NAOS CEO Insights

CEO INSIGHTS – Week Ending 28 May 2021 By NAOS Asset Management

May 28, 2021

“People have rebelled, they don’t want to travel two hours to work and two hours back any more” Harry Triguboff, CEO, Meriton

CEO INSIGHTS – Week Ending 28 May 2021 By NAOS Asset Management

“People have rebelled, they don’t want to travel two hours to work and two hours back any more” Harry Triguboff, CEO, Meriton


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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Transport & Logistics

“We are seeing shortages on the logistic side, whether you take air, ground or sea, there is tremendous tightness in the logistics market” Monish Patolawala, CFO, 3M Company

“All key shipping sectors are [demand] firm, the [oil] tankers are lagging” Lars Barstad, CEO, Frontline Ltd [world's fourth largest oil tanker shipping company]

“We have exporters who have finally benefited from rain and have bumper crops but incredibly are now struggling to even find space on vessels loading from Australia to meet export markets. Those that can get goods shipped are now subject to exorbitant freight rates and surcharges” Paul Zalai, Director, Freight & Trade Alliance [Australia’s representative body for the international supply chain sector]

Travel

“We're seeing nice improvement as it relates to the supply situation, more drivers coming on the road, more supply hours” Dara Khosrowshahi, CEO, Uber Technologies Inc

“The business continues to benefit from increased use of private vehicles compared to public transport and an increase in domestic drive holidays” Market Statement, AMA Group Ltd

Automotive

“Encouragingly parts supply is showing signs of returning to normal frequency” Market Statement, AMA Group Ltd

Machinery & Industrials

“These [post COVID] improved fundamentals, combined with an aged fleet and low inventory levels give us confidence that the [machinery] investment cycle will continue beyond 2021. This dynamic is evidenced by order books for large tractors extending well into fiscal year 2022” Ryan Campbell, CFO, John Deere & Co

Building & Construction

“Forward indicators for market activity are pointing to ongoing robust volumes in New Zealand and Australia” Ross Taylor, CEO, Fletcher Building Ltd

Employment & Labour

“People have rebelled, they don’t want to travel two hours to work and two hours back any more” Harry Triguboff, CEO, Meriton

“I've been talking to a lot of people, both in our industry and across industries, about what they view [in the] market post pandemic and I think everybody is thinking about how the labour market is going to change” Horacio Rozanski, CEO, Booz Allen Corp [one of the largest management consulting firms in the world]

Financial Markets

“Policy settings continue to support markets for the time being, but this is priced into assets and unwinding these measures will be a complicated exercise” Raphael Arndt, CEO, Australian Future Fund

Retail

“Athleisure and fitness consumer trends continued to drive strong [shoe] demand” Richard Johnson, CEO, Foot Locker Inc

“There are tailwinds from both the strengthening consumer across the globe and in the categories where we are most present [outerwear & footwear]” Steve Rendle, CEO, VF Corporation [multinational clothing conglomerate]

“Where landlords believe we are in a normal world and we are back to pre-pandemic levels, which we are clearly not because there is a massive stimulus in the economy, we won’t operate stores where landlords have got that position” Scott Evans, CEO, Mosaic Brands Ltd

Semiconductors

“All of our businesses have more demand than supply. I will argue in the current environment if you're a semiconductor company and you don't have more demand than supply, you should be worried about it because we have everything in short [supply]” Cristiano Amon, CEO, Qualcomm Inc [leading global semiconductor manufacturer]

Technology

“The market is only about 25% into this entire cloud journey...what a hybrid [a combination of public & private] cloud environment does is it’s going to start breaking down those barriers to scale that 25% even faster. What barriers am I talking about? Data sovereignty, latency and security and regulatory requirements” Jim Kavanaugh, CFO, IBM Corporation

“Customers are now seeking to transform from a world where data informs people to one in which data drives operations directly. Data drives digital transformation. Data is the beating heart of the modern enterprise” Frank Slootman, CEO, Snowflake Inc

Food & Agriculture

“In China, the burgeoning middle class, which numbers more than 230 million people, is fuelling demand for premium berries” Neil Chatfield, Chairman, Costa Group Ltd

“Consumers today are even more concerned about their well-being and are looking for a healthier diet…and foods that help build immunity. These trends have been accelerated by the pandemic. And with governments across the world increasingly focused on the importance of diet and health, these trends are here to stay” Nick Hampton, CEO, Tate & Lyle PLC [global food ingredient 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.