Annual report
2018
www.deutsche-boerse.com
1
Deutsche Börse Group | Annual report 2018 Annual report 2018
Contents
3
5
Deutsche Börse Group: key figures
Deutsche Börse Group:
an overview
197
Consolidated financial
statements / notes
198
199
200
202
204
206
254
268
312
347
348
Consolidated income statement
Consolidated statement of comprehensive
income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes
in equity
Basis of preparation
Consolidated income statement disclosures
Consolidated balance sheet disclosures
Other disclosures
Responsibility statement by the Executive
Board
Independent Auditor’s Report
356
357
362
363
364
Deutsche Börse Group worldwide
Glossary
Acknowledgements / contact /
registered trademarks
About this report
Financial calendar
8
Executive and
Supervisory Board
8
12
14
16
Letter from the CEO
The Executive Board
The Supervisory Board
Report of the Supervisory Board
27
Combined
management report
28
42
43
86
86
111
136
143
150
157
180
Fundamental information about the Group
Deutsche Börse AG shares
Report on economic position
Report on post-balance sheet date events
Combined non-financial statement
Risk report
Report on opportunities
Report on expected developments
Deutsche Börse AG
(disclosures based on the HGB)
Remuneration report
Combined corporate governance statement
and corporate governance report
Annual report 2018
Contents
3
Deutsche Börse Group: key figures
5
Deutsche Börse Group:
an overview
197
Consolidated financial
statements / anhang
198
199
Consolidated income statement
Consolidated statement of comprehensive
income
200
Consolidated balance sheet
202
Consolidated cash flow statement
204
Consolidated statement of changes
in equity
Basis of preparation
Consolidated income statement disclosures
Consolidated balance sheet disclosures
Other disclosures
Responsibility statement by the Executive
Board
348
Independent Auditor’s Report
Glossary
Acknowledgements / contact /
registered trademarks
About this report
Financial calendar
206
254
268
312
347
356
357
362
363
364
8
Executive and
Supervisory Board
8
Letter from the CEO
12
The Executive Board
14
The Supervisory Board
16
Report of the Supervisory Board
27
Combined
management report
28
42
Deutsche Börse AG shares
43
Report on economic position
86
Report on post-balance sheet date events
86
Combined non-financial statement
111
Risk report
136
143
150
Report on opportunities
Report on expected developments
Deutsche Börse AG
(disclosures based on the HGB)
157
Remuneration report
180
Combined corporate governance statement
and corporate governance report
Fundamental information about the Group
Deutsche Börse Group worldwide
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information
Deutsche Börse Group: key figures (part 1)
Consolidated income statement
Net revenue
thereof net interest income from banking business
Operating costs (excluding depreciation, amortisation and impairment losses)
Earnings before interest, tax, depreciation and amortisation (EBITDA)
Depreciation, amortisation and impairment losses
Net profit for the period attributable to Deutsche Börse AG shareholders
Earnings per share (basic)
Consolidated cash flow statement
Cash flows from operating activities
Consolidated balance sheet
Non-current assets
Equity
Financial liabilities measured at amortised cost
Performance indicators
Dividend per share
Dividend payout ratio
Employees (annual average FTEs)
Personnel expense ratio (staff costs / net revenue)
Tax rate
Return on shareholders’ equity (annual average)5)
Gross debt / EBITDA
Interest coverage ratio
Deutsche Börse shares
Opening price6)
High7)
Low7)
Closing price
2018
2017
Change
in %
13
54
18
− 6
32
− 6
− 5
23
44
0
35
10
− 8
4
15
0
17
− 14
25
€m
€m
€m
€m
€m
€m
€
2,779.7
2,462.3
204.5
132.6
− 1,340.2
− 1,131.6
1,443.2
1,528.5
210.5
824.3
4.46
159.9
874.3
4.68
€m
1,298.2
1,056.2
€m
€m
€m
15,642.0
10,883.7
4,963.4
4,959.4
2,283.2
1,688.41)
€
%
%
%
%
%
€
€
€
€
2.702)
493)4)
2.45
533)
5,397
5,183
30
27.03)
213)
1.2
40.8
26
27.03)
183)
1.4
32.7
96.80
121.15
95.30
104.95
77.54
100.25
74.27
96.80
1) Bonds that will mature in the following year are reported under “other current liabilities” (2017: €599.8 million).
2) Proposal to the Annual General Meeting 2019
3) Adjusted for exceptional effects; please refer to the consolidated financial statements of the respective year for adjustment details.
4) Amount based on the proposal to the Annual General Meeting 2019
5) Net profit for the period attributable to Deutsche Börse AG shareholders / average shareholders’ equity for the financial year based
on the quarter-end balance of shareholders’ equity
6) Closing price on preceding trading day
7) Intraday price
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages
may not precisely reflect the absolute figures.
2
3
3
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information
Deutsche Börse Group: key figures (part 2)
2018
2017
Change
in %
Market indicators
Xetra®, Frankfurt Stock Exchange and Tradegate
Trading volume (single-counted)
€bn
1,719.6
1,467.6
Eurex®
Number of contracts
Clearstream
Assets under custody (annual average)
Investment fund services
Assets under custody (annual average)
Transparency and stability key figures
Proportion of companies reporting in accordance
with maximum transparency standards8)
Number of calculated indices
Number of sustainable index concepts
System availability of cash market trading system9)
System availability of derivatives market trading system9)
m
1,951.8
1,675.9
€bn
11,302.7
11,245.9
€bn
2,384.9
2,218.7
%
%
%
91
91
11,547
12,422
131
99.912
99.963
23.5
117
99.968
99.967
20.6
Average monthly cleared volumes across all products10)
€ trillion
8) Ratio of the market capitalisation of companies listed in the Prime Standard for shares to the market capitalisation of all companies
listed on Frankfurter Wertpapierbörse (FWB®, the Frankfurt Stock Exchange)
9) System availability ranks amongst the most important non-financial performance indicators as defined in DRS 20 and section 289 (3) in
conjunction with section 289 (1) sentence 3 of the HGB for which a forecast is made.
10) Average monthly clearing volume, including exchange-traded and OTC derivatives, as well as securities and repo transactions.
Clearing volumes are subject to double counting.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages
may not precisely reflect the absolute figures.
17
16
1
7
0
− 7
12
14
4
4
Trading volume (single-counted)
€bn
1,719.6
1,467.6
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information
Deutsche Börse Group: key figures (part 2)
Market indicators
Xetra®, Frankfurt Stock Exchange and Tradegate
Eurex®
Number of contracts
Clearstream
Assets under custody (annual average)
Investment fund services
Assets under custody (annual average)
Transparency and stability key figures
Proportion of companies reporting in accordance
with maximum transparency standards8)
Number of calculated indices
Number of sustainable index concepts
System availability of cash market trading system9)
System availability of derivatives market trading system9)
2018
2017
Change
in %
m
1,951.8
1,675.9
€bn
11,302.7
11,245.9
€bn
2,384.9
2,218.7
%
%
%
91
91
11,547
12,422
131
99.912
99.963
23.5
117
99.968
99.967
20.6
17
16
1
7
0
− 7
12
14
Average monthly cleared volumes across all products10)
€ trillion
8) Ratio of the market capitalisation of companies listed in the Prime Standard for shares to the market capitalisation of all companies
listed on Frankfurter Wertpapierbörse (FWB®, the Frankfurt Stock Exchange)
9) System availability ranks amongst the most important non-financial performance indicators as defined in DRS 20 and section 289 (3) in
conjunction with section 289 (1) sentence 3 of the HGB for which a forecast is made.
10) Average monthly clearing volume, including exchange-traded and OTC derivatives, as well as securities and repo transactions.
Clearing volumes are subject to double counting.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages
may not precisely reflect the absolute figures.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information
Deutsche Börse Group: an overview
As an international exchange organisation and innovative market infrastructure provider, Deutsche Börse
Group offers its customers a wide range of products, services and technologies covering the entire
value chain of financial markets. Its business areas include pre-trading, i.e. the provision of indices and
dissemination of market data, services for trading and clearing (settlement) of investment instruments,
and post-trading, i.e. custody of securities and other financial instruments, as well as services for collateral
management and liquidity management. In addition, the Group develops state-of-the-art IT solutions
and offers IT systems all over the world.
Pre-trading
Index business
Data business
Trading & clearing
Financial derivatives
Commodities
Currency trading
Securities trading
Information
technology
Post-trading
(settlement and
custody)
Investment fund
services
Collateral
management
Post-trading
Pre-trading
To be successful on the capital markets, institutional and retail investors alike rely on up-to-the-minute, accurate
information. Deutsche Börse Group assists its clients around the world in their investment decisions by providing
a wide range of intelligent, data-driven products and index families. This includes offerings that facilitate proactive
sustainable investment.
Index business: Indices provide transparent, reliable information on trends in companies’ share prices within specific
sectors, countries or regions, offering an indicator of their business success. They also serve as a benchmark for
assessing investment strategies. Deutsche Börse Group’s indices are designed and calculated by its subsidiary
STOXX Ltd. The company’s comprehensive and innovative offering gives investors a wide range of opportunities
to analyse the situation on the international capital markets and invest in specific strategies. Issuers can build
on this rich assortment to launch financial products for a very wide variety of different investment approaches.
STOXX provides them with smart data and enables them to customise indices to meet individual needs.
Our brands: DAX®, STOXX®
4
5
5
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information
Data business: Reliable, high-quality market information is essential for ensuring trust in the capital markets.
Deutsche Börse Group turns raw data – such as the large volumes generated continuously by its trading and
clearing platforms – into smart, enriched data streams. The core products here are order book data from the
cash and futures markets. The Group’s Data (Data Business) segment combines marketing of licences for
real-time and historical trading data and providing analytics. Regulatory reporting services round off its market
information offering.
Our brand: Deutsche Börse
Trading & clearing
Trading and clearing of investment instruments is at the heart of capital market activities. Deutsche Börse Group
organises and operates regulated markets for securities, derivatives, commodities, currencies and other asset
classes. Once transactions have closed, the Group’s clearing houses ensure they are fulfilled. This reduces the
default risk for buyers and sellers alike and is more efficient for clients.
Financial derivatives: Derivatives can be used to mitigate market and price risk. This process, which is known
as “hedging”, improves planning certainty not only for companies but also for all market participants, and by
doing so boosts macroeconomic growth. Deutsche Börse’s Eurex Exchange is one of the world’s largest markets
for financial derivatives trading. It also increasingly offers a way of “futurising” instruments that were previously
only traded bilaterally, along with clearing services for OTC transactions. Both of these offerings serve to increase
the security and stability of the capital markets.
Our brands: Eurex®, Eurex Clearing, Eurex Repo®
Commodities: Commodity prices are often highly volatile, but such price swings can be hedged using deriva-
tives. Deutsche Börse Group’s EEX Group operates leading European marketplaces for electricity and gas prod-
ucts and a regulated, transparent market for emissions trading certificates. Greenhouse gas emitters can trade
these certificates to buy or sell insufficient or surplus emissions rights, while at the same time regulators can fix
the total volume of greenhouse gas emissions and so optimise the economic benefit. In the area of electricity
trading, EEX’s markets help increase the proportion of renewable energies. Examples of this are new derivatives
with which market participants can hedge increasing price spikes and weather risks.
Our brands: European Commodity Clearing, European Energy Exchange, Nodal Clear, Nodal Exchange,
PEGAS®, Powernext
Currency trading: The currency market is one of the most actively traded financial markets in the world. Electronic
foreign-exchange (FX) trading is on the rise worldwide, and the 360T® platform from Deutsche Börse Group’s
subsidiary of the same name is one of the pioneers in this field. 360T is constantly expanding its trading systems’
functionality, opening up a steady stream of new opportunities for clients that were previously unavailable in
foreign exchange trading, such as an electronic trading book and central clearing.
Our brand: 360T®
Securities trading: The origins of exchanges can be traced back to securities trading. Deutsche Börse Group’s
Xetra® is the global reference market for German stocks and the European number one for trading exchange-
traded funds (ETFs). The Group also operates the Frankfurter Wertpapierbörse (FWB®, the Frankfurt Stock
Exchange), which offers a variety of segments and transparency standards for the admission and listing of
securities of large and small enterprises operating on a national or international level. Its services in this area
are rounded off by a number of pre-market initiatives. As a result, Deutsche Börse Group makes a significant
contribution to financing the real economy and to promoting innovation in Germany and Europe.
Our brands: Börse Frankfurt, Deutsche Börse, Deutsche Börse Cash Market, Deutsche Börse Venture Network®,
FWB®, Tradegate, Xetra®
6
6
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information
information offering.
Our brand: Deutsche Börse
Trading & clearing
Data business: Reliable, high-quality market information is essential for ensuring trust in the capital markets.
Deutsche Börse Group turns raw data – such as the large volumes generated continuously by its trading and
clearing platforms – into smart, enriched data streams. The core products here are order book data from the
cash and futures markets. The Group’s Data (Data Business) segment combines marketing of licences for
real-time and historical trading data and providing analytics. Regulatory reporting services round off its market
Trading and clearing of investment instruments is at the heart of capital market activities. Deutsche Börse Group
organises and operates regulated markets for securities, derivatives, commodities, currencies and other asset
classes. Once transactions have closed, the Group’s clearing houses ensure they are fulfilled. This reduces the
default risk for buyers and sellers alike and is more efficient for clients.
Financial derivatives: Derivatives can be used to mitigate market and price risk. This process, which is known
as “hedging”, improves planning certainty not only for companies but also for all market participants, and by
doing so boosts macroeconomic growth. Deutsche Börse’s Eurex Exchange is one of the world’s largest markets
for financial derivatives trading. It also increasingly offers a way of “futurising” instruments that were previously
only traded bilaterally, along with clearing services for OTC transactions. Both of these offerings serve to increase
the security and stability of the capital markets.
Our brands: Eurex®, Eurex Clearing, Eurex Repo®
Commodities: Commodity prices are often highly volatile, but such price swings can be hedged using deriva-
tives. Deutsche Börse Group’s EEX Group operates leading European marketplaces for electricity and gas prod-
ucts and a regulated, transparent market for emissions trading certificates. Greenhouse gas emitters can trade
these certificates to buy or sell insufficient or surplus emissions rights, while at the same time regulators can fix
the total volume of greenhouse gas emissions and so optimise the economic benefit. In the area of electricity
trading, EEX’s markets help increase the proportion of renewable energies. Examples of this are new derivatives
with which market participants can hedge increasing price spikes and weather risks.
Our brands: European Commodity Clearing, European Energy Exchange, Nodal Clear, Nodal Exchange,
PEGAS®, Powernext
Currency trading: The currency market is one of the most actively traded financial markets in the world. Electronic
foreign-exchange (FX) trading is on the rise worldwide, and the 360T® platform from Deutsche Börse Group’s
subsidiary of the same name is one of the pioneers in this field. 360T is constantly expanding its trading systems’
functionality, opening up a steady stream of new opportunities for clients that were previously unavailable in
foreign exchange trading, such as an electronic trading book and central clearing.
Our brand: 360T®
Securities trading: The origins of exchanges can be traced back to securities trading. Deutsche Börse Group’s
Xetra® is the global reference market for German stocks and the European number one for trading exchange-
traded funds (ETFs). The Group also operates the Frankfurter Wertpapierbörse (FWB®, the Frankfurt Stock
Exchange), which offers a variety of segments and transparency standards for the admission and listing of
securities of large and small enterprises operating on a national or international level. Its services in this area
are rounded off by a number of pre-market initiatives. As a result, Deutsche Börse Group makes a significant
contribution to financing the real economy and to promoting innovation in Germany and Europe.
Our brands: Börse Frankfurt, Deutsche Börse, Deutsche Börse Cash Market, Deutsche Börse Venture Network®,
FWB®, Tradegate, Xetra®
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information
Post-trading
Once securities have changed hands and have been assigned to the correct account, they have to be held in
custody and managed. Within Deutsche Börse Group, this is the responsibility of post-trade services provider
Clearstream. Additional services such as securities lending, collateral management and fund services ensure
efficient liquidity management and compliance with regulatory requirements. Securities held in custody fulfil a
wide range of functions and increase liquidity, so that post-trade services make a decisive contribution to capital
market transactions’ stability and efficiency.
Post-trading (settlement and custody): Ensuring securities are correctly settled (i.e. credited to the accounts
concerned) and held in safe custody for banks and their clients is crucial for reliable capital market operations.
Clearstream – the market leader in this area with decades of experience – operates Germany’s Central Securities
Depository (CSD). This is the largest CSD (measured in terms of volume) in the eurozone and one of the two
international central securities depositories (ICSDs) located in Europe. Innovative technologies such as blockchain
are playing a more and more important role in the custody business, and Deutsche Börse Group is a trendsetter
in this area.
Our brands: Clearstream, LuxCSD, REGIS-TR
Investment fund services: Investment fund services (IFSs) are essential for capital market efficiency, since they
add significant value and also support other services (such as securities lending and collateral management)
by improving market quality. Deutsche Börse Group’s IFS growth area combines the settlement and custody of
exchange-traded funds, investment funds and hedge funds. The Group’s fund processing platform, Vestima®,
provides one-stop settlement and custody services for clients.
Our brands: Clearstream, Vestima®
Collateral management: Collateral management and securities lending lead to gains in market efficiency and
cover a whole range of asset classes. They are growth areas for Deutsche Börse Group’s post-trading operations
alongside Global Securities Financing (GSF). Deutsche Börse Group has established a service designed to max-
imise integration of client order books. This offering, which will be further expanded going forward, focuses on
ensuring the fluidity of, and optimising, assets held in custody. This allows clients to leverage the various securities
in their accounts and hence makes markets across the world more efficient and more stable.
Our brands: Clearstream, Eurex Clearing, Eurex Repo®
Information technology
Market infrastructure exchanges are, first and foremost, technology businesses. State-of-the-art IT solutions are at
the heart of all Deutsche Börse Group’s offerings – in pre-trading, trading, and post-trading alike. The Group is
adopting innovative approaches to enhancing its systems; among other things, it is constructing a secure cloud infra-
structure that meets all regulatory requirements. Reliability – i.e. the continuous operation of all its systems – is
the top priority. Without this, there would be no transparent pricing or safe custody. Innovations such as new data
products and artificial intelligence (AI) offerings only add value if they are reliable.
Our brands: Deutsche Börse, 7 Market Technology®: C7®, F7®, M7®, N7®, T7®
6
7
7
Executive and Supervisory Boards | Letter from the CEO
Management report
Financial statements
Notes
Further information
Letter from the CEO
Theodor Weimer
Chief Executive Officer
8
Deutsche Börse Group | Annual report 2018 Deutsche Börse Group | Annual report 2018
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | Letter from the CEO
Management report
Financial statements
Notes
Further information
Frankfurt / Main, 8 March 2019
Dear shareholders,
Ladies and Gentlemen,
The past year 2018 marks Deutsche Börse’s return to a path of strong growth and its good reputation.
With the presentation of our “Roadmap 2020” to the capital markets on 30 May 2018, we have given
our company a new sense of direction – both internally and externally. In formulating this strategy, our
aim was to demonstrate that we can achieve a significant level of organic growth while maintaining our
position in a challenging, globally competitive environment.
We have indeed achieved this on all fronts. In the 2018 financial year, we exceeded our own high
expectations, generating strong growth – often double-digit growth – in nearly all of our key divisions.
We got investments in our future off the ground and achieved our goals in the area of euro clearing
with a more than ten-fold increase in volumes while still maintaining our cost-disciplined approach.
Contrary to the trend (Deutsche Börse + 8 per cent, DAX – 18 per cent), our share price soared. There
is no clearer way to be rewarded by the market.
I would like to express my sincere thanks to all of our employees at our locations in Europe, the United
States and Asia. Together we have consolidated our position amongst the top four exchange organisations
worldwide and strengthened our position as the number one in Europe.
In 2018, our net revenue rose by 13 per cent to a record high of €2.8 billion – thereof, 6 per cent
was attributable to structural growth, 6 per cent to cyclical growth and the remaining 1 per cent to
consolidation effects. Adjusted operating costs increased by 5 per cent, fully in line with our plan.
As a result, adjusted earnings rose by 17 per cent, peaking at a record €1 billion. These figures speak
for themselves.
This report gives a detailed breakdown of these figures by business segment. In the 2018 financial
year, for the first time, we divided our businesses into nine segments instead of four in an effort to
further enhance the transparency for you, our shareholders.
Our performance figures represent important milestones within the scope of our “Roadmap 2020” –
however, they are not the only ones. Our Roadmap is comprised of three components: growth in our
existing business, growth through acquisitions, and growth through investments in new technologies.
With respect to the growth in our existing business, our figures show that we have been true to our
word with nearly all segments showing significant increases during the 2018 financial year. I am
especially pleased that we were able to exceed our structural growth target of 5 per cent. This is a
growth area where we, as the management team, can have an influence.
8
9
9
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | Letter from the CEO
Management report
Financial statements
Notes
Further information
We also completed a few smaller acquisitions in 2018, specifically in the areas of foreign-exchange
trading and investment fund services, and still see further value-creating growth opportunities ahead.
The areas where we intend to grow through acquisition are outlined in our “Roadmap 2020”.
We also made progress with respect to new technologies – the third area of our Roadmap. We are one
of today’s leading technology companies in the financial services sector, striving to shape the disruptive
transformation currently affecting our industry in a manner that benefits our clients. To achieve this,
we have launched a number of blockchain projects. Through our investment in the Luxembourg-based
provider HQLAx, we are using blockchain technology to help improve the collateral management of
high-quality and liquid securities. Such securities are increasingly in demand following the introduction
of new regulatory requirements. This innovative offer will be met with strong interest.
In addition, our projects in major technology areas such as cloud computing, big data, artificial intelli-
gence and robotics are already bearing fruit. We have assumed a pioneering role in the German
financial services sector when it comes to the use of cloud technology. Currently, we are in intense
discussions with the competent regulatory authorities and leading global cloud service providers.
We also surely owe this success to the fact that we have assembled a management team that is
actively driving our strategy forward. We have an Executive Board that is younger and has been made
stronger by the inflow of new expertise.
In order to preserve the necessary latitude for growth, better processes and new technologies, we
began to enhance our efficiency in good times with the introduction of our structural performance
improvement programme (SPIP). Although this was accompanied by painful reductions in long-term
personnel, we also welcomed new employees: 250 in Germany and 800 worldwide. This brought
our performance profile in line with competitive requirements, making us even more effective.
In the current economic environment – which has turned somewhat tougher given Europe’s uncertain
future and the danger of global trade wars – we are pleased to have achieved such solid results. It is
important for us that you, our shareholders, also share in this good performance, which is why we are
proposing the distribution of a dividend of €2.70 per share, which is 10 per cent higher than last year.
We are thus remaining true to our principle of ensuring that you, our shareholders, participate appro-
priately in our company’s success. In concrete terms, “appropriately” means distributing 49 per cent of
our net income as a dividend. The remainder will be invested in the company’s further development,
which will also benefit you in the longer term. The final decision on the dividend will be made by you
at our ordinary Annual General Meeting in May.
What does the future hold for us? After our successful business development in 2018, we are confident
and optimistic about our prospects for the current year. Nevertheless, we do not see any reason
to be complacent. The political environment bears too much uncertainty, and the signs for a general
economic downturn are becoming evident. Although we will continue to strive to our fullest for you
and our company throughout the 2019 financial year, we will not be able to repeat the unexpectedly
high earnings growth recorded in 2018 – which had far exceeded our own expectations.
10
10
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | Letter from the CEO
Management report
Financial statements
Notes
Further information
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | Letter from the CEO
Management report
Financial statements
Notes
Further information
We also completed a few smaller acquisitions in 2018, specifically in the areas of foreign-exchange
trading and investment fund services, and still see further value-creating growth opportunities ahead.
The areas where we intend to grow through acquisition are outlined in our “Roadmap 2020”.
We also made progress with respect to new technologies – the third area of our Roadmap. We are one
of today’s leading technology companies in the financial services sector, striving to shape the disruptive
transformation currently affecting our industry in a manner that benefits our clients. To achieve this,
we have launched a number of blockchain projects. Through our investment in the Luxembourg-based
provider HQLAx, we are using blockchain technology to help improve the collateral management of
high-quality and liquid securities. Such securities are increasingly in demand following the introduction
of new regulatory requirements. This innovative offer will be met with strong interest.
In addition, our projects in major technology areas such as cloud computing, big data, artificial intelli-
gence and robotics are already bearing fruit. We have assumed a pioneering role in the German
financial services sector when it comes to the use of cloud technology. Currently, we are in intense
discussions with the competent regulatory authorities and leading global cloud service providers.
We also surely owe this success to the fact that we have assembled a management team that is
actively driving our strategy forward. We have an Executive Board that is younger and has been made
stronger by the inflow of new expertise.
In order to preserve the necessary latitude for growth, better processes and new technologies, we
began to enhance our efficiency in good times with the introduction of our structural performance
improvement programme (SPIP). Although this was accompanied by painful reductions in long-term
personnel, we also welcomed new employees: 250 in Germany and 800 worldwide. This brought
our performance profile in line with competitive requirements, making us even more effective.
In the current economic environment – which has turned somewhat tougher given Europe’s uncertain
future and the danger of global trade wars – we are pleased to have achieved such solid results. It is
important for us that you, our shareholders, also share in this good performance, which is why we are
proposing the distribution of a dividend of €2.70 per share, which is 10 per cent higher than last year.
We are thus remaining true to our principle of ensuring that you, our shareholders, participate appro-
priately in our company’s success. In concrete terms, “appropriately” means distributing 49 per cent of
our net income as a dividend. The remainder will be invested in the company’s further development,
which will also benefit you in the longer term. The final decision on the dividend will be made by you
at our ordinary Annual General Meeting in May.
What does the future hold for us? After our successful business development in 2018, we are confident
and optimistic about our prospects for the current year. Nevertheless, we do not see any reason
to be complacent. The political environment bears too much uncertainty, and the signs for a general
economic downturn are becoming evident. Although we will continue to strive to our fullest for you
and our company throughout the 2019 financial year, we will not be able to repeat the unexpectedly
high earnings growth recorded in 2018 – which had far exceeded our own expectations.
We do however expect to maintain the same forecast for organic growth in the current year. Thus,
identical to our forecast for 2018, we expect net revenue from structural growth opportunities in
2019 to increase by at least 5 per cent. The financial derivatives, commodities, foreign-exchange
trading and investment fund services areas are expected to be the drivers of this growth.
Hand-in-hand with efficient cost management, we expect the adjusted net profit attributable to you as
Deutsche Börse AG shareholders in 2019 to rise by around 10 per cent. Depending on the degree
of volatility, this growth may also be slightly higher or lower. We expressly confirm our mid-term growth
expectations for an increase in adjusted net income of 10 to 15 per cent per annum on average within
the scope of our “Roadmap 2020” strategy.
All in all, I am pleased to say that the path we embarked on in 2018, with our “Roadmap 2020” as
our guide, has turned out to be the right one for Deutsche Börse Group. We will continue to follow this
path – though our expectations for 2019 are more modest following our strong performance in 2018.
Following this path also means affirming our commitment to a Group-wide sustainability strategy.
In our view, sustainability should be a natural part of capital allocation, which is why we are a member
of the United Nations Global Compact, promoting the implementation of its principles in the areas of
human rights, labour, the environment and anti-corruption.
In 2018, Deutsche Börse Group continued to institutionalise its commitment in the area of sustainable
finance. We founded the “Green and Sustainable Finance Cluster Germany” together with the Hesse
Ministry of Economics. The Cluster is comprised of leading financial institutions, which – in close dialo gue
with the real economy, policymakers, civil society and academia – have committed themselves to
designing and implementing a strategic concept to establish a sustainable financial sector in Germany.
Dear shareholders, the trust you have placed in us during the past year not only motivated us but also
compelled us to consistently strive to achieve the best we can. We have made every effort possible
to ensure you are rewarded accordingly. The market has honoured your loyalty, as well as our efforts,
with an increase in our share price, contrary to the overall trend. And while it is certainly a tall order to
surpass the level of growth achieved last year, we hope that you will continue to place your confidence
in us. As shareholders, you will be investing in the future of your company, in the future of your fortune,
and in the stability of our economy.
Yours sincerely,
Theodor Weimer
Chief Executive Officer
10
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Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information
The Executive Board
from left to right: Hauke Stars, Gregor Pottmeyer, Christoph Böhm, Thomas Book, Stephan Leithner, Theodor Weimer
12
Deutsche Börse Group | Annual report 2018 Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information
Theodor Weimer, *1959
Dr. rer. pol.
Wiesbaden
Chief Executive Officer,
Deutsche Börse AG
Christoph Böhm, *1966
(since 1 November 2018)
Dr.-Ing.
Hamburg
Member of the Executive Board and
Chief Information Officer/
Chief Operating Officer,
Deutsche Börse AG
Thomas Book, *1971
(since 1 July 2018)
Dr. rer. pol.
Kronberg im Taunus
Member of the Executive Board,
Deutsche Börse AG,
responsible for Trading & Clearing
Stephan Leithner, *1966
(since 2 July 2018)
Dr. oec. HSG
Bad Soden am Taunus
Member of the Executive Board,
Deutsche Börse AG,
responsible for Post-Trading,
Data & Index
Gregor Pottmeyer, *1962
Graduate degree in
Business Administration
(Diplom-Kaufmann)
Bad Homburg v.d. Höhe
Member of the Executive Board
and Chief Financial Officer,
Deutsche Börse AG
Hauke Stars, *1967
Engineering degree in
applied computer science
(Diplom-Ingenieurin Informatik),
MSc by research in Engineering
Königstein im Taunus
Member of the Executive Board,
Deutsche Börse AG,
responsible for Cash Market,
Pre-IPO & Growth Financing and
Human Resources /Director of
Labour Relations
Former members of
the Executive Board
Andreas Preuss, *1956
(until 31 October 2018)
Graduate degree in
Business Administration
(Diplom-Kaufmann)
Frankfurt/Main
Member of the Executive Board
and Deputy Chief Executive Officer,
Deutsche Börse AG,
Chief Information Officer/
Chief Operating Officer
Jeffrey Tessler, *1954
(until 30 June 2018)
MBA
Luxembourg
Member of the Executive Board,
Deutsche Börse AG,
responsible for Clients,
Products & Core Markets
As at 31 December 2018
(unless otherwise stated)
Detailed information about the members of the Executive Board and
their appointments to supervisory bodies of other companies or comparable
control bodies, as well as their CVs can be found on the internet under:
www.deutsche-boerse.com/execboard
12
13
13
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Supervisory Board
Management report
Financial statements
Notes
Further information
The Supervisory Board
Richard Berliand, *1962
Independent Management
Consultant, Lingfield, Surrey
Nationality: British
Board member
since 7 October 2005
Karl-Heinz Flöther, *1952
Independent Management
Consultant, Kronberg im Taunus
Nationality: German
Board member
since 16 May 2012
Matin Jetter, *1959
Member of the Management Board
IBM Corporation, New York
Senior Vice President &
Executive Officer
IBM Global Technology Services,
New York
Nationality: German
Board member
since 24 May 2018
Susann Just-Marx,1) *1988
Senior Sales Manager
European Energy Exchange AG,
Leipzig
Nationality: German
Board member
since 15 August 2018
Achim Karle,1) *1973
Staff member in the Equity &
Index Sales EMEA unit
Eurex Frankfurt AG,
Frankfurt/Main
Nationality: German
Board member
since 28 August 2018
Joachim Faber, *1950
Chairman
Independent Management
Consultant, Grünwald
Nationality: German
Board member
since 20 May 2009
Jutta Stuhlfauth,1) *1961
Deputy Chairwoman
Lawyer, M.B.A. (Wales)
Staff member in the Group
Organisational Services
department Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 16 May 2012
Nadine Absenger,1) *1975
Head of the legal department
Deutscher Gewerkschaftsbund,
National Executive Board, Berlin
Nationality: German
Board member
since 16 May 2018
Ann-Kristin Achleitner, *1966
Scientific Co-Director
Center for Entrepreneurial and
Financial Studies (CEFS)
at the Technische Universität
München (TUM), Munich
Nationality: German
Board member
since 11 May 2016
Markus Beck,1) *1964
In-House Legal Counsel
Senior Expert, staff member
in the Corporate & Regulatory
Legal section
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 15 August 2018
1) Employee representative
Cornelis Kruijssen1) *1963
Expert, staff member in
the Service Management unit
Deutsche Börse AG,
Frankfurt/Main
Nationality: Dutch
Board member
since 15 August 2018
Barbara Lambert, *1962
Independent Management
Consultant, La Rippe, Switzerland
Nationality: German, Swiss
Board member
since 16 May 2018
Joachim Nagel, *1966
Member of the Executive Board
KfW Group, Dreieich
Nationality: German
Board member
since 24 May 2018
Carsten Schäfer,1) *1967
Expert, staff member in the
Non-Financial Risk Advisory &
Oversight unit
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 28 August 2018
Gerd Tausendfreund,1) *1957
Trade union secretary in the
financial services department
ver.di national administration,
Frankfurt/Main
Nationality: German
Board member
since 16 May 2018
Amy Yip, *1951
Managing Partner
RAYS Capital Partners Limited,
Hong Kong
Nationality: Chinese (Hong Kong)
Board member
since 13 May 2015
14
14
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Supervisory Board
Management report
Financial statements
Notes
Further information
The Supervisory Board
Joachim Faber, *1950
Chairman
Independent Management
Consultant, Grünwald
Nationality: German
Board member
since 20 May 2009
Jutta Stuhlfauth,1) *1961
Deputy Chairwoman
Lawyer, M.B.A. (Wales)
Staff member in the Group
Organisational Services
department Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 16 May 2012
Richard Berliand, *1962
Independent Management
Consultant, Lingfield, Surrey
Nationality: British
Board member
since 7 October 2005
Karl-Heinz Flöther, *1952
Independent Management
Consultant, Kronberg im Taunus
Nationality: German
Board member
since 16 May 2012
Matin Jetter, *1959
Member of the Management Board
IBM Corporation, New York
Senior Vice President &
Executive Officer
Nadine Absenger,1) *1975
Head of the legal department
IBM Global Technology Services,
New York
Deutscher Gewerkschaftsbund,
Nationality: German
National Executive Board, Berlin
Board member
Nationality: German
Board member
since 16 May 2018
since 24 May 2018
Susann Just-Marx,1) *1988
Senior Sales Manager
Scientific Co-Director
Center for Entrepreneurial and
Financial Studies (CEFS)
Leipzig
Nationality: German
Board member
at the Technische Universität
since 15 August 2018
Achim Karle,1) *1973
Staff member in the Equity &
Index Sales EMEA unit
Eurex Frankfurt AG,
Frankfurt/Main
Nationality: German
Board member
in the Corporate & Regulatory
since 28 August 2018
München (TUM), Munich
Nationality: German
Board member
since 11 May 2016
Markus Beck,1) *1964
In-House Legal Counsel
Senior Expert, staff member
Legal section
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 15 August 2018
1) Employee representative
Cornelis Kruijssen1) *1963
Expert, staff member in
the Service Management unit
Deutsche Börse AG,
Frankfurt/Main
Nationality: Dutch
Board member
since 15 August 2018
Barbara Lambert, *1962
Independent Management
Consultant, La Rippe, Switzerland
Nationality: German, Swiss
Board member
since 16 May 2018
Joachim Nagel, *1966
Member of the Executive Board
KfW Group, Dreieich
Nationality: German
Board member
since 24 May 2018
Carsten Schäfer,1) *1967
Expert, staff member in the
Non-Financial Risk Advisory &
Oversight unit
Frankfurt/Main
Nationality: German
Board member
since 28 August 2018
Gerd Tausendfreund,1) *1957
Trade union secretary in the
financial services department
ver.di national administration,
Frankfurt/Main
Nationality: German
Board member
since 16 May 2018
Amy Yip, *1951
Managing Partner
RAYS Capital Partners Limited,
Hong Kong
Nationality: Chinese (Hong Kong)
Board member
since 13 May 2015
Ann-Kristin Achleitner, *1966
European Energy Exchange AG,
Deutsche Börse AG,
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Supervisory Board
Management report
Financial statements
Notes
Further information
Former members of
the Supervisory Board
Marion Fornoff,1) *1961
Staff member in the People
Relations & Employee
Engagement Germany,
Switzerland,
Czech Republic section
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
from 16 May 2012
to 15 August 2018
Hans-Peter Gabe,1) *1963
Staff member in the Performance &
Compensation, People Analytics
and Learning section
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
from 21 May 1997
to 15 August 2018
Craig Heimark, *1954
Managing Partner
Hawthorne Group LLC, Palo Alto
Nationality: US-American
Board member
from 7 October 2005
to 16 May 2018
Monica Mächler, *1956
Member of different
supervisory bodies,
Pfäffikon
Nationality: Swiss
Board member
from 16 May 2012
to 16 May 2018
Florian Rodeit, *1975
Head of Section, Finance Operations,
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member from
16 May 2018 to 15 August 2018
Erhard Schipporeit, *1949
Independent Management
Consultant, Hanover
Nationality: German
Board member
from 7 October 2005
to 16 May 2018
Johannes Witt,1) *1952
Former staff member in
the Financial Accounting &
Controlling department
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
from 21 May 1997
to 16 May 2018
As at 31 December 2018
(unless otherwise stated)
1) Employee representative
Detailed information about the members of the Supervisory Board, their additional
appointments to supervisory bodies of other companies or comparable control bodies,
as well as their CVs can be found on the internet under:
www.deutsche-boerse.com/supervboard
14
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Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
Report of the Supervisory Board
Joachim Faber
Chairman of the Supervisory Board
16
Deutsche Börse Group | Annual report 2018 Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
During the year under review, Deutsche Börse AG’s Supervisory Board discussed the company’s position
and prospects in depth, performing the tasks assigned to it by law and the company’s Articles of Asso-
ciation and bylaws. We regularly advised the Executive Board on its management of the company,
monitored its work and were involved in all fundamental decisions.
The 2018 financial year was characterised by important changes in the governing bodies. Two-thirds of
the Executive Board were reelected in the financial year, and 10 of the 16 members on the Supervisory
Board were reappointed.
We held ten plenary meetings during 2018, including three extraordinary meetings and one constituent
meeting. In addition, five workshops were held on the issues of technology (March and September);
strategy (April); legal, regulatory and compliance issues (June); and on the business performance and
strategy of our post-trading business, the Clearstream subgroup (June).
At our meetings, the Executive Board provided us with comprehensive and timely information in accord-
ance with the legal requirements. The issues discussed covered the course of business, the company’s
and the Group’s position, as well as the company’s strategy and planning (regularly including the risk
situation, risk management and compliance). We discussed all of the company’s significant transactions
in the plenary meetings and in the Supervisory Board committees based on reports provided by the
Executive Board. The high frequency of plenary and committee meetings and workshops ensured an
active exchange of information between the Supervisory Board and the Executive Board. In addition,
the CEO kept the Chairman of the Supervisory Board continuously informed of the current developments
affecting the company’s business, significant transactions, upcoming decisions and the long-term
outlook and discussed these issues with him.
The Executive Board submitted all measures to the Supervisory Board requiring Supervisory Board
approval in accordance with the law, the company’s Articles of Association and bylaws. The Supervisory
Board approved these measures. The Supervisory Board also confirmed in other respects that the
Executive Board’s actions were lawful, due and proper, and appropriate.
The average attendance rate for all Supervisory Board members at the plenary and committee meetings
was 99 per cent during the year under review. The members also attended more than half of the plenary
and committee meetings of which they were members.
17
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
The Supervisory Board members’ detailed attendance record is as follows:
Attendance of Supervisory Board members at meetings in 2018
Meetings
(incl. committees)1) Meeting attendance
Joachim Faber (Chairman)
Jutta Stuhlfauth (Deputy Chairperson since 16 May 2018)
Nadine Absenger (since 16 May 2018)
Ann-Kristin Achleitner
Markus Beck (since 15 August 2018)
Richard Berliand (Deputy Chairman until 16 May 2018)
Karl-Heinz Flöther
Marion Fornoff (until 15 August 2018)
Hans-Peter Gabe (until 15 August 2018)
Craig Heimark (until 16 May 2018)
Martin Jetter (since 24 May 2018)
Susann Just-Marx (since 15 August 2018)
Achim Karle (since 28 August 2018)
Cornelis Kruijssen (since 15 August 2018)
Barbara Lambert (since 16 May 2018)
Monica Mächler (until 16 May 2018)
Joachim Nagel (since 24 May 2018)
Florian Rodeit (from 16 May to 15 August 2018)
Carsten Schäfer (since 28 August 2018)
Erhard Schipporeit (until 16 May 2018)
Gerd Tausendfreund (until 16 May 2018)
Johannes Witt (until 16 May 2018)
Amy Yip
Average attendance rate
17
20
11
13
8
21
20
10
10
5
11
6
6
8
12
9
11
2
6
9
9
8
13
17
20
10
13
8
21
20
10
10
5
11
6
6
8
12
9
11
2
6
8
9
8
13
%
100
100
91
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
89
100
100
100
99
1) Since attendance at workshops is voluntary for Supervisory Board members, such workshops are not taken into account when calculating the average attendance rate.
Topics addressed during plenary meetings of the Supervisory Board
During the reporting period, we discussed the further strategic orientation of Deutsche Börse Group in
great detail. The Executive Board involved the Supervisory Board in the development of the “Roadmap
2020” growth strategy at an early stage, providing comprehensive advisory support. Within the scope
of the growth strategy’s implementation, we regularly discussed and provided comprehensive support
on the realignment of the business activities and the Group’s organisational structure. For details on
the growth strategy, please refer to the
“Deutsche Börse Group’s objectives and strategies” section
in the combined management report.
During the year under review, the Supervisory Board members also focused extensively on the extensive
personnel and structural changes that took place in both the Executive Board and the Supervisory Board.
18
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
It was necessary to appoint new Executive Board members to replace the two long-serving members
of the Executive Board, Jeffrey Tessler and Andreas Preuss, whose contracts had expired. The new
appointments were made within the scope of a planned, comprehensive restructuring of the company’s
Executive Board positions. As a result of the new division of responsibilities, the Executive Board
was expanded from five to six members. The three new Executive Board members appointed by the
Supervisory Board in the year under review are Thomas Book (Trading & Clearing), Stephan Leithner
(Post-Trading, Data & Index business) and Christoph Böhm as Chief Information Officer (CIO) and
Chief Operating Officer (COO). The appointments were made on the basis of a comprehensive list of
candidates and following extensive discussion, initially within the Nomination Committee and finally
in the Supervisory Board plenary meeting. Please refer to the
“Personnel matters” section for details.
Significant personnel and structural changes were also made within the Supervisory Board during the
year under review. There was a sustainable increase in employee numbers at Deutsche Börse AG and
its Group entities in Germany. Hence, the Supervisory Board has consisted of an equal number of
shareholder representatives and employee representatives, in accordance with the rules of the Mitbe-
stimmungsgesetz (MitbestG, German Co-determination Act), since the elections held at the Annual
General Meeting on 16 May 2018. The corresponding election of employee representatives was con-
cluded on 15 August 2018. Prior to this, and effective until the end of the Annual General Meeting,
six employee representatives had been appointed to the Supervisory Board on a provisional basis by
order of the court. The Annual General Meeting also resolved to extend the Supervisory Board from
12 to 16 members, thus reflecting its equal representation, the company’s growth and the more
stringent regulatory requirements of the Supervisory Board’s monitoring function. The amendment to
the Articles of Association for enlarging the Supervisory Board came into effect as at 24 May 2018.
For details on the fundamental renewal of Supervisory Board personnel within the scope of the new
elections in the year under review, please refer to the
“Personnel matters” section.
In the second half of the year, the investigation proceedings against the former CEO Carsten Kengeter
required our attention once again. These proceedings were initiated by the Public Prosecutor’s Office in
Frankfurt/Main due to an alleged violation of the insider trading ban and an alleged failure to disclose
an ad-hoc announcement. We took note of and approved the Executive Board’s decision to accept the
prospective amended fine from the Public Prosecutor to close the proceedings. This took place following
an intensive discussion with the Executive Board on its careful consideration of the benefits and draw-
backs for the company’s well-being and after in-depth consultation within the Supervisory Board.
Another key issue of our Supervisory Board work in 2018 was to address the Deutsche Börse Group’s
preparations for the pending exit of the United Kingdom from the European Union (Brexit), and the
resulting opportunities and risks. The efficiency, appropriateness and effectiveness of internal control
systems, as well as the handling of findings of internal control functions, external auditors and regulatory
authorities constituted another focal point of our work.
In addition, the Executive Board regularly informed us about Deutsche Börse AG’s share price perform-
ance and other performance indicators, as well as those of its competitors. The Executive Board also
reported on the business performance, financial position and results of operations of Deutsche Börse AG,
its affiliated companies and Deutsche Börse Group as a whole.
The Chairman of the Supervisory Board also met with institutional investors at the beginning of the year
and in autumn to discuss current governance issues concerning the Supervisory Board with them. He
provided a summary report of his dialogue with the investors in the plenary meetings.
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
Our plenary meetings and workshops during the reporting period focused particularly on the following
issues:
At our regular meeting on 19 February 2018, we addressed in detail the preliminary results for the
2017 financial year and the dividend proposed by the Executive Board for that year. We also resolved
the amount of the variable remuneration payable to the Executive Board for the 2017 financial year,
following a detailed examination. Furthermore, we adopted the corporate governance report and the
corporate governance declaration for the 2017 financial year and resolved measures to further enhance
the efficiency of the Supervisory Board’s work. We also discussed the current status of the legal proceed-
ings and actions of Clearstream Banking S.A. in the US and Luxembourg in conjunction with business
conducted with Iranian customers and assets. Other issues we addressed were the forthcoming changes
brought about by the future application of the MitbestG; we agreed to amend our bylaws as at the end
of the 2018 Annual General Meeting. Finally, we approved the refinancing of a €600 million corporate
bond set to expire in spring 2018.
Our technology workshop on 9 March 2018 focused intensely on the changes taking place in the
energy markets. We discussed possible product developments and innovations, as well as the resulting
prospects for Deutsche Börse Group.
At the regular meeting on 9 March 2018, we discussed Deutsche Börse AG’s financial statements as
well as the consolidated financial statements for 2017 and the remuneration report, in the presence of
the external auditors. We approved the 2017 financial statements and consolidated financial statements,
having carried out our own detailed examination, in line with the recommendation by the Audit Commit-
tee, which had already examined the documents in depth, in preparation for our meeting. We also adopted
the report of the Supervisory Board for 2017, the combined corporate governance statement and cor-
porate governance report in an amended version, as well as the agenda for the 2018 Annual General
Meeting. In addition, we gained a detailed overview of the business performance of the 360T and EEX
subgroups.
At the extraordinary meeting on 25 April 2018, we appointed three new members to the Executive
Board. Thomas Book was an internal candidate appointed as a member of the Executive Board for the
trading & clearing division. Stephan Leithner was appointed as Executive Board member, responsible for
the post-trading, data & index businesses, succeeding Jeffrey Tessler in post-trading. Both appointments
were effective from the beginning of July 2018 for a period of three years. Christoph Böhm was also
appointed as a member of the Executive Board. As the successor to Andreas Preuss, he assumed the
role of CIO/COO as at 1 November 2018. He was also appointed for a period of three years. Jeffrey
Tessler and Andreas Preuss agreed to resign early from the Executive Board, effective from the assump-
tion of office of the new Executive Board members.
At the strategy workshop on 25 April 2018, we had an intensive discussion with the Executive Board
about the main features of the “Roadmap 2020” growth strategy presented and its planned imple-
mentation. We also dealt with the medium-term financial planning.
At the regular meeting on 16 May 2018, we discussed the forthcoming Annual General Meeting with
the Executive Board, which was attended by Supervisory Board members Craig Heimark, Monica
Mächler, Erhard Schipporeit and Johannes Witt for the last time.
20
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
The constituent meeting of the Supervisory Board on 16 May 2018 was held immediately after the
Annual General Meeting. We agreed on the appointment of members for the existing and new Super-
visory Board committees, taking into account the regulations of the MitbestG and the resulting equal
representation on the Supervisory Board. The newly elected shareholder representatives Martin Jetter,
Barbara Lambert and Joachim Nagel attended the meeting, as did the other employee representatives
who, at that time, were court-appointed due to the employee representative election process that was
still in place. Shareholder representatives Richard Berliand and Amy Yip, who were elected by the
Annual General Meeting subject to the amendments made to the Articles of Association on expanding
the Supervisory Board to 16 members, abstained from voting until the voting process was concluded,
and all employee representatives were elected on 28 August 2018. De facto, the equal representation on
the Supervisory Board already applicable under the MitbestG was thus already ensured. Jutta Stuhlfauth
was elected as Deputy Chairperson of the Supervisory Board in her capacity as employee representative,
which also was a result of the MitbestG in place. The Supervisory Board also appointed Hauke Stars
as Director of Labour Relations with effect from 1 June 2018.
Further workshops were held as part of the Supervisory Board’s training and continuing professional
development programme. A workshop on 19 June 2018 comprehensively dealt with the strategy in the
post-trading division, with regard to Clearstream’s core business and the IFS (Investment Funds Services)
and GSF (collateral management) segments. The Supervisory Board also addressed the organisation
of and selected issues relating to risk management and compliance of the Clearstream subgroup.
At a further workshop on 20 June 2018, the Supervisory Board concerned itself with Deutsche Börse
Group’s Code of Conduct and the current regulatory strategy. The rights and obligations of the Super-
visory Board and its members were also addressed in depth.
At the regular meeting on 20 June 2018, we once again dealt with the “Roadmap 2020” growth stra-
tegy in a follow-up to the business strategy presentation at the investor day in London on 30 May 2018.
We also dealt with the measures planned to improve and speed up the exchange of data within the
Group (datafication) and the first application examples (use cases). The previous year’s audit results on
Clearstream’s and Eurex Clearing’s compliance with the Minimum Requirements for Risk Management
(MaRisk) were also discussed. We also adopted a resolution on amending the bylaws of the Executive
Board – which became necessary, among other things, due to the application of MitbestG. The Super-
visory Board also discussed the rules for Jeffrey Tessler’s departure from the Executive Board and passed
a resolution on this based on the proposal made by the Nomination Committee.
After the process for electing the employee representatives to the Supervisory Board was concluded on
15 August 2018 and the court had appointed two further employee representatives on 28 August 2018,
the Supervisory Board convened for an extraordinary meeting on 4 September 2018, once again
deciding on the appointment of members to the Supervisory Board committees. Jutta Stuhlfauth was
reelected as Deputy Chairman of the Supervisory Board.
At our technology workshop on 20 September 2018, we dealt in depth with the issue of what the core
requirements are for a software company and the significance these will have for the future of Deutsche
Börse Group.
At the regular meeting on 20 September 2018, we addressed the reorganisation of the Trading & Clearing,
Post-Trading, Data & Index reporting segments that were established during the year under review. The
Executive Board informed us about the portfolio performance of Deutsche Börse Group’s material majority
and minority interests. The Group’s Chief Compliance Officer also informed us in detail about the com-
21
19
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
pliance rules relevant to the Supervisory Board. We also dealt with the management of findings from the
regular regulatory audits of Group companies under MaRisk. Furthermore, we were informed about the
results of the audit of European Commodity Clearing AG (the EEX clearing house) conducted by the
German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin).
We also agreed on new bylaws, which were amended following reconstitution and first-time equal
representation on the Supervisory Board. Finally, we discussed the rules for the departure of Andreas
Preuss from the Executive Board and passed a resolution in accordance with the proposal put forward
by the Nomination Committee.
At the extraordinary meeting on 15 November 2018, the Executive Board informed us about the latest
developments in the investigation proceedings against the former Chief Executive Officer Carsten Kengeter
due to an alleged violation of the insider trading ban and an alleged failure to disclose an ad-hoc
announcement. The Public Prosecutor’s Office in Frankfurt/Main had previously proposed imposing an
amended 2017 fine on the company as a condition for closing the proceedings. At the time, the local
court of Frankfurt/Main had refused to approve the closure of the investigation proceedings. The Executive
Board’s decision to ultimately accept this amended fine, and the considerations on which this decision
was based, were discussed in detail. The Supervisory Board had gathered comprehensive advice on the
scope of his rights and obligations and on its margin of discretion in this matter. Finally, we acknowledged
and approved the Executive Board’s decision to come to an agreement with the Public Prosecutor’s Office.
At the regular meeting on 5 and 6 December 2018, we adopted the budget for 2019, dealt with the
cash market strategy, the IT organisation from the perspective of the new CIO/COO Christoph Böhm
(appointed in November) and addressed the organisation of customer relationships within the Group.
In addition, the Executive Board also provided us with a status report on the processing of findings
from the regulatory reviews. We discussed and adopted the results of our annual efficiency review
in accordance with section 5.6 of the Deutscher Corporate Governance Kodex (the “Code”, German
Corporate Governance Code), the annual suitability assessment of the Supervisory Board and the
Executive Board, as well as the upcoming year’s training plan for the Supervisory Board. Furthermore,
we adopted the declaration of compliance pursuant to section 161 of the Aktiengesetz (German Stock
Corporation Act, AktG) for the 2018 financial year. The declaration of compliance is available at
www.deutsche-boerse.com/declcompliance.
The Supervisory Board’s meetings in the reporting year were held at the Group’s headquarters, as well
as at other Deutsche Börse Group locations, and – for the first time – at our office in Prague. After every
meeting, we held open and effective exchanges with one other, without the presence of the Executive
Board members.
Committee work
The Supervisory Board maintained eight committees during the reporting period, whereby the Personnel
Committee and the Nomination Committee were merged with effect from 3 January 2018 with the adoption
of the revised German Stock Exchange Act. The Personnel Committee had not convened up to this time.
The committees are primarily responsible for preparing the decisions to be taken by, and topics to be
discussed in the plenary meetings. Additionally, the Supervisory Board has delegated individual decision-
making powers to the committees to the extent that this is legally permissible. The individual committee
chairs report in detail to the plenary meetings on the work performed by their committees. The Chairman
of the Supervisory Board chairs the Nomination Committee, the Strategy Committee, the Chairman’s
Committee and the Mediation Committee. The latter two were newly created with the expansion of the
Supervisory Board and the introduction of equal representation. Details on the members and duties of
22
20
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
the Supervisory Board committees in 2018 can be found in the
statement and corporate governance report” section of the combined management report. The
committees focused on the following key issues:
“Combined corporate governance
Audit Committee (six meetings during the reporting period)
Financial issues, especially capital management and tax items
Accounting: an examination of the Deutsche Börse AG annual financial statements,
consolidated financial statements, the combined management report and the audit report
in the presence of the external auditors, as well as the half-yearly financial report and the quarterly
statements
External auditors: obtaining the statement of independence from the external auditors and monitoring
the external auditors’ independence, issuing the engagement letter to the external auditors, preparing
the Supervisory Board’s proposal to the Annual General Meeting on the election of the external auditors,
agreeing on the external auditors’ fee, defining the focal areas of the audit, discussing non-audit
services rendered by the external auditors and the assignment of the external auditor to conduct an
audit of the combined non-financial statement
Internal control systems: discussion of questions relating to risk management, compliance and capital
market compliance, the internal control and audit system, discussion of the methods and systems used
and their efficiency, adequacy and effectiveness
Deutsche Börse AG’s dividend and the Group’s budget
Discussion and formal adoption of the Audit Committee’s tasks for the coming year
Preparation of the Supervisory Board’s resolution on the corporate governance and remuneration
reports as well as on the corporate governance statement in accordance with section 289f of the
Handelsgesetzbuch (HGB, German Commercial Code) and the declaration of compliance in accordance
with section 161 of the AktG
Measures to close internal and external audit findings
Deutsche Börse Group’s investments and outsourcing management
Personnel Committee (no meetings during the reporting period)
The Personnel Committee was merged with the Nomination Committee, when the revised German Stock
Exchange Act entered into force on 3 January 2018. No Personnel Committee meetings were held
during the year under review.
Nomination Committee (five meetings during the reporting period)
Executive Board remuneration: discussion of the extent to which the members of the Executive Board
had achieved their targets; determination of the variable remuneration for Executive Board members
for 2017; preliminary discussion of the extent to which individual members of the Executive Board
have achieved their targets for 2018; adoption of the individual targets for the members of the
Executive Board for 2019; discussion of the remuneration report and the share ownership guidelines
Personnel matters: discussion of succession planning for the Executive Board and the selection of candi-
dates; the preparation of a recommendation to the plenary meeting for the appointment of Christoph
Böhm, Thomas Book and Stephan Leithner as new members of Deutsche Börse AG’s Executive Board;
as well as the transfer and alignment of Thomas Book’s existing retirement benefits arrangement
Discussion and recommendation to the plenary meeting about the exit conditions for retired Executive
Board members Andreas Preuss and Jeffrey Tessler as the basis for the respective concluded
termination agreements
Discussion and recommendation on the new rules for the Performance Share Plan in the event that
an Executive Board member leaves during the course of the year
Preparations for the election of the shareholder representatives to the Supervisory Board by the
ordinary Annual General Meeting 2018
Dealing with the suitability assessment, effectiveness review and training schedule
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21
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
Risk Committee (five meetings during the reporting period, including one joint meeting with
the Technology Committee)
Discussion about the quarterly compliance and risk management reports presented
Ongoing enhancements to Group-wide compliance and risk management and the harmonisation
of internal control systems
Deutsche Börse Group’s risk strategy and risk culture
Operational risk, information security and business continuity management
Managing credit and product-specific risks
Annual report on security risks
Risk management in the Clearstream subgroup
General Data Protection Regulation (GDPR)
Discussion of the impact of potential Brexit scenarios
Strategy Committee (one meeting during the reporting period)
Discussion about Deutsche Börse Group’s strategic orientation under the “Roadmap 2020” growth
strategy and the status of implementing the growth strategy in the individual business areas
Offer for clearing interest rate swaps in the European Union (euro clearing)
Strategic discussion of major industry trends, political developments, the Group’s competitive position,
as well as organic and inorganic growth opportunities
Technology Committee (four meetings during the reporting period, including one joint meeting
with the Risk Committee)
Implementation and refinement of Deutsche Börse Group’s IT strategy
Digitalisation and implementation of associated changes to the organisational structure and enterprise
processes
Discussion of measures to be implemented to meet the MaRisk requirements
Cloud computing, cloud migration strategies, and relevant cloud security standards
Information security, IT risk management and cyber resilience
Chairman’s Committee (one meeting during the reporting period)
The Chairman’s Committee convenes on the initiative of the Chairman of the Supervisory Board; it deals
with time-sensitive affairs and prepares the corresponding Supervisory Board plenary meetings. During
the year under review, the Chairman’s Committee determined the manner in which the Supervisory
Board dealt with the developments in the investigation proceedings against former CEO Carsten Kengeter.
Mediation Committee (no meetings during the reporting period)
The Mediation Committee is set up by law. Pursuant to section 31(3) of the MitbestG, it submits
proposals to the Supervisory Board for the appointment or dismissal of Executive Board members when
a two-thirds majority has not been reached. The Mediation Committee only convenes as required. There
was no need for the Mediation Committee to hold a meeting during the year under review.
Audit of the annual and consolidated financial statements
KPMG AG Wirtschaftsprüfungsgesellschaft, domiciled in Berlin, (KPMG) audited the annual financial
statements of Deutsche Börse AG, the consolidated financial statements and the combined management
report, including the combined non-financial statement for the financial year ended 31 December 2018,
together with the accounting system, and issued an unqualified audit opinion. The condensed financial
statements and interim management report contained in the half-yearly financial report for the first six
months of 2018 were reviewed by KPMG. The documents relating to the financial statements and the
24
22
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
reports by KPMG were submitted to us for inspection and examination in good time. The lead auditors,
Klaus-Ulrich Pfeiffer and Sven-Olaf Leitz, attended the relevant meetings of the Audit Committee and the
plenary meeting of the Supervisory Board convened to approve the financial statements. The auditors
reported on the key results of the audit; in particular, they focused on the net assets, financial position
and results of operations of the company and Group and were available to provide supplementary infor-
mation. The auditors also reported that no significant weaknesses in the control and risk management
systems had been found, in particular, with respect to the financial reporting process. The audit of com-
pliance with all relevant statutory provisions and regulatory requirements did not give rise to any
objections. KPMG provided information on other services that it had rendered in addition to its audit
services. There were no grounds for suspecting that the auditors’ independence might be impaired.
The Audit Committee discussed the financial statement documents and the reports by KPMG in detail
with the auditors and examined them carefully itself. It is satisfied that the reports meet the statutory
requirements under sections 317 and 321 of the HGB in particular. The committee reported to the
Supervisory Board on its examination and recommended that it approve the annual financial statements
and consolidated financial statements.
Our own examination of the 2018 annual financial statements, the consolidated financial statements
and the combined management report, including the combined non-financial statement, in a plenary
meeting did not lead to any objections and we concurred with the results of the audit performed by the
auditors. We approved the annual financial statements prepared by the Executive Board, as well as the
consolidated financial statements, at our meeting on 8 March 2019, in line with the Audit Committee’s
recommendation. As a result, the annual financial statements of Deutsche Börse AG have been adopted.
The Audit Committee discussed the Executive Board’s proposal for the appropriation of the unappro-
priated surplus (Bilanzgewinn) in detail with the Executive Board, with particular reference to the com-
pany’s liquidity and financial planning, and taking shareholders’ interests into account. Following this
discussion and its own examination, the Audit Committee concurred with the Executive Board’s proposal
for the appropriation of the unappropriated surplus. Following our own examination, the plenary meeting
of the Supervisory Board also approved the Executive Board’s proposal.
Personnel matters
The following personnel changes were made to the Supervisory Board during the reporting period:
The scheduled term of office of the Supervisory Board ended as at the end of the Annual General
Meeting on 16 May 2018. Until this date, the Supervisory Board comprised twelve members, in
accordance with the Articles of Association. With the entry of the resolution by the ordinary Annual
General Meeting on 24 May 2018, on a corresponding amendment to the Articles of Association,
the Supervisory Board now comprises 16 members.
Three out of eight members were newly elected to the Supervisory Board from the ranks of the share-
holder representatives: Martin Jetter, Barbara Lambert and Joachim Nagel were elected as shareholder
representatives to the Supervisory Board by the Annual General Meeting for the first time. Craig Heimark,
Monica Mächler and Erhard Schipporeit did not stand for re-election and therefore their appointments
ended as at the end of the Annual General Meeting. Ann-Kristin Achleitner stood for re-election for a
one-year term of office. The remaining four members from the shareholder representatives were each
elected again for another full term of office. Martin Jetter and Joachim Nagel were elected to the Super-
visory Board, conditional upon the amendments to the Articles of Association on the expansion of the
Supervisory Board.
25
23
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Financial statements
Notes
Further information
Among the employee representatives, seven out of a total of eight were newly elected to the Supervisory
Board. These employees work in different Group companies and divisions, bringing to the Board a wealth
of specialist and practical experience from their activities. Employee representatives with experience in
supervisory matters, now also including union representatives, complement the Board’s skills profile.
Johannes Witt left the Board as at the end of the Annual General Meeting on 16 May 2018. Until the
election of the employee representatives to the Supervisory Board was concluded on 15 August 2018,
Jutta Stuhlfauth, Marion Fornoff, Hans-Peter Gabe, Florian Rodeit, Nadine Absenger and Gerd Tausend-
freund were initially appointed to the Board by court order. In accordance with the provisions of the
MitbestG, applicable as at the end of the Annual General Meeting, Florian Rodeit was appointed as senior
executive representative, while Nadine Absenger and Gerd Tausendfreund were appointed as union
representatives. On 15 August 2018, the employee representatives to the Supervisory Board were finally
determined: Jutta Stuhlfauth, Markus Beck, Susann Just-Marx, Cornelis Kruijssen, Nadine Absenger and
Gerd Tausendfreund. Since the expansion of the Supervisory Board had not yet been decided when the
employee representative election process began, employees were allowed from a legal perspective to
elect only six employee representatives directly to the Supervisory Board. On 28 August 2018, two further
employee representatives, Achim Karle and Carsten Schäfer, were appointed as further employee repre-
sentatives to the Supervisory Board by court order, according to the votes received in the election pro-
cess. Equal representation on the Board by shareholder and employee representatives was thus achieved.
We would like to sincerely thank all of the Supervisory Board members who left the Board in 2018 for
their enriching and constructive cooperation on the Supervisory Board of Deutsche Börse AG.
The following personnel changes were made with regard to the Executive Board in 2018:
As agreed in 2017, Theodor Weimer assumed his role as Chairman of the Executive Board, with effect
from 1 January 2018.
At the meeting on 25 April 2018, Thomas Book and Stephan Leithner were appointed as members
of the Executive Board as at the start of July 2018, and Christoph Böhm as at 1 November 2018.
Jeffrey Tessler and Andreas Preuss resigned as members of the Executive Board, effective 30 June and
31 October 2018, respectively. We would like to thank Mr Tessler and Mr Preuss for their many years
of valuable contributions as members of Deutsche Börse AG’s Executive Board.
Management of individual conflicts of interest
No conflicts of interest arose with regard to individual Supervisory Board members during the reporting
period.
The Supervisory Board would like to thank the Executive Board and all employees for their strong
commitment and excellent achievements in 2018.
Frankfurt/Main, 8 March 2019
For the Supervisory Board:
Joachim Faber
Chairman of the Supervisory Board
26
24
Combined management
report
28 Fundamental information about the Group
42 Deutsche Börse AG shares
43 Report on economic position
86 Report on post-balance sheet date events
86 Combined non-financial statement
111 Risk report
136 Report on opportunities
143 Report on expected developments
150 Deutsche Börse AG
(disclosures based on the HGB)
157 Remuneration report
180 Combined corporate governance statement
and corporate governance report
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
Further infomation
Combined management report
This combined management report covers both Deutsche Börse Group and Deutsche Börse AG and
includes the combined non-financial statements according to the CSR directive. It follows the requirements
of the Handelsgesetzbuch (HGB, German Commercial Code) and the Deutscher Rechnungslegungs Standard
Nr. 20 (DRS 20, German Accounting Standard No. 20). This management report also takes into account
the requirements of the Practice Statement “Management Commentary” issued by the International
Accounting Standards Board (IASB).
Fundamental information about the Group
Overview of Deutsche Börse Group
Business operations and Group structure
Deutsche Börse AG, which is headquartered in Frankfurt/Main, Germany, is the parent company of
Deutsche Börse Group. As at 31 December 2018, the Group employed 5,964 people at 37 locations
in 26 countries. As one of the largest market infrastructure providers worldwide, Deutsche Börse Group
offers its customers a wide range of products and services. These cover the entire financial market
transactions value creation chain – covering the dissemination of market information and provision of
indices (pre-trading), services for trading and transaction clearing and settlement, securities custody, as
well as services for liquidity and collateral management (post-trading). In addition, the Group develops
and operates the IT systems that support all these processes.
Deutsche Börse AG markets price and reference data of Deutsche Börse Group’s systems and platforms
as well as other trading information; it also develops and sells indices via its subsidiary STOXX Ltd. In
addition, Deutsche Börse AG operates the Eurex Exchange derivatives market via Eurex Frankfurt AG.
Commodities spot and derivatives markets are operated by the Group’s direct subsidiary European
Energy Exchange AG (EEX). Deutsche Börse AG provides a foreign-exchange trading platform via its
subsidiary 360 Treasury Systems AG (360T); the Group operates the cash market at Frankfurter Wert-
papierbörse (FWB®, the Frankfurt Stock Exchange) with its fully electronic trading venue Xetra® and
offers trading in structured products (certificates and warrants) in Germany via Börse Frankfurt Zertifikate
AG. The Group also offers clearing services for the cash and derivatives markets (Eurex Clearing AG). All
post-trading services that Deutsche Börse Group provides for securities are handled by Clearstream Hold-
ing AG and its subsidiaries (Clearstream Holding group). These include transaction settlement, the
administration and custody of securities, as well as services for investment funds and global securities
financing. Deutsche Börse AG and Clearstream Services S.A. develop and operate Deutsche Börse
Group’s technological infrastructure.
28
28
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
Further infomation
The “Shareholding structure of Deutsche Börse Group” chart gives an overview of Deutsche Börse
Group’s main shareholdings; its basis of consolidation is presented in full in
note 2 to the conso-
lidated financial statements.
Shareholding structure of Deutsche Börse Group
Deutsche Börse AG 1)
Eurex Frankfurt AG
100 %
360 Treasury Systems AG
100 %
Clearstream Holding AG
100 %
Deutsche Börse
Services s.r.o.
100 %
STOXX Ltd.
100 %
360TGTX Inc.
100 %
China Europe International
Exchange AG
40 %
Clearstream
International S.A.
100 %
Clearstream Banking AG
100 %
DB1 Ventures GmbH
100 %
Börse Frankfurt
Zertifikate AG
100 %
Clearstream Banking S.A.
100 %
Deutsche Börse Photography
Foundation gGmbH
100 %
Tradegate Exchange GmbH
75 %, 25 % 4)
Deutsche Börse
Commodities GmbH
16 %
BrainTrade Gesellschaft
für Börsensysteme mbH
14 %, 14 % 5)
REGIS-TR S.A.
50 %
Clearstream Funds
Centre Ltd.
100 %
Clearstream Global
Securities Services Limited
100 %
Clearstream Operations
Prague s.r.o.
100 %
Clearstream Services S.A.
100 %
LuxCSD S.A.
50 %
Eurex Clearing AG
100 %
Eurex Repo GmbH
100 %
Eurex Global Derivatives AG
100 %
European Energy
Exchange AG
75 % 2)
Cleartrade Exchange
Pte. Limited
100 %
European Commodity
Clearing AG
100 %
Nodal Exchange Holdings,
LLC
100 %
Powernext SAS
100 %
EPEX SPOT SE
11 %, 40 % 3)
Deutsche Boerse
Systems, Inc.
100 %
1) Simplified presentation of main shareholdings (rounded values), as at 1 January 2019
2) Economic participation; lower voting rights
3) Direct equity interest European Energy Exchange AG: 11 %, direct equity interest Powernext SAS: 40 %
4) Direct equity interest Deutsche Börse AG: 75 %, direct equity interest Tradegate AG Wertpapierhandelsbank: 25 %
5) Direct equity interest Deutsche Börse AG: 14 %, direct equity interest Börse Frankfurt Zertifikate AG: 14 %
29
29
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
Further infomation
Reporting segments
Since 1 January 2018, Deutsche Börse Group has divided its business activities into nine segments:
The former Eurex segment was divided into three segments: Eurex (financial derivatives), EEX
(commodities) and 360T (foreign exchange).
The former Clearstream segment was divided into three segments: Clearstream (post-trading), IFS
(investment fund services) and GSF (collateral management).
The former Market Data + Services (MD+S) segment was separated into STOXX (index business) and
Data. Revenue from the Infrastructure Services division, the third pillar of the former MD+S segment,
have been allocated to the Eurex (financial derviatives) and Xetra (cash equities) segments.
The Group continues to report on business developments in the cash market within the Xetra (cash
equities) segment.
This structure serves as a basis for the Group’s internal management and financial reporting (see the
following table entitled “Deutsche Börse Group’s reporting segments” for details). This more detailed
segment reporting further enhances transparency, highlighting growth areas. Recognising the growing
importance of some business areas, these have been shown as independent reporting segments as of
the financial year 2018. Hence, the Group also reports the reporting segments’ cost base and EBITDA
on a segment level.
Deutsche Börse Group’s reporting segments
Reporting segment
Business areas
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Electronic derivatives trading (Eurex Exchange)
Eurex Repo® over-the-counter (OTC) trading platform
C7® electronic clearing architecture
Central counterparty for on- and off-exchange derivatives and repo transactions
Electronic trading of electricity and gas products as well as emission rights (EEX group)
Central counterparty for cash market and derivative products
Electronic foreign-exchange trading (360T®)
Central counterparty for on- and off-exchange derivatives
Cash market with the Xetra®, Börse Frankfurt and Tradegate trading venues
Central counterparty for equities and bonds
Admission of securities (listing)
Clearstream (post-trading)
Custody and settlement services for securities
IFS (investment fund services)
Investment fund services (order routing, settlement and custody)
GFS (collateral management)
Global securities financing and collateral management services, such as collateralised money market
lending, repo or securities lending transactions
STOXX (index business)
Development and marketing of indices (STOXX® and DAX®)
Data
Distribution of licences for trading and market signals
Technology and reporting solutions for external customers
Trading participant connectivity
Management
The governing bodies of Deutsche Börse AG, which is a German stock corporation, are the Annual General
Meeting, the Supervisory Board and the Executive Board, each of which has its own areas of responsibility.
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
Further infomation
The Annual General Meeting rules on the appropriation of the unappropriated surplus, appoints the
shareholder representatives on the Supervisory Board and approves the actions of the Executive Board
and the Supervisory Board. In addition, it rules on corporate actions and other matters governed by the
Aktiengesetz (AktG, German Stock Corporation Act).
The Supervisory Board appoints, supervises and advises the Executive Board and is directly involved in
key decisions affecting the company. Additionally, it approves the consolidated financial statements pre-
pared by the Executive Board. Members of the Supervisory Board are appointed for a period of three
years, although the Annual General Meeting may determine a shorter term of office when electing mem-
bers. Since staffing numbers at Deutsche Börse AG in Germany have surpassed the threshold of 2,000
employees, the Supervisory Board must be composed in accordance with the provisions of the Mit-
bestimmungsgesetz (German Co-determination Act). Since the 2018 Annual General Meeting, Deutsche
Börse AG’s Supervisory Board has consisted of eight shareholder representatives and eight employee
representatives. This increase accounted for the growing demands placed upon Supervisory Board mem-
bers in connection with the growth of the company and the Group, particularly with regard to diversity
and internationalisation of Supervisory Board work. Previously, the Supervisory Board had been com-
prised of twelve members: eight shareholder representatives and four employee representatives. Further
details are described in the
report” section.
“Combined corporate governance statement and corporate governance
The Executive Board is responsible for the management of the company; the Chief Executive Officer
(CEO) coordinates the activities of the Executive Board members. During the financial year 2018, the
Executive Board of Deutsche Börse AG had five members until the end of June. Since the retirement of
Jeffrey Tessler and the appointments of Thomas Book and Stephan Leithner at the beginning of July, the
Executive Board has counted six members. Andreas Preuß retired from the Executive Board with effect
from 31 October 2018. He was succeeded by Christoph Böhm on 1 November 2018. The remuneration
system and the remuneration paid to the individual members of the Executive Board are described in
detail in the
remuneration report.
Organisational structure
The Chief Executive Officer (CEO) is, among other things, responsible for the Group’s strategy and M&A
activities, communication, the area of Group Legal & Regulatory Affairs and Group Audit. The portfolio
of the Chief Financial Officer (CFO) includes, amongst other things, financial reporting and controlling,
risk management, compliance and investor relations. The Trading & Clearing division bundles derivatives
trading and the clearing houses of Deutsche Börse Group. The electronic foreign-exchange trading
platform 360T®, as well as EEX group, also belong to this division. The Post-Trading, Data & Index
division includes Clearstream’s settlement and custody business, the reporting segments IFS (Investment
Fund Services) and GSF (Collateral Management), as well as the index and data business. Deutsche Börse
Group’s cash market businesses – comprising the trading venues Xetra®, the Frankfurt Stock Exchange,
and the certificates and warrants business – are allocated to the Cash Market, Pre-IPO & Growth Financing
division. The division is also responsible for the build-up of a pre-IPO market and tools for growth
financing. Human Resources completes this area of responsibility. The Chief Information Officer’s/Chief
Operating Officer’s division combines Deutsche Börse Group’s IT activities and market operations.
Technological transformation and digitalisation are key issues expedited by this division. The
“Leadership structure of Deutsche Börse Group as at 1 February 2019” chart gives an overview of
Deutsche Börse Group’s current organisational structure.
31
31
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
Further infomation
Leadership structure of Deutsche Börse Group as of 1 February 2019
Group Executive Board
CEO
CFO
CIO / COO
T. Weimer
G. Pottmeyer
C. Böhm
Group Strategy /
Mergers &
Acquisitions /
Chief of Staff
Financial
Accounting &
Controlling
Group
Communi-
cations &
Marketing
Group
Regulatory
Strategy
Chief
Compliance
Officer
Investor
Relations
Market
Operations
Corporate
Systems
GFF IT
Data IT
Clearing
IFS IT
Energy
Business
Analytics &
Strategy
Trading &
Clearing
T. Book
Derivatives
Markets
Trading
Cash Market,
Pre-IPO & Growth
Financing
Post-Trading,
Data & Index
H. Stars
S. Leithner
Cash Market
Development &
Operational
Management
Cash Market
Sales
& Partner
Markets
Pre-IPO &
Capital
Markets
Strategy &
Controls
Regulatory
Implementa-
tion
Clearstream
Global Ops.
Group Audit
Treasury
Digital
Workplace
Risk IT
FX / 360T
Community
Development
Market Data +
Services
European
Energy
Exchange
(EEX)
Digitisation /
Platforms
Global RM,
Sales &
Services
Human
Resources
Clearstream
Products
Group Legal
Chief Risk
Officer
Derivatives &
Cash Trading
IT
Office of the
CTO
Group
Organisational
Services
Asset Servicing
Innovation
Compensation
Officer
IT
Infra structure
Group Tax
Settlement IT
External
Findings
Management
DLT, Crypto
Assets &
New Market
Structure
Executive
Office
Group Strategy /
Clearing IT
Mergers &
Acquisitions /
Chief of Staff
3232
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Financial statements
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Further infomation
Objectives and strategies
Deutsche Börse Group’s objectives and strategies
Deutsche Börse Group is one of the largest market infrastructure providers worldwide. The Group’s busi-
ness model enhances the capital markets’ stability, efficiency and integrity. Issuers benefit from the low
capital procurement costs it offers, while investors enjoy high liquidity and low transaction costs. At the
same time, Deutsche Börse stands for transparent, secure capital markets in which organised trading is
based on free price formation.
Deutsche Börse Group’s business model is based on a broadly diversified range of products and ser-
vices, covering the entire financial market transactions value creation chain. It aims to provide customers
with reliable services, in an efficient and cost-effective manner, benefiting from the scalability of the
business; it is based on the following key elements:
Integrating different financial market services such as trading, clearing, settlement, securities custody,
liquidity and collateral management, as well as index and market data services
Providing these services for different asset classes such as equities, bonds, funds, commodities,
foreign-exchange (FX) products, interest rate products, as well as derivatives on these underlyings
Developing and operating proprietary electronic systems for all processes along the value creation
chain
Organising an impartial marketplace to ensure orderly, supervised trading with fair price formation,
plus providing risk management services
The efficiency of this business model is proven by the fact that Deutsche Börse Group is one of the most
cost-effective providers of trading, clearing and settlement services for comparable products worldwide.
Thanks to its efficient cost base and highly scalable business, Deutsche Börse Group has generated
strong cash flows from operating activities for many years.
In order to maintain and expand its leading position among exchange organisations, Deutsche Börse
Group is pursuing a growth strategy called “Roadmap 2020”. To achieve this strategic objective,
Deutsche Börse is, on the one hand, focusing on generating structural, organic growth and, on the other
hand, also accelerating non-organic growth through acquisitions in five defined business segments. The
third pillar of the strategy is to strengthen and further expand its leading position in the IT area.
Against this background, the Group conducted an in-depth review of its organic growth initiatives in the
2018 reporting year and reprioritised where appropriate. In particular, Deutsche Börse Group is focusing
on the expansion in structural growth markets and asset classes, considering the consequent and
successful implementation of introduced initiatives as highly important. Please refer to the
opportunities for an overview of key initiatives and growth drivers. Moreover, the remuneration system
for the Executive Board and executive staff has created, among other things, incentives for growth in the
remuneration report. As far as
individual divisions. For a detailed description of all objectives, see the
external growth opportunities are concerned, the focus is on strengthening existing high-growth areas
and exploring new asset classes and services.
report on
Deutsche Börse Group has a scalable business model, which permits higher business volumes at rela-
tively minor additional costs. With strong business performance and organic or external growth, this
means that revenue growth will exceed cost increases. To reinforce the scalability of its business model,
the Group has introduced clearly defined net revenue and profit growth targets. Based on its current
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business portfolio, the Group anticipates structurally driven net revenue increases of at least 5 per cent
annually until 2020. With regard to the annual earnings before interest, tax, depreciation and amortisa-
tion (EBITDA) and consolidated net profit for the period attributable to Deutsche Börse AG shareholders,
the Group is targeting increases of a yearly average of 10 to 15 per cent until 2020.
The factors with material impact on Deutsche Börse Group’s organic growth are, amongst others:
Regulatory requirements affecting all market participants: if regulatory initiatives (e.g. EMIR, MiFIR
and Capital Requirements Directives) strengthen the role of exchanges, this will also benefit Deutsche
Börse Group.
Structural changes in the financial markets: e.g. trading activity increases if investment funds make
greater use of derivatives to implement their trading strategies.
Innovative strength: if Deutsche Börse Group succeeds in continually introducing new products and
services for which there is demand on the market, the Group will further grow its business.
The effect of macroeconomic conditions on the financial markets: e.g. greater stock market volatility
typically leads to higher levels of trading in the cash and derivatives markets, and rising interest rates
drive higher net interest income and trading volumes of interest rate derivatives.
Deutsche Börse Group is committed to maintaining transparent, reliable and liquid financial markets;
although it cannot affect how the volume drivers for these markets, i.e. cyclical factors, develop. How-
ever, the Group is able to influence the other factors to some extent or to control them in full; for
instance, it can lobby for a favourable legal framework for the financial markets, or it can develop
products and services to support customer business. This also enables it to reduce dependence on those
factors beyond its control.
Management approach for a Group-wide commitment to sustainability
Deutsche Börse Group’s objectives and strategies include discharging its corporate responsibility holistically.
In line with this, its management approach is guided by three action-based principles that aim to sustaina-
bly strengthen and preserve the value added to the economy and to society by Deutsche Börse Group:
Building trust. Deutsche Börse Group aims to organise the capital markets in a way that ensures their
integrity, transparency and security. The availability of high-quality information is a key aspect in this
process and something that the company is working constantly to enhance. In this context, providing
sustainability information is as significant as engaging in a constructive dialogue on the future viability
of the international capital markets with customers and the general public alike.
Leading by example. As a listed service provider, Deutsche Börse Group aims to ensure that its own
corporate activities are conducted responsibly and with a view to the future. In addition, the Group
pursues a sustainable human resources policy and is committed to the environment and hence
to conserveing resources. It enhances its commitment to sustainability and related reporting on an
ongoing basis in order to establish itself as a long-term role model on the market.
Increasing public awareness. The Group is part of civil society and as such has a responsibility towards
it. It is committed to fulfilling this role both in Germany and in its international locations. It systemati-
cally bases its actions on local requirements and, as a good corporate citizen, takes part in long-term
cooperative initiatives aimed at strengthening structures in the non-profit sector.
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Further infomation
In 2016, Deutsche Börse established a Group Sustainability Board to continuously develop the
Group-wide sustainability strategy along the entire value chain and advise the Executive Board on
sustainability issues. The Board convenes twice a year; in 2018, its members comprised 15 repre-
sentatives of the Executive Board divisions, plus the Head of Group Sustainability. Due to the 2018
restructuring of the Executive Board divisions, the Board met only once in the year under review.
Internal management
Management systems
Deutsche Börse Group’s internal management system is based on key performance indicators taken from
the consolidated income statement (net revenue; operating costs excluding depreciation, amortisation and
impairment losses; EBITDA; Group’s net profit for the period attributable to Deutsche Börse AG share-
holders), as well as on various parameters derived from the consolidated statement of financial position
and the consolidated statement of cash flows (cash flows from operating activities, liquidity, equity less
intangible assets). Additionally, the system includes key performance indicators derived from the adjusted
consolidated income statement and the balance sheet (interest coverage ratio, interest-bearing gross debt /
EBITDA and return on shareholders’ equity).
Net revenue is composed of sales revenue plus net interest income from banking business and from
other operating income, less volume-related costs. Sales revenue from external customers is generally
dependent on the growth factors described above (regulatory and structural changes, the Group’s inno-
vative strength, and performance of the financial markets). Net interest income from banking business is
dependent on how Clearstream’s international settlement business performs, on the one hand, and on
developments of short-term interest rates, particularly in the USA and in the eurozone, on the other. In
addition to income from the Clearstream segment, net interest income has also included interest income
and expenses in the Eurex segment. This income is generated by the Group’s clearing houses from in-
vesting their clients’ cash collateral. Other operating income results from exchange rate differences,
among other things.
Volume-related costs normally correlate with business development in the relevant business areas, such
as fees and commissions from banking business or the cost of purchasing price data. In addition, vari-
ous licence fees (e.g. for index licences) contribute to volume-related costs.
To facilitate transparency in reporting costs and results, and to increase comparability with competitors,
Deutsche Börse Group has been separately disclosing operating costs as well as depreciation, amortisa-
tion and impairment losses since the second quarter of 2017, introducing EBITDA as an additional
parameter. Consequently, operating costs include staff costs as well as other operating expenses, but
exclude depreciation, amortisation and impairment losses. Staff costs consist of wages and salaries, social
security contributions and the cost of retirement benefits. They are subject to inflation adjustments and
depend partially on the company’s performance, as they also include a variable remuneration. Other
operating expenses mainly comprise the costs of developing and operating the Group’s technological
infrastructure, office infrastructure costs and marketing costs. The item depreciation, amortisation and
impairment losses includes depreciation and amortisation of, and impairment losses on, intangible
assets and property, plant and equipment.
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Financial statements
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Further infomation
Around 75 per cent of Deutsche Börse Group’s costs are fixed costs (unadjusted). As a result, the Group
can handle higher volumes of business without a significant increase in total costs. Conversely, a decline
in business volumes has a direct impact on the Group’s profitability. Approximately 25 per cent of the
Group’s costs are volume-related costs.
Deutsche Börse Group manages its EBITDA using net revenue and operating costs. At Group level, the
net profit for the period attributable to Deutsche Börse AG shareholders also serves as a performance
indicator for internal management.
The performance indicators derived from the statement of financial position and the statement of cash
flows include cash flows from operating activities, a predefined liquidity target, and equity less intangible
assets. Liquidity planning aims at maintaining liquidity at about the same level of operating costs for
one quarter (currently between €150 million and €250 million). There is no set target for the Group’s
management KPI of equity less intangible assets; rather, the objective is to maintain a positive figure.
The interest coverage ratio is the ratio of EBITDA to the interest expense from financing activities. As part
of its capital management programme, the Group aims to achieve an interest coverage ratio of at least
16 for Deutsche Börse Group. In addition, the goal is to achieve a maximum ratio of interest-bearing
gross debt to EBITDA of 1.5 at Group level. The latter performance indicator is particularly important at
present in protecting the Group’s current AA rating. The target for the Clearstream subgroup is to main-
tain an interest coverage ratio of 25 and to comply with other capital adequacy measures to protect its
current AA rating. Because Clearstream had no financial liabilities from non-banking business in either the
reporting period or the previous year, no interest coverage ratio had to be calculated for the subgroup.
Beginning with the 2019 financial year, the Group will use new key performance indicators based on
the consolidated balance sheet. Prompting this was an adjustment by the S&P Global Ratings (S&P)
rating agency in the key indicators it follows and in their calculation. The most important new indicators
are free funds from operations (FFO) in relation to net debt and net debt in relation to EBITDA. The
Group will continue to use the interest coverage indicator, but the calculation has been adjusted.
In order to achieve the minimal financial risk profile consistent with an AA rating as defined by S&P, the
company is targeting an FFO to net debt ratio of at least 50 per cent, a net debt to EBITDA ratio of no
more than 1.75 and an interest coverage ratio of at least 14. These key indicators will be incorporated
into the Group’s reporting as of the first quarter of 2019. Details on how the indicators were calculated
for the year 2018, as well as a comparison with the previous calculation methodology, are presented
in the
“Financial position” section.
Group projects are prioritised and steered using strategic and financial criteria, taking project-specific
risks into account. The main criterion used to assess the strategic attractiveness of projects is their
(expected) contribution to the strategic objectives for Deutsche Börse Group and its business areas. The
main financial criteria are key performance indicators such as net present value (NPV), the payback
period and the return after tax, which are calculated on the basis of the project or business plans. Risks
are monitored at all levels of project work, i.e. both when prioritising and steering projects and during
ongoing project management.
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Financial statements
Notes
Further infomation
Details concerning the non-financial performance indicators used by Deutsche Börse Group are outlined
in the
“Combined non-financial statement” section.
Internal control system as part of the financial reporting process
Deutsche Börse has established a Group-wide internal control system (ICS). The ICS comprises rules to
manage the company’s activities as well as guidelines defining how compliance with these rules is mon-
itored. Monitoring tasks are implemented through process-integrated measures (such as organisational
safeguards and controls) as well as through process-independent measures. All business divisions are
responsible that Group-wide ICS requirements are met in their respective areas of responsibility.
The purpose of the accounting-related ICS is to ensure orderly accounting practices. The central Finan-
cial Accounting and Controlling (FA&C) division, together with decentralised units acting on the require-
ments set out by FA&C, are responsible for preparing the accounts at Deutsche Börse AG and its consoli-
dated subsidiaries. Group Tax is responsible for determining tax items within the scope of the account-
ting; the relevant department heads are responsible for the related processes, including effective security
and control measures. The goal is to ensure that risks in the accounting process are identified early on
so that remedial action can be taken in good time.
In order to maintain consistent and continuous accounting processes, FA&C provides regularly updated
accounting manuals as well as guidelines and work instructions for the material accounting processes –
as part of the preparation of the annual financial statements and consolidated financial statements of
Deutsche Börse AG. All FA&C employees have access to this documentation, accounting manuals and
account allocation guidelines, allowing them to obtain information on the management judgements
and accounting options exercised by Deutsche Börse Group.
Moreover, Deutsche Börse Group continuously monitors and analyses changes in the accounting
environment and adjusts its processes in line with them. This applies in particular to national and
international accounting standards.
Another key feature of the ICS is the principle of the separation of functions: tasks and responsibilities
are clearly defined and allocated within the organisation. Incompatible tasks – such as modifying master
data on the one hand and issuing payment instructions on the other – are strictly segregated at a func-
tional level. An independent control unit grants individual employees access rights to the accounting sys-
tem and continuously monitors these permissions using a so-called incompatibility matrix. Transactions
are initially recorded in the general ledger or the appropriate sub ledgers on the basis of the chart of
accounts and the account allocation guidelines.
Major Deutsche Börse Group subsidiaries maintain and consolidate their general ledgers in the same
system. Accounting data from the other companies is uploaded for inclusion in the consolidated finan-
cial statements. Liabilities, expenses and income for individual transactions are recorded in separate
accounts under the name of the counterparty concerned. Any consolidation differences are reviewed
centrally and sent to the accounting departments of the companies concerned for clarification.
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Financial statements
Notes
Further infomation
The processes, systems and controls described above aim to provide reasonable assurance that the
accounting system complies with the applicable principles and laws. In addition, Compliance and
Internal Audit act as a further line of defence, performing risk-based, process-independent controls on
whether the ICS is appropriate and effective. The Executive Board and the Audit Committee established
by the Supervisory Board receive regular reports on the effectiveness of the ICS with respect to the
financial reporting process.
Research and development activities
As a service provider, Deutsche Börse Group does not engage in research and development activities
comparable to those of manufacturing companies. As a result, this combined management report does
not contain a detailed research and development report. However, Deutsche Börse does develop and
operate its own trading and clearing systems, as well as systems solutions designed to achieve its struc-
tural growth objectives. The company constantly works to maintain and enhance the technological
leadership and stability of its electronic systems in the interests of its customers and the systemic stabi-
lity of the financial markets. During the years 2014 to 2018, Deutsche Börse therefore significantly
overhauled its trading and clearing technology, which go by the trade names T7® and C7®. During the
reporting period, the T7 trading technology was rolled out on the US Nodal Exchange, which has been
a part of Deutsche Börse Group since May 2017. Other technically challenging projects of the past
financial year include the implementation of the increasing reporting obligations according to EMIR and
MiFID II, as well as the introduction of the pan-European intraday power market (XBID) and the clearing
functionality for FX trading.
In 2018, research and development expenses amounted to €130.8 million (2017: €154.4 million);
of this figure, approximately 61 per cent (2017: 56 per cent) was attributable to development costs that
were capitalised as internally developed software. Accordingly, research and development costs amount-
ed to 5 per cent of net revenue (2017: 6 per cent). In addition, €36.8 million of capitalised develop-
ment costs were amortised in 2018. Details can be found in the
financial statements.
notes 7 and 24 to the consolidated
Further details of product and services development activities can be found in the
ties and the
report on expected developments.
report on opportuni-
Takeover-related disclosures
Disclosures in accordance with sections 289a (1) and 315a (1) of the HGB and notes
In accordance with sections 289a (1) and 315a (1) of the Handelsgesetzbuch (HGB, German
Commercial Code), Deutsche Börse AG hereby makes the following disclosures as at 31 December 2018:
The share capital of Deutsche Börse AG amounted to €190.0 million on the above-mentioned reporting
date and was composed of 190 million no-par value registered shares. There are no other classes of
shares besides these ordinary shares.
The share capital has been contingently increased by up to €19.3 million by issuing up to 19.3 million
no-par value registered shares (contingent capital 2014). The contingent capital increase will be
implemented only to the extent that holders of convertible bonds or warrants attaching to bonds with war-
rants issued by the company or a Group company in the period until 14 May 2019 on the basis of the
authorisation granted to the Executive Board in accordance with the resolution of the Annual General
Meeting on 15 May 2014 on item 5 (a) of the agenda exercise their conversion or option rights, that
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Deutsche Börse Group| Annual report 2018
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Further infomation
they meet their conversion or option obligations, or that shares are tendered, and no other means are
used to settle such rights or obligations. More details can be found in Article 4 (7) of the Articles of
Association of Deutsche Börse AG.
The Executive Board is only aware of limitations to voting rights that result from the Aktiengesetz
(AktG, German Stock Corporation Act), according to which voting rights arising from shares affected
by section 136 of the AktG may not be exercised. Furthermore, shares held by Deutsche Börse AG as
treasury shares are exempted from the exercise of any rights according to section 71b of the AktG.
Under the Wertpapierhandelsgesetz (WpHG, German Securities Trading Act), any investor whose
shareholding reaches, exceeds or falls below specified voting right thresholds as a result of purchase,
sale or any other transaction is required to notify the company and the Bundesanstalt für Finanz-
dienstleistungsaufsicht (BaFin, German Federal Financial Supervisory Authority). The lowest threshold
for this disclosure requirement is 3 per cent. Deutsche Börse AG is not aware of any direct or indirect
equity interests in its capital exceeding 10 per cent of the voting rights.
There are no shares with special rights granting the holder supervisory powers.
Employees holding shares in Deutsche Börse AG exercise their rights in the same way as other share-
holders in accordance with the statutory provisions and the Articles of Association.
Members of the Executive Board are appointed and dismissed in accordance with sections 84 and 85 of
the AktG and with Article 6 of the Articles of Association of Deutsche Börse AG. Amendments to the
Articles of Association of Deutsche Börse AG are adopted by resolution of the Annual General Meeting in
accordance with section 119 (1) No. 5 of the AktG. Under Article 12 (4) of the Articles of Association of
Deutsche Börse AG, the Supervisory Board has the power to make changes to the Articles of Association
that relate to the wording only. In accordance with Article 18 (1) of the Articles of Association of
Deutsche Börse AG, resolutions of the Annual General Meeting are passed by a simple majority of the
votes cast, unless otherwise mandated by the AktG. Insofar as the AktG additionally prescribes a
majority of the share capital represented at the time of a resolution, a simple majority of the share capital
represented is sufficient where this is legally permissible.
Subject to the approval of the Supervisory Board, the Executive Board is authorised to increase the share
capital by up to a total of €13.3 million on one or more occasions in the period up to 10 May 2021
by issuing new no-par value registered shares in exchange for cash and/or non-cash contributions
(authorised capital I). Shareholders must be granted pre-emptive rights. However, subject to the approval
of the Supervisory Board, the Executive Board may exclude shareholders’ pre-emptive rights with respect
to fractional amounts. However, according to the authorisation, the Executive Board may only exclude
shareholders’ pre-emptive rights if the total number of shares that are issued during the term of the
authorisation and that exclude shareholders’ pre-emptive rights does not exceed 20 per cent of the share
capital. Full authorisation, and particularly the conditions under which shareholders’ pre-emptive rights
can be excluded, is derived from Article 4 (3) of the Articles of Association of Deutsche Börse AG.
The Executive Board is also authorised to increase the share capital by up to a total of €19.3 million on
one or more occasions in the period up to 12 May 2020, subject to the approval of the Supervisory
Board, by issuing new no-par value registered shares against cash and/or non-cash contributions
(authorised capital II). Shareholders must be granted pre-emptive rights, which the Executive Board can
disapply in certain cases, subject to the approval of the Supervisory Board in each case. The Executive
Board is authorised to exclude shareholders’ pre-emptive rights: (i) in the case of cash capital increases,
provided that the issue price of the new shares is not significantly lower than the prevailing exchange
price, and the total number of shares issued under exclusion of shareholders’ pre-emptive rights does not
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Deutsche Börse Group| Annual report 2018
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Financial statements
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Further infomation
exceed 10 per cent of the share capital; (ii) in the case of physical capital increases in exchange for non-
cash contributions for the purpose of acquiring companies, parts of companies, interests in companies,
or other assets; or (iii) with respect to fractional amounts. However, according to the authorisation, the
Executive Board may only exclude shareholders’ pre-emptive rights if the total number of shares that are
issued during the term of authorisation and that exclude shareholders’ pre-emptive rights does not
exceed 20 per cent of the share capital. The full authorisation, and particularly the conditions under
which shareholders’ pre-emptive rights can be disapplied, is derived from Article 4 (4) of the Articles of
Association of Deutsche Börse AG.
In addition, the Executive Board is authorised to increase the share capital by up to a total of €38.6 mil-
lion on one or more occasions in the period up to 12 May 2020, subject to the approval of the Super-
visory Board, by issuing new no-par value registered shares in exchange for cash contributions (author-
ised capital III). Shareholders must be granted pre-emptive rights, which the Executive Board can ex-
clude, subject to the approval of the Supervisory Board, only for fractional amounts. However, according
to the authorisation, the Executive Board may only exclude shareholders’ pre-emptive rights if the total
number of shares that are issued during the term of authorisation and that exclude shareholders’ pre-
emptive rights does not exceed 20 per cent of the share capital. The exact content of this authorisation
is derived from Article 4 (5) of the Articles of Association of Deutsche Börse AG.
Furthermore, the Executive Board is authorised to increase the share capital by up to a total of
€6.0 million on one or more occasions in the period up to 16 May 2022, subject to the approval
of the Supervisory Board, by issuing new no-par value registered shares against cash and/or non-
cash contributions (authorised capital IV). Shareholders must be granted pre-emptive rights unless
the Executive Board makes use of the authorisation granted to it to disapply such rights, subject to
the approval of the Supervisory Board. The Executive Board is authorised to disapply shareholders’
pre-emptive rights for fractional amounts with the approval of the Supervisory Board. However,
according to the authorisation, the Executive Board may only exclude shareholders’ pre-emptive rights
if the total number of shares that are issued during the term of the authorisation and that exclude
shareholders’ pre-emptive rights does not exceed 20 per cent of the share capital. Full authorisation
is derived from Article 4 (6) of the Articles of Association of Deutsche Börse AG.
The Executive Board is authorised to acquire treasury shares amounting to up to 10 per cent of the
share capital. However, the acquired shares, together with any treasury shares acquired for other rea-
sons that are held by the company or attributed to it in accordance with sections 71a ff. of the AktG,
may at no time exceed 10 per cent of the company’s share capital. The authorisation to acquire treasury
shares is valid until 16 May 2019 and may be exercised by the company in full or in part on one or
more occasions. However, it may also be exercised by dependent companies, by companies in which
Deutsche Börse AG holds a majority interest or by third parties on its or their behalf. The Executive
Board may elect to acquire the shares (1) on the stock exchange, (2) via a public tender offer addressed
to all shareholders or via a public request for offers of sale addressed to the company’s shareholders,
(3) by issuing tender rights to shareholders or (4) using derivatives (put options, call options, forward
purchases or a combination of put options, call options and forward purchases). The full and exact
wording of the authorisation to acquire treasury shares, and particularly the permissible uses to which
the shares may be put, can be found in items 5 and 6 of the agenda for the Annual General Meeting
held on 17 May 2017.
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Further infomation
The following material agreements of the company are subject to a change of control following a
takeover bid:
On 28 March 2017, Deutsche Börse AG and its subsidiary Clearstream Banking S.A. entered into a
multicurrency revolving facility agreement with a banking syndicate for a working capital credit totalling
up to €750 million. If there is a change of control, the credit relationship between Deutsche Börse AG
and the lenders can be reviewed in negotiations within a period of no more than 60 days. In this
process, each lender has the right, at its own discretion, to terminate its credit commitment and
demand partial or full repayment of the amounts owing to it. A change of control occurs if Deutsche
Börse AG no longer directly or indirectly holds the majority of Clearstream Banking S.A. or if a
person or a group of persons acting in concert acquires more than 50 per cent of the voting shares of
Deutsche Börse AG.
Under the terms of Deutsche Börse AG’s €600.0 million fixed-rate bond issue 2015/2041 (hybrid bond),
Deutsche Börse AG has a termination right in the event of a change of control which, if exercised,
entitles Deutsche Börse AG to redeem the bonds at par, plus accrued interest. If Deutsche Börse AG
does not exercise this termination right, the affected bonds’ coupon will increase by 5 percentage
points. A change of control occurs if a person or a group of persons acting in concert, or third parties
acting on their behalf, has or have acquired more than 50 per cent of the shares of Deutsche Börse AG
or the number of Deutsche Börse AG shares required to exercise more than 50 per cent of the voting
rights at Annual General Meetings of Deutsche Börse AG. In addition, the relevant bond terms require
that the change of control must adversely affect the long-term rating given to Deutsche Börse AG by
Moody’s Investors Services, Inc., S&P Global Ratings or Fitch Ratings Limited. Further details can be
found in the applicable bond terms.
The terms of the €500.0 million fixed-rate bonds 2015/2025, the €600.0 million fixed-rate bonds
2018/2028, and the €600.0 million fixed-rate bonds 2012/2022, which were all issued by Deutsche
Börse AG, all provide Deutsche Börse AG with a termination right in the event of a change of control.
If these cancellation rights are exercised, the bonds are repayable at par plus any accrued interest.
A change of control occurs if a person or a group of persons acting in concert, or third parties acting on
their behalf, has or have acquired more than 50 per cent of the shares of Deutsche Börse AG or the
number of Deutsche Börse AG shares required to exercise more than 50 per cent of the voting rights at
Annual General Meetings of Deutsche Börse AG. In addition, the respective sets of bond terms require
that the change of control must adversely affect the rating given to one of the preferential unsecured
debt instruments of Deutsche Börse AG by Moody’s Investors Services, Inc., S&P Global Ratings or
Fitch Ratings Limited. Further details can be found in the applicable bond terms.
