NAOS CEO Insights

CEO INSIGHTS – Week Ending 11 December 2020 By NAOS Asset Management

December 11, 2020

“We do expect, and I think retailers would agree that a sustained view of in-home eating, whether that is because people are more slowly returning to normal life or the fact that more people are going to be working from home or this dynamic of more in-home socialisation which has been driving certain segments of snacking at a very aggressive rate” Mark Clouse, CEO, Campbell Soup Company

CEO INSIGHTS – Week Ending 11 December 2020 By NAOS Asset Management

“We do expect, and I think retailers would agree that a sustained view of in-home eating, whether that is because people are more slowly returning to normal life or the fact that more people are going to be working from home or this dynamic of more in-home socialisation which has been driving certain segments of snacking at a very aggressive rate” Mark Clouse, CEO, Campbell Soup Company


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 & Entertainment

“I think that the demand [for gaming consoles] has been unbelievable…and we don't see any end of that in sight. So certainly, these are fabulous pieces of technology. The demand is terrific for it” George Sherman, CEO, GameStop Corp [world’s largest video game/entertainment software retailer]

“The global footprint for mobile [gamers] is vast. You're talking about 2.5 billion gamers and growing, with some of the fastest growth happening in Asia and emerging markets” Frank Gibeau, CEO, Zynga Inc [NASDAQ listed social/mobile game developer]

“We do not believe it [the streaming market] is a winner-takes-all market. We believe there's a place for a number of streaming services to be successful” Bob Bakish, CEO, ViacomCBS Inc [multinational film, TV & media conglomerate]

Food & Beverage

“We do expect, and I think retailers would agree that a sustained view of in-home eating, whether that is because people are more slowly returning to normal life or the fact that more people are going to be working from home or this dynamic of more in-home socialisation which has been driving certain segments of snacking at a very aggressive rate” Mark Clouse, CEO, Campbell Soup Company

“I think some of those changes to consumer behaviour are as a result of cooking more meals at home. There are still a lot of people, even with restrictions lifted, working from home, which means lunches and breakfasts and other meals are made at home and it is likely to carry on” Jeff Adams, CEO, Metcash Ltd

Travel & Leisure

“Consumers are dying to travel, their banking points, [credit card] attrition is at an all-time low” Steve Squeri, CEO, American Express Company

“We're seeing an increase in our consumer travel bookings, not necessarily in our corporate bookings” Steve Squeri, CEO, American Express Company

“I can’t stress highly enough the demand for business travel. Now that borders have reopened, we’ve had a number of clients calling to say ‘we’ve got a lot of work to do before Christmas, seeing customers, seeing suppliers” Jamie Pherous, CEO, Corporate Travel Management Ltd

“In a sense, you could say the near-term has gotten a little bit worse because the virus statistics have gotten worse, but the medium and long-term has gotten a little bit better because the optimism around a vaccine is that much stronger” Arne Sorenson, CEO, Marriott International

Property

“While the rate of return to CBD offices in Sydney has stepped up, it is still less than half. Melbourne is starting its journey out of lockdown, while the return in other CBDs has stalled well below their pre-COVID levels” Ken Morrison, CEO, Property Council of Australia

Payments & Lending

“It is really pleasing to see the vast majority of our customers who accessed the banking relief package resuming repayments” George Frazis, CEO, Bank of Queensland Ltd

“Every single factor we use to set [loan loss] reserves has gotten better this quarter [versus] last quarter” Brian Moynihan, CEO, Bank of America Merrill Lynch

“There’s no question that things are better than people thought a few months ago” Jamie Dimon, CEO, JP Morgan Chase & Co

Financial Markets

“We're definitely seeing clients rethinking strategic asset allocation to satisfy return targets. We're clearly seeing a search for yield with increasing allocations to both private markets and high-risk fixed income assets” Gary Shedlin, CFO, BlackRock Inc [world’s largest asset manager]

“We are definitely seeing an increased awareness and incorporating ESG [environmental, social & governance] resilience can have a material financial impact on portfolios, and I think we're really at the beginning stages of a long-term reallocation of existing capital into sustainable strategies. But more importantly, real growth coming from new capital into these strategies” Gary Shedlin, CFO, BlackRock Inc [world’s largest asset manager]

Energy & Resources

“We believe that natural gas will continue to play an important role in providing energy and thereby supporting the further development of lower carbon, but intermittent renewable energy generation” Scott Wyatt, CEO, Viva Energy Group Ltd

Miscellaneous

“Our customers with new pets [puppies & kittens] are up nearly 40% on a year over year comparative basis. That is huge” Sumit Singh, CEO, Chewy Inc [world’s largest online pet retailer]

“While the pandemic has been a challenge for many small businesses, it's also spurred what The Economist Magazine calls a once-in-a-generation surge in start-ups. We expect that small businesses will lead the recovery just as they did after the Great Recession in 2009” Kirk Simpson, CEO, Wave Accounting [subsidiary of H&R Block Inc]

Industrials

“I think we’re really kind of at an inflection point right now where we’re seeing demand move [for equipment & machinery]. We would say there’s still a long runway of replacement demand as you look at the age of the fleet and those sorts of things, so we think we’re a ways off mid-cycle let alone peak” Jahmy Hindman, CTO, John Deere & Co

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.