Settlement
System availability of cash market trading system (Xetra®)
System availability of derivatives market trading system (T7Ⓡ)
Market risk cleared via Eurex Clearing (gross monthly average)
%
91
91
Number of sustainable index concepts
0
11,403
5
35
186
%
99.999
11,975
100
99.999
Number of calculated indices
Proportion of companies reporting in accordance with maximum
1,377.0
1,635.7
- 16
Clearstream
Value of securities deposited (annual average)
€bn
transparency standards 11)
Global Securities Financing (average outstanding volume for the period)
13,075
515.9
13,274
-1
598.6
- 14
Transparency and stability key figures
€bn
0
%
99.962
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.
Our brands: Deutsche Börse, Deutsche Börse Venture Network®,
DB1 Ventures, Börse Frankfurt
3
60
1 Pre-IPO and listing
2 Trading
8
3 Clearing
5 Custody
9
6 Collateral and liquidity management
7 Market data
8 Indices
9 Technology
4 Settlement
7
5
2
0
€trillion
14.8
16.7
- 12
99.930
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)
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.
C2
22
Deutsche Börse Group: an overview
1
Pre-IPO and listing
4
1
€bn
3
1,672.6")
1,727.5
EBIT margin, based on net revenue
%
46
42
10
Tax rate
-7
%
26.0
4
Return on shareholders' equity (annual average) 5)
%
196)
206)
27.0
27
25
%
Dividend per share
€
2.353)
2.25
4
Dividend payout ratio
%
544)
55
-2
Employees (average annual FTEs)
4,731
4,460¹)
6
Personnel expense ratio (staff costs / net revenue)
Gross debt EBITDA
2
1.5
-21
58.65
13
€
77.54
81.39
-5
67.19
Closing price (as at 31 Dec)
Eurex®
Number of contracts
Xetra®,
Frankfurt Stock Exchange and Tradegate
Trading volume (single-counted)
m
Market indicators
€
-6
87.41
Interest coverage ratio
%
25.3
23.21)
9
Deutsche Börse shares
Opening price (as at 1 Jan) 9)
High 10)
Low10)
€
81.39
59.22
37
€
83.00
1.97)8)
Performance indicators
Trading
Our brands: Xetra®, Börse Frankfurt, Tradegate, Eurex®,
European Energy Exchange, 360T®
289
Deutsche Börse Group worldwide
(Disclosures based on the HGB)
290
Glossary
113
Deutsche Börse AG
Remuneration report
Acknowledgements/contact
136
Corporate governance declaration
C5
Index of charts and tables
C6
294
About this report
107
100
Report on post-balance sheet date events
287
Consolidated income statement disclosures
Consolidated balance sheet disclosures
Responsibility statement by the
65
Report on expected developments
Non-financial key performance indicators
73
Risk report
288
Auditor's report
95
Report on opportunities
Executive Board
C7
Facts and figures of Deutsche Börse AG shares
C8
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.
-
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
-
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.
Committed to sustainability
_
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.
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.
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.
ty
Carsten Kengeter
Chief Executive Officer
5
Executive Board of Deutsche Börse AG, from left to right: Jeffrey Tessler, Andreas Preuss, Hauke Stars, Carsten Kengeter, Gregor Pottmeyer
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Letter from the CEO
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
Financial calendar
2
Deutsche Börse Group financial report 2016
Letter from the CEO
Carsten Kengeter
Chief Executive Officer
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Letter from the CEO
Frankfurt/Main, 10 March 2017
Dear shareholders,
Ladies and Gentlemen,
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.
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
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.
3
64
Other disclosures
257
Report on economic position
8
Indices
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.
Our brands: STOXX®, DAX®
6
Collateral and liquidity management
Our brands: Clearstream, LuxCSD
9
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.
Our brands: Clearstream, Eurex RepoⓇ
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: Deutsche Börse, 7 Market Technology®:
C7, F7, M7®, N7®, T7®
C4
Financial report 2016
Technology
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
Deutsche Börse Group covers the entire value chain in securities,
foreign-exchange and derivatives trading.
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.
3
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.
Our brands: Eurex Clearing, European Commodity Clearing
83
C3
4
7
Market data
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.
Our brands: Clearstream, LuxCSD, REGIS-TR
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 brand: Deutsche Börse
Contents
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.
C2
C3/4
145 Corporate
17 Combined
management report
156 Consolidated cash flow statement
158
Consolidated statement of changes in equity
160
Consolidated balance sheet
Basis of preparation
Fundamental information about the Group
194
32
Deutsche Börse AG shares
205
33
18
154
Consolidated statement of comprehensive
income
152 Consolidated income statement
146
governance
Corporate governance report
2 Executive and
Supervisory Boards
151 Consolidated financial
2
Letter from the CEO
The Executive Board
7
The Supervisory Board
8
Report of the Supervisory Board
153
statements/notes
Deutsche Börse Group: key figures
Deutsche Börse Group: an overview
- 10
-5
2,284.7
1,108.2
935.6")
18
Net profit for the period attributable to Deutsche Börse AG shareholders
€m
722.1
613.3¹)
18
Earnings per share (basic)
€
3.87
3.31¹)
17
Consolidated cash flow statement
Cash flows from operating activities excluding CCP positions
€m
856.6
796.6
8
Consolidated balance sheet
Non-current assets
€m
Equity
Earnings before interest and tax (EBIT)
- 1,283.2¹
2,546.5
DEUTSCHE BÖRSE
GROUP
www.deutsche-boerse.com
Deutsche Börse Group: key figures
Deutsche Börse Group: an overview
2016
2015
Change
in %
Consolidated income statement
Net revenue (total revenue less volume-related costs)
€m
2,388.7
thereof net interest income from banking business
€m
84.0
2,220.3¹)
50.62)
8
66
Operating costs
€m
- 1,317.4
3
Non-current interest-bearing liabilities
Financial report
2016
€m
€m
25
3,695.1
4,624.5
€m
-17
14,386.9
11,940.4
revenue.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
■ Repayment of customer deposits
■ Payment obligations
■ Customer default
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.
■ For pension provisions
■ For securities
Market risk
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
■ Outstanding liabilities
Liquidity risk
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.
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.
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.
Organic growth opportunities
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.
■In securities lending
Deutsche Börse Group financial report 2016
96
95
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.
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.
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.
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.
success.
Structural growth opportunities
■ For collateralised and uncollateralised
cash investments
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.
Credit risk
Risk report
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.
Compliance
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.
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
Financial risks at Deutsche Börse Group
Financial risks
■ For collateralised and uncollateralised
customer credits
Organisation of opportunities management
■ Participation in clearing fund
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.
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 financial report 2016
92
91
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.
As at 31 January 2017, Eurex Clearing AG increased its contribution to the clearing fund by €50 mil-
lion, to €150 million.
■ 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.
Finally, the remaining minimum regulatory equity of Eurex Clearing AG would be drawn upon.
■ Next, the portion of Eurex Clearing AG's equity which exceeds the minimum regulatory equity would be
realised.
■ 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.
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).
■ 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.
Risk report
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
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.
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:
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.
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.
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.
Safety for both participants and the clearing house
Deutsche Börse Group financial report 2016
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Report on opportunities
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.
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.
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 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.
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.
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.
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.
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.
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.
Market risk
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.
Outlook
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on opportunities
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.
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.
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.
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.
Overall assessment of the risk situation by the Executive Board
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.
Project risk
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.
Deutsche Börse Group financial report 2016
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93
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.
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.
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 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.
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.
Liquidity risk
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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.
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.
Business risk
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.
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.
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.
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
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Xetra segment
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.
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.
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.
Eurex segment
Clearstream segment
Deutsche Börse Group financial report 2016
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on expected developments
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.
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.
-
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.
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.
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.
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
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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
Deutsche Börse Group financial report 2016
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
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105
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.
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.
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 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.
-
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.
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.
Expansion of the index business
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.
Expansion in Asia
Deutsche Börse Group financial report 2016
97
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
101
98
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.
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
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.
Regulatory environment
Other structural growth opportunities
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
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).
External growth opportunities
■ 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.
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.
■ 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 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.
▪ 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.
■ 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
99
■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.
Deutsche Börse Group financial report 2016
100
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.
Cyclical opportunities
In addition to its structural growth opportunities, Deutsche Börse Group has cyclical opportunities, for
instance as a result of positive macroeconomic developments. Although the company cannot influence
these cyclical opportunities directly, they could lift Deutsche Börse Group's net revenue and net profit
for the period attributable to Deutsche Börse AG shareholders significantly in the medium term:
■ 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.
Non-performance-
related remuneration
45%
30%
Annual payment
Long-term incentive components (3-5 years)
Pension and
retirement
commitments
Performance-related remuneration components
Performance bonus
Performance shares
Ancillary
contractual
benefits
Cash
Composition of the total target remuneration
Shares
25%
pension and retirement commitments
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).
-
% = Proportion of the total target remuneration
1. Remuneration system and aggregate Executive Board remuneration
2. Supervisory Board remuneration
Remuneration system and aggregate Executive Board remuneration
Principles and targets
-
performance-related remuneration components
ancillary benefits
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.
113
114
Deutsche Börse Group financial report 2016
Structure and remuneration components
The remuneration system for the members of the Executive Board consists of four components:
■ non-performance-related fixed remuneration
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.
Non-performance-related component (cash component)
Performance-related component (cash component)
Performance-related component (share-based payment)
Cash
The Chief Executive Officer also participates in a Co-Performance Investment Plan which was resolved
by the Supervisory Board in 2015.
2/3
Consolidated net
profit growth
1/3
Individual objectives
50%
Performance
multiplier
100 per cent
target value
=
Shares
3 years holding period
Total payment
Assessment of net income growth for the performance bonus
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").
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:
50%
Overview of the performance bonus
Deutsche Börse Group financial report 2016
116
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 individual components of the Executive Board's remuneration are laid out in detail below.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Non-performance-related fixed remuneration
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.
Performance-related remuneration components
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 bonus
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 shares
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.
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.
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.
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.
115
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.
Remuneration report
428
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.
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.
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).
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.
Overview of total costs
Cash flow statement (condensed)
2016
€m
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.
2015
€m
2016
2015
%
€m
€m
Staff costs
Change
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
Net profit for the period
553.2
315.9
75
Earnings per share (€)
2.962)
1.712)
73
1) Calculation based on the definition of revenue pursuant to the BilRUG
2) Calculation based on weighted average of shares outstanding
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Deutsche Börse AG (HGB)
was largely attributable to higher expenses for advisory services, incurred in particular in connection with
the planned merger with LSEG.
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).
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.
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.
201.8
194.2
4
Cash flows from operating activities
110
Deutsche Börse Group financial report 2016
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 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.
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.
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).
Net assets of Deutsche Börse AG
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).
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).
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
Non-current assets (condensed)
Employees per country/region
2016
2015
31 Dec 2016
109
1) Calculation based on the definition of revenue not pursuant to the BilRUG
-606.7
372.8
-1,444.9
841.9
156.4
Write-offs
24.3
24.4
0
Cash flows from investing activities
Other operating expenses
720.0
708.4
2
Total
946.1
927.0
Cash flows from financing activities
Cash and cash equivalents as at
31 December
141.4
-697.9
-1,006.8
%
36
603.2
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
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).
€m
2016
€m
2015
Change
€m
%
Sales revenue
%
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.
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.
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Deutsche Börse AG (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.
Deutsche Börse AG (Disclosures based on the HGB)
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).
107
108
Deutsche Börse Group financial report 2016
Results of operations of Deutsche Börse AG
Total costs
1,300.2
946.1
1,280.5")
2
-5
EBIT
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)
185.4
443.9
175.8
134
Eurex
799.4
700.9
14
927.0
2
Market Data +
Services
275.8
281.3
-2
Net profit from equity
investments
289.9
123.9
Xetra
€m
2
Germany
31 Dec 2016
%
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.
In the course of financial year 2016, 31 employees left Deutsche Börse AG, resulting in a fluctuation
rate of 2.8 per cent.
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).
Deutsche Börse AG employees
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.
€m
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
7
0.6
Financial assets
6,062.6
6,157.5
Rest of Europe
%
4
Non-current assets as at
Total Deutsche Börse AG
1,132
100.0
31 December
6,141.2
0.4
Under 30 years
30 to 39 years
40 to 49 years
1,132
100
Total Deutsche Börse AG
1,132
100
111
Total Deutsche Börse AG
112
Corporate governance declaration in accordance with section 289a HGB
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.
Opportunities and risks facing Deutsche Börse AG
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 description of the internal control system (ICS) required by section 289 (5) HGB is given in the "Inter-
nal management" section.
Report on expected developments at Deutsche Börse AG
Deutsche Börse Group financial report 2016
France
32
50 years and older
105
9
Less than 5 years
384
34
283
358
25
320
28
386
34
Over 15 years
38
5 to 15 years
51.9
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).
11.3
1,098
66.3
Tangible assets
1.9
22
United Kingdom
12.3
Intangible assets
97.0
175
200
250
Miscellaneous
300
Target achievement (%)
Assessment of the Total Shareholder Return (TSR) of the Deutsche Börse share for performance shares
150
100
60th
0
Relative TSR vs index (percentile rank)
50th
Remuneration report
70th 75th 80th
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.
121
122
50
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
3) Of the last calendar month prior to the end of the vesting period, including the dividends from the entire vesting period
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
Deutsche Börse Group financial report 2016
115
50
Сар
Floor
0
-10
-5
0
+5
+7.5 +10
+15
+20
Net income growth (%)
Double-digit growh
100
Basic remuneration as well as annual and long-term incentive components
Target remuneration
Performance shares
Transitional payments
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.
Severance payments
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.
Change of control
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.
Share Ownership Guidelines
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Co-Performance Investment Plan (CPIP)
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.
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:
"
Deutsche Börse Group financial report 2016
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.
■ 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)
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.
125
126
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
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.
Secondary employment
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.
Post-contractual non-compete clause
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.
Deutsche Börse Group financial report 2016
124
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.
Shares
Performance
bonus
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).
Cash
Basic remuneration
% = Proportion of the total target remuneration
2) Cap at 250 per cent of the number granted
Performance-related component (share-based payment)
Performance-related component (cash component)
Non-performance-related component (cash component)
1) Unlimited share price performance
Maximum achievable
total remuneration¹)
Lever for the incentive components:
0 to 250% per year
Lever for the incentive components:
0 to 200%
Target achievement
(annual calculation,
5-year holding period)
123
Share target achievement
(annual payment, 3-year
holding period)
Basic remuneration
(monthly payment)
Ancillary contractual benefits
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.
Pension and retirement commitments
Retirement benefits
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".
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
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.
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.
Early retirement pension
Members of the Executive Board who have a defined benefit pension are entitled to an early retirement
pension if the company does not extend their contract, unless the 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.
Death and permanent occupational incapacity 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.
Cash target achievement
(annual payment)
1) Of the last calendar month before the start of the vesting period
Net income growth (%)
Absolute KPI
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.
Assessment of individual target achievement
Double-digit growth
+30
+20
+15
+7.5 +10
0
-10
Cap
-30
Floor
75
100
133
200
Target achievement (%)
Assessment of net income for the performance bonus
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
Relative KPI
118
Deutsche Börse Group financial report 2016
-20
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.
payment for
the purchase
of shares
Determining a performance multiplier
Final
Ø closing
price
Deutsche
Börse shares ³)
Final number
of (phantom)
performance
shares²)
TSR Deutsche Börse
vs index companies
50%
50% net income growth
(phantom)
performance
Number of
2016 2017 2018 2019 2020
shares granted
Performance period (vesting period)
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.
■ 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.
■ 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
Therefore, the PSP is variable in two dimensions:
Individual target
remuneration
Ø closing price
Deutsche Börse
shares¹)
Structure of the Performance Share Plan (PSP)
831.7
0 1,402.8
418.0
701.4
748.4
748.5
748.5
748.5
831.5
831.7
831.7
720.0
28.5
28.5
28.5
31.5
31.7
31.7
31.7
720.0
720.0
720.0
560.0
28.4
0
0
320.0
2,935.9
no max.
800.0
no max.
0
701.4
701.4
720.0
850.1
640.0
836.0
1,360.0
no max.
0
1,686.1 1,120.0
no max.
0
1,402.8
0 1,120.0
560.0
0 1,402.8
701.4
320.0
418.0
1,120.0
800.0
209.3
2,433.9
800.0
no max.
0
516.7
no max.
0
516.7
650.0
600.0
1,250.0
no max.
0
2,224.6
209.0
2,433.6
1,033.4
516.7
1,033.4
300.0
300.0
0 1,033.4
516.7
674.6
24.6
650.0
€ thous.
€ thous.
650.0
24.5
674.5
€ thous.
650.0
24.5
674.5
0
800.0
674.5
209.0
883.5
2,224.6
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
€ thous.
2015
2016
(max)
2016
(min)
no max.
2016
(max)
(min)
2016
2016
2016
Gregor Pottmeyer
Andreas Preuss
Deputy CEO
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
831.7
no max.
209.0
2015
no max.
€ thous.
761.6
4,267.6
31.7
76.4
800.0
€ thous.
€ thous.
800.0
€ thous.
819.7
1,500.0
129.3
1,629.3
€ thous.
2015
2016
2015
2016
Deputy CEO
Andreas Preuss
at 4 Apr 2015)
(since 1 June 2015,
appointed as
Carsten Kengeter
CEO
Total
Ancillary benefits²)
Fixed remuneration
Inflows
Deutsche Börse Group financial report 2016
132
31.5
896.1
831.7
831.5
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
131
953.9 5,941.1
953.9
3,670.6
Multi-year variable remuneration
1,363.0
2,200.0
cash component performance bonus (50%) 4)
477.0
477.0
476.9 1,363.0
476.9
variable cash remuneration (individual targets)³)
2,200.0
One-year variable remuneration
variable cash component (consolidated net income target, 3-year term)³)
2,619.8
no max.
2,853.7 1,183.6
761.6
€ thous.
€ thous.
761.6
€ thous.
761.6
18.2
2015
2016
(max)
(min)
2016
2016
Jeffrey Tessler
2,718.4
779.8
no max.
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
290.0
1,331.7 1,331.7
18.2
779.8
19.2
780.8
169.0
403.8
2,450.8
no max.
779.8
403.8
2,449.9
403.8
no max.
0
no max.
0
556.7
556.7
18.2
779.8
680.0
660.0
1,340.0
no max.
0
1,113.4
1,113.4
0
556.7
330.0
0 1,113.4 330.0
556.7
Service cost
Total remuneration (GCGC)
24.6
674.6
436.0 1,331.7 997.3
8,048.1 2,762.9 9,467.5 4,353.0
Richard M. Hayden 4)
1 Jan-13 May
54.2
100.0
106.0
full year
full year
Hans-Peter Gabe
100.0
107.0
full year
full year
Marion Fornoff
Karl-Heinz Flöther
137.1
142.0
full year
full year
Irmtraud Busch 4)
1 Jan-13 May
41.7
11 May - 31 Dec
Ann-Kristin Achleitner³)
Craig Heimark
full year
full year
103.0
full year
Erhard Schipporeit
144.6
54.2
full year
1 Jan-11 May
Gerhard Roggemann (Deputy Chairman until 13 May 2015)5)
Heinz-Joachim Neubürger +
1 Jan-5 Feb
22.5
Thomas Neiẞe4)
89.7
1 Jan-13 May
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
41.7
175.8
190.0
full year
3,634.8
556.7
3,719.8
680.0
650.0
560.0
516.7
-3,887.9 -728.8 -3,184.1
720.0
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
279.9
6,820.3
2,774.4 33,527.3 12,737.9
2,556.6 5,222.6 1,724.3 6,128.6
-67.7 -3,645.4 -863.9-16,766.1 -2,753.6
-403.8 -169.0 -2,772.6 -2,101.6
6,540.4
67.7 3,645.4
851.7
728.8 3,184.1
682.0
3,887.9
952.0
4,035.3
753.1
6,788.9
1,617.0 22,814.8
722.4 4,497.1
654.7
719.6
4,839.9 1,448.4 3,866.1
6,048.7
863.9 16,766.1 2,753.6
6,048.7
full year
-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
10,752
full year
250.0
257.0
full year
full year
Richard Berliand (Deputy Chairman as from 13 May 2015)
Joachim Faber (Chairman)
€ thous.
2015
20162)
€ thous.
2015
7,148
2016
135
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
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.
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.
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.
Supervisory Board remuneration
Deutsche Börse Group financial report 2016
134
7,105 10,154 46,393 58,410
9,706
6,595
Supervisory Board remuneration ¹)
548.2
166.0
full year
Jeffrey Tessler
Total
2016
€ thous.
720.0
2015
2016
2015
2016
2015
2016
2015¹)
€ thous.
720.0
€ thous.
€ thous.
650.0
650.0
28.5
28.4
24.5
748.5
748.4
674.5
674.5
€ thous.
761.6
18.2
779.8
Hauke Stars
Gregor Pottmeyer
133
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
plus SBP tranche for the remuneration year 6)
819.7
850.1
plus performance shares 4)
1,300.0
701.4
less variable share component³)
-1,470.6
-4,578.1 -1,093.2
less service cost
Total remuneration (section 314 of the HGB)
€ thous.
761.6
19.2
780.8
-548.2
7,329.3
3,146.6 4,259.1 3,112.6
Number of phantom shares")
16,593
15,1058) 8,952 12,693
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.
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.
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)".
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)
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.
-436.0 -1,331.7 -997.3
€ thous.
€ thous.
4,431.6
232.2
5) Left the Supervisory Board on 11 May 2016
4) Left the Supervisory Board on 13 May 2015
3) Elected to the Supervisory Board on 11 May 2016
2) Remuneration including individual attendance fee
1) The recipient of the remuneration is determined individually by the members of the Supervisory Board.
1,960.7
1,764.9
Total
Amy Yip6)
86.7
132.0
6) Elected to the Supervisory Board on 13 May 2015
13 May-31 Dec
143.0
full year
full year
full year
Johannes Witt
Martin Ulrici 4)
1 Jan-13 May
41.7
Jutta Stuhlfauth
120.0
135.0
full year
137.5
166.7
136
Corporate governance declaration
3,751.3
180.1
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
952.0
Deutsche Börse Group financial report 2016
682.0
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.
"Declaration of Conformity regarding the German Corporate Governance Code in accordance with
section 161 of the German Stock Corporation Act
On 8 December 2016, the Executive Board and Supervisory Board of Deutsche Börse AG issued the
following declaration of conformity:
Declaration of conformity in accordance with section 161 of the AktG
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.
851.7
24.5
4,663.8 3,931.4
€ thous.
130.3
(3,261.8)
Total 2)
Jeffrey Tessler
120.9
(3,184.1)
131.1
(3,887.9)
4,091.3
(2,550.2)
(total)
€ thous.
the balance sheet date
Carrying amount as at
(2,693.6)
120.9
(3,422.8)
131.1
130.3
(4,095.1)
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
164.2
209.3
(3,645.4)
3,558.2
(16,023.5)
Total 2014 to 2016 tranches
0
0
10,743
1,791
-12,693
-14,391
14,391
Tranche 2014
8,952
12,693
Tranche 2015
Tranche 2016
Andreas Preuss
154,442
134,529
19,913
4,637.8
Number of
phantom shares
as at
31 Dec 2016
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
Number of phantom shares
129
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
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.
(17,845.7)
1) Includes the expense recognised for the Co-Performance Investment Plan as well as the Performance Share Plan
3,320
50,437
10,743
209.0
290.0
45.0
577.8
Jeffrey Tessler
10,082.6
11,241.2
50.0
50.0
800.0
Andreas Preuss
system
Defined benefit
€ thous.
