IR Magazine Research Report - Corporate Access 2022
The independent voice of IR
<sub>Research Report</sub>
Corporate Access
Examining the impact of
virtual meetings and events
on investor engagement
<sub>Part I - How investors view virtual
corporate access and how this affects
their relationship with a company</sub>
<sup>Sponsored by</sup>
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Introduction
Who did we survey?
The past two years have seen considerable changes to the world of corporate access. The onset of the Covid-19 pandemic meant the practical elimination of in-person meetings and events. Until the end of 2021, interactions between companies and the investment community were overwhelmingly virtual.
This report is one of two by IR Magazine looking at the impact these changes to corporate access have on IR. In it we investigate the practical effects of the virtual format on meetings and events with investors, how this impacts the volume of meetings and events, how likely investors are to take virtual meetings and how they rate virtual events. We further examine how engaged investors are within virtual meetings and whether this affects investment decisions.
Findings are taken from IR Magazine’s Global IR Survey, conducted from Q4 2021 to Q1 2022 and the Global Investor Survey conducted in Q4 2021. This report uses the term 'IRO' to represent IR professionals in general and ‘investor’ to represent members of the investment community, both buy side and sell side.
Findings in this report from both IROs and investors are broken down by geographical region. Data from investors is additionally separated between buy side and sell side while IRO data is broken down by market capitalization. For the purposes of this report, market cap is defined as:
Small cap <$1 bn
Mid-cap $1 bn-$5 bn
Large cap $5 bn-$30 bn
Mega-cap >$30 bn
Total IRO respondents: 255
Total investor respondents: 185
Editor
Lloyd Bevan
Research
Ash Govender, Ariah Varcianna
Chief copy editor
Kathleen Hennessy
Design and production executive
James Noden
Meetings
Preferred meeting formats
How many in-person and virtual investor meetings did you hold
between June 2021 and January 2022?
In the second half of 2021, companies held an average of 79 virtual meetings and six in-person meetings with investors. Combined, this is just four more meetings than the average number held in the second half of 2019, before the pandemic hit. In terms of volume of meetings, this indicates that the virtual format has adequately covered the loss of in-person opportunities caused by the pandemic.
Regionally, most meetings, both virtual and in person, were held by European companies. The fewest meetings were held by Asian companies, which is also the only region to hold fewer total meetings in H2 2021 than in H2 2019.
The number of virtual meetings held with investors increases with company size. Small-cap companies held fewer meetings in H2 2021 than H2 2019, while mega-cap companies held more than 50 percent more meetings in H2 2021 than they did in the second half of 2019.
Does the virtual or in-person format affect how likely you are to take a meeting?
Slightly more investors are more likely to take a meeting if it is in person rather than virtual. While just over a third say that it makes no difference, 35 percent say they are more likely to take an in-person meeting, compared with 31 percent that are more likely to take a virtual meeting.
There is a difference of preferences between the sell side and the buy side. On the sell side, four in 10 are more likely to take an in-person meeting, while a quarter would be more likely to take a virtual meeting. Among buy-side respondents, the situation is reversed, with four in 10 more readily taking virtual meetings and just under a third more likely to take meetings in person.
Investors in Europe and Asia are more likely to take in-person meetings, but North American investors are more likely to take a virtual meeting.
Does the virtual or in-person format affect how engaged you are with meeting the company?
Investors are clearly more engaged with companies in person than in virtual meetings. When asked whether the format affects how engaged they are with meeting the company, nearly six in 10 say they are more engaged with in-person meetings, compared with just 8 percent that say they are more engaged with virtual and just under a third saying it makes no difference.
While greater engagement with companies during in-person meetings is a clear factor across roles and regions, there are some differences. The sell side is engaged with in-person meetings to a larger degree than the buy side, and there appears to be a greater level of indifference among North American investors than is seen in Europe or Asia.
Investment decisions
How meetings influence investment decisions
Taking a position – Number of meetings
How many meetings do you have on average before an investor takes a position in your company?
It takes an average of three meetings with a company before an investor takes a position. Regionally, there is little difference in how many meetings it takes before an investor takes a position, with it taking slightly more meetings on average among North American companies than it does among European or Asian companies.
Similarly, there is little difference according to company size: small-cap firms have an average of 2.7 meetings with investors before they take a position while large and mid-caps have an average of 3.1 meetings.
Taking a position – Factors
Engagement with management is the most-mentioned factor for investors in how many meetings it takes for them to reach an investment decision. The clarity and quality of reporting and good general IR can also make it easier for investors and reduce the time needed on meetings. The complexity of a business and its strategy, as well as the industry it is in, are further factors mentioned by some investors.
What factors influence how many meetings are needed with a company before an investment decision is made?
Do virtual meetings affect how many meetings are needed before an investor takes a position in your company?
A majority of more than six in 10 IROs say the number of meetings it takes before an investor assumes a position in their company is not affected by whether the meetings are in person or virtual. But more than a third say it takes more virtual meetings for an investor to take a position, compared with just 5 percent who say it takes fewer virtual meetings.
