NAOS CEO Insights

CEO INSIGHTS – Week Ending 6 May 2022 By NAOS Asset Management

May 6, 2022

“Most people dramatically underestimate the remarkableness of this bull run. Such things are unstoppable…”

CEO INSIGHTS – Week Ending 6 May 2022 By NAOS Asset Management

“Most people dramatically underestimate the remarkableness of this bull run. Such things are unstoppable…until they aren’t. Markets teach. The lessons can be painful” Jeff Bezos, Founder/Executive Chairman, Amazon.com 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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Housing, Home Loans & Renovations

“When interest rates fall, mum and dad sit around and they work out how much more they can borrow – falling rates increase demand for home loans…Rising rates will do the opposite” Shayne Elliot, CEO, ANZ Banking Group Ltd

“Repair and remodelling activity levels have remained strong” Heath Sharp, CEO, Reliance Worldwide Corp Ltd

Semiconductor Chips

“The chip shortage cost the US economy US$240 billion last year, and we expect the industry will continue to see challenges until at least 2024 in areas like foundry [factory] capacity and tool availability” Pat Gelsinger, CEO, Intel Corp

Financial Markets

“Most people dramatically underestimate the remarkableness of this bull run. Such things are unstoppable…until they aren’t. Markets teach. The lessons can be painful” Jeff Bezos, Founder/Executive Chairman, Amazon.com Inc

Inflation & Inflationary Impacts

“The evidence that we have received on inflation has been clear; inflation has been high, and it’s been higher than we’re expecting” Philip Lowe, Governor, Reserve Bank of Australia

“There is always some level of sensitivity [to petrol prices], but people still need to get to school, get to work, get to uni, do the shopping” Scott Charlton, CEO, Transurban Group

“I think most customers that have reported and have commented on the topic [raising prices due to inflation] have said that they've seen less demand elasticity than they expected and also less than they've seen historically, and so, so far, we've not seen a demand impact” Ronald Delia, CEO, Amcor plc

Technology & Social Media

“The AR [augmented reality] bet for us is really a bet on people loving reality and wanting to enhance that with computing instead of replacing it [reality with computers]” Evan Spiegel, CEO, Snapchat Inc

Transport & Travel

“We think that the days of you going on the street and waving your arm to hail taxis, we think those days are over. We think any entity that is dependent just on street hail is like a retailer who pretends that the Internet never happened” Dara Khosrowshahi, Uber Technologies Inc

Corporate & Workplace

“We’re now at around 85 per cent of pre-COVID levels for domestic corporate travel and more than 100 per cent for small business” Alan Joyce, CEO, Qantas Airways Ltd

“We don’t see the weekend as a two-day process anymore. We see a much longer stay pattern in leisure markets, we see a lot of the ‘I can work from anywhere’ mentality. I think that might be a trend that, if anything, ends up helping the industry” Brad Wilson, CEO, Ace Hotel Group [boutique hotel chain]

Consumer Behaviour

“It’s [customer activity] been a monstrous rebound” Les Schirato, CEO, Vittoria Coffee [Australia's largest family-owned coffee company]

“Online book sales were a major beneficiary of lockdowns and other restrictions, but as the economy returns to normal, the growth in online books sales has moderated” Market Statement, Booktopia Group Ltd

“International travel has resumed, and confidence is returning as travellers book with longer lead times and higher average spend” Andrew Burnes, CEO, Helloworld Travel Ltd

Hospitality, Retail & E-Commerce

“All major and pureplay e-commerce retailers continue to invest heavily in their online offerings in anticipation that online sales will continue to grow over the next several years” Tony Nash, CEO, Booktopia Group Ltd

“There may be a period of potential inflation or slowing year-on-year growth. However, that underlying trend of people wanting to shop online, that’s not going anywhere” Mark Coulter, CEO, Temple & Webster Ltd

Industrials & Manufacturing

“Constraints on labour availability due to the pandemic continue to place pressure on the business, impacting our ability to service the customer and operate efficiently” Market Statement, Cleanaway Waste Management Australia Ltd

“The makeup of our business has changed significantly but needs to keep changing to meet market demands and opportunities. 4 meta‐trends drive this: regional insecurity, supply chain localisation, decarbonisation, autonomy & automation” Paddy Gregg, CEO, Austal Ships Ltd

Health Insurance

“Positive industry trends seen prior to COVID have accelerated. [A positive] shift in customer attitudes towards PHI [private health insurance] continues” Market Statement, Medibank Private Ltd

Media & Advertising

“[The] TV market remains buoyant, with the FTA [free-to-air] market estimated to grow 4-5% in Q4[FY22]” Market Statement, Seven West Media Ltd

Agriculture

“The 2022 growing season to date has been favourable for olive production, with optimal flowering and fruit set supporting positive indications on crop yield” Market Statement, Cobram Estate Olives Ltd

For all enquiries please contact enquiries@naos.com.au

 

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.