NAOS CEO Insights

CEO INSIGHTS – Week Ending 9 April 2021 By NAOS Asset Management

April 9, 2021

“As we navigate the current environment, we are seeing input cost inflation accelerate in many of our categories and across the industry” Sean Connolly, CEO, Conagra Brands Inc [multinational packaged foods brands conglomerate including brands Birds Eye & Healthy Choice]

CEO INSIGHTS – Week Ending 9 April 2021 By NAOS Asset Management

“As we navigate the current environment, we are seeing input cost inflation accelerate in many of our categories and across the industry” Sean Connolly, CEO, Conagra Brands Inc [multinational packaged foods brands conglomerate including brands Birds Eye & Healthy Choice]


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.  
 
If you do not already subscribe and wish to receive this weekly publication of “CEO Insights” via email please click here. 
 

Automotive

“This is the strongest March result in two years with private buyers representing the largest proportion of new vehicle purchasers” Tony Weber, CEO, Federal Chamber of Automotive Industries

“It's hard to know when the new car supply is going to continue to ramp up. I mean, they're obviously facing some major chip shortages. I think the supply, the tightening of the supply is going to be around here for a while” William Nash, CEO, CarMax Inc [USA’s largest used car retailer]

Transport & Logistics

“Reforms to address climate change are ushering in an era of modal shift for freight, from polluting and congested road travel to efficient higher speed rail service. This will drive significant growth in railcar demand in the years to come above and beyond replacement demand growth” Bill Furman, CEO, The Greenbrier Companies Inc [global manufacturer/repairer of railcars]

“Rail freight traffic has actually grown over pre-crisis levels in some countries” Bill Furman, CEO, The Greenbrier Companies Inc [global manufacturer/repairer of railcars]

“The spot rate on containers has gone up massively – there are less containers and less ships so there’s more demand than supply” Andre Reich, CEO, The Reject Shop Ltd

Inflation

“No matter what commodity you look at, whether its poly[ethylene], resin, oil or gas, commodity prices are up and a lot of them impact raw material costs” Bernie Brookes, Exec Chairman, Colette [handbag & jewellery retailer]

“As we navigate the current environment, we are seeing input cost inflation accelerate in many of our categories and across the industry” Sean Connolly, CEO, Conagra Brands Inc [multinational packaged foods brands conglomerate including brands Birds Eye & Healthy Choice]

Tourism, Travel & Leisure

“Around 38 per cent of Australian tourism businesses have told us they’re cutting jobs and reducing workforce hours to stay viable with the ending of JobKeeper, Sixty per cent of tourism enterprises are in a weaker position since COVID-19, 47 per cent remain open but have fewer staff, and the end of JobKeeper is having a major impact on exposed sectors” Simon Westaway, Executive Director, Australian Tourism Industry Council

“We've experienced significant latent demand upon opening new sailings this summer. In fact P&O [Cruises] opened to a single biggest booking day in seven years on the announcement of coastal sailings for its two ships this summer” Arnold Donald, CEO, Carnival Corporation [world’s largest cruise ship company]

US Economy

“I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE [quantitative easing], a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the US economy will likely boom” Jamie Dimon, CEO, JPMorgan Chase & Co.

Technology

“As the market is showing optimism with regards to a potential COVID recovery, we are seeing demand returning from industrial customers” Mark Adams, CEO, SMART Global Holdings Inc [global computer memory & storage provider]

Insurance

“The global P&C [property & casualty insurance] industry is one of the most complex and highly regulated markets in the world…It's also an industry that is undergoing significant change with the entry of new competitors and increasingly sophisticated customers who now expect a simplified digital experience” Mike Jackowski, CEO, Duck Creek Technologies Inc [multinational insurance software provider]

Retail

“I think if you ask anybody that's providing a product these days, we've seen a seismic shift [to online] over the last 12 months” Gary Medved, CEO, Mace Security International inc [global manufacturer of personal safety & security products]

Commercial Property

“The golden days of landlords milking retailers is gone. This [post COVID] is a complete reset” Paul Zahra, CEO, Australian Retailers Association

“If customers are choosing to shop a brand in store in a shopping centre then, yes, that’s a relationship with the landlord. If customers are choosing to shop online because we’ve invested tens of millions of dollars in infrastructure then landlords have nothing do with that” Mark McInnes, CEO, Premier Investments Ltd

Residential Property

“Given the environment of rising housing prices and low interest rates, the bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained” Dr Philip Lowe, Governor, Reserve Bank of Australia

Food & Beverage

“Psychology experts assert that it takes on average, 66 days for a new behaviour to become habitual…we are nearly 400 days into the COVID-19 pandemic. Consumers have adapted to at-home eating and formed new habits that we expect to sustain well beyond the current conditions and early data supports our hypothesis” Sean Connolly, CEO, Conagra Brands Inc [multinational packaged foods brands conglomerate including brands Birds Eye & Healthy Choice]

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.