Deutsche Börse Group Annual report 2020 Annual report 2020 Contents
3 Executive and 171 Consolidated financial Supervisory Board statements/notes
3 Letter from the CEO 172 Consolidated income statement 5 The Executive Board 173 Consolidated statement of 6 The Supervisory Board comprehensive income 8 Report of the Supervisory Board 174 Consolidated balance sheet 176 Consolidated cash flow statement 178 Consolidated statement of changes in equity 20 Combined 179 Basis of preparation 188 Notes on the consolidated income statement management report 204 Notes on the consolidated statement of financial position 21 Fundamental information about the Group 252 Other disclosures 32 Report on economic position 277 Responsibility statement by the 52 Report on post-balance sheet date events Executive Board 53 Combined non-financial statement 278 Independent Auditor’s Report 74 Risk report 105 Report on opportunities 109 Report on expected developments 112 Deutsche Börse AG (disclosures based on the HGB) 287 Acknowledgements/contact/ 118 Remuneration report registered trademarks 152 Corporate governance statement 288 About this report 289 Financial calendar Deutsche Börse Group | Annual report 2020
Executive and Supervisory Boards | Letter from the CEO Management report Financial statements Notes Further information
Frankfurt/Main, 12 March 2021
Dear Shareholders, Ladies and Gentlemen,
2020 was an extraordinary year. It was defined by the coronavirus pandemic, which put a great strain on economies and companies around the world. In this difficult environment we at Deutsche Börse Group fulfilled all our growth targets.
Deutsche Börse increased its net revenue by 9 per cent in 2020 compared with the previous year. Structural growth came to 5 per cent as planned. Exactly as forecast, this resulted in a higher adjusted net profit of €1.2 billion for the period. Our business model has thus proven its resilience once more.
This is also demonstrated by the completion of our growth strategy, Roadmap 2020. It was a complete success in all three components of growth: growth in existing business; growth by acquisition; and expanding new technologies. We promised a great deal. And we have kept all our promises.
In our existing business, we achieved a secular growth of 5 per cent as planned. We also increased net profit for the period by an average of 12 per cent – in the middle of the announced range of 10 to 15 per cent.
We strengthened our business model by means of acquisitions. Just to mention the most important ones: the analytics provider Axioma, which we merged with STOXX to form Qontigo; UBS Fondcenter; and Institutional Shareholder Services (ISS), a leading US-based provider of governance solutions, sustainability data and analytics, which is our biggest step to date.
In technological terms, we have also made progress: we gained Google and SAP as new cloud partners in addition to Microsoft. And we advanced the cutting-edge blockchain technology, partly by means of our investment in HQLAx.
Our employees all over the world made a decisive contribution to this success. They put in an excepti- onal performance in the Covid-dominated year 2020, with 98 per cent of our workforce working from home at times. And despite all the difficulties, they remained as dedicated and motivated as ever. Some 900 new colleagues have joined us over this period, and together we are looking to the future with confidence.
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Executive and Supervisory Boards | Letter from the CEO Management report Financial statements Notes Further information
Where do we go from here? We are continuing the Roadmap: with Compass 2023. Our target of 5 per cent structural growth is still the same. We no longer expect to have any cyclical support for that, and so we are reinforcing our focus on acquisitions. For the first time, we are also defining a target here: an average of 5 per cent annual inorganic growth until 2023. That is ambitious but realistic. I am looking forward to more years of rapid growth ahead!
Growth nowadays always means sustainable growth, too. The transition towards a sustainable economy is one of the most important tasks of our age. And we too consider it to be our responsibility. ESG is part of our corporate culture and our Group strategy. Not only are we continuously expanding our own sustainability reporting. We are also a member of the United Nations Global Compact and promote the implementation of its principles in the areas of human rights, labour, the environment and anti- corruption. Our indices and ratings help companies to become more sustainable and at the same time support investors seeking to invest in these companies. This was also one reason for our takeover of ISS, which plays a leading global role in sustainability ratings. Our own ESG product portfolio for trading completes the picture and continues to grow.
We at Deutsche Börse have proved to be a pillar of stability in the Covid-dominated year 2020, a time of great uncertainty and ensuing volatility. In the heat of the moment, there were some calls for radical political intervention in market mechanisms, but we refuted them calmly and knowledgeably, and so kept markets stable. That is our duty as a provider of market infrastructure. It also shows that policy- makers acknowledge the importance of capital markets and our role in them. That is something we appreciate, not least because we rely on political support to hold our ground in competition with the USA and Asia.
Dear shareholders, last year was a real test of character for all of us. I therefore thank you all the more for the trust that you have placed in us. In this context, I am particularly pleased that, for 2020, we can again propose an increase in the dividend – to €3.00 per share from €2.90 the previous year. This distribution leaves us enough scope to prepare the ground in 2021 for further growth by means of investment, mergers and acquisitions – from which you will benefit, too. Please do come with us on our journey – I am counting on you. Thank you!
Yours sincerely,
Theodor Weimer Chief Executive Officer
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Executive and Supervisory Boards | The Executive Board Management report Financial statements Notes Further information
The Executive Board
Theodor Weimer, *1959 Heike Eckert, *1968 Dr. rer. pol. Graduate degree in Economics Wiesbaden (Diplom-Volkswirtin) Nationality: German Oberursel Chief Executive Officer, Nationality: German Deutsche Börse AG Member of the Executive Board, Deutsche Börse AG, Christoph Böhm, *1966 responsible for HR (Director of Dr.-Ing. Labour Relations) & Compliance Hamburg Nationality: German Stephan Leithner, *1966 Member of the Executive Board Dr. oec. HSG and Chief Information Officer/ Bad Soden am Taunus Chief Operating Officer, Nationality: Austrian Deutsche Börse AG Member of the Executive Board, Deutsche Börse AG, Thomas Book, *1971 responsible for Pre- & Post-Trading Dr. rer. pol. Kronberg im Taunus Gregor Pottmeyer, *1962 Nationality: German Graduate degree in Member of the Executive Board, Business Administration Deutsche Börse AG, (Diplom-Kaufmann) responsible for Trading & Clearing Bad Homburg v.d. Höhe Nationality: German Member of the Executive Board and Chief Financial Officer, Deutsche Börse AG
Former members of the Executive Board
Hauke Stars, *1967 (until 30.06.2020) Engineering degree in applied computer science (Diplom-Ingenieurin Informatik), MSc by research in Engineering Königstein im Taunus Nationality: German Member of the Executive Board, Deutsche Börse AG, responsible for Cash Market, Pre-IPO & Growth Financing and Human Resources/Director of Labour Relations
As at 31 December 2020 (unless otherwise stated)
Detailed information about the members of the Executive Board and their appointments to supervisory bodies of other companies or comparable control bodies, as well as their CVs can be found on the internet under: www.deutsche-boerse.com/execboard
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Executive and Supervisory Boards | The Supervisory Board Management report Financial statements Notes Further information
The Supervisory Board
Martin Jetter, *1959 Dr. Andreas Gottschling, *1967 Michael Rüdiger, *1964 Chairman Member of the Board of Directors Independent Management Senior Vice President & of Credit Suisse Group AG, Consultant, Utting am Ammersee Chairman IBM Europe, Zurich, Switzerland Nationality: German Madrid, Spain Nationality: German Board member Nationality: German Board member since 19 May 2020 Board member since 1 July 2020 since 24 May 2018 Carsten Schäfer,1) *1967 Susann Just-Marx,1) *1988 Expert, staff member in Jutta Stuhlfauth,1) *1961 Head of Sales Clearing Non-Financial Risk Deputy Chairwoman European Energy Deutsche Börse AG, Lawyer, M.B.A. (Wales) Exchange AG, Leipzig Frankfurt/Main Staff member in the Group Nationality: German Nationality: German Organisational Services Board member Board member Deutsche Börse AG, since 15 August 2018 since 28 August 2018 Frankfurt/Main Nationality: German Achim Karle,1) *1973 Charles G.T. Stonehill, *1958 Board member Staff member in the Equity & Green & Blue Advisors LLC, since 16 May 2012 Index Sales EMEA Founding Partner, New York Eurex Frankfurt AG, Frankfurt/Main Nationality: British, US-American Nadine Absenger,1) *1975 Nationality: German Board member Head of Legal and Legal Policy Board member since 8 May 2020 ver.di federal administration, since 28 August 2018 Berlin Clara-Christina Streit, *1968 Nationality: German Cornelis Johannes Independent Management Board member Nicolaas Kruijssen,1) *1963 Consultant, Bielefeld since 16 May 2018 Head of Service Desk & Nationality: German, US-American Onsite Support Board member Markus Beck,1) *1964 Deutsche Börse AG, since 8 May 2020 In-House Legal Counsel Frankfurt/Main Senior Expert, staff member Nationality: Dutch Gerd Tausendfreund,1) *1957 in the Corporate & Board member Trade union secretary in the Regulatory Legal since 15 August 2018 financial services department Deutsche Börse AG, ver.di Hesse region, Frankfurt/Main Barbara Lambert, *1962 Frankfurt/Main Nationality: German Independent Management Nationality: German Board member Consultant, La Rippe, Switzerland Board member since 15 August 2018 Nationality: German, Swiss since 16 May 2018 Board member Karl-Heinz Flöther, *1952 since 16 May 2018 Amy Yip, *1951 Independent Management Managing Partner Consultant, Kronberg im Taunus RAYS Capital Partners Limited, Nationality: German Hong Kong Board member Nationality: Chinese (Hong Kong) since 16 May 2012 Board member since 13 May 2015
1) Employee representative
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Executive and Supervisory Boards | The Supervisory Board Management report Financial statements Notes Further information
Former members of the Supervisory Board
Dr. Joachim Faber, *1950 Independent Management Consultant, Grünwald Nationality: German Board member until 19 May 2020
Joachim Nagel, *1966 Deputy Head of Banking Department Bank for International Settlement (“BIS”) Nationality: German Board member until 30 June 2020
As at 31 December 2020 (unless otherwise stated)
Detailed information about the members of the Supervisory Board, their additional appointments to supervisory bodies of other companies or comparable control bodies, as well as their CVs can be found on the internet under www.deutsche-boerse.com/supervboard
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Executive Board and Supervisory Board | Report of the Supervisory Board Management report Financial statements Notes Additional information
Report of the Supervisory Board
During the year under review, which was dominated by the global spread of COVID-19, 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, monitored its work and were involved in all fundamental decisions.
In financial year 2020 we advised on the development of the Group strategy Compass 2023, which will continue the Roadmap 2020 strategy from 2021. On this basis we also revised the remuneration system for the members of the Executive Board of Deutsche Börse AG. The Supervisory Board was also regularly involved in an advisory capacity in the majority acquisition of Institutional Shareholder Services Inc. (ISS) by Deutsche Börse AG and Deutsche Börse Group’s other activities to buy and sell companies or parts thereof. The Executive Board informed us on an ongoing basis about the impact of the COVID-19 pandemic on Deutsche Börse Group.
At our meetings, the Executive Board provided us with comprehensive and timely information in accordance with the legal requirements. The high frequency of plenary and committee meetings and workshops ensured an active exchange of information between the Supervisory Board and the Executive Board. In addition, the CEO kept the Supervisory Board Chair continuously and regularly informed of the current developments affecting the company’s business, significant transactions, upcoming decisions and the long-term outlook and discussed these issues with him.
We held a total of eleven plenary meetings during 2020, including six extraordinary meetings. Four Supervisory Board workshops took place on the subjects of technology (March and June), strategy (April) and legal and compliance (September). All meetings and workshops were carried out as planned despite the travel and social restrictions due to the COVID-19 pandemic, thanks to strict hygiene measures.
The average attendance rate for all Supervisory Board members at the plenary and committee meetings was 99 per cent during the year under review.
The Supervisory Board members’ detailed attendance record is as follows:
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Attendance of Supervisory Board members at meetings in
Meetings Attendance Attendance (Plenary and at plenary at committee committees) meetings meetings %
artin etter ( hair since ay ) oachim aber ( ember and hair until ay ) utta Stuhlfauth (Deputy hair) adine Absenger arkus Beck arl ein löther Andreas Gottschling (since ul ) Susann ust ar Achim arle ornelis rui ssen Barbara ambert oachim agel (until un ) ichael diger (since ay ) arsten Sch fer harles Stonehill lara hristina Streit Gerd Tausendfreund Amy ip Average attendance rate1) 99
) Attending workshops is optional for Supervisory Board members. Workshop attendance is therefore not taken into account in the determination of the average attendance rate.
Topics addressed during plenary meetings of the Supervisory Board
In the reporting year we dealt intensively with the ongoing strategic direction of Deutsche Börse Group. The Supervisory Board was involved at an early stage in developing the Group strategy ompass . It advised the ecutive Board on all aspects of the strategy. In the reporting year this also included an update to the strategy to reflect the impact of the ID pandemic. or details on the growth strategy, please refer to the “Deutsche Börse Group’s objectives and strategies” section in the combined management report.
We have revised the remuneration system for the ecutive Board of Deutsche Börse AG. The structure and key variables of performance measurement were realigned with Deutsche Börse Group’s clear focus on profitable growth and the even greater importance of ac uisitions and partnerships to achieve the growth targets set by ompass . We have designed a large part of variable ecutive Board remuneration to be long term and dependent on achieving several sustainability targets relating to the environment, social matters and governance, known as SG criteria. The revised remuneration system adopted by the Supervisory Board was developed in close cooperation with internal and e ternal stakeholders and will be presented to the Annual General eeting for approval on ay . lease refer to the “Remuneration report” section for details.
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n the reporting year we also looked closely at various e ternal ac uisitions and e uity investments to e pand and strengthen our business ne focus was on the majority ac uisition of nstitutional hareholder ervices nc the main aim of which is to sei e the global growth opportunities offered by the trend towards sustainable investments urthermore with the ac uisition of uantitative Brokers we brought on board an innovative global fintech firm and we completed the takeover of the fund distribution business of B G to e pand the nvestment und ervices segment
Another key area of the Supervisory Board’s work in the reporting year was the decisions taken on the future composition of the ecutive Board and the changes to the members of the ecutive Board and upervisory Board
t the beginning of the reporting year the upervisory Board e tended Theodor Weimer’s term of office as Chair of Deutsche Börse AG’s Executive Board until 31 December 2024. The Supervisory Board appointed Heike Eckert as of 1 July 2020 as an ordinary member of Deutsche Börse AG’s Executive Board where she is responsible for the newly formed division uman Ressources and ompliance he appointment of the two ecutive Board members homas Book rading and learing and tephan eithner re and ost trading was e tended by the upervisory Board until une t the end of the reporting year the upervisory Board also e tended the appointment of hristoph Böhm until ctober By e tending the appointments of the ecutive Board hair and three ecutive Board members in the reporting year we have ensured the continuity of the board’s composition t the same time we were able to bring eike ckert a long standing manager at Deutsche Börse Group on to the ecutive Board lease refer to the “Personnel matters” section for details
fter the nnual General eeting of Deutsche Börse G on ay which had to take place for the first time online due to the D restrictions artin etter was elected hair of the upervisory Board as planned ichael R diger was elected to Deutsche Börse AG’s Supervisory Board by the nnual General eeting and ndreas Gottschling was appointed by court order lease refer to the “Personnel matters” section for details
n the year under review the upervisory Board again had regular and intensive discussions concerning ongoing proceedings by the Public Prosecutor’s Office in Cologne regarding the conception and settlement implementation of securities transactions by market participants over the dividend date (cum/ex transactions). In the opinion of the Public Prosecutor’s Office, these market participants used such transactions to make unjustified ta refund claims hese investigation proceedings also target current and former employees of Deutsche Börse Group companies as well as e ecutive board members of subsidiaries of Deutsche Börse G
nother important subject for the upervisory Board was the litigation and legal proceedings involving learstream Banking in the and u embourg in connection with ranian clients and assets
In 2020 we also dealt with Deutsche Börse Group’s preparations for the United Kingdom to leave the European Union (“Brexit”) and the related opportunities and risks he efficiency suitability and effectiveness of the internal control system and the handling of findings by internal control functions and e ternal auditors and regulatory authorities were another important area of our work
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In addition, we prepared the change in the external auditors of Deutsche Börse AG due to take place in 2021, which is to be put to the vote at the Annual General eeting 2021.
In the period between October and December the Supervisory Board Chair met virtually with institutional investors and proxy advisers to discuss with them current governance topics relating to the Supervisory Board. These conversations centred on the restructuring of the remuneration system for the Executive Board on the basis of the new corporate strategy, personnel decisions concerning the Supervisory Board and Executive Board and the Supervisory Board’s efficiency initiative carried out in the course of the year. The Supervisory Board Chair summarised his dialogue with investors in the plenary meetings.
Our plenary meetings and workshops1 during the reporting period focused particularly on the following issues
In our ordinary meeting on 14 February 2020 we extended Theodor Weimer’s term of office as Chair of Deutsche Börse AG’s Executive Board until 31 December 2024. We also addressed in detail the preliminary results for the 201 financial year and the dividend proposed by the Executive Board for that year. ollowing a detailed examination we set the amount of the variable remuneration payable to the Executive Board for the 201 financial year. urthermore, we adopted the combined corporate governance statement and the corporate governance report 201 . The Executive Board informed us in detail about the results of the staff survey carried out in late 201 and the implementation status of the H strategy measures. We also discussed succession planning for the senior management. The Executive Board informed us in a regular cycle about the status of cross divisional client relationship management. inally we addressed the new re uirements for monitoring related party transactions in accordance with the Act to Implement the Second Shareholder ights Directive (A UG II).
In the Technology Workshop on 6 March 2020 we looked closely at the sub ects of machine learning and automation. This particularly focused on current use cases and initiatives at Deutsche Börse Group that will continue to shape the workplace of the future in this respect.
In the ordinary meeting on 6 March 2020 we appointed Heike Eckert, a long standing manager at Deutsche Börse Group, to the Executive Board of Deutsche Börse AG with effect from 1 July 2020. We dealt with the 201 financial statements of Deutsche Börse AG and the 201 consolidated financial statements in the presence of the external auditors. We approved the 201 financial statements and consolidated financial statements, having carried out our own detailed examination, in line with the recommendation of the Audit Committee. The Committee had previously examined the documents in depth, in preparation for our meeting. We also adopted the report of the Supervisory Board for 201 , the revised remuneration system for the Executive Board members from 2020 in accordance with section a Stock Corporation Act (AktG) and the agenda for the Annual General eeting 2020. The Executive Board informed us of the personnel situation in Deutsche Börse Group. The Executive Board also reported on the current status of the investigation proceedings into securities transactions by market participants over the dividend date (cum/ex transactions) and informed us in detail about the results of the effectiveness analysis for the existing control mechanisms which had been carried out in this context. In addition, the Executive Board informed us about the current status of litigation involving Clearstream Banking S.A. in the USA and uxembourg in connection with Iranian clients and assets. inally, we looked at the topic of sustainable finance and the Executive Board informed us about its concept for steering sustainability performance across the company by means of an ESG dashboard.
1 See also the explanations on training and development measures for the members of the Supervisory Board in the corporate governance statement.
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n the extraordinary meeting on 24 March 2020 e held a separate meetin to address the on oin C D 1 situation in depth and then decided by a subse uent circulation procedure to hold the Annual General eetin 2020 completely online.
n another extraordinary meeting on 29 April 2020 e approved the refinancin of a maturin hybrid bond issued by Deutsche Börse AG. The Audit Committee had previously loo ed closely at this sub ect.
n the Strategy Workshop on 29 April 2020 e examined in detail and discussed the Group strate y drawn up by the Executive Board for the next three years (“Compass 2023”). The Executive Board also reported on the current and expected impact on Deutsche Börse Group of the C D 1 pandemic includin its effect on certain forms of securities tradin . The Strate y Committee of the Supervisory Board had previously discussed the Compass 2023 Group strate y in detail at its meetin on arch 2020.
n the ordinary meeting on 19 May 2020 e discussed ith the Executive Board the upcomin Annual General eetin hich oachim aber Supervisory Board member and lon standin Chair of Deutsche Börse AG’s Supervisory Board attended for the last time.
n the extraordinary meeting on 19 May 2020 e elected artin etter as the ne Chair of Deutsche Börse AG’s Supervisory Board. We also welcomed Michael Rüdiger as a new member of Deutsche Börse AG’s Supervisory Board and adopted chan es to the members of the Supervisory Board committees.
n another Technology Workshop on 17 June 2020 e loo ed at current trends in cyber security. Available technical options ere presented to support the or of the Supervisory Board durin C D 1 and the related travel and social restrictions.
n the ordinary meeting on 18 June 2020 e elected Andreas Gottschlin to succeed oachim a el on Deutsche Börse AG’s Supervisory Board and initiated his appointment by the competent district court. We discussed in detail the succession plannin for the Executive Board. nce a ain e made extensive en uiries about the status uo of the investi ation proceedin s relatin to cum ex transactions at Deutsche Börse Group discussin them ith the Executive Board. We dealt ith a revision of the process for ad hoc announcements follo in a chan e in Ba in’s ssuer Guidelines. We too an early loo at the preparation of the remuneration report for 2020 in li ht of A G re uirements and the feedbac received on the remuneration system for the Executive Board of Deutsche Börse AG hich as approved at the Annual General eetin on 1 ay 2020.
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n the ordinary meeting on 17 September 2020 we confirmed the reappointment of Thomas Boo and Stephan eithner and extended their contracts as Executive Board members until 30 une 202 . The Executive Board informed us thoroughly about the potential ac uisition of nstitutional Shareholder Services nc. ( SS) and the upcoming disposal of Borsa taliana S.p.A. from the perspective of Deutsche Börse AG. We also discussed in detail the outline of a new remuneration system for Deutsche Börse AG’s Executive Board in view of the new Group strategy Compass 2023 particularly evaluating different implementation concepts and investor expectations. We again dealt with the status of investigation proceedings into cum ex transactions and the litigation involving Clearstream Ban ing S.A. in the SA and uxembourg. The Supervisory Board Chair informed us in depth about the current status of the Supervisory Board’s efficiency initiative, which began in the second half of the year. The initiative is intended to increase the time available to individual Supervisory Board members to strengthen their advisory function for business and strategy related topics. inally we loo ed at the upcoming Supervisory Board elections and after review confirmed the ualification re uirements for the Supervisory Board.
n a Supervisory Board workshop on 17 September 2020 on legal and compliance topics we loo ed at the main aspects of corporate liability the management of conflicts of interest and aspects of the prevention of mar et abuses.
n an extraordinary meeting on 28 October 2020 we approved the ma ority ac uisition of nstitutional Shareholder Services nc. ( SS) after a detailed review. The Executive Board also notified us of the updates to the Compass 2023 strategy made in response to the C D pandemic. n addition the Executive Board reported on the current status of litigation involving Clearstream Ban ing S.A. in the SA and uxembourg.
n the ordinary meeting on 3 December 2020 we adopted the budget for 202 reappointed Christoph Böhm and extended his contract as an Executive Board member until 3 ctober 202 . The Executive Board reported in detail about the results of the annual staff survey. t also informed us about the implementation status of the personnel strategy and the revisions that had been made to the strategy to reflect C D . We gained an overview of the development of recently ac uired companies and of the equity investments in the context of Deutsche Börse Group’s corporate venturing activities. We again dealt with the status of investigation proceedings into cum ex transactions and the litigation involving Clearstream Ban ing S.A. in the SA and uxembourg in connection with ranian clients and assets. We discussed and adopted the results of our annual effectiveness review in accordance with section D. 3 of the German Corporate Governance Code (GCGC) the annual suitability assessment of the Supervisory Board and the Executive Board, as well as the upcoming year’s training plan for the Supervisory Board. urthermore we adopted the Declaration of Conformity pursuant to section A tiengeset (A tG German Stoc Corporation Act) for the 2020 financial year. The Declaration of Conformity can be downloaded at www.deutsche boerse.com declcompliance. We adopted amendments to the bylaws for the Executive Board and the Supervisory Board following the revision of the GCGC the Supervisory Board’s efficiency initiative and the Act to mplement the Second Shareholder Rights Directive (AR G ). n line with section D. GCGC the Chair of the Audit Committee notified the Supervisory Board of the procedure for assessing the uality of the audit of the financial statements and its result.
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Executive Board and Supervisory Board | Report of the Supervisory Board anagement report inancial statements otes Additional information
At the extraordinary meeting on 16 December 2020, we primarily addressed issues regarding Executive Board remuneration. We adopted a new remuneration system for the Executive Board of Deutsche Börse AG to ta e effect on anuary , along with the revised service contracts for Executive Board members to implement this new remuneration system, sub ect to approval by the Annual General eeting in . he Supervisory Board hair also reported in detail on his meetings with investors and proxy advisers in the course of the annual Governance oadshow. n addition we adopted the targets for the Executive Board for and loo ed at the draft of the remuneration report for .
n view of the D pandemic the Supervisory Board meetings solely took place at the company’s headquarters in the reporting year, using its existing video conferencing technology. artin etter, the Supervisory Board hair, presented the agenda before each meeting and informed the Supervisory Board about current matters. At the end of each meeting the Supervisory Board members tal ed openly and effectively among themselves, without the Executive Board members, about the meeting itself and general topics.
ommittee wor
During the year under review, the Supervisory Board had seven committees at its disposal and, for a limited time only, another committee in the form of the hairman Selection ommittee. he hairman Selection ommittee dealt with preparations for the new election of the Supervisory Board hair after the Annual General eeting and was automatically dissolved once artin etter had been elected as the new Supervisory Board hair on ay . he committees are primarily responsible for preparing the decisions to be ta en by, and topics to be discussed in, the plenary meetings. Additionally, the Supervisory Board has delegated individual decision ma ing powers to the committees, to the extent that this is legally permissible. he individual committee chairs reported in detail to the plenary meetings on the wor performed by their committees. he hair of the Supervisory Board chairs the omination ommittee, the Strategy ommittee, the Steering ommittee and the ediation ommittee. Details on the members and duties of the Supervisory Board committees in can be found in the “ orporate Governance Statement” section of the combined management report. he committees focused on the following ey issues
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Executive Board and Supervisory Board | Report of the Supervisory Board ana ement epo t nanc al statements otes t onal n o mat on
Audit Committee (six meetings during the reporting period) ◼ nanc al ss es espec ally cap tal mana ement an ta tems ◼ nanc al epo t n e am nat on n the p esence o the e te nal a to s o the ann al nanc al statements o e tsche se an o the consol ate nanc al statements o the com ne mana ement epo t an the a t epo t as ell as o the hal yea ly nanc al epo t an the a te ly statements ◼ tat to y a to s o ta n n the statement o n epen ence om the e te nal a to s an mon to n the external auditors’ indepen ence ss n the en a ement lette to the e te nal a to s a ee n the external auditors’ fee; defining the focal areas of the audit; discussing non a t se ces en e e y the e te nal a to s an the ass nment o the e te nal a to s to con ct an a t o the com ne non nanc al statement ◼ epa at ons o the chan e o e te nal a to s as o nanc al yea ◼ nte nal cont ol systems sc ss on o est ons elat n to sk mana ement compl ance an cap tal ma ket compl ance the nte nal cont ol an a t system sc ss on o the metho s an systems se an the e c ency a e acy an e ect eness ◼ Deutsche Börse AG’s dividend and the Group’s budget ◼ Discussion and formal adoption of the Audit Committee’s tasks for the coming yea ◼ Preparation of the Supervisory Board’s resolution on the corporate governance and remuneration epo ts as ell as on the co po ate o e nance statement n acco ance th sect on o the an els eset ch e man omme c al o e an the ecla at on o con o m ty n acco ance th sect on o the kt ◼ eas es to close nte nal an e te nal a t n n s ◼ ana ement o o tso c n an cont ol ame o ks o ntellect al p ope ty ◼ ana ement o e lato y chan es ◼ n est at on p ocee n s elat n to c m e t ansact ons ◼ epo t on spec c compl ance a ts ◼ oa map to s ppo t the o p st ate y ompass
Nomination Committee (twelve meetings during the reporting period) ◼ ec t e oa em ne at on sc ss on o the e tent to h ch the mem e s o the ec t e oa ha ach e e the ta ets ete m nat on o the a a le em ne at on o ec t e oa mem e s o p el m na y sc ss on o the e tent to h ch n al mem e s o the ec t e oa ha e ach e e the ta ets o p epa at on o the a opt on o the n al ta ets o the mem e s o the ec t e oa o sc ss on o the em ne at on epo t an the e es n o the em ne at on epo t o ◼ e sonnel matte s sc ss on o s ccess on plann n o the ec t e oa an s o nate mana ement le els p epa at on o a ecommen at on to the plena y meet n on appo nt n e ke Eckert to Deutsche Börse AG’s Executive Board; preparat on o a ecommen at on to the plena y meet n to eappo nt homas ook tephan e thne an h stoph hm sc ss on o e te nal pe so y oa man ates hel y heo o e me an a ke ta s ◼ e e an p epa at on o a ecommen at on to the plena y meet n to e se the ec t e oa em ne at on system an ec t e oa se ce cont acts e e o the app op ateness o ec t e Board remuneration, and of members’ pensionable income ◼ epa at ons o the elect on o the sha ehol e ep esentat es to the pe so y oa y the o na y nn al ene al eet n sea ch an p e select on y sha ehol e ep esentat e o a s ccesso to oach m a e as pe so y oa mem e o the pe so y oa ha see ha man elect on omm ttee p epa at on o ne elect ons to the pe so y oa o the co t appo ntment o a pe so y oa mem e ◼ eal n th the s ta l ty assessment e ect eness e e an t a n n sche le ◼ sc ss on o the es lts o the ann al sta s ey
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◼ eport on the Governance oadsho by the Supervisory Board Chair, also on investor expectations of a ne remuneration system for the Executive Board
Risk Committee (five meetings during the reporting period, including one joint meeting with the Technology Committee) ◼ Discussion about the uarterly compliance and risk management reports ◼ ngoing enhancements to Group ide compliance and risk management and the harmonisation of internal control systems ◼ Deutsche Börse Group’s risk strategy and risk culture ◼ perational risk, information security and business continuity management ◼ isk management in Eurex and Clearstream subgroups ◼ mpact of potential Brexit scenarios ◼ mplemenation of ne regulatory re uirements ◼ ntegration ithin the scope of company ac uisitions ◼ no your customer processes at the Clearstream and Eurex subgroups ◼ Discussion of open audit findings and plan of action to address them ◼ Determining the risk appetite of Deutsche Börse Group for ◼ Discussion of the C oadmap and the related plan of action ◼ Discussion of the CSD compliant Eurex buy in agent service ◼ Deutsche Börse Group’s recovery and resolution plans ◼ Discussion of topics relating to tax risk
Strategy Committee (one meeting during the reporting period) ◼ Discussion of the medium term gro th strategy of Deutsche Börse Group Compass
Technology Committee (four meetings during the reporting period, including one joint meeting with the Risk Committee) ◼ Ongoing development of Deutsche Börse Group’s IT strategy and implementation of a holistic technology transformation ◼ Discussion of big data initiatives and the use of artificial intelligence ◼ Discussion of cloud computing, cloud partners and security strategies ◼ he digital orkplace under C D ◼ Discussion of data security, the Cloud Act and the data centre strategy ◼ nformation security, risk management and cyber resilience ◼ Discussion of malfunctions in the system and measures taken ◼ ntroduction of the A analytics platform ◼ Discussion of post merger integration of the BS fund distribution platform ondcenter AG
Chairman Selection Committee (all meetings held in 2019) ◼ Preparations for the ne election of the Supervisory Board Chair after the Annual General eeting
Chairman’s Committee (no meeting during the reporting period) he Chairman’s Committee convenes on the initiative of the Chair of the Supervisory Board; it deals ith time sensitive affairs and prepares the corresponding Supervisory Board plenary meetings here as no need for the Chairman’s Committee to hold a meeting during the year under revie
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ia i n C mmi n m in s rin h r r in ri The ediation Committee is set up y la ursuant to section of the it estG it su mits proposals to the upervisory Board for the appointment or dismissal of ecutive Board mem ers hen a t o thirds ma ority has not een reached The ediation Committee only convenes as re uired There as no need for the ediation Committee to hold a meeting during the year under revie
udit of the annual and consolidated financial statements
G G irtschaftspr fungsgesellschaft domiciled in Berlin G audited the annual financial statements of Deutsche Börse G the consolidated financial statements and the com ined management report including the com ined non financial statement for the financial year ended Decem er together ith the accounting system and issued an un ualified audit opinion The condensed financial statements and interim management report contained in the half yearly financial report for the first si months of ere revie ed y G The documents relating to the financial statements and the reports y G ere su mitted to us for inspection and e amination in good time The lead auditors laus lrich feiffer and ven Olaf eit attended the relevant meetings of the udit Committee and the plenary meeting of the upervisory 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 operation of the company and the Group and ere availa le to provide supplementary information The audit of compliance ith all relevant statutory provisions and regulatory re uirements did not give rise to any o ections G 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 e impaired
The udit Committee discussed the financial statement documents and the reports y G in detail ith the auditors and e amined them carefully itself It is satisfied that the reports meet the statutory re uirements under sections and of the GB in particular The committee reported to the upervisory Board on its e amination and recommended that it approves the annual financial statements and consolidated financial statements
Our o n e amination – during a plenary meeting – of the annual financial statements consolidated financial statements and the com ined management report including the non financial statement did not lead to any o ections and e concurred ith the results of the audit performed y the auditors e therefore approved the result of the audit e approved the annual financial statements prepared y the ecutive Board and the consolidated financial statements at our meeting on arch , 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 Bilan ge inn in detail ith the ecutive Board The discussion covered company’s liquidity, its financial planning and shareholders’ interests. ollo ing this discussion and its o n e amination the udit Committee concurred ith the ecutive Board’s proposal for the use of appropriation of the unappropriated surplus fter e amining this ourselves, the plenary meeting of the Supervisory Board also approved the Executive Board’s proposal.
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ersonnel matters
The following personnel changes were made to the Supervisory Board during the reporting period
n line with the articles of association the Supervisory Board consists of sixteen members. ichael diger and Andreas Gottschling were elected or appointed by the court as two of the eight shareholder representatives on the Supervisory Board.
ichael diger succeeds oachim aber, who stepped down from the Supervisory Board with effect from the close of the Annual General eeting on ay . artin etter was elected as Supervisory Board Chair in an extraordinary Supervisory Board meeting on ay .
Andreas Gottschling succeeds oachim agel who stepped down from the Supervisory Board with effect from une .
ur most sincere than s go to oachim aber and oachim agel for their creative and constructive wor on the Supervisory Board of Deutsche Börse AG. e also than oachim aber for his exceptional leadership of the Supervisory Board as its Chair since .
ichael diger and Andreas Gottschling received a detailed introduction to their wor for the Supervisory Board.
The following personnel changes were made with regard to the Executive Board in .
au e Stars resigned as a member of Deutsche Börse AG’s Executive Board as of 30 June 2020, before her contract ended. e appointed ei e Ec ert to the Executive Board of Deutsche Börse AG with effect from uly . She is responsible for the newly formed division uman esources and Compliance. ei e Ec ert has many years of managerial experience. She has wor ed for Deutsche Börse Group in Germany and abroad since , most recently as Deputy Chair of the Executive Board and Chief perating fficer of Eurex Clearing AG.
e than au e Stars for her responsible and highly successful wor .
The Supervisory Board also too important decisions about the future composition of the Executive Board.
At the beginning of the year the Supervisory Board extended Theodor Weimer’s term of office as Chair of Deutsche Börse AG’s Executive Board until 31 December 2024. In addition, the Supervisory Board extended the appointment of the two Executive Board members Thomas Boo Trading and Clearing and Stephan eithner re and ost trading until une , and the appointment of Christoph Böhm C C until ctober .
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ana ement of individual conflicts of interest
o conflicts of interest arose ith re ard to individual Supervisory Board members durin the reportin period.
The Supervisory Board ould li e to than the Executive Board and all employees for their stron commitment and achievements in 2020, hich the C ID 1 pandemic made particularly challen in .
ran furt am ain, arch 2021 for the Supervisory Board
artin Jetter Chair of the Supervisory Board
1219
Combined management report
21 Fundamental information about the Group
32 Report on economic position
52 Report on post-balance sheet date events
53 Combined non-financial statement
74 Risk report
105 Report on opportunities
109 Report on expected developments
112 Deutsche Börse AG
(disclosures based on the HGB)
118 Remuneration report
152 Corporate governance statement Deutsche Börse Group | Annual report 2020
Executive and Supervisory Boards Management report | Fundamental information about the Group Financial statements Notes Further information
Combined management report
This combined management report covers both Deutsche Börse Group and Deutsche Börse AG and includes the combined non-financial statement according to the CSR Directive. It follows the requirements of the Handelsgesetzbuch (HGB, German Commercial Code) and the Deutscher Rechnungslegungs Standard Nr. 20 (DRS 20, German Accounting Standard No. 20).
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 2020, Deutsche Börse Group employed a total of 7,238 staff (31 December 2019: 6,775), from 110 nationalities at 43 locations around the globe. As one of the largest providers of market infrastructure worldwide, the Group offers a broad product and service range to its clients. These cover the entire financial market transaction process chain: from the provision of market information, indices and analytical solutions (pre-trading), the trading and clearing services on which these are based, and the settlement of transactions right through to the custody of securities and funds, as well as services for liquidity and collateral management (post-trading). The Group also develops and operates the IT systems that support all of these processes.
Deutsche Börse AG markets the price and reference data of the systems and platforms of Deutsche Börse Group as well as any other trading-relevant information. In addition, it develops and markets indices and analytics solutions via its subsidiary Qontigo GmbH. Furthermore, Deutsche Börse AG operates the Eurex® Exchange futures and options market via Eurex Frankfurt AG. Commodities spot and derivatives markets are operated by the Group’s direct subsidiary European Energy Exchange AG (EEX). Via its subsidiary 360 Treasury Systems AG (360T), Deutsche Börse AG offers a platform for foreign exchange trading. The Group also operates the cash market at Frankfurter Wertpapierbörse (Frankfurt Stock Exchange – FWB®), with its fully electronic trading venue Xetra®, as well as offering trading in structured products (certificates and warrants) in Germany via the Börse Frankfurt Zertifikate AG exchange. The Group also offers clearing services for the cash equities and derivatives markets (Eurex Clearing AG). All post-trading 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 investment funds and global securities financing. Deutsche Börse AG and Clearstream Services S.A. develop and operate Deutsche Börse Group’s technological infrastructure.
Deutsche Börse Group's full group of consolidated entities is set out in note 33 to the consolidated financial statements.
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Reporting segments eutsche rse Group s business is divided into seven segments Eurex (financial derivatives) EEX (commodities) (foreign exchange) Xetra (cash e uities) learstream (post trading) (investment fund services) and ontigo (index and analytics business).
This structure serves as a basis for the Group’s internal management and financial reporting (see the following table entitled “Deutsche Börse Group’s reporting segments” for details).
Deutsche Börse Group’s reporting segments Reporting segment Business areas Eurex (financial derivatives) ▪ Electronic trading of derivatives (Eurex Exchange) ▪ Eurex epo trading platform ▪ electronic clearing architecture ▪ entral counterparty for on and off exchange derivatives and repo transactions ▪ arketing of licences for trading and market signals ▪ ink up of trading participants EEX (commodities) ▪ Electronic trading of electricity and gas products as ell as emission rights (EEX group) ▪ entral counterparty for traded cash market and derivative products (foreign exchange) ▪ Electronic trading of foreign exchange ( ) ▪ entral counterparty for and exchange traded derivatives Xetra (cash e uities) ▪ ash market ith the trading venues Xetra rse rankfurt and radegate ▪ entral counterparty for e uities and bonds ▪ isting ▪ arketing of licences for trading and market signals ▪ ink up of trading participants ▪ echnology solutions for external customers learstream (post trading) ▪ ustody and settlement of securities ▪ ervices for global securities finance and collateral management as ell as secured money market transactions repo and securities lending transactions (investment fund services) ▪ nvestment fund services (order routing settlement and custody) ▪ nvestment fund distribution services ( learstream und entre) ontigo (index and analytics ▪ evelopment and marketing of indices ( XX and AX ) business) ▪ nnovative portfolio management and risk analysis soft are
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Management The governing bodies of Deutsche Börse G which is a German stoc corporation are the nnual General eeting the upervisor Board and the ecutive Board each of which has its own areas of responsibilit .
The nnual General eeting rules on the appropriation of distributable profit appoints the shareholder representatives on the upervisor Board and discharges the ecutive Board and the upervisor Board of liabilit . n addition it rules on e uit issuance and other matters governed b the tiengeset tG German toc orporation ct).
The upervisor Board appoints supervises and advises the members of the ecutive Board and is directl involved in decisions of fundamental importance to the Group. dditionall it approves the consolidated financial statements prepared b the ecutive Board. embers of the upervisor Board are appointed for a period of three ears although the nnual General eeting ma determine a shorter term of office when electing members. s Deutsche Börse G has more than emplo ees in German members of the upervisor Board must be appointed in accordance with the provisions of the itbestimmungsgeset German o Determination ct). Deutsche Börse s upervisor Board comprises eight shareholder representatives and eight emplo ee representatives in order to meet the growing demands placed upon upervisor Board members in connection with the ompan s growth and that of the Group as a whole particularl with regard to the diversit and internationalisation of upervisor Board wor . urther details can be viewed in the orporate governance statement section.
The ecutive Board manages the compan at its own responsibilit the hief ecutive fficer ) coordinates the activities of the ecutive Board members. n the financial ear the ecutive Board of Deutsche Börse G comprised si members. The remuneration s stem and the remuneration paid to individual members of the ecutive Board of Deutsche Börse G is e plained in more detail in the remuneration report.
Organisational structure The responsibilities of the hief ecutive fficer ) include the Group s strateg activities communications legal affairs as well as regulator matters and Group udit. The duties of the hief inancial fficer ) comprise among other things financial reporting and controlling ris management treasur and investor relations. The Trading learing division covers derivatives trading and the clearing houses of Deutsche Börse Group. The electronic foreign e change trading platform T the Group and the cash mar et with its trading venues etra ran furt toc change and the certificates and warrants business also report to this ecutive Board function. The division is also responsible for building up a pre mar et and establishing tools for growth financing. The re and ost Trading division includes the settlement and custody business and Clearstream’s collateral management as well as the reporting segments nvestment und ervices) and the inde and anal tics business ontigo). The ecutive Board division for ompliance is responsible for the Group’s human resources and compliance division. The Chief Information Officer/Chief Operating Officer ) function combines Deutsche Börse Group s T activities and mar et operations. Technological transformation and digitalisation are the e areas of focus for this division.
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Objectives and strategies
Deutsche Börse Group’s objectives and strategies Deutsche Börse Group is one of the largest market infrastructure providers worldwide. The Group’s business model contributes to the stability efficiency and integrity of capital mar ets. This benefits issuers in the form of lo costs of raising capital and investors in the form of high li uidity and lo transaction costs. t the same time eutsche rse stands for transparent secure capital mar ets in hich organised trading is based on free price formation.
eutsche rse Group s business model is geared to ards a diversified product and service offer that covers the entire value chain of financial market transactions. The Group’s diversified business model is based on the follo ing ey elements
◼ Integrating different financial mar et services such as trading clearing settlement securities custody mar et data services li uidity and collateral management as ell as inde and analytics solutions
◼ roviding these services for various asset classes such as e uities bonds funds commodities foreign e change interest rates and derivatives products based on these underlyings
◼ eveloping and operating proprietary electronic systems for all processes along the value creation chain
◼ Organising an impartial mar etplace to ensure orderly supervised trading ith fair price formation plus providing ris management services
In order to maintain and e pand its leading position among e change organisations eutsche rse Group pursued “Roadmap 2020” growth strategy from 2018 onwards. Deutsche Börse focused on generating secular organic gro th hile accelerating gro th through ac uisitions in five defined business areas. In this period eutsche rse Group e pected average gro th in net income based on these secular drivers of at least per cent p.a. ith regard to ad usted net profit for the period attributable to eutsche rse G shareholders the Group targeted an average annual gro th rate of to per cent over the same period. y the close of financial year the Group had achieved all the targets set in its oadmap . et revenue rose by around per cent p.a. on average and ad usted net profit by an average of per cent. In this period the Group also successfully completed several transactions such as the ac uisition of ioma Inc. or ondcenter G from as ell as reporting significant progress on its investment in ne technologies such as cloud computing and digital ledger technology.
On ovember eutsche rse published its ne medium term gro th strategy Compass hich defines the strategic direction and targets for the years ahead. mong the most important organic gro th drivers are the trend from over the counter OTC to on e change trading G the increasing importance of the buy side passive investments and the digitisation of the financial sector. Gro th by is also set to accelerate. eutsche rse is aiming for overall gro th in net revenue of per cent p.a. on average. Organic initiatives and are each intended to contribute gro th of around per cent. arnings before interest ta depreciation and amortisation IT and earnings per share should also rise by an average of per cent p.a.
24 Deutsche Börse Group nnual report 2020
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ompass 202 targets Objectives and Based on 2019 strategies €m Compass 2023
et revenue 2 .0 10 p. a. arnings before interest ta depreciation and amortisation B TD reported 1 8. 10 p. a. arnings per share reported €5.47 10 p. a.
s part of an ongoing process the Group is reviewing its organic growth initiatives focusing in particular on e pansion into markets and asset classes characterised by structural growth while attaching great importance to ensuring that the initiatives launched are implemented in a consistent successful manner. ey initiatives and growth drivers are described in the opportunities report. oreover the remuneration system for the ecutive Board and e ecutive staff has created a number of incentives for growth in the individual business divisions. lease refer to the remuneration report for a detailed description of all targets. s far as e ternal growth opportunities are concerned the focus is on strengthening e isting high growth areas and on e ploring new asset classes and services.
mong the factors that have a significant impact on Deutsche Börse Group s organic growth are
◼ Regulatory re uirements of all market participants if regulatory initiatives such as R i R and RR RD strengthen the role of e changes this will also benefit Deutsche Börse Group.
◼ tructural changes in the financial markets e.g. trading activity increases if investment funds make greater use of derivatives to implement their trading strategies.
◼ nnovative strength if Deutsche Börse Group succeeds in continuously introducing new products and services for which there is market demand the Group will be in a position to further e pand its business.
◼ The cyclical nature of financial markets or e ample increased stock market volatility typically leads to higher levels of trading in the cash and derivatives markets and rising interest rates tend to drive up net interest income and trading volumes in interest rate derivatives.
Deutsche Börse Group is committed to maintaining transparent reliable and li uid financial markets although it cannot control the volume drivers for these markets i.e. cyclical factors. The Group can influence the other factors either wholly or partially for instance it can lobby for a favourable legal framework for the financial markets, or it can develop products and services that support clients’ business. This also enables it to reduce dependence on those cyclical factors beyond its control.
anage ent approach or a Group ide co it ent to sustainabi it ne of Deutsche Börse Group s ob ectives and strategies is to take a holistic approach to corporate responsibility. ts management approach is therefore guided by two action led principles that aim to sustainably strengthen and preserve the value that Deutsche Börse Group adds to the economy and society
25 eutsche rse roup nnual report
ecutive and upervisor oards Management report | Fundamental information about the Group inancial statements otes urther information
◼ uildin trust eutsche rse roup aims to or anise the capital markets in a wa that ensures their inte rit , transparenc and securit he availa ilit of hi h ualit information is a ke aspect in this process and somethin that the roup is workin on constantl to enhance n this conte t, providin sustaina ilit information is as si nificant as en a in in a constructive dialo ue on the future via ilit of the international capital markets with our customers ut also with the eneral pu lic ◼ eadin e ample s a listed service provider, eutsche rse roup aims to ensure that its own corporate activities are conducted responsi l and with a view to the future n addition, the roup pursues a sustaina le human resources polic and is committed to the environment and hence to conservin resources t enhances its commitment to sustaina ilit and related reportin on an on oin asis in order to esta lish itself as a lon term role model on the market ◼ ncreasin pu lic awareness he roup is part of civil societ and as such has a responsi ilit towards it t is committed to fulfillin this role oth in erman and in its international locations t s stematicall ases its actions on local re uirements and, as a ood corporate citi en, takes part in lon term cooperative initiatives aimed at stren thenin structures in the non profit sector
n , eutsche rse esta lished a roup ustaina ilit oard to continuousl develop the roup wide sustaina ilit strate alon the entire value chain and advise the ecutive oard on sustaina ilit issues he oard convenes twice a ear and in its mem ers comprised twelve representatives of the ecutive oard divisions, plus the ead of roup ustaina ilit and one ecutive oard mem er
nterna anage ent
anage ent s ste s Deutsche Börse Group’s internal management system is generally based on key performance indicators taken from the consolidated income statement net revenue, operatin costs e cludin depreciation, amortisation and impairment losses roup net profit for the period attri uta le to eutsche rse shareholders , as well as on various parameters derived from the consolidated statement of financial position and the consolidated statement of cash flows cash flows from operatin activities, li uidit , e uit less intan i le assets n addition, the s stem includes ke performance indicators derived from the income statement and alance sheet net de t ratio and return on shareholders equity). Details on the components of the income statement are shown in the table “ onsolidated income statement”. As of financial year 2021 the company no longer adjusts the performance indicators in the consolidated income statement for e ceptional items, and so will onl use the reported fi ures, includin all influencin factors for mana ement purposes in future
The most important performance indicators for managing the Group’s results of operations are secular net revenue rowth, and earnin s per share he main performance indicators derived from the statement of financial position and the statement of cash flows include cash flows from operatin activities and e uit less intan i le assets n addition, eutsche rse roup aims to hold sufficient li uidit to e a le to meet all of the roup s pa ment o li ations when due here is no set tar et for the Group’s management KPI of equity less intangible assets; rather, the objective is to maintain a positive fi ure
t roup level, a net de t ratio not e ceedin and free funds from operations relative to net de t reater than or e ual to per cent is also tar eted in order to achieve the minimum financial risk profile consistent with the current ratin in accordance with lo al atin s methodolo n addition, an interest covera e ratio of at least is tar eted for eutsche rse roup usin this methodolo
26 Deutsche Börse Group Annual report 2020
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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 e pected) 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 P ), the payback period and the return after ta , which are calculated on the basis of the project or business plans. isks are monitored at all levels of project work, i.e. both when prioritising and steering projects and during ongoing project management.
Details concerning the non financial performance indicators used by Deutsche Börse Group are outlined in the “ ombined non financial statement” section.
nterna contro s ste as part o the inancia reporting process Deutsche Börse has established a Group wide internal control system I ). The I comprises rules to manage the company’s activities as well as guidelines defining how compliance with these rules is monitored. The principles of the Group wide I are also applied in partially decentrali ed units of Deutsche Börse Group. onitoring 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 for ensuring that Group wide I requirements are met in their respective areas of responsibility.
The purpose of the accounting related I is to ensure orderly accounting practices. The central inancial Accounting and ontrolling A ) division, together with decentralised units acting on the requirements set out by A , are responsible for preparing the accounts at Deutsche Börse AG and its consolidated subsidiaries. Group Ta is responsible for determining ta items for accounting purposes. The relevant department heads are responsible for the related processes, including effective security and control measures. The aim is to ensure that risks relating to the accounting process are identified early on, so that remedial action can be taken in good time.
