NAOS CEO Insights

CEO INSIGHTS – Week Ending 30 October 2020 By NAOS Asset Management

October 30, 2020

“We do see strength across categories, basically everything that involves adventure and outdoor activity, especially golf.” Cliff Pemble, CEO, Garmin Ltd

CEO INSIGHTS – Week Ending 30 October 2020 By NAOS Asset Management

“We do see strength across categories, basically everything that involves adventure and outdoor activity, especially golf.” Cliff Pemble, CEO, Garmin 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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Supermarkets

“COVID has been the greatest sales changer that anyone has ever seen. When you have five million people locked in their homes or a panic attack across the whole country, that drives sales more than any other promotional event” Steven Cain, Chief Executive Offer, Coles Group Ltd

Retail & E-Commerce

“What we saw in the second quarter, clearly a significant disruption in a lot of areas and scarcity in certain areas in the supply chain and distribution that drove a lot of people shopping online…What we've seen in the third is it's reverting to a more normalised buyer acquisition trend and more normalised repurchase frequency for those cohorts” Andy Cring, CFO, eBay Inc

“These [recent e-commerce ASX listing] companies have…taken advantage of good market conditions, but this is the next generation of retail. You can’t put the genie back in the bottle” Mark Coulter, CEO, Temple & Webster Ltd

Residential Property

“We continue to see our customers invest more in the comfort of their homes, where many are spending more time working and studying” Mark Ronan, CEO, Adairs Ltd

“We have quite an optimistic outlook on what's going on around Australia” Mike Schneider, MD, Bunnings Group.

Travel & Leisure

“The recovery for travel is not going to be in quarters. It’s going to be in years” Glenn Fogel, CEO, Booking.com Holdings

“There's a huge amount of pent-up demand. People love traveling, they want to get out, and, by the way, even business travel. People like business travel. It's a break from the monotony, in some cases, of their work” Chris Nassetta, CEO, Hilton Hotels

Aviation

“We're seeing encouraging industry data validating the safety of air travel. Recently, IATA [International Air Transport Association] published data outlining that of the over 1 billion people who have travelled by air this year, there have been fewer than 50 documented cases of transmission” David Calhoun, CEO, The Boeing Company

“We believe there will be pressure on defence spending as a result of all the COVID-related spending that governments around the world have been experiencing. I don't think we're looking at that world through rose-coloured glasses. I expect real pressure on that market” David Calhoun, CEO, The Boeing Company

Automotive

“All of our plants are now back up and running…and really, most of them now have returned to what I would call near pre-pandemic production levels” Mike Manley, CEO, Fiat Chrysler Automobiles N.V.

Payments & Lending

“The trajectory of the recovery, where borders are now open provide some indication of how fast the cross-border business could rebound once most borders reopen” Vasant Prabhu, CFO, Visa Inc

“As a result of the overwhelming government support and our ability to manage at a granular level, so far, the [loan default levels] outcome is better than many feared. In a time of ultralow interest rates, time is cheaper than at any time in our history and so buying time through a deferral can be a very rational response for customers” Shayne Elliot, CEO, Australia and New Zealand Banking Group Ltd

“We saw [credit] card balances decline a lot and then plateau. We're still seeing that plateauing effect. I think it will take some time for balances to recover” Jes Staley, CEO, Barclays

Insurance

“Insurers have continued to increase premium rates, and volumes have held firm” Robert Kelly, CEO, Steadfast Group Ltd

Technology

“The next decade of economic performance for every business will be defined by the speed of their digital transformation” Satya Nadella, CEO, Microsoft Corporation

“I look at companies like Microsoft or Amazon and those businesses are the railways of the current era. When railways opened it liberated economies right around the world. What you have with those hyper cloud vendors [eg Microsoft Azure or Amazon AWS], they are the railways of the current era” Tony Walls, CEO, Objective Corporation

Energy & Resources

“If all the pledges of the Paris Climate Agreement were met, oil and gas would still be 46% of the energy mix in 2040. The energy transition will take time and major breakthroughs in technology will be needed” John Hess, CEO, Hess Corporation [global oil & gas producer/refiner]

“Investment in our industry tends to be global and capital will shift to the best place, so governments are aware if they get that wrong through heavy handed intervention, they can actually shift the investment elsewhere and have a negative price impact” Lawrie Tremaine, CFO, Origin Energy Ltd

Chinese Economy

“China’s economy is running. We are developing projects, it's played back to normal and the pandemic seems to be very, very well controlled” Bertrand Camus, CEO, Suez SA [global waste management/recycling company]

“According to the preliminary data, global chemical production was slightly positive in Q3 2020 compared with the prior year quarter. The resilience of chemical demand in some highly relevant customer industries is one reason for that. Another reason is China. The country continues its V-shaped recovery” Martin Brudermuller, CEO, BASF SE [world’s largest chemical manufacturing company]

Fitness & Recreation

“We do see strength across categories, basically everything that involves adventure and outdoor activity, especially golf.” Cliff Pemble, CEO, Garmin Ltd

terial 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.