Good afternoon, ladies and gentlemen. Welcome to the Deutsche Börse AG analyst and investor conference call regarding Q4 and full year 2018 results. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions following the presentation. Let me now turn the floor over to Mr. Jan Strecker.
Welcome, ladies and gentlemen. Thank you for joining us today to go through our preliminary fourth quarter and full year 2018 results. With me are Theodor Weimer, CEO, and Gregor Pottmeyer, CFO. Theodor and Gregor will take you through the presentation today, and after the presentation, we will be happy to take your questions. The presentation materials for this call have been sent out via email 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.
Thank you, Jan. Welcome also from my side, ladies and gentlemen. Let me begin today's presentation with a short summary of the preliminary numbers. Afterwards, Gregor will present the results in detail, and finally, I will take you through our views of the outlook. In terms of net revenue, the fourth quarter was the best quarter in the company's history. The 16%, or around EUR 100 million top-line growth, was mainly driven by the Eurex segment, which obviously benefited from the higher equity market volatility. Despite seasonally higher cost, the adjusted EBITDA in the fourth quarter was on the level of the first three quarters. While especially, the fourth quarter clearly benefited from positive cyclical environment, we also slightly outperformed our guidance of at least 5% secular net growth from the revenue side for the full year.
Main contributors for the actual 6% secular net revenue growth were new product and the OTC clearing in the Eurex segment. The commodities business of EEX, the data and index business, as well as our investment fund services. Cyclicality added another 6% net revenue growth in 2018, with the major contributors being index derivatives at Eurex and net interest income at Clearstream. In total, including smaller consolidation effects, this resulted in a strong 13% net revenue growth for the year 2018. At the same time, adjusted operating cost increased as planned by only 5%. They are adjusted for around EUR 244 million of exceptional cost items, mainly due to the structural performance improvement program, which was part of our Roadmap 2020.
We know this is a very high number, this EUR 244 million. The cost savings will help us to increase our flexibility and to spend our investment into growth and into new technologies in the future. This year, the exceptional cost items are expected to be much lower. In 2020, they should continue to decline. As we announced already two weeks ago, when we had to do our ad hoc notification, given the strong numbers on the net earnings side, the adjusted net profit grew by 70% to around EUR 1 billion. On this basis, the Executive Board proposes to increase the dividend per share for 2018 by 10% to EUR 2.70 per share. Aside from the two financials you are obviously most interested in, we also made very good progress on the different roadmap initiatives last year.
We implemented a number of organizational enhancements to increase the focus and the speed of decision-making. We introduced the nine reporting segments. We closed two smaller, attractive M&A deals last year. We implemented the structural performance improvement program slightly faster than anticipated. We added three new Executive Board members with complementary skill profiles. Finally, we have formed dedicated teams to drive the different technology opportunities forward. With this, we have the right setup now for delivering our growth roadmap. Let me come back to this in my outlook after Gregor has presented the details of the Q4 results. Gregor, please.
Thank you, Theodor. Let me start with the group financials in the fourth quarter on page two of the presentation. Net revenue increased by 16% to an all-time high of EUR 740 million. As part of net revenue, net interest income across the group reached EUR 60 million, which is also an all-time high on an annualized basis. Operating costs, adjusted for exceptional items, were up by 6%. As previously guided for the full year, exceptional items stood at EUR 140 million. This includes mainly provisions for the different restructuring initiatives as part of the Roadmap 2020. With regard to the structural cost savings of EUR 100 million, we have made very good progress in the fourth quarter. The bulk of the non-staff-related cost measures have been planned in detail and decided upon already. The management delayering is essentially completed. We are currently in the midst of implementing the remaining staff-related measures.
