Annica Strahner joins the Swedish PR-firm Springtime

When I started Sculptor IR two years ago, I mainly focused on tailored perception studies. After about six months I recognised a growing interest in how to use social media to reach out to investors. I then started to map Scandinavian companies presence and activity in those channels from an IR and Corporate Communications perspective.

During 2010, the overall consensus of social media among Scandinavian IROs has slowly shifted from fear to curiosity in how to use these channels to communicate their investment case.

As a result of this growing interest in IR and social media I will as of today, May 2nd, take up a new position as senior consultant at the Swedish PR and IR firm Springtime.

I have been recruited to one of the most competent and largest IR-teams in Scandinavia. Springtime also has great technical knowledge about social media; a perfect match for me as I will continue to focus on how IR professionals can use new media for investor relations. I will also help Springtime develop their offer in this area i.e. identifying both opportunities as well as challenges when reaching out to investors in a changing financial landscape.

Springtime started their IR-team just a year ago and has during these months received more than 20 Swedish companies as clients. During next week, Springtime is expected to become a member of AMO Global – the leading global network of strategic and financial communications consultancies.

Starting up Sculptor IR in the midst of the financial crisis has been a great experience. I have been given the opportunity to work with some of the largest Scandinavian companies. I am also humbled by the international recognition my blog Sculptor IR has received.  I have also been given the opportunity to be a contributor to IR Web Report and a monthly columnist at CFO World, commitments I look forward to continue with.

I would like to thank all clients, cooperation partners, blog readers and twitter friends for two amazing years!

I hope that you will continue to follow my reports on the development of Scandinavian companies use of social media and investor relations on my new blog IR Insights and on Twitter @AnnicaStrahner

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NASDAQ OMX Nordic surveillance head discusses social media

The following post is a 1:1 duplicate that I originally wrote for IR Web Report:

COMPLIANCE risk is the most common reason given by IR professionals in Scandinavia to explain why they do not use social media for investor relations, and various discussions and events that have tackled the topic haven’t helped to give them more comfort.Annika von Haartman

To further explore the compliance risks of using social media in IR, I met up with Annika von Haartman,Head of Surveillance at NASDAQ OMX Nordic, to discuss her views on social media and the possibilities as well as challenges for IR professionals. The surveillance function monitors 800 listed companies in Sweden, Denmark, Finland, Iceland and the Baltics.

Blogs and chat rooms screened on a regular basis

Printed media and press releases are still the primary channels for surveillance and are screened on a regular basis. If the committee does not find any information in these channels that explain share price development, they screen new media channels:

“We consider blogs as established information sources, we also screen investor chat rooms as Avanza and Nordnet on a regular basis. Quite often we discover rumors and leaks in these chat rooms,” says Haartman.

Social media platforms such as Twitter, Facebook and YouTube are screened on a more ad hoc basis, only if content from an article or blog prompt Surveillance to review those channels.

Companies still obliged to use news wire services

The current disclosure rules require that companies have a website to publish press releases and financial results on them. But the rules do not consider the website to be a recognized distribution channel. According to Haartman, this is because company websites cannot ensure the market has simultaneous access to price sensitive information:

”The website is a great platform for providing an overview of news and financial information, but since timing is crucial for investors and they can’t follow each company individually, a news release still must be distributed via a news wire service before it’s published on the website to meet the disclosure rules,” she says.

Scandinavian regulators have no plans to adopt US Securities and Exchange Commission (SEC) guidance on web disclosures (no news wire service needed if the company’s IR site is a recognized information channel) in the near future. Although, Haartman agree that it is a very practical solution, especially considering that Scandinavia has some of the highest rates of Internet adoption in the world (85 %). She is also convinced that companies’ investor websites will become an even more essential communications platform for the market:

“As social media and news wire services provides a very fragmented flow of information, that only covers bits and pieces of a company’s investment story, the company’s website will become more important, giving investors a more in-depth view of financials as well as strategy,” she says.

Presence in social media a must to reach the next generation of investors

That online presence in social media will be required in future regulations is quite unlikely. But Haartman points out that it is very plausible that clients and other stakeholders will expect companies to interact in social media. She clearly sees opportunities with the new media platforms as Twitter and blogs, but when communicating financial disclosures, companies still must do that the traditional way i.e. by press releases distributed by PR wires.

