F&P Quarterly – Capital Markets Day: Improve Understanding of Long-term Shareholder Value Creation

March 2017

CAPITAL MARKETS DAY:
IMPROVE UNDERSTANDING OF LONG-TERM SHAREHOLDER VALUE CREATION

INTRODUCTION

Communication concerning listed companies is, obviously, mostly associated to quarterly reports. However, quarterly presentations rarely bring an opportunity to deeply dig into the company and discuss what is bringing long-term shareholder value. A Capital Markets Day (CMD) however, has the aim to increase the understanding of what will bring long-term shareholder value.

CLOSE POTENTIAL GAPS IN PERCEPTIONS

Prior to conducting a CMD, it’s important to understand potential concerns and misconceptions in the market. Does the internal view reflect how analysts, investors and media perceive the business? A fact-based analysis of current stakeholder perceptions creates a common base for understanding potential issues and setting the accurate messages. Collecting and analyzing sentiment over time can reveal a lot about how the company’s equity story is perceived by sell-side analysts. Investors are often more hesitant to express views publicly and sometimes also directly to the company. A way of gauging their true beliefs and concerns is to conduct one-on-one interviews through a third-party prior to a CMD. From a media perspective, a perception analysis can involve studying how key industry themes and company news are covered. By creating and studying a “heat map” of positive vs. negative reporting and track key financial reporters covering the sector, the company can get a good sense of potential concerns.

PRESENT A REVISED OR NEW STRATEGY, EITHER AFTER A TRANSFORMATIONAL ACQUISITION, OR A NEW CEO IN CHARGE

Whether it’s about to communicate a new strategy as an effect of a newly appointed CEO, or in connection to a transformational acquisition, a CMD equals a good opportunity to carefully craft and anchor key themes in a newly established equity story.

A new company narrative, e.g. “transformation” or “new direction”, may be perceived as a complement or may completely replace an old story depending on how it is presented. The difference can be minute and the impression will be decisive for the future assessment of the company. In that way a CMD functions as an excellent opportunity to carefully position the company.

PRESENT THE DEPTH OF THE MANAGEMENT TEAM TO BUILD TRUST

A well-structured CMD is an excellent venue to elaborate on the company´s strategy and demonstrate the strength of the entire management team. In opposite to a typical quarterly report presentation, when the CEO and CFO play the main roles, the entire top management should be used to build trust. For instance, in today’s rapidly evolving technological and digital landscape, chief digital officers are often part of the group management team and play business-critical roles. Other key presenters can be heads of key regions and business areas.

CONCLUSIONS

A well-perceived CMD is characterized by a strong corporate narrative with key themes well anchored in a clear message platform. The evaluation post-CMD should therefore address the following questions:

1. Did we reach out to our target audiences with our core messages?
2. Does perception comply with our own view of the company?
3. Did our stakeholders “buy-in” on our new, or updated strategy?

A yes to the questions above indicates a well-executed CMD, and a platform to continue bringing the business forward.