The view that more virtual meetings are needed before an investor takes a position is most common among European IROs and least common among North American IROs, where just over a quarter hold this view. According to company size, this view is most held by IROs at small-cap firms and least held among mega-caps.
Taking a position – Comments
When asked to comment on their view, IROs who think the number of meetings is unaffected by the format they are in cite the efficiency of virtual meetings and note that other factors are more important than the meeting format, such as the quality of reporting. IROs who say it takes more virtual meetings for an investor to take a position often mention that virtual meetings are easier to arrange so investors can be more casual in their approach to them. In-person meetings can be more in-depth and trust between company and investor can be established more quickly.
Do virtual meetings impact how many meetings are needed before an investor takes a position in your company?
No, it takes the same number of virtual as in-person meetings
Why do you think this is?
Yes, more virtual than in-person meetings are needed
Why do you think this is?
Taking a position – Investors
Do virtual meetings affect how many meetings are needed with a company before an investment decision is made?
The views of investors in taking a position broadly match the experiences of IROs. While the majority of investors take the same number of virtual as in-person meetings before making an investment decision, twice as many say they need more virtual meetings before they are ready to take a position as say they need fewer meetings.
There is little difference between the buy side and the sell side on this issue. Among European investors there is no net difference in whether they need more or fewer virtual meetings before making an investment decision. More than four in 10 Asian investors say they need more virtual than in-person meetings before taking a position.
Taking a position – Comments
Investors unaffected by the format of meetings in their investment decisions give many of the same reasons as IROs. These investors see the information received and the content of a meeting as more relevant to their investment decisions than the style of a meeting, while many see that technology has made virtual meetings as effective as in-person meetings.
Investors that require more virtual meetings before making an investment decision often say it is easier to get a read on management with in-person meetings and that they can become more comfortable and more confident with a company in this format.
Do virtual meetings impact how many meetings are needed with a company before an investment decision is made?
No, it takes me the same number of virtual as in-person meetings before I make an investment decision
Yes, I need fewer virtual than in-person meetings before I make an investment decision
Yes, I need more virtual than in-person meetings before I make an investment decision
Events
Which formats best suit different events?
Six in 10 firms hosted roadshows in the second half of 2021. In total, 57 percent hosted virtual roadshows and 13 percent went on the road in person. During this period, six times as many virtual as in-person roadshows were held.
Regionally, North American companies were the most likely to hold virtual roadshows, while European companies were the most likely to go on the road in person, although Asian companies held the highest average number of in-person roadshows. Mega-cap companies hosted the most roadshows in both formats.
The overall average number of roadshows held in the second half of 2021 was 2.8, compared with 3.3 in H2 2019. This means that the virtual format has not fully compensated for the loss of in-person activity during the Covid-19 pandemic.
Between one in five and one in four companies held an investor day in the second half of 2021, with 19 percent holding a virtual investor day and just 5 percent holding one in person. Three times as many investor days were held virtually as were held in person.
Asian firms held the highest number of both in-person and virtual investor days in this time, while North American companies held the lowest number in both formats. According to company size, mid-cap firms held the most virtual and in-person investor days.
The average total number of investor days held in H2 2021 was 0.4, compared with 0.5 held in the second half of 2019. This means the virtual format has effectively compensated for the loss of in-person investor days in this time.
Less than a quarter of companies hosted site visits in H2 2021, with 18 percent hosting in-person visits and just 6 percent hosting a virtual site visit. The number of visits held in person was two and a half times the number of virtual site visits.
More than a third of North American companies hosted a site visit in the second half of 2021, with three in 10 holding these visits in person. Mid-cap companies hosted the highest number of both virtual and in-person visits.
While companies overall hosted an average of two site visits in the last half of 2019, this fell to an average of 0.7 in H2 2021. It is understandable that the virtual format has not adequately replaced in-person site visits given the location-based nature of these events.
More than seven in 10 companies attended investor conferences in the second half of 2021, with 68 percent attending a virtual conference and 19 percent attending conferences in person. The average number of virtual conferences attended in this time was 4.2, more than eight times the number of in-person investor conferences.
Although North American companies are the most likely to have attended both virtual and in-person conferences, the average number attended for both formats is highest among Asian companies. Mid-cap companies have attended the most and small caps the fewest conferences in both virtual and in-person formats.
The average number of investor conferences attended in the second half of 2021 was 4.8, compared with 4.2 in H2 2019. The result of the switch to virtual in this time has been to increase the number of investor conferences that companies typically attend.
Virtual events – Investor ratings
In general, how would you rate your experience of the following virtual events?
Investor days are the most-valued virtual corporate access event among investors. When asked to rate each event on a scale of zero to 10, where zero is not at all positive and 10 is extremely positive, 83 percent give a positive rating of above five, with almost six in 10 giving a high rating of eight or above. Investor days are the only corporate access event where the virtual format is rated more highly by investors – with a score of eight or above – than the in-person format.
Although more investors give a positive rating to virtual roadshows than to investor conferences, more give a high positive rating to virtual investor conferences. Of the four event types, site visits are the lowest-rated corporate access event to be done virtually – but even here more than two thirds of investors give a positive rating, with 45 percent giving a high rating of 8+/10.
