NAOS CEO Insights

CEO INSIGHTS – Week Ending 11 March 2022 By NAOS Asset Management

March 11, 2022

“What we've seen historically with fuel prices when they increase is you tend to see a little bit of consolidation with shopping trips. You'll tend to see fewer trips. You'll tend to see bigger baskets” Brett Biggs, CFO, Walmart Inc

CEO INSIGHTS – Week Ending 11 March 2022 By NAOS Asset Management

“What we've seen historically with fuel prices when they increase is you tend to see a little bit of consolidation with shopping trips. You'll tend to see fewer trips. You'll tend to see bigger baskets” Brett Biggs, CFO, Walmart 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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Insurance & Floods

“The only way to effect lasting improvements to natural disaster exposure in Australia is by increasing funding for public and private mitigation projects, improving building standards and quality, and making informed land-use planning decisions” Andrew Hall, CEO, Insurance Council of Australia

Energy Prices

“Hate to say it, but we need to increase oil and gas output immediately. Extraordinary times demand extraordinary measures. Obviously, this would negatively affect Tesla, but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil and gas exports” Elon Musk, CEO, Tesla Inc

Domestic Economy

“We have had a wake-up call in recent weeks of the importance of a country being able to defend itself” Gina Rinehart, Executive Chairman, Hancock Prospecting

“We’re going into a cycle of rising inflation and prices” Matt Comyn, CEO, Commonwealth Bank of Australia Ltd

Food & Beverage

“What we've seen historically with fuel prices when they increase is you tend to see a little bit of consolidation with shopping trips. You'll tend to see fewer trips. You'll tend to see bigger baskets” Brett Biggs, CFO, Walmart Inc

“Certainly, we're seeing food at home trends remain elevated by most estimates, it's around 52% of total food spend. That's above pre-COVID levels, and it seems to have plateaued there” Sandy Douglas, CEO, United Natural Foods Inc [major international wholesale food distributor]

“These figures [released results] also demonstrate the transformation that is taking place in the dairy category and the staying power of the plant-based dairy category, including oat milk” Toni Petersson, CEO, Oatly Inc [world’s largest plant based milk company]

Industrials

“Powering just four key manufacturing sectors – steel, cement, ammonia and alumina – with clean electricity and hydrogen will require Australia to more than double its total electricity generation” Ben Eade, CEO, Manufacturing Australia

Infrastructure & Construction

“It is very important on both sides of politics that skilled migration doesn’t become a battleground because if you look at the infrastructure and the other things Australia wants to do [build], we need to make sure...we are an attractive place to attract those resources” Scott Charlton, CEO, Transurban Ltd

Workplace & Employment

“I see it [flexible work] as a new canvas on which we can develop newer ways, which make people’s work life more fulfilling and their personal lives more fulfilling” Sundar Pichai, CEO, Alphabet Inc

“I think the most significant thing about the pandemic is that it took us through this one-way door, where previously we were working primarily in offices, and now we're all working primarily in screen” Drew Houston, CEO, Dropbox Inc

“The new jobs demand [in the US] is six times the labour market creation, so we’re going to see wages growing strongly there” Shemara Wikramanayake, CEO, Macquarie Group Ltd

Semiconductors

“The sense of shortages hasn't changed at all. We expect the current tight supply will last until March next year at the earliest” Hiroyuki Sato, CEO, Toshiba Electronic Devices & Storage Corp.

Books & Audio

“I've said this before, but when you think about it there is no reason why every smartphone in the world shouldn't have an audio service on it” Paul Vogel, CFO, Spotify Technology SA

“We're benefiting from this global good health of the book publishing industry” Arnaud de Puyfontaine, CEO, Vivendi SE [global mass media holding company]

Travel

“The [leisure] market follows slightly behind the corporate market and the SME market, and the SME market for us has dramatically moved in the last three weeks” Alan Joyce, CEO, Qantas Airways Ltd

“Recovery around the world has largely been driven by traveller confidence and depending on how the situation evolves in the Ukraine, could that have an impact on traveller confidence to Europe? Of course.” Anthony Capuano, CEO, Marriott International, Inc

E-Commerce

“We're all getting more Amazon boxes than we even were two years ago. So, truck drivers are in high demand” Devina Rankin, CFO, Waste Management Inc [world’s biggest waste management company]

Sport & Lifestyle

“Our industry is marked by five consumer trends - athleisure, betterment, digital, sustainability, and premiumisation. All these five trends even accelerated through the pandemic and make the sporting goods industry a highly attractive one to be in” Kasper Rorsted, CEO, adidas AG

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.