Europe is on the ascendant, and its pride was on display at the fourth annual Investor Relations Magazine Euro Awards in Amsterdam on October 14. Earlier that day, at the conference held in conjunction with the awards ceremony, IASB board member and former DaimlerChrysler accounting chief Hans-Georg Bruns confirmed that in terms of corporate governance and accounting, the US has been seriously ‘humbled’. No longer is Washington the regulatory center of the world. Now it could well be Brussels, with its reform of European company law, or London, home of the IASB.
Still, it was to the north that investors and analysts pointed when looking for the best IR. Finland’s Nokia was the big winner for the third year in a row, carrying off seven of the 28 awards in 2002. And that despite a rough year for telecoms companies.
Marjatta Nissinen, investor relations manager, insists there has been no change in Nokia’s IR as a result of the downturn. With no fixed budget, the department’s activities are determined by the degree of investment community interest. And the interest hasn’t let up. ‘It has been business as usual during the past couple of years,’ she says.
Alan Cathcart, senior VP of IR at Philips Electronics, was named best IRO in the Eurozone and Philips won best IR by a Euronext company. He jokes that Philips has been in training for its awards for a decade: ‘We’ve been in a significant process of change for a long time, so we probably had more experience than other companies when it came to dealing with difficult circumstances in the last 24 months.’
The secret to Philips’ IR success is its ‘Asian-Dutch strategy’: the Asian part is ‘we’ll copy anybody who has a good idea’, and the Dutch part is ‘we’ll pay nothing for it’. Cathcart explains: ‘We’ve done an awful lot of benchmarking, looking at what other companies do in IR.’
Investment professionals responding to the survey complained that some IR teams have been backsliding during the downturn. Not Nokia or Philips. Both have been communicating ‘come what may’: ‘There’s only one way to build up credibility and trust, and that’s to turn up whatever the situation,’ Cathcart says. For its part, Philips has been visiting London, New York and Boston on a quarterly basis for longer than any other continental European company. ‘IR is not a department; it is a way of life for the company,’ the award-winning IRO states.
For a small-cap Eurozone company like Anglo Irish Bank, the results of a proactive IR program are clear to see. Start with an illiquid, Irish pound instrument. Along comes the euro. Combine it with Anglo’s strong progress and a serious marketing effort. What you end up with is a shift away from a heavily Irish and UK shareholder base to an international one: 20 percent held by institutions across the US and another 15-20 percent on the Continent.
‘The balance now is a good one – a good international mix,’ remarks Ronan White, head of corporate communications. ‘We will see more penetration into the North American and continental European markets. The international mix will continue.’
Another positive result is Anglo’s Grand Prix for best overall IR in 2002, which the Dublin company shared with Qiagen, a Dutch-German biotech company.
Making progress
CSM is another company that, as one of its IR objectives, can measure IR progress in the geographical spread of its shareholders. Hans van Erp, corporate treasurer and IR manager, says the Dutch food company’s awards for most progress in IR and best communication of shareholder value by a non-Euro 100 company could be chalked up to its vastly expanded IR program.
In addition to regular visits to European and North American financial centers, CSM now makes the trek to Singapore and Tokyo. Around 60 percent of CSM’s shares are held in the Netherlands, more than 10 percent by institutional investors in the US, around 10 percent in the UK and 20 percent across continental Europe. That international spread, says van Erp, is a result of the company’s IR efforts.
‘We have gone through a lot of changes and growth in our portfolio,’ van Erp says. ‘In the slipstream of those changes, it has become increasingly important to communicate them with the outside world and internationalize our investor community. We are now more transparent with respect to our profitability, business profiles and comparisons with our competitors.’
CSM has done over 80 acquisitions since the late 1970s, and is now in its 25th consecutive year of profit growth. ‘Doing so many acquisitions while maintaining profit growth gave us a very good reputation in the market. That proved very valuable in the last year when a lot of stocks went down but we were able to maintain stability,’ van Erp says.
For companies like these continental award-winners, international IR can mean a lot of traveling. As Nokia’s Nissinen says, ‘Nothing replaces personal contact.’ On the other hand, Nokia has been turning to webcasting and teleconferencing more and more in the last year. ‘It’s partly a result of the awful events of 9/11,’ she says, ‘but it’s also simple cost-cutting. After all, time is money, and with a conference call it’s easy for us to arrange a meeting with several of our specialists in various offices along with several people from an investing institution.’
As for webcasts, they enable equal treatment of all investors. Nokia’s quarterly conference calls, biannual strategy updates, broker seminars and other virtual investor meetings are posted to the web for all to experience.
Still, Nokia’s pole position in the capital markets race is not due to mere technological tools. The strength of its investor relations – and this is true of all the companies cited by awards survey respondents – lies in senior management’s attitude. ‘IR at Nokia is regarded as highly strategic, not just a communications or PR function,’ Nissinen concludes.
Click here to see the winners.
Stolen: one IR award
Last month Finance Trust Bank was claiming on its web site to have won the Grand Prix for a non-Euro 100 company. In fact the announcement was stolen from the web site of Anglo Irish Bank, the real joint-winner.
Investor Relations magazine was alerted to the theft by Dublin’s Sunday Business Post, which exposed the fake bank’s elaborate scheme to defraud investors. ‘They are sending gullible people deposit certificates for gold and diamonds worth $8.6 mn and only asking $8,600 by wire transfer to release the funds. I’m off to the Western Union office!’ exclaims Kieron Wood, assistant editor.
The fictitious, purportedly Irish bank built an elaborate web identity with bits and pieces stolen from real banks. Besides the award heist, the scam artists lifted Anglo’s announcement about an E850 mn credit facility.
Ronan White, Anglo’s head of corporate communications, confirms that the fraudulent outfit has ‘nothing whatsoever to do with the bank.’
At press time, Ireland’s Garda fraud squad was searching for the award thieves. Pretenders beware: you may covet an Investor Relations magazine award, but the only way to get one is through good IR.
