Investor Presentation - August 2020 - Gruppe Deutsche Börse
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Investor Presentation
August 2020
Deutsche Börse Group | August 2020 |Our purpose
We at Deutsche Börse create trust
in the markets of today and tomorrow.
Deutsche Börse Group | August 2020 | 1Diversified, scalable and resilient business
portfolio serves as a basis for growth Geographically diversified
36% Rest of Europe
30% UK
IFS Qontigo
22% Germany
€184m €190m
investment fund index & 7% Americas
services analytics
5% Asia-Pacific
6% 6%
Pre-
trading Multi-asset class offering
€190m
Clear- 6% 50% Equity / index
stream Post-
25% Fixed income
€843m 29%
trading
post-trading €1,026m Eurex 9% Commodities
35%
FY/2019 €1,009m
34% financial
7% Interest income
€2,936 m derivatives 6% Funds
net revenue 3% FX
59%
Trading & High recurring revenues
clearing
€1,720m
11%
Xetra 10%
€329m 3% 52% Transactional
cash equities EEX 48% Recurring
360T €289m
Note: Numbers may not add up due to rounding.
€92m commodities
foreign
exchange
Deutsche Börse Group | August 2020 | 2Key pillars of Deutsche Börse’s growth strategy
Organic growth
M&A
Technology
Execution discipline
Organic growth M&A Technology
Exploit secular growth Scale through asset class Maintain leading
opportunities consolidation IT position
Execution discipline
Strengthen execution discipline along cost control,
financial steering and general management
Further increase valuation-multiple
Deutsche Börse Group | August 2020 | 3Organic growth – secular growth drivers fully intact
Organic growth
M&A
Technology
despite dynamic environment Execution discipline
Main drivers for secular growth Impact on the business
Pre- Trading & Post-
trading clearing trading
Central clearing
▪ Demand for liquid EU-based OTC CCP alternative
▪ Pull effects for new products and services (e.g. collateral)
Over the counter (OTC) to on-exchange
▪ Shift from OTC to regulated markets (e.g. futurisation)
▪ Electronification of less penetrated asset classes
Active to passive investments
▪ Continued shift from active to passive investing
▪ Europe still offers significant growth potential
Importance of buy-side
▪ Increasingly self-directed buy-side and corporates
▪ Continued pressure on banking industry in general
Deutsche Börse Group | August 2020 | 4Organic growth – broad number of initiatives support
Organic growth
M&A
Technology
key growth segments Execution discipline
Segment Secular growth drivers Growth initiatives
OTC to on-exchange Product innovation to support futurisation, e.g. total return and dividend futures
Eurex Central clearing Liquid EU-based OTC clearing alternative, e.g. for Euro interest rate swaps
(financial derivatives)
Active to passive investments Product innovation to address accelerated buy-side demand, e.g. MSCI derivatives
OTC to on-exchange Efficient on-exchange services, e.g. to address increasing share of renewables in power
EEX
(commodities) New markets/regions New geographical markets and multi-commodity offering, e.g. Nodal (US), Japan, CO2
OTC to on-exchange Shift supported with new products and services e.g. FX futures, OTC FX clearing
360T
(foreign exchange) Shift to buy-side Product/service offering geared directly towards corporates and asset managers
IFS
(investment fund Fragmentation and inefficiencies Increase of efficiency through central fund distribution and settlement solutions
services)
Active to passive investments Further expansion and integration of index and benchmarking services
Qontigo
(index & analytics) Shift to buy-side Sophisticated risk analytics and portfolio-construction tools
Deutsche Börse Group | August 2020 | 5Organic growth
Strong performance in key secular growth M&A
Technology
segments Execution discipline
Total and secular net revenue growth (average Q1/18 to Q2/20)
Note
t/o secular
Pre-trading
growth (%)
Trading & clearing
15
Post-trading Secular growth is key pillar of
Net revenue Q2/20 (€m) Deutsche Börse’s growth strategy.
24 360T
Diversified business model serves
as basis for secular growth along
10
the full capital markets value chain.
EEX
51 IFS 53 Qontigo
71 Eurex, EEX, 360T, IFS and Qontigo
are key secular growth segments.
Group 272
Eurex
5 213 Continuous strategic investments
Clearstream planned to support growth
momentum.
94
Xetra
total
0 1
0 10 20 30 40 growth (%)
1) Total growth includes secular, cyclical and M&A growth.
Deutsche Börse Group | August 2020 | 6Organic growth – midterm targets
Organic growth
M&A
Technology
Execution discipline
Net revenue growth target Net profit growth target (adj.)
