The Making of CFO: Investor Relation management

Transcription

1 The : Investor Relation management Presented by Yogesh Dhingra COO & FD, Blue Dart 12 th October 2013

2 Importance of Investor Relations What is Investor Relations? Investor Relations (IR) is a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective interaction between a company, the financial community, and other stakeholders, which ultimately contributes to a company's securities achieving fair valuation and other benefits Who should handle Investor Relations? A senior management person with high influence needs to head investor relations. He should ideally be from the C-suite thereby all accounts and affairs of the company disclosed will be credible due which the investors can have informed decision which further would enable fair valuation for the company. How is Investor Relations handled? The department s job is to ensure that investors are satisfied with how and frequency of company communications with them. 2

3 ISI: Investors,Stakeholders & Influencers Institutional Investors Retail Investors Mutual Funds Individuals Pension Funds / Hedge funds PE / VC Firms FII Institutional investors Daily traders HNI Other Financial institutions Others Stakeholders Others Build A Solid Image Retail Investors Influencers Employees Research Analysts Regulatory bodies Industry Associations Government Media (Print, Electronic, Social) Customers Vendors Influencers Consultants / Auditors (external & internal) Brokers and Traders Media (Print, Electronic, Social) Banks Wealth Management 3

4 Objectives of good ISI Management Differentiate the company among peers for its strategy and business plan Unique to competition, in terms of growth prospects and risk mitigation Showcase the company as highly compliant / sustainable entity, with good governance practices and also focused on the triple bottom-line (Economic, Environmental & Social) as such companies tend to earn more profit & create value Making investors proud to associate with your company, there is no dissonance on their investment decision Make company well understood by all its investors and stakeholders, allowing it to generate benefits far beyond financial numbers, through positive word of mouth Enabling company s shares being fairly valued, maintaining its financial ethics Gain broad investor distribution and sponsorship, maintaining a base that is diverse and with balanced knowledge 4

5 Advantages of Good ISI Management Force Accountability Encourage Evaluation Leverage Relationship Source New Investors Build Infrastructure Access capital Enhances liquidity Fair valuation Strengthen the brand Build mutual trust 5

6 ISI Today Investment is globalised, the regulatory requirements are stricter, the social transformation is all around us. The I, S & I expect Truth, Trust, Transparency & Timeliness from organisations. Strategic ISI Management today has become important than ever before; it s time India Inc stepped up on the 4T Model -Yogesh Dhingra 6

7 Stakeholders Influencers The Blue Dart 4T Model to manage ISI Relationship Investors Timeliness Build A Solid Image Truth Transparency Trust 7

8 Stakeholders Influencers Truth TRUTH TRUTH TRUTH Effective frequent dialogue format will strengthen the relationship Investor meetings (one on one) Follow BDP s across industries and globally Investors Timeliness Truth Build A Solid Image Copy from better organizations, and shamelessly copy from success Transparency Trust stories Address concerns immediately and with all factual data points represented Access to information should be easy and without too much bureaucratic process You can t change the Truth But the Truth can change you 8

9 Stakeholders Influencers Trust TRUST TRUST TRUST Positioning the corporate as a partner and trustworthy source of Investors information Pursuit research and work with analysts Timeliness Truth Build A Solid Image Share all news, whether good or bad Transparency Trust Seek feedback and inputs from all, speak, listen and implement Proactively give information in a manner that is useful and addresses concerns Encourage and continue dialogue, they may have a story to tell you I believe fundamental honesty is the keystone of business 9

10 Stakeholders Influencers Transparency TRANSPARENCY TRANSPECRANCY Improve the perception by managing the process of reducing concerns, Investors enhancing clarity and projecting the positive value proposition Manage expectations: How well you are performing with respect to expectations Timeliness Truth Build A Solid Image Transparency Trust Visibility enhancement through: IR event participation Broker Domestic road shows Media coverage Company website Frequent dialogue Clear and concise A lack of transparency results in distrust and a deep sense of insecurity 10

11 Stakeholders Influencers Timeliness TIMELINESS TIMELINESS Know your audience: have a communication strategy that addresses each group with messages that build their confidence Consistency : maintain a best practices disclosure policy and follow it consistently Investors Timeliness Truth Build A Solid Image Transparency Trust Speak with one voice internally and externally as well Feedback reports Quarterly / Annual results Investor updates Analyst presentations Company website Media relations Social media Blue Dart s timeliness: March 2008 results It is the attentiveness, the sensitivity, the response and above all the timeliness in addressing investor requirements 11

