Good afternoon, ladies and gentlemen, and welcome to the Deutsche Borse AG Analyst and Investor Conference Call regarding the Q3 2021 Results. At this time, all participants have been placed on a listen only mode. Conference Call. Let me now turn the floor over to Mr. Jan Strecker.
Conference. Welcome, ladies and gentlemen, and thank you for joining us today to go through our Q3 2021 results. With me are Theodor Weimar, and Gregor Pottmeyer, Chief Financial Officer. Theodor and Gregor will take you through the presentation today, Conference. The presentation materials for this call have been sent out already via e mail Conference Call.
As usual, this conference call will be recorded and is available for replay. Conference. Let me now hand over
to you, Theodor. Thank you, Jan. Welcome, ladies and gentlemen, from my side as well. Let me start today's call Call with an update on the implementation progress of our strategy. Afterwards, Gregor will be presenting the financial results Conference Call.
The 3rd quarter was the first period for quite some time where we did not see significant Cyclical swings in either direction. Therefore, the 18% net revenue growth resulted purely Conference from the secular and inorganic growth efforts, which form our growth strategy. Let me highlight the key developments Conference in the different reporting segments along our value chain. In our pre trading business, We saw the Contigo Index and Analytics segment delivering the 10% growth we are targeting as part of our midterm plan. And this also some COVID headwinds remained.
In the institutional shareholder service segment, Group. We again achieved a performance significantly above our initial expectation. Amongst others, call. This was driven by a double digit growth in ESG related products and services. For our Financial Derivatives segment, Eurex, Group.
Some cyclical headwinds remained, but secular growth due to product innovation offset them. Conference. With lower comparables and a more uncertain market environment, it increasingly feels like the U. S. Performance is improving.
Call. In our commodity segment, EEX, the secular growth trend of higher market share related call. To the proliferation of renewables was complemented by cyclical tailwind due to the significantly increased energy prices. Call. In the foreign exchange segment 360T, we delivered solid growth areas and rates in a low volatility environment and thus continued to outperform our main peers.
In the cash equity segment, Zetra, similar to the development of Eurex, Group. We observed a slight improvement of the cyclical environment since August with some year over year volume growth. Call. While small net interest income headwinds persisted in the Q3 for our post trading segment Clearstream, Segment growth exceeded our expectation and resulted in solid year over year growth. With 28% organic growth Conference.
In the Q3, the Investment Fund Services segment, IFS, continued to be the by far best performing asset Group, once more significantly exceeding our even high growth expectations. Call. It is great to see how organic growth and the benefits from M and A are coming together in this area. Conference. Whilst every quarter is different, we expect to now enter a phase with many more like for like comparables on the cyclical side.
Conference Call. This will help us to continue showing the true organic and inorganic growth potential inherent in our business model. Call. The potential upswing of the cyclical parts of our business resulting from rising inflation, potential tapering of the central banks call. And ultimately, rising rates in the longer term would be quite powerful additional growth potential that is not yet included in our guidance.
Conference. Since the announcement of our midterm targets last year, we have made good progress towards our 10% compound annual growth rate formula as you can see on Slide 2. As we all expected, Conference. Net revenue in the first half of this year was under some cyclical pressure because of the record activity levels at the beginning of last year. Conference.
However, we were able to successfully mitigate these effects with continued secular net revenue growth and an increasing Co. Due to the cyclical headwinds we experienced, we decided to manage the organic operating cost conference as prudently as possible. In addition, our continuous improvement efforts are paying off. Therefore, The overall operating cost increase in the 1st 9 months of the year was entirely driven by consolidation effects. Conference Call.
With this, we are well on track to deliver upon our guidance for 2021, and development is also fully in line Conference 2023 Growth Trajectory. In order to deliver upon our midterm targets, call. We'll continue to pursue our successful M and A agenda. The M and A focus areas you see on Page 3 of the presentation Group. The parts of our business that benefit the most from an inorganic increase of breadth and scale.
