the euromoney equity capital markets handbook … · the euromoney equity capital markets handbook...
TRANSCRIPT
THE EUROMONEY EQUITY CAPITAL MARKETS HANDBOOK2012
ECM_FC and Spine_2012.qxp 16/9/11 15:13 Page 1
Michael OppermannPartnerHead of Financial Accounting Advisory ServicesGermany - Switzerland – Austria
Phone +49 6196 996 [email protected]
www.de.ey.com
Considering an IPO?Preparing your masterpiece in capital markets
Dr. Martin SteinbachExecutive Director (FAAS)Head of IPO and Listing ServicesGermany - Switzerland - Austria
Phone +49 6196 996 [email protected]
IFC_ECM_2012 18/9/11 07:57 Page 1
CHAPTER 2 I EUROMONEY HANDBOOKS
5
Pre and post-IPO readiness andrecent trends in primary marketsby Michael Oppermann and Dr. Martin Steinbach, Ernst & Young
1. Trends in global primary markets
Consolidation of exchanges and ongoing riseof emerging IPO markets Global IPO markets exhibit a rich diversity of geographies,
industries and types of companies. Such investment
activity also demonstrates that investors are no longer
limited to primarily investing in their domestic market.
Emerging markets continue to fuel global IPOs, despite
financial volatility. Vice versa high-quality enterprises,
primarily from the emerging markets, continue to be
well-received by the world’s public markets. Serving these
and the following trends, world’s stock exchanges continue
to consolidate through transatlantic mergers.
The revolution in share trading has broughtabout fundamental changes With the evolution of capital markets over the past few
years, investors and issuers are connected in a highly
efficient global environment. High speed trading networks
and technology and even lower prices for hardware and
trades enable investments in milliseconds with no physical
barriers. New virtual trading platforms, such as dark pools,
have arisen with the liberalisation of markets and high
frequency and algo trading accounting for more than 50%
of trading volume, has changed the behaviour of market
participants fundamentally, leading to a fragmentation of
liquidity and information.
Convergence of main listing and regulatoryrequirements globallyGlobal liquidity and capital follows a good investment story
wherever it’s listed. Liquidity is not sticky anymore with
the market of the primary listing. As international investors
require high transparency of issuers, initial and ongoing
listing requirements converge and listing standards in main
Despite turbulent times, initial public offerings (IPOs) are taking place allover the world in a primary market that has changed fundamentally.Globalisation is taking place in capital markets in a highly efficient virtualenvironment, accessing investors worldwide without physical barriers.But how does a company begin the all-consuming task of preparing for anIPO journey? What are the lessons learnt? When starting out, it’s importantto realise that the IPO event is not the end game. Rather, this will be amomentous process for the organisation that will continue long after theactual transaction. The journey begins with earnest decision-making anddiligent planning. The paramount importance of internal preparednessbecomes apparent early in the process. And readiness is defined, in part, bymanagerial diligence, endurance and organisational discipline.
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 5
CHAPTER 2 I EUROMONEY HANDBOOKS
markets of major stock exchanges no longer differentiate
that much. As a result, exchanges profiles are quite similar,
but soft differentiation factors remain in terms of
environment, location, profile and image. Going forward,
serving and protecting investors – a global prospectus
standard – could lower IPO costs for issuers in the future,
accompanying investors buying IPOs worldwide.
Dual listings going east or west again on the riseSecondary listings are again on the rise – albeit with new
motivations. And an additional stock exchange listing,
particularly in emerging markets, is becoming increasingly
important for strategic reasons. Companies with a core
strategy in the market of the dual listing especially expect
higher visibility towards end consumers, better access and
commitment to the market and government. The reach of
relevant perception and the result of such business
rationale will prove the strategic goals of dual listings in
the future.
Acceptance of IFRS as global financialreporting language growingMarkets moving towards accepting and adopting
International Financial Reporting Standards (IFRS) as the
global accounting standard will improve an investor’s
ability to compare and evaluate companies, provide more
transparency and decrease the costs incurred by
companies for accumulating, preparing and reporting
financial information. It also helps regulators reach their
ultimate goal to increase the efficiency of financial
marketplaces, lower the costs of capital with an improved
allocation of capital worldwide, and enhance shareholder
value. Following high speed trading with a way of efficiently
communicating financials to analysts and investors, XBRL
(eXtended Business Reporting Language) could evolve as
the global communication standard in the future.
