Deutsche Boerse responds today to pressure from shareholders to cut costs by deciding to launch an efficiency program and resume share buybacks.
The efficiency program targets 100 million cost savings per annum. The program is focused on optimizing operational costs while retaining planned investments in future growth. The program is expected to have a significant positive impact of 50 million on operational costs already in 2008. The full potential of the program will be realized from 2010 onwards. Total restructuring charges to achieve these cost savings will amount to 50 million, which will be fully provisioned in 2007.
As a result, Deutsche Boerse has set a guidance for total costs in 2008 of 1,130 million. The cost guidance for 2008 compares to an estimated total cost base for 2007 of 1,200 million, before the above mentioned restructuring charges for the efficiency program of 50 million. All costs are excluding consolidation of the International Securities Exchange. Closing of the ISE transaction is expected in quarter four of 2007.
Deutsche Boerse also decided on a revised financing concept for the ISE acquisition with a view to further optimize its capital structure and resume its share buyback.