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Archives for November 2009

What Makes for Effective Investor Relations Sites? Part 8: Providing Context for Your Financial Information

Business does not happen in a vacuum, but financial statements are often presented that way. As an investor, you always have to ask yourself if the company results are being driven by the company alone, or by external factors. Of course, usually it is a combination of the two. But beyond some verbiage in the interim results press release, or a brief statement in the annual report, the average investor is often left without any broader context to judge how the company is doing. Further, because active investing is a forward-looking activity, this lack of background will mean that investors will seek their own data sets to help correlate past performance with their judgment as to future prospects. When making decisions about future investments, it’s important to know if the company you are interested in is prospering because of its managerial expertise or because it’s boom times in the industry. Because when things change, as they invariably do, you want to be with good management.

This is a serious oversight by many corporations and represents a missed opportunity to educate investors interested in their firm. Company performance can be heavily influenced by a variety of factors, whether it is interest rates, new construction starts, inflation or a particular type of commodity cost. Investors may or may not have a good handle on these influences. However, company personnel, who spend their days immersed in the details that drive their businesses, know what external factors most affect their businesses. So it makes perfect sense to direct investors to the appropriate information and to make it available on your investor site. Yet few companies do.

There may be several reasons for this. Companies may be understandably reluctant to include information from third party sources on their websites, for one. Or they may be hesitant to deviate from the “cookbook approach” when it comes to financial information. That is, if it is not required to be disclosed, then don’t deviate from the recipe by adding extra spice. Whatever the reasons, it means that investors will have to search on their own for the causal links between internal performance and external effects.

Total main indicators

To their credit, some companies do attempt to fill in the gap and point out important external factors. Total, the French energy company, does this on a page in their investor relations section titled “Main Indicators”, which I have reproduced alongside. On that page, Total sets out a chart showing the Dollar/Euro exchange rate, European Refining Margins, the cost of Brent crude per barrel, and average gas and liquids prices, all factors that are of importance to an energy producer. In creating the chart, Total enables its investors to make more informed decisions and saves them a lot of research time. In short, they have made their financial information more effective.

It is something I’d like to see a lot more companies do.

In this series:
Previous post: Financial information
Next post: Provide context

Which Web Browser Brand Identity is Superior?

The competition among Web browsers has taken some interesting turns over the past few years, with players like Mozilla’s Firefox and Google Chrome taking a chunk out of Microsoft’s Internet Explorer market share.  Additionally, Mac users have more options than ever making Safari less popular.

browser_logos


While the features and functions of these Web browsers are likely to be debated for years to come, I started to wonder which has the best brand identity.  Certainly, Internet Explorer has history on its side, but Chrome has the power of Google behind it.  Firefox is known for add-ons and has become a relationship brand more so than any of its competitors.

But what do we think of each brand’s logo?  Which do you think is best in terms of communicating the brand image?  Which is simply designed the best?

Take the poll below and leave a comment to share your opinions.  Which Web browser is getting its brand identity right, including its logo?

Beer and Comfort Foods Top Consumer Satisfaction Index

hersheysThe quarterly American Customer Satisfaction Index was released this week and the economy is clearly still having a significant effect on consumers’ feelings about products and brands.  Some of the top categories in the study are:

  • Soft drink companies with a score of 85 out of 100.
  • Beer manufacturers with a score of 84 out of 100.
  • Food companies with a score of 83 out of 100 (candy and chocolate companies ranked highest in this category).

It’s not surprising that during difficult economic times, people turn to comfort foods and brands, as well as alcohol.  These are fairly common behaviors, and food, soft drink and beer companies are likely to capitalize on those behaviors.  The question is whether or not the high satisfaction numbers will continue when the economy eventually recovers.

On the flip side, cigarette manufacturers saw a 7.7% drop in satisfaction scores from the previous year to just 72.  It’s suggested that the drop is directly related to higher taxes imposed by the U.S. government on tobacco products, and it’s unlikely those taxes are going to change anytime soon.  Truth be told, I think there are far more factors that caused the satisfaction index to drop for cigarette manufacturers, but this post is neither the time nor place to debate smoking.

Looking at these statistics one might say, “okay, Americans are fat drunks who are mad that cigarettes cost so much — not a big revelation.”  Perhaps there is some truth in that statement, but is that so wrong?

Now, if you’ll excuse me, I’m off to drink a Diet Coke and eat a candy bar.

Image: Flickr

Billerud: Corporate Message in Clear Packaging

As part of a research project into the websites of packaging companies, I came across Billerud’s corporate website.

billerud-home-page
Click image to enlarge

Billerud is smaller than many of the companies whose sites I usually study, but there are many excellent features nonetheless.

The first thing that I noticed was the copy.

The home page is a fairly typical corporate-style box-based site with teasers to lower level pages, but the main focus of the page is on a particular product, with a focus box highlighting images of the new product, and marketing-type language rather than a more corporate style…

“Think smooth, round and natural shapes.
Think striking and creative.
Think environmentally friendly and sustainable”

This is sufficiently different that it stands out from the norm, and the language used elsewhere on the site is also interesting. For example, on the Environment page, the company has chosen to explain why their industry is both important and responsible in ‘layman’ language:

The Swedish forests are expanding at a record rate. Since 1945, they have increased almost 50 per cent. At the same time, every year it has been possible to extract more and more timber from the Swedish forests. The Swedish forest industry replants more forest than it fells, and for every tree felled, 2-4 new ones are planted. We are thus not running out of wood.