€ thous.
2015
40.0
2016
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
Replacement rate
Pensionable
income
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.
Amount of Executive Board remuneration
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Remuneration report
650.0
as at
31 Dec 2015
€ thous.
652.5
3,111.2
5,550.2
Total
279.9
2,009.7
2,711.5
978.8
4,679.5
2,000.0
Total
36.0
36.0
500.0
Hauke Stars
48.0
48.0
500.0
Gregor Pottmeyer
436.0
4,756.8
548.2
989.2
40.0
40.0
1,000.0
Carsten Kengeter
system
Defined contribution
1,166.3
169.0
997.3
1,331.7
403.8
1,735.5
14,839.4
16,791.4
1,377.8
449.0
Gregor Pottmeyer
164.2
(4,578.1)
7,148
no max.
0
1,300.0
performance shares (5-year term) 2)4)
no max.
0
1,100.0
share component performance bonus (50%, 3-year holding period) 2)3)
819.7
SBP (3-year term)"
794.9
variable cash component (net income target, 3-year term) 1)
1,614.6
no max.
Total
0
Multi-year variable remuneration
2,200.0
0
1,100.0
cash component performance bonus (50%) 2)
397.4
397.4
2,200.0
0
896.1
76.4
129.3
129.3
1,629.3 1,629.3
1,629.3
1,100.0
2,400.0
5,129.3 1,629.3
no max.
2,908.1
2015
2016
(max)
2016
(min)
2016
Hauke Stars
Total remuneration
Service cost
Total
performance shares (5-year term) 2)4)
share component performance bonus (50%, 3-year holding period) 2)3)
SBP (3-year term)"
variable cash component (net income target, 3-year term)">
Multi-year variable remuneration
cash component performance bonus (50%) 2)
variable cash remuneration (individual targets)"
One-year variable remuneration
Total
Service cost
548.2
548.2
548.2
436.0
Total remuneration
819.7
Tranche 2016
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
2,177.5
1,500.0
5,677.5
1,500.0
129.3
7,105
Tranche 2016
Jeffrey Tessler
7,915
Total 2014 to 2016 tranches
0
-9,669
9,669
Tranche 2014
0
-9,706
9,706
Tranche 2015
7,915
1,422
1,320
Tranche 2016
8,578
Total 2014 to 2016 tranches
0
-12,045
12,045
Tranche 2014
0
-10,752
10,752
Tranche 2015
8,578
1,500.0
1,430
6,595
8,527
Hauke Stars
10,154
variable cash remuneration (individual targets)¹)
One-year variable remuneration
Tranche 2015
Total
Ancillary benefits
Fixed remuneration
€ thous.
€ thous.
2015
(max)
2016
2016
(min)
2016
€ thous.
appointed as at 4 Apr 2015)
CEO (since 1 June 2015,
€ thous.
Granted contributions
Tranche 2014
-10,154
Carsten Kengeter
11,512
-11,512
0
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
Members
■Richard Berliand
(Chairman)
■ Monica Mächler
■ 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
■Erhard Schipporeit
Risk Committee
■ Jutta Stuhlfauth
oversees monitoring of the Group's operational, financial and business risks
■ at least four members, who are elected by the Supervisory Board
Responsibilities
■ reviews the risk management framework, including the overall risk strategy and risk appetite,
and the risk roadmap
■ takes note of and reviews the periodic risk management and compliance reports
■ discusses the annual reports on significant risks and on the risk management systems at regulated
Group entities, to the extent legally permissible
143
Deutsche Börse Group financial report 2016
■ approves the grant or revocation of general powers of attorney
144
Composition
■ 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
■ proposes suitable candidates to the Supervisory Board for inclusion in the Supervisory Board's election
proposal to the Annual General Meeting
■ handles issues relating to the contracts of service for Executive Board members, and in particular
to the structure and amount of their remuneration
■ Ann-Kristin Achleitner
(since 11 May 2016)
Strategy Committee
■ Gerhard Roggemann
(until 11 May 2016)
■ Amy Yip
Composition
■ the Chairman of the Personnel Committee also chairs the Nomination Committee
■ at least two other members (solely shareholder representatives who are also members of the Personnel
Committee)
Responsibilities
Personnel Committee
■ addresses succession planning for the Executive Board
Members
(Chairman)
■ Ann-Kristin Achleitner
(since 11 May 2016)
■ Marion Fornoff
■Gerhard Roggemann
(until 11 May 2016)
■ Amy Yip
Composition
■ chairman of the Supervisory Board as committee chairman
■ at least three other members, who are elected by the Supervisory Board and one of whom must be
an employee representative
Responsibilities
■ Joachim Faber
Members
Deutsche Börse Group financial report 2016
■ Ann-Kristin Achleitner
■ 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
Corporate governance report
■ 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
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.
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
Women in management positions
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.
Flexible upper age limit for Executive Board members
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.
■ Joachim Faber
(Chairman)
Corporate governance and declaration of conformity
Responsibilities
■ at least three members, who are elected by the Supervisory Board
Composition
(since 11 May 2016)
■ Richard Berliand
■ Hans-Peter Gabe
■ Gerhard Roggemann
(until 11 May 2016)
■ Jutta Stuhlfauth
■ Amy Yip
Technology Committee
Members
■Richard Berliand
(Chairman)
■ Karl-Heinz Flöther
■ Craig Heimark
■ Johannes Witt
Composition
chairman of the Supervisory Board as committee chairman
■ 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
■ Joachim Faber
(Chairman)
Members
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Corporate governance declaration
Sector-specific policies
Deutsche Börse Group's pivotal role in the financial sector requires that it handles information, and
especially sensitive data and facts, responsibly. A number of rules are in force 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.
Whistleblowing system
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.
Risk and control management policies
Functioning control systems are an important part of stable business processes. Deutsche Börse Group's
enterprise-wide control systems are embedded in an overarching framework. This comprises 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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Corporate governance declaration
Executive Board and Supervisory Board working practices
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.
-
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.
Deutsche Börse AG's Executive Board
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.
-
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.
139
140
Deutsche Börse Group financial report 2016
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.
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.
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.
www.unglobalcompact.org:
Nomination Committee
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
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Corporate governance declaration
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."
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.
Information on corporate governance practices
Conduct policies
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.
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.
Group-wide code of ethics
Code of conduct for suppliers and service providers
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.
137
138
Deutsche Börse Group financial report 2016
Values
Deutsche Börse Group's business activities are based on the legal frameworks and ethical standards
of the different countries in which it operates. A key way in which the Group underscores the values
which it considers important is by joining initiatives and organisations advocating generally accepted
ethical standards. Relevant memberships are as follows:
United Nations Global Compact
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.
More information on the Executive Board, its composition, and members' individual appointments and
biographies can be found at ☑www.deutsche-boerse.com/execboard.
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.
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.
■ Johannes Witt
Composition
■ at least four members, who are elected by the Supervisory Board
■ 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)
■ persons who cannot chair the committee: the Chairman of the Supervisory Board; former members
of the company's Executive Board whose appointment ended less than two years ago
Responsibilities
■ handles issues relating to the preparation of the annual budget and financial topics, particularly
capital management
■ audit reports
■ Monica Mächler
■ handles accounting issues, including the oversight of the accounting and reporting process
■ 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
■ 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
■ ensures the obligatory independence of the external auditors
■ non-audit services provided by the auditor
■ 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
Deutsche Börse AG's Supervisory Board
with section 161 of the AktG, and the corporate governance declaration in accordance with section
289a of the HGB
■ prepares the Supervisory Board's resolution approving the declaration of conformity in accordance
■ half-yearly financial report and any quarterly financial reports, if applicable
■ Karl-Heinz Flöther
■ handles issues relating to the adequacy and effectiveness of the company's control systems,
and in particular to risk management, compliance and internal auditing
■ Erhard Schipporeit
(Chairman)
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Corporate governance declaration
Supervisory Board committees and their working practices
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.
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.
Target figures for women in management positions
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.
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.
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.
141
142
Deutsche Börse Group financial report 2016
Supervisory Board committees in 2016
Composition and responsibilities
Audit Committee
Members
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.
Earnings before tax (EBT)
Other tax
Income tax expense
Result from equity investments
Financial income
Earnings before interest and tax (EBIT)
Net profit for the period from continuing operations
Operating costs
Financial expense
Net profit for the period from discontinued operations
Earnings per share (diluted) (€)
Net profit for the period attributable to Deutsche Börse AG shareholders
Net profit for the period attributable to non-controlling interests
Earnings per share (basic) (€)
from continuing operations
from discontinued operations
5
from continuing operations
from discontinued operations
1) See note 2.
-585.7
Other operating expenses
Net profit for the period
Depreciation, amortisation and impairment losses
4
2,220.3
Note
-599.7
2016
€m
2015¹)
€m
2,557.3
2,419.9
4
84.0
50.6
4
32.6
23.6
2,673.9
2,494.1
Volume-related costs
4
-285.2
-273.8
Net revenue (total revenue less volume-related costs)
2,388.7
Staff costs
11, 12
3.60
- 119.0
1,272.7
665.5
25.5
35.7
34
6.81
3.60
3.87
3.31
2.94
0.29
34
6.81
(restated)
3.87
3.31
2.94
0.29
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
153
Consolidated statement of comprehensive income
701.2
52.2
550.6
2
6
-600.7
-564.5
-1,317.4
-1,283.2
8
36.9
1,108.2
-1.5
935.6
6
-131.0
4.6
9
-79.2
-63.6
1,033.6
878.1
10
-1.5
-284.5
747.6
-1.6
-227.5
649.0
6.1
Total revenue
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.
Net interest income from banking business
Regulatory
requirements
+
Joachim Faber (Chairman)
+
Richard Berliand
+
+
+
(Deputy Chairman)
Ann-Kristin Achleitner
+
+
Karl-Heinz Flöther
+
+
Craig Heimark
+
+
Monica Mächler
+
+
Information technology,
and the clearing and
settlement business
Erhard Schipporeit
+
Exchange and capital
market business
models
Consolidated statement of comprehensive
Executive and Supervisory Boards | Management report Governance Financial statements
Corporate governance report
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.
Objectives for the Supervisory Board's composition
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:
Required qualifications
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.
Qualification requirements for members of the Supervisory Board of Deutsche Börse AG
Basic qualification requirements
Ideally, all Supervisory Board members must have the
following basic qualifications:
■ understanding of business issues
■ basic knowledge and understanding of the German
corporate governance system
■ analytical and strategic abilities
■ integrity and suitability of character for the position
Company-specific qualifications
The company-specific qualifications relate to the Supervisory
Board as a whole. Sound knowledge of the following in particular
is required:
■ exchange and capital market business models
■ accounting, finance, risk management and compliance
■ information technology, and the clearing and settlement
business
■regulatory requirements
Supervisory Board members' company-specific qualifications
Accounting, finance,
risk management and
compliance
+
+
Amy Yip
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
152 Consolidated financial statements
160 Notes to the consolidated
financial statements
160
194
205
Basis of preparation
Consolidated income statement disclosures
Consolidated balance sheet disclosures
257 Other disclosures
287 Responsibility statement by the
Executive Board
288 Auditor's report
152
Deutsche Börse Group financial report 2016
Consolidated income statement
for the period 1 January to 31 December 2016
Sales revenue
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.
+
+
147
148
Deutsche Börse Group financial report 2016
Independence
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.
Female representation and international profile
Flexible upper age limit and length of membership
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.
Other operating income
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
Election of a shareholder representative to 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.
Education and training measures for the Supervisory Board
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.
Efficiency review of the Supervisory Board's work
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.
Executive and Supervisory Boards | Management report Governance Financial statements
Corporate governance report
Shareholder representation, transparent reporting and communication
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.
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.
Board and its committees.
income
1,298.2
Net profit for the period reported in consolidated income statement
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
165,795.3
330.4
26,869.0
27,777.6
525.7
150,550.5
30
29
1.8
0.1
471.2
3.6
Total current liabilities
Other current liabilities
Cash deposits by market participants
Liabilities to related parties
section 37 (5) of the Körperschaftsteuergesetz (KStG, the German Corporation Tax Act)
Trade payables
3) Thereof income tax expense: €231.9 million (2015: €290.5 million)
156
-848.8
76.1
1,351.1
-1,506.1
for the period 1 January to 31 December 2016
135.3
11, 12
Depreciation, amortisation and impairment losses
701.2
1,298.2
Net profit for the period
€m
€m
2015
2016
Note
for the period 1 January to 31 December 2016
Consolidated cash flow statement
Deutsche Börse Group financial report 2016
155
Other bank loans and overdrafts
13,840.3
28
2,284.7
25
Interest-bearing liabilities
581.3
235.7
10
Deferred tax liabilities
131.7
117.0
23, 24
Other non-current provisions
140.7
167.9
22
Provisions for pensions and other employee benefits
NON-CURRENT LIABILITIES
3,695.1
4,624.5
139.0
2,546.5
Financial instruments held by central counterparties
Other non-current liabilities
15
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
33
Other current provisions
Tax provisions³)
CURRENT LIABILITIES
10,585.4
8,669.8
Total non-current liabilities
10.0
7.9
7,175.2
5,856.6
26
142.2
-386.8
2,100.0
Net (gain) loss on disposal of non-current assets
-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
299.5
-371.9
465.3
-414.6
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
-5.5
Payments to acquire investments in associates and joint ventures
2.5
-7.7
143.7
(Decrease)/increase in non-current provisions
-14.7
18.2
Deferred tax (income)/expense
10
-2.9
3.2
Other non-cash (income) / expense
-52.3
7.0
Changes in working capital, net of non-cash items:
56.0
-79.9
Increase in receivables and other assets
-223.4
-66.7
Increase (decrease) in current liabilities
276.9
Increase (decrease) in non-current liabilities
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
0.3
0
-136.5
149.9
0.1
-169.7
208.3
0
33
578.5
-1,592.3
3.8
-15.9
202.8
-717.5
0
3.6
-321.6
- 150.5
0
-495.0
1,089.5
-2,065.0
400.0
-5.3
917.4
-641.5
-3.9
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
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
-420.1
Repayment of short-term financing
Cash flows from financing activities
Net change in cash and cash equivalents
-115.1
-49.8
-112.2
-42.3
-178.9
-815.5
-5.0
-14.1
Proceeds from short-term financing
Dividends paid
3,556.1
11,681.4
42.2
372.8
2,357.9
20
-200.7
124.2
Remeasurement of cash flow hedges
2.7
2.8
Remeasurement of other financial instruments
105.7
8.6
Exchange rate differences from discontinued operations
Deferred taxes from continuing operations
4,482.3
10, 20
-40.9
-3.4
10, 20
147.2
-64.9
9.6
73.1
Deferred taxes from discontinued operations
0.6
-0.6
Other comprehensive income from investments using the equity method
Deferred taxes
(restated)
Note
2016
2015¹)
€m
€m
1,298.2
701.2
-27.3
3.2
10, 20
7.8
-0.1
-19.5
3.1
Items that may be reclassified subsequently to profit or loss:
Exchange rate differences from continuing operations
20
-3.8
5.2
Other comprehensive income after tax
-9.9
76.2
Total comprehensive income
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
Other intangible assets
Payments on account and assets under development
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
497.1
Other financial instruments
Items that will not be reclassified to profit or loss:
Changes from defined benefit obligations
Other loans¹)
31 Dec 2016
€m
4,633.0
thereof Deutsche Börse AG shareholders
thereof non-controlling interests
Total comprehensive income attributable to the shareholders of Deutsche Börse AG
thereof continuing operations
thereof discontinuing operations
1) See note 2
1,288.3
777.4
1,263.4
741.3
24.9
36.1
3,973.7
1,356.3
152.5
225.4
2,898.8
203.8
2,721.1
188.9
859.9
11
€m
31 Dec 2015
Note
629.8
766.3
Other non-current assets
Receivables from related parties
17
Trade receivables
16
Receivables and securities from banking business
107,909.6
15
Equity and liabilities
Financial instruments held by central counterparties
148.3
14,386.9
11,940.4
11.7
13.2
62.5
10
Receivables and other current assets
CURRENT ASSETS
Total non-current assets
13,465.5
669.8
2.0
126,289.6
10,142.9
554.1
4.7
163,844.8
Total assets
711.1
165,688.9
151,904.4
26,870.0
27,777.6
1,458.1
19
Total current assets
Deferred tax assets
Other cash and bank balances
1,022.3
138,107.8
122,668.7
514.2
18
Other current assets
94.2
107.6
Income tax assets²)
Restricted bank balances
180,075.8
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Consolidated balance sheet
5,856.6
EQUITY
Subscribed capital
Share premium
Treasury shares
Revaluation surplus
Accumulated profit
Shareholders' equity
Non-controlling interests
Total equity
20
193.0
1,327.8
193.0
1,326.0
-311.4
-315.5
41.5
-5.3
3,231.4
31 Dec 2015
€m
31 Dec 2016
€m
12
35.9
15
Financial instruments held by central counterparties
2,309.0
1,920.9
0.2
32.3
219.4
2,018.6
38.5
7,175.2
Note
13
109.7
113.5
0.7
2.2
68.7
75.4
40.3
34.3
255.4
1,604.8
26.0
0.4
162
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
164
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.
IFRS 9 "Financial Instruments" (July 2014)
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)
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 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.
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.
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.
New accounting standards - not yet implemented
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.
Disclosure Initiative"
Amendment to IAS 1 "Presentation of Financial Statements
(December 2014)
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.
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.
Amendments to IAS 16 “Property, Plant and Equipment” and IAS 38 "Intangible Assets
Clarification of Acceptable Methods of Depreciation and Amortisation" (May 2014)
Basis of preparation
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
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.
(100.00)
9) Thereof 3.72 per cent indirectly held via Tradegate AG Wertpapierhandelsbank
(41.94)
Paris, France
(55.19)
Paris, France
(28.97)6)
London, United Kingdom
(28.97)
Amsterdam, Netherlands
(28.97)
Brussels, Belgium
(28.97)
Bern, Switzerland
(28.97)
Amsterdam, Netherlands
(17.38)
Brøndby, Denmark
(55.19)
Prague, Czech Republic
(62.91)
Leipzig, Germany
(62.91)
161
on or after 1 January 2018; earlier application is permitted. This interpretation has not yet been
adopted by the EU.
of advance consideration in a foreign currency. IFRIC 22 must be applied for financial years beginning
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
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.
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.
Amendments to IAS 40 "Transfers of Investment Property" (December 2016)
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.
Vienna, Austria
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 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.
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.
Basis of preparation
163
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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.
IFRS 15 “Revenue from Contracts with Customers" (May 2014)
Leipzig, Germany
IFRS 16 "Leases" (January 2016)
(28.14)
Frankfurt/Main, Germany
100.00
Finbird Limited
ThreeSixty Trading Networks (India) Pte. Ltd.
Dubai, United Arab Emirates (UAE)
(100.00)
Frankfurt/Main, Germany
(100.00)
Jerusalem, Israel
(100.00)
Finbird GmbH
Mumbai, India
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
2) Thereof 50 per cent directly and 50 per cent indirectly held via Eurex Global Derivatives AG
3) Voting rights
4) Thereof income and expense from profit-pooling agreements with their subsidiaries amounting to a total of €71,474 thousand
5) Before profit transfer or loss absorption
6) Thereof 6.72 per cent indirectly and 22.21 per cent directly held via Powernext SA
7) Preliminary figures
8) Until 1 October 2016: Belpex SA
(100.00)
10) Numbers based on the divergent financial year from 1 April 2015 to 31 March 2016.
360 Trading Networks LLC
New York, USA
Finnovation S.A.
Luxembourg, Luxembourg
100.00
Impendium Systems Ltd
STOXX Ltd.
STOXX Australia Pty Limited
Tradegate Exchange GmbH
360 Treasury Systems AG
360T Asia Pacific Pte. Ltd.
360 Trading Networks Inc.
London, United Kingdom
(100.00)
100.00
100.00
Sydney, Australia
(100.00)
Berlin, Germany
78.729)
Frankfurt/Main, Germany
100.00
Singapore, Singapore
Zurich, Switzerland
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.
20
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:
Balance as at 1 January
Revaluation surplus
€m
2015
2016
€m
comprehensive income
thereof included in total
-315.5
-311.4
3.1
-5.3
4.1
0
-443.0
-315.5
Balance as at 31 December
Sales under the Group Share Plan
Placement of treasury shares
Balance as at 1 January
Treasury shares
1,326.0
1,327.8
124.4
Balance as at 31 December
-15.9
22
Balance as at 31 December
-4.0
-34.3
-4.0
-34.3
10
10
Deferred taxes
2.8
2.7
Changes from defined benefit obligations
2.8
Remeasurement of cash flow hedges
8.6
105.7
8.6
105.7
Remeasurement of other financial instruments
3.2
-27.3
3.2
-27.3
2.7
77.0
1.8
Sale of treasury shares
-146.9
33
-1,579.4
81.4
-1,506.1
1,351.1
€m
2015
2016
€m
Note
-4.8
-68.5
-1,579.4
Income tax paid
Dividends received
Interest-similar income received
Additional information on cash inflows and outflows contained in cash flows from
operating activities:
Cash and cash equivalents at end of period
Cash and cash equivalents at beginning of period
Effect of exchange rate differences
Net change in cash and cash equivalents (brought forward)
157
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Consolidated cash flow statement
Deutsche Börse Group financial report 2016
Interest paid
252.0
7.5
205.5
7.3
1,249.0
1,326.0
Balance as at 1 January
Share premium
193.0
193.0
193.0
193.0
€m
2015
2016
€m
Note
Balance as at 31 December
Balance as at 1 January
Subscribed capital
for the period 1 January to 31 December 2016
Consolidated statement of changes in equity
Deutsche Börse Group financial report 2016
158
-207.7
-277.8
-192.8
-257.5
41.5
-5.3
Accumulated profit
20
35.7
25.5
35.7
25.5
subsidiaries for the period
Non-controlling interests in net income of
0
0
6.3
-21.6
Exchange rate differences and other
Changes due to capital increases/decreases
-225.8
0
shareholders in STOXX Ltd.
Acquisition of the interest of non-controlling
322.4
139.0
Balance as at 1 January
Non-controlling interests
741.3
1,263.4
0
adjustments
-0.7
0.4
New accounting standards – implemented in the year under review
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.
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.
Basis of reporting
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.
Company information
1. General principles
Notes to the consolidated financial statements
Basis of preparation
Deutsche Börse Group financial report 2016
160
777.4
1,288.3
3,695.1
4,624.5
Total equity as at 31 December
36.1
24.9
139.0
142.2
as at 31 December
Total non-controlling interests
0.4
-0.6
3,556.1
Amendment to IFRS 11 "Joint Arrangements - Acquisitions of Interests in Joint Operations"
(May 2014)
4,482.3
2016
€m
Exchange rate differences and other
665.5
1,272.7
665.5
1,272.7
Deutsche Börse AG shareholders
Net profit for the period attributable to
0
0
-428.0
adjustments
0
Acquisition of the interest of non-controlling
0
0
-386.8
-420.1
21
Dividends paid
2,446.6
2,357.9
Balance as at 1 January
shareholders in STOXX Ltd.
Deferred taxes
Balance as at 31 December
10
€m
2015
2016
€m
Note
comprehensive income
thereof included in total
Shareholders' equity (brought forward)
159
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Consolidated statement of changes in equity
741.3
1,263.4
3,556.1
4,482.3
Shareholders' equity as at 31 December
2,357.9
3,231.4
-64.4
148.4
-64.4
129.6
-204.5
125.0
-127.5
148.4
2015
€m
2. Basis of consolidation
265
Fully consolidated subsidiaries (part 1)
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.
