analyst presentation: the learning showcases
TRANSCRIPT
Analyst Presentation: The Learning Showcases
Case studies: 5 selected analyst presentations
February 2014
CONTENTS
Importance of analyst presentation
Four steps to best practice presentation
Samples
2
CONTENTS
Importance of analyst presentation
Four steps to best practice presentation
Samples
3
A clear investment thesis/story is important
COMPANY
Annual report
Company profile
Analyst presentation
News Release
Website
Analysts: buy-side and
sell-side
Equity sales
Investors: shareholders
and bondholders
Creditors
The Investment Thesis
Your company’s angle;
a way to differentiate
between investment
choices
Similar to good
consumer brand
management
IR MATERIALS INVESTMENT COMMUNITY
Product Packaging Customers
4
Key IR communication materials
ANNUAL REPORT
The annual report is part of due diligence for most analysts before deciding to follow a stock
Most credible
Most durable
Most cost effective
Widest reach
First point of contact
Vehicle for other
communications
The IR website is the first place analysts go to get information on your company
Interactive
Instant feedback
Best source of non-
financial information
Chance to showcase
management’s
experience and
credibility
Management credibility ranks highest in factors considered important when making investment decisions
PRESENTATIONS
Source: Rivel Research 2008
5
WEBSITE
Presentations are crucial
Source: Ernst & Young LLP 2008 Source: Rivel Research 2010
Which sources of non-financial company information do you consider important?
(Survey of U.S. analysts and fund managers)
79%
76%
69%
68%
65%
65%
65%
65%
64%
61%
Management presentations
Public filings or reports
Sell-side analysis
Competitors
Business press
Investor relations department
Customers
Buy-side analysis
Trade press
Informal network
Analysts and fund managers rate investor presentations as their most used IR website resource
20%
20%
24%
33%
38%
72%
80%
100%
Excel spreadsheets
Charting tools
Mobile access
RSS fees
Calendar synchronization
Email news alerts
Webcasts
Presentations
6
Types of presentation slides
Identity
Ingredients:
Business Overview
Industry & company overview
Core products
Market-based operations
Customers
Competitive advantages
Future direction
Corporate strategies & objectives
Growth strategies
Events:
Investment conference Non-deal roadshow Company visit
Events:
SET’s Opportunity Day Quarterly analyst meeting Full-year earning presentation
Performance Event
Presentation slides
Ingredients:
Recap of major event (if any)
Operational performance
highlights
Financial performance
highlights
Analysis of the results
Outlook
Ingredients:
Executive summary
Rationale of the transaction
Transaction information
Impact
Timeline
What happened?
Impact
Solution / What’s next?
Events:
Event analyst meeting− New business− New strategic direction− Major investment− M&A or divestment− Capital increase
Deal roadshow Crisis
7
Pitfalls of analyst presentation?
Source: Adapted from www.thebusinessofmining.com
Story & structure
Management Communication
Professional Organization
Lack of convincing storyline
Not structure and illogical
Lack of fact and/or rationale
Sections of document are not clearly linked together
No clear messages
Inadequate support data
Just present fact, no “so-what?”
Not attractive & professional visual appeal
Inconsistency in terms & reference
Unclear graphs, misaligned text
8
CONTENTS
Importance of analyst presentation
Four steps to best practice presentation
Samples
9
Four steps to a best practice presentation
Define your value
story/thesis
Structure
presentation
Gather
information
Develop
Presentation
Develop logical structure
Storyline & Storyboard
Company data
Industry data
Economic data
Slide types
Effectively designed visual aids
1 2 3 4
What sets your company apart?
Core skills and competitive advantages
Business strategy
10
Four steps to a best practice presentation
Define your value
story/thesis
Structure
presentation
Gather
information
Develop
Presentation
Develop logical structure
Storyline & Storyboard
Company data
Industry data
Economic data
Slide types
Effectively designed visual aids
1 2 3 4
What sets your company apart?
Core skills and competitive advantages
Business strategy
11
Sample of investment story/thesis?
12
Player in growth markets
Extending traditional strengths to new markets
New business opportunities
Management competence/credibility
Sustained financial performance
Innovation/Industry/Market leadership
Corporate partnership
Where do you get your investment thesis/story?
13
Formulate the investment thesis
Ascertain what management thinks– Attending board & management meetings
– Discussion with top management
Determine your business– Strategy map
– Business model
– Financial model
– Value drivers
Determine what the analysts and investors think
– Market signals analysis or feedback survey
– Analyst reports
– FAQ
Strategy– How does your company plans to grow?
– How do you do things differently from the competitors?