Adjusted EBITDA in the fourth quarter increased by 24% to EUR 420 million. The depreciation level in the fourth quarter was elevated by around EUR 20 million because of some software write-downs primarily in the Clearstream segment. This year, the level of quarterly depreciation will normalize again. Also, the financial expenses in the fourth quarter include around EUR 10 million of interest provisions relating to potential additional tax payments for previous years, which are not recurring in 2019. In total, adjusted net profit amounted to EUR 231 million, and adjusted EPS increased by 20% to EUR 1.25. I am now turning to the quarterly results of the nine reporting segments, starting with Eurex on page three.
The development of Eurex in the fourth quarter was driven by both secular and cyclical growth. Secular drivers were new derivatives products, an increase of the handling fee for cash collateral in April last year, and the further growth in OTC clearing. In addition, we saw high double-digit cyclical growth, primarily in the index derivatives trading. Mainly as a result of the product mix in index derivatives, the revenues per contract were quite strong in the fourth quarter. This also explains the small deviation compared to the consensus expectations. In total, net revenue in the Eurex segment increased by 33% to EUR 257 million, and adjusted EBITDA grew by 55% to EUR 161 million. Our commodities business, EEX, was driven by a favorable net revenue development, primarily in power derivatives. This was, in turn, caused by a higher market share and included, to a certain extent, a catch-up effect against the temporary decline of volumes driven by regulation in 2017.
Aside from that, there was an underlying secular growth in the power derivatives business in Europe and in the U.S. Our U.S. power exchange, Nodal, achieved very good results towards the end of the year and now has a market share of around 26%. In total, net revenue in the EEX segment stood at EUR 72 million, and adjusted EBITDA amounted to EUR 31 million, both growing in the double-digit area. In the FX business 360T, net revenue grew by 27% against the previous year. The main driver was the consolidation of the GTX ECN in the third quarter. Also the continued process of new client onboarding and faster growth in the U.S. and the APAC region, resulted in solid organic net revenue growth. In total, net revenue in the 360T segment stood at EUR 22 million, and adjusted EBITDA at EUR 8 million.
In our cash market, Xetra, total order book turnover increased by 10%. Net revenue growth was lower, mainly to the client mix, and because incentives were offered for liquidity provisions. In total, net revenue in the Xetra segment was down slightly at EUR 58 million, while adjusted EBITDA stood at EUR 30 million. At Clearstream, we saw sequential improvements in the core line items of custody and settlement. Against a strong fourth quarter 2017, with some one-off effects, especially in custody, net revenue excluding the net interest income was slightly down. Despite further increases in U.S. interest rates, we saw continued high level of U.S. dollar client cash balances. As a consequence, net interest income improved significantly and reached the highest level for the year. In total, net revenue in the Clearstream segment reached EUR 184 million, and adjusted EBITDA amounted to EUR 105 million.
In the Investment Fund Services segment, both assets under custody and settlement transactions increased slightly. Furthermore, we consolidated Swisscanto Fund Center at the beginning of the fourth quarter. This added around EUR 3 million of net revenue. In total, net revenue in the IFS segment thus improved by 15% to EUR 40 million, and adjusted EBITDA grew by 28% to reach EUR 16 million. Securities lending and repo outstanding in the global securities financing business continued to be negatively affected by central bank monetary policies, which reduced the need for secured money market transactions. However, lower volumes were more than offset by higher average commissions paid in both business as a result of market conditions. Therefore, the net revenue in the GSF segment grew by 5% to reach EUR 22 million, and adjusted EBITDA remained broadly stable at EUR 10 million. In the index business STOXX, net revenue growth in the fourth quarter increased significantly.
Besides the significant increase of index derivatives traded on Eurex, the main reason for the increase was the contract renewal process I already mentioned on the third quarter earnings call, and a corresponding catch-up effect in other licensing net revenue. For this year's modeling, the average quarterly net revenue from other licenses is a good basis. In total, net revenue amounted to EUR 43 million and the adjusted EBITDA increased to EUR 31 million. In the Data business, the number of subscriptions continued to decline year-over-year. This was again partly offset by a more favorable average pricing. Furthermore, the new regulatory reporting services contributed to the net revenue growth. In total, net revenue in the Data segment stood at EUR 43 million, an increase of 11%. Adjusted EBITDA reached EUR 28 million, up by 37% on the previous year. This brings me to the results of the full year on page 12.
