13,274
Resilient, state-of-the-art IT systems provide the foundation for virtually all
capital markets services. Deutsche Börse Group develops and operates
IT systems for trading and clearing as well as for settlement, custody and
market data services.
Our brands: Clearstream, Eurex RepoⓇ
Through Clearstream's Global Liquidity Hub, Deutsche Börse Group
offers financial institutions optimal collateral and liquidity management.
Due to its links to depository banks, trading platforms, central counter-
parties and other national central securities depositories, the open
architecture provides real-time access to a rich pool of liquidity.
Technology
9
Collateral and liquidity management
6
Our brands: STOXX®, DAX®
C4
Through STOXX Ltd., Deutsche Börse Group disseminates indices
tracking markets around the world. The index families are differenti-
ated by country, region, product type, investment theme or strategy;
customised indices facilitate tailor-made market analysis in real time.
Among the Group's benchmark products are the EURO STOXX 50Ⓡ
index and the DAX® index, which track the performance of the
50 industry-leading companies in the eurozone and the 30 largest
German companies, respectively.
8
Our brands: Clearstream, LuxCSD
Once assets have been settled correctly, they are held in safe custody.
Clearstream administers assets throughout the period for which they are
held, offering services such as the handling of corporate actions and
dividend payments across all types of securities. Moreover, comprehen-
sive reporting and the segregation of collateral margins allow market
participants to efficiently comply with their regulatory obligations.
Custody
5
Our brand: Deutsche Börse
Private and institutional investors make decisions based on market data,
creating new information in turn. Deutsche Börse's most prominent data
products include (real-time) price data generated from its various trading
systems, as well as historical market data, plus analytical indicators from
trading at its cash and derivatives exchanges.
Our brands: Clearstream, LuxCSD, REGIS-TR
Indices
Following trading and clearing, settlement involves the accurate book-
ing of individual items, with the exchange of securities against money.
The correct booking of securities transactions to individual client
securities accounts also takes place during this process. Clearstream,
Deutsche Börse Group's provider of post-trading services, is responsi-
ble for efficient global securities settlement.
Financial report 2016
C2
C3/4
152 Consolidated income statement
statements/notes
153
Report of the Supervisory Board
8
The Supervisory Board
7
The Executive Board
Contents
Letter from the CEO
151 Consolidated financial
Supervisory Boards
2 Executive and
Corporate governance report
governance
146
145 Corporate
Deutsche Börse Group: key figures
Deutsche Börse Group: an overview
2
Consolidated statement of comprehensive
income
Market data
Settlement
1 Pre-IPO and listing
60
3
Our brands: Deutsche Börse, Deutsche Börse Venture Network®,
DB1 Ventures, Börse Frankfurt
Start-up companies often enter into a decisive phase when their busi-
ness requires liquid funds in order to expedite growth. Deutsche Börse
Venture NetworkⓇ supports these. In addition, Deutsche Börse invests
in attractive fintech companies via DB1 Ventures. When they list at
the Frankfurt Stock Exchange, companies of all kinds and sizes can
raise equity or debt capital - SMEs or large enterprises, domestic or
international.
8
7
5
2 Trading
2
4
Pre-IPO and listing
1
Deutsche Börse Group: an overview
22
C2
Due to rounding, numbers presented throughout this report may not add up precisely to the totals provided and percentages may not precisely reflect the
absolute figures.
1) Figures for 2015 without consideration of ISE, which represents a discontinued operation due to its disposal as at 30 June 2016 2) Clearstream and Eurex
segments 3) Proposal to the Annual General Meeting 2017 4) Amount based on the proposal to the Annual General Meeting 2017 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) Adjusted for non-recurring effects 7) Adjusted for the costs of mergers and acquisitions and of efficiency programmes 8) Adjusted for costs largely related
to criminal proceedings against Clearstream Banking S.A. in the US 9) Closing price on preceding trading day 10) Intraday price 11) Ratio of the market
capitalisation of companies listed in the Prime Standard to the market capitalisation of all companies listed on Frankfurter Wertpapierbörse (FWBⓇ, the Frankfurt
Stock Exchange)
1
7
3 Clearing
5 Custody
4
C3
83
Our brands: Eurex Clearing, European Commodity Clearing
Eurex Clearing AG and European Commodity Clearing AG,
Deutsche Börse Group's clearing houses, act as central counter-
parties, i.e. as buyer to each seller, and as seller to each buyer,
to minimise credit default risk. In this manner, we reduce risk
positions and achieve financing and capital efficiency gains for
our customers. Deutsche Börse Group offers efficient clearing
of various kinds for all types of transactions.
Clearing
3
As a diversified exchange organisation, Deutsche Börse Group's
products and services cover the entire value chain in the financial
services sector. Find further details and background information
in our Annual 2016.
4 Settlement
Deutsche Börse Group covers the entire value chain in securities,
foreign-exchange and derivatives trading.
Deutsche Börse operates regulated markets for equities, exchange-traded
products (ETPs), bonds and numerous other products for the trading
venues Xetra® and Börse Frankfurt. The Group also facilitates trading
of derivatives. At European Energy Exchange, energy, energy-related
products and commodity products are traded. 360T operates a trading
platform for financial instruments such as foreign-exchange, money
market or interest rate products.
Trading
2
9 Technology
8 Indices
7 Market data
6 Collateral and liquidity management
9
Our brands: Xetra®, Börse Frankfurt, Tradegate, Eurex®,
European Energy Exchange, 360T®
99.930
154
17 Combined
Ladies and Gentlemen,
Dear shareholders,
Frankfurt/Main, 10 March 2017
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Letter from the CEO
Carsten Kengeter
Chief Executive Officer
Letter from the CEO
Deutsche Börse Group financial report 2016
2
We look back on 2016 as a very successful year for your company, Deutsche Börse AG. Net revenue
rose by 8 per cent year-on-year. At the same time, we achieved efficiency enhancements - keeping our
costs under control. As a result, net profit for the period attributable to Deutsche Börse AG shareholders
was up 14 per cent, very clearly outperforming the increase in net revenue. We therefore once again
fulfilled our forecasts for growth and results, which projected revenue growth of between 5 and
10 per cent, and earnings rising between 10 and 15 per cent. As shareholders of Deutsche Börse AG,
we want you to participate in this excellent performance. It is our intention therefore, at the Annual
General Meeting 2017, to propose raising the dividend from €2.25 to €2.35 per share. This is equivalent
to a distribution ratio of 54 per cent of adjusted net profit for the period attributable to Deutsche Börse AG
shareholders, approaching our target distribution ratio of approximately 50 per cent – with rising profit.
Financial calendar
Facts and figures of Deutsche Börse AG shares
C7
About this report
C6
Index of charts and tables
C5
Corporate governance declaration
136
C8
Acknowledgements/contact
As good as these results are, given the difficult market conditions, we can get better still. Specifically,
we want to diminish the dependency of the business upon cyclical fluctuations in our market environment.
This is especially in your interests, as investors – likewise, it is in the interests of our clients, to whom
we are offering a constantly broadening range of products and services, with increasing reliability. And
finally, it is in the interests of the financial markets on which we are active – predominantly in Frankfurt,
the location of our headquarters. This is why we aim to further strengthen Deutsche Börse Group's
growth potential. We want to realise our vision of turning Deutsche Börse Group into the global market
infrastructure provider of choice - being top-ranked in all our activities.
Our year 2016
Carsten Kengeter
Chief Executive Officer
ty
In 2016, we have once again delivered on our promise of growth - under difficult conditions. Please
refer to our combined management report for extensive information and comprehensive analyses. First
and foremost, this is the achievement of Deutsche Börse Group staff, whose competence I appreciate
enormously, and for whose commitment I am grateful. True to our motto of "Accelerate", we shall con-
tinue on our path to strong growth, through making use our own resources as well as through external
measures. We have set ourselves ambitious targets for the current financial year 2017 as well. I would
like to thank all those who are supporting us on this journey – especially you, our shareholders.
Moreover, we are actively assuming responsibility for Frankfurt as a financial centre. To give you just
one example: over each of the last few years, we have invested significant nine-digit euro amounts
here in Frankfurt - creating well over one hundred new jobs last year in particular. We will persevere
with these investments. Yet we will only be able to do so successfully if we take a leading position
in future global competition.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Letter from the CEO
We are committed to a Group-wide sustainability strategy. Sustainability should be an automatic
consideration when allocating capital. At Deutsche Börse, we support sustainable growth - with the
necessary sense of perspective. That is why we are a member of the United Nations Global Compact,
promoting implementation of its principles in the areas of human rights, labour standards, environmental
protection and anti-corruption. Our integrated reporting creates transparency on how we identify
material opportunities and risks in these areas, and what specific measures we are taking in this respect.
Committed to sustainability
of clearing and collateral management. We are thus focusing on those parts of our product range where
we currently see good prospects for efficiency gains through the application of blockchain.
-
-
-
At the same time, we will make acquisitions where we see potential for future growth. Our plan is for
Frankfurt to become the leading European hub for fintechs innovative enterprises in the financial
services area. We are making our contribution to these endeavours. We have expanded our pre-IPO
services under the heading "Pre-IPO & Growth Financing": over a medium-term horizon, the harmo-
nised initiatives in this area are set to lead to initial public offerings as well. One element in this context
is the FinTech Hub, which supports start-ups right here at the Frankfurt financial centre. Deutsche Börse
Venture NetworkⓇ is designed for companies in their growth phase, which require more sizeable follow-up
financing. This network brings enterprises together with international investors. Through DB1 Ventures,
we invest in fintech enterprises - in order to further modernise Deutsche Börse, and keep Frankfurt at the
forefront as a financial centre. Our overarching objective is to contribute towards the building of an
ecosystem for growth in Germany and in Europe. This is about growth and job creation - about good
ideas, which will evolve into good business.
_
Perhaps the most important objective of "Accelerate" is to facilitate growth through scalability. As
I mentioned, we achieved very good results in 2016 - but we shall strive for further improvements to
performance. We will have to continue demonstrating our ability, every single year, to boost net revenue
without costs increasing in the same proportion. To achieve this goal, we are also improving our capital
allocation: we will divest businesses where we do not see scope for reaching the number one or two
position over a medium-term horizon. This is why during the year under review, we not only sold Inter-
national Securities Exchange, but also the Infobolsa and Market News International information services
providers.
Deutsche Börse Group financial report 2016
4
3
In 2016, we have done a lot to achieve this goal. Within the framework of our "Accelerate" growth
strategy, we have commenced a realignment of this company, heralding a culture change. We are going
to turn Deutsche Börse Group from a client-oriented enterprise into a client-centric enterprise. For this
purpose, we realigned the distribution of responsibilities within the Executive Board right at the beginning
of the year under review, creating new Group functions.
We use the opportunities offered by state-of-the-art technical development in many of our growth
projects. We are bundling the various measures and initiatives under the heading "Exchange 4.0", with
the objective of creating a client-centric exchange - an exchange that will provide its clients and part-
ners with even more efficient market access, an exchange offering a uniform services platform, and
an exchange that provides innovative services. Via our shareholding in Digital Asset Holdings LLC,
for example, we are driving an innovative technology which - over the longer term has the potential
to trigger a real quantum leap for the exchange industry: blockchain. In cooperation with Deutsche
Bundesbank, we showcased a prototype for securities settlement based on blockchain technology in
November 2016. In a nutshell, blockchain comprises a decentralised electronic register of all transac-
tions. This register is openly disclosed and constantly updates itself with transactions ("blocks") that
validate one another. We are working on two additional and very promising – prototypes in the area
Consolidated balance sheet
294
113
Report on post-balance sheet date events
64
Other disclosures
257
Report on economic position
33
205
Deutsche Börse AG shares
287
32
Fundamental information about the Group
18
Basis of preparation
160
Consolidated statement of changes in equity
158
156 Consolidated cash flow statement
management report
194
Remuneration report
Consolidated income statement disclosures
Responsibility statement by the
Glossary
290
(Disclosures based on the HGB)
Deutsche Börse Group worldwide
289
Deutsche Börse AG
107
Report on expected developments
Consolidated balance sheet disclosures
100
95
Auditor's report
288
Risk report
73
Executive Board
Non-financial key performance indicators
65
Report on opportunities
- 12
16.7
14.8
Dividend per share
Performance indicators
- 10
2,546.5
2,284.7
€m
25
3,695.1
€
4,624.5
-17
14,386.9
11,940.4
€m
Non-current interest-bearing liabilities
Equity
Non-current assets
Consolidated balance sheet
€m
8
2.353)
4
42
46
%
EBIT margin, based on net revenue
-7
27
25
%
2.25
Personnel expense ratio (staff costs / net revenue)
4,460¹)
4,731
Employees (average annual FTEs)
-2
55
544)
%
Dividend payout ratio
6
10
796.6
€m
66
8
2,220.3¹)
50.62)
84.0
€m
thereof net interest income from banking business
2,388.7
€m
Operating costs
Net revenue (total revenue less volume-related costs)
Change
in %
2015
2016
Deutsche Börse Group: an overview
Deutsche Börse Group: key figures
www.deutsche-boerse.com
DEUTSCHE BÖRSE
GROUP
Financial report
2016
Consolidated income statement
856.6
€m
- 1,283.2¹
Cash flows from operating activities excluding CCP positions
Consolidated cash flow statement
17
3.31¹)
3.87
€
Earnings per share (basic)
18
- 1,317.4
613.3¹)
€m
Net profit for the period attributable to Deutsche Börse AG shareholders
18
935.6")
1,108.2
€m
Earnings before interest and tax (EBIT)
3
722.1
Tax rate
%
27.0
transparency standards 11)
Proportion of companies reporting in accordance with maximum
Transparency and stability key figures
- 14
598.6
-1
13,075
515.9
€bn
Number of calculated indices
Global Securities Financing (average outstanding volume for the period)
Value of securities deposited (annual average)
Clearstream
- 16
1,635.7
1,377.0
€bn
3
1,672.6")
€bn
1,727.5
Number of sustainable index concepts
System availability of derivatives market trading system (T7Ⓡ)
€trillion
0
99.962
%
0
99.999
99.999
%
System availability of cash market trading system (Xetra®)
186
5
11,403
11,975
100
0
91
91
%
Market risk cleared via Eurex Clearing (gross monthly average)
35
m
Trading volume (single-counted)
Frankfurt Stock Exchange and Tradegate
Opening price (as at 1 Jan) 9)
Deutsche Börse shares
9
23.21)
25.3
%
Interest coverage ratio
-21
High 10)
1.97)8)
Gross debt EBITDA
-5
206)
196)
%
Return on shareholders' equity (annual average) 5)
4
26.0
1.5
Low10)
€
81.39
Xetra®,
Number of contracts
Eurex®
Market indicators
Closing price (as at 31 Dec)
-5
81.39
77.54
€
13
58.65
67.19
€
-6
87.41
83.00
€
37
59.22
5
Executive Board of Deutsche Börse AG, from left to right: Jeffrey Tessler, Andreas Preuss, Hauke Stars, Carsten Kengeter, Gregor Pottmeyer
Our brands: Deutsche Börse, 7 Market Technology®:
C7, F7, M7®, N7®, T7®
■ For collateralised and uncollateralised
customer credits
■ Customer default
■ Payment obligations
■ Repayment of customer deposits
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
Under its terms and conditions, Eurex Clearing AG only enters into transactions with its clearing members.
Clearing mainly relates to defined securities, rights, derivatives and emission allowances 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 mem-
bers to post collateral, Eurex Clearing AG mitigates its clients' credit risk exposure.
To date, no default by a borrower with a secured credit line has resulted in material financial losses.
Deutsche Börse Group continues to view the probability that one of its counterparties could become
insolvent and that this could lead to losses for the Group as low. 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 might
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 material loss for the Group. The probability that the default of a counterparty to an uncol-
lateralised 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 which each clearing member will
have to contribute in this manner is the total amount such 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. The companies do this in the
same way: they determine 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 allocates a specific deduction to each.
The total haircut is calculated by adding together the individual margins for the risk factors concerned.
In addition, in order to identify potential concentration risks from individual counterparties, Clearstream
analyses the VaR at the level of the Clearstream Holding group. For this purpose, a credit risk VaR is
calculated at the level of individual counterparties and compared with the overall credit risk VaR. Due
to its business model, Clearstream focuses almost exclusively on financial sector customers. However,
there is no material concentration of credit risk either on individual counterparties or on individual countries.
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.
89
90
Deutsche Börse Group financial report 2016
Safety for both participants and the clearing house
Each clearing member must prove that it has capital equal to at least 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. It applies an additional haircut to collateral from issuers in high-risk countries or
excludes them from being furnished as collateral altogether. 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 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 Clear-
ing AG checks regularly whether the margins match the requested confidence level: initial margin is cur-
rently calculated using the legacy risk-based margining method, and the new Prisma method, which is
already available for all derivative contracts traded. The new 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, 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 contributes to a clearing fund,
with the contributions based on its individual risk profile. This fund is jointly liable for the financial con-
sequences of a default by a clearing member to the extent that this cannot be covered by the member's
individual margin, and its own and Eurex Clearing AG's contributions to the clearing fund. Eurex Clear-
ing AG uses regular stress tests to check whether its clearing funds match the risks. This involves sub-
jecting 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, when exceeded, trigger an immediate adjustment to the size of the clearing fund
if necessary. The following lines of defence are available for the case that a clearing member is unable to
meet its obligations to Eurex Clearing AG due to a delay in performance or a default:
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
■ 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 2016, collateral amounting to €49,431.6 mil-
lion 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 €432 million as at 31 December 2016.
■ 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 €100 million as at 31 December 2016.
■ Only then would the other clearing members' contributions to the clearing fund be used proportionately.
As at 31 December 2016, aggregate clearing fund contribution requirements for all clearing members
of Eurex Clearing AG amounted to €3,002.7 million. After the contributions have been used in full,
Eurex Clearing AG can request additional contributions from each clearing member, which can be
maximum 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 realised together with
the additional clearing member contributions, on a pro-rata basis.
Liquidity risk
■ Next, the portion of Eurex Clearing AG's equity which exceeds the minimum regulatory equity would be
realised.
■ For pension provisions
Market risk
Credit risk
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
In an increasingly competitive global market environment, know-how and confidential company infor-
mation bear the potential of a 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. In this context, a world-wide travel security programme was
established, supported by a travel-tracking system.
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 are approved by Deutsche Börse AG's Chief Financial Officer.
The compliance function, in cooperation with the individual business segments, has the task of protect-
ing the Group against a variety of monetary and nonmonetary risks, such as reputational damage in the
markets it serves, in the view of supervisors, or the general public. While endowed with appropriate
autonomy from the business units, the compliance function nonetheless fulfils its mandate as an enabler
of business to focus on the customers and markets the Group wishes to serve, while taking informed
steps to mitigate compliance risks.
Deutsche Börse Group pursues an enterprise-wide approach to its compliance function, ensuring that
applicable laws and regulatory requirements are followed with respect to individual legal entities, while
aligning dedicated legal entity compliance and regulatory personnel through a common reporting structure
to the Group Chief Compliance Officer. Wherever efficient and practical, the Group pursues the development
of common compliance policies and supporting tools. As an example of adopting to evolving requirements,
policies and procedures were revised in 2016 to implement provisions of the EU Market Abuse Regula-
tion, which are of natural interest to the Group as a provider of reliable financial market infrastructures.
As a further step in the enhancement of Group compliance over the past few years, in the course of 2016,
the Group significantly increased its dedicated compliance personnel in major offices around the world.
The compliance officers closely align their work with the business areas and other control functions to
form a solid second line of defence. Further investments continue to be made into compliance IT systems
that provide for a more consistent and data driven approach to risk mitigation, with a current focus on
review of trends and patterns as well as statistical anomalies that could be indicators of compliance risk.
Deutsche Börse Group has significantly enhanced its due diligence procedures with respect to its custom-
ers, members and counterparties, and in 2016, completed an enhanced review of all pre-existing relation-
ships. In connection with evolving regulatory expectations, in particular the pending implementation of
the EU 4th Anti-Money Laundering Directive, the Group is developing, where practicable, more central-
ised approaches to compliance risk management of customers served by multiple Group legal entities.
Since its products and services as a provider of financial market infrastructures are often focused on
other financial intermediaries at the wholesale level, its cooperative approach seeks to raise the stand-
ards throughout the industry and enhance the integrity of financial markets for all participants. Among
the notable efforts that continue to be championed by Deutsche Börse Group and Clearstream is the
development by the International Securities Services Association (ISSA) of the Financial Crime Compliance
Principles for Securities Custody and Settlement together with practical guidance for implementation.
87
88
Deutsche Börse Group financial report 2016
Senior Group Compliance officers are active participants in national and international industry groups
such as this seeking to define and promote adoption of consistent industry standards.
The compliance function will continue its efforts to strengthen the compliance culture throughout the
Group. It pursues a best-in-class approach and contributes to the business strategy through an advisory
role to develop solutions for our customers in the ever evolving financial regulatory environment.
Financial risks
Deutsche Börse Group classifies its financial risk into credit, market and liquidity risk (see the □ “Finan-
cial risks 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 EC; see note 36 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.
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 secured in most
cases by collateral deposited by the market participants. Moreover, the Group regularly evaluates the reli-
ability 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 lend-
ing 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 A+ 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 grants credits to its customers in order to make settlement more efficient. This type of credit
business is, however, fundamentally different from the classic lending business. First, credit is extended
solely on a very short-term basis, normally for less than a day. Second, it is largely collateralised and granted
to clients with high creditworthiness. Furthermore, the credit lines granted can be revoked at any time.
Financial risks at Deutsche Börse Group
Financial risks
■In securities lending
■ Participation in clearing fund
■ Outstanding liabilities
■ For securities
Finally, the remaining minimum regulatory equity of Eurex Clearing AG would be drawn upon.
Compliance
As at 31 January 2017, Eurex Clearing AG increased its contribution to the clearing fund by €50 mil-
lion, to €150 million.
Additional external risk factors emerged for Deutsche Börse Group's business in the past financial year.
Despite the increasing threat of cyber crime, overall operational risk declined, given that availability risks
decreased. All in all, the Group's risk profile remained stable. Deutsche Börse Group's risks were covered
by sufficient risk-bearing capacity at all times during the reporting period, i.e. the allocated risk appetite
limits were complied with.
As at 31 December 2016, the Group's EC amounted to €2,056 million, a 5 per cent decrease year-on-
year (31 December 2015: €2,159 million). In contrast, the available risk-bearing capacity increased by
27 per cent to €3,810 million year-on-year (31 December 2015: €2,999 million). EaR as at 31 De-
cember 2016 were €678 million, while risk appetite was €1,230 million, based on the adjusted budg-
eted EBIT in 2016.
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 “Risk strategy and risk manage-
ment" section.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on opportunities
Outlook
The Group continually assesses its risk situation. Based on stress tests, on the required EC, which was
calculated, and 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 2017, the aim is to further strengthen Group-wide risk management. For instance, the Group plans
to concentrate on the digitisation of information in order to improve quality and efficiency. In addition,
the data made available with these efforts will be used to identify risks and opportunities, and to
improve our services. Moreover, the Group launched an initiative aimed at a streamlined cooperation
between the different control functions through the Group-wide standardisation of documentation and
control processes. The Group also plans to extend its business continuity measures in the event of
emergencies (or crises), to include additional functions over and above business-critical units.
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 both on an ongoing basis throughout the
year in the individual business areas and systematically at Group level as part of its annual budget plan-
ning process. Suggestions from the Group's business areas for new products, services or technologies
serve as the starting point. The process begins with a careful analysis of the market environment: this
considers both customer wishes and factors such 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 expenses and reve-
nues are projected in detail for multiple years.
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 taken as part of
the annual budget planning process. The initiatives that, after taking into consideration the associated
risks, add the most value and that can be financed from the budget allocated are selected by the
Executive Board and included in the budget.
Budgeting for growth initiatives involves reserving a full-year budget comprising expenditures and
expenses for each selected growth initiative included in the investment portfolio. The Group Project
Committee (GPC) monitors progress of growth initiatives throughout the year, checking and overseeing
projects on a regular basis. In this context, the GPC focuses on whether defined milestones have been
reached, on the potential impact of changes in the competitive environment on commercial performance,
and on the utilisation of budgets compared to planning.
95
96
Deutsche Börse Group financial report 2016
Where budget adjustments are required during the course of the year, project management must first
submit a corresponding application to the GPC. Following a discussion of the application, the GPC will
submit a recommendation for a resolution to the Group Management Committee (GMC), which also
comprises the members of Deutsche Börse AG's Executive Board. On this basis, the GMC will decide
upon whether to increase the budget. The GPC may also recommend adjustments to full-year budgeted
funds, to bring them into line with general business developments. Where needed, this also provides for
the opportunity to approve new growth initiatives during the course of the year.
Furthermore, supervision of growth initiatives is supported by regular reporting. GPC and GMC receive a
monthly report on the status and progress of initiatives that are currently being implemented. This report
is coordinated by central functions and created in cooperation with the individual projects from the busi-
ness areas and compares planned costs with actual budget utilisation. In addition, the financial planning
is adjusted, forecasts are updated and changes to the scope of the project are made transparent. Checks
are made to establish whether milestones have been reached and project-specific risks, and the counter-
measures taken are described.
Organic growth opportunities
When assessing organic growth opportunities, Deutsche Börse Group makes a basic distinction between
structural and cyclical opportunities. Structural opportunities arise, for example, as a result of regulatory
changes or new customer requirements, and can be influenced directly by the company. Cyclical oppor-
tunities, which cannot be influenced directly by the company and are driven by macroeconomic changes.
Structural growth opportunities
The focus of Deutsche Börse Group's structural growth potential is on product- and service-driven initia-
tives designed to satisfy new client needs as well as regulatory requirements. In order to ensure the Group
is optimally positioned and in order to explore new opportunities, the Group has gradually realigned its
organisational structure since announcing the "Accelerate" growth programme in 2015. Moreover, it reg-
ularly examines options for growth in high-potential asset classes, products or services - organically
or through external acquisitions and cooperations.
Organisational measures supporting the Group's growth ambitions include the global coordination of sales
activities, as well as cross-divisional product development. In addition, Deutsche Börse AG realigned the
distribution of responsibilities in its Group Executive Board at the beginning of 2016 - placing client focus
at the heart of its organisation, as announced upon the launch of "Accelerate". With the steps taken,
Deutsche Börse Group has bundled related areas in Executive Board portfolios, thus accelerating process
flows and simplifying them - in the interest of the Group's clients. Within the framework of "Accelerate"
and the related organisational changes, the Group anticipates realising potential for additional new busi-
ness - especially through bundling Group-wide product development as well as sales activities. These
opportunities will develop over time, which is why they have not been quantified in expected additional
■ In addition, 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
the payments made already. Third parties are not entitled to any rights under the Letter of Comfort.
revenue.
Summary
Deutsche Börse AG's Executive Board is responsible for risk management throughout the Group and regu-
larly reviews the entire Group's risk situation. Its summary of the situation in 2016 is given here, and is
followed by a brief look at the coming financial year.
■ For collateralised and uncollateralised
cash investments
Project risk could result from the implementation of ongoing projects (such as the launch of new products,
processes or systems) and could have a material impact on one or more of the three other risk categories
(operational, financial and business risk). Project risk is not broken down further. Such risks are evalu-
ated by the project owner and GRM and are already taken into account in the initial phase of substantial
projects. For example, the implementation of the TARGET2-Securities settlement system is an important
project for Clearstream at present. The realisation of the projected revenue synergy potential identified
with the acquisition of 360T, the migration of equity trading onto the T7 market architecture as well as
the activities in connection with regulatory changes, especially MiFID II, are other important projects.
Ultimately, project risk has an operational, financial or business impact, which is why it is quantified as
part of these risk types. Ongoing monitoring and controls ensure that project delivery risks are contin-
ually analysed and evaluated.
In the event of default by a clearing member, Eurex Clearing AG triggers the Default Management Pro-
cess (DMP). Its purpose is to rebalance the CCP, and thus to protect the non-defaulting participants from
any negative consequences resulting from the default. Every product cleared by Eurex Clearing AG is clearly
assigned to a so-called liquidation group. Products within a single liquidation group share similar risk
characteristics, and can be liquidated using the same process if a clearing member defaults. The DMP
is conducted at liquidation group level; all positions held by the defaulted clearing member and belonging
to the same liquidation group are jointly transferred to other participants via an auction or an independent
sale. The clearing fund is segmented along these liquidation groups, based on their respective margin
requirements. Should the cost of liquidation exceed the defaulter's resources, Eurex Clearing AG will
always make a contribution itself before the mutual clearing fund is utilised. During the DMP, Eurex Clear-
ing AG can convene committees of market experts (default management committees) to advise on and
support all liquidation activities.
Overall assessment of the risk situation by the Executive Board
91
Deutsche Börse Group financial report 2016
Eurex Clearing AG has dealt with four defaults of clearing members to date: Gontard & MetallBank
(2002), Lehman Brothers (2008), MF Global (2011) and Maple Bank (2016). In all cases, the non-
defaulters were fully protected, as the liquidation costs were met without resort to Eurex Clearing AG's
own capital or the clearing fund. A substantial portion of the defaulters' margin remained unused and
was returned to them.
Deutsche Börse Group reduces its risk when investing funds belonging to Group companies and client
funds by distributing investments across multiple counterparties, all with a 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 invest-
ment 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 com-
panies' 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 cal-
culated 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 2016, 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 (EC, 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 in the operating business results from interest rate or currency fluctuations. Deutsche Börse
Group measures this risk using earnings-based sensitivity analyses for extreme interest rate or exchange
rate fluctuations. It avoids open currency positions whenever possible. Additional market risk could result
from Deutsche Börse Group's ring-fenced pension plan assets (Contractual Trust Agreement, Clearstream
pension plan in Luxembourg). The Group reduced its market risk exposure by deciding to invest a pre-
dominant proportion of the pension fund on the basis of a value preservation mechanism. The probabil-
ity of a significant market risk occurring in this context is low, and the Group also considers the impact
to be low.
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 enough liquidity to meet 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 exclusively in the short term in order to ensure that they
are available. Short-term investments are also largely secured by liquid bonds from first-class issuers.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
Deutsche Börse AG has access to short-term external sources of financing, such as agreed credit lines
with individual banks or consortia, and 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.
92
Due to its role as a central counterparty, Eurex Clearing AG has strict liquidity guidelines and its invest-
ment 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.
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 on-
going access to the liquidity facilities at Deutsche Bundesbank and Banque Centrale du Luxembourg.
Deutsche Börse Group financial report 2016
94
93
Business risk includes the risk that competitors, such as the CurveGlobal, Chicago Mercantile Exchange
(CME) and Intercontinental Exchange (ICE) derivatives exchanges or the Nasdaq OMX stock exchange or
Euronext, 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 to be relatively low.
If a state were to leave the eurozone or if a state were to become insolvent, this could mean that government
bonds would not be redeemed or only would be redeemed in part. This might have a negative influence
on Deutsche Börse Group's customers and reduce their trading volume in the future. Currently, the Group
still views the probability of this risk occurring as low, and the possible consequences as medium.
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 there-
fore 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 moni-
tored constantly by the divisions. Their weighting for the Group accounts for about 14 per cent of the
total risk. Business risk may result in revenues lagging budget projections or in costs being higher.
Business risk
To consider different scenarios, regular stress tests are being carried out to examine the liquidity risk ex-
posure of Clearstream and Eurex Clearing AG. Risks identified in the course of stress tests carried out
during the 2016 financial year were analysed further, and corresponding risk-reduction measures initiated.
The key liquidity risk for Deutsche Börse Group lies in customer default. If a clearing member of Eurex
Clearing AG defaults, its member position is liquidated. If a Clearstream customer defaults, the gener-
ally collateralised and 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, with 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 their liquidity needs which
would result from a default of their two biggest clients, and maintain sufficient liquidity in order to cover
the liquidity needs determined.
-
Additional business risk may arise from regulatory requirements, or from the economic environment. For
example, the introduction of a financial transaction tax, which continues to be supported by ten Euro-
pean states, might have a negative impact upon Deutsche Börse AG's business activities. Moreover, the
UK's exit from the European Union might negatively affect our customers' trading activity. A sustained
period of weak trading activity on the market also represents a risk to the Group. Deutsche Börse Group
simulates different scenarios in stress tests. These take into account the simultaneous occurrence of dif-
ferent business risks, such as the negative effects of stronger competition combined with a simultaneous
loss of business due to new regulations.
Project risk
104
Eurex will continue to invest systematically in expanding its product offering in 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 not settled through an exchange or
103
As well as enhancing its cash market offering, the company will continue to closely track changes in the
competitive environment for the European cash markets. As in the past, it considers itself well posi-
tioned 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 for equities clearing. However, the stronger competition in the cash market means that
further shifts in the market shares of all competitors cannot be ruled out.
clearing house. We are expecting positive developments along these lines due to regulatory requirements
determining that OTC derivative transactions must be settled via central counterparties. This requirement
has entered into force during 2016. Consequently, the Group expects this initiative to deliver additional
net revenue for the first time in the 2017 financial year, and significant net revenue in the medium to
long term. Looking at the once again very positive development of EEX group's trading volumes during
the year under review and the continued positive market environment for trading in power and gas products,
the Group expects further structural growth in business activity during the forecast period, e.g. by gaining
additional market share at the expense of OTC energy markets. Moreover, the Group expects rising demand
for multi-bank platforms to further boost business activity at the foreign-exchange (FX) platform 360T®.
In addition, we plan to include clearing services in the value chain of fully electronic FX trading during the
2017 financial year, in order to realise the revenue synergies projected in the context of this acquisition.
Xetra segment
As in the past, net revenue in the Xetra cash market segment will continue to depend heavily on stock
market cyclicality and volatility. Trading volumes could rise during the forecast period, driven by a grad-
ual improvement in economic growth as well as a rise in investor confidence. Furthermore, the company
expects stock market volatility to increase, at least temporarily, making further positive contribution to
business development.
In the past year, cyclical factors (see the ☑“Future development of results of operations" section for
details) led to an overall rise in derivatives trading volumes. Higher stock market volatility since the end
of 2014 resulted in a significant rise in trading volumes, especially in equity index derivatives. Deutsche
Börse Group believes that structural growth factors will remain the dominant feature over the long term,
and that they will positively influence trading volumes in all product segments (see the report on oppor-
tunities for further details). In the short term, a positive economic environment would result in increasing
trading volumes, in particular for equity index derivatives - whilst the present direction of monetary policy,
especially in the US, would have positive effects on interest rate derivatives trading.
Clearstream segment
Deutsche Börse Group financial report 2016
Eurex segment
growth range, at around 10 per cent, operating costs would be permitted to rise by up to 5 per cent
per annum during the period under review and the following years for instance, for the purpose of in-
creasing investment in growth initiatives. Operating costs expected during the forecast period are
based on adjusted operating costs of €1,174.2 million in 2016.
With regard to the cyclical environment and structural growth initiatives, Deutsche Börse AG's expected
business development is based on the same factors that influence the expected business development of
Deutsche Börse Group as a whole. These are described in this report on expected developments. For
2017, the company expects sales revenue to be above the 2016 level (2016: €1,300.2 million) and to
rise by approximately 5 to 10 per cent depending on how the factors described above develop.
Given the expected increase in net revenue of approximately 5 to 10 per cent, with operating costs rising
by between 0 and 5 per cent as a result, the Group anticipates a growth rate of between approximately
10 and 15 per cent (excluding non-recurring effects) for net profit for the period attributable to Deutsche
Börse AG shareholders during the forecast period. This assumption is based on an adjusted figure of
€810.8 million for 2016.
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 pro-
cess to improve operating efficiency by focusing even more on client needs in order to further enhance
quality and efficiency of the services offered. At the same time, Group-internal processes are simplified,
generating costs savings. Secondly, the Group resolved a series of structural cost reduction measures during
the reporting period, and has already commenced implementation. For instance, we started to reduce the
number of external service providers. This included the shift of tasks from external to internal staff, or the
hiring of external service providers as internal staff. As at the publication date of this combined manage-
ment report, the company expects that operating costs will be affected by non-recurring effects of some
€80 million. The majority of these is due to mergers and acquistions (excluding performance-related
components) but also due to efficiency measures and costs incurred in connection with criminal proceed-
ings against Clearstream Banking S.A. in the US.
-
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on expected developments
Within the scope of its "Accelerate" growth strategy, in 2015 Deutsche Börse Group introduced princi-
ples 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 non-
recurring effects relative to the development of net revenue. Accordingly, the lower end of the net reve-
nue growth range during the forecast period and the following years, of approximately 5 per cent, would
imply stable operating costs compared to the previous year. If net revenue reaches the upper end of the
Even if, contrary to expectations, the operating environment turns out to be worse than described above,
and clients were to scale back their business activities, particularly in the Group's business divisions which
depend upon trading, Deutsche Börse Group believes it is in a position to continue to do business profita-
bly thanks to its successful business model and its cost discipline.
Depending on developments in the operating environment, the impact of both cyclical and structural
growth drivers and the success of new products and functionalities, Deutsche Börse Group expects net
revenue to increase by approximately 5 per cent to 10 per cent during the forecast period. Net revenue
growth expected during the forecast period is based on net revenue of around €2,389 million achieved
in 2016.
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 its results of operations over
the medium and long term. This expectation is based on, among other things, the growth opportunities
that the company intends to exploit over the same period. The Group expects net revenue to increase
further in the forecast period. This assumption is based on two main factors. Firstly, a further slight
increase in economic growth could improve investor confidence, and motivate US investors to return to
European markets. Against the background of the UK's exit from the EU, the general elections to be held
in a series of European countries, and the development of US policies, we anticipate elevated stock mar-
ket volatility in 2017, at least temporarily. Both of these factors, i.e. returning US investors and elevated
equity market volatility, would have positive effects on trading volumes in equities and equity index deriva-
tives. Moreover, market speculation on interest rate developments in the US and Europe may boost trading
activity in interest rate derivatives at Eurex derivatives exchange - whilst higher, or increasing US interest
rates could lead to a further increase in net interest income from the banking business in 2017. Secondly,
the Group expects a further increase of the contribution from its structural growth initiatives as well as
from new growth opportunities being explored within the scope of its "Accelerate” growth programme
launched in 2015 (for details, please refer to the report on opportunities).
Future development of results of operations
In addition to the structural opportunities arising from regulation, the Group expects to see further debate
in the forecast period on the potential introduction of a financial transaction tax. The introduction of a
financial transaction tax will continue to be pursued in 2017 by a number of EU Member States, which
have formed an alliance to achieve greater cooperation. The introduction of such a tax would negatively
impact Deutsche Börse Group's business performance. Since the ten Member States concerned have been
unable to date to reach agreement on the tax base, tax rates and technical collection and remittance meth-
ods, it is not possible to gauge the concrete impact on the Group's business.
Given the expected increase in sales revenue of approximately 5 to 10 per cent, with operating costs rising
by between 0 and 5 per cent as a result, the Group anticipates a growth rate of between approximately
10 and 15 per cent (excluding non-recurring effects) for adjusted net profit for the period attributable
to Deutsche Börse AG shareholders (2016: €553.2 million) for the forecast period.
The Clearstream segment's main net revenue driver is the settlement and custody of international bonds
- a business that is much more stable than the trading business and only subject to less significant capital
market fluctuations. The Group anticipates a structurally driven increase in demand for collateral and
liquidity management services due to regulatory requirements. In the medium to long term, Clearstream
expects its attractive collateral and liquidity management and its strong position in the TARGET2-Securi-
tites (T2S) network to result in increased business activity and hence in significant additional net revenue.
As Clearstream did not migrate to T2S until February 2017, the Group anticipates only a moderate con-
tribution to net revenue for 2017. Another factor to impact Clearstream's business in the forecast period
will be central bank monetary policy, as it has been in the past. Transaction activity is expected to increase
in the medium term, as a result of the ECB's ongoing commitment (at least for 2017) to the programme
for purchasing government and corporate bonds. At the same time, however, the continuation of the pro-
gramme could have a dampening effect on securities issuance and liquidity management. If, contrary to
expectations, monetary policy becomes more restrictive, this would have positive consequences for secu-
rities issuance, the use of collateral and liquidity management services, as well as for net interest income
in the banking business. As a significant portion of customer balances are denominated in US dollars,
the turnaround in US interest rate policy – initiated at the end of 2015 and continued in December of
2016 will cause a rise in net interest income in 2017, at steady cash balance levels.
Trends in non-financial performance indicators
-
Overall assessment by the Executive Board
The parent company, Deutsche Börse AG, plans to invest some €30 million in intangible assets and
property, plant and equipment during the forecast period.
To maintain its strong credit ratings at Group level, the company aims at a ratio of interest-bearing gross
debt to EBITDA of no more than 1.5. The Group expects to reach or slightly come below this figure
in 2017, depending on net revenue developments.
Moreover, until 2012 the company distributed a part of freely available funds to shareholders, via share
buy-backs. Since 2013, these funds have been used predominantly to support the company's develop-
ment, as well as to fulfil credit rating and regulatory capital requirements. Against the background of the
growth strategy announced in 2015, the company anticipates that in future, freely available funds will
increasingly be applied not only to support the Group's organic growth, but also to complementary
external growth options.
Within the framework of a programme to optimise its capital structure, 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. In recent years (where the Group's net profit
was lower), the dividend payout ratio was kept at the upper end of this range, in order to distribute stable
dividends to shareholders. Given that the Group's profit targets were raised in July 2015, in connection
with the announcement of the "Accelerate” growth strategy, the company aims for a dividend payout
ratio in the middle of the range between 40 and 60 per cent going forward.
The company expects operating cash flow, which is Deutsche Börse Group's primary funding instrument,
to remain clearly positive in the forecast period. The Group expects that two significant factors will influ-
ence changes in liquidity. Firstly, the company plans to invest some €150 million per year in intangible
assets and property, plant and equipment at Group level during the forecast period. These investments
will be included in cash flows from investing activities, and will serve primarily to develop new products
and services in the Eurex and Clearstream segments and to enhance existing ones. The total amount
mainly 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 €2.35 per
share to the Annual General Meeting to be held in May 2017. This would correspond to a liquidity out-
flow of about €440 million. Apart from the above, no other material factors were expected to impact the
Group's liquidity at the time the management report was prepared. As in previous years, the Group
assumes that it will have a sound liquidity base due to its positive cash flow, adequate credit lines (see
note 36 to the consolidated financial statements for details), and flexible management and planning
systems.
Future development of the Group's financial position
management levels below the Executive Board, i.e. 6 per cent on the first and 10 per cent on the second
management level. These target quotas relate to Deutsche Börse AG (excluding subsidiaries) and will be
valid until 30 June 2017.
Deutsche Börse Group financial report 2016
106
105
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In accordance with the Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungs-
positionen in der Privatwirtschaft und im öffentlichen Dienst (German Act on the Equal Participation of
Women and Men in Leadership Positions in the Private and Public Sectors), the Supervisory and Executive
Boards of Deutsche Börse AG additionally resolved to maintain the existing quotas of women on the two
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 XetraⓇ
and T7Ⓡ at the very high level seen in previous years throughout the forecast period.
For the 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.
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.
Deutsche Börse 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 by offering selective incentives for price-elastic business.
Changes in pricing models
The company anticipates that net revenue in the Market Data + Services segment will increase slightly
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 exchange-traded funds. In addition to distributing in-
dex licences, the Group also benefits from the growing investment volumes in these products. In light
of this, the Group believes it is well placed to increasingly extend the positioning of its globally focused
range of indices to the Asian market as well.
This segment aims to accelerate 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 untapped growth opportunities in the medium to long term.
Market Data + Services segment
Although Deutsche Börse faces especially intense competition in the settlement and custody of international
bonds, the company does not expect this to have a major impact on its net revenue or to result in a loss
of market share during the forecast period.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on expected developments
With regard to its customer structure, the company continues to expect 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 would lead to a decline in average fees.
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. The Executive Board already set a volun-
tary target in 2010 for Deutsche Börse Group to increase the proportion of women in middle and senior
management to 20 per cent and in junior management to 30 per cent by 2020. These targets remain
in place. They relate to Deutsche Börse Group worldwide, including subsidiaries.
Deutsche Börse Group financial report 2016
External growth opportunities
101
Clearstream's collateral and liquidity management offering, developed as part of its Global Liquidity Hub
growth initiative, helps customers 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
came into force in December 2015. The Global Liquidity Hub allows banks to use the assets held in cus-
tody by Clearstream on their behalf more efficiently across different platforms and countries.
Collateral and liquidity management
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on opportunities
Initiated by the ECB, the purpose of the T2S project is to harmonise cross-border securities settlement
using central bank funds across Europe. Clearstream has undertaken substantial investments over recent
years to bring its systems into line with the new settlement structure. For Deutsche Börse Group, this
holds the opportunity of winning new clients for Clearstream's innovative services, such as global liquidity
management. Furthermore, the Group expects higher custody volumes and new services from T2S, which
can only be provided through Clearstream via its integrated international central depository (ICSD). Clear-
stream has been connected to T2S within the scope of the fourth migration wave in February 2017.
Once this connection is in place, clients will be able to 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 in Germany and LuxCSD S.A. in Luxembourg - will 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.
Cross-border securities settlement (T2S)
Clearstream completed the integration of the hedge fund custody business, acquired from Citco. This
enables clients of Deutsche Börse Group to use Clearstream's settlement and custody services for their
entire fund portfolio - covering traditional investment funds, exchange-traded index funds (ETFs) as well
as hedge funds. Given that regulatory authorities demand more efficient settlement and custody solutions
in order to achieve a maximum safety level for customer assets, the Group anticipates that it will acquire
additional client portfolios.
Cross-border settlement of investment funds
Deutsche Börse AG successfully explored a new asset class - foreign-exchange trading - with the full
acquisition of 360T. 360T® is a leading, globally active foreign-exchange trading platform which has
generated double-digit annual growth rates since its inception in 2000. The broad client base of 360T
includes corporate and buy-side clients as well as banks. The acquisition of 360T by Deutsche Börse is
expected to further boost the company's organic growth momentum. On a medium-term horizon, the
combination offers the potential for revenue synergies in a double-digit million euro amount, with 360T
using Deutsche Börse Group's international sales network and expertise for growing business, especially
through the introduction of electronic trading in order to further improve liquidity and transparency. To
date, regulatory obligations such as EMIR have not yet been expanded to cover the foreign exchange
market. If this were to happen, Deutsche Börse Group would be able to tap further growth opportunities
from its extensive portfolio of products and services it offers in the context of regulatory requirements.
For instance, the Group plans to establish a foreign exchange clearing house in order to service the fun-
damental demand for capital-efficient solutions. Thanks to its leading position, 360T further benefits
from a structural trend. Even though, at present, the vast majority of daily foreign-exchange trading vol-
umes are executed off-exchange, demand for transparent, electronic multi-bank trading platforms such
as 360T is rising. By combining the skills and experience of 360T in foreign-exchange trading with
Deutsche Börse's IT competence, the Group will be able to explore the resulting revenue potential.
Expansion into foreign exchange trading (360T)
the European energy market, and the fact that market participants predominantly trade off-exchange. Given
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. Whilst OTC
trading clearly continues to be the bigger market, EEX was able to significantly increase market share,
to around 30 per cent in 2016. EEX continues to anticipate strong demand for efficient trading and clear-
ing solutions for the energy markets, and resulting structural growth.
Deutsche Börse Group financial report 2016
Expansion of the index business
98
With the acquisition of a majority stake in the European Energy Exchange AG (EEX), based in Leipzig,
Deutsche Börse Group expanded its product range to include trading and clearing of spot and derivatives
contracts on power and gas as well as emission certificates - in order to benefit from markedly higher
demand for energy trading and clearing services. The double-digit growth rates which the Group has
achieved since then have been the result of external growth but also reflect structural organic growth
which Deutsche Börse Group has been able to exploit, thanks to its good 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. EEX also generated organic growth, especially in the power and gas business. Whilst this growth
momentum is based on the changing importance of renewable energy sources - wind power in particular
for power generation, the resulting gains are difficult to predict, also due to the strong fragmentation of
Trading and clearing of power and gas products (EEX)
The obligation for market participants to comply with EMIR requirements kicked in on 21 June 2016,
with the first of four phases. Preparing for mandatory clearing, Eurex Clearing AG has developed a central
counterparty to clear OTC derivatives. The offering, which may later be extended to other asset classes, is
aimed primarily at institutional customers and the interest rate swaps they enter into. It especially focuses
on security and efficiency, allowing customers to gain the full benefit of Eurex Clearing's risk and collat-
eral management services for their OTC transactions as well. The majority of transactions entered into by
these clients has been subject to mandatory clearing since the start of phase 2 on 21 December 2016.
■ an obligation to report the transactions to a trade repository
■ special risk management requirements for transactions in non-standardised derivatives
■ an obligation to clear standardised OTC derivatives transactions using a central counterparty
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 Euro-
pean Union developed the European Market Infrastructure Regulation (EMIR), which is aimed at regulat-
ing OTC trading in derivatives. EMIR includes the following regulatory requirements:
Clearing of OTC derivatives
Overall, the Group anticipates the strongest revenue increases in its Eurex segment. Besides the initiatives
of the "Accelerate" programme, this includes clearing of over-the-counter (OTC) derivatives and further
growth in the trading of power and gas products. 360 Treasury Systems (360T) will also provide a con-
tribution to net revenue growth in this segment. In the Clearstream segment, the focus is on developing
the investment funds business, cross-border securities settlements via TARGET2-Securities (T2S),
as well as collateral and liquidity management. The growth focus in the MD+S segment is on the expan-
sion of the index business. While building its business in growth regions, Deutsche Börse continues to
focus on Asia; developments there will impact all reporting segments. The business potential of the
above-mentioned initiatives are described in more detail below.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on opportunities
The Executive Board of Deutsche Börse AG believes that the company continues to be in a very good posi-
tion compared with the international competition thanks to its comprehensive offering along the securities
trading value chain and its innovative strength. Against this background, it therefore expects to see a
97
102
Deutsche Börse Group's objective in its index business is to re-position its established European index
provider STOXX with a global profile, in order to develop further indices (on top of its DAX® and STOXX®
index families) and to market them on a worldwide basis. The goal is to acquire new client groups, both
within Europe as well as in Asia and the Americas, through diversification. 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
Governments and central banks are currently working to enhance regulation of the financial markets
so as to stabilise the financial sector and prevent future crises of the magnitude experienced. The mea-
sures planned, and in some cases already initiated, 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's
customers, the ultimate impact of these far-reaching regulatory reform projects on market structures and
business models is difficult to gauge accurately at present. Deutsche Börse anticipates that this un-
certainty will continue to weigh on market participants' business activities during the forecast period.
Regulatory environment
In its economic development forecast for 2017 published in January 2017, the International Monetary
Fund (IMF) predicts an increase of around 1.6 per cent in the euro zone and growth of around 1.5 per
cent in Germany. Expectations for the United States are slightly higher than for the euro zone: the US
economy is forecast to grow by around 2.3 per cent. The highest growth by far in 2017 - approximately
6.5 per cent is again expected in Asian countries (and especially China), due to expected high domestic
demand. Given the extremely varied estimates for the different economic regions, global economic growth
is projected to be around 3.4 per cent in 2017.
Deutsche Börse Group anticipates that the global economy will grow moderately during the forecast
period. In the case of the emerging markets, the Group expects that countries with a current account
surplus will expand at an above-average rate. Due to cyclical as well as structural factors, these coun-
tries will no longer be able to match the high growth rates seen in the past. Furthermore, the Group
expects the economies of industrialised nations to recover slowly following a series of challenging years
in the aftermath of the financial crisis, with economic growth picking up slightly over the previous years.
Looking at Europe, the Group expects an improvement of the economic situation, driven by develop-
ments in Germany and France, the two largest economies. Against this generally positive background,
we are assuming that market participants will have more confidence in the capital markets compared
to the previous year, which was marked events, such as the Brexit referendum and the US presidential
elections. However, current uncertainties could once again unsettle the markets. These include geopoliti-
cal crises, the development of commodity prices, monetary policy moves by the Fed in the US and the
ECB in Europe, or a crisis of confidence in the growth of certain emerging market countries, especially
in Asia. 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 monthly volumes of the ECB's bond-buying
programme will be slightly reduced, the deposit rate is expected to remain at -0.4 per cent. Now that
the positive effects during 2016 of this monetary policy on cash and derivatives markets trading volumes
have largely run their course, the Group does not expect any such stimulus for 2017. The turnaround
in US interest rates continued at the end of 2016, and we expect further hikes in 2017 – provided that
the economy (and inflation) accelerate further.
Macroeconomic environment
Developments in the operating environment
results, many of them outside the company's control. Should opportunities, risks or uncertainties materi-
alise 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 for-
ward-looking statements and information contained in this report on expected developments.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on expected developments
The report on expected developments describes Deutsche Börse Group's expected performance in finan-
cial year 2017. It refers to the Group's standalone business operations. It does not refer to either the new
HoldCo established in the context of the merger with London Stock Exchange Group (LSEG), nor does it
refer to Deutsche Börse AG as a subsidiary of the new HoldCo. It contains statements and information
on events in the future and is based on the company's expectations and assumptions at the time of pub-
lication of this corporate report. In turn, these are subject to known and unknown opportunities, risks and
uncertainties. Numerous factors influence the Group's success, its business strategy and its financial
Report on expected developments
In addition, the company regularly explores external growth opportunities, which are subject to the same
kind of stringent analysis as its organic growth initiatives. For this reason, only a small number of the
opportunities analysed are ultimately realised. Examples of external growth in the past few years include
the takeover of Citco's hedge fund custody business, the majority interests in EEX and Powernext, the
full acquisition of the joint ventures STOXX including Indexium, as well as the full acquisition of 360T.
Furthermore, the planned merger with London Stock Exchange Group plc was pursued in 2016 (see the
"Planned merger with London Stock Exchange Group" section for details).
In addition to growth in its core markets and products, the Group is focusing on expanding its business
in growth regions. A particular emphasis is on Asia, where the Group is already successfully represented
by Clearstream subsidiaries in particular. Among other things, Clearstream has been operating a permanent
establishment with its own banking licence in Singapore since 2009. The China Europe International
Exchange (CEINEX) commenced trading in November 2015, initially with cash market products such as
ETFs based on Chinese underlyings, and renminbi-denominated bonds. CEINEX is a joint venture between
Deutsche Börse and the Shanghai Stock Exchange (holding 40 per cent each) and the Chinese Financial
Futures Exchange (holding a 20 per cent stake). CEINEX provides international investors with access to
investment products based on Chinese underlying instruments. The marketplace is the first regulated and
authorised trading platform outside China for financial products denominated in renminbi, the Chinese
currency. CEINEX thus offers investors new opportunities for efficiently trading Chinese securities; at the
same time, it effectively promotes the renminbi's internationalisation.
■ In the market data business, an increase in the number of employees at companies active on the
financial markets could lead to growing demand for data packages.
■ The volumes of interest rate derivatives traded on the Group's derivatives markets could rise if spec-
ulation 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.
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:
Cyclical opportunities
of available credit. For Clearstream, this could have a positive effect on custody volumes, especially
in the international bond segment. In addition, given the growing internationalisation of the capital
markets, the company is continuing to expect a sharper rise in the bond volume issued internation-
ally compared with national bond issues.
Deutsche Börse Group financial report 2016
100
99
■ With respect to Clearstream's post-trade activities, 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
■ In line with the European legal and administrative framework governing certain undertakings for collective
investment in transferable securities (UCITS V), the company expects that traditional investment funds
will increasingly include derivatives in their portfolio strategies. This could result in additional business
for the Eurex segment.
■In January 2014, agreement was reached at a European level on the MiFID II Directive: among
other things, OTC derivatives transactions will in future have to be settled via organised trading fa-
cilities, a requirement that is expected to benefit Eurex. In addition, a decision was taken to limit
the volume of equities traded in dark pools. The Group expects this restriction to have a positive
impact on the volumes traded on Xetra®. The Group will apply MiFID II as from January 2018.
▪ Risk management is becoming more important in the wake of the financial crisis. 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.
In addition to these initiatives, the Group has identified a number of other structural factors that should
have a positive impact on its business success.
▪ While the company does not expect the ECB to change its low interest rate policy during the forecast
period, the US Federal Reserve could incrementally continue to raise interest rates. Among other things,
this would positively impact Clearstream's net interest income from banking business as some 49 per
cent of its daily cash balances are denominated in US dollars. A rise in key interest rates of one basis
point affecting all customer cash deposits could lift income by some €100 million.
Expansion in Asia
■ In the cash and derivatives market segments (Xetra and Eurex), sustained positive economic devel-
opment, 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 stimu-
late trading activity by market participants and boost trading volumes.
1.712)
%
31 Dec 2016
Employee length of service
Employee age structure
As the structure and design of the remuneration system correspond to those of Deutsche Börse Group,
please refer to the latter's ☑ remuneration report.
Remuneration report of Deutsche Börse AG
As at 31 December 2016, 75 per cent of Deutsche Börse AG's employees were graduates. This figure
is calculated on the basis of the number of employees holding a degree from a university, a university
of applied sciences or a university of cooperative education, and employees who have completed com-
parable studies abroad. In total, the company invested an average of 5.9 days per employee in staff
training in 2016.
Deutsche Börse AG employed staff at six locations throughout the world as at 31 December 2016.
Details on the countries/regions concerned, the employee age structure and the length of service of
the company's employees are given in the following tables and those on the previous page.
31 Dec 2016
In the course of financial year 2016, 31 employees left Deutsche Börse AG, resulting in a fluctuation
rate of 2.8 per cent.
Deutsche Börse AG employees
73
Deutsche Börse AG collects fees for a large part of services provided immediately after each month-end;
accordingly, trade receivables totalled €157.1 million at the year-end (2015: €131.0 million).
from affiliated companies of €167.2 million (2015: €147.1 million) mainly related to the existing profit
transfer agreement with Clearstream Holding AG. Liabilities to affiliated companies predominantly re-
sulted from cash pooling (€1,942.2 million - 2015: €779.0 million); short-term loans (€375.6 mil-
lion - 2015: €375.6 million); and trade liabilities (€82.1 million - 2015: €59.3 million).
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Deutsche Börse AG (HGB)
6,220.7
6,141.2
31 December
In the reporting period, the number of people employed by Deutsche Börse AG decreased by 21 to
total 1,132 as at 31 December 2016 (31 December 2015: 1,153). On average, 1,118 people worked
for Deutsche Börse AG during financial year 2016 (2015: 1,131).
100.0
%
30 to 39 years
358
50 years and older
38
428
Over 15 years
34
386
28
Under 30 years
320
25
283
34
384
Less than 5 years
9
105
40 to 49 years
5 to 15 years
32
1,132
Non-current assets as at
€m
%
31 Dec 2016
2015
2016
Employees per country/region
Non-current assets (condensed)
Receivables from and liabilities to affiliated companies include settlements for intra-Group services and
amounts invested by Deutsche Börse AG within the scope of cash-pooling arrangements. Receivables
€m
At €41.6 million (2015: €21.5 million), Deutsche Börse AG's investments in intangible assets and
property, plant and equipment were higher than the amount of €30.0 million expected at the end of
2015. Amortisation, depreciation and impairment amounted to €24.3 million (2015: €24.4 million).
Net assets of Deutsche Börse AG
Cash flow from financing activities amounted to €-697.9 million in the year under review (2015:
€841.9 million). In addition to €420.1 million in dividends paid for the 2015 financial year, the com-
pany raised loans of €400.0 million and repaid loans of €683.1 million. Cash and cash equivalents
amounted to €-1,006.8 million on the balance sheet date of 31 December 2016 (2015: €-606.7 mil-
lion), comprising liquid funds of €935.4 million (2015: €172.3 million) less cash-pooling liabilities
of €1,942.2 million (2015: €779.0 million).
Cash flow from investing activities amounted to €141.4 million (2015: €–1,444.9 million). This increase
is strongly correlated with a decline in investments in financial assets. In 2015, cash flow from investing
activities had been largely influenced by the acquisition of an additional stake in STOXX Ltd., and the
acquisition of 360T Group, resulting in a cash outflow of €1,403.5 million.
Deutsche Börse AG generated €156.4 million (2015: €372.8 million) in cash flow from operating activ-
ities during the 2016 financial year. The decline was especially attributable to higher receivables from
affiliated entities and a decrease in medium- and short-term provisions.
Deutsche Börse AG has issued three corporate bonds with a nominal value of €600 million each and
one corporate bond with a nominal value of €500 million. For more details concerning these bonds,
please refer to the “Financial position" section. Moreover, as part of Group-internal restructuring
measures in 2014, the company raised loans from associates, in a total amount of €375.6 million,
which will fall due during the 2017 financial year.
Deutsche Börse Group financial report 2016
110
109
Deutsche Börse AG's property, plant and equipment amounted to €6,141.2 million on 31 December
2016 (2015: €6,220.7 million). The lion's share of this figure was attributable to investments in
affiliated companies of €6,001.8 million (2015: €6,092.8 million), mainly comprising investments
in Clearstream Holding AG and Eurex Frankfurt AG. Investments in affiliated companies declined to
€91.0 million, mainly due to the sale of the ISE stake (€81.9 million).
Total Deutsche Börse AG
Germany
97.0
0.4
4
Rest of Europe
6,157.5
6,062.6
Financial assets
0.6
7
1,098
France
66.3
Tangible assets
1.9
22
United Kingdom
11.3
12.3
Intangible assets
51.9
Total Deutsche Börse AG
1,132
100
Performance shares are measured and granted within the framework of the Performance Share Plan
(PSP). As they reflect the performance of the Deutsche Börse share price over a five-year performance
period (the vesting period), they are disbursed after the year under review. Performance shares amount
to approximately one-third of the performance-related remuneration, and to approximately 25 per cent
of the total target remuneration.
Performance shares
The performance bonus is measured using the Performance Bonus Plan (PBP). It amounts to approxi-
mately two-thirds of the performance-related remuneration, and to approximately 45 per cent of the
total target remuneration. It consists of a share-based component (the share-based performance bonus)
and a cash component, in equal proportions.
Performance bonus
Performance-related remuneration accounts for approximately 70 per cent of the total target remuneration
for one year. This variable remuneration element comprises a performance bonus as well as performance
shares.
Performance-related remuneration components
The members of the Executive Board receive a fixed basic salary, payable in twelve monthly instalments.
This non-performance-related remuneration comprises approximately 30 per cent of the total target
remuneration for one year.
Non-performance-related fixed remuneration
The criteria which the Supervisory Board uses to assess target achievement of individual Executive Board
members are described below. These criteria are used to determine the respective performance bonus,
as well as the number and value of performance shares.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
The final amount of the stock bonus for outstanding tranches within the previous Stock Bonus Plan
(SBP) for members of the Executive Board was determined as at 31 December 2015; the SBP was
prematurely terminated by way of a settlement process.
The Chief Executive Officer also participates in a Co-Performance Investment Plan which was resolved
by the Supervisory Board in 2015.
In addition, Share Ownership Guidelines apply, according to which Executive Board members are obliged
to hold a substantial amount of Deutsche Börse AG shares during their term of office.
Non-performance-related component (cash component)
Performance-related component (cash component)
Performance-related component (share-based payment)
% = Proportion of the total target remuneration
Shares
Cash
Ancillary
contractual
benefits
The individual components of the Executive Board's remuneration are laid out in detail below.
Pension and
retirement
commitments
Principles governing the PBP and assessment of target achievement for the performance bonus
Target achievement for the performance bonus is determined for one financial year on the basis of the
PBP. The underlying assessment is based on two components: growth of net profit for the year concerned
attributable to Deutsche Börse AG shareholders (hereinafter referred to as net income) with a weighting
of two-thirds, and the Executive Board member's individual performance with a one-third weighting.
115
Net income is derived – independently of the budget - by comparing the net income for the remunera-
tion year with the previous year's figure. Target achievement may range between O and 200 per cent,
whereby a decline in net income of 20 per cent or more means a 0 per cent target achievement (floor).
Where net income remains stable (i.e. unchanged year-on-year), this is deemed a 75 per cent target
achievement; a 7.5 per cent increase is equivalent to a 100 per cent target achievement. An increase
in net income of 15 per cent or more means a 200 per cent target achievement (cap). Accordingly,
a stronger incentive is provided for net income growth rates between 7.5 per cent and 15 per cent, via
a steeper slope of the target achievement curve (please refer to the ☑chart "Assessment of net income
for the performance bonus").
Assessment of net income growth for the performance bonus
Total payment
3 years holding period
Shares
50%
=
Performance
multiplier
Once the Supervisory Board has determined the overall target achievement level from these two
components, it may conduct a final appraisal, adjusting it via a performance multiplier for individual
Executive Board members, but also for the entire Executive Board. The total performance bonus will
be disbursed in cash, no later than the regular salary payment for the calendar month following approval
of Deutsche Börse AG's consolidated financial statements. Executive Board members are obliged to
invest 50 per cent of the total disbursement amount after tax in Deutsche Börse AG shares, which they
I will have to hold for at least three years.
Cash
Individual objectives
1/3
Consolidated net
profit growth
2/3
100 per cent
target value
Overview of the performance bonus
Deutsche Börse Group financial report 2016
116
50%
Performance shares
Performance bonus
Performance-related remuneration components
2. Supervisory Board remuneration
1. Remuneration system and aggregate Executive Board remuneration
This remuneration report outlines the principles of the remuneration system for members of
Deutsche Börse AG's Executive Board, and describes the structure and amount of Executive Board
remuneration. Furthermore, it describes the principles applicable to, and the amount of Supervisory
Board remuneration. The remuneration report is part of the combined management report; it follows
the requirements of the Handelsgesetzbuch (HGB, German Commercial Code), the International
Financial Reporting Standards (IFRSS) and the German Accounting Standard No. 17. In addition,
it largely follows the recommendations of the German Corporate Governance Code (GCGC). For
details, see the corporate governance declaration. The remuneration report is structured in two parts:
Remuneration report
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
The expected developments in Deutsche Börse AG's business are largely subject to the same factors
as those influencing Deutsche Börse Group. The relevant disclosures and quantitative information on
Deutsche Börse AG are provided in the report on expected developments.
Report on expected developments at Deutsche Börse AG
The description of the internal control system (ICS) required by section 289 (5) HGB is given in the "Inter-
nal management" section.
Remuneration system and aggregate Executive Board remuneration
As the opportunities and risks facing Deutsche Börse AG and the measures and processes for dealing
with them are essentially the same as for Deutsche Börse Group, please refer to the risk report and the
report on opportunities for more information. As a matter of principle, Deutsche Börse AG's share of
the opportunities and risks of its equity investments and subsidiaries is proportionate to the size of
its shareholdings. Risks that threaten the existence of the Eurex Clearing AG subsidiary have a direct
impact on Deutsche Börse AG as it has issued a letter of comfort (“Patronatserklärung”). Further infor-
mation on the letter of comfort issued to Eurex Clearing AG is available in the “Other financial obliga-
tions and transactions not included in the balance sheet" section in the notes to the annual financial
statements of Deutsche Börse AG.
The corporate governance declaration in accordance with section 289a HGB applies to Deutsche
Börse Group and Deutsche Börse AG, please refer to the ☑ corporate governance declaration made
on behalf of the Group.
Corporate governance declaration in accordance with section 289a HGB
Deutsche Börse Group financial report 2016
112
111
100
1,132
Total Deutsche Börse AG
Opportunities and risks facing Deutsche Börse AG
Principles and targets
The Supervisory Board resolved to adopt a new remuneration system for the Executive Board, to come
into effect on 1 January 2016. The system 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).
-
25%
Long-term incentive components (3-5 years)
45%
related remuneration
Non-performance-
Annual payment
30%
Composition of the total target remuneration
pension and retirement commitments
performance-related remuneration components
ancillary benefits
-
■ non-performance-related fixed remuneration
The remuneration system for the members of the Executive Board consists of four components:
Structure and remuneration components
Deutsche Börse Group financial report 2016
114
113
The Executive Board remuneration is determined by the entire Supervisory Board. The Personnel
Committee is responsible for preparing the Supervisory Board's decision. The Supervisory Board
reviews the appropriateness of the Executive Board remuneration on a regular basis - at least every
two years - including the ratio of Executive Board remuneration to the remuneration of first-level
managers and the workforce as a whole, as well as the development of the various salary levels over
time. The remuneration system applies equally to all members of the Executive Board.
The new remuneration system is based on three key guidelines: firstly, a marked performance orienta-
tion with a more differentiated appraisal through ambitious internal and external targets - ensures
that the focus is on the company's above-average growth. Secondly, various assessment bases extending
over several years, sustainability elements, and the deferral of disbursements over time discourage
excessive risk-taking. Thirdly, the new remuneration system promotes a strong equity culture, and thereby
contributes to aligning the interests of shareholders, senior management and other stakeholders.
-606.7
-1,006.8
Working capital amounted to €-2,064.0 million during the year under review (2015: €-1,158.1 million).
The change was mainly attributable to an increase in liabilities to affiliated companies.
-2
In contrast to the consolidated financial statements, the single-entity financial statements of Deutsche
Börse AG are not prepared in accordance with International Financial Reporting Standards (IFRSS) but
with the German Commercial Code (Handelsgesetzbuch, HGB) and the supplementary provisions of the
German Stock Corporation Act (Aktiengesetz, AktG).
Deutsche Börse AG compiled its annual financial statements for the 2016 financial year pursuant to the
Bilanzrichtlinie-Umsetzungsgesetz (German Accounting Directive Implementation Act, BilRUG), which
called for changes in particular to the definitions of revenue and other operating income. To ensure com-
parability, the BilRUG has also been applied to the previous year's figures for these two items as reported
in the following.
Business and operating environment
General position
Deutsche Börse AG is the parent company of Deutsche Börse Group. Its business activities primarily
comprise its cash and derivative markets as well as IT and Market Data + Services. The performance
of the Clearstream segment is primarily reflected in Deutsche Börse AG's business performance via the
profit and loss transfer agreement with Clearstream Holding AG. In view of this, Deutsche Börse AG's
business and operating environment is essentially the same as that of Deutsche Börse Group. These are
described in detail in the "Macroeconomic and sector-specific environment" section.
Deutsche Börse AG's course of business in the reporting period
Revenue for the 2016 financial year remained within the company's guidance. At the same time, total costs
increased only slightly, thanks to continuous enhancements in operating efficiency due to the "Accelerate"
programme launched in 2015. Net profit increased significantly, due, among others, to the divestment of
International Securities Exchange Holdings, Inc. (ISE), and exceeded the company's expectations. Against
this background, Deutsche Börse AG's Executive Board considers the company's performance during the
2016 financial year as satisfactory. The 2016 financial year was largely characterised by plans for the
merger of Deutsche Börse with London Stock Exchange Group (LSEG).
1) Calculation based on the definition of revenue pursuant to the BilRUG
107
108
Deutsche Börse Group financial report 2016
Results of operations of Deutsche Börse AG
Deutsche Börse AG's revenue for the 2016 financial year rose by 1.5 per cent, to €1,300.2 million
(2015: €1,280.5 million). The “Sales revenue by segment" table provides a breakdown of revenue
by company segment.
The lion's share of revenue was generated in the Eurex segment, with €799.4 million (2015: €700.9 mil-
lion). Regarding the performance of the Eurex derivatives market segment, general reference is made
to the "Eurex segment" section. Any divergence from the statements in that segment are essentially
due to the fact that developments of the energy market (EEX group) and the foreign exchange market
(360T group) do not directly impact upon the business of Deutsche Börse AG. The financial performance
of the Market Data + Services segment is described, in general, in the “Market Data + Services seg-
ment" section. It is worth noting that the business development of the STOXX Ltd. subsidiary does not
directly impact the business performance of Deutsche Börse AG. Details concerning the business devel-
opment in the Xetra segment are largely provided in the “Xetra segment" section. Revenue attributable
to the Clearstream segment is generated from IT services that Deutsche Börse AG provides to entities
within the Clearstream Holding AG subgroup.
Other operating income rose to €149.1 million during the year under review (2015: €70.3 million).
This increase was attributable in particular to the €99.0 million in sales proceeds recognised from the
sale of ISE.
Total costs (comprising staff costs, amortisation of intangible assets and depreciation of property, plant and
equipment, as well as other operating expenses) were €946.1 million, up 2 per cent on the previous year
(2015: €927.0 million). They also include expenses of €65.8 million related to the proposed merger with
LSEG; adjusted for these, total costs were down by 5 per cent compared with the previous year. For a break-
down, please refer to the ☑„Overview of total costs" table. Staff costs rose by 4 per cent compared to the
previous year, to €201.8 million (2015: €194.2 million) mainly due to expenses related to bonus pay-
ments of €43.0 million (2015: €26.8 million), and lower expenses for the "Accelerate" growth programme,
of €6.3 million (2015: €21.3 million).
Amortisation of intangible assets and depreciation of property, plant and equipment remained nearly
unchanged and amounted to €24.3 million in the year under review (2015: €24.4 million). Other operat-
ing expenses were up by 2 per cent year-on-year, to €720.0 million (2015: €708.4 million). The increase
Performance figures for Deutsche Börse AG
Sales revenue by segment
2016
€m
2015
Change
€m
Deutsche Börse AG (Disclosures based on the HGB)
%
positive trend in its results of operations in the long term. The purpose of the measures resolved - and
mostly implemented - in 2015, as part of the "Accelerate” programme, is to further accelerate the Group's
growth. In this 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. However, for the forecast period, the uncertainty as to how capital market partici-
pants will react to the economic and regulatory situation makes it difficult for the Executive Board to make a
specific forecast. Deutsche Börse Group's goal for the forecast period is to ensure the scalability of its
business model. 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, annual growth rates of approximately 10 to 15 per cent (excluding non-recur-
ring 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.
2) Calculation based on weighted average of shares outstanding
201.8
Staff costs
€m
€m
%
2015
2016
Change
2015
€m
2016
€m
Overview of total costs
Through a Group-wide cash-pooling system, Deutsche Börse AG ensures an optimum allocation of liquid-
ity throughout Deutsche Börse Group; in this way, the parent entity makes sure that all subsidiaries are in a
position to honour their payment obligations at any time.
Deutsche Börse AG has available external credit lines in the amount of €605.0 million (2015: €605.0 mil-
lion), which were not drawn upon as at 31 December 2016. Moreover, the company has a Com-
mercial Paper programme in place, which allows for flexible and short-term financings of up to €2.5 bil-
lion, in various currencies. At the end of the year, there was no Commercial Paper outstanding (2015:
€95.0 million).
The company received dividends totalling €37.3 million (2015: €18.2 million). The main reason for this
increase is a higher dividend distributed by STOXX Ltd.
Cash and cash equivalents on the 31 December 2016 balance sheet date amounted to €935.4 million
(2015: €172.3 million), comprising cash on hand, current account balances with banks and term deposits.
Financial position of Deutsche Börse AG
Deutsche Börse AG's return on equity expresses the ratio of net income after taxes to average equity
available to the company during the course of 2016. Due to the better results, return on equity rose to
21 per cent, compared to 13 per cent in 2015.
Profitability
Profit from ordinary activities rose by 36 per cent year-on-year, to €603.2 million (2015: €443.9 million).
The profit margin before taxes (the ratio of profit from ordinary activities to revenue) increased from
35 per cent to 46 per cent.
Earnings before interest and taxes (EBIT) increased to €697.5 million (2015: €543.9 million). Net
income for the period totalled €553.2 million, a 75 per cent increase year-on-year (2015: €315.9 million),
among others due to the proceeds from the disposal of ISE.
Deutsche Börse Group's result from equity investments for the 2016 financial year totalled €289.9 mil-
lion (2015: €123.9 million). In particular, this rise reflects the increase in income from the disposal of
equity investments, to €99.0 million (2015: €5.7 million), and the higher profit transfer from Clear-
stream Holding AG of €167.2 million (2015: €147.1 million). Income from dividends was €37.3 million
in the year under review (2015: €18.2 million), of which the largest part of €34.5 million was attribu-
table to distributions made by STOXX Ltd. (2015: €16.6 million).
was largely attributable to higher expenses for advisory services, incurred in particular in connection with
the planned merger with LSEG.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Deutsche Börse AG (HGB)
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Deutsche Börse AG (HGB)
194.2
2016
€m
Change
697.5
543.9
28
Clearstream
49.2
14.3
244
Profit before tax from
Total
1,300.2
1,181.9¹)
10
ordinary activities (EBT)
603.2
443.9
36
1) Calculation based on the definition of revenue not pursuant to the BilRUG
Net profit for the period
553.2
315.9
75
Earnings per share (€)
2.962)
EBIT
2015
-5
175.8
€m
%
Sales revenue
Total costs
1,300.2
946.1
1,280.5")
2
Eurex
799.4
700.9
14
927.0
2
Market Data +
Services
275.8
281.3
Net profit from equity
investments
289.9
123.9
134
Xetra
185.4
4
Cash flow statement (condensed)
156.4
Cash flows from operating activities
372.8
-1,444.9
841.9
141.4
-697.9
Cash flows from financing activities
Cash and cash equivalents as at
31 December
927.0
946.1
Total
2
2
720.0
Other operating expenses
Cash flows from investing activities
0
24.4
24.3
708.4
Write-offs
"
Former members of the Executive Board or their surviving dependents received payments of €4.5 million
in the year under review (2015: €2.3 million). The actuarial present value of the pension obligations
as at the balance sheet date was €74.2 million in the year under review (2015: €71.8 million).
Payments to former members of the Executive Board
The company did not grant any loans or advances to members of the Executive Board during the financial
year 2016, and there are no loans or advances from previous years to members of the Executive Board.
Loans to Executive Board members
A post-contractual non-compete clause applies to members of the Executive Board of Deutsche Börse AG
who were appointed or reappointed to the Board on or after 1 October 2014. This means that the
respective members of the Executive Board are contractually prohibited from acting for a competing
company, or from undertaking competing activities, for a period of one year from the end of the employ-
ment relationship. The compensation payable during the non-compete period amounts to 75 per cent
of the member's final fixed remuneration and 75 per cent of the final cash bonus; it is payable for the
term of the post-contractual non-compete clause. Benefits under the pension agreement are deducted
from the compensation. In addition, 50 per cent of other benefits are deducted if the other benefits plus
the compensation exceed the final remuneration. The company may waive the post-contractual non-
compete clause before termination of the contract of service.
Secondary employment
Post-contractual non-compete clause
The performance period for the co-performance shares commenced on 1 January 2015 and will end
on 31 December 2019. The equivalent of these shares will be paid out in three steps:
Miscellaneous
Additional appointments or sideline activities entered into by individual members of the Executive
Board require the approval of the entire Executive Board and the Chairman of the Supervisory Board
or, in certain cases, the entire Supervisory Board, which has delegated granting such approval to the
Personnel Committee. If a member of the Executive Board is remunerated for an office performed
at an affiliate of Deutsche Börse AG, this is offset against the Executive Board member's entitlement
to remuneration from Deutsche Börse AG.
The Chief Executive Officer participates in a Co-Performance Investment Plan which was resolved
by the Supervisory Board in 2015. In December 2015, he used private funds to invest an amount
of €4,500,000 in Deutsche Börse AG shares (investment shares) within the investment period
provided for in the Co-Performance Investment Plan. These shares must be held at least until the end
of the 2019 financial year. In return for his acquisition of investment shares, Mr Kengeter was granted
68,987 co-performance shares in the company, which are generally subject to the same criteria as
performance shares. Performance shares are explained in the ☑ section "Principles governing the PSP
and assessment of target achievement for performance shares". The performance of the co-perform-
ance shares is based on (i) the growth in Deutsche Börse AG's net income and (ii) the ratio of the
Deutsche Börse shares' total shareholder return (TSR), relative to the TSR of companies included in
the STOXX Europe 600 Financials index.
Severance payments
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Under the Share Ownership Guidelines, members of the Executive Board are obliged to continuously
hold a multiple of their average fixed 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 Deputy CEO and to ordinary
Executive Board members. This pertains to a relevant period between 1 January 2016 and 31 Decem-
ber 2018. Shares of the following three categories will be considered to assess compliance with the
Share Ownership Guidelines: (i) shares purchased from the performance bonus, during the holding
period; (ii) shares from allocation of performance shares; and (iii) shares held in private ownership.
Such shareholdings must be built up over a three-year period ending on 31 December 2018.
Share Ownership Guidelines
If an Executive Board member is asked to stand 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 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 of the above-mentioned
amount. In case of a change of control, all performance periods ongoing at that time shall end with the
day the contract of service is terminated. The respective performance shares will be accounted for
prematurely.
Change of control
In the event of early termination of an Executive Board member's contract of service other than for good
cause, any payments made to the Executive Board member may not exceed the remuneration for the
residual term of the contract of service and may also not exceed the value of two total annual remune-
ration payments (severance payment cap). The payment is calculated based on the total remuneration
in the past financial year and, where appropriate, the expected total remuneration for the current financial
year. The Supervisory Board may exceed the upper limit in exceptional, justified cases. Performance
shares granted will lapse where the company has good cause to terminate employment or where a mem-
ber of the Executive Board terminates his or her contract before the end of the performance period
without good cause and without a mutual agreement.
Deutsche Börse Group financial report 2016
In the event of permanent occupational incapacity, the agreements under the defined benefit pension
system for the Executive Board provide for a transitional payment in addition to the benefits described
above. The amount of this payment corresponds to the target amount of the variable remuneration
(cash and stock bonuses) in the year in which the benefits fall due. It is paid out in two tranches, in the
two subsequent years. In the case of the death of an Executive Board member, his or her spouse receives
60 per cent of the transitional payment.
Transitional payments
Deutsche Börse Group financial report 2016
124
Co-Performance Investment Plan (CPIP)
126
-5
The final amount of stock bonuses for all tranches outstanding within the previous Share Bonus Plan
for Executive Board members was calculated as at 31 December 2015 and settled during 2016. For
the tranches 2014 and 2015, retention periods shall apply until 31 December 2016 and 31 Decem-
ber 2017, respectively. Where not restricted by takeover legislation, with regard to the intended merger
with London Stock Exchange Group plc, or other legal provisions, the stock bonuses had to and have
to be invested in shares of Deutsche Börse AG.
Assessment of net income for performance shares
During the five-year performance period, the Supervisory Board measures the target achievement level
in terms of net income growth and determines it for the Executive Board members accordingly. The target
achievement level at the end of the respective performance period is calculated as the sum of the annual
target achievement levels of each of the five years, divided by five. The level of target achievement may
range between 0 and 250 per cent. If net income declines, or remains unchanged year-on-year, this
is deemed a O per cent target achievement level (floor). A 7.5 per cent increase in net income is equiva-
lent to a 100 per cent target achievement. An increase in net income of 15 per cent or more means
a 250 per cent target achievement (cap). The target achievement level increases more strongly for growth
rates between 10 and 15 per cent, compared to single-digit growth rates, providing a stronger incen-
tive to Executive Board members to strive for double-digit net income growth. Please also refer to the
chart "Assessment of net income growth for performance shares".
119
120
Deutsche Börse Group financial report 2016
Assessment of net income for performance shares
Target achievement (%)
300
250
200
150
133
115
100
50
Сар
Floor
0
-10
123
0
+5
■ Disbursement of the remaining disbursement amount as at 31 March 2021 (final disbursement): the
final disbursement will be equivalent to the total disbursement amount, less the first and second
prepayments.
Supercession of the previous Share Bonus Plan (SBP)
125
In the event of the death of an Executive Board member, his or her spouse receives 60 per cent of the
above amount and each dependent child receives 10 per cent (25 per cent for full orphans), up to
a maximum of 100 per cent of the pension contribution.
Messrs Kengeter, Pottmeyer and Tessler are entitled to pension benefits after reaching the age of 60,
Ms Stars after reaching the age of 62, and Mr Preuss after reaching the age of 63, provided that they are
no longer in the employment of Deutsche Börse AG in each case at that time. As a matter of principle,
the Supervisory Board reviews and determines the pensionable income from which retirement benefits
are derived. There are two different retirement benefit systems for Executive Board members. Executive
Board members who were appointed for the first time prior to 1 January 2009 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 existing pension commitments
as at 31 December 2016 are presented in the table “Retirement benefits".
In the event of the permanent occupational incapacity of a member of the Executive Board, the company
is entitled to retire the Executive Board member in question. Permanent occupational incapacity exists
if an Executive Board member is unable to perform his or her professional activities for more than six
months, and if it is not expected that his or her occupational capacity will be regained within a further
six months. In such cases, Executive Board members who have a defined benefit pension plan receive
the amount calculated by applying the relevant replacement rate to the pensionable income. Executive
Board members with a defined contribution pension plan receive the benefit assets acquired when the
benefits fall due, plus an allocated amount. The allocated amount corresponds to the full annual pension
contribution that would have been due in the year of leaving service, multiplied by the number of years
between the benefits falling due and the Executive Board member reaching the age of 60, 62, or 63,
respectively.
121
Performance-related remuneration for Executive Board members is predominantly share-based.
Furthermore, it is largely calculated on the basis of long-term performance, with various target criteria
being assessed over a period of five years (performance shares) or four years (share-based performance
bonus: annual disbursement and three-year holding period for shares to be invested), respectively
(see also the section “Share Ownership Guidelines"). The cash component of the performance bonus
(annual disbursement) is the only short-term component within variable remuneration.
70th 75th 80th
60th
50th
Relative TSR vs index (percentile rank)
0
50
100
150
175
200
250
300
Target achievement (%)
Assessment of the Total Shareholder Return (TSR) of the Deutsche Börse share for performance shares
Remuneration report
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
The TSR performance of Deutsche Börse shares is derived from Deutsche Börse AG's ranking, relative
to the constituents of the STOXX Europe 600 Financials index. Executive Board members' target
achievement may range from 0 per cent (floor) to 250 per cent (cap). A O per cent target achievement
is assumed in the event of Deutsche Börse AG's relative five-year TSR falling short of the median,
i.e. being lower than that of at least half of index constituents. Where Deutsche Börse AG's TSR has
outperformed 60 per cent of index constituents, this represents a target achievement of 100 per cent.
A target achievement of 175 per cent is reached if Deutsche Börse AG's TSR has outperformed 75 per cent
of index constituents. The 250 per cent target achievement cap is reached if Deutsche Börse AG's TSR
ranks amongst the top 20 per cent of index constituents - in other words, if it is ranked in the 80th
percentile of the index or higher. Please also refer to the ☑ chart "Assessment of the Total Shareholder
Return (TSR) of the Deutsche Börse share for performance shares".
Assessment of TSR performance of Deutsche Börse shares
Double-digit growh
Net income growth (%)
+20
+15
3) Of the last calendar month prior to the end of the vesting period, including the dividends from the entire vesting period
122
+7.5 +10
Deutsche Börse Group financial report 2016
Target remuneration
Death and permanent occupational incapacity benefits
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 reason for this is 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 relevant replacement rate to the pensionable income. Again, this is subject
to the Executive Board member having served on the Executive Board for at least three years, and having
been reappointed at least once. Members of the Executive Board who have a defined contribution pension
are not eligible for early retirement benefits.
Early retirement pension
Defined contribution pension system: For Executive Board members to whom the defined contribution
pension system applies, the company makes a contribution in the form of a capital component in
each calendar year they serve on the Executive Board. This contribution is determined by applying an
individual replacement rate to the pensionable income. As in the defined benefit pension system, the
pensionable income is determined and regularly reviewed by the Supervisory Board. The annual capital
components calculated in this manner bear annual interest of 3 per cent. The provisions of the defined
contribution pension system apply to Messrs Kengeter and Pottmeyer, and to Ms Stars.
Defined benefit pension system: After reaching the contractually agreed retirement age, members
of the Executive Board to whom the defined benefit pension system is applicable receive a specified
percentage (replacement rate) of their individual pensionable income as a pension. This is subject
to the Executive Board member in question having served on the Executive Board for at least three
years, and having been reappointed at least once. Pensionable income is determined and regularly
reviewed by the Supervisory Board. When the term of office began, the replacement rate was 30 per cent.
It rose by 5 percentage points with each reappointment, up to a maximum of 50 per cent. The
provisions of the defined benefit pension system apply to Messrs Preuss and Tessler.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Retirement benefits
Pension and retirement commitments
The members of the Executive Board receive certain ancillary contractual benefits, such as the provision
of an appropriate company car for business and personal use (with tax being payable by the Executive
Board members on the pecuniary benefit arising from personal use). They also receive taxable contri-
butions towards private pensions. The company has also taken out insurance cover for them, such as
personal accident insurance and a Directors & Officers (D&O) insurance.
Ancillary contractual benefits
Basic remuneration
(monthly payment)
Cash target achievement
(annual payment)
Share target achievement
(annual payment, 3-year
holding period)
Target achievement
(annual calculation,
5-year holding period)
Lever for the incentive components:
0 to 200%
Lever for the incentive components:
0 to 250% per year
Maximum achievable
total remuneration¹)
1) Unlimited share price performance
Performance-related component (share-based payment)
Performance-related component (cash component)
Non-performance-related component (cash component)
% = Proportion of the total target remuneration
Basic remuneration
Cash
Performance
bonus
Shares
Performance shares
Basic remuneration as well as annual and long-term incentive components
2) Cap at 250 per cent of the number granted
Prepayment on the disbursement amount as at 31 March 2019 (first prepayment): the amount of the
first prepayment will be determined by the Supervisory Board; it is supposed to be approximately
one-third of the expected amount to be disbursed.
Relative KPI
Deutsche Börse Group financial report 2016
118
117
The individual targets are set by the Supervisory Board at the beginning of each financial year for each
Executive Board member – taking into account general targets regarding the company's strategy as well
as those with particular importance for the individual Executive Board portfolios (e.g. on financial
indicators, clients, employees and control systems). The Supervisory Board assesses target achievement
for each member of the Executive Board after the end of the respective remuneration year. In a similar
manner to the assessment of net income growth, a range from a lower limit of 0 per cent to an upper
limit of 200 per cent has been defined for achievement regarding individual targets.
Prepayment on the disbursement amount as at 31 March 2020 (second prepayment): the amount
of the second prepayment will be one-third of the disbursement amount determined.
Assessment of individual target achievement
Double-digit growth
+30
+20
+15
+7.5 +10
Determining a performance multiplier
0
-20
1) Of the last calendar month before the start of the vesting period
Cap
Net income growth (%)
-30
Floor
75
100
133
200
Target achievement (%)
-10
Assessment of net income for the performance bonus
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Therefore, the PSP is variable in two dimensions:
The performance multiplier for the performance bonus enables the Supervisory Board to account for
a dilution of equity, or to incorporate achievement of qualitative or quantitative targets (especially
integration parameters) in the final assessment of overall target achievement, in the event of mergers,
acquisitions or divestments. The performance multiplier may be set in a range between at least
0.8 and at most 1.2; it is multiplied by the performance assessment for the performance bonus, taking
the 200 per cent cap into account.
■ The second set of variables is the development of share price and dividends during the vesting
period, with no cap applied to the share price.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Structure of the Performance Share Plan (PSP)
Individual target
remuneration
Ø closing price
Deutsche Börse
shares¹)
Performance period (vesting period)
2016 2017 2018 2019 2020
Principles governing the PSP and assessment of target achievement for performance shares
At the beginning of each financial year, the PSP provides for a prospective quantity of so-called perform-
ance shares to be allotted to each member of the Executive Board. The number of initial (phantom)
performance shares is determined by dividing the amount of individual target remuneration (in euros) by
the average Xetra® closing price of Deutsche Börse shares over the last calendar month prior to the start
of the performance period (fair value of the performance shares). A claim on allocation of phantom perform-
ance shares will only arise upon expiry of the five-year performance period (vesting period). Target
achievement in relation to performance shares is determined on the basis of two components: firstly,
growth in net income over a five-year period, and secondly, the relative performance of Deutsche Börse's
total shareholder return (TSR) compared to the TSR of the industry benchmark STOXX® Europe 600
Financials index during the same period. The final number of phantom performance shares is multiplied
by the average Xetra closing price of Deutsche Börse shares in the last calendar month prior to the end
of the vesting period. The result of this calculation is the disbursement amount to be used for the purchase
of tradeable shares (taking into account the dividends per share paid out during the vesting period). The
disbursement takes place no later than the regular salary payment for the calendar month following
approval of Deutsche Börse AG's consolidated financial statements after the end of the respective vesting
period. The members of the Executive Board are obliged to invest the disbursement amount after tax
in Deutsche Börse AG shares.
Number of
50% net income growth
shares granted
50%
TSR Deutsche Börse
vs index companies
Final number
of (phantom)
performance
shares²)
Ø closing
price
Deutsche
Börse shares ³)
Final
payment for
the purchase
of shares
Absolute KPI
(phantom)
performance
■ The first variable is the number of performance shares, which is derived from the growth path of net
income and from the TSR of Deutsche Börse shares relative to the TSR of the reference index,
each over a five-year period. In this context, the maximum number of performance shares is capped
at 250 per cent of performance shares determined at the beginning of the vesting period.
3) Elected to the Supervisory Board on 11 May 2016
"Declaration of Conformity regarding the German Corporate Governance Code in accordance with
section 161 of the German Stock Corporation Act
4) Left the Supervisory Board on 13 May 2015
5) Left the Supervisory Board on 11 May 2016
6) Elected to the Supervisory Board on 13 May 2015
136
Deutsche Börse Group financial report 2016
Corporate governance declaration
The corporate governance declaration in accordance with section 289a of the Handelsgesetzbuch
(HGB, German Commercial Code) is part of the combined management report. In this declaration,
the Executive Board and Supervisory Boards of Deutsche Börse AG report on the following: the decla-
ration of conformity in accordance with section 161 of the Aktiengesetz (AktG, German Stock Corpo-
ration Act), relevant information on corporate governance practices, the Executive and Supervisory
Boards' working practices and the composition and working practices of their committees, and the
quotas for women established in accordance with sections 76 (4) and 111 (5) of the AktG.
1) The recipient of the remuneration is determined individually by the members of the Supervisory Board.
2) Remuneration including individual attendance fee
On 8 December 2016, the Executive Board and Supervisory Board of Deutsche Börse AG issued the
following declaration of conformity:
1,764.9
Effective as of 1 January 2016, a new compensation system was implemented for the Executive Board
of Deutsche Börse AG. This was also approved by the Annual General Meeting on 11 May 2016. The
long-term variable compensation elements within the framework of this new compensation system are
share-based. Even though a cap is provided in relation to the number of shares which are allocated
to the members of the Executive Board, no cap is foreseen on the maximum achievable bonus amount
as the development of the share price remains uncapped. In our opinion, a cap on the achievable
amount would be inconsistent with the rationale of a share-based compensation system which aims
to achieve an adequate participation in the economic risks and chances of the company by the members
of the Executive Board.
No. 4.2.3 (2) (sentence 6) GCGC recommends that the amount of management compensation shall
be capped, both overall and for individual components. Deutsche Börse AG deviated and will deviate
from this recommendation.
2. Cap on total amount of compensations (no. 4.2.3 (2) (sentence 6) GCGC) and disclosure in the
compensation report (no. 4.2.5 (3) GCGC)
Severance payment caps agreed upon in all current contracts with the members of the Executive Board
complied and will continue to comply with the recommendation no. 4.2.3 (4) GCGC. As in the past,
however, the Supervisory Board reserves the right to deviate from no. 4.2.3 (4) GCGC in the future
under certain circumstances. The Supervisory Board is of the opinion that a deviation may become
necessary in extraordinary cases.
1. Agreement of severance payment caps when concluding Executive Board contracts (no. 4.2.3
(4) GCGC)
The Executive Board and the Supervisory Board of Deutsche Börse AG declare that the recommendations
of the GCGC have been met almost completely and will be met with only few deviations. For details,
please see below:
The following declaration of conformity refers to the version of the German Corporate Governance Code
(GCGC) as of 5 May 2015, published in the Federal Gazette on 12 June 2015.
1,960.7
Declaration of conformity in accordance with section 161 of the AktG
120.0
132.0
Thomas Neiẞe4)
1 Jan-13 May
41.7
Friedrich Merz4)
1 Jan 13 May
56.3
Monica Mächler
125.8
140.0
41.7
1 Jan 13 May
full year
full year
David Krell4)
116.7
103.0
full year
full year
Craig Heimark
Richard M. Hayden 4)
1 Jan-13 May
Amy Yip6)
22.5
86.7
1 Jan-5 Feb
Gerhard Roggemann (Deputy Chairman until 13 May 2015)5)
13 May-31 Dec
137.5
143.0
full year
full year
full year
Johannes Witt
Martin Ulrici 4)
1 Jan-13 May
41.7
Jutta Stuhlfauth
135.0
full year
full year
166.7
166.0
full year
full year
Erhard Schipporeit
144.6
54.2
full year
Heinz-Joachim Neubürger +
Total
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
-11,512
516.7
0
no max.
2,224.6
209.0
2,433.6
674.5
209.0
883.5
no max.
2,224.6
209.0
no max.
209.3
2,433.9
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Andreas Preuss
Deputy CEO
Gregor Pottmeyer
2016
2016
2016
(min)
(max)
2015
no max.
0
516.7
650.0
650.0
24.5
674.5
€ thous.
650.0
24.5
674.5
€ thous.
650.0
24.5
674.5
€ thous.
650.0
24.6
674.6
2016
516.7
300.0
300.0
516.7
1,033.4
0
1,033.4
0
no max.
1,250.0
600.0
0 1,033.4
€ thous.
2016
(min)
2015
831.7
831.7
831.7
831.5
748.5
748.5
748.5
748.4
701.4
0 1,402.8
418.0
560.0
0
1,120.0
320.0
418.0
320.0
701.4
0 1,402.8
28.4
28.5
28.5
28.5
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
800.0
2016
(max)
800.0
800.0
720.0
720.0
720.0
720.0
31.7
31.7
31.7
31.5
800.0
2015
2016
(max)
2016
(min)
variable cash remuneration (individual targets)¹)
1,500.0
129.3
1,500.0
1,500.0
819.7
1,629.3
1,100.0
129.3
1,629.3 1,629.3
129.3
76.4
896.1
0
2,200.0
397.4
397.4
cash component performance bonus (50%) 2)
1,100.0
0
2,200.0
Multi-year variable remuneration
One-year variable remuneration
Total
Ancillary benefits
Fixed remuneration
0
Total 2014 to 2016 tranches
8,527
Total 2014 to 2016 tranches
1) Includes 68,987 phantom shares of the Co-Performance Investment Plan
190,205
130
Deutsche Börse Group financial report 2016
Granted contributions
2,400.0
Carsten Kengeter
appointed as at 4 Apr 2015)
2016
€ thous.
2016
(min)
2016
(max)
2015
€ thous.
€ thous.
€ thous.
CEO (since 1 June 2015,
0
no max.
1,614.6
no max.
3,344.1
1) Remuneration components under the remuneration system which was applicable until the end of 2015
2) Remuneration components under the remuneration system which has been applicable since 2016
3) The target achievement level is capped at 200 per cent. As there is no cap on the development of the share price, no maximum amount has been
specified (no max.). For further information, please refer to the corporate governance declaration.
4) Target achievement levels for net income and total shareholder return as well as for the maximum number of performance shares are all capped
at 250 per cent. As there is no cap on the development of the share price, no maximum amount can be stated (no max.). For further information,
please refer to the corporate governance declaration.
Fixed remuneration
Ancillary benefits
Total
One-year variable remuneration
variable cash remuneration (individual targets)"
2,177.5
cash component performance bonus (50%) 2)
variable cash component (net income target, 3-year term)">
SBP (3-year term)"
share component performance bonus (50%, 3-year holding period) 2)3)
performance shares (5-year term) 2)4)
Total
Service cost
Total remuneration
Hauke Stars
2016
Multi-year variable remuneration
54.2
5,677.5
436.0
variable cash component (net income target, 3-year term) 1)
794.9
SBP (3-year term)"
819.7
share component performance bonus (50%, 3-year holding period) 2)3)
1,100.0
0
no max.
performance shares (5-year term) 2)4)
Total remuneration
1,300.0
no max.
Total
5,129.3 1,629.3
no max.
2,908.1
Service cost
548.2
548.2
548.2
0
100.0
1 Jan-11 May
full year
Total
36.0
36.0
500.0
Hauke Stars
48.0
48.0
500.0
2,000.0
Gregor Pottmeyer
548.2
449.0
989.2
40.0
40.0
1,000.0
Carsten Kengeter
system
436.0
2,711.5
978.8
4,679.5
2,009.7
279.9
164.2
3,011.7
(2,550.2)
€ thous.
Expense recognised
(total)
Hauke Stars
Gregor Pottmeyer
Andreas Preuss
Carsten Kengeter¹)
(Prior-year figures in brackets)
2016 total expense for share-based payments
Deutsche Börse Group financial report 2016
128
127
935.3
1,037.1
209.3
209.0
652.5
3,111.2
290.0
Defined contribution
(4,095.1)
1,166.3
997.3
as at
31 Dec 2015
€ thous.
as at
31 Dec 2016
€ thous.
as at
31 Dec 2015
%
as at
31 Dec 2016
%
€ thous.
2016
Pension expense
Present value/defined
benefit obligation
2016
Replacement rate
Retirement benefits
The following tables contain the corresponding figures for the above-mentioned individual components
of the Executive Board's remuneration for the financial years 2016 and 2015. The remuneration awarded
to each Executive Board member in accordance with No. 4.2.5 (3) of the GCGC is shown in the tables
"Granted contributions" and "Inflows". Details disclosed in accordance with section 314 of the HGB are
shown in the "Inflows" table.
€ thous.
761.6
18.2
779.8
24.6
674.6
674.5
748.4
748.5
24.5
Pensionable
income
2015
€ thous.
€ thous.
1,331.7
403.8
1,735.5
14,839.4
16,791.4
1,377.8
Total
4,756.8
5,550.2
40.0
45.0
577.8
Jeffrey Tessler
10,082.6
11,241.2
50.0
50.0
800.0
Andreas Preuss
system
Defined benefit
169.0
28.4
131.1
120.9
Hauke Stars
8,578
Total 2014 to 2016 tranches
0
-12,045
12,045
Tranche 2014
0
Tranche 2016
-10,752
Tranche 2015
8,578
1,430
7,148
Tranche 2016
Gregor Pottmeyer
10,743
Total 2014 to 2016 tranches
10,752
6,595
1,320
7,915
0
-10,154
10,154
Tranche 2015
8,527
1,422
7,105
106.0
Jeffrey Tessler
7,915
Total 2014 to 2016 tranches
0
-9,669
9,669
Tranche 2014
0
-9,706
9,706
Tranche 2015
0
(3,422.8)
0
1,791
-12,693
-14,391
(17,845.7)
1) Includes the expense recognised for the Co-Performance Investment Plan as well as the Performance Share Plan
3,558.2
(16,023.5)
4,637.8
(3,645.4)
130.3
130.3
(3,261.8)
2) Prior-year figures were adjusted due to the resignation of Reto Francioni (former Chief Executive Officer); thus, they do not match the figures published
in the previous year.
