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SOCIAL MEDIA IS KEY TO SUCCESSFUL INVESTOR RELATIONS

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Abe Smith, President, EMIA, Cision

By Abe Smith, President, EMIA, Cision

Social media is now such an established part of our media landscape it can be easy to underestimate its value.

For instance, with so many daily tasks for Investor Relations (IR) professionals to complete before the markets close, social media monitoring is often deprioritised or can be simply left to PR. Understandably, it can be very difficult to keep a finger on the pulse of social media activity amid the tumult of tracking share prices, coordinating shareholder meetings and releasing financials.Understandable, maybe, but the experts say it is wrong.

Abe Smith, President, EMIA, Cision

Abe Smith, President, EMIA, Cision

Remember, the ‘always on’ nature of social media has given the wider community of consumers a mighty weapon. And, not only does the impact of a negative social media storm hit a company’s reputation, but, in recent years a social media backlash, has become intrinsically linked to the financials of a business.

Several companies learnt this the hard way last year. Among them was Ryanair, the Irish low-cost airline, which recently suffered a reputational scandal following a widespread cancellation of flights due to poor pilot holiday planning. The announcement triggered outbursts of outrage on Twitter and #BoycottRyanair quickly trended. As a result, Ryanair’s shares dropped significantly and – at the time of writing – are yet to fully recover.

In the US, another airline – United Airlines – faced a similar backlash after an incident where a passenger was forcibly removed from one of its planes. Social media posts of a passenger being forcefully removed from an overbooked flight went viral, and United Airlines’ share subsequently fell by 2.5 per cent. Clearly, this reinforces the importance IR teams should place on monitoring social media activity and understanding its impact on share price.

Social awareness is crucial

Customers often use social media to publicly praise or criticise a company. At the same time, many businesses do not treat investors as customers, and therefore overlook how and where they consume information. According to research conducted by Greenwich Associates, 79 per cent of institutional investors use social media at work, while a third of them confirmed that the information they received through social media has impacted an investment recommendation, or, the final decision, even.

So social media clearly influences the way investors and analysts perceive and rate a company. For IR teams, monitoring social media channels and listening to the noise is an important part of managing investor relations.

Response-time is critical

So, if you agree social media monitoring is a priority and you have set up your social listening and monitoring channels, what do you need to do if you encounter an emerging social media problem?

Timing is crucial. You need to respond as quickly as you can. By reacting quickly, IR teams can help prevent an issue from escalating. Solid crisis plans help you speed up your response and should include a comprehensive media policy as well as guidance for social media responses. Should an emergency occur, everyone, including the CEO, should be aware which approach to take. Reacting clearly and concisely in a crisis can help manage reputation of a brand. It also helps build trust and credibility between the company, its followers and investors.

Promoting company-wide social guidelines
As well as having social media guidelines that address how to react when a social media storm is beginning to gain momentum, guidelines around how employees should conduct themselves online can also help minimise emerging issues.

Organisations have a responsibility to ensure that employees are acutely aware of their responsibilities on social media. Indeed, an ill-advised post from a staffer could have adverse consequences for the reputation of the business.

Keep your ear to the ground

Besides monitoring your own company’s websites, Twitter feeds, LinkedIn accounts and YouTube videos it is also important to keep an eye on competitor’s channels. Understanding what they do and what is said about them gives IR teams a valuable insight. By analysing the online challenges competitors face, IR teams can think about how to address the potential issues they might face themselves.

When IR teams monitor what the social media community is saying about their company, its products and share price, and regularly check if any rumours are being spread, they can react quickly. To do this efficiently, monitoring tools can help them identify influential social media users, and measure the implications of their discussions. These insights are crucial to position a business more accurately within its market, and help troubleshoot issues.

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Battling Covid collateral damage, Renault says 2021 will be volatile

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Battling Covid collateral damage, Renault says 2021 will be volatile 1

By Gilles Guillaume

PARIS (Reuters) – Renault said on Friday it is still fighting the lingering effects of the COVID-19 pandemic, including a shortage of semiconductor chips, that could make for another rough year for the French carmaker.

Renault reported an 8 billion euro ($9.7 billion) loss for 2020 which, combined with gloomy take on the market, sent its shares down more than 5% in late morning trading.

“We are in the midst of a battle to try to manage a difficult year in terms of supply chains, of components,” Chief Executive Luca de Meo told reporters. “This is all the collateral damage of the Covid pandemic… we will have a fairly volatile year.”

De Meo, who took over last July, is looking at ways to boost profitability and sales at Renault while pushing ahead with cost cuts. There were early signs of improving momentum as margins inched up in the second half of 2020.

The group gave no financial guidance for this year, although it said it might reach a target of achieving 2 billion euros in costs cuts by 2023 ahead of time, possibly by December.

Executives said they were confident the carmaker could be profitable in the second half of 2021, but that they lacked sufficient market visibility to provide a forecast.

