Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Deutsche Boerse AG (DBOEF, Financial) achieved a total net revenue growth of 15% in 2024, surpassing their original guidance.
- The company reported an 8% organic increase in net revenues without treasury results, aligning with their expectations.
- EBITDA without treasury results increased by 14% on an organic basis, demonstrating strong operating leverage.
- The Investment Management Solutions segment showed significant progress, with SimCorp achieving a 17% increase in annual recurring revenue.
- Deutsche Boerse AG (DBOEF) proposed a dividend of EUR4 per share for 2024 and announced a EUR500 million share buyback program for 2025, reflecting strong shareholder returns.
Negative Points
- The Market Intelligence business within the ISS stocks segment faced headwinds, resulting in overall growth falling short of the original plan.
- The non-ESG business in the ISS STOXX segment experienced flat growth, impacted by headwinds in the Market Intelligence business.
- The company faced challenges in the Trading and Clearing segment due to low volatility in equity markets, affecting index derivatives revenue.
- Operating costs increased by 3% organically, driven by inflation and higher investments into growth and infrastructure.
- The Security Services segment showed limited operating leverage, with EBITDA flat year-on-year despite a 7% increase in ex-treasury revenues.
Q & A Highlights
Q: Can you explain the discrepancy between the 17% ARR growth and the 6% revenue growth for SimCorp and Axioma? How does this underpin future growth?
A: The 17% ARR growth reflects expected revenue growth for the next year, while the 6% revenue growth is due to IFRS revenue recognition standards. The SaaS transformation is progressing, with SaaS revenue increasing by one-third and on-premise revenue decreasing by 2%. This transformation supports double-digit growth expectations for SimCorp, aligning with Horizon 2026 targets. - Stephan Leithner, Co-CEO
Q: How are you addressing the non-ESG business challenges in ISS STOXX, and what impact could a potential gas price cap have on your business?
A: The non-ESG business faced headwinds, with index business growth at 2-3% due to lower volatility and volumes. We are restructuring the Market Intelligence business and enhancing our product spectrum to improve growth. Regarding gas price caps, while gas volumes were lackluster, we advocate for market-led solutions and do not foresee a significant impact on our business. - Gregor Pottmeyer, CFO
Q: What is the expected impact of regulatory changes on your business in 2025, particularly regarding active account requirements?
A: We anticipate positive impacts from regulatory changes, with active account requirements expected to increase the number of active clearing members significantly. This could drive strong growth in our fixed income and OTC clearing businesses, and these expectations are included in our guidance. - Gregor Pottmeyer, CFO
Q: Can you provide more details on the progress and future expectations for the short-term interest rate futures and IMS business growth?
A: We have achieved a 50% market share in short-term interest rate futures, with increased market share expected due to active account regulations. For IMS, we expect ARR growth of 13-18%, with SaaS transformation driving higher revenue recognition. This supports double-digit IFRS revenue growth over the next two years. - Gregor Pottmeyer, CFO
Q: How do you plan to achieve the high incremental margin in your revenue and EBITDA guidance, excluding treasury results?
A: We aim to increase the EBITDA margin significantly by leveraging economies of scale, with revenue growth outpacing cost increases. Our digitization efforts, including digital CSD and ICSD, and AI utilization, will drive efficiency and support our margin targets. - Gregor Pottmeyer, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