6065)
S$
12
25
€
2013
4795)
-2,0605)
1,1305)
4725)
5,0005)
€
2013
1765)
1,1055)
05)
23
1,3195)
0
US$
€
1,635,692
6,000
€
177
259,3265)
2005)
CZK
25
€
1 Jan 2015
2000
7,0205)
16 Mar 2016
-13
-9425)
3,0045)
15,6135)
236,9745)
40,0035)
4005)
10,4335)
10,3975)
10,0005)
€
CZK
9,870
6,211
€
47,517
2010
5485)
8,8725)
286,1956)
2009
20,0415)
174,2225)
205,9095)
8,5025)
1,513,678
346,133
25,000
€
169,8495)
6,1295)
3,6005)
160,2005)
25,000
195,1135)
€
2013
-4,5535)
965)
16,1245)
15,2375)
20,0005)
€
2002
5,910
2008
11,4805)
2014
1,823
25,414
472,7605)
232,902
168,771
110,557
30,000
13,490
319,5595)
364,813
201
448,1485)
1,876,080
25,714,767
0
EEX Link GmbH
(62.91)
Singapore, Singapore
(62.91)
Amsterdam, Netherlands
Cleartrade Exchange Pte. Limited
APX Shipping B.V.
(62.91)
Leipzig, Germany
Agricultural Commodity Exchange GmbH
(62.91)³)
Leipzig, Germany
(100.00)²)
100.00
%
direct/(indirect)
Equity interest
as at 31 Dec
2016
Leipzig, Germany
Zurich, Switzerland
(62.91)
Leipzig, Germany
Eurex Services GmbH (dormant)
PEGAS CEGH Gas Exchange Services GmbH
Gaspoint Nordic A/S
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)
Luxembourg, Luxembourg
European Commodity Clearing Luxembourg S.à r.l.
(62.91)
European Commodity Clearing AG
€
Zurich, Switzerland
European Energy Exchange AG
2013
1
37
90
79
25
€
1998
2,2094)
1998
512,630"
24,805
16,9876)
2006
61,7015)
1,023,3775)
16 July 2015
16
€
Domicile
3,600
100
Eurex Zürich AG
Eurex Global Derivatives AG
Company
Fully consolidated subsidiaries (part 2)
Deutsche Börse Group financial report 2016
166
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)
6) Consists of interest and commission results due to business operations
2001
4,2374)
12,658
16,063
2001
344
3,560
12,888
10,785
7,000
€
49,0005)
2002
2002
Singapore, Singapore
(100.00)
Luxembourg, Luxembourg
(100.00)
Prague, Czech Republic
(100.00)
Cork, Ireland
(100.00)
100.00
Frankfurt/Main, Germany
Luxembourg, Luxembourg
(100.00)
Tokyo, Japan
(100.00)
Luxembourg, Luxembourg
(100.00)
Luxembourg, Luxembourg
100.00
(50.00)
Singapore, Singapore
(100.00)
Singapore, Singapore
(79.44)
Frankfurt/Main, Germany
(100.00)
Frankfurt/Main, Germany
(100.00)
Frankfurt/Main, Germany
JPY
Frankfurt/Main, Germany
100.00
Prague, Czech Republic
100.00
Frankfurt/Main, Germany
100.00
Chicago, USA
100.00
Singapore, Singapore
100.00
Frankfurt/Main, Germany
(100.00)
Frankfurt/Main, Germany
100.00
Luxembourg, Luxembourg
100.00
New York, USA
Domicile
Deutsche Boerse Asia Holding Pte. Ltd.
Clearstream Services S.A.
Clearstream Operations Prague s.r.o.
Clearstream Global Securities Services Limited
Clearstream Banking AG
REGIS-TR S.A.
Clearstream Banking Japan, Ltd.
Clearstream Banking S.A.
Clearstream International S.A.
Clearstream Holding AG
Börse Frankfurt Zertifikate Holding S.A. in liquidation
Börse Frankfurt Zertifikate AG
Need to Know News, LLC
MNI Financial and Economic Information (Beijing) Co. Ltd.
Assam SellerCo Service, Inc. 3)
Assam SellerCo, Inc. 2)
Company
New York, USA
Frankfurt/Main, Germany
Eurex Clearing Asia Pte. Ltd.
DB1 Ventures GmbH
Frankfurt/Main, Germany
(100.00)
Chicago, USA
(100.00)
Beijing, China
(100.00)
100.00
%
direct/(indirect)
Equity interest
as at 31 Dec
2016
Eurex Repo GmbH
Eurex Bonds GmbH
Eurex Clearing Security Trustee GmbH
Eurex Clearing AG
Eurex Frankfurt AG
Deutsche Börse Services s.r.o.
Deutsche Börse Photography Foundation gGmbH
Deutsche Boerse Systems Inc.
Deutsche Boerse Market Data+Services Singapore Pte. Ltd.
Eurex Exchange Asia Pte. Ltd.
(100.00)
100.00
2) Until 27 July 2016: Market News International Inc.
€
2013
3,972
19,004
17,182
13,168
140
€
50
2009
0
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
2,098
0
US$
2011
162
3,549
0
171
0
-93
172,0845)
496,1725) 6)
2002
188,005
66,915
2007
167,1734)
33
2,454,949
1,180,353
14,686,2615)
1,193,4985)
92,0005)
€
1,103,930
25,000
€
2,285,314
101,000
€
2013
1,626
1,745
2,098
CNY
3) Assam SellerCo Service, Inc. is part of the Assam SellerCo, Inc. subgroup.
4) Before profit transfer or loss absorption
5) Preliminary figures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
165
Basis of preparation
Ordinary share
Currency
capital
thousand
Equity¹)
thousand
Total assets
thousand
Sales revenue
2016
thousand
1,301
Initially
consolidated
US$
Net profit/loss
2016
thousand
n.a.
n.a.
n.a.
n.a.
n.a.
US$
2009
149
13,877
24,262
23,049
9,911
2009
169
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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.
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 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.
-
-
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
42
20
-20
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.
Basis of preparation
Total assets and liabilities acquired
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.
Non-controlling interests
Liabilities
Assets (without goodwill)
Acquired assets and liabilities
Total consideration
Acquired bank balances
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.
€m
Consideration transferred
Preliminary goodwill
calculation
31 May 2016
Goodwill resulting from the business combination with Power Exchange Central Europe a.s.
-17
2.8
Goodwill (not tax-deductible)
Purchase price
-3
2,000
5
97
-367
2 Sep 2016
€
25
101
101
0
0
2007
€
156,400"
197,876"
230,728"
100,981"
GBP
7,804
57
0
AU$
2009
56,661
2014
7,193
2008
1,895
118,869
801
147,578
125,976
673
CHF
495
45,0727
-597
7,117
35
€
157
100
CHF
4 May 2015
239
4,235
178
9,840
3,000
€
1 Dec 2016
0
0
2
3,782
184
331
1 Jan 2015
1 July 2016
5,112
11,914
6,290
5,104
-1.2
22
DKK
11
17
189
186
18
€
1 Jan 2015
7
312
500
1,424
1,583
352
0
15 Oct 2015
ILS
1
-1,273
INR
30010)
64,34010)
830
74,68710)
4,408
34,69110)
-198
1,90410)
15 Oct 2015
15 Oct 2015
168
2
75
54
21
Total
Foreign
25
Germany
Disposals
Additions
As at 1 January 2016
Changes to consolidated subsidiaries
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.
Deutsche Börse Group financial report 2016
As at 31 December 2016
€
15 Oct 2015
41
S$
15 Oct 2015
13,633
69,045
63,594
43,434
550
128
2010
31 July 2015
28
526
2,542
2,163
1,537
€
€
4,241
11,795
874
571
336
34
€
15 Oct 2015
7,813
122
8,074
6,782
300
US$
15 Oct 2015
-112
6,855
1.6
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.
-0.6
London, United Kingdom
Eurex
24.37
Belgrade, Serbia
Eurex
(7.24)
Switex GmbH
Tradegate AG Wertpapierhandelsbank⁹)
12.008)
ZDB Cloud Exchange GmbH in Liquidation"
Hamburg, Germany
Xetra
40.00
Berlin, Germany
Eschborn, Germany
Xetra
14.86
Eurex
10) 11)
49.90
Xetra
SEEPEX a.d.
figo GmbH
Hamburg, Germany
MD+S
18.67
Global Markets Exchange Group International LLP
London, United Kingdom
Eurex
45.13
Berlin, Germany
Index Marketing Solutions Limited
Eurex
31.45
LuxCSD S.A.
Luxembourg, Luxembourg
Clearstream
(50.00)
PHINEO gAG
R5FX Ltd
London, United Kingdom
Berlin, Germany
Eurex
30.0312)
Sales revenue
2016
thousand
Net profit/loss
2016
thousand
Associate
since
GBP
2¹)
2,183¹)
Liabilities
thousand
2,548¹)
2014
€
1,400
4,545
2,931
4,554
214
2013
-215")
Assets
thousand
capital
thousand
Currency
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
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.
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.
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
173
Basis of preparation
Ordinary share
24.03
Eurex
London, United Kingdom
Digital Vega FX Ltd
-0.3
0.4
-0.4
-0.4
-0.4
0.1
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.
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.
-1.2
-
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
-
0.9
calculation
1 July 2016
€m
Preliminary goodwill
-1.6
-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
Acquired assets and liabilities
Assets (without goodwill)
Liabilities
Non-controlling interests
Total assets and liabilities acquired
Goodwill (not tax-deductible)
calculation
30 Sep 2016
2.1
Consideration transferred
Assets (without goodwill)
%
Bondcube Limited in Administration
London, United Kingdom
Xetra
30.00
Associates
Brain Trade Gesellschaft für Börsensysteme mbH
Frankfurt/Main, Germany
direct/(indirect)
Xetra
China Europe International Exchange AG
Frankfurt/Main, Germany
Eurex
40.00
Deutsche Börse Commodities GmbH
Frankfurt/Main, Germany
Xetra
16.20
(28.58)²)
Equity interest
as at 31 Dec 2016
Segment
Domicile
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.
Belpex SA, Brussels, Belgium, changed its company name to EPEX SPOT Belgium S.A. as at
31 December 2016.
0
172
Deutsche Börse Group financial report 2016
Associates and joint ventures
Company
Joint ventures
Acquired assets and liabilities
0
Proceeds from disposal, net of cash disposed
4 May 2015
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
Operating costs
Result from equity investments
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.
Earnings before interest and tax (EBIT)
Earnings before tax (EBT)
Income tax expense
Net profit for the period from discontinued operations
2016
2015
€m
€m
149.3
Financial income
302.9
-
■ PHINEO gAG, Berlin, Germany
€
267
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.
Discontinued operation
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.
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
"
figo GmbH, Hamburg, Germany
■ Index Marketing Solutions Limited, London, United Kingdom
■ SEEPEX a.d., Belgrade, Serbia
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.
568.9
0
-77.4
Other comprehensive income after tax from discontinued operations
-53.5
59.3
Total comprehensive income from discontinued operations
€
497.1
111.5
175
124.2
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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
Basis of preparation
-200.7
Exchange rate differences
-64.9
-155.8
640.8
147.1
-58.5
-92.4
0.6
2.3
582.9
57.0
-26.9
15.1
556.0
72.1
-5.4
-19.9
550.6
52.2
Deferred taxes
147.2
2010
2013
€m
-902
79
105
531
-1,975
11 Nov 2016
GBP
5,0266)
8016)
4116)
6,787
06)
2013
GBP
0'
597)
60"
7)
07)
07
-1476)
2014
75
2011
22,987
1,090
82
-4,373
31 Oct 2015
€
1,000
4,163,028
€
4,158,276
2,126
2007
GBP
5373)4)
1,3844)
6034)
5484)
1064)
7,471
€
6,000
7,139
-30,056
14 July 2015
€
25
25
0
0
0
51,108
4 Nov 2016
24,403
133,575
90,938
53,486
12,644
€
50
237
€
39,166
226,519
120,000
1,392
2,450
425
30 June 2015
€
50
4,372
725
1,195
783
2010
GBP
2
764
625
130
-1,177
2014
RSD
38
€m
- 45.6
17.8
2014
€
50
51
99
134
3
1 Jan 2016
-1,702
€
73,935
3,078,937
82,407
48,1955)
2014
€
13
82
1,015
334,234
1,431
2,795
66,1324)
2014
€
100
2,046
2,093
200
-1,6975)
3,259
2014
0
0
8
40
32
4 May 2015
US$
19,800
€
30,434
68
2014
29,803
36,054
26,651
9,927
1 Jan 2015
€
6,168
65,135
12,584
93,635
22,845
1 Jan 2015
GBP
500
1,837
3,667
4,550
240
67,127
€
31 May 2016
3,947
€
125
6,018
18,948
53,204
27,6665)
2014
€
50
48
1,624
2,140
-2,6905)
2014
CZK
30,000
34,215
45,389
42,834
28,424
153,941
129,282
40,050
Gain on disposal
30 June 2016
€m
989.6
-60.4
-13.0
916.2
153.8
Total assets and liabilities disposed
486.0
45.4
63.5
148.6
-184.2
-6.1
-161.5
-206.0
347.3
7.8
P&L effects from currency translation
Current liabilities
Other non-current liabilities
889.2
- 9.7
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
Assets and liabilities disposed
Goodwill
Miscellaneous intangible assets
Property, plant & equipment
Financial assets
Other non-current assets
Receivables and other current assets
Deferred tax liabilities
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.
Deutsche Börse Group financial report 2016
Net profit/loss
2016
thousand
Initially
consolidated
€
83
496,809
522,414
127,051
thousand
62,898
€
8,313
302,565
343,350
49,568
5,461
1998
€
2012
Sales revenue
2016
Total assets
thousand
thousand
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
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
167
Basis of preparation
Currency
Ordinary share
capital
thousand
Equity¹)
176
27,000
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.
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.
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
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.
Basis of preparation
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
179
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
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.
2 to 20 years
8 to 21 years
23 years
indefinite
5 years, indefinite
8 years
20 years
16 years
indefinite
2 to 12 years
3 to 5 years
30 years
12 years
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Basis of preparation
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.
Asset
Computer hardware
Office equipment
Leasehold improvements
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Basis of preparation
181
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.
Recognition of 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.
Financial assets
Investments in associates and joint ventures are measured at cost on initial recognition and accounted
for using the equity method upon subsequent measurement.
Investments in associates and joint ventures
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.
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:
Fair value measurement
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.
Deutsche Börse Group financial report 2016
180
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.
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.
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 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.
Repair and maintenance costs are expensed as incurred.
5 to 25 years
based on lease term
Depreciation period
3 to 5 years
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.
Phases not eligible for capitalisation
1. Design
■ Definition of product design
Useful life of software
Asset
Standard software
Purchased custom software
Internally developed custom software
Amortisation period
3 to 10 years
3 to 6 years
3 to 7 years
Intangible assets are derecognised on disposal or when no further economic benefits are expected to
flow from them.
The amortisation period for intangible assets with finite useful lives is reviewed at a minimum at the
end of each financial year. If the expected useful life of an asset differs from previous estimates, the
amortisation period is adjusted accordingly.
Goodwill is recognised at cost and tested at least once a year for impairment.
The 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.
Purchased software is carried at cost and reduced by amortisation and, where necessary, impairment
losses. Amortisation is charged using the straight-line method over the expected useful life or at most until
the right of use has expired.
Useful life of other intangible assets classified by business combinations
STOXX
EEX
CGSS
360T
Other
Exchange licences
indefinite
indefinite
indefinite
Trade names
Member and
customer relationships
ISE¹)
Subsequent measurement of financial assets
Deutsche Börse Group financial report 2016
177
Specification of the expected economic benefit
■Initial cost and revenue forecast
Phases eligible for capitalisation
2. Detailed specifications
■ Compilation and review of precise specifications
■ Troubleshooting process
3. Building and testing
■ Software programming
■ Product testing
Phases not eligible for capitalisation
4. Acceptance
178
■ Planning and implementation of acceptance tests
■ Preparation and implementation of simulation
◉
Compilation and testing of simulation software packages
Compilation and review of documents
6. Roll-out
■ Planning of product launch
Compilation and dispatch of production systems
Compilation and review of documents
In accordance with IAS 38, only expenses attributable to the “detailed specifications” and “building and
testing" phases are capitalised. All other phases of software development projects are expensed.
Intangible assets
indefinite
5. Simulation
Miscellaneous
intangible assets
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.
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.
185
■ 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.
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.
European Commodity Clearing AG and Eurex Clearing AG act as central counterparties:
Financial instruments held by central counterparties
Gains or losses on derivative instruments that are not part of a highly effective hedging relationship are
recognised immediately in the consolidated income statement.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Derivatives that are not part of a hedging relationship
Hedges of a net investment in a foreign operation
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.
Fair value 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.
Cash flow hedges
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.
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.
Assets held for trading
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.
Non-current assets held for sale, disposal groups and discontinued operations
Receivables and other assets are carried at their nominal amount. Adequate valuation allowances take
account of identifiable risks.
Other current assets
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).
Treasury shares
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.
Deutsche Börse Group financial report 2016
186
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".
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.
Cash or securities collateral held by central counterparties
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" are reported as non-current if the remaining
maturity of the underlying transactions exceeds twelve months at the reporting 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.
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.
Derivatives are used to hedge interest rate risk or currency risk. All derivatives are carried at their fair values.
Derivatives and hedges
Basis of preparation
184
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.
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".
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.
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.
Deutsche Börse Group financial report 2016
182
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.
Available-for-sale financial assets
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 to cash. They are subject to only minor changes in value. Cash and cash
equivalents are measured at amortised cost.
Cash and cash equivalents
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".
Loans and receivables
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".
Deutsche Börse Group financial report 2016
Derecognition of financial assets
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.
10 years
Impairment of financial assets
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.
Financial liabilities measured at fair value through profit and loss
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 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.
Offsetting financial assets and liabilities
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.
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.
Financial liabilities
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.
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.
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.
Basis of preparation
183
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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.
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 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.
Nationality: Chinese (Hong Kong)
Vitagreen, Hong Kong
Executive Director
Hong Kong
RAYS Capital Partners Limited,
Managing Partner
Amy Yip, *1951
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
Johannes Witt, 1) * 1952
since 7 October 2005
Erhard Schipporeit, *1949
Independent Management
Consultant, Hanover
Nationality: German
Board member
since 16 May 2012
Board member
Board member
Member of different supervisory
bodies, Pfäffikon
Nationality: Swiss
Staff member in the Financial
Accounting & Controlling
department
since 13 May 2015
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:
Gerhard Roggemann, *1948
Senior Advisor
Chairman of the Supervisory Board
Report of the Supervisory Board
Deutsche Börse Group financial report 2016
8
7
execboard
www.deutsche-boerse.com/
supervboard
www.deutsche-boerse.com/
As at 31 December 2016
(unless otherwise stated)
1) Employee representative
Board member
from 11 May 1998 to
14 May 2003 and
from 12 July 2005
until 11 May 2016
Nationality: German
Private Merchant Banking LLP,
London
Edmond de Rothschild
Former member of the
Supervisory Board
Joachim Faber
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.
Monica Mächler, *1956
18
Jutta Stuhlfauth
100
23
23
Erhard Schipporeit
82
15
9
Gerhard Roggemann (until 11 May 2016)
96
22
23
Monica Mächler
94
16
11
17
83
23
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
Johannes Witt
1) Since attendance at workshops is voluntary for Supervisory Board members such workshops are not taken into account when calculating the average
attendance rate.
Average attendance rate
100
22
22
Amy Yip
96
22
95
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.
Craig Heimark
13
22
Joachim Faber
%
Meeting attendance
(incl. committees) ¹)
Name
Meetings
22
Attendance of Supervisory Board members at meetings in 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.
The Supervisory Board members' detailed attendance record for plenary Supervisory Board and committee
meetings was as follows:
93
100
Ann-Kristin Achleitner (since 11 May 2016).
14
Hans-Peter Gabe
94
17
18
Marion Fornoff
100
Richard Berliand
23
100
11
11
100
22
22
Karl-Heinz Flöther
23
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.
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.
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.
■
■ discussion of information security, IT risk management and related measures
■ detailed analysis of the Group's technology innovation concept and its implementation
in-depth discussion of developments to and the implementation of Deutsche Börse Group's IT strategy
■
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 IT financial planning for 2017 and of the revised budget process
■ discussion of Deutsche Börse Group's strategic focus
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
Strategy Committee (one meeting during the reporting period)
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Audit of the annual and consolidated financial statements
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.
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.
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.
No conflicts of interest arose with regard to individual Supervisory Board members during the
reporting period.
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
Management of individual conflicts of interest
■ 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)
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
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.
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.
Committee work
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.
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.
Deutsche Börse Group financial report 2016
12
11
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.
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.
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.
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).
13
14
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
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 and formal adoption of the Audit Committee's tasks
■ discussion of Deutsche Börse Group's dividend and budget
■ 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
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report of the Supervisory Board
Craig Heimark, *1954
Managing Partner
Hawthorne Group LLC, Palo Alto
Nationality: US-American
Board member
since 7 October 2005
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
since 21 May 1997
Hans-Peter Gabe, ¹) * 1963
Staff member in the HR
Compensation, Workforce &
Talent Management section
Deutsche Börse AG,
Frankfurt/Main
Nationality: German
Board member
Luxembourg
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)
Gregor Pottmeyer, *1962
Graduate degree in
Business Administration
Member of the Executive Board
and Deputy Chief Executive
Officer, Deutsche Börse AG,
responsible for IT & Operations,
Data & New Asset Classes
(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,
Deutsche Börse AG,
responsible for Clients,
Products & Core Markets
The Supervisory Board
Independent Management
Consultant, Grünwald
Nationality: German
Joachim Faber, * 1950
Chairman
since 16 May 2012
Board member
Karl-Heinz Flöther, *1952
Independent Management
Consultant, Kronberg
Nationality: German
since 11 May 2016
Board member
München (TUM), Munich
Nationality: German
at the Technische Universität
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
Board member
since 7 October 2005
Renshaw Bay LLP, London
Nationality: British
Chairman of the Management
Committee
Richard Berliand Limited,
Ashtead Surrey
Richard Berliand, *1962
Deputy Chairman
Management Consultant -
Executive Director
since 20 May 2009
Ann-Kristin Achleitner, *1966
Scientific Co-Director Center
for Entrepreneurial and
Financial Studies (CEFS)
Board member
0
164.6
184.8
3.2
-152.1
-152.1
-33.0
469.4
430.3
7.0
-28.8
-3.1
6.6
17.0
16.7
-2.9
6.5
6.6
13.6
15.4
0
0
6.7
0
-209.1
-8.5
-28.0
-28.1
2.5
6.3
746.4
781.9
-196.4
0.1
7.6
3.2
67.7
-12.7
73.0
-40.0
0.6
0
124.1
124.3
-2.9
-4.3
0
0
124.3
115.2
-32.9
0
46.5
26.7
15.7
64.2
-0.1
-0.4
0
0.5
175.3
215.6
-15.7
-21.1
2.7
2.9
36.3
37.9
-3.4
-3.5
0
0
183.3
189.7
−1.1
-1.1
0
0
0
0
0
-6.3
-5.8
0
0
124.5
105.8
-23.6
-20.1
0.1
0
887.5
29.7
1,032.2
-65.8
14.9
26.9
162.2
66.5
-2.7
-2.3
12.2
23.4
27.7
21.8
-58.6
160.5
36.7
1.0
-1.4
Financial assets or liabilities measured at fair value through profit or loss
Total
- 141.7
- 160.2
Financial liabilities
- 141.7
0
6.5
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
-6.4
-19.7
Financial liabilities
-4.4
-21.4
0
84.0
50.6
Composition of other operating income
For details of rental income from subleases see ☑ note 38.
