Raising standards: at the IR Magazine UK & Continental Europe Awards
The phenomenon known as ‘tulip bulb mania’ or tulpomanie was popularized in Charles Mackay’s Extraordinary popular delusions and the madness of crowds, published in 1841.
The debacle reportedly centered around 17th century Dutch speculators who sent the price of tulip bulbs skyrocketing as the bulbs began to be used in transactions throughout the Dutch economy. At the peak of the bubble, tulip contracts could sell for as much as 10 times the wage of the average craftsman.
Could it be that the wisdom gained by the Dutch as a result of the tulpomanie helped the nation cope more effectively with the recent credit squeeze? Clearly, Dutch companies have been doing something right. Firms from the Netherlands won more gongs at this year’s IR Magazine UK & Continental Europe Awards in London than any other country, picking up 12 accolades – excluding individual country awards. UK companies came second overall, picking up 10 awards, while German companies were pushed into third with seven awards.
More than 400 people were in London for IR magazine’s first ever pan-European awards, and the Dutch dominated from the off.
The first category up for grabs was the award for best corporate governance and disclosure policy, with three out of four companies on the short list hailing from the Netherlands. Despite being beaten to this award by fellow regal countrymen Royal Ahold, it was Royal KPN’s night – the company went on to bag four gongs from seven nominations.
It is perhaps inevitable that a defensive telecoms stock such as Royal KPN would be popular with investors in a downturn, but this alone does not explain the company’s success at this year’s awards. According to investors polled in IR magazine’s Investor Perception Study, UK & Continental Europe 2009, it is the detail of KPN’s disclosures that makes the firm remarkable. ‘The level of detail from KPN is extraordinary,’ commented one respondent. ‘Actually, it makes life hard for analysts as it is difficult to add value to the firm’s press releases.’
There was more success for Dutch firms when Sligro Food Group won best IR by a CFO for a small or mid-cap. CFO Huub van Rozendaal takes care of IR at Sligro, to the evident satisfaction of investors and analysts across Europe. As one such investor said: ‘Sligro does not have an IRO, but the CFO is accessible and does a superb job.’
Van Rozendaal says Sligro has been seeing more investors in one-on-one meetings over the last couple of years, ‘and on a more structured basis. We used to divide our efforts across too many countries. Now we concentrate on the UK, Benelux, France and Germany.’ He adds that he’s always happy to set up meetings with analysts and investors. ‘Access to me is relatively easy,’ he says. Investors certainly agree.
It wasn’t just the Dutch who went home with heavier suitcases. Karl Mahler, veteran head of IR at Swiss pharmaceutical firm Roche – the manufacturer of Tamiflu – won the award for best IRO at a large cap.
Roche has done well in the IR Magazine Awards for many years, but this is the first time Mahler has been ranked at the top of the European IR profession. It’s a well-deserved accolade for a man of great ability and charm, in the opinion of many pharmaceuticals investors. As one said: ‘Mahler’s ability to impart his knowledge means speaking to him is every bit as good as speaking to the CEO or CFO.’
Cláudia Falcão of Portuguese firm Jerónimo Martins was voted best IRO at a small or mid-cap company, winning praise from investors for being well organized and providing timely information. Respondents also commented on her consistent approach to the market, as well as the quality of Jerónimo Martins’ communications and the company’s innovative investor days.
‘She is clear in her explanations and always available to discuss any issues we might have,’ said one respondent to the investor perception study.
Any IRO will tell you that his or her own effectiveness depends crucially on the support of senior management – and especially the CEO. David Mawdsley and his team at Glaxo have no problems in this respect. CEO Andrew Witty won best IR by a CEO at a large-cap firm in this year’s awards.
One perception study respondent commented: ‘CEO Andrew Witty manages to put across a strong message for both the mid and long term and has succeeded in creating a new positive image and direction for the company.’
There was another win for a UK company, high street retailer Next, in the best investor relations by a CEO at a small to mid-cap company category. Fine communications skills in a chief executive can be rare but, according to investors, Next’s CEO Simon Wolfson possesses them in abundant quantities.
It has not been an easy year for Next, but investors seem to welcome Wolfson’s well-documented cautiousness. ‘Next’s chief executive is frank, down to earth, humorous and approachable. I like the way he expresses himself without pretension and doesn’t over-complicate matters,’ commented one respondent.
Frequently nominated German technology firm SAP picked up the coveted award for best continental European company in the US market. Around 30 percent of SAP’s investors hail from the US and Canada, and the company has three full-time IROs in the US to serve the needs of its significant North American investor base – a fact that, according to director of investor relations Friederike Edelmann, allows the IR team to meet more than 600 investors and analysts a year.
The German firm also won the award for best use of technology. Not many IR professionals can boast that their company has a page on social networking sites such as Twitter and Facebook, but then few companies have quite such a progressive approach to technology as SAP.
‘We have a lot of tech-savvy US investors to cater for,’ explains Edelmann. Investors and analysts cite SAP’s extensive website as a key differentiator, allowing them to access a wide variety of data in a range of formats. ‘It would be hard to complain about any aspect of SAP’s IR, especially its use of technology – it has an award-winning website, frequent, well-organized webcasts and a wealth of innovation,’ noted one investor.
‘We are fortunate to have conference calls set up by our in-house team,’ Edelmann says. The technology firm also makes its webcasts downloadable as podcasts.
If the economic downturn has separated the metaphorical men from the boys in IR terms, then AXA has reason to be proud. Investors say AXA has a habit of flexibility, and is always the first company to adapt to any change in market conditions – a fact that presumably helped it bag the new award for best adaptation to the needs of IR in a downturn for a large cap.
‘AXA is flexible and topical,’ said one analyst. ‘It always deals with issues that are at the forefront of investors’ minds.’
Bart Gianotten, IR director at Randstad, thinks previous experience helped his company manage its communications in the downturn. ‘In the previous cycle we did not manage the downturn well,’ he says. ‘After that we decided well in advance how we would manage a downturn, and ran a big presentation on this at our analyst days in November 2006. The market was booming then and no one was really interested, but it created a lot of focus.’
How we chose the winners
Underlying the IR Magazine Awards is a body of research that identifies the best corporate IR teams and provides a window into the thinking of IR’s most important audience. This survey is the only one of its kind to go directly to the investment community via one-to-one telephone interviews, canvassing the opinions of the people who matter to you most.