Deutsche Boerse Ag · XETR:DB1
Deutsche Boerse — Deutsche Börse Group — Investor Day (June 2022)
66 slides from Deutsche Boerse's investor day presentation, Jun 29, 2022
Slide 1: Investor Day 2022
Investor Day 2022 29 June 2022
Slide 2: Agenda
Agenda I. Strategy update Theodor Weimer Chief Executive Officer II. Data & Analytics Stephan Leithner Member of the Executive Board III. Trading & Clearing Thomas Book Member of the Executive Board Commodities deep dive Peter Reitz CEO European Energy Exchange IV. Fund Services & Securities Service
Slide 3: Strategy update
Strategy update Theodor Weimer Deutsche Börse Group │ 29 June 2022 3
Slide 4: We create trust in the markets of today and tomorrow
Investor Day 2022 │ Strategy update We at Deutsche Börse create trust in the markets of today and tomorrow. Deutsche Börse Group │ 29 June 2022 4
Slide 5: Broad and deep offering in the market infrastructure sector
Investor Day 2022 │ Strategy update Broad and deep offering in the market infrastructure sector underscores our corporate purpose Data & Analytics Investment intelligence solutions that Securities Services 15% drive sustainable returns for our clients Global player in the Global leader in data
Slide 6: Well diversified portfolio of growth components drives Compass 2023 strategy
Investor Day 2022 │ Strategy update Well diversified portfolio of growth components drives our Compass 2023 strategy Key growth components Compass 2023 mid-term plan Organic 2019-23E III M&A I Secular II Cyclical Data & 15% Trend towards --- Data, analytics, Net revenue EBITDA Analytics passive & ES
Slide 7: On track to achieve Compass 2023 revenue and earnings targets
Investor Day 2022 │ Strategy update We are fully on-track to achieve our ambitious Compass 2023 revenue and earnings targets Compass 2023 net revenue development Compass 2023 EBITDA development Organic III M&A I Secular II Cyclical Total Guidance 5% + 0% + 5% = 10% Guidance 10% CAGR 2019-23E CAGR 20
Slide 8: Secular growth has become the reliable and consistent driver
Investor Day 2022 │ Strategy update ISecular growth has become the reliable and consistent driver for our business Main secular growth achievements Data & Strong growth in ESG products and services ~€4.3bn Analytics New clients for index and analytics Secular Product innovation (financial deri
Slide 9: Cyclical tailwinds are emerging as an additional growth driver
Investor Day 2022 │ Strategy update After a difficult year 2021, cyclical tailwinds are emerging as II an additional growth driver Observations in cyclical environment Low interest rate and low volatility environment post the ~€4.3bn global financial crisis resulted in strong cyclical headwinds Cy
Slide 10: Our M&A strategy proved successful and further opportunities are ahead
Investor Day 2022 │ Strategy update Our M&A strategy proved successful and further opportunities III are ahead Main M&A growth achievements Data & ~€4.3bn Analytics M&A We consistently implemented our bolt-on M&A strategy, 5% Trading & moving into higher growth sweet spots CAGR Clearing 2019-22
Slide 11: M&A strategy has helped to improve our business mix
Investor Day 2022 │ Strategy update III M&A strategy has helped to improve our business mix Track record of M&A strategy M&A helped to increase Data & Analytics net revenue share to 15% (from 5% in 2019) Share of recurring net revenue increased to >€4.2bn 55% (from 51% in 2019) investments in M&
Slide 12: Our minority investment approach has paid off
Investor Day 2022 │ Strategy update Our minority investment approach has paid off strategically and financially Main minority investments ~15% Income AI-powered tech platform to analyse <50% Minority investment portfolio includes a statement the societal impact of investments broad range of attrac
Slide 13: Financial targets framed by non-financial KPIs
Investor Day 2022 │ Strategy update Our financial targets are framed by a well-balanced set of non-financial KPIs System availability > 99.5% Employee satisfaction > 71.5% Net revenue EBITDA Compass 2023 10% 10% ESG net revenue growth CAGR CAGR mid-term plan > 10% p.a. 2019-23E Cash EPS CO2 emission
Slide 14: Key focus is on execution of the current plan
