SITUATION
Overall, in view of its innovative and in creasingly diversified product and service offering in addition to its earnings power and financial strength, EEX Group sees itself as being well prepared for achieving its aims and strengthening its position in the intensi fied competition. This is due to the competi tive value chain within EEX which is charac terised by liquid trading platforms and cost-effective clearing solutions as well as further services. EEX Group has set itself the aim of achieving ambitious growth rates in the future and increasing its market shares this way in the medium term. The Group is confident that the risk and opportunities management system established within the company will also recognise risks and oppor tunities early on in future and that, as a result, the current risk situation can be met success fully and opportunity potentials can be used.
The outlook report describes the probable development of EEX Group in the 2016 financial year. It contains statements and information regarding processes which lie in the future and it is based on current expecta tions, assumptions and forecasts of the Management Board and on the information which is available to it at the present time. These forward-looking statements cannot be considered as guarantees regarding the future developments and events referred to therein. Instead, the future developments and results depend on a large number of fac tors. They involve different risks and uncer tainties and are based on assumptions which might turn out to be inaccurate. We do not assume any obligation to update the forward-looking statements made in this report.
As a result of its diversified business model, EEX Group is convinced that it is very well prepared and expects a positive develop ment of its earnings situation in the coming year as well as in the medium term. After a business year which was shaped by external growth, EEX will concentrate on the further development of the positions in the individ ual markets in 2016. The fast and efficient integration of the acquisitions into the Group will now form the most important task. The further strengthening and expansion of the good position established within the com petitive environment, in particular, on the power spot and derivatives market as well as the gas markets forms the strategic aim for the coming financial year.
FURTHER GROWTH IN GROUP SALES PLANNED
The following forecasts are essentially based on the following assumptions regarding the commercial, regulatory and competitive en vironment in 2016:
› Potential changes in the regulatory environment (especially regarding OTF) will not have a detrimental impact on regulated platforms
› No impairment resulting from regulatory amendments affecting financial markets (e. g. higher capital requirements for Clearing Members, no introduction of a financial transaction tax)
› No negative impact on the liquidity of the core markets as a result of a changed power market design, in particular, because of a split of the German-Austrian market area or the introduction of capacity markets
› The level of the guaranteed price for nuclear power “ARENH” (Accès Régulé au Nucléaire Historique), which is specified by the CRE Regulator in France remains above the exchange price
› No development of price wars with competitors on the energy market › No fundamental change in the risk profile
of EEX Group
In 2016, sales revenue is expected to lie within a range between kEUR 187,391 and kEUR 206,586 and, as a result, – 2 % below to + 8 % above the level of the previous year. In determining this range, the realistic and the optimistic case established in the budget plan for 2016 were used. Based on the lower range, at 66 % the transaction revenue gen erated on the power markets will form the mainstay of sales revenue in 2016. For ex ample, as a result of the effect of the consid eration of APX revenue over the full year, the Power Spot Markets will contribute appro- ximately 37 % to the EEX sales revenue in 2016 (compared with 33 % in 2015), while the share of the Derivatives Market revenue is expected to amount to 28 % (2015: 32 %). The diversification strategy of EEX will, in particu lar, be promoted through the planned growth of the gas markets by up to kEUR 3,990 in
5 OUTLOOK REPORT
Strategic aim for the coming financial year is to further strengthen and expand the good position established within the competitive environment, in particular, on the power spot and derivatives market as well as the gas markets
2016 and the expansion into new business fields and products. As regards the other sales revenue, a significant decline resulting from a reduction in the provision of services for third parties by APX as well as lower cost reimbursements for market coupling pro jects are expected.
HIGH EARNINGS POWER ENVISAGED IN SPITE OF INTEGRATION COSTS AND ONE-OFF EFFECTS
In 2016, the operating costs of EEX Group will increase by 1 to 4 percent as against 2015. This is due to significantly increased expenses for reimbursements for market makers and brokers and rising personnel ex penses combined with a concurrent signifi cant decline in depreciations.
Depending on the development of sales revenue referred to above, EEX Group ex pects an EBT within a range of kEUR 42,387 to kEUR 57,492.
The assumed cost level which would lead to a result before taxes of kEUR 57,492 and an EBT margin of 28 % can be reached provided the following conditions are fulfilled:
› Smooth integration of the APX business and markets into the processes and systems of EEX Group
› Implementation of economies of scale and scope within EEX Group, in par - tic u lar, with regard to the expenses for technical infrastructure and personnel › Use of resources for projects and
strategic measures as planned
If, contrary to expectations, the framework conditions generate a worse development than outlined above, EEX is convinced that it will still be able to operate its business prof itably because of its successful business model. Sensitivity analyses have shown that a decline in sales revenue of 10 % as against the budget would correspond to a decline in profits by approximately 33 %. In this con text, it was assumed that variable costs would develop in line with the transaction revenue and that all further cost items would be kept constant. Subject to these assump tions, a decline in turnover of approx. 31 % could be coped with without bringing about a negative result before taxes.