Deutsche Börse AG has just published its results for the first quarter of 2018 on Wednesday. The company generated net revenue of €691.6 million, an increase of 11% compared to the previous year (Q1/2017: €623.4 million).
Deutsche Börse thus achieved secular net revenue growth of approximately 7 per cent, in line with its projections. In addition, cyclical effects such as increased equity market volatility and higher key interest rates in the US boosted net revenue.
At €254.5 million (Q1/2017: €245.1 million), adjusted operating costs were up 4 per cent year-on-year. The increase was primarily due to additions to provisions for variable and share-based remuneration, as well as consolidation effects. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) stood at €438.1 million, up 15 per cent on the previous year (Q1/2017: €380.2 million). Adjusted net profit for the period attributable to Deutsche Börse AG shareholders (hereinafter referred to as “consolidated net profit”) rose by 17 per cent, to €270.7 million (Q1/2017: €232.2 million). Basic earnings per share, adjusted for non-recurring effects, amounted to €1.45 (Q1/2017: €1.24).
Gregor Pottmeyer
Gregor Pottmeyer, Chief Financial Officer of Deutsche Börse AG, commented:
In the first quarter of 2018, both sustained structural growth and an improvement in the cyclical environment led to significant growth in net revenue. Moreover, we once again demonstrated the high scalability of our business model and were able to increase consolidated net profit over-proportionally by 17 per cent. Therefore, we are currently clearly ahead of the minimum 10 per cent net profit growth target for 2018.
Q1/2018 results
With effect from the first quarter of 2018, Deutsche Börse Group introduced a new segment reporting structure designed to highlight the Group’s growth areas and to further improve transparency. Instead of four business segments, as before, reporting is now split into nine segments. Besides the current Eurex, Xetra and Clearstream segments, the following four business areas will be disclosed separately going forward: EEX (commodities), 360T (foreign exchange), IFS (investment fund services) and GSF (collateral management). Furthermore, the former Market Data + Services segment has been split into STOXX (index business) and Data.
Net revenue for the first quarter of 2018 increased compared to the same quarter of the previous year by 11 per cent to €691.6 million (Q1/2017: €623.4 million). With the exception of the GSF segment, all reporting segments grew, in some cases significantly. The highest growth rates were achieved in the STOXX, Xetra and EEX segments. Net interest income from banking business rose markedly, to €40.9 million (Q1/2017: €29.9 million), largely reflecting the higher interest rate levels in the United States of America.
At €275.0 million, operating costs were roughly on par with the previous year (Q1/2017: €273.6 million). Operating costs included non-recurring effects in the amount of €20.5 million in the first quarter of 2018 (Q1/2017: €28.5 million). Non-recurring effects mainly comprised costs for restructuring measures, legal disputes, and the integration of subsidiaries. Adjusted for these non-recurring effects, operating costs increased by 4 per cent, to €254.5 million (Q1/2017: €245.1 million). The result from equity investments amounted to €1.0 million in the first quarter (Q1/2017: €1.9 million).
Deutsche Börse Group’s EBITDA was €417.6 million for the quarter under review (Q1/2017: €467.4 million). Excluding the non-recurring effects set out above, EBITDA amounted to €438.1 million, a 15 per cent increase compared to the previous year’s figure (Q1/2017: €380.2 million). The Group’s financial result was €–16.3 million (Q1/2017: €–18.3 million). The adjusted effective Group tax rate of 27.0 per cent for the first quarter of 2018 was in line with expectations (Q1/2017: 27.0 per cent). Accordingly, consolidated net profit for the period stood at €249.0 million (Q1/2017: €280.1 million); excluding the non-recurring effects described above, it was €270.7 million (Q1/2017: €232.2 million). Basic earnings per share amounted to €1.34 (Q1/2017: €1.50). Adjusted for non-recurring effects, basic earnings per share stood at €1.45 (Q1/2017: €1.24) – an increase of 17 per cent.