Bear77
“In the first quarter of this year, no one noticed, but we noticed that something monumental happened in our industry where China became the number one exporter of vehicles globally. It had always been the Germans and the Japanese… you can clearly see it's a bit of a new world order” James Farley, CEO, Ford Motor Company
Source: https://emails.naos.com.au/ceo-insights-by-naos-asset-management-1686187297925 [CEO Insights - Week Ending 9 June 2023 By NAOS Asset Management]
Bear77
First off, this will be my last one of these. You can subscribe to NAOS (details below) to get these emailed to you - without the pictures. It's too time-consuming for me to continue to make these posts, and I don't feel it's worth the effort to be honest.
CEO Insights - Week Ending 10th March 2023 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 tends 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."
If you do not already subscribe and wish to receive this weekly publication of “CEO Insights” via email please click here.
Payments & Financial Services
“So, payments, you have to realise, payments is the most frequent financial services use case. Nobody does any financial service more than paying. Everybody does that a few times a day” Jorn Lambert, Chief Digital Officer, Mastercard Inc
Mortgages & Lending
“I can’t remember a time when the Australian mortgage market didn’t feel competitive” Melanie Evans, CEO, ING Bank Australia
“It’s quite hard to get an understanding, given what we’re seeing, what level of difficulty our customers will see over the course of the year” Matt Comyn, CEO, Commonwealth Bank of Australia
Retail
“The past 3 years have been the most challenging and unpredictable for our industry in more than a generation” Erik Nordstrom, CEO, Nordstrom Inc
“We have not seen any kind of downturn if you like because we are bringing in constant newness, but the growth is slowing. We’re still in growth year-on-year, but it is slowing” John King, CEO, Myer Holdings Ltd
“It is not just the traditional drivers that drive them [Gen Z] to a purchase. They think about sustainability, fair trade, the product and how it was manufactured…Customers are looking to be able to authenticate the products that they’re buying” Andrew Toon, Australian General Manager, PayPal Inc
“In this particular environment right now, every major company, every boardroom with any major brand or retailer, they're trying to figure out their cost base” Harley Finkelstein, President, Shopify Inc
Supply Chain
“Post-pandemic, and with cost-of-living pressures affecting millions of Australian families, the last thing our nation needs is another supply chain crisis” Paul Scurrah, CEO, Pacific National Ltd
Fast Food & Restaurants
“During these times, it’s [business] almost even better…If you get fast food right, it’s recession proof” Steven Marks, CEO, Guzman y Gomez
Media & Entertainment
“In addition, our consumer research indicates that music subscriptions continue to hold up very well in a challenging economic environment. Fans recognised the enormous value of music subscriptions, still a relatively low-cost, high-value form of entertainment” Lucian Grainge, CEO, Universal Music Group NV
Travel
“For the first quarter of the year, we expect our yields to be around 20% above 2019 levels, thanks primarily to the demand for leisure travel. This trend is set to continue and even accelerate in the second quarter. Booking levels here are so high” Carsten Spohr, CEO, Deutsche Lufthansa AG
Corporate Sector
“But we don't think, and we see it also in larger companies now more slowly than in the small and medium companies this [video conferencing] way of running a business doesn't work. So, individuals will travel more” Carsten Spohr, CEO, Deutsche Lufthansa AG
Price Elasticity & Inflation
“We found that even small changes in the price have a big effect on demand, very big” Elon Musk, CEO, Tesla Inc.
“Within the aggregate result, we now see the first sign that the slower rate of goods price inflation and global markets is being transmitted to Australia. There’s less inflation pressures in global market...we wanted to see that in Australia and we’re finally starting to see the first evidence that it’s being transmitted here” Philip Lowe, Governor, Reserve Bank of Australia
Building & Construction
“Conditions are the worst I have experienced in my 37 years in the industry. There will be more collapses to come. All the subbies have gone broke, so we are now employing a lot of own tradies” Scott Hutchison, Chairman, Hutchison Builders
Computers & Consumer Electronics
“[We] weren't expecting kind of a client unit volume to come down like it has this year. And so, what looked like a good level of [computer chip] inventory suddenly becomes not so good when demand has softened. But I think demand is generally stabilised” David Zinsner, CFO, Intel Corp.
