Deutsche Boerse AG

XETRA:DB1

Earnings Call Transcript 2020-Q2

[Operator]

Good afternoon, ladies and gentlemen, and welcome to the Deutsche Börse AG Analyst and Investor Conference Call regarding the Q2 2020 results. [Operator Instructions]Let me now hand the floor over to Mr. Jan Strecker.

[Jan Strecker, Head of Investor Relations]

Welcome, ladies and gentlemen, and thank you for joining us today to go through our second quarter and first half 2020 results. With me are Theodor Weimer, Chief Executive Officer; and Gregor Pottmeyer, Chief Financial Officer. Theodor and Gregor will take you through the presentation. After the presentation, we will be happy to take your questions.The presentation materials for this call has been sent out via e-mail and can also be downloaded from the Investor Relations section of our website. As usual, this conference call will be recorded and is available for replay.Let me now hand over to you, Theodor.

[Theodor Weimer, CEO & Chairman of Executive Board]

Welcome, and good afternoon, ladies and gentlemen, here from my side. Before we present the results, let me begin with an update on how we dealt with the COVID-19 situation here at Deutsche Börse since the last earnings call in April 2020.Markets have recovered significantly because -- mid-March driven by unprecedented economic stimulus measures by central banks and rescue packages by governments. Also, many regions of the world are seeing an overall improvement of the COVID-19 situation. But the underlying risks, as you're perfectly aware, of COVID-19 remain high. The number of additionally -- of additional daily cases, for instance, just reached new record levels over the last couple of days, which was mainly driven by developments in United States, Brazil and India. Therefore, ladies and gentlemen, the crisis is unfortunately far from over. It is becoming increasingly clear. Operational and managerial methods and models are changing fundamentally in these days, and we need to adapt and we need to stay very agile, right, and we need to cope with the uncertainty.At Deutsche Börse, we are steadily on the way back to normality, but returning to the offices remains voluntary. The return is planned in a stepwise approach, reflecting the respective local situations. In most European countries, up to 50% of our staff may return to the offices, but there are also a few global locations where 10% on-prem work is still the maximum capacity. With the debate on lifting lockdowns around the globe on the one hand and the macroeconomic implications of COVID-19 on the other hand, market volatility in the second quarter was still at elevated levels. It was, however, far below the peak we saw in March. At the same time, we were faced with low or negative interest rates for the most important currencies. Therefore, and as expected, cyclicality became a slight headwind in the second quarter, which stands in strong contrast to the first quarter. Against this background, it is even more encouraging to see the continued, very positive secular net revenue growth performance of 7%, which is above the level of the last 2 years.Despite the weaker market environment, with cyclical net revenues being down 2%, we decided to continue to carry out our planned investments in growth, technology and regulation. This is what many of our shareholders encouraged us to do in order to continue to grow the business. As a result, the organic operating growth increased -- cost increased by 8% in the second quarter. With this, the adjusted EBITDA increased by 4% to EUR 483 million, and adjusted EPS stood at EUR 1.57 in the quarter.For the first half of 2020, net revenue increased by 17% to EUR 1.7 billion, and the adjusted net profit amounted to EUR 676 million, an increase of 16%. But even with the strong first half of the year, our guidance for 2020 of net profit of around EUR 1.2 billion remains unchanged. This is mainly due to the interest rate-related cyclical headwind we'll be phasing in the second half of the year.In terms of our outlook for the next couple of years, we have now scheduled our Investor Day this year to take place on Wednesday, November 18 in Frankfurt. In light of the COVID situation, it will be possible to participate in the event fully online, including the Q&A session. We will also have a few spaces available mainly for local attendees. At the event, we will present our strategy and the next midterm plan, which we call, as you know, Compass 2023. Also against the background of the COVID-19 situation, we will also dive deeper into the most important growth priorities over the next 3 years. Without disclosing too much and without saying anything which is spectacular, secular growth and M&A will continue to be the main pillars of our strategy.Let me now hand over to Gregor to present the details of the Q2 financials.