12 DO s for the 4T Model PATH ### TO SUCCESS Strive for accuracy and consistency in all communications Be proactive Create a balanced ISI story and key messages, addressing the company s vision, strategies and key differentiators; incorporate investor and analyst feedback Be credible - update corporate message regularly Provide timely feedback to management and board of directors Have a deep understanding of your sector, company, peers and competitors Revisit your strategic IR plan at least once a year, update as necessary to reflect market and company changes Benchmark peer companies review their communications frequently Provide all investors equal access to the information Maintain a state of the art website Think like the buy-side anticipate the questions that arise from current events 12

13 DON Ts for the 4T Model PATH TO FAILURE Slow response time to investor queries Not using the same metrics each quarter Not informing investors about changes in guidance in a timely manner Big surprises positive or negative. Avoid surprises Not showing what makes your company different and unique Bad corporate presentations too long, too scattered, too complicated, too many pictures Too much information make yourself easy to understand Assuming that investors that own your competitors will be interested in your company -They might if you can show that you have a better story Overselling 13

14 4T at Blue Dart We are: Honest & Truthful in all communications Transparently building and strengthening the relationship with all ISI Striving for accuracy & consistency in all communications to build Trust among stakeholders Hitting the right balance mutually beneficial to company and investors to build Trust Using Transparent, standardized reporting matrices Giving full picture, without withholding any information, gaining Trust Communicating clear and precise information Truthfully Prompt and timely in all of our information disclosures Giving all investors equal access to True information Frequent / periodic Timely engagements with investors Valuing importance of True dialogue Build A Solid Image 14

15 Economic benefit at Blue Dart Pure business Win-win: Combines societal and business benefit Pure philanthropy Societal benefit Annual General Meetings Investor Presentation Sustainability Press Releases Annual Report Website Quarterly earnings calls Interviews One-on-one calls 15

16 4T Outcome at Blue Dart Brand Perception & Reputation Well earned brand reputation Leader in Indian Express Logistics industry Brand Equity Highest among Express Logistics providers in India Market position Highest market share in organised Air Express industry Capital cost Low and at industry best levels Happy employees ESS (Employee Satisfaction Study) scores at highest level 16

17 4T has helped Blue Dart achieve: 6X appreciation of Share Price 6X Zero Debt Company Strong Financials Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Mar.13 OFS was oversubscribed by 3.5X and final disposal price arrived at under the OFS was Rs. 1,949, which was 13% premium to the floor price Highest Brand Equity Strong Brand Blue Dart is a Zero Debt company Market capitalization at Rs crores in , 4.7 times that of 2006 Net worth at Rs crores in , compared to Rs250 crores in year 2006 Highest Credit Ratings Great Ratings Blue Dart is associated with: International Company Reliable Trustworthy Hi-Tech Strong CSR Customer Caring [ICRA] A1+ (ICRA A one plus) assigned by ICRA Ltd. (a Moody s Investors Service associate) for Blue Dart s commercial paper / short-term debt programme of Rs. 250 million (outstanding nil) ICRA has also assigned [ICRA] AA (ICRA double A) (long-term rating) and [ICRA] A1+ (ICRA A one plus) (short-term rating) to the company s bank limits (working capital) of Rs million (including fund-based and nonfund-based limits) IND A1+ (Ind A one plus) assigned by India Ratings and Research Pvt. Ltd. (erstwhile known as Fitch Ratings India Pvt. Ltd. for Blue Dart s commercial paper/ short-term debt programme of Rs. 300 million (outstanding nil) Source: Audited Company Financial Reports. (1) Debt and Net Worth on a Consolidated basis and Book Value Per Share on a Standalone basis for calendar year ended December

