Deutsche Börse AG Publishes Results For Q1/2014 - 6 Per Cent Increase In Net Revenue To €514 Million - Result From Equity Investments Contains One-Off Gain Of €63 Million - Earnings Per Share – Adjusted For Exceptional Items – Up By 9 Per Cent To €1.00

Deutsche Börse: Deutsche Börse AG published its figures for the first quarter of 2014 on Monday. The Group generated net revenue of €514.2 million, up 6 per cent on the first quarter of 2013. The increase is attributable to a slight improvement in the business environment and the consolidation of the European Energy Exchange AG (EEX) since the start of 2014. The Group’s operating costs amounted to €243.4 million, adjusted for exceptional items (Q1/2013: €229.5 million). The planned year-on-year increase in operating costs was attributable to consolidation effects and higher investments. The result from the Group’s equity investments contains a one-off gain of €62.7 million related to the merger of Direct Edge Holdings, LLC and BATS Global Markets, Inc. Deutsche Börse Group previously held an interest of around 32 per cent in Direct Edge. Adjusted for these exceptional items, earnings before interest and tax (EBIT) rose by 5 per cent to €271.6 million (Q1/2013: €257.8 million). Overall, the Group recorded adjusted earnings per share of €1.00 (Q1/2013: €0.92).

Gregor Pottmeyer, Deutsche Börse AG’s CFO and Executive Board member for human resources, said: “The market environment improved in several business areas in the first quarter. We were also able to further increase the revenue contribution of new products and recorded new quarterly records for a number of our products, for example the KOSPI and dividend derivatives. In connection with the consolidation of EEX, this helped us to increase net revenue to €514 million, the highest level since the third quarter of 2011.”

Regarding Deutsche Börse’s growth initiatives, Gregor Pottmeyer explained: “We made further progress on the Group’s growth projects. The focus for 2014 remains on infrastructure developments and tapping new growth areas, in particular the expansion of our presence in Asia. Our effective cost management in recent years has given us the financial flexibility we need to do this.”

Results for Q1/2014

In total, Deutsche Börse Group’s net revenue rose by 6 per cent year-on-year to €514.2 million in the first quarter of 2014 (Q1/2013: €484.3 million). In addition to the improved business environment, this positive development is also due to the consolidation of EEX since 1 January 2014. Excluding consolidation effects, net revenue was up 2 per cent. In an environment of persistently low interest rates, a rise in average overnight customer deposits led to a slight increase in net interest income from banking business to €8.4 million (Q1/2013: €8.2 million).

Operating costs amounted to €247.8 million, significantly down on the prior-year quarter (Q1/2013: €295.3 million), although this had included costs for exceptional items, notably efficiency programmes, totalling €65.8 million. Exceptional items in the first quarter of 2014 stood at €4.4 million. Operating costs adjusted for special items amounted to €243.4 million (Q1/2013: €229.5 million). The year-on-year increase is attributable to consolidation effects and higher investments.

The result from equity investments amounted to €63.5 million (Q1/2013: €3.0 million). This significant increase is attributable to a one-off gain of €62.7 million in connection with the merger of Direct Edge and BATS, at the end of January 2014. This resulted in the revaluation of the existing shares in Direct Edge, which Deutsche Börse Group holds via its subsidiary International Securities Exchange. Moreover, the Group received a special dividend after the transaction had been completed. Adjusted for these one-off items, the result from equity investments amounted to €0.8 million.

As a result of the development of net revenue and operating costs, and in particular the one-off gain in connection with the revaluation of the existing shares in Direct Edge, EBIT stood at €329.9 million in the first quarter of 2014 (Q1/2013: €192.0 million). Adjusted for exceptional cost items (efficiency programmes) and for one-off items in the result from equity investments, EBIT in the first quarter of 2014 was €271.6 million (Q1/2013: €257.8 million).

The Group’s financial result for the first quarter of 2014 improved to €–10.9 million (Q1/2013: €–23.2 million), largely due to the completed refinancing of non-current financial liabilities at favourable terms in 2013.

The effective Group tax rate adjusted for exceptional items in the first quarter of 2014 was 26.0 per cent (Q1/2013: 26.0 per cent).

Consolidated net income for the first quarter of 2014 amounted to €219.0 million (Q1/2013: €121.2 million). Adjusted for the aforementioned one-off items, net income increased by 9 per cent to €184.7 million (Q1/2013: €169.9 million). The Group’s basic earnings per share, based on the weighted average of 184.1 million shares outstanding, improved to €1.19 in the first quarter of 2014 (Q1/2013: €0.66 for 184.1 million shares outstanding); adjusted earnings per share rose by 9 per cent to €1.00 (Q1/2013: €0.92).