[Gregor Pottmeyer, CFO & Member of Executive Board]

Thank you, Theodor. Let me start with the group financials in the second quarter on Page 2 of the presentation. We reached 7% secular net revenue growth in the quarter and thus, fully achieved our target. Eurex was the biggest contributor with additional net revenue from product innovation, pricing and growth of OTC clearing.Clearstream and the IFS segment achieved solid secular growth as well mainly through custody services. Again, the secular growth, we saw a 2% decline of cyclical net revenue. This was the result of the interest rate-related decrease of the net interest income at Clearstream, which was not completely offset by the still higher equity market volatility.Inorganic initiatives added another 2% net revenue growth, primarily contributed by the Axioma acquisition. The operating costs amounted to EUR 300 million. It is adjusted for around EUR 42 million exceptional items, which were mainly driven by restructuring charges out of our structural improvement program. Without consolidation effects mainly resulting from the Axioma acquisition, operating costs increased by 8%.Aside from the increased investments, one of the operating cost growth drivers is a more even distribution of operating costs across the quarters compared to last year. For the third quarter, we are expecting further growth of overall operating costs but slightly below the 15% rate in the second quarter. For the fourth quarter, we are expecting flattish operating costs.The financial result included a one-off effect of around EUR 3 million on the early refinancing of our EUR 600 million hybrid bond in June. With the refinancing, we achieved significant interest savings as the new 1.25% instrument replaces the old bond with a coupon of 2.75%. This will help to improve the financial result to around EUR 14 million per quarter going forward.I'm now turning to the quarterly result of the segment, starting with Eurex on Page 3. While the total number of derivatives contract traded was down compared to the previous year, we saw a more favorable product mix and thus, a further improvement of the revenues per contract in the second quarter. Net revenue growth in the second quarter mainly resulted from the growing market share in euro-denominated interest rate swaps and a substantial increase of the margin fees. The margin fees were driven by consistently higher levels of collateral held in our clearinghouse throughout the quarter, even though equity market volatility declined compared to the peak we saw in March.In our commodities business, EEX, shown on Page 4, we saw some COVID-related headwinds in power spot and gas products in the second quarter because of lower energy consumption. Power derivatives continued to grow by double digits driven by developments in the European markets. In May, EEX launched trade registration services for the Japanese power market, which is the first product specifically designed for the Asian markets. As Japan continues to follow the course of ongoing deregulation in its power market, the demand for cleared long-term contracts and further hedging instruments continues to grow, which is a long-term opportunity for EEX.Let me turn to Page 5 and the FX business. While the FX market volatility came down compared to the first quarter, 360T was able to maintain stable volumes because of business generated from new clients. Furthermore, a more favorable product mix helped to achieve 8% net revenue growth.We are now turning to Page 6 and our cash market, Xetra, where we continued to see remarkable double-digit growth of activity and net revenue. Most of this was driven by equity market volatility, but there was also a continued sizable secular contribution from a further increase of market share. The market share in DAX securities increased by 5 percentage points year-over-year to 75% because investors appreciate the greater reliability offered by regulated exchanges compared to less regulated trading platforms. In addition, the strong growth in exchange-traded funds activity, partly, which relates to the trend towards passive investment, fueled the performance of the segment.As you can see on Page 7, in our post-trading segment, Clearstream, we saw continued solid growth of custody net revenue. This is mainly driven by growth of outstanding and fixed income securities. Looking at the debt financing needs of corporates and the low interest rates around the globe, this development should continue in the foreseeable future. Settlement activity was again mainly driven by the cyclical increase of trading activity in fixed income markets. With this, Clearstream was able to almost entirely offset the decline of net interest income by more than 50%. Some of the interest-related -- interest rate-related impact on the NII has been mitigated by the increase of the cash handling fee in the first quarter. For the full year, we are now expecting NII of slightly above EUR 100 million.The investment fund services segment, which you'll find on Page 8, continued to show a strong double-digit performance in the second quarter. This was driven by both cyclical and secular factors. Settlement mainly benefited from higher market activity, while custody and other revenue were driven by onboarding new clients, by the good performance of our distribution services and by Ausmaq in Australia, which we acquired last year.Slide 9 shows the new Qontigo segment, which consists of the Axioma analytics business we started to consolidate in September last year and the STOXX index business. While our acquisition has substantially strengthened this segment, its organic growth was rather muted in the past quarter. After the analytics net revenue had been above our expectation in the first quarter, the around EUR 14 million in the second quarter were slightly below our expectation. Apart from the revenue recognition under IFRS 15, this is mainly driven by the impact COVID-19 had on our sales and marketing activities. Our prospective clients at the moment simply have different priorities. In case the environment continued to be challenging for the rest of the year, we might not be able to reach our target of around 20% growth of the analytics net revenues in 2020. ETF license net revenue continued to be somewhat under pressure from the initially lower market levels in the quarter and outflows out of European products. But this was overcompensated by growth of other license net revenue.Let us now come back to our group financials on Page 10. With the exceptional development in the first quarter and the solid second quarter performance, we achieved strong double-digit net revenue and earnings growth in the first half of 2020. And while this exceeds our most ambitious expectations from last year, I need to point out that we cannot expect this development to continue for the rest of the year.On Slide 11, we provide you with an overview of the 3 components of net revenue growth in the first half of the current year. Consolidation effects resulted in additional net revenue of 3% or EUR 36 million. This was mainly driven by the inclusion of Axioma in September last year. In terms of methodology, the growth of Axioma compared to the first half 2019 was not included as a consolidation effect but as a driver of secular net revenue growth. Secular growth, being the key component of our strategy to increase net revenue, developed as planned and increased by 7% or EUR 107 million. All segments helped to achieve this, with Eurex being the biggest absolute contributor and 360T, IFS and Qontigo showing the higher secular growth rate. Due to the corona-related headwinds in the second quarter, the cyclical growth contribution decreased in the first half but still amounted to 7% or EUR 103 million.Adjusted operating cost, shown on Page 12, totaled EUR 591 million in the first half. Operating cost growth of around 7% was due to consolidation effects from M&A activities, primarily Axioma. Investments increased by 7% or EUR 38 million. This is primarily driven by the planned investments in growth and technology, an increase in personnel to support growth and costs to implement regulatory requirements such as CSDR. Furthermore, the exceptional COVID situation also required some extra spending on IT operations and security. Net inflation was flat as inflationary pressure in staff and other operating expenses was offset by savings from the structural performance improvement program. Mainly due to the favorable share price performance, variable and share-based compensation increased by 2% or EUR 11 million.In the last page of today's presentation, we would like to reiterate the outlook for 2020. We continue to expect at least 5% growth of secular net revenue in 2020. This will mainly be driven by further progress in the OTC clearing business, new Eurex products, the commodities activities of EEX, the expansion of foreign exchange trading and clearing services, growth in investment fund services as well as our index and analytics business, Qontigo. For net profit, we continue to expect growth to a level of around EUR 1.20 billion despite the very good results in the first half. This is mainly due to the cyclical headwind we will be facing at Clearstream because of a much lower net interest income in the second half of 2020.This concludes our presentation. Thank you for your attention. We are now looking forward to your questions.

