What To Include In Your Investor Presentation

Like Bill Murray in Groundhog Day, IROs find themselves incessantly repeating one particular task. It does not involve a rodent or a maniacal drive over a cliff, but it does provoke, at times, frustration and uncertainty. The task is creating and recreating the investor presentation to address the various informational needs of current and potential shareholders.

In this issue of IR focus, we answer commonly asked questions about best practices in investor presentation content. (For tips on how to deliver a presentation and ideas about designing PowerPoint slides, the first two IR focus issues from 2012 provide guidance. Refer to 'Where To Get More Information' at the bottom of this article for links.)

Is it acceptable to have more than one deck?

The answer is that it is more than acceptable, it is obligatory – for the simple reason that your executive team will speak to audiences that have different informational needs. A deck used to update a long-term shareholder on quarterly performance will have content that is narrower and more focused than a ‘core’ presentation deck used to explain business basics to a potential stock owner.

That said, it is best not to allow too many variations of the presentation to exist. In an ideal world, there should be just two: one used to update existing investors on recent (quarterly) performance (‘the update deck’) and one telling the full investment story for newcomers (‘the core deck’). This is not always possible since the need for special presentations arises from time-to-time for purposes such as marketing an acquisition, satisfying the specific requirements of a broker conference invitation, or making a presentation at the annual shareholders’ meeting. But finding common ground in each presentation variant by reusing slides whenever possible is good practice (as is posting your current decks on the investor page of your website).

Creating (and maintaining) even two decks presents challenges. One is achieving consistency between decks in the presentation of financial information. The other is the workload associated with keeping both decks current. A suggestion that helps to address both problems is to ensure that the deck used for quarterly reporting purposes is developed to double as the update deck and is designed to be ported over for inclusion in the core deck as the financial section. Elements of both decks should then be used, wherever possible, to satisfy special presentation needs associated with an AGM or broker conference.

Based on a review of the presentations of 50 public companies, conducted by IR focus, it is apparent that in many cases, quarterly webcast slides have not been created with this degree of portability in mind; they lack high-level messaging about quarterly performance as it relates to broader corporate strategy. These quarterly decks address only the narrow ‘data’ needs of an analyst audience, making them somewhat unsuitable to be used for both update decks and core decks.

An exception is Ford Motor Company. Its quarterly webcast decks (see link below) are hybrids (no pun intended) that appear to have been developed jointly by finance and investor relations. They contain a wealth of data, as well as helpful messaging to update the viewer on Ford’s progress against its stated strategies. It would be relatively easy to use Ford’s webcast slides as an update deck and to insert them into a core presentation. This prompts another recommendation: when creating investor presentations, it is valuable to review decks created by other companies.

How many slides should be in a core presentation deck?

In general, presentations err on the side of providing more information than less, based on two assumptions: first, investors need/want detail; and second, investors will not take the time to search through disclosure documents to find what they need and will therefore expect an investor deck to be the sole source of insight.

Institutional investors we spoke to refuted the concept that they need an investor deck to contain an encyclopedia’s worth of information on a company they are interested in or already own. Many investors told us they prefer when management teams cut to the chase by prioritizing information to a few simple key messages and key slides.

It is interesting to note that at one of its upcoming fall conferences, one Canadian bank-owned broker asked corporate participations to provide just one slide! As this broker states in its invitation, the single slide should be used to “best illustrate any key items you would like investors to know.” While this is an extreme example, it is worth remembering how investor decks are used (or not) by corporate presenters and their audiences. In most cases, executives prefer to have focused conversations with investors. Decks that are too long are simply provided as collateral ‘leave behinds’ never to be actually presented.

Many IROs we spoke to segment their decks so that presentation-worthy material is confined to the first 10 slides (ideally with one message per slide). Beyond the first 10, other slides are included as ‘supplements’ within an appendix to be used by the audience following the management meeting. Working with your CEO to determine his/her top priority messages will improve the likelihood that the deck will be used as a speaking aid during focused chats rather than just as something to leave behind.

What’s the most important content to include in a core deck?

Opinions vary on this topic, but there are some common content elements (beyond forward-looking statements).

The first is what is referred to colloquially as ‘the money slide’. A money slide (often entitled ‘investment summary’) answers the question, why invest? In IPO decks, this slide appears at the front and again at the end of every deck based on the principle that repetition equals retention.

For companies that are not actively selling stock, the money slide should still be present (once is enough) and it should be carefully crafted – without platitudes – to create interest and frame the value proposition.

Since investment stories vary widely between companies and industries, it is difficult to provide one-size-fits-all advice on content beyond the money slide. However, investors and IROs suggest including messaging for core investor decks that communicates:

• your company’s vision, objectives and (available) market opportunity;
• the strategies you use to achieve your vision and generate growth/value;
• your company’s current market position versus your competitors and the positioning you hope to achieve;
• the key assets (capabilities) of the business and competitive points of distinction;
• recent strategic, operating and financial progress (with content borrowed from the quarterly webcast/update deck); and
• outlook and key risks/assumptions associated with that outlook (again borrowed from the quarterly webcast/update deck).

In preparing this information, remember that investors appreciate balance and will quickly tire of boastful, always rosy presentations. An admission of risks/weaknesses and content that discusses countermeasures adds credibility.  

Other content that is popular with investors includes case studies to illustrate strategies in action and slides that include logos of your customers. There are risks associated with providing this information, as inevitably investors will call a company’s customers to learn about the status of the relationship. Many customers also do not react kindly to finding their logos in a supplier’s presentation, so it is best to ask permission. 

Finding a way to adequately explain (the advantages of) the business model is also an important task. As one institutional investor put it: “If I’m looking at investing in an entertainment company, I want to know if it makes money screening movies or selling popcorn. If management isn’t clear about their sources of cash, how can I determine what’s important in looking at the business and its capabilities?”

Keeping a core deck to approximately 10 main slides allows for more attention to be paid within the IR department to carefully crafting each slide’s message. It also means it is relatively easy to keep the information current.

Overall, there is no getting around the fact that creating purpose-built investor presentations demands time and attention. By taking inspiration from other companies’ decks, applying creative thinking, keeping presented information to key investor-relevant topics and ensuring that quarterly webcast slides are designed to be ported over to other decks, your task becomes easier and the results will be better.

Where To Get More Information