Earnings Release • Apr 26, 2022
Earnings Release
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Deutsche Börse AG successfully placed a corporate hybrid bond in the amount of €500.0 million on 16 February 2022. The bond has a term of 26.25 years with a first call date after 6 years and a coupon of 2.0 per cent annually until June 2028. The hybrid bond will be used to refinance last year's M&A activities.
At the end of March 2022 Deutsche Börse AG expanded its offering in the data services space by acquiring Kneip Communication S.A. The companies have reached an agreement through which Deutsche Börse will acquire 100 per cent of the Luxembourg-based fund data manager.
Deutsche Börse AG successfully placed a corporate bond in an amount of €600.0 million on 29 March 2022. The bond has a term of 10 years and a coupon of 1.5 per cent annually. The proceeds from the issue of the bond will be used to refinance the corporate bond maturing in October 2022 and were received by Deutsche Börse AG by 4 April 2022.
On 31 March 2022 Clearstream Banking S.A. and Clearstream Holding AG successfully closed the sale of their respective 50 per cent stake in the European trade repositories REGIS-TR S.A. and REGIS-TR UK Ltd. to its joint venture partner Iberclear, part of SIX.
Deutsche Börse Group | Quarterly statement Q1/2022 Publication of results
To reduce the complexity of its financial reporting and emphasise the Group's growth areas more clearly, the segment reporting was adjusted in accordance with the internal corporate management as of the first quarter of 2022 (including the respective amounts for the first quarter of the prior year). The eight existing segments will from now on be condensed to four: Data & Analytics (including the Qontigo and ISS segments), Trading & Clearing (Eurex, EEX, 360T and Xetra segments), Fund Services (IFS segment) and Securities Services (Clearstream segment).
The first quarter of 2022 was overshadowed by Russia's war against Ukraine. The humanitarian consequences are shocking. The global fallout and resulting effects have been difficult to grasp so far. The first economic consequences have expressed themselves in the form of higher commodity prices, more difficult trading conditions and a redistribution of investments. In addition, the rapid spread of the Omicron coronavirus variant has subdued the economy's recovery and resulted in further restrictions and shortages, including in supply chains. Against this background, there was increased uncertainty among market participants, visible in the greater market volatility. The demand for trading and hedging in almost all asset classes therefore rose, which partly led to significantly higher trading volumes, especially in derivatives and commodities.
On this basis, net revenue in the first quarter of 2022 increased significantly to €1,061.6 million, which represents a year-on-year increase of 24 per cent (Q1/21: €855.1 million). The key driver of the cyclical net revenue growth of 11 per cent was the higher market activity across all asset classes in Trading & Clearing resulting from increased market volatility. In particular, index derivatives as well as power and gas products benefitted from the growing hedging demand among market participants. The secular net revenue growth of 8 per cent was particularly driven by product innovation in financial derivatives, an increase of market share in commodities, the growing demand for ESG-related products and the continued trend towards outsourcing in the fund industry. The M&A growth of 5 per cent is primarily attributable to the acquisition of Institutional Shareholder Services (ISS), which was closed in February 2021. The Securities Services segment also benefitted from the roughly €50 million gain from the sale of the remaining stakes in REGIS-TR.
Operating costs in the first quarter of 2022 came to €406.7 million (Q1/21: €346.5 million). On the one hand, this increase is a result of the M&A-related growth, particularly the acquisition of ISS. On the other hand, we have slightly increased our investments in growth and infrastructure due to the positive revenue development we are seeing. Based on constant currency, organic operating costs grew by 5 per cent.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose accordingly by 32 per cent to €687.4 million (Q1/21: €521.2 million). This comprises the result from financial investments at an amount of €32.5 million (Q1/21: €12.6 million). The increase results from disposals of smaller investments as well as the higher market valuation of the Illuminate fintech funds.
Depreciation, amortisation and impairment losses totalled €84.4 million (Q1/21: €61.7 million), with the change mainly stemming from the effects of purchase price allocation for acquired companies. The winding down of the buy-in agent service also produced a one-time write-down of self-developed software of €6.5 million. The financial result of –€8.8 million (Q1/21: –€13.9 million) includes a oneoff gain in the context of interest rate hedging.
Net profit for the period attributable to Deutsche Börse AG shareholders came to €420.8 million (Q1/21: €317.3 million), which is 33 per cent up on the same period of the previous year. Earnings per share were €2.29 (Q1/21: €1.73) for an average of 183.6 million shares. Earnings per share before the effects of purchase price allocation (cash EPS) were €2.40 (Q1/21: €1.81).
