A majority of the Nordic companies have reported their annual results for 2009. The bubble didn’t burst, but it has been stretched to the maximum, and only some causal reassurance has been provided to the market. When summarising the Nordic Q4 earnings period, I am not so surprised by the results that are communicated or the nervous reactions from a quite volatile market. The most surprising is how the results are communicated and how ill prepared some CEOs seems to be by questions that relates to the outlook for 2010. I attended a very interesting #irchat at Twitter earlier today. One of the issues discussed where the importance of management’s credibility.
Even though Nordic companies according to IR Insight are quite reluctant to give guidance (52 %, Sweden being worst practice with 23 %), they could give more macro economical data that correlates with their business and explain how financial triggers (KPIs) affect their net sales.
But of course we have some examples of best practice.
- Autoliv has a long tradition of providing data that relates to the car industry and also includes a slide of price trends in their Q4 presentation.
- Finnish YIT has been considered best practice within Nordic IR for a long time and presents a very in-depth view of their market outlook.
- Another very appreciated trend in earnings presentations in Finland is to have several members of management presents at the presentations, as done by both YIT and Wärtsilä.
Preparation, in-deph research and transparency are crucial key factors for a successful earnings presentation. If you continuously keep track of FAQ from other presentations, 1-on-1 meetings, and daily phone calls with investors and analysts, there shouldn’t be any questions during a web cast that will put the management off guard.
By that not said that you should have answers to all questions, for examples how snow can affect sales in UK. But if you can’t have a transparent communication about your business, at least you could provide more transparency about macro financial trends within your industry and what underlying factors that have an impact on your net sales and order intake.
If you trustworthy can’t explain the triggers in your business, how can you expect your investors to believe in your outlook?