P&L Check

Deutsche Börse: Once Bitten, Twice Shy

  • Why it matters

    Why it matters

    Deutsche Börse, Germany’s biggest stock exchange, is still reeling from the collapse of its planned merger with the London Stock Exchange.

  • Facts

    Facts

    • Deutsche Börse, hit by its failed merger with the London Stock Exchange, is exploring alternative ways to grow its business.
    • Its net profit jumped 18 percent last year to around €722 million and it’s aiming for an increase of 10 to 15 percent this year.
    • Its Clearstream and Eurex units have been delivering strong profit growth, more than offsetting a 34 percent slide in earnings at its Xetra cash market segment last year.
  • Audio

    Audio

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Börse in Frankfurt/Main
Deutsche Börse has ruled out more big mergers after the failed tie-up with the London Stock Exchange. Source: DPA

In many ways, it’s been an annus horribilis for Germany’s Deutsche Börse, whose grand plan to create one of the world’s largest securities and derivatives markets operators by merging with the London Stock Exchange collapsed in the wake of the Brexit vote.

The fiasco has left Chief Executive Carsten Kengeter weakened and grasping for a new growth strategy. Shareholders are unhappy, even though they’re getting a 10 cent dividend increase to €2.35, or $2.60, per share because Deutsche Börse’s business remains sound and profitable. Last year, the company delivered an 18 percent increase in net profit to around €722 million.

For the moment though, the results are secondary to the failed merger, which cost Deutsche Börse millions in fees. Added to that, Mr. Kengeter faces an insider trading probe, with prosecutors examining whether a share purchase plan created for him in 2015 came at a time when Deutsche Börse was aware that a merger with the LSE was likely.

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