EUWAX AG — Earnings Release 2004

Jul 16, 2004

News Details

Ad-hoc | 16 July 2004 11:06

EUWAX AG raises profit forecast to 3,08 EUR per share for the current year…

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– EUWAX AG raises profit forecast to 3,08 EUR per share for the current year – Introduction of a cap of transaction costs to target medium-term an increase of transaction volume In the second quarter of 2004 the business development of EUWAX AG continued to perform well. However, the growth of profits decreased in the light of stagnating capital markets and declining transaction volumes. Nevertheless the company reached the second highest turnover and the third best net income historically. The higher than expected mid-year net income of EUR 10.0 millions and (61 % year-on-year), prompts EUWAX AG to lift the profit forecast for the full year 2004 to EUR 15.7 millions (+32 %) or EUR 3.08 per share. The estimations for the second half of 2004 are again based on conservative scenarios: – Restrained turnover at the German stock exchanges until the end of the year. – Earnings decline in commission fees, caused by the introduction of a cap for transaction costs in the trading of derivative products and stocks at EUR 12 per trade, beginning at the fourth quarter of 2004. This cap is not expected to generate related growth in turnover in 2004. – Higher administrative expenditures linked to new strategic projects (mainly for advisory and other services, IT and international business). Overview of key figures: Q2 Q2 Change 1st mid- 1st mid- Change 2003 2004 year 2003 year 2004 Earnings per EUR 0.76 0.79 2.8 % 1.24 1.97 59.2 % share (DVFA/SG) Earnings (000s) EUR 10,821 13,335 23.2 % 21,527 30,285 40.7 % Expenditures EUR 4,689 6,564 40.0 % 10,456 13,210 26.3 % Income from Ordinary EUR 6,132 6,772 10.4 % 11,071 17,075 54.2 % Activities (000s) Net income (000s) EUR 3,863 3,997 3.5 % 6,241 10,037 60.8 % Cash Flow (000s) EUR 3,771 4,115 9.1 % 6,507 10,273 57.9 % Equity EUR 52,022 63,108 21.3 % 52,022 63,108 21.3 % Return on Equity after tax % 20.1 25.0 24.4 % 20.1 25.0 24.4 % EUWAX Aktiengesellschaft, Stuttgart Harald Schnabel (CEO) Fon: +49 711 222989-210 Mail: harald.schnabel@euwax-ag.de Thomas Krotz (CFO) Fon: +49 711 222989-360 Mail: thomas.krotz@euwax-ag.de end of ad-hoc-announcement (c)DGAP 16.07.2004 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: Comments on Ad hoc-Announcement of EUWAX AG from July 16th 2004 The board of directors of EUWAX AG agreed to the introduction of a new pricing model for transaction costs (commission fees). This model will be implemented in the trading with covered derivatives (plain-vanilla-warrants, Knock-Out-products, exotic products, derivative investment products, equity linked bonds, ETF`s) and domestic stocks. New Price Model for transaction costs (commission fees) From October 1st, 2004, there will exist a maximum fee (cap) in transaction costs of EUR 12 per trade, in domestic stocks or derivatives. Former transaction costs are still valid below these cap: – Stocks included in the german stock index DAX(R) will continue to have a transaction fee of 0.4 per thousand of the market value if the volume is under the cap. – All other domestic stocks and derivative products have still transaction fees, for trades below the cap of 0.8 per thousand of the transaction value. The current minimum transaction fee per executed trade for domestic stocks and warrants will also stay in place. Strategy of value added for EUWAX AG and the new pricing model The implementation of the cap of transaction costs in stocks and warrant trading is an essential component for implementing the strategic goals of EUWAX AG. The company plans to establish itself medium term, together with Börse Stuttgart, as market place Nr.1 for private investors. In order to secure the leading market position, the company not only continues its efforts for leadership in innovations, in both services and technology, but is also trying to generate additional income out of attractive fee models. The capping of the transaction costs is completing our investor focussed market model. It is well described by: – Trading in shares of the german stock index DAX(R) without spread until 5.30 pm, in the mid of the Xetra(R)-range for an transaction volume of EUR 20,000 minimum per price fixing. – Fast order execution in covered warrants: already today almost 90 % of all orders are executed in less than 30 seconds and 50 % of the transactions are executed in less than 10 seconds. – Price corrections time lag is abolished. Trough the abolition of the price correction time, the order execution is now displayed to banks immediately after the price fixing (before after a time of 60 seconds). Active customers (such as daytraders) now have the ability to dispose faster of their holdings. – Since April 2004 EUWAX AG is publishing over the platform of Börse Stuttgart not only realtime quotes, but also tradable sizes at the EUWAX segment. Retail investors are now enabled to compare the liquidity between OTC and the higher liquidity of the stock exchange related trading. – About 25 % of all trades in derivatives are better executed than the published issuerquotes – Strict commitment to the exchange trading hours till 8 pm, with high-quality pricing, also after 5.30 pm. Impact on earnings situation of EUWAX AG For the earnings forecast of the second half of the year, a conservative setting is anticipating, that earnings after the introduction of the commission cap, even in the light of declining transaction costs for investors and issuers, will initially not pick up. However we expect, that a decline in earnings, in the course of 2005, will be compensated by a raise in the number of trades. Furthermore we assume, that fix costs will not advance. The change in running costs will hardly affect the net income. (R) Registered Trademark Deutsche Börse AG. ——————————————————————————– WKN: 566010; ISIN: DE0005660104; Index: Listed: Amtlicher Markt in München und Stuttgart; Freiverkehr in Berlin-Bremen, Düsseldorf, Frankfurt und Hamburg; Xetra 161106 Jul 04