Group. Let me briefly summarize the current developments of our M and A activities. The integration of our latest major acquisition Institutional Shareholder Services is very well on track. The initial guidance of more than 5% net revenue growth Conference. As proven to be on the conservative side, our ambition is double digit growth, which also includes further small acquisitions.
Call. We are not just buying new businesses, but we are also continuously reviewing our existing portfolio of assets. Call. In 2020, we sold, as you are fully aware of, the regulatory reporting hub to market access. And in September, call.
We announced the sale of our 50% stake in Redshift TR to Iberclear. The transaction is expected to close Conference in the Q1 next year and will result in a proceed of around €50,000,000 Conference. This helps us fund new initiatives. The acquisition of the majority stake in crypto finance AG Conference. It's now scheduled to close in the Q4.
Especially with its crypto storage offering, it is an important strategic step call on our way to building a trusted and fully regulated digital asset ecosystem in Europe. In terms Call. The high valuation environment we are currently in is certainly challenging, Conference. But we continue to see concrete opportunities, mainly in pre trading data analytics and in the fund business, Conference, where our requirements of a strong strategic fit, good synergy potential, sensible financials and high growth uncertainty are met. Conference.
Before I hand over to Gregor, let me give you an update on our portfolio of minority investments, which includes a broad range of attractive Group. Businesses along our value chain, as you can see on Slide 4 of your presentation. Call. Also, we have invested more than €200,000,000 across our corporate venture capital portfolio and other minority investments. Group.
And we have now decided to generally increase the funding by another €200,000,000 on a case by case decision basis. Call. The first new investment is a Series B investment in WeMatch, which is a Tel Aviv based fintech company focusing call. On trading workflows for the wholesale derivatives industry, in the Q3, we saw a very favorable development of our portfolio. Conference.
The value of our stake in AI powered tech platform, Clarity AI, increased by more than €30,000,000 due Conference to a new financing ground. Since this stake is held at fair value, it resulted in a positive impact, Conference Call. The value of our stakes in FORGE and TruMitt conference has also developed very favorably. Both organizations are now valued at roughly US2 $1,000,000,000 or more, Conference Call. With Forge planning to go public in the stock deal, but those stakes will continue to be hidden reserves conference since they are not held at fair value.
With that, let me now hand you over to Jo Kreger.
Thank you, Thelta. Group. Let me start with the detailed financials in the Q3 on Page 5 of the presentation. Organic net revenue growth of 7% was Conference entirely driven by secular factors. For the first time this year, cyclical net revenue drivers were broadly neutral Conference as we entered a more like for like comparable environment.
Inorganic net revenue growth amounted to 11% call and was mainly driven by the consolidation of ISS in February. Consequently, the operating cost growth was almost Conference entirely driven by consolidation effect. The EBITDA includes the result from financial investments of Conference 37,000,000 which benefited from the revaluation of our stake in Clarity AI. Conference. Depreciation amounted to €73,000,000 and includes effect of around €25,000,000 related to purchase price allocation of acquired assets Conference in accordance with IFRS.
On this basis, the cash EPS amounted to EUR 1.74, Conference Call. An
increase of 36%.
On Page 6, we show the development of financials in the 1st 9 months of Conference 2021. With the addition of the Q3, these numbers are now starting to improve, but they still suffer call from the effect of the strong cyclical headwinds in the first half of the year. In order to compensate for these effects, Call. We engaged in prudent cost management, which limited the overall operating cost increase in the 1st 9 months to consolidation effects. Call.
On Slide 7, we provide an overview of the 3 components of net revenue growth in the 1st 9 months Conference compared to the same period in 2019, which is a Compass based year. Consolidation effects resulted in a Group. Developed as planned with a CAGR of 6%. The cyclical growth contribution was negative at a CAGR of Co. This was caused by much lower net interest income at Clearstream and lower trading activity at Eurex, Conference, particularly in index derivatives.
I'm now turning to the quarterly results of the segments, Conference. Starting with Eurex on Page 8. While we saw some temporary spikes on average, Call. Market volatility was still relatively low in the past quarter. As a result, index derivatives and margin fees Conference Call.
