Deutsche Börse AG

Earnings Release • Feb 16, 2010

News Details

Ad-hoc | 16 February 2010 20:25

Deutsche Börse AG: Deutsche Börse publishes preliminary results for 2009 and announces further cost initiatives

Deutsche Börse AG / Final Results

16.02.2010 20:25

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by
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The issuer is solely responsible for the content of this announcement.

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Based on the preliminary figures published by the Company on Tuesday, sales
revenue fell by 16 percent in 2009 to EUR2,061.7 million (2008: EUR2,455.1
million). The decline was largely due to the reluctance of market
participants to trade on the cash and derivatives markets as a result of
the financial and economic crisis. Consequently, sales revenue in the Xetra
and Eurex segments declined considerably, whereas Clearstream's
post-trading activities and the market data business showed a relatively
stable development. Overall, the level of revenue seen in record year 2008
was not achieved; nevertheless, Deutsche Börse Group considers this
development to be further proof of the stability of its diversified
business model. In addition to sales revenue, the Group generated a further
EUR97.4 million in net interest income from banking business, 59 percent
less than the previous year (2008: EUR236.8 million). The decline was a
result of the drop in short-term interest rates, which fell to historic
lows in 2009. The Company booked an extraordinary gain of EUR66.7 million
in Q4 2009 in other operating income in the Corporate Services segment
resulting from the termination of a financial loss liability insurance
policy with capital formation. Post tax, this produces a positive effect on
the net income in the amount of around EUR47.3 million.

Total costs were significantly higher than the previous year at EUR1,680
million (2008: EUR1,284.0 million) due to the impairment charge relating to
the International Securities Exchange (ISE) of EUR415.6 million. Adjusted
for this extraordinary effect, total costs amount to EUR1,264.4 million,
down 2 percent on 2008. In addition to the ISE impairment, total costs
include further impairments in the amount of EUR17.8 million relating to
different software components in Q4 2009. The result from equity
investments at EUR-4.8 million was below that of 2008. An impairment of the
equity investment in Direct Edge Holdings, LLC of EUR27.0 million in Q4
2009 had a negative effect on the 'at equity' result.

Overall, Deutsche Börse Group thus generated EBIT (earnings before interest
and taxes) of EUR637.8 million - a year-on-year reduction of 58 percent
(2008: EUR1,508.4 million). Adjusted for the ISE impairment, EBIT amounted
to EUR1,053.4 million, a decrease of 30 percent compared to the prior year.
The net financial result for 2009 was EUR-79.7 million, reflecting in
particular interest payments in connection with the financing of ISE
concluded in 2008. The Group's effective tax rate was reduced to 26.9
percent in 2009 (2008: 28.5 percent) due to the relocation of employees to
Eschborn and adjusted for the tax credit in connection with the ISE
impairment. Non-controlling interests, through which profit and losses of
subsidiaries are shared with minority shareholders, increased from EUR-17.0
million in 2008 to EUR24.9 million in 2009. The increase was largely due to
the fact that the ISE impairment was borne in part by SIX Swiss Exchange
AG.

Net income for 2009 amounted to EUR496.1 million, as against the previous
year's EUR 1,033.3 million - a decrease of 52 percent. Adjusted for the ISE
impairment, this results in a decrease in net income of 32 percent to
EUR700.2 million. Basic earnings per share declined, based on the weighted
average of 185.9 million outstanding shares, by 51 percent to EUR2.67
(2008: EUR5.42 with 190.5 million outstanding shares). Adjusted for the ISE
impairment, this yields earnings per share of EUR3.77, which corresponds to
a decline of 30 percent year-on-year. The Group's operating cash flow
amounted to EUR4.31 per share compared to EUR6.71 the previous year,
confirming the sustained high earnings power of the Group.

In the fourth quarter 2009 Deutsche Börse reported a 17 percent decrease in
sales revenue to EUR505.4 million (Q4/2008: EUR609.0 million). Due to the
ISE impairment, costs amounted to EUR753.2 million (Q4/2008: EUR359.7
million). Adjusted for the ISE impairment, costs fell by 6 percent to
EUR337.6 million. EBIT in fourth quarter 2009 stood at EUR-166.3 million
compared to EUR322.5 million in Q4/2008. Adjusted for the ISE impairment,
EBIT amounted to EUR249.3 million, a decrease of 23 percent compared to the
prior-year period. Earnings per share in Q4/2009 stood at EUR-0.18 compared
to EUR1.19 in Q4/2008. Adjusted for the ISE impairment, Q4 EPS stood at
EUR0.92, a decrease of 23 percent compared to the same quarter the previous
year.

The Company's Executive Board decided today to streamline the Group's
management structure and to implement further cost initiatives with
sustainable cost savings totaling approximately EUR50 million per year.
With these steps Deutsche Börse accelerates its ongoing efforts to further
increase operational efficiency. At the same time, the Company will
increase its expenses for growth initiatives in 2010 by more than 50
percent to around EUR100 million. The cost initiatives will be started with
immediate effect and are due to be fully implemented by 2011. The Company
expects implementation costs of around EUR40 million, the majority of which
will be provisioned in the first half of 2010. The company reduces its cost
guidance for 2010 to a maximum of EUR1,250 million before taking into
account provisions for the cost initiatives of around EUR40 million. The
forecast includes a planned increase in expenses for growth initiatives of
more than 50 percent to around EUR100 million in 2010. In the context of
the restructuring and efficiency program Deutsche Börse Group already
gathered positive experience with the build up of the Prague location,
which already comprises around 250 employees. The possibility of relocating
further positions will be analyzed as part of a new location concept. Based
on that, the Company is considering further efficiency measures in the
framework of an initiative to optimize operational processes and
structures.

The Executive Board of Deutsche Börse AG proposes a stable dividend for
2009 of EUR2.10 per share. After adjusting for the non-cash ISE impairment,
this corresponds to a dividend payout ratio of 56 percent. Beyond the
proposed dividend, the company does not currently plan any distributions in
the form of share buybacks.

16.02.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: Deutsche Börse AG
Neue Börsenstraße 1
60487 Frankfurt am Main
Deutschland
Phone: +49 (0)69 211 - 0
Fax: +49 (0)69 211 - 12005
E-mail: ir@deutsche-boerse.com
Internet: www.deutsche-boerse.com
ISIN: DE0005810055
WKN: 581005
Indices: DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, München, Hannover, Düsseldorf, Hamburg, Stuttgart;
Terminbörse EUREX

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