Investor Day 2022 │ Strategy update Key focus is on the execution of the current plan, but we are very well positioned for further growth 1 Continued secular growth Secular trends are expected to support organic growth for years to come; share of high growth businesses increased 2 Cyclical growth as
Slide 15: Compass 2023 assumptions have improved, accelerating organic growth
Investor Day 2022 │ Strategy update Compass 2023 assumptions have improved, resulting in accelerating organic growth Compass 2023 Current cycle outlook 2022+ (CAGR 2019-2023) (CAGR 2021-202X) Short term interest rates zero or negative Short term interest rates rising Changed macro Yield curve
Slide 16: Data & Analytics
Data & Analytics Stephan Leithner Deutsche Börse Group │ 29 June 2022 16
Slide 17: Data & Analytics as strategic focus area with recurring revenue
Investor Day 2022 │ Data & Analytics Data & Analytics segment as strategic focus area with highly recurring revenue profile and strong inorganic track record Net revenue development €m Strategic area of strong organic and inorganic 22 YTD y-o-y growth, significant expansion in the past few years
Slide 18: Data & Analytics as a strong franchise
Investor Day 2022 │ Data & Analytics Data & Analytics segment as a strong franchise of globally leading data, research, indexing and analytics expertise Best-in-class data business with Leading index and analytics business recurring revenues of 90% and client serving the investment intelligence
Slide 19: Qontigo partnering closely with clients on index, analytics and risk
Investor Day 2022 │ Data & Analytics Qontigo partnering closely with clients on index, analytics and risk solutions to empower investment intelligence A compelling product suite … … with strong growth prospects Established and globally leading provider of innovative index concepts – spanning off-t
Slide 20: ISS providing market leading research, data and analytics
Investor Day 2022 │ Data & Analytics ISS providing market leading, high-quality research, data and analytics across all business lines A compelling product suite … … with strong growth prospects Strong organic growth prospects to continue in context Global leader in providing objective governance of
Slide 21: Trading & Clearing
Trading & Clearing Thomas Book Deutsche Börse Group │ 29 June 2022 21
Slide 22: Our business and strategic objectives
Investor Day 2022 │ Trading & Clearing Our business and strategic objectives Global leader for listed & OTC FX trading, Foreign exchange clearing and technology 6% 17% Financial derivatives Global venue European cash equity and ETF/ Cash equities for benchmark indices ETN trading, crypto currency
Slide 23: Well positioned to capture growth opportunities
Investor Day 2022 │ Trading & Clearing Well positioned to capture growth opportunities Market environment – Industry trends – Change of situation Secular growth drivers intact Investment themes Changing interest rate regimes globally Active to passive, sustainability/ESG, Tailwind in ETD interes
Slide 24: Key developments driving business performance
Investor Day 2022 │ Trading & Clearing Key developments driving business performance Financial derivatives (Eurex) Commodities (EEX) Focus topic Equity index – A continued success story in today Product innovations lever global building commodity markets lead globally, well positioned for further Fi
Slide 25: Financial derivatives / equity index – product innovations lever global lead
Investor Day 2022 │ Trading & Clearing Financial derivatives / equity index – product innovations lever global lead Global index derivatives and futurisation ESG and micro derivatives Global leader today – scale and expand next Launch and build-up liquidity today – expand portfolio next Today Next T
Slide 26: Financial derivatives / fixed income – tailwind in ETD business
Investor Day 2022 │ Trading & Clearing Financial derivatives / fixed income – tailwind in ETD business, on-track in OTC Clearing Exchange traded OTC interest rate Repo derivatives [ETD] derivatives clearing Volume growth Volume growth Market share YTD 2022 ~18% YTD 2022 ~39% May 2022 ~22% Changing r
Slide 27: Cash equities – a leading European venue in ETFs
Investor Day 2022 │ Trading & Clearing Cash equities – a leading European venue, top positioned in exchange traded funds Cash market positioning & objectives ~1,900 listed products, ~34% European market share, European market leader in exchange traded funds >€23 billion avg. trading volume/month P