Net revenue increased by 13%, adjusted operating cost by 5%, and adjusted net profit by 17%, which was significantly above our guidance of at least 10%. Before I take you through the different secular and cyclical drivers of our business in 2018, let me explain the methodology we apply on page 13. Generally, we regard market share gains, new product or asset class introductions, broadening our client network, and pricing changes as secular drivers. This is because they can be directly influenced by the management team. For the trading and clearing businesses, the trend from OTC markets to on-exchange is the most important driver. This is partly driven by direct or indirect regulation, like in the case of the requirement to clear interest rate swaps. Also more sophisticated clients, which appreciate our efficiency and transparency, contribute to this development.
At our commodities market, EEX specifically, the trend to on-exchange trading of power derivatives is mainly driven by the proliferation of renewable energy. A more volatile supply situation and higher price fluctuation arising from that increase the need for short-term trading and hedging. EEX also sees some cyclical influence, for instance, in the power and gas spot markets. This is something we have slightly refined in the methodology retrospectively for 2018, also taking into account some of your feedback. In the FX space at 360T, we continue to believe that most of the growth arises from adding new clients, and is thus secular growth. We are also closely observing market volumes and volatility indicators and would adjust for bigger cyclical developments. Some smaller business, like the FX Spot Supersonic business or GTX, will qualify as partly cyclical.
In the cash market, we have increased our market share significantly over the last couple of years, which we consider to be secular growth. Going forward, we think this will level off, and therefore most of the growth development from this year onwards should be cyclical. At Clearstream, winning market share from other European markets through TARGET2 -Securities platform is considered a secular development. However, this process is taking somewhat longer than we originally anticipated. Therefore, last year Clearstream growth was mainly driven by the NII development. We continue to regard market share gains under T2S as an important growth opportunity for Clearstream. The IFS segment, however, continued to deliver strong secular growth by increasing its client base further. In the index and data business, the trend towards passive new clients and pricing were the main secular drivers last year.
We think overall the definition of secular growth in all segments is very solid, but we also regularly review it to make sure we reflect all changes in the environment we are operating in. On page 14, you can see this methodology being applied to 2018 net revenue. While our secular initiatives generated around 6% net revenue growth across the group, the main contributors were Eurex, including OTC clearing and new products, the commodities business, the data and index business, as well as investment fund services. In addition, a more favorable cyclical environment, especially in the fourth quarter, resulted in an additional around 6% net revenue growth. This was mainly driven by higher equity market volatility and increases in U.S. interest rates.
On top of that, the consolidation of Nodal in May 2017, GTX in July 2018, and Swisscanto Fund Center on October 1st, 2018, added another 0.6% net revenue growth. On page 15, we show the various components of adjusted operating costs. They increased as planned by around 5% in 2018. The main reason for the cost increase was higher variable and share-based compensation due to the strong business performance and the rising share price. Furthermore, we saw some inflationary pressures as well as initial investment in new technologies. In addition, the consolidation of Nodal, GTX, and Swisscanto Fund Center also added operating costs. This brings me to our dividend proposal for 2018 on page 16. As part of our long-standing distribution policy, we generally aim to distribute 40%-60% of the adjusted net income to shareholders via the regular dividend.
Within this range, the dividend payout ratio mainly depends on the business development and dividend continuity consideration. Since the earnings of the group have been growing, the payout ratio has come down over the last couple of years. For 2018, the proposal of the Executive Board combined a reduction of the payout ratio to 49% with an increase of the dividend per share by 10% to EUR 2.70. The remaining recurring free cash is planned to be reinvested into the business to support the group's strategy with its organic and external opportunities. With this, I would like to hand back to you, Theodor.
