Quarterly Report • Oct 30, 2024
Quarterly Report
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The Chairman of the Supervisory Board of Deutsche Börse AG, Martin Jetter, has informed the company that he will resign from his position as Chairman of
the Supervisory Board and Member of the Supervisory Board at the end of the Annual General Meeting 2025. The Supervisory Board of Deutsche Börse AG has started the selection process for Martin Jetter's successor. The new Chair of the Supervisory Board is planned to take over from the close of the Annual General Meeting 2025.
Deutsche Börse Group modified the allocation of net revenue within its segment reporting slightly with effect from the first quarter of 2024.
The Investment Management Solutions segment benefited from new customer wins in the Software Solutions unit in the third quarter of 2024. This included significant customer wins in the high-potential North American market for SimCorp's "one single platform" solution. Higher demand for ESG solutions in the ESG unit, particularly services for Governance Solutions, also resulted in higher net revenue.
The unexpected increase in interest rates in Japan in early August caused short-term volatility on international markets to rise significantly. Interest rate differentials between currency pairs narrowed as a result, reducing the profitability of currency carry trades. However, this increase in market volatility, as measured by the VSTOXX, only resulted in temporarily higher trading activity in equity index derivatives in the Trading \& Clearing segment, Financial Derivatives. Interest rate derivatives continued to see high demand from market participants given the ongoing uncertainty about central banks' next interest rate steps. The Commodities unit reported several new records in trading volumes for various power derivative markets in the third quarter of 2024, again underlining the stable trend towards on-exchange-traded and cleared derivatives.
Financial markets participants continued to focus on developments in key economic indicators on both sides of the Atlantic in the reporting quarter. The European Central Bank (ECB) responded to improvements in inflation data with an initial cut in key interest rates in the second quarter, and followed up in September with a further reduction in the deposit rate to 3.5 per cent. The US central bank, FED, also reacted to weaker economic signals in the third quarter with a significant cut of 50 basis points in its target rate to a range of 4.75 to 5.00 per cent. This particularly affected the Securities Services segment. A lower interest rate environment was offset by a volume effect due to
higher cash balances on average, which compensated for the interest rate effect in net interest income. Net revenue in the core business of Securities Services -custody and settlement - also increased due to higher global debt issuance and higher trading activity in bonds.
Against this backdrop, our net revenue in the third quarter rose by 18 per cent to $€ 1,403.9$ million (Q3/2023: $€ 1,188.3$ million), whereby all segments contributed to the Group's growth. A total of 9 per cent of net revenue growth stems from the acquisition of SimCorp. Organic net revenue growth therefore also came to 9 per cent.
Our operating costs of $€ 603.4$ million (Q3/2023: $€ 504.9$ million) saw an increase of 20 per cent. This was largely determined by the effect of the SimCorp acquisition of 18 per cent. The organic cost increase of 2 per cent resulted mainly from an inflation-driven increase, investments in growth projects and higher allocations to provisions for share-based payments. Costs of around $€ 10$ million for realising synergies are also included.
Our earnings before interest, taxes, depreciation and amortisation (EBITDA) increased accordingly by 17 per cent to $€ 801.8$ million (Q3/2023: $€ 684.8$ million). The result from financial investments, which is included in EBITDA, came to $€ 1.3$ million (Q3/2023: $€ 1.4$ million).
Amortisation, depreciation and impairment losses came to $€ 121.5$ million (Q3/2023: $€ 114.8$ million). The increase is largely due to intangible assets from the SimCorp acquisition, which were amortised from the fourth quarter of 2023 onwards and were not yet included in the prior year period. In addition, the previous year period included an impairment of approximately $€ 25$ million on intangible assets at Crypto Finance AG within the Trading \& Clearing segment.
