CEO INSIGHTS – Week Ending 26 August 2022 By NAOS Asset Management

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.  

Technology

“Consumers are migrating at pace to digitally enabled listening across multiple platforms and devices. It is inevitable that listening in an IP-enabled manner will become the norm and be the dominant mode of consumption of audio over time” Grant Blackley, CEO, Southern Cross Media Group Ltd

“You have to look at the flaws of the Zoom world. It doesn't work for an apprenticeship program. It doesn't work for spontaneous stuff” Jamie Dimon, CEO, JPMorgan Chase & Co

"I think there’s about 4 billion of them [chatbots] around the world now…it is going to be kind of a game-changer for us, as there are so many use cases out there now” Scott Collary, COO, Westpac Banking Corp

Consumer Preferences

“Delivery is the fastest growing category of the global QSR [quick service restaurant] industry” Market Statement, Domino’s Pizza Enterprises Ltd

Competition & Regulation

“The growth of smaller providers is increasing the competitive tension in broadband markets, and many Australians will see the benefit of that” Anna Brakey, Commissioner, Australian Competition & Consumer Commission

“If people make outrageous claims about their green credentials and don’t have anything to back them up, that’s not something we are going to tolerate” Joseph Longo, Chairman, Australian Securities & Investments Commission

E-Commerce

“As the pandemic settled, e-commerce could not grow in the way many in the industry expected” Ruslan Kogan, CEO, Kogan.com Ltd

Workplace

“We believe that CBD audiences will remain highly valuable for advertisers and are envisaging a likely 3 to 4-day work week for the foreseeable future” Catherine O'Connor, CEO, oOh!media Ltd

Supply Chain

“What does a hammer, a Rolex and a coffee machine have in common? Believe it or not, if you oversee the company's supply chain, all 3 are exactly the same. They are long life cycle, nonseasonal products with seasonal selling patterns. This means consumers buy the same product every month of the year, year after year, but you might sell more in Christmas than in other times of the year” Jim Clayton, CEO, Breville Group Ltd

Macroeconomic

“The speed of the correction is something no-one predicted” Neil Salmon, CEO, Ansell Ltd

Labour Shortages

“Well, there certainly isn't excess industry capacity. The collision repair industry is typically characterised by a shortage of skilled labour. That has led to tightness of availability in the collision repair space and as a result, repair times have lengthened” Carl Bizon, CEO, AMA Group Ltd

“Staff retention is damn hard, everybody knows that” Kees Weel, CEO, PWR Holdings Ltd

“There’s all sorts of risk associated with supply chain this year when it comes to driver availability, pallet availability” Steve Donohue, CEO, Endeavour Hospitality Group

“The only way we can fix this problem is let more people come into the country” Anthony Scali, CEO, Nick Scali Ltd

Housing Market

“I've experienced most of these [downturns] myself, but I’ve looked historically at the last nine sales corrections and most of them last less than 18 months in longevity…We think we’re certainly nine months into [this down cycle] thereabouts at least” John McGrath, CEO, McGrath Estate Agents Ltd

“I think a lot of baby boomers post COVID, they're just saying we want to do it now…baby boomers want to make the move downsize, throw some cash in, start ticking off the bucket list” James Kelly, CEO, Lifestyle Communities Ltd

Agriculture

“With a carbon footprint that is estimated to be around 5x smaller than red meat, chicken is the green animal protein, and this will continue to be an important additional underpinning for the sector as we go into the future” Anthony Reeves, CEO, Inghams Group Ltd

Healthcare

“[A] major thematic is so much future health care will occur outside of traditional settings, and in particular hospitals. It'll occur in lower distributed, more specialist settings of care, including in people's homes, and we're seeing this trend accelerate already and, of course, COVID-19 has added impetus to that shift” Mark Fitzgibbon, CEO, nib Holdings Ltd

Commodities & Resources

“I would say on the cost inflation side of things, we have managed through the cost inflation pressures quite well over the last 12 months. We're probably seeing some early signs of commodity prices coming down” Anthony Lombardo, CEO, Lendlease Group

“To be honest, we are seeing the coal customers we support looking at new fleets and investing in fleets” Ryan Stokes, CEO, Seven Group Holdings

Credit Cards

“In credit cards, we've not seen any significant impact…While delinquency rates have increased slightly, they remain near historical lows. We expect credit cards to be less negatively impacted by a mild recession than personal loans” Sasan Goodarzi, CEO, Intuit Inc [parent company of accounting software Quickbooks]

Travel & Accommodation

“Caravan and camping proved resilient over 2021 with a total of 50.6 million visitor nights…now the largest domestic accommodation provider” Market Announcement, Ingenia Communities 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. 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.