NAOS CEO Insights

CEO INSIGHTS – Week Ending 14 April 2022 By NAOS Asset Management

April 14, 2022

“There’s ‘needle movers’ in different industries and different sports but Tiger is the needle for golf. He is the guy that drives viewership, he drives participation and therefore he drives revenue. So, from a business perspective, Tiger drives our industry” Dan Murphy, CEO, Bridgestone Golf Inc

CEO INSIGHTS – Week Ending 14 April 2022 By NAOS Asset Management

“There’s ‘needle movers’ in different industries and different sports but Tiger is the needle for golf. He is the guy that drives viewership, he drives participation and therefore he drives revenue. So, from a business perspective, Tiger drives our industry” Dan Murphy, CEO, Bridgestone Golf 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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Lithium & Rare Earths

“Price of lithium has gone to insane levels!...There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow” Elon Musk, CEO, Tesla Inc

We are always alert to the fact that the Chinese Government can still really influence price significantly, which is why we plan our business on the basis that we still need to be able to be successful, even if the price is skinnier than it is at present” Amanda Lacaze, CEO, Lynas Rare Earths Ltd

Commodities Markets & Inflation

“What we really don’t like is the commodity volatility we are seeing presently” Jay Rembolt, CFO, WD-40 Company

“Global steel prices and freight rates have declined from their recent peaks, but remain elevated” Rhys Jones, CEO, Vulcan Steel Ltd

Housing & U.S. Economy

“We don't know ultimately how inflation might impact consumer behaviour. What we do know is that, again, homes have never been more valuable in both a psychological sense but also a financial sense. The homeowners' balance sheet has never been healthier” Richard McPhail, CFO, The Home Depot Inc.

Energy Transition

“We were already on quite an accelerated timeline because of the imperative around climate change, but now we’re saying it’s not just about climate change, it’s also about how the whole energy system needs to transform much, much faster than what we originally planned” Paul Bogers, VP of Hydrogen, Shell plc

TV & Entertainment

“The big categories that are kind of leading the way in this firming [TV ad market] are retail financial services, entertainment and communication, but we still haven't seen the recovery of some of the categories that have been relatively dormant now for extended periods of time, including automotive and health and beauty/makeup” Doug Murphy, CEO, Corus Entertainment Inc [media & TV channel conglomerate inc. National Geographic, History Channel & Nickelodeon]

Sports

“Every industry changes radically... I think sports is the greatest entertainment in the world, but we’ve got to keep making it relevant, and we’ve got to keep it fresh and innovative” Michael Rubin, CEO, Fanatics Inc [global digital sports platform]

“There’s ‘needle movers’ in different industries and different sports but Tiger is the needle for golf. He is the guy that drives viewership, he drives participation and therefore he drives revenue. So, from a business perspective, Tiger drives our industry” Dan Murphy, CEO, Bridgestone Golf Inc

Travel & Transport

“Traffic numbers are picking up, travellers are inexperienced after two years of not travelling, and the close contact rules are making it hard to fill shifts and staff the airport” Geoff Culbert, CEO, Sydney Airports Ltd

“When you think about autonomous ride share, there’s an adoption curve right? And you’ve got to make sure that #1, people are comfortable, people get used to seeing the vehicles out on the road and interacting with them and so on” Paul Jacobson, CFO, General Motors Co.

Technology

“We have spoken about three broad growth drivers this year, increased outsourcing, cloud adoption and growth and transformation. When we talk about cloud adoption, it’s not a single event, but a multi-horizon transformation journey that begins with migration” Rajesh Gopinathan, CEO, Tata Consultancy Services Ltd [one of the largest I.T. companies in the world]

Labour Markets & Staffing

“There is a war for talent globally, and largely we are trying to attract talent to Australia before we are trying to attract them to CBA” Brendan Hopper, Chief Information Officer, Commonwealth Bank of Australia Ltd

“You have seen an industry wide step-up of hiring for the last four quarters and we expect that as the supply hits their productive use, that [staff shortages] will ease up a lot of what was going on over the last few quarters” Rajesh Gopinathan, CEO, Tata Consultancy Services Ltd [one of the largest I.T. companies in the world]

Retail & Consumer Sentiment

It’s absolutely clear that the consumer activity is picking up…Whether the sun shines or not, it definitely feels like consumers are determined to enjoy themselves” Mat Dunn, CFO, ASOS plc [multinational online clothing retailer]

Cryptocurrencies

“Every month that goes past, cryptocurrency becomes more and more mainstream” Tim Helyar, CEO, State Street Australia

Housing Market & Construction

“The magnitude of rental increases across the country is unprecedented…I’ve never seen such sweeping rental increases nationwide, ever” Louis Christopher, CEO, SQM Research

“An industry wide shortage of key trades has materially impacted the Group’s projects, resulting in additional delays and greater uncertainty. These challenges are not anticipated to abate this financial year as the demand for key trades is further impacted by insurance work following severe storm and flood damage in South East Queensland and Northern New South Wales” Market Statement, Ingenia Communities Group 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.