Net profit for the period attributable to Deutsche Börse AG shareholders in the third quarter was $€ 444.9$ million (Q3/2023: €400.3 million). Earnings per share rose by 12 per cent to $€ 2.42$ (Q3/2023: €2.16) for an average of 183.7 million (Q3/2023: 185.1 million) shares. Earnings per share before purchase price allocations (Cash EPS) came to €2.61 (Q3/2023: €2.37).
Gregor Pottmeyer, CFO of Deutsche Börse AG, commented on the results as follows: "Our secular net revenue growth continued to develop positively in the third quarter, as expected. Even if the tailwinds from the phase of high interest rates are gradually slowing, we are looking at a very attractive core business with further significant growth potential. All the segments in our Group contributed to our success in the first nine months. Our expectations were exceeded,
especially in the Commodities unit and for net interest income. We now assume that we will again exceed the revised guidance for the full year 2024 and expect net revenue of around $€ 5.8$ billion, with EBITDA in a range of $€ 3.3$ to 3.4 billion."
Concerning the strategic outlook, Stephan Leithner, Co-CEO of Deutsche Börse AG, said: "We are right on track with the implementation of our Horizon 2026 strategy. The very good secular growth of our business units, together with the successful integration of SimCorp are clear signs of progress. We are working with great motivation and focus on implementing our strategy and are very confident of reaching our financial targets for 2026."
On pages 64 to 82 of its Annual Report 2023, Deutsche Börse Group comprehensively outlines the framework, strategy, principles, organisation, processes, methods and concepts behind its risk management, as well as measures it implements to manage or reduce risks. A detailed description of the status of current litigation can be found in the Annual Report 2023 on pages 223 to 226 and in the Half-yearly Financial Report 2024 on pages 13 and 14.
The scope and complexity of the sanctions imposed in response to Russia's attack against Ukraine in violation of international law are unparalleled, and increase the risk of control failures and breaches of applicable legislation or regulations.
The following material changes took place in terms of legal disputes and proceedings in the third quarter of 2024.
A buyer of an MBB Clean Energy AG (MBB) bond, which is held in custody by Clearstream Banking AG and was listed on the Frankfurt Stock Exchange, filed a lawsuit at a Dutch court concerning claims for damages of $€ 33$ million against Clearstream Banking AG, Deutsche Börse AG and other parties (see Annual Report 2023, page 225). The lawsuit was dismissed at first instance in October 2020 and on appeal in June 2024; the decision is final as to Clearstream Banking AG and Deutsche Börse AG.
The European Commission is investigating a possible violation of Art. 101 of the Treaty on the Functioning of the European Union (TFEU) and Art. 53 of the European Economic Area Agreement, among others by Deutsche Börse Group companies, in the area of financial derivatives. An inspection was
carried out on premise of Deutsche Börse Group in September 2024. Deutsche Börse Group is cooperating with the competent authority. Since the proceedings are still at an early stage it is currently not possible to predict their outcome, in particular in terms of timing, results and consequences.
Otherwise, the Executive Board has not identified any material change in the Group's risk position at the present time.
In view of the positive business performance in the first nine months of 2024 we expect to exceed our original guidance on pages 88 to 90 of the Annual Report 2023 for the year 2024. After raising the guidance at the half-year point, we now expect net revenue to increase to around $€ 5.8$ billion. Drivers include a high interest rate environment for longer than expected and ongoing strong secular growth in our commodities business. We expect earnings before interest, tax, depreciation and amortisation (EBITDA) to be within a range of $€ 3.3$ to 3.4 billion.
There have been no material events after the balance sheet date.
