The Measured Language of Rough Sales
September 07, 23
There can be few indicators in the diamond world as compelling as De Beers rough sales.
The three figures between a dollar sign and the word "million" that are published every cycle provide a pretty good snapshot of the health, or otherwise, of the industry.
But the few sentences that accompany them, from CEO Al Cook or his predecessor Bruce Cleaver, take some decoding.
They say what they mean, but they're ever so measured.
Divorce the sales figures from the quotes in the two examples below and see if you can tell the good cycle from the bad (references to time/season have deliberately been stripped out).
Here's one: "De Beers Group rough diamond sales continued at a steady level. In line with normal seasonal trends, we anticipate that sales in the next few cycles will be affected by …"
And here's another: "With the prevailing economic environment leading to softer end client demand for diamond jewellery in key consumer markets . . . Sightholders continued to take a prudent approach to their purchasing…"
OK, so there I'll admit there is a difference, that the first is marginally more upbeat than the second.
But it's pretty nuanced. They don't immediately sound like they're describing a wildly different set of circumstances.
In the vibrant rainbow that is the English language, from red and orange all the way to blue and violet, what we're looking at here are shades of grey.
The first comment, from Bruce Cleaver last August, was in response to a 21 per cent increase in sales to $638m. Sales were, he accurately reported, continuing at a steady level.
The second was made by Al Cook last week after De Beers recorded its lowest sales since the Covid pandemic, down 21 per cent to a provisional $370m. Softer end client demand, he said. True. But flat.
It's in the nature of a journalist to engage the reader with words that carry impact. That's part of our training.
Execs who run a FTSE 100 company, and their press people, are, presumably, tutored to be more muted.
Date
| Rough Sales | Year-on-year | Demand | Sentiment | Economy |
Aug 22 | $638m | +21% | steady level | normal seasonal trends |
|
Oct 22 | $508m | +3% | in line with expectations | traditionally quieter time |
|
Nov 22 | $454m | -3% | good demand | traditionally quieter time |
|
Dec 22 | $417m | +22% | in line with expectations | prudent approach |
|
Feb 23 | $454m | -30% | performed well | cautious approach | some uncertainty over macroeconomic environment |
March 23 | $497m | -24% | continued steady demand | some positive trends | economic uncertainty |
April 23 | $542m | -4% | good demand | some encouraging positive trends |
|
May 23 | $479m | -20% | small decrease | seasonally quieter period | ongoing macroeconomic uncertainty |
June 23 | $456m | -31% | slightly softer | cautious | ongoing global macroeconomic challenges |
July 23 | $411m | -35% | lower level | cautious | ongoing macroeconomic challenges |
Aug 23 | $370m | -21% | softer end client demand | prudent | prevailing economic environment |
And so, as a not-entirely-serious guide, I have compiled the above table of key phrases from a year of CEO comments.
As you'll see, "slightly softer" demand is a term that can describe something as severe as a 31 per cent drop in sales, and "lower level" demand means "even worse than last month". Corporate lingo is like normal language, only less so.
The world's economy is not in great shape, as you may have noticed. So De Beers made some mention of this in February, noting "some uncertainty over macroeconomic environment".
Over time this appears to have escalated to "ongoing macroeconomic uncertainty", "ongoing global macroeconomic challenges" and "ongoing macroeconomic challenges", although I must say it's hard to discern which of these is worse.
What I do know is that when things are bad, buyers are "cautious". When things are very bad, they're "prudent".
And when they're really awful? I'm going to suggest "shrewd", "circumspect" or "let's get the hell out of here".
Have a fabulous weekend.