Gregor Pottmeyer, Chief Financial Officer at Deutsche Börse AG, commented on the results, saying, "The first quarter of 2022 was considerably above our expectations. All three growth components of our business – secular, cyclical and M&A net revenue growth – contributed equally to the extraordinarily good result. We are therefore currently expecting to exceed our guidance for the current financial year."
Deutsche Börse Group provides a full description of its risk management framework, strategy, principles, organisational structure, processes, methods and concepts, along with measures to manage and mitigate risks, on pages 73 to 109 of its Annual Report 2021. A full description of the current status of litigation is also presented on pages 84 to 87 of the Annual Report 2021.
In view of Russia's war against Ukraine and the measures taken in relation to it, the Group's overall risk position has not changed materially, except for increased holdings of collateral at the clearing houses. In terms of operational risk, the focus is on interpreting and implementing the specifications of various sanctions. There are financial risks resulting from the Ukrainian central bank's capital controls, e.g. with respect to cross-border payments, as well as from comparable countermeasures taken by the Russian government in response to the sanctions imposed by European and other governments. Relevant in this context are credit risks in combination with foreign-exchange risks from institutions in the affected countries. The Group actively manages all impacts that it is aware of and analyses potential new risks on an ongoing basis.
Otherwise, the Executive Board has not identified any material change in the Group's risk position at the present time.
Given the developments in the financial markets during the first quarter of 2022, we are now expecting significantly stronger cyclical net revenue growth for the current financial year compared to our original expectation. Thus, in comparison with the report on expected developments in the 2021 Annual Report we are currently expecting an increase in net revenue to more than €3.8 billion and an increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to more than €2.2 billion.
| First Quarter (01.01.-31.03.) |
||||
|---|---|---|---|---|
| 2022 €m |
2021 €m |
Change % |
||
| Sales revenue | 1,187.6 | 1,023.8 | 16 | |
| Treasury result from banking business and similar business | 60.3 | 34.6 | 74 | |
| Other operating income | 56.2 | 19.3 | 191 | |
| Total revenue | 1,304.1 | 1,077.7 | 21 | |
| Volume-related costs | –242.5 | –222.6 | 9 | |
| Net revenue (total revenue less volume-related costs) | 1,061.6 | 855.1 | 24 | |
| Staff costs | –285.3 | –228.5 | 25 | |
| Other operating expenses | –121.4 | –118.0 | 3 | |
| Operating costs | -406.7 | –346.5 | 17 | |
| Result from financial investments | 32.5 | 12.6 | 158 | |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 687.4 | 521.2 | 32 | |
| Depreciation, amortisation and impairment losses | –84.4 | –61.7 | 37 | |
| Earnings before interest and tax (EBIT) | 603,0 | 459.5 | 31 | |
| Financial result | –8.8 | –13.9 | –37 | |
| Earnings before tax (EBT) | 594.2 | 445.6 | 33 | |
| Tax expense | –154.6 | –115.8 | 34 | |
| Net profit for the period | 439.6 | 329.8 | 33 | |
| thereof attributable to Deutsche Börse AG shareholders | 420.8 | 317.3 | 33 | |
| thereof attributable to non-controlling interests | 18.8 | 12.5 | 50 | |
| Earnings per share (basic) (€) | 2.29 | 1.73 | 32 | |
| Earnings per share before purchase price allocations (Cash EPS) (€) | 2.40 | 1.81 | 33 |
| First Quarter (01.01.-31.03.) |
||||
|---|---|---|---|---|
| 2022 €m |
20211 €m |
Change % |
||
