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    Business Spotlight Audio 7/2021
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    Erin Perry: Welcome now to our Talking Finance section, in which Business Spotlight editor-in-chief Ian McMaster talks about a topical financial subject.

    David Ingram: Yes, this time, Ian looks at a rather amusing topic — positive financial announcements and what they really mean.

    Erin Perry: Oh yes, that’s sounds like fun, David! OK, let’s hear what Ian has to say about that.

    Ian McMaster: We’re very used to politicians trying to put a to put a brave face on bad resultsgute Miene zu schlechten Ergebnissen machenbrave face on bad results. You know, on election day, when they come on TV and tell us just how brillianthervorragendbrilliant their awful results were. How, even though they lost by a to lose by a country mileeinen gewaltigen Verlust machencountry mile, the result was better than their wildest dreams, the best result they have achieved in 40 years or whatever, the start of an upwards trend and so on. 

    But, of course, it’s not only politicians who try to hide poor results behind positive words. I remember very well going with a colleague to the presentation of a company’s business results about 15 years ago, and the company spokesperson talked proudly about how, despite a difficult year, the firm had managed to increase its market shareMarktanteilmarket share. My colleague leaned over to me at this point and said, “when they start talking about market share, you know that things are bad”. And sure enough, sales — and profits — had fallen, but sales hadn’t fallen by quite as much as those of their competitors, so the spokesperson was trying to put a brave face on a bad year.

    More generally, when firms start talking about difficult market conditions, you know things aren’t good. Sometimes, this is indeed the real explanation — as, for example, in the past year with the coronavirus crisis. But sometimes, it’s simply a deflection???deflection from poor performance, as if external factors were to blame for internal failures.

    And often, it’s what is not said that is really interesting. If a company talks only about the growth in its sales revenueUmsatzerlössales revenues, this might be cover up for sth.etw. verschleierncovering up for a fall in — or lack of — profitability. When firms talk about going through a period of “consolidation”, this usually means that their business is going nowhere. And “negative growth” is, of course, a declineRückgangdecline and not growth at all. “Synergies” following mergerFusionmergers — of firms or departments — normally mean job losses, and when companies say they that have exceeded their expectations, this raises the question of how low those expectations were in the first place. 

    So the important thing with financial announcements is to be able to read between the lines — and listen to what is not being said.

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