[Operator]

[Operator Instructions] And the first question comes from Mike Werner, UBS.

[Michael Joseph Werner, Executive Director and Equity Research Analyst]

I guess just -- you talked about M&A continuing to be a core part of your strategy. I was just wondering if you could provide a little bit of color as to how those markets are potentially opening up. I know there's a lot of lead time with M&A, a lot of due diligence. Is that something that is starting to occur again now that lockdowns are starting to ease? Or how should we think about this from a timing perspective?

[Theodor Weimer, CEO & Chairman of Executive Board]

Thank you, Mike. I'm taking this one. It's very clear, M&A activity is increasingly picking up, very clear. The reasons for that are, from our point of view, the lifting of the lockdown as one driver in major European markets. That's point number one. The second driver might be or is probably the higher asset level prices, right, across the world and on a global basis. And thirdly, we see some very specific situations, right? And you are smart enough to understand what I mean by this. There are certain discussions, right, where people might need to sell something. What are we doing? We are looking at every situation, which is inside our 5 assets where we have said we are happy to do M&A. We look in each and every situation not just on the surface, we dig pretty deep. And secondly, we continue to create our own opportunities. And I might simply recall the situation of UBS Fondcenter, right? So we tried, and we are -- we love situations where we can create opportunities for us. Third, we are pretty cautious not to overpay, right? It's very clear, right? But it's very clear, we understand what the market prices are. And we see also, in some cases, a high level of competition on certain highly demanded assets.

[Michael Joseph Werner, Executive Director and Equity Research Analyst]

And just a potential quick follow-up. Are there any particular areas within those 5 that you've noted in the past where you see unique opportunities emerging from the recent crisis in the economy?

[Theodor Weimer, CEO & Chairman of Executive Board]

Nice try. Next question. Sorry, Mike.

