A year into the pandemic that made roadshows fully virtual, Garnet Roach looks at what worked, what’s changed – and what the future might look like
With a ventilator in view and one of its heated humidifiers – used to improve the outcomes of coronavirus patients in hospital – running in the background, management at Fisher & Paykel Healthcare, a firm that plays a crucial role in supplying respiratory equipment used to treat Covid-19 patients around the world, took investor meetings from a lab decked out to look like an intensive care unit.
‘We didn’t want to provide a typical CEO-sitting-in-a-boardroom experience for our virtual roadshows,’ explains Marcus Driller, vice president of corporate at the Auckland, New Zealand-based company. The firm has laboratories that look like ICUs, so a lot of video calls were done from these ‘usability labs’.
The thinking, says Driller, was that while ‘we can’t give investors the face-to-face experience of meeting with management, what we can do is help investors understand the business a bit more and how our products are helping patients.’
A year into the Covid-19 pandemic, the impact on corporate access has been significant. In an instant, meetings, roadshows and conferences were either cancelled or flipped to virtual, with most companies holding fully virtual AGMs and roadshows for the first time. As companies have become more comfortable with the technology enabling the world’s meetings to go ahead – and the new etiquette of virtual – those planning the roadshows have learned and made changes to help keep things fresh.
As well as holding meetings from its labs, Fisher & Paykel Healthcare played with multiple cameras. For example, it had one focused on management and IR – so investors ‘could clearly see our faces’ – and another that could be switched (by a technician) to the wider view.
Touches like this certainly help companies stay in the mind of investors, but IR teams have also been tweaking their roadshow logistics with management in mind.
National Grid's half-year results roadshow
Making it about what works Caroline Dawson, investor relations manager at UK utilities giant National Grid, says virtual has certainly been a success for the company, allowing management to meet 116 investors across 19 cities for the full-year results roadshow in June 2020.
It followed that with 99 meetings across 16 cities for the half-year results roadshow in November.
For that first fully virtual roadshow in June, Dawson scheduled meetings across a period of just over two weeks, with the goal of not making it too intense for management. ‘But what happened was that [managers] then did lots of other meetings as well,’ she explains. ‘They ended up having this feeling of extremely long, exhausting days and the sense that the roadshow was going on and on and on.’
When the half-year results roadshow came round in November, Dawson brought all the meetings together into the space of one week. It meant earlier starts and later finishes – though not on the same day – but she says it helped with fatigue and gave the feeling of something that was ‘done and completed quite efficiently, rather than just dragging on.’
Another thing that changed for National Grid’s second all-virtual roadshow was that Dawson essentially ditched time zones. ‘Originally, I tried to keep the regional approach that I would use for a traditional roadshow, where I would keep all my East Coast investors to the same day and then keep all the Australia ones together, grouping meetings together by time zone,' she explains.
‘I did away with that this time around. Because we were really condensing the roadshow, my focus was on what worked for management and for the investors. That did mean a bit of jumping around geographically, but in the end it didn’t really matter and what we found was that investors seem to have a consistency of questions, regardless of their region.’
Two ESG days were also added to National Grid’s November roadshow – a first for the company. ‘We did an ESG day for North America and an ESG day for Europe, which were really popular. So I think we’re going to build on that next time, and hopefully do more regions,’ Dawson says.
The company decided the time was right to add ESG days partly because of increased investor interest but also because it had published its Responsible Business Charter in October, holding a virtual ESG seminar to go with the launch.
‘That was extremely well attended, with lots of interest from across the globe,’ says Dawson. ‘There were just so many questions, and we realized that an ESG roadshow was something that was going to be popular with investors.’ (See Online learning for more on National Grid’s new series of virtual education guides about ESG).
Fisher & Paykel's 'meeting room' lab
Tag team time The idea that time zones and geography have become increasingly irrelevant is a sentiment that crops up regularly these days. But does it remain the case for those operating from far-flung locations?
Driller says Fisher & Paykel Healthcare handled time differences by splitting management into two teams, something the Australasian Investor Relations Association says has been common practice among New Zealand and Australian companies.
For both the full and half-year results roadshows, Lewis Gradon, Fisher & Paykel Healthcare’s CEO, and CFO Lyndal York would – along with IR – take shifts on the roadshow schedule. One team took the 6.00 am to 2.00 pm raft of meetings, and the next team took over for the afternoon to evening shift, with meetings until around 10.00 pm. ‘That worked for us, as we were able to cover the globe,’ says Driller, though he admits it was harder to organize than previous, in-person roadshows.
Like Dawson, Driller largely went direct in organizing meetings (he uses the Nasdaq platform, while Dawson uses ingage) and, interestingly, he even felt the company had more success going direct to new investors, rather than through a broker, as they would have done in the past.
Also like Dawson, Driller made some tweaks between the first and second virtual roadshows. ‘Initially we were doing hour-long meetings, but we realized that anything more than about 45-50 minutes was a challenge,’ he says, adding that they ‘could have got through more meetings’ in the time but it was felt that around 45 minutes with a 20-minute break was ‘a more sustainable approach’.
Tick tock, tick tock This length of time is almost universally agreed on because everyone has discovered that management really needs that break between meetings. Not only to prep before the next one but also to stretch the legs, look away from the screen and take a few minutes before the next video call.