In order to assure uniform and consistent accounting, A provides regularly updated accounting manuals and guidelines and work instructions for the material accounting processes – as part of the preparation of the annual and consolidated financial statements of Deutsche Börse AG. All employees in the A area, as well as in decentral units, have access to these documents and the accounting and account assignment guidelines, allowing them to see for themselves the scope of managerial discretion and accounting options Deutsche Börse Group e ercises.
oreover, Deutsche Börse Group continuously monitors and analyses changes in the accounting environment and adjusts its processes in line with them. This applies in particular to national and international accounting standards.
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ecutive and upe viso y oa ds Management report | Fundamental information about the Group inancial statements otes u the info mation
nothe ey component of the is the p inciple of seg egation of duties tas s and autho ities a e clea ly assigned and sepa ated f om each othe in o ganisational te ms ncompati le tas s – such as modifying maste data on the one hand and issuing payment inst uctions on the othe – a e st ictly seg egated at a functional level n independent cont ol unit g ants individual employees access ights to the accounting system and continuously monito s these pe missions using a so called incompati ility mat i ansactions a e initially eco ded in the gene al ledge o the app op iate su ledge s on the asis of the cha t of accounts and the account allocation guidelines
a o eutsche se oup su sidia ies maintain and consolidate thei gene al ledge s in the same system ccounting data f om othe companies is uploaded fo inclusion in the consolidated financial statements ia ilities e penses and income fo individual t ansactions a e eco ded in sepa ate accounts unde the name of the counte pa ty conce ned ny consolidation diffe ences a e eviewed cent ally and sent to the accounting depa tments of the companies conce ned fo cla ification
he p ocesses systems and cont ols desc i ed a ove aim to p ovide easona le assu ance that the accounting system complies with the applica le p inciples and laws n addition ompliance and nte nal udit act as a fu the line of defence pe fo ming is ased p ocess independent cont ols on whethe the is app op iate and effective he ecutive oa d and the udit ommittee esta lished y the upe viso y oa d eceive egula epo ts on the effectiveness of the with espect to the financial epo ting p ocess
a eover re ated disc osures
Disc osures in accordance ith sections a and a o the Ger an o ercia ode GB prior version and e p anator notes n acco dance with sections a and a of the e man omme cial ode andelsgeset uch p io ve sion in con unction with section sentence of the nt oducto y ct to the e man omme cial ode inf h ungsgeset um andelsgeset uch eutsche se he e y ma es the following disclosu es as at ecem e
The share capital of Deutsche Börse AG amounted to €190.0 million on the a ove mentioned epo ting date and was composed of million no pa value egiste ed sha es he e a e no othe classes of sha es esides these o dina y sha es
The share capital has been contingently increased by up to €17.8 million y issuing up to million no pa value egiste ed sha es contingent capital he contingent capital inc ease will only e implemented to the e tent that holde s of conve ti le onds o of wa ants attaching to onds with wa ants issued y the ompany o y a oup company in the pe iod until ay on the asis of the autho isation g anted to the ecutive oa d y esolution of the nnual ene al eeting of ay on tem of the agenda e e cise thei conve sion o option ights that they meet thei conve sion o option o ligations o that sha es a e tende ed and no othe means a e used to settle such ights o o ligations o e details can e found in ticle of the ticles of ssociation of eutsche se
he ecutive oa d is only awa e of those est ictions on voting ights that a ise f om the tiengeset t e man toc o po ation ct hose sha es affected y section t a e the efo e e cluded f om voting ights u the mo e sha es held y eutsche se as t easu y sha es a e e empted f om the e e cise of any ights acco ding to section t
28
Management report | Fundamental information about the Group
capital by up to a total of €13.3 the Supervisory Board, the Executive Board may exclude shareholders’ pre shareholders’ pre authorisation and that exclude shareholders’ pre capital. Full authorisation, and particularly the conditions under which shareholders’ pre
o increase the share capital by up to a total of €19.0 Board is authorised to exclude shareholders’ total number of shares issued under exclusion of shareholders’ pre Executive Board may only exclude shareholders’ pre issued during the term of authorisation and that exclude shareholders’ pre shareholders’ pre
29 eutsche B rse roup nnual report
Executive and Supervisory Boards Management report | Fundamental information about the Group inancial statements otes urther information
n addition, the Executive Board is authorised to increase the share capital by up to a total of €19.0 million on one or more occasions in the period up to ay , sub ect to the approval of the Supervisory Board, by issuing ne no par value registered shares in exchange for cash contributions authorised capital Shareholders must be granted pre emptive rights, hich the Executive Board can exclude, sub ect to the approval of the Supervisory Board, only for fractional amounts o ever, according to the authorisation, the Executive Board may only exclude shareholders’ pre emptive rights if the total number of shares that are issued during the term of authorisation and that exclude shareholders’ pre emptive rights does not exceed per cent of the share capital he exact content of this authorisation is derived from rticle of the rticles of ssociation of eutsche B rse
urthermore, the Executive Board is authorised to increase the share capital by up to a total of €6.0 million on one or more occasions in the period up to ay , sub ect to the approval of the Supervisory Board, by issuing ne no par value registered shares against cash and or non cash contributions authorised capital Shareholders must be granted pre emptive rights unless the Executive Board ma es use of the authorisation granted to it to exclude such rights, sub ect to the approval of the Supervisory Board. The Executive Board is authorised to exclude shareholders’ pre emptive rights for fractional amounts ith the approval of the Supervisory Board o ever, 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 the authorisation, excluding pre emptive rights, does not exceed per cent of the share capital ull authorisation is derived from rticle of the rticles of ssociation of eutsche B rse
he Executive Board is authorised to ac uire treasury shares up to per cent of the share capital o ever, the ac uired shares, together ith any treasury shares ac uired for other reasons that are held by the ompany or attributed to it in accordance ith sections a et se of the t , may at no time exceed per cent of the Company’s share capital. The authorisation to ac uire treasury shares is valid until ay and may be exercised by the company in full or in part on one or more occasions o ever, it may also be exercised by dependent companies, by companies in hich eutsche B rse holds a ma ority interest or by third parties on its or their behalf he Executive Board may elect to ac uire the shares on the stoc exchange, via a public tender offer addressed to all shareholders or via a public re uest for offers of sale addressed to the company’s shareholders, (3) by issuing tender rights to shareholders or using derivatives put options, call options, for ard purchases or a combination of put options, call options and for ard purchases he full and exact ording of the authorisation to ac uire treasury shares, and particularly the permissible uses to hich the shares may be put, can be found in items and of the agenda for the nnual eneral eeting held on ay
he follo ing material agreements of the ompany are sub ect to a change of control clause follo ing a ta eover bid
◼ n arch , eutsche B rse and its subsidiary learstream Ban ing S entered into a multicurrency revolving facility agreement ith a ban ing syndicate for a or ing capital credit totalling up to €750.0 million f there is a change of control, the credit relationship bet een eutsche B rse and the lenders can be revie ed in negotiations ithin a period of no more than days n this process, each lender has the right, at its o n discretion, to terminate its credit commitment and demand partial or full repayment of the amounts o ing to it change of control occurs if eutsche B rse no longer directly or indirectly holds the ma ority of learstream Ban ing S or if a person or a group of persons acting in concert ac uires more than per cent of the voting shares of eutsche B rse
30 eutsche B rse roup nnual report
Executive and upervisory Boards Management report | Fundamental information about the Group inancial statements otes urther in ormation
◼ Under the terms of Deutsche Börse AG’s €600.0 million ixed rate ond issue (hy rid ond), eutsche B rse has a termination ri ht in the event o a chan e o control (as de ined in the terms o the ond), hich, i exercised, entitles eutsche B rse to redeem the onds at par, plus accrued interest eutsche B rse does not exercise this termination ri ht, the a ected onds’ coupon ill increase y an additional asis points per annum chan e o control occurs i a person or a roup o persons actin in concert, or third parties actin on their ehal , has or have ac uired more than per cent o the shares o eutsche B rse or the num er o eutsche B rse shares re uired to exercise more than per cent o the votin ri hts at nnual eneral eetin s o eutsche B rse n addition, the relevant ond terms re uire that the chan e o control must adversely a ect the lon term rating given to Deutsche Börse AG by Moody’s Investors Services, Inc., lo al atin s or itch atin s imited urther details can e ound in the applica le ond terms ◼ The terms of the €500.0 million ixed rate onds , the €600.0 million ixed rate onds 2018/2028, and the €600.0 million ixed rate onds , hich ere all issued y eutsche B rse , all ive the respective ondholders a termination ri ht in the event o a chan e o control (as de ined in the terms o the respective ond) these termination ri hts are exercised, the onds are repaya le at par plus any accrued interest chan e o control occurs i a person or a roup o persons actin in concert, or third parties actin on their ehal , has or have ac uired more than per cent o the shares o eutsche B rse or the num er o eutsche B rse shares re uired to exercise more than per cent o the votin ri hts at nnual eneral eetin s o eutsche B rse n addition, the respective ond terms re uire that the chan e o control must adversely a ect the ratin iven to one of the preferential unsecured debt instruments of Deutsche Börse AG by Moody’s Investors ervices, nc , lo al atin s or itch atin s imited urther details can e ound in the applica le ond terms ◼ Based on the previous remuneration system or Executive Board mem ers presented to the nnual eneral eetin , under certain conditions the Executive Board mem ers o eutsche B rse have a special termination ri ht in the event o a chan e o control ccordin to the a reements made ith all Executive Board mem ers, a chan e o control occurs i ( ) a shareholder or third party discloses possession o more than per cent o the votin ri hts in eutsche B rse in accordance ith sections 33 and 3 o the erman ecurities radin ct ( p ), ( ) an intercompany a reement in accordance ith ection o the t is entered into ith eutsche B rse as a dependent company, or eutsche B rse is a sor ed in accordance ith section 3 o the t , or (3) eutsche B rse is mer ed in accordance ith ection o the erman rans ormation ct ( m )
n addition, individual service contracts ith Executive Board mem ers include a reements on compensation in the event o a chan e o control uch a reements are no lon er provided or in the remuneration system or Executive Board mem ers presented or approval to the nnual eneral eetin or in the remuneration system to e presented to the nnual eneral eetin description o the existin a reements as ell as the chan es in the remuneration systems can e ound in the remuneration report
31 Deutsche Börse Group Annual report
ecutive and upervisory Boards Management report | Report on economic position inancial statements otes urther information
eport on economic position
acroecono ic and sector speci ic environ ent
Macroeconomic conditions continue to have an influence on the business development of Deutsche Börse Group despite the ro in importance of structural ro th factors he main factor affectin financial year as the outbrea of the ovid pandemic its lobal economic impact and the challen es of dealin ith the virus and its containment his had a massive impact on the macroeconomic environment he follo in aspects are particularly note orthy
▪ the massive slo do n in the lobal economy particularly in the first half year due to the outbrea of the ovid pandemic ▪ substantial restrictions on economic and social activities loc do n ▪ reat uncertainty amon participants in financial and capital mar ets due to the lac of visibility about the tra ectory of the pandemic combined ith the spi e in mar et volatility in the first half year as measured by the inde ▪ hi her levels of debt bein ta en on by many states to alleviate the conse uences of the economic burdens ▪ concentrated monetary policy measures by central ban s in response to provide li uidity in combination ith historically lo interest rates around the orld ▪ uncertainty until year end re ardin the terms of the nited in dom s ithdra al from the and its impact on mar ets ▪ re ulatory pro ects and the resultin stricter re uirements for capital mar et participants
In its anuary estimate the International Monetary und IM predicted a lobal contraction of per cent for e ative ro th of per cent is e pected for the euro area and of per cent for Germany
Business deve op ents
As described in the macroeconomic section of this report it became apparent in sprin that the infectious disease ovid that bro e out in late in hina ould have a si nificantly adverse effect on the performance of the orld economy and so also an impact on business developments at Deutsche Börse Group he rapid spread of the virus around the orld caused reat uncertainty amon mar et participants and an unusual level of mar et activity on cash e uities and derivatives mar ets Governments and central ban s around the orld tried to contain the economic conse uences of the ovid pandemic ith unprecedented stimulus pro rammes emer ency lendin cuts to prime interest rates and bond purchase pro rammes he ederal eserve the central ban reduced its tar et ran e for the prime rate in the A from to per cent combined ith various overnment policy measures hile the uropean entral Ban B increased the andemic mer ency urchase ro ramme for sovereign and corporate bonds to €1.85 trillion and e tended its minimum duration han es in the interest rate in particular had a ne ative impact on treasury result from ban in business in the learstream se ment rom the second uarter on ards hi h li uidity levels and mar et hopes of a s ift economic recovery resulted in a steep rise in leadin international indices his rather obscured the burdens from the trade conflict bet een the A and hina and the ris of a no deal Bre it Mar et volatility increased sli htly in the fourth uarter follo in a brea throu h in the development of suitable vaccines a ainst ovid his in turn boosted mar et activity in cash e uities and derivatives mar ets
32 Deutsche Börse Group Annual report
ecutive and upervisory Boards Management report | Report on economic position inancial statements otes urther information
o parabi it o igures ith effect from the first uarter of Deutsche Börse Group has ad usted the se ment reportin structure, in order to further enhance transparency regarding the Group’s growth areas.
▪ he former G collateral mana ement se ment has been fully allocated to the learstream post tradin se ment ▪ Business in the former Data se ment is no bein reported ithin the etra cash e uities and ure financial derivatives se ments
or further information on the comparability of fi ures please see note
esu ts o operations
or Deutsche Börse Group the financial year as defined by the course of the ovid pandemic hich in some cases had a si nificant impact on se ment earnin s In an e traordinarily volatile mar et environment the Group sa si nificant earnin s increases in the first uarter of hereas mar ets became increasin ly subdued over the remainder of the year and prime rates fell to ne lo s orld ide It as only in the fourth uarter that ma et activity pic ed up a ain sli htly tri ered by the hope of an economic recovery follo in the development of a suitable vaccine a ainst ovid oo in at the full year, all segments contributed to the Group’s growth, with the e ception of learstream ecular net revenue rose across the Group by per cent as planned driven by product innovations reater mar et share and ne customer ins particularly in the se ments ure I and onti o yclical effects contributed a total of per cent to net revenue ro th ositive factors such as the increase in tradin volumes of e uity inde derivatives ure se ment and cash e uities etra se ment ere offset by a si nificant decline in net interest income from ban in business learstream particularly due to the interest rate cuts by the central ban he Group also reported an increase of per cent in net revenue due to consolidation primarily relatin to the ac uisitions of A ioma onti o se ment and the B fund distribution platform ondcenter AG I se ment et revenue in the reportin therefore rose to €3,213.8 million (2019: €2,936.0 million), an increase of 9 per cent.
33 eutsche rse Group nnual report
ecuti e and uper isory oards Management report | Report on economic position inancial statements otes urther information
Operating costs for Deutsche Börse Group came to €1,368.7 million in the reporting period €1,264.4 million) and were made up of staff costs and other operating expenses. Accounting for exceptional items of €155.3 million (2019: €134.9 million) in connection with expenses to cut structural costs as part of the oadmap , ac uisition costs and ad isory costs in the conte t of litigation, adjusted operating costs came to €1,213.4 million (2019: €1,129.5 million). This represents an increase of per cent, which is primarily due to consolidation effects from the ac uisition of ioma and higher in estment.
Adjusted staff costs increased in 2020 by 11 per cent to €786.5 million (2019: €705.7 million), largely due to higher a erage staff numbers as a result of ac uisitions. his figure does not include exceptional items of €36.4 million (2019: €42.1 million) which mainly include costs of efficiency measures in the conte t of the tructural erformance mpro ement rogramme introduced in .
Adjusted other operating expenses of €426.9 million (2019: €423.8 million) mainly reflect the costs of upgrading and operating eutsche rse Group s technological infrastructure. his includes, for e ample, costs for the Group s own and for e ternal ser ice pro iders. lso included are the costs of office infrastructure at all the Group’s locations. This figure does not include exceptional items of €118.9 million (2019: €92.8 million) related to the cost of M&A activities. Results from financial investments rose to €24.3 million (2019: €6.7 million) and stem primarily from a mar up in the e uity method measurement of radegate G ertpapierhandelsban etra segment which recorded a ery strong performance in the reporting year.
eutsche rse Group increased its earnings before interest, ta , depreciation and amortisation (EBITDA) to €1,869.4 million (2019: €1,678.3 million). Adjusted EBITDA rose to €2,024.7 million (2019: €1,813.2 million).
epreciation, amortisation and impairment losses, which are reported separately from the operating costs, went up to €259.2 million (2019: €222.9 million) due to higher capital expenditure and consolidation effects.
The financial result totalled €–76.9 million (2019: €– . million . ompared to the prior year, the increase resulted from pro isions for interest on potential ta bac payments.
The Group’s tax ratio of 26 per cent was on par with the previous year.
erall, the net profit for the period attributable to eutsche rse Group shareholders was €1,079.9 million (2019: €1,003.9 million), an increase of 8 per cent. d usted for e ceptional items, this increased by 9 per cent to €1,204.3 million (2019: €1,105.6 million).
et profit for the period attributable to non controlling interests rose to €45.2 million (2019: €31.5 million and consisted mainly of the profits attributable to non controlling interests in the Group and ontigo Gmb , which put in a good performance in .
34
Management report | Report on economic position
Undiluted earnings per share on the basis of a weighted average of 183.4 million shares was €5.89 (2019: €5.47). After adjustment this rose by 9 per cent to €6.57 (2019: €6.03).
o parison o resu ts o operations ith the orecast or
shareholders to go up to around €1 net profit attributable to shareholders of Deutsche Börse AG to €1,204.3 million and €195.5 million, in line with the forecast of around €200 million. The dividend ratio is generally in the dividend of €3.00 per share, this target was also realised with a ratio of 46
35
Management report | Report on economic position
ure inancia derivatives seg ent
2020 20191) Change
FINANCIAL KEY FIGURES €m €m %
– – – – –
36
Management report | Report on economic position
notional volume again beat the previous year’s figure by 43 per cent, which means that Eurex Clearing
co odities seg ent
2020 2019 Change
FINANCIAL KEY FIGURES €m €m %
– –
well as metals. EEX Group’s most important
37 eutsche rse Group nnual report
Executive an upervisory oar s Management report | Report on economic position inancial statements otes urther information
ra ing volume on the gas mar ets fell year on year by per cent. his is partly a result of lower eman ue to the impact of the Covi pan emic, with a lower total mar et volume on the spot mar ets. t the same time, greater competition on the gas erivatives mar ets, particularly in the etherlan s, le to tra ing volume changes. espite these con itions, the EEX was able to increase its mar et shares in the gas spot mar et an efen its position as Europe’s leading gas spot exchange in .
oreign e change seg ent
3 foreign exchange segment ey in icator 2020 2019 Change
FINANCIAL KEY FIGURES €m €m %
et revenue . . ra ing . . ther incl. connectivity an member fees . . perating costs – 3. – . – E 4 . 34.4 3
n the 3 foreign exchange segment, eutsche rse Group manages its foreign exchange tra ing business, which ta es place on the platforms provi e by its subsi iaries 3 reasury ystems G an 3 G X nc. et revenue in the 3 segment is riven mainly by the tra ing activities of institutional investors, ban s an internationally active companies, an the provision of li ui ity by so calle li ui ity provi ers. uring the year un er review, the segment generate per cent of its revenue from foreign exchange tra ing an per cent from the provision of other services.
n the reporting year, the mar et environment in the 3 segment was etermine by strongly fluctuating volatility, a varying ris appetite on the part of investors, restrictions ue to Covi loc owns an the resulting impact on tra ing volumes. fter an exceptionally strong first uarter mar e by the outbrea of the Covi pan emic an the ensuing high mar et volatility with high tra ing volumes, the following two uarters saw less tra ing activity on the bac of a much less volatile an more ris averse mar et, which was also affecte by restrictions. ver the course of the fourth uarter the mar et recovere significantly compare to the prior uarters, base on movements in ey currency pairs.
urthermore, 3 was able to boost growth in tra ing volumes by winning an connecting new customers to the platform, particularly in the an E E . his resulte in growth being recor e across all product groups, with the total average daily trading volume up by 5 per cent to around €87 billion. 3 also set new recor s with an average aily tra ing volume of €109 billion in March 2020. rivers of net revenue growth in particular were an increase in swap transactions, the 3 G X business an soli growth in mar et ata an connectivity.
38 e tsche rse ro p nn al report
xec ti e and per isor oards Management report | Report on economic position inancial state ents otes rther in or ation
he rex ar et also expanded rther despite the glo al e ents entioned a o e speciall pen nterest and the a erage dail trading ol e reached ne highs in total o ore than contracts ere traded aro nd ith a ne dail record o contracts in ne erage onthl pen nterest rose ear on ear in the reporting period aro nd per cent ro illion to illion o rther s pport this positi e trend rex introd ced ropean st le options in the second hal o the ear as ell as connecting n ero s ne clearing e ers li idit pro iders and trading participants and acti ating the or trading and clearing
n addition to the s ccess o the rex exchange ith listed deri ati es rex learing is seeing increasing de and or its clearing ser ice ncreasingl ore c sto ers are interested and are partl alread in the process o eing connected to the ser ice
etra cash e uities seg ent
etra cash e ities seg ent e indicators
2020 20191) Change
FINANCIAL KEY FIGURES €m €m %
et re en e rading and clearing isting – etra ata ther incl connecti it and e er ees – perating costs – – re io s ear ad sted
n the etra seg ent cash e ities e tsche rse ro p rings together its cash ar et trading en es etra the ran rt toc xchange and radegate esides trading and clearing ser ices inco e the segment generates revenue from the ongoing listing of companies’ securities and exchange ad issions the ar eting o trading data connecting clients to trading en es and ro ser ices pro ided to partner exchanges
he signi icant earnings increase in the etra seg ent in the reporting ear as ainl d e to higher trading and clearing re en es as a res lt o ore trading acti it he ol e o the order oo increased ear on year in almost every month, rising overall by 37 per cent to €2.1 trillion igher re en es ere partic larl d e to the increased olatilit co pared to the pre io s ear the recali ration o share port olios instit tional in estors and ch higher t rno er in exchange traded nds s rading ol es in these sec rities rose to a new annual record of €250 billion, which was 70 per cent p ear on ear he strong increase in acti it on part o the pri ate in estors as an additional dri er d ring the entire reporting period o peting ith other pan ropean trading en es etra rther strengthened its position as the re erence ar et or trading in constit ents increasing its ar et share to per cent per cent
39 eutsche rse roup nnual report
xecutive and upervisor oards Management report | Report on economic position inancial statements otes urther information
total of seven initial pu lic offerings s too place in as ell as t o ne listings By far the largest issue volume was recorded by the IPO of Hensoldt AG at €400 million. The share price of iemens nerg hen it as listed corresponded to a mar et capitalisation of approximatel €16 billion.
ndiminished interest in gold as an investment asset again led to ne records for etra old a earer ond ac ed ph sical gold hus gold reserves increased to tonnes as at the end of the financial ear tonnes – representing some €11 billion – and an order book turnover of €6 billion was reported (2019: €3.4 billion). Xetra old thus remains the leading securit in urope ac ed ph sical gold and the est selling security among Xetra’s exchange traded commodities (ETCs). he disposal of egulator ervices m the regulator reporting hu of eutsche rse roup to MarketAxess Holdings, Inc. was completed on 30 November 2020. Income of €19.8 million from this transaction as recognised in net revenue for etra ata
he usiness of radegate ertpapierhandels an gre ver strongl in than s to much higher activit on the part of the private investors and its e uit method measurement had a positive impact on the result from financial investments, taking it to €25.8 million in total
earstrea post trading seg ent
learstream post trading segment e indicators 2020 20191) Change
FINANCIAL KEY FIGURES €m €m % et revenue – ustod ettlement et interest income from an ing usiness – ollateral management – hird part services – ther incl connectivit account maintenance perating costs – – –
revious ear ad usted
Deutsche Börse Group’s settlement and custody activities are reported under the Clearstream (post trading segment n providing the post trade infrastructure for uro onds and other mar ets learstream is responsi le for the issuance settlement management and custod of securities from more than mar ets orld ide et revenue in this segment is driven mainl the volume and value of securities under custod hich determines the deposit fees he settlement usiness depends primaril on the num er of settlement transactions processed learstream via stoc exchanges as ell as over the counter (OTC). This segment also contains Clearstream’s net interest income from banking usiness
40
Management report | Report on economic position
– –
rities depository (ICSD). In June, said figure surpassed the €12 trillion mark for the first time. – –
directly related to the volumes outstanding, central banks’ money market measures lead to ample
41
Management report | Report on economic position
invest ent und services seg ent
2020 2019 Change
FINANCIAL KEY FIGURES €m €m % – –
eam’s Vestima
solution to manage this fund business efficiently from a single source is key to IFS’ success.
– –
of a majority stake in UBS’s fund distribution platform Fondcenter AG is a further distribution services within Deutsche Börse Group with assets under administration of around €290 e’s Clearstream’s global client network which brings additional scope and efficiency in the distribution of
42 eutsche B rse Group Annual report
ecuti e and Super isory Boards Management report | Report on economic position Financial statements otes Further information
ontigo inde and ana tics business seg ent
ontigo inde and analytics business segment key indicators 2020 2019 Change
FINANCIAL KEY FIGURES €m €m % et re enue . . F licences . . – change licences . . ther licences . . Analytics . . perating costs – . – . BI A . .
In the ontigo inde and analytics business segment eutsche B rse Group reports on the de elopment of its subsidiary ontigo which was formed through the merger of the inde business S and A with A ioma in September . In the inde business ontigo offers issuers an e tensi e range of indices thus pro iding these issuers with a wealth of opportunities to create financial instruments for e en the most di erse in estment strategies. hile the F licence re enues depend on the olume in ested in e change traded inde funds Fs on S and A indices the e change licence re enues are deri ed mainly from the olume traded in inde deri ati es on S and A indices on ure . icence fees from structured products are shown as part of other licence fees. In Analytics ontigo offers its clients risk analytics and portfolio management software.
uropean stock markets and the corresponding indices were buffeted in by a strong outflow of in estment capital as the Co id pandemic unfolded the hope for a rapid economic reco ery and the prospect of the de elopment of a accine. A erage assets under management in Fs on S and A indices fell by per cent in the reporting year e en though significant inflows were recorded in the fourth uarter of . As a result the F licence re enues also fell year on year. change licences were up by per cent due to a strong first uarter in inde deri ati es trading and a moderate performance for the remainder of the year. ther licence re enues benefitted from the growing number of licenced products and on a erage higher back billing effects.
After a strong start to the year in the analytics business the restrictions imposed to contain the Co id pandemic made sales and implementation acti ities difficult. Since net re enue in this area depends mainly on the order alue and a significant part of re enue is tied to the date of the transaction rather than distributing re enue o er the course of the contract the restrictions in connection with Co id caused revenue to fluctuate or decline. Axioma’s net revenue is only shown pro rata for as the takeo er of A ioma was closed on September .
43 eutsc e rse rou Annual re ort
xecutive and u ervisor oards Management report | Report on economic position inancial statements otes urt er information
Deve op ent o pro itabi it Deutsche Börse Group’s return on shareholders’ equity expresses the ratio of net income after taxes to avera e e uit availa le to t e rou durin t e course of . n t e re ortin ear it as at . er cent . er cent . Ad usted for t e exce tional items descri ed in esults of o erations t e return on e uit as . er cent . er cent .
inancia position
ash o
2020 2019 €m €m as flo s from o eratin activities excludin ositions . . as flo s from o eratin activities . . as flo s from investin activities – . – . as flo s from financin activities – . . as and cas e uivalents at end of eriod . . t er cas and an alances . .
as and cas e uivalents at eutsc e rse rou i.e. its li uidit com rise cas and an alances – to t e extent t at t ese do not result from reinvestin current lia ilities from cas de osits mar et artici ants – as ell as receiva les and lia ilities from an in usiness it an ori inal maturit of t ree mont s or less. e increase in rou li uidit ic is reflected in si nificantl i er cas and an alances of €2,506.7 million ecem er €1,467.3 million mainl reflects cas inflo s from o eratin activities offset rinci all cas outflo s for ac uisitions.
n t e financial ear eutsc e rse rou enerated a ositive cas flo of €370.0 million €302.6 million). The information value of Deutsche Börse Group’s cash flow is limited since t e ositions ic are su ect to si nificant fluctuations on t e re ortin date as ell as t e inflo s and outflo s from t e an in usiness result in distortions. Ad usted for t ese effects of €111.0 million ecem er €104.5 million t e cas flo in can essentiall e ex lained as follo s
as flo from o eratin activities as €1,523.0 million €1,030.6 million efore c an es in ositions on t e re ortin date. as flo from o eratin activities stemmed mainl from t e i er net rofit of €1,125.1 million €1,035.4 million and t e ositive ear on ear c an es in or in ca ital € . million € . million .
as outflo s for investin activities came to €787.7 million in €722.9 million and stemmed lar el from t e ac uisitions of ondcenter A and uantitative ro ers ic resulted in cas outflo s of €448.5 million com ared it a cas outflo of €666.4 million in rimaril for t e ac uisition of Axioma. nvestment in intan i le assets ro ert lant and e ui ment of €195.4 million as sli tl u on t e ear €184.7 million .
44 Deutsche Börse Group nnual report
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ash outflo for financin acti ities came to €254.2 million in inflo of €99.4 million ond issued by Clearstream Banking AG resulted in a cash inflow of €350 million. The dividend of €531.9 million paid in as hi her than the pre ious year €495.0 million hich is due to the year on year increase in the dividend per share from €2.70 to €2.90.
he positi e cash flo from operatin acti ities sufficient credit lines and its flexi le mana ement and plannin system mean that Deutsche Börse Group as adequately supplied ith liquidity in
or further details of cash flo see the consolidated cash flo statement and ote to the consolidated financial statements
i uidit anage ent Deutsche Börse Group primarily meets its operatin liquidity requirements from internal financin i e y retainin enerated funds – ith a ie to ards maintainin sufficient liquidity in order to e a le to meet all of the Group s payment o li ations hen due n intra Group cash pool is used for poolin 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 a aila ility and are lar ely secured y liquid onds from prime rated issuers oreo er Deutsche Börse G has access to external sources of financin such as ilateral and syndicated credit lines as ell as a commercial paper pro ramme see note to the consolidated financial statements for details of financial ris mana ement n recent years Deutsche Börse G has le era ed its access to the capital mar ets to issue corporate onds in order to meet its structural financin needs
De t instruments issued y Deutsche Börse G outstandin as at Decem er
Type Issue volume ISIN Term to Maturity Coupon Listing (p.a.)
ixed rate earer ond €600 m D years cto er uxem our ran furt ixed rate earer ond €500 m D years cto er uxem our ran furt ixed rate earer ond €600 m D years arch uxem our ran furt ixed rate earer ond €600 m D all date une uxem our ran furt hy rid ond years final une until call maturity in date years
45
Management report | Report on economic position
apita anage ent The Group’s clients generally expect it to maintain conservative interest coverage and leverage
◼
◼
◼
◼ Tangible equity (for Clearstream Banking S.A.): total of at least €1.1
◼ €1,8
◼ The rating relevant FFO in 2020 amounted to €
◼ The rating relevant Group’s net debt is reconciled by first deducting 50 net debt in 2020 amounted to €1,86
◼ – rating relevant interest expenses totalled €53
assets) of Clearstream Banking S.A. below €1,100 million. Clearstream Banking S.A. exceeded this threshold during the year under review, with a figure of €1,46
46 eutsche rse Group nnual report 0 0
xecutive and upervisory oards Management report | Report on economic position inancial statements otes urther information
The follo ing table elevant parameters illustrates the calculation methodology and sho s the values for the reporting year
elevant ey performance indicators according to the ad usted calculation method Target figures 2020
et debt T ≤ 1.75 0 ree funds from operations net debt ≥ 50 nterest coverage ratio ≥ 14 5 Tangible e uity of learstream an ing as at the reporting date €m ≥ 1,100
Global atings bases the calculation of ey performance indicators on the corresponding eighted average of the reported or expected results of the previous the current and the follo ing reporting period To ensure the transparency of the ey performance indicators the Group reports them based on the respective current reporting period
Dividends and share bu bac s eutsche rse Group generally aims to distribute dividends e uivalent to bet een 0 and 0 per cent of ad usted net profit for the period attributable to the shareholders of eutsche rse G ithin this range the Group manages the actual payout ratio mainly relative to the business performance and based on continuity considerations n addition the company plans to invest the remaining available funds primarily in the Group’s complementary external development. Should the Group not be able to invest these funds additional distributions particularly in the form of share buy bac s ould be another possible use for them
or the 0 0 financial year eutsche rse G is proposing that the nnual General eeting resolve to pay a dividend of €3.00 per no par value share (2019: €2.90). This dividend is equivalent to a distribution ratio of per cent of ad usted net profit for the period attributable to shareholders of eutsche rse G ad usted for the non recurring items described in the esults of operations 0 per cent also ad usted ased on 5 million no par shares ith dividend rights this would result in a total dividend payment of €550. million (2019: €53 million The number of shares ith dividend rights is produced by deducting 5 million treasury shares from the ordinary share capital of 0 0 million shares
47 eutsche rse Group nnual report 0 0
xecutive and upervisory oards Management report | Report on economic position inancial statements otes urther information
Credit ratings
redit ratings Long-term Short-term Deutsche Börse AG Global atings – Clearstream Banking S.A. itch atings Global atings – Clearstream Banking AG Global atings –
eutsche rse G regularly has its credit uality revie ed by Global atings hile learstream an ing is rated by itch atings and Global atings and learstream an ing G by Global atings
n 05 ugust 0 0 itch atings affirmed the credit rating of learstream an ing ith a stable outlook. The rating reflects Clearstream Banking’s leading position in the post trade business and its diligent li uidity management as ell as its impeccable capitalisation
n 0 0 Global atings left the credit ratings of eutsche rse G and learstream an ing unchanged eutsche rse G s rating reflects the assumption that the Group ill continue its gro th strategy Global atings confirmed the credit rating on ovember 0 0 in the course of the intended ta eover of nstitutional hareholder ervices nc learstream an ing s rating reflects its strong ris management minimal debt levels and strong position on the international capital mar ets especially through its international custody and transaction business
n ovember 0 0 Global atings gave learstream an ing G a credit rating ith a stable outloo The rating reflects its strong position in post trading and its core importance in the learstream Group
s at ecember 0 0 eutsche rse G as one of only t o listed companies a arded an rating by Global atings
48 eutsche B rse roup nnual report
ecuti e and uper isor Boards Management report | Report on economic position inancial statements otes urther information
et assets
aterial changes to net assets are described belo the full consolidated balance sheet is sho n in the consolidated financial statements.
Consolidated balance sheet e tract
31 Dec 2020 31 Dec 2019 €m €m ASSETS 152,767.7 137,165.3 on current assets . . thereof intangible assets . . thereof good ill . . thereof other intangible assets . . thereof financial assets . . thereof financial assets measured at amortised cos . . da on erfolgsneutral um bei ulegenden eit ert be ertete Beteiligungen . . thereof financial instruments held b central counterparties . . Current assets . . thereof financial instruments held b central counterparties . . thereof restricted bank balances . . thereof other cash and bank balances . .
EQUITY AND LIABILITIES 152,767.7 137,165.3 uit . . iabilities . . thereof non current liabilities . . thereof financial instruments held b central counterparties . . thereof financial liabilities measured at amortised cost . . thereof deferred ta liabilities . . thereof current liabilities . . thereof financial instruments held b central counterparties . . thereof financial liabilities measured at amortised cost . . thereof cash deposits b market participants . .
Deutsche Börse Group’s total assets increased year on year by 1 per cent. The increase in intangible assets resulted primaril from the ac uisitions of ondcenter and uantitati e Broker. This particularl ga e rise to significantl higher good ill.
uch higher cash restricted bank balances and financial instruments held b central counterparties as at the reporting date ere also responsible for the rise.
49 Deutsche Börse Group nnual report
ecuti e and uper isory Boards Management report | Report on economic position inancial state ents otes urther in or ation
Group e uity rose by per cent co pared ith the pre ious year his as ainly due to the net pro it or the reportin year less the di idend pay ent or the pre ious inancial year
Deutsche Börse Group in ested a total o €195.4 illionin the reportin year 1 €184.7 illion in intangible assets and property plant and equipment (capital expenditure, CAPEX). The Group’s largest in est ents ere in the learstrea and ure se ents
r ing a ita or in capital co prises current assets less current liabilities e cludin technical closin date ite s urrent assets e cludin technical closin date ite s a ounted to €1,289. illion 1 €898.4 illion s Deutsche Börse Group collects ees or ost o its ser ices on a onthly basis the trade recei ables o €616.6 illion included in current assets as at 1 Dece ber ere relati ely lo co pared ith net re enue 1 Dece ber 1 €447.3 illion he si ni icant increase in trade recei ables as particularly due to the ac uisition o ondcenter G hich led to a si ilar increase in trade payables he current liabilities o the Group e cludin technical closin date ite s a ounted to €1,374.5 illion 1 €1,072.9 illion e cludin technical closin date ite s he Group there ore had sli htly ne ati e or in capital o €84.6 illion at year end 1 €174.5 illion
e ni a sing date ite s The “financial instruments of the central counterparties” item relates to the function performed by Eurex learin G and uropean o odity learin G since they act as the central counter parties or Deutsche Börse Group’s various markets, their financial instru ents are carried in the balance sheet at their air alue he inancial instru ents o the central counterparties are described in detail in the ris report and in notes 1 and to the consolidated inancial state ents
ar et participants linked to the Group’s clearing houses partly provide collateral in the form of cash deposits hich are sub ect to daily ad ust ents he cash deposits are enerally in ested on a secured basis o erni ht 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 1 arch une epte ber and 1 Dece ber aried bet een €38.2 billion and €62.2 billion 1 bet een €29.6 billion and €32.3 billion
a e added rea d n an er r an e alue added is calculated by subtractin depreciation and a ortisation as ell as e ternal costs ro the co pany per or ance n the alue added by Deutsche Börse Group a ounted to €2,400.7 illion 1 €2,194.8 million). The breakdown shows that large portions of the generated alue added lo bac into the econo y per cent (€577.2 illion bene it shareholders in the or o di idend pay ents hile per cent (€822.9 illion as attributable to sta costs in the or o salaries and other re uneration co ponents a es accounted or 1 per cent (€403.1 illion hile per cent (€49.6 illion as attributable to e ternal creditors he per cent alue added that remained in the company (€ illion is a ailable or in est ents in ro th initiati es a on other thin s
50 Deutsche Börse Group nnual report
ecuti e and uper isory Boards Management report | Report on economic position inancial state ents otes urther in or ation
era assess ent t e e n i siti n t e e ti e ard
he ain actor a ectin inancial year as the outbrea o the o id 1 pande ic its lobal econo ic i pact and the challen es o dealin ith the irus and its contain ent n an e traordinarily olatile ar et en iron ent the Group sa si ni icant earnin s increases in the irst uarter o hereas ar ets beca e increasin ly subdued o er the re ainder o the year and pri e rates ell to ne lo s orld ide ecular net re enue ne ertheless rose by per cent across the Group as planned yclical e ects and consolidation each contributed another per cent to net re enue ro th increasin net re enue o erall by per cent d usted operatin costs ere up by per cent ain contributin actor as the consolidation o co panies ac uired durin the course o n an ad usted basis the Group increased net profit attributable to Deutsche Börse AG shareholders by 9 per cent to €1,204. illion hich as also in line ith the ecuti e Board s e pectations
Based on this, the Executive Board considers that Deutsche Börse Group’s financial position remained ery solid durin the reportin period he Group enerated hi h operatin cash lo s as in pre ious years Deutsche Börse as able to urther i pro e the ratio o net debt to B D at Group le el he i ure o 1 as si ni icantly belo the tar et o 1
Deutsche Börse G has o ered its shareholders increasin di idends or years – and the inancial year is no e ception proposed di idend of €3.00 (2019: €2.90) is 3 per cent higher than the distribution to shareholders in the pre ious year s a result o the i pro e ent in earnin s the distribution ratio ell ro per cent in the pre ious year to per cent in the year under re ie ad usted in each case or e ceptional ite s and as thus in line ith the ecuti e Board s tar et ran e o to per cent
151
Management report | Report on post-balance sheet date events
2016 2017 2018 2019 2020
Consolidated income statement €m €m €m – – – – – €m €m – – – – – €m € Consolidated cash flow statement €m Consolidated balance sheet €m €m €m Performance indicators € Return on shareholders’ equity (annual average) Deutsche Börse shares € €bn Rating key figures
Bonds that will mature in the following year are reported under “other current liabilities” (2014: €139.8 million, 2017: €599.8 AG shareholders / average shareholders’ equity fo shareholders’ equity
of €1 billion on 15 February 2021, divided into two tranches with maturities of five and ten years. The – ’ “ ”
52 euts he rse rou nnual re ort
e utive and u ervisory oards Management report | Combined non-financial statement inan ial state ents otes urther in or ation
o ined non inan ial state ent
his o ined non inan ial state ent or euts he rse rou and the arent o any euts he rse is integrated into the o ined anage ent re ort it ul ils the rovisions o se tions –e and – o the andelsgeset u h ( er an o er ial ode) t is also in a ordan e ith the standards (“Core” option) of the Global Reporting Initiative (GRI). A detailed overview of all GRI indi ators ( R inde ) is availa le at deuts he oerse o ustaina ility ratings re orting R ore detailed in or ation that is re eren ed in the non inan ial state ent does not or art o the state ent itsel rovided no e li it state ents are ade or the arent o any qualitative in or ation ithin the eaning o the o ined anage ent re ort a lies to euts he rse rou and the arent o any euts he rse n so e ases quantitative details on erning the arent entity are dis losed se arately
euts he rse rou uses not only the inan ial igures outlined in the “Group management” section or rou anage ent ut also non inan ial er or an e indi ators – s e i i ally the availa ility o its trading syste s or the ash and derivatives ar ets and the share o o en in e e utive ositions or details regarding the targets ursued and the results a hieved in the year under revie lease re er to the sections entitled “Social matters – systems availability” and “ or orate governan e state ent – target figures for the proportion of female executives beneath Executive Board level”
ateriality analysis o rising ontinuous analyses and assess ents o relevant internal and e ternal stakeholders’ expectations and requirements is a key element of Deutsche Börse Group’s sustainability strategy his ro ess is ai ed at identi ying the issues required to understand the roup’s business er or an e o erating results the situation o the o any and the i a t o its a tivities on non inan ial as e ts hus the rou is a le to identi y o ortunities and ris s in its ore usiness a tivities at an early stage and de ine on rete a tion areas on this asis n an internal validation o the revious a tion areas as arried out hi h on ir ed the results ro nly the ateriality o the “Human Capital Development” area of activity was ranked higher by the internal sta eholders than in the revious survey
he o ined non inan ial state ent outlines the o e tives a tions due diligen e ro esses a lied the involvement of the Group’s management and other stakeholders, as well as the concept outcomes ith res e t to e loyee atters (see the “Employees” section) o lian e (in luding o ating orru tion and ri ery) so ial atters and rodu t atters
s a servi e rovider ith a o us on ele troni ar et in rastru ture servi es euts he rse rou engages in relatively little environ entally sensitive a tivity ro a or orate e ology ers e tive hen e in this o ined non inan ial state ent no detailed re ort is rovided in this res e t onetheless the rou eels an o ligation to ards the environ ent and to a e are ul use o natural resour es euts he rse rou has outlined its environ ental oli ies in its ode o usiness ondu t ndi ators or its environ ental sustaina ility er or an e are availa le on its e site deuts he oerse o ustaina ility rating re orting indi ators nviron ental to i s are also e o ing ore i ortant or the stru turing o individual rodu ts and servi es te s ta en here are des ri ed in the section “Product matters” euts he rse rou has also u lished a li ate strategy aligned ith the re o endations o the as or e on li ate related inan ial is losures ( )
53 Deutsche Börse Group Annual report
Executive and Supervisory Boards Management report | Combined non-financial statement inancial statements otes urther information
he area of human and employee rights was identified as non material for Deutsche Börse Group by its stakeholders during the materiality analysis according to HGB and GRI, and is thus not included in the non financial statement. evertheless, active protection of human and employee rights is a key element of Deutsche Börse Group’s corporate responsibility: the Group addresses this at various points along the value chain. In addition, complying with human and employee rights is a key pillar of the Group’s human resources policy. Specific topics (e.g. diversity) are discussed in the “Employees” section and on the website www.deutsche boerse.com Sustainability ur ESG profile Employees Guiding principles. Deutsche Börse Group furthermore reports on sustainability in procurement management on its website at www.deutsche boerse.com Sustainability ur ESG profile Procurement management and is aware of its responsibility as a global company. It oined the Global Compact in .
hen the materiality analysis was carried out the stakeholders did not consider taxes to be material either. Deutsche Börse is nonetheless aware of its responsibilities in this area and so reports voluntarily on its tax strategy and handling of tax legislation in the section “Compliance – including combat against corruption and bribery”.
As an international capital markets organiser, Deutsche Börse Group aims to build and grow market participants’ trust in its market structures. As a responsible member of society, it also endeavours to use the expertise it deploys for the successful operation of its core business in a way that enables it to contribute to resolving social problems. In this context, Deutsche Börse Group wishes to set a good example. Please refer to the “Fundamental information about the Group” section for a detailed description of Deutsche Börse Group’s business model. Its sustainability strategy ”Acting with an eye to the future” defines the Group’s understanding of entrepreneurial responsibility and guides its operations.Please see the section entitled “Management approach for a Group wide commitment to sustainability”.
As a member of the Global Compact ( GC) and the Sustainable Stock Exchanges initiative (SSE), Deutsche Börse Group has committed itself to implementing the Sustainable Development Goals (SDGs) of the “2030 Agenda for Sustainable Development” set by the UN. An overview of Deutsche Börse Group’s contribution to the corresponding targets can be found in the following “Overview: key sustainability aspects” table.
54 Deutsche Börse Group Annual report 2020
E ecutive and Supervisory Boards Management report | Combined non-financial statement Financial statements Notes Further information
Overview: key sustainability aspects
Relevant contents of the non-financial statement according to section 289c Action areas relevant to Deutsche UN Sustainable Development Goals (SDGs) HGB1) Börse Group covered by Deutsche Börse Group
Business model ▪ Overview of Deutsche Börse Group ▪ Economic performance ▪ SDG 7 “Affordable and clean energy” ▪ Ob ectives and strategies ▪ Stakeholder engagement ▪ SDG 8 “Decent work and economic ▪ Internal management ▪ Brand management growth” ▪ esearch and development activities ▪ SDG 9 “Industry, innovation and infrastructure“ ▪ SDG 10 “Reduce inequalities“ ▪ SDG 12 “Responsible consumption and production“ ▪ SDG 17 “Partnerships for the goals“ Mandatory aspects Employee matters ▪ Staff development ▪ uman Capital Development ▪ SDG 4 “Quality education“ ▪ CO ID ▪ uman and employee rights ▪ SDG 5 “Gender equality“ ▪ uman resources strategy ▪ SDG “Decent work and economic ▪ romoting diversity and inclusion growth” ▪ Employer attractiveness ▪ SDG 10 “Reduce inequalities“ Social matters ▪ Sustainable financial market initiatives ▪ Economic participation and ▪ SDG 4 “Quality education“ ▪ Stable, transparent and fair markets education ▪ SDG 8 “Decent work and economic • Systems availability ▪ ransparent, stable and fair growth” • Market transparency markets ▪ SDG 9 “Industry, innovation and • Stable financial markets infrastructure“ ▪ SDG 10 “Reduce inequalities“ ▪ SDG 12 “Responsible consumption and production“ ▪ SDG 16 “Peace, justice and strong institutions“ ▪ SDG 17 “Partnerships for the goals“ Anti-corruption and bribery matters ▪ Compliance – organisational structure ▪ Good governance ▪ SDG 8 “Decent work and economic ▪ Code of business conduct growth” ▪ Compliance rules ▪ SDG 10 “Reduce inequalities“ ▪ Compliance training ▪ SDG 16 “Peace, justice and ▪ histleblowing system strong institutions“ ▪ Analysis of compliance risks ▪ Due dilligence customer review ▪ Data protection ▪ Inside information ▪ Internal e ternal audit ▪ a es Further relevant aspects Product matters ▪ Customer satisfaction ▪ Sustainable product and service ▪ SDG 7 “Affordable and clean energy” ▪ Sustainable inde products portfolio ▪ SDG “Decent work and economic ▪ Eure ESG derivatives growth” ▪ Energy and energy related markets ▪ SDG 9 “Industry, innovation and infrastructure“ ▪ SDG 12 “Responsible consumption and production“
) HGB = Handelsgesetzbuch (German Commercial Code).
3 55 Deutsche rse Group Annual report 2020
ecutive and Supervisory oards Management report | Combined non-financial statement inancial statements otes urther information
ees
his chapter provides an overview of key indicators reflecting staff developments at Deutsche rse Group at the same time, it satisfies the requirements for reporting on employee matters as part of the non financial statement
ta de e ent As at 1 December 2020, Deutsche rse Group employed a total of 7,2 8 staff 1 December 2019 6,775 , drawn from 110 nationalities at 4 locations worldwide he average number of employees in the reporting period was 6,996 2019 6,286 n Group level, this corresponds to an increase of around 11 percent compared to the previous year’s reporting date.
he fluctuation rate was 6 per cent unadjusted 7 7 per cent 1 December 2019 8 7 and 10 6 per cent At the end of the year under review, the average length of service for the company was 8 years 2019 8 9 years
The number of Deutsche Börse AG’s employees rose by 1 7 during the year under review to 1,69 as at 1 December 2020 comprising 640 women and 1,05 men 1 December 2019 1,556 employees he average number of employees at Deutsche rse AG for the 2020 financial year was 1,605 2019 1,505 n 1 December 2020, Deutsche rse AG had employees at si locations around the world
or more details, please refer to the table entitled “Key data on Deutsche Börse Group’s workforce as at 31 December 2020”
C he coronavirus pandemic affected Deutsche rse Group across all locations in 2020 and continues to do so In arch 2020, almost the entire workforce started working from home home office After a social distancing strategy and a strict cleaning and disinfection concept had been introduced employees were allowed to return to the office on a voluntary basis from 27 April, but always dependent on the local rules in force at their location A communications programme was set up for employees working from home, to keep them regularly informed about the status of the pandemic and give them tips on how to cope with the new situation ontacts to psychological networks and counsellors were established globally to reflect the e traordinary situation and provide emotional support Altogether, this has made it possible to deal with this difficult situation well so far he steps taken in response to the pandemic will remain in place until the situation has normali ed
656 Deutsche Börse Group Annual report 2020
ecutive and upervisory Boards Management report | Combined non-financial statement inancial statements otes urther information
an res r es strateg mployee commitment and highly developed skills are among the cornerstones supporting Deutsche Börse Group’s business success. Its corporate culture is characterised by a sense of responsibility, commitment fle ibility and teamwork. Deutsche Börse Group aims to make sure that staff with these ualities continue to oin the company in the future and that they stay for the long term if possible. Deutsche Börse Group’s Executive Board is engaged in employee matters through one of its Board members who is simultaneously Director of abour elations as well as through other regular reporting formats. The workforce is highly diverse and represents a broad range of different age groups genders physical abilities se ual identities ethnic origins and beliefs. The company promotes this diversity and benefits from it creating an environment conducive to integration from which the corporate culture benefits. This is also in the interests of Deutsche Börse Group’s business: its broad range of diverse products and services and the international composition of its client base pose specific re uirements regarding the professional and cross cultural e pertise of employees.
ithin the scope of its growth strategy the Group promotes a high performance culture with a distinct focus on clients’ needs and innovation. n order to encourage this culture Deutsche Börse Group has a remuneration system for e ecutive staff in place that incorporates growth performance and financial indicators to a greater e tent than in previous years.
n uly 201 the upervisory Board adopted the human resources strategy 2020 initiated by the ecutive Board. This strategy is built on a detailed analysis of employee needs and the relevant human resources indicators e.g. recruiting metrics key figures on staff development as well as on the results of an employee survey conducted in February 2019. It rests on the four pillars “attract”, “develop”, “retain” and “lead”. According to these pillars, concepts for employer branding, recruiting, training & development remuneration and fle ible working time models have been drawn up.
n the course of implementing the strategy uman esources was split into an operative business partner team and a strategic concept team. oreover e pansion of the ervice entre is planned over the medium term.
r ti n di ersit and in si n Diversity is not only apparent in the origins of employees at Deutsche Börse Group but also in the breadth of professional backgrounds and the many other differences that make up each individual personality in the multi faceted team. As a global organisation we stand for recognition appreciation and integration within the working environment and encourage openness and fairness. This is why we signed the “Diversity Charter” and acknowledge our corporate social and societal responsibility as e pressed in the ode of onduct that applies throughout the Group.