“Companies using social media communicate that they are proactive, modern and adaptable to new technologies,” she says. “As social media is spontaneous it also gives companies the opportunity to be more personal and less conservative in their communication.”

Companies must also be aware of the fact that their analysts and investors are screening online sources for any complementary information they can find. The financial community’s hunt for information and activity in social media will escalate, according to Haartman:

“We can already see how teenagers of today do not read traditional printed media, and are less frequent users of e-mail. They are communicating in social media and if your company wants to reach the next generation of investors, your must expand your online footprint to those platforms.”

Tweet and blog but set guidelines and strategies

The greatest compliance risk is if your company still thinks social media is a fad and does not monitor what is said about you or how personnel use Twitter and Facebook.

Says Haartman: “It makes sense to set up a strategy that either states that your company is active in new media, or not. As social media blur the limit between the private and the professional life, you have to explain to your employees that as a listed company your social media policy will be rather strict.”

According to Haartman it is ok for a listed company to send “live-tweets” from an ongoing webcast or Capital Markets Day, as long as they do not contain any new price sensitive information that has not already been published in a release. She also gives a green light to corporate blogs, as they can be very useful for analysts and investors, providing greater context and helping them understand your business. There is no problem to blog about your latest quarterly results, but a wrap-up from a global industry conference could be considered as a forward looking statement.

“I understand that a CEO wants to have a more personal approach in a blog, but as a public company you must be very cautious,” she says. “The challenge is to balance spontaneity and interaction with disclosure rules and a strict social media strategy. Companies that only tweet press releases are quite boring to follow.”

I’m pleased that Haartman encourages listed companies to engage in social media, even if the disclosure rules mean that the communication has to be more controlled and less impulsive. And the greatest compliance risk is ignorance and lack of control, not engagement and a proactive social media strategy.

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Nordic firms embracing web optimized annual reports

The following post is a 1:1 duplicate that I originally wrote for IR Web Report:

DESPITE having some of the highest rates of Internet use in the world, Nordic public companies still spend a huge proportion of their investor relations budgets on printed annual reports — even though there is growing evidence that investors seldom read them.

Now, a few pioneering firms are boldly blazing a new trail by focusing their efforts on producing high-end online reports that combine stunning visuals and video with advanced usability features that make it easier for professionals to dig into and analyze their comprehensive financial disclosures.

As I reported last year, Nordic IROs spend 85 % oftheirIRbudgets producing and printing their annual reports each year, even though there is little evidence that investors are actually using them. According to aCACheuvreuxEuropeanCorporateSurvey 2010, only one-third of 370 investors in Europe and the US read annual reports in detail, while another third just give them a quick glance. These facts have also been confirmed in several of Sculptor IR’s perception studies.

Spending huge sums to produce, print and distribute a paper annual report to a target group that doesn’t use it seems to be a bad investment and ineffective use of a company’s investor relations budget. This is especially true considering that the region has some of the highest rates of Internet adoption in the world. According to stats compiled byInternetWorldStats, Internet penetration rates are consistently above 85% in the region with highs of 92.5% for Sweden and 95% in Norway.

Yet, despite the obvious readiness of the market to move to web reporting and the huge opportunities to cut costs and inefficiencies, Nordic companies have been surprisingly slow to adopt the web as their primary annual reporting channel, or to provide online annual reports that are more than a PDF version of the printed report.

That’s why it is so reassuring to see the latest online annual reports from Danish biotech company Novozymes and Finnish engineering firm Wärtsilä, and to have an opportunity to get their first-hand insights into their practices. These two companies have successfully combined strong corporate messaging through the use of striking visuals and video with detailed disclosure in highly usable formats that will please even the most jaded financial analysts.

At Wärtsilä, bold design with highly usable financials

Finland based Wärtsilä, which won the European Excellence Award 2010 for their first online report last year, is back this year with an even better offering. In their2010 report, the company makes an immediate powerful impact with a bold, full-screen Flash introduction that gives a brief overview of the company’s values and growth drivers. Flash introductions seldom work and often get in the way of people accomplishing their tasks, but Wärtsilä cleverly only shows the introduction on the user’s first visit, after which they are taken to a static homepage.