Continued to decline against the previous year. This was partly offset by speculation around inflation and long term rates, Conference which made interest rate derivatives grow by double digit rates. Some of the cyclical headwinds for Eurex are offset Conference product innovation, particularly in index derivatives. With this, we address multiple trends. Call.
We support the trend towards more sustainable investing and are the leading global provider for ESG derivatives. Call. We see ourselves well positioned to benefit from the ongoing trend towards passive investments. For instance, Conference by being the leading exchange in terms of open interest in MSCI derivatives. We also continue to support the futurization of OTC Derivatives, for example, with the expansion of our total return futures segment.
Call. In addition, we are promoting the trend towards micro sized contracts and crypto derivatives, Conference, where we see a substantial increase of client demand. Our commodity business, EX, Conference shown on Page 9, started to accelerate in the Q3 for two reasons. First, Conference. We saw continued secular growth through market share expansion in light of the trend towards renewables.
2nd, Call. Gas and power prices started to rise significantly in August, which resulted in a substantial increase of short term trading Corp. Judging from the current market environment, this development is Conference expected to continue well into autumn and winter. Let me now turn to Page 10 and the FX business. Call.
Even though FX market volatility continues to be on a very low level, we saw good volume and net revenue growth Conference. This is a solid pipeline for the coming quarters.
Proof
for the success is single digit year to date net revenue growth against comparables that include a record Q1 last year. With this, we are outperforming our biggest peer in Europe. Conference. Next, I'm turning to Page 11 in our cash market, Zebra, where we saw broadly stable net revenue despite Weaker market volatility environment compared to last year. Operating costs were managed to be flat as well.
Call. EBITDA declined because we booked the initial double digit gain from the better performance at trade date last year. Conference Call. This year, the contribution amounted to now regular level at around €7,000,000 per quarter. Call.
For our post trading segment Clearstream on Slide 12, the 3rd quarter was the first with overall net revenue growth since Q1 2020. This is due to the remaining small interest rate related headwinds being overcompensated by solid growth Company and Collateral Management. Due to increased amounts of bonds outstanding and higher equity market valuation, Call. The assets under custody are currently growing above our expectation. Despite all the market turbulences, Conference Call.
The last month of negative year over year growth of assets under custody was March 2018. Conference. This shows the steadily growing nature of our post trading business very well. Conference. The Investment Fund Service segment, which you'll find on Page 13, EBIT improved its Conference compared to the first half year with 28% organic net revenue growth in the 3rd quarter.
Conference. This was based on the continuous onboarding of new clients and portfolios, both in custody Conference and on our distribution platform. The synergies between the two offerings are now starting to play out nicely, Conference. And we expect growth rate above our guidance to persist for the time being. In addition, we see Call.
To give you more insight into our high growth business segments, we are inviting you to a series of business deep dive meetings. Conference Call. We will start with the ISS segment on November 10 and the ISS segment on November 29 Conference and will continue this next year. Slide 14 shows the Contigo segment, which benefited from net revenue growth Conference across all line items and achieved our 10% cost target. EBITDA includes a gain of around €32,000,000 from the revaluation of our minority stakes in Clarity AI.
Call. On Slide 15, we show the Institutional Shareholder Services segment, which again outperformed our expectation in the 3rd quarter. Call. Growth is mainly driven by the strong performance of Corporate Solutions and ESG Analytics. Conference.
But the well established governance solution business also short mid single digit growth. Call. After announcing 3 smaller M and A transactions this year already, a few additional projects are well underway. Conference. Beyond this, we see further opportunities to complement the business inorganically going forward.
Call. The combination of strong organic growth prospects and the addition of M and A from time to time Group. The last page of today's presentation shows Conference. Our guidance for 2021 in the context of our Compass 2023 midterm plan. Although Eurex Conference.
We are completely in line with our guidance for the full year at around Call. €3,500,000,000 net revenue and around €2,000,000,000 EBITDA. Call. This is because we saw better than expected secular growth, particularly in the IFRS segment. Call.
