Deutsche Börse Group | Annual report 2020 Executive and Supervisory Boards | Letter from the CEO Management report Financial statements Notes Further information Deutsche Börse Group Annual report 2020 Excerpt: Deutsche Börse AG (disclosures based on the HGB) 15 Deutsche Börse Group nnual report 020 Executie and upervisory Boards Management report | Deutsche Börse AG (diclosures based on the HGB) Financial statements Notes Further information Deutsche Börse G (diclosures ased on the GB) The annual financial statements of Deutsche Börse G are prepared in accordance with the proisions of the German ommercial ode andelsgesetzbuch, GB and the supplementary proisions of the German tock orporation ct ktiengeset, ktG and are the underlying asis for the explanations that follow. Business and operatin environment General position Deutsche Börse AG is the parent company of Deutsche Börse Group. The parent company’s business activities include first and foremost the cash and derivatives markets, which are reflected in the urex financial deriaties and etra cash equities segments, as well as index usiness Deutsche Börse G also operates essential parts of Deutsche Börse Group’s information technology. The deelopment of Deutsche Börse Group’s Clearstream (post-trading segment is reflected in Deutsche Börse AG’s business deelopment, 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 described 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 020 financial year, so above the company’s expectations. Total costs (staff costs, amortisation of intangible assets and depreciation of property, plant and equipment and other operating expenses rose y .3 per cent et profit went up y 40.7 per cent compared with the preious year. Deutsche Börse G's Executive Board considers the company’s performance in the 2020 financial year to be good. Performance figures for Deutsche Börse G Sales reenue y segment 2020 2019 Change 2020 2019 Change €m €m % €m €m % Sales reenue ,563.3 ,423.5 9.8 Eurex financial 1) ,017.7 924.4 10.1 Total costs 957.7 884.6 8.3 deriaties Net income from EEX (commodities) 18.2 14.8 23.0 765.2 542.9 40.9 euity inestments 360T foreign exchange 0.6 0.4 50.0 EBTD ,470.2 ,181.2 24.5 Xetra securities trading) 387.3 352.01) 10.0 Net profit for the 1) 1,161.9 825.9 40.7 Clearstream post-trading 111.9 91.6 22.2 period IFS inestment fund arnings per share 23.7 15.0 58.0 6.33 1) 4.50 1) 40.7 serices (€) Qontigo index and 3.9 25.3 -84.6 analytic usiness) 1) Calculation ased on weighted average of shares outstanding Total 1,563.3 1,423.5 9.8 1) Previous year adjusted 11292 Deutsche Börse Group Annual report 2020 Executive and Supervisory Boards Management report | Deutsche Börse AG (diclosures based on the HGB) Financial statements Notes Further information Results of operations of Deutsche Börse AG Deutsche Börse AG’s net revenue rose by 9.8 per cent in 2020 to €1,563.3 million (2019: €1,423.5 million). At €1,017.7 million, the largest contribution to revenue came from the Eurex (financial derivatives) segment (2019: €92.4 million). The breakdown 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 EX (commodities) and 60T (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 shown in the section “Qontigo (index business) segment”. It is orth noting that the business development of the STOXX Ltd. subsidiary does not directly impact upon the business performance of Deutsche Börse AG. Comments on the business development in the Xetra (cash equities) segment can largely be found in the “Xetra (cash equities) segment” section. Revenues 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 8.3 per cent year-on-year (209 €884.6 million). For a breakdown, please refer to the table “Overvie 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 ,472 in the prior year to ,572 in the 2020 financial year. Amortisation of intangible assets and depreciation of property, plant and euipment increased to a total of €63.2 million in the year under review (2019: €59.1 million). Other 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 €40.4 million (2019: €228.1 million). Earnings before interest, tax, depreciation and amortisation (EBITDA) increased to €1,40.2 million (2019: €1,181.2 million). Net profit for the period amounted to €1,161.9 million, representing an increase of 0.7 per cent (2019: €825.9 million). 1139 Deutsche Börse Group Annual report 020 Executve nd upervsory Bors Management report | Deutsche Börse AG (diclosures based on the HGB) Fnncial stteents Notes Further norton Deeopent of profitability Deutsche Börse AG’s return on equity expresses the ratio of net income after taxes to average equity vailble to the copny uring the course o . Return on equity ncreased rom 9.9 per cent n 9 to .5 per cent n the yer under revie. Financial position of Deutsche Börse AG As at the reporting date, cash and cash equivalents amounted to €518.4 million (9 €849.3 millon nd ncluded bnk eposits on current ccounts s ell s term eposits nd other short-ter eposts. Ths osition s or the ost rt ade up ro csh. Deutsche Börse AG has external credit lines available of €605.0 million (2019: €605.0 million), which ere not yet rawn s t 1 December 020. oreover, the copny hs comercial aper proramme n lce, hch los or lexible nd short-term financings of up to €2.5 billion, in various currencies. At the end of the yer there as no commercial aper outstanin. Through Group-wide csh-poolng system, Deutsche Börse AG ensures n optu llocaton of liquidity throughout Deutsche Börse Group; n ths ay, the parent entty kes sure that all subsiaries re n osition to honour their yment obligtions t any te. 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, plese reer to the “Financial position” section. In the 020 inncial year, Deutsche Börse AG enerted csh lo ro oerting ctivities o €889.9 million (2019: €945.1 million). The reduction is particularly due to significantly higher recevbles ro ffiliated companes. Csh lo ro investing activities amounted to €-3.9 million (2019: €495.0 million). The decline is relate artcularly to the nvestents ade n the reortng yer. The equity nvestents n lerstrem Holding AG increased by €150 million, in DBS Inc. by €98.4 millon nd n 60T Treasury ystes AG by €37.5 million. Overvie of totl costs Csh lo sttement condensed) 2020 2019 Change 2020 2019 €m €m % €m €m Stf costs .1 8.6 -.2 Csh lo ro oertn ctvites 889.9 9.0 Dereciation n .2 9.1 .8 amortstion Cash low rom nvestng ctvtes -.9 9.0 Other oertn .4 .9 .9 Csh lo ro inncin ctvites -.5 -8.1 epenses Cash and cash equivalents as at 48.8 47.3 Total 957.7 884.6 8.3 31 December 1149 Deutsche Börse Group Annua report 020 Executive and upervisory Boars Management report | Deutsche Börse AG (diclosures based on the HGB) Financia statements Notes Further information Cash flow from financing activities amounted to €-521.5 million in the year under revie (2019: €-486.1 million). A dividend of €531.9 million was paid for the 2019 financial year. Cash and cash equivalents amounted to €48.8 million as of the reporting ate December (2019: €47.3 million). It is made up of liquid funds of €518.4 million (2019: €849.3), less cash-pooling liabilities of €469.6 million (2019: €801.9 million). Assets of Deutsche Börse AG As at December 20, the non-current assets of Deutsche Börse AG amounted to €5,672.4 milion (2019: €5,349.8 million).