Video also features prominently thoughout the report. It is used to complement theMessagetoShareholders, in theBusinessreview, and theSustainablitysection. There is also an image gallery calledWärtsiläinPictures. Overall, the heavy use of eye-candy makes a strong statement about the company.
Wärtsilä_FLASH_IR WEB REPORT

However, it’s not all about image and branding. The report’s financial section has also been given the care and attention it deserves. Wärtsilä enhanced the format by improving the usability of the financial section, giving analysts easy access to notes and the opportunity to download figures to Excel, including individual spreadsheets of each note.

TheFinancialTargets page is another highlight, reporting on the company’s performance against its prior-year goals and providing fresh targets for the year ahead. It is illustrated by bar graphs that give context for the company’s performance on the target measures over time.

Completing the picture, Wärtsilä’s annual report is also available as aniPadapp, a format that seems to please investors, with one noting: “Certainly one of the best corporate publications for investors I have seen so far.”

Wärtsilä_NOTES_IR WEB REPORTFinancial statement notes can be easily navigated and download in spreadsheets.

At Novozymes, mixing video, interactive graphs and solid financials

Novozymes, a Danish biotech company, launched their first integrated onlineAnnualReportin 2007. They have since then constantly developed the concept by adding video introductions and management interviews.

The management interviews in theNovozymesReport 2010 are a best practice for using video to communicate a company’s investment story. Illustrated by metaphors and describing the company’s progress during 2010, the videos capture the core message in the company’s equity story, featuring executives in a relaxed but confident way.

NOVOZYMES_FRONT_IR WEBREPORTThe CEO interview, filmed in a Danish winter landscape, helps communicate the company’s sustainability strategy as well as explain the core business and market drivers.

From the start, Novozymes’ online annual reports have also had a strong focus on the usability of the financials section, as well as allowing users to create and download their own PDF version. This year they are also using Flash to create interactive graphs and charts the illustrate key figures throughout the report.

NOVOZYMES_CEO_WEBREPORTThe Novozymes Annual Report 2010, interview with CEO Steen Riisgaard.

Positive investor feedback

Joséphine Mickwitz, IR Director at Wärtsilä, says the company has received mostly positive feedback about their online annual report, especially from international investors who she says “have been impressed by the extensive data we have managed to produce within a very short time.”

The company now only mails printed PDF versions of its report to shareholders who ask for it prior to the AGM, but the company also is trying to encourage shareholders to use the online version or download and print the PDF version themselves.

At Novozymes, a few retail shareholders missed the printed version, even if they did not necessarily read it. However, they appreciate that with a web-based report they can select and print only the sections of the report they’re interested in, says Tobias Björklund, the company’s Head of Investor Relations

Process improvements and savings

Both Mickwitz and Björklund agree that the production of online annual reports has resulted in a streamlined production process, saving both time and money for their respective IR teams.

“Initially, you have some upfront costs and you might also receive some negative feedback from shareholders, but over the long term the money saved on not having to print and distribute the reports is significant,” says Björklund.

According to Mickwitz, the online report has created many more positive than negative effects: “Since our report is published very early (week 6), we have been forced to streamline the production process. We have for example automated the transfer process of all the financial data. Figures from the financial team’s database are sent directly to the online annual report, minimizing the margin for error as well as saving a great deal of time.“

In addition, Wärtsilä is able to reuse the video material for other purposes. The company shows some of the videos at its AGM and uses the CEO interview for internal employee communications as well.

“We are convinced that an html-version of the Annual Report is a step in the right direction. The global trend is growing online communication,” says Mickwitz.

“In the end, it has to do with how you want to profile your company,” adds Björklund. “By producing an online only annual report you send a clear environmental statement to your shareholders.”

Disclosure: None. Sculptor IR does not provide consultancy within annual reports, has no relationship with any service providers that produce reports, and did not advise either of the companies covered here on the production of their annual reports.

