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Financial position

Report on expected developments – future development of the Group’s financial position

The company expects operating cash flow, which is Deutsche Börse Group’s primary funding instrument, to remain clearly positive in the forecast period. The Group expects that two significant factors will influence changes in liquidity. Firstly, the company plans to invest some €180 million per year in intangible assets and property, plant and equipment at Group level during the forecast period. These investments will be included in cash flows from investing activities, and will serve primarily to develop new products and services in the Eurex and Clearstream segments and to enhance existing ones. The total amount mainly comprises investments in trading infrastructure and in risk management functionalities. Secondly, the Executive Board and Supervisory Board of Deutsche Börse AG will propose a dividend of €2.45 per share to the Annual General Meeting to be held in May 2018. This would correspond to a liquidity outflow of about €450 million. In addition, the Group announced that it would implement two share repurchase programmes of €200 million each. The first programme was launched at the end of November 2017, and is scheduled for completion by the end of June 2018. The second programme will be completed by the end of 2018 at the latest. Apart from the above, no other material factors were expected to impact the Group’s liquidity at the time the combined management report was prepared. As in previous years, the Group assumes that it will have a sound liquidity base due to its positive cash flow, adequate credit lines (see note 36 to the consolidated financial statements for details), and flexible management and planning systems.

Within the framework of a programme to optimise its capital structure, Deutsche Börse Group generally aims to distribute dividends equivalent to between 40 and 60 per cent of adjusted net profit for the period attributable to Deutsche Börse AG shareholders. In recent years (where the Group’s net profit for the period attributable to Deutsche Börse AG shareholders was lower), the dividend payout ratio was kept at the upper end of this range, in order to distribute stable dividends to shareholders. In connection with the expected earnings growth, the company is targeting a dividend payout ratio approximately at the centre of a range between 40 per cent and 60 per cent.

Against the background of the growth strategy, the company anticipates that in future, freely available funds will increasingly be applied not only to support the Group’s organic growth, but also to complementary external growth options. The company wants shareholders to continue participating in the company's success in a well-balanced manner; the two share repurchase programmes of €200 million each serve this purpose, amongst other factors.

To maintain its strong credit ratings at Group level, the company aims at a ratio of interest-bearing gross debt to EBITDA of no more than 1.5. The Group expects to reach or slightly come below this figure in 2018, depending on net revenue developments.

The parent company, Deutsche Börse AG, plans to invest some €50 to 60 million in intangible assets and property, plant and equipment during the forecast period.