Annual report survey 2023
- “Results of operations, net assets and financial position” (4.8 out of max. 5 points) and “outlook” (4.7 points avg.) are of highest priority for institutional investors and analysts
- “Management system“ (4.0 points avg.) and “sector-specific developments“ (3.7 points avg.) are also important sources of information for investment decisions
- Low relevance of “macroeconomic parameters” (2.5 points avg.) and “the share” (2.2 points avg.)
- Room for improvement in terms of content weighting and conception of financial reports
Hamburg, 20 October 2023 – The Hamburg-based financial communications consultancy Kirchhoff Consult AG has recently conducted the "Kirchhoff Financial Report Survey" for the first time. Renowned institutional investors and analysts were invited to evaluate which chapters of annual reports are most important for investment decisions. For this purpose, selected components of the annual reports were rated on a scale from 1 (unimportant) to 5 (important). In addition, all participants were asked for their opinion on potential improvements.
Jens Hecht, Managing Partner of Kirchhoff Consult AG: “The survey’s results confirm a general trend we have observed in annual reports in recent years. Companies are increasingly focusing on the description of their financial situation and outlook. Report components such as ‘the share’ or even ‘macroeconomic parameters’ have lost importance. However, the results also show that companies can still improve in their reporting – for example in terms of the description of non-financial performance indicators or a more condensed description of non-essential information.”
Highest relevance attributed to financial situation and outlook – focus also on management system and sector-specific developments
The institutional investors and analysts surveyed come to a clear conclusion: the content presented in the sections "results of operations, net assets and financial position" (4.8 points avg.) and "outlook" (4.7 points avg.) is the most relevant for them. This underlines that especially information on the financial situation of companies and a precise outlook about their future business development remain the basis for investment decisions. However, the chapters “management system” (4.0 points avg.) and "sector-specific developments" (3.7 points avg.) are also rated as relatively important.
In the future, particularly non-financial KPIs will gain become more important – not least because starting from 2025, the CSRD (Corporate Sustainability Reporting Directive) will become mandatory EU standard in sustainability reporting for large and capital market-oriented companies (see also Kirchhoff-DAX 160 study). Furthermore, in times of geopolitical tensions and inflation, information on the respective sector-specific developments appear to be relevant for investors to assess growth potential of companies.
Outlook: Room for improvement in terms of content and concept
To wrap up, the survey participants were asked to comment on possible improvement areas for future annual reports. The addressed institutional investors and analysts expect more precise financial outlooks, more detailed action plans on the ESG conformity of business models and a more compact presentation of the information provided. Thus, the survey indicates that room for improvement remains in terms of content weighting and the general conception of financial reports.
ABOUT KIRCHHOFF CONSULT AG
With around 60 employees, Kirchhoff Consult is a leading communications and strategy consultancy for financial communications and ESG in German-speaking countries. For over 25 years, Kirchhoff has been advising clients on all aspects of financial and corporate communications, annual and sustainability reports, IPOs, investor relations, ESG and sustainability communications. 'Designing Sustainable Value': Kirchhoff combines content expertise with excellent design to create sustainable value.
Kirchhoff Consult is a member of TEAM FARNER, a European alliance of partner-led agencies. Their common goal: Building the European management consultancy for integrated communication.
Learn more at: kirchhoff.de/en