NAOS CEO Insights

CEO INSIGHTS – Week Ending 7 May 2021 By NAOS Asset Management

May 7, 2021

“Airlines will disappear. Weak airlines will become weaker, strong airlines will become stronger and hopefully margins come back to at least pre-crisis margins…So, I think once this crisis is behind us, we'll look at a more healthy industry” Carsten Spohr, CEO, Lufthansa AG

CEO INSIGHTS – Week Ending 7 May 2021 By NAOS Asset Management

“Airlines will disappear. Weak airlines will become weaker, strong airlines will become stronger and hopefully margins come back to at least pre-crisis margins…So, I think once this crisis is behind us, we'll look at a more healthy industry” Carsten Spohr, CEO, Lufthansa AG


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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Health & Beauty

“Looking ahead, we are preparing [for] a renaissance in makeup and we anticipate that momentum will gradually build around the world, driven by local reopening and social and professional occasions” Fabrizio Freda, CEO, The Estée Lauder Companies Inc.

Retail

“We feel that the next phase of e-commerce revolution will be merchant led. Thousands of new businesses have started during the past year that never even considered a brick-and-mortar store. This changes the shopping equation fundamentally” Ajay Virmani, CEO, Cargojet Inc [international air freight group]

Energy & Resources

“In energy markets, continued impacts of COVID-19 as well as very mild summer weather contributed to subdued demand and wholesale pricing across the electricity and gas markets” Frank Calabria, CEO, Origin Energy

Inflation & Raw Materials

“In the last three months, material prices have gone up further to, I would say, unprecedented levels. I think all basic materials, copper, nickel, zinc, aluminium, they're all very high double-digit up. I think the most extreme is steel” Nico Delvaux, CEO, ASSA ABLOY [world’s largest lock manufacturer]

“We’re seeing very substantial inflation. It’s very interesting. We’re raising prices. People are raising prices to us and it’s being accepted” Warren Buffett, CEO, Berkshire Hathaway Inc

“Looking ahead, we're facing a significantly higher inflationary environment. More specifically, we're seeing increases in commodities, freight and labour costs” Daniel Servitje, CEO, Grupo Bimbo [world’s largest baked goods conglomerate including Sara Lee]

Labour Market & Employment

“Most significantly, unemployment is falling and there are more people employed now than pre-COVID” Peter King, CEO, Westpac Banking Corporation

“SEEK ANZ continues to benefit from record high levels of SME hiring activity” Andrew Bassat, CEO, Seek Ltd

“Consumer sentiment has improved, and the Australian economy has largely emerged from the pandemic evidenced by, among other things, rising house prices, the unemployment rate returning to pre-pandemic levels, and job advertisement, at 13 year highs” Grant Kelley, CEO, Vicinity Centres

“While we have meaningfully increased our technician capacity during the past year, we're also faced with recruiting challenges in labour markets, which are increasingly tight” James DeVries, CEO, ADT Security Inc

Domestic Economy

“There is a sense of a boom almost” Shayne Elliot, CEO, ANZ Banking Group Ltd

Aviation & Transport

“Airlines will disappear. Weak airlines will become weaker, strong airlines will become stronger and hopefully margins come back to at least pre-crisis margins…So, I think once this crisis is behind us, we'll look at a more healthy industry” Carsten Spohr, CEO, Lufthansa AG

Tourism

“Government funded tourism voucher schemes have been extremely beneficial in stimulating domestic intrastate tourism” Market Statement, Sealink Travel Group

“This is a global phenomenon…COVID created a step functional change where people who may never have thought about alternative [non-traditional] accommodations, now they're thinking I want to go to a home that's not near people, maybe near the beach or near the mountains and I feel safer there” Glen Fogel, CEO, Booking.com Holdings

Residential Housing

“Property indicators remain positive as evidenced by record property search volumes, open home attendance, clearance rates and new account creation at Domain Home Loans” Jason Pellegrino, CEO, Domain Holdings Australia Ltd

“In Australia…residential [is] much stronger than commercial" Nico Delvaux, CEO, ASSA ABLOY [world’s largest lock manufacturer]

“I think that people have understood and consumers, homeowners have realised that equipping their home, making it a joyful, a pleasant place to be, is something important that we have learned during the crisis and that will be kept moving forward” Eric Rondolat, CEO, Signify N.V. [parent company of Philips Lighting/multinational lighting corporation]

Technology & Chip Shortage

“For markets that are opening up, where people are going back to school, going back to work, returning to their normal life, it appears they're taking mobile games with them” Frank Gibeau, CEO, Zynga Inc [multinational mobile videogame company]

“We now see over two-thirds of our bookings come through the mobile devices” Glen Fogel, CEO, Booking.com Holdings

“Larger markets, such as the US and Europe, are experiencing higher allocations [of microchips] than many countries across the APAC region” Market Statement, Dicker Data 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.