CEO INSIGHTS – Week Ending 12 August 2022 By NAOS Asset Management

Consumer Demand

“Our waiting lists are expanding. We are adding ROIs [registrations of interest] faster than we are supplying watches and there is a greater spread of sales across many brands” Brian Duffy, CEO, Watches of Switzerland [Australia’s largest retailer of luxury watches]

Freight & Logistics

“In cost of sales, fuel is coming down, we know that. We know that freight is coming down. We are in that every day of our lives. We know that ocean freight is coming down” Hilton Schlosberg, Co-CEO, Monster Beverage Corp

Agriculture

“This year alone it is expected there will be an additional 80 million mouths to feed as the global population races towards 9.8 billion people in 2050. People are increasingly consuming higher-calorie diets with the emergence of middle classes in developing economies” Ed Peter, Chairman, Duxton Farms Ltd

Domestic Egg Shortage

“We took those eggs out of production [due to lockdowns] and they can’t come back into production” Brett Langfield, Chairman, NSW Farmers Federation Egg Committee

“Retail volumes are only down slightly on this time last year, which was at an elevated position due to the COVID lockdowns. Cafes and restaurants appear to have also bounced back faster than anticipated as diners have made up for lost time” Rowan McMonnies, Managing Director, Australian Eggs [egg industry body]

Consumer Privacy & Data Protection Changes

“I think we remain of a view that protecting consumer privacy is going to be an increasing part of the political or the data protection landscape that I don’t think we’re going to replace the cookie [stored internet browsing data available for third parties] with another form of identity owned either by one ad tech company or something else” Mark Read, CEO, WPP plc

Labour & Employment

“There’s less VCs [venture capital funds] out there with wheelbarrows of cash funding competition, and so we think we have a really good opportunity [for hiring talent] going forward” Mike Cannon-Brookes, Co-CEO, Atlassian Inc

“In all, there has been a slight softening over the past two to three months on both the talent demand and supply side, but it remains an extremely tight employment market” Market Statement, Seek Ltd

Chinese Consumers

“I certainly don’t see China returning to the rates of growth that we had seen previously” Tony Pearson, CEO, A.H. Beard [120 year old luxury mattress manufacturer]

Commodities

“Indian steel consumption or production is going to double in the next 10 years, which means there’s an opportunity for Australia to double its exports of coking coal shipments to India over the next 10 years” T.V Narendran, CEO, Tata Steel [one of the largest steel producers in the world]

“All options to supply timber have been exhausted and around half the mills currently have either no wood or less than two weeks supply, with some considering standing down employees” Deborah Kerr, CEO, Victorian Forest Products Association

Residential Property

“Buyers are still there and I see a world where investors will come back to the market” Owen Wilson, CEO, REA Group Ltd

Inflation

“Regarding inflation, we expect the commodity prices to remain at the high level at least in 2023, and then progressively decrease…In that context, we expect inflation to significantly decrease in 2023 after [its] peak in 2022 and [to] come back below 2% as soon as 2024” Frédéric Oudéa, CEO, Societe Generale Group

Environmental

“Our estimate is Australia’s transition to a net zero emissions economy will require $2.5 trillion to $3 trillion of investment to 2050. While ambitious, this is similar in scale to the investment in Australia’s mining boom from 2005 to 2015” Matt Comyn, CEO, Commonwealth Bank of Australia Ltd

Healthcare

“ACL believes COVID has become endemic, and testing will continue and become more akin to seasonal flu” Market Statement, Australian Clinical Labs Ltd

Technology

“Firstly, the rate of digital adoption has clearly gone to a whole new level, and we are sitting on the cusp of another wave of exciting technology innovation…and by the end of this decade 6G” Andy Penn, CEO, Telstra Corporation Ltd

Leisure

“I think a lot of onlookers look at our park business and try to sum up our success recently and say that it has something to do with pent-up demand. And certainly, there is pent-up demand. But what we're seeing is far more resilient, far more long lasting in terms of an increase in the affinity for our parks” Robert Chapek, CEO, The Walt Disney Company

Childcare

“We expect that future periods will see higher levels of new [childcare centre] supply due to the increased government support of the sector” Rob de Vos, CEO, Arena REIT [major Australian childcare property owner]

Advertising

I mentioned in my remarks, particularly the return to growth for the auto category, it's obviously something that's concerned us over the last couple of years with COVID and the softness in the auto category, the return of growth in the auto category is a really strong indicator of things to come” Lachlan Murdoch, CEO, Fox Corporation

Mergers & Acquisitions

“You have so much capital there, and so much opportunity to deploy that positively, that any slowdown in activity is going to be short term only” Richard Hersey, Head of M&A, Morgan Stanley Australia