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What Makes for Effective Investor Relations Sites? Part 13: Make Your Site More Mobile Friendly

It is a cliché, but like all clichés, there is a grain of truth to the saying “We live in an increasingly mobile society”. I know it is true for me. I seldom use a landline telephone any more, my email comes over my iPhone and my children never write me letters – it’s always a text or an email, sent from a coffee shop or the back seat of a car. Even my dictionary is contained in an app on my iPhone. Yet when it comes to investor relations web sites, many companies expect shareholders to be seated in front of a desktop computer with a broadband connection. Yes, I can get to corporate investor sites on my phone, but waiting for an image rich page to download on my mobile is like watching paint dry – and I’m much more patient than my twenty-something children.

Aviva Stay In Touch Page
Click to enlarge

This is all by way of saying that more companies should pay attention to methods for delivering their message to mobile devices quickly and easily. I have seen more of this type of accessibility on web sites of European companies than for American companies. I’m not quite sure why this should be other than a general observation that Europeans seem to have been quicker to adapt many types of mobile phone technologies.

The insurance company Aviva does a good job of this. As you can see from the screen shot of their Stay in Touch page, you can access news feeds and email updates. Further, they make available a mobile site, which is devoid of graphics and therefore loads quickly. And they put all of this on a single page. It is a very efficient design that quickly allows shareholders to decide how they wish to receive information when not seated at their desk.

In this series:
Previous post: Debt information
Next post: Individual investors

What Makes for Effective Investor Relations Sites? Part 9: More on Providing Context for Your Financial Information

The job of a financial analyst is often described as one of assembling a mosaic of information into good investment ideas. Therefore it is often surprising that companies do not do more to help investors find the appropriate pieces of information. Too often the company’s position seems to be, “This is what we are required to disclose. You figure it out from here.” Yet this misses a significant opportunity to help frame your company in the larger context of its industry, markets, trends and external factors affecting performance

In my last post in this series, I pointed out how Total, the French energy company, displays data on external factors such as the dollar/euro exchange rate and the price of Brent crude oil. Today’s example, BT, the telecom company, takes a different tack. As a big, complicated company in a highly regulated industry, what BT does is pull together relevant links to information for investors both from the company’s web site, and from external providers. Of particular interest on their page are the links to Industry Bodies and News and Research, both shown on the bottom of the screen shot below.

BT

By providing links to external information providers, BT is helping to point investors to where relevant information may be found, either about the industry, relevant trade associations, research companies and outside experts. (I’m a bit surprised that I didn’t see a bit of legal boilerplate here disclaiming responsibility for the content of outside sites linked to the BT site, but that may be an abundance of caution on my part.) Even professional investors, when they pick up coverage of a new company or industry, spend a considerable amount of time trying to figure out appropriate sources and benchmarks. so pointing them to good sources is quite helpful. More companies should do this.

In this series:
Previous post: Provide context
Next post: Graphs

What Makes for Effective Investor Relations Sites? Part 10: A Graph is Worth a Thousand Data Points

At the heart of understanding a company is the ability to parse the financial statements, which are chock full of great information. However, one of the problems with the financial statements is that the information is scattered among the income statement, the balance sheet and the cash flow statement. A further problem with the financial statements is that they are often considered as stand alone documents, with very little interaction of the information between the income statement, balance sheet and cash flow statements. A final issue of the financials is that they are data-dense, and don’t easily give a clear picture of inter-relationships of the data and the evolving picture over time.

This is where graphs come in. Properly constructed graphs can show not only what has been happening over time, but also how various components relate and interact. So it is surprising that so few companies have web sites that help investors construct graphs from the financial data. I’m not quite sure of the reason for this. It could be that companies figure that professional investors with expensive subscription services to data have the ability to do this on their own, or it could be that they simply haven’t thought about it. In either case, I believe they are missing a great opportunity.

EADS_1smClick image to expand

By making graphing capabilities easily accessible to web site visitors, companies can make life considerably easier for investors and highlight areas that they consider important. For example, EADS, the defense contractor, creates a section on their web site entitled “Key Figures”, a screenshot of which is on the right. As you can see, the page contains plenty of data, but unless you are prepared to do a bit of analysis, either with a calculator or by reentering the data into a spreadsheet, it’s tough to get a clear picture of what is going on.

EADS_2sm

Fortunately, EADS has a function on the page called “Interactive Chart Generator” which helps. If you go to the chart generator, you can quickly construct graphs such as the one here, showing the relationship between EBIT and R&D in order to see if EADS continually reinvests for the future or whether they cut back in the tough years.

Another favorite of professional investors is to look at free cash flow generation as a double check on net income. I was able to construct the graph below with about six clicks of my computer mouse.

EADS_3smClick image to enlarge

All things considered, the Interactive Chart Generator is a very effective tool to help your investors quickly understand some of the key trends in your financial information.

