Stock market: Double-digit sales and earnings growth by 2026
Deutsche Börse is raising its sales revenue and profit expectations for the coming years. Overall, the company anticipates average annual growth in net revenue of around ten percent compared to 2022 to around EUR 6.4 billion in 2026, as the DAX-listed company announced at an investor conference on Tuesday. The Frankfurt-based market operator aims to increase its operating profit (EBITDA) by an average of around eleven percent annually up to and including 2026 to around EUR 3.8 billion.
The "Horizon 2026" strategy follows on from the growth plans presented in fall 2020 under the title "Compass 2023". "In recent years, we have significantly expanded our strong business model into areas with stronger growth and recurring income," said Group CEO Theodor Weimer. The aim now is to continue the strong growth under our own steam and to take advantage of opportunities such as the Simcorp acquisition, which will be incorporated into a new Investment Management Solutions (IMS) segment. "And thirdly, we want to expand our leading role in the digitalization of trading classes," emphasized Weimer.
Deutsche Börse had already raised its forecast for the current year when it presented its figures for the third quarter in mid-October. Reasons for the optimism include: Higher interest income and the recently sealed takeover of Danish software provider Simcorp for 3.9 billion euros. With the largest acquisition in its history, Deutsche Börse aims to strengthen its data business and make itself less dependent on fluctuations on the financial markets. However, the share price of the DAX-listed company has fallen significantly since the takeover was announced in April of this year.
Shareholders are now set to benefit from the first share buyback program in six years, as announced by Deutsche Börse on Monday evening: starting in the first quarter of 2024, shares worth up to 300 million euros are to be acquired.
In future, the company intends to distribute 30 to 40 percent of the net profit for the year attributable to shareholders as a dividend. Previously, the target was a ratio of 40 to 60 percent. However, as the Management Board expects profits to rise, it is planning to increase the dividend per share. Shareholders could also benefit from further share buy-backs: "To the extent that excess liquidity is available, the company intends to supplement the dividend with share buy-backs," Deutsche Börse announced.
Deutsche Börse's growth strategy includes expanding its role in the digitalization of various trading classes, which involves multiple stock exchanges worldwide. The company's optimistic forecasts for the future include average annual sales revenue growth of around 10% and an increase in EBITDA by an average of 11% up to 2026, potentially providing opportunities for investors involved in stock exchanges.
Source: www.dpa.com