Total 2)
120.9
(3,184.1)
131.1
(3,887.9)
164.2
(4,578.1)
4,091.3
(2,550.2)
(total)
€ thous.
the balance sheet date
Carrying amount as at
(2,693.6)
Jeffrey Tessler
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
129
Number of phantom shares
14,391
Tranche 2014
8,952
12,693
Tranche 2015
Tranche 2016
Andreas Preuss
154,442
134,529
19,913
Number of
phantom shares
as at
31 Dec 2016
3,320
50,437
16,593
84,092
shares since
the grant date
on the
grant date
Adjustments of
number of phantom
Number of
phantom shares
Total 2015 to 2016 tranches
Tranche 2016
Tranche 2015¹)
Carsten Kengeter
10,743
Tranche 2014
28.5
650.0
1,340.0
no max.
0
1,113.4
1,113.4
0
556.7
330.0
660.0
0 1,113.4 330.0
19.2
780.8
18.2
779.8
18.2
779.8
779.8
761.6
€ thous.
€ thous.
761.6
€ thous.
761.6
556.7
680.0
556.7
556.7
0
Total
Ancillary benefits²)
Fixed remuneration
Inflows
Deutsche Börse Group financial report 2016
132
131
2,619.8
no max.
2,853.7 1,183.6
169.0
403.8
2,450.8
no max.
779.8
403.8
2,449.9
403.8
no max.
0
no max.
€ thous.
761.6
18.2
Carsten Kengeter
CEO
2015
(min)
0
no max.
0
701.4
701.4
720.0
850.1
640.0
836.0
no max.
1,360.0
0
1,686.1 1,120.0
no max.
0
1,402.8
0 1,120.0
560.0
Amount of Executive Board remuneration
no max.
2,935.9
831.7
no max.
2016
2016
Jeffrey Tessler
2,718.4
no max.
290.0
279.9
2,428.4
no max.
748.5
279.9
no max.
0
no max.
0
560.0
560.0
2,428.5
279.9
2,708.4 1,028.4
2,935.6
997.3
1,331.7
2,163.4 no max. 3,932.9
4,267.6
1,331.7 1,331.7
2016
(max)
650.0
(since 1 June 2015,
appointed as
Andreas Preuss
1) Prior-year figures were adjusted due to the resignation of Reto Francioni (former Chief Executive Officer); thus, they do not match the figures published
in the previous year.
15,1058) 8,952 12,693
16,593
Number of phantom shares")
3,146.6 4,259.1 3,112.6
-436.0 -1,331.7 -997.3
-548.2
7,329.3
Total remuneration (section 314 of the HGB)
2) Ancillary benefits (other remuneration) comprise salary components such as taxable contributions towards private pensions, company car arrangements,
travel arrangements, living allowances, and expenses for tax and legal consultations.
less service cost
-1,470.6
less variable share component³)
701.4
1,300.0
plus performance shares 4)
850.1
819.7
plus SBP tranche for the remuneration year 6)
-4,578.1 -1,093.2
3) Remuneration components under the remuneration system which was applicable until the end of 2015
4) Remuneration components under the remuneration system which has been applicable since 2016
5) Figures for financial year 2016 refer to the 2013, 2014 and 2015 tranches of the SBP; figures for financial year 2015 refer to the 2012 tranche of the SBP.
6) Corresponds to a 100 per cent target achivement level for the 2015 phantom share bonus. For further information on the supercession of the previous SBP,
please refer to the section,,Supercession of the previous Share Bonus Plan (SBP)".
€ thous.
€ thous.
€ thous.
720.0
2015¹)
2016
2015
2016
2015
2016
2015
2016
€ thous.
720.0
Total
Jeffrey Tessler
Hauke Stars
Gregor Pottmeyer
133
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
8) The average share price (Xetra closing price) of Deutsche Börse shares was €54.27 for the calculation of the number of phantom shares in the assessment
period from August to September 2014.
7) The number of prospective performance shares for the performance period determined at the 2016 grant date is calculated by dividing the target number
by the average share price (XetraⓇ closing price) of Deutsche Börse shares in December 2015 (€78.35)
436.0 1,331.7 997.3
8,048.1 2,762.9 9,467.5 4,353.0
at 4 Apr 2015)
548.2
Service cost
One-year variable remuneration
831.5
831.7
896.1
31.5
31.7
76.4
800.0
2,200.0
€ thous.
€ thous.
819.7
1,500.0
129.3
1,629.3
€ thous.
2015
2016
2015
2016
Deputy CEO
€ thous.
800.0
variable cash remuneration (individual targets)³)
476.9 1,363.0
476.9
477.0
2,326.9 8,135.8 3,355.7
7,499.9
Total
performance shares (5-year term)4)
1,093.2
4,578.1
1,363.0
2,200.0
share component performance bonus (50%, 3-year holding period) 4)
1,470.6
variable share component (SBP tranches 2013-2015/2012)3)5)
2,047.2
954.0
953.9 5,941.1
953.9
variable cash component (consolidated net income target, 3-year term)³)
3,670.6
Multi-year variable remuneration
1,363.0
2,200.0
cash component performance bonus (50%) 4)
477.0
Total remuneration (GCGC)
11,512
Tranche 2016
952.0
753.1
4,035.3
3,887.9
952.0
728.8 3,184.1
682.0
67.7 3,645.4
851.7
863.9 16,766.1 2,753.6
6,048.7
6,540.4
2,774.4 33,527.3 12,737.9
279.9
6,820.3
290.0 209.0
209.3 403.8 169.0 2,772.6 2,101.6
2,846.6 5,431.6 1,933.6 6,532.4 2,943.4 36,299.9 14,839.5
720.0
560.0
516.7
-3,887.9 -728.8 -3,184.1
650.0
680.0
3,719.8
556.7
3,634.8
-67.7 -3,645.4 -863.9-16,766.1 -2,753.6
-403.8 -169.0 -2,772.6 -2,101.6
-279.9 -290.0 -209.0 -209.3
3,212.5 2,547.8 2,555.2 2,306.6 3,039.9 2,590.5 20,396.0 13,704.1
6,788.9
7,148
1,617.0 22,814.8
719.6
€ thous.
761.6
19.2
780.8
€ thous.
€ thous.
4,431.6
232.2
3,751.3
180.1
4,663.8 3,931.4
952.0
359.8
682.0
327.3
851.7
359.8
327.3
376.6 6,048.7 2,017.6
376.6
2,017.6
682.0
851.7
6,048.7
4,839.9 1,448.4 3,866.1
722.4 4,497.1
654.7
10,752
2,556.6 5,222.6 1,724.3 6,128.6
9,706
190.0
175.8
89.7
Ann-Kristin Achleitner³)
11 May - 31 Dec
41.7
1 Jan-13 May
Irmtraud Busch 4)
full year
full year
full year
6,595
Karl-Heinz Flöther
Marion Fornoff
full year
full year
107.0
100.0
Hans-Peter Gabe
full year
142.0
full year
137.1
257.0
250.0
7,105 10,154 46,393 58,410
134
Deutsche Börse Group financial report 2016
Supervisory Board remuneration
With the Annual General Meeting on 11 May 2016, an attendance fee was introduced. For every
meeting of the Supervisory Board or one of its committees attended by a member of the Supervisory
Board in person, be it as a member of the Board or committee or a guest, they will receive an attend-
ance fee of €1 thousand. Where two or more meetings are held on the same day or on consecutive
days, the attendance fee will only be granted once.
Remuneration paid to members of the Supervisory Board for advisory and agency services
There were no further agreements in the reporting period for advisory and agency services 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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
135
Supervisory Board remuneration ¹)
The members of the Supervisory Board receive a fixed annual remuneration of €70 thousand. The
Chairman receives remuneration of €170 thousand and the Deputy Chairman receives €105 thousand.
Members of Supervisory Board committees receive additional fixed annual remuneration of €30 thou-
sand for each committee position they hold. This amount rises to €35 thousand for members of the Audit
Committee. Committee Chairmen's remuneration is €40 thousand, or €60 thousand for the Chairman
of the Audit Committee. If a Supervisory Board member belongs to several Supervisory Board commit-
tees, only the work in a maximum of two committees is remunerated. The remuneration for the work
in the two most highly remunerated committees is awarded. Supervisory Board members who only
belong to the Supervisory Board for part of the financial year, receive one-twelfth of the fixed annual
remuneration and, if applicable, of the remuneration for their committee membership, for each month
or part-month of membership.
2015
20162)
€ thous.
2015
€ thous.
Joachim Faber (Chairman)
Richard Berliand (Deputy Chairman as from 13 May 2015)
full year
2016
full year
■ prepares the Supervisory Board's resolution approving the declaration of conformity in accordance
with section 161 of the AktG, and the corporate governance declaration in accordance with section
289a of the HGB
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Corporate governance declaration
Nomination Committee
Members
■ Joachim Faber
(Chairman)
Composition
■ Gerhard Roggemann
(until 11 May 2016)
■ Amy Yip
■ the Chairman of the Personnel Committee also chairs the Nomination Committee
■ issues the engagement letter to the auditor, including in particular the review or audit of half-yearly
financial reports, and determines the areas of emphasis for the audit and the audit fee
Responsibilities
■ at least two other members (solely shareholder representatives who are also members of the Personnel
Committee)
■ Ann-Kristin Achleitner
(since 11 May 2016)
■ non-audit services provided by the auditor
■ 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
■ prepares the Supervisory Board's recommendation to the Annual General Meeting on the election
of the auditor 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 an auditor, and
makes corresponding recommendations to the Supervisory Board
■ examines the annual financial statements, the consolidated financial statements and the combined
management report, discusses the audit report with the auditor 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
■ half-yearly financial report and any quarterly financial reports, if applicable
■ handles accounting issues, including the oversight of the accounting and reporting process
■ audit reports
■ handles issues relating to the adequacy and effectiveness of the company's control systems,
and in particular to risk management, compliance and internal auditing
■ handles issues relating to the preparation of the annual budget and financial topics, particularly
capital management
Responsibilities
■ prerequisites for the chair of the committee: the person concerned must be independent and must have
specialist knowledge and experience of applying accounting principles and internal control processes
(financial expert)
■ at least four members, who are elected by the Supervisory Board
Composition
■ proposes suitable candidates to the Supervisory Board for inclusion in the Supervisory Board's election
proposal to the Annual General Meeting
■ Johannes Witt
■ ensures the obligatory independence of the external auditors
Personnel Committee
This voluntary business initiative 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, the environment and
anti-corruption. Deutsche Börse Group has submitted annual
progress reports on its implementation of the UN Global Compact
since 2009.
■ Joachim Faber
■ Monica Mächler
144
143
■ discusses the annual reports on significant risks and on the risk management systems at regulated
Group entities, to the extent legally permissible
oversees monitoring of the Group's operational, financial and business risks
■ takes note of and reviews the periodic risk management and compliance reports
■ reviews the risk management framework, including the overall risk strategy and risk appetite,
and the risk roadmap
Responsibilities
■ at least four members, who are elected by the Supervisory Board
Composition
■ Jutta Stuhlfauth
■Erhard Schipporeit
■ Monica Mächler
■Richard Berliand
(Chairman)
Members
Risk Committee
■ approves cases in which the Executive Board grants employees retirement pensions or other individually
negotiated retirement benefits, or proposes to enter into works agreements establishing pension plans
■ approves the grant or revocation of general powers of attorney
■ 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, and approves any exemptions from the requirement to obtain approval
■ addresses succession planning for the Executive Board
■ handles issues relating to the contracts of service for Executive Board members, and in particular
to the structure and amount of their remuneration
Responsibilities
■ at least three other members, who are elected by the Supervisory Board and one of whom must be
an employee representative
■ chairman of the Supervisory Board as committee chairman
Composition
(until 11 May 2016)
■ Amy Yip
■ Marion Fornoff
■Gerhard Roggemann
■ Ann-Kristin Achleitner
(since 11 May 2016)
(Chairman)
Members
■ Karl-Heinz Flöther
www.unglobalcompact.org:
Members
Executive Board and Supervisory Board working practices
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Corporate governance declaration
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 the legal
requirements, the recommendations of the German Corporate Governance Code, international regulations
and recommendations, and other company-specific policies, among other things. 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.
Risk and control management policies
Deutsche Börse Group's whistleblowing system gives employees and external service providers an
opportunity to report non-compliant behaviour. Deutsche Börse Group has engaged Deloitte & Touche
to act as an external ombudsman and to receive any such information submitted by phone or e-mail.
Whistleblowers' identities are not revealed to Deutsche Börse Group.
Whistleblowing system
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 in 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 manage-
ment policies.
Sector-specific policies
The German Sustainability Code ☑www.nachhaltigkeitsrat.de/
en/home: The German Council for Sustainable Development
formally adopts the German Sustainability Code and recom-
mends that the political and business communities make exten-
sive use of this voluntary instrument. Deutsche Börse Group
has published an annual declaration of conformity with the
German Sustainability Code since 2011.
International Labour Organisation www.ilo.org: This UN
agency is the international 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 agreed
to abide by them.
Diversity Charter ☑www.diversity-charter.com: As a signatory
to the Diversity Charter, the company has committed to acknowl-
edging, 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.
Deutsche Börse Group financial report 2016
United Nations Global Compact
-
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
which it considers important is by joining initiatives and organisations advocating generally accepted
ethical standards. Relevant memberships are as follows:
Deutsche Börse Group financial report 2016
138
137
Deutsche Börse Group demands that high standards are met not only by its management and its
employees, but also by its suppliers. The Group's code of conduct for suppliers and service providers
requires them to respect human rights and employee rights, and to comply with minimum standards.
It was amended in 2016 to implement a resolution of the Executive Board incorporating the requirements
of the UK's Modern Slavery Act, which applies to all companies doing business in the United Kingdom.
Most suppliers have signed up to these conditions, and all other key suppliers have made voluntary com-
mitments that correspond to or in fact exceed Deutsche Börse Group's standards. Service providers
and suppliers must sign up to the code or enter into an equivalent voluntary commitment before they
can do business with Deutsche Börse Group. The code is regularly reviewed in the light of current devel-
opments and amended as necessary. The code of conduct for suppliers and service providers can be
found online at www.deutsche-boerse.com > Sustainability > Set an example > Procurement
management.
Code of conduct for suppliers and service providers
Acting responsibly means having values that are shared by all employees throughout the Group. The code
of ethics adopted by the Executive Board, which is applicable throughout the Group, lays the founda-
tions for this by setting minimum ethical and legal standards. It is binding both on members of the
Executive Board and on all other executives and employees within the Group. In addition to specifying
concrete rules, it provides general guidance as to how employees can contribute to putting the values
it sets out into practice in the course of their daily work. The aim of the code of ethics is to provide guid-
ance on working together in the company on a day-to-day basis, to help resolve any conflicts and to
resolve ethical and legal challenges. The code of ethics for Deutsche Börse Group employees can be
found at www.deutsche-boerse.com > Sustainability > Set an example > Employees > Code of ethics.
Group-wide code of ethics
Deutsche Börse Group's global orientation means that binding policies and standards of behaviour
must apply at all of its locations around the world. The main aims of our principles for cooperation
are to ensure responsibility, respect and mutual esteem. We also adhere to these principles when
implementing the Group's business model. Communication with customers, investors, employees
and the public is based on timely information and transparency. In addition to focusing on generating
a profit, Deutsche Börse Group's business is managed in accordance with recognised standards of
social responsibility.
Conduct policies
Information on corporate governance practices
The annual declaration of conformity in accordance with section 161 of the AktG is also available
online at www.deutsche-boerse.com/declconformity. The declarations of conformity for the previous
five years can also be found there.
No. 4.2.5 (3) (subitem 1) GCGC recommends, inter alia, to present the maximum achievable compen-
sation for variable compensation components in the remuneration report. As there will be no cap in
relation to the share-based variable compensation components, the maximum achievable compensation
cannot be presented as recommended in no. 4.2.5 (3) (subitem 1) GCGC. Therefore, the deviation from
the Code results from the fact that there is no cap on the maximum achievable compensation."
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Corporate governance declaration
Values
■ Erhard Schipporeit
(Chairman)
The German Stock Corporation Act enshrines the dual board system – which assigns separate, inde-
pendent responsibilities to the Executive Board and the Supervisory Board - as a fundamental principle.
These responsibilities are set out in detail in the following sections.
Deutsche Börse AG's Executive Board
Audit Committee
Composition and responsibilities
Supervisory Board committees in 2016
Deutsche Börse Group financial report 2016
142
141
The proportion of women in management positions at the two levels directly beneath Deutsche Börse AG's
Executive Board amounted to 6 per cent (level 1) and 10 per cent (level 2) on 15 September 2015,
the date when the Executive Board defined the relevant targets. At that time, the Executive Board
resolved that the then current proportions of women on these executive levels (i.e. 6 per cent for level
1 and 10 per cent for level 2) should be maintained as a minimum requirement until 30 June 2017.
As at 31 December 2016, women in management positions at these two levels accounted for 10 per cent
and 11 per cent respectively. Please refer to the “Non-financial key performance indicators - Target
female quotas adopted" section for further information on Deutsche Börse AG's targets for women in
management positions and the voluntary commitment it made as part of its non-financial key performance
indicators.
At the time when the targets for Deutsche Börse AG's Supervisory Board and Executive Board were
set, 33.33 per cent of Supervisory Board members were women, while the figure for the Executive
Board was 20 per cent. In view of this, the Supervisory Board resolved on 16 June 2015 that the current
proportion of female members of the Supervisory Board (33.33 per cent) and the Executive Board
(20 per cent) should be maintained as a minimum requirement until the end of the implementation
period (30 June 2017). Following the end of the 2016 Annual General Meeting, the proportion of
women members on the Supervisory Board exceeded this minimum requirement and amounted to
41.67 per cent. The proportion of female Executive Board members remained unchanged, at 20 per cent.
In accordance 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 and Executive Board have defined target quotas for women
on these boards and for the two management levels directly beneath the Executive Board; these quotas
apply in all cases to Deutsche Börse AG.
Target figures for women in management positions
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.
The individual committee chairs 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 in the reporting period can be found in the report of the Supervisory Board.
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 full Supervisory Board. Addition-
ally, 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 during the reporting
period. Their individual responsibilities are outlined in the Supervisory Board's bylaws. The commit-
tees' rules of procedure correspond to those for the full Supervisory Board. Details of the duties and
members of the individual committees can be found online at ☑www.deutsche-boerse.com >
Investor Relations > Corporate Governance > Supervisory Board > Committees.
Both boards perform their duties in the interests of the company and with the aim of achieving a sustain-
able increase in value. Their actions are based on the principle of good corporate governance. As
a result, 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 infor-
mation on the course of business in a regular and timely manner. In addition, the Executive Board
regularly informs the Supervisory Board of all issues relating to corporate planning, the company's busi-
ness performance, the risk situation and risk management, compliance, and the company's control
systems. The Chief Executive Officer (CEO) reports to the Supervisory Board without undue delay, orally
or in writing, on matters that are of special importance to the company. The company's strategic
orientation is examined in detail with the Supervisory Board and agreed with it, and implementation
of the relevant measures is discussed at regular intervals. In particular, the chairmen of the two boards
are in regular contact and discuss the company's strategy, business performance and risk manage-
ment. The Supervisory Board can also request reports from the Executive Board at any time, especially
on matters relating to Deutsche Börse AG and on business transactions at subsidiaries that could have
a significant impact on Deutsche Börse AG's position.
Supervisory Board committees and their working practices
The Supervisory Board has resolved a list of requirements for its composition along with concrete
goals. Detailed information on the profile for the Supervisory Board's composition can be found in the
☑corporate governance report.
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. 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 efficiency of its work, discusses potential areas for improve-
ment, and resolves suitable measures where necessary.
The Supervisory Board consists of twelve members, two-thirds of whom are shareholder representatives
and one-third of whom are employee representatives. The term of office for shareholder and employee
representatives on the current Supervisory Board is identical. It lasts three years, and ends at the Annual
General Meeting in 2018.
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 strategi-
cally 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, for deciding on their total remuneration and for examining Deutsche Börse AG's
consolidated and annual financial statements. Details of the Supervisory Board's work in financial year
2016 can be found in the report of the Supervisory Board.
Deutsche Börse AG's Supervisory Board
More information on the Executive Board, its composition, and members' individual appointments and
biographies can be found at ☑www.deutsche-boerse.com/execboard.
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 full
Executive Board, special measures requiring the approval of the Supervisory Board, and other proce-
dural details and the arrangements for passing resolutions. The Executive Board holds regular board
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 full Execu-
tive 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. The CEO also
has a right of veto, although he cannot enforce a resolution against a majority vote.
Deutsche Börse Group financial report 2016
140
139
The members of the Executive Board are jointly responsible for all aspects of management. Irrespective
of this collective responsibility, the individual members manage the areas of the company assigned
to them in the Executive Board's schedule of responsibilities independently, and are personally respon-
sible for them. In addition to the business areas, there are two functional areas of responsibility – that
of the CEO and that of the Chief Financial Officer (CFO). The business areas cover the operating areas,
such as the company's cash market activities and the derivatives business, securities settlement and
custody, information technology and the market data business. The responsibilities within the Executive
Board were reorganised effective 1 January 2016 so as to bundle areas of responsibility and related
issues, and to enhance client orientation. Apart from the existing CEO and CFO functions, the following
three divisions were established: (1) Clients, Products & Core Markets, (2) IT & Operations, Data & New
Asset Classes, and (3) Cash Market, Pre-IPO & Growth Financing. Details can be found in the "Over-
view of Deutsche Börse Group - Organisational structure" section.
-
The Executive Board manages Deutsche Börse AG and Deutsche Börse Group. The Board had five
members in the reporting period. The main duties of the Executive Board include defining the Group's
corporate goals and strategic orientation, managing and monitoring the operating units, and estab-
lishing 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 pro-
ducing financial information during the year. In addition, it must ensure compliance with legal require-
ments and official regulations.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Corporate governance declaration
Strategy Committee
Technology Committee
■ Joachim Faber
(Chairman)
■ oversees monitoring of technological innovations, the provision of IT services, the technical perform-
ance and stability of the IT systems, operational IT risks, and information security services and risks
Corporate
governance
146 Corporate governance and
declaration of conformity
146 Corporate governance at
Deutsche Börse Group
149 Shareholder representation,
transparent reporting and
communication
150 Accounting and auditing
146
Deutsche Börse Group financial report 2016
Corporate governance report
Corporate governance means responsible corporate management and control.
Good corporate governance boosts the confidence that investors, business
partners, employees and the financial markets have in a company. As such,
it is a vital component of its long-term success.
Corporate governance and declaration of conformity
Good corporate governance and control are extremely important for Deutsche Börse Group. As required
by the German Corporate Governance Code (the Code), the Group publishes its corporate governance
report in connection with its corporate governance declaration in accordance with section 289a of the
Handelsgesetzbuch (HGB, German Commercial Code). The Executive Board and the Supervisory Board
of Deutsche Börse AG submitted their annual declaration of conformity in accordance with section 161
of the Aktiengesetz (AktG, German Stock Corporation Act) on 8 December 2016. This declaration is
reproduced in the corporate governance declaration and is also publicly available on the company's
website at www.deutsche-boerse.com/declconformity. The declarations of conformity for the previous
five years can also be found there.
The Executive Board and the Supervisory Board of Deutsche Börse AG have declared that the recom-
mendations of the Code were complied with almost completely in the past and continue to be complied
with subject to only a few exceptions. The Code's suggestions were and continue to be complied with
in full.
Corporate governance at Deutsche Börse Group
As early as 2010, the Executive Board adopted a voluntary target quota of 20 per cent women in middle
and senior management and 30 per cent women in junior management by 2020. These figures apply to
Deutsche Börse Group worldwide, including subsidiaries. During the 2016 reporting period, the proportion
of women remained constant in both middle and senior management while it increased slightly in junior
management.
In addition, Deutsche Börse Group complies with the statutory requirements for equal participation
of women and men in leadership positions and has established targets for Deutsche Börse AG (not
including subsidiaries). Please refer to the ☑ corporate governance declaration and the ☑ section of the
combined management report entitled "Non-financial key performance indicators - Target quotas for
women" for further information on targets for women in management positions.
Flexible upper age limit for Executive Board members
The flexible upper age limit for Executive Board members provides for appointments to run until the
end of the month in which the Executive Board member concerned turns 60. As from the month after
that, they can be reappointed for a period of one year in each case. However, the last appointment
should end at the end of the month in which the Executive Board member turns 65. When appointing
Executive Board members, the Supervisory Board aims to optimise the composition of the Executive
Members
■ 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
Responsibilities
Women in management positions
Composition
■ at least three members, who are elected by the Supervisory Board
(since 11 May 2016)
■ Richard Berliand
■ Gerhard Roggemann
(until 11 May 2016)
■ Jutta Stuhlfauth
■ Amy Yip
Members
■Richard Berliand
(Chairman)
■ Hans-Peter Gabe
■ Craig Heimark
■ addresses fundamental strategic and business issues, as well as important projects for
Deutsche Börse Group
■ Karl-Heinz Flöther
■ advises the Executive Board on matters of strategic importance to the company and its affiliates
Responsibilities
■ at least five other members, who are elected by the Supervisory Board
■ Ann-Kristin Achleitner
chairman of the Supervisory Board as committee chairman
Composition
■ Johannes Witt
(Decrease)/increase in non-current provisions
143.7
135.3
11, 12
Depreciation, amortisation and impairment losses
701.2
1,298.2
Net profit for the period
Consolidated cash flow statement
€m
€m
2015
Note
for the period 1 January to 31 December 2016
Deutsche Börse Group financial report 2016
2016
Changes in working capital, net of non-cash items:
18.2
-848.8
156
76.1
1,351.1
-1,506.1
-223.4
Increase in receivables and other assets
-14.7
-79.9
7.0
-52.3
Other non-cash (income) / expense
3.2
-2.9
10
Deferred tax (income)/expense
56.0
155
Cash deposits by market participants
section 37 (5) of the Körperschaftsteuergesetz (KStG, the German Corporation Tax Act)
Trade payables
Other bank loans and overdrafts
13,840.3
28
Liabilities from banking business
126,006.5
107,479.4
15
Financial instruments held by central counterparties
174.5
316.7
274.3
178.3
23, 27
Other current provisions
26
Liabilities to related parties
33
Other current liabilities
Total current liabilities
1) Thereof €0.4 million (31 December 2015: €0.1 million) receivable from related parties
2) Thereof €2.3 million (31 December 2015: €4.6 million) with a remaining maturity of more than one year from corporation tax credits in accordance with
180,075.8
163,844.8
176,380.7
159,220.3
Total equity and liabilities
Total liabilities
3) Thereof income tax expense: €231.9 million (2015: €290.5 million)
165,795.3
26,869.0
27,777.6
525.7
150,550.5
30
29
1.8
11,681.4
42.2
372.8
0.1
471.2
3.6
330.4
-386.8
0.3
2,100.0
Cash flows from operating activities
33
1,621.4
10.1
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
acquire subsidiaries, net of cash acquired
Effects of the disposal of (shares in) subsidiaries, net of cash disposed
Proceeds from the disposal of shares in associates and joint ventures
Net increase in current receivables and securities from banking business with an
original term greater than three months
Proceeds from disposals of available-for-sale non-current financial instruments
Proceeds from disposals of other non-current assets
Cash flows from investing activities
-414.6
465.3
-371.9
299.5
Tax provisions³)
-66.7
Increase (decrease) in current liabilities
276.9
-7.7
Increase (decrease) in non-current liabilities
2.5
Proceeds from sale of treasury shares
-5.5
-563.0
3.2
Cash flows from operating activities excluding CCP positions
Changes in liabilities from CCP positions
Changes in receivables from CCP positions
856.6
796.6
Net (gain) loss on disposal of non-current assets
-420.1
Payments to non-controlling interests
Repayment of long-term financing
33
578.5
-1,592.3
3.8
-15.9
2,309.0
202.8
-717.5
0
3.6
-321.6
- 150.5
0
-495.0
1,089.5
-2,065.0
400.0
0
-169.7
208.3
-136.5
149.9
0.1
0
Proceeds from long-term financing
Repayment of short-term financing
Proceeds from short-term financing
Dividends paid
Cash flows from financing activities
Net change in cash and cash equivalents
-115.1
-49.8
-112.2
Proceeds from non-controlling interests
-42.3
-815.5
-5.0
-14.1
-3.9
-641.5
917.4
-5.3
-178.9
CURRENT LIABILITIES
1,920.9
8,669.8
3.60
6.81
34
35.7
25.5
665.5
1,272.7
701.2
1,298.2
52.2
3.87
550.6
649.0
-227.5
-1.6
-1.5
-284.5
747.6
10
878.1
1,033.6
-63.6
-79.2
9
2
6.1
3.31
0.29
€m
€m
2015¹)
2016
Note
(restated)
Deferred taxes
Items that will not be reclassified to profit or loss:
Changes from defined benefit obligations
Net profit for the period reported in consolidated income statement
for the period 1 January to 31 December 2016
2.94
income
Consolidated statement of comprehensive income
153
10,585.4
0.29
2.94
3.31
3.87
3.60
6.81
34
Consolidated statement of comprehensive
1,298.2
4.6
-1.5
935.6
Earnings before tax (EBT)
Financial expense
Financial income
Earnings before interest and tax (EBIT)
Result from equity investments
Operating costs
Other operating expenses
Depreciation, amortisation and impairment losses
Staff costs
2,220.3
Other tax
2,388.7
-273.8
-285.2
4
Volume-related costs
2,494.1
2,673.9
23.6
32.6
4
50.6
Net revenue (total revenue less volume-related costs)
6
Income tax expense
Net profit for the period from discontinued operations
1,108.2
36.9
8
-1,283.2
-1,317.4
-564.5
-600.7
6
- 119.0
-131.0
Net profit for the period from continuing operations
11, 12
-585.7
5
1) See note 2.
from continuing operations
from discontinued operations
Earnings per share (diluted) (€)
from discontinued operations
from continuing operations
Earnings per share (basic) (€)
Net profit for the period attributable to Deutsche Börse AG shareholders
Net profit for the period attributable to non-controlling interests
Net profit for the period
-599.7
84.0
701.2
3.2
Other loans¹)
Other financial instruments
Receivables and securities from banking business
Other equity investments
Investments in associates and joint ventures
Financial assets
Payments on account and construction in progress
Computer hardware, operating and office equipment
Fixtures and fittings
Property, plant and equipment
Note
Other intangible assets
Goodwill
Software
Intangible assets
NON-CURRENT ASSETS
Assets
as at 31 December 2016
Consolidated balance sheet
Deutsche Börse Group financial report 2016
154
111.5
Payments on account and assets under development
497.1
31 Dec 2016
€m
€m
0.2
32.3
219.4
2,018.6
38.5
34.3
255.4
1,604.8
26.0
0.4
13
109.7
113.5
0.7
2.2
31 Dec 2015
68.7
40.3
35.9
12
4,633.0
3,973.7
1,356.3
152.5
225.4
2,898.8
203.8
2,721.1
188.9
859.9
11
75.4
-27.3
629.8
36.1
105.7
Remeasurement of other financial instruments
2.8
2.7
Remeasurement of cash flow hedges
124.2
-200.7
20
Exchange rate differences from discontinued operations
0.6
8.6
-0.6
5.2
-3.8
20
Exchange rate differences from continuing operations
Items that may be reclassified subsequently to profit or loss:
3.1
-19.5
-0.1
7.8
10, 20
Other comprehensive income from investments using the equity method
766.3
Deferred taxes from continuing operations
10, 20
24.9
741.3
1,263.4
777.4
1,288.3
1) See note 2
thereof discontinuing operations
thereof continuing operations
Total comprehensive income attributable to the shareholders of Deutsche Börse AG
thereof non-controlling interests
Deferred taxes from discontinued operations
thereof Deutsche Börse AG shareholders
76.2
-9.9
Other comprehensive income after tax
73.1
9.6
-64.9
147.2
10, 20
-3.4
-40.9
Total comprehensive income
4
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
2,557.3
4.7
Income tax assets²)
107.6
94.2
Other current assets
18
514.2
122,668.7
1,022.3
138,107.8
Restricted bank balances
554.1
Other cash and bank balances
19
27,777.6
1,458.1
26,870.0
151,904.4
711.1
165,688.9
Total assets
163,844.8
180,075.8
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Consolidated balance sheet
Equity and liabilities
Total current assets
Note
126,289.6
10,142.9
Receivables from related parties
Executive and Supervisory Boards | Management report Governance Financial statements
Corporate governance report
Financial instruments held by central counterparties
15
5,856.6
7,175.2
Other non-current assets
Deferred tax assets
Total non-current assets
CURRENT ASSETS
Receivables and other current assets
13,465.5
669.8
2.0
10
11.7
11,940.4
148.3
14,386.9
Financial instruments held by central counterparties
15
107,909.6
Receivables and securities from banking business
16
Trade receivables
17
13.2
62.5
Board as a whole in the interests of the company. Experience, sector-specific expertise, and personal
and professional qualifications play an important role here. Depending on the Executive Board position
to be filled, it is not only the range and depth of the specific experience required that matter, but also
whether this experience is up to date. The wording of the flexible upper age limit has deliberately been
loosely formulated so as not to restrict the Supervisory Board's flexibility when deciding on appointments.
31 Dec 2016
€m
EQUITY
167.9
140.7
Other non-current provisions
23, 24
117.0
131.7
Deferred tax liabilities
10
235.7
581.3
22
Interest-bearing liabilities
2,284.7
2,546.5
Financial instruments held by central counterparties
Other non-current liabilities
15
5,856.6
7,175.2
7.9
10.0
Total non-current liabilities
25
31 Dec 2015
€m
Provisions for pensions and other employee benefits
3,695.1
Subscribed capital
Share premium
Treasury shares
Revaluation surplus
Accumulated profit
Shareholders' equity
Non-controlling interests
Total equity
20
193.0
1,327.8
NON-CURRENT LIABILITIES
193.0
1,326.0
-315.5
41.5
-5.3
3,231.4
2,357.9
4,482.3
3,556.1
142.2
2,419.9
4,624.5
-311.4
Objectives for the Supervisory Board's composition
139.0
Required qualifications
Deutsche Börse Group financial report 2016
150
149
Additionally, Deutsche Börse AG submitted a Communication on Progress for 2016 for the UN Global
Compact. This voluntary business initiative 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, the environment and anti-corruption. Good 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: ☑www.deutsche-boerse.com > Sustainability > Our responsibility > UN Global
Compact.
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 the ☑www.deutsche-boerse.com website. Deutsche Börse AG provides
information about its consolidated and annual financial statements 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.
Shareholders exercise their rights at the 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 they 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 Supervi-
sory Board and resolves to approve 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. AGMS - at which the Executive Board and the Supervisory Board give an account for
the past financial year take place once a year.
Shareholder representation, transparent reporting and communication
Executive and Supervisory Boards | Management report Governance Financial statements
Corporate governance report
Deutsche Börse AG regards regular reviews of the efficiency of the Supervisory Board's work, which are
required under section 5.6 of the Code, as a key component of good corporate governance. The 2016
efficiency review was conducted with external support, and focused on the following areas: the tasks
and composition of the Supervisory Board, cooperation within the Supervisory Board and with the
Executive Board, the provision of information, Supervisory Board meetings and the work performed by
the committees. The review yielded positive results overall. Proposals for improvement were discussed
and measures to implement them were introduced.
Efficiency review of the Supervisory Board's work
As a matter of principle, members of the Supervisory Board are responsible for ensuring their own training
and further education. In addition, Deutsche Börse AG complies with the recommendation in section
5.4.5 (2) of the Code to appropriately support the training and further education of Supervisory Board
members. For example, the company offers special introductory seminars for new Supervisory Board
members and holds workshops on selected strategic issues and, where necessary, specialist topics.
Education and training measures for the Supervisory Board
Gerhard Roggemann resigned as a shareholder representative on Deutsche Börse AG's Supervisory
Board effective from the end of the AGM on 11 May 2016; Ann-Kristin Achleitner was elected as
a new shareholder representative by the AGM. Prof. Achleitner has particular expertise in the areas
of regulatory affairs and capital markets.
Election of a shareholder representative to the Supervisory Board
Board and its committees.
The composition of Deutsche Börse AG's Supervisory Board reflects the goals described above. Please
see www.deutsche-boerse.com/supervboard for further information on the members of the Supervisory
The rules set out by the Supervisory Board in its bylaws specifying a flexible upper age limit (generally
70) are taken into account when candidates are proposed to the AGM. Additionally, the Supervisory
Board's bylaws lay down a regular maximum membership period of twelve years, and the Supervisory
Board should also consider this when making proposals.
Flexible upper age limit and length of membership
The Supervisory Board consists of twelve members. Since the 2016 Annual General Meeting (AGM),
five of these (41.67 per cent) have been women - three shareholder representatives and two employee
representatives. As a result, the Supervisory Board has exceeded its own minimum target quota for
female membership of 33.33 per cent. In addition, four Supervisory Board members are not German
citizens, a fact that provides for adequate international representation. This means the Supervisory
Board has achieved its objective of ensuring that the Group's international profile continues to be reflected
in the Board's composition.
Female representation and international profile
According to section 5.4.2 of the Code, a Supervisory Board member cannot be considered independent
in particular if he or she has personal or business relations with the company, its executive bodies,
a controlling shareholder, or an enterprise associated with a controlling shareholder which may cause
a substantial and not merely temporary conflict of interests. The Supervisory Board has resolved that
at least half of its shareholder representatives should be independent as defined above. Currently, all
shareholder representatives are considered independent.
Independence
Deutsche Börse Group financial report 2016
148
147
Accounting and auditing
Deutsche Börse AG's corporate report provides shareholders and interested members of the public
with detailed information on Deutsche Börse Group's business performance in the year under review.
Additional information is published in its half-yearly financial report and two quarterly statements.
The annual financial statement documents and the corporate report are published within 90 days of
the end of the financial year (31 December); intrayear financial information (the half-yearly financial
report and two 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 full Supervisory Board and with the auditor, 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 report is reviewed by the auditor. In line with the proposal by the Supervisory Board,
the 2016 AGM elected KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, (KPMG) to audit its 2016
annual and consolidated financial statements and to review its half-yearly financial report in the year
under review. The lead auditor, Karl Braun, has been responsible for the audit since 2011 and the deputy
lead auditor, Andreas Dielehner, since 2013. 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, finan-
cial 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 contin-
ued to be the case during the reporting period. It also oversaw the financial reporting process in 2016.
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 of the
notes to the consolidated financial statements.
Consolidated financial
statements/notes
The Supervisory Board has resolved a list of requirements that set out concrete objectives for the com-
position of the Board and in particular for the nomination of new members, as required by section 5.4.1
of the Code:
4
2015¹)
€m
€m
2016
Note
(restated)
Total revenue
Other operating income
Net interest income from banking business
Sales revenue
for the period 1 January to 31 December 2016
+
Consolidated income statement
152
288 Auditor's report
287 Responsibility statement by the
Executive Board
257 Other disclosures
Consolidated balance sheet disclosures
Consolidated income statement disclosures
Basis of preparation
205
160
financial statements
160 Notes to the consolidated
152 Consolidated financial statements
Deutsche Börse Group financial report 2016
+
194
+
+
Richard Berliand
+
Joachim Faber (Chairman)
+
Regulatory
requirements
Information technology,
and the clearing and
settlement business
+
Accounting, finance,
risk management and
compliance
Supervisory Board members' company-specific qualifications
■regulatory requirements
■ information technology, and the clearing and settlement
business
■ accounting, finance, risk management and compliance
■ exchange and capital market business models
The company-specific qualifications relate to the Supervisory
Board as a whole. Sound knowledge of the following in particular
is required:
Company-specific qualifications
■ integrity and suitability of character for the position
■ analytical and strategic abilities
■ basic knowledge and understanding of the German
corporate governance system
■ understanding of business issues
Ideally, all Supervisory Board members must have the
following basic qualifications:
Basic qualification requirements
Qualification requirements for members of the Supervisory Board of Deutsche Börse AG
Amy Yip
Members of the Supervisory Board should have the knowledge, skills and professional experience ne-
cessary to carry out the duties of a Supervisory Board member at an international company. The Super-
visory Board has defined the general (basic) and company-specific qualifications that are required for
this. The company-specific requirements are derived from the company's business model, its concrete
objectives, and specific regulations applicable to Deutsche Börse Group. In addition, members should
have enough time available to perform their duties.
+
+
Exchange and capital
market business
models
Ann-Kristin Achleitner
+
Karl-Heinz Flöther
+
+
Craig Heimark
+
+
Monica Mächler
+
+
(Deputy Chairman)
+
Erhard Schipporeit
+
2,285,314
€
25,000
2002
€
2013
-93
0
265
171
50
€
2013
3,972
19,004
17,182
13,168
101,000
1,103,930
2007
92,0005)
496,1725) 6)
188,005
172,0845)
2002
JPY
66,915
49,0005)
€
3,6005)
169,8495)
6,1295)
€
25,000
140
346,133
205,9095)
8,5025)
1,513,678
167,1734)
33
2,454,949
1,180,353
14,686,2615)
1,193,4985)
€
€
US$
0
9,911
US$
Initially
consolidated
174,2225)
Net profit/loss
2016
thousand
2) Until 27 July 2016: Market News International Inc.
3) Assam SellerCo Service, Inc. is part of the Assam SellerCo, Inc. subgroup.
4) Before profit transfer or loss absorption
23,049
5) Preliminary figures
165
Basis of preparation
Ordinary share
Currency
capital
thousand
Equity¹)
thousand
Total assets
thousand
Sales revenue
2016
thousand
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
24,262
13,877
149
0
2,098
2,098
0
US$
2011
162
3,549
1,626
1,745
1,301
CNY
2009
n.a.
n.a.
n.a.
n.a.
n.a.
2009
2009
20,0415)
23
1,3195)
8,8725)
286,1956)
2005)
CZK
25
€
1 Jan 2015
2000
7,0205)
16 Mar 2016
-13
-9425)
177
259,3265)
3,0045)
15,6135)
40,0035)
4005)
US$
0
4795)
6065)
S$
12
236,9745)
€
6,000
1,635,692
16
16 July 2015
1,023,3775)
61,7015)
2006
24,805
16,9876)
512,630"
1998
2,2094)
1998
€
25
79
1) 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
0
201
448,1485)
1,876,080
25,714,767
364,813
25,000
€
25
2009
€
-2,0605)
2014
1,823
25,414
472,7605)
232,902
168,771
110,557
30,000
€
13,490
319,5595)
11,4805)
195,1135)
CZK
9,870
6,211
€
2002
47,517
2010
5485)
160,2005)
2008
5,910
2002
05)
1,1305)
4725)
5,0005)
€
2013
1765)
1,1055)
10,4335)
10,3975)
10,0005)
€
2013
-4,5535)
965)
16,1245)
15,2375)
20,0005)
€
2013
(100.00)
665.5
(79.44)
Dividends paid
21
-420.1
-386.8
0
0
Acquisition of the interest of non-controlling
shareholders in STOXX Ltd.
0
-428.0
0
0
Net profit for the period attributable to
Deutsche Börse AG shareholders
1,272.7
90
1,272.7
2,446.6
2,357.9
Balance as at 1 January
20
105.7
8.6
Remeasurement of cash flow hedges
2.7
2.8
2.7
2.8
Deferred taxes
665.5
10
-34.3
-4.0
-34.3
-4.0
Balance as at 31 December
41.5
-5.3
Accumulated profit
10
8.6
Exchange rate differences and other
Deferred taxes
2016
€m
2015
€m
2016
€m
2015
€m
4,482.3
3,556.1
1,263.4
741.3
Non-controlling interests
Balance as at 1 January
139.0
322.4
Acquisition of the interest of non-controlling
shareholders in STOXX Ltd.
0
-225.8
Note
comprehensive income
thereof included in total
Shareholders' equity (brought forward)
Balance as at 31 December
10
-127.5
148.4
125.0
-204.5
129.6
-64.4
148.4
adjustments
-64.4
2,357.9
Shareholders' equity as at 31 December
4,482.3
3,556.1
1,263.4
741.3
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Consolidated statement of changes in equity
159
3,231.4
0
105.7
3.2
252.0
7.5
205.5
7.3
-257.5
-192.8
-277.8
-207.7
158
Deutsche Börse Group financial report 2016
Consolidated statement of changes in equity
for the period 1 January to 31 December 2016
Subscribed capital
Balance as at 1 January
Balance as at 31 December
Note
2016
€m
2015
-4.8
-68.5
-1,579.4
-146.9
33
-1,579.4
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Consolidated cash flow statement
157
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
Additional information on cash inflows and outflows contained in cash flows from
operating activities:
Interest-similar income received
€m
Dividends received
Income tax paid
Note
2016
€m
2015
€m
1,351.1
-1,506.1
81.4
Interest paid
Remeasurement of other financial instruments
193.0
193.0
-311.4
-315.5
thereof included in total
comprehensive income
2016
€m
2015
€m
Revaluation surplus
20
Balance as at 1 January
-5.3
-15.9
Changes from defined benefit obligations
22
-27.3
3.2
-27.3
3.1
4.1
124.4
0
193.0
Share premium
Balance as at 1 January
1,326.0
1,249.0
Sale of treasury shares
1.8
77.0
193.0
Balance as at 31 December
1,326.0
Treasury shares
Balance as at 1 January
Placement of treasury shares
Sales under the Group Share Plan
Balance as at 31 December
-315.5
-443.0
1,327.8
Changes due to capital increases/decreases
-21.6
6.3
Deutsche Börse Services s.r.o.
Eurex Frankfurt AG
Eurex Clearing AG
Eurex Clearing Security Trustee GmbH
Eurex Bonds GmbH
Eurex Repo GmbH
Equity interest
as at 31 Dec
2016
direct/(indirect)
%
100.00
(100.00)
Beijing, China
(100.00)
Chicago, USA
(100.00)
Frankfurt/Main, Germany
100.00
Deutsche Börse Photography Foundation gGmbH
Deutsche Boerse Systems Inc.
Deutsche Boerse Market Data+Services Singapore Pte. Ltd.
DB1 Ventures GmbH
Need to Know News, LLC
Börse Frankfurt Zertifikate AG
Börse Frankfurt Zertifikate Holding S.A. in liquidation
Clearstream Holding AG
Clearstream International S.A.
Clearstream Banking S.A.
Clearstream Banking Japan, Ltd.
REGIS-TR S.A.
Luxembourg, Luxembourg
Clearstream Banking AG
Clearstream Operations Prague s.r.o.
Clearstream Services S.A.
Deutsche Boerse Asia Holding Pte. Ltd.
Domicile
New York, USA
New York, USA
Eurex Clearing Asia Pte. Ltd.
Eurex Exchange Asia Pte. Ltd.
Clearstream Global Securities Services Limited
MNI Financial and Economic Information (Beijing) Co. Ltd.
100.00
100.00
Frankfurt/Main, Germany
100.00
Singapore, Singapore
100.00
Chicago, USA
100.00
Frankfurt/Main, Germany
100.00
Prague, Czech Republic
100.00
Frankfurt/Main, Germany
100.00
Frankfurt/Main, Germany
(100.00)
Frankfurt/Main, Germany
(100.00)
Frankfurt/Main, Germany
(100.00)
Singapore, Singapore
(100.00)
Singapore, Singapore
Luxembourg, Luxembourg
(100.00)
Luxembourg, Luxembourg
(100.00)
Tokyo, Japan
(100.00)
Luxembourg, Luxembourg
(50.00)
Frankfurt/Main, Germany
Frankfurt/Main, Germany
Cork, Ireland
(100.00)
Prague, Czech Republic
(100.00)
Luxembourg, Luxembourg
(100.00)
Singapore, Singapore
100.00
(100.00)
Assam SellerCo Service, Inc. 3)
Assam SellerCo, Inc. 2)
Company
3,695.1
1,288.3
777.4
160
Deutsche Börse Group financial report 2016
Notes to the consolidated financial statements
Basis of preparation
1. General principles
Company information
Deutsche Börse AG ("the company") is incorporated as a German public limited company ("Kapitalgesell-
schaft") and is domiciled in Germany. The company's registered office is in Frankfurt/Main. 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 35.
Basis of reporting
The 2016 consolidated financial statements have been prepared in compliance with International Finan-
cial Reporting Standards (IFRS) and the related interpretations issued by the International Financial
Reporting Standards Interpretations Committee (IFRIC), as adopted by the European Union in accord-
ance 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 315a (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
The following standards and interpretations issued by the IASB and adopted by the European
Commission were applied to Deutsche Börse Group for the first time in the 2016 reporting period:
Amendment to IFRS 11 "Joint Arrangements - Acquisitions of Interests in Joint Operations"
(May 2014)
The amendment clarifies that acquisitions of interests or additional interests in a joint operation that
constitutes a business within the meaning of IFRS 3 must be accounted for in accordance with the
principles of business combinations accounting in IFRS 3 and other applicable IFRS, with the exception
of those principles that conflict with the guidance in IFRS 11. The amendment must be applied for
financial years beginning on or after 1 January 2016. The amendment has been adopted by the EU
on 24 November 2015.
161
4,624.5
Total equity as at 31 December
36.1
24.9
0
0
Non-controlling interests in net income of
subsidiaries for the period
25.5
35.7
25.5
35.7
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Exchange rate differences and other
-0.7
0.4
-0.6
0.4
Total non-controlling interests
as at 31 December
142.2
139.0
adjustments
Basis of preparation
Amendments to IAS 16 “Property, Plant and Equipment” and IAS 38 "Intangible Assets
Clarification of Acceptable Methods of Depreciation and Amortisation" (May 2014)
The amendments clarify which methods are appropriate for depreciating property, plant and equipment
and for amortising intangible assets. In particular, they clarify that revenue-based depreciation of property,
plant and equipment is not appropriate at all, and that revenue-based amortisation of intangible assets
is only permitted in defined exceptional circumstances. The amendments must be applied for financial
years beginning on or after 1 January 2016. The amendments have been adopted by the EU on
2 December 2015.
163
Basis of preparation
Deutsche Börse Group initiated its IFRS 15 implementation project in 2015. This project comprises
three phases: phase I focuses on a detailed analysis of revenue from contracts with customers. Phase II
assesses the implications of IFRS 15 regarding potential adjustment requirements to existing accounting
methods as well as IT processes and systems. Phase III will be the implementation of the adjustment
requirements identified during phase II. Phases I and II are currently work in progress, and will be con-
tinued throughout 2017. Phase III is scheduled to start in financial year 2017. Based on the current
findings of the IFRS 15 analysis, Deutsche Börse Group expects adjustments as to the time at which
revenue shall be recognised. Furthermore, we expect additional line items to be added to the consoli-
dated balance sheet to recognise contract assets and liabilities.
Deutsche Börse Group did not exercise the early application option for IFRS 15, but will use the modified
retrospective approach and disclose the cumulative effect from the first-time application of IFRS 15 for
the financial year beginning on 1 January 2018.
IFRS 16 "Leases" (January 2016)
IFRS 16 introduced new rules for the recognition of leases. The new standard sets out the principles for
the recognition, measurement, presentation and disclosure of all long-term leases on the lessee's state-
ment of financial position, whereby the right of use is recognised as an asset, and the payment obliga-
tion in the form of a financial liability. The standard must be applied for financial years beginning on or
after 1 January 2019; earlier application is permitted only if that entity is also applying IFRS 15 at the
same time. The standard has not yet been adopted by the EU.
Deutsche Börse Group's internal project for the assessment of implications from IFRS 16 was initiated
in the fourth quarter of 2016. The project has not yet delivered any detailed findings. However, we
expect the right-of-use approach to have a significant effect on the balance sheet structure and the
respective key figures.
Amendments to IAS 40 "Transfers of Investment Property" (December 2016)
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
The amendments clarify the conditions for transfers to, or from, investment property classification. More
specifically, the question was whether a property under construction or development that was previously
classified as inventory could be transferred to investment property when there was an evident change in
use. The amendments must be applied for financial years beginning on or after 1 January 2018; earlier
application is permitted. The amendments have not yet been adopted by the EU.
IFRIC 22 "Foreign Currency Transactions and Advance Consideration" (December 2016)
This interpretation aims to clarify the accounting for transactions that include the receipt or payment
of advance consideration in a foreign currency. IFRIC 22 must be applied for financial years beginning
on or after 1 January 2018; earlier application is permitted. This interpretation has not yet been
adopted by the EU.
164
Deutsche Börse Group financial report 2016
2. Basis of consolidation
Deutsche Börse AG's equity interests in subsidiaries, associates and joint ventures as at 31 Decem-
ber 2016 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)
Amendments resulting from the “Annual Improvements Project 2014–2016” (December 2016)
Amendments affecting the standards IFRS 1, IFRS 12 and IAS 28. Amendments to IFRS 1 and IAS 28
must be applied for financial years beginning on or after 1 January 2018; amendments to IFRS 12 must
be applied for financial years beginning on or after 1 January 2017. The amendments have not yet
been adopted by the EU.
Frankfurt/Main, Germany
IFRS 15 specifies the recognition of revenue from contracts with customers. In accordance with IFRS 15,
revenue has to be recognised when the customer obtains control over the contractual goods and services,
and can obtain benefits from these goods and services. Revenue shall be recognised in an amount that
reflects the consideration to which the company expects to be entitled. The new IFRS 15 regulations
supersede the currently applicable regulations set forth in IAS 11 and IAS 18. The standard has been
adopted by the EU on 22 September 2016 and must be applied for financial years beginning on or after
1 January 2018; earlier application is permitted.
The amendments clarify that the extent to which gain or loss is recognised for transactions with an asso-
ciate or joint venture depends on whether the assets sold or contributed constitute a business operation.
The application date has been postponed indefinitely.
Amendments resulting from the “Annual Improvements Project 2012–2014” (September 2014)
Amendments affecting the standards IFRS 5, IFRS 7, IAS 19 and IAS 34 are planned. The amendments
must be applied for financial years beginning on or after 1 January 2016. The amendments have been
adopted by the EU on 15 December 2015.
Amendment to IAS 1 "Presentation of Financial Statements
(December 2014)
Disclosure Initiative"
The amendment to the standard IAS 1 is aimed at improving financial reporting disclosures in the notes.
Among other things, they emphasise more clearly the concept of materiality, define new requirements
for the calculation of subtotals, allow for greater flexibility in the order in which disclosures in the notes
are presented, introduce clearer presentation guidance for accounting policies and add requirements
for presenting an entity's share of other comprehensive income of associates and joint ventures in the
statement of comprehensive income. The amendment must be applied for financial years beginning on
or after 1 January 2016. The amendment has been adopted by the EU on 18 December 2015.
New accounting standards - not yet implemented
The following standards and interpretations, which are relevant to Deutsche Börse Group and which
Deutsche Börse Group did not adopt in 2016 prior to the effective date, have been published by
the IASB prior to the publication of this financial report and partially adopted by the European
Commission.
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. The amendments must be applied for financial years beginning on or after
1 January 2018. The amendments have not yet been adopted by the EU.
Amendments to IAS 7 "Statement of Cash Flows" Disclosure Initiative (January 2016)
The amendments follow the objective that entities shall provide disclosures allowing users of financial
statements to evaluate changes in liabilities arising from financing activities. The amendments must be
applied for financial years beginning on or after 1 January 2017. The amendments have not yet been
adopted by the EU.
IFRS 15 “Revenue from Contracts with Customers" (May 2014)
IFRS 9 "Financial Instruments" (July 2014)
162
Deutsche Börse Group financial report 2016
project consists of three phases: Classification and Measurement (phase I), Impairment (phase II), and
Hedge Accounting (phase III).
Our phase I analysis came to the conclusion that the majority of debt instruments are held within a
business model whose objective is to hold debt instruments in order to collect contractual cash flows.
As a consequence, the large majority of debt instruments currently held in the available-for-sale category
will be measured at amortised cost going forward. Furthermore, we will no longer recognise debt
instruments directly in equity at their fair value. Equity instruments in the available-for-sale category,
so far recognised at their fair value directly in equity, will generally be classified as at fair value through
profit or loss going forward. However, recognition at fair value directly in equity applied so far remains
an option, which may be applied on a one-time basis to individual financial instruments. In the future,
equity instruments currently recognised at historical cost will in any case be measured at fair value.
Again, Deutsche Börse Group may decide (for individual instruments and on a one-time basis) to
recognise fair value developments in other comprehensive income, or through profit or loss. Phase II
addresses the revision of current impairment processes. The change from the incurred loss model to
the expected loss model requires amendments to the Group-internal risk analysis and the calculation
of expected losses. At the time this report was produced, Deutsche Börse Group was carrying out an
analysis of the consequences on financial reporting. However, we expect only minor implications from
phase III, given that Deutsche Börse Group's reporting on hedging relationships is very limited.
The amendments introduced with IFRS 9 require adjustments to our IT systems. The implementation
requirements identified so far result mainly from project phase I, and particularly affect the SAP-CFM
subledger.
Amendments to IAS 12 "Recognition of Deferred Tax Assets for Unrealised Losses”
(January 2016)
Given the current diversity in accounting practice, the amendments to IAS 12 particularly aim to clarify
the recognition of deferred tax assets for unrealised losses on assets measured at fair value. The amend-
ments must be applied for financial years beginning on or after 1 January 2017. The amendments have
not yet been adopted by the EU.
Amendments to IFRS 10 and IAS 28 "Sales or Contributions of Assets Between an Investor and its
Associate/Joint Venture" (September 2014)
IFRS 9 introduces new requirements for the recognition and measurement of financial instruments. The
new standard was adopted by the EU on 22 November 2016, and must be applied for financial years
beginning on or after 1 January 2018. The new requirements mainly apply to the classification and
measurement of financial instruments, and introduce a new expected loss impairment model for finan-
cial assets as well as a new set of rules for hedge accounting. Deutsche Börse Group initiated its IFRS 9
implementation project in 2015. In line with the structure of the new standard, Deutsche Börse Group's
37
6) Thereof 6.72 per cent indirectly and 22.21 per cent directly held via Powernext SA
2013
London, United Kingdom
360T Asia Pacific Pte. Ltd.
360 Trading Networks Inc.
STOXX Australia Pty Limited
Tradegate Exchange GmbH
360 Treasury Systems AG
STOXX Ltd.
Impendium Systems Ltd
100.00
Luxembourg, Luxembourg
Finnovation S.A.
100.00
Frankfurt/Main, Germany
(28.14)
Vienna, Austria
(55.19)
Brøndby, Denmark
(17.38)
Amsterdam, Netherlands
(28.97)
Bern, Switzerland
(28.97)
Brussels, Belgium
(28.97)
Amsterdam, Netherlands
(28.97)
London, United Kingdom
(28.97)6)
Paris, France
(55.19)
Paris, France
(41.94)
100.00
Zurich, Switzerland
100.00
Sydney, Australia
10) Numbers based on the divergent financial year from 1 April 2015 to 31 March 2016.
9) Thereof 3.72 per cent indirectly held via Tradegate AG Wertpapierhandelsbank
8) Until 1 October 2016: Belpex SA
7) Preliminary figures
1
5) Before profit transfer or loss absorption
4) Thereof income and expense from profit-pooling agreements with their subsidiaries amounting to a total of €71,474 thousand
3) Voting rights
1) 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
(100.00)
Mumbai, India
(100.00)
Jerusalem, Israel
(100.00)
Prague, Czech Republic
Frankfurt/Main, Germany
Dubai, United Arab Emirates (UAE)
ThreeSixty Trading Networks (India) Pte. Ltd.
Finbird Limited
Finbird GmbH
360 Trading Networks LLC
(100.00)
New York, USA
(100.00)
Singapore, Singapore
100.00
Frankfurt/Main, Germany
78.729)
Berlin, Germany
(100.00)
(100.00)
(62.91)
2) Thereof 50 per cent directly and 50 per cent indirectly held via Eurex Global Derivatives AG
(62.91)
(100.00)²)
100.00
%
direct/(indirect)
Equity interest
as at 31 Dec
2016
Zurich, Switzerland
Zurich, Switzerland
Domicile
European Energy Exchange AG
Eurex Zürich AG
Eurex Global Derivatives AG
Company
Fully consolidated subsidiaries (part 2)
Deutsche Börse Group financial report 2016
Leipzig, Germany
166
6) Consists of interest and commission results due to business operations
2001
4,2374)
12,658
16,063
2001
344
3,560
12,888
100
€
3,600
€
Leipzig, Germany
7) Thereof income from profit-pooling agreements with their subsidiaries amounting to €6,446 thousand (including €4,237 thousand for Eurex Repo GmbH and
€2,209 thousand for Eurex Clearing AG)
(62.91)³)
10,785
7,000
Leipzig, Germany
Leipzig, Germany
Agricultural Commodity Exchange GmbH
Eurex Services GmbH (dormant)
PEGAS CEGH Gas Exchange Services GmbH
JV Epex-Soops B.V.
EPEX SPOT Schweiz AG
EPEX SPOT Belgium S.A.8)
EPEX Netherlands B.V.
APX Commodities Ltd.
EPEX SPOT SE
Powernext SA
Power Exchange Central Europe a.s.
Global Environmental Exchange GmbH
EEX Power Derivatives GmbH
(62.91)
Gaspoint Nordic A/S
European Commodity Clearing Luxembourg S.à r.l.
Luxembourg, Luxembourg
Cleartrade Exchange Pte. Limited
Amsterdam, Netherlands
(62.91)
Singapore, Singapore
(62.91)
APX Shipping B.V.
(62.91)
Leipzig, Germany
(62.91)
European Commodity Clearing AG
Leipzig, Germany
EEX Link GmbH
(62.91)
Eurex
London, United Kingdom
Index Marketing Solutions Limited
45.13
Global Markets Exchange Group International LLP
London, United Kingdom
18.67
31.45
Hamburg, Germany
Eurex
MD+S
SEEPEX a.d.
Luxembourg, Luxembourg
Clearstream
(50.00)
PHINEO gAG
R5FX Ltd
Berlin, Germany
Xetra
12.008)
London, United Kingdom
Eurex
figo GmbH
24.37
Belgrade, Serbia
LuxCSD S.A.
24.03
Brain Trade Gesellschaft für Börsensysteme mbH
London, United Kingdom
Associates and joint ventures
Eurex
Company
Joint ventures
Domicile
Segment
Equity interest
as at 31 Dec 2016
direct/(indirect)
%
Bondcube Limited in Administration
London, United Kingdom
Xetra
Eurex
30.00
Frankfurt/Main, Germany
Xetra
(28.58)²)
China Europe International Exchange AG
Frankfurt/Main, Germany
Eurex
40.00
Deutsche Börse Commodities GmbH
Frankfurt/Main, Germany
Xetra
16.20
Digital Vega FX Ltd
Associates
(7.24)
173
Tradegate AG Wertpapierhandelsbank⁹)
Basis of preparation
Ordinary share
Currency
capital
thousand
Assets
thousand
Liabilities
thousand
Sales revenue
2016
thousand
Net profit/loss
2016
thousand
Associate
since
GBP
2¹)
2,183¹)
2,548¹)
-215")
2014
€
1,400
4,545
2,931
4,554
214
2013
Deutsche Börse Group financial report 2016
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Effective 4 November 2016, Deutsche Börse AG acquired 18.67 per cent of the voting shares in
figo GmbH, Hamburg, Germany. Since Deutsche Börse AG exercises significant influence within the
meaning of IAS 28.6 (a) by representation on the board of directors (Beirat), figo GmbH continues
to be classified as an associate and is accounted for using the equity method.
Effective 4 November 2016, Deutsche Börse AG acquired a 40 per cent stake in the capital of
Switex GmbH, Frankfurt/Main, Germany. Since Deutsche Börse AG exercises significant influence
within the meaning of IAS 28, Switex GmbH has been classified as an associate and has been
accounted for using the equity method since that date.
Following the admission of new partners and the reduction of the existing partners' interests in Global
Markets Exchange Group International LLP, London, United Kingdom, (GMEX), Deutsche Börse AG's
interest in GMEX increased by 13.42 per cent to 45.13 per cent. Since Deutsche Börse AG exercises
significant influence within the meaning of IAS 28, GMEX continues to be classified as an associate and
is accounted for using the equity method.
ZDB Cloud Exchange GmbH in Liquidation"
10) 11)
Hamburg, Germany
Xetra
40.00
Berlin, Germany
Eschborn, Germany
Xetra
14.86
Eurex
49.90
Berlin, Germany
Switex GmbH
Eurex
Zimory GmbH in Liquidation
1) Values up to the date of Administration on 21 July 2015
2) Thereof 14.29 per cent held directly and 14.29 per cent indirectly via Börse Frankfurt Zertifikate AG
3) Value of equity
4) The financials refer to the financial year from 1 December 2015 to 30 November 2016.
5) Figures as at 31 December 2014
6) The financials refer to the financial year from 1 February 2016 to 31 January 2017.
7) Figures as at 31 August 2015
8) In addition, Deutsche Börse AG holds an interest in Phineo Pool GbR, Berlin, Germany, which holds a 48 per cent stake in PHINEO gAG.
9) As at the reporting date, the fair value of the stake in the listed company amounted to €31.2 million.
10) Until 5 September 2016: Deutsche Börse Cloud Exchange AG
11) ZDB Cloud Exchange GmbH is part of the Zimory GmbH subgroup.
12) Voting rights
30.0312)
172
Total assets and liabilities acquired
Belpex SA, Brussels, Belgium, changed its company name to EPEX SPOT Belgium S.A. as at
31 December 2016.
Effective 1 January 2016, Indexium AG, Zurich, Switzerland – in which Deutsche Börse AG held a
100 per cent interest – merged with STOXX Ltd., Zurich, Switzerland. Deutsche Börse AG holds an
interest of 100 per cent in the latter company. According to the business combination agreement from
3 June 2016, all assets and liabilities of Indexium AG were passed on retroactively to STOXX Ltd.
Following registration of the business combination, Indexium AG was deleted from the commercial
register as at 24 June 2016.
-
During the 2016 financial year, EEX Link GmbH (EEX Link) – wholly owned by European Energy
Exchange AG commenced business operations. EEX Link provides services with the aim to bundle
liquidity between regulated power/gas exchanges and less regulated markets, on which no Multilateral
Trading Facility (MTF) is used. EEX Link has been fully consolidated since 1 January 2016.
Effective 25 February 2016, the Spanish stock exchange operator Bolsas y Mercados Españoles
Sociedad Holding de Mercados y Sistemas Financieros, S.A., Madrid, Spain, (BME) acquired Deutsche
Börse AG's 50 per cent share of Infobolsa S.A., Madrid, Spain. BME also assumed Deutsche Börse AG's
interest in the wholly owned subsidiaries of Infobolsa S.A. as part of the transaction, including Difubolsa,
Serviços de Difusão e Informação de Bolsa, S.A., Lisbon, Portugal; Infobolsa Deutschland GmbH,
Frankfurt/Main, Germany; and Open Finance, S.L., Madrid, Spain. Until that time, Deutsche Börse AG
and BME had each held an interest of 50 per cent in the shares of Infobolsa S.A. BME paid a purchase
price of €8.2 million in cash to Deutsche Börse AG.
With the signature of the partnership agreement from 16 March 2016, Deutsche Börse AG founded
DB1 Ventures GmbH, Frankfurt/Main, Germany, - which was recorded in the commercial register on
2 May 2016 - and took over 25,000 shares of a price of €1.00 per share. With Deutsche Börse AG as
the sole shareholder, there is a presumption of control in accordance with IFRS 10. The subsidiary has
been included in full in the consolidated financial statements since the first quarter of 2016.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
169
Basis of preparation
Effective 31 May 2016, European Energy Exchange, Leipzig, Germany, (EEX) acquired another 47.78
per cent of the voting shares of Cleartrade Exchange Pte. Limited, Singapore, (CLTX) and thereby
increased its interest in the company to 100 per cent. Deutsche Börse Group paid a consideration
of £1.00 plus an earn-out component. The company continues to be included in full in the consoli-
dated financial statements.
In order to expand the energy derivatives market in Central and Eastern Europe, EEX acquired a stake
of 66.67 per cent in Power Exchange Central Europe a.s., Prague, Czech Republic, (PXE) for a purchase
price of €4.4 million (effective 31 May 2016). After final approval from the Czech national bank on
16 June 2016, EEX gained control over PXE within the meaning of IFRS 10. Since then, the company
has been fully included in the consolidated financial statements. The acquired goodwill of €1.7 million
mainly reflects expected revenue synergies to be generated by facilitated cross-border trading.
Goodwill resulting from the business combination with Power Exchange Central Europe a.s.
Preliminary goodwill
calculation
31 May 2016
Consideration transferred
Purchase price
Acquired bank balances
Total consideration
Acquired assets and liabilities
Assets (without goodwill)
Liabilities
Non-controlling interests
€
Goodwill (not tax-deductible)
€m
2.8
-1.2
-
-
360T Beteiligungs GmbH, Frankfurt/Main, Germany, and its wholly owned subsidiary, 360T Verwal-
tungs GmbH, Frankfurt/Main, Germany, were merged into 360 Treasury Systems AG, Frankfurt/Main,
Germany, effective 1 January 2016. With Deutsche Börse AG as the sole shareholder, it is deemed to
exercise control as defined in IFRS 10, and the entities are therefore still fully consolidated in Deutsche
Börse Group's consolidated financial statements.
62
830
74,68710)
4,408
34,69110)
-198
1,90410)
15 Oct 2015
15 Oct 2015
Deutsche Börse Group financial report 2016
As at 31 December 2016, Deutsche Börse AG indirectly held 50 per cent of the voting rights in
REGIS-TR S.A., Luxembourg. Since Deutsche Börse's subsidiary Clearstream Banking S.A., which
holds 50 per cent of the voting rights, has the right to appoint the chairman of the board of directors,
who in turn has a casting vote, there is a presumption of control.
Changes to consolidated subsidiaries
As at 1 January 2016
Additions
Disposals
As at 31 December 2016
1.6
Germany
Total
21
54
75
2
5
7
-3
-17
-20
20
42
Foreign
2.1
-0.6
-1.6
-
-
until approval
Cleartrade Exchange (UK) Limited, London, United Kingdom, a wholly owned subsidiary of Cleartrade
Exchange Pte. Limited, Singapore (CLTX), which is in turn a wholly owned subsidiary of EEX, was
liquidated effective 3 January 2017, as part of CLTX's restructuring.
171
Basis of preparation
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
During the 2016 financial year, Powernext SA, together with Austrian Central European Gas Hub AG
(CEGH), established a new subsidiary, PEGAS CEGH Gas Exchange Services GmbH (PCG). Power-
next SA holds a 51 per cent stake in the capital of PCG. Since its establishment on 2 September 2016,
PCG has been fully consolidated in the consolidated financial statements. In September 2016, PCG
acquired the Austrian gas business from CEGH. With this transaction, Powernext profits from synergy
effects generated from contract trading for the large European gas markets on the common PEGAS
platform. Since the launch of its business operations on 1 December 2016, the new entity contributed
€0.2 million to the Group's sales revenue, whereas it did not materially affect earnings, after offsetting
non-controlling interests.
Goodwill resulting from the business combination with PEGAS CEGH Gas Exchange Services GmbH
Preliminary goodwill
calculation
30 Sep 2016
Consideration transferred
Deutsche Börse AG transferred the business operations of Market News International, Inc., New York,
USA, (MNI) onto Hawking LLC as part of an asset deal. The transaction was closed on 8 July 2016.
This transaction also provides for the transfer of 100 per cent of the shares in MNI Financial and
Economic Information (Beijing) Co. Ltd., Beijing, China, (MNI Beijing), which is however still subject
to approval by the Chinese authorities. This transaction was made within the context of the asset deal,
meaning that Deutsche Börse AG directly or indirectly retains its 100 per cent interest in MNI and
its subsidiaries, Market News International Services Inc., Need to Know News LLC and
from Chinese authorities – MNI Beijing. Market News International, Inc. changed its company name to
Assam SellerCo, Inc. as at 11 July 2016. Market News International Services Inc. changed its company
name to Assam SellerCo Service Inc. on the same date.
Acquired assets and liabilities
Liabilities
Non-controlling interests
Total assets and liabilities acquired
Goodwill (not tax-deductible)
€m
2.6
4.3
-0.6
-2.6
1.1
1.5
Effective 31 December 2016, several APX entities were merged into Group-internal EPEX SPOT SE,
Paris, France. EPEX Netherlands BV, Amsterdam, the Netherlands, was established during 2016, as
part of the ongoing reorganisation. It assumed the former employees of APX Holding BV, including their
pension claims. The new entity has been fully consolidated since the launch of its business operations
on 1 December 2016. In addition, APX Shipping BV was merged within the Group into European Energy
Exchange AG.
Assets (without goodwill)
The following table summarises the main financial information of associates and joint ventures; data
comprise the totals of each company according to the respective local GAAP and not proportional values
from the view of Deutsche Börse Group.
The full consolidation of Gaspoint Nordic A/S generated a rise of €0.7 million in sales revenue as well as
an increase of €0.2 million in earnings after tax and offsetting of non-controlling interests. Full consoli-
dation as at 1 January 2016 would have led to a rise of €1.5 million in sales revenue and an increase
of €0.5 million in earnings after tax and offsetting of non-controlling interests.
-0.4
-0.1
1.7
The full consolidation of PXE generated an increase of €0.8 million in sales revenue, whereas it did not
materially affect earnings after tax following offsetting of non-controlling interests. Full consolidation as
at 1 January 2016 would have led to a rise of €1.4 million in sales revenue and an increase of earnings
after tax of €0.1 million.
In order to open up the Danish gas-trade market, EEX acquired another 50 per cent of the shares of
Gaspoint Nordic A/S, Brøndby, Denmark, for a purchase price of €0.7 million, thereby increasing its
interest in the company to 100 per cent, effective 1 July 2016. In July, the shares were transferred
to Powernext SA, Paris, France. Since the effective date, Gaspoint Nordic A/S has been no longer
recognised as an associate, but has been included in full in the consolidated financial statements as
a wholly owned subsidiary of Powernext SA, in which Deutsche Börse AG indirectly holds a stake of
55.19 per cent. This transaction allows to exploit synergies through the concentration of gas trading
on the PEGAS platform operated by Powernext SA.
170
Deutsche Börse Group financial report 2016
The following assets and liabilities were identified as part of the purchase price allocation:
Goodwill resulting from the business combination with Gaspoint Nordic A/S
Consideration transferred
Purchase price
Acquired bank balances
Total consideration
0.1
Acquired assets and liabilities
Liabilities
Non-controlling interests
Total assets and liabilities acquired
Goodwill (not tax-deductible)
Preliminary goodwill
calculation
1 July 2016
€m
0.9
-1.2
-0.3
0.4
-0.4
-0.4
Assets (without goodwill)
27,000
39,166
1,090
147.2
-64.9
Exchange rate differences
-200.7
124.2
Other comprehensive income after tax from discontinued operations
-53.5
59.3
Total comprehensive income from discontinued operations
497.1
111.5
175
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Basis of preparation
Net change in cash and cash equivalents from discontinued operations are comprised of the following
items:
Cash flow statement from discontinued operations
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net change in cash and cash equivalents
2016
2015
€m
€m
- 45.6
Deferred taxes
52.2
550.6
-19.9
Earnings before tax (EBT)
Income tax expense
Net profit for the period from discontinued operations
2016
2015
€m
€m
149.3
302.9
568.9
0
-77.4
17.8
-155.8
147.1
-58.5
-92.4
0.6
2.3
582.9
57.0
-26.9
15.1
556.0
72.1
-5.4
640.8
Financial income
889.2
0
7.8
45.4
63.5
148.6
-184.2
-6.1
-161.5
-206.0
347.3
568.9
Unless explicitly indicated otherwise, all disclosures made in the notes to the consolidated financial
statements exclusively refer to Deutsche Börse Group's continuing operations. Prior-year figures have
been adjusted accordingly.
176
Deutsche Börse Group financial report 2016
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.
Recognition of revenue and expenses
Trading, clearing and settlement fees are recognised at the trade date and billed on a monthly basis.
Custody revenue and revenue for systems development and systems operation are generally recognised
rateably and billed on a monthly basis. Sales of price information are billed on a monthly basis. Fees
charged to trading participants in connection with expenses for supervision by the US Securities and
Exchange Commission (SEC) were recognised at the settlement date.
As a rule, rebates are deducted from sales revenue.
The item "volume-related costs" comprises expenses that depend on the number of certain trade or
settlement transactions, or on 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 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 eco-
nomic 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 are recognised in net income from equity 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. The development costs of an asset
are only capitalised if they can be reliably estimated, if all the definition criteria for an asset are met and if
the future economic benefits resulting from capitalising the development costs can be demonstrated.
These development costs 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
486.0
153.8
916.2
-13.0
0
843.6
8.1
The gain from the disposal was disclosed in net profit for the period from discontinued operations and
was based on the following calculation:
Gain from disposal of ISE
Proceeds from disposal
Hedging result and further adjustments
Cash disposed
Proceeds from disposal, net of cash disposed
Assets and liabilities disposed
Goodwill
Miscellaneous intangible assets
- 9.7
Property, plant & equipment
Other non-current assets
Receivables and other current assets
Deferred tax liabilities
Other non-current liabilities
Current liabilities
P&L effects from currency translation
Total assets and liabilities disposed
Gain on disposal
30 June 2016
€m
989.6
-60.4
Financial assets
Earnings before interest and tax (EBIT)
Result from equity investments
Operating costs
2013
GBP
0'
597)
60"
7)
07)
07
2014
€
6,000
7,139
1,392
2,450
425
30 June 2015
€
50
4,372
725
1,195
783
2010
GBP
2
-1476)
06)
4116)
8016)
82
-4,373
31 Oct 2015
€
1,000
4,163,028
4,158,276
7,471
2,126
2007
GBP
5373)4)
764
1,3844)
5484)
1064)
2011
€
75
6,787
105
531
-1,975
11 Nov 2016
GBP
5,0266)
6034)
625
130
-1,177
587
174
33
-525
2013
Effective 21 December 2016, Deutsche Börse AG exercised a call option according to the share
purchase and acquisition agreement entered into with Berliner Effektengesellschaft AG, Berlin,
Germany. Under the transaction, Deutsche Börse AG will acquire an additional 4.96 per cent stake
in Tradegate AG Wertpapierhandelsbank, Berlin, Germany (Tradegate AG), which holds 25 per cent
of the fully-consolidated Tradegate Exchange GmbH, Berlin, Germany. Hence, Deutsche Börse AG's
interest will be 19.82 per cent after the transaction. The acquisition of the additional shares is however
still subject to regulatory approval. Since Deutsche Börse AG exercises significant influence within the
meaning of IAS 28, Tradegate AG continues to be classified as an associate and is accounted for using
the equity method.
EMCC European Market Coupling GmbH i.L., Hamburg, Germany, was wound up by means of a partner
resolution dated 15 June 2014. EEX held a stake of 20 per cent in this company, which was liquidated
as at 8 December 2016 and is thus no longer included in the scope of consolidation.
Zimory GmbH, Berlin, Germany, and Deutsche Börse Cloud Exchange AG, Frankfurt/Main, Germany
(DBCE), were wound up by means of a partner resolution dated 5 September 2016. Based on the
partner resolution dated 5 September 2016, DBCE was transformed into ZDB Cloud Exchange GmbH,
with registered office in Eschborn, Germany, by way of a change of company form.
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:
174
Deutsche Börse Group financial report 2016
■ Deutsche Börse Commodities GmbH, Frankfurt/Main, Germany
267
"
■ Index Marketing Solutions Limited, London, United Kingdom
■ SEEPEX a.d., Belgrade, Serbia
■ PHINEO gAG, Berlin, Germany
Discontinued operation
-
Effective 30 June 2016, Deutsche Börse AG sold International Securities Exchange Holdings, Inc., New
York, USA, (ISE) and its parent company, U.S. Exchange Holdings, Inc., Chicago, USA, to Nasdaq, Inc.
against a cash payment of US$1.1 billion. As part of the transaction, Nasdaq, Inc. also assumed
Deutsche Börse AG's interests in the wholly owned subsidiaries of ISE – International Securities
Exchange, LLC, New York, USA; ETC Acquisition Corp., New York, USA; ISE Gemini, LLC, New York,
USA; Longitude LLC, New York, USA; and Longitude S.A., Luxembourg. Deutsche Börse AG held an
interest of 100 per cent in the entities listed above.
The disposal of ISE as of 30 June 2016 is disclosed as a discontinued operation in accordance with
IFRS 5. The following table shows the composition of net profit for the period from discontinued
operation amounting to €550.6 million for 2016 (2015: €52.2 million), as well as the composition
of total comprehensive income from discontinued operations amounting to €497.1 million (2015:
€111.5 million):
Income from discontinued operations
Sales revenue
Other operating income
Volume-related costs
Net revenue
figo GmbH, Hamburg, Germany
22,987
€
-902
2014
RSD
120,000
226,519
64,34010)
51,108
-30,056
14 July 2015
€
25
25
0
2010
2013
0
4 Nov 2016
€
24,403
133,575
90,938
53,486
12,644
€
50
237
79
38
0
30010)
168
-1,273
50
€
2014
27,6665)
53,204
18,948
6,018
125
€
2014
68
30,434
48
334,234
13
€
2014
48,1955)
82,407
3,078,937
73,935
1,015
€
1 Jan 2016
3
99
82
51
1,624
-2,6905)
3,667
1,837
500
GBP
1 Jan 2015
22,845
67,127
93,635
65,135
6,168
€
1 Jan 2015
2,140
9,927
36,054
29,803
12,584
€
31 May 2016
3,947
42,834
45,389
34,215
30,000
CZK
2014
26,651
4,550
50
2014
343,350
302,565
8,313
€
2012
62,898
127,051
522,414
496,809
83
€
consolidated
49,568
Initially
thousand
Sales revenue
2016
Total assets
thousand
thousand
Equity¹)
capital
thousand
Ordinary share
Currency
Basis of preparation
167
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
INR
Net profit/loss
2016
thousand
€
5,461
€
-1,702
1,431
3,259
2,795
19,800
US$
4 May 2015
32
40
8
0
0
1998
€
-1,6975)
200
2,093
2,046
100
€
2014
66,1324)
28,424
153,941
129,282
40,050
2014
240
134
€
15 Oct 2015
13,633
69,045
63,594
43,434
128
€
2010
31 July 2015
28
526
2,542
2,163
S$
1,537
€
312
184
57
0
AU$
2009
56,661
2014
2008
45,0727
-597
1,895
118,869
500
801
147,578
550
7,813
1
4 May 2015
15 Oct 2015
0
352
1,583
1,424
25
€
15 Oct 2015
41
874
4,241
571
34
€
15 Oct 2015
122
6,855
8,074
6,782
300
US$
15 Oct 2015
-112
11,795
336
125,976
ILS
CHF
11
17
189
186
18
€
1 Jan 2015
22
331
178
157
100
1 Jan 2015
CHF
239
4,235
9,840
3,782
3,000
€
1 Dec 2016
0
0
2
673
0
4 May 2015
DKK
0
5,104
2,000
7,804
GBP
100,981"
230,728"
495
197,876"
156,400"
2007
0
0
101
101
€
€
6,290
25
5,112
1 July 2016
€
35
11,914
7,193
97
-367
2 Sep 2016
7,117
Subsequent measurement of financial instruments follows the categories which are described below. As
in previous years, Deutsche Börse Group did not take advantage of the option to allocate financial assets
to the "held-to-maturity investments" category in the reporting period. In addition, the Group did not
exercise the "fair value option” to designate financial assets at fair value through profit and loss. The
financial assets are allocated to the respective categories at initial recognition.
Financial assets
For Deutsche Börse Group, financial assets are, in particular, other equity investments, receivables and
securities from banking business, other financial instruments and other loans, financial instruments
held by central counterparties, receivables and other assets as well as bank balances.
Recognition of financial assets
Financial assets are recognised when a Group company becomes a party to the contractual provisions of
the instrument. They are generally recognised at the trade date. Loans and receivables from banking
business, available-for-sale financial assets from banking business as well as purchases and sales of
equities via the central counterparty (i.e. Eurex Clearing AG) are recognised at the settlement date.
181
Basis of preparation
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Financial assets are initially measured at fair value; in the case of a financial asset that is not measured
at fair value through profit or loss in subsequent periods, this includes transaction costs. If they are
settled within one year, they are allocated to current assets. All other financial assets are allocated to
non-current assets.
Subsequent measurement of financial assets
Assets held for trading
Available-for-sale financial assets are generally measured at the fair value observable in an active market.
Unrealised gains and losses are recognised directly in equity in the revaluation surplus. Impairment losses
and effects of exchange rates on monetary items are excluded from this general principle and are
recognised in profit or loss.
8 to 21 years
If they result from banking business, realised and unrealised gains and losses are immediately recog-
nised 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 comprise in particular current and non-current receivables from banking business,
trade receivables as well as other current receivables. They are recognised at amortised cost, taking into
account any impairment losses, if applicable. Premiums and discounts are included in the amortised
cost of the instrument concerned and are amortised using the effective interest method; they are
contained in "net interest income from banking business" if they relate to banking business, or in
"financial income" and "financial expense".
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits as well as financial assets
that are readily convertible to 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.
Available-for-sale financial assets
Non-derivative financial assets are classified as "available-for-sale financial assets" if they cannot be
allocated to the "loans and receivables" or "assets held for trading" categories. These assets comprise
debt and equity investments recognised as “other equity investments” and “other financial instruments",
as well as debt instruments recognised as current and non-current receivables and securities from
banking business.
182
Deutsche Börse Group financial report 2016
Investments in associates and joint ventures are measured at cost on initial recognition and accounted
for using the equity method upon subsequent measurement.
Equity instruments for which no active market exists are measured on the basis of current comparable
market transactions, if these are available. If an equity instrument is not traded in an active market and
alternative valuation methods cannot be applied to that equity instrument, it is measured at cost, subject
to an impairment test.
Derivatives that are not designated as hedging instruments as well as financial instruments held by
central counterparties are measured at fair value through profit or loss.
Investments in associates and joint ventures
5 to 25 years
based on lease term
Fair value measurement
2 to 20 years
Realised gains and losses are generally recognised in "financial income” or “financial expense". Interest
income in connection with debt instruments in the banking business is recognised in the consolidated
income statement in "net interest income from banking business" using the effective interest rate method.
Other realised gains and losses are recognised in the consolidated income statement in "other operating
income" and "other operating expenses".
1) Taking effect 1 March 2016, ISE's other intangible assets were reclassified into the category "assets held for sale". Therefore, amortisation in line with the
applicable useful life has only been recognised until 29 February 2016.
Since the exchange licences mentioned above have no time limit on their validity and, in addition,
there is an intention to maintain the exchange licences disclosed as at 31 December 2016 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
179
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Basis of preparation
group have also 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.
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
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.
Computer hardware
Leasehold improvements
Depreciation period
3 to 5 years
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 equip-
ment 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 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 is lower than the carrying amount, an impairment loss is recognised and the net
carrying amount of the asset is reduced to its estimated recoverable amount.
180
Deutsche Börse Group financial report 2016
Goodwill is allocated to identifiable groups of assets (cash-generating units) or groups of cash-generating
units that create synergies from the relevant acquisition. Irrespective of any indications of impairment,
these items must be tested for impairment at least annually at the lowest level 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.
Office equipment
If debt instruments in the banking business are hedged items in fair value hedges, the changes in fair
value resulting from the hedged risk are recognised in profit or loss.
The gain or loss on the hedging instrument, together with the gain or loss on the hedged item (underlying)
attributable to the hedged risk, is recognised immediately in the consolidated income statement. Any
gain or loss on the hedged item adjusts its carrying amount.
Financial assets are derecognised when the contractual rights to the cash flows expire or when
substantially all the risks and rewards of ownership of the financial assets are transferred.
European Commodity Clearing AG and Eurex Clearing AG act as central counterparties:
European Commodity Clearing AG guarantees the settlement of spot and derivatives transactions at the
trading venues of the EEX-group and the connected partner exchanges.
■ Eurex Clearing AG guarantees the settlement of all transactions involving futures and options on the
Eurex exchanges (Eurex Deutschland and Eurex Zürich AG). It also guarantees the settlement of all
transactions for Eurex Bonds (bond trading platform) and 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.
185
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Basis of preparation
The transactions of the clearing houses are only executed between the respective clearing house and
a clearing member.
In accordance with IAS 39, 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. In accordance with IAS 39, futures and OTC interest rate derivatives are therefore not
reported in the consolidated balance sheet. For future-style options, the option premium is not required to
be paid in full until the end of the term or upon exercise. Option premiums are carried in the consolidated
balance sheet as receivables and liabilities at their fair value on the trade date.
"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. Fixed-income bond forwards are recognised as deriva-
tives and carried at fair value until the settlement date. Receivables and liabilities from repo transactions
and from cash-collateralised securities lending transactions are classified as held for trading and carried
at fair value. Receivables and liabilities from variation margins and cash collateral that is determined on
the reporting date and only paid on the following day are carried at their nominal amount.
"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 clearinghouse in accordance with the rules set out in
the contract specifications (see also the clearing conditions of the respective clearing house).
Financial instruments held by central counterparties
Cash or securities collateral held by central counterparties
In addition to these daily collateral payments, each clearing member must make contributions to the
respective clearing fund (for further details, see the risk report in the combined management report).
Cash collateral is reported in the consolidated balance sheet under "cash deposits by market participants"
and the corresponding amounts under “restricted bank balances".
186
Deutsche Börse Group financial report 2016
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).
Other current assets
Receivables and other assets are carried at their nominal amount. Adequate valuation allowances take
account of identifiable risks.
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 dis-
closed separately in the consolidated income statement and the consolidated statement of comprehen-
sive 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 adjusted accordingly.
23 years
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.
Gains or losses on derivative instruments that are not part of a highly effective hedging relationship are
recognised immediately in the consolidated income statement.
Derivatives that are not part of a hedging relationship
The effective portion of the gain or loss from a hedging transaction that is designated as a highly 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 is recognised immediately in the consolidated
income statement.
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 are not recognised in the con-
solidated balance sheet.
Impairment of financial assets
Financial assets that are not measured at fair value through profit or loss are reviewed at each reporting
date to establish whether there are any indications of impairment.
Deutsche Börse Group has laid down criteria for assessing whether there is evidence of impairment.
These criteria primarily include significant financial difficulties on the part of the debtor and breaches of
contract. In the case of equity instruments, the assessment also takes into account the duration and the
amount of the impairment compared with cost. If the decline in value amounts to at least 20 per cent
of cost or lasts for at least nine months, or if the decline is at least 15 per cent of cost and lasts for at
least six months, Deutsche Börse Group takes this to be evidence of impairment. Impairment is assumed
in the case of debt instruments if there is a significant decline in the issuer's credit quality.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
183
Basis of preparation
The amount of an impairment loss for a financial asset measured at amortised cost is 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 is 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)
is 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 is not permitted.
In the case of available-for-sale financial assets, the impairment loss is calculated as the difference
between cost and fair value. Any reduction in fair value already recognised in equity is reclassified
to profit or loss upon determination of the impairment loss. An impairment loss recognised on debt
instruments may only be reversed in a subsequent period if the reason for the original impairment
no longer applies.
Financial liabilities
Financial liabilities relate primarily to interest-bearing liabilities, other liabilities, liabilities from banking
business, financial instruments held by central counterparties, cash deposits by market participants as
well as trade payables. They are recognised when a Group company becomes a party to the instrument.
They are generally recognised at the trade date. Purchases and sales of equities via the central counter-
party Eurex Clearing AG are recognised at the settlement date.
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 not measured at fair value through profit and loss
Financial liabilities not held for trading are carried at amortised cost. These liabilities comprise issued
bonds. 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 reduce the carrying amount of liabilities and are amortised over the term of the liabilities.
Financial liabilities measured at fair value through profit and 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 and 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.
184
Deutsche Börse Group financial report 2016
Derivatives and hedges
Derivatives are used to hedge interest rate risk or currency risk. All derivatives are carried at their fair values.
Hedge accounting is used for derivatives that are part of a hedging relationship determined to be highly
effective and for which certain conditions are met. This relates in particular to the documentation of the
hedging relationship and the risk strategy and to how reliably effectiveness can be measured.
Cash flow hedges
The portion of the gain or loss on the hedging instrument determined to be highly effective is recognised
in other comprehensive income. This gain or loss ultimately adjusts the value of the hedged cash flow,
i.e. the gain or loss on the hedging instrument is recognised in profit or loss when the hedged item is
recognised in the balance sheet or in profit or loss. The ineffective portion of the gain or loss is recognised
immediately in the consolidated income statement.
Fair value hedges
Hedges of a net investment in a foreign operation
Derecognition of financial assets
indefinite
5 years, indefinite
Compilation and testing of simulation software packages
20 years
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.
Intangible assets
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.
Compilation and review of documents
Compilation and dispatch of production systems
■ Planning of product launch
6. Roll-out
Compilation and review of documents
◉
■ Preparation and implementation of simulation
5. Simulation
■ Planning and implementation of acceptance tests
4. Acceptance
Phases not eligible for capitalisation
177
■ Product testing
3. Building and testing
■ Troubleshooting process
■ Compilation and review of precise specifications
2. Detailed specifications
■Initial cost and revenue forecast
Specification of the expected economic benefit
■ Definition of product design
1. Design
Phases not eligible for capitalisation
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:
asset for use, such as costs for the software development environment. Development costs that do not
meet the requirements for capitalisation are recognised as expenses in the consolidated income state-
ment. 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.
Basis of preparation
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
8 years
■ Software programming
178
Phases eligible for capitalisation
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.
16 years
Deutsche Börse Group financial report 2016
indefinite
2 to 12 years
3 to 5 years
30 years
12 years
indefinite
Miscellaneous
intangible assets
Member and
customer relationships
Trade names
indefinite
indefinite
indefinite
Exchange licences
Other
360T
10 years
EEX
Asset
Useful life of software
CGSS
Standard software
Purchased custom software
Amortisation period
3 to 10 years
3 to 6 years
3 to 7 years
Internally developed custom software
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 cost of the other intangible assets, which are almost only acquired in the course of business
combinations, corresponds to the acquisition date fair value. Assets with a finite useful life are amortised
using the straight-line method over their expected useful life. Assets with an indefinite useful life are
tested for impairment at least once a year.
Useful life of other intangible assets classified by business combinations
ISE¹)
STOXX
Intangible assets are derecognised on disposal or when no further economic benefits are expected to
flow from them.
100
100
Marion Fornoff
23
23
100
11
11
22
22
Karl-Heinz Flöther
Ann-Kristin Achleitner (since 11 May 2016).
Richard Berliand
100
22
Joachim Faber
%
Meeting attendance
18
(incl. committees) ¹)
22
17
9
Hans-Peter Gabe
Name
18
Jutta Stuhlfauth
100
23
23
Erhard Schipporeit
82
11
Gerhard Roggemann (until 11 May 2016)
96
22
23
Monica Mächler
94
16
17
Craig Heimark
93
13
14
94
Meetings
Nationality: Chinese (Hong Kong)
The Supervisory Board members' detailed attendance record for plenary Supervisory Board and committee
meetings was as follows:
Gerhard Roggemann, *1948
Senior Advisor
Former member of the
Supervisory Board
since 13 May 2015
Board member
15
Vitagreen, Hong Kong
Executive Director
Hong Kong
RAYS Capital Partners Limited,
Managing Partner
Amy Yip, *1951
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 21 May 1997
Staff member in the Financial
Accounting & Controlling
department
Johannes Witt, 1) * 1952
Monica Mächler, *1956
Jutta Stuhlfauth,¹) *1961
Lawyer, M.B.A. (Wales)
and Head of the Policies &
Procedures unit
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 16 May 2012
since 7 October 2005
Erhard Schipporeit, *1949
Independent Management
Consultant, Hanover
Nationality: German
Board member
since 16 May 2012
Board member
Member of different supervisory
bodies, Pfäffikon
Nationality: Swiss
Edmond de Rothschild
Private Merchant Banking LLP,
London
Nationality: German
Board member
from 11 May 1998 to
14 May 2003 and
from 12 July 2005
until 11 May 2016
Deutsche Börse Group financial report 2016
10
9
All members of the Supervisory Board attended more than half the meetings of the Supervisory Board
and of the committees of which they were members in 2016. The average attendance rate for all
Supervisory Board members in the reporting period was 95 per cent.
The Executive Board submitted all measures requiring Supervisory Board approval by law and under
the company's Articles of Association and bylaws to the Supervisory Board, which then approved
them. The Supervisory Board also satisfied itself in other respects that the Executive Board's actions
were lawful, due and proper, and appropriate.
At our meetings, the Executive Board provided us with comprehensive and timely oral and written
information in line with the legal requirements. This information covered the course of business
as well as the company's and the Group's position (including the risk situation, risk management and
compliance), as well as the enterprise's strategy and planning. We discussed all significant transac-
tions for the enterprise in the plenary meetings and in the Supervisory Board committees, based on
the reports provided by the Executive Board. The large number of plenary and committee meetings
ensured an active exchange of information between the Supervisory Board and the Executive Board.
The Executive Board also submitted written reports on individual issues between meetings and
discussed individual topics with us. In addition, the CEO kept the Chairman of the Supervisory Board
continuously informed of current developments affecting the company's business, significant transac-
tions and upcoming decisions, as well as of the long-term outlook and thinking on emerging trends,
and discussed these issues with him.
We held a total of 13 plenary meetings in 2016, including seven extraordinary meetings. A strategy
workshop and two technology workshops also took place.
In the reporting period, 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 Association and bylaws. We regularly
advised the Executive Board on its management of the company and monitored
its work, and were involved in all fundamental decisions. One of the main focuses
of our work in 2016 was the planned merger between Deutsche Börse AG and
London Stock Exchange Group plc – a key strategic move for the company.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report of the Supervisory Board
Chairman of the Supervisory Board
Attendance of Supervisory Board members at meetings in 2016
Joachim Faber
Deutsche Börse Group financial report 2016
8
7
execboard
www.deutsche-boerse.com/
supervboard
www.deutsche-boerse.com/
Detailed information about the
members of the Supervisory and
Executive Boards, 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:
As at 31 December 2016
(unless otherwise stated)
1) Employee representative
Report of the Supervisory Board
83
During the course of our strategy workshop on 22 September 2016, the Executive Board provided
a detailed status report on the implementation of the "Accelerate" growth programme, especially in
Sales and in Business and Product Development throughout the Group. We also discussed initiatives
and developments affecting our core business segments in detail, along with 360 Treasury Systems AG
and European Energy Exchange AG.
23
Technology Committee (four meetings during the reporting period, including one joint meeting with
the Risk Committee)
■ discussion of the strategy for derivatives trading and clearing
■ discussion of Deutsche Börse Group's strategic focus
Strategy Committee (one meeting during the reporting period)
discussion of operational risk, information security and business continuity management
■ discussion of the updated recovery plans for Clearstream, Eurex Clearing and Deutsche Börse Group
discussion of risk strategy, risk appetite and risk culture
■ discussion of enhancements to Group-wide compliance and risk management
discussion of the quarterly compliance and risk management reports
■
Risk Committee (four meetings during the reporting period, including one joint meeting with the
Technology Committee)
Report of the Supervisory Board
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
■ review of the appropriateness of Executive Board remuneration and of their pensionable income
appointments: discussion of succession planning for the Executive Board; approval of Hauke Stars'
appointment to the Supervisory Board of Fresenius SE & Co. KGaA, of her appointment as a member
of the Executive Board and Executive Committee of Deutsches Aktieninstitut e.V. and of the Executive
Board and Executive Committee of Frankfurt Main Finance e.V., as well as of her appointment to the
Executive Board of the Frankfurt section of the Wirtschaftsrat der CDU e.V. (CDU Economic Council);
approval of Jeffrey Tessler's appointment as a member of the Global Future Council on Financial and
Monetary Systems, and approval of the appointment of Matthias Fritton as Senior General Manager
(Generalbevollmächtigter) of Deutsche Börse AG
■ Executive Board remuneration: discussion of the extent to which the members of the Executive Board
had achieved their targets; determination of the variable cash component for 2015; preliminary discus-
sion of the extent to which individual members of the Executive Board have achieved their targets in
2016; adoption of the individual targets for the members of the Executive Board in 2017; discussion
of the remuneration report; preparation of a recommendation to the plenary meeting to amend the
procedure for paying out the 2014 and 2015 tranches of the variable share-based payment; preparation
of a proposed resolution by the plenary meeting to adjust the Performance Bonus Plan and the Per-
formance Share Plan for beneficiaries subject to US income tax
Personnel Committee (five meetings during the reporting period)
preparations for Ann-Kristin Achleitner's election to the Supervisory Board by the 2016 Annual
General Meeting
planned merger of equals between Deutsche Börse AG and LSEG: preparations for nominating the
members of the Referendum Committee to be appointed by Deutsche Börse AG, as well as prepara-
tions for nominating non-executive directors to be appointed by Deutsche Börse AG to the Board
of Directors of HLDCO123 PLC
subject to Deutsche Börse AG changing its legal form to an SE: preparations for the election of share-
holder representatives to the Supervisory Board of Deutsche Börse SE
Nomination Committee (three meetings during the reporting period)
■ discussion of changes resulting from the audit reform
■ discussion of Deutsche Börse Group's equity investments
■
■ discussion of measures to close out audit findings
in-depth discussion of developments to and the implementation of Deutsche Börse Group's IT strategy
■ discussion of information security, IT risk management and related measures
Chairman of the Supervisory Board
Joachim Faber
Fondi Bul
Lulu
For the Supervisory Board:
Frankfurt/Main, 10 March 2017
The Supervisory Board would like to thank the Executive Board and all employees for their hard work
and excellent achievements in 2016.
No conflicts of interest arose with regard to individual Supervisory Board members during the
reporting period.
Management of individual conflicts of interest
On 11 May 2016, the Annual General Meeting of Deutsche Börse AG elected Ann-Kristin Achleitner
to the company's Supervisory Board as a shareholder representative. Gerhard Roggemann retired
from the Supervisory Board effective from the close of the Annual General Meeting on 11 May 2016.
We would like to thank Mr Roggemann sincerely for the valuable contribution he made during his many
years as a member of Deutsche Börse AG's Supervisory Board.
