NAOS CEO Insights

CEO INSIGHTS – Week Ending 30 April 2021 By NAOS Asset Management

April 30, 2021

“We are missing the most simple of chips that maybe only cost cents or dollars. That’s holding us up from building a product that costs $US75,000” Ola Kallenius, CEO, The Daimler Group [owner of Mercedes-Benz & worlds largest commercial vehicle manufacturer]

CEO INSIGHTS – Week Ending 30 April 2021 By NAOS Asset Management

“We are missing the most simple of chips that maybe only cost cents or dollars. That’s holding us up from building a product that costs $US75,000” Ola Kallenius, CEO, The Daimler Group [owner of Mercedes-Benz & worlds largest commercial vehicle manufacturer]


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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Technology

“Australian businesses that have had the data stored offshore are looking to bring it back onshore” Ross McEwan, CEO, National Australia Bank

Automotive & Microchip Shortage

“I would suspect we’ll see this sort of [automotive market] buoyancy for a while yet but then we may see things start to contract marginally towards the end of the year” Mark Weaver, CEO, Peter Warren Automotive Holdings Group

“We are missing the most simple of chips that maybe only cost cents or dollars. That’s holding us up from building a product that costs $US75,000” Ola Kallenius, CEO, The Daimler Group [owner of Mercedes-Benz & worlds largest commercial vehicle manufacturer]

“We’ve had some of the most difficult supply-chain challenges that we’ve ever experienced in the life of Tesla” Elon Musk, CEO, Tesla Inc

Transport, Freight & Logistics

“We have been able to continue to supply customers with product despite tightness in raw material supply and disruptions in ocean freight capacity which has resulted in an increase in transportation transit times” Market Statement, Ansell Ltd

“Growth in our non-aviation commercial sectors has also contributed to strong diesel sales, and we are beginning to see recovery in domestic aviation sales as domestic travel resumes” Scott Wyatt, CEO, Viva Energy Group Ltd

Housing & Construction

“BlueScope is a very different type of steel company and is in a compelling position to take advantage of emerging trends, such as demand for lower density and regional housing and for e-commerce and logistics infrastructure” Mark Vassella, CEO, BlueScope Steel Ltd

“Investors have begun to return to the [residential] market, primarily focused on masterplanned communities but demand is also gathering pace in the apartment markets” Susan Lloyd Hurwitz, CEO, Mirvac Group

Office Property

“Several lead indicators of office demand have now turned positive including elevated business confidence for the financial and professional services sectors and higher levels of job vacancies” Susan Lloyd Hurwitz, CEO, Mirvac Group

“Clearly, that [office building] pressure remains very acute right now particularly in densely populated gateway cities and will remain challenging for some time to come. However, we strongly believe the pressures on Office will recede from today's extreme levels, as vaccine rollouts continue” Bob Sulentic, CEO, CBRE Group Inc

Environmental, Social & Governance

“Climate change risks are deeply imbedded in the financial system and impact all sectors and asset classes” Louise Davidson, CEO, The Australian Council of Superannuation Investors [industry body for ESG issues of superfunds & institutional investors]

“Distinctions between the corporate brand and the consumer brand are blurry. They are now two sides of the same coin and you can't build an inclusive family focused global consumer brand like McDonald's unless the corporations actions give evidence to those attributes” Chris Kempczinski, CEO, McDonald’s Corporation

Food & Beverage

“We’re seeing this unique period where there is both a continuance of that at-home consumer behaviour, as well as increasing away-from-home behaviour” Michele Buck, CEO, The Hershey Company [one of the largest chocolate manufacturers in the world]

“We are seeing overall that some of the changes that [have] happened with consumers through this pandemic, like doing more delivery, like going through drive-thru, those we expect are going to be enduring” Chris Kempczinski, CEO, McDonald’s Corporation

Agriculture

“The early indications are that the Australian total vintage will be up on last year, with estimates indicating that premium regions will be up significantly on last year’s poor vintage. Quality from this year’s vintage is exceptional” Craig Garvin, CEO, Australian Vintage Ltd

Mining & Resources

“The high iron ore price won’t last, given other lower cost countries with huge resources, and huge higher-grade resources, will come into production in future” Market Statement, Roy Hill [Hancock Prospecting’s WA iron ore mine]

“We are talking with a number of miners about building their own 5G private network on a mine location where they can provide connectivity. They do that...because to try and automate the mine with robotics they need sensors infused in everything, but that then needs to be communicated” Andy Penn, CEO, Telstra Corporation Ltd

“Favourable commodity prices support higher CapEx [capital expenditure] for mining customers. We continue to feel optimistic about mining” Jim Umpleby, CEO, Caterpillar Inc

E-Commerce

“Small business and consumer sellers are thriving” Jamie Iannone, CEO, eBay Inc

“I think more and more, especially in younger generations are interested in the re-commerce of pre-loved items and so it's why we're leaning in so much towards that” Jamie Iannone, CEO, eBay Inc

Global Economy

“Rising yields on the back of a robust recovery is a positive as opposed to rising yields solely on inflation concern. Moving away from very low rates lessens the search for yield and lessens distortions to financial and non-financial asset prices” Doug Peterson, CEO, S&P Global 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.