Indian Economy
“I’ve been going to India for 30 years and sadly, there have been some false dawns. This time it feels different” Shayne Elliott, CEO, ANZ Group Ltd
“Energy independence is impossible for India without renewables, but with renewables it’s right in target” Andrew Forrest, Chairman, Fortescue Metals Group Ltd
Source: Mostly from this week's NAOS' Weekly "CEO Insights" email. All images have been added by me (Bear77) - this was my last one of these posts. You can see the history of these here.
Bear77
CEO Insights - Week Ending 3rd March 2023 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 tends 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."
If you do not already subscribe and wish to receive this weekly publication of “CEO Insights” via email please click here.
ASX REPORTING SEASON SPECIAL
This week, CEO Insights will focus on the reporting season that has just ended. This special edition contains a summary of quotes and market announcements from company results throughout February across a wide range of industries.
Travel, Freight, & Logistics
“It is pleasing to see traffic for the half setting a new record for the business. Our roads have benefitted from freight volumes which achieved an all-time high” Scott Charlton, CEO, Transurban Ltd
“Our forecast scenario is for a progressive destocking of inventory levels across supply chains, which is expected to result in an additional 5 million to 6 million pallets gradually returning back to our network in the second half of the year. Our expectations of a progressive destocking scenario are informed by the various discussions with customers and other supply chain participants” Graham Chipchase, CEO, Brambles Ltd
Mining Services
“The Company’s drilling clients report strong forward looking order books and resource company clients report strong ongoing exploration budgets” Market Statement, Imdex Ltd
“More broadly, favourable conditions and aging assets across all resources and energy sectors are driving strong demand for maintenance services. The shortage of skilled labour continues to be the most significant challenge for our operations” Zoran Bebic, CEO, Monadelphous Group Ltd
Commodities & Resources
“Geopolitical factors including Russian sanctions and China product export decisions are likely to continue to influence crude and refined product markets during 2023 and in the medium term, the fundamentals of supply and demand continue to support a tight market for refined product” Market Statement, Ampol Ltd
Automotive
“Consumer demand we're seeing is still up. We're seeing the new car prices are strong. This is really continuing to drive used car prices to around 40% above pre-pandemic levels. We don't think that that's going to come down quickly” Cameron McIntyre, CEO, Carsales.com Ltd
“The Company maintains a positive short-term outlook based on its continuing strong customer order book, which is in line with order levels throughout 2022” Market Statement, ARB Ltd
Retail
“I'd be very unenthusiastic about trying to extrapolate a continued strength given what's happening in the macroeconomic environment...We are seeing some mix shift, but we don't see any reason why we would be any more immune from the macroeconomic environment than another retailer” Anthony Heraghty, CEO, Super Retail Group Ltd
“Whilst we continue to recognize that there is some uncertainty in the economic outlook, up to this point, we have not yet seen any significant change to consumer spending in our categories. Many of our brands target a younger customer demographic who tend to be less impacted by interest rates and the cost of living pressures” Daniel Agnostinelli, CEO, Accent Group Ltd
Lending
“The impacts of inflation, rising rates and a tight labour market have increased uncertainty in the operating environments for many small businesses. We are seeing stress in some of our lower risk grades and have revised our commercial credit risk assessment policies in-line with these changing conditions” Greg Moshal, CEO, Prospa Ltd
“The home lending market is undergoing a period of extreme change and intense competition. There are a number of contributing factors, including aggressive volume growth, the cyclical slowing in new lending growth, the pending surge in fixed rate maturities and high levels of refinancing” Matt Comyn, CEO, Commonwealth Bank of Australia Ltd
Food & Beverage
“We are expecting more customers will be value conscious” Market Statement, Coles Group Ltd
“Customers are starting to trade in to eating at home and there’s a slow move from eating out to in the home” Brad Banducci, CEO, Woolworths Group Ltd
Media & Advertising
“Early indications suggest the market may decline mid to high single digits in the second half of FY '23, but we have limited visibility at this stage” James Warburton, CEO, Seven West Media Ltd
“Without going into too much detail…the radio ad market is returning to 2019 levels in the time frame we anticipated. Radio has commanded between 7% to 8% of total advertising every year for the past 15 to 20 years” Ciaran Davis, CEO, Here, There & Everywhere Ltd