Strengths
– What are your qualities that you utilize to achieve target?
– What are your qualities that your competitors do not have?
Market Position
– Where are you positioned in relation to your competitors?
Determine your company value
Four steps to a best practice presentation
Define your value
story/thesis
Structure
presentation
Gather
information
Develop
Presentation
Develop logical structure
Storyline & Storyboard
Company data
Industry data
Economic data
Slide types
Effectively designed visual aids
1 2 3 4
What sets your company apart?
Core skills and competitive advantages
Business strategy
14
A pyramid logic structure creating a well-organized and easy-to-follow presentation
15
Pyramid Logic Structure
Horizontal Relationships
Objective/ Main Point Title
Sections
Sub-sections
Supporting facts
Presentation
Vertical Relationships
Source: Recommended Approach to Presentation Writing, Jean-Florent Rérolle & The Pyramid Principle: Logic in Writing and Thinking, Barbara Minto
Sample: presentation structure
16
Company Overview
Financial Performance
Business Expansion
1.1 Overview
1.2 Milestone
1.3 Shareholder
1.4 Production base
1.5 Business strategies
Product variety
Distribution network
Logistic
Brand
Distribution
Financial flexibility
1.6 Current issue / market
concern
1 2 3
2.1 5-yr financial highlights
2.2 Quarterly performance
Sales performance:
volume & value
Costs
SG&A expenses
Profitability
2.3 Capital structure
3.1 Growth strategies
3.2 New project updates
3.2 CAPEX
3.3 Post-expansion capacity
Appendix
Profit & loss summary
Balance sheet summary
CSR activities
Marketing activities
Sample: presentation structure
17
Appendix
Profit & loss summary
Balance sheet summary
Detailed concessions
Growth Direction
4
4.1 Water demand and
tariff forecasts
4.3 Future projects
4.4 CAPEX and timeline
Business Overview
1.1 Overview
1.2 Shareholder
1.3 Steady growth
performance
1.4 EASTW businesses
1.5 Water businesses
Nature of business
Value chain
Market base
Volume & tariff
Concessions
1.6 Office rental business
1Financial
Performance
2
2.1 5-yr financial highlights
2.2 Earnings performance
Revenues & Gross
profit summary
Raw water: financial
performance
Tap water: financial
performance
EBITDA & net profit
Profitability
2.3 Capital structure
Water Situation
3
3.1 Pipelines & reservoirs
3.2 Water storage updates
Group I: Dok Krai,
Nong Pla Lai,and
Klong Yai reservoirs
Group II: Bang Pra
and Nong Kho
reservoirs
Group III: Prasae
reservoirs
Sample: presentation structure
18
Company Overview
Operational & Financial Performance
Going Forward
1.1 Overview
1.2 Vision & mission
1.3 Milestone
1.4 Business platform
1.5 Success factors
1.6 SINGER Business
Product segmentation
Distribution network
Sales mix
SINGER Way
1.7 Credit approval
procedure
2.1 Turnaround performance
2.2 Financial highlights
2.3 Productivity
2.4 Quarter performance
Sales performance:
volume & value
Gross profit & margin
Profitability
2.5 Credit performance
2.6 Capital structure
3.1 Growth strategies
3.2 CAPEX
Appendix
Company structure
Profit & loss summary
Balance sheet summary
Red delinquent
Terminology &
abbreviations
1 2 3
Storyboard is the key starting point for structuring presentation
19
A storyboard lets you organize your ideas and visualize your final product and lets you lay out the logic of your presentation in the most effective sequence
Four steps to a best practice presentation
Define your value
story/thesis
Structure
presentation
Gather
information
Develop
Presentation
Develop logical structure
Storyline & Storyboard
Company data
Industry data
Economic data
Slide types
Effectively designed visual aids
1 2 3 4
What sets your company apart?
Core skills and competitive advantages
Business strategy
20
Gather information
21
Financial dataFinancial statements, management reports
Non-financial dataDepartment statistics,
management reports, minutes of the Board’s meetings
ContextManagement, department heads
Company Data
Industry-specific publications
Industry studies
Competitors
Suppliers
Industry Data
Bank of ThailandFinancial sector data, interest rates, exchange rates
Ministry of FinanceGovernment income,
budget, public investment projects
National Statistical OfficeEmployment, population, etc.
National Economic & Social Development Board (NESDB)Retail sales, direct investment, etc.
Economic Data
Four steps to a best practice presentation
Define your value
story/thesis
Structure
presentation
Gather
information
Develop
Presentation
Develop logical structure
Storyline & Storyboard
Company data
Industry data
Economic data
Slide types
Effectively designed visual aids
1 2 3 4
What sets your company apart?