23.6
32.6
17.8
23.5
0.4
0.6
0.8
0.8
2.7
1.3
Interest expenses from positive interest yields
1.9
€m
€m
2015
2016
(restated)
Total
Miscellaneous
Income from agency agreements
Rental income from subleases
Income from impaired receivables
Income from exchange rate differences
6.4
1.5
14.3
Financial assets or liabilities measured at fair value through profit or loss
- 13.1
2,220.3
2,388.7
-332.9
-346.6
0
45.7
401.6
410.0
-44.9
-42.9
7.5
9.0
138.0
132.8
-5.0
-1.1
4.0
1.2
103.1
115.0
-11.9
-13.7
- 13.1
61.4
59.1
0
2.7
4.5
Available-for-sale financial assets
16.7
44.5
Loans and receivables
33.7
75.1
Interest income from positive interest yields
€m
€m
26.1
2015
Composition of net interest income from banking business
Deutsche Börse Group financial report 2016
196
195
2,220.3
2,388.7
-273.8
-285.2
23.6
32.6
0
2016
402.7
2016
-35.6
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
Sales revenue
Composition of net revenue
4. Net revenue
Consolidated income statement disclosures
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
184.4
0
0
Equity derivatives
18.3
21.5
18.7
23.9
Other
0
0
27.7
21.8
Repo business
0
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.
0
64.1
Foreign exchange (360T)¹)
-1.8
-0.1
190.1
233.9
Commodities (EEX)
0
0
39.7
41.4
15.8
1,049.7
Legal risks
Income taxes
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
CHF
Average rate
2015
2016
Average rate
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
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.
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".
1.1046
1.0522
1.0924
CZK
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
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.
0.8561
0.8223
GBP (£)
1.5430
1.5222
1.5220
1.5247
SGD
27.0250
27.0198
27.2792
27.0426
0.7244
436.5
914.7
16.5
-46.0
-48.3
50.6
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
0
114.0
127.2
Index
0
0
2,557.3
2,419.9
-37.4
0
0.1
€m
(restated)
2015
2016
€m
€m
€m
2015
2016
(restated)
0
Net revenue
€m
2015
(restated)
€m
Miscellaneous other operating income includes income from cooperation agreements and from training
as well as valuation adjustments.
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
Volume-related costs
21.4
0
184.0
211.1
186.8
0
0
13.6
13.0
Other
0
0
13.5
15.4
Listing
0
0
36.0
32.5
Central counterparty for equities
0
0
148.0
125.9
Trading
Xetra
0
Clearstream
International business (ICSD)
555.7
Data Services
Market Data + Services
34.1
62.6
901.1
925.2
0
0
100.0
113.0
Global Securities Financing
186.0
0
127.0
128.6
Investment Funds Services
0
0
132.8
127.9
Domestic business (CSD)
34.1
62.6
541.3
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.
- 161.6
189
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 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.
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
191
Basis of preparation
Group Share Plan (GSP)
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.
Stock Bonus Plan (SBP)
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.
Co-Performance Investment Plan (CPIP)
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.
Performance Share Plan (PSP)
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 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.
Leases
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
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.
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.
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.
Restricted Stock Units (RSU)
Expenses incurred in connection with operating leases are recognised as an expense on a straight-line
basis over the lease term.
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.
188
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 Group financial report 2016
Consolidation
Basis of preparation
187
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
Basis of preparation
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.
Pensions and other employee benefits relate to defined contribution and defined benefit pension plans.
Pensions and other employee benefits
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
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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
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.
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.
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
Software, payments on account and construction in progress
0
€m
(restated)
2016
2015
2016
2015
2016
2016
2015
2016
2015
€m
€m
€m
€m
€m
€m
€m
191.6
33.8
Carrying amount as at 31 Dec 2015
906.2
0
131.5
135.5
Amortisation and impairment losses
as at 31 Dec 2015
211.5
599.2
10.7
1.6
Amortisation
17.5
49.3
0
0
Impairment losses
0
3.6
0
0.3
0
1,359.0
27.8
0.3
3.6
Exchange rate differences
52.7
0
0
33.3
102.3
Impairment losses
1.2
1.5
0
1.6
0
4.3
Disposals
-0.9
-0.8
0
0
0
-1.7
0.4
recognised in other
comprehensive income
2,182.0
94.6
Disposals from change in scope of
-1.4
0
0
0
0
Exchange rate differences
-0.1
−1.1
0
0
-34.4
-35.6
Amortisation and impairment losses
as at 31 Dec 2016
225.1
607.6
0
1.9
71.6
1.4
4.2
Reclassifications
0
consolidation4)
-0.2
-2.5
-10.7
0
-0.1
-13.5
Reclassification into "assets held for
sale"5)
-5.0
-38.3
0
0
-1,281.0
Disposals
0
-1.2
0
0
-1,324.3
-1.2
Tax expense/(income)
differences tax expense/(income)
statement disclosures
Net income from equity investments
Net income from other equity investments
Net income due to the change of status of EPEX SPOT SE²
Net income from associates and joint ventures
Total income from equity method measurement¹
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
1) Including impairment losses
Brain Trade Gesellschaft für Börsensysteme mbH
0
0
2016
(restated)
Composition of financial income
9. Financial result
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.
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.
Consolidated income
statement disclosures
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
-5.4
2015
0
figo GmbH
Equity method-accounted result of associates
Composition of net income from equity investments
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
(restated)
-0.1
2016
€m
-3.1
0
ZDB Cloud Exchange GmbH in Liquidation
-3.2
0
0.2
0
0.1
0.2
0.3
0.3
1.8
1.8
Zimory GmbH in Liquidation
Digital Vega FX Ltd
LuxCSD S.A.
Deutsche Börse Commodities GmbH
Tradegate AG Wertpapierhandelsbank
€m
2015
16.3
€m
Other interest and similar income
2016
€m
(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
Deutsche Börse Group financial report 2016
202
201
1) Measured at amortised cost
63.6
79.2
1.9
0.3
0.3
0.6
Total
2015
Other interest expense")
€m
227.6
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).
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.
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).
227.5
284.5
1.3
-9.1
-1.4
0.4
293.2
€m
Interest expense on current liabilities"
1.6
0
0.1
Interest income on non-current loans classified as "loans and receivables"
Total
0
0.1
Income from valuation of derivatives
0.6
0.3
Income from available-for-sale securities
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
4.6
0.3
6.1
(restated)
Interest expense from negative interests")
1.1
2.8
Transaction costs of non-current liabilities"
2.8
2.8
Interest-equivalent expenses for derivatives held as hedging instrument¹
1.3
2.9
Expenses from the unwinding of the discount on pension provisions
6.3
11.9
Interest expense on taxes
49.6
56.3
Interest expense on non-current loans¹)
€m
2015
2016
€m
Composition of financial expense
Amortisation
1,941.6
1,194.2
-256.1
-149.5
-624.5
0
0
0
-1.5
-9.1
1.3
-148.4")
-248.1
64.4
68.4
Deferred taxes
set off
Market Data + Services
-20.4
Total
62.5
-43.2
148.3
20.4
43.2
191.5
0
82.9
-1.1
0
-0.2
0
0
Losses carried
forward
1.3
87.7
0
0
0.2
30.0
12.3
56.26)
0
Exchange-rate
differences
0
0
Gross amounts
0
0
0
2015
€m
Expected income taxes derived from earnings before tax
279.1
228.3
Tax losses utilised and loss carryforwards not recognised for tax purposes
-0.7
0.7
Recognition of deferred taxes in respect of unrecognised tax loss carryforwards
-0.7
-0.5
Change in valuation allowance for deferred tax assets
-4.0
0
Tax increases due to other non-tax-deductible expenses
13.6
11.0
Effects of different tax rates
12.9
1.6
€m
0
2016
Reconciliation from expected to reported tax expense
0
-235.7
-581.3
-1.5
-9.1
1.3
-248.1
68.4
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)
2) Disposal 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
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
5) Separate disclosure in the consolidated statement of changes in equity under "revaluation surplus"
6) Disposal relating to the deconsolidation of U.S. Exchange Holdings, Inc.
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
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).
(restated)
Effects from changes in tax rates
€m
pensions and
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
-396.0
0
-197.83)
0
-40.7
1.7
1.7
Other liabilities
0.6
0.75)
0
-2.5
0
0
0
1.7
3.5
current assets
Other non-
3.3
24.04)
1.1
-42.2
-1.7
-20.8
Provisions for
о
price allocation
-3.9
1.9
0
0
0
25.7
5.8
Other provisions
0.1
-3.0¹)
-3.1
-1.1
0
0
0
56.8
60.9
benefits
other employee
18.02)
0
0
liabilities
from purchase
Intangible assets
-5.02)
7.5
1.3
0
-38.3
-34.6
0
0
Intangible assets
0
-6.2
10.9
0
0
-1.8
9.1
0
Interest-bearing
0
-0.1
-15.9
104.9
Disposals
0
-3.6
-0.1
-1.7
0
-5.4
Reclassifications
6.2
27.5
0
-33.8
0.1
0
Exchange rate differences
-0.1
-1.3
-21.1
0.1
-0.2
78.2
11.7
7.6
Disposals from change in
scope of consolidation4)
-0.2
-2.5
-16.7
0
-0.2
-19.6
Reclassification into
"assets held for sale"5)
-5.5
-46.7
-153.8
-5.8
-1,741.2
-1,953.0
Additions
14.9
0
4.3
-46.9
Historical cost as at
Other
intangible
assets
Total
€m
€m
Historical cost as at 31 Dec 2016
brought forward
260.6
775.9
2,721.1
190.8
931.5
4,879.9
Amortisation and impairment losses
as at 1 Jan 2015
194.5
542.2
10.7
0
account and
construction
in progress"
€m
-69.6
€m
software
€m
31 Dec 2016
260.6
775.9
2,721.1
190.8
931.5
4,879.9
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.
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.
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
Goodwill
Tax decreases due to dividends and income from the disposal of equity investments
Other
0
0
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
2,235.7
100.2
2,174.4
5,468.1
Acquisitions from business
Purchased
combinations²)
Internally
11. Intangible assets
-13.7
-0.3
1.6
Income tax expense arising from current year
284.1
228.9
Prior-period income taxes
0.4
-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
Notes
Consolidated balance
sheet disclosures
Consolidated balance sheet disclosures
Intangible assets (part 1)
3.3
0.3
554.2
0
Exchange rate differences
0.8
4.8
119.6
0.2
181.3
306.7
Historical cost as at
31 Dec 2015
245.3
790.8
2,909.5
154.1
2,715.3
6,815.0
Acquisitions through
business combinations³)
0
0
15.3
-38.7
37.7
0.8
359.6
930.2
Additions
13.5
7.0
0
91.6
0
112.1
Disposals
-1.0
-1.1
0
0
0
-2.1
Reclassifications
1.0
0
49.2
0.1
100.2
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
4.0
2) Thereof €0.2 million for 2015
2016
2015
Total
0.6
0
0.2
0.6
1.1
0.3
0.9
0.8
1.3
1.8
3.4
1.82)
3.2
2.0
3.0¹
€m
€m
€m
€m
Germany
Total
Germany
1.6
Cost of agency agreements
4.1
Cost of exchange rate differences
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
0.5
€m
264.9
17.0
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
25.8
Costs for IT services providers and other consulting services
26.5
43.4
52.2
Non-recoverable input tax
66.6
70.3
Premises expenses
97.5
102.2
IT costs
250.5
Travel, entertainment and corporate hospitality expenses
5.9
3.5
6.2
Clearstream
4.6
7.9
11.3
19.0
4.4
4.0
9.9
9.9
Other Xetra software
34.0
0
1.0
1.9
CCP releases
0.2
3.9
0.4
7.2
Trading platform T7 for Xetra/Eurex
Xetra
39.5
0
27.1
48.3
20.5
75.8
4.1
0
1.0
0
1.6
GSF
1.6
2.1
3.4
20.5
2.8
10.4
8.1
21.2
15.7
Connectivity
16.7
15.1
27.3
21.7
Custody
Investment funds
81.8
Collateral Management and Settlement
58.3
EurexOTC Clear
EEX software
Eurex Clearing Prisma
Trading platform T7 for Xetra/Eurex
Eurex
(restated)
2015
€m
€m
€m
2015
2016
€m
360T
(restated)
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
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.
3.5
thereof capitalised
Other Eurex software
2016
8.8
5.4
6.8
6.5
10.9
9.9
0.6
2.5
0.6
15.0
8.3
33.6
16.3
5.2
6.9
9.6
10.3
2.1
24.4
7.2
3.2
3.6
5.4
3.6
0
Market price changes recognised in other comprehensive income
0
-0.6
0
Other fair value changes recognised in profit or loss
0
0
0
5.3
0
0¹)
0.3
Market price changes recognised in profit or loss
-5.8
0
0
-1.0
Reclassifications
0.4
-58.9
9.2
-0.8
0
16.6
-0.7
Revaluation as at 31 Dec 2015
0
6.4
0
-3.2
-0.9
0
0
0
Net income from equity method measurement
-1.3
0
0
0
Currency translation differences recognised in equity
0.3
4.4
0
0
Currency translation differences recognised in profit or loss
-0.3
0
0
Other fair value changes recognised in equity
Acquisitions from business combinations
0
Disposals/(additions) of impairment losses
-0.4
5.3
0
0
Currency translation differences recognised in profit or loss
0.3
0
-0.1
0.5
Other fair value changes recognised in equity
1.1
1.0
0
0
Other fair value changes recognised in profit or loss
0
-40.9
0
0
Market price changes recognised in other comprehensive income
135.1
6.2
0
Currency translation differences recognised in equity
Reclass into "assets held for sale"
0
0
Dividends
-16.6
- 10.0
2.3
-1.5
0
0
0
0
0
-0.8
0
0.2
0
0
0
-5.0
-1.8
0
0
0
Net income from equity method measurement
0.4
0
0
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
-3.3
0
-6.4
14.1
29.8
771.5
14.3
-0.1
-17.9
0
-5.2
Addition/(reversal) premium/discount
0
0
-1.7
0
Reclassifications
-3.5
62.5
-62.2¹
-0.3
Exchange rate differences
0.4
7.5
0
6.8
-67.7
1,301.9
75.4
2.2
113.5
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.
0
Consolidated balance
sheet disclosures
215
13. Financial investments
Financial assets
Investments in
associates and
joint ventures
Other equity
investments
€m
€m
Receivables
and securities
from banking
business
€m
Other financial
instruments
and loans
€m
Historical cost as at 1 Jan 2015
Acquisition through business combinations
Additions
Disposals
111.9
147.5
29.5
-6.6
2.1
55.1
-0.1
Reclassifications
Exchange rate differences
Historical cost as at 31 Dec 2016
-1.0
0
-586.8¹)
1.0
-0.2
3.4
14.7
-0.9
58.0
165.7
1,597.6
32.6
Revaluation as at 1 Jan 2015
Acquisition through business combinations
Disposals/(additions) of impairment losses
Dividends
-7.7
19.3
3.1
-2.2
Historical cost as at 31 Dec 2015
0
Addition/(reversal) premium/discount
229.4
2,016.3
34.0
Acquisitions from business combinations
-0.6
0
0
0
Reclass into "assets held for sale"
0
-32.3
0
-8.1
Additions
5.1
5.4
155.6
12.8
Disposals
-0.4
-40.2
0
-6.1
0
Market price changes recognised in profit or loss
0
0
0
1,063.8
0
0
0
0
€m
Total
STOXX
€m
Zertifikate
€m
0
€m
Fund Services
MD+S segment
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.
0.1
0
€m
0
0
987.4
0
15.6
0
18.4
0
0
0
0
32.6
0
0
0
32.6
33.3
0
0
0
0
529.0
0
0
0
0
0
0
0.3
0
0
APX Holding group
0.1
0
0
0
Powernext/EPEX SPOT group
0
0
0
0
Börse Frankfurt Zertifikate
0.3
European Energy Exchange
Exchange licences
0.1
0
0
0
Gaspoint Nordic
0
0
0
0
0
0
Trade names
0
0
5.8
0
0
7.2
0
0
0
0
19.9
0
0
0
0
0
0
PEGAS CEGH Gas Exchange Services
Power Exchange Central Europe
European Energy Exchange
Powernext/EPEX SPOT group
360T group
STOXX
0.1
15.6
9.2
0
Composition of receivables and securities from banking business
Fixed-income securities
issued by regional or local public bodies
issued by other public bodies
issued by multilateral banks
issued by supranational issuers
Total
31 Dec 2016
31 Dec 2015
€m
€m
523.9
498.0
650.5
955.4
352.9
487.3
77.5
77.9
1,604.8
2,018.6
Securities from banking business include financial instruments listed on a stock exchange amounting to
€1,604.8 million (2015: €2,018.6 million).
14. Derivatives and hedges
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.
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".
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.
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.
0
-0.4
Reclassifications
0
0
-1.2
0
Revaluation as at 31 Dec 2016
-23.7
89.7
7.2
-6.2
Carrying amount as at 31 Dec 2015
Carrying amount as at 31 Dec 2016
1) Reclassified as current receivables and securities from banking business
38.5
34.3
219.4
255.4
2,018.6
1,604.8
32.5
26.4
216
Deutsche Börse Group financial report 2016
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.
-6.7
0.1
0
4.0
0
0
4.0
0
4.6
0
4.6
0
0
6.6
0
0
0
0
8.9
0
0
35.9
8.9
9.2
0
0
3.7
0
0
0
0
0
0.2
0
0
0
0.2
0.5
0
0
0
0.5
1.5
0
0
0
0
1.7
0
0
0
0
3.7
0
109.7
0
68.7
0.2
6.5
8.94)
2.0
6.8
5.5
1) CAGR compound annual growth rate
2) Without depreciation, amortisation and impairment losses
3) Before tax
4) After tax
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Consolidated balance
sheet disclosures
Key assumptions used for impairment tests in 2015
(Group of) cash-
generating unit(s)
Recoverable
amount
CAGR¹)
Risk-free
interest rate
Market risk
Perpetuity
Operating
premium
fair value less costs
of disposal
%
2.2
2.0
fair value less costs
of disposal
0.2
6.5
7.74)
2.0
2.9
0.4
Fund Services
fair value less costs
of disposal
0.7
6.5
12.34)
2.0
6.3
5.7
Börse Frankfurt
Zertifikate
STOXX
fair value less costs
of disposal
0.2
6.5
11.54)
3.0
MD+S segment
%
growth rate
1.0
7.1
3.7
360T
fair value less costs
of disposal
1.2
6.5
8.74)
2.5
18.9
17.5
EEX
fair value less costs
of disposal
1.1
6.5
9.34)
1.0
2.8
1.6
MD+S segment
fair value less costs
9.34)
Discount rate
%
6.5
of disposal
Net revenues
costs²)
%
%
%
Eurex Core + ISE
fair value less costs
of disposal
1.2
6.5
9.34)
1.0
6.7
3.4
Clearstream Core
value in use
1.2
6.5
11.03)
1.5
3.0
4.3
Eurex Core
fair value less costs
1.2
of disposal
4.3
1.0
19.9
0
0
0
0
7.2
0
0
0
0
5.8
0
0
0
0
0.3
0
0
0
0
0.1
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.
212
0
Deutsche Börse Group financial report 2016
0
0
0
0
0.3
0
0
0.2
0
0.2
0
0
0
0
0.1
0
0
0
0
0.1
0
0
0
420.0
420.0
0
1.3
The following tables indicate material assumptions used for impairment tests for the years 2016
and 2015:
(Group of) cash-
fair value less costs
of disposal
0.7
6.5
8.54)
1.0
7.2
6.6
360T
fair value less costs
of disposal
0.7
6.5
8.34)
2.5
10.3
1.6
EEX
fair value less costs
of disposal
0.7
6.5
9.04)
Eurex Core
Key assumptions used for impairment tests in 2016
3.2
1.0
generating unit(s)
CAGR¹)
Recoverable
amount
Risk-free
interest rate
Market risk
Discount
premium
%
%
rate
%
Perpetuity
growth rate
Net
Operating
revenues
costs²)
%
%
%
Clearstream Core
value in use
0.7
6.5
10.43)
3.5
0.7
1.1
8.54)
79.6
357.8
2.2
439.6
Depreciation and impairment losses as at 1 Jan 2015
42.5
260.1
0
302.6
Amortisation
6.8
30.4
0
37.2
Disposals
0
-11.2
0
-11.2
Reclassifications
0
0
0
-1.5
0
0
-0.8
-2.0
Reclassification into "assets held for sale"¹)
-11.5
-25.2
0
-36.7
Additions
4.6
40.9
4.2
49.7
Disposals
-5.0
-5.6
-0.7
-11.3
Reclassifications
Exchange rate differences
Historical costs as at 31 Dec 2016
1.7
0.4
-2.0
0.1
-0.7
0
Exchange rate differences
2.0
Disposals
-4.6
-5.4
0
-10.0
Reclassifications
-0.1
0
0
-0.1
Exchange rate differences
-0.5
-0.5
0
-1.0
Depreciation and impairment losses as at 31 Dec 2016
43.7
282.4
0
326.1
Carrying amount as at 31 Dec 2015
Carrying amount as at 31 Dec 2016
40.3
-29.0
1.0
0
-8.4
0
3.0
Depreciation and impairment losses as at 31 Dec 2015
50.3
281.3
0
331.6
Amortisation
6.6
29.4
0
36.0
Impairment losses
0.4
0
0
0.4
Disposals from change in scope of consolidation
0
-1.8
0
-1.8
Reclassification into "assets held for sale"¹)
-20.6
6.5
-2.0
Disposals from change in scope of consolidation
9.64)
2.5
3.1
1.9
ISE
STOXX
value in use
2.8
6.5
14.13)
2.5
1.4
0.8
fair value less costs
of disposal
1.1
6.5
9.54)
2.0
10.3
3.7
1) CAGR = compound annual growth rate
2) Without depreciation, amortisation and impairment losses
6.5
3) Before tax
1.2
fair value less costs
2.0
3.9
2.4
Fund Services
fair value less costs
of disposal
1.2
6.5
12.74)
2.0
11.6
8.9
Börse Frankfurt
fair value less costs
Zertifikate
of disposal
1.1
6.5
12.84)
2.0
1.5
2.2
Infobolsa
of disposal
0
4) After tax
213
32.0
2.2
42.3
Disposals
0
-11.3
-2.7
-14.0
Reclassifications
0.2
1.9
-2.1
0
Exchange rate differences
1.6
2.7
0.1
4.4
Historical costs as at 31 Dec 2015
90.6
350.0
0.7
441.3
8.1
Even in case of a reasonably possible change of the parameters, none of the above-mentioned CGUs, or
groups of CGUs, would be impaired.