Under certain conditions, members of Deutsche Börse AG’s Executive Board have a special right to ter-
minate their contracts of service in the event of a change of control. According to the agreements made
with all Executive Board members, a change of control occurs if (i) a shareholder or third party dis-
closes possession of more than 50 per cent of the voting rights in Deutsche Börse AG in accordance
with sections 33 and 34 of the WpHG (sections 21 and 22 of the WpHG [previous version]), (ii) an
intercompany agreement in accordance with section 291 of the AktG is entered into with Deutsche
Börse AG as a dependent company, or Deutsche Börse AG is absorbed in accordance with section 319
of the AktG or (iii) Deutsche Börse AG is merged in accordance with section 2 of the Umwandlungs-
gesetz (UmwG, German Reorganisation and Transformation Act).
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Financial statements
Notes
Further infomation
Moreover, agreements for compensation in the case of a change of control have been entered into
with the members of the Executive Board. A description of these agreements, which are in line
with customary national and international practice, can also be found in the
remuneration report.
Deutsche Börse AG shares
The average annual return since Deutsche Börse AG’s initial public offering in 2001 has been about
14 per cent. Thus, Deutsche Börse AG shares have proven to be an attractive long-term investment.
They closed financial year 2018 with a strong increase of 8 per cent – better than the performance of
the Dow Jones Global Exchanges Index, which tracks other exchange organisations and rose by 4 per
cent during 2018. Deutsche Börse AG shares significantly outperformed the DAX® blue-chip index (price
index: minus 21 per cent) as well as the STOXX® Europe 600 Financials Return (minus 21 per cent)
“Share price development of Deutsche Börse AG and benchmark indices in 2018” chart).
(see the
Deutsche Börse AG shares: key figures
Earnings per share (basic)1)
Dividend per share
Dividend distribution ratio1)
Dividend yield3)
Opening price (as at 1 Jan)4)
High5)
Low5)
Closing price (as at 31 Dec)
€
€
%
%
€
€
€
€
Average daily trading volume on trading venue Xetra®
m shares
Number of shares (as at 31 Dec)
thereof outstanding (as at 31 Dec)
Free float (as at 31 Dec)
Price-earnings ratio3)
Market capitalisation (as at 31 Dec)
Average annual return since IPO in 2001
Attendance of share capital at the Annual General Meeting
Share of investors from Germany/UK/USA/other countries
Institutional investors
Number of shareholders
Analyst recommendations buy/hold/sell (as at 31 Dec)
Average target price set by analysts at year-end
1) Adjusted for exceptional effects
2) For financial year 2018, proposal to the Annual General Meeting 2019
3) Based on the volume-weighted average of the daily closing prices
4) Closing price on preceding trading day
5) Intraday price
m
m
%
€bn
%
%
%
%
%
€
2018
5.42
2.702)
49
2.4
96.80
121.15
95.30
104.95
0.6
190.0
183.3
100
20.5
19.2
13.8
71.1
2017
4.59
2.45
53
2.7
77.54
100.25
74.27
96.80
0.5
193.0
186.6
100
19.9
18.1
15.0
73.7
20/26/33/21
18/26/34/22
94
93
ca. 52,000
ca. 50,000
37/47/16
43/52/5
119.75
98.00
42
42
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Share price development of Deutsche Börse AG and benchmark indices in 2018
Indexed to 29 December 2017
130
120
110
100
90
80
70
130
120
110
100
90
80
70
0
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Daily closing price of Deutsche Börse AG shares
DAX ®
STOXX ® Europe 600 Financials
Dow Jones Global Exchanges
Report on economic position
Macroeconomic and sector-specific environment
Macroeconomic conditions had, and continue to have, a significant impact on trading activity on the
markets. For Deutsche Börse Group, the macroeconomic environment during the year under review was
rather complex; while some factors had a stimulating effect on business, other factors unsettled market
participants, burdening their business activity:
The robust global economic situation, with output growth in the economies relevant to Deutsche Börse
Group (Central Europe, USA) during the year under review.
The European Central Bank’s (ECB) persistent low interest rate policy, with deposit rates at minus
0.4 per cent; however, the ECB reduced the high levels of liquidity provided during the course of the
year, and ended the bond-buying programme that is part of the central bank’s quantitative easing (QE)
policy at the end of 2018.
The turnaround in the US Federal Reserve’s (Fed) interest rate policy continued in the year under
review, through interest rate increases of 25 basis points each in March, June, September and
December.
The higher level of stable volatility on equity markets – as measured by the VDAX® index – as one of
the key drivers of activity on the cash and derivatives markets.
The stable economic situation in the euro area at the beginning of the year, albeit with an increasingly
deteriorating economic outlook during the third and fourth quarter of 2018 – associated with uncer-
tainty regarding the UK’s exit from the EU and its future impact on markets.
The trade dispute between the US and the EU, China, and other major trading partners, as well as the
trade tariffs imposed on commodity and goods imports by the respective parties, fuelling concerns over
a global trade war.
43
43
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Continued unstable political conditions in some parts of Eastern Europe and recurring flashpoints in
the Arab world and their impact on the Western world
Regulatory projects and the resulting stricter requirements for capital market participants (see the
“Regulatory environment” section)
Against this background, growth in the economies of industrialised nations in 2018 remained all about
the same compared with the previous year, as estimated by the International Monetary Fund (IMF;
2018: 2.3 per cent; 2017: 2.4 per cent). Global economic growth was 3.7 per cent in 2018 (2017:
real growth rate of 3.8 per cent).
While the upswing in Germany continued, initial estimates for 2018 indicate that German gross domestic
product (GDP) significantly underperformed the previous year’s levels – despite the slowdown in growth
from mid-2018 onwards. The IMF’s January 2019 estimates put growth in German economic output at
1.5 per cent for 2018 (2017: increase in real terms of 2.5 per cent).
Economic performance throughout the euro area also slightly weakened in 2018. While no country
experienced a recession in 2018, economic growth in some countries of the European Economic Area
slowed, particularly in Germany, France and Italy.
The IMF expects US economic output to post a 2.9 per cent increase for 2018, compared to a 2.2 per
cent increase the year before. Given further improvements on the labour market and ongoing high eco-
nomic growth expectations for 2019, the US Federal Reserve continued to raise its key interest rate in
2018 in four steps to a range between 2.25 and 2.50 per cent.
In the past year, trading on the European capital markets benefited from economic growth in Europe and
the US, the major political uncertainty factors, and the continued low interest rate policy of the ECB. The
Group saw material increases to trading volumes in equities, equity index derivatives and interest rate
derivatives, resulting in overall Eurex trading volumes being significantly above the prior year’s level.
Development of trading activity on selected European cash markets
Deutsche Börse Group
London Stock Exchange1) (£)
Euronext2)
Borsa Italiana1)
Bolsas y Mercados Españoles1)
1) Part of London Stock Exchange Group
2) Trading volume in electronic trading (single-counted)
Source: Exchanges listed
2018
€m
1,719.6
1,456.7
2,067.9
753.2
587.5
Change vs
2017
%
17
8
6
1
– 10
44
44
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Development of contracts traded on selected derivatives markets
National Stock Exchange of India
CME Group
Deutsche Börse Group – Eurex®
Intercontinental Exchange
Moscow Exchange
Shanghai Futures Exchange
Source: Exchanges listed
Regulatory environment
2018
m contracts
Change vs
2017
%
3,790.1
4,844.9
1,951.8
2,474.2
1,500.4
1,201.9
54
18
16
16
– 5
– 12
Ten years on from the financial crisis, global financial markets are even more stable than before – not
least due to the fact that regulation of post-crisis financial markets has tightened considerably. The G20
countries have resolved measures focusing on a regulated financial markets infrastructure, such as the
one Deutsche Börse Group has operated for many years. To protect the transparency, safety and stability
of the financial markets, established rules and regulations, supervisory structures and rules of conduct
must now be enforced. Market participants, regulators and supervisory authorities all agree that another
financial markets crisis – such as the one seen in the years 2007/2008 – must be avoided and that
there must be no further rescue of banks using public-sector funds.
What is important now is to continue developing individual regulatory dossiers, and create a stable and
competitive market within the European Union (EU). Especially in 2019, the year when elections to the
European Parliament will take place, Europe is facing various challenges, all of which affect the financial
markets more or less directly: Brexit, populist movements (which are increasingly nationalist-minded
across Europe), the threat of excessive sovereign debt, cyber risks and deregulation are just a few examples.
Financial markets are global markets. This is why joint efforts are required to establish global standards –
which must be consistently implemented. Our goal must be to create markets that are open and secure;
the EU’s stability and competitiveness must be ensured, especially in the wake of Brexit.
Financial markets infrastructure regulation
Regulation of markets in financial instruments (MiFID II, MiFIR)
MiFID II and MiFIR have fundamentally transformed the European financial market by expanding trans-
parency provisions, strengthening the stability and integrity of its infrastructure, revising the market’s
microstructure and improving the quality and availability of market data.
Deutsche Börse Group welcomes the current political efforts to monitor market adjustments to the new
rules, with a readiness to close any loopholes that might still exist. This is the only way to ensure
transparent action by as many market participants as possible, thus contributing to fair price deter-
mination as well as fair competition.
In connection with Brexit, many threshold values which are essential elements of MiFID II (and without
which obligations concerning transparency and trading venue obligations no longer work as intended)
will need to be recalibrated, given that the biggest financial centre in Europe will then be outside the
EU-27. The United Kingdom will lose its access rights to the EU and will henceforth have third-country
status. Until new rules on market access for third-country companies take effect, transitional rules are
45
45
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
needed to ensure that existing business relationships with UK companies can continue and that these
companies can continue to transact on trading venues within the EU.
EMIR: implementation and review
The European Market Infrastructure Regulation (EMIR), which entered into force in 2012, is the most
significant regulation for central counterparties. The purpose of the proposals for a revision of the regu-
lation, published in the summer of 2017 (EMIR Review), was to enhance efficiency and to ensure the
post-Brexit safety and stability of financial markets. For example, the proposals provide for adjustments
to reporting and aim to facilitate access to centralised clearing for smaller market participants. Further-
more, the revision of supervisory structures for central counterparties (CCPs) inside and outside the EU
is also an important issue. Deutsche Börse Group welcomes the review: it perceives opportunities for its
business and offers market-oriented products and services to its clients in this respect.
Recovery and resolution regulation for central counterparties
Following the European Market Infrastructure Regulation (EMIR), developing recovery and resolution
plans for CCPs is the next logical legislative step for making CCPs even more secure and stable. A key
aspect of regulation is to create sound incentive structures – on a European as well as a global level –
in order to ensure that the interests of the stakeholders involved are aligned. The finalisation of the regu-
lation is not expected before the fourth quarter of 2019.
Central Securities Depository Regulation (CSDR)
With the Central Securities Depositories Regulation (CSDR), a uniform European regulatory framework
for central securities depositories (CSDs) was established for the first time in September 2014. Official
Regulatory Technical Standards (RTS) were published between March 2017 and May 2018. The RTS
on settlement discipline (which will come into force in September 2020) will be the final element of this
exercise. The CSDR will harmonise the securities settlement systems and supervisory rules for CSDs
throughout Europe. This will strengthen Clearstream’s business model – even more so because the
provision of integrated banking services will still be permitted. Deutsche Börse Group will support its
clients’ compliance with the new requirements through existing and extended service offers.
Regulation on benchmarks and indices
The regulation on indices used as benchmarks in financial instruments and financial contracts (the
Benchmark Regulation) entered into force on 30 June 2016; the final application deadline was 1 Janu-
ary 2018. Accordingly, benchmark administrators from EU and non-EU countries will have to be admit-
ted or recognised by 1 January 2020. The Benchmark Regulation largely follows the global principles for
financial benchmarks of the International Organization of Securities Commissions (IOSCO). To prevent
the manipulation of relevant reference interest rates, the G20 countries also instructed the Financial Sta-
bility Board to review these reference rates. The two reference interest rates which are relevant for the
euro are the Euro Overnight Index Average (EONIA) and the Euro Interbank Offered Rate (Euribor). In
their current form, neither of the two complies with the requirements of the Benchmark Regulation.
While the benchmark administrator plans to adjust Euribor accordingly, the euro short-term rate (ESTER)
was chosen as a replacement for EONIA in the course of a market consultation exercise. The ECB plans
to make ESTER available as of October 2019. An extension of the transition phase of the Benchmark
Regulation for critical benchmarks until the end of 2021 is currently in discussion.
46
46
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Deutsche Börse Group, which successfully implemented the IOSCO principles in 2014 for its DAX® indi-
ces and the indices of its subsidiary STOXX Ltd., welcomes the agreement reached between the Euro-
pean Parliament and the European Council. The specific impact of this EU regulation on the Group’s
business activities depends upon the measures to be used for implementation – which are still to be laid
out in the form of delegated acts and technical standards by the European Commission and the Euro-
pean Securities and Markets Authority (ESMA).
Capital Markets Union
The European Commission has placed the focus of its Capital Markets Union on growth and industrial
policy. Its main goals are the sustainable promotion of growth and job creation and the development of a
diversified financial system where bank financing is supplemented by highly developed capital markets.
A successful Capital Markets Union is more important than ever when facing the challenges ahead
(including the financing of digitalisation, investing in growth companies, furthering an equity culture,
and retirement provisions) – especially given that the EU has fallen behind in global competition with
respect to numerous metrics. Success in the creation of integrated, pan-European capital markets would
free up undeployed capital throughout Europe, as savers would be given a greater choice of investments,
while businesses would benefit from enhanced financing options. The European Commission published
its action plans on fintech and sustainable finance in March 2018.
The Capital Markets Union affects Deutsche Börse Group’s entire value chain. Thus, the Group has
actively supported the project from the outset, seeking active involvement in the political debate and
contributing to the creation of safer, integrated EU-27 capital markets.
Brexit
The decision by the United Kingdom to exit the European Union has far-reaching implications for finan-
cial markets and their participants.
Deutsche Börse Group’s paramount objective is to ensure secure and competitive markets. The Group
therefore maintains close and continuous contact with its clients, regulatory authorities and associations,
in order to analyse the impact of Brexit and recognise the needs of all its stakeholders. Moreover, the
Group is developing solutions to support clients, both during the negotiation process and after Brexit,
and to mitigate the related effects to the greatest possible extent. At the same time, the Group is making
its own preparations for Brexit: the Group is firmly convinced that it will continue to be able to create
value for all stakeholders following Brexit – through its existing services along the entire exchange trading
value chain (comprising pre-trading, trade execution, and post-trading), as well as additional offers such
as the Eurex Clearing Partnership Program introduced in January 2018.
Revision of European supervisory structures (ESAs review)
Based on insights gained from the financial crisis of 2007/2008, the EU is determined to establish more
efficient and more strongly integrated supervision in Europe. The introduction of the European System of
Financial Supervision (ESFS) in 2010– comprising the three European Supervisory Authorities (ESAs)
and the European Systemic Risk Board (ESRB) – established a new supervisory structure at a European
level. The European Commission reviews the effectiveness of this supervisory structure every three years.
47
47
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Overview of regulatory initiatives and their impact on Deutsche Börse Group’s
business areas
Cash
market/
Xetra Eurex EEX
Eurex
Clearing
Clear-
stream IFS
360T
GSF
STOXX Data
Status as at 31 December
2018
Financial market
infrastructure
MiFID II, MiFIR
X
X
EMIR
Recovery and
resolution plans for
CCPs
CSDR
X
X
X
X
X
X
X
X
X
X
X
X
(X)
(X)
(X)
(X)
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
(X)
Regulation on
benchmarks and
indices
Capital Markets
Union
Review of European
supervisory
structures (ESAs
review)
Investment firms
Basel III
CRD V, CRR II
CRD VI, CRR III
X
X
X
X
X
X
X
X
X
Application since 3 January
2018
Became effective in 2012;
review in 2018
Draft legislation in the
legislative process
Became effective in 2014;
RTS on settlement discipline
published in May 2018
Became effective on 30 June
2016; application since
1 January 2018
New action plans in 2018;
implementation by 2019
Draft legislation in the
legislative process
Finalisation at the end of 2017,
with subsequent implement-
ation throughout the EU
Finalisation expected by
Q1/2019; implementation
expected at the beginning of
2021
Publication of the EU Commis-
sion’s proposal expected at the
beginning of 2020
Draft legislation in the
legislative process
IFD/IFR
X
X
X
X
(X) = indirect effects of ESAs review
As part of this regular review, the European Commission published a draft bill in September 2017. In
the wake of Brexit, the Commission has assigned top priority to aligning European supervisory structures
to the new political environment, strengthening regulatory integration for certain cross-border financial
services within the 27 EU member states.
The work of the ESAs – and especially of the ESMA – has an impact on parts of the value chain of
Deutsche Börse Group. At present, the EU’s proposal for a revision of the European supervisory struc-
tures is still in the legislative process. Efficient supervision with clear responsibilities and decision-making
processes remains paramount – especially in conjunction with the described challenges such as Brexit.
The revision of European supervisory structures should preserve an environment that promotes growth,
while carefully adjusting the existing regulatory regime (where necessary) in order to safeguard financial
stability, legal certainty, and the operational viability of supervised enterprises.
48
48
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Rules for banks and investment firms
Basel III
As a consequence of the 2007/2008 global financial crisis, the Basel Committee on Banking Supervi-
sion (BCBS) thoroughly revised its existing Basel II framework for banks, on the basis of corresponding
G20 agreements. Further amendments were published on top of the first cornerstones adopted in 2011;
the revised Basel III framework was finally (largely) concluded on 7 December 2017. The following
changes have already been implemented:
Stricter definition of the term “capital”
Increased capital levels
Revised market risk framework
Introduction of a leverage ratio
Introduction of international rules to contain risk concentration (large exposure rules)
Introduction of liquidity requirements
With the measures adopted in December 2017, revised rules – largely governing capital backing of credit
and operational risk – will gradually come into effect between now and 1 January 2022. On top of
the credit risk framework, both the standardised approach and the model-based approach have been
substantially revised, and operational risk regulations have been restricted to a modified standardised
approach. In addition, a floor was determined regarding capital requirements for credit risk, where these
are calculated using internal models: the so-called output floor was set at 72.5 per cent of capital require-
ments under the standardised approach.
Moreover, the BCBS has submitted initial proposals as to how exposures to public-sector entities should
be treated in the future. The BCBS will continue to develop these proposals, supplementing the Basel III
regulatory framework, and may implement them at a later stage if applicable.
In addition, the Basel Committee has published amended standards for the minimum capital require-
ments for market risk in January 2018. These include a fundamental revision of the rules for the trading
book, in particular, the allocation of financial instruments to the trading or banking book, depending on
the type of instrument and the underlying trading intention.
CRD V/CRR II
Accounting for ongoing changes to the Basel III framework and to other elements of bank regulation, the
European Commission proposed amendments to the Capital Requirements Directive (CRD IV) and Capital
Requirements Regulation (CRR) in November 2016. These proposals concern the minimum requirements
for equity and eligible liabilities (MREL) as well as the total loss-absorbing capacity (TLAC); they also
involve amendments to the EU Bank Recovery and Resolution Directive (BRRD) and the related regulation.
49
49
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Besides the changes to MREL and TLAC, the European Commission’s proposals concern the following
items in particular:
Introduction of a binding leverage ratio of 3 per cent
Introduction of a net stable funding ratio (NSFR)
Revision of the market risk framework
At the end of November 2018, the EU Commission, the EU Parliament and the EU Council reached a
general agreement on the drafts of CRD V/CRR II. Deutsche Börse Group expects the final legal texts to
take effect during the second quarter of 2019, while the respective requirements will need to be applied
from mid-2021.
Deutsche Börse Group actively and continuously contributes to discussions on the modification of bank-
ing regulations. In this context, the Group emphasises the impact on financial infrastructure providers
with a (restricted) banking licence, as well as the necessity of identifying specific rules for regulated
entities to ensure that specific bank requirements do not negatively impact the stability of the financial
markets. Moreover, the Group focuses on the capitalisation of its regulated entities, intervening where
required in order to safeguard adequate risk coverage.
Due to adjustments to CRD V/CRR II by the Investment Firm Review, only investment firms of systemic
relevance will in future be subject to the provisions of banking regulation. Small and medium-sized
investment firms shall therefore be covered by the newly developed rules for European investment firms
(see explanations below).
CRD VI/CRR III
CRD IV/CRR entered into force on 1 January 2014, implementing the first elements of Basel III. In gen-
eral, the first Basel III framework provided for transitional provisions that were in force until 1 January
2019. The measures to finalise the Basel III regulatory framework, as resolved by the BCBS in Decem-
ber 2017, and presumably the subsequently resolved regulations on market risks and exposures to
public-sector entities, will be incorporated into a new CRD VI/CRR III package. The corresponding draft
law of the EU Commission is expected to be published at the beginning of 2020.
Rules for European investment firms (Investment Firm Review, IFR)
The purpose of the European Commission's Investment Firm Review is to develop new regulatory rules
for European investment firms. The regulatory framework is set to be proportionate, with capital require-
ments in line with each firm’s size, risk exposure, and type of business model.
Deutsche Börse Group welcomes the approach of taking these market participants’ contributions to
liquidity, price discovery and transparency into consideration. This new regulatory framework will also
cover the Group’s subsidiaries Eurex GmbH and 360 Treasury Systems AG.
Transparency of securities financing transactions
The Securities Financing Transactions Regulation (SFTR) was published in the EU Official Journal
on 23 December 2015. It provides for reporting requirements concerning securities lending and repo
transactions to so-called trade repositories. Furthermore, it sets out requirements regarding the
re-pledging of collateral and the reporting obligations of investment fund providers that are active in
securities lending. The introduction of comprehensive reporting duties for securities lending transactions
has different effects upon the Clearstream subgroup, Eurex Clearing AG and REGIS-TR S.A., with
increased efforts – and hence, higher costs – expected for proprietary securities financing transactions.
50
50
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Yet the obligation to file reports to trade repositories also holds business potential for REGIS-TR. ESMA
drew up corresponding implementation standards and submitted them to the European Commission on
31 March 2017.
More information on regulatory issues is available on Deutsche Börse Group’s website at
www.deutsche-boerse.com/regulation.
Business developments
Given the overall framework conditions outlined at the beginning of the economic report, the situation on
the capital markets for financial services providers such as Deutsche Börse Group in the reporting period
improved considerably on the previous year. In early 2018, the economic situation was generally viewed
as positive. With the start of the second quarter, however, which brought the trade dispute between the
US and the EU, China and other important trading partners, as well as tariffs on commodities and goods,
this picture turned increasingly gloomy. As concerns about a global trade war deepened, expectations as
to the economy in general became dampened – especially expectations for Germany, an economy with a
particular dependence on global trade. Then there was the decision of the US administration to withdraw
from the nuclear deal with Iran, which also drew macroeconomic consequences. Oil prices rose to the
highest level since 2014, dampening the economy further. Volatility – one of the main drivers of trading
activity on the cash and derivatives markets – was more pronounced on an average annual level than in
2017, as measured by the VDAX volatility index. Until the middle of the year the benchmark DAX and
STOXX® indices were rising, only to then start falling, with the decline gaining speed towards the end of
the fourth quarter. In sum, this led to a sharp increase in trading volumes at the cash and derivatives
trading venues of Deutsche Börse Group. At the same time, the interest rate policy pursued by the central
banks invigorated the market environment. The European Central Bank initially announced that it would
reduce its bond-buying programme, known as quantitative easing (QE), during the last three months of
2018 to €15 billion per month. The programme was then discontinued altogether at the end of the year.
The US Federal Reserve (Fed) tightened its monetary policy once more, increasing the key interest rate
in four steps of 0.25 percentage points each, to reach 2.25 to 2.50 per cent. This reinforced the busi-
ness in interest rate derivatives at Eurex, and net interest income from banking business posted a marked
increase as well. The Group’s structural growth areas continued to develop favourably, the drivers being
the following segments: Eurex (financial derivatives) including over-the-counter (OTC) clearing, EEX
(commodities), 360T (foreign exchange), IFS (investment fund services) and STOXX (index business).
Comparability of figures
Detailed segment reporting
Deutsche Börse Group introduced a new internal segment management starting with the first quarter of
2018. A more detailed classification of reporting segments helps to further enhance transparency, high-
lighting growth areas. Further information can be found in the “Overview of Deutsche Börse Group –
Reporting segments” section.
Changes in the basis of consolidation
Deutsche Börse Group acquired the GTX Electronic Communications Network (ECN) business from
US-based GAIN Capital Holdings, Inc. as per 29 June 2018. As part of the transaction, 360 Treasury
Systems AG, a wholly-owned subsidiary of Deutsche Börse AG, established its own subsidiary,
51
51
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
360TGTX, Inc., which acted as the purchaser in this transaction. 360TGTX, Inc. has been included in
the consolidated financial report of Deutsche Börse AG since 29 June 2018. Revenue and costs associ-
ated with 360TGTX have been recognised in the 360T (FX) segment.
With effect from 1 October 2018, Clearstream International S.A. acquired 100 percent of the shares in
Swisscanto Funds Center Ltd., London, UK. Since then, the company has been included in the consoli-
dated financial report of Deutsche Börse AG. The company was renamed Clearstream Funds Centre Ltd.
as at 2 November 2018. With this transaction, Clearstream has expanded its range of services in the
realm of investment funds to include additional distribution channels. New services include the admin-
istration of sales agreements and data processing: these will help Clearstream’s expansion of its global
business strategy.
Results of operations
Deutsche Börse Group looks back on a very successful financial year. Structural drivers of the Group’s
business were largely positive, and substantially contributed to revenue and profit growth. Trading of
power and gas products (commodities), the investment fund services (IFS) business, and clearing of
OTC interest rate derivatives, were particular contributors. Structural growth was also evident in the
index business at STOXX and in new, innovative derivative products. In addition, cyclical drivers were
also mainly intact. Hence, the Group benefited not only from greater equity market volatility but also
from a continuously fluctuating interest rate environment. Against this background, the Group posted
significant growth in its index derivatives trading. Net interest income from banking business also
continued to increase materially, as the US Federal Reserve (Fed) raised its key interest rate four times,
to reach a corridor between 2.25 per cent and 2.50 per cent.
Overall, Deutsche Börse Group generated net revenue of €2,779.7 million, up 13 per cent, €9.3 million
of which was related to insurance payouts. Adjusted for these, the Group also achieved net revenue
growth of 13 per cent in the 2018 financial year; hence, net revenue amounted to €2,770.4 million,
of which about 6 percentage points each were due to structural and cyclical factors. Furthermore, to a
limited extent, consolidation effects also contributed to higher net revenue.
Segment key figures (adjusted)
Net revenue
Operating costs
EBITDA
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data
2018
€m
936.1
256.6
78.8
228.6
718.0
154.3
83.1
144.5
170.4
2017
€m
795.5
212.2
66.5
218.3
667.7
137.6
81.6
127.7
154.2
2018
€m
304.9
141.2
45.7
102.7
277.7
86.8
39.5
44.5
53.0
2017
€m
295.7
121.0
36.6
102.9
269.6
81.9
36.0
42.2
53.6
2018
€m
630.8
115.2
33.1
131.6
440.1
67.5
43.1
100.0
117.2
2017
€m
503.9
91.2
29.9
120.6
398.1
55.7
45.6
85.5
100.6
52
52
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
In the derivatives market, greater and (temporarily) very high volatility was reflected in a material increase
of traded volumes in index derivatives, Eurex Exchange’s biggest business segment. In addition, traded
volumes in interest rate contracts rose once again, largely due to the expectation that the ECB will also
change its interest rate policy over the medium term on the one hand, and due to political instability in
Europe on the other (particularly with regard to the new Italian government). Overall, the volume of
futures and options contracts traded on the Eurex Exchange was up 16 per cent compared to 2017.
Aggregate net revenue in the Eurex segment (financial derivatives) was up by 17 per cent year on year.
Deutsche Börse’s commodities business, operated by European Energy Exchange and its subsidiaries
(EEX group), saw markedly increased volumes in the area of power products trading. This helped EEX
to regain market share on the German power derivatives market, after the announced split of the Ger-
man/Austrian price zone had caused great market uncertainty in the previous year. On a full-year basis,
trading in EEX power products thus rose by 19 per cent. Regarding FX trading, operated by Deutsche
Börse’s subsidiary 360T, it was new customer business that provided the basis for achieving growth in a
stagnating market. 360T also benefited from the first-time consolidation of GTX, a US foreign-exchange
trading platform, as of the second quarter of 2018.
The cash market showed significant year-on-year increases across all trading platforms. This was attri-
butable, on the one hand, to the extremely robust economic situation in Germany in the first half of the
year, which brought the benchmark index DAX to record levels at mid-year. On the other hand, Deutsche
Börse gained market share in trading DAX constituents from other trading platforms. In addition, low
interest rates make investments in equities and other variable-return securities more attractive compared
to fixed income investments. Net revenue increased by 5 per cent.
Net revenue generated by the Clearstream (post-trading) segment increased by 8 per cent. The segment
particularly benefited from higher interest rates in the US (significantly higher interest income) and, at
the same time, from a rise in the value of cash market securities held in custody.
The Group was able to further expand its investment fund services (IFS) business, primarily by increas-
ing the value of securities deposited – which in turn was mostly due to new clients IFS acquired for its
investment funds services. From October 2018 onwards, IFS also benefited from the acquisition and full
consolidation of Swisscanto Funds Centre Ltd., London (SFCL).
Revenue in the GSF (collateral management) segment remained in line with the previous year’s levels.
The reason was a marginal decrease of average outstanding volumes on the repo market year-on-year,
as financial institutions continued to borrow liquidity primarily from the central bank and not from the
collateralised money market. A similar trend was visible in securities lending. As volumes reduced dis-
proportionately in products with low margins, revenue remained stable due to the improved product mix.
Deutsche Börse Group’s index business (STOXX segment) generated growth, especially in licence fees
of exchange-traded funds (ETFs) and exchange licence fees. The data business (Data segment) posted
growth with the sale of cash and derivatives markets data, as well as with the services for regulatory re-
porting requirements introduced at the beginning of the year. As a result of the positive business perfor-
mance, net revenue climbed materially in both the STOXX and the Data segments (by 13 per cent and
10 per cent, respectively).
53
53
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Deutsche Börse Group’s operating costs comprise staff costs and other operating expenses. Staff costs
increased to €824.0 million during the year under review (2017: €650.5 million). This marked jump is
largely due to exceptional effects in the amount of €158.2 million (2017: €26.4 million). This amount
arose as a result of the programme resolved in 2018 to reduce structural costs (Structural Performance
Improvement Programme, SPIP), which aimed at streamlining the management structure and enhancing
processes. These exceptional effects are the largest contributor to the higher operating costs reported in
the chapters on the individual segments. Adjusted staff costs increased by 7 per cent to €665.8 million
(2017: €624.1 million) due to a series of reasons:
Increased average number of employees during the year under review attributable to the hiring of staff
who had previously worked on a freelance basis
Full consolidation of GTX and Swisscanto
Higher costs for variable remuneration as a result of the improvement in net profit/loss and share
price increase
Other operating expenses relate primarily to the costs of enhancing and operating Deutsche Börse
Group’s technological infrastructure, including, for example, costs for own IT services and external IT
service providers. In addition, other operating expenses include the cost of the office infrastructure at all
the Group’s locations as well as travel expenses, most of which are incurred in connection with sales
activities. Because of the Group’s business model and the fact that the company does not normally dis-
tribute its products and services to end-customers, advertising and marketing costs account for only a
very small portion of the company’s operating expenses. Operating costs rose to €516.2 million during
the year under review (2017: €481.1 million). The increase of approximately 7 per cent is largely due
to exceptional effects in the amount of €86.0 million (2017: €65.7 million). These costs were also
mainly a result of implementing the “Roadmap 2020” business strategy, organisational restructuring
measures, and litigation costs. Adjusted for exceptional effects, the other operating expenses increased
by 4 per cent year on year.
The Group’s overall operating costs increased by 18 per cent to €1,340.2 million (2017: €1,131.6 mil-
lion). Adjusted operating costs increased as planned by 5 per cent to €1,096.0 million (2017:
€1,039.5 million).
Deutsche Börse Group’s result from strategic investments amounted to €4.2 million (2017: €197.8 mil-
lion). This significant decrease was due in particular to non-recurring revenue related to the full disposal
of the stake in BATS Global Markets, Inc. during the first quarter of 2017, as well as to the disposal of
shares in ICE US Holding Company L.P. during the fourth quarter of 2017. Adjusted for this non-recur-
ring revenue, the result from equity investments amounted to €4.2 million (2017: €8.3 million).
Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped by 6 per cent – a develop-
ment which is mainly attributable to the above-mentioned exceptional effects. On an adjusted basis,
EBITDA rose significantly, by 17 per cent. Higher net revenue and disproportionally low growth in oper-
ating costs are the reasons for this increase.
54
54
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
The Group reports depreciation, amortisation and impairment losses separately from operating costs: the
latter were up by 32 per cent, to €210.5 million (2017: €159.9 million). Operating costs include excep-
tional effects in the amount of €20.6 million (2017: €2.6 million), mainly due to the €15.9 million
extraordinary impairment of the value of a technological infrastructure. Adjusted for these effects, depre-
ciation, amortisation and impairment losses rose by 21 per cent, to €189.9 million (2017: €157.3 mil-
lion). The marked increase is a result of slightly higher regular depreciation and amortisation as well as
impairment charges on software, particularly in the Clearstream, IFS and GSF segments.
Deutsche Börse Group key performance figures
Reported
Adjusted
2018
€m
2017
€m
Change
%
2018
€m
2017
€m
Change
%
Net revenue
Operating costs
EBITDA
2,779.7
2,462.3
1,340.2
1,131.6
1,443.7
1,528.5
Depreciation, amortisation and impairment losses
210.5
159.9
Net profit for the period attributable to Deutsche
Börse AG shareholders
Earnings per share (basic) in €
824.3
4.46
874.3
4.68
13
18
– 6
32
– 6
– 5
2,770.4
2,462.3
1,096.0
1,039.5
1,678.6
1,431.1
189.9
157.3
1,002.7
5.42
857.1
4.59
13
5
17
21
17
18
The Group’s financial result in the year under review was €–76.4 million (2017: €–79.7 million).
Adjusted for exceptional effects, the financial result of the previous year amounted to €–69.7 million.
The increase is largely due to provisions for interest rates on potential tax back-payments.
The effective Group tax rate 2018 was 26.3 per cent; adjusted, it was 27.0 per cent, as expected.
The Group’s net profit for the period attributable to Deutsche Börse AG shareholders fell by 6 per cent
compared with the previous year, while, on an adjusted basis, it rose significantly by 17 per cent, to
€1,002.7 million (2017: €857.1 million).
Non-controlling interests in net profit for the period attributable to Deutsche Börse AG shareholders for
the period amounted to €28.2 million (2017: €21.7 million). This comprises mainly earnings attribu-
table to non-controlling shareholders of EEX group.
Based on the weighted average of 184.9 million shares, basic earnings per share amounted to €4.46
(2017: €4.68 for an average of 186.8 million shares outstanding). Adjusted, basic earnings per share
rose to €5.42 (2017: €4.59).
55
55
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Key figures by quarter (adjusted)
Net revenue
Operating costs
EBITDA
Depreciation, amortisation and
impairment losses
Q1
Q2
Q3
Q4
2018
€m
2017
€m
2018
€m
2017
€m
2018
€m
2017
€m
2018
€m
2017
€m
691.6
623.4
687.0
623.6
651.4
576.3
740.4
639.0
254.5
245.1
262.9
245.4
260.1
247.4
318.5
301.6
438.1
380.2
425.5
379.5
395.1
333.1
419.9
338.3
40.8
35.2
42.1
39.2
43.8
40.3
63.2
42.6
Net profit for the period attributable to
Deutsche Börse AG shareholders
270.7
232.2
261.9
232.8
239.6
198.1
230.5
194.0
Earnings per share (basic) in €
1.45
1.24
1.42
1.25
1.30
1.06
1.25
1.04
Comparison of results of operations with the forecast for 2018
For the year 2018, Deutsche Börse Group had expected an increase in structural net revenue of at least
5 per cent on the basis of its diverse structural growth initiatives. It had also anticipated continued eco-
nomic growth, a better cyclical market environment, including higher equity market volatility and a fur-
ther rise in interest rates in the US. While, all in all, the global economy performed as anticipated, equity
market volatility was significantly above the previous year’s level on average during the year. In addition,
interest rates were hiked four times in the US – in line with market expectations. The conditions descri-
bed earlier in the
“Business developments” section thus partly exceeded the Group’s assumptions
used in the forecast. Based on its highly diversified business model, Deutsche Börse Group increased
net revenue by a total of 13 per cent, of which around 6 per cent each is attributable to structural and
cyclical growth drivers. Furthermore, consolidation effects made a small contribution. The structural
growth forecast was therefore slightly exceeded. Key drivers of structural growth were the Eurex (financial
derivatives), EEX (commodities), IFS (investment fund services), STOXX (index business) and Data seg-
ments. Cyclical factors provided support to Deutsche Börse Group in Clearstream’s banking business, for
trading activities in interest rate derivatives, and especially for trading in equity index derivatives.
Deutsche Börse Group manages operating costs (adjusted for exceptional effects) – relative to the devel-
opment of net revenue – based on principles designed to ensure the scalability of the Group’s business
model. Given a 5 per cent increase in adjusted operating costs, the Group achieved this objective.
An increase in structural driven net revenue of at least 5 per cent was forecast, and of operating costs
in a corresponding range. Furthermore, the Group expected an increase in net profit for the period
attributable to Deutsche Börse AG shareholders of at least 10 per cent.
56
56
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
The company also anticipates extraordinary effects of approximately €80 million in operating costs. These
effects mainly relate to the integration of acquired companies but also to costs related to efficiency mea-
sures and restructuring as well as to costs in connection with criminal investigations against Clearstream
Banking S.A. in the United States. Together with the announcement of the “Roadmap 2020” strategy
programme at the end of April 2018, the Group announced that it would reduce its structural costs by
around €100 million per year by the end of 2020. The company anticipated additional costs of around
€200 million, of which around €150 million were to be incurred in 2018. As a result, the Group
expected total exceptional effects of around €230 million for the 2018 financial year. At a total of
€244.2 million, the exceptional effects impacting operating costs incurred in the year under review
ultimately exceeded expectations, among others, due to the termination of the preliminary proceed-
ings against the former CEO of Deutsche Börse AG, Carsten Kengeter, and against Deutsche Börse AG
itself as an interested party. Overall operating costs totalled around €13 million and included fines and
legal fees.
Deutsche Börse Group posted a result that was well above its forecast. This was primarily based on the
slightly higher-than-expected increase in structural net revenues, additional cyclical tailwinds and the
increase in adjusted operating costs, which were incurred with the aim or increasing scalability.
On an adjusted basis, Deutsche Börse Group achieved a 17 per cent increase in net profit for the period
attributable to Deutsche Börse AG shareholders. Moreover, the Group achieved a ratio of interest-bearing
gross debt to adjusted EBITDA of 1.2 at Group level, significantly below the target value of 1.5 at the
maximum. The adjusted tax rate was 27.0 per cent, exactly as planned. In line with projections, the
operating cash flow was clearly positive. Investments in property, plant and equipment, as well as
intangible assets in the amount of €160.0 million, were slightly lower than forecast. After increasing its
target figures, the Group aimed to distribute dividends equivalent to the mean of the projected range of
40 to 60 per cent of (adjusted) net profit for the period attributable to Deutsche Börse AG shareholders.
According to the proposal made to the Annual General Meeting, a figure of 49 per cent was reached.
Comparison of management indicators with the forecast for 2018
Net revenue from structural growth opportunities (excluding exceptional effects)
Net profit for the period attributable to Deutsche Börse AG shareholders (excluding
exceptional effects)
Exceptional effects impacting operating costs
Plan 2018
Actual 2018
%
%
€m
+ >5
+ >10
230.0
~6
17
244.2
57
57
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Eurex (financial derivatives) segment
Eurex (financial derivatives) segment: key indicators
FINANCIAL KEY FIGURES
Net revenue
Equity index derivatives
Interest rate derivatives
Equity derivatives
OTC clearing (incl. net interest income on margins for OTC interest rate swaps)
Margin fees
Other (incl. connectivity, member fees and net interest income on margins
for exchange-traded products)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFORMANCE INDICATORS
Financial derivatives: trading volumes on Eurex Exchange
Derivatives1)
Equity index derivatives
Interest rate derivatives
Equity derivatives
Financial derivatives: OTC clearing volumes
Notional outstanding
Notional cleared
2018
€m
936.1
466.2
231.9
43.8
25.6
50.0
118.6
376.3
304.9
559.4
630.8
2017
€m
796.5
389.7
208.1
36.4
10.8
35.9
115.6
326.4
295.7
663.0
503.9
m contracts
m contracts
1,951.8
1,675.9
949.8
628.5
372.1
€bn
7,913.9
14,747.9
818.6
582.1
275.0
€bn
1,930.8
1,339.7
Change
%
18
20
11
20
137
39
3
15
3
– 16
25
%
16
16
8
35
%
310
1,001
1) Due to other traded products, such as exchange-traded commodities (ETCs) on precious metals derivatives, the total shown does not equal the sum
of the individual figures.
In the Eurex (financial derivatives) segment, Deutsche Börse Group reports on financial derivatives trad-
ing and the clearing business at Eurex Exchange. The clearing volume of OTC interest rate swaps, one of
the structural growth factors for Deutsche Börse Group, is reported as a separated item within the segment.
The performance of the Eurex segment largely depends on the trading activities of institutional investors,
as well as proprietary trading by professional market participants.
Half of the segment’s net revenue (50 per cent) in the year under review was generated from equity
index derivatives. Interest rate derivatives and equity derivatives contributed 25 per cent and 5 per
cent, respectively. The rapidly-growing interest rate derivatives clearing business more than doubled its
contributed share of net revenue to more than 3 per cent. Handling fees for cash collateral provided by
clients earned 5 per cent of net revenue. Furthermore, the Eurex segment generated other revenue (12 per
cent), mostly from connectivity and participant fees.
58
58
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Due to a higher level of volatility in the financial markets compared to the prior year, the Eurex segment
saw total trading volume in the reporting year increase by 16 per cent to 1,951.8 million contracts (2017:
1,675.9 million). The strongest growth rates were seen in single-stock and equity index derivatives busi-
nesses (35 per cent and 16 per cent, respectively). An increase in hedge transactions stemmed from mount-
ing concerns about unresolved trade disputes, political uncertainty and fears of an economic slowdown.
Interest rate derivatives saw an increase in trading volume of 8 per cent. This was driven, on the one
hand, by the Fed’s four interest hikes during the course of 2018. On the other hand, the ECB’s decision
to phase out its bond-buying programme by the end of the year opened up the prospect of a foreseeable
end to the euro area’s extremely low interest rate environment. Eurex derivatives on Italian BTPs
generated a record volume of 50.1 million contracts in 2018. This high volume was achieved amidst
the events surrounding the formation of a new government in Italy; after that, the new government’s
budget proposal caused further market uncertainty.
In December 2018, Eurex Clearing AG performed its first multilateral portfolio compression cycle for OTC
interest rate derivatives. By means of a compression, investors can reduce their portfolio’s notional value,
as trades can be offset within their own portfolio or multilaterally with other market participants. As capi-
talisation rules and the Basel III Leverage Ratio are based on gross notional values, a compression reduces
the capitalisation required for derivatives trading while also mitigating operational and credit risks. Thanks
to the tri-party portfolio compression conducted by Eurex Clearing, outstanding volumes in OTC interest
rate derivatives were reduced by 16 per cent.
The Eurex Clearing Partnership Program that was announced last year has made progress during 2018.
The programme’s goal is to create a liquid, EU-27-based alternative for the clearing of interest rate swaps
denominated in euros. Up to now, 33 participants from the US, UK, Asia and Continental Europe have
joined the programme. Against this backdrop, the clearing volume in interest rate derivatives rose signifi-
cantly compared to last year. Hence, the outstanding notional volume at the end of December 2018 was
significantly above the 2017 year-end.
Since 1 February 2016, Eurex Clearing AG has been registered with the Commodity Futures Trading
Commission (CFTC) as a derivatives clearing organisation (DCO) under the Commodity Exchange Act
with authorisation to provide clearing services for OTC interest swaps for US-based clearing members.
Eurex Clearing has thus also been allowed to clear client business for US-based clearing members since
22 December 2018. Moreover, further expansion during 2019 will be seen in clearing services,
access models and the global distribution network of OTC interest rate derivatives.
At the end of 2018, Eurex announced that it would extend its Eurex Clearing Partnership Program to also
include the repo business, starting in the first quarter of 2019. Besides the clearing of repos for pension
funds and asset managers, the programme is aimed, in particular, at expanding the repo business in the
interbank market for European sovereign bonds at Eurex.
59
59
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Net revenue from OTC clearing improved by 137 per cent during the year under review. Both revenue
and volume performance were fully in line with expectations.
Overall, net revenue in the Eurex segment increased by 18 per cent in 2018. This development was also
helped by the waiver of a temporary reduction in handling fees for cash collateral provided by clients,
effective 1 April 2018. Since then, Eurex has reintroduced a handling fee of 20 basis points on cash
collateral, which resulted in the corresponding interest income rising sharply compared to the previous
year. Relative to net revenue, adjusted operating costs increased below average by 3 per cent. Therefore,
adjusted EBITDA rose by 25 per cent.
Net revenue in the Eurex
(financial derivatives) segment
€ million
936.1
44.4
50.0
25.6
43.8
Other 1)
Margin fees
OTC-Clearing 2)
Equity derivatives
231.9
Interest rate derivatives
796.5
42.7
35.7
10.8
36.4
208.1
389.7
466.2
Equity index derivatives
2017
2018
1) Including connectivity and member fees
2) Including net interest income on margins for OTC interest rate swaps
60
60
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
EEX (commodities) segment
EEX (commodities) segment: key indicators
FINANCIAL KEY FIGURES
Net revenue
Power spot
Power derivatives
Gas
Other (incl. connectivity, member fees and admission allowance)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFORMANCE INDICATORS
Commodities: trading volumes on EEX
Power spot
Power derivatives
Gas
1) Including trading volumes at Nodal Exchange since May 2017
2018
€m
256.6
67.1
82.1
36.6
70.8
149.2
141.2
107.2
115.2
2017
€m
212.2
62.5
59.9
30.8
59.0
124.0
121.0
88.2
91.2
TWh
576.6
4,385.5
1,962.9
TWh
543.3
3,217.31)
1,981.6
Change
%
21
7
37
19
20
20
17
22
26
%
6
36
– 1
The EEX (commodities) segment comprises Deutsche Börse Group’s trading activities on EEX group’s
platforms, located in Europe, Asia and North America. For participants in more than 600 countries
around the world, EEX group offers central market places for energy and commodity products. The prod-
uct portfolio comprises contracts on energy, metals and environmental products, as well as freight and
agricultural products. The segment’s most important revenue drivers are the spot and forward power
markets, which account for 26 per cent and 32 per cent of revenue, respectively, and the gas market
(14 per cent).
Despite a challenging market environment, EEX group increased its trading volume in the spot power
market by 6 per cent in 2018. A landmark in respect of short-term power trading was the launch of
XBID, a cross-border solution for the connection of the intraday markets – a project initiated by the Euro-
pean Commission. Deutsche Börse had won the contract for the platform’s development and operation
in late 2013. The agreement was signed in June 2015 by Deutsche Börse AG and the four leading
European electricity exchanges, EPEX SPOT, GME, Nord Pool and OMIE. Launching XBID was an
important milestone on the way to an integrated European intraday power market. Not only will XBID
open up national markets for competition but it also plans to establish liquidity pooling for day-ahead
markets in 2019, analogous to intraday markets.
EEX group’s power derivatives markets saw an increase in volume of 36 per cent. In the German and
Austrian markets, EEX continued to consolidate its position in 2018, following the 2017 debate over
price zones and a significant decline in volumes beginning in the second quarter of 2017 resulting from
the expected split of the unified German-Austrian price zone. In the meantime, EEX has again consoli-
dated its market share held by its former product for the common German-Austrian market. Overall,
trading volumes in these markets increased by 7 per cent year on year. EEX has already exceeded the
61
61
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
market share it had in Germany before the announced split of the price zone. In its other European core
markets – namely France, Italy and Spain – EEX expanded its market share, expanding from what was
already a high level. Furthermore, EEX saw strong growth in the Netherlands and in Eastern European
power futures.
US-based Nodal Exchange, which EEX group had acquired in May 2017, was another positive develop-
ment. In an overall declining market, Nodal managed to stabilise trading volumes and hence increased
its market share compared to its competitors. During 2018, Nodal Exchange introduced the T7® trading
system, an important technical foundation for offering new products and asset classes.
Gas market trading volumes were virtually flat during the year under review, hence the performance was
mixed. While EEX group’s spot market growth was significant, volumes on the derivatives market declined.
Across all product groups, EEX group boosted net revenue by 21 percent during the year under review;
the segment’s adjusted EBITDA rose by 26 per cent.
Net revenue in the EEX (commodities) segment
€ million
256.6
212.2
70.8
Other 1)
59.0
30.8
59.9
36.6
Gas
82.1
Power derivatives
62.5
67.1
Power spot
2017
2018
1) Including connectivity, member fees and admission allowance
62
62
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
360T (foreign exchange) segment
360T (foreign exchange) segment: key indicators
2018
2017
Change
FINANCIAL KEY FIGURES
Net revenue
Trading
Other (incl. connectivity and member fees)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFOMANCE INDICATORS
Foreign exchange: trading volumes on 360T®
Average daily vol
1) Including GTX trading volumes since July 2018
€m
78.8
66.7
12.1
49.9
45.7
28.9
33.1
€bn
69.2 1)
€m
66.5
56.5
10.0
46.5
36.6
20.0
29.9
€bn
61.0
%
18
18
21
7
25
45
11
%
13
In the 360T (foreign exchange) segment, Deutsche Börse Group manages its foreign-exchange trading
business, which takes place on the platforms provided by its subsidiary 360T.
The acquisition of GAIN Capital Holdings, Inc.’s GTX Electronic Communication Network (ECN) business
was a major milestone within the expansion of Deutsche Börse Group’s foreign-exchange franchise. The
deal was signed on 29 June 2018 at a purchase price of US$100.1 million. By acquiring this US-based
ECN platform for forex trading, 360T has strengthened its position on the global forex markets and its
presence on the US market. The transaction is in line with Deutsche Börse Group’s “Roadmap 2020” to
grow its business in a targeted manner and has expanded and diversified 360T’s footprint in OTC forex
trading. With GTX, 360T has won a spot interbank FX platform whose product range and customer base
complement 360T’s existing business. The company has been integrated into Deutsche Börse Group’s
structures as scheduled during the year under review, with the integration being largely completed at the
end of 2018. The reported results include the acquisition since its closing.
Net revenue of the 360T segment is largely driven by trading activities of institutional investors, inter-
nationally active companies, and the provision of liquidity through so-called liquidity providers. During the
year under review, the segment generated 81 per cent of its revenue from foreign-exchange trading and
19 per cent from the provision of other services.
The average trading volume per day (including GTX ECN) increased by 13 per cent year on year; it
benefited especially from numerous new client acquisitions and also from slightly higher trading activity
of market participants. Drivers were the Fed’s interest rates hikes and the ECB’s announced expiration of
its bond-buying programme by the end of 2018. Also, temporarily increased volatility was caused by the
US and Chinese governments imposing trade tariffs on each other and the impact on global trade flows,
as well as continuing uncertainty about the United Kingdom leaving the European Union.
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Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Together with Eurex’s trading and clearing business, 360T also made considerable progress in realising
FX revenue synergies. Besides a central order book for OTC transactions, which is in its ramp-up phase
and has completed initial proof-of-concept tests, further participants joined during the fourth quarter of
2018, both as liquidity providers and as clearing members for Eurex®-listed FX futures. By extending
trading times to 23 hours per day, the trading volume rose correspondingly. With the completion of tests
expected during the first half of 2019, market participants will have access to clearing services for over-
the-counter forex transactions for the first time. In combination with the Data segment, 360T has rolled
out a product providing data on both foreign-exchange spot and swap markets. So far, the new product
has been very popular with market participants.
Like for like, i.e. excluding effects from the initial consolidation of the GTX ECN business, net revenue
grew by 10 per cent to €73.0 million in the financial year 2018. This more pronounced percentage
increase, compared to trading volumes, is mostly down to the product mix, with higher volumes in
products generating higher margins. The GTX business contributed €5.8 million to net revenue. The
360T segment’s adjusted EBITDA improved by 11 per cent during the year under review.
Net revenue in the 360T
(foreign exchange) segment
€ million
78.8
12.1
Other 1)
66.5
10.0
56.5
66.7
Trading
2017
2018
1) Including connectivity and member fees
64
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Xetra (cash equities) segment
Xetra (cash equities) segment: key indicators
FINANCIAL KEY FIGURES
Net revenue
Trading and clearing
Listing
Other (incl. connectivity and member fees)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFORMANCE INDICATORS
Trading volume (single-counted order book turnover at the trading venues Xetra®,
Börse Frankfurt and Tradegate)
Equities
ETF/ETC/ETN
2018
€m
228.7
170.6
17.8
40.3
118.8
102.7
115.5
131.6
2017
€m
218.3
161.1
15.4
41.8
108.4
102.9
115.1
120.6
€bn
€bn
1,719.6
1,552.7
166.9
1,467.6
1,320.9
146.7
Change
%
5
6
16
– 4
10
0
0
9
%
17
18
14
In the Xetra segment (cash equities), Deutsche Börse Group reports on the development of its cash
market trading venues (Xetra®, the Frankfurt Stock Exchange and Tradegate). Besides trading and
clearing services, the segment generates revenue from the listing of companies’ securities and exchange
admissions, connecting clients to their trading venues and providing services to partner exchanges.
During the year under review, the Xetra segment generated most of its net revenue (75 per cent) from
the trading and clearing of securities. Listing fees and other revenues contributed 8 per cent and 18 per
cent, respectively.
Cash market trading volumes rose by 17 per cent in 2018, marking the highest level since 2008.
Compared to other European trading platforms, Deutsche Börse Group’s trading venues also performed
very successfully in 2018 and grew stronger than their relevant peers.
Moreover, Xetra further expanded its position as the reference market for trading in DAX constituents and
increased its market share (68 per cent), thereby building on what was already a high level (2017:
65 per cent). The attractiveness of Xetra exchange trading was also enhanced thanks to T7, the new
trading technology introduced in July 2017. T7 offers numerous advantages to clients. For instance, the
new system even further reduces latency, which is the time needed for order processing.
Initial public offerings (IPOs) in the Xetra segment also developed very well. In total, 18 IPOs generated
an aggregate issue volume of €11.6 billion. 16 companies opted for a Prime Standard listing, while two
issuers went public in the Scale segment for small and medium-sized enterprises. At €4.2 billion, the
IPO of Siemens Healthineers AG in March 2018 was the biggest flotation by far, followed by the issuan-
ces of Knorr-Bremse AG and DWS Group GmbH & Co. KGaA.
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Furthermore, trading volumes in ETFs on indices surpassed last year’s level at €151.1 billion (2017:
€132.2 billion). Hence, Deutsche Börse was again the leading trading venue for trading ETFs in Europe:
a total of 1,368 ETFs were listed as at 31 December 2018 (2017: 1,205 ETFs). Assets under manage-
ment in ETFs totalled €524.2 billion at the end of 2018, which was in line with last year’s figure
(2017: €527.1 billion). New ETF issuers with Deutsche Börse were JP Morgan AM, Expat and HANetf.
Low interest rates and the general market environment further increased demand for Xetra-Gold® as
an investment instrument in 2018. This bearer bond is backed by physical gold. At the end of the
financial year 2018, the gold held in custody reached a record of 181.4 tonnes (2017: 175.0 tonnes),
equivalent to around €6.5 billion (2017: €6.0 billion). Amongst the exchange-traded commodities
(ETCs) available on Xetra, the most actively traded security was Xetra-Gold. The aggregate order book
turnover on Xetra was approximately €2.66 billion in 2018.
Net revenue in the Xetra segment increased by 5 per cent in 2018 but fell short of the trading volumes’
growth rate. This was mainly driven by the roll-out of the new T7 trading system and the related
adjustments to pricing models. Correspondingly, average margins did not reach the previous year’s level.
The segment’s adjusted EBITDA rose by 9 per cent.
Net revenue in the Xetra (cash equities) segment
€ million
228.7
40.3
Other 1)
17.8
Listing
218.3
41.8
15.4
161.1
170.6
Trading and clearing
2017
2018
1) Including connectivity and member fees
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Clearstream (post-trading) segment
Clearstream (post-trading) segment: key indicators
FINANCIAL KEY FIGURES
Net revenue
Custody
Settlement
Net interest income from banking business
Third-party services
Other (incl. connectivity, account maintenance)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFORMANCE INDICATORS
Assets under custody ICSD and CSD (average) (€bn)
Settlement transactions ICSD (m)
Cash balances (daily average) (€bn)
2018
€m
727.3
382.8
76.0
155.5
32.1
80.9
351.9
277.7
375.2
440.1
2017
€m
667.7
385.1
79.5
106.3
28.7
68.1
294.6
269.6
373.1
398.1
11,302.7
11,245.9
48.39
13.1
44.65
13.6
Change
%
9
– 1
– 4
46
12
19
19
3
1
11
%
1
8
– 4
Deutsche Börse Group’s settlement and custody activities are reported under the Clearstream (post-
trading) segment. By providing the post-trade infrastructure for the Eurobond market, Clearstream is
responsible for issuance, settlement, management and custody of securities from more than 50 markets
worldwide. Net revenue in this segment is mainly driven by the volume and value of securities under
custody, which determine the deposit fees. The settlement business depends primarily on the number of
settlement transactions processed by Clearstream, both via stock exchanges and over the counter (OTC).
This segment also contains the net interest income originating from Clearstream’s banking business.
As an international central securities depository (ICSD), Clearstream provides settlement and custody
services for securities held in Luxembourg. As a central securities depository (CSD), Clearstream serves
the market for German securities. In the year under review, the custody and settlement businesses
accounted for 53 per cent and 11 per cent of the segment’s net revenue, respectively, while net interest
income from Clearstream’s banking business contributed 22 per cent. Additionally, the segment provides
third-party services, such as regulatory reporting services (4 per cent of net revenue) and other services,
including connectivity and account maintenance (11 per cent of net revenue).
The value of securities held in custody in the CSD and ICSD business increased slightly by 1 per cent
year on year. The quantity of international settlement transactions increased by 8 per cent during the
2018 reporting year.
In April 2018, five markets (Belgium, France, Italy, Luxembourg and the Netherlands) migrated to
Clearstream’s new investor-CSD model for TARGET2-Securities (T2S), which is the pan-European
settlement platform for central bank money introduced by the ECB. Clearstream’s investor-CSD model
allows customers to consolidate their securities and cash activities in the T2S markets, enabling them
to benefit from higher liquidity, better funding and lower risk. Clearstream has thus succeeded in
migrating the first truly cross-border volumes onto the ECB’s pan-European securities settlement platform.
At the same time, Clearstream has been the first central securities depository to provide its clients
with access to all T2S markets (using central bank money) and international markets by way of a
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
comprehensive investor-CSD strategy – and all this through a single point of access. In December 2018,
the new model covering all classes of securities was enhanced to Austria. As at the end of 2018,
approximately 80 per cent of the custody and settlement volume of T2S markets was available through
Clearstream’s investor-CSD model.
The segment’s main growth driver in 2018 was the 46 per cent rise in net interest income, which
Clearstream generated on the cash deposits pledged by its clients. This resulted above all from rising US
interest rates, as around 52 per cent of the cash deposits are denominated in US dollars. During the
course of the year, the US Federal Reserve raised its key interest rates on four separate occasions – and
most recently in December – to a range between 2.25 per cent and 2.50 per cent. Average customer
cash balances were down 4 per cent year on year.
Business involving regulatory reporting services also increased markedly during the 2018 reporting
year. Clearstream offers such regulatory services to market participants and supervisory authorities via
REGIS-TR, a joint venture with Spain’s Iberclear. Net revenue is recognised under third-party services
and was 4 per cent higher year on year.
Overall, the Clearstream segment increased net revenue by 9 per cent in 2018, including €9.3 million
related to insurance services. Adjusted for this exceptional effect, net revenue rose by 8 per cent year-on-
year. Operating costs adjusted for exceptional effects advanced by 3 per cent, resulting in an 11 per cent
increase in adjusted EBITDA.
Net revenue in the Clearstream
(post-trading) segment
€ million
727.3
667.7
80.9
Other 1)
68.1
28.7
106.3
32.1
Third-party services
155.5
Net interest income from
banking business
79.5
76.0
Settlement
385.1
382.8
Custody
2017
2018
1) Including connectivity and account maintenance
68
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
IFS (investment fund services) segment
IFS (investment fund services) segment: key indicators
FINANCIAL KEY FIGURES
Net revenue
Custody
Settlement
Other (incl. connectivity, order routing and reporting fees)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFORMANCE INDICATORS
Assets under custody (average) (€bn)
Settlement transactions (m)
2018
€m
154.3
65.9
49.4
39.0
108.3
86.8
46.0
67.5
2017
€m
137.6
61.3
45.2
31.1
85.7
81.9
51.7
55.7
2,384.9
2,218.7
24.5
22.7
Change
%
12
8
9
25
26
6
– 11
21
%
7
8
In the IFS (investment fund services) segment, Deutsche Börse Group reports the settlement activity and
custody volumes of exchange-traded mutual and hedge funds processed by Clearstream. Customers are
able to settle and manage their entire fund portfolio via Clearstream’s Vestima® fund processing platform.
Net revenues in the IFS segment are largely a function of the value of assets under custody and the
number of settlement transactions, which determine the fees. The IFS business is one of the dedicated
structural growth engines of Deutsche Börse Group.
In the year under review, custody services accounted for 43 per cent of the segment’s net revenue
while settlement services contributed 32 per cent. Moreover, the segment provides other services such
as connectivity, order routing and reporting, which contributed 25 per cent to net revenues.
Despite the weak stock market performance, the value of securities held in custody increased by 7 per
cent during the 2018 financial year. Growth was mainly due to a number of large new clients, which
Clearstream won for its investment fund services, including renowned names such as Banque
Internationale à Luxembourg (BIL), SIX SIS and Lombard Odier who chose Clearstream as a strategic
partner to consolidate their funds business. Whereas BIL migrated its mutual fund holdings in 2018 and
plans to follow this by transferring its hedge funds, SIX SIS expects to start this process in the near future.
The increase in settlement transactions reflects the trading activity of new clients, as well as generally
heavier trading activities compared to the previous year – particularly in the international business.
In an effort to further expand its fund services offering, Clearstream acquired Swisscanto Funds Centre
Ltd., London, (SFCL) from Zürcher Kantonalbank in the reporting year. The transaction, involving an
amount in the high double-digit million-euro range, closed as at 1 October 2018. As at 2 November
2018, the company was renamed to Clearstream Funds Centre Ltd. Through this transaction,
Clearstream has extended its range of fund services to include the management of distribution contracts
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
and data processing. Clearstream will be able to offer SFCL’s range of services not only to SFCL’s existing
client base but also to its own international clientele. Thanks to this broader offering, Clearstream
anticipates revenue in this segment to increase by a low double-digit million-euro amount and plans to
realise synergies in terms of cross-selling.
As a result of both higher custody assets and number of settlement transactions, as well as the full
consolidation of SFCL as at 1 October 2018, the IFS segment recorded 12 per cent growth in its net
revenue in the past financial year. Due to the segment’s highly scalable business model, adjusted
EBITDA climbed by 21 per cent.
Net revenue in the IFS
(investment fund services) segment
€ million
154.3
39.0
Other 1)
49.4
Settlement
137.6
31.1
45.2
61.3
65.9
Custody
2017
2018
1) Including connectivity, order routing and reporting fees
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
GSF (collateral management) segment
GSF segment (collateral management): key indicators
FINANCIAL KEY FIGURES
Net revenue
Repo
Securities lending
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFORMANCE INDICATORS
Average outstandings from securities lending
Average outstandings from repo
2018
€m
83.1
43.3
39.8
48.4
39.5
34.2
43.1
€bn
53.8
377.6
2017
Change
€m
81.6
42.4
39.2
38.7
36.0
42.9
45.6
€bn
60.0
399.8
%
2
2
2
25
10
– 20
– 5
%
– 10
– 6
In the GSF (collateral management) segment, Deutsche Börse Group reports business development at
Clearstream’s securities financing and collateral management services.
Net revenue from the repo franchise – which encompasses triparty repo, GC Pooling® and collateral
management – contributed 52 per cent of the segment’s net revenue while net revenue from securities
lending services accounted for 48 per cent.
Net revenue in the GSF
(collateral management) segment
€ million
81.6
83.1
39.2
39.8
Securities lending
42.4
43.3
Repo
2017
2018
71
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
In the GSF business, average outstanding volumes in repo decreased by 6 per cent. Since the ECB
began to provide additional liquidity on the market as part of its quantitative easing (QE) programme,
volumes declined over time, especially in GC Pooling. At the same time, securities lending revenues
(strategic and fails lending programmes) overcompensated the declining collateral volumes, raising GSF
net revenue overall by 2 per cent compared to 2017.
The segment’s adjusted EBITDA declined by 5 per cent in the reporting year due to a disproportionate
rise in adjusted operating costs.
STOXX (index business) segment
STOXX (index business) segment: key indicators
FINANCIAL KEY FIGURES
Net revenue
ETF licences
Exchange licences
Other licences1)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFORMANCE INDICATORS
Assets under management in ETFs on STOXX® indices (average for the period)
Assets under management in ETFs on DAX® indices (average for the period)
2018
€m
144.5
43.8
31.3
69.4
53.9
44.5
90.6
100.0
€bn
81.9
27.7
2017
€m
127.7
41.5
27.1
59.1
47.7
42.2
79.9
85.5
€bn
76.8
28.7
Index derivatives (traded contracts) (m)
875.4
763.6
1) Including licences on structured products
Change
%
13
6
15
17
13
5
13
17
%
7
– 2
15
The STOXX segment (index business) comprises Deutsche Börse Group’s index business, which it
conducts through its STOXX Ltd. subsidiary. The extensive range of indices offered by STOXX provides
issuers with a wealth of opportunity to create financial instruments for a diverse range of investment
strategies.
Of the STOXX segment’s net revenue, 30 per cent was attributable to ETF licence fees, 22 per cent to
exchange licence fees and 48 per cent to other licence fees. While the amount of ETF licence fees
depends on the volume globally invested in ETFs based on the STOXX and DAX indices, exchange
licence fees are mainly driven by the trading volumes of STOXX and DAX index derivatives at Eurex.
Licence fees from structured products are shown as part of other licence fees.
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Financial statements
Notes
Further infomation
Another innovative product developed by the STOXX segment was the recently introduced STOXX®
Europe 600 ESG-X index, which features a standardised screening based on ESG exclusion criteria. The
screening is based on criteria applied by institutional investors and helps to reduce both reputational and
idiosyncratic risks. Furthermore, with the launch of fixed-income indices designed to reflect the concept
of liability-driven investing (LDI) in the second quarter of 2018, STOXX has focused on a market
amounting to some 1 trillion pound sterling. These indices can be used as independent reference points
for defined benefit pension plans; they are also suitable as flexible, investable building blocks for LDI
portfolios. The index methodology allows pension insurance schemes to better align their assets with
their liability profile over time.
After a dynamic start to the year, the weaker market environment – and especially the reallocation of
investors’ funds from Europe to other regions during the further course of the year – caused a slowdown
in the growth of ETF licence fees. Due to the rise in volatility and the resulting higher volumes traded
at Eurex, the net revenue from exchange licences was significantly higher. Overall, the segment’s net
revenue in full-year 2018 increased by 13 per cent. Adjusted EBITDA improved by 17 per cent during
the year under review.
Net revenue in the STOXX
(index business) segment
€ million
144.5
127.7
59.1
27.1
69.4
Other licences 1)
31.3
Exchange licences
41.5
43.8
ETF licences
2017
2018
1) Including licences on structured products
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Data segment
Data segment: key indicators
FINANCIAL KEY FIGURES
Net revenue
Cash and derivatives
Regulatory services
Other (incl. CEF® data services)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
PERFORMANCE INDICATORS
Subscriptions
2018
€m
170.3
113.6
17.8
38.9
83.5
53.0
86.7
2017
€m
154.2
108.8
10.7
34.7
59.6
53.6
94.6
117.2
100.6
thousand
thousand
337.8
438.2
Change
%
10
4
66
12
40
– 1
– 8
17
%
– 14
In the Data segment, Deutsche Börse Group reports on the development of its business concerning
licences for real-time trading and market signals, together with the supply of historical data and analytics.
The most important products in this respect are order book data from the cash and derivatives markets,
as well as reference data of Deutsche Börse and data from its partner exchanges. The segment generates
much of its net revenue on the basis of long-term client relationships; it is relatively independent of
trading volumes and capital markets volatility. Revenues from regulatory services are also shown in this
segment.
During the year under review, 67 per cent of net revenue was attributable to the supply of cash and
derivative markets data; 10 per cent of net revenue was generated with regulatory services and the
remaining 23 per cent with other services.
Despite a decline in the number of subscribers, the segment increased net revenue from cash and
derivatives markets data by 4 per cent in the financial year under review. This performance was also
driven by the further development of the segment’s licensing model, which has been differentiated
regarding specific usage – especially with regard to automated data processing.
Net revenue from regulatory services increased by 66 per cent in the financial year 2018. Growth was
particularly driven by the Regulatory Reporting Hub, which was rolled out at the beginning of January
2018. The Hub offers clients bundled solutions tailored to their reporting requirements, especially in
accordance with the revised EU Markets in Financial Instruments Directive (MiFID II).
Overall, the segment boosted net revenue by 11 per cent in 2018, with adjusted EBITDA up by
17 per cent.
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Management report | Report on economic position
Financial statements
Notes
Further infomation
Net revenue in the Data segment
€ million
170.3
38.9
Other 1)
17.8
Regulatory services
154.2
34.7
10.7
108.8
113.6
Cash and derivatives data
2017
2018
1) Including CEF® data services
Development of profitability
Deutsche Börse Group’s return on shareholders’ equity expresses the ratio of net income after taxes
to average equity available to the Group during the course of 2018. At 17.1 per cent, return on
shareholders’ equity was below the previous year’s ratio in the 2018 financial year (2017: 18.8 per
cent). Adjusted for the exceptional effects described in the
return on equity amounted to 20.8 per cent (2017: 18.4 per cent).
“Results of operations” section, the
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Financial position
Cash flow
Consolidated cash flow statement (condensed)
Cash flows from operating activities (excluding CCP positions)
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents as at 31 December
Cash and other bank balances as at 31 December
2018
€m
1,176.5
1,298.2
792.0
– 832.9
1,839.0
1,322.3
2017
€m
1,107.2
1,056.2
181.9
−501.0
580.2
1,297.6
Cash and cash equivalents at Deutsche Börse Group comprise cash and bank balances – to the extent
that these do not result from reinvesting current liabilities from cash deposits by market participants –
as well as receivables and liabilities from banking business with an original maturity of three months or
less. Cash and cash equivalents as at 31 December 2018 amounted to €1,839.0 million (31 December
2017: €580.2 million). Other cash and bank balances amounted to €1,322.3 million as at
31 December 2018 (31 December 2017: €1,297.6 million).
In the 2018 financial year, Deutsche Börse Group generated a positive cash flow of €1,257.3 million
(2017: €737.1 million). The informative value of Deutsche Börse Group’s cash flow is relevant only to a
limited extent since it includes in particular CCP positions which are subject to significant fluctuations on
the reporting date, as well as the inflows and outflows resulting from the banking business. Adjusted by
these technical effects, the cash flow in the 2018 financial year can essentially be explained as follows:
Deutsche Börse Group generated €1,176.5 million (2017: €1,107.2 million) in cash flow from operating
activities, excluding changes in CCP positions on the reporting date. This figure is determined indirectly,
resulting from the net profit for the period amounting to €852.5 million (2017: €896.0 million), which is
adjusted by non-cash expense and income such as depreciation and deferred tax assets. Additionally,
changes in working capital resulted in a positive contribution to cash flow from operating activities
amounting to €105.7 million (2017: €156.6 million), such contribution arising in particular in
connection with the programme for the implementation of the company strategy “Roadmap 2020”, which
contributed a total of €108.3 million to the increase in provisions.
The strongly positive operative cash flow from operating activities is essentially matched by the purchase
of the GTX Electronic Communication Network business in the amount of €85.9 million and Swisscanto
Funds Centre Ltd. in the amount of €83.3 million, investments in intangible assets and property
amounting to €160.0 million, a treasury share repurchase programme amounting to €364.2 million
and the distribution of €453.3 million in dividends by Deutsche Börse AG for the 2017 financial year
(dividends for the 2016 financial year: €439.0 million).
As in previous years, the Group assumes it will have a strong liquidity base in financial year 2019 due
to its positive cash flows from operating activities, adequate credit lines and flexible management and
planning systems.
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Management report | Report on economic position
Financial statements
Notes
Further infomation
For further details regarding the cash flow, please refer to the
note 22 to the consolidated financial statements.
as
consolidated cash flow statement as well
Operating leases
Deutsche Börse Group uses operating leases and does so, above all, for the office building in Eschborn
that the Group moved into in the second half of 2010 and for the buildings used by Clearstream
International S.A. in Luxembourg (see
note 27 to the consolidated financial statements for details).
Liquidity management
Deutsche Börse Group meets its operating liquidity requirements primarily from internal financing, i.e.
by retaining generated funds. The aim is to maintain liquidity at about the same level of operating costs
for one quarter (currently between €150 million and €250 million). An intra-Group cash pool is used for
pooling excess liquidity cash as far as regulatory and legal provisions allow. All of the Group’s cash is
invested in short-term instruments to ensure rapid availability and are largely collateralised using liquid
bonds from prime-rated issuers. Moreover, Deutsche Börse AG has access to external sources of
financing, such as bilateral and syndicated credit lines, and a commercial paper programme (see
25 to the consolidated financial statements for details on financial risk management). In recent years,
Deutsche Börse AG has leveraged its access to the capital markets to issue corporate bonds in order to
meet its structural financing needs.
note
Debt instruments issued by Deutsche Börse AG (outstanding as at 31 December 2018)
Type
Issue volume
ISIN
Term
Maturity Coupon p.a.
Listing
Fixed-rate bearer bond
€600 m
DE000A1RE1W1
10 years
October 2022
2.375%
Fixed-rate bearer bond
€500 m
DE000A1684V3
10 years
October 2025
1.625%
Fixed-rate bearer bond
€600 m
DE000A2LQJ75
10 years
March 2028
1.125%
Fixed-rate bearer bond
(hybrid bond)
€600 m
DE000A161W62
Call date
5.5 years/
final maturity in
25.5 years
February 2021/
February 2041
2.75% (until
call date)
Luxembourg/
Frankfurt
Luxembourg/
Frankfurt
Luxembourg/
Frankfurt
Luxembourg/
Frankfurt
Capital management
The company’s clients generally expect it to maintain conservative interest coverage and leverage ratios
and, thereby, achieve a good credit rating.
Therefore, the Group targets a minimum consolidated interest coverage ratio (defined as the ratio of
EBITDA to interest expenses from financing activities) of 16. In 2018, Deutsche Börse Group achieved
this target, with an interest coverage ratio of 40.8 (2017: 32.7). This figure is based on relevant
interest expenses of €41.2 million and adjusted EBITDA of €1,678.6 million.
The data included for the purpose of calculating interest coverage comprises interest expenses incurred
for financing Deutsche Börse Group, less interest expenses incurred by subsidiaries that are also
financial institutions, including Clearstream Banking S.A., Clearstream Banking AG and Eurex Clearing
AG. Interest expenses incurred that are not related to Group financing are not included in the calculation
of interest coverage.
77
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Deutsche Börse Group’s interest coverage ratio
Interest expense from financing activities
Issue volume
Fixed-rate bearer bond (term until March 2018)1)
Fixed-rate bearer bond (term until October 2022)
Fixed-rate bearer bond (term until October 2025)
Fixed-rate bearer bond (term until March 2028)2)
Fixed-rate bearer bond (hybrid bond)
Other interest expense
Total interest expense (incl. 50 % of the hybrid coupon)
EBITDA (adjusted)
Interest coverage3)
€600 m
€600 m
€500 m
€600 m
€600 m
1) With maturity on 26 March 2018 and fully repaid
2) Refinancing of the bond maturing on 26 March 2018
3) EBITDA / interest expense from financing activities (includes 50 per cent of the interest on the hybrid bond)
2018
€m
1.7
14.8
8.7
5.6
16.5
2.1
41.2
2017
€m
7.6
14.8
8.7
–
16.5
4.4
43.7
1,678.6
40.8
1,431.1
32.7
Moreover, Deutsche Börse had targeted a maximum ratio of interest-bearing gross debt to EBITDA of 1.5
at Group level. In 2018, the Group achieved the target ratio of gross debt to EBITDA of 1.2. This
figure is based on gross debt of €1,982.2 million, and adjusted EBITDA of €1,678.6 million. Gross debt
comprises interest-bearing liabilities of €1,982.2 million.
According to the definition of the rating agency, only 50 per cent of the Group’s hybrid bond is deducted
to determine gross debt as well as interest expenses.
Furthermore, the company endeavours to maintain the strong AA credit rating of its subsidiary
Clearstream Banking S.A., in order to ensure the long-term success of its Clearstream securities settlement
and custody segment. The activities of the Eurex Clearing AG subsidiary also require Deutsche Börse AG
to have and maintain a strong credit quality.
Deutsche Börse AG has stated its intention to maintain certain additional financial indicators for Clearstream
entities that it believes to be consistent with an AA rating. Specifically, this involves a commitment
to maintain minimum tangible equity (equity less intangible assets) of €700 million for Clearstream
International S.A., and of €400 million for Clearstream Banking S.A. During the reporting period,
Clearstream International S.A. exceeded this commitment, reporting tangible equity of €1,337.0 million
(2017: €1,206.6 million); Clearstream Banking S.A. was also higher at €1,253.3 million (2017:
€1,213.6 million). To the extent that the Clearstream subgroup has financial liabilities to non-banks, the
subgroup is committed to a minimum interest coverage ratio of 25. During the reporting period, as in the
previous year, Clearstream had no financial liabilities to non-banks; for this reason, no interest coverage
ratio is being reported.
Since 2007, Deutsche Börse Group’s target figures are based on the calculation method used by S&P
Global Ratings (S&P) rating agency. As S&P has adjusted its method for rating market infrastructure
providers, new key performance indicators, as listed below, will be used in the future. In order to achieve
a minimal financial risk profile consistent with an AA rating and in accordance with the S&P method, the
company aims to achieve the following targets for the new key performance indicators:
78
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Net debt to EBITDA ratio: no more than 1.75
Free funds from operations (FFO) to net debt: equal to or greater than 50 per cent
Interest coverage ratio (calculation changes by S&P): at least 14
Tangible equity (for Clearstream Banking S.A.): total of at least €1.1 billion
When calculating these key performance indicators, Deutsche Börse Group will closely follow the
method used by S&P.
To determine EBITDA, reported EBITDA is adjusted by the result from strategic investments, as well
as by expenses for operating leases and unfunded pension obligations. In 2018, EBITDA amounted
to €1,444 million.
In order to determine FFO, interest and tax expenses are deducted from EBITDA, applying the
respective imputed adjustments for operating leases and unfunded pension obligations. FFO in 2018
amounted to €1,091 million.
The Group’s net debt is reconciled by first deducting 50 per cent of the hybrid bond, as well as the
surplus cash as at the reporting date, from gross debt (i.e. from interest-bearing liabilities). Liabilities
from operating leases and unfunded pension obligations are then added. Net debt in 2018 amounted
to €1,642 million.
S&P bases the determination of the key performance indicators on the corresponding weighted average
of the reported or expected results of the previous, current and following reporting periods. To ensure
the transparency of the key performance indicators, Deutsche Börse Group reports them based on the
respective current reporting period.
The tables “Relevant key performance indicators according to the conventional calculation method”
and “Relevant key performance indicators according to the adjusted calculation method” illustrate the
calculation method and point out the differences between old and new values for the reporting year.
As of the first quarter of 2019, Deutsche Börse Group will report exclusively according to the adjusted
method.
Relevant key performance indicators according to the conventional calculation method
Gross debt / EBITDA
Interest coverage ratio
Tangible equity of Clearstream International S.A. (as at the reporting date)
Tangible equity of Clearstream Banking S.A. (as at the reporting date)
Target figures
≤ 1.5
≥ 16
≥ 700
≥ 400
€m
€m
2018
1.2
40.8
1,337.0
1,253.3
Relevant key performance indicators according to the adjusted calculation method
Net debt / EBITDA
Free funds from operations (FFO) / net debt
Interest coverage ratio
Target figures
≤ 1.75
≥ 50
≥ 14
%
2018
1.1
69
25.1
Tangible equity of Clearstream Banking S.A. (as at the reporting date)
€m
≥ 1,100
1,253.3
79
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Dividends and share buy-backs
Deutsche Börse Group generally aims to distribute dividends equivalent to between 40 and 60 per cent
of adjusted net profit for the period attributable to Deutsche Börse AG shareholders. Within this range,
the Group manages the actual dividend payout ratio depending on the business performance and taking
into account aspects of continuity. Furthermore, the company aims to invest the remaining freely
available funds primarily in organic growth, but also for complementary external development. Should
the investment of these funds by the Group not be possible, additional dividend payouts would represent
another possibility for distribution.
For the financial year 2018, Deutsche Börse AG is proposing that the Annual General Meeting resolve
to pay a dividend of €2.70 per no-par value share (2017: €2.45). This dividend corresponds to a
distribution ratio of 49 per cent of net profit for the period, attributable to Deutsche Börse AG
shareholders, adjusted for exceptional effects described in the
(2017: 53 per cent, also adjusted for exceptional effects). Given 183.3 million no-par value shares
bearing dividend rights, this would result in a total dividend amount of €495.0 million (2017:
€456.4 million). The number of shares bearing dividend rights is produced by deducting 6.7 million
treasury shares from the ordinary share capital of 190.0 million shares.
“Results of operations” section
Furthermore, Deutsche Börse AG announced in April 2017 that it would launch a share repurchase
programme with a volume of around €200 million during the second half of 2017. The programme
was operated from 27 November 2017 to 28 March 2018. On top of this, Deutsche Börse AG
announced on 5 December 2017 that it would launch an additional share repurchase programme – also
with a volume of around €200 million – during the course of 2018. The programme was operated from
13 August 2018 to 2 November 2018. Further details on the purchase of treasury shares within the
scope of the share repurchase programme, pursuant to section 160 (1) no. 2 of the AktG are available
in the
notes to Deutsche Börse AG’s annual financial statements, section “Equity”.
Credit ratings
Credit ratings
Deutsche Börse AG
S&P Global Ratings
Clearstream Banking S.A.
Fitch
S&P Global Ratings
Long-term
Short-term
AA
AA
AA
A– 1+
F1+
A– 1+
Deutsche Börse AG regularly has its credit quality reviewed by S&P, while Clearstream Banking S.A. is
rated by Fitch and S&P.
On 13 September 2018, Fitch Ratings affirmed the AA credit rating of Clearstream Banking S.A. with
a stable outlook. The rating reflects Clearstream Banking’s leading position in the post-trading business
and its diligent liquidity management, as well as its impeccable capitalisation.
On 20 November 2018, S&P affirmed the AA credit rating of Deutsche Börse AG. The rating reflects
the assumption that the Group will continue its growth strategy and reach at least the lower end of
its growth targets.
80
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
On the same date, S&P affirmed the AA credit rating of Clearstream Banking S.A. with a stable outlook.
The rating reflects the strong risk management, minimum debt levels, as well as Clearstream’s strong
position on the international capital markets, especially through its international custody and transaction
business.
As at 31 December 2018, Deutsche Börse AG was one of only two DAX-listed companies awarded
an AA rating by S&P. The rating histories of Deutsche Börse AG and Clearstream Banking S.A. are given
in the
five-year overview.
Net assets
Material changes to net assets are described below; the full consolidated balance sheet is shown in the
consolidated financial statements.
Consolidated balance sheet (extract)
ASSETS
Non-current assets
thereof intangible assets
thereof goodwill
thereof other intangible assets
thereof financial assets
thereof financial assets measured at amortised cost
thereof financial assets available-for-sale (AFS)
thereof financial instruments held by central counterparties
Current assets
thereof financial instruments held by central counterparties
thereof restricted bank balances
thereof other cash and bank balances
EQUITY AND LIABILITIES
Equity
Liabilities
thereof non-current liabilities
thereof financial instruments held by central counterparties
thereof financial liabilities measured at amortised cost
thereof deferred tax liabilities
thereof current liabilities
thereof financial liabilities measured at amortised cost
thereof financial instruments held by central counterparties
thereof cash deposits by market participants
31 Dec 2018
€m
31 Dec 2017
€m
15,642.0
10,883.7
4,191.6
2,865.6
952.7
11,168.6
1,057.1
–
9,985.4
4,091.0
2,770.9
911.2
6,535.4
–
1,692.0
4,837.2
146,257.1
124,257.7
94,280.3
29,833.6
1,322.3
79,510.7
29,392.0
1,297.6
4,963.4
4,959.4
156,935.7
130,182.0
12,828.7
9,985.4
2,283.2
194.5
7,023.8
4,837.2
1,688.4
226.8
144,107.0
123,158.2
19,219.7
94,068.3
29,559.2
14,126.3
78,798.6
29,215.3
Deutsche Börse Group’s total assets have increased in comparison with the previous year – this is
primarily due to the rise in the financial instruments held by central counterparties on the reporting date.
81
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Taking into account the two acquisitions which lead to an increase in goodwill, the increase in intangible
assets was relatively moderate. Adjusted by the rise in the financial instruments held by central
counterparties, current assets showed an increase due to the increase in debt instruments valued at
amortised cost on the reporting date, such debt instruments covering essentially the activities of the
Clearstream subgroup.
The equity of the Group is essentially similar to the prior year’s equity. The increase in the cumulative
profits is matched primarily by an increase in the amount of treasury shares purchased. Adjusted by the
rise in the financial instruments held by central counterparties, non-current liabilities have increased due
to the emission of a ten-year euro bond in the amount of €600.0 million. The increase in the current
liabilities is mainly due to the development of the contributions by the clearing and settlement business
of the Clearstream subgroup.
Overall, Deutsche Börse Group invested €160.0 million in the continued business in intangible assets
and property, plant and equipment (capital expenditure or capex) in the reporting period (2017:
€149.2 million). The Group’s largest investments were made in the Clearstream and Eurex segments.
Working capital
Working capital comprises current assets less current liabilities, excluding technical closing-date
items. Current assets, excluding technical closing-date items, amounted to €1,098.3 million (2017:
€1,020.9 million). As Deutsche Börse Group collects fees for most of its services on a monthly
basis, the trade receivables of €397.5 million included in current assets as at 31 December 2018
(31 December 2017: €331.9 million) were relatively low compared with net revenue. The current
liabilities of the Group, excluding technical closing-date items, amounted to €1,468.5 million
(2017: €1,280.1 million, excluding technical closing-date items). The Group therefore had slightly
negative working capital of €370.2 million at the end of the year (2017: €259.2 million).
Technical closing-date items
The “financial instruments of the central counterparties” item relates to the function performed by Eurex
Clearing AG and European Commodity Clearing AG: since they act as the central counter parties for
Deutsche Börse Group’s various markets, their financial instruments are carried in the balance sheet at
their fair value. The financial instruments of the central counterparties are described in detail in the
risk report and in
notes 3, 13 and 25 to the consolidated financial statements.
Market participants linked to the Group’s clearing houses partly provide collateral in the form of cash
deposits, which are subject to daily adjustments. The cash deposits are generally invested on a secured
basis overnight by the central counterparties and reported in the balance sheet under “restricted bank
balances”. The total value of cash deposits at the reporting dates relevant for the reporting period
(31 March, 30 June, 30 September and 31 December) varied between €28 billion and €30 billion
(2017: between €27 billion and €35 billion).
82
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Value added: breakdown of company performance
Value added is calculated by subtracting depreciation and amortisation as well as external costs from
the company performance. In 2018, the value added by Deutsche Börse Group amounted to
€2,028.3 million (2017: €1,974,8 million). The breakdown shows that large portions of the generated
value added flow back into the economy: 25 per cent (€509.8 million) benefit shareholders in the form
of dividend payments, while 41 per cent (€824.0 million) was attributable to staff costs in the form
of salaries and other remuneration components. Taxes accounted for 15 per cent (€304.3 million), while
2 per cent (€47.5 million) was attributable to external creditors. The 17 per cent value added that
remained in the company (€342.7 million) is available for investments in growth initiatives, among other
things (see the “Origination of value added” and “Distribution of value added” charts).
Origination of value added
Distribution of value added
Company performance: €2,755.0 million
Value added: €2,028.3 million
7 %
Depreciation and
amortisation
19 %
External costs
2 %
External creditors
17 %
Retained earnings
15 %
Taxes
74 %
Value added
25 %
Shareholders
(dividends)
41 %
Employees
83
83
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Overall assessment of the economic position by the Executive Board
The economic environment remained favourable in 2018, both in Europe and globally, whereas the
outlook took a turn for the worse at the beginning of the second half of the year. This was especially due
to trade conflicts and the imminent Brexit. Nevertheless, interest rates in the USA rose again, while the
ECB allowed bond purchases in the euro zone to expire at the end of December. At the same time,
average equity market volatility was higher than in the previous year. Against this background, equity
index derivatives volumes rose significantly, and equities trading benefited as well. At the same time,
volumes in interest rate derivatives grew and net interest income of the Clearstream segment improved
due to higher interest rates for overnight client balances denominated in US dollars. Alongside these
cyclical factors, the Group’s structural net revenue also increased by 6 per cent. The main reasons for
this were the positive development of new products and OTC clearing in the Eurex segment, the gain in
additional market share in the energy markets, and the further expansion of the investment fund and
index business. In summary, these factors led Deutsche Börse Group’s financial performance to develop
very positively during the 2018 financial year, slightly exceeding the range of net revenue anticipated by
the Executive Board. The Group recorded a 13 per cent increase in net revenue. Adjusted operating
costs were up 5 per cent on the previous year’s figure. This was mainly due to higher staff costs, which
were attributable to the increased number of employees and higher variable remuneration. Moreover, the
full consolidation of two companies acquired in the course of the year contributed to the rise in costs. On
an adjusted basis, Deutsche Börse Group achieved a 17 per cent increase in net profit attributable to
Deutsche Börse AG shareholders, exceeding the anticipated range of 10 per cent to 15 per cent.
The Executive Board considers Deutsche Börse Group’s financial position to be extremely sound during
the reporting period. The Group generated high operating cash flows, as in the previous year. Given the
increase in adjusted EBITDA, Deutsche Börse Group was able to further improve the ratio of interest-bearing
gross debt to EBITDA at Group level: With a value of 1.2, the target value of 1.5 was clearly undercut.
Rating agencies again affirmed the Group’s credit quality, awarding it excellent ratings in 2018. On
20 November 2018, S&P Global Ratings (S&P) confirmed Deutsche Börse AG’s AA credit rating. On the
same day, S&P – just like Fitch Ratings on 13 September 2018 – affirmed the AA credit rating of
Clearstream Banking S.A. Both ratings were assigned a stable outlook.
Deutsche Börse AG has offered its shareholders attractive returns for years – and the financial year 2018
is no exception. At €2.70 (2017: €2.45), the dividend proposed for distribution to shareholders is
above the prior-year level. As a result of the improvement in earnings, the distribution ratio decreased from
53 per cent in the previous year to 49 per cent in the year under review (adjusted for exceptional effects
in both cases), and was thus in line with the Executive Board’s forecast range of 40 to 60 per cent.
The Group’s net assets, financial position and results of operations can be considered to be in an
orderly state.
84
84
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
Deutsche Börse Group: five-year overview
Consolidated income statement
Net revenue
thereof net interest income from banking business
Operating costs (excluding depreciation,
amortisation and impairment losses)
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
Depreciation, amortisation and impairment losses
Net profit for the period attributable to
Deutsche Börse AG shareholders
Earnings per share (basic)
Consolidated cash flow statement
Cash flows from operating activities
Consolidated balance sheet
Non-current assets
Equity
Financial liabilities measured at amortised cost
Performance indicators
Dividend per share
Dividend payout ratio
Employees (average annual FTEs)
Personnel expense ratio (staff costs / net revenue)
Tax rate
Return on shareholders’ equity (annual average)6)
Deutsche Börse shares
Year-end closing price
Average market capitalisation
Rating key figures
Gross debt / EBITDA
Interest coverage ratio
Deutsche Börse AG: S&P Global Ratings
Clearstream Banking S.A.: S&P Global Ratings
Fitch
Market indicators
Xetra®, Börse Frankfurt and Tradegate
Trading volume (single-counted)
Eurex®
Number of contracts
Clearstream
2014
2015
2016
2017
2018
€m
€m
€m
€m
€m
€m
€
2,047.8
2,220.31)
2,388.7
2,462.3
2,779.7
37.6
50.6
84.0
132.6
204.5
– 990.0
– 1,164.21)
– 1,186.4
– 1,131.6
– 1,340.2
1,136.1
1,054.61)
1,239.2
1,528.5
1,443,7
124.8
119.0
131.0
159.9
210.5
762.3
4.14
613.31)
3.311)
722.1
3.87
874.3
4.68
824.3
4.46
€m
677.3
10.1
1,621.4
1,056.2
1,298.2
€m
€m
€m
€
%
%
%
%
€
€bn
%
Rating
Rating
Rating
11,267.2
14,386.9
11,938.7
10,883.7
15,642.0
3,752.1
1,428.52)
3,695.1
4,623.2
2,546.5
2,284.7
4,959.4
1,688.42)
4,963.4
2,283.2
2.10
584)
3,911
234)
26.04)
21
59.22
10.8
1.54)
26.04)
AA
AA
AA
2.25
554)
4,4601)
27
26.0
204)
81.39
14.7
1.94)
23.21)
AA
AA
AA
2.35
544)
4,731
25
27.0
194)
77.54
14.0
1.5
25.3
AA
AA
AA
2.45
534)
5,183
26
27.04)
184)
96.80
17.2
1.4
32.7
AA
AA
AA
2.703)
494)5)
5,397
30
27.04)
214)
104.95
21.5
1.2
40.8
AA
AA
AA
€bn
1,282.6
1,635.7
1,377.0
1,467.6
1,719.6
m
2,097.9
1,672.61)
1,727.5
1,675.9
1,951.8
Assets under custody (annual average)
€bn
10,717.5
11,459.7
11,172.9
11,245.9
11,302.7
Investment fund services (IFS)
Assets under custody (annual average)
€bn
1,497.2
1,814.5
1,902.0
2,218.7
2,384.9
1) Figure for 2015 without consideration of International Securities Exchange (ISE), which represents a discontinued operation due to its disposal as at 30 June 2016
2) Bonds that will mature in the following year are reported under “other current liabilities” (2014: €139.8 million, 2017: €599.8 million).
3) Proposal to the Annual General Meeting 2019
4) Adjusted for exceptional effects; please refer to the consolidated financial statements for the respective financial year for adjustment details.
5) Amount based on the proposal to the Annual General Meeting 2019
6) Net profit for the period attributable to Deutsche Börse AG shareholders / average shareholders’ equity for the financial year based on the quarter-end balance of
shareholders’ equity
85
85
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Report on post-balance sheet date events
Financial statements
Notes
Further infomation
Report on post-balance sheet date events
There have been no material events after the balance sheet date.
Combined non-financial statement
This combined non-financial statement for Deutsche Börse Group and the parent company Deutsche
Börse AG is integrated into the combined management report; it fulfils the provisions of sections 289b–e
and 315b–c of the Handelsgesetzbuch (HGB, German Commercial Code). It is also in accordance with
the standards (“Core” option) of the Global Reporting Initiative (GRI). A detailed overview of all GRI
indicators (GRI index) is available at
www.deutsche-boerse.com > Sustainability > Reporting > GRI.
More detailed information, which is referenced in the non-financial statement, does not form part of the
statement itself. Provided no explicit statements are made for the parent company, qualitative informa-
tion within the meaning of the combined management report applies to Deutsche Börse Group and the
parent company Deutsche Börse AG. In some cases, quantitative details concerning the parent entity are
disclosed separately.
Deutsche Börse Group uses not only the financial figures outlined in the
“Group management” section
for Group management, but also non-financial performance indicators – specifically, the availability of its
trading systems for the cash and derivatives markets and the share of women in executive positions.
For details regarding the targets pursued and the results achieved in the year under review, please refer
to the
statement and corporate governance report – target figures for the proportion of female executives
beneath the Executive Board”.
sections entitled “Social matters – systems availability” and
“Combined corporate governance
A materiality analysis comprising continuous analyses and assessments of relevant internal and external
stakeholders’ expectations and requirements is a key element of Deutsche Börse Group’s sustainability
strategy. This process is aimed at identifying the issues required to understand the Group’s business
performance, operating results, the capital corporation situation and the impact of its activities on
non-financial aspects. Thus, the Group is able to identify opportunities and risks in its core business
activities at an early stage and define concrete areas of entrepreneurial activity on this basis.
86
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
The combined non-financial statement outlines the objectives, actions, due diligence processes applied,
the involvement of the Group’s management and other stakeholders, as well as the concept outcomes
“Employees” section), compliance (including combating
with respect to employee matters (see the
corruption and bribery), social matters and product matters. Deutsche Börse Group voluntarily reports on
human and employee rights, as the active protection of human rights is a key element of the Group’s
corporate responsibility. The Group addresses this at various points along the value chain. Relevant
matters in this non-financial statement are specifically reflected in the
“Employees” section, and in the
“Human rights in the supply chain” section, which focuses on the Group’s procurement management.
As a service provider with a focus on providing electronic market infrastructure services, Deutsche Börse
Group engages in relatively little environmentally sensitive activity from a corporate environmental
perspective; hence, no detailed report is provided in this combined non-financial statement in this respect.
Nonetheless, the Group is committed to protecting the environment and conserving natural resources.
Deutsche Börse Group has outlined its environmental policies in its
cators for its environmental sustainability performance are available on its website:
boerse.com > Sustainability > Reporting > ESG indicators. Moreover, environmental protection issues
are becoming increasingly relevant for the design of individual products or services; related measures
are described in detail in the
“Product matters” section. Deutsche Börse Group is also developing a
climate strategy aligned with the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD).
code of business conduct. Indi-
www.deutsche-
As an international capital markets organiser, Deutsche Börse aims to build and grow market participants’
trust in its market structures. As a responsible member of society, it also endeavours to use the expertise
it deploys to successfully manage its core business in such a way that enables contribution to
resolving social challenges. Within this scope, the company strives to be a role model. Please refer to
the
“Fundamental information about the Group” section for a detailed description of Deutsche Börse
Group’s business model. Deutsche Börse Group acts “with an eye to the future”. Its sustainability
strategy of the same name defines the Group’s understanding of entrepreneurial responsibility and
guides its operations. Please see the
commitment to sustainability”.
section entitled “Management approach for a Group-wide
As a member of the United Nations Global Compact (UNGC) and the Sustainable Stock Exchange
initiative (SSE), Deutsche Börse Group has committed itself to implementing the 17 Sustainable
Development Goals (SDGs) of the “2030 Agenda for Sustainable Development” set by the UN. An
overview of Deutsche Börse Group’s contribution to the corresponding targets can be found in the
following
“Overview: key sustainability aspects” table.
87
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Overview: key sustainability aspects
Relevant contents of the non-financial statement
according to section 289c HGB1)
Areas for action relevant to
Deutsche Börse Group
UN Sustainable Development Goals (SDGs)
covered by Deutsche Börse Group
Business model
p. 28
■■ Overview of Deutsche Börse Group
■■ Objectives and strategies
■■ Internal management
■■ Research and development activities
■■ Economic performance
■■ Stakeholder engagement
■■ Brand management
Mandatory aspects
Environmental matters
■■ Ecological awareness:
conduct (principle no. 14)
code of business
■■ Environmental management
■■ SDG 7 “Affordable and clean energy”
■■ SDG 8 “Decent work and economic growth”
■■ SDG 9 “Industry, innovation and infrastructure”
■■ SDG 12 “Responsible consumption
and production”
■■ SDG 17 “Partnerships for the goals”
■■ Human capital development
■■ Human and employee rights
■■ SDG 4 “Quality education”
■■ SDG 5 “Gender equality”
■■ SDG 8 “Decent work and economic growth”
■■ SDG 10 “Reduce inequalities”
■■ Economic participation and
education
■■ Transparent, stable and
fair markets
■■ SDG 4 “Quality education”
■■ SDG 8 “Decent work and economic growth”
■■ SDG 9 “Industry, innovation and infrastructure”
■■ SDG 10 “Reduce inequalities”
■■ SDG 12 “Responsible consumption and
production”
■■ SDG 16 “Peace, justice and strong institutions”
■■ SDG 17 “Partnerships for the goals”
■■ Human and employee rights
■■ SDG 5 “Gender equality”
■■ SDG 8 “Decent work and economic growth”
■■ SDG 10 “Reduce inequalities”
■■ Good governance
■■ SDG 8 “Decent work and economic growth”
■■ SDG 10 “Reduce inequalities”
■■ SDG 16 “Peace, justice and strong institutions”
■■ Environmental aspects of products
“Product matters” section
or services:
Employee matters
p. 89
■■ Staff development
■■ Human resources strategy
■■ Talent promotion
■■ Promoting diversity and gender equality
■■ Measures to promote women
■■ Target quotas for women
■■ Feedback for employees and managers
■■ Training and continuing professional development
■■ Work-life balance
Social matters
p. 101
■■ Sustainable financial market initiatives
■■ Stable, transparent and fair markets
■■ Systems availability
■■ Market transparency
■■ Stable financial markets
Respect for human rights
p. 108
■■ Code of conduct for suppliers
■■ Supplier survey
■■ Monitoring suppliers in relation to risk criteria
Anti-corruption and bribery matters
p. 97
■■ Compliance organisation
■■ Code of business conduct
■■ Compliance rules
■■ Compliance training
■■ Whistleblowing system
■■ Analysis of compliance risks
■■ Due diligence / customer review
■■ Data protection
■■ Inside information
■■ Internal / external audit
Further relevant aspects
Product matters
p. 104
■■ Customer satisfaction
■■ Sustainable index products
■■ Energy and energy-related markets
■■ Sustainable product and
service portfolio
■■ SDG 7 “Affordable and clean energy”
■■ SDG 8 “Decent work and economic growth”
■■ SDG 9 “Industry, innovation and infrastructure”
■■ SDG 12 “Responsible consumption
and production”
1) HGB = Handelsgesetzbuch (German Commercial Code)
8888
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Employees
This chapter provides an overview of key figures reflecting staff developments at Deutsche Börse Group;
at the same time, it satisfies the requirements for reporting on employee matters as part of the non-
financial statement.
Staff development
As at 31 December 2018, Deutsche Börse Group employed a total of 5,964 staff (31 December 2017:
5,640), having 96 nationalities at 37 locations worldwide. The average number of employees in the
reporting period was 5,800 (2017: 5,567). On a Group level, this corresponds to an increase of around
4.2 per cent compared to the previous year’s reporting date, which was primarily a result of the
development of control functions and the consolidation of Clearstream Funds Centre Ltd. (formerly
Swisscanto Funds Centre Ltd.) and the US foreign-exchange trading platform GTX. The Group had an
average of 5,397 full-time equivalents during the year (2017: 5,183), including part-time employees.
