NAOS CEO Insights

CEO INSIGHTS – Week Ending 24 September 2021 By NAOS Asset Management

September 24, 2021

“We know that companies and insurers want to change health outcomes. We know we're delivering that through our engaging [at home] platform in a way that has never worked before. Gym memberships weren't changing outcomes” John Foley, CEO, Peloton Interactive Inc [US listed global exercise equipment & media company]

CEO INSIGHTS – Week Ending 24 September 2021 By NAOS Asset Management

“We know that companies and insurers want to change health outcomes. We know we're delivering that through our engaging [at home] platform in a way that has never worked before. Gym memberships weren't changing outcomes” John Foley, CEO, Peloton Interactive Inc [US listed global exercise equipment & media company]

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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Consumer Electronics

“The number of Australian households with a streaming service is forecast to grow by almost 20 per cent in the next four years, reaching 85 per cent of all households, with each household expected to have between three and four SVOD [subscription video on demand] subscriptions” Patrick Delany, CEO, Foxtel Ltd

“Instead of using the camera just at a special event or something like that, people are using it all day, every day with their friends to talk. And so, if we look at the last 10 years, that’s really how the camera has transformed” Evan Spiegel, CEO, Snap Inc [Snapchat parent company]

“As we look at the next 10 [years], we believe that the camera is going to transform from being primarily now a way of communicating to an augmented reality platform” Evan Spiegel, CEO, Snap Inc [Snapchat parent company]

“One of the trends we have been fighting over the past 10 years is the loss of the clock radio next to everybody's bed. Well, Alexa, Roku, smart TVs et cetera appear to have filled the void and COVID sort of got them comfortable using them and put it [radio] into their mix again” Robert Pittman, CEO, iHeartMedia, Inc. [global radio & media conglomerate]

Energy Markets

“Unlike many OECD countries, Australia lacks a locally owned and controlled energy utility with capabilities across critical energy infrastructure and with the size and strength to partner with government and the community to deliver the energy transition” Rob Wheals, CEO, APA Group

“Markets continue to experience material volatility. Prices have fluctuated significantly, and demand continues to be impacted by both COVID-19 lockdowns and milder than usual weather conditions” Graeme Hunt, CEO, AGL Energy Ltd

Aluminium

“I do believe that both in the near term and in the longer-term, market factors in our industry are driving substantial changes. I think we're in an inflection point in our industry…the Chinese industry is getting serious about reducing the growth in the industry and focusing on both the carbon emissions, but also on the electricity usage” William Oplinger, CFO, Alcoa Inc

Housing & Construction

“The full impact of the increased detached housing activity was not felt during the [FY21] year. Usage of bricks and roof tiles on site typically lags a housing commencement by 3-6 months, however this [lag] has extended during the current upturn” Lindsay Partridge, MD, Brickworks Ltd

“We think it would be important to take some modest steps sooner rather than later to take some of the heat out of the housing market” Matt Comyn, CEO, Commonwealth Bank of Australia Ltd

Cybersecurity, Technology & Communications

“Australian businesses are nowhere near well-prepared enough, and I would describe preparedness as woeful actually. People are vulnerable and it’s increasing, scams are up something like 75 per cent from last year. Everybody is at home, everybody is online, and so they are more susceptible than ever before” Shayne Elliott, CEO, ANZ Banking Group Ltd

“One of our fundamental beliefs is that artificial intelligence has a part to play as a standard feature of every call and conversation” Steve McGovern, CEO, Dubber Corporation Ltd

Payments & Lending

“Small business has suddenly become the new black. Everybody wants [to lend to] it” Shayne Elliott, CEO, ANZ Banking Group Ltd

“I think the one enduring thing that will come out of Buy Now Pay Later is, I do believe millennials, Gen Z have a strong preference for more structured or closed end type financing options. It doesn't mean they won't evolve. But it means disproportionately they will opt into installment type features that are more predictable and closed” Douglas Buckminster, CEO Global Consumer Services, American Express Co.

E-Commerce

“We’re on a wave [book sales shifting online] and there are very few others riding that wave” Tony Nash, CEO, Booktopia Ltd

Infant Formula

“Many customers have experienced significant channel disruption and reduced sales. Infant formula customers are shifting their channel strategies and market focus, which we expect will deliver improved conditions in the future” Market Statement, Clover Corporation Ltd

Agriculture

“People are growing in the world, people are improving their diets in the world, people have more desire to have proteins and they don't come back once they taste protein” Juan Luciano, CEO, Archer-Daniels-Midland Co

“Certainly, the other structural market changes, is the sustainability and the desire for a lot of people to grow plant based, not only eating plant based, but also building plant based, and also fuel in plant based” Juan Luciano, CEO, Archer-Daniels-Midland Co

Health & Fitness

“As you think about the failure of fitness for decades, the gyms didn't really work. The gyms don't feel like they're going to work moving forward…Home fitness was never a great category. You had some content and some hardware but never an integrated experience that really was engaging and immersive” John Foley, CEO, Peloton Interactive Inc [US listed global exercise equipment & media company]

Employment & Workplace

“We know that companies and insurers want to change health outcomes. We know we're delivering that through our engaging [at home] platform in a way that has never worked before. Gym memberships weren't changing outcomes” John Foley, CEO, Peloton Interactive Inc [US listed global exercise equipment & media company]

“We actually have seen a nice bump in business travel happening” Dara Khosrowshahi, CEO, Uber Technologies Inc

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.