NAOS CEO Insights

CEO INSIGHTS – Week Ending 13 August 2021 By NAOS Asset Management

August 13, 2021

“There are two drivers behind this [battery category] growth. Devices owned per household are up mid-single-digits… and an increase in the amount of time those devices are being used. As a result, consumers are replacing batteries more frequently” Mark LaVigne, CEO, Energizer Holdings Inc

CEO INSIGHTS – Week Ending 13 August 2021 By NAOS Asset Management

“There are two drivers behind this [battery category] growth. Devices owned per household are up mid-single-digits… and an increase in the amount of time those devices are being used. As a result, consumers are replacing batteries more frequently” Mark LaVigne, CEO, Energizer Holdings 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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Mining & Resources

“I feel our industry is still too fragmented and needs to lift its horizon and focus a little more on the future. We have been living on a rising gold price going back to the turn of the century with not much focus on replacing the ore bodies we mine with similar quality” Dennis Bristow, CEO, Barrick Gold Corp Inc

Consumer Staples

“There are two drivers behind this [battery category] growth. Devices owned per household are up mid-single-digits…and an increase in the amount of time those devices are being used. As a result, consumers are replacing batteries more frequently” Mark LaVigne, CEO, Energizer Holdings Inc

Travel & Outdoors

“Our inventory levels have been very stressed this whole season just because the demand is high” Helen Johnson-Leipold, CEO, Johnson Outdoors, Inc. [fishing, diving, camping & watercraft conglomerate]

“Fortunately, experience has shown us that traffic rebounds quickly when restrictions are lifted although the rate of recovery depends on the length and nature of ongoing restrictions” Scott Charlton, CEO, Transurban Ltd

Transport & Logistics

“You’ve got this huge increase in global steel prices, you’ve got these huge increases in shipping costs, you’ve got congestion at the wharves...sometimes you can’t even get your product off the port overseas” David Buchanan, CEO, Australian Steel Association

Housing & Construction

“It’s [rising prices] certainly going to blow out any of those infrastructure projects because prices are just continuing to go up...things are getting pretty dire” David Buchanan, CEO, Australian Steel Association

“We see a lot of key indicators that continue to point to a strong R & R [remodelling and renovation] market going forward” Jack Truong, CEO, James Hardie Industries plc

Inflation Expectations

“We have seen operating costs including labour, transportation, and commodities rise rapidly over past few months. This is a trend we expect to continue” Mark LaVigne, CEO, Energizer Holdings Inc

“We have seen accelerating and unprecedented inflation” Donnie King, CEO, Tyson Foods, Inc [world’s 2nd largest meat processor]

“What you saw historically, freight cost could have been as low as $2,000 a container, coming out of China today I've seen prices as high as $18,000 a container. So, you're looking at a 900% increase in those costs…and I think it's going to go on for a few quarters at least” Selwyn Joffe, CEO, Motorcar Parts of America, Inc

Domestic Economy

“As the past 18 months have shown, Australia has a very strong, stable and secure financial system” Matt Comyn, CEO, Commonwealth Bank of Australia Ltd

Grains & Oils

“We’re hearing reports of good potential in the upcoming crop, based on factors including area planted, sub-soil moisture levels, season-to-date rainfall, and longer-term weather forecasts” Robert Spurway, CEO, GrainCorp Ltd

“Growth in global consumption of olive oil is driven by numerous factors including changes in consumer food preferences, the growing popularity of diets promoting the using of extra virgin olive oil, and the shift to sustainable plant-based foods” Market Statement, Cobram Estate Olives Ltd

Marketing & Advertising

“But regardless of where a company is on the growth spectrum, we're seeing the same response today. Those companies that enjoyed accelerated growth [during COVID] now need to market effectively to sustain that growth. Those that were struggling and hit the pause button are now playing catch up [and] aggressively marketing to make up for lost time” Jeff Green, CEO, The Trade Desk Inc [world’s largest programmatic media buying platform]

E-Commerce

“The longer this pandemic goes, the more entrenched the way we're living, [which] also means that we're spending more online…and I think the world will be at 40% online sales through retail sooner than was forecast 12, 18 months ago” Greg Goodman, CEO, Goodman Group

Technology & Communications

“This increase [in mobile subscribers] is despite a decline in Australia’s population, a trend which is expected to continue to impact industry growth” Andy Penn, CEO, Telstra Corporation Ltd

“We expect this [cloud communications] trend will continue long after the world reopens. This is because enterprises around the world now understand that, if they are to compete and win they need to offer a stellar customer experience. They need the quality, scalability and flexibility that can only be found in the cloud” David Morken, CEO, Bandwidth Inc

“We now have many ambitious founders in Australia too, who have been very successful and, for me, that’s a really important part of creating that multiple generational industry, that you can start small and take on big audacious goals” Robyn Denholm, Chairman, Technology Council of Australia & Tesla Inc

Pets

“Pet spending has many structural tailwinds which were amplified during the pandemic. Industry research shows that the number of U.S. pet owning households surged by nearly 6% in 2020, versus the slightly positive pre COVID run rate. This trend is not isolated to America” Jeff Simmons, CEO, Elanco Animal Health Inc [world’s 2nd largest animal health company]

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.