Designing analyst presentations

Some random thoughts about designing good investor presentations. Investor presentation in this context is a presentation by a larger publicly traded company to equity analysts and institutional investors, for example a quarterly results announcement or an investor conference.

My blog contains a lot of ideas that visible for only one day, I plan to start writing some longer articles about certain topics that deserve a more permanent presence, and update them with new ideas or input from my readers.

Begin working on the presentation early
The worst presentations are finished at 3AM the night before the investor call. It is possible to create 75% of the content of the investor presentation with preliminary data, or even the data from last quarter. Usually changes in data are not that dramatic that completely new visualization approaches are needed. Use existing data to decide on what type of graphs you need and replace the dummy data with the real thing as the information comes in. And: not all sections in an investor presentation are about data. The section with the update on the company strategy can be completed independently of the availability of the latest financial results.

Get the basic formating right
Use the correct corporate template, set the colors and the fonts to the correct values. Avoid clip art. Use professional, high resolution images. Use one template throughout all the presentations at the event. Pay special attention to the way data charts are formated. There is nothing worse than a straight copy-paste from Excel. Look the way newspaper or magazines such as The Economist pay attention to the layout of graphs: clean and focussed on one message. A PowerPoint presentation to investors differs from an annual report: it is OK to round up numbers to make the chart more readable. People who want the full detail can always refer back to the accounts. In a 20 minute call those last 3 digits behind the dot do not matter.

Keep breakdowns transparent and consistent
Make it clear to the audience at any time where they are in a financial breakdown. A breakdown in geography adds up to the total sales number they saw on page 1. Gross margins by product line average out to the gross margin of the company they saw before. Even if you explain small deviations in the foot note (sorry we excluded the cost of the headquarters, added government tax, and left out royalty sales) will confuse the audience. This could be OK in a detailed financial report, it definitely is not in a 30 minute on-screen presentation. You as a CFO suffer from The Curse of Knowledge, you know the company financials inside out. But the audience is just getting to know the figures, and it is re-assuring to see the total getting back to that $14.8bn that they remember from a previous page.

Do analysis to back up trends
If the company performance was impacted by certain factors (volume went up, prices went up, cost went down, but what got to us is a huge increase in foreign exchange losses), show and quantify this in analysis. A waterfall or sources of change chart can make the impact of multiple financial drivers perfectly clear.

Apples and apples
It is hard to compare different benchmarks in one financial picture. Absolute revenue and cost numbers is one. Gross margin, operating margin, cost as a percentage of revenues is another one. Growth rates is yet another category. Use different slides to talk about them one by one.

Use non-financial figures
Investors are not only interested in your financial performance. If confidentiality permits you to share some non-financial operating data, this can add a very powerful dimension to your story. Market shares, order numbers, customers all add to the overall picture of the performance of the company.

Bullet points are poor at creating a financial picture
Bullet points are bad practice in any presentation, but they are particularly poor at giving a financial picture. A simple table is a much more powerful way to get a quick sense of what is going on. Bullet points simply provide a verbal translation of this table, that the audience then needs to reconstruct in their mind. It is easier to skip these steps and stay to the source data.

Create original content
Especially under time pressure, there is the temptation to stitch together a slide deck quickly from existing presentation material. A few slides from the Board strategy review, some slides from the recent new product launch, a few Excel tables with the latest results: the Frankenstein presentation design method. Results are quick, but poor. A good presentation should have a consistent format and style on every page. What works for the Board, does not automatically work for your investor community. It is fine to be inspired by existing content, but use them as input into the design process rather than a straight copy-paste.

Think of different audiences
Equity analysts usually know the company and its financials inside out. They are waiting to fill in the next column in their pre-configured Excel sheets with this quarter's numbers. Show the key numbers that they are waiting for first. Analysts spend a lot of time sitting through conference calls and presentations. Cut the fluffy language, the buzzwords, the jargon: they will see through it. Rather cut to the chase. Journalists are less familiar with the financial data of the company. For this audience it is important that the company strategy is summarized clearly. It is not all about numbers. Online audience. After the press conference, most investor presentations will start their second life online. It is likely to be viewed by a small retail investor, a student, a potential customer. The challenge with online presentations is to communicate the message without verbal explanations. Make sure that charts and slide headings are clear.

Strategy is story
An investor presentation is more than a set of numbers. Behind every company is a strategy, and behind every strategy is a story. Tell that story in your investor presentation.

Practice, practice, practice
It is rumored that Steve Jobs spends 3 full time days rehearsing his annual presentations at Apple. This sounds counter-intuitive: you need to practice, know your presentation inside-out, in order to be spontaneous. Even CFOs and CEOs with significant speaking experience cannot afford to rely on "winging" it for external presentations. This is especially true for conference calls or presentations delivered over the Internet. There is little connection/feedback from the audience and stuttering, improvising, uh/oh will sound much worse than it does in front of a live audience.