1. Best Practice Investor Relations What it takes to develop an effective Investor Relations strategy Claire Fargeot

2. Agenda > Understanding …….. > the capital markets and how they work > the audiences and their needs > the rules of engagement > the valuation game > the role of IR at Board level > the opportunities for IR ……… will lead to effective IR strategies

3. Capital Markets and how they work > Buying and selling stocks and shares > Shareholder value generation > Debt and/or equity (primary and secondary finance) > Capital raisings and IPOs > Rights issues, share buy backs, bonus issues > Mergers, acquisitions and takeovers > Private equity and venture capital > Institutional investors and private investors > Banks and strategic investors Investors Lifecycle transactions

4. Capital Markets and how they work Results comments / Research notes / Sector coverage Market reports / Investment columns / Editorial coverage Media Investment Press Local & International Business Press Other Contacts Sell Side Analysts Institutional Investors Private Investors ► ► Company Information loop

5. IR Audiences and their needs Institutional Investors > Need direct contact, regular information flow > Active or passive style of tracking funds Analysts > Sell-side –Experts on specific sector –Publish research to generate trade > Buy-side –Less sector focused –Research only used within one institution Private Investors > Majority rely on direct communication and press comment > Most not frequent traders and without ongoing relationship with a bank or trader Financial Media > Disseminate corporate information to widest possible audience > Good relationship essential > Treat in same way as any other audience Primary contacts

6. IR Audiences and their needs Stock Exchange(s) Reporting designers and printers IR consultants Website developers Corporate finance advisors Auditors Registrars Broking houses Legal advisors Secondary contacts

7. The Rules of engagement Communication Between the company and its investors Feedback Interacting with the financial community Clear and accurate reporting Building an understanding of the company’s past performance and future prospects

8. The Rules of engagement > Manage the interface between the company and the capital markets > Manage expectations – internally and externally > Provide a clear, honest and accurate picture of past performance and prospects for the future > Provide value adding feedback for the Board and strategic developments > Keep up to date with regulatory developments > Keep up to date with capital market developments > Keep up to date with competitor developments

9. Market Environment > Competitive situation > Regulatory issues > Macro-economic environment Value creating activities > Innovation > Brands > Customers > Supply chain > People, environmental, social and ethical Strategy > Goals and objectives > Organisational structure > Corporate governance Financial Performance > Economic performance > Financial position > Risk management > Segmental performance The Valuation game Reporting driven

10. The Role of IR at Board level Externally Internally Fair market valuation Reasonable level of liquidity Easier access to capital Strong group of supporters Market informationShaping strategy Easier access to capital (Mark II) Expectations management

11. Opportunities for IR InvestorsAnalysts Jan Perception study Feb 1:1 meetings with top 20 investorsAnalyst results meetings Mar Shareholder analysis1:1 analyst meetings Apr 1:1 meetings with target investors May Post release email alerts and calls Jun Investor dayAnalyst site visit Jul Perception update Aug Post release email alerts and calls Sept 1:1 meetings with top 20 investorsAnalyst results meetings Oct 1:1 meetings with other investors1:1 analyst meetings Nov Post release email alerts and calls Dec Website overhaul IR pages

12. Opportunities for IR Financial calendar, administration and logistics Annual reports CSR reports Company presentations and meetings Company statements/ financial news releases IR websites Webcasts Electronic communications Crisis management Transparency and feedback

13. Effective IR strategies > Improvement in financial community’s knowledge > Growing trading volumes > Rotation of shareholder register > Improvement in relations with banks and investors Fair market valuation Reasonable level of liquidity Easier access to capital Strong group of supporters Aims Monitoring progress

14. Externally Internally Effective IR strategies More requests for meetings Improved level of understanding Recognition and awards Changes in share register More requests for information Participation in Board discussions Trusted gatekeeperBetter network Measuring success

15. Best Practice Investor Relations Thank you Claire Fargeot clairef@buchanan.uk.com