Thank you, Gregor. This brings me to the last part of today's presentation, the outlook. Ladies and gentlemen, after the exceptionally strong 2018, our expectations for 2019 are slightly more subdued. This is mainly the result of some risks to economic growth that have emerged over the last couple of months and the overall environment of political uncertainty around the globe. Let me be very clear, we continue to expect at least 5% growth of secular net revenues in 2019. This will mainly be driven by further progress in the OTC clearing business, new Eurex products, the commodities activities of the EEX, foreign exchange trading and clearing, client growth in Investment Fund Services, as well as our index business. We also take some comfort from the fact that we are expecting a few catch-up effects in 2019, stemming from higher average U.S. interest rates, which were indicated last year.
In combination with an efficient management of operating costs, we expect around 10% growth of the adjusted net profit in 2019. Mainly depending on the development of the equity market volatility, which is a major driver for the largest Eurex product group, net profit growth eventually could be somewhat higher or potentially also somewhat lower. If you look at page 18, to put a 2018 result and the guidance for 2019 into perspective, let me take a step back and revisit our midterm targets, which are stated here on page 18. Under the Roadmap 2020 midterm targets we issued in April of last year, in April 2018, we expect average annual growth of the adjusted net profit of around 10%-15% through 2020. Because of the exceptionally strong secular and cyclical net revenue growth in 2018, net profit growing significantly exceeded the 10%-15% range in 2018.
For the remaining years, 2019 and 2020, average annual growth of the adjusted net profit of around 10% would be necessary to meet the midpoint of our 2020 targets. This is something, I repeat, this is something we firmly believe is achievable, and we hereby confirm those targets. On top of that, we continue to be convinced that there are attractive external growth opportunities. We are actively screening the market for potential targets or partners. Our main goal is the expansion of selected existing assets in five areas: fixed income, commodities, foreign exchange, Investment Fund Services, as well as our data offering. This concludes our presentation. Thank you for your attention. We are now looking forward to your questions.
Ladies and gentlemen, if you would like to ask a question, please press nine and star on your telephone keypad. We kindly ask all participants to limit their questions to one per person. Please press nine and star to state your question. The first question comes from Benjamin Goy, Deutsche Bank. Please go ahead with your question.
Yes. Hi, good afternoon. Maybe one question on your 2019 outlook. You mentioned at least 5% net revenue growth from secular, you also have these non-recurring one-offs from Q4 that basically help you in the year-on-year comparison. I was just wondering what your assumptions are, either on relatively high cost inflation or rather a conservative view on the cyclical revenues. Maybe you can add some more color here. Thank you.
Yeah. Obviously, with regards to the cyclical growth, we do not have a crystal ball. We do not guide that. You have seen we had a slow start in January and February, but that can also change. We really confirm our secular growth, where we are convinced and all our initiatives show that we will achieve our at least 5% secular growth level. We will also have some catch-up effects out of the interest rates increase of the Fed, for instance. There are positives in our pricing initiatives. There are positive catch-up effects. With regard to the beat in Q4, the majority is definitely from secular nature as we were able to increase our revenue per contract and et cetera. That's our confirmation. Again, 5% secular growth net revenue basis and around 10% on net income growth.
Okay. Sorry, maybe to follow up just on these two one-offs I mentioned was more on the financial result and the D&A, which basically makes it easier for you to show growth in 2019. That's why I thought cost inflation, the underlying must be relatively high or you have a more conservative view on volumes. I see your point on the cyclical side.
Yeah. With regard to the two cost items you mentioned, yes, that is obviously a one-timers and they will not recur in 2019. Right.
Okay. Thank you.
The next question comes from Anil Sharma, Morgan Stanley. Please go ahead with your question.
Oh, hello. Morning. I've got two questions, please. The first one is just regards to, on slide 14, you've very helpfully broken down the growth that you've seen from secular. Or maybe, sorry, slide 13, I think it is. That + 6%, how much of that has been driven by pricing and repricing and how much more is there to do on that front? My second question is, if the cyclical environment is much worse and there's no more interest rate hikes, will you have to slow down your investment spend in some of your growth initiatives, which means actually the structural growth also might be sort of delayed a little bit? I just want to know how you think about that. Thank you.
