NAOS CEO Insights

CEO INSIGHTS – Week Ending 17 September 2021 By NAOS Asset Management

September 17, 2021

“When you look at whichever sort of modelling you follow, we as an industry haven't replaced the gold that we've mined since 2000…So we are in a precarious position as an industry and the grade is now half of what it was in 2000” Mark Bristow, CEO, Barrick Gold Corporation

CEO INSIGHTS – Week Ending 17 September 2021 By NAOS Asset Management

“When you look at whichever sort of modelling you follow, we as an industry haven't replaced the gold that we've mined since 2000…So we are in a precarious position as an industry and the grade is now half of what it was in 2000” Mark Bristow, CEO, Barrick Gold 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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Banking & Spending

“SMEs are still finding it difficult to get access to credit” Joseph Healy, CEO, Judo Bank Ltd

“Over the last month, we have seen a substantial rise in business owners putting their hand up for assistance” Anna Bligh, CEO, Australian Banking Association

“One of the things that gives us comfort in the sustainability of the current levels of goods and services spending is the breadth that we see. So you see it not just in the US, but you see it pretty much around the globe” Jeff Campbell, CFO, American Express Co.

Supply Shortages

“We've recently seen upwards of 60% production restrictions but it's a different situation than it was in the beginning of the year. At the beginning of the year, it was about [steel] fabrication capacity...What we're seeing right now is really in the back-end processing facilities that are in Southeast Asia” Paul Jacobson, CFO, General Motors Co.

“We’re seeing significant growth from an industrial property perspective as companies are opting to get their hands on the goods when they can and hold it onshore in an industrial warehouse to make sure they have certainty” Tammy Medard, Institutional Bank M.D, ANZ Banking Group Ltd

Labour & Employment

“We'll look back on 2020 as the year where the world moved from working out of offices to working out of screens” Andrew Houston, CEO, Dropbox Inc

“Our judgment is it will take some time for wage increases to lift to a rate that is consistent with achieving the inflation target…this judgment stands in contrast to the expected path of the cash rate implied by market pricing” Philip Lowe, Governor, Reserve Bank of Australia

“The needs of industry cannot be met by domestic talent alone and urgent action is needed to attract expats, and talent from like-minded countries to address skills shortages, drive research commercialisation and build our sovereign capability” Vicki Thomson, CEO, Group of Eight [organisation of Australia’s leading research-intensive universities]

Domestic Economy

“As soon as COVID passes I would be bullish that Australia will exceed most people’s expectations in terms of economic growth” John Gray, COO, Blackstone Group / Chairman, Hilton Hotels

Agriculture

“Unfortunately, all good things must come to an end. Australian farmers operate in one of the world’s most variable climates so we cannot expect the good seasons to keep coming. The same can be said for high world prices. That said, the last two years have placed our farmers in a good position to take on any challenges ahead” Jared Greenville, CEO, Australian Bureau of Agricultural and Resource Economics

Automotive

“We will consciously undersupply demand level[s]” Harald Wilhelm, CFO, Daimler AMG [parent company of Mercedes]

Media, Music & Video

“So, we've seen an explosion in rich media and video content” Andrew Houston, CEO, Dropbox Inc

“Consumer interest in digital imaging, personal experience capture and sharing, this is a megatrend that is not going away” Nicholas Woodman, CEO, GoPro, Inc.

“We think voice will be a big contributor to accessing the car, it’s not super easy to be scrolling, you’re looking at a screen to change, playlists or songs or switching from a music to a podcast” Paul Vogel, CFO, Spotify Technologies

Food & Beverage

“Everything that we can see a meaningful part of the trend change [more meals at home] is really structural and sustainable, and it's not just a one-time blip because of COVID” Rodney McMullen, CEO, The Kroger Co [world's largest supermarket chain]

“Millennials’ purchase interest rises over 40% higher when they see the grill with technology embedded and so, there’s a tremendous accelerator in front of us to bring that technology solution to this broad array of consumers who are wired literally to expect it and really desire it” Chris Scherzinger, CEO, Weber Inc

Retail

“Trade remains subdued with lockdowns however there is strong performance in Online and our non-lockdown stores which provides optimism once lockdowns ease” Market Statement, Myer Holdings Ltd

Industrials

“So demand is very real and very attractive. As we entered this year, we did not expect the demand signal and the end markets to be as positive” Judy Marks, CEO, Otis Worldwide [one of the world’s largest lifts & elevator companies]

Gold

“When you look at whichever sort of modelling you follow, we as an industry haven't replaced the gold that we've mined since 2000…So we are in a precarious position as an industry and the grade is now half of what it was in 2000” Mark Bristow, CEO, Barrick Gold Corporation

“We had the bull markets of 2011, where we spent a lot of effort destroying value. And now we've actually got it right in this bull market and everyone wants the money back. And we're not investing it in our future. And that is the worry” Mark Bristow, CEO, Barrick Gold Corporation

Cryptocurrency & NFTs [Non-Fungible Tokens]

“The innovation around crypto feels like the internet did in 1995” Brad Lindenberg, CEO USA, Zip Co Ltd

“All digital content, be they videos, songs or images, can be tokenised into probably scarce digital collectables, enabling a new type of creator-audience relationship. Everything which is unique and tradable, including artworks, in-game assets and title to physical goods – even diamonds, or real estate – can eventually be represented as public block-chain NFTs, and become tradable on a globally liquid market” Robbie Ferguson, Co-Founder, Immutable [gaming & digital asset 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.