NAOS CEO Insights

CEO INSIGHTS – Week Ending 4 March 2022 By NAOS Asset Management

March 4, 2022

“We are in the early innings of this transformation of work and communication” Eric Yuan, CEO, Zoom Video Communications Inc

CEO INSIGHTS – Week Ending 4 March 2022 By NAOS Asset Management

“We are in the early innings of this transformation of work and communication” Eric Yuan, CEO, Zoom Video Communications Inc

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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Tourism & Travel

“The influx [in recent bookings] suggests people have a strong appetite for travel but are booking last minute. Based on this, we’re expecting a lot of last-minute Easter bookings and another really busy travel period” Grant Wilckens, CEO, G'Day Group [Australia’s largest network of holiday parks]

Agriculture

“Australia has harvested what will be the most valuable winter crop ever” Jared Greenville, CEO ABARES [Australian Bureau of Agricultural and Resource Economics]

Commodities & Inflation

“Those global commodity prices just keep being pushed up, there’s conversations still to be had. These conversations won’t come as a surprise to anyone” Barry Irvin, Executive Chairman, Bega Cheese Ltd

“Right across electrical and furniture there are price rises between five and 20 per cent” Gerry Harvey, Chairman, Harvey Norman Ltd

Macroeconomic

“On the downside, we anticipate inflationary cost pressures to persist and supply chains to remain stretched, resulting in a very volatile supply situation across industries” Werner Baumann, CEO, Bayer AG

Trucking, Freight & Transport

“Hydrogen is significantly more expensive. Today they are twice the cost [vs electric], so the objective is about learning. But over a five-year period the cost of hydrogen trucks will come down” Mark Schubert, CEO, Cleanaway Waste Management Ltd

“The high level of underlying freight demand, which was thought initially to be a temporary phenomenon, has proven to be highly durable” George Youroukos, Exec. Chairman, Global Ship Lease Inc

Industrial & Logistics

“High demand and tight supply continued to define the industrial space, leading to rent increases and record low vacancy rates. The scarcity of land near ports and other key logistical areas is driving a supply-demand imbalance and additional supply will be needed” Christian Ulbrich, CEO, Jones Lang LaSalle Inc

Mining Services

“As the rise of electric vehicles and transition to renewable energy generation gathers pace, this is translating into significant increases in demand for metals like copper, nickel and lithium and at the same time, there's a technology shift underway in mining as the industry grapples with the ongoing challenge of all grade declines, meaning more material needs to be mined and processed” Jon Stanton, CEO, The Weir Group PLC [multinational engineering solutions provider to the mining sector]

Workplace & Employment

“We are seeing companies particularly in the technology, health and finance sector reporting strong headcount growth. We do expect that organisations will continue to hold the longer-term view that quality office space will be required, despite remote working brought about by the pandemic, with many companies leasing office space to account for headcount growth” Stephen Conry, CEO, Jones Lang LaSalle Australia

“We are in the early innings of this transformation of work and communication” Eric Yuan, CEO, Zoom Video Communications Inc

Technology & Entertainment

“Consumers are investing to improve their home office setups as hybrid work becomes the norm and when they are not working, people are looking for more immersive entertainment experience with improved video, audio and battery performance” Enrique Lores, CEO, HP Inc

Cinemas are open, blockbuster movies are being released and moviegoers are back enjoying the cinema experience” Kimbal Riley, CEO, Vista Group International Ltd

Residential Property

“Combine that [undersupply] with the return of immigration after two years of border closures, student numbers are already bouncing back, and it’s clear the next cycle [of apartment building] is beginning…it has to” Andrew Schwartz, CEO, Qualitas Ltd

Geopolitical

“It is very important that people take on a heightened level of cyber defence and cyber awareness right now, as I know many organisations in Australia including ourselves, absolutely are” Andy Penn, CEO, Telstra Corporation Ltd

“I would expect energy prices would continue to rise with that sort of conflict underway” David Coult, CEO, Yancoal

Retail

“Ultimately, we believe that stores and digital are complementary brand experiences” Fran Horowitz, CEO, Abercrombie & Fitch Co.

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.