Diversity and integration are the basis of our corporate culture which is defined by open dialogue trust and mutual acceptance. e see the wealth of different backgrounds and ideas as a key to our success. ur Diversity nclusion statement is an e pression of our aspiration to offer our staff and all future talents a fully inclusive and inviting workplace.
3 57 Deutsche Börse Group Annual report 2020
Executive and upervisory Boards Management report | Combined non-financial statement Financial statements otes Further information
Deutsche Börse Group does not tolerate any discrimination, hether on the grounds of age, gender, disability, sexual identity, ethnic origin or belief and irrespectively of hether behaviour among employees is concerned or the placement of orders ith third parties. Deutsche Börse Group s E ual pportunities fficers safeguard the e ual treatment of staff members. oreover, uman esources has implemented processes designed to ensure e ual treatment in the selection of personnel and enable the Group to ta e prompt action henever discrimination is suspected. In 2020, no incidents of discrimination ere reported at the Fran furt Eschborn, uxembourg, rague and Cor locations hich are covered by reporting accordingly, no countermeasures ere re uired.
er attra ti eness To remain sustainably successful, the recruiting of top talents is of the essence. The Group continued to expand its presence at universities and its social net or ing activities ith this aim in mind. In addition, the company’s career page as overhauled and a pro ect launched to define the employer brand. An attractive entry level format as also created for outstanding graduates by introducing a trainee programme on 1 ctober.
Deutsche Börse Group is among the founding partners of the ada Fello ship, a multi company initiative. nce again 0 people from our company too part in this 12 month development programme in 2020. It aims to give its participants the s ills they need to drive digitisation as digital ambassadors. They are introduced to the main technologies of the future, their potential applications and ho to transfer them to their organisation.
From initial contact to the actual meeting, mentors and mentees can connect on the “Meet your Mentor” platform. Experienced colleagues act as sponsors for other employees, ma ing their or easier. As mentors, they assist ne colleagues in net or ing beyond their o n department, help them to get to no the company and offer a comprehensive, cross divisional understanding.
To increase the share of omen in executive positions the company ensures that omen are identified as candidates. In addition, Deutsche Börse Group offers additional tools to promote female employees, such as targeted succession planning and a mentoring programme ith external mentors. Exchanges among women are encouraged by means of women’s networks. Our Capital Markets Academy also offers training courses for omen on financial planning, investments and retirement saving.
For details regarding targets for female uotas, please refer to the section entitled “Corporate governance statement – target figures for the proportion of female executives beneath the Executive Board” and the section entitled “Comparison with the forecast for 2020”.
Training and professional development have high priority at Deutsche Börse Group. Employees expand and refresh their no ledge continuously in the context of specific training courses for exchange related sub ects. These particularly include IT training, e.g. for cloud computing, and career path training, e.g. for pro ect management and leadership. ith regard to personal development, the Group also offers numerous online and live training courses that are tailored to the target group, e.g. for communication, responsibility or team or s ills. A large proportion of the regular face to face courses as carried out virtually in 2020 due to the covid 19 pandemic. Deutsche Börse also supports its employees and executives in facing their individual challenges by offering a broad range of internal and external professional training and development measures see the “Key data on Deutsche Börse Group’s workforce as at 31 December 2020” table .
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Key data on Deutsche Börse Group’s workforce as at 31 December 2020 part 1
Deutsche Börse AG Deutsche Börse Group
All locations Germany Luxembourg
Male Female Male Female Male Female Employees (HC) 1,053 640 1,890 1,218 680 419 0 years and older 3 1 2 2 213 102 40−49 years 2 1 00 2 2 1 30−39 years 31 2 3 1 112 nder 30 years 103 1 1 1 2 0 Average age 3 0 2 0 2 Full time employees 1,01 1, 1 2 2 art time employees 3 1 3 1 2 13
Length of service nder years 32 2 –1 years 23 2 2 2 23 31 Over 1 years 2 2 2 2 1
Staff turnover oiners 111 230 1 3 30 eavers 2 1 2 23 23
raining days per employee F E . . . . .3 .
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Key data on Deutsche Börse Group’s workforce as at 31 December 2020 (part 2)
Deutsche Börse Group
Czech Republic Ireland Other locations
Total Male Female Male Female Male Female (part 1 and 2)
Employees (HC) 658 374 253 269 1,037 440 7,238 0 years and o der 2 10 1 11 20 1 40−49 years 1 2 110 1 30−39 years 3 231 10 33 1 3 2 nder 30 years 101 101 211 1 12 era e a e 3 3 3 3 0 3 0 u t me emp oyees 331 2 2 2 1 01 02 23 art t me emp oyees 10 3 1 2 20 3 1
Length of service nder years 1 0 –1 years 1 2 31 3 31 er 1 years 0 0 1 1
Staff turnover o ners 31 2 13 0 01 ea ers 0 30 20 12 11 3 2
ra n n days per emp oyee 0 3 2 2 2 3 3 2
C ian e – in ding at against rr ti n and ri er
espons b e bus ness operat ons mp y adherence to aws and re u at ons they are a so based on the pr nc p e of nte r ty and eth ca y rreproachab e conduct at a t mes Deutsche Börse Group has mp emented a comp ance mana ement system based on re u atory re u rements w th the ob ect es of pre ent n m sconduct and a o d n ab ty and reputat ona r sks for the Group ts e a representat es e ecut es and staff Beyond bus ness re ated comp ance re u rements the focus s on stren then n a un form comp ance cu ture throu hout the Group espec a y w th a ew to enhanc n comp ance awareness he comp ance mana ement system – under the respons b ty of and promoted by the ecut e Board of Deutsche Börse G – therefore const tutes an nd spensab e e ement of ood corporate o ernance w th respect to comp ance uch a system pro des the foundat on for susta nab e r sk transparency spec f ca y t fac tates m t at n r sks n the areas of money aunder n terror sm f nanc n data protect on corrupt on as we as market man pu at on and ns der trad n t a so mon tors re u rements concern n f nanc a sanct ons and embar oes
he comp ance mana ement system app es to Deutsche Börse G as we as to domest c and nternat ona compan es n wh ch Deutsche Börse G ho ds a ma or ty nterest whether d rect y or nd rect y Deutsche Börse Group pursues an enterpr se w de approach to ts omp ance funct on ensur n that app cab e aws and re u atory re u rements are fo owed w th respect to nd dua e a ent t es
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he h ef omp ance ff cers at the compan es n the Group that are co ered by bank n re u at ons ha e funct ona report n nes to the Group h ef omp ance ff cer he same app es to the h ef omp ance ff cers of ont o and 3 0 he Group h ef omp ance ff cer reports n turn d rect y to the ecut e Board of Deutsche Börse G omp ance report n nc udes a re e ant comp ance r sk areas w th n the mandate of the comp ance funct on
Deutsche Börse Group s cont nua y de e op n ts comp ance mana ement system n order to dea w th r s n comp e ty and ncreas n re u atory re u rements Deutsche Börse Group has taken steps to dent fy and m t ate comp ance r sks and to assume ts respons b t es n the e ent of any comp ance nc dents h s app es part cu ar y to money aunder n f nanc n of terror sm f nanc a sanct ons and embar oes market man pu at on ns der trad n and data protect on
or th s purpose and for mater a areas of comp ance r sk Deutsche Börse Group a ns ts system w th the recommendations of an internationally recognised standard (ISO 19600 “Compliance Management ystems – Guidelines”). Based on this standard, the Group’s compliance function identifies fields of act on and measures to ensure comp ance mana ement cont nues to meet the re u rements as they chan e
s a member of the G oba ompact Deutsche Börse G has comm tted to obser e the re ated pr nc p es notab y the pr nc p e to work a a nst corrupt on n a ts forms wh ch nc udes e tort on and br bery n ne w th ts code of bus ness conduct Deutsche Börse Group proh b ts ts emp oyees from n o n themse es n corrupt on or from tak n part n any act ons wh ch may ead to the mpress on that the Group prom ses arran es pro des rece es or asks for nadm ss b e benef ts Br bery and fac tat on payments are proh b ted
It is Deutsche Börse Group’s guiding principle that the actions and decisions of all employees are taken ob ect e y and w th nte r ty ana ement p ays a part cu ar y mportant ro e n th s conte t Deutsche Börse Group s fu y aware of the so called “tone from the top” for achieving a high level of awareness of the need to mana e comp ance r sks – both w th n the Group and amon st market part c pants n order to susta nab y enshr ne th s u d n pr nc p e and to pre ent Deutsche Börse Group and ts staff from e a sanct ons and reputat ona dama e Group omp ance has mp emented a ar ety of pre entat e measures n a r sk or ented approach
Compliance – organisational structure Group omp ance sets standards for the key comp ance r sks affect n a ent t es w th n the Deutsche Börse Group n th s conte t Group omp ance de ses r sk or ented measures n order to conta n and mana e dent f ed r sks and to commun cate r sks nc dents and the effect eness of the measures taken t ensures cont nuous mpro ement of the comp ance mana ement system by way of re u ar ad ustments to the re e ant nterna po c es and processes
Key comp ance top cs are d scussed n the Group omp ance omm ttee of Deutsche Börse Group omm ttee members are the sen or mana ers of the bus ness un ts and the re e ant contro funct ons for the Group as a who e
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Code of business conduct Deutsche Börse Group’s code of business conduct, which is communicated to all members of staff, summarises the most important aspects with regard to corporate ethics and compliance as well as appropriate conduct. he Code focuses on principles to guide decisions – not rules or lists of dos and don’ts. Moreover, Compliance provides employees with compliance relevant information via the corresponding intranet pages, unless specific confidentiality aspects prevent such communication. or details, see the section entitled “Corporate governance statement”.
Compliance rules Group Compliance has implemented Group wide policies designed to ensure that the internal stakeholder groups acting on ehalf of Deutsche Börse Group comply with the ehavioural rules set out in such policies, with the o ective of countering reaches of compliance throughout the Group in a preventive, investigative and conse uential manner. Group wide communications via the intranet are geared towards providing employees (including mem ers of the ecutive Board and Managing Directors) with the necessary guidance in their daily work, and making sure they commit to such guidance.
Compliance training egular compliance training is essential for the compliance culture within the Deutsche Börse Group. mployees of Deutsche Börse Group worldwide are trained in relevant compliance topics. raining focuses particularly on money laundering, financing of terrorism, data protection, corruption, market manipulation and insider trading. Managers e posed to a higher compliance risk y virtue of their work receive additional training as re uired. articipation in training measures covering the compliance topics mentioned a ove is mandatory for employees, as well as for managers.
Whistleblowing system Deutsche Börse Group has esta lished a whistle lowing system, where employees can relay information y phone or email a out potential or actual reaches of prudential or regulatory rules and ethical standards. he anonymity of whistle lowers is guaranteed. hrough its commitment to compliance awareness, Deutsche Börse Group cultivates an open approach to dealing with misconduct. or this reason, concerns are often passed on directly to the responsi le line manager, or to Compliance. During 0 0, reports were su mitted via the whistle lowing system, or directly via line managers or control functions (such as Compliance).
Analysis of compliance risks In line with regulatory re uirements, Deutsche Börse Group carries out detailed risk analyses and or risk assessments, at least on an annual asis – specifically, it analyses the risk of eing a used for the purposes of money laundering financing of terrorism, corruption and securities law infringements. Such risk analyses and assessments comprise the Group’s own business activities as well as business relationships, market participants, products and services. isk mitigating measures are derived from the compliance risks identified.
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Due diligence review of clients, market participants, counterparties, and business partners, plus transaction monitoring Deutsche Börse Group is constantly improving its processes for the onboarding of new clients and the review of existing clients (“Know Your Customer” processes). Depending on the assessment of client risk in each case, client relationships are sub ect to corresponding diligence duties concerning their establishment, update, and monitoring. Client relationships are not entered into where the risks involved are too high. Deutsche Börse Group analyses transaction data in order to identify activity which might indicate potential money laundering.
Deutsche Börse Group is e posed to the risk of sanctions being imposed upon business partners moreover, there is a risk of bribery and corruption. n this connection, the Group e amines its business partners, whereby their details are cross checked against relevant data sources such as embargo, sanctions, , terrorist and other “blacklists”). Appropriate measures are taken in the event of any match against such lists.
ey non financial performance indicators corruption and data protection 2020 2019
Corruption unished cases of corruption ercentage of business units for which measures have been taken to address corruption risks umber of employees who were trained in BC measures anti bribery and corruption , , Data protection umber of ustified customer complaints relating to data protection
ll Deutsche Börse Group employees must repeat the web based BC training every two years. s the reiteration and completion of the training takes place in odd numbered years, the number of training courses completed in the even numbered year is significantly lower.
Data protection/protection of personal data Deutsche Börse Group has e posure to a plethora of data during the course of its business activities. he Group takes data protection very seriously and has taken measures to ensure compliance with data protection law, in particular the appropriate and transparent processing of personal data. he ecutive Board has appointed a Data rotection fficer and established a data protection organisation to ensure that the data privacy framework and the principles of the General Data rotection egulation, which came into force in , are adhered to. n this basis the data protection organisation informs and advises the individual legal entities with respect to data protection. he data protection organisation also serves as a contact for data protection authorities, and supports the business units in assessing risks related to the issue of data protection risks. t supports a stronger culture of data protection at Deutsche Börse Group by raising awareness and providing training on data protection in the conte t of the Group’s business activities.
Since 2019 the data protection organisation’s monitoring framework has been incorporated into the structure of compliance safeguards and controls, as a second line of defence on data protection. he Data rotection fficer informs senior management on an annual basis about its activities to enhance the Data rotection framework.
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Inside information In its capacity as an issuer of securities, Deutsche Börse Group has access to information which, in accordance with legal requirements, may be classified as inside information. To raise awareness amongst the employees affected, further measures were introduced on a Group-wide basis in 2020. They are designed to mitigate the risks of market manipulation and insider trading for employees’ personal account transactions and are geared towards ensuring that maximum sensitivity is applied to dealing with such information.
Compliance maintains a Group-wide restricted list in which issuers or financial instruments are included if particularly sensitive, compliance-relevant information. Compliance may impose a general trading ban on such issuers or financial instruments or may prohibit certain types of transactions. A confidential watch list is used to summarise compliance-relevant information about other issuers and/or financial instruments. In particular, Compliance uses these lists to monitor personal transactions of employees and Chinese walls.
Internal/external audit At least once a year, the internal audit function checks whether the measures and concepts of the compliance management system comply with the regulatory requirements, in a risk-based manner. Moreover, regulated entities are subject to statutory external audits.
Taxes Its global operations mean that Deutsche Börse Group is liable for tax in many countries. The management of Deutsche Börse Group is aware of its responsibility to pay appropriate taxes in all countries depending on its local value added, since this plays an important role in international relations from an economic and social perspective. This responsibility is reflected in compliance with applicable legislation and regulations to tackle criminal tax offences and in constructive and fair cooperation with tax authorities.
Recent international developments to increase tax transparency require multinational groups to make additional notifications and disclosures to tax authorities. Country-specific reporting of revenue, profits and tax payments should be mentioned in this context, as well as the reporting procedure for cross- border tax arrangements (DAC6). Deutsche Börse Group follows these rules consistently and so contributes to supporting efforts to prevent abusive tax practices, such as the shifting of profits to low-tax countries. In view of the reporting process on cross-border arrangements introduced in Germany as of 1 July 2020, Deutsche Börse Group carried out a comprehensive DAC6 analysis with the support of an external auditing company.
The tax strategy of Deutsche Börse Group defines a uniform framework for the management of all tax matters. It is derived from the business strategy and the code of conduct of Deutsche Börse Group. Its core elements comprise compliance with applicable tax regulations in Germany and abroad and adequate management of tax risks. The tax strategy is supplemented by binding policies for the Group, which ensure a clear division of responsibilities and the involvement of the Group Tax function in all tax- relevant matters.
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Deutsche rse Group has a ax Compliance anagement System to monitor its tax compliance obligations and minimise the related tax and liability risks. t defines clear process flows with integrated controls which are reviewed annually in the course of an ade uacy and efficiency analysis.
ocial matters
As a market infrastructure provider Deutsche rse Group considers its primary responsibility to be the transparency of capital markets. y ensuring such transparency it fosters stability in these markets promoting their economic success. he management is involved through its participation on the Group Sustainability oard its approach on social and sustainability matters is described in detail in the section “Management approach for a Group wide commitment to sustainability”.
ustainable financial market initiatives he Green and Sustainable inance Cluster Germany e. . is an initiative committed to enhancing the expertise on sustainable finance in the market putting that expertise to efficient use and identifying (as well as taking) specific action to make national and international financial markets structures fit for the future. he Cluster has defined four fields of action sustainable finance – status uo and innovation data and digitalisation metrics and standards dialogue and knowledge development. t coordinates the activities of the participating institutions within these fields of action and brings them together with policymakers regulators civil society and academia. ithin Germany the Cluster collaborates closely with relevant political players in erlin. At a uropean level the Cluster is a member of the technical expert group on sustainable finance and thus actively involved in the European Commission’s Action lan on sustainable finance the Cluster supports the Action lan s implementation and is involved in the corresponding consultation process leading to future regulation. Deutsche rse Group and the Cluster are also members of the Sustainable inance Committee to advise the German government and foster dialogue between the financial industry real economy civil society and academia.
table, transparent and fair markets
stems availabilit Deutsche rse AG operates its trading systems for the cash and derivatives markets as redundant server installations distributed across two geographically separated secure data centres. Should a trading system fail it would be operated from the second data centre. ogether with clients Deutsche rse successfully simulated this scenario – as well as the impact of local disruptions – within the scope of the A est (the annual disaster recovery exercise conducted by the utures ndustry Association). ther disruptions such as workstation malfunctions or absences of key personnel were also tested. he ongoing covid 19 pandemic has also meant that the emergency workstations have been permanently in use since arch 2020. ultiple testing of the software used its verified roll out and the end to end monitoring of servers network and applications were not able to prevent two successive complex malfunctions in the internal high speed network which brought the system availability for the spot market trading system down to 99. 1 per cent and the figure for the derivative market trading system down to 99. 91 per cent. hese levels corresponded to downtimes of around 2 minutes and minutes respectively during the entire year. ide ranging steps were taken to rule out such malfunctions in future which have largely been completed. hey particularly involved accelerating the emergency procedures in order to make the system available again uickly even if the faults cannot be prevented. mergency tests are now carried out more fre uently the underlying messaging software has been optimised and is still being revised.
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arket transparenc ection of the rsengeset rsG German Exchange Act authorises exchanges to impose additional admission re uirements and further notification duties upon e uity issuers for parts of the regulated mar et. ran furter ertpapierb rse the ran furt toc Exchange used this authorisation in its Exchange ules section sub section to create the “Prime Standard” in 2003. he rime tandard segment is characterised on the one hand by special post admission obligations which are monitored by the FWB with any breaches sanctioned by the exchange’s Sanctions Committee; on the other hand admission to the rime tandard is a mandatory re uirement for inclusion in one of eutsche rse AG’s selection indices.
ver and above statutory re uirements under the ertpapierhandelsgeset p G German ecurities rading Act rime tandard issuers must submit their financial reports annual and half yearly reports as well as their uarterly statements for the first and third uarter to in German and or English and within set deadlines. Moreover rime tandard issuers must submit their calendars of material corporate events to FWB, hold an analysts’ conference at least once a year and publish any inside information in English as well as German. All submissions to must be carried out via the Exchange eporting ystem E . his electronic interface allows for efficient sorting and display of data helping to spot any impending failure to meet a deadline. his allows to support issuers to fulfil their transparency duties in the best possible manner by sending out email reminders prior to each deadline. included additional recommendations in its email reminders in to reflect the information published by the European ecurities and Mar ets Authority E MA on the impact of the covid pandemic on deadlines for the publication of financial reporting. hey will ma e it possible to ta e any special circumstances and difficulties into account when investigating breaches of obligations. All reports and data submitted to are subse uently available on www.boerse fran furt.de en the exchange’s website, under the respective issuer’s name. Information is thus accessible to interested investors in a compact easy to find manner creating a particular level of mar et transparency within the rime tandard segment. ubmission via E allows for monitoring fulfilment of transparency re uirements – seamlessly and without delay.
n fifteen cases were submitted to the anctions Committee for the delayed disclosure of information. n ten of these cases circumstances and difficulties that arose in connection with the C pandemic were ta en into account when proposing the amount of the administrative fines. n another case of an identified breach of duty the initiation of sanction proceedings was waived. Eleven cases had been completed by the expiry of the deadline of anuary n those cases already concluded administrative fines totalling € 310,800 were imposed nine times.
urthermore eutsche rse Group considers it its duty to contribute to regaining lost trust in the capital mar et. n fulfilment of this responsibility the exchange operator therefore decided in to sub ect its rules and regulations to an in depth review and to revise them with the involvement of the various regulators.
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In this context the xchange Council of Fran furt Stoc xchange adopted amendments to the xchange ules that will enable management in future to remove from the Prime Standard insolvent issuers or those that have filed for insolvency. ther activities and proposals to promote the transparency of capital mar ets aim to speed up penalty proceedings, increase fines for infringements and to provide investors with transparent information about the issuers concerned and the steps and sanctions that have been ta en against them.
S td. announced a change to the rules on 2 ugust. nder the new rules, companies in statutory insolvency proceedings will be removed from the selection indices within two trading days. he rules ta e effect on ugust. he new rule applies to the companies mentioned above and was agreed in the context of a mar et consultation between uly and ugust. Specifically, the change refers to the opening of insolvency proceedings as proceedings defined by law and comprises all the relevant public announcements in this context. Because companies from other states can also be a member of the index, the rule does not apply solely to erman insolvency law. Prior to this change, companies that were members of the Prime Standard segment and were in insolvency proceedings were removed from the index at the next chaining date.
eutsche B rse roup launched a segment for green bonds – bonds issued to raise capital for pro ects with climate and environmental benefits – on the Fran furt Stoc xchange in ovember 20 . his segment currently comprises 2 bonds that meet the reen Bond Principles of the International Capital ar et ssociation. hey include the use of issue proceeds, the pro ect selection process, management and ongoing reporting. he new segment caters to the demand for sustainable financing, which is rising all over the world. Investors who care not only about the economic, but also the ecological return of their investment can find the right strategy at www.boerse fran furt.de Bonds reen Bonds. he bonds included in Deutsche Börse’s segment are admitted for trading at various uropean stoc exchanges, including the Fran furt Stoc xchange.
Bonds at Fran furt Stoc xchange 2020 otal issue proceeds for bonds € billion , 2 Issue proceeds for green bonds € billion 2
table financial markets he core economic function of an exchange is to preserve economic prosperity and create the right framewor conditions for growth. s a global mar et infrastructure provider, eutsche B rse roup operates mar ets that help enterprises of all si es to raise e uity and debt – which in turn enables them to grow, create and protect obs and contribute to a higher level of value creation.
s central counterparty CCP , urex Clearing fulfils its responsibility of promoting sustainable global economic growth and stable financial mar ets. Furthermore, as a clearing house it is an independent risk manager and ensures a neutral valuation of its members’ risk positions. It also protects members in the event of a mar et participant defaulting, thus minimising ris s and enhancing both the efficiency of trading and the stability of the financial mar ets. he bundling of default ris also permits high netting effects, which in turn facilitate sustainable cost savings for the entire mar et.
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he UK’s decision to leave the EU has caused significant uncertainty for the entire European financial services sector since the referendum on une . ke issue in this conte t is the clearing of over the counter interest rate derivatives hich at approximately €312 trillion account for the largest share per cent of outstanding volumes. t the same time the are the main reason for the strong increase since source BI emiannual Derivatives tatistics une the figure from the Bank for International ettlement .bis.org tatistics Derivatives derivatives statistics) of approximately €442 trillion as ad usted b deducting double counting of interdealer volumes source .clarusft.com); €/US$ exchange rate as at une US$1.1198/€;ECB]. Since a final decision on many Brexit related financial topics has been deferred there is currentl a controversial debate about access to clearing houses outside the creating significant uncertaint amongst market participants. ure learing has come up ith a solution designed to make the potentiall necessar shift of euro clearing to the as straightfor ard as possible for all market participants the ure learing artnership rogramme. hrough this initiative ure learing is not onl offering the market an attractive alternative for clearing interest rate derivatives outside ondon and ithin the but also anticipating potential market turbulence and taking earl action to counteract it.
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Key non financial perfor ance indicators social atters 2020 2019
Transparency roportion of co panies reporting in accordance ith a i u transparency standards Security vaila ility of cash ar et trading syste vaila ility of derivatives ar et trading syste verage onthly cleared volu es across all products € trillion
atio of the ar et capitalisation of co panies listed in the ri e tandard for shares to the ar et capitalisation of all co panies listed on the ran furter ertpapier rse the ran furt toc E change yste availa ility ran s a ongst the ost i portant non financial perfor ance indicators as defined in and section in con unction ith section sentence of the for hich a forecast is ade verage onthly clearing volu e including e change traded and derivatives as ell as securities and repo transactions learing volu es are su ect to dou le counting
eutsche rse roup pays ages salaries and ta es ts co ercial activity therefore contri utes to private and pu lic inco e – this contri ution is ade transparent in the value added state ent or details please refer to the “Value added: breakdown of corporate performance” section
roduct matters
ustomer satisfaction eutsche rse roup is e ecuting a roup ide gro th strategy ith hich it ai s to strengthen its agility a ition effectiveness and clear custo er focus n i proving its organisation the roup ai s to etter address changing client needs and gradually tap unutilised potential y eans of a roup ide approach to ar eting sales innovation and product develop ent
n surveys across the EE Eure and learstrea ere aligned they include co on questions and use a standardised “Net Promoter Score (NPS)” methodology. In this conte t usinesses as their clients a out their readiness to reco end the service provider ith the ai of notifying senior anage ent and staff of the results shortly after the close of the survey
One example of Deutsche Börse Group’s customer focus is Clearstream’s annual client services survey. his survey ai s to identify custo er needs and prioritise and address enhance ent re uests to further i prove products and services he results of this survey are ta en up y the learstrea anage ent o ittee hich includes senior anage ent here concrete actions are ta en to address custo er needs. The Clearstream senior management is provided with an overview of the items (customers’ needs co plaints raised in the survey
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ustainable inde products Qontigo’s index provider STOXX is part of Deutsche Börse Group, calculating and distributing around indices, whereas a growing number of which are designed after sustainability aspects. STOXX’s
maintains its broad range of sustainability indices in response to investors’
▪ STOXX ESG-X indices
1 In an effort to realize synergies within Deutsche Börse Group's index business, Deutsche Börse AG (DBAG) has transferred on 21 August 2019 its index administrator role (as defined under the EU Benchmarks Regulation) to STOXX Ltd. and such indices (DAX, eb.rexx, etc.) have also been included in the ESMA Benchmarks register under Art. 36 of the EU Benchmarks Regulation.
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. STOXX & DAX ESG indices The EURO STOXX 50 ESG index and the DAX 50 ESG index remove companies involved in activities that are undesirable or controversial from a responsible-investing perspective, similar to the approach of STOXX ESG-X indices. In addition they integrate sustainability parameters into stock selection, meaning they prioritize or overweight companies with the highest ESG scores while underweighting the laggards. The EURO STOXX 50 ESG index is based on the EURO STOXX 50®, one of Europe’s flagship benchmarks. The DAX 50 ESG is designed to ensure an ESG index whose liquidity and risk-return characteristics are similar to those of Germany’s DAX®.
The EURO STOXX 50® ESG index, the DAX 50 ESG index and STOXX’s suite of ESG-X indices are suitable for underlying mandates, passive funds, ETFs, structured products and listed derivatives with the ambition to increase liquidity and lower the cost of trading.
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. STOXX & DAX ESG Benchmark indices . STOXX ESG-X Benchmark indices . STOXX Sustainability indices . STOXX Global ESG Leaders and ESG Specialized Leaders indices . STOXX Climate indices . STOXX Low Carbon indices . ESG Impact indices
In addition to the above-mentioned STOXX and DAX indices, the ÖkoDAX® index focuses on German companies active in the renewable energy business.
iSTOXX ESG offering Under the umbrella of the iSTOXX brand, STOXX also offers a broad range of customised ESG-related indices that cater to specific client requirements. These indices offer specific strategies within the broader STOXX universe of responsible investing indices that track companies that are pioneering or making the most headway in the transition to a low-carbon economy and a fairer and better world from the perspective of ESG principles.
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Non-financial key indicators: sustainable index products 31 Dec. 2020 31 Dec. 2019
ESG criteria Assets under management in ETFs based on ESG indices from Qontigo1)2) €m 328.5 274.3 Total assets under management in ETFs based on indices from Qontigo1) €bn 100,468.9 99,209.33 Transparency Number of sustainable index concepts 296 224 Number of calculated indices 12,999 12,554 1) STOXX (STOXX Indices) and Qontigo Index GmbH (DAX Indices) are part of Qontigo 2) Based on the ETFs issued in 2016: FlexShares STOXX® Global ESG Impact index and FlexShares STOXX® US ESG Impact index, based on ETFs issued in 2019: EURO iSTOXX ESG-X & Ex Nuclear Power Multi Factor, EURO STOXX ESG-X & Ex Nuclear Power Minimum Variance Unconstrained, EURO STOXX 50 ESG and STOXX Europe 600 ESG-X and based on ETFs issued in 2020: DAX 50 ESG, STOXX Europe 600 Paris-Aligned Benchmark, EURO iSTOXX Ambition Climat PAB and EURO STOXX 50 ESG
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Eurex ESG derivatives offering urex too over a pioneering role by introducing an SG product suite based on uropean benchmar s in ebruary . The three futures on the highly li uid uropean STOXX benchmar s covering SG xclusions, ow arbon and limate mpact support mar et participants to manage sustainability driven challenges. n October the first exchange traded SG options on a uropean benchmar was added to the product range. t the same time the offering was further complemented by STOXX Select products with futures and options that capture the performance of uropean companies with high dividend payments and low volatility which are selected from the STOXX SG Global eaders index.
ith the introduction of derivatives on sustainable versions of various regional and global benchmar s in ebruary and arch urex has achieved a global coverage with its SG offering. n ovember urex went one step further in terms of methodology by introducing futures and options on D X SG and O STOXX SG indices combining screening out undesirable securities and considering SG ran ings as part of the selection process.
roducts available for trading on urex
▪ O STOXX ow arbon ndex utures ▪ STOXX urope SG X ndex utures and Options ▪ STOXX urope limate mpact x Global ompact ontroversial eapons Tobacco ndex utures ▪ STOXX urope SG eaders Select ndex utures and Options ▪ STOXX S SG X ndex utures ▪ S SG Screened ndex utures covering S , orld, , and apan ▪ D X SG ndex utures and Options ▪ O STOXX SG utures and Options
n , the second year after their launch, STOXX urope SG X ndex utures and Options, which are by far the most popular contracts, have reached ca. . million traded contracts. SG is one of the ma or trends and the product interest is in line with urex expectations. Overall the segment covers products.
urther information is available on www.eurex.com mar ets e uity index SG derivatives
Energ and energ re ated ar ets Deutsche Börse Group holds a ma ority shareholding in uropean nergy xchange G X , eip ig, Germany. The product and service offerings of X and its subsidiaries focus on trading platforms for energy and energy related mar ets e.g. power, gas, emission allowances . By providing li uid, secure and transparent mar ets, X group plays an important role in improving the efficient functioning of these mar ets that are directly lin ed to uestions of climate change. This includes the continuous development of new products and services, providing mar et solutions to support the long term transition of Germany’s and Europe’s energy system towards a higher share of carbon free, renewable energy sources.
X is constantly developing new support within the framewor of the climate and decarbonisation goals as expessed within the uropean Green Deal. This includes long term strategies such as the ydrogen Strategy.
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EE operates a regu ated mar et for emissions a owances under the E Emissions rading ystem E E and hosts the centra auction p atform for the E E his inc udes organising regu ar auctions on beha f of the E member states E member states are connected to an E wide auction p atform and separate auctions are he d for Germany and o and his system cou d be e panded to ta e in further sectors such as heating and transportation
urthermore EE has de e oped hedging instruments to trade energy with an increasing power generation from renewab es EE has introduced throughout the year a number of short term power products to support this de e opment n addition an e tension of maturities in the e ectricity deri ati es mar et which wi a ow for e ectricity production and procurement to be hedged in the ong term is re uired and is thus being de e oped ompanies de e oping renewab e energy and their business partners can a ready hedge against price o ati ity and counterparty credit ris s o er the ong term and these maturities wi be e panded from ne t year onwards uch trades in ong term maturity products ha e a ready occurred throughout and are e pected to grow in the future
EE Group further promotes the integration and mar eting of renewab es through its ro e as a pro ider of registries for so ca ed guarantees of origin which are used by e ectricity and gas distributors to pro e the origin of the energy they supp y ere EE Group a so de e ops mar ets for carbon free and ow carbon hydrogen Gre e part of EE Group acti e in operating registries for guarantees of origin is an acti e consortium partner to ertif y which used to be the first registry for hydrogen guarantees of origin
o arison it t e fore ast for
ith regard to the de e opment of the non financia performance indicators forecast for the Group was unfortunate y not uite ab e to achie e the system a ai abi ity of the pre ious year rading system a ai abi ity in the cash mar et was be ow target at per cent per cent and for the deri ati es mar et at per cent per cent which in both cases was due to a technica infrastructure fai ure easures ta en in this regard promise significant y higher operationa re iabi ity in the future gainst this bac ground the company e pects that the a ai abi ity of the trading systems for the cash and deri ati es mar et wi again be at the ery high e e of pre ious years in the forecast period
n its endea ours to raise the share of women ho ding e ecuti e positions as ear y as in the E ecuti e oard had adopted a o untary commitment to increase the share of women ho ding midd e and upper management positions to per cent by and of women ho ding ower management positions to per cent he Group maintains this ambition in n a de iation from the statutory ob igation the o untary commitment has been formu ated more comprehensi e y n the one hand the targets set here re ate to eutsche rse Group wor dwide and on the other hand the management e e s management positions ha e been defined more comprehensi e y so that for e amp e team eader positions are a so inc uded G oba y these ratios were per cent for senior and midd e management at eutsche rse Group as at ecember per cent and per cent for ower management per cent or Germany the ratios were per cent per cent and per cent per cent respecti e y
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is report
Deutsche Börse Group (hereafter also known as “the Group”) includes the following entities which are regu ated as credit institutions earstream an ing and earstream an ing G hereinafter referred to as “Clearstream”, including Clearstream Holding AG), as well as Eurex Clearing AG. earstream an ing G is a so an authorised centra securities depository and sub ect to the entra ecurities epositories egu ation Eure earing G and European ommodity earing G continue to be authorised as centra counterparties s and are sub ect to the re uirements of the European ar et nfrastructure egu ation E n addition other Group companies ho d different icences to pro ide regu ated acti ities in the financia ser ices sector s such these entities are sub ect to comprehensi e statutory re uirements inter a ia on ris management for further information on the regu ated entities p ease refer to “Regulatory capital requirements and regulatory capital ratios” er and abo e the statutory re uirements inc uding the E directi es and i and their imp ementation into nationa aw other regu ations worth mentioning inc ude primari y E regu ations and E the nationa re uirements of the inimum e uirements for is anagement a is issued by the edera inancia uper isory uthority undesansta t f r inan dienst eistungsaufsicht a in and circu ar issued by the inancia uper isory uthority of u embourg ommission de ur ei ance du ecteur inancier n this conte t significant parts of the ris management are defined in the scope of the so ca ed second pi ar of the ase regime for a number of the Group’s companies. Moreover, national regulations implementing the EU an ing eco ery and eso ution irecti e app y to earstream and Eure earing G regarding the estab ishment of reco ery p ans eutsche rse Group fo ows internationa standards in its ris management and a so app ies these without or in addition to such statutory re uirements
he highest regu atory standards within the Group are app icab e to Eure earing G and earstream gi en their regu ation as credit institutions onsidering this and their economic importance this ris report focuses on these subsidiaries in particu ar
is strateg and ris anage ent
Deutsche Börse Group’s risk strategy is a igned with its business mode and company strategy he Group pro ides the infrastructure for re iab e and secure capita mar ets assists constructi e y in their regu ation and stri es for a eading ro e in a of the areas in which it does business eutsche rse Group’s risk strategy is based on three core principles:
1. Risk limitation – protecting the company against liquidation and ensuring its continuing operation “Capital exhaustion should not occur more than once in 5,000 years and an operating loss must not be generated more than once every hundred years.” This means that one goal is to ensure a minimum probabi ity of per cent that the tota capita wi not be ost within the ne t twe e months y this approach an economic perspecti e is ta en when e a uating the ris s of eutsche rse Group nother ob ecti e is to guarantee for a probabi ity of per cent or more that eutsche rse wi at east brea e en e pressed in terms of its E n other words this princip e estab ishes how much ris the Group must be ab e to withstand whi st a so determining its ris appetite Ensuring the continuing operation of eutsche rse Group additiona y demands the fu fi ment of regu atory capita re uirements which ref ects a normati e perspecti e when e a uating the ris s of eutsche rse Group
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2. Support for growth in the various business segments “Risk management supports the business units in developing their business”. With this principle, the Group promotes its growth strategy. As such, risks are identified, and clearly communicated. This principle includes risk from organic growth, M A activities and the use of transformational technology. The aim is to make well founded strategic decisions within the boundaries of the defined risk appetite.
3. Appropriate risk/return ratio “The return on equity should exceed the cost of equity.” Deutsche Börse Group has set itself the goal of ensuring that risk and return should be reasonably balanced, both for specific business areas in general and for individual regions, products and customers.
nternal risk management is based on the Group wide detection and management of risk, which is focused on its risk appetite, see the chart “Interlocking business strategy and risk strategy”. 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.
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Implementation in the Group’s organisational structure and workflow The risk strategy applies to the entire Deutsche Börse Group. Risk management functions, processes and responsibilities are binding for all Group employees and organisational units. To ensure that all employees are risk aware, risk management is firmly anchored in the Group’s organisational structure and workflows. The Executive Board is responsible for risk management overall, whereas within the individual companies it is the responsibility of the respective management. The boards and committees given below receive regular information on the risk situation.
The upervisory Board of Deutsche Börse AG assesses and monitors the effectiveness of the risk management system and its continuing development. The upervisory Board has delegated the regular evaluation of the appropriateness and the effectiveness of the risk management system to the Audit ommittee. In addition, the Risk ommittee examines the risk strategy and risk appetite on an annual basis.
Deutsche Börse AG’s Executive Board determines the Group wide risk strategy and risk appetite and allocates the latter to the company’s individual business segments and business units, respectively. It ensures that the Group’s risk appetite is and remains compatible with its short and long term strategy, business and capital planning, risk bearing capacity and remuneration systems. The Executive Board of Deutsche Börse AG also determines what parameters are used to assess risks and how risk capital is allocated. It ensures that the requirements for the risk strategy and risk appetite are met.
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he Group isk ommittee G reviews the risk position of the Group regularly and involves the Executive Board in all important matters he G is a Group internal risk committee, chaired by the hief inancial fficer
Group isk anagement G , headed by the hief isk fficer , prepares the proposals for the corresponding risk strategy, risk appetite, the approaches and methods for monitoring risk, capital allocation and procedures G continuously analyses and evaluates risks and produces uantitative and ualitative reports hese are submitted regularly to the G , once a month or as needed ad hoc to the Executive Board, once a uarter to the isk ommittee of the upervisory Board and once a year to the upervisory Board ikewise, the reports to the Audit ommittee on the effectiveness of the risk management system on an annual basis his system ensures that the responsible bodies can regularly check whether the defined risk limits are being adhered to consistently n addition, G recommends risk management measures with which the risks can be controlled accordingly
The Group’s regulated subsidiaries act in the same way, always ensuring that they meet the re uirements of the Group n particular, they adhere to the risk appetite framework allocated to them by Deutsche Börse Group he relevant supervisory boards and their committees are involved in the process, as are the executive boards and the corresponding risk management functions learstream and Eurex learing AG implement the risk strategy with specific features drawn up for their own businesses hey therefore also use metrics and reporting formats adapted to the overarching Group structure n general, the management of the respective subsidiary bears the responsibility for its risk management and risk appetite the observance is monitored by the respective supervisory board
Centrally coordinated risk management – a five-stage process isk management is implemented in a five stage process he ob ective is to identify all potential losses in good time, to record them centrally and to evaluate them in uantitative terms as far as possible if necessary, management measures must then be recommended and their implementation monitored see the chart “The five stage risk management system” he first stage is to identify the risks and the possible causes of losses or operational malfunctions n the second stage, the business areas regularly – or immediately, in urgent cases – report to G the risks that they have identified and uantified n the third stage, G assesses the risk exposure, whilst in the fourth stage, the business areas manage the risks by avoiding, mitigating or transferring them, or by actively accepting them he fifth and final stage involves, for example, monitoring different risk metrics and, where necessary, informing the responsible Executive Board members and committees of significant risks, their assessment and possible emergency measures n addition to its regular monthly and uarterly reports, G compiles ad hoc reports for members of the executive and supervisory boards he risk management functions at learstream and Eurex learing AG submit reports to the respective executive boards and supervisory boards As an independent unit, nternal Audit reviews the risk controlling functions
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pproac es and met ods for risk monitoring
eutsche rse Group uses uantitative and ualitative approaches and methods for risk monitoring, with the ob ective 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 considering regional as well as global developments The Group is thus able to recognise and analyse e isting risks at the same time, it is able to swiftly and ade uately respond to emerging risks, as well as to changes in the market or in the business environment
Existing risks eutsche rse Group employs a range of tools to evaluate and monitor operational, financial and business risk on a continuous basis, applying an economic perspective to uantify and aggregate risks normative perspective is also adopted for the credit institutions learstream and ure learing G The value at risk a model is the main tool used for uantification The purpose of the a model is to determine the amount of capital – given a confidence interval defined e ante – re uired to cover potential losses incurred within twelve months oreover, so called stress tests are carried out in order to simulate e treme, yet plausible, events and their impact upon the Group’s risk bearing capacity nother approach to risk monitoring, which serves as an early warning system for uantified and non uantifiable in house risks, is complementary risk metrics These risk metrics are based on T and security risks, potential losses, credit, li uidity and business risks
1. Economic perspective: what risk can the capital bear? The economic perspective measures risk positions arising from regular operations solely on the basis of ualitative and uantitative criteria, and so regardless of the re uirements of individual accounting or regulatory models This perspective defines the minimum amount of re uired economic capital rinciple of the risk strategy specifies that eutsche rse Group should not e haust its risk bearing capacity in more than per cent of all years
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or learstream and ure learin G, calculated in this manner also complies ith the re uirements o the second pillar o asel eutsche rse Group determines its risk bearin capacit on the basis o its reported e uit in accordance ith nternational inancial eportin tandards s learstream and ure learin G determine their risk bearin capacit on the basis o their re ulator capital or details, see section “Regulatory capital requirements and regulatory capital ratios”
or mana ement purposes, G re ularl determines the ratio o the to the risk bearin capacit his indicator is kno n as the utilisation o risk bearin capacit and it ans ers a ke risk mana ement uestion ho much risk can the Group a ord and hat risk is it currentl e posed to he ratio o to risk bearin capacit remained belo the de ined ma imum throu hout the reportin period this ere not the case, the Group ould in a orst case scenario e haust its entire risk bearin capacit and ould become insolvent
2. Normative perspective and other regulatory capital requirements learstream and ure learin G must also calculate their capital re uirements or various risk t pes see the chart “Deutsche Börse Group’s risk profile” in line ith the illar re uirements o asel n addition, ure learin G must ul il capital re uirements hilst learstream ankin G has to compl ith capital re uirements as authorisation as as ranted b a in in anuar learstream ankin is currentl appl in or authorisation accordin to learstream and ure learin G use the standard approach or anal sin and evaluatin credit and market risk
he t o institutions have adopted di erent approaches re ardin operational risk learstream uses the considerabl more comple advanced measurement approach in all business units his means that it meets the regulatory capital requirements for operational risk set out in the EU’s Capital e uirements e ulation ccordin to the method – hich has been approved and is re ularl audited b a in – the re uired capital is allocated to the re ulated entities n contrast, ure learin G emplo s or operational risk the basic indicator approach in order to calculate re ulator capital re uirements or details, see section “Regulatory capital requirements and regulatory capital ratios”
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3. Stress tests tress tests are carried out in order to simulate e treme yet plausi le e ents for all material types of risk Using oth hypothetical and historical scenarios they simulate the occurrence of e treme losses or an accumulation of large losses ithin a single year imilarly in erse stress tests are also carried out hich analyse hich loss scenarios ould e ceed the risk earing capacity
4. Risk metrics Risk metrics are used to quantify the e posure to the most important internal risks against set limits hey are complementary to the aR approach and ser e to monitor other factors as ell as non quantifia le risks ny reach of these limits ser es as an early arning signal hich is reported to the E ecuti e Board on a monthly asis urthermore any such reach immediately triggers the requisite risk mitigation processes
mer i risks ith regard to risk management Deutsche Börse Group pursues a sustaina le long term strategy y also e aluating risks eyond a t el e month hori on or this purpose the Group has de eloped so called risk maps tailored specifically for e pected or upcoming regulatory requirements and and information security risks n addition other operational usiness and financial risks are also assessed eyond a t el e month period Risk maps classify risks y their pro a ility of occurring and y their financial impact should they materialise re ie process of En ironment ocial Go ernance E G aspects is also carried out as part of the Group Risk Committee
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Risk escri ti
he follo ing section descri es the types of risk that Deutsche Börse Group generally has to manage and presents the risks it actually faces t also e plains the measures that Deutsche Börse Group uses to attempt to pre ent loss e ents and to minimise their financial effects
Risk profile he risk profile of Deutsche Börse Group differs fundamentally from those of other financial ser ices pro iders Deutsche Börse Group differentiates et een the three standard types of risk operational risk financial risk and usiness risk ro ect risk also e ists ut the Group does not specifically quantify these as their impact is already reflected in the three risk types he ma ority of risks are of an operational nature see the charts elo “Required economic capital for German universal banks by risk type” and “Required economic capital for Deutsche Börse Group by risk type”
Operational risk greater than financial and business risk Utilisation of risk earing capacity from an economic perspecti e is used as the primary internal management indicator throughout Deutsche Börse Group see the section “Approaches and methods for risk monitoring” for an e planation of these terms n addition to the financial and operational risk already mentioned usiness risk is also identified and assessed his relates in particular to potential threats to re enue such as price pressure or loss in market share as ell as cost risks he economic perspecti e re eals that financial risk only accounts for around per cent of all risks at Deutsche Börse Group Business risk accounts for per cent his makes the third risk type all the more important for Deutsche Börse Group at per cent operational risk accounts for t o thirds of the REC nformation on the additional capital requirements of other su sidiaries is pro ided in section “Regulatory capital requirements and regulatory capital ratios”
he three risk types applica le to Deutsche Börse Group are descri ed in detail elo in the order of their importance
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Operational risk or Deutsche Börse Group operational risks comprise the unavailability of systems service deficiency damage to physical assets as ell as legal disputes and business practice see the chart belo “Operational risk at Deutsche Börse Group” uman resources risks are quantified ust like other operational risks he share of operational risk of the R as per cent as at December
Unavailability of systems perational resources such as the etra and trading system are essential for the services offered by Deutsche Börse Group hey should never fail in order to ensure that market participants can trade securities or derivatives at any time and ithout delay he 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
he longer the do ntime for one of these systems the larger the potential loss An outage could be caused by soft are or hard are issues or in unlikely cases the availability of the systems could be affected by acts of cybercrime or terrorist attack n the past only limited failures have occurred both ith etra and ith and its predecessor system n 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 for e ample the redundancy of the net ork infrastructure Despite all mitigating measures ho ever failures of the infrastructure can never be ruled out completely n limited instances of system issues e ceeding t o hours ere observed imely countermeasures ere taken to address these system issues
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In general, a ailability risk represents the largest operational risk or Deutsche Börse Group and is there ore sub ect to regular tests that si ulate not only what happens when its own syste s ail but also when suppliers ail to deli er.
Service deficiency isks can also arise i a ser ice pro ided to a custo er is inade uate and this leads to co plaints or legal disputes. One e a ple would be errors in the settle ent o securities transactions due to de ecti e products and processes or istakes in anual entries. second e a ple is handling errors in the collateral li uidation process in the e ent o the de ault o a large clearing custo er. uch errors ha e not occurred to date in the rare case o a ailure. he related processes are tested at least annually.
Other sources o error ay be attributable to suppliers or to product de ects istakes that ay lead to the loss o client assets or istakes in accounting processes ust also be considered. he Group registers all co plaints and or al ob ections as a key indicator o de icient processing risk.
Damage to physical assets atural disasters, accidents, terroris or sabotage also count as operational risks that could, or e a ple, cause the destruction o , or se ere da age to, a data centre or o ice building. Business ontinuity anage ent and hysical ecurity easures ai at a erting signi icant inancial da age see the chart Business ontinuity anage ent .
Legal disputes and business practice osses can also result ro ongoing legal proceedings. hese can occur i Deutsche Börse Group breaches laws or other re uire ents, enters into inade uate contractual agree ents or ails to onitor and obser e case law to a su icient degree. egal risk also includes losses due to raud and labour law issues. his could entail, or e a ple, losses resulting ro insu icient anti oney laundering controls or breaches o co petition law or o banking secrecy. uch operational risks can also arise i go ern ent sanctions are not obser ed, e.g. in case o con licting laws o di erent urisdictions, or in the e ent o breaches o other go ern ental or o erarching regulations.
