NAOS CEO Insights

CEO INSIGHTS – Week Ending 26 October 2018 By NAOS Asset Management

October 26, 2018

"I think we're in a golden age of travel and there are two mega-trends that are driving it. One is the huge amount of growth in the middle-class all over the world with people that have more disposable income. The other is people wanting more experiences. It really means great things for the hotel industry." 
Chris Nassetta, CEO, Hilton Hotels

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.

Travel

"Globally, the travel market is expected to grow again this year and the long-term projection from IATA is for 3.6% compounding annual growth through to 2036."
Graham Turner, CEO, Flight Centre

"Travel demand remained strong across business and leisure markets, and the resources sector continued to improve."
Market Announcement Qantas Ltd

Waste Management

"Society’s attitudes and expectations on how waste is treated have changed. Sustainability is now the driver."
Vik Bansal, Managing Director, Cleanaway Waste Management

Ride Sharing

“We want to invest very, very significantly in pool technology and mass transit, and we want to take that 100m [passengers] to a billion.” 
Dara Khosrowshahi, CEO, Uber

US Economy

"The US economy could be strong for a while…wages are going up, participation is going up, housing is in short supply. Confidence, both small business and consumer is extraordinarily high. And that could drive a lot of growth for a while...As we look at the economy, we don’t see it slowing down. It seems to be continuing to grow pretty solidly.”
Jamie Dimon, CEO, JP Morgan

Residential Property

“Over the financial year to date, we have seen a noticeable slowdown in the market with a correction of residential property values experienced across the entire real estate sector.”
Geoff Lucas, CEO, McGrath

"While changes to lending have seen market conditions return to more normalised levels, and as anticipated, sales in some sub-markets are slower, we are still seeing demand for land and medium-density residential product, particularly in Melbourne."
Susan Lloyd-Hurwitz, Managing Director, Mirvac Group

Retail

"Same store sales growth will be challenging in this volatile trading environment, particularly given the significant slow-down in residential sales, a key driver and catalyst for furniture sales."
Anthony Scali, Managing Director, Nick Scali

"There are some signs that the retail consumer is being more cautious."
Peter Birtles, Managing Director, Super Retail Group

China

“We see signs of things slowing in China; the automotive build rates are down significantly and that has a knock-on effect.”
Michael Roman, CEO, 3M

“When this channel shift is taken into account, overall growth in sales to Chinese consumers is estimated to be strong at 18 per cent…What is increasingly happening is some of the larger Australian retailers are trading directly with export businesses in Australia and meeting the Chinese demand that way [rather than directly exporting to China].”
Richard Henfrey, CEO, Blackmores

"We see a more challenging FY19 trading environment and have observed slower China cross-border growth across the [infant formula] category, as well as increased competition in terms of both availability and trade pricing for both local and global competitors."
Andrew Cohen, CEO, Bellamy's

Steel

"US steel costs are more than anywhere else in the world."
Joe Hinrichs, Global Operations President, Ford Motors

Oil

“The majority of [fuel] refineries are running at their maximum."
Dario Scaffardi, CEO, Saras [multinational fuel refiner]

Mining

 “It has been an excellent quarter in terms of operating performance, and in terms of the regulatory environment, where we are moving in the right direction.”
Amanda Lacaze, CEO, Lynas Corporation

Thank you for reading.

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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.

NAOS Insights CEO Insights

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