Consolidated income statement
| In $€ \mathrm{~m}$ | Third Quarter | First nine Months | ||||
|---|---|---|---|---|---|---|
| 01 Jul - 30 Sep | 01 Jan - 30 Sep | |||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |
| Sales revenue | 1,452.0 | 1,200.9 | $21 \%$ | 4,378.4 | 3,641.9 | $20 \%$ |
| Treasury result from banking and similar business | 252.1 | 246.0 | $2 \%$ | 788.1 | 732.7 | $8 \%$ |
| Other operating income | 6.8 | 3.5 | $94 \%$ | 19.8 | 26.8 | $-26 \%$ |
| Total revenue | 1,710.9 | 1,450.4 | $18 \%$ | 5,186.3 | 4,401.4 | $18 \%$ |
| Volume-related costs | $-307.0$ | $-262.1$ | $17 \%$ | $-905.6$ | $-761.3$ | $19 \%$ |
| Net revenue (total revenue less volume-related costs) | 1,403.9 | 1,188.3 | $18 \%$ | 4,280.7 | 3,640.1 | $18 \%$ |
| Staff costs | $-424.7$ | $-338.0$ | $26 \%$ | $-1,230.0$ | $-970.4$ | $27 \%$ |
| Other operating expense | $-178.7$ | $-166.9$ | $7 \%$ | $-538.9$ | $-459.2$ | $17 \%$ |
| Operating costs | $-603.4$ | $-504.9$ | $20 \%$ | $-1,768.9$ | $-1,429.6$ | $24 \%$ |
| Result from financial investments | 1.3 | 1.4 | $-7 \%$ | 13.4 | $-20.6$ | $-165 \%$ |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 801.8 | 684.8 | $17 \%$ | 2,525.2 | 2,189.9 | $15 \%$ |
| Depreciation, amortisation and impairment losses | $-121.5$ | $-114.8$ | $6 \%$ | $-367.2$ | $-293.1$ | $25 \%$ |
| Earnings before interest and tax (EBIT) | 680.3 | 570.0 | $19 \%$ | 2,158.0 | 1,896.8 | $14 \%$ |
| Financial result | $-43.4$ | $-11.0$ | $295 \%$ | $-123.1$ | $-30.4$ | $305 \%$ |
| Earnings before tax (EBT) | 636.9 | 559.0 | $14 \%$ | 2,034.9 | 1,866.4 | $9 \%$ |
| Income tax expense | $-168.2$ | $-144.1$ | $17 \%$ | $-522.2$ | $-497.0$ | $5 \%$ |
| Net profit for the period | 468.7 | 414.9 | $13 \%$ | 1,512.7 | 1,369.4 | $10 \%$ |
| thereof attributable to Deutsche Börse AG shareholders | 444.9 | 400.3 | $11 \%$ | 1,441.1 | 1,316.8 | $9 \%$ |
| thereof attributable to non-controlling interests | 23.8 | 14.6 | $63 \%$ | 71.6 | 52.6 | $36 \%$ |
| Earning per share (basic) (€) | 2.42 | 2.16 | $12 \%$ | 7.84 | 7.15 | $10 \%$ |
| Earning per share before purchase price allocations (Cash EPS) (€) | 2.61 | $2.37^{1}$ | $10 \%$ | 8.41 | $7.59^{1}$ | $11 \%$ |
1) Previous year adjusted, as impairments of intangible assets of Crypto Finance AG in the amount of €25 million were taken into account.
