Letter to shareholders

As I wandered through the 2013 annual statements of our leading logistics companies in search of financial insight, my curiosity turned for some reason to the letter to shareholders that often seems to kick such documents off.

Having spent my fair share of time drafting mission statements, vision statements and chairman’s statements explaining why the last year really wasn’t as bad as the numbers suggest, I was interested to see how industry leaders set the scene for the dry facts that follow.

Often, quoted companies seem constrained by the regulatory restrictions imposed on them; others limit themselves by choice.  Ceva‘s report dives straight into the meat, explaining that on 2 May 2013 CEVA completed a major financial recapitalisation. CEVA Holdings LLC (a company incorporated in the Republic of the Marshall Islands, of all places) became the new parent company of CEVA Group Plc and its subsidiaries.  In the circumstances I suppose one has to respect their fact-based approach.

Of the others I looked at the principal common theme was the essentially bland and frankly meaningless, sometimes almost cut-and-paste management-speak that too often pervades such documents – challenges, focus, efficiency and the like.  Here’s the earth-shattering contribution from the CEO of the industry’s leader, Deutsche Post DHL:

In today’s age, tailored logistics services are a key to success for companies in many industries. We are proficient in this business and are determined to offer every customer precisely the service they need to be successful. Doing this means facing a wide range of challenges,

I have no idea how many man-hours went into this prose but do they think anyone actually reads something like that?

K+N‘s chairman used an interview format to lead with:

With net earnings of CHF 607 million, Kuehne + Nagel’s result for 2013 marks a new milestone. It shows that our company has returned to its former strength. Our measures to enhance efficiency have proved effective, and I am particularly pleased that we have achieved such a positive result in a year that was challenging and characterised by uncertainty both from a macroeconomic viewpoint and from the internal perspective of the company.

I need to dig a little more into that ‘uncertainty… from the internal perspective of the company‘.

Panalpina took a very matter-of-fact approach:

In 2013, we were able to improve our result by CHF 80 million.  Whilst this is a positive improvement over last year, we still have much to do to reach the targets we have set ourselves. We are therefore focusing our organization into converting more of our considerable gross profit into net profit, in which our shareholders participate.

Good to see the acknowledgement that shareholders participate in net profit.  Of course, improving the result by CHF 80 million isn’t the same as making CHF 80 million.

But my personal award goes to Expeditors for their refreshing and very human statement:

2013 was a decent year, but not a great one.

Well done them!