Good afternoon, ladies and gentlemen, and welcome to the Deutsche Borse AG Analyst and Investor Conference Call regarding the second quarter of 2026. The conference is being recorded.

Let me now turn the floor over to Mr. Jan Strecker.

Welcome, ladies and gentlemen, and thank you for joining us today to review our financial results for the second quarter of 2026. Present on today's call are Stephan Leithner, our Chief Executive Officer; and Jens Schulte, Chief Financial Officer.

Stephan and Jens will take you through the presentation. And following their remarks, we will open the lines for your questions.

The presentation materials have been distributed via e-mail and can also be downloaded from our Investor Relations website. The call is being recorded, and a replay will be made available shortly after the conclusion of today's session.

With that, let me now hand over to you, Stephan.

Thank you, Jan, and welcome, everyone. The first half of 2026 exceeded our expectations on the treasury side and confirmed our strong core growth trajectory with broad-based secular revenue growth, accelerating operating leverage and an upgraded full year outlook.

Let me take you through 5 key points and key themes that we really want to emphasize. The first key theme is our performance.

You will recall that Q1 benefited from a significant increase in volatility, particularly in March. As we said at the time, we expected activity levels to normalize after that spike.

This is exactly what we saw in Q2 and was fully consistent with our expectations. What is important is that even in this more normalized environment and against the strong prior year quarter, we delivered 9% net revenue growth without the treasury result and 13% EBITDA growth on the same basis.

Six of our 8 businesses areas delivered net revenue growth in the quarter, demonstrating the breadth and balance of our portfolio. This speaks to the quality of our growth.

The long-term trends we have been investing into for years continue to support our performance. For the first half as a whole, net revenue grew by 11% and EBITDA by 16% without treasury results.

This is a strong performance and shows the resilience and scalability of our model. On the treasury result, in Q1, we said that we were beginning to see an inflection point.

Q2 confirms that trend. The treasury results declined by only 1% at the group level.

This is the inflection we have been signaling. As a result, the drag on total net revenue growth has almost faded with overall growth reaching 7% in Q2.

A strong performance, let me come to the second point. The secular growth across our portfolio.

In the first half, security services, financial derivatives and fund services have been the strongest contributors with each of the 3 delivering mid-teens net revenue growth driven mainly by structural factors. Let me touch on each of the 3.

In Security Services, we continue to achieve broad-based growth across all key metrics, with assets under custody reaching record levels due to strong fixed income issuance and elevated settlement activity driven by retail participation. Collateral management outstandings crossed the EUR 1 trillion mark for the first time, a milestone that underscores the essential role of our infrastructure.

Clearstream's role as a core part of European financial market infrastructure remains highly relevant in this environment. Let me come to the second big contributor.

In the financial derivatives Eurex delivered strong performance in fixed income, with net revenues up 27%. As part of that, OTC clearing net revenue grew 49%, driven not only by the active account requirements translating into real activity but also by improved revenue quality.

The key drivers remain intact. The build-out of the euro yield curve ecosystem, regulatory requirements and efficiencies for our clients.

Eurex is fully on track to deliver on its 2026 fixed income commitments. That's far from self-fulfilling prophecy.

I think it's really enormous hard work by the teams. The third area of a very significant double-digit contribution is to fund services.

We continue to benefit from outsourcing and fund distribution and the gradual shift towards more capital markets-based retirement savings in Europe. Assets under custody reached new record levels again.

Importantly, the strength across our portfolio more than compensated for slower activity in commodities where volumes normalized after the exceptional Q1 and the well-known headwinds in the ESG business. This is exactly the benefit of our diversified business model when individual areas face temporary headwinds, the breadth of our portfolio ensures continued delivery of our plans.

On ISS stocks with the minority buyout now complete, we are setting the course for the next chapter. Last week, we announced the appointment of Ginny Gomez as the new CEO effective August 3.

She brings deep expertise in technology, data and AI and is the right leader to drive the next phase of growth, and we are very grateful to Gary Retelny. Let me touch on the third theme, the operating leverage and capital returns.

The first half again demonstrates the operating leverage of our model. This is supported not only by disciplined cost management but also by the progress we are making on AI and digitization, our global location concept and the 1 group operating model benefits, while at the same time, continuing to invest in the areas that support long-term growth.

This balance between savings, efficiency, scaling and on the other side, investing is important. We are not reducing investments in the future of the business, but we are ensuring that revenue growth translates into stronger EBITDA growth.