Yeah. Starting with the second part. As we did in the past, we do not cut our strategic initiatives. We are convinced of our strategic initiatives, therefore, we will fulfill that kind of path. So far, there is no intention to cut on our strategic initiatives. The first question with regard to the pricing impact. That's roughly 1% of the net revenue basis, what we achieved out of pricing measures in 2017, and it's also roughly 1% in 2018.
Is there any more repricing to be done or are we finished on the repricing?
No. With regard to the pricing, we review that on a yearly basis and when we see opportunities, we do that. That was the impact I just mentioned for 2017 and 2018.
That's really helpful. Thank you.
The next question comes from Arnaud Giblat, Exane. Please go ahead with your question.
Good morning. Good afternoon, rather. I've got a quick question on your midterm targets. I'm wondering if the 10%-15% medium-term targets you're talking about are organic. The reason why I'm asking is because 2017, your reference point is EUR 857 million, which is what you reported adjusted, fine. Except today in your revenue base, you've got now Swisscanto and GTX helping you achieve higher profits. The question is the 10%-15%, is that organic or do bolt-ons count towards these targets? Secondly, since we're talking about bolt-ons, you mentioned that you're looking for external opportunities. What sort of budget do you have? I think there was an article quite recently where you were talking about potentially contemplating a rating downgrade. Would you go all the way to that? In my mind, that means putting you around 2x the gross debt to EBITDA.
Is that the level to which you're willing to push the envelope for the right deal? Thank you.
Starting with the second one. As already mentioned, our firepower is roughly EUR 1.5 billion, and this consists out of two elements, roughly EUR 800 million excess cash, what we have available, cash on hand. Secondly, roughly EUR 700 million what we could increase our debt leverage. As the gross debt- to- EBITDA is currently 1.2x and clearly below the 1.5x level. Without endangering our AA rating at Clearstream and Deutsche Börse Group, that would be the number. Again, EUR 1.5 billion is the firepower we would have for M&A activities. Again, to mention that, if there would be a need, we would also take some equity component on top of this EUR 1.5 billion. With regard to your first question, our 10%-15% is in principle based on organic initiatives.
Yes, you are right, there are some smaller impacts out of GTX, Swisscanto, but these are not bigger impacts. In principle, it's organic growth of 10%-15%, but the three smaller add-on acquisitions are included in that.
Thank you.
The next question comes from Chris Turner, Berenberg. Please go ahead with your question.
Yeah, good afternoon. Thank you for taking my question. One question and one follow-up, if I can. I'll start with the follow-up. You mentioned the possibility of issuing equity finance to fund any potential M&A. Would you also consider disposing of non-core businesses for a particularly large deal? Then my actual question was simply about the FX, which you flagged as an area of potential secular growth in 2019. That division generated fairly modest secular revenue growth in 2018. I'm just wondering what you think will drive that step change in secular growth this year. Thank you.
Yeah. The first follow-up question. In principle, we are flexible with regard to also disposing assets if an asset is not delivering what is promised. Currently, there are no current plans to dispose a bigger asset. Therefore, my base assumption would be that the first idea, if it would be above EUR 1.5 billion, would be equity financing. Second question, FX secular growth. Here our conviction is unchanged that we expect for FX, there's a trend from OTC to on-exchange. Still 90% is OTC FX traded and just 10% is on organized exchanges or MTFs. We prepared now and invested some money over the last two years in developing new standard limit order book functionalities, new risk management, new clearing functionalities, and we expect that this will pay off now over the next years.
That's why we really focus that FX is an interesting asset class for us and there will be a general trend from OTC to on-exchange.
If I may add here, Gregor, in terms of the business side, on the FX side, we see a further futurization. We see electronification and a strong development from the single platforms to the multi-platforms. Right? Therefore we see a certain development towards the device there as well.
That's very clear. Thank you.