Key indicators Investment management solutions segment
| Third quarter | First nine months | |||||
|---|---|---|---|---|---|---|
| 01 Jul - 30 Sep | 01 Jan - 30 Sep | |||||
| in $\mathbf{~ K m}$ | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Net revenue | 294.9 | 174.7 | $69 \%$ | 898.9 | 496.5 | $81 \%$ |
| Software Solutions | 143.3 | 28.3 | $406 \%$ | 458.4 | 74.4 | $516 \%$ |
| On-premises | 52.6 | - | n.a. | 170.4 | - | n.a. |
| SaaS (incl. Analytics) | 53.9 | 28.3 | $90 \%$ | 172.6 | 74.4 | $132 \%$ |
| Other | 36.8 | - | n.a. | 115.4 | - | n.a. |
| ESG \& Index | 151.6 | 146.4 | $4 \%$ | 440.5 | 422.1 | $4 \%$ |
| ESG | 73.1 | 66.9 | $9 \%$ | 194.9 | 181.4 | $7 \%$ |
| Index | 51.0 | 48.9 | $4 \%$ | 153.4 | 151.0 | $2 \%$ |
| Other | 27.5 | 30.6 | $-10 \%$ | 92.2 | 89.7 | $3 \%$ |
| Operating costs | $-199.6$ | $-135.3$ | $48 \%$ | $-610.5$ | $-338.7$ | $80 \%$ |
| EBITDA | 96.9 | 38.3 | $153 \%$ | 289.7 | 147.7 | $96 \%$ |
Key indicators Trading \& Clearing segment
| Third quarter | First nine months | |||||
|---|---|---|---|---|---|---|
| 01 Jul - 30 Sep | 01 Jan - 30 Sep | |||||
| in $\mathbf{~ E m}$ | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Net revenue | 581.4 | 527.0 | $10 \%$ | 1,792.1 | 1,680.4 | $7 \%$ |
| Financial derivatives | 316.5 | 285.7 | $11 \%$ | 986.8 | 952.3 | $4 \%$ |
| Equities | 125.6 | 118.4 | $6 \%$ | 396.8 | 406.6 | $-2 \%$ |
| Fixed Income | 132.6 | 115.6 | $15 \%$ | 416.3 | 381.6 | $9 \%$ |
| Other | 58.3 | 51.7 | $13 \%$ | 173.7 | 164.1 | $6 \%$ |
| Commodities | 151.9 | 133.6 | $14 \%$ | 466.6 | 401.7 | $16 \%$ |
| Power | 74.8 | 56.4 | $33 \%$ | 229.6 | 170.9 | $34 \%$ |
| Gas | 22.3 | 22.6 | $-1 \%$ | 71.4 | 72.5 | $-2 \%$ |
| Other | 54.8 | 54.6 | $0 \%$ | 165.6 | 158.3 | $5 \%$ |
| Cash equities | 70.7 | 70.5 | $0 \%$ | 217.9 | 219.3 | $-1 \%$ |
| Trading | 30.8 | 29.7 | $4 \%$ | 99.0 | 96.7 | $2 \%$ |
| Other | 39.9 | 40.8 | $-2 \%$ | 118.9 | 122.6 | $-3 \%$ |
| FX \& Digital Assets | 42.3 | 37.2 | $14 \%$ | 120.8 | 107.1 | $13 \%$ |
| Operating costs | $-239.5$ | $-220.1$ | $9 \%$ | $-695.6$ | $-645.7$ | $8 \%$ |
| EBITDA | 342.4 | 307.2 | $11 \%$ | 1,110.2 | 1,028.0 | $8 \%$ |
Key indicators Fund Services segment
| Third quarter | First nine months | |||||
|---|---|---|---|---|---|---|
| 01 Jul - 30 Sep | 01 Jan - 30 Sep | |||||
| in $\mathbf{C m}$ | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Net revenue | 123.4 | 107.3 | $15 \%$ | 362.3 | 324.0 | $12 \%$ |
| Fund Processing | 65.9 | 53.5 | $23 \%$ | 188.9 | 157.8 | $20 \%$ |
| Fund Distribution | 23.0 | 19.4 | $19 \%$ | 67.4 | 64.0 | $5 \%$ |
| Net interest income from banking business | 15.2 | 15.3 | $-1 \%$ | 47.1 | 42.0 | $12 \%$ |
| Other | 19.3 | 19.1 | $1 \%$ | 58.9 | 60.2 | $-2 \%$ |
| Operating costs | $-56.5$ | $-50.1$ | $13 \%$ | $-158.2$ | $-150.8$ | $5 \%$ |
| EBITDA | 66.9 | 58.6 | $14 \%$ | 204.1 | 169.8 | $20 \%$ |
Key indicators Securities Services segment
| Third quarter | First nine months | |||||
|---|---|---|---|---|---|---|
| 01 Jul - 30 Sep | 01 Jan - 30 Sep | |||||
| in $\mathbf{C m}$ | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Net revenue | 404.2 | 379.3 | $7 \%$ | 1,227.4 | 1,139.2 | $8 \%$ |
| Custody | 161.4 | 150.6 | $7 \%$ | 490.7 | 462.5 | $6 \%$ |
| Settlement | 32.8 | 27.7 | $18 \%$ | 98.4 | 85.5 | $15 \%$ |
| Net interest income from banking business | 174.0 | 169.3 | $3 \%$ | 530.1 | 488.5 | $9 \%$ |
| Other | 36.0 | 31.7 | $14 \%$ | 108.2 | 102.7 | $5 \%$ |
