NAOS CEO Insights

CEO INSIGHTS – Week Ending 6 August 2021 By NAOS Asset Management

August 6, 2021

“Looking forward to 2022 and now 2023, all our leading indicators continue to point to a roaring era for concerts and other live events” Michael Rapino, CEO, Live Nation Entertainment Inc [world’s largest ticket seller & promoter of live entertainment]

CEO INSIGHTS – Week Ending 6 August 2021 By NAOS Asset Management

“Looking forward to 2022 and now 2023, all our leading indicators continue to point to a roaring era for concerts and other live events” Michael Rapino, CEO, Live Nation Entertainment Inc [world’s largest ticket seller & promoter of live entertainment]


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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Media, Entertainment & Advertising

“There are tens of thousands of [music] tracks that are uploaded every day to streaming services around the world, literally tens of thousands of tracks and the number probably now is somewhere between half a million to three quarters of the million tracks a week that are being uploaded” Steve Cooper, CEO, Warner Music Group

“Looking forward to 2022 and now 2023, all our leading indicators continue to point to a roaring era for concerts and other live events” Michael Rapino, CEO, Live Nation Entertainment Inc [world’s largest ticket seller & promoter of live entertainment]

“Internationally [outside of the U.S], advertising has also come back in a big way” David Zaslav, CEO, Discovery Inc [owner of television brands including Discovery Channel]

Technology

“The whole area of using technology within buildings and in the broader real estate sector, I would still say, it's still relatively at the beginning. There is so much potential to use technology to make buildings more efficient, make the employees more productive when they operate in those buildings and drive better returns for owners of buildings. It is massive” Christian Ulbrich, CEO, Jones Lang LaSalle Inc

Payments & E-Commerce

“We see online payments as a large and growing opportunity representing $US10 trillion payment volume by 2024. Within that, buy now, pay later is only 2 per cent penetrated, but this is growing and there are a number of drivers supporting that long-term growth trajectory” Amrita Ahuja, CFO, Square Inc

Consumer Behaviour & Preferences

“We are seeing consumer preferences shift away from traditional credit cards, with younger demographics shifting spending habits to buy now, pay later, given their preference for predictable and transparent borrowing” Amrita Ahuja, CFO, Square Inc

“As cities reopen, these [Uber Eats] merchants are discovering that delivery demand is additive, even as in-store traffic comes back” Dara Khosrowshahi, CEO, Uber Inc

Retail

“Despite the buoyant trading conditions, there is a high degree of uncertainty in the current retail environment” Market Statement, Nick Scali Ltd

Inflation

“I do not agree that [current] inflation is transitory” Jamie Dimon, CEO, JPMorgan Chase & Co

“As always in history with inflation, it does take some time to make it to the surface and become visible and when it starts it’s much harder to control” Alexander von zur Muehlen, CEO Asia Pacific, Deutsche Bank AG

Domestic Economy

“The experience to date has been that once virus outbreaks are contained, the economy bounces back quickly” Philip Lowe, Governor, Reserve Bank of Australia

Travel

“We are, of course, closely monitoring the impact of the Delta variant on the rising COVID case counts around the world as well as some newly imposed travel restrictions, which have led to a modest pullback in our booking trends in the month of July relative to June” Glenn Fogel, Booking Holdings Inc

Construction

“Leading indicators for non-residential construction continue to improve and fiscal support for investment in capital projects is robust” Tom Linebarger, CEO, Cummins Inc [world’s largest standalone diesel engine & generator company]

Mining & Resources

“In Australia we’ve always had a workforce that moves between the east coast and the west coast depending on where the projects are, with Covid that’s become very difficult, you actually can’t get any labour in from the eastern states at the moment” Gerhard Veldsman, CEO, Roy Hill [Hancock Prospecting Pty Ltd]

Environmental

“We firmly believe lower carbon barrels [of oil] will drive our customers’ future investment decisions” Jeremy Thigpen, CEO, Transocean Ltd [world’s largest offshore drilling company]

Automotive

“The currency that matters in our industry today is how large is a vehicle’s carbon footprint throughout the whole of its life cycle?” Oliver Zipse, Chairman, BMW AG

“The visibility that we have in the automotive industry on the semiconductor supply is still quite poor” Carlos Tavares, CEO, Stellantis NV [parent company of Fiat Chrysler/Peugeot Group]

“By 2025, three of every one hundred new vehicles sold is projected to be battery or plug-in hybrid electric” Market Statement, GUD Holdings Ltd

Insurance

“As the economic outlook improves, we believe our corporate risk and broking segment will see the demand for mitigating asset exposures and other insurance and risk mitigation strategies increase set against the backdrop of a firm market” John Haley, CEO, Willis Towers Watson PLC

Commercial & Residential Property

“Asia Pacific leasing activity continues to pick up across most countries, but the pandemic resurgence is weighing on momentum across the region” Karen Brennan, CFO, Jones Lang LaSalle Inc

“The latest round of borrower support programmes will extend the duration of the subdued delinquency behaviour we have been experiencing, pushing out the timeframe over which we will obtain increased clarity regarding ultimate claims outcomes” Pauline Blight-Johnston, CEO, Genworth Mortgage Insurance Australia Ltd

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.