NAOS CEO Insights

CEO INSIGHTS – Week Ending 18 March 2022 By NAOS Asset Management

March 18, 2022

“We are in the century of quality – because people are sick and tired of all the cheap, quick, £8 trousers they wear once” Oliver Reichert, CEO, Birkenstock Group B.V. & Co.

CEO INSIGHTS – Week Ending 18 March 2022 By NAOS Asset Management

“We are in the century of quality – because people are sick and tired of all the cheap, quick, £8 trousers they wear once” Oliver Reichert, CEO, Birkenstock Group B.V. & Co.

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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Automotive Technology

“The demand [for EVs] is not the issue. This transition into EVs will take probably two product lifecycles, and we are just starting” Herbert Diess, CEO, Volkswagen AG

“It's [driverless cars] a multitrillion-dollar market...In the United States, there's 3 trillion passenger miles each year, and regardless of whether you look at Uber's S1 or AAA stats, the costs of car ownership per mile is between, call it, $0.60 to $0.80, and so you can do the math there. It gets big pretty quickly” Kyle Vogt, CEO, Cruise LLC [self-driving car company]

“Less and less people can afford vehicles. Electrification is going to make it worse, actually. So, to me, the true disruption of Henry Ford's model of a Model T where anyone can own a Ford, even our factory workers, is really shared mobility, where people stop owning vehicles and they start renting rides” James Farley, CEO, Ford Motor Company

Agriculture

“While we believe some of these sales [improvements] are forward purchasing by primary producers seeking to mitigate the risk of instability in supply chains, we consider the majority of sales are a result of increased activity” Mark Allison, CEO, Elders Ltd

Building & Construction

“There are timber suppliers you can’t even talk to because they are inundated from existing clients” Russ Stephens, CEO, Association of Professional Builders

Food Inflation

“We are seeing probably the biggest price inflation shift that I’ve ever seen in my career coming through. We’d be out of business really quickly if we didn’t pass these prices on because they’re just so significant” Robert Giles, CEO, SPC Australia

“All of the raw materials are only going in one direction” Nick Hazell, CEO, v2food Group [Australia’s leading plant based meat company]

Labour Markets

“The greatest pressure is being felt in finance and head office roles. We’re seeing considerable pressure in these roles” Nathan Blackburne, MD, Cedar Woods Properties Ltd

“Freelance work used to be somewhat unstable and uncertain…That‘s completely changed” Bridget Loudon, CEO, Expert360 [Australia’s leading skilled talent marketplace]

Technology & Cybersecurity

“To fill those jobs [Australia’s need for one million people in tech jobs by 2025], we need an extra 280,000 people to enter the tech sector” Kate Pounder, CEO, Tech Council of Australia

“This level of mobile connectivity will remain the expectation for workers, customers, and enterprises for decades to come, but today’s cybersecurity was not built to support these environments – and attackers know it” Shridhar Mittal, CEO, Zimperium [VC backed mobile security company]

Clothing & Fashion

“We are in the century of quality – because people are sick and tired of all the cheap, quick, £8 trousers they wear once” Oliver Reichert, CEO, Birkenstock Group B.V. & Co.

Cryptocurrency

“Crypto is taking the world by storm and has established itself as a legitimate asset class. Investors are demanding it and brokers who are dragging their feet will fall behind” Matt Leibowitz, CEO, Stake [pureplay online trading platform]

Financial Markets

“It would be prudent for borrowers to plan for an increase [in interest rates this year]” Dr Phillip Lowe, Governor, Reserve Bank of Australia

“Demand for [financial] advice continues to grow across Australia with millennial inheritance from 2020-2040 forecast to reach $3.5 trillion, with superannuation assets expected to double by 2029, and the largest cohort ever to enter age care” Keith Cullen, CEO, WT Financial Group [Australia’s 3rd largest financial advisory firm]

“And there's no doubt that geopolitical risks are impacting debt capital market activity, but the fundamental drivers of issuance over the medium and longer term, we believe that those remain firmly intact” Robert Fauber, CEO, Moody's Corporation

Mining & Resources

“Diesel and fuel is a big issue and the oil price keeps going up and the flights are double the cost now than what they were a year ago from Perth to Karratha, so if you have 400 people flying in and out for four years, that is a lot of extra cost” Alwyn Vorster, CEO, BCI Minerals Ltd

Supply Chain

“It could take months for a clearer picture to emerge in terms of where the global supply chain is headed, given various volatile factors” Young Liu, CEO, Foxconn Technology Group [the world's largest electronics manufacturer]

Travel

“The pandemic really does seem to be behind us here in the US” Andrew Nocella, Chief Commercial Officer, United Airlines Holdings Inc.

“We're also dealing with some capacity headwinds in the industry driven by, in many cases, staffing, whether it's pilots or whether it's airports” Robin Hayes, CEO, JetBlue Airways Corp

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.