The following changes to the Supervisory Board occurred during the reporting period:
Appointments and resignations
Our own examination of the annual financial statements, the consolidated financial statements and the
combined management report for 2016 in a plenary meeting did not lead to any objections and we
concurred with the results of the audit performed by the auditor. We approved the annual financial
statements prepared by the Executive Board and the consolidated financial statements at our meeting
on 10 March 2017, 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 unappropriated surplus in detail with the Executive
Board, with particular reference to the company's liquidity and financial planning, and taking share-
holders' 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.
After examining this ourselves, the plenary meeting of the Supervisory Board also approved the Executive
Board's proposal.
Deutsche Börse Group financial report 2016
16
15
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 the Supervisory Board approve the annual
financial statements and the 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 for the financial year ended 31 December 2016, 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 2016 were reviewed by KPMG.
The documents relating to the financial statements and the reports by KPMG were submitted to us for
inspection and examination in good time. The lead auditors, Karl Braun (CMO, member of the manage-
ment board, KPMG) and Andreas Dielehner (Partner, KPMG), 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 the Group, and were available
to provide supplementary information. The auditors also reported that no significant weaknesses in the
control and risk management system had been found, particularly with respect to the financial reporting
process. The audit of compliance 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.
Audit of the annual and consolidated financial statements
discussion of IT financial planning for 2017 and of the revised budget process
■
■ detailed analysis of the Group's technology innovation concept and its implementation
Johannes Witt
preparation of the Supervisory Board's resolution on the corporate governance report and the remu-
neration report, and on the corporate governance declaration in accordance with section 289a of the
HGB and the declaration of compliance in accordance with section 161 of the AktG
■ discussion of Deutsche Börse Group's dividend and budget
Another detailed discussion of the status of the negotiations on the potential merger of equals between
Deutsche Börse AG and LSEG took place at our extraordinary meeting on 13 March 2016. At the
recommendation of the Personnel Committee and subject to our approval of the potential merger, we
also resolved to amend the procedure for paying out the 2014 and 2015 tranches of the variable
share-based remuneration scheme for Executive Board members.
At our extraordinary meeting on 9 March 2016, we resolved to approve the sale by Deutsche Börse AG
and Eurex Frankfurt AG of all shares of U.S. Exchange Holdings, Inc. to NASDAQ, Inc., for a total
purchase price of US$1.1 billion.
Our regular meeting on 4 March 2016 discussed the company's annual and consolidated financial
statements for 2015 and the remuneration report in the presence of the external auditors. After
conducting our own detailed examination we approved the annual and consolidated financial statements
for 2015 in line with the recommendation by the Audit Committee, which had already examined the
documents in depth in preparation for our meeting. We also resolved the report of the Supervisory Board
for 2015, the corporate governance report, the corporate governance declaration for financial year
2015 and the agenda for the 2016 Annual General Meeting. We examined the status of negotiations
with NASDAQ, Inc. on the sale of ISE. In addition, we discussed the potential merger of equals
between Deutsche Börse AG and LSEG in detail. As recommended by the Nomination Committee,
we approved the appointments to the Referendum Committee planned in the context of the potential
merger. I, Joachim Faber, was appointed as Chairman of the committee and Gerhard Roggemann (until
11 May 2016), Ann-Kristin Achleitner (since 11 May 2016) and Erhard Schipporeit were appointed
as additional members.
The technology workshop on 4 March 2016 was devoted to a detailed discussion of cloud technology
and its practical and strategic importance for Deutsche Börse Group.
At our first regular meeting for the reporting period on 12 February 2016, we addressed in detail the
preliminary results for financial year 2015 and the dividend proposed by the Executive Board for that
year. We also resolved the amount of variable remuneration payable to the Executive Board for financial
year 2015 following a detailed examination.
Our plenary meetings focused primarily on the following issues during the reporting period:
In addition, the Executive Board regularly informed us of Deutsche Börse AG's share price performance
and that 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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report of the Supervisory Board
We also looked in detail at the impact of technological change on the financial services industry in
general, and on Deutsche Börse Group in particular, and at the efficiency, appropriateness and effective-
ness of the internal control systems.
Another main focus of our Supervisory Board activities in 2016 was supporting, reviewing and approv-
ing the potential merger between Deutsche Börse AG and London Stock Exchange Group plc (LSEG).
The merger offers a compelling opportunity for both companies to complement each other's strengths
in an industry-defining transaction, and to create a globally leading market infrastructure provider.
In the reporting period, we continued our in-depth discussions of the implementation of the Group's
"Accelerate" growth programme. This programme aims to position Deutsche Börse even more ambi-
tiously, effectively and flexibly than before against the backdrop of the competition among global capital
market infrastructure providers, and to ensure a keen focus on clients. The company has implemented
a broad range of initiatives designed to achieve this goal. These include the sale by Deutsche Börse AG
and Eurex Frankfurt AG of all shares of U.S. Exchange Holdings, Inc. (and hence of International
Securities Exchange, ISE). We provided advice and support for this move, as well as formally approving it.
Topics addressed during plenary Supervisory Board meetings
1) Since attendance at workshops is voluntary for Supervisory Board members such workshops are not taken into account when calculating the average
attendance rate.
95
Average attendance rate
100
22
22
Amy Yip
96
22
At our extraordinary meeting on 16 March 2016, we then resolved to approve the merger between
Deutsche Börse AG and LSEG. Due to this planned business combination, we also resolved not to add
Deutsche Börse AG's change of legal form to a European company (Societas Europaea, SE) to the
agenda for the Annual General Meeting on 11 May 2016.
discussion and formal adoption of the Audit Committee's tasks
11
Deutsche Börse Group financial report 2016
■ internal control systems: discussion of questions relating to risk management, compliance and the
internal control and audit system, discussion of the methods and systems used and their efficiency,
adequacy and effectiveness
accounting: examination, in the presence of the external auditors, of the annual financial statements
of Deutsche Börse AG and of the consolidated financial statements, of the combined management
report and the audit report, as well as of the half-yearly financial report and the quarterly statements
▪ external auditors: obtaining the statement of independence from the external auditors, issuing the enga-
gement letter for the external auditors and preparing the Supervisory Board's proposal to the Annual
General Meeting on the election of the external auditors; agreeing the external auditors' fee and defining
the focal areas of the audit; discussing non-audit services rendered by the external auditors
"
■ discussion of financial issues and especially capital management
Audit Committee (six meetings during the reporting period)
The committees focused on the following key issues:
Deutsche Börse Group financial report 2016
14
13
The Supervisory Board had six committees during the reporting period. These are mainly responsible
for preparing the decisions to be taken by, and the 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 Personnel Committee, the Nomination Committee and the Strategy Committee. Details of the
members and duties of the Supervisory Board committees during the reporting period can be found
in the corporate governance declaration in accordance with section 289a of the Handelsgesetzbuch
(HGB, German Commercial Code).
Committee work
During our extraordinary meeting on 27 December 2016, the Executive Board informed us about the
current state of negotiations for the sale of LCH.Clearnet S.A. by LSEG and LCH Group in the context
of the planned merger between Deutsche Börse AG and LSEG.
At our regular meeting on 6 December 2016, we discussed the status of the planned merger between
Deutsche Börse AG and LSEG. Following a detailed discussion, we approved the disposal of LCH.
Clearnet S.A. by LSEG and LCH.Clearnet Group Limited (LCH Group) in order to address merger control
concerns raised by the European Commission in relation to the planned merger. We discussed and
adopted the budget for 2017, as well as examining Deutsche Börse Group's risk management activities
and addressing developments at the Group's equity investments. Furthermore, the Executive Board
provided a detailed status report on the legal proceedings against Clearstream Banking S.A. in the US
due to its client relationship with Bank Markazi. At the recommendation of the Personnel Committee,
we resolved to adjust the Performance Bonus Plan and the Performance Share Plan for beneficiaries
subject to US income tax. We discussed the results of our annual efficiency review in accordance with
section 5.6 of the German Corporate Governance Code, and also adopted the declaration of conformity
pursuant to section 161 of the Aktiengesetz (AktG, German Stock Corporation Act) for the 2016 reporting
period. The declaration of conformity is available at ☑www.deutsche-boerse.com/declconformity.
The implementation of the measures from the "Accelerate" growth programme within Deutsche Börse Group's
IT organisation was a key agenda item at our regular meeting on 23 September 2016. In addition,
the Executive Board informed us of material developments and measures in the area of compliance. We
also discussed our annual efficiency review, which is required by section 5.6 of the German Corporate
Governance Code, and resolved to use external support for this in 2016.
Our technology workshop on 22 September 2016 focused in depth on IT innovation methods and
measures, and especially on cloud and blockchain technologies.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report of the Supervisory Board
Our extraordinary meeting on 11 July 2016 focused on the reduction of the minimum acceptance
threshold for the takeover offer by HLDCO123 PLC. Following extensive discussion, we approved the
reduction of the minimum acceptance threshold from 75 per cent to up to 60 per cent, and resolved
to issue and publish a supplementary joint statement by the Executive Board and the Supervisory Board
on this.
At our extraordinary meeting on 5 July 2016, we discussed the amendment to HLDCO123 PLC's
voluntary public takeover offer to Deutsche Börse AG shareholders, which involved the waiver of
a condition of the offer. On this basis, we resolved to issue and publish a supplementary joint state-
ment by the Executive Board and Supervisory Board of Deutsche Börse AG regarding the takeover
offer. We also looked in detail at the results and impact of the referendum in the United Kingdom
to leave the European Union.
Our regular meeting on 14 June 2016 reviewed the status of negotiations for the sale of our stake
in U.S. Exchange Holdings, Inc. to NASDAQ, Inc., and approved a change in the transaction structure.
In addition, we approved early repayment of an outstanding US private placement in the amount of
US$290 million. We looked at Deutsche Börse Group's risk management, information security and
internal audit activities and engaged in detailed discussions of the Group's venture portfolio management
and of innovation and blockchain technology. We also addressed the new requirements under the EU's
Market Abuse Regulation and Market Abuse Directive.
At our extraordinary meeting on 6 June 2016, we again discussed the status of the planned merger
between Deutsche Börse AG and LSEG in detail. We also resolved to issue and publish a joint statement
by the Executive Board and the Supervisory Board of Deutsche Börse AG on the voluntary public
takeover offer made by HLDCO123 PLC to Deutsche Börse AG shareholders.
During the regular Supervisory Board meeting held immediately before the Annual General
Meeting (AGM) on 11 May 2016, we looked in depth at the status of the planned merger between
Deutsche Börse AG and LSEG. As part of this, we addressed in detail the preparations for the joint
statement by the Executive Board and the Supervisory Board of Deutsche Börse AG on the voluntary
public takeover offer made to Deutsche Börse AG shareholders by the new holding company
(HLDCO123 PLC). At the recommendation of the Nomination Committee, we also resolved to approve
the nomination of the following persons as other non-executive directors of HLDCO123 PLC in addition
to myself, Joachim Faber, as Deputy Chairman and Senior Independent Director: Ann-Kristin Achleitner,
Richard Berliand, Christopher A. Cole, Karl-Heinz Flöther, Erhard Schipporeit and Amy Yip. We also
discussed the impending Annual General Meeting with the Executive Board. After the AGM, we resolved
to elect Ann-Kristin Achleitner as a member of the Personnel Committee and the Strategy Committee.
As a shareholder representative on the Personnel Committee, she is also a member of the Nomination
Committee.
12
Craig Heimark, *1954
Managing Partner
Hawthorne Group LLC, Palo Alto
Nationality: US-American
Board member
since 7 October 2005
München (TUM), Munich
Nationality: German
Hans-Peter Gabe, ¹) * 1963
Staff member in the HR
Compensation, Workforce &
Talent Management section
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
Jeffrey Tessler, *1954
MBA
responsible for Cash Market,
Pre-IPO & Growth Financing
Member of the Executive Board,
Deutsche Börse AG,
MSc by research in Engineering
Königstein im Taunus
Hauke Stars, *1967
Engineering degree in applied
computer science (Diplom-
Ingenieurin Informatik)
Bad Homburg v.d. Höhe
Member of the Executive Board
and Chief Financial Officer,
Deutsche Börse AG
(Diplom-Kaufmann)
Luxembourg
Gregor Pottmeyer, *1962
Graduate degree in
Business Administration
(Diplom-Kaufmann)
Frankfurt/Main
Andreas Preuss, *1956
Graduate degree in
Business Administration
Chief Executive Officer,
Deutsche Börse AG
Carsten Kengeter, *1967
MSc Finance and Accounting
BA Business Administration
Graduate degree in Business
Administration
(Diplom-Betriebswirt, FH)
Frankfurt/Main
The Executive Board
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
The Executive and Supervisory Boards
since 21 May 1997
Member of the Executive Board
and Deputy Chief Executive
Officer, Deutsche Börse AG,
responsible for IT & Operations,
Data & New Asset Classes
Member of the Executive Board,
Deutsche Börse AG,
The Supervisory Board
Joachim Faber, * 1950
Chairman
responsible for Clients,
Products & Core Markets
Marion Fornoff, 1) *1961
Staff member in the HR
Europe & US section
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 16 May 2012
since 16 May 2012
Board member
Karl-Heinz Flöther, *1952
Independent Management
Consultant, Kronberg
Nationality: German
Board member
at the Technische Universität
Ann-Kristin Achleitner, *1966
Scientific Co-Director Center
for Entrepreneurial and
Financial Studies (CEFS)
since 11 May 2016
Board member
since 7 October 2005
Independent Management
Consultant, Grünwald
Nationality: German
since 20 May 2009
Richard Berliand, *1962
Deputy Chairman
Management Consultant -
Executive Director
Board member
Chairman of the Management
Committee
Renshaw Bay LLP, London
Nationality: British
Richard Berliand Limited,
Ashtead Surrey
2015
2015
€m
2016
(restated)
Net revenue
Volume-related costs
€m
(restated)
2,419.9
2016
Other operating income
Consolidated income
statement disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
1) Revenue from FX derivatives consists of revenue from 360 Treasury Systems AG which was initially consolidated as at 15 October 2015.
50.6
84.0
2,557.3
0
€m
€m
2016
€m
-3.4
€m
2.7
2.9
36.3
37.9
0
-3.5
0
0
183.3
(restated)
2015
189.7
-1.1
0
0
402.7
436.5
-35.6
-37.4
0
0.1
−1.1
-46.0
0
50.6
Market Data + Services
34.1
901.1
925.2
0
0
100.0
113.0
Global Securities Financing
Data Services
0
127.0
128.6
Investment Funds Services
0
0
132.8
127.9
Domestic business (CSD)
34.1
0
184.0
186.0
0
84.0
2,465.9
2,605.6
Group
Consolidation of internal net revenue
Total
0
0
439.0
443.9
0
0
139.0
132.7
Infrastructure Services
0
-21.1
114.0
127.2
Index
0
-48.3
-15.7
66.5
175.3
-2.9
-4.3
0
0
124.3
115.2
-8.5
-12.7
0
124.3
0
469.4
-152.1
-152.1
7.0
3.2
184.8
164.6
-33.0
-28.8
430.3
124.1
0
0.6
115.0
-11.9
-13.7
1.0
1.5
160.5
162.2
-28.0
-28.1
2.5
6.3
746.4
781.9
-196.4
-209.1
7.6
3.2
67.7
73.0
-32.9
-40.0
6.7
6.6
17.0
16.7
-65.8
14.9
26.9
46.5
62.6
-2.7
-2.3
12.2
23.4
27.7
21.8
0
0
0
0
15.7
64.2
-0.1
-0.4
0
0.5
-58.6
215.6
1,032.2
0
-3.1
-2.9
6.5
6.6
13.6
15.4
0
0
0.1
0
29.7
26.7
-6.3
-5.8
0
0
124.5
105.8
-23.6
-20.1
0.1
887.5
541.3
0
International business (ICSD)
British pound
Singapore dollar
Czech koruna
US dollars
Swiss francs
Exchange rates
The following euro exchange rates of consequence to Deutsche Börse Group were applied:
Deutsche Börse Group financial report 2016
192
Average rate
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 net profit for the period
attributable to shareholders of the parent company in which the deconsolidation gain or loss is realised.
Currency translation
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".
Intra-Group assets and liabilities are eliminated. Income arising from intragroup transactions is eliminated
against the corresponding expenses. Profits or losses arising from deliveries of intragroup 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.
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.
Deutsche Börse AG and all subsidiaries directly or indirectly controlled by Deutsche Börse AG are included
in the consolidated financial statements. Deutsche Börse Group 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.
Consolidation
Basis of preparation
191
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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 expense 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".
2016
Average rate
2015
CHF
1.5430
1.5222
1.5220
1.5247
SGD
27.0250
27.0198
27.2792
27.0426
CZK
1.0924
1.0522
1.1046
1.1029
USD (US$)
1.0818
at 31 Dec 2015
Closing price as
Closing price as
at 31 Dec 2016
1.0732
1.0644
1.0904
Expenses incurred in connection with operating leases are recognised as an expense on a straight-line
basis over the lease term.
GBP (£)
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.
Leases
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.
Other provisions
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.
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
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.
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, Standard & Poor's, 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, on principal, based on a discount rate of 1.75 per cent, which is determined according to the
Towers Watson “Global Rate:Link" methodology updated in line with the current market trend.
Deutsche Börse Group financial report 2016
188
Provisions for pension obligations are measured, separately for each pension plan, using the projected
unit credit method on the basis of actuarial reports. 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.
Defined benefit plans
A restructuring provision is only recognised when an entity has a detailed formal plan for the re-
structuring and has raised a valid expectation in those affected that the restructuring measures will
be implemented, for example by starting to implement that plan or by announcing its main features
to those affected by it.
EPEX Netherlands B.V. participates in the ABP pension fund within the EEX sub-group. 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.
Multi-employer plans
There are defined contribution pension plans for employees in several countries. In addition, the
employer pays contributions to employees' private pension funds.
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.
Defined contribution plans
Pensions and other employee benefits relate to defined contribution and defined benefit pension plans.
Pensions and other employee benefits
Basis of preparation
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
187
Several Deutsche Börse Group companies are, along with other financial institutions, member insti-
tutions of BVV Versicherungsverein des Bankgewerbes a.G. (BVV), a pension insurance provider with
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 will actually be
utilised as remote. Given that BWV 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, we currently lack
information regarding the allocation of BVV assets to individual member institutions and the respective
beneficiaries. Moreover, we do not know 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.
Contingent liabilities are not recognised, but are 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.
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.
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.
Deferred tax assets and liabilities
In the 2016 financial year, a RSU tranche for so-called risk takers was launched in addition to another
LSI tranche. The new RSU program fulfils the applicable regulatory requirements (see □ note 39).
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
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 a three-year retention period and a one-year waiting
period into account.
Restricted Stock Units (RSU)
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.
Deutsche Börse Group financial report 2016
190
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 the financial year 2014 (see
note 39). 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. Regarding the
2015 and 2016 tranches, cash settlement has been agreed upon as mode of settlement. Deutsche Börse
Group thus measures the LSI shares as cash-settled share-based payment transactions. The options are
Long-term Sustainable Instrument (LSI)
The PSP was launched during the year under review; it replaces the previous SBP 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 calcu-
lated based on the number of shares granted and the increase of net profit for the period attributable to
Deutsche Börse AG shareholders, 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 sub-
sequent payment of the stock bonus will be settled in cash. For further details on this plan, please see
the section "Principles governing the PSP and measurement of target achievement for performance
shares" in the Remuneration report.
Performance Share Plan (PSP)
Within the framework of the CPIP, the CEO of Deutsche Börse AG was offered a one-time participation in
2015. The appropriate number of phantom shares is calculated based on the number of shares granted
and the increase of Deutsche Börse AG's consolidated net income, 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.
Co-Performance Investment Plan (CPIP)
The previous SBP for members of the Executive Board of Deutsche Börse AG was terminated prematurely
on 31 December 2015. The SBP for senior executives of Deutsche Börse AG and of participating sub-
sidiaries is being continued. It 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 2016 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.
Stock Bonus Plan (SBP)
Under the GSP, shares are generally granted at a discount to the market price to 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.
Group Share Plan (GSP)
Basis of preparation
189
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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.
0.8223
0.7244
0.8561
16.5
21.4
914.7
1,049.7
18.3
21.5
18.7
23.9
Other
Xetra
0
27.7
21.8
Repo business
0
0
15.8
64.1
Foreign exchange (360T)¹)
-1.8
0
Trading
125.9
148.0
Clearstream
0
211.1
186.8
0
0
13.6
13.0
Other
0
0
13.5
15.4
Listing
0
103.1
36.0
32.5
Central counterparty for equities
0
0
-0.1
190.1
233.9
Commodities (EEX)
Deutsche Börse Group financial report 2016
194
The probability of utilisation applied when recognising provisions for expected losses from rental agree-
ments is estimated (see note 24). When recognising personnel-related restructuring provisions, certain
assumptions were made, for example with regard to the fluctuation rate, the discount rate and salary
trends. If the actual values were to deviate from these assumptions, adjustments may be necessary.
Provisions
Note 39 contains disclosures on the valuation model used for the stock options. Where the estimates
of the valuation parameters originally applied differ from the actual values available when the options are
exercised, adjustments are necessary; such adjustments are recognised in the consolidated income
statement for the period if they relate to cash-settled share-based payment transactions.
Group Share Plan, Stock Bonus Plan and Long-term Sustainable Instrument
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. Management judgement includes
the determination whether there is a possible obligation from past events, the evaluation of the
probability that an outflow will occur and the estimation of the potential amount. As the outcome
of litigation is usually uncertain, the judgement is reviewed continuously. For further information on
other risks please see ☑ note 37.
Legal risks
Deutsche Börse Group is subject to the tax laws of those countries in which it operates and generates
income. Considerable management judgement 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.
Income taxes
Basis of preparation
193
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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 (such as the 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 as-
sumptions, 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 22.
Pensions and other employee benefits
Deutsche Börse Group tests goodwill as well as intangible assets with indefinite useful lives for impairment
and intangible assets not yet available for use 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 time horizon of normally three to five years. These
plans in turn contain projections of the future financial performance of the assets and cash-generating
units. If their actual financial performance fails to meet these expectations, corresponding adjustments
may be necessary. For further information on the effects of changes in the discount rate and further
assumptions, please see ☑ note 11.
Impairment
The application of accounting policies, the presentation of assets and liabilities, and the recognition
of income and expenses requires the Executive Board to make certain 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.
Key sources of estimation uncertainty and management judgements
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.
0.7366
Consolidated income statement disclosures
555.7
4. Net revenue
Sales revenue
0
0
39.7
41.4
Equity derivatives
0
0
184.4
190.8
Interest rate derivatives
0
0
438.3
473.8
Equity index derivatives
Eurex
2015
€m
2016
€m
(restated)
2015
€m
2016
€m
Net interest income from
banking business
Composition of net revenue
1.2
62.6
-1.1
50.6
84.0
0
-1.4
Financial assets or liabilities measured at fair value through profit or loss
Total
- 141.7
- 160.2
Financial liabilities
- 141.7
- 161.6
Composition of other operating income
0
Financial assets or liabilities measured at fair value through profit or loss
Interest expenses from negative interest yields
163.0
185.4
Loans and receivables
163.0
191.9
Interest income from negative interest yields
2.0
-1.7
Financial assets or liabilities measured at fair value through profit or loss
6.5
Income from exchange rate differences
Income from impaired receivables
Rental income from subleases
4.0
Volume-related costs comprise partial or advance services that Deutsche Börse Group purchases
from third parties, and which it markets as part of its own value chain. They indirectly depend on the
development of volume trends and sales revenue.
Miscellaneous other operating income includes income from cooperation agreements and from training
as well as valuation adjustments.
For details of rental income from subleases see ☑ note 38.
23.6
32.6
17.8
23.5
0.4
0.6
0.8
2.7
1.3
1.9
6.4
€m
€m
2015
2016
(restated)
Total
Miscellaneous
Income from agency agreements
-6.4
-19.7
0.8
-4.4
32.6
0
0
59.1
61.4
- 13.1
- 13.1
2,220.3
2,388.7
-332.9
23.6
-346.6
45.7
401.6
410.0
-42.9
7.5
9.0
138.0
132.8
Financial liabilities
-5.0
36.7
-285.2
-44.9
2,388.7
Interest expenses from positive interest yields
-273.8
-21.4
14.3
26.1
2.7
4.5
Available-for-sale financial assets
16.7
44.5
Loans and receivables
Financial assets or liabilities measured at fair value through profit or loss
196
33.7
Deutsche Börse Group financial report 2016
2016
2015
Composition of net interest income from banking business
€m
€m
Interest income from positive interest yields
75.1
2,220.3
195
liabilities
0
Interest-bearing
0
18.02)
-3.9
1.9
-1.1
0
25.7
5.8
Other provisions
0.1
-3.0¹)
0
-3.1
0
9.1
-38.3
0
0
0
price allocation
from purchase
Intangible assets
-5.02)
7.5
1.3
0
-34.6
0
0
Intangible assets
0
-6.2
10.9
0
-1.8
0
2016
56.8
(restated)
recognised in other
comprehensive income
Tax expense/(income)
differences tax expense/(income)
statement disclosures
Deferred
Deferred tax liabilities
Exchange
rate
tax assets
Deferred
Composition of deferred taxes
Consolidated income
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
The following table shows the carrying amounts of deferred tax assets and liabilities as well as the related
tax expenses recognised in profit or loss or in other comprehensive income.
Tax rates of 12.5 to 40.0 per cent (2015: 12.5 to 45.0 per cent) were applied to the companies in the
remaining countries; see ☑ note 2.
A tax rate of 29.2 per cent (2015: 29.2 per cent) was used for the Luxembourg companies, reflecting
trade income tax at a rate of 6.7 per cent (2015: 6.7 per cent) and corporation tax at 22.5 per cent
(2015: 22.5 per cent).
о
2015
2016
2015
2016
60.9
benefits
other employee
pensions and
Provisions for
€m
€m
€m
0
€m
€m
€m
€m
€m
2015
2016
2015
2016
€m
-197.83)
forward
0
differences
Exchange-rate
0
56.26)
12.3
30.0
0.2
0
0
87.7
1.3
Tax rates of 28 to 32 per cent (2015: 28 to 32 per cent) were used in the reporting period to calculate
deferred taxes for the German companies. These reflect trade income tax at multipliers of 330 to
460 per cent (2015: 330 to 460 per cent) on the trade tax base amount of 3.5 per cent (2015: 3.5 per
cent), corporation tax of 15 per cent (2015: 15 per cent) and the 5.5 per cent solidarity surcharge
(2015: 5.5 per cent) on corporation tax.
Losses carried
0
0
-0.2
0
0
0
0
Gross amounts
62.5
Total
-20.4
Deferred taxes
set off
68.4
64.4
-148.4")
-248.1
1.3
-9.1
-1.5
0
0
0
-149.5
-624.5
-256.1
191.5
82.9
-1.1
0
0
1.7
securities
Investment
1.82)
-2.2
-2.7
0
о
0
0
0
8.8
9.7
assets
Non-current
-192.42)
-4.0
-4.7
0
0
-20.8
-40.7
1.7
Other liabilities
0.6
0.75)
0
-2.5
0
0
-396.0
0
3.5
current assets
Other non-
3.3
24.04)
1.1
-42.2
-1.7
1.7
The total actual tax expenses in the amount of €293.6 million include domestic tax expenses of
€151.9 million and foreign tax expenses of €141.7 million (2015: domestic tax expenses €180.3 mil-
lion, foreign tax expenses €45.9 million). The total deferred tax income in the amount of €-9.1 million
includes domestic tax expenses of €10.4 million and foreign tax income of €–19.5 million (2015:
domestic tax income €-8.8 million, foreign tax expenses €10.1 million).
€m
284.5
Equity method-accounted result of joint ventures
Bondcube Limited
-4.8
-6.6
-0.6
-6.0
Global Markets Exchange Group International, LLP
Total income from equity method measurement"
-0.2
-1.3
China Europe International Exchange AG
-0.4
-1.1
R5FX Ltd
0.3
-0.4
Brain Trade Gesellschaft für Börsensysteme mbH
0
-0.1
Total income from equity method measurement¹
figo GmbH
Net income from associates and joint ventures
Net income from other equity investments
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Net income from associates includes €6.7 million in impairment losses (2015: €2.6 million) attribu-
table to the investments in Global Markets Exchange Group International, LLP and R5FX Ltd. The
negative development of the Group's investments was due in particular to unsatisfactory economic
development in the 2016 financial year and the correspondingly deteriorating economic outlook
expected by Group companies. The recoverable amount was determined on the basis of fair value less
costs of disposal. It was calculated using net asset values (level 3 inputs). The impairment losses were
recognised in the result from associates and are allocated to the Eurex segment.
2) Change of status from an associate to a fully consolidated company effective 1 January 2015 (see also note 2 in the 2015 corporate report)
-1.5
36.9
3.4
43.5
5.3
0
-10.2
-6.6
-5.4
0
-5.4
0
1) Including impairment losses
Net income from equity investments
Net income due to the change of status of EPEX SPOT SE²
-3.1
0
ZDB Cloud Exchange GmbH in Liquidation
8. Net income from equity investments
Deutsche Börse Group financial report 2016
200
94.4
88.4
202.2
171.0
0
0
2.5
0.9
Total
Research expense
1.1
6.6
6.4
17.0
Composition of net income from equity investments
Equity method-accounted result of associates
(restated)
2016
-3.2
0
0.2
0
0.1
0.2
0.3
0.3
Consolidated income
statement disclosures
1.8
Zimory GmbH in Liquidation
Digital Vega FX Ltd
LuxCSD S.A.
Deutsche Börse Commodities GmbH
Tradegate AG Wertpapierhandelsbank
€m
€m
2015
1.8
227.5
Net income from other investments includes in particular €38.4 million due to the disposal of the stake
in BATS Global Markets, Inc. in the fourth quarter of 2016.
9. Financial result
63.6
79.2
1.9
0.3
0.3
0.6
Total
Other interest expense")
Interest expense on current liabilities"
0.3
1.6
Interest expense from negative interests")
1.1
2.8
Transaction costs of non-current liabilities"
2.8
2.8
1) Measured at amortised cost
Interest-equivalent expenses for derivatives held as hedging instrument¹
201
Deutsche Börse Group financial report 2016
1.3
-9.1
-1.4
0.4
227.6
293.2
€m
2015
2016
€m
Market Data + Services
(restated)
Deferred tax (income)/expense
Total
from prior periods
of the reporting period
Current income taxes:
Composition of income tax expense (main components)
10. Income tax expense
202
1.3
2.9
Expenses from the unwinding of the discount on pension provisions
2.3
0.4
Other interest income on receivables classified as "loans and receivables"
0.8
0.5
0.8
0.6
Interest income on bank balances classified as "loans and receivables"
Interest income on tax refunds
1.6
2.6
Other interest and similar income
€m
€m
2015
2016
(restated)
Composition of financial income
Income from available-for-sale securities
0.3
0.6
Income from valuation of derivatives
6.3
11.9
Interest expense on taxes
49.6
56.3
Interest expense on non-current loans¹)
-43.2
148.3
2015
During the year under review, the company received dividends of €1.7 million (2015: €0.9 million)
from investments in associates, and €5.1 million (2015: €3.3 million) from other investments.
2016
€m
Composition of financial expense
6.1
4.6
0
0.1
Interest income on non-current loans classified as "loans and receivables"
Total
0
0.1
(restated)
20.4
Goodwill
0
1,194.2
0
10.7
542.2
194.5
as at 1 Jan 2015
Amortisation and impairment losses
4,879.9
931.5
190.8
2,721.1
775.9
260.6
brought forward
Historical cost as at 31 Dec 2016
€m
€m
1,941.6
Total
Amortisation
52.7
0
0
0
-0.8
-0.9
Disposals
4.3
0
1.6
0
1.5
1.2
Impairment losses
102.3
33.3
0
0
16.3
intangible
assets
Other
account and
construction
in progress"
€m
Intangible assets (part 1)
Internally
Purchased
developed
software
€m
software
€m
Goodwill
€m
Payments on
account and
construction in
progress
€m
1)
Other
intangible
assets
€m
Total
€m
Historical cost as at
1 Jan 2015
230.7
727.1
11. Intangible assets
Consolidated balance sheet disclosures
Consolidated balance
sheet disclosures
Notes
€m
-15.9
-13.7
-0.3
1.6
Income tax expense arising from current year
284.1
228.9
-1.7
Prior-period income taxes
-1.4
Income tax expense
284.5
227.5
To determine the expected tax expense, earnings before tax have been multiplied by the composite tax
rate of 27 per cent assumed for 2016 (2015: 26 per cent).
At the end of the financial year, accumulated unused tax losses amounted to €21.3 million (2015:
€60.6 million), for which no deferred tax assets were recognised. The unused tax losses are attributable
to domestic losses totalling €2.6 million and to foreign tax losses totalling €18.7 million (2015:
domestic tax losses €3.8 million, foreign tax losses €56.8 million). Tax losses of €1.1 million were
utilised in 2016 (2015: €0.7 million).
The losses can be carried forward in Germany subject to the minimum taxation rules, and in Luxem-
bourg indefinitely according to the current legal situation. Losses in other countries can be carried
forward for periods of up to 20 years.
Executive and Supervisory Boards | Management report | Governance | Financial statements
0.4
2,235.7
Exchange rate differences
3.6
Amortisation and impairment losses
-35.6
-34.4
0
0
−1.1
-0.1
Exchange rate differences
0
0
0
0
-1.4
1.4
Reclassifications
-1,324.3
-1.2
0
as at 31 Dec 2016
0
225.1
0
Additions to and reclassifications of software largely concern the development of a pan-European
securities settlement platform (TARGET2-Securities) within the Clearstream and Xetra segments as
well as the development of the risk management and clearing system (Eurex Clearing Prisma) and
the T7 derivatives trading platform within the Eurex segment.
Software, payments on account and construction in progress
3,973.7
4,633.0
1,356.3
859.9
188.9
152.5
2,898.8
2,721.1
168.3
35.5
Carrying amount as at 31 Dec 2016
191.6
33.8
Carrying amount as at 31 Dec 2015
906.2
71.6
1.9
607.6
0
-1.2
0
0
Impairment losses
0
0
49.3
17.5
Amortisation
1.6
10.7
599.2
211.5
as at 31 Dec 2015
Amortisation and impairment losses
135.5
131.5
0
0
3.6
0
0.3
1,359.0
27.8
0.3
Disposals
-1,281.0
0
0
-38.3
-5.0
sale"5)
Reclassification into "assets held for
0.4
-13.5
0
-10.7
-2.5
-0.2
consolidation4)
Disposals from change in scope of
4.2
2,182.0
94.6
-0.1
43.2
100.2
5,468.1
4) This relates to disposals made within the scope of the sale of shares held in Infobolsa S.A.; see also note 2.
5) This relates exclusively to disposals made within the scope of the sale of shares held in U.S. Exchange Holdings, Inc., as well as an asset deal regarding the
disposal of the business operations of Market News International, Inc. and its two subsidiaries; see also note 2.
205
206
Deutsche Börse Group financial report 2016
Intangible assets (part 2)
Payments on
Purchased
software
Internally
developed
€m
software
€m
Tax decreases due to dividends and income from the disposal of equity investments
Other
-0.1
0.1
Effects from changes in tax rates
1.6
12.9
3) This relates primarily to additions within the scope of initial consolidation of Power Exchange Central Europe a.s., Gaspoint Nordic A/S and PEGAS CEGH Gas
Exchange Services GmbH; see also note 2.
Effects of different tax rates
1) Additions to payments on account and construction in progress in the year under review relate exclusively to internally developed software.
2) This relates primarily to additions within the scope of the business combination with 360 Treasury Systems AG and its subsidiaries, as well as within the scope of
initial consolidation of Powernext SA, EPEX SPOT group and APX Holding group; see also note 2.
931.5
0
-33.8
0.1
0
Exchange rate differences
-0.1
-1.3
-21.1
-0.2
-46.9
-69.6
Historical cost as at
31 Dec 2016
260.6
775.9
2,721.1
190.8
4,879.9
11.0
13.6
Tax increases due to other non-tax-deductible expenses
6) Disposal relating to the deconsolidation of U.S. Exchange Holdings, Inc.
5) Separate disclosure in the consolidated statement of changes in equity under "revaluation surplus"
4) Thereof, €41.4 million is disclosed separately in the consolidated statement of changes in equity under "revaluation surplus", and disposal of €-17.4 million
relating to the deconsolidation of ISE
3) Thereof, -€1.1 million due to acquisitions from business combinations relating to the initial consolidation of companies within the EEX group
2) Disposal relating to the deconsolidation of ISE
1) Thereof, -€7.8 million is disclosed separately in the consolidated statement of changes in equity under "revaluation surplus", and disposal of €4.8 million relating
to the deconsolidation of International Securities Exchange Holdings, Inc. (ISE)
68.4
-248.1
1.3
-9.1
-1.5
-581.3
-235.7
0
0
0
0
7) Separate disclosure in the consolidated statement of changes in equity under "accumulated profit"; thereof €-147.2 million (2015: €64.9 million) from
discontinued operations
203
204
Deutsche Börse Group financial report 2016
0
-4.0
Change in valuation allowance for deferred tax assets
-0.5
-0.7
Recognition of deferred taxes in respect of unrecognised tax loss carryforwards
0.7
-0.7
27.5
Tax losses utilised and loss carryforwards not recognised for tax purposes
279.1
Expected income taxes derived from earnings before tax
2015
€m
€m
2016
(restated)
Reconciliation from expected to reported tax expense
Deferred tax liabilities have not been recognised in respect of the tax on future dividends that may
be paid from retained earnings by subsidiaries and associated companies. In accordance with section 8b
(5) of the Körperschaftsteuergesetz (KStG, the German Corporation Tax Act), 5 per cent of dividends
and similar income received by German companies is treated as non-deductible expenses for tax
purposes. There were no unrecognised deferred tax liabilities on future dividends of subsidiaries and
associates as well as gains on the disposal of subsidiaries and associates in the reporting period
(2015: nil).
228.3
2,174.4
6.2
-5.4
-2.1
Reclassifications
1.0
37.7
0
-38.7
0
0
Exchange rate differences
0.8
4.8
119.6
0.2
181.3
306.7
Historical cost as at
31 Dec 2015
0
245.3
0
-1.1
Acquisitions from business
combinations²)
0.3
15.3
554.2
0.8
359.6
930.2
Additions
13.5
7.0
0
91.6
0
112.1
Disposals
-1.0
0
790.8
2,909.5
154.1
-153.8
-5.8
-1,741.2
-1,953.0
Additions
14.9
11.7
0
78.2
0.1
104.9
Disposals
0
-3.6
-0.1
-1.7
0
-46.7
-5.5
"assets held for sale"5)
Reclassification into
2,715.3
6,815.0
Acquisitions through
business combinations³)
0
0
3.3
0
Reclassifications
4.3
Disposals from change in
scope of consolidation4)
-0.2
-2.5
-16.7
0
-0.2
-19.6
7.6
49.2
17.0
100.2
2) Thereof €0.2 million for 2015
1) Thereof €0.2 million for 2015
Total
Other services
Tax advisory services
Other assurance or valuation services
Statutory audits
Composition of fees paid to the auditor
Deutsche Börse Group financial report 2016
198
197
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 ☑ note 7. These costs also
contain costs of strategic and legal consulting services as well as of audit activities.
564.5
600.7
Total
15.9
30.3
Miscellaneous
4.8
2.6
Supervisory Board remuneration
2016
2015
Total
Germany
0.5
0.6
0
0.2
0.6
1.1
0.3
0.9
0.8
1.3
4.0
1.8
1.6
3.2
2.0
3.0¹
€m
€m
€m
€m
Germany
Total
1.82)
3.4
Cost of agency agreements
3.5
2015
2016
(restated)
Composition of other operating expenses
6. Other operating expenses
Staff costs include costs of €12.7 million (2015: €59.1 million) recognised in connection with efficiency
programmes as well as costs of €25.4 million (2015: €6.5 million) for 360T (which has been consoli-
dated since 1 October 2015). The remaining increase is due to a rise in the number of employees (see
also note 43), the remuneration of the Executive Board and higher pay-out of bonuses.
599.7
585.7
117.8
99.5
€m
481.9
€m
(restated)
2015
2016
€m
Social security contributions, retirement and other benefits
Total
Wages and salaries
Composition of staff costs
5. Staff costs
Consolidated income
statement disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
46.8
486.2
5.9
€m
264.9
4.1
Cost of exchange rate differences
13.9
Insurance premiums, contributions and fees
15.6
14.5
Non-wage labour costs and voluntary social benefits
19.9
15.8
Advertising and marketing costs
Costs for IT services providers and other consulting services
25.8
Travel, entertainment and corporate hospitality expenses
43.4
52.2
Non-recoverable input tax
66.6
Premises expenses
97.5
102.2
IT costs
250.5
26.5
4.1
70.3
3.5
Clearstream
4.6
7.9
11.3
19.0
4.4
4.0
9.9
9.9
Other Xetra software
0
0
1.0
1.9
CCP releases
0.2
3.9
0.4
7.2
Trading platform T7 for Xetra/Eurex
Xetra
Collateral Management and Settlement
34.0
48.3
20.5
6.2
75.8
0
1.0
0
1.6
GSF
1.6
2.1
3.4
39.5
2.8
10.4
8.1
21.2
15.7
16.7
15.1
27.3
21.7
Custody
20.5
Investment funds
27.1
Connectivity
58.3
EurexOTC Clear
EEX software
Eurex Clearing Prisma
Trading platform T7 for Xetra/Eurex
Eurex
(restated)
2015
€m
€m
€m
2016
2015
360T
2016
€m
software development
Total expense for
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:
7. Research and development costs
Consolidated income
statement disclosures
199
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
81.8
The "other assurance or valuation services" item includes an expense of €1.4 million arising from
services in connection with the proposed business combination with London Stock Exchange Group plc.
(restated)
Other Eurex software
thereof capitalised
5.4
6.8
5.4
6.5
10.9
9.9
0.6
2.5
8.8
15.0
8.3
33.6
16.3
0.6
5.2
6.9
9.6
3.6
10.3
3.2
2.1
24.4
3.6
7.2
of disposal
fair value less costs
Infobolsa
2.2
1.5
6.5
12.84)
1.1
of disposal
Börse Frankfurt
1.2
fair value less costs
Zertifikate
2.0
6.5
2.5
2.5
6.5
1.1
8.9
of disposal
fair value less costs
0.8
1.4
14.13)
6.5
2.8
value in use
STOXX
ISE
1.9
3.1
9.64)
11.6
fair value less costs
12.74)
6.5
1.1
of disposal
EEX
17.5
18.9
9.34)
2.5
6.5
1.2
of disposal
fair value less costs
9.54)
360T
8.74)
2.0
1.0
1.6
6.5
1.2
of disposal
fair value less costs
Fund Services
2.4
2.8
3.9
8.54)
6.5
1.1
of disposal
fair value less costs
MD+S segment
2.0
2.0
1.6
3.7
4.4
0.1
2.7
Exchange rate differences
0
-2.1
Historical costs as at 31 Dec 2015
1.9
Reclassifications
-14.0
-2.7
-11.3
0
Disposals
0.2
42.3
90.6
0.7
3.7
4.6
Additions
-36.7
0
-25.2
350.0
-11.5
-2.0
0
-2.0
0
Disposals from change in scope of consolidation
441.3
Reclassification into "assets held for sale"¹)
10.3
2.2
8.1
hardware,
operating and
office
equipment
€m
fittings
€m
Fixtures and
Computer
Property, plant and equipment
12. Property, plant and equipment
Payments on
Deutsche Börse Group financial report 2016
213
Even in case of a reasonably possible change of the parameters, none of the above-mentioned CGUs, or
groups of CGUs, would be impaired.
4) After tax
3) Before tax
2) Without depreciation, amortisation and impairment losses
1) CAGR = compound annual growth rate
214
32.0
account and
progress
Additions
5.1
2.0
2.3
0.8
Acquisitions through business combinations
construction in
403.5
322.4
79.9
Historical costs as at 1 Jan 2015
€m
€m
Total
1.2
7.1
6.6
9.34)
1.6
10.3
2.5
8.34)
6.5
0.7
EEX
of disposal
360T
40.9
7.2
1.0
8.54)
6.5
fair value less costs
0.7
fair value less costs
0.7
0.4
2.9
2.0
7.74)
6.5
0.2
of disposal
of disposal
MD+S segment
4.3
1.3
1.0
9.04)
6.5
fair value less costs
Fund Services
of disposal
Eurex Core
%
premium
Discount
Market risk
Risk-free
interest rate
Recoverable
amount
%
CAGR¹)
(Group of) cash-
Key assumptions used for impairment tests in 2016
The following tables indicate material assumptions used for impairment tests for the years 2016
and 2015:
Deutsche Börse Group financial report 2016
212
Key assumptions used to determine the recoverable amount depend upon the respective CGU, or group
of CGUs. Individual costs of capital are determined for each CGU, or group of CGUs, 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 equity index levels, volatility of equity indices, as well as interest rates, exchange rates, GDP
growth, unemployment levels and government debt. When calculating value in use, the projections are
adjusted for the effects of future restructurings and cash outflows to enhance the asset's performance
investments, if appropriate.
generating unit(s)
fair value less costs
rate
%
Net
3.2
3.5
1.0
10.43)
6.5
0.7
Perpetuity
growth rate
value in use
%
%
%
costs²)
revenues
Operating
Clearstream Core
1.0
fair value less costs
0.7
1.2
fair value less costs
of disposal
Eurex Core + ISE
%
%
%
6.5
costs²)
growth rate
Discount rate
%
%
%
premium
Operating
Net revenues
Perpetuity
9.34)
6.7
6.5
1.2
of disposal
fair value less costs
Eurex Core
4.3
1.0
3.0
11.03)
6.5
1.2
value in use
Clearstream Core
3.4
1.5
of disposal
Market risk
CAGR¹)
2.2
3.0
2.0
11.54)
6.5
0.2
fair value less costs
of disposal
of disposal
Börse Frankfurt
Zertifikate
STOXX
5.7
6.3
2.0
12.34)
6.5
fair value less costs
Risk-free
interest rate
0.2
8.94)
Recoverable
amount
generating unit(s)
(Group of) cash-
Key assumptions used for impairment tests in 2015
Consolidated balance
sheet disclosures
Notes
6.5
Executive and Supervisory Boards | Management report | Governance | Financial statements
3) Before tax
2) Without depreciation, amortisation and impairment losses
1) CAGR compound annual growth rate
5.5
6.8
2.0
4) After tax
4.2
1) This relates exclusively to the disposals in connection with the disposal of the interest in the ISE subgroup and with the asset deal regarding the sale of the
business operations of Assam SellerCo, Inc. and its two subsidiaries, see note 2.
Disposals
Disposals/(additions) of impairment losses
Acquisition through business combinations
Revaluation as at 1 Jan 2015
32.6
1,597.6
165.7
Dividends
58.0
14.7
3.4
-0.2
1.0
-586.8¹)
0
-0.9
-1.0
-7.7
3.1
Net income from equity method measurement
0
0
0
-0.9
-3.2
19.3
0
0
6.4
0
0
-6.6
-3.3
16.6
-1.3
Historical cost as at 31 Dec 2016
Reclassifications
0
Reclass into "assets held for sale"
0
0
0
-0.6
-32.3
Acquisitions from business combinations
2,016.3
229.4
55.1
Historical cost as at 31 Dec 2015
2.1
6.8
34.0
Exchange rate differences
0
Additions
-0.1
-2.2
0
0
Addition/(reversal) premium/discount
-6.1
-8.1
0
-0.4
Disposals
12.8
155.6
5.4
5.1
-40.2
7.5
0
0
-0.8
0
0
0
0
0
0
-1.5
- 10.0
-16.6
Dividends
Disposals/(additions) of impairment losses
Reclass into "assets held for sale"
Acquisitions from business combinations
2.3
Revaluation as at 31 Dec 2015
0.2
0
5.3
-0.4
Currency translation differences recognised in equity
0
0
0
0
0.4
0
0
0
-1.8
-5.0
0
Net income from equity method measurement
0
0
-58.9
0
9.2
0
Other fair value changes recognised in equity
-0.7
0
0
0
Currency translation differences recognised in profit or loss
0
0
4.4
0.3
Currency translation differences recognised in equity
-0.3
0¹)
Other fair value changes recognised in profit or loss
-0.6
0.4
Reclassifications
-1.0
0
0
-5.8
5.3
Market price changes recognised in profit or loss
-0.8
0
0
Market price changes recognised in other comprehensive income
0
0
0.3
0.4
Exchange rate differences
-0.3
Amortisation
331.6
0
281.3
50.3
Depreciation and impairment losses as at 31 Dec 2015
6.6
3.0
2.0
1.0
Exchange rate differences
0
0
0
0
0
29.4
36.0
0
-20.6
-8.4
Reclassification into "assets held for sale"¹)
-1.8
0
0
-1.8
Disposals from change in scope of consolidation
0.4
0
0
0.4
Impairment losses
0
-29.0
Reclassifications
0
0
-0.7
-0.8
0.1
-2.0
0.4
-1.5
1.7
Exchange rate differences
Reclassifications
-11.3
-0.7
-5.6
-5.0
Historical costs as at 31 Dec 2016
-11.2
79.6
2.2
-11.2
0
Disposals
37.2
0
30.4
357.8
6.8
302.6
0
260.1
42.5
Depreciation and impairment losses as at 1 Jan 2015
439.6
Amortisation
Disposals
-4.6
-5.4
0
0
-67.7
29.5
1,301.9
147.5
-6.4
111.9
Additions
Acquisition through business combinations
Historical cost as at 1 Jan 2015
€m
Receivables
and securities
from banking
business
€m
€m
Disposals
€m
14.1
771.5
-62.2¹
62.5
-3.5
Reclassifications
0
-1.7
29.8
0
Addition/(reversal) premium/discount
-5.2
0
-17.9
-0.1
14.3
0
Other equity
investments
joint ventures
Investments in
associates and
43.7
Depreciation and impairment losses as at 31 Dec 2016
-1.0
0
-0.5
-0.5
282.4
Exchange rate differences
0
0
-0.1
Reclassifications
-10.0
0
-0.1
0
326.1
Carrying amount as at 31 Dec 2015
Financial assets
13. Financial investments
215
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
0.1
113.5
2.2
75.4
35.9
109.7
0.7
68.7
40.3
Carrying amount as at 31 Dec 2016
49.7
0
0
0
0
0
0
-12.5
0
-0.3
0
-0.3
0
0
0
0
Balance as at 31 Dec 2016
Exchange rate differences
0
Impairments
-12.5
0
names
€m
€m
Trade
Exchange
licences
Changes in other intangible assets by category
Other intangible assets are divided into the following categories:
с
209
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
859.9
122.0
435.4
62.5
240.0
Consolidated balance
sheet disclosures
Member and
customer
relationships
-27.8
-3.1
-459.3
0
held for sale"
Reclassification into "assets
4.3
4.3
0
0
0
0
0
combinations
Acquisitions through business
1,356.3
0
-7.2
0
-0.9
-4.7
-10.1
-2.7
0
Amortisation
0.1
0
0.1
0
0
0
0
Additions
-460.2
0
126.0
Miscellaneous
assets
0.7
Balance as at 31 Dec 2016
-12.5
0
-8.9
-0.1
453.8
-3.5
-0.3
0
-0.3
0
0
Impairments
Exchange rate differences
-27.8
400.9
859.9
€m
EEX
360T
Eurex Core
€m
Core
€m
Clearstream
4.5
(Group of) cash generating unit(s)
Asset
Allocation of goodwill and other intangible assets with indefinite useful lifes to CGUS
Deutsche Börse Group financial report 2016
210
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 cash-generating
unit (CGU), or group of CGUs, that the respective asset is allocated to. The following table outlines the
allocation of assets to the respective CGU:
Due to the discontinuation of a business operation, a customer relationship amounting to €0.3 million
was impaired within the Market Data + Services segment. The recoverable amount was determined
based on the fair value less costs of disposal, using a disposal price of a highly probable transaction.
Within the business combinations with Power Exchange Central Europe a.s., Gaspoint Nordic A/S and
PEGAS CEGH Gas Exchange Services GmbH, Deutsche Börse Group also acquired other intangible
assets besides goodwill in 2016. For details concerning their carrying amount at the time of acquisition
as well as their useful lives, please refer to the tables in note 2 and note 3.
Goodwill
intangible
-0.9
-0.3
0.4
0
business combinations
Acquisitions through
1,356.3
6.4
3.8
757.5
136.9
Balance as at 1 Jan 2016
€m
€m
€m
Total
455.5
-26.6
0.1
Reclassification into "assets
0
Amortisation
0.1
0.1
0
0
4.3
0
-460.2
-1.2
-324.6
-1.7
-132.7
held for sale"
Additions
438.5
67.2
250.1
n.a.
71.8
89.0
TARGET2-Securities
Clearstream
2.0-5.0
n.a.
2.0
7.5
ISE trading platform including applications
6.4-6.9
5.0-6.0
12.1
9.9
20.7
Eurex Clearing Prisma Release 2.0
1CAS Custody & Portal
9.6
11.6
One CLS Settlement & Reporting (1 CSR)
n.a.
n.a.
10.1
10.1
24.7
Single Network
4.9
20.8
17.8
MALMO
n.a.
n.a.
5.0
5.1
n.a.
13.4
31 Dec 2015
years
31 Dec 2016
years
€m
€m
31 Dec 2015
31 Dec 2016
Eurex
T
Remaining amortisation period
as at
Carrying amount as at
Carrying amounts of material software and construction in progress as well as remaining amortisation
periods of software
Consolidated balance
sheet disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
୮
6.4
Derivatives trading platform T7
29.8
14.3
C7 Release 3.0
6.0-7.0
5.0-7.0
14.1
14.5
26.8
360T trading platform
4.0-5.0
29.0
23.2
Eurex Clearing Prisma Release 1.0
4.9-7.0
2.9-5.9
2.3-6.5
n.a.
n.a.
Xetra
0
Exchange rate differences
-159.8
-6.0
0
0
-20.1
0
0
held for sale"
Reclassification into "assets
3.3
3.3
0
-153.8
0
0
0
474.5
0
Balance as at 1 Jan 2016
Other intangible assets
2,721.1
75.0
0
32.6
529.0
987.4
1,063.8
Balance as at 31 Dec 2016
-21.2
-1.1
33.3
0
combinations
Acquisitions through business
360T
ISE
Clearstream
Changes in goodwill and other intangible assets classified by business combinations
Goodwill and other intangible assets from business combinations
Deutsche Börse Group financial report 2016
EEX
208
In addition to event-driven impairment tests on all intangible assets, intangible assets not yet available
for use are tested for impairment at least annually. Impairment losses of €3.9 million (2015: €4.3 mil-
lion) needed to be recognised in 2016. It is disclosed in the “depreciation, amortisation and impairment
losses" item and relates to the Xetra, Clearstream and Eurex segments. The recoverable amount was
determined based on fair value less costs of disposal, using a discounted cash flow model (level 3
inputs).
n.a.
n.a.
6.5
10.0
TARGET2-Securities
207
STOXX
€m
€m
2,898.8
78.8
32.6
33.3
529.0
1,161.3
1,063.8
Balance as at 1 Jan 2016
Goodwill
€m
Total
Miscella-
neous
€m
€m
€m
€m
€m
0
Clearstream
0
0
8.9
0
0
0
8.9
0
9.2
0
0
9.2
15.6
0
0
0
15.6
0
6.6
0
0
0
3.7
4.0
0
0
0
0
4.6
0
4.6
0
0
4.0
3.7
0
0
987.4
0
0
0
0
1,063.8
0
0
0
0
€m
Total
STOXX
€m
Zertifikate
€m
0
18.4
0
0
0
0
0
32.6
0
0
0
0
33.3
0
0
0
0
529.0
32.6
€m
0
0
0
0
0
420.0
420.0
0
0
0
0.1
0
0
0
0
0.1
0
0
19.9
0
0
0.3
0
0
0
0
0
5.8
0
0
0
7.2
0
0
0
0
0
0
0
0.2
0.5
0
0
0
0
0.5
0
0
0
0
1.7
0
1.5
0
0
0
0.2
0
0.2
0
0
0.3
0.2
0
0
0
0.1
0
0
0
0
€m
Fund Services
MD+S segment
0
0
Börse Frankfurt Zertifikate
6.6
0
0
0
0
0
0
0
0
Market News International
0
APX Holding group
0
0
0
PEGAS CEGH Gas Exchange Services
1.7
0
0
0
Power Exchange Central Europe
Clearstream Fund Services
0
0
0
Need to Know News
0
0
0
0
0
0
Impendium
0
European Energy Exchange
0
189.2
292.5
47.3
0
360T group
0
987.4
0
International Securities Exchange
0
0
0
0
0
STOXX
0
0
0
0
Clearstream Global Securities Services
18.4
33.3
0
0
Powernext/EPEX SPOT group
0
0
0
0
0
0
0
1.5
0
0
0
0
19.9
0
7.2
0
0
0
0
PEGAS CEGH Gas Exchange Services
Power Exchange Central Europe
European Energy Exchange
0
Powernext/EPEX SPOT group
0
5.8
Börse Frankfurt
211
Consolidated balance
sheet disclosures
(Group) of cash generating unit(s)
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
The recoverable amounts of the CGUS with allocated goodwill are based either on their values in use or
on their fair value less costs of disposal, depending on the respective unit. The other value is calculated
only in cases in which one of these values (value in use or fair value less costs of disposal) does not
exceed the carrying amount. Since there is no active market for the CGUs, the discounted cash flow
method is used to calculate both value in use and fair value less costs of disposal. The inputs used are
Level 3 inputs in all cases.
0
0.1
0
0
0.3
0
0
0
0
360T group
STOXX
Trade names
0
0
0
Gaspoint Nordic
0
0
0.1
0
Indexium
0
0
0
0
Kingsbury
0
Exchange licences
European Energy Exchange
0.3
0.1
0
0
0
APX Holding group
0.1
0
0
0
Powernext/EPEX SPOT group
0
0
0
0
Börse Frankfurt Zertifikate
1,063.8
0
Other financial
instruments
and loans
0.3
issued by multilateral banks
issued by other public bodies
issued by regional or local public bodies
Fixed-income securities
Composition of receivables and securities from banking business
In the reporting period, impairment losses amounting to €6.7 million (2015: €5.8 million) were
recognised for associates and joint ventures in the income statement. These impairment losses related to
unlisted equity instruments. See ☑note 8 for further details.
For details on revaluations and market price changes recognised in other comprehensive income, see
also note 20. Other equity investments include available-for-sale shares.
As in the previous year, "other financial instruments and loans" include securities with a fair value of
€5.0 million pledged to the Industrie- und Handelskammer (IHK, the Chamber of Commerce) Frankfurt.
The investments in associates and joint ventures include interests in associates with a carrying amount
of €34.3 million (2015: €38.5 million) and interests in joint ventures with a carrying amount of
nil (2015: nil). In financial year 2016, proportionate losses with an amount of nil (2015: nil) were not
recognised for associates accounted for using the equity method.
Deutsche Börse Group financial report 2016
216
26.4
32.5
2,018.6
1,604.8
219.4
255.4
issued by supranational issuers
34.3
Total
31 Dec 2015
Deutsche Börse Group generally uses derivative financial instruments to hedge existing or highly probable
forecast transactions. The derivatives are included in the items “receivables from banking business",
"other non-current assets”, “other current assets", "other non-current liabilities", "liabilities from
banking business" and "other current liabilities".
14. Derivatives and hedges
Securities from banking business include financial instruments listed on a stock exchange amounting to
€1,604.8 million (2015: €2,018.6 million).
2,018.6
1,604.8
77.9
77.5
487.3
352.9
955.4
650.5
498.0
523.9
€m
€m
31 Dec 2016
38.5
Currency translation differences recognised in profit or loss
Carrying amount as at 31 Dec 2016
0
Market price changes recognised in other comprehensive income
0
0
-40.9
0
Other fair value changes recognised in profit or loss
0
0
1.0
1.1
Other fair value changes recognised in equity
0.5
0
1) Reclassified as current receivables and securities from banking business
135.1
6.2
-0.1
Market price changes recognised in profit or loss
0
Carrying amount as at 31 Dec 2015
7.2
89.7
-23.7
Revaluation as at 31 Dec 2016
0
-6.2
0
0
Reclassifications
-0.4
0
0
-1.2
-6.7
0
0
141.4
6.2
0
0
-40.8
0
-0.1
Balance as at 31 Dec 2016 (gross)
103.7
111.4
7.3
-1.2
0
0
10.8
103.7
0
0
0
0
0
−1.1
9.1
0
0
0
0
Deferred taxes
2.4
Balance as at 1 Jan 2015
16.2
-0.5
2.2
1.2
103.7
Balance as at 31 Dec 2016 (net)
Balance as at 31 Dec 2015 (net)
Balance as at 1 Jan 2015 (net)
- 2.0
- 44.2
0
Balance as at 31 Dec 2016
-1.3
-56.2
0
Reversals
0
3.5
0
-1.3
0
0
0.6
Additions
Reversals
0
0
0
Balance as at 31 Dec 2015
0
-4.2
-0.7
Additions
-3.7
1.7
reserves from fair
value
Reversal to profit or loss
6,000,000 16 May 2012
Authorised share
capital IV
n.a.
12 May 2020
38,600,000 13 May 2015
Authorised share
capital III¹)
against non-cash contributions for the purpose of acquiring
companies, parts of companies, interests in companies, or
other assets.
■ 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.
n.a.
Existing shareholders' pre-emptive rights may be disapplied
for fractioning and/or may be disapplied if the share issue is:
12 May 2020
19,300,000 13 May 2015
Authorised share
capital II¹)
Expiry date
10 May 2021
15 May 2017
13,300,000 11 May 2016
Date of authori-
sation by the
shareholders
Amount in €
Composition of authorised share capital
Deutsche Börse Group financial report 2016
222
221
Subject to the agreement of the Supervisory Board, the Executive Board is authorised to increase the
subscribed share capital by the following amounts:
Changes in equity are presented in the consolidated statement of changes in equity. As at 31 December
2016, the number of no-par value registered shares of Deutsche Börse AG in issue was 193,000,000
(31 December 2015: 193,000,000).
20. Equity
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 or 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 €27,777.6 million (2015: €26,870.0 million).
1,022.3
514.2
8.1
3.8
Authorised share
capital |¹)
■for the issuance of up to 900,000 new shares per year to
Executive Board members and employees of the company,
as well as to the management and employees of affiliated
companies within the meaning of sections 15ff. of the
Aktiengesetz (AktG, German Stock Corporation Act).
1) Shares may only be issued, excluding shareholders pre-emptive subscription rights, provided that the aggregate amount of new shares issued excluding
shareholders' 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
Fair value measurement
Reclassifications
Changes from defined benefit obligations
Balance as at 31 Dec 2015 (gross)
Reversal to profit or loss
Reclassifications
Fair value measurement
Changes from defined benefit obligations
Balance as at 1 Jan 2015 (gross)
€m
(financial assets)
business
banking
Other equity
investments
(financial assets)
€m
€m
measurement
103.7
Securities from
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 restric-
tions, and 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.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Consolidated balance
sheet disclosures
The Executive Board is authorised, subject to the approval of the Supervisory Board, to disapply share-
holders' pre-emptive rights to bonds with conversion or option rights to shares of Deutsche Börse AG in
the following cases: (i) to eliminate fractions, (ii) if the issue price of a bond does not fall materially short
of 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 options as compensation
for 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.
103.7
There were no further rights to subscribe for shares as at 31 December 2016 or 31 December 2015.
The revaluation surplus results from the revaluation of securities and other current and non-current
financial instruments at their fair value net of deferred taxes. This item also includes reserves from an
existing investment in an associated company; these reserves were recognised in connection with the
acquisition of further shares, as the company was consolidated at that date. Actuarial gains and losses
for defined benefit obligations are also directly recognised in revaluation surplus.
223
224
Deutsche Börse Group financial report 2016
Revaluation surplus
Recognition of
hidden
Revaluation surplus
6.6
Cash flow hedges
103.7
24.0
7.8
0
0
0
38.9
42.5
1.7
0
-0.4
-4.6
-0.1
-0.7
0
0
-0.1
0
0
0
0
42.9
42.6
2.4
0
-0.3
36.9
- 183.8
- 3.5
0.3
1.5
0.6
-0.1
-0.7
0
None of the Group companies subject to solvency supervision has Tier 2 regulatory capital.
Due to the specific arrangements for the two investment firms, Eurex Repo GmbH and Eurex Bonds
GmbH, 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 the credit and market risks are low, the relevant criterion for both companies is
the own funds requirement on the basis of overhead costs.
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).
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.
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.
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 detail differs both in relation to the capital
components as well as the capital requirement components and capital deduction items. Moreover,
EMIR does not specify any capital buffers such as those introduced by the EU Capital Requirements
Directive 2013/36/EU (CRD IV) and the Regulation (EU) No 575/2013 (Capital Requirements
Regulation, CRR) for banks.
Powernext SA is a regulated market in France, and is hence subject to supervision exercised by the
Autorité des marchés financiers (AMF); furthermore, Powernext SA 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".
Deutsche Börse Group financial report 2016
226
225
REGIS-TR S.A., as trade repository according to Regulation (EU) No 648/2012/EU (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.
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, and the higher requirement has to be met in
each case. Irrespective of its status as a specialist credit institution according to German law, European
Commodity Clearing AG is only subject to EMIR capital requirements.
With the admission as an “Authorised Clearing House" (ACH) by the Monetary Authority of Singapore
(MAS) on 8 July 2015, Eurex Clearing Asia Pte. Ltd. has become subject to own funds requirements
according to the Securities and Futures Act (Singapore) and other specific MAS requirements. However,
the majority of these requirements will only become materially effective with the commencement of
operations, which is currently scheduled for 2017. As a “Recognised Market Operator", Cleartrade
Exchange Pte. Limited is subject to MAS supervision as well, and has to fulfil the respective own funds
requirements.
41.5
- 133.5
- 2.5
0.2
-58.3
- 0.4
- 0.1
1.0
50.3
4.6
-32.1
0.8
1.1
0.1
-6.6
-4.5
-117.1
-114.0
-15.9
-5.3
1.1
-0.1
0
8.7
0.1
0.4
3.2
3.2
0
0
0
-58.8
-159.7
-9.0
-0.1
1.1
€m
€m
€m
Total
Defined benefit
obligations
2.2
67.2
5.3
Accumulated profit
The "accumulated profit" item includes exchange rate differences amounting to €5.1 million (2015:
€209.6 million). €412.3 million was withdrawn due to currency translation for foreign subsidiaries in
the reporting period (2015: €–170.6 million) and €207.8 million was added relating to investment
hedges that were used to hedge the net investment in ISE against currency risk (2015: €-41.0 million).
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 group at the level of the supervisory group.
0.2
As in the previous year, Eurex Bonds GmbH and Eurex Repo GmbH are subject to specific provisions
applicable to certain investment firms under BaFin solvency supervision.
Consolidated balance
sheet disclosures
Other financial
instruments (financial
assets)
€m
Current securities from
banking business
€m
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
1.7
-8.9
-0.3
0
0
0
0
1.2
0
140.5
0
-6.0
-1.1
0
-27.3
-27.3
0
0
0
- 44.2
0
0
8.9
0
8.9
0
0
0
0
2.8
1.5
0.1
- 6.2
- 156.5
2.8
0
31 Dec 2015
0.3
€m
€m
60
45
31 Dec 2015
31 Dec 2016
୮
Currency swaps
Negative fair value
Positive fair value
Notional value
Quantity
Derivatives transactions: outstanding positions (currency swaps)
Currency swaps as at 31 December 2016 expiring in less than six months had a notional value of
€3,073.8 million (2015: €2,621.4 million), as well as a negative fair value of €2.4 million and a
positive fair value amounting to €65.4 million (2015: negative fair value of €12.4 million and a
positive fair value amounting to €23.3 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. These are reported under “current
receivables and securities from banking business" and "liabilities from banking business" in the balance
sheet (see also notes 16 and 28).
Derivatives held for trading
3,073.8
65.4
Until the termination of the hedge, effective exchange rate differences from the private placements were
reported in the balance sheet item “accumulated profit", as are exchange rate differences from the
translation of the functional currency of foreign subsidiaries. There was no ineffectiveness in the net
investment hedges in 2016. A cumulative amount of €116.3 million (2015: €120.9 million) was
recognised in other comprehensive income. In 2016, this amount was reclassified through profit or loss
upon the disposal of the net investment in the ISE subgroup.
Hedges of a net investment
Deutsche Börse Group financial report 2016
218
0
0
8.9
0
Cash flow hedges as at 31 December
Closed-out
0
6.0
Amount recognised in profit or loss during the year
-8.9
-6.0
In connection with the private placements in the USA, the series A to C bonds were designated as hedges
against foreign-exchange risk arising from the translation of the functional currency US dollar into euros in
order to hedge the net investment in the ISE subgroup until the disposal of the subgroup on 30 June 2016.
The series A bonds had matured in 2015, series B and C were paid back on 29 July 2016.
€m
-2.4
2,621.4
23.3
-12.4
Net amount of financial
instruments
Gross amount of offset financial
instruments
Gross amount of financial
instruments
Gross presentation of offset financial instruments held by central counterparties¹)
The following table gives an overview of the effects of offsetting the financial instruments held by
central counterparties:
The aggregate financial instruments held by central counterparties are classified into current and non-
current in the balance sheet. Receivables and liabilities that may be offset against a clearing member are
reported on a net basis. Financial liabilities of €430.2 million (2015: €283.1 million) were eliminated
because of intra-Group GC Pooling transactions.
126,289.6
7,175.2
5,856.6
107,909.6
133,464.8
113,766.2
132.1
21,413.7
24,385.1
1,872.4
111,919.0
87,508.7
31 Dec 2015
€m
Eurex Clearing AG and Eurex Frankfurt AG have made prepayments to some customers. The repay-
ment of these amounts depends on the fulfillment of certain criteria. Eurex Clearing AG and Eurex
Frankfurt AG recognise embedded derivatives separately from the host contract as they are not closely
related to this contract: they amount to €4.9 million (2015: €6.2 million), are classified as held for
trading and are shown under "other non-current liabilities” (€1.5 million) and “other current liabilities"
(€3.4 million).
Furthermore, Deutsche Börse AG made prepayments as the relevant criteria were fulfilled. Accordingly,
the embedded derivative is also recognised separately under “other current liabilities” (€3.3 million).
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Consolidated balance
sheet disclosures
15. Financial instruments held by central counterparties
Amount recognised in other comprehensive income during the year
Composition of financial instruments held by central counterparties
Options
Others
Total
thereof non-current
thereof current
31 Dec 2016
€m
Repo transactions
0
0
Cash flow hedges as at 1 January
28
0
0
short-term
Cash flow hedges
long-term
0
0
0
0
short-term
16
0
0
30
-6.0
0
-18.6
-9.1
28, 30
23.3
65.7
16
0
0
0
0.1
Total
short-term
long-term
Derivatives held for trading
-1.5
31 Dec 2016
€m
0
0
€m
€m
2015
2016
Changes in cash flow hedges
In 2015, Deutsche Börse AG entered into a cash flow hedge to eliminate the foreign-exchange risk
associated with the purchase amount of CHF 650 million to be paid in order to acquire the outstanding
interest in STOXX Ltd. and Indexium AG. The forward transaction was designated to hedge the foreign-
exchange fluctuation after having successfully negotiated the main terms of the purchase contract. The
forward transaction was settled on 31 July 2015; the purchase of shares in STOXX Ltd. and Indexium
AG was also closed on this day.
In 2016, Deutsche Börse AG entered into a cash flow hedge to (partially) eliminate the foreign-exchange
risk associated with a US$ loan amounting to a nominal value of US$170 million granted to a subsidiary
with the functional currency US dollar. The forward transaction will be settled on 28 March 2017. On
31 December 2016, the fair value of the forward contract amounted to €–6.0 million. The changes in
fair value have been recognised in revaluation surplus and released through profit or loss upon
recognition of the foreign-exchange gain of the hedged instrument.
Cash flow hedges
No financial instruments designated as fair value hedges were outstanding as at 31 December 2016 or
2015.
Fair value hedges
- 18.6
-16.6
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Consolidated balance
sheet disclosures
217
Derivatives (fair value)
Fair value hedges
0
0
€m
€m
€m
31 Dec 2015
0
31 Dec 2016
31 Dec 2016
€m
Liabilities
Note
Assets
Note
long-term
31 Dec 2015
0
31 Dec 2015
31 Dec 2016
€m
-1.8
-0.1
0
1.6
6.3
-3.0
0
0.2
1.5
7.6
€m
Balance as at 31 Dec 2016
Reversal
Utilisation
6.0
Acquisitions from business combinations
Balance as at 31 Dec 2015
Reversal
Utilisation
Acquisitions from business combinations
Additions
Balance as at 1 Jan 2015
Allowance account
As in the previous year, there were no trade receivables due after more than one year as at 31 December
2016.
17. Changes in valuation allowance on trade receivables
All of the securities held as at 31 December 2016 and 2015 were listed and issued by sovereign or
sovereign-guaranteed issuers.
Overdrafts from settlement business represent short-term loans of up to two days' duration that are
usually secured by collateral. Potential concentrations of credit risk are monitored for counterparty credit
limits (see note 36).
10,142.9
13,465.5
23.3
Additions
A minimum total capital ratio of 8 per cent generally applies to credit institutions subject to the CRR.
None of the credit institutions or groups currently subject to CRR regulations (Clearstream Banking S.A.,
Clearstream Banking AG, Clearstream Holding group and Eurex Clearing AG) is currently designated as
systemically important. 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 are introduced in stages,
depending on the economic environment and systemic risk components: since 2014, CSSF has imposed
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
1.4
0.7
1.6
3.4
3.5
3.5
25.8
21.7
26.3
32.9
64.1
43.2
889.3
404.7
€m
19. Restricted bank balances
Total
Consolidated balance
sheet disclosures
18. Other current assets
Composition of other current assets
31 Dec 2016
€m
Other receivables from CCP transactions
Tax receivables (excluding income taxes)
65.4
Prepaid expenses
Incentive programme
Guarantees and deposits
Creditors with debit balances
Derivatives
Claims against insurance companies
Miscellaneous
Interest receivable
1.2
15.2
64.1
50,488.0
-67,288.1
-74,873.1
from options
Financial liabilities
21,413.7
24,385.1
-45,874.4
-50,488.0
67,288.1
74,873.1
from options
Financial assets
-111,635.9
-87,078.5
23,239.4
15,931.9
31 Dec 2015
€m
31 Dec 2016
€m
31 Dec 2015
€m
Financial assets from repo
transactions
103,440.6
135,158.4
45,874.4
- 15,931.9
87,508.7
111,919.0
Financial liabilities from
repo transactions
-103,010.4
-134,875.3
-23,239.4
€m
-24,385.1
1) The collateral deposited by clearing members cannot be attributed directly to the individual transactions. For information on the composition of collateral, see
→ note 36.
592.3
10,054.3
12,792.6
6.8
378.8
0.4
293.8
3,714.5
7,320.0
736.8
1,128.0
5,217.4
4,050.4
1) See note 14.
Total
Forward foreign-exchange transactions¹)
Interest receivables
Available-for-sale debt instruments
Overdrafts from settlement business
16. Current receivables and securities from banking business
In addition to non-current receivables and securities from banking business that are classified as non-
current financial assets (see ☑ note 13), the following receivables and securities from banking business,
attributable solely to the Clearstream subgroup, were classified as current assets as at 31 December
2016.
219
220
Deutsche Börse Group financial report 2016
Composition of current receivables and securities from banking business
-21,413.7
31 Dec 2016
€m
€m
Loans to banks and customers
Reverse repurchase agreements
Balances on nostro accounts
Money market lendings
Margin calls
31 Dec 2015
Uncollectible receivables of €0.5 million (2015: €1.4 million) for which no valuation allowances had
been recognised in prior periods were written off in the reporting period.
23.3
65.8
€m
Losses from changes in financial assumptions
-0.8
-0.8
Losses from changes in demographic assumptions
-2.9
-2.9
Return on plan assets, excluding amounts already recognised in interest income
Remeasurements
26.9
-6.4
33.3
2.9
-6.4
9.3
24.0
24.0
0
0.3
-0.3
140.7
-302.0
442.7
0
0.8
-0.8
4.7
4.7
-0.1
9.6
31.5
31.5
Experience gains
-0.4
In financial year 2016, employees converted a total of €5.3 million (2015: €2.6 million) of their
167.9
-324.7
492.6
2.1
2.9
-0.8
0
-13.7
0
-0.9
0.9
-29.2
-29.2
1) Thereof €0.1 million (2015: €0.3 million) in the offsetting item for non-controlling interests
Balance as at 31 Dec 2016
Tax and administration costs
Benefit payments
Plan participants
Employers
Contributions:
Effect of exchange rate differences
0
-0.2
0.2
27.4¹)
-2.9
30.3
-0.4
-9.7
0
-1.0
1.0
-6.1
30.0
-0.6
-0.6
2.8
-6.1
8.9
21.7
21.7
1.6
-1.4
3.0
145.6
-284.4
430.0
€m
€m
Total
Fair value of
plan assets
of obligations
€m
Present value
Past service cost and gains and losses on settlements
Interest expense/(income)
Current service cost
Acquisitions from business combinations
Balance as at 1 Jan 2015
Changes in net defined benefit obligations
The present value of defined benefit obligations can be reconciled as follows with the provisions reported
in the consolidated balance sheet:
Deutsche Börse Group financial report 2016
23.9
variable remuneration into deferred compensation benefits.
Remeasurements
7.7
-32.0
-32.0
Interest expense/(income)
Current service cost
Acquisitions from business combinations
Balance as at 31 Dec 2015
Tax and administration costs
Withdrawal of plan assets
Benefit payments
Plan participants
Employers
Contributions:
0.5
-1.8
2.3
Effect of exchange rate differences
-3.5¹)
9.6
-13.1
-6.1
-6.1
Experience gains
-7.0
-7.0
Losses from changes in financial assumptions
1.9
1.9
Acquisitions from business combinations
7.7
Return on plan assets, excluding amounts already recognised in interest income
Eurex Clearing AG
EMIR capital adequacy ratio
Own contribution to default fund
31 Dec 2016
31 Dec 2015
€m
€m
€m
€m
31 Dec 2016
€m
31 Dec 2015
€m
387.1
396.1
76.4
64.3
463.5
460.4
Clearstream Holding group
Clearstream Banking S.A.
283.3
302.2
88.1
51.3
371.4
353.5
Clearstream Banking AG
103.8
93.9
7.2
19.7
111.0
31 Dec 2015
113.6
31 Dec 2016
[
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
European Commodity Clearing AG
31 Dec 2016
€m
Consolidated balance
sheet disclosures
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 0.625 per cent
was applied in 2016 to all other regulated Group companies subject to CRR regulations. Taking these
effects into account, the minimum total capital ratio was 8.625 per cent.
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 single entity and Group level. 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 in agreement with the supervisory authorities,
using the so-called DirectVaR. However, formal approval of the new calculation method is still pending.
Due to these changes, and given additional risk scenarios for new products and processes (i.e.
TARGET2-Securities), and for compliance and legal risks, as well as other model adjustments, own
funds requirements at the level of the Clearstream Holding group and at Clearstream Banking S.A.
declined slightly, while they increased for Clearstream Banking AG. The operational risk capital
requirements take into account a temporary banking supervision premium for 2015 and 2016,
which will no longer apply following the conclusion of supervisory reviews and the formal approval
of the DirectVaR, expected during the first half of 2017. Regarding Clearstream Holding group,
technical closing-date items related to open foreign currency positions incurred own funds requirements
for market risk of about €20 million in 2016 (the corresponding open foreign currency positions were
below the threshold value in 2015). These effects, combined with the usual fluctuations of own funds
requirements for credit risk, resulted in a slight increase of own funds requirements for credit and market
risk at the Clearstream Holding group. At Clearstream Banking S.A., requirements have increased due to
closing-date items related to receivables as well as to higher own funds requirements in the securities
lending business (matched principal broking principle). The non-recurrent nature of considerable
technical closing-date items related to a settlement loan previously recognised at Clearstream Banking
AG led to a marked decline in the entity's own funds requirements for credit and market risk.
The Clearstream Holding group already responded to the (expected) increased own funds requirements
in the past by launching a programme to strengthen its capital base; this programme continued in 2016.
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, as well as through contributions to capital reserves at Clearstream Banking S.A.
and Clearstream Banking AG.
227
228
Deutsche Börse Group financial report 2016
In the medium to long term, the Clearstream Holding group expects a moderate increase in own funds
requirements to arise at supervisory group level for the following reasons:
▪ CRD IV capital buffers, which are being increased in stages
■ the future applicability of own funds requirements based on the Central Securities Depositories
Regulation (CSDR)
■ establishment of own funds requirements resulting from the introduction of minimum requirements for
equity and eligible liabilities (MREL) as a result of Directive 2014/59/EU
■ implementation of the so-called CRR II package and other amendments under Basel III (presumably
applicable not before 2019)
Eurex Clearing AG's own funds requirements declined compared with the previous year. Given the
increase in revenue, own funds requirements for operational risk rose slightly according to our model,
while own funds requirements for credit and market risk declined due to the non-recurrent nature of
considerable technical closing-date items related to outstanding receivables recognised in 2015. For
simplicity reasons, Eurex Clearing AG generally does not recognise existing collateralisation for out-
standing settlement receivables in the calculation of own funds requirements. However, regarding the
outstanding receivables recognised at year-end 2015, collateralisation was applied retroactively. The
previous year's figures were adjusted accordingly.
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 increased 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 on the basis of three-year average historical income, including the assumed clearing fees, and are
therefore not subject to daily fluctuations. Compliance with the minimum supervisory 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. In 2016, Eurex Clearing AG received a €50.0 million contribution to its capital reserve
from parent company Eurex Frankfurt AG. An additional contribution of €100.0 million was made in
January 2017. Further contributions are scheduled for the coming years, in order to continuously
strengthen Eurex Clearing AG's capital base.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Consolidated balance
sheet disclosures
Composition of own funds requirements
Own funds requirements for
operational risk
Own funds requirements for credit
and market risk
Total capital requirements
୮
୮
Eurex Clearing AG
66.7
65.8
1,042.4
998.1
22.5
22.6
Clearstream Banking AG
111.0
113.6
297.9
278.7
21.5
19.6
Eurex Clearing AG
81.2
85.3
364.8
314.8
36.0
29.5
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. The €50.0 million contribution made to the capital reserve of
Eurex Clearing AG was entirely added to Eurex Clearing AG's own contribution to the default fund in
2016. Another increase in Eurex Clearing AG's contribution to the default fund, in the amount of
€50.0 million, is scheduled for 2017.
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 consolidated 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. The capital base of other entities
is consistently monitored. Against this background, equity was increased in 2016 by means of a
contribution to the capital reserve in the amount of €25.0 million. Given the increase in the regulatory
minimum requirements for contributions to the clearing fund, European Commodity Clearing AG's default
fund contribution was increased by €1.5 million. Considering the increase, European Commodity
Clearing AG's total default fund contribution amounted to €7.1 million, and thus exceeded regulatory
minimum requirements. Similar to the other companies, its capital resources are reviewed on an
ongoing basis. Depending on future business performance, and in particular on changes in the regulatory
framework, the capital resources will be adjusted as needed; however, this is not expected at present.
229
230
Deutsche Börse Group financial report 2016
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
353.5
371.4
Clearstream Banking S.A.
Clearstream Holding group
14.5
19.5
81.2
85.3
European Commodity
Clearing AG
6.0
4.5
1.3
3.0
7.3
7.5
Regulatory capital ratios
Own funds requirements
236
Regulatory equity
31 Dec 2016
€m
31 Dec 2015
€m
31 Dec 2016
€m
31 Dec 2015
€m
31 Dec 2016
%
31 Dec 2015
%
463.5
460.4
1,260.3
1,197.3
21.8
20.8
Total capital ratio
There have been a separate pension plan (basic pension plan) and a supplementary benefits plan
(bonus plan) for employees of STOXX Ltd. (since 2015), of Eurex Zürich AG (since 2012) and of
Eurex Global Derivatives AG (since 2012); 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, the contributions are
determined as a percentage of the bonus; it is also funded by contributions from employees and the
employer. The retirement age is 65. The beneficiaries can choose between pension payments and a one-
off payment.
13.7
For employees of Finnovation S.A. and REGIS-TR S.A. a group plan has been entered into with Swiss
Life (Luxembourg) S.A.; it 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.
Own funds requirements
Powernext SA
Cleartrade Exchange Pte. Limited
Eurex Clearing Asia Pte. Ltd.
REGIS-TR S.A.
Compliance with own funds requirements
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 SA 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 SA and
Cleartrade Exchange Pte. Limited, we expect slightly increasing own funds requirements for both entities
going forward. While the capital base of Powernext SA is considered appropriate for the anticipated
upswing, Cleartrade Exchange Pte. Limited's capital base will be adjusted, if required.
According to the MAS, Eurex Clearing Asia Pte. Ltd. is required to provide own funds to fulfil “operational
risk requirements”, “investment risk requirements” as well as “general counterparty risk requirements".
Given the current business activities, own funds requirements are based exclusively on “operational risk
requirements". Furthermore, Eurex Clearing Asia Pte. Ltd. is required to notify MAS without undue delay
if the capital cover falls below 120 per cent of own funds requirements.
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.
124.0
152.2
7.0
7.0
5.6
4.6
1,264.7
1,300.0
9.5
10.4
0.8
0.8
31 Dec 2015
%
31 Dec 2016
%
31 Dec 2015
€m
31 Dec 2016
€m
31 Dec 2015
€m
€m
31 Dec 2016
Equity ratio
Regulatory equity
T
31 Dec 2016
31 Dec 2015
Net profit for the period
Proposal on the appropriation of the unappropriated surplus
Net profit for the period 2016 is higher than last year.
The annual financial statements of the parent company Deutsche Börse AG, prepared as at 31 Decem-
ber 2016 in accordance with the provisions of the Handelsgesetzbuch (HGB, the German Commercial
Code), report net profit for the period of €553.2 million (2015: €315.9 million) and shareholders'
equity of €2,643.0 million (2015: €2,504.0 million). In 2016, Deutsche Börse AG distributed
€420.1 million (€2.25 per eligible share) from the unappropriated surplus of the previous year.
21. Shareholders' equity and appropriation of net profit of Deutsche Börse AG
Deutsche Börse Group financial report 2016
232
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.
26.4
39.9
12.3
10.8
3.7
2.1
Regulatory equity
2.2
10.1
10.2
0.6
0.6
6.4
6.4
3.4
3.9
€m
€m
€m
€m
31 Dec 2015
31 Dec 2016
1.4
Appropriation to other retained earnings in the annual financial statements
Own funds requirements
Compliance with own funds requirements
0
-100.0
-50.0
-7.5
-6.0
264.8
264.8
53.4
42.5
The capitalisation of Eurex Bonds GmbH significantly exceeded the CRR requirements. Due to the profits
expected to be retained in future, the capital resources of Eurex Bonds GmbH will increase gradually in
the coming years. However, if costs remain more or less stable and the own funds requirements for credit
and market risk are low, the capital requirements are expected to remain virtually unchanged.
Eurex Repo GmbH transfers its earnings to Eurex Frankfurt AG based on a profit and loss transfer agree-
ment. Eurex Repo GmbH increased its capital base as part of the CRR first-time application and the
requirements set forth in a delegated regulation of the EU, which defines profit transfers as overheads
and thus requires their inclusion in the basis for own funds requirement calculations. Due to the
company's decelerating business activities – resulting from current market conditions (low interest
rates, ECB policies) - Eurex Repo GmbH's earnings declined, with negative effects on the profits to be
transferred. Hence, the own funds requirements declined compared with the previous year. Depending
on the future business performance as well as changes to the regulatory requirements, further
contributions to capital may be necessary to a limited extent; however, they are currently not expected
for the medium term.
Composition of own funds/capital requirements
Eurex Bonds GmbH
Eurex Repo GmbH
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 2016
€m
Switzerland
31 Dec 2016
€m
31 Dec 2015
€m
31 Dec 2016
31 Dec 2015
€m
€m
0.2
0.2
0.8
-13.0
0
0
48.5
231
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
5.6
4.6
5.6
4.6
0.4
0.4
0.8
0.8
31 Dec 2016
31 Dec 2015
€m
Eurex Bonds GmbH
Eurex Repo GmbH
€m
89.0
7.3
7.5
74.6
71.1
19.6
15.0
155.8
160.1
26.9
22.5
364.8
314.8
73.9
81.2
Unappropriated surplus
31 Dec 2015
€m
0.8
62.0
179.7
Eligible current employees
31 Dec 2015
€m
€m
31 Dec 2015
31 Dec 2016
Other
€m
€m
€m
Luxembourg
Germany
Total
Total
Breakdown of beneficiaries
The defined benefit plans comprise a total of 2,713 (2015: 2,686, adjusted for changes to the basis of
consolidation 2015: 2,646) beneficiaries. The present value of defined benefit obligations can be
allocated to the beneficiaries as follows:
140.7
167.9
4.4
17.8
145.7
Amount recognised in the balance sheet
0
0
0
0
0
Impact of minimum funding requirement/asset
ceiling
3.2
140.7
20.8
262.5
237.0
Former employees with vested entitlements
The Clearstream subgroup and Finnovation S.A., both based in Luxembourg, still operate separate
defined benefit plans. The only defined benefit pension plan still in operation in favour 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 on 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 reports and the amount of the obligation is calculated in
accordance with Luxembourg law.
31 Dec 2016
Luxembourg
Consolidated balance
sheet disclosures
235
As part of adjustments to the remuneration systems to bring them into line with supervisory
requirements (see note 39 for detailed information) contracts were adjusted in 2016 and 2015
for some executives. 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 has now been fixed on the basis of annual income received in
2013 and will henceforth be adjusted annually, 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 fixed which will be reviewed
annually, and adjusted if necessary, by the Supervisory Board, taking changed circumstances in terms of
income and purchasing power in account.
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.
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 on 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.
Germany
Deutsche Börse Group financial report 2016
234
Individual commitment plans exist for executive board members of certain Group companies; they are
based on the plan for executives described in the next but one paragraph, 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 on 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 five
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.
Executive boards of Group companies (Germany and Luxembourg)
Essentially, the retirement benefits encompass the following retirement benefit plans:
167.9
442.7
21.1
63.3
408.2
81.1
98.5
0
0.7
97.8
Pensioners or surviving dependants
124.6
131.6
0.3
0.6
130.7
492.6
4.4
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
145.7
Total
Total
Net liability of defined benefit obligations
233
sheet disclosures
Consolidated balance
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
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.
Defined benefit pension plans
22. Provisions for pensions and other employee benefits
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 €2.35 per eligible share, an amended resolution for the appropriation of the unappropriated
surplus will be proposed to the Annual General Meeting.
186,805,015
Germany
-6,194,985
Number
Number of shares outstanding as at 31 December 2016
Number of treasury shares
Number of shares issued as at 31 December 2016
No-par value shares carrying dividend rights
6.0
Appropriation to retained earnings
439.0
Distribution of a regular dividend to the shareholders of €2.35 per share for 186,805,015 no-par value shares carrying
dividend rights
Proposal by the Executive Board:
17.8
-108.2
553.2
193,000,000
Luxembourg
445.0
€m
Net liability of defined benefit obligations
3.9
0.1
€m
0.7
3.1
Present value of unfunded defined benefit
obligations
137.5
164.0
4.3
17.1
142.6
Funded status
-302.0
-324.7
€m
-45.5
-16.7
€m
31 Dec 2016
€m
Present value of defined benefit obligations
that are at least partially funded
405.1
31 Dec 2015
Other
€m
21.0
439.5
488.7
Fair value of plan assets
-262.5
62.6
6.5
5.9
5.7
9.1
5.4
0.5
0.6
3.2
1.8
5.8
9.6
18.2
11.7
87.2
68.1
117.0
€m
31 Dec 2015
31 Dec 2016
1) IHK Industrie- und Handelskammer Frankfurt am Main (the Frankfurt/Main Chamber of Industry and Commerce)
thereof with remaining maturity of more than 5 years
thereof with remaining maturity of between 1 and 5 years
Total
Other
Early retirement
9.4
€m
Provisions for restructuring and efficiency measures include provisions amounting to €1.7 million (2015:
€3.3 million) for the restructuring and efficiency programme resolved in September 2007, €14.7 million
(2015: €18.7 million) for the programme resolved in 2010 to increase operational performance and
€31.5 million (2015: €37.7 million) for the programme resolved in 2013 to improve the cost structures
and operational processes in order to adapt to a permanently changed business environment as well as
€20.2 million (2015: €27.5 million) for the growth programme resolved in 2015. For more details on
the restructuring and efficiency programmes see “Internal management – management systems"
section in the combined management report.
95.0
€m
€m
Bonuses
€m
Total
Other taxes
Income taxes:
prior periods
period
Income taxes:
reporting
Balance as at 31 Dec 2016
Interest
Currency translation
Additions
Reversal
Utilisation
Reclassification
Changes in the basis of consolidation
Balance as at 1 Jan 2016
26. Tax provisions
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
The financial liabilities recognised in the balance sheet were not secured by liens or similar rights,
either as at 31 December 2016 or as at 31 December 2015.
The decrease in interest-bearing liabilities is largely attributable to the repayment of all US dollar bonds
during 2016. For details, see the “Capital management" section of the combined management report.
The bonds issued by Deutsche Börse Group have a carrying amount of €2,284.7 million (2015:
€2,546.5 million) and a fair value of €2,457.7 million (2015: €2,679.9 million).
25. Liabilities
For details on the Stock Bonus Plans, see note 39.
28.5
22.0
103.2
131.7
Composition of tax provisions
147.2
Anticipated losses
-25.6
-1.4
-0.8
-0.1
-1.3
-6.7
-121.0
-1.8
-0.6
0
-2.5
-62.3
-6.2
1.9
1.0
0
0.2
-9.4
-8.1
0
0
0
0
-8.0
306.2
€m
13.8
102.7
Jubilees
0.2
1.2
Pension obligations to IHK¹
Stock bonus plans
Restructuring and efficiency measures
Composition of other non-current provisions
Other non-current provisions have more than one year to maturity.
24. Other non-current provisions
Deutsche Börse Group financial report 2016
244
295.3
17.6
8.7
9.4
3.1
101.7
3.0
0
0.3
-0.2
0
0.1
-0.2
0
0
0
0
-0.1
5.1
0.1
0
3.1
26.2
29. Cash deposits by market participants
Total
Interest liabilities
Forward foreign-exchange transactions - held for trading
Money market lending
Margin deposits
Overdrafts on nostro accounts
Issued commercial paper
Customer deposits from securities settlement business
Composition of liabilities from banking business
The liabilities from banking business are attributable solely to the Clearstream subgroup.
28. Liabilities from banking business
Deutsche Börse Group financial report 2016
246
245
For details on share-based payments, see ☑note 39.
Restructuring and efficiency measures include provisions amounting to €0.1 million (2015: €0.1 mil-
lion) for the restructuring and efficiency programme resolved in 2007, and €0.3 million (2015:
€0.5 million) for the programme resolved in 2013 to improve the cost structures and operational
processes in order to adapt to a permanently changed business environment, as well as €9.3 million
(2015: €23.7 million) for the growth programme resolved in 2015. For details see the "Internal
management" section of the combined management report.
174.5
178.3
3.4
6.1
0.6
0.5
2.1
1.3
1.2
2.5
Composition of cash deposits by market participants
6.5
Liabilities from margin payments to Eurex Clearing AG by clearing members
Liabilities from margin payments to European Commodity Clearing AG by clearing members
Liabilities from cash deposits by market participants in equity trading
31 Dec 2016
€m
7.6
26,869.0
27,777.6
7.7
25,540.2
1,321.1
24,798.2
2,973.8
5.6
31 Dec 2015
€m
€m
31 Dec 2016
11,681.4
13,840.3
0
0.5
12.4
2.4
0
15.5
17.1
125.7
498.1
321.9
286.5
349.5
10,867.3
13,024.8
€m
31 Dec 2015
Total
290.5
5.0
19.3
0
0
0.4
0.3
0
0.1
117.8
19.2
42.3
56.3
-47.7
0
-47.6
-0.1
-44.0
-0.4
-23.8
-19.8
-2.6
-2.9
0
0.3
-66.3
0
-66.3
0
316.7
0
3.5
0
195.1
7.3
24.7
10.2
35.4
47.5
76.3
96.3
€m
€m
31 Dec 2015
31 Dec 2016
Total
Miscellaneous
Anticipated losses
Rent and incidental rental costs
Personnel costs
Operational claims
Recourse and litigation risks
Stock bonus plans
Restructuring and efficiency measures
Interest on taxes
Bonuses
Composition of other current provisions
27. Other current provisions
Tax provisions of €173.4 million (2015: €166.3 million) have an estimated remaining maturity of more
than one year.
274.3
42.4
36.8
9.6
238
85.4
461.6
4.3
481.4
-2.3
432.3
-2.3
505.4
2.6
453.4
2.4
Reduction by one year
479.7
-2.6
431.7
-2.5
2.5
1) Present value of the obligations using assumptions in accordance with the table "actuarial assumptions"
504.9
Life expectancy
19.3
525.9
18.8
Salary growth
Increase by 0.5 percentage points
505.0
2.5
455.4
2.9
Reduction by 0.5 percentage points
482.6
-2.0
432.6
-2.3
Pension growth
Increase by 0.5 percentage points
Reduction by 0.5 percentage points
Increase by one year
587.5
Composition of plan assets
In Germany, the plan assets are held by a trustee in safekeeping for individual companies of Deutsche
Börse Group and for the beneficiaries: at the company's instruction, the trustee uses the funds
transferred to acquire securities, without any consulting on the part of the trustee. The contributions
are invested in accordance with an investment policy, which may be amended by the companies
represented in the investment committee in agreement with the other members. 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.
Total not listed
Total plan assets
31 Dec 2016
31 Dec 2015
€m
%
€m
%
270.7
83.4
253.8
84.0
229.8
248.2
2.6
Cash
Germany
Qualifying insurance policies
Investment funds
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. Up to 75 per
cent of this benchmark is derived from the return on five-year German federal government bonds and up
to 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,
and it may hold cash, including in the form of money market funds.
Switzerland
The assets of the pension funds of STOXX Ltd. (since 2015), of Eurex Zürich AG (since 2012) and
Eurex Global Derivatives AG (since 2012) have been invested with AXA Stiftung Berufliche Vorsorge and
are therefore reported under “qualifying insurance policies".
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Consolidated balance
sheet disclosures
239
Composition of plan assets
Bonds
Government bonds
Multilateral development banks
Corporate bonds
Derivatives
Equity index futures
Interest rate futures
Total listed
2.6
Reduction by 1.0 percentage point
377.4
1.00
3.50
3.50
1.00
3.00
3.50
Salary growth
0.80
2.20
2.20
0.60
1.75
1.75
Discount rate
%
Pension growth
%
2.00
0
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.
Sensitivity analysis
In Germany, the “2005 G” mortality tables (generation tables) developed by Prof Klaus Heubeck are
used in a modified version. 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 2010
generation tables are used.
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)
1) Up to the age of 50, afterwards O per cent
n.a. 2)
2.00¹)
2.00¹)
n.a.2)
2.00¹
2.00¹)
Staff turnover rate
0
1.80-2.00
2.00
1.50
-14.8
%
%
%
Effect on defined benefit
obligation
2015
defined benefit
obligation
Change
€m
%
Present value of the
obligation¹
Discount rate
Deutsche Börse Group financial report 2016
442.7
Increase by 1.0 percentage point
418.8
-15.0
Change
%
2016
defined benefit
obligation
€m
Change in actuarial assumption
%
Switzerland
Luxembourg
31 Dec 2015
Germany
Switzerland
Luxembourg
Germany
31 Dec 2016
Actuarial 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 shown in the following
table:
Assumptions
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
237
Sensitivity analysis of defined benefit obligation
Effect on defined benefit
obligation
38.3
3.0
0.8
5.0
111.9
35.4
31.0
0
0
-0.1
0
0.4
0
0.1
-0.4
-2.8
-32.1
0
€m
-18.9
Stock bonus plans
Restructuring and
efficiency measures
€m
Deutsche Börse Group financial report 2016
23. Changes in other provisions
Changes in other provisions
Balance as at 1 Jan 2016
Changes to the basis of consolidation
Reclassification²)
Utilisation
Reversal
Additions
Currency translation
Interest
Balance as at 31 Dec 2016
Recourse and
litigation risks
€m
Interest on taxes
€m
242
-0.1
0
Consolidated balance
sheet disclosures
243
Pension obligations
Other personnel
Bonuses
€m
Operational claims
to IHK¹)
provisions
Miscellaneous
Total
€m
€m
€m
€m
€m
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
-14.2
The "other personnel provisions” item as at 31 December 2016 includes personnel-related provisions
of €5.7 million (2015: €5.8 million) for jubilees, €2.5 million (2015: €1.2 million) for other personnel
costs and €0.5 million (2015: €0.6 million) for early retirement benefits. The “miscellaneous" item
includes provisions for anticipated losses of €7.0 million (2015: €6.5 million) and provisions for rent
and service costs of €1.3 million (2015: €2.1 million).
25.5
-1.0
1.0
10.0
12.1
14.8
0
-0.1
0
0
0
3.5
2.8
0
0
78.3
47.5
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 22) as well as to reclassifications from liabilities.
In 2017, Deutsche Börse Group expects to make contributions to multi-employer plans amounting to
around €9.5 million.
During the reporting period, the costs associated with defined contribution plans, and designated multi-
employer plans, amounted to €35.3 million (2015: €34.2 million).
Defined contribution pension plans and multi-employer plans
22.6
7.0
19.3
6.4
39.3
12.1
37.3
12.4
324.7
100.0
302.0
100.0
As at 31 December 2016, plan assets did not include any financial instruments held by the Group
(2015: nil), nor did they include any property occupied or other assets used by the Group.
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.
6.0
Market risk
18.0
16.7
0.2
1.1
0.4
0.6
1.0
0.2
0.1
13.9
4.3
9.8
3.2
285.4
87.9
264.7
87.6
5.1
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 lower, the actual return is further expected to
exceed the return on corporate bonds with a good rating in the medium to long term.
Deutsche Börse Group considers the price risk resulting from the proportion of listed securities 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.
Moreover, 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 the plan assets.
12.4
11.4
12.6
13.3
Between 2 and 5 years
More than 5 years up to 10 years
Total
39.4
43.1
83.7
85.7
148.1
153.5
1) The expected payments in CHF were translated into euros at the relevant closing rate on 31 December.