And on the products pages:

Containerboard is one of the world’s most used packaging materials. It is strong, durable, lightweight, environment-friendly and cost-effective, which makes it perfect for everything from strong, stiff and impact-resistant transport packaging to smart-looking consumer packaging featuring advanced printing. It’s a fact that 90% of all consumer goods are packed in containerboard cases at some stage during transportation.

Billerud’s containerboard, both the corrugated middle layer (fluting) and the outer layer (lining), is made of 100% primary fibre. That ensures a clean and very strong paper used in the most demanding applications. When there are extra requirements for strength, purity, hygiene and good printing, Billerud’s liner and fluting make an excellent choice.

This kind of language doesn’t use jargon, will be easily understood by most visitors (12.58 on the Gunning Fog Index for all the Billerud text quoted here), explains the benefits of the product, the significance of the industry and reiterates the environmental benefits as well – an important feature for this industry. And it appears trustworthy and authentic.

Why can’t all corporate sites be written this clearly?

Now, this site is clearly multi-purpose, in that it is targeting purchasers as well as the more corporate visitor, but it isn’t just the product pages that are easy to read. A quick look at the Corporate Governance section (usually the most difficult part of a corporate site to read) shows that the links to the usual Terms of Reference documents are rephrased as ‘Work Instructions’. And in the Careers section:

Our attitude to each other and to our environment is characterised by respect, openness and reliability.

Openness, respect and innovation lie at the heart of all activities performed by Billerud. Everything we do must also be of the best quality, and that applies not only for our products but also for external contacts and the work we do internally, such as training, promoting health and safety and working for the environment.

A clear statement of the corporate expectations of their staff, with no corporate jargon. Did you notice the repeated mention of the environment? It clearly matters to this company – enough to be a significant part of their corporate messaging.

This is a multi-purpose site, so the copy has to serve as sales copy as well as corporate copy; which makes me wonder why we usually expect corporate copy to be different from sales copy. Obviously there are topics on the corporate site that have to convey numeric data, need to be conveyed in an objective manner, and which have to comply and conform to various expectations. But wouldn’t it be nicer to read a corporate site if as much as possible was written in a friendly open fashion, as this is?

I also wonder if the fact that English is the second language for the site (there are a couple of slightly odd phrasings – ‘actors in the industry’ rather than the more usual ‘players’, for example, though perhaps this is intentional) has made it easier for the writer to avoid falling into the corporate language trap.

I’ll be interested to know what you think; do you like the style of the Billerud site? Do you find it easy to read?

What Makes for Effective Investor Relations Sites? Part 7: Financial Information

The lifeblood of all good investors is financial information. It is difficult, if not impossible, to make a reasoned judgment about a company’s future prospects unless you have analyzed its past performance. For this reason, it is my opinion that effective investor web sites need easily accessible financial information. Not information that is squirreled away in the press release or the latest regulatory filing, but financial information that stands alone and, at the least, summarizes the company’s key operating numbers. There are a number of ways to approach this data and I will highlight a couple that I think are well done.

EADS Key Financial Data

First, the aerospace company EADS does a good job setting out summary financial information under the heading “Key Figures”. As you can see below, the company has extracted summary information from the income statement, balance sheet and cash flow statements and some other important data into a single page to provide investors with a quick overview. EADS also does several other interesting things on the page. They provide a link to an interactive chart generator (more about that in another post), they allow you to drill down into quarterly data for each year by clicking on the year at the head of the column, and a link on the side leads you to segment information. All in all, this is a very efficient presentation of key financial information.

ENI financial data

The Italian energy company, ENI takes this approach one step further by providing eight different sets of data for the interested investor to browse through and even provides the ability to download all the data in Excel spreadsheet format. My only objection to the information is that ENI makes it difficult to find, tucking it away in a section they label “Main Data”. But once you’re there, it’s all that a data geek investor could ask for, laid out on a single page.

In this series:
Previous post: Eye candy for stock charts
Next post: Provide context

Obama and the Revitalization of Brand USA

obama_hope_posterIn the fifth annual Country Brand Index report released by FutureBrand, where countries are ranked similarly to how retail brands are ranked, the United States took the top spot for the first time.  The index is determined using survey results from approximately 3,000 business and leisure travelers from nine countries.

According to the results of the study, the United States took the top spot in the following areas:

  • The place most people want to visit whether for the first time or again.
  • The place most people want to do business with.
  • The ideal place for shopping.
  • The ideal place to find quality products.

According to the study, the boost in sentiment toward Brand USA can be attributed largely to President Barack Obama thanks to his inclusive brand strategy, global messages and global popularity.  According to FutureBrand, it’s the ‘Obama Effect’.

The top 10 countries in the 2009 Country Brand Index are:

  1. United States
  2. Canada
  3. Australia
  4. New Zealand
  5. France
  6. Italy
  7. Japan
  8. Britain
  9. Germany
  10. Spain

Another interesting piece of information found in the report tells us that the United Arab Emirates, China, Vietnam, Croatia, South Africa, and India are poised to become major tourist destinations in the next five years.

It’s interesting to look at countries as brands, similar to retail brands.  Not only do the brand images of countries affect industries like travel, but they also affect politics and business. In fact, it could be argued that when it comes to branding, politics and business are extremely similar.

What do you think?

Image: Flickr