NAOS CEO Insights

CEO INSIGHTS – Week Ending 2 April 2021 By NAOS Asset Management

April 1, 2021

“The car rental shortage is a critical problem but at the moment there’s not much we can do about it” Luke Martin, CEO, Tourism Industry Council of Tasmania

CEO INSIGHTS – Week Ending 2 April 2021 By NAOS Asset Management

“The car rental shortage is a critical problem but at the moment there’s not much we can do about it” Luke Martin, CEO, Tourism Industry Council of Tasmania


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.  
 
If you do not already subscribe and wish to receive this weekly publication of “CEO Insights” via email please click here. 
 

Technology

“Cyber security has to be high on the agenda for any listed company. If you’ve got something at stake, you’re a target. Every company on the ASX is utterly dependent on technology, but how many of these boards are ensuring that the risks are understood and appropriately responded to?” Aidan Tudehope, MD, Macquarie Telecom Group Ltd

“For the larger and more complicated enterprise deals, being face-to-face for some of that sales cycle, as well as the implementation will [continue] to have some degree of importance” Phil Snow, CEO, FactSet Research Systems Inc

Commercial Property

“Data centre demand is pushing industrial land prices up across the country” Cameron Grier, ANZ Industrial & Logistics Director, CBRE Group

Residential Property

“There is definitely a sense of buyers having a fear of missing out as they know prices are rising” Dan White, MD, Ray White Group

“It [current property market] is a bit different from what we’ve seen in the past. It hasn’t made investors come in and speculate and increase prices. This has all been about owner-occupiers. It is supply-and-demand driven as opposed to anything else” George Frazis, CEO, Bank of Queensland Ltd

“Trying to control prices through taxes and what not, sometimes it works sometimes it doesn’t. I’d lean to more supply, to me if you have a supply/demand issue, let’s see how you can do that by increasing supply” Peter King, CEO, Westpac Banking Corporation

Payments & Lending

“We are watching for a deterioration in lending standings, and that’s not evident at this point. That is not to say it won’t emerge, but it’s not obvious at this point” Wayne Byres, Chairman, Australian Prudential Regulation Authority [APRA]

Food & Beverage

“Our projections show that Australian non-food online retailing has more than five years of growth in 11 months. Non-food retail sales hit $2.1bn in January 2021, which would have taken until April 2025 in line with the pre-COVID-19 growth trajectory” Vanessa Brennan, Partner, Retail, Consumer and Digital Consulting, PricewaterhouseCoopers

Agriculture

“Australia, right now, we don't have a great statistic from the country, but my guess is that Australia is probably processing less than 100,000 cattle per week, has been this way since last quarter. It's not new, and the normal would be 140,000” Andre Nogueira, CEO, JBS Inc. [world’s largest beef processor]

“Farm condition or ranch condition in Australia is extremely good and they received even more rain this week pretty much all over the place...So we're going to continue to see a very strong retention and rebuild of the [cattle] herds in Australia” Andre Nogueira, CEO, JBS Inc. [world’s largest beef processor]

Energy & Resources

“What sometimes gets lost is that when you look at the resource sector in Australia, it has an economic impact locally but that is tenfold regionally. Don’t underestimate how significant an impact Australia played in allowing China’s economy to continue to rebound like it did, to be able to allow Japan and other regional economies to sustain themselves like they did [during COVID]” Al Williams, CEO, Chevron Australia

Tourism & Leisure

“The car rental shortage is a critical problem but at the moment there’s not much we can do about it” Luke Martin, CEO, Tourism Industry Council of Tasmania

Automotive

“What we’re seeing in the UK is that drivers are saving money by going electric. It’s more cost-effective for us to provide an EV vehicle and more cost-effective for the driver. We’re starting to see that come into Australia now too, and one of the biggest drivers is that the cost of EVs is coming down. A lot of that is driven by the decrease in the price of batteries and the price of battery packs” Chris King, CEO, Splend [global car leasing operator to Uber drivers]

“Deloitte estimate that the CAGR, the compound annual growth rate for global EV growth sales will be around 29% over the next 10 years” John Chen, CEO, BlackBerry Limited [BlackBerry is now a car software provider]

Clothing & Textiles

“Pre-COVID, there was already an unprecedented amount of change taking place in the apparel industry driven mostly by technology and the consumer, which the pandemic only accelerated. The new normal will not be a static state, rather an ever-increasing rate of change” Stefan Larsson, CEO, PVH Corporation [international clothing conglomerate/owner of brands inc. Van Heusen, Tommy Hilfiger & Calvin Klein]

“The trends that existed before the pandemic are even more important now and will only continue to grow post the pandemic. For example, people wanting to live an active and healthy lifestyle combined with the growth in demand for technical athletic apparel that performs, and finally, the innate need to feel part of a community and to share a human connection with one another” Calvin McDonald, CEO, Lululemon Athletica Inc

“Having been present there [manufacturing clothing] for more than 30 years, we have witnessed remarkable progress within the Chinese textile industry. Being at the forefront of innovation and technology, China will clearly continue to play an important role in further developing the entire industry” Helena Helmersson, CEO, Hennes & Mauritz AB [parent company of H&M clothing stores]

International Education

“As a sector [ESL – English as a Second Language] that’s 100 per cent reliant on foreign nationals, we’re seeing other sectors like aviation and tourism being singled out [for COVID relief], but nothing dedicated for our sector at the moment, which is really disturbing” Brett Blacker, CEO, Education Australia [national body for the English language sector of international education]

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.