In its corporate report, Deutsche Börse Group in or ed about the class action eterson s learstrea Banking . ., the irst eterson proceeding, targeting turno er o certain custo er positions held in Clearstream Banking S.A.’s securities omnibus account with its depository bank, itibank , and asserting direct clai s against learstrea Banking . . or da ages o . illion. he atter was settled between learstrea Banking . . and the plainti s and the direct clai s against learstrea Banking . . were abandoned.
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n ul the S court ordered turno er o the customer ositions to the lainti s ruling that these were owned b Bank arka i the ranian central bank. Bank arka i a ealed and the decision was a irmed on ul b the Second Circuit Court o A eals and later b the S Su reme Court on A ril . nce distribution o the unds to the lainti s is com lete a related case eiser s Clearstream Banking S.A. also seeking turno er o the same assets should also be dismissed.
n ecember a number o S lainti s rom the irst eterson case as well as other lainti s iled a com laint in the SA targeting restitution o certain assets that Clearstream Banking S.A. holds as a custodian in u embourg. n the de endants in this action including Clearstream Banking S.A. mo ed to dismiss the case. n ebruar the S court issued a decision granting the defendants’ motions and dismissing the lawsuit. The plaintiffs lodged an appeal against this ruling at the com etent a eals court Second Circuit Court o A eals which on o ember con irmed large ortions o the decision o the court o irst instance. he a eals court re erred the case back to the court o irst instance regarding another as ect asking the court to assess whether the assets held in u embourg are sub ect to e ecution in the SA. Clearstream Banking S.A. iled a etition against this ruling with the S Su reme Court on a . he S Su reme Court decided on anuar to re er the second eterson case back to the a eals court or consideration in the light o new S legislation. he a eals court re erred the case back to the court o irst instance and on August the lainti s iled a motion or a summar decision with the court o irst instance. Alternati el the lainti s ha e re uested a reliminar court decision ordering the trans er to the SA o the dis uted assets held in custod b Clearstream Banking S.A.
n ctober a number o lainti s iled a com laint in the SA naming Clearstream Banking S.A. and other entities as de endants. he com laint in this roceeding a lish s Clearstream Banking S.A. is based on similar assets and allegations as in the eterson roceedings. he com laint seeks turno er o certain assets that Clearstream Banking S.A. holds as a custodian in u embourg. he com laint also asserts direct claims against Clearstream Banking S.A. and other de endants and ur orts to seek damages o u to a ro imatel S . billion lus uniti e damages and interest. n ctober an amendment to the com laint was iled in this case with the aim o including additional lainti s in the roceedings. n connection with this also urther direct claims or damages o a ro imatel S . billion lus uniti e damages and interest are asserted against Clearstream Banking S.A. and the other de endants.
n A ril Clearstream Banking S.A. was in ormed that the nited States Attorne or the Southern istrict o ew ork has o ened a grand ur in estigation 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 coo erating with the S attorne .
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In the conte t of the ongoing disputes regarding assets of Bank arka i Clearstream Banking S.A. was ser ed with a complaint of Bank arka i on anuar naming Banca UBA S.p.A. and Clearstream Banking S.A. as defendants. The complaint filed before the u embourg courts primaril seeks the restitution of assets of Bank arka i which the complaint alleges are held on accounts of Banca UBA S.p.A. and Bank arka i with Clearstream Banking S.A. totalling appro imatel US . billion plus interest. Alternati el Bank arka i seeks damages of the same amount. The assets sought include assets that were pre iousl transferred b Clearstream Banking S.A. to Banca UBA S.p.A. urthermore the complaint b Bank arka i concerns assets of appro imatel US . billion that were turned o er to US plaintiffs pursuant to a binding and enforceable US court order in a proceeding to which Bank arka i was a part . The lawsuit also concerns client assets of appro imatel US . billion which includes assets held b Clearstream Banking S.A. that are currentl subject to litigation in the USA and u embourg brought b US plaintiffs. In iew of this Bank arka i b wa of further proceedings pending in u embourg is seeking the declaration that Clearstream Banking S.A. shall subject to penalties be prohibited from transferring rele ant assets to the USA. Until a decision in these proceedings Clearstream Banking S.A. due to a preliminar injunction obtained b Bank arka i is prohibited under penalt from transferring rele ant assets to the USA. Clearstream Banking S.A. has filed a recourse with the u embourg Court of Cassation against the preliminar injunction.
n une Banca UBA S.p.A. filed a complaint against Clearstream Banking S.A. with the u embourg courts. This complaint is a recourse action related to the complaint filed b Bank arka i against Clearstream Banking S.A. and Banca UBA S.p.A and asks that Banca UBA S.p.A. be indemnified and held harmless b Clearstream Banking S.A. in the e ent that Banca UBA S.p.A. loses the legal dispute brought b Bank arka i and is ordered b the court to pa damages to Bank arka i.
The plaintiffs in the abo e mentioned a lish case on September made a formal inter ention concerning the complaint b Bank arka i of anuar . ith this the plaintiffs amongst others re uest that Clearstream Banking S.A. be ordered to pa an amount e ui alent to US judgments obtained b the plaintiffs against Iran and Bank arka i in the amount of appro . US . billion plus interest .
n o ember the plaintiffs in the a lish case also sued Clearstream Banking S.A. and other legal entities in u embourg. The lawsuit is essentiall based on similar allegations to those in the a lish case pending in the USA and amongst other things asserts direct claims of around US . billion plus interest against Clearstream Banking S.A.
n ecember two US plaintiffs filed a complaint naming Clearstream Banking S.A. and other entities as defendants. The plaintiffs ha e claims against Iran and Iranian authorities and persons amounting to appro imatel US . million. The complaint in this case e in s. Clearstream Banking S.A. is based on similar assets and allegations as in the second eterson case and the a lish case. The complaint seeks turno er of certain assets that Clearstream Banking S.A. holds as a custodian in u embourg. The complaint also asserts direct claims against Clearstream Banking S.A. and other defendants and seeks damages of up to appro imatel US . million plus puniti e damages and interest.
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n ecember se eral US plaintiffs from the aforementioned eiser s Clearstream Banking S.A. case filed a new complaint naming Clearstream Banking S.A. and other entities as defendants. The plaintiffs hold claims against Iran and Iranian authorities and persons in e cess of US . million and are seeking turno er of Iranian assets.
On 26 August 2020, further judgment creditors of Iran (the “Ofisi plaintiffs”) filed a complaint in the USA in which Clearstream Banking S.A. is also named as a defendant. The fisi plaintiffs obtained a US judgment against Iran and others in awarding them damages of appro imatel US . billion as a result of terrorist attacks attributed amongst others to Iran. n this basis the fisi plaintiffs are seeking the turno er of assets attributed to Bank arka i which are alread the subject of other actions brought against Clearstream Banking S.A. urthermore the fisi plaintiffs are claiming damages and puniti e damages e ui alent to the amount of their damage award directl from Clearstream Banking S.A.
Starting on ul the insol enc administrators of airfield Sentr td. and airfield Sigma td. two funds domiciled on the British irgin Islands filed complaints in the US Bankruptc Court for the Southern istrict of ew ork asserting claims against more than financial institutions for restitution of amounts paid to in estors in the funds for redemption of units prior to ecember . n anuar the funds’ insol enc administrators filed litigation against Clearstream Banking S.A. for the restitution of US . million in pa ments made for redemption of fund units which the funds made to in estors ia the settlement s stem of Clearstream Banking S.A. The proceedings which were suspended for se eral ears are ongoing.
Amongst other legal disputes in connection with the bankruptc of the uerto ico case under SA legislation the legal committee of the uerto ican go ernment initiated legal action in to reco er interest pa ments made from to to holders of go ernment bonds S and bonds and compan pension bonds. Clearstream Banking S.A. is named in this US litigation and two lawsuits ha e been filed against Clearstream Banking S.A. itself one of the two lawsuits relates to pa ments in connection with the bond the other to pa ments in connection with the S bond. The uerto ican go ernment is claiming US . million for the bond and less than US for the S bond. Both lawsuits and all other similar litigation ha e been suspended since ul .
n August Clearstream Banking S.A. was summoned in legal proceedings in Indonesia between T apuas rima Coal TB and the principal defendant ori onte pportunities und S C. Clearstream Banking S.A. is cited as a co defendant in the proceedings. T apuas rima Coal TB claims a breach of contract b I C shareholders and is seeking the return b means of blocking and sei ure of I C shares issued b it that are currentl deposited with the co defendant’s custodians including Clearstream Banking S.A. . At the first hearing in o ember the court noted it could dismiss the claim if the plaintiff was again not present at a hearing scheduled for April .
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egal disputes ha e arisen regarding a ond issued lean nerg A ( ), hich is held in custod learstream an ing A issued the first tranche of the ond in April 20 and the second tranche of the ond in ecem er 20 he glo al certificates for the t o tranches ere deli ered to learstream an ing A the pa ing agent of the issuer he legal disputes relate to the non payment of the bond and the purported lack of validity of the bond. Clearstream Banking AG’s role in the conte t of the purported lac of alidit of the ond is primaril to safe eep the glo al certificate as national central securities depositor Insol enc proceedings ha e mean hile een opened in respect of the issuer,
A u er of an lean nerg A ( ) ond, hich is held in custod learstream an ing A and as listed on the ran furt toc change, filed a la suit at a utch court concerning claims for damages against learstream an ing A , eutsche rse A and other partners he la suit as dismissed at first instance in Octo er 2020 the plaintiff filed an appeal against the judgment
On 6 e ruar 2020, a plaintiff filed a complaint naming learstream an ing A and one other entit as defendants he complaint, hich as filed efore the courts in ran furt, primaril see s rights to information and the turnover of dividends in the amount of approximately €4.1 million plus interest. The alleged claim relates to di idends from securities that learstream an ing A holds as a custodian
In eptem er 20 , learstream an ing A and learstream an ing A ere made a are that the Public Prosecutor’s Office in Cologne had initiated proceedings for tax evasion against an employee of learstream an ing A for his alleged in ol ement in the settlement of transactions of mar et participants over the dividend date (cum/ex transactions). On 22 January 2018, the Public Prosecutor’s Office in ologne addressed to learstream an ing A a notification of hearing learstream an ing A and learstream an ing A as potential secondar participants ( e en eteiligte) tarting on 2 August 2019, together with other supporting authorities, the Public Prosecutor’s Office in Cologne conducted searches of the offices of learstream an ing A , learstream an ing A , as ell as other eutsche rse roup companies and sites In the course of these measures, eutsche rse roup entities were made aware that the Public Prosecutor’s Office in Cologne has extended the group of accused persons ( eschuldigte) to include current and former emplo ees of eutsche rse roup companies as ell as e ecuti e oard mem ers of su sidiaries of eutsche rse A In 2020, eutsche rse ecame a are of a further e tension of the group of accused persons among current and former emplo ees of eutsche Börse AG’s subsidiaries. ue to the still earl stage of the proceedings, it is still not possi le to predict timing, scope or conse uences of a potential decision he companies concerned are cooperating ith the competent authorities he do not e pect that the could e successfull held lia le
In o em er 20 , a customer of a trading participant of the ran furt toc change filed a la suit at the istrict ourt ( andgericht) of ran furt ain against eutsche rse A he plaintiff is claiming damages of approximately €2.6 million from Deutsche Börse AG. The alleged damages are said to have arisen (1) on 7 July 2016, from Deutsche Börse AG’s publication of an inaccurate ex di idend date relating to a financial instrument ia the etra s stem and (2) due to the fact that a client of the plaintiff relied on this inaccurate information to conclude transactions he court dismissed the complaint in its final ruling of 6 o em er 2020
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On ecember the German ederal inancial upervisory Authority Bundesanstalt f r inan dienstleistungsaufsicht Ba in sent eutsche Börse AG a formal hearing notification in a penalty proceeding hich refers to an allegation of a supposed lack of self exemption or alternatively an allegedly omitted ad hoc announcement. pecifically in the search for a successor for Carsten engeter eutsche Börse AG had omitted to ualify as a price relevant intermediate step the fact that a fe days before the appointment of heodor eimer in ovember t o suitable and interested C O candidates had been identified and a decision about the appointment as planned. ven after consulting ith external experts eutsche Börse AG believes this allegation is unfounded.
espite the ongoing proceedings described before the xecutive Board is not a are of any material changes to the Group’s risk situation.
As of ecember in the opinion of xecutive Board and based on the information available there as no provision re uirement for litigation in any of the cases.
Measures to mitigate operational risk eutsche Börse Group takes specific measures to reduce its operational risk. Amongst them are emergency and contingency plans measures to ensure information security and the physical safety of employees and buildings as ell as compliance rules and procedures. n addition eutsche Börse Group has insurance policies that partly cover the potential financial conse uences of operational incidents.
Emergency and contingency plans t is essential for eutsche Börse Group to provide its products and services as reliably as possible. he Group has to maintain its business operations and safeguard against emergencies failures and crises. f 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 eutsche Börse Group has set up a system of emergency and crisis plans covering the entire Group business continuity management BC . his covers all processes designed to ensure continuity of operations in the event of a crisis and significantly reduces unavailability risk. easures include precautions relating to all important resources systems orkstations employees suppliers including the redundant design of essential systems and the technical infrastructure as ell as emergency measures designed to mitigate the unavailability of employees or orkspaces in core functions at all important locations. his includes unavailability due to pandemic based events like the recent coronavirus outbreak. his situation is being handled in accordance ith the eutsche Börse Group ncident and Crisis anagement Process. Activities are centrally coordinated to ensure continuity of Deutsche Börse Group’s critical operations as well as employees’ health and safety. Back up locations are sub ect to regular tests and remote access is also available. xamples of such emergency and contingency measures are listed in the “Business continuity management” chart.
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Preparations for emergencies and crises he Group has introduced and tested a management process for emergencies and crises that ena les it to respond uickly and in a coordinated manner. his is intended to minimise the effects on usiness processes and on the market and to ena le a uick return to regular operations. ll usiness segments ha e appointed emergency managers to act as central contacts and take responsi ility during emergencies and crises. he emergency managers inform the ecuti e Board or raise the alarm with them in the case of se ere incidents. n the e ent of a crisis the ecuti e Board mem er responsi le for the affected usiness area acts as the crisis manager or delegates this role. he emergency and contingency plans are tested regularly y realistically simulating critical situations. uch tests are generally carried out unannounced. he test results are e aluated ased on the following criteria
◼ unctionally effecti e the measures must e technically successful. ◼ ecuta le the employees must e familiar with the emergency procedure and e a le to e ecute it. ◼ imely emergency measures must ensure that operations restart within the intended time period namely the reco ery time o ecti e .
Information security ttacks on information technology systems and their data – especially due to cy ercrime – represent operational risks for Deutsche Börse Group which is continuously confronted with rising threats in this respect as are other financial ser ices pro iders and the entire sector. nauthorised access change and loss of information as well as non a aila ility of information and ser ices may all arise as a result of such attacks such as phishing DDo and ransomware attacks . here was no successful attack on Deutsche Börse Group’s core systems in 2020.
In order to maintain the Group’s integrity as a transaction services provider, and in order to reduce and control the risks Deutsche Börse is continuously implementing measures to increase information security. he aim is to proacti ely oost the ro ustness of procedures applications and technologies against cy ercrime in such a way that they are ad usted to the threatening situation and regulatory re uirements at an early stage. he foundation for this is formed y a set of core processes together with specific control measures ased on the international information security standard .
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he in ormation security unction chec s that the in ormation security and in ormation security ris management re uirements are adhered to it a so monitors the systemic integration o and adherence to security standards, ithin the scope o product and app ication deve opment.
he Group operates a situation centre omputer mergency esponse eam, , hich detects and assesses threats rom cy ercrime at an ear y stage, and coordinates ris mitigation measures in cooperation ith the usiness units.
he In ormation ecurity unction operates a Group ide programme designed to raise sta a areness or the responsi e hand ing o in ormation, and to improve sta conduct in this aspect. in a , Deutsche Börse Group’s security approach includes overall measures in accordance with ISO/IEC 27001 covering oth the deve opment phase and the operationa phase.
urthermore, Deutsche Börse Group has een a u mem er o nationa associations y er ecurity haring and na ytics, , trade associations or d ederation o changes and internationa net or s inancia ervices In ormation haring and na ysis enter, I hich contri ute signi icant y to ards a or ard oo ing stance vis vis cy er threats, and the deve opment o strategies to end o such threats.
Physical security Deutsche Börse Group p aces great importance on physica security issues due to the constant y changing g o a security ris s and threats. orporate ecurity has deve oped an integra security concept to protect the company, its emp oyees and va ues rom interna and e terna attac s and threats – in a proactive as e as reactive manner. na ysts are continuous y assessing the security situation at Deutsche Börse Group’s locations and are in close contact with authorities (Federal Criminal Police ice – B , edera ice or the rotection o the onstitution – B , etc. , security services providers, and security departments o other companies. u ti eve security processes and contro s ensure physical safety at the Group’s locations. Physical access to buildings and values is monitored permanent y it is ased on the access princip e o ‘ east privi ege’ need to have asis . enetration tests, inter a ia, are carried out on a regu ar asis to veri y the e iciency and e ectiveness as e as the ua ity o the security processes at the ocations.
In an increasing y competitive g o a mar et environment, access to no ho and con identia company in ormation ears the potentia o a ma or inancia advantage to outsiders or competitors. Deutsche Börse app ies state o the art techno ogy to prevent its no edge rom eing o tained i ega y, e.g. through iretapping.
urthermore, orporate ecurity is tas ed ith providing support to emp oyees hi st they are trave ing or on oreign assignment, i.e. protecting them rom ris s in the areas o crime, civi unrest, terrorism and natura disasters. In this conte t, a or d ide trave security programme as esta ished hich guarantees a ris assessment e ore, during and a ter trave ing, supported y a trave trac ing system and a centra 2 emergency te ephone num er.
Insurance contracts perationa ris s that Deutsche Börse Group cannot or does not ish to ear itse are trans erred to insurance companies, i this is possi e at a reasona e price. he insurance po icies are chec ed individually and are approved by Deutsche Börse AG’s Chief Financial O icer.
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Financial risk Deutsche Börse Group divides its financial risk into credit, market and liquidity risk (see the “Financial risk at Deutsche Börse Group” chart below). At Group level, these risks account for about 24 per cent of the EC (this information only includes credit and mar et ris li uidity ris is not uantified as part of the EC see note 2 to the consolidated financial statements . hey apply primarily to the Group’s credit institutions. As a result the following comments focus on Clearstream and Eure Clearing AG.
Credit risk Credit ris or counterparty credit ris describes the danger that a counterparty might not meet its contractual obligations or not meet them in full. easurement criteria include the credit rating of the counterparty the degree to which a credit line has been utilised the collateral deposited and concentration ris . Although Clearstream and Eure Clearing AG often have short term e posures against counterparties totalling several billion euros overall these are generally secured by collateral deposited by the mar et participants. owever Clearstream may have short term unsecured e posures with correspondence ban s in the course of settling securities transactions. oreover the Group regularly evaluates the reliability of its recovery plans at Clearstream and Eure Clearing AG in various scenarios (including client defaults and the resulting credit ris .
Clearstream grants loans to its clients in order to ma e the securities settlement more efficient. his type of credit business is however fundamentally different from the classic lending business. On the one hand credit is e tended solely for less than a day and it is generally collateralised and granted to clients with a high credit rating on the other. Furthermore the credit lines granted can be revo ed at any time.
Furthermore Clearstream Ban ing S.A. is e posed to credit ris arising from its strategic securities lending transactions (AS plus . Only selected ban s act as borrowers. All borrowing transactions are fully collateralised and only selected bonds with a high credit rating are permitted for use as collateral.
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nder its terms and conditions, ure learin AG only enters into transactions with its clearin members. learin mainly relates to defined securities, subscription ri hts and derivatives that are traded on specific stock e chan es. ure learin AG also offers this service for over the counter ( ) products such as interest rate swaps and forward rate a reements. As a central counterparty, it intervenes between the parties to a transaction. By offsettin reciprocal claims and requirin clearin members to post collateral, ure learin AG miti ates the credit risk e posure.
o date, no default by a client with a secured credit line has resulted in financial losses. Deutsche Börse Group therefore considers the risk of client default resultin in material losses for the Group to be low. redit risk can also arise from cash investments. he reasury department is responsible here, and has Group wide authority. reasury lar ely makes collateralised investments of funds belon in to Group companies as well as cash provided by learstream and ure learin AG customers. he Group has not incurred any losses from such investment activity to date.
learstream and ure learin AG run stress tests to analyse scenarios, such as the default of their lar est client. he fi ures determined in this way are compared with the limits defined as part of the companies’ risk bearin capacity. n addition, the impact of several clearin members defaultin at the same time is calculated for ure learin AG. oreover, inverse stress tests are run to determine the number of counterparties that would have to default for losses to e ceed the risk cover amount. tended stress scenarios were drawn up in 2 2 , especially in view of the coronavirus pandemic and the potential future defaults at banks. he results are analysed continuously and included in the calculation of risk bearin capacity.
Deutsche Börse Group enerally tracks a variety of risk indicators in addition to its risk measures ( , re ulatory capital requirements and the stress tests performed for credit risk). hese include the e tent to which individual clients utilise their credit lines and where credit is concentrated.
Reducing credit risk learstream and ure learin AG assess the creditworthiness of potential customers or counterparties to an investment before enterin into a business relationship with them. he companies do this in the same way they determine the si e of individual customers’ credit lines based on requirements and re ular creditworthiness checks, which they supplement with ad hoc analyses if necessary. hey define safety mar ins for the collateral dependin on the risk involved and review them continuously.
Deutsche Börse Group reduces its risk when investin funds belon in to Group companies and client funds by distributin investments across multiple counterparties, all with a hi h credit quality, by definin investment limits for each counterparty and by investin funds primarily in the short term and in collateralised form if possible. nvestment limits are established for each counterparty on the basis of at least annual credit checks and usin ad hoc analyses, as necessary. ince e tendin its licence as an investment and credit institution under reditwesen eset (German Bankin Act), ure learin AG can also use the permanent facilities at Deutsche Bundesbank and the wiss ational Bank it is thus in a position to mana e the ma ority of client funds in a central bank environment.
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n estment losses on currencies or ic ure learin as no access to t e respecti e central banks ill be borne on a pro rata basis b ure learin and b t ose clearin members acti e in t e currenc ere losses ere incurred e ma imum amount ic eac clearin member ill a e to contribute in t is manner is t e total amount suc clearin member as pled ed it ure learin as cas collateral in t is currenc e ma imum amount to be borne b ure learin is €50 million
Given the size and volatility of its clients’ liabilities, Eurex Clearing AG has developed a leading ed e mar inin s stem ic is described in detail in t e ollo in section
Safety for participants and the clearing house ac clearin member must pro e t at it as liable capital or in t e case o in estment unds assets under mana ement equal to at least t e amounts t at ure learin as de ined or t e di erent markets e amount o liable capital or assets under mana ement or ic e idence must be provided depends on the risk. To mitigate Eurex Clearing AG’s risk that clearing members might default be ore settlin open transactions members are obli ed to deposit collateral in t e orm o cas or securities mar ins on a dail basis and i required to meet additional intrada mar in calls
ure learin onl permits securities it a i credit qualit and liquidit to be used as collateral to co er mar in requirements nternal e aluations and e ternal ratin s are used to determine t e credit qualit n t e basis o t ese consolidated ratin s onl collateral t at is classi ied at least as in estment grade is permitted. The limits for bank bonds are raised to at least “A–” due to the potential wrong a risks e admission criteria are re ie ed continuall and market risk is co ered b aircuts it a con idence le el o at least per cent ence securities o issuers it lesser credit qualit are sub ect to i er aircuts t an t ose applied to securities it i er credit qualit li ible collateral t at no lon er meets t e i credit ratin requirements at a later point in time e due to a ne consolidated ratin is e cluded isk inputs are c ecked mont l and t e aircuts are recalculated dail or eac securit n addition a minimum aircut applies to all securities
ar ins are calculated separatel or clearin member accounts and client accounts ains and losses resultin rom intrada c an es to t e alue o inancial instruments are eit er settled in cas b t e counterparties ariation mar in or deposited it ure learin as collateral b t e seller due to t e c an e in t e equi alent alue o t e item premium mar in n t e case o bond repo or equit transactions t e mar in is collected rom eit er t e bu er or t e seller current liquidatin mar in dependin on o t e transaction price per orms compared to t e current alue o t e inancial instruments e purpose o t ese mar ins is to o set accumulated ains and losses
n addition ure learin uses additional collateral to protect itsel in t e case o de ault b a clearing member against any risk that the value of the positions in the member’s account will deteriorate in t e period be ore t e contained positions are closed and t e account is settled is additional collateral is kno n as t e initial mar in e tar et con idence le el ere is at least per cent it a minimum t o da oldin period or e c an e traded transactions or per cent it a minimum i e da oldin period or transactions ure learin c ecks dail et er t e mar ins matc t e requested con idence le el t e initial mar in is currentl calculated usin bot t e standard risk based mar inin met od and t e ure learin risma met od
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The Eurex Clearing risma method is available for all traded derivatives contracts and takes the clearing member’s entire portfolio – as well as historical and stress scenarios – into account when calculating margin re uirements. The ob ective is to cover market fluctuations for the entire li uidation period until the account is settled. At present, the risk based margining method is still used for cash market products and physical deliveries, as well as for securities lending and repo transactions.
n addition to the margins for current transactions, each clearing member contributes to a default fund, with the contributions based on its individual risk profile. This fund is ointly liable for the financial conse uences 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 default fund. Eurex Clearing AG uses daily stress tests to check whether its default fund is ade uate enough to absorb a default of its two largest clearing members. This involves sub ecting all current transactions and their collateral to market price fluctuations at a confidence level of at least . per cent. n order to be able to determine potential losses in excess of a clearing member’s individual margins, the impact on the default fund of a potential default is simulated. Eurex Clearing AG has defined limits which, when exceeded, trigger an immediate ad ustment to the size of the default fund if necessary. The following lines of defence are available in case a clearing member is unable to meet its obligations to Eurex Clearing AG due to a delay in performance or a default
◼ irst, Eurex Clearing AG may net the relevant clearing member’s outstanding positions and transactions and or close them – in terms of the risk involved – by entering into appropriate back to back transactions, or settle them in cash. Clients segregation models are taken into account accordingly. ◼ 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 ecember , collateral amounting to €66,598 million had been provided for the benefit of Eurex Clearing AG after haircuts . ◼ After this, the relevant clearing member’s contribution to the default fund would be used to cover the open amount. Contributions ranged from €1 million to €487.3million as of 31 December 2020. ◼ Any remaining shortfall would initially be covered by a contribution to the default fund by Eurex Clearing AG. Eurex Clearing AG’s contribution amounted to €200.0 million as of ecember . ◼ Only then would the other clearing members’ contributions to the default fund be used proportionately. As at ecember , aggregate default fund contribution re uirements for all clearing members of Eurex Clearing AG amounted to €4,536 million. After the contributions have been used in full, Eurex Clearing AG can re uest additional contributions from each clearing member, which can be at most twice as high as their original default fund contributions. n parallel to these additional contributions, Eurex Clearing AG provides additional funds of up to €300.0 million, provided via a letter of comfort from eutsche rse AG see below . These additional funds will be used together with the additional clearing member contributions, on a pro rata basis. ◼ ext, the portion of Eurex Clearing AG s e uity which exceeds the minimum regulatory capital re uirements would be realised. ◼ inally, the remaining e uity of Eurex Clearing AG would be drawn upon.
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◼ eutsche rse AG has issued a letter of comfort in favour of Eurex Clearing AG. ith this letter of comfort, eutsche rse AG commits to provide Eurex Clearing AG with the funds re uired to meet its obligations – including the obligation to provide additional funds of up to €300.0 million, as mentioned before. The maximum amount to be provided under the comfort letter amounts to €600.0 million, including payments already made. hird parties are not entitled to any rights under the comfort letter.
n the event of default by a clearing member, Eurex Clearing AG carries out a efault anagement rocess , with the ob ective of closing out all positions assumed as a result of the default. ithin the scope of the , any costs incurred in connection with such close out are covered using collateral from Eurex Clearing AG’s lines of defence. Essentially, within the DMP framework, products which share similar ris characteristics are assigned to li uidation groups that are li uidated using the same process. ithin a li uidation group, Eurex Clearing AG will balance its position by transferring defaulted positions to other clearing members, either via an auction or by way of bilateral independent sales. otential claims against Eurex Clearing AG, arising from the settlement of positions assumed from the defaulted clearing members, are covered by the collateral from the multiple lines of defence. henever necessary, these collateral items are disposed of in the mar et by way of bilateral independent sales, in order to cover the outstanding claims from settling the open positions. he will therefore not only contribute to the security and integrity of capital mar ets, but will also protect non defaulted clearing members from any negative effects resulting from the default.
n the past, the of Eurex Clearing AG has been used four times, involving the defaults of Gontard etall an , ehman rothers , Global and aple an . n all of the cases mentioned before, the funds pledged as collateral by the defaulted clearing member were sufficient to cover losses incurred upon closing out positions – in fact, a significant portion of resources was returned to the defaulted clearing member.
Market risk ar et ris include ris s of an adverse development of interest rates, exchange rates or other mar et prices. eutsche rse Group measures these ris s using onte Carlo simulations based on historical price data, as well as corresponding stress tests.
Clearstream and Eurex Clearing AG invest parts of their e uity in securities with the highest credit uality. he ma ority of these securities have a variable interest rate, interest rate ris is low. he Group avoids open currency positions whenever possible. urthermore, mar et ris could result from eutsche Börse Group’s ring fenced pension plan assets Contractual rust Arrangement C A , Clearstream’s pension fund in uxembourg . he Group reduced its ris of extreme losses by deciding to invest the bul of the C A on the basis of a value preservation mechanism.
Liquidity risk i uidity ris arises if a eutsche rse Group company is unable to meet its daily payment obligations or if it can only do so at a higher refinancing cost. Operational li uidity re uirements are met primarily internally by retaining funds generated with a view towards maintaining sufficient li uidity in order to be able to meet all of the Group’s payment obligations when due.
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Since Clearstream’s investment strategy aims to be able to repay customer deposits at all times, maturity
liquidity guidelines. In addition, Eurex Clearing AG can use Deutsche Bundesbank’s permanent facilities.
– – liquidity, following a market disruption, would increase Deutsche Börse Group’s liquidity risk exposure. – –
Business risk initiatives. It therefore expresses the risks associated with the Group’s business environment and sector. Group’s REC. Business risk ma
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Additional business risk may arise from regulatory requirements, or from the geopolitical or economic environment – for example, in the event of an inner European crisis affecting the monetary union, the impact of negative interest rates or a tariff conflict, having adverse effects on trading activity.
In recent years Deutsche Börse Group has taken steps to reduce the direct risks associated with “Brexit” – the departure of the nited ingdom from the European nion E . hey focus on customer access to the Group’s systems, on market access to the UK for the Group’s business units and on establishing an alternative pool of liquidity within the E for clearing interest rate swaps denominated in euros. Despite this, it will be necessary to keep a close eye on how the relationship evolves in the future. hese relations are expected to have an impact on issues of general market access and on the development of the regulatory frameworks in the respective markets. In the medium to long term, the latter could diverge and so eopardise market access or result in higher operating costs. It could also result in different competition rules, which may lead to uncertainty, additional costs and lost revenue for the Group and for market participants.
In terms of political tax discussions, the financial transaction tax to which some European states still aspire represents a variable which could have an adverse effect on the Group’s business. Steps to introduce a digital tax or a nion wide taxation of financial services could also have a negative impact on the Group, depending on how the scope of application is defined.
ther regulatory risks exist in connection with the forthcoming review of the directive and regulation on markets in financial instruments i ID II i IR . In terms of trading, the main risks for volumes at the Eurex Exchange and the Group’s spot market would be if any competitive disadvantages caused trading activities to move to alternative venues. urthermore, rules on non discriminatory access to clearing and trading in financial instruments could have an adverse impact on trading volumes and revenue. inally, it should be noted that ideas and initiatives concerning a consolidated data storage system, particularly in combination with stricter regulation of pricing for market data, could result in business risks for the Group’s market data business.
In connection with the review of the Central Securities Depository Regulation CDSR there are also risks for the business of Eurex Securities ransaction Services if the conditions for mandatory buy in transactions, which are linked to the rules on settlement discipline, are changed. In addition, there are a number of risks for the securities depositories in the Group, which may also entail changes to their organisational structure. A review of the framework could also lead to restrictive practices and so represent a risk to revenue. Finally, the Group’s securities depositories could also be exposed to revenue risk as a result of the work carried out by the contact group for the primary market at the European Central Bank.
In its clearing business there are some risks for the Group concerning the final structure of the framework for the recovery and resolution of central counterparties, as well as from the ongoing development of global standards. he former relate particularly to the liability and capital requirements of operators of central counterparties in relation to market participants and so could represent a revenue and cost risk for the Group. In addition, further implementation of the European arket Infrastructure Regulation . E IR . on the work of the Supervisory Committee for Central Counterparties could affect the ongoing development of the Eurex Clearing artnership rogramme in the field of interest rate derivatives.
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he ongoing review of the European arket nfrastructure . E . could also distort competition due to changes affecting risk mitigation services in post trading and so cause a loss of revenue.
ther business risks exist in the medium term from legislative initiatives from the European ommission on the igital Finance ackage. o encourage the use of distributed ledger technology in financial markets the European ommission is proposing limited and experimental pilot regimes to introduce multilateral trading facilities F as novel market infrastructures. hey would be admitted for trading securities that are transferred via , which are not recorded with a central depository but rather in a distributed ledger of the same F. his potentially poses risks to existing business models in the Group, to the extent that the proposed exceptions are established within the existing regulatory framework. nother proposal by the European ommission, the igital perational esilience ct , provides for the EU wide harmonisation of the re uirements for the digital operational resilience of all financial market participants in terms of information and communications technologies . he proposal also includes a new prudential regime for third party providers and critical services, including cloud services. creates a risk of higher costs and increasing complexity and inflexibility for the operation of the Group’s IT infrastructure. Furthermore, the proposal could have an adverse impact on the Group’s multi cloud strategy by making it more difficult to use cloud services in the financial industry.
Similar risks could also arise from the implementation in Germany of the EU irective on the Security of etwork and nformation Systems S irective . he provisions of the current draft of the Second ct to ncrease the Security of nformation Systems SiG . must be considered to be significant for the companies concerned. longside new standards and specifications, new responsibilities, technical access rights and powers are defined for the German Federal ffice for Security BS , and the German Federal inistry of the nterior, Building and ommunity B is given the right to issue orders. The current situation is that the Group would be classified in the legislation as an entity of “particular public interest”, which could potentially result in new liability risks, duties and additional costs.
n the field of ongoing environmental, social and governance ESG regulation there are also a number of risks for the Group’s market data and index business. A strict and prescriptive regulatory approach to environmental standards in the finance sector could also cause disruption in the Group’s traditional business areas and so raise uestions in terms of market uality, market depth, pricing and risk management. hese business risks could be supported by further regulatory initiatives in the field of sustainable corporate governance and so represent revenue risks.
BaFin is assessing on a regular basis whether eutsche B rse G could potentially be classified as a financial holding company. urrently, eutsche B rse G is not classified as a financial holding company. n the basis of the business portfolio and the criteria which are, to the knowledge of eutsche B rse G, applied by BaFin when classifying a company as a financial holding company, the Executive Board of eutsche B rse G is not of the opinion that eutsche B rse G ualifies as a financial holding company. Such ualification could, inter alia, have an impact on the capital base of eutsche B rse G.
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e u r i re uire en s n re u r i r i s
As in the past, learstream anking .A., learstream anking AG and urex learing AG, in their capacity as credit institutions, are sub ect to solvency supervision by the German or uxembourg banking supervisory authorities undesanstalt f r Finan dienstleistungsaufsicht, aFin, and ommission de urveillance du ecteur Financier, F, respectively . The same applies to the learstream olding at a regulatory group level. urex epo Gmb and Treasury ystems AG are also sub ect to specific provisions applicable to certain investment firms under aFin prudential supervision.
ince the authorisation of both urex learing AG and uropean ommodity learing AG as central counterparties in , these companies have been sub ect to the capital re uirements defined in Article I . These re uirements apply to urex learing AG as an authorised central counterparty in parallel to the prudential supervision re uirements the higher re uirement applies. Irrespective of its status as an other credit institution according to German law, uropean ommodity learing AG is only sub ect to I capital re uirements.
ince learstream anking AG was authorised as a central securities depository on anuary , it has been sub ect to the capital re uirements defined in Article . These re uirements apply to learstream anking AG at the same time as the prudential supervision re uirements the higher re uirement applies. The applications filed for learstream anking AG pursuant to Article and learstream anking .A. are currently being reviewed by the respective supervisory authorities. In addition to the above mentioned capital re uirements, learstream anking AG and learstream anking .A. will also be sub ect to a capital surcharge for the provision of intra day credit risk pursuant to Article d .
odal lear, is a erivatives learing rganisation sub ect to regulation by the ommodity Futures Trading ommission FT .
GI T .A., as a trade repository according to I , is sub ect to supervision exercised by the uropean ecurities and arkets Authority A .
one of the eutsche rse Group entities are trading book institutions. arket 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 central securities depositories and central counterparties belonging to eutsche rse Group, their recognised assets are sub ect to wide fluctuations. This leads to correspondingly volatile total capital ratios especially at the learstream companies. The volatility of the ratio is sub ect to ma or fluctuations on a day to day basis in the course of the year. ue to a high degree of secured or ero weighted cash investments, the own funds re uirements for credit exposures of urex learing AG and uropean ommodity learing AG are relatively stable despite volatile total assets in the course of the year.
To calculate operational risk, urex learing AG and uropean ommodity learing AG use the basic indicator approach, whilst the learstream companies apply the advanced measurement approach.
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ue to the specific arrangements for the investment firms urex epo Gmb , Treasury ystems AG and urex ecurities Transactions ervices Gmb , no explicit own funds re uirements for operational risk are determined in accordance with Article . Instead, the total own funds re uirement is determined either as the own funds re uirement amount for credit and market risk or as per cent of fixed overhead costs, depending on which is higher. ince credit and market risks are low, the relevant criterion for these companies is the own funds re uirement on the basis of overhead costs.
one of the Group companies sub ect to prudential supervision has either Additional Tier or Tier capital.
A minimum total capital ratio of per cent generally applies to institutions sub ect to the . In addition, I introduced various capital buffers, which the supervised credit institutions generally have to meet on top of the minimum total capital ratio of per cent, although they may temporarily fall below these levels. The current capital conservation buffer is . per cent.
As at ecember , the bank specific countercyclical buffer re uirement amounted to . per cent of risk weighted assets for learstream anking .A, to . per cent for learstream anking AG and to . per cent for learstream olding Group whereas urex learing AG has to hold . per cent. As at ecember , the systemic risk buffer was not re uired by the authorities in uxembourg or Germany. one of the Group companies has been defined as of global systemically important institution. learstream anking .A. has been defined by F o 07 as an “other systemically important institution” (O II since anuary and re uires an additional buffer of . per cent.
The individual companies’ capital resources sufficiently reflect the fluctuation in risk weighted assets. In addition, buffers are taken into account for the calculation of the recovery indicators specified in the recovery plans. The ob ective of these indicators is to prevent triggering recovery events. The capital re uirements determined in this way will be used for the mid term capital planning.
The own funds re uirements of learstream Group increased slightly in the reporting period. The capital re uirements for learstream anking AG increased, whilst for learstream anking .A. they decreased. hanges occurred regarding own funds re uirements for operational risks as well as credit and market risks, both at the single entity and Group levels.
In the medium to long term, the learstream Group expects increasing own funds re uirements at a regulatory group level for the following reasons ▪ The future applicability of own funds re uirements based on already applicable to F ▪ The establishment of own funds re uirements resulting from the introduction of minimum re uirements for e uity and eligible liabilities as a result of irective ▪ The implementation of the so called II package and other amendments under asel III
Eurex Clearing AG’s own funds requirements increased compared with the previous year. Given the increase in revenues in the past years, own funds re uirements for operational risk rose according to the model, whilst own funds re uirements for credit and market remained stable.
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The own funds requirements for operational risk calculated with Eurex Clearing AG’s internal risk model are higher than the own funds requirements derived from the asic indicator approach which is ased on the profit and loss statement as prescri ed y C ence Eurex Clearing AG always applies additional capital uffers for such ris s surpassing regulatory minimum requirements Against this ac ground an ing supervisors requested in 0 that Eurex Clearing AG increase the asis for the calculation of regulatory own funds requirements y considering an appropriate share of clearing related fees received for the account of operating entities The own funds requirements for operational ris are calculated once a year ased on a three year average of historical income including the assumed clearing fees and are therefore not su ect to daily fluctuations Compliance with the minimum regulatory ratio is maintained at all times due to the sufficient capital uffer for uncollateralised cash investments
Composition of own funds requirements
Own funds requirements for Own funds requirements for operational risk credit and market risk Total capital requirements
31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 €m €m €m €m €m €m Clearstream olding Group 0 Clearstream an ing A 07 77 7 Clearstream an ing AG 0 7
Eurex Clearing AG 0 0 0
n 0 0 the parent company Clearstream Holding AG made a contribution of €50.0 million to the capital reserve of Clearstream an ing AG Eurex Clearing AG received contri utions to its capital reserve of €135.0 million in 2020 from the parent company Eurex ran furt AG urther contri utions are scheduled for the coming years in order to strengthen their capital ase
egulatory capital ratios according to C
Own funds requirements Regulatory equity Total capital ratio
31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 €m €m €m €m Clearstream olding Group 77 7 0 Clearstream an ing A 77 7 0 Clearstream an ing AG 0 7 7
Eurex Clearing AG 0 7 7 0
Clearstream Banking AG’s capital requirements according to CSDR are currently significantly above CRR and C capital requirements The capital requirements under Article 7 C do not stipulate a specific ratio nstead the regulatory capital are compared with the capital requirements and has to e at least the same
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Capital adequacy requirements under CSDR
Clearstream Banking AG
31 Dec 2020 31 Dec 2019 €m €m wn funds requirement for operational credit and market risk n a ther CSDR capital requirements n a Total CSDR capital requirements under Article 47 CSDR 311.4 n/a
CSDR capital 419.9 n/a
Eurex Clearing AG’s capital requirements according to EMIR are currently significantly above CRR and CRD capital requirements As with the CSDR the capital requirements under Article E R do not stipulate a specific ratio or both Eurex Clearing AG and European Commodity Clearing AG this means that E R capital coverage of at least per cent is required A reporting requirement to the competent authority – in this case Ba in – is triggered when this ratio falls below per cent
he capital resources of Eurex Clearing AG and European Commodity Clearing AG are currently well above the regulatory requirements As at the reporting date total equity for both entities as disclosed in the financial statements was fully available to cover the risks according to Article of E R as this equity fulfils the liquidity requirement. Eurex Clearing AG’s own contribution to the default fund is €200.0 million. The own contribution to the default fund of European Commodity Clearing AG was also constant at €15.0 million and so also above the regulatory minimum.
Capital adequacy requirements under E R
Eurex Clearing AG European Commodity Clearing AG
31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 €m €m €m €m wn funds requirement for operational credit and market risk ther E R capital requirements Total EMIR capital requirements under Article 16 EMIR 190.8 173.0 84.9 67.1 Equity E R deductions wn contribution to default fund – – – – EMIR capital 549.8 414.8 116.9 103.9
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Own funds requirements for Own funds requirements on the Own funds requirements to be credit and market risk basis of fixed overheads met
31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 €m €m €m €m €m €m
Own funds requirements Regulatory equity total capital ratio
31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 €m €m €m €m
Own funds requirements Regulatory equity Equity ratio
31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 €m €m €m €m
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er ssess en e risk si u i n e e u i e B r
Deutsche Börse AG’s Executive Board is responsible for risk management throughout the Group and regularly reviews the entire Group’s risk situation. The Executive Board of Deutsche Börse AG confirms
u r Deutsche Börse Group’s
As at 31 December 2020, the Group’s REC amounted to €3,157 year (31 December 2019: €2,696 million).
u k and based on the risk management system, Deutsche Börse AG’s Executive Board concludes that the Group’s existence as a going concern.
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eport on opportunities
r nis i n r uni ies n e en
Deutsche Börse Group’s opportunities management aims to identify, evaluate and assess opportunities as early as possible and to take appropriate measures in order to transform opportunities into business success.
Deutsche Börse Group evaluates organic growth opportunities in the individual business areas both on an ongoing basis throughout the year and systematically at the Group level as part of its annual budget planning process. The process begins with a careful analysis of the market environment, which considers both what the customer wants, as well as market developments, competitors and regulatory changes. deas for growth initiatives are developed further using uniform, Group wide templates and sub ected to a profitability analysis. n this basis, the Executive Board of Deutsche Börse AG makes the final decision as to which initiatives are to be implemented.
r ni r r uni ies
Deutsche Börse Group has a very broad portfolio of products and services with which it covers all areas of a market infrastructure provider’s value creation chain. This makes the Group one of the most broadly based stock exchange organisations in the world. n order to maintain and expand this position the company is pursuing a new medium term growth strategy called ompass . Among other things Deutsche Börse Group is focusing on organic growth opportunities in order to achieve its strategic goals. The Group makes a basic distinction between secular and cyclical opportunities secular opportunities arise for example as a result of regulatory changes, new client re uirements such as the growing demand for exchange traded solutions to over the counter T transactions or from the trend whereby an increasing portion of assets are allocated in passive investment strategies e.g. index funds . The company can actively exploit these opportunities. yclical opportunities on the other hand cannot be influenced directly by the Group and are driven by macroeconomic changes. n addition Deutsche Börse Group intends to sei e long term opportunities arising as a result of the technological transformation. Growth from A is another aspect of the new strategy which is becoming more important.
e u r r r uni ies hen exploiting secular growth opportunities Deutsche Börse Group focuses on product innovations, increasing market share and winning new customers. The Group expects to see its highest revenue growth in trading and clearing in the coming years, due in part to the clearing of new financial derivatives, T derivatives and further growth in the trading of energy and gas products. oreign exchange trading via T is also expected to provide a contribution to net revenue growth. ost trading will focus on the further development of investment fund business. The growth focus in pre trading lies in expanding the index, analytics and E G business. The commercial potential of the initiatives mentioned here is described in more detail below.
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e in n i eri i es Deutsche Börse Group operates ure , one of the leading global derivative e changes. n addition to a broad range of established international benchmark products, a large number of ne products have been introduced in recent years, such as , total return, dividend and G derivatives. These ne products reflect changes in customer preferences and regulatory re uirements. The company anticipates further strong gro th in these and other ne products still to be launched in the years ahead.
e rin eri i es The li uidity problems e perienced by ma or market participants during the financial crisis ere triggered by the failure to settle bilateral T transactions that ere mainly entered into on an unsecured basis. n light of this, the leading industrialised nations G agreed to create an effective regulatory environment to make off e change derivatives transactions more transparent and more secure. onse uently, the uropean nion has created the uropean arket nfrastructure egulation . involves the obligation to clear standardised T derivative transactions using a central counterparty. ure learing G and its market partners created an alternative for clearing interest rates s aps in the in , hich since then has seen continuous gro th in notional outstanding volumes and market share.
r in n e rin er n s r u s n eip ig based uropean nergy change G allo s Deutsche Börse Group to offer a broad product range for trading and clearing of spot and derivatives contracts on po er and gas as ell as emission certificates. has become the central market for energy in ontinental urope and its product range includes the markets Germany, rance, the etherlands, Belgium, taly and pain. t has also been active in the market through its ac uisition of odal change in . s gro th is mainly based on the gro ing importance of rene able energies for generating energy. ing to the high degree of fragmentation, as ell as the inefficiency of T markets, the demand for on e change trading and clearing solutions has also increased over recent years. believes it is ell positioned in this changing competitive environment to achieve structural gro th and gain additional market share.
r in rei n e n e r in T is a leading global platform for currency trading, hose broad customer base includes companies, buy side customers and banks. By combining T s kno ledge and e perience in the foreign e change market ith Deutsche Börse Group s T e pertise, the Group ill be able to tap the additional revenue potential. T has made progress ith various measures for achieving synergies. including the launch of its futures and clearing services. Thanks to its leading position, Deutsche Börse also benefits from a structural trend even though, at present, the vast ma ority of daily foreign e change trading volumes is still e ecuted off e change, demand for transparent, electronic multi bank trading platforms such is rising.
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r ss r er se e en in es en un s Clients of Deutsche Börse Group can use Clearstream’s settlement and custody services for their entire fund portfolio – covering traditional investment funds, e change traded funds T s as ell as hedge funds. Given that supervisory authorities are also calling for more efficient settlement and custody solutions in order to guarantee ma imum security for client assets under custody, the Group e pects to ac uire additional client portfolios in the future. The Group is also continuously e panding its range of products and services. learstream, for e ample, is e tending its range of fund services to include management of distribution agreements, as ell as data compilation through ac uisitions. tending the product and service range, learstream e pects to generate additional net revenue by realising revenue synergies.
nsi n e in e n n i s usiness Deutsche Börse Group s ob ective in its inde business is to give the already established uropean inde provider T an even more global profile, in order to develop and market other indices orld ide in addition to its D and T inde families . n addition, Deutsche Börse s inde business ill continue to take advantage of the structural trend to ards passive investment products T s . n increasing number of private clients and asset managers no follo this trend not only are the costs lo er, but many active investment strategies have been returning under average performance. n order to support these trends more effectively, in Deutsche Börse G ac uired ioma, a leading provider of portfolio and risk management solutions. The combination created ontigo a fully integrated leading information provider for institutional investors, serving the gro ing market demand for products and analysis in this area.
The trend to ard sustainable investing constitutes another structural gro th opportunity for Deutsche Börse Group, hich has been given e tra momentum by the ovid pandemic. The Group aims to support market participants ith high uality G data, specialised G indices and the corresponding trading and hedging options. first step in this direction as taken in ovember hen the ac uisition of nstitutional hareholder ervices as announced. urthermore, the company e pects additional structural gro th from developing ne products and inning ne customers.
i r uni ies n addition to its secular gro th opportunities, Deutsche Börse Group has cyclical opportunities, for instance as a result of positive macroeconomic developments. lthough the Group 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 G shareholders significantly in the medium term
◼ The volumes of interest rate derivatives traded on the Group’s derivatives markets could rise if speculation on trends in long term yields on German and other uropean government bonds gro s, and if the spread bet een the various uropean government bonds continues to narro .
◼ n the cash e uities and financial derivatives market segment – etra cash e uities and ure financial derivatives – an economic recovery after the ovid pandemic and a lasting increase in investor confidence in capital markets could stimulate trading activity by market participants and increase trading volumes.
