Sales revenue increased by 3 percent to €519.2 million over the previous quarter (Q4/2009) despite continued reluctance of market participants. Total costs for the first quarter 2010 stood at €298.8 million. Adjusted for restructuring expenses of €27.8 million relating to measures to increase the operating efficiency, which were announced in February 2010, costs were below the 2009 level. Earnings before interest and tax (EBIT) amounted to €245.6 million. Adjusted for restructuring expenses, EBIT stood at €273.4 million, a considerable increase over previous quarters.

Gregor Pottmeyer, CFO of Deutsche Börse AG, said, "In the first quarter 2010 we achieved an increase of sales revenue over the previous quarters. The implementation of the efficiency measures we communicated in the first quarter is on track. The company is thus well positioned to benefit from a further recovery of financial markets."

Q1/2010 results

Sales revenue of Deutsche Börse Group stood at €519.2 million in the first quarter of 2010. This corresponds to a decrease of 4 percent compared to the same quarter of the previous year (Q1/2009: €539.8 million) and an increase of 3 percent compared to the previous quarter (Q4/2009: €505.4 million). The year-over-year decrease in sales revenue is largely due to uncertainties on the markets in the first quarter 2009 as a result of the financial crisis and the considerably higher equity volatility this has caused. The quarter-on-quarter rise in sales revenue is due to a partial recovery in market activity; however the market environment overall continues to be characterized by reluctance of market participants.

In addition to sales revenue, the Group generated a further €11.0 million in net interest income from banking business, 66 percent less than in the same quarter in the previous year and 38 percent less than the previous quarter (Q1/2009: €31.9 million, Q4/2009: €17.7 million). The decline is the result of the persistent drop in short-term interest rates, which have fallen to new historic lows, the expiry of interest rate hedges, and term investments reaching maturity.

Since 1 January 2010 own expenses capitalized are no longer reported as a separate revenue line item on the consolidated income statement. Furthermore, expenses incurred in connection with internal development activities comprise only non-capitalized amounts. This change results in a decrease of both total revenue and cost by around €40 million in 2010 and thus does not impact earnings. This change also harmonizes the effects of acquired and internally developed intangible assets on the consolidated income statement. The prior period figures were adjusted accordingly.

Total costs of €298.8 million were slightly above the level of the first quarter of the previous year (Q1/2009: €288.5 million), but included €27.8 million restructuring expenses relating to the measures to increase operating efficiency announced in February 2010. Adjusted for this effect, costs amounted to €271.0 million and were thus below both the level for the same quarter of the previous year as well as for the previous quarter. Concerning costs, the company distinguishes between volume related and operating costs since the first quarter 2010. Volume related costs stood at €54.0 million and operating costs at €244.8 million during the reporting period. Operating costs excluding restructuring expenses stood at €217.0 million.

The result from equity investments at €1.7 million was below that of 2009. In 2009, the result from equity investments still included the contribution of Stoxx Ltd. Since the full consolidation as at 31 December 2009, the Stoxx contribution to sales revenue and cost has been included in the Market Data & Analytics segment. The contribution from Scoach Holding is included in the result from equity investments since the deconsolidation of the Scoach subgroup as at 31 December 2009.

Overall, Deutsche Börse Group achieved EBIT of €245.6 million, a decline of 21 percent over the same quarter of the previous year (Q1/2009: €311.6 million). Adjusted for restructuring expenses, EBIT stood at €273.4 million, which is a considerable increase over previous quarters.

The net financial result for the first quarter 2010 was €-22.9 million, reflecting in particular interest payments in connection with the ISE financing concluded in 2008. The interest coverage ratio, adjusted for restructuring expenses, stood at 16.6 for the first quarter 2010. The Group's effective tax rate was 27.0 percent in the first quarter 2010 and thus at the same level as 2009. The improvement in the group tax rate since the second half of 2008 reflects the relocation of staff to Eschborn. Non-controlling interests, through which profit and losses of subsidiaries are shared with minority shareholders, of €-5.7 million stood at the level of Q1 2009.

Net income for the first quarter 2010 was €156.9 million, compared to €205.9 million in Q1 2009, a decline of 24 percent. Adjusted for restructuring expenses, net income amounted to €177.2 million. Basic earnings per share declined in the first quarter of 2010, based on the weighted average of 185.9 million outstanding shares, by 24 percent to €0.84 (Q1/2009: €1.11 with 185.8 million outstanding shares). Adjusted for restructuring expenses, basic earnings per share were €0.95. The basic operating cash flow for the Group stood at €1.62 per share, confirming the continued high earnings power of the Group.

