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.
The CEO statement/letter – or letter from the chairman – is the essence of the annual report. It should highlight the strategy and what is important to the company, putting last year’s events and performance into context.
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.
Telia Company (Sweden) presents both financial and non-financial key figures for the past year in their Annual Report 2021.
The strategy should convey where the company is heading and how it plans to get there. After the financial statements, it is the most important information in the annual report according to Comprend's Capital Market survey 2021. The strategy should cover:
Strategy
Strategic objectives
Strategic focus areas/priorities
SSAB (Sweden) shows an excellent use of a simple visual used to describe the company’s overall business strategy, along with strategic targets and achievements.
Randstad’s (Netherlands) strategy is described in detail and complemented with a strategic roadmap including progress per each for 2020.
The business model should explain how the company creates value for all stakeholders – and 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
Excellent presentation of United Utilities' (UK) business model with a visual and text that explains the whole value creation process and how they operate including what differentiates them and their target market. It's also available in an online version.
Well-described and nicely illustrated business model in Kone's Annual Report 2020.
Understanding the performance of a company's divisions helps to fully grasp the potential of the entire company. The growth drivers and macroeconomic aspects are also important to understand as well as competition. We are looking at:
Review of operations
Growth drivers
Competition
Atlas Copco (Sweden) first present their business areas in brief and then more extensively with market development, financials (graphs and tables), market drivers, competition, products for each area. Very well presented.
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
German chemicals company Evonik Industries present and explain their financial targets along with the performance in 2021.
A full understanding of what current or future risks the company is facing and how each is or will be handled is important when evaluating the company. The risk section should cover:
A description of the company's approach to risk and risk management
Different types of risks, e.g. financial, operational, strategic, environmental
Activities taken to minimise risks
Probability of risks
Map/matrix or table to simplify
Randstad (the Netherlands) elaborate on their risks, risk management and connect them very well to both strategy and opportunities.
3i's (United Kingdom) presentation of risks is clear and visual with a comment on outcome.
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
Heineken (the Netherlands) present their commitments and progress in an excellent way - making it easy to get an overview of what and when.
Neither the visual aspect nor the user-friendliness of the annual report should not be neglected, regardless if it is a PDF or online version. This criterion is more subjective than the others, so we have aimed at not only evaluating if the report is good looking or not, but also if the structure makes the report easy to use, if the PDF uses bookmarks or other navigation tools. 77% of the respondents of our Capital Market survey prefer to read annual and sustainability reports on a screen so it is essential to take this into consideration when designing reports. We look for:
Appealing visual design
User-friendly structure and navigation
Easy to read
Use of illustrations and tables
Pandox' (Sweden) are making use of imagery from their hotels in an excellent way in their 2021 Annual Report. The rest of the report is also well-designed and pleasant to read. It's also user-friendly with a lefthand navigation in the PDF.
DNB's (Norway) Annual Report 2021 is nicely designed with great illustrations throughout the report. It also has good bookmarks and clear indication of the current chapter.
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.
31% of the 490 companies provided some kind of online report—everything from a short summary to a full online annual report complete with financial statements.
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)
Although it's not a full online annual report, BMW's (German) online version making use of the digital format in a great way to show key figures for example. For some reason, the management report is not completely digital as the strategy for example is presented in pdf. Apart from that—and the very long intro video—this is a great online report.
Cookies
This website uses cookies as described in our Cookie policy. To see what cookies we serve and set your own preferences, please use your web browser's settings. Otherwise, if you agree to our use of cookies, please continue to use our website.