[Operator]

And the next question comes from Johannes Thormann, HSBC.

[Johannes Thormann, Global Head of Exchanges and Analyst]

Johannes Thormann, HSBC. First of all, as you upgraded your net income from banking guidance for 2020, is there -- is your outlook for 2021 still the same? And what about the still higher collateral levels? Do you expect them to come back? Or what's your view on this? And probably, a second short one on the tax rate for this year. So it's currently a bit higher. And what's the outlook for that in the next year as well?

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. So with regards to the tax rate, there's no change. So it's unchanged, 26% on an adjusted basis. With regard to NII, so we had a little bit higher NII in the second quarter due to the fact that we had some positive impact out of some mismatched treasury transactions. And that will expire, so for the -- that's the reason why Q2 was a little bit higher. So our view is still unchanged of a EUR 15 million to EUR 20 million on a quarterly basis and the EUR 70 million we continue to expect for 2021.

[Operator]

The next question comes from Arnaud Giblat, Exane.

[Arnaud Maurice Andre Giblat, MD & Research Analyst]

Yes. I had one question on costs. I was wondering, first of all, why you don't break out any COVID-specific savings. I'd assume that'd driven expenditure -- an expense, sorry, was down in the quarter. So if you have any granularity around that, that would be useful. And secondly, clearly, costs organically are up 8% year-on-year for the group, a lot of investments. I'm just wondering if you could detail a bit more about which specific projects you might be investing into. And what would be the timing of any revenues related to those investments? When are those revenues might be coming through?

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. So just to reiterate with regard to our cost guidance for the full year, I told you that for Q3, we still expect a double-digit operating cost increase, slightly below the 15% you have seen in the second quarter and in the fourth quarter. So we expect some flattish operating expenses. So here, you can see that our cost development is a little bit more even distributed around the 4 quarters than it was compared to last year where you have just seen a bigger increase in Q4. So that's obviously one impact. Another bigger impact in Q2 is obviously our -- specifically, our share-based-related compensation. So highly increased share price leads basically to much higher share-based payments compensation. So that was one of the main reasons. Then we already reported in Q1 that we have some EUR 5 million, EUR 6 million additional operating IT cost out of the COVID-19 crisis, what impacts that kind of development.In principle, the majority of our investments goes into growth initiatives, obviously, goes into technology but also into regulatory things like CSDR. So -- and overall, we told you that from a secular perspective, so we expect to grow by 5% or even more. And that was good that our net revenue grew by 7%. And in principle, we say look for that kind of secular growth of 5% and plus. We also need some roughly 5% operating cost increase or additional investments. So -- and when you consider that for the full year 2020, then we are perfectly in line with that development on a constant portfolio basis.

[Arnaud Maurice Andre Giblat, MD & Research Analyst]

That's very useful actually. If I can just make sure I've understood well. I mean, basically, ex all these one-offs, the share price increase and stuff like that, in a normal quarter, we should be thinking business-as-usual costs go up by inflation, plus or minus a little bit. And then you got 5% investment in growth initiatives on top.

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes, exactly. So it's always our target with regard to our continuous improvement program, our cost discipline that we are able to cover inflation, right? So that's basically 2% to 3%. So this, we want to cover via our cost savings continuous improvement initiatives. So that is basically that we can compensate for that. And so then, we would have roughly 5% for strategic growth, technology and regulatory initiatives.

[Operator]

The next question comes from Ian White, Autonomous Research.

[Ian White, Research Analyst]

Two questions from my side, please. First of all, on EEX. You've highlighted a couple of opportunities there in the Nordic region and in Japan. I just wondered how quickly might those start to deliver incremental revenues. And what is the mid-term opportunity that you see in each of those markets, please? That would be question one. And second question, I hope I'm not front-running your strategy update later in the year, but should we expect to see profit growth in 2021. Do you think at this stage, from a EUR 1.2 billion level that you're guiding us to for this year, do you expect that number to increase in 2021, please?

[Jan Strecker, Head of Investor Relations]

Yes. Ian, we kind of got the first question here on EEX and expansion into the Nordics and Japan, so Gregor will take that. I think you'll have to repeat the second question again because your line is really bad.

[Ian White, Research Analyst]

Okay. [ That might be due to the Internet ] connection. But the second question was just, should we expect to see profit growth next year from the EUR 1.2 billion level that you're flagging for this year? Just to the extent you're prepared to give a comment on that ahead of the strategy update this year.

