AR on AR 2021

AR on AR 2021 |  Summary  |  Ratings  |  Top picks  | Best practices

Best practices

While reading and evaluating hundreds of annual reports, we often find great examples that we want to share with you. We have listed some of these below, but there are of course many more. When the information is presented in an online version, we have provided a link.

• CEO letter
• The year in brief
• Strategy
• Business model
• Operations
• Financial targets and data
• Risks and risk management
• Sustainability targets and data
• Style
• Online report

The year in brief

A summary of the past year gives a good overview and gives the reader an indication of what to expect from the report. It can also serve as a summary to go back to after reading the full report. This part should include:

• A summary of events from the past year.
• A selection of key figures showing how the past year went. Should include both financial and non-financial (i.e. environment, social data), share information and comparison with previous year.
• Charts.

Nicely presented key figures in AB InBev's (Belgium) annual report 2020 – easy to read and get an overview.

UPM (Finland) manage to fit key figures, more or less presented as their business model, together with main events in 2020 in one page.

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Business model

The business model should explain how the company creates value for all stakeholders – and with what means the company will reach their overall goals. A good business model covers:

• How the company creates value for different stakeholders including customers
• Their target market
• What differentiates them from competitors

BASF (Germany) integrates their business model in "How We Create Value" in their online annual report , making use of the online format in a great with with the possibility to expand sections and link to more information.

Well described and nicely illustrated business model in Kone's Annual Report 2020.

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Financial targets and data

The financial targets indicates what the company thinks is achievable. Together with past target achievement helps the assessment of future target achievement. This part should include: 

• Financial targets expressed in numbers
• How to achieve them
• Past achievements, at least previous year
• Outlook/guidance

DSV Panalpina (Denmark) present their outlook and long-term financial targets in a clear way.

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Sustainability

Wide and vague discussions on companies’ responsibilities are not enough. The sustainability strategy and approach need to be complemented by targets and target achievements for environmental and social areas such as emissions, waste statistics, health and safety and diversity. By offering hard facts and results, the company also fulfils the market's expectations on corporate transparency. Examples of information that we are evaluating: 

• Clearly stated targets
• Past achievements of the targets
• Data
• Activities to reach the targets

Arjo (Sweden) present both their past and upcoming sustainability goals along with key activities and data.

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Online report

The online format makes the annual report available for more stakeholders as it easily can be linked to and shared. The content of the report can be found via Google increasing the audience to not only the usual suspects such as analysts and investors but also to potential customers, employees and media. It increases the possibilities of engaging the users by using interactive features. 

32% of the 519 companies provided an online report, or at least an online summary. When evaluating this criterion we look for:

• Online summary
• Financial statements in html
• Easy to use
• Interactive features – for example strategy presentation, video and chart generators.

Adidas’ online annual report is once again a good source for inspiration. In addition to financial statements in html, they also provide a chart generator. (Adidas, Germany)

Easy to use with a navigation and the possibility to read the report page by page, using arrows that are available in the middle of the screen, even when scrolling. (Peab, Sweden)

Nicely designed, with short highlight pages to important areas. (RusAgro, Russia)

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Are you looking to improve your annual report next year? We can help you. Check out our ReportWatch reports.