NAOS CEO Insights

CEO INSIGHTS – Week Ending 15 November 2019 By NAOS Asset Management

November 15, 2019

"Every industry, to one extent or another, has a massive opportunity to fundamentally restructure the cost base using technology." Brian Hartzer, CEO, Westpac Banking Corporation

CEO INSIGHTS – Week Ending 15 November 2019 By NAOS Asset Management

"Every industry, to one extent or another, has a massive opportunity to fundamentally restructure the cost base using technology." Brian Hartzer, CEO, Westpac Banking Corporation


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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Building & Infrastructure

"If we look to the results and you see results are up in Asia. And we have one country where results are clearly down. That's Australia. In Australia, the residential sector, especially in Brisbane but mainly also in Sydney, is clearly negative with volume growth of minus 16%." Bernd Scheifele, CEO, HeidelbergCement

"In infrastructure, new major projects are being added to an already solid pipeline. We’ve seen some delays in projects commencing in 2018-19, but we expect to see the infrastructure market return to growth as state and federal governments move to stimulate the economy." Daniel Tartak, CEO, BINGO Industries

Domestic Property

“We know the buyers are back and it’s only a matter of time before the sellers follow. In September, enquiries for properties for sale on realestate.com.au increased 30% year-on-year, while average auction clearance rates have returned to the levels we were seeing before the market correction, over 80% in Melbourne and Sydney." Owen Wilson, CEO, REA Group

Technology

"The two things that are different with 5G versus the transition from 3G to 4G is that China is adopting 5G at the same time as the other geographies versus in 4G they were a couple of years late. And then also within 5G, we are seeing multiple tiers of products being launched simultaneously, which we did not have for 4G. So that’s why we think the intensity of the 5G rollout is actually faster and you have China as a big portion of it happening early in the lifecycle." Akash Palkhiwala, CFO, Qualcomm

"Every industry, to one extent or another, has a massive opportunity to fundamentally restructure the cost base using technology." Brian Hartzer, CEO, Westpac Banking Corporation

Media & Advertising

"At the end of the day, they're [digital advertising platforms] like a vacuum cleaner; they come to Australia, vacuum up all the [advertising] money and go away again." Kerry Stokes, Chairman, Seven West Media Ltd

"Advertising from pretty much every major advertising category was weak in the September quarter particularly from auto, Government, domestic banks and gambling." Peter Costello, Chairman, Nine Entertainment Ltd

"The [advertising] market remains short and difficult to predict, but we expect further softness in the second quarter." James Warburton, CEO, Seven West Media Ltd

US Economy

"I will say, when you look at what drives homebuilding, which is job growth and overall economy, we feel very, very good about what's happening there. And homes, they're affordable as they're going to get. I do think yes, there may be a little bit of pull forward demand. But, right now, the market feels really, really good." David Auld, CEO, DR Horton Inc [largest US homebuilder]

"As we move further into the final quarter of the year, the improved levels of business activity experienced in August and September have continued through today." Jim Pokluda, CEO, Houston Wire & Cable Company [largest US distributor of cable & wires]

Chinese Economy

"Our success in the past four years has shown us enough confidence of China consumers wanting imported brands and products." Nancy Jian, Head of China, Chemist Warehouse

Agriculture

"Alternative [plant based] protein projections remain strong and we’re well positioned to lead in this growing space." Noel White, CEO, Tyson Foods Inc [world's 2nd largest protein processor]

"We see increases in exports from Australia, from New Zealand, countries like that, that’s moving into China." Noel White, CEO, Tyson Foods Inc [world's 2nd largest protein processor]

"In Australia, we continue to feel the impact of decreased milk production in various parts of the country. As we advance in fiscal 2020, we expect continued competition in the sourcing of raw milk to persist, putting pressure on margins." Lino Saputo, CEO, Saputo Inc

Domestic Economy

"Our New Zealand and Australian operations have both had to contend with slowing economic conditions." Market Announcement, Mainfreight Ltd

Tourism & Travel

"The [travel agency booking] industry in Western Europe and Asia-Pac continues to decline." Luis Maroto, CEO, Amadeus IT Group [global IT provider to travel industry]

Financial Services

"Prices have come down across the [platform] industry, all product providers are looking at pricing and all of the majors have already repriced." Matt Heine, Joint MD, Netwealth Group Ltd

 

 

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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.