toward that recovery.
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Austin Wurschmidt: So what do you think you need to see to really capture the occupancy point differential that you highlighted in your prepared remarks? What’s sort of that next leg up to keep the momentum going?
Barry Bloom: I mean, I think, we certainly think the momentum is going and we’re seeing obviously quarter by quarter we’re seeing across the portfolio that corporate transient demand, both in the smaller companies and medium-sized companies, which are generally more recovered, and from the larger companies that are less recovered, every quarter we’re seeing that business move up. In terms of the dynamic of Mondays and Thursday nights having a bigger gap than Tuesdays and Wednesdays to pre-COVID, that’s just a — we view that also just as a matter of time, and that ultimately, in part travel patterns will change when people realize they may not be able to get rooms on Tuesday and Wednesday nights. If you’re coming to do a business trip in any market, whether it’s a strong market, a weak market, most of our markets are doing unbelievably well on Tuesdays and — Tuesday and Wednesday nights, and that there’s opportunity for us to drive rate as that business compresses and that there’s opportunity and will ultimately, in part, shift business back out to Mondays and Thursdays.
Marcel Verbaas: And what’s particularly been encouraging as far as kind of going on that path, like, you’re describing as far as kind of narrowing the gap in occupancy is how much of our RevPAR growth in the first quarter was occupancy-driven obviously versus rate, really all of it essentially and we’re seeing that continue with our April results. So, most of our growth that we saw in the April RevPAR number that we quoted was really driven by occupancy as well.
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Austin Wurschmidt: Yeah, that’s really helpful. And then just last one for me, maybe for Atish, Can you provide some additional detail around your comment about sort of fine-tuning the construction timing and what’s really accounting for the additional disruption now embedded in, it sounds like second quarter, in particular, from Hyatt Regency Scottsdale, I mean, was it pulling forward some room renovation or just performance in the market that’s impacting that that’s creating some additional disruption? Any detail would be helpful. Thanks.
Marcel Verbaas: Yeah, sure. Awesome. This is Marcel. I’ll actually answer that for you. So, we are obviously very, very focused on making sure that this project gets done on the timeline that we’ve outlined and that we want to make sure we hit. So, in order to feel as good as possible about getting all these components done by the timeframes that we’ve talked about, we decided to pull forward into the second quarter — a little bit earlier in the second quarter, some of the renovations that we’re doing on the public spaces, particularly, so lobby FB& spaces, and that is pretty impactful to the guest experience and will impact a little bit more on the leisure side, particularly than what we initially had projected. So, that’s really the main driver between I guess, it’s really making sure that we hit these timelines that we get these projects done specifically on the times we talked about. And having some more comfort around pulling that forward a little bit to start for those particular components.
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Austin Wurschmidt: Understood. Appreciate the detail.
Operator: Thank you. Our next question comes from Tyler Batory from Oppenheimer. Your line is now open. Please go ahead.
Unidentified Analyst: Thank you. Good morning. This is Jonathan on for Tyler. Thanks for taking my questions and congrats on the quarter. Most of my questions have been answered, but maybe one for Barry. You noted the discrepancy between large corporate and small mid accounts. I’m curious how you think about that gap closing and large corporates returning to maybe pre-COVID levels.
Barry Bloom: Yeah, I mean, as I said in part response to Austin’s question, we’re certainly seeing that recover and the larger accounts are improving quarter-over-quarter, which obviously we think is a positive. I think it’s a little hard to look — to think about when they come closer to closing the gap to back to pre-COVID levels. But again, I think some of that has to do with just business expanding and that people are becoming seemingly more willing to travel on the Monday and Thursday nights or at least the Monday nights in addition to Tuesdays and Wednesdays. So, that’s certainly in part of what’s going to close the gap. And I think just as more people get back to more normalized patterns and are making more traditional business travel, we think that’s coming in. And we don’t interface directly with the big four accounting firms or the big three consulting firms or the Fortune 100 companies, which really makes up kind of that pool as we analyze it. But all of our operators tell us that people want to be on the road more. They want to be out. They want to earn their points. They want to meet with customers. They want to meet with their own internal teams. So again, we think it’s a time and matter of time issue, not whether demand ultimately comes back or not.
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Unidentified Analyst: Okay. Great. Very helpful. That’s all for me. Thank you.
Operator: [Operator Instructions] Our next question comes from Bill Crow or Raymond James. Your line is now open. Please go ahead.
Bill Crow: Yeah, thanks. Good morning, guys. Barry, one for you. I think you all cited weakness in leisure demand in a couple of markets, which sounds isolated. But then, the peers have also identified one or two markets each where they’re seeing some weakness in leisure demand. And I’m just — leaning into your experience, what do you think the odds are that a quarter or two from now we’re talking about more challenges in the leisure space than less challenges, I guess, is a way to think about it.
Barry Bloom: I guess when I think about as it relates to our portfolio and the markets we’re in that drive leisure business in the larger hotels, right, so, I think — really think about it two ways. One, larger hotels and then our smaller market, leisure-driven hotels. But when we think certainly near term and midterm about Orlando, Phoenix, Scottsdale, Aviara, that we think those properties all have really good attributes to them that will continue to drive performance and are not seeing anything that resembles softness in leisure in those higher-end resort properties. So — and we feel good about that. Again, they’re not positioned at the super ultra-luxury level. They’re positioned at a level that guests really like and want to visit those resorts. And if there’s sufficient demand in those markets, will keep driving those. I think the — we’re certainly seeing normalization of demand in our leisure markets like Key West and Savannah and Northern California being Napa in our case, but nothing that is truly problematic in terms of the leisure downturn. Napa, for example, had another very, very tough quarter in terms of weather, which was no doubt part of the challenge there. But I think as we look across the portfolio, our assets are really desirable within their markets. We’ve not seen leisure — we’ve seen leisure, I mean, we use the word normalize really for a reason, that it’s a normalization. The part that we’re also particularly continuing to be enthusiastic about is that in general, we’ve been able to hold to the rate levels that we started to achieve during COVID. Have they softened a little bit in some markets? Yeah, sure they have, but the guest has really been retrained and reaccustomed to paying a much, much higher rate for their leisure stays.
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Bill Crow: Okay. All right. I appreciate that. We’re just — we’re trying to dissect as much information on the consumer as we can. There’s a lot of uncertainty out there. So, I appreciate your commentary. Thank you.
Operator: Thank you. At this time, we currently have no further questions, so I’ll hand back to Marcel Verbaas for any further remarks.
Marcel Verbaas: Thanks, Alex, and thanks, everyone, for joining us today. We’re certainly pleased with the continued momentum that we’re seeing within our portfolio and in our markets, and we look forward to seeing many of you at May REIT or any other conferences coming up or meeting opportunities. So thanks again for joining us today and look forward to speaking to you next.
Operator: Thank you for joining today’s call. You may now disconnect your lines.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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<title>Nigeria poised to outlaw P2P crypto trading over national security concerns</title>
<link>https://americanceo.club/nigeria-poised-to-outlaw-p2p-crypto-trading-over-national-security-concerns/</link>
<comments>https://americanceo.club/nigeria-poised-to-outlaw-p2p-crypto-trading-over-national-security-concerns/#respond</comments>
<dc:creator><![CDATA[News Room]]></dc:creator>
<pubDate>Sat, 04 May 2024 01:55:50 +0000</pubDate>
<category><![CDATA[Crypto]]></category>
<category><![CDATA[concerns]]></category>
<category><![CDATA[National]]></category>
<category><![CDATA[Nigeria]]></category>
<category><![CDATA[outlaw]]></category>
<category><![CDATA[P2P]]></category>
<category><![CDATA[poised]]></category>
<category><![CDATA[Security]]></category>
<category><![CDATA[trading]]></category>
<guid isPermaLink="false">https://americanceo.club/nigeria-poised-to-outlaw-p2p-crypto-trading-over-national-security-concerns/</guid>
<description><![CDATA[Nigeria’s National Security Adviser (NSA) is set to label crypto trading as a national security threat, signaling an impending crackdown on peer-to-peer (P2P) crypto transactions, according to local media reports and CryptoSlate sources. The move follows the decision of at least three major Nigerian fintech startups — Moniepoint, Paga, and Palmpay — to block accounts [...]
The post <a href="https://americanceo.club/nigeria-poised-to-outlaw-p2p-crypto-trading-over-national-security-concerns/">Nigeria poised to outlaw P2P crypto trading over national security concerns</a> appeared first on <a href="https://americanceo.club">American CEO Club</a>.
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<content:encoded><![CDATA[<div>


