IR Practices. -The East Asiatic Company Ltd. A/S. Presentation by: Executive Vice President and Group CFO Iqbal Jumabhoy. 1

Transcription

1 IR Practices -The East Asiatic Company Ltd. A/S Presentation by: Executive Vice President and Group CFO Iqbal Jumabhoy IBC Euroforum Investor Relations Conference Copenhagen, 12 November

2 TODAY S AGENDA The starting point Oct How we build trust - then and now Structure of IR/Communications Elements of Investor Relations Results to date Conclusion 2

3 IR STATUS IN 1998 Share price at a historic low: DKK 28 in Nov Danish newspapers Nov./Dec And so was confidence among most investors EAC share widely considered a lottery ticket Unhealthy shareholder structure No sell-side analyst coverage EAC s strategic course neither successful nor popular; not necessarily understood 3

4 IR STATUS IN 1998 EAC had disappointing financial results for some years Danish newspapers Nov./Dec Previous management paid little attention to IR Often confusing signals and poor guidance to the market No strict information/ir policies and practices, more ad-hoc No clear responsibility for IR 4

5 IR STATUS IN 1998 New management neither known, nor well-connected in Denmark Danish newspapers Nov./Dec And our first task, after assessing the situation, was to down-grade 1998 expectations 5

6 STEPS TAKEN TO PROVIDE NEW APPROACH Radical shift in business strategy necessary in Oct Present future perspectives to stakeholders externally and internally, not just exercise damage control Challenge of explaining aims equally daunting No option but to give top priority to dialogue/ir Overall responsibility for IR/Communications with IJ Top-management the new OEG - very active participants in IR/Communications from day 1 6

7 HOW WE BUILD TRUST Imperative to build trust in company and new management Not least in years with significant and ongoing restructuring of EAC IR based on openness, honesty, accessibility; all media considered relevant in IR Principles initially informal, only way to behave with no results to show; later formalised in policies On top of principles: Best-class ambitions President & CEO Mark Wilson, EVP Niels Henrik Jensen and EVP & Group CFO Iqbal Jumabhoy 7

8 HOW WE BUILD TRUST Clear statements on strategic course (I) Can you do others than divest? What is the future direction of EAC? Will EAC survive? What s next? : EAC will restructure, sell or close any loss-maker.. and move to a smaller, profitable Group 8

9 HOW WE BUILD TRUST Clear statements on strategic course (II) 1999: EAC (will) concentrate its resources on the Group s market leading, consistently profitable businesses. Future focus will therefore primarily be on EAC Nutrition, EAC Chemicals and Santa Fe in Asia together with EAC Foods in South America. 2002: The next phase will therefore be to further strengthen those areas of the business that can add most significant shareholder value. EAC Nutrition is the key focus of that effort. 2003: This strategy will lead EAC to become a Leading Nutritional Food Company in Asia. EAC will nurture and invest in its 3 other strategic businesses as long as they are owned by EAC. 9

10 HOW WE BUILD TRUST Delivery according to those statements Strategic businesses EAC has sold/closed down approx. 40 businesses and major assets Foods 27% Nutrition 44% Group today considerably smaller, but constantly profitable Moving & Relocation Services 10% Industrial Ingred. 17% Others 2% Net Sales 1H business focus effectively achieved = 98% of net sales Foods 31% Nutrition 42% Next phase of restructuring going on: Transformation into a Leading Nutritional Food Company in Asia Moving & Relocation Services 3% Industrial Ingred. 24% Operating profit 1H

11 HOW WE BUILD TRUST Openness and honesty even if it hurts EAC to raise claim for compensation from Arla Foods EAC will raise a claim for compensation with Arla Foods Ingredients amba following the contamination of infant milk powder products under the Mamex and Mamil brands sold in Thailand. ( announcement no.11/2002) Clarification of minority interests in EAC Foods During the information meeting at the Copenhagen Stock Exchange on 24th August, questions came up regarding the minority interests in EAC s recent H1 report in connection with EAC s plans to acquire the outstanding shares in the pig farm AFI. EAC would like to clarify this. ( announcement no. 12/2004) 11

12 HOW WE BUILD TRUST Accessibility Stakeholders have direct access to the OEG OEG always available at the end of a phone-line Talking to decision-makers enhance quality of dialogue Easier job for us by cultivating several lines of approach Wemakethemost ofevery occasion when we are in DK We improve on-line presence to maximise stakeholder reach Capital market day Venezuela 2001 and China

13 STRUCTURE OF IR/COMMUNICATIONS Iqbal Jumabhoy OEG Chairman Group Accounting Shareholders secretariat Bottomline Comm. IR/ Comm. Analysts Investors Press 13