Additions
2.0
214
Deutsche Börse Group financial report 2016
12. Property, plant and equipment
Property, plant and equipment
Computer
Fixtures and
fittings
€m
hardware,
operating and
office
equipment
€m
Payments on
account and
construction in
progress
Total
€m
€m
Historical costs as at 1 Jan 2015
79.9
322.4
1.2
403.5
Acquisitions through business combinations
0.8
2.3
5.1
Indexium
0
0
-21.2
Balance as at 31 Dec 2016
1,063.8
987.4
529.0
33.3
32.6
75.0
2,721.1
Other intangible assets
Balance as at 1 Jan 2016
0
474.5
250.1
67.2
438.5
126.0
1,356.3
Acquisitions through business
combinations
0
-1.1
0
0
0
32.6
78.8
2,898.8
Acquisitions through business
combinations
0
0
0
3.3
3.3
0
Reclassification into "assets
0
-153.8
0
0
0
-6.0
-159.8
Exchange rate differences
0
-20.1
held for sale"
0
0
0
-27.8
Impairments
Exchange rate differences
Balance as at 31 Dec 2016
0
0
0
0
0
-0.3
-7.2
-0.3
-12.5
0
0
0
0
-12.5
с
0
240.0
62.5
0
33.3
-3.1
-10.1
4.3
4.3
Reclassification into "assets
held for sale"
0
-459.3
0
0
0
-0.9
-4.7
-460.2
0
0
0
0
0
0.1
0.1
Amortisation
0
-2.7
Additions
529.0
1,161.3
1,063.8
2.3-6.5
360T trading platform
14.5
14.1
5.0-7.0
6.0-7.0
C7 Release 3.0
14.3
13.4
6.4
4.0-5.0
n.a.
9.9
12.1
5.0-6.0
6.4-6.9
ISE trading platform including applications
7.5
20.7
2.0
2.0-5.0
Clearstream
Eurex Clearing Prisma Release 2.0
TARGET2-Securities
29.0
Eurex Clearing Prisma Release 1.0
0
0
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Consolidated balance
sheet disclosures
Carrying amounts of material software and construction in progress as well as remaining amortisation
periods of software
Carrying amount as at
Remaining amortisation period
as at
୮
T
23.2
31 Dec 2016
€m
€m
31 Dec 2016
years
31 Dec 2015
years
Eurex
Derivatives trading platform T7
26.8
29.8
2.9-5.9
4.9-7.0
31 Dec 2015
435.4
89.0
n.a.
n.a.
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).
207
208
Deutsche Börse Group financial report 2016
Goodwill and other intangible assets from business combinations
Changes in goodwill and other intangible assets classified by business combinations
Clearstream
ISE
360T
n.a.
EEX
€m
€m
€m
€m
€m
Miscella-
neous
€m
Total
€m
Goodwill
Balance as at 1 Jan 2016
STOXX
71.8
6.5
TARGET2-Securities
n.a.
1CAS Custody & Portal
24.7
9.6
n.a.
n.a.
MALMO
17.8
20.8
4.9
10.0
5.0
10.1
10.1
n.a.
n.a.
One CLS Settlement & Reporting (1 CSR)
11.6
5.1
n.a.
n.a.
Xetra
Single Network
122.0
0
0
EEX
€m
€m
Clearstream
1,063.8
0
0
0
International Securities Exchange
987.4
0
360T group
47.3
292.5
189.2
0
European Energy Exchange
0
0
0
33.3
STOXX
0
360T
0
Eurex Core
€m
Clearstream
0
-0.3
0
Exchange rate differences
-3.5
-0.1
-8.9
0
-12.5
Balance as at 31 Dec 2016
0.7
453.8
400.9
4.5
859.9
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.
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:
210
Deutsche Börse Group financial report 2016
Allocation of goodwill and other intangible assets with indefinite useful lifes to CGUS
Asset
Goodwill
(Group of) cash generating unit(s)
Core
€m
0
0
Powernext/EPEX SPOT group
0
0
Clearstream Fund Services
0
0
0
0
Need to Know News
0
0
0
0
Power Exchange Central Europe
0
0
0
1.7
PEGAS CEGH Gas Exchange Services
0
0
0
1.5
Kingsbury
0
0
0
6.6
0
0
0
18.4
Clearstream Global Securities Services
0
0
0
0
Impendium
0
0
0
0
Market News International
0
0
0
0
APX Holding group
0
0
0
Börse Frankfurt Zertifikate
Impairments
-0.3
-0.9
757.5
455.5
136.9
Balance as at 1 Jan 2016
€m
€m
€m
Total
assets
intangible
Miscellaneous
6.4
names
€m
Trade
Exchange
licences
Changes in other intangible assets by category
Other intangible assets are divided into the following categories:
209
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
859.9
-27.8
0
0
€m
1,356.3
Member and
customer
relationships
business combinations
-0.3
0
Acquisitions through
Amortisation
0.1
0.1
-26.6
0
0
Additions
-460.2
-1.2
0
-324.6
-1.7
-132.7
held for sale"
Reclassification into "assets
4.3
0.1
3.8
0.4
0
0
0
0
-1.3
-0.5
0
7.3
Deferred taxes
-0.1
111.4
103.7
Balance as at 31 Dec 2016 (gross)
-40.8
Balance as at 1 Jan 2015
0.6
(financial assets)
Reversals
0
-3.7
0
Balance as at 31 Dec 2015
Balance as at 1 Jan 2015 (gross)
€m
business
banking
Other equity
investments
(financial assets)
€m
reserves from fair
value
-1.2
€m
measurement
Additions
0
103.7
6.2
Securities from
Fair value measurement
Changes from defined benefit obligations
Reclassifications
Reversal to profit or loss
Balance as at 31 Dec 2015 (gross)
Changes from defined benefit obligations
Fair value measurement
Reclassifications
Reversal to profit or loss
1.7
3.5
0
0
0
0
0
−1.1
0
0
0
0
0
0
103.7
10.8
2.4
0
0
0
141.4
9.1
Recognition of
hidden
long-term
Deutsche Börse Group financial report 2016
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
2.2
0
0
0.3
1.4
0.7
31 Dec 2015
€m
404.7
889.3
43.2
64.1
Composition of authorised share capital
32.9
21.7
25.8
3.5
3.5
3.4
1.6
26.3
Revaluation surplus
Amount in €
Authorised share
capital |¹)
224
223
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.
Revaluation surplus
There were no further rights to subscribe for shares as at 31 December 2016 or 31 December 2015.
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.
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.
Consolidated balance
sheet disclosures
Notes
0
Executive and Supervisory Boards | Management report | Governance | Financial statements
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.
Contingent capital
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.
■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).
15 May 2017
6,000,000 16 May 2012
13,300,000 11 May 2016
Expiry date
10 May 2021
Authorised share
capital II¹)
19,300,000 13 May 2015
12 May 2020
Existing shareholders' pre-emptive rights may be disapplied
for fractioning and/or may be disapplied if the share issue is:
Date of authori-
sation by the
shareholders
n.a.
against non-cash contributions for the purpose of acquiring
companies, parts of companies, interests in companies, or
other assets.
Authorised share
capital III¹)
38,600,000 13 May 2015
12 May 2020
n.a.
Authorised share
capital IV
■ 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.
-4.2
0
Additions
42.6
2.4
0
-0.3
36.9
- 183.8
- 3.5
0.3
1.5
-32.1
0
8.7
0.1
0
42.9
0
0
1.2
0
140.5
0
-6.0
-1.1
19. Restricted bank balances
-27.3
-27.3
0
0
0
- 44.2
0
0
0
0
0.1
1.1
-0.1
0.8
4.6
50.3
1.0
- 0.1
- 0.4
-58.3
0
-0.7
-0.1
0
24.0
7.8
0
0
0.6
-0.1
0
-0.7
-0.1
- 156.5
-4.6
0
1.7
42.5
38.9
0
0
-0.4
- 6.2
0.1
1.5
Other financial
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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.
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.
Regulatory capital requirements and regulatory capital ratios
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).
Accumulated profit
5.3
67.2
103.7
1.7
6.6
103.7
2.2
1.2
103.7
0
16.2
0
Reversals
0
-56.2
instruments (financial
-1.3
0
- 44.2
- 2.0
Balance as at 1 Jan 2015 (net)
Balance as at 31 Dec 2015 (net)
Balance as at 31 Dec 2016 (net)
Balance as at 31 Dec 2016
-0.7
assets)
Current securities from
banking business
€m
2.8
0
2.8
0
0
8.9
0
8.9
0
0
-0.3
0
-8.9
0.2
0.4
3.2
3.2
Cash flow hedges
Defined benefit
obligations
Total
€m
€m
€m
€m
1.1
-9.0
-159.7
-58.8
0
0
0
-0.1
Total
220
Claims against insurance companies
218
0
0
8.9
0
Cash flow hedges as at 31 December
Closed-out
6.0
Amount recognised in profit or loss during the year
-8.9
-6.0
Amount recognised in other comprehensive income during the year
0
0
Deutsche Börse Group financial report 2016
Cash flow hedges as at 1 January
€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.
-6.6
-4.5
-117.1
-114.0
-15.9
-5.3
1.1
0.2
- 2.5
- 133.5
41.5
€m
Hedges of a net investment
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.
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.
thereof current
thereof non-current
Total
Others
Options
Repo transactions
Composition of financial instruments held by central counterparties
15. Financial instruments held by central counterparties
Consolidated balance
sheet disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
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).
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).
2,621.4
23.3
-12.4
-2.4
€m
3,073.8
65.4
Derivatives held for trading
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 transactions: outstanding positions (currency swaps)
Quantity
Notional value
Positive fair value
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.
Negative fair value
୮
31 Dec 2016
31 Dec 2015
45
60
€m
€m
Currency swaps
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.
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.
225
0
0
0
28
0
0
short-term
Cash flow hedges
long-term
0
0
0
0
short-term
16
0
0
short-term
Total
0.1
0
-1.5
0
0
16
23.3
28, 30
-9.1
0
-6.0
30
65.7
31 Dec 2016
€m
0
€m
226
Deutsche Börse Group financial report 2016
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".
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.
Since 1 January 2014, the own funds requirements for credit institutions have been primarily subject to
the EU-wide requirements of the CRR as well as the supplementary national regulations implementing
CRD IV, which transposed the “Basel III" rules into European law.
All companies that are directly or indirectly (i.e. by means of EMIR requirements) subject to the CRR
own funds requirements, are exempted from compliance with trading book requirements. Market risk
exposures consist only of relatively small open foreign currency positions. The companies concerned
uniformly apply the standardised approach for credit risk. As a result of the specific business of the
credit institutions and central counterparties belonging to Deutsche Börse Group, their recognised assets
are subject to sharp fluctuations. This leads to correspondingly volatile total capital ratios at the
Clearstream companies. The volatility of the ratio is subject to major fluctuations on a day-to-day basis
in the course of the year. Due to a high degree of collateralised or zero-weighted cash investments, the
own funds requirements for credit and market risk exposures of Eurex Clearing AG and European
Commodity Clearing AG are relatively stable despite volatile total assets in the course of the year.
To calculate operational risk, Eurex Clearing AG and European Commodity Clearing AG use the basic
indicator approach, while the Clearstream companies apply the advanced measurement approach
(AMA).
Due to the specific arrangements for the two investment firms, Eurex Repo GmbH and 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.
None of the Group companies subject to solvency supervision has Tier 2 regulatory capital.
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
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
€m
€m
31 Dec 2015
31 Dec 2016
31 Dec 2015
31 Dec 2016
€m
0
Liabilities
Assets
Note
long-term
Fair value hedges
Derivatives (fair value)
217
Note
Miscellaneous
31 Dec 2015
€m
111,919.0
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
65.4
1.2
15.2
Utilisation
64.1
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
592.3
Reversal
Balance as at 31 Dec 2015
Additions
Derivatives
Creditors with debit balances
Guarantees and deposits
Incentive programme
Interest receivable
Prepaid expenses
Tax receivables (excluding income taxes)
Other receivables from CCP transactions
31 Dec 2016
€m
Composition of other current assets
18. Other current assets
Consolidated balance
sheet disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
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.
6.0
-1.8
Acquisitions from business combinations
Utilisation
Reversal
Balance as at 31 Dec 2016
€m
7.6
Available-for-sale debt instruments
1.5
0
-3.0
6.3
1.6
0
-0.1
0.2
Overdrafts from settlement business
Margin calls
Money market lendings
repo transactions
Financial liabilities from
111,919.0
87,508.7
-23,239.4
-18.6
- 15,931.9
135,158.4
103,440.6
Financial assets from repo
transactions
31 Dec 2015
€m
31 Dec 2016
€m
31 Dec 2015
€m
31 Dec 2016
€m
€m
31 Dec 2015
31 Dec 2016
€m
24,385.1
1,872.4
21,413.7
132.1
113,766.2
133,464.8
5,856.6
107,909.6
-103,010.4
7,175.2
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.
The following table gives an overview of the effects of offsetting the financial instruments held by
central counterparties:
Gross presentation of offset financial instruments held by central counterparties¹)
Gross amount of financial
instruments
Gross amount of offset financial
instruments
Net amount of financial
instruments
126,289.6
87,508.7
-134,875.3
23,239.4
Balances on nostro accounts
Reverse repurchase agreements
Loans to banks and customers
€m
31 Dec 2015
31 Dec 2016
€m
Composition of current receivables and securities from banking business
Deutsche Börse Group financial report 2016
Derivatives held for trading
219
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.
16. Current receivables and securities from banking business
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.
-21,413.7
-24,385.1
45,874.4
50,488.0
-87,078.5
-111,635.9
Financial assets
from options
74,873.1
67,288.1
15,931.9
-50,488.0
24,385.1
21,413.7
Financial liabilities
from options
-74,873.1
-67,288.1
-45,874.4
0
23.3
65.8
Proposal on the appropriation of the unappropriated surplus
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
31 Dec 2015
€m
31 Dec 2016
€m
31 Dec 2015
€m
31 Dec 2016
31 Dec 2015
€m
€m
0.2
0.2
0.8
0.8
0.8
0.8
0.4
0.4
4.6
5.6
4.6
5.6
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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.
42.5
53.4
264.8
31 Dec 2016
31 Dec 2015
€m
€m
81.2
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
48.5
0
0
-13.0
0
-100.0
-50.0
-7.5
-6.0
264.8
Consolidated balance
sheet disclosures
231
Compliance with own funds requirements
Eurex Bonds GmbH
Eurex Repo GmbH
31 Dec 2015
31 Dec 2016
31 Dec 2015
€m
€m
€m
€m
3.9
3.4
6.4
6.4
0.6
0.6
10.2
10.1
1.4
2.2
2.1
3.7
10.8
12.3
39.9
26.4
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.
232
Deutsche Börse Group financial report 2016
21. 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 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.
Net profit for the period 2016 is higher than last year.
31 Dec 2016
T
Regulatory equity
Own funds requirements
Own funds requirements
Regulatory equity
Equity ratio
31 Dec 2016
€m
31 Dec 2015
€m
31 Dec 2016
€m
31 Dec 2015
€m
31 Dec 2016
%
31 Dec 2015
%
0.8
0.8
10.4
9.5
31 Dec 2015
€m
1,300.0
4.6
5.6
7.0
7.0
152.2
124.0
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.
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 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.
Compliance with own funds requirements
REGIS-TR S.A.
Eurex Clearing Asia Pte. Ltd.
Cleartrade Exchange Pte. Limited
Powernext SA
1,264.7
€m
31 Dec 2016
European Commodity Clearing AG
€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
113.6
Eurex Clearing AG
66.7
€m
65.8
31 Dec 2015
31 Dec 2015
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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
31 Dec 2016
31 Dec 2016
14.5
19.5
81.2
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
Own contribution to default fund
EMIR capital adequacy ratio
Eurex Clearing AG
22.5
998.1
1,042.4
353.5
85.3
European Commodity
Clearing AG
6.0
4.5
1.3
3.0
7.3
7.5
Regulatory capital ratios
Own funds requirements
Regulatory equity
Total capital ratio
31 Dec 2016
Net profit for the period
€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
Clearstream Holding group
Clearstream Banking S.A.
371.4
31 Dec 2015
€m
Appropriation to other retained earnings in the annual financial statements
Unappropriated surplus
31 Dec 2016
Acquisitions from business combinations
1.9
1.9
Losses from changes in financial assumptions
-7.0
-7.0
Experience gains
-6.1
-6.1
-13.1
9.6
-3.5¹)
Effect of exchange rate differences
2.3
-1.8
0.5
Contributions:
Employers
Plan participants
Benefit payments
Withdrawal of plan assets
Tax and administration costs
Balance as at 31 Dec 2015
Acquisitions from business combinations
Current service cost
Interest expense/(income)
-32.0
-32.0
1.0
7.7
-1.0
7.7
Remeasurements
The present value of defined benefit obligations can be reconciled as follows with the provisions reported
in the consolidated balance sheet:
Changes in net defined benefit obligations
Balance as at 1 Jan 2015
Acquisitions from business combinations
Current service cost
Interest expense/(income)
Past service cost and gains and losses on settlements
Present value
of obligations
€m
Fair value of
plan assets
Total
€m
€m
430.0
-284.4
145.6
3.0
-1.4
1.6
21.7
21.7
8.9
-6.1
2.8
-0.6
-0.6
30.0
-6.1
23.9
Return on plan assets, excluding amounts already recognised in interest income
0
-9.7
9.6
-2.9
27.4¹)
0.2
-0.2
0
Effect of exchange rate differences
Contributions:
Employers
Plan participants
Benefit payments
Tax and administration costs
Balance as at 31 Dec 2016
1) Thereof €0.1 million (2015: €0.3 million) in the offsetting item for non-controlling interests
-29.2
-29.2
0.9
-0.9
0
-13.7
13.7
0
-0.8
2.9
2.1
492.6
-324.7
167.9
In financial year 2016, employees converted a total of €5.3 million (2015: €2.6 million) of their
variable remuneration into deferred compensation benefits.
30.3
-0.4
-0.4
Experience gains
-0.1
4.7
4.7
-0.8
0.8
0
442.7
-302.0
140.7
-0.3
0.3
0
24.0
24.0
Deutsche Börse Group financial report 2016
9.3
2.9
33.3
-6.4
26.9
Remeasurements
Return on plan assets, excluding amounts already recognised in interest income
-2.9
-2.9
Losses from changes in demographic assumptions
-0.8
-0.8
Losses from changes in financial assumptions
31.5
31.5
-6.4
236
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.
4.4
31 Dec 2015
€m
Present value of defined benefit obligations
that are at least partially funded
405.1
62.6
21.0
488.7
439.5
Fair value of plan assets
-262.5
-45.5
-16.7
-324.7
-302.0
Funded status
142.6
17.1
4.3
164.0
137.5
Present value of unfunded defined benefit
obligations
3.1
0.7
0.1
3.9
Net liability of defined benefit obligations
145.7
17.8
31 Dec 2016
€m
Switzerland
Other
€m
€m
-108.2
445.0
Proposal by the Executive Board:
Distribution of a regular dividend to the shareholders of €2.35 per share for 186,805,015 no-par value shares carrying
dividend rights
439.0
Appropriation to retained earnings
6.0
No-par value shares carrying dividend rights
Number of shares issued as at 31 December 2016
Number of treasury shares
Number of shares outstanding as at 31 December 2016
Number
193,000,000
-6,194,985
186,805,015
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.
22. Provisions for pensions and other employee benefits
Defined benefit pension plans
The defined benefit obligations of the companies of Deutsche Börse Group relate primarily to final salary
arrangements and pension plans based on capital components, which guarantee employees a choice of
either lifelong pensions or capital payments on the basis of the final salary paid. In Switzerland, there
are guaranteed defined contribution plans. Deutsche Börse Group uses external trust solutions to cover
some of its pension obligations.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Consolidated balance
sheet disclosures
233
Net liability of defined benefit obligations
Total
Total
Germany
Luxembourg
€m
553.2
167.9
Impact of minimum funding requirement/asset
ceiling
0.3
131.6
124.6
Pensioners or surviving dependants
97.8
0.7
0
98.5
81.1
408.2
63.3
21.1
492.6
442.7
Essentially, the retirement benefits encompass the following retirement benefit plans:
Executive boards of Group companies (Germany and Luxembourg)
Individual commitment plans exist for executive board members of certain Group companies; they are
based on the plan for executives described in the 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.
234
Deutsche Börse Group financial report 2016
Germany
There has been an employee-funded deferred compensation plan for employees of certain Deutsche
Börse Group companies in Germany since 1 July 1999. This plan gives employees the opportunity to
convert parts of their future remuneration entitlements into benefit assets of equal value. The benefits
consist of a capital payment 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.
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.
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
235
Consolidated balance
sheet disclosures
Luxembourg
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.
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.
0.6
3.2
140.7
130.7
237.0
0
0
0
0
0
Amount recognised in the balance sheet
145.7
17.8
4.4
167.9
140.7
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:
Breakdown of beneficiaries
Total
Total
Germany
Luxembourg
€m
€m
Other
€m
31 Dec 2016
31 Dec 2015
€m
€m
Eligible current employees
179.7
62.0
20.8
262.5
Former employees with vested entitlements
€m
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:
Actuarial assumptions
Assumptions
27,777.6
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
237
31 Dec 2016
Consolidated balance
sheet disclosures
Germany
Luxembourg
Switzerland
68.1
€m
€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
Bonuses
Jubilees
Anticipated losses
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
87.2
18.2
11.7
9.4
Reclassification
Changes in the basis of consolidation
Balance as at 1 Jan 2016
Composition of tax provisions
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.
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.
28.5
0
22.0
95.0
131.7
117.0
1.8
3.2
0.6
0.5
9.1
5.4
5.8
5.7
5.9
6.5
9.6
103.2
0.3
-0.2
0
0
0
-8.0
306.2
13.8
7.6
9.6
6.5
85.4
€m
€m
€m
€m
€m
0
Total
provisions
to IHK¹)
Operational claims
Bonuses
€m
Other personnel
Pension obligations
243
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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).
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.
25.5
47.5
78.3
Miscellaneous
Utilisation
0
-9.4
0.1
-0.2
0
0
0
0
-0.1
147.2
5.1
1.2
0.1
0.2
102.7
-25.6
-8.1
-1.4
-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
-0.8
Reversal
Additions
Currency translation
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
Margin deposits
6.1
0.5
2.1
1.3
1.2
2.5
6.5
3.1
5.0
3.5
19.3
7.3
24.7
10.2
35.4
0.6
47.5
Money market lending
Interest liabilities
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
Forward foreign-exchange transactions - held for trading
17.1
498.1
321.9
286.5
349.5
10,867.3
13,024.8
€m
31 Dec 2015
31 Dec 2016
€m
Total
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
Composition of cash deposits by market participants
29. Cash deposits by market participants
Total
125.7
0
76.3
€m
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
-47.7
0
26.2
290.5
0
€m
€m
€m
€m
Total
Other taxes
Income taxes:
prior periods
period
Income taxes:
reporting
Balance as at 31 Dec 2016
Interest
316.7
96.3
56.3
19.2
€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
42.3
Composition of 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
195.1
36.8
0
0
0
0
0.4
0.3
0
0.1
117.8
27. Other current provisions
26,869.0
0
0
3.5
2.4
453.4
2.6
505.4
-2.3
432.3
-2.3
481.4
4.3
461.6
2.5
504.9
Increase by 0.5 percentage points
Reduction by 0.5 percentage points
Increase by one year
Life expectancy
Pension growth
-2.3
432.6
-2.0
482.6
Reduction by 0.5 percentage points
2.9
455.4
2.5
505.0
Increase by 0.5 percentage points
Salary growth
18.8
525.9
19.3
Reduction by one year
479.7
-2.6
431.7
%
€m
31 Dec 2015
31 Dec 2016
Total plan assets
Total not listed
Cash
Qualifying insurance policies
Total listed
Investment funds
Interest rate futures
Equity index futures
Derivatives
Corporate bonds
587.5
Multilateral development banks
Bonds
Composition of plan assets
239
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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".
Switzerland
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.
Luxembourg
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.
