Written by: Richard Carpenter, Merchant, London
American reports tend to be slightly less communicative than those in some regions due to the strict legal regime laid down by the US Securities and Exchange Commission. That said, some companies use this to their advantage. PepsiCo and GE are two longstanding exemplars of good, clear reporting, demonstrating how it is possible to communicate well while complying with a wide range of regulations.
Packed full of statistics about PepsiCo, this report brings the company’s story alive. The Q&A section is well worth a look for its plain-talking approach to frequently asked questions. The investment story is told in the context of PepsiCo’s markets and the key performance indicators (KPIs) show how the company is moving towards longer-term corporate objectives. It is also very good at integrating the wider sustainability story into its reporting. http://www.pepsico.com/Annual-Reports/2007/index.html
GE starts off its report with a pertinent question: “What makes GE different?” It then sets out to answer this question throughout the report. This is exactly the type of investment proposition investors really look for: why GE stands out from the crowd, and why investors should buy into its overall strategy. The excellent “Letter to Investors” is an object lesson in clarity. GE also gives the report a strong forward-looking orientation. http://www.ge.com/ar2007/index.jsp
Large French companies have traditionally not been the strongest when it comes to telling their investment story with, typically, too much focus on products ahead of strategy. Thanks undoubtedly to the increasing number of international institutional shareholders on share registers, this is starting to change. The investment stories of some French companies now really stand out from the crowd.
The global drinks group tells its investment story well and puts the group’s businesses into perspective – there is a good “at a glance” and clear strategic insights from the Chairman and Managing Director. The “Four Major Strategic Focuses” section is a useful overview of where the management team wants to take the group, and builds on a readable analysis from Pierre Pringuet, managing director. The employee section is a tour de force of reporting on this valuable asset. http://www.pernod-ricard.com/medias/resources/static/rapport_interactif/2007-11_uk/pernod_ra_2006_2007_ang/index.htm
Scandinavian reports have generally been ahead of the game relative to most of continental Europe for a while. Sweden is no exception, with some excellent examples of integrated reporting that really explains the business. Swedish companies have been open to international ownership for several years – actively courting investors in the UK and US – and this shows in their reporting.
Volvo links its overall investment proposition to its strategy and corporate responsibility – a rare approach for any company. One of Volvo’s real strengths is to show how it reacts to wider market trends, what its analysis of the global economy is – and what this means for its business. That is a reassuring starting point for any potential investor. http://www3.volvo.com/investors/finrep/ar07/eng/index.html