Evidence-based financial communication to drive corporate value

Corporate presentation

Supported by

The language used is essential to bring across corporate communication in the right way

What corporate communication

practitioners can control

The essence of corporate

communication

The What

Set of facts A

B

The How

The way you

communicate the facts

Our focus

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Lack of evidence how language drives investor decisions

Source: Interviews with investor relations and corporate communication professionals

"Our communication is all about facts.

However, we face a lack of evidence on

how investors perceive it."

– Head of corporate communications

… lacks a clear

fact base

"Each executive has their own own

opinion of how investors process news."

– Head of investor relations

… is subjective

"We always face the same question: How

do investors perceive our language?"

– Head of investor relations

… leads to

unknown market

reactions

Usage of

language …

Concerns of corporate communication

executives

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We provide two solutions for capital market and corporate communication

Easy-to-use: add-in for Microsoft Word integrates seamlessly into text writing workflow

What it is

Words matter: accounts for the investor reaction on language

Volatile perception: regular updates to reflect changing investor perception of words

Words matter: accounts for the cognitive perception of language

Typical users

Investor relations Media relations PR agencies

(Social) media Marketing Management Internal coms PR agencies

Type of communication

Capital market &

investor

communication

Corporate &

marketing

communication

I

II

Focus of the

following slides

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2

We offer an add-in for Microsoft Word to enable an evidence-based capital market communication

1

We extract relevant words

from corporate press

releases

We calculate each word's

tonality reflecting abnormal

stock reactions on investor

updates

We enable you to alter the

Tonality and Readability of

your capital markets

communication with our

easy-to-use add-in for

Microsoft Word

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Our machine learning algorithms identify the tonality of words based on their effect in corporate disclosures

Corporate disclosures

of stock-listed

companies

Abnormal stock market

returns

Machine learning

algorithms

Dynamic tonality

dictionary

$$$

1

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Our add-in suggests the best wording for your corporate communication2

1

2

3

Based on more than 5 years of scientific research

Co-development with over 10 corporations and Investor Relations societies

Seamless integration into text development process

Regular dictionary updates assure insights on latest market developments

Academic & industry expertise Intuitive usage: No training required

Click the analyze button in the customized ribbon bar

Obtain immediate feedback on positive and negative words through text highlighting

Use the interactive dashboard for overall tonality and readability assessment and detailed statistics

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Simple text improvement through prioritized replacements…2

Highlighting indicates

tonality:

Red – Negative

Blue – Positive

Replacement

suggestions

sorted by

tonality

PDF and

email

reports

included

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… and built-in readability improvement support

Total readability

score

Interactive

readability

statistics for

each sentence

Highlighting of

active sentence

2

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Overall an intuitive and comprehensive tool to improve your communications2

Active selection Tonality analytics Readability statistics

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Academic research confirms that positive tonality leads to higher abnormal returns

Tetlock (2007) Negative news tone is a significant driver of lower stock returns

Academic

research

Our value

Better language leads to more positive stock market returns

Positive tone yields about 2% higher abnormal return

At a market cap of USD 10 bn, this means USD 200 mn in additional stock valuation

Firms with positive language have 130% higher unexpected earnings 10 quarters after a new release than those with negative language→ “Impact of negative words on cumulative earnings is permanent”

Tetlock (2008)

Better tone leads to higher abnormal returns and better analyst forecasts

Liebmann (2012)

Siering (2013) Media tone with positive effect on returns

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Our solution supports drafting powerful corporate communication, while driving corporate value

1Enhance the readability to facilitate the ease of

understanding messages

Steer tonality to assure a positive perception of

your company by investors2

Drive corporate value: improved communications

achieve a better stock price performance3

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Our solution enables evidence-based corporate communication

Drive corporate

value

Anticipate investor

reactions

Enable evidence-based

communication

Optimize company

communications to improve

market valuation

Understand how investors

incorporate language into their

decision making

Succeed in corporate

communication through our

innovative solutions

Contact us at contact@tonality.tech

Visit our website www.tonality.tech

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