Abstracts from DIRF webinar: Coronavirus – How to give guidance in uncertain and rapidly changing times

  • Amit Sanghvi, Managing Director, Q4 Europe – moderator
  • Introduction and background information on legal issues
    Thomas Holst Laursen, lawyer/partner, Plesner
  • Considerations and course of action at Carlsberg
    Iben Steiness, Director Investor Relations
  • Considerations and course of action at A.P. Moller-Maersk
    Maja Schou-Jensen, Senior Investor Relations Officer

The event was organized in replacement of the usual members’ meetings as we remain committed to delivering high quality services for our members during this difficult time. The moderator gave a brief introduction to DIRF’s very first online webinar coordinated in cooperation with Q4 and Livehouse Europe.

In his opening, Thomas Holst Laursen stressed that the objective of his presentation was not to give a legal scope but rather to focus on whether to suspend guidance or not to take this path. Thus, setting the scene, Thomas started out with some facts and instructions from the Danish FSA (Finanstilsynet) to the key questions. What is the basis of the confirmed guidance, qualitative guidance or none at all? There are several angles to cover before deciding how to address the problem. Especially, IR has the task to keep all stakeholders informed to guide the market. Many investors and the community are generally accepting the challenges for the issuers provided, they give good guidance.

According to the Danish FSA it is important to note that when issuers can forecast, they should disclose guidance. Market expectations and regulators opinions follow each other on this point.

Choices and decisions on the matter are not easy, but Thomas gave an overview of pros and cons of suspension. Some issuers cannot give any indication of when their respective markets will re-open and thus cannot give guidance on their business – this is not the same as not wanting to give guidance. But important to try and offer the market an indication on direction and guidance in Q1/next reporting. Regardless on the chosen approach, you will have inside information on how the financial results have developed in the next reporting you which are important to report and give guidance on.

Carlsberg approach

Full-year results were announced in early February at which time the virus was isolated to China. Still, Carlsberg gave guidance which included some assumptions on Coronavirus implications though impact from China market seemed to be very limited. Two months later this guidance was suspended as the assumptions were no longer valid. Instead, focus is on financial topline consequences and impact on cash, CAPEX, working capital and liquidity. Also, what was done to offset the implications by reducing costs though it was stressed that there are no financial problems. Very positive reactions from analysts and the market to the approach.

A.P. Moller-Maersk approach

When announcing the full-year report, the crisis was still limited to China but contrary to Carlsberg this is quite a big market to APM, and they tried to compare the crisis to SARS in their approach which was the only comparable situation known. One month later it was necessary to send out a partial suspension of the full year. Freight rates are the single biggest factor on both top and bottomline. A direct cost is the fuel price which is very volatile and therefore close to impossible to predict full year, but a Q1 trading update will be issued including information on supply/demand – how will it develop. The analysts have not been as positive in their response, but the market understands in general the challenges. If given guidance it would include so many disclaimers and uncertainties that it would still be very difficult to estimate risks.


Narrowing guidance is not inside information according to Plesner, however expanding guidance would be. In the absence of guidance, it is noted that both Carlsberg and APM tried to educate the market on the KPIs and benchmarking included in their communication including strategies and tactics chosen for navigating through the crisis. Including management tactics regarding balance sheet as it is important to communicate year-to-date to the extent possible. Important to note that you can only cut costs to a certain extent without harming the long-term business. Provide only insight into what you can control and consider that transparency history can be helpful.

The shipping industry (APM) has very different dilemmas to cover as it is mostly driven by supply and demand. Compared to many others in the industry, APM is in quite good shape and is well consolidated, but very important to communicate that to the market. The biggest challenge to both issuers is what to do next.