Passing the baton in Brazil

Aug 23, 2012
<p>Dispatches from the eighth annual IR Magazine Brazil Awards</p>

In Brazil, investor relations is viewed as a young discipline, born in the 1990s and maturing in the last decade. It’s only fitting, then, to celebrate the fact that the big winners at the eighth annual IR Magazine Brazil Awards represent a new generation of young public companies.

Localiza Rent a Car, the top large-cap winner, went public in 2005, and Kroton Educacional, the winner of more awards than any other company, listed in 2007, as did Eztec, which achieved nominations in seven categories.

It’s also fitting that the big winners of past years are still setting an example and taking home trophies: pioneers of Brazilian investor relations like Vale, the mining giant, or energy utility Cemig, which recently marked the 10th anniversary of its ADR listed on the NYSE.

Itaú Unibanco, which has won the grand prix three times since the awards’ inception, and OdontoPrev, a two-time grand prix winner, didn’t win this year but still ranked highly across many categories.  

Luiz Fernando Rolla, Cemig’s CFO and head of investor relations, who is also president of IBRI, Brazil’s investor relations association, says Cemig started early, incorporating IR into its strategy in the early 1990s.

Now he’s pleased to see the new crop of winning companies. ‘We are very happy those companies are having the recognition of the market,’ he says. ‘They learned very quickly.’

How the winners won

In partnership with Revista RI, and with the support of IBRI, the Brazilian investor relations institute, IR Magazine commissioned the research unit of Fundação Getulio Vargas (FGV), Instituto Brasileiro de Economia, to survey Brazilian investors and analysts.

This eighth annual study, conducted in April and May 2012, gathered responses from 170 investment professionals from a sample compiled by FGV, Bloomberg and IR Magazine. FGV aimed for a cross section of the investment community, a fair balance of sell-side analysts, buy-side analysts, portfolio managers and financial advisers covering the full range of sectors.

For the category of best investor relations for individual investors, FGV also surveyed 436 individual investors from a sample of 44,000 provided by GEO Eventos’ Money Expo.

The full research from FGV, which includes in-depth comments from the survey respondents, is published in IR Magazine’s Estudo de Percepção do Investidor, Brasil 2012. Please see for more details.

Respondents by role

This year’s grand prix winners are also following in the footsteps of Cemig and Vale as they target US investors.

Localiza launched a level I ADR just weeks before the awards, and one of Kroton’s goals for 2012 is to study the possibility. ‘We are going to focus on the ADR in order to increase liquidity,’ explains Silvio Guerra, Localiza’s IR chief.

He has a compelling story for his new cache of investors: a business model with consistent results through the ups and downs of the Brazilian economy for the last 15 years, in a new sector in a country with good prospects for growth.

‘There is also the management of the company: stable management, very specialized’ with a C suite fully engaged in IR, Guerra adds.

Another thread tying many of the winners together is successful turnarounds. Cia Hering started a turnaround in 2007 and, having posted consistently strong results, is reaching a new inflection point.

‘We are going through a challenging moment because that strategy is maturing, so in terms of aligning expectations with the market, we think this is a very important period,’ says Patrícia Salem, Cia Hering’s IR manager.

Kroton began its transformation back in 2010, then wowed the market in 2011. ‘Last year, of course, it was very intense,’ observes Carlos Lazar, IR director, as he describes capital raisings totaling nearly R$1 bn ($500 mn) and the biggest ever acquisition in Brazil’s education sector.

‘At the same time there was growth in our transparency and in interest from analysts, [and] growth in investors in the company.’

As for Eztec, from an IPO price of R$11 in 2007, it dropped below R$2 in 2008. This year it surpassed expectations and hit more than R$20, and is the only one of 25 listed Brazilian real estate companies to be nominated for the awards.

Emilio Fugazza, Eztec’s CFO and IR head, sees IR as educational, helping the investment community understand the real estate sector and teaching it about Eztec’s business model.

Eternit traces its history back much further, to its listing in 1948. But its modern IR era began in 2004, when it adopted best corporate governance practices, recounts Rodrigo Lopes da Luz, Eternit’s IR manager and IBRI’s deputy director for São Paulo. An ‘open doors’ program has since seen 53,000 visits by analysts, investors, journalists and others.

Whether it’s a long-lived company like Eternit, a national icon like Vale or a young company like Kroton, these award winners show that Brazil’s IR community, like Localiza, is adaptable and capable of constant improvement.

