Circumnavigating the capital market's desires

By Timmy Fredriksson

Capital market stakeholders are born navigators, always on the lookout for information. IR sections? Their true north. However, our experience with ranking 900+ company websites has taught us that satisfying these expectations is often a struggle. What is it that these companies are missing?

The Investor Relations (IR) section contains some of the most requested information on a corporate website. Still, despite its importance, it has strayed from its purpose – fulfilling the needs of capital market stakeholders.

For this season of Webranking by Comprend, the average IR score was a mere 27%. This is by far the lowest average score for any of the sections included in the ranking, and out of 900+ companies, only 122 managed to score 50% or above.

Strategies and contact information are frequently included, but no more than that

One piece of information that many companies provide, 72% to be exact, is an overview of their group strategy. However, when looking at the way this information is presented (such as what concrete actions they will take to deliver on their strategy), the number of companies that fulfil this demand drops to 28%.

Contact details for people in the IR department are highly requested. This is another criterion that most companies manage to fulfil. Most provide either a general or personal contact, whether it is an email address or a phone number. Best practice is to include both a general and personal contact, with a photo of the personal contact being recommended as a way to decrease barriers and build trust.

Overall, ranked companies had a hard time when it came to providing more than this in their IR sections. In particular, information on outlook, financial targets, and achievements stood out as massively underperforming – on the whole, the fulfilment score for this criterion did not climb above 15%.

The technology sector is dragging behind

Although they are not huge, some discrepancies can be seen when looking at the IR results by sector. At the top, we have the Construction & Materials and Utilities sectors, with an average of 36% each. At the other end, we have the Technology sector, with an average of 15%. Some criteria are nearly non-existent in the Technology sector – only 2% of the ranked companies provided outlook overviews and the same goes for financial targets and achievements, where the average was 4%.

Besides IR contacts, the few criteria where the different sectors succeeded in stepping above the 50% line were the following: utilities and insurance scored an average of 52% and 51% respectively for outlook overviews, while basic resources scored an average of 56% on the investment story criterion. According to stakeholders, both are important pieces of content, as this is what helps them gain an understanding of where a company is headed and what their strengths are, as well as focus points to test against other research.

Best overall country performance? Finland!

When looking at the results for each country, it's evident that Finland has a clear lead in IR. Finnish companies earned an average score of 57% and are certainly proficient in presenting investment stories, as well as risk management operations and its associated processes.

While the Finns aren't the best at everything, they certainly have standout performances for many of these criteria and are far ahead of the second and third place winners, Germany and Italy. Germany earned an average score of 45% and excels at providing outlook overviews compared to other countries. Italy scored an average of 43%, with risk management being their respective strong point.

One example to consider is Finnish company Wärtsilä, which provides a near-perfect IR section as far as content goes, but also manages to present it in a well-structured way.

Italian and Finnish companies dominate the top 20

All companies in the top 20 list scored an average of 80% or more on their IR sections. A stellar number, considering that the average for all ranked companies was a mere 27%. Content-wise, all of the top 20 companies are good sources of inspiration.

The ranking is clearly dominated by Italy and Finland, followed by Switzerland and Sweden. All of these companies provide a healthy amount of detailed content, but Italgas manages to do an excellent job in making the sheer amount of content easily understandable by adding infographics and graphs where needed.

Top 20 companies by their IR section scores

The top performing companies among all ranked companies.

Investor relations results per sector

Average fulfilment score for IR criteria

Read more about Webranking by Comprend 2018-2019

Photo by Josh Withers on Unsplash