Benchmark
Study ONLINE ANNUAL REPORT
2013
Table of content Message from the Research Team Introduction to IR Global Rankings Online Annual Reports | Overview What’s HOT for online annual reports What’s NOT for online annual reports Content Benchmark examples for content Design and navigability Benchmark examples for design and navigability Interactivity Benchmark examples for interactivity Technology and data handling Benchmark examples for technology and data handling Examples of excellent overall online annual reports to follow
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Message from the Research Team Dear IR Professional, It is our pleasure to present you with the IR Global Rankings Benchmark Study for Financial Disclosure, which aims to provide the key guidelines, best practices and differentials for Investor Relations worldwide.
Although it is quite complete, it is also a little bit simpler than the usual paid version. However, those who already acquired any past edition of the Benchmark Study will see that the comments are much more detailed and comprehensive.
We sincerely hope that this information will be of important use to your company and that it will help you with the ongoing task of improving your Investor Relations program.
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Online annual reports
Introduction to IR Global Rankings IR Global Rankings (“IRGR�) was created in 1999 and is the most complete ranking system that analyzes IR websites, online annual report, financial disclosure procedures and corporate governance practices. Our methodology is based on an extensive and detailed technical evaluation of over one hundred items and is conducted by a team of Investor Relations specialists and verified by an independent committee. The results are transparent and accessible to all participants of the ranking. Some companies choose to receive an individual feedback report with a detailed summary of the key findings and suggestions for improvements in all categories. The IRGR team is also available for individual conference calls with these participants, if desired.
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Envisioning the improvement of IR practices worldwide, the IRGR team has full capability of analyzing and implementing any changes desired by your company. As IR Global Rankings evaluates a large number of companies within various industries worldwide, participants may also choose to receive a best practices report with general key findings and best practices among the participating companies of each edition. IRGR ensures that winners are widely recognized through releases distributed to financial news broadcast agencies around the world. IR Global Rankings, supported by Arnold & Porter, KPMG, MZ Group and Sodali, is a unique, external review of any company’s communication process with analysts and investors. For more information, please visit our website www.irglobalrankings.com
Financial Disclosure
Corporate Governance
IR Website
Online Annual Report
Overview The Online Annual Report is part of the overall IR website evaluation process. However, due its considerable importance as a communication tool, it is also evaluated separately by IR Global Rankings. According to the ongoing technological evolution, such reports have a strong ability to convey and transmit the company’s investor message in a more energetic and engaging manner, not only bringing forward the corporate identity, but also by providing a greater feel for the company’s management team, which is critical for many investors. In other words, a good online annual report has the ability to better “sell” the company. While the printed report will continue to play an important role, many investors enjoy online annual reports for their speed and access to latest information versus printing and flipping through large amounts of text. The transition from printed
to online reporting highly depends on companies encouraging their public to use the online version, not to mention the environmentally friendly approach that can be argued in favor of the online reporting, which in the long-term can provide significant cost savings for the company. To be considered for this category, companies must have an online report in English and in HTML format and not simply a PDF file of the printed version, which is not considered for evaluation purposes. IR Global Rankings analyzes and ranks the Online Annual Report category similarly to the IR Website evaluation.
CONTENT
DESIGN AND NAVIGABILITY
INTERACTIVITY
TECHNOLOGY AND DATA HANDLING 7
Online annual reports
≥≥Including the MD&A in the online annual report file; ≥≥Providing the complete financial statements in HTML;
What's
HOT
≥≥Including information on strategy and competitive advantages;
≥≥Interactive stock price charts with option for comparisons with main peers and indexes; ≥≥Providing a search tool for results inside the Online Annual Report;
≥≥Providing a specific section on risk factors;
≥≥Financial statements with links to corresponding notes;
≥≥Providing a glossary with definitions of key financial indicators and terms;
≥≥Providing links for downloading the quarterly presentations;
≥≥Detailed biographies and the compensation of management and directors;
≥≥PDF downloads of the entire document and the various sections;
≥≥Content that downloads quickly;
≥≥Excel download option for all financial statements and operating statistics/indicators;
≥≥All content in HTML format; ≥≥Promoting interactivity;
≥≥Download center with all annual report files available for download;
≥≥Content in sections divided into sub-menus
≥≥Good combination of flash and sound; ≥≥Option to personalize displayed content.
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≥≥Not providing a link to the company’s IR website; ≥≥Using other languages in the English online annual report;
What's
NOT
≥≥Not providing information on corporate governance or social responsibility; ≥≥Financial information available only in PDF for download; ≥≥Providing information in figure format; ≥≥Dumping financial statements in a single section, since dividing topics by sub-sections facilitates search efforts; ≥≥Having a “single-flow” document without separating topics by section (i.e. users can only advance using “next page” options); ≥≥Not providing a download center;
≥ ≥Using low-resolution images that can become distorted; ≥≥Needing more than 4 clicks to find any information; ≥≥Not having a clearly structured menu with sections and sub-sections; ≥≥Links that do not work, redirect to wrong locations or take users to a page that is not in English; ≥≥Using an interactive PDF without links or tools and with weak navigability features; ≥≥Lack of interactivity by using flash formats on all pages of the report; ≥≥Heavy reports that make navigation slow; ≥≥Search tools that don’t work or show content outside of the online annual report.
