Deutsche Börse Q3/2012: Net Revenue Of Roughly Half A Billion Euros In Weak Market Environment
Deutsche Börse AG published its results for the third quarter 2012, which continued to be dominated by a markedly weak market environment, on Monday 29 October. At €471.0 million, net revenue was considerably lower than in the previous year (Q3/2011: €578.6 million). In the prior-year period market participants had entered into more hedges than usual and regrouped their portfolios more frequently due to substantial volatility connected with the turbulence in the euro zone and the downgrade of the US credit rating. Despite increased expenses for growth initiatives, the Group’s adjusted operating costs amounted to €225.6 million, virtually on a level with the previous year. Adjusted for special items, earnings per share amounted to €0.87 in the third quarter of 2012.
The first three quarters of 2012 saw an aggregate decline in net revenue to €1,484.6 million (Q1–3/2011: €1,611.3 million). The prior-year period had been primarily dominated by the strong third quarter of 2011. The acquisition of all of the shares in Eurex, which was successfully completed in 2012, had a stabilising effect. Adjusted operating costs in the first nine months of 2012 rose to €675.3 million year-on-year, mainly as a result of the investments in growth initiatives made as part of the Group’s strategic positioning. This resulted in adjusted EBIT of €813.8 million and adjusted earnings per share of €2.88.
With the publication of the half year figures, the Company had already announced that net revenue for full-year 2012 will fall short of the forecast range due to reduced trading activity of market participants and lower interest rates. Based on the continued weak capital market environment in October, the company now expects full-year 2012 net revenue of around €1,950 million. The Group is confirming its cost target of below €930 million operating costs on an adjusted basis.
In 2013 the infrastructure development and expansion in new growth areas are to be accelerated further. Currently the Executive Board is planning to increase expenditures for growth initiatives and infrastructure in a similar magnitude as already in 2012. The focus lies on expansion of the clearing offering to OTC derivatives, further development of collateral and liquidity management services for customers, as well as the adoption of the new European settlement infrastructure TARGET2-Securities.
As part of its capital management principles, Deutsche Börse AG is planning to repurchase own shares in the amount of around €100 million in the fourth quarter 2012 as already announced in February.
Gregor Pottmeyer, Deutsche Börse AG’s CFO and Executive Board member for human resources: “Despite financial market participants’ ongoing caution in the third quarter of the year, Deutsche Börse Group again recorded sound results thanks to its diversified business model. We are planning a further increase in investments for the next financial year, to further accelerate the development of infrastructure and expansion into new growth areas against the background of a new regulatory framework for global financial markets. At the same time we are systematically continuing the strict management of operating costs that began well before the financial crisis. Based on the strong financial position and the continued solid cash flows we are implementing the share buybacks announced in February as planned in the fourth quarter.”
Results for Q3/2012
At €471.0 million, Deutsche Börse Group’s net revenue was down significantly in Q3/2012 as opposed to the prior-year-period (Q3/2011: €578.6 million), which had been affected by strong volatility in connection with the turbulence in the euro zone. Net interest income from banking business amounted to €11.5 million (Q3/2011: €21.2 million). This decline as against the previous year is due to lower interest rate levels.
Operating costs were down 8 percent year-on-year to €227.4 million (Q3/2011: €248.3 million) and include special items amounting to €1.8 million. In Q3/2011, special items totalled €25.5 million.
At €1.8 million, the result from equity investments was down year-on-year (Q3/2011: €3.5 million). It is generated primarily by Scoach Holding S.A., Direct Edge Holdings, LLC and European Energy Exchange AG. As a result, Deutsche Börse Group generated overall earnings before interest and taxes (EBIT) of €245.4 million (Q3/2011: €333.8 million). Adjusted for special items, EBIT amounted to €247.2 million in the third quarter of 2012 (Q3/2011: €359.3 million).
The net financial result for the third quarter of 2012 amounted to €–23.8 million and mainly reflects interest payments on outstanding bonds. In the prior-year quarter, the net financial result was €–19.3 million after adjustment for non-recurring factors, in connection with the acquisition of all shares in Eurex Zürich AG.
Non-controlling interests in net income for the period – which indicate the share of the profit or loss of subsidiaries attributable to minority shareholders – amounted to €4.0 million in the third quarter (Q3/2011: €3.0 million). Consolidated net income for the third quarter of 2012 was €159.9 million, compared to €317.0 million in the third quarter of 2011. Basic earnings per share, based on a weighted average of 186.6 million shares outstanding, were €0.86 (Q3/2011: €1.70 for 186.0 million shares outstanding). Adjusted for non-recurring factors, consolidated net income for the period amounted to €161.2 million (Q3/2011: €248.6 million) and earnings per share were €0.87 in the third quarter of 2012 (Q3/2011: €1.33).
Results for Q1–3/2012
Aggregate net revenue for the first nine months of 2012 was €1,484.6 million (Q1–3/2011: €1,611.3 million). Operating costs amounted to €704.9 million (Q1–3/2011: €693.2 million). Adjusted for special items, operating costs were up 6 percent year-on-year to €675.3 million (Q1–3/2011: €637.9 million). The increase is mainly attributable to higher expenditures relating to growth initiatives and infrastructure measures. Adjusted EBIT in the first nine months of 2012 amounted to €813.8 million (Q1–3/2011: €987.0 million). Adjusted consolidated net income for the period was €541,6 million in the first nine months of 2012, as against €672.7 million in the comparable prior-year period. Adjusted basic earnings per share amounted to €2.88 (Q1–3/2011: €3.61).
|Q3/2012 Figures||65 KB|
|Interim Report 3/2012 - Deutsche Börse Group||1295 KB|