Segment reporting

Deutsche Börse Group has simplified its segment structure since the first quarter 2010. In this context, the Information Technology (IT) and the Corporate Services segments were assigned to the Xetra, Eurex, Clearstream and Market Data & Analytics segments. As a result, external IT sales revenue was allocated to the Xetra, Eurex and Clearstream segments, and costs for IT and Corporate Services allocated to the four remaining segments according to the actual usage. To ensure comparability of financial figures, the Q1 2009 figures were retroactively adjusted in accordance with the new segment structure.

The improvement in the economic environment in the first quarter 2010 had a positive effect on investor confidence and index levels. This caused a 17 percent rise in order book turnover on the Xetra electronic trading platform over the same quarter in 2009, to €299.1 billion, and a 12 percent increase of volumes on the trading floor in Frankfurt to €16.4 billion. Nevertheless, segment sales revenue declined overall by 12 percent to €65.0 million (Q1/2009: €74.1 million), as the Scoach subgroup was de-consolidated as at 31 December 2009. Adjusted for the de-consolidation of Scoach, sales revenue increased by 6 percent in the first quarter 2010. The contribution of the Scoach subgroup has been included in the result from equity investments of the Xetra segment since Q1 2010. EBIT for the segment stood at €26.2 million (Q1/2009: €29.6 million) and thus 11 percent below that of the previous year. Adjusted for restructuring expenses, EBIT for the segment stood at €32.2 million.
In the Eurex segment, trading volume in the first quarter 2010 fell as against the previous year by 6 percent to 652.0 million contracts. The decline is due in particular to weaker development in European index derivatives and US options, which could not be offset by an increase in interest rate derivatives. European index derivatives posted a 13 percent decline over Q1 2009 to 200.0 million contracts, largely because of the marked decline in equity volatility. In European equity derivatives, 105.9 million contracts were traded, which corresponds to a decline of 2 percent. In European interest rate derivatives, the number of contracts traded rose by 26 percent to 145.6 million due to changed expectations concerning inflation and interest rate development. As regards the US options traded on the International Securities Exchange, the number of contracts traded declined by 18 percent to 199.2 million as a result of a continued highly competitive environment. Based on this, sales revenue in the Eurex segment fell by 6 percent to €213.8 million (Q1/2009: €227.9 million) and EBIT amounted to €118.8 million, a decline of 23 percent year-over-year (Q1/2009: €154.4 million). Adjusted for restructuring expenses, EBIT for the segment stood at €126.4 million.

In the Clearstream segment, the average value of the securities held in custody increased by 7 percent in Q1 2010 to €10.7 trillion. The rise is due, for one thing, to higher market valuations on the equity markets as well as to higher issue activity on the bond markets. Thus, the value of domestic securities held in custody rose by 7 percent to €5.0 trillion and the value of international securities held in custody also rose to €5.7 trillion, or a 7 percent increase. The number of settlement transactions rose by 16 percent to 27.9 million due to an increase in both domestic as well as international transactions. Average outstanding volumes in Global Securities Financing rose by 9 percent to €490.8 billion due to continued high demand for secured securities financing services.

The positive development in business activity did not have a corresponding effect on sales revenue due to changes in the product mix, customer consolidation and a price reduction for settling German securities as at 1 July 2009. All in all, sales revenue in the Clearstream segment for the first quarter decreased by 1 percent to €187.9 million compared to the same period the previous year (Q1/2009: €189.0 million). In addition to sales revenue, the Clearstream segment generated a further €11.0 million in net interest income from banking business (Q1/2009: €31.9 million). This results in EBIT for Q1 2010 of €70.6 million, a 29 percent decrease over the same period the previous year (Q1/2009: €99.3 million). Adjusted for restructuring expenses, EBIT for the segment stood at €83.6 million.

Sales revenue in the Market Data & Analytics segment for Q1 2010 was, at €52.5 million, 8 percent above that of the same period the previous year (Q1/2009: €48.8 million). The increase is due to consolidation of the Swiss index provider Stoxx Ltd. as at 31 December 2009 and Need to Know News, LLC as at 20 November 2009. Adjusted for the consolidation effects, sales revenue decreased by 6 percent in Q1 2010. EBIT for the segment was €30.0 million, or 6 percent above the same period the previous year (Q1/2009: €28.3 million), due to the consolidation effects. Adjusted for provisions for restructuring expenses, EBIT for the segment stood at €31.2 million.

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