CEO INSIGHTS – Week Ending 24 February 2023

“For 30 years the technology changes in our industry were at a snail’s pace. But in the past five to 10 years there has been a whole generation of new technology that has just taken off” Anthony Pratt, Exec. Chairman, Visy/Pratt Industries

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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Healthcare

“There are estimates that we’re going to be 10,000 GPs short in the next seven years and there’s only 30,000 of them” Carmel Monaghan, CEO, Ramsay Health Care Australia

“But the historian in me knows that since World War II, we've spent GDP plus 2% more in our healthcare. So the idea that somehow healthcare spending is going to find this new trajectory of somewhere between 1% and 3% growth, I just don't think it's realistic. Which means, our challenge becomes can we manage that level of inflation?” Mark Fitzgibbon, CEO NIB Holdings Ltd

Media & Entertainment

“Globally, Gen Z consumes more audio content per day than all forms of TV viewing combined” Market Statement, Here, There & Everywhere Ltd

"And streaming is not new. It's been around for a while now, and it's been right through COVID. If people wanted to truly change their behaviour, they've had plenty of time to adjust…if there's a great blockbuster people want to come out and see it on the big screen” Jane Hastings, CEO, Event Holdings Ltd

Advertising Spend

“In terms of what we're seeing in oOh!media's numbers, there are a couple of categories in particular in Q1 that are really in growth, and they would be travel and automotive” Catherine O'Connor, CEO, oOh!media Ltd

“And in fact, in uncertain economic times, radio actually tends to come into its own and perform relatively well to other media. It's short, it's immediate, it's very cost effective. And brands know and trust it very, very well” Ciaran Davis, CEO, Here, There & Everywhere Ltd

Commodities & Resources

“Our thesis on China has been buoyed by the green shoots that we’ve seen since the start of this calendar year… There’s a lot there that’s giving us that confidence that we will see an acceleration of the Chinese domestic economy” Mike Henry, CEO, BHP Group Ltd

“What was very evident was the chase that’s now on and the way that many other nations are competing for capital. I didn’t have enough time in my calendar to be able to accommodate all of the government leaders from various nations who are chasing further investment into their resources industry” Mike Henry, CEO, BHP Group Ltd

“Substantial growth in aluminium demand is forecast in the coming decade. Of the 29 million tonnes of additional demand by 2032, 60% will come from transport, construction and electrical sectors” Michael Ferraro, CEO, Alumina Ltd

Cybersecurity

“The average time from when a user clicks on a phishing link to an attacker getting access to critical data used to be days. It’s 72 minutes now. That’s not a lot of time for an organisation or defender team to contain the escalation of an attack” Vasu Jakkal, VP of Security, Microsoft Corp.

Consumer Behaviour

“Membership programs are coming back into vogue globally” Brad Banducci, CEO, Woolworths Group Ltd

Packaging & Manufacturing

“For 30 years the technology changes in our industry were at a snail’s pace. But in the past five to 10 years there has been a whole generation of new technology that has just taken off” Anthony Pratt, Exec. Chairman, Visy/Pratt Industries

Commercial Property

“I think we'll see a continuing decline in rents in shopping centres with the exception of the guys that are particularly good in those real A-grade centres” Mark Ronan, CEO, Adairs Ltd

“We are seeing demand from tenants who want to be in high quality [office] buildings with strong sustainability credentials and amenity…There is clearly a flight to quality as businesses use both flexibility and their workplace to attract talent” Robert Johnston, CEO, The GPT Group

Macroeconomic

“The inflation in the environment is still pretty tough. Probably it's not easing as quickly as I think some might have expected” Andrew Reeves, CEO, Inghams Group Ltd

Housing

“Days on market [for houses] across regional locations [is] increasing significantly from last year” Simon Owen, CEO, Ingenia Communities Ltd

Automotive

“It seems to put people on edge, I think consumer knowledge about EVs, range anxiety, how it charges, where I plug it in... I don’t believe it’s well understood” Mark Weaver, CEO, Peter Warren Automotive Ltd

Agriculture

“Over the past decade while the industry has been waiting for access to the China market for Australian grown blueberries, six other competing countries have secured access, namely Chile, Canada, Peru, Argentina, Mexico and the United States. Also, during this time Australia negotiated a Free Trade Agreement with China, yet was still unable to gain access” Market Statement, Costa Group Holdings Ltd

“We expect headline inflation to moderate throughout the remainder of the [June] half, particularly in relation to anything from farms” Steven Cain, CEO, Coles Group Limited

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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. 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.