The expected costs of defined benefit plans amount to approximately €17.1 million for the 2017
financial year, including net interest expense.
Between 1 and 2 years
Less than 1 year
€m
€m
240
Deutsche Börse Group financial report 2016
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
6.5
Consolidated balance
sheet disclosures
Duration and expected maturities of the pension obligations
The weighted duration of the pension obligations was 17.3 years as at 31 December 2016.
Expected maturities of undiscounted pension payments
Expected pension
payments¹)
31 Dec 2016
Expected pension
payments¹
31 Dec 2015
241
492.6
Other operating income
0
Contingent purchase price components
Other non-current liabilities
Total liabilities
-0.2
0
0
-0.2
-113,122.9
0
-113,114.5
-8.4
Executive and Supervisory Boards | Management report | Governance | Financial statements
-6.7
Notes
By comparison, the financial assets and liabilities measured at fair value as at 31 December 2015 were
allocated as follows to the hierarchy levels:
Fair value hierarchy
Recurring fair value measurements
ASSETS
Financial assets held for trading
Derivatives
Fair value as at
31 Dec 2015
thereof attributable to:
€m
Level 1
€m
Level 2
€m
Consolidated balance
sheet disclosures
Level 3
-6.0
-12.7
2,223.1
0
0
2,414.0
113,601.7
6.9
Derivatives
Non-current financial instruments held by
central counterparties
-5,856.6
0
-5,856.6
0
Current financial instruments held by
-107,249.5
-107,249.5
Liabilities from banking business
-2.4
0
-2.4
0
Other non-current liabilities
-1.5
0
-1.5
Other current liabilities
central counterparties
2,223.1
116,022.6
€m
central counterparties
Equity instruments
Other equity investments
Total
Debt instruments
Other financial instruments
Non-current receivables and securities from banking business
Current receivables and securities from banking business
Other current assets
Total
Total assets
LIABILITIES
Financial liabilities held for trading
Available-for-sale financial assets
Derivatives
0
128.0
6.1
134.1
0
128.0
6.1
31.4
31.4
0
2,018.6
2,018.6
134.1
Non-current financial instruments held by
Total
0
7,175.2
0
7,175.2
0
Current financial instruments held by central counterparties
126,241.3
0
126,241.3
0
Current receivables and securities from banking business
23.3
0
Other current assets
23.3
Other non-current assets
0
0
0
0
0
0
0
0
133,439.8
0
133,439.8
0
0
0
592.3
26,869.0
14, 30
Liabilities at
amortised cost
Amortised cost
419.1
223.7
Cash flow hedge Fair value
Derivatives held Fair value
for trading
6.0
6.7
6.2
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.
251
27,777.6
252
As at 31 December 2016, the financial assets and liabilities measured at fair value were allocated to the
following levels of the fair value hierarchy:
Fair value hierarchy
Recurring fair value measurements
ASSETS
Financial assets held for trading
Derivatives
Non-current financial instruments held by
central counterparties
Fair value as at
31 Dec 2016
thereof attributable to:
€m
Deutsche Börse Group financial report 2016
Level 1
€m
amortised cost
Liabilities at
Amortised cost
13,837.9
11,669.0
Other bank loans and overdrafts
Trade payables
33
Held for trading
Liabilities at
amortised cost
Fair value
Amortised cost
2.4
12.4
0.1
42.2
Amortised cost
Liabilities at
amortised cost
471.2
372.8
Liabilities to related parties
Cash deposits by market participants
29
Other current liabilities
Liabilities at
Amortised cost
amortised cost
3.6
1.8
Amortised cost
0
Level 2
€m
€m
Total
Debt instruments
Other financial instruments
Non-current receivables and securities from banking business
Current receivables and securities from banking business
Total
Total assets
LIABILITIES
Financial liabilities held for trading
197.4
190.9
0
Other equity investments
6.5
190.9
0
6.5
26.0
26.0
0
0
1,604.8
1,604.8
0
0
592.3
197.4
Level 3
Equity instruments
Total
5,856.6
5,856.6
Current financial instruments held by
central counterparties
107,679.7
107,679.7
0
Current receivables and securities from banking business
65.4
0
65.4
0
Available-for-sale financial assets
Other non-current assets
0
0
0.1
0.3
0
0
0.3
113,602.1
0
113,601.7
0.4
Other current assets
0.1
Liabilities at
amortised cost
0
62.3
0
0
Other operating expenses
3.6
2.8
0.8
0
0
0
recognised in profit or loss
Unrealised capital gains/(losses)
4.3
0
4.3
0
0
0
4.3
4.3
0
0
0
0
Realised capital gains/(losses)
0
-4.3
0
4.3
0
-0.3
The value of an equity investment listed in level 3 is reviewed annually by the issuer, who may initiate
transactions. During the period under review, fair value measurement resulted in positive effects of
€1.0 million recognised directly in equity.
Consolidated balance
sheet disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
-1.5
-6.7
-1.7
0.3
0.1
6.5
Balance as at 31 Dec 2016
1.1
-0.3
0
0
0
1.1
revaluation surplus
Changes recognised in the
3.9
3.1
0.8
0
0
0
Other operating income
0
Furthermore, this item includes an equity fund, the fair value of which is calculated on the basis of the
net asset value determined by the issuer. Deutsche Börse Group decreased its investment in the equity
fund in 2016, resulting in a disposal of €0.7 million. The fair value measurement of this item resulted in
positive effects of €0.1 million recognised directly in equity.
0
0
3.2
0.2
3.0
0
0
0
Other operating income
-0.5
-0.5
0
0
0
Changes recognised in the
0
2.7
-0.3
3.0
0
0
0
recognised in income
Unrealised capital gains/(losses)
2.0
0
2.0
0
Other operating expenses
0
revaluation surplus
0
Reclassification
-0.7
0
0
0
0
-0.7
Disposals
-5.4
-3.3
-2.5
0.3
0.1
0.1
Additions
-4.4
-6.2
-4.3
0
0
6.1
Balance as at 1 Jan 2016
0.1
0
0
0
0
62.3
The "other non-current assets" item increased by €0.1 million due to a call option. The option's fair
value was derived from a Black Scholes model based on unobservable market data.
"Other non-current liabilities” increased by €1.0 million in connection with contingent purchase price
components. During the period under review, the reassessment of the probability that such components
would be utilised resulted in other operating income of €0.8 million. Another contingent purchase price
component expired as at year-end 2016. The reversal of the obligations resulted in other operating
income of €4.3 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 that are appropriate to the risk.
0
6.2
Contingent purchase price components
Other non-current liabilities
Total liabilities
4.3
4.3
133,143.9
0
133,133.4
10.5
During the reporting period, the investments in Bats Global Markets, Inc., were reallocated from level 2
0
to level 1. Given the entity's IPO in the second quarter of 2016, quoted prices in an active market have
been available since that date.
254
Deutsche Börse Group financial report 2016
Financial assets and financial liabilities listed in levels 2 and 3 as at 31 December 2016 are measured
as follows:
■ The derivatives listed in level 2 comprise forward forgein 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 equity investments allocated to level 2 were measured on the basis of current, comparable market
transactions as at 31 December 2015. No investments have been allocated to level 2 as at
31 December 2016.
■ The fair value of the financial instruments held by central counterparties allocated to level 2 is determined
by market transactions for identical or similar asstes in markets that are not active and by option
pricing models based on observable market prices.
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
Other non-
Other equity
investments
253
€m
6.2
0
0
0
0
0
0
0
2,112.3
135,686.2
2,112.3
0
0
2,112.3
133,567.8
Other current liabilities
6.1
central counterparties
7,175.2
0
Current financial instruments held by central counterparties
125,958.2
7,175.2
125,958.2
0
0
Liabilities from banking business
0
0
0
Non-current financial instruments held by
The "other current assets" item increased by €0.3 million due to a forward purchase of additional shares
in an associated entity. The measurement of the forward transaction was based on a discounted cash
flow method, using unobservable market data.
Other non-
current
€m
current
liabilities
1.8
0
1.8
Financial result
0
0
0
-0.2
0
-0.2
Other operating income
■ other current liabilities
0
■ cash deposits by market participants
■ restricted bank balances
■ other receivables and other assets as well as current receivables from banking business, to the extent
that these are measured at amortised cost
■ other loans, which are reported under "financial assets"
■ unlisted equity instruments whose fair value generally cannot be reliably determined on a continuous
basis and that are reported under the "financial assets" item; these are carried at cost less any
impairment losses
The carrying amounts of the following items represent a reasonable approximation of their fair value:
Debt instruments issued by Deutsche Börse Group have a fair value of €2,457.7 million (31 December
2015: €2,679.9 million) and are reported under interest-bearing liabilities. The fair value of such
instruments is based on the debt instruments' quoted prices. Hence, debt instruments were allocated to
level 2.
The fair value of other financial assets and liabilities not measured at fair value is determined as follows:
Deutsche Börse Group financial report 2016
256
255
The "other current liabilities" item comprises another derivative financial instrument related to contingent
repayment claims in connection with advance payments made in the amount of €3.3 million. The
measurement of the derivative is based on an internal model, taking into account the contingent
repayment criteria for the payments made by Deutsche Börse AG. Since this is an internal model, the
parameters can differ from those of the settlement date.
Derivative financial instruments from an incentive programme of Eurex Frankfurt AG with a carrying
amount of €1.5 million were allocated to "other non-current liabilities” during the reporting period. The
item “other current liabilities” also includes derivative financial instruments from an incentive programme
of Eurex Clearing AG, with a carrying amount of €6.2 million. At the end of the financial year, the total
carrying amount of the derivative financial instruments was €3.4 million. In the course of the reporting
period, the subsequent measurement of these financial instruments led to gains of €3.1 million and
expenses of €0.4 million; these amounts are reported under “other operating income" and "other
operating expenses". The financial instruments are regularly measured at fair value through profit and
loss using an internal model at the quarterly reporting dates. The model takes into account the criteria
underlying the conditional repayment of the grant made by Eurex Clearing AG, and Eurex Frankfurt AG.
The criteria include, in particular, non-financial indicators such as the expected number of customers in
a specific market segment as well as expected trading volumes. They are continuously monitored, while
taking into account possible adjustments. In order to do this, customer information is also used. Since
this is an internal model, the parameters can differ from those of the settlement date. However, the
derivative financial instrument will not exceed an amount of €1.5 million, and €7.0 million, respectively.
This amount arises if the beneficiaries of the incentive programme fulfil the conditions and a repayment
of the contribution is not taken into consideration.
■ other cash and bank balances
Other current
0
Realised capital gains/(losses)
Other current
€m
€m
€m
€m
Balance as at 1 Jan 2015
5.6
0
0
-9.1
-5.9
-9.4
0
Additions
0
0
0
0
1.7
Disposals
-1.3
0
0
0
0
-1.3
1.7
0
14, 28
48.3
1,331.8
1,009.9
409.3
1,633.7
1,407.3
0
Cash flow hedges
0
0
-160.2
0
0
0
0
0
0
0
0
0
0
Derivatives held for trading
-1,332.3
-1,008.9
-400.4
-1,620.5
-1,341.7
Fair value hedges
0
0
0
and derivatives held
by central counterparties
Cash inflow - derivatives and
hedges
Cash flow hedges
Fair value hedges
Derivatives held for trading
Cash outflow - derivatives and
hedges
20,717.7
36,495.9
68,646.2
69,521.2
0
18,146.9
-20,717.7
-36,495.9
-69,076.4 -69,804.3
-18,146.9
-19,989.3
0
0
154.3
0
0
0
0
19,989.3
less financial assets
Total derivatives and hedges
1.0
€m
5.7
7.9
10.0
1,362.3
1,051.6
1,146.8
1,785.6
- 270.1
- 343.7
2,284.7
2,546.5
€m
0.2
0
0
0
о
о
0
о
о
7.7
- 0.6
- 16.0
13,837.9
4.3
-0.5
2015
Over 5 years
-427.2
-269.9
65.6
0
Financial guarantee contracts
0
0
0
977.9
0
0
Consolidated balance
sheet disclosures
2016
249
Contractual maturity
More than 1 year but not
Reconciliation to carrying
amount
Carrying amount
€m
2016
€m
2015
€m
2016
€m
2015
€m
2016
€m
more than 5 years
2015
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
11,669.1
atives held by central counterparties
central counterparties
3.2
12.7
6.2
7.8
6.2
4.9
13.5
2.9
2.6
2.7
1.9
0
18.1
95.0
38.2
525.7
330.4
247
248
Deutsche Börse Group financial report 2016
31. Maturity analysis of financial instruments
Underlying contractual maturities of the financial instruments at the reporting date
Contractual maturity
Non-derivative financial
liabilities
Interest-bearing liabilities
2016
10.5
Sight
2015
22.3
29.3
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Consolidated balance
sheet disclosures
30. Other current liabilities
Composition of other current liabilities
31 Dec 2016
€m
Liabilities from CCP positions
Tax liabilities (excluding income taxes)
Interest payable
Vacation entitlements, flexitime and overtime credits
Deferred income
Derivatives
20.5
Social security liabilities
Liabilities to supervisory bodies
Debtors with credit balances
Issued commercial paper
Miscellaneous
Total
31 Dec 2015
€m
386.4
89.3
30.5
22.7
28.7
Special payments and bonuses
Financial liabilities and deriv-
€m
Not more than 3 months
2016
2015
€m
515.1
0
4.5
Cash deposits by market
participants
24,803.9
26,869.0
2,973.7
0
0
0
Other bank loans and overdrafts
513.9
0.1
0
0
0
Total non-derivative financial
liabilities (gross)
38,672.0
38,379.6
3,609.6
745.0
274.3
124.9
Derivatives and financial instruments held by
42.2
€m
80.6
82.4
€m
2016
€m
More than 3 months but not
more than 1 year
2015
€m
0
0
23.3
15.0
22.4
38.0
0
0
380.1
Other non-current financial
liabilities
Non-derivative liabilities from
banking business
13,487.9
11,387.8
Trade payables, payables to
related parties and other current
liabilities
0
0
0
98.7
214.9
251.9
0
Liabilities from banking business
0
104.8
64.1
Trade receivables
17
Receivables from related parties
Other current assets
Loans and
receivables
Held for trading
Loans and
receivables
Loans and
receivables
Amortised cost
12,807.8
10,054.3
Fair value
Amortised cost
65.4
23.3
592.3
669.8
Amortised cost
2.0
4.7
18
Loans and
receivables
Amortised cost
441.8
924.9
Held for trading
Restricted bank balances
Other cash and bank balances
19
554.1
Loans and
Fair value
229.9
0.2
Non-current financial instruments held by
15
Held for trading
Fair value
central counterparties
Other non-current assets
Held for trading
Loans and
receivables
Fair value
Amortised cost
5,856.6
7,175.2
48.3
0.1
8.3
7.4
Current financial instruments held by central
counterparties
15
Held for trading
Fair value
107,679.7
Current receivables and securities from
banking business
14, 16
Loans and
receivables
AFS¹)
Amortised cost
126,241.3
0
0.4
Fair value
Amortised cost
0
2,284.7
2,281.0
Net investment
hedge²)
Amortised cost
0
265.5
Non-current financial instruments held by
15
Held for trading
Fair value
central counterparties
5,856.6
Amortised cost
Other non-current liabilities
Held for trading
Fair value
1.7
7,175.2
4.3
Current financial instruments held by central
counterparties
15
Held for trading
Liabilities at
amortised cost
Fair value
Amortised cost
107,249.5
125,958.2
229.9
14
0.3
Liabilities at
amortised cost
(excluding finance leases)
receivables
27,777.6
26,870.0
33
Loans and
receivables
Amortised cost
1,458.1
711.1
1) Available-for-sale (AFS) financial assets
2) This relates to the private placements which were designated as hedging instruments of a net investment hedge (see note 14).
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
14, 25
Consolidated balance
Classification of financial instruments (part 2)
Consolidated balance sheet item
(classification)
Note
Category
Measured at
Carrying amount
୮
31 Dec 2016
€m
31 Dec 2015
€m
Interest-bearing liabilities
sheet disclosures
receivables
Amortised cost
Loans and
1,440.6
1,542.2
0
0
113,336.0
133,181.7
- 4,384.6
- 5,633.1
- 1,440.6
- 1,542.2
0
0
5,633.1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4,384.6
- 113,766.2
994.4
705.0
0
о
0
0
0
0
27,777.6
0
0
0
- 133,464.8
0
0
0.1
26,869.0
42.2
0
1,362.5
1,055.9
1,146.8
1,785.6
- 162.6
- 249.2
44,902.6
41,841.8
0
100.4
0
0
31 Dec 2015
€m
€m
58.0
85.3
197.4
134.1
Non-current receivables and securities from
13
AFS¹)
Fair value
banking business
Carrying amount
31 Dec 2016
1,604.8
Other financial instruments
13
AFS¹)
Historical cost
0
0.9
AFS¹)
Fair value
26.0
31.4
Other loans
13
2,018.6
0
Measured at
Fair value
0
0
0
0
0
0
0
0
0
0
0
0
о
о
250
Deutsche Börse Group financial report 2016
32. Classification of financial instruments under IAS 39
The following table shows an analysis of the financial instruments in the balance sheet in accordance
with their classification under IAS 39 as well as the corresponding carrying amounts:
Classification of financial instruments (part 1)
Consolidated balance sheet item
(classification)
Note
Other equity investments
13
AFS¹)
Historical cost
AFS¹)
Category
0
56,508.9
53,960.1
Executive and Supervisory Boards | Management report | Governance | Financial statements
0
0
1,033.6
878.1
22.0
7.4
152.6
147.7
559
726
5,176
5,100
о
о
0
152.6
147.7
0
5,176
257
47
878.1
1,033.6
162.0
178.1
36.9
-1.5
0
0
36.9
-1.5
191.4
168.4
1,108.2
935.6
42
0
1,108.2
935.6
-13.3
-6.4
-74.6
-57.5
0
0
-74.6
-57.5
0
46
42
n.a.
-
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 identified the following information on geographical regions: the euro zone,
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. Thus, in addition to sales to customers based in the
Asia Pacific region, Deutsche Börse Group also reports sales of products based on Asia Pacific under-
lyings. These include, for example, trading of the South Korean KOSPI index on Eurex, settlement and
custody services for securities issued by Asian entities, global securities financing from and with Asian
customers, and index products such as the STOXX China Total Market indices. Furthermore, the Group
earns net interest income on Asian customer balances. In total, this Asia-Pacific-driven business
amounted to an additional €49.1 million in 2016 (2015: €50.1 million).
265
Other disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Information on geographical regions
0.1
Sales revenue¹)
Non-current assets³)
Number of employees
2016
€m
2015
2016
2015
2016
€m
€m
€m
Investments²)
0
1.0
0.3
n.a.
46
42
264
Deutsche Börse Group financial report 2016
In the year under review there was an extraordinary impairment loss of €5.8 million (2014:
€3.9 million, see ☑ note 8).
Non-cash valuation allowances and bad debt losses resulted from the following segments:
Breakdown of non-cash valuation allowances and bad debt losses
2016
2015
-0.1
€m
Eurex
Xetra
Clearstream
0.2
0
0.4
0.3
0.1
-0.1
Market Data + Services
Total
€m
€m
0
-1,317.4
-46.0
2,557.3
2,419.9
0
0
84.0
50.6
0
0
84.0
50.6
9.0
7.5
45.7
36.7
-13.1
-13.1
32.6
23.6
452.9
446.5
-48.3
2,465.9
2,605.6
439.0
2016
€m
2015
€m
2016
€m
2015
€m
2016
€m
2015
€m
403.8
400.9
2,557.3
2,419.9
2,735.3
0
2,557.3
2,419.9
40.1
443.9
38.1
48.3
46.0
-48.3
-46.0
0
0
0
2,553.2
-61.4
-59.1
-11.8
-13.0
-131.0
-119.0
0
0
-131.0
-119.0
-122.0
-121.1
-599.7
-600.7
0
0
-600.7
-564.5
-218.6
-233.2
-1,317.4
-1,283.2
0
0
-564.5
-1,283.2
-585.7
0
2,673.9
2,494.1
-42.9
-44.9
-346.6
-332.9
61.4
59.1
-285.2
-273.8
0
410.0
2,388.7
2,220.3
0
0
2,388.7
2,220.3
-84.8
-99.1
-585.7
-599.7
401.6
€m
2015
€m
2015
16
1,128.0
736.8
0
0
Group¹)
3,375.6
1,606.8
0
0
Other fixed-income
securities
Clearstream
13, 16
Floating rate notes
Eurex
13
302.35)
9.6
281.05)
0
0
5.0
Clearstream
Balances on nostro
accounts
0
0
0
5,231.0
Uncollateralised cash
investments
Money market lendings -
Eurex¹)
central banks
Money market lendings -
Eurex¹)
other counterparties
0
24,910.6
0
0
0
2.2
0
0
Clearstream
16
7,320.0
3,714.5
25,972.1
0
Clearstream
Group
securities transactions
Technical overdraft
facilities
Clearstream
16
293.8
378.8
n.a.)
n.a."
Automated Securities Fails Clearstream
Financing³)
Loans for settling
ASLplus securities lending) Clearstream
1,403.29
927.19)
44,777.8
48,602.8
46,474.8
49,908.7
1,858.3
47,068.1
48,926.4
868.5
50,409.4
51,277.9
90,432.0
89,272.7
Total
5,231.03)4)
0
34,146.6
13, 16
13
1,894.85)
5.06)
1,801.7
0
0
5.16)
0
0
Fund assets
Eurex
0
13
11.9
0
0
Group
13
11.4
9.5
0
0
38,957.3
0
2016
0
5,217.4
99
146
Asia-Pacific
140.3
121.0
0
1.0
3.9
3.8
199
207
Total of all
regions
2,605.6
2,465.9
152.6
147.7
4,121.6
4,781.1
5,176
5,100
1,670.1
11.9
0.5
0.5
Eurozone
1,328.1
1,305.3
145.7
146.2
3,617.4
2,618.9
3,843
3,828
Rest of
Consolidation
Europe
907.1
6.4
0
488.4
488.3
1,035
919
America
144.9
132.5
992.3
of internal net
revenue
-48.3
Amount at
31 Dec 2016
€m
31 Dec 2015
€m
Amount at
31 Dec 2016
€m
Collateralised cash
investments
Reverse repurchase
Eurex¹)
agreements
Amount at
Amount at
31 Dec 2015
289.5
0
Clearstream
16
4,050.4
5,217.4
Group¹)
660.0
0
4,999.9
€m
291.42)
4,079.83)4)
662.5
5,033.7
Note
Collateral
Group
2,557.3
-46.0
2,419.9
152.6
147.7
4,121.6
4,781.1
5,176
5,100
1) Including countries in which more than 10 per cent of sales revenue was generated: UK (2016: €759.0 million; 2015: €695.7 million) and Germany (2016:
€640.9 million; 2015: €649.9 million).
Segment
2) Excluding goodwill
36. 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 risk report, which is part of the combined management
report), such as the nature and extent of risks arising from financial instruments, as well as the
objectives, strategies and methods used to manage risk.
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). Economic capital is assessed on a 99.98 per
cent confidence level for a one-year holding period. The economic capital is compared with the Group's
liable equity capital adjusted by intangible assets so as to test the Group's ability to absorb extreme and
unexpected losses. The economic capital for financial risk is calculated at the end of each month and
amounted to €474.0 million as at 31 December 2016, whereby €407.0 million stem from credit risk
and €67.0 million stem from market 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.
266
Deutsche Börse Group financial report 2016
Credit risk
Credit risk arises in Deutsche Börse Group from the following items:
Credit risk of financial instruments
Carrying amounts -
maximum risk exposure
3) Including countries in which more than 10 per cent of non-current assets are held: Germany (2016: €3,327.7 million; 2015: €2,317.0 million) and Switzerland
(2016: €471.1 million; 2015: €471.9 million). The non-current assets for 2015 have not been adjusted for non-current assets attributable to ISE.
(restated)
5,100
(restated)
-27,777.6
-26,869.0
Cash and cash equivalents
-29,812.7
-146.9
-29,401.4
-1,579.4
34. 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 programme (see also ☑ note 39) were added to the average
number of shares. In order to calculate the number of potentially dilutive ordinary shares, the exercise
prices were adjusted by the fair value of the services still to be provided.
In order to determine diluted earnings per share, all SBP and Long-term Sustainable Instrument (LSI)
tranches for which cash settlement has not been resolved are assumed to be settled with equity
instruments - regardless of actual accounting in accordance with IFRS 2.
260
Deutsche Börse Group financial report 2016
The following potentially dilutive rights to purchase shares were outstanding as at 31 December 2016:
Calculation of the number of potentially dilutive ordinary shares
Tranche
Adjustment of
the
Exercise price
€
exercise price
according to
IAS 33¹)
€
Average
number of
outstanding
options
Current liabilities from cash deposits by market participants
-11,681.4
-13,840.3
Current liabilities from banking business
31 Dec 2016
€m
27,777.6
1,458.1
31 Dec 2015
€m
26,870.0
711.1
430.2
-42.2
-0.1
283.1
Average price
29,665.8
Reconciliation to cash and cash equivalents
Current receivables and securities from banking business
13,465.5
10,142.9
less loans to banks and customers with an original maturity of more than 3 months
-1,068.1
-931.6
less available-for-sale debt instruments
-592.2
-62.3
27,822.0
for
the period
31 Dec 2016
Number of potentially dilutive ordinary shares
46,157
Weighted average number of shares used to compute diluted earnings per share
186,810,215
25,043
185,022,966
Net income for the period (€m)
1,272.7
665.5
from continued operations (€m)
722.1
184,997,923
613.3
550.6
52.2
Earnings per share (basic) (€)
from continued operations (€)
from discontinued operations (€)
Earnings per share (diluted) (€)
from continued operations (€)
from discontinued operations (€)
6.81
3.60
from non-continued operations (€m)
less bank loans and overdrafts
186,764,058
184,186,855
186,723,986
€
7.95
51,636
74.89
Number of
potentially
dilutive
ordinary shares
31 Dec 2016
2014³)
Total
46,157
Weighted average number of shares outstanding
46,157
2) Volume-weighted average price of Deutsche Börse AG shares on Xetra for the period 1 January to 31 December 2016
3) This relates to share subscription rights within the scope of the long-term sustainability plan for senior executives. The quantity of subscription rights under the
2014 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 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 2016.
Calculation of earnings per share (basic and diluted)
2016
(restated)
2015
Number of shares outstanding as at beginning of period
186,723,986
Number of shares outstanding as at end of period
186,805,015
1) According to IAS 33.47 (a), the issue price and the exercise price for stock options and other share-based payment arrangements must include the fair value of
any goods or services to be supplied to the entity in the future under the stock option or other share-based payment arrangement.
3.87
Net position of financial instruments held by central counterparties
Restricted bank balances
2.7
Subsequent measurement of non-derivative financial instruments
-17.6
-5.1
Gains on the disposal of subsidiaries and equity investments
Miscellaneous
-59.6
0
-0.1
-2.0
Total
-52.3
7.0
Cash flows from investing activities
In the 2016 financial year, cash flows from investing activities amounting to €578.5 million reflected
the disposal of shares in ISE group in particular. This transaction involved a cash inflow of €916.3 mil-
lion (adjusted for €13.0 million in cash disposed). Furthermore, the disposal of the shares in Infobolsa
S.A. resulted in a cash inflow of €1.1 million (adjusted for €7.1 million in cash disposed).
In the previous financial year net cash used for investing activities of €1,592.3 million reflected
acquisitions in particular: The full acquisition of 360T group involved a cash outflow of €676.6 million
(adjusted for €27.7 million in cash acquired). Full consolidation of Powernext SA and EPEX SPOT SE
as at 1 January 2015 increased cash by €40.1 million.
Investments in intangible assets and property, plant and equipment amounted to €164.9 million (2015:
€154.5 million), thereof €12.3 million (2015: €6.7 million) attributable to the discontinued operation.
Among the investments in intangible assets and property, plant and equipment, the measures under-
taken under the strategic growth initiatives and infrastructure projects are classified as expansion invest-
258
Deutsche Börse Group financial report 2016
ments, 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 equipment¹)
31 Dec 2016
2.7
Reversal of the revaluation surplus for cash flow hedges
0.3
4.7
Notes
Other disclosures
Other disclosures
33. 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 €856.6 million (2015: €796.6 million). After adjustment for the
change in CCP positions cash flow from operating activities amounted to €1,621.4 million (2015:
€10.1 million). For details on the adjustments see the ☑“Financial position" section of the combined
management report.
The other non-cash income (or expenses in the previous year) consists (consisted) of the following
items:
Composition of other non-cash income/(expenses)
2016
2015
31 Dec 2015
€m
Impairment of financial instruments
5.0
12.1
Equity method measurement
8.9
-3.2
Reversal of discount and transaction costs from long-term financing
3.7
2.2
Subsequent measurement of derivatives
€m
€m
€m
Expansion investments
30.0
16.9
7.5
84.4
70.2
152.6
147.8
Investments in long-term financial instruments totalling €178.9 million (2015: €815.5 million)
included €155.6 million (2015: €771.5 million) for the purchase of floating-rate notes in the banking
business. In addition, equity investments were acquired or increased in a total amount of €5.4 million
(2015: €29.8 million).
Securities and other non-current receivables in the amount of €149.9 million (2015: €208.3 million)
matured or were sold in the financial year 2016. The disposal of shares in BATS Global Markets Inc.
resulted in a cash inflow of €80.3 million.
Cash flows from financing activities
18.3
Cash outflows from financing activities totalled €848.8 million (2015: cash inflows of €76.1 million).
Moreover, the company placed commercial paper of €400.0 million (2015: €2,100.0 million), and
paid out €495.0 million (2015: €2,065.0 million) due to maturing commercial paper issued.
As part of financing the acquisition of shares in 360T Beteiligungs GmbH, the company placed €200.0 mil-
lion in treasury shares in the 2015 financial year, and also placed debt securities with a nominal amount
of €500.0 million.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Other disclosures
259
The acquisition of the remaining 49.9 per cent stake in STOXX Ltd. led to a cash outflow totalling
€653.8 million. Moreover, €63.7 million was paid to non-controlling shareholders, through dividend
payments and/or purchases of shares in subsidiaries which were already fully consolidated. The
acquisition of the shares in STOXX Ltd. was financed by issuing debt securities with a nominal amount
of €600.0 million.
Deutsche Börse AG paid dividends totalling €420.1 million for the 2015 financial year (dividend for
the 2014 financial year: €386.8 million).
Reconciliation to cash and cash equivalents
Reconciliation to cash and cash equivalents
In the 2016 financial year, Series B and C of the private placements (US$290.0 million) were repaid
early; Series A (US$ 170.0 million) had already matured in the previous year.
Other cash and bank balances
2.1
30.6
Eurex
Xetra
(restated)
Market Data + Services
Replacement investments
Eurex
Xetra
Clearstream
Market Data + Services
Total investments according to segment reporting
10.2
1) Not taking into account discontinued operations
29.3
3.4
4.9
45.3
43.4
5.1
0
68.2
77.6
39.0
14.4
3.31
Clearstream
0.29
-47.0
-37.9
Operating costs
-549.7
-507.4
-102.4
-84.9
-40.3
-177.2
-446.7
-44.4
-169.7
-457.7
Net income from equity investments
35.1
1.6²)
1.6
-3.2
0.2
0.1
Earnings before interest and tax (EBIT)
517.6
381.7
63.8
96.7
-235.8
-254.5
Other operating expenses
-4.9
-209.1
-196.4
Net revenue (total revenue less volume-
related costs)
1,032.2
887.5
164.6
184.8
781.9
746.4
335.4
Staff costs
-214.9
-50.0
-42.1
-229.2
-243.6
Depreciation, amortisation and
impairment losses
-73.5
-56.7
-5.4
-221.7
288.8
Financial result
Earnings before tax (EBT)
2,397
EBIT margin (%)4)
50
43
39
1) The consolidation of internal net revenue column shows the elimination of intra-Group sales revenue and profits.
2) Including revenue in connection with the partial disposal of Direct Edge Holdings, LLC amounting to €38.4 million
3) Excluding goodwill
4) The EBIT margin is calculated as EBIT divided by net revenue.
52
43
39
326
Executive and Supervisory Boards | Management report | Governance | Financial statements
263
Other disclosures
Market Data + Services
Total of all segments
Consolidation of internal net
revenue¹)
Group
זר
2016
€m
(restated)
2015
2.94
Notes
-33.1
323
1,851
-56.4
-48.4
-0.7
-0.6
-4.2
-2.1
461.2
333.3
63.1
96.1
1,651
331.2
Investments in intangible assets and
property, plant and equipment³)
53.4
59.9
13.6
7.0
63.6
73.4
Employees
(as at 31 December)
286.7
-28.8
2,443
-65.8
■ Central counterparty for equities and bonds
■ Admission of securities (listing)
■ Custody and settlement services for domestic and international securities
■ Global securities financing services and collateral management
■ Investment funds and hedge funds services
Distribution of licences for trading and market signals
■ Development and sales of indices (STOXX)
"
Technology and reporting solutions for external customers
"
■ Eurex Bonds OTC trading platform
Trading participant connectivity
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 Eurex to Market Data + Services).
Due to their insignificance to segment reporting, the “financial income" and "financial expense" items
have been combined to produce the “financial result”.
261
262
Deutsche Börse Group financial report 2016
Segment reporting
Eurex
Xetra
Clearstream
(restated)
In accordance with IFRS 8, information on the segments is presented on the basis of internal reporting
(management approach).
(restated)
■ Cash market with the Xetra, Börse Frankfurt and Tradegate trading venues
■ Electronic clearing architecture C7
6.81
-58.6
3.60
3.87
3.31
2.94
0.29
As at 31 December 2016, 66,909 subscription rights were excluded from the calculation of the weighted
average of potentially dilutive shares as these shares do not have a dilutive effect during the financial year
ending on the reporting date.
Executive and Supervisory Boards | Management report | Governance | Financial statements
■ Central counterparty for on- and off-exchange derivatives and repo transactions
Notes
35. Segment reporting
Segment reporting is governed by the internal organisational and reporting structure, which is broken
down by markets into the following four segments:
Segment
Eurex
Xetra
Clearstream
Market Data + Services
Business areas
■ Electronic trading of European derivatives (Eurex Exchange), commodities (EEX group) and foreign
exchange (360T)
■ Eurex Repo over-the-counter (OTC) trading platform
Other disclosures
(restated)
Internal organisational and reporting structure
2015
business
21.4
16.5
0
0
62.6
34.1
Other operating income
26.9
14.9
Net interest income from banking
6.6
3.2
Total revenue
1,098.0
946.1
193.4
217.9
991.0
2016
€m
Volume-related costs
942.8
6.8
901.1
7.6
211.1
2015
€m
2016
€m
€m
925.2
2016
€m
2015
€m
1,049.7
914.7
186.8
211.1
917.0
External sales revenue
0
0
186.8
0
0
8.2
893.2
7.9
914.7
Internal sales revenue
1,049.7
Total sales revenue
Other litigation and liability risks
Total
More than 5 years
1 to 5 years
Up to 1 year
37. Financial liabilities and other risks
For the coming financial years, the Group's expenses in connection with long-term contracts relating to
maintenance contracts and other contracts (without rental and lease agreements, see note 38) are
presented in the following:
The "AA" rating of Clearstream Banking S.A. was confirmed with a stable outlook by the rating agencies
Fitch and Standard & Poor's in October 2016. For further details on the rating of Deutsche Börse Group,
see the "Financial position" section in the combined management report.
In December 2016, Standard & Poor's confirmed Deutsche Börse AG's "AA" credit rating with a negative
outlook. Deutsche Börse AG was one of only two DAX-listed companies that had been given an AA rating
by Standard & Poor's. Deutsche Börse AG's commercial paper programme was awarded the best
possible short-term rating of A-1+.
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 2016,
commercial paper with a nominal value of €349.5 million had been issued (2015: €286.5 million).
31 Dec 2016
€m
Deutsche Börse Group financial report 2016
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 (2015: €95.0 million).
Breakdown of future financial obligations
31 Dec 2015
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 Deutsche Börse Group can reliably estimate the amount of the obligation (see also ☑ note 3). In
order to 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 (as far as have already
taken place) as well as expert reports and evaluations of legal advisors. However, it is also possible
that no reliable estimate for any specific litigation could be determined before the approval of the
consolidated financial statements, and that – as a result – no provisions are recognised.
47.0
Heiser vs Clearstream Banking S.A.
272
Peterson vs Clearstream Banking S.A., Citibank NA et al. (“Peterson I") and
Other disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
-
-
131.6
95.3
9.9
9.1
60.8
39.2
60.9
€m
Furthermore, Eurex Clearing AG holds a credit facility of US$1.7 billion (2015: US$2.1 billion) granted
by Euroclear Bank S.A./N.V. in order to maximise settlement efficiency.
m
For refinancing purposes, Eurex Clearing AG and the Clearstream subgroup can pledge eligible securities
with their respective central banks.
m
Amount at
31 Dec 2015
Amount at
31 Dec 2016
Currency
Purpose of credit line
Company
Contractually agreed credit lines
For the Group, liquidity risk may arise from potential difficulties in renewing maturing financing, such
as commercial paper and 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. Eurex Clearing AG remains
almost perfectly matched with respect to the durations of customer cash margins received and
investments, only a limited amount of which may have tenors of up to one month, while the Clearstream
subgroup may invest customer balances up to a maximum of one year, in secured money market prod-
ucts or in high-quality securities with a remaining maturity of less than ten years, subject to strict moni-
toring of mismatch and interest rate limits (see ☑ note 31 for an overview of the maturity structure).
Term investments can be transacted via reverse repurchase agreements against highly liquid collateral
that can be deposited with the central bank and can be used as a liquidity buffer if required.
Liquidity risk
In financial year 2016, impairment losses amounting to €7.1 million (2015: €5.8 million) were recog-
nised in profit and loss for strategic investments that are not included in the VaR for market risk.
Economic capital is calculated at the end of each month for market risks that can arise in connection
with cash investments or borrowing as a result of fluctuations in interest rates and foreign-exchange
rates as well as through fluctuations of the asset value of the CTAs and the Clearstream Pension Fund in
Luxembourg. On 31 December 2016, the economic capital for market risk was €67.0 million (2015:
€59.0 million).
271
Other disclosures
Notes
In its 2012 corporate report, Deutsche Börse Group informed about proceedings, 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 abandoned.
Deutsche Börse AG
working capital¹)
€
605.0
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.
750.0
750.0
€
working capital¹)
Clearstream Banking S.A.
100.0
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
2016 (2015: 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$2.5 billion (2015: US$2.5 billion).
200.0
settlement
1,170.0
1,170.0
€
settlement
Eurex Clearing AG
605.0
CHF
In July 2013, the US court ordered 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 then by the US Supreme Court on
20 April 2016. Once the process of distribution of funds to the plaintiffs is complete, a related case,
Heiser vs Clearstream Banking S.A., also seeking turnover of the same assets, should be dismissed.
€m
On 30 December 2013, a number of US plaintiffs from the first Peterson case, as well as other US
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
defendants' motions and dismissing the lawsuit. On 6 March 2015, the plaintiffs appealed the decision
to the Second Circuit Court of Appeals, which heard oral arguments in the case on 8 June 2016.
0
0.7
0
0.9
0.6
€m
Executive and Supervisory Boards | Management report | Governance | Financial statements
31 Dec 20152)
31 Dec 2016
More than 5 years
Total
1 to 5 years
Up to 1 year
Expected rental income from subleases")
Operating leases for buildings, some of which are subleased, have a maximum remaining term of six
years. The lease contracts usually terminate automatically when the lease expires. The Group has options
to extend some leases.
In the reporting period, minimum lease payments amounting to €58.5 million (2015: €63.3 million)
were recognised as expenses. No expenses were incurred for subleases or contingent rentals in the
reporting period.
0
1) The expected payments in US dollars were translated into euros applying the closing rate of 31 December.
2) Includes minimum lease payments of International Securities Exchange Holdings, Inc., which was fully consolidated until Q2/2016. For details, see note 2.
0.6
1) The expected payments in US dollars were translated into euros applying the closing rate of 31 December.
In accordance with IFRS 2, the company uses an adjusted Black-Scholes model (Merton model) to
calculate the fair value of the stock options.
Evaluation of the Stock Bonus Plan (SBP) and the Stock Plan
The number of stock options under the Stock Plan is determined by the amount of the individual
performance-based bonus established for each executive board member, divided by the average market
price (Xetra closing price) for Deutsche Börse AG shares in the fourth quarter of the financial year in
question. As the contracts require the stock bonus to be exercised gradually, it is divided into three
separate tranches, which are measured according to their respective residual term using the
corresponding parameters of the SBP for senior executives. This programme expired at the end of
financial year 2013.
On 20 April 2009, the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) published
a circular on remuneration policies in the banking sector that addresses key aspects of remuneration
practices for sustainable corporate governance and supports their implementation in banking institutions'
day-to-day operations. According to this circular, every banking institution is required to introduce a
remuneration policy that is aligned with its business strategy and corporate goals and values, as well
as with the long-term interests of the financial enterprise, its clients and investors, and that minimises
the institution's risk exposure. Clearstream companies in Luxembourg have therefore revised their
remuneration system for executive boards in line with the circular, and introduced a Stock Plan. This
plan stipulates the allocation of a stock bonus at the end of each financial year, which will be paid in
three tranches of equal size with maturities of one, two or three years after the grant date. Claims under
the Stock Plan have to be cash-settled if the performance targets already agreed in the year in which the
targets were specified are met, irrespective of any condition of service.
Stock Plan
For further information on the number of stock options granted to members of the Executive Board, and
the new remuneration system for members of the Executive Board applicable since 1 January 2016,
please also refer to the ☑ remuneration report.
The SBP for members of the Executive Board of Deutsche Börse AG was terminated prematurely on
31 December 2015. Settlement of the stock bonus from the 2013 to 2015 tranches took place in the
first half of 2016; payments made from the 2014 and 2015 tranches are subject to a restriction on
disposal until 31 December 2016 and 31 December 2017, respectively. According to the new
remuneration scheme, members of the Executive Board are obliged to invest the payments made in
Deutsche Börse AG shares, where not restricted by takeover legislation with regard to the intended
business combination with London Stock Exchange Group plc or other legal provisions.
For the stock bonus of senior executives under the 2013 to 2014 tranches, Deutsche Börse AG has an
option to settle a beneficiary's claim in cash or shares. The company resolved a cash settlement for
claims relating to the 2013 tranche due in February 2017. Cash settlement has been agreed upon with
the introduction of the 2015 tranche. A cash settlement obligation has also existed for claims relating to
the Stock Plan for the executive board members of the Clearstream companies since the 2011 tranche.
Deutsche Börse Group financial report 2016
276
275
In the reporting period, the company established an additional tranche of the SBP. In order to participate
in the SBP, a beneficiary must have earned a bonus. The number of stock options for senior executives
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 (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 Bonus Plan (SBP)
39. Share-based payment
2) Includes rental income from subleases of International Securities Exchange Holdings, Inc., which was fully consolidated until Q2/2016. For details, see note 2.
1.6
Peterson vs Clearstream Banking S.A. ("Peterson II")
416.7
155.4
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
depending on the probability of occurence. In a second step, these risks are 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.
Tax risks
In connection with the planned transaction with London Stock Exchange Group, Deutsche Börse AG has
entered into agreements with service providers, in particular relating to consultancy services, that
include fees which only fall due in the event of the transaction being closed successfully. These success-
based fees amount to €70.2 million.
Other liability risks
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.
what extent potential damages exist and if so who would ultimately be responsible. Provisional
insolvency proceedings have meanwhile been opened in respect of the issuer, MBB Clean Energy AG.
Deutsche Börse Group financial report 2016
274
273
A dispute has arisen between MBB Clean Energy AG (MBB), the issuer of a bond eligible in Clearstream
Banking AG, and end investors. 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 dispute relates to the non-
payment of the second tranche of the bond with a nominal value of €500.0 million and the purported
lack of validity of the bond. Clearstream Banking AG's role in the dispute on the purported lack of
validity of the MBB Clean Energy AG bond is primarily to safekeep the global note, deposited by the
paying agent of the issuer, as national central securities depository. At this stage, it is unclear if and to
Dispute between MBB Clean Energy AG and investors
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.
Criminal investigations against Clearstream Banking S.A.
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.
Havlish vs Clearstream Banking S.A. ("Havlish")
38. Leases
353.2
Finance leases
Operating leases (as lessee)
116.7
193.7
176.7
More than 5 years
Total
1 to 5 years
Up to 1 year
67.6
59.8
31 Dec 2015²)
€m
31 Dec 2016
€m
Minimum lease payments from operating leases ¹)
Other disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
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 buildings, IT hardware and software.
There were no minimum lease payments from finance leases for Deutsche Börse Group neither as at
31 December 2016 nor as at 31 December 2015.
Risks from listed securities arise from contractual trust arrangements (CTAs) and from the Clearstream
Pension Fund in Luxembourg. In addition, there are equity price risks arising from strategic equity
investments in other exchange operators.
Other assets
Acquisitions where payment of the purchase price results in material currency risk are generally hedged.
Interest rate risks arise further from debt financing of acquisitions.
0
0
0
50.8
0
Total
135,864.0
140,384.7
111,132.9
119,782.6
1) Presented in the items "restricted bank balances" and "other cash and bank balances"
2) Thereof none repledged to central banks (2015: nil)
3) Thereof none transferred via transfer of title to central banks (2015: €3,114.5 million)
4) Total of fair value of cash (€41.0 million; 2015: €4.3 million) and securities collateral (€4,038.8 million; 2015: €5.266.7 million) received under reverse
repurchase agreements
5) Thereof €1,818.5 million transferred to central banks (2015: €1,863.4 million)
23.3
6) The amount includes collateral totalling €5.0 million (2015: €5.1 million).
65.8
57,172.8¹¹)
16
0.4
6.8
0
1,138.0
1,499.3
0
0
Financial instruments held
by central counterparties
Derivatives
Financial guarantee
contracts)
14
44,228.210)
49,538.610)
63,273.71)
Clearstream
7) 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.
9) Meets the IAS 39 criteria for a financial guarantee contract
In 2015 and 2016, 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
safety mechanisms of the Group's central counterparties are described in detail in the risk report.
The aggregate margin calls based on the executed transactions and clearing fund requirements after
haircuts was €44,228.2 million at the reporting date (2015: €49,538.6 million). In fact, collateral
totalling €57,172.8 million (2015: €63,273.8 million) was deposited.
Composition of collateral held by central counterparties
Cash collateral (cash deposits)")
Securities and book-entry securities collateral²) 3)
Total
1) The amount includes the clearing fund totalling €2,529.3 million (2015: €2,399.7 million).
2) The amount includes the clearing fund totalling €1,714.8 million (2015: €2,160.3 million).
3) The collateral value is determined on the basis of the fair value less a haircut.
Collateral value
at
Collateral value
at
31 Dec 2016
€m
31 Dec 2015
€m
Under the ASLplus securities lending programme, Clearstream Banking S.A. had securities borrow-
ings from various counterparties totalling €44,777.8 million as at 31 December 2016 (2015:
€48,602.8 million). These securities were fully lent to other counterparties. Collateral received by
Clearstream Banking S.A. in connection with these loans amounted to €47,068.1 million (2015:
€50,409.4 million).
8) Off-balance-sheet items
Clearstream also guarantees the risk resulting from the Automated Securities Fails Financing programme
it offers to its customers. This risk is collateralised. Guarantees given under this programme amounted to
€1,403.2 million as at 31 December 2016 (2015: €927.1 million). Collateral received by Clearstream
Banking S.A. in connection with these loans amounted to €1,858.3 million (2015: €868.5 million).
Executive and Supervisory Boards | Management report | Governance | Financial statements
10) Net value of all margin requirements resulting from executed trades at the reporting date as well as clearing 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.
11) Collateral value of cash and securities collateral deposited for margins, covering the net value of all margin and clearing fund requirements
268
Deutsche Börse Group financial report 2016
Cash investments
Deutsche Börse Group is exposed to credit risk in connection with the investment of cash funds.
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 deposits with central banks.
According to the treasury policy, mainly highly liquid financial instruments with a minimum rating of AA-
(Standard & Poor's/Fitch) resp. 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 (Clearstream subgroup, Eurex
Clearing AG and Deutsche Börse AG) was €4,992.7 million (2015: €5,226.7 million). The Clearstream
subgroup and Eurex Clearing AG are entitled to repledge the securities received to their central banks to
regain liquidity.
As at 31 December 2016, Deutsche Börse Group (including the Clearstream subgroup, Eurex Clearing
and Deutsche Börse AG) has not repledged any securities to central banks (2015: €3,114.5 million
repledged by Clearsteam subgroup).
A portion of the available-for-sale fixed-income financial instruments and floating-rate notes held by
Clearstream is transferred via transfer of title to central banks to collateralise the settlement facilities
obtained. The fair value of transferred securities was €1,818.5 million as at 31 December 2016
(2015: €1,863.4 million).
Clearstream receives cash deposits from its customers in various currencies, and places these cash
deposits in money market instruments. If negative interest rates apply to these cash investments, the
interest expense is charged to the respective customers. This recharging policy was initiated in early
2015; at that time, it was limited to deposits in euro whose balances exceeded €7.5 million. It has
now been extended to all currencies bearing a negative interest without any consideration of their
long balances.
Eurex Clearing AG receives cash collateral from its clearing members mainly in its clearing currencies euro
and Swiss francs. Negative interest rates resulting from reinvestments on this cash collateral are passed
on to the clearing members after deducting an additional margin.
Loans for settling securities transactions
Clearstream 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 largely collateralised. Technical overdraft facilities amounted to
€123.8 billion as at 31 December 2016 (2015: €108.6 billion). Of this amount, €3.3 billion (2015:
€3.4 billion) is unsecured, whereby a large proportion relates to credit lines granted to central banks
and other government-backed institutions. Actual outstandings at the end of each business day generally
represent a small fraction of the facilities and amounted to €293.8 million as at 31 December 2016
(2015: €378.8 million); see note 16.
Notes
Other disclosures
Deutsche Börse Group did not issue any bonds in 2016. For an overview on details on all bonds issued
by Deutsche Börse Group see the "Net assets” section in the combined management report.
Margin requirements
0
26,861.3
27,772.0
29,400.8
267
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Other disclosures
Balance brought forward
Carrying amounts -
maximum risk exposure
Amount at
31 Dec 2015
€m
Segment
Note
Amount at
31 Dec 2016
€m
90,432.0
89,272.7
36,412.5
Collateral
57,172.8
Other receivables
Currency risks in the Group arise mainly from operating income and expenses denominated in US
dollars, plus that portion of Clearstream's sales revenue and net interest income from banking business
(less expenses) that is directly or indirectly generated in US dollars. The Clearstream segment generated
10 per cent of its sales revenue and net interest income (2015: 10 per cent) directly or indirectly in
US dollars.
In addition, 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 De-
cember 2016, there were no significant net foreign-exchange positions.
On an intraperiod basis, the risk exposure described above is monitored against the latest EBIT forecast.
As part of the annual planning, Deutsche Börse Group's treasury policy requires any net earnings
exposure from currencies to be hedged using forward foreign-exchange transactions if the unhedged
exposure of an individual currency exceeds 10 per cent of consolidated EBIT. Foreign-exchange
exposures below 10 per cent of consolidated EBIT may also be hedged.
Market risk
Deutsche Börse Group also applies additional methods in order to detect credit concentration risks. In
2016, no significant credit concentrations were assessed.
The required economic capital (VaR with a 99.98 per cent confidence level) for credit risk is calculated
for each business day and amounted to €407.0 million as at 31 December 2016 (2015: €409.0
million).
The regulatory requirements on concentration risks and so-called large exposures, such as those arising
from articles 387-410 of regulation (EU) 575/2013 (Capital Requirements Regulation, CRR) and article
47 paragraph 8 of regulation (EU) 648/2012 (European Market Infrastructure Regulation, EMIR), are
complied with. See also note 20 for an explanation of regulatory capital requirements.
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.
Credit risk concentrations
Deutsche Börse Group financial report 2016
270
269
In contrast to the risk-oriented net analysis of the transactions via the central counterparties, the gross
amounts are reported in the balance sheet, as the offsetting rules defined in IAS 32 cannot be met. For
a detailed explanation of this balance sheet item, see “Financial instruments held by central counter-
parties" section in note 3 or ☑note 15. For an analysis of the carrying amount, see note 15.
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. As a result of
default by customers, receivables of €2.1 million (2015: €3.1 million) relating to fees for trading and
provision of data and IT services are not expected to be collectible.
63,273.8
0
Amount at
31 Dec 2016
€m
Amount at
554.1
0
0
Receivables from related
Group
parties
2.0
4.7
0
0
Interest receivables
Clearstream
16
15.2
1.2
669.8
53,960.1
Group
0
31 Dec 2015
€m
56,508.9
Other receivables
Other loans
Group
0.4
0.2
0
0
Group
32
450.2
932.3
0
Trade receivables
0
Executive and Supervisory Boards | Management report | Governance | Financial statements
0
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.I., 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. 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.I. ECC Luxembourg paid €14.0 thousand for these management services during the
2016 financial year.
Moreover, a member of the Supervisory Board of STOXX Ltd., Zurich, 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 €1,174.4 thousand in the 2016 financial year.
On the Board of Directors of European Energy Exchange AG's subsidiary Powernext SA, Paris, France,
representatives of Powernext SA's other shareholders hold key positions. These shareholder representa-
tives also hold key positions in Powernext SA's shareholder companies, i.e. GRTgaz, Bois-Colombes,
France (parent company of 3GRT, Tarascon, France), and EDEV S.A., Courbevoie, France. During the
2016 financial year, Powernext 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. The company generated €936.7 thousand in revenue with these
services during the 2016 financial year.
The Board of Directors and the Executive Board, of LuxCSD S.A., an associate from Deutsche Börse
Groups' perspective, each comprise two members of management of fully consolidated subsidiaries
who are maintaining a key position within these subsidiaries of Deutsche Börse Group, too. There have
been business transactions with Clearstream Banking S.A., Clearstream Services S.A., Clearstream
International S.A. and Clearstream Banking AG to LuxCSD. Overall, revenue of €623.0 thousand as well
as expenses of €1,609.6 thousand were recognised for such contracts during the 2016 financial year.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Other disclosures
Furthermore, an Executive Board member of Clearstream Banking AG concurrently holds an executive
position within Deutsche Börse Commodities GmbH, an associate of Deutsche Börse Group. During the
2016 financial year, Deutsche Börse Group realised revenue of €2,057.3 thousand and incurred
expenses of €8,890.6 thousand based on the business relationship with Deutsche Börse Commodities
GmbH.
One member of Eurex Frankfurt AG's Executive Board was, until February 2016, the Chief Executive
Officer of ZDB Cloud Exchange GmbH, and Zimory GmbH, both associates of Deutsche Börse Group.
During the 2016 financial year, Deutsche Börse Group realised revenue of €375.5 thousand and
expenses of €1.8 thousand based on the business relationship with ZDB Cloud Exchange GmbH.
Two Executive Board members of Deutsche Börse AG are members of the Supervisory Board of China
Europe International AG (CEINEX), a joint venture of Shanghai Stock Exchange Ltd., the China Financial
Futures Exchange and Deutsche Börse AG. During the 2016 financial year, Deutsche Börse Group
realised revenue of €456.9 thousand and incurred expenses of €6.0 thousand based on the business
relationship with CEINEX.
Other business relationships with key management personnel
Selected executives of Deutsche Börse Group subsidiaries also hold a key management position within
the Clearstream Pension Fund ("association d'épargne pension", ASSEP). This defined benefit plan,
established in favour of Luxembourg staff of Clearstream International S.A., Clearstream Banking S.A., as
well as Clearstream Services S.A., is funded through cash payments to an ASSEP under Luxembourg law.
43. Employees
Employees
Average number of employees during the year
Monetary business relationships with key management personnel
1) Two companies formerly categorised as associated companies were retroactively reclassified as other shareholdings.
2) Thereof €-0.4 million arising from two companies formerly categorised as associated companies which were retroactively reclassified as other shareholdings
-1.8
-3.6
Other shareholdings
0.5
3.1")
-1.0
- 1.62)
0
0
Employed at the reporting date
-1.2
transactions
13.5
14.2
-13.3
-10.7
2.5
4.7
Total sum of business
0
Employees (average annual FTEs)
2015
31 Dec 2015
Balance at
Change in number of CPIP and PSP stock options allocated
Deutsche Börse Group financial report 2016
282
281
Provisions for the CPIP and the PSP amounting to €5.1 million were recognised at the reporting date of
31 December 2016 (31 December 2015: €1.1 million). Of the provisions, €4.6 million were attribu-
table to members of the Executive Board (2015: €1.1 million). The total expense for CPIP and PSP
stock options in the reporting period was €4.0 million (2015: €1.1 million). Of that amount, an expense
of €3.5 million was attributable to members of the Executive Board active at the reporting date (2015:
€1.1 million).
5.1
0
16.7
1.3
0
6.4
76.41
76.42
Deutsche Börse AG's Executive Board approved the consolidated financial statements for submission to
the Supervisory Board on 7 March 2017. The Supervisory Board is responsible for examining the con-
solidated financial statements and stating whether it endorses them.
45. Date of approval for publication
On 3 March 2017, the Executive Board of Deutsche Börse AG communicated that its indirectly held
subsidiary European Energy Exchange AG has reached an agreement in principle with the shareholders
of Nodal Exchange Holdings, LLC on the purchase of all shares in Nodal Exchange Holdings, LLC. The
total purchase price for all shares amounts to a low nine-digit sum (in US dollars). The execution of
binding agreements is intended to take place shortly. The closing of the acquisition is still subject to
customary conditions such as required regulatory approvals.
On 2 March 2017, Deutsche Börse Group announced that it had completed the divestiture of its
remaining shareholding in BATS Global Markets, Inc. (BATS). After receiving a cash and share consid-
eration as part of the acquisition of BATS by Chicago Board Options Exchange, Inc. (CBOE), the CBOE
shares were sold in the market. Deutsche Börse AG expects a positive impact on its net profit for the
period attributable to Deutsche Börse AG shareholders of around €68 million in the first quarter of
2017. In Q4/2016, Deutsche Börse already realised a net profit contribution of around €23 million
by selling one third of its stake in BATS. This stake resulted from a participation of the divested
International Securities Exchange Holdings, Inc. (ISE) in Direct Edge Holdings, LLC, which later
merged with BATS.
5,095
4,760
5,176
5,100
4,731
4,460
Of the average number of employees during the year, 29 (2015: 25) were classified as Managing
Directors (excluding Executive Board members), 348 (2015: 358) as senior executives and 4,718
(2015: 4,377) as employees.
2016
There was an average of 4,731 full-time equivalent (FTE) employees during the year (2015: 4,460).
Please refer also to the “Employees" section in the combined management report.
286
Deutsche Börse Group financial report 2016
44. Events after the end of the reporting period
On 1 February 2017, Deutsche Börse AG announced that the Public Prosecutor's Office of Frankfurt am
Main investigated at Deutsche Börse AG in respect of a share purchase by its Chief Executive Officer
which was carried out on 14 December 2015 in implementation of the Executive Board's remuneration
programme as approved by the Supervisory Board of Deutsche Börse AG. Such programme provides for
an investment of the Executive Board members in shares of Deutsche Börse AG. Deutsche Börse AG and
the Chief Executive Officer fully cooperate with the public prosecutor.
On 6 February 2017, the relevant bodies of Deutsche Börse AG and London Stock Exchange Group plc
(LSEG) decided to formally submit the divestment of LCH.Clearnet SA by LCH.Clearnet Group Limited as
a remedy to the European Commission in order to address anti-trust concerns raised by the European
Commission in relation to the business combination of both companies.
Following the market test in relation to the remedy proposal of 6 February 2017, the European Com-
mission has raised new concerns regarding the viability of LCH SA as a divestment business in relation
to access to bond and repo trading feeds currently provided for by MTS S.p.A., an Italian regulated
electronic trading platform. The European Commission has therefore required that Deutsche Börse AG
and LSEG commit to the divestment of LSEG's majority stake in MTS S.p.A. to secure merger clearance.
LSEG has resolved to not commit to the required divestment of LSEG's majority stake in MTS S.p.A.
The parties will await the further assessment by the European Commission and currently expect a
decision by the European Commission on the business combination of Deutsche Börse AG and LSEG no
later than 3 April 2017.
285
76.42
0
0
During the 2016 financial year, expenses of €2.7 million (2015: €1.1 million) were recognised in
connection with the Co-Performance Investment Plan (CPIP). In addition, expenses of €0.8 million were
recognised in connection with the Performance Share Plan (PSP) during the year under review.
The actuarial present value of the pension obligations to Executive Board members was €21.5 million as
at 31 December 2016 (2015: €18.0 million). Expenses of €2.8 million (2015: €2.1 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 €4.5 million in 2016 (2015: €2.3 million). The actuarial present value of the pension obligations
was €74.2 million as at 31 December 2016 (2015: €71.8 million).
Supervisory Board
The aggregate remuneration paid to members of the Supervisory Board in financial year 2016 was €1.8
million (2015: €2.0 million).
In financial year 2016, the employee representatives on Deutsche Börse AG's Supervisory Board
received salaries (excluding Supervisory Board remuneration) amounting to €0.5 million (2015: €0.7
million). The total consists of the respective total gross amounts for those employee representatives who
drew salaries from Deutsche Börse AG in the year under review.
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 2016 financial year. All transactions were
concluded at prevailing market terms.
283
284
Deutsche Börse Group financial report 2016
Transactions with related entities
Amount of the
In 2016, the fixed and variable remuneration of the members of the Executive Board, including non-
cash benefits, amounted to a total of €20.4 million (2015: €15.3 million; figure includes members who
have since retired from the Executive Board).
Executive Board
The remuneration of the individual members of the Executive and Supervisory Boards is presented in the
"Remuneration report" in the combined management report.
Other disclosures
84,177
0
0
218,706
For further information on the number of stock options granted to Executive Board members, and on the
remuneration system for Executive Board members introduced on 1 January 2016, 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 2016 GSP tranche, eligible employees were able to buy up to 100 shares of the
company. The purchased shares must be held for at least two years.
transactions revenues
In the reporting period, an expense totalling €2.6 million (2015: €1.8 million) was recognised in staff
expense for the Group Share Plan.
The members of the company's executive bodies are listed in the “The Executive Board” and “The
Supervisory Board" chapters of this financial report.
41. Corporate governance
On 8 December 2016, 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 in the combined management report).
42. 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.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
40. Executive bodies
0
Amount of the
Outstanding balances
2015
€m
Associates
13.0
10.9
-12.3
-9.1
2.5
4.7
-3.6
-0.6
Joint ventures
0
0.2
0
0
€m
€m
€m
€m
receivables
Outstanding balances
liabilities
31 Dec
31 Dec
31 Dec
31 Dec
transactions expenses
2016
€m
2016
2015
2016
2015
2016
€m
€m
2015
41,465
84,177
218,706
3.8
2.0
13.3
182,978
Total
7.7
0
7.8
66.72-74.37
76.42
76.42
108,971"
2016
2.1
1.4
3.6
11.1
1) As part of the grant dates for the 2014, 2015 and 2016 tranches are in future financial years, the number indicated at the reporting date may change
subsequently.
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 €13.1 million were recognised as at 31 December 2016 (31 December
2015: €7.2 million). The total expense for LSI stock options in the reporting period amounted to €7.6
million (31 December 2015: €4.6 million).
93,742
93,742
669¹)
669
Total
To other senior
executives
Balance at
31 Dec 2016
Options
forfeited
Fully settled
cash options
68.56 -75.03
Additions
Tranche 2016
Additions/
(disposals)
Tranche 2014
31 Dec 2015
Balance at
Change in number of LSI and RSU stock options allocated
Deutsche Börse Group financial report 2016
280
279
Additions/
(disposals)
Tranche 2015
1) As part of the grant dates for the 2014, 2015 and 2016 tranches are in future financial years, the number indicated at the reporting date may change
subsequently.
76.42
49,109¹)
Settlement
Fair value/
option as at
31 Dec 2016
option as at
31 Dec 2016
31 Dec 2016
Intrinsic value/
Deutsche
Börse AG share
price as at
Balance as at
31 Dec 2016
Tranche
Valuation of LSI and RSU stock options
The valuation model does not take into account exercise hurdles. The volatilities applied correspond to
the market volatilities of comparable options with comparable maturities.
0
2.75
2.75
0
-0.84 to 0
O to 26.2
31 Mar 2017
-31 Mar 2020
Current
provision as at
Non-current
provision as at
obligation
31 Dec 2016
2015
0.6
1.9
70.44 -75.03
76.42
76.42
24,898¹)
76.42
2014
€m
€m
€
€
€
Number
31 Dec 2016
€m
2016
Total
1,564¹)
1,564
21,968
21,968
Settlement
Fair value/
option as at
Intrinsic value/
option as at
31 Dec 2016
31 Dec 2016
price as at
Balance as at
31 Dec 2016
Tranche
Deutsche
Börse AG share
Valuation of CPIP and PSP stock options
The valuation model does not take into account exercise hurdles. The volatilities applied correspond to
the market volatilities of comparable options with comparable maturities.
155.00
190.00
%
Increase in net profit for the period attributable to Deutsche Börse AG shareholders
235.00
Current
provision as at
Non-current
provision as at
31 Dec 2016
obligation
0
10.3
76.41
76.42
76.42
134,529
2015
50.00
€m
€m
€
€
€
Number
31 Dec 2016
31 Dec 2016
€m
108,971¹
108,971
%
0
Valuation parameters for CPIP and PSP stock options
Evaluation of the Co-Performance Investment Plan (CPIP) and the Performance Share Plan (PSP)
In accordance with IFRS 2, the company uses an adjusted Black-Scholes model (Merton model) to
calculate the fair value of the CPIP and PSP stock options.
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.
Other disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
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
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.
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.
On 1 January 2016, the Group launched its new share-based remuneration programme, the Perfor-
mance 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.
In the 2015 financial year, a new remuneration programme (Co-Performance Investment Plan, CPIP)
was introduced, and the CEO 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 Decem-
ber 2019. The shares are subject to a performance period of five years and a holding period until
31 December 2019. The subsequent payment of the stock bonus will be settled in cash, by 31 March
2021.
Co-Performance Investment Plan (CPIP) and Performance Share Plan (PSP)
182,978
0
182,978
0
Tranche 2016
Tranche 2015
Term to
Risk-free interest rate
0
€
Exercise price
0
0
%
Dividend yield
Relative total shareholder return
23.88
%
Volatility of Deutsche Börse AG shares
-0.76
-0.65
%
31 Dec 2019
31 Dec 2020
23.02
93,064
1.3
28,501
€
2012
2013
2014
2015
78.94
79.70
61.38
79.75
39.47
79.86
25.79
The stock options from the 2012 SBP tranche were exercised in the reporting period following expiration
of the vesting period. Shares of the SBP tranches 2013, 2014 and 2015 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 vesting
period.
278
Average price of the
forfeited stock options
Deutsche Börse Group financial report 2016
stock options
€
exercised
25,931"
76.42
76.42
69.96
1.8
0
0.4
Total
132,186
9.8
5.3
2.0
1) Given that the 2016 tranche stock options for senior executives will not be granted until 2017, the number of shares applicable as at the reporting date may be
adjusted subsequently.
Average price of the exercised and forfeited stock options
Average price of the
Tranche
Provisions for the SBP and the Stock Plan amounting to €7.3 million were recognised at the reporting
date of 31 December 2016 (31 December 2015: €22.7 million). Of these provisions, none were
attributable to members of the Executive Board (2015: €16.7 million). The total expense for the stock
options in the reporting period was €2.3 million (2015: €4.5 million). Of that amount, no expense was
attributable to members of the Executive Board active at the reporting date (2015: €14.9 million). The
provisions recognised in the previous year included provisions for the Co-Performance Investment Plan
(CPIP), see section “Co-Performance Investment Plan (CPIP)".
Change in number of SBP stock options allocated
Balance at
31 Dec
0
0
209,944
0
0
To other senior executives
117,592²)
0
1,042
25,931
11,622
757
132,186
Total
327,536
0
0
209,944¹
To the Executive Board
Additions/
(disposals)
Additions/
(disposals)
Additions/
(disposals)
Additions
2015
Tranche
2013
2016
Tranche
2014
2015
Tranche
2016
Fully
settled
cash
options
Balance at
Options
forfeited
31 Dec
2016
Tranche
0.6
0
1.2
Dividend yield
%
Exercise price
€
2.75
0
2.75
2.75
O to 18.15
2.75
0
0
0
1) The SBP 2013 tranche also includes SBP options of the Stock Plan for the executive board members of the Luxembourg companies.
The valuation model does not take into account exercise hurdles. The volatilities applied correspond
to the market volatilities of comparable options with comparable maturities.
Balance at
Valuation of SBP stock options
-0.92
31 Dec 2016 to
31 Jan 2017
Tranche 2013")
31 Dec 2016 to
31 Mar 2018
-0.92 to 0.80
0 to 26.23
Notes
Other disclosures
277
Valuation parameters for SBP stock options
Tranche 2016
Tranche 2015
Tranche 2014
Deutsche
Börse AG share
price at
Term to
Risk-free interest rate
%
-0.65
Volatility of Deutsche Börse AG shares
%
23.71
31 Mar 2019
-0.76
25.49
31 Mar 2020
0
Intrinsic value/
option at
31 Dec 2016
5.3
0
2014
19,521
76.42
76.42
73.86-76.98
1.4
0
1.0
2015
16,082
76.42
76.42
71.89
5.4
76.24-76.98
76.42
76.42
31 Dec 2016
31 Dec 2016
Number
€
€
Fair value/
option at
31 Dec 2016
€
Settlement
obligation
Tranche
Current
provision at
31 Dec 2016
provision at
31 Dec 2016
€m
€m
€m
2013
70,652
Non-current
0
0
25,931
€
23.02 to 26.20
2.75
0
Tranche 2015
31 Mar 2017
-31 Mar 2021
-0.84 to 0
0 to 26.2
Tranche 2014
0
To other senior executives
190,205
0
0
55,676
%
Total
forfeited
cash options
Balance at
Options
Fully settled
Additions
Tranche 2016
Additions/
(disposals)
Tranche 2015
41,465
93,064
To the Executive Board
1,042
31 Dec 2016
%
28,501
31 Mar 2018
-31 Mar 2022
In accordance with IFRS 2, the company uses an adjusted Black-Scholes model (Merton model) to
calculate the fair value of the LSI and RSU stock options.
Evaluation of the LSI and the RSU
tranche. Payment of each tranche is made after a vesting period of one year. The remuneration system
does not stipulate any condition of service. Following the expiry of the vesting period, both the LSI and
the RSU shares are measured on the basis of the average closing price of Deutsche Börse AG shares in
the last month preceding the end of the vesting period. Settlement is generally made in cash, although
the employer has the right to settle by delivering Deutsche Börse AG shares for the 2014 tranche.
Other disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
The number of LSI and RSU shares 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. This results in individual LSI tranches for the LSI bonus, which have
maturities of between one and up to five years. The RSU bonus is used as a basis for a further four-year
The LSI remuneration model requires at least half of a part of the variable remuneration to be settled
in cash and half in 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).
Deutsche Börse Group introduced another share-based payment programme effective 1 January 2014.
The programme meets the provisions for remuneration systems according to the supervisory require-
ments for the remuneration systems of institutions laid down in the Institutsvergütungsverordnung
(InstitutsVergV, German Remuneration Regulation for Institutions), effective 16 December 2013, and
the Kreditwesengesetz (German Banking Act), through which the provisions of Directive 2013/36/EU
of the European Parliament and of the Council of 26 June 2013, in particular, were transposed into
German law. The aim of the InstitutsVergV is to align the corporate goals even more closely with
remuneration, especially in the banking sector, and thus to ensure the company's success is more
sustainable. In the year under review, the company launched another LSI tranche and expanded its
share-based payment programme by adding an RSU tranche. Accordingly, the disclosures for the 2014
and 2015 tranches include the information for the LSI stock options, and the 2016 tranche includes the
disclosures for the stock options under LSI and RSU.
Long-term Sustainable Instrument (LSI) and Restricted Stock Units (RSU)
% -0.84 to -0.51
1) Including Executive Board stock options from the 2014 and 2015 SBP tranches, which expired as at 31 December 2015. For further information on stock options
from the Co-Performance Investment Plan (CPIP), please refer to section "Co-Performance Investment Plan (CPIP)".
132,186
757
221,566
Valuation parameters for LSI and RSU stock options
Term to
2) Given that the 2016 SBP tranche stock options for senior executives will not be granted until 2017, the number of shares applicable as at the reporting date may
be adjusted subsequently.
Tranche 2016
Exercise price
Dividend yield
Volatility of Deutsche Börse AG shares
Risk-free interest rate
Eurex Global Derivatives AG
100%
Pte. Ltd.
100%
China Europe International
Exchange AG
Clearstream Banking
Japan, Ltd.
100%
Deutsche Börse Photography
Foundation gGmbH
100%
IT & Operations,
40%
Clearstream
REGIS-TR S.A.
50%
Eurex Zürich AG
50%, 50%²)
European Energy
Exchange AG
63%
Cleartrade Exchange
Pte. Limited
100%
European Commodity
Clearing AG
100%
Powernext SA
88%
EPEX SPOT SE
11%, 40%³)
DB1 Ventures GmbH
100%
Clearstream Banking S.A.
100%
Eurex Bonds GmbH
79%
100%
International S.A.
100%
Cash Market
Development
& Op. Management
Core Markets
Development
Data & New Asset Classes
A. Preuss
Eurex Repo GmbH
100%
Börse Frankfurt
Zertifikate AG
100%
Eurex Clearing AG
100%
Services s.r.o
100%
Deutsche Börse
Clearstream Holding AG
100%
360 Treasury Systems AG
100%
Eurex Exchange Asia
100%
Deutsche Börse AG operates the cash market at Frankfurter Wertpapierbörse (FWBⓇ, the Frankfurt Stock
Exchange) with its fully electronic XetraⓇ trading platform. It also offers trading in structured products
(certificates and warrants) in Germany via Börse Frankfurt Zertifikate AG. In addition, Deutsche Börse AG
operates the Eurex Exchange derivatives market via Eurex Frankfurt AG and Eurex Zürich AG. Com-
modities spot and derivatives markets are operated by the Group's indirect subsidiary European Energy
Exchange AG (EEX). Deutsche Börse AG operates a foreign-exchange trading platform via its subsidiary
360 Treasury Systems AG (360T). The Group also offers clearing services for the cash and derivatives
markets (Eurex Clearing AG). Furthermore, Deutsche Börse sells price and reference data as well as other
trading information; its STOXX Ltd. subsidiary develops and sells indices. All post-trade services that
Deutsche Börse Group provides for securities are handled by Clearstream Holding AG and its subsidiaries
(Clearstream Holding group). These include transaction settlement, the administration and custody of
securities, as well as services for global securities financing, investment funds and hedge funds. Deutsche
Börse AG and Clearstream Services S.A. develop and operate Deutsche Börse Group's technological
infrastructure.
Deutsche Börse AG ¹)
Equity investments and partnerships strengthen product and service offering
The "Equity investments and partnerships strengthen product and service offering" chart gives an over-
view of Deutsche Börse Group's main shareholdings; its basis of consolidation is presented in full in
note 2 to the consolidated financial statements. Material changes in the reporting period include the
sale of US futures and options exchange International Securities Exchange Holdings, Inc. (ISE), effective
30 June 2016; details can be found in the “Changes to the basis of consolidation and to segment
reporting" section.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
Impendium Systems Ltd
100%
Eurex Clearing Asia
Pte. Ltd.
Clearstream Banking AG
100%
STOXX Ltd.
100%
Deutsche Boerse Asia
Holding Pte. Ltd.
100%
Eurex Frankfurt AG
Börse Frankfurt Zertifikate
Holding S.A. in liquidation
100%
2) Direct equity interest Deutsche Börse AG: 50%, direct equity interest Eurex Global Derivatives AG: 50%
BrainTrade Gesellschaft
für Börsensysteme mbH
14%, 14%6)
Organisational structure
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
■ Trading participant connectivity
■ Technology and reporting solutions for external customers
■ Development and sales of indices (STOXX)
■Distribution of licences for trading and market signals
At the start of 2016, Deutsche Börse AG realigned the assignment of responsibilities within its Executive
Board in order to place client focus at the heart of its organisational structure. The Clients, Products & Core
Markets division combines Deutsche Börse Group's derivatives trading businesses, its clearing house as
well as Clearstream's settlement and custody business. Clients, Products & Core Markets is responsible
for coordinating Group-wide product development as well as global sales activities. The IT & Operations,
Data & New Asset Classes division combines Deutsche Börse Group's IT activities and market operations.
Technological transformation and digitisation are key issues which are advanced by this division - in close
coordination with the Chief Executive Officer (CEO). Some of Deutsche Börse Group's fastest growing
business areas, such as the market data business, the electronic foreign-exchange trading platform 360T®,
as well as EEX group also belong to this division. Deutsche Börse Group's cash market businesses - com-
prising Xetra, the Frankfurt Stock Exchange, and the certificates and warrants business - form part of the
Cash Market, Pre-IPO & Growth Financing division. The division is also responsible for the build-up of
a pre-IPO market, as well as for developing and establishing tools for growth financing. The portfolio of
the Chief Financial Officer (CFO) includes risk management and compliance. The responsibilities of the CEO
■ Investment funds and hedge funds services
■ Admission of securities (listing)
■ Central counterparty for equities and bonds
■ Eurex BondsⓇ OTC trading platform
■ Cash market with the Xetra®, Börse Frankfurt and Tradegate trading venues
■ Central counterparty for on- and off-exchange derivatives and repo transactions
■ C7Ⓡ electronic clearing architecture
■ Global securities financing services and collateral management
■ Eurex RepoⓇ over-the-counter (OTC) trading platform
Deutsche Börse Group's management structure as at 1 January 2017
Group Communi-
cations, Marketing
& Reg. Strategy
-
Cash Market, Pre-IPO
& Growth Financing
H. Stars
& Core Markets
J. Tessler
G. Pottmeyer
CFO
Group Executive Board
Clients, Products
& Controlling
Financial
Accounting
& Acquisitions
Group Strategy/
Mergers
C. Kengeter
CEO
Chief Compliance
Officer
■ Electronic trading of European derivatives (Eurex Exchange), commodities (EEX group) and foreign
exchange (360T®)
Business areas
Market Data + Services
1) Simplified presentation of main shareholdings (rounded values), as at 1 January 2017
50%, (15%)4)
Cloud Exchange GmbH
ZDB
Systems, Inc.
100%
16%
3) Direct equity interest European Energy Exchange AG: 11%, direct equity interest Powernext SA: 40%
Deutsche Boerse
Clearstream Services S.A.
100%
Prague s.r.o
100%
Clearstream Operations
Securities Services Limited
100%
Clearstream Global
Deutsche Börse
Commodities GmbH
LuxCSD S.A.
50%
4) Direct equity interest Deutsche Börse AG: 50%, equity interest of 15%, which is held indirectly via Zimory GmbH
5) Direct equity interest Deutsche Börse AG: 75%, equity interest of 5%, which is held indirectly via Tradegate AG Wertpapierhandelsbank
6) Direct equity interest Deutsche Börse AG: 14%, direct equity interest Börse Frankfurt Zertifikate AG: 14%
Clearstream
Xetra
Eurex
Reporting segment
Deutsche Börse Group's reporting segments
Deutsche Börse Group classifies its business into four segments: Eurex, Xetra, Clearstream and Market
Data Services. This structure serves as a basis for the Group's internal management and for financial
reporting (see the table entitled “Deutsche Börse Group's reporting segments" for details).
Reporting segments
The Executive Board manages the company at its own responsibility; the Chief Executive Officer
coordinates the activities of the Executive Board members. In financial year 2016, the Executive Board
of Deutsche Börse AG had five members. The remuneration system and the remuneration paid to the
individual members of the Executive Board are described in detail in the ☑ remuneration report.
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
prepared 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. The Supervisory Board of Deutsche Börse AG has twelve members: eight shareholder representa-
tives and four employee representatives.
The Annual General Meeting resolves 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 resolves on corporate actions and other matters governed by
the Aktiengesetz (AktG, German Stock Corporation Act).
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.
Management
Deutsche Börse Group financial report 2016
20
19
Tradegate Exchange GmbH
75%, (5%)5)
Deutsche Börse AG, which is headquartered in Frankfurt/Main, Germany, is the parent company of
Deutsche Börse Group. As at 31 December 2016, the Group employed 5,176 people at 37 locations in
29 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 trans-
actions value chain – from equities and derivatives trading through transaction clearing and settlement,
securities custody, services for liquidity and collateral management, and the provision of market infor-
mation, down to the development and operation of IT systems that support all these processes.
■ Custody and settlement services for domestic and international securities
Overview of Deutsche Börse Group
In order to maintain its leading position among exchange organisations and to grow further, Deutsche
Börse Group launched its Group-wide "Accelerate" programme in 2015, with the following objectives:
to actively participate in global competition among capital markets infrastructure providers - in an agile,
ambitious and effective manner with a strong client focus - and to turn Deutsche Börse into the global
market infrastructure provider of choice, being top-ranked in all its activities. In order to achieve this
strategic objective, Deutsche Börse has launched a broad range of initiatives, and triggered a cultural
change throughout the company.
The efficiency of this business model can be seen from the fact that Deutsche Börse Group has generated
strong cash flows from operating activities for many years and that it is one of the most cost-effective
providers of trading, clearing and settlement services among comparable products.
■ organising an impartial marketplace to ensure orderly, supervised trading with fair price formation,
plus providing risk management services
developing and operating proprietary electronic systems for all processes along the value chain
■ providing these services for different asset classes such as equities, bonds, funds, commodities,
FX products, fixed-income products and derivatives on these underlyings
■ integrating different financial market services such as trading, clearing, settlement, securities custody,
liquidity and collateral management, as well as index and market data services
Deutsche Börse's business success is founded on its business model: its broadly diversified product
and service range covers the entire value chain for financial market transactions. The business model
aims to offer customers reliable services in an efficient and cost effective manner, based on the follow-
ing key principles:
Deutsche Börse Group is one of the largest market infrastructure providers worldwide. The Group's
business model enhances the capital markets' stability, efficiency and integrity. Issuers benefit from the
low capital 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.
In the context of its "Accelerate" growth strategy, Deutsche Börse Group has implemented far-reaching
organisational changes and defined its financial targets. As part of that, the company is constantly assess-
ing its future competitive positioning, profitability, innovative strength, and strategic benefits of all its
shareholdings and own activities. Deutsche Börse pursues the goal of becoming the number one or number
two player in every business area the company operates in - a goal that requires active management of
the business portfolio. In areas where Deutsche Börse is not able to meet this goal, it evaluates other
options. As part of its ongoing review of capital allocation, the Group disposed of various investments
during the year under review, including Infobolsa, Market News International and the International Securities
Exchange. Moreover, it sold a partial shareholding in BATS Global Markets, Inc.
Deutsche Börse Group's objectives and strategies
include Group Strategy and Human Resources, as well as innovation; moreover, he provides strategic
impetus in the areas of technological transformation and digitisation. The current organisational set-up
is shown in the “Deutsche Börse Group's management structure as at 1 January 2017" chart.
Deutsche Börse Group financial report 2016
22
21
+ Services
Officer
Settlement IT
Market Data
Objectives and strategies
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
Thanks to a Group-wide approach in marketing, innovation and operations, the Group will be better
positioned to serve changing client needs and to gradually exploit untapped sales potential. A cross-
divisional Group Management Committee was established, and responsibilities on the Executive Board
realigned, in order to promote the Group's new direction and to intensify collaboration. Besides, the new
remuneration system for the Executive Board and executive staff, which was introduced during the year
under review, has created stronger incentives for growth in the individual divisions. Likewise, the Group
has conducted an in-depth review of its organic growth initiatives, and re-prioritised where appropriate.
In this context, the Group pursues an accelerated expansion into new markets and asset classes. Within
the scope of various initiatives, it aims for a markedly higher degree of innovation (please refer to the
report on opportunities). As far as external growth opportunities are concerned, on the one hand the
focus is on strengthening existing high-growth areas, and on exploring new asset classes and services.
Deutsche Börse Group has a scalable business model, which permits higher business volumes at rela-
tively minor additional costs. With a strong business performance and organic or external growth, this
means that income growth will exceed cost increases. To reinforce the scalability of its business model,
the Group has introduced clearly defined profit growth targets. Accordingly, it anticipates net revenue
increases of between 5 and 10 per cent annually, based on its current business portfolio and assuming
a continued recovery of the world economy as well as medium-term interest rate rises. The Group is
targeting 10 per cent to 15 per cent increases in earnings before interest and taxes (EBIT) and consolidated
net profit for the period attributable to Deutsche Börse AG shareholders.
At the time of writing this report, the approval process for this project is ongoing. Numerous authorities
must approve the planned merger, including the European Commission, and the Ministry of Economics,
Transportation and Regional Development of the State of Hesse.
Overall, approximately 89 per cent of Deutsche Börse AG's shareholders accepted the offer up until
12 August 2016, exchanging their Deutsche Börse shares into shares of the new company. LSEG
shareholders had already approved the merger, with a large majority, at the extraordinary general meeting
that took place on 4 July 2016.
The 2016 reporting year was largely characterised by plans for the merger of Deutsche Börse with LSEG.
The business combination would create a leading global market infrastructure provider with deep roots
in Europe - a major opportunity for accelerating the growth strategies of both companies. The commit-
ment to a client-focused business model would enable the Combined Group to fulfil client needs in the
best possible manner. The merger would generate cost synergies of some €450 million (from the third
year following completion of the transaction) as well as revenue synergies of at least €250 million
(from the fifth year following completion).
Planned merger with London Stock Exchange Group
■ 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, too. It systematic-
ally 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.
▪ Leading by example. As a listed service provider, Deutsche Börse Group aims to ensure that its own
business 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 con-
serving resources. It enhances its commitment to sustainability and its reporting on an ongoing basis
in order to establish itself as a long-term role model on the market.
sustainability information is as significant as engaging in a constructive dialogue on the future viability
of the international capital markets with both customers and the general public.
Deutsche Börse Group financial report 2016
24
23
■ 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
Deutsche Börse Group's objectives and strategies include discharging its corporate responsibility holis-
tically. In line with this, its management approach is guided by three action-based principles that aim
to sustainably strengthen and preserve the value added to the economy and to society by Deutsche
Börse Group:
Management approach for a Group-wide commitment to sustainability
Deutsche Börse Group is committed to transparent, reliable and liquid financial markets, although it
cannot affect how the volume drivers for these markets develop. However, the Group is able to influ-
ence the other factors to some extent or to control them in full; for instance, it can lobby for a favour-
able legal framework for the financial markets or it can develop products and services to support its
customers' business. This also enables it to reduce its dependence on those factors that are beyond
its control.
■The Group's innovative strength: if it succeeds in continually introducing new products and services
for which there is demand on the market, the Group will further grow its business.
Regulatory requirements affecting all market participants: if regulatory initiatives (e.g. EMIR, 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.
■
■ 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.
Deutsche Börse Group's ability to achieve its organic growth targets depends on the following factors,
among others:
Compensation
Risk IT
Asset Servicing
Derivatives
Markets Trading
& Custody
Core Products
& Regulatory
Affairs
Settlement
Group Legal
& Administration
& Capital Markets
Executive Office
Market Operations
Pre-IPO
Group Client
Services
Investor Relations
Group Audit
European Energy
Exchange (EEX)
Group Information
Security
Cash Market Sales
& Partner Markets
Clearing/CCP/CH
FX/360T
IT Infrastructure
& Operations
Business operations and Group structure
Community
Development
On 28 September 2016, the European Commission embarked upon Phase II of the merger clearance
proceedings, which are scheduled to be concluded no later than 3 April 2017. Within the scope of this
ongoing EU merger control procedure, Deutsche Börse received a so-called “Statement of Objections"
regarding the merger, which summarises concerns raised by the European Commission with regard to
the merger. In order to remedy these concerns, LSEG agreed to sell its subsidiary LCH.Clearnet SA sub-
sidiary to Euronext N.V., for a cash consideration of €510 million (subject to customary market price
adjustments). The possible divestment of LCH.Clearnet SA would be subject to, amongst other things,
examination and approval by the European Commission, in connection with the recommended merger of
DBAG and LSEG. Moreover, the transaction would be conditional upon the successful completion of the
merger. Following the market test in relation to this remedy proposal, the European Commission has
raised new concerns regarding the viability of LCH SA as a divestment business. These concerns relate
to access to bond and repo trading feeds currently provided for by MTS S.p.A., an Italian regulated elec-
tronic trading platform. The European Commission has therefore required that Deutsche Börse AG and
LSEG commit to the divestment of LSEG's majority stake in MTS S.p.A. to secure merger clearance.
LSEG has resolved to not commit to the required divestment of LSEG's majority stake in MTS S.p.A.
GSF IT
Human Resources
Group Project
Portfolio
Management
Innovation
Energy
& Cash Trading IT
Derivatives
Group Sales
Strategic Finance
Chief of Staff
Data IT
Office Automation
Growth Financing
Investment Funds
Services & GSF
Group Organi-
sational Services
Group Venture
Portfolio
Management
Corporate
Systems
IFS IT
Digitisation/
Platforms
Group Business
& Product
Development
Chief Risk Officer
Clearing IT
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
Treasury
Internal management
64 Report on post-balance
sheet date events
65 Non-financial key
performance indicators
73 Risk report
95 Report on opportunities
100 Report on expected developments
107 Deutsche Börse AG
(Disclosures based on the HGB)
113 Remuneration report
136 Corporate governance declaration
18
Deutsche Börse Group financial report 2016
Combined management report
Fundamental information about the Group
Besides the European Commission's approval, the merger is subject to a review from the Hesse Exchange
Supervisory Authority, which is part of the Ministry of Economics, Energy, Transportation and Regional
Development of the State of Hesse. The conclusion of this review procedure and the corresponding deci-
sion would be expected to take place during the second quarter of 2017.
33 Report on economic position
32 Deutsche Börse AG shares
This combined management report covers both Deutsche Börse Group and Deutsche Börse AG. It has
been prepared in accordance with sections 289, 315 and 315a of the Handelsgesetzbuch (HGB, German
Commercial Code) and German Accounting Standard (GAS) 20. This management report also takes into
account the requirements of the Practice Statement “Management Commentary" issued by the Inter-
national Accounting Standards Board (IASB).
Further information on the Group's financial position is presented in the “Financial position" section
of this combined management report.
18 Fundamental information
about the Group
Internal control system as part of the financial reporting process
Deutsche Börse has established a Group-wide internal control system (ICS). The ICS comprises a set
of rules for the management of corporate activities as well as guidelines which help to ensure that
such rules are being observed. 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 balance sheet key performance indicators include cash flows from operating activities, a prede-
fined liquidity target and equity less intangible assets. Liquidity planning aims at maintaining enough
liquidity to meet operating costs for one quarter (currently between €150 million and €250 million).
There is no set target for the Group's management of its equity less intangible assets KPI; rather, the
objective is to maintain a positive figure.
Combined
Deutsche Börse Group manages its EBIT 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.
management report
Around 80 per cent of Deutsche Börse Group's costs are fixed costs (excluding special factors). As a
result, the Group can handle higher volumes of business without a significant increase in costs. Con-
versely, a decline in business volumes has a direct impact on the Group's profitability. Approximately
20 per cent of the Group's costs are volume-related costs.
Deutsche Börse Group financial report 2016
26
25
Operating costs include staff costs, depreciation, amortisation and impairment losses, and other operating
expenses. 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. Depreciation, amortisation and impairment charges include
depreciation and amortisation of, and impairment losses on, intangible assets and property, plant and
equipment. Other operating expenses mainly comprise the costs of developing and operating the Group's
technological infrastructure, office infrastructure costs and marketing costs.
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 (the performance of the financial markets, regulatory and structural
changes, and the Group's innovative strength). 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 euro zone and the USA, 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 investing their clients' cash
collateral. Other operating income results from exchange rate differences, among other things. Volume-
related costs normally correlate with sales revenue in the relevant business areas, such as fees and com-
missions from banking business or the cost of purchasing price data. In addition, various licence fees
(e.g. for index licences) contribute to volume-related costs.
Deutsche Börse Group's internal management system is based on key performance indicators taken from
the consolidated income statement (net revenue, operating costs, EBIT, the Group's net profit for the period
attributable to Deutsche Börse AG shareholders) and the balance sheet (cash flows from operating activi-
ties, liquidity, equity less intangible assets). Additionally, the system includes key performance indicators
that are derived from the consolidated income statement and the balance sheet (interest coverage ratio,
interest-bearing gross debt / EBITDA and return on shareholders' equity).
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 pay-
back 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 proj-
ects and during ongoing project management.
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 goal of the Clearstream subgroup is to maintain
an interest coverage ratio of 25 and to comply with other capital adequacy measures to protect its cur-
rent 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.
Management systems
Liquidity
Index family which shows the performance of sustainable
companies
L
Initial public offering. An IPO marks the time when a company
first offers its shares for sale to the general public and launches
them on the equity market.
IPO
International CSD
ICSD
T
R
Index family based on sustainability ratings covering environ-
mental, social and governance (ESG) criteria
Short for "repurchase transaction". 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.
360T
OTC trading platform for financial instruments such as foreign
exchange, money market or interest rate products from 360T
T2S
TARGET2-Securities. Platform for securities settlement in central
bank money, allows banks to reduce cross-border settlement costs
and pool collateral. Clearstream migrated to T2S in February
2017. "TARGET" is short for "Trans-European Automated Real-Time
Gross Settlement Express Transfer System".
S
Scale
New exchange segment on Frankfurter Wertpapierbörse (FWB®,
the Frankfurt Stock Exchange) since 1 March 2017, designed
to enhance access to investors and growth capital for small and
medium-sized companies. As a segment of the exchange-based
Regulated Unofficial Market, Scale has replaced the Entry Standard
for equities and corporate bonds. Companies must meet minimum
prerequisites for defined key performance indicators (KPIs) and
collaborate with a Deutsche Börse Capital Market Partner in order
to be eligible for inclusion. Requirements also include mandatory
research reports commissioned and paid for by Deutsche Börse.
Securities lending
Market situation in which a security can be bought or sold, even
in larger quantities, without substantially affecting its price.
Important criterion for assessing the quality of a securities market
in securities trading, and thus a decisive factor in the competition
between marketplaces.
Repo
Listing
MiFID
STOXX® Global ESG Leaders
Quantitative easing. In March 2015, the ECB launched a purchas-
ing programme for sovereign bonds and other securities. The aim
is to further boost market liquidity and to fend off deflation due
to an increase of the money supply. The ECB's QE measures are
currently planned to run until the end of 2017, with reduced
volumes from April 2017. Central banks use QE as a tool to avert
crisis situations worldwide as done by the Federal Reserve,
the Bank of England and the Bank of Japan.
QE
Q
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Young high-growth companies' preparatory phase before going
public (IPO)
Pre-IPO
Collateral requirements determined by a ☑CCP for all types of
transactions for which it acts as a central counterparty, used to
cover risk from open positions in case a participant defaults.
Quotation of a security or issuer on the exchange. Issuers at
the Frankfurt Stock Exchange can choose from four transparency
standards for their listing: Prime Standard, General Standard,
Scale and Basic Board.
Margin
M
Over the counter, off-exchange. Describes transactions between
two or more trading parties that are not conducted on a regulated
market
STOXX® Sustainability
Markets in Financial Instruments Regulation. A supplementary
EU regulation to MiFID II that will come into effect from January
2018. It will see the introduction of comprehensive reporting
obligations to increase transparency in the stock, bond and
derivatives markets and close existing 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 of central counter-
parties, trading venues and benchmarks as well as provisions
governing the activities of companies from third countries.
MiFIR
Refers to the revision of the Markets in Financial Instruments
Directive (MiFID). The revised directive was introduced in
June 2014 and will become applicable as of January 2018.
The directive contains guidelines for the activities of invest-
ment firms in particular for so-called market maker (liquidity
providers) and participants in algorithmic trading - and regulated
trading venues, precautionary measures regarding the specification
and supervision of position limits for commodities derivatives as
well as regulation for data reporting services.
MiFID II
Markets in Financial Instruments Directive. The EU directive
establishes a regulatory framework for the provision of investment
services in financial instruments (such as brokerage, advice,
dealing, portfolio management, underwriting) by banks and
investment firms and for the operation of regulated markets
by market operators (stock exchanges among others). The
objective is to promote the integration, competitiveness and
efficiency of EU financial markets.
P
OTC
Collateral, in particular in the form of cash or securities, such
as equities or bonds, is deposited in order to meet specified
collateral requirements (
|
EMIR
E
Platform for bringing together young innovative growth companies
in the pre-IPO sector and international investors. Deutsche Börse
Venture NetworkⓇ has mobilised more than €1 billion for funding
innovative ideas since its foundation. At the end of September
2016, the first Venture Network company went public. Introduced
in 2016, Venture Match is a service provided by the network that
matches investors and participating companies.
Deutsche Börse Venture Network
Banks or financial services providers that furnish binding bid and
ask quotes for a particular security in the order book, either upon
request or at their own initiative. Designated Sponsors enhance
the liquidity of the securities they support.
Designated Sponsor
Deutsche Börse's corporate venture capital arm established in
June 2016. DB1 Ventures' goal is to provide capital to trend-
setting companies from our sector - to enable them to develop
viable concepts, and to create growth. Our focus lies on early-
to growth-stage fintech businesses.
DB1 Ventures
D
Targeted attack on an IT infrastructure from an external source.
Many attacks are directed at financial services providers; govern-
ments and public administrations are also often the focus of
criminal attention.
Cyber attack
The safekeeping and administration of securities for others. A
custody account (similar to an account for money transactions)
is established for each customer. The account information
includes details of the types, nominal values or quantities,
volumes etc. of the securities held, as well as the name and
address of the account holder.
Custody
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Central Securities Depository Regulation. CSDR aims to achieve
harmonisation of securities ☑ settlement systems and supervisory
rules for CSDs in Europe.
CSDR
Central securities depository. Clearstream Banking AG acts as
the officially recognised German bank for the central deposit of
securities under the Depotgesetz (German Securities Deposit Act).
In this function, it offers a wide range of post-trade services
relating to securities issued in Germany and other countries, both
as a CSD for securities eligible for collective safe custody and
as a custodian for other securities.
CSD
Capital Requirements Directive IV and Capital Requirements
Regulation (CRR II package). The CRR II package is the fourth
revision of the original CRD for credit institutions and investment
firms of 2006. The CRD's key aim is to strengthen the resilience
of the EU banking sector by ensuring that institutions' capital
is of sufficient quantity and quality.
CRD IV/CRR
A debt security traded on the money market with a short
or medium term (mostly less than one year) and issued by
issuers with a high credit rating to finance their short-term
capital requirements. Issuers benefit from the commercial
paper's flexibility and customisability; buyers are able to
obtain attractive conditions for short-term investments.
margin).
Commercial paper
European Market Infrastructure Regulation. EMIR regulates
→ OTC derivatives, central counterparties ( CCPs) and trade
repositories; it aims to improve security and integrity within the
OTC derivatives market by promoting transparency and reducing
risk. Among other things, this is to be achieved 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, as well as disclosure require-
ments for all derivatives. EMIR also establishes general require-
ments for CCPs and trade repositories.
ESG criteria
ESG = environment, social, governance. The composition of ESG
indices such as the STOXX® ESG Global Leaders Index reflects
these three selection criteria.
Subordinated corporate bond with both equity- and debt-like
features, very long or unlimited maturity and high interest rates.
Hybrid bond
H
Global Securities Financing. Business area within
Deutsche Börse Group's Clearstream segment that comprises
automated securities lending services and collateral
management. Deutsche Börse Group showcases its secured
funding and securities financing activities at the annual Global
Funding and Financing Summit (GFF for short).
Transfer of securities by a lender for a fee - and usally → collateral
- and on condition that the borrower returns securities of the same
kind, quality and amount to the lender at the end of a fixed term.
With GSF, Clearstream offers a service for securities lending.
Deutsche Börse Group financial report 2016
292
291
Global Reporting Initiative. Independent not-for-profit organisation
that publishes guidelines for creating sustainability reports in
cooperation with the United Nations Environment Programme
(UNEP). Transparency is the basis of reporting in accordance with
the GRI, which aims to ensure that sustainability reports are
standardised and comparable.
GRI
Integrated risk and liquidity management solution in
Deutsche Börse Group's GSF business field at Clearstream.
It offers integrated financing services, including securities
lending and collateral management services for a range of
major asset classes including fixed-income securities and equities.
Through the Global Liquidity Hub, customers can, for example,
fulfil their margin obligations towards central clearing houses
(CCPs) and cover their global exposures.
Collateral
Global Liquidity Hub
Foreign exchange. Receivables in foreign currencies consisting
of assets or cheques in said currencies
FX
Portmanteau combining the terms "financial" and "technology".
Describes novel solutions for application systems that constitute
innovations or advancements in the financial services sector
Fintech
F
Exchange 4.0 consists of three main pillars: expanded data and
analytics intelligence, a leading technology platform and a new
digital ecosystem. It will thus support long-term growth across
Deutsche Börse Group's entire value chain.
Exchange 4.0
Exchange-traded product. ETPs comprise exchange-traded funds
(ETFs), exchange-traded commodities (ETCs) and exchange-
traded notes (ETNs).
ETP
Exchange-traded fund. Mutual fund with 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.
ETF
G
GSF
Published by
The completion of an exchange transaction, i.e. the transfer of
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.
Indexed to 30 December 2015
120
110
100
80
80
00
90
70
60
60
0
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Share price development of Deutsche Börse AG and benchmark indices in 2016
STOXX 50®, STOXX® and STOXX® Europe 600 Financials are
registered trademarks of STOXX Ltd.
C7Ⓡ, DAX®, Deutsche Börse Venture Network®, Eurex®, Eurex
Bonds®, Eurex Repo®, FWB, GC Pooling®, MDAX®, SDAX®, T7®,
TecDAX®, Vestima®, Xetra® and Xetra-Gold® are registered
trademarks of Deutsche Börse AG. 360T® is a registered
trademark of 360 Treasury Systems AG. EURO STOXX®, EURO
Registered trademarks
21 March 2017
E-mail
The German version of this report is legally binding. The company
cannot be held responsible for any misunderstanding or misinter-
pretation arising from this translation.
