Deutsche Boerse to Cut as Many as 50 Management Positions

(Bloomberg) -- Theodor Weimer’s pruning of Deutsche Boerse AG has only just begun.

The German exchange group’s chief executive officer told shareholders Wednesday that he wants to cut as many as 50 management jobs as part of a plan to lower its annual running costs by 100 million euros ($118 million) by the end of 2020.

Weimer repeated that he expects one-off costs of 200 million euros as a result of that broader cost-cutting, most of which will hit this year’s results.

Since replacing the ousted Carsten Kengeter at the start of the year, Weimer has focused on putting the Frankfurt-based company’s own house in order after abandoning the search for a transformational merger deal. In doing so, he has expanded the management board to six people from five.

However, he’s still aiming for revenue from “secular growth opportunities” to rise by 5 percent a year through 2020, and for net income to increase by between 10 and 15 percent in the same timeframe. If Deutsche Boerse achieves its targets, it could add over a hundred jobs in the coming years, Weimer told shareholders.

“The Deutsche Boerse strategy is entirely based on growth,” Weimer said, stressing the “scalability” of its business model. The company relies on selling its technology and licensing its index products, as well as operating trading platforms for products such as derivatives on German government bonds and European energy.

To contact the reporters on this story: Geoffrey Smith in Frankfurt at gsmith325@bloomberg.net, Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net.

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Andrew Blackman

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