(€m) (€m)
Mid-term target Mid-term target
>5% secular CAGR +10-15% CAGR
+6% ~3,000-
+10%
+13% 3,300 ~1.20bn
2,936 +17% 1,106
2,770
1,003
2,462
857
FY/17 FY/18 FY/19 FY/20E FY/17 FY/18 FY/19 FY/20E
Note: Adjusted for exceptional items.
Deutsche Börse Group | August 2020 | 7M&A – focused and disciplined approach started
Organic growth
M&A
Technology
in 2018 yielded good results Execution discipline
M&A focus on five growth areas M&A delivery since 2018
Pre-trading
Data, index & ▪ Axioma acquisition strengthens Deutsche Börse’s pre-trading offering and
1
analytics improves access to the buy-side and the US (Apr 2019)
▪ Acquisition of Grexel Systems (energy certificate registry; Dec 2018)
▪ Spark Commodities JV with Kpler for liquefied natural gas trading (Apr 2019)
2 Commodities
▪ Acquisition of NFX’s futures and options exchange core assets, including
Trading & clearing
the portfolio of open interest in NFX contracts (Nov 2019)
3 Foreign exchange ▪ Acquisition of the spot FX platform GTX ECN allowed for expansion into the
US and the dealer-to-dealer market segment (May 2018)
4 Fixed income
▪ Acquisition of Swisscanto Funds Centre to expand services with
Post-trading
management of distribution contracts and data processing (Apr 2018)
▪ Acquisition of Ausmaq, a managed funds services business for the steadily
5 Investment funds
growing Australian fund market (May 2019)
▪ Acquisition of UBS Fondcenter AG (closing expected H2/20) creates a leading
provider of fund distribution services with high benefits for customers
Deutsche Börse Group | August 2020 | 8Technology – capabilities in new technologies are
Organic growth
M&A
Technology
growing steadily Execution discipline
Technology trends
Cloud and provision of ▪ First contracts regarding public cloud operation have been
services via APIs is helping signed with Microsoft, Google and SAP
Public cloud
to increase agility, improve ▪ Contracts meet regulatory requirements to move significant parts
quality and reduce costs of operations into the public cloud over time
Helps to create new
DLT / market structures and ▪ HQLAx: innovative blockchain solution for collateral management
block-chain allows adding products based on tokens to improve collateral mobility
onto existing structures
Robotics / ▪ Centre of excellence for automation established; several
Key efficiency driver for
automation / automation tools already in production for task automation;
operations-heavy tasks
AI further steps defined along use case roadmap
Advanced analytics is both ▪ New client requirements regarding data / analytics are addressed
Big data /
a revenue driver adding by the creation of a buy-side intelligence leader as part of the
advanced
value to data, and an Axioma acquisition
analytics
efficiency lever
Deutsche Börse Group | August 2020 | 9Execution discipline – strengthened discipline along cost
Organic growth
M&A
Technology
control, financial steering and general management Execution discipline
▪ New executive board set-up completed in 2018 with stronger business and
technology focus
▪ New segment structure with increased P&L responsibilities/incentivisation to
achieve secular growth and improve transparency
▪ Structural cost improvement programme implemented; savings above €100
Execution
million target; savings reinvested into growth, new technology and regulation
discipline
▪ Upgraded M&A capabilities allow for systematic execution of external growth
opportunities
▪ Tighter steering and strict consequence management
▪ Regained trust and support of internal and external stakeholders
Deutsche Börse Group | August 2020 | 10Group financials
FY/2019 (€m)
Net revenue Operating cost EBITDA Net profit Note
+6% +8% +5% +10%
+5% (organic) +5% (organic)
+5% (secular) Net interest €246m
income +20%
2,936
2,770
Exceptional cost
€135m
items
€223m
Depreciation (adj.)
1,813 −6%
1,729
Financial result −€54m
1,130 1,106
1,046 1,003
Tax rate 26%
€6.03
EPS (adj.)
+11%
FY/18 FY/19 FY/18 FY/19 FY/18 FY/19 FY/18 FY/19
Note: Adjusted for exceptional items; operating costs and EBITDA FY/18 non-GAAP indicative figures.
Deutsche Börse Group | August 2020 | 11Group financials
H1/2020 | €m
Net revenue Operating cost EBITDA Net profit Note
+17% +16% +17% +16%
+14% (organic) + 9% (organic) +17% (organic) +19% (organic)
+ 7% (secular) Net interest €50m
€118m
€50m
income
income −8%
-24%
-24%
1,692
Exceptional
Exceptional cost
cost
1,446 €42m
€42m
€70m
items
items
€62m
1,103 Depreciation €62m
Depreciation €124m
+14%
+14%
941
Financial result €-18m
676 Financial result €-18m
−€35m
591 580
509
Tax rate 26%
Tax rate 26%
€1.57
EPS (adj.)