Phone
Fax
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 2016 and the financial report 2016 are both available
in German and English.
Order numbers
Oct
1000-4701 (German Annual)
1010-4703 (English Annual)
1010-4704 (English financial report)
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 Marketing
E-mail
corporate.report@deutsche-boerse.com
Phone
Fax
+49 (0) 69-2 11-1 49 84
+49 (0) 69-2 11-61 49 84
1000-4702 (German financial report)
Settlement
Nov
Daily closing price of Deutsche Börse AG shares¹)
DAX®
Photographs
Lesmo GmbH & Co. KG, Dusseldorf
Deutsche Börse AG, Frankfurt/Main
Concept and layout
www.deutsche-boerse.com
Germany
60485 Frankfurt/Main
Deutsche Börse AG
Acknowledgements
Deutsche Börse Group financial report 2016
294
293
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
Volatility
V
Entity used as a basis for a derived financial instrument, e.g.
a bond based on DAX®
Underlying
U
IT architecture used for the trading systems of Deutsche Börse Group's
futures exchanges (Eurex Exchange). It is also utilised at BSE, the
Bombay Stock Exchange. T7Ⓡ is based on a high-performance mes-
saging architecture that combines minimal latency with maximum
reliability. T7 is part of 7 Market Technology®.
T7
Index family which was introduced in February 2016. It was
designed for investors wishing to "decarbonise", i.e. limit the
exposure of their portfolios to reduce climate-related risks, such
as stricter regulation or physical damage, while participating in
the growth of low-carbon industries.
STOXX® Low Carbon
Thorsten Jansen (title, portrait Joachim Faber)
Jörg Baumann (Executive Board)
Laurence Chaperon (portrait Carsten Kengeter)
Financial reporting system
The corporate report 2016 of Deutsche Börse Group is available
here:
STOXX® Europe 600 Financials
Dow Jones Global Exchanges
Capital Markets Union
Publication date
Group Sustainability
☑www.deutsche-boerse.com/ir_e
+49 (0) 69-2 11-1 46 08
Fax
Kunst- und Werbedruck, Bad Oeynhausen
+49 (0) 69-2 11-1 16 70
Dec
Phone
ir@deutsche-boerse.com
E-mail
Investor Relations
Combined management report, consolidated financial statements
and notes produced in-house using firesys and SmartNotes.
Contact
+49 (0) 69-2 11-1 15 11
Fax
as print version at Deutsche Börse Group's publication hotline:
Phone +49 (0) 69-2 11-1 15 10
CORPORATE
REPORTS
as pdf, html version and in a document library app on the internet:
www.deutsche-boerse.com/annual_report
Printed by
CMU
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Frankfurt/Main
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Germany
Postal address:
Germany
65760 Eschborn
Mergenthalerallee 61
The Cube
Eschborn
Ireland
Cork
2600 Cork Airport Business Park
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Belgium
1) As from 18 July 2016, the data shown refer to tendered shares (ISIN DE000A2AA253).
1000 Bruxelles
Leipzig
Augustusplatz 9
04109 Leipzig
Germany
The Square
Luxembourg
United Kingdom
EC2N 2HE
13 Austin Friars
London
United Kingdom
E14 4HE
London
Canary Wharf
3rd Floor, Westferry House
66, Boulevard de l'Impératrice
11 Westferry Circus
E14 4HE
London
2nd Floor, Westferry House
Canary Wharf
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United Kingdom
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London
1st Floor, Westferry House
Canary Wharf
11 Westferry Circus
London
United Kingdom
42, Avenue JF Kennedy
L-1855 Luxembourg
1050 Bruxelles
Belgium
Brussels
Auditor's report
Deutsche Börse Group financial report 2016
288
287
Jeffrey Tessler
Jeffy Tester
Hauke Stars
Haube Pras
Gregor Pottmeyer
6. Potty
Andreas Preuss
نسا
Carsten Kengeter
Deutsche Börse AG
Frankfurt/Main, 10 March 2017
To the best of our knowledge, and in accordance with the applicable reporting principles, the
consolidated 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
development 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.
the Executive Board
Responsibility statement by
Responsibility statement
by the Executive Board
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
We have audited the consolidated financial statements prepared by Deutsche Börse Aktiengesellschaft,
Frankfurt/Main, comprising the consolidated income statement, the consolidated statement of com-
prehensive income, the consolidated balance sheet, the consolidated cash flow statement, the consoli-
dated statement of changes in equity and the notes to the consolidated financial statements, together
with the combined management report for the financial year from 1 January to 31 December 2016.
The preparation of the consolidated financial statements and the combined management report in
accordance with IFRSS, as adopted by the EU, and the additional requirements of German commercial
law pursuant to Section 315a (1) of the German Commercial Code [HGB] are the responsibility of the
Company's executive board. Our responsibility is to express an opinion on the consolidated financial
statements and on the combined management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with Section 317 HGB
and German generally accepted standards for the audit of financial statements promulgated by the
Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] [IDW]. Those standards require
that we plan and perform the audit such that misstatements materially affecting the presentation of
the net assets, financial position and results of operations in the consolidated financial statements in
accordance with the applicable financial reporting framework and in the combined management report
are detected with reasonable assurance. Knowledge of the business activities and the economic and
legal environment of the Group and expectations as to possible misstatements are taken into account
in the determination of audit procedures. The effectiveness of the accounting-related internal control
system and the evidence supporting the disclosures in the consolidated financial statements and the
combined management report are examined primarily on a test basis within the framework of the audit.
The audit includes assessing the annual financial statements of those entities included in consolida-
tion, the determination of entities to be included in consolidation, the accounting and consolidation
principles used and significant estimates made by executive board, as well as evaluating the overall
presentation of the consolidated financial statements and combined management report. We believe
that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with
IFRSS, as adopted by the EU, and the additional requirements of German commercial law pursuant
to Section 315a (1) HGB and give a true and fair view of the net assets, financial position and results
of operations of the Group in accordance with these requirements. The combined management report
is consistent with the consolidated financial statements, complies with the German statutory requirements,
and as a whole provides a suitable view of the Group's position and suitably presents the opportunities
and risks of future development.
3011 Bern
Switzerland
Marktgasse 20
Bern
10117 Berlin
Germany
Unter den Linden 36
Kurfürstendamm 119
10711 Berlin
Germany
Berlin
1101 BA Amsterdam
Netherlands
Australia Building, 3rd floor
Hoogoorddreef 7
Atlas Arena Amsterdam
11-13, Rue d'Idalie
Amsterdam
Deutsche Börse Group worldwide
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
(German Public Auditor)
Dielehner
Wirtschaftsprüfer
(German Public Auditor)
Wirtschaftsprüfer
Braun
Wirtschaftsprüfungsgesellschaft
KPMG AG
Frankfurt/Main, 10 March 2017
Europe
The netting (offsetting of buy and sell positions over a given
period of time) of receivables and liabilities arising from securities
and derivatives transactions in order to achieve efficient risk
management. Clearing thus contributes to reducing risk positions.
It is also used to determine the bilateral net debt of buyers and
sellers. Central clearing takes place via a CCP.
Madrid
Milan
Tokyo 100-0005
Japan
Chiyoda-ku
1-6-5, Marunouchi
27F, Marunouchi Kitaguchi
Building
Tokyo
Republic of Singapore
Singapore 068893
#13-03A Robinson Centre
61 Robinson Road
Singapore 048619
Republic of Singapore
#55-01 Republic Plaza
9 Raffles Place
Singapore 048619
Republic of Singapore
#27-01 Republic Plaza
9 Raffles Place
400 051
Singapore
India
Mumbai
Bandra Kurla Complex
G Block, C-62,
Australia
Sydney
Level 26
44 Market Street
Sydney NSW 2000
Australia
For more information on our
addresses please visit
www.deutsche-boerse.
China Europe International Exchange. Sino-German joint venture
of the Shanghai Stock Exchange, Deutsche Börse and China
Financial Futures Exchange, founded in 2015. The new market
venue is the first and only authorised trading platform outside
of China for financial instruments in Renminbi (RMB).
CEINEX
Central counterparty; also: clearing house. Institution that acts as
a legal intermediary between the trading partners as a buyer or
seller after a transaction has been completed, facilitating netting,
minimising the default risk of a contracting party (☑margining and
collateralisation), and carrying out all process steps necessary
for clearing
CCP
IT infrastructure for Eurex Clearing that carries out the settlement
of listed and OTC products (both for derivatives and cash)
on a uniform architecture. Customers are supported at the time
of clearing by various transaction- and EMIR-compliant
segregation models, based on configurable account structures.
C7 is part of 7 Market Technology®.
C7
The Capital Markets Union (CMU) is a flagship initiative of the
European Commission. Its central aim is to enhance economic
growth in the EU by strengthening the role of capital markets and
further integrating financial markets. For more information on the
CMU, please visit our website (www.deutsche-boerse.com >
Regulation Regulatory dossiers > Capital Markets Union).
Capital Markets Union
с
Public transfer protocol originally developed to trade the digital
currency bitcoin. It basically consists of an electronic, decentral-
ised and fully disclosed ledger of all transactions, i.e. "blocks"
which continually validate each other. Jointly with Deutsche
Bundesbank, Deutsche Börse Group showcased a blockchain
prototype for securities settlements in November 2016. The
Group is also invested in Digital Asset Holdings LLC, a block-
chain pioneer.
Level 8, Vibgyor Towers
Blockchain
(Agreement on the) Sale of an operation concluded by transferring
the assets of a company to the buyer one by one, as opposed to
a so-called share deal, i.e. a sale concluded by transferring shares
in a company.
Asset deal
Used in software development to describe a step-by-step
("incremental") approach involving repeating steps or loops
("iteration") based on working in self-organising, open teams.
Agility
A
Glossary
Deutsche Börse Group financial report 2016
290
289
com/addresses
B
Calle de la Tramontana, 2
28231 Las Rozas de Madrid
Spain
Mumbai
Hong Kong
233 South Wacker Drive
Willis Tower
Chicago
North America
Switzerland
8045 Zürich
4th floor
Manessestrasse 85
Zurich
Austria
Mayerhofgasse 1/19
1040 Wien
Vienna
Sokolovská 662/136b
18600 Praha 8
Czech Republic
Futurama Business Park
Building B
Prague
Russia
3rd Floor, Regus Business Centre
125009, Moskva
Vozdvizhenka Street 10
Moscow
Italy
Via Monte di Pietà 21
20121 Milano MI
Suite 2450
Chicago, IL 60606
USA
Willis Tower
233 South Wacker Drive
Sheikh Zayed Road
P.O. Box 27250
Dubai
Conrad Tower Building
Level 10, Unit 1006
Dubai
77 Jianguo Road
100025 Beijing,
Chaoyang District
P.R. China
China Central Place
Unit 01-06, 7/F, Tower 3,
Beijing
France
17, rue de Surène
75008 Paris
Paris
2904-7, 29/F, Man Yee Building
68 Des Voeux Road, Central
Hong Kong
Norway
Filipstad Brygge 1
Asia
Oslo
New York, NY 10175
USA
521 Fifth Avenue Floor 38
60 Broad Street Floor 31
New York, NY 10004
USA
1 Rockefeller Plaza Floor 11
New York, NY 10020
USA
New York
Chicago, IL 60606
USA
Suite 2455
0252 Oslo
Deutsche Börse AG shares: key figures ¹)
United Arab Emirates
2015
Analyst recommendations buy/hold/sell (as at 31 Dec)
appr. 60,000
Shareholders
95
94
%
15/28/31/26
17/29/30/24
%
Share of investors from Germany/UK/USA/other countries
Institutional investors
42.2
65.8
%
Attendance of share capital at the Annual General Meeting
14.4
13.2
%
Average annual return since IPO in 2001
14.7
14.5
€bn
Average target price set by analysts at year-end
%
43/50/7
appr. 57,000
52/39/9
2016
90
C6
report. KPMG's auditor's report on the consolidated financial statements
and the combined management report of Deutsche Börse AG as at
31 December 2016 can be found on ☑page 288 of this financial report.
<
The non-financial key figures, the qualitative statements in relation
to sustainability in this corporate report as well as the process of the
stakeholder survey were subject to review by KPMG AG Wirtschafts-
prüfungsgesellschaft (KPMG), an independent external auditor. The
respective independent assurance is available on the internet under
www.deutsche-boerse.com > Sustainability Reporting Corporate
Verification of non-financial key figures
In compiling the information on sustainability in this corporate report,
our aim is to achieve the highest possible degree of clarity and transpar-
ency. The non-financial facts and figures published generally refer to
Deutsche Börse Group as a whole. Topics that are specific to a certain
location or sustainability activities that are managed locally are identified
accordingly.
Principles of sustainability reporting
GRI
Market capitalisation (as at 31 Dec)
Reporting on sustainability information and key figures is largely based
on the G4 standard of the Global Reporting Initiative (GRI). A detailed
overview of all GRI indicators (GRI index) is available in the online
version of this report: ☑ www.deutsche-boerse.com > Sustainability >
Reporting
About this report
10
C7
5) Closing price on preceding trading day
4) Based on the volume-weighted average of the daily closing prices
3) For financial year 2016, proposal to the Annual General Meeting 2017
1) Since 18 July 2016, all information related to share prices has been based on Deutsche Börse shares tendered for exchange (ISIN DE000A2AA253).
2) Adjusted for exceptional items
85.00
84.00
€
The Annual 2016 and the financial report 2016 together constitute
Deutsche Börse Group's corporate report 2016. It provides information
on the financial year 2016 as well as an outline of the identification
and implementation process for important action areas regarding the
company's sustainability profile.
18.3
6) Intraday price
Price-earnings ratio4)
High 6)
59.22
81.39
€
Opening price (as at 1 Jan) 5)
3.0
3.1
%
Dividend yield4)
55
83.00
54
Dividend distribution ratio²)
2.25
2.353)
€
Dividend per share
3.85
4.34
€
Earnings per share (basic)2)
17.3
%
87.41
€
€
100
100
%
186.7
186.8
m
193.0
193.0
m
Free float (as at 31 Dec)
Low 6)
Number of shares (as at 31 Dec)
thereof outstanding (as at 31 Dec)
0.5
m shares
Average daily trading volume on Xetra®
81.39
77.54
€
Closing price (as at 31 Dec)
58.65
67.19
0.7
www.deutsche-boerse.com
Germany
60485 Frankfurt/Main
26 October 2017
Publication Q3/2017 results
Publication half-yearly financial report 2017
Deutsche Börse AG
Annual General Meeting
17 May 2017
Publication Q1/2017 results
26 April 2017
Financial calendar
26 July 2017
34
33
1) As from 18 July 2016, the data shown refer to tendered shares (ISIN DE000A2AA253).
Dow Jones Global Exchanges
STOXX® Europe 600 Financials
Nov
Dec
Oct
Sep
Aug
Daily closing price of Deutsche Börse AG shares¹)
DAX®
Deutsche Börse Group financial report 2016
Economic performance throughout the euro area deteriorated again somewhat in 2016: even though no
country was in recession during 2016, economic growth weakened in some states within the European
Economic Area such as Spain, the Netherlands and Portugal. Hence, the European Central Bank contin-
ues to assess the economic situation in the EU as relatively fragile. It lowered the deposit rate for banks
further in March 2016, from -0.30 per cent to -0.40 per cent. Moreover, it extended its bond-buying
programme until the end of 2017, albeit cutting monthly volumes from €80 billion to €60 billion per
month from April 2017 on.
Despite a minor slowdown in global economic growth, German GDP for 2016 slightly outperformed the
previous year's levels, according to initial estimates. The IMF's January 2017 estimates put growth in
German economic output at 1.7 per cent in 2016 (2015: increase in real terms of 1.5 per cent).
The IMF expects US economic output to have posted a real 1.6 per cent increase for 2016, compared
to a 2.6 per cent increase the year before. Given further relief on the labour market and higher expected
economic growth for 2017 (not least as a result of the US elections), the US Federal Reserve raised its
key interest rate again in December 2016, to a range between 0.50 per cent and 0.75 per cent.
All told, stagnating economic growth, political uncertainty in Europe, and the continued low interest rate
policy pursued by the European Central Bank had a dampening effect on European capital markets during
2016. As a result, traded volumes on Deutsche Börse Group's cash markets showed a marked decline,
whilst the Group's derivatives markets posted a slight increase.
Development of trading activity on
selected European cash markets
Development of contracts traded on
selected derivatives markets
2016
Change
vs 2015
Change
2016
€bn
%
m contracts
Against this background, the economies of industrialised nations showed somewhat weaker growth in
2016 compared to the previous year, as estimated by the International Monetary Fund (IMF). According
to these estimates, real gross domestic product (GDP) rose by 1.6 per cent in 2016, compared to a
growth rate of 2.1 per cent in 2015. Global economic growth was 3.1 per cent in 2016 (2015: real
growth rate of 3.2 per cent).
July
Apr
May
Report on economic position
Macroeconomic and sector-specific environment
Macroeconomic developments had and continue to have a significant impact on the overall economic
environment and on trading activity on the markets. For Deutsche Börse Group, the macroeconomic
environment during the year under review was rather complex; whilst some factors have a stimulating
effect on business, others have the potential of unsettling market participants, burdening their business
activity:
■the slight overall slowdown during 2016 in economies which are relevant to Deutsche Börse Group
(Central Europe, USA)
■the major central banks' low interest rate policy and the resulting large volumes of liquidity, in
Europe especially as a result of the European Central Bank's quantitative easing (QE), and in
the US as a result of the Federal Reserve's interest rate policy (albeit with two minor interest rate
hikes in December 2015 and December 2016)
■the fragile economic situation in the euro area (burdened by the high national debt levels of individual
European countries), the result of the UK referendum in June 2016, the US elections in November 2016
-
― and as a result, the devaluation of the euro and pound sterling against the US dollar, which reached
its highest level in 14 years in December 2016
■ 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
next section entitled "Regulatory environment")
Share price development of Deutsche Börse AG and benchmark indices in 2016
June
Indexed to 30 December 2015
110
100
90
80
70
60
%
60
0
Jan
Feb
Mar
120
London Stock Exchange">
Regulation on benchmarks and indices
-8
2) Trading volume in electronic trading (single-counted)
Source: Exchanges listed
Source: Exchanges listed
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Regulatory environment
The international financial crisis has demonstrated the necessity for increased transparency and stability
in the global financial markets and has sparked a discussion about the role and details of the necessary
financial market infrastructure.
As a provider of a highly regulated financial market infrastructure, Deutsche Börse Group shares the
objective of the national legislator, the European Union as well as the G20 to strengthen transparent
and regulated markets. Being a constructive partner, we contribute to the political discussion on suitable
national and European initiatives for financial market regulation.
The considerable increase in regulatory requirements has a twofold impact on Deutsche Börse Group:
as a market infrastructure provider, the Group must meet regulatory duties and at the same time strive
to offer products tailored exactly to meet the needs of its customers. It therefore holds an important posi-
tion as a link between regulators and customers. As such, Deutsche Börse Group supports its customers
in measures ensuring their compliance with regulatory requirements and thereby minimising their risks.
The various regulatory dossiers have different impacts and/or offer opportunities for the entities contrib-
uting to Deutsche Börse Group's value chain. Accordingly, the Group views regulation not just as an
obligation to comply but also as an opportunity to grow (see also the ☑report on opportunities).
Financial markets infrastructure regulation
Regulation of markets in financial instruments (MiFID II, MiFIR)
The revised directive (MiFID II) and the accompanying regulation (MiFIR) entered into force in July 2014.
However, the date of application has been postponed to 3 January 2018 in order to give market partici-
pants and supervisory authorities sufficient time to prepare to the new requirements, particularly with
regard to establishing technical reporting and monitoring systems. In Germany, the Second Financial
Market Amendment Act (Zweites Finanzmarktnovellierungsgesetz, 2nd FiMaNoG) will transpose the new
rules into national law and make these provisions applicable by July 2017 at the latest; a first legislative
proposal also contains provisions on further EU Benchmark Regulation as well as the Securities Finan-
cing Transactions Regulation (SFTR) (see also below).
The European Parliament, the European Commission as well as the Council of Member States have
agreed on the large majority of implementing measures (Level 2). The European Securities and Markets
Authority (ESMA) in close cooperation with national supervisors is currently developing a set of common
standards guiding the interpretation and application of the new rules (Level 3).
1) Part of London Stock Exchange Group
The new directive and regulation will fundamentally transform the European financial market by expand-
ing transparency provisions, strengthening the stability and integrity of its infrastructure, revising the
market's microstructure and improving the quality and availability of market data. The new rules will
have a profound impact on Deutsche Börse Group, too, in particular on its trading and clearing activities,
as well as on its market data business. We will continue our intense exchange with regulators, super-
visors as well as market participants to apply the new rules consistently and will proceed in the develop-
ment of new services and solutions which will support market participants in implementing regulatory
objectives efficiently. Thereby, our focus lies on the areas of transparency provisions and disclosure require-
ments, market making and algorithmic trading as well as amending the organisational requirements
with regard to the security mechanisms of trading venues and market participants.
36
Deutsche Börse Group financial report 2016
EMIR: implementation and review
The European Market Infrastructure Regulation (EMIR), which entered into force in 2012, is a significant
regulation for central counterparties. With the step-by-step introduction of a clearing obligation, which
started in June 2016, implementation is about to enter the final phase. The European Commission com-
menced the official revision process for the regulation in the summer of 2015. The EU Commission's
draft revision with amendments to EMIR has been published on 6 January 2017. The revision is centred
around the following issues: liquidity of central counterparties, supervisory structures as well as risk
management aspects and infrastructure reporting requirements.
Recovery and resolution regulation for central counterparties
The recovery and resolution plans complement EMIR with the aim of providing central counterparties
with greater stability against market disruptions. In this context, one key aspect is to establish a sound
incentive structure at a European and global level which helps to exclude the use of tax payers' money.
On a European level, the EU Commission published a proposed legislation on recovery and resolution
plans for central counterparties in November 2016. On a global scale, the Committee on Payments and
Market Infrastructures (CPMI), together with the International Organization of Securities Commissions
(IOSCO), published first considerations for consultation back in 2012. CPMI/IOSCO provided global
standards for recovery plans in October 2014. At the same time, the Financial Stability Board (FSB)
published a framework for resolution plans in close cooperation with CPMI/IOSCO. The organisations
published consultations in mid-2016 aiming to specify initial reports. It is expected that CPMI/IOSCO
and FSB will publish respective results in the first half of 2017.
Central Securities Depository Regulation (CSDR)
With the CSDR, a uniform European regulatory framework for central securities depositories was estab-
lished for the first time in September 2014. The EU Commission and ESMA are currently specifying the
requirements, by way of technical standards; these are expected to apply from March 2017 onwards.
The CSDR will harmonise the securities settlement systems and supervisory rules for central securities
depositories throughout Europe. This will strengthen Clearstream's business model, because the provi-
sion of integrated banking services will still be permitted. Clearstream, Deutsche Börse Group's provider
of central securities depository (CSD) services, is actively involved in the legislative process and will
submit its authorisation files for licences by November 2017.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
The regulation on indices used as benchmarks in financial instruments and financial contracts (Bench-
mark Regulation) entered into force on 30 June 2016. The final application of the regulation will take
place on 1 January 2018. The regulation largely follows the global IOSCO principles for financial bench-
marks. The IOSCO principles were developed, back in 2013, as a response to the manipulation of cer-
tain indices or reference rates (such as LIBOR and Euribor).
Deutsche Börse Group, which successfully implemented the IOSCO principles in 2014 for its DAX® indi-
ces as well as for the indices of its subsidiary STOXX Ltd., welcomes the agreement reached between
the EU Parliament and the Council. The regulation's specific impact on the Group's business activities
depends on the implementation measures still to be laid out in the form of delegated acts and technical
standards by the EU Commission and ESMA.
35
-30
2,134.7
National Stock Exchange of India
Shanghai Futures Exchange
1,680.7
60
Euronext²)
1,802.0
-15
Moscow Exchange
1,950.1
19
Deutsche Börse Group
1,377.0
-16
CME Group
3,942.2
12
Borsa Italiana¹)
755.3
-20
Deutsche Börse Group - Eurex®
1,727.5
3
Bolsas y Mercados Españoles²)
652.9
-32
Intercontinental Exchange
2,037.5
2
1,566.3
85.00
vs 2015
5) Closing price on preceding trading day
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 reasons 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 12 May 2017 and may be exercised by the company in full or in part on one or more occa-
sions. 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 or call options or a combination of the
two). 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 8 and 9 of the agenda for the
Annual General Meeting held on 13 May 2015.
The following material agreements of the company are subject to a change of control following a
takeover bid:
■ On 18 March 2013, 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 has occurred 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 exer-
cised, 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 per-
centage points. A change of control will take place 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., Standard & Poor's Rating Services or Fitch
Ratings Limited. Further details can be found in the applicable bond terms.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
The terms of the €500.0 million fixed-rate bonds 2015/2025, the €600.0 million fixed-rate bonds
2013/2018, 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 has taken place 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 unse-
cured debt instruments of Deutsche Börse AG by Moody's Investors Services, Inc., Standard & Poor's
Rating Services or Fitch Ratings Limited. Further details can be found in the applicable bond terms.
■ Furthermore, the Co-operation Agreement entered into on 16 March 2016 between Deutsche Börse AG,
London Stock Exchange Group plc, and HLDCO123 plc concerning the planned merger of Deutsche
Börse AG and London Stock Exchange Group plc provides for certain termination rights in the event
of a takeover offer by third parties. Pursuant to this, Deutsche Börse AG and London Stock Exchange
Group plc are each entitled to terminate the Co-operation Agreement if a takeover offer for Deutsche
Börse AG has been announced, and (i) the Executive Board and Supervisory Board of Deutsche
Börse AG have issued a recommendation for acceptance of such takeover offer; or (ii) the takeover offer
has been completed. A termination of the Co-operation Agreement would not automatically prevent
completion of the merger of Deutsche Börse AG and London Stock Exchange Group plc, but would
merely end the Co-operation Agreement. Please refer to the Co-operation Agreement for further details.
■ Under certain conditions, members of Deutsche Börse AG's Executive Board have a special right to
terminate 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 has occurred if (i) a shareholder or third
party discloses that it owns more than 50 per cent of the voting rights in Deutsche Börse AG in accord-
ance with sections 21 and 22 of the WpHG, (ii) an intercompany agreement in accordance with sec-
tion 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 Umwandlungsgesetz (UmwG, German Reorganisation and Trans-
formation Act).
Moreover, change-of-control agreements 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.
31
32
Deutsche Börse Group financial report 2016
Deutsche Börse AG shares
The average annual return since Deutsche Börse AG's initial public offering in 2001 has been 13 per
cent. Thus Deutsche Börse AG shares prove to be an attractive long-term investment. They closed finan-
cial year 2016 with a slight decline by 5 per cent – in line with the performance of the STOXX® Europe
600 Financials Return (minus 7 per cent), but underperforming the DAX® blue-chip index (plus 4 per
cent) as well as the Dow Jones Global Exchanges Index, which tracks other exchange organisations and
rose by 7 per cent during 2016 (see the "Share price development of Deutsche Börse AG and bench-
mark indices in 2016" chart).
Deutsche Börse AG shares: key figures")
2016
2015
Earnings per share (basic)2)
Dividend per share
€
4.34
3.85
€
2.353)
2.25
Dividend distribution ratio²)
%
54
55
Dividend yield4
%
Furthermore, the Executive Board is authorised to increase the share capital by up to a total of €6.0 mil-
lion on one or more occasions in the period up to 15 May 2017, subject to the approval of the Super-
visory 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 Super-
visory Board. The Executive Board is authorised to disapply shareholders' pre-emptive rights for fractional
amounts with the approval of the Supervisory Board. The Executive Board is also authorised, subject to
the approval of the Supervisory Board, to exclude shareholders' pre-emptive rights in order to issue up
to 900,000 new shares per financial year from authorised capital IV to members of the Executive Board
and employees of the company as well as to members of the executive boards or management and
employees of its affiliated companies in accordance with sections 15ff. of the AktG. Full authorisation
derives from Article 4 (6) of the Articles of Association of Deutsche Börse AG.
Deutsche Börse Group financial report 2016
30
29
6) Intraday price
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
The purpose of the accounting-related ICS is to ensure orderly accounting practices. The central Finan-
cial Accounting and Controlling (FA&C) division is primarily responsible for preparing the accounts at
Deutsche Börse AG and its consolidated subsidiaries. FA&C is supported in this task by decentralised
units, which have to comply with the standards set by FA&C. The head of FA&C is responsible for the
process, including effective safeguards and controls. 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 judge-
ments and accounting options exercised by Deutsche Börse Group.
Moreover, Deutsche Börse Group continuously monitors and analyses changes in the accounting environ-
ment 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
system and monitors these permissions continuously using an incompatibility matrix. Transactions are
initially recorded in the general ledger or the appropriate subledgers on the basis of the chart of accounts
and the account allocation guidelines. The principle of dual control applies to all closing entries made
and to preparation of the consolidated financial statements.
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 financial
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.
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 estab-
lished 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 system solutions designed to achieve its struc-
tural growth objectives. The company works constantly to maintain and enhance the technology leader-
ship and stability of its electronic systems in the interests of its customers and the systemic stability of
the financial markets. This is why Deutsche Börse has significantly overhauled its trading and clearing
27
28
Deutsche Börse Group financial report 2016
3.1
systems, which go by the trade names T7Ⓡ and C7Ⓡ. Other technically challenging projects include
implementing the European Central Bank's plans to create a uniform, pan-European securities settle-
ment platform (TARGET2-Securities).
Takeover-related disclosures
Disclosures in accordance with sections 289 (4) and 315 (4) of the HGB
In accordance with sections 289 (4) and 315 (4) of the Handelsgesetzbuch (HGB, German Commercial
Code), Deutsche Börse AG hereby makes the following disclosures as at 31 December 2016:
The share capital of Deutsche Börse AG amounted to €193.0 million on the above-mentioned report-
ing date and was composed of 193 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
warrants 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
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 Asso-
ciation of Deutsche Börse AG.
The Executive Board is only aware of limitations to voting rights that result from the 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 share-
holding 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 Finanzdienstleistungs-
aufsicht (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
shareholders in accordance with the statutory provisions and the Articles of Association.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
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 Arti-
cles 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 (author-
ised 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. Pursuant to the authorisation, however, the exclusion of shareholders' pre-emptive
rights is subject to the proviso that shares issued during the term of the authorisation, excluding share-
holders' pre-emptive rights, shall not exceed twenty per cent of the registered share capital. Full authori-
sation, and particularly the conditions under which shareholders' pre-emptive rights can be excluded,
derive 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 exceed 10 per cent of the share capital; (ii) in the case of capital increases in exchange for non-cash
contributions for the purpose of acquiring companies, parts of companies, interests in companies, or
other assets; and (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 issued
during the term of authorisation 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, derive
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
exclude, subject to the approval of the Supervisory Board, only for fractional amounts. However, accord-
ing to the authorisation, the Executive Board may only exclude shareholders' pre-emptive rights if the
total number of shares issued during the term of authorisation does not exceed 20 per cent of the share
capital. The exact content of this authorisation derives from Article 4 (5) of the Articles of Association
of Deutsche Börse AG.
Further details of product and services development activities can be found in the ☑report on opportunities
and the report on expected developments.
3.0
In 2016, research and development expenses amounted to €171.0 million (2015: €202.2 million);
of this figure, approximately 52 per cent (2015: 47 per cent) was attributable to development costs that
were capitalised as internally developed software. In addition, €48.7 million of capitalised development
costs were amortised in 2016. This means that research and development costs amounted to 7 per cent
of net revenue (2015: 8 per cent). In the Eurex and Clearstream segments, which mainly invest in sys-
tems upgrades, research and development costs amounted to 6 per cent and 10 per cent of net revenue,
respectively. Details can be found in ☑ note 7 to the consolidated financial statements.
€
Market capitalisation (as at 31 Dec)
€bn
14.5
14.7
Average annual return since IPO in 2001
%
13.2
14.4
Attendance of share capital at the Annual General Meeting
%
65.8
42.2
Share of investors from Germany / UK / USA / other countries
Institutional investors
%
18.3
17/29/30/24
%
94
95
Shareholders
Analyst recommendations buy/hold/ sell (as at 31 Dec)
%
appr. 60,000
43/50/7
appr. 57,000
52/39/9
€
84.00
1) Since 18 July 2016, all information related to share prices has been based on Deutsche Börse shares tendered for exchange (ISIN DE000A2AA253).
2) Adjusted for exceptional items
3) For financial year 2016, proposal to the Annual General Meeting 2017
Opening price (as at 1 Jan) 5)
4) Based on the volume-weighted average of the daily closing prices
15/28/31/26
17.3
Average target price set by analysts at year-end
100
59.22
100
81.39
High6
€
83.00
Low6)
€
67.19
58.65
Closing price (as at 31 Dec)
€
77.54
81.39
87.41
193.0
186.8
m
193.0
186.7
%
m
Price-earnings ratio4)
Free float (as at 31 Dec)
thereof outstanding (as at 31 Dec)
Number of shares (as at 31 Dec)
0.7
0.5
m shares
Average daily trading volume on Xetra®
Market Data + Services
935.6
191.4
184.8
410.0
2,220.3
1,108.2
2,388.7
€ millions
Market Data + Services
401.6
335.4
Clearstream
746.4
168.4
Clearstream
288.8
63.8
Xetra
EBIT by segment
164.6
Xetra
781.9
€ millions
■
Compared to the previous financial year, cash markets profited less from the expansive monetary policy
and excess market liquidity, although the ECB pushed deposit rates further negative during the first quar-
ter of 2016, and extended its bond-buying programme. On the contrary, in light of the uncertainty sur-
rounding the future of the European Economic Area, investors (notably from the US) increasingly with-
draw their capital from European markets, and invested in their domestic markets, or emerging markets.
The Brexit referendum held in June, and the presidential elections in the US in November contributed
Deposit Guarantee Schemes
Deutsche Börse Group financial report 2016
96.7
The implementation into national law of the Deposit Guarantee Schemes Directive only has a minor
impact on Deutsche Börse Group entities. In November 2015, the European Commission presented a
proposal on the further modification of deposit guarantee schemes, with a view to completing the banking
union. The current status of political discussions does not yet allow for any projections on the possible
impact of the legislative process on Deutsche Börse Group.
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 in the reporting period was somewhat less favourable
compared to 2015. Slowing economic growth, the beginning of the turnaround in US interest rate policy,
as well as uncertainty regarding the potential development of the European Union following the UK's
Brexit referendum, all had a dampening effect on numerous business areas of the Group. Europe saw
significant cash inflows from US investors during 2015. This trend reversed during the year under
review, which placed an additional burden upon the Group's business. For instance, volumes in equities
and equity derivatives declined; settlement and custody volumes in domestic securities also decreased.
On the other hand, index derivatives volumes rose thanks to stock market volatility, which was elevated
at times. Moreover, the Group's growth areas - such as commodities traded at the EEX group, invest-
ment funds services offered by Clearstream, and foreign exchange trading at 360T - continued to
develop positively. Thanks to the turnaround in US interest rates in late 2015, Clearstream's net interest
income also finally showed a marked increase. Looking at developments during the course of the year,
business was strongest in the fourth quarter, whereas the third quarter turned out to be the weakest one,
not least due to reticence amongst market participants' after the UK's referendum.
Changes to the basis of consolidation and to segment reporting
As at 30 June 2016, Deutsche Börse Group sold International Securities Exchange Holdings, Inc. (ISE),
operator of three US equity options exchanges, as well as ISE's parent company, U.S. Exchange Hold-
ings, Inc., to Nasdaq, Inc., against a total cash consideration of US$1.1 billion. The stakes held in
BATS Global Markets, Inc, in Digital Asset Holdings LLC, and in ICE US Holding Company, Inc were
not part of this agreement; Deutsche Börse Group continues to hold these investments. On 26 Octo-
ber 2016, Deutsche Börse sold parts of its stakes held in BATS Global Markets, Inc. The €23.1 million
capital gain after taxes achieved upon disposal is reported in the Eurex segment. Following the sale of
ISE as at 30 June 2016, this subsidiary has represented a discontinued operation as defined in IFRS 5.
In accordance with IFRS requirements, the Group is now reporting its financial indicators in its com-
bined management report without this discontinued operation. The comparative prior-year figures for
the 2015 financial year were adjusted accordingly.
Effective 25 February 2016, Deutsche Börse AG sold its interest in Infobolsa S.A. Until that date,
Bolsas y Mercados Españoles (BME) and Deutsche Börse had each held 50 per cent of the interests
in Infobolsa S.A. and its subsidiaries (Market Data + Services segment). Effective 8 July 2016, Deutsche
Börse AG sold the assets and liabilities related to its subsidiary Market News International Inc. (MNI) to
Hale Global as part of an asset deal. In 2015, MNI contributed less than 1 per cent to the Group's net
revenue (Market Data + Services segment).
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Within Deutsche Börse Group, a series of organisational changes took place, affecting segment reporting:
Xetra segment
explicit recognition of revenue from listings (which was previously recognised under the "other" item)
Clearstream segment
■ breakdown of custody and settlement revenue into international business (ICSD), domestic business
(CSD) and Investment Funds Services (prior to this, breakdown was only into custody and settlement)
Market Data + Services segment
▪ merger of the Tools and Market Solutions business segments into Infrastructure Services
■ information business segment was renamed Data Services
■
reassignment of revenue from regulatory services, from Tools to Data Services
▪ reassignment of EEX connection revenue to Eurex
Results of operations
Although Deutsche Börse Group's revenue resources were influenced differently by the macroeconomic
environment, the Group was able to prove the capabilities of its diversified business model during the
year under review.
Net revenue by segment
517.6
The result from equity investments amounted to €36.9 million (2015: €–1.5 million). The significant
increase was due in particular to non-recurring income in connection with the disposal of the shares held
in BATS Global Markets, Inc during the fourth quarter 2016. Adjusted for this non-recurring effect, the
result from equity investments was €5.7 million (2015: €2.7 million).
1,032.2
Other operating expenses relate primarily to the costs of enhancing and operating Deutsche Börse Group's
technological infrastructure, including, for example, costs for IT services providers and data processing.
In addition, other operating expenses include the cost of the office infrastructure at all the Group's loca-
tions 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 distribute its products
and services to end customers, advertising and marketing costs only account for a very small portion of
the company's operating expenses. Adjusted for non-recurring effects, the other operating expenses declined
by 5 per cent.
Deutsche Börse Group's earnings before interest and taxes (EBIT) increased by 18 per cent during the
year under review. Adjusted for non-recurring items in costs and the result from equity investments, the
Group's EBIT increased by 15 per cent.
Deutsche Börse Group key performance figures
unadjusted
adjusted
2016
€m
2015
€m
Change
%
Depreciation, amortisation and impairment losses increased by 8 per cent (adjusted) in the year under
review. This was mainly due to the amortisation of hidden reserves which were revealed in connection
with the full consolidation of 360T in 2015, in the amount of €10.1 million (2015: €2.1 million).
2016
€m
Change
€m
%
Net revenue
2,388.7
2,220.3
8
2,388.7
40
Operating costs
2015
■ increased average number of employees during the year under review
higher bonus payments to employees due to successful financial year
salary increase of 2.5 per cent
Eurex
887.5
381.7
2015
2016
2015
2016
41
42
Deutsche Börse Group financial report 2016
-
to the capital outflow from Europe, even though Deutsche Börse registered high trading volumes imme-
diately before and after these events, as expected. Moreover, an increasing share of investments was
bound towards alternative investment forms. Index levels of the benchmark indices DAX and STOXX® did
not quite reach the annual average of the previous year, which was due, among other things, to the reve-
nue achieved with cash markets, Clearstream's domestic business, and the MD+S segment. Benchmark
indices only accelerated towards the end of the year after the US elections. However, equity index deriv-
atives generated constant growth rates throughout the year, while interest rate derivatives accelerated only
during the fourth quarter, following the turnaround in US interest rates. Deutsche Börse's commodities
business, operated by the European Energy Exchange (EEX) and its subsidiaries, clearly increased in all
areas, expanding its market position vis-à-vis competitors, and OTC trading. Regarding FX trading, ope-
rated by Deutsche Börse's subsidiary 360T, new customer business in particular provided the ground to
achieve growth in a decelerating market. With regard to the post-trade business, Clearstream took
advantage of rising interest rates in the US and the expansion of its international business, while the
domestic business – given the weaker German cash market – lagged the previous year. The technology
and market data business of Deutsche Börse Group (Market Data + Services segment) achieved growth,
in particular with the index business. The Group benefited from additional tailwinds in selected busi-
ness divisions, such as the lower valuation of the euro compared to the US dollar, or the stable economic
cycles prevailing in relevant economies (e.g. Germany, US).
-
Deutsche Börse Group's net revenue increased by 8 per cent in the 2016 financial year, with the Eurex
segment generating the strongest growth rate of 16 per cent. Net revenue of the Clearstream and Market
Data + Services segments increased by 5 per cent and 2 per cent, respectively, while the cash market
lacked 11 per cent behind the previous year, at very high trading activities and increased index levels.
Net revenue attributable to changes in the basis of consolidation totalled €41.3 million. Net revenue
is composed of sales revenue plus net interest income from banking business and of other operating
income, less volume-related costs.
Some of Deutsche Börse Group's markets allocated to the Eurex segment and traded on its systems sig-
nificantly increased their volume compared to the previous year. The number of futures and options con-
tracts traded on Eurex Exchange increased by 3 per cent, trading in electricity products soared by 46 per
cent, trading in gas products by 71 per cent, and emissions trading rose by 40 per cent. Net revenue in
the Eurex segment increased by a total of 16 per cent. Besides the higher number of contracts, this was
particularly attributable to the growth rate achieved by EEX, which more than doubled its net revenue
through organic growth, and to 360T, which was fully consolidated on an annual basis for the first time.
However, trading volumes declined on all cash market trading platforms. Moreover, the - compared
to the previous year - relatively low index levels had a negative impact on the realised revenues, given
that cash market fees are based on transaction value. Hence, net revenue decreased by 11 per cent.
The Clearstream segment provides post-trade services and generated solid growth rates during the year
under review: in the international business, and the Global Securities Financing (GSF) business, the seg-
ment grew by 3 per cent, and 8 per cent, respectively. Funds business generated stable revenues, while
the domestic business deteriorated by 7 per cent, in line with the weaker cash market. Net interest
income from the banking business grew by 84 per cent compared to the previous year based on the turn-
around in US interest rates and the charging of negative deposit rates.
Net revenue of the Market Data + Services segment was slightly above the previous year's figure -
the index business in particular developed strongly on a sustained basis and increased net revenue
by 12 per cent.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Operating costs were up 3 per cent year-on-year, including non-recurring effects of €143.2 million
(2015: €124.8 million). Non-recurring effects are partially related to the planned merger with London
Stock Exchange Group (LSEG) (€65.8 million), the integration of acquired companies or the devolving
of sold companies (€42.7 million), criminal proceedings against Clearstream Banking S.A. in the US
(€19.7 million) as well as efficiency programmes (€11.1 million). Adjusted for these non-recurring fac-
tors, operating costs increased by 1 per cent compared to the previous year. This year-on-year increase
was exclusively due to consolidation activities; excluding consolidation effects, costs slightly declined
by €15.1 million or 1 per cent (2015: €1,189.3 million).
Staff costs are a key driver for operating costs. Adjusted staff costs increased by €32.4 million to
€573.0 million (2015: €540.6 million) due to a series of reasons:
■ full consolidation of 360T on an annual basis
■
Eurex
39
✗
Transparency of securities financing transactions
✗
X
benchmarks and indices
BIS FX Code of Conduct
Capital Markets Union
X
X
X
X
X
X
Regulation on
x
(X)¹)
Became effective in 2012; clearing
obligation for derivatives
implemented successively from
Q2/2016 onwards; draft for a
revision expected in 2017
New proposal for recovery and
resolution for CCPs issued in
November 2016
Became effective in 2014;
application expected from November
✗
X
X
CSDR
1,317.4
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
BIS FX Code of Conduct
In May 2016, the Bank for International Settlements (BIS) released a new global Code of Conduct
designed to restore confidence in the foreign-exchange (FX) market following a number of scandals.
The code is an industry-wide attempt, developed in close cooperation with regulators, to lay down com-
mon standards for the FX market. Phase 1 laid its focus on banks, while phase 2, due to be published in
May 2017, will cover market issues such as electronic and high-speed trading and expand the original
text to cover governance and risk management.
Capital Markets Union
Following the economic, monetary and banking unions, the Capital Markets Union (CMU) is the next
step towards an integrated European financial market. The main objectives are to promote growth and
job creation on a sustainable basis, and to develop a diversified financial system which complements
bank-based financing with highly developed capital markets. Small and medium-sized enterprises in
Europe still face a credit crunch, and thus a funding bottleneck. In the current financial climate, it has
become increasingly difficult for them to obtain the financing they need to start and to grow. Another
objective is further harmonisation and financial integration to release inactive capital throughout Europe,
in order to offer savers a wider variety of investment forms and increase corporate financing opportuni-
ties at the same time. Current plans also include the simultaneous creation of an EU domestic capital
market, to promote cross-border investments and enable companies to tap different sources of finance,
independent of their domicile.
Overview of regulatory initiatives and their impact on Deutsche Börse Group's business areas
Cash
Market Eurex EEX
360T
Eurex Clear-
Clearing stream
IT &
MD+S
Status as at 31 December 2016
Financial market
infrastructure
MiFID II, MiFIR
xxxxxx
EMIR
Published in 2014; application to
start in 2018
X
X
✗
Recovery and resolution
plans for FMIS
2017 onwards
X
Entered into force on 30 June 2016;
application to start in 2018
which it intends to do, but has not done
yet there will be a two-year period during which the UK will negotiate an exit treaty with the EU; this
period may be extended. Until then, the UK will remain a full EU member. Hence, there will be no change
to the existing legal framework for the time being.
After the British referendum, a stable financial market connection with the United Kingdom seems to be
more important than ever before. From our perspective, Frankfurt should promote a stable connection
between the largest economy in Continental Europe and London, the largest financial hub in the world.
For further regulatory information, please visit Deutsche Börse Group's regulation webpages at
www.deutsche-boerse.com/dbg-en/regulation.
Banking regulations
Basel III
In consequence of the recent financial crisis and based on G20 decisions, the Basel Committee on
Banking Supervision (BCBS) has substantially amended and updated the preceding banking framework,
known as Basel II. Substantial cornerstones were published in 2011 and additional changes have been
issued since then.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Changes which have already been implemented include:
■ stricter definition of the term "capital"
■ increased capital levels
■ revised market risk framework
■introduction of a leverage ratio
The revised framework, known as Basel III, is supposed to be finalised by adding revisions of the credit
risk framework (standardised and model-based approaches) and the operational risk framework. The
final elements are currently under discussion but the outstanding items have not yet been agreed upon
by the BCBS members. How and when those elements will be implemented is currently unknown.
CRD IV/CRR
By issuing the Capital Requirements Directive (CRD IV) and the Capital Requirements Regulation (CRR),
which both became effective on 1 January 2014, the EU implemented the first cornerstones of the
Basel III framework. Implementation with some transitional and phase-in arrangements is scheduled to
be completed by 2019.
CRD V/CRR II
In November 2016, the European Commission proposed amendments to CRD IV and CRR which take
into account the ongoing changes regarding the Basel III framework and other elements of banking regu-
lation. The proposed legislative package also reflects changes related to legislation on the Minimum
Requirement for own funds and Eligible Liabilities (MREL) and the Total Loss-Absorbing Capacity (TLAC)
which leads to adjustments mainly affecting the Bank Recovery and Resolution Directive (BRRD).
Key elements of the legislative proposal beside the MREL/TLAC adjustments are:
■the introduction of a binding leverage ratio of 3 per cent
■the introduction of a binding net stable funding ratio (NSFR)
■ a revised framework for market risk
The legislative proposal is supposed to be finalised by early 2018 and will enter into force not before
2019. As the legislative process is at an early stage and the proposal is still subject to change, its impact
on financial market infrastructures cannot be assessed yet. Deutsche Börse Group takes an active part in
the discussion process regarding the modification of banking regulations, and thus addresses the regula-
tion's specific impact on financial market infrastructures with (limited) authorisation to engage in bank-
ing business. Furthermore, Deutsche Börse Group will continuously analyse the capitalisation of its regu-
lated entities, making any necessary adjustments in order to ensure that risks are adequately covered.
-
The EU bodies resolved a regulation on the transparency of securities financing transactions, which
complements the proposed regulation on the introduction of a segregated banking system that ring-
fences proprietary trading from the deposit and lending business. The regulation was published on
23 December 2015 in the Official Journal of the European Union. It introduces a requirement to
report securities lending and repo transactions to central trade repositories. In addition, it introduces
rules for repledging collateral and regulates the reporting requirements of investment fund providers
with securities lending activities. The impact of comprehensive reporting requirements for securities
lending transactions is different for Clearstream, Eurex Clearing AG and REGIS-TR S.A. For their own
securities financing transactions, higher expenditures are to be expected. The fact that transactions
must be reported to a trade repository however also bears business potential for REGIS-TR.
-
On 23 June 2016, the British population voted that the United Kingdom should leave the European
Union. Deutsche Börse Group deeply regrets this decision. Against this background, we strongly believe
that the economic connection between Continental Europe and the United Kingdom should be reinforced
by an integrated financial market structure.
X
✗
✗
Banks
CRD IV, CRR
✗
X
CRD V, CRR II
X
✗
SFTR
1) Not in scope of legislative proposal
Phase 1 published in May 2016;
Phase 2 expected in May 2017
Development of an action plan in
2015; implementation by 2019
Effective since 2014; transitional
regulations applicable until 2019
Finalisation expected in 2017/2018,
with subsequent implementation
throughout the EU
Entry into force in January 2016;
implementing measures (Level 2) still
outstanding
37
38
Deutsche Börse Group financial report 2016
The EU Commission presented an action plan in September 2015, with the aim of implementing it by
2019. It has become increasingly clear that the goal of a CMU may not be realised by one particular
initiative; instead, this goal requires a series of small steps, which – taken together - will most likely
have a significant impact. This is reflected in a package of more than 33 measures identified by the
European Commission, from which 15 initiatives have already been completed.
With Brexit advancing, the EU Commission officials continue to strongly back the CMU Action Plan,
arguing that the project is more than ever necessary for the remaining 27 Member States to improve
financing conditions, but also to function as a risk transfer mechanism between them. On 14 Septem-
ber 2016, the Commission announced its intention to accelerate the reform, launching a more ambitious
second phase in early 2017 to tackle some challenging long-term issues such as insolvency laws and
withholding tax procedures. In January 2017, the European Commission launched a CMU mid-term
review. This public consultation shall help shape the next phase in building a single market for capital
in Europe. Market participants were invited to provide feedback by 17 March 2017.
The CMU affects Deutsche Börse Group's entire value chain. Thus, the Group actively supports the proj-
ect and assumes an active role in the political debate. In fact, Deutsche Börse is already taking steps
to support the goals of the CMU (e.g. with its Deutsche Börse Venture NetworkⓇ or its FinTech Hub);
indeed, enabling growth in the real economy is an integral part of the company's mission.
Brexit
Once the UK has formally declared its intention to exit the EU
1,283.2
Deutsche Börse Group projected an increase in net revenue of between 5 and 10 per cent, and of ope-
rating costs in a corresponding range. Furthermore, the Group expected an increase in EBIT and in the
consolidated net profit of between 10 and 15 per cent. With an EBIT increase of 15 per cent, and an
increase in net profit for the period attributable to Deutsche Börse AG shareholders (consolidated net
profit) of 14 per cent on an adjusted basis, Deutsche Börse Group's performance lies at the upper end
of the projection range. Moreover, the Group achieved a ratio of interest-bearing gross debt to adjusted
EBITDA of 1.5 at Group level, exactly in line with the target value of 1.5. The adjusted tax rate was
27.0 per cent, as planned. In line with projections, the operating cash flow was clearly positive. Invest-
ments in the continued business in property, plant and equipment, as well as intangible assets in the
amount of €152.6 million were in line with the 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) consolidated net profit. According to the proposal made to the Annual General Meeting,
a figure of 54 per cent will be reached.
1,174.2
+8
Operating costs (adjusted)
0-5
+1
EBIT (adjusted)
+10-15
+15
Net profit for the period attributable to Deutsche Börse AG shareholders (adjusted)
+10-15
+14
45
46
Deutsche Börse Group financial report 2016
bond-buying programme and lowered its key interest rates once again in March 2016, cutting the
deposit facility rate to -0.4 per cent, and the rate for its main refinancing operations in the euro area to
O per cent. This was exacerbated by the persistently fragile economic situation in some countries and
the low inflation environment during much of the year, with deflationary trends in some cases. Higher
capital requirements - compared to the levels prevailing just a few years ago and stricter rules for
proprietary trading were additional burdens for investors.
-
Against this background, the Eurex segment once again improved on the previous year's result during
the year under review. In total, 1,727.5 million futures and options contracts were traded on Eurex
Exchange during 2016, up 3 per cent year-on-year (2015: 1,672.6 million). Commodities trading
flourished, posting double-digit growth rates for electricity and gas products, as well as in emissions
trading. The foreign-exchange business advanced slightly, against a decline in the overall market.
Net segment revenue increased by 16 per cent, operating costs rose by 8 per cent. €54.2 million (2015:
€49.8 million) were attributable to non-recurring effects, especially in the context of the planned merger
with LSEG and the integration of 360T and Powernext. 360T, which was consolidated in Q4/2015
accounted for €64.2 million of net revenue; its share in costs was €48.5 million. EBIT rose by 36 per
cent, adjusted for non-recurring effects by 26 per cent.
+5-10
Net revenue
%
%
146.5
Earnings per share (basic) in €
1.18
1.12
1.17
0.98
1.02
0.97
As in the previous year, Eurex equity index derivatives were the product group with the highest trading
volume. Contracts on the EURO STOXX 50Ⓡ index were by far the most commonly traded products
(374.5 million futures and 301.5 million options). The volume of Eurex's equity derivatives contracts
(single-stock options and futures) traded in the year under review declined by 7 per cent. The volume
of interest rate derivatives traded rose by 3 per cent during the year under review.
0.97
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Eurex segment
The performance of the Eurex derivatives segment largely depends on the trading activities of institutional
investors and proprietary trading by professional market participants. The segment's revenue is
therefore generated primarily from the combined transaction fees that Eurex charges for trading and
clearing derivatives contracts.
Revenue generated from Deutsche Börse Group's derivatives markets is primarily driven by the deriva-
tives traded on Eurex Exchange: equity index derivatives accounted for 42 per cent of net revenue,
interest rate derivatives 18 per cent and equity derivatives 4 per cent. Energy products traded on the
EEX and its subsidiaries and/or shareholdings, and derivatives based thereon (commodities), contributed
21 per cent; foreign-exchange trading on 360T® contributed approximately a further 6 per cent. The
"other" item (9 per cent) includes, among other things, the repo business, the participation fees paid by
trading and clearing participants, as well as interest income generated by the Group's clearing houses
from investing their clients' cash collateral. Deutsche Börse Group sold US options ISE to Nasdaq, Inc.
as at 30 June 2016. The sale represents a discontinued operation as defined in IFRS 5. In accordance
with IFRS 5 requirements, the Group is now reporting its financial key figures in its combined manage-
ment report without this discontinued operation. The prior-year figures for the 2015 financial year were
adjusted accordingly.
The derivatives market benefited from a trading environment that was very active overall. Even though
average volatility was lower than in the previous year, demand for Eurex products rose during the course
of the year as a whole - also due to changes in the political environment, such as the UK's “Brexit” ref-
erendum on the country's EU membership in June or the US presidential election in November. More-
over, the turnaround in US interest rates - initiated in December 2015 and affirmed in December 2016 -
stimulated business in interest rate derivatives during the second half of the year. Thanks to its broad
product portfolio, Eurex is in a prime position to service investors' hedging strategies in all situations.
Nonetheless, the macroeconomic environment continued to present challenges. The ECB continued its
Comparison of results of operations with the forecast for 2016
Forecast
Result
0.78
A rising proportion of Eurex segment revenue is contributed by relatively new products, such as volatility
derivatives or derivatives on Italian and French government bonds, which Eurex launched to gradually
supplement its range of benchmark products. Traded volumes in these products posted double-digit
growth rates during the year under review.
Segment key figures (adjusted)
Eurex
495.5
457.6
95.1
81.0
398.8
402.8
184.8
217.0
Operating costs
EBIT
430.3
71.1
106.0
383.3
343.7
225.2
184.6
3
540.6
180.3
401.6
746.4
Xetra
Clearstream
Market Data + Services
2016
€m
€m
2016
€m
2015
€m
2016
410.0
€m
2016
€m
2015
€m
Net revenue
1,032.2
887.5
164.6
184.8
781.9
2015
€m
179.2
2015
180.8
3.85
13
43
44
Deutsche Börse Group financial report 2016
The Group's financial result was €-74.6 million (2015: €–57.5 million). The change compared with
the previous year was due in particular to positive currency effects attributable to the first quarter 2015
in the amount of €18.1 million.
The effective Group tax rate 2016 was 27.7 per cent. Adjusted for non-recurring effects, it was 27.0 per
cent as expected.
The net profit for the period attributable to Deutsche Börse AG shareholders (hereinafter referred to as con-
solidated net profit) increased by 18 per cent compared with the previous year (adjusted: 14 per cent).
14
Non-controlling interests in consolidated net profit attributable to Deutsche Börse AG shareholders for the
period amounted to €25.5 million (2015: €35.7 million). Non-controlling shareholders of EEX group
received a considerable portion of net profits. The decline was due, among other things, to the full con-
solidation of STOXX in 2015.
Comparison of results of operations with the forecast for 2016
For 2016, Deutsche Börse Group originally expected an increase in net revenue between 5 and 10 per
cent given the cyclical market environment showing improving already in 2015, and the multiple struc-
tural growth initiatives being part of the "Accelerate" programme. Although the average stock market
volatility remained under the previous year's figure, and the low interest rate environment in Europe
prevailed throughout the year under review, the conditions described earlier in the “Business develop-
ments" section partly reflected the assumptions used in the forecast. Based on its highly diversified
business model, Deutsche Börse Group increased its net revenue by 8 per cent, and thus reached the
I mean of its forecast for 2016.
In 2015, Deutsche Börse Group introduced principles for managing operating costs in order to ensure
the scalability of the Group's business model. Since then, the Group has continuously managed operat-
ing costs relative to the development of net revenue. For 2016, the Group forecast an adjusted operating
costs growth range of between 0 and 5 per cent, depending on the net revenue increase. With the dis-
closure of a modest growth figure of 1 per cent, at a revenue increase of 8 per cent, the Group met
expectations.
Key figures by quarter (adjusted)
Q1
Q2
Q3
Q4
Basic earnings per share, based on the weighted average of 186.8 million shares, amounted to €3.87
(2015: €3.31 for an average of 185.0 million shares outstanding). Adjusted for the non-recurring in-
come items described above, basic earnings per share rose to €4.34 (2015: €3.85).
2016
€m
712.1
3.31
2,220.3
1,158.4
190.7
8
1
EBIT
1,108.2
935.6
18
17
1,220.2
15
Consolidated net profit for the period attributable
to Deutsche Börse AG shareholders
722.1
613.3
18
Earnings per share (basic) in €
3.87
1,064.6
2015
€m
810.8
4.34
2015
€m
290.6
333.9
EBIT
332.3
305.8
325.6
273.5
286.0
275.7
265.9
219.4
Consolidated net profit for the period
attributable to Deutsche Börse AG
shareholders
221.3
218.5
2016
€m
205.6
276.3
273.4
342.9
Net revenue
2015
€m
€m
275.8
610.5
564.7
600.7
2015
€m
547.1
558.5
555.0
619.0
553.5
Operating costs
2016
€m
279.8
260.5
2016
71.1
-34
106.0
84.9
63.8
102.4
21
-33
96.7
Cash market: trading volume (single-counted)
Xetra®
€m
€bn
%
1,262.1
1,505.8
-16
%
€m
-11
EBIT
Operational costs
€bn
184.8
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
%
1) Incl. repo business and net interest income from banking business
2) Consolidation in Q4/2015
Net revenue
2016
2015
2016
1) The position "Trading" includes the Xetra® electronic trading system,
Börse Frankfurt as well as structured products trading.
financial year 2015 (€3.9 million) and amounted to €7.3 million in the year under review, amongst oth-
ers driven by the planned business combination with LSEG. As a result of significantly higher costs, EBIT
decreased by 34 per cent.
During the year under review, cash markets in Europe failed to match the high trading volumes seen in
2015's record year. - a development which Deutsche Börse and its marketplaces Xetra, the Frankfurt
Stock Exchange, and Tradegate, were not immune to either. In the previous year, cash markets had bene-
fited strongly from the launch of the ECB's bond-buying programme (as part of its quantitative easing
policy, QE), and from strong market liquidity. This effect was reduced during the second year of QE, and
investors were increasingly looking at alternative investment opportunities again. This was exacerbated
by the continued fragile state of economies in Europe, plus the UK's decision to leave this economic area
- developments which dented investors' confidence in the European capital markets. As a result, US in-
vestors in particular pulled capital from Europe, shifting investments to other markets.
In the 2016 financial year, securities with a total volume of €1.38 trillion were traded on Deutsche Börse
Group's cash markets (2015: €1.64 trillion). They included shares and bonds from German and inter-
national issuers, exchange-traded funds (ETFs) and exchange-traded commodities (ETCs) as well as
units in actively managed mutual funds and structured products. Institutional, private and international
investors primarily trade on Xetra, the electronic trading platform. As a result, Xetra generates by far the
highest trading volumes within the segment. In addition to Xetra, Deutsche Börse operates trading at the
Frankfurt Stock Exchange and holds a 75 per cent stake in Tradegate Exchange GmbH - Germany's lead-
ing stock exchange for retail investors. At the end of the reporting year, Deutsche Börse increased its stake
in Tradegate AG Wertpapierhandelsbank, which holds the remaining shares in Tradegate Exchange, from
just under 15 per cent to just under 20 per cent, subject to regulatory approval.
Deutsche Börse has been operating Europe's leading marketplace for ETFs since 2000. It offers investors
the largest selection of ETFs of all European exchanges: as at 31 December 2016, 1,133 ETFs were
listed (2015: 1,116 ETFs). Assets under management held by ETF issuers totalled €411.6 billion at the
end of the year, a year-on-year increase of 17 per cent (31 December 2015: €351.6 billion). Trading
volumes declined by 16 per cent to €158.0 billion (2015: €188.9 billion). The most heavily traded ETFs
are based on the European STOXX equity indices and on the DAX index.
164.6
Xetra-Gold, a bearer bond issued by Deutsche Börse Commodities, benefited from the ECB's low interest
rate policy as well as from investor unrest following the UK's Brexit referendum. Xetra-Gold has generated
Financial key figures
Net revenue
Operating costs
EBIT
EBIT (adjusted)
2016
2015
Change
€m
€m
Xetra segment: key figures
Financial key figures
%
2015
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
securities depository (CSD), Clearstream services the market for German securities; this business accounts
for 15 per cent of net revenue. Investment fund services are the segment's third pillar, accounting for
16 per cent of net revenue. Using Clearstream's VestimaⓇ fund processing platform, clients can manage
settlements and custody for their entire fund portfolio. Net revenue from the Global Securities Financing
(GSF) franchise - which encompasses triparty repo, GC Pooling®, securities lending and collateral man-
agement - contributed 9 per cent of the segment's net revenue. Net interest income from Clearstream's
banking operations accounted for 8 per cent of net revenue.
Within the ICSD and CSD business, custody services provide the greater contribution. Net revenue in
this business is mainly driven by the volume and value of securities under custody, which determines
the deposit fees. The settlement business - the second pillar - depends heavily on the number of settle-
ment transactions processed by Clearstream, both via stock exchanges and over the counter (OTC).
During the year under review, Clearstream saw growth in its ICSD business, in its Global Securities Finan-
cing services and in its net interest income from banking business. The segment increased its net revenue
by 5 per cent. Operating costs declined by 2 per cent. Non-recurring effects totalled €47.9 million in 2016.
In addition to costs for the planned business combination with LSEG they were attributable in particular
to criminal investigations against Clearstream Banking S.A. in the US (2015: non-recurring effects of
€54.9 million). EBIT thus increased by 16 per cent, adjusted for non-recurring effects of 12 per cent.
The Clearstream segment grew its ICSD business by 3 per cent: the value of international assets held in
custody (which predominantly comprise bonds traded on the OTC market) increased slightly year-on-year,
as did the number of transactions.
Clearstream segment: key figures
2016
2015
Change
Financial key figures
The segment provides the post-trade infrastructure for the Eurobond market, and offers custody services
for domestic securities from more than 50 markets worldwide. In doing so, Clearstream ensures that
once a trade has been executed, cash and securities change hands. Clearstream is responsible for securi-
ties issuance, settlement, management and custody. As an international central securities depository
(ICSD), Clearstream provides these settlement and custody services for securities held in Luxembourg.
The ICSD business contributed 52 per cent to net revenue during the year under review. As a central
Net revenue
€m
781.9
746.4
5
Operating costs
EBIT
EBIT (adjusted)
446.7
2015
457.7
€m
Change
Clearstream segment
-
2016
Eurex segment: key figures
EEX is the leading European energy exchange: it develops, operates and connects secure, liquid and
transparent markets for energy and commodity products. The products traded on markets operated by
EEX Group are electricity, natural gas, environmental products (such as emission allowances), agricul-
tural products, as well as other commodities (in particular, freight rates, bunker fuel, and metals). EEX
completed additional inorganic growth initiatives during 2016, thus strengthening its position as the
central market for energy, energy-related products and commodities in Europe. The most important stra-
tegic steps in 2016 included the acquisition of a majority stake in Power Exchange Central Europe a.s.
(PXE), based in Prague, which is EEX Group's first presence in the East European trading markets; the
cooperation between Powernext and Austrian Central European Gas Hub AG (CEGH) for the joint devel-
opment of gas markets in Austria, as well as in Central and Eastern Europe; and the full acquisition of
Danish gas exchange Gaspoint Nordic A/S. Moreover, EEX Group succeeded in markedly growing its
market share, compared to off-exchange markets, in the relevant products. On this basis, EEX Group
posted substantial double-digit growth rates in its three core business segments during the 2016 financial
year: up 46 per cent in the spot and forward electricity markets, up 71 per cent in the gas market, and
up 40 per cent in emission rights trading.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Frankfurt Stock Exchange
43.9
54.6
-19
Tradegate
71.0
1 March 2017. Companies seeking a listing in the new SME segment must fulfil certain minimum criteria:
besides quantitative requirements, the focus here is on transparency and visibility - e.g. through manda-
tory research reports.
75.3
49
50
Deutsche Börse Group financial report 2016
the most turnover among all ETCs traded on Xetra: aggregate order book turnover was around €2.7 billion
in 2016. Likewise, assets under management in Xetra-Gold stood at a record level of approximately
€4.2 billion as at 31 December 2016.
The number of IPOs declined on a global scale during 2016, reflecting political and economic uncer-
tainty. Accordingly, IPO activity at Frankfurter Wertpapierbörse (FWBⓇ, the Frankfurt Stock Exchange)
showed a mixed picture, with 19 new companies listed (2015: 24 new listings), bringing aggregate
new issue volume to around €5.2 billion (2015: €7 billion). Despite the challenging market environ-
ment for IPOs, innogy SE, a subsidiary of RWE AG, managed to place the biggest IPO since 2000 in
early October: a total of 555.6 million shares were admitted to trading, bringing the issue volume to
some €5 billion.
-
The purpose of an exchange is to provide financing to, and foster growth for the real economy – this is at
the very heart of an exchange's business. This is why Deutsche Börse has decisively expanded the pre-
IPO business in its “Pre-IPO and Growth Financing" franchise. Alongside established on-exchange busi-
ness (including trading in equities, bonds and other securities, as well as IPOs), this business has (once
again) formed part of a separate Executive Board portfolio since 2016. Over a medium-term horizon,
coordinated initiatives in the pre-IPO area are designed to lead to IPOs at the Frankfurt Stock Exchange.
-
It is Deutsche Börse's goal to establish an ecosystem for growth, designed to facilitate a better flow of
investments and to enhance financing options for enterprises of any size (whether it is start-ups, small
and medium-sized enterprises (SMEs), or large corporate groups). One of the building blocks in this
development is the FinTech Hub in Frankfurt/Main, which supports start-ups on the Frankfurt financial
marketplace and thus fosters a lively entrepreneurial culture. Launched in 2015, Deutsche Börse Ven-
ture Network is designed to support companies in their growth phase which require more substantial
follow-up financing. It brings these enterprises together with international investors, facilitating the rais-
ing of capital and enabling companies to build an extensive network – paving the way for their IPO.
At the end of September 2016, Würzburg-based va-Q-tec was the first Venture Network company to
go public, with an IPO in the Prime Standard segment. The exclusive Venture Network online platform
allows investors and entrepreneurs to establish initial contacts, exchanging information within a pro-
tected area. Deutsche Börse Venture Network is continuously growing: at the end of the reporting year,
120 growth companies and 211 investors were active on the platform. Since the launch of the Venture
Network, enterprises have raised around €1 billion in growth financing. With the new Venture Match
service, introduced in September 2016, experts from Deutsche Börse now offer a more targeted match-
ing of investors and companies, thus simplifying and enhancing access to growth capital as well as
investment opportunities.
In its listing business, Deutsche Börse has announced the launch of Scale, a new segment for established
small to medium-sized and predominantly German - companies. The segment started operations on
-6
Index derivatives
837.7
402.7
Financial derivatives: trading volume on Eurex Exchange
Derivatives¹)
26
430.3
540.6
EBIT (adjusted)
36
381.7
517.6
8
507.4
549.7
16
887.5
Gas
1,756.2
1,024.9
71
Emissions trading
949.9
677.6
40
Equity index derivatives²)
Interest rate derivatives
Equity derivatives²)
m contracts
-2
46
3,061.5
4,455.6
Electricity
%
TWh / m t CO2
TWh / m t CO2
Commodities: trading volume on EEX³) 4)
-7
Foreign exchange business: traded volume on 360T®
311.8
3
509.1
526.6
7
894.0
3
1,672.6
1,727.5
%
m contracts
291.1
Average daily volume on 360T®
€bn
57.6
€bn
164.6
215.9
Commodities (EEX)
16.7
Other
175.3
29.7
15.4
Listing
37.9
13.6
Equity derivatives
Central counterparty
26.7
for equities
189.7
1,032.2
Interest rate derivatives
183.3
124.5
105.8
Trading¹)
36.3
436.5
74.2
15.7
64.2
55.3
%
4
1) The total deviates from the sum of individual figures since it includes additional traded products, such as ETF, volatility, currency and precious metals derivatives.
2) Dividend derivatives are assigned to equity index and equity derivatives.
3) Volumes traded on EEX - in terawatt hours (TWh) for power and gas contracts, and in million tonnes of CO₂ for emissions trading
4) Including volumes traded in the power segment on EPEX, APX/Belpex (or SEEPEX, since 17 February 2016), and in the gas segment on Powernext and Gaspoint
Nordic (the latter added in 2016)
47
48
Deutsche Börse Group financial report 2016
Global foreign exchange trading was characterised by declining traded volumes during the year under
review, due to various factors including political uncertainty, changes in the regulatory framework, and
reduced prime brokerage capacity, which burdened trading activity. Nonetheless, 360T®, one of the
world's leading foreign-exchange platforms (winning awards such as “Best Professional E-trading Venue"
and "Best e-FX Platform for Corporates"), which was acquired in 2015, managed to buck this trend,
increasing its foreign-exchange trading volumes by 4 per cent. This growth was mainly driven by trading
activity of new clients. 360T continued to grow its client portfolio across all regions and market seg-
ments; its integration into Deutsche Börse Group is making dynamic progress. During the year under
review, this included joint client calls and joint cooperation in developing new offerings – for example,
the FX trading order book, FX futures products and preparing a clearing offer for FX OTC contracts.
FX (360T)2)
Xetra segment
Net revenue in the Xetra segment declined by 11 per cent during the year under review. Operating costs
rose by 21 per cent, mainly due to non-recurring effects. These non-recurring effects had burdened the
Net revenue in the Eurex segment
Net revenue in the Xetra segment
€ millions
€ millions
1,032.2
88.0
Other¹)
184.8
17.0
887.5
The Xetra segment generates most of its net revenue from trading and clearing cash market securities.
The primary sales driver, accounting for 64 per cent, was net revenue from trading. The central counter-
party (CCP) for equities and exchange-traded products (ETPs) operated by Eurex Clearing AG contributed
16 per cent to the segment's net revenue; the net revenue of the CCP is determined to a significant
extent by trading activities on XetraⓇ. Listing revenue (which accounts for around 9 per cent) is primarily
generated from existing listings and new admissions. The “other” item (accounting for a total of 10 per
cent of net revenue) includes, among others, net revenue generated by Eurex Bonds.
335.4
Other non-cash income amounted to €52.3 million (2015: other non-cash expenses of €7.0 million);
this was, in particular, due to income from the sale of shares in BATS Global Markets Inc. The trans-
action generated cash of €80.3 million, reported under cash flows from investing activities.
16
233.2
-6
191.4
168.4
14
225.2
184.6
22
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Taking CCP positions into account, cash flow from operating activities totalled €1,621.4 million (2015:
€10.1 million). The change in CCP positions was influenced by non-delivered GC Pooling transactions in
a total amount of US$869.5 million; these could not be delivered on the due date (31 December 2015),
but only on 4 January 2016. The reason was a clearing participant's failure to provide the necessary
cash in good time.
Cash inflows from investing activities amounted to €578.5 million in the 2016 financial year (2015: cash
outflows of €1,592.3 million). These were attributable, in particular, to the sale of shares in ISE Group,
which generated cash of €916.3 million (adjusted for cash and cash equivalents sold of €13.0 million
that were originally included in the cash amount). Furthermore, the sale of shares in Infobolsa S.A. gen-
erated cash of €1.1 million (adjusted for cash and cash equivalents sold of €7.1 million).
In addition, cash inflows of €149.9 million (2015: €208.3 million) resulted from maturities and disposals
of securities with an original maturity of more than one year.
Cash outflows of €178.9 million (2015: €815.5 million) were due to the acquisition of long-term
financial instruments.
At €164.9 million, investments in intangible assets and property, plant and equipment were above
the prior-year level (2015: €154.5 million); most were made in the Clearstream and Eurex segments.
Clearstream's investments related primarily to the expansion of its settlement and collateral management
systems, while Eurex invested in its trading and clearing systems.
Consolidated cash flow statement (condensed)
2016
2015
€m
€m
Cash flows from operating activities (excluding CCP positions)
856.6
Cash flows from operating activities
1,621.4
796.6
10.1
Cash flows from investing activities
578.5
-1,592.3
218.6
2
401.6
410.0
Despite the deconsolidation of MNI and Infobolsa, Market Data + Services slightly increased net revenue
during the year under review. Operating costs showed a significant marked decline, due to deconsolidation
(amongst other factors), but also through strict cost management: they included non-recurring effects of
€33.8 million (2015: €16.2 million), largely related to the planned business combination with LSEG as
well as to the integration respective disintegration of companies (STOXX, MNI). Accordingly, the segment's
EBIT rose considerably by 14 per cent, excluding non-recurring effects by 22 per cent.
The net revenue of the segment comprises the business areas Data Services (40 per cent), Index (28 per
cent), and Infrastructure Services (32 per cent).
The Data Services business area mainly involves the distribution of licences for real-time trading and
market signals, and for the provision of historical data to banks, trading firms, and fund management
companies. 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 its partner exchanges. Business remained
largely stable during the year under review, despite the deconsolidation of MNI.
In its Index business area, which it conducts through its STOXX Ltd. subsidiary, Deutsche Börse gene-
rates revenue from calculating and marketing indices and benchmarks, which banks and fund manage-
ment companies use as underlying instruments or benchmark references for financial instruments and
investment vehicles. The extensive range of indices offered by STOXX Ltd. provides issuers with a wealth
of opportunities for creating financial instruments for most diverse investment strategies. The Index busi-
ness continued its growth path, driven especially by a vivid issuance of structured products on STOXX
indices that are designed for investors to realise their investment strategies and higher trading volumes of
Eurex contracts based on STOXX and Deutsche Börse indices. Conversely, assets under management in
ETFs declined, due to investors withdrawing capital particularly from those ETFs which track the Euro-
pean capital markets these make up a large part of the STOXX portfolio.
-
The Infrastructure Services business area generates revenue primarily from connectivity services for trad-
ing and clearing participants. Revenue generated from these services rose during the year under review,
thanks to the segment's success in convincing a constantly rising number of clients to opt for data con-
nections with higher bandwidth. In addition, Infrastructure Services provides development and opera-
tional services for technology clients outside the Group - such as partner exchanges, banks acting as
Designated Sponsors, or the German regional stock exchanges. Deutsche Börse operates technology on
53
54
Deutsche Börse Group financial report 2016
behalf of partner exchanges in Dublin, Vienna, Sofia, Ljubljana, Prague, Budapest, on Malta and the
Cayman Islands, as well as domestic exchanges operated by brokers and banks in Frankfurt/Main,
Berlin, Dusseldorf, Hamburg/Hanover and Munich.
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 2016. Mainly due to the increase in
net income and equity, return on shareholders' equity remained largely unchanged at 17.3 per cent
(2015: 17.0 per cent) in the 2016 financial year. Adjusted for the non-recurring effects described in the
"Results of operations" section, the return on equity amounted to 19.4 per cent (2015: 19.6 per cent).
Financial position
Cash flows from financing activities
Cash flow
Deutsche Börse Group's cash flow from operating activities is relevant only to a limited extent as it
includes in particular CCP positions, which are subject to significant fluctuations on the reporting date.
Due to this, the following refers in particular to the cash flow from operating activities excluding CCP
positions. In the 2016 financial year, Deutsche Börse Group generated €856.6 million (2015: €796.6 mil-
lion) in cash flow from operating activities, excluding changes in CCP positions on the reporting date.
Moreover, Deutsche Börse Group paid taxes in the amount of €277.8 million during the 2016 financial
year (2015: €207.7 million). Higher tax payments were partly attributable to the sale of shares in U.S.
Exchange Holdings, Inc.
Market Data Services segment: key figures
Financial key figures
Net revenue
Operating costs
EBIT
EBIT (adjusted)
2016
€m
2015
€m
Change
%
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 2016 amounted to €–146.9 million (31 December 2015:
€-1,579.4 million). The technical closing-date item is negative especially due to financial assets with a
maturity of more than three months. The latter do not qualify as cash and cash equivalents and the cash
flows associated with them have been allocated to investing activities. Cash and bank balances amounted
to €1,458.1 million as at 31 December 2016 (31 December 2015: €711.1 million).
-848.8
76.1
Cash and cash equivalents as at 31 December
€600 m
7.4
7.4
€600 m
14.8
14.8
€500 m
8.7
2.0
€600 m
17.2
US$290 m
9.3
€m
18.5
€35 m 20162)
0.1
4.5
4.5
53.3
50.8
1,345.7
25.3
1,180.7
23.2
1) Bought back with the proceeds from the sale of ISE mid-2016
2) Annual average
3) EBITDA / interest expense from financing activities (includes 50 per cent of the interest on the hybrid bond)
288.8
€142 m 20152)
The core business of the Market Data + Services segment is the distribution of capital market informa-
tion, technology and infrastructure services to clients worldwide. These services include real-time trading
and market signals, as well as indices such as EURO STOXX 50Ⓡ and DAX. Capital market participants
subscribe to this information, or licence it for their own use, processing, or dissemination. The segment
generates much of its net revenue on the basis of long-term client relationships; it is relatively indepen-
dent of trading volumes and capital markets volatility. The assets and liabilities related to its MNI subsidi-
ary were sold by way of an asset deal, effective 8 July 2016. Deutsche Börse AG already sold its 50 per
cent stake in Infobolsa S.A. in February.
€m
2016
-146.9
-1,579.4
Cash and other bank balances as at 31 December
1,458.1
711.1
55
56
Deutsche Börse Group financial report 2016
Cash outflows for the acquisition of subsidiaries totalled €3.9 million (2015: €641.5 million). Cash out-
flows included €676.6 million for the acquisition of shares in 360T in the previous year. Full consolida-
tion of Powernext and EPEX at 1 January 2015 increased cash by €40.1 million. Since no purchase
price was payable in the acquisition of Powernext and EPEX during the business year 2015, there were
no cash outflows.
Cash outflows stood at €848.8 million in the 2016 financial year (2015: cash inflows of €76.1 million).
During the 2016 financial year Deutsche Börse AG repaid series B and C of private placements issued in
2008, prior to maturity and within the scope of the ISE acquisition; this led to cash outflows of €321.6 mil-
lion. In the previous year, cash outflows of €150.5 million were attributable to the maturity of series A of
private placements issued in 2008.
The acquisition of a 49.9 per cent stake in STOXX Ltd. led to aggregate cash outflows of €653.8 million
in the 2015 financial year. This transaction was financed through the issue of a debt security with a
nominal amount of €600.0 million. Moreover, the company placed Treasury shares in the amount of
€200.0 million as well as a bond with a nominal amount of €500.0 million within the scope of the
360T acquisition.
Moreover, the company placed commercial paper of €400.0 million (2015: €2,100.0 million), and
paid out €495.0 million (2015: €2,065.0 million) due to maturing commercial paper issues. No com-
mercial paper was outstanding as at 31 December 2016.
2015
In addition, Deutsche Börse AG distributed €420.1 million in dividends for the 2015 financial year
(dividends for the 2014 financial year: €386.8 million).
Deutsche Börse Group's interest coverage ratio
Interest expense from financing activities
Fixed-rate bearer bond (term until March 2018)
Fixed-rate bearer bond (term until October 2022)
Fixed-rate bearer bond (term until October 2025)
Fixed-rate bearer bond (hybrid bond)
Private placements¹)
Commercial paper
Other interest expense
Total interest expense (incl. 50 per cent of the hybrid coupon)
EBITDA (adjusted)
Interest coverage³)
Issue volume
As in previous years, the Group assumes it will have a strong liquidity base in financial year 2016 due
to its positive cash flows from operating activities, adequate credit lines and flexible management and
planning systems.
Market Data + Services segment
7.0
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Value of securities under custody (average value during the year)
1.9
1.8
5
Global Securities Financing
Outstanding volume (average value during the year)
Net interest income from banking business
Average daily cash balances")
1) Includes some €1.5 billion currently or formerly blocked by EU and US sanctions (2015: €1.5 billion)
€bn
€bn
%
515.9
598.6
-14
€bn
€bn
%
13.1
%
€tn
€tn
Investment Funds Services
383.3
At the same time, they can benefit from the ICSD's securities lending and collateral management services.
For instance, it is now possible to settle triparty repos using commercial bank money (i.e. in multiple
currencies) or central bank money (in euros), with positions being held with the ICSD and CSDs. On
6 February 2017, Clearstream Banking AG and LuxCSD S.A. migrated - on schedule and in full – to
the ECB's settlement systems. Clearstream's systems, which were initially running in parallel during the
test phase, have been switched off. The segment envisages at least compensating for lost settlement
fees, through a sensitive pricing policy and additional offers to clients.
343.7
12
Business key figures
€tn
€tn
%
International business (ICSD)
12.4
Value of securities under custody (average value during the year)
6.7
1
Domestic business (CSD)
€tn
€tn
%
Value of securities under custody (average value during the year)
4.4
-7
6.8
5
4.8
410.0
Index
51
52
Deutsche Börse Group financial report 2016
The domestic CSD business reflects the business development on the German cash markets, whereby
custody volumes are largely determined by the market values of equities, funds and structured products
traded. Given lower trading activity, settlement volumes were down 8 per cent, whilst the value of assets
held in custody declined by 7 per cent, due to lower average index levels compared to the previous year.
In the funds business, Clearstream saw slight increases in the volume of assets held in custody, reflect-
ing the positive overall performance on the international fund markets throughout the year. However, the
number of transactions settled was down 5 per cent. Clearstream owns Clearstream Global Securities
Services (CGSS) based in Cork, Ireland, previously Citco's custody operations for financial institutions'
hedge funds.
Average outstanding volumes in GSF decreased by 14 per cent. After the ECB flooded markets with
liquidity within the scope of its quantitative easing policy, volumes were down significantly, especially
in GC Pooling. At the same time, order flows shifted towards smaller, higher-priced lending volumes,
raising GSF net revenue overall.
Average cash customer deposits were up 5 per cent year-on-year. Besides the effect of this increase in
volume, net interest income benefited from the charging of negative interest rates to clients (in some
cases with a mark-up). In addition, the US Federal Reserve had raised its US dollar interest rates for the
first time after a long period in December 2015, following up with another increase in December 2016.
This provided an added boost to net interest income (over and above the higher liquidity levels), given
that around 49 per cent of cash deposits is denominated in US dollars.
The TARGET2-Securities (T2S) settlement service, designed by the Eurosystem, commenced operations
in 2016. Once T2S is fully functional in 2017 - according to schedule - it will harmonise cross-border
securities settlements in central bank money throughout Europe. Directly following the launch date, Clear-
stream provided its clients with the full range of benefits that the new settlement system offers. This ena-
bles clients to bundle their assets in a single pool, using the respective CSD as their access point to T2S.
Net revenue in the Clearstream segment
Net revenue in the Market Data + Services
segment
€ millions
€ millions
781.9
746.4
34.1
62.6
Net interest income from
banking business
115.0
67.7
73.0
Global Securites Financing
401.6
124.1
Domestic business (CSD)
124.3
Investment Funds Services
115.2
132.8
124.3
103.1
Infrastructure Services
396.2
International business (ICSD)
406.9
2015
2016
2016
138.0
160.5
Data Services
162.2
2015
Deutsche Börse shares
EBIT margin, based on net revenue
%
50
39
49
42
46
Tax rate
%
26.014)
26.08) 13)
26.0
27.0
%
22
21
21
2016)
1916)
26.07
Return on shareholders' equity (annual average) 15)
€m
€
Interest coverage ratio
%
15.26)
20.16)
26.06)
23.2¹)
25.3
Deutsche Börse AG: Standard & Poor's
Rating
AA
AA
Clearstream Banking S.A.: Standard & Poor's
Rating
AA
AA
1.5
1.96) 11)
1.56)
1.56)
46.21
25
60.20
59.22
81.39
77.54
Average market capitalisation
Year-end closing price
Rating key figures
8.5
10.0
10.8
14.7
14.0
Gross debt/ EBITDA
1.66)
€bn
27
2.10
2213)
€m
Non-current interest-bearing liabilities
8,796.9
3,268.0
3,169.6
€m
Equity
5,113.9
€m
Non-current assets
Consolidated balance sheet
1,621.4
10.1
677.3
1,737.43)
728.3
€m
Cash flows from operating activities
Consolidated cash flow statement
3.87
722.1
613.3")
3.31¹
762.3
4.14
2.60
3.44
€
Earnings per share (basic)
478.4
645.0
707.7
1,521.9
11,267.2
3,752.1
1,428.53) 2,546.5
14,386.9
3,695.1
216)
%
Personnel expense ratio (staff costs / net revenue)
4,731
4,460¹)
3,911
3,515
3,416
Employees (average annual FTEs)
5412)
55
2.354)
2.25
2.10
586)7) 11)
619) 10)11)
585) 6) 7) 8)
%
Dividend payout ratio
Deutsche Börse AG shareholders
2.10
€
Dividend per share
Performance indicators
2,284.7
4,624.5
Fitch
935.6") 1,108.2
Net profit for the period attributable to
11,940.4
239)
Rating
515.9
AA
Deutsche Börse Group employee age structure
Deutsche Börse Group employee age structure
by gender
3,080
-1,317.4
Market Data + Services
6
314
Ireland
2,397
2,443
Clearstream
15
As at 31 December 2016, 70 per cent of Deutsche Börse Group employees were graduates (2015:
69 per cent). 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 abroad. In the area of continuing professional development, the
Group invested an average total of 3.8 days per employee in 2016 (2015: 3.6 days) and, among other
things, conducted 1,524 internal training events (2015: 1,079 internal training events). Of these, 40 per
cent were on business-related issues, 26 per cent covered specialist topics, 10 per cent dealt with the
work-life balance, 24 per cent were on IT subjects and were part of induction training. The digital
793
31 Dec 2015
1,651
326
1,851
323
Xetra
21
1,076
Luxembourg
Eurex
43
2,226
Germany
31 Dec 2016
%
31 Dec 2016
Czech Republic
Employees may attend sports or relaxation courses. The purpose of these measures is to achieve a good
work-life balance. One of the objectives pursued with these measures is to ensure that employees remain
healthy, in spite of high workloads, and to keep sickness levels within the company as low as possible.
For instance, the company assigns increased importance to the fact that employees take their annual vaca-
tion during the course of the year. The sickness ratio within Deutsche Börse Group amounted to 2.9 per
cent in the year under review (2015: 3.1 per cent).
A total of 67 male and 81 female employees took parental leave in financial year 2016, thereof one male
and one female in management positions. In the reporting period, 61 male and 53 female employees
returned to the company after taking parental leave, while three male and five female employees left the
company after their parental leave. Deutsche Börse Group supported its employees by subsidising child-
care in the amount of €791 thousand in the reporting period (2015: €789 thousand). All employees
receive a monthly net amount of up to €255.65 per child until it is six years old or starts school.
■ reservation of places for employees' children aged between six months and three years at a day care
centre in Eschborn, whereby the number of dedicated places depends on demand within the company
■ an "Elder and Family Care" programme to facilitate support for family members requiring care
■the option to take sabbaticals, used by three employees in Luxembourg and six in Prague in 2016
559
726
United Kingdom
167
3
Total
5,176
5,100
Rest of Europe
302
6
North America
97
2
South America
2
0
Asia
192
4
Middle East
7
0
Total
5,176
100
65
66
Deutsche Börse Group financial report 2016
Employees by segment
AA
Employees per countries/regions
■ childcare service for emergencies and during school holidays (a service used in Germany on a total of
78 days)
Clearstream
1,727.5
1,672.6")
2,097.9
2,191.9
2,292.0
m
Number of contracts
Eurex®
1,377.0
1,635.7
1,282.6
1,157.6
Value of securities deposited (annual average)
1,160.2
Trading volume (single-counted) 17)
Xetra, Frankfurt Stock Exchange and Tradegate
Market indicators
AA
AA
AA
AA
AA
AA
AA
AA
AA
33 3
€bn
€bn
11,111
11,626
■ option to work from home (teleworking)
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:
To recruit and retain the best talent for the company, Deutsche Börse Group offers flexible working time
models. Including part-time employees, there was an average of 4,731 full-time equivalents during the
year (2015: 4,460). As at 31 December 2016, the proportion of part-time employees was higher in the
general workforce than in management, and it was higher among women than among men.
Deutsche Börse Group employs an international workforce at 37 locations worldwide: as at 31 Decem-
ber 2016, Deutsche Börse Group had 5,176 employees (31 December 2015: 5,100), while the aver-
age number of employees in the reporting period was 5,095 (2015: 4,760). The decrease in staffing
levels was predominantly attributable to the deconsolidation of International Securities Exchange Hold-
ings, Inc. (-183), Infobolsa S.A. (-79) and Market News International Inc. (-91) and their respective
subsidiaries. On the other hand new jobs were created (+246) mainly in the context of the "Accelerate"
growth initiatives and other strategically important projects, such as IT sourcing and outsourcing initia-
tives.
Committed, highly skilled employees are one of the cornerstones of Deutsche Börse Group's business
success. Their dedication, flexibility and will to deliver outstanding performance shape its corporate
culture. Deutsche Börse Group aims to make sure that staff with these qualities continue to join the
company in the future and, ideally, that they stay for the long term. It does this by adopting a sustain-
able human resources policy. Within the scope of its "Accelerate" programme, the Group increased its
emphasis upon a high-performance culture, with a more distinct focus on clients' needs and on innova-
tion. This culture is supported by a remuneration system for executive staff which incorporates growth,
performance, and financial indicators to a higher extent than before.
Employees
Non-financial key performance indicators
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Non-financial key performance indicators
On 3 March 2017, the Executive Board of Deutsche Börse AG communicated that its indirectly held sub-
sidiary European Energy Exchange AG has reached an agreement in principle with the shareholders
of Nodal Exchange Holdings, LLC on the purchase of all shares in Nodal Exchange Holdings, LLC. The
total purchase price for all shares amounts to a low nine-digit sum (in US dollars). The execution of
binding agreements is intended to take place shortly. The closing of the acquisition is still subject to cus-
tomary conditions such as required regulatory approvals.
On 2 March 2017, Deutsche Börse Group announced that it had completed the divestiture of its remain-
ing shareholding in BATS Global Markets, Inc. (BATS). After receiving a cash and share consideration
as part of the acquisition of BATS by Chicago Board Options Exchange, Inc. (CBOE), the CBOE shares were
sold in the market. Deutsche Börse AG expects a positive impact on its net profit for the period attributa-
ble to Deutsche Börse AG shareholders of around €68 million in the first quarter of 2017. In Q4/2016,
Deutsche Börse already realised a net profit contribution of around €23 million by selling one third of its
stake in BATS. This stake resulted from a participation of the divested International Securities Exchange
Holdings, Inc. (ISE) in Direct Edge Holdings, LLC, which later merged with BATS.
The parties will await the further assessment by the European Commission and currently expect a
decision by the European Commission on the merger of Deutsche Börse AG and LSEG no later than
3 April 2017.
Following the market test in relation to the remedy proposal of 6 February 2017, the European Commis-
sion has raised new concerns regarding the viability of LCH SA as a divestment business in relation to
access to bond and repo trading feeds currently provided for by MTS S.p.A., an Italian regulated elec-
tronic trading platform. The European Commission has therefore required that Deutsche Börse AG and
LSEG commit to the divestment of LSEG's majority stake in MTS S.p.A. to secure merger clearance.
LSEG has resolved to not commit to the required divestment of LSEG's majority stake in MTS S.p.A.
On 6 February 2017, the relevant bodies of Deutsche Börse AG and London Stock Exchange Group plc
(LSEG) decided to formally submit the divestment of LCH.Clearnet SA by LCH.Clearnet Group Limited as
a remedy to the European Commission in order to address anti-trust concerns raised by the European
Commission in relation to the merger of both companies.
On 1 February 2017, Deutsche Börse AG announced that the Public Prosecutor's Office of Frankfurt/Main
investigated at Deutsche Börse AG in respect of a share purchase by its Chief Executive Officer which
was carried out on 14 December 2015 in implementation of the Executive Board's remuneration pro-
gramme as approved by the Supervisory Board of Deutsche Börse AG. Such programme provides for an
investment of the Executive Board members in shares of Deutsche Börse AG. Deutsche Börse AG and
the Chief Executive Officer fully cooperate with the public prosecutor.
Report on post-balance sheet date events
Deutsche Börse Group financial report 2016
64
63
1) Figure for 2015 without consideration of ISE, which represents a discontinued operation due to its disposal as at 30 June 2016 2) Clearstream and Eurex seg-
ments 3) Bonds that will mature in the following year are reported under "other current liabilities" (2012: €577.4 million; 2014: €139.8 million). 4) Proposal to
the Annual General Meeting 2017 5) Adjusted for the non-taxable income related to the revaluation of the share component of the purchase price paid for the acquisi-
tion of the shares of Eurex Zürich AG held by SIX Group AG 6) Adjusted for the costs of mergers, acquisitions and of efficiency programmes 7) Adjusted for
expenditure relating to the revaluation of the share component of the purchase price paid for the acquisition of the shares of Eurex Zürich AG held by SIX Group AG, a
one-off gain from the reversal of deferred tax liabilities for STOXX Ltd. resulting from a decision by the Swiss Financial Supervisory Authority and a one-off gain from
the recognition of deferred tax assets resulting from the future possible offsetting of losses carried forward by Eurex Global Derivatives AG 8) Adjusted for the tax
benefit from initial recognition of deferred tax assets on tax loss carryforwards at a Group company 9) Adjusted for efficiency programme effects and costs incurred
for the change of CEO in 2015 10) Adjusted for costs for mergers and acquisitions 11) Adjusted for costs largely related to criminal proceedings against
Clearstream Banking S.A. in the US 12) Amount based on the proposal to the Annual General Meeting 2017 13) Adjusted for the costs of the OFAC settlement
14) Adjusted for a one-off gain from the dissolution of the financing structure established in connection with the acquisition of ISE, and a one-off expense mainly
attributable to the reduction in deferred tax assets in respect of a tax loss carryforward 15) 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 16) Adjusted for non-recurring effects 17) Since
Q3/2013, this figure has included warrants and certificates due to the consolidation of Börse Frankfurt Zertifikate AG.
598.6
609.8
576.5
570.3
€bn
volume for the period)
Global Securities Financing (average outstanding
13,075
13,274
12,215
■ emergency parent-child offices at the Eschborn, Luxembourg and Prague locations
84.0
thereof financial instruments held by central counterparties
2,220.3¹)
50.62)
-1,283.2")
Long-term Short-term
2015
€m
2016
€m
Credit ratings
Relevant key performance indicators
For financial year 2016, Deutsche Börse AG is proposing that the Annual General Meeting resolve to
pay a dividend of €2.35 per no-par value share (2015: €2.25). This dividend corresponds to a dis-
tribution ratio of 54 per cent of net profit for the period attributable to Deutsche Börse AG shareholders,
adjusted for the special factors described in the ☑“Results of operations" section (2015: 55 per cent,
also adjusted for special items). Given 186.8 million no-par value shares bearing dividend rights, this
Dividends
Moreover, until 2012 the company distributed a part of freely available funds to shareholders, via share
buy-backs. Since 2013, these funds have been used predominantly to support the company's develop-
ment, as well as to fulfil credit rating and regulatory capital requirements. Against the background of the
"Accelerate" growth strategy, the company anticipates that in future, freely available funds will increasingly
be applied not only to support the Group's organic growth, but also to complementary external growth
options.
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. In recent years (where
the Group's net profit was lower), the dividend payout ratio was kept at the upper end of this range, in
order to distribute stable dividends to shareholders. Given that the Group's profit targets were raised in
2015 in connection with the announcement of the "Accelerate" growth strategy, the company aims for a
dividend payout ratio in the middle of the range between 40 and 60 per cent going forward.
Also, Deutsche Börse AG has publicly stated its intention to maintain certain additional financial indica-
tors for Clearstream entities which the company believes to be consistent with an AA rating. Specif-
ically, 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. fulfilled this commitment, reporting tangible
equity of €1,092.1 million; the figure for Clearstream Banking S.A. was €1,179.4 million, also in line
with this target. To the extent that the Clearstream sub-group has financial liabilities to non-banks, the
sub-group is committed to a minimum interest service cover 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
cover ratio is being reported.
Furthermore, the company endeavours to maintain the strong AA credit rating of Clearstream Bank-
ing 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.
The decline in gross debt is a result of the full repurchase of outstanding US private placements, in
the amount of US$290 million, which also led to the ratio of gross debt to EBITDA reaching the target
at the end of the year.
Deutsche Börse Group financial report 2016
Tangible equity of Clearstream Inter-national
S.A. (as at the reporting date)
58
date)
Frankfurt
Listing
Luxembourg/
Frankfurt
Luxembourg/
Frankfurt
Luxembourg/
Frankfurt
Luxembourg/
2.75 %
(until call
February 2021/
February 2041
Call date
5.5 years/
final maturity in
25.5 years
DE000A161W62
€600 m
Fixed-rate bearer bond
(hybrid bond)
1.625 %
October 2025
10 years
DE000A1684V3
57
€500 m
Deutsche Börse AG
Standard & Poor's
A-1+
31 Dec 2016
€m
Consolidated balance sheet (extracts)
Deutsche Börse Group financial report 2016
60
59
The financing of assets was provided through equity and debt capital. Equity increased year-on-year, driven
particularly by the accounting profit realised with the disposal of ISE.
Current assets also decreased, driven in particular by financial instruments held by central counterparties,
while receivables and securities from banking business (as well as restricted bank balances) increased
slightly. This was mainly driven by two factors: higher client cash deposits at Clearstream, and higher cash
collateral provided by the clearing members of Eurex Clearing AG during the year under review. Cash and
bank balances clearly improved due to the disposal of ISE.
Deutsche Börse Group's non-current assets include primarily of intangible assets and financial assets as
well as financial instruments held by central counterparties. The last category represented the largest
item. This asset item is matched by a liability item in the same amount. Receivables and securities from
the banking business, which Deutsche Börse Group holds as financial assets, declined during the year
under review, in line with goodwill and other intangible assets. This decline mainly results from the
disposal of ISE.
Material changes to net assets are described below; the full consolidated balance sheet is shown in the
consolidated financial statements.
Net assets
As at 31 December 2016, Deutsche Börse AG was one of only two DAX-listed companies that had
been awarded an AA rating by S&P. The ratings histories of Deutsche Börse AG and Clearstream are
given in the five-year overview.
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.
On 19 December 2016, S&P affirmed the AA credit rating of Deutsche Börse AG, but maintained the neg-
ative outlook it had set in 2015, in connection with the acquisition of 360T.
AA
On 7 October 2016, 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-trade business and its very
low risk appetite, combined with strict risk management systems, diligent liquidity management, as well
as its impeccable capitalisation.
Credit ratings
would result in a total dividend of €439.0 million (2015: €420.1 million). The aggregate number of
shares bearing dividend rights is produced by deducting the 6.2 million treasury shares from the ordinary
share capital of 193.0 million shares.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
A-1+
AA
Standard & Poor's
1,179.4 1,071.6
F1+
AA
Fitch
Tangible equity of Clearstream Banking
S.A. (as at the reporting date)
Clearstream Banking S.A.
1,092.1 1,079.2
Deutsche Börse AG regularly has its credit quality reviewed by the Standard & Poor's (S&P) rating
agency, while Clearstream Banking S.A. is rated by Fitch and S&P.
Fixed-rate bearer bond
2.375 %
October 2022
40-49 years
E
1,077
866
30-39 years
1,943
704
1,076
227
50 years and
older
475
40-49 years
673
561
759
30-39 years
379
380 under 30 years
274
104
under 30 years
male
female
Global
thereof in
thereof in
Germany
Luxembourg
270
2,096
50 years and older
289
10 years
DE000A1RE1W1
€600 m
Fixed-rate bearer bond
Maturity Coupon p.a.
