CEO INSIGHTS – Week Ending 24 March 2023

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.  

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Macroeconomic

“We cannot beat inflation by raising interest rates but we raised them and inflation is still there. Now the world bankers are panicking. So I am sure that interest rates have stopped going up” Harry Triguboff, Chairman, Meriton

“The process of getting inflation back to 2 per cent has a long way to go, and is likely to be bumpy. At the end of the day, we will do enough to bring inflation down to 2 per cent. No one should doubt that” Jerome Powell, Chairman, US Federal Reserve

Supply Chain

“Supply bottlenecks have been and still are a challenge, even though there are noticeable improvements” Thomas Olemotz, CEO, Bechtle AG [multinational IT products & services company]

“So we absolutely are having a lot of conversations with customers. They want to diversify their supply chain…But I do want to be clear that it is a future conversation. From a magnitude perspective, we do not see any short-term large shifts that would change the position of China being the world's manufacturer” Brie Carere, Chief Customer Officer, FedEx Corporation

Technology & IT

"I don't think we'll see a cutback [on staffing remuneration]…That could obviously change if this downturn gets worse, but what it has seemed to be is more of a flattening and higher accessibility of talent, but we have not seen a pullback” Chris Hulls, CEO, Life360 Inc

Manufacturing

“There is simply no sugar-coating the outlook for Australia’s manufacturing sector in the year ahead...With profits being squeezed, many local manufacturers have little option but to increase prices to ensure they remain viable” Andrew McKellar, CEO, Australian Chamber of Commerce & Industry [ACCI]

Commodities & Resources

“We are in a world where the adoption of electric vehicles and industrial decarbonisation continues to increase demand for high-grade nickel sulphide” Gabrielle Iwanow, CEO, Mincor Resources

Automotive

“We are very aware that competition [in the EV industry] will become tougher” Arno Antlitz, CFO, Volkswagen Group

Lifestyle & Outdoors

“We keep looking for signs that consumer sentiment is softening but until now, consumers are showing an amazing resilience to continue to spend” Michael Daly, CEO, KMD Brands [owner of outdoor brands including Kathmandu & Rip Curl]

“Engagement in the outdoors continues to be extremely healthy during 2023” Michael Happe, CEO, Winnebago Industries Inc

Retail & Fashion

“I'll be honest with you, a lot of things that resonate and incorporate in sneaker culture around the world find their place starting in the Europe market. And so our closeness to the consumer in that market is critical not just to drive growth in that region but to drive trends and behaviour in markets outside of that region” Mathew Friend, CFO, NIKE Inc.

Agriculture

“Global market almond pricing is increasing with a number of positive indicators” David Surveyor, CEO, Select Harvests Ltd

Residential

“Across Building Products [Division], we are confident that sales will remain resilient in the second half. However, there is no doubt that a slowdown in activity will arrive before the end of the calendar year, once the existing pipeline of work is built out” Lindsay Partridge, CEO, Brickworks Ltd

Commercial & Industrial Property

“Hotels [& pubs] over the past five to seven years have probably increased in value without any major reason. I see that slowing up” Arthur Laundy, Laundy Hotels

Financial Services

“The growth of digital economy businesses is at risk if start-ups can’t get banking services and all of the growth and subsequent efficiencies, productivity and job growth that go alongside that” Peter Cook, CEO, Novatti Payments Group Ltd

Inflation

“I mean, so far, we have continued to see the [snack food] category be very resilient…We do know that all consumers and especially lower income consumers are needing to make a lot of different choices. I think about half of consumers say that inflation is impacting their food purchases” Michele Buck, CEO, The Hershey Company

Industrials

“So, I would tell you clearly, in '22 and '21 everybody, not just Timken, but customers, distributors, were trying to build inventory or were carrying extra inventory to compensate for supply chain challenges… I wouldn't say we feel the need to de-stock significantly given the demand environment out there, but take steps to optimise our inventory” Philip Fracassa, CFO, The Timken Company [major multinational bearings manufacturer]

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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. It does not constitute an offer to purchase any security or financial product or service referred to herein. It does not take into account the investment objectives, financial situation or needs of any particular investor. Before making an investment decision, investors should consider obtaining professional investment advice that is tailored to their specific circumstances. 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.