In the second quarter 2009, Deutsche Börse Group generated a solid result, despite lower trading activities in financial markets compared to the same period last year.
While sales revenue in the business segments Xetra and Eurex was characterized by market participants' reluctance to trade, Clearstream contributed significantly to the Group's sales revenue, with assets under custody constantly above €10 trillion and growth in its international business. Therewith, the diversified and integrated business model has once again proven itself. Overall, Group sales revenue decreased to €515.6 million (Q2/2008: €585.5 million, -12%) compared to the second quarter of record year 2008. Net Interest Income from the Group's banking business fell to €25.9 million (Q2/2008: €59.2 million, -56%) reflecting new historic lows in short-term interest rates.
Deutsche Börse Group continued its tight cost management in the second quarter and reiterates its cost guidance of some €1,280 million for 2009. Total costs increased as a result of investments in growth initiatives of the Group, US-dollar exchange rate effects, the consolidation of Market News International (MNI), a SEC fee increase, an increase in stock based compensation charges due to the significant increase in Deutsche Börse's share price, as well as provisions for the planned move to a new building in Eschborn. Against these items stood the positive effects from efficiency measures as well as the liquidation of provisions in the context of the restructuring and efficiency program. Total costs in the second quarter stood at €322.5 million (Q2/2008: €297.0 million, +9%).
Overall, Deutsche Börse generated €248.8 million in EBITA in the second quarter 2009 (Q2/2008: €375.1 million, -34%). Net income amounted to €164.9 million (Q2/2008: €249.4 million, -34%). This includes the positive effects of a reduction in the effective Group tax rate compared to financial year 2008. Based on the average number of 185.8 million shares outstanding in the second quarter 2009, basic earnings per share decreased to €0.89 (Q2/2008: €1.30 based on 191.9 million shares, -32%).
On a consolidated basis, in H1/2009, sales revenue decreased to €1,055.4 million (H1/2008: €1,230.0 million, -14%). Costs of €620.1 million in the first half of 2009 (H1/2008: €613.1 million, +1%) demonstrate the positive effects of the efficiency measures undertaken by the Group, while investments in growth initiatives were increased. EBITA amounted to €560.4 million (H1/2008: €800.9 million, -30%). Net income for the first half of 2009 amounted to €370.8 million (H1/2008: €553.6 million, -33%), based on an effective Group tax rate of some 27 percent (H1/2008: some 29 percent). Basic earnings per share amounted to €2.00 (H1/2008: €2.88, -31%).
The stable financial position and excellent credit rating profile of the Group are a result of the continued high profitability and cash generation. No decision has been made on resuming share buybacks in 2009. The Capital Management Policy of the Group including Deutsche Börse's general commitment to distributions remains unchanged.
Reto Francioni, CEO of Deutsche Börse AG and interim CFO, said, "Despite continued reluctance of market participants in the cash and derivatives markets compared to record year 2008, we were able to achieve a solid result for the first half year 2009. Deutsche Börse Group has once again proven that due to tight cost management it can be successful in declining markets. At the same time, we invest in growth initiatives which contribute to the stability and integrity of financial markets."
Persisting uncertainty in the financial markets and the resulting reluctance shown by market participants had a negative effect on trading volumes in the Xetra segment. The number of transactions on the electronic trading system Xetra fell to 43.2 million (Q2/2008: 46.6 million transactions, -7%). The single-counted order book turnover fell to €265.0 billion (Q2/2008: €475.8 billion, -44%). As a result, sales revenue fell to €63.1 million in the second quarter (Q2/2008: €91.2 million, -31%). Consequently EBITA decreased to €26.3 million (Q2/2008: €51.4 million, -49%).
The Eurex segment reported a 14 percent decline in trading activity to 709.5 million contracts traded (Q2/2008: 822.3 million). While equity and index derivatives showed a combined decrease of 9 percent, contained by strong equity option volumes at ISE, interest rate derivatives dropped by 31 percent. The reduction in trading activity for interest rate derivatives is particularly due to the low interest rates and the persisting interest rate differential between European government bonds. As a result, sales revenue fell to €201.0 million (Q2/2008: €233.2 million, -14%), EBITA decreased to €97.5 million (Q2/2008: €138.9 million, -30%).
Clearstream revenue have significantly contributed to the result of the Group. In the custody business of the Clearstream segment, the average value of the securities held in custody was consistently above the €10 trillion mark again in the second quarter, however, down 5 percent to €10.2 trillion compared to the same period last year (Q2/2008: €10.7 trillion). The value of international securities held in custody rose by 8 percent to €5.4 trillion and the value of the domestic securities fell by 16 percent to €4.8 trillion - largely as a result of lower equity index levels compared to the same period last year. The number of settlement transactions fell as a result of the reduced equity trading activity to 25.4 million (Q2/2008: 26.4 million, -4%). Of those transactions, 5.8 million were recorded in international securities traded off-exchange - an increase of 7 percent over the prior-year period. The average monthly outstanding volume in Global Securities Financing (GSF) services increased to €484.8 billion (Q2/2008: €391.7 billion, +24%). Against this background, sales revenue in the Clearstream segment was 5 percent below the level of the prior-year period at €181.1 million (Q2/2008: €191.6 million). Despite significantly higher cash balances of €7.9 billion in the second quarter 2009 (Q2/2008: €5.4 billion, +46%), net interest income decreased to €25.9 million (Q2/2008: €59.2 million, -56%), due to new historic lows in short-term interest rates. Consequently, EBITA of the segment fell to €94.0 million (Q2/2008: €133.8 million, -30%).
Business performance in the Market Data & Analytics segment was stable. Sales revenue increased slightly to €46.6 million (Q2/2008: €45.7 million, +2%). Higher data traffic as well as the consolidation of the US financial news agency Market News International Inc. (MNI), which was acquired in Q1/2009, compensated for a decrease in issuance of structured products as well as a reduction in the number of data package subscribers. EBITA in this segment was stable at €26.5 million (Q2/2008: €26.3 million, +1%), among others a result of the higher at equity contribution of STOXX Limited.
External sales revenue in the Information Technology segment remained constant at €23.8 million in the second quarter 2009 (Q2/2008: €23.8 million). EBITA in this segment decreased to €27.4 million (Q2/2008: €29.0 million, -6%) due to an increase in costs, primarily as a result of increased investments in growth initiatives.