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Tailored Study playing is not enough you need to analyse the best moves
IRGR will conduct an evaluation of your company’s current IR website, Online Annual Report and/or Financial Disclosure Procedures using IR Global Rankings methodology and provide detailed feedback on what should be improved in terms of content, technological tools, design, navigability and responsiveness. This report will be tailored, designed with your company to fit your specific needs. Containing specific recommendations, you can choose to compare your company with 5, 10 or 15 peers, to create a complete picture of how your company compares.
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Categories for
Online annual reports CONTENT
DESIGN AND NAVIGABILITY
INTERACTIVITY
TECHNOLOGY AND DATA HANDLING 11
Online annual reports
Content The content of the Online Annual Report must meet the same requirements for the printed version. Make sure that the level of content details provided in the online and printed versions are consistent.
≥≥Complete corporate governance information, with biographies of key board and committee members and other relevant information must also be provided.
Key Criteria Adopted by IRGR:
≥≥Similar to content on the IR Website, the Online Annual Report should also provide details on the company’s social responsibility policies and achievements as applicable to the company’s sector.
≥≥Make sure the basics such as the message to shareholders, information on the company’s industry performance, management and discussion analysis (MD&A) of the yearly results and a complete set of financial statements are available, among other items. ≥≥When possible, also provide downloadable spreadsheets (for financial statements and operating highlights, for example).
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≥≥Remember that investors will be gathering information through prolonged viewing and will only choose to print the information they may need on paper. Thus, use extensive texts only when necessary.
Benchmark Examples for Content Sub-category: Letter to Shareholder Company: Grupo Sura www.gruposuramericana.com/ en/default.aspx Differential: Provides a Letter from the President for shareholders approaching several subjects, all graphically represented.
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Online annual reports
Sub-category: MD&A Company: Nucleus Software www.nucleussoftware.com/investor.htm Differential: The website provides a complete MD&A, with content on the Company’s background and also its outlook. It also includes some information on SWOT analysis, and a complete summary of the financial information.
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Sub-category: Comments about the Industry Company: Aegon www.aegon.com/Home/Investors/ Differential: This section on industry has an interactive map, which splits each market into sections, containing the relevant information.
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Online annual reports
Sub-category: GRI - Global Reporting Initiative Company: BASF www.basf.com/group/investor-relations_en/index Differential: This section contains a wealth of information and is very easy to navigate. The tool bar down the right hand side allows you to share the page, compare it to last year, tell a friend, print or give feedback. It is extremely well-done and well organized.
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Sub-category: Risk Factors Company: Eternit eternit.riweb.com.br Differential: Risk Management section is complete, very-well organized and full of interesting information.
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Online annual reports
Sub-category: Strategy Section Company: BASF www.basf.com/group/investor-relations_en/index Differential: Sections on Strategies provides useful information to shareholders, helping them to better understand the company’s strategic decisions and key competitive advantages. BASF not only provide a colorful, interesting strategy section, but also a section which is extremely rich in information that is useful and interesting to shareholders.
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Sub-category: Glossary Company: Adecco Group annual-report.adecco.com/en Differential: The glossary is colorful and great to look at. The layout gives it a really modern, cool feel to it. It really grabs, and holds, your attention.
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Online annual reports
Sub-category: Corporate Governance Company: Adecco Group annual-report.adecco.com/en Differential: Complete Corporate Governance section providing board members’ remuneration in detail, with clear information on policies. The details on management compensation provide an important basis for assessing the company’s corporate governance and disclosure practices. Well-designed board remuneration programs are required to align the interests of shareholders and directors, attract and retain highly qualified professionals, provide appropriate compensation for their time, commitment, efforts and contributions to the corporate purpose, and meet the best standards of corporate governance. The Adecco Group discloses information such as structure, shareholders and capital structure, board of directors, executive committee and compensation, including compensation, shareholdings and loans. The section is extremely detailed and informative for investors. 20
Categories for
Online annual reports CONTENT
DESIGN AND NAVIGABILITY
INTERACTIVITY
TECHNOLOGY AND DATA HANDLING 21
Online annual reports
DESIGN AND NAVIGABILITY For the online annual report, design and navigability is a key category as visual effects and creativity can make significant differences on the report. The design of the online annual report should reflect the printed version, demonstrating the company’s image and values.
Key Criteria Adopted by IRGR: ≥≥Make sure that a useful menu bar is easily located, allowing users to navigate from one section to another. Providing interpage links to different sections of the online annual report is useful. Additionally, use descriptive links, avoiding the “click here” options.
