Best practice for interim results
This article was produced in association with ELITE Connect. It was originally published on the ELITE Connect platform.
For European companies, half-year results can be a significantly more important milestone than for their North American counterparts, which remain obliged to provide full quarterly reporting. What constitutes best practice will differ from company to company depending on circumstance. Still, to avoid gaps in messaging, here are a few key essentials to keep in mind.
1. Hold a webcast. Many companies make the earnings call available in both telephonic and webcast formats. One of the benefits of using a webcast is that companies can gather additional information on attendees and their activity. For example, you can track who has signed up, how long they spend on the call and which slides are of most interest. Research suggests incorporating visual elements into the webcast helps to boost engagement: compared with audio-only webcasts, those with video and slides see an increase in average registered users of 73.3 percent and in average viewing time of 28.3 percent, according to data from Nasdaq Corporate Solutions.
After the call’s conclusion, make sure to archive the audio, slide deck and any other collateral on your IR website. Providing as much supplemental information as possible can help improve the quality – and duration – of follow-up conversations, so consider podcasting. Apple, for example, uses its own iTunes podcasting app to connect with analysts and investors on their mobile devices. One fan gives the podcast a five-star rating, saying: ‘Totally awesome! I can now listen to an earnings call while walking or in my car at a time that is convenient to me.’
2. Call individual analysts after the public call. Analysts often have more granular follow-up questions, which can’t always be addressed in detail in the public conference call. This also provides an opportunity to gather feedback on both overall investment sentiment and the presentation itself. Calls to sell-siders, under pressure to release notes and updates, are the norm. ‘Our immediate focus is on ensuring the clarity of the main messages while being mindful that analysts have tight deadlines,’ says Aarti Singhal, director of investor relations at National Grid. ‘As for the buy side, we generally interact through one-on-one meetings unless there is a specific requirement for a call.’
3. Hit the road. This is the time to showcase management strength and communicate long-term vision and strategy. Consider bringing C-suite executives beyond the CEO or CFO. For its part, ISS makes a point of spacing its IR-only roadshows (usually Q1 and Q3) some temporal distance from its earnings release.
‘The closer you get to results, the higher the likelihood you end up discussing recent numbers and the smaller picture,’ says Martin Kjær Hansen, senior IR manager at ISS. ‘Interim result roadshows with management tend to occur closer to the results date. That’s because these meetings are focused on current larger investors that tend to spend time with management wisely and look to get their view on bigger-picture things, even if the meeting is placed close to results.’
‘Being transparent and keeping the market updated is a continuous process,’ concludes Singhal. ‘Any way you look at it, your job is to give investors what they need throughout the year.’