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IR Challenges in 2011: M&A Activities and Management Changes calls for effective communication channels

From a Swedish perspective, 2010 was a great year where many companies exceeded the markets expectations; the same goes for the Swedish economy, ranked as one of the strongest finances in the European Union. The results of restructuring processes finally paid off, strengthening balance sheets even if sales volumes still where halting.

As a result, listed companies during the previous year (just as I predicted in January 2010) ramped up their IR activities and launched ambitions growth strategies. As a consequence Nordic IROs, have been quite busy with Capital Markets Days and roadshows, producing new investor presentations and spending hundreds of hours communicating new strategies and financial targets to investors and analyst. In other words, a quite normal IR year, compared to the turmoil in 2008 and 2009.

Will the day-to-day work for IR professionals go on as usual in 2011? Well, the everyday life for IROs are never normal and I have identified some challenges that I think Nordic IR professionals will be facing in 2011.

1. M&A Activities – 24/7 availability and transparency

Strong balance sheets and growth strategies has set Nordic companies in a shopping mood. M&A activities ramped up already during the second half of 2010, starting with Hexagon’s acquisition of US-based Intergraph in July and continued during the autumn. December 20, Novozymes announced the acquisition of EMD/Merck Crop BioScience. One day later, Alfa Laval acquired Aalborg Industries. 60 analysts attended Alfa Laval’s conference call, held three days before Christmas Eve, which clearly signals the markets interest in M&A activities.

A merger or acquisition always generates several questions:

  • How is it going to be financed?
  • What are the costs for consolidating the two businesses?
  • How does the the activity match the company’s strategy?

To successfully explain your company’s actions, IROs must proactively prepare Q&As as soon as the first discussions have been initiated; which often is months or years before the final announcement.

When communicating their growth strategy the company also must explain why they think growth by acquisitions is needed and what kind of preferences they are looking for.

When announcing an acquisition it has to be followed by a conference call or webcast where senior management attend and can answer questions. IROs have to be prepared to be available 24/7 the coming weeks to continue answer questions.

Best practice is if the company shortly after the announcement can organise a Capital Markets Day or another Q&A session with CEO to further explain the acquisitions from a strategic perspective.

2. Do not underestimate the impact of Management Changes

Many Nordic companies are facing management turmoil in 2011 as several CEOs have resigned or changed company, for example Hans Stråberg at Electrolux, Olof Faxander are leaving SSAB to start at Sandvik, Leif Johansson at Volvo, and Stine Bosse at Tryg.

Companies have a tendency to underestimate the impact management changes (CFO, CEO etc) have on the market. The company is often in no hurry of recruiting a new CEO, while investors start to get quite nervous about whose running the business pretty quickly.

For the IRO, management changes increase their workload as they are losing key persons in their IR-team and need to educate a new CFO or CEO about the importance of investor relations.

The appointment of a new, internally recruited CEO or CFO is has advantages, as the person will know the company as well as the industry. The IR-team is facing greater challenges if the new management member is recruited externally and has no experience of either the company, or the business. As the market has little patient with new CEOs, this person has to learn the company’s strategy, business fundamentals, the industry and market growth drivers and how to communicate successfully with the financial market within a couple of months.

In the midst of the education process the IRO tries to get them to prioritise IR activities including quarterly presentations, road shows and one-to-one meetings.

To ease the transition process for the IR-team, I often recommend my clients to conduct a perception study and to use the analysis get the management’s attention on compulsory IR priorities during the year.

  • This allows the new CFO or CEO to get an introduction of weaknesses and strengths in the company’s strategy and key drivers in the industry.
  • Secondly, these key insights help the newcomer to be more prepared for what questions they most likely will receive during a one-to-one meeting, quarterly webcast or road show.

I have stressed the challenges of management changes in an earlier post: Pros and Cons with management changes.

3. Effective communication channels is a must

To successfully handle both M&A activities with 24/7 availability and transparency and coping with management changes, IROs are depended on effective communication channels. The IR-team should serve as a CRM-function for the investors and analysts, answering questions, explain strategies and building confidence and relations.

To be able to do this and act proactively the IR-function need to have effective communication channels. I have for example suggested that a blog post summarising Q&As from the latest quarterly presentation would save the IR-team hours. Or if a blog is to revolutionary, why not at least categorise questions from the webcast in chapters?

