With stocks on course for one of the worst years on record, and dark clouds continuing to gather over the global economy, the IR Magazine Forum – Europe, held in Paris last week, could have been a gloomy affair.
But the mood at the Paris Marriott Champs Elysees Hotel bucked market conditions. After more than two years of virtual events, the atmosphere was upbeat as attendees reunited with old friends and shared tips for getting through the bear market.
The day kicked off with a fireside chat, where Joanna Darlington, partner in capital markets advisory at FGS Global, drew on more than three decades of capital markets experience to discuss the role of IR in a downturn.
‘The important thing is to engage with investors and continue to communicate as transparently and regularly as possible,’ Darlington told the audience. Companies are going through a hard time, but so are investors and their clients, so it’s important ’to keep lines of communication very open,’ she said.
Next, two IROs from mid-cap companies discussed the challenge of conducting your investor marketing at a time of dwindling support from the sell side. Thomas France, investor communications partner at DS NORDEN, the Danish shipping company, said he is trying to support sell-side analysts with their workload.
‘Even the ones that do cover you, don't really spend that much time on you necessarily, at least from our mid-cap perspective,’ he said. ‘We’re trying to cater to their needs, visiting them, participating in morning meetings and meeting with their investment banking colleagues.’
Sophie Palliez-Capian, vice president of corporate stakeholder engagement at BIC, the Euronext-listed maker of pens, razors and lighters, said working with brokers on roadshows has become ‘increasingly challenging’. A case in point: she said brokers used to provide target lists she could choose from. Now, the IR team is asked to provide the target list ahead of the trip.
Following a coffee break, attendees returned to the conference hall to hear a panel on ESG during a bear market. This year has seen sustainable funds underperform, mainly due to their lack of oil and gas holdings, while the growing focus on ESG issues has come under attack from different quarters. Speakers were asked if this backdrop meant companies and investors would start to view ESG differently.
The answer was a resounding ‘no’ from Sarah Spray, head of investor relations at shipping business AP Moller-Maersk. ‘We are seeing, of course, the coming challenges from an economic perspective and an operating perspective,’ she said. ‘But, at the same time, there is no doubt that the company will remain steadfast to its goals, in particular to be the leader in decarbonizing shipping.’
The company’s action on emissions will ultimately ‘give us a competitive advantage,’ added Spray, ‘because our scope 1, which we can control, is the scope 3 of our customers, so we are in a somewhat unique situation. Even though we do see all these different levels of pushback, I’m quite sure the company will remain true to those goals. In fact, we’ve just announced some more capex in that arena, so [we are] putting our money where our mouth is.’
More innovation, please
The next session, on digital IR practices, started with a question: is the investor relations community innovative enough with new technology? Markus Holtz, head of IR at Swiss insurer Baloise Group, was well placed to answer. His company won best innovation in shareholder communications at the IR Magazine Awards - Europe 2022 for its clever ‘scrollytelling experience’.
‘We as a group are not innovative enough,’ said Holtz. ‘And I think it's clear why: IR is a big responsibility. You do not want to end your company's investor day in chaos just because you experimented with a new technology. Some degree of risk aversion is very good for IR.
‘On the other hand, we all learned during the pandemic that new technologies do work and can be very efficient. And it's also a way to stand out compared to others. In the end, I think the craftsmanship of IROs is to find the right balance between areas where it might pay off to be innovative, and other areas where it's better to play safe.’
At this year’s forum, sessions featured not just expert speakers but also data taken from IR Magazine’s surveys of IROs, investors and analysts. For example, during the next panel on earnings calls, the audience heard that 47 percent of European companies now use video for their results announcements, while 24 percent pre-record the prepared remarks.
Jean-Benoit Roquette, senior vice president of IR at Ubisoft Entertainment, explained to the audience how he has been shortening the prepared remarks on his conference calls to help analysts digest the management commentary and allow more time for Q&A. ‘All the information that used to be in the prepared remarks is now in the press release,’ he explained, noting that feedback from stakeholders has been ‘very positive’.
‘You don't want to burn them’
After a break for lunch, the afternoon sessions began with a look at targeting and engagement during a downcycle. Panelists concurred that, first and foremost, companies should stay close to their key shareholders and ask for feedback about what further information or disclosure is desirable.
Turning to prospective investors, Daniel Alvarez, IR associate director at HelloFresh, the German food delivery company, said timing is an important consideration. If you are ‘potentially going to have a couple of quarters that may be trickier from a macro point of view, you need to be very selective as to who you target, because you don't want to burn them,’ he said.
The penultimate session of the day featured a fireside chat with Louis Igonet, head of IR at listed asset manager Tikehau Capital, about IR careers. The interview covered topics such as career paths, professional qualifications, moving up the pay scale and IR at small versus large companies.
The kind of issuer you would like to work for is a very personal decision, said Igonet. For him, working at a mid-cap was ‘much more satisfying’ than at a larger, CAC-40 business. ‘My own experience of IR in a mid-cap company is that you actually do more than just investor relations - you are involved on many more topics,’ he said.
Fitting with the mood of the day, Igonet encouraged the IROs present to stay positive despite the myriad challenges facing companies and markets. ‘We have to be optimistic, because it's the only way to move forward,’ he said. ‘If you're meeting people, you have to be optimistic about your company and your prospects.’
The forum finished with ‘champagne roundtables’ - where attendees grab a glass of bubbly and choose from five topics to discuss with their peers. After 30 minutes, a bell sounds and delegates have the chance to switch to a different table. Networking drinks on the hotel terrace offered a final chance to pick over the takeaways from the day.
If you would like more information about the IR Magazine Forum – Europe 2022 or to watch replays of the event, please click here.