In addition, the inorganic cost component is slightly larger than expected due to early closing of the ISAS acquisition. Conference. Furthermore, the accelerated full purchase of FundCenter and the favorable development of some minority investment is a tailwind. Conference. This concludes our presentation.
Thank you for your attention. We are now looking forward to your questions.
Call. Conference
Call. And the first question comes from Benjamin Goy, Deutsche Bank. Please go ahead.
Yes. Hi, good afternoon. One question. You're now Conference. At €1,450,000,000 EBITDA, so you might say you're a bit ahead of your run rate for the full year.
I was just wondering how you think about maybe the cost spending going into the Co. And whether you have kind of a buffer? Also, Eurex looks to be off to a good start in October. Or Call. Yes.
Could you also come out above that level? Thank you.
Yes. Thanks Benjamin for the question. Conference. So far, with regard to the cost topic, so you have seen over the 1st 9 months is we were Group. Rough basically flattish on a constant portfolio basis, and that's also my expectation for the Q4.
Call. We confirm our guidance for the full year. So and Conference. Do not want to speculate around buffer. So our confirmation is that we achieve our targets.
All right. Thank you.
Conference. The next question comes from Arnaud Giblatt, Exane BNP.
Call. Hi, good afternoon. I've got a question on IFS. I was wondering if you could give us a bit more color around Acquisitions of the some platforms and the successful upselling you've had,
what are
the kind of Conference. The size of migrations that you're having towards the fuller fund platforms, the margin uplifts that take place as a consequence Of an upsell, what's the pitch you're having to distribute to convince them to move to FOLISTOPERS? Thank you.
Conference. Yes. Thanks, Anur, for the question around Investment Fund Services. So Group. We have a big advantage with USP.
So we have established here Conference. A platform, a process we call Vestimaa platform where we have a more standardized process and we have More than 50% cost advantage compared to the back office processes within the banks. And therefore, there is cost pressure in the bank This is always the case. So we have a high benefit here. And here we are also ahead of our customers.
And so far, We have such a long customer pipeline who wants to connect to our platform or to do outsourcing or even to sell our business, all of these Three options, I think, you know. So that we are very confident that the current level on an organic basis and in the first half year, it was Call. 26% in the 3rd quarter was 28% purely on organic growth. And on top, there's M and A inorganic growth. Conference.
So this will continue over the next year. So very positive, very strong development.
Conference. The next question comes from Gurjit Kambo, JPMorgan. Please go ahead. Call.
Hi, good afternoon. Just a couple of questions. So firstly, in terms of the crypto finance, can I just confirm, you're saying there'll be EUR 20,000,000 Conference Call? Of revenues in the final quarter. Is that for the full quarter firstly?
And can you give us sort of any indication of what sort of margins that business makes? That's Conference. First question. And then secondly, just around the I guess the more cyclical businesses, I think there's been some changes in the tick sizes of Conference Call. Has that had any impact either negative or positive do you think on volumes?
Those are the 2 questions.
Call. Okay. Christian, thank you. So with regard to crypto finance, so the €20,000,000 we say, so that is Basically, the full year number for 2021 roughly. So and as we expect consolidation now within the next week, so it will be just a fraction And out of that, but with regard to 2022, we are very confident that you will see in that asset Group.
High double digit growth on the revenue side. And even the asset is currently also has a nice profitability. And Conference. Obviously, that's also a scalable business because Deutsche Borse will help the finance here to to scale up. And so far, you will also see a nice margin increase here.
And with regards to the Eurex tick Conference. So this is something we are regularly reviewing depending on the developments in the order books. And indeed, in summer, we decided to change to tick size for some of the key benchmark index products. This has been done in consultation with market participants. We've consulted with around 100 buy side Conference.
And it's beneficial for them because it reduces the implicit transaction costs if the tick size is smaller. So Conference has shown this in the past in similar constellations on Eurex and other exchanges. And therefore, conference. It should be beneficial to the buy side going forward.
All right. Thank you.
Conference. The next question comes from Jurgen Schmidt, Netzer.
