NAOS CEO Insights

CEO INSIGHTS – Week Ending 5 August 2022 By NAOS Asset Management

Written by NAOS Admin | Aug 4, 2022 11:27:58 PM

"In previous quarters, we've talked about how we saw significant growth driven by surges in domestic travel as well as travel to rural destinations. Now these trends continue. But we're also seeing guests returning to cities and crossing borders above pre-pandemic levels" Brian Chesky, CEO, Airbnb

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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Banking, Debt Market & Lending

‘‘Banks and the Australian Tax Office are returning to normal in terms of their approach in administering outstanding debts, and that’s putting pressure on many businesses who have had some breathing space’’ Andrew McKellar, CEO, Australian Chamber of Commerce and Industry

“In Australia it just continues to run off. There’s nothing that suggests people have exhausted their resources or [are obtaining other] credit in any way" Thomas Beregi, CEO, Credit Corp

Consumer Demand

"We have seen so far no change in consumer behaviour and we have seen so far no slowdown in overall consumer demand" Yves Müller, CFO, HUGO BOSS Group

Inflation

"Over 70% of drivers say inflation has played a part in their decision to come on to the platform [Uber]" Dara Khosrowshahi, CEO, Uber

“You’ll see rates hold up for the remainder of the year. Our cost increases are real. Our customers understand that” Fritz Holzgrefe,C EO, Saia LTL Freight [Large North American Trucking Company]

"I see the effect of this inflation cost in particular when it comes to gasoline, logistics” Jean-Marie Tritant, CEO, Unibail-Rodamco-Westfield SE

"I don't expect that we will see 2% inflation in the coming 12 months. But I can foresee that there will be a significant reduction in inflation in the coming 6 to 12 months and that we might be able to avoid the truly damaging wage price inflation spiral that was so problematic in the 1970s" James S. Tisch, CEO, Loews Corp [Diversified American Conglomerate operating in insurance, energy, hospitality and packaging]

“Across the [gold mining] industry, we are seeing projects suffer from cost escalation, as well as increased cost of capital at a time when commodity prices are declining” Allen Palmiere, CEO, Gold Resource Corporation

Global Economy

“The U.S. economy is quite resilient. I can't predict whether there will or won't be a recession, but I do know that we'll get through this” David Solomon, Chairman & CEO, Goldman Sachs

"We continue to observe a challenging global environment and an uncertain economic outlook. Whilst consumer demand in aggregate has been resilient in the first half, there is increasing risk that mounting pressure on consumer purchasing power will affect beer consumption" Harold Van Den Broek, CFO, Heineken NV

Employment Market

"As I look at what's going on, I have a hunch that we may be in for what I would call a full employment recession. The current unemployment rate is 3.6% and job growth for the past year and a half has averaged 400,000 new jobs per month, while job openings are about twice the number of job seekers" James S. Tisch, CEO, Loews Corp

Travel & Leisure

“We are not seeing any signs of any demand pullback at this point...People want to get out there and travel" Leeny Oberg, CFO, Marriott International Finance

"In previous quarters, we've talked about how we saw significant growth driven by surges in domestic travel as well as travel to rural destinations. Now these trends continue. But we're also seeing guests returning to cities and crossing borders above pre-pandemic levels" Brian Chesky, CEO, Airbnb

"The industry worldwide is facing unprecedented operating challenges as it emerges from pandemic-related restrictions. In Canada, we have gone from a near two-year shutdown of air travel back to capacity levels close to 80% of 2019" Michael Stewart Rousseau, CEO, Air Canada

"Demand continued to build globally and we're currently in the busiest summer travel season I've ever seen. Demand has accelerated, rates have elevated, and advanced bookings are strong. And while there is uncertainty surrounding the economy at large, we have not seen it" Joseph Ferraro, CEO, Avis Budget Group

Construction & Infrastructure

"Rising construction costs and interest rates will cause increases in economic rents for new developments and tempering supply" Market Announcement, Centuria Office REIT [Large Australian Office REIT]

Cryptocurrency

“We have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity” Vlad Tenev, CEO, Robinhood [Leading U.S. Equity and Crypto Trading Platform]

Globalisation

“Every company that I speak to at the moment is engaged in rethinking their [China-focused] supply chains, because they anticipate that our politicians will inevitably accelerate towards a decoupled world from China” Tony Danker, Director-General, Confederation of British Industry

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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. 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.