Investor Relations Plan- Danyu Wang
- Nir
DirectorySituationAnalysisIR GoalsAudience MessagesStrategiesTactics CalendarBudgetMeasurementCompany Introduction
Company Introduction• Healthcare multi-level marketingcompany• Products – Weight management,Targeted nutrition, Energy &Fi...
 Situation AnalysisStrengths Healthy pipeline of products Strong logistic footprint Supported by well known investorsl...
• Financial Performance Situation AnalysisFull Year 4Q 1Q2012 2011 Change 2012 2011 Change 2013 2012 ChangeRevenue $4.07B...
 Situation Analysis• Financial Performance01234562008 2009 2010 2011 2012Financial Growth TrendRevenue(B)EPSOperatingMarg...
 Situation Analysis• Financial Performance InsightStrongfinancialperformanceIncreasinggrowth rateInsight:Profitablecompany
• Stock Performance (1 year) Situation Analysis
 Situation Analysis• Stock Performance Since the previous year, stock price of the marketand Herbalife’s peers has incre...
• Relative Evaluation Situation AnalysisHLF PG CL GNC Industry S & P500P/E(ttm)8.82 18.08 22.69 18.43 24.13 17.94PEG 0.55...
 Situation AnalysisDividend history &dividend yield HLF maintains a high dividendand dividend yield Good ROI for stockh...
 Situation Analysis• Evaluation Insights Herbalife shows a consistent increase in revenues and sales.Its performance in ...
 IR Goals• Increase Institutional investors• Increase analyst coverage• Achieve fair valuation• Attain positive visibilit...
 Audiences Institutional investors Value investors Growth investors Yield investors Analysts Financial media Board...
 Audiences – InstitutionalInvestorsCurrent Investor InvestmentStyleInvestec Asset ManagementRenaissance TechnologiesTimes...
 Audiences – InstitutionalInvestorsTarget Investor InvestmentStyleCapital World InvestorsYacktman AssetCedar Rock Capital...
 Audiences - AnalystsCompany Current AnalystAvondale PartnersBank of America/Merrill LynchBarclays CapitalCanaccord Adams...
 Audiences - AnalystsCompany Target AnalystBMO Capital MarketsCredit SuisseDeutsche BankGoldman SachsGreat Lakes ReviewJP...
The New York TimesWall Street JournalFox BusinessMarket WatchBloomberg NewsThe Business Journal Audiences – Financi...
 Message Triangle Healthcare industry isgoing through a boom Sales volumes for the industryare constantly increasing C...
 Strategies• Target 12 new institutional investors (Value, Growth & Yield)• Target more analysts to cover Herbalife• Enha...
 Tactics: Events• Investor Day (Annual event) – March 23rd Attendees: CEO, COO, CFO and unit heads Provide live webcast...
 Tactics: Events• Company Field Trip (Annual Event) Invite analysts and investors New Product and Science Center (Torra...
 Tactics: Events• Investor Meetings (Prospective & Current) Los Angeles - May – Target Investors: Capital World Investor...
 Tactics: Events• Analyst society presentations Potential partners: CFA Institute(Seminars), NYSSA (Anniversary Dinner)•...
 Tactics: Online• Website: Add interactive graphs on Financial and MLM page Show more information about products Regul...
 CalendarCalendar Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecAnnual Meeting ✔QuarterlyMeetings, Surveys& Board update...
 BudgetBudget Category ExpenseWebsite and social media changes $2,000Annual Report $2,000Salaries (IRO) $200,000Investor ...
 MeasurementPeriodicreportstoboardBetter stock performanceImproved valuation (P/E; P/BV; PEG)Growth in Institutional inve...
• 1) How would you rate the access to senior management?• 2) How would you rate investor and financial info on website?• 3...
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Herbalife IR Plan

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IR Plan for Herbalife. Created by Vera, Nirav and Danyu.