As at 31 December 2018, the proportion of part-time employees was higher in the general workforce
than in management and higher amongst women than amongst men. For details regarding the exact
proportion by location, please refer to the
workforce as at 31 December 2018”.
table entitled “Key data on Deutsche Börse Group’s
Employees by country/region
Germany
Luxembourg
Czech Republic
Ireland
United Kingdom
Rest of Europe
America
Asia
Total
Employees by segment
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data
Total
31 Dec 2018
Total
2,689
1,077
890
404
208
312
184
201
Male
1,661
Female
1,028
648
563
176
134
194
135
98
429
327
228
74
118
49
103
5,964
3,609
2,355
31 Dec 2018
1,265
725
253
488
1,767
752
242
197
275
5,964
89
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
797 staff joined the Group (excluding consolidation effects), while 507 employees left the Group during
the course of the year (excluding deconsolidation effects and number of employees who accepted one
of the Group offers within the framework of efficiency programmes and left the company or entered
partial retirement). The fluctuation rate was 8.7 per cent (unadjusted: 9.3 per cent) and thus above the
previous year (2017: 7.4 and 8.7 per cent respectively). At the end of the year under review, the
average length of service for the company was 9.5 years (2017: 9.4 years).
The number of Deutsche Börse AG’s employees rose by 69 during the year under review to 1,502 as at
31 December 2018 (comprising 555 women and 947 men; 31 December 2017: 1,433). On average,
Deutsche Börse AG employed 1,465 people during the 2018 financial year (2017: 1,392). On 31 De-
cember 2018, Deutsche Börse AG had employees at six locations around the world. During the 2018
financial year, 69 employees left Deutsche Börse AG; the adjusted fluctuation rate thus amounted to
4.6 per cent (unadjusted: 5.4 per cent).
Joiners and leavers by gender in 2018
Joiners
Leavers
Deutsche Börse AG
All locations
Deutsche Börse Group
Germany
Luxembourg
Czech Republic
Ireland
Other locations
All locations
Male
Female
Total
Male
Female
Total
66
156
56
110
52
120
494
54
90
40
67
36
70
303
120
246
96
177
88
190
797
47
81
44
72
17
95
22
46
32
45
16
59
309
198
69
127
76
117
33
154
507
Joiners and leavers by age in 2018
Joiners
Under
30 years
Leavers
30–39
40–49
50 years
and older
Under
30 years
30–39
40–49
50 years
and older
Deutsche Börse AG
All locations
Deutsche Börse Group
Germany
Luxembourg
Czech Republic
Ireland
Other locations
Total
55
46
104
102
39
86
69
74
41
71
12
59
372
285
15
29
12
19
4
32
96
4
11
4
1
3
25
44
9
27
20
44
16
50
23
59
35
62
13
49
157
218
23
28
16
10
3
35
91
14
13
5
1
1
21
41
90
90
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Human resources strategy
Employee commitment and highly developed skills are among the cornerstones supporting Deutsche
Börse Group’s business success. Its corporate culture is characterised by a sense of responsibility,
commitment, flexibility and teamwork. Deutsche Börse Group aims to make sure that staff with these
qualities continue to join the company in the future and that they stay for the long term, if possible.
Deutsche Börse Group’s Executive Board is also engaged in employee matters through one of its Board
members who is simultaneously Director of Labour Relations as well as through other regular reporting
formats. The Group’s workforce is highly diverse in many respects – including nationality, age, gender,
religion, cultural and social origin. The company consciously promotes this diversity and benefits from it,
creating an environment conducive to integration – to the advantage of corporate culture. This is also
in the interests of Deutsche Börse Group’s business: its broad range of diverse products and services and
the international composition of its client base pose specific requirements regarding the professional and
cross-cultural expertise of employees.
Within the scope of its growth strategy, the Group promotes a high-performance culture with a distinct
focus on clients’ needs and innovation. In order to encourage this culture, Deutsche Börse Group has
a remuneration system for executive staff in place that incorporates growth, performance and financial
indicators to a greater extent than in previous years.
“Total expenses for employee benefits” table). At €123,000, average staff costs
Deutsche Börse Group offers its employees a wide range of benefits over and above statutory
requirements (see the
for employees and executive staff (adjusted for the costs of efficiency programmes and staff costs for
the members of the Executive Board) slightly increased year-on-year (2017: €118,000). Staff costs per
employee at the parent entity Deutsche Börse AG, which accounts for the largest part of the Group’s
executive staff, amounted to €144,000 (2017: €149,000). In addition to the base salary, these costs
include (among other things), social benefits, pension provisions and variable remuneration components.
In the 2018 financial year, the Executive Board of Deutsche Börse AG approved a voluntary linear salary
increase of 2.5 per cent for collectively paid employees in Germany. In addition, a central budget will
be made available for individual discretionary salary increases. In the course of harmonising the Group’s
processes, all salary increases will take effect on 1 January 2019, instead of in July as in the previous
year. Salary adjustments have also been made at the other locations.
Talent promotion
To gain, motivate and promote top talent is a key instrument for Deutsche Börse Group to remain
sustainably successful in this digital age. With the introduction of a new recruiting tool, the applicant
process has been simplified and the user experience enhanced for all parties involved. In the year
under review, the Group implemented further innovative formats for attracting talent.
Also in place are the “Evolving Leaders” programme, which is designed to identify and promote future
managers from within the Group and the “Show Your Talent” initiative, which is set to create visibility for
and support employees’ entrepreneurial and innovative potential. At the same time, the programmes
are designed to strengthen staff commitment and their performance orientation.
From initial contact to the actual meeting, mentors and mentees can connect on the “Meet your Mentor”
platform. Experienced colleagues assume sponsorship for other employees, making their work easier.
As mentors, they assist new colleagues in networking beyond their own department, help them to get
to know the company and offer a comprehensive, cross-divisional understanding. The “New Role”
mentoring programme makes it easier for colleagues to take on a new management role.
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Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Promoting diversity and gender equality
As a global enterprise, Deutsche Börse Group advocates openness and fairness at the workplace. This
is why Deutsche Börse AG signed the
integration of diversity in the working environment. For Deutsche Börse Group, diversity within the company
is the basis for achieving a corporate culture characterised by open dialogue, trust and mutual acceptance.
“Diversity Charter” to support recognition, appreciation and
Deutsche Börse Group does not tolerate any discrimination, whether on the grounds of gender, sexual
orientation, race, nationality, ethnic origin, age, religion or disability, irrespective of whether this
concerns behaviour among employees or the placement of orders with third parties. Deutsche Börse
Group’s Equal Opportunities Officers safeguard the equal treatment of staff members. Moreover, Human
Resources has implemented processes designed to ensure equal treatment in the selection of personnel
and enable the Group to take prompt action whenever discrimination is suspected. In 2018, no
incidents of discrimination at the Frankfurt/Eschborn, Luxembourg, Prague and or Cork locations (which
are covered by reporting) were reported; accordingly, no countermeasures were required.
To prevent systematic remuneration disadvantages for women or men, Deutsche Börse AG carries out
analyses at regular intervals among employees in Germany to identify any remuneration differences
between women and men.
Measures to promote women
As a general rule, the candidates’ qualifications are decisive for any appointment to a position at
Deutsche Börse Group. However, in order to raise the share of women in executive positions, the
company explicitly ensures that women are also identified as candidates. In addition, Deutsche Börse
Group offers numerous additional tools to promote female employees, such as targeted succession
planning and a mentoring programme involving internal and external mentors. Meetings and training
courses designed specifically for women are held regularly within the scope of a women’s network.
Target quotas for women
For details regarding targets for female quotas, please refer to the
governance statement and corporate governance report – target figures for the proportion of female
executives beneath the Executive Board”.
section entitled “Combined corporate
Feedback for employees and managers
Deutsche Börse Group managers hold annual appraisal discussions with employees within their area of
responsibility, jointly defining targets for the next year and document these discussions. 96 per cent
of employees recorded in Deutsche Börse Group’s internal staff performance appraisal system received
an assessment last year. The remaining 4 per cent are subject to the following special provisions:
Pursuant to an employer/works council agreement, German employees aged 59 or older may waive the
annual appraisal and target-setting process.
Newly hired employees are to receive an appraisal and agree upon targets following expiry of their
probationary period.
The appraisal system is applied equally to female and male employees. A separate target-agreement
system exists for managerial staff.
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Subsidiaries EEX and 360T use their own appraisal systems. The data compiled by these subsidiaries is
currently not maintained or made available centrally. The long-term objective is to harmonise appraisal
and target-agreement processes across the entire Group, thus enhancing availability and transparency of
the data collected.
Total expenses for employee benefits
Lunch
allowance
€ thous.
Childcare
€ thous.
Sports and
leisure
€ thous.
Accident
insurance
€ thous.
Savings
plans
€ thous.
Travel
expenses
€ thous.
Deutsche Börse AG
All locations
2,317.9
574.7
47.2
147.3
534.2
641.6
Deutsche Börse Group
Germany
Luxembourg
Czech Republic
Ireland
3,915.4
1,747.4
728.2
268.2
895.8
0
26.9
0
75.9
8.6
220.0
34.4
270.9
111.3
28.7
18.8
847.9
1,042.0
0
1,159.6
0
116.6
202.7
0
Training and continuing professional development
Deutsche Börse assigns high priority to training its staff and providing continuing professional
development: employees continuously enhance and renew their financial markets knowledge. In addition,
they have a large number of training courses at their disposal for polishing their communication and
organisational skills. Deutsche Börse also supports its employees and managers in facing their individual
challenges by offering a broad range of internal and external professional development measures.
In 2018, the Group invested an average of 2.9 days per employee for continuing professional
development (2017: 3.3 days) and carried out, among other things, 1,175 internal training events
(2017: 1,568 internal training events). Of these, 37 per cent were on business-related issues,
34 per cent covered specialist topics, 11 per cent dealt with the work-life balance and 18 per cent
were on IT subjects or part of induction training.
Key figures on staff training in 2018
Average number of training days per employee
Average number of training days per FTE1)
3.2
3.4
3.1
3.7
3.2
3.5
2.9
3.0
2.8
3.3
2.9
3.1
Deutsche Börse AG
Deutsche Börse Group
Male
Female
Total
Male
Female
Total
Number of hours
thereof managers
thereof employees
1) FTE = full-time equivalent
24,609
13,564
38,173
84,902
52,313
137,215
%
%
6.1
93.9
6.1
93.9
6.1
93.9
7.4
92.6
2.7
97.3
5.6
94.4
93
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Work-life balance
It is Deutsche Börse Group’s declared intention to achieve a reasonable work-life balance. The company
offers a number of options designed to achieve a positive work-life balance as part of its “Job, Life &
Family” initiative, e.g. the option to work from home (home office), take a sabbatical or have access to
(or receive contributions for) child care facilities.
Deutsche Börse Group offers parental leave at all its locations in accordance with applicable national
regulations (see the “Key figures on parental leave” table). The high ratio of employees who return from
parental leave indicates a constructive working atmosphere and good employment conditions within
the company.
At the same time, Deutsche Börse Group is well aware of its duty of care and attaches great importance
to the health and well-being of employees. The company accordingly offers employees various sports
and relaxation courses. One of the objectives pursued with these measures is to ensure that employees
not only remain healthy despite a high workload but also to keep sickness levels within the company as
low as possible. For example, the company assigns importance to the fact that employees take their full
annual vacation during the course of the year. The sickness ratio within Deutsche Börse Group stood at
3.1 per cent during the year under review (2017: 3.0 per cent) and 4.0 per cent (2017: 3.9 per cent)
at the parent company Deutsche Börse AG.
Key figures on parental leave
Entered parental leave in 2018
Returned from parental leave
in 2018
Multiple-year return ratio1)
Male
Female
Male
Female
Deutsche Börse AG
Deutsche Börse Group
31
76
20
100
32
82
22
87
1) Employees whose parental leave ended in 2018, and who remained with the company
Male
%
100
99
Female
%
100
95
94
94
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Key data on Deutsche Börse Group’s workforce as at 31 December 2018 (part 1)
Deutsche Börse AG
Deutsche Börse Group
All locations
Germany
Luxembourg
Employees
50 years and older
40−49 years
30−39 years
Under 30 years
Average age
Full-time equivalents
Senior and middle management
Junior management
Staff
Part-time employees
Senior and middle management
Junior management
Staff
Disabled employees
Proportion of graduates (%)1)
Apprentices
Interns and students
Length of service
Under 5 years (%)
5–15 years (%)
Over 15 years (%)
Staff turnover
Joiners
Leavers
Male
Female
947
329
273
264
81
44
917
101
80
736
30
0
1
29
20
65
8
84
45
22
33
66
47
555
126
139
197
93
40
408
15
22
371
147
0
4
143
13
35
7
78
47
21
32
54
22
Training days per staff member
Promotions
3.25
52
3.06
30
Male
1,661
500
474
523
164
43
1,603
159
114
1,330
58
2
1
55
37
65
8
126
44
26
30
156
81
3.06
77
Female
1,028
225
265
388
150
40
720
25
36
659
307
0
4
303
27
35
7
116
44
26
30
90
46
Male
Female
648
198
258
148
45
44
623
62
56
505
25
0
0
25
3
61
0
12
26
21
52
56
44
429
89
173
111
56
41
278
11
17
250
151
2
9
140
1
39
0
12
31
26
43
40
32
2.71
49
3.38
40
3.54
31
Employees covered by collective bargaining
agreements
821
511
1226
820
573
414
1) This figure is calculated on the basis of the number of employees holding a degree from a university, university of applied sciences or university of cooperative
education; it also includes employees who have completed comparable studies outside Germany.
95
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Key data on Deutsche Börse Group’s workforce as at 31 December 2018 (part 2)
Deutsche Börse Group
Czech Republic
Ireland
Other locations
Male
Female
Male
Female
Male
Female
Total
(part 1 and 2)
Employees
50 years and older
40−49 years
30−39 years
Under 30 years
Average age
Full-time equivalents
Senior and middle management
Junior management
Staff
Part-time employees
Senior and middle management
Junior management
Staff
Disabled employees
Proportion of graduates (%)1)
Apprentices
Interns and students
Length of service
Under 5 years (%)
5–15 years (%)
Over 15 years (%)
Staff turnover
Joiners
Leavers
563
16
104
339
104
35
561
5
44
512
2
0
0
2
1
62
0
7
62
38
0
110
72
327
9
45
195
78
34
307
1
14
292
20
0
0
20
1
38
0
17
60
40
0
67
45
176
14
47
55
60
35
175
4
15
156
1
0
0
1
0
50
0
0
58
36
6
52
17
228
7
55
123
43
36
210
1
5
204
18
0
0
18
0
50
0
0
33
56
11
36
16
560
104
161
202
93
40
546
34
18
494
14
0
0
14
0
63
0
0
60
32
8
120
95
Training days per staff member
3.19
2.65
3.96
2.81
1.52
Promotions
Employees covered by collective
bargaining agreements
56
0
35
0
15
0
16
0
9
0
344
43
75
157
69
37
316
3
16
297
28
0
0
28
0
37
0
0
57
37
6
70
59
2.12
12
5,964
1,205
1,656
2,241
862
40
5,340
306
335
4,699
624
4
14
606
70
73
15
290
46
30
24
797
507
2.88
340
0
3,033
1) This figure is calculated on the basis of the number of employees holding a degree from a university, university of applied sciences or university of cooperative
education; it also includes employees who have completed comparable studies outside Germany.
96
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Compliance – including combat against corruption and bribery
Responsible entrepreneurial action implies adherence to laws and regulations; it is also based on the
principle of integrity and ethically irreproachable conduct at all times. Deutsche Börse Group has
implemented a compliance management system based on regulatory requirements, with the objectives
of preventing misconduct and avoiding liability and reputational risks for the Group, its legal
representatives, executives and staff. Beyond business-related compliance requirements, the focus is on
strengthening a uniform compliance culture throughout the Group, especially with a view to enhancing
compliance awareness. The compliance management system – under the responsibility of, and
promoted by, the Executive Board of Deutsche Börse AG – therefore constitutes an indispensable
element of good corporate governance (with respect to compliance). Such a system provides the
foundation for sustainable risk transparency; specifically, it facilitates mitigating risks in the areas of
money laundering/terrorism financing, data protection, corruption, as well as market manipulation
and insider trading; it also monitors requirements concerning financial sanctions and embargoes.
The compliance management system applies to Deutsche Börse AG as well as to domestic and
international companies in which Deutsche Börse AG holds a majority interest (whether directly or
indirectly). Thanks to its Group-wide compliance approach, Deutsche Börse Group safeguards the
respective Group entities' adherence with applicable law and regulatory requirements. The compliance
functions and the Chief Compliance Officers of the individual Group entities have a direct reporting
line to the Group Chief Compliance Officer, who in turn reports directly to the Executive Board
of Deutsche Börse AG. Compliance reporting includes all relevant compliance risk areas within the
context of the compliance management system.
Deutsche Börse Group is continually developing its compliance management system in order to deal
with rising complexity and increasing regulatory requirements. Measures have been implemented to
prevent, identify, and sanction any compliance risks – especially with regard to the areas of money
laundering/terrorism financing, financial sanctions and embargoes, as well as market manipulation,
insider trading and data protection.
For this purpose, Deutsche Börse Group has aligned its system with the recommendations of an
internationally recognised standard (ISO 19600 “Compliance Management Systems – Guidelines”). Based
on this standard, the Group’s compliance functions identify fields of action and measures to ensure
compliance management meets the requirements as they continue to change. In 2018, a systematic gap
analysis, which was conducted together with an external party, identified potential in the area of
suitability; also in 2018, the Group started to realise this potential, and it will continue to do so in 2019.
As a member of the UN Global Compact, Deutsche Börse AG has committed to observe the related
principles, notably the principle to work against corruption in all its forms, which includes extortion and
bribery. In line with its code of business conduct, Deutsche Börse Group bans its employees from
involving themselves in corruption, or from taking part in any actions which may lead to the impression
that the Group promises, arranges, provides, receives, or asks for inadmissible benefits. Bribery and any
similar payments are prohibited.
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Further infomation
It is Deutsche Börse Group’s guiding principle that the actions and decisions of all employees are taken
objectively and with integrity. Management plays a particularly important role in this context. Deutsche
Börse Group is fully aware of the so-called “tone from the top” for achieving a high level of attention
for avoiding compliance risks – both within the Group and amongst market participants. In order to
sustainably enshrine this guiding principle, and to prevent Deutsche Börse Group and its staff from legal
sanctions and reputational damage, Compliance has implemented a variety of preventative measures
in a risk-oriented approach.
Compliance organisation
Compliance has overall responsibility for identifying and managing Group-wide compliance risks.
Compliance devises risk-oriented measures in order to contain and manage corresponding risks,
communicating risks, incidents, and the effectiveness of the measures taken; it ensures continuous
improvement of the compliance management system by way of regular adjustments to the relevant
internal guidelines and processes.
Key compliance topics are discussed by Deutsche Börse’s Group Compliance Committee, which
comprises senior management representatives from the business divisions and the relevant Group-wide
control functions.
Code of business conduct
Deutsche Börse Group’s code of business conduct, which is communicated to all members of staff,
summarises the most important aspects with regard to corporate ethics and compliance as well as
appropriate conduct. Moreover, Compliance provides employees with compliance-relevant information
via the corresponding intranet pages, unless specific confidentiality aspects prevent such communi-
cation. For details, see the
governance report”.
section entitled “Combined corporate governance statement and corporate
Compliance rules
Compliance has implemented Group-wide guidelines covering relevant local requirements. These rules
are designed to ensure that the internal stakeholder groups acting on behalf of Deutsche Börse Group
comply with the behavioural rules set out in such guidelines, with the objective of countering breaches
of compliance throughout the Group in a preventive, investigative and sanctioning manner. Group-wide
communications via the intranet are geared towards providing employees (including members of the
Executive Board and Managing Directors) with the necessary guidance in their daily work, and making
sure they commit to such guidance.
In addition, all external staff and service providers must sign a form through which they undertake to
comply with Deutsche Börse Group’s compliance regulations, including rules to combat corruption.
Compliance training
Regular compliance training is essential for a culture of compliance throughout Deutsche Börse Group:
employees worldwide are being trained with respect to relevant compliance issues – covering, in
particular, the areas of money laundering/terrorism financing, data protection, corruption, market
manipulation and insider trading. Managers who are exposed to increased compliance risks on account
of their activities receive additional training in line with their needs. Participation in training measures
covering the compliance topics mentioned above is mandatory for employees, as well as for
management.
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Further infomation
Whistleblowing system
Deutsche Börse Group has established a whistleblowing system, where employees can relay information
about potential or actual breaches of regulatory rules or ethical standards, by phone or e-mail, whereby
the anonymity of whistleblowers is a fundamental guarantee. Through its commitment to compliance
awareness, Deutsche Börse Group cultivates an open approach to dealing with misconduct. For this
reason, reports received are often passed on directly to the responsible line manager, or to Compliance.
During 2018, five reports were submitted via the whistleblowing system, or directly via line managers
or control functions (such as Compliance).
Analysis of compliance risks
In line with regulatory requirements, Deutsche Börse Group carries out risk analyses and/or risk
assessments, at least on an annual basis – specifically, it analyses the risk of being abused for the
purposes of money laundering/financing of terrorism, corruption, market manipulation or insider trading.
Such risk analyses and assessments comprise the Group’s own business activities as well as business
relationships, market participants, products and services. Risk-mitigating measures are derived from the
compliance risks identified.
Due diligence review of clients, market participants, counterparties, and business partners, plus
transaction monitoring
Deutsche Börse Group is constantly improving its processes for the onboarding of new clients and
the review of existing clients (“Know Your Customer” processes). Depending on the assessment of client
risk in each case, client relationships are subject to corresponding diligence duties concerning their
establishment, update, and monitoring. Client relationships are not entered into where the risks involved
are too high. Deutsche Börse Group analyses transaction data in order to identify activity which might
indicate potential money laundering.
Deutsche Börse Group is exposed to the risk of sanctions being imposed upon business partners;
moreover, there is a risk of bribery and corruption. In this connection, the Group examines its business
partners, whereby their details are cross-checked against relevant data sources (such as embargo,
sanctions, PEP, terrorist and other “black lists”). Appropriate measures are taken in the event of any
match against such lists.
Non-financial key performance figures: corruption/data protection
Corruption
Punished cases of corruption
Percentage of business units for which measures have been taken to address corruption risks
%
Number of employees who were trained in ABC measures (anti-bribery/corruption)1)
Data protection
2018
2017
1
100
0
100
1,562
4,487
Number of justified customer complaints relating to data protection
0
0
1) The web-based ABC training is mandatory for employees of Deutsche Börse Group. The number of employees who attended anti-bribery/corruption trainings varies
with respect to the year under review due to the training frequencies that extend over a period of several years.
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Notes
Further infomation
Data protection/protection of personal data
Deutsche Börse Group has exposure to a plethora of data during the course of its business activities. The
Group takes data protection very seriously and has taken measures to ensure compliance with data
protection law, in particular the appropriate and transparent processing of personal data. The Executive
Board has appointed a Data Protection Officer and established a data protection organisation to ensure,
amongst other things, that the data privacy framework and the principles of the EU General Data
Protection Regulation, which came into force in 2018, are adhered to. To this end, the data protection
organisation informs and advises the individual legal entities as regards data protection and data privacy.
It also monitors adherence to legal requirements on data protection on a risk basis, in particular
regarding the question of responsibility. The data protection organisation also serves as a contact for data
protection authorities, and supports the business units in assessing risks related to the issue of data
protection and data privacy. It supports a stronger culture of data protection at Deutsche Börse Group by
raising awareness and providing training on data protection in the context of the Group’s business
activities.
The implementing measures, started in 2017, were continued and concluded in 2018. In 2019, the
data protection organisation will integrate its monitoring framework into the structure of compliance
safeguards and controls, as a second line of defence on data protection. The Data Protection Officer
informs senior management on an annual basis about the measures taken.
Inside information
In its capacity as an issuer of securities, Deutsche Börse Group has access to information which, in
accordance with legal requirements, may be classified as inside information. To raise awareness
amongst the employees affected, further measures were introduced on a Group-wide basis in 2018.
These measures are designed to mitigate the risks of market manipulation and insider trading for
employees’ personal account transactions and are geared towards ensuring that maximum sensitivity
is applied to dealing with such information.
Compliance maintains a Group-wide restricted list of issuers and financial instruments affected by any
particularly sensitive, relevant information. Compliance may impose a general prohibition of trading
for such issuers or financial instruments or may prohibit certain types of transactions. A confidential
watch list is used to summarise compliance-relevant information about other issuers and/or financial
instruments. In particular, Compliance uses these lists to monitor personal transactions of employees
as well as information barriers.
Internal/external audit
At least once a year, Internal Audit checks whether the measures and concepts of the compliance
management system comply with the regulatory requirements, in a risk-based manner. Moreover,
regulated entities are subject to statutory external audits.
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Further infomation
Social matters
As a market infrastructure provider, Deutsche Börse Group considers ensuring transparency on the
capital markets as its direct responsibility. In doing so, it fosters stability in these markets, thereby
promoting their economic success. Positioning itself in this manner, Deutsche Börse Group focuses on
the needs of market participants. The management is involved through its participation on the Group
Sustainability Board, which is also described in detail in the
for a Group-wide commitment to sustainability”.
section entitled “Management approach
Sustainable financial market initiatives
In April 2018, Deutsche Börse Group’s initiative “Accelerating Sustainable Finance” and the Hesse
Ministry of Economics’ “Green Finance Cluster” merged to form the “Green and Sustainable Finance
Cluster Germany e. V.” (GSFCG). The goal of this new Cluster is to enhance the expertise on sustainable
finance in the market, put that expertise to efficient use, and identify (as well as take) specific action to
make national and international financial markets structures fit for the future. The Cluster has defined
four fields of action: sustainable finance – status quo and innovation; data and digitalisation; metrics and
standards; dialogue and knowledge development. It coordinates the activities of the participating
institutions within these fields of action and brings them together with policymakers, regulators, civil
society and academia. At a European level, the Cluster is a member of the technical expert group on
sustainable finance and thus actively involved in the European Commission’s Action Plan on sustainable
finance, whose implementation the Cluster supports.
Stable, transparent and fair markets
Systems availability
Deutsche Börse AG operates its trading systems for the cash and derivatives markets as redundant
server installations, distributed across two geographically separate, secure data centres. Should a trading
system fail, the other data centre would take over operations. Together with clients, Deutsche Börse
successfully simulated this scenario – as well as the impact of local disruptions – within the scope of the
FIA test (the annual disaster recovery exercise conducted by the Futures Industry Association). Other
disruptions, such as workstation malfunctions or personnel absence, were also tested. Thanks to
manifold tests and the verified roll-out of software, as well as the continuous monitoring of the network,
servers and applications, Deutsche Börse Group achieved a 99.912 per cent availability of its cash
market trading system and 99.963 per cent for its derivatives trading system. These levels corresponded
to downtimes of around 178 minutes and 84 minutes, respectively, during the entire year.
Market transparency
Section 42 (1) of the Börsengesetz (BörsG, German Exchange Act) authorises exchanges to impose
additional admission requirements and further notification duties upon equity issuers for parts of the
Regulated Market. The Frankfurter Wertpapierbörse (FWB®, the Frankfurt Stock Exchange) used this
authorisation in its
2003. The Prime Standard segment is characterised, on the one hand, by special post-admission
obligations, which are monitored by the FWB with any breaches sanctioned by the exchange’s Sanctions
Committee; on the other hand, admission to the Prime Standard is a mandatory requirement for
inclusion into one of Deutsche Börse AG’s selection indices.
Exchange Rules (section IV, sub-section 2) to create the “Prime Standard” in
Over and above statutory requirements under the Wertpapierhandelsgesetz (WpHG, German Securities
Trading Act), Prime Standard issuers must submit their financial reports (annual and half-yearly reports),
as well as their quarterly statements for the first and third quarter, to FWB, in German and/or English
and within set deadlines. Moreover, Prime Standard issuers must submit their calendars of material
corporate events to FWB, hold an analysts’ conference at least once a year and publish any inside
information in English as well as German. All submissions to FWB must be carried out via the Exchange
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Further infomation
Reporting System (ERS®). This electronic interface allows for efficient sorting and display of data, so that
any (impending) failure to meet a deadline can easily be spotted. This allows FWB to support issuers
concerning their transparency duties in the best possible manner by sending out e-mail reminders prior
to each deadline. All reports and data submitted to FWB are subsequently available on
www.boerse-
frankfurt.com, the exchange’s website, under the respective issuer’s name. Information is thus accessible
to interested investors in a compact, easy-to-find manner, creating a particular level of market
transparency within the Prime Standard segment. Thanks to the special requirement for submission via
ERS, FWB is also able to monitor fulfilment of transparency requirements – seamlessly and without delay.
In the summer of 2017, the Zweites Finanzmarktnovellierungsgesetz (2nd FiMaNoG, Second German
Financial Markets Amendment Act) was adopted. It provided for an increase in the maximum
administrative fine pursuant to section 22 (2) of the BörsG from €250,000 to €1.0 million. This
increase, implemented and practically applied for the first time in 2018, allows for an even more
effective enforcement of post-admission duties, and FWB’s management board has suggested higher
administrative fines for sanctioning contraventions of post-admission duties in its notices handing
over cases to the Sanctions Committee.
In 2018, six cases were submitted to the FWB Sanctions Committee for the delayed disclosure of
information. Three of these proceedings had been completed with the expiry of the 23 January 2019
deadline. In two of the proceedings, fines were imposed in an amount totalling €46,600, and in one
proceeding the issuer was given a reprimand.
The seamless and timely monitoring of post-admission financial reporting duties combined with even
more effective sanctions for non-compliance with financial reporting duties as introduced in 2018 has
provided even more incentive for Prime Standard issuers to adhere to their transparency obligations.
Deutsche Börse Group launched a new segment for green bonds – bonds issued to raise capital for
projects with climate and environmental benefits – on the Frankfurt Stock Exchange in November 2018.
This “shop window” for green investors included about 150 bonds at its launch. All bonds in this
Green Bond Principles of the International Capital Markets Association,
segment comply with the
which offer guidelines on key components of issuance: use of proceeds, process for project selection,
management of proceeds, as well as reporting. In creating the new segment, Deutsche Börse is
reacting to the demand for sustainable finance, which is rising globally. Investors who care
not only about the economical, but also the ecological return of their investment can find the right
strategy under
Börse’s segment are admitted for trading at various European stock exchanges, including the
Frankfurt Stock Exchange.
www.boerse-frankfurt.de > Bonds > Green Bonds. The bonds included in Deutsche
Stable financial markets
The core economic function of an exchange is to preserve economic prosperity and create the right
framework conditions for growth. As a global market infrastructure provider, Deutsche Börse Group
operates markets that help enterprises of all sizes to raise equity and debt – which in turn enables them
to grow, create and protect jobs and contribute to a higher level of value creation.
As central counterparty (CCP), Clearing AG fulfils its responsibility of promoting sustainable global
economic growth and stable financial markets. As a clearing house, it is an independent risk manager
and ensures that clearing members’ risk positions are neutrally assessed. It also protects members in
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Financial statements
Notes
Further infomation
the event of a market participant defaulting, thus minimising risks and enhancing both the efficiency
of trading and the stability of the financial markets. The bundling of default risk permits high netting
effects, which in turn facilitate sustainable cost savings for the entire market.
The outcome of the UK’s Brexit referendum on 23 June 2016 has caused significant uncertainty for the
entire European financial services sector. A key issue in this context is the clearing of over-the-counter
(OTC) interest rate derivatives. Based on outstanding volumes of some €292 trillion, this is the second
largest market for financial derivatives after currency derivatives [source: BIS, Semiannual OTC
Derivatives Statistics, June 2018; the indication provided by the Bank for International Settlements of
approx. €413 trillion ( www.bis.org > Statistics > Derivatives > OTC derivatives statistics) was
adjusted by eliminating the dual counting of interdealer volumes (source: www.clarusft.com);
USD/EUR exchange rate as at 30 June 2018: 1.1658 (Deutsche Bundesbank)]. The EU and the United
Kingdom are currently negotiating the terms for Britain’s exit from the EUeurex (. The issue of access to
clearing houses outside the 27 remaining EU member states is subject to an ongoing and heated
debate, which in turn has given rise to a feeling of considerable uncertainty among market participants.
Eurex Clearing AG has come up with a solution designed to make the (potentially required) shift of euro
clearing into the EU-27 as straightforward as possible for all market participants: the Eurex Clearing
Partnership Program. Through this initiative, Eurex Clearing AG is not only offering the market an
attractive alternative for clearing interest rate derivatives outside of London and within the EU-27 but
also anticipating potential market turbulence and taking early action to counteract it.
Risk mitigation via netting and collateralisation
€ billion, as at 31 December 2018
7,000
6,848.7
Volume and risk
reduction after
multilateral
(CCP) netting
39.1
48.5
57% securities
43% cash
Notional
amount
outstanding 1)
Margin require-
ment of Eurex
Clearing AG 2)
Collateral effectively posted 3)
by clearing members
50
0
1) Notional amount outstanding
As at 31 December 2018, trans-
actions cleared by Eurex Clearing
amounted to €6,848.7 billion
notional outstanding.
2) Margin requirement
Risks arising out of open positions
are quantified. Eurex Clearing
requires its clearing members to
post collateral (margin) to cover
these risks.
3) Collateral
Clearing members can provide
securities and cash as collateral.
They may post more collateral
than required by Eurex Clearing.
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Notes
Further infomation
Non-financial key indicators: social matters
Transparency
Proportion of companies reporting in accordance with maximum transparency standards1)
Security
Availability of cash market trading system2)
Availability of derivatives market trading system2)
Average monthly cleared volumes across all products3)
2018
2017
91
91
99.912
99.963
23.5
99.968
99.967
20.6
%
%
%
€ trillion
1) Ratio of the market capitalisation of companies listed in the Prime Standard for shares to the market capitalisation of all companies listed on Frankfurter
Wertpapierbörse (FWB®, the Frankfurt Stock Exchange)
2) System availability ranks amongst the most important non-financial performance indicators (as defined in DRS 20 and section 289 (3) in conjunction
with section 289 (1) sentence 3 of the HGB) for which a forecast is made.
3) Average monthly clearing volume, including exchange-traded and OTC derivatives, as well as securities and repo transactions. Clearing volumes are subject
to double counting.
Deutsche Börse Group pays wages, salaries and taxes. Its commercial activity therefore contributes to
private and public income – this contribution is made transparent in the value-added statement. For
details, please refer to the
under review, a regional breakdown of costs cannot be provided for technical reasons. The company
is reviewing the existing procedure for potential improvements.
“Value added: breakdown of corporate performance” section. For the year
Product matters
Customer satisfaction
Deutsche Börse Group is executing a Group-wide growth strategy with which it aims to strengthen its
agility, ambition, effectiveness and clear customer focus. In improving its organisation, the Group aims to
better address changing client needs and gradually tap unutilised potential by means of a Group-wide
approach to marketing, sales, innovation and product development.
In 2018, surveys across the Group were aligned; they include common questions and use a
standardised “Net Promotor Score” methodology. In this context, businesses ask their clients about their
readiness to recommend the service provider.
In the latter half of the reporting year, all of the pertinent product and service areas conducted their
customer satisfaction reviews in parallel with the aim of notifying senior management and staff of the
results shortly after the close of the survey. Each area notifies the senior management and the respective
Board member with the survey results and analysis. Results are also consolidated at the level of Group
Sustainability for inclusion in the annual report. The conclusions of the newly conceived surveys
are intended to be communicated back to clients using the appropriate channels, while the results at a
Group level will also be assessed.
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Notes
Further infomation
One example of Deutsche Börse Group’s customer focus is Clearstream’s annual client services survey.
This survey aims to identify customer needs and prioritise and address enhancement requests to further
improve products and services. The results of this survey are taken up by the Clearstream Client
Committee, which includes senior management, where concrete actions are taken to address customer
needs. The Clearstream senior management is provided with an overview of the items (customers’ needs/
complaints) raised in the survey and information about the actions taken to address these with the
respective product areas. In the course of the year, updates are provided in the different management
forums.
Sustainable index products
STOXX Ltd., a Deutsche Börse Group company, calculates and distributes more than 11,000 indices,
a growing number of which are designed after sustainability aspects. 900 indices are currently reviewed
and may be reintroduced in 2019. STOXX’s offering of sustainability indices is diversified and includes
environmental, social and governance- (ESG), climate change- and carbon emissions-related products.
Indices are built based on internal research and the evaluation of market demand.
For all indices, the ultimate goal is to provide solutions to investors who consider sustainability a key
element of their investment strategy. STOXX® and iSTOXX® indices focus on indicators that can be
assessed quantitatively and are compiled by research providers specialised in the field. Within this
approach, STOXX aims to select companies that are ranked better than their peers according to selected
indicators and tilt the allocation towards those companies.
The latest extension to STOXX suite of ESG-related indices is the launch of the STOXX® Europe 600
ESG-X index in November 2018. This index is based on the STOXX Europe 600 index, one of Europe’s
key benchmarks, with standardised ESG exclusion screens applied. The screens are based on the
responsible policies of leading asset owners and aim to reduce reputational and idiosyncratic risks.
STOXX specifically exclude companies that Sustainalytics considers to be non-compliant with the UN
Global Compact Principles, are involved in controversial weapons, are tobacco producers and that either
derive revenues from thermal coal extraction or exploration or have power generation capacity that
utilises thermal coal. The STOXX Europe 600 ESG-X index is suitable for underlying mandates, passive
funds, ETFs, structured products and listed derivatives with the ambition to increase liquidity and lower
the cost of trading.
STOXX Sustainability indices
The STOXX Sustainability index families provide access to companies that are leaders in terms of ESG
criteria. Indices are available for Europe (STOXX Europe Sustainability) and the eurozone (EURO STOXX
Sustainability). Components are selected from the STOXX Europe 600 indices according to their
respective sustainability rating.
The EURO STOXX Sustainability index offers a consistent, flexible and investable representation of the
sustainability leaders in the eurozone in terms of long-term ESG criteria. With a variable number of
components, the EURO STOXX Sustainability index covers stocks from eleven eurozone countries: Austria,
Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
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Financial statements
Notes
Further infomation
STOXX Global ESG Leaders and ESG Specialized Leaders index family
The STOXX Global ESG Environmental Leaders, STOXX Global ESG Social Leaders and STOXX Global
ESG Governance Leaders indices that together form the STOXX Global ESG Specialized Leaders indices,
all consist of companies that are leading in one of the three sustainability dimensions and range
above average in all other criteria. All components of the specialised indices together make up the STOXX
Global ESG Leaders index. To keep up with the demands of responsible investors, STOXX excludes
companies from the index universe that are involved in controversial weapons or violate one or several of
the Global Compact Principles. The ESG blue-chip indices are derived from the STOXX Global ESG
Leaders index and cover the largest capitalisations regionally. In all above-mentioned ESG indices,
constituents are weighted proportionally to their ESG score – hence, a better score means a higher weight
in the index. ESG data are provided by Sustainalytics.
STOXX Climate index family
The STOXX Global Climate Impact Ex Global Compact and Controversial Weapons and STOXX Global
Climate Impact Ex Global Compact Controversial Weapons & Tobacco indices select those companies
that are seen as leading in terms of climate change. These companies qualify based on particular
actions that mark them as leaders or provide evidence that they understand their climate impact and
take measures to manage it.
The STOXX Climate Awareness Ex Global Compact Controversial Weapons and STOXX Climate
Awareness Ex Global Compact Controversial Weapons & Tobacco indices additionally include companies
that have looked at implications of climate change for and on their business and display a high
contextual knowledge of environmental issues. All emissions-related data are provided by CDP (formerly
known as the “Carbon Disclosure Project”).
The STOXX Global Climate Change Leaders index includes companies that are seen as leading companies
in terms of climate change. These companies qualify based on particular actions that mark them as leaders
and have high scores across all other levels of the CDP Scoring matrix. Scoring requires detailed company-
specific explanations. The components are selected from the CDP A-List.
STOXX Low Carbon index family
The STOXX Low Carbon indices focus on the selection of stocks with low carbon intensity scores using
a weighting scheme that balances between the company’s size and its emissions amount.
ESG Impact index family
A further family of indices, the ESG Impact indices, aims to select companies committed to specific,
significant corporate governance criteria, such as carbon emission reduction targets, percentage of
independent board members, percentage of women in the board, policies against child labour and
limitations of “golden parachute” agreements.
In addition to the above-mentioned STOXX indices, Deutsche Börse’s ÖkoDAX® index focuses on German
companies active in the renewable energy business.
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Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
iSTOXX ESG offering
Under the umbrella of the iSTOXX brand, STOXX also offers a broad range of customised ESG-related
indices that cater to specific client requirements. These indices offer specific strategies within the
broader STOXX universe of responsible investing indices that track companies that are pioneering or
making the most headway in the transition to a low-carbon economy and a fairer and better world from
the perspective of ESG principles. STOXX offers include the iSTOXX North America ESG Select 30,
iSTOXX Global Women Leadership Select 30 and iSTOXX Global Industry Neutral ESG 600 indices.
All data and service providers appointed by STOXX are subject to regular monitoring as required by
the regulations of the International Organization of Securities Commissions (IOSCO) and the European
Securities and Markets Authority (ESMA). STOXX indices are entirely rule-based. Consequently,
there is neither a committee involved nor are customers consulted in the process of reviewing the index
composition.
There is an increasing demand for considering sustainability indicators in the investment process.
Having launched several index families focused on different aspects of sustainability and by continuing
researching applications of sustainable portfolio allocations, STOXX aims to provide their clients with
state-of-the-art solutions in that space. The current index offering ensures that STOXX’s products are
securely established in the market and that STOXX can offer a timely response to the next developments
in sustainability.
STOXX, as an index provider, also has the duty to represent the economic reality of the environment in
which financial actors operate. From this point of view, sustainable investment currently represents only
a minority and is still mostly perceived as an investment add-on, rather than an essential building block.
In order to prepare for and help facilitate a shift in investment culture, STOXX develops and maintains
a broad range of sustainability indices in response to investors’ current as well as anticipated
demand. The broad range of solutions may also aim at mitigating business risk should investors decide
to reallocate more significant parts of their investments to sustainability-oriented solutions, which may
be driven, in part, by investor-specific or external regulations.
Energy and energy-related markets
Deutsche Börse Group holds a majority shareholding in European Energy Exchange AG (EEX), Leipzig,
Germany. The product and service offerings of EEX and its subsidiaries focus on energy and energy-
related markets (e.g. power, gas, emission allowances). By providing liquid, secure and transparent
markets, EEX group plays an important role in improving the efficient functioning of these markets that
are directly linked to questions of climate change. This includes the continuous development of new
products and services, providing market solutions to support the long-term transition of Germany’s and
Europe’s energy system towards a higher share of carbon-free, renewable energy sources.
EEX is constantly developing new support within the framework of the German “Energiewende” and
wider EU climate and energy policy, which includes the long-term 2030 and 2050 climate and energy
policy targets. In addition to power markets, EEX operates a regulated market for emissions allowances.
EEX also hosts the central auction platform for the EU Emissions Trading System, organising regular
auctions on behalf of 27 EU member states, including 25 countries that form an EU-wide auction
platform to be coordinated by the European Commission, Germany and Poland. Furthermore, EEX is
developing new hedging instruments to address the effects of increasing power generation from
renewables.
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Further infomation
In the ongoing transition to an energy system with a higher share of renewables, EEX is taking an active
role by introducing new products to support this process and adapting existing products. One example of
the latter is the introduction of shorter lead times for power trading, thereby supporting the integration
of renewable energy. Through extending its membership base, EEX is actively supporting new players in
the power market, which is a core requirement for an efficient transition of the energy system.
This offering also stretches globally. On 16 November 2018, EEX subsidiary Nodal Exchange and
IncubEx announced the successful launch of their first tranche of North American environmental
contracts. The new contracts are listed on the T7® system and mark the expansion of Nodal Exchange’s
products into the environmental markets sector. The new contracts include futures and options on
California Carbon Allowances, Regional Greenhouse Gas Initiative Allowances (RGGI), New Jersey Solar
Renewable Energy Certificates, PJM Tri-Qualified Renewable Energy Certificates and eleven other
emissions and renewable contracts.
Deutsche Börse Group’s indirect economic impact, and particularly its trading activity and traded
contracts, benchmarked against other exchange operators, can be found in the
position in this combined management report (see
on selected European cash markets” and “Development of contracts traded on selected European
derivatives markets”).
tables entitled “Development of trading activity
report on economic
Non-financial key indicators: sustainable index products
ESG criteria
Assets under management in ETFs based on ESG indices from STOXX1)
Total assets under management in ETFs based on indices from STOXX
€m
€bn
91.9
68.2
55.1
83.4
31 Dec 2018
31 Dec 2017
Transparency
Number of sustainable index concepts
Number of calculated indices
131
117
11,547
12,422
1) Based on the ETFs issued in 2016: FlexShares STOXX® Global ESG Impact index and FlexShares STOXX® US ESG Impact index
Respect for human rights in the supply chain
Being aware of its corporate responsibility, Deutsche Börse Group has committed to adhere to principles
of sustainability. As a public listed company, it strives to lead by example by accepting its corporate
responsibility holistically and disclosing how it does so. For this reason, the
a Group-wide commitment to sustainability includes respect for human rights not only in the supply
chain but also within the company. In addition to the Group’s employees, suppliers and service providers
are also expected to abide by these principles. To this end, Deutsche Börse Group has introduced the
management approach for
code of conduct for suppliers, which comprises ESG criteria.
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Further infomation
The product groups that are material for Deutsche Börse Group’s supply chain are energy, information
and communications technology, IT services and office equipment. The Group also turns to external
suppliers and service providers for marketing services and advertising materials. The Group’s goal is to
implement as reliable a supplier strategy as possible and a stable procurement organisation; it aims
to ensure that all suppliers and manufacturers deliver the price and performance of the products and
services agreed. When choosing suppliers and service providers, the Group focuses on European
vendors and takes care to ensure that their conduct is ethical.
Corporate Purchasing continuously improves the Group’s procurement process according to the
agreements stipulated in the code of conduct for suppliers. It does this by regularly analysing the suppliers
managed by Corporate Purchasing and classifying them using an ABC analysis. This breaks them down
into three categories accounting for 70 per cent, 20 per cent and 10 per cent of expenditure volumes,
respectively. The Group’s objective is to ensure that at least 90 per cent of its global procurement volume
stems from suppliers that fulfil the agreements set forth in the code (i.e. all category A and category B
suppliers must sign such agreements). Major category C suppliers are naturally also requested to sign.
At present, around 98.8 per cent of the procurement volume is covered by agreements defined by
Deutsche Börse Group’s code of conduct for suppliers. As a rule, new suppliers must sign this agree-
ment, which has resulted in a continual, steady rise in the number of suppliers committed to the
code of conduct for suppliers. In exceptional cases, suppliers must, at a minimum, have a voluntary
commitment in place that is equivalent.
The commitment of suppliers and service providers to adhere to the code is only one element in the
Group’s endeavours to select responsible business partners. In a Group-wide evaluation process,
category A suppliers are continuously appraised according to criteria covering, amongst other things,
their economic, environmental, social and ethical sustainability.
Category A and B suppliers are monitored and reviewed according to various risk criteria in cooperation
with an external service provider. This “risk radar” monitors risks along the entire supply chain from
(sub-)suppliers to logistics nodes, right through to the end customer. This process covers all types of
risks: supplier risks (e.g. compliance, financial stability and quality), location risks (e.g. related to
industrial action or natural disasters), country risks (e.g. political risk or sanctions) and risks related to
certain groups of goods (e.g. import restrictions). In the event of any risk materialising, the early warning
system will issue alerts by e-mail (611 in 2018), which will then be evaluated manually. Depending
on the level of impact, the Group will engage in an active dialogue with the contracting parties. More-
over, analyses facilitate the evaluation of latent risk exposures or negative trends (where no damage has
occurred) in order to enact targeted measures designed to prevent such risks.
Moreover, Deutsche Börse Group analyses the extent to which its suppliers have their own guidelines –
such as codes of conduct for employees or suppliers and service providers – or have committed to
recognised social responsibility standards. In 2018, the Group conducted a survey of suppliers managed
by General Purchasing to identify environmental and social risks, especially with regard to human rights,
and to close potential gaps. In addition, it was analysed whether suppliers have operations in countries
with a poor record as regards human rights abuses, or whether they purchase services or goods
from these countries. Those who responded to this survey accounted for 52 per cent of purchasing order
volumes in 2018. These suppliers represent the sample on which the following analysis is based.
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Further infomation
The analysis revealed that 67 per cent of participating suppliers have their own code of conduct for
employees and/or code of conduct for suppliers and service providers, or have committed to at least one
set of social responsibility standards (International Labour Organisation, UK Modern Slavery Act, UN
Global Compact, UN Declaration of Human Rights). For participating category A suppliers, this figure
was 76 per cent, 78 per cent for category B suppliers and 58 per cent for category C suppliers.
Additionally, the supplier survey revealed that 20 per cent of participating suppliers have operations in
countries regarded by the United Nations Environment Programme Finance Initiative as involving human
rights risks. Of these suppliers, 86 per cent have a code of conduct or supplier code of conduct or have
committed to at least one set of the above-mentioned social responsibility standards.
The companies which operate in high-risk countries and/or have suppliers in these countries and have
not yet taken the necessary actions to comply with environmental and social standards, have signed
Deutsche Börse Group’s code of conduct for suppliers.
Non-financial key indicator: respect for human rights
Share of turnover with suppliers or service providers which have signed the code of
conduct, and/or have self-commitments exceeding the standards set by the code
2018
%
2017
%
98.8
98.9
Comparison with the forecast for 2018
With regard to the development expected of its non-financial performance indicators for 2018, the Group
only partially succeeded in maintaining the previous year’s level of systems availability: in the cash
market, trading system availability was at 99.912 per cent (2017: 99.968 per cent). The availability of
the T7 system for the derivatives market was at 99.963 per cent (2017: 99.967 per cent).
In its endeavours to increase the share of women holding executive positions, as early as in 2010, the
Executive Board had adopted a voluntary commitment to increase the share of women holding middle
and upper management positions to 20 per cent by 2020 and women holding lower management
positions to 30 per cent during the same period. The Group maintains this ambition and has extended
the scope of its voluntary commitment over and above the legal requirements. Firstly, the target figures
determined in this context relate to Deutsche Börse Group worldwide. Secondly, the definition of
management levels/positions was extended to also include heads of teams, for example. On a global
level, as at 31 December 2018, Deutsche Börse Group achieved a quota of 14 per cent
for the upper and middle management levels (2017: 14 per cent) and 29 per cent for lower
management positions (2017: 29 per cent). For Germany, the quotas were 14 per cent (2017:
15 per cent) and 26 per cent (2017: 26 per cent), respectively.
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Further infomation
Risk report
Deutsche Börse Group’s core area of expertise includes solutions that enable its customers to efficiently
manage risk and collateral. It is therefore all the more important for the Group to protect itself against
risk. This section of the combined management report shows how the company deals with risks and
threats. Deutsche Börse Group ensures a solid capital base at all times. The proportion of risk to risk-
bearing capacity has slightly declined in the 2018 financial year. Whereas Deutsche Börse Group’s risk
rose by 9 per cent compared to the previous year, the risk-bearing capacity rose by 12 per cent. New
risks arose mainly in the areas of taxes and cyber crime.
The first section of this risk report explains the risk strategy and demonstrates how Deutsche Börse
Group manages its risk. In the second section of this risk report, approaches and methods employed for
monitoring risk will be outlined. In the third section, the various types of risks the Group is exposed to
are described and how the Group manages them. The fourth section provides a summary of the risk
situation, together with an outlook on future developments for Deutsche Börse Group’s risk management.
Supplementing the risk report, senior management sets out what it believes the Group’s future prospects
are in the
report on opportunities.
Deutsche Börse Group includes the following entities which are regulated as credit institutions:
Clearstream Banking S.A. and Clearstream Banking AG (hereinafter referred to as “Clearstream”,
including Clearstream Holding AG), as well as Eurex Clearing AG. Furthermore, Eurex Clearing AG and
European Commodity Clearing AG are authorised as central counterparties (CCPs) and subject to the
requirements of the European Market Infrastructure Regulation (EMIR). In addition, other Group
companies hold different licences to provide regulated activities in the financial services sector. As such,
these entities are subject to comprehensive statutory requirements, inter alia on risk management (for
further information on the regulated entities, please refer to
statements). Over and above the statutory requirements of the EU directives (CRD IV and MiFID II) and
their implementation into national law, other regulations worth mentioning include primarily EU
regulations (CRR and EMIR), the national requirements of the Minimum Requirements for Risk
Management (MaRisk) issued by the Federal Financial Supervisory Authority (Bundesanstalt für Finanz-
dienstleistungsaufsicht, BaFin), and circular 12/552 issued by the Financial Supervisory Authority of
Luxembourg (Commission de Surveillance du Secteur Financier, CSSF). In this context, significant parts
of risk management are defined in the scope of the so-called second pillar of the Basel III regime
for a number of the Group’s companies. Moreover, national regulations implementing the EU Banking
Recovery and Resolution Directive (BRRD) and the establishment of recovery plans apply to Clearstream
and Eurex Clearing AG. Deutsche Börse Group follows international standards (e.g. COSO) in its
risk management and applies these also without or beyond statutory requirements. Hence, the risk
management adheres to high standards on a Group-wide level.
note 15 to the consolidated financial
The highest regulatory standards within the Group are applicable to Eurex Clearing AG and Clearstream
given their regulation as credit institutions. Considering this and their economic importance, this risk
report focuses on these two subsidiaries in particular.
In the course of 2018, Deutsche Börse Group has increased its personnel both in central risk manage-
ment and in the regulated subsidiaries Eurex Clearing AG and Clearstream.
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Further infomation
With its range of risk management services, Deutsche Börse Group strives to make a sustainable
contribution – primarily through its role as an organiser of capital markets, securing market integrity and
security, and also by enhancing market efficiency in distribution, through its price discovery function. On
top of this, Deutsche Börse Group assumes key risk management functions for its clients – for example,
through a central counterparty (Eurex Clearing AG).
Risk strategy and risk management
Deutsche Börse Group’s risk strategy is aligned with its business model and company strategy. The
Group provides the infrastructure for reliable and secure capital markets, assists constructively in their
regulation and plays a leading role in all of the areas in which it does business. Deutsche Börse Group’s
risk strategy is based on three core principles:
1. Risk limitation – protecting the company against liquidation and ensuring its continuing
operation
“Capital exhaustion should not occur more than once in 5,000 years and an operating loss may not be
generated more than once every hundred years.” This means that one goal is to ensure a probability
of 99.98 per cent or more that the total capital will not be lost within the next twelve months. Another
objective is to guarantee for a probability of 99.0 per cent or more that Deutsche Börse will at least
break even, expressed in terms of its EBITDA. In other words, this principle establishes how much risk
the Group must be able to withstand while also determining its risk appetite.
2. Support for growth in the various business segments
“Risk management supports the business areas in expanding their business by working together to
comprehensively identify and communicate risks.” This principle aims to permit the Group to make
informed strategic decisions within the scope of the risk appetite that it has defined.
3. Appropriate risk/return ratio
“The return on equity should exceed the cost of equity.” Deutsche Börse Group has set itself the goal of
ensuring that risk and return should be reasonably balanced, both for specific business areas in general
and for individual regions, products and customers.
“Interlocking business strategy and risk strategy” chart. Deutsche
Internal risk management is based on the Group-wide detection and management of risk, which is
focused on its risk appetite, see the
Börse AG’s Executive Board has the overall responsibility and defines the framework for risk
management throughout the Group. Under these Group-wide risk management requirements, each
business segment and each regulated company is responsible for managing its own risk. This
coordinated process ensures, for example, that the Group’s and its companies’ reaction to the
simultaneous failure of several systems and their reaction to the failure of a single system are equally
quick and effective.
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Notes
Further infomation
Interlocking business strategy and risk strategy
Business strategy
Risk strategy / risk appetite
Risk analysis
Risk scenarios
Root cause
Risk mitigation
Reduces frequency of events
or severity of effect
Implied risks
Risk types
Event
Internal and external losses
Effect
Loss
Risk mitigation
Risk transfer
Risk avoidance
■■ Straight-through processing
■■ Business continuity
■■ Insurance
measures
■■ Internal control system
■■ Other
■■ Other
■■ Changes to business
and / or business strategy
■■ Compliance
■■ Legal
■■ Information security
■■ Physical security
Risk monitoring
Existing risks
Risk acceptance
Emerging risks
Long-term developments
■■ Aggregated risk measurement
■■ Risk map
■■ DB1 Ventures
■■ Stress tests
■■ Risk metrics
■■ Deutsche Börse Venture Network ®
Implementation in the Group’s organisational structure and workflow
The risk strategy applies to the entire Deutsche Börse Group. Risk management functions, processes and
responsibilities are binding for all Group employees and organisational units. To ensure that all employees
are risk-aware, risk management is firmly anchored in the Group’s organisational structure and work-
flows and is flanked by measures such as risk management training. The Executive Board is responsible for
risk management overall, whereas within the individual companies it is the responsibility of the manage-
ment. The boards and committees given below receive comprehensive and timely information on risks.
Deutsche Börse AG’s Supervisory Board evaluates the effectiveness of the risk management system, its
continuing development and oversees the monitoring of risks. The Supervisory Board has delegated the
regular evaluation of the appropriateness and the effectiveness of the risk management system to the Risk
Committee. The Risk Committee reviews the risk management system, its continuing improvement and
oversees the monitoring of risks. In addition, it examines the risk strategy and risk appetite on an annual basis.
Deutsche Börse AG’s Executive Board determines the Group-wide risk strategy and risk appetite and
allocates the latter to the company’s individual business segments and business units, respectively. It
ensures that the Group’s risk appetite is and remains compatible with its short- and long-term strategy,
business and capital planning, risk-bearing capacity and remuneration systems. The Executive Board
of Deutsche Börse AG also determines what parameters are used to assess risks, how risk capital is
allocated and what procedures apply. It ensures that all business units comply with these requirements
for the risk strategy, risk appetite and risk limits.
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Further infomation
The Group Risk Committee (GRC) reviews the risk position of the Group every two months and involves
the Executive Board in all decisive questions. The GRC is an internal Group committee, chaired by the
Chief Financial Officer. In addition, the GRC regularly checks the levels of all parameters for appropri-
ateness and current status and, where necessary, makes recommendations to the Chief Risk Officer
(CRO) or the Executive Board, as to any adjustments that should be made.
Group Risk Management (GRM) is headed by the CRO. This unit prepares the proposals to be adopted
for risk levers, i.e. the Group’s risk strategy, risk appetite, parameters, capital allocation and procedures.
GRM continuously analyses and evaluates risks and produces quantitative and qualitative reports. These
are submitted six times a year to the GRC, once a month to the Executive Board, once a quarter to the
Risk Committee of the Supervisory Board and twice a year to the Supervisory Board. This system means
that the responsible bodies can regularly check whether the defined risk limits are being adhered to
consistently. In addition, GRM recommends risk management measures.
The Group’s regulated subsidiaries act in the same way, always ensuring that they meet the require-
ments of the Group. In particular, they adhere to the risk appetite framework allocated to them by
Deutsche Börse Group. The relevant supervisory boards and their committees are involved in the
process, as are the executive boards and the risk management functions within the various business
areas. Clearstream and Eurex Clearing AG implement customised versions of this risk strategy, using
parameters and reporting formats that are compatible with the overarching Group-wide structure.
In general, the management of the subsidiary bears the responsibility for its risk management and
is controlled by the supervisory board of the institute.
Risk management – organisational structure and reporting lines
Group-wide
Financial institutions
Clearstream and Eurex Clearing AG
Supervisory Board of Deutsche Börse AG
Monitors the effectiveness of the risk management system
Evaluates the risk strategy and risk management system
Audit Committee of the Supervisory Board
Evaluates the effectiveness of the risk management system
Risk Committee of the Supervisory Board
Monitors the risk management system and its continuing
improvement in light of the risk strategy
Executive Board of Deutsche Börse AG
Decides on risk strategy and appetite
Group Risk Committee (the Group’s internal risk committee)
Continuously monitors the overall risk profile
Chief Risk Officer / Group Risk Management
Assess and monitor risks, report to Executive Board and
Supervisory Board
Supervisory boards
Monitor the effectiveness of risk management systems and
evaluate risk strategy
Executive boards
Responsible for the risk management of their institution
Chief Risk Officers / Risk management functions
Manage risks in day-to-day operations and report to their
own committees and the Group
Business segments
Identify, notify and control
Business segments
Identify, notify and control
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Further infomation
Centrally coordinated risk management – a five-stage process
Risk management is implemented in a five-stage process. The objective is to identify all potential losses
in good time, to record them centrally and to evaluate them in quantitative terms as far as possible;
if necessary, management measures must then be recommended and their implementation monitored
(see the “The five-stage risk management system” chart). The first stage identifies the risks and the
possible causes of losses or operational hitches. In the second stage, the business areas regularly – or
immediately, in urgent cases – report to GRM the risks that they have identified and quantified. In the
third stage, GRM assesses the risk exposure, while in the fourth stage, the business areas manage the
risks by avoiding, mitigating or transferring them, or by actively accepting them. The fifth and final stage
involves, for example, monitoring different risk metrics and, where necessary, informing the responsible
Executive Board members and committees of significant risks, their assessment and possible emergency
measures. In addition to its regular monthly and quarterly reports, GRM compiles ad hoc reports for
members of the executive and supervisory boards. The risk management functions at Clearstream and
Eurex Clearing AG submit reports to the respective executive boards and supervisory boards. Internal
Audit is responsible for monitoring compliance with the risk management system.
The five-stage risk management system
Responsibility
Executive Board
Risk management strategy and appetite
Group Risk Committee
Risk profile monitoring and management
Group Risk Management
Risk management process
Business areas
1. Identify
2. Notify
4. Control
3. Assess
5. Monitor and report
Approaches and methods for risk monitoring
Deutsche Börse Group uses quantitative and qualitative approaches and methods for risk monitoring,
with the objective of providing as complete a picture as possible of its risk situation at all times. To this
end, the Group continuously reviews internal events with regard to their risk properties, while also
considering regional as well as global developments. The Group is thus able to recognise and analyse
existing risks; at the same time, it is able to swiftly and adequately respond to emerging risks, as well
as to changes in the market and the business environment.
Existing risks
Deutsche Börse Group employs a range of tools to monitor and evaluate its operational, financial and
business risk on a continuous basis. The risks are quantified on different confidence levels using the
concept of value at risk (VaR). This quantification takes into account the liquidation principle and the
going-concern principle. Furthermore, the regulatory capital requirements for Eurex Clearing AG and
Clearstream are calculated with regard to the above-mentioned risks. Moreover, so-called stress tests
are carried out in order to simulate extreme, yet plausible, events and their impact upon the Group’s
risk-bearing capacity. Another approach to risk monitoring, which serves as an early warning system for
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Notes
Further infomation
quantified and non-quantified in-house risks, is complementary risk metrics. These risk metrics are
based on IT and security risks, potential losses, credit, liquidity and business risks.
Risk measurement
The required economic capital (REC) in accordance with the liquidation principle and the regulatory
capital (RC) for credit institutions within Deutsche Börse Group are calculated. Earnings at risk (EaR) are
also calculated to monitor adherence to the going concern principle.
1. Liquidation principle: what risk can the capital cover?
The first part of Principle 1 of its risk strategy specifies that Deutsche Börse Group should not exhaust its
risk-bearing capacity in more than 0.02 per cent of all years. For Clearstream and Eurex Clearing AG,
REC calculated in this manner also complies with the requirements of the second pillar of Basel III.
Deutsche Börse Group determines its risk-bearing capacity on the basis of its reported equity in accord-
ance with International Financial Reporting Standards (IFRSs). It adjusts this figure for precautionary
reasons, for example, to take into account the fact that it may not be possible to dispose of intangible
assets at their carrying amounts in cases of extreme stress. Clearstream and Eurex Clearing AG deter-
mine their risk-bearing capacity on the basis of their regulatory capital (for details, see
consolidated financial statements).
note 15 to the
For management purposes, GRM regularly determines the ratio of the REC to the risk-bearing capacity.
This indicator is known as the utilisation of risk-bearing capacity and it answers a key risk management
question: how much risk can the Group afford and what risk is it currently exposed to? The ratio of REC
to risk-bearing capacity remained within the stipulated maximum risk throughout the reporting period. If
this were not the case, the Group would in a worst-case scenario exhaust its entire risk-bearing capacity
and would have to be liquidated (“gone concern”).
2. Going-concern principle: what risks can be absorbed by earnings?
Deutsche Börse Group employs the going-concern principle, which assumes an orderly continuation
of the Group and uses EaR as an indicator. This indicator corresponds to the second part of Principle 1
of the Group’s risk strategy, i.e. that an operating loss equal to the earnings before interest, tax,
depreciation and amortisation (EBITDA) may occur no more than once in a hundred years. In other
words, there should be a probability of 99.0 per cent or more that Deutsche Börse should at least break
even (net profit/loss expressed in terms of EBITDA). Under the going-concern principle, EaR determined
in this way is compared with the Group’s risk appetite – which is, in turn, measured in terms of
projected EBITDA. EaR are calculated and monitored for Eurex Clearing AG and Clearstream Holding AG
with the same objective.
3. Regulatory capital requirements
Clearstream and Eurex Clearing AG must calculate their capital requirements for various risk types (see
the
“Deutsche Börse Group’s risk profile” chart) in line with the Pillar I requirements under Basel
III. In addition, Eurex Clearing AG must fulfil EMIR requirements. A standardised approach is used for
analysing and evaluating credit and market risk; risk weightings for counterparty credit risk are applied
on the basis of the relevant counterparty ratings.
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Further infomation
Deutsche Börse Group’s risk profile
Risk profile of Deutsche Börse Group
Operational risks
■■ Unavailability of systems
■■ Service deficiency
■■ Damage to physical assets
■■ Legal disputes and business practice
Financial risks
■■ Credit risk
■■ Market risk
■■ Liquidity risk
Project risks
Business risks
The approach taken for operational risk is different for Eurex Clearing AG and Clearstream: Clearstream
has used the advanced measurement approach (AMA) for this in all business units since 2008. This
means that it meets the regulatory capital requirements for operational risk set out in the EU’s Capital
Requirements Regulation (CRR). Similar to REC calculations, the model employed was fundamentally
revised and improved in 2016. According to the method – which has been approved and is regularly
tested by BaFin – the regulated units calculate the required capital. In contrast, Eurex Clearing AG
employs the basic indicator approach in order to calculate regulatory capital requirements (for details,
see
note 15 to the consolidated financial statements).
Stress tests
Stress tests are being carried out in order to simulate extreme, yet plausible, events for all material types
of risk. Using both hypothetical as well as historical scenarios, stress tests simulate the occurrence
of extreme losses, or an accumulation of large losses, within a single year. In addition, liquidity risk is
evaluated by way of liquidity stress tests as well as so-called inverse stress tests; the latter analyses
which loss scenarios would exceed the risk-bearing capacity.
Risk metrics
Risk metrics are used to quantify the exposure to the most important internal operational risks against
set limits. They are complementary to the VaR approach and serve to monitor other factors as well as
non-quantifiable risks. Any breach of these limits serves as an early warning signal, which is reported
to the Executive Board and other boards and committees on a monthly basis. Furthermore, any such
breach immediately triggers the requisite risk mitigation processes.
Emerging risks
With regard to risk management, Deutsche Börse Group pursues a sustainable, long-term strategy by
also evaluating risks beyond a twelve-month horizon. For this purpose, the Group has developed so-called
risk maps tailored specifically for expected or upcoming regulatory requirements and IT and information
security risks. In addition, other operational and financial risks are also assessed beyond a twelve-month
period. The risk maps categorise the risks according to their likelihood of occurrence as well as by their
potential financial loss. The probability of occurrence is broken down into four categories: unlikely (less
than 1 per cent), possible (between 1 and 10 per cent), probable (from 10 to 50 per cent) and almost
certain (between 50 and 100 per cent). The estimated financial impact is also divided into categories:
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Further infomation
low (up to €20 million), substantial (between €20 million and €100 million) and critical (over €100
million). The observation period is five years and is based on the development period of the operational
risks relevant to Deutsche Börse Group, namely, regulation and IT. Typically, regulatory requirements
evolve over a period of up to five years, from the first draft to implementation. This horizon is
also appropriate for the evaluation of IT risks, given that technology is subject to ongoing change.
Long-term developments
For Deutsche Börse Group, risks that prevail throughout longer consideration periods mainly comprise
the failure to respond to global changes in, or mega-trends on, the financial markets and the business
environment, or a late response to such developments. In order to compensate for such risks, Deutsche
Börse Group aspires to think ahead and to set standards applicable throughout the industry. The Group
pursues its targets by promoting mutual exchange with regulators and market participants (e.g. white
papers). A further trend worth noting is the potential of start-up companies to come up with innovations
that may have a disruptive effect upon markets. Deutsche Börse Group not only actively invests in such
enterprises, through its DB1 Ventures subsidiary, it also offers them a platform. Deutsche Börse Venture
Network® provides an opportunity to exchange ideas and experience, and also to find investors.
Risk description
The following section describes the types of risk that Deutsche Börse Group generally has to manage and
presents the risks it actually faces. It also explains the measures that Deutsche Börse Group uses to
reduce the loss event and to minimise their financial effects. Firstly, however, what follows is a brief
explanation of the risk profile, which differs from most other financial services providers, since financial
risk plays a comparatively lesser role for Deutsche Börse Group.
Risk profile
The risk profiles of Deutsche Börse Group differ fundamentally from those of other financial services
providers. Unlike banks, Deutsche Börse Group has a low risk profile due to its low level of financial
“Risk
risk. Economic capital and balance sheet equity are also lower than that of banks (see the
profile of Deutsche Börse Group in comparison to German universal banks” chart). Deutsche Börse
Group differentiates between the three standard types of risk: operational risk, financial risk and
business risk. Project risk also exists but the Group does not specifically quantify these as their impact
is already reflected in the three traditional risk types. The majority of risks are operational risks (see the
“Required economic capital for German universal banks by risk type” and “Required economic capital
for Deutsche Börse Group by risk type” charts).
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Further infomation
Risk profile of Deutsche Börse Group in comparison to German universal banks
€ billion
~ 50
~ 20
~ 5
~ 3
Universal banks
Deutsche Börse AG
Equity
Economic capital
Required economic capital for
German universal banks by risk type
Required economic capital for
Deutsche Börse Group by risk type
20 %
Operational risks
10 %
Businesss risks
23 %
Financial risks
20 %
Businesss risks
60 %
Financial risks
67 %
Operational risks
Operational risk greater than financial and business risk
Risk-bearing capacity in terms of the liquidation principle and risk appetite under the going-concern
principle are used as internal management indicators throughout Deutsche Börse Group (see the
“Approaches and methods for risk monitoring” section for an explanation of these terms). In addition
to the financial and operational risk already mentioned, business risk is also identified and assessed.
This relates in particular to potential threats to revenue such as price pressure or loss in market share,
as well as cost risks. Under the liquidation principle, financial risk amounts to approximately 23 per cent
of Deutsche Börse Group’s total risk, while business risk represents 10 per cent of the total. This makes
the third typical risk type all the more important for Deutsche Börse Group: at 67 per cent, operational
risk accounts for two-thirds of the total risk following the liquidation principle. The overwhelming majority
of Deutsche Börse Group’s regulatory capital requirements arise from operational risks. The capital
requirements of other subsidiaries are also described in note 15 to the consolidated financial state-
ments.
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A larger part of the risk is associated with the Clearstream (post-trading) and Eurex (financial derivatives)
segments (see the table “Required economic capital by segment as at 31 December 2018”), in keeping
with the proportion of sales revenue and earnings accounted for by their business.
Required economic capital by segment as at 31 December 2018
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data (data business)
Total
Required economic
capital
€m
Risk cover amount
€m
Utilisation
%
917.0
158.0
33.0
233.0
806.0
74.0
83.0
114.0
155.0
1,640.0
311.0
72.0
300.0
1,257.0
115.0
135.0
141.0
198.0
2,573.0
4,619.0
56
51
46
78
64
64
61
81
78
56
The required economic capital includes the following risk types, which are illustrated with specific
examples and then explained in detail:
1. Operational risk
Failure of a trading system
Cyber attacks
Incorrect processing of client instructions (e.g. corporate actions)
Incorrect handling of the default of a large customer
Losses from ongoing legal disputes
Conflicting laws of different jurisdictions
Threat of tax back-payments
2. Financial risk
Default of a credit counterparty
Losses of on-balance sheet and off-balance sheet assets and liabilities, due to market price fluctuations
Default by a customer and an associated liquidity squeeze
3. Business risk
Market share loss in European trading markets
The return of the European government debt crisis
Implementation of a financial transaction tax
Risks which could jeopardise the Group’s continued existence could arise only from a combination
of extreme events that have a very low probability:
Failure of a trading system over several days in a highly volatile market environment
Simultaneous default of multiple large banks with systemic relevance
Successful serious abuse of banking applications through a coordinated cyber attack
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Failure of key infrastructure providers in extreme market conditions associated with failure of lines
of defence
These extreme events that could lead to a loss corresponding to more than 100 per cent of annual
EBITDA are rated as having a probability of far less than 0.1 per cent. Such extreme events, also
known as “tail risks”, have not occurred to date. Tail risks can turn into existential threats for certain
subsidiaries, for example, when sanctions are intentionally violated. GRM assesses these risks
continuously and reports the results regularly to the Executive Board of Deutsche Börse Group.
Operational risk
For Deutsche Börse Group, operational risk comprises, in particular, the unavailability of systems,
service deficiency, damage to physical assets as well as legal disputes and business practice (see the
“Operational risk at Deutsche Börse Group” chart). Human resources risks are quantified just like
other operational risks. Operational risk accounts for 67 per cent of the total Group risk.
Operational risk at Deutsche Börse Group
Operational risk
Events
Unavailability of systems
Service deficiency
Damage to physical assets
Legal disputes and business
practice
■■ Trading
■■ Clearing
■■ Settlement
■■ Deficiency of trading-
■■ Damages to or destruction
■■ Losses from ongoing legal
related services
of buildings
conflicts
■■ Loss of customer cash
■■ Damages to or destruction
■■ Theft of customer cash
of data centres
■■ Employment practice
■■ Contract risks
■■ Breach of sanctions
provisions
Possible root causes
■■ Software flaws
■■ Human errors
■■ Force majeure
■■ Legal violations
■■ IT hardware flaws
■■ Flawed internal processes
■■ Weather catastrophes
■■ Internal fraud
■■ Inadequate information
■■ Flawed data supply
■■ Terror
■■ External fraud
security
■■ Cyber crime
Unavailability of systems
Operational resources such as the Xetra® and T7® trading systems are essential for the services offered
by Deutsche Börse Group. They should never fail in order to ensure that market participants can trade
securities or derivatives at any time and without delay. The Group therefore calculates the availability of
these systems as an important risk indicator. In line with the Group’s risk strategy, the business areas
are responsible for monitoring the indicators.
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The longer the downtime for one of these systems, the larger the potential loss. An outage could be
caused by software or hardware issues, or in unlikely cases, the availability of the systems could be
affected by acts of cyber crime or a terrorist attack. In the past, only limited failures have occurred with
Xetra and T7 and its predecessor system. In practice, there has never been a system failure lasting
longer than one day. Deutsche Börse Group has taken a number of measures to further minimise the risk
of failure lasting an entire day or longer. This supports the view that the probability of such a system
failure lasting a week in an extremely volatile market is very low. However, the potential financial effect
of such an event could be significant if claims are justified and asserted.
In general, availability risk represents the largest operational risk for Deutsche Börse Group. The Group
therefore subjects its systems to regular tests that simulate not only what happens when its own systems
fail but also when suppliers fail to deliver.
Service deficiency
Risks can also arise if a service provided to a customer is inadequate and this leads to complaints or
legal disputes. One example would be errors in the settlement of securities transactions due to defective
products and processes or mistakes in manual entries. Collateral liquidation errors in the event of the
default of a large clearing customer are another example. Such errors have not occurred to date in
the rare case of a failure. Related processes are tested at least annually, which is why the probability is
considered to be very low. The potential financial loss is put at medium.
Other sources of error may be attributable to suppliers or to product defects or mistakes that may lead
to the loss of client assets or mistakes in accounting processes. The Group registers all complaints and
formal objections as a key indicator of deficient processing risk.
Damage to physical assets
Natural disasters, accidents, terrorism or sabotage are other operational risks that could, for example,
cause the destruction of, or severe damage to, a data centre or office building. Business continuity
management (BCM) aims at averting significant financial damage (see the
“Business continuity
management” chart).
Legal disputes and business practice
Losses can also result from ongoing legal proceedings. Deutsche Börse judges the probability that this
operational risk will occur to be medium, although the losses involved could be substantial. As a result,
GRM continually monitors ongoing legal proceedings. These can be brought if Deutsche Börse Group
breaches laws or other requirements, enters into inadequate contractual agreements or fails to monitor
and observe case law to a sufficient degree. Legal risk also includes losses due to fraud and labour law
issues. This could entail, for example, losses resulting from insufficient anti-money laundering controls,
breaches of competition law or banking secrecy. Such operational risks can also arise if government
sanctions are not observed, e.g. in case of conflicting laws of different jurisdictions or in the event of
breaches of other governmental or overarching regulations.
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In its
2012 corporate report, Deutsche Börse Group provided information about Peterson vs
Clearstream Banking S.A., the first Peterson proceeding. This class action lawsuit was initiated by
various plaintiffs seeking to have certain customer positions held in Clearstream Banking S.A.’s
securities omnibus account with its US depository bank, Citibank NA, turned over and asserting direct
claims against Clearstream Banking S.A. for damages of US$250 million. The matter was settled
between Clearstream Banking S.A., and the plaintiffs and the direct claims against Clearstream Banking
S.A. were abandoned.
In July 2013, the US court ordered the turnover of the customer positions to the plaintiffs, ruling that
these were owned by Bank Markazi, the Iranian central bank. Bank Markazi appealed, and the decision
was affirmed on 9 July 2014 by the Second Circuit Court of Appeals and later by the US Supreme Court
on 20 April 2016. Once distribution of the funds to the plaintiffs is complete, a related case, Heiser vs
Clearstream Banking S.A., also seeking turnover of the same assets, should also be completed.
On 30 December 2013, a number of US plaintiffs from the first Peterson case, as well as other
plaintiffs, filed a complaint targeting restitution of certain assets that Clearstream Banking S.A. holds as
a custodian in Luxembourg. In 2014, the defendants in this action, including Clearstream Banking S.A.,
moved to dismiss the case. On 19 February 2015, the US court issued a decision granting the defend-
ants’ motions and dismissing the lawsuit. The plaintiffs lodged an appeal against this ruling at the
competent appeals court (Second Circuit Court of Appeals), which on 21 November 2017 confirmed
large portions of the decision of the trial court. Regarding another aspect, the appellate court referred
the case back to the court of first instance, which shall assess whether the assets held in Luxembourg
are subject to execution in the U.S. In opposition to this point, Clearstream Banking S.A. filed a petition
to the US Supreme Court on 8 May 2018.
On 14 October 2016, a number of US plaintiffs filed a complaint naming Clearstream Banking S.A.
and other entities as defendants. The complaint in this proceeding, Havlish vs Clearstream Banking S.A.,
is based on similar assets and allegations as in the Peterson proceedings. The complaint seeks turnover
of certain assets that Clearstream Banking S.A. holds as a custodian in Luxembourg. The complaint
also asserts direct claims against Clearstream Banking S.A. and other defendants and purports to seek
damages of up to approximately US$6.6 billion plus punitive damages and interest. The proceedings have
been suspended due to the pending complaint to the US Supreme Court in the second Peterson case.
On 2 April 2014, Clearstream Banking S.A. was informed that the United States Attorney for the
Southern District of New York had opened a grand jury investigation against Clearstream Banking S.A.
due to Clearstream Banking S.A.’s conduct with respect to Iran and other countries subject to US
sanction laws. Clearstream Banking S.A. is cooperating with the US attorney.
In the context of the ongoing disputes regarding assets of Bank Markazi, Clearstream Banking S.A. was
served with a complaint from Bank Markazi on 17 January 2018 naming Banca UBAE S.P.A. and
Clearstream Banking S.A. as defendants. The complaint filed before the Luxembourg courts primarily
seeks the restitution of assets of Bank Markazi, which the complaint alleges are held on accounts
of Banca UBAE S.P.A. and Bank Markazi with Clearstream Banking S.A. totalling approximately
US$ 4.9 billion plus interest. Alternatively, Bank Markazi seeks damages to the same amount. The assets
sought include assets to the amount of approximately US$1.9 billion that were turned over to US
plaintiffs pursuant to a 2013 binding and enforceable US court order in a proceeding to which Bank
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Markazi was a party. The claim also addresses customer assets of approximately US$2 billion, which
include assets that are held at Clearstream Banking S.A. and currently subject to US and Luxembourg
litigation brought by US plaintiffs, addressing assets that were previously transferred out of Clearstream
Banking S.A. to Banca UBAE S.P.A.
On 15 June 2018, Banca UBAE S.p.A. filed a complaint against Clearstream Banking S.A. in front of
the Luxembourg courts. The complaint is a recourse action linked to the complaint that Bank Markazi
filed against Clearstream Banking S.A. and Banca UBAE S.p.A. on 17 January 2018 and asks that
Banca UBAE S.p.A. be indemnified and held harmless by Clearstream Banking S.A. in case it were to
lose in the Bank Markazi complaint and ordered by the court to pay damages to Bank Markazi.
On 26 December 2018, two US plaintiffs filed a complaint naming Clearstream Banking S.A. and
other entities as defendants. The plaintiffs hold claims against Iran and Iranian authorities and persons
amounting to approximately US$28.8 million. The complaint in this case (Levin vs Clearstream Banking
S.A.) is based on similar assets and allegations as in the second Peterson case and the Havlish case.
The complaint seeks turnover of certain assets that Clearstream Banking S.A. holds as a custodian in
Luxembourg. The complaint also asserts direct claims against Clearstream Banking S.A. and other
defendants and purports to seek damages of up to approximately US$28.8 million plus punitive
damages and interest.
Beginning on 16 July 2010, the liquidators of two investment funds domiciled in the British Virgin
Islands and named Fairfield Sentry Ltd. and Fairfield Sigma Ltd. filed complaints in the US Bankruptcy
Court for the Southern District New York, asserting claims against more than 300 financial institutions
for restitution of redemption payments made to investors of the funds for the redemption of shares
in such funds prior to December 2008. On 14 January 2011, the liquidators of such funds asserted
claims for restitution against Clearstream Banking S.A. in an amount of USD 13.5 million for redemption
payments made by the funds to investors using the settlement system of Clearstream Banking S.A.
The proceedings, which were suspended for multiple years, are continuing.
Legal disputes have arisen regarding a bond issued by MBB Clean Energy AG (MBB), which is held in
custody by Clearstream Banking AG. MBB issued a first tranche of the bond in April 2013 and a second
tranche of the bond in December 2013. The global certificates for the two tranches of the bond were
delivered to Clearstream Banking AG by the paying agent of the issuer. The legal disputes relate to the
non-payment of the bond and the purported lack of validity of the bond. As a national central securities
depository, Clearstream Banking AG’s role in the context of the purported lack of validity of the MBB
bond is primarily to safekeep the global certificate. Insolvency proceedings have meanwhile been opened
in respect of the issuer, MBB.
In September 2017, Clearstream Banking AG and Clearstream Banking S.A. were made aware that the
Public Prosecutor’s Office in Cologne had initiated proceedings for tax evasion against an employee of
Clearstream Banking AG for his alleged involvement in the settlement of transactions of market
participants over the dividend date (cum/ex transactions). On 22 January 2018, the Public Prosecutor’s
Office in Cologne addressed to Clearstream Banking AG a notification of hearing with Clearstream
Banking AG and Clearstream Banking S.A. as potential secondary participants (Nebenbeteiligte). Due
to the early stage of the investigations, it is not possible to predict the timing, scope or consequences
of a potential decision. The companies are cooperating with the competent authorities.
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In November 2018, a customer of a trading participant of the Frankfurt Stock Exchange filed a lawsuit at
the District Court (Landgericht) of Frankfurt/Main against Deutsche Börse AG. The plaintiff is claiming
damages of approximately €2.6 million from Deutsche Börse AG. The alleged damages are said to have
arisen (i) on 7 July 2016, from Deutsche Börse AG’s publication of an inaccurate ex-dividend date
relating to a financial instrument via the Xetra system and (ii) due to the fact that a client of the plaintiff
relied on this inaccurate information to conclude transactions.
On 19 December 2018, the German Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht, BaFin) sent Deutsche Börse AG a formal hearing notification in a penalty
proceeding, which refers to the allegation of a supposed lack of self-liberation or, alternatively, an
allegedly omitted ad hoc announcement. Specifically, in the search for a successor for Carsten Kengeter,
Deutsche Börse AG had omitted to qualify as a price-relevant intermediate step the fact that a few days
before the appointment of Theodor Weimer in November 2017, two suitable and interested CEO
candidates had been identified and a decision about the appointment was planned. Even after consulting
with external experts, Deutsche Börse AG believes this allegation is unfounded.
On 21 December 2018, Deutsche Börse AG informed the public that the District Court of Frankfurt/Main
had on the same day issued a fine order against Deutsche Börse AG as an ancillary party after the
termination of the preliminary investigation against its former CEO, Carsten Kengeter. The decision
provides for fines of €5 million and €5.5 million against Deutsche Börse AG for an alleged breach of the
insider trading ban in December 2015 and for an alleged omission of an ad hoc announcement in
January 2016. Following this decision of the District Court of Frankfurt am Main, the proceedings were
concluded.
The Executive Board of Deutsche Börse AG had previously decided, after detailed consultation with the
Supervisory Board, not to take action against a corresponding fine decision by the District Court. The
company remains firmly convinced that the allegations were unfounded. This is supported by the results
of extensive audits by several independent external experts. However, after a detailed examination and
weighing all relevant aspects, Deutsche Börse AG concluded that a termination of the proceedings on
this basis was in the best interest of the company.
Despite the ongoing proceedings described above, the Executive Board is not aware of any material
changes to the Group’s risk situation.
Measures to mitigate operational risk
Deutsche Börse Group takes specific measures to reduce its operational risk. Among them are emer-
gency and contingency plans, insurance policies, measures concerning information security and the
physical safety of employees and buildings as well as precautions to ensure that the applicable rules
are observed (compliance).
Emergency and contingency plans
It is essential for Deutsche Börse Group to provide its products and services as reliably as possible. The
Group has to maintain its business operations and safeguard against emergencies and disasters. If its
core processes and resources are not available, this represents not only a substantial risk for the entire
Group but also even a potential systemic risk for the financial markets in general. As a result, Deutsche
Börse Group has set up a system of emergency and disaster plans covering the entire Group (business
continuity management, BCM). This covers all processes designed to ensure continuity of operations in
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the event of a crisis and significantly reduces availability risk. Measures include precautions relating to
all important resources (systems, workstations, employees, suppliers), including the redundant design
of essential IT systems and the technical infrastructure, as well as emergency measures designed to
mitigate the unavailability of employees or workspaces in core functions at all important locations.
Examples of such precautions are listed in the “Business continuity management” chart.
Business continuity management
Emergency and crisis management process
Systems
Workstations
Employees
Suppliers
■■ Trading, clearing and
settlement systems designed
to be available at all times
■■ Duplication of all data
centres to contain failure
of an entire location
■■ Emergency arrangements
for all essential functions
■■ Fully equipped emergency
workspaces, ready for use
at all times
■■ Remote access to systems
for numerous employees
■■ Option to move essential
operational processes to
other sites if staff at one site
are not able to work
■■ Contracts and agreed plans
of action for suppliers and
service providers to specify
emergency procedures
■■ Additional precautions to
ensure that operations
remain active in the event
of a pandemic
■■ Careful and continuous
check of suppliers’
emergency preparations
■■ Utilisation of multiple
suppliers
Preparations for emergencies and crises
The Group has introduced and tested a management process for emergencies and crises that enables it
to respond quickly and in a coordinated manner. This is intended to minimise the effects on business
processes and on the market and to enable a quick return to regular operations. All business segments
have appointed emergency managers to act as central contacts and take responsibility during emergen-
cies and crises. The emergency managers inform the Executive Board or raise the alarm with them in
the case of severe incidents. In the event of a crisis, the Executive Board member responsible for the
affected business acts as the crisis manager. The emergency and contingency plans are tested
regularly by realistically simulating critical situations. Such tests are generally carried out unannounced.
The test results are evaluated based on the following criteria:
Functionally effective: the measures must be technically successful.
Executable: the employees must be familiar with the emergency procedure and be able to execute it.
Timely: emergency measures must ensure that operations restart within the intended time period.
Information security
Attacks on information technology systems and their data – especially due to cyber crime – represent
operational risks for Deutsche Börse Group, which is continuously confronted with rising threats in this
respect, as are other financial services providers and the entire sector. Unauthorised access, change
and loss of information, as well as non-availability of information and services, may all arise as a result
of these attacks (such as phishing, distributed-denial-of-service/DDoS and ransomware attacks). Please
note that there was no successful attack on Deutsche Börse Group’s core systems in 2018.
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In order to maintain the Group’s integrity as a transaction services provider and mitigate and control the
risks, Deutsche Börse is continuously implementing measures to increase information security. The aim
is to proactively boost the robustness of procedures, applications and technologies against cyber crime in
such a way that they are adjusted to the threatening situation and regulatory requirements at an early
stage. The foundation for this is formed by an Information Security Management System (ISMS),
together with specific control measures based on the established international information security
standards ISO/IEC 27000.
The Information Security function checks that the information security and risk management
requirements are adhered to; it also monitors the systemic integration of (and adherence to) security
standards within the scope of product and application development.
The Group operates a situation centre (Computer Emergency Response Team, CERT), which detects and
assesses threats from cyber crime at an early stage in cooperation with national and international
financial intelligence units and coordinates risk mitigation measures in cooperation with the business units.
Information Security operates an extensive Group-wide programme designed to raise staff awareness for
the responsible handling of information and to improve staff conduct in this aspect. All in all, Deutsche
Börse Group’s security approach includes overall measures in accordance with ISO 27000 covering both
the development phase and the operational phase.
Furthermore, Deutsche Börse Group has been a full member of national associations (Cyber Security
Sharing and Analytics, CSSA), trade associations (World Federation of Exchanges) and international
networks (Financial Services Information Sharing and Analysis Center, FS-ISAC), which contribute
significantly towards a forward-looking stance vis-à-vis cyber threats and the development of strategies
to fend off such threats.
Physical security
Deutsche Börse Group places great importance on physical security issues due to the constant change in
global security risks and threats. Corporate Security has developed an integral security concept to protect
the company, its employees and values from internal and external attacks and threats – in a proactive as
well as reactive manner. Highly qualified analysts are continuously assessing the security situation at
Deutsche Börse Group’s locations and are in close contact with authorities (Federal Criminal Police
Office – BKA, Federal Office for the Protection of the Constitution – BVf, etc.), security services providers,
and security departments of other companies. Multi-level security processes and controls ensure physical
safety at the Group’s locations. Physical access to buildings and values is monitored permanently based
on the access principle of “least privilege” (need-to-have). Penetration tests, inter alia, are carried out on a
regular basis to verify the efficiency and effectiveness (as well as the quality) of the security processes at
the locations.
In an increasingly competitive global market environment, access to know-how and confidential
company information could turn into a potential major financial advantage to outsiders or competitors.
Deutsche Börse applies state-of-the-art technology to prevent its knowledge from being obtained illegally,
e.g. through wiretapping.
Furthermore, Corporate Security is tasked with providing support to employees while they are travelling
or on foreign assignment, i.e. protecting them from risks in the areas of crime, civil unrest, terrorism and
natural disasters. In this context, a worldwide travel security programme was established which
guarantees a risk assessment before, during and after travelling, supported by a travel-tracking system
and a central 24/7 emergency telephone number.
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Insurance policies
Operational risks that Deutsche Börse Group cannot or does not wish to bear itself are transferred
to insurance companies if this is possible at a reasonable price. The insurance policies are checked
individually and approved by Deutsche Börse AG’s Chief Financial Office.
Compliance
Compliance at Deutsche Börse Group is responsible for supporting the individual legal entities in ensur-
ing that regulatory requirements are observed and generally protecting the Group against financial
and non-financial risks, such as reputational damage in the markets it serves, in cooperation with super-
visory authorities and the general public. Although Group Compliance operates independently of the
business units, it still fulfils the task of enabling business areas to establish business relationships, while
focusing on the clients and markets the Group wants to serve. Compliance has to take the steps
necessary to systematically and pre-emptively mitigate compliance risks, which requires both the
identification of compliance risks and a risk-based assessment of the appropriate measures.
Deutsche Börse Group pursues an enterprise-wide approach to its compliance function, ensuring that
applicable laws and regulatory requirements are followed by individual Group entities. Under applicable
law, the compliance functions of the individual Group entities report to the respective member of the
Executive Board responsible for Compliance. Moreover, the compliance functions and their staff report
directly to the Group Chief Compliance Officer via a uniform reporting structure. Wherever possible,
Deutsche Börse Group’s compliance follows a synergistic and holistic approach by applying Group-wide
compliance regulations and standards to ensure that the related concepts permeate throughout the Group.
Deutsche Börse Group’s compliance function has been consistently strengthened over recent years.
During the course of 2018, the Group significantly increased its Compliance personnel in major offices
around the world, with the objective of coordinating and enhancing the strength of the individual
business segments’ compliance function and integrating Compliance officers with the control functions of
the individual business segments and other control functions, as required by supervisory bodies. This
close alignment strengthened the second line of defence. In order to be able to act pre-emptively and to
mitigate the compliance risks referred to above, the Group continues to invest into the acquisition and
further development of IT tools. This provides a validated data inventory, which enables the Group to
consistently and appropriately respond to compliance risk. In 2018, the focus was on standardising and
digitalising the compliance processes that impact the relevant business units. Deutsche Börse Group
also improved its due diligence procedures with respect to clients, market participants, counterparties
and business partners.
Group Compliance continuously promotes legally compliant and ethically correct conduct, as well as
integrity amongst all Deutsche Börse Group employees. For instance, staff have been made aware of
(and enhanced emphasis has been placed on) compliance-relevant aspects throughout the respective
business units and Deutsche Börse Group’s regulatory required control functions. The new code of
business conduct comprises the aforementioned activities and creates a holistic regulatory environment
for Deutsche Börse Group.
Over the last few years, Deutsche Börse Group has devoted itself to the development of market-leading
compliance standards. The Group promotes and reflects these standards across its entire product-related
value creation chain, particularly from the perspective of a leading global provider of financial markets
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infrastructure. At the end of 2018, Deutsche Börse AG decided to align its compliance management
system with the globally recognised ISO 19600 standard. This is a crucial next step designed to exploit
Group-wide synergies and go beyond the scope of supervisory requirements. These efforts will continue
in 2019. A special focus lies on compliance monitoring and controls based on a Group-wide procedural
approach.
Financial risk
Deutsche Börse Group classifies its financial risk into credit, market and liquidity risk (see the
“Financial risk at Deutsche Börse Group” chart). At Group level, these risks account for about 23 per
cent of the entire risk profile (this information only includes credit and market risk; liquidity risk is not
quantified as part of the REC; see
note 25 to the consolidated financial statements). They primarily
apply to the Group’s institutions. As a result, the following explanation focuses on Clearstream and Eurex
Clearing AG.
Financial risk at Deutsche Börse Group
Financial risk
Credit risk
Market risk
■■ For collateralised and uncollateralised
■■ For securities
Liquidity risk
■■ Customer default
customer credits
■■ For collateralised and uncollateralised
■■ For pension provisions
■■ Payment obligations
■■ In case of balance-sheet currency
■■ Repayment of customer deposits
cash investments
■■ In securities lending
■■ Participation in default fund
■■ Outstanding liabilities
mismatches
Credit risk
Credit risk describes the danger that a counterparty might not meet its contractual obligations, or not
meet them in full. Measurement criteria include the degree to which the credit line has been utilised,
the collateral deposited and concentration risk. Although Clearstream and Eurex Clearing AG often have
short-term claims against counterparties totalling several billion euros overall, these are generally
secured by collateral deposited by the market participants. Moreover, the Group regularly evaluates the
reliability of its emergency plans at Clearstream and Eurex Clearing AG in the event of client defaults
and the resulting credit risk.
Furthermore, Clearstream Banking S.A. is exposed to credit risk arising from its strategic securities
lending transactions (ASLplus). Only selected banks act as borrowers. All borrowing transactions are fully
collateralised. Only selected bonds may be used as collateral; these must be rated at least BBB – by the
Standard & Poor’s rating agency or the equivalent from other agencies. In the case of short-term securi-
ties without individual ratings, the issuers must be rated at least A–1.
Clearstream extends credit to customers in order to make settlement more efficient. This type of credit
business is fundamentally different, however, from the classic lending business. First, credit is extended
solely on a very short-term basis and generally for less than a day. Second, it is generally collateralised
and granted to those clients with high creditworthiness. Furthermore, the credit lines granted can be
revoked at any time.
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Under its terms and conditions, Eurex Clearing AG enters into transactions only with its clearing
members. Clearing mainly relates to defined securities, rights and derivatives that are traded on specific
stock exchanges. Eurex Clearing AG also offers this service for some over-the-counter (OTC) products
such as interest rate swaps and forward rate agreements. As a central counterparty, it steps in between
transactional counterparties. Through offsetting mutual claims and requiring clearing members to post
collateral, Eurex Clearing AG mitigates its clients’ credit risk exposure.
To date, no default by a client with a secured credit line has resulted in financial losses. Deutsche Börse
Group continues to view the probability as low that one of its customers could become insolvent and that
this could lead to losses for the Group. It considers the impact of such an event to be low if the credit
line in question is collateralised and medium if it is uncollateralised. The probability of a counterparty to
an uncollateralised credit defaulting is considered to be very low. If several large, systemically relevant
banks were to default simultaneously, the financial impact may be significant. The probability of this
scenario is considered to be very low.
Credit risk can also arise from cash investments. The Treasury department is responsible here and has
Group-wide authority. Treasury largely makes collateralised investments of funds belonging to Group
companies as well as Clearstream and Eurex Clearing AG customers. To date, counterparty default has
not led to any loss for the Group. The probability that the default of a counterparty to an uncollateralised
cash investment could lead to a loss is considered to be low; the financial loss itself could have a
medium impact.
Investment losses on currencies for which Eurex Clearing AG has no access to the respective central
banks, will be borne on a pro-rata basis by Eurex Clearing AG and by those clearing members active
in the currency where losses were incurred. The maximum amount each clearing member will have
to contribute in this manner is the total amount that the clearing member has pledged with Eurex
Clearing AG as cash collateral in this currency. The maximum amount to be borne by Eurex Clearing AG
is €50 million.
Reducing credit risk
Clearstream and Eurex Clearing AG assess the creditworthiness of potential customers or counterparties
to an investment before entering into a business relationship with them in a uniform manner: they deter-
mine the size of individual customers’ credit lines based on regular creditworthiness checks, which they
supplement with ad hoc analyses if necessary. They define haircuts for securities posted as collateral
depending on the risk involved, and continually review their appropriateness. They include all relevant
risk factors when determining the haircut and allocate a specific deduction to each. The total haircut is
calculated by adding together the individual margins for the risk factors concerned.
Given the size and volatility of its clients’ liabilities, Eurex Clearing AG has developed a leading-edge
collateral management system, which is described in detail in the following section.
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Safety for both participants and the clearing house
Each clearing member must prove that it has liable capital equal at least to the amounts that Eurex
Clearing AG has defined for the different markets. The amount of capital for which evidence must be
provided depends on the risk. To mitigate Eurex Clearing AG’s risk that clearing members might
default before settling open transactions, members are obliged to deposit collateral in the form of
cash or securities (margins) on a daily basis and, if required, to meet additional intraday margin calls.
Eurex Clearing AG only permits securities with a high credit quality to be used as collateral. It continually
reviews what collateral it will accept and uses haircuts with a confidence level of at least 99.9 per cent
to cover market risk. As a result, securities of issuers with lower credit quality receive higher haircuts
than securities with the highest credit quality. When in doubt, collateral with insufficient quality will be
excluded. Risk inputs are checked regularly and the safety margins are calculated daily for each security.
In addition, a minimum safety margin applies to all securities.
Margins are calculated separately for clearing member accounts and client accounts. Gains and losses
resulting from intraday changes to the value of financial instruments are either settled in cash by the
counterparties (variation margin) or deposited with Eurex Clearing AG as collateral by the seller due to
the change in the equivalent value of the item (premium margin). In the case of bond, repo or equity
transactions, the margin is collected from either the buyer or the seller (current liquidating margin),
depending on how the transaction price performs compared to the current value of the financial instru-
ments. The purpose of these margins is to offset accumulated gains and losses.
In addition, Eurex Clearing AG uses additional collateral to protect itself in the case of default by a
clearing member against any risk that the value of the positions in the member’s account will deteriorate
in the period before the account is settled. This additional collateral is known as the initial margin. The
target confidence level here is at least 99.0 per cent (with a minimum two-day holding period) for
exchange-traded transactions, or 99.5 per cent (with a five-day holding period) for OTC transactions.
Eurex Clearing AG checks regularly whether the margins match the requested confidence level: initial
margin is currently calculated using the legacy risk-based margining method and the Eurex Clearing
Prisma® method, which is already available for all derivative contracts traded. The method takes the
clearing member’s entire portfolio – as well as historical and stress scenarios – into account when
calculating margin requirements. The objective is to cover market fluctuations for the entire liquidation
period until the account is settled. At present, the risk-based margining method is still used for cash
market products and physical deliveries, as well as for securities lending and repo transactions. The
Prisma method is set to fully replace risk-based margining in the future.
In addition to the margins for current transactions, each clearing member makes contributions to a
default fund, based on the member’s individual risk profile. The default fund is jointly liable for the
financial consequences of a default by a clearing member to the extent that this cannot be covered by
the member’s individual margin, or the contributions it or Eurex Clearing AG make to the default fund.
Eurex Clearing AG uses regular stress tests to check whether its default fund is adequate enough to
absorb a default of its two largest clearing members. This involves subjecting all current transactions
and their collateral to market price fluctuations at a confidence level of at least 99.9 per cent. In order
to be able to determine potential losses in excess of a clearing member’s individual margins, the impact
on the clearing fund of a potential default is simulated. Eurex Clearing AG has defined limits which,
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when exceeded, trigger an immediate adjustment to the size of the default fund if necessary. The
following lines of defence are available in case a clearing member is unable to meet its obligations to
Eurex Clearing AG due to a delay in performance or a default:
First, the relevant clearing member’s outstanding positions and transactions can be netted and/or
closed from a risk perspective by entering into appropriate back-to-back transactions, or they can be
settled in cash.
Any potential shortfall that might be incurred in connection with such a closing or cash settlement,
as well as the associated costs, would be covered in the first instance by the collateral provided by the
clearing member concerned. As at 31 December 2018, collateral amounting to €52,623.1 million
had been provided for the benefit of Eurex Clearing AG (after haircuts).
After this, the relevant clearing member’s contribution to the clearing fund would be used to cover
the open amount. Contributions ranged from €1 million to €414 million as at 31 December 2018.