Renault struck a cautious note, saying it was focused on its recovery but warned orders had faltered in early 2021 as pandemic restrictions continued in some countries.

The group is facing new challenges as the European Union tightens emissions regulations and after rivals PSA and Fiat Chrysler joined forces to create Stellantis, the world’s fourth-biggest automaker.

The auto industry endured a tough 2020 but a swift rebound in premium car sales in China helped companies such as Volkswagen and Daimler to weather the storm.

Auto companies globally have since been hit by a shortage of semiconductors that has forced production cuts worldwide.

“The beginning of the year has shown some signs of weakness,” De Meo told analysts, but added the chip shortage should be resolved by the second half of 2021. “We have taken the necessary measures to anticipate and overcome challenges.”

Renault estimated the chip shortage could reduce its production by about 100,000 vehicles this year.

SHARP HIT

The group was already loss-making in 2019, but took a sharp hit in 2020 during lockdowns to fight the pandemic, which also hurt its Japanese partner Nissan.

Analysts polled by Refinitiv had expected a 7.4 billion euro loss for 2020. The group posted negative free cash flow for 2020.

The 2018 arrest of Carlos Ghosn, who formerly lead the alliance between Renault and Nissan, plunged the automakers into turmoil.

In a further sign that the companies have been working to repair the alliance, De Meo told journalists that Renault and Nissan will announce new joint products together in the coming weeks or months.

Renault has begun to raise prices on some car models, and group operating profit, which was negative for 2020 as a whole, improved in the last six months of the year, reaching 866 million euros or 3.5% of revenue.

Analysts at Jefferies said the operating performance was better than expected. Sales were still falling in the second half, but less sharply.

Renault is slashing jobs and trimming its range of cars, allowing it to slice spending in areas like research and development as it focuses on redressing its finances. It is also pivoting more towards electric cars as part of its revamp.

It was already struggling more than some rivals with sliding sales before the pandemic, after years of a vast expansion drive it is now trying to rein in, focusing on profitable markets.

De Meo told journalists on Friday that the French carmaker will make three new higher-margin models at its Palencia plant in Spain, where manufacturing costs are lower, between 2022 and 2024.

($1 = 0.8269 euros)

(Reporting by Gilles Guillaume and Sarah White in Paris, Nick Carey in London; Editing by Christopher Cushing, David Evans and Jan Harvey)

 

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UK delays review of business rates tax until autumn

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UK delays review of business rates tax until autumn 2

LONDON (Reuters) – Britain’s finance ministry said it would delay publication of its review of business rates – a tax paid by companies based on the value of the property they occupy – until the autumn when the economic outlook should be clearer.

Many companies are demanding reductions in their business rates to help them compete with online retailers.

“Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances,” the ministry said.

Finance minister Rishi Sunak has granted a temporary business rates exemption to companies in the retail, hospitality, and leisure sectors, costing over 10 billion pounds ($14 billion). Sunak is due to announce his next round of support measures for the economy on March 3.

($1 = 0.7152 pounds)

(Writing by William Schomberg, editing by David Milliken)

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Discounter Pepco has all of Europe in its sights

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Discounter Pepco has all of Europe in its sights 3

By James Davey

LONDON (Reuters) – Pepco Group, which owns British discount retailer Poundland, has targeted 400 store openings across Europe in its 2020-21 financial year as it expands its PEPCO brand beyond central and eastern Europe, its boss said on Friday.

The group opened a net 327 new stores in its 2019-20 year, taking the total to 3,021 in 15 countries. The PEPCO brand entered western Europe for the first time with openings in Italy and it plans its first foray into Spain in April or May.

Chief Executive Andy Bond said its five stores in Italy have traded “super well” so far.

“That’s given us a lot of confidence that we can now start building PEPCO into western Europe and that expands our market opportunity from roughly 100 million people (in central and eastern Europe) to roughly 500 million people,” he told Reuters.

To further illustrate the brand’s potential he noted that the group has more than 1,000 PEPCO shops in Poland, which has a significantly smaller population and gross domestic product than Italy or Spain.

The company, which also owns the Dealz brand in Europe but does not trade online, has already opened more than 100 of the targeted 400 new stores this financial year.

Pepco Group is part of South African conglomerate Steinhoff, which is still battling the fallout of a 2017 accounting scandal.

Since 2019 Steinhoff and its creditors have been evaluating a range of strategic options for Pepco Group, including a potential public listing, private equity sale or trade sale.

That process was delayed by the pandemic, but Steinhoff said last month that it had resumed.

“The business will be up for sale at the right time. It’s a case of when, rather than if,” said Bond, a former boss of British supermarket chain Asda.

Pepco Group on Friday reported a 31% drop in full-year core earnings, citing temporary coronavirus-related store closures.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were 229 million euros ($277 million) for the year to Sept. 30, against 331 million euros the previous year.

Sales rose 3% to 3.5 billion euros, reflecting new store openings.

($1 = 0.8279 euros)

(Reporting by James Davey; Editing by David Goodman)

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