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Herbalife IR Plan

  1. 1. Investor Relations Plan- Danyu Wang
- Nir
  2. 2. DirectorySituationAnalysisIR GoalsAudience MessagesStrategiesTactics CalendarBudgetMeasurementCompany Introduction
  3. 3. Company Introduction• Healthcare multi-level marketingcompany• Products – Weight management,Targeted nutrition, Energy &Fitness and Personal Care• 2.5 Million distributors operate across 80 countries• Competes with companies in the Pharmaceutical andBiotechnology industry
  4. 4.  Situation AnalysisStrengths Healthy pipeline of products Strong logistic footprint Supported by well known investorslike Carl Icahn Good financial performance andsteady growthWeaknesses Business model not well understood Business relies on employeeconfidence about products Criticized as pyramid schemeOpportunities Multi-level marketing model is efficient Business has grown across 80countries and still expanding Media is actively interested in thecompanyThreats Attacked publicly by investors like BillAckman Possibly investigated by SEC for being apyramid scheme Negative news such like insider tradingjeopardizes reputation• SWOT Analysis
  5. 5. • Financial Performance Situation AnalysisFull Year 4Q 1Q2012 2011 Change 2012 2011 Change 2013 2012 ChangeRevenue $4.07B $3.45B 17.88% $1.06B $884.57M 19.76% $952M $822M 15.82%Earning $477.19M $412.58M 15.66% $117.88M $105.36M 11.89% $119M $108M 10.19%OperatingMargin 16.40% 16.50% -10BP 15.30% 15.40% -10BP 17.75% 18.76% -1.01PEPS 4.05 3.3 22.72% 1.04 0.86 20.93% 1.10 0.88 25% Positive change in revenues and earnings compared to the previousyear indicates that Herbalife enjoys good financial health.
  6. 6.  Situation Analysis• Financial Performance01234562008 2009 2010 2011 2012Financial Growth TrendRevenue(B)EPSOperatingMargin(10%)Earning(100M)
  7. 7.  Situation Analysis• Financial Performance InsightStrongfinancialperformanceIncreasinggrowth rateInsight:Profitablecompany
  8. 8. • Stock Performance (1 year) Situation Analysis
  9. 9.  Situation Analysis• Stock Performance Since the previous year, stock price of the marketand Herbalife’s peers has increased. But Herbalife’s stock price decreasedsignificantly, especially around January whenAckman’s criticism came out. Negative media attention has impacted the stockprice significantly.
  10. 10. • Relative Evaluation Situation AnalysisHLF PG CL GNC Industry S & P500P/E(ttm)8.82 18.08 22.69 18.43 24.13 17.94PEG 0.55 2.50 2.12 0.84 - -P/BV 9.05 3.34 25.30 4.87 - -P/S(ttm)0.95 2.63 3.24 1.77 - -
  11. 11.  Situation AnalysisDividend history &dividend yield HLF maintains a high dividendand dividend yield Good ROI for stockholders Considering dividendhistory, stock is attractive foryield investorsHerbalife Dividend – 1.20 Dividend yield – 3.09
  12. 12.  Situation Analysis• Evaluation Insights Herbalife shows a consistent increase in revenues and sales.Its performance in this year compared to the previous alsoindicates a steady positive growth. In comparison to the industry and the overall market, the P/Eratio of Herbalife is quite low. Compared with peers like P&G and GNC, Herbalife’s P/E, P/Sand PEG Ratio are lower. Herbalife is undervalued when compared to peercompanies, industry and the overall stock market. Herbalife offers good dividend yield. Growth, Value and Yield investors would be interested in thecompany.