Challenging IPO markets come and go – butwinning companies are always readyThe lessons learnt from successful IPOs are even more
crucial in volatile economic conditions in an interlinked
world that reacts at high speed to unpredictable external
shocks. Even when the financial climate is not ideal for
raising funding, it could be a good time to be planning for
an IPO or any other deal. While waiting for markets to
settle, executives may embark upon the IPO phases and, in
the two to three year transformation process, fully prepare
their company so that it is ready to go public when markets
recover. That’s why good preparation to achieve IPO
readiness is key to success.
2. Key preparation aspects of IPO readiness
Executing a company strategy requires access to capital.
One of the primary ways to access capital is to go public.
Companies that have completed a successful IPO know
the process involves the complete transformation of the
people, processes and culture of the organisation from a
private enterprise to a public one. Businesses need to
undergo many months of advanced planning, organisation
and teamwork before they are ready to go public.
The journey to public company status must prepare an
organisation not only for the defining moment of the IPO
ceremony at the remaining trading floors, ringing the bell,
but also for a whole new phase of corporate life. That’s
why market outperformers treat the IPO as a long-term
transformational process which brings change to every
aspect of the business, organisation and corporate
culture.
Going public is not for every company. The pitfalls are
numerous and the stakes are high. Lack of adequate
preparation and poor market timing can jeopardise an IPO.
It’s important to understand the suitability of the IPO for
the business, given a company’s business model, growth
potential and the stage of the company’s life cycle.
Preparation is critical. Successful IPO candidates often
spend two years or more building business processes and
infrastructure, recruiting executive and advisory talent,
getting in front of financial and reporting issues and
mastering the essential board of directors’ commitment to
go public. In the life-changing journey from the private
6
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 6
CHAPTER 2 I EUROMONEY HANDBOOKS
realm to the public markets, senior managers face
numerous leadership challenges which test the IPO
readiness of their business. Therefore, the key question
that a CEO, CFO and senior executives need to ask is: Are
we prepared?
So how does a company begin the all-consuming task of
preparing to go public, which starts well before the IPO
event and continues long after? From the company’s
perspective eight main areas are usually covered by the
question and answer session of an IPO readiness
workshop. Shareholders, CEO and CFO typically want to
know and to evaluate the following aspects:
• Potential IPO strategy
This basic topic assesses the motivation, use of
proceeds, relevant market, right exchange, adequate
listing segment, first check of equity story and main
cornerstones of issuing concept in an IPO base case.
• Legal structures as listed company
Questions are about the right potential issuer,
transparent company structure, design of articles of
association, and type of shares.
• Tax optimisation pre-IPO
Considerations address the country of registration, tax
optimisation for shareholders and the company and
transformation process into the relevant legal form.
• Efficiency of finance and reporting
Discussions are around accounting efficiency,
reporting and disclosure periods with regards to fast
closing ability, IFRS-conversion and integration and the
ability to deliver relevant content for prospectus
preparation.
• Systems’ infrastructure readiness
As the capital market requires additional information,
the IPO assessment includes relevant systems like the
readiness of internal controls, compliance and risk
management supported by an efficient IT infrastructure.
• New functions for the ‘being public’ phase
Questions in the assessment are about the readiness
of corporate governance processes, investor relations
and capital market requirements like the internal
preparedness for insider regulation, directors dealings,
ad hoc disclosure etc.
• Leadership structure and organisation
Is an experienced board in place? Are they well-trained
for media purposes and for the life as a public company?
How does the remuneration fit to capital markets
expectations? What about long-term incentive plans?
• Timing the right IPO window
Considerations include a potential IPO schedule, the
relevant alternatives of plan B in a potential multi-track
process and the ability to staff internal resources for
IPO project management.