Slide 28: Foreign exchange – holistic product and trading suite
Investor Day 2022 │ Trading & Clearing Foreign exchange – holistic & complete product and trading suite on a global scale Secular growth drivers Deutsche Börse FX strategic path FX market: global, large and growing Aspiration - Continuously scale Structure: Stable between large international b
Slide 29: Commodities deep dive
Commodities deep dive Peter Reitz Deutsche Börse Group │ 29 June 2022 29
Slide 30: EEX Group developed into a global exchange group
Investor Day 2022 │ Commodities EEX Group developed out of very local specialised exchanges into a global exchange group Number of trading participants Our ambition is to become the global today commodity exchange of choice Global Commodity Exchange Group Our mission is to build secure, successful a
Slide 31: EEX Group bundles the commodity business
Investor Day 2022 │ Commodities EEX Group bundles the commodity business within Deutsche Börse Group Our market and service offering stretches across multiple commodity asset classes and covers trading as well as post-trading services Markets More than Operation of four regulated exchanges in Europe
Slide 32: EEX Group net revenue increasing 8-fold in a decade
Investor Day 2022 │ Commodities EEX Group is on a continuously strong growth path with net revenue increasing 8-fold in a decade Development Net revenue development 2012-2021 €m 342 Net revenue growth 302 289 ~8x 257 219 212 CAGR 175 178 +26% Strong performance in European energy 64 54 Creation
Slide 33: 2021 successful year with net revenue rising by 13%
Investor Day 2022 │ Commodities 2021 has been a successful year despite challenging market conditions, with net revenue rising by +13% Other 16% Power spot 21% 2021 2022 YTD Net interest income 5% Registry services 3% Net €336m €178m revenue Net revenue growth +13% +37% Market data 3% composition 20
Slide 34: EEX Group is the largest power exchange worldwide
Investor Day 2022 │ Commodities EEX Group is the largest power exchange worldwide and excellently positioned for further regional growth US Power EU & UK Power EU & UK Power Japan Power Derivatives Spot Derivatives Derivatives Futures and options trading Physical short-term trading Market lead
Slide 35: Gas markets globally connected but under stress
Investor Day 2022 │ Commodities Gas markets are globally connected now but are currently undergoing a period of stress during energy crunch Henry Hub EU & UK Gas EU & UK Gas Liquified Natural Gas (LNG) Gas Derivatives Spot Derivatives Derivatives North American natural gas Market leader in Europ
Slide 36: Global environmental markets on a major growth trend
Investor Day 2022 │ Commodities Global environmental markets are on a major growth trend – carbon pricing is key to curb emissions China ETS Memorandum of Understanding Korean ETS Memorandum of Understanding WCI UK ETS EU ETS Derivatives Coming soon Auction Services, NZ ETS Spot & Derivatives Auctio
Slide 37: Exchange trading and clearing provides a safe haven
Investor Day 2022 │ Commodities Exchange trading and clearing provides a safe haven for counterparties and market participants In times of extraordinary market volatility and strong price increases, EEX Group continued to provide a stable market infrastructure and reliable Exchanges and clearing hou
Slide 38: Targeted M&A transactions complement organic growth
Investor Day 2022 │ Commodities Targeted M&A transactions are part of our business strategy to complement organic growth 2017 2019 2020 Acquisition of US exchange and clearing Acquisition of commodity assets from Full integration of Paris-based house, enabled entry into US power and Nasdaq Futures E
Slide 39: EEX Group develops along five strategic vectors
Investor Day 2022 │ Commodities EEX Group develops along five strategic vectors Sustainability As energy and environmental exchange, we will actively contribute to achieve global net zero carbon targets and raise public awareness for climate change Create an ecosystem Scale and diversify of integrat
Slide 40: Key market trends underpin our growth ambitions
Investor Day 2022 │ Commodities Key market trends underpin our growth ambitions Key industry trends EEX Group position to grow Local sales strategy to support clients OTC to exchange Broad regional diversification of EU power and gas products European energy business in transition from uncleared