Core skills and competitive advantages
Business strategy
22
Three basic types of content slides to help develop this “supporting story”
23
PresentationDiagrams
Text Exhibits
__________________________________________________• ______________________
______________________• ______________________
________________________________________________________________________
Graphs:• Summarize numerical data• Draw attention to specific facts• Explain trends in underlying data
Diagrams:• Convey cause / effect, sequential
relationships between observations
• Organize information• Explain conceptual ideas
Text Exhibits:• Convey specific facts or ideas• Eliminate errors in interpretation
of the information presented• Summarize information on
previous or subsequent slides• Organize large amounts of
information
Source: Recommended Approach to Presentation Writing, Jean-Florent Rérolle & The Pyramid Principle: Logic in Writing and Thinking, Barbara Minto
Text exhibits are useful for organizing large amounts of information
24
Source: Recommended Approach to Presentation Writing, Jean-Florent Rérolle & The Pyramid Principle: Logic in Writing and Thinking, Barbara Minto
Text Exhibits
__________________________________________________• ______________________
______________________• ______________________
________________________________________________________________________
Outline
__________________________________________________• ______________________• ______________________
• ________________• ________________
__________________________________________________
TableMatrix Form
--------------- ----------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
-------------------------
--------------------------------------------------------------
--------------- --------------------------------------------------
--------------- -----------------------------------------
Low
Med
High
Low Med High
Diagrams are used to demonstrate sequential, cause and-effect and dependency relationships
25
Source: Recommended Approach to Presentation Writing, Jean-Florent Rérolle & The Pyramid Principle: Logic in Writing and Thinking, Barbara Minto
Diagrams
Gantt Conceptual Map OrganizationsFlow
Graphs help draw attention to underlying trends or relationships in data series
26
Source: Recommended Approach to Presentation Writing, Jean-Florent Rérolle & The Pyramid Principle: Logic in Writing and Thinking, Barbara Minto
CONTENTS
Importance of analyst presentation
Four steps to best practice presentation
Samples
Identity slide
Performance slides
Event slides
27
Types of presentation slides
Identity
Business Overview
Industry & company overview
Core products
Market-based operations
Customers
Competitive advantages
Events:
Investment conference Non-deal roadshow Company visit
Events:
SET’s Opportunity Day Quarterly analyst meeting Full-year earning presentation
Performance Event
Presentation slides
Ingredients:
Recap of major event (if any)
Operational performance
highlights
Financial performance
highlights
Analysis of the results
Outlook
Ingredients:
Executive summary
Rationale of the transaction
Transaction information
Impact
Timeline
What happened?
Impact
Solution / What’s next?
Events:
Event analyst meeting− New business− New strategic direction− Major investment− M&A or divestment− Capital increase
Deal roadshow Crisis
28
Future direction
Corporate strategies & objectives
Growth strategies
Sample of business identity slides
29
DRT is a manufacturer and distributor of roofing tiles, boards and ceilings, siding boards, and other roof accessories and non roof products as well as the service provider for roof stripping and installation under the trade names of Diamond, Roof, Adamas, and Jearanai.
Sample of business identity slides
30
Sample of business identity slides
31
AIT is a leading system integrator and ICT solution provider, supplying ICT products ranging from computer hardware to software applications over turnkey projects to service contracts and outsourcing schemes in both the private and the public sector.
Sample of business identity slides
32
Sample of business identity slides
33
EASTW takes responsible for the development and management of main water pipeline systems in the Eastern Seaboard by supplying raw water to industrial estates, factories and water works.
Sample of business identity slides
34
Sample of business identity slides
35
SINGER is the distributor of electrical appliances under the Singer trademark. The Company sells products on both cash and hire purchase basis, via direct sales channel, its owned branches, and authorized dealers throughout the country nationwide. Most of products distributed by Singer are purchased with OEMs (Original Equipment Manufacturers).
Sample of business identity slides
36
Types of presentation slides
Identity
Business Overview
Industry & company overview
Core products
Market-based operations
Customers
Competitive advantages
Events:
Investment conference Non-deal roadshow Company visit
Events:
SET’s Opportunity Day Quarterly analyst meeting Full-year earning presentation
Performance Event
Presentation slides
Ingredients:
Recap of major event (if any)
Operational performance
highlights
Financial performance
highlights
Analysis of the results
Outlook
Ingredients:
Executive summary
Rationale of the transaction
Transaction information
Impact
Timeline
What happened?
Impact
Solution / What’s next?
