The Art of Effective Earnings Calls: Insights from a Small Cap CEO

It is fascinating that the professionalism of earnings calls for some small cap companies like Toivo Group (TOIVO) is way more advanced than that of many of the world's biggest companies. Despite having smaller teams and more limited resources, these nimble organizations often deliver presentations that outshine their larger counterparts in clarity, engagement, and overall execution.

I sat down with Markus Myllymäki, CEO of Toivo Group, to understand how they've mastered the art of compelling earnings calls and quarterly webcasts. What I discovered was a thoughtful approach to quarterly webcasts that combines simplicity with attention to detail, proving that impressive results don't necessarily require massive budgets or dedicated departments. His insights reveal that with proper preparation and attention to detail, companies can deliver professional and engaging earnings calls without significant investment in expensive equipment or dedicated IR personnel.

The Role of Quarterly Earnings Calls

For small cap companies, quarterly earnings calls serve as natural checkpoints to engage with stakeholders. As Myllymäki explains, "The quarterly cycle is a clear and natural way to pause and say, 'Here's how we've been doing and here's how we see the future.' When you get that attention from existing investors four times a year, it's a logical place to focus your efforts."

While some companies publish press releases about new deals or developments between quarters, Myllymäki notes that for many small caps with steady business models that don't regularly announce large contracts, creating news between quarters can seem forced. The quarterly cadence provides structure to investor communications and ensures regular engagement.

Building and Measuring Audience Engagement

Attracting and engaging the right audience for earnings calls requires a strategic approach. Myllymäki describes their multi-channel strategy:

"In addition to making the official stock exchange release, we send personal invitations to our top 100 shareholders, publish announcements on LinkedIn, and create video teasers across our social media channels," he explains. "Each quarterly webcast is promoted through a consistent process that has become second nature to us."

He also recognizes the importance of adapting to changing consumption habits: "In this TikTok era, a full earnings call might be too long for some people. Creating short clips - cutting different segments from the full presentation and posting them separately - might be more effective in reaching people who aren't yet active shareholders."

• Number of live viewers during the webcast
• Views of the recording afterward
• Engagement with promotional content for the calls

This data helps them refine their approach and understand which content resonates most with different audience segments.

The Ingredients of a Quality Earnings Call

According to Myllymäki, several factors contribute to a professional and engaging quarterly webcast:

1. Efficient production - Small cap management teams have many responsibilities beyond investor relations, so streamlining the production process is essential.
2. Professional quality - Despite the need for efficiency, the presentation should maintain high standards of professionalism.
3. Visual presentation - Simple attention to details like camera framing, lighting, and backgrounds makes a significant difference.
4. Preparation - Well-prepared presentations with thoughtful transitions between speakers create a cohesive experience.
5. Interactivity - Q&A sessions with analysts and participants add value and engagement. Myllymäki emphasizes that this interactive element is crucial: "The more you can create interactivity and do it efficiently, the better. Q&A sessions with analysts and audience participation are important components that enhance the overall value of the presentation."

Myllymäki emphasizes that companies don't need expensive equipment to create professional-looking webcasts. For his company's presentations, they use a standard computer camera and lapel microphones. The quality improvement in their recent webcasts came not from investing in new equipment, but from paying attention to details like:

• Proper lighting (including a soft light in the background)
• Front-facing light for the presenter
• Appropriate camera framing
• Organized, professional-looking background

"With just a little visual awareness and attention to these details, you can create a much more professional impression without any additional investment," he notes.

