Deutsche Börse pools data and IT activities into new business unit

Deutsche Börse pools data and IT activities into new business unit

Deutsche Börse has set out plans to create a new business unit that will be responsible for all data and information technology activities. The division will be led by a new person, with current IT chief Michael Kuhn leaving the company.

The German exchange operator is pooling under one roof all IT, system and service development and operating capabilities, market data and analytics and some external services.

The move is designed to extend Deutsche Börse's client reach and service offering, helping the firm sell its trading systems to other exchanges as well as punt its business process offering, general IT operations and network services.

The group argues that by pooling activities it can take advantage of integrated business opportunities while also supporting clients with tailored IT and other services, "enhancing customer loyalty, broadening client reach and meeting the growing demand for outsourcing services with an expanded range of services".

As part of the shake-up, Michael Kuhn, executive board member responsible for IT, is leaving by mutual consent after 23 years at Deutsche Börse, with his board contract not extended when it runs out at the end of 2012. The company says it is now "looking for a successor".

Commenting on the new unit, Reto Francioni, CEO, Deutsche Börse, says: "This sends out a clear mandate to our new business area to play a key role as a critical and strategic competitive factor for Deutsche Börse AG going forward, as well as to harness and expand cross-selling potential with our existing business areas."

The German exchange operator's erstwhile suitor Nyse Euronext recently posted a set of results that clearly demonstrated the importance of technology sales to revenue generation. The Information Services and Technology Solutions segment achieved its highest level of quarterly revenue generation in the fourth quarter of 2011 at $127 million (11% up on the prior year period), with a 26% operating margin for the full year.

Deutsche Börse, meanwhile, has posted a six per cent rise in full year sales revenues to EUR2.23 billion, its best performance since the high water mark of 2008. Net income soared to EUR849 million from EUR418 million in 2010. Fourth quarter earnings were EUR228 million, compared to a loss of EUR219 million for the same period the previous year.

After a year that saw it incur EUR83 million in costs related to the failed Nyse Euronext merger, Deutsche Börse is also proposing to increase its regular dividend by 10% to EUR2.30 and throw in a special dividend of EUR1.

Says Francioni: "After the EU Commission's decision, our view is exclusively forward. We will now accelerate our growth strategy with an offensive on unregulated and unsecured markets, an extension of our leadership role in technology and market data, and by partnering further with infrastructures and customers in growth areas and regions."

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