Any remaining shortfall would initially be covered by a contribution to the clearing fund by Eurex
Clearing AG. Eurex Clearing AG’s contribution amounted to €150 million as at 31 December 2018.
Only then would the other clearing members’ contributions to the clearing fund be used
proportionately. As at 31 December 2018, aggregate clearing fund contribution requirements for all
clearing members of Eurex Clearing AG amounted to €4,076.4 million. After the contributions have
been used in full, Eurex Clearing AG can request additional contributions from each clearing member,
which can be at most twice as high as their original clearing fund contributions. In parallel to these
additional contributions, Eurex Clearing AG provides additional funds of up to €300 million, provided
via a letter of comfort from Deutsche Börse AG (see below). These additional funds will be used
together with the additional clearing member contributions, on a pro-rata basis.
Next, the portion of Eurex Clearing AG’s equity would be used that exceeds the minimum regulatory
equity.
Finally, the remaining minimum regulatory equity of Eurex Clearing AG would be drawn upon.
Deutsche Börse AG has issued a letter of comfort in favour of Eurex Clearing AG. With this letter of
comfort, Deutsche Börse AG commits to provide the funds to Eurex Clearing AG required to fulfil its
duties – including the duty to provide additional funds of up to €300 million, as mentioned before.
The maximum amount to be provided under the letter of comfort amounts to €600 million, including
payments already made. Third parties are not entitled to any rights under the letter of comfort.
In the event of default by a clearing member, Eurex Clearing AG triggers its tried-and-tested default
management process (DMP), in order to rebalance the central counterparty. This process not only
contributes to the security and integrity of capital markets but also protects non-defaulted clearing
members from any negative effects resulting from the default.
Essentially, within the DMP framework, products which share similar risk characteristics are assigned to
liquidation groups that are liquidated using the same process. Within a liquidation group, Eurex Clearing
AG will balance its position by transferring defaulted positions to other clearing members either via an
auction or by way of bilateral independent sales.
Historically, the DMP of Eurex Clearing AG has been used four times, involving the defaults of Gontard &
MetallBank (2002), Lehman Brothers (2008), MF Global (2011) and Maple Bank (2016).
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In all of the cases mentioned above, the funds pledged as collateral by the defaulted clearing member
were sufficient to cover losses incurred upon closing out positions – in fact, a significant portion of
resources was returned to the defaulted clearing member.
Deutsche Börse Group reduces its risk when investing funds belonging to Group companies and client
funds by distributing investments across multiple counterparties with high credit quality by defining
investment limits for each counterparty and by investing funds primarily in the short term and in
collateralised form if possible. Investment limits are established for each counterparty on the basis of
regular credit checks and using ad hoc analyses, as necessary. Since extending its licence as an
investment and credit institution under the Kreditwesengesetz (German Banking Act), Eurex Clearing AG
can also use Deutsche Bundesbank’s permanent facilities.
Clearstream and Eurex Clearing AG run stress tests to analyse scenarios such as the default of their
largest counterparty. The figures determined in this way are compared with the limits defined as part of
the companies’ risk-bearing capacity. In addition, the impact of several clearing counterparties defaulting
at the same time is calculated for Eurex Clearing AG. A special stress test examines Clearstream
Banking S.A.’s credit risk exposure from the settlement procedure with Euroclear. Moreover, inverse
stress tests are run to determine the number of counterparties that would have to default for losses to
exceed the risk cover amount. In the course of the stress tests run in financial year 2017, the identified
risks have been further analysed and appropriate measures to reduce risk have been implemented.
Deutsche Börse Group tracks a variety of risk indicators in addition to its risk measures (REC, EaR and
the credit risk stress tests performed). These include the extent to which individual clients utilise their
credit lines, and credit concentrations.
Market risk
Market risk includes risks of a reverse development of interest rates, exchange rates or other market
prices. Deutsche Börse Group measures these risks using Monte Carlo simulations based on historical
price data, as well as corresponding stress tests.
Clearstream and Eurex Clearing AG invest parts of their equity in securities with the highest credit
quality. The majority of these securities have a variable interest rate, with a low sensitivity to interest rate
fluctuations. The Group avoids open currency positions whenever possible. Furthermore, market risk
could result from Deutsche Börse Group’s ring-fenced pension plan assets (Contractual Trust
Arrangement (CTA), Clearstream pension plan in Luxembourg). The Group reduced its risk of extreme
losses by deciding to invest a predominant proportion of the CTA on the basis of a value preservation
mechanism.
Liquidity risk
Liquidity risk applies if a Deutsche Börse Group company is unable to meet its daily payment obligations
or if it can only do so at a higher refinancing cost. Operational liquidity requirements are met primarily
internally by retaining funds generated. The aim is to maintain liquidity at about the same level of
operating costs for one quarter (currently between €150 million and €250 million). An intra-Group cash
pool is used to pool surplus cash from subsidiaries on a Deutsche Börse AG level, as far as regulatory
and legal provisions allow. Liquid funds are invested in short-term investments to ensure that they are
available. Short-term investments are also largely secured by liquid bonds from first-class issuers.
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Deutsche Börse AG has access to short-term external sources of financing, such as agreed credit lines
with individual banks or consortia, as well as through a commercial paper programme. In recent years,
Deutsche Börse AG has leveraged its access to the capital markets to issue corporate bonds in order to
meet its structural financing needs.
Since Clearstream’s investment strategy aims to be able to repay customer deposits at all times, liquidity
limits are set carefully. In addition, extensive sources of financing are available at all times, such as
ongoing access to the liquidity facilities at Deutsche Bundesbank and Banque Centrale du Luxembourg.
Due to its role as a central counterparty, Eurex Clearing AG has strict liquidity guidelines, and its
investment policy is correspondingly conservative. Regular analyses ensure the appropriateness of the
liquidity guidelines. In addition, Eurex Clearing AG can use Deutsche Bundesbank’s permanent facilities.
The key liquidity risk for Deutsche Börse Group lies in customer default. If a clearing member of Eurex
Clearing AG defaults, its membership is liquidated. If a Clearstream customer defaults, the generally
collateralised, intraday credit line granted to increase settlement efficiency would be called in, and
the collateral provided by the client could then be liquidated. Deutsche Börse Group estimates the
probability of this liquidity risk to be low when there is the possibility of medium financial losses. A
decline in market liquidity, following a counterparty default, would further increase Deutsche Börse
Group’s liquidity risk exposure. On a daily basis, Clearstream and Eurex Clearing AG calculate the
liquidity needs that would result if two of their biggest clients would default and maintain sufficient
liquidity in order to cover the liquidity needs determined.
To consider different scenarios, regular stress tests are being carried out to examine the liquidity risk
exposure of Clearstream and Eurex Clearing AG. Risks identified in the course of stress tests carried
out during the 2018 financial year were analysed further, and corresponding risk-reduction measures
initiated.
Business risk
Business risk reflects the fact that the Group depends on macroeconomic developments and is
influenced by other external events, such as changes in the competitive environment or regulatory
initiatives. It therefore expresses the risks associated with the Group’s business environment and sector.
It also includes business strategy risk, i.e. the impact of risks on the business strategy and possible
adjustments to it. These business risks are represented as variance analyses of planned and actual EBIT
and are monitored constantly by the divisions. They account for about 10 per cent of the Group’s total
risk. Business risk may result in revenues lagging budget projections or in higher costs.
Business risk includes the risk that competitors, such as the exchanges Euronext, Singapore Exchange
(SGX), ICE Futures Europe and Mercado Español de Futuros Financieros (MEFF), as operators of
derivatives markets, might increase their market shares on the European trading markets (both on- and
off-exchange). Deutsche Börse Group estimates the probability of a minor loss in market share as
medium but the resulting impact as rather low.
Additional business risk may arise from regulatory requirements or the geopolitical or economic
environment – for example, in the event of an intra-Europe crisis affecting monetary union, or a tariff
conflict with an adverse effect on trading activity.
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This might have a negative influence on Deutsche Börse Group’s clients and reduce their trading volume
in the future. While the Group still views the probability of this risk occurring as low, and the possible
consequences on client business as medium, there is a significant residual macroeconomic risk which
would materialise if political or financial turmoil was to trigger declining prices on equity markets.
The United Kingdom’s exit from the European Union (“Brexit”) was analysed in terms of the risks to
customers, products and internal processes. To mitigate these risks, licences were requested for the UK
domestic market and a Steering Committee convened to assess the risks on a regular basis. Deutsche
Börse Group believes it is well prepared for Brexit and, among others, considers the OTC clearing
of interest rate swaps to be an opportunity. Eurex Clearing AG has already admitted the majority of its
clearing mambers located in the UK via a unit of the Group located inside EU-27; the remainder is
currently being admitted and will be admitted until the end of March 2019.
The introduction of a financial transaction tax, which continues to be supported by some European
states, might have a negative impact upon Deutsche Börse Group’s business activities. Likewise, a
sustained period of weak trading activity on the market following a significant downturn on the equity
markets (whatever the reasons), for example, also represents a risk to the Group.
Project risk
Projetct risk is a risk driver with a significant impact on one or more of the three other risk categories
(operational, financial and business risk) described above. Project risk is not broken down further.
Ongoing monitoring and checks ensure that project risk is continually analysed and evaluated.
Overall assessment of the risk situation by the Executive Board
Deutsche Börse AG’s Executive Board is responsible for risk management throughout the Group and
regularly reviews the entire Group’s risk situation. Its summary of the situation in 2018 is given here and
is followed by a brief look at the coming financial year.
Summary
Additional external risk factors emerged for Deutsche Börse Group’s business in the past financial year,
particularly higher operational risk in the fields of cybercrime and taxes. Deutsche Börse Group’s
risks were covered by sufficient risk-bearing capacity at all times during 2018, i.e. the allocated risk
appetite limits were complied with. The Group’s risk profile has not changed significantly.
As at 31 December 2018, the Group’s REC amounted to €2,573 million, a 9 per cent increase year-on-
year (31 December 2017: €2,362 million). The available risk-bearing capacity increased by 12 per cent
to €4,619 million year-on-year (31 December 2017: €4,128 million). EaR as at 31 December 2018
were €1,121 million, while risk appetite was €1,941 million, based on the adjusted budgeted EBITDA
in 2018.
Deutsche Börse AG’s Executive Board is convinced that the risk management system is effective. The
Board continues to strengthen the system and the control function responsible for it. The Group-wide
strategy to capture and manage risk, which focuses on risk appetite, forms the basis for internal risk
management. It is codified in the three principles described in the
management” section.
“Risk strategy and risk
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Outlook
Deutsche Börse Group continually assesses its risk situation. Based on the calculated REC in stress tests
and based on the risk management system, Deutsche Börse AG’s Executive Board concludes that the
available risk cover amount is sufficient. Furthermore, it cannot identify any risk that could endanger the
Group’s existence as a going concern.
In 2019, the Group intends to further strengthen Group-wide risk management, as well as the control
functions within the Group, supported by additional personnel and structural improvements. In addition,
a cross-divisional initiative regarding the risk culture within the company will be carried out. Business
continuity precautions should also be expanded to ensure that the company can continue in the case
of an emergency or crisis and to ensure an orderly process in cases of restructuring and liquidation of
regulated institutions.
Report on opportunities
Organisation of opportunities management
Deutsche Börse Group’s opportunities management aims to identify, evaluate and assess opportunities
as early as possible and to take appropriate measures in order to transform opportunities into business
success.
Deutsche Börse Group evaluates organic growth opportunities in the individual business areas both on
an ongoing basis throughout the year and systematically at the Group level as part of its annual budget
planning process. Suggestions from the Group’s business areas for new products, services or technolo-
gies serve as the starting point for the evaluation. The process begins with a careful analysis of the
market environment that considers both customer wishes as well as market developments, competitors
and regulatory changes.
Ideas for growth initiatives are developed further using uniform, Group-wide templates and subjected
to a profitability analysis. Qualitative aspects are documented in a business plan, and revenues and
expenses are projected in detail for several years in the future.
Once a business plan and profitability analysis have been prepared for a specific growth initiative, the
Executive Board of Deutsche Börse AG decides on its implementation. This decision is either taken as
part of the annual budget planning process or as part of the regular budget review meetings that happen
throughout the year.
Once a growth initiative has been approved and the budget has been made available, the initiative’s
progress against the presented business plan is tracked as part of the Group’s general budget steering
mechanisms. Regular reporting on the progress of the initiatives is an important steering tool, which
is coordinated by central functions and created in cooperation with the individual projects from the
business areas. Through these reports, if required, the financial planning is adjusted, forecasts are
updated and changes to the scope of the project are made transparent. These reports also serve as
a control mechanism to determine whether milestones have been reached and if project-specific risks
have been described and if countermeasures have been implemented.
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Organic growth opportunities
Deutsche Börse Group has a very broad portfolio of products and services which covers all areas
of a market infrastructure provider’s value creation chain:
Pre-trading: data and index business
Trading and clearing: financial derivatives, commodities, foreign-exchange trading, cash equities
Post-trading: settlement and custody, investment fund services, collateral management
Thanks to this portfolio, the Group is one of the most broadly-diversified exchange organisations –
it is also one of the leading providers worldwide in terms of trading volumes. In order to maintain and
expand this position, the company is pursuing a growth strategy called Roadmap 2020. To this end,
Deutsche Börse Group is currently concentrating largely on organic growth opportunities in order to
achieve its strategic objectives. The Group makes a basic distinction between structural and cyclical
opportunities: structural opportunities arise, for example, as a result of regulatory changes, new client
requirements (such as the growing demand for exchange-traded solutions to over-the-counter (OTC)
transactions) and the trend where an increasing portion of assets are allocated in passive investment
strategies (e.g. index funds). The company can actively exploit these opportunities. Cyclical
opportunities, on the other hand, cannot be influenced directly by the company and are driven by
macroeconomic changes. In addition, Deutsche Börse Group intends to seize long-term opportunities
arising as a result of the technological transformation.
Structural growth opportunities
When taking advantage of structural growth potential, Deutsche Börse Group focuses on product- and
service-driven initiatives designed to satisfy new client needs as well as regulatory requirements. In order
to ensure the Group is optimally positioned and can explore new opportunities, the Group realigned its
structure with its growth strategy in 2018. For instance, the Group implemented clear responsibilities at
the management level reporting directly to the Executive Board. These managers are not only responsible
for net revenue growth, but also for costs and, therefore, the earnings growth of the individual business
areas – which can also be achieved through cost management. This approach allows the Group to
manage processes in a disciplined manner and to achieve targets at a business area level, and hence
at a Group level overall. This is also reflected by leaner hierarchies, the strengthened consequences
management and the remuneration structure. The number of reporting segments was also increased
from four to nine, thus creating additional transparency for the Group’s growth areas.
Moreover, the Group regularly examines whether it can better achieve growth in high-potential asset
classes, products or services organically or through external acquisitions and collaborations. In this
connection, the company has defined the following five areas of business that focus beyond the organic
options to external growth as well: commodities, foreign exchange trading, investment funds services,
data and index business and fixed-income trading.
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The Group anticipates the strongest revenue increases in the years ahead in trading and clearing. Among
other things, this is due to the clearing of over-the-counter (OTC) derivatives and further growth in
the trading of power and gas products. Foreign exchange trading via 360T® is also expected to provide
a contribution to net revenue growth. In the post-trading area, the focus is on further developing the
investment funds business, cross-border securities settlements via TARGET2-Securities (T2S), as well
as collateral and liquidity management. The growth focus in pre-trading is on expanding the index and
data business. The business potential of the initiatives stated here are described in more detail below.
Clearing of OTC derivatives
The liquidity problems experienced by major market participants during the financial crisis were triggered
by the failure to settle bilateral OTC transactions that were mainly entered into on an unsecured basis. In
light of this, the leading industrialised nations (G20) agreed to create an effective regulatory environment
to make off-exchange derivatives transactions more transparent and more secure. In response, the
European Union developed the European Market Infrastructure Regulation (EMIR), which is aimed at
regulating OTC trading in derivatives. EMIR covers the following aspects:
The obligation to clear standardised OTC derivatives transactions using a central counterparty
Special risk management requirements for transactions in non-standardised derivatives
The obligation to report the transactions to a trade repository
With the entry into force and gradual implementation of EMIR since June 2016, market participants
have been obliged to meet its requirements. Preparing for mandatory clearing, Eurex Clearing AG had
developed set up a central counterparty to clear OTC derivatives transactions. The offering is aimed
primarily at institutional clients and their interest rate derivatives business (interest rate swaps). It
especially focuses on security and efficiency, allowing customers to gain the full benefit of Eurex Clearing’s
risk and collateral management services for their OTC transactions as well. In line with expectations,
Eurex’s clearing volumes in OTC interest rate derivatives have increased significantly since the beginning
of 2018.
Brexit – and the associated uncertainty as to whether clearing houses outside the scope of EU regulation
will be permitted to clear euro-denominated interest rate swaps in the future – offers another opportunity
for Eurex Clearing to increase its market share in this product area. With the Eurex Clearing Partnership
Program, which was started in October 2017, Eurex Clearing created an alternative for clearing interest
rate swaps within the EU. The programme met with broad market acceptance: by the beginning of
February 2019, 33 market participants from the US, the UK, Asia and Continental Europe had already
opted to participate in the programme. Hence, the notional outstanding volume on Eurex Clearing
increased considerably in 2018 year on year. The company anticipates another significant increase
in 2019.
Within the framework of the performance-based partnership programme, Eurex Clearing AG shares a
substantial portion of the economic success of its interest rate swap segment with the ten most active
participants. These are also given a seat on the Eurex Clearing AG Supervisory Board or on the newly
established Fixed Income and Currency (FIC) Board Advisory Committee. Clients are thus directly
involved in further developing the strategy and expanding the clearing house’s products and services.
At the end of 2018, Eurex Clearing announced that it plans to extend the partnership programme to
include the repo business and foreign exchange trading.
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Trading and clearing of power and gas products on EEX
The Leipzig-based European Energy Exchange AG (EEX) allows Deutsche Börse Group to offer a broad
product range for the trading and clearing of spot and derivatives contracts on power and gas and
emission certificates. In turn, EEX benefits from the markedly higher demand for energy trading and
clearing services. The double-digit growth rates in this area are not only the result of external growth but
also structural organic growth thanks to Deutsche Börse Group’s good market position. For instance,
EEX has evolved into the central marketplace for energy, energy-related and commodities products in
Continental Europe; its product range includes the markets in Germany, France, the Netherlands,
Belgium, Italy and Spain. It has also been active in the US market since May 2017, through the
acquisition of Nodal Exchange. EEX also generated organic growth, especially in the power and gas
business. While this growth momentum is based on the changing importance of renewable energy
sources – wind power in particular – for power generation, the resulting gains in the availability of power
are difficult to predict, also due to the strong fragmentation of the European energy market, and the fact
that market participants predominantly trade off-exchange. Owing to this high degree of fragmentation,
as well as the inefficiency of OTC markets, demand for on-exchange trading and clearing solutions for
such transactions has been growing over recent years. On 12 June 2018, the European Cross-Border
Intraday Initiative (XBID) was launched – a power market platform developed under the initiative of the
European Commission. At year-end 2013, Deutsche Börse had won the tendering process to develop
and operate a pan-European intraday trading platform. The start of XBID – and hence, the opening up of
national European markets for competition – mark an important step towards creating an integrated
European intraday energy market. EEX believes it is well positioned in this changing competitive
environment to achieve structural growth and gain additional market share by providing more efficient
trading and clearing solutions. EEX has already succeeded in significantly increasing its market share
in recent years; its energy derivatives share, for example, was around 37 per cent at the end of 2018.
Growth in foreign-exchange trading (360T)
With the full acquisition of 360T, Deutsche Börse AG successfully explored a new asset class – foreign-
exchange trading. 360T® is a leading, globally active foreign-exchange trading platform, whose broad
customer base includes companies, buy-side customers and banks. The acquisition offers the potential
for revenue synergies amounting to an eight-figure sum (in euros) over the medium term, with 360T
leveraging Deutsche Börse Group’s international sales network and expertise to grow its business. By
combining the skills and experience of 360T in the foreign-exchange market with Deutsche Börse
Group’s IT competence, the Group will be able to tap the resulting revenue potential. 360T has thus
made progress with various measures for achieving synergies: The technology for the central order book
has been completed and is in the roll-out phase. The pilot phase of the clearing services for OTC foreign
exchange transactions will start in the first half of 2019. Having successfully completed the test
operations, market participants will be able to use clearing services for OTC foreign exchange
transactions for the first time. The third project is the introduction of the rolling spot futures and classic
futures contracts, which were rolled out at the beginning of June 2018. For 360T, the goal of all three
measures over the coming months will be to attract market participants who will use these offers
regularly, in order to gradually build liquidity.
Thanks to its leading position, 360T further benefits from a structural trend: even though, at present,
the vast majority of daily foreign-exchange trading volumes is still executed off-exchange, demand
for transparent, electronic multi-bank trading platforms such as 360T is rising. With this in mind,
Deutsche Börse Group acquired the GTX Electronic Communication Network (ECN) business of GAIN
Capital Holdings, Inc. in 2018 to expand its position in the global currency market and in the US
market. The acquisition represents another step taken by 360T to expand its business. With GTX, 360T
has won a spot interbank FX platform whose product range and customer base complement 360T’s
existing business.
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Further infomation
To date, regulatory obligations such as EMIR have not yet been expanded to cover the foreign-exchange
market. If this were to happen in the near future, Deutsche Börse Group would be able to tap further
opportunities from its extensive portfolio of products and services it offers in the context of regulatory
requirements.
Cross-border settlement of investment funds
Clients of Deutsche Börse Group can use Clearstream’s settlement and custody services for their entire
fund portfolio – covering traditional investment funds, exchange-traded funds (ETFs) as well as hedge
funds. Given that supervisory authorities are also calling for more efficient settlement and custody
solutions in order to guarantee maximum security for client assets under custody, the Group expects to
acquire additional client portfolios in the future. For example, portfolios from Lombard Odier and Banque
Internationale à Luxembourg were acquired already in 2018. The Group is also continuously expanding
its range of products and services. For instance, Clearstream S.A. acquired Swisscanto Funds Centre Ltd.,
London, (SFCL), from Zürcher Kantonalbank during the year under review. The company was renamed
Clearstream Funds Centre Ltd. as at 2 November 2018. Through the transaction, Clearstream has
extended its range of fund services, to include the management of distribution agreements as well as
data compilation. In addition to SFCL’s existing client base, Clearstream plans to offer the company’s
range of services to its existing clients, too. Extending the product and service range, Clearstream
expects to generate additional net revenue by realising cross-selling synergies.
Cross-border securities settlement (T2S)
Initiated by the ECB, the purpose of the T2S project is to harmonise cross-border securities settlement
using central bank funds across Europe. For Deutsche Börse Group, this holds the opportunity of
winning new clients for Clearstream’s innovative services, such as global liquidity management. The
Group expects higher custody volumes and additional new services from T2S in the long term, which
can only be provided through Clearstream via its integrated international central securities depository
(ICSD). Clients can now use Clearstream as a central point of access for domestic and international
settlements, both in central bank and commercial bank funds. National central securities depositories
(CSDs) – Clearstream Banking AG in Germany and LuxCSD S.A. in Luxembourg – offer their clients T2S
settlements at ECB terms, without any mark-up. Full interoperability between national and international
CSDs will enhance liquidity and collateral management.
Collateral and liquidity management
Clearstream’s collateral and liquidity management offering helps clients cope with the structural changes
they are facing, such as those resulting from the additional liquidity requirements under Basel III and
the clearing obligations under EMIR which have been applicable since December 2015. Banks can use
the assets held in custody by Clearstream on their behalf more efficiently across different platforms
and countries.
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Further infomation
Expansion of the index business
Deutsche Börse Group’s objective in its index business is to position its established European index
provider STOXX with an even more global profile in order to develop further indices (on top of its DAX®
and STOXX® index families) and market them on a worldwide basis. Diversifying the range of indices
should allow the acquisition of new client groups within Europe as well as in Asia and the Americas. In
addition, we will position our index business to better exploit the structural trend towards passive
investment products (ETFs). An increasing number of private clients and asset managers now follow this
trend; not only are the costs lower, but many active investment strategies have been returning under-
average performance.
Other structural growth opportunities
In addition to these initiatives, the Group has identified a number of other structural factors that could
have a positive impact on its future business success.
The importance of risk management has risen continuously in the wake of the financial crisis and is
also likely to increase further in the future. The company expects market participants to make greater
use of Eurex Clearing’s clearing services to net out transactions in different asset classes and hence to
eliminate counterparty risk.
With respect to the Clearstream (post-trading) segment, the company anticipates a long-term increase
in capital raising through equity and debt financing on the capital markets. This ties in with the higher
capital and liquidity requirements for banks and the resulting negative impact on the total volume of
available credit. For the Clearstream (post-trading) segment, this could have a positive effect on
custody volumes, especially for international bonds. In addition, given the growing internationalisation
of the capital markets, the company is continuing to expect a sharper rise in the bond volume issued
internationally compared with national bond issues.
The Group’s Regulatory Reporting Hub has been live since the beginning of January 2018. Developed
in cooperation with the Group’s clients, the Hub offers a one-stop shop for solutions, helping clients to
fulfil their reporting duties under MiFID II. Altogether, more than 2,200 institutions have connected to
the Regulatory Reporting Hub.
Cyclical opportunities
In addition to its structural growth opportunities, Deutsche Börse Group has cyclical opportunities, for
instance as a result of positive macroeconomic developments. Although the company cannot influence
these cyclical opportunities directly, they could lift Deutsche Börse Group’s net revenue and net profit for
the period attributable to Deutsche Börse AG shareholders significantly in the medium term:
The volumes of interest rate derivatives traded on the Group’s derivatives markets could rise if
speculation on trends in long-term yields on German and other European government bonds grows,
and if the spread between the various European government bonds continues to narrow.
While the company does not expect a substantial change in the ECB’s low interest rate policy during
the forecast period, the US Federal Reserve may continue to gradually hike its key interest rates during
2019, following the turnaround of its policy. Among other things, this would positively impact net
interest income from banking business in the Clearstream (post-trading) segment, as some 50 per cent
of its daily cash balances are denominated in US dollars. An average rise in key interest rates of
1 basis point affecting all customer cash deposits could lift income by some €130 million.
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In the cash and derivatives market segments – Xetra (cash equities) and Eurex (financial derivatives) –
positive economic development, a lasting rise in investor confidence in the capital markets leading to
a renewed rise in risk appetite among market participants and a sustained increase in market volatility
could again stimulate trading activity by market participants and boost trading volumes.
Technological opportunities
New developments such as cloud-based services related to artificial intelligence (AI), big data, robotics
and blockchain technology, combined with the innovation potential of fintechs, are driving change in
the financial services sector. This new wave of technology might help overcome barriers to market
harmonisation, while creating additional efficiency and mitigating risks. This development is expected
to last for the next ten years, with digitisation set to accelerate. The challenge for incumbent providers
is in finding the right way to open up new business models and innovative technologies.
The Group has optimised internal processes, particularly in relation to cloud services; HR processes,
purchasing and settlement of travel expenses, among other things, are now executed in the cloud. This
has significantly streamlined the processes and is having a positive effect on the Group’s costs. The
Group is also working on transferring services and processes with clients to the cloud. For instance, the
introduction of new trading platforms or the updating of existing infrastructure may potentially be tested
beforehand by clients, via the cloud. This would lead to significantly more agile processes within the
Group, as new processes would be introduced at more frequent intervals, allowing the Group to respond
more effectively to clients’ requirements. However, regulatory approval is required to implement this
successfully. The Group is currently coordinating closely with both the regulators and providers of cloud
services, in order to meet the regulatory requirements.
Besides cloud-based applications, the Group is also making progress in the area of robotics. The Group
will implement this technology, in particular, within the scope of coordinating or standardised creation
of invoices, client reports etc. To leverage the potential improvements in this area, the Group put
together a team that not only has the necessary expertise but is also focused exclusively on developing
and implementing the corresponding processes.
Blockchain technology constitutes another aspect of technological opportunities. It is considered a
disruptive technology at times – at present, the financial services sector is evaluating the associated
opportunities. Thanks to its decentralised nature, it facilitates direct interaction between participants,
thus offering the potential for simplifying complex processes. Established market infrastructure providers
such as Deutsche Börse Group, which covers the entire value creation chain from a single source, play
an important role when it comes to tapping this potential – meeting existing industry standards at the
same time. Besides legal and regulatory requirements, this also involves adhering to security standards,
as well as limiting risks and ensuring cost efficiency.
As part of its corporate strategy, Deutsche Börse Group pursues a cooperative approach with regard to
new technological developments. This approach is designed to further strengthen the Group’s leading
technological role, while gauging the potential of new technologies along the value creation chain (from
the issue of securities to trading, clearing, and settlement). Against this background, for example, the
Group developed various blockchain prototypes in cooperation with Deutsche Bundesbank, Eurex Clearing
as the central counterparty, and other central securities depositories, in order to showcase how this
technology might be applied to solve business issues. One of these prototypes involved a concept for the
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Further infomation
risk-free transfer of commercial bank money, based on blockchain technology. The goal is to enhance
efficiency by integrating blockchain technology into the Group’s post-trading infrastructure. Through
Deutsche Börse Group’s central counterparty, it will be possible to reduce the risks involved in the
transfer of digital commercial bank money. Moreover, through the interface between Eurex Clearing and
Clearstream, the Group’s central securities depository, the new concept could also contribute to
enhancing the efficiency of post-trading processes such as settlement services or asset servicing.
As at 7 August 2018, Deutsche Börse Group acquired a minority interest in HQLAx S. à r. l. – a fintech
company specialising in liquidity and collateral management for institutional clients on the international
securities lending and repo markets. The Group is thus strengthening its collaboration with HQLAx, to
use innovative technologies to improve efficiency in the fragmented securities lending market. To this
end, it announced that it is working with HQLAx on developing a solution for securities lending on the
basis of a blockchain platform. The first banks are already in the process of being connected and
extensive talks are being held with the relevant supervisory authorities.
Further Group projects are the newly-created Content Lab, working on improving the use of data in
providing client services, and the Product Development Lab, which develops micro-services. Beyond
this, Deutsche Börse Group is currently examining whether to offer application programming interface
(API) connectivity to its systems, in order to facilitate new data and analytical offers to clients using
cloud technologies.
Report on expected developments
The report on expected developments describes Deutsche Börse Group’s expected performance for the
financial year 2019. It contains statements and information on events in the future, and is based on
the company’s expectations and assumptions at the time of publication of this annual report. In turn,
these are subject to known and unknown opportunities, risks and uncertainties. Numerous factors,
many of which are outside the company’s control, influence the Group’s success, its business strategy
and its financial results. Should opportunities, risks or uncertainties materialise or should one of the
assumptions made turn out to be incorrect, the Group’s actual performance could deviate either positively
or negatively from the expectations and assumptions contained in the forward-looking statements and
information contained in this report on expected developments.
Developments in the operating environment
Macroeconomic environment
With global economic growth already slowing during the course of 2018, inflation rising, and monetary
policy becoming more restrictive (especially in the US), Deutsche Börse Group expects a further
weakening of global growth during the forecast period. The ongoing trade conflict, mainly between China
and the US, pressure on emerging markets due to the tighter US interest rate policy, the appreciation
of the US dollar, as well as the political situation in Europe, especially with regard to the imminent exit
of the United Kingdom from the European Union, are some of the reasons. Against this background,
uncertainty should increase among market participants, and market volatility could rise temporarily.
A settlement of the trade dispute, a stabilisation of the political situation in Europe, and a clear direction
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in the central banks’ monetary policy would have a stabilising effect on markets and a positive impact on
economic growth. Regarding interest rate trends, the Group does not expect to see any fundamental
departure from the current low interest rate policy in Europe. While the ECB terminated its bond-buying
programme at the end of 2018, the central bank also promised that deposit rates would remain at a
level of –0.4 per cent at least until the summer of 2019. The US Fed continued its policy of gradual
interest rate hikes in 2018, indicating further increases may be possible in 2019 – provided that the
economy (and inflation) accelerate further.
In its economic development forecast published in January 2019, the International Monetary Fund (IMF)
predicted economic growth of around 1.6 per cent in the euro area and growth of 1.3 per cent in
Germany for the year 2019, i.e. now expecting significantly lower growth than in October 2018.
Expectations for the United States are higher than for the euro area: the US economy is forecast to grow
by around 2.5 per cent. The highest economic growth by far in 2019 – approximately 6.3 per cent – is
anticipated again in Asian countries (especially India and China), due to expected strength in domestic
demand. Given the extremely varied estimates for the different economic regions, global economic
growth is projected to be around 3.5 per cent in 2019.
Regulatory environment
Governments and central banks have been working to enhance regulation of the financial markets
since 2008, so as to stabilise the financial sector and prevent future systemic crises. The initiated
measures (in some cases already implemented) range from revising the legal framework for banking
business and capital adequacy requirements, through rules for clearing over-the-counter (OTC)
derivatives transactions, down to improving financial market supervision (for more information, please
see the “Regulatory environment” section of the report on economic position). For Deutsche Börse
Group itself, the various regulatory projects will have both positive and negative consequences. Overall,
however, the Group sees the changing regulatory environment as an opportunity to expand its business
further; see the report on opportunities for further details.
Future development of results of operations
Given its diversified business model and multiple sources of revenue, Deutsche Börse Group continues
to consider itself very well positioned and expects to see a positive trend in results of operations over
the medium and long term. This expectation is based on, among other things, the structural growth
opportunities that the company intends to exploit. The Group expects net revenue to increase further in
the forecast period. This assumption is essentially based on a further increase of the contribution from
its structural growth initiatives as well as from new growth opportunities (for details, please refer to the
report on opportunities). Moreover, market speculation on future interest rate developments in the
US and Europe may boost trading activity in interest rate derivatives at Eurex derivatives exchange in
2019 – while higher or potentially increasing US interest rates could lead to a further increase in net
interest income from banking business in the Clearstream (post-trading) segment. Statements on the
further development of equity market volatility, which increased significantly in the past financial year,
are difficult to make at the beginning of 2019. On the one hand, the company continues to anticipate
high uncertainty on the markets, among other things, due to numerous unresolved political issues.
On the other hand, past experience has shown that too much uncertainty can also lead to market
participants taking a very cautious stance, thus resulting in low trading volumes. The company expects
a slightly more reticent market environment in the 2019 financial year compared to 2018, due to the
slowdown in global economic growth, increased economic risks, and political uncertainties, especially
in Europe.
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Further infomation
As in financial year 2018, Deutsche Börse Group expects net revenue growth of at least 5 per cent from
structural opportunities. This growth is driven by the Group’s investments which follow the objective to
transfer market share from OTC to on-exchange trading and clearing and to further expand its positions
in existing asset classes by introducing new products and functionalities (for details, see the report on
opportunities). In comparison, the development of the business areas depending on cyclical factors
largely depends on the degree of speculation regarding future interest rate developments in Europe and
on the level of equity market volatility, potentially resulting in further positive or in a negative impact on
the Group’s net revenue growth. Net revenue growth expected during the forecast period is based on
adjusted net revenue of €2,770.4 million achieved in 2018.
Even if, contrary to expectations, the operating environment turns out to be worse than described above,
and clients were to significantly scale back their business activities (particularly in the business
divisions which depend upon the development of trading volumes), Deutsche Börse Group believes it is
in a position to continue to do business very profitably thanks to its successful business model and
cost discipline.
Within the scope of its growth strategy, Deutsche Börse Group pursues clearly defined principles for
managing operating costs. The core element of these principles is to ensure the scalability of the Group’s
business model. To this end, the Group continuously manages operating costs adjusted for exceptional
effects relative to the development of net revenue. Essentially, the Group achieves the necessary
flexibility in managing operating costs through two different initiatives designed to enhance operating
efficiency. Firstly, the Group has implemented a continuous process to improve operating efficiency by
focusing even more on client needs in order to further enhance the quality and efficiency of the services
offered. At the same time, this results in simplifying Group-internal processes and saving costs.
Secondly, the Group resolved a series of structural cost reduction measures in 2018, and has already
commenced the implementation of said measures.
As at the publication date of this combined management report, the company expects that operating
costs will be affected by exceptional effects of some €100 million during the 2019 financial year. The
majority of these effects are attributable to costs incurred for restructuring and efficiency measures, costs
incurred in connection with existing criminal proceedings, and to the integration of already acquired
companies.
Given the expected increase in net revenue driven by structural factors of at least 5 per cent, and also
given the scalability of the Group’s business model and its efficient cost management, the Group
anticipates a growth rate of approximately 10 per cent for (adjusted) net profit for the period attributable
to Deutsche Börse AG shareholders during the forecast period. Provided that stock market volatility does
not decline significantly compared with 2018, growth of adjusted net profit for the period could also be
somewhat higher. At the same time, growth of adjusted net profit for the period could amount to slightly
below 10 per cent in the event of less stock market volatility than in 2018 – despite the possibilities of
taking countermeasures with regard to operating costs. This assumption is based on an adjusted figure
of €1,002.7 million for 2018. In addition, within the scope of its “Roadmap 2020”, the Group confirms
its medium-term growth targets of between 10 and 15 per cent on average per year for the adjusted net
profit for the period attributable to Deutsche Börse AG shareholders.
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Further infomation
Forecast for results of operations 2019
Net revenue from structural opportunities (excluding exceptional effects)
Exceptional effects impacting operating costs
Based on
2018
€m
Forecast for
2019
2,770.4
+ >5%
244.2 ~€100 million
Net profit for the period attributable to Deutsche Börse AG shareholders (excluding exceptional effects)
1,002.7
+ ~10%
Eurex (financial derivatives) segment
Deutsche Börse Group believes that, over the long term, structural growth factors will result in higher
trading volumes on the market for financial derivatives in all product segments (see the report on
opportunities for further details). In the short term, a further increase in equity market volatility could
lead to a more pronounced increase in trading volumes, particularly with regard to equity index
derivatives. Speculation regarding money market policy, especially in Europe, could also have a positive
impact on interest rate derivatives trading.
Eurex will continue to systematically invest in expanding its product offering throughout the forecast
period in order to take advantage of structural factors, such as regulation or changing customer needs.
The focus of our efforts will be on the acquisition of new business which is currently neither traded on
an exchange nor settled through a clearing house. Regulatory requirements, such as the provision
entered into force in 2016 determining that OTC derivative transactions must be settled via central
counterparties, can provide significant impetus. The Group plans to further increase net revenue from
the OTC derivatives business in 2019. Over the medium to long term, the Group anticipates generating
significant revenue with this business – not least due to the extra potential which might arise from
uncertainty concerning the outcome of the ongoing Brexit process, and potential changes for the clearing
of euro-denominated interest rate swaps which might emanate therefrom.
EEX (commodities) segment
Due to the continuously positive market environment for trading in power and gas products, the Group
expects business activity in the commodities sector to continue to exhibit structural growth during
the forecast period, e.g. by gaining additional market share at the expense of OTC energy markets and
further increasing the share from renewable energy for power generation.
360T (foreign exchange) segment
In foreign-exchange (FX) trading, the Group expects rising demand for multi-bank platforms to further
boost trading volumes on the 360T® FX platform in 2019. The platform has gained further attractive-
ness through the launch of fully electronic FX trading and clearing. During the current financial year,
the company expects to increasingly realise the revenue synergies projected in the context of the
acquisition of 360T.
Xetra (cash equities) segment
As well as enhancing its cash market offering, the company will continue to closely track changes in the
competitive environment in Europe. It considers itself well positioned to retain its status as the market
leader for trading German blue chips and to offer its customers across the globe an attractive range
of products and services for cash trading in German and European equities and equities clearing. The
stronger competition in the cash market means that further shifts in the market shares of all competitors
cannot be ruled out in the next years. Net revenue in the Xetra (cash equities) segment will depend
heavily on stock market cyclicality and volatility.
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Clearstream (post-trading) segment
In the medium to long term Clearstream expects demand for its TARGET2-Securities (T2S) services to
grow, thanks to increasing regulatory requirements and its strong position in the T2S network. Following
Clearstream’s migration to T2S in 2017, the Group anticipates a moderate contribution from these
activities to net revenue, however, not earlier than in the year 2019. This is partly due to the fact that
connecting customers is taking slightly longer than originally planned. Another factor to impact
Clearstream’s business in the forecast period will be central bank monetary policy. Despite the phasing-
out of the ECB’s programme for purchasing government and corporate bonds last year, the interest rate
policy could have a further dampening effect on securities issuance. If, contrary to expectations,
monetary policy becomes more restrictive, this would have positive consequences for issuance and
for net interest income in the banking business. As a significant portion of customer balances
are denominated in US dollars, the ongoing trend of interest rate hikes in the US – initiated at the end
of 2016 – will cause a rise in net interest income in 2019, at steady cash balance levels.
Although Deutsche Börse Group faces especially intense competition in the settlement and custody
of international bonds, the company does not expect this to have a major negative impact on its net
revenue or market share during the forecast period.
IFS (investment fund services) segment
The Clearstream subgroup covers all types of funds – from traditional investment funds to exchange-
traded funds (ETFs) and hedge funds. Given that supervisory authorities are also calling for more
efficient settlement and custody solutions in order to guarantee maximum security for client assets under
custody, Deutsche Börse Group expects to acquire additional client portfolios. In line with this
expectation, the IFS (investment fund services) segment anticipates continued growth in the forecast
period, due to the attractiveness of its fund services.
With regard to its customer structure, the segment expects that consolidation in the financial sector will
persist and that customers in Clearstream’s domestic and international business will merge. These larger
customers would benefit from greater discounts, which could lead to a decline in average fees.
GSF (collateral management) segment
Central bank monetary policy will heavily impact collateral management in the forecast period, especially
regarding activity in the repo business, but also in securities lending. Despite the phasing-out of the
ECB’s programme for purchasing government and corporate bonds, the interest rate policy could have
a further dampening effect on liquidity management. A positive product mix change could possibly
partially compensate for this cyclical development. If, contrary to expectations, monetary policy becomes
more restrictive, this would have positive consequences for the use of collateral and liquidity
management services.
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STOXX (index business) segment
The company anticipates that net revenue in the STOXX segment will further increase during the forecast
period. This expectation is based on the continuous expansion of the product range in all areas and
greater marketing of these products in growth regions. The Group’s index business is set to benefit from
this development in particular. Moreover, the Group considers the significant structural growth in the
market for passively managed assets as an additional growth driver that is expected to further strengthen
demand for index licences for ETFs. In addition to distributing index licences, the Group also benefits
from the growing investment volumes in these products. In this light, the Group believes it is well placed
to increasingly extend the positioning of its globally focused range of indices to the Asian market.
Data segment
This segment aims to accelerate the expansion of Deutsche Börse’s technology leadership and expertise
in the area of market data by pooling all relevant resources within the company in a dedicated, market-
driven business unit. The goal is to open up new growth opportunities in the medium to long term. The
segment also envisages additional growth from the Regulatory Reporting Hub, launched in 2018, in the
forecast period. Developed in cooperation with the Group’s clients, the Hub offers a one-stop shop for
solutions, helping clients to fulfil their reporting duties under MiFID II.
Changes in pricing models
Deutsche Börse Group anticipates sustained price pressure in some of its business areas during the
forecast period. The company’s objective is to cushion this price pressure by continually improving its
products and services and offering selective incentives for price-elastic business.
Over the long term, the average net revenue per unit (e.g. trading or clearing fees per transaction, or fees
for custody services) is expected to decline slightly in all areas of the Group. This is a result of laddered
pricing models that lead to a decline in income per unit as customers’ business activities increase.
Trends in non-financial performance indicators
Initiatives to promote the transparency and security of the markets will continue to be a key focus
during the forecast period, ensuring that Deutsche Börse Group adds value to society. Against this
backdrop, the company expects to maintain the availability of the different trading systems for the cash
and derivatives market at the very high level seen in previous years throughout the forecast period.
Responsible management that focuses on long-term value creation is of considerable importance for
Deutsche Börse Group as a service company. Given demographic change and the resulting shortage of
specialist staff, the company aims to continue to position itself adequately and – among other things –
to increase the number of women in management positions.
In accordance with the Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungs-
positionen in der Privatwitschaft und im öffentlichen Dienst (FührposGleichberG, German Act on the
Equal Participation of Women and Men in Leadership Positions in the Private and Public Sectors),
Deutsche Börse AG’s Executive Board has defined target quotas for women on the two management
levels beneath the Executive Board pursuant to section 76 (4) of the AktG, in each case referring
to Deutsche Börse AG. By 31 December 2021, the proportion of women holding positions in the first
and second management levels beneath the Executive Board is planned to reach 15 per cent and
20 per cent, respectively.
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Moreover, as early as in 2010, the Executive Board had voluntarily committed to increasing the share of
women holding middle and upper management positions to 20 per cent by 2020, and women holding
lower management positions to 30 per cent during the same period. The Group maintains this ambition,
and has extended the scope of its voluntary commitment, over and above legal requirements. Firstly, the
target figures determined in this context relate to Deutsche Börse Group worldwide. Secondly, the
definition of management levels/positions was extended to also include heads of teams, for example.
Future development of the Group’s financial position
The company expects operating cash flow, which is Deutsche Börse Group’s primary funding instrument,
to remain clearly positive in the future. The Group expects that two significant factors will influence
changes in liquidity. Firstly, the company plans to invest some €180 million in intangible assets and
property, plant and equipment at Group level. These investments will serve primarily to develop new
products and services in the Eurex (financial derivatives) and Clearstream (post-trading) segments, and
to enhance existing ones. The total amount essentially comprises investments in trading infrastructure
and in risk management functionalities. Secondly, the Executive Board and Supervisory Board of
Deutsche Börse AG will propose a dividend of €2.70 per share to the Annual General Meeting to be held
in May 2019. This would correspond to a cash outflow of about €495 million. Against the background
of the growth strategy, the company anticipates that, in future, freely available funds will increasingly
also be applied to the Group’s complementary external growth options. Apart from the above, no other
material factors were expected to impact the Group’s liquidity at the time the combined management
report was prepared. As in previous years, the Group assumes that it will have a sound liquidity base
in the forecast period due to its positive cash flow from operating activities, adequate credit lines (see
note 25 to the consolidated financial statements for details), and flexible management and planning
systems.
Deutsche Börse Group generally aims to distribute dividends equivalent to between 40 and 60 per cent
of adjusted net profit for the period attributable to Deutsche Börse AG shareholders. Within this range,
the Group manages the actual payout ratio mainly relative to the business performance and based on
continuity considerations. In addition, the company plans to invest the remaining available funds primarily
into organic growth, but also, secondarily, for the Group’s complementary external development. Should
the Group be unable to invest these funds, additional payouts, particularly share buy-backs, present
another opportunity for the use of funds. To maintain its strong credit ratings at Group level, the com-
pany aims at a ratio of net debt to EBITDA of no more than 1.75, and a ratio of free funds from opera-
tions to net debt of at least 50 per cent.
The parent company, Deutsche Börse AG, plans to invest some €50 to 60 million in intangible assets
and property, plant and equipment during the forecast period.
Overall assessment by the Executive Board
The Executive Board of Deutsche Börse AG believes that the company continues to be in a very good
position compared with the international competition, thanks to its comprehensive offering along the
securities trading value chain and its innovative strength. Against this background, the Executive Board
therefore expects to see a positive trend in the company’s results of operations over the long term. The
purpose of the measures as part of the growth strategy is to further accelerate the Group’s growth. In this
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Financial statements
Notes
Further infomation
context, the Group aims to act in a more agile and effective manner, and with increased client focus,
to turn Deutsche Börse into the global market infrastructure provider of choice, being top-ranked in all
its activities. Looking at the economic and regulatory framework over the forecast period, uncertainty
persists concerning capital market participants’ behaviour; therefore, it is impossible to come up with a
concrete forecast for cyclical growth in net revenues. Nonetheless, Deutsche Börse Group endeavours
to further expand its structural growth areas and to further increase their contribution to net revenues by
at least 5 per cent. At the same time, the Group plans to safeguard the scalability of its business model
throughout the forecast period. To this end, the Executive Board will actively manage operating costs in
a way that net profit for the period attributable to Deutsche Börse AG shareholders will grow at a stronger
rate than net revenue. Specifically, growth rates of about 10 per cent (excluding exceptional effects) are
projected for the forecast period. Overall, the Executive Board assumes on this basis that cash flow from
operating activities will be clearly positive and that, as in previous years, the liquidity base will be sound.
The overall assessment by the Executive Board is valid as at the publication date for this combined
management report.
Deutsche Börse AG (disclosures based on the HGB)
The annual financial statements of Deutsche Börse AG are prepared in accordance with the provisions
of the German Commercial Code (Handelsgesetzbuch, HGB) and the supplementary provisions of the
German Stock Corporation Act (Aktiengesetz, AktG) and are the underlying basis for the explanations
that follow.
Business and operating environment
General position
Deutsche Börse AG is the parent company of Deutsche Börse Group. The parent company’s business
activities include first and foremost the cash and derivatives markets, which are reflected in the Eurex
(financial derivatives) and Xetra (cash equities) segments, as well as the data and index businesses.
Deutsche Börse AG also operates essential parts of Deutsche Börse Group’s information technology.
The development of Deutsche Börse Group’s Clearstream (post-trading) segment is reflected in
Deutsche Börse AG’s business development, primarily due to the profit and loss transfer agreement with
Clearstream Holding AG. Deutsche Börse Group’s IFS (investment fund services) and GSF (collateral
management) segments, in contrast, play a lesser role for Deutsche Börse AG. Nevertheless, the
business and framework conditions at Deutsche Börse AG essentially correspond to those of Deutsche
Börse Group and are described in the
“Macroeconomic and sector-specific environment” section.
Deutsche Börse AG’s course of business in the reporting period
Deutsche Börse AG’s revenues increased by 3.6 per cent in the 2018 financial year, coming in slightly
below the company’s expectations. Total costs (staff costs, amortisation of intangible assets and
depreciation of property, plant and equipment and other operating expenses) increased by 0.7 per cent.
Net profit fell compared to 2017 which, among other things, had been positively impacted by proceeds
of €139.5 million from the sale of the stake in Eurex Zürich AG to Eurex Global Derivatives AG. On an
adjusted basis – i.e. excluding the aforementioned one-off proceeds included in the previous year – the
company’s net profit for the 2018 financial year increased by 11.8 per cent and, therefore, exceeded the
expectation of an increase of at least 10 per cent. Based on these results, Deutsche Börse AG Executive
Board assesses the development in the 2018 financial year as satisfactory.
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Financial statements
Notes
Further infomation
Performance figures for Deutsche Börse AG
Sales revenue
Total costs
Net profit from equity investments
EBITDA
Net profit for the period
Earnings per share (€)
1) Calculation based on weighted average of shares outstanding
Results of operations of Deutsche Börse AG
2018
€m
2017
€m
1,396.5
1,348.0
921.2
242.3
831.2
532.2
2.881)
915.2
346.6
887.8
615.7
3.301)
Change
%
3.6
0.7
– 30.1
– 6.4
– 13.6
– 12.1
Deutsche Börse AG’s net revenue rose by 3.6 per cent in 2018 to €1,396.5 million (2017: €1,348.0
million). At €836.6 million (2017: €780.9 million), the largest contribution to revenue came from the
Eurex (financial derivatives) segment. The breakdown of revenue by company segment is provided in the
“Sales revenue by segment” table.
Sales revenue by segment
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data
Total
2018
€m
836.6
13.5
2.9
229.8
75.7
8.7
3.1
27.4
198.8
2017
€m
780.9
14.3
0.7
235.2
96.3
9.7
3.7
26.8
180.4
1,396.5
1,348.0
Change
%
7.1
– 5.6
314.3
– 2.3
– 21.4
– 10.3
– 16.2
2.2
10.2
3.6
For more information on the development of the Eurex (financial derivatives) segment, please refer to the
“Eurex (financial derivatives) segment” section.
“EEX (commodities) segment” and “360T
The revenue contributed by the EEX (commodities) and 360T (foreign exchange) segments is generated
mainly by IT services. Therefore, the explanations in the
(foreign exchange) segment” sections relate only indirectly to Deutsche Börse AG. The earnings situation
of the Data and STOXX (index business) segments is shown in the
“Data segment” and “STOXX (index
business) segment” sections. It is important to note that the business performance of the STOXX Ltd.
subsidiary, in particular, has no direct impact on the on the business performance of Deutsche Börse AG.
An explanation of the business development in the Xetra (cash equities) segment can largely be found in
the
IFS (investment fund services) and GSF (collateral management) segments result from the IT services
Deutsche Börse AG provides to companies belonging to the Clearstream Holding subgroup.
“Xetra (cash equities) segment” section. Revenues attributable to the Clearstream (post-trading),
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Financial statements
Notes
Further infomation
Other operating income increased to €54.3 million in the year under review (2017: €43.3 million,
adjusted for the proceeds from the sale of shares in Eurex Zürich AG in the amount of €139.5 million).
Other operating income in the year under review resulted primarily from the sale of licences in the
amount of €38.7 million.
At €921.2 million, the company’s total costs were 0.7 per cent higher than in the previous year (2017:
€915.3 million). The composition of total costs can be found in the “Overview of total costs” table. Staff
costs rose 33.5 per cent to €301.5 million (2017: €225.9 million) in the year under review. This
increase resulted primarily from the restructuring programme initiated in the 2018 financial year, which
amounted to €47.3 million. Furthermore, additions to pension provisions increased by €26.9 million.
There was also an increase in the number of employees from an average of 1,368 in the prior year to
1,469 in the 2018 financial year. Adjusted for exceptional effects, total costs decreased by
€69.0 million to €802.0 million (2017: €871.0 million). The decline is mainly due to the restructuring
programme and streamlining of the management structure.
Overview of total costs
Staff costs
Depreciation and amortisation
Other operating expenses
Total
2018
€m
301.5
57.8
561.9
921.2
2017
€m
225.9
37.3
652.1
915.3
Change
%
33.5
55.0
– 13.8
0.7
Amortisation of intangible assets and depreciation of property, plant and equipment increased to a total
of €57.8 million in the year under review (2017: €37.3 million). This increase resulted from the take-
over of the trading and clearing systems as part of the merger of Finnovation Software GmbH with
Deutsche Börse AG, with effect from 1 October 2017. The 2018 reporting year was the first year that
the software, acquired in 2017, was amortised for an entire financial year. As a result, the amortisation
of purchased software increased by €18.9 million to €31.2 million (2017: €12.3 million). The carrying
amount of intangible assets decreased to €117.9 million (2017: €126.6 million).
Other operating expenses fell by 13.8 per cent year-on-year to €561.9 million (2017: €652.1 million).
This decline resulted mainly from lower operating management fees of €158.6 million (2017: €200.8
million). The software of Deutsche Börse AG and Eurex Global Derivatives AG used by Eurex Clearing AG
and Eurex Frankfurt AG was made available to users free of charge as at 1 January 2018 within the
context of operational management. In addition, agency fees to affiliated companies fell to €25.2 million
(2017: €67.2 million).
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Financial statements
Notes
Further infomation
Deutsche Börse AG’s net income from strategic investments in the 2018 financial year totalled €242.3
million (2017: €346.6 million) and, among others, consisted of dividend income of €90.6 million
(2017: €129.7 million) and income from the transfer of profits from Clearstream Holding AG in
the amount of €152.7 million (2017: €84.7 million). The previous year’s result had also included
income in the amount of €139.5 million from the sale of shares in Eurex Zürich AG to Eurex Global
Derivatives AG.
Earnings before interest, tax, depreciation and amortisation (EBITDA) decreased to €831.2 million
(2017: €887.8 million). The adjusted EBITDA rose by 22.2 per cent to €949.4 million (2017:
€777.1 million). This increase resulted from net revenue growth coupled with a decrease in adjusted
operating costs. Net profit for the period amounted to €532.2 million, representing a decline of
13.6 per cent (2017: €615.7 million). The decline in the reported EBITDA and the reported net profit
for the period resulted from the absence of the proceeds from the sale of shares in Eurex Zürich AG
in the prior year.
Development of profitability
Deutsche Börse AG’s return on equity expresses the ratio of net profit after taxes to average equity
available to the company in 2018. Return on equity declined from 24 per cent in 2017 to 21 per cent
due to the lower net profit.
Financial position of Deutsche Börse AG
As at the reporting date, cash and cash equivalents amounted to €716.5 million (2017: €912.0 million)
and included bank deposits on current accounts as well as term deposits and other short-term deposits.
Deutsche Börse AG has external credit lines available of €605.0 million (2017: €605.0 million),
which were not yet drawn upon as at 31 December 2018. The company also has a commercial paper
programme providing flexible, short-term financing options in different currencies up to a total of
€2.5 billion. No commercial paper was outstanding as at the end of the reporting year.
Deutsche Börse AG allocates the liquidity within Deutsche Börse Group optimally through a Group-wide
cash-pooling system, which ensures that all subsidiaries are in a position to meet their payment
obligations at all times.
Deutsche Börse AG has issued three corporate bonds, each with a nominal value of €600 million, as
well as a corporate bond with a nominal value of €500 million. For more details about these bonds,
please refer to the
“Financial position” section.
In the 2018 financial year, Deutsche Börse AG generated cash flow from operating activities of
€642.3 million (2017: €700.1 million). The decline is mainly due to the low net profit and higher
receivables from affiliated companies.
Cash flow from investing activities amounted to €–444.1 million (2017: €688.8 million). This decline
is related, among other things, to the purchase of shares in European Energy Exchange (EEX) (€356.4
million) and Taiwan Futures Exchange (TAIFEX) (€34.8 million) from Eurex Zürich AG. In addition, there
was a loan granted to 360TGTX in the amount of US$70.0 million. In the previous year, cash flow from
investing activities was influenced in particular by the capital reduction of Eurex Frankfurt AG (€435.0
million) and the sales proceeds recognised from the sale of the stake in Eurex Zürich AG (€308.4 million).
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Financial statements
Notes
Further infomation
Cash flow from financing activities amounted to €–807.8 million in the year under review (2017:
€–835.0 million). In addition to the payment of a dividend of €453.3 million for the 2017 financial year,
3.4 million shares were repurchased for a total of €364.2 million. Cash and cash equivalents amounted
to €–906.6 million as at the 31 December 2018 reporting date (2017: €–297.1 million) and consisted
of liquid funds of €716.5 million (2017: €912.0 million), less cash-pooling liabilities of €1,623.1
million (2017: €1,209.1 million).
Cash flow statement (condensed)
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents as at 31 December
Net assets of Deutsche Börse AG
2018
€m
642.3
– 444.1
– 807.8
– 906.6
2017
€m
700.1
688.8
– 835.0
– 297.1
As at 31 December 2018, the non-current assets of Deutsche Börse AG amounted to €5,892.9 million
(2017: €5,509.9 million). At €5,520.9 million, most of the non-current assets was attributable to
shares in affiliated companies (2017: €5,235.7 million), mainly from the investment in Clearstream
Holding AG, in STOXX Ltd. and the investment in Eurex Frankfurt AG. The increase in shares in affiliated
companies resulted primarily from the acquisition of a 75.05 per cent stake in EEX from Eurex Zürich AG
for a purchase price of €356.4 million.
Non-current assets (condensed)
Intangible assets
Tangible assets
Financial assets
Non-current assets as at 31 December
2018
€m
117.9
74.9
5,700.1
5,892.9
2017
€m
126.7
68.8
5,314.4
5,509.9
Deutsche Börse AG’s investments in intangible assets and property, plant and equipment amounted to
€56.1 million in the year under review (2017: €155.2 million). This year-on-year decline mainly
resulted from the acquisition of assets by Deutsche Börse AG in the amount of €120.0 million as part of
the merger with Finnovation Software GmbH in 2017. Depreciation and amortisation in 2018 amounted
to €57.8 million (2017: €37.3 million).
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Financial statements
Notes
Further infomation
Receivables from and liabilities to affiliated companies include settlements for intra-Group services and
amounts invested by Deutsche Börse AG in cash-pooling agreements. Receivables from affiliated
companies amounted to €152.7 million (2017: €84.7 million) and originated primarily from the
existing profit transfer agreement with Clearstream Holding AG. Liabilities to affiliated companies
resulted mainly from cash-pooling amounting to €1,623.1 million (2017: €1,209.1 million) and trade
liabilities in the amount of €43.9 million (2017: €52.3 million).
Working capital amounted to €–1,652.9 million in 2018 (2017: €–1,844.7 million). The change is
mainly due to the repayment of the bond and an increase in liabilities to affiliated companies.
Deutsche Börse AG employees
The number of employees at Deutsche Börse AG rose by 74 in the reporting year and totalled 1,469 as
at 31 December 2018 (31 December 2017: 1,395 employees). The average number of employees at
Deutsche Börse AG for the 2018 financial year was 1,437 (2017: 1,368 employees).
During the 2018 financial year, 70 employees left Deutsche Börse AG, resulting in a staff turnover rate
of 5 per cent.
As at 31 December 2018, Deutsche Börse AG employed staff at six locations worldwide. Information on
the countries, regions, the employees’ age structure and length of service are provided in the tables that
follow.
Employees per country/region
Germany
United Kingdom
France
Rest of Europe
Asia
Total Deutsche Börse AG
Employee age structure
Under 30 years
30 to 39 years
40 to 49 years
50 years and older
Total Deutsche Börse AG
31 Dec 2018
1,436
22
5
4
2
1,469
31 Dec 2018
156
443
410
460
1,469
%
97.8
1.5
0.3
0.3
0.1
100
%
10.6
30.2
27.9
31.3
100
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Financial statements
Notes
Further infomation
Employee length of service
Less than 5 years
5 to 15 years
Over 15 years
Total Deutsche Börse AG
31 Dec 2018
658
292
519
1,469
%
44.8
19.9
35.3
100
As at 31 December 2018, a total of 77 per cent of the employees at Deutsche Börse AG were
graduates. The ratio is based on the number of employees holding a degree from a university, college or
vocational academy, as well as the employees who have completed degrees abroad. In 2018, the
company invested an average of 3.3 days in training per employee.
Remuneration report of Deutsche Börse AG
The principles governing the structure and design of the remuneration system at Deutsche Börse AG are
the same as those for Deutsche Börse Group. Therefore, please refer to the
Deutsche Börse Group.
remuneration report for
Corporate governance statement in accordance with section 289f HGB
The corporate governance statement in accordance with section 289f HGB corresponds to that of
Deutsche Börse Group. Therefore, please refer to the
corporate governance report” section.
“Combined corporate governance statement and
Opportunities and risks facing Deutsche Börse AG
risk report and the
The opportunities and risks facing Deutsche Börse AG, as well as the measures and processes for
dealing with these opportunities and risks, are essentially the same as those for Deutsche Börse Group.
report on opportunities of Deutsche Börse Group.
Therefore, please refer to the
In principle, Deutsche Börse AG participates in the opportunities and risks of its equity investments and
subsidiaries in proportion to the size of its shareholding. Risks that could potentially threaten the
existence of the Eurex Clearing AG subsidiary would also have had a direct influence on Deutsche Börse
AG based on a letter of comfort issued by Deutsche Börse AG. As of the reporting date, there were no
risks jeopardising the company’s existence. For further information regarding the letter of comfort to
Eurex Clearing AG, please refer to the
included in the balance sheet” in the notes to the annual financial statements of Deutsche Börse AG.
section entitled “Other financial obligations and transactions not
The description of the internal control system (ICS) required by section 289 (4) HGB is provided in the
“Group management” section.
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Financial statements
Notes
Further infomation
Report on expected developments at Deutsche Börse AG
report on expected developments regarding the cyclical environment and the structural
The expected business development of Deutsche Börse AG is essentially subject to the same factors that
influence the business development of Deutsche Börse Group. For Deutsche Börse AG, the factors
provided in the
growth initiatives were taken into account. For 2019, the company expects sales revenue to be above
the level of the previous year by at least 5 per cent (2018: €1,396.5 million). Given the expected
increase in Deutsche Börse AG’s sales revenue, and taking efficient cost management into account, the
Group anticipates a growth rate of about 10 per cent (excluding exceptional effects) for adjusted net
profit for the forecast period (2018: €621.0 million).
Remuneration report
This remuneration report outlines the principles governing the remuneration system applicable to the
members of Deutsche Börse AG’s Executive Board and describes the structure and amount of remunera-
tion payable to them. Furthermore, it outlines the principles governing Supervisory Board remuneration
and describes the amounts payable. The remuneration report is part of the combined management
report and complies with the requirements of the Handelsgesetzbuch (HGB, German Commercial Code),
the International Financial Reporting Standards (IFRSs) and the Deutscher Rechnungslegungs Standard
Nr. 17 (DRS 17, German Accounting Standard No. 17, Reporting on the Remuneration of Members
of Governing Bodies). In addition, it complies with almost all recommendations of the German Corporate
Governance Code (the Code); see the “Combined corporate governance statement and corporate
governance report” section for details. The remuneration report comprises two sections: “remuneration
system and total Executive Board remuneration” and “Supervisory Board remuneration”.
Remuneration system and total Executive Board remuneration
Principles and targets
The remuneration system for the Executive Board members was adopted by the Supervisory Board
with the effective date 1 January 2016, and it was approved by the Annual General Meeting on 11 May
2016 in accordance with section 120 (4) of the Aktiengesetz (AktG, German Stock Corporation Act).
Changes made to the remuneration system during the financial year 2017 are explained in the
sections entitled “Principles governing the PSP and assessing target achievement for performance
shares”, “Automated share purchase designed to fulfil the plan conditions as well as the share
ownership guidelines” and “Caps on the total amount of remuneration”.
The remuneration system is based on three pillars: firstly, a clear performance orientation and a highly
detailed assessment based on ambitious internal and external targets ensure the focus is on the
company’s goal of above-average growth. Secondly, multi-year bases for assessment, sustainability
elements, and the use of deferred payouts discourage excessive risk-taking. Thirdly, the remuneration
system promotes a strong equity culture and, in this way, helps align the interests of shareholders,
management and other stakeholders.
Executive Board remuneration is set by the full Supervisory Board; the Nomination Committee is
responsible for preparing the Supervisory Board’s decision. The Supervisory Board reviews the
appropriateness of Executive Board remuneration on a regular basis, and at least every two years.
Factors examined in this context include the relationship between Executive Board remuneration and
the salaries paid to senior managers and the workforce as a whole, as well as how pay grades have
developed over time. The remuneration system applies equally to all members of the Executive Board.
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Financial statements
Notes
Further infomation
Structure and remuneration components
The remuneration system for Executive Board members consists of four components:
Non-performance-related basic remuneration
Performance-related remuneration components
Contractual ancillary benefits
Pension commitments
Composition of the total target remuneration
Annual payout
Long-term incentive components (3–5 years)
30 %
45 %
25 %
Non-performance-
related basic
remuneration
Performance-related remuneration components
Performance bonus
Performance shares
Pension
commitments
Contractual
ancillary
benefits
Cash
Shares
% = Proportion of the total target remuneration
Non-performance-related component (cash component)
Performance-related component (cash component)
Performance-related component (share-based payment)
In addition, the company’s share ownership guidelines require Executive Board members to invest a
substantial amount of money in Deutsche Börse AG shares during their term of office.
The individual components of the Executive Board’s remuneration are explained in detail below.
Non-performance-related basic remuneration
The members of the Executive Board receive a fixed base salary, which is payable in twelve equal
monthly instalments. This non-performance-related remuneration comprises approximately 30 per cent
of the total target remuneration payable each year.
Performance-related remuneration components
Performance-related remuneration accounts for approximately 70 per cent of total target remuneration
for the year. It comprises a performance bonus and performance shares.
Performance bonus
The performance bonus is calculated on the basis of Deutsche Börse AG’s Performance Bonus Plan
(PBP). It accounts for roughly two-thirds of Executive Board members’ performance-related remuneration
and for approximately 45 per cent of their total target remuneration. The performance bonus is split
50:50 between a share-based component (the share-based performance bonus) and a cash component.
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Financial statements
Notes
Further infomation
Performance shares
Performance shares are calculated and granted on the basis of the Performance Share Plan (PSP). They
are paid out after the reporting period since they reflect the performance of Deutsche Börse AG’s share
price over a five-year performance period. Performance shares account for approximately one-third of the
performance-related remuneration and for approximately 25 per cent of their total target remuneration.
The criteria used by the Supervisory Board to assess the extent to which Executive Board members have
met their individual targets are described below. These criteria are used to calculate the performance
bonus due to Executive Board members, as well as the number of performance shares to be granted and
their value.
Principles governing the PBP and assessing target achievement for the performance bonus
The extent to which Executive Board members have met their targets for the performance bonus is
determined for each financial year on the basis of the PBP. The basic assessment procedure is based
on two components: two-thirds of the bonus reflects the increase in the adjusted net profit attributable
to Deutsche Börse AG’s shareholders for the remuneration year concerned (hereinafter referred to as
net income), while one-third reflects the Executive Board members’ individual performance.
Once the Supervisory Board has determined the overall extent to which Board members have met their
targets using these two components, it may then review this figure and adjust it using a performance
multiplier; this can be done either for individual Executive Board members or for the Executive Board as
a whole. The total performance bonus is paid out in cash, at the latest together with the regular salary
payment for the calendar month following the approval of Deutsche Börse AG’s consolidated financial
statements for the year. Executive Board members are obliged to invest 50 per cent of the total payout
after tax in Deutsche Börse AG shares, which they have to hold for at least three years. For further
details regarding the share purchase process, please refer to the section entitled “Automated share
purchase designed to fulfil the plan conditions as well as the share ownership guidelines”.
Breakdown of the performance bonus
100% target
achievement
rate
+
2 / 3
growth in
net income
1 / 3
individual targets
+
Performance
multiplier
=
50 %
cash
50 %
shares
3-year holding period
Total paid out
Assessing the adjusted net income growth
Net income growth is calculated independently of the financial planning concerned by comparing the
adjusted net income for the remuneration year with the prior-year figure. The target achievement rate
may range between 0 and 200 per cent, with a decline in net income of 20 per cent or more being
taken to mean a 0 per cent target achievement (floor). Where net income remains stable (i.e. unchanged
year-on-year), this is deemed to represent a target achievement rate of 75 per cent, while a 7.5 per cent
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Financial statements
Notes
Further infomation
increase is equivalent to a target achievement rate of 100 per cent. Net income growth of 15 per cent
or more corresponds to a 200 per cent target achievement rate (cap). This means that there is a stronger
incentive to achieve net income growth of between 7.5 per cent and 15 per cent, because the target
achievement curve is steeper (see the “Assessing net income growth for the performance bonus” chart).
Assessing net income growth for the performance bonus
Target achievement (%)
200
133
100
75
0
Floor
–30
Net income growth (%)
Cap
–20
–10
0
+7.5 +10
+15
+20
+30
Double-digit growth
Assessing individual target achievement
The Supervisory Board sets the individual performance targets for each Executive Board member at the
beginning of the financial year, taking into account both the general corporate strategy and targets that
are particularly relevant to individual Executive Board portfolios (e.g. targets for financial indicators,
customers, employees and control systems). The Supervisory Board assesses the extent to which each
member of the Executive Board has achieved his or her targets after the end of the remuneration year
in question. As with the assessment of net income growth, a range of 0 per cent (floor) to 200 per cent
(cap) has been defined for individual target achievement rates.
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Further infomation
Determining the performance multiplier
The performance multiplier for the performance bonus is used e.g. in the event of mergers, acquisitions
or divestments to allow the Supervisory Board to account for any dilution of equity, or to reflect the
achievement of qualitative or quantitative targets (especially integration parameters) when finally
assessing the extent to which an Executive Board member has achieved his or her overall targets. The
performance multiplier has a minimum value of 0.8 and a maximum value of 1.2; it is multiplied
by the performance assessment for the performance bonus, taking the 200 per cent cap into account.
Principles governing the PSP and assessing target achievement for performance shares
At the beginning of each financial year, the PSP allots a potential number of so-called performance shares
to each member of the Executive Board. The number of initial (phantom) performance shares thus
allotted is determined by dividing the amount of the individual target remuneration (in euros) by
the average Xetra® closing price of Deutsche Börse shares in the calendar month preceding the start of
the performance period (fair value of the performance shares). Target achievement regarding performance
shares is determined after the end of a five-year performance period. The respective target achievements
are assessed on the basis of two components: firstly, the adjusted net income growth over the five-year
period, and, secondly, the relative total shareholder return (TSR) for Deutsche Börse shares compared to
the TSR for the STOXX® Europe 600 Financials index (the industry benchmark) during the same period.
The final number of phantom performance shares is multiplied by the average Xetra closing price for
Deutsche Börse shares in the calendar month preceding the end of the performance period. This results
in the amount to be paid out to purchase the tradeable shares (adjusted for the dividends per share paid
out during the performance period). The rules governing the due dates of the amounts to be paid out
were amended with effect from 1 January 2017. According to the amendment, each payout amount is
generally due in three equal instalments: the first instalment is due at the latest together with the regular
salary payment for the calendar month following the approval of Deutsche Börse AG’s consolidated
financial statements after the end of the performance period in question; the second and third instalments
are due at the corresponding dates in the two years subsequent to the payment of the first instalment. The
members of the Executive Board are obliged to invest the amount paid out after tax in Deutsche Börse AG
shares. For further details regarding the share purchase process, please refer to the section “Automated
share purchase designed to fulfil the plan conditions as well as the share ownership guidelines”.
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Further infomation
The PSP has two variables:
The first variable is the number of performance shares. This is derived from the net income growth and
from the TSR for Deutsche Börse shares in comparison to the TSR of the reference index, over a five-
year period in each case. The maximum number of performance shares is capped at 250 per cent of
the number of performance shares determined at the beginning of the performance period.
The second variable is the change in the share price and the dividend during the performance period;
no cap is applied to the share price.
Principles governing the Performance Share Plan (PSP)
Individual target
remuneration
Avg. share price for
Deutsche Börse
shares 1)
Performance period
Year 1 2) Year 2 Year 3 Year 4 Year 5
Number of
(phantom)
performance
shares granted
50 %
net income growth
50 %
TSR for Deutsche Börse
shares vs index companies
Final number
of (phantom)
performance
shares 3)
+
Avg. share price
for Deutsche
Börse shares 4)
=
Final
payment for
share
purchase 5)
Absolute KPI
Relative KPI
1) In the calendar month preceding the start of the performance period
2) Year in which performance shares are granted
3) Capped at 250 per cent of number granted
4) In the last calendar month of the performance period, including all dividends paid during the performance period
5) Due in three tranches
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Further infomation
Assessing net income for performance shares
The Supervisory Board determines the target achievement rate for adjusted net income growth at the
end of each financial year during the five-year performance period and determines them for the Executive
Board members. The target achievement rate at the end of the performance period in question is
calculated by adding together the annual target achievement rates for each of the five years and dividing
the total produced by five. Target achievement rates may range between 0 and 250 per cent. If net
income declines or remains unchanged year-on-year, this is deemed to represent a target achievement
rate of 0 per cent (floor). Net income growth of 7.5 per cent corresponds to a 100 per cent target
achievement rate. Net income growth of 15 per cent or more corresponds to a 250 per cent
target achievement rate (cap). The target achievement rate increases more strongly for growth rates
between 10 and 15 per cent than for single-digit growth rates, providing a greater incentive for Executive
Board members to aim for double-digit net income growth. See also the “Assessing net income growth
for performance shares” chart.
Assessing net income growth for performance shares
Target achievement (%)
300
250
200
150
133
115
100
50
0
Floor
–10
Cap
–5
0
+5
+7.5 +10
+15
+20
Net income growth (%)
Double-digit growth
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Further infomation
Assessing the TSR performance for Deutsche Börse shares
The TSR performance for Deutsche Börse shares is derived from Deutsche Börse AG’s ranking relative
to the companies included in the STOXX Europe 600 Financials index. The target achievement rates for
Executive Board members can range from 0 per cent (floor) to 250 per cent (cap). A 0 per cent target
achievement rate is assumed where Deutsche Börse AG’s relative five-year TSR falls short of the median,
i.e. where it is lower than that for at least half of the index constituents. Where Deutsche Börse AG’s
TSR has outperformed 60 per cent of index constituents, this represents a target achievement rate of
100 per cent. Where Deutsche Börse AG’s TSR has outperformed at least 75 per cent of index consti-
tuents, this represents a target achievement rate of 175 per cent. The cap of 250 per cent is reached if
Deutsche Börse AG’s TSR ranks in the top 20 per cent of index constituents – in other words, if it is
in the 80th percentile of the index or higher. Please also refer to the “Assessing the total shareholder
return (TSR) for Deutsche Börse shares for performance shares” chart.
Assessing the total shareholder return (TSR) for Deutsche Börse shares for performance shares
Target achievement (%)
300
250
200
175
150
100
50
0
Relative TSR vs index (percentile rank)
50th
60.
70th
75th
80th
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Further infomation
Performance-related remuneration for Executive Board members is predominantly share-based. In
addition, it is largely calculated on a long-term basis, with various target criteria being assessed over
a period of five years (performance shares) or four years (share-based performance bonus: annual
payout and three-year holding period for shares to be invested), respectively (see also the “Basic
remuneration, and annual and long-term incentive components” chart). The cash component of the
performance bonus (annual payout) is the only short-term variable remuneration component.
Basic remuneration, and annual and long-term incentive components
Maximum total remuneration 1)
Target achievement – shares
(calculated annually,
5-year holding period)
Target achievement – shares
(annual payout,
3-year holding period)
Target achievement – cash
(annual payout)
Basic remuneration
(monthly payment)
Hebel für die Anreizkomponenten:
0 bis 250 % jährlich
Hebel für die Anreizkomponenten:
0 bis 200 %
Target remuneration
Performance shares
Performance
bonus
Shares
Cash
Basic remuneration
% = proportion of total target remuneration
Performance-related component (share-based payment)
Performance-related component (cash component)
Non-performance-related component (cash component)
1) No cap on share price performance
Contractual ancillary benefits
The members of the Executive Board receive contractual ancillary benefits such as the provision of an
appropriate company car for business and personal use (with the tax on the pecuniary benefit from
personal use being payable by the member concerned). They also receive taxable contributions towards
private pensions. In addition, the company has taken out insurance cover for them, such as personal
accident insurance and directors & officers (D&O) insurance.
Pension commitments
Retirement benefits
The members of the Executive Board are generally entitled to receive retirement benefits upon reaching
the age of 60, provided that they are no longer in the service of Deutsche Börse AG at that time –
Thomas Book and Andreas Preuss (Executive Board member until 31 October 2018) on reaching the
age of 63. As a matter of principle, the Supervisory Board reviews and determines the pensionable
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Further infomation
income that is used as the basis for retirement benefits. There are two different retirement benefit
systems for Executive Board members. Those members who were appointed for the first time prior to
1 January 2009 or who continue being subject to an existing agreement from prior appointments
within Deutsche Börse Group, receive a defined benefit pension. Executive Board members who were
appointed for the first time after that date receive a defined contribution pension. The pensionable
income and the present value of the pension commitments existing as at 31 December 2018 are
shown in the “Retirement benefits” table.
Defined benefit pension system: After reaching the contractually agreed retirement age, members of
the Executive Board covered by the defined benefit pension system receive a specified percentage
(known as the “replacement rate”) of their individual pensionable income as a pension. A precondition
for this is that the Executive Board member in question served on the Executive Board for at least three
years and was reappointed at least once. The pensionable income is determined and regularly reviewed
by the Supervisory Board. The replacement rate when the Executive Board members’ term of office
began was 30 per cent and it rose by 5 percentage points with each reappointment, up to a maximum
of 50 per cent. From among the active members of the Executive Board, the defined benefit pension
system applies to Mr Book.
Defined contribution pension system: For Executive Board members covered by the defined contribution
pension system, the company makes an annual capital contribution to the scheme for each calendar year
that a member serves on the Executive Board. This contribution is determined by applying an individual
replacement rate to the pensionable income. As with the defined benefit pension system, the pensionable
income is determined and regularly reviewed by the Supervisory Board. The annual capital contributions
calculated in this way bear interest of 3 per cent per annum. The defined contribution pension system
applies to Theodor Weimer, Christoph Böhm, Stephan Leithner, Gregor Pottmeyer and Hauke Stars.
Early retirement pension
Members of the Executive Board who have a defined benefit pension are entitled to an early retirement
pension if the company does not extend their contract, unless the reasons for this are attributable to the
Executive Board member or would justify termination without notice of the Executive Board member’s
contract. The amount of the early retirement pension is calculated in the same way as the retirement
benefits – by applying the applicable replacement rate to the pensionable income. Once again, a
precondition is that the Executive Board member served on the Executive Board for at least three years
and was reappointed at least once. Members of the Executive Board who have a defined contribution
pension are not eligible for an early retirement pension.
Permanent incapacity to work and death benefits
In the event that a member of the Executive Board becomes permanently incapable of working, the
company is entitled to send him or her into retirement. Executive Board members are deemed to be
permanently incapable of working if they are unable to perform their professional activities for more than
six months, and if they are not expected to regain their capacity to work within a further six months.
In such cases, those Executive Board members who have a defined benefit pension plan receive the
amount calculated by applying the applicable replacement rate to the pensionable income. Executive
Board members with a defined contribution pension plan receive the plan assets that have accrued at
the time when the benefits fall due, plus a supplement corresponding to the full annual pension contri-
bution that would have been due in the year in which the Executive Board member left the company’s
service, multiplied by the number of years between the time at which the benefits fell due and the
Executive Board member reaching the age of 60 or 63, as appropriate.
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Further infomation
If an Executive Board member dies, his or her spouse receives 60 per cent and each dependent child
receives 10 per cent of the above amount (25 per cent for full orphans), up to a maximum of 100 per
cent of the pension contribution.
Transitional payments
In the event that an Executive Board member becomes permanently incapable of working, the defined
benefit pension agreements for Executive Board members provide for a transitional payment in addition
to the benefits described above. The amount of this payment corresponds to the target variable
remuneration (performance bonus and performance shares) in the year in which the event triggering the
benefits occurs. It is paid out in two tranches in the two following years. If an Executive Board member
dies, his or her spouse receives 60 per cent of the transitional payment.
Severance payments
In the event that an Executive Board member’s contract of service is terminated early for a reason other
than good cause, any payments made to the Executive Board member may not exceed the remuneration
for the residual term of his or her contract of service or the value of two total annual remuneration
payments (severance cap). The payment is calculated on the basis of the total remuneration for the past
financial year and, where appropriate, the expected total remuneration for the current financial year. The
Supervisory Board may exceed the cap in exceptional, justified cases. Prospective performance shares
will lapse if the company has good cause for an extraordinary termination of the Executive Board
member’s employment or if an Executive Board member terminates his or her contract before the end of
the performance period without good cause and without reaching a mutual agreement.
Change of control
If an Executive Board member is asked to step down within six months of a change of control, he or she
is entitled to a severance payment equal to two total annual remuneration payments or the value of the
residual term of his or her contract of service, where this is less than two years. This entitlement may be
increased to 150 per cent of the severance payment. If an Executive Board member resigns within six
months of the change of control taking effect because his or her position as a member of the Executive
Board is negatively impacted to a significant degree as a result of the change of control, the Supervisory
Board may decide at its discretion whether to grant a severance payment in the above-mentioned
amount. In the case of a change of control, all current performance periods shall end on the day on
which the contract of service is terminated. The corresponding performance shares will be settled early.
Share ownership guidelines
Under Deutsche Börse’s share ownership guidelines, members of the Executive Board are obliged
to continuously hold a multiple of their average basic remuneration in Deutsche Börse AG shares during
their term of office. A multiple of 3 applies to the CEO, and a multiple of 2 to the ordinary Executive Board
members. Shares belonging to the following three categories are used to assess compliance with the
share ownership guidelines: shares purchased from the performance bonus; shares received under the
allocation of performance shares; and shares held in private ownership. In each case, such shareholdings
must be built up over a three-year period. The shareholdings of Mr Pottmeyer and Ms Stars were
evaluated as at 31 December 2018 and were found to be compliant with the share ownership guide-
lines. Such compliance shall be evaluated on 31 December 2020 with regard to the shareholdings of
Mr Weimer and on 31 December 2021 at the latest with regard to the shareholdings of Mr Böhm,
Mr Book and Mr Leithner. For details regarding the procedures for the share purchases, please refer to the
section entitled “Automated share purchase designed to fulfil the plan conditions as well as the share
ownership guidelines”.
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Notes
Further infomation
Automated share purchase designed to fulfil the plan conditions as well as
the share ownership guidelines
For members of the Executive Board, the share purchase agreed upon under the Performance Bonus
Plan and the Performance Share Plan, as well as any share purchase from private funds, has been settled
since 2017 by a service provider appointed by Deutsche Börse AG and assigned by the beneficiary;
the service provider invests the investment amounts independently, i.e. without any influence from
the beneficiary or the company, on behalf of the beneficiary into Deutsche Börse AG shares. The share
purchase takes place during the first four trading days (consecutive calendar days) in June every year.
Caps on the total amount of remuneration
The annual remuneration – comprising fixed salary, variable remuneration components and pension
expenses – is capped at an aggregate gross amount of €9.5 million (total cap) for each Executive Board
member. Ancillary benefits are not included in this amount. Although these are subject to fluctuation,
no extraordinary fluctuations are expected and therefore it is not necessary to include them in the total
cap. In the interest of shareholders, the company will continue to provide competitive incentives for good
personal performance and the company’s sustainable success to Executive Board members, while
preventing any unintended excesses that might otherwise be possible.
Miscellaneous
Post-contractual non-compete clause
A post-contractual non-compete clause applies to members of Deutsche Börse AG’s Executive Board who
were appointed or reappointed to the Board on or after 1 October 2014. This means that the Executive
Board members in question are contractually prohibited from acting for a competing company, or from
undertaking competing activities, for one year following the end of their service. Compensation of 75 per
cent of the member’s final fixed remuneration and 75 per cent of his or her final performance bonus is
payable during the non-compete period. Pension agreement benefits are offset against the compensation.
In addition, 50 per cent of other earnings are deducted if these – together with the compensation –
exceed the Executive Board member’s final remuneration. The company may waive the post-contractual
non-compete clause before the Executive Board member’s contract of service ends.
Sideline activities
Additional appointments assumed, or sideline activities entered into, by individual members of the
Executive Board, require the approval of the full Executive Board and the Chairman of the Supervisory
Board or, in certain cases, of the full Supervisory Board (which has delegated granting such approval
to the Nomination Committee). If a member of the Executive Board receives any remuneration for an
office performed at an affiliate of Deutsche Börse AG, this remuneration is offset against the Executive
Board member’s entitlement to remuneration from Deutsche Börse AG.
Loans to Executive Board members
The company did not grant any loans or advances to members of the Executive Board during financial
year 2018, and there are no loans or advances from previous years to members of the Executive Board.
Payments to former members of the Executive Board
Former members of the Executive Board or their surviving dependants received payments of €4.4 million
in the year under review (2017: €4.3 million). The actuarial present value of the pension obligations as
at the reporting date was €67.5 million in the year under review (2017: €69.9 million).
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Financial statements
Notes
Further infomation
Benefits in connection with the termination of Executive Board appointments
The former Deputy CEO, Mr Preuss, has resigned from his appointment as at 31 October 2018. His
contract of service will terminate on 31 May 2019. For the remainder of his contract of service in 2018
(1 November until 31 December 2018), he received the following remuneration:
Fixed remuneration: €133,300
Performance bonus November to December 2018: €350,700
Performance shares November to December 2018: 1,201
Ancillary benefits: €5,700
The long-term member of the Executive Board Jeffrey Tessler has resigned from his appointment as of
30 June 2018. His contract of service regularly terminated on 31 December 2018. For the remainder
of his contract of service (1 July until 31 December 2018), he received the following remuneration:
Fixed remuneration: €390,300
Performance bonus July to December 2018: €835,000
Number of granted performance shares July to December 2018: 2,859
Ancillary benefits: €123,500
With regard to both Mr Preuss and Mr Tessler, the company has decided to waive the post-contractual
non-compete clause
Remuneration of former CEO Carsten Kengeter
The former Chief Executive Officer, Carsten Kengeter, who stepped down with effect from 31 December
2017, participated in the Co-Performance Investment Plan (CPIP) that was resolved by the Supervisory
Board in 2015. In December 2015, during the investment period provided for in the CPIP, he used
private funds to invest €4,500,000 in Deutsche Börse AG shares (investment shares). In return for his
acquisition of the investment shares, Mr Kengeter was granted 68,987 co-performance shares in the
company; these are basically subject to the same financial criteria as for performance shares, which are
explained in the section entitled “Principles governing the PSP and assessing target achievement for
performance shares”. Thus, the performance of the co-performance shares was measured on the basis of
(i) Deutsche Börse AG’s net income growth and (ii) the ratio of the change in TSR for Deutsche Börse
shares to that for the companies included in the STOXX Europe 600 Financials index. The performance
period for the co-performance shares commenced on 1 January 2015 and will end on 31 December
2019. Notwithstanding any diverging agreement regarding amounts and disbursement dates, their
equivalent will fall due and be disbursed in three instalments, on 31 March 2019 (first prepayment),
31 March 2020 (second prepayment), and 31 March 2021 (final payout). Based on a pro-rata
entitlement of 60 per cent (i.e. three-fifths) for Mr Kengeter’s term of office, the company has recognised
a provision amounting to €9,594,080.40.
For the period from 1 January until the regular termination of his contract of service on 31 March 2018,
Mr Kengeter received the following remuneration:
Fixed remuneration: €375,000
Performance bonus January to March 2018: €704,000
Performance shares January to March 2018: 3,339
Ancillary benefits: €3,700
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Further infomation
Additionally, subject to a set-off of other income (if any), he received the contractually agreed non-
competition compensation in the gross monthly amount of €222,087 to compensate him for the
post-contractual non-compete clause (see also the “Post-contractual non-compete clause” section).
The compensation was paid for the period from 1 April until 31 August 2018 as the company had
waived the non-compete clause’s full term with six months’ notice by declaration dated February 2018.
Prior to Mr Kengeter’s resignation in 2017, no agreement was concluded with him for the implementation
of the overall cap of an aggregate gross remuneration of €9.5 million, as outlined in the “Caps on
the total amount of remuneration” section. In any case, the remuneration paid to Mr Kengeter in 2017
remained below this threshold; the same applies to the remuneration paid in 2018.
Mr Kengeter has no pension claims; his previous claim on pension benefits lapsed when he left the
company.
Amount of Executive Board remuneration
The following tables contain the figures for the individual Executive Board remuneration components
mentioned above for financial years 2018 and 2017. The remuneration awarded to each Executive
Board member in accordance with section 4.2.5 (3) of the German Corporate Governance Code
is shown in the
accordance with section 314 of the HGB is shown in the
“Benefits granted” and “Benefits received” tables. The information disclosed in
“Benefits received” tables.
Retirement benefits
Pensionable
income Replacement rate
Present value/defined benefit
obligation
Pension expense
2018
€ thous.
as at
31 Dec 2018
%
as at
31 Dec 2017
%
as at
31 Dec 2018
€ thous.
as at
31 Dec 2017
€ thous.
2018
€ thous.
2017
€ thous.
Defined benefit
system
Thomas Book1)
Andreas Preuss
Jeffrey Tessler
500.0
800.0
700.0
45.0
50.0
50.0
Total
2,000.0
145.0
Defined contribu-
tion system
Theodor Weimer
1,000.0
Christoph Böhm
Stephan Leithner
Gregor Pottmeyer
Hauke Stars
Total
500.0
500.0
500.0
500.0
40.0
48.0
48.0
48.0
40.0
3,000.0
224.0
.
–
4,829.0
0
12,800.2
11,928.9
4,829.0
4,515.6
356.1
969.0
216.0
0
1,000.2
288.2
22,458.2
16,444.5
1,541.1
1,288.4
560.8
114.1
256.5
3,517.8
1,918.2
6,367.4
0
0
0
3,207.3
1,549.1
4,756.4
677.8
147.9
295.2
300.1
269.6
1,690.6
0
0
0
293.3
225.1
518.4
50.0
45.0
95.0
–
–
–
48.0
36.0
84.0
1) Until 30 June 2018, Thomas Book was remunerated by Eurex Frankfurt AG. Since 1 July 2018, Deutsche Börse AG pays out the total amount of Mr Book’s
remuneration. Thus, Deutsche Börse AG contributes €178.1 thousand to total remuneration for Thomas Book.
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Notes
Further infomation
2018 total expense for share-based payments
(Prior-year figures in brackets)
Theodor Weimer
Christoph Böhm
Thomas Book
Stephan Leithner
Gregor Pottmeyer
Hauke Stars
Carsten Kengeter1)
Andreas Preuss2)
Jeffrey Tessler3)
Total
Carrying
amount as at
the reporting
date
(total)
€ thous.
Expense
recognised
(total)
€ thous.
588.3
–
42.2
–
116.9
–
126.7
–
1,200.7
(532.6)
1,107.9
(491.4)
588.3
–
42.2
–
116.9
–
126.7
–
1,864.4
(663.7)
1,720.3
(612.4)
–
–
(7,965.7)
(12,057.0)
4,789.7
(667.0)
3,801.7
(529.4)
5,620.9
(831.2)
4,461.4
(659.7)
11,774.1
14,541.1
(10,186.1)
(14,824.0)
1) Chief Executive Officer until 31 December 2017
2) Member of the Executive Board until 31 October 2018; expense recognised / carrying amount as at the reporting date relate to full financial year 2018.
3) Member of the Executive Board until 30 June 2018; expense recognised / carrying amount as at the reporting date relate to full financial year 2018.
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Notes
Further infomation
Number of phantom shares
Number of
phantom shares
on the
grant date
Adjustments of
number of
phantom
shares since
the grant date
Theodor Weimer
Tranche 2018
13,353
14,021
Total 2018 tranche
Christoph Böhm
Tranche 2018
959
1,007
Total 2018 tranche
Thomas Book
Tranche 2018
2,654
2,786
Total 2018 tranche
Stephan Leithner
Tranche 2018
2,876
3,020
Gregor Pottmeyer
Hauke Stars
Carsten Kengeter1)
Andreas Preuss2)
Jeffrey Tessler3)
Total 2018 tranche
Tranche 2018
Tranche 2017
Tranche 2016
Total 2016 to 2018 tranches
Tranche 2018
Tranche 2017
Tranche 2016
Total 2016 to 2018 tranches
Tranche 2018
Tranche 2017
Tranche 2016
Tranche 2015
Total 2015 to 2018 tranches
Tranche 2018
Tranche 2017
Tranche 2016
Total 2016 to 2018 tranches
Tranche 2018
Tranche 2017
Tranche 2016
Total 2016 to 2018 tranches
Total 2015 to 2018 tranches
5,752
7,464
7,148
5,307
6,887
6,595
–
–
–
–
7,204
9,348
8,952
5,718
7,420
7,105
6,040
7,175
7,229
5,573
6,621
6,670
–
–
–
–
7,565
8,986
9,053
6,004
7,133
7,185
1) Chief Executive Officer until 31 December 2017
2) Member of the Executive Board until 31 October 2018; the number of phantom shares relates to the balance as at 31 December 2018.
3) Member of the Executive Board until 30 June 2018; the number of phantom shares relates to the balance as at 31 December 2018.
Number of
phantom shares
as at
31 Dec 2018
27,374
27,374
1,966
1,966
5,440
5,440
5,896
5,896
11,792
14,639
14,377
40,808
10,880
13,508
13,265
37,653
–
–
–
–
–
14,769
18,334
18,005
51,108
11,722
14,553
14,290
40,565
210,810
172
172
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Benefits granted
Theodor Weimer
(CEO)
2018
€ thous.
2018
(min)
€ thous.
2018
(max)
€ thous.
1,500.0
1,500.0
1,500.0
22.9
22.9
22.9
1,522.9
1,522.9
1,522.9
1,100.0
2,400.0
0
0
2,200.0
no max.
1,100.0
0
no max.
1,300.0
0
no max.
5,022.9
1,522.9
no max.
677.8
677.8
677.8
5,700.7
2,200.7 9,500.03)
Christoph Böhm
(CIO/COO)
(since 1 November 2018)
2017
€ thous.
2018
€ thous.
2018
(min)
€ thous.
2018
(max)
€ thous.
2017
€ thous.
–
–
–
–
–
–
–
–
–
–
120.0
120.0
120.0
11.4
11.4
11.4
131.4
131.4
131.4
93.3
186.6
0
0
186.6
no max.
93.3
0
no max.
93.3
0
no max.
411.3
131.4
no max.
147.9
147.9
147.9
559.2
279.3 9,500.03)
–
–
–
–
–
–
–
–
–
–
Fixed remuneration
Ancillary benefits
Total
One-year variable remuneration
Cash component performance
bonus (50%)
Multi-year variable remuneration
Share component performance
bonus (50%,
3-year holding period)
1)
Performance shares
(5-year term)
2)
Total
Pension expense
Total remuneration
1) The level of target achievement is capped at 200 per cent. No cap on the share price performance – therefore, no maximum can be stated (no max.). For more
information, please refer to the
“Combined corporate governance statement and corporate governance report” section.
2) The target achievement rates for net income and total shareholder return, and for the maximum number of performance shares are all capped at 250 per cent. No
cap on the share price performance – therefore, no maximum can be stated for the individual remuneration components (no max.). For more information, please
refer to the
“Combined corporate governance statement and corporate governance report” section.
3) The total remuneration (excluding ancillary benefits) is capped at €9.5 million.
Benefits granted
Fixed remuneration
Ancillary benefits
Total
One-year variable remuneration
Cash component performance
bonus (50%)
Multi-year variable remuneration
Share component performance
bonus (50%,
3-year holding period)
1)
Performance shares
(5-year term)
2)
Total
Pension expense
Total remuneration
Thomas Book
(since 1 July 2018)
Stephan Leithner
(since 2 July 2018)
2018
€ thous.
325.0
15.74)
2018
(min)
€ thous.
2018
(max)
€ thous.
325.0
15.74)
325.0
15.74)
340.7
340.7
340.7
258.3
516.6
0
0
516.6
no max.
258.3
0
no max.
258.3
0
no max.
1,115.6
340.7
no max.
356.1
356.1
356.1
1,471.7
696.8 9,500.03)
2017
€ thous.
2018
€ thous.
2018
(min)
€ thous.
2018
(max)
€ thous.
2017
€ thous.
–
–
–
–
–
–
–
–
–
–
360.0
360.0
360.0
5.7
5.7
5.7
365.7
365.7
365.7
280.0
560.0
0
0
560.0
no max.
280.0
0
no max.
280.0
0
no max.
1,205.7
365.7
no max.
295.2
295.2
295.2
1,500.9
660.9 9,500.03)
–
–
–
–
–
–
–
–
–
–
4) Until 30 June 2018, Thomas Book was remunerated by Eurex Frankfurt AG. Since 1 July 2018, Deutsche Börse AG pays out the total amount of Mr Book’s
remuneration. Thus, Deutsche Börse AG contributes €178.1 thousand to total remuneration for Thomas Book.
173
173
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Benefits granted
Gregor Pottmeyer
(CFO)
Hauke Stars
(Director of Labour Relations)
2018
€ thous.
2018
(min)
€ thous.
2018
(max)
€ thous.
2017
€ thous.
2018
€ thous.
2018
(min)
€ thous.
2018
(max)
€ thous.
2017
€ thous.
720.0
720.0
720.0
720.0
650.0
650.0
650.0
650.0
29.2
29.2
29.2
30.5
24.9
24.9
24.9
24.8
749.2
749.2
749.2
750.5
674.9
674.9
674.9
674.8
560.0
1,120.0
0
0
1,120.0
560.0
516.7
no max.
1,120.0
1,033.4
0
0
1,033.4
516.7
no max.
1,033.4
560.0
0
no max.
560.0
516.7
0
no max.
516.7
560.0
0
no max.
560.0
516.7
0
no max.
516.7
2,429.2
749.2
no max.
2,430.5
2,225.0
674.9
no max.
2,224.9
300.1
300.1
300.1
293.3
269.6
269.6
269.6
225.1
2,729.3
1,049.3 9,500.03)
2,723.8
2,494.6
944.5 9,500.03)
2,450.0
Fixed remuneration
Ancillary benefits
Total
One-year variable remuneration
Cash component performance
bonus (50%)
Multi-year variable remuneration
Share component performance
bonus (50%,
3-year holding period)
1)
Performance shares
(5-year term)
2)
Total
Pension expense
Total remuneration
1) The level of target achievement is capped at 200 per cent. No cap on the share price performance – therefore, no maximum can be stated (no max.). For more
information, please refer to the
“Combined corporate governance statement and corporate governance report” section.
2) The target achievement rates for net income and total shareholder return, and for the maximum number of performance shares are all capped at 250 per cent. No
cap on the share price performance – therefore, no maximum can be stated for the individual remuneration components (no max.). For more information, please
refer to the
“Combined corporate governance statement and corporate governance report” section.
3) The total remuneration (excluding ancillary benefits) is capped at €9.5 million.
Benefits granted
Fixed remuneration
Ancillary benefits
Total
One-year variable remuneration
Cash component performance
bonus (50%)
Multi-year variable remuneration
Share component performance
bonus (50%,
3-year holding period)
1)
Performance shares
(5-year term)
2)
Total
Pension expense
Total remuneration
Andreas Preuss4)
(Deputy CEO until 31 October 2018)
Jeffrey Tessler5)
(until 30 June 2018)
2018
€ thous.
2018
(min)
€ thous.
2018
(max)
€ thous.
2017
€ thous.
2018
€ thous.
2018
(min)
€ thous.
2018
(max)
€ thous.
2017
€ thous.
666.7
666.7
666.7
800.0
390.3
390.3
390.3
780.6
28.3
28.3
28.3
33.0
104.1
104.1
104.1
18.2
695.0
695.0
695.0
833.0
494.4
494.4
494.4
798.8
584.5
1,169.0
0
0
1,169.0
701.4
no max.
1,402.8
278.4
556.7
0
0
556.7
556.7
no max.
1,113.4
584.5
0
no max.
701.4
278.4
0
no max.
556.7
584.5
0
no max.
701.4
278.4
0
no max.
556.7
2,448.5
695.0
no max.
2,937.2
1,329.5
494.4
no max.
2,468.9
807.5
807.5
807.5
1,000.2
108.0
108.0
108.0
288.2
3,256.0
1,502.5 9,500.03)
3,937.4
1,437.5
602.4 9,500.03)
2,757.1
4) Deputy CEO until 31 October 2018, contract of service will terminate on 31 May 2019.
5) Member of the Executive Board until 30 June 2018, contract of service terminated on 31 December 2018.
174
174
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Benefits received
Theodor Weimer
(CEO)
Christoph Böhm
(CIO/COO
since 1 November 2018)
Thomas Book
(since 1 July 2018)
Fixed remuneration
Ancillary benefits 1)
Total
One-year variable remuneration
Cash component performance bonus (50%)
Multi-year variable remuneration
Share component performance bonus
(50%, 3-year holding period)
Performance shares (5-year term)
Total
Pension expense
Total remuneration (German Corporate
Governance Code)3)
Plus performance shares
Less variable share component
Less pension expense
Total remuneration (section 314 of the HGB)
2018
€ thous.
1,500.0
22.9
1,522.9
2,117.5
2,117.5
2,117.5
–
5,757.9
677.8
6,435.7
1,300.0
–
– 677.8
7,057.9
Number of phantom shares (no-par value share)4)
13,353
2017
€ thous.
2018
€ thous.
