Introduction to Investor Relations A Presentation to Anycap Company Laura Bergells

Why Investor Relations? Direct means to inform existing and potential investors Essential communications function for a publicly traded company to –educate investment community –shape investor perception Indirect means to impact shareholder value

Investor Relations Rationale Stock Price reflects expectations of future returns on capital employed Lack of information creates uncertainty and a discount to stock price Institutional investors largely influence stock price movement The financial community is an integral part of a company’s many publics

Investor Relations Rationale Image Public Perception Stock Price

What is Investor Relations? Key element driving a company’s business communications strategy Outreach program for key publics –primary focus: financial audiences analysts / financial institutions / investment bankers –secondary focus: external / internal audiences media / government / suppliers / customers management / employees

The I.R. Message Company performance & objectives Business strategy –Markets / Products –Growth strategy –Future vision Financing Policy Operations controls and risk management Compensation philosophy: management and employment practices

What are the objectives of I.R.? Intangibles –Enhance shareholder value –Support fair valuation of common stock –Minimize stock price risk due to uncertainty over performance –Shape / enhance perception of company commitment to growth Tangibles –Maximize analyst coverage sell- and buy- side –Develop / maintain balanced investor base –Target financial institutions domestic / international –Track stock valuation

How is I.R. practiced? Build I. R. Team –Senior Management –Finance –Communications –Legal –Outside expert help Appoint I.R. point person

How is I.R. practiced? Establish / implement disclosure guidelines –legal –regulatory –SEC compliance Identify company spokesperson(s) –financial issues –business / product issues

How is I.R. practiced? Define company’s business strategy and develop matching I.R. strategy: –written communication news releases quarterly / annual report –interviews / conference calls –visits / one-on-one meetings –road shows / management presentations –personalized contacts –special events

How is I.R. practiced? Build I.R. contacts –database / research firms –Mailing list ( !) –institutions / analysts / financial media Establish an I.R. communication schedule –regular news: products, markets, business –financial reports

How is I.R. practiced? Keep management informed and involved –analysts reports –stock valuation –perception on Street –stock price behavior in context of industry –competition –I.R. activities

Keys to Success in I.R. CEO commitment, involvement, support Sense of urgency from Senior Management Consistent and credible public reporting & communications Clearly articulated, credible business strategies Articulate, creative vision of the future Open discussion of financial results & expectations Regular & frequent contact with investment community I.R. backup through a pro-active, creative, strategic communications strategy

The Ten I.R. Commandments 1.Follow the Laws of Disclosure! 2.Know Your Investors and Your Analysts 3.Manage Your Investors’ Expectations & Gather Feedback 4.Communicate Openly in Good Times and Bad 5.Limit Yourself to a Few Key Messages 6.Do not Hype 7.Do not Deliver Negative Earnings Surprises 8.Do not Covet Peer P/E Multiples 9.Always Monitor the Competition 10.Monitor Investor Sentiment & Market Trends

I.R. Relationship Structure Investor Relations Chief Financial Officer Business Groups Staff Groups Financial Reporting & Treasury Portfolio Managers Buy-Side Analysts Corporate Secretary Executive Management Sell Side Analysts

Practical Steps to Take Take stock of current and ongoing I.R. efforts Identify areas in need of improvement or strengthening Match existing data base / analyst coverage with available universe Analyze communications channels

Practical Steps to Take Plan one or two creative events for immediate implementation –road show (institutionally sponsored) –investor meeting (New York, Boston, West Coast or at company facility) Get On-Line –Establish an internet presence –keep web site active and relevant

Useful Resources for I.R. Practice NIRI National Investor Relations Institute – Stock Exchange Specialist and Communications Executive First Call On-Line database to track analysts / news reports Technimetrics On-Line database to track institutions, investment strategies etc Stockwatch Quick tracking service for stock moves: highly personalized service (Chemical Mellon is one)

Useful Resources for I.R. Practice Vickers Institutional Directory Detailed listing of all investing institutions, domestic and international Bloomberg / Dow Jones News Wire News tracking and stock movement service Zacks Investment Research & corporate analyst watch Bullseye Institutional investor tracking service -- monthly update based on public registration

Strategic Investor Relations: Summary For a Public Company -- Investor Relations & Corporate Communications must be synonymous: One cannot thrive without the other ! CEO involvement and open, consistent, credible communications are a must Image Public Perception Stock Price

About the Speaker Laura has over 14 years’ experience in corporate communication and marketing for major corporations. As an internet marketing consultant, she plans & executes internet marketing strategies for over 50 firms. Laura's internet marketing articles are featured in international magazines. Her writing and research serves as the knowledge base for the Inc.com and Small Business Assoc- iation sponsored site for Internet Marketing. Laura granted Sybex Computer Books rights to distribute her work "PowerPoint Presentations and Templates" on the CD- ROM accompanying their book Mastering Office 2000 Premium Edition by Gini Courter and Annette Marquis.