Slide 41: Fund Services & Securities Services
Fund Services & Securities Services Stephan Leithner Deutsche Börse Group │ 29 June 2022 41
Slide 42: Clearstream with accelerating growth in recent years
Investor Day 2022 │ Fund Services & Securities Services Clearstream with accelerating growth in recent years Clearstream 10-year growth track record Outlook Net revenue; €m Strategic acceleration by more clearly CAGR 2012-21 + 4 % Assets under custody delineating Clearstream Securities Services an
Slide 43: Clearstream set up along two business lines
Investor Day 2022 │ Fund Services & Securities Services Clearstream will be clearly set up along two business lines to allow for strategic acceleration Post-trade services consisting of two business lines … … with specific visions and strategies Fund Services Become the #1 ecosystem in Europe/Asia i
Slide 44: Fund Services with continued momentum
Investor Day 2022 │ Fund Services Fund Services with continued momentum: recent client wins reconfirm secular growth guidance; ongoing M&A focus Compass 2023 guidance Growth achievement Outlook Net revenue Net revenue growth growth CAGR 2019-23E >15% CAGR 2019-22 YTD +32% 5-7% SECULAR REVENUE Organi
Slide 45: Fund Services progress along four strategic vectors
Investor Day 2022 │ Fund Services Fund Services with significant progress along all four strategic vectors Strategic vectors Recent successes and highlights Fund Onboarded significant business portfolios from tier-1 banks on a global Services Accelerate recent scale with distribution services cross-
Slide 46: Securities Services deep dive
Securities Services deep dive Sam Riley Deutsche Börse Group │ 29 June 2022 46
Slide 47: Clearstream Securities Services global infrastructure
Investor Day 2022 │ Securities Services Clearstream Securities Services as key global securities services infrastructure with comprehensive custody setup Other (mainly data and connectivity) 13% Europe's largest CSD with ~30% of European assets under custody and >50% of all T2S settlements in volume
Slide 48: Clearstream benefiting from net interest income tailwind
Investor Day 2022 │ Securities Services Clearstream benefiting from cyclical net interest income tailwind with largely downside-protected custody revenues Development of cash balances Macro economic tailwind €bn CAGR 2012-21 +4% NII upside for coming years highlighted by recent 17.2 announcements
Slide 49: Five unique capabilities to outperform the market
Investor Day 2022 │ Securities Services Clearstream with five unique capabilities to structurally outperform the market on fee revenues Critical infrastructure provider as largest CSD and global Backbone of European capital 1 markets gateway to Europe, supported by partnerships with Europe's largest
Slide 50: Largest single European CSD serving as global gateway
Investor Day 2022 │ Securities Services Largest single European CSD serving as global gateway to 1 Europe Unique positioning… …further strengthened >16.5 60 >400 Infrastructures “at scale” (CSD, ICSD) Expand “center of gravity” dynamics European for European custody and settlement €tr AuC global m
Slide 51: Integrated offering beyond traditional CSD services
Investor Day 2022 │ Securities Services 2Integrated offering far beyond traditional CSD services with strong collateral management proposition Unique positioning… …further strengthened >50% 33 40 Build out asset servicing as USP for Holistic European custody revenue share directly markets equities
Slide 52: Unique position to leverage data and analytics
Investor Day 2022 │ Securities Services 3Unique position to leverage data and analytics and drive digital innovation Unique positioning… …further strengthened 96 10% >10 Launch next generation of predictive Unique set of proprietary data €m data and data and number of client solutions e.g., Collat
Slide 53: Productivity leader with future-ready IT architecture
Investor Day 2022 │ Securities Services Productivity leader with future-ready and connectable 4/5 IT architecture Unique positioning… …further strengthened 58% >95% 120 Industry-leading productivity STP rate for FTE/€tr AuC – Highly scalable, digitised 2021 all-in settlements amongst Continuousl
