Severstal’s capital markets day: real-time communication with investors globally

Severtsal’s investor day in London featured informal networking time, a live internet broadcast and social media updates throughout the day

At the beginning of September, Severstal, the international steel and steel-related mining company, hosted its annual capital markets day in London.

The event was broadcast live across the globe on Severstal’s website as well as reaching out to the investment community in real time through social media platforms Facebook and Twitter.

One of Severstal’s key communications priorities is to be open and transparent with the investment community. We achieve this through maintaining a constant dialogue with investors, providing them with insight into our operations, access to our management team and educating them on our growth strategy.

This involves hosting trips to our international production sites as well as investor roadshows and meetings worldwide. In recent years we have also established a more in-depth event to provide investors further access to our company – our capital markets day.

This event now takes place annually and is a unique opportunity for people to hear about our development plans, ask questions of senior management team members – who fly in especially for the event from across the world – and meet the team more informally over drinks.

Severstal investor day
Severstal's capital markets day at the Corinthia Hotel, London

The Corinthia Hotel in London has been the location of choice for our capital markets day for the last two years because, as well as our global DRs being listed on the London Stock Exchange, we have a strong investor base there, confirmed by our shareholder identification analysis.

Furthermore, while we also have significant investor presence in Russia and the US, holding the event in the early afternoon in London works well across several time zones, allowing investors from across the globe to watch the presentations in real time.

London also sidesteps some of the logistical barriers we would have to overcome if hosting a similar event in Russia, such as obtaining visas for international visitors.

In industries such as steelmaking and mining, which are prone to seasonal fluctuations, the timing of an event like this in the financial calendar is also a key consideration.

In our industry the second quarter generally delivers the strongest financial performance so it is preferable for us to present to the investment community on the back of those results.

This allows the focus of the discussion to be on strategy, delivery and long-term vision rather than purely on financials.

In addition, we often host analyst and investor trips to production assets over the summer; this means when the capital markets day comes around in September, these visits are still fresh in investors’ memories.

Severstal CEO
Severstal's CEO Alexey Mordashov

We have developed a proven and successful format for the day, starting with a full rehearsal of all presentations in the morning.

The whole management team plus Citigroup, our financial adviser, and Hudson Sandler, our PR and IR adviser, attend and contribute to the rehearsal.

A buffet lunch is held for guests, giving them the chance to meet and socialize with one another, before the presentations from the management team, led by the chairman, start at 2.00 pm London time.

Following the presentations, there is a cocktail reception that enables guests to mingle and meet the Severstal management and IR team in a more informal setting.

The period between the rehearsal and the afternoon presentations also provides the opportunity to increase the event’s impact through targeted media engagement.

It is not very often you get six senior managers in one location overseas, and Hudson Sandler helped to make the most efficient use of their time by arranging more than 20 interviews taking place simultaneously in multiple locations for the entire senior team with the international business media.  

Together with Citigroup, Hudson Sandler assisted with the preparation of all materials and also took care of all logistics including event room hire, audio visual equipment, branding and catering.

As well as informing the market of the event via RNS announcements in London, we sent out invitations to our extensive investor contact book, compiled through years of hard work.

While invitations to investors, analysts and the media came from Severstal, Citigroup and Hudson Sandler, it was important that one party was responsible for coordinating the guests, and this responsibility fell to Hudson Sandler, which registered all parties for the event and ensured we had the right people in attendance.

Severstal audience
More than 70 people attended the capital markets day

While this year’s capital markets day brought together more than 70 attendees in person, the presentations reached a far wider audience through our live webcast and, for the first time, real-time feeds on our corporate Facebook and Twitter pages.

We had two members of the Severstal communications team handling social media: one based in Moscow who followed the presentations by video and posted social media updates, and another based in London who posted live photographs from the event.

Although I believe social media are not yet typically investors’ first port of call for news, they are an increasingly important corporate communications tool with our customers and employees, and I believe they are going to grow in significance for financial audiences as a source of non-regulatory news and information.

The presentations themselves were split into two halves, starting with addresses from the Chairman, CEO, CFO and senior vice president of strategy and corporate development, who discussed our outlook for the global steel and steel-related mining markets, strategic objectives, financial policy, track record and corporate governance.

For the first time, Vadim Saveliev, Severstal’s senior vice president of communications and IR, talked to the investment community about our initiatives in improving sustainability and health and safety ‒ an area investors are increasingly focused on ‒ which demonstrates the importance Severstal places on this aspect of our business.

In the second half, the heads of our three divisions, Severstal Russian Steel, Severstal Resources and Severstal International gave more detail on how each division is delivering against its strategic objectives.

Alexander Grubman, CEO of the Russian Steel division, notably talked about the launch of our new Balakovo long product plant scheduled for next year, and Vadim Larin, CEO of Severstal Resources, gave more detail on the division’s cost reduction and efficiency initiatives.

A priority for this year’s event was to explain how the company’s strategy and operations will enable us to deliver strong financial performances in tough markets.

Our CEO, Alexey Mordashov, outlined how our focus on self-help and continuous internal improvements holds the key to continuing to deliver industry-leading profitability in a tough market.

A key part of this is the company’s business system, a company-wide set of projects and initiatives aimed at improving performance that as Mordashov explained, contributed $248 mn to EBITDA in 2011.
 
It was clear that our key messages ‒ the business system as a unique growth driver, and our delivery against previously stated objectives ‒ were understood and appreciated by the market: the share price rose 3.6 percent on the day, against a market increase of about 1.5 percent.

More importantly, however, the event is now a crucial part of our communications calendar, and is invaluable for developing investor relations and gaining investor feedback. In the coming years, we may extend the reach of the event further, with New York being considered as a supplementary location.

Vladimir Zaluzhsky is head of IR at Severstal.

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