The Top 10 Latin American Annual Reports

1. Cemex
Overall Score: 4.460
Corporate Review Section: 4.202
The Financials: 4.389
Graphics/Overall Presentation: 4.333
Website as IR Tool: 4.917

For the third-year running, Cemex has been able to sustain its great performance on its annual report to come out on top. Cemex is the world’s largest cement trader, holding leading positions in most Latin American countries with a compound annual growth rate for operating cash averaging 26% over the last 10 years. The historical “file” that makes up the first half of the report is all about why: “why cement,” “why Cemex is different” and “why cement’s future is Cemex.” The solutions given are simple and enticing, driving the main point home…because Cemex is the best.

The judges praised the report as “exceptional” and for being the most “professional and complete,” deserving of the first place it attained. Judges classified the web page as of great interest and the interface as very user friendly. As one judge commented, the information provided on it is “extensive and well presented.” The file design inside is innovative and helpful.

The graphics were rated as “slick,” almost “too much so for an annual report,” yet the design and layout were pleasingly stylized. The overall information content was well written and thorough.

It is overall the best again this year and although deservingly so, as one judge said, “the silver cover is just too much.”


2. FEMSA
Overall Score: 4.328
Corporate Review Section: 4.179
The Financials: 4.750
Graphics/Overall Presentation: 4.083
Website as IR Tool: 4.300

FEMSA, the beverage company, clinched a close second again this year with an all around great report that gives a clear impression of the company’s development over the last year. The annual report’s cover portrays growth through communication, with a tree representing the business linking up to the world by its roots. The concept is well-developed throughout, portraying an efficient, responsible business. The report is backed with a strikingly good amount of data. FEMSA is also frank about its prospects, admitting the company is subject to future events and uncertainties.

The report conveys its information in a very professional manner, foregoing the excessive designs of others to provide a clear and informative report. The graphs have, as one judge said, “a warm, human feel” that gets the message across without confusion. The six years of historical financial data gives a good overview and perspective of the company’s future, covering all business operations thoroughly. The layout is spacious with multiple background images emphasizing the points stated. Judges rate the website as outstanding, but said there is still room for improvement on some aspects such as design and speed.



3. Compañía Cervecerías Unidas
 Overall Score: 4.185
Corporate Review Section: 4.071
The Financials: 4.083
Graphics/Overall Presentation: 3.833
Website as IR Tool: 4.750

The imposing cover gives way to a very good annual report from Compañía Cervecerías Unidas, a major Chilean beverage company. The cover is cleverly designed showing a map of Latin America with a beer being poured into it. Like the report, it is direct, getting the message across right from the start. It has a good historical section portraying the development of the company since 1902. The design is well thought out, subtly complex yet also easy to read. It maintains great consistency with the change of subject matter, with each sector of the business (beer, wine, soft drinks and water) separated by a colorful, pertinent design.

The judges have all passed this report off as one of the best, as it has more information than typically found in an annual report, with charts and tables to clarify information where necessary. The judges gave special recognition to the exceptional discussion on market position and strategy. The illustrations and photographs give a clear understanding of the company’s products. Although many judges could not access the web page due to technical problems on the site, the few that eventually did said it was “nice, effective and not too complicated” with great details such as PDF files for the last three annual reports.



4. DESC
 Overall Score: 4.148
Corporate Review Section: 4.214
The Financials: 4.528
Graphics/Overall Presentation: 4.417
Website as IR Tool: 3.433

“DESC,” the title of the annual report leaves no room for speculation, it goes straight to the point, and also straight into the top five. It has a basic layout embellished by a “visually pleasing” futuristic design. The initial display of full-color graphs, tables and photographs is impressive, and as one judge put it, the illustrations “enrich the reader’s understanding of the organization;” although another thought it was slightly “overdone.” The images are concentrated in the front part of the annual report, leaving the last sector somewhat bare-looking. Despite this, the report is very professional and comprehensive, going into the auto parts, petrochemicals, diversified products, food and real estate sectors in turn, giving a fair amount of information on each one.

The Mexican company’s report content is outstanding, well- prepared and well-presented, clearly separated from the initial flashy style in the first sector by taking on a more serious tone. The letter to shareholders, however, could have been clearer, and there is a lot of wasted space that could have been put to better use. One judge gave the example of the front and back covers, saying they should have been used more profitably.

The web page left several gaps in its information content, and overall the virtual edition of the report was missing financial data further back than the past two years to give a more generalized perspective of the situation.



5. Transportadora de Gas del Sur SA
Overall Score: 4.133
Corporate Review Section: 4.000
The Financials: 4.542
Graphics/Overall Presentation: 4.042
Website as IR Tool: 3.867

The Argentine company, Transportadora de Gas del Sur SA, has managed to make its 1999 annual report one of the top five using a very simple approach, and wasting no money on fancy designs. Instead, its resources were poured into developing content. The report is concise and clear, with no frills to stop the message from getting across. The approach is straightforward, making it stand out from the rest for its pure simplicity. The writing is explicit and to the point, the company’s ideas focused, the information level high, and the photographs pertinent. As one judge said, “economic conditions are described openly, while maintaining a positive attitude and discussing initiatives and opportunities for investment.” Others agreed, feeling the report should get one of the top scores for the financials. The US GAAP information was very useful.

