IR as a Career Requirements and Opportunities The Dansk Investor - PowerPoint PPT Presentation

Investor Relations – Where are we heading? IR as a Career – Requirements and Opportunities The Dansk Investor Relations Forening Annual Conference 2015 Copenhagen, Denmark 21 st September 2015

Agenda Part I A Strategic Approach to Career Development for IROs  Global overview – trends in IR  Routes into the IR profession Part II The IR Role  How has the IRO role evolved?  The importance of continuing development Part III A Strategic Approach to Career Development for IROs (cont’d…)  The risks and opportunities of the IPO  Onward career progression 2

Our view on IR Fidelio has very clear perspectives on IR … Executive Search Board Practice Personal Experience Through our Pan- In our Board Practice we Group Head of IR VW European Search see shareholders putting Group Head of IR UBS Practice we see what more pressure on the Co-Head of Global IR companies are looking Board – great Brunswick for in the IR function opportunity for IR Former Board Member of IR Society IR Trends 3

Back to basics – Why we need IR? Complying with Regulatory Requirements IR Function Expectation Competition Management for Capital 4

Global trends in IR  Globally IR has come of age and we are seeing an established body of IR professionals  Increasing focus on finance rather than communications – most IROs report to CFO  Retrenchment of investment banking creates opportunities for IR  Investors becoming increasingly active putting pressure on Boards – implications for IR?  IR has become specialised and often faces glass ceiling  Gender balance could improve 3

The Scandinavian IR market  Across Scandinavia we see growing importance of IR  IR differs greatly depending on the size of the company – Large cap : bigger team, strong financial focus – Mid cap : one-man team often with wide remit – Small cap : CEO / CFO often responsible  Cautious view on IPO as an opportunity  Low level of mobility  Too few female IROs 6

IR Regional trends and characteristics UK  Biggest IR market by far in Europe. London has a very large pool of IR talent  Traditionally a market in which the brokers played a very strong role. This is being cut back, creating opportunities for IR  Top of the FTSE100 has some larger teams but throughout the FTSE we also find one man bands  In the IR profession roughly 50/50 gender split but only 20% of FTSE 100 headed by women Germany  Major German corporates invest substantially in IR, although recently we have seen budget pressure and increased turnover in IR roles  Larger IR teams will often include range of skills including CSR and digital  Shareholder base often follows customer / manufacturing footprint. Several IR teams also have multiple IR offices  German IROs have a good track record of moving into CFO roles • 7

IR Regional trends and characteristics US  US is the birth place of IR  IR in the US is well established both as a profession for life and as a career stepping stone  High degree of mobility in the US; low degree of international exposure due to size of domestic capital market  IROs are typically highly financially literate with the majority holding the CFA qualification  US IR has become very legalistic versus the Europe Asia Pac  Relatively immature market across Asia Pac with the exception of Australasia  Chinese market still structurally challenging for professional IR  Exception: companies seeking access to international capital  Sizeable pool of financially literate candidates but limited number of IR opportunities with a strategic focus • 8

Typical background for an IRO Internal Hire External Hire  Sell-side Analyst  Traditional Finance  Financial PR  Communications Routes  Company Broker  Buy-side/Hedge Fund  Marketing Alternative  Strategy Consultant  Divisional Management  ECM Banker Routes  Legal  Private Equity 9

Agenda Part I A Strategic Approach to Career Development for IROs  Global overview – trends in IR  Routes into the IR profession Part II The IR Role - How has the IRO role evolved? - The importance of continuing development Part III A Strategic Approach to Career Development for IROs (cont’d…)  IPO  Onward career progression 10

Key questions  How has the IRO role evolved?  What attributes will become increasingly important?  Is there an ideal IRO background?  Can continuing education help fill any skill gaps?  Where to look for education support? 11

How has the IRO role evolved?  Technical & financial competence now a core requirement  'Soft' communication / networking skills increasingly valued  Gaining a much higher profile: both internal / external  Market expert / board advisory role  Two-tier market: • Large cap: 4-10 person teams with defined role • Medium/small: 1-2 person teams 12

What attributes will become increasingly important?  The broader view: articulating the sustainable business model  Strong commercial understanding of business & industry  Project & adviser management  Flexibility in communication: not just the numbers/script  Interpretation  Context  Wide-ranging Q&A 13

Recent surveys Topic Survey results Profile of role 95% felt IR had grown in importance Only 8% think sell-side will stay same; 33% think Sell-side in 3 years very different Career path Only 49% felt more IROs in C-suite within 5 years Expanding remit 2x increase (to 30%) IRO full engagement in Remco discussions Key focus 82% felt educating investors on company strategy Roadshow targeting 5% entirely happy with brokers ability to find best investors for roadshow Survey results 1-3. IR Society 2015 conference poll; 4-6. Citigate Dewe Rogerson 7th IR Survey 14

Is there an ‘ideal’ background? Criteria Ideal? RKH Experience University degree Economics/ finance Medieval History Professional ACA/CFA etc. None qualification Financial markets Broking/equity analyst/ 7 yrs investment banking experience Investment Banking Corporate/ Industry Key in certain sectors 11+yrs in-house experience (Insurance, Resources etc) corporate finance IR/other experience Broad exposure to IR Set up IR department 3x events/ market situations IPO on NASDAQ IR Society board Pension fund trustee & NED 15

Can continuing education fill the gaps? Technical skills: - regulatory - financial modelling - best practice Soft skills - presentation skills - messaging/ scriptwriting - internal/external networking PLUS Practical 'on the job' - helping at AGMs, CMDs, site visits experience - annual report drafting/ proofing - analyst & investor events - industry exposure 16

Where to go: UK IR Society Education Programme 'Core' courses - 10+ courses on broad range of IR topics ‘Advanced ' courses - Financial modelling for IROs - Debt IR - ESG/SRI - DELIVER programme Club IR workshops - Consensus management - Digital IR - What makes a good board report - Bringing a new NED on board Networking - Club 22 dinners - Club 11 lunches 17

Agenda Part I A Strategic Approach to Career Development for IROs  Global overview – trends in IR  Routes into the IR profession Part II The IR Role  How has the IRO role evolved?  The importance of continuing development Part III A Strategic Approach to Career Development for IROs (cont …)  The risks and opportunities of the IPO  Onward career progression 18

IPO : Opportunities or risks for IROs Opportunities (Pro) Risks (Con) Potentially high profile IRO runs the risk that the IPO opportunity might not take place Pre-IPO IR differs Transactional experience substantially from post IPO IR Useful network across Business owners may have a investors, bankers and lack of understanding of the within the company importance of IR 19

What Pre-IPO companies are looking for?  A healthy IPO market creates opportunities for IR  We see increased recognition from asset owners that good IR influences valuation  Three models of IR in an IPO transaction: Model I – Interim IR/ IR Advisory Model II – Appointing a permanent Head of IR ahead of the IPO - a clear statement of intent to the market Model III – Post IPO appointment of a Head of IR  Asset owners have different requirements for IR in an IPO: Private Equity – very sector focussed and heavily financial Family business – culture extremely important Privatisation – corporate experience, as well as IR experience is important 20

IR Career progression Internal External Head of CFO Head of Non-Executive Strategy Subsidiary Communications Head of IR Consultant Director Future roles Head of Investor Relations IR Officer Roles into IR function Internal External Finance Communications IR Banker 21