Introduction to Investor Relations

A Presentation toAnycap Company

Laura Bergells

Why Investor Relations?

• Direct means to inform existing and potential investors

• Essential communications function for a publicly traded company to– educate investment community– shape investor perception

• Indirect means to impact shareholder value

Investor Relations Rationale

• Stock Price reflects expectations of future returns on capital employed

• Lack of information creates uncertainty and a discount to stock price

• Institutional investors largely influence stock price movement

• The financial community is an integral part of a company’s many publics

Investor Relations Rationale

Image

PublicPerception

Stock Price

What is Investor Relations?

• Key element driving a company’s business communications strategy

• Outreach program for key publics– primary focus: financial audiences

• analysts / financial institutions / investment bankers

– secondary focus: external / internal audiences

• media / government / suppliers / customers • management / employees

The I.R. Message

• Company performance & objectives

• Business strategy– Markets / Products– Growth strategy– Future vision

• Financing Policy• Operations controls and

risk management• Compensation

philosophy: management and employment practices

What are the objectives of I.R.?

• Intangibles– Enhance shareholder

value– Support fair valuation

of common stock– Minimize stock price

risk due to uncertainty over performance

– Shape / enhance perception of company commitment to growth

• Tangibles– Maximize analyst

coverage • sell- and buy- side

– Develop / maintain balanced investor base

– Target financial institutions

• domestic / international

– Track stock valuation

How is I.R. practiced?

• Build I. R. Team – Senior

Management– Finance– Communications– Legal– Outside expert

help

• Appoint I.R. point person

How is I.R. practiced?

• Establish / implement disclosure guidelines– legal– regulatory – SEC compliance

• Identify company spokesperson(s)– financial issues– business / product

issues

How is I.R. practiced?• Define company’s business

strategy and develop matching I.R. strategy:– written communication

• news releases • quarterly / annual report

– interviews / conference calls

– visits / one-on-one meetings

– road shows / management presentations

– personalized contacts– special events

How is I.R. practiced?

• Build I.R. contacts– database / research firms– Mailing list (e-mail!)– institutions / analysts /

financial media

• Establish an I.R. communication schedule– regular news: products,

markets, business– financial reports

How is I.R. practiced?

• Keep management informed and involved– analysts reports– stock valuation– perception on Street– stock price behavior

in context of industry– competition– I.R. activities

Keys to Success in I.R.

• CEO commitment, involvement, support• Sense of urgency from Senior Management• Consistent and credible public reporting &

communications• Clearly articulated, credible business

strategies• Articulate, creative vision of the future• Open discussion of financial results &

expectations• Regular & frequent contact with investment

community• I.R. backup through a pro-active, creative,

strategic communications strategy

The Ten I.R. Commandments

1. Follow the Laws of Disclosure!2. Know Your Investors and Your Analysts3. Manage Your Investors’ Expectations & Gather

Feedback4. Communicate Openly in Good Times and Bad 5. Limit Yourself to a Few Key Messages6. Do not Hype7. Do not Deliver Negative Earnings Surprises8. Do not Covet Peer P/E Multiples9. Always Monitor the Competition10. Monitor Investor Sentiment & Market Trends

I.R. Relationship Structure

InvestorRelations

ChiefFinancialOfficer

BusinessGroups

Staff Groups

FinancialReporting &

Treasury

PortfolioManagers

Buy-SideAnalysts

Corporate Secretary

Executive Management Sell Side

Analysts

Practical Steps to Take

• Take stock of current and ongoing I.R. efforts

• Identify areas in need of improvement or strengthening

• Match existing data base / analyst coverage with available universe

• Analyze communications channels

Practical Steps to Take

• Plan one or two creative events for immediate implementation– road show (institutionally

sponsored)– investor meeting (New York,

Boston, West Coast or at company facility)

• Get On-Line– Establish an internet presence– keep web site active and relevant

Useful Resources for I.R. Practice

• NIRI National Investor Relations Institute

– 703-506-3570• Stock Exchange Specialist and

Communications Executive

• First Call On-Line database to track analysts / news reports 800-347-7822

• Technimetrics On-Line database to track institutions, investment strategies etc. 212-509-5100

• Stockwatch Quick tracking service for stock moves: highly personalized service (Chemical Mellon is one)

Useful Resources for I.R. Practice

• Vickers Institutional Directory Detailed listing of all investing institutions, domestic and international

• Bloomberg / Dow Jones News Wire News tracking and stock movement service

• Zacks Investment Research & corporate analyst watch

• Bullseye Institutional investor tracking service -- monthly update based on public registration

Strategic Investor Relations: Summary

For a Public Company --• Investor Relations & Corporate

Communications must be synonymous: One cannot thrive without the other !

• CEO involvement and open, consistent, credible communications are a must

• Image Public Perception Stock Price

About the Speaker

• Laura has over 14 years’ experience in corporate communication and marketing for major corporations.

• As an internet marketing consultant, she plans & executes internet marketing strategies for over 50 firms.

• Laura's internet marketing articles are featured in international magazines.

• Her writing and research serves as the knowledge base for the Inc.com and Small Business Assoc-iation sponsored site for Internet Marketing.

• Laura granted Sybex Computer Books rights to distribute her work "PowerPoint Presentations and Templates" on the CD-ROM accompanying their book Mastering Office 2000 Premium Edition by Gini Courter and Annette Marquis.