Call. Thank you. Good afternoon. I have one question on custody net revenues of Clearstream. In Q4 2020, these revenues were impacted Conference.
If I remember correctly, will there be a similar effect in Q4 this year? Or may we assume quarter on quarter growth
Call. Yes. Jorgen, thanks for the question. As we have mentioned in our presentation, so call. The Clearstream custody business is a constantly growing business.
And so far over the last 3 years, every quarter, it basically increased. Group. And that's also our expectation for the next quarter, but also for the next year. So overall, we guide on 3% to 5% net revenue growth on a secular basis, if you exclude basically the NII impact. Group.
And I do not expect that there's a top
in Q4. Call.
Thank
you. The next question comes from Tobias Lukesch, Kepler Cheuvreux.
Call. Yes, good afternoon. A quick question on the ISS segment, the actual surprise this quarter. The €69,000,000 in revenue, could you quickly elaborate how sustainable that is, where the uptick is actually coming from and how we Conference should basically expect the Q4 performance to be? Thank
you. Call.
Yes, indeed, ISS was a very strong quarter with the €69,000,000 where we had an increase on a like for like basis of 16%. Group. Yes. So a year ago, we basically said when we were in the process to acquire ISF that we expect at least a growth Call of 5%. So meanwhile, you see our announcement where we basically changed it to basically call.
10% growth including some smaller M and A contribution and the additional, let's say, 6% in Q3. So Conference. It was a very positive development. And the reason is that specifically the two areas, so the ESG data analytics has Much higher growth rate. It's clearly far above 20% growth rate.
And the more we continue with it, so Conference. The share of that kind of product group increased. And so far, this will also help us to increase our growth rates here. Group. The second segment what is growing double digit is a governance solution Conference topic where we basically concise customers in the different area.
And even the governance solution, so basically where ISS is Call. Coming from his mid single digit growth. So overall, I would not guide that we say we will continue with the 16% Group. Within the next quarter, but double digit growth is an expectation what we have here for the next 2 years.
Conference. So you would not expect a sudden drop in Q4, right? So mid 60s to the higher 60s is something which is sustainable then.
Yes. I expect something above 60, right.
Conference. Okay. Thank you.
The next question comes from Andrew Combs, Citi.
Call. Good afternoon. Three questions for me, please. Number 1, the Call. In your commentary, you say that embeds some smaller M and A.
So perhaps you could just clarify how much of the increase from more than 5 to more than 10
Conference Call. It's because
you're now more or you now have more conviction on the M and A pipeline versus how much of the improvement is organic related. Conference. That would be the first question. And second question would be on the results from strategic investments, the minority investments.
Conference Call. And you talked about 2 times money multiple.
Could you just provide a bit of color on the accounting methodology there? Is it IPV guidelines, third party conference. Just any clarity you can provide on how regularly you revalue those stakes? And then the final question on Eurex. I I think you previously said $20,000,000 revenue opportunity on some of the MSCI derivative product launches.
Conference. Any update on there and in terms of time frame for recognizing that?
Yes. Andrew, thanks for the sweet questions. So I think I covered the ISS question, but I will repeat it. Call. So we say it's a double digit growth.
So I don't want to say it's more than 10%. So we say it's basically double digit growth here. Group. And as and we said we include some smaller M and A contributions here. So that's in the range of, Let's say 2% to 3% roughly.
So and the organic growth is 7% to 8%. So roughly in that area, call. I would expect that ISS will continue to develop over the next one to 2 years. So Conference. That's the answer to the Deutsche's question.
With regard to the minority investment, here We changed methodology from an accounting perspective for 2 or now Call for 3 assets. So the majority of investments we did in the past, they're not shown with an impact In the P and L, so it's just shown in the equity in our balance sheet. So that more than 2x multiple we show in the equity. Call. And you have to decide if when you acquire assets and you have to decide how what kind of accounting methodology you pick.
Conference. And therefore, the Claroty AI, our 360x and now the new asset We made as an investment, we match. So these 3 assets, currently these 3, you will show We will show them as a fair value valuation in our P and L. So anytime there is Another investment series, A, B, C, D. So that will be revalued Conference.
