The ongoing economic crisis in Germany and many parts of the world is leading to new priorities in corporate governance. That is the result of a new analysis by Porsche Consulting of investor communication for DAX 40 companies. In 2024, resilience and financial stability were the most frequently mentioned investment arguments. The issues of cost reduction, cash flow and risk management also came into focus, while sustainability and growth have lost a lot of significance.
The strategic changes can be seen from the investor presentations and equity stories in which the DAX 40 companies regularly prepare key arguments for investors. The areas of sustainability and growth were still the focal points of investor communication in 2021. By 2024, sustainability was only mentioned about half as frequently in the investment arguments. In the same period, the frequency of the growth argument fell by much more than half. Corporate acquisitions – among the ten most common arguments in 2021 – were cited around 80 percent less frequently in 2024.
Crisis mode changes priorities
“German companies are currently operating in crisis mode. The focus on financial strength and resilience is necessary in the present situation to be able to counter risks and better manage crises in the medium term,” says Pschemyslaw Pustelniak, Senior Partner Strategy and Organization at Porsche Consulting. In order to remain viable, companies must adapt their strategy and cost structures. This includes reviewing and adapting the business model, structural optimization (e.g. production footprint), operational cost efficiency, optimized liquidity and working capital management as well as adapting the capital and financing structure. This applies not only to companies on the capital market, but to all companies.
Pustelniak advises balance: “Despite the crisis, companies should target investment towards strategic growth.” Even if the issue of sustainability is not the top priority for investors at present, it remains important for companies to be able to face the future. For instance, targeted divestments can be used to finance strategically important investments, such as in sustainability. These investments will contribute to securing future competitiveness, particularly by avoiding CO2 penalties.