2017
€ thous.
2018
€ thous.
2017
€ thous.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
120.0
11.4
131.4
155.6
155.6
155.6
–
442.6
147.9
590.5
93.3
–
– 147.9
535.9
959
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
325.0
15.72)
340.7
439.2
439.2
439.2
–
1,219.1
356.1
1,575.2
258.3
–
– 356.1
1,477.4
2,654
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1) Ancillary benefits (other benefits) comprise salary components such as taxable contributions towards private pensions, company car arrangements, travel
arrangements, and expenses for tax and legal advice.
2) Until 30 June 2018, Thomas Book was remunerated by Eurex Frankfurt AG. Since 1 July 2018, Deutsche Börse AG pays out the total amount of Mr Book’s
remuneration. Thus, Deutsche Börse AG contributes €178.1 thousand to total remuneration for Thomas Book.
3) The total remuneration (excluding ancillary benefits) is capped at €9.5 million.
4) The number of prospective performance shares for the performance period determined at the 2018 grant date is calculated by dividing the target amount by the
average share price (Xetra® closing price) for Deutsche Börse shares in December 2017 (€97.36).
175
175
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Benefits received
Stephan Leithner
(since 2 July 2018)
Gregor Pottmeyer
(CFO)
Hauke Stars
(Director of Labour
Relations)
2018
€ thous.
2017
€ thous.
2018
€ thous.
2017
€ thous.
2018
€ thous.
2017
€ thous.
Fixed remuneration
Ancillary benefits 1)
Total
One-year variable remuneration
Cash component performance bonus (50%)
Multi-year variable remuneration
Share component performance bonus
(50%, 3-year holding period)
Performance shares (5-year term)
Total
Pension expense
Total remuneration (German Corporate
Governance Code)2)
Plus performance shares
Less variable share component
Less pension expense
Total remuneration (section 314 of the HGB)
360.0
5.7
365.7
476.0
476.0
476.0
–
1,317.7
295.2
1,612.9
280.0
–
– 295.2
1,597.7
Number of phantom shares (no-par value share)3)
2,876
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
720.0
29.2
749.2
720.0
30.5
750.5
650.0
24.9
674.9
650.0
24.8
674.8
856.8
856.8
604.8
604.8
759.5
759.5
558.0
558.0
856.8
604.8
759.5
558.0
–
–
–
–
2,462.8
1,960.1
2,193.9
1,790.8
300.1
293.3
269.6
225.1
2,762.9
2,253.4
2,463.5
2,015.9
560.0
560.0
516.7
516.7
–
–
–
–
– 300.1
– 293.3
– 269.6
– 225.1
3,022.8
2,520.1
2,710.6
2,307.5
5,752
7,464
5,307
6,887
1) Ancillary benefits (other benefits) comprise salary components such as taxable contributions towards private pensions, company car arrangements, travel
arrangements, and expenses for tax and legal advice.
2) The total remuneration (excluding ancillary benefits) is capped at €9.5 million.
3) The number of prospective performance shares for the performance period determined at the 2018 grant date is calculated by dividing the target amount by the
average share price (Xetra® closing price) for Deutsche Börse shares in December 2017 (€97.36).
176
176
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Benefits received
Fixed remuneration
Ancillary benefits 1)
Total
Andreas Preuss 4)
(Deputy CEO
until 31 October 2018)
Jeffrey Tessler 5)
(until 30 June 2018)
Total
2018
€ thous.
2017
€ thous.
2018
€ thous.
2017
€ thous.
2018
€ thous.
20176)
€ thous.
666.7
28.3
695.0
800.0
33.0
833.0
390.3
104.1
494.4
780.6
4,732.0
2,950.6
18.2
242.2
106.5
798.8
4,974.2
3,057.1
One-year variable remuneration
Cash component performance bonus (50%)
Multi-year variable remuneration
Share component performance bonus
(50%, 3-year holding period)
876.7
876.7
757.5
757.5
417.5
417.5
601.2
601.2
6,098.8
2,521.5
6,098.8
2,521.5
876.7
757.5
417.5
601.2
6,098.8
2,521.5
Performance shares (5-year term)
–
–
–
–
–
–
Total
2,448.4
2,348.0
1,329.4
2,001.2
17,171.8
8,100.1
Pension expense
807.5
1,000.2
108.0
288.2
2,962.2
1,806.8
Total remuneration (German Corporate
Governance Code)2)
3,255.9
3,348.2
1,437.4
2,289.4
20,134.0
9,906.9
Plus performance shares
Less variable share component
584.5
701.4
278.4
556.7
3,871.2
2,334.8
–
–
–
–
–
–
Less pension expense
– 807.5
– 1,000.2
– 108.0
– 288.2
– 2,962.2
– 1,806.8
Total remuneration (section 314 of the HGB)
3,032.9
3,049.4
1,607.8
2,557.9
21,043.0
10,434.9
Number of phantom shares (no-par value share)3)
6,003
9,348
2,859
7,420
39,763
31,119
1) Ancillary benefits (other benefits) comprise salary components such as taxable contributions towards private pensions, company car arrangements, travel
arrangements, and expenses for tax and legal advice.
2) The total remuneration (excluding ancillary benefits) is capped at €9.5 million.
3) The number of prospective performance shares for the performance period determined at the 2018 grant date is calculated by dividing the target amount by the
average share price (Xetra® closing price) for Deutsche Börse shares in December 2017 (€97.36).
4) Deputy CEO until 31 October 2018, contract of service will terminate on 31 May 2019.
5) Member of the Executive Board until 30 June 2018, contract of service terminated on 31 December 2018.
6) Prior-year figures were adjusted due to the resignation of Carsten Kengeter (former Chief Executive Officer); thus, they do not match the figures published in the
previous year.
177
177
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Supervisory Board remuneration
The members of the Supervisory Board receive fixed annual remuneration of €70,000. The Chairman
receives remuneration of €170,000 and the Deputy Chairman receives €105,000. Members of
Supervisory Board committees receive additional fixed annual remuneration of €30,000 for each
committee position they hold. The relevant amount for members of the Audit Committee is €35,000. The
remuneration paid to committee chairs is €40,000, or €60,000 in the case of the Chairman of the Audit
Committee. If a Supervisory Board member belongs to several Supervisory Board committees, only
their work on a maximum of two committees (the two most highly remunerated ones) is remunerated.
Supervisory Board members who only hold office for part of the financial year receive one-twelfth of
the fixed annual remuneration and, if applicable, of the remuneration payable for their membership of
committees, for each month or part-month in which they are members.
Members of the Supervisory Board or a Supervisory Board committee receive an attendance fee of
€1 thousand for each Board or committee meeting that they attend in person, either as a member or
as a guest. Where two or more meetings are held on the same day or on consecutive days, the
attendance fee is only paid once.
Remuneration paid to members of the Supervisory Board for advisory and agency services
No agreements for advisory and agency services had been entered into in the reporting period with
members of the Supervisory Board, or with companies that employ members of the Supervisory Board
of Deutsche Börse AG or in which Supervisory Board members hold an interest.
178
178
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Supervisory Board remuneration1)
Joachim Faber (Chairman)
Nadine Absenger3)
Ann-Kristin Achleitner
Markus Beck4)
Richard Berliand (Deputy Chairman until 16 May 2018)
Karl-Heinz Flöther
Marion Fornoff5)
Hans-Peter Gabe5)
Craig Heimark6)
Martin Jetter7)
Susann Just-Marx4)
Achim Karle8)
Cornelis Kruijssen4)
Barbara Lambert3)
Monica Mächler6)
Joachim Nagel7)
Florian Rodeit5) 9)
Carsten Schäfer8)
Erhard Schipporeit6)
2018
2017
20182)
€ thous.
20172)
€ thous.
full year
full year
16 May – 31 Dec
–
full year
full year
15 Aug – 31 Dec
full year
full year
1 Jan – 15 Aug
1 Jan – 15 Aug
1 Jan – 16 May
24 May – 31 Dec
15 Aug – 31 Dec
28 Aug – 31 Dec
15 Aug – 31 Dec
16 May – 31 Dec
–
full year
full year
full year
full year
full year
–
–
–
–
–
1 Jan – 16 May
full year
24 May – 31 Dec
16 May – 15 Aug
28 Aug – 31 Dec
1 Jan – 16 May
–
–
–
full year
full year
–
full year
full year
260.0
95.0
118.5
55.8
168.3
146.0
84.2
86.8
45.7
89.7
53.2
53.2
53.2
114.7
61.3
102.7
45.3
53.2
71.7
172.7
72.7
61.3
118.5
266.0
0
142.0
0
196.0
149.0
114.0
112.0
108.0
0
0
0
0
0
146.0
0
0
0
172.0
145.0
0
154.0
138.0
2,183.7
1,842.0
Jutta Stuhlfauth (Deputy Chairperson since 16 May 2018)
full year
Gerd Tausendfreund3)
Johannes Witt6)
Amy Yip
Total
16 May – 31 Dec
1 Jan – 16 May
full year
1) The recipient of the remuneration is determined individually by the members of the Supervisory Board.
2) Remuneration including individual attendance fee
3) Elected to the Supervisory Board on 16 May 2018
4) Elected to the Supervisory Board on 15 August 2018
5) Left the Supervisory Board on 15 August 2018
6) Left the Supervisory Board on 16 May 2018
7) Elected to the Supervisory Board on 16 May 2018, subject to the registration of the amendment to the Articles of Association (24 May 2018)
8) Appointed to the Supervisory Board by court order on 28 August 2018
9) Appointed to the Supervisory Board by court order on 16 May 2018
179
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Notes
Further infomation
Combined corporate governance statement and corporate governance report
Deutsche Börse Group assigns great importance to the principles of good corporate governance and
control. In this statement, we report on corporate governance at Deutsche Börse AG in accordance with
section 3.10 of the Deutscher Corporate Governance Kodex (the “Code”, German Corporate Governance
Code). Moreover, this statement contains the corporate governance statement pursuant to sections 289f
and 315d of the Handelsgesetzbuch (HGB, German Commercial Code).
Declaration of Compliance pursuant to section 161 of the Aktiengesetz
(AktG, German Stock Corporation Act)
On 6 December 2018, the Executive Board and Supervisory Board of Deutsche Börse AG issued the
following Declaration of Compliance:
“Declaration of Compliance by the Executive Board and the Supervisory Board of Deutsche Börse
AG regarding the German Corporate Governance Code in accordance with section 161 of the
German Stock Corporation Act
The following Declaration of Compliance refers to the most recent version of the German Corporate
Governance Code (the Code) as amended on 7 February 2017 and published in the German Federal
Gazette on 24 April 2017.
The Executive Board and Supervisory Board of Deutsche Börse AG declare that the company has
complied with the recommendations of the Code almost without exception and will continue to comply
with them with only a few deviations, as set out in detail below:
1. Agreement of severance payment caps when concluding Executive Board contracts
(section 4.2.3 (4) of the Code)
Severance payment caps have been agreed upon in all current contracts with the members of the
Executive Board to ensure that the recommendation of section 4.2.3 (4) of the Code is complied with
and will continue to be complied with. As in the past, however, the Supervisory Board reserves
the right to deviate from section 4.2.3 (4) of the Code in the future under certain circumstances. The
Supervisory Board is of the opinion that a deviation may become necessary in extraordinary cases.
2. Caps on the total amount of remuneration (section 4.2.3 (2) (sentence 6) of the Code) and
disclosure in the remuneration report (section 4.2.5 (3) of the Code)
Section 4.2.3 (2) (sentence 6) of the Code recommends that the amount of management remuneration
be capped, both as regards variable components and in the aggregate. Deutsche Börse AG has deviated
and will continue to deviate from this recommendation.
The annual remuneration, comprising fixed and variable remuneration components and pension
benefits, has been capped at €9.5 million (total cap) for each member of the Executive Board. Ancillary
benefits are not included in this amount. Although these are subject to fluctuation, no extraordinary
fluctuations are expected and therefore it is not necessary to include them in the total cap.
The long-term variable remuneration components under the remuneration system are share-based.
Even though a cap is provided in relation to the number of shares granted, no dedicated cap is foreseen
on the maximum achievable bonus amount, as there is no cap on share price performance. However,
extraordinary developments are sufficiently reflected in the total cap.
180
180
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Notes
Further infomation
Section 4.2.5 (3) (sub-section 1) of the Code recommends, inter alia, presenting the maximum
achievable remuneration for variable remuneration components in the remuneration report. As there is
no dedicated cap in relation to the share-based variable remuneration components, the maximum
achievable remuneration cannot be presented as recommended in section 4.2.5 (3) (sub-section 1)
of the Code.
3. Composition of the Nomination Committee (section 5.3.3 of the Code)
Section 5.3.3 of the Code recommends that the Supervisory Board forms a Nomination Committee
composed exclusively of shareholder representatives. Section 4b of the Börsengesetz (BörsG, German
Exchange Act) provides that the duties of the Nomination Committee include assisting the Supervisory
Board of Deutsche Börse AG in selecting candidates for the Executive Board. Since this task, in
particular, is not meant to be performed by the shareholder representatives on the Supervisory Board
only, as has been common practice, there are employee representatives on the Nomination Committee
as well. However, it will be ensured that the Supervisory Board nominees proposed to the Annual
General Meeting are determined solely by the shareholder representatives on the Committee.”
The annual Declaration of Compliance pursuant to section 161 of the AktG, as well as the Declarations
of Compliance for the past five years, are available on our website
declcompliance.
www.deutsche-boerse.com/
Disclosures on suggestions of the Code
Deutsche Börse AG also largely complies with the suggestions of the Code and deviates only regarding
the following aspects:
In accordance with section 4.1.3 sentence 3 of the Code, employees shall be given the opportunity
to report suspected breaches of the law within the company in a protected manner; third parties should
also be given this opportunity. Deutsche Börse AG has implemented a whistleblowing system for its
employees in accordance with the recommendation in section 4.1.3 sentence 3 of the Code. This whistle-
blowing system is also open to external service providers. However, Deutsche Börse deviates otherwise
from the suggestion of also giving third parties the opportunity of reporting such suspicions mainly given
the fact that, as far as Deutsche Börse is concerned, other such third parties are regular market
participants who have other options at their disposal for reporting suspicions without being bound by
fiduciary duties under employment law.
In accordance with section 4.2.3 (2) sentence 9 of the Code, early disbursements of multiple-year,
variable remuneration components should not be permitted. While Deutsche Börse AG adheres to this
suggestion in principle; it reserves the right to deviate in extraordinary circumstances, e.g. in the
event of an Executive Board member’s inability to work, disease or death. The company also reserves
the right to diverge from this procedure in other extraordinary cases such as change-of-control events.
Information on corporate governance practices
Conduct policies
Deutsche Börse Group’s global orientation means that binding policies and standards of conduct must
apply at each of the Group’s locations around the world. Specifically, the main objectives of these
principles for collaboration are to ensure responsibility, respect and mutual esteem. The Group also
adheres to these principles when implementing its business model. Communications with clients,
investors, employees and the general public are based on timely information and transparency. In
addition to focusing on generating profits, Deutsche Börse Group’s business is managed in accordance
with recognised standards of social responsibility.
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Code of business conduct for employees
Acting responsibly means having values that are shared by all employees throughout the Group. In
2017, Deutsche Börse AG’s Executive Board adopted an extended code of business conduct. This
document, which is applicable throughout the Group, defines the foundations of key ethical and legal
standards, including – but not limited to – the following topics:
Confidentiality and the handling of sensitive information
Conflicts of interest
Personal account dealing, as well as the prevention of insider dealing and market manipulation
Company resources and assets
Combat of bribery and corruption
Risk management
Whistleblowers
Environmental awareness
Equal opportunities and protection against undesirable behaviour
The code of business conduct applies to members of the Executive Board, all other executives and all
employees of Deutsche Börse Group. In addition to specifying concrete rules, the code of business
conduct provides general guidance as to how employees can contribute to implementing the defined
values in their everyday working life. The goal of the code of business conduct is to provide guidance on
working together in the company on a day-to-day basis, to help resolve any conflicts and to resolve
ethical and legal challenges. All newly hired employees receive the code of business conduct as part
of their employment contract documentation. Staff who were already in the company prior to the
introduction of the code of business conduct were familiarised with the guidelines in 2018 through an
online training course, following which they had to confirm having received the document and having
understood its content. The code of business conduct is an integral part of the relationship between
employer and employees at Deutsche Börse Group. Breaches may lead to disciplinary action. The
document is available on www.deutsche-boerse.com > Sustainability > Set an example > Employees >
Guiding principles.
Code of conduct for suppliers and service providers
Deutsche Börse Group not only requires its management and staff to adhere to high standards – it
demands the same from its suppliers and service providers. The code of conduct for suppliers and
service providers requires them to respect human rights and employee rights and comply with minimum
standards. Implementing a resolution of the Executive Board, the code of conduct for suppliers was
amended in 2016 to include the requirements set out in the UK Modern Slavery Act, applicable to all
corporations conducting business in the United Kingdom. Most suppliers have signed up to these
conditions; all other key suppliers have made voluntary commitments, which correspond to, or in fact,
exceed Deutsche Börse Group’s standards. Service providers and suppliers must sign this code or enter
into an equivalent voluntary commitment before they can do business with Deutsche Börse Group.
The code of conduct for suppliers is reviewed regularly in the light of current developments and amended
if necessary. It is available on Deutsche Börse Group’s website
Sustainability > Set an example > Procurement management.
www.deutsche-boerse.com >
Values
Deutsche Börse Group’s business activities are based on the legal frameworks and ethical standards of
the different countries in which it operates. A key way in which the Group underscores the values it
considers important is by joining initiatives and organisations that advocate generally accepted ethical
standards. Relevant memberships are as follows:
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www.unglobalcompact.org: this voluntary business initiative
United Nations Global Compact
established by the United Nations aims to achieve a more sustainable and more equitable global
economy. At the heart of the compact are ten principles covering the areas of human rights,
labour, environment protection and anti-corruption. Deutsche Börse Group has submitted annual
communications on progress (COPs) on its implementation of the UN Global Compact since 2009.
www.diversity-charter.com: as a signatory to the Diversity Charter, the company
Diversity Charter
has committed to acknowledging, respecting and promoting the diversity of its workforce, customers and
business associates – irrespective of their age, gender, disability, race, religion, nationality, ethnic
background, sexual orientation or identity.
International Labour Organisation
responsible for drawing up and overseeing international labour standards; it brings together representatives
of governments, employees and employers to jointly shape policies and programmes. Deutsche
Börse Group has signed up to the ILO’s labour standards and hence has agreed to abide by them.
www.ilo.org: this UN agency is the international organisation
www.deutsche-boerse.com/frankfurt-declaration: the Frankfurt Declaration
Frankfurt Declaration
demonstrates the signatories’ intention to define the framework conditions for sustainable finance and
to put concrete initiatives in place in the Frankfurt financial centre. These are directed towards the
identification of innovative business areas and the responsible handling of risks, among other things.
The potential of sustainable finance infrastructures must therefore be fully encouraged in order to
support positive economic and social development founded on the unconditional protection of the
natural basis of life.
Sector-specific policies
Deutsche Börse Group’s pivotal role in the financial sector requires that it handles information – and
especially sensitive data and facts – responsibly. A number of rules are in force throughout the Group to
ensure that employees comply with this. These cover both legal requirements and special policies
applicable to the relevant industry segments, such as the whistleblowing system and risk and control
management policies.
Whistleblowing system
Deutsche Börse Group’s whistleblowing system gives employees and external service providers an
opportunity to report non-compliant behaviour. The Group has engaged the auditing and consulting
company Deloitte to act as an external ombudsman and receive any such information submitted by
phone or e-mail. Whistleblowers’ identities are not revealed to Deutsche Börse Group.
Risk and control management policies
Functioning control systems are an important part of stable business processes. Deutsche Börse Group’s
enterprise-wide control systems are embedded in an overarching framework. This comprises, among
other things, the legal requirements, the recommendations of the German Corporate Governance Code,
international regulations and recommendations and other company-specific policies. The executives
responsible for the different elements of the control system are in close contact with each other and with
the Executive Board and report regularly to the Supervisory Board or its committees. Equally, the Group
has an enterprise-wide risk management system that covers and provides mandatory rules for functions,
processes and responsibilities. Details of the internal control system and risk management at Deutsche
Börse Group can be found in the
“Internal management” and “Risk report” sections.
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Working practices of the Executive Board and the Supervisory Board
An important fundamental principle of the German Stock Corporation Act is the dual board system –
which assigns separate, independent responsibilities to the Executive Board and the Supervisory Board.
These responsibilities and their implementation at Deutsche Börse AG are set out in detail in the
following paragraphs.
Both boards perform their duties in the interests of the company and with the aim of achieving a sustainable
increase in value. Their actions are based on the principle of responsible corporate governance. Therefore,
Deutsche Börse AG’s Executive Board and Supervisory Board work closely together in a spirit of mutual trust,
with the Executive Board providing the Supervisory Board with comprehensive information on the course of
business in a regular and timely manner. In addition, the Executive Board regularly informs the Supervisory
Board concerning all issues relating to corporate planning, the company’s business performance, the risk
situation, risk management, compliance and the company’s control systems. The Chief Executive Officer
reports to the Supervisory Board without undue delay, orally or in writing, on matters that are of special
importance to the company. The strategic orientation of the company is examined in detail and agreed upon
with the Supervisory Board. Implementation of the relevant measures is discussed at regular intervals.
In particular, the chairmen of the two boards maintain regular contact and discuss the company’s strategy,
business performance and risk management. The Supervisory Board may also request reports from the
Executive Board at any time, especially on matters and business transactions at Deutsche Börse AG and
subsidiaries that could have a significant impact on Deutsche Börse AG’s position.
Deutsche Börse AG’s Executive Board
The Executive Board manages Deutsche Börse AG and Deutsche Börse Group; it had five members at
the beginning of the reporting period and six since 1 July 2018. The main duties of the Executive Board
include defining the Group’s corporate goals and strategic orientation, managing and monitoring
the operating units, as well as establishing and monitoring an efficient risk management system. The
Executive Board is responsible for preparing the consolidated and annual financial statements of Deutsche
Börse AG, as well as for producing financial information during the course of the year. In addition, it
must ensure the company’s compliance with legal requirements and official regulations.
The members of the Executive Board are jointly responsible for all aspects of management. Irrespective
of this collective responsibility, the individual members manage the company’s business areas assigned
to them in the Executive Board’s schedule of responsibilities independently and are personally
responsible for them. In addition to the business areas, the functional areas of responsibility are that of
the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and the Chief Information Officer/
Chief Operating Officer (CIO/COO). The business areas cover the operating business units, such as the
company’s cash market activities, the derivatives business, securities settlement and custody and the
market data business. Details can be found in the
Organisational structure” section.
“Overview of Deutsche Börse Group –
Further details of the Executive Board’s work are set out in the bylaws that the Supervisory Board has
resolved for the Executive Board. Among other things, these list issues that are reserved for the entire
Executive Board, special measures requiring the approval of the Supervisory Board, other procedural
details and the arrangements for passing resolutions. The Executive Board holds regular meetings; these
are convened by the CEO, who coordinates the Executive Board’s work. Any Executive Board member
can require a meeting to be convened. In accordance with its bylaws, the entire Executive Board
normally takes decisions on the basis of resolutions passed by a simple majority of the members voting
on them in each case. If a vote is tied, the CEO has the casting vote.
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Further infomation
More information on the Executive Board, its composition, members’ individual appointments and
www.deutsche-boerse.com/execboard.
biographies can be found at
Deutsche Börse AG’s Supervisory Board
The Supervisory Board supervises and advises the Executive Board in its management of the company.
It supports the Executive Board in significant business decisions and provides assistance on strategically
important issues. The Supervisory Board has specified measures requiring its approval in the bylaws for
the Executive Board. In addition, the Supervisory Board is responsible for appointing the members of the
Executive Board, deciding on their total remuneration, examining Deutsche Börse AG’s consolidated and
annual financial statements and the combined management report including the combined non-financial
statement. Details of the Supervisory Board’s work during the 2018 financial year can be found in the
report of the Supervisory Board.
At the beginning of the year under review, the Supervisory Board consisted of twelve members: two-thirds
of its members were shareholder representatives and one-third were employee representatives. Since
the 2018 Annual General Meeting, the Supervisory Board has parity co-determination, which means
it consists of an equal number of shareholder representatives and employee representatives. This
composition reflects the fact that the number of Deutsche Börse’s employees in Germany has meanwhile
exceeded the threshold of 2,000 employees, as referred to in section 1 (1) no. 2 of the Mitbestimmungs-
gesetz (MitbestG, German Co-determination Act). The Annual General Meeting passed a resolution to
enlarge the Supervisory Board, resulting in amendments to the Articles of Association and the number of
members on the Supervisory Board bringing it to a total of 16 members as at 24 May 2018.
The Supervisory Board holds at least six regular meetings every year. In addition, extraordinary meetings
are held as required. The committees also hold regular meetings. Unless mandatory statutory provisions
or the Articles of Associations call for a different procedure, the Supervisory Board passes its resolutions
by a simple majority. If a vote is tied, the Chairman has the casting vote. In addition, the Supervisory
Board regularly reviews the structure, size, composition, performance and the efficiency of the work of
the Executive and Supervisory Boards, discusses potential areas for improvement and resolves suitable
measures, where necessary.
Supervisory Board committees
The Supervisory Board’s goal in establishing committees is to improve the efficiency of its work by
examining complex matters in smaller groups that prepare them for the plenary meeting of the
Supervisory Board. Additionally, the Supervisory Board has delegated individual decision-making powers
to the committees, to the extent that this is legally permissible. The Supervisory Board had six
committees at the beginning of the reporting period. In accordance with section 4b (5) of the BörsG,
the Supervisory Board resolved to merge the Nomination and the Personnel Committees into a joint
committee, with effect from 3 January 2018. As provided for in the MitbestG, the Supervisory Board
established a Mediation Committee on 16 May 2018, while also resolving to establish a Chairman’s
Committee for time-sensitive affairs. For details on the committees, please refer to the
Board committees during 2018: composition and responsibilities” tables. Their individual responsibilities
are outlined in the Supervisory Board’s bylaws. The committees’ rules of procedure correspond to those
for the plenary meeting of the Supervisory Board. Details of the current duties and members of the
individual committees can be found online at
www.deutsche-boerse.com/supervboard > Committees.
“Supervisory
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Further infomation
The chairmen of the individual committees report to the plenary meeting about the subjects addressed
and resolutions passed in the committee meetings. Information on the Supervisory Board’s concrete
work and meetings during the reporting period can be found in the
report of the Supervisory Board.
More information on the Supervisory Board and its committees, the individual members and their
appointments and biographies, can be found at:
www.deutsche-boerse.com/supervboard.
Supervisory Board committees during 2018: composition and responsibilities
Audit Committee
Members
Composition
Erhard Schipporeit (Chairman)
At least four members who are elected by the Supervisory Board
(until 16 May 2018)
Barbara Lambert
(Chairperson) (since 16 May 2018)
Nadine Absenger1)
(since 16 May 2018)
Markus Beck1) (since 4 Sep 2018)
Karl-Heinz Flöther
Hans-Peter Gabe1)
Prerequisites for the chair of the committee: the person concerned must be independent and must
have specialist knowledge and experience in applying accounting principles and internal control
processes (financial expert)
Persons who cannot chair the committee: the Chairman of the Supervisory Board; former
members of the company’s Executive Board whose appointment ended less than two years ago
Responsibilities
Deals with issues relating to the preparation of the annual budget and financial topics, particularly
(16 May – 15 Aug 2018)
capital management
Monica Mächler (until 16 May 2018)
Deals with issues relating to the adequacy and effectiveness of the company’s control systems – in
Joachim Nagel (since 24 May 2018)
Jutta Stuhlfauth1) (since 4 Sep 2018)
Johannes Witt1) (until 16 May 2018)
particular, to risk management, compliance and internal audit
Audit reports
Deals with accounting issues, including oversight of the accounting and reporting process
Half-yearly financial reports, plus any quarterly financial reports, if applicable
Examines the annual financial statements, the consolidated financial statements and the combined
management report (including the combined non-financial statement), discusses the audit report
with the external auditors and prepares the Supervisory Board’s resolutions adopting the annual
financial statements and approving the consolidated financial statements, as well as the resolution
on the Executive Board’s proposal on the appropriation of the unappropriated surplus
Prepares the Supervisory Board’s recommendation to the Annual General Meeting on the election
of the external auditors of the annual financial statements, the consolidated financial statements
and the half-yearly financial report (to the extent that the latter is audited or reviewed by external
auditors) and makes corresponding recommendations to the Supervisory Board
Deals with the required independence of the external auditor
Deals with non-audit services rendered by the external auditor
Issues the engagement letter to the external auditor of the annual financial statements and the
consolidated financial statements – including, in particular, the review or audit of half-yearly
financial reports, and determines focal areas of the audit and the audit fee
Prepares the Supervisory Board’s resolution approving the German Corporate Governance Code
pursuant to section 161 of the AktG and the corporate governance statement in accordance with
section 289f of the HGB
1) Employee representative
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Nomination Committee1)
Members
Composition
Joachim Faber (Chairman)
Chaired by the Chairman of the Supervisory Board
Ann-Kristin Achleitner
(until 16 May 2018)
Markus Beck2) (since 4 Sep 2018)
Richard Berliand
(since 16 May 2018)
Marion Fornoff 2)
(3 Jan – 15 Aug 2018)
Martin Jetter (since 24 May 2018)
Jutta Stuhlfauth2)
(since 16 May 2018)
Gerd Tausendfreund2)
(since 16 May 2018)
Amy Yip (until 16 May 2018)
At least five other members who are elected by the Supervisory Board
Responsibilities
Proposes suitable candidates to the Supervisory Board for inclusion in the Supervisory Board’s
election proposal to the Annual General Meeting (the proposal is being submitted by shareholder
representatives)
Other tasks and duties set forth in section 4b (5) of the BörsG
Deals with issues relating to the contracts of service for Executive Board members and, in
particular, to the structure and amount of their remuneration
Addresses succession planning for the Executive Board
Approves appointments of members of Deutsche Börse AG’s Executive Board to other executive
boards, supervisory boards, advisory boards and similar boards, as well as honorary appointments
and sideline activities
Approves any exemptions from the requirement to obtain approval
Approves the grant or revocation of general powers of attorney
Approves cases in which the Executive Board grants employees retirement pensions or other
individually negotiated retirement benefits, or proposes to enter into employer/works council
agreements establishing pension plans
1) The Nomination Committee and the Personnel Committee, which up until 3 January 2018 was an independent committee, were combined into one joint
committee with effect from that date. The members of the Personnel Committee were Joachim Faber (Chairman), Ann-Kristin Achleitner, Marion Fornoff and Amy
Yip. The Chairman of the Supervisory Board also chaired the Nomination Committee. The tasks and duties of the Personnel Committee were identical with those
of the joined Nomination Committee, with the exception of the proposal of suitable candidates to the Supervisory Board for recommendation to the Annual General
Meeting and various other tasks and duties established in section 4b (5) of the BörsG.
2) Employee representative
Risk Committee
Members
Composition
Richard Berliand (Chairman)
At least four members who are elected by the Supervisory Board
Responsibilities
Reviews the risk management framework, including the overall risk strategy, risk appetite and the
risk roadmap
Takes note of and reviews the periodic risk management and compliance reports
Oversees monitoring of the Group’s operational, financial and business risks
Discusses the annual reports on significant risks and the risk management systems at regulated
Group entities, to the extent legally permissible
(until 24 May 2018)
Joachim Nagel (Chairman)
(since 24 May 2018)
Nadine Absenger1)
(16 May – 15 Aug 2018)
Hans-Peter Gabe1)
(16 May – 15 Aug 2018)
Susann Just-Marx1)
(since 4 Sep 2018)
Cornelis Kruijssen1)
(since 4 Sep 2018)
Barbara Lambert (since 16 May 2018)
Monica Mächler (until 16 May 2018)
Erhard Schipporeit (until 16 May 2018)
Jutta Stuhlfauth1) (until 16 May 2018)
1) Employee representative
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Further infomation
Strategy Committee
Members
Composition
Joachim Faber (Chairman)
Chaired by the Chairman of the Supervisory Board
Ann-Kristin Achleitner
At least five other members who are elected by the Supervisory Board
Responsibilities
Advises the Executive Board on matters of strategic importance to the company and its affiliates
Addresses fundamental strategic and business issues, as well as important projects for Deutsche
Börse Group
Composition
At least four members who are elected by the Supervisory Board
Responsibilities
Supports the Supervisory Board in meeting its supervisory duties with respect to the information
technology used to execute the Group’s business strategy and with respect to information security
Advises on IT strategy and architecture
Oversees monitoring of technological innovations, the provision of IT services, the technical
performance and stability of the IT systems, operational IT risks, and information security services
and risks
Richard Berliand (until 16 May 2018)
Marion Fornoff1)
(16 May – 15 Aug 2018)
Hans-Peter Gabe1) (until 16 May 2018)
Susann Just-Marx1) (since 4 Sep 2018)
Achim Karle1) (since 4 Sep 2018)
Florian Rodeit1)
(16 May – 15 Aug 2018)
Carsten Schäfer1) (since 4 Sep 2018)
Jutta Stuhlfauth1) (until 15 Aug 2018)
Amy Yip
1) Employee representative
Technology Committee
Members
Richard Berliand (Chairman)
Marion Fornoff1)
(16 May – 15 Aug 2018)
Karl-Heinz Flöther
Hans-Peter Gabe1)
(16 May – 15 Aug 2018)
Craig Heimark (until 16 May 2018)
Martin Jetter (since 24 May 2018)
Achim Karle1) (since 4 Sep 2018)
Cornelis Kruijssen1)
(since 4 Sep 2018)
Florian Rodeit1)
(16 May – 15 Aug 2018)
Carsten Schäfer1) (since 4 Sep 2018)
Johannes Witt1) (until 16 May 2018)
1) Employee representative
Chairman’s Committee (since 16 May 2018)
Members
Composition
Joachim Faber (Chairman)
Nadine Absenger1)
Richard Berliand
Jutta Stuhlfauth1)
1) Employee representative
Chaired by the Chairman of the Supervisory Board
Deputy Chairperson of the Supervisory Board as well as one shareholder representative and one
employee representative each who are elected by the Supervisory Board
Responsibilities
Time-sensitive affairs
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Further infomation
Mediation Committee (since 16 May 2018)
Members
Composition
Joachim Faber (Chairman)
Marion Fornoff1)
(16 May – 15 Aug 2018)
Martin Jetter (since 24 May 2018)
Susann Just-Marx1)
(since 4 Sep 2018)
Jutta Stuhlfauth1)
1) Employee representative
Chaired by the Chairman of the Supervisory Board
Deputy Chairperson of the Supervisory Board as well as one shareholder representative and one
employee representative each
Responsibilities
Tasks and duties pursuant to section 27 (3) of the MitbestG
Targets for composition and qualification requirements of the Supervisory Board
In accordance with section 5.4.1 of the Code, the Supervisory Board has adopted a catalogue of specific
targets concerning its composition that, above all, should serve as a basis for the future nomination of its
members. This catalogue comprises qualification requirements as well as diversity targets. Furthermore,
members shall have sufficient time, as well as the personal integrity and suitability of character, to
exercise their office. In addition, half of the shareholder representatives on the Supervisory Board shall
be independent.
Qualification requirements
Given their knowledge, skills and professional experience, members of the Supervisory Board shall
have the ability to perform the duties of a supervisory board member in a company with international
business activities. The Supervisory Board has determined individual (basic) as well as general
qualification requirements. Basic requirements are derived from the business model, the concrete
targets, as well as from specific regulations applicable to Deutsche Börse Group.
Individual (basic) qualification requirements
Ideally, each Supervisory Board member holds the following basic qualifications:
Understanding of commercial issues
Analytical and strategic skills
Understanding of the corporate governance system
Knowledge of the financial services sector
Understanding of Deutsche Börse AG’s activities
Understanding of Deutsche Börse Group’s structure
Understanding of the member’s own position and responsibilities
General qualification requirements
The general qualifications refer to the Supervisory Board in its entirety. At least two of its members
should have profound knowledge, especially concerning the following topics:
Business models of exchanges and the capital markets
Accounting, finance, audit
Risk management and compliance
Information technology and security, digitalisation
Clearing, settlement and custody business
Regulatory requirements
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Further infomation
The current composition of the Supervisory Board fulfils these criteria concerning the qualification of its
members.
Supervisory Board members’ general qualification requirements
Business
models of
exchanges and
the capital
markets
Accounting,
finance, audit
Risk
management
and
compliance
Information
technology and
security,
digitalisation
Clearing,
settlement and
custody
business
Regulatory
requirements
Joachim Faber (Chairman)
Ann-Kristin Achleitner
Richard Berliand
Karl-Heinz Flöther
Martin Jetter
Barbara Lambert
Joachim Nagel
Amy Yip
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
Independence
In accordance with section 5.4.2 of the Code, the Supervisory Board shall be comprised of what it
considers to be an appropriate number of independent members. Supervisory Board members are no
longer to be considered independent in the meaning of section 5.4.2 of the Code, particularly if they
have a personal or business relationship with the company, its governing bodies, a controlling
shareholder or an entity affiliated with the controlling shareholder that may cause a substantial (and not
merely temporary) conflict of interest. The Supervisory Board has resolved that at least half of its
members who are shareholder representatives are to be independent in this sense. The Supervisory
Board generally regards all of its shareholder representatives as being independent. The Supervisory
Board notes, however, that the independence of a Supervisory Board member is sometimes called into
question if the term of office exceeds twelve years. Mr Berliand, who will leave the Supervisory Board
at the end of the Annual General Meeting on 8 May 2019, has been a member of the Supervisory
Board since 2005. However, the Supervisory Board has no doubts as to Mr Berliand’s impartiality and
professional performance of his Supervisory Board mandate, so that the Supervisory Board also regards
him as independent for the purposes of section 5.4.2 of the Code. Furthermore, Mr Berliand does
not currently hold any position within the Supervisory Board of Deutsche Börse AG that requires the
independence of the Supervisory Board member.
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Further infomation
Diversity concept for the Executive Board and the Supervisory Board
The diversity concept for the Executive Board and the Supervisory Board, as adopted by the Supervisory
Board in accordance with section 289f (2) no. 6 of the HGB, has the objective of ensuring a wide range
of perspectives and experience through the composition of both bodies. The concept is implemented
within the scope of appointing new Executive Board members or regarding nominations for election of
new Supervisory Board members.
Flexible age limit and term of office
The Supervisory Board considers the flexible age limit stipulated in the bylaws (generally 70 years) when
nominating candidates for election by the Annual General Meeting. Furthermore, the Supervisory Board’s
bylaws provide for a general limitation to members’ maximum term of office to twelve years, which
the Supervisory Board shall also consider in its nominations of candidates to the Annual General Meeting.
As a result, Craig Heimark and Erhard Schipporeit, who have been members of the Supervisory Board
since 2005, resigned from the Supervisory Board as of the 2018 Annual General Meeting. At the
same time, however, to ensure the balance between personnel changes and continuity in the work of
the Supervisory Board and preserve its knowledge and experience, the Supervisory Board proposed the
re-election of Richard Berliand, – a member of the Supervisory Board since October 2005 – to the 2018
Annual General Meeting. The proposal to extend Mr Berliand’s term of office beyond the general
limitation to members’ maximum term of office was based, in particular, on his profound experience with
exchange enterprises and their processes gained over many years and his extensive knowledge of
financial markets infrastructure providers. The Annual General Meeting welcomed the proposal,
re-electing Mr Berliand to the Supervisory Board. He is now set to resign at the end of the 2019 Annual
General Meeting.
The flexible age limit for members of the Executive Board provides for the term of office to expire at the
end of the month during which a member reaches the age of 60 years. From the month during which an
Executive Board member has reached the age of 60, reappointment is permitted for a period of one year
in each case, provided that the last term of office shall expire at the end of the month during which the
Executive Board member reaches the age of 65. When appointing members of the Executive Board,
the Supervisory Board pursues the objective of achieving an optimal composition of the Executive Board
from the company’s perspective. In this context, experience and industry knowledge, as well as
professional and personal qualifications, play a major role. Depending on the Executive Board position to
be filled, it is not just the scope and depth of skills that is decisive, but also whether the specific skills
are up to date. The flexible age limit has been deliberately worded to preserve the Supervisory Board's
flexibility in taking decisions on appointments.
At present, no Executive Board member has passed the age limit of 65 years. CEO Theodor Weimer,
who was appointed with effect from 1 January 2018, will be 61 years old at the end of his current term
of office.
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Management report | Combined corporate governance statement and corporate governance report
Financial statements
Notes
Further infomation
Share of women holding management positions
In line with the Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungs-
positionen in der Privatwirtschaft und im öffentlichen Dienst (FührposGleichberG, German Act on the
Equal Participation of Women and Men in Leadership Positions in the Private and Public Sectors),
Deutsche Börse AG’s Supervisory Board has defined target quotas for women on the Supervisory Board
and the Executive Board in accordance with section 111 (5) of the AktG. The first minimum targets that
were set – 33.33 per cent of the Supervisory Board members and 20 per cent of the Executive Board
members were to be women – were complied with by the end of the implementation period on 30 June
2017. The quota of women on the Executive Board was 20 per cent at such point in time. The quota
of women on the Supervisory Board was 41.67 per cent and thus above the self-set target.
With regard to the Supervisory Board, the legally prescribed gender quota of 30 per cent in accordance
with section 96 (2) of the AktG applies instead of the self-set minimum quota in accordance with
section 111 (5) of the AktG; this has been in effect since the application of the MitbestG to Deutsche
Börse AG as of the Annual General Meeting in 2018. In order to prevent the possible discrimination of
either shareholder representatives or employee representatives, and in order to increase the planning
security in the relevant election procedures, the shareholder representatives on the Supervisory Board
have opposed the overall compliance of the quota in accordance with section 96 (2) of the German
Stock Corporation Act. Thus, the minimum proportion of 30 per cent is to be complied with for each
gender with regard to the shareholder representatives and the employee representatives. This means that
at least to women and two men from each the shareholder representatives and from the employee
representatives must be on the Supervisory Board. Currently, there are three women each from the
shareholder representatives and from the employee representatives. The legally prescribed gender quota
is thus complied with.
Effective 1 July 2017, the Supervisory Board decided to extend the 20 per cent target quota of women
on the Executive Board until 31 December 2021. The target quota was initially at 20 per cent in the
reporting year for the Executive Board. This quota, however, declined due to the increase on the Executive
Board to six members as of 1 July 2018, despite the fact that the actual number of women on the
Executive Board did not change. The quota of women on the Executive Board is currently 16.7 per cent.
The Supervisory Board intends to comply with the 20 per cent target quota for women on the Executive
Board and also intends to further increase the quota for women on the Supervisory Board. This will be
taken into account in future personnel decisions.
International profile
The composition of the Executive Board and the Supervisory Board shall reflect the company’s
international activities. Since the 2018 Annual General Meeting, there have been three members on the
Supervisory Board holding non-German citizenship: Richard Berliand, Barbara Lambert and Amy Yip.
Martin Jetter is a German citizen, but is resident in the USA. Cornelis Kruijssen, employee representative
on the Supervisory Board, has the Dutch nationality. The same applies to Carla Streit and Charles
Stonehill, who were proposed by the Supervisory Board to the Annual General Meeting for election as
new Supervisory Board members. Ms Streit is a German and a US citizen, Mr Stonehill is a US
and a British citizen. In addition, many of the current and designated members of the Supervisory
Board have long-term professional experience in the international field or are even working abroad
on a permanent basis. The Supervisory Board will therefore continue to meet the objectives
concerning its international composition.
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Management report | Combined corporate governance statement and corporate governance report
Financial statements
Notes
Further infomation
The same applies to the Executive Board, where Stephan Leithner holds non-German citizenship, and
whose members have gained long-standing international working experience as well.
Educational and professional background
The Supervisory Board has set itself the objective of considering an appropriate range of educational
and professional backgrounds regarding its own composition, as well as regarding the composition of the
Executive Board. The composition of both the Supervisory Board and the Executive Board reflect these
objectives. In addition to possessing professional experience in the financial services industry, members
of the Executive Board and the Supervisory Board also have a professional background in consultancy,
the IT sector, administration and regulation, academia and auditing. In terms of academic education,
economic and legal degrees prevail, in addition to backgrounds in IT and engineering. Education and
professional experience thus also contribute to fulfilling the previously mentioned qualification
requirements for Supervisory Board members.
The composition of both Deutsche Börse AG’s Supervisory Board and Executive Board is in line with the
objectives stated above. Please refer to
tion concerning the members of the Supervisory Board and its committees. For further information
concerning the members of the Executive Board, please see
www.deutsche-boerse.com/supervboard for further informa-
www.deutsche-boerse.com/execboard.
Preparations for the election of shareholder representatives to the Supervisory Board
The Supervisory Board’s Nomination Committee – whose task it is to propose suitable candidates to
the Supervisory Board for recommendation to the Annual General Meeting – has concerned itself,
in great detail, with the successors to Ann-Kristin Achleitner and Richard Berliand, who will both leave
the Supervisory Board as of May 2019.
When selecting appropriate candidates, the committee has taken into account the above criteria.
Following a preliminary selection and several personal interviews with the candidates, the Nomination
Committee has decided to propose to the Supervisory Board Clara Streit and Charles Stonehill as
candidates for election by the Annual General Meeting.
Clara Streit was active for many years as a management consultant and senior partner at McKinsey &
Company. She also has many years of experience as an independent member of supervisory boards
and boards of directors of national and international listed companies, in particular in the financial
sector. Currently she is exercising a mandate on the board of directors of Vontobel Holding AG, on the
supervisory board of Vonovia SE and on the supervisory board of NN Group NV.
Charles Stonehill has many years of experience in the financial services industry. He acquired his
encompassing expertise regarding capital market topics – among others – in leading positions at JP
Morgan, Morgan Stanley, CS First Boston and Lazard Frères Inc. He is a member of a several boards of
directors. Among others, Mr. Stonehill is the deputy chairman of the board of directors of Julius Baer
Group Ltd. and of Bank Julius Baer & Co. Ltd. and a member of the board of directors of AXA Equitable
Life Insurance Company and AXA Equitable Holdings Inc.
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Executive and Supervisory Boards
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Notes
Further infomation
Training and professional development measures for members of the Supervisory Board
As a matter of principle, Supervisory Board members are responsible for their continuing professional
development. Deutsche Börse AG complies with the recommendation of section 5.4.5 (2) of the Code as
well as the guidelines of the European Securities and Markets Authority (ESMA) on the management
bodies of market operators and data provision services, and supports Supervisory Board members in this
endeavour – for example, by organising targeted introductory events for new Supervisory Board members
or workshops on selected strategy issues as well as on professional topics (if required). Thus, in addition
to a strategy workshop, two technology workshops, workshops on Deutsche Börse Group’s regulatory
strategy and the post-trading business, as well as workshops on the tasks and duties of the Supervisory
Board, were held during the year under review.
Examination of the efficiency of Supervisory Board work
Deutsche Börse AG regards regular reviews of the efficiency of Supervisory Board work – in accordance
with section 5.6 of the Code – as a key component of good corporate governance. The 2018 efficiency
audit was dedicated to the following areas: tasks of the Supervisory Board and performance of its duties,
cooperation within the Supervisory Board and between the Executive Board and the Supervisory Board,
as well as Supervisory Board organisations and meetings. The review yielded overall positive results.
Where it identified room for improvement, optimising proposals were discussed by the Supervisory Board
and measures for their execution implemented.
Target figures for the proportion of female executives beneath the Executive Board
In accordance with the FührposGleichberG, Deutsche Börse AG’s Executive Board has defined target
quotas for women on the two management levels beneath the Executive Board, in accordance with
section 76 (4) of the AktG, in each case referring to Deutsche Börse AG. By 31 December 2021, the
proportion of women holding positions in the first and second management levels beneath the Executive
Board is planned to amount to 15 per cent and 20 per cent, respectively. As per 31 December 2018,
the share of women holding positions on the first and second management levels beneath the Executive
Board at Deutsche Börse AG in Germany was 14 per cent and 16 per cent, respectively.
Moreover, as early as in 2010, the Executive Board had adopted a voluntary commitment to increase the
share of women holding middle and upper management positions to 20 per cent by 2020 and of women
holding lower management positions to 30 per cent during the same period. The Group maintains this
ambition and has extended the scope of its voluntary commitment over and above the legal requirements.
Firstly, the target figures determined in this context relate to Deutsche Börse Group (including subsidiaries)
worldwide. Secondly, the definition of management levels/positions was extended to also include heads
of teams, for example. On a global level, as at 31 December 2018, these quotas stood at 14 per cent for
upper and middle management levels and 29 per cent for lower management positions. For Germany, the
quotas were 14 per cent and 26 per cent, respectively.
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Notes
Further infomation
Shareholder representation, transparent reporting and communication
Shareholders exercise their rights at the Annual General Meeting (AGM). In the spirit of good corporate
governance, Deutsche Börse AG aims to make it as easy as possible for shareholders to exercise their
shareholder rights. For instance, Deutsche Börse AG shareholders may follow the AGM over the internet
and can be represented at the AGM by proxies nominated by Deutsche Börse AG. These proxies exercise
voting rights solely in accordance with shareholders’ instructions. Additionally, shareholders may exercise
their voting rights by post or online. Among other things, the AGM elects the shareholder representatives
to the Supervisory Board and resolves on the formal approval of the actions of the Executive Board
and the Supervisory Board. It also passes resolutions on the appropriation of the unappropriated surplus,
resolves on capitalisation measures and approves intercompany agreements and amendments to
Deutsche Börse AG’s Articles of Association. Ordinary AGMs – at which the Executive Board and the
Supervisory Board give an account of the past financial year – take place once a year.
To maximise transparency and ensure equal access to information, Deutsche Börse AG’s corporate
communications generally follow the rule that all target groups should receive all relevant information
simultaneously. Deutsche Börse AG’s financial calendar informs shareholders, analysts, shareholders’
associations, the media and interested members of the public of key events such as the date of the
AGM, or publication dates for financial performance indicators.
Ad hoc disclosures, information on directors’ dealings and voting rights notifications, corporate reports
and interim reports, and company news can all be found on Deutsche Börse's website: www.deutsche-
boerse.com. Deutsche Börse AG provides information about its consolidated and annual financial state-
ments at an annual press briefing. It also offers conference calls for analysts and investors following the
publication of the interim reports. Furthermore, when outlining its strategy and providing information to
everyone who is interested, it abides by the principle that all target groups worldwide must be informed
at the same time.
Additionally, Deutsche Börse AG submitted a COP for 2018 to the UN Global Compact. Responsible
corporate governance is one of Deutsche Börse Group’s core concerns, which is why it has complied
with the Global Compact’s principles for many years. Public records of this have been available since the
company officially joined the initiative in 2009:
responsibility > UN Global Compact.
www.deutsche-boerse.com > Sustainability > Our
195
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Notes
Further infomation
Accounting and auditing
Deutsche Börse AG’s annual report provides shareholders and interested members of the public with
detailed information on Deutsche Börse Group’s business performance during the reporting period.
Additional information is published in its half-yearly financial report and two quarterly statements. The
annual financial statement documents and the annual report are published within 90 days of the end of
the financial year (31 December); intra-year financial information (half-yearly financial report and
quarterly statements) is made available within 45 days of the end of the relevant quarter or six-month
period. Following preparations by the Audit Committee, the consolidated and annual financial statements
are discussed by the entire Supervisory Board and with the external auditors, examined, and then
approved. The Executive Board discusses the half-yearly report and the quarterly statements for the first
and third quarters with the Supervisory Board’s Audit Committee prior to their publication. The half-
yearly financial report is reviewed by the external auditors. In line with the proposal by the Supervisory
Board, the 2018 AGM elected KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, (KPMG) to audit its
2018 annual and consolidated financial statements and to review its half-yearly financial report in the
year under review. KPMG was also instructed to perform a review of the contents of the combined non-
financial statement during the 2018 financial year. The lead auditor, Sven-Olaf Leitz, and the deputy
lead auditor, Klaus-Ulrich Pfeiffer, have been responsible for the audit since 2018. The Supervisory
Board’s proposal was based on the recommendation by the Audit Committee. The Audit Committee
obtained the necessary statement of independence from KPMG before the election. This states that there
are no personal, business, financial or other relationships between the auditor, its governing bodies and
audit managers on the one hand, and the company and the members of its Executive and Supervisory
Boards on the other, that could give cause to doubt the auditor’s independence. The Audit Committee
checked that this continued to be the case during the reporting period. It also oversaw the financial
reporting process in 2018. The Supervisory Board was informed in a timely manner of the Committee’s
work and the insights gained; there were no material findings. Information on audit services and fees is
provided in
note 6 to the consolidated financial statements.
196
196
Consolidated financial
statements / notes
198
199
200
202
204
206
254
268
312
198
Consolidated financial statements
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in equity
206 Notes to the consolidated
financial statements
Basis of preparation
Consolidated income statement disclosures
Consolidated balance sheet disclosures
Other disclosures
347 Responsibility statement by the
Executive Board
348
Independent Auditor’s Report
Consolidated financial
statements / notes
198
Consolidated financial statements
198
199
200
202
204
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in equity
206 Notes to the consolidated
financial statements
206
254
268
312
Basis of preparation
Consolidated income statement disclosures
Consolidated balance sheet disclosures
Other disclosures
347 Responsibility statement by the
Executive Board
348
Independent Auditor’s Report
Deutsche Börse Group| Annual report 2018
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Executive and Supervisory Boards
Management report
Management report | Combined corporate governance statement and corporate governance report
Financial statements | Consolidated income statement
Financial statements
Notes
Notes
Further information
Further infomation
Accounting and auditing
Consolidated income statement
Deutsche Börse AG’s annual report provides shareholders and interested members of the public with
detailed information on Deutsche Börse Group’s business performance during the reporting period.
Additional information is published in its half-yearly financial report and two quarterly statements. The
annual financial statement documents and the annual report are published within 90 days of the end of
the financial year (31 December); intra-year financial information (half-yearly financial report and
for the period 1 January to 31 December 2018
quarterly statements) is made available within 45 days of the end of the relevant quarter or six-month
period. Following preparations by the Audit Committee, the consolidated and annual financial statements
are discussed by the entire Supervisory Board and with the external auditors, examined, and then
approved. The Executive Board discusses the half-yearly report and the quarterly statements for the first
2017
and third quarters with the Supervisory Board’s Audit Committee prior to their publication. The half-
(restated)1)
€m
yearly financial report is reviewed by the external auditors. In line with the proposal by the Supervisory
2,643.6
Sales revenue
Board, the 2018 AGM elected KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, (KPMG) to audit its
Net interest income from banking business
2018 annual and consolidated financial statements and to review its half-yearly financial report in the
Other operating income
year under review. KPMG was also instructed to perform a review of the contents of the combined non-
Total revenue
financial statement during the 2018 financial year. The lead auditor, Sven-Olaf Leitz, and the deputy
lead auditor, Klaus-Ulrich Pfeiffer, have been responsible for the audit since 2018. The Supervisory
Volume-related costs
Board’s proposal was based on the recommendation by the Audit Committee. The Audit Committee
2,462.3
Net revenue (total revenue less volume-related costs)
obtained the necessary statement of independence from KPMG before the election. This states that there
are no personal, business, financial or other relationships between the auditor, its governing bodies and
– 650.5
Staff costs
audit managers on the one hand, and the company and the members of its Executive and Supervisory
Other operating expenses
Boards on the other, that could give cause to doubt the auditor’s independence. The Audit Committee
Operating costs
checked that this continued to be the case during the reporting period. It also oversaw the financial
reporting process in 2018. The Supervisory Board was informed in a timely manner of the Committee’s
197.8
Net income from strategic investments
work and the insights gained; there were no material findings. Information on audit services and fees is
1,528.5
Earnings before interest, tax, depreciation and amortisation (EBITDA)
provided in
note 6 to the consolidated financial statements.
2018
€m
– 1,131.6
– 1,340.2
3,132.4
2,779.7
1,443.7
2,802.5
2,893.9
– 352.7
– 824.0
– 516.2
– 340.2
– 481.1
204.5
132.6
34.0
26.3
Note
4.2
8
4
4
4
4
5
6
Depreciation, amortisation and impairment losses
11, 12
Earnings before interest and tax (EBIT)
Financial income
Financial expense
Earnings before tax (EBT)
Other tax
Income tax expense
Net profit for the period
thereof net profit for the period attributable
to Deutsche Börse AG shareholders
thereof net profit for the period attributable
to non-controlling interests
Earnings per share (basic) (€)
Earnings per share (diluted) (€)
1) For details regarding the restated figures, please see
note 3.
9
9
10
23
23
– 210.5
1,233.2
7.4
– 83.8
– 159.9
1,368.6
6.6
– 86.3
1,156.8
1,288.9
– 0.6
– 303.7
852.5
– 1.5
– 391.4
896.0
824.3
874.3
28.2
4.46
4.46
21.7
4.68
4.68
198
196
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements | Consolidated statement of comprehensive income
Notes
Further information
Consolidated statement of comprehensive income
for the period 1 January to 31 December 2018
Net profit for the period reported in consolidated income statement
Items that will not be reclassified to profit or loss
Changes from defined benefit obligations
Equity investments measured at FVOCI1)
Other
Deferred taxes
Items that may be reclassified subsequently to profit or loss
Exchange rate differences
Other comprehensive income from investments using the equity method
Remeasurement of cash flow hedges
Remeasurement of other financial instruments
Deferred taxes
Other comprehensive income after tax
Total comprehensive income
thereof Deutsche Börse AG shareholders
thereof non-controlling interests
1) FVOCI = fair value through other comprehensive income
Note
10, 15
15
10, 15
2018
€m
852.5
– 23.9
– 7.2
– 0.3
6.8
– 24.6
12.8
– 0.4
0
0
– 3.9
8.5
– 16.1
836.4
806.4
30.0
2017
(restated)
€m
896.0
30.6
0
0
– 8.4
22.2
– 27.8
0.9
3.5
– 89.5
46.9
– 66.0
– 43.8
852.2
835.9
16.3
199
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements | Consolidated balance sheet
Notes
Further information
Consolidated balance sheet
as at 31 December 2018
Assets
NON-CURRENT ASSETS
Intangible assets
Software
Goodwill
Payments on account and assets under development
Other intangible assets
Property, plant and equipment
Fixtures and fittings
Computer hardware, operating and office equipment
Payments on account and construction in progress
Financial assets
Equity investments measured at FVOCI1)
Debt financial assets measured at amortised cost
Financial assets at FVPL2)
Note
31 Dec 2018
€m
1 Jan 2018
€m
31 Dec 2017
(restated)
€m
11
12
13
321.0
2,865.6
52.3
952.7
322.1
2,770.9
86.8
911.2
322.1
2,770.9
86.8
911.2
4,191.6
4,091.0
4,091.0
31.3
84.8
14.8
130.9
34.8
76.4
2.2
113.4
108.8
1,057.1
101.6
1,574.1
34.8
76.4
2.2
113.4
–
–
Financial instruments held by central counterparties
9,985.4
4,837.2
4,837.2
Derivatives
Other financial debt assets at FVPL
Available-for-sale financial assets
Loans and receivables
Investment in associates and joint ventures
Other non-current assets
Deferred tax assets
Total non-current assets
CURRENT ASSETS
Debt financial assets measured at amortised cost
Trade receivables
Other financial assets at amortised cost
Financial assets at FVPL
Financial instruments held by central counterparties
Derivatives
Other financial assets at FVPL
Available-for-sale financial assets
Loans and receivables
Income tax assets
Other current assets
Restricted bank balances
Other cash and bank balances
Total current assets
Total assets
1) FVOCI = fair value through other comprehensive income
2) FVPL = fair value through profit or loss
0
17.3
–
–
0.1
15.9
–
–
0.1
1.2
1,692.0
4.9
11,168.6
6,528.9
6,535.4
42.5
4.1
104.3
38.7
4.1
104.0
38.7
4.1
101.1
15,642.0
10,880.1
10,883.7
397.5
333.3
19,722.6
13,172.7
331.8
–
94,280.3
79,510.7
79,510.7
4.7
0.4
–
–
55.9
639.8
115,101.2
29,833.6
1,322.3
5.2
1.5
–
–
91.3
451.7
93,566.4
29,392.0
1,297.6
5.2
0
254.5
12,922.9
91.3
451.7
93,568.1
29,392.0
1,297.6
146,257.1
124,256.0
124,257.7
161,899.1
135,136.1
135,141.4
10
13
13
13
14
13
200
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements | Consolidated balance sheet
Notes
Further information
Equity and liabilities
EQUITY
Subscribed capital
Share premium
Treasury shares
Revaluation surplus
Accumulated profit
Shareholders’ equity
Non-controlling interests
Total equity
NON-CURRENT LIABILITIES
31 Dec 2018
€m
1 Jan 2018
€m
31 Dec 2017
(restated)
€m
Note
15
190.0
1,340.4
– 477.7
– 10.2
3,787.4
4,829.9
133.5
193.0
1,332.3
– 334.6
14.4
3,624.2
4,829.3
118.1
193.0
1,332.3
– 334.6
19.6
3,631.0
4,841.3
118.1
4,963.4
4,947.4
4,959.4
164.1
184.3
144.2
120.3
144.2
120.3
2,283.2
1,688.4
1,688.4
Provisions for pensions and other employee benefits
Other non-current provisions
Financial liabilities measured at amortised cost
Financial liabilities at FVPL
17
18, 19
13
13
Financial instruments held by central counterparties
9,985.4
4,837.2
4,837.2
Other financial liabilities at FVPL
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIES
Tax provisions1) 2)
Other current provisions
Financial liabilities at amortised cost
Trade payables
Other financial liabilities at amortised cost
Financial liabilities at FVPL
Financial instruments held by central counterparties
Derivatives
Other financial liabilities at FVPL
Cash deposits by market participants
Other current liabilities
Total current liabilities
Total liabilities
10
20
13
13
13
21
0.2
17.0
194.5
0.8
16.8
225.4
0.8
6.1
226.8
12,828.7
7,033.1
7,023.8
334.8
293.2
339.4
191.6
339.4
191.6
195.0
150.1
150.1
19,024.7
13,976.2
13,976.2
94,068.3
78,798.6
78,798.6
3.0
0
29.1
0.3
32.0
0
29,559.2
29,215.3
29,215.3
628.8
455.0
455.0
144,107.0
123,155.6
123,158.2
156,935.7
130,188.7
130,182.0
Total equity and liabilities
161,899.1
135,136.1
135,141.4
1) Thereof income tax expense: €295.8 million (2017: €299.6 million)
2) Thereof non-current provisions: €104.7 million (2017: €104.6 million)
201
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Executive and Supervisory Boards
Management report
Financial statements | Consolidated cash flow statement
Notes
Further information
Consolidated cash flow statement
for the period 1 January to 31 December 2018
Net profit for the period
Depreciation, amortisation and impairment losses
Increase in non-current provisions
Deferred tax income
Other non-cash income
Changes in working capital, net of non-cash items:
(Increase)/decrease in receivables and other assets
Increase in current liabilities
Increase in non-current liabilities
Net loss on disposal of non-current assets
Cash flows from operating activities excluding CCP positions
Changes in liabilities from CCP positions
Changes in receivables from CCP positions
Cash flows from operating activities
Payments to acquire intangible assets
Payments to acquire property, plant and equipment
Payments to acquire non-current financial instruments
Payments to acquire investments in associates and joint ventures
Payments to acquire subsidiaries, net of cash acquired
Effects of the disposal of (shares in) subsidiaries, net of cash disposed
Net decrease/(net increase) in current receivables and securities from banking
business with an original term greater than three months
Net increase in current liabilities from banking business with an original term greater
than three months
Proceeds from disposals of non-current financial instruments
Proceeds from disposals of intangible assets
Cash flows from investing activities
Purchase of treasury shares
Proceeds from sale of treasury shares
Payments to non-controlling interests
Proceeds from non-controlling interests
Repayment of long-term financing
Proceeds from long-term financing
Dividends paid
Cash flows from financing activities
Note
11, 12
10
22
22
22
2018
€m
852.5
210.5
59.7
– 36.0
– 21.3
105.7
– 8.8
113.6
0.9
5.4
1,176.5
– 1,676.0
1,797.7
1,298.2
– 94.8
– 65.2
– 38.7
– 4.8
– 169.2
– 0.4
2017
€m
896.0
159.9
10.2
– 20.6
– 96.4
156.6
7.9
148.2
0.5
1.5
1,107.2
– 323.2
272.2
1,056.2
– 106.1
– 43.1
– 312.4
– 10.4
– 157.5
0
655.1
– 47.7
250.3
259.5
0.2
792.0
– 364.2
6.5
– 14.9
0.6
– 600.0
592.4
– 453.3
– 832.9
0
859.1
0
181.9
– 28.2
5.5
– 39.3
0
0
0
– 439.0
– 501.0
Net change in cash and cash equivalents
1,257.3
737.1
202
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Financial statements | Consolidated cash flow statement
Notes
Further information
Net change in cash and cash equivalents (brought forward)
Effect of exchange rate differences
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Interest-similar income received
Dividends received
Interest paid
Income tax paid
Note
2018
€m
1,257.3
1.5
580.2
22
1,839.0
435.1
6.7
– 312.0
– 303.3
2017
€m
737.1
– 10.0
– 146.9
580.2
362.7
8.6
– 295.8
– 308.8
203
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Executive and Supervisory Boards
Management report
Financial statements | Consolidated statement of changes in equity
Notes
Further information
Consolidated statement of changes in equity
for the period 1 January to 31 December 2018
Balance as at 1 January 2017
Net profit for the period
Other comprehensive income after tax
Total comprehensive income
Exchange rate differences and other adjustments
Purchase of treasury shares
Sale of treasury shares
Sales under the Group Share Plan
Changes due to capital increases/decreases
Acquisition in the interest of non-controlling shareholders in
European Energy Exchange AG
Dividends paid
Transactions with shareholders
Balance as at 31 December 2017
Attributable to Deutsche Börse AG shareholders
Subscribed
capital
€m
Share
premium
€m
Treasury
shares
€m
193.0
1,327.8
– 311.4
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4.5
0
0
0
0
4.5
193.0
1,332.3
0
0
0
0
– 28.2
0
5.0
0
0
0
– 23.2
– 334.6
Effects of first-time adoption of IFRS 9 and IFRS 15 as at 1 January 2018
0
0
0
Balance as at 1 January 2018
Net profit for the period
Other comprehensive income after tax
Total comprehensive income
Exchange rate differences and other adjustments
Purchase of treasury shares
Sale of treasury shares
Withdrawal of treasury shares
Sales under the Group Share Plan
Changes due to capital increases/decreases
Dividends paid
Transactions with shareholders
Balance as at 31 December 2018
193.0
1,332.3
– 334.6
0
0
0
0
0
0
– 3.0
0
0
0
– 3.0
190.0
0
0
0
0
0
5.1
3.0
0
0
0
8.1
1,340.4
0
0
0
0
– 364.2
0
215.4
5.7
0
0
– 143.1
– 477.7
204
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Executive and Supervisory Boards
Management report
Financial statements | Consolidated statement of changes in equity
Notes
Further information
Attributable to Deutsche Börse AG shareholders
Revaluation surplus
€m
Accumulated profit
€m
Shareholders' equity Non-controlling interests
€m
€m
41.5
0
– 21.9
– 21.9
0
0
0
0
0
0
0
0
19.6
– 5.2
14.4
0
– 24.6
– 24.6
0
0
0
0
0
0
0
0
– 10.2
3,230.1
874.3
– 16.5
857.8
– 11.4
0
0
0
0
– 6.5
– 439.0
– 456.9
3,631.0
4,481.0
874.3
– 38.4
835.9
– 11.4
– 28.2
4.5
5.0
0
– 6.5
– 439.0
– 475.6
4,841.3
142.2
21.7
– 5.4
16.3
0.6
0
0
0
– 48.3
7.3
0
– 40.4
118.1
Total equity
€m
4,623.2
896.0
– 43.8
852.2
– 10.8
– 28.2
4.5
5.0
– 48.3
0.8
– 439.0
– 516.0
4,959.4
– 6.8
– 12.0
0
– 12.0
3,624.2
824.3
6.7
831.0
0.9
0
0
– 215.4
0
0
– 453.3
– 667.8
3,787.4
4,829.3
824.3
– 17.9
806.4
0.9
– 364.2
5.1
0
5.7
0
– 453.3
– 805.8
4,829.9
118.1
28.2
1.8
30.0
0.3
0
0
0
0
– 14.9
0
– 14.6
133.5
4,947.4
852.5
– 16.1
836.4
1.2
– 364.2
5.1
0
5.7
– 14.9
– 453.3
– 820.4
4,963.4
205
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Management report
Financial statements
Notes | Basis of preparation
Further information
Notes to the consolidated financial statements
Basis of preparation
1. General principles
Company information
Deutsche Börse AG (the “company”) has its registered office in Frankfurt/Main, and is registered in the
commercial register B of the Frankfurt/Main Local Court (Amtsgericht Frankfurt am Main) under
HRB 32232. Deutsche Börse AG is the parent company of Deutsche Börse Group. Deutsche Börse AG
and its subsidiaries operate cash and derivatives markets. Its business areas range from pre-IPO and
growth financing services, the admission of securities to listing, through trading, clearing and settlement,
down to custody of securities. Furthermore, IT services are provided and market data distributed. For
details regarding internal organisation and reporting see note 24.
Basis of reporting
The 2018 consolidated financial statements have been prepared in compliance with the International
Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB)
and the related interpretations issued by the International Financial Reporting Standards Interpretations
Committee (IFRIC), as adopted by the European Union in accordance with Regulation No. 1606/2002
of the European Parliament and of the Council on the application of international accounting standards.
The disclosures required in accordance with Handelsgesetzbuch (HGB, German Commercial Code)
section 315e (1) have been presented in the notes to the consolidated financial statements and the
remuneration report of the combined management report. The consolidated financial statements are
also based on the interpretations issued by the Rechnungslegungs Interpretations Committee (RIC,
Accounting Interpretations Committee) of the Deutsches Rechnungslegungs Standards Committee e.V.
(Accounting Standards Committee of Germany), to the extent that these do not contradict the
standards and interpretations issued by the IFRIC or the IASB.
New accounting standards – implemented in the year under review
In the 2018 reporting period, the following standards and interpretations issued by the IASB and
adopted by the European Commission were applied to Deutsche Börse Group. This adoption did not
constitute an early adoption.
Amendments to IFRS 2 “Classification and Measurement of Share-Based Payments” (June 2016)
The amendments affect the accounting for cash-settled share-based payment transactions. The most
important amendment to IFRS 2 is the clarification on how to determine the fair value of liabilities for
share-based payments.
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Notes | Basis of preparation
Further information
IFRS 9 “Financial Instruments” (July 2014)
IFRS 9 introduces new requirements for the recognition and measurement of financial instruments.
IFRS 15 “Revenue from Contracts with Customers” (May 2014 plus clarification dated April 2016)
IFRS 15 specifies the recognition of revenue from contracts with customers.
The changes in accounting policies resulting from first-time adoption of IFRS 9 and IFRS 15 are set out
in note 3.
Amendments resulting from the “Annual Improvements Project 2014–2016” (December 2016)
The amendments relate to three standards; the first-time application of the amendments to IFRS 1 and
IAS 28 was obligatory as of the year 2018. IAS 28 clarifies that the option to measure an investment in
an associate venture or a joint venture held by a venture capital company or by another qualifying entity
may be exercised differently for each investment.
IFRIC 22 “Foreign Currency Transactions and Advance Consideration” (December 2016)
IFRIC 22 addresses a question on the application of IAS 21 “The Effects of Changes in Foreign Exchange
Rates”. It clarifies at which point in time the exchange rate is to be determined for the translation of
transactions into foreign currencies containing advance payments received or made. The exchange rate
for the underlying asset, income or expense is determined by reference to the point in time on which the
asset or liability resulting from the prepayment is recognised for the first time.
The application of the above-mentioned standards and interpretations has no material effect on the
presentation of the consolidated financial statements. Amendments to IAS 40 “Transfers of Investment
Property” have no effect on the presentation of the consolidated financial statements.
New accounting standards – not yet implemented
The following standards and interpretations, which are relevant to Deutsche Börse Group but which have
not been adopted early by the Group for 2018, have been published by the IASB prior to the publication
of this financial report and partially adopted by the European Commission.
The following standards were already adopted by the European Commission:
IFRS 16 “Leases” (January 2016)
IFRS 16 establishes principles for the recognition, measurement, presentation and disclosure of leases.
The objective of IFRS 16 is to ensure that lessees and lessors provide relevant information on the effects
of lease contracts. The standard must be applied for financial years beginning on or after 1 January
2019; earlier application is permitted. Deutsche Börse Group will apply the standard as from 1 January
2019. The standard was adopted by the EU on 31 October 2017.
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Notes | Basis of preparation
Further information
Deutsche Börse Group as lessee expects a material impact on its consolidated financial statements
from the first-time application of the new leasing standard. IFRS 16 introduces a single lessee
accounting model. According to this approach, the lessee is obliged to recognise all leases: first, the
lessee recognises the right-of-use asset, i.e. the lessee’s right to use the leased asset; second,
the lessee recognises the lease liability, i.e. the lessee’s obligation to make lease payments.
As a result of the recognition of right-of-use assets and the corresponding lease liabilities, Deutsche
Börse Group’s total assets are expected to increase, as at the date of conversion, by around
€300 million. Of this amount, approximately €5 million refer to lease agreements for company cars;
the remainder refers to long-term arrangements for office properties and data centres.
Furthermore, the type of expenses associated with such leases will change as well: going forward,
Deutsche Börse Group will recognises a right-of-use asset less any accumulated depreciation and any
accumulated impairment losses as well as interest expenses from lease liabilities instead of rental
and lease expenses recognised in other operating expenses. These changes are expected to amount to
around €55 million, and will ultimately lead to an improvement of earnings before interest, tax,
depreciation and amortisation (EBITDA).
Deutsche Börse Group will make use of the general practical expedients provided by IFRS 16:
All arrangements identified as leases in the past will continue to be classified as such.
Short-term leases (lease term of less than twelve months) and leased assets of low value are not
recorded as right-of-use asset or lease liability, respectively.
Value-added tax included in lease payments is included neither in the lease liabilities nor in the carrying
amount of the right-of-use asset, regardless of whether Deutsche Börse Group is entitled to make deduct
input taxes or not.
As at the date of first-time adoption of IFRS 16, Deutsche Börse Group will proceed as follows:
The transition is based on the modified retrospective approach; prior-year figures are not restated.
The present value of the lease liabilities is calculated on the basis of the future lease payments using
the incremental borrowing rate. A uniform rate is selected for similar leases.
The measurement of the right-of-use asset is calculated on the basis of the individual agreements,
either retrospectively using the interest rate applied upon first-time adoption or on the basis of the
restated lease liabilities. The cumulative effects from first-time adoption of the new standard are
recorded as at the date of first-time adoption directly in equity. This results in an effect as at
1 January 2019 of around €10 million. The right-of-use asset is adjusted for provisions from the
charges of lease agreements.
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Financial statements
Notes | Basis of preparation
Further information
In the case of agreements with a remaining term of less than twelve months at the date of first-time
adoption, a decision is made on an individual agreement level.
Initial direct costs are not taken into account in the right-of-use asset.
Amendments to IFRS 9 “Prepayment Features with Negative Compensation” (October 2017)
The amendments regarding prepayment features with negative compensation must be applied for
financial years beginning on or after 1 January 2019; earlier application is permitted. The amendments
were adopted by the EU on 22 March 2018.
IFRIC 23 “Uncertainty over Income Tax Treatments” (June 2017)
This interpretation is to be applied to the determination of current and deferred tax assets and liabilities, in
case of uncertainty over income tax treatments. IFRIC 23 must be applied for financial years beginning
on or after 1 January 2019; earlier application is permitted. This interpretation was adopted by the
EU on 23 October 2018.
Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures” (October 2017)
These amendments clarify that an entity applies IFRS 9 to long-term interests in an associate or joint
venture that form part of the net investment in the associate or joint venture but to which the equity
method is not applied. The amendments must be applied for financial years beginning on or
after 1 January 2019; earlier application is permitted. The amendments were adopted by the EU on
8 February 2019.
The following standards have not yet been adopted by the European Commission:
Amendments to IFRS 3 “Definition of a Business” (October 2018)
The amendments aim at resolving the difficulties that arise when an entity determines whether it has
acquired a business or a group of assets. The amendments are effective for business combinations for
which the acquisition date is on or after the beginning of the first annual reporting period beginning
on or after 1 January 2020. The amendments have not yet been adopted by the EU.
Amendments to IAS 1 and IAS 8 “Definition of Material” (October 2018)
The definition of the term “material” – regarding materiality of information – was specified in more detail.
Furthermore, the various definitions in the Framework and the Standards were harmonised. The amend-
ments must be applied for financial years beginning on or after 1 January 2020; earlier application is
permitted. The amendments have not yet been adopted by the EU.
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Financial statements
Notes | Basis of preparation
Further information
Amendments to IFRS 10 and IAS 28 “Sales or Contributions of Assets Between an Investor and its
Associate/Joint Venture” (September 2014)
The amendments clarify that the extent to which gains or losses are recognised for transactions with
an associate or joint venture depends on whether the assets sold or contributed constitute a business
operation. The application date has been postponed indefinitely.
IFRS 17 “Insurance Contracts” (May 2017)
IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of
insurance contracts. The objective of IFRS 17 is to ensure that an entity provides relevant information
that faithfully represents insurance contracts. The standard must be applied for financial years
beginning on or after 1 January 2021, and has not yet been adopted by the EU.
Amendments resulting from the “Annual Improvements Project 2015–2017” (December 2017)
Four standards are affected by these amendments:
The amendments to IFRS 3 clarify that when an entity obtains control of a business in which it has
previously had a participating interest as part of a joint operation, such entity must apply the principles
for successive business combinations. The interest previously held by the acquirer must be remeasured.
For IFRS 11, it is clarified that when a party obtains joint control of a business operation in which it has
previously had an interest as part of a joint operation, such party does not have to remeasure the interest
previously held.
IAS 12 will be amended so that all income tax consequences of dividend payments must be considered
in the same way as the income on which the dividends are based.
210
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Financial statements
Notes | Basis of preparation
Further information
Finally, IAS 23 states that if an entity has raised funds generally for the acquisition of qualifying assets,
borrowing costs specifically incurred in connection with the acquisition of qualifying assets shall not be
included in the determination of the financing cost rate until the completion of the borrowing.
The amendments must be applied for financial years beginning on or after 1 January 2019, but have
not yet been adopted by the EU.
Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement” (February 2018)
The amendments specify that if a plan amendment, curtailment or settlement occurs, it is now mandatory
that the current service cost and net interest for the period after the remeasurement are determined
using the assumptions used for the remeasurement. In addition, amendments have been included to
clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset
ceiling. The amendments must be applied for financial years beginning on or after 1 January 2019;
earlier application is permitted. The amendments have not yet been adopted by the EU.
Revised “Conceptual Framework in IFRS Standards”
The revised “Conceptual Framework in IFRS Standards” is structured into an introductory explanation on
the status and purpose of the Conceptual Framework, eight chapters and a glossary. Included are revised
definitions of assets and liabilities as well as new guidance on measurement and derecognition,
presentation and disclosure.
Together with the revised Conceptual Framework, references to the Conceptual Framework have been
adapted in various standards.
Regarding the standards and interpretations listed above, Deutsche Börse Group expects no material
impact on the presentation of the consolidated financial statements – except for the application of
IFRS 16, the expected effects of which are described above.
211
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Financial statements
Notes | Basis of preparation
Further information
2. Basis of consolidation
Deutsche Börse AG’s equity interests in subsidiaries, associates and joint ventures as at 31 Decem-
ber 2018 included in the consolidated financial statements are presented in the following tables.
Unless otherwise stated, the financial information in these tables is presented in accordance with the
generally accepted accounting principles in the companies’ countries of domicile.
Fully consolidated subsidiaries (part 1)
Company
Assam SellerCo, Inc. in Liquidation
Assam SellerCo Service, Inc. in Liquidation3)
Need to Know News, LLC in Liquidation
Börse Frankfurt Zertifikate AG
Clearstream Holding AG
Clearstream Beteiligungs AG
Clearstream International S.A.
Clearstream Banking S.A.
Domicile
New York, USA
New York, USA
Chicago, USA
Frankfurt/Main, Germany
Frankfurt/Main, Germany
Frankfurt/Main, Germany
Luxembourg, Luxembourg
Luxembourg, Luxembourg
Clearstream Banking Japan, Ltd.
Tokyo, Japan
REGIS-TR S.A.
Clearstream Banking AG
Luxembourg, Luxembourg
Frankfurt/Main, Germany
Clearstream Global Securities Services Limited
Cork, Ireland
Clearstream Operations Prague s.r.o.
Prague, Czech Republic
Clearstream Services S.A.
Clearstream Funds Centre Ltd.
DB1 Ventures GmbH
Deutsche Boerse Asia Holding Pte. Ltd.
Eurex Clearing Asia Pte. Ltd.
Eurex Exchange Asia Pte. Ltd.
Luxembourg, Luxembourg
London, United Kingdom
Frankfurt/Main, Germany
Singapore, Singapore
Singapore, Singapore
Singapore, Singapore
Deutsche Boerse Market Data+Services Singapore Pte. Ltd. Singapore, Singapore
Deutsche Boerse Systems Inc.
Chicago, USA
Deutsche Börse Photography Foundation gGmbH
Frankfurt/Main, Germany
Deutsche Börse Services s.r.o.
Eurex Frankfurt AG
Eurex Clearing AG
Prague, Czech Republic
Frankfurt/Main, Germany
Frankfurt/Main, Germany
Eurex Clearing Security Trustee GmbH
Frankfurt/Main, Germany
Eurex Repo GmbH
Frankfurt/Main, Germany
Equity interest
as at
31 Dec 2018
direct/(indirect)
%
100.00
(100.00)
(100.00)
100.00
100.00
(100.00)
(100.00)
(100.00)
(100.00)
(50.00)
(100.00)
(100.00)
(100.00)
(100.00)
(100.00)
100.00
100.00
(100.00)
(100.00)
100.00
100.00
100.00
100.00
100.00
(100.00)
(100.00)
(100.00)
1) Disclosures are based on preliminary and unaudited figures which may be adjusted subsequently.
2) Includes capital reserves and retained earnings, accumulated gains or losses and net profit or loss for the year and, if necessary, further components according
to the respective local GAAP
3) Assam SellerCo Service, Inc. in Liquidation is part of the Assam SellerCo, Inc. in Liquidation subgroup.
4) Before profit transfer or loss absorption
5) Consists of interest and commission results due to business operations
6) Thereof income from profit pooling of Eurex Clearing AG amounting to €8,141 thousand
7) Thereof income from participations amounting to €283,096 thousand (including €192,096 thousand from Clearing Banking S.A. and €91,000 thousand
from Clearstream Banking AG)
212
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Management report
Financial statements
Notes | Basis of preparation
Further information
Currency
Ordinary share
capital1)
thousand
Equity1) 2)
thousand
Total assets1)
thousand
Sales revenue
20181)
thousand
Net profit/loss
20181)
thousand
Initially
consolidated
9,911
n.a.
0
140
22,550
n.a.
2,098
16,594
22,596
n.a.
2,098
22,454
101,000
2,285,314
2,440,263
50
50
0
n.a.
0
19,734
0
0
– 108
n.a.
0
3,023
152,6904)
2009
2009
2009
2013
2007
0
14 Dec 2018
1,345,824
1,391,071
43,9855)
283,9537)
1,263,245
18,277,543
618,2095)
204,280
185,854
230,900
136,095
US$
US$
US$
€
€
€
€
€
JPY
€
€
€
CZK
€
CHF
€
€
€
€
S$
US$
€
CZK
€
€
€
€
50
25,000
92,000
49,000
3,600
25,000
6,211
160,200
30,000
15,000
25
0
10,000
6,000
606
400
25
200
25
3,600
13,310
16,910
462,276
2,459,275
14,498
193,485
129,534
11,482
50
14,063
9,833
633
1,076
44,397
175
22,525
546,144
225,982
108,149
58
14,312
10,470
690
1,332
52,910
216
16,209
304,8335)
39,104
696,772
312,4225)
0
0
0
0
0
19,840
0
13,430
31,7655)
4
391,760
661,102
1,416,597
6,000
1,122,320
1,313,542
25,000
514,813
25,965,525
79
86
22,737
29,733
12,366
3,978
1,501
1 Oct 2018
2002
2002
2009
2010
2002
2014
2008
2002
5,781
4,765
92,707
2,677
9,577
12,419
– 11
– 252
545
– 206
58
– 714
– 44
71,092
18,5376)
8,1414)
0
4,693
2016
2013
2013
2013
2015
2000
2015
2006
1998
1998
2013
2001
213
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Management report
Financial statements
Notes | Basis of preparation
Further information
Fully consolidated subsidiaries (part 2)
Company
Domicile
Eurex Global Derivatives AG3)
Eurex Services GmbH
European Energy Exchange AG
Cleartrade Exchange Pte. Limited
EEX Link GmbH
European Commodity Clearing AG
Zug, Switzerland
Frankfurt/Main, Germany
Leipzig, Germany
Singapore, Singapore
Leipzig, Germany
Leipzig, Germany
European Commodity Clearing Luxembourg S.à r.l.
Luxembourg, Luxembourg
Nodal Exchange Holdings, LLC
Nodal Exchange, LLC
Nodal Clear, LLC
Tysons Corner, USA
Tysons Corner, USA
Tysons Corner, USA
Power Exchange Central Europe a.s.
Prague, Czech Republic
Powernext SAS
EPEX SPOT SE
EPEX Netherlands B.V.
EPEX SPOT Schweiz AG
JV Epex-Soops B.V.
Gaspoint Nordic A/S
PEGAS CEGH Gas Exchange Services GmbH
STOXX Ltd.
STOXX Australia Pty Limited
Tradegate Exchange GmbH
360 Treasury Systems AG
360T Asia Pacific Pte. Ltd.
360TGTX Inc.
360 Trading Networks Inc.
360 Trading Networks LLC
360 Trading Networks Sdn Bhd
Finbird GmbH
Finbird Limited
ThreeSixty Trading Networks (India) Pte. Ltd.
Paris, France
Paris, France
Amsterdam, Netherlands
Bern, Switzerland
Amsterdam, Netherlands
Brøndby, Denmark
Vienna, Austria
Zug, Switzerland
Sydney, Australia
Berlin, Germany
Frankfurt/Main, Germany
Singapore, Singapore
New York, USA
New York, USA
Dubai, United Arab Emirates (UAE)
Kuala Lumpur, Malaysia
Frankfurt/Main, Germany
Jerusalem, Israel
Mumbai, India
Equity interest
as at
31 Dec 2018
direct/(indirect)
%
100.00
100.00
75.054)
(75.05)
(75.05)
(75.05)
(75.05)
(75.05)
(75.05)
(75.05)
(50.03)
(75.05)
(38.27)7)
(38.27)
(38.27)
(22.96)
(75.05)
(38.27)
100.00
(100.00)
80.00
100.00
(100.00)
(100.00)
(100.00)
(100.00)
(100.00)
(100.00)
(100.00)
(100.00)
1) Disclosures are based on preliminary and unaudited figures which may be adjusted subsequently.
2) Includes capital reserves and retained earnings, accumulated gains or losses and net profit or loss for the year and, if necessary, further components according
to the respective local GAAP
3) Disclosures are based on the divergent financial year from 1 April 2018 to 31 December 2018.
4) 62.91 per cent of voting rights held
5) Thereof income from profit pooling of European Commodity Clearing AG amounting to €49,930 thousand
6) Before profit transfer or loss absorption
7) Thereof 8.02 per cent indirectly held via European Energy Exchange AG and 30.25 per cent indirectly held via Powernext SAS
8) Disclosures are based on financial statements as at 31 December 2017.
214
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
Currency
Ordinary share
capital1)
thousand
Equity1) 2)
thousand
Total assets1)
thousand
Sales revenue
20181)
thousand
Net profit/loss
20181)
thousand
Initially
consolidated
€
€
€
US$
€
€
€
US$
US$
US$
CZK
€
€
€
CHF
€
DKK
€
CHF
AU$
€
€
S$
US$
US$
€
MYR
€
ILS
INR
83
25
60,075
21,559
50
1,015
13
0
0
0
30,000
12,584
6,168
0
100
18
2,000
35
1,000
08)
500
128
550
30,000
300
34
0
25
1
300
673,011
698,106
107,083
95,769
98
98
340,295
408,293
2,080
67
2,700
122
108,935
18,602,324
109
156,218
43,689
30,310
52,024
33,456
64,257
0
200
52
2,439
6,986
522,160
657,891
495,362
486,571
65,747
43,015
115,691
278
216
55
2,933
7,302
0
74,562
1,000
184
98,680
39,721
20,481
20,481
13,594
59,579
36,845
83,075
1,683
334
20
3,499
1,921
0
45,4595)
– 1,546
8
49,9306)
27
2,263
6,657
7,171
17,719
13,670
22,177
0
22
– 125
99
231
171,430
221,662
173,041
96,811
958)
2,109
77,035
4,767
28,489
7,794
445
– 82
1,424
– 4,021
75,970
2288)
2,941
98,023
7,039
105,142
8,745
578
84
1,434
3,989
86,553
4638)
3,465
77,115
11,198
10,152
8,683
586
0
0
0
44,991
2012
2007
2014
2014
2016
2014
2014
3 May 2017
3 May 2017
3 May 2017
2016
2015
2015
2016
2015
2015
2016
2016
2009
2015
2010
2015
2015
88)
723
18,885
301
– 3,511
29 Jun 2018
943
64
– 82
138
– 1,054
7,143
2015
2015
25 Aug 2017
2015
2015
2015
215
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
Changes to basis of consolidation
As at 1 January 2018
Additions
Disposals
As at 31 December 2018
Germany
Foreign
Total
20
1
– 4
17
41
2
– 3
40
61
3
– 7
57
Eurex Repo GmbH, Frankfurt/Main, Germany, was merged into Eurex Bonds GmbH, Frankfurt/Main,
Germany, (a wholly owned subsidiary of Eurex Frankfurt AG) effective 1 January 2018 and subsequently
renamed Eurex Repo GmbH. Since Eurex Frankfurt AG, Frankfurt/Main, Germany, (a wholly owned
subsidiary of Deutsche Börse AG) is the sole shareholder of Eurex Repo GmbH, a controlling influence
within the meaning of IFRS 10 continues to be assumed, and the company continues to be fully
consolidated.
Agricultural Commodity Exchange GmbH, EEX Power Derivatives GmbH and Global Environmental
Exchange GmbH (all three in Leipzig, Germany) were merged into European Energy Exchange AG,
Leipzig, Germany, with effect from 1 January 2018. As Deutsche Börse AG continues to hold a
controlling interest in European Energy Exchange AG (EEX), the company continues to be fully
consolidated.
On 29 June 2018, Deutsche Börse Group acquired the GTX Electronic Communication Network (ECN)
business from GAIN Capital Holdings, Inc., Bedminster, USA. Within the scope of the transaction, 360
Treasury Systems AG, Frankfurt / Main, Germany, (a wholly-owned subsidiary of Deutsche Börse AG)
established 360TGTX, Inc., New York City, USA, as a subsidiary, which acquired the GTX ECN business
at a purchase price of US$100.1 million (€85.9 million), by way of an asset deal. Deutsche Börse
Group consolidated the business activities of 360TGTX for the first time as at 29 June 2018.
The purchase price allocation – preliminary as at the reporting date – yielded the following effects:
Goodwill resulting from the business combination with the GTX ECN business
Consideration transferred
Purchase price
Total consideration
Acquired assets and liabilities
Customer relationships
Trade names
Software
Other non-current assets
Other current assets less liabilities
Total assets and liabilities acquired
Goodwill (tax deductible)
Preliminary goodwill
calculation
29 June 2018
€m
85.9
85.9
23.3
1.7
4.5
0.4
2.0
31.9
54.0
216
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
Goodwill resulting from the transaction largely reflects expected cost and revenue synergies from the
business combination.
The full consolidation of the GTX ECN business resulted in an increase of net revenue amounting
to €5.5 million as well as of income after tax amounting to €0.9 million. Due to the structure of the
transaction (asset deal), no pro forma disclosures regarding the effects of a potential initial
consolidation as at 1 January 2018 can be made.
With effect from 1 October 2018, Clearstream International S.A., Luxembourg, acquired 100 per cent
of the shares in Swisscanto Funds Centre Ltd., London, United Kingdom. Since the completion of the
transaction, the acquired entity has been fully consolidated. Effective 2 November 2018, the company
name of the acquired entity was changed to Clearstream Funds Centre Ltd. With this transaction,
Clearstream is extending its range of services in the investment funds area by adding distribution
channels. The consideration paid for the acquisition of the shares was CHF 95.0 million
(€83.3 million), leading to goodwill of €36.5 million.
The purchase price allocation – preliminary as at the reporting date – yielded the following effects:
Goodwill resulting from the business combination with Swisscanto Funds Centre Ltd.
Consideration transferred
Purchase price in cash
Acquired bank balances
Total consideration
Acquired assets and liabilities
Customer relationships
Software
Other intangible assets
Non-current financial assets
Other non-current assets
Current financial assets (without cash)
Other current assets
Tax provisions
Current financial liabilities (without cash deposits by customers)
Deferred tax liabilities on temporary differences
Total assets and liabilities acquired
Goodwill (not tax deductible)
Preliminary
goodwill
calculation
1 October 2018
€m
92.7
– 9.4
83.3
40.8
0.5
0.4
14.7
0.6
16.3
1.7
– 0.4
– 20.6
– 7.2
46.8
36.5
The goodwill resulting from the transaction mainly reflects expected revenue synergies with existing
customers. Due to the expansion of its product range, Clearstream expects to generate revenue from
cross-selling synergies amounting to a low eight-digit sum in euros.
217
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
The full consolidation of Clearstream Funds Centre Ltd. (formerly Swisscanto Funds Centre Ltd.)
resulted in an increase of net revenue amounting to €3.3 million as well as of income after tax
amounting to €0.8 million. If the company had been fully consolidated as at 1 January 2018, this
would have resulted in an increase of net revenue amounting to €12.5 million as well as of
income after tax amounting to €2.0 million.
Eurex Zürich AG, Zurich, Switzerland, was merged into Eurex Global Derivatives AG, Zug, Switzerland,
with effect from 1 October 2018. Since Deutsche Börse AG remains the sole shareholder of Eurex Global
Derivatives AG, a controlling influence within the meaning of IFRS 10 continues to be assumed, and the
company continues to be fully consolidated.
EPEX SPOT Belgium S.A., Brussels, Belgium, was merged into EPEX SPOT SE, Paris, France, with
effect from 31 December 2018. Since European Energy Exchange AG (a 75 per cent subsidiary of
Deutsche Börse AG) exerts a controlling influence within the meaning of IFRS 10 both indirectly via
Powernext SAS (40.31 per cent) as well as directly (10.69 per cent), the company continues to
be fully consolidated.
In the 2018 financial year, the following three companies were liquidated and deconsolidated: APX
Shipping B.V.i.L. (as at 16 April 2018), APX Commodities Limited (as at 18 September 2018) and
Impendium Systems Ltd. (as at 4 December 2018).
By purchase agreement dated 14 December 2018, Clearstream Holding AG, Frankfurt/Main, Germany,
(a wholly owned subsidiary of Deutsche Börse AG) acquired all shares in Skylinehöhe 96 VV AG,
Frankfurt/Main, Germany, at a purchase price of €57 thousand. The company was subsequently
renamed Clearstream Beteiligungs AG. Since Deutsche Börse AG indirectly holds 100 per cent of the
shares, a controlling influence within the meaning of IFRS 10 continues to be assumed, and the
company is fully consolidated.
218
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
Associates
The following table summarises the main financial information of associates; data comprise the
totals of each company according to the local GAAP and not proportional values from the view of
Deutsche Börse Group.
Associates (part 1)
Company
Domicile
Segment
Equity interest
as at
31 Dec 2018
direct/(indirect)
%
Associate
since
BrainTrade Gesellschaft für
Börsensysteme mbH
Frankfurt/Main, Germany
Xetra (cash equities)
(28.58)1)
China Europe International Exchange AG Frankfurt/Main, Germany
Eurex (financial derivatives)
Deutsche Börse Commodities GmbH
Frankfurt/Main, Germany
Xetra (cash equities)
Digital Vega FX Ltd
enermarket GmbH
HQLAx S.à r.l.
LuxCSD S.A.
London, United Kingdom
Eurex (financial derivatives)
Frankfurt/Main, Germany
EEX (commodities)
Luxembourg, Luxembourg
GSF (collateral management)
Luxembourg, Luxembourg
Clearstream (post-trading)
RegTek Solutions Inc.
New York, USA
Data
R5FX Ltd
SEEPEX a.d.
London, United Kingdom
Eurex (financial derivatives)
Tradegate AG Wertpapierhandelsbank
Berlin, Germany
Belgrade, Serbia
EEX (commodities)
Xetra (cash equities)
ZDB Cloud Exchange GmbH in
Liquidation
Eschborn, Germany
Eurex (financial derivatives)
Zimory GmbH in Liquidation
Berlin, Germany
Eurex (financial derivatives)
1) Thereof 14.29 per cent held directly and 14.29 per cent indirectly via Börse Frankfurt Zertifikate AG
40.00
16.20
23.85
(30.02)
28.76
(50.00)
12.50
16.33
(9.57)
19.99
49.90
30.03
2013
2015
2007
2011
2018
2018
2015
2015
2014
2015
2010
2013
2013
Associates (part 2)
Company
Currency
BrainTrade Gesellschaft für
Börsensysteme mbH
China Europe International Exchange AG
Deutsche Börse Commodities GmbH
€
€
€
Digital Vega FX Ltd
enermarket GmbH
HQLAx S.à r.l.
LuxCSD S.A.
RegTek Solutions Inc.
R5FX Ltd
SEEPEX a.d.
Tradegate AG Wertpapierhandelsbank
ZDB Cloud Exchange GmbH
in Liquidation
Zimory GmbH in Liquidation
€
€
€
US$
GBP
RSD
€
€
€
Ordinary
share capital1)
thousand
Assets1)
thousand
Liabilities1)
thousand
Sales
revenue
20181)
thousand
Net
profit/loss
20181)
thousand
1,400
27,000
3,723
13,284
2,027
3,780
101
76
255
– 4,136
1,000
6,518,505
6,511,137
GBP
2,6072)
2,3872)
25
17
6,000
4,857
2
351
3,141
6,547
4,688
477
– 4582)
357
1,331
1,265
2,709
930
13,974
1,5972)
8
0
4,601
5632)
– 599
– 1,550
2,679
427
2,917
– 1,759
38
– 700
5,344
240,000
151,468
155,706
94,300
24,403
160,700
113,330
68,958
17,191
50
263
207
204
78
48
0
0
– 16
– 18
1) Disclosures are based on preliminary and unaudited figures which may be adjusted subsequently.
2) The figures refer to the financial year from 1 December 2017 to 30 November 2018.
219
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
On 1 February 2018, European Energy Exchange AG acquired 40.0 per cent of the voting rights in
enermarket GmbH, Frankfurt/Main, Germany. This resulted in an indirect equity investment of Deutsche
Börse AG amounting to 30.02 per cent.
With effect from 4 July 2018, Deutsche Börse AG sold parts of its interest in PHINEO gAG, Berlin,
Germany, to Phineo Pool GbR, Berlin, Germany. This resulted in a decrease in voting rights to 4 per
cent. Hence, PHINEO gAG is no longer classified as an associate and is accounted for using the
equity method.
On 7 August 2018, Deutsche Börse AG acquired 10.0 per cent of the voting rights in HQLAx S.à r.l.,
Luxembourg. On 5 December 2018, a second tranche was acquired, resulting in an equity investment
of Deutsche Börse AG amounting to 28.76 per cent.
Effective 19 September 2018, Deutsche Börse AG sold its interest in Switex GmbH, Hamburg, Germany.
With effect from 31 December 2018, the purchase agreement to sell Deutsche Börse AG’s shares in
Digital Vega FX Ltd., London, United Kingdom, was signed. However, the Financial Conduct Authority
(FCA), London, United Kingdom, must express its consent before such agreement can take effect.
Where Deutsche Börse Group’s share of the voting rights in a company amounts to less than 20 per
cent, Deutsche Börse Group’s significant influence is exercised in accordance with IAS 28.6 (a) through
the Group’s representation on the supervisory board or the board of directors of the following companies
as well as through corresponding monitoring systems:
Deutsche Börse Commodities GmbH, Frankfurt/Main, Germany
RegTek Solutions Inc., New York, USA
R5FX Ltd, London, United Kingdom
SEEPEX a.d., Belgrade, Serbia
Tradegate AG Wertpapierhandelsbank, Berlin, Germany
220
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
3. Summary of key accounting policies
Deutsche Börse AG’s consolidated financial statements have been prepared in euros, the functional
currency of Deutsche Börse AG. Unless stated otherwise, all amounts are shown in millions of
euros (€m). Due to rounding, the amounts may differ from unrounded figures.
The annual financial statements of subsidiaries included in the consolidated financial statements have
been prepared on the basis of the Group-wide accounting policies based on IFRS that are described in
the following. They were applied consistently to the periods shown.
Adjustments to the presentation of the consolidated income statement
Since 1 January 2018, personnel-related costs for continuing professional development, food and drink
have been reported under “staff costs” in order to improve transparency. Before then, such costs were
contained in other operating expenses. Prior-year figures were restated accordingly. For further details,
see
note 5 and
note 6.
As part of a comprehensive analysis of customer contracts due to the first-time adoption of IFRS 15 as at
1 January 2018, reporting of connectivity and maintenance fees within Deutsche Börse Group has been
harmonised. In this context, €5.1 million from other operating income were reclassified as sales revenue
for the 2017 financial year. For further details, see
note 4.
Effects from the first-time adoption of IFRS 9 “Financial instruments”
Deutsche Börse AG has implemented IFRS 9 as at 1 January 2018. The implementation has resulted in
changes to the accounting principles and the restatement of amounts reported in the consolidated
financial statements. Moreover, Deutsche Börse AG has adjusted the presentation of the consolidated
balance sheet in order to enhance transparency as regards the financial instruments used. Under
the new structure, the measurement categories in accordance with IFRS 9 are directly reflected in the
consolidated balance sheet.
