A time of trials and triumphs
The story of IR in Brazil over the last 10 years is one of a rapidly maturing profession. A handful of large, NYSE-listed companies had already developed top-drawer IR departments in the 1990s. The mid-2000s onward, however, saw serious IR practices adopted more broadly across the market.
Looking back over the history of the IR Magazine Awards – Brazil, which launched a decade ago, offers the chance to remember the names of companies and individuals who set the standard during this time of brisk development.
The very first IR Magazine Awards – Brazil, held in 2005, highlighted the shifting landscape of IR in the country. One of the old guard – Companhia Vale do Rio Doce, now known as Vale – won the grand prix for a company on the IBOVESPA, the main Brazilian stock index.
Dinner at the IR Magazine Awards – Brazil 2008
Early adopters of IR best practice such as Vale, Petrobras and Cemig would continue to win awards on a regular basis. But the top prize for a company outside the main index went to Natura, which had listed only one year previously on the Novo Mercado, a new market segment for companies with enhanced corporate governance.
Demonstrating its commitment to good governance, the cosmetics company implemented international practices before going public and later became SOX-compliant despite not being listed in the US, explains Helmut Bossert, founder and director at VALOR Partners, who headed IR at Natura during its IPO.
Geraldo Soares, president of IBRI, the Brazilian IR association, views the middle of the 2000s as a key time for IR in Brazil. A large number of IPOs led to a ‘great increase in IR activity’, and many of these firms chose to list on market segments that required superior governance practices, he recalls.
The inaugural IR Magazine event is also notable for the stellar performance of Banco Itaú, which took home four awards including best IRO for Soares, who has worked at the bank for many years. Itaú, which in 2008 merged with Unibanco to become Itaú Unibanco, hit the ground running in 2005 and went on to become the best performing company at the awards over the last 10 years (see A decade of success, below).
Hemerson Fernando de Souza, IR executive at Randon (left), and Pedro Arlant, country manager for Brazil at Capital IQ at the IR Magazine Awards – Brazil 2011
The IR Magazine Awards – Brazil in 2006 and 2007 took place amid record capital-raising activity. In those two years alone, more money was raised on the Brazilian stock market than over the preceding 20.
But the good times would soon end with the onset of the global financial crisis. Soares remembers 2008 as the toughest period for Brazilian companies in recent memory, with stocks collapsing in value – some by up to 90 percent – and a sharp currency depreciation in the fourth quarter.
‘On the one hand, some of [these companies] were hugely harmed by the impact of the financial meltdown,’ Soares says. ‘On the other hand, many transparent firms with serious internal policies recovered quickly from this stressful scenario.’
Signs of the time
The awards the following year felt the mark of the banking crisis. Vale took home the grand prix for best overall IR by a large cap, having raised more than $12 bn amid hostile conditions.
Meanwhile, the newly formed Itaú Unibanco – its merger encouraged by the effects of the crisis – claimed the award for best corporate branding.
In another sign of the changing times, the small and mid-cap grand prix in 2009 went to Lojas Renner. Four years prior, the department store operator had become the first Brazilian company to have 100 percent of its shares owned by the public, a milestone in a market where family-controlled companies and non-voting shares were rife.
Carlos Lazar, Kroton’s head of IR, at the IR Magazine Awards – Brazil 2013, where his company won four awards
The following years saw the further emergence of IR stars from Brazil’s newer public companies. In particular, the IR Magazine Awards – Brazil 2012 witnessed a ‘passing of the baton’, as IR Magazine reported at the time.
The large-cap grand prix went to Localiza Rent a Car, which listed in 2005, while Kroton Educacional, a 2007 market debutant, took home the top prize for small and mid-caps. EZTEC, another company that went public in 2007, scored seven nominations and won one award. But the IR stalwarts still made their presence felt, with Vale picking up three awards.
Indeed, the old guard is still around and continues to set a high bar for others to follow. At the most recent awards, perennial favorite Itaú Unibanco received an impressive six honors, cementing its position as the top performer over the history of the event.
‘Openness and frequency are key to creating sustainable investor relations,’ advises Rogério Calderón, the head of IR at Itaú between 2007 and early 2014 who now holds a senior finance position at HSBC. ‘Companies must be present in the market and relating with investors continuously, not only when it is convenient.’
For Calderón, the most important IR discovery for Brazilian companies occurred during the last decade. ‘It is strategic for every company,’ he states. ‘Understanding the messages from the markets is fundamental for sustainable business success.’
With the voice of IR growing stronger in Brazil’s boardrooms, the future winners of the IR Magazine Awards – Brazil look set to raise the bar even higher.
A decade of success
At the IR Magazine Awards – Brazil 2014 in Rio de Janeiro, special awards were handed out to celebrate 10 years of the event. IR Magazine picked the winners and runners-up by adding together the scores received by companies throughout the history of the awards. ‘In my opinion, these companies can be deemed state-of-the-art IR practitioners,’ said Geraldo Soares, president of Brazilian IR association IBRI. ‘We wish many others would follow the same path.’
Best performance in IR 2005-2014
Best IR by a small or mid-cap company 2005-2014