| Net revenue | 145.0 | 84.5 | 72 | |
| Index | 49.3 | 46.0 | 7 | |
| Analytics | 16.8 | 17.2 | –2 | |
| ESG | 51.1 | 14.7 | 248 | |
| Other | 27.8 | 6.6 | 321 | |
| Operating costs | –88.9 | –46.0 | 93 | |
| EBITDA | 54.5 | 38.2 | 43 | |
| 1) Institiutional Shareholder Services, Inc. was fully consolidated as at 25 February 2021. |
| First Quarter (01.01.-31.03.) |
||||
|---|---|---|---|---|
| 2022 €m |
2021 €m |
Change % |
||
| Net revenue | 556.2 | 461.1 | 21 | |
| Financial derivatives | 315.0 | 262.0 | 20 | |
| Equities | 148.5 | 118.7 | 25 | |
| Interest rates | 90.7 | 74.9 | 21 | |
| Margin fees | 21.2 | 18.4 | 15 | |
| Other | 54.6 | 50.0 | 9 | |
| Commodities | 112.5 | 79.5 | 42 | |
| Power | 53.6 | 45.3 | 18 | |
| Gas | 19.6 | 15.0 | 31 | |
| Other | 39.3 | 19.2 | 105 | |
| Cash equities | 97.5 | 93.2 | 5 | |
| Trading | 54.8 | 54.0 | 1 | |
| Other | 42.7 | 39.2 | 9 | |
| Foreign exchange | 31.2 | 26.4 | 18 | |
| Operating costs | –197.8 | –180.8 | 9 | |
| EBITDA | 393.1 | 293.7 | 34 |
| First Quarter | ||||
|---|---|---|---|---|
| (01.01.-31.03.) | ||||
| 2022 €m |
2021 €m |
Change % |
||
| Net revenue | 92.5 | 82.7 | 12 | |
| Fund processing | 54.0 | 49.3 | 10 | |
| Fund distribution | 21.0 | 16.5 | 27 | |
| Other | 17.5 | 16.9 | 4 | |
| Operating costs | –31.7 | –30.0 | 6 | |
| EBITDA | 60.7 | 52.6 | 15 |
| First Quarter | ||||
|---|---|---|---|---|
| (01.01.-31.03.) | ||||
| 2022 €m |
2021 €m |
Change % |
||
| Net revenue | 267.9 | 226.8 | 18 | |
| Custody | 139.8 | 126.0 | 11 | |
| Settlement | 30.8 | 38.2 | –19 | |
| Net interest income from banking business | 18.6 | 12.9 | 44 | |
| Other | 78.7 | 49.7 | 58 | |
| Operating costs | –88.3 | –89.7 | –2 | |
| EBITDA | 179.1 | 136.7 | 31 |
| 31 Mar 2022 | 31 Dec 2021 | |
|---|---|---|
| €m | €m | |
| NON-CURRENT ASSETS | ||
| Intangible assets | 8,412.5 | 8,162.9 |
| Property, plant and equipment | 591.5 | 593.7 |
| Financial instruments held by central counterparties | 9,325.6 | 9,442.4 |
| Other non-current assets | 2,559.7 | 2,263.4 |
| Total non-current assets | 20,889.3 | 20,462.4 |
| CURRENT ASSETS | ||
| Restricted bank balances | 83,339.6 | 78,542.0 |
| Financial instruments held by central counterparties | 117,107.8 | 103,195.7 |
| Other current assets | 27,987.4 | 20,719.3 |
| Total current assets | 228,434.9 | 202,457.0 |
| Total assets | 249,324.1 | 222,919.3 |
| 31 Mar 2022 | 31 Dec 2021 | |
|---|---|---|
| €m | €m | |
| EQUITY | ||
| Shareholders' equity | 7,855.9 | 7,193.6 |
| Non-controlling interests | 559.8 | 548.8 |
| Total equity | 8,415.7 | 7,742.4 |
| NON-CURRENT LIABILITIES | ||
| Financial instruments held by central counterparties | 9,325.6 | 9,442.4 |
| Other non-current liabilities | 4,631.0 | 4,180.5 |
| Total non-current liabilities | 13,956.6 | 13,623.0 |
| CURRENT LIABILITIES | ||
| Cash deposits by market participants | 83,089.8 | 78,292.5 |
| Financial instruments held by central counterparties | 116,565.8 | 103,267.7 |
| Other current liabilities | 27,296.3 | 19,993.8 |
| Total current liabilities | 226,951.8 | 201,554.0 |
| Total equity and liabilities | 249,342.1 | 222,919.3 |
Deutsche Börse Group | Quarterly statement Q1/2022
Publication of results
Investor Relations Phone +49-(0) 69-2 11-1 16 70 Fax +49-(0) 69-2 11-1 46 08 Email [email protected] www.deutsche-boerse.com/ir
Publication date
25 April 2022
Annual reports https://www.deutsche-boerse.com/dbg-en/investor-relations/financial-reports/annual-reports
Interim reports https://www.deutsche-boerse.com/dbg-en/investor-relations/financial-reports/interim-reports
Reproduction – in whole or in part – is only permitted with the written approval of the publisher
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