18 Proven track record at Blue Dart Leading to High Cash Flow Generation With Zero Debt Capital structure Income (2) (Rs. mn) and Growth (%) Net Profit (Rs. mn) and Margin (%) Cash from Operating Activities (1,2) (Rs. mn) 21.2 % (7.3 %) 26.2 % 31.3 % 45.8 % 7.9 % 6.7 % 8.2 % 8.2 % 8.7 % 9,875 9,153 11,553 15,171 22, ,242 1, ,070 1,822 Dec'08 Dec'09 Dec'10 Dec'11 Accounting Period Ended March 31st, 2013 (15M) (4) Return on Capital Employed (RoCE) (3,4) (%) Dec'08 Dec'09 Dec'10 Dec'11 Accounting Period Ended March 31st, (4) 2013 (15M) Book Value Per Share (Rs.) Dec'08 Dec'09 Dec'10 Dec'11 Accounting Period Ended March 31st, 2013 (15M) (5) 33.6% Dec' % Dec' % 29.8% Dec'10 Dec' % Accounting Period Ended March 31st, 2013 (15M) (5) Dec' Dec' Dec' Dec'11 Accounting Period Ended March 31st, 2013 (15M) Blue Dart has demonstrated a consistent and stable financial growth profile. It has consistently generated high cash flows and delivered superior returns to shareholders Blue Dart, a zero-debt company, continues to enjoy the highest credit rating Source: Audited Company Financial Reports. (1) All financials are on a Consolidated basis for financial year ended December 31. (2) Total Income comprising Service Charges, Commission and Other Income. (3) Profit Before Interest, Depreciation and Taxation (4) Consequent to the change of Accounting year from 31st December to 31st March, the figures of are not comparable to those of the previous year as the figures of are for fifteen months from January 1, 2012 to March 31,

19 Awards & Recognitions Awards and recognitions validate Blue Dart s Investor Relations Management Company Governance Leadership HR Reader s Digest Most Trusted Brand Platinum Award 2013 Best Loyalty Program in the B2B Sector - 6th Loyalty Awards 2013 Best Customer Feedback Strategy of the Year Indian Retailer Customer Service Awards 2013 Caring Company Award World CSR Congress-50 Most Caring Companies of India 2013 Superbrands 2012 (consecutive 7 th time) Best Overall Corporate Governance and Compliance & Ethics Program - BSE 7 th Social and Corporate Governance Awards 2013 Best Return to Investors Award BSE 7 th Social and Corporate Governance Awards 2013 Cost Management Excellence Award Awarded by 10th National Award for Excellence in Cost Management Corporate Social Responsibility Award Return to Investors - Subir Raha Centre for Corporate Governance Asia s Best CFO Award Yogesh Dhingra 4 th CMO Asia Awards for Branding & Marketing 2013 Responsible Business Leader Yogesh Dhingra Responsible Business Awards 2013 Best CFO of an MNC (Mid-sized companies) Yogesh Dhingra 4 th Business Today Yes Bank CFO Award 2013 Winning Edge in Raising Capital/Fund Management Revenues above Rs cr. - Yogesh Dhingra - CFO100 Roll of Honour 2013 The Greatest Corporate Leader of India - Yogesh Dhingra awarded by The Greatest Corporate Leaders of India Ranked 10 th Best companies to Work for in India 2013 Great Place to Work Institute, India and 1 st in the transport industry Innovation in HR SAP Awards 2013 Organization with Innovative HR practices Global HR Excellence Awards Best HR Strategy in Line with Business 6 th Employer Branding Awards 2012 Organization With Innovative HR Practices Asia Pacific HRM Congress 19

20 Stakeholders Influencers In a nutshell, Regulatory / Compliance Quarterly earning / results Press releases Shareholder letters Company website Annual General Meeting Mandatory Disclosures Proactive information of difficulties Existing Shareholders Analyze current investor base movement Improve liquidity Descending order of shareholders Proactively address concerns One on one meetings Do not expect surprises either Good or Bad Full transparency and honesty Timely & accurate information Corporate governance Equal access to all shareholders Timeliness Transparency Investors Build A Solid Image Truth Trust Company Communicating & interacting with existing & potential shareholders, influencers and other stakeholders To improve perception, reputation & market positioning To ensure all above gets reflected in price Serve as a bridge Potential Shareholders Accurate & standardized information Research coverage Develop new investor interest Discover appropriate market Equity coverage structure Analyst / PM between management and stakeholders Share business success & challenges, risks etc. Share good & bad news Effective two communication integrates finance, communication, marketing and securities law compliance Pursue differentiated marketing strategy to attract retail & HNI investors Regular investor presentations One on one meetings 20

21 Blue Dart Vision Statement To be the best and set the pace in the express air and integrated transportation and distribution industry, with a business and human conscience. Thank You We commit to develop, reward and recognize our people who, through high quality and professional service, and use of sophisticated technology, will meet and exceed customer and stakeholder expectations profitably. Passionately crafted by over 600 managers in

22 Blue Dart predicted economic slowdown in its quarterly results (Mar 08) Income from operations has recorded an increase of 31.95% for the quarter ended March 31, 2008 as compared to the corresponding quarter of the previous year. Although management noted softening trends in the month of March Back 22