3. IPO readiness assessment: why,where and how to go public?
To start the IPO process ‘on the right foot’, the IPO
readiness assessment is a structured approach designed to
guide the company through a successful IPO transaction to
a strong debut in the capital markets. Executives want to
7
Michael Oppermann, Partner
Head of FAAS – Financial Accounting Advisory Services
tel: +49 6196 996 27305
email: [email protected]
Dr. Martin Steinbach, Executive Director
Head of IPO and Listing Services (FAAS)
tel: +49 6196 996 11574
email: [email protected]
Germany - Switzerland - Austria
Michael Oppermann Martin Steinbach
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 7
CHAPTER 2 I EUROMONEY HANDBOOKS
understand more the ‘measures that matter’ – what it
takes to win in the capital markets. The assessment is also
a gap analysis tool. Its purpose is to diagnose those areas
of the business which require the most development and
management attention before the IPO process begins,
helping the company to be listed more quickly and
efficiently. It identifies gaps between the company’s
current state and where it needs to be for an IPO to be
successful. It includes main questions about why, where
and how to go public.
Why? IPO motivation and strategyFor many companies in an early stage the key question is:
could an IPO be the right next step. The preparation starts
with the careful evaluation of pros and cons of an IPO, the
potential use of proceeds and examination of alternatives.
This is in line with the first questions from investors at an
IPO roadshow: why are you going public and what is the
use of IPO proceeds? Answering these fundamental
questions is key to the success of an IPO. Therefore
outperforming companies weigh the benefits of going
public against the drawbacks, as well as against the
company and shareholders’ objectives. The possible
motivations shown in Exhibit 1 of going public are
numerous, including: improved financial condition, liquid
mergers and acquistions (M&A) currency, more capital to
sustain growth and innovation, better incentives for
management and employees through stock options,
enhanced corporate image, better future financing
opportunities and the ability to benchmark operations
against other public companies from the same industry.
The potential drawbacks of going public can include: loss
of control and privacy, limits on management’s freedom to
act, the demands of periodic reporting, initial and ongoing
expenses, the burden of dealing with shareholders’
expectations and increased disclosure requirements.
Where? Strategic question about the rightIPO destinationThe decision to raise capital is no longer limited to
exchanges in a company’s local market – companies now
have a real choice. Companies deciding to go public need
to map out all the necessary steps and tasks. But first they
have to set down their goals in order to determine the
specific requirements for the IPO. And that means
determining which capital market or listing zone (the
Americas, Europe/EMEIA (Europe, Middle East, India and
Africa), Asia), and which stock exchange and segment will
actively support the company’s strategy. Up to now,
companies have as a rule chosen their home market as the
location for their primary listing. But, as the saying goes,
the exception proves the rule: many high-profile examples
of businesses, e.g., the Italian brand Prada, have gone
public abroad.
A company today faces a wide range of options for
registering in markets in addition to, or possibly, instead
of, the company’s local exchange. To achieve the right
combination of corporate and capital market strategy for
the IPO or secondary listing, companies can choose from
more than 100 stock exchanges and listing options
worldwide. There are three self-contained regions for
companies wishing to go public – Europe/EMEIA, Asia and
8
Equity:finance
innovationand
growthHigher
visibilitytowards all
stakeholders
Leadstrategies M&A
transactions andconsolidation
Betterexecution ofLTIP/SOPs
Exit optionfor PE/VC
Positioningalongside
global industryleaders
HR: higherattractivenessfor new people
IPO Better brandrecognition
Possible motivations of goingpublic Exhibit 1
Source: Ernst & Young
PE/VC = private equity/venture capital LTIP/SOPs = long-term incentive plan/stock option plans
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 8
CHAPTER 2 I EUROMONEY HANDBOOKS
the Americas – each distinguished by its different time
zones, currencies and economies. But where is the stock
exchange that is right for a company? This question can be
approached from two perspectives – the national and the
sectoral. The national perspective: a company’s home
market is often regarded as the country in which it is
incorporated. This is where companies usually go public.
And it is here that investors expect the listing, as the
company is intimately linked to economic development in
its particular country (the economy, culture, infrastructure,
technology base, taxes) and also shows its commitment to
the relevant capital market regulations.
The sectoral perspective: a company can also be said to be
at home where people can best understand and evaluate
its business model. As a result, the marketplace where
many comparable companies (peers) are listed, which has
sector-specific analyst expertise, and which attracts
investors in the sector can also be regarded as a
company’s home market.
Does it make sense to go public or to have the primary
listing outside the company’s country of incorporation?
How mobile is the company on the capital market? Finding
the answers to these questions can pose complex
challenges – particularly if there are strategic benefits to
listing the company far from its familiar national market.
