IR Impact recently featured an interview with Roche CFO Alan Hippe, alongside an article highlighting the qualities and capabilities he looks for in a Head of Investor Relations. You can access both articles using the links below.
The pieces are part of IR Impact’s broader collection of CFO interviews, all of which are available through a free account on the IR Impact website.
The CFO: ‘The pipeline drives value; I rarely get questions on cash flow,’ says Roche finance chief Dr Alan Hippe
The pharmaceutical company’s CFO on an unconventional path to the C-suite, what it means when investors trust you can generate enough cash and why corporate purpose is part of the fabric of Roche
When you’re the CFO of a 261.6bn Swiss franc ($333.5 bn) market cap pharmaceutical giant like Roche, you don’t necessarily have to be ‘the roadshow guy’.
Instead, Dr Alan Hippe tells IR Impact that what he loves about the IR work he does are conferences – which are ‘super efficient’ – and investor one-on-ones, which allow you to make a real difference in investor opinion.
IR Impact’s latest installment of The CFO series, Hippe talks about what he looks for from his head of IR – having worked with the likes of Dr Karl Mahler and Dr Bruno Eschli, who has led the firm’s IR efforts for more than four years – as well as his own role in the function and why his work at Roche has made his mom proud.
How would you sum up your approach to IR?
I’m heavily involved in IR. I think investors want to see that senior management is really driving the business and that we are hands-on in what we do. Investors get a lot of information from the sources and the material that we provide from IR and communications, so when it comes to senior management, it’s really about the last nitty-gritty pieces. They want to see us and understand how we lead the company and what our priorities are.
For me, investor relations was key from the beginning. Even back at Fraport [which he helped take public in 2001], I did the roadshow. Telling your company story for the first time is so interesting: why people should invest now, where governance fits into it, how management is looking at the fundamentals, at resource allocation, what the longer-term picture is and where the synergies are in a transaction. All this makes any business far more fascinating than it might seem at first.
At Roche, no one expects me to explain the pipeline and the science in detail. I can explain the pipeline rather well though and I take pride in being able to deliver this in a way that is different to some of our peers. But I’m not a scientist and I never will be. What people do expect is that I have an opinion on a particular mode of action.
It’s interesting, but I rarely get questions on cash flow. In other industries, people challenge you on cash flow, because cash is so key for the valuation and the development of the company – cash is basically determining your strategic flexibility. In our case, people evidently trust that we can generate enough cash. In our industry, the pipeline is really what drives value. For us, financial results are the short term and the pipeline is the long term – you have to bring these two things to the table.
The language of the Street and the lab: What the CFO of Roche looks for from his head of IR
IR alumni from Roche – the 130-year-old Swiss pharmaceutical – include Dr Karl Mahler, Thomas Kudsk Larsen, Nina Goworek and Dr Gerard Tobin. Dr Bruno Eschli, the company’s IR lead for more than four years, delivers an impressive mix of capital markets and science – including an immunology PhD in the lab of Nobel laureate Rolf Zinkernagel and Hans Hengartner.
Given this impressive list – and the many more high-IR achievers to come out of the Basel-headquartered firm, what does CFO Dr Alan Hippe look for from his head of IR? As Hippe explains in his profile for The CFO series with IR Impact, Mahler and Eschli bring different personalities to the role – while also sharing key attributes that Hippe has come to appreciate over his 15 years with Roche and many more in other prominent CFO seats.
We run down some of the attributes Hippe looks for in a Roche head of IR.
Expertise: In pharmaceuticals and in diagnostics, it’s key that you understand the science, the pipeline and the products. This is a super complex business that is very much driven by the science. A lot of our investors are MDs and medical PhDs – so it’s crucial that you speak both the language of the Street and the lab.
Bringing that together starts with understanding the science. Bruno is a scientist, with a PhD, but he also worked in capital markets as an analyst. He brings both worlds together, which I do feel is required.