March 2018 1.125 %
5 years
DE000A1R1BC6
€600 m
Fixed-rate bearer bond
Term
ISIN
Issue volume
Type
Debt instruments issued by Deutsche Börse AG (outstanding as at 31 December 2016)
Moreover, Deutsche Börse targets a maximum ratio of interest-bearing gross debt to EBITDA of 1.5 at
Group level. During the reporting period, the Group achieved a 1.5 ratio of gross debt to EBITDA. This
figure is based on gross debt of €1,984.7 million, and adjusted EBITDA of €1,345.7 million. Gross debt
consisted of interest-bearing liabilities of €1,984.7 million.
Data included for the purpose of calculating interest service cover comprises interest expenses incurred for
financing Deutsche Börse Group, less interest expenses incurred by subsidiaries which are also financial
institutions, including Clearstream Banking S.A., Clearstream Banking AG and Eurex Clearing AG. Interest
expenses incurred which are not related to Group financing are not included in the calculation of interest
service cover.
The company's clients generally expect it to maintain conservative interest service cover and leverage
ratios, and to achieve good credit ratings. Therefore, the Group targets a minimum consolidated interest
service cover ratio (defined as the ratio of EBITDA to interest expenses from financing activities) of 16.
During the reporting period, Deutsche Börse Group achieved this target, with an interest service cover
ratio of 25.3 (2015: 23.2). This figure is based on relevant interest expenses of €53.3 million and
adjusted EBITDA of €1,345.7 million.
Capital management
Deutsche Börse primarily meets its operating liquidity requirements from internal financing, i.e. by
retaining generated funds. The aim is to provide enough liquidity to cover operating costs for one
quarter (currently between €150 million and €250 million). An intra-Group cash pool is used for pool-
ing surplus cash as far as regulatory and legal provisions allow. All of the Group's cash investments
are short-term in order 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 note 36 to the consoli-
dated 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.
Liquidity management
Deutsche Börse Group mainly uses operating leases 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 38 to the consolidated financial statements for details).
Operating leases
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
639
5,176
928
2,226
575
1,546
985
31 Dec 2015
2,388.7
€m
Non-current assets
62
61
Employees
37%
(dividends)
Shareholders
28%
Value added
68%
Taxes
18%
Retained earnings
13%
Deutsche Börse Group financial report 2016
External creditors
26%
Depreciation and amortisation
6%
4%
Company performance: €2,395.5 million
Value added: €1,627.1 million
Distribution of value added
Origination of value added
is made transparent in the value added statement. Value added is calculated by subtracting depreciation
and amortisation as well as external costs from the company performance. In 2016, the value added by
Deutsche Börse Group amounted to €1,627.1 million (2015: €1,541.0 million). The breakdown shows
that large portions of the generated value added flow back into the economy: 28 per cent (€454.3 mil-
lion) benefit shareholders in the form of dividend payments, while 37 per cent (€607.5 million) was
attributable to staff costs in the form of salaries and other remuneration components. Taxes accounted
this contribution
-
Deutsche Börse Group's commercial activity contributes to private and public income
Value added: breakdown of company performance
External costs
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 €24 billion and €29 billion
(2015: between €27 billion and €36 billion).
for 18 per cent (€291.8 million), while 4 per cent (€56.8 million) was attributable to external creditors.
The 13 per cent value added that remained in the company (€216.7 million) is available for investments
in growth initiatives, among other things (see → “Origination of value added" and "Distribution of value
added" charts).
Deutsche Börse Group's financial performance during the 2016 financial year was in line with the range
expected by the Executive Board, given the Group's success on the derivatives and energy markets and -
at least in the US – the accelerating interest rate curve. In total, the Group recorded an 8 per cent increase
in net revenue. Operating costs were up 3 per cent year-on-year, a modest increase compared to 2015,
despite consolidation effects. The increase was due in particular to costs incurred in connection with
mergers and acquisitions. Adjusted by such effects, costs incurred during the year under review in-
creased by only 1 per cent compared to the previous year, despite the consolidation of new subsidiaries.
EBIT, as well as net profit for the period attributable to Deutsche Börse AG shareholders, increased con-
siderably over the previous year, reaching the upper end of the forecast range.
2,047.8
37.62)
-1,114.8
1,011.3
-1,182.8
738.8
969.4
€m
Earnings before interest and tax (EBIT)
-958.6
€m
Operating costs
1,912.3
35.9
52.0
€m
thereof net interest income from banking business
1,932.3
Overall assessment of the economic position by the Executive Board
€m
Consolidated income statement
2016
2015
2014
2013
2012
Deutsche Börse Group: five-year overview
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
The Group's net assets, financial position and results of operations can be considered to be in an
orderly state.
Deutsche Börse AG has offered its shareholders attractive returns for years and financial year 2016 is
no exception. At €2.35 (2015: €2.25), the dividend proposed for distribution to shareholders is above
the prior-year level. In addition, the distribution ratio decreased slightly as a result of the improvement in
earnings, falling from 55 per cent in the previous year to 54 per cent in the year under review (adjusted
for non-recurring effects in both cases), and was thus in line with the Executive Board's forecast range of
40 to 60 per cent.
-
Rating agencies again affirmed the Group's credit quality, awarding it excellent ratings in 2016. On
19 December 2016, Standard & Poor's affirmed the AA credit rating of Deutsche Börse AG, but main-
tained the negative outlook in connection with the acquisition of 360T, financed with equity and debt
capital. Furthermore, Standard & Poor's - just like Fitch Ratings on 7 October 2016 - affirmed the
AA credit rating of Clearstream Banking S.A. Both ratings were assigned a stable outlook.
The Executive Board believes that Deutsche Börse Group's financial position was extremely sound during
the reporting period. The Group generated high operating cash flows, as in the previous year. Given the
considerable increase in adjusted EBIT, Deutsche Börse Group was able to improve the ratio of interest-
bearing gross debt to EBITDA at Group level: at 1.5, it was at the target value of 1.5.
Net revenue
The "financial instruments of the central counterparties" item relates to the function performed by Eurex
Clearing AG and European Commodity Clearing AG: since the latter 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, 15 and 36 to the consolidated financial statements.
The "receivables and securities from banking business" and "liabilities from banking business" balance
sheet items on the balance sheet are technical closing date items that were strongly correlated in the
reporting period and that fluctuated between approximately €14 billion and €20 billion (2015: between
€10 billion and €15 billion). These amounts mainly represent customer balances in Clearstream's inter-
national settlement business.
Technical closing-date items
711.1
1,458.1
26,870.0
27,777.6
thereof other cash and bank balances
thereof restricted bank balances
126,289.6
107,909.6
165,688.9
151,904.4
Current assets
7,175.2
5,856.6
EQUITY AND LIABILITIES
thereof financial instruments held by central counterparties
1,604.8
thereof receivables and securities from banking business
2,309.0
1,920.9
thereof financial assets
2,898.8
2,721.1
4,633.0
3,973.7
14,386.9
11,940.4
thereof goodwill
thereof intangible assets
2,018.6
Equity
4,624.5
3,695.1
31 December 2016 (31 December 2015: €554.1 million) were relatively low compared with net reve-
nue. The current liabilities of the Group, excluding technical closing-date items, amounted to €1,453.0 mil-
lion (2015: €1,196.2 million, excluding technical closing-date items). The Group therefore had slightly
negative working capital of €159.4 million at the end of the year (2015: €479.1 million).
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Working capital comprises current assets less current liabilities, excluding technical closing-date
items and commercial paper. Current assets excluding technical closing-date items amounted to
€1,293.6 million (2015: €1,675.3 million). As Deutsche Börse Group collects fees for most of its
services on a monthly basis, the trade receivables of €669.8 million included in current assets as at
Working capital
Overall, Deutsche Börse Group invested €152.6 million in the continued business in intangible assets and
property, plant and equipment (capital expenditure or capex) in the reporting period (2015: €147.7 mil-
lion). The Group's largest investments were made in the Clearstream and Eurex segments.
■ an increase of liabilities from cash deposits by market participants as a result of higher cash collat-
eral provided by the clearing members of Eurex Clearing AG; the main reason for this increase was
that clearing participants provided a larger proportion of cash compared to securities as collateral
for Eurex Clearing AG in the reporting period
■ a decline in financial instruments held by central counterparties
The main changes within the non-current liabilities item occurred in the following areas:
Non-current liabilities declined, driven mainly by two factors: Firstly, financial instruments held by central
counterparties decreased. This liability item is matched by an asset item in the same amount. Secondly,
interest-bearing liabilities declined. In July, Deutsche Börse redeemed series B and C bonds for an
amount of US$290 million.
26,869.0
27,777.6
126,006.5
107,479.4
thereof financial instruments held by central counterparties
thereof cash deposits by market participants
165,795.3
150,550.5
thereof current liabilities
2,546.5
2,284.7
thereof interest-bearing liabilities
7,175.2
5,856.6
thereof financial instruments held by central counterparties
10,585.4
8,669.9
thereof non-current liabilities
176,380.7
159,220.3
Liabilities
ASSETS
by location
76
■ Insurance
Total
Female
862
1,364
5,176
Male
Total
Male Female
3,080 2,096
Employees
thereof in Luxembourg
thereof in Germany
Global
Key data on Deutsche Börse Group's workforce as at 31 December 2016
During the year under review, executives' performance was for the first time not only assessed by their
respective superiors but also by employees within their area of responsibility, and by fellow executives.
The over 90 per cent response rate shows that the programme was very well received. The experience
gained will be incorporated into career development planning for executive staff.
360-degree feedback introduced for executive staff
-
To motivate and promote top talent is a key instrument for Deutsche Börse Group to remain sustainably
successful in this digital age. Two new programmes were launched to this end: the "Evolving Leaders"
programme, which is designed to identify and promote future managers, and the "Show Your Talent” initia-
tive, which is set to create visibility for – and to support - employees' entrepreneurial and innovative
potential. The previous nomination process was replaced by an application scheme, which provides for
a better overview of existing talent within the company. At the same time, the programmes are designed
to strengthen staff commitment and their performance orientation, as outlined above.
Intensified talent promotion
Deutsche Börse Group financial report 2016
68
67
The average age of Deutsche Börse Group's employees at the end of the reporting period was 39.7 years
(2015: 39.8 years). The charts entitled “Deutsche Börse Group employee age structure" show the
employee age structure as at 31 December 2016. In the course of the year, a total of 386 employees
left Deutsche Börse Group (not including deconsolidation effects and colleagues who accepted one of the
company's offers under the efficiency programmes and left the company or took early retirement). A total
of 755 people joined the Group (excluding consolidation effects). The staff turnover rate was 9.8 per
cent (adjusted: 7.7 per cent), an increase year-on-year (2015: 7.6 per cent and 7.2 per cent respec-
tively). The average length of service at the end of the reporting period was 8.9 years (2015: 9.7 years).
Male Female
Adjusted for efficiency programme costs, staff costs per employee stood at €121 thousand and corre-
sponded approximately to those of the previous year (2015: €125 thousand). Deutsche Börse Group's
Executive Board resolved a voluntary salary increase of 2.5 per cent in Germany in financial year 2016.
Salaries were also adjusted at the Group's other locations.
Total
646
142
31
111
318
88
230
Staff
management
Junior
84
14
70
180
29
151
330
48
282
Senior and middle
management
1,076
430
2,226
57
"Future Workplace” environment supports collaboration throughout the Group; it brings colleagues around
the world closer together and facilitates everyday work routines for all members of staff. The Future Work-
place comprises the Microsoft SharePoint collaboration platform, the Skype for Business messenger and
video call service, as well as Good Work for mobile business communications. Numerous information
sessions and training courses were held to train staff in using the Future Workplace.
Emerging risks
Risk types
Implied risks
Root cause
Risk scenarios
Risk analysis
Risk strategy/risk appetite
Business strategy
Interlocking business strategy and risk strategy
"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.
3. Appropriate risk/return ratio
“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.
2. Support for growth in the various business segments
1. Risk limitation – protecting the company against liquidation and ensuring its continued 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 EBIT. In other words, this principle establishes how much risk the
Group must be able to withstand while also determining its risk appetite.
Deutsche Börse Group's risk strategy is aligned with its business model and business 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:
Risk strategy and risk management
Deutsche Börse Group financial report 2016
74
73
With its range of risk management services, Deutsche Börse Group strives to make a sustainable contribu-
tion 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
the centralised management of their market price risk exposure via the Group's clearing house, Eurex
Clearing AG. In this way, Deutsche Börse Group contributes to the efficiency and systematic stability of
the capital markets.
―
Deutsche Börse Group includes, among other companies, Clearstream Banking S.A. and Clearstream
Banking AG, which form part of the Clearstream Holding group (hereinafter “Clearstream"), and Eurex
Clearing AG. These institutions are subject to the banking supervision regime and its corresponding
statutory requirements, and therefore already meet the strictest requirements for risk management. In
addition, European Commodity Clearing AG, Eurex Bonds GmbH and Eurex Repo GmbH are also subject
to the regulatory requirements set out in EMIR, CRD IV and MiFID (for details on the requirements, see
note 20 to the consolidated financial statements). Rules and regulations directly affect the Group's
institutions, Clearstream and Eurex Clearing AG, especially the Mindestanforderungen an das Risiko-
management (MaRisk, Minimum Requirements for Risk Management) issued by the Bundesanstalt für
Finanzdienstleistungsaufsicht (BaFin, German Federal Financial Supervisory Authority), as well as
Circular 12/552 (Central Administration) issued by the Commission de Surveillance du Secteur Financier
(CSSF, Luxembourg Financial Supervisory Authority). The so-called second pillar of Basel III contains
requirements on how banks must manage their risks; accordingly, this applies to Clearstream and Eurex
Clearing AG. Moreover, pursuant to the Gesetz zur Abschirmung von Risiken und zur Planung der Sanie-
rung und Abwicklung von Kreditinstituten und Finanzgruppen (RiskAbschG, German Act on Ringfencing
and Recovery and Resolution Planning for Credit Institutions and Financial Groups), which was amended
to implement the EU Banking Recovery and Resolution Directive (BRRD), Clearstream and Eurex Clear-
ing AG have prepared recovery plans. Over and above this requirement, Deutsche Börse Group has also
voluntarily prepared a Group-wide recovery plan – in particular, in the event that a restructuring might
become necessary for Clearstream and/or Eurex Clearing AG. At the request of the national supervisory
authorities, Clearstream and Eurex Clearing AG made a substantial contribution to the resolution plans
to be developed by the supervisory authorities. Management expects this work to continue in 2017.
All other companies in the Group comply with best-in-class standards for comparable companies. As a
result, risk management across the Group aims to meet the highest standards.
Internal and external losses
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Non-financial key performance indicators
Event
Loss
■ Risk metrics
■ Stress tests
■ Aggregated risk measurement
Existing risks
Risk monitoring
■ Other
■Information Security
and/or business strategy
■ Changes to business
Risk avoidance
■ Other
Risk transfer
■Internal control system
■ Business continuity
measures
■ Legal
■ Compliance
■ Straight-through processing
or severity of effect
Reduces frequency of events
Risk mitigation
Risk mitigation
Effect
The first section of this risk report explains the enhanced risk strategy and demonstrates how the Group
manages its risk. In the second section of this risk report, the Group outlines approaches and methods
employed for monitoring risk. 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.
27
2,568
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
75
76
Deutsche Börse Group financial report 2016
Deutsche Börse AG's Executive Board determines the Group-wide risk strategy and risk appetite and allo-
cates 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. It also determines what para-
meters 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.
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 appropriate-
ness 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, 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 con-
sistently. In addition, GRM recommends risk management measures.
The Group's regulated subsidiaries act in the same way, always ensuring that they meet the requirements
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, the Group's institutions, implement customised versions of the risk strategy, using
parameters and reporting formats that are compatible with the higher-level, Group-wide structure. At
Clearstream, responsibility lies with the executive boards of Clearstream Holding AG and Clearstream
Banking S.A., which are supervised by their supervisory boards; at Eurex Clearing AG, responsibility lies
with the executive board, which is also monitored by the supervisory board.
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 immedi-
ately, 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 in-
volves, 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 report to the respective executive boards and supervisory boards. Internal Auditing is
responsible for monitoring compliance with the risk management system.
66
73
graduates (%)
Proportion of
3
Monitor the effectiveness of risk management systems and
evaluate risk strategy
0
Supervisory boards
Financial institutions
Long-term developments
■ DB1 Ventures
■ Deutsche Börse Venture NetworkⓇ
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
Internal risk management is based on the Group-wide detecting and managing of risk, which is focused
on its risk appetite, see the ☑“Interlocking business strategy and risk strategy" chart. Deutsche Börse AG's
Executive Board has 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 and its companies can act just as quickly and effectively in the event that several systems
fail simultaneously as if a single system fails.
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 workflows
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 regularly receive comprehensive 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.
Risk management - organisational structure and reporting lines
Group-wide
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
Business segments
Identify, notify and control
Clearstream and Eurex Clearing AG
84
3
27
Junior
4
3
1
5
1
4
9
4
5
management
Senior and middle
Part-time employees
908
389
519
1,904
802
1,102
4,528
1,960
management
55
0
9
28
60
28
32
Disabled employees
141
122
19
305
251
54
512
432
80
Staff
5
5
0
4
4
0
9
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. Despite the continuing tensions in the financial system and the regulatory developments, the
Group's risk profile remained largely stable. Overall operational risk declined, although the threat of
cyber crime increased.
Risk report
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
501
192
309
Leavers
70
35
35
292
132
160
755
316
439
Joiners
Staff turnover
44
41
46
32
31
33
126
24
61
45
37
79
45
34
263
132
131
Promotions
4.15
4.14
4.16
4.19
4.96
3.70
3.80
4.14
3.57
member
Training days per staff
70
25
187
19
23
Over 15 years (%)
195
105
90
221
116
105
Interns and students¹)
-
24
6
18
24
6
18
Apprentices
56
54
57
72
65
70
15
25
11
Length of service
31
31
31
31
30
31
34
35
33
5-15 years (%)
25
28
23
37
39
36
42
42
22
42
Under 5 years (%)
26
56
Employees covered by
collective bargaining
agreements
Availability of cash market trading system (Xetra®)
Security and reliability
35
11,403
11,975
100
Number of sustainable index concepts
Number of indices calculated
91
91
%
Proportion of companies reporting in accordance with maximum transparency
standards²)
Transparency
12.5
€m
Assets under management in ESG index-related products¹)
2015
2016
ESG criteria
Sustainability: key figures for Deutsche Börse Group
Deutsche Börse Group diligently complies with the Gesetz für die gleichberechtigte Teilhabe von Frauen
und Männern an Führungspositionen in der Privatwirtschaft und im öffentlichen Dienst (German Act on
Equal Participation of Women and Men in Leadership Positions in the Private and Public Sectors), speci-
fying target quotas for the parent company, Deutsche Börse AG. For details, please see the “Target
figures for women in management positions" section in the corporate governance declaration.
It was in 2010 that the Executive Board adopted a voluntary commitment to increase the share of women
holding management positions to 20 per cent by 2020. These numbers cover Deutsche Börse Group in
its entirety, on a global basis. During the year under review, the share of women in senior and middle
management remained at 15 per cent, and rose to 28 per cent in junior management.
%
With regard to the development expected of its non-financial performance indicators for 2016, the Group
succeeded in maintaining a very high level of systems availability whilst adhering to the highest security
standards. In specific terms, the availability of the T7Ⓡ trading system rose from 99.93 to 99.96 per cent,
while XetraⓇ availability remained at a very high level of 99.99 per cent.
Availability of derivatives market trading system (T7Ⓡ)
Market risk cleared via Eurex Clearing (gross monthly average)
3) In the fourth quarter of 2016, seven mandatory training modules were planned for implementation. Among these, one completely redesigned module is focused
on anti-bribery and corruption. Since December 2016, this module has been successively rolled out for all employees of Deutsche Börse Group; the roll-out will
continue into 2017. As of the reporting date, 31 December 2016, the roll-out included 504 employees, with a participation rate of 9 per cent. It will be ensured
that all Group employees complete the mandatory trainings in 2017.
1) Comprising FlexShares STOXX® Global ESG Impact Index and FlexShares STOXX® US ESG Impact Index, which are used as basis for two ETFs launched in 2016.
2) Ratio of the market capitalisation of companies listed in the Prime Standard to the market capitalisation of all companies listed on the Frankfurter Wertpapierbörse
(FWB, the Frankfurt Stock Exchange)
0
0
976
47
100
100
%
0
0
Number of justified customer complaints relating to data protection
Number of employees trained in anti-corruption measures³)
Proportion of business units reviewed for corruption risk
Punished cases of corruption
Compliance
16.7
99.930
99.999
99.999
99.962
14.8
€trillion
%
Comparison with the forecast for 2016
In July 2016, Deutsche Börse Group established its Group Sustainability Board to develop the Group-
wide sustainability strategy and advise the Executive Board on sustainability issues. Thanks to the new
Board, Deutsche Börse Group has already included additional steps in its value creation chain and linked
the key figures more clearly to its core business.
Deutsche Börse Group financial report 2016
Sustainable economic activity
Deutsche Börse Group financial report 2016
70
69
Furthermore, the Group analyses at regular intervals whether there are remuneration differences between
men and women. No systematic discrimination against men or women was detected. In fact, any diffe-
rences in remuneration are based on qualifications, the length of service and function.
In order to raise the share of women in executive positions, the company explicitly ensures that women
are included in proposals for executive positions. In principle, however, qualifications are decisive when
filling such vacancies. In addition, Deutsche Börse Group offers numerous additional tools to promote
female employees, such as targeted succession planning, a mentoring programme involving internal and
external mentors, a women's network, as well as training courses designed specifically for women. 12 of
the current 25 members of the High Potential Circle, Deutsche Börse Group's training programme for
potential future executives, are female (48 per cent).
In 2010, the Executive Board had already set a voluntary target for Deutsche Börse Group to increase
the proportion of women in middle and senior management to 20 per cent, and in junior management
to 30 per cent, by 2020. The Group has affirmed this ambition. These targets relate to Deutsche Börse
Group worldwide, including subsidiaries. In contrast to statutory obligations, the voluntary commitment
is based on a wider definition of management levels, including team leaders, for example. In Deutsche
Börse Group's global operations, as at 31 December 2016, these quotas stood at 15 per cent (2015:
15 per cent) for middle and senior management and 28 per cent (2015: 27 per cent) for junior manage-
ment levels. In the Group's German locations, they were 16 per cent (2015: 14 per cent) and 22 per
cent (2015: 23 per cent), respectively.
At the time the Executive Board resolved the target quotas (15 September 2015), the share of female
employees amounted to 6 per cent for the first management level, and 10 per cent for the second man-
agement level. The Executive Board resolved as a minimum target to maintain those quotas until 30 June
2017. As at 31 December 2016, female proportion for the first and second management level below
Deutsche Börse AG's Executive Board was 11 per cent and 15 per cent, respectively.
In accordance with the Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungs-
positionen in der Privatwirtschaft und im öffentlichen Dienst (German Act on the Equal Participation of
Women and Men in Leadership Positions in the Private and Public Sectors), Deutsche Börse AG's Super-
visory Board and Executive Board have defined target quotas for women on these boards and for the two
management levels directly beneath the Executive Board. These target quotas relate to Deutsche Börse AG
(excluding subsidiaries) and will be valid until 30 June 2017.
Target female quotas adopted
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Non-financial key performance indicators
1) The global figures reported here refer solely to the locations in Germany, Luxembourg and the Czech Republic; this corresponds to 80 per cent of Group staff.
972
413
559
1,655
689
966
2,627
1,102
1,525
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. As an in-
ternational capital markets organiser, Deutsche Börse aims to build and grow trust in market structures.
As a listed company included in DAX®, it wants to lead by example. And as a corporate citizen, it
endeavours to use its core business competence to contribute to resolving social challenges.
Building trust
Sustainable index products
To provide investors with responsible investment options that meet ecological, social and economic criteria,
Deutsche Börse Group develops sustainable indices. Deutsche Börse Group aims to strengthen the future
viability of capital markets by offering a wide variety of indices. The indices capture public attention for
sustainably operating businesses and increase transparency.
72
71
Within the scope of so-called materiality analyses, Deutsche Börse regularly assesses which topics are of
particular significance for the Group. The “Sustainability: key figures for Deutsche Börse Group" table
summarises the non-financial key performance indicators that characterise the Group's sustainability
profile according to these analyses. Key figures on transparency and security have been collected quar-
terly since 2013, and published in the yearly and half-yearly financial reports.
Key sustainability figures for Deutsche Börse Group
As Deutsche Börse Group is committed to sustainably empowering the non-profit sector, it founded
Phineo gAG together with the Bertelsmann Foundation in 2009. Phineo is a charitable public limited
company that provides advisory and analysis services to foundations, non-profit organisations and
companies. In 2015 Deutsche Börse renewed its status as principal shareholder of Phineo for another
two years. Deutsche Börse decided to continue this cooperation with the goal of interlocking its core
competences more closely with those provided by Phineo, to jointly develop solutions for social chal-
lenges. During the year under review, both houses were among those successfully applying to partici-
pate in the EU project “Establishing a new early-stage impact fund for social-tech ventures", thereby
establishing a thematic focus for their joint work in 2017.
Raising public awareness
■ STOXX Sustainability Indices (Europe and eurozone): since 2001; the entirely rule-based and transparent
STOXX rating model means that there is no conflict of interests; based on Bank Sarasin analyses
■ STOXX ESG Leaders Index: since 2011 (launch year). The entirely rule-based and transparent STOXX
rating model means that there is no conflict of interests; result of Sustainalytics rating: total score of 75
(E: 78, S: 74, G: 73), ranking: 7th out of 248 companies
■ MSCI World ESG Index: since 2010; MSCI ACWI ESG Indices: since 2010; based on MSCI ESG research
■ PAX ellevate Global Women's Index (PXWEX): since 2014; based on MSCI ESG research
■ FTSE4Good Indices (Global and Europe): since 2009; result of FTSE ESG rating: total score 4.0 out of 5;
supersector relative: 96 out of 100
↓ Risk acceptance
■ Euronext Vigeo - Eurozone 120 Index: since 2014; based on Vigeo rating
■ ECPI Euro Ethical Equity Index: since 2008; ECPI EMU Ethical Equity Index: since 2008; ECPI Global
Developed ESG Best in Class Equity Index: since 2013 (launch year); result of ECPI ESG rating
■ Dow Jones Sustainability Indices (DJSI) Europe: since 2005; World: since 2015; result of Robeco SAM
rating: total score 71; average sector score 43
Sustainability indices and ratings inform on the reporting and performance of companies in the area of
sustainability, including a company's ecological, social and corporate governance performance, together
with its management of opportunities and risks. As a listed company, Deutsche Börse itself is also sub-
ject to regular audits carried out by independent third-party providers. Given thoroughly positive assess-
ments during the year under review, Deutsche Börse Group was again included in numerous sustainability
indices:
Leading by example
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Non-financial key performance indicators
Today, ESG factors account for a considerable share of enterprise value, which is why institutional invest-
ors place more and more importance on this information in their decision-making processes. To support
these processes, Deutsche Börse Group has conducted surveys amongst companies listed in the DAX,
MDAX®, SDAX® and TecDAXⓇ indices on their sustainability reporting every year since 2014. The results
are openly accessible on ☑en.boerse-frankfurt.de/sustainable-securities and provide an overview of the
reporting formats the companies choose (annual report, separate sustainability report or combined/inte-
grated report), the standards they apply as well as the contact details for sustainability-related questions
for each company.
As a marketplace organiser, Deutsche Börse Group considers ensuring transparency in the capital mar-
kets 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 is geared to the needs of
market participants.
Transparency and standardisation
The STOXX Low Carbon index family was introduced in February 2016. It was designed for investors
wishing to "decarbonise", i.e. limit the exposure of their portfolios to reduce climate-related risks, such
as stricter regulation or physical damage, while participating in the growth of low-carbon industries.
To cater to different investment strategies, STOXX developed fully tailored solutions based on broad
index universes, with four sub-families offering additional diversification potential across varying degrees
of carbon exposure.
STOXX Ltd., a subsidiary of Deutsche Börse AG, offers a broad spectrum of transparent sustainability
indices. With the STOXX® Low Carbon index family, Deutsche Börse more than doubled its offering of
indices from 35 to 100 in 2016. It comprises amongst others the index families STOXX® Global ESG
Leaders and STOXX® Sustainability. The STOXX Global ESG Leaders indices are based on sustainability
ratings covering environmental, social and governance (ESG) criteria. The STOXX Sustainability indices
show the performance of sustainable companies.
■ Ethibel Sustainability Index (ESI) Excellence Europe: since 2013; based on Forum Ethibel rating (part
of Vigeo)
■ Risk map
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
Deutsche Börse Group places great importance on physical security issues. Corporate Security has devel-
oped an integral security concept to protect the company, its employees and values from external attacks.
A highly qualified security staff assess the security situation permanently and are in close contact with
local authorities and security departments of other companies.
accounted for by this business. In contrast to the regulatory capital requirements, this calculation also
includes business areas that are not covered by banking regulations.
Risk report
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
risks
63%
Operational
0
risks
23%
Financial
14%
Business risks
■ Operational risks
■Credit risks and market risks
Universal banks
Clearstream and
Eurex Clearing
20%
24%
76%
80%
Required economic capital for Deutsche Börse
Group, by risk type as at 31 December 2016
Regulatory capital requirements for Clearstream and
Eurex Clearing AG as at 31 December 2016
A larger part of the risk is associated with the Clearstream and Eurex segments (see the “Required
economic capital by segment" chart), in keeping with the proportion of sales revenue and earnings
Utilisation of risk-bearing capacity in the liquidation principle and of risk appetite in the going con-
cern 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 14 per cent of the total. This makes
the third typical risk type all the more important for Deutsche Börse Group: at 63 per cent, operational
risk accounts for more than half of the total risk (see the “Required economic capital for Deutsche
Börse Group, by risk type" chart).
Operational risk greater than financial and business risk
The regulatory capital requirements for Clearstream and Eurex Clearing AG are primarily due to operational
risk (see the "Regulatory capital requirements for Clearstream and Eurex Clearing AG" chart). Informa-
tion on the additional capital requirements under EMIR for Eurex Clearing AG and European Commodity
Clearing AG is provided in ☑note 20 to the consolidated financial statements.
The risks faced by Deutsche Börse Group's institutions differ fundamentally from those of other financial
service providers. Clearstream and Eurex Clearing AG have a structurally lower risk in comparison with
other banks because they act as intermediaries rather than, for example, having an own distinct business
area that trades on the financial markets. Consequently, Deutsche Börse Group's institutions do not bear
the associated market price risks. On the contrary, they offer market participants services such as collateral
and risk management to reduce their risk from trading activities. The Group's banking business mainly
consists of providing reliable clearing, settlement and custody services, as well as collateral management.
Low level of typical bank risk
Deutsche Börse Group financial report 2016
80
A similar split can be seen for EaR. Here, too, the business segments with the largest proportions of
revenues and earnings - Clearstream and Eurex have the largest shares of earnings at risk (see the
79
"Earnings at risk by segment” chart).
Deutsche Börse Group assigns indicators to each risk exposure to estimate how likely it is to occur and
what financial effect it could have. It distinguishes four probability levels (very low, low, medium and
high) and four financial impact levels (low, medium, substantial and a risk to the company as a going
concern). However, none of the risks assessed reach the fourth impact level either individually or in
total; in other words, none jeopardises the existence of the entire Group as a going concern.
38%
Market Data +
13%
Xetra
10%
Clearstream
43%
Services
Market Data +
11%
Xetra
8%
Earnings at risk by segment
as at 31 December 2016
as at 31 December 2016
Required economic capital by segment
to
up
■risk to the business as a going concern (the financial loss of Deutsche Börse AG could be
the available risk cover amount)
■ substantial (the financial loss could be up to 100 per cent of EBIT)
■ medium (the financial loss could be up to 50 per cent of EBIT)
■low (the financial loss could be up to 10 per cent of EBIT)
The estimated financial effects can be classified into the following four categories:
high (the probability of the risk occurring is equal to or greater than 50 per cent)
■
■low (the probability of the risk occurring is equal to or greater than 1 per cent but less than 10 per cent)
■ medium (the probability of the risk occurring is equal to or greater than 10 per cent but less than
50 per cent)
■ very low (the probability of the risk occurring is less than 1 per cent)
These categories can be used to assess the risk types given below as examples. The estimated prob-
abilities of the risks occurring are categorised as follows:
_
Deutsche Börse Group differentiates between the three standard types of risk: operational, financial
and business risk. Project risks also exist but the Group does not specifically quantify these as their
impact is already reflected in the three traditional risk types.
Risk profile
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
significantly smaller role for Deutsche Börse Group.
2. Going-concern principle: what risks can be absorbed by earnings?
For management purposes, GRM regularly determines the ratio of the EC to the risk-bearing capacity. This
indicator is known as the utilisation of risk-bearing capacity and it answers a key risk management ques-
tion: how much risk can the Group afford and what risk is it currently exposed to? The ratio of EC 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"). The liquidation concept therefore assumes that the Group
Iwill not have to be liquidated.
Deutsche Börse Group financial report 2016
78
77
5. Monitor and report
4. Control
3. Assess
2. Notify
1. Identify
Business areas
Risk management process
Group Risk Management
Risk profile monitoring and management
Group Risk Committee
Risk management strategy and appetite
Executive Board
Responsibility
The five-stage risk management system
The first part of Principle 1 of its risk strategy specifies that Deutsche Börse Group is not expected to
exhaust its risk-bearing capacity in more than 0.02 per cent of all years. For Clearstream and Eurex
Clearing AG, EC 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 accordance with International Financial Reporting Standards (IFRSs). It adjusts this figure for precau-
tionary reasons, for example to take into account the fact that it may not be possible to dispose of intan-
gible assets at their carrying amounts in cases of extreme stress. Clearstream and Eurex Clearing AG
determine their risk-bearing capacity on the basis of their regulatory capital (for details, see ☑note 20
to the consolidated financial statements).
1. Liquidation principle: what risk can the capital cover?
The purpose of the VaR model is to determine the amount of capital - given a confidence interval defined
ex ante- required to cover potential losses incurred within one year. In this context, economic capital
(EC) in accordance with the liquidation principle, as well as regulatory capital (RC) for credit institutions
within Deutsche Börse Group are calculated. Conversely, the going-concern principle is based on earnings
at risk (EaR).
Aggregate risk measurement
Deutsche Börse Group employs a range of tools to monitor and evaluate its operational, financial and
business risks on a continuous basis. Applying the liquidation principle, the going-concern principle,
and the regulatory capital requirements of the Group's credit institutions, risks are aggregated at a Group
level and quantified using the concept of value at risk (VaR). 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. Risk metrics, which are used as an early-warning system for quantified [internal] risks, represent
an additional risk monitoring method.
Existing risks
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, whilst also con-
sidering regional as well as global developments. The Group is thus able to recognise and analyse exist-
ing 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.
Approaches and methods for risk monitoring
Deutsche Börse Group employs the going-concern principle that assumes an orderly continuation of the
Group in the event of a crisis, and that uses EaR as an indicator. This indicator corresponds to the sec-
ond part of Principle 1 of the Group's risk strategy, i.e. that an operating loss 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 earnings before interest
and taxes (EBIT)). 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 EBIT.
3. Regulatory capital requirements
In addition, 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 II and Basel III. In addition, Eurex Clearing AG must fulfil European Market Infrastructure Regulation
(EMIR) requirements. A standardised approach is used for analysing and evaluating credit and market
risk; risk weightings are applied on the basis of the relevant counterparty ratings.
The approach taken for operational risk is different: Clearstream has used the significantly more complex
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 EC calculations, the model employed was fundamentally revised and im-
proved during 2016. The method which has been approved and is regularly tested by BaFin - - allows
Risk description
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
Paper). 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.
Long-term developments
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 covering impending regulatory requirements, business risks, as well as IT and information
security risks. Risk maps classify risks by their probability of occurring - and by their financial impact,
should they materialise. This is based on a five-year planning horizon, which is equivalent to the develop-
ment cycle for the operational risks relevant to Deutsche Börse Group: 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.
Emerging risks
Risk metrics are used to quantify the exposure to the most important internal operational risks against
set limits. Any breach of these limits serves as an early warning signal, which is reported to the Execu-
tive Board and other boards and committees on a monthly basis. Furthermore, any such breach will im-
mediately trigger the requisite risk mitigation processes.
Risk metrics
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 eval-
uated by way of liquidity stress tests as well as so-called inverse stress tests; the latter analyse which
loss scenarios would exceed the risk-bearing capacity.
Stress tests
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
↑
Business risks
↑
Services
■ Liquidity risk
■ Credit risk
Financial risks
Risk profile of Deutsche Börse Group
↑
Project risks
■ Legal offences and business practice
Damage to physical assets
•
■ System availability
Operational risks
Deutsche Börse Group's risk profile
required capital to be allocated to the regulated units. In contrast, Eurex Clearing AG employs the basic
indicator approach in order to calculate regulatory capital requirements (for details, see note 20 to the
consolidated financial statements).
-
■ Market risk
36%
■ Service deficiency
Eurex
Measures to mitigate operational risk
A dispute has arisen between MBB Clean Energy AG (MBB), the issuer of a bond eligible in Clearstream
Banking AG, and end investors. 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 dispute relates to the non-
payment of the second tranche of the bond with a nominal value of €500 million and the purported lack
of validity of the bond. Clearstream Banking AG's role in the dispute on the purported lack of validity of
the MBB Clean Energy AG bond is primarily to safekeep the global note, deposited by the paying agent
of the issuer, as national central securities depository. At this stage, it is unclear if and to what extent
potential damages exist and if so who would ultimately be responsible. Provisional insolvency proceed-
ings have meanwhile been opened in respect of the issuer, MBB Clean Energy AG.
Risk report
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
On 2 April 2014, Clearstream Banking S.A. was informed that the United States Attorney for the South-
ern 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.
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 dam-
ages of up to approximately US$6.6 billion plus punitive damages and interest.
On 30 December 2013, a number of US plaintiffs from the first Peterson case, as well as other US
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. On 6 March 2015, the plaintiffs appealed the decision to the
Second Circuit Court of Appeals, which heard oral arguments in the case on 8 June 2016.
In July 2013, the US court ordered 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 then by the US Supreme Court on
20 April 2016. Once the process of distribution of funds to the plaintiffs is complete, a related case,
Heiser vs Clearstream Banking S.A., also seeking turnover of the same assets, should be dismissed.
In its 2012 corporate report, Deutsche Börse Group informed about proceedings, Peterson vs Clear-
stream 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 million. That matter was settled between Clearstream Banking S.A. and the plaintiffs and the
direct claims against Clearstream Banking S.A. were abandoned.
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
or breaches of competition law or of 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 higher-order regulations.
Legal offences and business practice
Deutsche Börse Group financial report 2016
84
83
■Flawed data supply
■ External fraud
■ Terror
■ Internal fraud
■ Weather catastrophes
■ Flawed internal processes
Legal violations
■ Force majeure
■ Human errors
■ Cyber crime
■Inadequate information
security
■ IT hardware flaws
■ Software flaws
Deutsche Börse Group takes specific measures to reduce its operational risk. Among them are emergency
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).
Possible root causes
Emergency and contingency plans
Business continuity management
Eurex
Physical security
The Group operates a situation centre (Computer Emergency Response Team, CERT), which detects and
assesses threats from cybercrime in cooperation with national and international financial intelligence
units at an early stage and coordinates risk mitigation measures in cooperation with the business areas.
Moreover, procedures based on industry standards ISO 27001 and NIST 800-53 were established in
order to bring Deutsche Börse Group's information security measures continuously into line with growing
- and permanently changing - requirements, and to anticipate regulatory requirements at an early stage.
In 2015, Group Information Security launched an extensive Group-wide programme designed to raise
staff awareness for the responsible handling of information and to improve staff conduct in this aspect.
Furthermore, Deutsche Börse Group has been a full member of national associations since 2016 (Cyber
Security Sharing and Analytics, CSSA) 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.
Information security attacks and cybercrime represent operational risks for Deutsche Börse Group. Cyber-
crime is increasingly becoming a focus for organised crime and now features high on the list of crime
statistics year after year. It is a threat to all financial services providers, to credit institutions and to
Deutsche Börse Group. Due to the growing danger from cyber criminals and increasing regulatory
requirements, the Group is focused on mitigating these specific risks and expanding its information
security measures. Besides mitigating availability risks, these serve in particular to reduce the risk of
loss of confidential information and hence, to preserve Deutsche Börse Group's integrity as a transaction
services provider. In this connection, the Group has extended its procedures to quantify cyber risks and
has specified them in more detail, in order to facilitate implementation of targeted counter-measures.
Information security
■
■ 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.
■ Functionally effective: the measures must be technically successful.
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 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:
Preparations for emergencies and crises
Deutsche Börse Group financial report 2016
86
85
■ Utilisation of multiple
suppliers
■ Careful and continuous
check of suppliers'
emergency preparations
■Contracts and agreed plans
of action for suppliers and
service providers to specify
emergency procedures
Suppliers
of a pandemic
■ Option to move essential
operational processes to
other sites if staff in one site
are not able to work
Employees
by numerous employees
■ Remote access to systems
■ Emergency arrangements
for all essential functions
■Fully equipped emergency
workspaces, ready for use
at all times
Workstations
■ Trading, clearing and
settlement systems designed
to be available at all times
■ Duplication of all data
centres to contain failure
of an entire location
Systems
Emergency and crisis management process
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
the event of a crisis and significantly reduces availability risk. Measures include precautions relating to
all important resources (systems, workspaces, employees, suppliers), including the redundant design of
essential IT systems and the technical infrastructure, as well as emergency measures designed to miti-
gate 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.
↑
■ Additional precautions to
ensure that operations
remain active in the event
■ Breach of sanctions
provisions
System availability
Operational risk for Deutsche Börse Group relates to availability, processing, material goods, litigation
and business practice (see the “Operational risks at Deutsche Börse Group" chart). Human resources
risks are quantified just like other operational risks. Operational risk accounts for 63 per cent of the
total Group risk.
Operational risk
These extreme events that could lead to a loss corresponding to more than 100 per cent of annual EBIT
are rated as having a probability of less than 0.1 per cent. Such extreme events, also known as "tail risks",
have not occurred to date. Tail risks may represent going concern threats for certain subsidiaries, for
example if sanctions were to be deliberately contravened. Group Risk Management (GRM) assesses these
risks continuously and reports regularly to the Executive Board of Deutsche Börse Group on the results.
■ deliberate breaches of sanctions
■ simultaneous failure of several large systemically important banks
■ failure of a trading system for several days in a highly volatile market environment
▪ implementation of a financial transaction tax
■the return of the European government debt crisis
■ market share loss in European trading markets
3. Business risk
■ default by a customer and an associated liquidity squeeze
■ losses arising from the impairment of pension fund assets
■ default of a credit counterparty
2. Financial risk
■ conflicting laws of different jurisdictions
■ losses from ongoing legal disputes
■ incorrect handling of the default of a large customer
■ incorrect processing of client instructions (e.g. corporate actions)
■ cyber attacks
■failure of a trading system
1. Operational risk
In the following, the risk types are first illustrated with specific examples and then explained in detail.
Deutsche Börse Group financial report 2016
82
41%
Clearstream
↑
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.
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
Risks which could jeopardise the Group's continued existence could arise only from a combination of
extreme events that have a very low probability:
acts of cyber crime or terrorist attack. In the past, only limited failures have occurred both with Xetra and
with 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 a system failure
lasting longer than 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.
■ Contract risks
■ Employment practice
■ Theft of customer cash
■ Losses from ongoing legal
conflicts
Legal offences and business
practice
of datacentres
■ Damages or destruction
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
Damage to physical assets
↑
■Loss of customer cash
■ Deficiency of trading related
services
Service deficiency
■ Settlement
■ Damages or destruction
of buildings
■ Trading
In general, availability risk represents the largest operational risk for Deutsche Börse Group. The Group
therefore subjects it to regular stress tests, which check not only what happens when its own systems
fail but also when suppliers fail to deliver.
Service deficiency
■ Clearing
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 prod-
ucts and processes or mistakes in manual entries. A second example is errors in handling the default of
a large clearing customer. To date, defaults are rare, no such handling errors have occurred and 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 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 manage-
ment (BCM) aims at averting significant financial damage (see the “Business continuity management"
chart).
81
Operational risks at Deutsche Börse Group
Operational risks
System availability
Events
2,283.2
1,688.41)
35
Performance indicators
Dividend per share
€
2.702)
2.45
10
Dividend payout ratio
%
493)4)
5,397
-8
Employees (annual average FTEs)
5,183
4
€m
533)
4.46
0
-6
€
Personnel expense ratio (staff costs / net revenue)
4.68
-5
€m
1,298.2
1,056.2
23
Consolidated balance sheet
Non-current assets
€m
15,642.0
10,883.7
44
Equity
€m
4,963.4
4,959.4
Financial liabilities measured at amortised cost
%
€
26
77.54
High7)
121.15
100.25
Low7)
€
95.30
74.27
96.80
Closing price
104.95
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
874.3
7) Intraday price
€
€
Opening price)
25
15
Tax rate
%
27.03)
27.03)
0
Return on shareholders' equity (annual average)5)
%
213)
183)
17
Gross debt / EBITDA
1.2
1.4
- 14
Interest coverage ratio
%
40.8
32.7
30
824.3
and corporate governance report
32
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
197 Consolidated financial
statements/notes
198 Consolidated income statement
111 Risk report
199 Consolidated statement of comprehensive
200 Consolidated balance sheet
202 Consolidated cash flow statement
204 Consolidated statement of changes
in equity
206 Basis of preparation
254 Consolidated income statement disclosures
268 Consolidated balance sheet disclosures
312 Other disclosures
income
86 Combined non-financial statement
86 Report on post-balance sheet date events
43 Report on economic position
Annual report
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.
2018
www.deutsche-boerse.com
ON BO
DEUTSCHE BÖRSE
GROUP
Annual report 2018
Contents
3 Deutsche Börse Group: key figures
5 Deutsche Börse Group:
an overview
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 Fundamental information about the Group
42 Deutsche Börse AG shares
347 Responsibility statement by the Executive
€m
Board
356 Deutsche Börse Group worldwide
357 Glossary
54
Operating costs (excluding depreciation, amortisation and impairment losses)
€m
-1,340.2
- 1,131.6
18
Earnings before interest, tax, depreciation and amortisation (EBITDA)
€m
132.6
1,443.2
-6
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
€m
210.5
159.9
1,528.5
204.5
€m
thereof net interest income from banking business
362 Acknowledgements/contact/
registered trademarks
363 About this report
364
Financial calendar
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes
Further information
Deutsche Börse Group: key figures (part 1)
Change
2018
2017
in %
Consolidated income statement
Net revenue
€m
2,779.7
2,462.3
13
348 Independent Auditor's Report
3
Deutsche Börse shares
Executive and Supervisory Boards
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
• 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.
Notes
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Ⓡ
Further information
Information technology
Our brands: European Commodity Clearing, European Energy Exchange, Nodal Clear, Nodal Exchange,
PEGAS®, Powernext
Our brands: Eurex®, Eurex Clearing, Eurex RepoⓇ
management
Post-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®
LO
5
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
• 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.
Management report
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
обо
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.
Financial statements
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®
7
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.
9
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | Letter from the CEO
Management report
Financial statements
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.
Notes
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.
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
Deutsche Börse Group | Annual report 2018
Further information
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.
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.
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.
Deutsche Börse Group | Annual report 2018
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
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,
Collateral
services
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.
custody)
2018
2017
in %
€bn
1,719.6
1,467.6
17
m
Change
1,951.8
16
€bn
11,302.7
11,245.9
1
€bn
2,384.9
2,218.7
1,675.9
7
Average monthly cleared volumes across all products 10)
System availability of cash market trading system⁹)
Investment fund
Financial statements
Further information
Deutsche Börse Group: key figures (part 2)
Market indicators
Xetra®, Frankfurt Stock Exchange and Tradegate
Trading volume (single-counted)
Eurex®
System availability of derivatives market trading system9)
Number of contracts
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
Clearstream
%
Notes
91
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
Pre-trading
Trading & clearing
Index business
Data business
Information
technology
Financial derivatives
Commodities
Currency trading
Securities trading
Post-trading
91
(settlement and
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Management report
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.
4
11,547
131
12,422
-7
117
12
%
99.912
99.968
0
99.963
%
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.
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)
14
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.
23.5
99.967
€ trillion
20.6
93
623
720
1,603
408
917
Full-time equivalents
41
40
43
40
44
56
45
150
164
44
278
159
101
250
505
659
1,330
371
736
Staff
17
Senior and middle management
56
114
22
81
Junior management
11
62
25
15
36
80
474
148
Female
Male
Female
Male
Luxembourg
Germany
All locations
Deutsche Börse Group
Male
Deutsche Börse AG
Under 30 years
30-39 years
40-49 years
50 years and older
Employees
Key data on Deutsche Börse Group's workforce as at 31 December 2018 (part 1)
Part-time employees
Further infomation
Average age
111
Female
555
388
523
197
264
173
258
265
139
947
273
198
225
500
126
329
429
648
1,028
89
1,661
8
147
5-15 years (%)
31
26
44
44
47
45
Under 5 years (%)
Length of service
12
12
116
126
78
84
Interns and students
0
22
21
26
26
Notes
56
90
156
54
66
Leavers
Joiners
0
Staff turnover
52
30
30
32
33
Over 15 years (%)
26
21
43
7
8
7
9
0
4
1
4
1
Junior management
2
Staff
0
2
0
0
Senior and middle management
151
25
307
58
0
30
29
55
Apprentices
39
61
35
65
35
65
Proportion of graduates (%)¹)
143
1
27
37
13
20
Disabled employees
140
25
303
3
Financial statements
34.4
Executive and Supervisory Boards
Deutsche Börse Group
641.6
534.2
147.3
47.2
574.7
2,317.9
All locations
Deutsche Börse AG
€ thous.
Travel
expenses
Savings
plans
€ thous.
€ thous.
Accident
insurance
Sports and
leisure
€ thous.
Childcare
€ thous.
€ thous.
Germany
3,915.4
895.8
75.9
Ireland
202.7
1,159.6
28.7
220.0
26.9
728.2
Czech Republic
Lunch
allowance
116.6
111.3
8.6
0
1,747.4
Luxembourg
1,042.0
847.9
270.9
0
Total expenses for employee benefits
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.
Further infomation
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
91
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.
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.
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.
Notes
Talent promotion
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.
-
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.
Human resources strategy
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Deutsche Börse Group offers its employees a wide range of benefits over and above statutory
requirements (see the ☑“Total expenses for employee benefits" table). At €123,000, average staff costs
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.
268.2
Further infomation
As a global enterprise, Deutsche Börse Group advocates openness and fairness at the workplace. This
is why Deutsche Börse AG signed the ☑“Diversity Charter" to support recognition, appreciation and
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.
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
92
92
The appraisal system is applied equally to female and male employees. A separate target-agreement
system exists for managerial staff.
Promoting diversity and gender equality
■ Newly hired employees are to receive an appraisal and agree upon targets following expiry of their
probationary period.
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:
Feedback for employees and managers
For details regarding targets for female quotas, please refer to the ☑ section entitled "Combined corporate
governance statement and corporate governance report – target figures for the proportion of female
executives beneath the Executive Board".
Target quotas for 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.
Measures to promote women
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.
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.
■ Pursuant to an employer/works council agreement, German employees aged 59 or older may waive the
annual appraisal and target-setting process.
0
40
18.8
Male
Female
Male
Returned from parental leave
in 2018
Entered parental leave in 2018
Key figures on parental leave
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.
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.
Female
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.
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
93
5.6
94.4
Work-life balance
2.7
97.3
Male
%
Deutsche Börse Group | Annual report 2018
94
1) Employees whose parental leave ended in 2018, and who remained with the company
95
99
87
82
100
Female
76
100
22
32
20
31
Deutsche Börse Group
Deutsche Börse AG
%
100
Management report | Combined non-financial statement
137,215
84,902
7.4
92.6
Male
Total
Female
Male
Deutsche Börse Group
Deutsche Börse AG
1) FTE full-time equivalent
thereof employees
Female
thereof managers
Average number of training days per FTE¹)
Average number of training days per employee
Key figures on staff training in 2018
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.
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.
Training and continuing professional development
0
0
Number of hours
52,313
Total
3.1
38,173
6.1
93.9
93.9
6.1
6.1
93.9
%
%
13,564
24,609
3.2
3.1
3.0
3.5
3.7
3.4
2.9
2.8
2.9
3.2
3.3
47
69
81
3.19
Training days per staff member
507
59
95
16
17
45
72
797
70
120
36
52
67
110
Leavers
2.65
3.96
2.81
1.52
0
0
0
0
0
0
bargaining agreements
Employees covered by collective
Joiners
340
9
16
15
35
56
Promotions
2.88
2.12
12
Staff turnover
24
6
Length of service
290
0
0
0
0
17
7
Under 5 years (%)
Interns and students
0
0
0
0
0
0
Apprentices
73
15
3,033
62
58
8
11
6
0
0
Over 15 years (%)
30
37
60
32
36
40
38
5-15 years (%)
46
57
60
33
56
37
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
Number of justified customer complaints relating to data protection
4,487
1,562
100
100
%
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)")
0
1
Punished cases of corruption
Corruption
2017
2018
Non-financial key performance figures: corruption/data protection
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.
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.
Due diligence review of clients, market participants, counterparties, and business partners, plus
transaction monitoring
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.
Data protection
Executive and Supervisory Boards
100
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.
Internal/external audit
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.
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.
Inside information
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.
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.
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.
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
99
99
Data protection/protection of personal data
Analysis of compliance risks
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).
Whistleblowing system
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
97
40
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.
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.
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.
-
Management report | Combined non-financial statement
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.
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.
Compliance - including combat against corruption and bribery
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
-
96
Financial statements
Further infomation
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
98
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.
Notes
Compliance training
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.
Compliance rules
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 ☑ section entitled “Combined corporate governance statement and corporate
governance report".
Code of business conduct
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.
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.
Compliance organisation
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.
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.
22
63
50
104
7
14
9
16
50 years and older
5,964
344
560
228
176
327
563
Employees
(part 1 and 2)
Female
Male
43
1,205
40-49 years
104
60
78
104
Under 30 years
2,241
157
202
123
Female
55
339
30-39 years
1,656
75
161
55
47
45
195
Male
Female
Male
Employees covered by collective bargaining
31
40
49
77
30
52
Promotions
agreements
3.54
2.71
3.06
3.06
3.25
Training days per staff member
32
44
46
3.38
43
821
1226
Total
Other locations
Ireland
Czech Republic
Deutsche Börse Group
Key data on Deutsche Börse Group's workforce as at 31 December 2018 (part 2)
Further infomation
Notes
511
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
95
95
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.
414
573
820
Management report | Combined non-financial statement
50
93
Average age
0
0
0
0
Junior management
4
0
0
0
0
0
0
Senior and middle management
624
28
14
14
0
0
14
Staff
38
62
Proportion of graduates (%)¹)
70
0
0
0
0
18
1
Disabled employees
606
28
14
18
1
20
2
1
1
20
2
1
5
Senior and middle management
5,340
316
546
210
175
4
307
Full-time equivalents
40
37
40
36
35
34
35
561
862
1
3
Part-time employees
4,699
297
494
204
156
292
512
34
Staff
16
18
5
15
14
44
Junior management
306
335
Deutsche Börse Group | Annual report 2018
Multiple-year return ratio¹)
€bn
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 ☑“Value added: breakdown of corporate performance" section. For the year
under review, a regional breakdown of costs cannot be provided for technical reasons. The company
is reviewing the existing procedure for potential improvements.
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.
104
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Financial statements
Notes
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.
Further infomation
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.
Respect for human rights in the supply chain
1) Based on the ETFs issued in 2016: FlexShares STOXX® Global ESG Impact index and FlexShares STOXX® US ESG Impact index
12,422
11,547
117
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.
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.
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)
20.6
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
Further infomation
Non-financial key indicators: social matters
Transparency
2018
2017
Proportion of companies reporting in accordance with maximum transparency standards")
Security
%
91
91
Availability of cash market trading system?
Availability of derivatives market trading system?
Average monthly cleared volumes across all products³)
%
99.912
99.968
%
99.963
99.967
€ trillion
23.5
131
103
Number of calculated indices
83.4
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
106
In addition to the above-mentioned STOXX indices, Deutsche Börse's ÖkoDAX® index focuses on German
companies active in the renewable energy business.
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.
ESG Impact 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.
STOXX Low Carbon index family
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.
Notes
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").
STOXX Climate 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 Global ESG Leaders and ESG Specialized Leaders index family
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
105
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.
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.
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.
68.2
55.1
91.9
€m
Assets under management in ETFs based on ESG indices from STOXX"
Total assets under management in ETFs based on indices from STOXX
Transparency
31 Dec 2017
31 Dec 2018
ESG criteria
Non-financial key indicators: sustainable index products
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 report on economic
position in this combined management report (see ☑tables entitled “Development of trading activity
on selected European cash markets" and "Development of contracts traded on selected European
derivatives markets").
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.
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.
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
107
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.
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.
Energy and energy-related markets
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.
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.
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.
Number of sustainable index concepts
by clearing members
Management report | Combined non-financial statement
Margin require-
ment of Eurex
Clearing AG2)
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.
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.
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
108
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 ☑ management approach for
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
☑ code of conduct for suppliers, which comprises ESG criteria.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
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 ☑ section entitled “Management approach
for a Group-wide commitment to sustainability".
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.
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.
110
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.
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).
Collateral effectively posted ³)
98.9
98.8
%
%
2017
2018
Stable, transparent and fair markets
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
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.
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 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.
Further infomation
Notes
Financial statements
Management report | Combined non-financial statement
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
109
Non-financial key indicator: respect for human rights
Systems availability
Comparison with the forecast for 2018
Market transparency
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
50
0
Volume and risk
reduction after
multilateral
(CCP) netting
Further infomation
48.5
57% securities
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.
43% cash
amount
outstanding¹)
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.
39.1
Notes
Notional
Management report | Combined non-financial statement
Financial statements
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
Financial statements
Notes
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.
101
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.
Executive and Supervisory Boards
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
Iover cases to the Sanctions Committee.
Deutsche Börse Group | Annual report 2018
102
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
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 ☑Exchange Rules (section IV, sub-section 2) to create the "Prime Standard” in
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.
Stable financial markets
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
segment comply with the ☑ Green Bond Principles of the International Capital Markets Association,
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 www.boerse-frankfurt.de > Bonds > Green Bonds. The bonds included in Deutsche
Börse's segment are admitted for trading at various European stock exchanges, including the
Frankfurt Stock Exchange.
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.
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.
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.
Further infomation
Notes
Financial statements
Executive and Supervisory Boards
Management report | Risk report
Deutsche Börse Group | Annual report 2018
113
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.
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.
Implementation in the Group's organisational structure and workflow
■ DB1 Ventures
Long-term developments
■ Stress tests
■ Changes to business
Risk avoidance
→ Loss
■ Risk metrics
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.
Risk acceptance
■ Deutsche Börse Venture NetworkⓇ
and/or business strategy
Chief Risk Officer/Group Risk Management
Risk management – organisational structure and reporting lines
Business segments
Identify, notify and control
■ Risk map
Chief Risk Officers/Risk management functions
Manage risks in day-to-day operations and report to their
own committees and the Group
Responsible for the risk management of their institution
Executive boards
Monitor the effectiveness of risk management systems and
evaluate risk strategy
Supervisory boards
Clearstream and Eurex Clearing AG
Financial institutions
Identify, notify and control
Business segments
Assess and monitor risks, report to Executive Board and
Supervisory Board
Group Risk Committee (the Group's internal risk committee)
Continuously monitors the overall risk profile
Executive Board of Deutsche Börse AG
Decides on risk strategy and appetite
Monitors the risk management system and its continuing
improvement in light of the risk strategy
Risk Committee of the Supervisory Board
Audit Committee of the Supervisory Board
Evaluates the effectiveness of the risk management system
Monitors the effectiveness of the risk management system
Evaluates the risk strategy and risk management system
Supervisory Board of Deutsche Börse AG
Group-wide
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.
Aggregated risk measurement
Risk types
Existing risks
Business strategy
Interlocking business strategy and risk strategy
Further infomation
Notes
Financial statements
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
Risk strategy/risk appetite
"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.
"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.
Internal risk management is based on the Group-wide detection and management of risk, which is
focused on its risk appetite, see the "Interlocking business strategy and risk strategy" chart. Deutsche
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.
112
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
114
Management report | Risk report
2. Support for growth in the various business segments
Emerging risks
Risk analysis
Root cause
Risk monitoring
Physical security
■Information security
■ Other
■Internal control system
■ Other
measures
■ Insurance
■ Business continuity
Risk scenarios
Risk transfer
Straight-through processing
Compliance
or severity of effect
Reduces frequency of events
Risk mitigation
↓ Risk mitigation
Effect
Internal and external losses
Implied risks
→ Event
■ Legal
Deutsche Börse Group | Annual report 2018
■ Credit risk
Management report | Risk report
Financial statements
Notes
Further infomation
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
Required economic
capital
€m
Risk cover amount
Utilisation
€m
Financial statements
%
917.0
EEX (commodities)
360T (foreign exchange)
158.0
1,640.0
311.0
56
51
33.0
72.0
Eurex (financial derivatives)
46
Management report | Risk report
Deutsche Börse Group | Annual report 2018
German universal banks by risk type
20%
Businesss risks
60%
Financial risks
20%
Operational risks
~ 5
~3
Executive and Supervisory Boards
Deutsche Börse AG
10%
Businesss risks
23%
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.
119
Required economic capital for
Deutsche Börse Group by risk type
Xetra (cash equities)
233.0
300.0
■The return of the European government debt crisis
■ Market share loss in European trading markets
3. Business risk
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
■
■ Default of a credit counterparty
2. Financial risk
■ Threat of tax back-payments
■ Conflicting laws of different jurisdictions
■ Implementation of a financial transaction tax
■Losses from ongoing legal disputes
■ Incorrect processing of client instructions (e.g. corporate actions)
Cyber attacks
■Failure of a trading system
1. Operational risk
The required economic capital includes the following risk types, which are illustrated with specific
examples and then explained in detail:
56
4,619.0
2,573.0
Total
■Incorrect handling of the default of a large customer
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
78
Clearstream (post-trading)
806.0
1,257.0
64
IFS (investment fund services)
74.0
115.0
64
GSF (collateral management)
83.0
135.0
61
STOXX (index business)
114.0
141.0
81
Data (data business)
155.0
120
■ Successful serious abuse of banking applications through a coordinated cyber attack
Required economic capital for
Economic capital
Equity
Universal banks
Executive and Supervisory Boards
Management report | Risk report
Financial statements
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).
Deutsche Börse Group | Annual report 2018
note 15 to the
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.
116
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Risk report
Financial statements
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").
115
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
Existing risks
Notes
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
3. Assess
4. Control
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.
Notes
Executive and Supervisory Boards
Further infomation
Risk profile of Deutsche Börse Group
Notes
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. Economic capital and balance sheet equity are also lower than that of banks (see the ☑“Risk
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).
Financial statements
118
Executive and Supervisory Boards
Management report | Risk report
Financial statements
Notes
Further infomation
Risk profile of Deutsche Börse Group in comparison to German universal banks
€ billion
- 50
- 20
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Risk report
Deutsche Börse Group | Annual report 2018
117
Operational risks
■ Unavailability of systems
■ Service deficiency
■ Damage to physical assets
■ Legal disputes and business practice
Financial risks
Further infomation
■ 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:
Deutsche Börse Group's risk profile
Notes
198.0
Executive and Supervisory Boards
Management report | Risk report
Financial statements
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Risk report
Financial statements
Notes
Further infomation
78
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 ☑note 15 to the consolidated financial
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.
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.
111
Risk report
Deutsche Börse Group | Annual report 2018
■ Force majeure
■ Legal violations
■Flawed internal processes
Flawed data supply
■ Weather catastrophes
■ Terror
■ Internal fraud
121
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.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Risk report
Financial statements
■ Human errors
■ External fraud
↑
■ Damages to or destruction
of data centres
■ Contract risks
■ Employment practice
■ Theft of customer cash
■ Losses from ongoing legal
conflicts
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.
Legal disputes and business
practice
↑
■ Damages to or destruction
of buildings
Damage to physical assets
■ Loss of customer cash
■ Deficiency of trading-
related services
Service deficiency
■ Cyber crime
security
■ Breach of sanctions
provisions
Further infomation
Legal disputes and business practice
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.
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.
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.
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.
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.
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.
Markazi was a party. The claim also addresses customer assets of approximately US$2 billion, which
include assets that are held at Clearstream Banking S.A. and currently subject to US and Luxembourg
litigation brought by US plaintiffs, addressing assets that were previously transferred out of Clearstream
Banking S.A. to Banca UBAE S.P.A.
Further infomation
Notes
Financial statements
Executive and Supervisory Boards
Management report | Risk report
Deutsche Börse Group | Annual report 2018
123
In the context of the ongoing disputes regarding assets of Bank Markazi, Clearstream Banking S.A. was
served with a complaint from Bank Markazi on 17 January 2018 naming Banca UBAE S.P.A. and
Clearstream Banking S.A. as defendants. The complaint filed before the Luxembourg courts primarily
seeks the restitution of assets of Bank Markazi, which the complaint alleges are held on accounts
of Banca UBAE S.P.A. and Bank Markazi with Clearstream Banking S.A. totalling approximately
US$ 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
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.
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 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.
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.
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).
■Inadequate information
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.
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.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Risk report
Financial statements
Notes
Further infomation
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.
122
■ IT hardware flaws
Events
Possible root causes
■ For collateralised and uncollateralised
cash investments
■In securities lending
■ Participation in default fund
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.
■ Outstanding liabilities
Market risk
■ For securities
■ For pension provisions
■In case of balance-sheet currency
mismatches
Liquidity risk
■ Customer default
■ Payment obligations
■ Repayment of customer deposits
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 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.
Reducing credit risk
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.
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.
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.
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.
■ For collateralised and uncollateralised
customer credits
Further infomation
Financial statements
Management report | Risk report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
129
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.
Notes
■ Software flaws
Credit risk
Financial risk at Deutsche Börse Group
↑
■ Settlement
■ Clearing
■ Trading
Unavailability of systems
124
Operational risk
Operational risk at Deutsche Börse Group
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
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.
■ Failure of key infrastructure providers in extreme market conditions associated with failure of lines
of defence
Further infomation
Notes
Financial statements
Executive and Supervisory Boards
Management report | Risk report
Deutsche Börse Group | Annual report 2018
apply to the Group's institutions. As a result, the following explanation focuses on Clearstream and Eurex
Clearing AG.
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
Financial risk
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.
Further infomation
Notes
Financial risk
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
128
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
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.
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.
Management report | Risk report
Deutsche Börse Group | Annual report 2018
Notes
Financial statements
▪ 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.
126
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Risk report
Financial statements
Notes
Further infomation
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.
Executive and Supervisory Boards
Management report | Risk report
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.
Compliance
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.
Insurance policies
Further infomation
■ Functionally effective: the measures must be technically successful.
Notes
Management report | Risk report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
127
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.
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.
Financial statements
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:
130
■ Careful and continuous
check of suppliers'
emergency preparations
■ Utilisation of multiple
suppliers
Executive and Supervisory Boards
Management report | Risk report
Deutsche Börse Group | Annual report 2018
125
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
Emergency and contingency plans
Measures to mitigate operational risk
Financial statements
Despite the ongoing proceedings described above, the Executive Board is not aware of any material
changes to the Group's risk situation.
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.
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.
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.
Further infomation
Notes
Preparations for emergencies and crises
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.
Notes
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).
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.
Suppliers
Further infomation
■ 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
Option to move essential
operational processes to
other sites if staff at one site
are not able to work
•
■ Remote access to systems
for numerous employees
Employees
■ Emergency arrangements
for all essential functions
Workstations
Emergency and crisis management process
■ Trading, clearing and
settlement systems designed
to be available at all times
■ Duplication of all data
centres to contain failure
of an entire location
Systems
Business continuity management
■ Fully equipped emergency
workspaces, ready for use
at all times
Finally, the remaining minimum regulatory equity of Eurex Clearing AG would be drawn upon.
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).
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.
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.
■ 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.
■ Next, the portion of Eurex Clearing AG's equity would be used that exceeds the minimum regulatory
equity.
Financial statements
■ 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).
■ 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.
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:
Further infomation
Notes
Executive and Supervisory Boards
Management report | Risk report
132
■ 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.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Financial statements
Financial statements
Management report | Risk report
Deutsche Börse Group | Annual report 2018
Deutsche Börse Group | Annual report 2018
133
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.
Liquidity risk
Executive and Supervisory Boards
Management report | Risk report
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.
Market risk
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.
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 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.
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.
Further infomation
Notes
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.
131
-
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.
Further infomation
Notes
Financial statements
Management report | Report on opportunities
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
136
Organic growth opportunities
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.
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.
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.
success.
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
Organisation of opportunities management
Report on opportunities
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.
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.
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
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.
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.
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.
Safety for both participants and the clearing house
Further infomation
Notes
Financial statements
Management report | Risk report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Deutsche Börse Group | Annual report 2018
137
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.
Notes
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.
Structural growth opportunities
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.
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,
Further infomation
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.
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.
sources -
Trading and clearing of power and gas products on EEX
Further infomation
Notes
Financial statements
Management report | Report on opportunities
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
138
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.
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.
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.
■ The obligation to report the transactions to a trade repository
■ The obligation to clear standardised OTC derivatives transactions using a central counterparty
Special risk management requirements for transactions in non-standardised 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 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
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.
140
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.
Collateral and liquidity management
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.
Cross-border securities settlement (T2S)
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 settlement of investment funds
Clearing of OTC derivatives
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.
Notes
Financial statements
Management report | Report on opportunities
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
139
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.
Further infomation
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.
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.
Notes
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.
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.
Further infomation
Notes
Financial statements
Management report | Risk report
Executive and Supervisory Boards
Project risk
Deutsche Börse Group | Annual report 2018
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.
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.
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
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.
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.
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.
134
Further infomation
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.
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.
Financial statements
Management report | Report on opportunities
Executive and Supervisory Boards
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.
Outlook
Notes
Financial statements
Overall assessment of the risk situation by the Executive Board
Further infomation
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
135
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 "Risk strategy and risk
management" section.
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.
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.
Summary
Management report | Report on opportunities
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.
150
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.
Regulatory environment
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.
Further infomation
Notes
Financial statements
Management report | Report on expected developments
Executive and Supervisory Boards
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.
Deutsche Börse Group | Annual report 2018
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
Macroeconomic environment
Developments in the operating environment
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.
Report on expected developments
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.
As at 7 August 2018, Deutsche Börse Group acquired a minority interest in HQLAX S. à r. I. - 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.
143
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.
144
Notes
Financial statements
Management report | Report on expected developments
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
145
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.
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.
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.
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.
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.
Further infomation
Notes
Financial statements
Management report | Report on expected developments
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
Further infomation
Further infomation
Financial statements
■ 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.
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:
Cyclical opportunities
■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.
■ 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 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.
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.
■ 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.
Other structural growth opportunities
Expansion of the index business
Further infomation
Notes
Financial statements
Management report | Report on opportunities
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
141
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on expected developments
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
142
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
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.
-
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
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.
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.
Technological opportunities
■ 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.
-
Further infomation
Notes
Financial statements
Management report | Report on opportunities
Notes
Forecast for results of operations 2019
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.
Exceptional effects impacting operating costs
Notes
Financial statements
Management report | Report on expected developments
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
148
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.
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.
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.
Trends in non-financial performance indicators
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.
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.
Changes in pricing models
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.
Data 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.
STOXX (index business) segment
Further infomation
Further infomation
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.
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 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.
General position
Business and operating environment
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.
Deutsche Börse AG (disclosures based on the HGB)
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.
Further infomation
Notes
Financial statements
Management report | Deutsche Börse AG (disclosures based on the HGB)
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
149
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
Overall assessment by the Executive Board
Net revenue from structural opportunities (excluding exceptional effects)
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.
Future development of the Group's financial position
Notes
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.
Management report | Report on expected developments
Xetra (cash equities) 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.
360T (foreign exchange) 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.
EEX (commodities) segment
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.
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.
+ -10%
~€100 million
+ >5%
2,770.4
244.2
2019
Forecast for
Based on
2018
€m
Eurex (financial derivatives) segment
Net profit for the period attributable to Deutsche Börse AG shareholders (excluding exceptional effects)
Financial statements
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.
146
1,002.7
Executive and Supervisory Boards
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Deutsche Börse Group | Annual report 2018
147
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.
GSF (collateral management) 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.
=
IFS (investment fund services) segment
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.
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.
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.
Clearstream (post-trading) segment
Further infomation
Notes
Management report | Report on expected developments
Financial statements
3.1
-2.3
75.7
96.3
9.7
8.7
- 10.3
3.7
235.2
-21.4
229.8
780.9
0.7
2.9
-5.6
14.3
13.5
7.1
836.6
%
-16.2
€m
€m
314.3
27.4
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.
2.2
2018
Change
Total
Other operating expenses
Depreciation and amortisation
Staff costs
Overview of total costs
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.
Further infomation
Notes
Financial statements
Management report | Deutsche Börse AG (disclosures based on the HGB)
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
151
The revenue contributed by the EEX (commodities) and 360T (foreign exchange) segments is generated
mainly by IT services. Therefore, the explanations in the "EEX (commodities) segment” and “360T
(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 "Xetra (cash equities) segment" section. Revenues attributable to the Clearstream (post-trading),
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.
For more information on the development of the Eurex (financial derivatives) segment, please refer to the
"Eurex (financial derivatives) segment" section.
3.6
1,348.0
1,396.5
10.2
180.4
198.8
26.8
2017
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.
Total
1,348.0
1,396.5
%
€m
€m
Change
2017
2018
1) Calculation based on weighted average of shares outstanding
Earnings per share (€)
Net profit for the period
EBITDA
Net profit from equity investments
Total costs
Sales revenue
Performance figures for Deutsche Börse AG
Further infomation
Notes
Financial statements
Management report | Deutsche Börse AG (disclosures based on the HGB)
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
€m
3.6
921.2
915.2
0.7
Data
STOXX (index business)
GSF (collateral management)
IFS (investment fund services)
Clearstream (post-trading)
Xetra (cash equities)
360T (foreign exchange)
EEX (commodities)
Eurex (financial derivatives)
Sales revenue by segment
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.
2018
Results of operations of Deutsche Börse AG
3.30¹)
2.88¹)
-13.6
615.7
532.2
-6.4
887.8
831.2
-30.1
346.6
242.3
-12.1
2017
€m
Change
%
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.
157
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
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
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.
Composition of the total target remuneration
Annual payout
Non-performance-
related basic
remuneration
45%
Long-term incentive components (3-5 years)
25%
Performance-related remuneration components
Pension
commitments
Contractual
Performance bonus
Performance shares
ancillary
benefits
Cash
30%
Shares
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".
Remuneration system and total Executive Board remuneration
Total Deutsche Börse AG
31 Dec 2018
%
658
44.8
292
19.9
519
35.3
1,469
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 remuneration report for
Deutsche Börse Group.
Principles and targets
Corporate governance statement in accordance with section 289f HGB
Opportunities and risks facing Deutsche Börse AG
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.
Therefore, please refer to the ☑ risk report and the ☑report on opportunities of Deutsche Börse Group.
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 ☑ section entitled “Other financial obligations and transactions not
included in the balance sheet" in the notes to the annual financial statements of Deutsche Börse AG.
The description of the internal control system (ICS) required by section 289 (4) HGB is provided in the
"Group management" section.
156
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Report on expected developments at Deutsche Börse AG
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 report on expected developments regarding the cyclical environment and the structural
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".
The corporate governance statement in accordance with section 289f HGB corresponds to that of
Deutsche Börse Group. Therefore, please refer to the “Combined corporate governance statement and
corporate governance report" section.
Over 15 years
% = Proportion of the total target remuneration
Performance-related component (cash component)
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 O 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
159
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
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
shares
3-year holding period
133
75
Floor
-30
Net income growth (%)
Сар
-20
-10
0
+7.5 +10
+15
+20
+30
Double-digit growth
Assessing individual target achievement
100
Non-performance-related component (cash component)
50%
cash
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.
158
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Financial statements
Notes
Performance
multiplier
Further infomation
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
☑
50%
Performance shares
160
5 to 15 years
Employee length of service
Executive and Supervisory Boards
Management report | Deutsche Börse AG (disclosures based on the HGB)
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
2018
€m
642.3
- 444.1
Deutsche Börse Group | Annual report 2018
2017
€m
700.1
688.8
- 835.0
-906.6
-297.1
Net assets of Deutsche Börse AG
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
2017
€m
€m
- 807.8
117.9
153
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.
301.5
225.9
33.5
57.8
37.3
55.0
561.9
652.1
- 13.8
921.2
915.3
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).
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).
152
Executive and Supervisory Boards
Management report | Deutsche Börse AG (disclosures based on the HGB)
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.
Deutsche Börse Group | Annual report 2018
Less than 5 years
126.7
68.8
97.8
22
1.5
5
0.3
4
0.3
2
0.1
1,469
100
31 Dec 2018
%
156
1,436
10.6
30.2
410
27.9
460
31.3
1,469
100
155
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Deutsche Börse AG (disclosures based on the HGB)
Financial statements
Notes
Further infomation
443
74.9
%
Total Deutsche Börse AG
5,700.1
5,314.4
5,892.9
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).
154
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Deutsche Börse AG (disclosures based on the HGB)
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.
31 Dec 2018
Deutsche Börse AG 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
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).
Management report | Remuneration report
Deutsche Börse Group | Annual report 2018
Thomas Book¹)
Financial statements
Management report | Remuneration report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
169
Ancillary benefits: €3,700
Performance shares January to March 2018: 3,339
Notes
Performance bonus January to March 2018: €704,000
■
Fixed remuneration: €375,000
■
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:
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.
Remuneration of former CEO Carsten Kengeter
With regard to both Mr Preuss and Mr Tessler, the company has decided to waive the post-contractual
non-compete clause
■
■
Further infomation
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.
as at
31 Dec 2017
31 Dec 2018
31 Dec 2017
%
as at
as at
as at
31 Dec 2018
%
2018
€ thous.
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.
[
Present value/defined benefit
obligation
Replacement rate
Pensionable
income
Retirement benefits
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 “Benefits granted" and "Benefits received" tables. The information disclosed in
accordance with section 314 of the HGB is shown in the "Benefits received" tables.
Amount of Executive Board remuneration
Mr Kengeter has no pension claims; his previous claim on pension benefits lapsed when he left the
company.
Pension expense
2018
Number of granted performance shares July to December 2018: 2,859
"
Payments to former members of the Executive Board
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.
Loans to Executive Board members
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.
Sideline activities
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.
Post-contractual non-compete clause
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).
Miscellaneous
Caps on the total amount of remuneration
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.
the share ownership guidelines
Automated share purchase designed to fulfil the plan conditions as well as
Further infomation
Notes
Financial statements
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.
Performance bonus July to December 2018: €835,000
168
Executive and Supervisory Boards
■
Fixed remuneration: €390,300
■
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:
Performance shares November to December 2018: 1,201
Ancillary benefits: €5,700
Performance bonus November to December 2018: €350,700
■
Deutsche Börse Group | Annual report 2018
"
■
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:
Benefits in connection with the termination of Executive Board appointments
Further infomation
Notes
Financial statements
Management report | Remuneration report
Fixed remuneration: €133,300
Management report | Remuneration report
2017
€ thous.
300.1
3,207.3
3,517.8
48.0
48.0
500.0
Gregor Pottmeyer
293.3
0
0
256.5
48.0
500.0
Stephan Leithner
0
147.9
295.2
0
Hauke Stars
40.0
Executive and Supervisory Boards
170
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.
518.4
1,690.6
4,756.4
6,367.4
500.0
84.0
3,000.0
Total
225.1
269.6
1,549.1
1,918.2
36.0
224.0
€ thous.
114.1
500.0
Total
45.0
50.0
700.0
Jeffrey Tessler
50.0
50.0
2,000.0
800.0
0
4,829.0
45.0
500.0
Defined benefit
system
€ thous.
€ thous.
Andreas Preuss
48.0
145.0
12,800.2
4,829.0
22,458.2
Christoph Böhm
0
677.8
0
560.8
40.0
1,000.0
95.0
Theodor Weimer
Defined contribu-
288.2
1,288.4
1,541.1
1,000.2
0
356.1
969.0
216.0
11,928.9
4,515.6
16,444.5
tion system
Executive and Supervisory Boards
Ancillary benefits: €123,500
167
115
133
150
200
250
300
Target achievement (%)
100
Assessing net income growth for performance shares
Assessing net income for performance shares
Further infomation
Notes
Financial statements
Management report | Remuneration report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
162
50
0
Notes
Financial statements
Management report | Remuneration report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
163
Double-digit growth
Floor
+20
+7.5 +10
+5
0
-5
Сар
Net income growth (%)
-10
+15
4) In the last calendar month of the performance period, including all dividends paid during the performance period
5) Due in three tranches
3) Capped at 250 per cent of number granted
Deutsche Börse Group | Annual report 2018
The PSP has two variables:
Further infomation
Notes
Financial statements
Management report | Remuneration report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
■ 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.
161
Principles governing the PSP and assessing target achievement for performance shares
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.
Determining the performance multiplier
Further infomation
Notes
Financial statements
Management report | Remuneration report
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".
■ 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
1) In the calendar month preceding the start of the performance period
Final
payment for
share
purchase 5)
Avg. share price
✗ for Deutsche
Börse shares)
Final number
of (phantom)
performance
shares³)
Relative KPI
Absolute KPI
TSR for Deutsche Börse
shares vs index companies
50%
shares granted
50% net income growth
Number of
(phantom)
performance
Year 12) Year 2 Year 3 Year 4 Year 5
Performance period
shares¹)
Deutsche Börse
Avg. share price for
remuneration
Further infomation
Assessing the TSR performance for Deutsche Börse shares
2) Year in which performance shares are granted
Assessing the total shareholder return (TSR) for Deutsche Börse shares for performance shares
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.
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.
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.
Further infomation
Notes
Financial statements
Management report | Remuneration report
Early retirement pension
Executive and Supervisory Boards
165
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
Retirement benefits
Pension commitments
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.
Contractual ancillary benefits
Basic remuneration
(monthly payment)
Deutsche Börse Group | Annual report 2018
-
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.
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 O per cent (floor) to 250 per cent (cap). A O 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.
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".
Share ownership guidelines
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.
Change of control
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.
Severance 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.
Transitional payments
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.
Further infomation
Notes
Financial statements
Management report | Remuneration report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
166
Target achievement - cash
(annual payout)
3-year holding period)
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.
Target achievement - shares
(calculated annually,
5-year holding period)
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
164
Relative TSR vs index (percentile rank)
70th 75th 80th
60.
0
Management report | Remuneration report
50
150
175
200
250
300
Target achievement - shares
(annual payout,
Target achievement (%)
100
Financial statements
50th
% = proportion of total target remuneration
Hebel für die Anreizkomponenten:
O bis 250% jährlich
Maximum total remuneration ¹)
1) No cap on share price performance
Performance-related component (share-based payment)
Performance-related component (cash component)
Non-performance-related component (cash component)
Basic remuneration
Cash
Notes
bonus
Performance
Shares
Performance shares
Target remuneration
Basic remuneration, and annual and long-term incentive components
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.
Further infomation
Hebel für die Anreizkomponenten:
0 bis 200%
Total
2018
Ancillary benefits
Management report | Remuneration report
2018
Fixed remuneration
2018
2018
(min)
(since 1 November 2018)
Notes
Christoph Böhm
(CEO)
Theodor Weimer
Benefits granted
Further infomation
Executive and Supervisory Boards
Financial statements
2018
(CIO/COO)
(max)
22.9
€ thous.
22.9
Deutsche Börse Group | Annual report 2018
11.4
22.9
120.0
120.0
120.0
1,500.0
2017
1,500.0
€ thous.
€ thous.
(max)
(min)
2018
€ thous.
€ thous.
€ thous.
€ thous.
1,500.0
172
Tranche 2018
1) Chief Executive Officer until 31 December 2017
Tranche 2016
18,334
8,986
9,348
Tranche 2017
14,769
7,565
7,204
8,952
Tranche 2018
Total 2015 to 2018 tranches
Tranche 2015
Tranche 2016
Tranche 2017
Carsten Kengeter¹)
37,653
11.4
Total 2016 to 2018 tranches
Andreas Preuss²)
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.
9,053
Total 2016 to 2018 tranches
210,810
40,565
14,290
7,185
7,105
14,553
7,133
7,420
18,005
11,722
5,718
Total 2015 to 2018 tranches
Total 2016 to 2018 tranches
Tranche 2016
Tranche 2017
Tranche 2018
Jeffrey Tessler³)
51,108
6,004
11.4
71.7
1,522.9
Fixed remuneration
Stephan Leithner
(since 2 July 2018)
Thomas Book
(since 1 July 2018)
Benefits granted
3) The total remuneration (excluding ancillary benefits) is capped at €9.5 million.
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.
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.
€ thous.
Ancillary benefits
2017
279.3
559.2
9,500.0³)
147.9
147.9
147.9
677.8
no max.
9,500.0³)
131.4
Total
2018
(min)
13,265
360.0
325.0
325.0
325.0
€ thous.
€ thous.
€ thous.
2018
2017
2018
(min)
2018
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
2017
2018
(max)
2018
(max)
1,522.9
411.3
1,522.9
677.8
2,200.7
0
186.6
no max.
0
2,400.0
Multi-year variable remuneration
186.6
0
no max.
93.3
0
1,100.0
Cash component performance
bonus (50%)
One-year variable remuneration
131.4
131.4
131.4
1,522.9
2,200.0
no max.
Share component performance
3-year holding period)¹)
5,022.9
677.8
5,700.7
Total remuneration
Pension expense
Total
no max.
0
93.3
no max.
bonus (50%,
0
(5-year term)²)
Performance shares
no max.
0
93.3
no max.
0
1,100.0
1,300.0
6,670
Further infomation
Tranche 2016
Stephan Leithner
Thomas Book
Christoph Böhm
Theodor Weimer
(Prior-year figures in brackets)
2018 total expense for share-based payments
Further infomation
Notes
Expense
recognised
(total)
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Jutta Stuhlfauth (Deputy Chairperson since 16 May 2018)
Gerd Tausendfreund³)
full year
full year
172.7
145.0
16 May - 31 Dec
Management report | Remuneration report
72.7
€ thous.
Carrying
amount as at
the reporting
1,720.3
1,107.9
Hauke Stars
(663.7)
(532.6)
1,864.4
1,200.7
Gregor Pottmeyer
588.3
126.7
116.9
116.9
42.2
42.2
588.3
€ thous.
(total)
date
126.7
(491.4)
0
1 Jan - 16 May
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Notes
360.0
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)
Executive and Supervisory Boards
On 6 December 2018, the Executive Board and Supervisory Board of Deutsche Börse AG issued the
following Declaration of Compliance:
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
"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
Johannes Witt6)
Deutsche Börse Group | Annual report 2018
9) Appointed to the Supervisory Board by court order on 16 May 2018
full year
61.3
154.0
Amy Yip
full year
full year
118.5
138.0
179
2,183.7
Total
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
1,842.0
6,595
(612.4)
Andreas Preuss²)
Tranche 2018
Gregor Pottmeyer
5,896
Total 2018 tranche
5,896
3,020
2,876
Tranche 2018
5,752
Stephan Leithner
Total 2018 tranche
5,440
2,786
2,654
Tranche 2018
Thomas Book
1,966
1,966
5,440
1,007
6,040
Tranche 2017
13,508
6,621
6,887
Tranche 2017
10,880
5,573
5,307
Tranche 2018
11,792
Hauke Stars
Total 2016 to 2018 tranches
14,377
7,229
7,148
Tranche 2016
14,639
7,175
7,464
40,808
Carsten Kengeter¹)
959
27,374
171
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.
(14,824.0)
(10,186.1)
14,541.1
11,774.1
(659.7)
(529.4)
Deutsche Börse Group | Annual report 2018
4,461.4
(831.2)
(667.0)
5,620.9
4,789.7
(12,057.0)
(7,965.7)
Total
Jeffrey Tessler³)
3,801.7
27,374
Executive and Supervisory Boards
Financial statements
31 Dec 2018
as at
phantom shares
Number of
number of
phantom
shares since
the grant date
14,021
Adjustments of
on the
grant date
13,353
phantom shares
Management report | Remuneration report
Number of
Tranche 2018
Christoph Böhm
Total 2018 tranche
Tranche 2018
Theodor Weimer
Number of phantom shares
Further infomation
Notes
Total 2018 tranche
360.0
15.74)
15.74)
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
6,887
Financial statements
Further infomation
Benefits received
Andreas Preuss 4)
(Deputy CEO
until 31 October 2018)
Fixed remuneration
Ancillary benefits ¹)
Total
Jeffrey Tessler 5)
Notes
5,307
7,464
5,752
280.0
560.0
560.0
516.7
516.7
Less variable share component
Less pension expense
-295.2
-300.1
Total remuneration (section 314 of the HGB)
1,597.7
3,022.8
-293.3
2,520.1
-269.6
2,710.6
-225.1
2,307.5
Number of phantom shares (no-par value share)³)
2,876
(until 30 June 2018)
Total
2018
2017
242.2
106.5
4,974.2
3,057.1
One-year variable remuneration
Cash component performance bonus (50%)
876.7
757.5
417.5
601.2
6,098.8
2,521.5
Multi-year variable remuneration
876.7
757.5
417.5
601.2
2,950.6
Plus performance shares
4,732.0
494.4
2018
2017
€ thous.
€ thous.
€ thous.
€ thous.
2018
€ thous.
20176)
€ thous.
666.7
800.0
390.3
28.3
33.0
104.1
695.0
833.0
780.6
18.2
798.8
2,015.9
2,463.5
2,253.4
€ thous.
2018
€ thous.
2017
2018
2017
€ thous.
€ thous.
€ thous.
360.0
720.0
720.0
650.0
650.0
5.7
29.2
30.5
24.9
€ thous.
24.8
2017
(Director of Labour
Relations)
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
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
Stephan Leithner
(since 2 July 2018)
Gregor Pottmeyer
(CFO)
Hauke Stars
2018
6,098.8
365.7
750.5
Performance shares (5-year term)
Total
1,317.7
2,462.8
1,960.1
2,193.9
1,790.8
Pension expense
295.2
300.1
293.3
269.6
225.1
Total remuneration (German Corporate
Governance Code)²)
1,612.9
2,762.9
558.0
749.2
759.5
856.8
674.9
674.8
One-year variable remuneration
Cash component performance bonus (50%)
856.8
604.8
759.5
558.0
Multi-year variable remuneration
476.0
856.8
604.8
759.5
558.0
Share component performance bonus
(50%, 3-year holding period)
476.0
604.8
2,521.5
Share component performance bonus
(50%, 3-year holding period)
876.7
full year
full year
146.0
149.0
Marion Fornoff³)
1 Jan - 15 Aug
full year
84.2
114.0
Hans-Peter Gabe5)
Craig Heimark)
1 Jan - 15 Aug
full year
86.8
112.0
1 Jan - 16 May
full year
Karl-Heinz Flöther
45.7
196.0
full year
full year
full year
260.0
266.0
Ann-Kristin Achleitner
16 May - 31 Dec
full year
95.0
0
full year
118.5
142.0
Markus Beck4)
15 Aug-31 Dec
55.8
0
Richard Berliand (Deputy Chairman until 16 May 2018)
full year
168.3
Nadine Absenger³)
108.0
24 May - 31 Dec
full year
61.3
146.0
24 May - 31 Dec
102.7
0
Florian Rodeit5) 9)
16 May 15 Aug
45.3
0
Carsten Schäfer³)
28 Aug 31 Dec
53.2
0
Erhard Schipporeit
1 Jan 16 May
full year
1 Jan - 16 May
Martin Jetter"
Joachim Nagel"
0
89.7
0
Susann Just-Marx4)
15 Aug 31 Dec
53.2
0
Achim Karle)
28 Aug 31 Dec
53.2
0
Cornelis Kruijssen4)
15 Aug 31 Dec
53.2
0
Barbara Lambert³)
16 May 31 Dec
114.7
Monica Mächler)
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.
Joachim Faber (Chairman)
2017²)
3,255.9
3,348.2
1,437.4
2,289.4
20,134.0
9,906.9
Plus performance shares
584.5
701.4
278.4
556.7
3,871.2
2,334.8
Less variable share component
Less pension expense
-807.5
Total remuneration (section 314 of the HGB)
Total remuneration (German Corporate
Governance Code)²)
3,032.9
1,806.8
288.2
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
2,962.2
€ thous.
-1,000.2
3,049.4
-288.2
2,557.9
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Remuneration report
Financial statements
Notes
Further infomation
Supervisory Board remuneration"
2018
2017
20182)
€ thous.
Financial statements
-108.0
1,607.8
Management report | Remuneration report
Deutsche Börse Group | Annual report 2018
-2,962.2
21,043.0
-1,806.8
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
Executive and Supervisory Boards
2,654
959
13,353
24.8
749.2
749.2
749.2
750.5
674.9
674.9
674.9
674.8
One-year variable remuneration
Cash component performance
bonus (50%)
560.0
0
1,120.0
Multi-year variable remuneration
1,120.0
0
24.9
no max.
24.9
30.5
2018
(max)
2017
€ thous.
€ thous.
€ thous.
720.0
720.0
720.0
720.0
650.0
650.0
650.0
650.0
29.2
29.2
29.2
24.9
2018
(min)
560.0
1,120.0
0
560.0
2,429.2
300.1
0
no max.
2,729.3
749.2
300.1 300.1
1,049.3 9,500.0³)
no max.
560.0
2,430.5
293.3
2,723.8
516.7
0
no max.
2,225.0
269.6
674.9
269.6
no max.
269.6
516.7
2,224.9
225.1
2,494.6
944.5
9,500.0³)
Total remuneration
516.7
Pension expense
(5-year term)²)
1,033.4
1,033.4
0
no max.
516.7
1,033.4
Share component performance
bonus (50%,
3-year holding period)"
560.0
0
no max.
560.0
516.7
0
no max.
516.7
Performance shares
Total
2,450.0
2018
€ thous.
€ thous.
no max.
560.0
0
no max.
Share component performance
bonus (50%,
3-year holding period)¹)
258.3
0
no max.
280.0
0
no max.
Performance shares
(5-year term)²)
Total
Pension expense
0
Total remuneration
516.6
560.0
15.74)
5.7
5.7
5.7
340.7
340.7
340.7
365.7
365.7
365.7
One-year variable remuneration
Cash component performance
bonus (50%)
258.3
0
516.6
280.0
0
Multi-year variable remuneration
€ thous.
258.3
1,115.6
356.1
1,471.7
no max.
Further infomation
Benefits granted
Gregor Pottmeyer
(CFO)
Hauke Stars
(Director of Labour Relations)
Fixed remuneration
Ancillary benefits
Total
2018
2018
2018
(min)
(max)
2017
€ thous.
€ thous.
Notes
0
Financial statements
Executive and Supervisory Boards
280.0
0
no max.
340.7
356.1
696.8
no max.
356.1
9,500.0³)
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
Deutsche Börse Group | Annual report 2018
Management report | Remuneration report
172.0
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.
3) The total remuneration (excluding ancillary benefits) is capped at €9.5 million.
2018
€ thous.
2017
€ thous.
2018
€ thous.
2017
€ thous.
2018
€ thous.
2017
€ thous.
1,500.0
120.0
325.0
22.9
11.4
15.72)
1,522.9
131.4
(since 1 July 2018)
340.7
Thomas Book
(CIO/COO
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
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
Theodor Weimer
(CEO)
Christoph Böhm
since 1 November 2018)
556.7
2,468.9
288.2
One-year variable remuneration
2,117.5
6,435.7
590.5
1,575.2
Plus performance shares
1,300.0
93.3
258.3
Less variable share component
Less pension expense
-677.8
-147.9
-356.1
Total remuneration (section 314 of the HGB)
7,057.9
535.9
1,477.4
Number of phantom shares (no-par value share)4)
Governance Code)³)
Cash component performance bonus (50%)
Total remuneration (German Corporate
147.9
155.6
439.2
Multi-year variable remuneration
2,117.5
155.6
439.2
Share component performance bonus
(50%, 3-year holding period)
2,117.5
155.6
439.2
Performance shares (5-year term)
Total
5,757.9
442.6
1,219.1
Pension expense
677.8
356.1
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.
no max.
no max.
390.3
390.3
390.3
780.6
28.3
28.3
695.0
695.0
28.3
695.0
33.0
104.1
104.1
104.1
18.2
833.0
494.4
494.4
€ thous.
494.4
€ thous.
2017
Benefits granted
Andreas Preuss4)
Fixed remuneration
(Deputy CEO until 31 October 2018)
Jeffrey Tessler5)
(until 30 June 2018)
2018
2018
(min)
2018
(max)
€ thous.
€ thous.
666.7
666.7
€ thous.
666.7
2017
€ thous.
800.0
2018
€ thous.
2018
(min)
2018
(max)
€ thous.
494.4
108.0
108.0
602.4 9,500.0³)
798.8
Total
584.5
no max.
701.4
278.4
0
no max.
556.7
Performance shares
(5-year term)²)
Total
Pension expense
Total remuneration
584.5
2,448.5
807.5
no max.
no max.
3,256.0
701.4
278.4
695.0
2,937.2 1,329.5
807.5 807.5 1,000.2 108.0
1,502.5 9,500.0³) 3,937.4 1,437.5
3-year holding period)")
Ancillary benefits
bonus (50%,
1,113.4
One-year variable remuneration
Cash component performance
bonus (50%)
584.5
0
1,169.0
Multi-year variable remuneration
1,169.0
0
no max.
701.4
1,402.8
278.4
0
556.7
556.7
556.7
0
no max.
Share component performance
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.
476.0
Responsibilities
■Monica Mächler (until 16 May 2018)
(16 May 15 Aug 2018)
■ Hans-Peter Gabe¹)
■ Karl-Heinz Flöther
■Markus Beck" (since 4 Sep 2018)
(since 16 May 2018)
■ Nadine Absenger¹
(Chairperson) (since 16 May 2018)
■Barbara Lambert
■ Erhard Schipporeit (Chairman)
(until 16 May 2018)
Audit Committee
Members
Supervisory Board committees during 2018: composition and responsibilities
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.
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.
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
185
■ Joachim Nagel (since 24 May 2018)
■ Jutta Stuhlfauth" (since 4 Sep 2018)
■Johannes Witt" (until 16 May 2018)
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 ☑"Supervisory
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.
Composition
■ 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)
Nomination Committee¹)
Further infomation
Notes
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
186
1) Employee representative
■ 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
■ 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
■ Deals with non-audit services rendered by the external auditor
■ Deals with the required independence of the external auditor
■ 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
■ 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
■ Half-yearly financial reports, plus any quarterly financial reports, if applicable
■ Deals with accounting issues, including oversight of the accounting and reporting process
■ Audit reports
■Deals with issues relating to the adequacy and effectiveness of the company's control systems - in
particular, to risk management, compliance and internal audit
■ Deals with issues relating to the preparation of the annual budget and financial topics, particularly
capital management
Responsibilities
■ 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
At least four members who are elected by the Supervisory Board
Supervisory Board committees
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.
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.
Risk and control management policies
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.
Whistleblowing system
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.
Sector-specific policies
Frankfurt Declaration ☑www.deutsche-boerse.com/frankfurt-declaration: the 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.
International Labour Organisation ☑www.ilo.org: this UN agency is the international 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.
Diversity Charter ☑www.diversity-charter.com: as a signatory to the Diversity Charter, the company
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.
United Nations Global Compact ☑www.unglobalcompact.org: this voluntary business initiative
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.
Further infomation
Notes
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
182
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:
Values
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 ☑www.deutsche-boerse.com >
Sustainability > Set an example > Procurement management.
Code of conduct for suppliers and service providers
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.
Equal opportunities and protection against undesirable behaviour
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.
183
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
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.
Deutsche Börse AG's Supervisory Board
More information on the Executive Board, its composition, members' individual appointments and
biographies can be found at ☑ www.deutsche-boerse.com/execboard.
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
184
Members
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.
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 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
Deutsche Börse AG's Executive Board
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.
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.
Working practices of the Executive Board and the Supervisory Board
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
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 ☑“Overview of Deutsche Börse Group -
Organisational structure" section.
■ Joachim Faber (Chairman)
■ Ann-Kristin Achleitner
(until 16 May 2018)
■ Erhard Schipporeit (until 16 May 2018)
■ Jutta Stuhlfauth") (until 16 May 2018)
1) Employee representative
Composition
■ 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
187
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
Strategy Committee
Members
■ Joachim Faber (Chairman)
■ Ann-Kristin Achleitner
■Richard Berliand (until 16 May 2018)
■Marion Fornoff¹)
■ Monica Mächler (until 16 May 2018)
■ Barbara Lambert (since 16 May 2018)
(since 4 Sep 2018)
■ Cornelis Kruijssen¹
■ 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.
(16 May 15 Aug 2018)
2) Employee representative
Members
■Richard Berliand (Chairman)
(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)
Risk Committee
■
■ Hans-Peter Gabe" (until 16 May 2018)
■ Achim Karle" (since 4 Sep 2018)
■Florian Rodeit¹)
1) Employee representative
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
Chairman's Committee (since 16 May 2018)
Members
■ Joachim Faber (Chairman)
■Nadine Absenger¹)
■Amy Yip (until 16 May 2018)
(since 16 May 2018)
■Gerd Tausendfreund²)
(since 16 May 2018)
■ Jutta Stuhlfauth2)
■ Martin Jetter (since 24 May 2018)
(3 Jan 15 Aug 2018)
■Marion Fornoff 2)
(since 16 May 2018)
■Richard Berliand
■Markus Beck2) (since 4 Sep 2018)
■ Johannes Witt¹) (until 16 May 2018)
■Carsten Schäfer" (since 4 Sep 2018)
(16 May 15 Aug 2018)
■Florian Rodeit¹)
(16 May - 15 Aug 2018)
■ Carsten Schäfer" (since 4 Sep 2018)
■Jutta Stuhlfauth" (until 15 Aug 2018)
■ Amy Yip
1) Employee representative
Composition
■Chaired by the Chairman of the Supervisory Board
■ 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
■ Susann Just-Marx (since 4 Sep 2018)
Technology Committee
■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 Karle (since 4 Sep 2018)
■ Cornelis Kruijssen¹
(since 4 Sep 2018)
Members
■Chaired by the Chairman of the Supervisory Board
■ Environmental awareness
■ Risk management
Joachim Faber (Chairman)
Regulatory
requirements
Clearing,
settlement and
custody
business
Information
technology and
security,
digitalisation
compliance
and
Accounting,
finance, audit
markets
the capital
management
exchanges and
Risk
Business
models of
Supervisory Board members' general qualification requirements
The current composition of the Supervisory Board fulfils these criteria concerning the qualification of its
members.
