Just try and raise over $9 bn in 25 months without the best investor presentations that technology can offer. Or be wise. Follow Nextel’s path through the capital raising jungle, using the latest multimedia tools to guide you.
Paul Blalock, the Washington, DC wireless communications company’s executive director of IR, is a veteran of rapid-fire issuance, and reckons he has written more than 100 speeches for investors in the last 18 months. ‘We may find out on Friday that we’re pulling the trigger on a new security,’ he describes. ‘We work over the weekend, put the 144A prospectus out on Monday, do the roadshow Monday and Tuesday, price on a Wednesday, and we’re done.’
Even more challenging, as the bellwether of the high yield market, Nextel has borrowed most of the $9 bn in the sophisticated, ‘anal retentive’ junk bond world. And the company has often been the pioneer for a new hybrid security, as in December with an instrument no-one had ever done, Goldman Sachs’ zero preferred. ‘Then we have to go back and tell the whole fundamental story because we’re garnering a new class of investor that may not be familiar with Nextel,’ Blalock says.
The IRO first turned to expert, out-of-house help to ‘jazz up’ the annual meeting. Financial Roadshow, a Maryland-based consultant, came up with an animated presentation Blalock could not have contemplated doing in-house: ‘Things like a spinning globe, highlighting countries where we’re launching operations. As we speak it looks alive.’
Now Blalock is hooked. For each annual meeting, he works with Financial Roadshow to coordinate the ‘look, feel, tone, content and colors’ of the theme for the next year, then sketches new slides for each new results or offering presentation. ‘The story has to constantly change, with new updates coming each quarter,’ he adds.
From there, Santiago Testa, the ‘master storyteller’ behind Financial Roadshow, takes over, developing, producing and staging the presentation right down to walking-in music. ‘The client can just walk up to the podium and know everything’s taken care of,’ he says. The bottom-line: ‘If perception and understanding can help in the valuation of a stock, it’s incumbent on IROs to apply what’s available.’
Different world
The US is currently a dark horse in the investor presentation sweepstakes, with consultants like Testa still a rare species. For stock offerings, US companies usually rely on the cookie-cutter approach of their investment banker’s graphics department. It’s different elsewhere.
‘In the rest of the world, it has now become accepted practice to hire a roadshow consultant for any significantly sized deal,’ testifies Simon Bruxner-Randall, director of London-based Imagination and head of the global investor communications division.
Indeed, Imagination pioneered the specialist role starting in 1986, helping put it firmly on the list of hires for large offerings, especially for governments joining the privatization wave worldwide. A good example is the massive undertaking for DoCoMo, NTT’s recent $18 bn spin-off and the largest IPO ever. With two teams of three presenters circling the globe, joining up in Tokyo, London and New York, Imagination organized simultaneous translation on top of the maze of ordinary logistics – different presentation formats depending on the size of the audience, ranging from an ordinary slideshow up to a full stage with a back projection screen for large meetings.
At Shan, the Paris communications consultant, staging IR presentation is part of everyday business. While some clients, particularly high-tech companies, handle production in-house, it usually falls to the agency. And according to investor relations consultant Christelle Mesla, ‘Clients place much more importance on the quality of presentation. It has evolved a great deal.’ That means rear video projection and animation for results meetings, typically held at the French financial analysts society’s building.
High-tech has also become de rigueur at France’s Grand Prix des Relations Investisseurs, which Shan’s Francis Bellamari organizes. ‘Prices can be high when staging a presentation, so budget is important,’ he advises. ‘Always work toward the best balance of quality versus price.’
Setting the standard
Meanwhile, ‘do it yourself’ is still the motto at many US companies. Count on Microsoft to set the standard. When ‘on campus’, analysts and investors are wowed in a conference room equipped with PC, data projector, sound, NetMeeting and more. ‘It allows us the flexibility to offer investors a wide range of experiences,’ says Nancy Coba, who stages Microsoft’s IR presentations and designs the IR web site.
Coba keeps an updated business and strategy core presentation of PowerPoint slides handy, then pulls from these slides to cater to specific audiences. Most of the time one of the IR managers presents a live PowerPoint presentation and distributes hard copies to the attendees. Often personnel from product groups come to demo products or talk strategy. ‘When investors visit us here, what they really want is access to the top management,’ says Coba. ‘So we make that our main priority too. However, if they’re interested in a certain technology, then we pull out all the bells and whistles to showcase it. And they love knowing that we’re actually running our show using Microsoft products.’
With over 200 analysts and investors attending, Microsoft’s yearly financial analysts’ meeting requires some ‘very intense planning’. The investor relations team starts months ahead of time on agenda, content and logistics, enlisting the help of Microsoft’s events group. ‘We demo tons of products at the meeting on many, many PCs, so this requires some tight coordination with all this equipment and the people running it,’ Coba recounts. The company also provides live and on-demand internet broadcast of the call, with each executive’s speech transcribed for the web. Every detail attended to – even phone banks and modem access for the analysts.
Rave notices
There’s little doubt the investment community takes notice of staging. The IR team at the world’s other most capitalized company, General Electric, turned to outside help to help win the 1998 Investor Relations magazine US award for best investment community meetings. ‘That’s a tough presentation,’ marvels Tim Russell of Boston’s Investor Relations Support, GE’s presentation consultant. ‘It’s such a huge company, there’s a lot to say in a short period of time. Luckily they’re good communicators.’
‘GE used every type of multimedia so that the investor had a more thorough understanding of what they were presenting,’ said one respondent to the 1998 Investor Relations Magazine US Awards Survey. ‘They had the actual machinery there so you could see it, feel it and touch it. It was an all-around experience.’
The investment community also cheered when Sinclair Broadcast Group unveiled an extravaganza prepared by Financial Roadshow. ‘We had always felt our roadshows could have more impact,’ says treasurer Patrick Talamantes. ‘There’s also an expectation that a broadcasting company would have a better presentation than a plain manufacturing company, and we had that to live up to. Now, through the use of stage presentations that involve more creative use of graphics, we keep the audience more focused on what we are presenting and get the message across better.’
Sinclair has used the new animated presentation at all its fall equity and bond conferences, culminating with PaineWebber’s media event in December. ‘Everywhere we go the feedback we get is awesome,’ enthuses Talamantes. ‘Even long-time analysts of the company who have seen the presentation ten times before, say, Fantastic job, great presentation.’
That’s the kind of praise that warms any IRO’s heart, concludes Nextel’s Paul Blalock. ‘I like this new approach of IR really being part of selling the story: creating it, telling it and selling it.’
