Deutsche Börse Group shows strong growth in Q3/2019

Deutsche Börse AG published its results for the third quarter of 2019 on Monday. The Group generated net revenue of €733.8 million (Q3/2018 adjusted: €651.4) – a 13 per cent increase compared to the previous year. Secular factors accounted for 6 per cent of net revenue growth, with another 6 per cent attributable to the cyclical environment, especially temporarily higher equity market volatility, as well as 1 per cent to consolidation effects.

At €273.5 million, operating costs were up 10 per cent year-on-year after adjusting the previous year’s figures for the impact of IFRS 16. The increase was largely due to higher levels of investment, especially for growth initiatives, greater expenditure for share-based remuneration, as well as consolidation effects. Moreover, the level of operating costs was relatively low in the same quarter of the previous year. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) was €461.7 million and thus up 13 per cent year-on-year after adjusting the previous year’s figures for IFRS 16. Adjusted net profit for the period attributable to Deutsche Börse shareholders (hereinafter referred to as “net profit”) rose by 18 per cent, to €282.9 million (Q3/2018: €239.6 million). Basic earnings per share, adjusted for exceptional items, also rose by 18 per cent to €1.54 (Q3/2018: €1.30).

The Group generated net revenue of €2,179.4 million in the first nine months of 2019 (Q1-3/2018 adjusted: €2,030.0 million) – a 7 per cent increase. The company achieved secular net revenue growth of around 5 per cent, in line with its projections. Adjusted consolidated net profit thus amounted to €863.2 million (Q1-3/2018: €772.2 million). Basic earnings per share, adjusted for exceptional items, amounted to €4.71 (Q1-3/2018: €4.17) – up 13 per cent.

Gregor Pottmeyer, Chief Financial Officer of Deutsche Börse AG, said: “Solid double- digit earnings growth in the third quarter markedly accelerated the already positive growth trend seen in 2019 to date. We are therefore confident of meeting our full-year targets and confirm our guidance of around 10 per cent adjusted net profit growth for 2019.”

Results for Q3/2019

Net revenue for the third quarter of 2019 increased to €733.8 million (Q3/2018: €660.7 million). Excluding the non-recurring revenue from insurance services in the amount of €9.3 million during the same quarter of the previous year, net revenue was up by 13 per cent. With a growth rate of around 6 per cent, the contribution of secular growth initiatives was in line with the Group's expectations, with the Eurex (financial derivatives) and EEX (commodities) segments being the main drivers of this development. In addition to OTC clearing, secular growth of net revenue in the Eurex segment (financial derivatives) was mainly a result of new products and pricing models, whilst in the EEX segment (commodities), the positive development of the secular net revenue growth reflected significant market share gains in Europe and the US. Furthermore, the Qontigo (index and analytics business), 360T (foreign exchange) and IFS (investment fund services) segments also contributed to strong secular growth.

Cyclical factors also contributed around 6 per cent to the Group's overall net revenue growth. Increased trading activity in the derivatives markets saw a particularly positive impact upon financial derivatives revenue in the Eurex (financial derivatives) segment. Accordingly, the income from exchange licences in the index and analytics business (Qontigo segment) rose as well. Furthermore, the power and gas trading business in the EEX segment (commodities) benefited from higher trading activity in the core European markets. Net interest income from the banking business in the Clearstream segment (post-trading) also made a positive contribution, as it rose due to slightly higher interest rates in the US compared with the previous year and higher amount of US dollar cash deposits.

Consolidation effects – mainly resulting from the acquisitions of Axioma and Swisscanto – also contributed roughly 1 per cent to higher net revenue.

The reclassification of expenses due to the first-time adoption of IFRS 16 in 2019 impacted on the recognition of the operating costs and EBITDA, as well as on depreciation, amortisation and impairment, and on the financial result. 
Adjusted operating costs were up 5 per cent year-on-year, to €273.5 million (Q3/2018: €260.1 million). Higher investment (especially for growth initiatives), higher expenditure for share-based remuneration as well as consolidation effects more than offset the effects of the transition to IFRS 16, thus contributing to higher costs. Operating costs were adjusted for exceptional items of €46.0 million (Q3/2018: €29.0 million), mainly comprising costs for acquisitions, legal advice, and for measures to reduce structural costs launched within the scope of the "Roadmap 2020".

Deutsche Börse Group's adjusted EBITDA rose by 17 per cent to €461.7 million (Q3/2018: €395.1 million). Adjusted depreciation, amortization and impairment losses totalled €53.6 million during the third quarter of 2019 (Q3/2018: €43.8 million).
The Group’s financial result amounted to €–16.8 million in the third quarter of 2019 (Q3/2018: €–15.1 million). As expected, the adjusted tax rate in the third quarter of 2019 was 26 per cent (Q3/2018: 27 per cent). 

At €248.6 million, net profit for the period attributable to Deutsche Börse AG shareholders was up 10 per cent on the figure for the same quarter of the previous year. Adjusted for exceptional items, net profit for the period increased by 18 per cent, to €282.9 million (Q3/2018: €239.6 million).

Further information:
The consolidated income statement as well as the segment reporting for the third quarter of 2019 are attached.

Media Contact:
Martin Halusa
+49-69-211.12901