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
+
189
+
+
+
+
Joachim Nagel
Amy Yip
+
+
+
+
Barbara Lambert
+
+
+
Martin Jetter
+
+
Karl-Heinz Flöther
+
+
+
Richard Berliand
+
+
Ann-Kristin Achleitner
Regulatory requirements
■
Clearing, settlement and custody business
Composition
■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
1) Employee representative
188
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
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)
■Chaired by the Chairman of the Supervisory Board
■ Jutta Stuhlfauth¹)
■Richard Berliand
■ Tasks and duties pursuant to section 27 (3) of the MitbestG
■Jutta Stuhlfauth¹)
■ Information technology and security, digitalisation
▪ Risk management and compliance
Accounting, finance, audit
"
■ Business models of exchanges and the capital markets
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:
General qualification requirements
■ Understanding of the member's own position and responsibilities
■ Understanding of Deutsche Börse Group's structure
■ Understanding of Deutsche Börse AG's activities
+
Knowledge of the financial services sector
■ Understanding of the corporate governance system
■ Analytical and strategic skills
■ Understanding of commercial issues
Ideally, each Supervisory Board member holds the following basic qualifications:
Individual (basic) 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.
Qualification requirements
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.
Targets for composition and qualification requirements of the Supervisory Board
1) Employee representative
■
+
+
+
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.
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.
Deutsche Börse AG also largely complies with the suggestions of the Code and deviates only regarding
the following aspects:
Disclosures on suggestions of the Code
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 ☑www.deutsche-boerse.com/
declcompliance.
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."
Information on corporate governance practices
3. Composition of the Nomination Committee (section 5.3.3 of the Code)
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
■ Deputy Chairperson of the Supervisory Board as well as one shareholder representative and one
employee representative each
Conduct policies
181
■Combat of bribery and corruption
"
■ Personal account dealing, as well as the prevention of insider dealing and market manipulation
Company resources and assets
■ Conflicts of interest
O Confidentiality and the handling of sensitive information
■
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.
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:
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Code of business conduct for employees
■ Whistleblowers
Composition
+
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.
190
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.
Gerd Tausendfreund (until 16 May 2018)
9
9
100
Johannes Witt (until 16 May 2018)
Amy Yip
8
89
100
13
13
8
8
100
Erhard Schipporeit (until 16 May 2018)
100
6
6
Carsten Schäfer (since 28 August 2018)
100
2
2
Florian Rodeit (from 16 May to 15 August 2018)
100
11
11
9
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.
Average attendance rate
1) Since attendance at workshops is voluntary for Supervisory Board members, such workshops are not taken into account when calculating the average attendance rate.
18
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.
Topics addressed during plenary meetings of the Supervisory Board
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
Craig Heimark, *1954
Managing Partner
99
19
Hawthorne Group LLC, Palo Alto
Financial statements
Nadine Absenger, ¹) *1975
Head of the legal department
Deutscher Gewerkschaftsbund,
National Executive Board, Berlin
Nationality: German
since 16 May 2012
Board member
Frankfurt/Main
Nationality: German
department Deutsche Börse AG,
Staff member in the Group
Organisational Services
Deputy Chairwoman
Lawyer, M.B.A. (Wales)
Jutta Stuhlfauth,¹) *1961
since 20 May 2009
Independent Management
Consultant, Grünwald
Nationality: German
Board member
Joachim Faber, *1950
Chairman
The Supervisory Board
Further information
Notes
Management report
Executive and Supervisory Boards | The Supervisory Board
Deutsche Börse Group | Annual report 2018
Business Administration
(Diplom-Kaufmann)
Frankfurt/Main
Member of the Executive Board
and Deputy Chief Executive Officer,
Deutsche Börse AG,
Chief Information Officer/
Board member
since 16 May 2018
Chief Operating Officer
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
13
Jeffrey Tessler, *1954
(until 30 June 2018)
MBA
Andreas Preuss, *1956
(until 31 October 2018)
Graduate degree in
Ann-Kristin Achleitner, *1966
Scientific Co-Director
Center for Entrepreneurial and
Financial Studies (CEFS)
at the Technische Universität
München (TUM), Munich
Nationality: German
since 11 May 2016
Board member
Erhard Schipporeit, *1949
Independent Management
Consultant, Hanover
Nationality: German
16 May 2018 to 15 August 2018
Board member from
Joachim Nagel, *1966
Member of the Executive Board
KfW Group, Dreieich
Nationality: German
Barbara Lambert, *1962
Independent Management
Consultant, La Rippe, Switzerland
Nationality: German, Swiss
Board member
since 16 May 2018
Board member
since 15 August 2018
Cornelis Kruijssen¹) *1963
Expert, staff member in
the Service Management unit
Deutsche Börse AG,
Frankfurt/Main
Nationality: Dutch
since 28 August 2018
Achim Karle,¹) *1973
Staff member in the Equity &
Index Sales EMEA unit
Eurex Frankfurt AG,
Frankfurt/Main
Nationality: German
Board member
Nationality: German
Board member
since 15 August 2018
European Energy Exchange AG,
Leipzig
Susann Just-Marx, ¹) *1988
Senior Sales Manager
since 24 May 2018
Nationality: German
Board member
Nationality: German
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
Board member
since 15 August 2018
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
Richard Berliand, *1962
Independent Management
Consultant, Lingfield, Surrey
Nationality: British
Former members of
the Executive Board
responsible for Cash Market,
Pre-IPO & Growth Financing and
Human Resources/Director of
Labour Relations
Member of the Executive Board,
Deutsche Börse AG,
Financial statements
Management report
Executive and Supervisory Boards | The Executive Board
Deutsche Börse Group | Annual report 2018
11
Chief Executive Officer
Theodor Weimer
throder weimer
Yours sincerely,
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.
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 dialogue
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.
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.
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.
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.
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.
Further information
Notes
Frankfurt/Main
Deutsche Börse AG,
Head of Section, Finance Operations,
Florian Rodeit, *1975
Nationality: Swiss
Board member
from 16 May 2012
to 16 May 2018
Monica Mächler, *1956
Member of different
supervisory bodies,
Pfäffikon
Notes
to 16 May 2018
Board member
Nationality: US-American
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | Letter from the CEO
Management report
Financial statements
from 7 October 2005
Further information
The Executive Board
from left to right: Hauke Stars, Gregor Pottmeyer, Christoph Böhm, Thomas Book, Stephan Leithner, Theodor Weimer
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)
(since 1 July 2018)
Dr. oec. HSG
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
Bad Soden am Taunus
from 7 October 2005
Thomas Book, *1971
Chief Operating Officer,
12
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | The Executive Board
Management report
Financial statements
Notes
Deutsche Börse AG
Further information
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/
Theodor Weimer, *1959
to 16 May 2018
Board member
Controlling department
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
6
100
Achim Karle (since 28 August 2018)
Cornelis Kruijssen (since 15 August 2018)
6
Johannes Witt,¹) *1952
Former staff member in
the Financial Accounting &
100
6
8
100
Barbara Lambert (since 16 May 2018)
12
12
100
Monica Mächler (until 16 May 2018)
8
9
Susann Just-Marx (since 15 August 2018)
11
Marion Fornoff (until 15 August 2018)
10
10
100
Hans-Peter Gabe (until 15 August 2018)
10
100
10
Craig Heimark (until 16 May 2018)
5
5
100
Martin Jetter (since 24 May 2018)
11
100
100
9
Joachim Nagel (since 24 May 2018)
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
Management report
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
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
Board member
100
Executive and Supervisory Boards | The Supervisory Board
14
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
Deutsche Börse Group | Annual report 2018
since 16 May 2018
Managing Partner
RAYS Capital Partners Limited,
Hong Kong
Nationality: Chinese (Hong Kong)
Board member
since 13 May 2015
1) Employee representative
Amy Yip, *1951
20
6
Karl-Heinz Flöther
Deutsche Börse Group | Annual report 2018
17
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.
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.
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.
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).
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.
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.
Further information
Notes
Financial statements
Management report
Executive and Supervisory Boards | Report of the Supervisory Board
Deutsche Börse Group | Annual report 2018
16
Chairman of the Supervisory Board
Joachim Faber
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
Executive and Supervisory Boards | Report of the Supervisory Board
15
Executive and Supervisory Boards | Report of the Supervisory Board
20
Financial statements
Notes
Further information
Report of the Supervisory Board
Deutsche Börse Group | Annual report 2018
Management report
Management report
Notes
11
10
91
Ann-Kristin Achleitner
13
13
Nadine Absenger (since 16 May 2018)
100
8
100
Richard Berliand (Deputy Chairman until 16 May 2018)
21
21
Financial statements
Markus Beck (since 15 August 2018)
100
8
20
100
The Supervisory Board members' detailed attendance record is as follows:
Attendance of Supervisory Board members at meetings in 2018
Further information
(incl. committees)¹)
Meeting attendance
%
Meetings
17
17
100
Jutta Stuhlfauth (Deputy Chairperson since 16 May 2018)
Joachim Faber (Chairman)
20
Notes
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: ☑www.deutsche-boerse.com > Sustainability > Our
responsibility > UN Global Compact.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Combined corporate governance statement and corporate governance report
Financial statements
195
Shareholder representation, transparent reporting and communication
194
Notes
Management report | Combined corporate governance statement and corporate governance report
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
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.
Target figures for the proportion of female executives beneath the Executive Board
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.
Further infomation
Examination of the efficiency of Supervisory Board work
Further infomation
Accounting and auditing
Notes to the consolidated
196
-
347 Responsibility statement by the
Executive Board
Other disclosures
Consolidated balance sheet disclosures
Consolidated income statement disclosures
Basis of preparation
financial statements
312
268
254
206
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.
206
204
Consolidated cash flow statement
202
Consolidated balance sheet
200
Consolidated statement of comprehensive income
199
198 Consolidated income statement
Consolidated financial statements
198
Consolidated financial
statements/notes
Consolidated statement of changes in equity
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.
331.8
Further infomation
Share of women holding management positions
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
191
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.
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.
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 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.
Flexible age limit and term of office
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.
Diversity concept for the Executive Board and the Supervisory Board
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
348 Independent Auditor's Report
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.
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
193
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.
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.
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.
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.
Preparations for the election of shareholder representatives to the Supervisory Board
Training and professional development measures for members of the Supervisory Board
The composition of both Deutsche Börse AG's Supervisory Board and Executive Board is in line with the
objectives stated above. Please refer to ☑www.deutsche-boerse.com/supervboard for further informa-
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/execboard.
Educational and professional background
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.
Further infomation
Notes
Financial statements
Management report | Combined corporate governance statement and corporate governance report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
192
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.
International profile
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.
Deutsche Börse Group | Annual report 2018
4
Management report
Financial assets
Equity investments measured at FVOCI¹)
Debt financial assets measured at amortised cost
Financial assets at FVPL²)
Financial instruments held by central counterparties
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
31 Dec 2017
Note
31 Dec 2018
€m
Payments on account and construction in progress
1 Jan 2018
(restated)
€m
11
321.0
2,865.6
52.3
952.7
322.1
2,770.9
322.1
2,770.9
86.8
4,191.6
911.2
4,091.0
86.8
911.2
4,091.0
12
31.3
34.8
34.8
84.8
€m
76.4
Computer hardware, operating and office equipment
Property, plant and equipment
-66.0
Other comprehensive income after tax
-16.1
-43.8
Total comprehensive income
thereof Deutsche Börse AG shareholders
thereof non-controlling interests
1) FVOCI = fair value through other comprehensive income
836.4
852.2
806.4
835.9
30.0
16.3
Fixtures and fittings
Executive and Supervisory Boards
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
199
76.4
14.8
2.2
1) FVOCI = fair value through other comprehensive income
135,141.4
1,297.6
124,257.7
254.5
12,922.9
91.3
451.7
93,568.1
29,392.0
91.3
451.7
93,566.4
29,392.0
1,297.6
124,256.0
135,136.1
29,833.6
1,322.3
146,257.1
161,899.1
Total assets
13
Total current assets
Other cash and bank balances
Restricted bank balances
115,101.2
55.9
639.8
14
2) FVPL fair value through profit or loss
Other current assets
Loans and receivables
13
Available-for-sale financial assets
79,510.7
5.2
0
5.2
1.5
0.4
Other financial assets at FVPL
4.7
Derivatives
79,510.7
94,280.3
Financial instruments held by central counterparties
13
Financial assets at FVPL
Income tax assets
200
19,722.6
Other financial assets at amortised cost
2.2
130.9
113.4
113.4
13
108.8
101.6
1,057.1
1,574.1
9,985.4
0
17.3
4,837.2
0.1
15.9
4,837.2
0.1
1.2
1,692.0
11,168.6
42.5
4.1
397.5
Trade receivables
13
Debt financial assets measured at amortised cost
CURRENT ASSETS
Total non-current assets
8.5
Deferred tax assets
104.0
104.3
15,642.0
10
38.7
4.9
6,535.4
6,528.9
38.7
4.1
4.1
101.1
10,883.7
46.9
10,880.1
10, 15
9
9
1,368.6
1,233.2
-159.9
-210.5
11, 12
1,528.5
1,443.7
7.4
-83.8
197.8
8
-1,131.6
-1,340.2
-481.1
-516.2
-650.5
-824.0
56
1) For details regarding the restated figures, please see note 3.
4.2
6.6
-86.3
1,156.8
1,288.9
Further information
Financial statements | Consolidated statement of comprehensive income
Notes
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
198
4.68
4.46
23
4.68
4.46
23
21.7
28.2
874.3
824.3
896.0
852.5
-1.5
-391.4
-0.6
-303.7
10
Earnings per share (diluted) (€)
Consolidated statement of comprehensive income
Earnings per share (basic) (€)
thereof net profit for the period attributable
4
132.6
204.5
4
2,643.6
2,893.9
4
€m
€m
34.0
2017
(restated)¹)
Note
Total revenue
Other operating income
Net interest income from banking business
Sales revenue
for the period 1 January to 31 December 2018
Consolidated income statement
Further information
Financial statements | Consolidated income statement
Notes
2018
26.3
3,132.4
2,802.5
thereof net profit for the period attributable
to Deutsche Börse AG shareholders
Net profit for the period
Income tax expense
Other tax
Earnings before tax (EBT)
Financial expense
Financial income
Earnings before interest and tax (EBIT)
Depreciation, amortisation and impairment losses
Earnings before interest, tax, depreciation and amortisation (EBITDA)
Net income from strategic investments
Operating costs
Other operating expenses
Staff costs
2,462.3
2,779.7
Net revenue (total revenue less volume-related costs)
-340.2
-352.7
333.3
13,172.7
Volume-related costs
to non-controlling interests
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
Deferred taxes
-89.5
0
Remeasurement of other financial instruments
3.5
0
Remeasurement of cash flow hedges
-24.6
0.9
-27.8
12.8
15
Exchange rate differences
Items that may be reclassified subsequently to profit or loss
-3.9
22.2
Other comprehensive income from investments using the equity method
-8.4
-0.4
10, 15
Changes from defined benefit obligations
6.8
Other
Deferred taxes
Note
Equity investments measured at FVOCI")
2017
(restated)
€m
2018
€m
852.5
896.0
-23.9
30.6
-7.2
0
-0.3
0
Shareholders' equity
Accumulated profit
Revaluation surplus
Treasury shares
Share premium
EQUITY
Non-controlling interests
(restated)
€m
Financial statements | Consolidated balance sheet
Notes
€m
1 Jan 2018
31 Dec 2018
€m
Note
Equity and liabilities
Further information
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Total equity
31 Dec 2017
15
14.4
193.0
NON-CURRENT LIABILITIES
Provisions for pensions and other employee benefits
17
164.1
144.2
144.2
Other non-current provisions
18, 19
184.3
120.3
120.3
Financial liabilities measured at amortised cost
13
2,283.2
1,688.4
4,959.4
4,947.4
118.1
118.1
193.0
1,340.4
1,332.3
1,332.3
-477.7
-334.6
-334.6
190.0
-10.2
3,787.4
3,624.2
3,631.0
4,829.9
4,829.3
4,841.3
133.5
4,963.4
19.6
Subscribed capital
-96.4
Financial liabilities at FVPL
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
Accumulated profit
€m
€m
Shareholders' equity
€m
Non-controlling interests
€m
41.5
3,230.1
4,481.0
142.2
Total equity
€m
Deutsche Börse Group | Annual report 2018
204
-477.7
1,340.4
Sales under the Group Share Plan
0
0
5.7
Changes due to capital increases/decreases
0
0
0
4,623.2
Dividends paid
0
0
Transactions with shareholders
-3.0
8.1
-143.1
Balance as at 31 December 2018
190.0
0
0
874.3
874.3
0
0
4.5
0
4.5
0
0
5.0
-28.2
0
0
0
0
-48.3
-48.3
0
-6.5
-6.5
5.0
215.4
0
0
21.7
896.0
-21.9
-16.5
-38.4
-5.4
-43.8
-21.9
-28.2
857.8
16.3
852.2
0
-11.4
-11.4
0.6
-10.8
0
835.9
3.0
-3.0
Withdrawal of treasury shares
0
-28.2
0
4.5
0
Sales under the Group Share Plan
0
0
0
5.0
0
0
0
Acquisition in the interest of non-controlling shareholders in
European Energy Exchange AG
0
0
0
Changes due to capital increases/decreases
Dividends paid
0
0
Treasury
shares
€m
€m
193.0
1,327.8
-311.4
0
0
0
0
0
0
0
0
0
Exchange rate differences and other adjustments
Purchase of treasury shares
Sale of treasury shares
0
7.3
0
0
0
0
0
0
0
0
Exchange rate differences and other adjustments
0
0
0
Purchase of treasury shares
0
0
-364.2
1,688.4
0
5.1
0
0
0
0
-334.6
Transactions with shareholders
0
4.5
-23.2
Balance as at 31 December 2017
193.0
1,332.3
-334.6
0
Effects of first-time adoption of IFRS 9 and IFRS 15 as at 1 January 2018
Net profit for the period
Other comprehensive income after tax
Total comprehensive income
0
0
0
193.0
1,332.3
Balance as at 1 January 2018
0.8
0
-439.0
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:
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.
IFRS 16 "Leases" (January 2016)
207
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
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.
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.
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.
The changes in accounting policies resulting from first-time adoption of IFRS 9 and IFRS 15 are set out
in note 3.
IFRS 9 introduces new requirements for the recognition and measurement of financial instruments.
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
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.
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.
206
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
IFRS 9 "Financial Instruments" (July 2014)
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.
Further information
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).
■ All arrangements identified as leases in the past will continue to be classified as such.
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.
209
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
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.
Further information
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
Amendments to IFRS 10 and IAS 28 "Sales or Contributions of Assets Between an Investor and its
Associate/Joint Venture" (September 2014)
Deutsche Börse Group will make use of the general practical expedients provided by IFRS 16:
Amendments to IFRS 3 "Definition of a Business" (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.
■ 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.
208
Deutsche Börse Group | Annual report 2018
The following standards have not yet been adopted by the European Commission:
Executive and Supervisory Boards
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.
Management report
Share
premium
Notes | Basis of preparation
Executive and Supervisory Boards
Management report
0
824.3
824.3
28.2
4,947.4
852.5
-24.6
6.7
-17.9
118.1
1.8
-24.6
831.0
806.4
30.0
836.4
0
0.9
0.9
- 16.1
0.3
4,829.3
14.4
-439.0
0
-439.0
0
-456.9
-475.6
-40.4
-516.0
3,624.2
19.6
4,841.3
118.1
4,959.4
-5.2
-6.8
-12.0
0
-12.0
3,631.0
Financial statements
1.2
0
-14.9
0
-453.3
-453.3
0
-453.3
0
-667.8
-14.9
-805.8
-820.4
-10.2
3,787.4
4,829.9
133.5
4,963.4
205
Deutsche Börse Group | Annual report 2018
-14.6
0
0
0
-364.2
0
-364.2
0
0
5.1
0
5.1
0
0
0
0
0
0
0
5.7
0
5.7
-215.4
capital
€m
Sale of treasury shares
Attributable to Deutsche Börse AG shareholders
Changes in liabilities from CCP positions
Changes in receivables from CCP positions
Cash flows from operating activities
-8.8
7.9
113.6
148.2
0.9
0.5
5.4
1.5
1,176.5
1,107.2
22
- 1,676.0
1,797.7
1,298.2
- 323.2
272.2
Cash flows from operating activities excluding CCP positions
Net loss on disposal of non-current assets
Increase in non-current liabilities
Increase in current liabilities
896.0
Depreciation, amortisation and impairment losses
11, 12
Subscribed
159.9
Increase in non-current provisions
59.7
10.2
1,056.2
Deferred tax income
-36.0
-20.6
Other non-cash income
Changes in working capital, net of non-cash items:
-21.3
105.7
156.6
(Increase)/decrease in receivables and other assets
10
Payments to acquire intangible assets
Payments to acquire property, plant and equipment
Payments to acquire non-current financial instruments
-312.4
-4.8
-10.4
-169.2
-157.5
-0.4
0
655.1
-38.7
-47.7
0
259.5
859.1
0.2
0
22
792.0
181.9
250.3
852.5
-43.1
-106.1
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
-65.2
Cash flows from investing activities
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
Net change in cash and cash equivalents
-94.8
Purchase of treasury shares
Net profit for the period
€m
€m
7,033.1
7,023.8
334.8
339.4
339.4
Other current provisions
20
293.2
12,828.7
191.6
Financial liabilities at amortised cost
13
Trade payables
195.0
Other financial liabilities at amortised cost
19,024.7
150.1
13,976.2
150.1
191.6
13,976.2
226.8
194.5
13
Financial instruments held by central counterparties
9,985.4
4,837.2
4,837.2
Other financial liabilities at FVPL
0.2
0.8
225.4
0.8
17.0
16.8
6.1
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIES
Tax provisions¹) 2)
10
Other non-current liabilities
-364.2
Financial liabilities at FVPL
Financial instruments held by central counterparties
1) Thereof income tax expense: €295.8 million (2017: €299.6 million)
2) Thereof non-current provisions: €104.7 million (2017: €104.6 million)
156,935.7
130,188.7
130,182.0
161,899.1
135,136.1
135,141.4
201
Total equity and liabilities
Deutsche Börse Group | Annual report 2018
Management report
Financial statements | Consolidated cash flow statement
Notes
Further information
Consolidated cash flow statement
for the period 1 January to 31 December 2018
Note
2018
2017
Executive and Supervisory Boards
13
Total liabilities
123,155.6
94,068.3
78,798.6
78,798.6
Derivatives
Other financial liabilities at FVPL
3.0
0
29.1
0.3
32.0
123,158.2
0
13
Other current liabilities
21
Total current liabilities
29,559.2
628.8
144,107.0
29,215.3
455.0
29,215.3
455.0
Cash deposits by market participants
6.5
-14.9
0.6
210.5
0
2017
€m
€m
1,257.3
737.1
22
1.5
580.2
1,839.0
- 10.0
-146.9
580.2
435.1
362.7
6.7
8.6
-312.0
-295.8
-303.3
-308.8
203
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements | Consolidated statement of changes in equity
Notes
Further information
Consolidated statement of changes in equity
-28.2
5.5
-39.3
Balance as at 1 January 2017
Net profit for the period
Other comprehensive income after tax
Total comprehensive income
2018
Note
for the period 1 January to 31 December 2018
Effect of exchange rate differences
0
-453.3
22
-832.9
-439.0
-501.0
1,257.3
737.1
202
Deutsche Börse Group | Annual report 2018
0
Executive and Supervisory Boards
Financial statements | Consolidated cash flow statement
Notes
Further information
Net change in cash and cash equivalents (brought forward)
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
Management report
-600.0
592.4
Tysons Corner, USA
Prague, Czech Republic
Power Exchange Central Europe a.s.
(75.05)
Frankfurt/Main, Germany
Leipzig, Germany
Singapore, Singapore
100.00
100.00
75.054)
Tysons Corner, USA
(75.05)
EEX Link GmbH
Leipzig, Germany
(75.05)
European Commodity Clearing AG
Leipzig, Germany
(75.05)
European Commodity Clearing Luxembourg S.à r.l.
Luxembourg, Luxembourg
(75.05)
Nodal Exchange Holdings, LLC
(75.05)
Nodal Exchange, LLC
Nodal Clear, LLC
(50.03)
(75.05)
Powernext SAS
43,015
(75.05)
Vienna, Austria
(75.05)
Brøndby, Denmark
(22.96)
Amsterdam, Netherlands
(38.27)
Bern, Switzerland
(38.27)
Amsterdam, Netherlands
(38.27)")
Paris, France
Zug, Switzerland
Paris, France
360 Trading Networks LLC
360TGTX Inc.
360T Asia Pacific Pte. Ltd.
360 Treasury Systems AG
STOXX Australia Pty Limited
Tradegate Exchange GmbH
STOXX Ltd.
PEGAS CEGH Gas Exchange Services GmbH
Gaspoint Nordic A/S
JV Epex-Soops B.V.
Zug, Switzerland
EPEX SPOT Schweiz AG
EPEX Netherlands B.V.
EPEX SPOT SE
360 Trading Networks Inc.
(38.27)
%
Equity interest
US$
400
44,397
52,910
19,840
-714
2000
2015
€
175
216
0
-44
2015
CZK
200
25
58
0
220
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.I.,
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
€
6,000
391,760
1,122,320
€
12,366
4,693
2001
213
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
Fully consolidated subsidiaries (part 2)
Company
Eurex Global Derivatives AG³)
Eurex Services GmbH
European Energy Exchange AG
Cleartrade Exchange Pte. Limited
Domicile
29,733
as at
31 Dec 2018
direct/(indirect)
22,737
€
€
25,000
25
514,813
661,102
1,313,542
25,965,525
1,416,597
71,092
2006
13,430
31,7655)
18,5376)
1998
8,1414)
1998
79
86
4
0
2013
3,600
100.00
(100.00)
Berlin, Germany
219
109
13
€
2014
49,9306)
98,680
18,602,324
108,935
1,015
€
2016
8
184
122
2014
-1,546
€
60,075
340,295
408,293
74,562
45,4595)
522,160
2014
21,559
€
50
2,080
67
2,700
1,000
US$
39,721
27
2014
13,594
7,171
3 May 2017
CZK
30,000
Jerusalem, Israel
486,571
52,024
59,579
17,719
2016
€
12,584
33,456
65,747
2007
30,310
US$
US$
0
156,218
657,891
20,481
2,263
0
3 May 2017
0
43,689
495,362
20,481
6,657
3 May 2017
US$
Sydney, Australia
0
98
1) Disclosures are based on preliminary and unaudited figures which may be adjusted subsequently.
Mumbai, India
13,670
2015
€
6,168
64,257
115,691
83,075
(100.00)
ThreeSixty Trading Networks (India) Pte. Ltd.
(100.00)
Finbird Limited
(100.00)
Frankfurt/Main, Germany.
(100.00)
Kuala Lumpur, Malaysia
(100.00)
80.00
Frankfurt/Main, Germany
100.00
Singapore, Singapore
(100.00)
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
New York, USA
New York, USA
36,845
Dubai, United Arab Emirates (UAE)
(100.00)
360 Trading Networks Sdn Bhd
Finbird GmbH
(100.00)
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
Total assets¹)
thousand
2018¹)
thousand
2018¹)
thousand
Initially
consolidated
€
83
thousand
673,011
107,083
95,769
2012
€
25
98
698,106
0
thousand
capital¹)
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
Equity 1) 2)
Management report
Notes Basis of preparation
Further information
Ordinary share
Sales revenue
Net profit/loss
Currency
Financial statements
2) The figures refer to the financial year from 1 December 2017 to 30 November 2018.
Tysons Corner, USA
-18
2,677
39,104
22,525
14,498
6,211
€
2002
2014
92,707
2,459,275
2010
4,765
16,209
16,910
2009
5,781
304,8335)
CZK
160,200
193,485
1,501
3,978
108,149
11,482
15,000
CHF
2002
12,419
312,4225)
225,982
129,534
30,000
€
2008
9,577
696,772
546,144
136,095
230,900
185,854
13,310
462,276
3,600
25,000
50
50
€
2007
152,6904)
0
2013
3,023
19,734
22,454
2,440,263
2,285,314
101,000
€
140
€
2009
0
50
1 Oct 2018
0
14 Dec 2018
€
€
49,000
JPY
2002
204,280
618,2095)
2002
283,9537
43,9855)
1,391,071
18,277,543
1,263,245
92,000
€
1,345,824
25,000
€
0
0
€
50
173,041
221,662
171,430
1,000
CHF
2016
231
96,811
1,921
6,986
35
€
2016
99
3,499
2,933
7,302
2009
AU$
08)
77,115
98,023
77,035
128
€
2010
723
3,465
2,941
2,109
500
€
2015
88)
4638)
2288)
958)
2,439
2,000
DKK
2015
545
0
10,470
9,833
10,000
€
2013
-252
0
14,312
14,063
0
€
2016
-11
0
58
2013
25
€
633
-125
20
55
52
18
€
2015
22
334
1,332
1,076
606
S$
2013
-206
0
690
6,000
2,098
2,098
0
100.00
Frankfurt/Main, Germany
100.00
Frankfurt/Main, Germany
(100.00)
(100.00)
100.00
Frankfurt/Main, Germany
%
New York, USA
Chicago, USA
New York, USA
Domicile
Clearstream Banking S.A.
Clearstream International S.A.
Clearstream Beteiligungs AG
Clearstream Holding AG
31 Dec 2018
direct/(indirect)
(100.00)
Luxembourg, Luxembourg
(100.00)
(100.00)
Prague, Czech Republic
Clearstream Operations Prague s.r.o.
(100.00)
Cork, Ireland
Clearstream Global Securities Services Limited
(100.00)
Frankfurt/Main, Germany
(50.00)
Luxembourg, Luxembourg
Clearstream Banking AG
REGIS-TR S.A.
(100.00)
Tokyo, Japan
Clearstream Banking Japan, Ltd.
(100.00)
Luxembourg, Luxembourg
Börse Frankfurt Zertifikate AG
Need to Know News, LLC in Liquidation
Assam SellerCo Service, Inc. in Liquidation³)
Assam SellerCo, Inc. in Liquidation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
216
200
100
CHF
2016
0
1,683
278
0
0
€
2015
22,177
Notes | Basis of preparation
Clearstream Services S.A.
Further information
The amendments must be applied for financial years beginning on or after 1 January 2019, but have
not yet been adopted by the EU.
Company
Equity interest
as at
Fully consolidated subsidiaries (part 1)
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.
2. Basis of consolidation
Further information
Notes Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
211
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.
Together with the revised Conceptual Framework, references to the Conceptual Framework have been
adapted in various 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.
Revised “Conceptual Framework in IFRS Standards"
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.
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.
Luxembourg, Luxembourg
(100.00)
Clearstream Funds Centre Ltd.
Sales revenue
9,911
thousand
capital¹)
Ordinary share
US$
Currency
Further information
Notes | Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
212
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)
6) Thereof income from profit pooling of Eurex Clearing AG amounting to €8,141 thousand
5) Consists of interest and commission results due to business operations
Net profit/loss
4) Before profit transfer or loss absorption
Equity) 2
thousand
US$
2009
1) Disclosures are based on preliminary and unaudited figures which may be adjusted subsequently.
n.a.
n.a.
n.a.
n.a.
US$
2009
-108
0
22,596
22,550
Initially
consolidated
2018¹)
thousand
2018¹)
thousand
thousand
Total assets¹)
18,885
3) Assam SellerCo Service, Inc. in Liquidation is part of the Assam SellerCo, Inc. in Liquidation subgroup.
1) Disclosures are based on preliminary and unaudited figures which may be adjusted subsequently.
100.00
Singapore, Singapore
Deutsche Boerse Market Data+Services Singapore Pte. Ltd.
(100.00)
Singapore, Singapore
Eurex Exchange Asia Pte. Ltd.
(100.00)
Singapore, Singapore
Eurex Clearing Asia Pte. Ltd.
100.00
Singapore, Singapore
Deutsche Boerse Asia Holding Pte. Ltd.
100.00
Frankfurt/Main, Germany
DB1 Ventures GmbH
(100.00)
London, United Kingdom
Deutsche Boerse Systems Inc.
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
Chicago, USA
Deutsche Börse Photography Foundation gGmbH
Eurex Repo GmbH
(100.00)
Frankfurt/Main, Germany
(100.00)
Frankfurt/Main, Germany
Eurex Clearing Security Trustee GmbH
(100.00)
Frankfurt/Main, Germany
Eurex Clearing AG
100.00
Frankfurt/Main, Germany
Eurex Frankfurt AG
100.00
Prague, Czech Republic
Deutsche Börse Services s.r.o.
100.00
Frankfurt/Main, Germany
100.00
2015
n.a.
550
Eschborn, Germany
2010
19.99
Xetra (cash equities)
2015
(9.57)
EEX (commodities)
Eurex (financial derivatives)
2014
Eurex (financial derivatives)
2015
12.50
2015
(50.00)
2018
28.76
16.33
49.90
2013
Eurex (financial derivatives)
€
Börsensysteme mbH
Brain Trade Gesellschaft für
Net
profit/loss
2018¹)
thousand
2018¹)
thousand
Liabilities¹)
thousand
Assets¹)
thousand
Sales
revenue
Ordinary
share capital¹
thousand
Currency
Company
Associates (part 2)
1) Thereof 14.29 per cent held directly and 14.29 per cent indirectly via Börse Frankfurt Zertifikate AG
Berlin, Germany
London, United Kingdom
Belgrade, Serbia
Berlin, Germany
2013
30.03
2018
(30.02)
2011
23.85
%
Associate
since
31 Dec 2018
direct/(indirect)
Equity interest
as at
Segment
Domicile
Company
Associates (part 1)
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
Further information
Notes | Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
218
Brain Trade Gesellschaft für
Börsensysteme mbH
1,400
China Europe International Exchange AG
enermarket GmbH
2007
16.20
2015
40.00
2013
(28.58)"
Xetra (cash equities)
Eurex (financial derivatives)
Xetra (cash equities)
Eurex (financial derivatives)
EEX (commodities)
GSF (collateral management)
Clearstream (post-trading)
Data
Frankfurt/Main, Germany
Frankfurt/Main, Germany.
Frankfurt/Main, Germany.
London, United Kingdom
Frankfurt/Main, Germany
Luxembourg, Luxembourg
Luxembourg, Luxembourg
New York, USA
Zimory GmbH in Liquidation
ZDB Cloud Exchange GmbH in
Liquidation
Tradegate AG Wertpapierhandelsbank
SEEPEX a.d.
R5FX Ltd
RegTek Solutions Inc.
LuxCSD S.A.
HQLAX S.à r.l.
Digital Vega FX Ltd
Deutsche Börse Commodities GmbH
China Europe International Exchange AG
€
27,000
24,403
€
Tradegate AG Wertpapierhandelsbank
240,000
RSD
SEEPEX a.d.
-700
38
930
477
2
GBP
R5FX Ltd
-1,759
2,917
2,709
4,688
151,468
160,700
4,857
155,706
113,330
5,344
0
48
204
263
€
Zimory GmbH in Liquidation
-16
0
78
207
50
€
in Liquidation
S$
ZDB Cloud Exchange GmbH
17,191
68,958
94,300
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.
US$
427
1,5972)
-4582)
2,3872)
2,6072)
GBP
Digital Vega FX Ltd
4,601
13,974
6,511,137
-4,136
101
3,780
255
2,027
76
3,723
13,284
6,518,505
1,000
€
Deutsche Börse Commodities GmbH
5632)
RegTek Solutions Inc.
enermarket GmbH
25
2,679
1,265
6,547
6,000
€
LuxCSD S.A.
-1,550
0
1,331
3,141
17
€
HQLAX S.à r.l.
-599
8
357
351
CID
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).
16,594
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.
Notes | Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
215
2015
7,143
44,991
2015
-1,054
0
3,989
86,553
75,970
300
INR
-4,021
Further information
1
Changes to basis of consolidation
Additions
57
40
17
-7
- 3
- 4
3
2
1
61
41
20
Total
Foreign
Germany
As at 31 December 2018
Disposals
As at 1 January 2018
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.
2015
0
8,745
7,794
300
US$
29 Jun 2018
-3,511
10,152
105,142
28,489
30,000
US$
2015
301
11,198
7,039
4,767
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.
8,683
138
943
€
1,434
1,424
25
€
25 Aug 2017
-82
0
84
-82
0
MYR
2015
64
586
578
445
34
2015
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.
ILS
The purchase price allocation - preliminary as at the reporting date - yielded the following effects:
83.3
-9.4
92.7
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.
1 October 2018
Preliminary
goodwill
calculation
Goodwill (not tax deductible)
Total assets and liabilities acquired
Deferred tax liabilities on temporary differences
Current financial liabilities (without cash deposits by customers)
Tax provisions
Other current assets
Current financial assets (without cash)
Other non-current assets
Non-current financial assets
Other intangible assets
Software
40.8
Customer relationships
0.5
14.7
1.7
-0.4
-20.6
-7.2
46.8
36.5
217
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes Basis of preparation
Further information
16.3
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 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.
0.6
0.4
Acquired assets and liabilities
€m
85.9
23.3
Other current assets less liabilities
85.9
Goodwill resulting from the business combination with the GTX ECN business
Preliminary goodwill
calculation
Total consideration
29 June 2018
Consideration transferred
Purchase price
€m
Total consideration
Acquired assets and liabilities
Goodwill (tax deductible)
Customer relationships
Trade names
Software
Other non-current assets
1.7
4.5
Total assets and liabilities acquired
2.0
Acquired bank balances
Purchase price in cash
Consideration transferred
Goodwill resulting from the business combination with Swisscanto Funds Centre Ltd.
The purchase price allocation - preliminary as at the reporting date - yielded the following effects:
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 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.
Goodwill resulting from the transaction largely reflects expected cost and revenue synergies from the
business combination.
Further information
Notes | Basis of preparation
Financial statements
Management report
0.4
Executive and Supervisory Boards
216
54.0
31.9
Deutsche Börse Group | Annual report 2018
Financial liabilities at fair value through profit or loss
-0.3
FVPL
1.5 Financial assets at fair value through profit or loss
aAC
141.8 Financial assets measured at amortised cost
aAC
FVPL
aAC
19.6
Management report
29,392.0 Restricted bank balances
aAC
Closing balance as at 31 Dec 2017 - IAS 39/IAS 18
Accumulated
profit
€m
€m
surplus
Revaluation
Total impact on shareholders' equity
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:
Further information
Notes Basis of preparation
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
223
aAC
130,697.4
124,164.4
1,297.6 Other cash and bank balances
aAC
FVPL
aAC
Deutsche Börse Group | Annual report 2018
aAC
Further information
Notes | Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
222
5) aAC at amortised cost
4) FVOCI = fair value through other comprehensive income
3) LaR loans and receivables
2) FVPL fair value through profit or loss
available for sale
1) AFS
- 8.5
130,705.9
Total
- 2.0
124,166.4
Total current assets
0
1,297.6
3,631.0
1 Jan 2018 (IFRS 9)
FVPL
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
451.7 Other current assets
2.5 Trade receivables
330.9 Trade receivables
5.2 Derivatives
254.0 Financial assets measured at amortised cost
12,776.8 Financial assets measured at amortised cost
272.0 Financial assets measured at amortised cost
79,238.7 Derivatives
FVPL
aAC
FVPL
aAC
FVPL
FVPL
aAC
aAC5)
FVOCI
6,533.0
4.5 Financial assets measured at amortised cost
0.1 Derivatives
4.1 Other non-current assets
0.4 Financial assets measured at amortised cost
4,837.2 Derivatives
1.2 Financial assets at fair value through profit or loss
Category
Reclassification of equity investments from "available for sale" to "fair value through other
comprehensive income"
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.
-1.0
Further information
Notes | Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
225
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.
Change in provision for trade receivables
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.
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.
Reclassification of debt instruments from "available for sale" to "financial assets at fair value
through profit or loss (FVPL)"
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.
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.
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.
Reclassification of debt instruments from "available for sale” to “at amortised cost"
Further information
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.
Notes | Basis of preparation
Financial statements
Executive and Supervisory Boards
Management report
Deutsche Börse Group | Annual report 2018
226
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.
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 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.
Notes | Basis of preparation
■ SIC-31 "Revenue - Barter Transactions Involving Advertising Services"
■ IFRIC 15 "Agreements for the Construction of Real Estate"
■ IFRIC 13 "Customer Loyalty Programmes"
■ IAS 18 "Revenue"
■ IAS 11 "Construction Contracts"
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:
Changes resulting from the first-time adoption of IFRS 15
LaR
Change in deferred tax assets
■IFRIC 18 "Transfers of Assets from Customers"
3.2
Financial statements
Executive and Supervisory Boards
1.1
Recognition of deferred tax liabilities
-0.7
1.0
Recognition of deferred tax assets
-0.3
0
Change in valuation allowance for debt investments carried at amortised cost
1.5
0
Change in valuation allowance for trade receivables
1.6
-2.0
Reclassification of financial assets from "available for sale" to "fair value through profit or loss"
0
-8.5
Reclassification of debt investments from "available for sale" to "at amortised cost"
-0.1
Adjustment due to first-time adoption of IFRS 9 as at 1 Jan 2018
-5.2
1.0
Deutsche Börse Group | Annual report 2018
224
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)".
All equity instruments recognised as at 1 January 2018 are designated as at FVOCI by
Deutsche Börse Group.
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.
Reclassification of equity instruments from "available for sale" to "fair value through other
comprehensive income (FVOCI)"
3,624.2
14.4
Management report
Opening balance as at 1 Jan 2018 - IFRS 9/IFRS 15
0
Adjustment due to first-time adoption of IFRS 15 as at 1 Jan 2018
2.9
0
Recognition of deferred tax assets
-10.7
0
Recognition of contract liabilities
-7.8
Other cash and bank balances
€m
29,392.0
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.
227
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes Basis of preparation
Further information
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 | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes Basis of preparation
31 Dec 2017 (IAS 39)
Reclassification of financial assets
Further information
Notes | Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
221
Effects from the first-time adoption of IFRS 9 “Financial instruments"
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.
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.
Adjustments to the presentation of the consolidated income statement
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.
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 (Єm). Due to rounding, the amounts may differ from unrounded figures.
3. Summary of key accounting policies
Further information
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.
(restated)
EEX (commodities)
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.
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
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.
230
Deutsche Börse Group | Annual report 2018
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.
IFS (investment fund services)
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.
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.
228
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
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.
Financial statements
Further information
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 "Eurex
(financial derivatives) segment" section applies for the Xetra (cash equities) segment.
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.
Notes Basis of preparation
0
Consolidated balance sheet item
transition to IFRS 9
0
5.2
Derivatives
-0.5
254.5
AFS
0
12,776.8
LaR
Receivables and securities from banking business
0
79,238.7
Derivatives
0
272.0
LaR
Current financial instruments held by central counterparties
Trade receivables
Receivables from related parties
Other current assets
LaR
LaR
Restricted bank balances
-1.5
1.2
LaR
-1.5
3.0
LaR
Current assets
0
LaR
0
451.7
0
2.5
LaR
1.5
329.4
141.8
Changes arising from
Total non-current assets
6,539.5
AFS
0
14.5
AFS
Other financial instruments
-8.3
1,563.0
AFS
Receivables and securities from banking business
2.2
99.4
AFS¹)
Other equity investments
Non-current assets
€m
Carrying amount
Category
15.1
-0.4
FVPL (FV option)
1.2
0
0.1
Derivatives
0
4.5
LaR
0
4.1
- 6.5
Other non-current assets
4,837.2
Derivatives
0
0.4
LaR³)
Non-current financial instruments held by central counterparties
Other loans
0
0
229
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.
Further information
Financial assets until 31 December 2017
Fair value measurement
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.
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.
Further information
Notes Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
234
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.
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.
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.
Impairment losses on property, plant and equipment and intangible assets
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.
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.
Repair and maintenance costs are expensed as incurred.
Investments in associates and joint ventures
Financial instruments
■ amortised cost
■ fair value (through other comprehensive income or through profit or loss)
Since 1 January 2018, the Group has classified its financial assets according to the following
measurement categories:
Financial assets: measurement
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 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.
Further information
Investments in associates and joint ventures are measured at cost on initial recognition and accounted
for using the equity method upon subsequent measurement.
Notes Basis of preparation
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
235
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.
Financial assets: recognition and derecognition of financial assets
Financial assets since 1 January 2018
Financial statements
based on lease term
5 to 25 years
Depreciation period
3 to 5 years
Intangible assets are derecognised on disposal or when no further economic benefits are expected to flow
from them.
3 to 7 years
3 to 7 years
Amortisation period
3 to 10 years
Internally developed custom software
Purchased custom software
Standard software
Asset
Useful life of software
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.
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.
Intangible assets
Further information
Notes | Basis of preparation
Financial statements
Management report
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.
Leasehold improvements
Office equipment
Computer hardware
Asset
Useful life of 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.
Property, plant and equipment
The classification depends on the entity's business model for managing the financial assets and
contractual terms of the cash flows.
Further information
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
233
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.
Assets with an indefinite useful life - exchange licences and transaction-dependent trade names – are
tested for impairment at least once a year.
Notes Basis of preparation
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
Financial assets: subsequent measurement of financial assets
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: initial measurement
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 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: recognition and derecognition
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:
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.
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.
Cash and cash equivalents
■ 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.
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.
■ Insolvency proceedings are not started due to missing substance of the debtor.
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:
Further information
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.
239
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
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.
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
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.
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.
Cash and cash equivalents
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”.
Notes | Basis of preparation
Loans and receivables
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.
Assets held for trading
The financial assets were allocated to the respective categories at initial recognition.
Further information
Notes | Basis of preparation
Financial statements
Management report
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".
Financial statements
Management report
Executive and Supervisory Boards
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.
Financial assets: subsequent measurement of equity instruments
▪ 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.
▪ 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.
▪ 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.
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:
Financial assets: subsequent measurement of debt instruments
237
Further information
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
236
Financial assets with embedded derivatives are considered in their entirety when determining whether
their cash flows are solely payment of principal and interest.
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.
Notes | Basis of preparation
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Management report
Deutsche Börse Group | Annual report 2018
238
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.
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.
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.
■ 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.
▪ Legal default: a contractual partner is unable to fulfil its contractual obligation according to an
agreement with Deutsche Börse Group due to insolvency/bankruptcy.
Executive and Supervisory Boards
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:
Impairment
As at the reporting date, Deutsche Börse Group has designated all equity instruments as at fair value
through other comprehensive income.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not
reported separately from other changes in fair value.
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.
Further information
Notes Basis of preparation
Financial statements
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.
Deutsche Börse Group | Annual report 2018
240
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.
Financial statements
Executive and Supervisory Boards
Management report
Deutsche Börse Group | Annual report 2018
231
■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
■ how the intangible asset will generate probable future economic benefits
■the ability to use or sell the intangible asset
■ 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
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:
Research and development costs
The consolidated income statement is structured using the nature of expense method.
Dividends are recognised in net income from strategic investments if the right to receive payment is
based on legally assertable claims.
Dividends
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.
Interest income and expense
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.
Volume-related costs
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.
Further information
Notes | Basis of preparation
Financial statements
Management report
Deutsche Börse Group | Annual report 2018
■ 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.
232
Notes | Basis of preparation
Further information
Executive and Supervisory Boards
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:
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.
■ Compilation and dispatch of production systems
6. Roll-out
Compilation and review of documents
Compilation and testing of simulation software packages
■
Preparation and implementation of simulation
"
5. Simulation
■ Identification of inefficiencies
■ Analysis to identify weak points in functional, operational software
■ Planning and implementation of acceptance tests
■ Planning of product launch
■ Product testing
1. Design
4. Acceptance
■ Definition of product design
■
Specification of the expected economic benefit
O Compilation and review of documents
2. Detailed specifications
■ Compilation and review of precise specifications
■ Troubleshooting process
3. Building and testing
■ Initial cost and revenue forecast
■ Software programming
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.
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
Multi-employer plans
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 "Global Rate: 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
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.
247
246
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.
"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.
Notes | Basis of preparation
Deutsche Börse Group | Annual report 2018
244
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
■ 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.
Further information
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.
"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 risk report in the combined management report).
Cash collateral is reported in the consolidated balance sheet under "cash deposits by market participants"
and the corresponding amounts under "restricted bank balances".
245
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
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.
Executive and Supervisory Boards
Long-term Sustainable Instrument (LSI)
Financial statements
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.
249
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
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 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.
250
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.
▪ European Commodity Clearing AG guarantees the settlement of spot and derivatives transactions at the
trading venues of EEX group and the connected partner exchanges.
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 ☑“Principles
governing the PSP and assessing target achievement for performance shares" section in the
remuneration report.
Performance Share Plan (PSP)
Notes Basis of preparation
Further information
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
Management report
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.
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.
248
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Basis of preparation
Further information
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.
Group Share Plan (GSP)
▪ 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.
Deutsche Börse Group | Annual report 2018
Financial instruments held by central counterparties
Management report
Financial statements
Notes Basis of preparation
Further information
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.
Executive and Supervisory Boards
Offsetting financial assets and liabilities
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.
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.
241
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.
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.
European Commodity Clearing AG, Nodal Clear, LLC and Eurex Clearing AG act as central
counterparties:
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes Basis of preparation
Further information
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 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.
Deutsche Börse Group | Annual report 2018
242
Management report
Financial statements
Notes | Basis of preparation
Further information
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
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.
Gains or losses on derivative instruments that were not part of a highly effective hedging relationship
were recognised immediately in the consolidated income statement.
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Derivatives and hedges (until 31 December 2017)
Further information
243
Executive and Supervisory Boards
Management report
Financial statements
Notes Basis of preparation
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.
Deutsche Börse Group | Annual report 2018
Cash flow hedges that qualify for hedge accounting
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.
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.
0
6.6
10.0
230.0
0
0
0
57.0
8.9
Other
Trading
360T (foreign exchange)
1.1
271.4
76.7
70.1
67.0
2017
0
Net revenue
0.5
€m
2018
€m
€m
€m
(restated)
2018
2017
Volume-related costs
Other operating income
Notes | Consolidated income statement disclosures
Further information
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
254
0
3.0
12.5
71.0
0
-0.1
21.2
26.8
0
0
73.1
74.2
Other
Infrastructure
25.2
40.2
2018
€m
13.4
0
0
9.1
935.6
59.2
800.6
25.2
Other
0
0
38.8
44.9
Gas
0
0
63.0
67.3
Power spot
0.6
5.9
69.0
88.2
Power derivatives
EEX (commodities)
40.1
2017
231.9
5.3
796.5
0
0
-12.0
-9.7
82.1
59.9
936.1
0
-2.0
-3.6
10.8
25.6
-0.3
-1.6
2.0
0
-53.3
-61.2
24.0
23.6
0
0
50.0
35.7
0
0
0
0
73.1
21.4
23.7
-3.7
-2.2
44.4
42.7
21.6
3.6
€m
36.4
-5.5
40.3
0
0
0.1
0
15.4
17.8
41.8
-0.5
0.4
0.8
161.1
170.6
-27.5
-22.3
6.3
-0.5
6.1
6.8
-22.8
-6.0
0
0
208.1
-1.7
-1.8
0.1
0.1
389.7
466.2
-43.6
-48.1
0.2
0.1
218.3
228.7
-28.0
43.8
0
2018
41.9
1.1155
1.1512
CHF
at 31 Dec 2017
Closing price as
Closing price as
at 31 Dec 2018
2017
USD (US$)
-0.2
Average rate
British pound
Singapore dollar
Czech koruna
US dollars
Swiss francs
Exchange rates
Average rate
1.1801
1.1360
1.1264
1.1433
0.8860
0.8978
0.8750
0.8863
GBP (£)
1.5990
1.5577
1.5605
1.5907
SGD
25.5683
25.7315
26.2997
25.6605
CZK
1.1969
1.1680
The following euro exchange rates of consequence to Deutsche Börse Group were applied:
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.
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".
Currency translation
0.74)
0.6
0.3
0.2
0.9
0.2
0
0
0.1
0
5.8
3.6
5.7
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.
260
0.8
251
1.22)
4.03)
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".
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.
Further information
Notes Basis of preparation
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Germany
Total
Germany
€m
€m
€m
€m
4.3¹)
2.6
2.3
0
Deutsche Börse Group | Annual report 2018
Management report
41.7
40.3
0
15.5
17.5
0
0
0
182.3
Other
Listing
Trading and clearing
Xetra (cash equities)
2017
€m
2018
€m
Net interest income from banking
business
187.6
0
245.4
239.5
49.8
Margin fees
OTC clearing
Equity derivatives
0
0
209.7
233.6
Interest rate derivatives
0
0
433.1
514.2
Equity index derivatives
Eurex (financial derivatives)
0
0
€m
2017
(restated)
2018
€m
Sales revenue
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
252
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.
Pensions and other employee benefits
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.
Financial instruments
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.
Impairment of non-financial assets
as well as in subsequent periods, where necessary.
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,
Estimates, measurement uncertainties and discretionary judgements
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.
Further information
Notes Basis of preparation
Financial statements
Financial statements
Executive and Supervisory Boards
Notes | Basis of preparation
Income taxes
Composition of net revenue (part 1)
4. Net revenue
Consolidated income statement disclosures
Further information
Notes | Consolidated income statement disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
253
When recognising provisions for expected losses from rental agreements the probability of utilisation is
estimated (see note 19). In recognising personnel-related restructuring provisions, certain assumptions
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.
Provisions
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.
Share-based payments
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.
Legal risks
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.
Further information
-0.5
0
62.5
127.7
144.5
-13.9
-14.2
0.3
0.1
59.1
69.4
-6.5
-7.8
0.3
0.1
27.1
31.3
-3.5
-2.9
0
0
41.5
43.8
-3.9
-3.5
0
0
154.2
170.3
-25.7
47.8
39.9
-413.9
-397.0
216.3
Interest income from positive interest environment
€m
€m
2017
(restated)¹)
2018
Composition of net interest income from banking business
Further information
Notes | Consolidated income statement disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
-27.4
257
2,779.7
-340.2
-352.7
26.3
34.0
0
2,462.3
0
56.8
61.2
-13.6
-13.8
2,779.7
2,462.3
129.1
1.0
34.7
-3.2
0
61.3
65.9
-1.5
-2.6
0.1
0
81.6
83.1
-51.5
-52.9
0
0
39.2
39.8
-50.9
-52.0
0
0
42.4
43.3
-0.6
-0.9
0
0
667.7
-3.6
49.4
45.2
0
38.9
-9.4
-11.2
1.0
0.4
10.7
17.8
-2.5
-2.0
0
0
108.8
113.6
0.4
- 13.8
0
0
137.6
154.3
-7.5
-8.0
0.1
0
31.1
39.0
-2.4
-2.2
0
- 14.2
727.3
Financial instruments measured at amortised cost
90.7
Voluntary social benefits
5.6
4.1
Cost of exchange rate differences
5.2
4.3
Supervisory Board remuneration
4.5
4.2
Cost of agency agreements
0.3
163.9
528.0
660.1
€m
€m
(restated)
2018
2017
Social security contributions, retirement and other benefits
Total
Wages and salaries
Composition of staff costs
5. Staff costs
Further information
Notes | Consolidated income statement disclosures
Financial statements
Management report
13.0
15.8
Insurance premiums, contributions and fees
19.8
122.5
824.0
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
2018
2017
(restated)
€m
€m
Costs for IT service providers and other consulting services
164.9
Executive and Supervisory Boards
162.5
123.0
108.3
Premises expenses
80.0
75.6
Non-recoverable input tax
44.3
47.1
Travel, entertainment and corporate hospitality expenses
22.7
23.4
Advertising and marketing costs
22.6
IT costs
161.6
Deutsche Börse Group | Annual report 2018
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.
- 182.9
- 169.9
Financial liabilities measured at amortised cost
- 185.2
- 171.6
Interest expenses from negative interest environment
7.6
5.2
Financial assets or liabilities measured at fair value through profit or loss
217.2
219.5
Financial instruments measured at amortised cost
224.8
224.7
Interest income from negative interest environment
- 4.6
- 11.5
Financial assets or liabilities measured at fair value through profit or loss
- 31.5
- 53.4
Financial liabilities measured at amortised cost
- 36.1
- 64.9
Interest expenses from positive interest environment
38.4
54.7
Financial assets or liabilities measured at fair value through profit or loss
Financial assets or liabilities measured at fair value through profit or loss
Total
- 1.7
204.5
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.
For details of expected rental income from subleases see ☑ note 27.
26.3
34.0
20.0
27.2
1.7
0.5
0.8
1.1
1.2
0.6
2.6
258
4.6
€m
2017
(restated)¹)
2018
132.6
- 2.3
1) €5.1 million from other operating income were reclassified as sales revenue for the 2017 financial year. For details, see note 3.
Total
Income from agency agreements
Miscellaneous
Rental income from subleases
Income from impaired receivables
Income from exchange rate differences
Composition of other operating income
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.
€m
67.1
-197.2
7.2
0
0
90.1
91.8
0
0
43.0
44.2
Securities lending
Repo
GSF (collateral management)
106.3
155.5
751.4
758.0
0
0
91.9
97.4
Other
0
0
29.2
32.5
106.3
155.5
0
136.0
133.1
0
0
Regulatory services
0
0
122.6
127.8
Cash and derivatives
Data
0
0
145.0
162.3
0
0
0
33.5
Other
0
2017
0
Total
52.6
Settlement
0
0
62.7
68.5
Custody
IFS (investment fund services)
41.2
19.8
Net interest income from banking business
Third-party services
0
12.1
0
0
5.5
56.5
66.7
-0.5
-3.4
0
212.2
256.6
-19.4
-25.0
0.5
1.3
59.0
70.8
-1.2
-4.5
0.5
1.3
30.8
36.6
-8.0
-8.3
0
0
10.0
5.5
-3.4
-0.5
114.4
113.2
Settlement
0
0
515.9
514.9
Custody
2017
€m
€m
2018
Net interest income from banking business
€m
0
€m
2018
୮
Net revenue
Clearstream (post-trading)
Composition of net revenue (part 2)
Notes | Consolidated income statement disclosures
Further information
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
255
66.5
78.8
2017
(restated)
-199.0
13.2
0
516.2
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 ☑note 7. These costs also
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.
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
-131.5
-133.8
0.7
1.7
€m
€m
Total
18.3
27.3
Miscellaneous
12.8
68.1
80.9
-30.3
-27.6
6.5
11.1
28.7
32.1
-0.5
-0.4
0
0
2017
106.3
0
0
0
0
79.5
76.0
-34.9
-37.2
0
0
385.1
382.8
0.5
155.5
0
2018
€m
141.3
158.6
0
0
65.3
77.1
Other licences
0
0
30.6
34.2
Exchange licences
0
0
45.4
47.3
ETF licences
STOXX (index business)
0
0
178.9
197.3
0
0
43.1
49.7
Other
0
0
Total
2,941.3
2017
2018
€m
€m
€m
(restated)
2018
2017
Volume-related costs
Other operating income
Notes | Consolidated income statement disclosures
Further information
Financial statements
Management report
Executive and Supervisory Boards
Net revenue
Deutsche Börse Group | Annual report 2018
132.6
204.5
2,643.6
2,893.9
Group
0
0
-43.2
-47.4
Consolidation of internal revenue
132.6
204.5
2,686.8
256
48.8
74.2
Impairment losses
6.7
3.9-5.5
4.9-6.5
5.7
8.5
2.0
4.1
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
Deutsche Börse Group | Annual report 2018
8.4
Executive and Supervisory Boards
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)
Total expense for
software development
of which capitalised
2017
2018
(restated)¹)
Management report
€m
1) Individual releases of a software application are combined and reported as a single asset.
T7 trading platform for the cash markets
37.9
39.5
6.2
n.a.
CSDR
31.3
10.1
n.a.
n.a.
One CLS Settlement Reporting (One CSR)
10.8
12.8
TARGET2-Securities (T2S)²)
5.1-6.2
Single Network
7.4
8.8
5.1
6.1
360T (foreign exchange)
Trading platform of 360T group
18.5
14.3
1.8-6.9
2.8-6.9
Xetra (cash equities)
6.1
1CAS Custody & Portal
€m
2017
(restated)¹)
1.3
0
Other Eurex software
3.6
8.8
0.4
2.6
35.9
28.6
20.4
14.8
EEX (commodities)
0
XBID/M7
1.7
7.5
0.7
2.1
11.2
11.7
8.5
4.7
12.9
19.2
9.2
6.8
Other EEX software
2018
€m
1.8
1.6
€m
Eurex (financial derivatives)
T7 derivatives trading platform
7.2
5.3
5.1
4.0
C7
8.6
6.7
5.2
5.4
F7
OTC Clear
3.3
5.7
1.2
Eurex Clearing Prisma
0.6
0
0.4
0
Securities Lending
5.0
4.5
2.3
9.1
360T (foreign exchange)
4.9-6.1
85.7
0
5.2
0
36.7
Disposals due to
changes to the
basis of consolidation
0
-0.4
0
0
0
31.5
-0.4
-106.8
0
0
-0.2
-1.4
- 108.4
Amortisation and impairment
losses as at 31 Dec 2018
153.1
790.9
0
8.2
Disposals
126.4
0
127.4
0
-0.8
0
-2.6
Exchange rate differences
0.5
-0.4
0
0
0
0.1
Amortisation and impairment
Impairment losses
losses as at 31 Dec 2017
680.4
0
3.2
98.4
1,023.3
Amortisation
18.6
Composition of financial income in 2018
79.4
0
0
29.4
241.3
3.9-5.1
1,078.6
as at 31 Dec 2017
T7 trading platform for derivatives
Eurex Clearing Prisma
OTC CCP
31 Dec 2018 31 Dec 2017
€m
€m
31 Dec 2018
years
31 Dec 2017
years
0
38.9
2.5-4.9
3.5-5.4
20.5
C7
23.4
0.9-4.9
16.8
23.4
1.3 4.7
2.3-4.9
11.9
10.5
0.3-4.9
0.4 4.9
Clearstream (post-trading)
TARGET2-Securities (T2S)
71.8
0.9-4.9
Carrying amount
Eurex (financial derivatives)
Carrying amount") as at
36.6
285.5
2,770.9
86.8
911.2
4,091.0
Carrying amount
as at 31 Dec 2018
35.8
Interest income from financial assets measured at amortised cost
285.2
2,865.6
Remaining amortisation
period as at
52.3
4,191.6
1) Additions to payments on account and construction in progress in the previous year relate exclusively to internally developed software.
269
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
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
952.7
0
Trading platform of 360T group
9.7
10.5
Other Data software
0.6
6.5
0.2
0
16.9
19.2
3.8
10.5
Research expense
Total
3.6
2.4
0
0
130.8
1) Prior-year figures were restated due to changes in the segment structure. For details, see note 24.
154.4
80.2
87.1
262
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
1.8
Notes | Consolidated income statement disclosures
12.7
Regulatory Reporting Hub
0.6
0
One SecLend
0
1.7
0
1.6
Other GSF software
0.6
0
0.2
0
16.3
1.5
1.0
2.6
STOXX (index business)
Other STOXX software
3.0
3.9
0
3.0
3.9
0
0
Data
3.0
0
Further information
Composition of net income from strategic investments
0
-1.1
-0.1
-0.2
-0.1
0.1
4.9
4.6
2.7
1.6
1.5
196.2
0
4.2
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
Further information
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.
197.8
8. Net income from strategic investments
-0.2
-0.5
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 measurement">
0
Net income from other strategic investments
1) Including impairment losses
2018
€m
2017
€m
-2.0
-2.5
0.8
0.7
0.1
0
-0.2
0
Net income from strategic investments
3.9
0.7
1.0
2.9
3.7
1CAS Custody
4.2
16.6
3.1
14.8
CSDR
21.6
12.6
21.2
10.1
4.2
TARGET2-Securities (T2S)
11.9
0.9
8.4
One CLS Settlement Reporting (One CSR)
0
3.0
0
2.2
Customer onboarding
6.6
0
5.7
2.4
0
3.5
Clearstream (post-trading)
3.0
4.9
3.9
9.7
3.0
4.9
Xetra (cash equities)
T7 trading platform for the cash market
4.3
5.1
2.7
2.6
Local Market Partnership (LMP)
CCP releases
1.8
о
0
Other Xetra software
0.6
6.3
0
1.3
4.9
13.2
2.7
3.9
0
Customer onboarding
Other Clearstream software
4.1
0.6
1.5
0.5
3.8
0
2.9
0
IFS Swift
Other IFS software
0
2.8
0
2.0
2.2
0
0
0
6.3
3.4
4.4
2.7
GSF (collateral management)
One CMS
0.2
1.3
0.2
0.5
4.8
IFS Unity
IFS (investment fund services)
1.9
1.7
43.1
52.4
35.7
40.9
261
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
Further information
IFS Arrow
Research and development costs (part 2)
software development
of which capitalised
2017
2017
2018
(restated)¹)
2018
(restated)¹)
€m
€m
€m
€m
Total expense for
-1.8
36.9
1.3
-2.0
-1.4
Tax loss carryforwards
2.8
1.2
0
0
Deferred taxes (before netting)
136.2
0.9
131.3
-257.0
Thereof recognised in profit or loss
87.3
85.5
-224.5
-253.2
Thereof recognised in other comprehensive income²)
Deferred taxes set off
Total
-226.4
48.9
3.8
-0.7
-197.1
Financial assets
0.3
0
-2.3
-3.7
Other assets
3.7
5.0
Liabilities
-2.4
Provisions for pensions and other employee benefits
61.4
59.8
-8.7
-12.4
Other provisions
13.9
8.4
-0.1
0
45.8
-1.9
-3.8
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
Effects of different tax rates
Income tax expense
2017
€m
€m
1,156.8
1,288.9
312.3
348.0
-20.5
17.2
2018
Expected tax expense
Earnings before tax (EBT)
Reconciliation of expected with reported tax expense
-31.9
-30.2
31.9
30.2
104.3
101.1
-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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
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).
-179.1
7.6
7.3
Other intangible assets
€m
€m
339.7
412.0
320.5
376.2
19.2
35.8
-36.0
2017
-20.6
-18.4
-1.6
0.1
-22.4
-2.7
0
0.4
303.7
391.4
-12.0
2018
Total
Foreign jurisdictions
2.7
0.1
86.3
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
2018
13.1
€m
339.7
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
Deferred tax assets
Deferred tax liabilities
31 Dec 2018
31 Dec 2017¹)
€m
€m
31 Dec 2018
€m
Deferred tax income increased by €0.7 million (2017: nil) due to previously unrecognised tax losses.
Intangible assets
50.3
56.0
-210.9
31 Dec 2017¹)
€m
-238.8
43.0
Disposals
48.4
-31.8
-41.7
Internally developed software
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).
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.
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).
412.0
237.7
213.8
102.0
198.2
-36.0
-20.6
-5.9
-51.4
-30.1
30.8
303.7
391.4
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.
265
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated income statement disclosures
Further information
2017
€m
13.7
-9.4
-7.7
94.8
-108.9
Reclassifications
0
74.0
0
-74.0
0
0
Exchange rate differences
-1.4
0
4.1
0
4.3
8.7
Historical cost as at
31 Dec 2018
188.9
1,076.1
2,865.6
0.3
-0.3
0
0
5.0
90.6
66.2
161.8
Disposals due to
changes to the
basis of consolidation
0
-0.5
0
0
0
-0.5
Additions
13.2
36.4
0
44.8
0.4
Disposals
-107.2
60.5
business combinations²)
1,079.1
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.
1,076.1
2,865.6
60.5
1,079.1
5,270.2
Amortisation and impairment
losses as at 1 Jan 2017
225.1
608.5
188.9
0
71.6
907.9
Amortisation
17.5
72.3
0
0
26.8
116.6
2.7
as at 31 Dec 2018
Transfer historical cost
€m
268
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Intangible assets (part 2)
Payments on
Purchased
software
Internally
developed
account and
Other
construction in
intangible
€m
software
€m
Goodwill
€m
progress¹)
€m
assets
€m
Total
5,270.2
2.8
Acquisitions through
1,009.6
Consolidated balance sheet disclosures
11. Intangible assets
Intangible assets (part 1)
Payments on
Internally
Purchased
developed
account and
construction in
Other
Further information
intangible
€m
software
€m
Goodwill
€m
progress¹)
€m
assets
€m
Total
€m
Historical cost as at
software
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
1.0
1.6
0
-0.5
-5.1
-2.7
-10.9
-21.2
4.0
6.8
284.5
355.2
19.2
36.2
303.7
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
1 Jan 2017
5,114.3
260.6
2,721.1
Reclassifications
0.8
144.7
0
-145.5
0
0
Exchange rate differences
0.8
-2.9
-1.8
-0.2
-7.5
-15.4
Historical cost as at
31 Dec 2017
277.9
965.9
2,770.9
90.0
-6.7
0
-0.9
0
184.3
931.5
4,879.9
Acquisitions from business
combinations
0
3.5
56.5
2.2
84.4
146.6
Additions
17.7
37.1
0
50.1
1.2
106.1
Disposals
-2.0
0
782.4
3.1
Income from other financial assets measured at fair value through profit or loss
Management report
0.7
Expense from other financial liabilities measured at fair value through profit or loss
Interest-equivalent expenses for derivatives held as hedging instruments
1.4
1.8
2.5
3.1
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
0.1
26.7
47.5
Interest expense from financial liabilities measured at amortised cost
2018
6.6
0.2
0.4
0.4
0.5
Interest expense on taxes
Total
83.8
264
3.6
5.3
21.2
47.5
€m
2017
Total
Interest-equivalent expenses for derivatives held as hedging instrument"
Expenses from the unwinding of the discount on pension provisions
Interest expense on current liabilities"
Transaction costs of non-current liabilities"
Interest expense from financial assets")
Other interest expense")
Interest expense on taxes
Interest expense on non-current loans¹)
Composition of financial expense in 2017
Further information
Notes | Consolidated income statement disclosures
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
2.0
3.1
€m
2017
Other interest income and similar income
Interest income on tax refunds
0
0
1.3
0
€m
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"
Total
Other interest and similar income
Total
Composition of financial expense in 2018
7.4
0.1
2018
6.0
1.0
0.3
€m
Income from available-for-sale securities
-3.4
439.6
Acquisitions through business combinations
0.1
0
0.1
Additions
6.4
35.6
1.1
Disposals
-1.3
0
43.1
Payments on
Notes | Consolidated balance sheet disclosures
-1.1
357.8
79.6
Historical costs as at 1 Jan 2017
€m
€m
€m
Total
Financial statements
progress
account and
2.2
hardware,
operating and
office equipment
Fixtures and
fittings
€m
Computer
Property, plant and equipment
12. Property, plant and equipment
Further information
construction in
-5.8
-0.2
0
0
-0.1
0
-0.1
Additions
5.4
46.7
13.1
65.2
Disposals
-6.5
-167.5
0
-174.0
Reclassifications
Disposals from change in scope of consolidation
0.9
0
0.6
0.1
-0.1
0
Exchange rate differences
-0.4
0.5
0.1
Reclassifications
0.2
84.3
390.7
2.2
477.2
Acquisitions through business combinations
0.3
Management report
Historical costs as at 31 Dec 2017
Executive and Supervisory Boards
8.83)
274
4.6
1.0
6.5
12.23)
2.0
1.4
1.6
Trade names and exchange licences
STOXX
420.0
0.9
6.5
9.83)
2.0
7.5
Börse Frankfurt Zertifikate
6.4
1.4
2.0
1.7
4.7
MD+S segment
53.4
1.0
6.5
8.53)
2.0
6.1
4.1
Fund Services
19.6
0.9
6.5
13.13)
1.4
Deutsche Börse Group | Annual report 2018
Nodal
2.6
1.7
4.7
Börse Frankfurt Zertifikate
0.2
1.0
6.5
12.23)
2.0
1.4
1.6
1) CAGR = compound annual growth rate
2) Before tax
3) After tax
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.
1.5
26.8
9.13)
0.9
6.5
0
2.0
15.5
8.7
360T
19.9
0.8
6.5
8.23)
2.5
16.4
11.9
EEX
13.9
6.5
0.5
0
Exchange rate differences
0.1
Other financial assets measured at FVPL
13.9
17.3
1.2
Available-for-sale financial assets
13.5
Loans and receivables
1,692.0
4.9
Current assets
Financial assets measured at amortised cost
Trade receivables
13.4
397.5
331.8
0
Other financial assets measured at amortised cost
13.8
4,837.2
31 Dec 2017
31 Dec 2018
Notes
€m
(restated)
€m
Financial investments measured at FVOCI¹)
Financial assets measured at amortised cost
13.3
108.8
13.4
1,057.1
Financial assets measured at FVPL2)
Financial instruments of the central counterparties
13.7
9,985.4
Derivatives
Non-current assets
13.4
Financial assets measured at FVPL
1,322.3
1,297.6
Restricted bank balances
Other cash and bank balances
Non-current liabilities
Financial liabilities measured at amortised cost
13.6
2,283.2
1,688.4
Financial liabilities measured at FVPL
Financial instruments of the central counterparties
13.7
9,985.4
4,837.2
Other financial liabilities measured at FVPL
29,392.0
19,722.6
29,833.6
12,922.9
Financial instruments of the central counterparties
Derivatives
Other financial assets measured at FVPL
Available-for-sale financial assets
Loans and receivables
13.7
94,280.3
79,510.7
13.8
4.7
13.9
0.4
5.2
0
13.5
254.5
13.10
-0.5
Overview of financial instruments
13.1 Overview of financial instruments
Disposals
-1.3
-3.3
0
-4.6
Exchange rate differences
-0.1
0.4
0
0.3
Depreciation and impairment losses as at 31 Dec 2017
49.5
314.3
1.5
363.8
42.0
Amortisation
0
7.2
0
0.2
0
0
0.2
Historical costs as at 31 Dec 2018
83.5
271.1
14.8
369.4
Depreciation and impairment losses as at 1 Jan 2017
43.7
282.4
0
326.1
Amortisation
34.8
Deutsche Börse Group holds the following financial instruments:
8.5
0
76.4
2.2
113.4
31.3
84.8
14.8
130.9
275
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
13. Financial instruments
34.8
37.9
Carrying amount as at 31 Dec 2018
238.5
46.4
Disposals from change in scope of consolidation
0
-0.1
0
-0.1
Disposals
-5.8
-165.8
0
-171.6
Depreciation and impairment losses as at 31 Dec 2018
52.2
186.3
0
Carrying amount as at 31 Dec 2017
9.13)
%
0.9
-1.1
0.1
7.5
67.8
Balance as at 1 Jan 2018
70.1
2.9
-0.3
0
6.3
61.2
Adjustments according to IFRS 9
4.2
-2.9
-0.8
0
0.1
74.3
combinations
0
-1.8
-0.3
Disposals
16.7
0
0
3.1
13.6
Additions
0.1
0
0
0
0.1
Acquisitions from business
0.3
1.2
Balance as at 31 Dec 2017
0
0
Other operating expenses
0.3
0.5
-0.2
0
0
0
recognised in profit or loss
Unrealised capital gains/(losses)
3.4
3.4
0
0
0
6.6
-0.2
-0.2
0.5
0
0
0
0
0.5
revaluation surplus
Changes recognised in the
0.5
0.5
0
0
0
0
Other operating income
0
0
0
Unrealised capital gains/(losses)
0
9.1
89.7
Balance as at 31 Dec 2018
1.0
0
0
0
0
1.0
in equity
currency translation recognised
Unrealised gains/(losses) from
7.5
0
280
0
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.
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.
-0.2
0
98.6
1) FVPL = fair value through profit or loss
279
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
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.
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.
-1.8
0
7.5
0
0
Other operating expenses
-0.1
0
-0.1
0
0
0
Financial results
0.8
0.6
-0.1
0.3
recognised in profit or loss
-0.1
0
0
-0.1
revaluation surplus
Changes recognised in the
-0.1
0
0
-0.1
investments
Net income from strategic
1.1
0
0.7
0
0.4
0
Other operating income
0
0
Other operating income
3.4
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Key assumptions used for impairment tests in 2017
Allocated
CAGR¹
carrying
Risk-free
Market risk
Discount
Perpetuity
Operating
amount
interest rate
premium
Management report
rate
Executive and Supervisory Boards
84,081.1
Current financial instruments of the central counterparties
0
-4,837.2
0
-4,837.2
counterparties
Non-current financial instruments of the central
-0.8
0
0
-0.8
Non-current financial liabilities measured at FVPL
Financial liabilities held for trading
LIABILITIES
7.9
1,875.8
-78,526.6
growth rate
costs
6.5
11.62)
1.0
8.6
2.7
360T
189.2
0.9
6.5
8.23)
2.5
16.4
11.9
EEX
113.1
0.9
Net revenue
1,111.1
2.9
€m
13.9
%
%
%
%
%
Goodwill
Eurex Core
1,279.9
0.9
6.5
8.63)
1.0
7.1
Clearstream Core
0
-78,526.6
0
Additions
-1.5
-8.2
-0.2
0.4
0
6.5
Balance as at 1 Jan 2017
€m
€m
€m
€m
Derivatives
at FVPL
Derivatives
0
at FVPL¹)
€m
1.2
-0.4
3.4
0
0
0
0
Realised capital gains/(losses)
0.7
1.4
0
-0.3
0
-0.4
Disposals
0.8
0
0
€m
measured
measured
-3.7
-83,392.9
0
-83,396.6
Total liabilities
-2.9
-29.1
0
-32.0
Current derivatives
0
0
0
0
Non-current derivatives
1) FVPL = fair value through profit or loss
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
Equity
investments
liabilities
assets
Financial
Financial
Total
Liabilities
6.5
Assets
As at the reporting date, the items allocated to level 3 and their measurements were as follows:
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Changes in level 3 financial instruments
0
0.2
Current liabilities
1) FVOCI = fair value through other comprehensive income
-0.2
-104,056.7
0
-104,056.9
Total liabilities
0
-3.0
0
-3.0
0
-94,068.3
0
-94,068.3
Current financial instruments of the central counterparties
Current derivatives
Allocated
CAGR¹)
2) FVPL = fair value through profit or loss
carrying
277
Executive and Supervisory Boards
ASSETS
€m
€m
Level 3
Level 2
Level 1
€m
€m
thereof attributable to:
31 Dec 2017
Fair value as at
Recurring fair value measurements
Fair value hierarchy
By comparison, the financial assets and liabilities measured at fair value as at 31 December 2017 were
allocated as follows to the hierarchy levels:
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Deutsche Börse Group | Annual report 2018
Financial assets available for sale
Risk-free
amount
3.9
Clearstream
969.1
0.9
6.5
7.4
1.0
4.7
0.8
360T
Deutsche Börse Group | Annual report 2018
244.1
0.9
6.5
8.7
2.5
13.0
8.0
(Group of) CGUS
1.0
6.5
interest rate
€m
%
Market risk
premium
%
Perpetuity
Operating
Discount rate
growth rate
Net revenue
%
%
%
costs
%
Goodwill
Eurex
1,293.5
0.9
7.2
Equity investments available for sale
40.4
33.8
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.
-
-
■ 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 Sec Lend, 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
■ 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 information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Total assets
1.3
84,081.1
0
84,082.4
Total
1.2
■ 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.
0
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.
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:
€m
€m
€m
€m
€m
€m
Total
Xetra
Index
Data
IFS
EEX
GSF
360T
Clear-
stream
€m
Eurex
€m
Changes in goodwill classified by (groups of) CGUs in 2018
Goodwill and other intangible assets from business combinations
0
1.2
Non-current financial assets measured at FVPL❞
6.6
0
1,875.8
1,882.4
Total
0
0
254.5
254.5
Current financial assets available for sale
0
0
1,587.5
1,587.5
Non-current financial assets available for sale
6.6
0
Financial assets held for trading
Non-current financial instruments of the central
counterparties
4,837.2
0
5.2
0
5.2
Current derivatives
0.1
0
0
9.0
0.1
0
79,238.7
0
79,238.7
Current financial instruments of the central counterparties
0
4,837.2
0
Non-current derivatives
GSF
142.1
0.9
Financial assets measured at FVPL²)
Fair value as at
31 Dec 2018
thereof attributable to:
€m
Level 1
€m
Level 2
Level 3
€m
€m
108.8
19.1
0
89.7
108.8
19.1
0
Equity investments measured at FVOCI
Total
89.7
Financial assets measured at FVOCI¹)
Fair value hierarchy
2.5
12.4
9.4
Structured products
0.2
0.8
6.5
7.3
1.0
3.9
3.6
1) CAGR = compound annual growth rate
2) Excluding 360TGTX
3) Excluding Nodal
273
Deutsche Börse Group | Annual report 2018
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:
Recurring fair value measurements
ASSETS
Non-current financial instruments of the central
counterparties
9,985.4
0
104,288.1
8.6
104,270.4
9.1
Total assets
104,396.9
27.7
104,270.4
98.8
LIABILITIES
Financial liabilities measured at FVPL
Non-current financial instruments of the central
counterparties
-9,985.4
0
-9,985.4
Non-current financial liabilities measured at FVPL
Total
0.4
0
0
9,985.4
0
Other non-current financial assets measured at FVPL
17.3
8.6
0
8.7
Current financial instruments of the central counterparties
Current derivatives
9.9
94,280.3
94,280.3
0
4.7
0
4.7
0
Other current financial assets measured at FVPL
0.4
0
€m
6.5
2.9
6.7
Data
19.4
0.9
6.5
7.5
1.5
6.5
4.2
STOXX
18.5
0.9
6.5
7.5
1.5
8.6
7.4
10.2
Xetra
1.5
0
-0.2
6.5
8.5
1.5
3.1
1.8
EEX
115.6
0.9
6.5
7.7
1.5
9.2
6.3
IFS
56.6
0.9
6.5
7.4
6.7
0.9
6.5
19.9
0.8
6.5
7.9
2.5
11.5
6.5
EEX³)
13.9
0.8
6.5
7.3
1.5
7.1
4.5
360TGTX
1.7
360T2)
10.0
13.6
1.5
7.3
1.0
3.2
-0.5
Trade names and exchange licences
STOXX
420.0
0.8
0
6.5
1.5
7.9
8.0
Nodal
28.0
2.9
6.5
9.4
7.6
0.8
€m
1 Jan 2018
-2.2
-0.4
-4.9
0
-7.5
Balance as at 31 Dec 2017
23.0
458.2
425.7
4.3
911.2
Acquisitions through business combinations
0
1.7
64.1
0.4
66.2
Exchange rate differences
Balance as at
0
0
0.4
0.4
Amortisation
0
Exchange rate differences
-26.8
-1.0
-25.7
€m
€m
€m
€m
€m
Balance as at 1 Jan 2017
0.7
453.8
400.9
4.5
859.9
Acquisitions through business combinations.
-0.1
24.5
55.0
0
84.4
Additions
0
0
0.4
0.8
85,964.8
Amortisation
0
-0.1
4.9
Total
-28.2
-29.4
Deutsche Börse Group | Annual report 2018
276
Deutsche Börse Group's exposure to various risks associated with the financial instruments is discussed
innote 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.
2) FVPL = fair value through profit or loss
1) FVOCI = fair value through other comprehensive income
29,215.3
29,559.2
13.11
32.0
3.0
13.8
78,798.6
94,068.3
13.7
Cash deposits from market participants
Derivatives
Financial instruments of the central counterparties
Financial liabilities measured at FVPL
150.1
13,976.2
195.0
19,024.7
13.6
Other financial liabilities measured at amortised cost
13.6
Trade payables
Financial liabilities measured at amortised cost
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Exchange rate differences
1.0
0.2
3.1
0
4.3
Balance as at 31 Dec 2018
24.0
460.0
464.7
4.0
952.7
−1.1
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
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
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.
13.2 Recognised fair value measurements
Further information
272
assets
0
Member and
customer
relationships
0.1
0.1
Miscellaneous
intangible
0
4.1
Balance as at
31 Dec 2018
1,293.5
969.1
244.1
142.1
115.6
0.5
56.6
18.5
6.7
2,865.6
271
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Changes in goodwill classified by (groups of) CGUs in 2017
Börse
19.4
Eurex
2.4
0.9
1,293.4
969.0
189.2
142.1
113.2
19.6
19.3
18.4
6.7
2,770.9
Acquisitions
through business
0
combinations
0.1
54.0
0
0
36.5
0
0
0
90.6
Exchange rate
differences
0.1
0
0
Clearstream
1.2
Fund
53.4
113.1
189.2
1,111.1
1,279.9
31 Dec 2017
Balance as at
-6.7
0
0
-1.7
-5.0
19.6
0
56.5
0
0
Acquisitions through
0
56.5
0
0
0
combinations
business
MD+S
differences
4.6
Exchange rate
Other intangible assets are divided into the following categories:
Core
€m
2,770.9
Core
360T
EEX
€m
€m
€m
Services
€m
Frankfurt
Zertifikate
Total
€m
€m
segment
€m
19.6
1 Jan 2017
1,279.9
1,111.1
189.2
Changes in other intangible assets by category
Exchange
licences
61.6
55.1
4.6
2,721.1
Trade names
Balance as at
Deutsche Börse Group | Annual report 2018
0
Executive and Supervisory Boards
Management report
282
3) FVOCI = fair value through other comprehensive income
2.9
1) The figures for the 2017 financial year relate to available-for-sale financial assets.
300.1
-4.3
2.1
Financial statements
3.9
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
Notes | Consolidated balance sheet disclosures
Total
13.4 Financial assets measured at amortised cost
192.52)
€m
€m
€m
Current
Non-current
Total
Current
€m
€m
Non-current
31 Dec 2017¹)
T
31 Dec 2018
Listed debt securities
Composition of fair value of financial assets measured at amortised cost
Financial assets measured at amortised cost include the following debt instruments:
Further information
101.6
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:
€m
19.1
Trumid Holdings, LLC")
Trifacta Inc. ¹)
figo GmbH"
Digital Asset Holdings LLC"
Unlisted securities
Total listed securities
Bombay Stock Exchange Ltd."
Listed securities
€m
2018
Equity investments measured at fair value through other comprehensive income
Equity investments measured at fair value through other comprehensive income comprise the following
investments:
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.
19.1
13.3 Financial investments measured at fair value through other comprehensive income
■Trade payables
■ Trade receivables
■ Cash deposits by market participants
■ Cash and other bank balances
■ Restricted bank balances
at amortised cost
■ Other financial assets reported under (non-)current debt financial instruments measured
The carrying amounts of the following items represent a reasonable approximation of their fair value:
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
■ Other financial liabilities reported under current financial liabilities measured at amortised cost
-7.2
42.6
3.3
€m
2017¹)
2018
Total
Related to investments held as at the end of the reporting period
Related to investments derecognised during the reporting period
Dividends from equity investments held at FVOCI³)
Gains/(losses) reclassified from other comprehensive income to profit or loss
Gains/(losses) recognised in other comprehensive income
Amounts recognised in profit or loss and in other comprehensive income
None of the equity investments have been pledged as collateral by Deutsche Börse Group.
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.
Further information
Notes | Consolidated balance sheet disclosures
6.2
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
281
1) In financial year 2017, Deutsche Börse Group classified equity investments as "available for sale"; see note 13.5 for further details.
108.8
89.7
10.2
Total
Total unlisted securities
S.W.I.F.T. SCRL"
9.2
LMRKTS LLC
12.8
5.4
Management report
Taiwan Futures Exchange Corp"
During the year under review, the following gains/(losses) were recognised in profit or loss:
Financial assets classified as "available for sale" in 2017
2,283.2
19,219.7
21,502.9
1,688.4
14,126.3
15,814.7
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.
285
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Total
Financial statements
Further information
13.7 Financial instruments of the central counterparties
Composition of financial instruments of the central counterparties
31 Dec 2018
€m
Repo transactions
Options
Other
Total
thereof non-current
thereof current
Notes | Consolidated balance sheet disclosures
1) FFVPL = fair value through profit or loss
3.0
0
Interest liabilities
0
36.6
36.6
0
29.3
29.3
Liabilities from CCP
positions
0
Associate payables
3.0
0
0
1,714.9
0.1
19.6
1,714.9
0
101.7
101.7
0.1
0
0.3
0.3
19.6
Miscellaneous
31 Dec 2017
€m
63,147.3
639.8
5.5
3.9
32.0
50.4
49.8
41.6
364.4
543.9
€m
€m
451.7
31 Dec 2017
29,215.3
29,559.2
4.3
10.1
n.a.
0.3
387.2
372.7
2,268.8
5,502.2
26,555.0
31 Dec 2018
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:
290
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 amount of
financial instruments
Gross presentation of offset financial instruments held by the central counterparties
Net amount of
financial instruments
31 Dec 2018
€m
31 Dec 2017
€m
Gross amount of
offset financial instruments
31 Dec 2018
€m
31 Dec 2017
€m
31 Dec 2018
31 Dec 2017
€m
€m
Financial assets from repo
15.4
23,673.9
15.4
17.9
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
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
Bonds issued
Trade payables
31 Dec 2018
Carrying amount
Deutsche Börse Group | Annual report 2018
31 Dec 2017
Carrying amount
€m
Current
€m
Total
Non-current
Current
Total
€m
€m
€m
€m
2,283.2
Non-current
0
284
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.
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
Following the requirements of IFRS 9, listed debt instruments for 2018 are shown under financial instru-
ments measured at amortised cost in ☑note 13.4, whereas equity investments (listed and unlisted)
have been classified as equity instruments measured at fair value through other comprehensive income
as disclosed in note 13.3. Investments in funds are shown in ☑ note 13.9 as they had been classified
as debt instruments measured at fair value through profit or loss.
Total
(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
31 Dec 2017
2,283.2
1688.4
0
Commercial paper issued
0
402.2
402.2
0
274.7
274.7
Money market lendings
0
36.6
36.6
24.7
0
508.3
Bank overdrafts
0
0
0
0
7.3
7.3
Margin deposits
0
17.9
508.3
24.7
0
630.3
195.0
195.0
0
599.7
150.1
2,288.1
150.1
Deposits from securities
settlement business
0
16,796.8
16,796.8
0
12,436.5
12,436.5
Deposits from
customers
0
16,166.5
16,166.5
0
12,411.8
12,411.8
1,052.0
Deposits from credit
institutions
630.3
0
Listed securities
31 Dec 2017
€m
Total
1,289.5
3.0
1,714.8
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.
287
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Total liabilities
Financial statements
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
transferred to profit or loss. For the development of the revaluation surplus, please refer to ☑note 15.
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
Notes | Consolidated balance sheet disclosures
2018
32.0
3.0
Total current assets
2,094.8
4.7
863.2
5.2
Total assets
2,096.8
4.7
865.2
5.3
LIABILITIES
1,714.8
Current liabilities
1,289.5
3.0
1,711.9
29.1
Embedded derivatives
0
0
2.9
2.9
Total current liabilities
1,289.5
Foreign currency derivatives not designated in hedges
2017
€m
€m
Current assets
Incentive programmes
Total
Total assets
LIABILITIES
Non-current liabilities
Contingent purchase price components
Total liabilities
2.7
1.2
14.6
Total
15.1
16.3
0.4
0
1.0
0
17.7
16.3
0.2
0.8
0.2
0.8
17.3
Investment in ETFs and equity funds
Convertible bonds and loans
Non-current assets
0.7
0
0
-3.4
-0.7
0
0
4.1
0
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.
288
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
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
0.7
15. Equity
75.2
0
0.3
0
-1.5
€m
€m
2017
2018
1) FVPL = fair value through profit or loss
Fair value gains/(losses) on contingent purchase price components
Total
Distributions from ETFs
Fair value (losses)/gains on other financial assets at FVPL"
0.4
transactions
83,297.8
-34,936.0
-20,382.9
63,147.3
62,914.9
Financial liabilities from repo
transactions
-97,871.3
Financial assets from options
76,089.8
-82,585.7
65,735.2
98,083.3
34,936.0
-35,661.7
0.6
-0.6
Miscellaneous
Prepaid expenses
Tax receivables (excluding income taxes)
Other receivables from CCP transactions
Composition of other current assets
14. Other current assets
made to European Energy Exchange AG by clearing members
Liabilities from cash deposits by participants in equity trading
Total
made to Nodal Clear, LLC by clearing members
made to European Commodity Clearing AG by clearing members
made to Eurex Clearing AG by clearing members
Liabilities from margin payments
-0.2
31 Dec 2018
€m
13.11 Cash deposits by market participants
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
289
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).
13.10 Restricted bank balances
0.2
Composition of cash deposits by market participants
-20,382.9
-45,595.2
-62,935.3
40,428.1
-62,202.8
31 Dec 2017
€m
amount
31 Dec 2017
€m
Options to acquire equity investments
2.0
0
2.0
0.1
Foreign currency derivatives not designated in hedges
0
0
31 Dec 2018
€m
0
Total non-current assets
2.0
0
2.0
0.1
Current assets
Foreign currency derivatives not designated in hedges
Foreign currency derivatives qualifying as cash flow hedges
2,094.8
4.7
788.0
4.5
0
€m
31 Dec 2018
amount
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
286
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
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
Notional
amount
Carrying
amount
Notional
Carrying
0
Non-current assets
€m
Available-for-sale financial assets included the following classes of financial assets in 2017:
331.8
0
397.5
397.5
0
n.a.
n.a.
n.a.
-5.7
-5.7
0
n.a.
n.a.
n.a.
-0.9
-0.9
0
331.8
Other financial assets measured at amortised
cost²)
Reverse repurchase agreements
0
6,435.9
6,435.9
0
Money market lendings
1,287.2
1,287.2
0
n.a.
2,244.7
0
Balances on nostro accounts
4,843.5
4,843.5
0
6,516.2
6,516.2
0
2,244.7
n.a.
n.a.
-4.8
n.a.
0
0
Total expected loss on listed debt securities
n.a.
n.a.
n.a.
0
n.a.
0
Stage 1
Expected loss on listed debt securities
n.a.
n.a.
n.a.
1,624.4
572.4
Amounts recognised in profit or loss
0
5,859.9
n.a.
1,052.0
-4.8
0
331.8
331.8
0
403.2
403.2
Trade receivables net of expected loss
Listed debt securities net of expected loss
Total expected loss on trade receivables
Stage 2
Expected loss on trade receivables
Trade receivables
n.a.
n.a.
n.a.
1624.4
572.4
Stage 3
5,859.9
0
0
4.9
19,155.3
19,150.2
5.1
cost, net of expected loss
Other financial assets measured at amortised
12,927.8
12,922.9
4.9
19,155.3
19,150.2
5.1
amortised cost
Total other financial assets measured at
6.1
6.1
0
12,922.9
12,927.8
Total
1,057.1
13.5 Financial assets previously classified as available-for-sale financial assets
Margin calls
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).
As in the previous year, there were no trade receivables due after more than one year as at
31 December 2018.
All of the debt instruments held as at 31 December 2018 were listed and issued by sovereign or
sovereign-guaranteed issuers.
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.
Further information
Notes | Consolidated balance sheet disclosures
23.7
Financial statements
Deutsche Börse Group | Annual report 2018
283
13,259.6
13,254.7
4.9
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
21,177.2
20,120.1
Executive and Supervisory Boards
23.6
Management report
Other
0.1
0.3
0.5
0.1
0.4
Receivables from related parties
754.7
754.7
0.4
0
2,253.3
Overdrafts from settlement business
14.8
14.8
0
18.5
0.1
18.5
2,253.3
Interest receivables
0
45.2
0
0
112.4
1,608.9
1,608.9
112.4
Central counterparty balances
7.5
2.9
0
8.4
3.8
4.6
Receivables from deposits
41.3
41.3
45.2
4.6
0
100%
100%
DB1 Ventures GmbH
100%
Clearstream Banking AG
100%
40%
China Europe International
Exchange AG
STOXX Ltd.
100%
Eurex Repo GmbH
100%
International S.A.
100%
Clearstream
Eurex Clearing AG
360TGTX Inc.
100%
Eurex Global Derivatives AG
Börse Frankfurt
Deutsche Börse Photography
Foundation gGmbH
Exchange AG
Centre Ltd.
Deutsche Börse
Commodities GmbH
Deutsche Börse
Services s.r.o.
100%
100%
Pte. Limited
Clearstream Funds
European Energy
Cleartrade Exchange
100%
Clearstream Banking S.A.
100%
Tradegate Exchange GmbH
75%, 25%4)
100%
Zertifikate AG
75%2)
REGIS-TR S.A.
50%
Clearstream Holding AG
100%
Combined management report
100%
Notes
Financial statements
Management report | Fundamental information about the Group
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
180 Combined corporate governance statement
and corporate governance report
Further infomation
157 Remuneration report
150 Deutsche Börse AG
143 Report on expected developments
136 Report on opportunities
111 Risk report
100%
86 Combined non-financial statement
(disclosures based on the HGB)
360 Treasury Systems AG
100%
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).
Overview of Deutsche Börse Group
Eurex Frankfurt AG
Deutsche Börse AG¹)
Shareholding structure of Deutsche Börse Group
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.
Further infomation
Notes
Fundamental information about the Group
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
28
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.
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.
Business operations and Group structure
Management report | Fundamental information about the Group
16%
Reporting segment
100%
■ 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
Eurex (financial derivatives)
EEX (commodities)
360T (foreign exchange)
Xetra (cash equities)
Clearstream (post-trading)
IFS (investment fund services)
GFS (collateral management)
STOXX (index business)
Data
Business areas
■ 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
86 Report on post-balance sheet date events
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.
Management
■ Technology and reporting solutions for external customers
■ Trading participant connectivity
■ Distribution of licences for trading and market signals
■ Development and marketing of indices (STOXX® and DAX®)
■ 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.
■ Global securities financing and collateral management services, such as collateralised money market
lending, repo or securities lending transactions
■ Custody and settlement services for securities
■ Admission of securities (listing)
■ Central counterparty for equities and bonds
■ Cash market with the Xetra®, Börse Frankfurt and Tradegate trading venues
■ Central counterparty for on- and off-exchange derivatives
■ Electronic foreign-exchange trading (360T®)
■ Investment fund services (order routing, settlement and custody)
■ The former Clearstream segment was divided into three segments: Clearstream (post-trading), IFS
(investment fund services) and GSF (collateral management).
■ The former Eurex segment was divided into three segments: Eurex (financial derivatives), EEX
(commodities) and 360T (foreign exchange).
Since 1 January 2018, Deutsche Börse Group has divided its business activities into nine segments:
11%, 40%³)
EPEX SPOT SE
100%
Powernext SAS
100%
Prague s.r.o.
Deutsche Boerse
Clearstream Operations
Securities Services Limited
Clearstream Global
100%
LLC
Nodal Exchange Holdings,
BrainTrade Gesellschaft
für Börsensysteme mbH
14%, 14%5)
100%
European Commodity
Clearing AG
Systems, Inc.
100%
LuxCSD S.A.
50%
Reporting segments
Further infomation
Notes
Financial statements
Management report | Fundamental information about the Group
Executive and Supervisory Boards
Clearstream Services S.A.
100%
Deutsche Börse Group | Annual report 2018
29
5) Direct equity interest Deutsche Börse AG: 14%, direct equity interest Börse Frankfurt Zertifikate AG: 14%
4) Direct equity interest Deutsche Börse AG: 75%, direct equity interest Tradegate AG Wertpapierhandelsbank: 25%
3) Direct equity interest European Energy Exchange AG: 11%, direct equity interest Powernext SAS: 40%
2) Economic participation; lower voting rights
1) Simplified presentation of main shareholdings (rounded values), as at 1 January 2019
29
43 Report on economic position
■ 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
28 Fundamental information about the Group
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.
■ Discussion about the quarterly compliance and risk management reports presented
Risk Committee (five meetings during the reporting period, including one joint meeting with
the Technology Committee)
Further information
Notes
Financial statements
Management report
the Supervisory Board committees in 2018 can be found in the ☑“Combined corporate governance
statement and corporate governance report" section of the combined management report. The
committees focused on the following key issues:
Executive and Supervisory Boards | Report of the Supervisory Board
23
■ Dealing with the suitability assessment, effectiveness review and training schedule
■ Preparations for the election of the shareholder representatives to the Supervisory Board by the
ordinary Annual General Meeting 2018
■ 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
■ 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
Nomination Committee (five meetings during the reporting period)
Deutsche Börse Group | Annual report 2018
Ongoing enhancements to Group-wide compliance and risk management and the harmonisation
of internal control systems
Further information
Financial statements
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards | Report of the Supervisory Board
Management report
Executive and Supervisory Boards | Report of the Supervisory Board
Deutsche Börse Group | Annual report 2018
22
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
Committee work
Notes
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.
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.
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.
Further information
Notes
Financial statements
Management report
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.
■ Deutsche Börse Group's risk strategy and risk culture
■
■
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
45
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
report
Combined management
46
26
Chairman of the Supervisory Board
Joachim Faber
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.
Fondi
For the Supervisory Board:
Frankfurt/Main, 8 March 2019
The Supervisory Board would like to thank the Executive Board and all employees for their strong
commitment and excellent achievements in 2018.
No conflicts of interest arose with regard to individual Supervisory Board members during the reporting
period.
Management of individual conflicts of interest
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.
dini Bulu
The following personnel changes were made to the Supervisory Board during the reporting period:
Personnel matters
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.
Digitalisation and implementation of associated changes to the organisational structure and enterprise
processes
■ Implementation and refinement of Deutsche Börse Group's IT strategy
Technology Committee (four meetings during the reporting period, including one joint meeting
with the Risk Committee)
Strategic discussion of major industry trends, political developments, the Group's competitive position,
as well as organic and inorganic growth opportunities
■
■ Offer for clearing interest rate swaps in the European Union (euro clearing)
■ Discussion of measures to be implemented to meet the MaRisk requirements
■ 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
■ Discussion of the impact of potential Brexit scenarios
■ General Data Protection Regulation (GDPR)
▪ Risk management in the Clearstream subgroup
■ Annual report on security risks
Managing credit and product-specific risks
Operational risk, information security and business continuity management
Strategy Committee (one meeting during the reporting period)
42 Deutsche Börse AG shares
■ Cloud computing, cloud migration strategies, and relevant cloud security standards
Chairman's Committee (one meeting during the reporting period)
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.
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.
Further information
Notes
Financial statements
Management report
■ Information security, IT risk management and cyber resilience
Executive and Supervisory Boards | Report of the Supervisory Board
24
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
Audit of the annual and consolidated financial statements
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.