Preparation: The Key to Success

Perhaps the most valuable insights from Myllymäki relate to his preparation process. Here's his approach:

1. Create compelling slides - "First, you need slides that excite you and your organization - content worth talking about."
2. Print physical copies - "I always print the slides on A4 paper. I have 12 quarters of presentations saved, and I typically review the past couple of presentations to see what I've highlighted previously."
3. Prepare opening statements - "For each slide, I write down an opening line to launch the discussion about that particular topic, whether it's market conditions or costs. After that introduction, the rest flows naturally."
4. Coordinate with team members - "When multiple people present, I write my own talking points and share with the CFO or business director what I'd like them to cover. This creates a cohesive presentation where our messages align."
5. Guide the viewer explicitly - "In a webcast, you need to clearly guide the audience: 'Now that I've finished discussing this slide, our CFO Samuli Niemelä will present the key figures. Samuli, please go ahead.' This explicit guidance is essential when presenters may be in different locations."

MENTAL Preparation

Beyond content preparation, Myllymäki also has a specific approach to getting in the right mindset.

"I don't believe in cramming slide content right before the event - presence is much more important than remembering every detail," he explains.

His pre-presentation routine includes:

1. Setting devices to airplane mode 15 minutes before the webcast
2. Taking a 15-minute walk about 30 minutes before the presentation
3. Focusing on positive topics with co-presenters prior to event to establish a good presence
4. "I approach it like preparing for a hockey game - getting into the right mental state"

Video vs. Audio-Only

While some companies opt for audio-only presentations with slides, Myllymäki believes video adds significant value:

"With your body and hands, you can emphasize your message. If someone prefers audio-only, they can simply not watch the video. But with video, you get the benefit of gestures, facial expressions, smiles - all of which add to the communication."

Effective Earnings Calls: Saving Time and Focus for Business Operations

Myllymäki offers a refreshingly pragmatic view of investor relations for small cap companies:

"A company has partially failed in its investor relations if it receives many inquiries from investors - it indicates uncertainty about where the company is headed. While it's nice that people are interested, numerous inquiries suggest weak investor communications."

By delivering quality presentations four times a year where executives "put their face and body on the line," companies can earn the freedom to focus on business operations for the next three months.

For his company, which doesn't employ a full-time IR person, the quarterly webcasts form the cornerstone of their investor communications strategy. Toivo has concentrated the majority of their IR solutions needs to us at Inderes, handling their IR website, press release distribution system, and earnings webcasts, creating an integrated approach that requires minimal management time.

"I'm a big proponent of freeing up organizational time and resources for business operations," he explains. "Having these services integrated means they work efficiently together, speak the same language, and present a cohesive, professional package to shareholders or potential investors."

Demystifying IR for Small Caps

Myllymäki challenges the notion that small cap companies need dedicated IR departments:

"I think too much mystique is built around IR. If your processes and routines are running smoothly, they can be incorporated into various job descriptions relatively easily. The errors typically come from disclosure mistakes in unusual situations, which can't be prevented simply by having more resources - the leadership needs to be alert."

He points out that his company already follows main list reporting standards while on the First North growth market, including IFRS reporting and full quarterly presentations, so the step up in communications requirements for moving to the main list wouldn't be that significant.

Conclusion

The insights from this interview suggest that effective investor relations, particularly quarterly earnings calls, doesn't necessarily require significant resources or dedicated personnel. Instead, it demands attention to detail, thorough preparation, and a commitment to clear, professional communication.

For small cap companies looking to enhance their investor communications, the key takeaways include:

1. Invest time in preparation rather than equipment
2. Pay attention to presentation details like lighting and framing
3. Create a structured approach to guide viewers through the presentation
4. Develop a pre-presentation routine that puts presenters in the right mindset
5. Consider an integrated approach to IR services to maximize efficiency
6. Focus on quality rather than quantity in communications

By implementing these practices, small cap companies can deliver professional, engaging quarterly presentations that build investor confidence while allowing management to maintain their focus on business operations.

See Excellence in Action

Want to see these principles applied in practice? Check out Toivo's quarterly report webcast here to observe how a well-executed earnings call looks and feels.

To create compelling earnings calls with efficient workflow, high-quality audience experience, and integrated teleconference and transcripts for your company, drop us an email. Our team of IR specialists can help you elevate your investor communications without adding complexity to your operations.