NAOS CEO Insights

CEO INSIGHTS – Week Ending 12 March 2021 By NAOS Asset Management

March 12, 2021

“A growing global middle class and longer careers are driving lifelong and non-academic learning, particularly re[skilling] and upskilling, a trend that has been accelerated over the past year. This all adds up to a huge momentum in our industry” Andy Bird, CEO, Pearson Publishing PLC [multinational publishing & education company]

CEO INSIGHTS – Week Ending 12 March 2021 By NAOS Asset Management

“A growing global middle class and longer careers are driving lifelong and non-academic learning, particularly re[skilling] and upskilling, a trend that has been accelerated over the past year. This all adds up to a huge momentum in our industry” Andy Bird, CEO, Pearson Publishing PLC [multinational publishing & education 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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Education & Learning

“A growing global middle class and longer careers are driving lifelong and non-academic learning, particularly re[skilling] and upskilling, a trend that has been accelerated over the past year. This all adds up to a huge momentum in our industry” Andy Bird, CEO, Pearson Publishing PLC [multinational publishing & education company]

Workplace & Employment

“The gap between employment and learning is narrowing. Employers are becoming the universities of the future” Andy Bird, CEO, Pearson Publishing PLC [multinational publishing & education company]

“We don't see anybody just saying, okay, we're not sending you any new boxes…it is very steady in the business, if that someone sends us a box today, it will sit there for 15 years on average, that [tenure of box retention] has not changed during COVID, it didn't change before COVID” William Meaney, CEO, Iron Mountain Inc [multinational document storage company]

“What Australia lacks is not the [tech sector workforce] talent, just the experience. When you are creating global platforms, getting the experience level in the country is a real key enabler” Anthony Eisen, Co-CEO, Afterpay Ltd

“I think you’re going to see a large creation of an onshore-centre-type workforce in this country in places like Adelaide, where you can get a labour arbitrage. You’re going to see a distribution of the workforce differently. COVID allowed us to do that” Tom Seymour, CEO, PwC Australia

Financial Markets

“There is no question that digitisation and technology is expanding access, and the expansion of that access breeds more participation [in equity markets]” David Solomon, CEO, Goldman Sachs Inc

Mining & Resources

“We haven’t seen any change in our relationship with our customers. We are seeing ongoing strength in demand” Elizabeth Gaines, CEO, Fortescue Metals Group Ltd

Tourism & Travel

“Regions that haven’t been able to snare the ‘drive market’ are now down by about 40 per cent year-on-year for forward bookings, according to our 1200 members across the nation” Simon Westaway, Executive Director, Australian Industry Tourism Council

“Strong social distancing rules are still in place within the community; the vaccine rollout remains in its infant stages; our international border is still slammed shut, and local consumer confidence has been rocked by ongoing rolling state border closures. Until those four blockages are removed, the industry is in dire trouble” Simon McGrath, CEO, Accor Hotels Australia

Housing, Construction & Infrastructure

“Given the profile of work we now see in front of us, especially in the key civil infrastructure markets on the east coast and particularly in Queensland, and across various industries including rail, road, energy, water and defence, we are very confident that earnings will continue to grow at a strong rate in the coming years” Steven Boland, CEO, Acrow Formwork & Construction Services Ltd [national formwork/scaffolding company]

“The housing stimulus has created more demand than ever, it’s absolutely unprecedented. Builders are all fighting over a limited number of subcontractors and now are more worried about securing enough tradies to deliver the projects, than winning more work” Russ Stephens, CEO, Association of Professional Builders

Manufacturing

“The next really ‘holy grail’ in textiles will be recycling... I believe that for this industry, it's unacceptable that we don't have proper recycling solutions, something a bit more comparable towards what the paper, steel, aluminium [industries] have” Stefan Doboczky, CEO, The Lenzing Group [global textile manufacturer]

“Labour is very expensive in this country. You need to make premium products that people want to pay for and ensure that you are manufacturing in a smart way” Darren O’Brien, CEO, Mondelez Australia [world’s 2nd largest snack food company]

Transport & Logistics

“I don’t want to talk about hearsay or the feedback we get, but I would not expect it to be realistic that more than 30-50 per cent of people [would be] vaccinated in the western world before [the northern hemisphere] summer next year” Detlef Trefzger, CEO, Kuehne+Nagel International AG [world’s 2nd largest freight company/major vaccine distributor]

Automotive

“Technology companies entering the car industry means that the car industry has a future and choices for customers will widen” Akio Toyoda, CEO, Toyota Motor Corporation

“2021 is the tipping point toward EVs [electric vehicles]” Mark Reuss, President, General Motors Company

Healthcare

“Technology is rapidly going to disrupt the [healthcare] industry which has been really hard to change” Tom Seymour, CEO, PwC Australia

Domestic Economy

“For inflation to be sustainably within the 2 to 3 per cent target range, wages growth needs to be materially higher than it is currently. This is the basis for our assessment that the cash rate is very likely to remain at its current level until at least 2024” Dr Philip Lowe, Governor, Reserve Bank of Australia

“We’ve obviously seen the accelerated deduction for capital, that was put in place as a temporary measure, and that’s definitely stimulated quite a bit of investment” Alison Watkins, CEO, Coca-Cole Amatil Ltd

“There has never been a time where there has been such enormous disruption of industries, technology change, changes to consumer behaviours and ways of working” Rob Scott, CEO, Wesfarmers Ltd

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.