And to my liking, IR-professionals have recognised the growing importance of IR websites and are planning to update their on-line communication in 2011. When doing so, it is essential to assess the value social media can bring into a new on-line communications strategy. If you are searching for IR Website Best Practices, I strongly recommend that you download Q4 Web Systems free Whitepaper:

Posted in Capital Markets Day, Communication Channels, Investor Relations, IR and Social Media, M&A Activities, Management Changes | Tagged , , , , , , , , , , , , , , , | 2 Comments

Season’s Greetings 2010

Sculptor IR thanks all customers, partners and friends for an amazing year.

We wish you a Merry Christmas and a Happy New Year!

Please enjoy our video greetings.
http://static.animoto.com/swf/w.swf?w=swf/vp1&e=1304241411&f=5RN0Gc4LqTc457UvtCIeeQ&d=85&m=b&r=240p&volume=100&start_res=240p&i=m&options=

Create your own video slideshow at animoto.com.

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New stats: Scandinavian companies using Twitter for IR

The following post is a 1:1 duplicate that I originally wrote for IR Web Report:

SCULPTOR IR has just completed a major survey of 760 Scandinavian companies to see how many are using Twitter for investor relations information and to identify country differences and best practices at specific companies.

The latest survey is a substantial expansion of one Sculptor IR published in April 2010 covering 130 companies listed on Nasdaq OMX Nordic and the Oslo Børs –see IR and Social Media in the Nordics – Part 3: Q1 Earnings presentations versus Tweets – which found that 23% of the surveyed companies had Twitter accounts, and of those 40% posted tweets about their earnings results.

During the most recent Q3 earnings period, the results show that only 16% of the 760 Nordic companies have active Twitter accounts. However, there are large differences by country, with Finnish companies being most active on Twitter (25%), followed by Swedish companies (19%). See the chart below:

Nordic Listed Cos Use of Twitter_1012

When analyzing tweets from a corporate communications and IR perspective, 65% of the Norwegian companies tweeted their third-quarter earnings results, while in Finland it is a more modest 25%. Half of the Swedish companies (49%) used Twitter to increase awareness of their Q3 reports. See the chart below:

Twitter_Q3_2010

IR pioneers on Twitter improving

While the total number of companies tweeting results remained at the same level as in April (41%), the IR Twitter pioneers are adding more valuable information for their followers.

Another positive trend is that newly listed companies as Danish ingredients group Chr. Hansen and Swedish Oasmia Pharmaceutical are adopting Twitter to directly communicate with shareholders and investors.

The following three companies stand out for their practices:

1. Veidekke, Construction, Norway, (market cap 6.591 MNOK)

http://twitter.com/Veidekke_ASA

Company blog Terje’s Thoughts

Veikedde_Blog_Resultatframgång_Q3_101104

Veikedde_Blog_Broad profit_Q3_101104

Veidekke is one of the most prominent users of social media for IR and corporate communications in the Nordic Region. They tweet earnings releases and invitations to webcasts. They have managed to get 400 followers even if they only tweet in Norwegian. Extraordinary for Veidekke is their blog Terje’s Thoughts (Norwegian) that has been running since 2009. The blog is one of very few IR/corporate communication blogs in Scandinavia. After each earnings release the CEO comments on the results in a post.

2. Vestas Wind, Wind Power, Denmark (market cap 4.463 MEUR)

http://twitter.com/Vestas
Vestas_Q3_101026_VIDEO_CEO

Vestas Wind started to tweet in August and is a great best practice case of how you can use Twitter for IR. Today they have 650 followers!

Vestas Wind send reminders to attending webcasts, link to the presentation and report and use hashtags as #wind #energy #greentech. Recently they invited followers to send in questions when the Financial Times interviewed their CEO.

3. Metso Group, Industrials, Finland (market cap 6.447 M EUR)

http://twitter.com/MetsoGroup

Metso_Q3_101028_QsMetso live-tweeted from their Capital Markets Day in June. Besides from posting links to earnings releases and quarterly reports they also tweet highlights and questions from their earnings calls. Being a B2B company, Metso’s activity in social media is even more interesting to follow as one common assumption is that the new media channels only is for B2C companies.

