NAOS CEO Insights

CEO INSIGHTS – Week Ending 25 March 2022 By NAOS Asset Management

March 25, 2022

“A recent RV industry association study confirmed that 51% of new RVers in the 2020 and 2021 time periods suggested that reasons surrounding COVID were certainly the impetus for purchasing an RV. We are confident though that many of these interest trends have become ingrained” Michael Happe, CEO, Winnebago Industries Inc

CEO INSIGHTS – Week Ending 25 March 2022 By NAOS Asset Management

“A recent RV industry association study confirmed that 51% of new RVers in the 2020 and 2021 time periods suggested that reasons surrounding COVID were certainly the impetus for purchasing an RV. We are confident though that many of these interest trends have become ingrained” Michael Happe, CEO, Winnebago Industries Inc

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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Health & Beauty

“We don’t expect that there’ll be any of these tougher sanctions that would come on international health products that the Chinese people would be looking for. I think the only time that that could come is if there was a legitimate alternative locally that the consumers were as comfortable with, and we don’t see that yet” Alastair Symington, CEO, Blackmores Ltd

Supply Chain

“We will see tremendous interference with all the supply chains, not just the chip business, but any supply chains internationally” Hildegard Wortmann, Sales & Marketing CEO, Audi AG

Inflation

“Certainly, as prices go up, there will be some level of elasticity, but it's also important to note that it's not in line with historical elasticities given this current environment” Jeff Harmening, CEO, General Mills Inc [major global food conglomerate]

Energy

“Strong demand and lower than normal stock levels held by customers have pushed thermal coal prices well above the long-term average. Newcastle Index pricing is currently above US$300/t" Rob Bishop, CEO, New Hope Group Ltd

Financial Markets

“There’s a lot more later-stage companies using crowdfunding now. The awareness of the benefits of this type of fundraising has grown, and now we have companies with material revenue, and ones that are profitable, which is exciting” Matt Vitale, CEO, Birchal [Australia's largest crowdfunding platform]

Payments & Lending

“We really do believe that the structural trend in small businesses finding the check a fundamentally inefficient tool is happening. It makes no sense really that the US has 40% of small business payment volume on payable checks. It's operationally inefficient and it's inefficient from a funding perspective” Anna Marrs, Group President, American Express Co

“We're very concerned and focused on managing credit risk today, but we're not seeing it [drop in credit quality] yet” Michael Linford, CFO, Affirm Holdings Inc [major US BNPL operator]

Decentralised Finance & Cryptocurrency

“We are now able to democratise governance and finance in the same way the internet democratised the information layer of the planet” Joe Lubin, Co-Founder, Ethereum

“About 900,000 of our customers have transferred money to crypto exchanges over the last two years,…our customers are already there, already in this space. You can say it is already mainstream based on our stats” Sophie Gilder, MD of Digital Assets, Commonwealth Bank of Australia Ltd

Construction & Housing

“There are some people who’ve signed up to have a house built 18 months ago who haven’t even started yet” Lindsay Partridge, CEO, Brickworks Ltd

“Once the current backlog of stimulus-induced housing work is completed, recent building approvals data suggests that a period of softer demand is likely” Lindsay Partridge, CEO, Brickworks Ltd

Travel & Leisure

“Agents are already holding significant forward bookings for cruises in FY23 and FY24” Market Announcement, Helloworld Travel Ltd

“A recent RV industry association study confirmed that 51% of new RVers in the 2020 and 2021 time periods suggested that reasons surrounding COVID were certainly the impetus for purchasing an RV. We are confident though that many of these interest trends have become ingrained” Michael Happe, CEO, Winnebago Industries Inc

Labour Market & Skills Shortages

“For every six or seven jobs advertised, there’s [now] only one person who applies” Mike Horton, CEO, HCL Technologies Australia [multinational IT & consulting conglomerate]

“The collision repair industry is experiencing significant and unprecedented competition for talent and in particular a limited pool of qualified technicians and estimators” Tim O’Day, CEO, Boyd Group Services Inc [one of the largest smash repair companies in the world]

Aquaculture

“So, we see that seafood is the biggest per capita consumption in the world and growing higher than the other meat proteins” Gilberto Tomazoni, CEO, JBS S.A. [world’s biggest meat processor]

Technology

“Everywhere we look, whether it is in entertainment, education or the enterprise, content is fuelling the global economy” Shantanu Narayen, CEO, Adobe Inc

“Other technologies we intend to explore include the use of robotics and artificial intelligence to improve pest and weed management, and drones and sensors to monitor tree health and calculate the carbon stored in trees” Andy Penn, CEO, Telstra Corporation Ltd

Industrials

“We've never seen an environment where steel prices are bouncing around like they are right now” Andy Rose, CEO, Worthington Industrials [multinational diversified metals manufacturer]

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.