“Feel good”, “good momentum”, “stable development”: the language used in financial reports and at analyst conferences of listed companies in Germany is becoming more positive. Optimistic phrases have become more frequent in the last three months, while negative ones have become rarer. Instead of “slow growth,” one now reads “attractive growth” more often - an indicator that companies see better growth prospects.
The SAFE Manager Sentiment Index reflects this growing optimism among DAX companies: it rises from -0.01 to +1.09 in March. The experts at the Leibniz Institute SAFE see strong annual financial statements as the main reason why management boards are also making optimistic statements for 2025.
SAFE Sentiment Index
“Such a strong increase in the index value shows that 2024 was a good year for many companies. Managers expect the positive trend to continue,” says Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE. Given the promising results, managers spoke significantly less about restructuring measures in the most recent earnings calls than at the end of 2024.
In previous years, the annual financial statements and earnings calls published at the beginning of the year already positively impacted the sentiment index. “This year’s increase in the SAFE Index by more than one standard deviation cannot be explained by seasonal effects alone,” adds Alexander Hillert, Professor of Data Science and Finance, “Our analysis of CEO and CFO statements shows that optimism for 2025 stretches across many sectors. After a potentially better-than-expected 2024, DAX companies are looking ahead with confidence”.
Top management anticipates good prospects for 2025
The SAFE Index is based on an automated text analysis. Alexander Hillert searches available transcripts and reports for two-word combinations with positive or negative signal words. In particular, the transcripts of analyst conferences drive the current increase in positive expressions. Phrases such as “strong financial,” “strong EBITDA,” and “good momentum” are frequently found in the statements of leading managers.
One manager said: “2024 has been an extremely successful year for [the company]. (…) First, we delivered a strong financial outperformance (…). […] As we look ahead to 2025, we are well positioned to build on our successes and continue delivering strong financial performance”.
Another member of a different company’s management board emphasized this company’s resilience: “Our strong financial performance in 2024 reflects our company's strength and makes us confident for our future”.
Technology, consumer and industry sectors drive the trend
Three sectors in particular have boosted the latest rise in sentiment: technology, cyclical consumer goods and industry. This becomes clear in statements such as „a very, very strong financial performance,“ “we expect this margin to remain broadly stable at around 43% also in 2025.", or „ [The company] has delivered a strong fourth quarter and full-year results despite a challenging macroeconomic environment, which demonstrates the resiliency of our business model."
Optimism prevails in the technology sector, mainly backed by strong demand and a positive business outlook. Consumer goods also benefit from stable demand. In the industrial sector, filled order books and efficiency gains create confidence.
The SAFE Manager Sentiment Index
The SAFE Manager Sentiment Index measures the monthly optimism or pessimism expressed by executives of publicly listed companies in Germany. Developed by Alexander Hillert and his team at the Leibniz Institute for Financial Research SAFE, the Index is based on automated text analysis that evaluates positive and negative statements in financial reports and analyst conferences.
The other scheduled release dates for the first half of 2025 are:
Wednesday, 9 April
Tuesday, 13 May
Wednesday, 11 June
