Deutsche Boerse Unsp/Adr

Good afternoon, ladies and gentlemen, and welcome to the Deutsche Werbe AG analyst and investor conference call regarding the first quarter of 2026. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions following the presentation. Let me now turn the floor over to Mr. Jan Strecker.

Welcome, ladies and gentlemen, and thank you for joining us today to review our financial results for the first quarter of 2026. Present on today's call are Stefan Leitner, our Chief Executive Officer, and Jens Schulte, Chief Financial Officer. Stefan and Jens will take you through the presentation. Following their remarks, we will open the line for your questions. The presentation materials have been distributed by email and are also available for download on our investor relations section of the website. This call is being recorded and the replay will be made available shortly after the conclusion of today's session. With that, let me now hand over to you, Stefan.

Thank you, Jan, and welcome, everyone. As the opening chart makes clear, Q1 was more than a good start. It was a strong one, and it reflects the quality and resilience of what we have built. Our structural growth drivers continued to deliver and accelerate, and our model benefited from a spike in volatility. Together, these dynamics put us well on track to reconfirm our ambitious full-year outlook. Let me therefore first comment on recent events and the resilience and performance of our operations. We have started the year in a market environment characterized by a sharp rise in geopolitical tensions, resurgent inflation, and rapidly shifting interest rate expectations, all of which drove a significant increase in market activity. In this period of heightened volatility, we fulfilled our core mission, providing the trusted infrastructure that enables market participants to navigate turbulent markets with confidence. I want to explicitly, therefore, thank our employees whose dedication ensured our systems operated seamlessly and with exceptional resilience, handling new record volumes without an issue. Turning to strategic momentum. The themes set out in our leading the transformation strategy are gaining momentum alongside geopolitical developments, and the world is moving increasingly in our direction. Take digital assets and tokenization. We have been investing in this space for years, building regulated infrastructure while others were still debating whether this was a real market. That conviction is now being validated at scale across the Atlantic and increasingly across Asia. Digital assets are moving from the periphery to the mainstream of institutional finance, and we are not a late arrival to this story. We are at the heart of it with the infrastructure, the regulatory standing, and the institutional client relationships to capture this opportunity as it now finally scales. A concrete expression of this strategic acceleration is our $200 million strategic investment in Kraken, combining Kraken's deep liquidity and crypto-native technology with our trusted market infrastructure, extensive institutional client network, and regulatory expertise to create the secure and compliant gateway our clients are demanding. And take our conviction in the European opportunity. The European Commission's Market Integration and Supervision Package is a landmark regulatory initiative that goes to the heart of what we do as the European champion. Its ambition is clear, reduce fragmentation in EU capital markets, strengthen European competitiveness, harmonize market supervision, and enable modern technology adoption across financial market infrastructure. All of these points... played directly to our strengths. We have spent years building exactly the kind of integrated, technology-enabled, regulated market infrastructure that the MISP is designed to foster and promote. We are not adapting to this agenda. We are already living it. And as the leading pan-European market infrastructure providers, spanning trading, clearing, settlement, and custody, we see ourselves as structurally very well-placed to benefit from and actively shape this regulatory evolution. This is a conversation that is accelerating, and we intend to help shape its outcome. Taken together, these are not coincidences. They are confirmations that the strategic moves we have made years ago and reconfirmed in December were the right ones, and that our competitive position is stronger today than it has ever been. With that as a background, let me now take you through the highlights of this quarter. Six points I would like to highlight to you. The first one, we delivered net revenue growth of 12% without treasury results. This performance was fueled by the powerful secular trends that formed the backbone of our strategy, and I just highlighted, and it was amplified by heightened market activity in March. The second point on this quarter is we demonstrated broad-based strengths across our portfolio. achieving double-digit net revenue growth without the treasury results in five of our eight business areas. This mirrors our 2025 full-year performance and is a testament to the exceptional balance of our portfolio. What makes this particularly compelling is that the drivers of this growth are genuinely diverse. Yes, heightened market activity in March provided a tailwind for some of our businesses, and our infrastructure is designed to capture exactly that. But the majority of our growth this quarter was, again, structural in nature, rooted in long-term secular trends. Cyclical and secular growth are not in opposition in our model. They reinforce each other. And the portfolio that can deliver double-digit growth across five business areas in different market conditions and for different underlying reasons is precisely the kind of resilient, compounding growth engine we set out to build and that we are now delivering on. Let me give you some examples. In software solutions, continued double-digit growth in annual recurring revenues