14 STRUCTURE OF IR/COMMUNICATIONS Iqbal Jumabhoy OEG Chairman Group Accounting Shareholders secretariat Bottomline Communications Overall responsible for IR strategy/implementation, handles road-shows and most day-to-day contacts with the market together with Group Treasurer Stakeholder dialogue, analyst/investor meetings, CMD s etc. Shareholder issues (dividend etc.),corporate governance Financial reports and presentations, input for announcements, verification, accounting principles etc. Daily contacts, logistic, CSE relations, AGM planning Sparring, planning and implementation of activities, announcements, presentations, best-class monitoring etc. 14

15 HOW ACTIVITIES ARE PLANNED/EXECUTED IJ oversees IR strategy, plans, major efforts and end-products Organisation prepares material, plans activities, advices in day-to-day dealings, handles practicalities, acts proactively This set-up allows OEG to focus on stakeholder dialogue and on running the EAC Group Set-up requires responsibility and proactivity from all involved 15

16 YEARLY ELEMENTS OF IR Analyst & press meeting 1H 2004 and stands from AGM information meetings in Copenhagen (OEG) 2 Q-report web-casts + the AGM; probably 5 casts in 2005 (OEG) Approx. 30 meetings with Danish sell-side analysts and their clients + Danish investors (OEG) 1 Capital Market Day (OEG) China; 2003 Thailand/Malaysia and 2001 Venezuela 3-4 broker arranged visits to EAC s units and plants 16

17 YEARLY ELEMENTS OF IR meetings with analysts and investors abroad (IJ) Today s edition of CBS Executive distributed with the Daily Borsen 2-3 large-scale seminars for private investors in DK (OEG) Day-to-day contacts with financial stakeholders (OEG) Ongoing dialogue with the media (OEG) Selected public appearances key-notes and others (OEG) AGM: Films, exhibitions, stands 17

18 YEARLY ELEMENTS OF IR Formal print: Annual Report more than numbers Formal print: Financial reports and CSE announcements Interactive annual report + online presentations Shareholders Corner on-line, e.g. news watch (EAC alert) Ongoing monitoring of best-class performers DK and abroad Ongoing collection of feedback from stakeholders EAC alert at

19 ANNUAL REPORT AS AN IR TOOL EAC s annual reports 1997 and now

20 ANNUAL REPORT AS AN IR TOOL Annual report is more than the provision of statutory financial information Project company image Present strategic direction, hence relevance of having a theme, main message to the report Present an update of the business of the company and also the main events in the year Present outlook Align content (words, pictures) with theme Ensure adequate disclosure, accuracy of information We try not to mix product marketing with presentation of the company 20

21 OUR EXPERIENCE WITH DIFFERENT MEDIA Analyst meetings: A must; effective communication to a broad audience OEG at AGM 2004 Web-casts: Challenging, no imtimacy, can t do without to maximise reach Press: Coverage imperative since EAC is invisible in Denmark high priority Capital market days: Very stressful, but worth every minute and dime But nothing beats the personal dialogue and the one-on-one s 21

22 RESULTS TO DATE 2004 survey: Top marks to EAC for IR A survey of the quality of Nordic companies IR conducted by Regi and CGI Mannov and published in Berlingske Nyhedsmagasin 19 January

23 RESULTS TO DATE 2004 survey: Top marks to EAC for IR Total average No. 1 Management s accessability No ,37 6,76 6,93 8, ,14 6,78 7,00 9,00 9, NO DK SE EAC 0 NO DK SE EAC Confidence in management ,17 9,17 6,79 6,96 6,96 NO DK SE EAC No Ongoing information No. 1 8,42 6,21 6,46 6,67 NO DK SE EAC 23

24 RESULTS TO DATE 2004 IR Nordic Awards, Helsinki EAC received the award for best IR, Danish small cap companies No. 2 overall in the discipline best IR by a Danish CEO/CFO Awards reflect broader analyst coverage (13 in Denmark) and increased international interest IR Magazine s Nordic Awards is based on the results of a thorough survey among financial analysts and investors performed by an independent research company 24

25 RESULTS TO DATE Halvorsen IR web-survey in the daily Børsen We try to learn a lesson from all surveys especially the ones where we don t make it to the top 25

26 RESULTS TO DATE Continued shareholder value creation Index = % CAGR in Share Price EAC DKK 100m buy-back of shares DKK 100m buy-back of shares shares cancelled DKK 50m buy-back of shares DKK 67m dividend shares cancelled 2004 DKK 300m buyback of shares DKK 72m dividend Since 2001 EAC has returned approx. DKK 700m to shareholders Share price has clearly outperformed the KFX index KFX 26

27 CONCLUSION MOVING FORWARD We have progressed but still have a lot to do in several areas Must improve quality of our media Must take on-line presence and services even further Must encourage share take-up internationally Must complete next phase of strategic restructuring Must hit the KFX index in due time Leading Nutritional Food Co. in Asia Market entries Organic growth Brand building Supply chain Acquisitions 27

28 Questions 28