WEB technology offers companies the ability to transform their dense annual financial disclosure documents into valuable online resources that both current and prospective investors and analysts will gain utility from all year round.
Of course, most companies and their IR departments have all but declared annual reports dead as investor relations tools. And that’s certainly true if all you’re going to do is convert them to PDF or post them online as regulatory filings on one long web page.
The truth, however, is that online annual reports can add enormous value to companies’ IR websites if some effort is made to breathe life into them. No, we’re not talking about adding pretty pictures or snazzy videos, although I have nothing against pretty.
We’re talking about applying technology to annual reports so that they become attractive resources for serious researchers, such as analysts, sophisticated investors, and journalists. This article looks at several of the best tools to do that, drawing from the online annual reports of companies in Europe and North America.
1. Information Shopping Carts
Shopping cart technology is used in several different ways in great online annual reports. All the tools allow users to collect and store information to be retrieved or downloaded when they “check out.”
These let users gather pages while browsing an online annual report so that they can print them out at the end of their visit. Most PDF baskets work well, except where the reports themselves are poorly designed and put too much information on a page. An example of this is AstraZeneca’s annual report, where you cannot print out just the Income Statement, for example, because the entire financial section is on a single page.
A good example of the print basket in action is Philips’ annual report, where adding pages and sections to the basket requires no more than one click and there’s instant feedback to the user that their basket has been updated. The “check out” process is also well done, with users taken to a page where they can change the cart’s contents, including adding additional pages to their cart that they might have missed while browsing.
Overall, Philips’ implementation (screenshot below) is superior to how most PDF carts are handled.
These are similar to PDF baskets because they most often let you download saved pages in a PDF. However, they enable you to do more with your saved pages, such as email yourself or someone else links to the pages you’ve saved.
Kingfisher’s page saver worked well in my tests. It saved the pages I wanted and I was able to download them in a PDF file, get them in print-ready HTML, and email links to the pages to myself. Kingfisher’s report was developed by UK web development firm The Group.
These are my favorite information shopping cart tools. They enable you to collect Excel downloads, PDFs, and other formats like MP3s in a basket while browsing a report. At the end of your visit, you can download the files you’ve collected in a single zip archive.
Download managers work best when the report provides many options to download information, such as spreadsheets of tables in the financial statement footnotes and management’s discussion.
If you’re on a page that contains downloadable files such as spreadsheets or PDF files, you can click a button on the right side of the screen to add the files to the download manager. Since LLB’s report offers Excel files of all footnote tables, you have a lot of downloads to pick from.
At the end of your visit, you go to your “personal library” and download the files you want. It works well, although it would be nice to have more control over which files are added to the library. Right now, if there are several download files on a page, all are added to the library, which you can edit when you check out.
Note: Nexxar’s CEO Thomas Rosenmayr wrote a recent post for us on annual reports for the iPad and iPhone and his company is listed as an IR Web Report sponsor.
2. Personal Report Compilers
Increased disclosure requirements over the past decade have swelled the size of the average annual report. At the same time, most investors don’t have the time or inclination to wade through each and every page. The solution may be to enable visitors to create their own reports consisting of only the sections or topics they’re interested in.
Many of the best online annual reports provide PDFs of each section and present these in a list from which investors can compile a personalized PDF or zip download containing only the sections they want. This feature has been offered for many years and isn’t new.
More recently, the option to create a customized HTML report based on the themes or topics you’re interested in has come to the fore. If you’re interested in what a company has to say about risk management, for example, in one click you can get a tailored report comprised of all the pages relevant to the risk management theme.
This might include pages from the corporate governance report, management’s discussion, and the financial statement footnotes, all in one neat navigable package.
An example is Legal&General’s report, which presents the option to “create your own report” prominently on the report’s home page. Topics offered include risk management, corporate responsibility, shareholder information, facts and figures, among others. This feature saves a lot of time for people interested in specific themes.
3. Linked Notes
Creating links from line items in the financial statements to associated footnotes is a no-brainer for web-based annual reports and it’s something that has been done since the first online annual reports were developed. Linking notes and line items is a huge convenience because users don’t waste time clicking or scrolling through screens of information to find the relevant footnotes they’re interested in.
Unfortunately, many companies that provide online annual reports fail to link individual footnotes to the face of the main financials, or they implement the linking in away that is less convenient than it could be.
I have a strong personal preference for the notes to open in a new, smaller browser window rather than be taken to a new page or have the note open in an overlay that grays out the financial statement in the background.
My preference for new windows is because I like to be able to review the financial statements and several footnotes at the same time when reviewing the financials. If I have to click back and forth from the financial statements and the notes, or if I have to constantly knock down an overlay, it quickly becomes tiresome.
4. Prior Year Comparison Links
This is another time-saver for serious researchers. Say you’re interested in a particular topic in a report and you want to see what the company said about it in the previous year, this tool lets you do that in one click.
I’ve only used it a few times, but I’ve been thankful for it when I have. In one case I was able to quickly compare specific pages across three years’ reports. Without this tool, I’d have had to check each report individually and then find the respective page, not a big deal but why make investors do it if you don’t have to?
Deutsche Bank’s online annual reports offer cross links going back four years.
5. Interactive Charts
Despite what marketing-focused web developers might tell you, annual reports are all about the numbers and details. That’s why interactive charting tools are a natural fit for them, and why many of the best online annual reports have them.
A side benefit of these charting apps is that you can repurpose them on your main IR website, such as for providing a more engaging financial summary in a company overview section.
There are several excellent examples of interactive charts in online annual reports, but one of the nicest is Nexen’s. It’s big, clean, easy to use and super fast.
But then there’s this, which I consider the highlight of this entire article – the embeddable interactive charting app developed by Investis, a big corporate website developer in the UK. They’ve taken the typical interactive charts app and made it shareable, just like a YouTube video.
That’s an approach I highly recommend to any company that wants to get its story out to the market. An embeddable charting app is just the type of thing you can expect an online financial writer to use to support an article they might write about your company. Indeed, merely offering something they can embed could encourage them to write about your company.
Investis’ embeddable charting app is used in RWE AG’s online annual report. It’s also being used on RCS Media Group’s IR website, which is where I grabbed the app you see below. Roll your mouse over the app to start interacting with its many features.
6. Note Savers
These enable a user to make notes while reading the report and then email and print their notes when they’re done. This could be a useful feature for someone like an analyst, journalist or blogger who wants to grab various snippets of information from different parts of a report.
Often, however, this feature will simply frustrate users. This is because the note savers seldom work properly. Notes vanish into thin air and there’s typically an arbitrary limit of one note per page or some character limit that you’re not told about.
I tried to save three separate notes using TNT Holding B.V.’s and Heineken NV’s annual reports. In TNT’s case only one note was saved when I went to retrieve my notes. Heineken’s report saved two of the three notes. Meanwhile, Centrica’ s report let me save one note but then wouldn’t accept any more. Aviva’s didn’t work period. Each time I tried to add a note, it sent me to a page saying I had none.
While these reports look great and seem to offer many cool features, all of that is for nothing if the technology fails and wastes an important investor or analyst’s time. I think note savers have potential, but they need refinement. They need to actually work!
There you go, some of the advanced tools you’ll find in great online annual reports. There are many other features of great online annual reports that are less obvious to the casual user, such as advanced searching capabilities, detailed meta content and plain old-fashioned good online writing.
However, when it comes to bells and whistles that can truly make a difference to investors, these are the kinds you should be thinking about.