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. Okay. Thanks, Ian. So starting with the EEX question. So obviously, you have seen -- or we have seen some flattish development of EEX in the second quarter. And there was some COVID-specific elements. So the energy consumption, the market overall was clearly down. Energy prices were clearly down as the industry basically collapsed, and there was less demand on that side. So that's the main reason for that kind of flattish development. As now the industry production continues to be opened and continues to increase, so we still see a good chance for the second half year of EEX to come back to growth levels we have already seen. And there are different initiatives, what will support that in that area. With your specific question, for instance, with regard to Japan, so that will start now, and it's good that we've got a license here to start in that market. But the deregulation of the Japanese power market is just at the beginning, and it will take some time before you will see some real material impact on the EEX side.With regard to the Nordic region, so talking about North Pole, and so yes, there is obviously some competition. But so far, we are able to manage that quite reasonable. And it's also, for us, a chance to go into the Nordic region. So we -- the other has the chance to go to our European market. But so far, we are able to manage that. With regard to your second question, profit and growth, what do we expect for '21. I think it's too early to talk about that. So we have to see what is the COVID situation, do we expect a second wave here, and that's why we said we want to postpone our Capital Markets Day to November 18 when we have more and more visibility around the whole situation. But you can assume that our growth ambition will continue on a secular basis. And also with regard to M&A, so that will be really core of our strategy, what we will communicate on our Investor Day on November 18.

[Operator]

The next question comes from Andrew Coombs, Citi.

[Andrew Philip Coombs, Director]

Just a couple of follow-ups on costs. I guess it will drill down to one question but a couple of parts within that. The first of which is if we look at the split between your IT service providers and IT costs, most of the jump is in the service providers, which I think you elaborate is due to software development. Can you just talk a bit more about your policy of outsourcing versus insourcing on these projects? That would be the first question. Second question is, what's included in miscellaneous? Because that's obviously seen a big jump up in costs this year. And then the third and final one, just to round out, is, obviously, T&E has dropped from EUR 5 million to EUR 6 million per quarter to basically 0. One would assume that will jump back next year. Is there an offset in the other lines to absorb that jump-back?

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. So starting with the third question. So in principle, so our target is to achieve a secular growth in our net revenues of more than 5%. And therefore, we also need to invest in a comparable month for the next year. And so that's our principal statement here. And we think we are able to manage that on that basis. Your first question with regard to IT cost, service costs, outsourcing, insourcing, so in principle, over the last years, we started also to insource some activity, and that's obviously an efficiency increase. What you can do here, if you pay expensive external consultants, is obviously to do many things better to do with internal resources. And then you have also to do the opportunity to use not in the high location -- high-cost location like Frankfurt and Luxembourg for us, so we do that primarily in our near cost -- near-shore cost locations like Prague or Cork where the costs are more than 60% lower than in this high-cost location.Therefore, there is some motivation for us to continue with some more insourcing. But still, there's currently a higher amount of external consultants, what we have. And with regard to any specific situation, we have to make a decision whether we want to have strategically that kind of resources on board or whether we want to outsource that via consulting. And your second question around miscellaneous cost. So it's a mix of different costs, what we summarized here, like some membership fees we have to pay, some costs for claims, bad debt. So it's a different type of things. Though the main reason for our cost increase are unchanged, so our invest in personnel resources and our invest in consulting costs, so what we invest in our strategic initiatives in growth and technology and in regulation.

[Andrew Philip Coombs, Director]

And then on the ability to absorb any T&E increase next year?

[Jan Strecker, Head of Investor Relations]

What? Say it again. What increase?

[Andrew Philip Coombs, Director]

T&E, travel and entertainment. I think usually, you've been running in the EUR 5 million to EUR 6 million per quarter, and it's obviously dropped pretty much to 0 in the second quarter. So one would assume that comes back next year. And so I'm just thinking about the run rate you've been to. You gave us Q3 and Q4 guidance, but just thinking into next year, if that travel and entertainment cost comes back, is there any other flex in the other lines to absorb it?

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. Obviously, the travel and entertainment costs are much lower this year compared to last year. But these numbers are not, in Deutsche Börse, such big numbers that you -- would be there a really material impact. So we are talking about here EUR 10 million, EUR 15 million, plus or minus. So that's, on our cost base, roughly 1%. Yes, there will be some impact, but you always have some pluses and minus of the cost development. So that is not a big issue for us.

