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Research Report about Covid-19 and IR: IR Magazine

This week IR Magazine published a 40 page ‘Covid-19 and IR Report’ and we thought it would be useful to provide highlights of the most interesting parts (below) for those short of time. Click here to view the full report. As expected, the main operational change is higher participation in virtual roadshows and virtual conferences than before. On the strategic side, for many companies, investor targeting has changed, as has the message to convey. Miranda-IR is happy to work with Mexican clients on how to best go about this. As a matter of priority, we believe all Investor Materials need to be updated for relevant COVID-19 developments since March.

Main points found in the report:

IR Resources

  • Budget:
    • Almost a third of IR teams have seen their budgets fall since the start of the pandemic.
    • Over a third of IR teams expect to see a drop-in budget over the coming months, with small companies the most impacted.
    • Asia has been worst hit and North America the least so.
  • Team Size:
    • IR departments have seen and expect to see little change in team size.
  • Senior Management and IR:
    • There has been a modest increase in the involvement of senior management in IR but little further change is expected.
    • Increased involvement has been noted more in Asia and North American than in Europe.
    • Smaller companies are almost twice as likely to have experienced greater involvement of senior management than larger companies.
    • A similar trend is expected in the coming months.
  • Use of external services:
    • There are no clear conclusions in terms of changes to outsourcing; some companies have seen an increase, some have seen a decrease, but the majority have seen no change.
  • IR discussions at board meetings:
    • Over a quarter of companies globally have seen an increase in IR discussions at board meetings and this is expected to continue, with North America seeing the largest increase.

 

Working Practices

  • Key changes to working practices:
    • The vast majority mentioned increased working from home, use of technology and virtual events. No surprise there.
  • Additional responsibilities for IROs:
    • Almost four in 10 IROs have seen an increase in their non-IR-related responsibilities, with over 40% expecting to see an increase in the coming months.
    • This is most common in North America and with smaller companies.
    • Over two thirds of the panel expect Covid-19 to have a lasting effect on the way they work.
    • Common positive changes notes were working from home, changes to work/life balance, reduced travel (both commuting and for meetings/events).
    • The importance of face-to-face interpersonal communication is still mentioned and obviously the lack thereof is a drawback from COVID-19 related lockdowns.

 

Virtual Events

  • Virtual roadshows:
    • Three quarters of IROs have either already participated in or plan to participate in a virtual roadshow this year.
    • IR teams have already taken part in 2.1 virtual roadshows on average in 2020, with (naturally) more IROs intending to participate in more virtual roadshows than before the outbreak.
    • Larger companies are more engaged in virtual roadshows.
  • Virtual investor conferences:
    • Just 16% of IROs do not plan to participate in virtual investor conferences with year, with 54% already having done so.
    • Asian IR team have already taken part in almost eight virtual conferences this year, compared with roughly one for European and North American teams.
  • Virtual investor days:
    • Almost a third of companies globally are planning to hold a virtual investor/analyst day this year, with 7% already having done so.
    • The figures are currently much higher for Asia than for North America.
  • Benefits of virtual events:
    • Lack of need to travel, saving time and cost.
    • Not bound by geography – able to reach a wider range of investors.
  • Challenges of virtual events:
    • Developing relationships with investors.
    • Less natural conversation flow and easier for vociferous individuals to dominate.

 

Investor communication

  • Targeting strategy:
    • A third of companies have changed their targeting strategy, although this is less common in Asian companies.
  • Investment approach:
    • The majority of investors and analysts have changed their investment approach, with one in 10 making changes for the long term. However, in North America half have not changed their approach.
  • What investors want to hear from companies:
    • There is no one specific answer that stands out. 
    • Some key items mentioned:
      • Impact of Covid-19 and measures being taken
      • Exposure of the company
      • Costs
      • Effect on employees, supply chain and customers
      • Balance sheet issues, liquidity, solvency and financial stability
      • Long term prospects and recovery plans
      • Changes to long-term strategy
      • Customer retention
      • Post-pandemic opportunities for business and sustainability
  • Common mistakes from IROs:
    • Not communicating
    • Being too optimistic/showing a lack of concern OR being too pessimistic 
    • Hiding negative information 

 

 

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