NAOS CEO Insights



January 31, 2020

CEO INSIGHTS – Week Ending 31 January 2020 By NAOS Asset Management

“Last but not least, I just returned from Davos [World Economic Forum], where everyone was focused on sustainability, the world’s perspective on company performance continues to rapidly expand beyond financial. From where we are today, the importance of managing aspects such as the carbon footprint will massively increase” Christian Klein, Co-CEO, SAP SE

As part of the NAOS investment process, we pay particular attention to the comments made by company CEOs and business leaders in order to gain a greater understanding of the current investment environment and key trends that may be emerging. Below are quotes from the week which in our view detail some of the most important and prominent industry trends and economic factors impacting their businesses.  


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Environmental, Social & Governance

“Starting on July 1st in the U.S. and Europe, we’re not going to take a company public unless there’s at least one diverse board candidate, with a focus on women” David Solomon, CEO, Goldman Sachs Inc

Banking & Payments

“You listen to the conversation about Australian banks, you’d think they’ve gone down the toilet whereas if you’ve come from outside [the local baking industry], you’d give your right arm for what the Australian banks have” John McFarlane, Chairman, Westpac Banking Corporation

“We are seeing changes in demand in how customers want to pay” Matt Comyn, CEO, Commonwealth Bank of Australia

“So, I don't really look at this business as really mature. I look at this business as having a lot -- and I'm not just talking about our business. I'm talking about the card business in general. I think about this as a business that still has a lot of legs and a lot of growth.” Steve Squeri, CEO, American Express Company

Advertising & Media

“The latter part of 2019 was a challenge for the advertising industry as a whole. We are pleased that out-of-home maintained its position as one of the few growing media channels” Charmaine Moldrich, CEO, Outdoor Media Industry Association.

Domestic Retail

“Trading conditions have shown some improvement in FY2020 however continue to be inconsistent due to: subdued consumer confidence, our customers in many states being affected by bush fires and varied weather conditions, slow but improving housing conditions” ASX Announcement, Beacon Lighting Group Ltd

Global Retail

“It's [the appliance industry] an intense competitive environment” Marc Bitzer, CEO, Whirlpool Corp

“To summarize, in 2020 we will see less of an inflationary environment, but it's not completely gone and certainly not reversed” Jim Peters, CFO, Whirlpool Corp


“Innovation, new technology such as artificial intelligence, is changing how enterprise [big business] is run” Christian Klein, Co-CEO, SAP SE

US Economy

“The [US] economy is doing fine, 2020 just began but the consumer is strong. 70% of the GDP is the consumer and the balance sheet is in great shape. Housing is in short supply, confidence is way up and wages are up jobs are up” Jamie Dimon, CEO, JP Morgan Chase

“Strong demand for new homes is benefitting from favorable market dynamics including improved affordability in part due to low mortgage rates, high employment and consumer confidence, and a generally balanced inventory of new homes” Ryan Marshall, CEO, PulteGroup Inc [major US home construction company]

Chinese Economy

“Before we got to the last couple of weeks with the coronavirus really becoming the focus, we were looking at a sluggish start to China in first quarter really based on automotive, and the build rate's expected to be down mid-single digits and maybe even high single digits” Mike Roman, CEO, The 3M Company

Global Automotive

“The overall powersports [vehicle] market is expected to grow at a similar rate to last year in the low-single digit percent range with the off-road vehicle market growing, particularly side-by-sides and the motorcycle market continuing to decline” Mike Speetzen, CFO, Polaris Inc

“The resiliency of both the consumer and the broader economy remains a tailwind for the powersports [vehicle] industry and our 2020 plan anticipates those trends continuing” Scott Wine, CEO, Polaris Inc

"We expect these positive sales impacts to continue to be met by strong headwinds, including a declining U.S. new bike industry, a relative shift in rider preference towards segments in which we do not currently compete, but we'll enter by the end of this year, and a marketplace crowded with highly competitive promotions, incentives and discounts." John Olin, CFO, Harley-Davidson Inc

Food & Beverage

“Recent drought, heat and fires in Australia have created some likely challenges with respect to the cost of the 2020 Australian vintage” Michael Clarke, CEO, Treasury Wine Estates Ltd

“In the US, wine suppliers are trying to move surplus wine across the market at lower prices, resulting in an accelerated growth of private label” Michael Clarke, CEO, Treasury Wine Estates Ltd

Printing & Manufacturing

“The printing industry is decades overdue for consolidation, and the first-mover will have a significant advantage” John Visentin, CEO, Xerox Holdings Corp

“We are developing what is likely to be the industry’s first additive liquid metal printer. In a world that’s on-demand, now manufacturing can be too. With this technology, manufacturers will be able to make parts from start to finish in hours instead of days, without sacrificing quality or strength” John Visentin, CEO, Xerox Holdings Corp





Important information: This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. Certain economic, market or company information contained in this material may have been obtained from published sources prepared by third parties. Nothing contained herein should be construed as granting by implication or otherwise, any license or right to use such third party content without the written permission of the owner.


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