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Investor Relations Best Practice in 2011 –
Strategy and Value Optimization
Speaker:
Lynge Blak, CEO
Lynge Blak Investor Re...
Definition of Investor Relations
Investor relations
is a strategic management
responsibility
integrates finance,
communi...
Why Financial Communication?
Financial communication should be
carried out to ensure that:
3Lynge Blak Investor Relations ...
HighDisclosureLevelLow
Tactical Business Value Strategic
The Investor Relations Components
Intelligence
Investor targeting...
Company
 Shareholders
 Institutional
Investors
 Private Investors
 Buy-side
 Sell-side
 I-banks
 Brokers
 Financia...
The Art of Communication Value
Lynge Blak Investor Relations Limited 6
Step 1: determine the investment proposition a comp...
The Investor Relations Process -1-
Determine the company’s
investment proposition
by asking your audience
 Are company
p...
The Investor Relations Process -2-
Identify your ideal
investor and analyst
audience
 Have you been
considering to
inves...
The Investor Relations Process -3-
Develop the :
communication platform
to present to the targeted
investor and analyst
au...
The Investor Relations Process-4-
Build relationships with
your targeted investors,
analysts and financial media
audience
...
Why Invest in Your Company?
Your company as an investment
Business
• Industry attractiveness
• Key differentiation points
...
How new IR ratings on CSR &
Corporate Governance are affecting:
Corporate Image
Reputation
Valuations
12Lynge Blak Investo...
Your Company’s Risk Premium –
or Discount
Investment professional – both
on the buy and sell side –
understand the merits ...
14
Optimizing Your IR Program
– key elements
 Capital Markets – where is the money?
 Shareholders – who owns your stock?...
15
Your Optimizing IR Checklist
 Do your investors see the
company as senior
management do?
 Do you know what corporate
...
Measuring
Quantitative and Qualitative Goals
Lynge Blak Investor Relations Limited
16
• The balance between institutional ...
Measuring Your IR Program
Frequent reporting to Senior Management–
IR Review /Flash Report –
•Minimum quarterly updates to...
The New Investor Relations
Purpose of IR during and after financial downturn
• To achieve an accurate valuation
• Minimize...
IR Best Practice in 2011Means…
Credible business model and long-term value creation strategy
Understanding of investors, m...
Lynge Blak
CEO
Lynge Blak Investor Relations Limited
Unit 801, 8/F, Pacific House
20 Queen’s Road Central
Hong Kong
Phone:...
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Arkadin webinar ir best practice in 2011 (final)

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IR Best Practice in 2011Means…
Credible business model and long-term value creation strategy
Understanding of investors, markets and insiders’ expectations
Investor Relations part of the strategic decision process
Wide exposure of management to the investment community
Consistent and continuing communications strategy
Transparency – simplicity of reporting/communication
Ongoing targeting program to optimise liquidity
Corporate Social Responsibility (CSR) to be taken serious
Regular measurement of impact – quantitative/qualitative

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Arkadin webinar ir best practice in 2011 (final)

