What CEOs have been saying during the ASX reporting season

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.

With reporting season now behind us, our most recent publication of ‘CEO Insights’ is a reporting season special with quotes across the entire month of August taken from company results, presentations and earnings calls. This version includes more quotes than usual and attempts to provide a snapshot of the current operating environment or the current outlook across a wide range of sectors and industries.

Shopping Centres & Offices

“I mentioned, the level of leasing activity we're seeing has not pulled back. So more businesses are signing. They're signing long-term leases with us” Elliot Rusanow, CEO, Scentre Group Ltd

“For the office portfolio, market conditions are expected to remain challenging due to elevated levels of market vacancy and the reduction in workspace requirements as a result of rebates and hybrid working” Robert Johnson, CEO, The GPT Group

Retail & Apparel

“For the first 7 weeks of the new financial year, sales growth for Kmart Group has continued to benefit from strong trading results in Kmart, but growth has moderated from the second half of last financial year. Sales growth in Bunnings remained in line with the second half of last financial year…Officeworks sales for the first 7 weeks have been in line with the prior year” Rob Scott, CEO, Wesfarmers Ltd

“Apparel just seems to be tough all over the place, for everyone that we sort of look at in terms of our peers, lots and lots of discounting, winter deals, essentially no winter in Sydney this year, so that's played into some results I'm sure for many” Daniel Agostinelli, CEO, Accent Group Ltd

Housing

“The fundamentals of the Australian property market remain healthy. We are continuing to see strong demand and a return to price growth, and this is converting to a more attractive market for sellers. We believe stabilisation of interest rates is within sight and expect this will lead to an increase in market activity” Owen Wilson, CEO, REA Group Ltd

“What does the future look like? Well, the forecasters are telling us that we're going to see some slight improvement in housing, dwelling commencements in '24 and '25. However, with the announcement yesterday of the government backed new housing program and also with immigration hitting record levels, we expect that it will be upside into these forecasts” Anthony Dragicevich, CEO, Capral Ltd

Automotive

“So look, despite higher interest rates more recently, we’re seeing good growth in both our operational and financial metrics, and this gives us a lot of confidence going into FY ‘24” Cameron McIntyre, CEO, carsales.com Ltd

“What has changed somewhat is that manufacturers now deliver on their promises even if delivery numbers remain limited” Robert Blau, CEO, SG Fleet Group Ltd

Financial Markets

“Despite a particularly quiet FY ‘23, there remains a solid pipeline of corporates looking to list on ASX as conditions improve” Helen Lofthouse, CEO, ASX Ltd

“Supply chain pressures are easing but economy-wide inflation continues to inform central bank decision-making, and this, in turn, is expected to continue to drive volatility in investment markets” Steven Johnston, CEO, Suncorp Group Ltd

Lending & Payments

“So looking ahead, there are more encouraging signs” Mario Rehayem, CEO, Pepper Money Ltd

“As expected, we've seen some slowing in growth in the first 2 months of the new financial year” Jonathan Davey, CEO, Tyro Payments Ltd

Households

“No doubt people will be reconsidering any renovations, and you know that that will have an impact on the overall category” Terry Smart, CEO, JB Hi-Fi Ltd

“We have seen the volatility month by month because the consumer is going through interest rate increases. But unemployment is low. Foot traffic is down, but June was a surprise, so it is all over the place” Anthony Scali, CEO, Nick Scali

Building & Construction

“Finally, in closing, we expect demand for our products to remain strong throughout the second half of the year with trading conditions similar to the first half, notwithstanding a slight softening in some parts of residential and retail sectors” Mark Irwin, CEO, Adbri Ltd

"Looking ahead, our markets are clearly softening and customer demand trends are mixed. Our assumption is that inflation will moderate and volumes will continue to decline” Peter Wilson, CEO, Reece Group Ltd

Commodities

“On the downside, steel demand remains subdued and the current scrap [metal] price does not appear to be sufficient to stimulate robust scrap supply” Alistair Field, CEO, Sims Metals Ltd

“Bulk [commodity] revenue and earnings are supported by the expectation of higher volumes and activity” Andrew Harding, CEO, Aurizon Holdings Ltd

Energy & Renewables

“Wholesale electricity forward curves currently observable in the market for FY25 are broadly in line with FY24 pricing levels” Market Statement, AGL Energy Ltd

“It's the best market to be in, the lithium market, although it's volatile. What's pleasing here is we continue to see strong signs, which support the long-term prospects for the industry” Dale Henderson, CEO, Pilbara Minerals Ltd