And obviously, we expect that we increase our value here, but there's obviously Conference. So it's a market. Pricing, What we take here, so no internal cash flow analysis, discounted cash flow or whatever. So it's market prices. And for this, Conference.
We added again, clearly, our 360x and the Match, you will see impact in the P and L. For all the other investments In the past, you will see impact in the purely in the equity. And for the future, as we said, we also Conference. I want to invest another €200,000,000 for the next 3 years as our the majority will be shown as a value. Call.
1st question, Eurex MSCI derivatives. Yes, very positive development. We said in our speaking, we are now number 1 in the NSEI derivative and part call. On a global basis, you are aware that we have the lead here for the MSCI in Europe and also in Asia, so not in U. S.
Conference. And therefore, we expect really more than double digit growth on this element. Conference. And so it's more than €20,000,000 already this year. And I always like to compare, look at our euros stock, Call.
We make €400,000,000 to €500,000,000 I don't want to tell you that out of this more than €20,000,000 MSCI derivatives, you will see Conference. Thank you for us really to increase that value this value here in MHZR Derivatives.
Conference. That's great. Thank you. And sorry for making you repeat your answer on IFRS. I appreciate it.
Thanks.
Conference. The next question comes from Ian White, Autonomous Research. Please go ahead.
Conference. Just a couple of quick follow ups from me, please. Firstly, is there any help you can provide us on the venture capital portfolio And how to think about further growth in the value you expect to accrue to the group there over the next 18 months or so, please? Conference. I wondered if there are any internal projections you might maintain for any of those minority stakes, for example, conference.
I wonder if there are any specific plans there to boost sales efforts significantly Conference. During the Q4 now that the COVID travel restrictions have been very substantially relaxed. Those are my two questions please.
Call. Yes. With regard to the venture portfolio, maybe to explain it a little bit broader. So far, over the last 3 years, we invested some €200,000,000 and the focus is technology, is innovation, digital assets and so on. And so far, we are quite successful.
From a financial perspective, we said it's more than Multiple of 2 times, but as important as from a strategic perspective that we learn Conference. New technology, new assets, new developments, digitization, tokenization, so that is of Strategic value for Deutsche Borse. And therefore, we do not rule out that if we identify an investment where we own, let's say, some 10% to 20% in the beginning that we are also interested to acquire majority if it's core strategic for Deutsche Borse. Group. And for instance, for 360x, where we started to go into nonfinancial asset class like real estate, like Like esports, we think we can create with the competencies of Deutsche Borse as an IT technology leading provider conference.
That we can create new marketplaces here. And our expectation is that we really increase the value. Conference. And for 360x, for instance, what is under the leadership of Carlo Kaeser, who developed in his Former Korea, the FX business here in Germany, 360T, so and he was able to create close a unicorn. So call.
Why it's not possible to create another unit on here in 360x? So that is basically Group. Our investments where we are committed and we have also good reasons to believe that we are successful here. With regard to your second question around Contigo and Analytics, yes, indeed, we see now positive development here. Conference.
And so still we had headwind out of the COVID situation, specifically in the U. S. Market. So we see Conference. Progress here in Q3 and we expect further progress here in Q4.
Q4 is call. The quarter was the strongest net revenue new basis in Contigo, specifically in the analytics business, and we expect Yes for Contigo overall and including analytics.
That's very clear. Thank you.
Conference. The next question comes from Martin Price, Jefferies. Please go ahead.
Good afternoon and thanks for the presentation. Call. My question was actually on the post trade business. I was wondering how the new German digital securities law potentially changes the way Conference Call. You can offer issuance, custody and settlement services.
And to what extent that could be a game changer in terms of cost savings or margins within the domestic central securities depository or broader Clearstream business over the longer
term? Conference. Thank
you. Yes. Thanks, Martin. Good question around ground technology. Yes, obviously, call.