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≥≥Poor layout can harm a good content. Think carefully about the design and accessibility the company wants to portray. ≥≥ Provide user-friendly and intuitive navigation. ≥≥Use colors that are visibly suited for long-term viewing, as well as make sure that graphs, pictures and tables are legible for computer screens. ≥≥ Users should be able to flip through pages as easily as they would in the printed version. This can be achieved through “next page” and “previous page” tabs in the navigation menu.
Benchmark Examples for DESIGN AND NAVIGABILITY Sub-category: Related Links and Notes Company: Nucleus Software www.nucleussoftware.com/investor.htm Differential: The links change color when clicked, which helps to remind the user which content has already been read.
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Online annual reports
Sub-category: Links to Notes in the Financial Statements Company: Grupo Sura www.gruposuramericana.com/en/Pages/InvestorRelations Differential: Financial Statements in HTML format – Balance sheets, Income Statement, cash flow etc. – with notes.
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Sub-category: Menu Bar Company: Garanti www.garanti.com.tr/en/our_company/investor_relations.page Differential: The Menu is all in one place (versus smaller menus spread out in different places). All the content is therefore visible at the same time.
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Online annual reports
Sub-category: Creativity Company: Fibria fibria.infoinvest.com.br/?idioma=enu Differential: The website has this superb interactive infographic of the production process, which is extremely creative and innovative.
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Categories for
Online annual reports CONTENT
DESIGN AND NAVIGABILITY
INTERACTIVITY
TECHNOLOGY AND DATA HANDLING 27
Online annual reports
INTERACTIVITY Online annual reports can give viewers a better and more dynamic understanding of the company and in order to achieve this, interactivity comes into scene.
Key Criteria Adopted by IRGR: ≥≥Links to corporate videos and most recent corporate presentations, charting tools and excel downloads all help bring the online annual report to life. ≥≥Interactive price graphs should also be considered.
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Benchmark Examples for INTERACTIVITY Sub-category: Personalize Online Annual Report Company: PotashCorp www.potashcorp.com/investors Differential: The OAR gives you the option to build your own report, choosing to download the content that you want.
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Online annual reports
Sub-category: Interactive Graphs Company: Hera eng.gruppohera.it/group/investor_relations Differential: The interactive accounts section is excellent: the user can create graphs using the information that they wish, with the option to view the data in the form of a table, graph and also choose the type of graph.
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Sub-category: Chart Generator Company: BMO Financial Group www.bmo.com Differential: The BMO chart generator allows the user to create their graph, select financial measures, select period and visualize as a table, line graph or bar chart.
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Online annual reports
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Categories for
Online annual reports CONTENT
DESIGN AND NAVIGABILITY
INTERACTIVITY
TECHNOLOGY AND DATA HANDLING 33
Online annual reports
TECHNOLOGY AND DATA HANDLING There is no reason in developing an online annual report if it cannot be viewed by the widest audience possible. Thus, the correct and most efficient use of technology must be taken into consideration.
Key Criteria Adopted by IRGR: ≥≥Check that the online annual report works in different browsers (ex: Mozilla Firefox, Internet Explorer, Mac, etc.). ≥≥Include a clear and comprehensive site map and search facility. ≥≥Provide information in HTML format as well as options to download in PDF format. ≥≥Provide additional tools such as RSS feed, XBRL, etc. when applicable.
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Benchmark Examples for TECHNOLOGY AND DATA HANDLING Sub-category: Downloads Company: Hindustan Unilever www.hul.co.in/investorrelations Differential: In this section, it is possible to download the entire financial statement segmented, both in XLS and PDF format.
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Online annual reports
Sub-category: Videos Company: FEDEX investors.fedex.com Differential: FEDEX makes great use of explanatory videos.
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Sub-category: Search Tool Company: Philips www.philips.com/about/investor/index.html Differential: Sophisticated search tool, which has an auto complete word function
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Examples of
Excellent
Overall Online annual reports
The Top 5 global scores of the 2012 edition of the IR Global Rankings for Online annual reports
1st
Global Ranking Position in 2012: Company: PHILIPS Region: Europe URL: www.philips.com/investor
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Online annual reports
The Top 5 global scores of the 2012 edition of the IR Global Rankings for Online annual reports Global Ranking Position in 2012: Company: PotashCorp Region: North America URL: www.potashcorp.com
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2nd
The Top 5 global scores of the 2012 edition of the IR Global Rankings for Online annual reports Global Ranking Position in 2012: Company: BASF Region: Europe URL: www.basf.com/share
3rd
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Online annual reports
The Top 5 global scores of the 2012 edition of the IR Global Rankings for Online annual reports Global Ranking Position in 2012: Company: Hannover Re Region: Europe URL: www.hannover-re.com
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4th
The Top 5 global scores of the 2012 edition of the IR Global Rankings for Online annual reports Global Ranking Position in 2012: Company: EVN AG Region: Europe URL: www.evn.at
5th
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