was driven by our fast transformation in client wins. I want to highlight in particular the SimCorp Global Summit that took place in Copenhagen last week, which was a powerful showcase of our investment management's performance platform direction. We presented a concrete AI roadmap for SimCorp covering how we are embedding AI across portfolio management, analytics, and client workflows. This is not a future ambition. It is a live program of delivery. And more broadly on AI, we continue to make good internal progress across the group. We have particularly validated our thesis that the impact of AI on coding and therefore productivity is material. allowing us to achieve more without our planned investment budget. This is a structural efficiency gain that supports our operating leverage story and that we talked a lot about in London when we met in December. As a second highlight out of our portfolio mix in fund services, we are capitalizing on two powerful and reinforcing structural trends, also this quarter. The industry-wide shift towards outsourcing of fund administration and the structural acceleration of capital markets-based old-age savings across Europe. As more Europeans rely on capital markets to secure their retirement, demand for scalable, efficient fund infrastructure grows with it. And we are the natural beneficiary of that trend. The result this quarter was new record levels of assets under custody as well as transactions, and it shows how the machine is working. A third area I would like to elevate is security service. With continued strong fixed income issuance and a significant uptick in retail investor activity, our custody and settlement volumes are at an all-time high. So you've seen the breadth of our portfolio. That means for the third element I would really like to pinpoint for this quarter is that our treasury results inflected positively, reaching 204 million euros. This marks the first sequential increase since 2024 and was driven by higher cash balances at the beginning of the year. As we have previously communicated, we expected the cyclical headwinds on the Treasury results to subside, and this quarter's result is clear confirmation of that trend. As a result of the two points I now highlighted, The fourth point is really that these factors combine to drive an accelerated all-in performance. Total net revenue grew 9% to 1.64 billion euro in this quarter. Importantly, our disciplined cost management translates this top-line growth into even stronger bottom-line performance. Total EBITDA increased by 10% to a new record of more than 1 billion, a very special number in the first quarter, delivering a strong EBITDA margin of 61%. This also means that the points I highlighted as a fifth element for the quarter and comment I would like to make is that the performance in the first quarter provides the right momentum for the rest of the year. You know us. We remain disciplined and grounded in our assessments. We do not get carried away by a strong quarter, and we are mindful that the heightened market volatility that characterized March has since normalized. Activity levels have moderated across most asset classes in April, and our guidance already assumes a more normalized trading environment for the remainder of the year. That said, our strong start puts us slightly ahead of our internal plan, and the underlying structural drivers of our business remain firmly intact. Based on these results and our outlook, we are reaffirming our ambitious full year 2026 guidance with confidence, but as always, with discipline. And that brings me to the last point, my sixth comment on the quarter that is turning to an update on all funds. The acquisition remains firmly on track. Following a strong and clear vote of support from all fund shareholders in the scheme of arrangement, we have initiated the customary pre-notification phase with the European Commission, an important procedural milestone that marks the beginning of the substantive review process. In parallel, we are actively pursuing all other merger control and regulatory approvals in the relevant jurisdictions. All filings are progressing as planned, and we continue to expect completion of the transaction in the first half of 2027. I'm also pleased to note that all funds delivered a strong Q1 itself, with net revenue excluding net treasury income growing by 10%. This further reinforces our conviction in the strategic and financial rationale for this combination. I also want in this context to acknowledge the sudden and tragic passing of Juan Alcaraz, the founder of AllFunds. Juan's vision and entrepreneurial drive built one of the world's most important fund distribution platforms. And our thoughts are with his family, but also with the many colleagues at AllFunds that have a long history with him. He's a true leader and inspiration for the industry. We look forward to lead that industry with the transaction completing early in 2027. Let me close with an update on our financial position and capital returns. Our balance sheet is robust with our key rating metrics at year-end 2025 finishing better than expected, comfortably within our target ranges and providing significant financial flexibility. On capital returns, we remain fully committed to providing our shareholders with attractive and growing returns. Our 500 million euro share buyback program launched earlier this year is progressing well with approximately 42% of the total volume executed to date. And following shareholder approval at our AGM on May 13th, we will pay a dividend of 420 euro per share. Also here, a strong sign of continuity, continued growth. All of this brings me to a simple conclusion. Year one was a strong start to 2026. We delivered broad-based growth, demonstrated operating leverage, and executed decisively on our key strategic initiatives. We are confident in our trajectory, fully on track, and committed to delivering on our goals. With that, I will hand over to Jens for a closer look at the financials.