  13. 13.  IR Goals• Increase Institutional investors• Increase analyst coverage• Achieve fair valuation• Attain positive visibility in media
  14. 14.  Audiences Institutional investors Value investors Growth investors Yield investors Analysts Financial media Board of Directors Senior Management
  15. 15.  Audiences – InstitutionalInvestorsCurrent Investor InvestmentStyleInvestec Asset ManagementRenaissance TechnologiesTimesSquare Capital Mgmt.Goldman Sachs Asset Mgmt.Schroder Investment Mgmt.Columbia Mgmt. AdvisorsD. E. Shaw & CompanyNorges Bank Investment Mgmt.Mason Capital ManagementEagle Asset ManagementBlackRock Financial Mgmt.Freshford Capital ManagementGrowthHedge FundGrowthGrowthGrowthGrowthHedge FundValueHedge FundGrowthGrowthHedge fundCurrent Investor InvestmentStyleIcahn Associates CorporationFidelity ManagementThird Point LLCMorgan Stanley Inv. Mgmt.Wellington ManagementCapital Growth ManagementEast side Capital GroupJennison AssociatesBNP Paribas Investment (France)Munder Capital ManagementHerndon Capital ManagementTiger Consumer ManagementVisium Asset ManagementHedge FundGARPHedge FundValueValueGrowthHedge FundGrowthGrowthGrowthGARPHedge FundHedge Fund
  16. 16.  Audiences – InstitutionalInvestorsTarget Investor InvestmentStyleCapital World InvestorsYacktman AssetCedar Rock CapitalM&G InvestmentState Farm InsuranceJanus Capital ManagementFirst Eagle InvestmentJensen InvestmentIndependent FranchiseCapital Research GlobalWells CapitalSystematic FinancialValueValueValueValueGrowthGrowthValueValueYieldValueValueValue
  17. 17.  Audiences - AnalystsCompany Current AnalystAvondale PartnersBank of America/Merrill LynchBarclays CapitalCanaccord AdamsCaris & Co.D.A. Davidson & Co.Janney Montgomery ScottSunTrust Robinson HumphreyWedbush Morgan SecuritiesAnand VankawalaChris FerraraBrian WangScott Van WinkleLinda Bolton WeiserTim RameyJohn San MarcoMike SwartzRommel T. Dionisio
  18. 18.  Audiences - AnalystsCompany Target AnalystBMO Capital MarketsCredit SuisseDeutsche BankGoldman SachsGreat Lakes ReviewJP MorganMorgan StanleyWells FargoWilliam BlairKaren ShortGary BalterCharles GromMatt FasslerElliott SchlangChris HorversMark WiltamuthKate WendtMark Miller
  19. 19. The New York TimesWall Street JournalFox BusinessMarket WatchBloomberg NewsThe Business Journal Audiences – FinancialMedia
  20. 20.  Message Triangle Healthcare industry isgoing through a boom Sales volumes for the industryare constantly increasing Consistent launch of newproducts helps the industryprosper Healthy productpipeline Strong distribution network Presence across 80 countries Supported by well-knowninvestors EPS to grow by 16% (5 year est.) CAGR (5 years) – 31.95%, company is growingsteadily High dividend yield and operating marginamong peers Highest revenue growth and P/BV ratiocompared to competitors
  21. 21.  Strategies• Target 12 new institutional investors (Value, Growth & Yield)• Target more analysts to cover Herbalife• Enhance coverage in Financial media• Improve internal communication (primarily distributors)• Enhance business model understanding among stakeholders
  22. 22.  Tactics: Events• Investor Day (Annual event) – March 23rd Attendees: CEO, COO, CFO and unit heads Provide live webcast• Annual Shareholders meeting – April 29th Give a presentation on business model to shareholders• Quarterly Earnings – Webcasts (Q1-May 1, Q2-Jul 31, Q3-Oct 30, Q4-Feb 20)• Media Relations: Pitch distributor personal stories (showcasing the success after workingwith Herbalife) to Financial and conventional media Set up monthly media interview with various board members and seniormanagement to answer media’s questions Dispel myths about the business model by clearly communicating to themedia. Presentation on the business model will be shared with themedia.