Germany
Composition of plan assets
1) Present value of the obligations using assumptions in accordance with the table "actuarial assumptions"
-2.5
Government bonds
Reduction by 1.0 percentage point
-14.8
377.4
0
1.80-2.00
2.00
0
1.50
2.00
Pension growth
1.00
3.50
3.50
1.00
3.00
3.50
Salary growth
Staff turnover rate
0.80
2.20
0.60
1.75
1.75
Discount rate
%
%
%
%
%
%
Switzerland
Luxembourg
31 Dec 2015
Germany
2.20
€m
2.00¹)
n.a.2)
-15.0
418.8
Increase by 1.0 percentage point
442.7
492.6
Discount rate
Present value of the
obligation¹
%
€m
Change
obligation
defined benefit
2015
Effect on defined benefit
obligation
2.00¹
%
2016
defined benefit
obligation
€m
Effect on defined benefit
obligation
Change in actuarial assumption
Sensitivity analysis of defined benefit obligation
Deutsche Börse Group financial report 2016
238
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)
Change
%
270.7
83.4
Balance as at 31 Dec 2016
Interest
Currency translation
Additions
Reversal
Utilisation
Reclassification²)
Changes to the basis of consolidation
Balance as at 1 Jan 2016
Changes in other provisions
23. Changes in other provisions
Deutsche Börse Group financial report 2016
242
In 2017, Deutsche Börse Group expects to make contributions to multi-employer plans amounting to
around €9.5 million.
Recourse and
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).
The expected costs of defined benefit plans amount to approximately €17.1 million for the 2017
financial year, including net interest expense.
1) The expected payments in CHF were translated into euros at the relevant closing rate on 31 December.
153.5
148.1
85.7
83.7
43.1
39.4
Total
More than 5 years up to 10 years
Between 2 and 5 years
13.3
12.6
11.4
Defined contribution pension plans and multi-employer plans
12.4
litigation risks
Restructuring and
efficiency measures
€m
0
0
-0.1
0
14.8
12.1
10.0
1.0
-1.0
0
-14.2
-0.1
-18.9
0
€m
-32.1
-0.4
0.1
0
0.4
0
-0.1
0
0
31.0
35.4
5.0
€m
Stock bonus plans
Interest on taxes
€m
-2.8
2.8
Between 1 and 2 years
€m
7.0
22.6
6.0
18.0
5.1
16.7
87.6
264.7
87.9
285.4
3.2
9.8
4.3
13.9
19.3
0.1
1.0
0.6
0.4
1.1
0.2
0.8
3.0
38.3
2.6
2.6
248.2
229.8
84.0
253.8
0.2
Less than 1 year
6.4
12.1
€m
31 Dec 2015
Expected pension
payments¹
31 Dec 2016
Expected pension
payments¹)
Expected maturities of undiscounted pension payments
The weighted duration of the pension obligations was 17.3 years as at 31 December 2016.
Duration and expected maturities of the pension obligations
241
Consolidated balance
sheet disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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.
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.
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.
39.3
Inflation risk
240
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.
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.
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.
Market risk
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.
Risks
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.
100.0
302.0
100.0
324.7
12.4
37.3
Deutsche Börse Group financial report 2016
111.9
Fair value
Amortised cost
Other bank loans and overdrafts
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
Notes
Consolidated balance
sheet disclosures
Other non-current liabilities
By comparison, the financial assets and liabilities measured at fair value as at 31 December 2015 were
allocated as follows to the hierarchy levels:
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
Level 3
€m
Fair value hierarchy
Non-current financial instruments held by
Contingent purchase price components
-6.0
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
Current financial instruments held by
central counterparties
-6.7
-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
-12.7
0
-107,249.5
0
central counterparties
0
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
Derivatives
134.1
Other equity investments
0
6.1
134.1
0
128.0
6.1
31.4
31.4
0
2,018.6
2,018.6
0
0
128.0
7,175.2
Equity instruments
Total
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
23.3
0
Available-for-sale financial assets
Other non-current assets
0
0
0
0
0
0
0
133,439.8
0
133,439.8
0
Other current assets
0
62.3
2,223.1
0
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
252
Deutsche Börse Group financial report 2016
14, 30
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:
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
Level 1
€m
Level 2
€m
Fair value hierarchy
Level 3
26,869.0
amortised cost
11,669.0
Sight
2015
Trade payables
33
Held for trading
Liabilities at
amortised cost
Fair value
Amortised cost
2.4
12.4
0.1
42.2
Liabilities at
Amortised cost
27,777.6
amortised cost
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
Liabilities at
Amortised cost
471.2
2,223.1
116,022.6
€m
5,856.6
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
6.5
197.4
Debt instruments
190.9
6.5
26.0
26.0
0
0
1,604.8
1,604.8
0
0
592.3
592.3
0
0
5,856.6
Total
Equity instruments
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
Other non-current assets
0.1
Other equity investments
0
0.1
0.3
0
0
0.3
113,602.1
0
113,601.7
0.4
Other current assets
Total
Available-for-sale financial assets
0
13,837.9
62.3
0
0
0
0
0
Other operating expenses
3.6
2.8
0.8
0
0
0
recognised in profit or loss
-0.3
Unrealised capital gains/(losses)
4.3
0
0
0
0
Other operating income
4.3
4.3
0
0
0
0
4.3
Realised capital gains/(losses)
-0.3
0
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.
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.
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
Other operating income
Balance as at 31 Dec 2016
0
0
0
0
1.1
revaluation surplus
Changes recognised in the
3.9
3.1
0.8
0
0
1.1
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.
0
4.3
0.1
revaluation surplus
Changes recognised in the
3.2
0.2
3.0
0
0
0
Other operating income
-0.5
-0.5
0
0
0
0
Other operating expenses
2.7
-0.3
3.0
0
0
0
recognised in income
Unrealised capital gains/(losses)
2.0
0
-4.3
0
0
0
0
0
Reclassification
-0.7
0
0
0
0
-0.7
Disposals
-5.4
0
-3.3
0.3
0.1
0
Additions
-4.4
-6.2
-4.3
0
0
6.1
Balance as at 1 Jan 2016
0.1
-2.5
0
"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.
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.
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
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.
0
253
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
€m
254
Other non-
current
€m
0
Other current liabilities
0
0
0
0
2,112.3
135,686.2
2,112.3
0
0
2,112.3
133,567.8
6.1
Non-current financial instruments held by
6.2
central counterparties
0
Current financial instruments held by central counterparties
125,958.2
0
7,175.2
125,958.2
0
0
Liabilities from banking business
0
0
0
0
7,175.2
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 current
Other current
0
1.8
Financial result
0
0
0
-0.2
0
-0.2
Other operating income
0
0
1.8
0
■ cash deposits by market participants
■ other cash and bank balances
■ 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
■ other current liabilities
current
liabilities
0
0
€m
€m
€m
€m
Balance as at 1 Jan 2015
5.6
0
0
-9.1
-5.9
-9.4
Additions
0
1.7
0
0
0
1.7
Disposals
-1.3
0
0
0
0
-1.3
Realised capital gains/(losses)
0
0
Amortised cost
14, 28
1,009.9
409.3
1,633.7
1,407.3
0
Cash flow hedges
0
0
-160.2
0
0
0
1,331.8
Fair value hedges
0
0
0
0
0
Derivatives held for trading
-1,332.3
-1,008.9
-400.4
-1,620.5
-1,341.7
0
0
Total derivatives and hedges
0
0
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
18,146.9
0
19,989.3
-36,495.9
-69,076.4 -69,804.3
-18,146.9
-19,989.3
0
0
154.3
0
0
0
0
0
-20,717.7
and derivatives held
-0.5
-427.2
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
0.2
€m
4.3
0
0
о
о
0
о
о
7.7
- 0.6
- 16.0
13,837.9
11,669.1
0
1.0
€m
2016
-269.9
65.6
0
Financial guarantee contracts
0
0
0
977.9
0
0
Consolidated balance
sheet disclosures
249
2015
Executive and Supervisory Boards | Management report | Governance | Financial statements Notes
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
Over 5 years
Contractual maturity
0
less financial assets
Financial liabilities and deriv-
28.7
22.7
30.5
89.3
386.4
€m
31 Dec 2015
Total
Miscellaneous
Issued commercial paper
Debtors with credit balances
Liabilities to supervisory bodies
29.3
Special payments and bonuses
Derivatives
Deferred income
Vacation entitlements, flexitime and overtime credits
Interest payable
Tax liabilities (excluding income taxes)
Liabilities from CCP positions
31 Dec 2016
€m
Composition of other current liabilities
30. Other current liabilities
Consolidated balance
sheet disclosures
Notes
Executive and Supervisory Boards | Management report | Governance | Financial statements
Social security liabilities
€m
20.5
18.1
2016
Interest-bearing liabilities
Non-derivative financial
liabilities
Contractual maturity
Underlying contractual maturities of the financial instruments at the reporting date
31. Maturity analysis of financial instruments
Deutsche Börse Group financial report 2016
248
247
330.4
525.7
38.2
22.3
10.5
0
1.9
2.7
2.6
2.9
13.5
4.9
6.2
7.8
6.2
12.7
3.2
95.0
atives held by central counterparties
€m
€m
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
0.1
515.1
42.2
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
central counterparties
0
Not more than 3 months
2016
2015
€m
513.9
380.1
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
Other non-current financial
liabilities
80.6
0
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
82.4
Non-derivative liabilities from
Liabilities at
amortised cost
100.4
994.4
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
669.8
554.1
Trade receivables
Amortised cost
4.7
18
Loans and
receivables
Amortised cost
441.8
924.9
Held for trading
Restricted bank balances
Other cash and bank balances
19
Loans and
Fair value
Amortised cost
2.0
0.3
64.1
Fair value
Non-current financial instruments held by
15
Held for trading
Fair value
central counterparties
Other non-current assets
Held for trading
Loans and
receivables
5,856.6
7,175.2
0.1
0
592.3
8.3
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
229.9
48.3
7.4
0.2
0
27,777.6
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
Other non-current liabilities
14
2,281.0
Held for trading
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
48.3
Liabilities from banking business
Fair value
receivables
2,284.7
Liabilities at
amortised cost
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
Consolidated balance
sheet disclosures
Amortised cost
Classification of financial instruments (part 2)
(classification)
Note
Category
Measured at
Carrying amount
୮
31 Dec 2016
€m
31 Dec 2015
€m
Interest-bearing liabilities
(excluding finance leases)
14, 25
Consolidated balance sheet item
104.8
0.4
Amortised cost
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
0
1,440.6
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
5,633.1
- 133,464.8
705.0
0
о
0
0
0
0
27,777.6
0
0
0
0
4,384.6
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
- 113,766.2
0
receivables
0
0
€m
€m
58.0
85.3
197.4
134.1
Non-current receivables and securities from
13
AFS¹)
Fair value
banking business
1,604.8
31 Dec 2015
2,018.6
13
AFS¹)
Historical cost
0
0.9
AFS¹)
Fair value
26.0
31.4
Other loans
13
Loans and
Other financial instruments
0
Carrying amount
31 Dec 2016
Category
0
0
0
0
0
0
0
0
0
0
0
о
Measured at
о
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)
Fair value
250
2.0
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
5,100
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
2015
€m
2016
2015
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
257
281.05)
0
0
5.0
16
Clearstream
Balances on nostro
accounts
0
5,231.0
Uncollateralised cash
investments
Money market lendings -
Eurex¹)
central banks
Money market lendings -
Eurex¹)
other counterparties
24,910.6
0
25,972.1
0
0
2.2
0
0
Clearstream
16
7,320.0
3,714.5
0
0
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
0
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
5,231.03)4)
0
291.42)
4,079.83)4)
662.5
5,033.7
99
146
Asia-Pacific
140.3
121.0
0
1.0
3.9
3.8
199
1,670.1
207
regions
2,605.6
2,465.9
152.6
147.7
4,121.6
4,781.1
5,176
5,100
Consolidation
Total of all
of internal net
11.9
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
0.5
Europe
907.1
6.4
0
488.4
488.3
1,035
919
America
144.9
132.5
992.3
€m
revenue
Group
31 Dec 2016
€m
31 Dec 2015
€m
Amount at
31 Dec 2016
€m
Collateralised cash
investments
Reverse repurchase
Eurex¹)
agreements
Amount at
31 Dec 2015
Amount at
€m
0
Clearstream
16
4,050.4
5,217.4
Group¹)
660.0
0
4,999.9
5,217.4
289.5
-48.3
Amount at
Segment
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).
2) Excluding goodwill
Note
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.
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
Collateral
36. Financial risk management
(restated)
56,508.9
(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
-59.6
Gains on the disposal of subsidiaries and equity investments
Miscellaneous
-5.1
-17.6
Subsequent measurement of non-derivative financial instruments
2.7
2.7
Reversal of the revaluation surplus for cash flow hedges
0.3
4.7
Subsequent measurement of derivatives
2.2
3.7
Reversal of discount and transaction costs from long-term financing
-3.2
8.9
Equity method measurement
12.1
5.0
Impairment of financial instruments
€m
0
-0.1
-2.0
Total
(restated)
Replacement investments
Market Data + Services
Eurex
Clearstream
Xetra
Eurex
Expansion investments
€m
€m
€m
31 Dec 2015
Payment to acquire intangible assets and property, plant and equipment¹)
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:
Deutsche Börse Group financial report 2016
258
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-
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.
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).
Cash flows from investing activities
7.0
-52.3
31 Dec 2016
2015
2016
Composition of other non-cash income/(expenses)
18.3
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.
2.1
Cash flows from financing activities
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.
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
Cash outflows from financing activities totalled €848.8 million (2015: cash inflows of €76.1 million).
Other cash and bank balances
10.2
39.0
The other non-cash income (or expenses in the previous year) consists (consisted) of the following
items:
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.
Cash flows from operating activities
33. Consolidated cash flow statement disclosures
Other disclosures
Other disclosures
Notes
Xetra
Clearstream
Market Data + Services
30.6
Total investments according to segment reporting
14.4
29.3
3.4
4.9
45.3
43.4
5.1
0
68.2
77.6
1) Not taking into account discontinued operations
3.31
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.
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
2,443
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
2.94
(restated)
2015
Notes
-33.1
326
1,651
-56.4
-0.7
-0.6
-4.2
-2.1
461.2
333.3
63.1
96.1
331.2
323
286.7
property, plant and equipment³)
53.4
59.9
13.6
7.0
63.6
73.4
Employees
(as at 31 December)
1,851
Investments in intangible assets and
-28.8
-48.4
-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)
■ Central counterparty for on- and off-exchange derivatives and repo transactions
■ Eurex Repo over-the-counter (OTC) trading platform
6.81
3.60
-58.6
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
■ Electronic clearing architecture C7
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:
Internal organisational and reporting structure
Segment
Eurex
Xetra
Clearstream
Market Data + Services
Business areas
■ Electronic trading of European derivatives (Eurex Exchange), commodities (EEX group) and foreign
exchange (360T)
Other disclosures
(restated)
■ Cash market with the Xetra, Börse Frankfurt and Tradegate trading venues
2015
business
21.4
16.5
0
0
62.6
34.1
Other operating income
14.9
6.6
Net interest income from banking
6.8
7.6
Total revenue
1,098.0
946.1
193.4
217.9
2016
€m
991.0
942.8
Volume-related costs
3.2
901.1
26.9
186.8
2015
€m
925.2
2016
€m
2015
€m
External sales revenue
1,049.7
914.7
211.1
917.0
Internal sales revenue
0
2016
€m
0
0
0
8.2
893.2
7.9
Total sales revenue
1,049.7
914.7
€m
186.8
211.1
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
2) Includes rental income from subleases of International Securities Exchange Holdings, Inc., which was fully consolidated until Q2/2016. For details, see note 2.
Stock Bonus Plan (SBP)
39. Share-based payment
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.
1) The expected payments in US dollars were translated into euros applying the closing rate of 31 December.
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.
26,861.3
63,273.8
Stock Plan
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.
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.
Evaluation of the Stock Bonus Plan (SBP) and the Stock Plan
In accordance with IFRS 2, the company uses an adjusted Black-Scholes model (Merton model) to
calculate the fair value of the stock options.
27,772.0
29,400.8
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.
Other receivables
57,172.8
36,412.5
1.6
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.
0.6
193.7
0
Up to 1 year
31 Dec 2015
€m
67.6
1 to 5 years
More than 5 years
Total
176.7
116.7
155.4
353.2
416.7
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.
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.
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.
Expected rental income from subleases")
Up to 1 year
1 to 5 years
More than 5 years
Total
31 Dec 2016
31 Dec 20152)
€m
€m
0.6
0.9
0
0.7
0
€m
50.8
at
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.
9) Meets the IAS 39 criteria for a financial guarantee contract
8) Off-balance-sheet items
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.
6) The amount includes collateral totalling €5.0 million (2015: €5.1 million).
5) Thereof €1,818.5 million transferred to central banks (2015: €1,863.4 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
3) Thereof none transferred via transfer of title to central banks (2015: €3,114.5 million)
2) Thereof none repledged to central banks (2015: nil)
1) Presented in the items "restricted bank balances" and "other cash and bank balances"
119,782.6
111,132.9
140,384.7
135,864.0
Total
0
0
0
0
0
23.3
65.8
63,273.71)
59.8
57,172.8¹¹)
11) Collateral value of cash and securities collateral deposited for margins, covering the net value of all margin and clearing fund requirements
31 Dec 2016
268
Cash investments
Collateral value
Collateral value
at
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.
Total
Securities and book-entry securities collateral²) 3)
Cash collateral (cash deposits)")
Composition of collateral held by central counterparties
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.
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.
Financial instruments of the central counterparties
In 2015 and 2016, 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 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).
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).
Notes
Other disclosures
Executive and Supervisory Boards | Management report | Governance | Financial statements
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.
Loans for settling securities transactions
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.
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.
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).
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).
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.
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.
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.
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.
Deutsche Börse Group financial report 2016
31 Dec 2015²)
€m
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.
Minimum lease payments from operating leases ¹)
m
Deutsche Börse AG
working capital¹)
€
605.0
605.0
Eurex Clearing AG
settlement
€
1,170.0
1,170.0
settlement
CHF
200.0
100.0
Clearstream Banking S.A.
working capital¹)
€
750.0
750.0
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.
For refinancing purposes, Eurex Clearing AG and the Clearstream subgroup can pledge eligible securities
with their respective central banks.
Clearstream Banking S.A. has a bank guarantee (letter of credit) in favour of Euroclear Bank S.A./N.V.
issued by an international consortium to secure daily deliveries of securities between Euroclear Bank
S.A./N.V. and Clearstream Banking S.A. This guarantee amounted to US$3.0 billion as at 31 December
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).
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.
272
m
Deutsche Börse Group financial report 2016
Amount at
31 Dec 2015
Currency
49,538.610)
Deutsche Börse Group financial report 2016
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.
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.
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).
Deutsche Börse Group also applies additional methods in order to detect credit concentration risks. In
2016, no significant credit concentrations were assessed.
Market risk
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.
On an intraperiod basis, the risk exposure described above is monitored against the latest EBIT forecast.
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.
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.
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.
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Other disclosures
271
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).
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.
Liquidity risk
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.
Contractually agreed credit lines
Company
Purpose of credit line
Amount at
31 Dec 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).
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).
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+.
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 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.
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 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.
Criminal investigations against Clearstream Banking S.A.
On 2 April 2014, Clearstream Banking S.A. was informed that the United States Attorney for the
Southern District of New York has opened a grand jury investigation against Clearstream Banking S.A.
due to Clearstream Banking S.A.'s conduct with respect to Iran and other countries subject to US
sanction laws. Clearstream Banking S.A. is cooperating with the US attorney.
Dispute between MBB Clean Energy AG and investors
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
273
274
Deutsche Börse Group financial report 2016
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.
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.
Other liability 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.
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
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.
38. Leases
Finance leases
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.
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 buildings, IT hardware and software.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Other disclosures
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
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.
Heiser vs Clearstream Banking S.A.
Peterson vs Clearstream Banking S.A., Citibank NA et al. (“Peterson I") and
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.
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:
Breakdown of future financial obligations
Up to 1 year
1 to 5 years
More than 5 years
Total
Other litigation and liability risks
31 Dec 2016
€m
31 Dec 2015
€m
31 Dec 2016
€m
47.0
39.2
60.8
9.1
9.9
95.3
131.6
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.
-
-
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Other disclosures
60.9
44,228.210)
269
Financial guarantee
contracts)
31 Dec 2015
€m
56,508.9
Other receivables
Other loans
Group
Amount at
0.4
0
0
Other assets
Group
32
450.2
0.2
932.3
53,960.1
89,272.7
14
270
267
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Other disclosures
Collateral
Balance brought forward
maximum risk exposure
Amount at
31 Dec 2015
€m
Segment
Note
Amount at
31 Dec 2016
€m
90,432.0
Carrying amounts -
0
Amount at
31 Dec 2016
€m
Trade receivables
0
Margin requirements
Clearstream
16
0.4
0
0
1,138.0
0
0
Financial instruments held
0
Derivatives
by central counterparties
1,499.3
1.2
6.8
15.2
Group
669.8
554.1
0
0
Group
parties
Receivables from related
4.7
0
0
Interest receivables
Clearstream
16
2.0
-1.0
-1.2
- 1.62)
0
0
0
Total sum of business
-10.7
13.5
14.2
-13.3
-3.6
2.5
4.7
3.1")
transactions
0.5
-12.3
0
-1.8
Associates
13.0
10.9
-9.1
2.5
4.7
-3.6
-0.6
Joint ventures
0
0.2
0
0
0
0
0
Other shareholdings
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
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.
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.
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.
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.
285
286
Deutsche Börse Group financial report 2016
5,100
44. Events after the end of the reporting period
2015
€m
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.
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.
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.
45. Date of approval for publication
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.
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.
5,176
4,760
5,095
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.
Employees
Average number of employees during the year
Employed at the reporting date
Employees (average annual FTEs)
2016
2015
Monetary business relationships with key management personnel
€m
Supervisory Board
€m
93,064
41,465
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.
Total
Group Share Plan (GSP)
In the reporting period, an expense totalling €2.6 million (2015: €1.8 million) was recognised in staff
expense for the Group Share Plan.
40. Executive bodies
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.
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.
28,501
0
28,501
Balance at
31 Dec 2015
To the Executive Board
93,064
Additions/
(disposals)
Tranche 2015
41,465
Additions
Tranche 2016
Fully settled
Options
Balance at
cash options
forfeited
31 Dec 2016
55,676
0
0
190,205
To other senior executives
Executive and Supervisory Boards | Management report | Governance | Financial statements
€m
Notes
The remuneration of the individual members of the Executive and Supervisory Boards is presented in the
"Remuneration report" in the combined management report.
Outstanding balances
liabilities
31 Dec
31 Dec
31 Dec
31 Dec
2016
€m
receivables
2015
2015
2016
2015
2016
€m
€m
€m
2016
Outstanding balances
transactions expenses
Amount of the
Executive Board
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).
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).
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
transactions revenues
Other disclosures
43. Employees
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.
Deutsche Börse Group financial report 2016
Deutsche Börse Group financial report 2016
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
Additions/
(disposals)
Additions/
(disposals)
Additions/
(disposals)
278
Additions
Tranche
2013
Tranche
Tranche
2014
2015
Tranche
2016
Fully
settled
cash
options
Balance at
2015
Options
forfeited
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.
25.79
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
exercised
Tranche
stock options
€
Average price of the
forfeited stock options
€
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.
2012
2014
2015
78.94
79.70
61.38
79.75
39.47
79.86
2013
31 Dec
2016
To the Executive Board
209,944¹
757
132,186
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)".
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.
Long-term Sustainable Instrument (LSI) and Restricted Stock Units (RSU)
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.
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).
