NAOS CEO Insights

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

November 12, 2021

“I'm pleased to report that we are seeing a resurgence in our film business. More people are shooting still film, and the motion picture industry is choosing film as the ideal medium for their productions” Jim Continenza, CEO, Eastman Kodak Company

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

“I'm pleased to report that we are seeing a resurgence in our film business. More people are shooting still film, and the motion picture industry is choosing film as the ideal medium for their productions” Jim Continenza, CEO, Eastman Kodak 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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Aviation & Travel

“[Qantas] has lost about $20 billion in revenue. If I said to you, as a customer, 'I've got to put a surcharge to try to recover that $20 billion back,' you'd say 'piss off, that's outrageous'” Alan Joyce, CEO, Qantas Airways Ltd

“Much additional [plane] capacity is coming back across the Pacific, into Asia, Japan and to Europe and the UK and bookings are coming back very strongly” Andrew Burnes, CEO, Helloworld Travel Ltd

“Experiences have always been referred to as the last of the major categories to come online after air and hotel. And so we see COVID having taught people the ability and sometimes the necessity of doing this booking online” Ernst Teunissen, CFO, TripAdvisor Inc

Electric Vehicles

“Absolutely it’s a Kodak moment. Some [fuel retailers] are already closing. And you’re starting to see in the United States signs up to sell not just petrol...but also electrification with a price next to it, which is a change we haven’t seen yet in Australia” Jane Hunter, CEO, Tritium [E.V. charging infrastructure company]

Construction & Infrastructure

“Targeted well, a change in immigration settings can further help address emerging capacity constraints in the economy, including those professions essential to major projects” Juan Santamaria, CEO, CIMIC Group Ltd

“The infrastructure of tomorrow enabling the quantum leap in productivity that our economy desperately needs will be about connectivity, it will be about a more dispersed, less urbanised population” Paul Broad, CEO, Snowy Hydro Ltd

“Stimulus spending around the world will increase demand for steel-intensive infrastructure spending and drive additional retail consumption. Additional retail consumption will also increase post-consumption scrap. These trends are positive for both ferrous and non-ferrous metal recycling” Market Statement, Sims Ltd

Transportation & Logistics

“This moment is special. Transportation, logistics and distribution markets are going through a momentous transition as they adapt to a compilation of forces” Brent Yeagy, CEO, Wabash National Corp [largest producer of semi-trailers and liquid transportation systems in the U.S]

“The rebound of motor vehicles imports trending back to pre COVID-19 levels in the second half of the year assisted the improvement in the general stevedoring operation” Allan Davies, Chairman, Qube Holdings Ltd

“Right now, around one-third of our shipments are leaving Asia with significant delays, in many cases by more than two weeks” Harm Ohlmeyer, CFO, adidas AG

Housing

“If further [regulatory] changes are made to address house price inflation, this could slow listing volumes. But conditions are ripe for sellers to list with confidence high and buyers remaining out in force” Owen Wilson, CEO, REA Group Ltd

Retail & Consumer Behaviour

“As various geographies have reopened post pandemic, consumers have naturally shifted some spend toward travel and entertainment and from e-commerce toward brick-and-mortar” Niraj Shah, CEO, Wayfair Inc [U.S. listed home & furniture e-commerce company]

“We are seeing the impact of global supply chain shortages in our merchant base. Consumer confidence has weakened with the absence of stimulus payments and with the economy reopening, more people may be likely to do their holiday shopping in-store as confidence in delivery logistics is depressed from last year” Dan Schulman, CEO, PayPal Inc

“Customers are again rapidly returning” Peter Allen, CEO, Scentre Group

Food & Beverage

“We don’t see any tapering off of that [consumer demand] at all” Chantale Millard, CEO, Maggie Beer Holdings

“There’s a flight to tried and trusted brands” Tim Cooper, CEO, Coopers Brewery Ltd

Macroeconomic

“Seems to be that we're now seeing the withdrawal of the ultra-cheap or ultra-low margin-type mortgages. And I expect that trend to increase over a period of time in line with the interest rate curve” David Duffy, CEO, Virgin Money UK Plc

Inflation

“I'm not saying that customers welcome that we increase prices, especially as the increase is starting to be very significant. You're talking double-digit increase here. But overall, this is well understood by the market” Pascal Juery, CEO, Agfa-Gevaert NV [major multinational imaging & printing equipment manufacturer]

Movies & Filming

“I'm pleased to report that we are seeing a resurgence in our film business. More people are shooting still film, and the motion picture industry is choosing film as the ideal medium for their productions” Jim Continenza, CEO, Eastman Kodak Company

Taxation & Financial Services

“There are multiple drivers for cloud-based software adoption, including digitisation of tax compliance, innovation of financial services and an imperative for small businesses to prepare for the future” Steve Vamos, CEO, Xero Ltd

Aged Care & Seniors Living

“The restructuring of the [aged care] sector will take many forms: including M&A, transition out of the markets by closure of homes that are unattractive” Ian Thorley, CEO, Estia Health Ltd

“The size of the lifestyle communities’ market is continuing to grow, and competition is increasing as we see new groups enter the market” Simon Owen, CEO, Ingenia Communities Group Ltd

Energy

“The possibility of the solar tax and system prices rising could be a perfect storm for a bit of a slowdown” Kerry Schott, Chair, Energy Security Board

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.