221
Changes arising from
transition to IFRS 9
€m
2.2
– 8.3
0
– 0.4
0
0
0
0
0
0
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
Reclassification of financial assets
31 Dec 2017 (IAS 39)
(restated)
Consolidated balance sheet item
Category
Non-current assets
Other equity investments
Receivables and securities from banking business
Other financial instruments
Other loans
AFS1)
AFS
AFS
AFS
FVPL2) (FV option)
LaR3)
Carrying amount
€m
99.4
1,563.0
14.5
15.1
1.2
0.4
Non-current financial instruments held by central counterparties
Derivatives
4,837.2
Other non-current assets
Total non-current assets
Current assets
–
LaR
Derivatives
4.1
4.5
0.1
6,539.5
– 6.5
Current financial instruments held by central counterparties
LaR
Derivatives
LaR
AFS
Derivatives
LaR
LaR
–
LaR
LaR
LaR
LaR
LaR
Receivables and securities from banking business
Trade receivables
Receivables from related parties
Other current assets
Restricted bank balances
Other cash and bank balances
Total current assets
Total
1) AFS = available for sale
2) FVPL = fair value through profit or loss
3) LaR = loans and receivables
4) FVOCI = fair value through other comprehensive income
5) aAC = at amortised cost
272.0
79,238.7
12,776.8
254.5
5.2
329.4
2.5
451.7
141.8
3.0
1.2
29,392.0
1,297.6
124,166.4
130,705.9
0
0
0
– 0.5
0
1.5
0
0
0
– 1.5
– 1.5
0
0
– 2.0
– 8.5
222
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
Noch mehr
TextPart 2
Dummyzeile
1 Jan 2018 (IFRS 9) Dummytext
Carrying amount Consolidated balance sheet item
€m
#### #####
101.6 Equity investments measured at FVOCI4)
1,554.7 Financial assets measured at amortised cost
14.5 Financial assets measured at amortised cost
14.7 Financial assets at fair value through profit or loss
1.2 Financial assets at fair value through profit or loss
0.4 Financial assets measured at amortised cost
4,837.2 Derivatives
4.1 Other non-current assets
4.5 Financial assets measured at amortised cost
0.1 Derivatives
6,533.0
272.0 Financial assets measured at amortised cost
79,238.7 Derivatives
12,776.8 Financial assets measured at amortised cost
254.0 Financial assets measured at amortised cost
5.2 Derivatives
330.9 Trade receivables
2.5 Trade receivables
451.7 Other current assets
141.8 Financial assets measured at amortised cost
1.5 Financial assets at fair value through profit or loss
– 0.3 Financial liabilities at fair value through profit or loss
29,392.0 Restricted bank balances
1,297.6 Other cash and bank balances
124,164.4
130,697.4
Dummytext
Category
FVOCI
aAC5)
aAC
FVPL
FVPL
aAC
FVPL
–
aAC
FVPL
aAC
FVPL
aAC
aAC
FVPL
aAC
aAC
–
aAC
FVPL
FVPL
aAC
aAC
223
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
The reclassification and the measurement of financial instruments as well as the first-time adoption of
IFRS 15 “Revenue from Contracts with Customers” had the following effects on the revaluation surplus
and accumulated profit of Deutsche Börse Group as at 1 January 2018:
Total impact on shareholders’ equity
Closing balance as at 31 Dec 2017 – IAS 39/IAS 18
Reclassification of equity investments from “available for sale” to “fair value through other
comprehensive incomeˮ
Reclassification of debt investments from “available for sale”
to “at amortised cost
ˮ
Reclassification of financial assets from “available for sale”
to “fair value through profit or loss
ˮ
Change in valuation allowance for trade receivables
Change in valuation allowance for debt investments carried at amortised cost
Recognition of deferred tax assets
Recognition of deferred tax liabilities
Adjustment due to first-time adoption of IFRS 9 as at 1 Jan 2018
Recognition of contract liabilities
Recognition of deferred tax assets
Adjustment due to first-time adoption of IFRS 15 as at 1 Jan 2018
Revaluation
surplus
€m
Accumulated
profit
€m
19.6
3,631.0
3.2
– 8.5
– 2.0
0
0
1.0
1.1
– 5.2
0
0
0
– 1.0
0
1.6
1.5
– 0.3
– 0.7
– 0.1
1.0
– 10.7
2.9
– 7.8
Opening balance as at 1 Jan 2018 – IFRS 9/IFRS 15
14.4
3,624.2
Reclassification of equity instruments from “available for sale” to “fair value through other
comprehensive income (FVOCI)”
Equity instruments categorised as available for sale (€99.4 million) were presented in other equity
investments until 31 December 2017. Since 1 January 2018, they have been shown within the
“equity investments measured at fair value through other comprehensive income (FVOCI)” line item.
All equity instruments recognised as at 1 January 2018 are designated as at FVOCI by
Deutsche Börse Group.
Under IAS 39, equity instruments for which no active market existed and for which no alternative
valuation methods could be applied, were measured at cost. Deutsche Börse Group developed valuation
models to calculate the fair values for these financial assets leading to an increase of €2.2 million in the
amounts shown under “equity investments measured at fair value through other comprehensive income
(FVOCI)”. Foreign-exchange effects amounting to €1.0 million were reclassified from accumulated profit
into revaluation surplus in connection with the allocation of equity investments to “equity investments
measured at fair value through other comprehensive income (FVOCI)”.
224
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
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Financial statements
Notes | Basis of preparation
Further information
Reclassification of debt instruments from “available for sale” to “at amortised cost”
The management of Deutsche Börse Group assessed the business model for the financial assets
classified as available for sale under IAS 39 as at 1 January 2018.
Following the analysis, debt instruments complying with the criteria to solely represent payments of
principal and interest and following the business model “to hold” have been classified to the category
“at amortised cost” and are shown in the “financial assets measured at amortised cost” line item. In
2017, these instruments had been shown as non-current and current receivables and securities from
banking business (€1,563.0 million and €254.5 million, respectively) and as other non-current financial
instruments (€14.5 million). Related fair value gains amounting to €8.5 million were de-recognised
from other comprehensive income and from the related financial assets as at 1 January 2018.
As at 31 December 2018, the fair value of the debt instruments originally recognised in the available-
for-sale category stood at €1,617.9 million. If these instruments had been recognised as available for
sale on 31 December 2018, Deutsche Börse Group would have been obliged to recognise an unrealised
gain of €2.4 million in other comprehensive income.
Reclassification of debt instruments from “available for sale” to “financial assets at fair value
through profit or loss (FVPL)”
Debt instruments that do not meet the criteria to be classified as “at amortised cost” in accordance
with IFRS 9 because their cash flows do not represent solely payments of principal and interest were
reclassified to financial assets at fair value through profit or loss (€15.1 million). As Deutsche Börse
Group applied the “at cost” exemption under IAS 39 for instruments without an active market,
the revaluation at fair value led to a reduction of €0.4 million in accumulated profit. Furthermore, the
measurement of financial instruments at FVPL led to a reduction of €2.0 million of the revaluation
surplus and an increase of accumulated profit in the same amount. These financial instruments were
already measured at fair value before adoption of IFRS 9.
As at 31 December 2018, the fair value of the debt instruments originally recognised in the available-
for-sale category stood at €14.6 million. If these instruments had been recognised as available for sale
on 31 December 2018, Deutsche Börse Group would have been obliged to recognise an unrealised
loss of €1.6 million in other comprehensive income.
Change in provision for trade receivables
For trade receivables, Deutsche Börse Group applies the simplified approach to calculate the expected
credit losses, which requires the use of the lifetime expected loss provision for all trade receivables. The
transfer from the incurred loss model of IAS 39 to the expected loss model of IFRS 9 reduced the
impairment charges for trade receivables by €1.5 million and increased accumulated profit by the same
amount. As at 31 December 2017, impairments recognised for trade receivables amounted to
€5.2 million.
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Change in provision for debt instruments at amortised cost
Debt investments at amortised cost are considered to be generally low risk, and thus the impairment
provision recognised is equal to the twelve-month expected credit loss. The corresponding provision
calculated as at 1 January 2018 amounted to €0.3 million and retained earnings were reduced by the
same amount.
Adjustment regarding the presentation of hybrid financial instruments
Since the new standard no longer provides for a separation of hybrid financial instruments, Deutsche
Börse Group reclassified a total amount of €2.9 million from other liabilities to the items “financial
instruments measured at fair value through profit or loss” and “financial liabilities measured at fair value
through profit or loss”. This reclassification did not affect the Group’s equity.
Change in deferred tax assets
The impact on the deferred taxes is mainly driven by the reclassifications of financial instruments
measured at available for sale under IAS 39 to “amortised cost” under IFRS 9.
Changes resulting from the first-time adoption of IFRS 15
Deutsche Börse Group applied IFRS 15 “Revenue from Contracts with Customers” as issued
in May 2014 and the corresponding clarifications as issued in April 2016. IFRS 15 replaces the
following standards and interpretations on revenue recognition:
IAS 11 “Construction Contracts”
IAS 18 “Revenue”
IFRIC 13 “Customer Loyalty Programmes”
IFRIC 15 “Agreements for the Construction of Real Estate”
IFRIC 18 “Transfers of Assets from Customers”
SIC-31 “Revenue – Barter Transactions Involving Advertising Services”
In accordance with the transition provisions set out in IFRS 15, Deutsche Börse Group has adopted the
new accounting policies according to the modified retrospective approach.
Adjustments to the recognition of revenue from the admission, listing or inclusion of securities
Until 31 December 2017, the admission, listing and inclusion services for securities were each
accounted for as a separate performance obligation, and revenue was recognised when (or as) the
promised service was transferred to the customer and the customer obtained control of such
service. More specifically, this was the point in time when Deutsche Börse’s management resolved
the admission of the respective securities, or when the initial listing took place.
In its updates dated September 2018 and January 2019, the IFRS IC explains that specific fees related
to security admission (as well as listing or inclusion) services do not represent distinct performance
obligations to customers and may therefore not be accounted for separately from the subsequent listing
of the respective securities. The question of how to recognise fees charged before the listing of securities
was – and still is – subject to controversial debate among exchange operators, auditors and other
stakeholders around the world.
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In accordance with the published decisions taken by the IFRS IC, Deutsche Börse Group will allocate
(a) the recognition of fees charged for the listing of securities to the regulated unofficial market (Frei-
verkehr) as well as (b) fees charged for the admission and inclusion of securities with definite maturities
to/in the regulated market to the projected listing periods of the underlying securities; these amendments
will be applied with retrospective effect as from 1 January 2018. Effective 1 January 2018, the
adjustment effects resulting from the accounting method change amounted to €9.3 million and were
netted against Deutsche Börse Group’s equity. Regarding the 2018 financial year, the change in the
accounting method led to an increase in sales revenue of €0.1 million.
Adjustment to the recognition of revenue from a pricing scale agreement
A pricing scale agreement exists for the continual provision of service in the cash market. An average
price is calculated as a basis for the recognition of revenue. Due to the fact that, relatively speaking, a
higher consideration is due on the part of the customer at the beginning of the contract compared to the
services the customer receives during this period, a contract liability must be recognised and dissolved
over the contract period until the end of the contract. The adjustment effect resulting from the change in
the accounting method as at 1 January 2018 amounts to €1.4 million and is offset against equity. With
regard to the 2018 financial year, the change in the accounting method results in an increase of sales
revenue of €0.7 million.
Recognition of revenue and expenses
Revenue from contracts with customers
The accounting treatment of the most important performance obligations of Deutsche Börse Group’s
segments is described below.
Eurex (financial derivatives)
Deutsche Börse Group operates one of the leading global derivatives exchanges as well as one of the
leading clearing houses. Revenue in the derivatives business is generated primarily from fees that are
charged for transactions with regard to the matching/registration, administration and regulation of order
book and off-book transactions on Eurex Deutschland. Additionally, there are connectivity fees. Fees, as
well as any reductions due to discounts and rebates, are specified in price lists and circulars. Rebates
depend mainly on monthly volumes or the monthly fulfilment of liquidity provisioning obligations in
certain products or product groups.
Revenue for transactions in listed derivatives is recognised as soon as contracts are matched/registered
and there is no unfulfilled obligation towards the customer. A receivable is recognised when the
promised service is transferred at a specific point in time, and the entitlement to consideration depends
solely on the passage of time. Transaction fees are invoiced on a monthly basis and are payable when
invoiced. As rebates are granted mainly on a monthly basis, there is no need to recognise a contract
liability. Payments are generally debited directly from the clearing member immediately after invoicing,
which means that there are no financing components.
Fees are also collected for clearing and settlement services provided for off-exchange (over-the-counter,
OTC) transactions and are generated primarily from posting and administration fees. Fees for these
transactions and the related discounts and rebates are also specified in price lists and circulars of Eurex
Clearing AG.
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In the case of OTC transactions, posting fees are recognised at novation on a monthly basis. These fees
are recognised at a specific point in time; namely, when the promised service is transferred at a specific
point in time, and the entitlement to consideration depends solely on the passage of time. OTC
administrative fees are recognised based on a time period as the service is provided until the transaction
has been closed, terminated or has matured. A receivable is recognised monthly based on the usage
within the respective month, provided that the respective position is still open at month end. In general,
the payments are directly debited from the clearing member, which means that there are no financing
components.
Deutsche Börse Group offers a whole range of connectivity options to the trading and clearing platforms.
The customer has use of the company’s service and uses the service as it is performed over the life
of the contract. As the smallest reporting period is the same as the contract term, the performance
progress equals 100 per cent. The connectivity revenue generated from this is usually realised monthly
with invoicing.
EEX (commodities)
The EEX segment operates the central marketplace for energy and other commodity products in Europe.
Its product portfolio comprises contracts on power, natural gas and emission allowances, as well as
freight rates and agricultural products. Revenue is generated primarily from fees that are charged for
exchange trading and clearing of commodity products. Transaction fees are specified in the price list.
Rebates are granted primarily in the form of monthly rebates for the provision of a certain volume or level
of liquidity. These types of rebates are dependent upon the total monthly volume or the monthly
fulfilment of certain liquidity provision obligations.
Revenue is recognised as soon as contracts are matched/registered and there is no unfulfilled obligation
towards the customer as the service has already been performed by this point in time. EEX recognises
receivables when the promised service is provided at a certain time and the entitlement to consideration
depends solely on the passage of time. Most of the invoiced amounts are debited directly from the
clearing members, which means that there are no financing components.
360T (foreign exchange)
Via 360T group, the segment operates one of the biggest independent global multibank and multi-
product trading platforms. 360T is a provider of optimised services covering the entire trading process
of foreign-exchange products. It generates commission income from transaction and access fees payable
for the use of its trading platform. In addition, 360T generates installation fees from the onboarding of
customers on its trading platform, as well as user set-up fees and fees for the programming and
maintenance of necessary interfaces.
Revenue is recognised when the contractually agreed service is provided to the customer. Revenue from
the use of the platform and maintenance fees are recognised on a pro-rata basis.
Access fees, transaction fees, as well as trading platform fees, contain different discount schedules
on a monthly basis. Such discounts are considered accordingly in the month in which the services
are rendered and reduce the sales revenue of such period. They are invoiced on a monthly basis.
Maintenance fees are invoiced on an annual basis.
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Xetra (cash equities)
As a general rule, securities intended for trading on the regulated market of Frankfurter Wertpapierbörse
(FWB, the Frankfurt Stock Exchange) are subject to the admission, listing or inclusion, resolved by
FWB’s Exchange Management. Deutsche Börse AG, as the operator of the public-sector exchange,
charges fees for the admission, listing, inclusion and quotation of securities on the regulated market.
Fees charged for the admission and inclusion of securities with definite maturities on the regulated
market are realised using the projected useful lives of the underlying securities. Accordingly, the fees
charged for the listing of securities on the regulated unofficial market are realised using the projected
useful lives of the underlying securities. The method for measuring performance progress based on the
projected useful life correctly reflects the performance progress until the complete fulfilment of the
performance obligation. Customer invoicing is carried out on a quarterly basis, and receivables are
payable upon invoicing.
Listing fees are levied for the activity of all bodies of FWB, which supervise the trading and the settle-
ment of trades as well as ensure the proper functioning of all trading activities (permanent possibility to
make use of exchange facilities). Listing fees are recurring fees, which are charged for a service that is
delivered over time. Accordingly, revenue is realised on a pro-rata basis. Revenue from fees for listings
on the regulated unofficial market is realised in a similar manner.
For trading cash market products, the same accounting treatment as described within the
(financial derivatives) segment” section applies for the Xetra (cash equities) segment.
“Eurex
Clearstream (post-trading)
Clearstream provides post-trading infrastructure and services; it offers transaction settlement services as
well as administration and custody of securities. The fees are calculated in accordance with the prices
set in the price list as well as with any relevant discounts granted. In accordance with the general terms
and conditions, the customer authorises direct debiting and consequently no financing component has
been identified.
Customers in the custody business receive the benefit from the service provided and consume it at the
same time as the performance is fulfilled during the contract period. The revenue generated from this is
generally realised on a monthly basis upon invoicing.
Fees collected for the administration of securities and for settlement services are recognised when the
agreed service is provided to the customer. This occurs when instructions are received, and the
transactions are processed. The service has been fulfilled at this point in time. Receivables are recognised
if the agreed service is rendered at a specific point in time and the claim to the consideration solely
depends on the course of time. Since discounts are generally granted on a monthly basis, the recognition
of a contractual liability is not necessary. Customers are invoiced on a monthly basis and consideration
is payable when invoiced.
IFS (investment fund services)
The segment provides services to standardise fund processing and to increase efficiency and safety in the
investment fund sector. The services offered comprise order routing, settlement and asset administration,
as well as custody services.
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Revenue is recognised when the promised service is transferred to the customer. This occurs when
instructions are received and the transactions are processed. The service has been fulfilled at this point
in time.
Revenue is recognised based on the price specified in the price list and reduced by the corresponding
rebates. Customers are invoiced on a monthly basis and consideration is payable when invoiced.
In accordance with the general terms and conditions, the customer authorises direct debiting and
consequently no financing component has been identified.
GSF (collateral management)
Via Clearstream, Deutsche Börse Group provides a comprehensive range of global securities financing
(GSF) services with the two most prominent being collateral management and securities lending
services. Customers of collateral management services simultaneously receive and consume the
benefits with the company’s performance of the service.
Revenue is recognised over a certain period of time concurrent with the provision of collateral manage-
ment services. Services in the securities lending business, on the other hand, are provided at a specific
point in time.
STOXX (index business)
STOXX is Deutsche Börse Group’s global index provider that calculates and distributes a comprehensive
index family. Its offering ranges from blue-chip to benchmark to strategy to sustainability to smart-beta
indices. The Group generates revenue from calculating and marketing indices, which financial market
participants use as underlyings for financial instruments or as a benchmark for the performance of
investment funds. Customers simultaneously receive and consume the benefits provided by the entity’s
performance of the service during the contract term. The recognition of revenue for index licences is
based on fixed payments, variable payments (usage-based volumes; mostly assets under management),
or a combination of the two.
For variable payments, customers report their usage, and fees are invoiced in the quarter after usage;
monthly estimates are recognised. This is determined either based on the customer’s average usage over
the previous twelve months, adjusted to take into account current developments in the markets, or based
on the real data in the markets on a customer level. Revenue estimates are revised when warranted by
the circumstances. Increases and decreases in estimated revenue are reflected in the consolidated income
statement in the period in which the circumstances that give rise to the revision become known by
the management.
For two fee components (minimum fee and usage-based fee), a contract liability is recognised and
reduced each month based on the usage that has been recognised each month. Customers are invoiced
on a quarterly basis, and consideration is payable when invoiced.
Data
Market participants subscribe to real-time trading and market signals or licence these services for their
own use, processing, or dissemination. The customer simultaneously receives and consumes the
benefits provided by the entity’s performance during the contract term. Customers report their usage,
and fees are charged in the month after usage. Deutsche Börse Group puts together monthly estimates
that are based on the trend of the preceding months. Revenue estimates are revised when warranted by
the circumstances. Increases and decreases in estimated revenue are reflected in the consolidated
income statement in the period in which the circumstances that give rise to the revision become known
by the management.
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Revenue is recognised based on the price specified in the price list. Customers are invoiced on a
monthly basis, and consideration is payable when invoiced.
Volume-related costs
The “volume-related costs” item comprises expenses that depend, in particular, on the number of certain
trade or settlement transactions, the custody volume, the Global Securities Financing volume, or the
volume of market data acquired or that result from revenue-sharing agreements or maker-taker pricing
models. Volume-related costs are not incurred if the corresponding revenue is no longer generated.
Interest income and expense
Interest income and expense are recognised using the effective interest method over the respective
financial instrument’s term to maturity. Interest income is recognised when it is probable that the
economic benefits associated with the transaction will flow to the entity and the income can be measured
reliably. Interest expense is recognised in the period in which it is incurred. Interest income and expense
from banking business are set off in the consolidated income statement and disclosed separately
in
note 4.
Dividends
Dividends are recognised in net income from strategic investments if the right to receive payment is
based on legally assertable claims.
The consolidated income statement is structured using the nature of expense method.
Research and development costs
Research costs are expensed in the period in which they are incurred. Development costs for an
internally developed intangible asset are only capitalised when the definition and recognition criteria of
an intangible asset and the recognition criteria of an intangible asset generated from development are
met. An intangible asset has to be recognised when it is probable that the expected future economic
benefit will flow to Deutsche Börse Group, and the cost of the asset can be measured reliably. An
intangible asset generated from development has to be recorded when Deutsche Börse Group can
provide evidence of the following:
the technical feasibility of completing the intangible asset so that it will be available for use or sale
the intention to complete development of the intangible asset and use (or sell) it
the ability to use or sell the intangible asset
how the intangible asset will generate probable future economic benefits
the availability of adequate technical, financial and other resources to complete the intangible asset
the ability to reliably measure the costs attributable to the intangible asset during its development
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Development costs that have to be capitalised include direct labour costs, costs of purchased services and
workplace costs, including proportionate overheads that can be directly attributed to the preparation of
the respective asset for use, such as costs for the software development environment. Development costs
that do not meet the requirements for capitalisation are recognised through profit or loss. Interest expense
that cannot be allocated directly to one of the development projects is recognised in profit or loss in the
reporting period and not included in capitalised development costs. If research and development costs
cannot be separated, the expenditures are recognised as expenses in the period in which they are incurred.
All development costs (both primary costs and costs incurred subsequently) are allocated to projects.
The projects are broken down into the following phases in order to decide which cost components must
be capitalised and which cannot be capitalised:
1. Design
Definition of product design
Specification of the expected economic benefit
Initial cost and revenue forecast
2. Detailed specifications
Compilation and review of precise specifications
Troubleshooting process
3. Building and testing
Software programming
Product testing
4. Acceptance
Planning and implementation of acceptance tests
Analysis to identify weak points in functional, operational software
Identification of inefficiencies
5. Simulation
Preparation and implementation of simulation
Compilation and testing of simulation software packages
Compilation and review of documents
6. Roll-out
Planning of product launch
Compilation and dispatch of production systems
Compilation and review of documents
In accordance with IAS 38, only expenses attributable to the “detailed specifications” and “building and
testing” phases are capitalised. All other phases of software development projects are expensed.
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Intangible assets
Capitalised development costs are amortised from the date of first use of the software using the straight-
line method over the asset’s expected useful life. The useful life of internally developed software is
generally assumed to be five years; a useful life of seven years is used as the basis in the case of newly
developed trading platforms and clearing or settlement systems, and for certain enhancements of
these systems.
Purchased software is carried at cost and reduced by amortisation and, where necessary, impairment
losses. Amortisation is charged using the straight-line method over the expected useful life or at most until
the right of use has expired.
Useful life of software
Asset
Standard software
Purchased custom software
Internally developed custom software
Amortisation period
3 to 10 years
3 to 7 years
3 to 7 years
Intangible assets are derecognised on disposal or when no further economic benefits are expected to flow
from them.
The amortisation period for intangible assets with finite useful lives is reviewed at a minimum at
the end of each financial year. If the expected useful life of an asset differs from previous estimates, the
amortisation period is adjusted accordingly.
Goodwill is recognised at cost and tested at least once a year for impairment.
The other intangible assets were largely acquired within the context of business combinations and refer
to exchange licences, trade names and customer relationships. The acquisition costs correspond to the
fair values as at the acquisition date.
Assets with a finite useful life are amortised using the straight-line method over their expected useful life.
Depending on the relevant acquisition transaction, the expected useful life is 5 years for trade names,
4 to 24 years for participant and customer relationships, and 2 to 20 years for other intangible assets.
Assets with an indefinite useful life – exchange licences and transaction-dependent trade names – are
tested for impairment at least once a year.
Since the acquired exchange licences have no time limit on their validity and, in addition, there is an
intention to maintain the exchange licences disclosed as at 31 December 2018 as part of the general
business strategy, an indefinite useful life is assumed. Moreover, it is assumed that the trade name of
STOXX, certain trade names of 360T as well as certain registered trade names of EEX group also have
an indefinite useful life. These umbrella brands benefit from strong brand awareness and are used in the
course of operating activities, so there are no indications that their useful life is limited.
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Property, plant and equipment
Depreciable items of property, plant and equipment are carried at cost less cumulative depreciation. The
straight-line depreciation method is used. Costs of an item of property, plant and equipment comprise
all costs directly attributable to the production process, as well as an appropriate proportion of production
overheads. No borrowing costs were recognised in the reporting period as they could not be directly
allocated to any particular development project.
Useful life of property, plant and equipment
Asset
Computer hardware
Office equipment
Leasehold improvements
Depreciation period
3 to 5 years
5 to 25 years
based on lease term
Repair and maintenance costs are expensed as incurred.
If it is probable that the future economic benefits associated with an item of property, plant and
equipment will flow to the Group and the cost of the asset in question can be reliably determined,
expenditure subsequent to acquisition is added to the carrying amount of the asset as incurred. The
carrying amounts of any parts of an asset that have been replaced are derecognised.
Impairment losses on property, plant and equipment and intangible assets
Specific non-current non-financial assets are tested for impairment. At each reporting date, the Group
assesses whether there are any indications that an asset may be impaired. If this is the case, the carrying
amount is compared with the recoverable amount (the higher of value in use and fair value less costs
of disposal) to determine the amount of any potential impairment.
Value in use is estimated on the basis of the discounted estimated future cash flows from continuing
use of the asset and from its ultimate disposal, before taxes. For this purpose, discount rates are estimated
based on the prevailing pre-tax weighted average cost of capital. If no recoverable amount can be
determined for an asset, the recoverable amount of the cash-generating unit (CGU) to which the asset
can be allocated is determined.
Irrespective of any indications of impairment, intangible assets with indefinite useful lives and intangible
assets not yet available for use must be tested for impairment at least once a year. If the estimated
recoverable amount of the asset or CGU is lower than the respective carrying amount, an impairment
loss is recognised and the net carrying amount of the asset or CGU, respectively, is reduced to its
estimated recoverable amount.
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At the acquisition date, goodwill is allocated to identifiable groups of assets (cash-generating units) or
groups of cash-generating units that are expected to create synergies from the relevant acquisition. If
changes arise in the structure of cash-generating units, for example through a new segmentation,
goodwill is allocated taking into account the relative fair values of the newly defined cash-generating
units. Irrespective of any indications of impairment, these items must be tested for impairment at least
annually at the lowest level of impairment at which Deutsche Börse Group monitors the respective
goodwill. An impairment loss is recognised if the carrying amount of the cash-generating unit to which
goodwill is allocated (including the carrying amount of that goodwill) is higher than the recoverable
amount of this group of assets. The impairment loss is first allocated to the goodwill, then to the other
assets in proportion to their carrying amounts.
A review is conducted at every reporting date to establish whether there are any indications that an
impairment loss recognised on non-current assets (excluding goodwill) in prior periods no longer applies.
If this is the case, the carrying amount of the asset is increased and the difference is recognised in profit
or loss. The maximum amount of this reversal is limited to the carrying amount that would have resulted if
no impairment loss had been recognised in prior periods. Impairment losses on goodwill are not reversed.
Fair value measurement
The fair value of a financial instrument is measured using quoted market prices, if available. If no quoted
market prices are available, observable market prices, for example for interest rates or exchange rates,
are used. This observable market information is then used as inputs for financial valuation techniques,
e.g. option pricing models or discounted cash flow models. In isolated instances, fair value is determined
exclusively on the basis of internal valuation models.
Investments in associates and joint ventures
Investments in associates and joint ventures are measured at cost on initial recognition and accounted
for using the equity method upon subsequent measurement.
Financial instruments
Financial assets since 1 January 2018
Financial assets: recognition and derecognition of financial assets
Financial assets are recognised when the Group or one of its companies becomes a party to a
financial instrument. Regular way purchases and sales of financial assets are generally recognised
and derecognised at the trade date. Purchases and sales of debt instruments classified as
“at amortised cost” and of equities eligible for clearing via the central counterparties (CCPs) of
Deutsche Börse Group are recognised and derecognised at the settlement date.
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Financial assets are derecognised when the contractual rights to the cash flows expire or when the
company transfers these rights in a transaction that transfers substantially all risks and rewards of
ownership of the financial assets.
Clearstream Banking S.A. acts as a principal in securities borrowing and lending transactions in the con-
text of the ASLplus securities lending system. Legally, it operates between the lender and the borrower
without being an economic party to the transaction (transitory items). In these transactions, the securities
borrowed and lent match each other. Consequently, these transactions are not recognised in the consoli-
dated balance sheet.
Financial assets: measurement
Since 1 January 2018, the Group has classified its financial assets according to the following
measurement categories:
fair value (through other comprehensive income or through profit or loss)
amortised cost
The classification depends on the entity’s business model for managing the financial assets and
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recognised in profit or loss or in other com-
prehensive income. For investments in debt instruments, the recognition method will depend on the
business model according to which the investment is held. For investments in equity instruments that
are not held for trading, this will depend on whether Deutsche Börse Group made use of the option
at the time of initial recognition to account for the equity investment at fair value through other com-
prehensive income. The classficiation chosen may not be changed in future periods.
The Group reclassifies debt instruments when – and only when – its business model for managing such
items changes.
Financial assets: initial measurement
At initial recognition, Deutsche Börse Group measures a financial asset at its fair value through profit or
loss. In the case of financial assets measured through other comprehensive income, measurement also
takes into account transaction costs that are directly attributable to the acquisition of the respective
asset. Transaction costs of financial assets carried at fair value through profit or loss are recognised in
profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether
their cash flows are solely payment of principal and interest.
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Financial assets: subsequent measurement of debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the
asset and cash flow characteristics of the respective assets. Deutsche Börse Group allocates each debt
instrument in one of the following categories:
Amortised cost: Assets held for collection of contractual cash flows, where those cash flows represent
solely payments of principal and interest, are measured at amortised cost. A gain or loss on a debt
instrument that is subsequently measured at amortised cost is recognised through profit or loss when
the asset is derecognised or impaired. Interest income from these financial assets is included in financial
income or in net interest income from banking business using the effective interest rate method. Foreign-
exchange gains and losses are shown in other operating income or expenses or in financial income
or expense.
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of con-
tractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely
payments of principal and interest, are measured at FVOCI. Changes in the carrying amount are shown
in other comprehensive income. An exception to this rule is the recognition of impairment gains or
losses, interest revenue and foreign-exchange gains and losses which are recognised in profit or loss.
When a financial asset is derecognised, the cumulative gain or loss previously recognised in other
comprehensive income is reclassified from equity to profit or loss and recognised in other operating
income or expenses. Interest income from these financial assets would be included in financial income
or in net interest income from banking business using the effective interest rate method. Foreign-
exchange gains and losses are presented in other operating income or expenses or in financial income
or expense. Impairment expenses are shown in other operating expenses. The Group did not follow
the business model to hold and to sell in the reporting period. Accordingly, no debt instruments were
classified at FVOCI.
Fair value through profit or loss (FVPL): Financial assets that do not meet the criteria for measurement
at amortised cost or at FVOCI, are measured at FVPL. A gain or loss on a debt investment that is
subsequently measured at FVPL and not part of a hedging relationship is recognised in profit or loss and
included as a net amount in the consolidated income statement within net income from strategic
investments in the period in which it arises.
Financial assets: subsequent measurement of equity instruments
Deutsche Börse Group subsequently measures all equity investments at fair value. Where the Group’s
management opted for presenting fair value gains and losses on equity investments in other
comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit
or loss following the derecognition of the investment. Dividends from such investments are recognised
in profit or loss as net income from strategic investments when the Group’s right to receive payments
is established.
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Changes in the fair value of financial assets measured at fair value through profit or loss are recognised
in net income from strategic investments in the consolidated income statement as applicable.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not
reported separately from other changes in fair value.
As at the reporting date, Deutsche Börse Group has designated all equity instruments as at fair value
through other comprehensive income.
Impairment
The Group assesses the expected credit losses associated with its debt instruments carried at amortised
cost or at FVOCI on a forward-looking basis. The impairment is measured based on an amount equal
to twelve-month expected losses or lifetime expected losses at Deutsche Börse Group. The impairment
methodology applied depends on whether there has been a significant increase in credit risk. A loss
allowance equal to twelve-month expected losses is recognised unless the credit risk on a financial
instrument has increased significantly since initial recognition.
In accordance with IFRS 9, a default is assumed, and a transfer to stage 3 is required when a financial
asset is credit-impaired, i.e. when one or more events that have a detrimental impact on the estimated
future cash flows of that financial asset have occurred. Deutsche Börse Group has identified the
following triggers to identify an event of default and which cause a transfer to stage 3 accordingly:
Legal default: a contractual partner is unable to fulfil its contractual obligation according to an
agreement with Deutsche Börse Group due to insolvency/bankruptcy.
Contractual default: a contractual partner is unable or unwilling to fulfil, in a timely manner, one or
more of its scheduled contractual obligations according to an agreement with Deutsche Börse Group.
The non-fulfilment of the contractual obligation could potentially result in a financial loss for Deutsche
Börse Group.
IFRS 9 sets out that a default is to be assumed if a debtor is past due for more than 90 days. This is
only used as a fallback at Deutsche Börse Group, as the company expects to identify a debtor’s default
based on the above-mentioned criteria at an earlier point in time. For trade receivables, a default is
assumed for amounts which are overdue for more than 360 days.
Financial assets are considered to have low credit risk if listed bonds and other financial investments or
counterparties have an investment-grade credit rating. For financial assets with a low credit risk rating,
a risk provision is calculated that is equal to the twelve-month expected loss.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires
lifetime expected losses to be recognised from initial recognition of the receivables.
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In case there is no reasonable expectation that the outstanding amounts can be collected, receivables are
written off directly. Indicators used to arrive at the “uncollectability assumption” include the following:
Insolvency proceedings are not started due to missing substance of the debtor.
Insolvency proceedings have not resulted in any payment for a period of three years, and there is no
indication that any amount will be received going forward.
Enforcement activities are not pursued by Deutsche Börse Group due to cost-benefit analysis, or
Deutsche Börse Group has tried unsuccessfully to collect the receivable for a period of three years.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits as well as financial assets
that are readily convertible into cash. They are subject to only minor changes in value. Cash and cash
equivalents are measured at amortised cost.
Restricted bank balances mainly include cash deposits by market participants that are invested largely
overnight, mainly at central banks or in the form of reverse repurchase agreements with banks.
Financial assets until 31 December 2017
The Group has opted for retrospective application of IFRS 9 but did not elect to restate prior-year
figures. Accordingly, the presented comparative information continues to be accounted for in line with
the accounting policies previously applied for financial assets. These are set out in the following:
Financial assets: recognition and derecognition
Financial assets were recognised when a Group company became a party to the contractual provisions
of the instrument. Regular purchases and sales of financial assets were generally recognised or
derecognised, respectively, as at the trade date. The purchase and the sale of debt instruments carried at
amortised cost, as well as equity securities that were settled via a central counterparty of Deutsche Börse
Group, were recognised and derecognised, respectively, as at the settlement date.
Financial assets were derecognised when the contractual rights to the cash flows from the financial
asset expired or when the company transferred these rights in a transaction where substantially all the
risks and rewards of ownership of the financial asset were transferred.
Financial assets: initial measurement
Financial assets were initially measured at fair value; in the case of a financial asset that was not
measured at fair value through profit or loss in subsequent periods; this included transaction costs.
If they were settled within one year, they were allocated to current assets. All other financial assets
were allocated to non-current assets.
Financial assets: subsequent measurement of financial assets
Subsequent measurement of financial instruments followed the categories which are described below.
Until the end of 2016, Deutsche Börse Group had not made use of the option to allocate financial assets
to the “held-to-maturity investments” category. In 2017, Deutsche Börse Group applied the option for
the first time to designate financial assets at fair value through profit or loss (the fair value option) for a
convertible bond.
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The financial assets were allocated to the respective categories at initial recognition.
Assets held for trading
Derivatives that were not designated as hedging instruments, as well as financial instruments held by
central counterparties (excluding collateral not yet collected from clearing participants) were measured
at fair value through profit or loss.
If they resulted from banking business, realised and unrealised gains and losses were immediately
recognised in the consolidated income statement as “other operating income”, “other operating
expenses” and “net interest income from banking business” or, if incurred outside the banking business,
as “financial income” and “financial expenses”.
Loans and receivables
Loans and receivables were recognised at amortised cost, taking into account any impairment losses, if
applicable. Premiums and discounts were included in the amortised cost of the instrument concerned
and were amortised using the effective interest method; they were contained in “net interest income from
banking business” if they related to banking business, or in “financial income” and “financial expense”.
Cash and cash equivalents
Cash and cash equivalents comprised cash on hand and demand deposits as well as financial assets
that were readily convertible to cash. They were subject to only minor changes in value. Cash and cash
equivalents were measured at amortised cost.
Restricted bank balances mainly included cash deposits by market participants that were invested largely
overnight, mainly at central banks or in the form of reverse repurchase agreements with banks.
Available-for-sale financial assets
Non-derivative financial assets were classified as “available-for-sale financial assets” if they could not
be allocated to the “loans and receivables” or “assets held for trading” categories.
Available-for-sale financial assets were generally measured at the fair value observable in an active
market. Unrealised gains and losses were recognised directly in equity in the revaluation surplus.
Impairment losses and the effects of exchange rates on monetary items were excluded from this general
principle and were recognised in profit or loss.
Equity instruments for which no active market existed were measured on the basis of current comparable
market transactions, if these were available. If an equity instrument was not traded in an active market
and alternative valuation methods could not be applied to that equity instrument, it was measured at cost,
subject to an impairment test.
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Realised gains and losses were generally recognised in “financial income” or “financial expense”.
Interest income in connection with debt instruments in the banking business was recognised in the
consolidated income statement in “net interest income from banking business” using the effective interest
rate method. Other realised gains and losses were recognised in the consolidated income statement in
“other operating income” and “other operating expenses”.
Derecognition of financial assets
Financial assets were derecognised when the contractual rights to the cash flows expired or when
substantially all the risks and rewards of ownership of the financial assets were transferred.
Clearstream Banking S.A. acts as a principal in securities borrowing and lending transactions in the
context of the ASLplus securities lending system. Legally, it operates between the lender and the borrower
without being an economic party to the transaction (transitory items). In these transactions, the securities
borrowed and lent match each other. Consequently, these transactions were not recognised in the
consolidated balance sheet.
Impairment of financial assets
Financial assets that were not measured at fair value through profit or loss were reviewed at each
reporting date to establish whether there were any indications of impairment.
Deutsche Börse Group had laid down criteria for assessing whether there was evidence of impairment.
These criteria primarily included significant financial difficulties on the part of the debtor and breaches of
contract. In the case of equity instruments, the assessment also took into account the duration and the
amount of the impairment compared with cost. If the decline in value amounted to at least 20 per cent
of the cost or lasted for at least nine months, or if the decline was at least 15 per cent of the cost and
lasted for at least six months, Deutsche Börse Group took this to be evidence of impairment. Impairment
was assumed in the case of debt instruments if there was a significant decline in the issuer’s credit quality.
The amount of an impairment loss for a financial asset measured at amortised cost was the difference
between the carrying amount and the present value of the estimated future cash flows, discounted at
the original effective interest rate. A subsequent reversal was recognised at a maximum at the carrying
amount that would have resulted if no impairment loss had been recognised.
The amount of an impairment loss for a financial asset measured at cost (unlisted equity instruments)
was the difference between the carrying amount and the present value of the estimated future cash flows,
discounted at a current market interest rate. Subsequent reversal was not permitted.
In the case of available-for-sale financial assets, the impairment loss was calculated as the difference
between cost and fair value. Any reduction in fair value previously recognised in equity was
reclassified to profit or loss upon determination of the impairment loss. An impairment loss recognised on
debt instruments was only permitted to be reversed in a subsequent period if the reason for the original
impairment no longer applied.
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Financial liabilities
Financial liabilities are recognised when a Group company becomes a party to the instrument. Purchases
and sales of equities via the central counterparty Eurex Clearing AG are recognised at the settlement date
analogous to financial assets.
Offsetting financial assets and liabilities
Financial assets and liabilities are offset and only the net amount is presented in the consolidated balance
sheet when a Group company currently has a legally enforceable right to set off the recognised amounts
and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial liabilities measured at amortised cost
Financial liabilities not held for trading are carried at amortised cost. The borrowing costs associated with
the placement of financial liabilities are included in the carrying amount and accounted for using the
effective interest method if they are directly attributable. Discounts are amortised over the term of the
liabilities.
Financial liabilities measured at fair value through profit or loss
A forward transaction with a non-controlling shareholder for the acquisition of non-controlling interests
that is settled in cash or by delivering other financial assets is a financial liability recognised at fair value.
It is subsequently measured at fair value through profit or loss. The equity interest attributable to a non-
controlling shareholder underlying the transaction is accounted for as if it had already been acquired at
the time of the transaction.
Derivatives and hedging activities since 1 January 2018
Derivatives are initially recognised at fair value on the date a derivatives contract is entered into and
are subsequently re-measured at their fair value at the end of each reporting period. The accounting
for subsequent changes in fair value depends on whether the derivatives contract is designated as a
hedging instrument.
The Group designates currency or interest rate derivatives as hedges of foreign-exchange risk associated
with the cash flows of highly probable forecast transactions and interest rate swaps if required as hedges
of interest rate risk associated with the expected issuance of fixed interest rate bonds in the future (both
cash flow hedges).
Deutsche Börse Group has not entered into fair value hedges in 2017 or 2018.
At the inception of the hedging transaction, the Group documents the economic relationship between
hedging instruments and hedged items including whether the hedging instrument is expected to offset
changes in cash flows of hedged items. The Group also documents its risk management objective and
strategy for undertaking various hedge transactions at that point in time.
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The fair value of a hedging derivative is classified as a non-current asset or liability when the remaining
maturity of the hedged item is more than twelve months; it is classified as a current asset or liability
when the remaining maturity of the hedged item does not exceed twelve months.
Cash flow hedges that qualify for hedge accounting
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is recognised in other comprehensive income, limited to the cumulative change in fair value
of the hedged item on a present value basis from the inception of the hedge. The gain or loss relating to
the ineffective portion is recognised immediately in profit or loss within net interest income from banking
business or within financial income or expense.
Amounts accumulated in other comprehensive income are reclassified in the periods when the hedged
item affects profit or loss, as follows:
The amount accumulated in the cash flow hedge reserve is reclassified to profit or loss as a
reclassification adjustment in the same period or periods during which the hedged future cash flows
affect profit or loss. If that amount is a loss and Deutsche Börse Group expects that the entirety or
a portion of that loss will not be recovered in one or more future periods, it immediately reclassifies
the amount that is not expected to be recovered into profit or loss as a reclassification adjustment.
The gain or loss relating to the effective portion of the interest rate-related instruments hedging fixed-
rate borrowings is recognised in profit or loss within “financial expenses”.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the
criteria for hedge accounting, the Group discontinues hedge accounting. When the forecast transaction
is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were
reported in equity are immediately reclassified to profit or loss.
Hedge ineffectiveness is recognised in profit or loss within net interest income from banking business
or financial income or expenses.
Hedges of a net investment in a foreign operation
The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is
recognised in other comprehensive income. It is recognised in profit or loss when the foreign operation
is sold. The ineffective portion of the gain or loss on the hedging instrument is recognised immediately
in the consolidated income statement.
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Derivatives and hedges (until 31 December 2017)
Derivatives were used to hedge interest rate risk or currency risk. All derivatives were carried at their
fair values.
Hedge accounting was used for derivatives that were part of a hedging relationship determined
to be highly effective and for which certain conditions were met. This related in particular to the
documentation of the hedging relationship and the risk strategy and to how reliably effectiveness
could be measured.
Cash flow hedges
The portion of the gain or loss on the hedging instrument determined to be highly effective was
recognised in other comprehensive income. This gain or loss ultimately adjusted the value of the hedged
cash flow, i.e. the gain or loss on the hedging instrument was recognised in profit or loss when the
hedged item was recognised in the balance sheet or in profit or loss. The ineffective portion of the gain
or loss was recognised immediately in the consolidated income statement.
Fair value hedges
The gain or loss on the hedging instrument, together with the gain or loss on the hedged item (underlying)
attributable to the hedged risk, was recognised immediately in the consolidated income statement.
Any gain or loss on the hedged item adjusted its carrying amount.
Hedges of a net investment in a foreign operation
The effective portion of the gain or loss from a hedging transaction that was designated as a highly
effective hedge was recognised in other comprehensive income. It was recognised in profit or loss when
the foreign operation was sold. The ineffective portion of the gain or loss was recognised immediately
in the consolidated income statement.
Derivatives that were not part of a hedging relationship
Gains or losses on derivative instruments that were not part of a highly effective hedging relationship
were recognised immediately in the consolidated income statement.
Financial instruments held by central counterparties
European Commodity Clearing AG, Nodal Clear, LLC and Eurex Clearing AG act as central
counterparties:
Eurex Clearing AG guarantees the settlement of all transactions involving futures and options on Eurex
Deutschland. It also guarantees the settlement of all transactions for Eurex Repo (repo trading platform),
certain exchange transactions in equities on Frankfurter Wertpapierbörse (FWB, the Frankfurt Stock
Exchange) and certain cash market transactions on the Irish Stock Exchange. Eurex Clearing AG also
guarantees the settlement of off-order-book trades entered for clearing in the trading systems of the
Eurex exchanges, Eurex Bonds, Eurex Repo, the Frankfurt Stock Exchange and the Irish Stock
Exchange. In addition, Eurex Clearing AG clears over-the-counter (OTC) interest rate derivatives and
securities lending transactions, where these meet the specified novation criteria.
European Commodity Clearing AG guarantees the settlement of spot and derivatives transactions at the
trading venues of EEX group and the connected partner exchanges.
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Nodal Clear, LLC was acquired by European Energy Exchange in 2017 as part of Nodal Exchange
group. Nodal Clear, LLC is a Derivatives Clearing Organisation (DCO) registered in the United States
and is the central counterparty for all transactions executed on Nodal Exchange.
The transactions of the clearing houses are only executed between the respective clearing house and
a clearing member.
In accordance with IFRS 9, purchases and sales of equities and bonds via the Eurex Clearing AG central
counterparty are recognised and simultaneously derecognised at the settlement date.
For products that are marked to market (futures, options on futures as well as OTC interest-rate
deriva-tives), the clearing houses recognise gains and losses on open positions of clearing members on
each exchange day. By means of the variation margin, profits and losses on open positions resulting from
market price fluctuations are settled on a daily basis. The difference between this and other margin
types is that the variation margin does not comprise collateral, but is a daily offsetting of profits and losses
in cash. Therefore, futures and OTC interest rate derivatives are not reported in the consolidated
balance sheet.
“Traditional” options, for which the buyer must pay the option premium in full upon purchase, are carried
in the consolidated balance sheet at fair value. Receivables and liabilities from repo transactions and
from cash-collateralised securities lending transactions are classified as held for trading and carried at
fair value.
“Financial instruments held by central counterparties” are reported as non-current if the remaining
maturity of the underlying transactions exceeds twelve months at the reporting date.
The fair values recognised in the consolidated balance sheet are based on daily settlement prices. These
are calculated and published by the clearing house in accordance with the rules set out in the contract
specifications (see also the clearing conditions of the respective clearing house).
Cash or securities collateral held by central counterparties
As the clearing houses of the Deutsche Börse Group guarantee the settlement of all traded contracts,
they have established multi-level collateral systems. The central pillar of the collateral systems is the
determination of the overall risk per clearing member (margin) to be covered by cash or securities
collateral. Losses calculated on the basis of current prices and potential future price risks are covered up
to the date of the next collateral payment.
In addition to these daily collateral payments, each clearing member must make contributions to the
respective default fund (for further details, see the
Cash collateral is reported in the consolidated balance sheet under “cash deposits by market participants”
and the corresponding amounts under “restricted bank balances”.
risk report in the combined management report).
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Securities collateral is generally not derecognised by the clearing member providing the collateral, as the
opportunities and risks associated with the securities are not transferred to the secure party. Recognition
at the secure party is only permissible if the clearing member providing the transfer is in default
according to the underlying contract.
Treasury shares
The treasury shares held by Deutsche Börse AG at the reporting date are deducted directly from share-
holders’ equity. Gains or losses on treasury shares are recognised in other comprehensive income.
The transaction costs directly attributable to the acquisition of treasury shares are accounted for as
a deduction from shareholders’ equity (net of any related income tax benefit).
Non-current assets held for sale, disposal groups and discontinued operations
Non-current assets that are available for immediate sale in their present condition, and whose sale is
highly probable within a reasonable period of time, are classified as “non-current assets held for sale”.
A transaction is highly probable if measures for the sale have already been initiated and the relevant
bodies have adopted the corresponding resolutions. Disposal groups may comprise current and
non-current assets, and the corresponding liabilities, which fulfil the criteria provided above and which
are to be sold and discontinued. Income and expenses from non-current assets held for sale are
recognised within continuing operations, provided such items are not included in net profit from
discontinued operations.
Discontinued operations exclusively comprise assets and liabilities which are to be sold, entirely or
partly, as part of an individual plan or are to be abandoned. Furthermore, discontinued operations are
assets or liabilities of major lines of business or geographical areas of operations. Every line of business
or geographical area of operation must be identifiable for operational and accounting purposes. Net
profit from discontinued operations is recognised in the period in which it is incurred, and is disclosed
separately in the consolidated income statement and the consolidated statement of comprehensive
income. The corresponding cash flows are disclosed separately in the consolidated cash flow statement.
Furthermore, the figures disclosed in the previous year’s income statement and cash flow statement
have been restated accordingly.
Pensions and other employee benefits
Pensions and other employee benefits relate to defined contribution and defined benefit pension plans.
Defined contribution plans
There are defined contribution plans as part of the occupational pension system using pension funds and
similar pension institutions, as well as on the basis of 401(k) plans. In addition, contributions are paid to
the statutory pension insurance scheme. The level of contributions is normally determined in relation to
income. As a rule, no provisions are recognised for defined contribution plans. The contributions paid are
reported as pension expenses in the year of payment.
There are defined contribution pension plans for employees in several countries. In addition, the
employer pays contributions to employees’ private pension funds.
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Multi-employer plans
Several Deutsche Börse Group companies are, along with other financial institutions, member institu-
tions of BVV Versicherungsverein des Bankgewerbes a.G. (BVV), a pension insurance provider with a
registered office in Berlin, Germany. Employees and employers make regular contributions, which are
used to provide guaranteed pension plans and a potential surplus. The contributions to be made are
calculated based on contribution rates applied to active employees’ monthly gross salaries, taking into
account specific financial thresholds. Member institutions are liable in the second degree regarding the
fulfilment of BVV’s agreed pension benefits. However, we consider the risk that said liability would
actually be utilised as remote. Given that BVV membership is governed by a Works Council Agreement,
membership termination is subject to certain conditions. Deutsche Börse Group considers BVV pension
obligations as multi-employer defined benefit pension plans (leistungsorientierte Pläne). However,
the Group currently lacks information regarding the allocation of BVV assets to individual member
institutions and the respective beneficiaries, as well as regarding Deutsche Börse Group’s actual share in
BVV’s total obligations. Hence, Deutsche Börse Group discloses this plan as a defined contribution plan
(“beitragsorientierter Plan”). Based on its latest publications, BVV does not suffer any deficient cover
with a potential impact on Deutsche Börse Group’s future contributions.
EPEX Netherlands B.V. participates in the ABP pension fund within the EEX subgroup. Participation is
mandatory for all employees. Employer contributions are calculated by ABP and adjusted, if necessary.
This pension plan was reported as a defined contribution plan, given the limited information regarding
the allocation of fund assets to member institutions and beneficiaries.
Defined benefit plans
Provisions for pension obligations are measured separately for each pension plan, using the projected
unit credit method on the basis of actuarial opinions. The fair value of plan assets is deducted from the
present value of pension obligations, reflecting the asset ceiling rules if there are any excess plan assets.
This results in the net defined benefit liability or asset. Net interest expense for the financial year is
calculated by applying the discount rate determined at the beginning of the financial year to the net
defined benefit liability determined as at that date.
The relevant discount rate is determined by reference to the return on long-term corporate bonds with a
rating of at least AA (Moody’s Investors Service, S&P Global Ratings, Fitch Ratings and Dominion Bond
Rating Service) on the basis of the information provided by Bloomberg, and a maturity that corresponds
approximately to the maturity of the pension obligations. Moreover, the bonds must be denominated in
the same currency as the underlying pension obligation. Measurement of the pension obligations in
euros is, in principle, based on a discount rate of 1.75 per cent, which is determined according to the
Towers Watson “GlobalRate:Link” methodology updated in line with the current market trend.
Actuarial gains or losses resulting from changes in expectations with regard to life expectancy, pension
trends, salary trends and the discount rate as compared with the estimate at the beginning of the period
or compared with the actual development during the period are recognised directly in other comprehensive
income. Actuarial gains and losses recognised in other comprehensive income may not be reclassified to
profit or loss in subsequent periods. Similarly, differences between the (interest) income on plan assets
determined at the beginning of the period and the return on plan assets actually recorded at the end of
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the period are also recognised directly in other comprehensive income. The actuarial gains
or losses and the difference between the expected and the actual return or loss on plan assets are
recognised in the revaluation surplus.
Other long-term benefits for employees and members of executive boards (total disability pension,
transitional payments and surviving dependants’ pensions) are also measured using the projected unit
credit method. Actuarial gains and losses and past service cost are recognised immediately and in full
through profit or loss.
Other provisions
Provisions are recognised if the Group has a present obligation from an event in the past, it is probable
that there will be an outflow of resources embodying economic benefits to settle the obligation and the
amount of this obligation can be estimated reliably. The amount of the provision corresponds to the best
estimate of the expenditure required to settle the obligation at the reporting date.
A restructuring provision is only recognised when an entity has a detailed formal plan for the restructuring
and has raised a valid expectation in those affected that the restructuring measures will be implemented,
for example, by starting to implement such plan or by announcing its principal features to those affected.
Provisions in the context of the programme resolved in 2018 to reduce structural costs (Structural
Performance Improvement Programme, SPIP) as well as provisions recognised for contractually agreed
early retirement agreements and severance agreements, are recorded in other provisions.
Contingent liabilities are not recognised, but rather disclosed unless the possibility of an outflow of
resources embodying economic benefits is remote.
Share-based payment
Deutsche Börse Group operates the Group Share Plan (GSP), the Stock Bonus Plan (SBP), the
Co-Performance Investment Plan (CPIP) and the Performance Share Plan (PSP) as well as the Long-term
Sustainable Instrument (LSI) and the Restricted Stock Units (RSU), which provide share-based
payment components for employees, senior executives and executive board members.
Group Share Plan (GSP)
Under the GSP, shares are generally granted at a discount to the market price to the non-executive staff of
Deutsche Börse AG and of participating subsidiaries who have been employed on a non-temporary
basis since at least 31 March of the previous year. The expense of this discount is recognised in the
income statement at the grant date.
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Stock Bonus Plan (SBP)
The SBP for senior executives of Deutsche Börse AG and of participating subsidiaries grants a long-term
remuneration component in the form of so-called SBP shares. These are generally accounted for as share-
based payments for which Deutsche Börse AG has a choice of settlement in cash or equity instruments
for certain tranches. Tranches due in previous years were each settled in cash. Regarding the 2018
tranche, cash settlement has been agreed upon too. Under these circumstances, it is presently presumed
in accordance with IFRS 2 that all SBP shares will be settled in cash. Accordingly, Deutsche Börse Group
has measured the SBP shares as cash-settled share-based payment transactions. The cost of the options
is estimated using an option pricing model (fair value measurement) and recognised in staff costs in the
consolidated income statement. Any right to payment of a stock bonus only vests after the expiration of the
service or performance period of four years on which the plan is based.
Performance Share Plan (PSP)
The PSP was launched in financial year 2016 for members of the Executive Board of Deutsche Börse AG
as well as selected senior executives and employees of Deutsche Börse AG and of participating
subsidiaries. The number of phantom PSP shares to be allocated is calculated based on the number
of shares granted and the increase of net profit for the period attributable to Deutsche Börse AG share-
holders, as well as on the relative performance of the total shareholder return (TSR) on Deutsche Börse
AG’s shares compared with the total shareholder return of the STOXX Europe 600 Financials Index
constituents. The shares are subject to a performance period of five years. The subsequent payment
of the stock bonus will be settled in cash. For further details on this plan, please see the
governing the PSP and assessing target achievement for performance shares” section in the
remuneration report.
“Principles
Long-term Sustainable Instrument (LSI)
In order to meet regulatory requirements, the LSI for risk takers (employees whose professional activities
have a material impact on the operations of institutions) was introduced in financial year 2014 (see
note 28). LSI shares are generally settled in cash. Regarding the 2014 tranche, the respective com-
panies have the option to fulfil their obligations by delivering shares of Deutsche Börse AG. The remaining
tranches will be settled in cash. Deutsche Börse Group thus measures the LSI shares as cash-settled
share-based payment transactions. The options are measured using an option pricing model (fair value
measurement). Any right to payment of a stock bonus only vests after the expiration of the one-year
service period on which the plan is based, taking certain waiting periods into account.
Restricted Stock Units (RSU)
Like the LSI plan, the RSU plan applies to risk takers within Deutsche Börse Group. RSU shares are
settled in cash; Deutsche Börse Group thus measures the RSU shares as cash-settled share-based
payment transactions. The options are measured using an option pricing model (fair value measure-
ment). Any right to payment of a stock bonus only vests after the expiration of the one-year service
period on which the plan is based, taking a three-year retention period and a one-year waiting period
into account.
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Deferred tax assets and liabilities
Deferred tax assets and liabilities are computed using the balance sheet liability approach. The deferred
tax calculation is based on temporary differences between the carrying amounts of assets and liabilities
in the IFRS financial statements and their tax base that will lead to a future tax liability or benefit when
assets are used or sold or liabilities are settled.
The deferred tax assets or liabilities are measured using the tax rates that are currently expected to apply
when the temporary differences reverse, based on tax rates that have been enacted or substantively
enacted by the reporting date. Deferred tax assets are recognised for the unused tax loss carryforwards
only to the extent that it is probable that future taxable profit will be available. Deferred tax assets and
deferred tax liabilities are offset where a legally enforceable right to set off current tax assets against
current tax liabilities exists, and the deferred tax assets and deferred tax liabilities relate to income taxes
levied by the same taxation authority.
Leases
Leases are classified as operating leases or finance leases. A lease is classified as a finance lease
if it transfers substantially all the risks and rewards incidental to ownership of the asset from the lessor
to the lessee. All other leases are classified as operating leases.
Leased assets and the associated liabilities are recognised at the lower of the fair value and present
value of the minimum lease payments if the criteria for classification as a finance lease are met. The
leased asset is depreciated or amortised using the straight-line method over its useful life or the lease
term, if shorter. In subsequent periods, the liability is measured using the effective interest method.
Expenses incurred in connection with operating leases are recognised as an expense on a straight-line
basis over the lease term.
For details regarding changes to the accounting of leases as of 1 January 2019, see
note 1.
Consolidation
Deutsche Börse AG and all subsidiaries directly or indirectly controlled by Deutsche Börse AG are included
in the consolidated financial statements. Deutsche Börse AG controls a company if it is exposed to variable
returns resulting from its involvement with the company in question or has rights to such returns and is
able to influence them by using its power over the company.
Initial consolidation of subsidiaries in the course of business combinations uses the purchase method.
The acquiree’s identifiable assets, liabilities and contingent liabilities are recognised at their acquisition
date fair values. Any excess of cost over the acquirer’s interest in the fair value of the subsidiary’s net
identifiable assets is recognised as goodwill. Goodwill is reported in subsequent periods at cost less
accumulated impairment losses.
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Notes | Basis of preparation
Further information
Intra-Group assets and liabilities are eliminated. Income arising from intra-Group transactions is
eliminated against the corresponding expenses. Intermediate profits or losses arising from deliveries
of intra-Group goods and services, as well as dividends distributed within the Group, are eliminated.
Deferred taxes for consolidation adjustments are recognised where these are expected to reverse in
subsequent years.
Interests in equity attributable to non-controlling interest shareholders are carried under “non-controlling
interests” within equity. Where these are classified as “puttable instruments”, they are reported under
“liabilities”.
Currency translation
Transactions denominated in a currency other than a company’s functional currency are translated into
the functional currency at the spot exchange rate applicable at the transaction date. At the reporting date,
monetary balance sheet items in foreign currency are measured at the exchange rate at the reporting
date, while non-monetary balance sheet items recognised at historical cost are measured at the exchange
rate on the transaction date. Non-monetary balance sheet items measured at fair value are translated at
the exchange rate prevailing at the valuation date. Exchange rate differences are recorded as other operating
income or expenses in the period in which they arise unless the underlying transactions are hedged.
Gains and losses from a monetary item that forms part of a net investment in a foreign operation are
recognised directly in “accumulated profit”.
The annual financial statements of companies whose functional currency is not the euro are translated
into the reporting currency as follows: assets and liabilities are translated into euros at the closing rate.
The items in the consolidated income statement are translated at the average exchange rates for the
reporting period. Resulting exchange differences are recognised directly in “accumulated profit”. When the
relevant subsidiary is sold, these exchange rate differences are recognised in the net profit for the period
in which the deconsolidation gain or loss is realised.
The following euro exchange rates of consequence to Deutsche Börse Group were applied:
Exchange rates
Swiss francs
US dollars
Czech koruna
Singapore dollar
British pound
Average rate
2018
Average rate
2017
Closing price as
at 31 Dec 2018
Closing price as
at 31 Dec 2017
CHF
USD (US$)
CZK
SGD
GBP (£)
1.1512
1.1801
1.1155
1.1360
1.1264
1.1433
1.1680
1.1969
25.6605
26.2997
25.7315
25.5683
1.5907
0.8863
1.5605
0.8750
1.5577
0.8978
1.5990
0.8860
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Financial statements
Notes | Basis of preparation
Further information
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the
carrying amounts of assets and liabilities arising from initial consolidation are reported in the functional
currency of the foreign operation and translated at the closing rate.
Estimates, measurement uncertainties and discretionary judgements
The application of accounting policies, the presentation of assets and liabilities, and the recognition
of income and expenses requires the Executive Board to make discretionary judgements and estimates.
Adjustments in this context are taken into account in the period the change was made,
as well as in subsequent periods, where necessary.
Impairment of non-financial assets
Deutsche Börse Group tests goodwill, as well as intangible assets with indefinite useful lives, and
intangible assets not yet available for use for impairment at least once a year. Certain assumptions have to
be made to determine the recoverable amount, which is calculated regularly using discounted cash flow
models. This is based on the relevant business plans with a detailed planning period of up to five years.
These plans, in turn, contain assumptions about the future financial performance of the assets and cash-
generating units. If their actual financial performance differs from these assumptions then corresponding
adjustments may be necessary. For further information on the effects of changes in the discount rate, as
well as on further assumptions, please see
note 11.
Financial instruments
Since financial instruments are measured at fair value, there is discretion in the determination of the
fair value of unlisted instruments. In this context, Deutsche Börse Group makes partial use of internal
measurement models where the parameters and assumptions may deviate from the actual results
in the future.
Pensions and other employee benefits
Pensions and other employee benefits are measured using the projected unit credit method, which
calculates the actuarial present value of the accumulated benefit obligation. Calculating the present value
requires certain actuarial assumptions (e.g. discount rate, staff turnover rate, salary and pension trends)
to be made. The current service cost and the net interest expense or income for the subsequent period are
calculated on the basis of these assumptions. Any departures from these assumptions, for example,
because of changes in the macroeconomic environment, are recognised in other comprehensive income
in the following financial year. A sensitivity analysis of the key factors is presented in
note 17.
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Notes | Basis of preparation
Further information
Income taxes
Deutsche Börse Group is subject to the tax laws of those countries in which it operates and generates
income. Considerable discretion has to be exercised in determining the tax provisions. For a large
number of transactions and calculations, no definitive tax-relevant information is available at the time
these figures are determined. Deutsche Börse Group recognises corresponding provisions for risks
expected from external tax audits. If the final results of these external audits differ from the estimates, the
resulting effects on current and deferred taxes are recognised in the period in which they become known.
Legal risks
The companies of Deutsche Börse Group are subject to litigation. Such litigation may lead to orders to pay
against the entities of the Group. If it is more likely than not that an outflow of resources will occur, a
provision will be recognised based on an estimate of the most probable amount necessary to settle the
obligation if such amount is reasonably estimable. The management of the entity affected must judge
whether the possible obligation results from a past event, as well as evaluate the probability of a cash
outflow and estimate its amount. As the outcome of litigation is usually uncertain, the judgement is
reviewed continuously. For further information on other risks please see
note 26.
Share-based payments
Note 28 contains disclosures on the valuation model used for the stock options and subscription rights.
Adjustments are necessary to the extent that the estimates of the valuation parameters originally applied
differ from the actual values at the time the options or subscription rights were exercised; such adjustments
are based on cash-settled share-based payment transactions recognised in the consolidated income
statement in the respective reporting period.
Provisions
When recognising provisions for expected losses from rental agreements the probability of utilisation is
estimated (see
were made, for example, with regard to the fluctuation rate, the discount rate and salary trends. Adjust-
ments may be necessary if the actual values were to deviate from these assumptions.
note 19). In recognising personnel-related restructuring provisions, certain assumptions
253
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
Further information
Consolidated income statement disclosures
4. Net revenue
Composition of net revenue (part 1)
Sales revenue
Net interest income from banking
business
2017
(restated)
€m
2018
€m
2017
€m
Xetra (cash equities)
Trading and clearing
Listing
Other
Eurex (financial derivatives)
Equity index derivatives
Interest rate derivatives
Equity derivatives
OTC clearing
Margin fees
Infrastructure
Other
EEX (commodities)
Power derivatives
Power spot
Gas
Other
360T (foreign exchange)
Trading
Other
2018
€m
187.6
17.5
40.3
245.4
514.2
233.6
49.8
23.6
13.4
74.2
26.8
182.3
15.5
41.7
239.5
433.1
209.7
41.9
9.1
12.5
73.1
21.2
935.6
800.6
88.2
67.3
44.9
71.0
69.0
63.0
38.8
59.2
271.4
230.0
70.1
6.6
76.7
57.0
10.0
67.0
0
0
0
0
0
0
0
0
40.2
0
– 0.1
40.1
5.9
0
0
3.0
8.9
0
0
0
0
0
0
0
0
0
0
0
25.2
0
0
25.2
0.6
0
0
0.5
1.1
0
0
0
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Executive and Supervisory Boards
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Financial statements
Notes | Consolidated income statement disclosures
Further information
Dummyzeile
####
Dummyzeile
Other operating income
Volume-related costs
Net revenue
2018
€m
5.3
0.8
0
6.1
0.1
0.1
0
3.6
– 3.6
0
21.4
21.6
0
0
0
1.3
1.3
0
5.5
5.5
2017
(restated)
€m
####
6.3
0.4
0.1
6.8
0.2
0.1
0
2.0
– 2.0
0
23.7
24.0
0
0
0
0.5
0.5
0
0
0
2018
€m
– 22.3
– 0.5
0
– 22.8
– 48.1
– 1.8
– 6.0
– 1.6
0
0
– 3.7
– 61.2
– 12.0
– 0.2
– 8.3
– 4.5
– 25.0
– 3.4
0
– 3.4
2017
€m
####
– 27.5
– 0.5
0
– 28.0
– 43.6
– 1.7
– 5.5
– 0.3
0
0
– 2.2
– 53.3
– 9.7
– 0.5
– 8.0
– 1.2
– 19.4
– 0.5
0
– 0.5
2018
€m
170.6
17.8
40.3
228.7
466.2
231.9
43.8
25.6
50.0
74.2
44.4
2017
€m
####
161.1
15.4
41.8
218.3
389.7
208.1
36.4
10.8
35.7
73.1
42.7
936.1
796.5
82.1
67.1
36.6
70.8
256.6
66.7
12.1
78.8
59.9
62.5
30.8
59.0
212.2
56.5
10.0
66.5
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
Further information
Composition of net revenue (part 2)
Net revenue
Net interest income from banking business
Clearstream (post-trading)
Custody
Settlement
Net interest income from banking business
Third-party services
Other
GSF (collateral management)
Repo
Securities lending
IFS (investment fund services)
Custody
Settlement
Other
Data
Cash and derivatives
Regulatory services
Other
STOXX (index business)
ETF licences
Exchange licences
Other licences
2018
€m
514.9
113.2
0
32.5
97.4
758.0
44.2
91.8
136.0
68.5
52.6
41.2
162.3
127.8
19.8
49.7
197.3
47.3
34.2
77.1
158.6
2017
(restated)
€m
515.9
114.4
0
29.2
91.9
751.4
43.0
90.1
133.1
62.7
48.8
33.5
145.0
122.6
13.2
43.1
178.9
45.4
30.6
65.3
141.3
2018
€m
0
0
2017
€m
0
0
155.5
106.3
0
0
0
0
155.5
106.3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
2,941.3
2,686.8
204.5
132.6
Consolidation of internal revenue
– 47.4
– 43.2
0
0
Group
2,893.9
2,643.6
204.5
132.6
256
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Financial statements
Notes | Consolidated income statement disclosures
Further information
Other operating income
Volume-related costs
Net revenue
Dummyzeile
2018
€m
1.7
0
0
0
11.1
12.8
0
0
0
0
0
0
0
0
0
0.4
0.4
0
0
0.1
0.1
2017
(restated)
€m
0.7
0
0
0
6.5
7.2
0
0
0
0.1
0
0
0.1
0
0
1.0
1.0
0
0
0.3
0.3
2018
€m
– 133.8
– 37.2
0
– 0.4
– 27.6
– 199.0
– 0.9
– 52.0
– 52.9
– 2.6
– 3.2
– 2.2
– 8.0
– 14.2
– 2.0
– 11.2
– 27.4
– 3.5
– 2.9
– 7.8
– 14.2
2017
€m
– 131.5
– 34.9
0
– 0.5
– 30.3
– 197.2
– 0.6
– 50.9
– 51.5
– 1.5
– 3.6
– 2.4
– 7.5
– 13.8
– 2.5
– 9.4
– 25.7
– 3.9
– 3.5
– 6.5
– 13.9
2018
€m
382.8
76.0
155.5
32.1
80.9
727.3
43.3
39.8
83.1
65.9
49.4
39.0
154.3
113.6
17.8
38.9
170.3
43.8
31.3
69.4
144.5
2017
€m
385.1
79.5
106.3
28.7
68.1
667.7
42.4
39.2
81.6
61.3
45.2
31.1
137.6
108.8
10.7
34.7
154.2
41.5
27.1
59.1
127.7
47.8
39.9
– 413.9
– 397.0
2,779.7
2,462.3
– 13.8
– 13.6
61.2
56.8
0
0
34.0
26.3
– 352.7
– 340.2
2,779.7
2,462.3
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
Further information
Composition of net interest income from banking business
Interest income from positive interest environment
Financial instruments measured at amortised cost
Financial assets or liabilities measured at fair value through profit or loss
Interest expenses from positive interest environment
Financial liabilities measured at amortised cost
Financial assets or liabilities measured at fair value through profit or loss
Interest income from negative interest environment
Financial instruments measured at amortised cost
Financial assets or liabilities measured at fair value through profit or loss
Interest expenses from negative interest environment
Financial liabilities measured at amortised cost
Financial assets or liabilities measured at fair value through profit or loss
Total
2018
€m
216.3
161.6
54.7
– 64.9
– 53.4
– 11.5
224.7
219.5
5.2
– 171.6
– 169.9
– 1.7
204.5
2017
(restated)1)
€m
129.1
90.7
38.4
– 36.1
– 31.5
– 4.6
224.8
217.2
7.6
– 185.2
– 182.9
– 2.3
132.6
1) Due to changes in the presentation of balance-sheet positions in accordance with IFRS 9, prior-year figures have been restated. For details, see
note 3.
Composition of other operating income
Income from exchange rate differences
Income from impaired receivables
Rental income from subleases
Income from agency agreements
Miscellaneous
Total
2018
€m
4.6
0.6
1.1
0.5
27.2
34.0
2017
(restated)1)
€m
2.6
1.2
0.8
1.7
20.0
26.3
1) €5.1 million from other operating income were reclassified as sales revenue for the 2017 financial year. For details, see
note 3.
For details of expected rental income from subleases see
note 27.
Miscellaneous other operating income includes income from cooperation agreements, training and
services rendered according to progress made on a project as well as valuation adjustments.
As part of a comprehensive analysis of customer contracts due to the first-time adoption of IFRS 15 as at
1 January 2018, reporting of connectivity and maintenance fees within Deutsche Börse Group has been
harmonised. In this context, €5.1 million from other operating income were reclassified as sales revenue
for the 2017 financial year. Prior-year figures were restated accordingly.
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Executive and Supervisory Boards
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Notes | Consolidated income statement disclosures
Further information
5. Staff costs
Composition of staff costs
Wages and salaries
Social security contributions, retirement and other benefits
Total
2018
€m
660.1
163.9
824.0
2017
(restated)
€m
528.0
122.5
650.5
Staff costs include costs of €158.2 million (2017: €26.4 million) recognised in connection with
efficiency programmes as well as costs of €2.0 million (2017: €3.1 million) for Nodal Exchange
Holdings, LLC, Tysons Corner, Virginia, USA, (Nodal Exchange, which has been consolidated since
3 May 2017), of €3.0 million (2017: nil) for 360TGTX Inc., New York, USA (which has been
consolidated since 29 June 2018) and of €1.0 million (2017: nil) for Clearstream Funds Centre Ltd.
(which has been consolidated since 1 October 2018).
Since 1 January 2018, personnel-related costs for continuing professional development, food and drink
have been reported under “staff costs” in order to improve transparency. Before then, such costs were
contained in other operating expenses. Prior-year figures were restated accordingly.
6. Other operating expenses
Composition of other operating expenses
Costs for IT service providers and other consulting services
IT costs
Premises expenses
Non-recoverable input tax
Travel, entertainment and corporate hospitality expenses
Advertising and marketing costs
Insurance premiums, contributions and fees
Voluntary social benefits
Cost of exchange rate differences
Supervisory Board remuneration
Cost of agency agreements
Miscellaneous
Total
2018
€m
164.9
123.0
80.0
44.3
22.7
22.6
15.8
5.6
5.2
4.5
0.3
27.3
516.2
2017
(restated)
€m
162.5
108.3
75.6
47.1
23.4
19.8
13.0
4.1
4.3
4.2
0.5
18.3
481.1
Costs for IT service providers and other consulting services relate mainly to expenses in conjunction with
software development. An analysis of development costs is presented in
contain costs of strategic and legal consulting services as well as of audit activities. Prior-year figures
were restated in order to improve transparency. For details, see note 5.
note 7. These costs also
259
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
Further information
Composition of fees paid to the auditor
Statutory audit services
Other assurance or valuation services
Tax advisory services
Other services
Total
1) Thereof €0.1 million for 2017
2) Thereof €0.2 million for 2017
3) Thereof €0.3 million for 2016
4) Thereof €0.2 million for 2016
2018
2017
Total
€m
4.31)
1.22)
0.3
0
5.8
Germany
€m
2.6
0.8
0.2
0
3.6
Total
€m
4.03)
0.74)
0.9
0.1
5.7
Germany
€m
2.3
0.6
0.2
0
3.1
Fees paid for “statutory audit services” rendered by KPMG AG Wirtschaftsprüfungsgesellschaft mainly
comprise the audit of the consolidated financial statements of Deutsche Börse AG according to IFRS, of
the annual financial statements of Deutsche Börse AG according to the Handelsgesetzbuch (HGB,
German Commercial Code) and of the annual financial statements of various subsidiaries according to
the respective local GAAP and IFRS. This item also includes statutory additions to the audit scope as
well as key points of audit agreed with the Supervisory Board. Services rendered during the reporting
year also included reviews of the interim financial statements.
“Other assurance and valuation services” comprise fees paid in connection with ISAE 3402 and ISAE
3000 reports. Fees for “tax advisory services” include support services rendered in connection with
completing tax returns as well as value-added tax advice on individual matters. The item “other services”
comprises fees paid for training and quality-assurance services.
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Executive and Supervisory Boards
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Financial statements
Notes | Consolidated income statement disclosures
Further information
7. Research and development costs
Own expenses capitalised relate solely to development costs of internally developed software, involving
the following systems and projects in the individual segments:
Research and development costs (part 1)
Eurex (financial derivatives)
T7 derivatives trading platform
C7
OTC Clear
Eurex Clearing Prisma
Securities Lending
F7
Other Eurex software
EEX (commodities)
XBID / M7
Other EEX software
360T (foreign exchange)
Trading platform of 360T group
Xetra (cash equities)
T7 trading platform for the cash market
CCP releases
Other Xetra software
Clearstream (post-trading)
Local Market Partnership (LMP)
1CAS Custody
CSDR
TARGET2-Securities (T2S)
One CLS Settlement Reporting (One CSR)
Customer onboarding
Other Clearstream software
Total expense for
software development
of which capitalised
2018
€m
2017
(restated)1)
€m
2018
€m
2017
(restated)1)
€m
7.2
8.6
9.1
0.6
5.0
1.8
3.6
5.3
6.7
3.3
0
4.5
0
8.8
5.1
5.2
5.7
0.4
2.3
1.3
0.4
4.0
5.4
1.2
0
1.6
0
2.6
35.9
28.6
20.4
14.8
1.7
11.2
12.9
3.9
3.9
4.3
0
0.6
4.9
3.5
4.2
21.6
2.4
0
6.6
4.8
43.1
7.5
11.7
19.2
9.7
9.7
5.1
1.8
6.3
13.2
4.2
16.6
12.6
11.9
3.0
0
4.1
52.4
0.7
8.5
9.2
3.0
3.0
2.7
0
0
2.7
2.9
3.1
21.2
0.9
0
5.7
1.9
2.1
4.7
6.8
4.9
4.9
2.6
0
1.3
3.9
3.7
14.8
10.1
8.4
2.2
0
1.7
35.7
40.9
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
Further information
Research and development costs (part 2)
Total expense for
software development
of which capitalised
2018
€m
2017
(restated)1)
€m
2018
€m
2017
(restated)1)
€m
IFS (investment fund services)
IFS Arrow
IFS Unity
IFS Swift
Other IFS software
GSF (collateral management)
One CMS
Customer onboarding
One SecLend
Other GSF software
STOXX (index business)
Other STOXX software
Data
Regulatory Reporting Hub
Other Data software
2.0
3.8
0
0.5
6.3
0.2
0.7
0
0.6
1.5
3.0
3.0
16.3
0.6
16.9
0.6
0
2.8
0
3.4
1.3
0
1.7
0
3.0
3.9
3.9
12.7
6.5
19.2
Research expense
2.4
1.8
1.5
2.9
0
0
4.4
0.2
0.6
0
0.2
1.0
0
0
3.6
0.2
3.8
0
0.5
0
2.2
0
2.7
1.0
0
1.6
0
2.6
0
0
10.5
0
10.5
0
Total
130.8
154.4
80.2
87.1
1) Prior-year figures were restated due to changes in the segment structure. For details, see note 24.
262
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Further information
8. Net income from strategic investments
Composition of net income from strategic investments
Equity method-accounted result of associates
China Europe International Exchange AG
Deutsche Börse Commodities GmbH
Digital Vega FX Ltd
enermarket GmbH
HQLAx S.à r.l.
LuxCSD S.A.
R5FX Ltd
RegTek Solutions Inc.
Switex GmbH
Tradegate AG Wertpapierhandelsbank
Total income from equity method measurement1)
Net income from other strategic investments
Net income from strategic investments
1) Including impairment losses
2018
€m
– 2.0
0.8
0.1
– 0.2
– 0.5
– 0.2
0
– 0.1
– 0.1
4.9
2.7
2017
€m
– 2.5
0.7
0
0
0
0
– 1.1
– 0.2
0.1
4.6
1.6
1.5
196.2
4.2
197.8
Net income from associates includes an impairment loss amounting to €0.6 million attributable to the
investment in Switex GmbH (2017: impairment loss of €1.1 million attributable to the investment in
R5FX Ltd). The investment was written down to the value of the selling price received. The impairment
loss was allocated to the Data segment. The impairment loss was offset by net income from the equity
method measurement of Switex GmbH amounting to €0.5 million.
During the year under review, the company received dividends amounting to €3.8 million (2017:
€2.8 million) from investments in associates.
For the development of net income from other strategic investments please refer to
note 13.2.
263
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9. Financial result
Due to the changes to the accounting method in the context of the first-time application of IFRS 9,
financial income and expenses for the reporting year and the previous year are shown in separate tables.
Prior-year figures have not been restated to reflect the new accounting method.
Composition of financial income in 2018
Income from other financial assets measured at fair value through profit or loss
Interest income from financial assets measured at amortised cost
Interest income on tax refunds
Other interest income and similar income
Total
Composition of financial income in 2017
Interest income on tax refunds
Income from valuation of derivatives classified as “held for trading”
Other interest income on receivables classified as “loans and receivables”
Interest on bank balances classified as “loans and receivables”
Income from available-for-sale securities
Other interest and similar income
Total
Composition of financial expense in 2018
Interest expense from financial liabilities measured at amortised cost
Interest expense on taxes
Interest expense from financial assets measured at amortised cost
Expense of the unwinding of the discount on pension provisions
Transaction cost of financial liabilities measured at amortised cost
Other interest expense
Interest-equivalent expenses for derivatives held as hedging instruments
Expense from other financial liabilities measured at fair value through profit or loss
Total
2018
€m
0.3
1.0
6.0
0.1
7.4
2017
€m
3.1
2.0
0.5
0.4
0.4
0.2
6.6
2018
€m
47.5
26.7
3.1
2.5
1.8
1.4
0.7
0.1
83.8
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Composition of financial expense in 2017
Interest expense on non-current loans1)
Interest expense on taxes
Other interest expense1)
Interest expense from financial assets1)
Transaction costs of non-current liabilities1)
Interest-equivalent expenses for derivatives held as hedging instrument1)
Expenses from the unwinding of the discount on pension provisions
Interest expense on current liabilities1)
Total
1) Measured at amortised cost
10. Income tax expense
Composition of income tax expense
Current income tax expense
for the current year
for previous years
Deferred income tax expense/(income)
due to temporary differences
due to tax loss carryforwards
due to changes in tax legislation and/or tax rates
for previous years
Total
Allocation of income tax expense to Germany and foreign jurisdictions
Current income tax expense
Germany
Foreign jurisdictions
Deferred income tax expense/(income)
Germany
Foreign jurisdictions
Total
2017
€m
47.5
21.2
5.3
3.6
3.1
2.8
2.7
0.1
86.3
2017
€m
412.0
376.2
35.8
– 20.6
– 18.4
0.1
– 2.7
0.4
391.4
2017
€m
412.0
213.8
198.2
– 20.6
– 51.4
30.8
391.4
2018
€m
339.7
320.5
19.2
– 36.0
– 12.0
– 1.6
– 22.4
0
303.7
2018
€m
339.7
237.7
102.0
– 36.0
– 5.9
– 30.1
303.7
Tax rates of 27.4 to 31.9 per cent (2017: 27.4 to 31.9 per cent) were used in the reporting period to
calculate income tax for the German companies of Deutsche Börse Group. These reflect trade income tax
at rates of 11.6 to 16.1 per cent (2017: 11.6 to 16.1 per cent), corporation tax of 15 per cent (2017:
15 per cent) and the 5.5 per cent solidarity surcharge (2017: 5.5 per cent) on corporation tax.
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A tax rate of 26.0 per cent (2017: 27.1 per cent) was used for the Luxembourgian Group companies,
reflecting trade income tax at a rate of 6.7 per cent (2017: 6.7 per cent) and corporation tax at 19.3 per
cent (2017: 20.4 per cent).
Tax rates of 10.0 to 34.0 per cent (2017: 12.5 to 46.0 per cent) were applied to the Group companies
in the remaining countries; see
note 2.
In the year under review, Deutsche Börse Group did not utilise any previously unrecognised tax loss
carryforwards (2017: decline in current tax expenses of €0.1 million).
Deferred tax income increased by €0.7 million (2017: nil) due to previously unrecognised tax losses.
The following table shows the carrying amounts of deferred tax assets and liabilities as at the reporting
date by line item or loss carryforward:
Composition of deferred taxes
Intangible assets
Internally developed software
Other intangible assets
Financial assets
Other assets
Provisions for pensions and other employee benefits
Other provisions
Liabilities
Tax loss carryforwards
Deferred taxes (before netting)
Thereof recognised in profit or loss
Thereof recognised in other comprehensive income2)
Deferred taxes set off
Total
Deferred tax assets
Deferred tax liabilities
31 Dec 2018
€m
31 Dec 20171)
€m
31 Dec 2018
€m
31 Dec 20171)
€m
50.3
43.0
7.3
0.3
3.7
61.4
13.9
3.8
2.8
136.2
87.3
48.9
– 31.9
104.3
56.0
48.4
7.6
0
5.0
59.8
8.4
0.9
1.2
131.3
85.5
45.8
– 30.2
101.1
– 210.9
– 31.8
– 179.1
– 2.3
– 2.4
– 8.7
– 0.1
– 2.0
0
– 226.4
– 224.5
– 1.9
31.9
– 238.8
– 41.7
– 197.1
– 3.7
0
– 12.4
– 0.7
– 1.4
0
– 257.0
– 253.2
– 3.8
30.2
– 194.5
– 226.8
1) The presentation of items was modified compared to the previous year. Prior-year figures were restated accordingly. Deferred taxes were restated as at
1 January 2018 due to the first-time adoption of IFRS 9 and IFRS 15; see note 3.
2) See note 15 for further information on deferred taxes recognised in other comprehensive income.
Short-term elements of deferred taxes are recognised in non-current assets and liabilities, in line with
IAS 1 “Presentation of Financial Statements”.
At the end of the reporting period, accumulated unused tax losses amounted to €30.5 million (2017:
€33.7 million), for which no deferred tax assets were recognised. The unused tax losses are attributable
to domestic losses totalling €0.2 million and to foreign tax losses totalling €30.3 million (2017:
domestic tax losses €0.9 million, foreign tax losses €32.8 million).
266
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Further information
The losses can be carried forward indefinitely in Germany subject to the minimum taxation rules. In
the US, losses may be carried forward for a maximum period of 20 years, provided they were incurred
before 1 January 2018. In accordance with the latest tax reform in the US, adopted at the end of
December 2017, losses incurred after 31 December 2017 may be carried forward indefinitely, taking
into account newly introduced minimum taxation rules. In all other countries, losses can be carried
forward indefinitely.
There were no unrecognised deferred tax liabilities on future dividends of subsidiaries and associates
or on gains from the disposal of subsidiaries and associates in the reporting period (2017: nil).
Reconciliation of expected with reported tax expense
Earnings before tax (EBT)
Expected tax expense
Effects of different tax rates
Effects of non-deductible expenses
Effects of tax-exempt income
Tax effects from loss carryforwards
Changes in valuation allowance for deferred tax assets
Effects from changes in tax rates
Effects from intra-Group restructuring
Other
Income tax expense arising from the current year
Income taxes for previous years
Income tax expense
2018
€m
2017
€m
1,156.8
1,288.9
312.3
– 20.5
13.1
– 9.4
1.0
0
– 5.1
– 10.9
4.0
284.5
19.2
303.7
348.0
17.2
13.7
– 7.7
1.6
– 0.5
– 2.7
– 21.2
6.8
355.2
36.2
391.4
To determine the expected tax expense, earnings before tax have been multiplied by the composite tax
rate of 27 per cent assumed for 2018 (2017: 27 per cent).
As at 31 December 2018, the reported tax rate stood at 26.3 per cent (2017: 30.4 per cent).
267
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Further information
Consolidated balance sheet disclosures
11. Intangible assets
Intangible assets (part 1)
Purchased
software
€m
Internally
developed
software
€m
Payments on
account and
construction in
progress1)
€m
Other
intangible
assets
€m
Goodwill
€m
Total
€m
260.6
782.4
2,721.1
184.3
931.5
4,879.9
0
17.7
– 2.0
0.8
0.8
3.5
37.1
0
144.7
– 1.8
56.5
0
0
0
– 6.7
2.2
50.1
– 0.9
– 145.5
– 0.2
84.4
1.2
0
0
– 7.5
146.6
106.1
– 2.9
0
– 15.4
277.9
965.9
2,770.9
90.0
1,009.6
5,114.3
5.0
0
90.6
0
13.2
– 107.2
0
0
– 0.5
36.4
0
74.0
0.3
0
0
0
0
4.1
0
0
44.8
– 0.3
– 74.0
0
66.2
161.8
0
0.4
– 1.4
0
4.3
– 0.5
94.8
– 108.9
0
8.7
188.9
1,076.1
2,865.6
60.5
1,079.1
5,270.2
Historical cost as at
1 Jan 2017
Acquisitions from business
combinations
Additions
Disposals
Reclassifications
Exchange rate differences
Historical cost as at
31 Dec 2017
Acquisitions through
business combinations2)
Disposals due to
changes to the
basis of consolidation
Additions
Disposals
Reclassifications
Exchange rate differences
Historical cost as at
31 Dec 2018
1) Additions to payments on account and construction in the previous year relate exclusively to internally developed software.
2) This relates primarily to additions within the scope of initial consolidation of 360TGTX Inc. and Clearstream Funds Centre Ltd., see
note 2.
268
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Further information
Intangible assets (part 2)
Transfer historical cost
as at 31 Dec 2018
Amortisation and impairment
losses as at 1 Jan 2017
Amortisation
Impairment losses
Disposals
Exchange rate differences
Amortisation and impairment
losses as at 31 Dec 2017
Amortisation
Impairment losses
Disposals due to
changes to the
basis of consolidation
225.1
17.5
0
– 1.8
0.5
241.3
18.6
0
0
Purchased
software
€m
Internally
developed
software
€m
Payments on
account and
construction in
progress1)
€m
Other
intangible
assets
€m
Goodwill
€m
Total
€m
188.9
1,076.1
2,865.6
60.5
1,079.1
5,270.2
608.5
72.3
0
0
– 0.4
680.4
79.4
31.5
– 0.4
0
0
0
0
0
0
0
0
0
0
0
0
2.7
0
1.3
– 0.8
0
3.2
0
5.2
0
– 0.2
71.6
26.8
0
0
0
98.4
29.4
0
0
– 1.4
907.9
116.6
1.3
– 2.6
0.1
1,023.3
127.4
36.7
– 0.4
– 108.4
8.2
126.4
1,078.6
Disposals
– 106.8
Amortisation and impairment
losses as at 31 Dec 2018
153.1
790.9
Carrying amount
as at 31 Dec 2017
Carrying amount
as at 31 Dec 2018
36.6
285.5
2,770.9
86.8
911.2
4,091.0
35.8
285.2
2,865.6
52.3
952.7
4,191.6
1) Additions to payments on account and construction in progress in the previous year relate exclusively to internally developed software.
269
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Further information
Software, payments on account and construction in progress
Additions to software mainly relate to the implementation of the European Central Securities
Depositories Regulation (CSDR) in the Clearstream (post-trading) segment and the development
of the foreign-exchange trading platform in the 360T (foreign exchange) segment.
Carrying amounts of material software and construction in progress as well as remaining
amortisation periods of software applications
Carrying amount1) as at
Remaining amortisation
period as at
31 Dec 2018 31 Dec 2017 31 Dec 2018 31 Dec 2017
years
years
€m
€m
Eurex (financial derivatives)
C7
T7 trading platform for derivatives
Eurex Clearing Prisma
OTC CCP
Clearstream (post-trading)
TARGET2-Securities (T2S)
1CAS Custody & Portal
CSDR
One CLS Settlement Reporting (One CSR)
Single Network
360T (foreign exchange)
Trading platform of 360T group
Xetra (cash equities)
T7 trading platform for the cash markets
TARGET2-Securities (T2S)2)
36.9
20.5
16.8
11.9
71.8
37.9
31.3
10.8
7.4
38.9
23.4
23.4
10.5
85.7
39.5
10.1
12.8
8.8
2.5 – 4.9
3.5 – 5.4
0.9 – 4.9
0.9 – 4.9
1.3 – 4.7
2.3 – 4.9
0.3 – 4.9
0.4 – 4.9
3.9 – 5.1
4.9 – 6.1
6.2
n.a.
5.1 – 6.2
5.1
n.a.
n.a.
6.1
6.1
18.5
14.3
1.8 – 6.9
2.8 – 6.9
8.4
5.7
6.7
8.5
3.9 – 5.5
4.9 – 6.5
2.0
4.1
1) Individual releases of a software application are combined and reported as a single asset.
2) TARGET2-Securities is the interface between the CCP system of Deutsche Börse Group and the TARGET2-Securities system of the European Central Bank. Due to
a new estimate as at the end of the 2018 financial year, the remaining useful life of TARGET2-Securities was shortened by one year.
All intangible assets are subject to event-driven impairment testing procedures. In addition, intangible
assets that are not yet ready for use are tested for impairment at least annually. Based on this,
impairment losses totalling €36.7 million (2017: €1.3 million) were recognised in 2018. They are
disclosed in the “depreciation, amortisation and impairment losses” item and relate mainly to the
following assets or cash-generating units (CGUs):
An impairment loss of €16.0 million (recoverable amount: negative) in the second quarter of 2018
relates to the carrying amount of the Regulatory Reporting Hub IT platform. This was due to significant
adjustments to the platform made to meet changed requirements. As a response to this, Deutsche
Börse Group has been continuously readjusting its software since the third quarter of 2018 to
accommodate the changed requirements.
270
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Financial statements
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Further information
An impairment loss of €9.4 million in the fourth quarter of 2018 relates to the post-trading area
(recoverable amount: €29.5 million) on the level of the “Future Market Access” CGU. This was mainly
due to market participants’ lower than expected acceptance of subordinate services offered by
Clearstream (e.g. segregated accounts). The impairment loss was proportionally allocated to the
intangible assets of the CGU. Due to an internal restructuring of Clearstream’s product portfolio and
in order to distinguish it more clearly from other business areas, the CGU was considered at a more
granular level compared to the previous year.
Further impairment losses totalling €5.4 million in the fourth quarter of 2018 (recoverable amount:
each negative) relate to three assets from the securities financing business: One SecLend, One CMS and
LH Connect. For each of these assets, actual revenue fell short of expectations. Concerning One SecLend
and One CMS, the company had expected that the migration to the TARGET2-Securities platform
would materially increase demand – especially from larger customers – for services in the areas of
interoperability, collateral pooling and CeBM Triparty Services. However, this has not materialised and is
not expected to materialise in 2019. The impairment loss for LH Connect was mainly caused by
reduced demand for the liquidity pool, which is offered by Clearstream’s agent banks.
An additional impairment loss of €4.0 million (recoverable amount: negative) in the fourth quarter
of 2018 relates to capitalised development costs for the IFS Arrow project. This was also due to a lack
of demand.
The recoverable amount for the above-mentioned software or CGUs was determined based on fair value
less costs of disposal, using a discounted cash flow model (level 3 inputs). The applied maturity-specific
discounts range from 5.8 to 7.2 per cent. For details on the allocation of the impairment losses to
Deutsche Börse Group’s reporting segments, see
note 24.
Goodwill and other intangible assets from business combinations
Given the change in Deutsche Börse Group’s segment structure, effective 1 January 2018, and the
corresponding split of (groups of) CGUs, including the respective goodwill allocation, the Group
reallocated the corresponding carrying amounts. The reallocation was made on the basis of the ratio
between the fair value of the new (group of) CGU(s) to the fair value of the existing (group of) CGU(s).
The following table provides details on the reallocation of goodwill to the corresponding (group of)
CGU(s), as well as its development:
Changes in goodwill classified by (groups of) CGUs in 2018
Eurex
€m
Clear-
stream
€m
360T
€m
GSF
€m
EEX
€m
IFS
€m
Data
€m
Index
€m
Xetra
€m
Total
€m
1,293.4
969.0
189.2
142.1
113.2
19.6
19.3
18.4
6.7
2,770.9
0
0.1
54.0
0.1
0
0.9
0
0
0
36.5
0
0
2.4
0.5
0.1
0.1
0
0
90.6
4.1
1,293.5
969.1
244.1
142.1
115.6
56.6
19.4
18.5
6.7
2,865.6
Balance as at
1 Jan 2018
Acquisitions
through business
combinations
Exchange rate
differences
Balance as at
31 Dec 2018
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Further information
Changes in goodwill classified by (groups of) CGUs in 2017
Eurex
Core
€m
Clearstream
Core
€m
360T
€m
EEX
€m
MD+S
segment
€m
Fund
Services
€m
Börse
Frankfurt
Zertifikate
€m
Total
€m
1,279.9
1,111.1
189.2
61.6
55.1
19.6
4.6
2,721.1
0
0
0
0
0
0
56.5
0
– 5.0
– 1.7
0
0
0
0
56.5
– 6.7
1,279.9
1,111.1
189.2
113.1
53.4
19.6
4.6
2,770.9
Balance as at
1 Jan 2017
Acquisitions through
business
combinations
Exchange rate
differences
Balance as at
31 Dec 2017
Other intangible assets are divided into the following categories:
Changes in other intangible assets by category
Balance as at 1 Jan 2017
Acquisitions through business combinations
Additions
Amortisation
Exchange rate differences
Balance as at 31 Dec 2017
Acquisitions through business combinations
Exchange rate differences
Amortisation
Exchange rate differences
Balance as at 31 Dec 2018
Exchange
licences
Trade names
Member and
customer
relationships
Miscellaneous
intangible
assets
€m
0.7
24.5
0
0
– 2.2
23.0
0
0
0
1.0
24.0
€m
453.8
4.9
0
– 0.1
– 0.4
458.2
1.7
0
– 0.1
0.2
460.0
€m
400.9
55.0
0.4
– 25.7
– 4.9
425.7
64.1
0
– 28.2
3.1
464.7
€m
4.5
0
0.8
– 1.0
0
4.3
0.4
0.4
– 1.1
0
4.0
Total
€m
859.9
84.4
1.2
– 26.8
– 7.5
911.2
66.2
0.4
– 29.4
4.3
952.7
An impairment test is carried out, at least annually, concerning goodwill and certain other intangible
assets with an indefinite useful life. Since these assets do not generate any cash inflows that are largely
independent of those from other assets, the recoverable amount is determined for the (group of) CGUs
that the respective asset is allocated to. Impairment tests for (group of) CGUs with allocated goodwill are
carried out on 30 September every financial year. Due to the acquisition of Swisscanto Funds Centre Ltd.
in the fourth quarter of 2018, the IFS (investment fund services) CGU was subject to another impairment
test, effective 31 December 2018. The recoverable amount of the (groups of) CGUs was determined
based on the fair value less costs to sell. Only if the fair value less costs to sell did not exceed the carry-
ing amount, the value in use was determined. Given that no active market was available for the (groups
of) CGUs, the determination of fair values less costs to sell was based on the discounted cash flow
272
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
method (level 3 input factors). The detailed planning period covers a respective time period of five years;
for (groups of) CGUs, which have been allocated an asset with an indefinite useful life, such time period
ends in perpetuity.
The material assumptions used to determine the recoverable amount depend on the respective (group of)
CGU(s); please refer to the following table for details:
Key assumptions used for impairment tests in 2018
CAGR1)
(Group of) CGUs
Goodwill
Eurex
Clearstream
360T
GSF
EEX
IFS
Data
STOXX
Xetra
Allocated
carrying
amount
€m
1,293.5
969.1
244.1
142.1
115.6
56.6
19.4
18.5
6.7
Trade names and exchange licences
STOXX
Nodal
360T2)
EEX3)
360TGTX
Structured products
420.0
28.0
19.9
13.9
1.7
0.2
1) CAGR = compound annual growth rate
2) Excluding 360TGTX
3) Excluding Nodal
Risk-free
interest rate
%
Market risk
premium Discount rate
%
%
Perpetuity
growth rate
%
Net revenue
%
Operating
costs
%
0.9
0.9
0.9
0.9
0.9
0.9
0.9
0.9
0.9
0.8
2.9
0.8
0.8
2.9
0.8
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
7.2
7.4
8.7
8.5
7.7
7.4
7.5
7.5
7.3
7.6
9.4
7.9
7.3
9.9
7.3
1.0
1.0
2.5
1.5
1.5
1.5
1.5
1.5
1.0
1.5
1.5
2.5
1.5
2.5
1.0
8.0
4.7
13.0
3.1
9.2
10.2
6.5
8.6
3.2
7.9
13.6
11.5
7.1
12.4
3.9
3.9
0.8
9.0
1.8
6.3
6.7
4.2
7.4
– 0.5
8.0
10.0
6.5
4.5
9.4
3.6
273
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Executive and Supervisory Boards
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Key assumptions used for impairment tests in 2017
CAGR1)
Allocated
carrying
amount
€m
1,279.9
1,111.1
189.2
113.1
53.4
19.6
4.6
Goodwill
Eurex Core
Clearstream Core
360T
EEX
MD+S segment
Fund Services
Börse Frankfurt Zertifikate
Trade names and exchange licences
STOXX
Nodal
360T
EEX
Börse Frankfurt Zertifikate
1) CAGR = compound annual growth rate
2) Before tax
3) After tax
420.0
26.8
19.9
13.9
0.2
Risk-free
interest rate
%
Market risk
premium
%
Discount
rate
%
Perpetuity
growth rate Net revenue
%
%
Operating
costs
%
0.9
0.9
0.9
0.9
1.0
0.9
1.0
0.9
2.6
0.8
0.9
1.0
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
6.5
8.63)
11.62)
8.23)
9.13)
8.53)
13.13)
12.23)
9.83)
8.83)
8.23)
9.13)
12.23)
1.0
1.0
2.5
1.5
2.0
2.0
2.0
2.0
2.0
2.5
1.5
2.0
7.1
8.6
16.4
1.7
6.1
1.4
1.4
7.5
15.5
16.4
1.7
1.4
2.9
2.7
11.9
4.7
4.1
1.4
1.6
6.4
8.7
11.9
4.7
1.6
Individual costs of capital are determined for each (group of) CGU(s), for the purpose of discounting
projected cash flows. These capital costs are based on data incorporating beta factors, borrowing costs,
as well as the capital structure of the respective peer group. Pricing, trading volumes, assets under
custody, market share assumptions or general business development assumptions are based on past
experience or market research. Other key assumptions are mainly based on external factors and generally
correspond to internal management planning. Significant macroeconomic indicators include, for instance,
equity index levels, volatility of equity indices, as well as interest rates, exchange rates, GDP growth,
unemployment levels and government debt. When calculating the value in use, the projections are
adjusted for the effects of future restructurings and performance investments, if appropriate.
Even in case of a reasonably possible change of one of the parameters, assuming none of the other
parameters change, none of the above-mentioned (groups of) CGUs would be impaired.
