analyst presentation: the learning showcases

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

CONTENTS

Samples

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

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

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)

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

Excel spreadsheets

Charting tools

Mobile access

RSS fees

Calendar synchronization

Email news alerts

Webcasts

Presentations

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

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

CONTENTS

Samples

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

Define your value

story/thesis

Structure

presentation

Gather

information

Develop

Presentation

Company data

Industry data

Economic data

Slide types

1 2 3 4

Business strategy

Sample of investment story/thesis?

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?

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

Define your value

story/thesis

Structure

presentation

Gather

information

Develop

Presentation

Company data

Industry data

Economic data

Slide types

1 2 3 4

Business strategy

A pyramid logic structure creating a well-organized and easy-to-follow presentation

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

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

Distribution

Financial flexibility

1.6 Current issue / market

concern

2.1 5-yr financial highlights

2.2 Quarterly performance

Sales performance:

volume & value

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

Appendix

Detailed concessions

Growth Direction

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

2.1 5-yr financial highlights

2.2 Earnings performance

Revenues & Gross

profit summary

Raw water: financial

performance

Tap water: financial

performance

EBITDA & net profit

Profitability

Water Situation

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

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

3.1 Growth strategies

3.2 CAPEX

Appendix

Company structure

Red delinquent

Terminology &

abbreviations

Storyboard is the key starting point for structuring presentation

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

Define your value

story/thesis

Structure

presentation

Gather

information

Develop

Presentation

Company data

Industry data

Economic data

Slide types

1 2 3 4

Business strategy

Gather information

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

Define your value

story/thesis

Structure

presentation

Gather

information

Develop

Presentation

Company data

Industry data

Economic data

Slide types

1 2 3 4

Business strategy

Three basic types of content slides to help develop this “supporting story”

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

Text exhibits are useful for organizing large amounts of information

Text Exhibits

__________________________________________________• ______________________

______________________• ______________________

________________________________________________________________________

Outline

__________________________________________________• ______________________• ______________________

• ________________• ________________

__________________________________________________

TableMatrix Form

--------------- ----------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------

-------------------------

--------------------------------------------------------------

--------------- --------------------------------------------------

--------------- -----------------------------------------

Low Med High

Diagrams are used to demonstrate sequential, cause and-effect and dependency relationships

Diagrams

Gantt Conceptual Map OrganizationsFlow

Graphs help draw attention to underlying trends or relationships in data series

CONTENTS

Samples

Identity slide

Performance slides

Event slides

Identity

Business Overview

Core products

Customers

Events:

Performance Event

Presentation slides

Ingredients:

highlights

Outlook

Ingredients:

Executive summary

Impact

Timeline

What happened?

Impact

Events:

Future direction

Growth strategies

Sample of business identity slides

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.

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.

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.

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).

Identity

Business Overview

Core products

Customers

Events:

Performance Event

Presentation slides

Ingredients:

highlights

Outlook

Ingredients:

Executive summary

Impact

Timeline

What happened?

Impact

Events:

Future direction

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

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.

SINGER begins its strategy telling section with linkage between vision and strategies. Each strategy is afterwards clearly communicated with execution plans and supporting

CONTENTS

Samples

Identity slide

Performance slides

Event slides

Identity

Business Overview

Core products

Customers

Events:

Performance Event

Presentation slides

Ingredients:

highlights

Outlook

Ingredients:

Executive summary

Impact

Timeline

What happened?

Impact

Events:

Future direction

Growth strategies

Sample of performance slides

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.

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.

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

Samples

Identity slide

Performance slides

Event slides

Identity

Business Overview

Core products

Customers

Events:

Performance Event

Presentation slides

Ingredients:

highlights

Outlook

Ingredients:

Executive summary

Impact

Timeline

What happened?

Impact

Events:

Future direction

Growth strategies

Sample of event slides: post-merger business

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.

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.

After business integration, OFM keeps its investors updated on its business integration activities and business expansions.

For comparative purpose, OFM presents its present year financial results with both actual (audited) and proforma (pre-merger) financial data of the previous year.

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

Contact Us PYI Consulting Company Limited18th floor, Park Ventures Ecoplex57 Wireless Road,Lumpini, Pathumwan,Bangkok 10330 Thailand

Pathom Yongvanich, Director & Partner:pathom@pyi.co.th+6681-866-1449

Sarit Chokchainirand, Director & Partnersarit@pyi.co.th+66818552564

Office Tel. +662-116-9982 to 4

www.PYI.co.th

The Stock Exchange of ThailandGood Governance Development & Alliance Department62 Ratchadaphisek Road, Klongtoey,Bangkok 10110 Thailand

Office Tel. +662-229-2606 to 7

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