CEO INSIGHTS – Week Ending 11 February 2022 By NAOS Asset Management

“The toy industry is a growth industry. It's been growing for the last 10 consecutive years. It demonstrated resilience during the pandemic. It's been a very important and a strategic category for retailers. It's experiential, it drives traffic & very high engagement” Ynon Kreiz, CEO, Mattel Inc

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.  

Metaverse

“Metaverse is essentially about creating games. It is about being able to put people, places, things [in] a physics engine and then having all the people, places, things in the physics engine relate to each other” Satya Nadella, CEO, Microsoft Corporation

Universities & Education

“While Australian student placement volumes remained subdued, there have been early signs of a rebound in interest, which has coincided with the relaxation of border restrictions, and an extension of post-study work rights” Market Statement, IDP Education Ltd

Environmental

“Decarbonisation for neutrality in emissions is becoming more difficult in general because offsetting is becoming stricter in terms of what can be considered offsetting – rightly so. Either we develop significantly wider mechanisms for offsetting carbon capture or we’re in deep shit” José Manuel Entrecanales, CEO, Acciona S.A.

Automotive

“The next significant barrier to the EV industry is in kilograms, not kilowatts, so introducing lighter frames [to reduce weight] has the ability to increase output and range” Michel van Maanen, CEO, Nexport [Australia’s largest electric bus manufacturer]

Semiconductor Shortage & Supply Chain

“So we already saw a normalisation on low levels, but we are now seeing slightly increasing momentum here in this issue” Klaus Keysberg, CFO, Thyssenkrupp AG [multinational industrial conglomerate]

“From all suppliers, I’ve not seen this sort of pricing pressure for over 10 years” Simon Crowe, CEO, Grill'd Burgers

Food & Beverage

“Portion sizes are shrinking. Prices are going up. It's just insane what's happening in the restaurant industry” Ed Rensi, Former CEO, McDonalds USA

“We don't want prices to get too high, but we're in an environment where it's broad-based, it's across everything” Steve Cahillane, CEO, The Kellogg’s Company

Agriculture

“Our ports have been operating at capacity for the last year to send Australian grain out to the world and we expect this to continue well into FY23” Robert Spurway, CEO, GrainCorp Ltd

“If you take a decade-long view, [the alternative protein market] will be 20 to 30 times the size. But we’re not positioning ourselves as against meat. We’re running out of land, and cows. The world needs to produce more food in the next 30 years than it has in the entire history of humanity” Jan Pacas, CEO, All G Foods

Mining & Resources

“Large, mid-cap and junior resource companies are well funded and are increasing their expenditure to replace diminishing reserves” Market Statement, Imdex Ltd

“I don't think there's any doubt that year-on-year for the next 3, 4, 5 years out, the demand for lithium is going to continue to grow. I mean you read that if it gets too high, they'll [car manufacturers] go and try and find an alternate fuel well, it's taken them probably 30 years to get to where they have with lithium” Christopher Ellison, CEO, Mineral Resources Ltd

Domestic Economy

“We expect the strong economic momentum to carry through to at least the end of 2023 and feel very optimistic about the outlook for the Australian economy over this period” Matt Comyn, CEO, Commonwealth Bank of Australia

“Labour, labour, labour. Every CEO or head of a business I talk to, be that small business or large business, say the one issue is finding labour to grow their business” Ross McEwan, CEO, National Australia Bank Ltd

“While inflation has picked up, it is too early to conclude that it is sustainably within the target band” Phillip Lowe, Governor, Reserve Bank of Australia

Financial Services & Insurance

“There are many differing views about public blockchains, cryptocurrencies, de-fi, NFTs, etc. However, there seems little argument that blockchain technology will be one of the most important technologies in financial services over the next 10 years” Dominic Stevens, CEO, ASX Ltd

“It’s clear that the frequency and severity of natural hazard events has been increasing over recent years with that trend likely to extend into the future” Steve Johnston, CEO, Suncorp Group Ltd

Entertainment & Toys

“The toy industry is a growth industry. It's been growing for the last 10 consecutive years. It demonstrated resilience during the pandemic. It's been a very important and a strategic category for retailers. It's experiential, it drives traffic & very high engagement” Ynon Kreiz, CEO, Mattel Inc

Omicron

“In the last two weeks, the mobility recovery has rapidly resumed” Dara Khosrowshahi, CEO, Uber Technologies Inc

Residential Property

“We expect 2023/24 east coast apartment supply to be ~45% lower than 2018 levels, aided by absence of offshore developers and tighter credit availability” Market Announcement, Mirvac Group

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.