The next question comes from Johannes Thormann, HSBC. Please go ahead with your question.
Good afternoon. Johannes Thormann, HSBC. Some follow-up questions, please. First of all, the big difference in the increased financial loss is only partly explained by the tax payment. What is driving the other half? Also for the consolidation of Swisscanto, have we seen the full effect in Q4, or is there another step up in Q1? Then last but not least, on your EEX market share, what is your current market share, and could you envisage a level of 40%-50% in the midterm? Thank you.
Starting with the power derivatives market share at EEX. Currently, we are slightly above a 30% market share. Our view is that this will continue to increase over the next year. Whether it ends up at 50% or 60%, we all do not know. There's clearly a continued trend to use exchange platforms and clearing solutions. With regard to Swisscanto, here we consolidated it from October 1st, it's now a three-month contribution here in 2018 number, and we will see an additional consolidation effect in the first nine months of 2019. We also expect that the number and for this three month or monthly basis is roughly in 2018, EUR 1 million, that this number will also increase over the next months. With regard to the increased one-off effects, not sure whether I understood it correctly.
Just to repeat, there are two effects of roughly EUR 20 million additional depreciation, what we did, and another roughly EUR 10 million for interest payments on tax from previous years. These were the ones that add up to EUR 30 million, that are the two more non-recurring items in 2018 in the adjusted P&L.
Understood. Thank you.
The next question comes from [Firmino Morgado, Man]. Please go ahead with your question.
It's a Brexit-related question. According to your Annual Report, 95% of the euro-denominated interest rate swaps are clear in the U.K. U.K.-based market participants account for 80% of the euro trading. My question to you is that what could be the implications for Deutsche Börse of hard or soft Brexit? The second part of the question, is the European Commission, your conversations with the European Commission or the ECB, they do really understand the risks of having a country that is not part of the EU to be clearing such a high percentage of the euro-denominated interest rate swaps and transactions.
Thanks for the question. Obviously, we are not at all in favor of a Brexit, right? We don't think that this is the right thing. But nevertheless, our customers ask us for market solutions, and that's what we offered now for the market, so that the market has alternatives. So far, we developed our processes, we increased our IT capacities, we introduced our partnership agreement with the banks. So far, we've seen that a lot of banks move some activities to Europe as they have to prepare themselves for the world. That's basically our task, that the customers have a choice. So far, the development is quite positive from our side. We have now more than EUR 10 trillion outstanding notional volume. On a January basis, that's basically 11% market share.
We have shown to the market that Deutsche Börse via Eurex clearing is an alternative in the market, and we are a trusted and good partner for the banks here. We assume that we get the 25% market share, what is unchanged now for the last two to three years. Starting from 11% we have today, to 25% in 2020. That's our core belief, and we see good support by the customers that give us good reasons that we will go in that direction. This 25% is independent, whether it's a hard Brexit or no-deal Brexit or a soft Brexit. They don't want to put all eggs in one basket, and that's reasonable, that's logical from a bank's perspective, and that's what we support our customers to help them to have an alternative.
Sorry. The second part of the question, on your conversations with the European Commission or the ECB, do you see that the ECB and the European Commission understand the issue, and how likely is it that they take some measures in terms of the banks to speed up their process?
Our belief is that the EU Commission and ECB and the politicians have understood, and the reason is there's a common understanding that there's at least a 12-month transition period, what is basically in principle agreed by EU and ECB, even in a no-deal Brexit scenario. That would give market participants another 12 months to make their decisions.
The next question comes from Joanna Nader, RBC Capital. Please go ahead with the question.
Hi, thanks a lot. Just maybe a bit more of a strategic question, particularly on Clearstream and T2S, given that you've taken that right down because the opportunity is manifesting at least more slowly than you expected. Do you think it's an issue of education of the market or that people need to change the way they conduct transactions? What do you see as the unlocking of what the potential that you originally saw is? What is the process?