[Theodor Weimer, CEO & Chairman of Executive Board]

And we should not underestimate the fact that we structurally see that, especially the business travel cost, they will stay structurally lower than they were in the past. It's very clear. We have invested a lot in all the video conferencing and so forth. And therefore, we are much more effective. Even -- we know it now, even beyond COVID-19, we will dramatically reduce the travel expenses.

[Operator]

The next question comes from Martin Price, Jefferies.

[Martin Gerald Price, Equity Analyst]

I was wondering if you could provide some thoughts on the outlook for buy-in agent. Given the delay to the implementation of CSDR, just wondering if you're continuing to invest in that project. Or will you perhaps prioritize other initiatives until there's some clarity around whether the buy-in rules actually get implemented now?

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. Martin, you closely monitor current developments here. Yes, it's true. There's currently a discussion within the EU to postpone settlement discipline regime for CSDR. So there were some concerns from bigger customers not to fulfill that criteria in that time horizon. Therefore, it's not finally decided, but there is some probability that, that settlement discipline regime could be delayed, and it originally was intended to start in February '21. So we will see whether there is a delay of whatever time horizon of 6 or 12 months. We do not know today, but there is some probability. With regard to our preparation, so we would be ready to deliver that kind of services. And I already told you that we expect in the first year already some double-digit million net revenues out of that kind of business. If the regulators finally decides to postpone it, then obviously, that revenue increase will postpone.

[Operator]

The next question comes from Gurjit Kambo, JPMorgan.

[Gurjit Singh Kambo, Head of Diversified Financials Research]

Just 2 quick questions. Firstly, on COVID-19, I'm just trying to understand, during the quarter, was the impact on sort of cost sort of neutral, positive, negative in terms of -- there's probably savings on travel and entertainment, but obviously, you've said you've invested in IT. So just trying to get a sense of whether there's sort of any meaningful directional impact of COVID if you put those 2 things together. And then secondly, just on the analytics division, are you seeing any sign yet that clients are starting to reengage, starting to buy more analytics from you? And just how is that client base geographically split for the analytics services?

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. So on the cost impact of COVID-19, so they are different. There are always plus and minuses. So I told you that roughly 1% out of our EUR 591 million was COVID-related in increasing our capacity and operational basis. With regard to analytics development, yes, obviously, Q2 was a very frustrating situation, specifically for our colleagues in the U.S., and therefore, it was quite challenging to make progress here because our customers have simply had other problems than to optimize some kind of processes here. And therefore, we hope that we can get better access to our customers in the second half year. But nevertheless, we expect that the development is lower than we originally expected and that it will postpone some in '21.

[Operator]

Okay. And at the moment, the last question comes from Chris Turner, Berenberg.

[Christopher Myles Turner, Senior Equity Analyst]

Yes. It's Chris Turner from Berenberg. Just one question, if I may, on the power spot power market at EEX. It looks like you rolled out a new incentive structure in Q2. It seemed on the face of it to give more of the economics to the customers. Have I got that right? And then more broadly, can you explain, I guess, what was wrong with the old incentive structure and why you decided to revisit the pricing there?

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. So in principle, the power spot market was impacted by a clearly reduced demand of the industry. So market volumes were clearly down. And the same, we have seen that the energy prices were also clearly down. So that was the reason why power spot market was clearly negatively impacted. And there were some other smaller things, but this will disappear in the second half year. So overall, we think, as I mentioned earlier, so that EEX still has a good chance to -- in the second half year this year to come back to growth rates we are used to seeing.

[Operator]

And we have one more question coming from Benjamin Goy, Deutsche Bank.

[Benjamin Goy, Research Analyst]

One question on Eurex, in particular on the index derivatives. Now it's a couple of quarters where your revenue per contract has improved. So I was just wondering, is this the new run rate here, thanks to your product innovation? Or yes, what should we assume going forward?

[Gregor Pottmeyer, CFO & Member of Executive Board]

Yes. As you see that, that continues to increase, so there's a positive development on our product mix. And the main reason is that that's triggered also for our newly developed products where we have a higher margin, and we expect that there's a chance that this will continue.

[Jan Strecker, Head of Investor Relations]

All right. This concludes our call today. Thank you very much for your participation, and have a good day.