It’s pretty hard to argue that glamour, glitz and celebrity are inextricably linked to the world of investor relations, but somehow they all seemed to be in evidence at the eighth annual IR Magazine Awards for continental Europe and the second annual IR Magazine Awards for South East Asia.
For most IROs, the awards are about as close as they’re ever going to get to winning an Oscar – and there are more than a few passing similarities with LA’s most famous red carpet. Admittedly there are fewer tearful acceptance speeches and less chance of bumping into Leo DiCaprio, but if IR has celebs, this is where you’ll find them.
Zurich plays host
SWX Swiss Exchange was a big supporter of our continental Europe conference and awards, with the former taking place at the exchange itself. Both events provided the opportunity to discuss best practice in IR and rub shoulders with peers at other companies.
Raymond Schras, IR manager at Royal Philips Electronics, stresses the importance of learning from others: ‘In Holland we have a saying that it’s better to copy a good idea than to invent a bad one yourself.’Worst of all is to copy someone else’s bad idea, he adds.
With this in mind, delegates at the conference shared their experiences, both good and bad, in discussions on activist investors, hostile takeovers and several IR case studies.
It’s well known that companies that manage and distribute information most effectively earn extra brownie points with investors. Guidance is a particular point of contention. Jonathan Atack, general manager of IR at ING Group (whose CEO, Michel Tilmant, won best IR by a large-cap CEO at the evening awards celebration), says that companies should avoid inundating investors with data.
Indeed, ING Group has openly said it would not provide quantitative guidance. ‘Giving short-term quarterly forecasts is not very helpful,’ Atack adds. He is rather pessimistic about the merits of specific guidance, adding: ‘It actually really just sets a benchmark for failure.’
Let’s make a deal
Some of the big winners this year have been in the news because of a merger or acquisition – the kind of situation that brings IROs to the fore, whether they like it or not.
‘The merger with E.ON has really put us more in the limelight. What we have done has of course been scrutinized by a lot of people,’ says Patricia Fernández, director of IR at Endesa, which won most improved IR by a large-cap company.
Indeed, proficient handling of a takeover bid can really pay off in terms of a company’s stance in the investor community. One respondent in the investor perception study behind the awards commended Endesa for the ‘vast improvement in the information it has provided since the two takeover bids from E.ON and Gas Natural. It now has a more aggressive IR policy.’
In addition to the immediate concerns of M&A, there are long-term issues that need to be addressed, like how companies will go about integrating their IR teams. Kiran Bhojani, executive VP of IR at E.ON, which won best IR during a takeover or merger as well as the grand prix for best overall IR, says: ‘If the Endesa deal goes through successfully, which I am confident it will, then I will have to integrate their IR with E.ON’s. How we do it will be another big step next year.’
The winner of best IRO at a large-cap company, Oliver Schmidt of Allianz, had also been in the headlines. Allianz was the world’s first company to become a Societas Europaea SE), a new legal form for companies in the EU. ‘One of our biggest challenges was the transformation of Allianz into an SE, which was a hugely important project,’ Schmidt remarks. Again, a period of hard work had a great impact on investors’ perception of his IR program.
Many winners accepted their awards modestly, giving credit to others within their companies. Fernández confirms that ‘the IR job cannot be done without top management.’ She also states that ‘management need to really understand the importance of the markets’ and emphasizes a ‘pro-market’ approach.
Bhojani, who has ranked highly in IR magazine’s European surveys year after year, says the two most important aspects of IR are ‘teamwork and keeping cool.’ Just how you keep cool when dealing with the small matter of a multi-billion-dollar takeover is beyond most of us, but it’s probably one of the reasons Bhojani keeps picking up awards.
Singapore-bound
It is an inescapable fact that the IR Magazine South East Asia Awards 2006 can be summed up in one word: SingTel. It’s the second year in a row that the telecoms company has swept the event, continuing the momentum that began in 2003 when it first overtook DBS to win the award for best IR by a Singapore company.
Many investors and analysts who voted this year singled out SingTel’s annual investor day, which features senior line managers from SingTel’s Singapore and Australian businesses. ‘As a diversified company with different moving parts, it is imperative for senior managers responsible for our different businesses to be aware of investor concerns,’ says Sin Yang Fong, SingTel’s director of investor relations. ‘Meeting investors also allows them to share their strategies and thoughts on the businesses they manage.’
She continues: ‘Every 18 months, we also organize a ‘regional mobile investor day’ by bringing together the CEOs of our regional mobile associates to meet with the investment community. Both the sell side and the buy side are invited, and participants are divided into small groups of ten for detailed discussions with the presenters on their respective businesses.’
Chang to the winners
Others made their first appearance on IR magazine’s Singapore stage, such as the winner of best IR for an IPO, Banyan Tree Holdings, which raised S$368.7 mn in a rocky market in June.
‘During the IPO we took great pains to meet as many analysts and potential investors as possible, and we continue to do so,’ recalls CFO Eddy See, describing two busy weeks and 77 presentations in Asia, Europe and America. ‘On average, we see two to three fund managers or analysts a week, on top of attending any investor conferences that come to town.’ The work has been paying off. After the IPO, See says, ‘we were pleasantly surprised to see we had quite a following in the States. US-based funds were keen to hear our story and invest in us.’
See currently works with Banyan Tree’s managing director and chairman on the company’s IR. ‘Communicating with the investment community always comes down to the knowledge you can convey,’ he says in reference to the benefits of having senior management handle IR themselves. He adds, however, that the company is in the process of setting up a full-time IR function.
Another newcomer to the awards was Thai Beverage, the winner of best IR by a Thai company. Though wooed by the Hong Kong and London exchanges, the maker of Chang beer chose Singapore as its home exchange, raising S$1.37 bn in its May IPO. Richard Jones, head of IR, marvels at the level of investor interest, confessing that he has collected more business cards in his two months at Thai Beverage than he did in two years in IR at Shin Satellite. He also divulged the latest way to say ‘cheers’: ‘Chang!’
