The web is the front line of investor communications for companies worldwide. What started as an addendum to the corporate web site in the last decade has taken over as the primary point of contact between investor relations departments and the investment community. The depth of information contained in top IR web sites allows different users to achieve their goals easily, whether it’s analysts devising research models, retail investors finding out how to reinvest their dividends, or institutional investors gazing into the whites of management’s eyes.
Investors and analysts visit IR web sites regularly to read the latest news and get quarterly earnings releases. Nearly 97 percent of institutional investors surveyed for Investor Relations Magazine’s Canada Research Report 2002 said they had recently visited an issuer’s web site. The IR web site is also the most popular tool used by analysts and investors looking for information on a company’s background.
What makes an IR web site stand out? The site must be easy to navigate with a depth of information that fulfills the specific needs of both user groups. ‘What distinguishes a site is your ability to get the information you want in a timely way,’ summarizes Jim Moynihan, an analyst with Merrill Lynch.
Users must be able find what they are looking for within a matter of seconds. ‘If it takes too many clicks to get something, they probably won’t come back to the site a second time,’ notes Maarika Paul, vice president of investor relations at BCE Enterprises in Canada. ‘IR web sites are different from regular sites in that people are looking to find the most relevant information as quickly as possible,’ agrees Bill Seymour, senior director of investor relations at Nokia.
Every year, Investor Relations magazine commissions independent surveys of analysts and investors to determine the best IR in eight regions: Australia, the Eurozone, Asia, the Nordic countries, Canada, the US, the UK and Latin America. Among a number of categories, survey respondents are asked to choose the best investor relations web site or the best use of the internet for investor relations in a given region. Their feedback provides important insight into what users – namely analysts and investors – want when they surf the web.
So far, all of the past year’s award-winning sites – Nokia, BCE Enterprises, Verizon Communications, Banco Itaú, AMP Limited, ARM Holdings and Taiwan Semiconductor Manufacturing Company – have achieved a careful balance between function and form. These sites are easy to navigate and they satisfy the information needs of analysts and investors. (Note: next month, the new winner of best IR web site among UK companies will be revealed at Investor Relations Magazine UK Awards 2002.)
This year’s award-winning sites share certain design conventions. For example, the corporate logo is almost always prominently placed in the left-hand corner of the opening page. The background of the investor relations site is typically white with two or three primary colors from the corporate logo used throughout to create a fluid and well-branded look. The overall effect is a clean and well-organized site with only a few special effects cluttering the screen or slowing down a user’s computer.
Most award-winning companies – typically blue chips – update and maintain their web sites internally and therefore the percentage of investor relations budgets allocated to the sites is minimal. All of these sites have links to regulatory filings such as quarterly reports. Three out of seven of the award-winning web sites come from communications companies with strong retail shareholder bases. Nokia, BCE Enterprises and Verizon Communications all have around half of their shares held by retail investors. Two of the top sites come from financial service companies – Banco Itaú and AMP Limited – with large customer bases.
The financial information posted on all these IR web sites is organized in a way that allows retail investors, analysts and portfolio manager to quickly grasp the company’s financials. Most sites give a snapshot of the company’s current fundamentals and provide links to past results so retail shareholders can analyze the stock’s performance over time.
For more sophisticated users, Verizon and AMP include searchable databases in Excel format that allow users to download current as well as past results. Other companies simply provide links to more in-depth financial information, often in PDF format, that caters to analysts’ research models.
Boosting financials
BCE Enterprises, cited for its IR web site at the Canada Awards in February, relaunched its site in July 2001. The IR department worked with Stylus Communications to revamp the graphics on the site with the goal of making it more user-friendly as well as adding some key financial information. ‘The most important thing is for people to get to things easily. Otherwise it could be very frustrating,’ notes BCE’s Paul.
