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Deutsche Börse Sets New Revenue and Earnings Records in 2008


Sales revenue up 12 percent to €2,455.1 million/ Earnings per share up 15 percent to €5.42/ Dividend proposal of €2.10 for 2008/ Reduced cost guidance while retaining key growth initiatives

Deutsche Börse AG closed financial year 2008 very successfully in terms of sales revenue and earnings. Based on the preliminary figures published by the company on Tuesday, sales revenue rose 12 percent in 2008, to €2,455.1 million (2007: €2,185.2 million). The sales revenue reflect stable performance throughout 2008 in the Group’s two largest business areas, Eurex and Clearstream, as well as the consolidation of the International Securities Exchange (ISE) in 2008. The Group also earned €236.8 million in net interest income from banking business (2007: €230.8 million). Total costs of €1,284.0 million include the positive effects of the restructuring and efficiency program announced in September 2007, and were within the company’s cost guidance for 2008. EBITA (earnings before interest, tax and goodwill impairment) rose by 12 percent to total €1,508.4 million (2007: €1,345.9 million). Net income for the Group increased 13 percent in 2008 to €1,033.3 million (2007: €911.7) and is based on a significantly reduced effective tax rate for the Group of 28.5 percent, which was partly due to the relocation of staff to Eschborn. The basic earnings per share, based on the weighted average of 190.5 million outstanding shares, rose by 15 percent to €5.42 (2007: €4.70 with 194.1 million outstanding shares).

Reto Francioni, CEO of Deutsche Börse AG, said, “All over the world, the financial sector was faced with challenges in 2008 of a magnitude previously unknown. With its integrated model, reliant and efficient technology as well as effective risk management systems, Deutsche Börse Group was very successful and at the same time made a valuable contribution to financial market stability. Since the beginning of the year we see a reluctance to trade securities and derivatives. Against this background, the Executive Board of Deutsche Börse AG will systematically use its options to reinforce the Group’s competitive position in the current capital market environment through targeted earnings management. We are expecting a challenging year 2009, which will require our full strength.”

Thomas Eichelmann, CFO of Deutsche Börse AG, said, “With appropriate measures and flexible planning and control systems, Deutsche Börse Group is well prepared for a difficult capital market environment in 2009. The measures we initiated at the end of 2007 and beginning of 2008 to improve operating efficiency in terms of costs and tax already showed a positive impact in 2008 and will take full effect from 2010. The new control system we have introduced allows us to react quickly to a changing environment. We are reducing our cost guidance for the current financial year to a maximum of last year’s level without factoring in any changes in volume-related costs and while retaining key growth initiatives.”

The Executive Board of Deutsche Börse AG is proposing a dividend on last year’s level of €2.10 per share for 2008, which corresponds to a dividend payout ratio of 38 percent. Including share buy-backs of €380 million during financial year 2008, the amount distributed to Deutsche Börse AG shareholders would thus be €770 million. The company will decide on share buy-backs in the current financial year with the presentation of the half-year results 2009. As in the past, the Executive Board will take into account capital requirements, investment needs, as well as general liquidity considerations in making its decision.

In the fourth quarter 2008, Deutsche Börse reported a 13 percent increase in sales revenue, to €609.0 million (Q4/2007: €537.7 million). Despite the ISE consolidation, expenses fell by 15 percent to €359.7 million in Q4 2008 (Q4/2007: €423.8 million) because Q4 2007 costs included exceptional levels of stock based compensation charges, and provisions for the restructuring and efficiency program. EBITA in the fourth quarter 2008 was €322.5 million, compared with €355.5 million in the prior-year quarter. In addition to the cost effects mentioned above, the sale of buildings in Luxembourg generated a non-taxable book gain of approximately €120 million in Q4 2007. The basic earnings per share in the fourth quarter 2008 came to €1.19, as against €1.40 in the prior-year period.

Segment reporting for financial year 2008

As a result of a decline in trading activity in the Xetra segment brought about by uncertainty in the financial markets, sales revenue fell by 8 percent to €399.4 million (2007: €435.0 million). On the Xetra electronic trading platform order book turnover declined by 12 percent, to €2,149.0 billion, and on the trading floor in Frankfurt trading volume droped by 27 percent to €80.1 billion. Trading volumes on the platforms for structured products, Scoach, fell by 14 percent to €64.9 billion. EBITA in the segment fell by 12 percent to €219.4 million (2007: €250.1 million).

The Eurex segment reported an increase in trading activity of 17 percent over the previous year and achieved a new record of 3,173 million contracts traded (2007: 2,704 million). The European equity index products were the largest contributor to growth in the reporting period, with an increase of 36 percent. Sales revenue in the Eurex segment increased by 41 percent to €1,010.1 million (2007: € 713.9 million). In addition to the increase in trading activity, this rise was also due to the first-time consolidation of ISE in 2008. EBITA grew by 35 percent to €597.5 million (2007: € 443.2 million).

In the custody business of the Clearstream segment, the average value of securities held under custody increased by 1 percent to €10.6 trillion (2007: €10.5 trillion). Custody values of international securities rose by 7 percent and in spite of the major decline in equity indices, there was only a slight drop of 4 percent in the values of domestic securities. The number of transactions in settlement business fell as a result of the reduced trading activity in equities, by 7 percent to 114.3 million (2007: 123.1 million). 21.8 million of those transactions were recorded in international securities traded off-exchange – an increase of 9 percent over the previous year. The average monthly outstanding volume in Global Securities Financing (GSF) increased by 20 percent to €398.8 billion (2007: €332.7 billion). Sales revenue in the Clearstream segment was on a par with the prior-year level at €769.3 million (2007: € 768.2 million). Net interest income from banking business grew by 3 percent to €236.8 million (2007: € 230.8 million). Due to lower costs, EBITA grew by 29 percent to €489.6 million (2007: € 379.4 million).

The Market Data & Analytics segment generated sales revenue of €180.6 million, which is 7 percent higher than the previous year (2007: €168.3 million). The increase is largely a result of new customers, higher quality products and trading data packages for the cash and derivatives markets as well as growth in index products. EBITA in the segment increased by 21 percent to €106.9 million (2007: €88.3 million).

External sales revenue in the Information Technology segment decreased by 4 percent to €95.7 million (2007: €99.8 million). The decline in external sales revenue was a result of a drop in transaction volume on the platforms operated. Internal sales revenue with other segments of Deutsche Börse Group fell by 1 percent to €393.1 million (2007: €397.9 million). Due to lower costs, EBITA grew by 19 percent to €119.2 million (2007: €100.2 million).


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