Deutsche Borse AG closes financial year 2015 with significant increases in net revenue and profit
OREANDA-NEWS. Deutsche Börse AG published its preliminary results for the fourth quarter and the full year 2015 on Wednesday. The company generated net revenue of €2,367.4 million for the full year, a year-on-year increase of 16 per cent (2014: €2,047.8 million). Deutsche Börse thus posted the highest net revenue figure since the financial crisis, and has overcome the impact of the crisis. At €1,248.8 million, adjusted operating costs were higher than in the previous year (2014: €1,068.8 million), primarily due to consolidation and exchange rate effects, as well as higher remuneration expenses reflecting the positive share price performance. Adjusted earnings before interest and taxes (EBIT) amounted to €1,124.0 million (2014: €987.6 million). Basic earnings per share, adjusted for non-recurring effects, were €4.14, up 14 per cent year-on-year (2014: €3.63).
The Executive Board of Deutsche Börse AG proposes an increased dividend of €2.25 per share for 2015 (2014: €2.10). The dividend proposal is equivalent to a distribution ratio of 55 per cent of adjusted net income, and thus in line with the Group’s policy of distributing between 40 and 60 per cent. The proposal still requires formal approval by Deutsche Börse AG’s Supervisory Board, which has already expressed its support, and by Deutsche Börse AG’s shareholders at the Annual General Meeting on 11 May 2016.
In summer 2015 Deutsche Börse launched "Accelerate", its Group-wide growth programme. Carsten Kengeter, CEO of Deutsche Börse AG, commented: "We have already seen encouraging initial success in implementing the Accelerate growth programme. We are accelerating the Group’s growth momentum through numerous new initiatives. Our clear long-term vision is to turn Deutsche Börse into the market infrastructure provider of choice, being top-ranked in all its activities."
One of Deutsche Börse's measures within the scope of the programme was to realign the responsibilities of Executive Board members. The Group’s goal is to enhance agility, efficiency, and client focus.
Gregor Pottmeyer, CFO of Deutsche Börse AG, said: "Given the improved market environment and structural growth, we anticipate organic net revenue growth of 5 to 10 per cent for 2016. So far the start to the year has been encouraging. The active approach to managing operating costs which we introduced with the Accelerate programme will ensure the scalability of our business model. On this basis, we forecast earnings growth of between 10 and 15 per cent for the current fiscal year."
Preliminary results 2015
Deutsche Börse Group’s net revenue for the financial year 2015 rose by 16 per cent, to €2,367.4 million (2014: €2,047.8 million), reflecting positive performance across all business segments. Net revenue included consolidation effects of €123.3 million, largely driven by Clearstream Global Securities Services, Powernext, APX, and 360T. Adjusted for these effects, net revenue increased by 10 per cent. Main contributors were the Eurex and Xetra segments, which posted double-digit growth rates – primarily due to higher volatility on equities markets. The Clearstream and Market Data + Services segments also posted high single-digit growth rates. Moreover, the share of business areas growing at high double-digit rates rose further, including Commodities at the European Energy Exchange, Investment Fund Services at Clearstream, and Indices within Market Data + Services.
At €1,375.6 million for the reporting year, operating costs were up year-on-year (2014: €1,114.8 million). Non-recurring effects totalled €126.8 million (2014: €46.0 million), largely comprising costs incurred in connection with efficiency programmes and mergers. Adjusted for these non-recurring effects, costs rose to €1,248.8 million (2014: €1,068.8 million) and thus remained within the Group’s forecasts; the increase was due to consolidation and exchange rate effects, as well as to higher variable remuneration given the positive share price performance.
The result from equity investments amounted to €0.8 million (2014: €78.3 million). The significant decline was largely attributable to non-recurring income related to the merger of Direct Edge ECN LLC with BATS Global Markets, Inc., in January 2014. Adjusted for non-recurring effects, the result from equity investments was €5.4 million (2014: €8.6 million).
Deutsche Börse Group’s consolidated earnings before interest and taxes (EBIT) declined to €992.6 million during the reporting year (2014: €1,011.3 million), due to higher costs and the lower result from equity investments. Excluding these effects, consolidated EBIT was €1,124.0 million, up 14 per cent year-on-year (2014: €987.6 million).
The Group’s financial result was €–42.4 million (2014: €–47.9 million). The improvement was largely due to positive exchange rate effects during the first quarter of 2015.
The Group’s effective tax rate for 2015 was 26.2 per cent (2014: 18.2 per cent); adjusted for non-recurring effects, it stood at 26.0 per cent (unchanged from 2014).
Net income for the Group thus amounted to €665.5 million (2014: €762.3 million). Excluding the non-recurring effects outlined above, net income was €766.0 million (2014: €669.4 million).
Basic earnings per share, based on the weighted average of 185.0 million shares outstanding, amounted to €3.60 (2014: €4.14, based on an average of 184.2 million shares outstanding). Adjusted for the special items mentioned, basic earnings per share amounted to €4.14, up 14 per cent year-on-year (2014: €3.63).
Preliminary results Q4/2015
Deutsche Börse generated net revenue of €589.8 million during the fourth quarter of 2015 (Q4/2014: €544.3 million). Operating costs totalled €430.9 million (Q4/2014: €338.6 million); adjusted for non-recurring effects, they amounted to €357.6 million (Q4/2014: €310.1 million). EBIT amounted to €159.2 million, compared to €208.1 million for the same period of the previous year. Adjusted for non-recurring effects, EBIT was €234.6 million (Q4/2014: €236.9 million). Basic earnings per share amounted to €0.54, compared to €1.21 in the fourth quarter of 2014. Adjusted for non-recurring effects, basic earnings per share were €0.85 (Q4/2014: €0.88).