  1. 1. Investor Relations Best Practice in 2011 – Strategy and Value Optimization Speaker: Lynge Blak, CEO Lynge Blak Investor Relations Limited Lynge Blak Investor Relations Limited 1
  2. 2. Definition of Investor Relations Investor relations is a strategic management responsibility integrates finance, communication, marketing and securities law compliance enables the most effective two-way communication between and issuer, the financial community and other constituencies ultimately contributes to a company’s securities achieving fair valuation Lynge Blak Investor Relations Limited 2 Basic IR disciplines Finance Comm. Marketing Securities law
  3. 3. Why Financial Communication? Financial communication should be carried out to ensure that: 3Lynge Blak Investor Relations Limited all investors have the information necessary to enable them to become fully and fairly informed about all material information, enabling them to make reasonable investment decisions
  4. 4. HighDisclosureLevelLow Tactical Business Value Strategic The Investor Relations Components Intelligence Investor targeting Peer tracking Benchmarking Compliance News releases Public filings Outreach IR websites Webcasts E-mail broadcasts PR/Media relations Transparency Corporate governance Financial statements Accurate guidance 4Lynge Blak Investor Relations Limited
  5. 5. Company  Shareholders  Institutional Investors  Private Investors  Buy-side  Sell-side  I-banks  Brokers  Financial media  Staff  Portfolio Managers  Investment Managers  Money Managers  Mutual funds  Hedge funds  Pension funds  Insurance  Aggressive growth  Growth  GARP  Value  Deep value  Hedging  Income / Yield  SRI  Index  CEO  Corporate Secretary  CFO  IR Manager  PR Manager  Legal Counsel  External advisors Audience Investor types Investment styles Different audience / different interpretation / different messages DIFFERENTIATION – prepare your communication strategy 5Lynge Blak Investor Relations Limited
  6. 6. The Art of Communication Value Lynge Blak Investor Relations Limited 6 Step 1: determine the investment proposition a company presents Step 2: identify and target the appropriate investor and analyst audience Step 3: develop the communications platform to present to the targeted investor and analyst audience Step 4: build relationships with the target investor and analyst audience and maintain consistent communication with the marketplace so the key value drivers of a company’s business are current and obvious to investors
  7. 7. The Investor Relations Process -1- Determine the company’s investment proposition by asking your audience  Are company performance and business strategy perceived in line with those of The Board of Directors and The Board of Management? Benchmarking IR for added value with: Investor Perception Survey & Investor Peer-Group Survey Why?  To help the IRO to understand  How your IR program is performing relative to peers  Whether your IR ”boat” is riding the waves or ”beached” while your peers move ahead  Who do you benchmark against?  Industry peers  Alternate investments to your company – investment peers Lynge Blak Investor Relations Limited 7
  8. 8. The Investor Relations Process -2- Identify your ideal investor and analyst audience  Have you been considering to investigate your peer- group audience? Add Value with Investor Targeting  The goal of a targeting program is to align the company’s shareholder base with the long term financial and strategic direction of the company. Lynge Blak Investor Relations Limited 8 A higher level of “fit” between a company’s direction and its shareholder base leads to optimal valuation, lower cost of capital and lower stock volatility
  9. 9. The Investor Relations Process -3- Develop the : communication platform to present to the targeted investor and analyst audience Is your IR platform in line with market expectations?  Earnings / operations conference call  Webcast  Road shows  Investors forums / blogs  New Social Media  Industry conferences  IR website  E-distributions of news  Fact sheets / Fact books  Company site visits / capital market days Lynge Blak Investor Relations Limited 9  Analyst meetings  Sale/traders briefings  Financial media  Electronic  Print  Financial press  Interviews  Trade journals - how to deliver your message to the target audience Investors /buy-side Brokers / Sell-side
  10. 10. The Investor Relations Process-4- Build relationships with your targeted investors, analysts and financial media audience Do you maintain consistent communications with the marketplace? Do you ensure that the key value drivers are current and obvious to investors and stakeholders overall? Lynge Blak Investor Relations Limited 10 PHASE 1 PR / Media focused  Financial PR  Analyst meetings PHASE 2 Sell-side focused  Earnings releases  Conference calls  Analyst briefings  Industry peers analysis  Perception study  Ownership analysis PHASE 3 Shareholder/buy-side focused  Shareholder value assessment  Investment peers targeting  M&A analysis  Spin off analysis  High-tech IR Whichphaseareyouin?
  11. 11. Why Invest in Your Company? Your company as an investment Business • Industry attractiveness • Key differentiation points • Growth potentials • Corporate, business and operational strategies Financial • Financial goals and strategy Management • Non-financial factors often the major reasons for a company trading at a discount 11Lynge Blak Investor Relations Limited
  12. 12. How new IR ratings on CSR & Corporate Governance are affecting: Corporate Image Reputation Valuations 12Lynge Blak Investor Relations Limited
  13. 13. Your Company’s Risk Premium – or Discount Investment professional – both on the buy and sell side – understand the merits of good corporate governance – and take it a step further. If Boards and the quality of corporate governance serve as a type of “insurance policy”, then under modern portfolio theory the market will naturally award a risk premium or discount based on perceived governance quality or deficiencies. 13Lynge Blak Investor Relations Limited
  14. 14. 14 Optimizing Your IR Program – key elements  Capital Markets – where is the money?  Shareholders – who owns your stock?  Potential new investors – how do I find them?  Targeting, Investors in Peers  Road shows  I-bank or independent?  See major investors and potential investors annually  Investor feedback – perception work  Unbiased? Independent? “Sustainability” / SRI investors / Corporate Governance  Continuing and Consistent Investor Communication  Further Transparency  Website: IR Online / conference calls / contact details  Solutions for Sell-side and Buy-side including retail investors Lynge Blak Investor Relations Limited
  15. 15. 15 Your Optimizing IR Checklist  Do your investors see the company as senior management do?  Do you know what corporate strategies will cause investors to buy or sell your stock?  Who are your real peers and competitors? How does your IR programme compare? Alignment of vision with your investors is one of the keys to building loyalty. Perception studies will uncover issues that take IR into the board room. An ongoing dialogue with the investment community is critical for long term IR success. Lynge Blak Investor Relations Limited
  16. 16. Measuring Quantitative and Qualitative Goals Lynge Blak Investor Relations Limited 16 • The balance between institutional and retail Ownership Mix Targets • The balance between cross-border markets • Domestic, Asia, Nordic, Europe, North-America, Middle East Geographic Distribution Targets • In general to be avoided, but P/E ratios matching peer’s could be considered Valuation Targets • Measured through surveys Perception Targets • High price volatility perceived as risk factor – however market sentiment has Volatility Targets
  17. 17. Measuring Your IR Program Frequent reporting to Senior Management– IR Review /Flash Report – •Minimum quarterly updates to the Board Have IR Objectives / written IR Policy & IR Strategy IROs should know: •Who to target •What to say •How to say and how to evaluate Execute well – remember: •”The most important thing is managing expectations……the biggest mistake is failing to meet them.” Lynge Blak Investor Relations Limited 17
  18. 18. The New Investor Relations Purpose of IR during and after financial downturn • To achieve an accurate valuation • Minimize irrational swings in value in response to new information • IR-Officers need to be “value-centric” • Why are we undervalued? New view of IR – Investor Relationship Management • Implementation of internal valuation process – key value drivers • Optimizing and measuring IR performance - key IR success criteria • Managing internal & external relationships – key strategic IR process Lynge Blak Investor Relations Limited 18
  19. 19. IR Best Practice in 2011Means… Credible business model and long-term value creation strategy Understanding of investors, markets and insiders’ expectations Investor Relations part of the strategic decision process Wide exposure of management to the investment community Consistent and continuing communications strategy Transparency – simplicity of reporting/communication Ongoing targeting program to optimise liquidity Corporate Social Responsibility (CSR) to be taken serious Regular measurement of impact – quantitative/qualitative Lynge Blak Investor Relations Limited 19
  20. 20. Lynge Blak CEO Lynge Blak Investor Relations Limited Unit 801, 8/F, Pacific House 20 Queen’s Road Central Hong Kong Phone: +852 6258 6174 E-mail: lynge.blak@lbir.dk 20Lynge Blak Investor Relations Limited

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