Stable sales revenue of €552 million due to full acquisition of Eurex Operating costs of €249 million reflect exceptional items amounting to €23 million and higher investments in growth initiatives Adjusted earnings per share of €1.01
Deutsche Börse AG published its figures for the first quarter of 2012 on Thursday. At €552.4 million, the Group’s sales revenue remained virtually stable despite reduced activity on the financial markets. This was mainly due to the full acquisition of Eurex from the Swiss exchange organisation SIX Group. The Group’s operating costs rose to €248.6 million and include exceptional items amounting to €22.9 million, like costs for the prohibited merger with NYSE Euronext, and higher scheduled investments in growth initiatives. Therewith, operating costs are in line with the full year guidance. Earnings per share, adjusted for exceptional cost items and a financial expense from the valuation of the share component of the agreement with SIX Group, amounted to €1.01 in the first quarter of 2012.
The Executive Board and the Supervisory Board of Deutsche Börse AG propose to the Company’s Annual General Meeting on 16 May 2012 to increase the regular dividend for 2011 by 10 percent to €2.30 per share and to pay a special distribution of €1.00 per share. Both distributions are scheduled for 17 May 2012.
Gregor Pottmeyer, Deutsche Börse AG’s CFO and Executive Board member for human resources: “Based on the transaction agreed with SIX Group in 2011 we reported 100 percent of Eurex’s sales revenue in our consolidated financial statements for the first time in Q1/2012. This led to stable sales revenue performance despite a weaker market environment.”
Results for Q1/2012
Deutsche Börse Group’s sales revenue in the first quarter of 2012 amounted to €552.4 million, a decrease of 1 percent as against the first quarter of 2011 (Q1/2011: €558.6 million). In Deutsche Börse Group’s consolidated financial statement 100 percent of Eurex’s sales revenue was reported for the first time in Q1/2012. Adjusted for this effect, sales revenue was down 5 percent year-on-year due to reduced activity on the financial markets. In addition to sales revenue, the Group generated net interest income from banking business of €18.5 million, up 15 percent year-on-year due to higher customer cash balances (Q1/2011: €16.1 million). Other operating income in the first quarter of 2012 amounted to €2.8 million, compared with €8.3 million in the prior-year period. The decline is attributable to the discontinuation of the cost reimbursement by SIX Group to Deutsche Börse Group for the operation of Eurex. Volume-related costs amounted to €66.8 million in the reporting period (Q1/2011: €56.7 million). The increase in volume-related costs is mainly due to earnings neutral changes in pricing methodology on the cash and US-Options markets over the course of 2011. All in all, the Group generated net revenue (total revenue less volume related costs) of €506.9 million, a decline of 4 percent against the same quarter last year (Q1/2011: €526.3 million).
At €248.6 million, operating costs were up 17 percent year-on-year (Q1/2011: €211.8 million) and included costs of €16.6 million (Q1/2011: €10.2 million) relating to the prohibited merger with NYSE Euronext, as well as costs for efficiency programs in the amount of €6.3 million (Q1/2011: €3.4 million). Moreover, investments in growth initiatives were around €15 million higher than in the prior-year quarter. Besides higher project activity this was a result of the relatively low share of capitalisable costs in the first quarter 2012. With project progress the company expects an increase of the share of capitalisable costs during the course of the year. Adjusted for exceptional items, operating costs are in line with the guidance for the full year 2012.
At €1.7 million, the result from equity investments was down on the prior-year figure (€4.6 million). It is attributable primarily to Scoach Holding S.A., Direct Edge Holdings, LLC and European Energy Exchange AG. As a result, Deutsche Börse Group generated earnings before interest and taxes (EBIT) of €260.0 million (Q1/2011: €319.1 million). Adjusted for special factors, EBIT amounted to €282.9 million (Q1/2011: €332.5 million) in the first quarter of 2012.
The financial result for the first quarter of 2012 amounted to €−47.2 million (Q1/2011: €−20.8 million). This mainly reflects interest payments on outstanding bonds and a non cash and tax neutral expense amounting to €27.4 million, which is attributable to the final valuation of the equity component of the agreement with SIX Group on the full acquisition of Eurex, which was performed as at 1 February 2012. Together with income of €77.4 million in 2011, this results in non-cash and tax neutral income from the transaction of €50.0 million in the Group’s income statement over 2011 and Q1/2012.
Non-controlling interests in net income for the period – which indicates the share of the profit or loss of subsidiaries attributable to minority shareholders – amounted to €4.1 million for the quarter (Q1/2011: €6.6 million). Consolidated net income for the first quarter of 2012 was €146.2 million, compared with €214.1 million in the first quarter of 2011. Basic earnings per share, based on a weighted average of 188.7 million shares outstanding, amounted to €0.77 (Q1/2011: €1.15 for 186.0 million shares outstanding). Adjusted for exceptional items, consolidated net income amounted to €190.5 million (Q1/2011: €224.0 million) and earnings per share amounted to €1.01 in the first quarter of 2012 (Q1/2011: €1.20).