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Jan 14, 2008

Austrian IROs in the driving seat

Reporting at an investment weekend

When Austrian mid-caps KTM, Palfinger and Pankl Racing Systems invited me to their investment weekend, I found myself in for a pleasant surprise. Instead of lederhosen and apple strudel, it was James Bond-style fast cars, glamour and fine wine on the agenda.

While UK companies usually settle for investor day trips at best, Austrian groups tend to go that extra mile to woo investors and analysts. In this case, they went several hundreds of extra miles, to the beautiful hills of Tuscany in a fleet of 20 top-of-the-range sports cars. So was it just an excuse to have some fun? Or would some serious IR work get done over the weekend? This was what I set out to uncover.

Friday evening
From Florence airport I took a taxi to the five-star hotel nestled in the Tuscan hills. I joined the investors, analysts, IROs and senior management members sipping white wine and milling among the array of gleaming cars and motorbikes.

All bar seven of them had arrived via charter flight from Vienna courtesy of motor sports specialist KTM. The team at industrial machinery manufacturer Palfinger had arrived separately via private jet. The investment weekend was the fourth the firm had organized in conjunction with sports car component manufacturer Pankl. KTM’s attention to detail showed the group was on board for the first time and keen to leave a lasting impression.

First on the agenda was Palfinger’s presentation inside the hotel. CEO Wolfgang Anzengruber talked us through the results, strategy and development of the hydraulic lifting, loading and handling systems group.

Q&A PalfingerAfter the Q&A (see Q&A Palfinger, right), we were whisked away in mini-buses to sample local delicacies in a restaurant in the foothills of Siena. During the course of the meal one portfolio manager provided me with insight into his opinion of the IR function. ‘It is a waste of time,’ he scoffed. ‘I just need to meet with the CEO or CFO. I never go to the website, as companies just put up anything they want. I go straight to the analysts.’

According to this local investor, IR professionals are good only for organizing roadshows and turning on the overhead projector. ‘They should be women as at least it gives you someone nice to look at,’ he concluded. I ventured that he might have better luck outside the investor relations arena if his priority was picking up female company.

Post-dinner, we were each given the task of driving the very latest in motorized scooters. We were timed as we perilously tackled an improvised course of large umbrellas and traffic cones, some of us clearly more inexperienced than others.

Saturday
After a bright and early breakfast, I was given the keys to a shiny new Bentley, which I was to drive alongside Wolfgang. As I had never driven an automatic, let alone a left-hand drive model, I sensed Palfinger’s CEO shared my apprehension about scraping its immaculate bodywork.

My anxiety at least dissipated once I felt the purr of the engine cruising through the beautiful Tuscan scenery. Being just two in the car, it was the perfect opportunity to ask any question I fancied about the company or the CEO’s future development plans.

Our lunch stop was in a pretty restaurant on the outskirts of Florence. Wolfgang and I weren’t the first to arrive, due to me misdirecting him when I was navigating. After a relaxed lunch, I was teamed with a private investor and allocated a Ferrari Spider 430.

When we hit a massive tailback I feared the worst, given the large number of testosterone-filled financials let loose in sports cars. Fears were confirmed when the crumpled wreck of the other Ferrari Spider 430 came into sight, with airbags fully inflated, Italian police already on the scene and two analysts standing sheepishly at the roadside.

Back at the hotel, I was persuaded to try the Super Duke with the CFO of KTM, who was adamant I should also test out the motorbikes. And what a testing we gave it, despite his assurance that he was a careful driver.

Q&A Palfinger 2We arrived back at the hotel moments before the start of KTM’s presentation, where guests got to glimpse the company’s new motorbike designs. The same motor was coupled with different wheels and bodywork in order to decrease R&D expenditure and aid efficient production. The company showcased its latest development, the X-bow, aimed at more cautious motorcyclists and sports car drivers.

Pankl’s presentation seamlessly followed on from KTM’s Q&A session (see Q&A KTM, right) and again participants were given the opportunity to familiarize themselves with company products. It was explained that Pankl supplies components for several of the high-performance cars being tested over the weekend, like Ferrari, Lamborghini and Porsche. After Pankl had finished addressing investors’ questions (see Q&A Pankl, right), we were taken to visit the vineyard and then dine at the Castello d’Albola near Siena.

Wine tasting proved the perfect way to unwind after an exhilarating day of racing. Tongues loosened over glasses of Chianti Classico: one sell-side analyst gave me surprisingly frank insight into his skepticism over one of the three firms’ stock price, before remembering to ask what I do for a living.

Sunday
Punctuality proved itself a key trait among Austrian investors, as I was to discover when I checked out of the hotel. Luckily for me, a German analyst had also misunderstood our scheduled meeting time, which turned out to have been 10 minutes earlier. A gleaming Audi R8 was parked in the otherwise empty forecourt awaiting its new passengers.

As we sped along the previously peaceful Tuscan lanes, the analyst told me how satisfied he’d been with the weekend. ‘It was the perfect setting to establish or intensify contacts with top management, investors and fellow analysts,’ he explained. ‘And given the fact the event was conducted over the weekend, no working days had to be sacrificed.’

At the final lunch gathering of the weekend, a fund manager who held shareholdings in all three companies echoed these sentiments. ‘All my questions were answered in private and that was what was so good about the weekend – you could ask questions all day long on all three days,’ he confided.

Despite not seeing much long-term strategy for KTM, he was aware the group was saving its strategy meeting and four-year plan for after the investment weekend. ‘My opinions haven’t changed – I plan to keep investing in all three firms,’ he concluded.