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
221,566
Executive and Supervisory Boards | Management report | Governance | Financial statements
Other disclosures
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.
Evaluation of the LSI and the RSU
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.
Valuation parameters for LSI and RSU stock options
Term to
Risk-free interest rate
Volatility of Deutsche Börse AG shares
Notes
25,931
1,042
0
0
0
0
0
209,944
0
0
To other senior executives
117,592²)
0
0
1,042
25,931
11,622
757
132,186
Total
327,536
0
2.0
Dividend yield
5.3
132,186
Exercise price
€
2.75
0
2.75
2.75
O to 18.15
2.75
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.
Balance at
Valuation of SBP stock options
Deutsche
Börse AG share
price at
Intrinsic value/
option at
Tranche
31 Dec 2016
31 Dec 2016
1) The SBP 2013 tranche also includes SBP options of the Stock Plan for the executive board members of the Luxembourg companies.
31 Dec 2016
Dividend yield
31 Dec 2016 to
31 Jan 2017
Notes
Other disclosures
277
Valuation parameters for SBP stock options
Tranche 2016
Tranche 2015
Tranche 2014
Term to
-0.92
31 Mar 2020
%
-0.65
Volatility of Deutsche Börse AG shares
%
23.71
31 Mar 2019
-0.76
25.49
31 Dec 2016 to
31 Mar 2018
-0.92 to 0.80
0 to 26.23
Tranche 2013")
Risk-free interest rate
Number
€
€
1.0
2015
16,082
76.42
76.42
71.89
1.2
0
0
0.6
25,931"
76.42
76.42
69.96
1.8
0
0.4
Total
2016
1.4
73.86-76.98
76.42
Fair value/
option at
31 Dec 2016
€
Settlement
obligation
Current
provision at
31 Dec 2016
Non-current
provision at
31 Dec 2016
€m
€m
€m
2013
76.42
76.42
76.24-76.98
5.4
5.3
0
2014
19,521
76.42
9.8
Change in number of CPIP and PSP stock options allocated
Exercise price
31 Mar 2018
-31 Mar 2022
23.02
23.88
Dividend yield
%
0
0
Exercise price
€
%
0
Relative total shareholder return
%
50.00
235.00
Increase in net profit for the period attributable to Deutsche Börse AG shareholders
%
190.00
155.00
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.
Volatility of Deutsche Börse AG shares
-0.65
Co-Performance Investment Plan (CPIP) and Performance Share Plan (PSP)
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.
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.
Based on the PSP 100 per cent stock bonus target, the corresponding number of phantom shares for
each beneficiary is calculated by dividing the stock bonus target by the average share price (Xetra
closing price) of Deutsche Börse AG's shares in the last calendar month preceding the performance
period. Any right to payment of a PSP stock bonus vests only at the end of a five-year performance
period.
The final number of Performance Shares is calculated by multiplying the original number of Performance
Shares with the level of overall target achievement. The PSP level of overall target achievement is based
on two performance factors during the performance period: firstly, on the relative performance of the
total shareholder return (TSR) on Deutsche Börse AG's shares compared with the total shareholder return
of the STOXX Europe 600 Financials Index; and secondly, on the increase of Deutsche Börse AG's net
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Other disclosures
-0.76
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.
Valuation parameters for CPIP and PSP stock options
Tranche 2016
Tranche 2015
Term to
Risk-free interest rate
31 Dec 2020
31 Dec 2019
%
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.
Valuation of CPIP and PSP stock options
Deutsche
Börse AG share
Tranche
76.41
10.3
0
3.8
2016
Total
84,177
218,706
76.42
76.42
76.42
76.41
0
1.3
16.7
0
5.1
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).
281
282
6.4
76.42
134,529
2015
Balance as at
31 Dec 2016
price as at
31 Dec 2016
Intrinsic value/
option as at
31 Dec 2016
Fair value/
option as at
Settlement
Current
provision as at
Non-current
provision as at
31 Dec 2016
obligation
31 Dec 2016
31 Dec 2016
Number
€
€
€
€m
€m
€m
182,978
Tranche 2016
0
0
Current
provision as at
Non-current
provision as at
obligation
31 Dec 2016
31 Dec 2016
Number
€
€
Settlement
€
€m
€m
2014
24,898¹)
76.42
76.42
70.44 -75.03
1.9
€m
0.6
Fair value/
option as at
31 Dec 2016
31 Dec 2016
% -0.84 to -0.51
%
%
€
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
31 Mar 2017
-31 Mar 2020
option as at
31 Dec 2016
-0.84 to 0
O to 26.2
2.75
0
The valuation model does not take into account exercise hurdles. The volatilities applied correspond to
the market volatilities of comparable options with comparable maturities.
Valuation of LSI and RSU stock options
Tranche
Balance as at
31 Dec 2016
Deutsche
Börse AG share
price as at
Intrinsic value/
2.75
0
1.3
2015
49,109¹)
280
Deutsche Börse Group financial report 2016
Change in number of LSI and RSU stock options allocated
Balance at
31 Dec 2015
Additions/
(disposals)
Tranche 2014
Additions/
(disposals)
Tranche 2015
Additions
Tranche 2016
279
Fully settled
cash options
Balance at
31 Dec 2016
To other senior
executives
Total
669¹)
669
93,742
93,742
1,564¹)
1,564
108,971¹
108,971
21,968
21,968
Options
forfeited
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).
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.
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
76.42
68.56 -75.03
3.6
1.4
2.1
2016
108,971"
76.42
76.42
66.72-74.37
7.8
0
7.7
Total
182,978
13.3
2.0
11.1
182,978
70,652
Executive and Supervisory Boards | Management report | Governance | Financial statements
Derivatives
Executive Office
& Capital Markets
& Administration
Group Legal
Treasury
Settlement
& Regulatory
Affairs
& Custody
Core Products
Community
Development
GSF IT
Clearing IT
Human Resources
Chief Risk Officer
Market Operations
Group Business
& Product
Development
IFS IT
Corporate
Systems
Group Venture
Portfolio
Management
Group Organi-
sational Services
Investment Funds
Services & GSF
Growth Financing
Office Automation
Data IT
Chief of Staff
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.
Further information on the Group's financial position is presented in the “Financial position" section
of this combined management report.
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.
Digitisation/
Platforms
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.
Pre-IPO
Investor Relations
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
Deutsche Börse Group's management structure as at 1 January 2017
Group Executive Board
Group Communi-
cations, Marketing
& Reg. Strategy
CEO
C. Kengeter
Group Strategy/
Mergers
& Acquisitions
Financial
Accounting
& Controlling
Chief Compliance
Officer
Clients, Products
CFO
Group Client
Services
G. Pottmeyer
& Core Markets
Cash Market, Pre-IPO
& Growth Financing
H. Stars
IT & Operations,
Data & New Asset Classes
A. Preuss
Core Markets
Development
Cash Market
Development
& Op. Management
IT Infrastructure
& Operations
FX/360T
Clearing/CCP/CH
Cash Market Sales
& Partner Markets
Group Information
Security
European Energy
Exchange (EEX)
Group Audit
J. Tessler
Organisational structure
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.
26
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.
Deutsche Börse Group's objectives and strategies
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
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.
21
Officer
Settlement IT
Market Data
Compensation
Risk IT
Asset Servicing
Derivatives
Markets Trading
Group Project
Portfolio
Management
Innovation
Energy
& Cash Trading IT
Group Sales
Strategic Finance
+ Services
Deutsche Börse Group financial report 2016
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
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.
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).
Management systems
Internal management
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
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.
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
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.
■ 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.
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:
▪ 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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
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.
■ Technology and reporting solutions for external customers
Clearstream Holding AG
100%
Deutsche Börse
Services s.r.o
100%
Eurex Clearing AG
100%
Eurex Repo GmbH
100%
Deutsche Boerse Asia
Holding Pte. Ltd.
100%
Clearstream
International S.A.
100%
Impendium Systems Ltd
100%
Eurex Clearing Asia
Pte. Ltd.
Clearstream Banking AG
100%
STOXX Ltd.
100%
360 Treasury Systems AG
100%
Eurex Bonds GmbH
79%
Eurex Exchange Asia
Clearstream Banking S.A.
100%
DB1 Ventures GmbH
100%
Eurex Global Derivatives AG
100%
Pte. Ltd.
100%
China Europe International
Exchange AG
Clearstream Banking
Japan, Ltd.
100%
Deutsche Börse Photography
Foundation gGmbH
100%
40%
REGIS-TR S.A.
50%
100%
Eurex Zürich AG
100%
Deutsche Börse AG ¹)
Combined
■ Trading participant connectivity
18 Fundamental information
about the Group
32 Deutsche Börse AG shares
33 Report on economic position
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)
Eurex Frankfurt AG
113 Remuneration report
18
Deutsche Börse Group financial report 2016
Combined management report
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).
Fundamental information about the Group
Overview of Deutsche Börse Group
Business operations and Group structure
Deutsche Börse AG, which is headquartered in Frankfurt/Main, Germany, is the parent company of
Deutsche Börse Group. As at 31 December 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.
-
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Fundamental information about the Group
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.
Equity investments and partnerships strengthen product and service offering
136 Corporate governance declaration
50%, 50%²)
management report
63%
Deutsche Börse Group financial report 2016
Management
The governing bodies of Deutsche Börse AG, which is a German stock corporation, are the Annual
General Meeting, the Supervisory Board and the Executive Board, each of which has its own areas
of responsibility.
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 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 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.
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).
Deutsche Börse Group's reporting segments
Reporting segment
Eurex
Xetra
Clearstream
20
Market Data + Services
■ Electronic trading of European derivatives (Eurex Exchange), commodities (EEX group) and foreign
exchange (360T®)
■ Eurex RepoⓇ over-the-counter (OTC) trading platform
■ C7Ⓡ electronic clearing architecture
■ Central counterparty for on- and off-exchange derivatives and repo transactions
■ Cash market with the Xetra®, Börse Frankfurt and Tradegate trading venues
■ Eurex BondsⓇ OTC trading platform
■ 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
■ Development and sales of indices (STOXX)
European Energy
Exchange AG
Business areas
19
■Distribution of licences for trading and market signals
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%
Cleartrade Exchange
Pte. Limited
100%
European Commodity
Clearing AG
100%
Powernext SA
88%
EPEX SPOT SE
11%, 40%³)
Börse Frankfurt Zertifikate
Holding S.A. in liquidation
100%
Tradegate Exchange GmbH
75%, (5%)5)
BrainTrade Gesellschaft
für Börsensysteme mbH
14%, 14%6)
Deutsche Börse
Commodities GmbH
Clearstream Global
Securities Services Limited
100%
Börse Frankfurt
Zertifikate AG
100%
Prague s.r.o
100%
3) Direct equity interest European Energy Exchange AG: 11%, direct equity interest Powernext SA: 40%
Clearstream Operations
2) Direct equity interest Deutsche Börse AG: 50%, direct equity interest Eurex Global Derivatives AG: 50%
1) Simplified presentation of main shareholdings (rounded values), as at 1 January 2017
Cloud Exchange GmbH
ZDB
50%, (15%)4)
4) Direct equity interest Deutsche Börse AG: 50%, equity interest of 15%, which is held indirectly via Zimory GmbH
16%
Deutsche Boerse
LuxCSD S.A.
50%
Clearstream Services S.A.
100%
Systems, Inc.
100%
#13-03A Robinson Centre
Tokyo
Republic of Singapore
Singapore 068893
61 Robinson Road
#27-01 Republic Plaza
#55-01 Republic Plaza
9 Raffles Place
Singapore 048619
Republic of Singapore
9 Raffles Place
27F, Marunouchi Kitaguchi
Building
Singapore 048619
Republic of Singapore
1-6-5, Marunouchi
Agility
Tokyo 100-0005
Japan
Australia
Sydney
Level 26
44 Market Street
Sydney NSW 2000
Australia
For more information on our
addresses please visit
www.deutsche-boerse.
com/addresses
289
290
Deutsche Börse Group financial report 2016
Glossary
A
New York
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.
Chiyoda-ku
400 051
China Central Place
India
1 Rockefeller Plaza Floor 11
New York, NY 10020
USA
Asset deal
60 Broad Street Floor 31
New York, NY 10004
USA
521 Fifth Avenue Floor 38
New York, NY 10175
USA
Oslo
Asia
Filipstad Brygge 1
0252 Oslo
Norway
Paris
5, boulevard Montmartre
75002 Paris
France
17, rue de Surène
75008 Paris
Singapore
France
Unit 01-06, 7/F, Tower 3,
77 Jianguo Road
100025 Beijing,
Chaoyang District
P.R. China
Dubai
Conrad Tower Building
Level 10, Unit 1006
Sheikh Zayed Road
P.O. Box 27250
Dubai
United Arab Emirates
Hong Kong
2904-7, 29/F, Man Yee Building
68 Des Voeux Road, Central
Hong Kong
Mumbai
Level 8, Vibgyor Towers
G Block, C-62,
Bandra Kurla Complex
Mumbai
Beijing
(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.
Cyber attack
Blockchain
Designated Sponsor
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.
Deutsche Börse Venture Network
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.
E
EMIR
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.
ETF
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.
ETP
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.
Exchange-traded product. ETPs comprise exchange-traded funds
(ETFs), exchange-traded commodities (ETCs) and exchange-
traded notes (ETNs).
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.
F
Fintech
Portmanteau combining the terms "financial" and "technology".
Describes novel solutions for application systems that constitute
innovations or advancements in the financial services sector
FX
Foreign exchange. Receivables in foreign currencies consisting
of assets or cheques in said currencies
G
Global Liquidity Hub
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.
GRI
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.
291
Chicago, IL 60606
USA
Exchange 4.0
B
DB1 Ventures
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.
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.
с
Capital Markets Union
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).
C7
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®.
CCP
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
CEINEX
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).
Clearing
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.
CMU
D
Capital Markets Union
Collateral, in particular in the form of cash or securities, such
as equities or bonds, is deposited in order to meet specified
collateral requirements (
Commercial paper
margin).
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.
CRD IV/CRR
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.
CSD
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.
CSDR
Central Securities Depository Regulation. CSDR aims to achieve
harmonisation of securities ☑ settlement systems and supervisory
rules for CSDs in Europe.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Custody
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.
Collateral
Suite 2455
Jeffy Tester
Willis Tower
(German Public Auditor)
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Deutsche Börse Group worldwide
Europe
Atlas Arena Amsterdam
Australia Building, 3rd floor
Hoogoorddreef 7
1101 BA Amsterdam
Netherlands
Berlin
Kurfürstendamm 119
10711 Berlin
Germany
Unter den Linden 36
10117 Berlin
Germany
Bern
Marktgasse 20
3011 Bern
Switzerland
Brussels
11-13, Rue d'Idalie
1050 Bruxelles
Belgium
66, Boulevard de l'Impératrice
1000 Bruxelles
Belgium
Cork
2600 Cork Airport Business Park
Kinsale Road
Cork
Ireland
Eschborn
The Cube
Mergenthalerallee 61
Dielehner
Wirtschaftsprüfer
(German Public Auditor)
Wirtschaftsprüfer
Braun
292
Executive and Supervisory Boards | Management report | Governance | Financial statements
Notes
Responsibility statement
by the Executive Board
Responsibility statement by
the Executive Board
To the best of our knowledge, and in accordance with the applicable reporting principles, the
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.
Frankfurt/Main, 10 March 2017
Deutsche Börse AG
Carsten Kengeter
نسا
Andreas Preuss
6. Potty
65760 Eschborn
Gregor Pottmeyer
Hauke Stars
Jeffrey Tessler
287
288
Deutsche Börse Group financial report 2016
Auditor's report
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.
Frankfurt/Main, 10 March 2017
KPMG AG
Wirtschaftsprüfungsgesellschaft
Haube Pras
Germany
Postal address:
60485 Frankfurt/Main
Germany
The Square
42, Avenue JF Kennedy
L-1855 Luxembourg
Madrid
Calle de la Tramontana, 2
28231 Las Rozas de Madrid
Spain
Milan
Via Monte di Pietà 21
20121 Milano MI
Italy
Moscow
Vozdvizhenka Street 10
3rd Floor, Regus Business Centre
125009, Moskva
Russia
Prague
Futurama Business Park
Building B
Luxembourg
Sokolovská 662/136b
18600 Praha 8
Czech Republic
Mayerhofgasse 1/19
1040 Wien
Austria
Zurich
Manessestrasse 85
4th floor
8045 Zürich
Switzerland
North America
Chicago
Willis Tower
233 South Wacker Drive
Suite 2450
Chicago, IL 60606
USA
Vienna
233 South Wacker Drive
United Kingdom
13 Austin Friars
London
Frankfurt/Main
Börsenplatz 4
60313 Frankfurt/Main
Germany
Sandweg 94
60613 Frankfurt/Main
Germany
Westend Carrée
Grüneburgweg 16-18
60322 Frankfurt/Main
Germany
Leipzig
Augustusplatz 9
04109 Leipzig
Germany
London
11 Westferry Circus
EC2N 2HE
1st Floor, Westferry House
Canary Wharf
E14 4HE
United Kingdom
11 Westferry Circus
2nd Floor, Westferry House
Canary Wharf
London
E14 4HE
United Kingdom
11 Westferry Circus
3rd Floor, Westferry House
Canary Wharf
London
E14 4HE
United Kingdom
London
Deutsche Börse Group financial report 2016
Amsterdam
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).
Dividend distribution ratio²)
%
54
55
Dividend yield4)
%
3.1
3.0
Opening price (as at 1 Jan) 5)
€
81.39
59.22
High 6)
€
83.00
87.41
Low 6)
€
67.19
58.65
Closing price (as at 31 Dec)
€
77.54
81.39
Average daily trading volume on Xetra®
m shares
0.5
2.25
2.353)
€
Dividend per share
90
70
60
60
0
Jan
Feb
Mar
Apr
May
June
July
Aug
0.7
Sep
Nov
Dec
Daily closing price of Deutsche Börse AG shares¹)
DAX®
STOXX® Europe 600 Financials
Dow Jones Global Exchanges
1) As from 18 July 2016, the data shown refer to tendered shares (ISIN DE000A2AA253).
Deutsche Börse AG shares: key figures ¹)
2016
2015
Earnings per share (basic)2)
€
4.34
3.85
Oct
Number of shares (as at 31 Dec)
thereof outstanding (as at 31 Dec)
Free float (as at 31 Dec)
appr. 60,000
Analyst recommendations buy/hold/sell (as at 31 Dec)
Average target price set by analysts at year-end
%
43/50/7
appr. 57,000
52/39/9
€
84.00
85.00
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
4) Based on the volume-weighted average of the daily closing prices
5) Closing price on preceding trading day
Shareholders
6) Intraday price
10
About this report
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.
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
GRI
Principles of sustainability reporting
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.
Verification of non-financial key figures
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
<
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.
C6
GSF
C7
00
95
%
m
193.0
m
186.8
186.7
%
100
100
Price-earnings ratio4)
17.3
18.3
Market capitalisation (as at 31 Dec)
€bn
94
14.5
Average annual return since IPO in 2001
%
13.2
14.4
Attendance of share capital at the Annual General Meeting
%
65.8
42.2
90
Share of investors from Germany/UK/USA/other countries
Institutional investors
%
17/29/30/24
15/28/31/26
14.7
80
193.0
100
STOXX® Sustainability
Index family which shows the performance of sustainable
companies
T
R
Repo
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.
Index family based on sustainability ratings covering environ-
mental, social and governance (ESG) criteria
Securities lending
Settlement
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.
STOXX® Low Carbon
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.
T7
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®.
U
Underlying
Entity used as a basis for a derived financial instrument, e.g.
a bond based on DAX®
V
H
80
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
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.
293
STOXX® Global ESG Leaders
QE
Hybrid bond
Subordinated corporate bond with both equity- and debt-like
features, very long or unlimited maturity and high interest rates.
|
ICSD
International CSD
IPO
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.
L
Liquidity
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.
Listing
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.
MiFID
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.
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.
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.
MiFIR
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.
OTC
Over the counter, off-exchange. Describes transactions between
two or more trading parties that are not conducted on a regulated
market
M
P
Margin
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.
Pre-IPO
Young high-growth companies' preparatory phase before going
public (IPO)
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Q
MiFID II
294
Volatility
Acknowledgements
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Share price development of Deutsche Börse AG and benchmark indices in 2016
Indexed to 30 December 2015
120
110
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Deutsche Börse AG
Publication half-yearly financial report 2017
17 May 2017
Annual General Meeting
Publication Q1/2017 results
26 April 2017
Financial calendar
26 July 2017
%
Average annual return since IPO in 2001
14.7
14.5
€bn
17.3
18.3
100
100
%
186.7
Market capitalisation (as at 31 Dec)
13.2
%
Attendance of share capital at the Annual General Meeting
65.8
42.2
Share of investors from Germany / UK / USA / other countries
Institutional investors
%
17/29/30/24
15/28/31/26
%
94
95
Shareholders
Analyst recommendations buy/hold/ sell (as at 31 Dec)
Average target price set by analysts at year-end
14.4
186.8
193.0
193.0
%
3.1
3.0
Opening price (as at 1 Jan) 5)
€
81.39
59.22
High6
€
83.00
87.41
Low6)
€
m
67.19
Closing price (as at 31 Dec)
€
77.54
81.39
Average daily trading volume on Xetra®
m shares
0.5
0.7
Number of shares (as at 31 Dec)
thereof outstanding (as at 31 Dec)
Free float (as at 31 Dec)
Price-earnings ratio4)
m
58.65
%
appr. 57,000
52/39/9
€
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Daily closing price of Deutsche Börse AG shares¹)
DAX®
STOXX® Europe 600 Financials
Dow Jones Global Exchanges
1) As from 18 July 2016, the data shown refer to tendered shares (ISIN DE000A2AA253).
33
34
Deutsche Börse Group financial report 2016
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).
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).
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.
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
Change
vs 2015
2016
Development of contracts traded on
selected derivatives markets
Jan
0
60
60
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
4) Based on the volume-weighted average of the daily closing prices
5) Closing price on preceding trading day
6) Intraday price
85.00
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
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)
appr. 60,000
43/50/7
Dividend yield4
-
― 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
Indexed to 30 December 2015
120
110
100
90
80
70
■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
55
Source: Exchanges listed
%
54
652.9
Bolsas y Mercados Españoles²)
3
1,727.5
Deutsche Börse Group - Eurex®
-20
755.3
Borsa Italiana¹)
12
3,942.2
CME Group
-16
Intercontinental Exchange
1,377.0
19
1,950.1
Moscow Exchange
-15
1,802.0
Euronext²)
60
1,680.7
Shanghai Futures Exchange
-8
1,566.3
London Stock Exchange">
%
Deutsche Börse Group
m contracts
2,037.5
National Stock Exchange of India
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.
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).
Regulation on benchmarks and indices
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.
Central Securities Depository Regulation (CSDR)
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.
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.
Recovery and resolution regulation for central counterparties
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.
EMIR: implementation and review
Deutsche Börse Group financial report 2016
36
35
2
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.
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).
Regulation of markets in financial instruments (MiFID II, MiFIR)
Financial markets infrastructure 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).
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 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.
Regulatory environment
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
Source: Exchanges listed
2) Trading volume in electronic trading (single-counted)
1) Part of London Stock Exchange Group
-30
2,134.7
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).
%
-32
vs 2015
29
30
Deutsche Börse Group financial report 2016
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.
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
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.
Deutsche Börse Group financial report 2016
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)
€bn
Dividend distribution ratio²)
Deutsche Börse AG shares
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.
2.25
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.
Change
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
2016
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).
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.
Further details of product and services development activities can be found in the ☑report on opportunities
and the report on expected developments.
