April 25, 2018 / 4:46 PM / a year ago

Deutsche Boerse lays out growth plans under new boss

FRANKFURT (Reuters) - Deutsche Boerse (DB1Gn.DE) on Wednesday announced a framework for its strategy under its new chief executive that aims to make the German company the leading European exchanges group, as it reported an 11 percent drop in net profit in the first quarter.

FILE PHOTO: The German share prize index (DAX) board and the trading room of Frankfurt's stock exchange (Boerse Frankfurt) are photographed with a circular fisheye lens during afternoon trading session in Frankfurt, Germany, February 23, 2016. REUTERS/Kai Pfaffenbach/File Photo

The company also announced three new members of an enlarged management board.

Theodor Weimer, who took over on Jan. 1, is seeking to open a new chapter after Deutsche Boerse got entangled in an insider trading scandal, saw a merger with its London counterpart fail, and issued a profit warning last year.

The roadmap, finalised on Wednesday at a meeting of the supervisory board, involves accelerated growth in “selected business areas” and increased investment in new technologies, the company said.

Unspecified cost cuts will finance the growth and investments, Deutsche Boerse said, although it also said that the number of employees would rise during the period.

Weimer is still in the process of a more detailed review of strategy and costs. He plans to elaborate further in late May.

Net profit in the first quarter was 249 million euros ($303 million), down from 280.1 million euros a year earlier. The result is less than the 254 million euros forecast by analysts in a Reuters poll.

Revenue rose 11 percent to 691.6 million euros in the first quarter, better than the 679 million euros forecast by analysts.

Deutsche Boerse said it expects revenue to increase by at least 5 percent per year through 2020, and it is forecasting increases in net profit of around 10 to 15 percent each year during the same period.

The targets are more or less an extension of the company’s 2018 goals for the years 2019 and 2020.

Weimer expanded the management board to six people from five. With two set to retire, three vacancies needed filling.

Thomas Book was promoted internally to oversee the businesses of trading and clearing. Previously, he had been the CEO of Eurex, Deutsche Boerse’s derivatives exchange.

Stephan Leithner, a partner at the private equity investor EQT and a former board member of Deutsche Bank (DBKGn.DE), will oversee the post-trading business of Clearstream and the data and index business.

Christoph Boehm, currently an executive at SAP, will become the company’s new chief information officer and chief operating officer.

Reporting by Tom Sims, editing by Larry King

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