NAOS CEO Insights

CEO INSIGHTS – Week Ending 8 April 2022 By NAOS Asset Management

April 8, 2022

“And to be honest with you, we are seeing some comeback of the tailoring business. I mean, lots of businesspeople going back to work, want to renew their wardrobe and so they are buying again” Ermenegildo Zegna, CEO, Ermenegildo Zegna N.V.

CEO INSIGHTS – Week Ending 8 April 2022 By NAOS Asset Management

“And to be honest with you, we are seeing some comeback of the tailoring business. I mean, lots of businesspeople going back to work, want to renew their wardrobe and so they are buying again” Ermenegildo Zegna, CEO, Ermenegildo Zegna N.V.

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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Cryptocurrency, DeFi & NFTs

“This generation [of investors] is more used to volatility. If you’re into crypto trading, you’re used to significant corrections” Yoni Assia, CEO eToro [multinational online trading platform]

“There’s been a lot of work the Australian regulators have put into trying to understand the technology.” Pat McNab, CEO, Mycelium [Australian bitcoin company]

“This [NFTs] is a hot consumer trend, so of course brands will be quick to jump on this…Beauty is a vast and highly connected community, so it makes sense that the industry would pivot to this technology” Christelle Young, Chief Strategy Office, L’Oreal Australia & New Zealand

E-Commerce

“There’s 1.4 million households actively shopping online every day with a broad range of products, and then the occasional shoppers are 2.5 million households, so you only need some of those to become more active and the percentage [of online sales] goes up rapidly” Paul Graham, CEO, Australia Post

“Today the cost of failure is trending so close to zero that for $29 a month [cost of an online shopfront] you can start a business” Harley Finkelstein, President, Shopify Inc

Corporate Australia

“We are seeing a sea change in the level of start-up activity and that’s a trend that’s inextricable and irreversible” Paul Bassat, Founder, Square Peg Capital

Travel, Leisure & Hospitality

“[This has been the] busiest booking week in the company's history, showing a double-digit increase from the previous record 7-day booking total” Market Statement, Carnival Cruise Line

“The on-premise segment has rebounded” Bill Newlands, CEO, Constellation Brands Inc [major global alcohol conglomerate]

Freight & Logistics

“The commodity markets are traditionally leading indicators for expansion in rail freight. Most commodities shipped by rail are experiencing upward pricing pressure from demand constraints” Bill Furman, Executive Chairman, The Greenbrier Companies Inc [major global railcar manufacturer]

Commodities

“Copper and aluminium scrap prices also traded at or near multi-year highs, benefiting from tight supplies, shipping constraints, and deployment of low carbon technologies. Demand for long [steel] products continues to rise during the quarter with prices reaching their highest levels on record primarily driven by increases in construction spending” Tamara Lundgren, CEO, Schnitzer Steel Industries Inc [leading global metals recycling company]

“Unfortunately, because of the war there’s going to be a lack of supply. We think it’s as much as 50 million tonnes of gap” Sanjeev Gupta, Executive Chairman, CFG Alliance [international industrial conglomerate]

Residential & Commercial Property

“Sydney commercial building activity was quite subdued in the first half with disruptions from lockdowns, coronavirus restrictions and workforce isolation requirements. However these impacts are now passing and activity is picking up” Market Statement, Southern Cross Electrical Engineering Ltd

“There is a lot of pent-up demand in housing” Daniel Cooper, CEO, Buckeridge Group of Companies [WA's largest homebuilder]

“If this office building costs X to build today and inflation comes, it’s going to cost X plus something, which means that the rent to justify a new building is more” Bruce Flatt, CEO, Brookfield Asset Management

Inflation

“It's clear now to everyone that inflation isn't going back to 2%” Gary Friedman, CEO, RH Inc [multinational home furnishing retailer]

“I don't think anybody really understands what's coming from an inflation point of view, because either businesses are going to make a lot less money, or they're going to raise their prices and I don't think anybody really understands how high prices are going to go everywhere, in restaurants, in cars and everything” Gary Friedman, CEO, RH Inc [multinational home furnishing retailer]

Automotive

“This is historically a unique time in which supply rather than demand is determining the size of the market” Tony Weber, CEO, Federal Chamber of Automotive Industries

Media & Advertising

“There are many signs that we are back on track and that 2022 will see us achieve or even exceed pre-pandemic annual revenue” Charmaine Moldrich, CEO, Outdoor Media Association

Workplace

“And to be honest with you, we are seeing some comeback of the tailoring business. I mean, lots of businesspeople going back to work, want to renew their wardrobe and so they are buying again” Ermenegildo Zegna, CEO, Ermenegildo Zegna N.V.

Banking & Finance

“Banks have advantages and disadvantages. Some of the advantages, including economies of scale, profitability and brand, may only diminish slowly. Unfortunately, it also seems likely that some of the disadvantages, such as uneven or costly regulation, may not diminish at all” Jamie Dimon, CEO, JP Morgan Chase & 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.