Deutsche Boerse AG (DBOEF) Q3 2024 Earnings Call Highlights: Record Growth in Custody and ...

GuruFocus News
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In This Article:

  • Net Revenue: Expected to amount to around EUR5.8 billion for the full year.

  • EBITDA: Expected to range between EUR3.3 billion to EUR3.4 billion.

  • Net Revenue Growth in Custody: Achieved 14% growth.

  • Net Revenue Growth in Settlement: Achieved 37% growth.

  • Fund Assets Under Custody: Reached a record level of EUR3.8 trillion in December.

  • Assets Under Custody: Reached a record level of EUR15.2 trillion in September.

  • Settlement Transactions: Reached a record level of 8.7 million transactions in July.

  • Cash Balances: Increased by 16% to close to EUR19 billion in September.

  • Net Interest Income: Expected to be solidly above EUR700 million level from last year.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Deutsche Boerse AG (DBOEF) reported double-digit growth in financial derivatives, driven by temporary spikes in volatility.

  • The company achieved significant market share gains in commodities and EX trading in Europe, with new client acquisitions contributing to growth.

  • The fund service segment saw a 14% net revenue growth in custody and a 37% increase in settlement, reaching a record level of EUR3.8 trillion in fund assets under custody.

  • The security services segment benefited from increased cash balances and higher equity market levels, leading to record assets under custody of EUR15.2 trillion.

  • Deutsche Boerse AG (DBOEF) updated its guidance for 2024, expecting net revenue to reach around EUR5.8 billion, with EBITDA projected between EUR3.3 billion and EUR3.4 billion, aligning with market expectations.

Negative Points

  • The equity-related derivatives environment was more muted, impacting revenue growth in this segment.

  • There was a decline in margin fees in the power spot product, offsetting some of the revenue gains.

  • The market intelligence segment faced competitive pressures, leading to a downward trend in performance.

  • The ISS stocks business was behind plan, affecting overall growth expectations for 2024.

  • The company is cautious about M&A activities due to ongoing integration challenges, potentially limiting growth opportunities.

Q & A Highlights

Q: Can you provide an update on your M&A strategy, particularly regarding ISS stocks and potential acquisitions? A: We remain cautious with M&A due to ongoing integrations but have completed two bolt-on acquisitions over the summer. These acquisitions are small, under EUR10 million, and complement our existing offerings. Our financial flexibility remains strong, with surplus cash expected to exceed EUR900 million by year-end.

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