The site has a crisp, almost minimalist look with its white background and green, blue and gray woven into the text and headings. When you click on the investor relations link from the corporate page, a drop-down menu displays a number of headings including share information, stock quotes, fundamentals, contacts and FAQs (frequently asked questions). ‘We really rethought how people access information,’ says Paul, who is constantly testing the site’s navigational logic.
As part of its web site revamp, BCE’s IR department redid the fundamentals page and added key financial information. Users who are not familiar with the company can now access a quick summary of BCE’s numbers including pricing, market cap, numbers of shares outstanding as well as certain financial statements and ratios.
‘We also added historical daily price information dating back to 1983, when BCE was launched,’ reports Paul, adding that BCE’s IR department was getting a lot of questions from investors doing their tax returns and requiring historical stock quotes. ‘Now that retail investors can access this information themselves, it cuts down the workload for us and our transfer agent.’
Managing information
Kevin Tarrant, executive director of investor relations for Verizon Communications, was pleased when the company won the award for best IR web site at the US Awards in March. ‘The web site is something I am very passionate about,’ he confesses. Tarrant has relaunched the site several times since he started working in IR at Bell Atlantic seven years ago.
‘Several of our revisions to the site were dictated by mergers which caused us to overhaul the content completely,’ he says. In 1997, Bell Atlantic bought Nynex and then purchased GTE three years later, changing its name to Verizon Communications. The current version of Verizon’s IR site was launched as part of the company’s rebranding process at the end of June 2000. ‘A year later we updated the site and changed the way it’s navigated,’ says Tarrant.
‘For a company the size of Verizon, it’s challenging because you have three audiences with different information needs: individual investors, employees and analysts,’ Tarrant explains. Verizon also has the challenge of being one of the most widely held stocks in the US with 2.7 mn shareholders.
Because investors came to Verizon from three different companies – GTE, Nynex and Bell Atlantic – managing the web site content is somewhat more complicated. ‘We really entered uncharted territory with our stock price history table,’ notes Tarrant. The table allows users to search historical stock prices for the three original companies going all the way back to 1983.
Streamlining the site’s content so different audiences can access pertinent information is no walk in the park. ‘Individual investors want to know about dividend history or how to enroll in Drips (dividend reinvestment plans) and analysts don’t care about that – they want the in-depth financials and quarterly reports,’ posits Tarrant. The trick with IR web sites is to layer content so users can find what they want easily, he says.
Tarrant relies on his experience in IR and feedback from users to tell him what should be added to the site. Verizon has over 7,000 subscribers to VZ mail, which the IR department uses to send out news. The sign-in process for VZ mail asks the user to identify themselves as an analyst/institutional holder, current shareholder, individual investor, employee/retiree or other. As Tarrant says, ‘This allows me to stratify the user population, and then when sending out conference call information I know who to give the dial-in number to.’
International audience
Nokia, winner of best use of the internet for IR at both the Nordic and Eurozone Awards, has an international audience to consider when adding content to its investor relations web site. US shareholders own 50 percent of Nokia’s stock and much of the balance is European-held.
The opening page of Nokia’s IR site has stock quotes from the three exchanges where the stock primarily trades – New York, Stockholm and Helsinki – and users can choose to access Nokia’s site in a variety of languages. As for the financials, ‘We have three core languages that we post results in, English, Finnish and Swedish,’ says Bill Seymour, senior director of investor relations. He adds that Nokia is currently making changes to the IR pages to make them even more country and language specific.
Seymour, who is based in Texas, works with his IR colleagues in Finland to manage the company’s IR site. ‘We have tried to create a one-stop shop with the web site so that users can go online and get all the information they need,’ he says.
Recent additions to the site include an interactive stock charting tool and an investor packet. The stock charting tool allows users to calculate their share yield by selecting an exchange, the amount and date of their investment, and whether they reinvested their dividend. The downloadable investor packet includes investor-related reports like financials, press releases, presentations and newsletters.