Slide 54: Upward adjustment of secular and cyclical growth guidance
Investor Day 2022 │ Securities Services Winning strategy with upward adjustment of ambitious secular and cyclical growth guidance Compass 2023 guidance Growth achievement1 Outlook Net revenue Net revenue growth growth CAGR 2019-23E 5-7% 0-3% CAGR 2019-22 YTD 0% SECULAR REVENUE Organic net revenue GR
Slide 55: Financial update
Financial update Gregor Pottmeyer Deutsche Börse Group │ 29 June 2022 55
Slide 56: Net revenue mix well diversified
Investor Day 2022 │ Financial update Our net revenue mix is very well diversified along multiple dimensions Data & Analytics Fund Services Other Other 20% 20% Index 15% 33% 9% of group Net of group Net revenue revenue Fund 93% 2022 YTD 74% 2022 YTD processing recurring recurring Fund 58% ESG Analyti
Slide 57: All segments contributed to growth (I/II)
Investor Day 2022 │ Financial update All segments contributed to our growth achievements (I/II) Data & Analytics Trading & Clearing Net revenue; €m Net revenue; €m 22 YTD y-o-y 22 YTD y-o-y +19% 1,906 +17%1 1,720 1,809 482 248 190 873 245 2019 2020 2021 2022 YTD 2023E 2019 2020 2021 2022 YTD 202
Slide 58: All segments contributed to growth (II/II)
Investor Day 2022 │ Financial update All segments contributed to our growth achievements (II/II) Fund Services Securities Services Net revenue; €m Net revenue; €m 22 YTD y-o-y 22 YTD y-o-y +7%2 + 11 % 1 383 843 827 835 NII 233 183 420 153 2019 2020 2021 2022 YTD 2023E 2019 2020 2021 2022 YTD 202
Slide 59: Net revenue performance on track
Investor Day 2022 │ Financial update Our net revenue performance is very well on track, driven by secular growth and M&A Net revenue development Secular growth ~470 €m Guidance 5% 0% 5% 10% CAGR 2019-23E Achievement 6% 0% 5% 11% CAGR 2019-22 YTD 2020 2021 2022 YTD Total ~€4.3bn Cyclical grow
Slide 60: Cyclical growth emerging as additional driver
Investor Day 2022 │ Financial update Cyclical growth is emerging as an additional growth driver due to emerging interest rate cycle Interest rate and volatility development Observations in cyclical environment 4.0 90 Low interest rate and low volatility environment post the 3.5 80 global financial
Slide 61: We managed our organic operating costs well
Investor Day 2022 │ Financial update We managed our organic operating costs well Operating cost development M&A as main driver for operating cost growth, especially ISS and Axioma CAGR 2019-22 YTD In order to support our secular ~8% ~3% ~ 11 % revenue growth ambition, we expect the organic opera
Slide 62: We slightly overachieved our EBITDA guidance
Investor Day 2022 │ Financial update We slightly overachieved our EBITDA guidance EBITDA development As planned, EBITDA development mainly driven by organic growth and CAGR 2019-22 YTD M&A to achieve target of 10% CAGR ~10% ~2% ~12% Stronger than expected performance of our minority investment p
Slide 63: Key characteristics of our business model
Investor Day 2022 │ Financial update Key characteristics of our business model High scalability Low risk profile All businesses of the Group are scalable, with Risk profile mainly driven by operational risks, highest levels in Trading & Clearing which are well managed Organic operating leverag
Slide 64: Business continues to develop above expectation in 2022
Investor Day 2022 │ Financial update Business continues to develop above expectation in 2022 Net revenue EBITDA €bn Guidance 2022 2022 ~4.3 target >3.8 Original guidance for 2022 was for net revenue of ~€3.8 billion and EBITDA of ~€2.2 billion 2.9 Due to the stronger than expected cyclical net 2
Slide 65: Compass 2023 assumptions have improved
Investor Day 2022 │ Financial update Compass 2023 assumptions have improved, resulting in accelerating organic growth Compass 2023 Current cycle outlook 2022+ (CAGR 2019-2023) (CAGR 2021-202X) Data & Analytics 15% ~10% Trading & Clearing 51% ~6-9% Fund Services 9% ~10% Organic Net revenue M&A Total
Slide 66: Disclaimer Contact
Disclaimer Contact Cautionary note with regard to forward-looking statements: This document contains forward-looking statements and statements of future expectations that reflect management's current views and assumptions with respect to future events. Such Deutsche Börse AG statements are subject t