-1%
€1.57
€3.68
EPS (adj.)
H1/19 H1/20 H1/19 H1/20 H1/19 H1/20 H1/19 H1/20 -1%
+16%
Note: Adjusted for exceptional items. Organic growth incl. Axioma (Qontigo), Ausmaq (IFS) and Börse Berlin (Xetra) like-for-like.
Deutsche Börse Group | August 2020 | 12Secular growth trend remained intact
H1/2020 | €m
Consolidation Secular growth Cyclical growth Note
+3% +7% +7%
Consolidation effects mainly driven
+17% by Qontigo (Axioma) and a small
1,692 contribution from IFS (Ausmaq).
103 All segments with positive secular
growth contribution, with good
progress at Eurex, IFS, Qontigo and
107 360T.
1,446 36 Cyclical growth mainly driven by
exceptionally high volatility in Q1
due to the Corona situation.
H1/19 H1/20
Note: Numbers may not add up due to rounding.
Deutsche Börse Group | August 2020 | 13Development of segment financials (I/II)
H1/2020 (€m)
Eurex EEX 360T Xetra
Net revenue EBITDA Net revenue EBITDA Net revenue EBITDA Net revenue EBITDA
+22% +23% +6% +9% +19% +20% +18% +25%
+17% (org.) +24% (org.)
618
506
455 196
370 166
153
145
131
104
79
72
51
43
20 24
Note: Adjusted for exceptional items. H1/19
H1/20
Deutsche Börse Group | August 2020 | 14Development of segment financials (II/II)
H1/2020 (€m)
Clearstream IFS Qontigo
Net revenue EBITDA Net revenue EBITDA Net revenue EBITDA
+6% +6% +25% +38% +56% +14%
+20% (org.) +35% (org.) +10% (org.) +13% (org.)
448
424
120
295 106
280
85
77
58 61
54
42
Note: Adjusted for exceptional items. H1/19
H1/20
Deutsche Börse Group | August 2020 | 15Dividend per share and pay-out
FY/2019
Pay-out ratio (%) Note
55 54 53 49 48
Deutsche Börse aims to distribute
40-60% of adjusted annual net
+7%
profit to shareholders in form of the
€2.90 regular dividend.
€2.70
Within the 40-60% range, pay-out
€2.45
€2.35 mainly depends on the business
€2.25 development and dividend
continuity considerations.
Remaining free cash is planned to
be reinvested into the business to
support the Group‘s M&A strategy.
FY/15 FY/16 FY/17 FY/18 FY/19
Note: Adjusted for exceptional items.
Deutsche Börse Group | August 2020 | 16Outlook
FY/2020 | €m
Net profit guidance Note
Mid-term target
Despite strong H1/2020, guidance
+10-15% CAGR for 2020 remains unchanged.
+10%
~1.20bn
+17% 1,106 For FY/2020 Deutsche Börse
expects:
1,003
857 Continued secular net revenue
growth of at least 5% and
around €1.20 billion
adjusted net profit.
FY/17 FY/18 FY/19 FY/20E
Note: Adjusted for exceptional items.
Deutsche Börse Group | August 2020 | 17Disclaimer
Cautionary note with regard to forward-looking statements: This document contains forward-looking statements and statements of future
expectations that reflect management's current views and assumptions with respect to future events. Such statements are subject to known and
unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied and that are
beyond Deutsche Börse AG's ability to control or estimate precisely. In addition to statements which are forward-looking by reason of context, the words
'may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue' and similar expressions identify forward-
looking statements. Actual results, performance or events may differ materially from those statements due to, without limitation, (i) general economic
conditions, (ii) future performance of financial markets, (iii) interest rate levels (iv) currency exchange rates (v) the behaviour of other market participants
(vi) general competitive factors (vii) changes in laws and regulations (viii) changes in the policies of central banks, governmental regulators and/or
(foreign) governments (ix) the ability to successfully integrate acquired and merged businesses and achieve anticipated synergies (x) reorganization
measures, in each case on a local, national, regional and/or global basis. Deutsche Börse AG does not assume any obligation and does not intend to
update any forward-looking statements to reflect events or circumstances after the date of these materials.
No obligation to update information: Deutsche Börse AG does not assume any obligation and does not intend to update any information contained
herein.
No investment advice: This presentation is for information only and shall not constitute investment advice. It is not intended for solicitation purposes but
only for use as general information.
All descriptions, examples and calculations contained in this presentation are for illustrative purposes only.
© Deutsche Börse AG 2020. All rights reserved.
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