In this series:
Previous post: Provide context
Next post: Interim results

What Makes for Effective Investor Relations Sites? Part 12: Remember the Debt Side of the Balance Sheet

Most company investor relations web sites are entirely equity oriented and ignore the company’s debt. I’m not quite sure why this is, as many companies have a significant part of their funding that is derived from the credit markets. Perhaps it comes from the fact that most corporate debt is held by institutional investors who have access to proprietary trading screens, or perhaps it derives from the fact that the banking and treasury department is often separate from investor relations, but you can look long and hard before you find much information on most companies’ web sites that relates to their debt.

ENI-debt-page
Click to enlarge

By failing to more publicly disclose this aspect of their financial structure companies are doing a disservice, certainly to retail holders of their bonds, but also to holders of their equity. Debt burden, that is, the total amount of debt your company has, is important information. As is your debt maturity schedule, which will tell investors when your debt comes due, cash flow requirements and how much immediate refunding risk you may have. Rating agency debt ratings are handy shorthand guides to a company’s overall credit quality and also merit attention. In short, there are many important items of information regarding a company’s debt that go into an investment decision, regardless of whether an investor is a debt or equity holder.  Usually this information is spread out between the balance sheet, cash flow statement and regulatory filings, or sometimes, in the case of Debt Ratings, not disclosed by the company at all. It doesn’t make sense for a company to force investors to hunt for the information when the company has it readily at hand. Therefore, a well thought out section informing investors of a company’s debt profile should be included in effective investor relations web sites.

One company that does a pretty good job with their debt information is ENI, the Italian energy company. The screen shot that I have included shows a main debt page discussing their debt policy and overall debt levels. Other pages, which can be seen listed on the left of the page, debt rating, maturity (and currency) profile and the schedule of maturing debt.  More companies should do this.

In this series:
Previous post: Interim financials
Next post: Mobile access

What Makes for Effective Investor Relations Sites? Part 14: Engaging the Individual Investor

One of the Holy Grails for many investor relations departments is to achieve more ownership of their company’s stock by individuals. There are various and sundry reasons for this, including the fact that individual investors tend to keep their stock holdings for longer periods, become proponents of the company’s brands and advocates for the companies they own. One of the problems companies have is getting information to individual investors. They are dispersed and prefer their information in plain English as opposed to the dense technical prose and financial data most companies tend to use when delivering financial information. This makes getting information to individual investors expensive and requires extra effort, which usually means it doesn’t get done.

At least one of these obstacles can be overcome with the judicious use of an investor relations web site. Shareholder newsletters are a great way to reach out to individual investors, but in the past have been expensive to produce and distribute. The web and some publishing software now mean that almost any investor relations department can produce a shareholder’s newsletter at minimal cost. Time and effort still have to be devoted to writing and editing the newsletter, but you no longer have to write big checks to printers, designers and postal authorities.

Below, I’ve included samples from Total, the French energy company and EADS, the European aerospace company. The two companies take differing approaches with their newsletters, with Total focusing more on descriptions of the company and its employees while EADS spends more space discussing financial results, but the point is that they are both geared towards non-technical investors. They both help individual investors understand the companies.

EADS Shareholder LetterTotal Shareholder Letter

Both of these newsletters have the look of being professionally produced, but companies with smaller IR budgets than either Total or EADS can also produce good looking newsletters and distribute them via the web and email at minimal cost. The reward should then be a more stable and diverse investor base that supports your company.

In this series:
Previous post: Mobile access
Next post: Blogs

What Makes for Effective Investor Relations Sites? Part 15: Blogs

For the most part, corporate investor relations sites have stayed away from social media in all of its forms. There are a variety of reasons for this, ranging from overly protective attorneys to lack of resources, but at the very least I think that blogs should be considered as a way to make your IR site more effective and interesting. Twitter might be an application too far, but a blog is very much something that can be useful in telling the company’s story in plain English.

There are very few companies that have investor relations blogs. In fact, I know of only one: Dell. They use it for a variety of purposes, ranging from interviews to discussion of business lines and telling people what the IR department is up to. I’ve included a screenshot below.

Dell IR blog

When you think of the number of repetitive questions a typical investor relations officer answers in the course of a year, it would make sense for IR departments to write out the answers and post them on the blog. That way, rather than answering the same question for the thirtieth time while going brain dead, an investor relations officer can point people to the blog for the complete answer. Further, if you take the time to sit down and write out your answer, everyone will get the same information. My experience in this area is that in new situations, the quality of the answer an investor gets is principally the function of two factors: When they ask the question and the completeness of the questions they ask. If an analyst is too early in the question queue, many times the answer has not been fully formulated by the IR practitioner and valuable information may be left out. Secondly, if the analyst is not an astute enough questioner, valuable information may also be left out as many IR officers only answer the questions asked, figuring that it is not their job to school the analyst. The result is an inconsistent spread of information. The act of writing out the answer forces a more complete answer to be formulated.

Over the course of many years the amount of plain English text investors receive about their investments has steadily declined. In the U. S., most annual reports today are what are known as 10-K wraps, with no more than 12 pages of free form textual discussion about the company. Shareholder newsletters are few and far between and quarterly reports have disappeared entirely. Why not use the relatively costless printing press of the web to deliver more information about your company in a reader friendly format such as a blog?

In this series:
Previous post: Engaging the Individual Investor
Next post: Visibility