Based on preliminary figures published by the Company on Tuesday, Deutsche Brse AG generated earnings before interest, taxes and the impairment charge for US options exchange ISE of 1,053.4 million in 2009 (2008: 1,508.4 million). Including the ISE impairment charge of 415.6 million, EBIT amounted to 637.8 million. Sales revenue for the year was 2,061.7 million (2008: 2,455.1 million). The 16% decline was largely due to the reluctance of market participants to trade on the cash and derivatives markets as a result of the financial and economic crisis. Costs before the ISE impairment amounted to 1,264.4 million in 2009, down on the previous year (2008: 1,284.0 million).
Net income for 2009 amounted to 496.1 million, as against the previous years 1,033.3 million. Adjusted for the ISE impairment, this results in a decrease in net income of 32% to 700.2 million.
The companys Executive Board decided today to streamline the Groups management structure and to implement further cost initiatives with sustainable cost savings totaling approximately 50 million per year. With these steps Deutsche Brse accelerates its ongoing efforts to further increase operational efficiency. At the same time, the Company will increase its expenses for growth initiatives in 2010 by more than 50% to around 100 million. The cost initiatives will be started with immediate effect and are due to be fully implemented by 2011. The Company expects implementation costs of around 40 million, the majority of which will be provisioned in the first half of 2010.
The Company reduces its cost guidance for 2010 to a maximum of 1,250 million before taking into account provisions for the cost initiatives of around 40 million. The forecast includes a planned increase in expenses for growth initiatives of more than 50% to around 100 million in 2010. The Executive Board proposes a stable dividend of 2.10 per share. Beyond the proposed dividend, the company does not currently plan any distributions in the form of share buybacks.
Financial year 2009 was shaped by the effects of the financial market crisis on our clients, says Reto Francioni, CEO of Deutsche Brse AG. Nevertheless, we closed the financial year with a clear profit. This is primarily due to our diversified business model, which is already showing a return to growth in some areas and products. We will further expand our clear strengths in technology, risk management services and product innovation while maintaining our strict approach to cost management.
Streamlining of management structure and further cost initiatives totaling around 50 million per year The financial crisis will result in structural changes in the financial markets as well as new customer needs. We will increase expenses for growth initiatives in 2010 by more than 50% over the previous year, to around 100 million, in order to seize opportunities arising from the changing market environment. This will serve to expand the Companys strengths in technology, risk management services and product innovation. At the same time, the Company continues its strict approach to cost management in light of a changing market environment.
In addition to reducing the number of managers, the cost initiatives also include a further structural reduction of non-personnel costs with sustainable cost savings totaling approximately 50 million per year from 2011. The planned measures therefore complement both the 2009 program to reduce discretionary fixed costs by 70 million a year and the restructuring and efficiency program launched in 2007 saving 100 million a year. In the context of the restructuring and efficiency program, Deutsche Brse Group already gathered positive experience with the build up of the Prague location, which already comprises around 250 employees. The possibility of relocating further positions will be analyzed as part of a new location concept. Based on that, the Company is considering further efficiency measures in the framework of an initiative to optimize operational processes and structures. The companys Supervisory Board was informed of the cost initiatives and potential further steps today, and has expressed its support for the Executive Boards plans.
D.C.