Deutsche Börse AG’s CFO Mathias Hlubek was pleased with earnings in the third quarter. Despite the weak market environment, Deutsche Börse increased the company’s profitability for its shareholders and continued the success of previous years thanks to its diversified business model. “On the basis of our good earnings, we are confident that we will generate the forecasted EBIT of at least €450 million for the full year”, explained Hlubek. “We expect EBITA of around € 600 million for 2005, based on the current market situation which is an increase of 15 percent compared to our guidance for this year. We will adjust our forecasts in the course of Q1 to market conditions”. Due to the new IFRS standard, EBITA (earnings before interest, taxes and goodwill amortisation) will replace the EBIT indicator. Based on the applicable accounting standards, EBITA of €600 million corresponds to EBIT of around €530 million.
The company’s segment reporting shows that Clearstream again recorded the highest sales revenue in the third quarter - up 3 percent to €142.6 million (Q3/2003: € 138.3 million) - driven by the custody and connectivity business. In its largest business area, custody, volumes increased by 2 percent year-on-year to €7.4 trillion. The connectivity business grew in Q3 due to the rollout of CreationOnline, the new interactive browser interface, by 19 percent to €11.4 million. CreationOnline gives Clearstream customers real-time access to the settlement platform Creation. Segment EBIT rose by 4 percent to €25.7 million (Q3/2003: €24.6 million) on the back of reduced costs.
The Eurex segment generated sales revenue of €96.7 million in the third quarter (Q3/2003: €103.8 million). At €38.7 million, EBIT in the derivatives market was down year-on-year (Q3/2003: €51.7 million). The decline in sales revenue was attributable to the expiration of the contract with the Chicago Board of Trade at the end of January 2004 and a decrease in trading activity in the third quarter. At 804.2 million contracts during the first nine months, the trading volume is up 3 percent year-on-year (Q1-Q3/2003: 781.4 million contracts) for the year to date.
In Q3, the Xetra segment recorded sales revenue of € 48.0 million, compared with €59.6 million in Q3/2003. Looking at the year as a whole, the trading volume on the fully electronic trading platform of €684,534 during the first nine months million is up around 11.4 percent year-on-year (Q1-Q3/2003: €614,604 million). EBIT rose to €17.2 million (Q3/2003: €27.2 million). This fall is due to low trading activity and investments in the new Xetra Release 7.1.
Thanks to the success of newly launched services such as share price information for the European Stars segment and increased income from equity investments in STOXX AG and International Index Company Ltd. (formerly known as iBoxx Ltd.), Information Services increased sales revenues by 6 percent to €30.6 million (Q3/2003: €29.0 million). At the same time, costs were reduced by 3 percent and EBIT soared almost 40 percent to €12.3 million (Q3/2003: €8.8 million).
The Information Technology segment generated external sales revenue of €29.2 million in the third quarter, compared with €32.2 million in the prior-year period. The agreements entered into with Deutsche WertpapierService Bank (dwpbank) and the EEX energy exchange last year also had a positive effect on sales revenue in this quarter and almost made good the expiration of the joint venture with CBOT. Costs have been reduced by 17 percent thanks to rigorous cost management in the purchasing of external services and in operating costs. As a result, EBIT climbed to €18.8 million (Q3/2003: €6.5 million).
Since December 2003, Information Technology has operated all of dwpbank’s mainframe applications and its server system from Deutsche Börse Group’s data centre. The Group’s systems also process all of EEX’s energy trading activities.
