Online financial reporting

Trends, reader benefits, and cost efficient production

Agenda

The reader

The brand

To reach out

Efficiency

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The reader

A diversified target group

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Annual Report

2008

Professional readersNon-professional readers

EmployeesSociety Small

shareholders

Vendors

Partners

Customers Journalists Government Large shareholders,

Institutional

investors

Analytics

The reader

… leads to a complicated product

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Is this the best format for efficient communication?

Legal document

Annual Report

1970

+ Company-

presentation

ÅR

1980

Annual Report

1980

+ Environment, CSR,

sustainability

ÅR

1980ÅR

1985

Annual Report

1990

+ Legal requirements

by IFRS

ÅR

1980ÅR

1985ÅR

1990

Annual Report

2003

+ Corporate

governance

ÅR

1980ÅR

1985ÅR

1990ÅR

2000

Annual Report

2005

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15 24

4856

60

7680

85

98

114122

138

158

178

0

50

100

150

200

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

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Number of pages

IFRS

Environmental

reporting

CSR

Corporate

governance

The reader

Example: Electrolux 1950-2008

The reader

Satisfy the needs of the target groups!

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What is the

dividend?

I want to

learn more

about x

I want

even more

about x

Financials for

your vendor?

I just need

an overview!

What is the

board’s

payment?

I don’t

believe

in this!

I want a

printed

version!

Use the search

function!

Click for more

information!

Click to this specialised

external web site

Click to their web

site!

Watch the CEO

movie instead!

Use the search

function!

Third party confirms

this, click here!

The web format holds a lot of information without compromising the overview

There is a

printed version!

EmployeesSociety

Small

shareholders

Vendors

Partners Customers Journalists Government

Large shareholders,

Institutional

investors Analytics

The reader

The traditional way of thinking We think in terms of ”cover”, ”double spreads”, and the

CEO’s letter to shareholders

We understand structures based on the dimensions of a

paper sheets, and the print process.

We are not as comfortable with the

online-medium

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None of us is ”web native”

But the ones after us are…

0%

10%

20%

30%

40%

50%

60%

70%

80%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Precentage of Swedes 9 – 79 years old using

the Internet an avarge day

(mediebarometern, Nordicom)

The broadband explosion

in Sweden in 2006

Agenda

The reader

The brand

To reach out

Efficiency

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The brand

You are judged by your web presence The web is the company’s first point of contact with

stakeholders (whether you like it or not)

It hosts a vital part of your brand-building

For market communication,

this is common practise

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Why shouldn’t this be the case for the

financial communication as well?

Do you use any of the following sources when searching

for financial information about listed companies?

(H&H Webranking 2007)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Domestic news papers

Financial databases

Analysis from brokers

Bloomberg terminal

Website of current

company

The web dominates the

capital market

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0%

10%

20%

30%

40%

50%

60%

70%

FTSE100 FTSE250

2007

2008

+48%

+67%

The brand

Number of companies with online reports

The brand

Development of digital annual reports

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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PDF

Image based

HTML

Usability

AR on CD Rom

Distribution via Internet

Indexed PDF files

Increased functionality of

Acrobat reader

Google Docs now

supports PDF formatModerate improvements

of HTML reports

Increased Internet

penetration rate and new

technologies (XBRL, video)

Increased reach with social media

The brand

Brand building by multimedia

Video offers story-telling with a personal touch

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The brand

Increased understanding by interactivity

Detect trends in a complex 10-year overview

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The brand

External sources for depth and accountability

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Wikipedia provides pedagogical, independent information about

the new technology 4G

External linking to independent research centers for drill down

analysis with high accountability

teliasonera.se gives information

about the current directors

Comparisons with earlier annual

reports is easy

Agenda

The reader

The brand

To reach out

Efficiency

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To reach out

The web was invented to share information An annual report online does not need to be ordered. It is always accessible.

It is published simultaneously to all stakeholders.

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To reach out

Reach a broader audience with online media

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Printed reportReaders of a printed report

• Shareholders is the ”traditional” target group

• The number of readers is limited by the size of

the circulation of copies.

Online report Readers of an online report

• Shareholders + potential shareholders, other

stakeholders on multiple markets

• Distribution is free of charge

Annual Report

2008

Agenda

The reader

The brand

To reach out

Efficiency

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Production tools

1. Microsoft Word

Editable by the client

Track-changes function

2. H&H AR 2.0 Platform

Access to the Word documents via

a project web site

File version management

Output

1. Online report

Content and structure is controlled

automatically by the Word

documents

2. Print-ready PDF

The Word documents are

converted to PDF: No additional

desktop-publishing tools is needed

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Efficiency

Proven platform and process according to a traditional annual report project

Designed ”the right way”

Expertise in financial communication

Extensive experience in AR usage

Many web specialists

Production advantages

Ready-made and tested decreases risk

Cost effective

Improved each season

Based on statistical analysis, surveys, and innovation

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Efficiency

AR 2.0, ready-made and proven functions

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Column layout with horizontal scrolling

for improved readability. Can also be

supplemented with a screen reader.

Enlargeable charts, down-

loadable to Excel or high-

resolution

Notes opens in popup

windows, directly accessible

from the main tables

Expandable table rows for

drill down analysis, and

downloadable to Excel.

Efficiency

Examples of ready-made functions

Efficiency

Detect potential improvements for next year

Statistical analysis for content improvement

How many readers? Which countries and companies are they from?

Which chapters are most interesting? What should we improve for

next year?

Is the CEO movie too long?

What do Google visitors search for?

Statistical analysis for improvement in structure and function

H&H compiles statistics for all AR 2.0 productions to continously

improve and develop the standard functions.

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Efficiency

Content re-use in a new dimension Re-use subsequent years

Templates, functions, etc, is only developed once

Re-use on the corporate website

The content is created for the web medium from the start, and can

therefore easily be transferred to the corporate website

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Annual Report

2009

Corporate website

… … …

Efficiency

Shared content, example

No need of parallell web projects = better economy

Decreased risk of mixed messages = better communication

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Corporate website

Description of the year

The year in brief

CEO statement

Financial tables

Auditors’ report

Report of the directors

News flow

Press releases

Other news

Calendar events

Vacancies

Report archive

Company description

The company in brief

Vision, strategies

The share

Operations

Organization

Corporate

Governance

Image bank

CSR,

Contact info / sales offices

Employees

Financial tables

Definitions

Annual report

Summary The reader

AR 2.0 gives new opportunities to meet the needs of different target groups.

The readers of tomorrow will prefer the web medium

The brand

You are judged by your web presence, whether you like it or not

AR 2.0 enhances the understanding of your company by pedagogical functions and hyperlinking to deeper sources.

To reach out

The web medium is superior as a distribution channel

Online media reaches new areas of the capital market and potential shareholders

Efficiency

The AR 2.0 process is designed according to the traditional AR process

AR 2.0 provides proven functionality that are improved continuously

Statistics provides exact feedback for optimal improvements

Synchronizing AR Web gives better communication to a lower cost

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