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e n i r uni ies e developments such as cloud services, in the conte t of artificial intelli ence , i data, ro otics, lockchain technolo y, com ined ith the potential for innovation offered y fintech companies, are drivin chan e in the financial sector This ne ave of technolo y mi ht help overcome arriers to market harmonisation, hile creatin additional efficiency and miti atin risks This development has een reinforced y the ne environment resultin from the Covid pandemic and is e pected to continue in the years to come The challen e for incum ent providers is in findin the ri ht ay to open up ne usiness models and innovative technolo ies
The Group has optimised its internal processes particularly ith re ard to cloud services processes, purchasin and settlement of travel e penses, amon others, are no processed in the cloud This has led to a si nificant streamlinin of processes, and also has a positive effect on the Group s costs The Group is also orkin on transferrin services and processes ith clients to the cloud or instance, the introduction of ne tradin platforms and updatin of e istin infrastructure mi ht e tested eforehand y clients, via the cloud This ould lead to si nificantly more a ile processes ithin the Group, as ne processes ould e introduced at more fre uent intervals, allo in the Group to respond more effectively to clients’ requirements. Deutsche Börse has signed agreements with a number of key cloud service providers, positionin itself at the forefront of cloud use in the uropean financial services sector
Blockchain technolo y constitutes another aspect of technolo ical opportunities t is considered a disruptive technolo y at times – ut at present, the financial services sector is increasin ly e plorin its opportunities Thanks to its decentralised nature, it facilitates direct interaction et een participants, thus offerin the potential for simplifyin comple processes sta lished market infrastructure providers such as Deutsche Börse Group, hich covers the entire value creation chain from a sin le source, play an important role hen it comes to tappin this potential – meetin e istin industry standards at the same time Besides le al and re ulatory re uirements, this also involves adherin to security standards, as ell as limitin risks and ensurin cost efficiency
r r uni ies
Gro th from is another aspect of the ne Compass strate y hich is ecomin more important Deutsche Börse Group focuses on transactions that are closely related to its strate ic ro th areas, hich include its inde and analytics usiness, G, commodities, forei n e chan e tradin , fi ed income tradin and investment fund services t aims to accelerate ro th in these areas y means of ac uisitions and make the usinesses even more scala le
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e ort on e ected develo ments
The forecast describes Deutsche Börse Group’s expected performance for the 2021 financial year. It contains statements and information on events in the future, and is based on the company’s e ectations and assum tions at the time of ublication of this cor orate re ort. n turn these are sub ect to known and unknown o ortunities risks and uncertainties. umerous factors many of which are outside the company’s control, influence the Group’s success, its business strategy and its financial results. hould o ortunities risks or uncertainties materialise or should one of the assum tions made turn out to be incorrect, the Group’s actual performance could deviate either positively or negatively from the e ectations and assum tions contained in the forward looking statements and information contained in this re ort on e ected develo ments.
e e en s in e er in en ir n en
r e n i en ir n en he ovid andemic une ectedly ushed the global economy into an un recedented recession in but Deutsche Börse rou e ects a significant economic recovery over the forecast eriod. t will be boosted by government stimulus rogrammes ultra loose monetary olicy by central banks worldwide and an increasing number of ovid vaccinations.
u ure e e en resu s er i ns iven its diversified business model and multi le sources of revenue and des ite the e traordinary macroeconomic environment Deutsche Börse rou believes it is very well ositioned to further im rove its results of o erations in the medium and long term. his e ectation is based on among other things the structural growth o ortunities that the rou intends to e loit for details see the ortunities re ort as well as on additional contributions from acquisitions.
s in revious years Deutsche Börse rou e ects net revenue from secular growth o ortunities to increase by at least er cent in the forecast eriod. he rou is driving this growth through investments. n doing so it aims to shift further market share from over the counter trading and clearing to the on e change segment and to further e and its ositions in e isting asset classes by introducing new roducts and functionalities and acquiring new customers. n contrast the develo ment of business divisions relying on cyclical factors continues to de end mainly on the degree of s eculation regarding the future interest rate develo ment and the level of volatility on equities markets. iven the e ce tionally high market volatility and interest rate cuts in the first quarter of it is very likely that the Group’s cyclical net revenue will go down over the forecast period. Acquisitions, particularly the acquisition of ondcenter from B on e tember and the acquisition of as at ebruary are e ected to deliver additional net revenue. n total the com any antici ates net revenue of around €3.5 billion for the forecast period.
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ithin the scope of its growth strategy, Deutsche Börse Group pursues clearly defined principles for managing operating costs. ssentially, the Group achieves the necessary flexibility in managing operating costs by a continuous process of improving operating routines. The company expects earnings before interest, tax, depreciation and amortisation (EBITDA) to go up to around €2.0 billion in the forecast period. The Group would then be fully in line with its medium term growth targets of 10 per cent per year on average for net revenue and BITDA over the period from 201 to 202 .
orecast for results of operations 2021
Based on Forecast for 2020 2021 €m €bn
et revenue ,21 . . arnings before interest, tax, depreciation and amortisation BITDA 1, . 2.0
ren s in n n in n i er r n e in i rs
Initiatives to promote the transparency and security of the mar ets will continue to be a ey focus during the forecast period, ensuring that Deutsche Börse Group adds value to society. ith regard to the development of the non financial performance indicators forecast for 2020, the Group was unfortunately unable to maintain system availability compared with the previous year, which was due to a technical infrastructure failure. easures ta en in this regard promise significantly higher operational reliability in the future. Against this bac ground, the company expects that the availability of the trading systems for the cash and derivatives mar et will again be at the very high level of previous years in the forecast period.
esponsible management that focuses on long term value creation is of considerable importance for Deutsche Börse Group as a service provider. Given demographic change and the resulting shortage of specialist staff, the company aims to continue to position itself adequately and – amongst other things – to increase the number of women in management positions.
Deutsche Börse AG s xecutive Board has defined target quotas for women on the two management levels beneath the xecutive Board, in accordance with section A tG, in each case referring to Deutsche Börse AG. By 1 December 2021, the proportion of women holding positions in the first and second management levels beneath the xecutive Board is planned to reach 1 per cent and 20 per cent, respectively.
oreover, as early as in 2010, the xecutive Board had adopted a voluntary commitment to increase the share of women holding middle and upper management positions to 20 per cent by 2020, and of women holding lower management positions to 0 per cent during the same period. The Group maintains this ambition, and has extended the scope of its voluntary commitment, over and above legal requirements. irstly, the target figures determined in this context relate to Deutsche Börse Group including subsidiaries worldwide. econdly, the definition of management levels positions was extended to also include heads of teams, for example.
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Future development of the Group’s financial position
The company expects operating cash flow, which is Deutsche Börse Group’s primary funding instrument, invest around €200 million in intangible assets and will propose a dividend of €3.00 per share to the Annual General Meeting to be held in May 2021. This would represent a cash outflow of about €551 were expected to impact the Group’s liquidity at the time the combined management report was
primarily into the Group’s inorganic growth. Should the Group be unable to invest these funds, additional
verall assessment the ecutive oard
part of the growth strategy is to further accelerate the Group’s growth. In this the Executive Board expects net revenue to rise to around €3.5 b Executive Board expects EBITDA to go up to around €2.0 billion in the forecast period. Overall, the
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Deutsche Börse G diclosures ased on the GB
The annual financial statements of Deutsche Börse G are prepared in accordance with the pro isions of the German ommercial ode andelsgeset uch, GB and the supplementary pro isions of the German toc orporation ct tiengeset , tG and are the underlying asis for the explanations that follow
usiness and operatin environment
General position Deutsche Börse AG is the parent company of Deutsche Börse Group. The parent company’s business acti ities include first and foremost the cash and deri ati es mar ets, which are reflected in the urex financial deri ati es and etra cash e uities segments, as well as index usiness Deutsche Börse G also operates essential parts of Deutsche Börse Group’s information technology. The de elopment of Deutsche Börse Group’s Clearstream (post trading segment is reflected in Deutsche Börse AG’s business de elopment, primarily due to the profit and loss transfer agreement with learstream olding G Deutsche Börse Group’s IFS (investment fund services) segment, in contrast, plays a lesser role for Deutsche Börse G onetheless, Deutsche Börse AG’s business and operating environment is essentially the same as that of Deutsche Börse Group this is descri ed in the “Macroeconomic and sector specific environment” section
Deutsche Börse AG’s course of business in the reporting period Deutsche Börse AG’s revenues increased by 9.8 per cent in the financial year, so a o e the company’s expectations. Total costs (staff costs, amortisation of intangible assets and depreciation of property, plant and e uipment and other operating expenses rose y per cent et profit went up y per cent compared with the pre ious year Deutsche Börse G s xecuti e Board considers the company’s performance in the 2020 financial year to be good.
erformance figures for Deutsche Börse G ales re enue y segment
2020 2019 Change 2020 2019 Change €m €m €m €m
ales re enue , , urex financial , Total costs deri ati es et income from commodities e uity in estments T foreign exchange B TD , , etra securities trading et profit for the , learstream post trading period in estment fund arnings per share ser ices (€) ontigo index and analytic usiness alculation ased on weighted a erage of shares outstanding Total 1,563.3 1,423.5 9.8
re ious year ad usted
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esu ts of oper tions of Deutsche Börse AG
Deutsche Börse AG’s net revenue rose by 9.8 per cent in 2020 to €1,563.3 million (20 9 €1,423.5 million). At €1,017.7 million, the largest contribution to revenue came from the Eurex (financial derivatives) segment (20 9 €92 . million). The brea do n of revenue by company segment is provided in the “Sales revenue by segment” table.
For more information on the development of the urex (financial derivatives) segment, please refer to the “Eurex (financial derivatives) segment” section.
The revenue contributed by the (commodities) and 0T (foreign exchange) segments is generated mainly by IT services. Therefore, the explanations in the “EEX (commodities) segment” and “360T (foreign exchange) segment” sections relate only indirectly to Deutsche Börse AG. The earnings situation of the ontigo (index business) segments is sho n in the section “Qontigo (index business) segment”. It is orth noting that the business development of the ST td. subsidiary does not directly impact upon the business performance of Deutsche Börse AG. Comments on the business development in the etra (cash e uities) segment can largely be found in the “Xetra (cash equities) segment” section. evenues attributable to the Clearstream (post trading) and IFS (investment fund services) segments result from the IT services Deutsche Börse AG provides to companies belonging to the Clearstream olding subgroup.
Other operating income went up to €50.4 million during the year under review (2019: €36.3 million).
Out of the total revenues in 2020 €232.8 million belong intercompany revenues.
The company’s total costs of €957.7 million ere up 8. per cent year on year (20 9 €884.6 million). For a breakdown, please refer to the table “ vervie of total costs”. Staff costs were down by 2.2 per cent year on year during the year under review, to €243.1 million (2019: €248.6 million). The decline in staff costs is mainly due to the restructuring programme and streamlining of the management structure. Staff numbers increased from an average of , 2 in the prior year to , 2 in the 2020 financial year.
Amortisation of intangible assets and depreciation of property, plant and e uipment increased to a total of €63.2 million in the year under review (2019: €59.1 million).
ther operating expenses ere up 2.9 per cent year on year, to €651.4 million (2019: €576.9 million).
The intercompany expenses for 2020 result to €333.7 million.
Deutsche Börse Group’s result from equity investments for the 2020 financial year totalled € .2 million (2019: €542.9 million). It consisted of dividend income of €348.2 million (2019: €305.7 million), and income from the transfer of profits of € 0 . million (2019: €228.1 million).
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased to €1,4 0.2 million (2019: €1,181.2 million). Net profit for the period amounted to €1, .9 million, representing an increase of 0. per cent (2019: €825.9 million).
1139 Deutsche Börse Grou Annu re ort
ecut ve n u erv sory Bo r s Management report | Deutsche Börse AG (diclosures based on the HGB) n nc st te ents otes urther n or t on
De e op ent of profit bi it Deutsche Börse AG’s return on equity expresses the ratio of net income after taxes to average equity v b e to the co ny ur n the course o . eturn on e u ty ncre se ro 9.9 er cent n 9 to . er cent n the ye r un er rev e .
in nci position of Deutsche Börse AG
As at the reporting date, cash and cash equivalents amounted to €518.4 million 9 €849.3 on n nc u e b n e os ts on current ccounts s e s ter e os ts n other short ter e os ts. h s os t on s or the ost rt e u ro c sh.
Deutsche Börse AG has external credit lines available of €605.0 million (2019: €605.0 million), which ere not yet r n s t Dece ber . oreover the co ny h s co erc er ro r e n ce h ch o s or e b e n short term financings of up to €2.5 billion, in various currenc es. At the en o the ye r there s no co erc er outst n n .
hrou h Grou e c sh oo n syste Deutsche Börse AG ensures n o t u oc t on o u ty throu hout Deutsche Börse Grou n th s y the rent ent ty es sure th t subs r es re n os t on to honour the r y ent ob t ons t ny t e.
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, e se re er to the “Financial position” section.
n the n nc ye r Deutsche Börse AG ener te c sh o ro o er t n ct v t es o €889.9 million (2019: €945.1 million). The reduction is particularly due to significantly higher rece v b es ro te co n es.
sh o ro investing activities amounted to € .9 million (2019: €495.0 million). The decline is re te rt cu r y to the nvest ents e n the re ort n ye r. he e u ty nvest ents n e rstre Holding AG increased by €150 million, in DBS Inc. by €98.4 mil on n n re sury yste s AG by €37.5 million.
verv e o tot costs sh o st te ent con ense
2020 2019 Change 2020 2019 €m €m €m €m
t costs . 8. . sh o ro o er t n ct v t es 889.9 9 . De rec t on n . 9. .8 ort s t on sh o ro nvest n ct v t es .9 9 . ther o er t n . .9 .9 sh o ro n nc n ct v t es . 8 . e enses Cash and cash equivalents as at 48.8 47.3 Total 957.7 884.6 8.3 31 December
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Cash flow from financing activities amounted to € mi ion in the year un er revie (2019: € 486.1 million). A dividend of €531.9 million was paid for the 2019 financial year. Cash and cash equivalents amounted to € mi ion as of the reporting ate Decem er (2019: €47.3 million). It is made up of liquid funds of €518.4 million (2019: €849.3), ess cash pooling liabilities of € million (2019: €801.9 million).
Assets of Deutsche Börse AG
As at Decem er the non current assets of Deutsche Börse AG amounted to €5, mi ion (2019: €5,349.8 million). At €5, mi ion most of the non current assets as attri uta e to shares in affiliated companies (2019: €5,007.5 million), mainly from the investments in Clearstream o ing AG reasury ystems AG urex ran furt AG an ontigo Gm
Deutsche Börse AG’s investments in intangible assets and property, plant and equipment totalled €6 million during the year under review (2019: €60.4 million). This rise was related to payments on account for construction in progress in various ocations Depreciation an amortisation in amounted to €63.2 million (2019: €59.1 million).
eceiva es from an ia i ities to affi iate companies inc u e invoices for intra Group services an amounts investe y Deutsche Börse AG ithin the scope of cash poo ing arrangements he receiva es from affi iate companies re ate to invoices for intra Group services ut primari y to earstream o ing AG for the company’s profit transfer of € mi ion ia i ities to affi iate companies resu te main y from cash poo ing amounting to € million (2019: €801.9 million) and trade liabilities of € million (2019: €46.1 million).
Working capital amounted to € million in 2020 (2019: € mi ion he change stems main y from the receiva e from earstream o ing AG for profit transfer
on current assets con ense
2020 2019 €m €m
ntangi e assets roperty p ant an equipment inancia assets
Non-current assets as at 31 5,672.4 5,349.8 December
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Deutsche Börse AG e p o ees
he num er of emp oyees at Deutsche Börse AG accor ing to GB rose y in the reporting year an tota e as at Decem er Decem er he average num er of emp oyees at Deutsche Börse AG in the financia year as
During the financia year emp oyees eft Deutsche Börse AG resu ting in a staff turnover rate of per cent
n Decem er Deutsche Börse AG ha emp oyees at six ocations aroun the or Information on the countries, regions, the employees’ age structure and length of service are provided in the ta es that fo o
As at Decem er per cent of Deutsche Börse AG’s employees were graduates. The ratio is ase on the num er of emp oyees ho ing a egree from a university co ege or vocationa aca emy as e as the emp oyees ho have comp ete egrees a roa n the company investe an average of ays in training per emp oyee
Age structure of emp oyees mp oyee ength of service
31 Dec 2020 % 31 Dec 2020 %
n er years n er years 30−39 years 5−15 years 40−49 years ore than years ore than years Total Deutsche Börse AG 1,636 100
Total Deutsche Börse AG 1,636 100
mp oyees per country region
31 Dec
2020 % Germany Great Britain rance ther uropean countries Asia Total Deutsche Börse AG 1,636 100
1 No employees are i.e. legal representatives of the corporation, apprentice and employees on parental leave
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e uner tion report of Deutsche Börse AG
The principles governing the structure and design of the remuneration system at Deutsche Börse AG are the same as those for Deutsche Börse Group, so reference is made to the emuneration report for Deutsche Börse Group.
orpor te go ern nce st te ent in ccor nce ith to section f GB
The corporate governance statement in accordance with section f GB is the same as that for Deutsche Börse Group. eference is therefore made to the section “ orporate governance statement”.
pportunities n ris s f cing Deutsche Börse AG
The opportunities and ris s of Deutsche Börse AG and the activities and processes to manage these ris s and opportunities are largely the same as for Deutsche Börse Group, so reference is made to the is report and the pportunities report. As a rule, Deutsche Börse AG shares the opportunities and ris s of its e uity investments and su sidiaries in accordance with its e uity interest. is s that could potentially threaten the e istence of the ure learing AG su sidiary would also have a direct influence on Deutsche Börse AG ased on a letter of comfort issued y Deutsche Börse AG. As of the reporting date, there were no risks jeopardising the company’s existence. Further information on the letter of comfort issued to ure learing AG is availa le in the section “Other financial obligations and off balance sheet transactions” in the notes to the annual financial statements of Deutsche Börse AG.
The description of the internal control system I , re uired y section of the GB, is provided in the “Group management” section.
orec st for Deutsche Börse AG
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 uantitative information on Deutsche Börse AG are provided in the orecast.
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emuneration report
ntro uction
The remuneration report explains the general principles of the remuneration system for the members of the xecutive Board and the upervisory Board of Deutsche Börse AG and describes the amount and structure of the remuneration of the Board members for financial year . The report complies with the re uirements of the andelsgeset buch German ommercial ode – “ GB” , the nternational Financial eporting tandards F and German Accounting tandard o. . Furthermore, the remuneration report already largely takes into account the re uirements of ection of the Aktiengeset German tock orporation Act “AktG” , which will not be mandatory until the year .
n arch , the German orporate Governance ode G G as amended on December , , also came into force. The upervisory Board of Deutsche Börse focuses on good corporate governance and transparency – also with regard to the remuneration of its Board members. Both the remuneration system for the xecutive Board and the remuneration system for the upervisory Board as well as the remuneration report comply with the principles, recommendations and suggestions of the G G .
The present remuneration report describes the remuneration of the xecutive Board under the remuneration systems and in accordance with the applicable regulatory re uirements. The upervisory Board intends to submit a new remuneration system for the xecutive Board to the Annual General eeting in ay for approval. The remuneration under this new system will then be reported in . The corresponding remuneration report will be submitted to the Annual General eeting for approval.
e ie of fin nci e r
The previous remuneration system for the xecutive Board members was partially modified by a resolution of the upervisory Board with effect from anuary , and submitted to the Annual General eeting on ay , for approval. The Annual General eeting approved this system by . of votes cast. n addition, the adjusted remuneration system for members of the upervisory Board was submitted to the Annual General eeting for approval and was approved by . .
A clear link between the remuneration of the members of the xecutive Board and their performance pay for performance is of crucial importance for the upervisory Board. n addition to a strong financial performance of Deutsche Börse Group and the achievement of central strategic goals, this also includes responsibility for employees, the environment and society.
Despite the global economic impact of the O D pandemic, Deutsche Börse Group was able to continue its growth path and achieve a good financial performance in . Based on the whole financial year , Deutsche Börse Group was not affected by the impact of O D to such an extent that would have re uired a change in targets. There was no need to resort to short time working or other government aid in this context. ikewise, the dividend paid to the shareholders was increased once again.
Adjusted net income growth as the key financial performance criterion in the performance bonus and the resulting target achievement in financial year are as follows
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Adjusted net income growth compared to 2019 Target achievement adjusted net income growth
section „Target achievement in the financial year 2020“
“ ” “ ”
Ø Target achievement Target achievement Total target achievement adjusted net income growth TSR Performance PSP Tranche 2016
section „ “
ecuti e Bo r re uner tion in fin nci e r
Gener princip es of the re uner tion s ste for the ecuti e Bo r Within the framework of its corporate strategy, Deutsche Börse’s goal is to strengthen – – ambitions over the long term. Hence, the company’s primary strategic focus is on growth. Deutsche
▪ external targets ensure the focus is on the company’s goal of above ▪ ▪
119 Deutsche Börse roup nnual report 2020
xecutive an upervisory Boar s Management report | Remuneration report inancial statements otes urther information
roce ure for eter ining i p e enting n re ie ing the re uner tion s ste The upervisory Boar , a vise by its omination ommittee, etermines the remuneration system for the members of the xecutive Boar . The remuneration system a opte by the upervisory Boar is submitte to the nnual eneral eeting. The upervisory Boar reviews the remuneration system on a regular basis, supporte by its omination ommittee, an submits the remuneration system to the nnual eneral eeting for approval in the event of any material changes – in any case, every four years. The upervisory Boar may retain the support of in epen ent external experts when necessary.
Deter in tion n ppropri teness of the re uner tion of the ecuti e Bo r xecutive Boar remuneration is set by the upervisory Boar on the basis of the remuneration system in force; the Nomination Committee is responsible for preparing the Supervisory Board’s decision. In oing so, the upervisory Boar shall ensure that remuneration is appropriate to the correspon ing xecutive Boar member’s tasks and performance, as well as to the company’s financial situation, and that it oes not excee the prevailing market level of remuneration without specific reasons. or this purpose, the upervisory Boar shall con uct a hori ontal an vertical peer group comparison on a regular basis at least every two years .
or this purpose, the upervisory Boar may seek the a vice of an external expert who is in epen ent of the xecutive Boar an the company. The hori ontal comparison is con ucte on the basis of relevant national an international peer groups. The upervisory Boar selects the peer groups on the basis of country, si e an in ustry as efine by the kt . Due to their comparable si e an taking into account the country criterion, D companies were most recently use as a suitable peer group for con ucting a hori ontal comparison. n a ition, uropean financial institutions as customers an competitors of Deutsche Börse were use as a further peer group. n or er to reflect the in ustry criterion, stock exchange operators serve as an a itional peer group.
n accor ance with the recommen ations of the , the upervisory Boar also takes into account the relationship between the remuneration levels of the xecutive Boar an that of senior management an the entire workforce, as well as the evelopment over time of the various salary levels over a two year perio in or er to assess the customary practice within the company. n this context, senior management comprises two management levels below the xecutive Boar . The upervisory Boar consi ers the remuneration levels compare to employees of Deutsche Börse as well as to the overall workforce of Deutsche Börse roup.
The upervisory Boar takes the results of this examination into account when setting target remuneration for members of the xecutive Boar , an thus also ascertains that xecutive Boar remuneration is appropriate.
target remuneration in line with prevailing market levels is assigne to each xecutive Boar member. This target remuneration is predominantly based on the skills and experience required for that member’s tasks, as well as on the target remuneration for the other xecutive Boar members. The remuneration for the hairman of the xecutive Boar hief xecutive fficer is roughly twice the target remuneration for the other xecutive Boar members.
The target remuneration for the xecutive Boar members was not a uste in financial year 2020. The respective service contracts with Dr Theo or Weimer, Dr hristoph Böhm, Dr Thomas Book an Dr tephan eithner were also renewe without changing the target remuneration. s Heike ckert was appointe for the first time with a correspon ing target remuneration.
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xecutive and Supervisory Boards Management report | Remuneration report inancial statements Notes urther information
In accordance with C C recommendation . , targets and reference parameters set by the Supervisory Board for variable remuneration components for each new financial year may not be changed retrospectively.
e sures to oi conf icts of interest Deutsche Börse Group’s rules for avoiding and dealing with conflicts of interest are also applicable to the procedures for determining, implementing and reviewing the remuneration system. here conflicts of interest occur in exceptional cases, they must be disclosed. The Board members concerned may be excluded from discussion and decision making processes, amongst other consequences. No conflicts of interest occurred in financial year .
App ic b e re uner tion s ste s in fin nci e r xecutive Board members are remunerated in accordance with the remuneration system applicable to them. The previous remuneration system for the xecutive Board members was adopted by the Supervisory Board, effective anuary , and was approved by the nnual eneral eeting with . on ay in accordance with Section kt old wording hereinafter “remuneration system 2016”). This remuneration system was adjusted to some extent, effective anuary , by a Supervisory Board resolution. The ad usted remuneration system was submitted to the nnual eneral eeting on ay for approval in accordance with Section a kt and was approved by 65.45% (hereafter “remuneration system 2020”). Thereby, the adjusted remuneration system for the xecutive Board applies to all service contracts with xecutive Board members entered into or extended on or after anuary . ue to the appointment of s eike ckert as member of the xecutive Board as of uly , the remuneration system has been applied to her. In accordance with the C C and Section of the inf hrungsgeset um ktiengeset Introductory aw to the erman Stock Corporation ct, kt , the existing remuneration system shall continue to apply to all existing service contracts with members of the xecutive Board. ccordingly, the remuneration system is applied to r Theodor eimer, r Christoph B hm, r Thomas Book, r Stephan eithner, r regor ottmeyer and s auke Stars.
er ie of the re uner tion s ste for e bers of the ecuti e Bo r
rget re uner tion n structure In designing the remuneration structure, the Supervisory Board strives to ensure that the overall structure of the remuneration of the xecutive Board is as uniform as possible. The remuneration system for xecutive Board members consists of non performance related and performance related remuneration components.
The non performance related remuneration components consist of the base salary, contractual ancillary benefits and pension contributions. The performance related component consists of the performance bonus as well as the performance shares.
n aggregate, base salary, contractual ancillary benefits, pension contributions, the target value of the performance bonus and the target value of the performance shares make up the target total remuneration.
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To ensure that the remuneration of the xecutive Board follows the principle of pay for performance, the target direct remuneration (base salary, performance bonus and performance shares) is made up of around 0 per cent performance related remuneration components. n addition, around 0 per cent of the performance related remuneration has a multi year assessment basis and is also share based. This ensures that the remuneration structure is geared to the sustainable and long term development of the company and that the variable remuneration, which is based on the achievement of long term goals, exceeds the short term goals and aligns the interests of the xecutive Board with those of the shareholders.
Base salary accounts for around 0 per cent of the target direct remuneration. The performance bonus, which is paid out after the respective financial year, accounts for around 22.5 per cent of the target direct remuneration. The performance bonus, which the members of the xecutive Board will not receive until after three further financial years, also accounts for around 22.5 per cent of the target direct remuneration. The performance shares account for around 25 per cent of the target direct remuneration.
In addition, the company’s share ownership guidelines require Executive Board members to invest a substantial amount of money in Deutsche Börse G shares during their term of office.
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i u re uner tion he maximum annual remuneration – comprising base salary, variable remuneration components, ancillary bene its and pension expenses – is capped at an aggregate gross amount of €9.5 million (total cap or each Executive Board member In the remuneration system , ancillary bene its are not included in the maximum remuneration, whereas they are included in the remuneration system
In the interest o shareholders, the company will continue to provide competitive incentives or outstanding personal per ormance and the company s long term sustainable success to Executive Board members, whilst preventing any unintended excesses which might otherwise be possible
he re uner tion co ponents in et i
on perfor nce re te re uner tion co ponents
B se s r he members o the Executive Board receive a ixed base salary, which is payable in twelve equal monthly instalments hen determining the amount o the base salary, the upervisory Board is guided by the nowledge and experience o the respective member o the Executive Board relevant or the tas s
ontr ctu nci r benefits ontractual ancillary bene its are granted to members o the Executive Board, such as the provision o an appropriate company car or business and personal use hey also receive taxable contributions towards private pensions In addition, the company may ta e out insurance cover or them within reason urrently this includes personal accident insurance and directors o icers insurance or Executive Board members ther ancillary bene its may include a temporary or permanent reimbursement o expenses or a second household, ourneys home, moving costs, cost coverage or security measures, the use o car pool vehicles or transport services
ro isions for retire ent n ris protection s a urther non per ormance related component o the remuneration system, the members o the Executive Board receive coverage or old age as well as in the event o their incapacity to wor and death
he members o the Executive Board are generally entitled to receive retirement bene its upon reaching the age o , provided that they are no longer in the service o eutsche B rse at that time – or r homas Boo , this applies on reaching the age o he upervisory Board reviews and determines the pensionable income that is used as the basis or retirement bene its Executive Board members normally receive a de ined contribution pension n exception to this rule applies to members o the Executive Board who continue being sub ect to an existing agreement rom prior appointments within eutsche B rse roup and may there ore receive a de ined bene it pension instead mong the active members o the Executive Board, the de ined bene it pension system only applies to r homas Boo
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Define contribution pension s ste
Define benefit pension s ste
The replacement rate depends on the Executive Board member’s term of office and the number of
Executive Board member or would justify termination without notice of the Executive Board member’s –
Benefits in c se of per nent inc p cit to or n e th
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Executive Board members with a defined contribution pension plan receive the plan assets that have accrued at the time when the benefits fall due plus a supplement correspondin to the full annual pension contribution that would have been due in the year in which the Executive Board member left the company’s service, multiplied by the number of years between the time at which the benefits fell due and the Executive Board member reachin the a e of
f an Executive Board member dies his or her spouse receives per cent and each dependent child receives per cent of the above amount per cent for full orphans up to a maximum of per cent of the pension contribution
r nsition p ents n the event that an Executive Board member becomes permanently incapable of wor in the defined benefit pension a reements for Executive Board members provide for a transitional payment The amount of this payment corresponds to the tar et variable remuneration performance bonus and performance shares in the year in which the event tri erin the benefits occurs t is paid out in two tranches in the two followin years f an Executive Board member dies his or her spouse receives per cent of the transitional payment
The pensionable income and the present value of the pension commitments existin as of ecember are shown per member of the Executive Board on a consolidated basis in the followin tables
etirement benefits part
Pensionable Present value/defined
income Replacement rate benefit obligation Pension expense
as at as at as at as at 31 Dec 31 Dec 31 Dec 31 Dec 2020 2020 2019 2020 2019 2020 2019 € thous. € thous. € thous. € thous. € thous. Defined contribution system Theodor eimer hristoph B hm ei e Ec ert – – – tephan eithner re or ottmeyer au e tars Total 3,700.0 – – 11,054.2 8,589.3 2,708.0 1,863.6
etirement benefits part
Pensionable Present value/defined
income Replacement rate benefit obligation Pension expense
as at as at as at as at 31 Dec 31 Dec 31 Dec 31 Dec 2020 2020 2019 2020 2019 2020 2019 € thous. € thous. € thous. € thous. € thous. Defined benefit system Thomas Boo Total 500.0 50.0 50.0 7,354.1 6,992.8 514.8 384.9
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erfor nce re te re uner tion co ponents
he performance related remuneration components account for the ma ority of the remuneration of ecutive oard members he performance related remuneration is divided into a performance bonus and performance shares n order to ensure the sustainable and lon term development of eutsche rse and to ali n the interests of the ecutive oard and shareholders, the performance related remuneration components are mainly desi ned to be multi year and share based erformance related remuneration is lar ely calculated on a lon term basis, with various performance criteria bein assessed over a period of five years performance shares or four years share based performance bonus one year performance period and three year holdin period for shares to be invested he cash component of the performance bonus annual payout is the only short term variable remuneration component
he followin overview illustrates the pay for performance aspect as the central idea behind the ecutive oard remuneration of eutsche rse based on the minimum tar et achievement, a tar et achievement of per cent and the ma imum tar et achievement usin the e ample of an rdinary oard ember remuneration system , not ta in into account the share price performance
126 eutsche rse roup nnual report
ecutive and upervisory oards inancial statements otes urther information
erfor nce bonus
rincip es of the perfor nce bonus he performance bonus is split between a share based component share based performance bonus and a cash component
ased on the , a performance bonus with a certain tar et value is indicated to the ecutive oard members for each year he e tent to which ecutive oard members have met their tar ets for the performance bonus is determined for each financial year on the basis of the he basic assessment procedure is based on two components
wo thirds of the bonus reflect the increase in ad usted net profit attributable to eutsche rse shareholders for the remuneration year concerned hereinafter referred to as net income and thus reflect the strate ic rowth orientation of eutsche rse
ne third reflects the Executive Board members’ individual performance, which is assessed particularly with a view to whether strate ic and operatin tar ets with strate ic relevance were achieved his way, the performance bonus recognizes the implementation of Group Deutsche Börse’s business strategy, thus contributing to the company’s long term development nce the upervisory oard has determined the overall e tent to which oard members have met their tar ets usin these two components, it may then review this fi ure and ad ust it usin a performance multiplier in e ceptional situations if so re uired this can be done either for individual ecutive oard members or for the ecutive oard as a whole he total performance bonus is paid out in cash, at the latest to ether with the re ular salary payment for the calendar month following the approval of Deutsche Börse AG’s consolidated financial statements for the year o stren then the lon term incentive effect, the ecutive oard members are obli ed to invest per cent of the total payout after ta in eutsche rse shares, which they have to hold for at least three years
127 Deutsche Börse Group Annual report
Executive and upervisory Boards inancial statements otes urther information
A uste net inco e gro th et income growth is calculated independently of the financial planning by comparing the ad usted net income for the remuneration year with the prior year figure he target achievement rate in the remuneration system may range between per cent and per cent a decrease in net income of per cent or more corresponds to a per cent target achievement rate floor rom the upervisory Board s point of view, the resulting linear target achievement curve between the floor and the target value reflects to a high degree the desired performance culture of Deutsche Börse At the same time, if net income declines slightly the upervisory Board considers the floor to be appropriate for the one year performance period in the remuneration system uch net income fluctuations are often also based on external factors and should not lead to a total loss of the performance bonus
here net income remains stable i e unchanged year on year , this is deemed to represent a target achievement rate of per cent, while a per cent increase is e uivalent to a target achievement rate of per cent target value et income growth of per cent or more corresponds to a per cent target achievement rate cap to reward above average net income growth even more his means that there is a stronger incentive to achieve net income growth of between per cent and per cent
128 Deutsche Börse Group Annual report
Executive and upervisory Boards inancial statements otes urther information
n the remuneration system , the target achievement of ad usted net income growth is determined as follows
he ad usted net income growth is also determined independently of the budget by comparing the ad usted net income growth for the remuneration year with that of the previous year arget achievement may range between per cent and per cent a net income decrease of per cent or more corresponds to a target achievement of per cent floor table net income, i e unchanged from the previous year, leads to a target achievement of per cent A net income increase of per cent corresponds to a target achievement of per cent target value An increase in net income of per cent or more corresponds to a target achievement of per cent cap
A uste net inco e gro th The Supervisory Board defines the Executive Board members’ individual targets and their weighting for the upcoming financial year or as of the appointment date in the event that a member is elected during the year ndividual targets can also be determined for the entire Executive Board or several Board members collectively ndividual targets should contribute to an implementation of the corporate strategy as well as to a long term, sustainable development at Deutsche Börse Group and can be financial as well as non financial n addition, sustainability targets according to environmental, social and governance E G criteria are part of the individual targets he upervisory Board must select at least one performance criterion from the catalogue of sustainability topics each year, unless it waives this in individual cases due to extraordinary circumstances By setting financial and non financial targets and assessing their achievement, the upervisory Board ensures that the implementation of the corporate strategy is pursued and sustained and that Deutsche Börse Group s corporate success is ta en into account in a holistic manner
he individual targets must be demanding and ambitious urthermore, they must be specific enough to allow for target achievement to be measured, i e , specific figures or expectations for target achievement are determined o avoid dilution, not more than four targets per year are set for each Executive Board member
129 eutsche B rse roup nnual report
Executive and Supervisory Boards inancial statements otes urther information
The targets are derived from the roup or corporate strategy or its respective parts and include their implementation Strategic pro ects and initiatives can directly serve to implement the corporate strategy as can operating measures The latter can also be agreed as targets if they indirectly contribute to strategy implementation for example by creating an essential foundation for the company’s structure, organi ation function and long term development
atalogue of performance criterions b ectives of the corporate strategy ustomer satisfaction Business development Employee satisfaction roduct development and innovation iversity aining mar et share is management Exploring ne mar ets ompliance Strategic pro ects orporate governance orporate Social esponsibility ompany structure organisation and function arbon emission reduction considerate use of resources Efficiency enhancement eporting and communication i uidity planning Succession planning
dvised by the omination ommittee the Supervisory Board assesses the extent to hich each member of the Executive Board has achieved his or her targets after the end of the remuneration year in uestion floor of per cent and a cap of per cent have been defined for the target achievement rate of individual targets
Deter ining the perfor nce u tip ier The performance multiplier for the performance bonus can be used by the Supervisory Board in special situations hen considering additional success and performance aspects not ta en into account sufficiently in the previously determined targets s such the performance multiplier can be used e g in the event of mergers ac uisitions or divestments to allo the Supervisory Board to account for any dilution of e uity or to reflect the achievement of ualitative or uantitative targets especially integration parameters hen finally assessing the extent to hich an Executive Board member has achieved his or her overall targets The performance multiplier has a minimum value of and a maximum value of it is multiplied by the performance assessment for the performance bonus ta ing the per cent cap remuneration system per cent into account
rget chie e ent in the perfor nce bonus in fin nci e r T o thirds of the performance bonus are based on year to year gro th in ad usted net income
eutsche B rse ’s adjusted net income increased from €1,105.6 million in financial year 2019 to € million in financial year 2020. It differs from the unadjusted net income (€ million due to the ad ustment for special effects resulting from organisational restructuring measures among others from the implementation of the corporate strategy “ oadmap ” and activities n addition costs for legal disputes ere ad usted
130 eutsc e rse roup nnua report
ecut e an uper sory oar s nanc a statements otes urt er n ormat on
uste net ncome ro t €m €m et ncome , , – ustments – uste net ncome , ,
e a uste net ncome ac e e correspon s to a ro t o per cent s resu ts n a tar et ac e ement o per cent n t e remunerat on system as e as n t e remunerat on system
uste net ncome ro t n t e remunerat on system €m o er m t – a ue , pper m t , ctua a ue ,
uste net ncome ro t n t e remunerat on system €m o er m t a ue , pper m t , ctua a ue ,
n a t on, one t r o t e per ormance onus s ase on n ua tar ets ese nc u e ot co ect e an n ua tar ets t t e e nn n o nanc a year , our n ua tar ets ere set or eac ecut e oar mem er
e tar ets to e met co ect e y y t e ecut e oar nc u e t e mp ementat on o t e corporate strate y “ oa map ”, steer n us ness act t es n part cu ar t re ar to re u at on app ca e t rou out t e roup, an susta na ty tar ets
n or er to mp ement t e corporate strate y “ oa map ”, one re u rement as or t e ecut e oar to ac e e a structura ro t tar et t t e same t me, nor an c ro t opportun t es ere to e encoura e n t e conte t o t e e ne roa map
131
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132
erfor nce sh res and especially Deutsche Börse AG’s long
Börse AG’s consolidated fi
133 Deutsche Börse Group Annual report
ecuti e and uper isory Boards inancial state ents otes urther infor ation
A uste net inco e gro th for the perfor nce sh res he uper isory Board deter ines and sets the target achie e ent rate for ad usted net inco e gro th at the end of each financial year during the fi e year perfor ance period he target achie e ent rate at the end of the perfor ance period in uestion is the a erage of the annual target achie e ent rates for each of the fi e years arget achie e ent rates ay range et een and per cent f net inco e declines or re ains unchanged year on year this is dee ed to represent a target achie e ent rate of per cent floor hile a per cent increase corresponds to a target achie e ent rate of per cent et inco e gro th of per cent re uneration syste or ore corresponds to a per cent target achie e ent rate cap he target achie e ent cur e is co pletely linear et een floor and cap
134 Deutsche Börse Group Annual report
ecuti e and uper isory Boards inancial state ents otes urther infor ation
ot ithstanding this target achie e ent cur e net inco e gro th of per cent or ore corresponds to a target achie e ent of per cent cap in the re uneration syste
perfor nce he total shareholder return perfor ance for Deutsche Börse shares is deri ed fro Deutsche Börse AG’s ranking relati e to the co panies included in the urope inancials inde he target achie e ent rates for ecuti e Board e ers can range fro per cent floor to per cent cap A per cent target achie e ent rate is assu ed here Deutsche Börse AG’s five year relati e does not e ceed the edian i e here it is lo er than that for at least half of the inde constituents. Where Deutsche Börse AG’s TSR has performed in line with 60 per cent of index constituents this represents a target achie e ent rate of per cent he cap of per cent target achie e ent is reached hen the for Deutsche Börse shares e uals or e ceeds the of per cent re uneration syste of the co panies included in the ench ar inde he target achie e ent cur e for perfor ance is thus co pletely linear he a itious target achie e ent cur e ith payouts only starting once half of the inde co panies ha e een outperfor ed the uper isory Board also e phasi es the pay for perfor ance aspect of ecuti e Board re uneration in ter s of total shareholder return
135 Deutsche Börse Group Annual report 0 0
xecutive and Supervisor Boards inancial statements otes urther information
otwithstanding this target achievement curve the maximum possi le target achievement of 0 per cent is reached in the remuneration s stem 0 6 as soon as Deutsche Börse AG’s TSR ranks in the top 0 per cent of companies in the index – in other words if it is in the 0th percentile of the index or higher.
Gr nt of the tr nche The S tranche 0 0 was granted at the eginning of the financial ear 0 0. The relevant allocation price for the PSP tranche 2020 was €138.48. The performance period of the PSP tranche 2020 ends on Decem er 0 . The individual target value the allocation price the num er of phantom performance shares granted and the possi le maximum num er of performance shares at the end of the performance period can e summari ed as follows for the individual xecutive Board mem ers
Grant of the S tranche 0 0 Target value € thous. Share price at grant € Theodor Weimer 00.0 . 0 hristoph Böhm 60.0 . 0 0 0 Thomas Book 6. . eike ckert . . 66 66 Stephan eithner 60.0 . 0 0 0 Gregor ottme er 60.0 . 0 0 0 auke Stars .6 .
136 6
out of the tr nche
“ ” “ ”
amount € € thous. at grant € period €
1) Plus dividends paid per share of €12.65 during the performance period.
137
A ition infor tion
€ thous. € thous. € thous. € thous.
138
139
h re o nership gui e ines
In addition, the company’s share ownership guidelines, being part of the remuneration system, require
Deutsche Börse’s share ownership guidelines are a key element in order to ensure that remuneration for shareholders’ interest as well as the long
140 Deutsche Börse roup nnual report
ecuti e and uper isory Boards inancial statements otes urther information
hare wnership uidelines
Amount € thous. heodor eimer , December hristoph Böhm , December homas Book , December eike ckert , December tephan eithner , December regor ottmeyer , December
eco er c b c or re uction us of ri b e re uner tion
n the basis of the ser ice contract for ecuti e Board members and the remuneration system the uper isory Board is entitled in e ents of serious misconduct by ecuti e Board members to demand repayment of all or part of the ariable remuneration under the performance bonus plan or the performance share plan compliance clawback , or to reduce ariable remuneration not yet disbursed accordingly compliance malus ny such clawback is limited to the calendar year in which the reason for the claim arose he uper isory Board is entitled to assert a clawback claim e en after an ecuti e Board member has left the company, for a period of up to two years following termination of the ser ice contract ny claims for damages remain unaffected by the clawback of ariable remuneration
In financial year Deutsche Börse did not reco er or reduce any ariable remuneration components
er in tion of the ser ice contr ct
e er nce p ents In the event that an Executive Board member’s contract of service is terminated early for a reason other than good cause, any payments made to the ecuti e Board member may not e ceed the remuneration for the residual term of his or her contract of ser ice, and may also not e ceed the alue of two total annual remuneration payments se erance cap he payment is calculated on the basis of the total remuneration for the past financial year and, where appropriate, the e pected total remuneration for the current financial year erformance bonus claims and performance shares that ha e been granted will lapse if the company has good cause for an extraordinary termination of the Executive Board member’s employment or if an ecuti e Board member terminates his or her contract before the end of the performance period without good cause and without reaching a mutual agreement
141 eutsche B rse rou nnual re ort
Executive and u ervisory Boards inancial statements otes urther information
h nge of ontro ccording to the remuneration system there is no rovision for a change of control
ccording to the remuneration system in the event of a change of control the follo ing rules a ly If an Executive Board member is as ed to stand do n ithin six months of a change of control he or she is entitled to a severance ayment e ual to t o total annual remuneration ayments or the value of the residual term of his or her contract of service here this is less than t o years his entitlement may be increased to er cent of the severance ayment If an Executive Board member resigns ithin six months of the change of control ta ing effect because his or her osition as a member of the Executive Board is negatively im acted to a significant degree as a result of the change of control the u ervisory Board may decide at its discretion hether to grant a severance ayment in the above mentioned amount In the case of a change of control all current erformance eriods shall end on the day on hich the contract of service is terminated he corres onding erformance shares ill be settled early
ost contr ctu non co pete c use ost contractual non com ete clause a lies to members of eutsche B rse ’s Executive Board his means that the Executive Board members in uestion are contractually rohibited from acting for a com eting com any or from underta ing com eting activities for one year follo ing the end of their service
Compensation of 75 per cent of the member’s final fixed remuneration and 75 per cent of his or her final cash bonus is ayable during the non com ete eriod ension agreement benefits are offset against the com ensation In addition er cent of other earnings are deducted if these – together ith the com ensation – exceed the Executive Board member’s final remuneration
he com any may aive the ost contractual non compete clause before the Executive Board member’s contract of service ends
ccording to remuneration system any severance ayments ill also be offset against com ensation in addition to ension agreement benefits
urther contr ctu ter s
o ns to ecuti e Bo r e bers he com any did not grant any loans or advances to members of the Executive Board during financial year and there are no loans or advances from revious years to members of the Executive Board
e uner tion fro group co p nies In financial year r homas Boo received a art of his remuneration from Eurex ran furt from anuary to une
n i i u isc osure of the ecuti e Bo r re uner tion he follo ing tables contain the figures for the individual Executive Board remuneration com onents mentioned above for financial years and he information disclosed in accordance ith ection B is sho n in the “Benefits received” tables
142 eutsche B rse roup nnual report
Executive and upervisor Boards inancial statements otes urther information
s in previous ears the remuneration amounts are reported individuall on the basis of the sample tables “benefits ranted” and “benefits received” in the version of the C C dated 7 ebruar 7 in order to ensure a transparent presentation of the respective rants and inflo s for the financial ears and
Benefits ranted part
€ thous. € thous. € thous. € thous. € thous. € thous. € thous. € thous. ixed remuneration 5 5 5 5 7 7 7 7 ncillar benefits 55 55 55 7 ne ear variable remuneration Cash component performance bonus 5 5 5 ulti ear variable remuneration no max no max hare component performance bonus 5 ear holdin period no max 5 no max 5 erformance shares 5 ear term no max 5 no max 5 ension expense 7 7 7
Benefits ranted part
€ thous. € thous. € thous. € thous. € thous. € thous. € thous € thous. ixed remuneration 7 7 7 7 7 7 7 7 ncillar benefits 7 7 7 5 5 5 5 ne ear variable remuneration Cash component performance bonus 5 5 5 5 5 ulti ear variable remuneration no max no max hare component performance bonus 5 ear holdin period 5 no max 5 5 no max 5 erformance shares 5 ear term 5 no max 5 5 no max 5 ension expense 7 7 7 7 7 7 7
143
€ thous. € thous. € € thous. € thous. € thous. € thous. € thous. – – – – – – – – – –
€ thous. € thous. € thous. € thous.
– “ orporate governance statement” section – “ ” 3) The total remuneration (excluding ancillary benefits) is capped at €9.5 million.
144
€
€ thous. € thous. € thous. € thous. € thous. € thous. € thous. € thous. – – –
– – – – – – – – – – – –
– –
– – – – – – – – – – –
–
145
€ thous. € thous. € thous. € € thous. € thous. € thous. € thous.
– – – –
– – – –
The total remuneration (excluding ancillary benefits) is capped at €9.5 million. (€
146
e uner tion of for er e bers of the ecuti e Bo r for fin nci e r Former members of the Executive Board or their surviving dependants received payments of € in financial year 2020 (2019: €9.7 million). The actuarial present value of the pension obligations in al year 2020 as at the reporting date was € million (31 December 2019: €84.8 million).
▪ € ▪ € ▪ ▪ €1
€ thous. at grant € period € € thous.
1) Plus dividends paid per share of €12.65 during the performance period.