And while people might have felt a little uncomfortable wrapping up a meeting 10 months ago, no one today really wants to stay on the call longer than an hour anyway. Fisher & Paykel Healthcare even added a clock to the video screen so that people would stay mindful of the time.
Meeting length is just one factor that Mike O’Connor, global head of access strategies at Citi, says companies, investors and brokers have found makes a difference in how productive virtual meetings can be. Another is limiting the number of attendees in a group meeting.
‘We quickly found that once you go over six to eight people in a group, you can’t have real interaction,’ O’Connor says. ‘There are just too many faces to see to get a feel for the meeting. There are too many people speaking at once, and nobody gets a voice. I’d rather tell an IRO that we’ve got 15 people interested, but instead of doing one group of 15, please can we do three 45-minute slots [of five people each], as they’ll have a better experience.’
That’s been a key lesson, says O’Connor, and he advises companies to avoid days full of meetings, too. ‘You lose your effectiveness,’ he cautions, adding that morning or afternoon blocks of meetings work well.
Switching on the camera also makes a big difference. People are much more forgiving about the stuff we all worried about in the beginning: babies crying, cats on keyboards, partners walking past in their pyjamas. That’s not what makes a bad meeting. What makes a bad meeting is a lack of interaction or if some attendees don’t turn their cameras on. ‘With a virtual meeting, you’re already losing that physical connection so you need to see the person to at least get face language if not body language,’ O’Connor says.
This is something we all became more comfortable with as the pandemic persisted, he adds. At the start of the lockdowns, he estimates that around half of investors kept their cameras switched off – ‘there was still that reluctance to be seen, to have your background seen’. Now, he says around 90 percent turn the camera on, half-joking that ‘either people’s confidence levels have gone up or their standards have dropped.’
Past experience Although anecdotally there’s been a surge in direct engagement, O’Connor says Citi has remained very busy. In fact, the bank was named as the top broker for virtual roadshows in the 11th annual IR Magazine Roadshow Report (published in the winter 2020 issue of IR Magazine), when the report listed the most-used brokers for both in-person and virtual roadshows for the first time.
The bank had actually been incorporating virtual ‘in some shape or form’ into conferences and roadshows for four years before the pandemic hit, explains O’Connor,.
And Citi did this in a number of different ways: ‘beaming’ a company into a panel at a conference if it wasn’t able to travel; virtually bringing a group lunch with a Chinese corporate in Hong Kong to investors in Sydney, Tokyo and Singapore; or in an emergency. O’Connor recalls a Japanese corporate getting snowed in in Boston, leaving her unable to make it to Toronto.
‘So we did a virtual day from the Boston hotel where she was snowed in and kept the roadshow virtual with the Toronto investor,’ he says.
That meant the bank was at least comfortable with the technology when everything was suddenly upended. ‘When the pandemic hit and the lockdowns came in around the world in the third week of March, we were in a good position to start converting everything that we did – and we had to convert everything,’ he says. ‘We had conferences taking place in four days’ time that we changed from physical to virtual overnight.’
Caroline Dawson, National Grid
A return to physical meetings In the future, O’Connor – like many – predicts a mixed approach for meetings, but says that what will hold companies and investors back from returning to fully physical meetings won’t be a fear of the pandemic. ‘There’s a big pent-up appetite for travel,’ he says. ‘Once the pandemic passes, vaccination is global and everybody feels comfortable, I don’t think people will be scared of travel.
'What will restrict travel is budgets – for investors, for the sell side in terms of organizing conferences and for corporates – and the fact that we know virtual works.’
Indeed, budgets simply aren’t what they were pre-pandemic and, despite people wanting to get back out on the road, they’ll also soon remember travel time and jet lag. O’Connor predicts a 60:40 physical/virtual split in future.
In fact, speaking in early February, Driller had already begun in-person meetings at Fisher & Paykel Healthcare. At time of writing, New Zealand had no community transmission and, while country borders were expected to remain closed until at least the end of 2021, Driller says real-life meetings with domestic investors restarted earlier this year, though he stresses the precautions the company takes, issuing visitors with an innovative Bluetooth tracking card that feeds information into the company’s own contact-tracing system.
So what has it been like seeing investors face-to-face again? ‘It’s good to see people again!’ Driller enthuses. ‘Teams and Zoom are good, because [at least] you do get to see people, but it’s the bits before and after the meeting where you develop the relationship.
‘It is hard to recreate that in a virtual environment.’
National Grid’s ESG seminar in October 2020 – held alongside the launch of its Responsible Business Charter – was such a success that the company added two ESG days to its virtual roadshow a month later and has since started a new virtual education series for investors titled ‘The Grid guide to…’
The first was held on January 21, just a week before IR Magazine spoke to Caroline Dawson, IR manager at the utilities firm. The first of the series saw six speakers, including CEO John Pettigrew, talk about the future of gas, with the opportunity for a Q&A afterwards.
‘The future of gas is an extremely popular topic,’ says Dawson. ‘Hydrogen: everybody wants to learn more about it and there were more than 500 people watching live, which is far more than we could ever get together in one room.’ The next session will see the company discuss the decarbonization of transport.
And the seminars will all remain virtual, adds Dawson: ‘Why wouldn’t they be? It’s convenient and it lets you reach far more people.’ But she does say they have to be shorter events – definitely not a full day. These are 45-minute presentations, plus a 45-minute Q&A. ‘So we’re doing shorter events, but more often,’ she concludes.
