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Deutsche Börse AG releases preliminary results for Q4 and full-year 2013

Release date: 19 Feb 2014 | Deutsche Börse

Deutsche Börse AG releases preliminary results for Q4 and full-year 2013

Group generated net revenue of around €1.9 billion in 2013/Profit before tax (EBIT) of €954 million after adjustment for one-offs/Stable dividend of €2.10 per share proposed/Key milestones reached in implementation of growth strategy/Positive growth forecast

Deutsche Börse AG published its preliminary figures for the fourth quarter and full-year 2013 on Wednesday. The Group generated net revenue of €1,912.3 million in 2013, a largely stable performance compared with the previous year (2012: €1,932.3 million). Adjusted operating costs increased by 5 per cent year-on-year to €967.6 million (2012: €922.4 million), as a result of higher investments in growth initiatives and infrastructure. Adjusted earnings before interest and tax (EBIT) were €954.0 million (2012: €1,005.6 million). Basic earnings per share adjusted for exceptional items amounted to €3.46 (2012: €3.53). Deutsche Börse AG’s Executive Board is proposing a stable dividend of €2.10 per share for financial year 2013 (2012: €2.10). This still requires the formal approval of Deutsche Börse AG’s Supervisory Board, which today expressed its support, and of Deutsche Börse AG’s shareholders at the Annual General Meeting on 15 May 2014.
Reto Francioni, CEO of Deutsche Börse AG, said: “Despite challenging conditions, we generated overall stable net revenue in the past financial year. At the same time, we made good progress in tapping new growth areas by systematically expanding our investment program. In addition to the significant structural growth opportunities, the macroeconomic environment in Europe is also showing signs of improvement. As a result, we are optimistic about the future.”
Gregor Pottmeyer, Deutsche Börse AG’s CFO and Executive Board member for human resources, said: “Our effective cost management in recent years has given us the flexibility we need to make targeted investments in growth. We are planning to further increase investments in growth and infrastructure in 2014 by around €30 million, particularly to further expand our presence in Asia. At the same time, the efficiency program that has been in place since 2013 will offset inflationary effects on operating costs until 2016.”
Preliminary results 2013
In financial year 2013, Deutsche Börse Group’s net revenue was overall stable. The slight decline of 1 per cent to €1,912.3 million (2012: €1,932.3 million) is due to lower net interest income from banking business. This decreased to €35.9 million (2012: €52.0 million), as a result of the central banks’ persistent low interest rate policy and despite higher average customer cash deposits.
Operating costs amounted to €1,182.8 million in the year under review, a significant year-on-year increase (2012: €958.6 million) due to exceptional items of €215.2 million (2012: €36.2 million). These exceptional items comprised costs of €86.2 million, primarily for efficiency programs, and an amount of €129.0 million to settle proceedings brought by the US Office of Foreign Assets Control (OFAC). Of this amount, €111.2 million (US$151.9 million) was attributable to the settlement payment and €17.8 million mainly to legal costs. Adjusted for these one-off effects, costs increased by 5 per cent to €967.6 million (2012: €922.4 million), and were thus in line with the Group’s forecast of a moderate increase in operating costs.
The result from Deutsche Börse Group’s equity investments amounted to €9.3 million (2012: €–4.3 million). It was generated primarily by European Energy Exchange AG (will be fully consolidated as per 1 January 2014), Direct Edge Holdings, LLC, and Scoach Holding S.A. However, the latter only contributed to the result from equity investments in the first half of the year, because the joint venture with the Swiss exchange SIX was terminated with effect from 30 June 2013 and Scoach has been consolidated since then. The result from equity investments also includes non-recurring income of €2.0 million in connection with the consolidation.
2013 saw a rise in operating costs due to higher investments in growth and infrastructure projects. In combination with the exceptional items described above and slightly lower net revenue, Deutsche Börse Group’s earnings before interest and tax (EBIT) decreased in the year under review to €738.8 million (2012: €969.4 million). Excluding the exceptional items mentioned above, the Group's EBIT was €954.0 million (2012: €1,005.6 million).
The Group’s financial result for financial year 2013 was €–70.7 million (2012: €–132.7 million). The improvement mainly resulted from the refinancing of the Group’s long-term financial liabilities, which was completed in the second quarter of 2013, as well as exceptional items in 2012. In March 2013, Deutsche Börse AG successfully issued a corporate bond with a volume of €600 million. The bond has a maturity of five years and an annual coupon of 1.125 per cent. In combination with the bonds issued in October 2012, this allowed Deutsche Börse to refinance its outstanding non-current liabilities maturing in 2013 on extremely favourable terms. In financial year 2012, the financial result included exceptional items: 1) due to Deutsche Börse AG’s agreement with SIX Group AG to acquire all the shares in Eurex Zürich AG, 2) due to the placement of a corporate bond with a volume of €600 million and 3) due to the repurchase of outstanding euro-denominated bonds in the fourth quarter of 2012. Adjusted for these factors, the net financial result in 2012 amounted to €–92.9 million.
The effective Group tax rate remained unchanged at 26.0 per cent in 2013 (2012: 26.0 per cent). This figure has been adjusted for the above-mentioned exceptional items relating to operating costs and the financial result.
As a result, the Group’s consolidated net income for the period amounted to €478.4 million (2012: €645.0 million). Excluding the exceptional items mentioned above, consolidated net income for the period totaled €636.8 million (2012: €660.9 million).
Basic earnings per share, based on the weighted average of 184.1 million shares, amounted to €2.60 (2012: €3.44 for an average of 187.4 million shares outstanding). Adjusted for the exceptional items mentioned above, basic earnings per share were €3.46 (2012: €3.53).
Preliminary results Q4/2013
Deutsche Börse generated net revenue of €473.0 million in the fourth quarter of 2013 (Q4/2012: €447.7 million). Operating costs amounted to €284.6 million (Q4/2012: €253.7 million). Adjusted for the costs of efficiency programs and legal costs in connection with the OFAC settlement, operating costs were €267.9 million (Q4/2012: €247.1 million). EBIT for the fourth quarter of 2013 was €189.5 million, compared with €185.2 million in the prior-year period. Adjusted for exceptional items, EBIT amounted to €206.2 million (Q4/2012: €191.8 million). Basic earnings per share were €0.68 in the final quarter of 2013, compared with €0.82 in the fourth quarter of 2012. Adjusted for the exceptional items described above, basic earnings per share in the fourth quarter of 2013 amounted to €0.74 (Q4/2012: €0.64).

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