As an international company traded on three exchanges, Nokia’s financials can be complicated for some users to grasp. Nokia’s IR team addresses that issue in the FAQs portion of the site by answering basic questions regarding the company’s accounting procedures, including what standards the company adheres to and its official accounting currency.
Easy access
AMP Limited was the Australian winner for best use of the internet for IR last September. Its online ‘shareholder center’ is well laid-out and informative – exactly what you would expect from a global financial services company. The opening page even has a picture of CEO Paul Batchelor looking friendly and approachable. This site contains all the basics in an easily digestible format.
The shareholder center was recently redesigned as part of a larger corporate web site overhaul. The IR section gets in excess of 80,000 page views a month, reports Scott Young, AMP’s IR web administrator. ‘A lot of our shareholders rely on the site to gain quick access to our releases and we see the page views increase markedly when news is released,’ he says.
In developing content for the site, Young and his IR colleagues were conscious of the information needs of different users. ‘A number of AMP’s individual investors received shares through our demutualization and we wanted to provide them with easy-to-follow instructions on initiating changes to their shareholdings as well as answer some housekeeping questions,’ says Young. ‘We also wanted to help them learn about the company.’
The opening page of AMP’s shareholder center has all the trappings of a live investor presentation. Users are offered a number of interactive options including a video tour of AMP in Windows Media Player format. As Young explains, ‘We decided to post the video to provide a quick overview of the company in a format that was more interesting than simple lines of text.’ For institutional investors and analysts, AMP posts in-depth information and special tools to help them understand the company’s accounts. ‘We provide a vast range of financial information including more details on our businesses to help educate investors on our accounting practices, the regulatory environment we operate in, and our strategy,’ says Young.
Cordially invited
Taiwan Semiconductor Manufacturing Company posts all its numbers, balance sheets and important developments on its IR web site. The winner of best use of the internet for IR at the Investor Relations Magazine Asia Awards 2001 has a cordial and hospitable web site. The IR page includes detailed financial data, links to press releases, annual reports and presentation materials, shareholder services, historical data and FAQs.
TSMC’s IR team recently added an investor newsletter to the site along with monthly sales reports, dividend history and contact information for the analysts who cover the company, says Harvey Chang, senior vice president and chief financial officer at TSMC.
The financial information section of the site includes links to monthly sales reports and quarterly reports dating back to 1997. Along with quarterly reports, users can view PDF files of quarterly income statements, cash flows, balance sheet statements, and institutional investor conference presentation materials from the last two years.
Access is key
The content of IR web sites has become universalized in the sense that most companies now include stock quotes, financials, annual and quarterly reports, regulatory filings, news and shareholder information. In other words, the headers and footers may be different but the content is generally the same.
‘Most large companies do a good job of posting information on their IR sites,’ notes Jim Moynihan at Merrill Lynch. What clearly distinguishes IR web sites is the way that information is managed and presented so the user can access data quickly and easily.
The key to designing an exceptional IR web site is to ‘put yourself in the mind of the user,’ says Seymour. One of the ways to do that is to conduct perception studies with different users to see how they navigate the site and what they use it for. As Tarrant advises, ‘You really begin by understanding the informational needs of your investors.’
Best of the web
| Australia Winner:
Highly commended: |
AMP Limited www.ampgroup.com Telstra Corporation |
| Eurozone Winner:
Highly commended: |
Nokia www.nokia.com Deutsche Bank |
| Asia Winner:
Honorable Mentions: |
TSMC www.tsmc.com PCCW |
| Nordic Winner:
Highly commended: |
Nokia www.nokia.com Novo Nordisk |
| Canada Winner:
Honorable mentions: |
BCE Enterprises www.bce.ca Bombardier |
| US Winner:
Honorable mentions: |
Verizon Communications www.investor.verizon.com EMC Corporation |
| Latin America Winner:
Honorable mentions: |
Banco Itaú www.itau.com CEMEX |
| UK Winner:
Honorable mentions: |
ARM Holdings www.arm.com Imperial Chemical Industries |
