NAOS CEO Insights

CEO INSIGHTS – Week Ending 20 November 2020 By NAOS Asset Management

November 20, 2020

“If you said tomorrow that there was a vaccine with 100 per cent efficacy, and everyone gets it, do people want to live on a cul-de-sac or in a city? They'd rush back and realise there was a reason they weren't living in a cul-de-sac before” Peter Kern, CEO, Expedia Group

CEO INSIGHTS – Week Ending 20 November 2020 By NAOS Asset Management

“If you said tomorrow that there was a vaccine with 100 per cent efficacy, and everyone gets it, do people want to live on a cul-de-sac or in a city? They'd rush back and realise there was a reason they weren't living in a cul-de-sac before” Peter Kern, CEO, Expedia Group


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 & Payments

“So there has been a run on cash in every central bank in the world in the pandemic. I mean there isn’t a single bank in the world that hasn’t seen increased demand for cash” Geoffrey Martin, CEO, CCL Industries Inc [world's largest diversified label company & banknote maker]

“The virus has been very interesting for payments. On one hand, it’s suppressing cash usage as people are worried about germs being spread via currency and so more people, even for small ticket items where they might have used cash in the past, are looking to use a debit card or a credit card” Albert Kelly, CEO, Visa Inc

“There is a lot of interest in polymer [bank] notes and I would say that it’s accelerated during the pandemic because people are worried about the cleanliness of [paper] currency as well as the cost efficiency and all the other aspects of it. So, we’ve got a lot of interest in that field” Geoffrey Martin, CEO, CCL Industries Inc [world's largest diversified label company & banknote maker]

Tourism & Leisure

“If you said tomorrow that there was a vaccine with 100 per cent efficacy, and everyone gets it, do people want to live on a cul-de-sac or in a city? They'd rush back and realise there was a reason they weren't living in a cul-de-sac before” Peter Kern, CEO, Expedia Group

“I do think the [luggage] marketplace will be disrupted. I do think there'll be smaller plays in the industry that struggle to come out of this. But it will remain competitive and remain fragmented” Kyle Gendreau, CEO, Samsonite International SA

“Travel in 2021 and beyond will be a much more considerate exercise than it has ever been before” Luis Cabrera, CEO, Lonely Planet

“We're seeing extremely strong demand in the back half of fiscal-year '21 and all of '22 in terms of cruise line bookings” Bob Chapek, CEO, The Walt Disney Company

Workplace & Employment

“My prediction would be that over 50% of business travel and over 30% of days in the office will go away” Bill Gates, Co-Founder, Microsoft Corp

“I think all of us, as business leaders, have realised that perhaps we had people taking trips that might not have been necessary, or we sent too many people on a trip, or we sent somebody to give a presentation for an hour and a half and sent them around the world, and that cost money and it cost time, which is money, and now realize that, boy, a lot of that stuff can be done on any one of these video platforms that work darned well” Albert Kelly, CEO, Visa Inc

Agriculture

“Australia has been in a strong moment of rebuilding [cattle] herds. Australia, overall production of beef in Q3 was 30% below last year. Just to give you a perspective, 30% is a big, big reduction…since last year, and even more this year, probably the best conditions for grass in Australia in many, many decades. So, it came from extreme [drought] to another extreme now, so that's why the [cattle] retention has been so strong in Australia” Andre Nogueira, CEO, JBS USA [world’s largest beef producer]

“In the coming period we need to be prepared for ongoing uncertainty in terms of access to the Chinese market” Hugh Killen, CEO, Australian Agricultural Company [AACo] Ltd

Residential Property

“I don't think the housing market is a risk anymore. I mean we've substantially upgraded our forecast in and around housing versus where we were in May and even in August” Matt Comyn, Chief Executive, Commonwealth Bank of Australia Ltd

Building & Construction

“Demand strength [from the construction industry], particularly in the Australian market, has continued to outpace our expectation” Mark Vassella, CEO, BlueScope Steel Ltd

“We're anticipating this post-COVID retail environment [where] the nesting effect of the DIY starts to minimize over time” Marvin Ellison, CEO, Lowe's Companies [world’s 2nd largest hardware chain]

Manufacturing

“We are starting to see strength in our [aluminium] markets. We gave a view at the beginning of the fourth quarter that was somewhat uncertain around the value-added products markets globally. We are starting to see the value-added products markets strengthen globally” William Oplinger, CFO, Alcoa Inc [global aluminium manufacturer]

“We’ve observed in the last month very strong dynamics in the market for hydrogen technologies, at least say which we have not seen before being this strong” Martina Merz, CEO, Thyssenkrupp AG [multinational chemical, steel & elevator manufacturer]

Transport & Logistics

“Despite the fact that we are still in the middle of the pandemic with continued high uncertainties, we have seen a strong recovery in demand within transportation and logistics, which has led to equipment shortages, both containers and vessels” Søren Skou, CEO, Maersk [global shipping company]

Advertising & Marketing

“Millennials and Gen Z are hard to reach. The traditional modes of advertising don’t reach this generation” Anthony Eisen, Co-CEO, Afterpay Ltd

Consumer Goods

“I think in the label industry in general, because this pandemic has increased at-home purchases, so if you are in the label business, I don’t think it’s been a stressful time…you wouldn’t say it’s been a bad time for consumer packaged goods companies” Geoffrey Martin, CEO, CCL Industries Inc [world's largest diversified label company & banknote maker]

Retail

“I do think that some personal [shopping] habits will have changed on a relatively permanent basis in terms of customers focus on handwashing and overall safer lifestyle choices when it comes to keeping clean go forward” Andrew Meslow, CEO, L Brands Inc [global clothing, soap & fragrance conglomerate]

Technology

“We’re seeing such trends and such tailwinds around streaming, whether it be audio or video and that plays right into what we’re doing” Patrick Spence, CEO, Sonos

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.