CEO INSIGHTS – Week Ending 1 July 2022 By NAOS Asset Management

“I believe internet traffic keeps going up and up, whether [the] tech bubble burst or the financial crisis took place, I have no doubt the internet revolution keeps evolving and AI [artificial intelligence] keeps evolving” Masayoshi Son, CEO, SoftBank Group

“Notwithstanding this [challenges with food delivery by drones] in the near term, as drone technology improves, we are likely to see increased carrying capacity and battery life, enabling larger delivery areas” Drew O’Malley, CEO, Collins Foods Group Ltd

“Digital technologies play a fundamental role in Australia’s way of life, but we risk falling behind as a technologically driven nation unless we recognise the importance of digital technology in schools and as a sector in their own right” Kylie Walker, CEO, Australian Academy of Technology and Engineering

Food & Beverage

“Consumer confidence has been down for about 6 or 7 straight months. People are going to be tight right now as mortgage and petrol prices take a bigger cut. So you are going to see a lot more of that, and you do see trade down from other [food] categories into QSR [quick service restaurants]” Drew O’Malley, CEO, Collins Foods Group Ltd

“While consumers are reporting increasing concerns about the economy, these concerns have not yet translated into significant behaviour change for beverage alcohol shoppers” William Newlands, CEO, Constellation Brands Inc

Agriculture

“[The Australian rice resurgence] has us well placed to benefit this year from an environment where key markets are undersupplied due to factors, including broader disruption from the Ukraine conflict and a number of rice growing regions, either in or entering drought around the world” Robert Gordon, CEO, Ricegrowers Ltd

“In summary, [almond] growers need the pricing to increase because the significant proportion of growers are running at a cash loss” Paul Thompson, CEO, Select Harvest Ltd

Financial Markets

“Some investors trade against evolution. Some investors are contrarian. I think they will get hurt a lot. You can't trade against evolution because vehicles should win over horses, vehicles or cars beat horses” Masayoshi Son, CEO, SoftBank Group

Electrification

“Every new car sold in the world will be electric by 2040” Darren Woods, CEO, ExxonMobil Corp.

Macroeconomic

“We are definitely not assuming a prolonged deep recession” Rajesh Subramaniam, CEO, FedEx Corp

Leisure & Holiday

“As we have seen in prior cycles, even in downturns, employed people take vacations. And that's even more true in today's environment where people prioritize spending on experiences over spending on things” Arnold Donald, CEO, Carnival Cruise Corporation Plc

Healthcare & Packaging

“We believe that pharma[ceutical] packaging will consolidate over the next years as pharma customers will require more innovation, system solutions and very important compliance with ESG rules” Peter Oswald, CEO, Mayr-Melnhof Karton AG [major global packaging company]

“Laboratory medicine [pathology] informs almost every aspect of modern medicine” Colin Goldschmidt, CEO, Sonic Healthcare Ltd

Inflation

“Group unit costs have been impacted by lower production at the Australian assets and industry cost inflation circa 8% across all assets which has persisted at these higher levels into the second quarter. Key inflationary impacts were on labour, transport, fuel, explosives and ground support” Market Statement, Oz Minerals Ltd

“With the prospect of higher wages as workers look to make up for the purchasing power they lost, inflation could be high for long” Agustín Carstens, General Manager, Bank for International Settlements [BIS]

Residential

“We've not seen any impacts of any housing price changes on demand. As we've noted, there remains quite a significant pipeline of renovation and new home builds in published publicly available data particularly through HIA [Housing Industry Association]” Doug Jones, CEO, Metcash Ltd

De-Globalisation

“There is certainly a risk that the benefits of globalisation will be lost… That would be a world of lower productivity, and lower incomes over time” Jerome Powell, Chairman, US Federal Reserve

Labour Markets

“[Labour suitability] it’s as bad as we’ve had it since the early nineties. There’s a very significant gap between what our working age population would look like if we hadn’t had COVID and what it does look like today” Kendra Banks, Managing Director ANZ, Seek Ltd