Healthcare
“We have seen a return to more normalised trading conditions as we emerge from the pandemic, with significant improvement in patient attendance patterns and practitioner availability” Phil McKenzie, CEO, Pacific Smiles Ltd
“Healthcare, though, we expect to remain difficult for at least part of the second half. And overall, healthcare demand conditions are weaker than we had expected at the beginning of this year” Neil Salmon, CEO, Ansell Ltd
Health & Fitness
“I want to start here by saying recovery is complete, and Viva is now back from the growth strategy phase. I think this is important to highlight as there is a lot of noise stating that this industry hasn't recovered yet” Harry Konstantinou, CEO, Viva Leisure Ltd
Agriculture
“With improved weather expectations for 2023, and La Nina appearing exhausted as we head into more neutral weather patterns, we are forecasting a return to more normal growing conditions” Market Statement, Costa Group Holdings Ltd
“Moving on to costs, input costs on our grove are a big portion of our costs where, pleasingly, we've seen costs stabilize, if not lower than plan and budget. Certainly, costs, including fertilizer, fuel, electricity and rate less than expected. And we've seen a significant decrease in our water cost, which is sitting at 10-year lows” Samuel Beaton Co-CEO, Cobram Estate Olives Ltd
Households
“The [Nick Scali] Group had anticipated a slowdown compared to the Covid 19 boom yet trading remains better than pre Covid 19 despite rising interest rates” Market Statement, Nick Scali Ltd
“We are preparing for further softening in demand as higher interest rates continue to impact housing markets” Peter Wilson, CEO, Reece Ltd
Building, Construction & Infrastructure
“I worried about interest rates and its impact on demand going forward. We haven't really seen any significant impact on that yet. I mean, yes, of course, interest rates have increased from extremely low levels. But we're not seeing a cliff coming at us in any of the indicators. We're seeing still some backlog, particularly from a resi[dential] point of view” Mark Vassella, CEO, BlueScope Steel Ltd
“Turning to planned infrastructure…as part of the stimulus measures [this] did result in an increase in the tender pipeline. However, material and labour shortages have impacted the speed at which for those projects are coming to market. Demand for construction materials from the infrastructure sector is, however, expected to grow” Mark Irwin, CEO, AdBri Ltd
Employment & Universities
“We are seeing a gradual moderation in key labour market indicators and our job ad volumes” Ian Narev, CEO, Seek Ltd
Industrials
“I think the truth would be I think everybody is struggling to serve customers really well” Mark Schubert, CEO, Cleanaway Waste Management Ltd
“We're more cautious on the demand environment entering the second half” Ron Delia, CEO, Amcor Ltd
Telecommunications
“We’ll monitor what will happen, but we do think that there is now a very different situation in this market where -- all operators are under strong investment cycles. We have new technology, providing much more value to customers, faster speeds, more allowances in data at the same time that we face significant inflation. So, we do think that this [price rises] is something that is very justifiable” Iñaki Berroeta, CEO, TPG Telecom Ltd
Property
“The uncertainty caused by rising interest rates is likely to continue in the coming months but we do expect that when interest rates stabilise we will see increased activity in the property market. The Australian economy is strong, unemployment is low and immigration is increasing. Each of these underpin our property market” Owen Wilson, CEO, REA Group Ltd
“Customers are driving structural demand, which combined with the lack of supply is leading to strong rental growth in most regions” Greg Goodman, CEO, Goodman Group Ltd
“Our retailers are in good shape. There's still strong demand for the assets we have. So we're still seeing strong inquiry” Bob Johnston, CEO, The GPT Group
Technology & Consumer Electronics
“While we are pleased with the January trading result, with sales continuing to be well above pre Covid January 2020, we have seen sales growth start to moderate from the elevated levels seen in the first half of FY23” Terry Smart, CEO, JB Hi-Fi Ltd
“At the larger corporate and public sector we're not seeing any decline” Laurence Baynham, CEO, Data#3 Ltd
Financial Services
I think that there's going to be two things that's going to occur before you're going to get any respite in the [rate increase] cycle. Firstly, that generational change from being underinsured to being appropriately insured. That's probably a 2-year journey over the next couple of years. And during that couple of years, the insurers have got to drive rate. Their cost of reinsurance is horrific at this stage” Robert Kelly, CEO, Steadfast Group Ltd
Source: Mostly from this week's NAOS' Weekly "CEO Insights" email. All images have been added by me.