Room for improvement and learning

While it is very promising to see how the best practice cases constantly improve their Twitter skills, the vast majority of company tweets are of a poor quality. The most common Twitter mistakes are:

  1. Inviting people to a webcast or to read results without providing a link.
  2. Sending the earnings tweet one day after the release.
  3. Inconsistency, such as tweeting results from first and third quarter, but not the second.
  4. Not using #-tags to track retweets or creating transcripts.

Of course, the IR Twitter pioneers have the benefit of being able to make mistakes and learn from them while social media channels are not yet being fully embraced by Nordic region institutional investors or retail shareholders.

However, when the investors do join in, the early adopter companies will have a great competitive advantage over their skeptical counterparts who have adopted a “wait and see approach” towards using social media for investor relations.


Posted in Earnings Period, Investor Relations, IR and Social Media, Uncategorized | Tagged , , , , , , , , , , , , , , , | Leave a comment

Swedish IROs still skeptical about social media: risks bigger than opportunities, ROI

The following post is a 1:1 duplicate that I originally wrote for IR Web Report:

Earlier this week I attended a lunch seminar ”IR Excellence: Risks and opportunities in a digital world”, hosted by the Swedish IR association (SIRA), in cooperation with Cision, Grayling and Setterwalls.

IROs from the internet bank Nordnet and the mobile operator Tele2 where invited to share their experiences of using social media for IR. Sculptor IR wrote about Nordnet in an earlier post: Advice from Swedish IR pioneers in Social Media: ”Keep it simple”

Nordnet: reaching out to retail investors

Nordnet is a mid-cap company with a market cap of 4 Billion SEK that is listed on NASDAQ OMX Nordic. The company has four Twitter accounts, three with a personal approach and @Nordnet as their official corporate account. They are active in other social media channels like Facebook and Slideshare, and they have a corporate blog called Nordnetbloggen

The company has been “live-tweeting” their quarterly presentations for the past year, and they have invited followers to send in questions through twitter or the blog.

Nordnet_Q3_Live_201010Adrian Westman, IR manager at Nordnet, said that new media channels improve and strengthen the company’s financial communication as they are more user-friendly, available and transparent.

Nordnet’s followers are mostly private individuals, IR/PR consultants and journalists. Nordnet’s main purpose with using social media channels is not to reach their analysts because they “talk to them frequently”.

Instead, Nordnet wants to improve their relations with their retail shareholders, which they communicate with less frequently. They also want to strengthen the company’s brand by reaching a larger audience.


Tele2: blog-inspired IR website

Tele2, which has a market-cap of 63 Billion SEK, launched their blog-inspired IR website “Explore our financials” earlier this year and are active in almost all social media channels.

Tele2_Explore our financials

Lars Torstensson, Group Director, Corporate Communications at Tele2, explained that their main purpose with social media is to reach and communicate with customers. Tele2 considers social media great tools for PR and internal communications.

When it comes to investor relations, social media has potential to be an effective communications tool in the future, but not at the moment, according to Lars. Lars’ advice to other IROs is to make sure that disinformation doesn’t go unanswered.


Regulatory environment leads to caution

Anders Ackebo, senior consultant at law firm Setterwalls stressed the legal constraints of using social media for IR purposes. He could see a risk that companies are stretching compliance rules when communicating in social media.

On the other hand, said Anders, European compliance rules need to be updated to include new media channels, but that process that will take some time.

The final discussion was about the risks of new media. Nordnet explained that they apply the same information policy in social media as for traditional communication so they don’t see new threats or risks.

In summary, Swedish IROs still are skeptical about social media as the compliance risks seems bigger than the opportunities these new channels create. But if they are going to be active, their main purpose would be to reach out to their retail shareholders.

Of course, this focus could change if, as Adrian Westman from Nordnet suggested, we see Scandinavian versions of Seeking Alpha or StockTwits, which would bring institutional investors to the audience.

Posted in Investor Relations, IR and Social Media | Tagged , , , , , , , , , , | 1 Comment