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.
Deutsche Börse Group financial report 2016
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
Became effective in 2012; clearing
implemented successively from
✗
obligation for derivatives
(X)¹)
X
x
X
X
X
X
✗
Q2/2016 onwards; draft for a
2017 onwards
New proposal for recovery and
resolution for CCPs issued in
November 2016
Became effective in 2014;
application expected from November
X
Entered into force on 30 June 2016;
application to start in 2018
X
✗
✗
Banks
X
CRD IV, CRR
revision expected in 2017
Capital Markets Union
xxxxxx
X
✗
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
EMIR
Published in 2014; application to
start in 2018
X
X
✗
Recovery and resolution
plans for FMIS
CSDR
X
X
Regulation on
✗
benchmarks and indices
BIS FX Code of Conduct
X
2016
X
332.3
EBIT
333.9
342.9
290.6
275.7
273.4
305.8
275.8
279.8
Operating costs
553.5
619.0
555.0
558.5
547.1
260.5
600.7
325.6
286.0
1.18
Earnings per share (basic) in €
146.5
180.3
179.2
190.7
180.8
273.5
218.5
221.3
shareholders
attributable to Deutsche Börse AG
Consolidated net profit for the period
219.4
276.3
265.9
205.6
564.7
610.5
Net revenue
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 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.
Deutsche Börse Group financial report 2016
44
43
13
3.85
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
810.8
4.34
17
3.31
3.87
Earnings per share (basic) in €
18
613.3
712.1
CRD V, CRR II
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).
Comparison of results of operations with the forecast for 2016
€m
€m
2015
2016
2015
€m
2016
€m
2015
€m
2016
€m
2015
€m
2016
€m
Q4
Q3
Q2
Q1
Key figures by quarter (adjusted)
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.
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.
1.12
722.1
1.17
1.02
746.4
781.9
184.8
164.6
887.5
1,032.2
Net revenue
410.0
2015
€m
2015
€m
€m
2016
2015
€m
2016
€m
€m
2015
2016
€m
2016
€m
401.6
495.5
184.6
225.2
343.7
383.3
106.0
71.1
430.3
Operating costs
540.6
217.0
184.8
402.8
398.8
81.0
95.1
457.6
EBIT
Market Data + Services
Clearstream
Xetra
+5-10
Net revenue
%
%
Result
Forecast
Comparison of results of operations with the forecast for 2016
+8
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
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.
Eurex segment
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
0.78
0.97
0.97
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.
Operating costs (adjusted)
0-5
+1
Eurex
Segment key figures (adjusted)
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.
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.
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.
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.
-
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.
Deutsche Börse Group financial report 2016
46
45
+14
+10-15
Net profit for the period attributable to Deutsche Börse AG shareholders (adjusted)
+15
+10-15
EBIT (adjusted)
0.98
to Deutsche Börse AG shareholders
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.
15
■
Xetra segment
Within Deutsche Börse Group, a series of organisational changes took place, affecting segment reporting:
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
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).
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.
Changes to the basis of consolidation and to segment reporting
explicit recognition of revenue from listings (which was previously recognised under the "other" item)
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.
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.
Deposit Guarantee Schemes
Deutsche Börse Group financial report 2016
40
39
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.
Transparency of securities financing transactions
Business developments
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.
Clearstream segment
Market Data + Services segment
410.0
2,220.3
1,108.2
2,388.7
€ millions
EBIT by segment
€ millions
Consolidated net profit for the period attributable
Net revenue by segment
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.
Results of operations
▪ reassignment of EEX connection revenue to Eurex
reassignment of revenue from regulatory services, from Tools to Data Services
■
■ information business segment was renamed Data Services
▪ merger of the Tools and Market Solutions business segments into Infrastructure Services
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
■ a revised framework for market risk
■the introduction of a binding net stable funding ratio (NSFR)
■the introduction of a binding leverage ratio of 3 per cent
Once the UK has formally declared its intention to exit the EU
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.
Brexit
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.
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 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.
Deutsche Börse Group financial report 2016
-
38
Entry into force in January 2016;
implementing measures (Level 2) still
outstanding
Effective since 2014; transitional
regulations applicable until 2019
Finalisation expected in 2017/2018,
with subsequent implementation
throughout the EU
Development of an action plan in
2015; implementation by 2019
Phase 1 published in May 2016;
Phase 2 expected in May 2017
1) Not in scope of legislative proposal
SFTR
✗
37
-
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.
Key elements of the legislative proposal beside the MREL/TLAC adjustments are:
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).
CRD V/CRR II
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 IV/CRR
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.
■introduction of a leverage ratio
■ revised market risk framework
■ increased capital levels
■ stricter definition of the term "capital"
Changes which have already been implemented include:
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
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.
Basel III
Banking regulations
For further regulatory information, please visit Deutsche Börse Group's regulation webpages at
www.deutsche-boerse.com/dbg-en/regulation.
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.
Market Data + Services
191.4
■ 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)
935.6
Change
2015
2016
€m
%
Change
2015
€m
€m
€m
2016
unadjusted
Deutsche Börse Group key performance figures
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.
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).
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.
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).
■ increased average number of employees during the year under review
adjusted
Market Data + Services
Net revenue
2,388.7
1,064.6
1,220.2
18
935.6
1,108.2
EBIT
1
8
2,220.3
1,158.4
1,174.2
3
1,283.2
1,317.4
Operating costs
2,388.7
8
2,220.3
higher bonus payments to employees due to successful financial year
salary increase of 2.5 per cent
%
■ full consolidation of 360T on an annual basis
Eurex
517.6
96.7
184.8
Xetra
164.6
63.8
1,032.2
288.8
335.4
168.4
746.4
Clearstream
781.9
401.6
■
Clearstream
Eurex
Xetra
381.7
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:
887.5
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).
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
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.
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.
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.
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.
-
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.
-
Deutsche Börse Group financial report 2016
42
41
2015
2016
2015
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).
Emissions trading
3,061.5
71
1,024.9
1,756.2
Gas
46
4,455.6
3
%
TWh / m t CO2
TWh / m t CO2
Commodities: trading volume on EEX³) 4)
-7
311.8
291.1
949.9
Electricity
677.6
509.1
Foreign exchange business: traded volume on 360T®
Net revenue in the Eurex 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
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.
Xetra segment
4.8
Deutsche Börse Group financial report 2016
48
47
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)
3) Volumes traded on EEX - in terawatt hours (TWh) for power and gas contracts, and in million tonnes of CO₂ for emissions trading
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.
4
%
55.3
€bn
€bn
57.6
Average daily volume on 360T®
40
526.6
-7
837.7
16
887.5
1,032.2
%
€m
€m
EBIT
Operational costs
Net revenue
Financial key figures
Change
2015
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
Net revenue in the Xetra segment
549.7
7
507.4
517.6
894.0
3
1,672.6
1,727.5
%
m contracts
m contracts
Equity derivatives²)
Interest rate derivatives
Equity index derivatives²)
Financial derivatives: trading volume on Eurex Exchange
Derivatives¹)
26
430.3
540.6
EBIT (adjusted)
36
381.7
8
€ millions
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.
1,032.2
Issue volume
2016
2015
€m
€m
€600 m
7.4
7.4
€600 m
14.8
14.8
€500 m
8.7
Interest coverage³)
2.0
17.2
7.0
US$290 m
9.3
18.5
€142 m 20152)
€35 m 20162)
0.1
4.5
4.5
53.3
50.8
1,345.7
25.3
€600 m
EBITDA (adjusted)
Total interest expense (incl. 50 per cent of the hybrid coupon)
Other interest expense
578.5
-1,592.3
Cash flows from financing activities
-848.8
76.1
Cash and cash equivalents as at 31 December
-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.
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).
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.
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
1,180.7
Cash flows from investing activities
23.2
2) Annual average
Net revenue
Financial key figures
Change
2015
2016
Clearstream segment: key figures
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.
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.
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).
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
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
Clearstream segment
€m
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.
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
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.
-
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.
-
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 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.
Deutsche Börse Group financial report 2016
50
49
-6
75.3
71.0
-
€m
%
781.9
3) EBITDA / interest expense from financing activities (includes 50 per cent of the interest on the hybrid bond)
Value of securities under custody (average value during the year)
%
€tn
€tn
Domestic business (CSD)
1
6.7
6.8
Value of securities under custody (average value during the year)
International business (ICSD)
%
€tn
€tn
Business key figures
12
343.7
383.3
16
288.8
335.4
-2
457.7
446.7
EBIT (adjusted)
EBIT
Operating costs
5
746.4
4.4
Tradegate
796.6
10.1
Cash flows from operating activities
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
410.0
67.7
73.0
Global Securites Financing
401.6
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.
124.1
Investment Funds Services
132.8
Infrastructure Services
138.0
124.3
115.2
Domestic business (CSD)
115.0
Index
103.1
396.2
406.9
International business (ICSD)
124.3
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.
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.
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.
Investment Funds Services
€tn
€tn
%
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
12.4
5
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.
162.2
1,621.4
Data Services
2015
2015
€m
Change
%
410.0
401.6
2
218.6
233.2
-6
191.4
168.4
14
225.2
€m
184.6
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
22
2016
EBIT (adjusted)
EBIT
2016
2015
2016
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
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.
Market Data + Services segment
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.
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 flow
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).
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.
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.
Market Data Services segment: key figures
Financial key figures
Net revenue
Operating costs
160.5
€ millions
1) Bought back with the proceeds from the sale of ISE mid-2016
1,262.1
184.8
164.6
%
€m
Change
2015
2016
-11
EBIT (adjusted)
Operating costs
Net revenue
Financial key figures
Xetra segment: key figures
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
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.
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.
EBIT
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.
102.4
21
-19
54.6
43.9
Frankfurt Stock Exchange
-16
1,505.8
%
84.9
€bn
Cash market: trading volume (single-counted)
Xetra®
-33
106.0
71.1
-34
96.7
63.8
€bn
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.
€m
1) The position "Trading" includes the Xetra® electronic trading system,
Börse Frankfurt as well as structured products trading.
Listing
15.4
29.7
175.3
Other
16.7
Commodities (EEX)
215.9
164.6
13.6
74.2
15.7
FX (360T)2)
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
887.5
184.8
17.0
Other¹)
88.0
37.9
Equity derivatives
64.2
Central counterparty
36.3
2016
2015
2016
2015
Index derivatives
436.5
402.7
1) Incl. repo business and net interest income from banking business
2) Consolidation in Q4/2015
105.8
124.5
183.3
Interest rate derivatives
189.7
for equities
Trading¹)
26.7
1.56)
1.96) 11)
1.5
Interest coverage ratio
%
15.26)
23.2¹)
26.06)
25.3
Deutsche Börse AG: Standard & Poor's
AA
1.56)
Rating
20.16)
1.66)
Average market capitalisation
14.0
AA
Year-end closing price
€
46.21
60.20
59.22
Gross debt/ EBITDA
81.39
Rating key figures
€bn
8.5
10.0
10.8
14.7
77.54
Clearstream Banking S.A.: Standard & Poor's
274
AA
Deutsche Börse shares
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
1,160.2
€bn
Trading volume (single-counted) 17)
Xetra, Frankfurt Stock Exchange and Tradegate
Market indicators
AA
AA
Fitch
Rating
AA
AA
33 3
Rating
AA
AA
AA
AA
AA
AA
AA
AA
1916)
585) 6) 7) 8)
21
2.10
586)7) 11)
619) 10)11)
1,727.5
%
Dividend payout ratio
2.10
2.10
€
Dividend per share
Performance indicators
2,284.7
4,624.5
11,940.4
14,386.9
3,695.1
2.25
11,267.2
3,752.1
1,428.53) 2,546.5
1,737.43)
€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
1,521.9
2.354)
55
5412)
21
22
%
Return on shareholders' equity (annual average) 15)
27.0
26.0
26.014)
26.08) 13)
26.07
%
Tax rate
46
42
49
39
50
%
Employees (average annual FTEs)
3,416
3,515
3,911
4,460¹)
4,731
2016)
Personnel expense ratio (staff costs / net revenue)
216)
2213)
239)
27
25
EBIT margin, based on net revenue
%
Clearstream
%
€bn
5,176
928
by location
639
3,080
by gender
Deutsche Börse Group employee age structure
Deutsche Börse Group employee age structure
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
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
Deutsche Börse Group financial report 2016
66
65
2,226
100
Total
0
7
Middle East
4
192
Asia
0
2
South America
2
97
North America
6
5,176
575
1,546
985
Luxembourg
Germany
thereof in
thereof in
Global
female
male
under 30 years
104
380 under 30 years
379
30-39 years
270
759
673
40-49 years
475
289
50 years and older
2,096
561
40-49 years
E
302
1,077
30-39 years
1,943
704
1,076
227
50 years and
older
866
Value of securities deposited (annual average)
Rest of Europe
5,176
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
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:
64
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.
515.9
598.6
609.8
576.5
570.3
€bn
volume for the period)
Global Securities Financing (average outstanding
13,075
13,274
12,215
11,626
11,111
63
■ option to work from home (teleworking)
■ childcare service for emergencies and during school holidays (a service used in Germany on a total of
78 days)
■ emergency parent-child offices at the Eschborn, Luxembourg and Prague locations
Total
3
167
United Kingdom
726
559
Market Data + Services
6
314
Ireland
2,397
2,443
Clearstream
15
793
Czech Republic
31 Dec 2015
1,651
326
Employees per countries/regions
Employees by segment
31 Dec 2016
728.3
31 Dec 2016
Germany
5,100
2,226
Eurex
Luxembourg
1,076
21
Xetra
1,851
323
43
707.7
1,672.6")
Cash flows from operating activities
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.
31 Dec 2016
€m
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.
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.
1,092.1 1,079.2
31 Dec 2015
ASSETS
thereof other cash and bank balances
thereof restricted bank balances
126,289.6
107,909.6
thereof financial instruments held by central counterparties
165,688.9
151,904.4
Current assets
7,175.2
5,856.6
thereof financial instruments held by central counterparties
2,018.6
€m
1,604.8
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
Non-current assets
thereof receivables and securities from banking business
27,777.6
A-1+
Tangible equity of Clearstream Inter-national
S.A. (as at the reporting date)
2.375 %
October 2022
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
Fixed-rate bearer bond
ISIN
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
€m
Issue volume
AA
€500 m
10 years
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.
DE000A1684V3
Deutsche Börse Group financial report 2016
57
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
58
26,870.0
Deutsche Börse AG
Standard & Poor's
711.1
thereof net interest income from banking business
1,932.3
€m
Net revenue
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
52.0
The Group's net assets, financial position and results of operations can be considered to be in an
orderly state.
-
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.
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.
Overall assessment of the economic position by the Executive Board
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 financial report 2016
62
61
Employees
37%
(dividends)
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.
Shareholders
1,912.3
35.9
€m
Consolidated cash flow statement
1,458.1
3.87
722.1
613.3")
3.31¹
762.3
4.14
2.60
3.44
€
Earnings per share (basic)
478.4
645.0
Operating costs
€m
Net profit for the period attributable to
935.6") 1,108.2
-1,317.4
84.0
2,388.7
2,220.3¹)
50.62)
-1,283.2")
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
Deutsche Börse AG shareholders
28%
€m
68%
■ 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
2,284.7
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
3,695.1
4,624.5
Value added
Equity
EQUITY AND LIABILITIES
■ 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
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.
2,546.5
Working capital
Taxes
18%
Retained earnings
13%
External creditors
External costs
26%
Depreciation and amortisation
6%
Company performance: €2,395.5 million
Value added: €1,627.1 million
Distribution of value added
Origination of value added
4%
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
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Report on economic position
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).
Technical closing-date items
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.
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
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).
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.
Deutsche Börse Group's commercial activity contributes to private and public income
-
this contribution
Value added: breakdown of company performance
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.
―
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.
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.
73
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:
Deutsche Börse Group financial report 2016
Risk strategy and risk management
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 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.
2. Support for growth in the various business segments
74
Risk report
0
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
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
%
Number of justified customer complaints relating to data protection
0
“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.
Number of employees trained in anti-corruption measures³)
3. Appropriate risk/return ratio
■ Changes to business
Interlocking business strategy and risk strategy
■Information Security
Proportion of business units reviewed for corruption risk
■ Other
and/or business strategy
Risk avoidance
■ Other
■ Insurance
Risk transfer
■Internal control system
■ Business continuity
measures
■ Legal
■ Compliance
■ Straight-through processing
"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.
or severity of effect
Risk mitigation
Risk mitigation
Loss
Effect
Event
Internal and external losses
Risk types
Implied risks
Root cause
Risk scenarios
Risk analysis
Risk strategy/risk appetite
Business strategy
Reduces frequency of events
Punished cases of corruption
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.
16.7
Deutsche Börse Group financial report 2016
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
■ Euronext Vigeo - Eurozone 120 Index: since 2014; based on Vigeo rating
■ Ethibel Sustainability Index (ESI) Excellence Europe: since 2013; based on Forum Ethibel rating (part
of Vigeo)
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.
■ 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
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.
Sustainable index products
Building trust
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.
Risk monitoring
Sustainable economic activity
■ Dow Jones Sustainability Indices (DJSI) Europe: since 2005; World: since 2015; result of Robeco SAM
rating: total score 71; average sector score 43
Compliance
Comparison with the forecast for 2016
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.
99.930
99.999
99.999
99.962
14.8
€trillion
Market risk cleared via Eurex Clearing (gross monthly average)
%
Availability of derivatives market trading system (T7Ⓡ)
%
Availability of cash market trading system (Xetra®)
Security and reliability
35
11,403
11,975
100
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.
Number of sustainable index concepts
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.
Number of indices calculated
Existing risks
2,627
■ Stress tests
member
Training days per staff
70
25
45
187
61
126
501
192
309
Leavers
70
3.57
35
292
132
160
755
316
439
Joiners
Staff turnover
44
41
46
32
31
35
33
4.14
3.70
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
Deutsche Börse Group financial report 2016
1,102
1,525
agreements
Employees covered by
collective bargaining
3.80
56
37
79
45
34
263
132
131
Promotions
4.15
4.14
4.16
4.19
4.96
19
■ Aggregated risk measurement
24
25
Supervisory boards
Clearstream and Eurex Clearing AG
Financial institutions
Identify, notify and control
Business segments
Chief Risk Officer/Group Risk Management
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
Evaluates the effectiveness of the risk management system
Audit Committee of the Supervisory Board
Monitors the effectiveness of the risk management system
Evaluates the risk strategy and risk management system
Monitor the effectiveness of risk management systems and
evaluate risk strategy
Supervisory Board of Deutsche Börse AG
Risk management - organisational structure and reporting lines
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.
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.
Implementation in the Group's organisational structure and workflow
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
■ Deutsche Börse Venture NetworkⓇ
■ DB1 Ventures
Long-term developments
↓ Risk acceptance
■ Risk map
Emerging risks
■ Risk metrics
Group-wide
23
Executive boards
<-----Chief Risk Officers/Risk management functions
Over 15 years (%)
31
31
31
31
30
31
34
35
33
5-15 years (%)
25
28
Responsible for the risk management of their institution
23
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.
-
Centrally coordinated risk management - a five-stage process
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.
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 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.
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.
Deutsche Börse Group financial report 2016
76
75
Identify, notify and control
Business segments
Manage risks in day-to-day operations and report to their
own committees and the Group
37
70
Target female quotas adopted
318
31
111
88
230
Staff
management
142
Junior
14
70
180
29
151
330
84
57
27
84
4
9
4
5
management
Senior and middle
Part-time employees
908
389
1,904
802
1,102
4,528
1,960
2,568
48
1
282
1,076
-
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
360-degree feedback introduced for executive staff
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).
"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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Non-financial key performance indicators
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.
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).
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.
69
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.
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.
Key data on Deutsche Börse Group's workforce as at 31 December 2016
Global
430
646
2,226
Total
Male Female
Total
Female
862
1,364
5,176
Male
Total
Male Female
3,080 2,096
Employees
thereof in Luxembourg
thereof in Germany
Senior and middle
management
5
519
3
Interns and students¹)
105
116
221
90
105
1
15
11
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.
26
Length of service
Under 5 years (%)
42
22
-
42
24
18
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.
graduates (%)
73
66
70
76
65
72
57
54
56
Apprentices
18
6
24
6
42
195
39
432
80
Staff
5
5
0
4
4
36
9
9
0
management
Junior
4
512
54
0
305
251
Proportion of
3
0
55
27
28
60
3
32
Disabled employees
141
122
28
19
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).
-
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
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.
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.
2. Going-concern principle: what risks can be absorbed by earnings?
Deutsche Börse Group financial report 2016
Deutsche Börse Group's risk profile
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.
3. Regulatory capital requirements
Operational risks
Risk profile of Deutsche Börse Group
■ Service deficiency
•
Damage to physical assets
■ Legal offences and business practice
Project risks
↑
Financial risks
■ Credit risk
78
■ Market risk
■ System availability
77
Required economic capital by segment
4. Control
■ Liquidity risk
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk 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, 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.
Existing risks
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.
Aggregate risk measurement
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).
1. Liquidation principle: what risk can the capital cover?
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).
5. Monitor and report
The five-stage risk management system
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
Responsibility
to
↑
↑
■ Damages or destruction
■ Damages or destruction
of buildings
Damage to physical assets
↑
■Loss of customer cash
■ Deficiency of trading related
services
Service deficiency
■ Settlement
■ Clearing
of datacentres
■ Trading
Events
Operational risks
Operational risks at Deutsche Börse Group
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).
Damage to physical assets
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.
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.
Service deficiency
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.
System availability
Legal offences and business
practice
■ Losses from ongoing legal
conflicts
■ Theft of customer cash
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
Possible root causes
↑
↑
■ Breach of sanctions
provisions
■ Contract risks
■ Employment practice
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.
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
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
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.
82
81
41%
Clearstream
Eurex
Eurex
36%
Services
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
Deutsche Börse Group financial report 2016
Deutsche Börse Group financial report 2016
In the following, the risk types are first illustrated with specific examples and then explained in detail.
■failure of a trading system
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
Risks which could jeopardise the Group's continued existence could arise only from a combination of
extreme events that have a very low probability:
▪ 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
1. Operational risk
Business risks
Legal offences and business practice
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.
24%
20%
Clearstream and
Eurex Clearing
Universal banks
■Credit risks and market risks
■ Operational risks
14%
Business risks
23%
Financial
risks
76%
0
risks
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
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.
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
"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.
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:
63%
Operational
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
Executive and Supervisory Boards | Management report | Governance | Financial statements | Notes
Risk report
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 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.
Risk metrics
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.
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 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.
Long-term developments
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
significantly smaller role for Deutsche Börse Group.
Risk profile
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.
79
80
Deutsche Börse Group financial report 2016
Low level of typical bank risk
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.
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.
Operational risk greater than financial and business risk
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).
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
■ very low (the probability of the risk occurring is less than 1 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)
■
high (the probability of the risk occurring is equal to or greater than 50 per cent)
■ 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
Business continuity management
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.
Emergency and contingency plans
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).
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.
■ Additional precautions to
ensure that operations
remain active in the event
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.
of a pandemic
■Contracts and agreed plans
of action for suppliers and
service providers to specify
emergency procedures
The estimated financial effects can be classified into the following four categories:
■low (the financial loss could be up to 10 per cent of EBIT)
■ medium (the financial loss could be up to 50 per cent of EBIT)
■ substantial (the financial loss could be up to 100 per cent of EBIT)
■risk to the business as a going concern (the financial loss of Deutsche Börse AG could be
the available risk cover amount)
up
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.
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
Suppliers
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.