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Guidance policy of index companies in Germany: Improvement of forecasting ability


cometis study on the guidance policy of all index companies in Germany shows: Overall improvement of the forecasting ability, clear backlog demand in the rear ranks


  • Forecasting ability of companies in the DAX, MDAX, SDAX and TecDAX improved significantly in the period under review
  • Ranking highlights: SAF Holland (SDAX) performs best across all indices, Continental leads DAX
  • cometis supports listed companies individually in analysing and optimising their own forecasting policy on the basis of a specifically created, comprehensive database of all forecast reports for the period from 2013 to 2016



Wiesbaden, 05 October 2017 – cometis AG, one of the leading consulting firms for investor relations and financial communications in Germany, has examined the reporting of all companies listed in DAX, MDAX, SDAX and TecDAX for the years 2013 to 2016 with regard to their forecasting ability. In the process the qualitative and quantitative information on future business development, which is regularly communicated by listed companies as part of their financial reporting, was analysed. The results of the study are equally pleasing for investors, analysts and investor relations managers: The transparency and accuracy of the forecast reporting improved significantly across all indices in the period under review.

Top of the class: Continental leads DAX in forecasting ability
Forecasts of business development are just as important for the investment decisions of the financial market players as historical results. Meaningful quantitative estimates for key performance indicators such as sales and profitability (generally EBIT or EBITDA) are favoured. These allow a better assessment of a company’s future prospects than purely qualitative statements. However, a good forecast is characterised above all by the fact that it is not changed during the course of the year and that it will be complied with at the end of the year. The capital market is mercilessly punishing nasty surprises. On a regular basis, profit warnings send the stock market prices of over-optimistic companies on the downswing due to non-compliant forecasts. Higher volatility in share price performance also has far-reaching consequences: it has a negative impact on the cost of equity and thus on market capitalization via the beta factor.
Phrasing the right prognosis often resembles a balancing act and is part of the high standard of capital market communication. According to the cometis Guidance Study, the management of SAF Holland, which is listed in SDAX, had the best hand in estimating future sales and earnings development across all index companies in the period under review. In DAX, the Executive Board of Continental AG was the most accurate. Dialog Semiconductor (TecDAX) and Steinhoff (MDAX) were the worst performers in the entire index universe; this applied to Commerzbank AG in DAX. In addition to forecast quality, the ranking also takes into account the percentage deviation of the forecast values from the final actual value and the number of adjustments made during the course of the year within the scope of quarterly reporting.

Tops and flops by indexes*

Use of inadmissible forecasting methods has dropped significantly
The improved forecasting quality is particularly evident in the declining use of inadmissible forecasting methods. These include purely comparative forecasts (example: “We expect to see an increase in revenues for the financial year 2017”) and qualitative forecasts (example: “We expect satisfactory revenues for the financial year 2017”). According to the results of the cometis study, the proportion of inadmissible forecasts for topline ratios such as consolidated sales fell significantly from 34% to 7% in the years 2013 to 2016, and from 39% to 11% for earnings ratios in the income statement. For investors, this development means greater transparency and planning certainty. For the management of listed companies, it is a challenge that arises anew every year.

Sales forecasts most popular
Analysis of the collected data also shows that more than 60% of the 160 index companies forecast sales in each of the four years considered. On the earnings side, the observed picture is more colourful: EBIT was the most frequently used financial ratio. EBITDA and the EBIT margin follow in second place.

Quality of communication is just as important as good figures
“Analysts and investors assess not only the bare financial indicators of a company, but also the planning skills of the management within the framework of forecasts. They expect a plausible and realistic guidance,” explains Henryk Deter, member of the cometis AG management board. He continues: “In order not to jeopardise credibility, the wording should be clear and understandable and carefully considered. cometis AG has been assisting listed companies in the analysis of their forecasting ability for many years and makes practical recommendations for improvement. Our comprehensive data material enables us to gain important insights. This enables us to support listed companies of all sizes and in all industries. Our experience shows that risks can be significantly minimized while simultaneously meeting investors’ requirements.”

cometis AG
Since 2000, cometis AG has been active as a consulting firm for strategic and operative financial communications. Our team of more than 25 employees consists of economists, journalists, business lawyers and designers. Our predominantly medium-sized clients benefit from our in-depth experience gained from more than 500 completed capital market projects. Over the past few years, we have successfully completed more than 25 IPOs. In addition, we managed the communication of our clients in numerous corporate finance and M&A transactions as well as in special situations. Our services range from the development of investor relations and communication strategies to the preparation of annual reports, presentations, announcements and websites. We also offer management coaching in preparation for meetings with investors, journalists and analysts. Through our membership in the “Public Relations Global Network” (PRGN), which unites more than 40 owner-managed PR & IR consultancies on all continents, we also offer our services on a global level.

cometis AG
Henryk Deter
Tel. +49 611 20 58 55 13
Fax. +49 611 20 58 55-66
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65195 Wiesbaden