Events:
Event analyst meeting− New business− New strategic direction− Major investment− M&A or divestment− Capital increase
Deal roadshow Crisis
37
Future direction
Corporate strategies & objectives
Growth strategies
AIT – which is a project-based business – communicates its qualitative corporate objectives with its business strategies and operational framework.
Sample of strategy telling slides
38
Corporate objective should be communicated with guidance on how to achieve it.
DRT – one of companies having quantitative targets – clearly communicates its 5-year financial objectives with strategies and supporting data.
Sample of strategy telling slides
39
Sample of strategy telling slides
40
SINGER begins its strategy telling section with linkage between vision and strategies. Each strategy is afterwards clearly communicated with execution plans and supporting
data.
Sample of strategy telling slides
41
CONTENTS
Importance of analyst presentation
Four steps to best practice presentation
Samples
Identity slide
Performance slides
Event slides
42
Types of presentation slides
Identity
Business Overview
Industry & company overview
Core products
Market-based operations
Customers
Competitive advantages
Events:
Investment conference Non-deal roadshow Company visit
Events:
SET’s Opportunity Day Quarterly analyst meeting Full-year earning presentation
Performance Event
Presentation slides
Ingredients:
Recap of major event (if any)
Operational performance
highlights
Financial performance
highlights
Analysis of the results
Outlook
Ingredients:
Executive summary
Rationale of the transaction
Transaction information
Impact
Timeline
What happened?
Impact
Solution / What’s next?
Events:
Event analyst meeting− New business− New strategic direction− Major investment− M&A or divestment− Capital increase
Deal roadshow Crisis
43
Future direction
Corporate strategies & objectives
Growth strategies
Sample of performance slides
44
DRT’s sales performance partly depends upon season. DRT uses stacked column matrix and quarterly basis presentation to illustrate its financial performance. Dotted lead lines are used to pinpoint seasonality of underlining product.
Sample of performance slides
45
EASTW’s water distribution and water pipeline management are known as stable and defensive businesses. EASTW begins its financial section with 5-year financial performance, followed by present year’s performance presented on a half-year basis.
Sample of performance slides
46
SINGER’s business has turned around since 2009. SINGER underlines this fact by presenting its previous years’ performance on a yearly basis with that of present year on a quarterly basis. To ease analysis, sales in volume term are presented with those in value term, equipped with performance breakdown by groups of products.
CONTENTS
Importance of analyst presentation
Four steps to best practice presentation
Samples
Identity slide
Performance slides
Event slides
47
Types of presentation slides
Identity
Business Overview
Industry & company overview
Core products
Market-based operations
Customers
Competitive advantages
Events:
Investment conference Non-deal roadshow Company visit
Events:
SET’s Opportunity Day Quarterly analyst meeting Full-year earning presentation
Performance Event
Presentation slides
Ingredients:
Recap of major event (if any)
Operational performance
highlights
Financial performance
highlights
Analysis of the results
Outlook
Ingredients:
Executive summary
Rationale of the transaction
Transaction information
Impact
Timeline
What happened?
Impact
Solution / What’s next?
Events:
Event analyst meeting− New business− New strategic direction− Major investment− M&A or divestment− Capital increase
Deal roadshow Crisis
48
Future direction
Corporate strategies & objectives
Growth strategies
Sample of event slides: post-merger business
49
OFM operates as distributor of stationary supplies and office equipment, selling order through catalog, electronic commercial system (e-Commerce), electric procurement (e-Procurement) and store.
Sample of event slides: post-merger business
50
OFM undertook a business integration – accepting a transfer of the entire business of new shareholders – through capital increase and share swap with the new shareholders.
Sample of event slides: post-merger business
51
After business integration, OFM keeps its investors updated on its business integration activities and business expansions.
Sample of event slides: post-merger business
52
For comparative purpose, OFM presents its present year financial results with both actual (audited) and proforma (pre-merger) financial data of the previous year.
53
References Advanced Information Technology (“AIT”)
www.ait.co.th
Diamond Building Products (“DRT”)
www.dbp.co.th
Eastern Water Resources Development and Management (“EASTW”)
www.eastwater.com
Singer Thailand (“SINGER”)
www.singerthai.co.th
OfficeMate (“OFM”)
www.officemate.co.th
54
Contact Us PYI Consulting Company Limited18th floor, Park Ventures Ecoplex57 Wireless Road,Lumpini, Pathumwan,Bangkok 10330 Thailand
Pathom Yongvanich, Director & Partner:[email protected]+6681-866-1449
Sarit Chokchainirand, Director & [email protected]+66818552564
Office Tel. +662-116-9982 to 4
www.PYI.co.th
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