“P ”
CPIP, he used private funds to invest €4,500,000 in Deutsche Börse AG shares (investment shares). In “Performance shares”
147
performance shares is measured on the basis of (i) Deutsche Börse AG’s amounting to €2.1 million and another one as of 31 March 2020 amounting to €5.5 million. Final payout of the outstanding amount of €5. performance shares for Mr Kengeter and thus a payout amount of € Kengeter’s resignation in 2017, no agreement had been concluded with him for the “Maximum remuneration”
e uner tion of the uper isor Bo r in fin nci e r
e uner tion s ste of the uper isor Bo r
December 2020. The Supervisory Board’s remuneration, providing for fixed remuneration only, strengthens the Supervisory Board’s independence and provi Executive Board remuneration, which is mainly variable and aligned with Deutsche Börse Group’s growth strategy. Supervisory Board’s remuneration therefore contributes to the implementation of the and thus promotes Deutsche Börse Group’s long
The members of the Supervisory Board receive fixed annual remuneration of €85,000 (until 30 April 2020: €70,000). In accordance with recommendation G.17 of the GCGC 2020 as Chairman of the Supervisory Board amounts to €220,000 (until 30 April 2020: €170,000); the remuneration for the Deputy Chair to €125,000 (until 30 April 2020: €105,000). Members of Supervisory Board committees receive additional fixed annual remuneration of €30,000 for each mbers of the Audit Committee is €35,000. The remuneration paid to committee chairs is €40,000, or €75,000 (until 30 April 2020: €60,000) in
148 Deutsche Börse Group Annua report
ecuti e and uper isor Boards inancia statements otes urther information
embers of the uper isor Board or a uper isor Board committee recei e an attendance fee of €1,000 for each Board or committee meeting that they attend in person either as a member or as a uest here t o or more meetin s are he d on the same da or on consecuti e da s the attendance fee is on paid once
After preparation b the nomination committee the uper isor Board e amines on a re u ar basis whether its members’ remuneration is appropriate, given their tasks and the situation of the company. or this purpose the uper isor Board sha conduct a hori onta mar et comparison and ma see the ad ice of an independent e terna e pert n ie of the specia nature of the or of the uper isor Board hen re ie in the remuneration of the uper isor Board usua no ertica comparison ith the remuneration of emp o ees of Deutsche Börse AG or Deutsche Börse Group is conducted
Depending upon the result of the comparative analysis and the Supervisory Board’s assessment of this resu t the uper isor Board and the ecuti e Board ma submit a oint proposa to the Annua Genera eetin for ad ustments to uper isor Board remuneration rrespecti e of such a proposa the Annua Genera eetin passes a reso ution on the remuneration of uper isor Board members (inc udin the under in remuneration s stem) e er four ears at the atest accordin to ection ( ) A tG the re e ant reso ution ma a so confirm the current remuneration
149 Deutsche Börse Group Annua report
ecuti e and uper isor Boards inancia statements otes urther information
e uner tion of the uper isor Bo r e bers for fin nci e r
uper isor Board remuneration )
T€ T€ artin etter ( hairman) fu ear fu ear oachim aber (former hairman ) an– a fu ear adine Absen er fu ear fu ear Ann ristin Ach eitner – an– a – ar us Bec fu ear fu ear ichard Ber iand – an– a – ar ein öther fu ear fu ear Andreas Gottsch in ) u – Dec – – usann ust ar fu ear fu ear Achim ar e fu ear fu ear orne is ohannes ico aas rui ssen fu ear fu ear Barbara ambert fu ear fu ear oachim a e ) an– une fu ear ichae di er ) a – Dec – – arsten ch fer fu ear fu ear har es G tonehi fu ear a – Dec ara hristina treit fu ear a – Dec utta tuh fauth (Deput hairperson) fu ear fu ear Gerd ausendfreund fu ear fu ear Am ip fu ear fu ear
) he recipient of the remuneration is determined indi idua b the members of the uper isor Board ) emuneration inc udin indi idua attendance fee ) eft the uper isor Board on a ) Appointed to the uper isor Board b court order on u ) eft the uper isor Board on une ) ected to the uper isor Board on a
o a reements for ad isor and a enc ser ices had been entered into in the reportin period ith members of the uper isor Board or ith companies that emp o members of the uper isor Board of Deutsche Börse AG or in hich uper isor Board members ho d an interest
150
o p r ti e present tion of the re uner tion e e op ent of the ecuti e Bo r e bers the uper isor Bo r e bers s e s the or force n the e rnings e e op ent of the co p n
€ thous. € thous. – – – – – –
– – – – –
Adjusted net income Mio. €
151
nne reso ution on the re uner tion s ste of the ecuti e Bo r t the Annu Gener eeting in fin nci e r
Börse Group’s current strategy “ ” ’
principle 22 of the Deutscher Corporate Governance Kodex (the “Code”, German Corporate Governance
“De
152 Deutsche Börse Group nnual report 2 2
xecutive and upervisory Boards inancial statements otes urther information
he xecutive Board and the upervisory Board of Deutsche Börse G declare that the recommendations of the GCGC in its respective version have een and are eing complied ith almost in full since the last declaration of conformity dated Decem er 2 lso, it is intended to fully comply ith the recommendations of the GCGC in the future or details, please see elo
greement of severance payment caps hen concluding xecutive Board contracts (no 2 ( GCGC 2 , recommendation G GCGC 2
everance payment caps agreed upon in all contracts ith the mem ers of the xecutive Board complied and ill continue to comply ith recommendation no 2 ( GCGC 2 recommendation G GCGC 2 n the past, ho ever, the upervisory Board reserved the right to deviate from no 2 ( GCGC 2 , as it as of the opinion that a deviation may ecome necessary in extraordinary cases n connection ith the introduction of an ad usted remuneration system for the xecutive Board from anuary 2 2 , the upervisory Board generally a andoned this reservation he recommendation – also in its ne version – has therefore een complied ith in full since then
2 Caps on total amount of remuneration (no 2 (2 (sentence GCGC 2 , recommendation G , first indent GCGC 2 and disclosure in the remuneration report (no 2 ( GCGC 2
o 2 (2 (sentence GCGC 2 recommended that the amount of management compensation shall e capped, oth as regards varia le components and in the aggregate his recommendation has not een fully complied ith in the past he annual remuneration, comprising fixed and varia le remuneration components and pension enefits, as capped at million (total cap for each mem er of the xecutive Board o ever, ancillary enefits ere not included in the overall cap n addition, the share ased long term varia le remuneration components ere capped regarding the num er of shares granted, ut no dedicated cap on the maximum achieva le onus amount as provided for ith regard to the share ased varia le remuneration components, the maximum achieva le remuneration therefore could not e reported either – as recommended in no 2 ( (first su item GCGC 2
ith the introduction of the ad usted remuneration system for the xecutive Board on anuary 2 2 , the annual remuneration of a fixed salary, varia le remuneration components, pension expenses and ancillary enefits for each xecutive Board mem er is no capped at a maximum amount of million (total cap egarding the xecutive Board service contracts that have een ne ly concluded or extended since anuary 2 2 , no 2 (2 sentence GCGC 2 and recommendation G , first indent GCGC 2 – according to hich, inter alia, in the remuneration system it should e determined hat amount the total remuneration may not exceed (maximum remuneration – is therefore complied ith ith the intended corresponding ad ustment of the remaining xecutive Board service contracts ith regard to the provision on maximum remuneration, recommendation G GCGC 2 ill e complied ith in the future in full
Composition of the omination Committee (no GCGC 2 , recommendation D GCGC 2
ccording to no GCGC 2 , recommendation D GCGC 2 , the upervisory Board shall form a omination Committee composed exclusively of shareholder representatives n accordance ith ection of the German toc xchange ct, the omination Committee, ho ever, also assists the upervisory Board of Deutsche Börse G in selecting candidates for the xecutive Board s in particular this tas shall not exclusively e performed y the shareholder representatives on the upervisory Board, the omination Committee also includes employee representatives
153
n the Committee.”
–
“shall”), which are (denoted in the text by the use of the word “should”). Deutsche Börse AG fully complies with them.
on uct po icies Deutsche Börse Group’s global orientation means that binding po apply at all of the Group’s locations around the world. Specifically, the main objectives of these addition to focusing on generating profit, Deutsche Börse Group’s business is manag
154 Deutsche Börse Group Annual report
xecutive and Supervisory Boards inancial statements otes urther information
o e of business con uct for e p o ees Acting responsibly means having values that are shared by all employees throughout the Group. n 2017, Deutsche Börse AG’s xecutive Board adopted an extended code of business conduct. his document, which is applicable throughout the Group, defines the foundations of ey ethical and legal standards, including – but not limited to – the following topics
◼ Confidentiality and the handling of sensitive information ◼ Conflicts of interest ◼ ersonal account dealing, as well as the prevention of insider dealing and mar et manipulation ◼ Company resources and assets ◼ Combat of bribery and corruption ◼ is management ◼ histle blowers ◼ nvironmental awareness ◼ ual opportunities and protection against undesirable behaviour
he code of business conduct applies to members of the xecutive Board, all other executives and all employees of Deutsche Börse Group. n addition to specifying concrete rules, the code of business conduct provides general guidance as to how employees can contribute to implementing the defined values in their everyday wor ing life. he goal of the code of business conduct is to provide guidance on wor ing together in the company on a day to day basis, to help resolve any conflicts and to resolve ethical and legal challenges. All newly hired employees receive the code of business conduct as part of their employment contract documentation. he code of business conduct is an integral part of the relationship between employer and employees at Deutsche Börse Group. Breaches may lead to disciplinary action. he document is available on www.deutsche boerse.com Sustainability ur SG profile mployees Guiding principles.
o e of con uct for supp iers n ser ice pro i ers Deutsche Börse Group not only re uires its management and staff to adhere to high standards – it demands the same from its suppliers and service providers. he code of conduct for suppliers and service providers re uires them to respect human rights and employee rights and comply with minimum standards. mplementing a resolution of the xecutive Board, the code of conduct for suppliers was amended in to include the re uirements set out in the odern Slavery Act, applicable to all corporations conducting business in the nited ingdom. ost suppliers have signed up to these conditions all other ey suppliers have made voluntary commitments, which correspond to, or in fact, exceed Deutsche Börse Group’s standards. Service providers and suppliers must sign this code or enter into an e uivalent voluntary commitment before they can do business with Deutsche Börse Group. he code of conduct for suppliers is reviewed regularly in the light of current developments and amended if necessary. It is available on Deutsche Börse Group’s website www.deutsche boerse.com Sustainability ur SG profile rocurement management.
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ues Deutsche Börse Group’s business activities are based on the legal ra ewor s and ethical standards o the di erent countries in which it operates. A ey way in which the Group underscores the values it considers i portant is by oinin initiatives and or anisations that advocate enerally accepted ethical standards. elevant e berships are as ollows
United Nations Global Compact www.un lobalco pact.or this voluntary business initiative established by the nited ations ai s to achieve a ore sustainable and ore e uitable lobal econo y. At the heart o the co pact are ten principles coverin the areas o hu an ri hts, labour, environ ent protection and anti corruption. Deutsche Börse Group has sub itted annual co unications on pro ress s on its i ple entation o the Global o pact since 200 .
Diversity Charter www.diversity charter.co as a si natory to the Diversity harter, the co pany has co itted to ac nowled in , respectin and pro otin the diversity o its wor orce, custo ers and business associates – irrespective o their a e, ender, disability, race, reli ion, nationality, ethnic bac round, sexual orientation or identity.
International Labour Organization www.ilo.or this a ency is the international or anisation responsible or drawin up and overseein international labour standards it brin s to ether representatives o overn ents, e ployees and e ployers to pro ote the oint develop ent o policies and programmes. Deutsche Börse Group has signed up to the ILO’s labour standards and hence has a reed to abide by the .
Frankfurt Declaration www.deutsche boerse.co ran urt declaration the ran urt Declaration demonstrates the signatories’ intention to define the framework conditions for sustainable finance and to put concrete initiatives in place in the ran urt inancial centre. hese are directed towards the identi ication o innovative business areas and the responsible handlin o ris s, a on st other thin s. he potential o sustainable inance in rastructures ust there ore be ully encoura ed in order to support positive econo ic and social develop ent ounded on the unconditional protection o the natural basis o li e.
or urther in or ation on sustainability at Deutsche Börse Group, please see the chapter “Combined non financial statement” or o to www.deutsche boerse.co ustainability.
ector specific po icies Deutsche Börse Group’s pivotal role in the financial sector requires that it handles information – and especially sensitive data and acts – responsibly. A nu ber o rules are in orce throu hout the Group to ensure that e ployees co ply with this. hese cover both le al re uire ents and special policies applicable to the relevant industry se ents, such as the whistle blowin syste and ris and control ana e ent policies.
hist e b o ing s ste Deutsche Börse Group’s whistle blowin syste provides a channel to report non co pliant behaviour. It is ai ed pri arily at e ployees and external service providers. he Group had previously en a ed the auditin and consultin co pany Deloitte to act as an external o buds an and receive any such in or ation sub itted by phone or e ail. his en a e ent was trans erred to Business eeper AG in Dece ber. histle blowers’ identities are still not revealed to Deutsche Börse Group.
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isk and control management policies Functioning control systems are an important part of stable business processes. Deutsche Börse Group’s enterprise wide control s stems are embedded in an overarching framework. his comprises amongst other things the legal requirements the recommendations of the German Corporate Governance Code international regulations and recommendations and other compan specific policies. he e ecutives responsible for the different elements of the control s stem are in close contact with each other and with the ecutive Board and report regularl to the upervisor Board or its committees. quall the Group has an enterprise wide risk management s stem that covers and provides mandator rules for functions processes and responsibilities. Details of the internal control s stem and risk management at Deutsche Börse Group can be found in the “Internal management” and “Risk report” sections.
n important fundamental principle of the German tock Corporation ct is the dual board s stem – which assigns separate independent responsibilities to the ecutive Board and the upervisor Board. hese responsibilities and their implementation at Deutsche Börse G are set out in detail in the following paragraphs.
Both boards perform their duties in the interests of the compan and with the aim of achieving a sustainable long term increase in value. heir actions are based on the principle of responsible corporate governance. herefore Deutsche Börse G’s Executive Board and Supervisory Board work closel together in a spirit of mutual trust with the ecutive Board providing the upervisor Board with comprehensive information on the company’s and the Group’s position and the course of business in a regular and timel manner. In addition the ecutive Board regularl informs the upervisor Board concerning issues relating to corporate planning the risk situation and risk management compliance and the company’s control systems. The strategic orientation of the compan is e amined in detail and agreed upon with the upervisor Board. Implementation of the relevant measures is discussed at regular intervals. he Chief ecutive Officer reports to the upervisor Board without undue dela orall or in writing on matters that are of special importance to the compan .
In addition the C O keeps the Chair of the upervisor Board continuousl and regularl informed of the current developments affecting the company’s business, significant transactions, upcoming decisions and the long term outlook and discusses these issues with them. he upervisor Board ma also request reports from the ecutive Board at an time especiall on matters and business transactions at Deutsche Börse G and subsidiaries that have a significant impact on Deutsche Börse AG’s position. The b laws for the ecutive Board and upervisor Board govern the corresponding information rights and obligations of the ecutive Board and upervisor Board in detail.
Deutsche rse AG’s Executive Board he ecutive Board manages Deutsche Börse G and Deutsche Börse Group it had si members during 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 as well as establishing and monitoring an efficient risk management s stem. he ecutive Board is responsible for preparing the annual and consolidated financial statements of Deutsche Börse G as well as for producing financial information during the course of the year. In addition, it must ensure the company’s compliance with legal requirements and official regulations.
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The members of the Executive Board are ointly responsible for all aspects of management. Irrespective of this collective responsibility, the individual members manage the company’s business areas assigned to them in the Executive Board’s schedule of responsibilities independently and are personally responsible for them. In addition to the business areas, the functional areas of responsibility are that of the hief Executive fficer E , the hief Financial fficer F , the hief Information fficer hief perating fficer I and R ompliance. The business areas cover the operating business units, such as the company’s cash market activities, the derivatives business, securities settlement and custody and the market data and financial information business. Details can be found in the “Overview of Deutsche Börse Group – Organisational structure” section.
Further details of the Executive Board’s work are set out in the bylaws that the Supervisory Board has adopted for the Executive Board. Amongst other things, these list issues that are reserved for the entire Executive Board, special measures re uiring the approval of the Supervisory Board, other procedural details and the arrangements for passing resolutions. The Executive Board holds regular meetings these are convened by the E , who coordinates the Executive Board’s work. Any Executive Board member can re uire a meeting to be convened. In accordance with its bylaws, the entire Executive Board normally takes decisions on the basis of resolutions passed by a simple ma ority of the members voting on them in each case. If a vote is tied, the E has the casting vote.
More information on the Executive Board, its composition, members’ individual appointments and biographies can be found at www.deutsche boerse.com execboard.
Deutsche Börse AG’s Supervisory Board The Supervisory Board supervises and advises the Executive Board in its management of the company. It supports the Executive Board in significant business decisions and provides assistance on strategically important issues. The Supervisory Board has specified measures re uiring its approval in the bylaws for the Executive Board. In addition, the Supervisory Board is responsible for appointing the members of the Executive Board, deciding on their total remuneration, examining Deutsche Börse AG’s annual and consolidated financial statements and the combined management report including the combined non financial statement. Details of the Supervisory Board’s work during the 2020 financial year can be found in the report of the Supervisory Board.
The Supervisory Board consists of members, made up of an e ual number of shareholder representatives and employee representatives in line with the German itbestimmungsgeset itbestG, German o determination Act . The term of office of the shareholder representatives on the current Supervisory Board ends at the Annual General eeting in . As a rule, the same applies to the employee representatives. owever, the ID pandemic meant that the elections for employee representatives, which had already begun, had to be interrupted. The plan is therefore to have the employee representatives appointed by court order until the election process can be completed.
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he Supervisory Board holds at least six regular meetings every year. n addition, extraordinary meetings are held as re uired. he committees also hold regular meetings. nless mandatory statutory provisions or the Articles of Associations call for a different procedure, the Supervisory Board passes its resolutions by a simple ma ority. f a vote is tied, the hairman has the casting vote. n addition, the Supervisory Board regularly reviews the structure, si e, composition and performance of the work of the Executive and Supervisory Boards as well as the effectiveness of its own work, and discusses potential areas for improvement and adopts suitable measures, where necessary.
he Supervisory Board hair is in regular contact with the representatives of shareholders and employees on the Supervisory Board, in addition to the scheduled meetings.
The Supervisory Board’s goal in establishing committees is to improve the efficiency of its work by examining complex matters in smaller groups that prepare them for the plenary meeting of the Supervisory Board. Additionally, the Supervisory Board has delegated individual decision making powers to the committees, to the extent that this is legally permissible. At the start of the reporting period the Supervisory Board had eight committees, whereby the hairman Selection ommittee was established solely to prepare the election of the new Supervisory Board hair after the Annual General Meeting 2020. he committee was dissolved automatically after the election of Martin etter as the new Supervisory Board hair on May 2020, bringing the number of committees back to seven. For details of the committees, please refer to the tables “Supervisory Board committees during 2020: composition and responsibilities”. Their individual responsibilities are governed by the Supervisory Board’s bylaws. he committees’ rules of procedure correspond to those for the plenary meeting of the Supervisory Board. Details of the current duties and members of the individual committees can be found online, at www.deutsche boerse.com supervboard ommittees.
he chairs of the individual committees report to the plenary meeting about the sub ects addressed and resolutions passed in the committee meetings. Information on the Supervisory Board’s concrete work and meetings during the reporting period can be found in the report of the Supervisory Board.
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.
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Supervisory Board committees during 2020: composition and responsibilities
udit ommittee
▪ Barbara ambert hair ▪ t least four members who are elected by the Supervisory Board ▪ adine bsenger ▪ rere uisites for the chair of the committee: the person concerned must be independent and must ▪ arkus Beck have specialist knowledge and e perience of applying accounting principles as well as internal control and risk management processes financial e pert ▪ arl ein l ther until ay 2020 ▪ ersons who cannot chair the committee: the hair of the Supervisory Board former members of the company’s Executive Board whose appointment ended less than two years ago ▪ ndreas ottschling
since ul 2020 ▪ oachim agel until 0 un 2020 ▪ ichael diger since ay 2020 ▪ eals with issues relating to the preparation of the annual budget and financial topics particularly ▪ utta Stuhlfauth capital management ▪ Deals with issues relating to the adequacy and effectiveness of the company’s control systems – in particular to risk management compliance and internal audit
▪ eals with audit reports as well as accounting issues including oversight of the accounting and reporting process ▪ alf yearly financial reports plus any uarterly financial reports discusses the results of the reviews with the auditors ▪ amines the annual financial statements the consolidated financial statements and the combined management report including the combined non financial statement discusses the audit report with the e ternal auditors and prepares the Supervisory Board’s resolutions adopting the annual financial statements and approving the consolidated financial statements as well as the resolution on the Executive Board’s proposal on the appropriation of the distributable profit ▪ Prepares the Supervisory Board’s recommendation to the nnual eneral eeting on the election of the e ternal auditors of the annual financial statements the consolidated financial statements and the half yearly financial report to the e tent that the latter is audited or reviewed by e ternal auditors and makes corresponding recommendations to the Supervisory Board ▪ eviews the non financial reporting sections 2 b b B ▪ onitors the audit particularly the independence and uality of the auditors and the non audit services provided by the auditors ▪ Issues the engagement letter to the e ternal auditor of the annual financial statements and the consolidated financial statements – including in particular the review or audit of half yearly financial reports and determines focal areas of the audit and the audit fee ▪ Prepares the Supervisory Board’s resolution approving the statement on the German Corporate overnance ode pursuant to section kt and the corporate governance statement in accordance with section 2 f B ▪ ontrol procedures on related party transactions pursuant to section a 2 sentence 2 kt
mployee representative
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omination Committee
▪ artin etter ▪ Chaired by the Chair of the Supervisory Board Chair since ay ▪ t least five other members who are elected by the Supervisory Board ▪ oachim aber ▪ ember and Chair until ay ▪ ar us Bec ▪ ddresses succession planning for the Executive Board and identifies candidates to fill vacancies in the Executive Board ▪ ichael diger since ay ▪ Develops a diversity concept for the Supervisory Board ▪ utta Stuhlfauth ▪ Deals with the annual assessment of the structure si e composition and performance of the ▪ Gerd ausendfreund Executive Board and Supervisory Board as well as possible improvements ▪ my ip ▪ Deals with the annual assessment of the qualification requirements of individual members of the Executive Board and Supervisory Board and the Executive Board and Supervisory Board as a whole ▪ eviews the policy for selection and appointment of members of the Executive Board and ma es recommendations to the Supervisory Board in this regard ▪ Proposes suitable candidates to the Supervisory Board for inclusion in the Supervisory Board’s election proposal to the nnual General eeting by shareholder representatives ▪ Enters into amends or terminates service agreements within the framewor defined by the Supervisory Board ▪ Deals with aggregate remuneration and retirement benefits of individual Executive Board members and determines payments to surviving dependants and any other similar payments regularly reviews the reasonableness of Executive Board remuneration and develops proposals for any ad ustments where required ▪ Consents to the assumption of mandates by members of Deutsche Börse AG’s Executive Board as member of an executive board supervisory board advisory board and similar mandates as well as secondary activities and honorary offices or grants relief from the consent requirement ▪ Consents to the granting or revocation of general powers of attorney ▪ pproves cases in which the Executive Board grants employees retirement benefits or other personal pension benefits or proposes wor s agreements establishing pension plans ▪ Decides on delaying the publication of insider information and on drafting ad hoc announcements on information for which the Supervisory Board is responsible ▪ ther tas s and duties set forth in section b B rsG
Employee representative
is Committee
▪ ndreas Gottschling ▪ t least four members who are elected by the Supervisory Board ember and Chair since ul ▪ oachim agel ember and Chair until un ▪ eviews the ris management framewor including the overall ris strategy ris appetite and the ris management roadmap ▪ Susann ust arx ▪ a es note of and reviews the periodic ris management and compliance reports ▪ Cornelis rui ssen ▪ Oversees monitoring of the Group’s operational, financial and business risks ▪ Barbara ambert ▪ a es note of and discusses the annual reports on significant ris s and the ris management ▪ systems at regulated Group entities to the extent legally permissible
Employee representative
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Strategy Committee
▪ artin etter ▪ Chaired by the Chair of the Supervisory Board member and Chair since ay ▪ At least five other members ho are elected by the Supervisory Board ▪ oachim aber ember and Chair until ay ▪ Advises the Executive Board on matters of strategic importance to the company and its affiliates ▪ Addresses issues concerning the Company’s orientation in terms of fundamental corporate policy ▪ Susann ust arx and entrepreneurship, as ell as pro ects important to Deutsche Börse Group ▪ Achim arle ▪ Carsten Sch fer ▪ Charles Stonehill ▪ Clara Christina Streit
Employee representative
echnology Committee
▪ arl ein löther ▪ At least four members ho are elected by the Supervisory Board Chair since ay ▪ artin etter ember and Chair until ay ▪ Supports the Supervisory Board in meeting its supervisory duties ith respect to the information technology used to execute the Group’s business strategy and with respect to information security ▪ Achim arle ▪ Advises on strategy and architecture ▪ Cornelis rui ssen ▪ Oversees monitoring of technological innovations, the provision of services, the technical ▪ Carsten Sch fer performance and stability of systems, operational risks, and information security services and ▪ Charles Stonehill risks since ay ▪ Amy ip
Employee representative
Chairman’s Committee
▪ artin etter ▪ Chaired by the Chair of the Supervisory Board Chair since ay ▪ Deputy Chair of the Supervisory Board as ell as one shareholder representative and one ▪ oachim aber employee representative ho are elected by the Supervisory Board ember and Chair until ay ▪ adine Absenger ▪ ime sensitive affairs ▪ utta Stuhlfauth
▪ Clara Christina Streit since ay
Employee representative
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ediation Committee
▪ artin etter ▪ Chaired by the Chair of the uper isory oard Chair since ay ▪ eputy Chair of the uper isory oard as well as one shareholder representati e and one ▪ oachim aber employee representati e ember and Chair until ay ▪ arl ein l ther ▪ as s and duties pursuant to section itbestG ▪ usann ust arx ▪ utta tuhlfauth
mployee representati e
Chairman election Committee until ay
▪ arbara ambert Chair ▪ As determined by the uper isory oard ▪ ar us ec ▪ oachim aber ▪ utta tuhlfauth ▪ Gerd ausendfreund ▪ repares the new election of the uper isory oard Chair in particular recommends candidates to ▪ Amy ip be elected by the uper isory oard
mployee representati e
ar ets or co positio a d ua i icatio re uire e ts o the Supervisory Board
n accordance with recommendation C of the Code the uper isory oard has adopted a catalogue of specific targets concerning its composition that abo e all should ser e as a basis for the future nomination of its members his catalogue comprises ualification re uirements as well as di ersity targets urthermore members shall ha e sufficient time as well as the personal integrity and suitability of character to exercise their office n addition more than half the shareholder representati es on the uper isory oard shall be independent
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ua i icatio re uire e ts Gi en their nowledge s ills and professional experience members of the uper isory oard shall ha e the ability to perform the duties of a super isory board member in a company with international business acti ities he uper isory oard has determined indi idual basic as well as general ualification re uirements asic re uirements are deri ed from the business model the concrete targets as well as from specific regulations applicable to eutsche rse Group
deally each uper isory oard member holds the following basic ualifications
◼ nderstanding of commercial issues ◼ Analytical and strategic s ills ◼ nderstanding of the corporate go ernance system ◼ nowledge of the financial ser ices sector ◼ Understanding of Deutsche Börse AG’s activities ◼ Understanding of Deutsche Börse Group’s structure ◼ Understanding of the member’s own position and responsibilities
he general ualifications refer to the uper isory oard in its entirety At least two of its members should ha e sound nowledge especially concerning the following topics
◼ usiness models of exchanges and the capital mar ets ◼ Accounting finance audit ◼ is management and compliance ◼ nformation technology and security digitalisation ◼ Clearing settlement and custody business ◼ egulatory re uirements
he current composition of the uper isory oard fulfils these criteria concerning the ualification of its members
Supervisory Board members’ general qualification requirements
nformation technology and
artin etter Chair arl ein l ther Andreas Gottschling arbara ambert ichael diger Charles tonehill Clara Christina treit Amy ip
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n accordance with recommendation of the ode the Supervisory Board shall be comprised of what it considers to be an appropriate number of independent members herefore the Supervisory Board decided that at least half the shareholder representatives on the Supervisory Board shall be independent Supervisory Board members are considered to be independent within the meaning of recommendation of the ode if they are independent of the company and its ecutive Board and independent of any controlling shareholder n particular Supervisory Board members are no longer to be considered independent if they have a personal or business relationship with the company or its ecutive Board that may cause a substantial and not merely temporary conflict of interest According to recommendation of the ode more than half the shareholder representatives shall be independent of the company and the ecutive Board
he Supervisory Board regards all of its shareholder representatives as being independent
Diversity co cept or the ecutive Board a d the Supervisory Board
he diversity concept for the ecutive Board and the Supervisory Board as adopted by the Supervisory Board in accordance with section f no GB has the ob ective of ensuring a wide range of perspectives and e perience through the composition of both bodies he concept is implemented within the scope of selecting and appointing new ecutive Board members or regarding proposals for election of new Supervisory Board members
he Supervisory Board considers the fle ible age limit stipulated in the bylaws generally years when nominating candidates for election by the Annual General Meeting. Furthermore, the Supervisory Board’s bylaws provide for a general limitation to members’ maximum term of office to twelve years, which the Supervisory Board shall also consider in its nominations of candidates to the Annual General eeting
he fle ible age limit for members of the ecutive Board provides for the term of office to e pire at the end of the month during which a member reaches the age of years rom the month during which an ecutive Board member has reached the age of re appointment is permitted for a period of one year in each case provided that the last term of office shall e pire at the end of the month during which the ecutive Board member reaches the age of hen appointing members of the ecutive Board the Supervisory Board pursues the ob ective of achieving an optimal composition of the ecutive Board from the company’s perspective. In this context, experience and industry knowledge, as well as professional and personal qualifications play a ma or role Depending on the ecutive Board position to be filled it is not ust the scope and depth of s ills that is decisive but also whether the specific s ills are up to date he fle ible age limit has been deliberately worded to preserve the Supervisory Board s fle ibility in ta ing decisions on appointments
At present, no Executive Board member has passed the age limit of 65 years. Theodor Weimer’s term of office as Chairman of Deutsche Börse AG’s Executive Board runs until 31 December 2024. Theodor eimer will reach the age of in n view of his long standing e perience and nowledge of the sector and his professional and personal qualifications the Supervisory Board decided whilst maintaining the general rule on a flexible age limit, against only renewing Theodor Weimer’s term of office on an annual basis once he reached the age of
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With regard to the Supervisory Board, the legally prescribed gender uota of 30 per cent in accordance with section 6 2 of the AktG applies. In order to prevent the possible discrimination of either shareholder representatives or employee representatives, and in order to increase the planning security in the relevant election procedures, the shareholder representatives on the Supervisory Board have opposed the overall compliance of the uota in accordance with section 6 2 sentence 2 AktG. Thus, the minimum proportion of 30 per cent is to be complied with for each gender with regard to the shareholder representatives and the employee representatives. This means that at least two women and two men from each the shareholder representatives and from the employee representatives must be on the Supervisory Board. Currently, there are three women each from the shareholder representatives and from the employee representatives. The legally prescribed gender uota is thus complied with.
Deutsche Börse AG’s Supervisory Board has defined a target quota for women on the Executive Board in accordance with section 111 5 AktG. The first minimum target – 20 per cent of the Executive Board members were to be women – was complied with by the end of the implementation period on 30 une 201 . The uota of women on the Executive Board was 20 per cent at this time. Effective 1 uly 201 , the Supervisory Board decided to extend the 20 per cent target uota of women on the Executive Board until 31 December 2021. This uota, however, declined due to the increase of the Executive Board to six members as of 1 uly 201 , despite the fact that the actual number of women on the Executive Board did not change. The uota of women on the Executive Board is currently 16. per cent.
The Supervisory Board intends to comply with the 20 per cent target uota for women on the Executive Board and also intends to further increase the uota for women on the Supervisory Board. This will be taken into account in future personnel decisions.
The composition of the Executive Board and the Supervisory Board shall reflect the company’s international activities. With Barbara ambert, Charles Stonehill, Clara Christina Streit and Amy ip, there are four shareholder representatives on the Supervisory Board holding non or non exclusive German citi enship. Cornelis rui ssen, employee representative on the Supervisory Board, has the Dutch nationality. In addition, many of the members of the Supervisory Board have long term professional experience in the international field or are working abroad on a permanent basis. The Supervisory Board will therefore continue to meet the ob ectives concerning its international composition.
The same applies to the Executive Board, where Stephan eithner holds non German citi enship, and whose members have gained long standing international working experience as well.
The Supervisory Board has set itself the ob ective of considering an appropriate range of educational and professional backgrounds regarding its own composition, as well as regarding the composition of the Executive Board. The composition of both the Supervisory Board and the Executive Board reflect these ob ectives. In addition to possessing professional experience in the financial services industry, members of the Executive Board and the Supervisory Board also have a professional background in consultancy, the IT sector, auditing, administration and regulation. In terms of academic education, most members have economics or legal degrees, in addition to backgrounds in IT, engineering and other areas. Education and professional experience thus also contribute to fulfilling the previously mentioned ualification re uirements for Supervisory Board members.
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The composition of both Deutsche Börse AG’s Supervisory Board and Executive Board is in line with the o ectives stated a ove lease refer to www deutsche oerse com superv oard for further information concerning the mem ers of the Supervisory Board and its committees or further information concerning the mem ers of the Executive Board please see www deutsche oerse com exec oard
repari the e ectio o shareho der represe tatives to the Supervisory Board
The Supervisory Board s omination ommittee – whose tas it is to propose suita le candidates to the Supervisory Board for its proposal to the Annual General eeting – has concerned itself with preparing the election of shareholder representatives to the Supervisory Board at the Annual General eeting in Amy ip has decided not to stand again for the Supervisory Board The shareholder representatives in the omination ommittee decided on e ruary to propose eight candidates for the election of shareholder representatives y the Annual General eeting to the Supervisory Board Seven of the eight proposed candidates were already mem ers of the Supervisory Board one candidate has not previously een a mem er The committee mem ers ensured that the selected candidates met all the criteria mentioned a ove To this end the shareholder representatives in the omination ommittee first drew up a long list of suita le candidates After interviewing the candidates on the list the shareholder representatives in the committee agreed on the new candidate for the Supervisory Board elections in nformation on all candidates including their will e availa le in the agenda for the Annual General eeting on ay and can e accessed in advance of the Annual General eeting at www deutsche oerse com hv
rai i a d pro essio a deve op e t easures or e ers o the Supervisory Board
As a matter of principle Supervisory Board mem ers are responsi le for their continuing professional development Deutsche Börse AG follows recommendation D of the ode and the guidelines of the European Securities and ar ets Authority ES A on management odies of mar et operators and data reporting services providers and supports Supervisory Board mem ers in this endeavour or example it organises targeted introductory events for new Supervisory Board mem ers and wor shops on selected strategy issues as well as on professional topics if required Thus in addition to one strategy and two technology wor shops the Supervisory Board held a wor shop on legal and compliance matters in the reporting period n individual cases Deutsche Börse AG assumes the costs incurred for third party training, as part of its own training programme “Qualified Supervisory Board” for Supervisory Board mem ers for instance
a i atio o the e ective ess o Supervisory Board or
Deutsche Börse AG regards regular reviews of the effectiveness of Supervisory Board wor – in accordance with recommendation D of the ode – as a ey component of good corporate governance The annual self assessment is supported y an external service provider every third year most recently in The effectiveness examination was completed in the third quarter y means of a structured questionnaire and focusing on the tas s and composition of the Supervisory Board co operation etween Supervisory Board mem ers and etween the Executive Board and the Supervisory Board Supervisory Board meetings and Supervisory Board committees The review yielded positive results oth in terms of overall effectiveness as well as regarding the audited su ect areas here it identifies room for improvement optimising proposals were discussed y the Supervisory Board and measures for their execution implemented
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n the second half of the Supervisory Board discussed the efficiency of its wor at the initiative of the new Supervisory Board Chair Martin Jetter. Under his leadership the members of the Chairman’s ommittee, the hair of the Audit ommittee and the hair of the is ommittee developed concrete measures to increase the time available to individual Supervisory Board members for exercising their advisory function on business and strategy related topics The first organisational measures were implemented when the Supervisory Board meeting was prepared and held in December
o ter successio p a i or the ecutive Board
Together with the Executive Board, the Supervisory Board ensures that long term succession planning ta es place or this purpose the Supervisory Board, or its omination ommittee, regularly – at least once a year – concerns itself with potential candidates for the Executive Board The hair of the Executive Board is involved in these considerations, provided that the discussions do not refer to their own succession The Supervisory Board prepares an applicant profile for vacant Executive Board positions The Supervisory Board ta es care to ensure that the nowledge, expertise and experience of all Executive Board members is diverse and well balanced, and adheres to the adopted diversity concept oreover, the Supervisory Board ensures it is informed regularly about the succession planning at the first level beneath the Executive Board, and provides advice to the Executive Board in this regard
ar et i ures or the proportio o e a e e ecutives e eath the ecutive Board
Deutsche Börse AG’s Executive Board has defined target uotas for women on the two management levels beneath the Executive Board, in accordance with section A tG, in each case referring to Deutsche Börse AG By December , the proportion of women holding positions in the first and second management levels beneath the Executive Board is planned to amount to per cent and per cent, respectively As per December , the share of women holding positions on the first and second management levels beneath the Executive Board at Deutsche Börse AG in Germany was per cent and per cent, respectively
oreover, as early as in , the Executive Board had adopted a voluntary commitment to increase the share of women holding middle and upper management positions to per cent by and of women holding lower management positions to per cent during the same period The Group maintains this ambition for , and has extended the scope of its voluntary commitment over and above the legal re uirements irstly, the target figures determined in this context relate to Deutsche Börse Group including subsidiaries worldwide Secondly, the definition of management levels positions was expanded to include heads of teams, for example n a global level, as at December , these uotas stood at per cent for upper and middle management levels and per cent for lower management positions or Germany, the uotas were per cent and per cent, respectively Deutsche Börse Group will continue its existing activities to reach the target uotas and implement additional measures
168 Deutsche Börse Group Annual report
ecutive and upervisory Boards inancial statements otes urther information
Shareho der represe tatio tra spare t reporti a d co u icatio
hareholders e ercise their ri hts at the Annual General Meetin AGM . n the spirit of ood corporate overnance Deutsche Börse AG aims to ma e it as easy as possible for shareholders to e ercise their shareholder ri hts. or instance Deutsche Börse AG shareholders may follo the AGM over the internet and can be represented at the AGM by pro ies nominated by Deutsche Börse AG. hese pro ies e ercise voting rights solely in accordance with shareholders’ instructions. Additionally, shareholders may exercise their votin ri hts by post or online. Amon st other thin s the AGM elects the shareholder representatives to the upervisory Board and decides on formal approval for the actions of the ecutive Board and the upervisory Board. t also passes resolutions on the appropriation of the unappropriated surplus resolves on capitalisation measures and approves intercompany a reements and amendments to Deutsche Börse AG’s Articles of Association and appoints the external auditors. Ordinary AGMs – at hich the ecutive Board and the upervisory Board ive an account for the past financial year – ta e place once a year.
or the reportin year Deutsche Börse AG decided in vie of the C D pandemic to hold the Annual General Meetin as a virtual event ithout the physical presence of shareholders or their pro ies as provided for by the “Gesetz über Maßnahmen im Gesellschafts Genossenschafts ereins tiftun s und ohnun sei entumsrecht ur Be mpfun der Aus ir un en der C D Pandemie” (“Act on Measures in Corporate Cooperative Association oundation and esidential roperty a to Combat the ffects of the Covid 19 pandemic as of 27 March 2020”). This was done, in particular to ensure that all resolutions includin on the appropriation of profits could be ta en at the scheduled time. hareholders ere able to follo the entire Annual General Meetin live online and e ercise their votin ri hts by means of postal votin or appointin the company pro ies. uestions could be submitted to the company electronically up to t o days before the Annual General Meetin and ere ans ered in full durin the meetin . Additionally the company published the speeches by the Chairs of the ecutive Board and upervisory Board ahead of the Annual General Meetin enablin shareholders to submit uestions about them in advance too.
o ma imise transparency and ensure e ual access to information, Deutsche Börse AG’s corporate communications enerally follo the rule that all tar et roups 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 ey 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 ne s can all be found on Deutsche Börse s ebsite .deutsche boerse.com. Deutsche Börse AG provides information about its annual and consolidated financial statements as ell as interim reports in conference calls for analysts and investors. urthermore a re ular investor day is held and Deutsche Börse continuously outlines its strate y and business developments to everyone ho is interested abidin by the principle that all tar et roups orld ide must be informed at the same time.
Additionally Deutsche Börse AG submitted a Communication n ro ress C for to the U Global Compact. Good corporate governance is one of Deutsche Börse Group’s core concerns, is why it has complied with the Global Compact’s principles for many years. ublic records of this have been available since the company officially oined the initiative in .deutsche boerse.com ustainability ur G profile Global initiatives U Global Compact.
169 Deutsche Börse Group Annual report 2020
xecutive and upervisory Boards inancial statements otes urther information
Accou ti a d auditi
Deutsche Börse AG’s annual report provides shareholders and interested members of the public with detailed information on Deutsche Börse Group’s business performance during the reporting period. Additional information is published in its half yearly financial report and two uarterly statements. The annual financial statement documents and the annual report are published within 90 days of the end of the financial year ( 1 December) intra year financial information (half yearly financial report and uarterly statements) is made available within days of the end of the relevant uarter or six month period. ollowing preparations by the Audit Committee, the annual and consolidated financial statements are discussed by the entire upervisory Board and with the external auditors, examined, and then approved. The xecutive Board discusses the half yearly report and the uarterly statements for the first and third quarters with the Supervisory Board’s Audit Committee prior to their publication. The half yearly financial report is reviewed by the external auditors. n line with the proposal by the upervisory Board, the 2020 AGM elected PMG AG irtschaftsprüfungsgesellschaft, Berlin, ( PMG) to audit its 2020 annual and consolidated financial statements and to review its half yearly financial report in the year under review. PMG was also instructed to perform a review of the contents of the combined non financial statement during the 2020 financial year. The lead auditor, ven Olaf eitz, and the deputy lead auditor, laus lrich Pfeiffer, have been responsible for the audit since 201 . The upervisory Board’s proposal was based on the recommendation by the Audit Committee. The Audit Committee obtained the necessary statement of independence from PMG before the election. This states that there are no personal, business, financial or other relationships between the auditor, its governing bodies and audit managers, on the one hand, and the company and the members of its xecutive and upervisory Boards, on the other, that could give cause to doubt the auditor’s independence. The Audit Committee chec ed that this continued to be the case during the reporting period. t also oversaw the financial reporting process in 2020. The upervisory Board was informed in a timely manner of the Committee’s wor and the insights gained there were no material findings. nformation on audit services and fees is provided in note to the consolidated financial statements.
Based on the resolution ta en on 7 ovember 2019, the upervisory Board of Deutsche Börse AG will propose to the Annual General Meeting 2021 to appoint PricewaterhouseCoopers Gmb irtschaftsprüfungsgesellschaft with its registered office in ran furt am Main as auditor and Group auditor for the financial year 2021. n accordance with the procedure laid down in Article 1 (2) of the Auditor egulation (regulation ( ) o 7 201 of the uropean Parliament and of the uropean Council of 1 April 201 ), the decision proposal was preceded by an extensive selection process, as a result of which the Audit Committee recommended PricewaterhouseCoopers Gmb irtschaftsprüfungsgesellschaft as the future external auditor.
170 1 0 Consolidated financial statements/notes
171 Consolidated financial statements
172 Consolidated income statement
173 Consolidated statement of comprehensive income
174 Consolidated balance sheet
176 Consolidated cash flow statement
178 Consolidated statement of changes in equity
179 Notes to the consolidated financial statements
179 Basis of preparation
188 Consolidated income statement disclosures
204 Consolidated Balance sheet disclosures
252 Other disclosures
277 Responsibility statement by the Executive Board
278 Independent Auditor’s Report Deutsche Börse Group | Annual report 2020
Executive and Supervisory Boards Management report Financial statements | Consolidated income statement Notes Further information
Consolidated income statement
for the period 1 January to 31 December 2020
Note 2020 20191) €m €m Sales revenue 4 3,519.3 3,054.2 Treasury result from banking business 4 196.6 247.7 Other operating income 4 40.5 13.5 Total revenue 3,756.4 3,315.4
Volume-related costs 4 – 542.6 – 379.4 Net revenue (total revenue less volume-related costs) 3,213.8 2,936.0
Staff costs 5 – 822.9 – 747.8 Other operating expenses 6 – 545.8 – 516.6 Operating costs – 1,368.7 – 1,264.4
Result from financial investments 8 24.3 6.7 Earnings before interest, tax, depreciation and amortisation (EBITDA) 1,869.4 1,678.3
Depreciation, amortisation and impairment losses 10 – 264.3 – 226.2 Earnings before interest and tax (EBIT) 1,605.1 1,452.1
Financial income 8 26.0 10.7 Financial expense 8 – 102.9 – 64.4 Earnings before tax (EBT) 1,528.2 1,398.4
Other tax – 0.5 – 0.4 Income tax expense 9 – 402.6 – 362.6 Net profit for the period 1,125.1 1,035.4 Net profit for the period attributable to Deutsche Börse AG shareholders 1,079.9 1,003.9 Net profit for the period attributable to non-controlling interests 45.2 31.5
Earnings per share (basic) (€) 21 5.89 5.47 Earnings per share (diluted) (€) 21 5.89 5.47
1) Previous year adjusted
172 152
€m €m
– – – – – – – – – – – – – – – – –
173
€m €m
174
€m €m – – – – Shareholders’ equity
175
i a ial state e ts o solidated ash lo state e t
ote €m €m – – – – – – – – – – – ash lo s ro o erati a ti ities e ludi ositio s – – ash lo s ro o erati a ti ities
– – – – – – – – – – – – ash lo s ro i esti a ti ities – –
– – – – – – – ash lo s ro i a i a ti ities –
et ha e i ash a d ash equi ale ts
176
€m €m
– – – – –
177
€m €m €m €m €m €m €m €m – – – – – – – – – – – – – – – – – –
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
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178 – –
Company information
“company”) has its registered office in Frankfurt/Main,
Basis of reporting
Deutsche Börse AG’s consolidated financial statements have been prepared in euros, the functional (€m
179 Deutsche Börse Group Annual report D AF – – strictly confidential
ecutive and upervisory Boards Management report Financial statements Further information published F guidelines, unless this is considered crucial to enhance transparency he annual financial statements of subsidiaries included in the consolidated financial statements have been prepared on the basis of the Group ide accounting policies based on F that are described in the follo ing hey ere applied consistently to the periods sho n
he listing of the composition of items of assets and liabilities and items of the consolidated statement of comprehensive income is based on materiality Deutsche Börse Group defines materiality as a share of appro imately percent of the relevant total
New accounting standards – implemented in the year under review
n the reporting period, the follo ing standards and interpretations issued by the A B and adopted by the uropean ommission ere applied to Deutsche Börse Group for the first time hey ere not applied earlier than re uired
tandard/Amendment/ nterpretation A , A Amendment Definition of Material an none material F Amendment Definition of a Business an none F , A , F B eform amendments of F , A and F an none F Amendment D related to rent concessions une none evised Frame ork an none material
New accounting standards – not yet implemented
he A B issued the follo ing ne or amended tandards and nterpretations, hich ere not applied in the consolidated financial statements, because endorsement by the as still pending or the application as not mandatory he ne or amended tandards and nterpretations must be applied for financial years beginning on or after the effective date ven though early application may be permitted for some standards, Deutsche Börse Group does usually not use any early application options
180 – –
–
–
IFRS 17 “Insurance Contracts”
181 – –
controlling interest shareholders are carried under “non interests” within equity. Where these are classified as “puttable instruments”, they are reported under “liabilities” at cost.
Currenc trans at on
Transactions denominated in a currency other than a company’s functional currency are translated into “retained earnings”.
“retained earnings”. When the relevant subsidiary is sold, these exchange rate differences are recognised
182 eutsche rse roup nnual report T – . . – strictly confidential
xecutive and upervisory oards anagement report inancial statements urther information
The following euro exchange rates of consequence to eutsche rse roup were applied
xchange rates wiss francs r. . . . . dollars . . . . ech oruna CZK (Kč) . . . . ingapore dollar . . . . ritish pound . . . .
ny goodwill arising on the acquisition of a foreign operation and any fair value ad ustments 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.
et n est ents n a ore n o erat on Translation differences arising from a monetary item that is part of a net investment in a foreign operation of eutsche rse roup are initially recogni ed in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.
Su s ar es an us ness co nat ons
eutsche rse and all subsidiaries directly or indirectly controlled by eutsche rse are included in the consolidated financial statements. eutsche rse 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.
nitial 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. oodwill is reported in subsequent periods at cost less accumulated impairment losses.
Deutsche Börse AG’s equity interests in subsidiaries, associates and joint ventures as at ecember included in the consolidated financial statements are presented in the list of shareholdings in note .
183 Deutsche Börse Grou Annual re ort D A T – . . – strictly confidential
xecutive and u ervisory Boards ana e ent re ort inancial state ents urther infor ation
c u s t ons
Fon center ur c S t er an Fon center n the third quarter of learstrea oldin AG, ran furt, Ger any a holly o ned subsdiary of Deutsche Börse AG co leted the acquisition of . er cent of the shares in ondcenter AG urich, it erland since rena ed learstrea und entre AG for a urchase rice of . illion st tranche . learstrea oldin AG ill acquire the re ainin . er cent of the shares in the course of a second transaction nd tranche . The acquisition of the nd tranche is ex ected to ta e lace in the second quarter of . Deutsche Börse Grou reco nised the related urchase rice liability of . illion in the category “Financial liabilities measured at amortised cost” when the 1st tranche was consolidated as of 30 September 2020 and so does not present an “Equalisation item for non controlling interests”. This liability is measured at the expected settlement a ount usin the effective interest ethod.
The ne entity ill be the centre of excellence for fund distribution services ithin the Deutsche Börse Grou and is resented in the se ent. o binin it ith the existin services fro learstrea und Des for erly isscanto unds creates a leadin rovider of fund services, ith reat benefits for the custo ers of B and learstrea .
Deutsche Börse Grou ex ects the transaction to deliver considerable syner ies both in ter s of revenue and cost effects. uch syner ies are reflected in articular by the ood ill resultin fro the transaction. The urchase rice allocation – reli inary as at the re ortin date – yielded the follo in effects
Good ill resultin fro the business co bination ith ondcenter AG
€m urchase rice in cash . ffective art of the cashflo hed e . ut o tions . Acquired ban balances – .
usto er relationshi s . oft are . ther non current assets . urrent assets . Deferred tax assets . ension rovisions less lan assets – . ther non current liabilities – . urrent liabilities – .
184 Deutsche Börse Group | Annual report 2020 Executive and Supervisory Boards Management report Financial statements Notes | Basis of preparation Further information
The full consolidation of Fondscenter resulted in an increase in net revenue of €14.1 million as well as an increase in earnings after tax amounting to €8.1 million. If the company had been fully consolidated as at 1 January 2020, this would have resulted in an increase in net revenue of €46.2 million as well as an increase in income after tax amounting to €11.1 million.
Quantitative Brokers, LLC, New York, USA (Quantitative Brokers) In the fourth quarter 2020 Deutsche Boerse Systems Inc., Chicago, USA (a wholly-owned subsidiary of Deutsche Börse AG) completed the acquisition of 72.8 per cent of the shares in Quantitive Brokers, LLC, New York, USA, for a purchase price of US$ 108.9 million. The parties also agreed on reciprocal options that may over time lead to a complete acquisition of the shares in Quantitative Brokers. Since Deutsche Börse Group can choose to fulfil these options with treasury shares, the shares are classified as equity and no financial liability is recognised.
Quantitative Brokers is an independent provider of sophisticated execution algorithms and data-based analytics applications for global futures, option and interest rate markets. The transaction is allocated to the Eurex segment. Deutsche Börse Group is expecting significant synergies from the transaction, particularly in revenue, which is reflected in the goodwill resulting from the transaction. The purchase price allocation – preliminary as at the reporting date – yielded the following effects:
Goodwill resulting from the business combination with Quantitative Brokers, LLC
Preliminary goodwill calculation 1 Dec 2020 €m Consideration transferred Purchase price in cash 90.5 Cash-Flow Hedge 0.5 Acquired bank balances – 8.1 Total consideration 82.9
Acquired assets and liabilities Customer relationships 29.5 Software 10.2 Property, Plant & Equipment 1.7 Current assets 3.0 Non-current liabilities – 1.4 Current liabilities – 8.4 Deferred tax liabilities on temporary differences – 4.1 Non-controlling interests – 11.7 Total assets and liabilities acquired 18.8
Goodwill (bot tax-deductible) 64.1
185 165 eutsche rse roup nnual report 2020 FT – 01.03.2021 – strictly confidential
Executi e and Super isory oards anagement report Financial statements Further information
The full consolidation of Quantitative Brokers resulted in an increase in net revenue of €1.3 million as well as a reduction of earnings after tax amounting to €– 0.2 million. f the company had been fully consolidated as at 1 anuary 2020 this would have resulted in an increase in net revenue of €18.8 million as well as a reduction of income after tax amounting to €– 3.3 million.
o a Inc e or S o a n the context of the acquisition of xioma nc ew or S xioma on 13 September 201 there was an ad ustment to the opening balance sheet with an effect on the preliminary goodwill within the 12 month period. This ad ustment resulted in a reduction of current financial assets and a corresponding increase in goodwill of € .3 million.
The final purchase price allocation is as follows
oodwill resulting from the business combination with xioma nc.
