FINANCIAL COMMUNICATION: FRAMEWORK AND PRACTICES - 2019 EDITION

62 DISCLOSURE OF QUANTITATIVE PROSPECTIVE FINANCIAL INFORMATION The disclosure of prospective quantitative information to the market by the issuer concerning its own outlook is optional and entirely at the issuer’s discretion. Such disclosures depend notably on the existing related business practices and specificities of a particular business segment. This type of information should be differentiated from estimated financial data relating to a past period (see Part 2, Section 2: “Disclosure of estimated financial data” ). The disclosure of quantitative prospective information is treated differently depending on whether it is being disclosed with periodic information or in a prospectus. Within the framework of periodic information Among the various types of prospective information it is necessary to distinguish between “objectives” and “forecasts”. This distinction was clarified in April 2000 by the report of the working group led by Jean-François Lepetit 101 , which indicated that “ objectives are a quantitative, concise reflection of the expected impacts of the strategy adopted by the managing bodies from a commercial (e.g., market share or revenue growth, etc.) or financial (e.g., return on capital employed, earnings per share, etc.) perspective.They express the company’s goals as defined by management based upon their anticipations of prevalent economic conditions, often expressed in normative form, and the resources that they have decided to employ”. The working group stated that “ in general, forecasts are the quantified conclusions of studies aimed at determining the total impact of a list of factors related to a future period (so called, assumptions) ” and notes that “ the disclosure of forecast results is generally the responsibility of financial analysts, as by nature such a task is based upon a high level of uncertainty, with results sometimes significantly differing from forecasts initially presented ”. In the case of financial data classified by an issuer as “forecasts” (versus “objectives”) in the registration document, they should be accompanied by a description of the underlying assumptions as well as a report from the statutory auditors. For universal registration documents – URDs, created by PD3 and intended to replace registration documents as of July 21, 2019, the statutory auditors will no longer have a report to issue. Should an issuer choose to disclose prospective financial data, it is general practice to communicate objectives and forecasts when disclosing half-yearly or annual results. In any case, an issuer may only communicate quantitative prospective information to the market on the condition that the reliability of the data has been checked internally prior to any communication in order to ensure the relevance of the information communicated and to avoid misleading the public on its forecast results. In accordance with the recommendations of the working group’s report on profit warnings, the 101 – Report on profit warnings dated April 6, 2000 from the working group created under the supervision of the COB and chaired by Jean-François Lepetit.