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Here Are the Hosts of Europe’s Best Analyst Days of 2016
Investor relations teams are becoming more creative in structuring events for investment professionals.
Last November, Unilever took some 70 buy- and sell-side analysts on a field trip to Manila and then Singapore for its annual investor event. The get-together kicked off with a welcome address by investor relations head Andrew Stephen followed by presentations by Paul Polman, chief executive officer of the London- and Rotterdam, Netherlandsbased food and personal care products manufacturer, and Rohit Jawa, head of its Philippines business. On day two, attendees split into smaller groups and visited consumers in their homes to learn about the needs, wants and uses of Unilever brands within the island nation.
Most of our investors have never worked in a consumer goods business, and wed like them to get a better sense of what is important in consumer goods rather than reading it in the papers by sell-side analysts, says Stephen.
The strategy seems to have worked. Unilever rises from second place to first in Food Producers on the 2016 iteration of Europes Best Analyst Days, Institutional Investors exclusive annual ranking of the companies that do the best job of hosting events for investment professionals. This years results reflect the opinions of 1,128 analysts and money managers at 386 buy- and sell-side firms. Respondents from the buy side work at institutions that collectively manage some $3.8 trillion in European equities.
Click on All Ranked Companies in the navigation table at right to view the winners in each of the surveys 31 industry sectors that produced publishable results.
For logistical reasons, Unilever sponsors investor days in emerging markets only every two or three years. Attendance is by invitation only and restricted to a priority list skewed toward shareholders with larger holdings and longer time horizons, but those who have attended have walked away impressed.
The Unilever analysts days tend to feature a segment of the world where Unilever has developed a leadership position through innovation and is able to grow the market, says one buy-sider. As always the execution by the Unilever management team is very strong, with industry-leading efficiencies, leading to best-in-class margins and working capital management.
For money managers headquartered in the U.K., analyst days have become increasingly important since the Financial Conduct Authority passed regulations in 2014 that prohibit the buy-side firms it oversees from using dealing commissions to finance corporate access services provided by brokerages. Although the effects of the new rules have yet to manifest in a clear pattern, Sue Scholes, chair of the U.K.s Investor Relations Society, says they reinforce an existing trend of investor relations teams becoming more proactive. Over time the best investor relations departments have been owning their targeting and engagement processes, she notes.
Unilever is among the many companies that have begun bringing more of their corporate marketing activities in house. We are increasingly doing our own road shows in London and the Netherlands, says Stephen. We tend to use brokers for other locations, partly because we may not know the investor base as well but also from a logistical point of view. The companys next investor day, scheduled for late November, will be held at its R&D facility in Port Sunlight across the River Mersey from Liverpool.
Some companies never relied primarily on brokerages for getting their message out. The vast majority of the corporate access we do is directly between us and our shareholders, says John Smelt, head of IR at London-based mining company Rio Tinto.
Voters rank Rio Tinto No. 1 in Metals & Mining for a second year running. It hosts two capital markets days in November, one in London and one in Sydney. In the space of an afternoon, analysts can enjoy tea and snacks while they listen to presentations from the CEO, CFO and divisional heads. The event is also webcast for those who cant make it.
For a company as old as Rio Tinto, which was founded in 1873, long-time researchers already understand the business so well that it is easy to keep the affair short and sweet, according to Smelt. The most important thing, in his view, is understanding what attendees want to know and delivering just that. Apart from telling them the nuts and bolts of whats going on now, its about telling them where youre strategically taking the company, he explains.
Satisfying all guests, who may hail from different countries and represent vastly different types of firms, requires striking a balance in terms of messaging, however. Gary Leibowitz, senior vice president, internal and investor engagement at SABMiller, which advances one rung to first place in Beverages, says buy-siders tend to be interested in long-term goals and strategy, while sell-siders have a split mind half the mind is looking to rate companies on their long-term value creation potential, and the other half is looking at how to position themselves in the game of short-term forecasting.
Rather than hold a large annual function for analysts and shareholders, the London-based beverages company and brewer hosts a range of events throughout the year, including its quarterly divisional seminar series. Split between London and New York, each gathering typically draws approximately 100 participants with about three-quarters from the buy side. They are very detailed, with a genuinely deep dive into the individual divisions, and they provide a good opportunity to talk to local management, attests one sell-side attendee.
Leibowitz, who started his career in private equity, insists on delivering bottom-up business insights, charting on-the-ground success factors and obstacles to implementing the companys strategic vision. SABMillers seminars feature presentations by divisional and country heads and end with a beertail reception, where participants can network over food and beers. Whats the libation of choice among analysts? Peroni, a premium lager. It appeals to discerning individuals who like the finer things in life, Leibowitz reports.
The most recent seminar was held in June. Although SABMiller has shelved this outreach program, pending its takeover by Belgian rival Anheuser-Busch InBev slated for the second half of this year, we may have a few commemorative events that would reprise our journey and the achievements of the company over time, he adds.