€m urchase price in cash .3 on controlling interests .0 cquired ban balances – 1.
ustomer relationships 3 .3 Trade names .0 Software 0.3 Software in de elopment 1 .2 ther non current assets 1 .2 ther current assets without cash 3 .2 eferred tax liabilities – 3 . ther non current and current liabilities – 1. ontract liabilties – 21.
Inst tut ona S are o er Ser ces Inc Roc e S ISS eutsche rse announced on 1 o ember 2020 that it had signed binding contracts for the acquisition of nstitutional Shareholder Ser ices nc. SS a leading pro ider of go ernance solutions ES data and analytics.
eutsche rse will hold a ma ority share of approximately 1 per cent of SS. The transaction is based on a aluation of S 2 2 million cash and debt free for 100 per cent of SS. eutsche rse financed €1 billion of the transaction with debt and the remainder with cash.
186 1 – –
ESG data. The two companies’ business is largely complementary a
ISS will be reported in Deutsche Börse Group’s
ssoc ates
for using the equity method upon subsequent measurement. Where Deutsche Börse Group’s share of the per cent, Deutsche Börse Group’s significant influence is exercised through the Group’s representation on the supervisory board or the board of
to better emphasise the Group’s growth areas. The former GSF (collateral management) segment has
greater transparency concerning the Group’s financial performance. The former item “Net interest income from banking business” has been renamed “Treasury result from banking business”. “Net from strategic investments” was renamed “Result from financial investments”, since this is a more
187 Deutsche Börse Group nnual report DR FT – . . – strictly confidential
Executive and Supervisory Boards anagement report Financial statements Further information
Notes on the consolidated income statement
. Net revenues
Reco n t on o nco e an e enses
Overall, Deutsche Börse Group’s net revenue comprised the following items
◼ Revenue, ◼ Treasury result from banking business, ◼ ther operating income, and ◼ olume related costs.
Re enue reco n t on This section comprises details on revenue from contracts with customers. This includes in particular revenue recognition, trade receivables as well as contract liabilities (see note concerning the balances of contractual liabilities). Revenue is recognised in Deutsche Börse Group’s segments as follows:
ure nanc a er at es Revenue in the derivatives business is generated primarily from equity index derivatives, interest rate derivatives and equity derivatives, fees that are charged for transactions with regard to the matching registration, administration and regulation of order book and off book transactions on Eurex Germany. Fees, as well as any reductions are specified in price lists and circulars. Rebates depend mainly on monthly volumes or the monthly fulfilment of liquidity provisioning obligations in certain products or product groups. Revenue for transactions in listed derivatives is recognised as soon as contracts are matched registered and there is no unfulfilled obligation towards the customer. Receivables are recognised if the agreed service is rendered at a specific point in time and the claim to the consideration solely depends on the course of time. Transaction fees are invoiced on a monthly basis and are payable when invoiced. Since discounts are generally granted on a monthly basis, the recognition of a contractual liability is not necessary. ayments are generally debited directly from the clearing member immediately after invoicing.
Fees are also collected for clearing and settlement services provided for off exchange (over the counter, T ) transactions, mainly comprising posting and administration fees. Fees for these transactions and the related discounts are also specified in price lists and circulars of Eurex learing G. In the case of T transactions, posting fees are recognised at novation on a monthly basis. These fees are recognised at a specific point in time namely, when the promised service is transferred at a specific point in time, and the entitlement to consideration depends solely on the passage of time. T administrative fees are recognised over time as the service is provided until the transaction has been closed, terminated or has matured. receivable is recognised monthly based on the usage within the respective month, provided that the respective position is still open at month end. In general, the payments are directly debited from the clearing member.
In addition, infrastructure fees are charged for the technical connections to the trading and clearing systems of Deutsche Börse Group. The customer has use of the company’s service and uses the service as it is performed over the life of the contract. s the smallest reporting period is the same as the contract term, the percentage of completion equals per cent. The infrastructure revenue generated from this is usually realised monthly with invoicing.
188 Deutsche Börse Group nnual report DR T – . . – strictly confidential
ecutive and upervisory Boards anagement report inancial statements urther information
ar et participants subscribe to real time trading and mar et signals or licence these services for their own use, processing, or dissemination. The customer simultaneously receives and consumes the benefits provided by the entity’s performance during the contract term. ustomers report their usage, and fees are charged in the month after usage. Deutsche Börse Group puts together monthly estimates that are based on the trend of the preceding months. Revenue estimates are revised when warranted by the circumstances. ncreases and decreases in estimated revenue are reflected in the consolidated income statement in the period in which the circumstances that give rise to the revision become nown by the management. Revenue is recognised based on the price specified in the price list. ustomers are invoiced on a monthly basis, and consideration is payable when invoiced.
co o t es ts product portfolio comprises contracts on power, natural gas and emission allowances, as well as freight rates and agricultural products. Revenue is generated primarily from fees that are charged for e change trading and clearing of commodity products. Transaction fees are specified in the price list. Rebates are granted primarily in the form of monthly rebates for the provision of a certain volume or level of li uidity. These types of rebates are dependent upon the total monthly volume or the monthly fulfilment of certain li uidity provision obligations. Revenue is recognised as soon as contracts are matched registered and there is no unfulfilled obligation towards the customer as the service has already been performed by this point in time. recognises receivables when the promised service is provided at a certain time and the entitlement to consideration depends solely on the passage of time. ost of the invoiced amounts are debited directly from the clearing members. nfrastructure fees are accounted for in the same way as described in the section “Eurex (financial derivatives)”.
ore n e c an e T is a provider of optimised services covering the entire trading process of foreign e change products and generates commission income from trading fees. n addition, T generates other fees in the form of access fees to use the trading platform, installation fees from the onboarding of customers on its trading platform, as well as user set up fees and fees for the programming and maintenance of necessary interfaces. Revenue is recognised when the contractually agreed service is provided to the customer. Revenue from the use of the platform and maintenance fees are recognised on a pro rata basis. ccess fees, transaction fees, as well as trading platform fees, contain different discount schedules on a monthly basis. uch discounts are considered accordingly in the month in which the services are rendered and reduce the sales revenue of such period. They are invoiced on a monthly basis. aintenance fees are invoiced on an annual basis.
189 eutsche rse roup nnual report – – strictly confidential
Executive and upervisory oards ana ement report inancial statements urther information
etra secur t es tra n s a eneral rule securities intended for tradin on the re ulated mar et of an furter ertpapierb rse ( the ran furt toc Exchan e) are sub ect to the admission and listin or inclusion resolved by FWB’s Exchange Management. Deutsche Börse AG, as the operator of the public sector exchan e char es fees for the admission listin inclusion and uotation of securities on the re ulated mar et ees char ed for the admission and inclusion of securities ith definite maturities on the re ulated mar et are realised usin the pro ected useful lives of the underlyin securities ccordin ly the fees char ed for the listin of securities on the re ulated unofficial mar et are realised usin the pro ected useful lives of the underlyin securities he method for measurin the percenta e of completion of the performance obli ation on the basis of pro ected useful lives is considered appropriate ithin the meanin of nvoicin is made on a uarterly basis and receivables are payable upon receipt of invoice
istin fees are levied for the activity of all bodies of hich supervise the tradin and the settlement of trades as ell as ensure the proper functionin of all tradin activities (permanent possibility to ma e use of exchan e facilities) istin fees are recurrin fees hich are char ed for a service that is delivered over time ccordin ly revenue is realised on a pro rata basis evenue from fees for listin s on the re ulated unofficial mar et is realised in a similar manner his revenue is presented under “Listing revenue”.
ontracts for tradin and clearin cash mar et products contracts for tradin data and mar et si nals and contracts for infrastructure services in the etra (securities tradin ) se ment are accounted for in the same ay as described in the section “Eurex (financial derivatives)”
C earstrea ost tra n learstream provides post tradin infrastructure and services it offers transaction settlement services as ell as administration and custody of securities he fees are calculated in accordance ith the prices set in the price list as ell as ith any relevant discounts ranted n accordance ith the eneral terms and conditions the customer authorises direct debitin and conse uently no financin component has been identified ustomers in the custody business receive the benefit from the service provided and consume it at the same time as the performance is fulfilled durin the contract period he revenue enerated from this is enerally realised on a monthly basis upon invoicin
ees collected for the administration of securities and for settlement services are reco nised hen the a reed service is provided to the customer his occurs hen instructions are received and the transactions are processed he service has been fulfilled at this point in time eceivables are reco nised if the a reed service is rendered at a specific point in time and the claim to the consideration solely depends on the course of time ince discounts are enerally ranted on a monthly basis the reco nition of a contractual liability is not necessary ustomers are invoiced on a monthly basis and consideration is payable hen invoiced
ia learstream eutsche rse roup provides a comprehensive ran e of lobal securities financin ( ) services ith the t o most prominent bein collateral mana ement and securities lendin services ustomers of collateral mana ement services simultaneously receive and consume the benefits with the company’s performance of the service. Revenue is recognised over time concurrent ith the provision of collateral mana ement services ervices in the securities lendin business on the other hand are provided at a specific point in time
190 Deutsche Börse Group Annua report DRAF – . . – strict y confidentia
Executive and upervisory Boards Management report Financia statements Further information
n addition, infrastructure fees are charged for the technica connections to the custody and c earing systems of Deutsche Börse Group. hey are accounted for in the same way as descri ed in the section “Eurex (financial derivatives)”.
IFS n est ent un ser ces he F segment provides services to standardise fund processing and to increase efficiency and safety in the investment fund sector. he services offered comprise order routing, sett ement and asset administration, as we as custody services. With the ac uisiton of Fondcenter AG now earstream Fund entre AG , F expands its range of services to inc ude the distri ution and p acement of domestic and foreign co ective investments schemes. ervices and distri ution agreements are conc uded with fund providers and asset managers. he so ca ed rai er Fee n is incurred these fees are presented in “Funds Distribution”. The trailer fee margin, which is the difference between the trailer fees paid by the fund providers for the distri ution of their funds and the trai er fees u timate y paid y the Fund entre to the distri ution partners, is inc uded in the et Revenue. n addition, service fees are recognised for the administration of the distri ution agreements and for granting access to the fund p atform. Revenue is recognised when the promised service is transferred to the customer. his occurs when instructions are received and the transactions are processed. he service has een fu fi ed at this point in time. Revenue is recognised ased on the price specified in the price ist and reduced y the corresponding re ates. ustomers are invoiced on a month y asis and consideration is paya e when invoiced.
ont o n e an ana t cs us ness he ontigo segment comprises the index and ana ytics usiness. he index offering ranges from ue chip to enchmar to strategy to sustaina i ity to smart eta indices. he Group generates revenue from ca cu ating and mar eting indices, which financia mar et participants use as under yings for financia instruments or as a enchmar for the performance of investment funds. n its ana ytics usiness ontigo offers its c ients ris ana ytics and portfo io construction too s.
ustomers in the index usiness simu taneous y receive and consume a of the enefits provided during the contract term. he recognition of revenue for index icences is ased on fixed payments, varia e payments usage ased vo umes most y assets under management , or a com ination of the two. For varia e payments, customers report their usage, and fees are invoiced in the uarter after usage monthly estimates are recognised. This is determined either based on the customer’s average usage over the previous twe ve months, ad usted to ta e into account current deve opments in the mar ets, or ased on the rea data in the mar ets on a customer eve . Revenue estimates are revised when warranted y the circumstances. ncreases and decreases in estimated revenue are ref ected in the conso idated income statement in the period in which the circumstances that give rise to the revision ecome nown y the management. For two fee components minimum fee and usage ased fee , a contract ia i ity is recognised and reduced each month ased on the usage that has een recognised each month. ustomers are invoiced on a uarter y asis, and consideration is paya e when invoiced.
191 Deutsche rse roup nnual report D FT – . . – strictly confidential
Executive and upervisory oards anagement report Financial statements Further information
ustomers of the analytics business either receive the right to access the intellectual property, or receive the right to use the intellectual property. The intellectual property licences are granted for software products, which are subse uently referred to as “SaaS Front Office” and “SaaS Middle Office”. Revenue generated with aa Front ffice fees is recognised at a specific point in time because all contractual obligations are fulfilled, and the customer obtains control of the asset, as soon as the licence ey is transferred to the customer. aa iddle ffice fees are recognised over time, i.e. the contractual term. Fees are also charged for the maintenance and servicing (summari ed as ain tenance ) of the software products, which are reali ed over the contract term. For this purpose, the transaction price for maintenance is calculated and allocated according to the expected cost plus a margin approach. This revenue is presented under “Axioma”.
reasur resu t ro an n us ness The treasury result from ban ing business stems mainly from investing surplus li uidity and from the fair value measurement of foreign exchange transactions. t also includes income from exchange rate differences resulting from finance instruments in the ban ing business. iven the currently prevailing interest rate anomaly, Deutsche rse roup also generates interest income from customer balances held at Deutsche rse roup (in a negative interest rate environment). Furthermore, this item comprises interest payments made on customer balances (positive interest rate environment) as well as cash investments (negative interest rate environment) and fees for providing customer credit lines. nterest income and interest expenses are calculated, allocated, and realised when due, with the applicable effective interest rate on a daily basis.
t er o erat n nco e ther operating income is income not attributable to the typical business model of Deutsche rse roup it is therefore not disclosed as part of revenue. ther operating income is usually realised when all chances and ris s have been transferred. ther operating income comprises, for instance, income from subleasing property, income from exchange rate differences in non ban ing business as well as the reversal of impairments recognised on trade receivables.
o u e re ate costs The “ olume related costs” item comprises expenses that are directly related to revenue and are directly dependent on the following items in particular
◼ The number of certain trade or settlement transaction, ◼ The custody volume or the lobal ecurity Financing volume, ◼ The volume of mar et data ac uired, ◼ The sales commission for the distribution of investments to the distribution partner, ◼ “Revenue Sharing” agreements or “maker taker” pricing models.
olume related costs are not incurrend if the corresponding revenue is no longer generated.
192 eutsche rse roup Annual report RAFT – . . – strictl confidential
xecutive and Supervisor oards Management report Financial statements Further information
omposition of net revenue part
€m €m €m €m uit index derivatives . . nterest rate derivatives . . uit derivatives . . OT learing . . Margin fees . . . . nfrastructure . . urex ata . . Other . .
o er derivatives . . . . o er spot . . as . . Annual fees . . Technical connection fees . . Market ata Services . . Other . . . .
Trading . . Other . .
Trading and clearing . . isting . . etra ata . . Regulator Services . . etra nfrastructure . .
revious ear ad usted.
193 – –
€m €m €m €m €m €m – – – – – – – – – – – – – – – – – –
– – – – – – – – – –
– – – – –
– – – – – – – – – – –
194 – –
€m €m €m €m
– –
– –
195 – –
€m €m €m €m €m €m – – – – – – – – – – – – – – – – –
– – – – – – – – – – –
– – – – – – – – – –
– –
– –
– –
196 – –
€m €m – – – – –
t er o erat n nco e
Other operating income of € million (2019: €13.5 exchange rate differences of€ €4.6 income from services of €1.3 €1.2 off receivables of €1.2 €– €0.7 €1.0 There was additional income of €19.
€m €m
efficiency programme of €36.4 €42.1 million).
197 – –
€m €m
€m €m €m €m
Thereof €–
Fees paid for “statutory audit services” rendered by KPMG AG Wirtschaftsprüfungsgesellschaft mainly
198 – –
“Net income from strategic investments” was renamed “ from financial investments”, since this is nised in profit or loss when the Group’s right to receive
€m €m – –
: €0.0 million).
expense are recognised using the effective interest method over the respective financial instrument’s term
199 eutsche rse Group nnual report – – strictl confidential
xecutive and upervisor oards anagement report inancial statements Notes on the consolidated income statement urther information
omposition of financial income
€m €m nterest income from financial assets measured at fair value through other comprehensive income nterest income from financial assets measured at amortised cost nterest income from financial assets measured at fair value through profit or loss nterest income on tax refunds ther interest income and similar income
omposition of financial expense
€m €m nterest expense from financial assets measured at amortised cost nterest expense from financial lia ilities measured at amortised cost ransaction cost of financial lia ilities measured at amortised cost nterest expense on taxes nterest expense on lease lia ilities xpense of the unwinding of the discount on pension provisions ther interest expense
ncome tax expense
eutsche rse Group is su ect to the tax laws of those countries in which it operates and generates income f it is pro a le that the tax authorities will not accept the disclosed amounts or the legal assessments on which the Group’s tax declarations are ased uncertain tax positions , tax lia ilities are recognised ased on the est possi le estimate of expected cash outflows ax assets are recognised if it is considered li el that the will e realised he discretion in assessing uncertain tax positions is reexercised if there is a change in the underl ing facts or their legal assessment e g change in case law
eferred tax assets and lia ilities are computed using the alance sheet lia ilit approach he deferred tax calculation is ased on temporar differences etween the carr ing amounts of assets and lia ilities in the financial statements and their tax ase that will lead to a future tax lia ilit or enefit when assets are used or sold or lia ilities are settled hese differences are used to calculate deferred tax assets or lia ilities
he deferred tax assets or lia ilities are measured using the tax rates that are currentl expected to appl when the temporar differences reverse, ased on tax rates that have een enacted or su stantivel enacted the reporting date eferred tax assets are recognised for the unused tax loss carr forwards onl to the extent that it is pro a le that future taxa le profit will e availa le eferred tax assets and deferred tax lia ilities are offset where a legall enforcea le right to set off current tax assets against current tax lia ilities exists, and the deferred tax assets and deferred tax lia ilities relate to income taxes levied the same taxation authorit
200 – –
€m €m – – – – – – –
€m €m – – – – – –
tax expense was reduced by €0.3 million in the reporting year by utilization of previously ). Deferred tax income of €2.4 million
201 – –
€m €m €m €m – – – – – – – – – – – – – – – – – – – – – – – – – –
“Presentation of Financial Statements”.
recognised amounted to €27.2 million ( : €39.5m). These unused € €, other jurisdictions €
202 – –
€m €m – – – – – –
For a more accurate presentation, tax income of €10.0 million has been reclassified from „effects of tax exempt income“ to „other“
203 – –
Reco n t on an easure ent
line method over the asset’s expected useful life. The useful life of internally developed software is
I a r ent tests
204 eutsche rse roup nnual report T – . . – strictly confidential
xecutive and upervisory oards ana ement report inancial statements otes on the consolidated statement of urther information
rrespective of any indications of impairment intan i le assets with indefinite useful lives and intan i le assets not yet availa le for use must e tested for impairment at least once a year. mpairment tests for roups of s with allocated oodwill are carried out on eptem er every financial year. f the estimated recovera le amount of the asset or is lower than the respective carryin amount an impairment loss is reco nised and the net carryin amount of the asset or respectively is reduced to its estimated recovera le amount.
dditional impairment testin was carried out for intan i le assets as of une in response to the ovid pandemic. t did not identify any impairment. t the ac uisition date oodwill is allocated to the or roups of s that is are expected to create syner ies from the relevant ac uisition. f chan es arise in the structure of s for example throu h a new se mentation oodwill is allocated ta in into account the relative fair values of the newly defined s. rrespective of any indications of impairment these items must e tested for impairment at least annually at the lowest level of impairment at which eutsche rse roup monitors the respective oodwill. n impairment loss is reco nised if the carryin amount of the or roups of s to which oodwill is allocated includin the carryin amount of that oodwill is hi her than the recovera le amount of this roup of assets. The impairment loss is first allocated to the oodwill then to the other assets in proportion to their carryin amounts.
The recovera le amount of the roups of s was determined ased on the fair value less costs to sell. The value in use was only determined if the fair value less costs to sell did not exceed the carryin amount. iven that no active mar et was availa le for the roups of s the determination of fair values less costs to sell was ased on the discounted cash flow method level input factors . The detailed plannin period covers a respective time period of five years for roups of s which have een allocated an asset with an indefinite useful life such time period ends in perpetuity. ndividual costs of capital are determined for each roup of s for the purpose of discountin pro ected cash flows. These capital costs are ased on data incorporatin eta factors orrowin costs as well as the capital structure of the respective peer roup. ricin tradin volumes assets under custody mar et share assumptions or eneral usiness development assumptions are ased on past experience or mar et research. ther ey assumptions are mainly ased on external factors and enerally correspond to internal mana ement plannin . i nificant macroeconomic indicators include for instance e uity index levels volatility of e uity indices as well as interest rates exchan e rates rowth unemployment levels and overnment de t. hen calculatin value in use the pro ections are ad usted for the effects of future restructurin s and performance investments if appropriate.
t each reportin date the roup assesses whether there are any indications that an impairment reco nised for non current assets in previous years except oodwill no lon er applies. f this is the case the carryin amount of the asset is increased and the difference is reco nised in profit or loss. The maximum amount of this reversal is limited to the carryin amount that would have resulted if no impairment loss had een reco nised in previous periods. eutsche rse roup does not reverse any oodwill impairments.
205 – –
€m €m €m €m €m €m – – – – – – – – – – – – – – – – – – – –
– – – – – – – – – – –
206 – –
€m €m
So t are a ents on account an so t are n e e o ent
Total development costs came to €158.2 million in 2020 (2019: €142.2 million), of which €104.0 capitalised (2019: €97.5 million).
totalling €8.2 million (2020: €1.8 million). They are shown in the item “Depreciation, amortisation and impairment losses” and relate to the following assets:
▪ n impairment loss of €2.6 million (recoverable amount: negative) in the fourth quar ▪ impairment loss of €1.0 million (recoverable amount: negative) in the fourth quarter 2020 ▪ arter of €0.4 million (recoverable amount: negative) relates ▪ Regulatory Services GmbH and the loss of its clients was the reason for the impairment loss of €4.
207 – –
oo an ot er ntan e assets ro us ness co nat ons
€m €m €m €m €m €m €m €m €m €m – – – – – – – – – – – – –
€m €m €m €m €m – – – – – – – – – – – – – – – –
208 – –
Mio. € – – – – – – –
– – – – –
209 – –
Mio. € – – – – – – – – –
210 – –
easure ent o urc ase ro ert ant an e u ent
easure ent o r t o use assets
̶ ̶
211 – –
€m €m €m €m €m €m €m – – – – – – – – – – – – – – – – – – – – – – –
– – – – – – – – – – – – – – – – – –
212 – –
F nanc a assets
Reco n t on an ereco n t on derecognised at the trade date. Purchases and sales of debt instruments classified as “at amortised cost”
In t a easure ent an c ass cat on
◼ At fair value (either at “fair value through other comprehensive income” (FVOCI) or “fair value through profit or loss” (FVPL)) ◼
213 eutsche rse roup Annual report AF – . . – strictl confidential
ecutive and upervisor oards anagement report Financial statements otes on the consolidated statement of financial position Further information
Su se uent easure ent o e t nstru ents eutsche rse roup allocates each debt instrument to one of the follo ing categories
◼ Amortised cost (aAC): Assets allocated to the “hold” business model and whose cash flows consist of solel pa ments of principal and interest are measured at amortised cost. Interest income from these financial assets is measured using the effective interest method. ains and losses from derecognition impairment and e change rate movements are recognised through profit or loss. easurement effects are sho n in ban ing business or non ban ing business depending on ho the financial assets are allocated. For financial assets from ban ing business all measurement effects are sho n in the treasur result from ban ing business. Interest income from the non ban ing business are sho n in the financial result. All other effects of non ban ing business are presented in result from financial investments. All effects relating to the measurement of trade receivables are sho n in other operating income and e penses. ◼ Fair value through other comprehensive income (FVOCI): Investments in debt instruments allocated to the “hold and sell” business model and hose cash flo s consist solel of pa ments of principal and interest are measured at fair value through other comprehensive income. Impairments on these debt instruments are recognised in profit or loss in the result from financial investments. On disposal of these debt instruments the cumulative gains or losses in the revaluation reserve are rec cled to profit or loss in the result from financial investments. Interest income from fi ed income securities in this categor are sho n in the financial result. ◼ Fair value through profit or loss (FVPL): Financial assets that do not meet the criteria for measurement at amortised cost or at FVOCI are measured at FVPL and their measurement effects are sho n in result from financial investments. istributions from fund interests are also sho n in result from financial investments. Interest income from fi ed income securities in this categor are sho n in the financial result.
Su se uent easure ent o e u t nstru ents uit instruments are al a s subse uentl measured at fair value. ince eutsche rse roup has used the irrevocable FVOCI option for all e uit instruments as of the reporting date gains and losses are recognised in other comprehensive income. hen the item is derecognised the gains and losses are not rec cled through profit or loss but reclassified to retained earnings. ividends from these financial investments are sho n in net income from financial investments.
214 eutsche se ou Annual e o t A – – st ictl confidential
ecuti e and u e iso oa ds ana ement e o t inancial statements otes on the consolidated statement of financial osition u the info mation
Impairment As a ule an im ai ment fo e ected c edit losses fo debt inst uments e o ted at amo tised cost and at fai alue th ou h othe com ehensi e income is dete mined usin the th ee sta e im ai ment model in he losses e esent a fo wa d loo in measu ement of futu e losses that a e ene all sub ect to estimates
Stage 1: he im ai ment u on initial eco nition is measu ed on the basis of the e ected losses fo the ne t twel e months Stage 2: f a financial asset s c edit is has inc eased si nificantl the e ected c edit loss is dete mined o e the enti e te m A si nificant inc ease in c edit is is dete mined indi iduall usin inte nal atin s Stage 3: edit im ai ed financial assets a e allocated to ta e and the im ai ment is based on the ful lifetime e ected c edit losses his is the case if the e a e obse able data of si nificant financial difficulties and the e is a hi h is of default e en if the definition of a default has not et been met
f the c edit is fo debt inst uments at amo tised cost and at fai alue th ou h ofit o loss is low in absolute te ms as at the e o tin date the emain in ta e e en if the default is has inc eased
eutsche se ou has identified the followin two t i e s to identif an e ent of default and which cause a t ansfe to sta e acco din l
Legal default event: a cont actual a tne is unable to fulfil its cont actual obli ation acco din to an a eement with eutsche se ou due to insol enc ban u tc Contractual default event: a cont actual a tne is unable o unwillin to fulfil in a timel manne one o mo e of its scheduled cont actual obli ations acco din to an a eement with eutsche se ou he non fulfilment of the cont actual obli ation could otentiall esult in a financial loss fo eutsche se ou
ithin eutsche se ou the e ected c edit losses fo t ade ecei ables a e measu ed based on the sim lified a oach which e ui es lifetime e ected losses to be eco nised f om initial eco nition of a ecei able o t ade ecei ables a default is assumed fo amounts which a e o e due fo mo e than da s
Financial Lia ilities
ecognition and derecognition inancial liabilities a e eco nised when a ou com an becomes a a t to the inst ument u chases and sales of e uities ia the cent al counte a t u e lea in A a e eco nised at the settlement date analo ous to financial assets inancial liabilities a e de eco nised when the cont actual obli ation has been e tin uished because it has been discha ed o cancelled o has e i ed
Financial lia ilities measured at amortised cost inancial liabilities not held fo t adin a e ene all accounted fo at amo tised cost he bo owin costs associated with the lacement of financial liabilities a e included in the ca in amount and accounted fo usin the effecti e inte est method if the a e di ectl att ibutable iscounts a e amo tised o e the te m of the liabilities usin the effecti e inte est method iabilities to non cont ollin sha eholde s fo the ac uisition of non cont ollin sha es settled in cash o anothe financial asset a e eco nised at the esent alue of the futu e u chase ice ubse uent measu ement eco nises th ou h ofit o loss the effect on esent alue of acc ued inte est on the financial obli ation and all
215 – –
nanc al l a l t e ea ured at fa r value t roug rof t or lo
Deutsche Börse Group’s exposure to various risks associat
re entat on and nett ng of f nanc al a et and l a l t e
er vat ve f nanc al n tru ent and edge account ng
criteria, they are classified as “held for trading” for accounting purposes and are remeasured at the end
216 Deutsche Börse Group nnual report D – – strictly confidential
xecutive and upervisory Boards anagement report inancial statements otes on the consolidated statement of financial position urther information
Deutsche Börse Group uses foreign exchange derivatives as hedging instruments to hedge existing or expected transactions against foreign exchange risks hen a hedging transaction takes place the economic relationship et een the hedging instrument and the hedged item is documented in accordance ith the statutory re uirements
Ca flo edge t at ual f for edge account ng he effective portion of changes in the fair value of derivatives designated as cash flo hedges is sho n in the reserve for cash flo hedges as part of other comprehensive income it is limited to the cumulative change in the fair value of the hedged item on the asis of its present value since the hedging transaction Gains or losses on the ineffective portion are recognised directly through profit or loss, either in the treasury result from anking usiness or in the result from financial investments f for ard contracts are used to hedge planned transactions the Deutsche Börse Group designates the entire change in the fair value of the for ard, including the for ard component, as a hedging instrument n this case the gains or losses from the effective portion of the change in fair value for the entire future transaction are recognised in the reserve for cash flo hedges as a component of e uity f the Group uses futures to hedge existing receiva les and lia ilities, only the spot component of the future is designated Gains or losses from the effective portion of the change in the spot component of the future are sho n in the reserve for cash flo hedges hanges in the for ard component of the hedging instrument that relates to the hedged item are considered to e hedging costs and sho n separately in the reserve for hedging costs in other comprehensive income he fair value of the for ard component not included in the hedging relationship at the time it is designated is ritten off pro rata temporis over the period of the hedging relationship he amount ritten do n is recycled from the reserve for hedging costs to profit or loss
umulative amounts in the reserve for cash flo hedges are reclassified according to the follo ing methodology ◼ f the cash flo hedge serves to hedge plannend transactions, the amount from the hedging instrument that has accumulated in other comprehensive income up to the ac uisition date is derecognised from the reserve and treated as part of the ac uisition costs ◼ or cash flo hedges of existing receiva les and lia ilities, the amount that has accumulated in the reserve for cash flo hedges is reclassified to profit or loss in the periods in hich there are changes in the hedged future cash flo s recognised through profit or loss ◼ f this amount is a loss, ho ever, and the assumption is that all or part of this loss cannot e recouped in future periods, then this amount is recognised immediately through profit or loss
he effectiveness of the hedging relationship is assessed at the eginning and over the entire duration of the hedging relationship to ensure that there is an economic relationship et een the hedging instrument and the hedged item o hedge foreign currency risks, hedging relationships are esta lished in hich all relevant contractual parameters of the hedging transaction match exactly ith those of the hedged item neffectiveness may arise in the hedging of foreign currency transactions if the timing of the planned transaction changes compared ith the original estimate neffectiveness due to changes in the default risk of Deutsche Börse Group or the counterparty to the hedging transaction is deemed to e negligi le ffectiveness is measured regularly as at the reporting dates he Group uses the hypothetical derivative method for this purpose
217 – –
nanc al a et ea ured at fa r value t roug ot er co re en ve nco e
“Equity investments at fair value through other comprehensive income” “Financial assets at fair value through other comprehensive income”, because allocated to the “Hold and sell” business model are
€m €m
amounting to €0.5 million expired in Debt securities amounting to €0.5 million are classified as impairments came to less than €0.1 million.
218 eutsche rse roup nnual report F – – strictly confidential
E ecutive and upervisory oards anagement report Financial statements otes on the consolidated statement of financial position Further information
mounts recognised in profit or loss and other comprehensive income
€m €m trategic investments – ebt instruments – ividends related to investments derecognised during the period ividends related to investments held at the end of the reporting period
1) Of which €0.1 million (2019: nil are attributable to non controlling interests
he disposal of one strategic investment resulted in a gain of €0.1 million ( : € million , recognised outside profit or loss in retained earnings
nanc al a et and l a l t e ea ured at a ort ed co t
omposition of financial assets at amortised cost
€m €m €m €m €m €m of hich e pected losses – – – – Fi ed income securities , , everse repo transactions , , , , alances on nostro accounts , , , , oney mar et lendings , , , , ustomer overdrafts from settlement business eceivables from balances argin calls ther of hich e pected losses – – – – –
n fi ed income securities in the amount of € million € million e pired
219 – –
–
€m €m €m €m €m €m
the course of this redemption offer €284.9 €315.1 million as at the termination date. The entire redemption of the bond gave rise to a negative effect of €3. hybrid bond with a nominal volume of €6
Clearstream Banking AG issued a bond with a nominal volume of €350.0 million and an interest
220 – –
Ca de o t ar et art c ant
€m €m
nanc al a et and l a l t e ea ured at fa r value t roug rof t or lo
nanc al n tru ent of t e central counter art e
◼ ◼ ◼
“Traditional” options, for which the buyer must pay the option premium in full upon purchase, are
221 – –
€m €m
Financial liabilities of € December 2019: €890.0 million) were eliminated because of
t er f nanc al a et and l a l t e ea ured at fa r value t roug rof t or lo
“Derivatives” “ value through profit or loss” or “ measured at fair value through profit or loss”
€m €m €m €m €m €m
222 s s – – s
s s s s s s s s
s s s s less than eight months with a nominal amount of €2,524.2 million (31 December : €2,965.6 million with a term of less than seven months). Thereof €510.3 million (31 December : €827 s attributable to derivatives with a positive fair value and thereof € : €2,138.6 s s s s s s s s s s s s s s s s s s
s s ss
€m €m ss s s s s ss s s – ss ss s s ss s s s ss s s ss –
Ca flo edge t at ual f for edge account ng s s s s s s s s s s s s s s s s s
223 – –
Carrying amount in €m (non Change in fair value of the hedging instrument in €m €m – instruments (including forward points) in Fr./€ Carrying amount in €m (non Change in fair value of the hedging instrument in €m – €m Weighted average hedge rate for hedging instruments (including forward points) in Fr./€ Carrying amount in €m (current financial liabilities measured at fair value Change in fair value of the hedging instrument in €m – €m Weighted average hedge rate for hedging instruments (including forward points) in US$/€
224 – –
€m €m €m €m – – – – – – – – –
a r value erarc
◼ ◼ ◼
225 – –
€m €m €m €m
226 – –
€m €m €m €m
227 – –
€m €m €m €m – – – – – – – – – – – – – – – – – – – – – – – –
228 – –
fair value of € million (31 December 2019: €
bonds issued by Deutsche Börse Group have a fair value of € € struments is based on the debt instruments’ quoted prices. Due to insufficient market liquidity, the liabilities were allocated to Level 2. The financial instrument’s carrying amount for all other items
ff ett ng f nanc al n tru ent
€m €m €m €m €m €m – – – – – – – – – – – –
Ca or ecur t e eld a collateral central counter art e
229 Deutsche rse roup nnual report 2 2 D T – . .2 2 – strictly confidential
ecutive and upervisory oards anagement report inancial statements otes on the consolidated statement of financial position urther information
n addition to these daily collateral payments, each clearing member must make contributions to the respective default fund for further details, see the risk report in the combined management report . ash collateral is reported in the consolidated balance sheet under “cash deposits by market participants” and the corresponding amounts under “restricted bank balances”.
ecurities 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. ecognition at the secure party is only permissible if the clearing member providing the transfer is in default according to the underlying contract.
The aggregate margin calls based on the e ecuted transactions and default fund requirements after haircuts was € 2, . million as at the reporting date 2 : €52,889.4 million). ollateral totalling €79,747.6 million (2 : €61,711.0 million ) was actually deposited.
omposition of collateral held by central counterparties
€m €m ash collateral cash deposits , . 2 , . ecurities and book entry securities collateral2 , . ,22 .
The amount includes the clearing fund totalling €4,600,8 million (2019: € 2, . million . 2 The amount includes the clearing fund totalling €2,294.1 million (2019: € 2,055.2 million). The collateral value is determined on the basis of the fair value less a haircut
. ther current assets
omposition of other current assets
€m €m ther receivables from transactions commodities . 2 . repaid e penses . . Ta receivables e cluding income ta es 2 . . nterest receivables on ta es 2 . . iscellaneous . .
230 2 eutsche rse roup nnual report – . . – strictly con idential
ecuti e and uper isory oards anagement report inancial statements otes on the consolidated statement o inancial position urther in ormation
. uity
hanges in e uity are presented in the consolidated statement o changes in e uity. s at ecember the number o no par alue registered shares o eutsche rse in issue as ecember .
ub ect to the agreement o the uper isory oard the ecuti e oard is authorised to increase the subscribed share capital by the ollo ing amounts
omposition o authorised share capital Existing shareholders’ pre uthorised share capital ay ay n.a. uthorised share capital ay ay or cash at an issue price not signi icantly lo er than the stock e change price up to a ma imum amount o per cent o the nominal capital. against non cash contributions or the purpose o ac uiring companies parts o companies interests in companies or other assets. uthorised share capital ay ay n.a. uthorised share capital ay ay n.a.
Shares may only be issued, excluding shareholders’ pre empti e subscription rights pro ided that the aggregate amount o ne shares issued e cluding shareholders pre empti e rights during the term o the authorisation including under other authorisations does not e ceed per cent o the issued share capital. Shares may only be issued, excluding shareholders’ pre empti e subscription rights pro ided that the aggregate amount o ne shares issued e cluding shareholders pre empti e rights during the term o the authorisation including under other authorisations does not e ceed per cent o the issued share capital.
Cont ngent ca tal
y resolution o the nnual eneral eeting o ay the ecuti e oard is authorised sub ect to the consent o the uper isory oard to issue in the period until ay on one or se eral occasions con ertible bonds and or arrant linked bonds or a combination o such instruments ith a total principal amount of up to €5,000,000,000 with or without a limited term and to grant holders or creditors o such bonds con ersion or option rights respecti ely to ac uire ne no par alue registered shares in Deutsche Börse AG representing a notional interest in the share capital of up to €17,800,000, as stipulated in the terms and conditions o con ertible bonds or the terms and conditions o the arrants attaching to the arrant linked bonds.
he ecuti e oard is authorised sub ect to the consent o the uper isory oard to e clude the subscription rights o the shareholders in relation to bonds ith con ersion or option rights to ac uire shares in eutsche rse in the ollo ing cases he ecuti e oard is authorised sub ect to the approval of the Supervisory Board, to exclude shareholders’ pre empti e rights to bonds ith con ersion or option rights to shares o eutsche rse in the ollo ing cases i to a oid ractional amounts ii hen the issue price o a bond is not materially belo the theoretical air alue determined in accordance ith recognised inancial techni ues and the total number o shares attributable to these bonds does not e ceed per cent o the share capital iii to grant the holders o con ersion or option rights to shares o eutsche rse subscription rights to o set any diluti e e ects to the same e tent as they ould be entitled to recei e a ter e ercising these rights.
231 eutsche B rse roup nnual report – – strictly confidential
xecutive and Supervisory Boards anagement report inancial statements otes otes on the consolidated statement of financial position urther information
he bonds may also be issued by companies based in ermany or abroad that are affiliated ith eutsche B rse ithin the meaning of sections ff of the tiengeset t , erman Stoc Corporation Act). Accordingly, the share capital was contingently increased by up to €17, , contingent capital o date, the authorisation to issue convertible bonds and or bonds ith arrants has not been exercised
here ere no further subscription rights to shares as at ecember or ecember
evaluat on ur lu
evaluation surplus
e ognition o hidden E it reser es ro in est ents e ined air al e eas red ash lo ene it eas re ent at hedges o ligations ther otal €m €m €m €m €m €m alan e as at an gross – – – hanges from defined benefit – – – obligations air value measurement – – alan e as at e gross – – – hanges from defined benefit – – – obligations air value measurement – – alan e as at e gross – – – –
e erred taxes alan e as at an – dditions eversals – – alan e as at e – – dditions eversals – – alan e as at e –
alan e as at an net – – – alan e as at e net – – – alan e as at e net – – – –
eta ned earn ng
The “retained earnings” item includes exchange rate differences amounting to €– million € – million). In the reporting year €86.1 million ( : €2.1 million as transferred from currency translation for foreign subsidiaries and €2.9 million ( : €0.7 million) in connection with the hedging of foreign exchange ris s
232 – –
Shareholders’ equity and appropriation of ne
of €1,161.9m ( : €825.9m) and equity of €3,511.8m ( : €2,867.5m). Deutsche Börse AG distributed € € (€2.90 per
€m – Distribution of a regular dividend to the shareholders of €3.00 per share for 183,521,257 no
– –
dividend of €3.00 per eligible share, an amended resolution for the appropriation of distributable pro
ef ned enef t en on lan
233 euts he rse roup nnual report – – stri tly onfidential
e uti e and Super isory oards ana e ent report inan ial state ents urther infor ation
he fair alue of plan assets is dedu ted fro the present alue of pension o li ations refle tin the asset eilin rules if there are any e ess plan assets his results in the net defined enefit lia ility or asset et interest e pense for the finan ial year is al ulated y applyin the dis ount rate deter ined at the e innin of the finan ial year to the net defined enefit lia ility deter ined as at that date
he rele ant dis ount rate is deter ined y referen e to the return on lon ter orporate onds ith a ratin of at least oody’s n estors Ser i e S lo al atin s it h atin s and S on the asis of the infor ation pro ided y loo er and a aturity that orresponds appro i ately to the aturity of the pension o li ations oreo er the onds ust e deno inated in the sa e urren y as the underlyin pension o li ation easure ent of the pension o li ations in euros is in prin iple ased on a discount rate which is determined according to the Towers Watson “GlobalRate:Link” ethodolo y updated in line ith the urrent ar et trend
he a tuarial ains or losses and the differen e et een the e pe ted and the a tual return or loss on plan assets are re o nised in other o prehensi e in o e in the re aluation surplus hey result fro han es in e pe tations ith re ard to life e pe tan y pension trends salary trends and the dis ount rate
ther lon ter enefits for e ployees and e ers of e e uti e oards total disa ility pension transitional pay ents are also easured usin the pro e ted unit redit ethod tuarial ains and losses and past ser i e ost are re o nised i ediately and in full throu h profit or loss
he defined enefit o li ations of the o panies of euts he rse roup relate pri arily to final salary arran e ents and pension plans ased on apital o ponents hi h uarantee e ployees a hoi e of either lifelon pensions or apital pay ents on the asis of the final salary paid euts he rse roup uses e ternal trust solutions to o er so e of its pension o li ations
et lia ility of defined enefit o li ations
€m €m €m €m €m resent alue of defined enefit o li ations that are at least partially funded air alue of plan assets – – – – – resent alue of unfunded o li ations pa t of ini u fundin require ent asset eilin
234 eutsche rse Grou nnual re ort R T – – strictl con idential
ecuti e and u er isor oards anagement re ort inancial statements urther in ormation
The de ined bene it lans com rise a total o bene iciaries : The resent alue o de ined bene it obligations can be allocated to the bene iciaries as ollows:
llocation o the resent alue o the de ined bene it obligation to the bene iciaries
€m €m €m €m €m ligible current em lo ees ormer em lo ees with ested entitlements ensioners or sur i ing de endants
ssentiall the retirement bene its encom ass the ollowing retirement bene it lans:
ecut ve oard of rou co an e er an and Lu e ourg ndi idual commitment lans e ist or e ecuti e board members o certain Grou com anies the are based on the lan or e ecuti es described in the second aragra h below i e in each calendar ear the com an ro ides an annual contribution to a ca ital com onent calculated in accordance with actuarial rinci les The bene it assets e ual the total o the ac uired ca ital com onents o the indi idual ears and are con erted into a li elong ension once the bene its all due n addition retirement bene it agreements are in lace with members o the e ecuti e boards o Grou com anies under which the are entitled to ension bene its u on reaching the age o and ollowing rea ointment When the term o o ice began the re lacement rate was er cent o indi idual ensionable income t rose b er centage oints with each rea ointment u to a ma imum o er cent o ensionable income Details of the pension commitments for members of Deutsche Börse AG’s Executive Board can be found in the remuneration re ort
er an There is an em lo ee unded de erred com ensation lan or em lo ees o certain eutsche rse Grou com anies in German who oined rior to anuar nder this lan it is ossible to con ert ortions o uture remuneration entitlements into bene it assets o e ual alue which bear interest o er cent a The bene its consist o a ca ital a ment made in e ual annual instalments o er a eriod o three ears u on the reaching the age o or at an earlier date due to disabilit or death
n the eriod rom anuar to une e ecuti es in German were o ered the o ortunit to artici ate in the ollowing ension s stem based on ca ital com onents: the bene it is based on annual income recei ed com osed o i ed annual salar and the ariable remuneration The artici ating com anies ro ide an amount corres onding to a s eci ic ercentage o this eligible income e er ear This amount is multi lied b a ca italisation actor de ending on age resulting in the “annual capital component”. The benefit assets equal the total of the acquired capital com onents o the indi idual ears and are con erted into a li elong ension once the bene its all due This bene it lan was closed to new sta on une the e ecuti es who were em lo ed in the abo e eriod can continue to earn ca ital com onents
235 – –
Lu e ourg contributions to an “association d'épargne pension” (ASSEP) organi
236 eutsc e rse roup Annua report A – – strict con identia
E ecuti e and Super isor oards anage ent report inancia state ents urt er in or ation
anges in net de ined bene it ob igations
€m €m €m €m €m €m – – anges t roug business co binations urrent ser ice cost nterest e pense (inco e) – – Past ser ice cost and gains and osses on sett e ents – – eturn on p an assets e c uding a ounts a read recognised in interest inco e – – Ad ust ents to de ograp ic assu ptions Ad ust ents to inancia assu ptions E perience ad ust ents – – – – E ect o e c ange rate di erences – E ect o e c ange rate di erences – ontributions E p o ers – – – – P an participants – – ene it pa ents – – Sett e ents a and ad inistration costs – – anges in t e basis o conso idation – – –
) Thereof €– i ion ( : €– i ion) in t e o setting ite or non contro ing interests
e basis or deter ining t e discount rate as re ined in t e inancia ear A odi ied bond se ection or t e re e ant port o ios o ig ua it corporate bonds ic is used as t e basis or deter ining t e discount rate resu ted in a discount rate o percent as o ece ber it out t is c ange t e discount rate ou d a e been percent is ou d a e ed to an increase in t e present a ue of the defined benefit obligation of €29.5 million and, as a result of the adjustments to the inancia assu ptions to a corresponding actuaria oss be ore ta in ot er co pre ensi e inco e
n employees converted a total of €4.8 million of their variable remuneration into deferred co pensation bene its ( : €6.4 i ion)
237 – –
u t on
In Germany, the “2018 G” mortality tables (generation tables) developed by Prof Klaus Heubeck are
Sen t v t anal
€m €m – – – – – – – – – –
238 eutsche rse Group nnual report 2020 – 01 0 2021 – strictly confidential
ecutive and upervisory oards anagement report inancial statements urther information
Co o t on of lan a et
er an In Germany, plan assets are held by a trustee in safekeeping for individual companies of eutsche rse Group and the beneficiaries. At the company’s instruction, the trustee uses the funds transferred to ac uire securities, ithout any consulting by the trustee he contributions are invested in accordance ith an investment policy, hich may be amended by the companies represented in the investment committee. The trustee may refuse to carry out instructions if they are in conflict with the fund’s allocation rules or the payment provisions In accordance ith the investment policy, a value preservation mechanism is applied investments can be made in different asset classes
Lu e ourg In u embourg, the oard of irectors of the learstream Pension und is responsible for determining the investment strategy, ith the aim of ma imising returns in relation to a benchmark his benchmark is per cent derived from the return on five year German federal government bonds and 2 per cent from the return on the 0 Inde ccording to the investment policy, the fund may only invest in fi ed income and variable rate securities, as ell as listed investment fund units it may hold cash, including in the form of money market funds
omposition of plan assets
€m €m Government bonds 211 2 ultilateral development banks 0 0 orporate bonds 1 8 10 2 – – tock inde futures 2 0 Interest rate futures 0 1 – 0 8
ualifying insurance policies 1 8 8 21 0 ash 1 11 1 2
s at 1 ecember 2020, the plan assets did not include any financial instruments of the Group (201 ero) either did they include any properties or other assets used by companies in eutsche rse Group
In addition to the general actuarial risks, the risks associated ith the defined benefit obligations relate especially to financial risks in connection ith the plan assets, including in particular counterparty credit and market risks
239 21 eutsche rse Group Annual report A T – . . – strictly confidential
ecuti e and uper isory oards ana ement report inancial statements urther information
ar et r The return on plan assets is assumed to be the discount rate determined on the basis of corporate bonds with an AA ratin . f the actual rate of return on plan assets is lower than the discount rate used, the net defined benefit liability increases accordin ly. f olatility is low, the actual return is further e pected to e ceed the return on corporate bonds with a ood ratin in the medium to lon term. The le el of the net liability is influenced by the discount rates in particular, whereby the current low interest rates contribute to a relati ely hi h net liability. eutsche rse Group considers the share price ris resultin from deri ati e positions in e uity inde futures in the plan assets to be appropriate. The company bases its assessment on the e pectation that the o erall olume of payments from the pension plans will be mana eable in the ne t few years, that the total amount of the obli ations will also be mana eable and that it will be able to meet these payments in full from operatin cash flows. Any amendments to the in estment policy ta e into account the duration of the pension obli ation as well as the e pected payments o er a period of ten years.
nflat on r ossible inflation ris s that could lead to an increase in defined benefit obli ations e ist because some pension plans are final salary plans or the annual capital components are directly related to salaries, i.e. a si nificant increase in salaries would lead to an increase in the benefit obli ation from these plans. n Germany, howe er, there are no contractual arran ements with re ard to inflation ris for these pension plans. An interest rate of per cent p.a. has been a reed for the employee financed deferred compensation plan the plan does not include any arran ements for inflation, so that it has to be assumed that there will be little incenti e for employees to contribute to the deferred compensation plan in times of risin inflation. n u embour , salaries are ad usted for the effects of inflation on the basis of a consumer price inde no more than once a year this ad ustment leads to a correspondin increase in the benefit obli ation from the pension plan. ince the obli ation will be met in the form of a capital payment, there will be no inflation lin ed effects once the beneficiary reaches retirement a e.
urat on and e ected atur t e of t e en on o l gat on The wei hted duration of the pension obli ations as at ecember is . years . years .
pected maturities of undiscounted pension payments
€m €m ess than year , , etween and years , , etween and years . . ore than years up to years , ,
The e pected payments in wiss francs were translated into euros at the rele ant closin rate on ecember.
The e pected costs of defined benefit plans e cludin ser ice cost for deferred compensation amount to approximately €17.7 million for the financial year, includin net interest e pense.
240 – –
ef ned contr ut on en on lan and ult e lo er lan
ef ned contr ut on lan In addition, the employer pays contributions to employees’ private pension funds.
ult e lo er lan employees’ monthly gross salaries, taking into account specific financial thresholds. Member institutions have a subsidiary liability for the fulfilment of BVV’s agreed pension benefits. However, we consider the the respective beneficiaries. Moreover, we do not know Deutsche Börse Group’s actual share in BVV’s . This plan is therefore shown in the Group’s financial reporting as a defined contribution
employer plans, amounted to € : €42.8 million). In €10.6 million.
Co o t on of ot er current l a l t e
€m €m
241 Deutsche Börse Group nnual report D T – . . – strictly confidential
ecutive and upervisory Boards Management report inancial statements urther information
. hare based payment
Deutsche Börse Group operates the Group hare lan G , the tock Bonus lan B , the o erformance Investment lan I , the erformance hare lan and the Management Incentive rogramme MI as well as the ong term ustainable Instrument I and the estricted tock nits , which provide share based payment components for employees, senior e ecutives and e ecutive board members.
