The stock market can be a bewildering place. It is full of conventions that have developed over the years. None more so than in the language brokers and company management use to communicate with shareholders. Never fear! I am here to (slightly cynically) translate the market lingo into plain English for you!
Translating trading updates
Broadly in line = not in line
Expectations moderated = expectations missed
Below expectations = at least a 10% miss
Materially below expectations = at least a 20% miss
Robust performance = sales are down
A focus on margins = sales have plummeted
Resilient performance = sales have collapsed
Adjusted Earnings = Earnings excluding everything that’s gone wrong
Adjusted EBITDA = a made-up positive number
Adjusted EBITDAR = things must be really bad
Adjusted LBITDA = trading is so bad we couldn’t even make up a positive number
Strong Balance Sheet = Weak Balance Sheet
As we said in our last… = As we tried to hide in our last…
Providing a solid foundation = surely things can’t go lower, can they?
Unusually strong H2-weighting = it'll take a miracle to avoid a profits warning
Translating company results
IFRS16 = all of our money is going to the landlord
IFRS19 = all of our money is going to the elderly
Banking covenant waiver = the bank manager is the boss now
Non-recurring costs = recurring costs we wished didn’t keep happening
Exceptional costs = costs associated with previous mistakes, especially if they can be blamed on former management.
One-off costs = One of many costs that make the results look better if we ignore them
Careful cost management = only the board received a bonus this year
Customer acquisition costs = discounting
Margin erosion = discounting
Investing in our customer proposition = discounting
Becoming price-competitive = discounting
Promotional activity = discounting
Mentions “stakeholders” = the equity has no value
Positive operational free cash flow = free cash flow is negative
Annually Recurring Revenue (ARR) = we are hoping to be valued on something other than our negligible profits or cash flow
GAAP earnings (US companies) = reality
Non-GAAP earnings (US companies) = make-believe
Translating management buzzwords
Quantum = size, but more pretentious
Teach-in = presentation, but more pretentious
Onboarding = hiring, but more pretentious
Over-index = above average, but more pretentious
Routes to market = sales channels, but more pretentious
Thought leadership – research,…
