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Leading IR: What we can learn from the Top Performing TSX Companies

By: Tanya Rowntree, Vice President, Global Head of Client Success

Investor relations (IR) has long played a crucial role in connecting companies with the investment community, cultivating trust and facilitating informed decision-making. Through bull and bear markets, investors evolve and so does IR strategy. We spoke with some of this year's TSX30™ winners (https://money.tmx.com/en/tsx30) to find out what tactics had the most impact on their IR strategy and helped contribute to their superior performance. Here are some relevant and actionable insights to consider for your own IR strategy:

Communicate Transparently and In Depth

Transparency remains the cornerstone of effective investor relations. Providing timely, accurate, and comprehensive information to investors and analysts fosters confidence in the company's management and performance. Being responsive and openly addressing successes, challenges and risks demonstrates an organization's commitment to honesty and integrity. It is important to keep transparency at the forefront of your financial reporting, public disclosure, direct communication channels, and as you embrace new communication strategies. In addition to the traditional methods, embracing digital communication channels is pivotal, whether it's through your IR website, webcasts, social media, and email updates to stakeholders. Providing timely and accessible information not only fosters trust, it keeps stakeholders informed and minimizes speculation. Filo Corp. (TSX:FIL, ranked 3rd on the 2023 TSX30 list), for example, has leveraged social media and digital marketing across various platforms as a way to widen the distribution of its communication, and increase engagement and transparency with investors.

NuVista Energy Ltd. (TSX:NVA, ranked 2nd) disseminates transparent and timely information to foster confidence among stakeholders. Again the theme of comprehensiveness is fundamental to ensure stakeholders fully understand the company's financial and operational performance, as well as its strategic initiatives. The leadership team at NuVista adopts an open-door policy, welcoming dialogue with investors to further ensure a clear understanding of the company.

Headwater Exploration Inc. (TSX:HWX, ranked 16th), also points to transparent communications as the foundation of its IR program to help build investor confidence. The company makes it a priority to provide regular and comprehensive updates to investors, viewing this level of transparency as a building block for trust. Headwater proactively solicits investor input and takes into account the perspectives of its stakeholders. This practice allows the company to make well-informed decisions that are in line with shareholder expectations.

Focus on Capital Discipline

Capital discipline is important to IR because it directly affects how investors perceive and evaluate a company's financial health, growth prospects, and overall value. A common element among our TSX30 winners was their approach to capital discipline. Many of our winners identified that this steadfast focus on their capital sets them apart and contributes to their strong performance. Enerplus Corporation (TSX:ERF, ranked 17th) identifies a disciplined capital allocation framework as a key to its success.

Baytex Energy Corp. (TSX:BTE, ranked 12th) views its commitment to maintaining capital discipline and generating meaningful free cash flow as the reason for the company's success and market performance over the past three years. Baytex has communicated to shareholders a five-year plan that is focused on modest organic production growth and strengthening its balance sheet. The plan includes a shareholder return framework that would see Baytex increase direct shareholder returns as it achieves certain debt targets. The company also believes its share buyback program is an efficient means by which to return capital to shareholders and improve per share metrics.

Secure Energy Services Inc. (TSX:SES, ranked 29th) has continually emphasized the recurring nature of its business and its ability to generate significant free cash flow. The company believes that increasing awareness of its significant free cash flow and its historical Adjusted EBITDA conversion rate has been paramount and reflected in its share price performance. Secure Energy has also been delivering on its promise to increase returns to shareholders, both through increased dividends and share buybacks.

Build Relationships and Trust Over Time

Investor relations should not be confined to periodic reporting; it is a continuous process of relationship-building. Cultivating lasting relationships requires active engagement and responsiveness. IR teams should strive to be approachable, attentive, and receptive to investor inquiries. Regular interactions with analysts, institutional investors, and retail shareholders can offer valuable insights into investor sentiment and concerns, allowing the company to address issues proactively. Bombardier Inc. (TSX:BBD.B, ranked 13th) notes that strong and constructive relationships with its investors are built through accessibility, which applies to all levels of the organization, from investor relations to the leadership team. Bombardier emphasizes the value of open dialogue with investors and provides clear, straightforward answers to their questions, while also creating opportunities to connect with the investment community.

Global Atomic Corporation (TSX:GLO, ranked 20th) is focused on its retail shareholders — the holders of the majority of its shares. In building its relationship with the retail side, Global Atomic prioritizes timely and respectful interactions. Every investor deserves respect as well as the time and attention of the IR team, including acknowledgment by email the receipt of an inquiry and providing an estimate as to when an informed response will be returned. The IR team also ensures that management has time to speak with interested parties.

Emphasize Long-Term Value Creation

Short-term fluctuations in share prices can distract investors from a company's long-term potential. To counteract this, companies may emphasize their commitment to long-term value creation in their investor relations strategy. Providing a clear and compelling narrative about the organization's growth prospects, innovation, and sustainability initiatives instills confidence in investors about the company's future potential. Both Shawcor Ltd., dba Mattr Infratech (TSX:MATR, ranked 7th) and Stelco Holdings Inc. (TSX:STLC, ranked 11th) have put the focus on providing exceptional value for their shareholders. Whether it's turning inward and transforming their business, in the case of Shawcor, or Stelco's consistent focus on an industry leading cost structure and tactical capital deployment, both companies are aligning with the interests of shareholders for the long-term.

Embracing the best practices of our TSX30 winners — by fostering transparency, ensuring capital discipline, building strong relationships, and emphasizing long-term value creation — we hope companies can better navigate IR, seize opportunities, and build lasting relationships with investors. Through these strategic efforts, companies can not only enhance their shareholder value but also strengthen their position in the market to become more resilient in the face of challenges, and better positioned for long-term success.

The Company Services team is committed to supporting TSX- and TSX Venture-listed issuers with a broad suite of complimentary services. By leveraging a deep understanding of Canadian capital markets, the team provides solutions, education and mentorship, actionable insights, and market intelligence that facilitate the funding, profile, and success of our companies. Please visit www.tsx.com/companyservices for more details.

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