Stoc onu lan S
The B is open to senior e ecutives of Deutsche Börse G and its participating subsidiaries. It grants a long term remuneration component in the form of so called B shares. These are generally accounted for as share based payments for which Deutsche Börse G has a choice of settlement in cash or e uity instruments for certain tranches. Tranches due in previous years were each settled in cash. In the reporting period, the company established an additional tranche of the B for senior e ecutives who are not risk takers. In order to participate in the B , a beneficiary must have earned a bonus. The awards are settled in cash and the B shares are measured 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.
The number of stock options is determined by the amount of the individual and performance based B bonus for the financial year, divided by the average share price etra 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. ather, the entitlement is generally received three years after the grant date the waiting period . ithin this period, beneficiaries cannot assert shareholder rights in particular, the rights to receive dividends and attend the nnual General Meeting . nce 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 rankfurt tock change is multiplied by the number of stock options. tock options are settled in cash.
valuat on of t e S The company uses an ad usted Black choles model Merton model to calculate the fair value of the stock options.
242 eutsche B rse Grou Annual re ort A – . . – strictly confidential
ecutive and Su ervisory Boards anagement re ort inancial statements urther information
aluation arameters for SBP shares erm to . . . . . . . . . . is free interest rate – . – . – . – . – . olatility of eutsche B rse AG shares . . . . . ividend yield . . . . . ercise rice €
he number of stoc o tions, settlement obligation, and short term rovision of the tranche includes the unsettled shares of the tranche. Given that the SBP tranche stoc o tions for senior e ecutives ill not be granted until the financial year, the number of shares a licable as at the re orting date may be ad usted during the financial year.
he valuation model does not ta e into account hurdle rates. he volatilities a lied corres ond to the mar et volatilities of com arable o tions ith com arable maturities.
aluation of SBP shares
Number € € € €m €m €m , , . . . , , , . . . . , , , . . . , , , . . . , , , . . .
Average rice of the e ercised and forfeited share o tions
€ € . . . . . . . .
he stoc o tions from the SBP tranche ere e ercised in the re orting eriod follo ing the e iration of the aiting eriod. Shares of the SBP tranches , and ere aid to former em loyees as art of severance ayments in the year under revie .
he carrying amount of the rovision for the SBP results from the measurement of the number of SBP stoc o tions at the fair value of the closing auction rice of eutsche B rse shares in electronic trading at the ran furt Stoc change at the re orting date and its ro ortionate recognition over the aiting eriod.
243 – –
€ € € €
– – – – – –
Long ter Su ta na le n tru ent LS and e tr cted Stoc n t S
Long ter Su ta na le n tru ent LS
244 – –
e tr cted Stoc n t S
valuat on of t e LS and t e S
– – – – – – – – – – – €
€ € € €m €m €m
€ € € €
245 – –
– – – – – – – –
Co erfor ance nve t ent lan C and erfor ance S are lan S
Performance Share Plan (PSP) Börse AG’s shares compared with the total shareholder return of the STOXX Europe 600 Finan “Principles achievement for performance shares” section in the
Börse AG’s shares in the last calendar month preceding the performance period. Any right to payment of
relative performance of the total shareholder return (TSR) on Deutsche Börse AG’s shares compared with he Börse AG’s net profit for the period attributable to shareholders of the parent
share price (Xetra closing price) of Deutsche Börse AG’s shares in the last calendar month preceding the
246 Deutsche Börse Group Annual report 0 0 DRAFT – 0 .0 . 0 – strictly confidential
E ecutive and Supervisory Boards anagement report Financial statements Further information
Co-Performance Investment Plan (CPIP) n financial year 0 a new remuneration programme ( o Performance nvestment Plan P P) was introduced and the former EO of Deutsche Börse AG arsten engeter 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 nde entities. The performance period for the measurement of the performance criteria commenced on anuary 0 and ends on December 0 . The shares are sub ect to a performance period of five years and a waiting period until December 0 . The subse uent payment of the stoc bonus will be settled in cash by arch 0 .
val at on of t e CPIP an t e P P The company uses an ad usted Blac Scholes model ( erton model) to calculate the fair value of the P P and PSP stoc options
aluation parameters for P P and PSP shares Term to . . 0 . . 0 . . 0 . . 0 . . 0 0 . . 0 Ris free interest rate – 0. – 0. – 0. – 0. – 0. – 0. olatility of Deutsche Börse AG shares . . .6 6. . . Dividend yield 0 0 0 0 0 0 E ercise price € 0 0 0 0 0 0 Relative total shareholder return 60.00 0.00 0.00 0.00 0.00 0.00 et profit for the period attributable to 00 00 Deutsche Börse AG shareholders .00 .00 .00 – 00 – 00 .00
The valuation model does not ta e into account hurdle rates. The volatilities applied correspond to the mar et volatilities of comparable options with comparable maturities.
aluation of P P and PSP shares
umber € € € €m €m €m 0 . . 0. . 0 . 0 6 . . . . . 0.0 0 0 . . . . 0 . 0 . . . .6 0 .6 0 ) 0 . . .0 . 0 . 0 0 0 . . . . 0 .
) The stoc options of the 0 tranche were granted as part of severance agreements.
247 Deutsche Börse Group Annual report 0 0 D A T – 0 0 0 – strictl confidential
E ecuti e and Super isor Boards anagement report inancial statements urther information
ro isions for the and the S amounting to € 6 million were recognised at the reporting date Decem er 0 0 Decem er 0 € 6 million Of the pro isions € million were attri uta le to mem ers of the E ecuti e Board 0 €11.3 million The total e pense for and S stoc options in the reporting period was € million 0 € million Of that amount an e pense of €6.0 millionwas attri uta le to mem ers of the E ecuti e Board 0 €6.9 million
hange in num er of and S shares allocated To the E ecuti e Board 60 – 6 – – 0 6 0 To other senior e ecuti es 6 0 6 – 6 0 – –
The stoc options of the 0 tranche were granted as part of se erance agreements
or further information on the num er of stoc options granted to E ecuti e Board mem ers and on the remuneration s stem for E ecuti e Board mem ers please refer to the remuneration report
ro are Plan ( P)
Emplo ees of Deutsche Börse Group who are not mem ers of the E ecuti e Board or senior e ecuti es ha e the opportunit to ac uire shares of Deutsche Börse AG at a discount under the Group Share lan GS nder the GS tranche for the ear 0 0 the participating emplo ees could su scri e for up to 0 shares of the ompan at a discount of 0 per cent and another 0 shares at a discount of 0 per cent The ac uired shares are su ect to a loc up period of two ears
The e pense of this discount is recognised in the income statement at the grant date n the reporting period an e pense totalling € 00 0 million 0 € 0 0 0 million was recognised in staff e pense for the GS
ana ement Incent ve Pro ramme ( IP)
The was set up for the senior management of the ontigo Group t grants a non current remuneration component in the form of irtual shares of the ontigo Group The remuneration is settled in cash These are generall accounted for as share ased pa ments The amounts pa a le to the eneficiaries are intended to reflect the economic de elopment of the ontigo Group The contains a time ased and a performance ased component The esting period is four ears and started one ear after closing of the A ioma transaction on Septem er 0
al at on The alue of the irtual shares is determined using a onte arlo simulation on the respecti e alance sheet date which appropriatel reflects the contract specific conditions The underl ing simulations depend on the underl ing from which the pa ment is lin ed to the eneficiaries of the The enterprise alue of the ontigo Group ser es as the underl ing
248 – –
t er rov s ons
€m €m €m €m – – – – – – – – – –
249 – –
€m €m €m €m – – – – – – – – – – – –
current and current provisions amount to a total of € €47 current provisions of € €225.2 provisions exist for € million (31 December 2019: €250.7 million).
€16.8
€m €m
250 – –
€m €m
251 – –
€m €m – – –
econc l at on to cas an cas e valents
– –
€m €m – – – – – –
252 – –
€m €m – – – –
–
€ € €
253 – –
Net profit for the period attributable to Deutsche Börse AG shareholders (€m) Earnings per share (basic) (€) Earnings per share (diluted) (€)
segments: This structure serves as a basis for the Group’s internal management and financial reporting (see the table entitled “Internal organisational and reporting structure” for details).
Net revenue (€m) Operating costs (€m) – – – – – – – – EBITDA (€m) impairment losses (€m) – – – – – – – – EBIT (€m) (€m)
254 – –
revenue (€m) Operating costs (€m) – – – – – – – – EBITDA (€m) – – – – – – – – impairment losses (€m) EBIT (€m) (€m)
Deutsche Börse Group’s business model – – operating participant base and pricing does not differ depending on the customer’s location. From a
Sales revenue is allocated to the individual regions according to the customer’s domicile, while current assets are allocated according to the company’s domicile and employees
described above, the analysis of sales is based on the direct customer’s billing address. This means
255 – –
€m €m €m €m €m €m – –
per cent of sales revenue was generated: UK (2020: €732.1 million, 2019: €704.2 €910.9 million, 2019: €769.6 million) per cent of assets are held: Germany (2020: €3,648.1 million, 2019: €3,634.1 €1,210.1 million, 2019: €427.2 million) and United States (2020: €1,061 million, 2019: €1,029.9 million)
year holding period. It is compared with the Group’s liable equity capital adjusted for intangible assets so as to test the Group’s ability to absorb extreme and month and amounted to €764.0 million as at 31 December 2020, whereby €657.0 million stems from credit risk and €107.0 million stems from market risk.
256 – –
Cre t r s
–
€m €m €m €m – –
257 – –
–
€m €m €m €m
“restricted bank balances” and “other cash and bank balances”. : €274.0 million). The amount includes collateral totalling €5.1 : €5.1 oriented view of Eurex Clearing AG and European Commodity Clearing AG, whilst the carrying amount of the “financial instrumen l counterparties”
Cas nvestments
– –
258 e tsche rse ro nn al re ort – . . – strictl con idential
ec ti e and er isor oards ana e ent re ort inancial state ents rther in or ation
ccordin to the treas r olic eli ible collateral ainl consists o hi hl li id inancial instr ents ith a ini ratin o – (Standard & Poor’s/Fitch) or Aa3 (Moody’s) issued or guaranteed by o ern ents or s ranational instit tions.
nsec red cash in est ents are er itted onl ith co nter arties ith i eccable credit ratin s ithin the ra e ork o de ined co nter art credit li its. o nter art credit risk is onitored on the basis o an internal ratin s ste .
The fair value of securities received under reverse repurchase agreements was €6, . illion €6,653.0 million). Clearstream Banking S.A. and Eurex Clearing AG are entitled to pledge the eli ible sec rities recei ed to their central banks in order to make use of the central banks’ monetary olic instr ents.
s o ece ber learstrea ankin . . had led ed sec rities ro the learstrea investment portfolio valued at €16 . illion to central banks as collateral or credit lines ro the central banks. n the re ortin eriod all o these sec rities ste ro learstrea in est ent ort olio in €2 . illion relates to Clearstream’s investment portfolio and €274.0 million relate to re erse re o a ree ents .
s at ece ber re learin had led ed no sec rities to central banks.
oans for settl n sec r t es transact ons learstrea ost tradin rants c sto ers intrada technical o erdra t acilities to a i ise settle ent e icienc . hese settle ent acilities are s b ect to internal credit re ie roced res. he are re ocable at the discretion o the learstrea s b ro and are in eneral ll sec red. s o ece ber they came to €106.2 billion : €115.5 billion). Of the total, €5.5 billion ( : €3.4 billion is nsec red and onl relates to credit lines ranted to selected central banks and ltilateral de elo ent banks in co liance ith the e e tion as er article o o ission ele ated e lation . ct al o tstandin s at the end o each b siness da enerall re resent a s all raction of the facilities and amounted to € . illion as at ece ber €231.7 illion see note .
learstrea collateral ana e ent also arantees the risk res ltin ro the to ated ec rities ails inancin ro ra e it o ers to its c sto ers here learstrea ankin . . acts as an inter ediar bet een borro er and lender. his risk is sec red. s o ece ber the guarantees under this programme amounted to €427.3 million : €288.8 million). Collateral recei ed b learstrea ankin . . in connection with these loans amounted to €560.6 illion (2019: €316.6 million).
nder the l s sec rities lendin ro ra e learstrea ankin . . had sec rities borro in s from various counterparties totalling €47,964.3 million as at 31 ece ber €58,008.6 illion . hese sec rities ere ll lent to other co nter arties. ollateral recei ed b learstrea ankin . . in connection ith these loans a o nted to €51,895.4 illion €58,228.6 illion . his collateral as led ed to the lender hilst learstrea ankin . . re ains its le al o ner.
n and no losses ro credit transactions occ rred in relation to an o the transaction t es described.
259 eutsche rse rou Annua re ort AF – 3 – strict y con identia
ecuti e and Su er isory oards Manage ent re ort Financia state ents Further in or ation
nanc al nstr ments of t e central co nter art es To safeguard the Group’s central counterparties against the ris o de au t by a c earing e ber the c earing conditions re uire the c earing e bers to de osit argins in the or o cash or securities on a dai y basis or an intraday basis in the a ount sti u ated by the res ecti e c earing house Additiona sa ety echanis s o the rou ’s centra counter arties are described in detai in the ris re ort
ra e rece va les rading sett e ent and custody ees are genera y co ected ithout de ay by direct debit Fees or other ser ices such as the ro ision o data and in or ation are sett ed ain y by trans er rade recei ab es are ana ysed using an e ected credit oss ode based on the si i ied a roach as out ined in F S o easure the e ected credit oss trade recei ab es and contract assets ha e been grou ed based on the days ast due he trade recei ab es share the ain ris characteristics he e ected oss a ount has been deter ined by a ying the i eti e e ected oss a roach he e ected oss rates are based on the ay ent ro i es o er a eriod o i e years and the oss ro i e e erienced o er that eriod As o 3 ece ber there ere no contract assets ( ni )
oss a o ances or trade recei ab es as at 3 ece ber
€m €m €m €m €m €m €m €m rade recei ab es 33 3 3 3
oss a o ances or trade recei ab es as at 3 ece ber
€m €m €m €m €m €m €m €m rade recei ab es 3 3
260 eutsche rse Group nnual report T – – strictl confidential
ecuti e and uper isor oards anage ent report inancial state ents urther infor ation
Trade recei a les are ritten off hen there is no reasona le e pectation of reco er The follo ing criteria are used for the assess ent of derecognition
◼ nsol enc proceedings are not started for ant of assets ◼ nsol enc proceedings ha e not resulted in an pa ent for a period of three ears and there is no indication that an a ount ill e recei ed going for ard ◼ nforce ent acti ities are not pursued eutsche rse Group due to cost enefit anal sis or eutsche rse Group has tried unsuccessfull to collect the recei a le for a period of three ears
n there ere no significant rite offs due to custo er defaults oreo er no significant pa ents ere recei ed in for recei a les hich had pre iousl een ritten off nil
e t sec r t es All of the entity’s debt securities easured at a ortised cost are considered to ha e lo credit ris and the loss allowance recognised during the period was therefore limited to twelve months’ expected losses. The Group considers “low credit risk” for listed onds to e an in est ent grade credit rating granted an e ternal rating agenc ll eutsche rse Group de t securities easured at fair alue through are assigned to stage on initial recognition and are re ie ed regularl for changes in credit ris on the asis of their rating The e pected loss for listed de t securities fro eutsche rse Group is deter ined using the default rates pro ided a rating agenc
evelo ment of t e loss allo ance
e elop ent of the loss allo ance
€m €m €m €m ncrease in the allo ance recognised in profit or loss during the period ecrease in the allo ance recognised – – – in profit or loss during the period ncrease fro usiness co inations ncrease in the allo ance recognised in profit or loss during the period ecrease in the allo ance recognised – – – in profit or loss during the period
261 eutsche rse Group Annual report A T – . . – strictly confidential
xecutive and upervisory oards anagement report inancial statements urther information
Cre t r s concentrat ons 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. otential concentrations of credit risk are limited by application of counterparty group and country credit limits. ollateral and currency concentrations are also monitored.
anagement of credit risk concentration including collateral concentration and so called large exposures is conducted in compliance with applicable regulatory re uirements such as those arising from among others articles – of egulation apital e uirements egulation article paragraph of egulation uropean arket nfrastructure egulation and respectively applicable national re uirements see also note for an explanation of regulatory capital re uirements . e uirements of concentration risks arising from egulation entral ecurities epository egulation have been implemented as part of eutsche Börse Group’s affiliated CSDs’ authorisation under article 16 CSDR.
The re uired economic capital value at risk a with a . per cent confidence level for credit risk is calculated monthly for each day and amounted to €657.0 million as at 31 December 2020 €510.0 million).
eutsche rse Group also applies additional methods in order to detect credit concentration risks. t analyses the impact of a default by its two largest counterparties with unsecured exposures and stressed recovery parameters. In addition, analyses are carried out for the Group’s top 5 and top 10 counterparties based on the risk weighted exosures of the individual counterparties. All the concentration metrics have dedicated early warning thresholds and limits and are part of the uarterly risk reporting to the xecutive oard. As in the previous year no material adverse credit concentrations were detected in .
ar et r s
arket risk arises from changes in interest rates foreign exchange rates and other market prices. eutsche rse Group is generally only affected to a limited extent by market risk. The re uired economic capital for market risk is calculated on a monthly basis. As of ecember the economic capital for market price risks was €107.0 million (2019: €117.0 million).
n the financial year no impairment losses nil were recognised in profit or loss for strategic investments that are not included in the a for market risk.
Interest rate risk Changes in market interest rates may affect Deutsche Börse Group’s net profit for the period attributable to eutsche rse AG shareholders. This risk arises whenever interest terms of financial assets and liabilities are different.
Interest rate sensitive assets include the Group’s money market and investment portfolios, whilst interest rate sensitive liabilities mainly consist of short term debt instruments. nterest rate risk from long term liabilities of eutsche rse AG is mitigated through issuance of fixed coupon bonds.
262 Deutsche Börse Group nnual report DR – 1. . 1 – strictly confidential
ecutive and Supervisory Boards anagement report inancial statements urther information
o refinance its e isting indebtedness Deutsche Börse G issued debt securities with a nominal volume of €600.0 million in June 2020. This enabled the company to refinance its outstanding hybrid loan of €600 million, which was called and redeemed in full in November 2020. In addition, Clearstream Banking G issued a five year senior preferred loan with a nominal volume of €350.0 million in ovember as part of the CSDR, in order to increase its ualifying li uid funds. he net proceeds of the loan will be reinvested in line with the financial risk policy in secure assets, to minimise credit and market risks. or further details of the outstanding bonds issued by Deutsche Börse Group, see the “Net assets” section in the combined management report.
Cash received as deposits from market participants is invested mainly via short term reverse repos and in the form of overnight deposits at central banks, limiting the risk of a negative impact due to a changed interest rate environment. egative interest rates resulting from reinvestments of these cash deposits are passed on to the respective Clearstream post trading customers after applying an additional margin. or ure Clearing G, interest rates on cash collateral are in principle calculated based on a predefined market benchmark rate per currency after deducting an additional spread per currency. In e ceptional cases such as market disruption, ure Clearing G reserves the right to calculate interest rates on cash collateral based on the realised interest rate.
Group entities may furthermore invest their own capital and part of customer cash balances in high uality li uid bonds. he bond portfolio consists mostly of variable rate instruments, which leads to a comparably low interest rate risk for the Group.
he risk arising from interest earning assets and interest bearing liabilities is monitored on each business day and limited by using a system which includes mismatch limits in combination with interest rate risk limits and stop loss limits. he interest rate risk limits determine the acceptable ma imum loss caused by a hypothetical adverse yield curve shift. he stop loss limits define the fair value of a portfolio triggering an ad hoc review and risk reducing actions.
Interest rate swaps as well as swaptions might be used to hedge interest rate risks. s of the reporting date, there are no hedging relationships with regards to interest rate risk in place.
Foreign-exchange rate risk easuring and managing foreign exchange risk is important for reducing Deutsche Börse Group’s e posure to e change rate movements. he three main types of foreign e change risk that Deutsche Börse Group is e posed to are cash flow , translation and transaction related foreign e change risk. Cash flow risk reflects the risk of fluctuations in Deutsche Börse Group’s present value of future operating cash flows from foreign e change movements. ranslation risk comprises effects from the valuation of the Group’s assets and liabilities in foreign currencies. Finally, transaction risk is closely related to cash flow risk; it may arise through changes in the structure of Deutsche Börse Group’s asset and liabilities in foreign currencies.
he Group operates internationally and is, to a limited e tent, e posed to foreign e change risk, primarily in S , C , £ and CZK. Exchange rate fluctuations may affect the Group’s profit margins and the value of assets and liabilities denominated in a currency that is not the functional currency of the relevant Group entity. Respective currency risks arise mainly from operating income and e penses denominated in a currency other than the functional currency, inter alia from that portion of the Clearstream post trading) segment’s sales revenue and treasury result from banking business that is directly or indirectly in S . he Clearstream post trading segment generated 1 per cent of its revenue and treasury result from banking business directly or indirectly in S 1 per cent .
263 – –
defined for cash flow and translation risk. Deutsche Börse Group’s treasury poli
the Group’s policy, the critical terms of forwards a
t when they exceed €15.0
Other market risks
i i it risk
oup’s cash
264 Deutsche Börse Group nnual report D – . . – strictly confidential
ecuti e and uper isory Boards ana ement report inancial statements urther information
he companies of Deutsche Börse Group ha e the followin credit lines at their disposal, which were not utilised as of the alance sheet date.
ontractually a reed credit lines
m m Deutsche Börse G orkin capital € . . ure learin G ettlement € . , . ettlement r. . . ettlement . . learstream Bankin . . orkin capital € . . ettlement € , . , . ettlement , . , . ettlement . . uropean ner y chan e G orkin capital € . . ettlement € . ettlement . . ioma nc. orkin capital . .
€400.0 million of Deutsche Börse AG’s working capital credit lines is a su credit line of Clearstream Banking S.A.’s €750.0 million workin capital credit line. ncludin committed forei n e chan e swap lines and committed repo lines.
or refinancin purposes, ure learin G and the learstream Bankin . . can pled e eli i le securities with their respecti e central anks. learstream Bankin . . has a ank uarantee letter of credit in fa our of uroclear Bank . . . . issued y an international consortium to secure daily deli eries of securities etween uroclear Bank . . . . and learstream Bankin . . his uarantee amounted to . illion as at Decem er . illion . uroclear Bank . . . . has also issued a uarantee in fa our of learstream Bankin . . amountin to . illion . illion .
commercial paper pro ramme offers Deutsche Börse G an opportunity for fle i le, short term financing, involving a total facility of €2.5 illion in arious currencies. t the end of the year there was no commercial paper outstandin nil .
learstream Bankin . . also has a commercial paper pro ramme with a pro ramme limit of €1.0 illion, which is used to pro ide additional short term li uidity. s of Decem er it had issued commercial paper with a nominal olume of €5 . million : €311.9 million).
265 Deutsche Börse Group Annual report D A – – strictl confi ential
ecuti e an uper isor Boar s anagement report inancial statements urther information
In 2019, Standard & Poor’s confirmed Deutsche Börse AG’s AA credit rating with a stable outlook. At ear en Deutsche Börse AG was one of onl two DA liste companies awar e an AA rating S&P. Deutsche Börse AG’s commercial paper programme also had the highest short term rating of A– he AA rating of learstream Banking A was confirme with a sta le outlook the rating agencies itch an tan ar oor’s in 2020. S&P also rated Clearstream Banking AG as AA in November or further etails on the rating of Deutsche Börse Group see the “Financial position” section in the com ine management report
aturit anal sis of financial instruments
ore than ore than econcili ot more months ut ear ut not ation to than not more more than er carr ing arr ing ight months than ear ears ears amount amount Mio. € Mio. € Mio. € Mio. € Mio. € Mio. € Mio. € on current financial lia ilities – measure at amortise cost thereof lease lia ilities – on current financial lia ilities at fair alue through profit or loss ra e pa a les urrent financial lia ilities measure at amortise cost thereof lease lia ilities urrent financial lia ilities at fair alue through profit or loss ash eposits market participants –
inancial lia ilites an eri ati es hel central counterparties less financial assets an eri ati es – – – – – – hel central counterparties
ash flow he ges air alue he ges Deri ati es hel for tra ing ash flow he ges – – air alue he ges Deri ati es hel for tra ing – – – – –
266 Deutsche Börse Group Annual report 2020 D AF – 01.0 .2021 – strictl confidential
ecutive and Supervisor Boards anagement report Financial statements Further information
aturit anal sis of financial instruments 2
Mio. € Mio. € Mio. € Mio. € Mio. € Mio. € Mio. € Non current financial liabilities 0 0 . 1, . 1, 2.2 – 2 . 2, 2 .2 measured at amortised cost thereof lease liabilities 0 0 0 1 . 22 .2 – 9. 1.0 Non current financial liabilities at fair 0 0 0 . 0 0 . value through profit or loss rade pa ables 0. 20 .0 0. 0 0 1. 20 . Current financial liabilities measured at 1 , 2 . . .1 0 0 0. 1 ,22 . amortised cost thereof lease liabilities 0 11. .9 0 0 – . 9.1 Current financial liabilities at fair value . 0 0 0 0 0 . through profit or loss Cash deposits b market participants 29, 1.1 . 0 0 0 0 29, . –
Financial liabilites and derivatives 11,220. 9,2 1.0 ,920.1 ,1 . 1,0 . 0 2, . held b central counterparties less financial assets and derivatives – 11,220. – 0,1 1.0 – ,920.1 – ,1 . – 1,0 . 0 – , . held b central counterparties
Cash flow hedges 0 1 .0 0. 0 0 Fair value hedges 0 0 0 0 0 Derivatives held for trading 2 .2 .9 2,1 2.2 0 0 Cash flow hedges 0 – 1 .0 – 9. 0 0 Fair value hedges 0 0 0 0 0 Derivatives held for trading – 29. – . – 2,1 1.0 0 0 – –
267 2 – –
e a risks
– –
a risks
268 Deutsche Börse Group | Annual report 2020
Executive and Supervisory Boards Management report Financial statements Notes | Other disclosures Further information
25. Corporate governance
On 3 December 2020, the Executive and Supervisory Boards issued the latest version of the declaration of compliance 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 statement).
26. Related party disclosures
Related parties as defined by IAS 24 are members of the executive bodies of Deutsche Börse AG and their close family members, 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.
The remuneration of the individual members of the Executive and Supervisory Boards is presented in the remuneration report.
Executive Board
In 2020, the fixed and variable remuneration of the members of the Executive Board, including non- cash benefits granted in the financial year, amounted to €19.4 million (2019: €19.5 million). During the year under review, expenses of €11.3 million (2019: €6.9 million) were recognised in connection with share-based payments to Executive Board members.
The actuarial present value of the pension obligations to Executive Board members was €18.4 million as at 31 December 2020 (2019: €15.6 million). Expenses of €3.2 million (2019: €2.2 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 €8.3 million in 2020 (2019: €9.7 million). The actuarial present value of the pension obligations was €86.0 million as at 31 December 2020 (2019: €84.8 million).
Termination benefits
Expenses of €0.7 million were recognised in connection with the termination of Executive Board appointments.
Supervisory Board
The aggregate remuneration paid to members of the Supervisory Board in the reporting year was €2.5 million (2019: €2.4 million).
269 249 – –
, the employee representatives on Deutsche Börse AG’s Superv received remuneration (excluding Supervisory Board remuneration) amounting to € €1.1 million). The total consists of the fixed and variable salary components for those employee
si ess re ati shi s ith re ate arties a ke ma a eme t ers e
€m €m €m €m €m €m €m €m – – – – – – – –
si ess re ati shi s ith ke ma a eme t ers e
– – payments in the amount of approximately €14 thousand for these management services.
The Board of Directors of LuxCSD S.A., Luxembourg, an associate from Deutsche Börse Group’s Deutsche Börse AG, Frankfurt/Main, Germany, to LuxCSD S.A. Overall, revenue of €2,276.7 as well as expenses of €1,977
270 Deutsche Börse Group Annual report D A – – strictly con i ential
ecutive an Supervisory Boar s ana ement report inancial statements ther isclosures urther in ormation
Börse Group During the 2020 financial year, Deutsche Börse Group realised revenue of €9,374.4 thousand and incurred expenses of €25,913.2 thousand based on the business relationship with Deutsche Börse ommo ities Gm
An ecutive Boar mem er o Spot S is concurrently the sole sharehol er o A SAS , hich provi es a visory services to S S on the asis o a service a reement n the conte t o the services provided by PELOUPIA SASU, expenses of €14.0 thousand were incurred in 2020. As at 31 Decem er 2020, liabilities amounted to €5.0 thousand.
ne ecutive Boar mem er o Deutsche Börse AG as ell as one Supervisory Boar mem er o a ully consoli ate company o Deutsche Börse Group are mem ers o the Supervisory Boar o hina urope nternational AG , ran urt ain, Germany his stoc corporation as esta lishe as a oint venture et een Shan hai Stoc chan e t , Shan hai, hina hina inancial utures Exchange, Shanghai, China; and Deutsche Börse AG. Expenses of €64.3 thousand were incurred in rom the usiness relationship ith
A mem er o the mana ement o A ioma nc , e or , SA, as ell as one relate party to this company hich e ercises control over the company lou Smart, e or , SA, maintain usiness relationships ith each other n the conte t o the services provi e y lou Smart an A ioma nc , expenses of €68.5 thousand were incurred in 2020. As at 31 December 2020, liabilities amounted to €28.6 thousand.
Selecte e ecutives o Deutsche Börse Group companies also hol a ey mana ement position ithin the learstream ension un , an “association d’épargne pension” ASS un er u em our la By means o cash contri utions to this ASS , learstream nternational S A , learstream Ban in S A , as ell as learstream Services S A , un the e ine ene it plan esta lishe in avour o their u em our employees
mployees
mployees Avera e num er o employees urin the year , , mploye at the reportin ate , ,
mployees avera e annual s , ,
the avera e num er o employees urin the year, ere classi ie as ana in Directors e clu in ecutive Boar mem ers , as senior e ecutives an , , as employees
here as an avera e o , ull time e uivalent employees urin the year , lease also re er to the “Employees” section in the combined management report
271 – –
The members of the company’s decision “The Executive Board” “The Supervisory Board”
“ ”
of €1 billion on 15 February 2021, divided into two tranches with maturities of five and ten years. The –
272 eutsche B rse roup nnua report T – – strict y confidentia
Executive and Supervisory Boards ana ement report inancia statements ther disc osures urther information
isc osures on materia non contro in interests
esent iche nicht beherrschende ntei e
apita otin ri hts
Net profit for the period (in €m) Equity (in €m) Dividend payments (in €m)
Assets (in €m) Liabilities (in €m) Profit/loss (in €m) Other comprehensive income (in €m) – – – Comprehensive income (in €m) Cashflows (in €m) –
isc osures on associates
eutsche B rse roup does not have any materia associates The fo o in tab e sho s summarised financia information for the individua associates that are immateria hen considered separate y
on materia associates
€m €m
rofit after Tax ther income
isc osures are based on pre iminary and unaudited fi ures hich may be ad usted subse uent y
273 – –
Deutsche Börse AG’s equity interests in
274 Deutsche Börse Gr u Annu re rt D A – – strict y c n i enti
ecuti e n u er is ry B r s n e ent re rt in nci st te ents ther isc sures urther in r ti n
u y c ns i te su si i ries rt
ur e n ner y ch n e AG ei i Ger ny Asi te i ite in re in re G G s ch n e er ices G ienn Austri in G ei i Ger ny ur e n ity e rin AG ei i Ger ny ur e n ity e rin u e ur r u e ur u e ur ris r nce ether n s B A ster ether n s ch ei AG Bern it er n G s int r ic A Br n y Den r Gre e yste s y e sin i in n B ech t un ri e e s nite in ch n e in s ys ns rner A ch n e ys ns rner A e r ys ns rner A er ch n e entr ur e s r ue ech e u ic is nc De re A is nter e i te nc De re A is er er u nc De re A nti G r n urt in Ger ny A i nc e r A A i G Gene it er n A i t n n n n A i t n n nite in A i Ar entin A Buen s Aires Ar entin A i Asi te t in re in re A i Deutsch n G r n urt in Ger ny A i n G y n A i t y ney Austr i A i A ris r nce nti n e G r n urt in Ger ny t u it er n D t n n nite in r e te ch n e G Ber in Ger ny Börse Ber in AG Ber in Ger ny re sury yste s AG r n urt in Ger ny r in et r s nc e r A r in et r s i ite Du i nite Ar ir tes A r in et r s n Bh u u ur ysi Asi ci ic te t in re in re G nc e r A in ir G r n urt in Ger ny hree i ty r in et r s n i te t u i n i
here ercent irect n ercent in irect
275 – –
276 – –
277 Deutsche Börse Group | Annual report 2020
Executive and Supervisory Boards Management report Financial statements Notes Further information | Independent Auditors’ Report
Independent Auditors’ Report
To Deutsche Börse Aktiengesellschaft, Frankfurt am Main
Report on the Audit of the Consolidated Financial Statements and Combined Management Report
Opinions
We have audited the consolidated financial statements of Deutsche Börse Aktiengesellschaft, Frankfurt am Main, and its subsidiaries (the Group), which comprise the consolidated balance sheet as of 31 December 2020, the consolidated income statement, the consolidated statement of comprehen- sive income, the consolidated statement of changes in equity and the consolidated cash flow statement and for the financial year from 1 January to 31 December 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies. In addition, we have audited the combined management report of Deutsche Börse Aktiengesellschaft including the combined non-financial statement in line with Sections 289b(1), 289c, 315b and 315c HGB [Handelsgesetzbuch: German Commercial Code] for the financial year from 1 January to 31 December 2020. In accordance with the legal requirements applicable in Germany, we did not audit the components of the combined management report which we have identified in the „Other information“ section of our audit opinion.
The combined management report comprises links to the Group’s website which are not required by law. In accordance with the legal requirements applicable in Germany, we did not audit these links, nor the information referred to in the links.
In our opinion, on the basis of the knowledge obtained in the audit,
the accompanying consolidated financial statements comply in all material respects with the IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e(1) HGB [Handelsgesetzbuch: German Commercial Code] and, in compliance with these requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as of 31 December 2020 and of its financial performance for the financial year from 1 January to 31 December 2020, and the accompanying combined management report as a whole provides an appropriate view of the Group’s position. In all material respects, the combined management report is consistent with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our opinion on the combined manage- ment report does not cover the content of the components of the combined management report which we have identified in the „Other information“ section of our audit opinion. The combined management report comprises links to the Group’s website which are not required by law. Our opinion does not cover the links, nor the information referred to in the links.
Pursuant to Section 322(3) sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the combined manage- ment report.
278 Deutsche Börse Group | Annual report 2020
Executive and Supervisory Boards Management report Financial statements Notes Further information | Independent Auditors’ Report
Basis for the Opinions
We conducted our audit of the consolidated financial statements and combined management report in accordance with Section 317 HGB and the EU Audit Regulation No 537/2014 (referred to subsequently as ‘EU Audit Regulation’) and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements and principles are further described in the ‘Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and Combined Management Report’ section of our auditor’s report. We are independent of the group entities in accor- dance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Article 10(2) point (f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5(1) of the EU Audit Regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the consolidated financial statements and on the combined management report.
Key Audit Matters in the Audit of the Consolidated Financial Statements
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements for the financial year from 1 January to 31 December 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these matters.
Impairment of the goodwill For the accounting policies applied as well as the assumptions used, please refer to note 2 (Basis of consolidation) and note 10 (Intangible assets) in the notes to the consolidated financial statements.
THE FINANCIAL STATEMENT RISK At 31 December 2020, goodwill amounted to EUR 3,958 million (previous year: EUR 3,471 million). The goodwill thus represents 2.6 per cent of the assets of the Group at 31 December 2019.
Goodwill is subjected to an impairment test by the company at least once a year and also on an ad hoc basis, if appropriate. For this purpose, the carrying amount is compared with the recoverable amount of the cash-generating unit (CGU). Deutsche Börse AG determines the recoverable amounts of the cash- generating units either on the basis of the value in use or on the basis of the fair value less costs of disposal. If the carrying amount is higher than the recoverable amount, there is a need for impairment.
The result of these valuations is highly dependent upon assumptions concerning future cash inflows, based on the corporate planning, as well as the defined parameters. As a result, the valuations are subject to discretion. Any need for impairment that may arise as a result can have a material impact on the statement of the assets, liabilities and financial performance of the Group. Therefore, the correct determination of any need for impairment is of particular significance for the financial statements.
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OUR AUDIT APPROACH With the support of our valuation experts, we have assessed the valuation models used by the com- pany as well as the appropriateness of the significant assumptions relating to valuation parameters. We assessed the appropriateness of the assumptions used in the determination of the discount rates by comparing them with market- and industry-specific reference values; we additionally verified the calculation method used to determine the discount rates. We compared the expected cash inflows and outflows used for the calculations with the current budget plan approved by management. In order to assess the appropriateness of the assumptions used when the budget plan was drawn up, we first discussed these in meetings with management. Then we compared the assumptions used with relevant peer group companies, and evaluated analyst reports on the market segments. We further- more appraised the reliability of the forecasts in previous years based on whether they occurred or not. Within the scope of our own sensitivity analyses, we determined whether there would be a need for impairment in the event of possible changes in the assumptions in realistic ranges.
OUR OBSERVATIONS The calculation method used by the company is appropriate and consistent with the relevant valuation principles. The underlying assumptions about the valuation-relevant parameters have been calculated in a balanced way and are within acceptable ranges.
Impairment of the other intangible assets For the accounting policies applied as well as the assumptions used, please refer to note 2 (Basis of consolidation) and note 10 (Intangible assets) in the notes to the consolidated financial statements.
THE FINANCIAL STATEMENT RISK At 31 December 2020, other intangible assets amounted to EUR 1,255 million (previous year: EUR 1,041 million). Other intangible assets thus represent 0.8 per cent of the Group’s assets as at 31 December 2020.
The other intangible assets with indefinite useful lives are subject to an impairment test by the com- pany at least once a year, and also on an ad hoc basis, if appropriate. For this purpose, Deutsche Börse AG determines the recoverable amounts of the intangible asset or cash-generating units, in case no independent cash flows can be allocated to that specific intangible asset, either on the basis of the value in use or on the basis of the fair value less costs of disposal. The result of these valuations is highly dependent upon assumptions concerning future cash inflows, based on the corporate planning, as well as the defined parameters. As a result, the valuations are subject to discretion. Any need for impairment that may arise as a result can have a material impact on the statement of the assets, liabilities and financial performance of the Group. Therefore, the correct determination of any need for impairment is of particular significance for the financial statements.
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OUR AUDIT APPROACH With the support of our valuation experts, we have assessed the valuation models used by the com- pany as well as the appropriateness of the significant assumptions relating to valuation parameters. We assessed the appropriateness of the assumptions used in the determination of the discount rates by comparing them with market- and industry-specific reference values; we additionally verified the calculation method used to determine the discount rates. We compared the expected cash inflows and outflows used for the calculations with the current budget plan approved by management. In order to assess the appropriateness of the assumptions used when the budget plan was drawn up, we first discussed these in meetings with management. Then we compared the assumptions used with relevant peer group companies, and evaluated analyst reports on the market segments. We further- more appraised the reliability of the forecasts in previous years based on whether they occurred or not. Within the scope of our own sensitivity analyses, we determined whether there would be a need for impairment in the event of possible changes in the assumptions in realistic ranges.
OUR OBSERVATIONS The calculation method used by the company is appropriate and consistent with the relevant valuation principles. The underlying assumptions about the valuation-relevant parameters have been calculated in a balanced way and are within acceptable ranges.
Other Information
The company’s management, or the Supervisory Board, is responsible for the other information. The other information comprises the combined corporate governance statement as a component of the combined management report, whose content was not audited, and which is disclosed in the section “Corporate governance statement”.
Other information also comprises the other parts of the annual report.
However, other information does not comprise the consolidated financial statements, the audited disclosures of the combined management report as well as our corresponding auditor‘s report.
Our opinions on the consolidated financial statements and on the combined management report do not cover the other information, and consequently we do not express an opinion or any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information is
materially inconsistent with the consolidated financial statements, with the audited disclosures in the combined management report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
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Responsibilities of Management and the Supervisory Board for the Consolidated Financial Statements and Combined Management Report
Management is responsible for the preparation of the consolidated financial statements that comply, in all material respects, with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315e(1) HGB, and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position and financial performance of the Group. In addition, management is responsible for such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern. Moreover, the company’s management has the respon- sibility to disclose any matters that are relevant for the going concern assumption. In addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.
Furthermore, management is responsible for the preparation of the combined management report that, as a whole, provides an appropriate view of the Group’s position and is, in all material respects, consistent with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. In addition, management is responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of the combined management report that is in accordance with the applicable German legal requirements and to be able to provide sufficient appropriate evidence for the assertions in the combined management report.
The supervisory board is responsible for overseeing the Group’s financial reporting process for the preparation of the consolidated financial statements and of the combined management report.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and the Combined Management Report
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the combined management report as a whole provides an appropriate view of the Group’s position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit, complies with the German legal requirements, and appropriately presents the opportunities and risks of future development, as well as to issue an auditor’s report that includes our opinions on the consolidated financial statements and on the combined management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Section 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirt- schaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial state- ments and this combined management report.
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We exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements and the combined management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of the internal control system relevant to the audit of the consolidated financial statements, and of arrangements and measures (systems) relevant to the audit of the combined management report, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems. Evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management and related disclosures. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the consolidated financial statements and in the combined management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. How ever, future events or conditions may cause the Group to cease to be able to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position, and financial performance of the Group in compli- ance with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e(1) HGB. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or busi- ness activities within the Group to express opinions on the consolidated financial statements and on the combined management report. We are responsible for the direction, supervision and perfor- mance of the group audit. We remain solely responsible for our opinions. Evaluate the consistency of the combined management report with the consolidated financial statements, its conformity with German law, and the view of the Group’s position it provides. Perform audit procedures on the prospective information presented by management in the combined management report. On the basis of sufficient appropriate audit evidence, we evaluate, in particular the significant assumptions used by management as a basis for the prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information.
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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, the related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter.
Other Legal and Regulatory Requirements
Report on the Assurance in accordance with Section 317 (3b) HGB on the Electronic Reproduction of the Consolidated Financial Statements and the Combined Management Report Prepared for Publication Purposes
We have performed assurance work in accordance with Section 317 (3b) HGB to obtain reasonable assurance about whether the reproduction of the consolidated financial statements and the combinded management report (hereinafter the “ESEF documents”) contained in the file that can be downloaded by the issuer from the electronic client portal with access protection, “deutschebrseag.zip” (SHA256 hash value: cba6a49cdb5e885130ac5f5c0e89a904bf761584080fa554fb73a38733c1ceda) and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format (“ESEF format”). In accordance with German legal requirements, this assurance only extends to the conversion of the information contained in the consolidated financial statements and the combined management report into the ESEF format and therefore relates neither to the information contained in this reproduction nor any other information contained in the above-mentioned electronic file.
In our opinion, the reproduction of the consolidated financial statements and the combined manage- ment report contained in the above-mentioned electronic file and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format. We do not express any opinion on the information contained in this reproduction nor on any other information contained in the above-mentioned file beyond this reasonable assurance opinion and our audit opinion on the accompanying consolidated financial statements and the accom- panying combined management report for the financial year from 1 January to 31 December 2020 contained in the “Report on the Audit of the Consolidated Financial Statements and the Combined Management Report” above.
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We conducted our assurance work on the reproduction of the consolidated financial statements and the combinded management report contained in the above-mentioned electronic file in accordance with Section 317 (3b) HGB and the Exposure Draft of the IDW Assurance Standard: Assurance in accordance with Section 317 (3b) HGB on the Electronic Reproduction of Financial Statements and Management Reports Prepared for Publication Purposes (ED IDW AsS 410) and the International Standard on Assurance Engagements 3000 (Revised)]. Accordingly, our responsibilities are further described below. Our audit firm has applied the IDW Standard on Quality Management 1: Require- ments for Quality Management in Audit Firms (IDW QS 1).
The company’s management is responsible for the preparation of the ESEF documents including the electronic reproduction of the consolidated financial statements and the combined management report in accordance with Section 328 (1) sentence 4 item 1 HGB and for the tagging of the consolidated financial statements in accordance with Section 328 (1) sentence 4 item 2 HGB.
In addition, the company’s management is responsible for the internal controls they consider necessary to enable the preparation of ESEF documents that are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB for the electronic reporting format.
The company’s management is also responsible for the submission of the ESEF documents together with the auditor’s report and the attached audited consolidated financial statements and audited combined management report as well as other documents to be published to the operator of the German Federal Gazette [Bundesanzeiger].
The supervisory board is responsible for overseeing the preparation of the ESEF documents as part of the financial reporting process.
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB. We exercise professional judgement and maintain professional scepticism throughout the assurance work. We also:
Identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB, design and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide a basis for our assurance opinion. Obtain an understanding of internal control relevant to the assurance of the ESEF documents in order to design assurance procedures that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these controls. Evaluate the technical validity of the ESEF documents, i.e. whether the electronic file containing the ESEF documents meets the requirements of Commission Delegated Regulation (EU) 2019/815 on the technical specification for this electronic file. Evaluate whether the ESEF documents enable an XHTML reproduction with content equivalent to the audited consolidated financial statements and the audited combined management report. Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) enables an appropriate and complete machine-readable XBRL copy of the XHTML reproduction.
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Further information pursuant to Article 10 of the EU Audit Regulation
We were elected as group auditors by the annual general meeting held on 19 May 2020. We were engaged by the chair of the audit committee of the Supervisory Board on 29 July 2020. We have been engaged as auditors of the consolidated financial statements of Deutsche Börse AG without inter ruption since the 2001 financial year.
We declare that the opinions expressed in this auditor’s report are consistent with the additional report to the audit committee pursuant to Article 11 of the EU Audit Regulation (long form audit report).
In addition to the consolidated financial statements, we audited the annual financial statements of Deutsche Börse AG and carried out various annual audits of subsidiaries. The audits included reviews of interim financial statements. Other assurance services relate to ISAE 3000 reports, and statutory or contractual audits such as audits under the WpHG as well as other contractually agreed assurance services.
Tax services include assistance in the preparation of tax returns, tax appraisals and advice on individual matters, and tax advice related to the external audit.
As part of other services, we supported Deutsche Börse AG with quality assurance measures.
German Public Auditor Responsible for the Engagement
The German Public Auditor responsible for the engagement is Klaus-Ulrich Pfeiffer.
Frankfurt am Main, 4 March 2021 KPMG AG Wirtschaftsprüfungsgesellschaft [Original German version signed by:]
Leitz Pfeiffer Wirtschaftsprüfer Wirtschaftsprüfer [German Public Auditor] [German Public Auditor]
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Executive and Supervisory Boards Management report Financial statements Notes Further information | Acknowledgement | Contact | Registered trademarks
Acknowledgement Contact
Published by Investor Relations Deutsche Börse AG E-Mail [email protected] 60485 Frankfurt/Main Phone +49-(0) 69 – 2 11 – 1 16 70 Germany Fax +49-(0) 69 – 2 11 – 1 46 08 www.deutsche-boerse.com www.deutsche-boerse.com/ir _ e
Concept and layout Group Sustainability Deutsche Börse AG, Frankfurt/Main E-Mail [email protected] Kirchhoff Consult AG, Hamburg Phone +49-(0) 69 – 2 11 – 1 42 26 Fax +49-(0) 69 – 2 11 – 61 42 26 Photographs www.deutsche-boerse.com/sustainability Getty Images Financial Accounting & Controlling Publication date E-Mail [email protected] 12 March 2021 Phone +49-(0) 69 – 2 11 – 1 79 80 Fax +49-(0) 69 – 2 11 – 61 79 80 The German version of this report is legally binding. The company cannot be held responsible for any misunder-standing or misinterpretation arising from Registered trademarks this translation. The following names or designations are Reproduction – in total or in part – only with the writ- registered trademarks of Deutsche Börse AG ten permission of the publisher or a Deutsche Börse Group: C7®, DAX®, Deutsche Börse Venture Network®, ERS®, Eurex®, We would like to thank all colleagues and service Eurex Bonds®, Eurex Clearing Prisma®, Eurex Repo®, F7®, FWB®, GC Pooling®, M7®, MDAX®, ÖkoDAX®, SDAX®, T7®, TecDAX®, providers who participated in the compilation of this VDAX®, Vestima®, Xetra® and Xetra-Gold® are registered report for their friendly support. trademarks of Deutsche Börse AG. 360T® is a registered trademark of 360 Treasury Systems AG. EURO STOXX®, Publications service EURO STOXX 50®, iSTOXX® and STOXX® Europe 600 Financials are registered trademarks of STOXX Ltd. TRADEGATE® is a The annual report 2020 is both available in German registered trademark of Tradegate AG Wertpapierhandelsbank and English. CFF®, Vestima® is a registred trademark of Clearstream International S.A., Xemac® is a registred trademark of The annual report 2020 of Deutsche Börse Group is Clearstream Banking S.A. EEX® is a registered trademark of European Energy Exchange AG. available as pdf on the internet: www.deutsche-boerse.com/annual _ report
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Executive and Supervisory Boards Management report Financial statements Notes Further information | About this report About this report
Deutsche Börse Group’s 2020 annual report does not only document what happened in financial year 2020 but also provides a solid summary of how the com- pany defines and implements key action areas for its sustainability profile. In addition, the “Overview of key sustainability aspects” table shows the UN’s sustainable development goals (SDGs) that are ad- dressed by Deutsche Börse Group.
Our reporting of sustainability information and key performance indicators complies with the Global Reporting Initiative (GRI) Standards (Core option). A comprehensive overview of all GRI indicators (GRI index) can be found at www.deutsche-boerse.com > Sustainability > ESG ratings & reporting > GRI
Principles of sustainability reporting Our aim in our sustainability reporting is to achieve the highest possible degree of clarity and transpa- rency. The combined management report contains a separate section with a combined non-financial state- ment in accordance with sections 289b and 315b of the Handelsgesetzbuch (HGB, German Commercial Code). In line with this, the non-financial facts and fi- gures published in it generally refer to Deutsche Börse Group as a whole. Where the information on Deut- sche Börse AG differs from that on Deutsche Börse Group this is specifically mentioned. In addition, to- pics that are specific to certain locations and locally managed sustainability activities are identified as such.
Verification of non-financial key performance indi- cators KPMG AG Wirtschaftsprüfungsgesellschaft, an inde- pendent external auditor, has audited the content of the combined non-financial statement. KPMG’s Au- ditor’s Report on Deutsche Börse AG’s (consolidated) financial statements and combined management re- port as at 31 December 2020 also covers the assu- rance of the combined non-financial statement.
The separate limited assurance review opinion on all sustainability information contained in the GRI index can be accessed online at www.deutsche-boerse. com > Sustainability > ESG ratings & reporting > Annual report.
288 Financial calendar 2021
21 April 2021 Publication quarterly statement Q1/2021
19 May 2021 Annual General Meeting
27 July 2021 Publication half-yearly financial report 2021
19 October 2021 Publication quarterly statement Q3/2021
Deutsche Börse AG 60485 Frankfurt am Main www.deutsche-boerse.com