CEO INSIGHTS – Week Ending 31 May 2024

Households

“We are particularly pleased to see a proportion of house policies start to increase as we focus more on the home insurance market. We know that our home insurance customers hold more policies and stay longer than motor customers.” Blair Turnbull, CEO, Tower Insurance

Standard of Living

“The facts are clear. The demand in oil keeps increasing and will continue to do so because the International Energy Agency foresees a demand of 105.7 million barrels per day for 2028 against 102.1 million barrels per day in 2023. This is explained by the growth of the global population, mainly in the global South. Of course, they want a better standard of living. And of course, we need more energy.” Patrick Pouyanne, CEO, TotalEnergies SE

Innovation

“If you go back, when I started in this business, the vast majority of innovation was funded really in the government…If you look at the way things work now, the flow of innovation is really in the other direction. The funding for innovation that the private sector can provide now outspends the government every year.” Horacio Rozanski, CEO, Booz Allen Hamilton Holding Corp.

Banking & Credit

“Market conditions remain challenging. Deposit and lending competition has been significant and wholesale funding costs remain elevated.” Market Announcement, Auswide Bank Ltd

“Stability is returning to funding spreads.” Mario Rehayem, CEO, Pepper Money Ltd

“By definition, our product is an occasional use transactional product. So you don't get up and send money home every day as part of your normal existence to live and to do whatever you do. Some of our customers only send money at holidays or birthdays” Devin McGranahan, CEO, The Western Union Co.

Retail

“Retail is emerging from a long recession, with retail sales volumes increasing by 0.3% in the December quarter [following four quarters of decline].” Market Announcement, Retail Food Group Limited

Supply & Demand

“A significant increase in vehicle supply by OEMs has led to greater competition between dealerships and lower gross profit margins on new vehicles. The contraction in new vehicle margins has occurred across the industry and is the most acute in brands and models where supply levels and inventory holdings are highest.” Market Announcement, Peter Warren Automotive Holdings

Commodities

“For '23, global primary aluminium production reached a record level of 71 million tonnes, representing a 2% year-on-year growth… An improving global economy is expected to boost aluminium consumption in '24.” Michael Ferraro, CEO, Alumina Ltd

Property Development

“We are in a situation where the government is taking the majority of the trade capacity into hospitals and roads and tunnels. It’s killed the opportunity for developers to be able to deliver residential homes.” Tim Gurner, Founder, Gurner Group  

Geopolitical & Trade

“Trade is always collateral damage when politics breaks down…‘We’re Johnny on the spot’ to take back that market share now. I anticipate a very strong year for Australian beef.” Patrick Hutchinson, CEO, Australian Meat Industry Council

Medical Supplies & Pharmacies

“The macroeconomic environment remains challenging and intensely competitive. Sigma, however, operates in a more defensive market segment that is less susceptible to fluctuations…However, in such a competitive and regulated market, we are restricted in our ability to pass on cost increases” Vikesh Ramsunder, CEO, Sigma Healthcare Ltd

Sports & Technology

“The professional sports technology market is expected to reach more than $40 billion by 2026 across 20,000 elite teams. With live sports being one of the last vestiges of live entertainment, we expect growth and investment in our industry.” Will Lopes, CEO, Catapult Group International Ltd

Global Economy

“We continue to see the consumer be healthy. Obviously, we are monitoring both headwinds and tailwinds as part of this process. None of this will be new news to you. On the tailwind side, we've got very strong employment markets which are there across the globe. We've got strong wage growth which is taking place. In several markets, wage growth is running at paces ahead of the rate of inflation.” Sachin Mehra, CFO, Mastercard Inc

Energy Transition

“Power use in the US for the last 20 years had basically been flat and is now starting to grow at 3% to 4% [due to the energy transition]” Jonathan Gray, COO, Blackstone Inc

Printing & Workplace

“Turning to Print...We continue to see soft demand, particularly in China and some parts of Europe. The pricing environment remains competitive in consumer with intensifying pressure in commercial.” Enrique Lores, CEO, HP Inc.