NAOS CEO Insights

CEO INSIGHTS – Week Ending 26 March 2021 By NAOS Asset Management

March 25, 2021

“As employees return to offices, companies will discover that hybrid is hard to get right. Every meeting might have a remote participant but it's not going to feel the same as when everyone was remote…Individual work will be different too, as it will often include the need to jump on a video call without distracting others” Jim Keane, CEO, Steelcase Inc [largest office furniture manufacturer in the world]

CEO INSIGHTS – Week Ending 26 March 2021 By NAOS Asset Management

“As employees return to offices, companies will discover that hybrid is hard to get right. Every meeting might have a remote participant but it's not going to feel the same as when everyone was remote…Individual work will be different too, as it will often include the need to jump on a video call without distracting others” Jim Keane, CEO, Steelcase Inc [largest office furniture manufacturer in the world]


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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Retail

“The consumer is really clear that they want to get what they want, when they want it, how they want it and they want a seamless, premium digital and physical experience. In fact, in many cases, they don’t see a difference between digital and physical” John Donahoe, CEO, Nike Inc

“Our brands remain well positioned to capitalise on consumer trends that have seen increased participation in surfing, camping and hiking” Xavier Simonet, CEO, Kathmandu Holdings Ltd

“One of the most interesting things we have seen in the last year is also the emergence of new cohorts of young DIY'ers, with a big increase in motivation, new skills and enthusiasm for DIY. Recent surveys we undertook across our market highlight that 18 to 34-year-olds have done more home improvement than any other age group…All of this is very encouraging for the future of our industry” Thierry Garnier, CEO, Kingfisher plc [multinational home improvement retailer]

Construction & Infrastructure

“I know that our competitors in Australia may have [based on their communicated guidance] a little bit of a different view on this but from what we see, also on the back of good infrastructure pipelines, there are significant infrastructure programs locally by state and nationally in place, we are optimistic for Australia” Dominik von Achten, CEO, HeidelbergCement Group [one of the world’s largest building materials companies]

“We are seeing very strong detached housing building approvals in Australia” Todd Barlow, MD, Washington H. Soul Pattinson Ltd

Domestic Housing

“I think they [house prices] will level out because people will run out of buying capacity” Lindsay Partridge, CEO, Brickworks Ltd

Food & Beverage

“Stores with fresh food fast have been performing well relative to control [status quo] stores within the same markets” Brian Hannasch, CEO, Alimentation Couche-Tard Inc [one of the world’s largest convenience store operators]

Transport & Logistics

“FedEx is prepared to transport vaccines to more than 220 countries and territories for as long as necessary to help eradicate COVID-19” Fred Smith, CEO, FedEx Corporation

Cryptocurrencies

“It’s more a speculative asset [cryptocurrencies] that’s essentially a substitute for gold rather than for the dollar” Jerome Powell, Chairman, US Federal Reserve

“You can now buy a Tesla with Bitcoin” Elon Musk, CEO, Tesla Inc

Automotive

“Australia is easily the most hostile environment for electric vehicles in the world” Behyad Jafari, CEO, Electric Vehicle Council [Australia’s national EV industry body]

“Every six months we do an update with a [Volkswagen] board meeting on the EV environment in Australia. They are sitting in waiting for something to change [improving regulations], you know, but nothing ever changes” Michael Bartsch, MD, Volkswagen Australia

“We also continue to be restrained from hitting full manufacturing potential given almost daily [vehicle] component availability challenges” Michael Happe, CEO, Winnebago Industries Inc

Inflation

“I cannot see a long-term rise in inflation. I talk to the chief executives who occupy Charter Hall’s $50 billion portfolio. No one I talk to predicts a wage breakout and technology will continue to be a wage deflator” David Harrison, CEO, Charter Hall Group

“We are seeing it across the globe, we are seeing inflation and it’s broad-based across commodities, across logistics, across things like aluminium and steel and so whenever you see this kind of broad-based inflation and it’s global, that’s an environment where you are going to realise net pricing [see less discounting]” Jeff Harmening, CEO, General Mills Inc [world’s 6th biggest food producer]

Employment & Workforce

“As employees return to offices, companies will discover that hybrid is hard to get right. Every meeting might have a remote participant but it's not going to feel the same as when everyone was remote…Individual work will be different too, as it will often include the need to jump on a video call without distracting others” Jim Keane, CEO, Steelcase Inc [largest office furniture manufacturer in the world]

Technology

“Creation and consumption across phones, tablets and desktops is exploding” Shantanu Narayen, CEO, Adobe Inc

“All the CEOs that I'm talking to, those who've already invested in digital are absolutely doubling down because they recognise that this is the way to further differentiate” Shantanu Narayen, CEO, Adobe Inc

Energy & Resources

“They [energy storage batteries] are getting cheaper and cheaper by the minute” Brett Redman, CEO, AGL Energy Ltd

Travel & Leisure

“In some cases, we think the airfares could be half of what they were pre-Covid and that will be there to stimulate demand. Internationally it's going to take a while for it to recover to 2019 levels” Alan Joyce, CEO, Qantas Group

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.