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- Introduction and relevance to the company
Result presentation is an interim result communication tool as it informs investors, analysts, media, and other stakeholders about the company's financial performance every quarter. It also informs about the key developments during the quarter, and growth strategies ahead.
A result presentation lays out the company’s performance – both financial and operational during the quarter. Financial information enables the analysts, investors and stakeholders evaluate how well the company has performed during the quarter. It allows the investors, analysts and other stakeholders to gauge the financial health of the company by comparing key metrics such as revenue, earnings, margins against the previous quarter and previous year and whether or not it deserves their investment. It also includes recent steps taken by the company during the quarter such as product launches, entering new markets or tie – ups etc.
A results presentation helps the management to explain the key drivers during the quarter and answer queries about the financial results and major developments. In cases where the company’s performance shows a rise or fall due to certain factors, it becomes all the more important to clarify them in the results presentation.
- Pain points
- Providing detailed analysis
A company cannot provide explanation for the performance of the company during the quarter in the financial results and earnings release as it is short in nature. A detailed explanation would be necessary to provide to the analysts, investors and other stakeholders to enable them to comprehend the factors affecting the company and company’s performance in light of such of factors.
The most common queries are related to company’s results in areas such as revenues, margins, earnings etc. Identifying such queries would enable the IRO to answer them in much detail and the time saved could be used for answering other queries.
- Information to be provided
Each industry would have certain peculiarities. To understand the company’s performance and enable comparison across peers, analysts would require relevant data. Knowing and sharing the relevant data to understand and compare the results is of utmost importance. For example, in telecom sector Average Revenue Per User (ARPU) and network usage (in %) would enable analysts to carry out a more meaningful analysis.
- Best Standards and Practices
- Safe harbor statement
Company should clearly identify statements that are forward looking in nature. It should also endeavor to identify risks – both internal and external, which may have an impact on future performance. The statement demonstrates that the management made an attempt to disclose all factors that may impact future performance in good faith.
- Senior Management commentary
A quote by the senior management of the company (Chairman/CEO/MD) at the beginning of the presentation discussing the quarters’ performance in terms of company’s long term goals will reinforce and reassure the investors about the company’s determination to reach its goals. Management quote is also an opportunity to underline the market conditions and other macro factors that impacted company’s performance during the quarter.
- Provide detailed analysis
- The company should provide a detailed results table.
- Corresponding Q-o-Q and Y-o-Y numbers should also be provided to enable a meaningful comparison.
- Segmental information can provide additional insights to understand the numbers.
- Any change in accounting policies should be highlighted and the impact due to change in policy should be quantified.
- Non-financial metrics can include operational performance, new product launches, changes in management or board, etc.
- Any omission of data which has been historically provided in the result presentation should be explained.
- Provide outlook/guidance
The company can offer an outlook about the external situations that can affect the company and their readiness to deal with it. They can also guide about the range of estimated revenues, earnings and margins which the company expects in the next quarter and rest of year. Assumptions made for making the guidance should be disclosed. Any change in previous guidance should be highlighted and explained with appropriate reason.
- Use graphs/images
Result presentation should be supported with graphs/images/charts etc. wherever possible. This enables the viewer to understand the message quickly and clearly. It also allows the message to be remembered for a longer period of time.
- Execution and checklist
Key steps to executing an effective result presentation:
- Start preparing the list of topics to be included in the result presentation
- Refer to previous result presentations for disclosures to be included and continued
- Involve senior executives from finance, legal, production to obtain their inputs
- Prepare a working draft of the presentation that needs to be updated with the final numbers
- Make sure the financial numbers used in the result presentation are in line with the result tables
- If split of any number is being given, check that the sum of the split adds up to the original figure. For example, if revenue split is given across geographies, ensure that the total across all geographies matches with the revenue
- Send out an email and website alert to investors and analysts after uploading the result presentation
An effective results presentation should have the following content:
- Company name
- Safe harbor statement
- Results highlights
- Senior management commentary
- Detailed results table
- Trend for the last five quarters
- Segmental performance
- Quarterly/Annual trends
- Key drivers and Growth strategies
- Competitive advantages / USPs
- Expansion plans / Capex planned
- Outlook / Guidance
- Contact details
- Measuring Success
- Number of downloads – Success of results presentation can be measured by the number of views or downloads made.
- Number of meeting requests – Requests received for meeting post results presentation from analysts and investors can be an indicator of the presentation being well received.
- Feedback – IRO can take feedback from the stakeholders to know about the relevance, utility and quality of content of the presentation.
- Post earning queries – Quality of questions asked either during the Q&A session in earnings call or post the results presentation can be a measure to judge the success of results presentation.
Quote – Feedback obtained by IRO may be incorporated in the next results presentation to make it better.
- Do’s and Don’ts
- Release the result presentation immediately after the quarterly results
- Upload and archive the presentation on the company website
- Inform all the stakeholders about the result presentation via email and website alerts as soon as it is uploaded on the website.
- In the result presentation provide details of year to date cumulative performance and comparative Q-o-Q and Y-o-Y performance
- Provide data on a consistent basis over quarters
- Major variations in the quarterly earnings should be explained including any important developments during the quarter
- Provide a glossary of terms used in the presentation
- Keep the presentation flow straightforward and use simple English
- Company should not refrain from sharing any material negative information that could have occurred during the quarter
Result presentation is a periodic IR tool which allows the company to update its investors, analysts and other stakeholders about its financial performance during the quarter.
Results presentation also provides details of company operations, major developments and any extraordinary events and changes during the quarter. It includes planned cap-ex and expansion plans. Adding graphs, charts, diagrams will enable the viewer to quickly understand and remember the message being communicated.
Results presentation helps analysts to analyze the results and provides information in a better way. Releasing a result presentation should be continued as a practice even in difficult times.
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