‘Our main objectives are liquidity and valuation, and in that sense we always try to search for the best practices worldwide,’ Guerra concludes.

See video interviews with Localiza, Kroton, Cemig and others at

Chatting to the champions

Ronnie Nogueira talks with more winners of IR Magazine Brazil Awards

Vale is a perennial winner in Brazil, with a strong team under the leadership of IR director Roberto Castello Branco and general manager Viktor Moszkowicz. ‘The search is for transparency, reporting the challenges and business risks in the clearest way possible. We try not to leave room for rumors,’ says Castello Branco, adding that technology, such as Vale’s new iPad app, plays a strong role.

Moszkowicz points out that the mining giant’s investor relations department is essentially a team of analysts with a relatively flat hierarchy. ‘There is a general approach to management that prevents the work of our pool of analysts becoming bureaucratized,’ he says.

Natura is almost unrivaled in the category of best corporate sustainability, which the cosmetics manufacturer has won six years in a row, along with numerous other honors since the first Brazil Awards in 2005. Fabio Cefaly, who recently replaced Helmut Bossert as head of IR, says Natura held 553 different IR events last year, from one-on-ones to conference calls and investor conferences.

For the last three years, Natura Day has given investors a chance to talk to a range of executives. ‘It’s an important moment of dialogue,’ Cefaly explains. ‘We talk about our future plans and hear questions and suggestions.’

Bradesco credits its success in the awards to the way its 30-strong IR team tailors IR to different audiences: institutional investors, individual investors and other stakeholders. This year the bank held its third annual Bradesco open day at its São Paulo headquarters. Paulo Faustino, head of IR, says this year’s event on June 26 was attended by analysts from around the world. ‘The event is an important demonstration of how relevant the bank considers transparency to be,’ Faustino says.

Qualicorp shrugged off the oscillations of an unstable macroeconomic environment to complete a successful IPO on BM&F Bovespa last year, even though many other companies postponed their offerings. As it structured itself to become a public company, this health plan administrator took on three IR professionals.

‘We kept an open and transparent relationship with all investors, who cherished the quality of the information,’ explains Wilson Olivieri, CFO and IRO. In the end there was 90 percent foreign participation in Qualicorp’s IPO. ‘We have further increased the speed of our consolidation and acquired eight companies,’ Olivieri adds.

Petrobras is a seven-time winner of the award for best investor relations for individual investors. The CFO and chief IR officer for the company, Almir Guilherme Barbassa, sums up the company’s achievement: ‘The award reflects the sense of duty of the whole team, and the full service provided to our shareholder base.’

Paulo Campos, Petrobras’ IR manager for individual investors since 2002, is proud of the loyalty in the oil company’s sizable shareholder base, and points out that individual investors account for 90 percent of the total. The company’s IR portal has a special IR 2.0 section for Twitter, mobile and SlideShare, and has fast and easy sign-up for email alerts.

With Brazil badly affected by the international financial crisis, Petrobras is working to further strengthen its relationship with investors in general and individual investors in particular. ‘In a time of crisis, all publicly traded companies are suffering because the trend is to reduce investment risk,’ Campos points out. ‘We always seek to solidify shareholders’ knowledge of the fundamentals of the company. Indeed, Petrobras should be viewed as a solid, long-term investment.’

Ronnie Nogueira is publisher of Revista RI, the Brazilian investor relations magazine (

Brazil Awards: winners’ circle

Best IR in finance sector

Best investment community meetings (large cap)
Best conference call
Best IR in energy & utilities sector

Cia Hering
Most progress in investor relations (large cap)

Best IR for individual investors (small & mid-cap)

Best IR in construction & transportation sector

Kroton Educacional
Grand prix for best overall IR (small & mid-cap)
Best investor relations officer (small & mid-cap): Carlos Lazar
Best investor relations by a CEO or CFO: Rodrigo Galindo
Best investor relations website (small & mid-cap)
Best investment community meetings (small & mid-cap)
Most progress in investor relations (small & mid-cap)
Best IR in education sector

Grand prix for best overall IR (large cap)
Best investor relations officer (large cap): Silvio Guerra

Best corporate governance
Best corporate sustainability
Best IR in consumer goods & services sector

Best IR for individual investors (large cap)

Best investor relations for an IPO

Best investor relations website (large cap)
Best annual report
Best IR in basic materials sector

For the full list of nominees, please see

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