Investor Relations

IMPLEMENTING BEST PRACTICES IN INVESTOR RELATIONS 103materials prices, climate trends, consumer spending patterns, and so on.This description should include an analysis of a company’s sensitivityto the key exogenous factors to which it is exposed and any seasonalaspects of their business;The competitive environment and their positioning with regard to theirmain competitors.In addition to own company data or estimates, it is advisable to educatethe investor or the analyst on your macroeconomic environment: Provideexternal information sources and list them.Presenting the competitive environment requires objectivity and caution.Using abusive language against competitors will inevitably backfire oncorporate reputation. Remember that investors and analysts can provide awealth of information on the competitive environment, which makes it allthe more interesting in the dialogue IROs have with them.Among various skills, being as knowledgeable as can be on the company’ssector and cycle, the IRO will be able to do the following: Identify and help develop sector-specific indicators. Forinstance, the financial analysts for the software industry look at thenumber of existing customers compared to new customers and the breakdownof revenues between licence and maintenance. Telecom operatorsare asked to provide gross and net customer additions, customer acquisitioncosts, average revenue per line/product/user/employee/unit, just toname a few. Anticipate upturns and downturns and develop effective messages.These will notably highlight the company’s strategy and actions to adjustto a changing environment. For instance, if your company has an internationalfootprint, explain how regional differences may positively affect yourbusiness and product cycles.In this respect, you should also be able to notice when investors are waryof lengthy explanations by management of the economic environment inwhich its company operates. The reason is simple: They are already wellaware of it and overflowed with macroeconomic information.3.5.2.2 OrganizationMessages will focus on the legal structure of the company and the governancerules applied. Information about corporate governance is tightly