| Operating costs | $-107.8$ | $-99.4$ | $8 \%$ | $-304.6$ | $-294.4$ | $3 \%$ |
| EBITDA | 295.6 | 280.7 | $5 \%$ | 921.2 | 844.4 | $9 \%$ |
Consolidated balance sheet (condensed)
in Em
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Financial instruments held by central counterparties
Other non-current assets
CURRENT ASSETS
Restricted bank balances
Financial instruments held by central counterparties
Other current assets
| 30 Sept 2004 | 31 Dec 2023 |
|---|---|
| 301,326.3 | 237,726.9 |
| 25,641.6 | 23,416.7 |
| 12,407.2 | 12,478.6 |
| 579.8 | 605.6 |
| 10,636.0 | 7,667.6 |
| 2,018.7 | 2,664.9 |
| 275,684.8 | 214,310.2 |
| 54,607.8 | 53,669.4 |
| 189,666.2 | 137,904.9 |
| 31,410.7 | 22,735.9 |
Consolidated balance sheet (condensed)
in Em
EQUITY AND LIABILITIES
EQUITY
Shareholders' equity
Non-controlling interests
Total equity
NON-CURRENT LIABILITIES
Financial instruments held by central counterparties
Other non-current liabilities
CURRENT LIABILITIES
Cash deposits by market participants
Financial instruments held by central counterparties
Other current liabilities
| 30 Sept 2004 | 31 Dec 2023 |
|---|---|
| 301,326.3 | 237,726.9 |
| 10,527.7 | 10,100.2 |
| 10,061.7 | 9,661.5 |
| 466.1 | 438.7 |
| 19,120.2 | 16,206.7 |
| 10,636.0 | 7,667.6 |
| 8,484.2 | 8,539.1 |
| 271,678.5 | 211,420.1 |
| 54,339.9 | 53,401.3 |
| 188,515.4 | 137,341.9 |
| 28,823.1 | 20,676.9 |
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www.deutsche-boerse.com/ir
22 October 2024
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Cautionary note with regard to forward-looking statements: This document contains forward-looking statements and statements of future expectations that reflect management's current views and assumptions with respect to future events. Such statements are subject to known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied and that are beyond Deutsche Börse AG's ability to control or estimate precisely. In addition to statements which are forward-looking by reason of context, the words 'may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue' and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those statements due to, without limitation, (i) general economic conditions, (ii) future performance of financial markets, (iii) interest rate levels (iv) currency exchange rates (v) the behaviour of other market participants (vi) general competitive factors (vii) changes in laws and regulations (viii) changes in the policies of central banks, governmental regulators and/or (foreign) governments (ix) the ability to successfully integrate acquired and merged businesses and achieve anticipated synergies ( $x$ ) reorganization measures, in each case on a local, national, regional and/or global basis. Deutsche Börse AG does not assume any obligation and does not intend to update any forward-looking statements to reflect events or circumstances after the date of these materials.
No obligation to update information: Deutsche Börse AG does not assume any obligation and does not intend to update any information contained herein.
No investment advice: This document is for information only and shall not constitute investment advice. It is not intended for solicitation purposes but only for use as general information.
All descriptions, examples and calculations contained in this document are for illustrative purposes only.
(c) Deutsche Börse AG 2024. All rights reserved.
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