NAOS CEO Insights

CEO INSIGHTS – Week Ending 10 December 2021 By NAOS Asset Management

December 10, 2021

“Now it’s [the gaming industry] bigger than movies and music combined. It’s the largest entertainment form in the world. It’s growing and proliferating across the world, across so many different devices, and new markets” Frank Gibeau, CEO, Zynga Inc.

CEO INSIGHTS – Week Ending 10 December 2021 By NAOS Asset Management

“Now it’s [the gaming industry] bigger than movies and music combined. It’s the largest entertainment form in the world. It’s growing and proliferating across the world, across so many different devices, and new markets” Frank Gibeau, CEO, Zynga Inc.

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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Labour Markets

“I think recruitment and retention are every CEO’s focus at the moment. Finance, IT online and supply chain are tough markets to recruit in, so you want to retain your talent” Richard Murray, CEO, Premier Investments Ltd

“We’re going to see [upwards] pressure on wages. What’s important is, have we got economic growth to go with it?” Vicki Brady, CFO, Telstra Ltd

Workplace & Technology

“The traditional competitors that we would have in the war for talent for tech is changing. For example, we used to trade off employees between Seek and Carsales – and now it’s Bunnings. As everybody is digitising, everybody needs tech staff” Janelle Hopkins, CFO, REA Group

“I think it’s going to be something that we’re all going to grapple with over the next five to 10 years. How do we actually use modern technology, AI, etcetera, to assist us in running operations?” David Lamont, CFO, BHP Group Ltd

Travel

“I don’t think anybody knows yet how big, how much, but as you end up with these flexible work environments and that’s just going to create more travel opportunities. So, people are going to take mixed trips. They are going to do work away from home” Glenn Fogel, CEO, Booking Holdings Inc

Advertising

“I think we can remain cautiously optimistic [on industry conditions]. And with an election year in play, we can expect significant injections of ad spend in key industries and markets” Sally Kissane, CEO, Ogilvy Australia

“The year has ended strongly in terms of ad spend and I believe we will see that recovery continue into 2022. Economically there are so many positive signs despite the pandemic and the fact that we seem to be heading into year three [of COVID] with no end in sight” Mark Green, CEO, Accenture Interactive

Inflation

“Innovation is a really important lever for us as we absorb the inflationary impact” Chris Scherzinger, CEO, Weber Grill Inc

Regional Australia

“The evidence is clear that digital disruption wrought by international companies has had an irreversible and negative impact on regional Australia’s traditional media businesses, the level of local content created, and local media job opportunities” Ian Audsley, CEO, Prime Media Group Ltd

“The level of demand for looking at properties in regional Australia has been massive and through the roof, and completely structurally different to what we were previously seeing” Janelle Hopkins, CFO, REA Group

Domestic Economy

“There’s no reason to think that [this economic recovery] isn’t going to continue. There’s something like $60 billion of annual spending that would typically be spent on overseas tourism that is being seen in our economy here” Elliot Rusanow, CFO, Scentre Group

Payments & Lending

“Given the pace of change and those leading it, if we do not reform the current framework, it will be Silicon Valley that determines the future of our payments system” Josh Frydenberg, Treasurer, Federal Government

“If anything, the opportunity for consumer innovation around payments, and financial services is still very much in its nascency. So while there’s been a lot of growth, it’s still very early on” Anthony Eisen, CEO, Afterpay Ltd

”So if buy now pay later is a credit innovation, great. If people want to consume credit in a different way, we're perfectly fine with that. We don't think it hurts our business, we think it helps our business and there's innovation in the way credit is done” Vasant Prabhu, CFO, Visa Inc.

AdBlue / Diesel Exhaust Fluid Supply Crisis

“We’ve got a freight supply chain under extreme pressure coming out of Covid, and about 50 per cent [of Australia’s truck fleet] runs on AdBlue, so it’s a massive issue, it’s half the fleet, so what happens then?” Warren Clark, CEO, National Road Transport Association

Entertainment & Leisure

“Now it’s [the gaming industry] bigger than movies and music combined. It’s the largest entertainment form in the world. It’s growing and proliferating across the world, across so many different devices, and new markets” Frank Gibeau, CEO, Zynga Inc.

Social Media

“So customers seek out Twitter every day, all around the world, to find out what's happening. As events happen around the world, more and more customers come to our service” Parag Agrawal, CEO, Twitter Inc

Health & Beauty

“The beauty category is recovering” Dave Kimbell, CEO, Ulta Beauty Inc [international beauty salon retail chain]

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.