FINANCIAL COMMUNICATION: FRAMEWORK AND PRACTICES - 2019 EDITION

65 Should the issuer choose to include a results estimate in a prospectus, such an estimate must include a description of the underlying assumptions and a report from the statutory auditors (until July 21, 2019 in the latter case).The report certifies that the estimates were established on the basis of the said assumptions and that the accounting methods used are in accordance with those applied by the issuer for the preparation of its financial statements. PROFITWARNINGS A clear and consistent long-term communication strategy allows companies to avoid a situation where they have to urgently publish a profit warning to inform the market of a changed financial outlook. Nonetheless, despite companies’ efforts to improve the quality and frequency of their financial information, an issuer may find itself having to publish a warning to the market regarding a change in forecast profits. In its Guidelines on the Market Abuse Regulation, ESMA specifically indicates that a delayed disclosure of insider information that “ is different from previous public announcements or from the financial objectives communicated by the issuer or is in contrast with the market’s expectations based on signals that the issuer has previously sent to the market ” is likely to mislead the public. The AMF therefore recommends 103 that issuers take particular care to respect the obligation of disclosing insider information as soon as possible, when they observe that their expected results or performance measures: n will differ from the results or other performance measures expected by the market, even when the issuer has not disclosed its objectives or its forecasts to the market or when there is no market consensus; n and that these results or other performance measures are likely to significantly influence the price of the issuer’s financial instruments or the price of any related derivative financial instruments 104 . When the difference concerns only the economic assumptions used (e.g., exchange rate, different expectations regarding commodity price trends between the company and analysts), companies are not required to provide additional clarifications. However, if management decides that this difference arises as a result of an inadequate explanation of the company’s strategy, its own economic fundamentals or its degree of sensitivity to various external inputs, specific disclosure should be made in order to restore a satisfactory level of information about such events.That disclosure may be followed by an analyst meeting. Aside from the expected one-time explanation, this disclosure should also focus on qualitative and strategic items as well as detail the measures to be taken so that the market may assess the issuer’s ability to deal with events. 103 – AMF Position/ Recommendation no. 2016-08 – Guide to ongoing disclosures and the management of insider information (section 1.4.2). 104 – For an example of sanctions against an issuer in financial difficulty that failed to meet market disclosure obligations in a timely manner: see AMF Enforcement Committee, SAN-2017-06, June 20, 2017. Profit warnings: n TECHNIP n UBISOFT n ZODIAC n SODEXO