Lloyd Bevan studies the global in-person and virtual roadshow trends revealed in our original IR Magazine research, and hears from IROs on how they have successfully reset their engagement strategies
This year has seen a return to the road as companies resumed travel for in-person roadshows. It comes after a two-year hiatus when the Covid-19 pandemic restrictions put paid to the traditional roadshow format.
According to the IR Magazine Global Roadshow Report 2022 featured in this issue, 55 percent of companies held in-person roadshows in the 12 months from Q3 2021 to Q3 2022.
Pre-pandemic, the traditional in-person roadshow was a cornerstone of IR activity. Where to go? Who to go on the road with? Which managers to take on the road? These were the key decisions for IR as the assumption of travel was automatic.
But Covid-19 changed all that. As the virus spread through Asia, Europe and the Americas, a global pandemic was declared and by the end of Q1 2020 most of the world was in lockdown. Travel was severely restricted and international business travel practically eliminated.
A vital part of IR activity was thus taken away. IR professionals had to quickly go back to first principles, evaluate what they required from roadshows and what could be achieved without going on the road. This led to the adoption though Q2 2020 of the virtual roadshow format.
Research for the IR Magazine Global Roadshow Report 2020 shows that one third of roadshows held between Q3 2019 and Q3 2020 were virtual. So even before a full pandemic was declared, companies were looking for alternatives to international travel. At the height of the pandemic, from Q3 2020 to Q3 2021, just 7 percent of companies held in-person roadshows.
As travel restrictions lifted in the first half of 2022, an initially tentative return to the road has gradually increased. In a reversal of the 2020 findings, research from the IR Magazine Global Roadshow Report 2022 now shows that a third of roadshows held between Q3 2021 and Q3 2022 were in person.
Gwyn Lauber, vice president of IR at multinational Rockley Photonics Holdings, recalls the firm’s return to the road. ‘In March 2022, we returned to in-person roadshows with meetings in Zurich and London,' she recounts. ‘Our schedule was oversubscribed, but many of the investors we visited with mentioned it was their first day back in the office. We followed that with a trip to Boston, New York and Philadelphia in May. The schedules were great, but we did have a couple of cancellations due to Covid-19.’
Fast-tracks and slow roadsIt is notable that a US-based company should return to the road at first in Europe, where companies have led the re-adoption of in-person roadshows, with approaching two thirds having returned to the road as of Q3 2022.
As companies return to in-person roadshows, however, there has been a focus on domestic, in-region travel. Transatlantic travel has not regained its pre-pandemic levels. Among the North American companies that have been on the road in the year to Q3 2022, 23 percent have visited London in this time; this compares with a pre-pandemic level of 47 percent. Similarly, European visits to New York and Boston are at a comparatively lower level.
The return to the road has been much slower in Asia, where just a quarter of companies have resumed in-person roadshows.
‘The return to in-person roadshows in the past 12 months in Asia was definitely slower compared with other regions, especially with the strict regulations in place for Hong Kong,’ says William Wang, head of investor relations at Hong Kong-based BC Technology. ‘Singapore has spearheaded the opening and we expect to see in-person events come back to Hong Kong by November 2022.’
Affryll Teo, head of IR, sustainability and M&A at Malaysian insurance company Tune Protect, adds: ‘It isn’t surprising that Asia has the lowest percentage of in-person roadshows given that it was one of the laggards in terms of lifting and easing Covid restrictions. Having to quarantine for seven to 14 days in the hotel before you can even venture out for face-to-face meetings [doesn't encourage travel].’
Seeing other regions return to the road has heightened the value of in-person roadshows for some Asian firms. ‘Asian companies are looking for ways to get back on the road to speak with investors, especially given the macro conditions,’ says Wang.
‘We went through a phase where we thought technology was great and Zooming from home was easy, and now we’re craving more human interaction again. Also, the information flow and trust between the East and the West are at a low, and meeting in person can help a lot with that.’
‘Permanent change in roadshow activity’Prior to the pandemic, the in-person roadshow format was so established that it was difficult to imagine any alternative to the status quo. When IROs were asked in 2019 how important they thought increased use of technology would be to the future of roadshows, 42 percent thought it wouldn’t be, with just 27 percent viewing it as at least moderately important.
How times change. In the latest roadshow report, when asked to rate their satisfaction with virtual roadshows, 79 percent give a positive rating of 6+ out of 10, with 42 percent giving a high satisfaction rating of 8+ out of 10. Moreover, 79 percent of respondents view the experience of Covid-19 as having led to a permanent change in roadshow activity.
‘We started conducting both in-person and virtual roadshows based on the individual analyst's preference,’ recalls Teo. ‘What we noticed was that the participation rate of virtual meetings was higher than that of in-person meetings. This was probably attributable to the convenience that virtual meetings accord: people found it much easier to just dial in as opposed to traveling and braving the traffic.’
The convenience of the virtual format does have its downside, however. As easy as it is to engage in this format, it is equally easy to disengage. This generally means participants are less committed to virtual meetings than when they are there in person and so can become more easily distracted.
Real face-time valueIROs feel more strongly about the value of in person compared with virtual roadshows. While 42 percent are highly satisfied with virtual roadshows, 79 percent give the same rating to the in-person format.
‘The Covid-19 experience has actually made people get used to the convenience of virtual meetings,’ Teo says. ‘Nevertheless, some investors would still prefer a face-to-face meeting before deciding whether to invest. My belief is that in-person roadshows will make a comeback in Asia as Covid-19 becomes less of a concern. From an ESG perspective, virtual roadshows result in a lower carbon footprint versus traveling for an in-person roadshow.’
So while there is a general preference for a greater return to the road, there is also clear ongoing value attached to the virtual format. The future of roadshows appears, therefore, to be one that can best exploit the assets of both in-person and virtual engagement.
Lauber explains how she see this combination: ‘Virtual roadshows are very efficient and cost-effective, but they’ll never completely replace in-person meetings, which are much more relaxed and personal. You get a very different sense of investors and can read them better than on your screen. The meetings tend to be longer, too, so you can go into a lot more detail.
‘In future, I expect to do a combination of the two types of roadshows. The flexibility of virtual roadshows means we can participate in a lot more events. With a dispersed management team, that is really helpful.’
Findings in this article are taken from IR Magazine’s global roadshow reports from 2019 to 2022. Click here to explore the full archive of reports and research
