CEO INSIGHTS – Week Ending 26 November 2021 By NAOS Asset Management

“We’re certainly very concerned about prices edging up. It’s making people very, very nervous” Andrew Richards, CEO, Energy Users Association of Australia

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.  

Retail & Consumers

“There’s more money sitting in bank accounts in Australia than there ever has been” Gerry Harvey, Chairman, Harvey Norman Holdings Ltd

“We're expecting a really strong holiday season, and it's all being fuelled by a super-strong consumer right now, the home balance sheet has probably not been stronger than this in a real long time” Chip Bergh, CEO, Levi Strauss & Co.

“The overall athleisure trend and further casualisation of society [is driving demand]. Some of this is aided by the continued work-from-home environment, some of it by the new return-to-work hybrid model, but overall, people want to be more comfortable” Dick Johnson, CEO, Foot Locker Inc

E-Commerce

“I think we have witnessed a very healthy growth and very rapid growth [in China] and if you look at the penetration of e-commerce in many other markets outside China, I think it's still in a very early stage” Daniel Zhang, CEO, Alibaba Group Holdings Ltd

Energy Price & Markets

“We’re certainly very concerned about prices edging up. It’s making people very, very nervous” Andrew Richards, CEO, Energy Users Association of Australia

“Pollution-free energy and fuel can be made entirely at home, not imported, and by 2025, this hypothesis will be proven” Andrew Forrest, Exec. Chairman, Fortescue Metals Group Ltd

Labour Shortages & Supply Chain

“Border restrictions are expected to be relaxed in the coming months, however with demand remaining strong across all industries, labour constraints are expected to continue for some time” Rob Velletri, CEO, Monadelphous Group Ltd

“As we reflect on the [last] 18 months, I would say, I'd much rather have a supply problem than a demand problem” Sonia Syngal, CEO & Director, Gap Clothing Inc.

Building & Construction

“I would think the biggest issue facing the industry going forward is we have had one major builder collapse and I just can’t imagine that we are not going to have a number of builders collapse in the new year” Lindsay Partridge, CEO, Brickworks Ltd

Healthcare & Hospitals

“In recent years, dramatic consolidation of generic drug buying groups, pharmacy benefit managers and health insurers has created significant downward pressure on manufacturers margins, both generic and specialty brands. At the same time the out-of-pocket cost of drugs to patients is rising and prescribers are being given less choice on patient treatment” Scott Richards, CEO, Mayne Pharma Ltd

“And the other thing that I see the hospital [industry] is doing, where we're spending a lot of time with them is adoption on more remote capabilities and business models” Geoffrey Martha, CEO, Medtronic plc

Financial Advice & Markets

“The current wealth model [for financial advice] is a binary model where you pay a very large fee and get everything, or you pay nothing and get nothing” Renato Mota, CEO, IOOF Ltd

“We’ve got a real problem with trying to find advisers to come into the industry now” Matt Heine, CEO, Netwealth Group Ltd

Cryptocurrency

“In my view, consumers should approach investing in crypto with great caution. The maxim, ‘don’t put all your eggs in one basket’, comes to mind” Joe Longo, Chairman, Australian Securities & Investments Commission

“As an industry, and as a government, we need to acknowledge this is not a fad. Don’t be the person in 1995 who said the internet was just a place for geeks and criminals and would never become mainstream. And don’t be the person who argued that email was a passing fad. If the last 20 or 30 years have taught us anything, it’s that all innovation begins as disruption and ends as a household name” Jane Hume, Financial Services Minister

Aviation

“The sheer physics of flights, and the cost associated with the technologies to be developed, means that this is a lot more complex [to make electric engines] than it is with automobile technology” Tony Douglas, CEO, Etihad Airways

Travel

“It's interesting for us to note as an organisation that runs a global business to see that where demand does come back, it comes back in a hurry” John Guscic, Managing Director, Webjet Ltd

Technology & Computers

“As we look forward, all signposts point to continued strong market demand” Chuck Whitten, COO, Dell Inc

Universities & International Students

“March is traditionally one of the largest university intakes for new international students, [but] given the late timing of the government’s announcement we believe that we won’t see significant new intakes of international students in Australia until July 2022” Jake Foster, CCO, AECC Global [International overseas education consultancy]

“There is some serious global competition now for international students, with countries like Canada and the United Kingdom rolling out the red carpet” Jake Foster, CCO, AECC Global [International overseas education consultancy]

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.