NAOS CEO Insights

CEO INSIGHTS – Week Ending 05 April 2019 By NAOS Asset Management

April 9, 2019

“During the 2020s we will start living in a world where virtually everything that can be connected will be connected via 5G." Andy Penn, CEO, Telstra Ltd

CEO INSIGHTS – Week Ending 05 April 2019 By NAOS Asset Management

“During the 2020s we will start living in a world where virtually everything that can be connected will be connected via 5G."
Andy Penn, CEO, Telstra Ltd
 
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.
 

Global Retail

"There seems to be more uncertainty in the market and that always impacts the consumer in discretionary categories like apparel."
Manny Chirico, CEO, PVH Corp [Global Clothing Company]
 
"We have had the fastest [online] take-up rate than any other IKEA country."
Jan Gardberg, CEO, IKEA Australia
 
"The pharmacy market is very challenging right now and we are seeing similar trends through our competitors."
James Kehoe, CFO, Walgreens Boots Alliance Inc
 
Supermarkets
 
"We're seeing significant input price increases as a result of the drought – wheat and barley prices have doubled over 2017 and 2018, milk production is down and farm-gate prices are rising. The currency is down so imported ingredients are going up in price, and some energy prices have doubled or tripled, so there are significant cost increases on the back of six or seven years of retail price deflation."
Tanya Barden, CEO, Australian Food and Grocery Council
 
Automotive
 
“I think [the general car sales market] has dropped about 7% lately, but we don’t see our Maserati business dropping at all." 
Neville Crichton, CEO, Ateco Group
 
"We are seeing a cautious consumer approach at the moment, and this is not surprising given the number of economic headwinds in the Australian market."
Tony Weber, CEO, FCAI [Federal Chamber of Automotive Industries]
 
Telecommunication & Technology
 
 “During the 2020s we will start living in a world where virtually everything that can be connected will be connected via 5G."
Andy Penn, CEO, Telstra Ltd
 
"There is a clear pull for robotics capability across many sectors - well beyond mining. But despite this demand, Australia still trails other leading industrial powers in adoption of robotics and autonomy."
Rag Udd, VP Technology Global Transformation, BHP
 
“With the vast volumes of content uploaded to the internet every second, this is a highly complex problem that requires discussion with the technology industry, legal experts, the media and civil society to get the solution right — that didn’t happen this week.”Sunita Bose, Managing Director, Digital Industry Group Inc. [In reference to Australia passing law to punish social media companies for violent posts]
 

Manufacturing

"Huggies nappy production will move [from Australia] to Kimberley Clark's facilities in Asia. We will continue to locally manufacture the Kleenex, VIVA and a professional range of products from Millicent in South Australia."
Statement from Kimberley-Clark
 
Domestic Economy
 
"The stronger labour market has led to some pick-up in wages growth, which is a welcome development."
Philip Lowe, Governor, RBA
 
"The demand for credit by investors in the housing market has slowed noticeably as the dynamics of the housing market have changed."
Philip Lowe, Governor, RBA
 
Global Economy
 
"We had this synchronized acceleration of growth a couple of years ago. Now it is synchronized deceleration and a slowing momentum across the spectrum.”
Christine Lagarde, CEO, International Monetary Fund
 
"Given those are two giants currently, if you have that kind of negative impact [US/China tarrif increases] on both, it would weigh heavily on the global economy and would be bad."
Christine Lagarde, CEO, International Monetary Fund
 
Agriculture
 
"Combined with significant, widespread rainfall and more forecast over some major cattle producing areas of the country, restocker buyers have returned to the saleyards to compete with processor and feedlot buyers who were previously dominating purchases which is driving cattle prices higher."
Statement from Meat & Livestock Australia
 
Oil & Gas
 
"You might find the other way, that China has learnt through the current issues with the US that diversity of supply [of LNG] is extremely important - whether that is geopolitical risk or environmental risk."
Peter Coleman, CEO, Woodside Petroleum Ltd
 
“In the last 10 years, our demand for liquid fuel has grown by 1.5 per cent each year — marginally more than our population growth. This rate of growth is high — around three times faster than the United States and Canada.”
Interim Report on Australian Fuel Security Review
 
Alcohol
 
"The specialty malt, whisky and craft beer markets which MaltCo [Graincorp spinoff company] services are experiencing substantial growth."
Graincorp Market Announcement
 
Consumer Behaviour
 
"We expect to have an Uber-like, Amazon-like experience when we go to a restaurant or go to a retail store or when we order products online."  
Brian Whipple, Chief Executive, Accenture Interactive
 

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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.