17.10.2023 Blog

The role of CMD becomes more important in times of uncertainty

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In an uncertain environment, it is increasingly important to clearly communicate the company’s strategic direction to investors
Investor trust is reflected in their actions, and a strong equity story helps maintain commitment even in challenging times
A Capital Markets Day (CMD) is a key tool for building trust and explaining strategy
A successful CMD requires a clear, long-term equity story and a solid explanation of the business model, market, and competitive advantages
It is beneficial to involve a broader management team and provide industry insights
Key updates should be disclosed via a stock exchange release ahead of the event
The agenda, execution, and interaction should be carefully planned, including hybrid participation and consideration of retail investors

Uncertainty has become a constant companion for us. High interest rates, cost inflation, and geopolitical tensions are examples of factors that make it increasingly critical to help investors understand companies’ strategic direction.

Confidence in a company’s operations and future prospects is easy to measure: investors and shareholders communicate their intentions by buying, holding, or selling their shares. The company and investors are on the same side and want the same thing: to succeed together. A committed investor who believes in the company’s story does not jump ship at the first sign of trouble but trusts in its ability to navigate even stormy waters.

In a challenging environment, the Capital Markets Day (CMD)—which builds understanding and trust—has taken on an important role in management’s toolkit; its purpose is to explain to investors where the company is coming from, where it is going, and how it plans to achieve its goals.

When planning an effective Capital Markets Day, it is important to keep the following points in mind:

Start preparing your investor pitch early and clearly articulate what kind of investment opportunity your company represents. Keep strategic clarity at the forefront. Focus on the long term and your strategy. Explain your business model, competitive advantages, markets, and financial perspectives. A good investor story builds a connection with investors and guides expectations beyond the next quarter. It engages and inspires investors, customers, partners, and employees alike.
Highlight industry-specific issues: Bring other members of management to the stage alongside the CEO and CFO. Offer a fresh perspective, for example, through industry-specific insights. Keep investors informed about industry trends and the company’s readiness to adapt to them.
Remember to issue a stock exchange release before the event; especially if the strategic direction is updated, companies should publish key content via a stock exchange release. Set aside time to draft the release and structure it in parallel with the event script. What are the key points the market needs to know and understand?
Plan the program and its duration carefully. Consider whether to hold the event as a hybrid or in-person, and think about how to ensure investors have equal opportunities to participate. Don’t forget retail investors. Allocate sufficient time for Q&A, but don’t overwhelm them with presentation slides. Think about how to foster dialogue. Be sure to collect feedback from participants and use it when planning your next event.

Planning a CMD?

Let’s work together to determine what kind of investment opportunity your company wants to be and how to convey that story to investors.