  23. 23.  Tactics: Events• Company Field Trip (Annual Event) Invite analysts and investors New Product and Science Center (Torrance, California) Provide detailed update on product pipeline Business model will be explained to investors and analysts to remove anyskepticism about Herbalife being a pyramid scheme. Interaction between distributors and senior management will be reinforced.A meeting will be held where key distributor issues will be discussed andaddressed by senior management members.• Brokerage conferences Jan 7-10, JP Morgan Healthcare Conference, San Francisco May 12, Goldman Sachs Consumer Products Symposium, New York May 23, Citi 2012 Global Consumer Conference, New York Sept 14, America Merrill Lynch Investment Conference, San Francisco Nov 14, Morgan Stanley Global Consumer & Retailer Conference, New York
  24. 24.  Tactics: Events• Investor Meetings (Prospective & Current) Los Angeles - May – Target Investors: Capital World Investors, Capital ResearchGlobal (Clubbed with Non-deal Road Show) San Francisco - January – Target Investors: Wells Capital (This will be arrangedafter the JP Morgan Healthcare Conference) New York - November – Target Investors: First Eagle Investment, SystematicFinancial (This will be arranged after the Morgan Stanley Global Consumer &Retailer Conference). Current investors: Jennison Associates, TimesSquareCapital Management, Goldman Sachs Assert Management. London - April – Target Investors: Cedar Rock Capital, M&GInvestment, Independent Franchise. Current Investors: Morgan StanleyInvestment Management, Investec Asset Mgmt., Schroeder Investment Mgmt. Boston - September – Current Investors: Fidelity Management, WellingtonManagement, Capital Growth Mgmt., Columbia Mgmt. Investment Advisors.(Clubbed with Non-deal Road Show)
  25. 25.  Tactics: Events• Analyst society presentations Potential partners: CFA Institute(Seminars), NYSSA (Anniversary Dinner)• Non-deal Road shows Chris Ferrera – Bank of America/ Merill Lynch (January) Brian Wang – Barclays Capital (May) Tim Ramey – D. A. Davidson & Co. (June) John San Marco – Janney Montgomery Scott (September) Mike Schwartz – SunTrust Robinson Humphrey (December)
  26. 26.  Tactics: Online• Website: Add interactive graphs on Financial and MLM page Show more information about products Regulate IR files in clear categories Add a specific section on the website about the business model. Presentationabout the business model will be provided. Content and testimonials fromcustomers and distributors should be shared there.• Social Media: Give link of updated information on official website Update information in English (currently some is in Spanish) Give more introduction of products Explain business model on social media Set up online community or BBS for employees (distributors)
  27. 27.  CalendarCalendar Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecAnnual Meeting ✔QuarterlyMeetings, Surveys& Board updates✔ ✔ ✔ ✔Investor Day ✔Media interviews/Sr. Managementupdates✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔Non-deal Roadshows4 44 4 44 ✔InvestorMeetings✔4 ✔ 44 44 ✔4Company FieldTrip✔Analyst societypresentations✔NYSSA44CFABrokerageconference4✔ 4✔ 4✔ 4✔✔✔- Tactics clubbed together
  28. 28.  BudgetBudget Category ExpenseWebsite and social media changes $2,000Annual Report $2,000Salaries (IRO) $200,000Investor Day (Annual event) $50,000Annual Meeting $30,000Quarterly Meeting (4 times/ year) $40,000Investor Meetings (5 times/year) $50,000Non-deal Road Shows (5 times/ year) $20,000Company Field Trip $25,000Analyst society presentation $10,000Surveys $1,000Brokerage conference (5 times/ year) $75,000Total yearly budget $505,000 (Approx.)
  29. 29.  MeasurementPeriodicreportstoboardBetter stock performanceImproved valuation (P/E; P/BV; PEG)Growth in Institutional investorsPositive Media coverageIncrease in analysts covering HerbalifeSurveys (investors & analysts)
  30. 30. • 1) How would you rate the access to senior management?• 2) How would you rate investor and financial info on website?• 3) How would you rate your confidence in the companys business model?• 4) How would you rate the company managements response to investorissues?• 5) Are you happy with the quality of events we have held? How would yourate us?• 6) How would you rate the frequency of investor events we conduct?• 7) How would you rate the frequency of updates about important financialinfo?• 8) How would you rate the channels used to inform investors aboutupdates? Any comments on channels to be used?• 9) Among our peers and competitors, how would you rank Herbalife?• 10) How would you rate our social media channels, for informing investorsabout company info? Survey
  31. 31. Thank You!

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