Market Practice
Is there a consensus approach to communicating full year results in the SDAX and TecDAX?
Analysis
Competition for investor awareness
Listed companies compete for the awareness of similar investors. The publication of results plays a key role in creating transparency and engaging with investors and shareholders.
Good and accessible communication will not only consider the content but also the format and timing of presenting financial results.
Special role of full year financials
Full year results play a special role in the reporting cycle. The requirement for publishing audited results and an extensive annual report is time-consuming. Auditor availability and often strained internal resources require good planning and strong project management skills.
Index constituents are required to publish the annual report within 90 days of the cut-off date. But even after 90 days, the past year can look very distant and investor attention has already shifted to how the first quarter has performed and the challenges ahead.
Unless a company manages to issue audited full year financials relatively early in the year, it seems prudent to plan the publication of stable preliminary financials with the necessary depth and use the occasion to engage with investors and analysts.
No uniform approach
We have taken a look at how the 93 constituents of Germany’s SDAX and TecDAX deal with the publication of full year financials according to the companies’ published financial calendars.
Our analysis shows that there is no consensus approach to the financial calendars, the scheduled publication of preliminary figures or whether or not preliminary financials are followed up by an official investor and analyst call.
Approach to publishing prelims
Around 70% of companies in the SDAX and TecDAX report preliminary business figures. 44% of these companies provide detailed information.
The proportion of companies disclosing preliminary financial figures for the fiscal year is higher in the SDAX than in the TecDAX. While 73% of SDAX companies provide this information, only 60% of TecDAX companies do.
The opposite is true for the presentation of results, as around 37% of TecDAX companies host phone or video conferences for research analysts and investors, compared to around 24% of SDAX companies. More than half of the companies prefer to present after the release of the audited financial statements.
A more detailed analysis
Download the full report which examines the degree of detail in the published communications, as well as the role of phone and video conferences in the announcement of preliminary business figures. The analysis also takes into account the publication dates of the financial statements. The extent of communication is compared to the market capitalization of the reporting companies.