Industrials

“Now there is a key word when we talk about FY '24, and that word is momentum, because we have strong momentum and good stability in the business as we head into FY '24. In addition, we are expecting the impact of inflation and high interest rates to taper off over the year” Mark Schubert, CEO, Cleanaway Waste Management Ltd

Mining & Resources

“Maintenance activity levels in the resources sector are forecast to grow on the back of a larger asset base from recently completed capital projects as well as from new mining developments and expansions moving into the operating phase” Zoran Bebic, CEO, Monadelphous Group Ltd

“Looking ahead, we expect demand to remain steady throughout FY '24 as resource companies continue to respond to the high-cost environment where the baked-in increase in labour rates is likely to extend the recovery phase. Importantly, however, mid-tier and major resource companies remain well funded and capital raisings have shown some signs of improvement for juniors” Paul House, CEO, Imdex Ltd

Travel

“We believe this pent-up demand is still out there. Demand rebounded solidly, of course, since border restrictions were lifted, but international travel still lags” Graham Turner, CEO, Flight Centre Travel Group Ltd

“The post COVID boom blip in domestic travel appears to be normalising to pre-COVID levels. Demand for corporate travel is also normalising to pre-COVID levels, and we've seen an acceleration in conference and events segment with strong forward bookings and inquiry levels above FY 2019” Jane Hastings, CEO, Event Hospitality & Entertainment Ltd

Healthcare, Health & Beauty

“Non-surgical volumes started to improve in the second half, with rehab and medical admissions growing strongly as activity in the community rose and following stronger surgical volumes” Craig McNally, CEO, Ramsay Health Care Ltd

“Sales momentum continues into FY'24” Tamalin Morton, CEO, Adore Beauty Ltd

Labour Markets & Education

“Our FY24 guidance is based on our best current estimates, though any degree of precision is difficult. In ANZ, we currently expect higher unemployment and a corresponding decline in job ad volumes” Ian Narev, CEO, Seek Ltd”

“Positive macro drivers continue to underpin long-term growth with ongoing demand for international study and migration and a highly supportive policy environment” Tennealle O’Shannessy, CEO, IDP Education Ltd

Food & Supermarkets

“I don’t think we should sugarcoat it, it’s going to be a challenging time in the sector going through to Christmas” Brad Banducci, CEO, Woolworths Ltd

“[Customers] tell us that they are reducing spends on things like visits to the hairdresser and beauty services. Entertainment, eating out, takeaway and coffees from the cafe are increasingly being seen as treats for a special occasion. As the shift in home consumption occurs, they are looking to the supermarket to help them to do more with their budgets” Leah Weckert, CEO, Coles Group Ltd

Freight & Logistics

“In terms of pallet demand, while our primary exposure is to consumer staples, the uncertain macroeconomic environment and the increase in cost of living being felt globally continue to weigh on demand for our customers' products. Pallet demand was also impacted by destocking as manufacturers and retailers utilise existing inventories to service consumer demand” Graham Chipchase, CEO, Brambles Limited

“We have seen, and we read about it every day, right, sort of some of the volume, compression within the industry. We've seen that coming through in the latter part of FY '23, and we forecast that to continue in FY '24” Andrew Cartledge, CFO, WiseTech Global Ltd

Packaging & Manufacturing

“In terms of manufacturing and general fabrication, those markets have remained solid” Anthony Dragicevich, CEO, Capral Ltd

“In Australasia, continued strength in cans, with incremental volume growth from recent investments is expected to offset the ongoing softness in glass from lower commercial wine volumes” Brian Lowe, CEO, Orora Ltd

Telecommunications

“We’ve seen incredible growth in data on our mobile network of around 35 per cent in FY23. You can probably imagine where most of it comes through; video drives a lot of demand on the network” Vicki Brady, CEO, Telstra Corporation Ltd

Technology

“We have a number of tailwinds that will continue to support our strong performance in financial year '24” Aram Mirkazemi, CEO, Altium Ltd

“Now when I talk to all my leading PC manufacturers, they all are as one and saying that 2024 is going to be when the market is coming back and coming back really strongly” Vladimir Mitnovetski, COO, Dicker Data Ltd

Media & Advertising

“In regards to our trading outlook, the short and inconsistent trading conditions are expected to continue through the first half of FY '24. However, revenue markets in the second half are expected to improve with more favourable market conditions” John Kelly, CEO, Southern Cross Media Group Ltd

“Reflecting the generally softer economic environment, FY '24 has begun much as FY '23 ended. The advertising market remains subdued, particularly in free-to-air, digital display and print publishing” Michael Sneesby, CEO, Nine Entertainment Co. Ltd