It's very good that Germany opens up here now for digital certificates basically And that helps to boost our strategy. We invest currently in a new digital platform for Clearstream and conference for Clearstream and obviously any regulation what's the process here is very positive. So our principal logic is that we Conference. Go for digital CSP for digital iCSP, that tokenization is a core element here. And And you know that this tokenization we did now for our collateral management activities what is bundled under call.
We have the most important market participants already connected and it's very much appreciated because we are overall able conference to increase the efficiency of the markets here. And then we will see what kind of benefit Conference. We have to give to the market participants and what kind of benefits we can keep for us. But overall, I think it's a very important development. And with our leading technology, I think we are ahead of the others and that will have positive impacts for Deutsche Borse.
Conference. That's great. Thanks, Gregor.
The next question comes from Michael Werner, UBS.
Call. Thank you very much, and thanks for the presentation. Two questions, and apologies if you addressed one of these before. But call. We saw in Q3 the financial expenses had come down quite sharply and I think you allude to some tax refunds call.
Leading to a lower number in Q3. I was just wondering what that number would have been in a more normalized environment. And then second, Call. I was just wondering if you guys as a company have been seeing any pressure with regards to wage inflation or expect Any pressure from wage inflation or any other type of inflation. I know you guys have an annual productivity Conference Call.
I'm going to conference. I'll now hand the call over to Chris. Thank you.
Conference.
Thanks, Michael, for the question. Group. With regard to the financial result, there's a onetime effect of €7,000,000 So we show minus So the real number would be minus 11. And the effect is out of the reduced rate for provision for interest on taxes. So, so far in Germany, the rate was Conference.
6% and that was from an authority perspective that this is not the right call number as an interest rate. And so we included now some 3%, so basically half of it. And so the effect overall on the Corp. Outstanding tax provisions is roughly €7,000,000 so as a onetime effect in Q3. Conference.
With regard to the second question of the wage inflation, yes, we obviously, currently, there's Higher inflation rate and so far we have not decided what is inflationary salary increase Next year, so we are still in the process to judge on that. But you can see our commitment that in principle, call. We want to increase the efficiency in our process by our continuous improvement process that we are able to cover that Conference. Inflationary increase on salaries, and that's also our target for the next year.
Call. And in addition, Mike, Peter speaking here, the majority of our people, the vast bulk of our costs on the HR side are coming from people Group. We are not organized by the trade unions, so where we have all the fairly component in there. And therefore, we do not expect a huge Inflation drift, right, higher than in the past, that's not the case.
Thanks, Peter. Thanks, Gregor.
Conference. The next question comes from Johannes Thormann, HSBC.
Call. Good afternoon, everybody. Jan Stohlman. One follow-up question and one other, please. On Clearstream, you elaborated The revenue growth guidance on NII excluding the NII effect, how large will be the miss of The NII guidance this year and what do you expect as a rebound next year?
And secondly, at 360t, Your fixed trading unit. We saw good revenue growth, but this did not translate into better EBITDA. Is this business still too How can you scale this business? Thank you.
Yes. So the first question on NII, I think we achieved now the bottom. It's the sum roughly €50,000,000 NII. This year, it's basically purely 30 basis points fee income for euro and for U. S.
Dollar denominated cash collaterals So that should be the bottom. And with regard to the outlook, it depends basically when the interest rates Conference. And here the short term interest rates will increase. So you have seen Some indications that the UK will potentially do right. There's also expectations that U.
S. Could do something next year. Euro, I don't know. So you have basically to make your assumptions. But in principle, there is upside potential for next year and Conference for 2023, what I would also expect.
And the customer cash balance is still around, let's say, Conference. Roughly €15,000,000,000 €50 percent is U. S. Dollar, 35% is euro and 15% Other currencies and now you could make also your math what you would assume for the next Conference 1 or 2 years. With regard to 360p EBITDA, so there's an impact out of onetime costs at on the EBITDA number.
So the real operational number is That we have also double digit growth on EBITDA. So let's say 10% on revenue and then we have Conference. At least the same on the EBITDA if I exclude some onetime allocation So there is a scalability and this is ensured and will happen in the future.
Call. All right. With this, we answered the last question on today's call. Thank you very much for your participation,