Our view is that it's a question of priorities on our customer side. So far, they have a lot of regulatory topics, they have many topics they have to solve, and therefore, as they have to connect to our new platform, that's obviously always a process what takes at least six months time, and therefore we see that on a customer perspective, there are currently different priorities to do. That's the reason why we think that it will take a little bit longer to gain additional market share out of our target with securities initiatives. Technically, from our side, we are ready. We implemented in April 2018 already the connectivity to the three Benelux countries and France and Italy. From our perspective, we are ready to make the offer to the clients, but we see here, as I mentioned, some priority issues on the customer side.
You're convinced that the economic imperative, when there is more time, is significant enough that people will then actually do something.
Yes. Obviously, it's interesting for the customers to consolidate all their cash and collateral and securities in one hand. If you do today local cross-border business, you have four to six credit counterparties, and obviously, if you can consolidate in one hand, then you have liquidity efficiencies. We are the one with the highest market share in euro liquidity. We own 40% of the euro liquidity. We are able to offer the biggest liquidity efficiencies. Our calculation for regional or more global-oriented custodians, it lies in the range of EUR 30 million-EUR 70 million on an annual basis out of this efficiency increases. That should be a reasonable number for these guys, and therefore, the economics are still in place from our perspective.
Okay. Thank you very much.
The next question comes from Roland Pfänder, Oddo BHF. Please go ahead with the question.
Yes, good afternoon. Could you please elaborate a little bit on your ongoing cost saving initiatives? If I'm not mistaken, you're shooting for EUR 100 million reduction by 2020. How much did you already realize in 2018? What is left for the two years to come? Thank you.
Yeah, we do not want to guide specifically on that. Overall, we say we want to reinvest these cost savings in growth and technology initiatives. Therefore, the more we save, the more we can spend. I can promise you that we are clearly on track here to deliver at least a EUR 100 million until 2020. We don't want to give specific guidance on this because it's not relevant for all your models. Overall, we say at least 5% secular net revenue growth, around 10% earnings growth, and the cost number is basically as a residual included in that.
Okay, thank you.
The next question comes from Mike Werner, UBS. Please go ahead with your question.
Thank you. I've got two, please. First, you spoke about the partnership program in terms of your FX platform and your repo platform last quarter. I was just wondering if you could give a little bit of an update as to how that is progressing. Second, you talked about technology investments, I think on two questions ago. I guess in terms of those investments, I guess, from a time horizon perspective, when do you expect those to generate either cost savings or revenue opportunities? Thank you.
Yeah. With regard to the tech investment, obviously we have to go through all of that a little bit in more detail. With regard to blockchain distributed ledger technology, here you are aware that we installed our HQLAX or High Quality Liquid Asset initiative, where we really expect to change the market. It could be really in the collateral management and repo securities lending business. That's a completely a new way of doing business. Here we could see obviously nice additional revenues out of that. With regard to cloud. Cloud is in the first-hand increase the quality and the cost and efficiency of our internal processes.
Nevertheless, if we are able to reduce our release times basically from today more than six months to less than a week, obviously, we are better with regard to time- to- market, and we should be able to introduce new products in a much faster way, and maybe we can also increase revenues. Nevertheless, cloud is more on an efficiency and quality increase. Data analytics and robotics obviously is more an efficiency initiative here. There are smaller elements with regard where we can increase also our revenues, and some bigger elements how we can increase our efficiency and our costs. With regard to the first question, partnership program FX and repo. With regard to the repo business, we see good progress here, as we really think that we will get additional market shares here even starting in 2019. We should see some progress here.
Would assume that it's still a single-digit million euro number, what we can achieve in 2019. In 2020 and onwards, it should be definitely a double-digit revenue number out of that. With regard to FX, our cross-currency swap initiative, feedback from customer is positive. They are very much interested to do that. Here we see also there's a question of priority on the customer side, and it could potentially take a little bit longer than in the repo business.
Thank you very much.
All right. We have no further questions in the pipeline, so we would like to conclude today's call. Thank you very much for your participation, and have a good day.