Mediation Committee (no meetings 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.
Deutsche Börse Group | Annual report 2018
30
9.1
300
-0.3
- 177.1
0
0
- 7.2
0
- 57.2
0
0
- 24.2
- 0.3
- 23.9
0
0
0
- 2.5
1.0
50.3
41.9
0
- 2.7
- 43.9
0
- 8.4
- 1.0
-0.2
77.4
0
0
0
0
4.6
0
- 7.3
0
0
- 10.5
30.6
0
30.6
0
0
36.9
1.2
0
- 3.5
€m
€m
€m
€m
€m
- 183.8
0.7
0
103.5
- 18.5
0
- 153.2
0
10.5
- 189.4
0
0
2.8
0.3
- 0.1
0
0
0
- 0.1
0
Total
38.1
0
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
294
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.
Notes | Consolidated balance sheet disclosures
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.
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.
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.
Regulatory capital requirements and regulatory capital ratios
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.
Accumulated profit
Further information
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.
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".
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.
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
295
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
None of the Group companies subject to solvency supervision has Tier 2 supplementary capital.
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.
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).
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.
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.
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.
Notes | Consolidated balance sheet disclosures
2.7
Financial statements
Executive and Supervisory Boards
0
0
-0.3
0
0
0
48.9
7.1
6.9
0
0
2.1
0
0
0.1
0
47.0
6.6
Deutsche Börse Group | Annual report 2018
293
- 10.2
-0.2
- 128.3
19.6
0
- 111.3
0
41.5
0
- 133.5
- 2.5
0
7.8
Management report
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.
Other
Cash flow hedges
€m
€m
investments
Available-for-sale
Recognition of
hidden reserves from
fair value measurement
Revaluation surplus
Equity investments
measured at FVOCI¹)
€m
The development of the revaluation surplus is as follows:
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Revaluation surplus
103.7
111.4
0
0
Reversal to profit or loss
0
0
0
Reclassifications
0
101.6
0
0
0
0
Fair value measurement
Changes from defined benefit and
similar obligations
Balance as at 1 Jan 2017 (gross)
291
-192.5
There were no further subscription rights to shares as at 31 December 2018 or 31 December 2017.
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.
11 May 2016
13,300,000
capital 11)
Authorised share
Date of
authorisation
by the
shareholders
Amount in €
10 May 2021 n.a.
Existing shareholders' pre-emptive rights may be disapplied for
Expiry date fractioning and/or may be disapplied if the share issue is:
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Composition of authorised share capital
Authorised share
capital II¹)
19,300,000
13 May 2015
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.
Contingent capital
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.
16 May 2022 n.a
17 May 2017
6,000,000
capital IV¹)
Authorised share
12 May 2020 n.a.
13 May 2015
38,600,000
Authorised share
capital III¹)
▪ against non-cash contributions for the purpose of acquiring
companies, parts of companies, interests in companies, or
other assets.
■ 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.
12 May 2020
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.
Defined benefit
obligations
0
103.7
Balance as at 1 Jan 2017 (net)
-1.9
0
0
Balance as at 31 Dec 2018
-0.3
103.7
0
0.1
0
0
Additions
-1.7
1.1
Reversals
67.2
0
Balance as at 31 Dec 2017 (net)
instruments
Available-for-sale debt
Notes | Consolidated balance sheet disclosures
Further information
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
1) FFVOCI = fair value through other comprehensive income
14.6
0
103.7
Balance as at 31 Dec 2018 (net)
0
19.4
103.7
0
Balance as at 31 Dec 2017 (gross)
First-time adoption of IFRS 9 at 1 Jan 2018
-1.1
-7.2
0
0
Fair value measurement
0
0
Balance as at 31 Dec 2018 (gross)
0
23.7
-20.5
0
First-time adoption of IFRS 9 at 1 Jan 2018
0
20.5
Changes from defined benefit obligations
103.7
0
16.5
0
Balance as at 31 Dec 2017
0
-34.3
0
Reversals
0
77.4
0
Additions
0
-44.2
0
Balance as at 1 Jan 2017
Deferred taxes
0
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.
292
296
3.8
1.0
4.6
7.4
3.8
3.3
8.4
3.5
0.3
0.5
0.9
0.7
0.2
€m
2.8
8.4
1) Eurex Bonds GmbH ceased its business operations as at 31 December 2017.
Compliance with own funds requirements
31 Dec 2017
€m
10.4
0.9
1) Eurex Bonds GmbH ceased its business operations as at 31 December 2017.
360 Treasury Systems AG
Eurex Repo GmbH
Eurex Bonds GmbH¹)
€m
€m
€m
31 Dec 2018
31 Dec 2017
31 Dec 2018
Equity ratio
Regulatory equity
Own funds requirements
31 Dec 2017
31 Dec 2018
31 Dec 2018
€m
31 Dec 2017
- 10.0
-11.5
-150.0
-150.0
-8.3
-7.4
364.8
0
88.9
108.9
464.8
514.8
EMIR capital adequacy ratio
Own contribution to default fund
0
314.8
90.0
70.6
31 Dec 2018
€m
€m
€m
31 Dec 2017
31 Dec 2018
7г
7г
Own funds requirements
to be met
Own funds requirements on the
basis of fixed overheads
Own funds requirements for credit
and market risk
360 Treasury Systems AG
Eurex Repo GmbH
Eurex Bonds GmbH¹)
Composition of own funds/capital requirements
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.
€m
EMIR deductions
%
3.3
26.0
26.4
3.6
5.9
33.5
33.5
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.
9.7
1.2
1.6
0.7
0.9
Nodal Clear, LLC
Powernext SAS
9.3
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.
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.
20.0
Appropriation to retained earnings
495.0
Distribution of a regular dividend to the shareholders of €2.70 per share for 183,347,045 no-par value shares
carrying dividend rights
Proposal by the Executive Board:
Unappropriated surplus
Appropriation to other retained earnings in the annual financial statements
515.0
-17.2
Net profit for the period
532.2
€m
31 Dec 2018
Proposal on the appropriation of the unappropriated surplus
Cleartrade Exchange Pte. Limited
31 Dec 2017
%
6.4
3.9
Deutsche Börse Group | Annual report 2018
299
the amount of at least 50 per cent of annual operating costs.
According to Delegated Regulation (EU) No 150/2013, REGIS-TR S.A. is required to maintain equity in
339.3
342.9
Executive and Supervisory Boards
28.5
8.4
8.4
1,200.0
184.2
545.5
7.0
18.0
28.8
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
5.2
REGIS-TR S.A.
€m
€m
€m
€m
31 Dec 2017
31 Dec 2018
31 Dec 2017
31 Dec 2018
Regulatory equity
Own funds requirements
Compliance with own funds requirements
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.
Further information
9.9
Equity
3.8
65.2
113.8
97.4
Clearstream Banking AG
356.1
406.0
49.9
5.9
93.5
312.5
Clearstream Banking S.A.
487.8
556.6
67.7
146.9
306.2
3.6
103.2
117.4
9.7
23.1
1.6
3.7
8.1
19.4
Clearing AG
European Commodity
74.8
101.3
3.9
26.1
70.9
75.2
Eurex Clearing AG
420.1
€m
€m
31 Dec 2017
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 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 implementation of the so-called CRR II package and other amendments under Basel III
(presumably applicable not before the third quarter of 2019)
for equity and eligible liabilities (MREL) as a result of Directive (EU) No 59/2014
■ The establishment of own funds requirements resulting from the introduction of minimum requirements
■ The future applicability of own funds requirements based on the Central Securities Depositories
Regulation (CSDR)
■ The successively increasing capital buffers under CRD IV
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:
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
36.9
Deutsche Börse Group | Annual report 2018
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.
Regulatory capital ratios¹)
297
Executive and Supervisory Boards
31 Dec 2018
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
€m
31 Dec 2018
Total capital requirements
Own funds requirements for credit
and market risk
Own funds requirements for
operational risk
Clearstream Holding group
Composition of own funds requirements
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Deutsche Börse Group | Annual report 2018
Clearstream Holding group
409.9
Regulatory equity
European Commodity Clearing AG
Eurex Clearing AG
31 Dec 2018
Capital adequacy requirements under EMIR
changes in the regulatory framework, the capital resources will be adjusted as needed; this is expected for
the first half of 2019.
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
298
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
―
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.
1) Regulatory capital ratios according to Regulation (EU) No. 575/2013 (CRR)
31 Dec 2018
101.3
31 Dec 2017
€m
153.5
179.2
Own funds requirements
Total EMIR capital requirements under Article 16 of EMIR
27.2
42.0
78.7
77.9
9.7
23.2
74.8
101.3
Own funds requirement for operational, credit and market risk
Other EMIR capital requirements
€m
€m
€m
Eurex Clearing AG
31 Dec 2017
49.7
21.2
21.9
1,289.7
1,525.5
487.7
%
Clearstream Banking S.A.
31 Dec 2017
31 Dec 2017
€m
31 Dec 2018
€m
31 Dec 2017
€m
€m
31 Dec 2018
Total capital ratio
31 Dec 2018
%
406.0
556.6
308.9
74.8
21.0
28.6
464.8
369.3
514.8
117.4
103.2
Clearstream Banking AG
23.8
21.9
1,061.3
1,112.0
40.6
356.1
%
Germany
%
Salary growth
1.75
Discount rate
%
Switzerland
%
%
Switzerland
Luxembourg
Germany
Luxembourg
1.75
%
1.00
2.00
1.80
31 Dec 2017
0
1.80
Staff turnover rate
0
2.00¹)
1.80
1.80
2.00
1.00
3.30
3.50
1.00
3.30
3.50
0.70
Pension growth
31 Dec 2018
Contributions:
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:
0
-0.6
0.6
-37.3
-37.3
Balance as at 31 Dec 2018
Tax and administration costs
-11.6
Settlements
Plan participants
Employers
0.3
-0.2
Effect of exchange rate differences
2.00¹)
0.5
Benefit payments
Actuarial assumptions
11.6
0
Assumptions
In financial year 2018, employees converted a total of €6.9 million (2017: €6.4 million) of their
variable remuneration into deferred compensation benefits.
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
0
Deutsche Börse Group | Annual report 2018
1) Thereof €-0.1 million (2017: nil) in the offsetting item for non-controlling interests
164.1
-372.1
536.2
0.6
1.4
-0.8
304
n.a.2)
0.2
2.00¹)
Management report
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).
Executive and Supervisory Boards
For details on share-based payments, see note 28.
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
19. Other non-current provisions
Other non-current personnel provisions
Deutsche Börse Group | Annual report 2018
2) Relates primarily to reclassifications to the employee-funded deferred compensation plan (see note 17) as well as to reclassifications from liabilities
0
23.8¹)
0
0
0
0.1
0
309
0
0.8
8.3
2.9
15.2
20.9
477.5
1) IHK Industrie- und Handelskammer Frankfurt am Main (the Frankfurt/Main Chamber of Industry and Commerce)
0
2.00¹)
Miscellaneous
thereof with remaining maturity of between 1 and 5 years
184.3
120.3
165.6
96.8
18.7
23.5
310
1.4
Executive and Supervisory Boards
305
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.
Sensitivity analysis
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.
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)
1) Up to the age of 50, afterwards O per cent
n.a.2)
Deutsche Börse Group | Annual report 2018
Total
3.9
6.2
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
31 Dec 2017
€m
€m
84.5
6.2
52.4
36.1
9.8
5.0
8.3
9.2
7.1
10.0
64.5
22.9
31 Dec 2018
€m
0
303
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.
Switzerland
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.
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.
Luxembourg
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.
Deutsche Börse Group | Annual report 2018
Further information
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
302
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.
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.
Notes | Consolidated balance sheet disclosures
Germany
Executive and Supervisory Boards
Financial statements
Interest expense/(income)
Current service cost
167.9
-324.7
492.6
Balance as at 1 Jan 2017
€m
Management report
€m
Total
Fair value of
plan assets
Present value
of obligations
Changes in net defined benefit obligations
The present value of defined benefit obligations can be reconciled as follows with the provisions reported
in the consolidated balance sheet:
Further information
Notes | Consolidated balance sheet disclosures
€m
26.9
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.
Essentially, the retirement benefits encompass the following retirement benefit plans:
70.6
206.0
Eligible current employees
€m
31 Dec 2017
Other
€m
€m
18.3
Luxembourg
Total
Total
Allocation of the present value of the defined benefit obligation to the beneficiaries
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
310.0
Germany
€m
Executive boards of Group companies (Germany and Luxembourg)
294.9
Former employees with vested entitlements.
507.6
536.2
18.6
72.9
444.7
94.7
91.5
271.7
0
90.8
Pensioners or surviving dependants
141.2
149.8
0.3
1.6
147.9
0.7
0.9
26.9
-5.5
-6.5
8.9
27.4
27.4
144.2
-363.4
507.6
2.4
0.6
-0.8
0.1
Management report
0.6
0
13.2
-13.2
1.4
0
2.7
39.0
Effect of exchange rate differences
-2.3
-2.3
Experience gains
3.7
3.7
Losses from changes in financial assumptions
2.7
-0.5
Return from changes in demographic assumptions
22.9
22.9
Losses on plan assets, excluding amounts already recognised in interest income
Remeasurements
32.5
-6.5
-0.5
8.3
-0.8
-23.4
-0.1
Effect of exchange rate differences
-5.1
-5.1
Experience gains
-1.0
-1.0
-0.1
Losses from changes in financial assumptions
-24.3
Return on plan assets, excluding amounts already recognised in interest income
Remeasurements
29.7
-5.5
35.2
2.8
-24.3
0.8
-0.2
-24.4
-23.4
Past service cost and gains and losses on settlements
Interest expense/(income)
Current service cost
Balance as at 31 Dec 2017
Tax and administration costs
Settlements
-6.2
Benefit payments
Employers
Contributions:
Effect of exchange rate differences
-0.1
1.3
-1.4
-30.6¹)
Plan participants
9.6
496.3
1.0
€m
%
Bonds
Government bonds
Multilateral development banks
Corporate bonds
299.8
%
80.5
71.0
217.3
197.3
0
0
82.5
60.9
258.2
Derivatives
€m
31 Dec 2018
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.
306
31 Dec 2017
Deutsche Börse Group | Annual report 2018
Management report
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
Executive and Supervisory Boards
1) Present value of the obligations using assumptions in accordance with the "Actuarial assumptions" table
Equity index futures
Investment funds
Total plan assets
16.9
4.5
14.9
4.1
32.2
8.7
Total unlisted
69.1
49.1
13.2
84.0
23.1
372.1
100.0
363.4
19.0
Interest rate futures
Cash
76.9
Total listed
2.5
0.7
1.7
0.5
-0.3
-0.3
Qualifying insurance policies
2.8
20.7
5.6
19.5
5.4
323.0
86.8
279.4
2.0
100.0
-2.7
0
-14.6
Increase by 0.5 percentage points
Management report
-7.4
468.6
-7.7
Reduction by 0.5 percentage points
433.3
582.7
552.4
8.8
Reduction by 1.0 percentage point
634.2
18.3
602.3
18.7
8.7
Salary growth
-14.2
Increase by 1.0 percentage point
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
31 Dec 2018
defined benefit
460.2
31 Dec 2017
defined benefit
Change
%
obligation
€m
Change
%
Present value of the
obligation¹
536.2
507.6
Discount rate
obligation
€m
494.0
Increase by 0.5 percentage points
2.6
-0.8
502.1
-1.1
Reduction by 0.5 percentage points
525.6
-2.0
496.2
531.7
-2.2
Increase by one year
537.6
0.3
521.1
2.7
Reduction by one year
536.0
Life expectancy
549.9
Reduction by 0.25 percentage points
513.6
520.2
2.5
Reduction by 0.5 percentage points
529.1
-1.3
497.3
-2.0
1.2
Pension growth
549.3
2.4
520.0
2.4
Increase by 0.25 percentage points
542.9
1.2
Increase by 0.5 percentage points
8.7
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.
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.
0.1
0
0
0
0.6
0
0
0
0
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)
0
Balance as at 1 Jan 2018
11.2
16.2
-9.2
0.3
-1.0
0
-17.0
-75.3
-3.3
36.6
-6.4
-4.3
-11.8
0
-1.2
-0.3
111.9
114.8
-2.0
0
Reclassification²)
Reversal
0
0
3.1
0.1
- 6.7
0
-0.5
311.9
- 8.0
- 112.8
- 1.1
- 2.7
- 3.4
- 1.0
- 25.8
0
-0.3
Utilisation
12.5
5.1
Additions
Currency translation
Interest
Balance as at 31 Dec 2018
Pension
obligations
to IHK¹)
Other
Total
14.8
€m
personnel
provisions
(part 1 and
Miscellaneous
€m
€m
part 2)
€m
9.2
Operational
claims
€m
Risks
3.7
66.4
pension
payments¹)
31 Dec 2017
€m
€m
Less than 1 year
Between 1 and 2 years
19.6
Expected
17.7
15.1
Between 2 and 5 years
More than 5 years up to 10 years
Total
42.8
40.7
112.4
14.5
99.8
Expected
pension
payments¹)
31 Dec 2018
The weighted duration of the pension obligations was 16.1 years (2017: 16.6 years) as at
31 December 2018.
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Expected maturities of undiscounted pension payments
Financial statements
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
Notes | Consolidated balance sheet disclosures
42.1
189.3
1) The expected payments in Swiss francs were translated into euros at the relevant closing rate on 31 December.
Balance as at 31 Dec 2018
Restructuring
and
efficiency
measures
Bonuses
Interest on
taxes
Share-based
Recourse and
Interest
payments
€m
€m
€m
€m
€m
57.3
100.8
litigation risks
173.3
Currency translation
Reversal
308
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Consolidated balance sheet disclosures
Further information
Additions
The expected costs of defined benefit plans amount to approximately €16.5 million for the 2019
financial year, including net interest expense.
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)
Balance as at 1 Jan 2018
Reclassification¹)
Utilisation
Defined contribution pension plans and multi-employer plans
Executive and Supervisory Boards
-0.5
301
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
Total
Total
Germany
17. Provisions for pensions and other employee benefits
Luxembourg
€m
Other
€m
31 Dec 2018
€m
31 Dec 2017
€m
Present value of defined benefit obligations
€m
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.
183,347,045
-6,652,955
Deutsche Börse Group | Annual report 2018
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
that are at least partially funded
441.1
Financial statements
18.5
164.1
139.9
4.3
144.2
Impact of minimum funding requirement/
asset ceiling
0
0
0
0
0
Amount recognised in the balance sheet
136.6
1.7
164.1
144.2
72.3
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:
1.7
25.8
25.8
Net liability of defined benefit obligations
136.6
Fair value of plan assets
-47.1
531.9
-372.1
503.3
-363.4
Funded status
133.0
-16.9
1.6
159.8
4.3
25.2
0.1
0.6
-308.1
3.6
Present value of unfunded obligations
824.3
17,366
186,853,039
874.3
Weighted average number of shares used to compute diluted earnings per share
Net profit for the period attributable to Deutsche Börse AG shareholders (€m)
7,605
Number of potentially dilutive ordinary shares
186,835,673
184,887,281
Weighted average number of shares outstanding
186,610,158
184,894,886
Number of shares outstanding as at beginning of period
Number of shares outstanding as at end of period
186,805,015
186,610,158
2017
2018
Calculation of earnings per share (basic and diluted)
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.
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.
7,605
7,605
31 Dec 2018
Earnings per share (basic) (€)
183,347,045
Earnings per share (diluted) (€)
■ The former Clearstream segment was divided into three segments: Clearstream (post-trading),
4.68
■ Electronic trading of European derivatives (Eurex Exchange)
Business areas
Xetra (cash equities)
360T (foreign exchange)
EEX (commodities)
Eurex (financial derivatives)
Internal organisational and reporting structure
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.
■ The Group continues to report on business developments in the cash market within the Xetra
(cash equities) segment.
■ 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.
IFS (investment fund services) and GSF (collateral management).
ordinary shares
■ The former Eurex segment was divided into three segments: Eurex (financial derivatives),
EEX (commodities) and 360T (foreign exchange).
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:
24. Segment reporting
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.
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
315
4.68
4.46
4.46
Number of
potentially
dilutive
Adjustment of
7,605
-29,215.3
-29,559.2
Current liabilities from cash deposits by market participants
-29.0
0
Derivatives
733.5
1,999.0
less financial instruments with an original maturity exceeding 3 months
-13,976.2
-19,024.7
Current financial liabilities measured at amortised cost
-1,507.1
less financial instruments with an original maturity exceeding 3 months
13,172.6
19,722.6
712.1
1,297.6
29,392.0
29,833.6
1,322.3
212.0
Net position of financial instruments held by central counterparties
Current financial instruments measured at amortised cost
Other cash and bank balances
Restricted bank balances
31 Dec 2017
(restated)
€m
€m
Cash and cash equivalents
111.50
1,839.0
314
0
€
31 Dec 2018
€
€
0
for the period"
Average price
Average
number of
outstanding
options
to IAS 33
Exercise price
price according
Total
2014²)
Tranche
the exercise
■ Eurex Repo over-the-counter (OTC) trading platform
Calculation of the number of potentially dilutive ordinary shares
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:
In order to determine diluted earnings per share, potentially dilutive ordinary shares that may be
acquired under the share-based payment programmes (see also note 28) were added to the average
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.
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.
23. Earnings per share
Further information
Notes | Other disclosures
Financial statements
Deutsche Börse Group | Annual report 2018
580.2
Electronic clearing architecture C7
Development and sales of indices (STOXX and DAX)
■ Electronic trading of power and gas products as well as emissions certificates
(EEX group)
GSF (collateral management)
51.7
46.0
-85.7
-108.3
137.6
154.3
IFS (investment fund services)
373.1
375.2
-294.6
-351.9
667.7
727.3
Clearstream (post-trading)
115.1
115.5
-108.4
-118.8
218.3
228.7
Xetra (cash equities)
20.0
28.9
-46.5
83.1
81.6
-48.4
-38.7
Depreciation
Employees
Segment reporting (part 2)
1,528.5
1,443.7
-1,131.6
-1,340.2
2,462.3
2,779.7
Group
94.6
86.7
-49.9
-59.6
154.2
170.3
Data
79.9
90.6
-47.7
-53.9
127.7
144.5
STOXX (index business)
42.9
34.2
-83.5
■ Central counterparty for on- and off-exchange derivatives and repo
transactions
66.5
360T (foreign exchange)
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
316
Trading participant connectivity
•
■ Technology and reporting solutions for external customers
■ Distribution of licences for trading and market signals
31 Dec 2018
■ Global securities financing services and collateral management, repos and
securities lending
■ Investment funds and hedge funds services (order routing, settlement and
custody)
O Custody and settlement services for domestic and international securities
"
STOXX (index business)
Data
GSF (collateral management)
IFS (investment fund services)
Clearstream (post-trading)
■ Admission of securities (listing)
■ Central counterparty for equities and bonds
■ Cash market with the Xetra, Börse Frankfurt and Tradegate trading venues
■ Central counterparty for on-and off-exchange traded derivatives
■ Electronic trading of foreign exchange (360T)
■ Central counterparty for traded spot and derivatives products
Further information
Segment reporting (part 1)
Net revenue
Operating costs
88.2
107.2
-124.0
-149.2
212.2
256.6
EEX (commodities)
663.0
559.4
-326.4
-376.3
796.5
78.8
936.1
€m
2017
2018
€m
€m
€m
€m
2017
2018
(restated)
2018
€m
2017
EBITDA
Eurex (financial derivatives)
Reconciliation of cash and cash equivalents
Total investments according to segment reporting
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.
5.4
0.6
0.4
7.6
6.8
21.7
24.5
37.7
36.4
364.4
543.9
€m
€m
31 Dec 2017
31 Dec 2018
Total
Miscellaneous
Liabilities to supervisory bodies
Special payments and bonuses
Contract liabilities
Deferred income
Social security liabilities
Vacation entitlements, flexitime and overtime credits
Tax liabilities (excluding income taxes)
Liabilities from CCP positions
5.9
Composition of other current liabilities
2.8
2.7
-30.5
Subsequent measurement of non-derivative financial instruments
€m
€m
2017
2018
Composition of other non-cash income
Other non-cash effects consist (consisted) of the following items:
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.
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 "Financial position" section of the combined
management report.
Cash flows from operating activities
22. Consolidated cash flow statement disclosures
Other disclosures
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
311
455.0
628.8
11.7
5.9
2.6
2.8
Current liabilities are composed as follows:
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.
5.9
66.4
79.6
90.8
112.3
€m
€m
31 Dec 2017
31 Dec 2018
Total
Miscellaneous
Operational claims
Share-based payments
Other current personnel provisions
Recourse and litigation risks
Restructuring and efficiency measures
Interest on taxes¹)
Bonuses
Composition of other current provisions
20. Other current provisions
Further information
Notes | Consolidated balance sheet disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
64.0
4.9
12.6
3.7
15.4
5.9
5.4
0
10.0
€m
€m
31 Dec 2017
31 Dec 2018
Total
Contract liabilities (short-term)
Contract liabilities (long-term)
89.4
Contract liabilities
21. Other liabilities
1) Provisions for interest on taxes amounting to €10.8 million (2017: nil) have an estimated remaining maturity of more than one year.
191.6
293.2
6.2
7.2
5.1
2.9
6.0
5.6
8.5
9.0
Deutsche Börse Group reports the following contract liabilities resulting from contracts with customers:
Reversal of discount and transaction costs from long-term financing
2.9
3.4
22.0
2.8
6.1
3.3
1.3
GSF (collateral management)
IFS (investment fund services)
Xetra (cash equities)
Clearstream (post-trading)
360T (foreign exchange)
10.8
12.4
EEX (commodities)
10.9
14.4
Eurex (financial derivatives)
Replacement investments
79.7
79.9
10.5
3.8
0
0
2.6
1.0
0.5
19.2
11.8
5.3
2.6
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).
Deutsche Börse AG paid dividends totalling €453.3 million for the 2017 financial year (dividend for
the 2016 financial year: €439.0 million).
Cash outflows from financing activities totalled €832.9 million (2017: €501.0 million).
Cash flows from financing activities
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.
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).
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
4.4
313
EBIT
149.2
160.0
69.5
80.1
12.9
6.1
1.6
3.4
Data
STOXX (index business)
2.7
1) Prior-year figures were restated due to changes in the segment structure. For details, see note 24.
Reconciliation of cash and cash equivalents
41.0
3.9
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).
Cash flows from investing activities
-96.4
-21.3
Total
6.0
4.1
-191.0
0
Gains on the disposal of subsidiaries and equity investments
Miscellaneous
0
-1.2
Changes in contract liabilities
-8.0
0.8
Subsequent measurement of derivatives
0
0.9
Impairment of financial instruments
1.0
1.0
Equity method measurement
2.8
0.7
Reversal of the revaluation surplus for cash flow hedges
312
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
2.7
0
3.0
3.4
8.8
17.8
20.4
€m
€m
2017
(restated)¹
2018
STOXX (index business)
Data
35.8
GSF (collateral management)
Clearstream (post-trading)
Xetra (cash equities)
360T (foreign exchange)
EEX (commodities)
Eurex (financial derivatives)
Expansion investments
Payment to acquire intangible assets and property, plant and equipment
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:
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.
Further information
Notes | Other disclosures
Financial statements
IFS (investment fund services)
Investments¹)
-2,666.6
୮
Balances on nostro accounts and other bank
deposits
Money market lendings - other counterparties
Uncollateralised cash investments
Money market lendings - central banks
Collateralised cash investments
Reverse repurchase agreements
Carrying amounts -
maximum risk exposure
Credit risk of financial instruments (part 1)
Deutsche Börse Group is exposed to credit risk arising from the following items:
Credit risk
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
319
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.
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.
Deutsche Börse Group presents the qualitative disclosures required by IFRS 7 in detail in the combined
management report (see explanations in the risk report). These include the nature and extent of risks
arising from financial instruments, as well as the objectives, strategies and methods used to manage risk.
25. Financial risk management
Securities
Fund assets
Collateral
Segment
6,616.73)4)
411.0
7,081.4
4,843.5
610.0
5,465.2
6,975.9
6,516.2
410.0
Group¹)
13.4
(post-trading)
Clearstream
11.8
5) Non-financial non-current assets of Nodal Exchange group are disclosed within the "America" region; prior-year figures have been restated.
53.72)
49.7
Eurex (financial
derivatives)¹)
(restated)
€m
31 Dec 2017
Amount at
Amount at
31 Dec 2018
€m
Amount at
Amount at 31 Dec 2017
(restated)
€m
€m
Note 31 Dec 2018
11.7
4,870.23)4)
611.3
5,493.3
4) These include intangible assets, property, plant and equipment, and investments in associates and joint ventures.
2) Excluding goodwill
4.7
2.9
0.9
0.1
145.4
145.6
Asia-Pacific
157
184
122.9
213.2
0.1
1.5
169.4
198.3
America
1,063
1,154
485.1
201
196
Total of all regions
2,941.3
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).
5,640
5,964
4,243.1
4,365.0
149.2
160.0
-43.2
2,643.6
2,893.9
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).
Group
net revenue
Consolidation of internal
5,640
5,964
4,243.1
4,365.0
149.2
160.0
2,686.8
-47.4
Eurex (financial
derivatives)¹
24,395.5
597.98)
413.28)
(GSF)
Clearstream
Automated Securities Fails Financing"
n.a.
n.a.
754.7
6)
6)
2,253.3
13.4
Clearstream
(post-trading)
Loans for settling securities transactions
Technical overdraft facilities
0
0
39,062.1
41,016.0
0
448.4
658.9
ASLplus securities lending"
Clearstream
(GSF)
(as at 31 Dec)
320
8) Meets the IFRS 9 criteria for a financial guarantee contract
7) Off-balance-sheet items
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.
5) The amount includes collateral totalling €5.1 million (2017: €5.0 million).
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
3) Thereof €162.7 million pledged to central banks (2017: nil)
2) Thereof none pledged to central banks (2017: nil)
0
1) Presented in the items "restricted bank balances" and "other cash and bank balances"
50,223.5
98,001.8
93,216.7
Total
52,603.0
53,261.9
42,693.7
43,142.1
52,121.9
53,474.5
45,224.8
42,558.3
58,755.2
15.1
14.6
13.9
1,291.2
2,252.5
Group¹)
(post-trading)
Clearstream
о
0
388.3
556.7
0
(post-trading)
0
C
5,471.6
5,974.7
(post-trading)
Clearstream
0
0
27,111.1
Clearstream
512.7
0
2,952.8
Group
0
0
5.05)
5.15)
13.4
Group
9.5
9.4
6,197.5
13.4
Eurex (financial
0
1,817.5
1,610.0
13.4
(post-trading)
Clearstream
0
0
derivatives)
3.6
Executive and Supervisory Boards
Management report
1,019.5
752
5.8
16.2
39.3
26.5
-12.4
-19.5
IFS (investment fund services)
1,741
1,767
60.2
57.8
336.7
325.2
-36.4
-50.0
Clearstream (post-trading)
497
488
675
GSF (collateral management)
-11.5
-4.8
90.8
64.9
-3.8
-21.8
Data
172
197
1.6
3.4
6.7
75.0
-4.9
-5.7
STOXX (index business)
230
242
5.3
3.6
38.1
22.7
84.9
9.9
8.8
104.2
609.7
511.0
-53.3
-48.4
Eurex (financial derivatives)
€m
2017
2018
2017
2018
€m
€m
€m
€m
€m
2017
2018
2017
3.7
2018
34.8
28.8
1,265
1,223
-9.1
-11.3
Xetra (cash equities)
231
253
3.3
4.3
6.0
13.1
106.0
-14.0
360T (foreign exchange)
628
725
14.2
21.2
67.0
80.7
-21.2
EEX (commodities)
-15.8
23.3
-26.5
243
Investments²)
Sales revenue¹)
Non-financial
Information on geographical regions
Further information
Notes | Other disclosures
Financial statements
Executive and Supervisory Boards
Management report
Deutsche Börse Group | Annual report 2018
318
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.
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.
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.
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.
In the year under review, there was an extraordinary impairment loss of €0.6 million in strategic
investments (2017: €1.1 million, see ☑ note 8). An additional extraordinary impairment loss totalled
€36.7 million (2017: €1.3 million, see ☑ note 11 and ☑note 12). Of this amount, €7.2 million related
to the Clearstream segment (for Future Market Access and Malmo), €6.1 million to GSF (for One
Sec Lend, 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).
1.2
3.2
0
0.1
non-current assets³) 4)
Number of employees
2017
2018
€m
Rest of Europe
1,120.0
275
4,224
4,425
3,630.4
3,636.2
144.6
154.7
-0.1
1,352.5
Eurozone
€m
2017
20175)
2018
€m
€m
2017
2018
€m
(restated)
€m
1,477.4
1.2
2018
0.1
Breakdown of non-cash valuation allowances and bad debt losses
Non-cash valuation allowances and bad debt losses resulted from the following segments:
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
317
2018
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.
5,964
149.2
160.0
1,368.6
1,233.2
0
Group
-210.5
-159.9
1) Excluding goodwill
2017
5,640
€m
-0.3
0.4
€m
0
0
0.5
1.4
0.5
Data
Total
GSF (collateral management)
STOXX (index business)
IFS (investment fund services)
0.3
Xetra (cash equities)
Eurex (financial derivatives)
0.2
0.1
Clearstream (post-trading)
0
EEX (commodities)
360T (foreign exchange)
0
120 days
360 days
360 days
Insolvent
more than
past due
past due
past due
past due
past due
More than
more than
Total
82.0
%
15.0
3.2
more than
90 days
7.1
12.4
30.5
Expected loss rate
€m
0
5.0
1.0
0
0
0
Trade receivables
more than
60 days
1) The amount includes the default fund totalling €2,938.3 million (2017: €2,990.0 million).
Not
54,982.8
58,992.9
26,231.3
29,752.4
28,751.5
29,240.5
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).
€m
Collateral value
at 31 Dec 2017
at 31 Dec 2018
Collateral value
Total
4.3
Securities and book-entry securities collateral³) 4)
€m
more than
30 days
past due
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).
Deutsche Börse Group | Annual report 2018
Not
Not
Not
Not
as at 31 December 2018
Loss allowances for trade receivables
323
Following that approach, the loss allowance as at 31 December 2018 and as at 1 January 2018 was
calculated as follows:
Trade receivables and contract assets
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
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.
1.3
Loss allowance
Loss allowance
1.5
0.4
0
0
0.1
0
1.7
€m
1.7
2.0
7.5
1.2
9.7
7.7
39.8
10.0
3.7
Deutsche Börse Group | Annual report 2018
Cash collateral (cash deposits) ¹) 2)
Closing loss allowance
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
The development of the loss allowance for debt securities is shown below.
324
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.
Trade receivables are written off when there is no reasonable expectation of recovery (see also ☑ note 3).
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).
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Debt securities
73.8
€m
0
30 days
past due
than
Not more
as at 1 January 2018
Loss allowances for trade receivables
5.7
More than
30 days
past due
1.3
0.8
0
0
0.1
0
€m
3.5
Trade receivables
More than
60 days
past due
More than
120 days
74.0
6.0
1.0
1.0
0
0
More than
90 days
past due
%
Total
Insolvent
past due
past due
360 days
More than
Expected loss rate
Composition of collateral held by central counterparties
403.2
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.
0.4
0.4
0
0
Other assets
Group
23.7
23.7
0
0
Trade receivables
Group
13.4
Debt securities
331.8
0
0
0
0
112.4
1,608.9
13.4
derivatives)
13.4
Eurex (financial
0
144.0
57.7
(post-trading)
Clearstream
Other receivables
0
Group
Other loans
0
Amount at
31 Dec 2017
(restated)
€m
€m
Amount at
31 Dec 2018
Note
Segment
Collateral
Amount at
Carrying amounts -
maximum risk exposure
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Credit risk of financial instruments (part 2)
Group
Amount at
31 Dec 2018
(restated)
0
1.2
2.7
13.9
Group
Convertible notes
31 Dec 2017
Other financial instruments
50,223.5
98,001.8
93,216.7
Balance brought forward
€m
€m
58,755.2
14.4
14.4
0
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.
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.
Cash investments
Further information
Notes | Other disclosures
Financial statements
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.
Management report
Deutsche Börse Group | Annual report 2018
321
10) Collateral value of cash and securities collateral deposited for margins, covering the net value of all margin and default fund requirements
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.
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-
8) Meets the IFRS 9 criteria for a financial guarantee contract
Executive and Supervisory Boards
7) Off-balance-sheet items
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.
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).
Financial instruments of the central counterparties
In 2017 and 2018, no losses from credit transactions occurred in relation to any of the transaction
types described.
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.
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).
Further information
Notes | Other disclosures
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.
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
322
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.
Loans for settling securities transactions
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.
Management 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.
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.
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
central counterparties
Financial instruments held by
0
0
627.9
2,111.4
Derivatives
0
0
0.4
13.4
Group
Other instruments at fair value
0
0
5) The amount includes collateral totalling €5.1 million (2017: €5.0 million).
Total
45,087.39)
3) Thereof €162.7 million pledged to central banks (2017: nil)
2) Thereof none pledged to central banks (2017: nil)
1) Presented in the items "restricted bank balances" and "other cash and bank balances"
113,738.0
109,216.4
143,722.3
47,969.59)
143,302.3
0
5.3
4.7
13.8
54,982.810)
58,992.910)
0
Trade receivables
Cash inflow-derivatives and hedges
Total
working capital¹
€
605.0
605.0
Eurex Clearing AG
settlement
€
1,170.0
1,170.0
CHF
200.0
200.0
Clearstream Banking S.A.
working capital¹)
€
750.0
750.0
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+.
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).
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. 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.
For refinancing purposes, Eurex Clearing AG and the Clearstream subgroup can pledge eligible securities
with their respective central banks.
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$750.0 million)
Deutsche Börse AG
750.0²)
US$
settlement
0.0
500.02)
€
settlement
2,125.0²)
m
m
31 Dec 2017
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.
Other market risks
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.
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.
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.
Further information
Liquidity risk
Notes | Other disclosures
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
327
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$.
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.
Financial statements
The AA rating of Clearstream Banking S.A. was confirmed with a stable outlook by the rating agencies
Fitch and S&P in 2018. For further details on the rating of Deutsche Börse Group, see the ☑“Financial
position" section in the combined management report.
-
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.
Amount as at
Amount as at
31 Dec 2018
Currency
Purpose of credit line
Company
Contractually agreed credit lines
-
The companies of Deutsche Börse Group have the following credit lines, which were not being used as
at the reporting date:
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
328
Further information
Foreign-exchange rate risk
329
Executive and Supervisory Boards
2,283.2
Non-current financial liabilities at fair value
through profit or loss
0
0
0
0
0
0
29,559.2
Cash deposits by market participants
19,024.7
-16.4
0
270.9
203.9
18,566.3
at amortised cost
0
0.2
0
0
0.2
Trade payables
-202.1
0
0
0
0
0
195.0
Current financial liabilities measured
195.0
1,150.0
1,335.3
0
1 year but
not more
than
More than
but not
more than
1 year
Not more
than
3 months
Overnight
€m
3 months
Reconci-
More than
31 Dec 2018
Maturity analysis of financial instruments (part 1)
Further information
Notes Other disclosures
Financial statements
Management report
Contractual maturity
Deutsche Börse Group | Annual report 2018
liation to
carrying
0
0
at amortised cost
Non-current financial liabilities measured
Non-derivative financial liabilities
€m
Over
amount
€m
5 years
5 years
€m
€m
€m
Carrying
amount
€m
Trade receivables
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.
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.
0
Financial guarantee contracts
0
0
20.3
-212.2
-0.2
Total derivatives and hedges
0
0
1,662.7
136.9
1,592.4
Derivatives held for trading
0
0
0
0
0
0
0
0
0
0
Cash flow hedges
0
0
0
0
Fair value hedges
0
0
0
as at 31 Dec 2018 (IFRS 9)
Closing loss allowance
first-time adoption
opening accumulated profit on
Amounts restated through
as at 31 Dec 2017 (IAS 39)
5.2
5.2¹)
0.3
0
€m
€m
€m
Stage 3
Stage 2
Stage 1
0
0
0.5
- 1.2
recognised in profit or loss.
Decrease in the allowance
2.3
1.8
0.5
0
-2.0
recognised in profit or loss
4.0
3.2
0.5
0.3
as at 1 Jan 2018 (IFRS 9)
Opening loss allowance
Increase in the allowance
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.
-1,642.4
-1,592.6
5.8
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.
325
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
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).
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.
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
4.8
Deutsche Börse Group | Annual report 2018
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 ☑“Net assets" section in the combined
management report.
To refinance existing long-term indebtedness, in March 2018 Deutsche Börse AG successfully placed
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.
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 risk
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.
326
0.9
0.1
-0.5
0 -104,265.7
Cash flow hedges
Fair value hedges
0
0
0
-26,256.3 -55,008.6 -13,015.4 -7,347.1 -2,638.3
0
0
0
0
0
Derivatives held for trading
Cash outflow - derivatives and hedges
0
-137.1
104,053.7
7,347.1 2,638.3
-0.2
-0.1
-0.2
1) Loss allowance according to incurred loss model (IAS 39)
29,559.2
Total non-derivative financial
liabilities (gross)
0
48,125.5
270.9
1,335.5 1,150.0 -218.5
51,062.3
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
26,256.3 54,796.6 13,015.4
398.9
settlement
330
0
%
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
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.
Proceedings by the Public Prosecutor's Office in Frankfurt/Main
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.
Administrative offence proceedings of BaFin
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.
Lawsuit against Deutsche Börse AG
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.
Further information
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
334
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.
Notes | Other disclosures
Bank Markazi vs 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.
Criminal investigations against Clearstream Banking S.A.
liation to
Reconci-
1 year but
not more
than
but not
more than
1 year
Not more
than
3 months
Overnight
3 months
More than
More than
Contractual maturity
31 Dec 2017
Maturity analysis of financial instruments (part 2)
Further information
Notes Other disclosures
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.
Financial statements
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
Management report
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
Total
1) The expected payments in US dollars were translated into euros applying the closing rate of 31 December.
31 Dec 2018
31 Dec 2017
€m
€m
1.0
0.7
1.7
2.3
2.7
3.0
336
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Volatility of Deutsche Börse AG shares
-0.44
%
Risk-free interest rate
31 Mar 2022
Term to
1 to 5 years
Tranche 2018
The company uses an adjusted Black-Scholes model (Merton model) to calculate the fair value of the
stock options.
Evaluation of the 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.
Stock Bonus Plan (SBP)
28. Share-based payment
Further information
Valuation parameters for SBP shares
Over
Up to 1 year
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.
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
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).
324.6
433.2
84.0
51.4
177.2
Expected rental income from subleases¹)
304.1
77.7
€m
€m
31 Dec 2017
31 Dec 2018
1) The expected payments in US dollars were translated into euros applying the closing rate of 31 December.
63.4
€m
€m
€m
0
-0.2
0
0
-2.2
-1,667.4
-727.1
1.3
Total derivatives and hedges
-832.2
Derivatives held for trading
0
0
0
0
0
Fair value hedges
0
0
0
Derivatives held for trading
833.4
1,652.2
2.3
0
0
Cash outflow - derivatives and hedges
Cash flow hedges
0
-18.8
-56.4
0
0
0
Financial guarantee contracts
0
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 ☑ note 3). In order to
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.
Other litigation and liability risks
75.8
59.4
6.9
0
27.2
21.6
41.7
37.8
€m
€m
31 Dec 2017
31 Dec 2018
Total
More than 5 years
1 to 5 years
0
0
0
331
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
0
Management report
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
maintenance contracts and other contracts (excluding rental and lease agreements, see ☑ note 27) are
presented in the following:
Breakdown of future financial obligations
Up to 1 year
Financial statements
21.72
0
Fair value hedges
150.1
0
0
0
0
150.1
0
Trade payables
0.8
0
0
0.8
0
0
0
Non-current financial liabilities measured at
fair value through profit or loss
1,688.4
5 years
€m
5 years
€m
carrying
amount
€m
Carrying
amount
€m
Current financial liabilities measured at
amortised cost
Non-derivative financial liabilities
0
0
0
1,339.0
524.4
-175.0
Non-current financial liabilities measured at
amortised cost
0
13,057.1
29,215.3
55.6
0
0
56.2
19.0
0
Cash flow hedges
Cash inflow-derivatives and hedges
0 -84,347.9
-22,159.2 -44,685.7 -12,665.8 -3,771.5 -1,065.7
83,635.8
0
1,065.7
3,771.5
22,159.3 43,973.6 12,665.7
less financial assets and derivatives
held by central counterparties
Derivatives and financial instruments
held by central counterparties
Financial liabilities and derivatives
held by central counterparties
-191.1 45,030.8
0
-16.1
13,976.2
0
0
0
879.6
0
Cash deposits by market participants
Total non-derivative financial
liabilities (gross)
42,272.4 1,029.7
55.6
1,339.8
524.4
29,215.3
Peterson vs Clearstream Banking S.A., Citibank NA et al. ("Peterson I") and
Heiser vs Clearstream Banking S.A.
Tranche 2017
28 Feb 2021
-0.56
18.61
Tranche 2015
Current
provision as at
31 Dec 2018
Non-current
provision as at
31 Dec 2018
Number
€
€
€
€m
€m
€m
2014
7,657
104.95
104.95
Settlement
obligation
102.55 104.95
0.6
0.2
2015
15,229
104.95
104.95
100.21 104.95
1.6
0.8
0.8
2016
70,639
104.95
104.95
0.8
31 Dec 2018
Fair value/
option as at
option as at
31 Dec 2018
Risk-free interest rate
%
31 Dec 2019 to
31 Dec 2023
-0.7 to -0.31
31 Dec 2018 to
31 Dec 2022
-0.75 to -0.44
31 Dec 2018 to
31 Dec 2021
-0.75 to -0.56
31 Dec 2018 to
31 Dec 2020
-0.75 to -0.65
31 Dec 2018 to
31 Dec 2019
-0.75 to -0.7
Volatility of Deutsche Börse AG
shares
%
Dividend yield
%
Exercise price
€
18.5 to 22.47
2.33
0
0 to 22.47
0 to 2.33
Intrinsic value/
Deutsche
Börse AG share
price as at
31 Dec 2018
Balance as at
31 Dec 2018
Tranche
Valuation of LSI and RSU shares
The valuation model does not take into account exercise hurdles. The volatilities applied correspond
to the market volatilities of comparable options with comparable maturities.
97.92 104.95
0
0
0 to 2.33
0 to 19.69
O to 19.69
O to 2.33
O to 2.33
O to 20.52
0
7.2
1.0
6.2
Disposals
Tranche
2016
Disposals
Tranche
2017
Additions Fully settled
Tranche
2018
Balance
cash
options
Options
forfeited
as at
31 Dec 2018
To other
senior
executives
224,652
Total
224,652
- 231
- 231
- 939
- 939
- 2,185
- 2,185
340
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
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.
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.
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.
Co-Performance Investment Plan (CPIP) and Performance Share Plan (PSP)
Disposals
Tranche
2015
265,210
- 43,997
265,210
0
- 43,997
91,872
91,872
- 3,962
- 3,962
0
Term to
Disposals
Tranche
2014
Balance
as at
2017
79,813
104.95
104.95
95.69 104.95
7.9
1.9
6.0
2018
91,872
104.95
104.95
93.50 102.55
9.0
0
9.0
Total
Change in number of LSI and RSU shares allocated
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).
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.
Further information
Notes | Other disclosures
Financial statements
31 Dec 2017
Management report
Deutsche Börse Group | Annual report 2018
339
22.2
4.3
26.5
265,210
Executive and Supervisory Boards
Tranche 2016
29 Feb 2020
Tranche 2014
Tranche 2016
98.77
2015¹
13,674
104.95
104.95
to 110.65
1.3
1.3
0
2016
16,909
104.95
104.95
74.54
€m
1.3
1.3
2017
13,868
104.95
104.95
47.70
0.6
0
0.6
2018²)
12,941
104.95
104.95
22.91
0
€m
€m
31 Dec 2018
-0.65
19.27
31 Mar 2019
-0.75
22.76
Dividend yield
%
2.33
1.56
1.17
0
Exercise price
€
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 SBP shares
Tranche
provision at
Non-current
Current
provision at
31 Dec 2018
obligation
31 Dec 2018
€
€
0.3
31 Dec 2018
option at
Fair value/
Intrinsic value/
option at
Deutsche
Börse AG share
price at
31 Dec 2018
€
Number
Balance at
31 Dec 2018
Settlement
Tranche 2015
0
Total
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.
Tranche 2017
Tranche 2018
Valuation parameters for LSI and RSU shares
The company uses an adjusted Black-Scholes model (Merton model) to calculate the fair value of the
LSI and RSU stock options.
Evaluation of the LSI and the RSU
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.
Disposals
Tranche
2016
Further information
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
338
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).
Notes | Other disclosures
0.3
Balance at Disposals
31 Dec Tranche
2015
Change in number of SBP shares allocated
57,392
3.5
1.3
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.
337
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report
Financial statements
Notes | Other disclosures
Further information
Average price of the exercised and forfeited share options
Tranche
2017
2014
2016
2017
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).
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.
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.
46.74
115.43
72.13
2015
111.23
112.32
109.40
€
€
Average price of the
forfeited share options
Average price of the
exercised share options
101.14
In its 2012 corporate report, Deutsche Börse Group disclosed information about the class action suit
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.
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.
Executive and Supervisory Boards
transactions
business
Total sum of
0
0
0
0
0
0
11.2
shareholdings
-1.5
-1.0
2.9
1.2
-18.5
-19.1
12.6
11.2
Associates
Other
12.6
-19.1
-18.5
Other business relationships with key management personnel
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.
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.
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.
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.
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.
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
344
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.
European Commodity Clearing Luxembourg S. à r.I., 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.I., 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.I. In the financial year 2018, ECC Luxembourg made payments
in the amount of approximately €14.0 thousand for these management services.
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.
Monetary business relationships with key management personnel
-1.5
-1.0
2.9
1.2
€m
€m
€m
€m
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
343
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.
The aggregate remuneration paid to members of the Supervisory Board in financial year 2018 was
€2.2 million (2017: €1.8 million).
Supervisory Board
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.
Termination benefits
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).
Former members of the Executive Board or their surviving dependants
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.
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.
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).
Executive Board
The remuneration of the individual members of the Executive and Supervisory Boards is presented in the
remuneration report.
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.
31. Related party disclosures
Further information
Further information
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.
Business relationships with related parties and key management personnel
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.
€m
2017
2018
2017
2018
2017
2018
€m
€m
€m
2017
2018
31 Dec
31 Dec
31 Dec
31 Dec
୮
Outstanding balances:
liabilities
Outstanding balances:
receivables
Amount of the transactions:
expenses
Amount of the transactions:
revenues
Transactions with related entities
Business relationships with related parties
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.
345
Deutsche Börse Group | Annual report 2018
Basis for the Opinions
Further information | Independent Auditor's Report
Notes
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
348
management report.
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
■ 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.
■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
In our opinion, on the basis of the knowledge obtained in the audit,
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.
Opinions
Report on the Audit of the Consolidated Financial Statements and Combined
Management Report
To Deutsche Börse Aktiengesellschaft, Frankfurt am Main
Independent Auditor's Report
Further information | Independent Auditor's Report
Notes
Financial statements
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.
Management report
Key Audit Matters in the Audit of the Consolidated Financial Statements
Impairment of the goodwill
Deutsche Börse Group | Annual report 2018
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
Further information | Independent Auditor's Report
Notes
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
349
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.
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.
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.
THE FINANCIAL STATEMENT RISK
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.
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.
Notes | Other disclosures
Executive and Supervisory Boards
347
33. Events after the end of the reporting period
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.
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.
5,183
5,397
5,640
5,964
5,567
5,800
2017
2018
Employees (average annual FTEs)
Employed at the reporting date
Average number of employees during the year
Employees
32. Employees
Further information
Notes | Other disclosures
Financial statements
Management report
Executive and Supervisory Boards
There have been no material events after the balance sheet date.
Deutsche Börse Group | Annual report 2018
34. Date of approval for publication
346
Hauke Stars
Gregor Pottmeyer
Naulie Pras
Pott
6.
Thomas Book
Christoph Böhm
Stephan Leithner
Stephen Leithmer
Theodor Weimer
throder weine
Deutsche Börse AG
Frankfurt/Main, 8 March 2019
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.
Responsibility statement by the Executive Board
Further information | Responsibility statement by the Executive Board
Notes
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
Financial statements
OUR OBSERVATIONS
Deutsche Börse Group | Annual report 2018
Settlement
Fair value/
option as at
option as at
31 Dec 2018
Intrinsic value/
Deutsche
Börse AG share
price as at
31 Dec 2018
Balance as at
31 Dec 2018
Tranche
Valuation of CPIP and PSP shares
The valuation model does not take into account exercise hurdles. The volatilities applied correspond to
the market volatilities of comparable options with comparable maturities.
Current
provision as at
185.00
203.00
210.00
200.00
%
Deutsche Börse AG shareholders
202.00;
192.00;
Net profit for the period attributable to
200.00
213.00
Non-current
provision as at
Number
€
67.31
104.95
104.95
131,285
2016
9.6
0
9.6
72.20
104.95
104.95
132,882
2015
€m
€m
€m
31 Dec 2018
31 Dec 2018
obligation
31 Dec 2018
€
€
200.00
200.00
200.00
200.00
-0.56
-0.44
-0.31
%
Risk-free interest rate
Tranche 2015
31 Dec 2019
Tranche 2016
31 Dec 2020
Tranche 2017
31 Dec 2021
31 Dec 2022
Tranche 2018
Tranche 2019
31 Dec 2023
Term to
Valuation parameters for CPIP and PSP shares
The company uses an adjusted Black-Scholes model (Merton model) to calculate the fair value of the
CPIP and PSP stock options.
Evaluation of the CPIP and the PSP
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.
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.
Further information
Notes | Other disclosures
Financial statements
Executive and Supervisory Boards
Management report
-0.65
12.5
-0.70
%
%
Relative total shareholder return
0
0
0
0
0
€
Exercise price
0
0
0
0
0
%
Dividend yield
18.70
18.50
20.52
22.47
0
Volatility of Deutsche Börse AG shares
0
Management report
2017
senior
executives
To other
430,397
0
о
12,506")
96,682
6,996
36,918
93,307
362,677
7,925
Board
Executive
To the
2018
forfeited
options
2019
2018
31 Dec
269,370
0
7,925
4,360
41,278
12.5
combined
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).
30. Corporate governance
The members of the company's executive bodies are listed in the “The Executive Board” and “The
Supervisory Board" chapters of this annual report.
29. Executive bodies
In the reporting period, an expense totalling €4.0 million (2017: €3.6 million) was recognised in staff
expense for the 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.
Group Share Plan (GSP)
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.
1) The stock options of the 2019 tranche were granted as part of severance agreements.
537,061
0
0
12,506
122,322
-9,647
0 106,664
0
25,640
-16,643
cash Options
Tranche
Total
Fully
settled
104.95
104.95
12,506
537,061
Total
2019¹)
342
5.8
0
5.8
21.49
104.95
104.95
122,322
2018
10.9
0
10.9
43.94
104.95
Balance at
138,066
107.42
1.3
104.95
1.3
0
Additions
Additions/
(disposals)
Tranche
2017
Tranche
2016
Additions
Additions
Tranche
2015
2017
Balance at
31 Dec
Change in number of CPIP and PSP shares allocated
Further information
Notes | Other disclosures
Additions
Tranche
Management report
Financial statements
0
40.1
1) The stock options of the 2019 tranche were granted as part of severance agreements.
40.1
341
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
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).
Collateral
Brexit
Capital Markets Union
CMU
Clearstream Funds Centre Ltd.
Swisscanto Funds Centre Ltd.
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.
Clearing
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,
minimising counterparty default risk ( margin and collateral) and
carrying out all steps necessary for final clearing.
CCP
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 pool
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 flows from operating activities
Capital Markets Union
Deutsche Börse Group's IT architecture for clearing exchange-
traded and OTC products (both for derivatives and for the spot
market). C7® is part of the Group's 7 Market Technology® series.
C7
C
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.
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.
A master account used to bundle excess liquidity within affiliated
companies, to the extent permitted by the regulatory and legal
framework.
Commercial paper
Notes
CRD V/CRR II
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.
DB1 Ventures
D
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.
Custody
Central Securities Depository Regulation. The CSDR aims to
harmonise the securities ☑ settlement systems and supervisory
rules for CSDs in Europe.
CSDR
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.
CSD
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.
Procedure for determining the ☑margin requirement for an inte-
grated portfolio. Risk positions in a portfolio (on-exchange and
Cross-margining
Further information | Glossary
Financial statements
Management report
Executive and Supervisory Boards | The Executive Board
Deutsche Börse Group | Annual report 2018
357
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.
CRD VI/CRR III
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.
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.
Blockchain/distributed ledger technology
Germany
Benchmarks Regulation
Unit 01-03, 23rd floor
China World Tower B
Beijing
Mayerhofgasse 1/19
1040 Wien
Austria
Vienna
18600 Praha 8
Czech Republic
Sokolovská 662/136b
Futurama Business Park
Building B
Prague
France
75008 Paris
17, rue de Surène
5, boulevard Montmartre
75002 Paris
France
Paris
Norway
Filipstad Brygge 1
0252 Oslo
Germany
04109 Leipzig
Augustusplatz 9
Leipzig
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.
60322 Frankfurt/Main
1 Jianguomenwai Avenue
Chaoyang District
100004 Peking
P.R. China
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.
Dubai
United Arab Emirates
B
Glossary
Further information | Glossary
Notes
Financial statements
Management report
Executive and Supervisory Boards | The Executive Board
Deutsche Börse Group | Annual report 2018
356
addresses
www.deutsche-boerse.com/
For more information on our
addresses please visit
68 Des Voeux Road, Central
Hong Kong
2904-7, 29/F, Man Yee Build-
ing
Hong Kong
United Arab Emirates
Dubai
P.O. Box: 482036
Level 8, App. 810C
Liberty House
Financial Centre
Conrad Tower Building
Level 10, Unit 1006
Sheikh Zayed Road
P.O. Box: 27250
Dubai
Depreciation, amortisation and impairment losses
Initial public offering. An IPO is when a company first offers its
shares for sale to the general public.
Deutsche Börse Venture NetworkⓇ
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.
Net revenue
The profit generated within a certain period that is attributable
to shareholders; this measure is used to manage the results of
operations.
Net profit for the period attributable to
shareholders of Deutsche Börse AG
The present (discounted) value of future payments. This measure
is used in financial assessments to prioritise and manage projects.
Net present value (NPV)
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 debt/EBITDA ratio
P
N
Further information | Glossary
Notes
Financial statements
Management report
Executive and Supervisory Boards | The Executive Board
Deutsche Börse Group | Annual report 2018
359
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
of CCPs, trading venues and benchmarks as well as provisions
governing the activities of companies from third countries.
MiFIR
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.
MiFID II
Nodal Exchange
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.
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.
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.
Return on equity (ROE)
Grüneburgweg 16-18
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.
Repo
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.
Regulatory Reporting Hub
The name given to the ☑ clearing of transactions that are not
executed on a regulated market.
OTC clearing
Over the counter, off-exchange. Describes transactions between
two or more trading parties that are not executed on a regulated
market.
OTC
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
competitors. Deutsche Börse Group uses operating costs (and
net revenue) to manage its EBITDA.
Operating costs
R
O
Quantitative easing. In March 2015, the European Central Bank
(ECB) launched a programme to purchase sovereign bonds and
other securities. The aim was to further boost market liquidity
and to fend off deflation by increasing the money supply. The ECB
discontinued its QE programme in December 2018.
QE
Q
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®.
Prime Standard
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.
PRIIPS
Payback period
Regular and ad hoc downward adjustments to the carrying amounts
of intangible assets and property, plant and equipment. These
are presented separately from ☑operating costs in order to ensure
transparent reporting of costs and earnings, and to increase
comparability with competitors.
MiFID
Collateral requirements determined by a ☑CCP for all types of
transactions for which it acts as a central counterparty, used
Financial statements
Management report
Executive and Supervisory Boards | The Executive Board
Deutsche Börse Group | Annual report 2018
358
Foreign exchange.
FX
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.
F
Exchange-traded product. ETPs comprise exchange-traded
commodities (ETCs) and exchange-traded notes (ETNs).
ETP
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.
ETF
ESG = environment, social, governance. The composition of
ESG indices reflects these three selection criteria.
ESG criteria
European Market Infrastructure Regulation. EMIR regulates ☑OTC
derivatives, CCPs and trade repositories; it aims to improve
security and integrity on the OTC derivatives market by promoting
transparency and reducing risk. Among other things, it does this
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
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.
EMIR/EMIR review
Earnings before interest, tax, depreciation, amortisation and im-
pairment losses. Deutsche Börse Group's operating profit, consist-
ing of the difference between ☑ net revenue and ☑ operating costs.
EBITDA
E
Platform for bringing together young innovative growth companies
in the pre-IPO sector and international investors.
Notes
to cover risk from open positions in case a participant defaults.
Further information | Glossary
L
Margin
IPO
The exchange of fixed interest rates and floating rates payable
based on identical principal amounts in the same currency.
Interest rate swaps
A performance indicator showing the ratio of EBITDA to interest
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 coverage 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.
Interest-bearing gross debt/EBITDA ratio
International CSD
ICSD
|
M
A subordinated corporate bond with both equity- and debt-like
features, a very long or unlimited maturity and a high coupon.
Hybrid bond
Quotation of a security or issuer on the exchange.
Listing
A market situation in which a security can be bought or sold
rapidly, even in larger quantities, without substantially affecting
its price.
Liquidity
H
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.
GTX ECN
G
Westend Carrée
Deutsche Börse Group worldwide
60316 Frankfurt/Main
Deutsche Börse Group | Annual report 2018
354
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.
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.
■ 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.
■ 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.
■ 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 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.
■ 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.
Executive and Supervisory Boards
■ 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.
Notes
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
353
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.
We exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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.
Further information | Independent Auditor's Report
Management report
Financial statements
Notes
Deutsche Börse Group | Annual report 2018
355
Wirtschaftsprüfer
[German Public Auditor]
Pfeiffer
Wirtschaftsprüfer
[German Public Auditor]
Leitz
[Original German version signed by:]
Wirtschaftsprüfungsgesellschaft
KPMG AG
Frankfurt am Main, 8 March 2019
The German Public Auditor responsible for the engagement is Klaus-Ulrich Pfeiffer.
German Public Auditor Responsible for the Engagement
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.
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.
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).
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.
Further information pursuant to Article 10 of the EU Audit Regulation
Other Legal and Regulatory Requirements
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.
Further information | Independent Auditor's 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.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and
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.
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.
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
351
Deutsche Börse AG occasionally commissions external experts to assess tax matters.
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 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 FINANCIAL STATEMENT RISK
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 valuation of provisions for tax risks
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.
OUR OBSERVATIONS
OUR AUDIT APPROACH
Further information | Independent Auditor's Report
Notes
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
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.
Notes
Executive and Supervisory Boards | The Executive Board
Further information | Independent Auditor's Report
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.
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.
Further information | Independent Auditor's Report
Notes
Financial statements
Management report
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
352
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.
Responsibilities of Management and the Supervisory Board for the Consolidated Financial
Statements and Combined Management Report
▪ otherwise appears to be materially misstated.
■ materially inconsistent with the consolidated financial statements, with the combined management
report or our knowledge obtained in the audit, or
In connection with our audit, our responsibility is to read the other information and, in so doing, to
consider whether the other information is
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.
▪ 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.
■the combined corporate governance statement and
Management is responsible for the other information. The other information comprises:
Other Information
The assumptions for determining the tax provisions are appropriate.
OUR OBSERVATIONS
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 AUDIT APPROACH
Management report
Financial statements
Notes
400 051
Singapore
India
Bandra Kurla Complex
Mumbai
G Block, C-62,
Level 8, Vibgyor Towers
Mumbai
Oslo
Italy
20121 Milano MI
Via Monte di Pietà 21
Asia
Milan
Calle de la Tramontana, 2
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Spain
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New York, NY 10036
USA
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New York
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USA
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233 South Wacker Drive
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Sandweg 94
Entry C
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Germany
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Postal address:
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The Cube
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Building
Tokyo
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Commercial
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Germany
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Transformatorweg 90
Quarter Plaza
Amsterdam
Europe
Further information | Deutsche Börse Group worldwide
11 Westferry Circus
Chicago, IL 60606
USA
1st Floor, Westferry House
Canary Wharf
E14 4HE
233 South Wacker Drive
Willis Tower
Chicago
North America
Theilerstrasse 1A
6300 Zug
Switzerland
Zug
Madrid
42, Avenue JF Kennedy
L-1855 Luxembourg
Luxembourg
The Square
United Kingdom
E14 4HE
London
3rd Floor, Westferry House
Canary Wharf
11 Westferry Circus
United Kingdom
E14 4HE
London
Canary Wharf
2nd Floor, Westferry House
11 Westferry Circus
United Kingdom
London
360
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.
Financial calendar
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.
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
Published by
Deutsche Börse AG
60485 Frankfurt/Main
Volatility index indicating the fluctuations in the DAX® index
expected in the derivatives market (implied volatility).
Germany
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
www.deutsche-boerse.com
We would like to thank all colleagues and service providers
who participated in the compilation of this report for their
friendly support.
VDAX®
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.
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.
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 collateral. Clearstream
migrated to T2S in February 2017. "TARGET" is short for "Trans-
European Automated Real-Time Gross Settlement Express
Transfer System".
S
V
Scale
Securities lending
Transfer of securities by a lender in return for a fee - and usually
also against collateral on condition that the borrower returns
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.
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
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.
Publications service
Volatility
Order numbers
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
sustainability profile. In addition, our ☑overview of key sustainability
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 www.
deutsche-boerse.com > Sustainability > Reporting > Annual report.
29 April 2019
Management report
Publication Q1/2019 results
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
The annual report 2018 is both available in German and English.
8 May 2019
Executive and Supervisory Boards | The Executive Board
363
1000-4833 (German annual report)
Deutsche Börse Group | Annual report 2018
1010-4834 (English annual report)
Contact
Investor Relations
E-mail
Phone
ir@deutsche-boerse.com
Fax
+49 (0) 69-2 11-1 16 70
+49 (0) 69-2 11-1 46 08
Group Sustainability
E-mail
Phone
Fax
group-sustainability@deutsche-boerse.com
+49 (0) 69-2 11-1 42 26
☑www.deutsche-boerse.com/ir_e
362
+49 (0) 69-2 11-61 42 26
www.deutsche-boerse.com/sustainability
www.deutsche-boerse.com/annual_report
The annual report 2018 of Deutsche Börse Group is available as
pdf on the internet:
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.
+49 (0) 69-2 11-1 49 84
+49 (0) 69-2 11-61 49 84
Registered trademarks
Fax
Phone
E-mail
Group Communications & Marketing
corporate.report@deutsche-boerse.com
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.
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
31
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.
Notes
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.
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 ☑“Combined corporate governance statement and corporate governance
report" section.
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).
Further infomation
Management report | Fundamental information about the Group
Organisational structure
Financial statements
Post-Trading,
Further infomation
Leadership structure of Deutsche Börse Group as of 1 February 2019
Group Executive Board
CEO
CFO
T. Weimer
G. Pottmeyer
CIO/COO
C. Böhm
Trading &
Clearing
T. Book
Cash Market,
Pre-IPO & Growth
Financing
H. Stars
Financial statements
Notes
Management report | Fundamental information about the Group
Deutsche Börse Group | Annual report 2018
Deutsche Börse Group | Annual report 2018
Data & Index
40
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.
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.
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.
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.
Further infomation
Notes
Financial statements
Management report | Fundamental information about the Group
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
39
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.
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.
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.
There are no shares with special rights granting the holder supervisory powers.
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.
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.
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.
Further infomation
Notes
Financial statements
Management report | Fundamental information about the Group
Executive and Supervisory Boards
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
S. Leithner
38
Acquisitions/
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.
34
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
ongoing basis in order to establish itself as a long-term role model on the market.
Further infomation
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.
35
55
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.
Deutsche Börse Group | Annual report 2018
to conserveing resources. It enhances its commitment to sustainability and related reporting on an
▪ 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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
Further infomation
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:
■
■
▪ 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.
"
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.
33
Executive and Supervisory Boards
Financial statements
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.
37
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
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.
Further infomation
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 ☑notes 7 and 24 to the consolidated
financial statements.
Further details of product and services development activities can be found in the ☑report on opportuni-
ties and the report on expected developments.
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
Group Strategy/
Mergers &
Research and development activities
Management report | Fundamental information about the Group
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.
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.
Notes
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.
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.
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.
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
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
36
33
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.
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 ☑ report on
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
individual divisions. For a detailed description of all objectives, see the remuneration report. As far as
external growth opportunities are concerned, the focus is on strengthening existing high-growth areas
and exploring new asset classes and services.
Regulatory
Investor
Relations
IFS IT
Energy
Strategy
Business
Analytics &
Strategy
Pre-IPO &
Capital
Markets
Strategy &
Controls
Group
Regulatory
Implementa-
Clearstream
Global Ops.
Group Audit
Treasury
Digital
Workplace
Risk IT
FX/360T
Community
Development
Market Data +
Services
tion
Group Legal
& Partner
Markets
Officer
Chief of Staff
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
Group
Communi-
cations &
Financial
Accounting &
Market
Operations
Controlling
Derivatives
Markets
Trading
Marketing
Cash Market
Operational
Management
Chief
GFF IT
Data IT
Clearing
Compliance
Cash Market
Sales
Development &
Chief Risk
Officer
Corporate
Systems
Office of the
CTO
Clearing IT
32
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Fundamental information about the Group
Financial statements
Notes
Further infomation
Office
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
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.
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
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.
Derivatives &
Cash Trading
Deutsche Börse Group's objectives and strategies
Executive
"
DLT, Crypto
Assets &
New Market
Structure
European
Energy
Exchange
(EEX)
Digitisation/
Platforms
Group
Asset Servicing
Innovation
Organisational
Human
Resources
Clearstream
Products
Global RM,
Sales &
Services
IT
Compensation
Officer
IT
Infrastructure
Group Tax
Settlement IT
External
Findings
Services
Management
16
1,951.8
18
4,844.9
54
3,790.1
%
Intercontinental Exchange
2017
2018
Source: Exchanges listed
Shanghai Futures Exchange
2,474.2
Deutsche Börse Group - Eurex®
Moscow Exchange
m contracts
Change vs
Financial markets infrastructure regulation
1,500.4
Notes
Financial statements
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
45
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
16
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.
Regulation of markets in financial instruments (MiFID II, MiFIR)
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.
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.
Regulatory environment
-12
1,201.9
-5
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.
CME Group
%
Development of contracts traded on selected derivatives markets
2) Trading volume in electronic trading (single-counted)
1) Part of London Stock Exchange Group
Bolsas y Mercados Españoles"
Borsa Italiana¹)
Euronext²)
London Stock Exchange" (£)
Deutsche Börse Group
Source: Exchanges listed
Development of trading activity on selected European cash markets
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.
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.
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).
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).
Further infomation
Regulatory projects and the resulting stricter requirements for capital market participants (see the
"Regulatory environment" section)
■
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.
Change vs
2018
€m
2017
Further infomation
Notes
Financial statements
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
44
- 10
587.5
1
753.2
6
2,067.9
8
1,456.7
17
1,719.6
National Stock Exchange of India
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
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.
benchmarks and
indices
Regulation on
Became effective in 2014;
RTS on settlement discipline
published in May 2018
Draft legislation in the
legislative process
Became effective in 2012;
review in 2018
Application since 3 January
2018
✗
Capital Markets
Union
X
✗
X X X X X
X
XXXXXXX
CSDR
CCPs
resolution plans for
✗
Recovery and
X
✗
✗
■ Continued unstable political conditions in some parts of Eastern Europe and recurring flashpoints in
the Arab world and their impact on the Western world
Basel III
Investment firms
review)
structures (ESAS
supervisory
☑
(X)
(X)
×
(X) (X)
(X)
x x x x x x X X X X
2016; application since
Became effective on 30 June
Review of European
EMIR: implementation and review
MiFID II, MIFIR
Financial market
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.
Capital Markets Union
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).
Further infomation
Notes
Financial statements
Management report | Report on economic position
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.
Executive and Supervisory Boards
46
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.
Regulation on benchmarks and indices
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.
Central Securities Depository Regulation (CSDR)
-
Recovery and resolution regulation for central counterparties
Deutsche Börse Group | Annual report 2018
infrastructure
Brexit
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.
Status as at 31 December
2018
STOXX Data
Eurex EEX 360T Clearing stream IFS GSF
Xetra
Eurex Clear-
Cash
market/
Overview of regulatory initiatives and their impact on Deutsche Börse Group's
business areas
The decision by the United Kingdom to exit the European Union has far-reaching implications for finan-
cial markets and their participants.
Further infomation
Financial statements
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
47
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.
Revision of European supervisory structures (ESAs review)
Notes
Further infomation
Price-earnings ratio³)
Financial statements
104.95
€
Closing price (as at 31 Dec)
74.27
95.30
€
100.25
96.80
121.15
77.54
96.80
€
2.7
2.4
%
53
€
49
Average daily trading volume on trading venue Xetra®
0.6
Market capitalisation (as at 31 Dec)
19.9
20.5
100
100
%
Free float (as at 31 Dec)
m shares
186.6
m
193.0
190.0
m
thereof outstanding (as at 31 Dec)
Number of shares (as at 31 Dec)
0.5
183.3
€bn
%
2.702)
Management report | Deutsche Börse AG shares
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
41
■ 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).
■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 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.
Financial statements
■ 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.
Further infomation
Notes
Financial statements
Management report | Fundamental information about the Group
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
✗
The following material agreements of the company are subject to a change of control following a
takeover bid:
2.45
Notes
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.
€
4.59
5.42
€
Low5)
High5)
Opening price (as at 1 Jan) 4)
Further infomation
Dividend yield³)
Dividend per share
Earnings per share (basic)")
2017
2018
Deutsche Börse AG shares: key figures
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)
(see the "Share price development of Deutsche Börse AG and benchmark indices in 2018" chart).
Deutsche Börse AG shares
Dividend distribution ratio¹)
19.2
18.1
Average annual return since IPO in 2001
Sep
Aug
July
June
May
Apr
Mar
Oct
Feb
0
70
80
90
90
100
110
Jan
120
Nov
Daily closing price of Deutsche Börse AG shares
DAX®
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
43
trade tariffs imposed on commodity and goods imports by the respective parties, fuelling concerns over
a global trade war.
■ The trade dispute between the US and the EU, China, and other major trading partners, as well as the
■ 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.
Dec
■ 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 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 robust global economic situation, with output growth in the economies relevant to Deutsche Börse
Group (Central Europe, USA) during the year under review.
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:
Macroeconomic and sector-specific environment
Report on economic position
Dow Jones Global Exchanges
STOXX® Europe 600 Financials
■ 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.
130
Indexed to 29 December 2017
Share price development of Deutsche Börse AG and benchmark indices in 2018
Number of shareholders
93
94
%
Institutional investors
18/26/34/22
20/26/33/21
ca. 52,000
%
73.7
71.1
%
Attendance of share capital at the Annual General Meeting
15.0
13.8
%
Share of investors from Germany/UK/USA/other countries
%
37/47/16
ca. 50,000
43/52/5
Further infomation
Notes
Financial statements
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
42
5) Intraday price
4) Closing price on preceding trading day
3) Based on the volume-weighted average of the daily closing prices
2) For financial year 2018, proposal to the Annual General Meeting 2019
1) Adjusted for exceptional effects
Average target price set by analysts at year-end
Analyst recommendations buy/hold/sell (as at 31 Dec)
98.00
119.75
€
Notes
X
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.
✗
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 liquidity requirements
■ Introduction of a binding leverage ratio of 3 per cent
■ 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.
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
✗
■ Introduction of a net stable funding ratio (NSFR)
■ Introduction of international rules to contain risk concentration (large exposure rules)
Transparency of securities financing transactions
■ Revised market risk framework
■Introduction of a leverage ratio
1 January 2018
New action plans in 2018;
implementation by 2019
Draft legislation in the
legislative process
X
X
CRD VI, CRR III
IFD/IFR
X
X
X
X X XX
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
CRD V, CRR II
(X) = indirect effects of ESAs review
Draft legislation in the
legislative process
■Stricter definition of the term "capital"
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:
Rules for banks and investment firms
Further infomation
Notes
Basel III
Management report | Report on economic position
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.
Financial statements
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
■ Increased capital levels
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
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
Further infomation
Adjusted
2018
€m
2017
Change
2018
2017
Change
€m
Reported
2,462.3
€m
€m
%
Net revenue
2,779.7
13
2,770.4
2,462.3
13
Operating costs
Notes
1,340.2
%
Financial statements
Financial statements
Executive and Supervisory Boards
1,131.6
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
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
Management report | Report on economic position
18
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.
1,039.5
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).
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.
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
59
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)
Q1
Q2
Q3
63
Q4
2018
2017
2018
2017
2018
2017
2018
2017
The effective Group tax rate 2018 was 26.3 per cent; adjusted, it was 27.0 per cent, as expected.
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.
18
4.59
5
EBITDA
1,443.7
1,528.5
-6
1,678.6
1,431.1
17
Depreciation, amortisation and impairment losses
210.5
159.9
32
1,096.0
189.9
21
Net profit for the period attributable to Deutsche
Börse AG shareholders
824.3
874.3
-6
1,002.7
857.1
Earnings per share (basic) in €
4.46
4.68
-5
5.42
157.3
Further infomation
137.6
Financial statements
Segment key figures (adjusted)
Net revenue
Operating costs
EBITDA
2018
2017
2018
2017
2018
2017
€m
€m
€m
€m
€m
€m
Eurex (financial derivatives)
936.1
795.5
304.9
295.7
630.8
503.9
EEX (commodities)
256.6
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.
212.2
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.
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.
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,
5
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.
Results of operations
141.2
121.0
115.2
83.1
81.6
39.5
36.0
43.1
45.6
STOXX (index business)
144.5
127.7
44.5
42.2
100.0
85.5
Data
170.4
154.2
53.0
53.6
117.2
100.6
52
52
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
GSF (collateral management)
55.7
67.5
81.9
91.2
360T (foreign exchange)
78.8
66.5
45.7
36.6
33.1
29.9
Xetra (cash equities)
228.6
218.3
102.7
Notes
102.9
120.6
Clearstream (post-trading)
718.0
667.7
277.7
269.6
440.1
398.1
IFS (investment fund services)
154.3
€m
86.8
131.6
€m
17
€m
m contracts
%
Derivatives¹)
Equity index derivatives
1,951.8
1,675.9
16
949.8
818.6
16
Interest rate derivatives
Equity derivatives
Financial derivatives: OTC clearing volumes
Notional outstanding
Notional cleared
628.5
582.1
8
372.1
275.0
35
€bn
€bn
%
7,913.9
m contracts
Financial derivatives: trading volumes on Eurex Exchange
25
503.9
OTC clearing (incl. net interest income on margins for OTC interest rate swaps)
Margin fees
25.6
10.8
137
50.0
35.9
39
Other (incl. connectivity, member fees and net interest income on margins
for exchange-traded products)
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
1,930.8
PERFORMANCE INDICATORS
115.6
3
376.3
326.4
15
304.9
295.7
3
559.4
663.0
-16
630.8
118.6
20
310
1,339.7
Other¹)
44.4
50.0
Margin fees
796.5
25.6
OTC-Clearing²)
43.8
42.7
Equity derivatives
35.7
10.8
36.4
231.9
Interest rate derivatives
208.1
466.2
Equity index derivatives
389.7
2017
2018
1) Including connectivity and member fees
2) Including net interest income on margins for OTC interest rate swaps
60
60
936.1
€ million
(financial derivatives) segment
Net revenue in the Eurex
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
€m
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.
14,747.9
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.
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
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.
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.
36.4
Management report | Report on economic position
Equity derivatives
338.3
Depreciation, amortisation and
impairment losses
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
Earnings per share (basic) in €
1.45
1.24
1.42
1.25
1.30
198.1
1.06
419.9
333.1
395.1
379.5
43.8
€m
€m
€m
€m
Net revenue
691.6
623.4
687.0
623.6
651.4
576.3
230.5
1.25
740.4
Operating costs
254.5
245.1
262.9
245.4
260.1
247.4
318.5
301.6
EBITDA
438.1
425.5
639.0
194.0
380.2
Comparison of results of operations with the forecast for 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
2018
2017
Change
FINANCIAL KEY FIGURES
€m
Deutsche Börse Group | Annual report 2018
%
936.1
796.5
18
Equity index derivatives
466.2
389.7
20
Interest rate derivatives
231.9
208.1
1.04
11
Net revenue
57
€m
244.2
For the year 2018, Deutsche Börse Group had expected an increase in structural net revenue of at least
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.
40
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
99
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
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.
Financial statements
Comparison of management indicators with the forecast for 2018
€m
Exceptional effects impacting operating costs
17
230.0
%
+ >10
Plan 2018 Actual 2018
+ >5
-6
%
Net revenue from structural growth opportunities (excluding exceptional effects)
Net profit for the period attributable to Deutsche Börse AG shareholders (excluding
exceptional effects)
1) Including connectivity and account maintenance
382.8
2018
2017
Custody
385.1
79.5
Settlement
76.0
106.3
Net interest income from
banking business
155.5
68
28.7
99
FINANCIAL KEY FIGURES
Executive and Supervisory Boards
%
Net revenue
Third-party services
€m
€m
Change
Deutsche Börse Group | Annual report 2018
2017
IFS (investment fund services) segment: key indicators
IFS (investment fund services) segment
Further infomation
Notes
Financial statements
Management report | Report on economic position
2018
32.1
44.65
Other¹)
Settlement transactions ICSD (m)
154.3
Cash balances (daily average) (bn)
%
11,302.7
48.39
13.1
11,245.9
1
8
13.6
-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
67
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
80.9
667.7
727.3
€ million
Net revenue in the Clearstream
(post-trading) segment
increase in adjusted EBITDA.
68.1
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
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.
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.
Further infomation
Notes
Financial statements
Management report | Report on economic position
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.
137.6
31.1
Custody
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
69
69
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
137.6
Assets under custody ICSD and CSD (average) (€bn)
70
70
1) Including connectivity, order routing and reporting fees
2018
2017
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.
Custody
65.9
45.2
Settlement
49.4
Other¹)
39.0
61.3
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.
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.
8
26
85.7
108.3
Operating costs
25
31.1
Operating costs (adjusted)
39.0
9
45.2
Settlement
8
61.3
65.9
Other (incl. connectivity, order routing and reporting fees)
12
86.8
6
7
2,218.7
22.7
2,384.9
24.5
%
Assets under custody (average) (€bn)
Settlement transactions (m)
PERFORMANCE INDICATORS
81.9
21
67.5
EBITDA (adjusted)
-11
51.7
46.0
EBITDA
55.7
PERFORMANCE INDICATORS
49.4
398.1
Change
€m
€m
%
78.8
66.5
18
66.7
56.5
2017
18
10.0
21
49.9
46.5
7
45.7
36.6
25
28.9
12.1
2018
1) Including GTX trading volumes since July 2018
Average daily vol
1) Including connectivity, member fees and admission allowance
62
29
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
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
20.0
45
33.1
29.9
78.8
12.1
Other¹)
66.5
10.0
66.7
Trading
56.5
2017
2018
1) Including connectivity and member fees
49
64
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Further infomation
Xetra (cash equities) segment
Xetra (cash equities) segment: key indicators
2018
€ million
2018
(foreign exchange) segment
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.
11
€bn
€bn
%
69.2
1)
61.0
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.
63
80
Deutsche Börse Group | Annual report 2018
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.
Net revenue in the 360T
2017
2017
67.1
82.1
59.9
37
Gas
36.6
30.8
19
Other (incl. connectivity, member fees and admission allowance)
70.8
Power derivatives
59.0
Operating costs
149.2
124.0
20
Operating costs (adjusted)
141.2
121.0
17
EBITDA
20
7
62.5
67.1
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
2018
2017
Change
FINANCIAL KEY FIGURES
€m
Change
€m
%
Net revenue
256.6
212.2
21
Power spot
107.2
88.2
22
EBITDA (adjusted)
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
Other¹)
59.0
36.6
Gas
30.8
82.1
Power derivatives
59.9
62.5
Management report | Report on economic position
Power spot
Executive and Supervisory Boards
61
115.2
91.2
26
PERFORMANCE INDICATORS
Commodities: trading volumes on EEX
Power spot
Power derivatives
Gas
1) Including trading volumes at Nodal Exchange since May 2017
TWh
576.6
4,385.5
1,962.9
TWh
%
543.3
6
3,217.3")
36
1,981.6
-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
Deutsche Börse Group | Annual report 2018
11
Notes
1,320.9
102.7
102.9
0
EBITDA
115.5
115.1
0
EBITDA (adjusted)
Operating costs (adjusted)
131.6
9
PERFORMANCE INDICATORS
€bn
€bn
%
Trading volume (single-counted order book turnover at the trading venues Xetra®,
Börse Frankfurt and Tradegate)
1,719.6
1,467.6
120.6
17
10
118.8
%
Net revenue
228.7
218.3
5
Trading and clearing
170.6
161.1
108.4
6
17.8
15.4
16
Other (incl. connectivity and member fees)
40.3
41.8
-4
Operating costs
Listing
Equities
ETF/ETC/ETN
1,552.7
166.9
Clearstream (post-trading) segment
218.3
40.3
Other¹)
41.8
17.8
Listing
15.4
170.6
228.7
161.1
2017
2018
1) Including connectivity and member fees
99
66
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Trading and clearing
€ million
Net revenue in the Xetra (cash equities) segment
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.
18
146.7
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.
65
59
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
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.
€m
€m
FINANCIAL KEY FIGURES
Clearstream (post-trading) segment: key indicators
28.7
12
Other (incl. connectivity, account maintenance)
80.9
68.1
19
Operating costs
351.9
294.6
32.1
19
277.7
269.6
3
EBITDA
375.2
373.1
1
Financial statements
440.1
Operating costs (adjusted)
Third-party services
EBITDA (adjusted)
106.3
46
2018
2017
FINANCIAL KEY FIGURES
€m
€m
Change
%
Net revenue
Custody
727.3
Notes
9
667.7
-4
79.5
76.0
Net interest income from banking business
-1
385.1
382.8
Settlement
155.5
69.4
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
127.7
144.5
27.1
59.1
31.3
Exchange licences
Further infomation
41.5
43.8
ETF licences
2017
2018
Other licences¹)
Notes
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.
Management report | Report on economic position
PERFORMANCE INDICATORS
€bn
€bn
%
Assets under management in ETFs on STOXX® indices (average for the period)
Assets under management in ETFs on DAX® indices (average for the period)
Index derivatives (traded contracts) (m)
81.9
76.8
7
Financial statements
27.7
875.4
763.6
15
1) Including licences on structured products
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.
72
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
28.7
-2
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
AA
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
9
1,253.3
F1+
≥ 1,100
Tangible equity of Clearstream Banking S.A. (as at the reporting date)
1) Including licences on structured products
25.1
≥ 14
Interest coverage ratio
69
> 50
%
€m
AA
A-1+
AA
Management report | Report on economic position
Financial statements
Notes
Further infomation
Dividends and share buy-backs
79
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 ☑“Results of operations" section
(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.
-
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
Free funds from operations (FFO) / net debt
1.1
≤ 1.75
Net debt/ EBITDA
■ Interest coverage ratio (calculation changes by S&P): at least 14
■ Free funds from operations (FFO) to net debt: equal to or greater than 50 per cent
■ Net debt to EBITDA ratio: no more than 1.75
Further infomation
Notes
Financial statements
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
78
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:
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.
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.
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.
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.
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
3) EBITDA / interest expense from financing activities (includes 50 per cent of the interest on the hybrid bond)
2) Refinancing of the bond maturing on 26 March 2018
32.7
Tangible equity (for Clearstream Banking S.A.): total of at least €1.1 billion
1,431.1
When calculating these key performance indicators, Deutsche Börse Group will closely follow the
method used by S&P.
■ In order to determine FFO, interest and tax expenses are deducted from EBITDA, applying the
2018
Target figures
Relevant key performance indicators according to the adjusted calculation method
1,337.0
1,253.3
1.2
40.8
≥ 16
≥ 700
≥ 400
€m
€m
Tangible equity of Clearstream International S.A. (as at the reporting date)
Tangible equity of Clearstream Banking S.A. (as at the reporting date)
Interest coverage ratio
≤1.5
Gross debt/ EBITDA
2018
Target figures
Relevant key performance indicators according to the conventional calculation method
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.
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 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.
respective imputed adjustments for operating leases and unfunded pension obligations. FFO in 2018
amounted to €1,091 million.
■ 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.
73
Overall, the segment boosted net revenue by 11 per cent in 2018, with adjusted EBITDA up by
17 per cent.
Executive and Supervisory Boards
44.5
42.2
5
EBITDA
EBITDA (adjusted)
90.6
79.9
13
100.0
85.5
41.2
1) With maturity on 26 March 2018 and fully repaid
Interest coverage 3)
Total interest expense (incl. 50% of the hybrid coupon)
Other interest expense
EBITDA (adjusted)
4.4
13
47.7
53.9
17
%
Net revenue
ETF licences
144.5
127.7
13
43.8
41.5
2.1
6
31.3
27.1
15
Other licences¹)
Operating costs
Operating costs (adjusted)
69.4
59.1
Exchange licences
1,678.6
40.8
16.5
16.5
Interest expense from financing activities
Deutsche Börse Group's interest coverage ratio
Further infomation
Notes
Financial statements
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
Issue volume
77
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 company's clients generally expect it to maintain conservative interest coverage and leverage ratios
and, thereby, achieve a good credit rating.
Capital management
Luxembourg/
Frankfurt
Luxembourg/
Frankfurt
February 2021/ 2.75% (until
February 2041 call date)
Call date
5.5 years/
final maturity in
25.5 years
DE000A161W62
€600 m
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.
€m
2018
€m
€600 m
Fixed-rate bearer bond (hybrid bond)
5.6
€600 m
Fixed-rate bearer bond (term until March 2028)²)
8.7
8.7
€500 m
2017
Fixed-rate bearer bond (term until October 2025)
14.8
€600 m
Fixed-rate bearer bond (term until October 2022)
7.6
1.7
€600 m
Fixed-rate bearer bond (term until March 2018)"
€m
14.8
Fixed-rate bearer bond
(hybrid bond)
€m
Change
43.3
42.4
2
Securities lending
Operating costs
Operating costs (adjusted)
EBITDA
EBITDA (adjusted)
39.8
39.2
2
48.4
38.7
25
39.5
36.0
10
2
81.6
83.1
%
17
43.7
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
34.2
GSF (collateral management) segment
2018
2017
Change
FINANCIAL KEY FIGURES
Net revenue
Repo
€m
€m
GSF segment (collateral management): key indicators
42.9
-20
43.1
39.2
42.4
43.3 Repo
2017
2018
71
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
39.8 Securities lending
Management report | Report on economic position
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
2018
2017
Financial statements
FINANCIAL KEY FIGURES
81.6
€ million
45.6
-5
PERFORMANCE INDICATORS
Average outstandings from securities lending
Average outstandings from repo
€bn
€bn
%
83.1
53.8
-10
377.6
399.8
-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
60.0
Deutsche Börse Group | Annual report 2018
1.125%
10 years
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.
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.
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.
-14
%
438.2
thousand
thousand
337.8
PERFORMANCE INDICATORS
Subscriptions
17
100.6
117.2
EBITDA (adjusted)
-8
94.6
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).
86.7
74
Executive and Supervisory Boards
113.6
10.7
Regulatory services
17.8
34.7
Other¹)
38.9
154.2
March 2028
€ million
Net revenue in the Data segment
Further infomation
Notes
Financial statements
Management report | Report on economic position
Deutsche Börse Group | Annual report 2018
EBITDA
-1
53.6
170.3
%
€m
€m
Net revenue
FINANCIAL KEY FIGURES
Change
2017
2018
Data segment: key indicators
Data segment
Further infomation
Notes
Financial statements
Management report | Report on economic position
154.2
10
Cash and derivatives
113.6
53.0
Operating costs (adjusted)
40
59.6
83.5
Operating costs
12
108.8
34.7
Other (incl. CEFⓇ data services)
66
10.7
17.8
Regulatory services
4
108.8
38.9
Cash and derivatives data
170.3
2018
1,297.6
Fixed-rate bearer bond
€600 m
DE000A1RE1W1
Term
10 years
Maturity
October 2022
2017
Coupon p.a.
2.375%
Listing
Luxembourg/
Frankfurt
Fixed-rate bearer bond
€500 m
DE000A1684V3
10 years
October 2025
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).
Туре
Debt instruments issued by Deutsche Börse AG (outstanding as at 31 December 2018)
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 note
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.
Liquidity management
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).
Operating leases
For further details regarding the cash flow, please refer to the ☑ consolidated cash flow statement as well
as note 22 to the consolidated financial statements.
1.625%
Further infomation
Financial statements
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
16
76
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.
Notes
Issue volume
Luxembourg/
Frankfurt
€600 m
2017
2018
Consolidated cash flow statement (condensed)
Cash flow
Financial position
Further infomation
Notes
Financial statements
Management report | Report on economic position
Executive and Supervisory Boards
Deutsche Börse Group | Annual report 2018
75
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 ☑“Results of operations" section, the
return on equity amounted to 20.8 per cent (2017: 18.4 per cent).
Development of profitability
1) Including CEF® data services
€m
€m
Cash flows from operating activities (excluding CCP positions)
1,176.5
DE000A2LQJ75
1,322.3
580.2
1,839.0
Cash and cash equivalents as at 31 December
Cash and other bank balances as at 31 December
-501.0
-832.9
Fixed-rate bearer bond
Cash flows from financing activities
792.0
Cash flows from investing activities
1,056.2
1,298.2
Cash flows from operating activities
1,107.2
181.9
ISIN
Deutsche Börse Group | Annual report 2018
157
90
Executive and Supervisory Boards
74
59
32
25
50
49
35
21
Total
372
285
96
44
218
91
41
90
Management report | Report on economic position
thereof financial instruments held by central counterparties
thereof cash deposits by market participants
Notes
■SDG 4 "Quality education"
"
SDG 5 "Gender equality"
■ SDG 8 "Decent work and economic growth"
■ SDG 10 "Reduce inequalities"
Economic participation and
education
■ 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"
■ Good governance
■ SDG 8 "Decent work and economic growth"
1) HGB Handelsgesetzbuch (German Commercial Code)
■ SDG 10 "Reduce inequalities"
■ Energy and energy-related markets
■ Customer satisfaction
■ 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
■ Sustainable index products
■ Code of conduct for suppliers
■ SDG 8 "Decent work and economic growth"
■ SDG 16 "Peace, justice and strong institutions"
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
Czech Republic
■ SDG 10 "Reduce inequalities"
Luxembourg
Employees by country/region
■ 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"
88
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 table entitled “Key data on Deutsche Börse Group's
workforce as at 31 December 2018".
Germany
Respect for human rights p. 108
Transparent, stable and
fair markets
•
98
86
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
with respect to employee matters (see the ☑“Employees" section), compliance (including combating
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 ☑ code of business conduct. Indi-
cators for its environmental sustainability performance are available on its website: ☑ www.deutsche-
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).
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 ☑ section entitled “Management approach for a Group-wide
commitment to sustainability".
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Combined non-financial statement
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.
Financial statements
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 sections entitled "Social matters - systems availability" and "Combined corporate governance
statement and corporate governance report – target figures for the proportion of female executives
beneath the Executive Board".
Combined non-financial statement
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
95
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.
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.
Notes
Further infomation
Overview: key sustainability aspects
"
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
■ Environmental management
Human capital development
■ Human and employee rights
■ Staff development
Employee matters p. 89
or services: "Product matters" section
■ Environmental aspects of products
Relevant contents of the non-financial statement
according to section 289c HGB¹)
Business model p. 28
■ Overview of Deutsche Börse Group
■ Objectives and strategies
■Internal management
■ Research and development activities
Areas for action relevant to
Deutsche Börse Group
■ Economic performance
Stakeholder engagement
■ Brand management
Male
UN Sustainable Development Goals (SDGs)
covered by Deutsche Börse Group
■ 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"
Mandatory aspects
Environmental matters
■ Ecological awareness: ☑ code of business
conduct (principle no. 14).
■ SDG 7 "Affordable and clean energy"
Female
2,689
1,661
Joiners
Leavers
Under
30-39
40-49
30 years
50 years
and older
Under
30 years
30-39
40-49
50 years
and older
Deutsche Börse AG
All locations
55
46
15
Joiners and leavers by age in 2018
4
507
309
52
36
88
17
16
33
Other locations
120
70
190
95
59
154
All locations
494
303
797
198
9
23
23
71
19
1
44
62
10
1
Ireland
69
12
4
3
16
13
3
1
Other locations
86
Czech Republic
5
16
14
Deutsche Börse Group
Germany
104
102
29
11
27
Ireland
59
13
Luxembourg
39
41
12
4
20
35
28
1,814.5
117
72
103
5,964
3,609
2,355
31 Dec 2018
1,265
725
253
488
1,767
752
242
197
275
5,964
89
Deutsche Börse Group | Annual report 2018
98
Executive and Supervisory Boards
201
135
1,028
1,077
648
429
890
563
327
404
176
228
208
134
74
312
194
118
184
49
Management report | Combined non-financial statement
Financial statements
Notes
156
90
246
81
46
127
Luxembourg
56
40
96
44
32
76
Czech Republic
110
67
177
Germany
Deutsche Börse Group
69
22
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
Leavers
Male
Female
Total
45
Male
Total
Joiners and leavers by gender in 2018
Deutsche Börse AG
All locations
66
54
120
47
Female
1,497.2
€bn
11,302.7
Value added: €2,028.3 million
2%
External creditors
19%
External costs
17%
Retained earnings
15%
Taxes
74%
25%
Value added
Shareholders
(dividends)
41%
Employees
83
Distribution of value added
Deutsche Börse Group | Annual report 2018
amortisation
7%
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).
32
82
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
Company performance: €2,755.0 million
Depreciation and
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
2017
2018
Consolidated income statement
Net revenue
€m
thereof net interest income from banking business
€m
2,047.8
37.6
2,220.3¹)
50.6
2,388.7
84.0
2,462.3
132.6
2,779.7
204.5
Operating costs (excluding depreciation,
amortisation and impairment losses)
€m
-990.0
2016
2015
2014
Deutsche Börse Group: five-year overview
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
-
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.
and the financial year 2018
The Group's net assets, financial position and results of operations can be considered to be in an
orderly state.
84
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
Further infomation
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.
-1,164.2¹
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.
Further infomation
952.7
911.2
thereof financial assets
11,168.6
6,535.4
thereof financial assets measured at amortised cost
1,057.1
thereof financial assets available-for-sale (AFS)
1,692.0
thereof financial instruments held by central counterparties
9,985.4
4,837.2
Current assets
146,257.1
124,257.7
thereof financial instruments held by central counterparties
94,280.3
thereof other intangible assets
79,510.7
2,770.9
4,091.0
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)
31 Dec 2018
31 Dec 2017
€m
€m
ASSETS
Non-current assets
thereof intangible assets
thereof goodwill
15,642.0
10,883.7
4,191.6
2,865.6
thereof restricted bank balances
29,833.6
29,392.0
thereof current liabilities
144,107.0
123,158.2
thereof financial liabilities measured at amortised cost
19,219.7
14,126.3
94,068.3
78,798.6
29,559.2
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
Deutsche Börse Group | Annual report 2018
Executive and Supervisory Boards
Management report | Report on economic position
Financial statements
Notes
226.8
194.5
thereof deferred tax liabilities
1,688.4
thereof other cash and bank balances
1,322.3
1,297.6
EQUITY AND LIABILITIES
Equity
4,963.4
4,959.4
Liabilities
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.
156,935.7
thereof non-current liabilities
12,828.7
7,023.8
thereof financial instruments held by central counterparties
9,985.4
4,837.2
thereof financial liabilities measured at amortised cost
2,283.2
130,182.0
Financial statements
-1,186.4
-1,340.2
Gross debt
EBITDA
1.54)
1.94)
1.5
1.4
1.2
Interest coverage ratio
%
26.04)
23.2¹)
25.3
32.7
40.8
Deutsche Börse AG: S&P Global Ratings
Rating
AA
104.95
21.5
AA
17.2
14.7
%
21
204)
194)
184)
214)
Deutsche Börse shares
Year-end closing price
Average market capitalisation
Rating key figures
€
59.22
81.39
77.54
96.80
€bn
10.8
14.0
AA
AA
AA
Assets under custody (annual average)
€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
€bn
10,717.5
11,459.7
11,172.9 11,245.9
Investment fund services (IFS)
Assets under custody (annual average)
Clearstream
Number of contracts
Clearstream Banking S.A.: S&P Global Ratings
Rating
AA
AA
AA
AA
AA
Fitch
Return on shareholders' equity (annual average)6)
Rating
AA
AA
AA
AA
Market indicators
Xetra®, Börse Frankfurt and Tradegate
Trading volume (single-counted)
Eurex®
AA
-1,131.6
30
27.04)
27.0
874.3
824.3
3.87
4.68
4.46
Consolidated cash flow statement
Cash flows from operating activities
€m
677.3
10.1
1,621.4
1,056.2
1,298.2
Consolidated balance sheet
Non-current assets
€m
Equity
722.1
€m
613.3¹)
3.31¹
€
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
€m
1,136.1 1,054.6")
Depreciation, amortisation and impairment losses
€m
124.8
119.0
1,239.2
131.0
1,528.5
159.9
1,443,7
210.5
Net profit for the period attributable to
Deutsche Börse AG shareholders
Earnings per share (basic)
€m
762.3
4.14
Financial liabilities measured at amortised cost
€m
11,267.2
3,752.1
1,428.52)
494)5)
Employees (average annual FTEs)
3,911
4,460¹
4,731
5,183
5,397
Personnel expense ratio (staff costs / net revenue)
%
234)
27
25
26
Tax rate
%
26.04)
26.0
534)
544)
554)
584)
14,386.9 11,938.7
3,695.1 4,623.2
2,546.5
10,883.7
15,642.0
4,959.4
4,963.4
2,284.7
1,688.42)
2,283.2
27.04)
Performance indicators
€
2.10
2.25
2.35
2.45
2.703)
Dividend payout ratio
%
Dividend per share
■ Human resources strategy