NAOS CEO Insights

CEO INSIGHTS – Week Ending 27 May 2022 By NAOS Asset Management

May 27, 2022

“I'm sure as consumers, you've probably been enjoying some quite low prices on avocados. Avocado is at a dollar, but that avocado situation is plainly not good for farmers and not sustainable for farmers” Sean Hallahan, CEO, Costa Group Holdings Ltd

CEO INSIGHTS – Week Ending 27 May 2022 By NAOS Asset Management

“I'm sure as consumers, you've probably been enjoying some quite low prices on avocados. Avocado is at a dollar, but that avocado situation is plainly not good for farmers and not sustainable for farmers” Sean Hallahan, CEO, Costa Group Holdings Ltd

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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Agriculture

“I'm sure as consumers, you've probably been enjoying some quite low prices on avocados. Avocado is at a dollar, but that avocado situation is plainly not good for farmers and not sustainable for farmers” Sean Hallahan, CEO, Costa Group Holdings Ltd

“Australian agriculture is a large and attractive sector, and we have a well-established and unrivalled distribution footprint on the East Coast, a globally important food-bowl” Jeanne Johns, CEO, Incitec Pivot Ltd

“I think our sense is that the market conditions will continue to be very strong for 18 months to 2 years” Mark Allison, CEO, Elders Ltd

Healthcare

“I think on the efficiency & the cost of labour, you can't talk to any CEO on a hospital system without feeling that pain” Peter Arduini, CEO, GE Healthcare Inc

Online Advertising

“We certainly made a lot of progress with our first party [direct to customer] measurement solutions. It’s something I think the entire industry is grappling with [crackdown on third party cookies] and we may never fully recover all signals” Evan Spiegel, CEO, Snapchat Inc

Commodities & Mining

“Macroeconomic trends driven by electrification and green energy are resulting in unprecedented demand for metals....Because of underinvestment, mining firms are scrambling to find [metals] reserves to meet the expected demand” Jeffrey Olsen, CEO, Boart Longyear Group

“The demand for battery technology and elements has really gone up exponentially... I do think there is a significant focus by all mining companies to deliver on the demand” Raj Naran, CEO, ALS Ltd

Energy

“Right now it is time to decide between energy security and energy transition” Hee-Bong Chae, CEO, Korea Gas Corporation [largest LNG importing company in the world]

Technology & Hardware

“Demand is very strong. Supply is not catching up” Vladimir Mitnovetski, COO, Dicker Data Ltd

“Pre-COVID, there were some places where there was still a fear that technology takes jobs and leaves people worse off. Through the shared COVID experience I think we’ve seen that technology underpins better business resilience” Tim Reed, CEO, Business Council of Australia

Freight & Logistics

“Rather than stabilising, international freight rates on key routes have continued to increase through Q4. Capacity increases for international airline carriers have been slower than anticipated but improving” Market Statement, Lynch Group Ltd

“For Shanghai alone, the highway logistics index has dropped to 17 per cent of its year-earlier level. With over 80 per cent of total freight volume carried by trucks in China, these numbers point to a near-collapse of domestic commercial shipping” George Soros, Chairman, Open Society Foundations

Buy Now Pay Later

“The era of some of these companies using venture-based money to fund contra revenues to get placement [market share], it's done. People have to become profitable. People can't continue to lose money on these things” Dan Schulman, CEO, PayPal Inc

Macroeconomic

“Given the new government’s concerns around budget repair, we see our booming export industries playing a major role in paying down Australia’s burgeoning debt so we can more responsibly rise to meet the challenges we face as a nation” Paul Flynn, CEO, Whitehaven Coal Ltd

“Right now, the consumer seems quite healthy, despite inflation, supply chain issues, the war in Ukraine, rising interest rates, et cetera, where you would think that you would see be seeing some impact. We're not seeing it” Alfred Kelly, CEO, Visa Inc

Transport, Travel & Leisure

“How is ridesharing going to do in this new [hybrid] work environment? The commute as a percent of rides today is about 30% and pre-COVID was about 30%. So, actually, there hasn't been a massive, massive change in commute” John Zimmer, Co-founder & President, Lyft Inc

“Coming out of the pandemic, people want a holiday experience that is special but also tried and tested, and there is a huge shift to booking online” Alan Joyce, CEO, Qantas Airways Ltd

“Productivity [important with truck fleet customers] is getting greater and greater as they're struggling to find more drivers in vehicles, they need to utilise the assets more effectively and efficiently and for a longer period of time” Mark Heine, Acting CEO, EROAD Ltd

Retail Activity

“With customer traffic and activity returning in city centres, Nordstrom urban store sales collectively rebounded and reached pre-pandemic levels” Erik Nordstrom, CEO, Nordstrom Inc

Home & Outdoors

“That [lawnmower] market is changing quickly towards electrification. Handheld is moving very fast, it’s almost all battery operated. Walk behind is starting to move very quickly, too. Ride-on mowers are starting to gain some energy as well” Donald Allan, CFO, Stanley Black & Decker, Inc

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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.