Nigeria’s National Security Adviser (NSA) is set to label crypto trading as a national security threat, signaling an impending crackdown on peer-to-peer (P2P) crypto transactions, according to local media reports and CryptoSlate sources.<hype-native placement="bd90f2efcd"></hype-native>

The move follows the decision of at least three major Nigerian fintech startups — Moniepoint, Paga, and Palmpay — to block accounts involved in crypto dealings and report such activities to law enforcement.
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According to Moniepoint CEO Tosin Eniolorunda, the NSA’s classification is expected to pave the way for new regulations banning P2P crypto trading, with an official announcement anticipated soon.
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This represents a notable shift in regulatory stance, particularly after the Bola Tinubu administration had previously shown a more lenient attitude toward crypto. In fact, in December 2023, the Central Bank of Nigeria lifted a two-year ban on crypto transactions, hinting at a more welcoming regulatory environment.
However, recent months have seen a reversal in this trend, with authorities blaming crypto speculators for exacerbating the volatility of the foreign exchange (FX) market. The proposed ban on P2P trading is based on the Central Bank’s assertion that crypto traders exploit this method to manipulate the Nigerian naira through pump-and-dump schemes.
Central Bank Governor Olayemi Cardoso alleged in February 2024 that Binance had facilitated $26 billion in untraceable transactions, leading to a crackdown on the exchange and the freezing of over 1,000 bank accounts linked to P2P transactions.
In a related development, four prominent fintech firms were recently directed to halt the opening of new customer accounts, though the source of this directive remains unclear.
Moniepoint’s CEO, Tosin Eniolorunda, confirmed that the move was at the behest of the NSA, who expressed concerns over the ease with which fintech platforms facilitate account openings, particularly Tier 3 accounts.
While a spokesperson for the NSA declined to provide further details, this development highlights the increasing scrutiny over the rapid proliferation of accounts facilitated by fintech startups. Traditional banks have long raised concerns that such accounts serve as conduits for illicit funds.
Responding to these concerns, the Central Bank amended its rules in December 2023, mandating fintech startups to verify the identities of all account holders by March 2024.
As Nigeria braces for further regulatory measures in the crypto space, the fate of P2P trading remains uncertain amid mounting national security concerns and evolving regulatory landscapes.

</div>
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