274
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Notes | Consolidated balance sheet disclosures
Further information
12. Property, plant and equipment
Property, plant and equipment
Computer
hardware,
operating and
office equipment
€m
Payments on
account and
construction in
progress
€m
Fixtures and
fittings
€m
Historical costs as at 1 Jan 2017
Acquisitions through business combinations
Additions
Disposals
Reclassifications
Exchange rate differences
Historical costs as at 31 Dec 2017
Acquisitions through business combinations
Disposals from change in scope of consolidation
Additions
Disposals
Reclassifications
Exchange rate differences
79.6
0
6.4
– 1.3
0
– 0.4
84.3
0.3
0
5.4
– 6.5
0
0
357.8
0.1
35.6
– 3.4
0.1
0.5
390.7
0.6
– 0.1
46.7
– 167.5
0.5
0.2
Historical costs as at 31 Dec 2018
83.5
271.1
Depreciation and impairment losses as at 1 Jan 2017
Amortisation
Disposals
Exchange rate differences
Depreciation and impairment losses as at 31 Dec 2017
Amortisation
Disposals from change in scope of consolidation
Disposals
Depreciation and impairment losses as at 31 Dec 2018
Carrying amount as at 31 Dec 2017
Carrying amount as at 31 Dec 2018
43.7
7.2
– 1.3
– 0.1
49.5
8.5
0
– 5.8
52.2
34.8
31.3
282.4
34.8
– 3.3
0.4
314.3
37.9
– 0.1
– 165.8
186.3
76.4
84.8
2.2
0
1.1
– 1.1
– 0.1
0.1
2.2
0
0
13.1
0
– 0.5
0
14.8
0
0
0
0
0
0
0
0
0
2.2
14.8
Total
€m
439.6
0.1
43.1
– 5.8
0
0.2
477.2
0.9
– 0.1
65.2
– 174.0
0
0.2
369.4
326.1
42.0
– 4.6
0.3
363.8
46.4
– 0.1
– 171.6
238.5
113.4
130.9
275
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Notes | Consolidated balance sheet disclosures
Further information
13. Financial instruments
13.1 Overview of financial instruments
Deutsche Börse Group holds the following financial instruments:
Overview of financial instruments
Non-current assets
Financial investments measured at FVOCI1)
Financial assets measured at amortised cost
Financial assets measured at FVPL2)
Financial instruments of the central counterparties
Derivatives
Other financial assets measured at FVPL
Available-for-sale financial assets
Loans and receivables
Current assets
Financial assets measured at amortised cost
Trade receivables
Other financial assets measured at amortised cost
Financial assets measured at FVPL
Financial instruments of the central counterparties
Derivatives
Other financial assets measured at FVPL
Available-for-sale financial assets
Loans and receivables
Restricted bank balances
Other cash and bank balances
Non-current liabilities
Financial liabilities measured at amortised cost
Financial liabilities measured at FVPL
Financial instruments of the central counterparties
Other financial liabilities measured at FVPL
Current liabilities
Financial liabilities measured at amortised cost
Trade payables
Other financial liabilities measured at amortised cost
Financial liabilities measured at FVPL
Financial instruments of the central counterparties
Derivatives
Cash deposits from market participants
1) FVOCI = fair value through other comprehensive income
2) FVPL = fair value through profit or loss
Notes
31 Dec 2018
€m
31 Dec 2017
(restated)
€m
13.3
13.4
13.7
13.8
13.9
13.5
13.4
13.4
13.7
13.8
13.9
13.5
108.8
1,057.1
–
–
9,985.4
4,837.2
0
17.3
–
–
0.1
1.2
1,692.0
4.9
397.5
19,722.6
331.8
–
94,280.3
79,510.7
4.7
0.4
–
–
5.2
0
254.5
12,922.9
13.10
29,833.6
29,392.0
1,322.3
1,297.6
13.6
2,283.2
1,688.4
13.7
13.9
13.6
13.6
13.7
13.8
9,985.4
4,837.2
0.2
0.8
195.0
150.1
19,024.7
13,976.2
94,068.3
78,798.6
3.0
32.0
13.11
29,559.2
29,215.3
Deutsche Börse Group’s exposure to various risks associated with the financial instruments is discussed
in
note 25. The maximum exposure to credit risk at the end of the reporting period is the carrying
amount of each class of financial assets mentioned above.
276
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Further information
13.2 Recognised fair value measurements
The financial assets and liabilities that are measured at fair value are required to be allocated to the
following three hierarchy levels: financial assets and liabilities are allocated to level 1 if there is a quoted
price for identical assets and liabilities in an active market that can be accessed by the entity. They are
allocated to level 2 if the inputs on which fair value measurement is based are observable either directly
or indirectly; these inputs must be based on market expectations. Financial assets and liabilities are
allocated to level 3 if fair value is determined on the basis of unobservable inputs. There were no trans-
fers between levels for recurring fair value measurements during the year under review.
As at 31 December 2018, the financial assets and liabilities measured at fair value were allocated to the
following levels of the fair value hierarchy:
Fair value hierarchy
Fair value as at
31 Dec 2018
thereof attributable to:
€m
Level 1
€m
Level 2
€m
Level 3
€m
Recurring fair value measurements
ASSETS
Financial assets measured at FVOCI1)
Equity investments measured at FVOCI
Total
Financial assets measured at FVPL2)
Non-current financial instruments of the central
counterparties
Other non-current financial assets measured at FVPL
108.8
108.8
9,985.4
17.3
Current financial instruments of the central counterparties
94,280.3
Current derivatives
Other current financial assets measured at FVPL
Total
Total assets
LIABILITIES
Financial liabilities measured at FVPL
Non-current financial instruments of the central
counterparties
Non-current financial liabilities measured at FVPL
4.7
0.4
104,288.1
104,396.9
– 9,985.4
– 0.2
Current financial instruments of the central counterparties
– 94,068.3
Current derivatives
Total liabilities
– 3.0
– 104,056.9
1) FVOCI = fair value through other comprehensive income
2) FVPL = fair value through profit or loss
19.1
19.1
0
8.6
0
0
0
8.6
27.7
0
0
0
0
0
0
0
9,985.4
0
94,280.3
4.7
0
104,270.4
104,270.4
– 9,985.4
0
– 94,068.3
– 3.0
89.7
89.7
0
8.7
0
0
0.4
9.1
98.8
0
– 0.2
0
0
– 104,056.7
– 0.2
277
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
By comparison, the financial assets and liabilities measured at fair value as at 31 December 2017 were
allocated as follows to the hierarchy levels:
Fair value hierarchy
Recurring fair value measurements
ASSETS
Financial assets available for sale
Equity investments available for sale
Non-current financial assets available for sale
Current financial assets available for sale
Total
Financial assets held for trading
Non-current financial instruments of the central
counterparties
Current financial instruments of the central counterparties
Non-current derivatives
Current derivatives
Non-current financial assets measured at FVPL1)
Total
Total assets
LIABILITIES
Fair value as at
31 Dec 2017
thereof attributable to:
€m
Level 1
€m
Level 2
€m
Level 3
€m
40.4
33.8
1,587.5
1,587.5
254.5
254.5
1,882.4
1,875.8
0
0
0
0
4,837.2
79,238.7
0.1
5.2
1.2
84,082.4
0
0
0
0
0
0
4,837.2
79,238.7
0
5.2
0
84,081.1
85,964.8
1,875.8
84,081.1
6.6
0
0
6.6
0
0
0.1
0
1.2
1.3
7.9
Financial liabilities held for trading
Non-current financial liabilities measured at FVPL
– 0.8
Non-current financial instruments of the central
counterparties
– 4,837.2
Current financial instruments of the central counterparties
– 78,526.6
Non-current derivatives
Current derivatives
Total liabilities
1) FVPL = fair value through profit or loss
0
– 32.0
– 83,396.6
0
0
0
0
0
0
0
– 0.8
– 4,837.2
– 78,526.6
0
– 29.1
– 83,392.9
0
0
0
– 2.9
– 3.7
Financial assets and liabilities listed in levels 2 and 3 as at 31 December 2018 are measured
as follows:
The derivatives listed in level 2 comprise forward foreign-exchange transactions. The fair value of the
forward foreign-exchange transactions is determined on the basis of the forward exchange rates for
the remaining period to maturity as at the reporting date. They are based on observable market prices.
The fair value of the financial instruments held by central counterparties allocated to level 2 is
determined by market transactions for identical or similar assets in markets that are not active and by
option pricing models based on observable market prices.
278
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Notes | Consolidated balance sheet disclosures
Further information
As at the reporting date, the items allocated to level 3 and their measurements were as follows:
Changes in level 3 financial instruments
Assets
Liabilities
Total
Equity
investments
€m
6.5
0
– 0.4
0
0
0
0
0
0.5
6.6
61.2
67.8
0.1
13.6
– 0.3
0
0
0
0
0
Financial
assets
measured
at FVPL1)
€m
0
1.2
0
0
0
0
0
0
0
1.2
6.3
7.5
0
3.1
– 1.8
0.3
0
0
0.4
– 0.1
7.5
0
1.0
89.7
0
9.1
Derivatives
€m
0.4
0
– 0.3
0
0
0
0
0
0
0.1
0
0.1
0
0
0
– 0.1
0
– 0.1
0
0
0
0
0
Financial
liabilities
measured
at FVPL
€m
– 0.2
– 0.4
0
0
0
– 0.2
– 0.2
0
0
– 0.8
– 0.3
– 1.1
0
0
0.3
0.6
– 0.1
0
0.7
0
0
0
– 0.2
Derivatives
€m
– 8.2
0
1.4
3.4
3.4
0.5
0
0.5
0
– 2.9
2.9
0
0
0
0
0
0
0
0
0
0
0
0
Balance as at 1 Jan 2017
Additions
Disposals
Realised capital gains/(losses)
Other operating income
Unrealised capital gains/(losses)
recognised in profit or loss
Other operating expenses
Other operating income
Changes recognised in the
revaluation surplus
Balance as at 31 Dec 2017
Adjustments according to IFRS 9
Balance as at 1 Jan 2018
Acquisitions from business
combinations
Additions
Disposals
Unrealised capital gains/(losses)
recognised in profit or loss
Financial results
Other operating expenses
Other operating income
Net income from strategic
investments
Changes recognised in the
revaluation surplus
Unrealised gains/(losses) from
currency translation recognised
in equity
Balance as at 31 Dec 2018
1) FVPL = fair value through profit or loss
€m
– 1.5
0.8
0.7
3.4
3.4
0.3
– 0.2
0.5
0.5
4.2
70.1
74.3
0.1
16.7
– 1.8
0.8
– 0.1
– 0.1
1.1
– 0.1
7.5
1.0
98.6
279
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Executive and Supervisory Boards
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
The value of level 3 equity investments is reviewed on a quarterly basis using internal valuation models.
During the year under review, fair value measurement resulted in positive effects of €11.3 million and
negative effects of €3.8 million, both recognised directly in equity.
Financial instruments measured at fair value through profit or loss include investment fund units. Their
fair value measurement is based on the net asset value determined by the issuer and yielded negative
effects of €0.2 million recognised in net income from strategic investments. This item also comprised a
convertible bond and a convertible loan, whose market values are determined using internal valuation
models. Measurement at fair value had an effect on profit or loss amounting to €0.1 million reported in
net income from strategic investments.
Furthermore, the item “financial assets measured at fair value through profit or loss” included financial
instruments from an incentive programme of Eurex Frankfurt AG with a carrying amount of €0.4 million
as at 31 December 2018. The financial instruments are regularly measured at fair value through profit
or loss using internal models at the quarterly reporting dates. During the year under review, subsequent
measurement of the financial instruments led to gains of €0.4 million disclosed under “other operating
income”. Since these are internal models, the parameters can differ from those at the settlement date.
However, the derivatives will not exceed an amount of €0.8 million. These amounts arise if all
beneficiaries of the incentive programme fulfil the conditions and a repayment of the contribution is not
taken into consideration.
The fair value of a call option included in derivatives was derived using a Black-Scholes model based on
unobservable market data. The fair value stood at nil as at the reporting date, yielding an unrealised loss
of €0.1 million recognised in other operating expense.
At the beginning of the 2018 financial year, financial liabilities at fair value through profit or loss
comprised two contingent purchase price components in the aggregate amount of €0.8 million. These
two purchase price components are measured on the basis of internal discounted cash flow models,
which discount the expected future payment obligations to the measurement date, using interest rates
appropriate to the risk.
The bonds issued by Deutsche Börse Group have a fair value of €2,422.9 million (31 December 2017:
€2,451.5 million) and are disclosed under liabilities measured at amortised cost. The fair value of such
instruments is based on the debt instruments’ quoted prices. Due to insufficient market liquidity, the
liabilities were allocated to level 2.
Fixed-income securities held by Deutsche Börse Group have a fair value of €1,627.0 million. They are
recognised as part of debt instruments measured at amortised cost. The fair value of the securities was
determined by reference to published price quotations in an active market. The securities were allocated
to level 1.
280
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Executive and Supervisory Boards
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
The carrying amounts of the following items represent a reasonable approximation of their fair value:
Other financial assets reported under (non-)current debt financial instruments measured
at amortised cost
Restricted bank balances
Cash and other bank balances
Cash deposits by market participants
Trade receivables
Trade payables
Other financial liabilities reported under current financial liabilities measured at amortised cost
13.3 Financial investments measured at fair value through other comprehensive income
Financial investments measured at fair value through other comprehensive income (FVOCI) comprise
equity investments which are not held for trading and which Deutsche Börse Group has irrevocably
elected to recognise in this category at initial recognition. As these instruments are strategic investments
of Deutsche Börse Group, the classification at fair value through other comprehensive income is in line
with the business rationale.
Equity investments measured at fair value through other comprehensive income comprise the following
investments:
Equity investments measured at fair value through other comprehensive income
Listed securities
Bombay Stock Exchange Ltd.1)
Total listed securities
Unlisted securities
Taiwan Futures Exchange Corp1)
Digital Asset Holdings LLC1)
figo GmbH1)
Trifacta Inc. 1)
Trumid Holdings, LLC1)
LMRKTS LLC
S.W.I.F.T. SCRL1)
Total unlisted securities
Total
1) In financial year 2017, Deutsche Börse Group classified equity investments as “available for sale”; see
note 13.5 for further details.
2018
€m
19.1
19.1
42.6
6.2
3.3
5.4
12.8
9.2
10.2
89.7
108.8
281
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
In 2018, Deutsche Börse Group disposed of parts of its investment in S.W.I.F.T. SCRL as a result of
transactions initiated by the issuer. The shares disposed of had a fair value of €0.3 million, and the
Group realised a gain of €0.2 million, which had initially been included in other comprehensive income.
The gain has been transferred to retained earnings upon disposal.
None of the equity investments have been pledged as collateral by Deutsche Börse Group.
During the year under review, the following gains/(losses) were recognised in profit or loss and in other
comprehensive income in connection with the investments:
Amounts recognised in profit or loss and in other comprehensive income
Gains/(losses) recognised in other comprehensive income
Gains/(losses) reclassified from other comprehensive income to profit or loss
Dividends from equity investments held at FVOCI3)
Related to investments derecognised during the reporting period
Related to investments held as at the end of the reporting period
Total
2018
€m
– 7.2
–
0
2.9
– 4.3
20171)
€m
101.6
192.52)
3.9
2.1
300.1
1) The figures for the 2017 financial year relate to available-for-sale financial assets.
2) Relates primarily to income generated from the disposal of shares in BATS Global Markets, Inc. as well as of an additional equity investment
in the 2017 financial year
3) FVOCI = fair value through other comprehensive income
282
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Further information
13.4 Financial assets measured at amortised cost
Financial assets measured at amortised cost include the following debt instruments:
Composition of fair value of financial assets measured at amortised cost
31 Dec 2018
31 Dec 20171)
Non-current
€m
Current
€m
Total
€m
Non-current
€m
Current
€m
Listed debt securities
1,052.0
572.4
1,624.4
Expected loss on listed debt securities
Stage 1
Total expected loss on listed debt securities
0
0
0
0
0
0
Listed debt securities net of expected loss
1,052.0
572.4
1624.4
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Total
€m
n.a.
n.a.
n.a.
n.a.
Trade receivables
Expected loss on trade receivables
Stage 2
Stage 3
Total expected loss on trade receivables
Trade receivables net of expected loss
Other financial assets measured at amortised
cost2)
Reverse repurchase agreements
Balances on nostro accounts
Money market lendings
Margin calls
Overdrafts from settlement business
Receivables from related parties
Interest receivables
Receivables from deposits
Central counterparty balances
Other
Total other financial assets measured at
amortised cost
Other financial assets measured at amortised
cost, net of expected loss
0
0
0
0
0
0
0
0
0
0
0.4
0
4.6
0
0.1
403.2
403.2
0
331.8
331.8
– 4.8
– 0.9
– 5.7
– 4.8
– 0.9
– 5.7
397.5
397.5
6,516.2
2,244.7
6,435.9
18.5
6,516.2
2,244.7
6,435.9
18.5
2,253.3
2,253.3
0.1
45.2
3.8
0.5
45.2
8.4
1,608.9
1,608.9
23.6
23.7
n.a.
n.a.
n.a.
0
0
0
0
0
0
0.3
0
4.6
0
0
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
331.8
331.8
4,843.5
1,287.2
5,859.9
14.8
754.7
0.1
41.3
2.9
112.4
6.1
4,843.5
1,287.2
5,859.9
14.8
754.7
0.4
41.3
7.5
112.4
6.1
5.1
19,150.2
19,155.3
4.9
12,922.9
12,927.8
5.1
19,150.2
19,155.3
4.9
12,922.9
12,927.8
Total
1,057.1
20,120.1
21,177.2
4.9
13,254.7
13,259.6
1) If comparable prior-year figures do not exist due to the first-time adoption of IFRS 9 in the year under review, this is marked as “n.a.”
2) 2017: loans and receivables
283
Deutsche Börse Group| Annual report 2018
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Financial assets measured at amortised cost include securities with an amount of €5.1 million
pledged to the Industrie- und Handelskammer (IHK, the Chamber of Commerce) Frankfurt/Main.
All of the debt instruments held as at 31 December 2018 were listed and issued by sovereign or
sovereign-guaranteed issuers.
As in the previous year, there were no trade receivables due after more than one year as at
31 December 2018.
Overdrafts from settlement business represent short-term loans up to a duration of two days that are
usually secured by collateral. The potential concentration of credit risk is monitored for counterparty
credit limits; see
note 25).
13.5 Financial assets previously classified as available-for-sale financial assets
Available-for-sale financial assets included the following classes of financial assets in 2017:
Financial assets classified as “available for sale” in 2017
Non-current assets
Listed securities
Equity investments
Debt securities and corporate bonds
ETFs and other funds
Total
Unlisted securities
Equity investments
Total
Total non-current assets
Current assets
Listed debt securities
Total current assets
Total
31 Dec 2017
(restated)
€m
33.8
1,577.5
15.1
1,626.4
65.6
65.6
1,692.0
254.5
254.5
1,946.5
As the category “available for sale” no longer exists under the requirements introduced by IFRS 9 on
1 January 2018, no comparable figures for 2018 have been disclosed within this note.
Following the requirements of IFRS 9, listed debt instruments for 2018 are shown under financial instru-
ments measured at amortised cost in
have been classified as equity instruments measured at fair value through other comprehensive income
as disclosed in
note 13.9 as they had been classified
as debt instruments measured at fair value through profit or loss.
note 13.4, whereas equity investments (listed and unlisted)
note 13.3. Investments in funds are shown in
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Further information
13.6 Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost are comprised as follows:
Composition of financial liabilities measured at amortised cost
31 Dec 2018
Carrying amount
31 Dec 2017
Carrying amount
Non-current
€m
Current
€m
Total
€m
Non-current
€m
2,283.2
0
2,283.2
1688.4
0
0
0
0
0
0
0
0
0
0
0
0
195.0
195.0
16,796.8
16,796.8
16,166.5
16,166.5
630.3
402.2
36.6
0
17.9
36.6
630.3
402.2
36.6
0
17.9
36.6
1,714.9
1,714.9
0.1
19.6
0.1
19.6
0
0
0
0
0
0
0
0
0
0
0
0
Current
€m
599.7
150.1
Total
€m
2,288.1
150.1
12,436.5
12,436.5
12,411.8
12,411.8
24.7
274.7
508.3
7.3
15.4
29.3
24.7
274.7
508.3
7.3
15.4
29.3
101.7
101.7
0.3
3.0
0.3
3.0
2,283.2
19,219.7
21,502.9
1,688.4
14,126.3
15,814.7
Bonds issued
Trade payables
Deposits from securities
settlement business
Deposits from
customers
Deposits from credit
institutions
Commercial paper issued
Money market lendings
Bank overdrafts
Margin deposits
Interest liabilities
Liabilities from CCP
positions
Associate payables
Miscellaneous
Total
The financial liabilities recognised on the balance sheet were not secured by liens or similar rights as at
31 December 2017 or as at 31 December 2018.
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Further information
13.7 Financial instruments of the central counterparties
Composition of financial instruments of the central counterparties
Repo transactions
Options
Other
Total
thereof non-current
thereof current
1) FFVPL = fair value through profit or loss
31 Dec 2018
€m
31 Dec 2017
€m
63,147.3
62,914.9
40,428.1
20,140.0
690.3
1,293.0
104,265.7
84,347.9
9,985.4
4,837.2
94,280.3
79,510.7
The aggregate financial instruments held by central counterparties are classified into current and non-
current in the consolidated balance sheet. Receivables and liabilities that may be offset against a
clearing member are reported on a net basis. Financial liabilities of €212.0 million (2017: €712.1
million) were eliminated because of intra-Group GC Pooling transactions.
The following table gives an overview of the effects of offsetting the financial instruments held by the
central counterparties:
Gross presentation of offset financial instruments held by the central counterparties
Gross amount of
financial instruments
Gross amount of
offset financial instruments
Net amount of
financial instruments
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
Financial assets from repo
transactions
Financial liabilities from repo
transactions
98,083.3
83,297.8
– 34,936.0
– 20,382.9
63,147.3
62,914.9
– 97,871.3
– 82,585.7
34,936.0
– 20,382.9
– 62,935.3
– 62,202.8
Financial assets from options
76,089.8
65,735.2
– 35,661.7
– 45,595.2
40,428.1
20,140.0
Financial liabilities
from options
– 76,089.8
– 65,735.2
35,661.7
45,595.2
– 40,428.1
– 20,140.0
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Further information
13.8 Derivative financial instruments
Derivatives are only used for economic hedging purposes and not as speculative investments. However,
where derivatives do not meet the hedge accounting criteria, they are classified as “held for trading” for
accounting purposes and are accounted for at fair value through profit or loss. Deutsche Börse Group
uses derivative financial instruments to hedge existing or expected transactions in order to reduce
interest rate risks or foreign-exchange risks. As at the reporting date, the following transactions have
been recognised:
Derivative financial instruments
ASSETS
Non-current assets
Options to acquire equity investments
Foreign currency derivatives not designated in hedges
Total non-current assets
Current assets
Foreign currency derivatives not designated in hedges
Foreign currency derivatives qualifying as cash flow hedges
Total current assets
Total assets
LIABILITIES
Current liabilities
Foreign currency derivatives not designated in hedges
Embedded derivatives
Total current liabilities
Total liabilities
Notional
amount
31 Dec 2018
€m
Carrying
amount
31 Dec 2018
€m
Notional
amount
31 Dec 2017
€m
Carrying
amount
31 Dec 2017
€m
2.0
0
2.0
2,094.8
0
2,094.8
2,096.8
1,289.5
0
1,289.5
1,289.5
0
0
0
4.7
0
4.7
4.7
3.0
0
3.0
3.0
2.0
0
2.0
788.0
75.2
863.2
865.2
1,711.9
2.9
1,714.8
1,714.8
0.1
0
0.1
4.5
0.7
5.2
5.3
29.1
2.9
32.0
32.0
Derivatives that do not qualify as hedges
Deutsche Börse Group has entered into transactions involving derivatives to economically reduce the
foreign-exchange rate risk. These transactions have not been designated as hedging relationships:
As at 31 December 2018, currency swaps expiring in less than six months had a notional value of
€3,383.2 million (2017: €2,494.6 million) as well as a negative fair value of €2.9 million and a
positive fair value amounting to €4.7 million (2017: negative fair value of €29.0 million and positive
fair value amounting to €4.5 million). These swaps were entered into to convert foreign currencies
resulting from the commercial paper programme into euros and to economically hedge short-term foreign
currency receivables and liabilities in euros.
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Further information
As at 31 December 2018 and as at 31 December 2017, European Energy Exchange AG had entered
into forward transactions in order to economically hedge the foreign-exchange risk associated with
forecast net cash outflows in British pounds for the following year. As at 31 December 2018, these
derivatives had a notional value of €1.1 million (£1.0 million) and a remaining maturity of less than
twelve months. The fair value of these instruments amounted to nil. As at 31 December 2017,
the forward contracts with a notional value of €4.6 million (£4.0 million) had a negative fair value of
€0.1 million. A US dollar swap with a notional value of €0.8 million had a fair value of nil as of
31 December 2017. All contracts concluded in 2017 settled in 2018 without any material impact on
net profit for the period attributable to Deutsche Börse AG shareholders.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is recognised in the cash flow hedge reserve within revaluation surplus. The gain or loss
relating to the ineffective portion is recognised immediately in profit or loss. Amounts are subsequently
note 15.
transferred to profit or loss. For the development of the revaluation surplus, please refer to
The effectiveness of a hedging relationship is determined at the inception of the hedging relationship
and through periodic effectiveness assessments to ensure that there is an economic relationship between
hedged item and hedging instrument. In order to hedge foreign currency risk, the Group enters into
hedging relationships where the critical terms of the hedging instrument match exactly the terms of the
hedged item.
The cash flow hedges developed as follows:
Changes in cash flow hedges
Cash flow hedges as at 1 January
Amount recognised in other comprehensive income during the year
Amount recognised in profit or loss during the year
Closed-out
Cash flow hedges as at 31 December
2018
€m
0.7
0
– 0.7
0
0
2017
€m
0
– 3.4
0
4.1
0.7
In 2017, Clearstream Banking S.A. had entered into a cash flow hedge to reduce the impact of
fluctuations in the euro/US dollar exchange rate on its US dollar-based net interest income for the 2018
financial year. The US dollar-related net interest income is derived from US dollar placements from
customer cash balances less the corresponding compensation for customers. Twelve forward foreign-
exchange contracts – one contract for the end of each of the twelve months in 2018 – were concluded
on 16 November 2017. The hedge is considered 100 per cent effective as the hedging foreign-exchange
transactions can be set off directly against the US dollar-based net interest income. At the end of each
month, the change in fair value of the forward foreign-exchange contracts will be recognised in equity,
and the gain or loss realised on the maturing foreign-exchange contract will be classified as interest
income. As at 31 December 2017, the fair value of the hedging instruments amounted to €0.7 million.
To hedge the US dollar risk for financial year 2019, Clearstream Banking S.A. concluded similar
transactions in 2019; as at the reporting date, no derivatives had been designated as cash flow hedges.
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Further information
13.9 Other financial instruments measured at fair value through profit or loss
The financial instruments measured at fair value through profit or loss (FVPL) are comprised as follows:
Composition of other financial instruments measured at fair value through profit or loss
31 Dec 2018
€m
31 Dec 2017
€m
ASSETS
Non-current assets
Convertible bonds and loans
Investment in ETFs and equity funds
Total
Current assets
Incentive programmes
Total
Total assets
LIABILITIES
Non-current liabilities
Contingent purchase price components
Total liabilities
2.7
14.6
17.3
0.4
1.0
17.7
0.2
0.2
During the year under review, the following gains/(losses) were recognised in profit or loss:
Amounts recognised in profit or loss
Fair value (losses)/gains on other financial assets at FVPL1)
Distributions from ETFs
Fair value gains/(losses) on contingent purchase price components
Total
1) FVPL = fair value through profit or loss
13.10 Restricted bank balances
2018
€m
– 1.5
0.3
0.6
– 0.6
1.2
15.1
16.3
0
0
16.3
0.8
0.8
2017
€m
0
0.4
– 0.2
0.2
Amounts reported separately under liabilities as cash deposits by market participants are restricted.
Such amounts are mainly invested via bilateral or triparty reverse repurchase agreements and in the form
of overnight deposits at banks (restricted bank balances). Government and government-guaranteed
bonds with an external rating of at least AA– are accepted as collateral for the reverse repurchase
agreements. Reported restricted bank balances total €29,833.6 million (2017: €29,392.0 million).
289
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Further information
13.11 Cash deposits by market participants
Composition of cash deposits by market participants
Liabilities from margin payments
made to Eurex Clearing AG by clearing members
made to European Commodity Clearing AG by clearing members
made to Nodal Clear, LLC by clearing members
made to European Energy Exchange AG by clearing members
Liabilities from cash deposits by participants in equity trading
Total
14. Other current assets
Composition of other current assets
Other receivables from CCP transactions
Tax receivables (excluding income taxes)
Prepaid expenses
Miscellaneous
Total
15. Equity
31 Dec 2018
€m
31 Dec 2017
€m
23,673.9
26,555.0
5,502.2
2,268.8
372.7
0.3
10.1
387.2
n.a.
4.3
29,559.2
29,215.3
31 Dec 2018
€m
31 Dec 2017
€m
543.9
364.4
41.6
50.4
3.9
49.8
32.0
5.5
639.8
451.7
Changes in equity are presented in the consolidated statement of changes in equity. As at
31 December 2018, the number of no-par value registered shares of Deutsche Börse AG in
issue was 190,000,000 (31 December 2017: 193,000,000).
Subject to the agreement of the Supervisory Board, the Executive Board is authorised to increase the
subscribed share capital by the following amounts:
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Further information
Composition of authorised share capital
Date of
authorisation
by the
shareholders
Amount in €
Expiry date
Existing shareholders’ pre-emptive rights may be disapplied for
fractioning and/or may be disapplied if the share issue is:
Authorised share
capital I1)
Authorised share
capital II1)
Authorised share
capital III1)
Authorised share
capital IV
1)
13,300,000
11 May 2016
10 May 2021 n.a.
19,300,000
13 May 2015
12 May 2020
for cash at an issue price not significantly lower than the stock
exchange price, up to a maximum amount of 10 per cent of
the nominal capital.
against non-cash contributions for the purpose of acquiring
companies, parts of companies, interests in companies, or
other assets.
38,600,000
13 May 2015
12 May 2020 n.a.
6,000,000
17 May 2017
16 May 2022 n.a
1) Shares may only be issued, excluding shareholders’ pre-emptive subscription rights, provided that the aggregate amount of new shares issued excluding share-
holders' pre-emptive rights during the term of the authorisation (including under other authorisations) does not exceed 20 per cent of the issued share capital.
Contingent capital
In accordance with the resolution by the Annual General Meeting on 15 May 2014, the Executive Board
was authorised, subject to the approval of the Supervisory Board, to issue on one or more occasions in
the period up to 14 May 2019 convertible bonds and/or bonds with warrants or a combination of such
instruments in a total nominal amount of up to €2,500,000,000 with or without maturity restrictions.
The Executive Board was also authorised to grant the holders or creditors of these bonds conversion or
option rights to new no-par value registered shares of Deutsche Börse AG with a proportionate interest in
the share capital totalling up to €19,300,000, as specified in more detail in the terms and conditions of
the convertible bonds or in the terms and conditions of the warrants attaching to the bonds with warrants.
The Executive Board is authorised, subject to the approval of the Supervisory Board, to exclude
shareholders’ pre-emptive rights to bonds with conversion or option rights to shares of Deutsche Börse
AG in the following cases: (i) to avoid fractional amounts, (ii) when the issue price of a bond is not
materially below the theoretical fair value determined in accordance with recognised financial techniques
and the total number of shares attributable to these bonds does not exceed 10 per cent of the share
capital, (iii) to grant the holders of conversion or option rights to shares of Deutsche Börse AG
subscription rights to offset any dilutive effects to the same extent as they would be entitled to receive
after exercising these rights.
The bonds may also be issued by companies based in Germany or abroad that are affiliated with
Deutsche Börse AG within the meaning of sections 15ff. of the Aktiengesetz (AktG, German Stock
Corporation Act). Accordingly, the share capital was contingently increased by up to €19,300,000
(contingent capital 2014). To date, the authorisation to issue convertible bonds and/or bonds with
warrants has not been exercised.
There were no further subscription rights to shares as at 31 December 2018 or 31 December 2017.
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Further information
Revaluation surplus
The development of the revaluation surplus is as follows:
Revaluation surplus
Balance as at 1 Jan 2017 (gross)
Changes from defined benefit and
similar obligations
Fair value measurement
Reclassifications
Reversal to profit or loss
Balance as at 31 Dec 2017 (gross)
First-time adoption of IFRS 9 at 1 Jan 2018
Changes from defined benefit obligations
Fair value measurement
Balance as at 31 Dec 2018 (gross)
Deferred taxes
Balance as at 1 Jan 2017
Additions
Reversals
Balance as at 31 Dec 2017
First-time adoption of IFRS 9 at 1 Jan 2018
Additions
Reversals
Balance as at 31 Dec 2018
Balance as at 1 Jan 2017 (net)
Balance as at 31 Dec 2017 (net)
Balance as at 31 Dec 2018 (net)
1) FFVOCI = fair value through other comprehensive income
Recognition of
hidden reserves from
fair value measurement
€m
Available-for-sale
investments
€m
Equity investments
measured at FVOCI1)
€m
103.7
0
0
0
0
103.7
0
0
0
103.7
0
0
0
0
0
0
0
0
103.7
103.7
103.7
111.4
0
101.6
0
– 192.5
20.5
– 20.5
0
0
0
– 44.2
77.4
– 34.3
– 1.1
1.1
0
0
0
67.2
19.4
0
0
0
0
0
0
0
23.7
0
– 7.2
16.5
0
0
0
0
– 1.7
0.1
– 0.3
– 1.9
0
0
14.6
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Further information
Available-for-sale debt
instruments
€m
Cash flow hedges
€m
Defined benefit
obligations
€m
9.1
0
1.2
– 0.1
0.3
10.5
– 10.5
0
0
0
– 2.5
0
– 0.2
– 2.7
2.7
0
0
0
6.6
7.8
0
– 3.5
– 183.8
0
0.7
0
2.8
0
0
0
0
0
1.0
0
– 1.0
0
0
0
0
0
– 2.5
0
0
30.6
0
0
0
– 153.2
0
– 23.9
0
– 177.1
50.3
0
– 8.4
41.9
0
6.9
0
48.9
– 133.5
– 111.3
– 128.3
Other
€m
0
0
0
0
0
0
0
– 0.3
0
– 0.3
0
0
0
0
0
0.1
0
0
0
0
– 0.2
Total
€m
36.9
30.6
103.5
– 0.1
– 189.4
– 18.5
– 7.3
– 24.2
– 7.2
– 57.2
4.6
77.4
– 43.9
38.1
2.1
7.1
– 0.3
47.0
41.5
19.6
– 10.2
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Notes | Consolidated balance sheet disclosures
Further information
Accumulated profit
The “accumulated profit” item includes exchange rate differences amounting to €–6.8 million (2017:
€–16.4 million). €8.2 million (2017: €–14.4 million) were added due to currency translation for foreign
subsidiaries in the reporting period as well as €1.4 million (2017: €–7.1 million) relating to transactions
used to hedge against currency risk.
Regulatory capital requirements and regulatory capital ratios
As in the past, Clearstream Banking S.A., Clearstream Banking AG and Eurex Clearing AG, in their
capacity as credit institutions, are subject to solvency supervision by the German or Luxembourg
banking supervisory authorities (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin, and
Commission de Surveillance du Secteur Financier, CSSF, respectively). The same applies to the
Clearstream Holding at a regulatory group level. Eurex Repo GmbH and 360 Treasury Systems AG are
also subject to specific provisions applicable to certain investment firms under BaFin solvency
supervision. Until it ceased its business operations effective 31 December 2017, Eurex Bonds GmbH
had also been subject to BaFin supervision.
Following the return of its licence as an “Approved Clearing House” (ACH) in March 2018, Eurex
Clearing Asia Pte. Ltd. is no longer subject to any capital requirements under the Securities and
Futures Act (Singapore) or to other specific requirements of the Monetary Authority of Singapore
(MAS). Eurex Clearing Asia Pte. Ltd. is presently being liquidated.
Since the authorisation of both Eurex Clearing AG and European Commodity Clearing AG as central
counterparties under the provisions of Regulation (EU) No 648/2012 (European Market Infrastructure
Regulation, EMIR) in 2014, these companies have been subject to the capital requirements under
Article 16 of EMIR. These requirements apply to Eurex Clearing AG in parallel to the solvency
supervision requirements applicable to credit institutions. In each concrete case, the more stringent
requirement has to be met. Irrespective of its status as a specialist credit institution according to
German law, European Commodity Clearing AG is only subject to EMIR capital requirements.
Clearstream Banking AG, Clearstream Banking S.A. and LuxCSD S.A. are central securities depositories
(CSDs) within the meaning of Article 2 Paragraph 1 Number 1 of the Regulation (EU) No. 909/2014
(Central Securities Depositories Regulation, CSDR). While the review of the submitted applications for
authorisation by the respective supervisory authorities is ongoing, the companies operate under existing
transitional provisions. Upon authorisation as CSD pursuant to Article 16 of the CSDR, the affected
central securities depository will be subject to the capital requirements set forth in Article 47 of the
CSDR. In addition and parallel to such capital requirements, going forward, Clearstream Banking AG and
Clearstream Banking S.A. will also be subject to a capital surcharge for credit institutions applicable for
the provision of intra-day credit pursuant to Article 54 Paragraph 3 Letter d of the CSDR.
Nodal Clear, LLC is a Derivatives Clearing Organisation (DCO) subject to regulation by the US
Commodity Futures Trading Commission (CFTC). Given its DCO status, Nodal Clear, LLC is obliged to
maintain sufficient financial resources to cover all current costs for a minimum period of twelve months;
moreover, Nodal Clear, LLC must provide sufficient highly liquid assets to cover all current costs for
at least six months.
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Notes | Consolidated balance sheet disclosures
Further information
REGIS-TR S.A., as trade repository according to EMIR, is subject to supervision exercised by the
European Securities and Markets Authority (ESMA) pursuant to Article 21 (b) of Delegated Regulation
(EU) No 150/2013.
Powernext SAS is a regulated market in France, and is hence subject to supervision exercised by the
Autorité des marchés financiers (AMF); furthermore, Powernext SAS is obliged to fulfil the regulatory
capital requirements set forth in the “Arrêté du 2 juillet 2007 relatif au capital minimum, aux fonds
propres et au contrôle interne des entreprises de marché”.
The EMIR capital requirements for central counterparties are in large part based on the EU own funds
requirements for credit institutions (see below), but the details differ in relation to the capital
components, the capital requirement components and capital deduction items. Moreover, EMIR does not
specify any capital buffers such as those introduced by the Directive (EU) No 36/2013 (Capital
Requirements Directive, CRD IV) and the Regulation (EU) No 575/2013 (Capital Requirements Regulation,
CRR) for banks.
Since 1 January 2014, the own funds requirements for credit institutions have been primarily subject to
the EU-wide requirements of the CRR as well as the supplementary national regulations implementing
CRD IV, which transposed the “Basel III” rules into European law.
All companies that are directly or indirectly (i.e. by means of EMIR requirements) subject to the CRR
own funds requirements are exempted from compliance with trading book requirements. Market risk
exposures consist only of relatively small open foreign currency positions. The companies concerned
uniformly apply the standardised approach for credit risk. As a result of the specific business of the
credit institutions and central counterparties belonging to Deutsche Börse Group, their recognised assets
are subject to sharp fluctuations. This leads to correspondingly volatile total capital ratios at the
Clearstream companies. The volatility of the ratio is subject to major fluctuations on a day-to-day basis
in the course of the year. Due to a high degree of collateralised or zero-weighted cash investments, the
own funds requirements for credit and market risk exposures of Eurex Clearing AG and European
Commodity Clearing AG are relatively stable despite volatile total assets in the course of the year.
To calculate operational risk, Eurex Clearing AG and European Commodity Clearing AG use the basic
indicator approach, while the Clearstream companies apply the advanced measurement approach (AMA).
Due to the specific arrangements for the two investment firms, Eurex Repo GmbH and 360 Treasury
Systems AG, no explicit own funds requirements for operational risk are determined in accordance with
Article 95 of the CRR. Instead, the total own funds requirement is determined either as the own funds
requirement amount for credit and market risk or as 25 per cent of fixed overhead costs, depending on
which is higher. Since credit and market risks are low, the relevant criterion for both companies is the
own funds requirement on the basis of overhead costs.
None of the Group companies subject to solvency supervision has Tier 2 supplementary capital.
A minimum total capital ratio of 8 per cent generally applies to credit institutions subject to the CRR. The
credit institutions that are subject to the provisions of the CRR fall into two groups: those designated as
not systemically important, which includes Clearstream Banking AG, Clearstream Holding group and
Eurex Clearing AG; and those designated as “Other Systemically Important Institution (O-SII)”, which
includes Clearstream Banking S.A. as of 1 January 2018. CRD IV introduced various capital buffers,
which the supervised (credit) institutions generally have to meet over and above the minimum total
capital ratio of 8 per cent, although they may temporarily fall below these levels. The capital buffers
were introduced in stages up until 1 January 2019, depending on the economic environment and
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
systemic risk components: since 2014, CSSF has imposed a standard capital conservation buffer of
2.5 per cent of Tier 1 capital on all Luxembourg credit institutions; this arrangement represents a
departure from the general transitional provisions of CRD IV. This means that the minimum total capital
ratio is 10.5 per cent. Besides the capital buffers imposed by CSSF for all Luxembourg credit institutions,
an additional capital conservation buffer of 1.875 per cent (2.5 per cent starting in 2019) is applied to
all regulated Group companies subject to CRR regulations. Taking these effects into account, the
minimum total capital ratio was 9.875 per cent. Similarly, an anticyclical capital buffer is required to be
available in order to ensure that banks accumulate a buffer during a period in which a specific region
experiences economic growth while such buffer may fall to a lower level during an economic downturn
in such region. The respective percentage is generally determined by the competent authority of the
country in which the (credit) risk positions are located. Therefore, a bank’s individual percentage is a
combined rate, which takes into account the total volume of credit transactions in the various countries.
As at 31 December 2018, the bank-specific anticyclical capital buffer requirements for Clearstream
Banking S.A. stood at 0.12 per cent of risk-weighted assets. In addition, a buffer for systemically
relevant institutions and a systemic risk buffer must be applied if required by the competent authority. As
at 31 December 2018, the systemic risk buffer was not yet required in Luxembourg. However, according
to Regulation CSSF No. 18-06, Clearstream Banking S.A. is required to apply a buffer for O-SIIs
amounting to 0.375 per cent, which increased to 0.5 per cent, effective 1 January 2019.
The individual companies’ capital resources sufficiently reflect the fluctuation in risk-weighted assets.
Stress considerations are used to determine the capital required for expected peaks, and additional
reserves for unexpected events are added. In addition, buffers are taken into account that cover the
recovery indicators specified in the recovery plans and thus prevent recovery scenarios from being
triggered even for peak own funds and capital requirements. The own funds and capital requirements
determined in this way will be met on the basis of medium-term capital planning. As the actual own
funds and capital requirements are below the expected peaks – significantly so under normal
circumstances – this may lead to a very high total capital ratio or EMIR capital cover, especially at the
closing date.
The own funds requirements of the Clearstream companies remained almost stable in the reporting
period. However, changes occurred regarding own funds requirements for operational risks as well as
credit and market risks, both at the single entity and Group levels. As of September 2016, the
Clearstream Holding group has applied a different method, the AMA, for the calculation of operational
risk own funds requirements. Since then, the calculation has been made using the so-called Direct VaR.
The Clearstream Holding group has already responded to the (expected) higher own funds requirements
by launching a programme to strengthen its capital base; this programme continued in 2017. Further
measures are planned for the coming years in the context of medium-term capital planning. In the
year under review, the Clearstream Holding group’s capital base was boosted by retaining profits at
different companies.
296
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
In the medium to long term, the Clearstream Holding group expects moderately increasing own funds
requirements at a regulatory group level for the following reasons:
The successively increasing capital buffers under CRD IV
The future applicability of own funds requirements based on the Central Securities Depositories
Regulation (CSDR)
The establishment of own funds requirements resulting from the introduction of minimum requirements
for equity and eligible liabilities (MREL) as a result of Directive (EU) No 59/2014
The implementation of the so-called CRR II package and other amendments under Basel III
(presumably applicable not before the third quarter of 2019)
Eurex Clearing AG’s own funds requirements increased compared with the previous year. Given the
increase in revenue, own funds requirements for operational risk rose according to our model; own funds
requirements for credit and market risk also increased markedly.
The own funds requirements calculated with Eurex Clearing AG’s internal risk model are higher than the
own funds requirements derived from the basic indicator approach, which follows regulatory stipulations
and is based on the balance sheet. Hence, Eurex Clearing AG always applies additional capital buffers
for such risks, surpassing regulatory minimum requirements. Against this background, banking
supervisors requested in 2011 that Eurex Clearing AG increase the basis for the calculation of
regulatory own funds requirements by considering an appropriate share of clearing-related fees received
for the account of operating entities. The own funds requirements for operational risk are calculated once
a year based on a three-year average of historical income, including the assumed clearing fees, and are
therefore not subject to daily fluctuations. Compliance with the minimum regulatory ratio is maintained
at all times due to the sufficient capital buffer for uncollateralised cash investments.
Eurex Clearing AG’s capital requirements according to EMIR are currently significantly above CRD IV capital
buffer requirements. For this reason, Eurex Clearing AG does not currently expect the CRD IV capital buffers
to have any material impact on its capital requirements. Independently of this, the capital resources of
Eurex Clearing AG are reviewed on an ongoing basis and monitored as part of medium-term capital
planning. Eurex Clearing AG received contributions to its capital reserve in an amount of €100.0 million
in 2017 and a further €50.0 million in 2018 from parent company Eurex Frankfurt AG. Further
contributions are scheduled for the coming years, in order to continuously strengthen Eurex Clearing AG’s
capital base.
297
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Composition of own funds requirements
Own funds requirements for
operational risk
Own funds requirements for credit
and market risk
Total capital requirements
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
Clearstream Holding group
409.9
420.1
146.9
67.7
556.6
487.8
Clearstream Banking S.A.
Clearstream Banking AG
312.5
97.4
306.2
113.8
93.5
5.9
49.9
3.6
406.0
103.2
356.1
117.4
Eurex Clearing AG
75.2
70.9
26.1
3.9
101.3
74.8
European Commodity
Clearing AG
19.4
8.1
3.7
1.6
23.1
9.7
Regulatory capital ratios1)
Own funds requirements
Regulatory equity
Total capital ratio
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
%
31 Dec 2017
%
Clearstream Holding group
556.6
487.7
1,525.5
1,289.7
21.9
21.2
Clearstream Banking S.A.
Clearstream Banking AG
406.0
103.2
356.1
117.4
1,112.0
1,061.3
369.3
308.9
21.9
28.6
23.8
21.0
Eurex Clearing AG
101.3
74.8
514.8
464.8
40.6
49.7
1) Regulatory capital ratios according to Regulation (EU) No. 575/2013 (CRR)
The capital requirements under Article 16 of EMIR do not stipulate a specific ratio. Instead, the total
amount of share capital, retained earnings and reserves, less certain items (including the central
counterparty’s own contribution to the default fund), is compared with the capital requirements. This
total has to be at least equal to these requirements. In other words, EMIR requires a capital cover of at
least 100 per cent. A reporting requirement to the competent authority – in this case BaFin – is triggered
when this ratio falls below 110 per cent. €50.0 million of the €100.0 million contribution made to the
capital reserve of Eurex Clearing AG was added to Eurex Clearing AG’s own contribution to the default
fund in 2017. In 2018, €50.0 million were added to the capital reserve of Eurex Clearing AG. Eurex
Clearing AG’s own contribution to the default fund remained unchanged.
The capital resources of European Commodity Clearing AG are currently well above the regulatory
requirements. As at the reporting date, total equity as disclosed in the statement of financial position
was not fully available to cover the risks according to Article 16 of EMIR, given that parts of this
equity do not fulfil the required liquidity standards. Similar to the other companies, the capital base
is consistently monitored. Given the increase in the regulatory minimum requirements for contributions
to the default fund, European Commodity Clearing AG’s default fund contribution was increased. As at
31 December 2018, European Commodity Clearing AG’s total default fund contribution amounted to
€11.5 million, and thus exceeded regulatory minimum requirements. A further increase in the
contribution is planned for 2019. Depending on future business performance, and in particular on
298
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
changes in the regulatory framework, the capital resources will be adjusted as needed; this is expected for
the first half of 2019.
Capital adequacy requirements under EMIR
Own funds requirement for operational, credit and market risk
Other EMIR capital requirements
Total EMIR capital requirements under Article 16 of EMIR
Equity
EMIR deductions
Own contribution to default fund
EMIR capital adequacy ratio
Eurex Clearing AG
European Commodity Clearing AG
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
101.3
77.9
179.2
514.8
0
– 150.0
364.8
74.8
78.7
153.5
464.8
0
– 150.0
314.8
23.2
42.0
65.2
108.9
– 7.4
– 11.5
90.0
9.7
27.2
36.9
88.9
– 8.3
– 10.0
70.6
In connection with the merger of Eurex Repo GmbH into Eurex Bonds GmbH and the subsequent
name change of the latter to Eurex Repo GmbH as at 15 August 2018, the capital resources of Eurex
Repo GmbH increased significantly and now markedly exceed regulatory requirements. Therefore,
further contributions to capital are not expected to be required in the medium term.
Composition of own funds/capital requirements
Own funds requirements for credit
and market risk
Own funds requirements on the
basis of fixed overheads
Own funds requirements
to be met
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
Eurex Bonds GmbH1)
Eurex Repo GmbH
360 Treasury Systems AG
–
0.5
7.4
0.2
0.3
4.6
–
2.8
1.0
0.7
3.5
3.8
–
3.3
8.4
0.9
3.8
8.4
1) Eurex Bonds GmbH ceased its business operations as at 31 December 2017.
Compliance with own funds requirements
Own funds requirements
Regulatory equity
Equity ratio
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
%
31 Dec 2017
%
Eurex Bonds GmbH1)
Eurex Repo GmbH
360 Treasury Systems AG
–
3.3
8.4
0.9
3.8
8.4
–
18.0
28.8
10.4
7.0
28.5
–
1,200.0
545.5
342.9
184.2
339.3
1) Eurex Bonds GmbH ceased its business operations as at 31 December 2017.
According to Delegated Regulation (EU) No 150/2013, REGIS-TR S.A. is required to maintain equity in
the amount of at least 50 per cent of annual operating costs.
299
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
According to the MAS, Cleartrade Exchange Pte. Limited is required to maintain own funds at the rate of
either 18 per cent of annual operating revenue or 50 per cent of annual operating costs, depending
on which is higher. Powernext SAS is obliged to maintain own funds in the amount of operating costs for
the next six months. Regarding the anticipated upswing in the business development of Powernext SAS
and Cleartrade Exchange Pte. Limited, own funds requirements for both entities are expected to increase
slightly going forward. While the capital base of Powernext SAS is considered appropriate for the
anticipated upswing, Cleartrade Exchange Pte. Limited’s capital base will be adjusted, if required.
Compliance with own funds requirements
REGIS-TR S.A.
Cleartrade Exchange Pte. Limited
Powernext SAS
Nodal Clear, LLC
Own funds requirements
Regulatory equity
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
5.2
0.9
9.3
5.9
3.9
0.7
9.7
3.6
9.9
1.6
33.5
26.4
6.4
1.2
33.5
26.0
The regulatory minimum requirements were complied with at all times by all companies during the
reporting period and in the period up to the preparation of the consolidated financial statements.
16. Shareholders’ equity and appropriation of net profit of Deutsche Börse AG
The annual financial statements of the parent company Deutsche Börse AG, prepared as at 31 Decem-
ber 2018 in accordance with the provisions of the Handelsgesetzbuch (HGB, the German Commercial
Code), report net profit for the period of €532.2 million (2017: €615.7 million) and shareholders’ equity
of €2,526.5 million (2017: €2,800.9 million). In 2018, Deutsche Börse AG distributed
€453.3 million (€2.45 per eligible share) from the unappropriated surplus of the previous year.
Net profit for the period 2018 is lower than last year.
Proposal on the appropriation of the unappropriated surplus
Net profit for the period
Appropriation to other retained earnings in the annual financial statements
Unappropriated surplus
Proposal by the Executive Board:
Distribution of a regular dividend to the shareholders of €2.70 per share for 183,347,045 no-par value shares
carrying dividend rights
Appropriation to retained earnings
31 Dec 2018
€m
532.2
– 17.2
515.0
495.0
20.0
300
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
No-par value shares carrying dividend rights
Number of shares issued as at 31 December 2017
Shares retired in November 2018
Number of shares issued as at 31 December 2018
Number of treasury shares as at the reporting date
Number of shares outstanding as at 31 December 2018
Number
193,000,000
– 3,000,000
190,000,000
– 6,652,955
183,347,045
The proposal on the appropriation of the unappropriated surplus reflects treasury shares held directly or
indirectly by the company that do not carry dividend rights under section 71b of the Aktiengesetz (AktG,
the German Stock Corporation Act). The number of shares carrying dividend rights can change until the
Annual General Meeting through the repurchase or sale of further treasury shares. In this case, with a
dividend of €2.70 per eligible share, an amended resolution for the appropriation of the unappropriated
surplus will be proposed to the Annual General Meeting.
17. Provisions for pensions and other employee benefits
Defined benefit pension plans
The defined benefit obligations of the companies of Deutsche Börse Group relate primarily to final salary
arrangements and pension plans based on capital components, which guarantee employees a choice of
either lifelong pensions or capital payments on the basis of the final salary paid. In Switzerland, there
are guaranteed defined contribution plans. Deutsche Börse Group uses external trust solutions to cover
some of its pension obligations.
Net liability of defined benefit obligations
Present value of defined benefit obligations
that are at least partially funded
Fair value of plan assets
Funded status
Present value of unfunded obligations
Net liability of defined benefit obligations
Impact of minimum funding requirement/
asset ceiling
Amount recognised in the balance sheet
Germany
€m
Luxembourg
€m
441.1
– 308.1
133.0
3.6
136.6
0
136.6
72.3
– 47.1
25.2
0.6
25.8
0
25.8
Other
€m
18.5
– 16.9
1.6
0.1
1.7
0
1.7
Total
31 Dec 2018
€m
Total
31 Dec 2017
€m
531.9
– 372.1
159.8
4.3
164.1
0
164.1
503.3
– 363.4
139.9
4.3
144.2
0
144.2
The defined benefit plans comprise a total of 2,768 beneficiaries (2017: 2,744). The present value of
defined benefit obligations can be allocated to the beneficiaries as follows:
301
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Allocation of the present value of the defined benefit obligation to the beneficiaries
Eligible current employees
Former employees with vested entitlements
Pensioners or surviving dependants
Germany
€m
Luxembourg
€m
206.0
147.9
90.8
444.7
70.6
1.6
0.7
72.9
Other
€m
18.3
0.3
0
18.6
Total
31 Dec 2018
€m
Total
31 Dec 2017
€m
294.9
149.8
91.5
536.2
271.7
141.2
94.7
507.6
Essentially, the retirement benefits encompass the following retirement benefit plans:
Executive boards of Group companies (Germany and Luxembourg)
Individual commitment plans exist for executive board members of certain Group companies; they are
based on the plan for executives described in the second paragraph below, i.e. in each calendar year the
company provides an annual contribution to a capital component calculated in accordance with actuarial
principles. The benefit assets equal the total of the acquired capital components of the individual years
and are converted into a lifelong pension once the benefits fall due. In addition, retirement benefit
agreements are in place with members of the executive boards of Group companies, under which they
are entitled to pension benefits upon reaching the age of 63 and following reappointment. When the
term of office began, the replacement rate was 30 per cent of individual pensionable income. It rose by
5 percentage points with each reappointment, up to a maximum of 50 per cent of pensionable income.
Details of the pension commitments for members of Deutsche Börse AG’s Executive Board can be found
in the
remuneration report.
Germany
There has been an employee-funded deferred compensation plan for employees of certain Deutsche
Börse Group companies in Germany since 1 July 1999. This plan gives employees the opportunity to
convert parts of their future remuneration entitlements into benefit assets of equal value. The benefits
consist of a capital payment upon reaching the age of 65 or earlier, if applicable, in the case of disability
or death; when due, the payment is made in equal annual payments over a period of three years. The
benefit assets earn interest at a rate of 6 per cent p.a. As a rule, new commitments are entered into on
the basis of this deferred compensation plan; employees with pension commitments under retirement
benefit arrangements in force before 1 July 1999 were given an option to participate in the deferred
compensation plan by converting their existing pension rights.
In the period from 1 January 2004 to 30 June 2006, executives in Germany were offered the
opportunity to participate in the following pension system based on capital components: the benefit is
based on annual income received, composed of fixed annual salary and the variable remuneration. Every
year, participating Group companies provide for an amount that corresponds to a certain percentage of
the pensionable income. This amount is multiplied by a capitalisation factor depending on age, resulting
in the “annual capital component”. The benefit assets equal the total of the acquired capital components
of the individual years and are converted into a lifelong pension once the benefits fall due. This benefit
plan was closed to new staff on 30 June 2006; the executives who were employed in the above period
can continue to earn capital components.
302
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
As part of adjustments to the remuneration systems to bring them into line with supervisory require-
ments contracts were adjusted for some executives in prior years. For senior executives affected, whose
contracts only provided for the inclusion of income received and variable remuneration over and above
the upper limit of the contribution assessment (Beitragsbemessungsgrenze) of the statutory pension
insurance provisions as pensionable income to date, pensionable income was fixed on the basis of
annual income received in 2016. This income is adjusted on an annual basis, to reflect the increase in
the cost of living, based on the consumer price index for Germany published by the German Federal
Statistical Office. For executives affected, whose capital components were calculated on the basis of
income received, without observing the upper limit of the contribution assessment, an amount has been
determined that will be reviewed annually, and adjusted if necessary, by the Supervisory Board, taking
any changes in circumstances in terms of income and purchasing power into account.
Luxembourg
The Clearstream subgroup, based in Luxembourg, operates separate defined benefit plans. The only
defined benefit pension plan still in operation to the benefit of Luxembourg employees of Clearstream
International S.A., Clearstream Banking S.A. and Clearstream Services S.A. is funded by means of cash
contributions to an “association d’épargne pension” (ASSEP) organised in accordance with Luxembourg
law. The benefits consist of a one-off capital payment, which is generally paid upon reaching the age
of 65. The benefit plan does not cover disability or death in service. Contributions to the ASSEP are
funded in full by the participating companies. The contributions are determined annually on the basis of
actuarial opinions, and the amount of the obligation is calculated in accordance with Luxembourg law.
For other employees, a group plan has been entered into with Swiss Life (Luxembourg) S.A., which covers
pensions as well as disability and death. The contributions are paid annually by the employer. Benefits
depend on the length of employment at the Group company and consist of quarterly payments starting
upon the employee reaching the age of 65. In the case of disability or death, differing provisions apply.
The contributions are determined annually on the basis of actuarial reports.
Switzerland
A separate pension plan (basic pension plan) and a supplementary benefits plan (bonus plan) exist for
employees in Switzerland; both plans are based on insurance policies and, in addition to retirement
benefits, comprise disability benefits and dependants’ pensions. The contributions to the basic pension
plan are paid by the employee and the employer based on progressive percentages of the insured wage
(annual wage less coordination deduction). For the bonus plan, which is also funded by contributions
from the employer and employees, the contributions are determined as a percentage of the bonus. The
retirement age is 65 for men and 64 for women. The beneficiaries can choose between pension
payments or a one-off payment.
303
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
The present value of defined benefit obligations can be reconciled as follows with the provisions reported
in the consolidated balance sheet:
Changes in net defined benefit obligations
Balance as at 1 Jan 2017
Current service cost
Interest expense/(income)
Remeasurements
Return on plan assets, excluding amounts already recognised in interest income
Losses from changes in financial assumptions
Experience gains
Effect of exchange rate differences
Effect of exchange rate differences
Contributions:
Employers
Plan participants
Benefit payments
Settlements
Tax and administration costs
Balance as at 31 Dec 2017
Current service cost
Interest expense/(income)
Past service cost and gains and losses on settlements
Remeasurements
Losses on plan assets, excluding amounts already recognised in interest income
Return from changes in demographic assumptions
Losses from changes in financial assumptions
Experience gains
Effect of exchange rate differences
Effect of exchange rate differences
Contributions:
Employers
Plan participants
Benefit payments
Settlements
Tax and administration costs
Balance as at 31 Dec 2018
1) Thereof €–0.1 million (2017: nil) in the offsetting item for non-controlling interests
Present value
of obligations
€m
Fair value of
plan assets
€m
492.6
– 324.7
26.9
8.3
35.2
–
– 1.0
– 5.1
– 0.1
– 6.2
– 1.4
–
0.8
– 13.2
0.6
– 0.8
507.6
27.4
8.9
2.7
39.0
–
– 0.5
3.7
– 2.3
–
0.9
0.5
–
0.6
– 11.6
–
– 0.8
536.2
Total
€m
167.9
26.9
2.8
29.7
–
– 5.5
– 5.5
– 24.3
– 24.3
–
–
– 0.1
– 24.4
1.3
– 1.0
– 5.1
– 0.2
– 30.61)
– 0.1
– 23.4
– 23.4
– 0.8
13.2
– 0.5
1.4
– 363.4
–
– 6.5
–
– 6.5
22.9
–
–
–
–
22.9
– 0.2
0
0
0.1
0.6
144.2
27.4
2.4
2.7
32.5
22.9
– 0.5
3.7
– 2.3
0
23.81)
0.3
– 37.3
– 37.3
– 0.6
11.6
–
1.4
– 372.1
0
0
0
0.6
164.1
304
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
In financial year 2018, employees converted a total of €6.9 million (2017: €6.4 million) of their
variable remuneration into deferred compensation benefits.
Assumptions
Provisions for pension plans and other employee benefits are measured annually at the reporting date
using actuarial techniques. The assumptions for determining the actuarial obligations for the pension
plans differ according to the individual conditions in the countries concerned and are shown in the
following table:
Actuarial assumptions
31 Dec 2018
31 Dec 2017
Discount rate
Salary growth
Pension growth
Staff turnover rate
Germany
%
Luxembourg
%
Switzerland
%
Germany
%
Luxembourg
%
Switzerland
%
1.75
3.50
2.00
2.001)
1.75
3.30
1.80
2.001)
1.00
1.00
0
n.a.2)
1.80
3.50
2.00
2.001)
1.80
3.30
1.80
2.001)
0.70
1.00
0
n.a.2)
1) Up to the age of 50, afterwards 0 per cent
2) Staff turnover rate in accordance with the Bundesgesetz über die berufliche Alters-, Hinterlassenen- und Invalidenvorsorge
(BVG, Swiss Federal Occupational Retirement, Survivors’ and Disability Pension Plans Act)
In Germany, the “2018 G” mortality tables (generation tables) developed by Prof Klaus Heubeck are
used. For Luxembourg, generation tables of the Institut national de la statistique et des études
économiques du Grand-Duché du Luxembourg are used. For Switzerland, the BVG 2015 generation
tables are used.
Sensitivity analysis
The sensitivity analysis presented in the following considers the change in one assumption at a time,
leaving the other assumptions unchanged from the original calculation, i.e. possible correlation effects
between the individual assumptions are not taken into account.
305
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Sensitivity analysis of defined benefit obligation
Change in actuarial assumption
Effect on defined benefit
obligation
Effect on defined benefit
obligation
Present value of the
obligation1)
Discount rate
Increase by 1.0 percentage point
Increase by 0.5 percentage points
Reduction by 0.5 percentage points
Reduction by 1.0 percentage point
Salary growth
Increase by 0.5 percentage points
Pension growth
Increase by 0.5 percentage points
Reduction by 0.5 percentage points
Increase by 0.25 percentage points
Reduction by 0.25 percentage points
Reduction by 0.5 percentage points
Life expectancy
Increase by one year
Reduction by one year
31 Dec 2018
defined benefit
obligation
€m
536.2
460.2
496.3
582.7
634.2
549.9
529.1
549.3
542.9
531.7
525.6
537.6
536.0
31 Dec 2017
defined benefit
obligation
€m
507.6
433.3
468.6
552.4
602.3
520.2
497.3
520.0
513.6
502.1
496.2
521.1
494.0
Change
%
–
– 14.2
– 7.4
8.7
18.3
2.6
– 1.3
2.4
1.2
– 0.8
– 2.0
0.3
0
Change
%
–
– 14.6
– 7.7
8.8
18.7
2.5
– 2.0
2.4
1.2
– 1.1
– 2.2
2.7
– 2.7
1) Present value of the obligations using assumptions in accordance with the
”Actuarial assumptions” table
Composition of plan assets
Germany
In Germany, plan assets are held by a trustee in safekeeping for individual companies of Deutsche Börse
Group and the beneficiaries. At the company’s instruction, the trustee uses the funds transferred to
acquire securities, without any consulting by the trustee. The contributions are invested in accordance
with an investment policy, which may be amended by the companies represented in the investment
committee. The trustee may refuse to carry out instructions if they are in conflict with the fund’s
allocation rules or the payment provisions. In accordance with the investment policy,
a value preservation mechanism is applied; investments can be made in different asset classes.
Luxembourg
In Luxembourg, the Board of Directors of the Clearstream Pension Fund is responsible for determining
the investment strategy, with the aim of maximising returns in relation to a benchmark. This benchmark
is 75 per cent derived from the return on five-year German federal government bonds and 25 per cent
from the return on the EURO STOXX 50 Index. According to the investment policy, the fund may only
invest in fixed-income and variable-rate securities, as well as listed investment fund units; it may hold
cash, including in the form of money market funds.
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Executive and Supervisory Boards
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Switzerland
The assets of the pension funds of the affected companies have been invested with AXA Stiftung
Berufliche Vorsorge and are therefore reported under “qualifying insurance policies”.
Composition of plan assets
Bonds
Government bonds
Multilateral development banks
Corporate bonds
Derivatives
Equity index futures
Interest rate futures
Investment funds
Total listed
Qualifying insurance policies
Cash
Total unlisted
Total plan assets
31 Dec 2018
31 Dec 2017
€m
299.8
217.3
0
82.5
2.5
– 0.3
2.8
20.7
323.0
16.9
32.2
49.1
372.1
%
80.5
0.7
5.6
86.8
4.5
8.7
13.2
100.0
€m
258.2
197.3
0
60.9
1.7
– 0.3
2.0
19.5
279.4
14.9
69.1
84.0
%
71.0
0.5
5.4
76.9
4.1
19.0
23.1
363.4
100.0
As at 31 December 2018, plan assets did not include any financial instruments held by Deutsche
Börse Group (2017: nil), nor did they include any property occupied or other assets used by Group
companies.
Risks
In addition to the general actuarial risks, the risks associated with the defined benefit obligations relate
especially to financial risks in connection with the plan assets, including in particular counterparty credit
and market risks.
Market risk
The return on plan assets is assumed to be the discount rate determined on the basis of corporate bonds
with an AA rating. If the actual rate of return on plan assets is lower than the discount rate used, the
net defined benefit liability increases accordingly. If volatility is low, the actual return is further expected
to exceed the return on corporate bonds with a good rating in the medium to long term.
The level of the net liability is influenced by the discount rates in particular, whereby the current low
interest rates contribute to a relatively high net liability. A continued decline in returns on corporate
bonds will lead to a further increase in defined benefit obligations, which can be only partially offset by
the positive development of the fair values of the assets included in plan assets.
307
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Deutsche Börse Group considers the share price risk resulting from derivative positions in equity index
futures in the plan assets to be appropriate. The company bases its assessment on the expectation that
the overall volume of payments from the pension plans will be manageable in the next few years, that
the total amount of the obligations will also be manageable and that it will be able to meet these
payments in full from operating cash flows. Any amendments to the investment policy take into account
the duration of the pension obligation as well as the expected payments over a period of ten years.
Inflation risk
Possible inflation risks that could lead to an increase in defined benefit obligations exist because some
pension plans are final salary plans or the annual capital components are directly related to salaries,
i.e. a significant increase in salaries would lead to an increase in the benefit obligation from these plans.
In Germany, however, there are no contractual arrangements with regard to inflation risk for these
pension plans. An interest rate of 6 per cent p.a. has been agreed for the employee-financed deferred
compensation plan; the plan does not include any arrangements for inflation, so that it has to be
assumed that there will be little incentive for employees to contribute to the deferred compensation plan
in times of rising inflation.
In Luxembourg, salaries are adjusted for the effects of inflation on the basis of a consumer price index
no more than once a year; this adjustment leads to a corresponding increase in the benefit obligation
from the pension plan. Since the obligation will be met in the form of a capital payment, there will be
no inflation-linked effects once the beneficiary reaches retirement age.
In Switzerland, the benefit plan at AXA Stiftung Berufliche Vorsorge includes the provision that the board
of this foundation decides annually whether the retirement pensions will be adjusted to reflect price
trends. The decision takes into account, in particular, the financial capability of the foundation. There
are no arrangements for automatic adjustments to price increases over and above the legal requirements
that apply to certain surviving dependants’ and disability pensions.
Duration and expected maturities of the pension obligations
The weighted duration of the pension obligations was 16.1 years (2017: 16.6 years) as at
31 December 2018.
Expected maturities of undiscounted pension payments
Less than 1 year
Between 1 and 2 years
Between 2 and 5 years
More than 5 years up to 10 years
Total
1) The expected payments in Swiss francs were translated into euros at the relevant closing rate on 31 December.
Expected
pension
payments1)
Expected
pension
payments1)
31 Dec 2018
€m
31 Dec 2017
€m
19.6
14.5
42.8
112.4
189.3
17.7
15.1
40.7
99.8
173.3
308
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
The expected costs of defined benefit plans amount to approximately €16.5 million for the 2019
financial year, including net interest expense.
Defined contribution pension plans and multi-employer plans
During the reporting period, the costs associated with defined contribution plans, and designated multi-
employer plans, amounted to €39.6 million (2017: €36.7 million).
In 2019, Deutsche Börse Group expects to make contributions to multi-employer plans amounting to
around €10.2 million.
18. Changes in other provisions
Changes in other provisions (part 1)
Restructuring
and
efficiency
measures
€m
57.3
0
– 17.0
– 4.3
111.9
0
0.6
Bonuses
€m
Interest on
taxes
€m
Share-based
payments
€m
Recourse and
litigation risks
€m
100.8
– 9.2
– 75.3
– 11.8
114.8
0.1
0
66.4
0.3
– 3.3
0
16.2
0
0
42.1
– 1.0
– 6.4
– 1.2
36.6
0
0
3.7
0
– 2.0
– 0.3
11.2
0
0
Balance as at 1 Jan 2018
Reclassification1)
Utilisation
Reversal
Additions
Currency translation
Interest
Balance as at 31 Dec 2018
148.5
119.4
79.6
70.1
12.6
1) Relates primarily to reclassifications to the employee-funded deferred compensation plan (see note 17) as well as to reclassifications from liabilities
Changes in other provisions (part 2)
Balance as at 1 Jan 2018
Reclassification2)
Utilisation
Reversal
Additions
Currency translation
Interest
Balance as at 31 Dec 2018
Pension
obligations
to IHK1)
€m
Operational
claims
€m
Other
personnel
provisions
€m
Miscellaneous
€m
Total
(part 1 and
part 2)
€m
9.2
0
0
– 1.1
0
0
0.2
8.3
5.1
0
– 0.5
– 2.7
1.0
0
0
2.9
14.8
3.1
– 8.0
– 3.4
8.7
0
0
12.5
0.1
– 0.3
– 1.0
9.6
0
0
311.9
– 6.7
– 112.8
– 25.8
310.0
0.1
0.8
15.2
20.9
477.5
1) IHK = Industrie- und Handelskammer Frankfurt am Main (the Frankfurt/Main Chamber of Industry and Commerce)
2) Relates primarily to reclassifications to the employee-funded deferred compensation plan (see note 17) as well as to reclassifications from liabilities
309
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Provisions for restructuring and efficiency measures include provisions for contractually agreed early
retirement benefits and severance payments (€88.1 million) as well as expenses directly related
to restructuring measures (€1.4 million). Furthermore, this item includes provisions amounting to
€59.0 million for the implementation of the restructuring plan. A total of €108.3 million of the additions
to the provisions relate to the programme resolved in 2018 to reduce structural costs (Structural
Performance Improvement Programme, SPIP).
The “other personnel provisions” item as at 31 December 2018 includes, inter alia, personnel-related
provisions of €5.9 million (2017: €5.8 million) for work anniversaries, and of €9.0 million (2017:
€8.5 million) for other personnel costs.
The “miscellaneous” item includes, inter alia, provisions for anticipated losses of €10.7 million (2017:
€7.3 million) and provisions for rent and service costs of €2.0 million (2017: €1.3 million).
For details on share-based payments, see note 28.
19. Other non-current provisions
Other non-current provisions have more than one year to maturity.
Composition of other non-current provisions
Restructuring and efficiency measures
Share-based payments
Anticipated losses
Pension obligations to IHK1)
Bonuses
Other non-current personnel provisions
Miscellaneous
Total
thereof with remaining maturity of between 1 and 5 years
thereof with remaining maturity of more than 5 years
1) IHK = Industrie- und Handelskammer Frankfurt am Main (the Frankfurt/Main Chamber of Industry and Commerce)
31 Dec 2018
€m
31 Dec 2017
€m
84.5
64.5
9.8
8.3
7.1
6.2
3.9
184.3
165.6
18.7
52.4
36.1
5.0
9.2
10.0
6.2
1.4
120.3
96.8
23.5
310
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Executive and Supervisory Boards
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Financial statements
Notes | Consolidated balance sheet disclosures
Further information
20. Other current provisions
Composition of other current provisions
Bonuses
Interest on taxes1)
Restructuring and efficiency measures
Recourse and litigation risks
Other current personnel provisions
Share-based payments
Operational claims
Miscellaneous
Total
31 Dec 2018
€m
31 Dec 2017
€m
112.3
79.6
64.0
12.6
9.0
5.6
2.9
7.2
90.8
66.4
4.9
3.7
8.5
6.0
5.1
6.2
293.2
191.6
1) Provisions for interest on taxes amounting to €10.8 million (2017: nil) have an estimated remaining maturity of more than one year.
21. Other liabilities
Deutsche Börse Group reports the following contract liabilities resulting from contracts with customers:
Contract liabilities
Contract liabilities (long-term)
Contract liabilities (short-term)
Total
31 Dec 2018
€m
31 Dec 2017
€m
10.0
5.4
15.4
0
5.9
5.9
The adjustment effects resulting from the change in the accounting method as at 1 January 2018
amount to €10.7 million for contract liabilities (long-term); for details, please see note 3.
Current liabilities are composed as follows:
Composition of other current liabilities
Liabilities from CCP positions
Tax liabilities (excluding income taxes)
Vacation entitlements, flexitime and overtime credits
Social security liabilities
Deferred income
Contract liabilities
Special payments and bonuses
Liabilities to supervisory bodies
Miscellaneous
Total
31 Dec 2018
€m
31 Dec 2017
€m
543.9
36.4
24.5
6.8
0.4
5.4
2.8
2.7
5.9
628.8
364.4
37.7
21.7
7.6
0.6
5.9
2.8
2.6
11.7
455.0
311
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Other disclosures
22. Consolidated cash flow statement disclosures
Cash flows from operating activities
After adjustments to net profit for the period for non-cash items, cash flows from operating activities
excluding CCP positions amounted to €1,176.5 million (2017: €1,107.2 million). After adjustment for
the change in CCP positions cash flow from operating activities amounted to €1,298.2 million (2017:
€1,056.2 million). For details on the adjustments see the
management report.
“Financial position” section of the combined
Deutsche Börse Group discloses incoming dividend payments (€6.7 million; 2017: €8.6 million) and
income tax payments (€303.3 million; 2017: €308.8 million) within cash flows from operating
activities. Interest payments are generally included in cash flows from operating activities unless they
result from banking business. In the reporting period, interest paid amounting to €218.0 million (2017:
€213.9 million) and interest received amounting to €203.6 million (2017: €192.6 million) are
disclosed in cash flows from operating activities.
Other non-cash effects consist (consisted) of the following items:
Composition of other non-cash income
Subsequent measurement of non-derivative financial instruments
Reversal of discount and transaction costs from long-term financing
Reversal of the revaluation surplus for cash flow hedges
Equity method measurement
Impairment of financial instruments
Subsequent measurement of derivatives
Changes in contract liabilities
Gains on the disposal of subsidiaries and equity investments
Miscellaneous
Total
Cash flows from investing activities
2018
€m
– 30.5
2.9
0.7
1.0
0.9
0.8
– 1.2
0
4.1
– 21.3
2017
€m
89.4
3.4
2.8
1.0
0
– 8.0
0
– 191.0
6.0
– 96.4
Cash flows from investing activities amounted to €792.0 million (2017: €181.9 million). In the 2018
financial year, it reflected in particular cash inflows from banking business. Changes in receivables and
liabilities which relate to the banking business of the Clearstream subgroup and which have an original
maturity of more than three months are disclosed within cash flows from investing activities. Receivables
from banking business decreased by €655.1 million (2017: increase in receivables amounting to
€47.7 million) while the respective liabilities increased by €250.3 million (2017: nil).
312
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Financial statements
Notes | Other disclosures
Further information
In addition, cash flows from investing activities reflected the acquisition of Swisscanto Funds Centre Ltd.,
London, United Kingdom, (renamed Clearstream Funds Centre Ltd.), as well as the acquisition of the
significant assets and liabilities of the GTX Electronic Communication business (GTX ECN) as part of a
business combination. As part of the acquisition of the shares in Swisscanto Funds Centre Ltd. effective
1 October 2018, outflows cash and cash equivalents amounting to €83.3 million (after deduction of
cash and cash equivalents acquired amounting to €9.4 million) were recorded. The acquisition of the
GTX ECN business on 29 June 2018 resulted in an outflow of cash and cash equivalents amounting
to €85.9 million.
Investments in intangible assets and property, plant and equipment amounted to €160.0 million (2017:
€149.2 million). Among the investments in intangible assets and property, plant and equipment, the
measures undertaken under the strategic growth initiatives and infrastructure projects are classified as
expansion investments, while all remaining investments are reported as replacement investments.
The investments in intangible assets and property, plant and equipment are broken down by segment
as follows:
Payment to acquire intangible assets and property, plant and equipment
2018
€m
2017
(restated)1)
€m
Expansion investments
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data
Replacement investments
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data
Total investments according to segment reporting
1) Prior-year figures were restated due to changes in the segment structure. For details, see note 24.
20.4
8.8
3.0
2.7
35.8
4.4
1.0
0
3.8
79.9
14.4
12.4
1.3
6.1
22.0
11.8
2.6
3.4
6.1
80.1
160.0
17.8
3.4
0
3.9
41.0
0.5
2.6
0
10.5
79.7
10.9
10.8
3.3
2.8
19.2
5.3
2.7
1.6
12.9
69.5
149.2
313
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Investments in long-term financial instruments totalling €38.7 million (2017: €312.4 million) included
€22.2 million (2017: €292.9 million) for the purchase of floating-rate notes in the banking business. In
addition, equity investments were acquired in a total amount of €13.4 million (2017: €14.5 million).
Non-current debt instruments and equity instruments totalling €259.5 million (2017: €859.1 million)
matured or were sold in the 2018 financial year. The disposal of shares in BATS Global Markets, Inc.,
as well as of an additional equity investment, resulted in cash inflows amounting to a total of €274.7
million in the 2017 financial year.
Cash flows from financing activities
Cash outflows from financing activities totalled €832.9 million (2017: €501.0 million).
Deutsche Börse AG paid dividends totalling €453.3 million for the 2017 financial year (dividend for
the 2016 financial year: €439.0 million).
In addition, cash flows from financing activities included the acquisition of treasury shares as part of
the share repurchase programme (€364.2 million; 2017: 28.2 million) as well as payments to non-
controlling shareholders (€-14.9 million; 2017: €39.3 million).
In the 2018 financial year, a bond issued by Deutsche Börse AG and amounting to €600.0 million
matured. Deutsche Börse AG has issued a ten-year Eurobond in the same amount.
Reconciliation of cash and cash equivalents
Reconciliation of cash and cash equivalents
Restricted bank balances
Other cash and bank balances
Net position of financial instruments held by central counterparties
Current financial instruments measured at amortised cost
less financial instruments with an original maturity exceeding 3 months
Current financial liabilities measured at amortised cost
less financial instruments with an original maturity exceeding 3 months
Derivatives
Current liabilities from cash deposits by market participants
Cash and cash equivalents
31 Dec 2018
€m
31 Dec 2017
(restated)
€m
29,833.6
29,392.0
1,322.3
212.0
1,297.6
712.1
19,722.6
13,172.6
– 2,666.6
– 1,507.1
– 19,024.7
– 13,976.2
1,999.0
0
733.5
– 29.0
– 29,559.2
– 29,215.3
1,839.0
580.2
314
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
23. Earnings per share
Under IAS 33, earnings per share are calculated by dividing the net profit for the period attributable to
Deutsche Börse AG shareholders (net income) by the weighted average number of shares outstanding.
In order to determine diluted earnings per share, potentially dilutive ordinary shares that may be
acquired under the share-based payment programmes (see also
number of shares. In order to calculate the number of potentially dilutive ordinary shares, the exercise
prices were adjusted for the fair value of the services still to be provided.
note 28) were added to the average
In order to determine diluted earnings per share, the 2014 Long-term Sustainable Instrument (LSI)
tranche, for which cash settlement has not been resolved, is assumed to be settled with equity
instruments – regardless of actual accounting in accordance with IFRS 2. The following potentially
dilutive rights to purchase shares were outstanding as at 31 December 2018:
Calculation of the number of potentially dilutive ordinary shares
Tranche
20142)
Total
Adjustment of
the exercise
price according
to IAS 33
€
Average
number of
outstanding
options
31 Dec 2018
Average price
for the period1)
€
Exercise price
€
0
0
7,605
111.50
Number of
potentially
dilutive
ordinary shares
31 Dec 2018
7,605
7,605
1) Volume-weighted average price of Deutsche Börse AG shares on Xetra calculated on a daily basis for the period 1 January to 31 December 2018
2) This relates to share subscription rights within the scope of the Long-term Sustainability Instrument (LSI) for senior executives. The quantity of subscription
rights under the 2014 LSI tranche may still change from the quantity reported as at the reporting date, since subscription rights will only be granted in future
financial years.
As the volume-weighted average share price calculated on a daily basis was higher than the adjusted
exercise price for the 2014 tranche, these stock options are considered to be dilutive under IAS 33 as at
31 December 2018.
Calculation of earnings per share (basic and diluted)
Number of shares outstanding as at beginning of period
Number of shares outstanding as at end of period
Weighted average number of shares outstanding
Number of potentially dilutive ordinary shares
2018
2017
186,610,158
186,805,015
183,347,045
186,610,158
184,887,281
186,835,673
7,605
17,366
Weighted average number of shares used to compute diluted earnings per share
184,894,886
186,853,039
Net profit for the period attributable to Deutsche Börse AG shareholders (€m)
824.3
874.3
Earnings per share (basic) (€)
Earnings per share (diluted) (€)
4.46
4.46
4.68
4.68
315
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
As in the previous year, there were no subscription rights in 2018 that were excluded from the
calculation of the weighted average of potentially dilutive shares for having a dilutive effect during
the reporting year ending on the reporting date.
24. Segment reporting
Segment reporting is governed by the internal organisational and reporting structure. Since 1 January
2018, Deutsche Börse Group has divided its business activities into nine segments:
The former Eurex segment was divided into three segments: Eurex (financial derivatives),
EEX (commodities) and 360T (foreign exchange).
The former Clearstream segment was divided into three segments: Clearstream (post-trading),
IFS (investment fund services) and GSF (collateral management).
The former Market Data + Services (MD+S) segment was separated into STOXX (index business) and
Data. Revenues from the Infrastructure Services division, the third pillar of the former MD+S segment,
have been allocated to the Eurex and Xetra segments.
The Group continues to report on business developments in the cash market within the Xetra
(cash equities) segment.
This structure serves as a basis for the Group’s internal management and financial reporting (see the table
entitled “Internal organisational and reporting structure” for details). This more detailed segment reporting
further enhances transparency, highlighting growth areas. Recognising the growing importance of some
business lines, these have been shown as independent reporting segments as of the 2018 financial year.
Hence, the Group also reports these business lines’ cost base and EBITDA on the segment level.
Internal organisational and reporting structure
Segment
Business areas
Eurex (financial derivatives)
Electronic trading of European derivatives (Eurex Exchange)
Eurex Repo over-the-counter (OTC) trading platform
Electronic clearing architecture C7
Central counterparty for on- and off-exchange derivatives and repo
transactions
EEX (commodities)
Electronic trading of power and gas products as well as emissions certificates
(EEX group)
Central counterparty for traded spot and derivatives products
360T (foreign exchange)
Electronic trading of foreign exchange (360T)
Central counterparty for on-and off-exchange traded derivatives
Xetra (cash equities)
Cash market with the Xetra, Börse Frankfurt and Tradegate trading venues
Clearstream (post-trading)
IFS (investment fund services)
Central counterparty for equities and bonds
Admission of securities (listing)
Custody and settlement services for domestic and international securities
Investment funds and hedge funds services (order routing, settlement and
custody)
GSF (collateral management)
Global securities financing services and collateral management, repos and
STOXX (index business)
Data
securities lending
Development and sales of indices (STOXX and DAX)
Distribution of licences for trading and market signals
Technology and reporting solutions for external customers
Trading participant connectivity
316
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Executive and Supervisory Boards
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Financial statements
Notes | Other disclosures
Further information
Segment reporting (part 1)
Net revenue
Operating costs
EBITDA
2018
€m
936.1
256.6
78.8
228.7
727.3
154.3
83.1
144.5
170.3
2017
(restated)
€m
796.5
212.2
66.5
218.3
667.7
137.6
81.6
127.7
154.2
2018
€m
– 376.3
– 149.2
– 49.9
– 118.8
– 351.9
– 108.3
– 48.4
– 53.9
– 83.5
2017
€m
– 326.4
– 124.0
– 46.5
– 108.4
– 294.6
– 85.7
– 38.7
– 47.7
– 59.6
2018
€m
559.4
107.2
28.9
115.5
375.2
46.0
34.2
90.6
86.7
2017
€m
663.0
88.2
20.0
115.1
373.1
51.7
42.9
79.9
94.6
2,779.7
2,462.3
– 1,340.2
– 1,131.6
1,443.7
1,528.5
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data
Group
Segment reporting (part 2)
Depreciation
EBIT
Investments1)
2018
€m
– 48.4
– 26.5
– 15.8
– 11.3
– 50.0
– 19.5
– 11.5
– 5.7
– 21.8
2017
€m
– 53.3
– 21.2
– 14.0
– 9.1
– 36.4
– 12.4
– 4.8
– 4.9
– 3.8
2018
€m
2017
€m
2018
€m
511.0
609.7
80.7
13.1
104.2
325.2
26.5
22.7
84.9
64.9
67.0
6.0
106.0
336.7
39.3
38.1
75.0
90.8
34.8
21.2
4.3
8.8
57.8
16.2
3.6
3.4
9.9
Employees
(as at 31 Dec)
2017
€m
28.8
14.2
3.3
6.7
2018
2017
1,265
1,223
725
253
488
628
231
497
60.2
1,767
1,741
5.8
5.3
1.6
23.3
752
242
197
275
675
230
172
243
– 210.5
– 159.9
1,233.2
1,368.6
160.0
149.2
5,964
5,640
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data
Group
1) Excluding goodwill
Sales revenue is presented separately by external sales revenue and internal (inter-segment) sales
revenue. Inter-segment services are charged on the basis of measured quantities or at fixed prices,
e.g. the provision of data by the Eurex (financial derivatives) segment to the Data segment.
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Further information
Non-cash valuation allowances and bad debt losses resulted from the following segments:
Breakdown of non-cash valuation allowances and bad debt losses
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GSF (collateral management)
STOXX (index business)
Data
Total
2018
€m
0.2
0
0.5
1.4
– 0.3
0
0.1
1.2
0.1
3.2
2017
€m
0.1
0
0.3
0.5
0.4
0
0
– 0.1
0
1.2
In the year under review, there was an extraordinary impairment loss of €0.6 million in strategic
investments (2017: €1.1 million, see
note 11 and
€36.7 million (2017: €1.3 million, see
to the Clearstream segment (for Future Market Access and Malmo), €6.1 million to GSF (for One
SecLend, One CMS and LH Connect), €5.4 million to IFS (for IFS Arrow), €16.1 million to the Data
segment (for the Regulatory Reporting Hub), €1.3 million to the Eurex segment, €0.4 million to Xetra,
and €0.1 million related to STOXX (for a central IT application).
note 8). An additional extraordinary impairment loss totalled
note 12). Of this amount, €7.2 million related
Deutsche Börse Group’s business model – and that of its segments – is focused on an internationally
operating participant base and pricing does not differ depending on the customer’s location. From a
price, margin and risk perspective, this means that it is not decisive whether sales revenue is generated
from German or non-German participants.
The risks and returns from the activities of the subsidiaries operating within the economic environment
of the European Monetary Union (EMU) do not differ significantly from each other on the basis of the
factors to be considered in identifying information on geographical regions under IFRS 8. As a result,
Deutsche Börse Group has designated the following regional segments: the eurozone, the rest of Europe,
America and Asia-Pacific.
Sales revenue is allocated to the individual regions according to the customer’s domicile, while
investments and non-current assets are allocated according to the company’s domicile and employees
according to their location.
As described above, the analysis of sales is based on the direct customer’s billing address. This means
e.g. that sales to an American investor trading a product with an Asian underlying via a European
clearing member are classified as European sales.
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Further information
Information on geographical regions
Sales revenue1)
Investments2)
Non-financial
non-current assets3) 4)
Number of employees
2018
€m
2017
(restated)
€m
2018
€m
2017
€m
2018
€m
20175)
€m
2018
2017
Eurozone
1,477.4
1,352.5
154.7
144.6
3,636.2
3,630.4
Rest of Europe
1,120.0
1,019.5
America
Asia-Pacific
198.3
145.6
169.4
145.4
3.7
1.5
0.1
3.6
0.1
0.9
512.7
213.2
2.9
485.1
122.9
4.7
4,425
1,154
184
201
4,224
1,063
157
196
Total of all regions
2,941.3
2,686.8
160.0
149.2
4,365.0
4,243.1
5,964
5,640
Consolidation of internal
net revenue
– 47.4
– 43.2
Group
2,893.9
2,643.6
160.0
149.2
4,365.0
4,243.1
5,964
5,640
1) Including countries in which more than 10 per cent of sales revenue was generated: UK (2018: €887.5 million; 2017: €792.8 million) and Germany (2018:
€655.0 million; 2017: €641.8 million).
2) Excluding goodwill
3) Including countries in which more than 10 per cent of non-current assets are held: Germany (2018: €3,439.2 million; 2017: €3,437.9 million) and Switzerland
(2018: €425.9 million; 2017: €467.7 million).
4) These include intangible assets, property, plant and equipment, and investments in associates and joint ventures.
5) Non-financial non-current assets of Nodal Exchange group are disclosed within the “America” region; prior-year figures have been restated.
25. Financial risk management
Deutsche Börse Group presents the qualitative disclosures required by IFRS 7 in detail in the combined
management report (see explanations in the
arising from financial instruments, as well as the objectives, strategies and methods used to manage risk.
risk report). These include the nature and extent of risks
Financial risks arise at Deutsche Börse Group mainly in the form of credit risk. To a smaller extent, the
Group is exposed to market risk. Financial risks are quantified using the economic capital concept
(please refer to the
risk report for detailed disclosures). Required economic capital is assessed on a
99.98 per cent confidence level for a one-year holding period. It is compared with the Group’s liable
equity capital adjusted for intangible assets so as to test the Group’s ability to absorb extreme and
unexpected losses. Required economic capital (REC) for financial risk is calculated at the end of each
month and amounted to €601.0 million as at 31 December 2018, whereby €517.0 million stem from
credit risk and €84.0 million stem from market risk. Besides the monitoring for the regulated entities,
financial risks are monitored on Group level and on the segment level. REC for financial risk in the Eurex
(financial derivatives) and Clearstream (post-trading) segments amounts to €166.0 million and
€285.0 million, which corresponds to 28 per cent and 47 per cent, respectively, of Deutsche Börse
Group’s total REC for financial risk.
The Group evaluates its financial risk situation on an ongoing basis. In the view of the Executive Board,
no threat to the continued existence of the Group can be identified at this time.
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Notes | Other disclosures
Further information
Credit risk
Deutsche Börse Group is exposed to credit risk arising from the following items:
Credit risk of financial instruments (part 1)
Carrying amounts –
maximum risk exposure
Collateral
Segment
Note
Amount at
31 Dec 2018
€m
Amount at
31 Dec 2017
(restated)
€m
Amount at
31 Dec 2018
€m
Amount at
31 Dec 2017
(restated)
€m
Collateralised cash investments
Reverse repurchase agreements
Uncollateralised cash investments
Money market lendings – central banks
Money market lendings – other counterparties
Balances on nostro accounts and other bank
deposits
Securities
Fund assets
Eurex (financial
derivatives)1)
Clearstream
(post-trading)
Group1)
Eurex (financial
derivatives)1)
Clearstream
(post-trading)
Clearstream
(post-trading)
Clearstream
(post-trading)
Group1)
Clearstream
(post-trading)
49.7
11.7
53.72)
11.8
13.4
6,516.2
4,843.5
6,616.73) 4)
4,870.23) 4)
410.0
610.0
411.0
611.3
6,975.9
5,465.2
7,081.4
5,493.3
24,395.5
27,111.1
5,974.7
5,471.6
556.7
388.3
2,252.5
1,291.2
6,197.5
2,952.8
13.4
1,610.0
1,817.5
Eurex (financial
derivatives)
Group
Group
13.4
13.4
13.9
9.4
5.15)
14.6
9.5
5.05)
15.1
41,016.0
39,062.1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Loans for settling securities transactions
Technical overdraft facilities
Automated Securities Fails Financing7)
ASLplus securities lending7)
Clearstream
(post-trading)
Clearstream
(GSF)
Clearstream
(GSF)
Total
13.4
2,253.3
754.7
n.a. 6)
n.a. 6)
413.28)
597.98)
448.4
658.9
42,558.3
52,121.9
42,693.7
52,603.0
45,224.8
53,474.5
43,142.1
53,261.9
93,216.7
98,001.8
50,223.5
58,755.2
1) Presented in the items “restricted bank balances” and “other cash and bank balances”
2) Thereof none pledged to central banks (2017: nil)
3) Thereof €162.7 million pledged to central banks (2017: nil)
4) Total of fair value of cash (2018: nil; 2017: nil) and securities collateral (2018: €6,616.7 million; 2017: €4,870.2 million) received under reverse
repurchase agreements
5) The amount includes collateral totalling €5.1 million (2017: €5.0 million).
6) The portfolio of deposited collateral is not directly attributed to any utilisation but is determined by the scope of the entire business relationship and
the limits granted.
7) Off-balance-sheet items
8) Meets the IFRS 9 criteria for a financial guarantee contract
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Further information
Credit risk of financial instruments (part 2)
Carrying amounts –
maximum risk exposure
Collateral
Segment
Note
Amount at
31 Dec 2018
€m
Amount at
31 Dec 2017
(restated)
€m
Amount at
31 Dec 2018
€m
Amount at
31 Dec 2017
(restated)
€m
Balance brought forward
93,216.7
98,001.8
50,223.5
58,755.2
Other financial instruments
Convertible notes
Other loans
Other assets
Trade receivables
Other receivables
Other instruments at fair value
Financial instruments held by
central counterparties
Derivatives
Total
Group
Group
Group
Group
Clearstream
(post-trading)
Eurex (financial
derivatives)
Group
Group
13.9
13.4
13.4
2.7
0.4
23.7
403.2
1.2
0.4
23.7
331.8
57.7
144.0
13.4
1,608.9
13.4
14.4
0.4
2,111.4
112.4
14.4
0
627.9
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
47,969.59)
45,087.39)
58,992.910)
54,982.810)
13.8
4.7
5.3
0
0
143,302.3
143,722.3
109,216.4
113,738.0
1) Presented in the items “restricted bank balances” and “other cash and bank balances”
2) Thereof none pledged to central banks (2017: nil)
3) Thereof €162.7 million pledged to central banks (2017: nil)
4) Total of fair value of cash (2018: nil; 2017: nil) and securities collateral (2018: €6,616.7 million; 2017: €4,870.2 million) received under reverse
repurchase agreements
5) The amount includes collateral totalling €5.1 million (2017: €5.0 million).
6) The portfolio of deposited collateral is not directly attributed to any utilisation but is determined by the scope of the entire business relationship and
the limits granted.
7) Off-balance-sheet items
8) Meets the IFRS 9 criteria for a financial guarantee contract
9) Net value of all margin requirements resulting from executed trades at the reporting date as well as default fund requirements: this figure represents the risk-
oriented view of Eurex Clearing AG and European Commodity Clearing AG, while the carrying amount of the “financial instruments held by central counterparties”
item in the balance sheet shows the gross amount of the open trades according to IAS 32.
10) Collateral value of cash and securities collateral deposited for margins, covering the net value of all margin and default fund requirements
321
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Further information
Cash investments
Deutsche Börse Group is exposed to credit risk in connection with the investment of cash funds.
Clearstream (post-trading) receives cash deposits from its customers in various currencies and invests
these cash deposits in money market instruments. Eurex Clearing AG (Eurex (financial derivatives)
segment) receives cash collateral from its clearing members mainly in its clearing currencies euro and
Swiss francs.
The Group mitigates such risks by investing short-term funds either – to the extent possible – on a
collateralised basis, e.g. via reverse repurchase agreements, or by depositing them with central banks.
According to the treasury policy, mainly highly liquid financial instruments with a minimum rating of
AA– (S&P Global Ratings/Fitch) or Aa3 (Moody’s) issued or guaranteed by governments or supranational
institutions are eligible as collateral.
Uncollateralised cash investments are permitted only for counterparties with sound creditworthiness
within the framework of defined counterparty credit limits. Counterparty credit risk is monitored on the
basis of an internal rating system.
The fair value of securities received under reverse repurchase agreements was €7,081.4 million (2017:
€5,493.3 million). Clearstream Banking S.A. and Eurex Clearing AG are entitled to repledge the
securities received to their central banks to regain liquidity.
As at 31 December 2018, Clearstream Banking S.A. has pledged €162.7 million worth of securities for
reverse repurchase agreements to central banks (2017: nil).
A portion of the securities held by Clearstream in its own portfolio is pledged to central banks to
collateralise the settlement facilities obtained. The fair value of pledged securities was €1,205.7 million
as at 31 December 2018 (2017: €1,195.9 million). Eurex Clearing AG has pledged no securities to
central banks.
Loans for settling securities transactions
Clearstream (post-trading) grants customers technical overdraft facilities to maximise settlement
efficiency. These settlement facilities are subject to internal credit review procedures. They are revocable
at the option of the Clearstream subgroup and are in general fully collateralised. Technical overdraft
facilities amounted to €115.2 billion as at 31 December 2018 (2017: €106.6 billion). Of this amount,
€3.3 billion (2017: €3.6 billion) is unsecured and only relates to credit lines granted to selected central
banks and multilateral development banks in compliance with the CSDR exemption as per article 23
of Commission Delegated Regulation (EU) 2017/390. Actual outstandings at the end of each business
day generally represent a small fraction of the facilities and amounted to €2,253.3 million as at
31 December 2018 (2017: €754.7 million); see
note 13.4.
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Further information
Clearstream (GSF segment, collateral management) also guarantees the risk resulting from the
Automated Securities Fails Financing programme it offers to its customers, where Clearstream Banking
S.A. acts as an intermediary between borrower and lender. This risk is collateralised. Guarantees given
under this programme amounted to €413.2 million as at 31 December 2018 (2017: €597.9 million).
Collateral received by Clearstream Banking S.A. in connection with these loans amounted to €448.4
million (2017: €658.9 million).
Under the ASLplus securities lending programme, Clearstream Banking S.A. had securities borrowings
from various counterparties totalling €42,558.3 million as at 31 December 2018 (2017:
€52,121.9 million). These securities were fully lent to other counterparties. Collateral received by
Clearstream Banking S.A. in connection with these loans amounted to €42,693.7 million (2017:
€52,603.0 million). This collateral was pledged to the lender, while Clearstream Banking S.A. remains
its legal owner.
In 2017 and 2018, no losses from credit transactions occurred in relation to any of the transaction
types described.
Financial instruments of the central counterparties
To safeguard the Group’s central counterparties against the risk of default by a clearing member, the
clearing conditions require the clearing members to deposit margins in the form of cash or securities on
a daily basis or an intraday basis in the amount stipulated by the respective clearing house. Additional
lines of defence of the Group’s central counterparties are described in detail in the
risk report.
The aggregate margin calls based on the executed transactions and default fund requirements after
haircuts was €47,969.5 million as at the reporting date (2017: €45,087.3 million). Collateral totalling
€58,992.9 million (2017: €54,982.8 million) was actually deposited.
Composition of collateral held by central counterparties
Cash collateral (cash deposits)
1) 2)
Securities and book-entry securities collateral
3) 4)
Total
Collateral value
at 31 Dec 2018
€m
Collateral value
at 31 Dec 2017
€m
29,240.5
28,751.5
29,752.4
26,231.3
58,992.9
54,982.8
1) The amount includes the default fund totalling €2,938.3 million (2017: €2,990.0 million).
2) The collateral value is determined on the basis of the fair value less a haircut amounting to €344.4 million (2017: €438.5 million).
3) The amount includes the default fund totalling €1,789.1 million (2017: €1,466.7 million).
4) The collateral value is determined on the basis of the fair value less a haircut amounting to €4,243.9 million (2017: €3,192.2 million).
323
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Notes | Other disclosures
Further information
Trade receivables and contract assets
Trading, settlement and custody fees are generally collected without delay by direct debit. Fees for other
services, such as the provision of data and information, are settled mainly by transfer. Trade receivables
are analysed using an expected credit loss model based on the simplified approach as outlined in IFRS
9. To measure the expected credit loss, trade receivables and contract assets have been grouped based
on the days past due. The trade receivables share the main risk characteristics. The expected loss
amount has been determined by applying the lifetime expected loss approach. The expected loss rates
are based on the payment profiles over a period of five years and the loss profile experienced over that
period. As at 31 December 2018, no contract assets were recognised by Deutsche Börse Group.
Following that approach, the loss allowance as at 31 December 2018 and as at 1 January 2018 was
calculated as follows:
Loss allowances for trade receivables
as at 31 December 2018
Not
more than
30 days
past due
Not
more than
60 days
past due
Not
more than
90 days
past due
Not
more than
120 days
past due
Not
more than
360 days
past due
More than
360 days
past due
Expected loss rate
Trade receivables
Loss allowance
%
€m
€m
0
30.5
0
0
12.4
0.1
0
7.1
0
1.0
3.2
0
5.0
15.0
0.8
82.0
4.3
3.5
Insolvent
0
1.3
1.3
Total
–
73.8
5.7
Loss allowances for trade receivables
as at 1 January 2018
Not more
than
30 days
past due
0
10.0
0
More than
30 days
past due
More than
60 days
past due
More than
90 days
past due
More than
120 days
past due
More than
360 days
past due
0
7.7
0.1
1.0
9.7
0
1.0
1.2
0
6.0
7.5
0.4
74.0
2.0
1.5
Insolvent
0
1.7
1.7
Total
–
39.8
3.7
Expected loss rate
Trade receivables
Loss allowance
%
€m
€m
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Further information
Trade receivables are written off when there is no reasonable expectation of recovery (see also
In 2018, no significant receivables (31 December 2017: €0.3 million) were directly written off due to
customer defaults. Moreover, €0.1 million were received in 2018 for receivables which had previously
been written off (2017: nil).
note 3).