TGS’s one failing was its website. The Internet version of the annual report worked very slowly, if at all, although when it did, the content was very clear. Overall, the feeling was of a professional job well done text-wise, but lacking the enticing design to back it up.



6. Aracruz Celulose
 Overall Score: 4.057
Corporate Review Section: 3.893
The Financials: 4.583
Graphics/Overall Presentation: 3.083
Website as IR Tool: 4.667

There was a certain amount of controversy over the Brazilian paper and pulp company’s annual report. Different judges had different thoughts about its design. It is made of a thick, undulated orange and white paper (changing to yellow and blue in the second half of the report) with black and white photos. Some said it was very appropriate for a pulp producer, and made it one of the best reports for design. Others, however, disliked the paper’s texture, finding it unpleasant to the touch. The greatly contrasting colors did not go down well with some judges. Most thought the company could have made the photos more informative.

All the judges agreed on one thing: the information provided was well-planned, concise and clear. This discipline showed in the presentation of the financials, where the report scored as one of the highest. The report was rated overall as highly professional and very informative, containing an extensive amount of financial data. One of the judges said that the report was a “pleasure to read.”

The website was easy to find and its content thorough, and the judges ranked it as one of the best web pages of the group.


7. IRSA
 Overall Score: 3.975
Corporate Review Section: 3.857
The Financials: 4.292
Graphics/Overall Presentation: 4.125
Website as IR Tool: 3.625

IRSA’s annual report is impressive, the design excellent, merging innovation with style and creativity-just the type of report expected from a real estate company. It is artistic and informative, the layout makes it very readable, but it is a touch too long. The surfeit of data made reading very time-consuming. It is almost too complete; there is simply too much information to take in and digest. It is, however, very valuable to investors as a source of information with its excellent financials. One judge, however, commented that it would be better if it contained more “historical information about the evolution of the real estate markets in which they operate.” The cartoon-style map on the inner cover, portraying IRSA’s properties in Buenos Aires, is a nice detail.

The web page, however, is very complete and easy to find, as well as fast and efficient. Many judges commented on the usefulness of the easily-downloadable 20F file on their website, although browsing through it was slowed down by the heavy content of the annual report.



8. Panamerican Beverages Inc.
Overall Score: 3.935
Corporate Review Section: 3.810
The Financials: 4.444
Graphics/Overall Presentation: 3.444
Website as IR Tool: 4.042

The main slogan for the Coca-Cola distributing firm, Panamco, is “doing the right things…” yet it has fallen two positions from last year’s contest. Actually it is a good report. It separates the different regions where it operates using a spacious design, making the highlights of each region easy to remember.

The report is illustrated with clean, clear photographs of the soft drinks it produces, adding a little more colorful information, while the graphics are smooth and easy to read. One judge praised the chairman’s “excellent” letter saying it was one of the best they had ever seen. Another commented on its presentation saying it was “friendly” particularly to US investors and institutions due to its “American-style design.” This report gets its message across in a very professional, even clinical manner.

The website is attractive, although it does not provide updated stock quotes. Other data is easily accessible, although hard to read, and the timeline is also good.


9. Grupo Financiero Bancomer
Overall Score: 3.920
Corporate Review Section: 3.762
The Financials: 4.306
Graphics/Overall Presentation: 3.444
Website as IR Tool: 4.167

This year’s report is certainly innovative. It incorporated a whimsical touch by using children’s drawings from the bank’s “Bancomer en la Educación” program. One judge said that using this detail “made a nice change from the usual industrial site pictures,” especially since they included the young artists’ names. The design was superb, and the charts supporting the report conveyed the information clearly and precisely.

One expert praised the letter from the chairman and chief executing officer of Grupo Financiero Bancomer saying, “It does a good job of describing conditions as a context for the company’s performance,” and also that the franchise discussion should “appeal to professional investors.” Another judge appreciated the report’s presentation of eight years of per-share data and thorough financial information.

The web page’s layout is good and the report could be downloaded easily from the bank’s website, although it was directed more at people wanting to print it rather than read it on the screen. The overall impression was a good, strong, all-around effort.



10. Companhia Cervejaria Brahma
Overall Score: 3.918
Corporate Review Section: 3.629
The Financials: 4.242
Graphics/Overall Presentation: 4.133
Website as IR Tool: 3.667

The judges felt the Companhia Cervejaria Brahma’s 1999 report was a little too over-emotional and self-congratulating. However the report does an excellent job of explaining the business and the factors influencing Brahma’s good results. As one judge said, the historical background of the last 10 years of the company is very good and “shows the strength and success of the management team.” Yet as another judge pointed out, “It was very strange to see a company that has just merged with another to create one of the largest in Latin America reviewing the last decade.”

The judges tended to think that the report tried so hard to emphasize success that, as one judge put it, it verged on “overkill.” It got the message across, but too many times and on too many pages. Still, a judge said the report was “loaded” with good information. Judges said the text was the best of all the reports they had seen.

Brahma’s website is well designed and meets all the basic needs with additional background information. It is fast and simple to navigate and the information is complete, containing access to SEC filings, which almost none of the other websites do. However the design could be improved to maximize efficiency.