For example, entrepreneurs can expect a listing abroad to
attract consumers’ attention to the company’s products
and media presence, facilitate access to new markets and
positively impact business operations.
These factors shown in Exhibit 2 must be carefully
examined and weighed up against each other. It involves a
number of considerations from various perspectives:
• strategic motivations and goals;
• considerations relevant for valuation purposes;
• access to and perceptions of investors;
• costs and regulations; and
• other preferences.
Other factors that motivate companies to go public outside
their home market vary according to their country of
incorporation and require in-depth knowledge of various
specifics. These include the size requirements implied by
the regulations that have to be fulfilled, uncertainties
regarding the listing process, and the waiting or processing
times during the approval of the prospectus and the
registration of the securities.
How? Internal preparation of the companyIPO readiness requires a sturdy infrastructure to facilitate
regulatory compliance, to protect against risk exposure
and to provide guidance to meet or beat expectations.
Based on the experience and lessons learnt from many
transactions, companies preparing an IPO can count on the
following recommendations based on the most challenging
milestones and with relevant assessments in context.
• Start early and commit substantial resources
Preparing for an IPO is an intense and arduous
process, and it’s easy for management and employees
to become distracted by the enormity of the task.
The company must strike the right balance between 9Considerations about IPO destination Exhibit 2
Source: Ernst & Young
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 9
CHAPTER 2 I EUROMONEY HANDBOOKS
managerial focus on the IPO transaction and the day-
to-day operation of the company. Companies should
begin the IPO readiness process early enough so that
the prelisted company acts and operates like a public
company at least a year before the IPO. Substantial
resources should be committed to the IPO process.
And an experienced management team, robust
financial and business infrastructure, corporate
governance and investor-relations strategy that will
attract the right investors need to be prepared.
IPO candidates often underestimate the amount of
time the IPO journey will take, and the level of scrutiny
and accountability faced by a public company. This is
the reason why successful companies approach the
IPO as a transformational process rather than the end
game or just a financing event. Main questions of the
assessment are: has a formal, comprehensive written
plan and time-line been developed? Are resources in
place to support the IPO process and project
management?
• Building the right IPO team: recruit and retain an
experienced team
Company’s top managers must have the experience
and skills to undertake the IPO transaction and operate
a public company leading up to the roadshow and long
after it is over. According to recent studies, investors
expect capital market experience from the CFO, and
from the CEO deep industry knowledge. Likewise,
external advisers should be highly skilled
professionals with extensive IPO credentials, contacts
and industry expertise. They are the voices of
experience. Areas of the assessment include: are the
eligibility and qualifications of current board members
to serve on the board of a publicly traded company
evaluated? Does the management team have
experience and a going-public track record? Have the
right advisers with IPO and public company experience
been selected?
• Designing a compelling equity story and minimum
issuing volume
Be able to articulate a compelling equity story backed
up by a strong track record of growth which sets the
company apart from their peers while increasing value
for owners. According to a study of Ernst & Young,
institutional investors base an average of 60% of their
IPO investment decisions on financial performance
measures – in particular, growth in earnings per share
(EPS), earnings before taxes, depreciation and
amortisation (EBITDA) and profitability – and attribute
an average of 40% of their IPO investment decisions to
non-financial measures, attaching the most importance
to management credibility, corporate strategy and
brand strength: a compelling equity story covering all
these aspects is key to market an IPO. A recent study
of the Investment und Asset Management Association
in Germany (BVI) identified the importance of a
compelling equity story as one of the top tier criteria to
invest alongside a minimum market cap of €150m and
a free float of around 40%.
• Reviewing business processes and infrastructure:
construct a strong infrastructure for accurate financial
reporting and forecasting
A strong infrastructure which enables accurate
financial forecasting and regulatory compliance needs
to be in place before the IPO launch. Readiness is
established, in part, by managerial diligence and
endurance and organisational discipline. The company
needs to define and implement adequate business
policies and procedures, systems, security and
controls well in advance to ensure they will withstand
the rigors and scrutiny of public company status.
Questions are: has the needed/desired transparency
been established within the organisation? Are the
financial, accounting, tax, operational and IT processes
systems and controls needed to support the
transformation into a public company already in place?
