Welcome to the first edition of Fogel & Partners Quarterly in which we plan to give you an update of what happens in our neck of the woods; trends and movements around strategic communications in the financial market.
2012 was a very intensive year for us, with several new exciting projects and a number of key recruitments in place to boost and expand our offer and create a communications boutique that can cater for all the demands set by our existing – and potential – clients, including corporates, advisors and owners. Most recently, Anders Isakson joined us from SEB Enskilda Corporate Finance, where he focused on industry analyses and developing equity stories for corporate finance transactions. Anders’s scope and expertise will be an attractive addition to our offer.
Since the focus of Fogel & Partners is fully set on the financial markets, including transactions and other M&A activities, we have in the last 24 months or so noted a different landscape, where the credit crunch certainly has transformed things, with fewer M&A transactions, longer lead times and practically no IPOs.
Bankers, lawyers and other advisors are still busy, some even very busy, but the emphasis has shifted – from traditional deal making to addressing balance sheet issues, and here bonds have become an increasingly important source of financing. Debt may still be a four-letter word – but not with negative connotations. It is actually OK to use the D-word.
We believe that the emphasis on corporate bonds will increase further in the wake of the banks’ new capital requirements. Therefore, the importance of debt IR is set to grow. Major refinancing requirements, limited capacity and willingness to lend by the banks and a challenging stock market mean that bonds are high on the list of priorities for companies. But most corporates still give most of – in some cases even all – their attention to the equity investors.
Debt and equity are equally valid sources of finance, and companies are best served by having the same proactive attitude to both. It is equally important to communicate regularly with debt investors as with equity investors. And the current environment makes good debt relations more important than ever.
Yes, debt investors have very different needs; bondholders have a longer investment horizon, and are more interested in cash flow and credit profile, rather than shorter-term earnings metrics like EBITDA. Open-minded companies that keep bondholders informed are more likely to be recognized as best performers against their peers. And companies that are more proactive will be better placed to capitalise on the market once it picks up speed again.
Another area within strategic communications where we believe that the companies could improve is position the CEO online. Together with the digital communications advisor Eklips Digital Advisors, we did a survey of all the 58 Large Cap companies on Nasdaq OMX Stockholm to see to what extent they profile their CEO’s using online channels, e g LinkedIn, Twitter and YouTube, as well as corporate websites. Looking at the results of survey, which was conducted in October 2012, you can safely say that most of the Large Cap CEO’s try to enact a modern version of the old film classic “The Invisible Man”.
According to the survey, only one quarter of the companies use a YouTube account to make CEO interviews visible. 19 per cent use Slideshare to publish and spread CEO interviews, 16 per cent of CEO’s has a LinkedIn profile and only one CEO – Ola Rollén of Hexagon – is active on Twitter. Also on corporate websites, the exposure of CEO’s is limited. According to the survey, almost a quarter of the companies lack a CEO biography on the corporate website, and 40 per cent do not publish CEO presentation slides (except quarterly reports) on their website.
It is our belief that if you make a strategic decision to be proactive in your contacts with stakeholders, e g investors, customers and journalists, it should be as natural to be visible online as in traditional channels.
Our next newsletter will be distributed at the end of Q1 2013. It will be very interesting to see what happens in the months in between: will the Americans fall off that fiscal cliff – and will others follow? Will the M&A market in the Nordic region get more active? Will we see any IPO’s? Safe to say, we will continue to monitor the market closely.