NAOS CEO Insights

CEO INSIGHTS – Week Ending 07 February 2020 By NAOS Asset Management

February 7, 2020

“The strength of the television advertising market for us is at a level that we have not seen for some time” Lachlan Murdoch, CEO, Fox Corporation

CEO INSIGHTS – Week Ending 07 February 2020 By NAOS Asset Management

“The strength of the television advertising market for us is at a level that we have not seen for some time” Lachlan Murdoch, CEO, Fox Corporation


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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Media & Advertising

“So first off we're very pleased with the overall growth of podcasting with 200% year-over-year growth in engagement. And that's a global phenomenon. It’s not just the U.S.” Daniel Ek, CEO, Spotify Technology

“Podcast users not only are more engaged overall but because of that engagement they're also listening to more music. So it's really just a very, very healthy user trend that we're seeing” Daniel Ek, CEO, Spotify Technology

Environmental, Social & Governance

“When you think about becoming climate positive and water positive and waste positive, that is over the next few decades going to really redefine Starbucks...through the research, look, our customers want this. 36% of the world’s population is Gen Z. And this is what they want” Kevin Johnson, CEO, Starbucks Corporation

“Our opportunities continue to strengthen, as governments and private clients in our markets further prioritise social and economic infrastructure projects to support the growth in urbanisation and respond to environmental challenges globally” Fernandez Verdes, Executive Chairman, CIMIC Group Ltd

Construction

“In non-residential construction, we anticipate lower 2020 end user demand” James Umpleby, CEO, Caterpillar Inc

Energy & Resources

“Depressed margins are driven by excess capacity, which will be a short-term impact particularly if industry pulls investments back significantly, which, by the way we are beginning to see” Darren Woods, CEO, Exxon Mobil Corp

“In resource industries, we continue to see strong quoting activity in mining as most commodities remain at investable levels” James Umpleby, CEO, Caterpillar Inc

Domestic Economy

“Due to both global and domestic factors, it is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target” Market Statement, Reserve Bank of Australia

Retail

“The market demand in Australia continued to decline.” Jonas Samuelson, CEO, AB Electrolux

Domestic Housing

“We also continued to see a recovery in consumer confidence in the housing market across all major capital cities except Perth” Duncan West, CEO, Genworth Mortgage Insurance Australia Ltd

“Housing improvement is certainly helping to improves our sales from the previous quarter” Anthony Scali, CEO, Nick Scali Ltd

 “Key indicators show that the Australian property market is recovering" Owen Wilson, CEO, REA Group

Global Economy

“On the macroeconomic environment, consumer spending remains relatively healthy, and we expect this to continue in 2020” Ajay Banga, CEO, MasterCard Inc

“While there are perhaps fewer indications of a broader base recession today, there remains several challenging and potentially fast-changing dynamics that create uncertainty in the macro [environment] and caution in our short cycle business outlook” Greg Lewis, CFO, Honeywell International

Global Employment

“Our assessment [is] that the overall economic outlook reflects a slow growth environment, where labor markets are strong and unemployment low overall, but they're not evenly distributed across regions and industries” Jonas Prising, CEO, ManpowerGroup Inc [major staffing multinational]

“A survey of 25,000 employers and 14,000 workers globally, which is showing record high talent shortages across over 40 countries. Globally, 54% of employers are struggling to find the talent they need, almost double what it was a decade ago” Jonas Prising, CEO, ManpowerGroup Inc [major staffing multinational]

Insurance

“Clients today face growing volatility and are confronting greater challenges than ever before” Greg Case, CEO, AON Insurance Plc

Food & Beverage

“Looking ahead into 2020, we anticipate that coronavirus will have an impact on wine sales, particularly to China, but at this stage it is difficult to predict the degree of that impact” Andreas Clark, CEO, Wine Australia [Australian Government industry authority]

Automotive

“There's a word of caution of course and that is that the full automated driving is taking longer. But what we do see is more and more higher levels of automation in vehicles” Taco Titulaer, CFO, TomTom NV

Health Supplements

"We are seeing an increase in demand for immunity products across many of our Asian markets.'' Statement from Blackmores

Tourism

“Recent events around the globe have impacted demand for some of our international itineraries, specifically the unprecedented bushfires in Australia and recent activities in Hong Kong and the Middle East are each having an outsized impact on revenue for the first quarter” Jason Liberty, CFO, Royal Caribbean Cruises

 
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.