Federico Sandler is the Head of Investor Relations at MercadoLibre, based in Buenos Aires, Argentina. Prior to joining the company in 2015, Federico worked in private equity as a Senior Analyst at Power Infrastructure, focused on M&A and acquisition debt financing in oil services, utilities, and renewables in Argentina. He has experience in corporate finance and private equity, performing credit ratings of public utilities and integrated oil & gas corporates as well as infrastructure and project finance transactions in Argentina and Uruguay. Federico holds a bachelor’s degree fr om Bentley University in economics & finance and a master's degree in corporate finance fr om Universidad del CEMA.
1. What are your top priorities and biggest challenges?
MercadoLibre operates in a dynamic environment where timeliness to an answer can make a big difference. One of my top priorities as the IRO is centered on answering investor questions in a timely manner while also providing disclosures and financial information that is both accurate and impartial. This not only assists us in building credibility among our stakeholders and investors, but also provides the investment community the necessary tools and information to independently assess whether our company is an attractive investment or not. Complementing that, staying up to date with industry trends and the competitive environment is also paramount to us.
Additionally, it is important to me to effectively pursue and maintain an investor base that understands the secular tailwinds present in our industry and the investments and initiatives that will be necessary to capture those tailwinds over the next three to five years which will allow us to consolidate our leadership position in payments and e-commerce in Latin America.
My biggest challenge is related to the communication of strategic changes or initiatives. The key for us at MercadoLibre is having clear, timely, and straightforward answers to investor questions and being able to concisely explain the context behind the change in strategic direction. A recent example of this comes from our efforts in communicating our free shipping strategy, wh ere we focused on explaining why we did it, why we thought it created value and, most importantly, how we would measure progress against our goals. Explaining the metrics and indicators that investors should use to monitor our progress builds credibility, transparency, and a strong sense of accountability.
2. How have you seen the role and expectations of the IRO evolve in the past few years?
As we grow into a larger market cap, so grows the exposure to a greater and more sophisticated pool of investors. As a result, the role of the IRO during my tenure has gained increased relevance and exposure across the investor community. Given top management’s limited time for Investor Relations as a result of their focus on business execution, we must possess deep knowledge of the business, effectively allowing us to transmit our vision and accurately explain our operations to a growing investor base worldwide. Not only that, but having a financial orientation as well as possessing adequate communication skills are complementary skillsets that are fundamental to successfully managing the increased investor interest.
3. How can the IRO best engage the investment community?
I believe the best way to engage the investment community is by leveraging the multiple channels that are available at our disposal to maintain fluid and continuous communication. Our approach centers on selectively attending investor conferences and going on the road by doing non-deal roadshows with investment banks. Maintaining close contact with the sell-side equity research analysts that cover us is equally important in this respect.
These three items prove to be very effective levers for us to not only build a long-term knowledgeable investor base, but also to allow us to gain valuable insight, and increase coverage and exposure from both the buy- and sell-sides.
Accommodating requests for site visits and conference calls on a daily basis and performing timely shareholder outreach after earnings to our top shareholders are also key tools we utilize to engage with investors and make sure that we are delivering the right messages to the Street.
4. What is one important initiative that you’ve championed or experience that you’ve had as an IRO?
I have been with MercadoLibre for about two years now. During that time, one of the initiatives that my team has championed and closely overseen from beginning to end was the migration to a more dynamic Investor Relations CRM tool that met our increasingly sophisticated needs and objectives. Although there was a CRM tool in place before I started at the company, we have made a quantum leap in terms of how efficiently and effectively we manage, track and report our day-to-day IR operations. Not only that, but we are better prepared to produce insightful information and data for our senior team when it comes to shareholder activity, investor perception, and overall IR effectiveness.
Complementing the aforementioned initiative and with the assistance of our partners at Nasdaq, we have also entirely redesigned our IR website, making it easier for our investors to access financial and operational information about our business at the click of a button 24/7.
5. What resources do you rely on to stay up to date on the capital markets?
There are various resources that I use to stay up to date with capital markets and the industry as a whole. We are a pan-regional company operating in 18 different countries, so staying up to date requires a slightly different approach. To get an overall sense of market sentiment, breaking news, and trends, I usually rely on traditional news sources such as Bloomberg, Financial Times, The Economist, and The Wall Street Journal. When it comes to doing competitive intelligence, I rely on industry specific newsletters including Channel Advisor, Tech Crunch, and Recode. I also focus on country specific news outlets and newsletters that help me get insight into what is happening on a country- by- country basis.
As a complement to that, I increasingly rely on our Nasdaq IR Insight CRM platform, as it allows me to customize alerts to news that is relevant to MercadoLibre, such as changes in sell-side or consensus estimates, new research reports on the company and/or the competition, earnings releases, and daily updates on who is buying and selling our shares.
6. What advice do you have for the next generation of IRO?
Have a thorough understanding of the business and stay up to date with regulations and trends. I really cannot stress this enough. Understanding the company’s KPIs and how they impact the business while being aware of the regulatory and competitive landscape is essential to the success of an IRO. This is even more so in the age of information, and particularly in tech companies such as ours, wh ere the operational and competitive landscape is in a constant state of flux. I really couldn’t think of a better example to apply Peter Drucker’s quote: “You cannot manage what you don’t measure.”
Additionally, the next generation of IROs need to be able to convey difficult messages without shrinking on it. They must be ready to address difficult topics head on with a straightforward assessment of the issue, the details behind it and, most importantly, what is being done to address those issues. In line with that, making sure that the message you convey is consistent across all the audiences you are trying to address is paramount. You’ve got to have a plan, understand the implications of what you are saying, and be aware of any prior public commentaries from the company to bridge any information gaps.