NAOS CEO Insights

CEO INSIGHTS – Week Ending 18 June 2021 By NAOS Asset Management

June 18, 2021

“Spending on books is up double digits, maybe 15% and that's true around the world…We've seen people turn to books as a form of entertainment, as an escape. People have gotten time back that they used to spend maybe commuting or traveling. There's definitely this renaissance in book reading and book interest” Brian Murray, CEO, HarperCollins Publishing LLC

CEO INSIGHTS – Week Ending 18 June 2021 By NAOS Asset Management

“Spending on books is up double digits, maybe 15% and that's true around the world…We've seen people turn to books as a form of entertainment, as an escape. People have gotten time back that they used to spend maybe commuting or traveling. There's definitely this renaissance in book reading and book interest” Brian Murray, CEO, HarperCollins Publishing LLC


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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Employment, Workplace & Childcare

“Today, the level of employment in Australia is above its pre-pandemic level. Australia and New Zealand are the only advanced economies where this is the case” Phillip Lowe, Governor, RBA

“Strong macroeconomic drivers continue to support the Australian ELC [early learning centre] sector. Demand for services and record female workforce participation rates have been driving increased long day care participation rates over the medium to long term” Market Statement, Arena REIT

Environmental, Social & Governance

“We have to get on the front foot as an industry and really lead the charge on decarbonisation before we find ourselves in the same place as the coal industry, because that’s what will happen if we think we can do nothing and keep doing business as usual” Kevin Gallagher, CEO, Santos Ltd

“This is only the beginning, but the impact plastic has on our global environment is so negative…and we have done a recent survey; 70% of our consumers prefer to buy sustainable products” Kasper Rorsted CEO, Adidas

“I think that the scrutiny on companies and CEOs are much greater today. I think that part of the reason is social media is bringing a transparency and also a news flow out that was never there before. It drives change, it drives responsibility, and it drives transparency” Kasper Rorsted CEO, Adidas

Entertainment

“Spending on books is up double digits, maybe 15% and that's true around the world…We've seen people turn to books as a form of entertainment, as an escape. People have gotten time back that they used to spend maybe commuting or traveling. There's definitely this renaissance in book reading and book interest” Brian Murray, CEO, HarperCollins Publishing LLC

“We might end up with more [gaming] consoles in data centres than we do in people’s homes” Phil Spencer, CEO, Xbox

Media & Advertising

“Trading conditions in the fourth quarter of FY21 have been positive, with a strong rebound in advertising revenue compared to last year” Market Statement, Seven West Media Ltd

Tourism & Travel

“The Tasman market is building following the opening of the Trans-Tasman bubble in late April 2021, with capacity currently at around 70% of pre-Covid levels” Market Statement, Air New Zealand Ltd

Automotive

“This is not the first semiconductor supply shortage that we had in the past and I think what we have to realize and grasp is the fact that there is a lot of demand beyond automotive” Paul Jacobson, CFO, General Motors Company

Supply Chains & Logistics

“I think supply chains are shifting from ‘just in time’ to ‘just in case’, and a lot more resiliency is being built into the supply chains, a lot more global diversity in the supply chains, and that’s a good thing” Michael Dell, CEO, Dell Technologies Inc

“As the transformation to an even larger digital economy continues, the demand for trucks continues to increase at each step of the [supply] chain down to delivery to homes. Diesel fuel costs are up more than 25% versus April 2020” Jon Moeller, COO, The Procter & Gamble Company

Technology

“We believe the market, the world, is in a very expansionary period. I predict there’s 10 good years in front of us, because the world is becoming more digital, and everything digital needs semiconductors” Pat Gelsinger, CEO, Intel Corporation

“To some extent, there’s a gradual generational change that’s occurring inside companies, as the executives have a greater understanding of the role technology plays...But last year digital transformation really kicked into a whole other gear, and organisations figured out that the only thing that worked during the lockdowns was technology” Michael Dell, CEO, Dell Technologies Inc

“It’s [virtual reality] quickly expanding beyond games into a bunch of other use cases, and we think that this is eventually going to be a big part of the next major computing platform after phones and after PCs” Mark Zuckerberg, CEO, Facebook Inc

Inflation

“We're starting to see that pressure out there. We hope that the [US] Fed is right and the Fed will take whatever action is necessary to cut this off before it really does become an inflationary spiral” Gregory Hayes, CEO, Raytheon Technologies Corporation [top-tier multinational aerospace company]

Timber

“The commodity [timber] has been going up pretty significantly over the last 18 months. Demand has still maintained a very strong pace because despite the increase in price, the demand for lumber to support home improvement has continued. So, we have not seen any softening of that demand” David Denton, CFO, Lowes Companies Inc [one of the largest hardware retailers in the world]

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.