10
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 10
CHAPTER XX I EUROMONEY HANDBOOKS
11
• Evaluate alternative exit strategies: keeping
options open
Before settling on the IPO route to growth capital,
most IPO candidates and private equity firms explore
alternative strategies. Taking a dual-track approach
expands a company’s strategic options, improves
negotiating leverage and reduces execution risk.
The M&A market, private equity-backed deals and
dual-track approaches (such as a concurrent pursuit of
both an IPO and an M&A transaction) are viable
alternatives to raise capital and each offer their own
unique strategic advantages. The main questions are:
have other possible transactions that could be
attractive alternatives to an IPO been considered?
Has the company’s potential M&A valuation versus its
public company valuation been determined?
• Establishing corporate governance and investor
relations: create the corporate governance policies
that inspire shareholder confidence
Companies should take time to build a team with
compliance and governance specialists, experienced
investor relations (IR) officers and financial executives.
Similarly, they should adopt best practice corporate
governance and reporting policies that protect
shareholder interests. The infrastructure-building
process should include the development of a strategic
investor-relations programme for marketing the
company prior to the IPO so key IR professionals are
on hand to guide planning for and performance during
the IPO roadshow. Questions include: what kind of
board system (two or one tier) fits best? Is the board in
compliance with local corporate governance
requirements including for example the stipulation for
a ‘financial expert’? Are appropriate corporate
governance oversight, policies and procedures,
internal controls, bylaws and infrastructure in place?
Based on the feedback from many successful IPOs,
Exhibit 3 displays the main lessons learnt that IPO
candidates should keep in mind and on the radar screen
when preparing an IPO.
Post-IPO is pre-IPO, meaning that readiness includes the
phase after the first flotation and the ability of the
company to serve the capital market on an ongoing basis.
Because once the company goes public, the real work
begins – keeping the promises made during the IPO and
roadshow, managing the expectations of shareholders and
analysts and delivering growth and value.
• Managing investor relations and communications: keep
investors informed by best practice communications
High-performing companies delegate key
communication responsibilities to their investor
relations team, focus on creating a high-quality
roadshow and keep investors informed through regular
communications before, during, and after the IPO.
Market outperformers deliver shareholder value by
demonstrating effective investor relations and finance
function and, most importantly, operational excellence.
Strong investor relations function will help sustain the
Nosubstantial
resources inplace tosupportprocess
External IPOteam not
reallycommitted
Plan B notevaluated and
prepared
No incentivesagreed uponunderwriting
fees
Timeinvolvedunder-
estimated
Complexity ofprocess under-
estimatedLimitedflexibility with
regards totiming
Pre-IPOradar
screen
Too focussedon a high
price
Lessons learnt pre-IPO Exhibit 3
Source: Ernst & Young
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 11
market’s interest in the company, communicate with
shareholders and the public, attract a pipeline of new
investors and sell-side research coverage and manage
regulatory and liability risk. Building this competency
is a fundamental element in the IPO preparation
process. Typical questions are, for example: does the
company have a skilled investor relations expert to
help build IR strategy and guide communications?
Has an internal and external corporate communication
strategy and plan been prepared?
• Maintain the pace of growth: planning pre-IPO for
post-IPO requirements
The preparations needed to take a business public can
be arduous. With the transaction out of the way, it
might be tempting to relax, but the company needs to
keep moving forward. An aftermarket plan should
include proactive measures to establish pricing
stabilisation and active trading support, to target an
optimal investor mix and long-term pipeline, to attract
equity research analyst coverage and to establish an
ongoing dialogue with the investment community and
financial media. Market communication needs to
address changes in the presentation of financial
information, and the fundamental change towards fair
value accounting and its impact on traditional ratios
and key performance indicators. Key questions are:
does the company have an IR calendar? What are the
initiatives to keep the shares traded with high liquidity?
• Focus on the long term and keep refreshing and
retelling the equity story
The work companies put into getting the business
ready for public life is invaluable, but the journey to
long-term success requires rigorous planning matched
by a commitment to operational excellence. The IPO
may be the most important transaction in a company’s
life to date, but it’s often just one more milestone
along the road to market leadership. The listed
company needs to continually re-evaluate and refresh
the business and management team. During the IPO
process, a compelling equity story was crafted about
where the company is going and its fast track to
market leadership. Reviewing and refreshing the equity
story based on changes in corporate strategy is
important to keep investors updated and interested.