Debt securities
All of the entity’s debt securities measured at amortised cost are considered to have low credit risk, and
the loss allowance recognised during the period was therefore limited to twelve months’ expected losses.
The Group considers “low credit risk” for listed bonds to be an investment grade credit rating granted by
an external rating agency. The expected loss is calculated based on a loss rate approach derived from
default rates provided by a rating agency.
The development of the loss allowance for debt securities is shown below.
Development of the loss allowance
The loss allowance for other financial assets at amortised cost as at 31 December 2017 reconciles to
the opening loss allowance on 1 January 2018 and to the closing loss allowance as at 31 December
2018 as follows:
Development of the loss allowance
Debt securities
Trade receivables
Trade receivables
Total
Closing loss allowance
as at 31 Dec 2017 (IAS 39)
Amounts restated through
opening accumulated profit on
first-time adoption
Opening loss allowance
as at 1 Jan 2018 (IFRS 9)
Increase in the allowance
recognised in profit or loss
Decrease in the allowance
recognised in profit or loss
Closing loss allowance
as at 31 Dec 2018 (IFRS 9)
Stage 1
€m
Stage 2
€m
0
0.3
0.3
0
– 0.2
0.1
0
0.5
0.5
0.5
– 0.1
0.9
Stage 3
€m
5.21)
– 2.0
3.2
1.8
– 0.2
4.8
5.2
– 1.2
4.0
2.3
– 0.5
5.8
1) Loss allowance according to incurred loss model (IAS 39)
Credit risk concentrations
Deutsche Börse Group’s business model and the resulting business relationships mean that, as a rule,
credit risk is concentrated on the financial services sector. Potential concentrations of credit risk on
individual counterparties are limited by application of counterparty credit limits.
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Further information
Management of credit risk concentration, including collateral concentration and so-called large
exposures, is conducted in compliance with applicable regulatory requirements such as those arising
from, among others, Articles 387–410 of Regulation (EU) 575/2013 (Capital Requirements Regulation,
CRR), Article 47 Paragraph 8 of Regulation (EU) 648/2012 (European Market Infrastructure Regulation,
EMIR) and respectively applicable national requirements (see also
note 15 for an explanation of
regulatory capital requirements). Requirements on concentration risks arising from Regulation (EU)
909/2014 (Central Securities Depository Regulation, CSDR) are currently being implemented as part of
Deutsche Börse Group’s affiliated CSDs’ authorisation under Article 16 CSDR.
The required economic capital (value at risk, VaR, with a 99.98 per cent confidence level) for credit risk
is calculated for each business day and amounted to €517.0 million as at 31 December 2018 (2017:
€467.0 million).
Deutsche Börse Group also applies additional methods in order to detect credit concentration risks.
In 2018, no significant adverse credit concentrations were assessed.
Market risk
Market risk arises from changes in interest rates, foreign-exchange rates and other market prices.
Deutsche Börse Group is generally only affected to a limited extent by market risk.
The required economic capital for market risk is calculated on a monthly basis. As at
31 December 2018, the required economic capital for market risk was €84.0 million (2017:
€87.0 million).
In the 2018 financial year, impairment losses amounting to €0.6 million (2017: €1.1 million) were
recognised in profit or loss for strategic investments that are not included in the VaR for market risk.
Interest rate risk
Changes in market interest rates may affect Deutsche Börse Group’s net profit for the period attributable
to Deutsche Börse AG shareholders. This risk arises whenever interest terms on financial assets and
liabilities are different.
Interest rate sensitive assets include the Group’s money market and investment portfolios, while interest
rate sensitive liabilities mainly consist of short-term debt instruments. Interest rate risk from long-term
liabilities of Deutsche Börse AG is mitigated through the issuance of fixed-coupon bonds.
To refinance existing long-term indebtedness, in March 2018 Deutsche Börse AG successfully placed
a senior fixed-coupon bond in an aggregate principal amount of €600.0 million. For more details on the
outstanding bonds issued by Deutsche Börse Group, see the
management report.
“Net assets” section in the combined
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Cash received as deposits from market participants is mainly invested via short-term reverse repurchase
agreements and in the form of overnight deposits at central banks, limiting the risk of a negative impact
from a change in the interest rate environment. Negative interest rates resulting from reinvestments of
these cash deposits are passed on to the respective Clearstream (post-trading) customers after applying
an additional margin. For Eurex Clearing AG, interest rates on cash collateral are, in principle, calculated
based on a predefined benchmark rate per currency after deducting an additional spread per currency.
Group entities may furthermore invest their own capital and portions of customer cash balances in high-
quality liquid bonds. The bond portfolio consists mostly of variable-rate instruments, which leads to a
comparably low interest rate risk for the Group.
The risk arising from interest-earning assets and interest-bearing liabilities is monitored on a daily basis
and limited by using a system which includes mismatch limits in combination with interest rate risk
limits and stop-loss limits. The interest rate risk limits determine the maximum acceptable loss caused
by a hypothetical adverse yield curve shift. The stop-loss limits define the fair value of a portfolio
triggering an ad hoc review and risk-reducing actions.
Interest rate swaps, as well as swaptions, are used to hedge interest rate risks. As of the reporting date,
there are no hedging relationships with regards to interest rate risk in place.
Foreign-exchange rate risk
Measuring and managing foreign-exchange risk is important for reducing Deutsche Börse Group’s
exposure to exchange rate movements. The three main types of foreign-exchange risk that Deutsche
Börse Group is exposed to are cash flow-, translation- and transaction-related foreign-exchange risk.
Cash flow risk reflects the risk of fluctuations in Deutsche Börse Group’s present value of future
operating cash flows from foreign-exchange movements. Translation risk comprises effects from the
valuation of the Group’s assets and liabilities in foreign currencies. Finally, transaction risk is closely
related to cash flow risk; it may arise through changes in the structure of Deutsche Börse Group’s asset
and liabilities in foreign currencies.
The Group operates internationally and is, to a limited extent, exposed to foreign-exchange risk, primarily
in US$, CHF, £ and CZK. Exchange rate fluctuations may affect the Group’s profit margins and the value
of assets and liabilities denominated in a currency that is not the functional currency of the relevant
Group entity. Respective currency risks arise mainly from operating income and expenses denominated
in a currency other than the functional currency, inter alia from that portion of the Clearstream (post-
trading) segment’s sales revenue and net interest income from banking business that is directly or
indirectly in US$. The Clearstream (post-trading) segment generated 21 per cent of its sales revenue and
net interest income (2017: 17 per cent) directly or indirectly in US$.
327
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Currency mismatches are avoided to the maximum extent possible. All types of foreign-exchange risks
are measured on a regular basis and monitored on a Group as well as single entity level. Limits are
defined for cash flow and translation risk. Deutsche Börse Group’s treasury policy defines risk limits
which take into account historical foreign-exchange rate fluctuations. Any exposure exceeding those
limits must be hedged. Foreign-exchange exposures below the defined limits may also be hedged.
Management of foreign-exchange risks is principally carried out at the Group level. Hedging at a single
entity level may be conducted if foreign-exchange risk threatens the viability of the single entity.
To eliminate foreign-exchange risks, Deutsche Börse Group uses financial instruments to hedge existing
or highly probable forecast transactions. The Group may use foreign-exchange forwards, foreign-
exchange options as well as cross-currency swaps to hedge the exposure to foreign-exchange risk. Under
the Group’s policy, the material terms of forwards and options must coincide with those of the hedged
items.
In addition, for Clearstream (post-trading), the policy stipulates that intraperiod open net foreign-exchange
positions are closed out when they exceed €15.0 million. This policy was complied with, as in the
previous year; as at 31 December 2018, there were no significant net foreign-exchange positions.
Other market risks
Moreover, market risk arises from investments in bonds, funds, futures and contractual trust arrange-
ments (CTAs), as well as from the Clearstream Pension Fund in Luxembourg. Investments in CTAs are
protected by a pre-defined floor, which reduces the risk of extreme losses for Deutsche Börse Group. In
addition, there are equity price risks arising from strategic equity investments.
Liquidity risk
For the Group, liquidity risk may arise from potential difficulties in renewing maturing financing, such as
commercial paper as well as bilateral and syndicated credit facilities. In addition, financing required for
unexpected events may result in a liquidity risk. Most of the Group’s cash investments are short-term to
ensure that liquidity is available, should such a financing need arise. At Eurex Clearing AG, the customer
cash balances and investments – only some of which have maturities of up to one year – predominantly
have matched maturities. The Clearstream subgroup may invest customer balances for up to a maximum
of one year in secured money market products or high-quality securities with a remaining maturity of
less than ten years, subject to strict monitoring of mismatch and interest rate limits. An exception to this
is UK gilts, which can have maximum remaining duration of 30 years. Term investments can be
transacted via reverse repurchase agreements against highly liquid collateral that can be deposited with
the central bank and used as a liquidity buffer if required.
328
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
The companies of Deutsche Börse Group have the following credit lines, which were not being used as
at the reporting date:
Contractually agreed credit lines
Company
Purpose of credit line
Currency
Deutsche Börse AG
Eurex Clearing AG
working capital1)
settlement
settlement
Clearstream Banking S.A.
working capital1)
settlement
settlement
Amount as at
31 Dec 2018
m
Amount as at
31 Dec 2017
m
605.0
605.0
1,170.0
1,170.0
200.0
750.0
500.02)
200.0
750.0
0.0
€
€
CHF
€
€
US$
2,125.02)
750.02)
1) €400.0 million of Deutsche Börse AG’s working capital credit lines is a sub-credit line of Clearstream Banking S.A.’s €750.0 million working capital credit line.
2) Thereof three committed repo lines for a total amount of US$1,250.0 million and three committed foreign-exchange swap lines for a total amount of €500.0
million and US$875.0 million in 2018 (2017: three committed repo lines for a total amount of US$750.0 million)
For refinancing purposes, Eurex Clearing AG and the Clearstream subgroup can pledge eligible securities
with their respective central banks.
Clearstream Banking S.A. has a bank guarantee (letter of credit) in favour of Euroclear Bank S.A./N.V.
issued by an international consortium to secure daily deliveries of securities between Euroclear
Bank S.A./N.V. and Clearstream Banking S.A. This guarantee amounted to US$3.0 billion as at
31 December 2018 (2017: US$3.0 billion). Euroclear Bank S.A./N.V. has also issued a guarantee
in favour of Clearstream Banking S.A. amounting to US$3.0 billion (2017: US$3.0 billion). Further-
more, Eurex Clearing AG holds a credit facility of US$1.6 billion (2017: US$1.6 billion) granted
by Euroclear Bank S.A./N.V. in order to maximise settlement efficiency.
A commercial paper programme offers Deutsche Börse AG an opportunity for flexible, short-term
financing, involving a total facility of €2.5 billion in various currencies. As at year-end, there was
no commercial paper outstanding (2017: nil).
Clearstream Banking S.A. also has a commercial paper programme with a programme limit of
€1.0 billion, which is used to provide additional short-term liquidity. As at 31 December 2018,
commercial paper with a nominal value of €402.1 million had been issued (2017: €274.7 million).
In 2018, S&P Global Ratings (S&P) confirmed Deutsche Börse AG’s AA credit rating with a stable
outlook. At the end of 2018, Deutsche Börse AG was one of only two DAX-listed companies that had
been given an AA rating by S&P. Deutsche Börse AG’s commercial paper programme was awarded
the best possible short-term rating of A–1+.
The AA rating of Clearstream Banking S.A. was confirmed with a stable outlook by the rating agencies
“Financial
Fitch and S&P in 2018. For further details on the rating of Deutsche Börse Group, see the
position” section in the combined management report.
329
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Maturity analysis of financial instruments (part 1)
Cash deposits by market participants
29,559.2
0
0
18,566.3
203.9
270.9
Contractual maturity
More than
3 months
but not
more than
1 year
€m
More than
1 year but
not more
than
5 years
€m
Not more
than
3 months
€m
Overnight
€m
Reconci-
liation to
carrying
amount
€m
Over
5 years
€m
Carrying
amount
€m
0
0
0
0
0
195.0
0
0
0
1,335.3
1,150.0
– 202.1
2,283.2
0.2
0
0
0
0
0
0
0
0
0
0.2
195.0
– 16.4
19,024.7
0
29,559.2
48,125.5
398.9
270.9
1,335.5
1,150.0
– 218.5
51,062.3
26,256.3
54,796.6
13,015.4
7,347.1
2,638.3
0 104,053.7
– 26,256.3 – 55,008.6 – 13,015.4
– 7,347.1
– 2,638.3
0 – 104,265.7
31 Dec 2018
Non-derivative financial liabilities
Non-current financial liabilities measured
at amortised cost
Non-current financial liabilities at fair value
through profit or loss
Trade payables
Current financial liabilities measured
at amortised cost
Total non-derivative financial
liabilities (gross)
Derivatives and financial instruments
held by central counterparties
Financial liabilities and derivatives
held by central counterparties
less financial assets and derivatives
held by central counterparties
Cash inflow – derivatives and hedges
Cash flow hedges
Fair value hedges
0
0
0
0
0
0
Derivatives held for trading
– 1,592.6
– 137.1
– 1,642.4
Cash outflow – derivatives and hedges
Cash flow hedges
Fair value hedges
0
0
0
0
0
0
0
0
0
Derivatives held for trading
1,592.4
136.9
1,662.7
Total derivatives and hedges
– 0.2
– 212.2
20.3
Financial guarantee contracts
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
330
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Maturity analysis of financial instruments (part 2)
Contractual maturity
More than
3 months
but not
more than
1 year
€m
More than
1 year but
not more
than
5 years
€m
Not more
than
3 months
€m
Overnight
€m
Reconci-
liation to
carrying
amount
€m
Over
5 years
€m
Carrying
amount
€m
31 Dec 2017
Non-derivative financial liabilities
Non-current financial liabilities measured at
amortised cost
Non-current financial liabilities measured at
fair value through profit or loss
Trade payables
Current financial liabilities measured at
amortised cost
0
0
0
0
0
150.1
0
0
0
1,339.0
524.4
– 175.0
1,688.4
0.8
0
0
0
0
0
0
0
0
0
0.8
150.1
– 16.1
13,976.2
0
29,215.3
Cash deposits by market participants
29,215.3
0
0
13,057.1
879.6
55.6
Total non-derivative financial
liabilities (gross)
Derivatives and financial instruments
held by central counterparties
Financial liabilities and derivatives
held by central counterparties
less financial assets and derivatives
held by central counterparties
42,272.4
1,029.7
55.6
1,339.8
524.4
– 191.1 45,030.8
22,159.3
43,973.6
12,665.7
3,771.5
1,065.7
0
83,635.8
– 22,159.2 – 44,685.7 – 12,665.8
– 3,771.5
– 1,065.7
0 – 84,347.9
Cash inflow – derivatives and hedges
Cash flow hedges
Fair value hedges
0
0
Derivatives held for trading
833.4
1,652.2
Cash outflow – derivatives and hedges
Cash flow hedges
Fair value hedges
0
0
Derivatives held for trading
– 832.2
– 1,667.4
Total derivatives and hedges
1.3
– 727.1
19.0
56.2
– 18.8
– 56.4
0
0
0
2.3
0
– 2.2
– 0.2
Financial guarantee contracts
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
331
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
26. Financial liabilities and other risks
For the coming financial years, the Group’s expenses in connection with long-term contracts relating to
note 27) are
maintenance contracts and other contracts (excluding rental and lease agreements, see
presented in the following:
Breakdown of future financial obligations
Up to 1 year
1 to 5 years
More than 5 years
Total
Other litigation and liability risks
31 Dec 2018
€m
31 Dec 2017
€m
37.8
21.6
0
59.4
41.7
27.2
6.9
75.8
Contingent liabilities may result from present obligations and from possible obligations arising from
events in the past. Deutsche Börse Group recognises provisions for the possible incurrence of losses only
if there is a present obligation arising from a past event that is likely to result in an outflow of resources
and if the Group can reliably estimate the amount of the obligation (see also
identify the litigation for which the possibility of incurring a loss is more than unlikely, as well as how
the possible loss is estimated, Deutsche Börse Group considers a large number of factors, including the
nature of the claim and the facts on which it is based, the jurisdiction and course of the individual
proceedings, the experience of Deutsche Börse Group, prior settlement talks (to the extent that they
already taken place) as well as expert opinions and evaluations of legal advisors. However, it is also
possible that no reliable estimate for a specific litigation could be determined before the approval of the
consolidated financial statements, and that – as a result – no provisions are recognised.
note 3). In order to
2012 corporate report, Deutsche Börse Group disclosed information about the class action suit
Peterson vs Clearstream Banking S.A., Citibank NA et al. (“Peterson I”) and
Heiser vs Clearstream Banking S.A.
In its
Peterson vs Clearstream Banking S.A. (the first Peterson proceeding), initiated by various plaintiffs
seeking turnover of certain customer positions held in Clearstream Banking S.A.’s securities omnibus
account with its US depository bank, Citibank NA, and asserting direct claims against Clearstream
Banking S.A. for damages of US$250.0 million. That matter was settled between Clearstream Banking
S.A. and the plaintiffs and the direct claims against Clearstream Banking S.A. were retracted.
In July 2013, the US court gave the order to turn over the customer positions to the plaintiffs, ruling that
these were being held by Bank Markazi, the Iranian central bank. Bank Markazi appealed, and the
decision was affirmed on 9 July 2014 by the Second Circuit Court of Appeals, and then by the US
Supreme Court on 20 April 2016. Once the process of distribution of the funds to the plaintiffs is
complete, a related case, Heiser vs Clearstream Banking S.A., which is also seeking the turnover of the
same assets, should be concluded.
332
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Peterson vs Clearstream Banking S.A. (“Peterson II”)
On 30 December 2013, a number of US plaintiffs from the first Peterson case, as well as other
plaintiffs, filed a complaint targeting restitution of certain assets that Clearstream Banking S.A. holds as
a custodian in Luxembourg. In 2014, the defendants in this action, including Clearstream Banking S.A.,
moved to dismiss the case. On 19 February 2015, the US court issued a decision granting the defend-
ants’ motions and dismissing the lawsuit. The plaintiffs lodged an appeal against this ruling at the
competent appeals court (Second Circuit Court of Appeals), which on 21 November 2017 confirmed
extensive parts of the decision of the trial court. Regarding another aspect, the appellate court referred
the case back to the court of first instance, which shall assess whether the assets held in Luxembourg
are subject to enforcement in the U.S. In opposition to this point, Clearstream Banking S.A. filed a
petition to the US Supreme Court on 8 May 2018.
Havlish vs Clearstream Banking S.A. (“Havlish”)
On 14 October 2016, a number of US plaintiffs filed a complaint naming Clearstream Banking S.A.
and other entities as defendants. The complaint in this proceeding, Havlish vs Clearstream Banking S.A.,
is based on similar assets and allegations as in the Peterson proceedings. The complaint seeks the
turnover of certain assets that Clearstream Banking S.A. holds as a custodian in Luxembourg.
The complaint also asserts direct claims against Clearstream Banking S.A. and other defendants and
purports to seek damages of up to approximately US$6.6 billion plus punitive damages and interest.
The proceedings have been suspended due to the ongoing appeal to the US Supreme Court in the
Peterson II proceedings.
Criminal investigations against Clearstream Banking S.A.
On 2 April 2014, Clearstream Banking S.A. was informed that the United States Attorney for the
Southern District of New York has opened a grand jury investigation against Clearstream Banking S.A.
due to Clearstream Banking S.A.’s conduct with respect to Iran and other countries subject to US
sanction laws. Clearstream Banking S.A. is cooperating with the US attorney.
Bank Markazi vs Clearstream Banking S.A.
In the context of the ongoing disputes regarding assets of Bank Markazi, Clearstream Banking S.A. was
served with a complaint filed by Bank Markazi on 17 January 2018 naming Banca UBAE S.P.A. and
Clearstream Banking S.A. as defendants. The complaint filed before the Luxembourg courts primarily
seeks the restitution of assets of Bank Markazi which the complaint alleges are held in accounts of
Banca UBAE S.P.A. and Bank Markazi with Clearstream Banking S.A. totalling approximately US$4.9
billion plus interest. Alternatively, Bank Markazi seeks damages in the same amount. The assets sought
include assets in the amount of approximately US$1.9 billion that were turned over to US plaintiffs
pursuant to a 2013 binding and enforceable US court order in a proceeding to which Bank Markazi was
a party. The claim also addresses customer assets of approximately US$2 billion, which include assets
that are held at Clearstream Banking S.A. and which are currently subject to US and Luxembourg
litigation brought by US plaintiffs. The claim also addresses assets that were previously transferred out
of Clearstream Banking S.A. to Banca UBAE S.P.A.
333
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Banca UBAE S.p.A. vs Clearstream Banking S.A.
On 15 June 2018, Banca UBAE S.p.A. filed a complaint against Clearstream Banking S.A. in front of
the Luxembourg courts. The complaint is a recourse action linked to the complaint that Bank Markazi
filed against Clearstream Banking S.A. and Banca UBAE S.p.A. and asks that Banca UBAE S.p.A. be
indemnified and held harmless by Clearstream Banking S.A. in case Banca UBAE S.p.A. were to lose in
the Bank Markazi complaint and ordered by the court to pay damages to Bank Markazi.
Levin vs Clearstream Banking S.A.
On 26 December 2018, two US plaintiffs filed a complaint against Clearstream Banking S.A. and other
legal persons; the plaintiffs hold claims amounting to approximately US$28.8 million against Iran,
Iranian authorities and individuals. The complaint filed in this case (Levin vs Clearstream Banking S.A.)
is based on similar assets and allegations as those in the second Peterson and Havlish proceedings.
The case seeks the turnover of certain assets held by Clearstream Banking S.A., as the custodian, in
Luxembourg. In addition, the case also includes direct claims made against Clearstream Banking S.A.
and further defendants for damages of up to around US$28.8 million (plus punitive damages and
interest).
Fairfield vs Clearstream Banking S.A.
Beginning in 16 July 2010, the liquidators of two investment funds domiciled in the British Virgin Islands
and named Fairfield Sentry Ltd. and Fairfield Sigma Ltd. filed complaints in the US Bankruptcy Court
for the Southern District of New York, asserting claims against more than 300 financial institutions for
restitution of redemption payments made to investors of the funds for the redemption of shares in
such funds prior to December 2008. On 14 January 2011, the liquidators of such funds asserted
claims for restitution against Clearstream Banking S.A. in an amount of US$13.5 million for redemption
payments made by the funds to investors using the settlement system of Clearstream Banking S.A. The
proceedings, which were stayed for multiple years, are continuing.
MBB Clean Energy AG
Legal disputes have arisen regarding a bond issued by MBB Clean Energy AG (MBB), which is held in
custody by Clearstream Banking AG. MBB issued a first tranche of the bond in April 2013 and a second
tranche of the bond in December 2013. The global certificates for the two tranches of the bond were
delivered into Clearstream Banking AG by the paying agent of the issuer. The legal disputes relate to the
non-payment of the bond and the purported lack of validity of the bond. Clearstream Banking AG’s role
in the context of the purported lack of validity of the MBB bond is primarily to safekeep the global
certificate as national central securities depository. Insolvency proceedings have meanwhile been opened
in respect of the issuer, MBB.
Proceedings by the Public Prosecutor’s Office in Cologne
In September 2017, Clearstream Banking AG and Clearstream Banking S.A. were made aware that the
Public Prosecutor’s Office in Cologne had initiated proceedings for tax evasion against an employee of
Clearstream Banking AG for his alleged involvement in the settlement of transactions of market partici-
pants over dividend date (cum/ex transactions). On 22 January 2018, the Public Prosecutor’s Office in
Cologne addressed to Clearstream Banking AG a notification of hearing Clearstream Banking AG and
Clearstream Banking S.A. as potential secondary participants (Nebenbeteiligte). Due to the early stage of
the investigations, it is not possible to predict timing, scope or consequences of a potential decision. The
companies are cooperating with the competent authorities.
334
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Lawsuit against Deutsche Börse AG
In November 2018, a customer of a trading participant of the Frankfurt Stock Exchange filed a case
against Deutsche Börse AG with the District Court of Frankfurt/Main. The plaintiff is claiming damages of
approximately €2.6 million from Deutsche Börse AG. The alleged damages are said to have arisen (i) on
7 July 2016, from Deutsche Börse AG’s publication of an inaccurate ex-dividend date relating to a
financial instrument via the Xetra system and (ii) due to the fact that a client of the plaintiff relied on this
inaccurate information to conclude transactions.
Administrative offence proceedings of BaFin
On 19 December 2018, the German Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht, BaFin) sent Deutsche Börse AG a formal hearing notification in a penalty
proceeding, which refers to the allegation of a supposed lack of self-liberation or, alternatively, an
allegedly omitted ad hoc announcement. Specifically, in the search for a successor for Carsten Kengeter,
Deutsche Börse AG had omitted to qualify as a price-relevant intermediate step the fact that a few
days before the appointment of Theodor Weimer in November 2017, two suitable and interested CEO
candidates had been identified, and a decision about the appointment was planned. Even after
consulting with external experts, Deutsche Börse AG believes this allegation is unfounded.
Proceedings by the Public Prosecutor’s Office in Frankfurt/Main
On 21 December 2018, Deutsche Börse AG informed the public that, on that same day, the District
Court of Frankfurt/Main had issued a fine order against Deutsche Börse AG as an ancillary party after
the termination of the preliminary investigation against its former CEO, Carsten Kengeter. The decision
provides for fines of €5 million and €5.5 million against Deutsche Börse AG for an alleged breach
of the insider trading ban in December 2015 and for an alleged omission of an ad hoc announcement
in January 2016. Following this decision of the District Court of Frankfurt/Main, the proceedings
were concluded.
The Executive Board of Deutsche Börse AG had previously decided, after detailed consultation with the
Supervisory Board, not to take action against a corresponding fine decision by the District Court. The
company remains firmly convinced that the allegations were unfounded. This is supported by the results
of extensive audits by several independent external experts. However, after a detailed examination and
weighing all relevant aspects, Deutsche Börse AG had concluded that a termination of the proceedings
based on the solution found was in the best interest of the company.
In addition to the matters described above and in prior disclosures, Deutsche Börse Group is from time
to time involved in various legal proceedings that arise in the ordinary course of its business. The Group
recognises provisions for litigation and regulatory matters when it has a present obligation arising from
a past event, an outflow of resources with economic benefit to settle the obligation is probable, and it is
able to reliably estimate the amount. In such cases, there may be an exposure to loss in excess of the
amounts recognised as provisions. When the conditions are not met, the Group does not recognise a
provision. As a litigation or regulatory matter develops, Deutsche Börse Group evaluates on an ongoing
basis whether the requirements to recognise a provision are met. The Group may not be able to predict
what the eventual loss or range of loss related to such matters will be. The Group does not believe,
based on currently available information, that the results of any of these various proceedings will have
a material adverse effect on its financial data as a whole.
335
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Tax risks
Due to its business activities in various countries, Deutsche Börse Group is exposed to tax risks. A
process has been developed to recognise and evaluate these risks, which are initially recognised based
on their probability of occurrence. These risks are then measured on the basis of their expected value.
A tax provision is recognised in the event that it is more probable than not that the risks will occur.
Deutsche Börse Group continuously reviews whether the conditions for recognising corresponding tax
provisions are met.
27. Leases
Finance leases
There were no minimum lease payments from finance leases for Deutsche Börse Group as at
31 December 2018 or as at 31 December 2017.
Operating leases (as lessee)
Deutsche Börse Group has entered into leases to be classified as operating leases due to their eco-
nomic substance, meaning that the leased asset is allocated to the lessor. These leases relate mainly
to building rentals.
Minimum lease payments from operating leases1)
Up to 1 year
1 to 5 years
More than 5 years
Total
31 Dec 2018
€m
31 Dec 2017
€m
77.7
304.1
51.4
433.2
63.4
177.2
84.0
324.6
1) The expected payments in US dollars were translated into euros applying the closing rate of 31 December.
In the reporting period, minimum lease payments amounting to €71.9 million (2017: €68.8 million)
were recognised as expenses. For subleases or contingent rentals, no expenses were incurred in the
reporting period (2017: nil).
Operating leases for buildings, some of which are subleased, have a maximum remaining term of 30
years. The lease contracts usually terminate automatically when the lease expires. The Group has options
to extend some leases.
Expected rental income from subleases1)
Up to 1 year
1 to 5 years
Total
1) The expected payments in US dollars were translated into euros applying the closing rate of 31 December.
31 Dec 2018
€m
31 Dec 2017
€m
1.0
1.7
2.7
0.7
2.3
3.0
336
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
28. Share-based payment
Stock Bonus Plan (SBP)
In the reporting period, the company established an additional tranche of the SBP for senior executives
who are not risk bearers. In order to participate in the SBP, a beneficiary must have earned a bonus.
The number of stock options is determined by the amount of the individual and performance-based SBP
bonus for the financial year, divided by the average share price (Xetra closing price) of Deutsche Börse
AG’s shares in the fourth quarter of the financial year in question. Neither the converted SBP bonus nor
the stock options are paid at the time the bonus is determined. Rather, the entitlement is generally
received three years after the grant date (the “waiting period”). Within this period, beneficiaries cannot
assert shareholder rights (in particular, the rights to receive dividends and attend the Annual General
Meeting). Once they have met the condition of service, the beneficiaries’ claims resulting from the SBP
are calculated on the first trading day following the last day of the waiting period. The current market
price at that date (closing auction price of Deutsche Börse shares in electronic trading on the Frankfurt
Stock Exchange) is multiplied by the number of stock options. Stock options are settled in cash.
Evaluation of the SBP
The company uses an adjusted Black-Scholes model (Merton model) to calculate the fair value of the
stock options.
Valuation parameters for SBP shares
Term to
Risk-free interest rate
Volatility of Deutsche Börse AG shares
Dividend yield
Exercise price
Tranche 2018
Tranche 2017
Tranche 2016
Tranche 2015
31 Mar 2022
28 Feb 2021
29 Feb 2020
31 Mar 2019
%
%
%
€
– 0.44
21.72
2.33
0
– 0.56
18.61
1.56
0
– 0.65
19.27
1.17
0
– 0.75
22.76
0
0
The valuation model does not take into account exercise hurdles. The volatilities applied correspond
to the market volatilities of comparable options with comparable maturities.
Valuation of SBP shares
Tranche
Balance at
31 Dec 2018
Number
Deutsche
Börse AG share
price at
31 Dec 2018
€
Intrinsic value/
option at
31 Dec 2018
€
Fair value/
option at
31 Dec 2018
€
Settlement
obligation
€m
Current
provision at
31 Dec 2018
€m
Non-current
provision at
31 Dec 2018
€m
20151)
2016
2017
20182)
Total
13,674
16,909
13,868
12,941
57,392
104.95
104.95
104.95
104.95
104.95
104.95
104.95
104.95
98.77
to 110.65
74.54
47.70
22.91
1.3
1.3
0.6
0.3
3.5
1.3
0
0
0
1.3
0
1.3
0.6
0.3
2.2
1) The number of stock options, settlement obligation, and short-term provision of the 2015 tranche includes the unsettled shares of the 2014 tranche.
2) Given that the 2018 SBP tranche stock options for senior executives will not be granted until the 2019 financial year, the number of shares applicable as at the
reporting date may be adjusted during the 2019 financial year.
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Management report
Financial statements
Notes | Other disclosures
Further information
Average price of the exercised and forfeited share options
Tranche
2014
2015
2016
2017
Average price of the
exercised share options
€
Average price of the
forfeited share options
€
109.40
112.32
111.23
115.43
–
101.14
72.13
46.74
The stock options from the 2014 SBP tranche were exercised in the reporting period following the
expiration of the waiting period. Shares of the SBP tranches 2015, 2016 and 2017 were paid to former
employees as part of severance payments in the year under review.
The carrying amount of the provision for the SBP results from the measurement of the number of SBP
stock options at the fair value of the closing auction price of Deutsche Börse shares in electronic
trading at the Frankfurt Stock Exchange at the reporting date and its proportionate recognition over the
waiting period.
Provisions for the SBP amounting to €3.5 million were recognised at the reporting date of 31 December
2018 (31 December 2017: €3.9 million). The total expense for the stock options in the reporting period
was €2.1 million (2017: €2.9 million).
Change in number of SBP shares allocated
Balance at
31 Dec
2017
Disposals
Tranche
2015
Disposals
Tranche
2016
Disposals
Tranche
2017
Additions
Tranche
2018
Fully
settled
cash
options
Options
forfeited
Balance at
31 Dec
2018
To other senior executives
69,298
– 1,257
– 2,055
– 1,864
12,941
– 17,920
– 1,751
57,392
Long-term Sustainable Instrument (LSI) and Restricted Stock Units (RSU)
In 2014, Deutsche Börse Group introduced the Long-Term Sustainable Instrument (LSI) plan in order to
provide share-based remuneration in line with regulatory requirements. This programme was extended
in 2016 with the Restricted Stock Units (RSU) plan. The following disclosures relate to both plans.
The LSI remuneration model requires at least half of a part of the variable remuneration to be settled
in cash and half in phantom shares of Deutsche Börse AG (LSI shares). A portion of the variable
remuneration is paid in the subsequent year and another portion over a further period of three or four
years. Moreover, a portion of the variable remuneration shall be converted into RSU, subject to a three-
year retention period after grant and a one-year waiting period (RSU shares).
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Notes | Other disclosures
Further information
The number of LSI and RSU shares for the 2014 to 2017 tranches is calculated by dividing the
proportionate LSI or RSU bonus, respectively, for the year in question by the average closing price of
Deutsche Börse AG shares in the last month of a financial year. The number of LSI and RSU shares for
the 2018 tranche is based on the closing auction price of Deutsche Börse shares as at the disbursement
date of the upfront cash component of the 2018 tranche in 2019 or on the closing price as at the
following trading day on the Frankfurt Stock Exchange. This results in individual LSI tranches for the LSI
bonus, which have maturities of between one and five years. The RSU bonus is used as a basis for
another four-year tranche. Payment of each tranche is made after a waiting period of one year. Neither
remuneration system stipulates any condition of service. Following the expiry of the waiting period, both
the LSI and the RSU shares of the 2014 to 2017 tranches are measured on the basis of the average
closing price of Deutsche Börse AG shares in the last month preceding the end of the waiting period.
The LSI and RSU shares of the 2018 tranche are measured at the closing auction price as at the first
trading day in February of the year in which the holding period ends. Settlement is generally made
in cash, although the employer has the right to settle by delivering Deutsche Börse AG shares for the
2014 tranche.
Evaluation of the LSI and the RSU
The company uses an adjusted Black-Scholes model (Merton model) to calculate the fair value of the
LSI and RSU stock options.
Valuation parameters for LSI and RSU shares
Tranche 2018
Tranche 2017
Tranche 2016
Tranche 2015
Tranche 2014
Term to
31 Dec 2019 to
31 Dec 2023
31 Dec 2018 to
31 Dec 2022
31 Dec 2018 to
31 Dec 2021
31 Dec 2018 to
31 Dec 2020
31 Dec 2018 to
31 Dec 2019
Risk-free interest rate
%
– 0.7 to – 0.31 – 0.75 to – 0.44 – 0.75 to – 0.56 – 0.75 to – 0.65
– 0.75 to – 0.7
Volatility of Deutsche Börse AG
shares
Dividend yield
Exercise price
%
%
€
18.5 to 22.47
0 to 22.47
0 to 20.52
0 to 19.69
0 to 19.69
2.33
0 to 2.33
0 to 2.33
0 to 2.33
0 to 2.33
0
0
0
0
0
The valuation model does not take into account exercise hurdles. The volatilities applied correspond
to the market volatilities of comparable options with comparable maturities.
Valuation of LSI and RSU shares
Tranche
Balance as at
31 Dec 2018
Number
Deutsche
Börse AG share
price as at
31 Dec 2018
€
Intrinsic value/
option as at
31 Dec 2018
€
Fair value/
option as at
31 Dec 2018
€
Settlement
obligation
€m
Current
provision as at
31 Dec 2018
€m
Non-current
provision as at
31 Dec 2018
€m
2014
2015
2016
2017
2018
Total
7,657
15,229
70,639
79,813
91,872
265,210
104.95
104.95
104.95
104.95
104.95
104.95
102.55 – 104.95
104.95
100.21 – 104.95
104.95
97.92 – 104.95
104.95
95.69 – 104.95
104.95
93.50 – 102.55
0.8
1.6
7.2
7.9
9.0
26.5
0.6
0.8
1.0
1.9
0
4.3
0.2
0.8
6.2
6.0
9.0
22.2
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
The carrying amount of the provisions for the LSI and the RSU results from the measurement of the
number of LSI and RSU stock options at the fair value of the closing auction price of Deutsche Börse
shares in electronic trading at the Frankfurt Stock Exchange as at the reporting date.
Provisions amounting to €26.5 million were recognised as at 31 December 2018 (31 December 2017:
€20.7 million). The total expense for LSI stock options in the reporting period amounted to
€10.1 million (31 December 2017: €9.7 million).
Change in number of LSI and RSU shares allocated
Balance
as at
31 Dec 2017
Disposals
Tranche
2014
Disposals
Tranche
2015
Disposals
Tranche
2016
Disposals
Tranche
2017
Additions
Tranche
2018
Fully settled
cash
options
Options
forfeited
Balance
as at
31 Dec 2018
To other
senior
executives
224,652
– 231
– 939
– 2,185
– 3,962
91,872
– 43,997
Total
224,652
– 231
– 939
– 2,185
– 3,962
91,872
– 43,997
0
0
265,210
265,210
Co-Performance Investment Plan (CPIP) and Performance Share Plan (PSP)
In financial year 2015, a new remuneration programme (Co-Performance Investment Plan, CPIP) was
introduced, and the former CEO of Deutsche Börse AG, Carsten Kengeter, was offered a one-time
participation. The appropriate number of phantom shares was calculated based on the number of shares
granted and the increase of Deutsche Börse AG’s net profit for the period attributable to shareholders
of Deutsche Börse AG, as well as on the relative performance of the total shareholder return (TSR) on
Deutsche Börse AG’s shares compared with the total shareholder return of the STOXX Europe 600
Financials Index entities. The performance period for the measurement of the performance criteria
commenced on 1 January 2015 and ends on 31 December 2019. The shares are subject to a
performance period of five years and a vesting period until 31 December 2019. The subsequent
payment of the stock bonus will be settled in cash by 31 March 2021.
On 1 January 2016, the Group launched a share-based remuneration programme, the Performance
Share Plan (PSP), for the Executive Board of Deutsche Börse AG as well as selected executives and
employees of Deutsche Börse AG and participating subsidiaries. The 100 per cent stock bonus target
was calculated in euros for each Executive Board member. The 100 per cent stock bonus target for
selected executives and employees of Deutsche Börse AG and participating subsidiaries is defined by
the responsible decision-making bodies.
Based on the PSP 100 per cent stock bonus target, the corresponding number of phantom shares for
each beneficiary is calculated by dividing the stock bonus target by the average share price (Xetra
closing price) of Deutsche Börse AG’s shares in the last calendar month preceding the performance
period. Any right to payment of a PSP stock bonus vests only at the end of a five-year performance
period.
The final number of performance shares is calculated by multiplying the original number of performance
shares with the level of overall target achievement. The PSP level of overall target achievement is based
on two performance factors during the performance period: firstly, on the relative performance of the
total shareholder return (TSR) on Deutsche Börse AG’s shares compared with the total shareholder return
of the STOXX Europe 600 Financials Index; and secondly, on the increase of Deutsche Börse AG’s net
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Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
profit for the period attributable to shareholders of Deutsche Börse AG. The two performance factors
contribute 50 per cent each to calculate overall target achievement.
The payout amount is calculated by multiplying the final number of performance shares with the average
share price (Xetra closing price) of Deutsche Börse AG’s shares in the last calendar month preceding
the performance period, plus the total of dividend payments made during the performance period based
on the final number of performance shares. The plans are settled in cash.
Evaluation of the CPIP and the PSP
The company uses an adjusted Black-Scholes model (Merton model) to calculate the fair value of the
CPIP and PSP stock options.
Valuation parameters for CPIP and PSP shares
Tranche 2019
Tranche 2018
Tranche 2017
Tranche 2016
Tranche 2015
Term to
Risk-free interest rate
Volatility of Deutsche Börse AG shares
Dividend yield
Exercise price
Relative total shareholder return
Net profit for the period attributable to
Deutsche Börse AG shareholders
%
%
%
€
%
%
31 Dec 2023
31 Dec 2022
31 Dec 2021
31 Dec 2020
31 Dec 2019
– 0.31
0
0
0
– 0.44
22.47
0
0
200.00
200.00
200.00
210.00
– 0.56
20.52
0
0
200.00
192.00;
203.00
– 0.65
18.50
0
0
200.00
202.00;
213.00
– 0.70
18.70
0
0
200.00
185.00
The valuation model does not take into account exercise hurdles. The volatilities applied correspond to
the market volatilities of comparable options with comparable maturities.
Valuation of CPIP and PSP shares
Deutsche
Börse AG share
price as at
31 Dec 2018
€
Balance as at
31 Dec 2018
Number
Intrinsic value/
option as at
31 Dec 2018
€
Fair value/
option as at
31 Dec 2018
€
Settlement
obligation
€m
Current
provision as at
31 Dec 2018
€m
Non-current
provision as at
31 Dec 2018
€m
132,882
131,285
138,066
122,322
12,506
537,061
104.95
104.95
104.95
104.95
104.95
104.95
104.95
104.95
104.95
104.95
72.20
67.31
43.94
21.49
107.42
9.6
12.5
10.9
5.8
1.3
40.1
0
0
0
0
0
0
9.6
12.5
10.9
5.8
1.3
40.1
Tranche
2015
2016
2017
2018
20191)
Total
1) The stock options of the 2019 tranche were granted as part of severance agreements.
Provisions for the CPIP and the PSP amounting to €40.1 million were recognised at the reporting date
of 31 December 2018 (31 December 2017: €17.5 million). Of the provisions, €15.9 million were
attributable to members of the Executive Board (2017: €14.8 million). The total expense for CPIP and
PSP stock options in the reporting period was €23.3 million (2017: €12.3 million). Of that amount, an
expense of €13.1 million was attributable to members of the Executive Board (2017: €10.2 million).
341
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Notes | Other disclosures
Further information
Change in number of CPIP and PSP shares allocated
Balance at
31 Dec
2017
Additions
Tranche
2015
Additions
Tranche
2016
Additions/
(disposals)
Tranche
2017
Additions
Tranche
2018
Additions
Tranche
2019
Fully
settled
cash
options
Options
forfeited
Balance at
31 Dec
2018
To the
Executive
Board
To other
senior
executives
269,370
7,925
36,918
6,996
96,682
12,5061)
93,307
0
4,360
– 16,643
25,640
0
Total
362,677
7,925
41,278
– 9,647
122,322
12,506
1) The stock options of the 2019 tranche were granted as part of severance agreements.
0
0
0
0
430,397
0
0
106,664
537,061
For further information on the number of stock options granted to Executive Board members and on the
remuneration system for Executive Board members, please refer to the remuneration report.
Group Share Plan (GSP)
Employees of Deutsche Börse Group who are not members of the Executive Board or senior executives
have the opportunity to subscribe for shares of Deutsche Börse AG at a discount of 30 or 40 per cent to
the issue price under the Group Share Plan (GSP). This discount is based on the employee’s length of
service. Under the 2018 GSP tranche, eligible employees were able to buy up to 100 shares in the
company. The purchased shares must be held for at least two years.
In the reporting period, an expense totalling €4.0 million (2017: €3.6 million) was recognised in staff
expense for the GSP.
29. Executive bodies
The members of the company’s executive bodies are listed in the
Supervisory Board” chapters of this annual report.
“The Executive Board” and
“The
30. Corporate governance
On 6 December 2018, the Executive and Supervisory Boards issued the latest version of the declaration of
conformity in accordance with section 161 of the Aktiengesetz (AktG, the German Stock Corporation Act)
and made it permanently available to shareholders on the company’s website (see also the
corporate governance declaration statement and corporate governance report).
combined
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Executive and Supervisory Boards
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Financial statements
Notes | Other disclosures
Further information
31. Related party disclosures
Related parties as defined by IAS 24 are members of the executive bodies of Deutsche Börse AG as well
as the companies classified as associates of Deutsche Börse AG, investors and investees, and companies
that are controlled or significantly influenced by members of the executive bodies.
The remuneration of the individual members of the Executive and Supervisory Boards is presented in the
remuneration report.
Executive Board
In 2018, the fixed and variable remuneration of the members of the Executive Board, including non-
cash benefits, amounted to a total of €21.0 million (2017: €15.3 million).
During the year under review, expenses of €11.8 million (2017: €10.2 million) were recognised in
connection with share-based payments to Executive Board members.
The actuarial present value of the pension obligations to Executive Board members was €28.8 million
as at 31 December 2018 (2017: €21.2 million). Expenses of €3.1 million (2017: €1.8 million) were
recognised as additions to pension provisions.
Former members of the Executive Board or their surviving dependants
The remuneration paid to former members of the Executive Board or their surviving dependants amounted
to €4.4 million in 2018 (2017: €4.3 million). The actuarial present value of the pension obligations
was €67.5 million as at 31 December 2018 (2017: €69.9 million).
Termination benefits
Expenses of €5.2 million were recognised in connection with the termination of Executive Board
appointments. €4.0 million thereof are attributable to share-based payments to former Executive Board
members.
Supervisory Board
The aggregate remuneration paid to members of the Supervisory Board in financial year 2018 was
€2.2 million (2017: €1.8 million).
In financial year 2018, the employee representatives on Deutsche Börse AG’s Supervisory Board
received remuneration (excluding Supervisory Board remuneration) amounting to €0.7 million (2017:
€0.5 million). The total consists of the fixed and variable salary components for those employee
representatives.
343
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Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Business relationships with related parties and key management personnel
Business relationships with related parties
The following table shows transactions entered into within the scope of business relationships with non-
consolidated companies of Deutsche Börse AG during the 2018 financial year. All transactions were
concluded at prevailing market terms.
Transactions with related entities
Amount of the transactions:
revenues
Amount of the transactions:
expenses
Outstanding balances:
receivables
Outstanding balances:
liabilities
2018
€m
11.2
2017
€m
12.6
2018
€m
– 19.1
2017
€m
– 18.5
0
0
0
0
31 Dec
2018
€m
31 Dec
2017
€m
31 Dec
2018
€m
31 Dec
2017
€m
1.2
0
2.9
– 1.0
– 1.5
0
0
0
11.2
12.6
– 19.1
– 18.5
1.2
2.9
– 1.0
– 1.5
Associates
Other
shareholdings
Total sum of
business
transactions
Monetary business relationships with key management personnel
Key management personnel are persons who directly or indirectly have authority and responsibility
for planning, directing and controlling the activities of Deutsche Börse Group. The Group defines
the members of the Executive Board and the Supervisory Board as key management personnel for
the purposes of IAS 24.
European Commodity Clearing Luxembourg S. à r.l., Luxembourg, (ECC Luxembourg) – a subsidiary of
European Commodity Clearing AG and therefore a member of the EEX group – entered into a managing
director agreement with IDS Lux S. à r.l., Luxembourg. The subject of the agreement is to provide a
natural person for the function of managing director in the management of ECC Luxembourg. In addition
to this position as managing director of ECC Luxembourg, this person is also a member of the key
management personnel at IDS Lux S. à r.l. In the financial year 2018, ECC Luxembourg made payments
in the amount of approximately €14.0 thousand for these management services.
A member of the board of directors of STOXX Ltd., Zug, Switzerland, also holds a key management
position within the law firm Lenz & Staehelin, Geneva, Switzerland. Deutsche Börse Group reported
expenses to this law firm of approximately €779.9 thousand in the 2018 financial year. As at
31 December 2018, liabilities amounted to €33.9 thousand.
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Notes | Other disclosures
Further information
On the board of directors of Powernext SAS, Paris, France – one of the subsidiaries of European Energy
Exchange AG, Leipzig, Germany – there are representatives of GRTgaz, Bois-Colombes, France, the
parent company of 3GRT, Tarascon, France, and EDEV S.A., Courbevoie, France. During the 2018
financial year, Powernext SAS rendered development and maintenance services for customised software
solutions in the area of market coupling and balancing, as well as in connection with an electronic
trading platform for 3GRT. In this context, the Group generated revenue of €790.6 thousand in 2018.
As at 31 December 2018, receivables amounted to €180.4 thousand.
The Board of Directors of LuxCSD S.A., Luxembourg, an associate from Deutsche Börse Group’s per-
spective, comprises two members of management of fully consolidated subsidiaries who are maintaining
a key position within these subsidiaries of Deutsche Börse Group. There were business transactions with
Clearstream Banking S.A., Luxembourg, Clearstream Services S.A., Luxembourg, Clearstream Inter-
national S.A., Luxembourg, Clearstream Banking AG, Frankfurt/Main, Germany, and Deutsche Börse AG,
Frankfurt/Main, Germany, to LuxCSD S.A. Overall, revenue of €2,327.3 thousand as well as expenses
of €1,271.3 thousand were recognised for such contracts during the 2018 financial year.
Furthermore, an Executive Board member of Clearstream Banking AG concurrently holds an executive
position within Deutsche Börse Commodities GmbH, Frankfurt/Main, Germany, an associate of Deutsche
Börse Group. During the 2018 financial year, Deutsche Börse Group realised revenue of €3,746.8
thousand and incurred expenses of €16,629.7 thousand based on the business relationship with
Deutsche Börse Commodities GmbH.
Two Executive Board members of Deutsche Börse AG are members of the Supervisory Board of China
Europe International AG, Frankfurt/Main, Germany, (CEINEX). This stock corporation is a jointly
established company of Shanghai Stock Exchange Ltd., Shanghai, China; China Financial Futures
Exchange, Shanghai, China; and Deutsche Börse AG. During the 2018 financial year, Deutsche Börse
Group realised revenue of €73.6 thousand and incurred expenses of €100.6 thousand based on the
business relationship with CEINEX.
A member of the Executive Board of Eurex Frankfurt AG holds a key position on the Supervisory Board
of PHINEO gAG, a non-profit entity based in Berlin, Germany, which was an associate from Deutsche
Börse Group’s perspective until 4 July 2018. In the financial year 2018, expenses of €250.0 thousand
were incurred, representing a donation to this non-profit entity for the year 2017.
Other business relationships with key management personnel
Selected executives of Deutsche Börse Group companies also hold a key management position within
the Clearstream Pension Fund, an “association d’épargne pension” (ASSEP) under Luxembourg law.
By means of cash contributions to this ASSEP, Clearstream International S.A., Clearstream Banking S.A.,
as well as Clearstream Services S.A., fund the defined benefit plan established in favour of their
Luxembourg employees.
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Notes | Other disclosures
Further information
32. Employees
Employees
Average number of employees during the year
Employed at the reporting date
Employees (average annual FTEs)
2018
5,800
5,964
2017
5,567
5,640
5,397
5,183
Of the average number of employees during the year, 30 (2017: 31) were classified as Managing
Directors (excluding Executive Board members), 333 (2017: 335) as senior executives and 5,437
(2017: 5,201) as employees.
There was an average of 5,397 full-time equivalent (FTE) employees during the year (2017: 5,183).
Please also refer to the “Employees” section in the combined management report.
33. Events after the end of the reporting period
There have been no material events after the balance sheet date.
34. Date of approval for publication
Deutsche Börse AG’s Executive Board approved the consolidated financial statements for submission
to the Supervisory Board on 5 March 2019. The Supervisory Board is responsible for examining the
consolidated financial statements and stating whether it endorses them.
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Notes
Further information | Responsibility statement by the Executive Board
Responsibility statement by the Executive Board
To the best of our knowledge, and in accordance with the applicable reporting principles, the conso-
lidated financial statements give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Group, and the combined management report includes a fair review of the develop-
ment and performance of the business and the position of the Group, together with a description of
the principal opportunities and risks associated with the expected development of the Group.
Frankfurt/Main, 8 March 2019
Deutsche Börse AG
Theodor Weimer
Christoph Böhm
Thomas Book
Stephan Leithner
Gregor Pottmeyer
Hauke Stars
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Deutsche Börse Group| Annual report 2018
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Notes
Further information | Independent Auditor’s Report
Independent Auditor’s Report
To Deutsche Börse Aktiengesellschaft, Frankfurt am Main
Report on the Audit of the Consolidated Financial Statements and Combined
Management Report
Opinions
We have audited the consolidated financial statements of Deutsche Börse Aktiengesellschaft, Frankfurt
am Main, and its subsidiaries (the Group), which comprise the consolidated balance sheet as of 31
December 2018, the consolidated income statement, the consolidated statement of comprehensive
income, the consolidated cash flow statement and the consolidated statement of changes in equity for
the financial year from 1 January to 31 December 2018, and notes to the consolidated financial
statements, including a summary of significant accounting policies. In addition, we have audited the
combined management report of Deutsche Börse Aktiengesellschaft, Frankfurt am Main, for the financial
year from 1 January 2018 to 31 December 2018. In accordance with the German legal requirements
we have not audited the content of the combined corporate governance statement, which is included in
section “Combined corporate governance statement and corporate governance report” in the combined
management report.
In our opinion, on the basis of the knowledge obtained in the audit,
the accompanying consolidated financial statements comply in all material respects with the IFRSs as
adopted by the EU and the additional requirements of German commercial law pursuant to Section
315e(1) HGB [Handelsgesetzbuch: German Commercial Code] and, in compliance with these
requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as
of 31 December 2018 and of its financial performance for the financial year from 1 January to 31
December 2018, and
the accompanying combined management report as a whole provides an appropriate view of the
Group’s position. In all material respects, the combined management report is consistent with the
consolidated financial statements, complies with German legal requirements and appropriately presents
the opportunities and risks of future development. Our opinion on the combined management report
does not cover the content of the combined corporate governance statement mentioned above.
Pursuant to Section 322(3) sentence 1 HGB, we declare that our audit has not led to any reservations
relating to the legal compliance of the consolidated financial statements and of the combined
management report.
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Deutsche Börse Group| Annual report 2018
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Notes
Further information | Independent Auditor’s Report
Basis for the Opinions
We conducted our audit of the consolidated financial statements and combined management report in
accordance with Section 317 HGB and the EU Audit Regulation No 537/2014 (referred to subsequently
as ‘EU Audit Regulation’) and in compliance with German Generally Accepted Standards for Financial
Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in
Germany] (IDW). Our responsibilities under those requirements and principles are further described in
the ‘Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and Combined
Management Report’ section of our auditor’s report. We are independent of the group entities in
accordance with the requirements of European law and German commercial and professional law, and
we have fulfilled our other German professional responsibilities in accordance with these requirements.
In addition, in accordance with Article 10(2) point (f) of the EU Audit Regulation, we declare that we
have not provided non-audit services prohibited under Article 5(1) of the EU Audit Regulation. We
believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinions on the consolidated financial statements and on the combined management report.
Key Audit Matters in the Audit of the Consolidated Financial Statements
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial statements for the financial year from 1 January to 31 December
2018. These matters were addressed in the context of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.
Impairment of the goodwill
For the accounting policies applied as well as the assumptions used, please refer to note 3 (Summary of
key accounting policies) and note 11 (Intangible assets) in the notes to the consolidated financial
statements.
THE FINANCIAL STATEMENT RISK
At 31 December 2018, goodwill amounted to EUR 2,865.6 million (previous year: EUR 2,770.9
million). The goodwill thus represents 1,8 per cent of the assets of the Group at 31 December 2018.
Goodwill is subjected to an impairment test by the company at least once a year and also on an ad hoc
basis, if appropriate. For this purpose, the carrying amount is compared with the recoverable amount of
the cash-generating unit (CGU). Deutsche Börse AG determines the recoverable amounts of the cash-
generating units either on the basis of the value in use or on the basis of the fair value less costs of
disposal. If the carrying amount is higher than the recoverable amount, there is a need for impairment.
The result of these valuations is highly dependent on assumptions concerning the future cash inflows
based on the corporate planning as well as the defined parameters. As a result, the valuations are
subject to discretion. Any need for impairment that may result can have material impacts on the
statement of the assets, liabilities and financial performance of Deutsche Börse AG. Therefore, the
correct determination of any need for impairment is of particular significance for the financial
statements.
349
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information | Independent Auditor’s Report
OUR AUDIT APPROACH
With the support of our valuation experts, we have assessed the valuation models used by the company
as well as the appropriateness of the significant assumptions relating to valuation parameters. We
assessed the appropriateness of the assumptions used in the determination of the discount rates by
comparing them with market- and industry-specific reference values; we additionally verified the
calculation method used to determine the discount rates. We compared the expected cash inflows and
outflows used for the calculations with the current budget plan approved by management. In order to
assess the appropriateness of the assumptions used when the budget plan was drawn up, we first
discussed these in meetings with management. Then we compared the assumptions used with relevant
peer group companies, and evaluated analyst reports on the market segments. We furthermore
appraised the reliability of the forecasts in previous years based on whether they occurred or not. Within
the scope of our own sensitivity analyses, we determined whether there would be a need for impairment
in the event of possible changes in the assumptions in realistic ranges.
OUR OBSERVATIONS
The calculation method used by the company is appropriate and consistent with the relevant valuation
principles. The underlying assumptions about the valuation-relevant parameters have been calculated in
a balanced way and are within acceptable ranges.
Impairment of the other intangible assets
For the accounting policies applied as well as the assumptions used, please refer to note 3 (Summary of
key accounting policies) and note 11 (Intangible assets) in the notes to the consolidated financial
statements.
THE FINANCIAL STATEMENT RISK
The other intangible assets amounted to EUR 952.7 million (previous year: EUR 911.2 million) at 31
December 2018. The other intangible assets thus represent 0.6 per cent of the assets of the Group at
31 December 2018.
The other intangible assets with indefinite useful lives are subject to an impairment test by the company
at least once a year and also on an ad hoc basis, if appropriate. For this purpose, Deutsche Börse AG
determines the recoverable amounts of the intangible asset or cash-generating units, in case no
independent cash flows can be allocated to that specific intangible asset, either on the basis of the value
in use or on the basis of the fair value less costs of disposal. The result of these valuations is highly
dependent on assumptions concerning the future cash inflows based on the corporate planning as well
as the defined parameters. As a result, the valuations are subject to discretion. Any need for impairment
that may result can have material impacts on the statement of the assets, liabilities and financial
performance of Deutsche Börse AG. Therefore, the correct determination of any need for impairment is of
particular significance for the financial statements.
350
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information | Independent Auditor’s Report
OUR AUDIT APPROACH
With the support of our valuation experts, we have assessed the valuation models used by the company
as well as the appropriateness of the significant assumptions relating to valuation parameters. We
assessed the appropriateness of the assumptions used in the determination of the discount rates by
comparing them with market- and industry-specific reference values; we additionally verified the
calculation method used to determine the discount rates. We compared the expected cash inflows and
outflows used for the calculations with the current budget plan approved by management. In order to
assess the appropriateness of the assumptions used when the budget plan was drawn up, we first
discussed these in meetings with management. Then we compared the assumptions used with relevant
peer group companies, and evaluated analyst reports on the market segments. We furthermore
appraised the reliability of the forecasts in previous years based on whether they occurred or not. Within
the scope of our own sensitivity analyses, we determined whether there would be a need for impairment
in the event of possible changes in the assumptions in realistic ranges.
OUR OBSERVATIONS
The calculation method used by the company is appropriate and consistent with the relevant valuation
principles. The underlying assumptions about the valuation-relevant parameters have been calculated in
a balanced way and are within acceptable ranges.
The valuation of provisions for tax risks
For the accounting policies applied as well as the assumptions used, please refer to note 3 (Summary of
key accounting policies) and note 10 (Income tax expense) in the notes to the consolidated financial
statements. Information on the tax provisions and risks can be found in note 26 (Financial liabilities and
other risks).
THE FINANCIAL STATEMENT RISK
Deutsche Börse AG operates in a variety of jurisdictions with different legal systems. The provisions for
tax risks amounted to EUR 334.8 million at 31 December 2018.
The application of the local and international tax regulations and of tax relief is complex and associated
with risks. The calculation of tax provisions requires the company to exercise judgement in the
assessment of tax issues and to make estimates concerning tax risks. The result of these assessments is
dependent to a large extent on assumptions concerning the future interpretation of tax situations in the
course of tax audits and also on decisions of the tax authorities and courts on similar tax situations and
is therefore subject to discretion. Any additional tax expenses can have material impacts on the
statement of assets, liabilities and financial performance of Deutsche Börse AG. Therefore, the
identification and correct allocation of provisions for tax risks is of particular significance for the
consolidated financial statements.
Deutsche Börse AG occasionally commissions external experts to assess tax matters.
351
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information | Independent Auditor’s Report
OUR AUDIT APPROACH
With the support of our employees specialising in local and international tax law, we appraised the tax
calculation, including the risk assessment, of Deutsche Börse AG. Where available, we have also
acknowledged the assessment of external experts engaged by the company. We held meetings with the
management as well as staff from the tax department in order to gain an understanding of the existing
tax risks. We have assessed the competence and the objectivity of external experts and evaluated the
documents they have produced.
Furthermore, we evaluated the correspondence with the competent tax authorities and assessed the
assumptions used to determine the tax provisions on the basis of our knowledge and experience of the
current application of the relevant legal regulations by the authorities and the courts.
OUR OBSERVATIONS
The assumptions for determining the tax provisions are appropriate.
Other Information
Management is responsible for the other information. The other information comprises:
the combined corporate governance statement and
the remaining parts of the corporate report, with the exception of the audited consolidated financial
statements and combined management report and our auditor’s report.
Our opinions on the consolidated financial statements and on the combined management report do not
cover the other information, and consequently we do not express an opinion or any other form of
assurance conclusion thereon.
In connection with our audit, our responsibility is to read the other information and, in so doing, to
consider whether the other information is
materially inconsistent with the consolidated financial statements, with the combined management
report or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
Responsibilities of Management and the Supervisory Board for the Consolidated Financial
Statements and Combined Management Report
Management is responsible for the preparation of the consolidated financial statements that comply, in
all material respects, with IFRSs as adopted by the EU, and the additional requirements of German
commercial law pursuant to Section 315e (1) HGB, and that the consolidated financial statements, in
compliance with these requirements, give a true and fair view of the assets, liabilities, financial position
and financial performance of the Group. In addition, management is responsible for such internal control
as they have determined necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
352
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information | Independent Auditor’s Report
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern. They also have the responsibility for disclosing, as applicable,
matters related to going concern. In addition, they are responsible for financial reporting based on the
going concern basis of accounting unless there is an intention to liquidate the Group or to cease
operations, or there is no realistic alternative but to do so.
Furthermore, management is responsible for the preparation of the combined management report that,
as a whole, provides an appropriate view of the Group’s position and is, in all material respects,
consistent with the consolidated financial statements, complies with German legal requirements and
appropriately presents the opportunities and risks of future development. In addition, management is
responsible for such arrangements and measures (systems) as they have considered necessary to enable
the preparation of the combined management report that is in accordance with the applicable German
legal requirements and to be able to provide sufficient appropriate evidence for the assertions in the
combined management report.
The supervisory board is responsible for overseeing the Group’s financial reporting process for the
preparation of the consolidated financial statements and of the combined management report.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and
the Combined Management Report
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and whether the
combined management report as a whole provides an appropriate view of the Group’s position and, in
all material respects, is consistent with the consolidated financial statements and the knowledge
obtained in the audit, complies with the German legal requirements, and appropriately presents the
opportunities and risks of future development, as well as to issue an auditor’s report that includes our
opinions on the consolidated financial statements and on the combined management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Section 317 HGB and the EU Audit Regulation and in compliance with German
Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der
Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements and this combined management report.
We exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements and the
combined management report, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
353
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information | Independent Auditor’s Report
Obtain an understanding of the internal control system relevant to the audit of the consolidated
financial statements, and of arrangements and measures (systems) relevant to the audit of the
combined management report, in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems.
Evaluate the appropriateness of accounting policies used by management and the reasonableness of
estimates made by management and related disclosures.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to
the related disclosures in the consolidated financial statements and in the combined management
report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Group to cease to be able to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements present the underlying
transactions and events in a manner that the consolidated financial statements give a true and fair
view of the assets, liabilities, financial position, and financial performance of the Group in compliance
with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant
to Section 315e (1) HGB.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express opinions on the consolidated financial statements and
on the combined management report. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our opinions.
Evaluate the consistency of the combined management report with the consolidated financial
statements, its conformity with German law, and the view of the Group’s position it provides.
Perform audit procedures on the prospective information presented by management in the combined
management report. On the basis of sufficient appropriate audit evidence, we evaluate, in particular
the significant assumptions used by management as a basis for the prospective information, and
evaluate the proper derivation of the prospective information from these assumptions. We do not
express a separate opinion on the prospective information and on the assumptions used as a basis.
There is a substantial unavoidable risk that future events will differ materially from the prospective
information.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with the
relevant independence requirements, and communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence and, where applicable, the related
safeguards.
354
Deutsche Börse Group| Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information | Independent Auditor’s Report
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter.
Other Legal and Regulatory Requirements
Further information pursuant to Article 10 of the EU Audit Regulation
We were elected as group auditors by the annual general meeting held on 16 May 2018. We were
engaged by the audit committee of the Supervisory Board on 4 September 2018. In compliance with the
transitional provisions of Article 41 Section 2 of the EU Audit Regulations, we have been engaged as
auditors of the consolidated financial statements of Deutsche Börse AG without interruption since the
2001 financial year.
We declare that the opinions expressed in this auditor’s report are consistent with the additional report to
the audit committee pursuant to Article 11 of the EU Audit Regulation (long form audit report).
In addition to the consolidated financial statements, we audited the annual financial statements of
Deutsche Börse AG and carried out various annual audits of subsidiaries. The audits included reviews of
interim financial statements and project-related audits for the implementation of new accounting
standards. Other certification services relate to ISAE 3402 and ISAE 3000 reports, Comfort Letters and
statutory or contractual audits such as audits under the WpHG, KWG and other contractually agreed
assurance services.
Tax services include assistance in the preparation of tax returns, tax appraisals and advice on individual
matters, and tax advice related to the external audit. In addition, we have supported the implementation
of regulatory requirements with quality assurance.
German Public Auditor Responsible for the Engagement
The German Public Auditor responsible for the engagement is Klaus-Ulrich Pfeiffer.
Frankfurt am Main, 8 March 2019
KPMG AG
Wirtschaftsprüfungsgesellschaft
[Original German version signed by:]
Leitz
Wirtschaftsprüfer
[German Public Auditor]
Pfeiffer
Wirtschaftsprüfer
[German Public Auditor]
355
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Deutsche Börse Group worldwide
Deutsche Börse Group worldwide
Europe
Amsterdam
Quarter Plaza
Transformatorweg 90
1014 AK Amsterdam
Netherlands
Berlin
Kurfürstendamm 119
10711 Berlin
Germany
Unter den Linden 36
10117 Berlin
Germany
Bern
Marktgasse 20
3011 Bern
Switzerland
Brussels
11–13, Rue d’Idalie
1050 Bruxelles
Belgium
Cork
2600 Cork Airport Business
Park
Kinsale Road
Cork
Ireland
Eschborn
The Cube
Mergenthalerallee 61
65760 Eschborn
Germany
Postal address:
60485 Frankfurt / Main
Germany
Frankfurt / Main
Börsenplatz 4
60313 Frankfurt / Main
Germany
Sandweg 94
Entry C
60316 Frankfurt / Main
Germany
Westend Carrée
Grüneburgweg 16–18
60322 Frankfurt / Main
Germany
Leipzig
Augustusplatz 9
04109 Leipzig
Germany
London
11 Westferry Circus
1st Floor, Westferry House
Canary Wharf
London
E14 4HE
United Kingdom
11 Westferry Circus
2nd Floor, Westferry House
Canary Wharf
London
E14 4HE
United Kingdom
11 Westferry Circus
3rd Floor, Westferry House
Canary Wharf
London
E14 4HE
United Kingdom
Luxembourg
The Square
42, Avenue JF Kennedy
L-1855 Luxembourg
Madrid
Calle de la Tramontana, 2
28231 Las Rozas de Madrid
Spain
Milan
Via Monte di Pietà 21
20121 Milano MI
Italy
Oslo
Filipstad Brygge 1
0252 Oslo
Norway
Paris
5, boulevard Montmartre
75002 Paris
France
17, rue de Surène
75008 Paris
France
Prague
Futurama Business Park
Building B
Sokolovská 662 / 136b
18600 Praha 8
Czech Republic
Vienna
Mayerhofgasse 1 / 19
1040 Wien
Austria
Zug
Theilerstrasse 1A
6300 Zug
Switzerland
North America
Chicago
Willis Tower
233 South Wacker Drive
Suite 2450
Chicago, IL 60606
USA
Willis Tower
233 South Wacker Drive
Suite 2455
Chicago, IL 60606
USA
New York
1155 Avenue of the Americas,
19th floor
New York, NY 10036
USA
521 Fifth Avenue, 38th floor
New York, NY 10175
USA
Asia
Beijing
Unit 01–03, 23rd floor
China World Tower B
1 Jianguomenwai Avenue
Chaoyang District
100004 Peking
P.R. China
Dubai
Conrad Tower Building
Level 10, Unit 1006
Sheikh Zayed Road
P.O. Box: 27250
Dubai
United Arab Emirates
Financial Centre
Liberty House
Level 8, App. 810C
P.O. Box: 482036
Dubai
United Arab Emirates
Hong Kong
2904-7, 29 / F, Man Yee Build-
ing
68 Des Voeux Road, Central
Hong Kong
Mumbai
Level 8, Vibgyor Towers
G Block, C-62,
Bandra Kurla Complex
Mumbai – 400 051
India
Singapore
9 Raffles Place
#55–01 Republic Plaza
Singapore 048619
Republic of Singapore
9 Raffles Place
#56–01 Republic Plaza
Singapore 048619
Republic of Singapore
103 Penang Road
#11–07 VisionCrest
Commercial
Singapore 238467
Republic of Singapore
Tokyo
27F, Marunouchi Kitaguchi
Building
1-6-5, Marunouchi
Chiyoda-ku
Tokyo 100-0005
Japan
For more information on our
addresses please visit
www.deutsche-boerse.com /
addresses
356
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Deutsche Börse Group worldwide
Deutsche Börse Group worldwide
Europe
London
11 Westferry Circus
Theilerstrasse 1A
1st Floor, Westferry House
Zug
6300 Zug
Switzerland
Kurfürstendamm 119
2nd Floor, Westferry House
Unter den Linden 36
United Kingdom
USA
11 Westferry Circus
Willis Tower
3rd Floor, Westferry House
233 South Wacker Drive
Amsterdam
Quarter Plaza
Transformatorweg 90
1014 AK Amsterdam
Netherlands
Berlin
10711 Berlin
Germany
10117 Berlin
Germany
Bern
Marktgasse 20
3011 Bern
Switzerland
Cork
Park
Kinsale Road
Cork
Ireland
Eschborn
The Cube
Mergenthalerallee 61
65760 Eschborn
Germany
Postal address:
60485 Frankfurt / Main
Germany
Frankfurt / Main
Börsenplatz 4
60313 Frankfurt / Main
Germany
Sandweg 94
Entry C
60316 Frankfurt / Main
Germany
Westend Carrée
Grüneburgweg 16–18
60322 Frankfurt / Main
Germany
Leipzig
Augustusplatz 9
04109 Leipzig
Germany
Mumbai
Level 8, Vibgyor Towers
G Block, C-62,
Bandra Kurla Complex
Mumbai – 400 051
India
Singapore
9 Raffles Place
#55–01 Republic Plaza
Singapore 048619
Republic of Singapore
9 Raffles Place
#56–01 Republic Plaza
Singapore 048619
Republic of Singapore
103 Penang Road
#11–07 VisionCrest
Commercial
Singapore 238467
27F, Marunouchi Kitaguchi
Tokyo
Building
Chiyoda-ku
Tokyo 100-0005
Japan
For more information on our
addresses please visit
www.deutsche-boerse.com /
Canary Wharf
London
E14 4HE
United Kingdom
11 Westferry Circus
Canary Wharf
London
E14 4HE
Canary Wharf
London
E14 4HE
United Kingdom
Via Monte di Pietà 21
20121 Milano MI
Spain
Milan
Italy
Oslo
Filipstad Brygge 1
0252 Oslo
Norway
Paris
75002 Paris
France
75008 Paris
France
North America
Chicago
Willis Tower
233 South Wacker Drive
Suite 2450
Chicago, IL 60606
Suite 2455
Chicago, IL 60606
USA
New York
19th floor
USA
New York, NY 10036
Asia
Beijing
Unit 01–03, 23rd floor
China World Tower B
Chaoyang District
100004 Peking
P.R. China
Dubai
Level 10, Unit 1006
Sheikh Zayed Road
P.O. Box: 27250
United Arab Emirates
Financial Centre
Liberty House
Level 8, App. 810C
P.O. Box: 482036
United Arab Emirates
1 Jianguomenwai Avenue
addresses
5, boulevard Montmartre
Conrad Tower Building
17, rue de Surène
Dubai
Futurama Business Park
Prague
Building B
Sokolovská 662 / 136b
Dubai
18600 Praha 8
Czech Republic
Vienna
1040 Wien
Austria
Mayerhofgasse 1 / 19
ing
Hong Kong
2904-7, 29 / F, Man Yee Build-
68 Des Voeux Road, Central
Hong Kong
Brussels
11–13, Rue d’Idalie
1050 Bruxelles
Belgium
Luxembourg
The Square
42, Avenue JF Kennedy
L-1855 Luxembourg
1155 Avenue of the Americas,
Republic of Singapore
2600 Cork Airport Business
Calle de la Tramontana, 2
New York, NY 10175
28231 Las Rozas de Madrid
USA
Madrid
521 Fifth Avenue, 38th floor
1-6-5, Marunouchi
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Glossary
Glossary
B
Benchmarks Regulation
An EU regulation on indices that are used as references for
financial instruments and financial contracts. The Benchmarks
Regulation came into force on 1 January 2018. Under its transi-
tional provisions, benchmark administrators from both EU and
non-EU countries must obtain authorised or registered status by
1 January 2020.
Blockchain / distributed ledger technology
A blockchain / a distributed ledger is a public, distributed set of
digital data. Originally developed as the technological basis for
the virtual currency bitcoin, blockchain technology can be used to
facilitate direct user-to-user transactions during digital payments
processing and e-commerce.
Brexit
The decision by the United Kingdom to leave the European Union.
This will have far-reaching consequences for the financial markets
and their participants. Deutsche Börse Group’s overriding aim is
to ensure secure, competitive markets. In line with this, the Group
is in continuous close contact with clients, the supervisory author-
ities and associations.
C
C7
Deutsche Börse Group’s IT architecture for clearing exchange -
OTC products (both for derivatives and for the spot
traded and
market). C7® is part of the Group’s 7 Market Technology® series.
Capital Markets Union
The Capital Markets Union (CMU) is a European Commission
initiative. Its main aim is to promote economic growth in the
EU by strengthening the role of the capital markets and enhancing
financial market integration.
Cash flows from operating activities
Total cash inflows and outflows arising in the course of operating
business. Cash flows from operating activities are Deutsche Börse
Group’s primary source of finance and are reported both before
and after the changes in receivables and liabilities from CCP posi-
tions, since the latter vary widely depending on the reporting
date and the informative value of this indicator is therefore limited.
Cash pool
A master account used to bundle excess liquidity within affiliated
companies, to the extent permitted by the regulatory and legal
framework.
CCP
Central counterparty; also: clearing house. An institution that
interposes itself between trading partners as the legal buyer or
seller after a transaction has been entered into, facilitating netting,
margin and collateral) and
minimising counterparty default risk (
carrying out all steps necessary for final clearing.
Clearing
The netting (offsetting of buy and sell positions) of receivables
and liabilities arising from securities and derivatives transactions.
The goal is to facilitate efficient risk management by reducing
risk positions. Clearing is also used to determine the bilateral net
debt of buyers and sellers. Central clearing is performed via a
CCP such as Eurex Clearing AG.
Clearstream Funds Centre Ltd.
Swisscanto Funds Centre Ltd.
CMU
Capital Markets Union
Collateral
Collateral, in particular in the form of cash or securities such as
equities or bonds, is posted in order to meet specified collateral
requirements (
margin). This process is known as collateralisation.
Commercial paper
A debt security with a short or medium term (mostly less than one
year) traded on the money market and sold by highly creditworthy
issuers to finance their short-term capital requirements.
CRD V / CRR II
Amendments to the Capital Requirements Directive IV and Capital
Requirements Regulation (CRD IV / CRR) proposed by the European
Commission. The proposals concern the minimum requirements
for equity and eligible liabilities (MREL) and the total loss-absorbing
capacity (TLAC); they also involve amendments to the EU Bank
Recovery and Resolution Directive (BRRD) and the related regulation.
The draft legislation will probably be finalised in the first quarter
of 2019; the related requirements are not expected to come into
force before the beginning of 2021.
CRD VI / CRR III
In December 2017, the Basel Committee on Banking Supervision
(BCBS) adopted and published measures to finalise the Basel III
regulatory framework. These regulations, as well as presumably the
subsequently resolved regulations on market risks and exposures
to public-sector entities, will be incorporated and implemented
in the new CRD VI / CRR III package. The corresponding draft law
of the EU Commission is expected to be published at the beginning
of 2020.
356
357
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Glossary
Cross-margining
margin requirement for an inte-
Procedure for determining the
grated portfolio. Risk positions in a portfolio (on-exchange and
OTC positions) are modelled together to yield a single value that
is used as the basis for determining the margin requirement.
The offsetting procedure serves to reduce the margin requirement.
CSD
Central securities depository. Clearstream Banking AG acts among
other things as the officially recognised German central securities
depository under the Depotgesetz (German Safe Custody Act).
In this function, it offers a wide range of post-trade services for
securities issued in Germany and other countries.
CSDR
Central Securities Depository Regulation. The CSDR aims to
harmonise the securities
rules for
settlement systems and supervisory
CSDs in Europe.
Custody
The safekeeping and administration of securities. A custody
account (similar to an account for monetary transactions) is
established for each customer. The custody account information
includes details of the types, nominal amounts or quantities,
and numbers etc. of the securities held, as well as the name and
address of the account holder.
D
DB1 Ventures
Deutsche Börse Group’s corporate venture capital arm. DB1
Ventures’ goal is to provide capital to pioneering financial services
companies so as to enable them to develop their ideas and create
growth. The focus is on early- to growth-stage fintech businesses.
Depreciation, amortisation and impairment losses
Regular and ad hoc downward adjustments to the carrying amounts
of intangible assets and property, plant and equipment. These
are presented separately from
transparent reporting of costs and earnings, and to increase
comparability with competitors.
operating costs in order to ensure
Deutsche Börse Venture Network®
Platform for bringing together young innovative growth companies
in the pre-IPO sector and international investors.
E
EBITDA
Earnings before interest, tax, depreciation, amortisation and im-
pairment losses. Deutsche Börse Group’s operating profit, consist-
operating costs.
ing of the difference between
net revenue and
OTC
CCPs and trade repositories; it aims to improve
EMIR / EMIR review
European Market Infrastructure Regulation. EMIR regulates
derivatives,
security and integrity on the OTC derivatives market by promoting
transparency and reducing risk. Among other things, it does this
clearing obligation for eligible OTC derivatives
by introducing a
and measures to reduce counterparty credit risk and operational
risk for OTC derivatives not cleared via CCPs, plus disclosure
requirements for all derivatives. EMIR also establishes general
requirements for CCPs and trade repositories. The EMIR review
proposals that were published in the summer of 2017 aim to
improve efficiency on the one hand and to ensure the security and
stability of the financial markets after Brexit on the other.
ESG criteria
ESG = environment, social, governance. The composition of
ESG indices reflects these three selection criteria.
ETF
Exchange-traded fund. A mutual fund with an indefinite maturity
whose shares can be bought or sold in continuous trading on
the exchange. It tracks the performance of the index on which it
is based.
ETP
Exchange-traded product. ETPs comprise exchange-traded
commodities (ETCs) and exchange-traded notes (ETNs).
F
Free funds from operations (FFO) / net debt ratio
Performance indicator used in Deutsche Börse Group’s consolidated
balance sheet as from 2019. FFO are calculated by deducting
interest and tax expenses from EBITDA, and adjusting the figure
for operating leases and unfunded pension obligations. Deutsche
Börse Group’s target ratio is at least 50 per cent; this is the figure
needed to achieve the minimal financial risk profile required for
an AA rating under the S&P Global Ratings methodology.
FX
Foreign exchange.
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Deutsche Börse Group | Annual report 2018
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Management report
Financial statements
Notes
Further information | Glossary
Cross-margining
E
Procedure for determining the
margin requirement for an inte-
grated portfolio. Risk positions in a portfolio (on-exchange and
EBITDA
OTC positions) are modelled together to yield a single value that
Earnings before interest, tax, depreciation, amortisation and im-
is used as the basis for determining the margin requirement.
pairment losses. Deutsche Börse Group’s operating profit, consist-
The offsetting procedure serves to reduce the margin requirement.
ing of the difference between
net revenue and
operating costs.
CSD
EMIR / EMIR review
Central securities depository. Clearstream Banking AG acts among
European Market Infrastructure Regulation. EMIR regulates
OTC
other things as the officially recognised German central securities
derivatives,
CCPs and trade repositories; it aims to improve
depository under the Depotgesetz (German Safe Custody Act).
security and integrity on the OTC derivatives market by promoting
In this function, it offers a wide range of post-trade services for
transparency and reducing risk. Among other things, it does this
securities issued in Germany and other countries.
by introducing a
clearing obligation for eligible OTC derivatives
and measures to reduce counterparty credit risk and operational
risk for OTC derivatives not cleared via CCPs, plus disclosure
Central Securities Depository Regulation. The CSDR aims to
requirements for all derivatives. EMIR also establishes general
harmonise the securities
settlement systems and supervisory
requirements for CCPs and trade repositories. The EMIR review
proposals that were published in the summer of 2017 aim to
improve efficiency on the one hand and to ensure the security and
stability of the financial markets after Brexit on the other.
CSDR
Custody
rules for
CSDs in Europe.
The safekeeping and administration of securities. A custody
account (similar to an account for monetary transactions) is
ESG criteria
established for each customer. The custody account information
ESG = environment, social, governance. The composition of
includes details of the types, nominal amounts or quantities,
ESG indices reflects these three selection criteria.
and numbers etc. of the securities held, as well as the name and
address of the account holder.
Exchange-traded fund. A mutual fund with an indefinite maturity
whose shares can be bought or sold in continuous trading on
the exchange. It tracks the performance of the index on which it
ETF
is based.
D
DB1 Ventures
Deutsche Börse Group’s corporate venture capital arm. DB1
ETP
Ventures’ goal is to provide capital to pioneering financial services
Exchange-traded product. ETPs comprise exchange-traded
companies so as to enable them to develop their ideas and create
commodities (ETCs) and exchange-traded notes (ETNs).
growth. The focus is on early- to growth-stage fintech businesses.
Depreciation, amortisation and impairment losses
F
Regular and ad hoc downward adjustments to the carrying amounts
of intangible assets and property, plant and equipment. These
Free funds from operations (FFO) / net debt ratio
are presented separately from
operating costs in order to ensure
Performance indicator used in Deutsche Börse Group’s consolidated
transparent reporting of costs and earnings, and to increase
balance sheet as from 2019. FFO are calculated by deducting
comparability with competitors.
Deutsche Börse Venture Network®
interest and tax expenses from EBITDA, and adjusting the figure
for operating leases and unfunded pension obligations. Deutsche
Börse Group’s target ratio is at least 50 per cent; this is the figure
Platform for bringing together young innovative growth companies
needed to achieve the minimal financial risk profile required for
in the pre-IPO sector and international investors.
an AA rating under the S&P Global Ratings methodology.
FX
Foreign exchange.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Glossary
G
L
GTX ECN
A US FX trading platform for off-exchange transactions. GTX ECN
has been part of Deutsche Börse Group’s 360T (foreign exchange)
segment since 2018.
Liquidity
A market situation in which a security can be bought or sold
rapidly, even in larger quantities, without substantially affecting
its price.
H
Listing
Quotation of a security or issuer on the exchange.
Hybrid bond
A subordinated corporate bond with both equity- and debt-like
features, a very long or unlimited maturity and a high coupon.
M
I
ICSD
International
CSD
Interest-bearing gross debt / EBITDA ratio
Performance indicator used in Deutsche Börse Group’s consoli-
dated balance sheet up to 2018. Deutsche Börse Group’s target
ratio was set at a maximum of 1.5 in order to maintain the
AA rating at Group level.
EBITDA to interest
Interest coverage ratio
A performance indicator showing the ratio of
expenses from financing activities. Until 2018, Deutsche Börse
Group aimed for a minimum interest coverage ratio of 16 at Group
level in order to maintain its AA rating. The target for the Clear-
stream subgroup was at least 25. As from 2019, the method of
calculating this indicator has been adjusted in line with a new
methodology from S&P Global Ratings; the new minimum target
ratio is 14.
Interest rate swaps
The exchange of fixed interest rates and floating rates payable
based on identical principal amounts in the same currency.
IPO
Initial public offering. An IPO is when a company first offers its
shares for sale to the general public.
Margin
Collateral requirements determined by a
transactions for which it acts as a central counterparty, used
to cover risk from open positions in case a participant defaults.
CCP for all types of
MiFID
Markets in Financial Instruments Directive. This EU directive
establishes a regulatory framework for the provision of investment
services in connection with financial instruments (such as broker-
age, advice, dealing, portfolio management, underwriting). It
applies to banks, investment firms and the operators of regulated
markets (e.g. stock exchanges). The objective is to promote the
integration, competitiveness and efficiency of the EU’s financial
markets.
MiFID II
The revision of the Markets in Financial Instruments Directive
(MiFID). The revised directive came into effect in January 2018. It
sets out the rules governing the authorisation and activities of in-
vestment firms – in particular for so-called market makers
(liquidity providers) and participants in algorithmic trading – and
regulated trading venues, along with precautionary measures for
specifying and supervising position limits for commodities deriva-
tives and the requirements to be met by data reporting services.
MiFIR
Markets in Financial Instruments Regulation. A supplementary
EU regulation to MiFID II that has been in effect since January 2018.
Its comprehensive reporting obligations are designed to increase
transparency on the stock, bond and derivatives markets and
close loopholes in off-exchange transactions. The introduction of
mandatory on-venue trading for shares and derivatives ensures
that a larger number of transactions will be executed on regulated
trading venues. The new regulations also cover the accessibility
CCPs, trading venues and benchmarks as well as provisions
of
governing the activities of companies from third countries.
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Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Glossary
N
P
Net debt / EBITDA ratio
Performance indicator used in Deutsche Börse Group’s consolidated
balance sheet as from 2019. The Group’s target ratio is a maxi-
mum of 1.75; this is the figure needed to achieve the minimal
financial risk profile required for an AA rating under the S&P
Global Ratings methodology.
Net present value (NPV)
The present (discounted) value of future payments. This measure
is used in financial assessments to prioritise and manage projects.
Net profit for the period attributable to
shareholders of Deutsche Börse AG
The profit generated within a certain period that is attributable
to shareholders; this measure is used to manage the results of
operations.
Net revenue
Revenue plus net interest income from banking business and
other operating income, less volume-related costs. Deutsche
Börse Group uses net revenue (and operating costs) to manage
its
EBITDA.
Payback period
The period until the cost of an investment or an asset is covered
by the income generated with it. This measure is used in financial
assessment to prioritise and manage projects.
PRIIPs
EU regulation on key information documents (KIDs) for packaged
retail and insurance-based investment products (PRIIPs). The
regulation requires PRIIPs manufacturers to publish KIDs on their
products in order to establish a common standard of information
to be provided to retail investors across the EU.
Prime Standard
Subsegment of the EU-regulated market of Frankfurter Wertpapier-
börse (FWB®, the Frankfurt Stock Exchange) for companies that meet
particularly high transparency standards. A listing in the Prime
Standard is a precondition for admission to one of Deutsche Börse’s
selection indices, such as DAX®, MDAX®, SDAX® orTecDAX®.
Q
Nodal Exchange
US derivatives exchange providing price, credit and liquidity risk
management to participants in the North American energy
markets. Nodal Exchange belongs to Deutsche Börse Group’s EEX
(commodities) segment.
QE
Quantitative easing. In March 2015, the European Central Bank
(ECB) launched a programme to purchase sovereign bonds and
liquidity
other securities. The aim was to further boost market
and to fend off deflation by increasing the money supply. The ECB
discontinued its QE programme in December 2018.
O
R
Operating costs
Personnel costs plus other operating expenses. Depreciation,
amortisation, and impairment losses are presented separately
from operating costs in order to ensure transparent reporting
of costs and earnings, and to increase comparability with
com petitors. Deutsche Börse Group uses operating costs (and
net revenue) to manage its
EBITDA.
Regulatory Reporting Hub
Deutsche Börse Group’s platform for reporting solutions. The Hub
enables sell-side and buy-side institutions, corporates and trading
venues, to efficiently meet their current and future regulatory
obligations. It supports clients in reporting to all relevant national
competent authorities across Europe and in fulfilling transparency
requirements.
OTC
Over the counter, off-exchange. Describes transactions between
two or more trading parties that are not executed on a regulated
market.
OTC clearing
The name given to the
executed on a regulated market.
clearing of transactions that are not
Repo
Short for “repurchase agreement”. An agreement between the
buyer and the seller of a security in which the seller promises
to buy back the security on a specified date. Repos are typically
used by banks as a temporary source of liquid funds.
Return on equity (RoE)
The ratio of net profit for the period attributable to Deutsche
Börse AG shareholders to the average equity available to Deutsche
Börse Group in a fiscal year. This measure is used to determine
the yield generated by the equity deployed.
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Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Glossary
Roadmap 2020
Deutsche Börse Group’s growth strategy, which was unveiled in
May 2018. Roadmap 2020 focuses on three strategic initiatives:
organic growth, targeted acquisitions and investments in inno-
vative technologies. It aims to consolidate and further expand
Deutsche Börse’s position as a leading European financial markets
infrastructure provider with ambitions for global growth.
EU regulation on key information documents (KIDs) for packaged
retail and insurance-based investment products (PRIIPs). The
S
Scale
A segment of Frankfurter Wertpapierbörse (FWB®, the Frankfurt
Stock Exchange), designed to enhance access to investors
and growth capital for small and medium-sized companies.
Securities lending
Transfer of securities by a lender in return for a fee – and usually
collateral – on condition that the borrower returns
also against
securities of the same kind, quality and amount to the lender at
the end of a fixed term.
Settlement
The completion of an exchange transaction, i.e. the transfer of the
money and traded securities from the seller to the buyer and vice
versa. Within Deutsche Börse Group, Clearstream is responsible
for this post-trading function.
Stress test
Stress tests are carried out in order to simulate extreme, yet plau-
sible, events for all material types of risk. Using both hypothetical
and historical scenarios, they simulate the occurrence of extreme
losses, or an accumulation of large losses, within a single year.
Swisscanto Funds Centre Ltd.
Swisscanto Funds Centre Ltd. operates the Swisscanto Fund Desk
at Zürcher Kantonalbank, which offers banks a one-stop fund
trading platform featuring straightforward order placement and
settlement, as well as custody services. Swisscanto Funds Centre
Ltd. has been part of Deutsche Börse Group’s IFS (investment
fund services) segment since 2018. The company was renamed
Clearstream Funds Centre Ltd. on 2 November 2018.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Glossary
N
Net debt / EBITDA ratio
P
Payback period
Performance indicator used in Deutsche Börse Group’s consolidated
The period until the cost of an investment or an asset is covered
balance sheet as from 2019. The Group’s target ratio is a maxi-
by the income generated with it. This measure is used in financial
mum of 1.75; this is the figure needed to achieve the minimal
assessment to prioritise and manage projects.
financial risk profile required for an AA rating under the S&P
Global Ratings methodology.
PRIIPs
Net present value (NPV)
The present (discounted) value of future payments. This measure
regulation requires PRIIPs manufacturers to publish KIDs on their
is used in financial assessments to prioritise and manage projects.
products in order to establish a common standard of information
to be provided to retail investors across the EU.
Net profit for the period attributable to
shareholders of Deutsche Börse AG
Prime Standard
The profit generated within a certain period that is attributable
Subsegment of the EU-regulated market of Frankfurter Wertpapier-
to shareholders; this measure is used to manage the results of
börse (FWB®, the Frankfurt Stock Exchange) for companies that meet
particularly high transparency standards. A listing in the Prime
Standard is a precondition for admission to one of Deutsche Börse’s
selection indices, such as DAX®, MDAX®, SDAX® orTecDAX®.
Revenue plus net interest income from banking business and
other operating income, less volume-related costs. Deutsche
Börse Group uses net revenue (and operating costs) to manage
US derivatives exchange providing price, credit and liquidity risk
(ECB) launched a programme to purchase sovereign bonds and
management to participants in the North American energy
other securities. The aim was to further boost market
liquidity
markets. Nodal Exchange belongs to Deutsche Börse Group’s EEX
and to fend off deflation by increasing the money supply. The ECB
(commodities) segment.
discontinued its QE programme in December 2018.
Quantitative easing. In March 2015, the European Central Bank
Personnel costs plus other operating expenses. Depreciation,
Deutsche Börse Group’s platform for reporting solutions. The Hub
amortisation, and impairment losses are presented separately
enables sell-side and buy-side institutions, corporates and trading
from operating costs in order to ensure transparent reporting
venues, to efficiently meet their current and future regulatory
of costs and earnings, and to increase comparability with
obligations. It supports clients in reporting to all relevant national
com petitors. Deutsche Börse Group uses operating costs (and
competent authorities across Europe and in fulfilling transparency
net revenue) to manage its
EBITDA.
Regulatory Reporting Hub
Over the counter, off-exchange. Describes transactions between
Short for “repurchase agreement”. An agreement between the
two or more trading parties that are not executed on a regulated
buyer and the seller of a security in which the seller promises
The name given to the
clearing of transactions that are not
Return on equity (RoE)
executed on a regulated market.
to buy back the security on a specified date. Repos are typically
used by banks as a temporary source of liquid funds.
The ratio of net profit for the period attributable to Deutsche
Börse AG shareholders to the average equity available to Deutsche
Börse Group in a fiscal year. This measure is used to determine
the yield generated by the equity deployed.
operations.
Net revenue
its
EBITDA.
Nodal Exchange
O
Operating costs
OTC
market.
OTC clearing
Q
QE
R
requirements.
Repo
T
T2S
TARGET2-Securities. ECB-operated platform for securities settle-
ment in central bank money, which allows banks to reduce
cross-border settlement costs and pool
migrated to T2S in February 2017. “TARGET” is short for “Trans-
European Automated Real-Time Gross Settlement Express
Transfer System”.
collateral. Clearstream
T7
IT architecture used for Deutsche Börse Group’s trading systems
(Eurex® Exchange, Xetra®, the European Energy Exchange and
to some extent also 360T®). It is also used at other exchanges such
as BSE (formerly known as the Bombay Stock Exchange) and
Helsinki Stock Exchange. T7 is part of the Group’s 7 Market Tech-
nology® series.
Tangible equity
Equity less intangible assets, a performance indicator used by
Deutsche Börse Group; the figure at Group level should be
positive. Tangible equity should not fall below €700 million at
Clearstream International S.A. or €400 million at Clearstream
Banking S.A., since in Deutsche Börse Group’s opinion, compli-
ance with these figures is compatible with an AA rating.
Target liquidity
The liquidity level that should be maintained at all times.
At Deutsche Börse Group, target liquidity is approximately
€150 million to €250 million; this corresponds roughly to the
operating costs for one quarter.
V
VDAX®
Volatility index indicating the fluctuations in the DAX® index
expected in the derivatives market (implied volatility).
Volatility
Measure of the extent to which the price of a security or an index
fluctuates around a mean value during a certain period of time.
360
361
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Acknowledgement | Contact | Registered trademarks
Acknowledgement
Contact
Investor Relations
E-mail
Phone
Fax
ir@deutsche-boerse.com
+49-(0) 69 – 2 11 – 1 16 70
+49-(0) 69 – 2 11 – 1 46 08
www.deutsche-boerse.com / ir _ e
Group Sustainability
E-mail
Phone
Fax
group-sustainability@deutsche-boerse.com
+49-(0) 69 – 2 11 – 1 42 26
+49-(0) 69 – 2 11 – 61 42 26
www.deutsche-boerse.com / sustainability
Group Communications & Marketing
E-mail
Phone
Fax
corporate.report@deutsche-boerse.com
+49-(0) 69 – 2 11 – 1 49 84
+49-(0) 69 – 2 11 – 61 49 84
Registered trademarks
C7®, DAX®, Deutsche Börse Venture Network®, ERS®, Eurex®,
Eurex Bonds®, Eurex Clearing Prisma®, Eurex Repo®, F7®, FWB®,
GC Pooling®, M7®, MDAX®, ÖkoDAX®, SDAX®, T7®, TecDAX®,
VDAX®, Vestima®, Xetra® and Xetra-Gold® are registered trade-
marks of Deutsche Börse AG. 360T® is a registered trademark of
360 Treasury Systems AG. EURO STOXX®, EURO STOXX 50®,
iSTOXX® and STOXX® Europe 600 Financials are registered trade-
marks of STOXX Ltd. TRADEGATE® is a registered trademark of
Tradegate AG Wertpapierhandelsbank.
Published by
Deutsche Börse AG
60485 Frankfurt / Main
Germany
www.deutsche-boerse.com
Concept and layout
Deutsche Börse AG, Frankfurt / Main
HGB Hamburger Geschäftsberichte GmbH & Co, Hamburg
Photographs
Thorsten Jansen (Portraits Joachim Faber
and Theodor Weimer, group picture Executive Board)
Jörg Baumann (Title)
Financial reporting system
Combined management report, consolidated financial statements
and notes produced in-house using firesys and SmartNotes.
Publication date
15 March 2019
The German version of this report is legally binding.
The company cannot be held responsible for any misunder-
standing or misinterpretation arising from this translation.
Reproduction – in total or in part – only with the written
permission of the publisher
We would like to thank all colleagues and service providers
who participated in the compilation of this report for their
friendly support.
Publications service
The annual report 2018 is both available in German and English.
Order numbers
1000–4833 (German annual report)
1010–4834 (English annual report)
The annual report 2018 of Deutsche Börse Group is available as
pdf on the internet:
www.deutsche-boerse.com / annual _ report
362
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | Acknowledgement | Contact | Registered trademarks
Acknowledgement
Contact
Published by
Deutsche Börse AG
60485 Frankfurt / Main
Germany
www.deutsche-boerse.com
Investor Relations
E-mail
Phone
Fax
ir@deutsche-boerse.com
+49-(0) 69 – 2 11 – 1 16 70
+49-(0) 69 – 2 11 – 1 46 08
www.deutsche-boerse.com / ir _ e
Group Sustainability
group-sustainability@deutsche-boerse.com
+49-(0) 69 – 2 11 – 1 42 26
+49-(0) 69 – 2 11 – 61 42 26
www.deutsche-boerse.com / sustainability
corporate.report@deutsche-boerse.com
+49-(0) 69 – 2 11 – 1 49 84
+49-(0) 69 – 2 11 – 61 49 84
Concept and layout
Deutsche Börse AG, Frankfurt / Main
HGB Hamburger Geschäftsberichte GmbH & Co, Hamburg
Photographs
Thorsten Jansen (Portraits Joachim Faber
Jörg Baumann (Title)
Financial reporting system
Combined management report, consolidated financial statements
and notes produced in-house using firesys and SmartNotes.
E-mail
Phone
Fax
E-mail
Phone
Fax
and Theodor Weimer, group picture Executive Board)
Group Communications & Marketing
Registered trademarks
C7®, DAX®, Deutsche Börse Venture Network®, ERS®, Eurex®,
Eurex Bonds®, Eurex Clearing Prisma®, Eurex Repo®, F7®, FWB®,
GC Pooling®, M7®, MDAX®, ÖkoDAX®, SDAX®, T7®, TecDAX®,
VDAX®, Vestima®, Xetra® and Xetra-Gold® are registered trade-
marks of Deutsche Börse AG. 360T® is a registered trademark of
360 Treasury Systems AG. EURO STOXX®, EURO STOXX 50®,
iSTOXX® and STOXX® Europe 600 Financials are registered trade-
marks of STOXX Ltd. TRADEGATE® is a registered trademark of
Tradegate AG Wertpapierhandelsbank.
Publication date
15 March 2019
The German version of this report is legally binding.
The company cannot be held responsible for any misunder-
standing or misinterpretation arising from this translation.
Reproduction – in total or in part – only with the written
permission of the publisher
We would like to thank all colleagues and service providers
who participated in the compilation of this report for their
The annual report 2018 is both available in German and English.
friendly support.
Publications service
Order numbers
1000–4833 (German annual report)
1010–4834 (English annual report)
The annual report 2018 of Deutsche Börse Group is available as
pdf on the internet:
www.deutsche-boerse.com / annual _ report
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Further information | About this report
About this report
Deutsche Börse Group’s 2018 Annual Report not only documents what
happened in fiscal year 2018, but also provides a solid summary of
how the company defines and is implementing key action areas for its
overview of key sustainability
sustainability profile. In addition, our
aspects shows how Deutsche Börse Group is helping achieve the associ-
ated UN Sustainable Development Goals (SDGs).
Our reporting of sustainability information and key performance indicators
complies with the Global Reporting Initiative (GRI) Standards (Core option).
A comprehensive overview of all GRI indicators (GRI index) can be found at
www.deutsche-boerse.com > Sustainability > Reporting > GRI
Principles of sustainability reporting
Our aim in our sustainability reporting is to achieve the highest possible
degree of clarity and transparency. The combined management report
contains a separate section with a combined non-financial statement in
accordance with sections 289b and 315b of the Handelsgesetzbuch
(HGB, German Commercial Code). In line with this, the non-financial facts
and figures published in it generally refer to Deutsche Börse Group as a
whole. Where the information on Deutsche Börse AG differs from that on
Deutsche Börse Group this is specifically mentioned. In addition, topics
that are specific to certain locations and locally managed sustainability
activities are identified as such.
Verification of non-financial key performance indicators
KPMG AG Wirtschaftsprüfungsgesellschaft, an independent external auditor,
reviewed the content of the combined non-financial statement. The inde-
pendent audit opinion on the content of the combined non-financial statement
can be found in KPMG’s auditor’s report on Deutsche Börse AG’s (con-
solidated) financial statements and combined management report as at
31 December 2018. This is reproduced on
page 348 of this annual report.
The separate limited assurance review opinion on all sustainability infor-
mation contained in the GRI index can be accessed online at
deutsche-boerse.com > Sustainability > Reporting > Annual report.
www.
362
363
Financial calendar
29 April 2019
Publication Q1 / 2019 results
8 May 2019
Annual General Meeting
22 May 2019
Investor Day
24 July 2019
Publication half-yearly financial report 2019
28 October 2019
Publication Q3 / 2019 results
Deutsche Börse AG
60485 Frankfurt / Main
Germany
www.deutsche-boerse.com