Virtual events – Investor ratings by role and region
With the exception of investor days, the sell side rates virtual corporate access events lower than the buy side.
Among the buy side, investor conferences are the most-valued event in the virtual format, with virtual investor days having more or less the same ratings as roadshows and site visits.
More than seven in 10 North American investors give a high rating of 8+/10 to virtual investor days. They are not as highly rated by European and Asian investors, which give greater appreciation to investor conferences and roadshows as virtual events.
Virtual events – Investor comments
Please give reasons for your ratings on virtual events
In-person events – Investor ratings
In general, how would you rate your experience of the following in-person events?
When asked to rate each event on a scale of zero to 10, where zero is not at all positive and 10 is extremely positive, all in-person corporate access events have high positivity ratings from investors. Site visits are the most appreciated, with four in five giving a high rating of eight or more and just under half giving a perfect 10 score.
Investor conferences are rated more highly than roadshows when in person, receiving a high 8+/10 rating from 78 percent and a score of 10 from 19 percent. Investor days are the least-appreciated in-person corporate access event, with just 42 percent of investors giving a rating of eight or above.
In-person events – Investor comments
Please give reasons for your ratings on in-person events
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Emerging
earnings-related
best practices
We sat down with John Nunziati, IR partner at Q4, to talk about the trends we see emerging related to quarterly earnings releases
Emerging
earnings-related
best practices
We sat down with John Nunziati, IR partner at Q4, to talk about the trends we see emerging related to quarterly earnings releases
The investor relations profession can be a bit inconsistent. As a function, we always strive for perfection: error-free press releases, every slide formatted precisely, every number verified and every investor interaction flawless.
This often leads to sticking with processes, vendors and practices that are safe and reliable. IR teams should also be aware of emerging trends and proven best practices, which forces us to look at making changes. Unfortunately, changes can come with risk-taking.
The earnings preparation, announcement and follow-up process is a great example of this inconsistency. If no one ever took the risk of changing, we’d still be sharing dial-in details for webcasts – wait, many IR teams still do this! There are new practices emerging that are worth noting as we believe they are likely to become the standard, most widely adopted best practice. Here are a few examples we’ve seen.
John Nunziati, IR partner at Q4
Expected earnings release dates
Many companies choose to announce their earnings release date using a consistent and predictable interval before the date of the actual release. This is thought to minimize investor speculation about results based on the timing of the sharing of the release date.
We are seeing companies adopt a new approach that provides more visibility while acknowledging the quarterly cyclicality of a release date, particularly when there is a long company history of consistent timing. These companies are putting their ‘expected’ or ‘planned’ dates out on their website, showing a schedule that maintains a rolling four quarters. Then they confirm the actual date, relying on the same consistent and predictable interval they’ve always used.
We’ve actually seen one very progressive IRO who includes the projected upcoming event dates (earnings and investor events such as sell-side conferences) in her email signature.
New approaches to enhance results publication
Press releases have always been the official reference document for results, comments and financials. They’re backed up with SEC filings. Companies leading the innovation efforts in this area have added capabilities to their websites such as historical results viewers, downloadable spreadsheets and – of course – quarterly earnings decks.
The latest trends we see include new presentations of results in ‘earnings infographics’, with data formats tailored to analysts’ needs. We have also seen companies adopt the use of QR codes in their press releases to allow rapid online access to specific financial statements or supporting materials available on their website.
Earnings call format
Covid put pressure on IR teams to adopt capabilities for delivering their earnings calls with management participants in various locations. Some companies also used it as an opportunity to implement pre-recorded prepared remarks. They found that the deadline to record helped stop last-minute script editing and shifted management’s attention to more thorough Q&A preparation, both resulting in a less stressful call day.
Some IR professionals have also convinced management teams that concurrent with the time of the public release, they can make the prepared remarks and/or the actual recording available on the website. This allows them to focus the actual earnings call on Q&A only, resulting in a more thorough discussion of the results.
Covid further raised people's comfort level with video to the point that some management teams were willing to implement it for their prepared remarks. A few brave IR leaders have even engaged their participants to ‘look management in the eyes’ by joining with their cameras on for live Q&A through a video platform.
Someone has to be the trailblazer, the pioneer willing to try something no one else has done. The good news for investor relations professionals is that everything mentioned above has been done.
The de-risking has occurred so consider how you might improve your outreach to investors by implementing some of the techniques outlined here. We’re available to help with any of them – just reach out to your Q4 contact and we’ll set up some time to discuss them with you in more detail.
Sponsor’s statement
Find out about Q4
Q4 is a leading capital markets communications platform provider that is transforming the way publicly traded companies, investors and investment banks make decisions to efficiently discover, communicate and engage with each other. The Q4 end-to-end technology platform facilitates interactions across the capital markets through its IR website products, virtual events solutions, capital markets customer relationship management solutions and shareholder and market analytics tools. The firm is a trusted partner to more than 2,650 public companies including 50 percent of the S&P 500. Q4 is based in Toronto, with offices in New York and London.