• Cultivate effective IR, build investors’ confidence and
facilitate liquidity
IR needs to cultivate relationships with key analysts,
helping them to understand the business. It takes
strategic planning and proactive effort to build
effective relationships. The IPO process will have
created excitement about the company in the media
and among investors, but over time that will fade
unless IR maintains the market’s interest. If the
company fails to do this, the trading volume in the
shares, and value of business, are likely to decline.
To maintain that effort once the company is public is
key to building investors’ confidence and establishing
credibility. Sustainable and regular communication and
recent news flow will provide trading liquidity,
supporting investment activity in the market.
• Delivering the promises and managing expectations
The public market is an unforgiving place. They insist
on transparency and won’t tolerate surprises. As a
listed company, IR won’t always enjoy plain sailing
with respect to financial results or material news. CEOs
and CFOs must deliver on promises as a fundamental
preparedness factor. Furthermore, companies should
meet or beat the expectations set, especially with
regard to the use of proceeds. To thrive, the company
needs to demonstrate to investors that they are
successfully executing the business plan, while
ensuring regulatory compliance. Areas to consider:
companies should define the key metrics that will drive
business forward. Monitor these indicators closely and
use them to frame public analysis of the company,
ensuring that discussion of its performance takes place
on companies’ terms. Keep on top of emerging threats.
A newly listed company has to deal with an entirely
CHAPTER 2 I EUROMONEY HANDBOOKS
12
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 12
CHAPTER 2 I EUROMONEY HANDBOOKS
13
new set of risks, any of which could derail the business
plan. It’s all about managing expectations and
appropriate communication.
According to the feedback from entrepreneurs with their
first experience as a listed company, Exhibit 4 displays the
main lessons learnt post-IPO. These are important aspects
to keep in mind when preparing the company for the time
after the IPO.
4. IPO readiness diagnostics: actionplan and road map
The results of the IPO readiness assessment will also
enable the company to prioritise and focus resources on
those areas expected to have the greatest impact on the
efficient completion of the IPO. The report can also be used
as the basis for a road map that can be developed to allow
for resource and time constraints. An integrated action
plan can have long-lasting implications, above meeting the
minimum IPO requirements. Building a robust business
infrastructure forms an important component of
establishing a sound financial reputation; a key criterion
by which the market will judge a company’s business.
IPO candidates may therefore choose to develop a level of
infrastructure in excess of the minimum required for the
IPO to ensure that the business is well-positioned to grow
and succeed in its new environment.
As investors decide about the success of an IPO at the end,
their view on financial project-specific and non-financial
aspects is essential to now preparing the company for an
IPO. Therefore the road map and a clear action plan should
keep the IPO success factors from an investor’s
perspective, displayed in Exhibit 5, in mind.
5. The right timing by navigating thewindow of opportunity
Timing the market is a key success factor for an IPO.
If scheduled perfectly, the price of the IPO not only offers
the company an optimal valuation, but also provides IPO
investors with the greatest upside in their investment in
the months and years after the IPO. Companies preparing
to go public within the next few years have much to
consider: the strength and buoyancy of the capital
markets, current economic indicators and the company’s
performance. Even in a challenging economy, companies
which outperform the overall market prepare early for their
transformational IPO journey, so that they are ready to
launch quickly when markets recover. Companies must
communicate realistic time-line expectations to the entire
IPO team – management, board members, external
advisers and others. Especially in an uncertain market,
outperforming companies explore alternative exit
strategies to an IPO, although public offerings are
generally seen as providing better valuations, access to
capital, visibility and credibility.
The window of IPO opportunity can be difficult to predict, as
external shocks come suddenly without any announcement
or pre-warning. Globalised and interlinked capital markets
Internalstructuresnot readyfor new
processesNo media
training on C-level for IPO
case
With the IPO,things are done
CEO/CFO busyon IR tour with
negative impacton sales
Notprepared for
the requirementsafter the IPO
Management ofexpectationsnot a priorityPromises
on use ofproceeds not
delivered
Post-IPOradar
screen
Managementnot trainedfor ‘being
public’ phase
Lessons learnt post-IPO Exhibit 4
Source: Ernst & Young
005-014_E&Y_ECM_2012 16/9/11 17:42 Page 13