Deutsche Börse outlines measures to improve operational processes
Deutsche Börse has completed its review of potential measures to further increase the efficiency of the group and has resolved the next phase of a multi-year programme to optimise operational processes and structures across the group.
The objective of the programme is to improve flexibility and effectiveness of using resources across the group, to reduce time to market, and to further increase its efficiency while at the same time identifying and realising new growth opportunities.
The company expects additional savings in operating costs of around EUR100m per year. This programme complements the cost measures initiated between 2007 and February 2010.
The budget for growth initiatives has already been increased by more than 50 per cent as against the previous year to around EUR100m in 2010.
The additional cost savings of around EUR100m per year under the programme aim to be fully realised by 2013. One third of the volume is expected to be achieved as soon as 2011, and two thirds in 2012. The implementation costs to achieve these savings are expected to be below EUR200m and, following detailed specifications, will be formally decided by the supervisory board.
The company will further optimise processes and focus on core competencies. In addition, the group will reallocate operating functions within the European Union. The integration of services sourced externally so far, such as for IT, will contribute to this. The number of external service providers will be reduced by around 50 per cent as a consequence of the programme.
At the same time, the company plans to open its new trading system for other markets. This will lead to further harmonisation of Deutsche Börse Group’s IT infrastructure. Also, the group’s presence in Asia, especially in Singapore, will be further developed to strengthen customer proximity in key growth regions.
The measures are expected to impact around 370 positions at Deutsche Börse Group, particularly in Frankfurt and Luxembourg. Around two-thirds of these jobs are expected to be redistributed to the existing Group’s location in Prague.
On group level, all personnel related efficiency steps decided since the beginning of the year are expected to lead to a staff capacity reduction of around three per cent or below 100 jobs.
Together, the EUR50m cost savings announced in February 2010 and today’s decision to increase efficiency by another EUR100m per year add up to a total of EUR150m cost savings in 2013. The cost guidance for 2010 remains unchanged at a maximum of EUR1,250m before provisions for restructuring charges of around EUR40m for the cost programme announced in February and below EUR200m for the programme announced today.
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