NAOS CEO Insights

CEO INSIGHTS – Week Ending 7 June 2019 By NAOS Asset Management

June 7, 2019

What we've seen over the last few years, has been a transition from e-books into audio. So we have seen that transition e-books percentage of digital revenues probably come down a little, audio books has gone up.” Susan Panuccio, CFO, Newscorp

CEO INSIGHTS – Week Ending 7 June 2019 By NAOS Asset Management

What we've seen over the last few years, has been a transition from e-books into audio. So we have seen that transition e-books percentage of digital revenues probably come down a little, audio books has gone up.”
Susan Panuccio, CFO, Newscorp

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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Travel & Tourism
 
"All told, following a period of relatively stable demand over much of last year, a downward trend in seasonally adjusted Revenue Per Kilometre [for Australian airlines] began to emerge from late-2018.”
Alexandre de Juniac, CEO, IATA [International Air Transport Association]
 
Technology & Software
 
"We can continue to be optimistic on the long-term view of the market that IT growth is going to outpace GDP growth. Enterprise and software growth will outpace IT growth."
Pat Gelsinger, CEO, VMware Inc [NYSE Global Listed Software Company]
 
“What I have learned in the last seven years during my time at Telstra is that almost every industry, every leader, every government is underestimating the level of technological change that is coming."
Andy Penn, CEO, Telstra
 
"I'm so enthusiastic about 5G for reasons I don't read much about because I think it's going to transform the enterprise. And so that wireless growth will obviously do some things that are going to be a challenged in the marketplace. It's likely to be the WiFi killer. It's likely to be the next-generation local area network. So it's going to be a disruptive thing."
 John Donovan, CEO, AT&T Communications
 
"Today, if you look at the servers that are being deployed in hyperscale and in enterprises now, they're compute-rich. They often have four, eight or 16 GPUs [Graphics processing units] per server because the more compute that you put inside the box, the more performance that you get for your dollar. And they're starting to really dial up the interconnect." 
Ian Buck, VP Accelerated Computing Business Unit, NVIDIA Corporation
 
Building & Construction
 
"A more concrete action plan along those lines is definitely a must-do in the civil construction industry in the state of NSW, and in all of Australia, because you have a huge backlog of projects, probably one of the biggest backlogs of projects in the world."
José Manuel Entrecanales Domecq, CEO & Chairman, Acciona [Spanish conglomerate group dedicated to the development and management of infrastructure and renewable energy]
 
Resources
 
"The global [aluminium] supply and demand balance we expect to be still in deficit if we look at the global supply/demand. China is in balance but the rest of the world is still in deficit." Hilde Merete Aasheim, CEO, Norsk Hydro
 
Finance
 
"The whole [payments] industry has been late to really be focused on B2B [business to business], and we still don't have enough players focused on B2B."
Al Kelly, CEO, Visa Inc
 
Domestic Economy
 
 
 “There are clear pockets of slowing demand as a result of drought, decline in housing construction, falls in house prices, tightening business credit, rising energy prices and concerns about global trade tensions."
Innes Willox, CEO, The Australian Industry Group
 
“There’s very limited firepower for further [RBA] cuts if things continue to deteriorate.”
Alison Watkins, CEO, Coca-Cola Amatil
 
“The decision to cut interest rates, although small, is a net positive signal to consumer spending and will be further reinforced by upcoming income tax relief."
Cameron McIntyre, CEO, Carsales.com
 
“Now that the Federal election has been finalised, we are optimistic that the market will improve over the next few months [For new car sales].”
Tony Weber, CEO, FCAI [Federal Chamber of Automotive Industries]
 
Global Economy
 
"It's our assumption that PCE [personal consumption expenditure] will generally grow in the 4% to 5% range."
Sachin Mehra, CFO, Mastercard
 
"Now realistically and practically, we are hoping that once we get to the third quarter, the rate of reduction that we've seen in Chinese tourism, we're hoping that, that moderates because frankly with such a swift decline, it would be kind of hard to believe that year-over-year, we could see a continuing step-down of that magnitude."
Mark Erceg, CFO, Tiffany & Co Inc
 
"In the U.S., there's solid growth which we observed. There's strong consumer confidence, there's low unemployment rates, those are all positive trends."
Sachin Mehra, CFO, Mastercard
 
Aged Care
 
Our lower average occupancy [in residential aged care] for the period is consistent with industry wide occupancy trends."
Regis Healthcare market update
 
Property
 
“The economic outlook for Brisbane is strong, with positive employment growth forecast to continue and Queensland’s economic growth also anticipated to continue to outperform the Australian average.”
Adrian Pozzo, CEO, Cbus Property [Integrated Property Investor]
 
Publishing & Media
 
"Despite incremental revenue associated with the Federal Election, advertiser sentiment in regional advertising markets has remained soft over recent months."
Market Announcement, Prime Media Group Ltd
 
What we've seen over the last few years, has been a transition from e-books into audio. So we have seen that transition e-books percentage of digital revenues probably come down a little, audio books has gone up.”
Susan Panuccio, CFO, Newscorp
 
We know from our research that there's probably 6 million to 8 million Australians, that are incredibly passionate about sports and then of that base, we probably have up to about 4 million who are willing to pay for content in some way shape or form.”
Susan Panuccio, CFO, Newscorp
 
 
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.