The first half shows that the model is working as intended, 3% underlying cost growth, only 2% staff cost, and I think we'll hear more on it from Jens in a minute. On capital returns during the quarter, we completed our EUR 500 million share buyback program.

At the time of our Q1 call, less than half had been executed. Buybacks are now an established element of our capital return framework complementing our progressive dividend policy.

As a fourth theme I would really want to leave with you is the progress on the transformation aspects. The themes set out in our leading the transformation strategy continued to gain momentum.

Starting with the broader European opportunity. I do not want to repeat the full strategic case we discussed last quarter.

The key point for Q2 is that the policy momentum in Europe continues to move in a direction that is closely aligned with the strategic choices we have made over many years. This is closely connected to the themes behind our strategy.

Deeper and more transparent capital markets, stronger market infrastructure, more retail participation and more efficient financing of the real economy. We are structurally positioned to benefit from all of these developments.

As a concrete step in Germany's broader agenda to modernize the financial system, strengthen capital markets and mobilize private wealth, the government is actively reforming private pensions. The new tax advantage retirement savings Depot, the Altus Force [indiscernible], and the early start pension for young people, the [indiscernible], are important steps towards broader capital markets-based savings.

In addition, at the end of June, the Fast Track legislative process was initiated to introduce a capital-based component to the state pension scheme similar to what has happened many years ago in Sweden. Over time, this should further accelerate higher participation in capital markets with positive implications for our trading and post-trading services in equities and our fund offerings.

At the European level, we see increasing support and momentum. The recent joint initiative from the 6 large European economies underline the shared ambition to deepen and integrate European capital markets Among the top 5 points: number one, was to strengthen fund and retail distribution spot on for our old fund acquisition.

The priorities are clear: stronger support for transparent trading venues in order to reduce fragmentation, more resilient clearing infrastructure, higher retail participation, better mobilization of private capital. Each of these priorities, if implemented well, will deepen European capital markets and drive incremental activity through our platforms.

The same is true as a third area for the European Commission's market integration and supervision package. We have spent years building integrated technology-enabled and regulated market infrastructure.

Taken together, the German retirement reform, the savings and investment Union, the E6 initiative and we see a more constructive long-term environment for European capital markets Deutsche Borse is well positioned to contribute to these developments and to benefit from them. We've invested ahead of the curve and will continue to do so.

That is what leading the transformation really means. Let me come to the second aspect of our transformational themes.

Turning to digital assets and tokenization. Here as well, the focus is for us on execution.

We've been investing in regulated digital asset infrastructure for years. The incremental point this quarter is that tokenization is moving further from experimentation towards really institutional use cases.

A key development is Clearstream's next-generation digital securities infrastructure which we unveiled during the quarter. This is an important step in our digital strategy.

It is designed to support the issuance, settlement, custody and servicing of digital securities in a regulated and scalable environment and to connect digital instruments with existing institutional market infrastructure. We are ahead of the curve.

We're ahead of what we see in other markets. This is exactly where we believe Deutsche Borse can add value not by creating parallel unregulated markets, but by bringing digital securities into trusted, resilient and regulated infrastructure.

A concrete example from the last quarter is the recent tokenization commercial paper issuance by the European Investment Bank through our digital infrastructure. It's not a proof of concept.

It has passed through all life cycle steps from issuance to settlement to custody. It is a real transaction with a leading supernational issuer that validates the strategic investments we have been making for years.

It shows that leading institutional issuers are looking for trusted, regulated and operationally robust infrastructure when they enter tokenized markets. Clearstream is well positioned in this space.

Combined with our broader digital assets initiatives and our strategic investment in Cargo we're building a secure and compliant gateway for institutional clients. The regulatory environment in Europe, including MiCA, plays to our strengths.

Clients want innovation, but they want it within a trusted and regulated framework. That is exactly where Deutsche Borse can add value.

So let me come to the fifth theme, our outlook. As always, we take a measured view.

The post Q1 normalization played out as anticipated. And the breadth of our first half performance reinforces our confidence.

We are in a strong position to raise our targets. The treasury result is now expected to exceed EUR 0.7 billion, lifting total net revenue to above EUR 6.4 billion.

Jens will take you through the details. So let me conclude.

H1 was a strong first half. We delivered broad-based growth, demonstrated operating leverage, completed our buyback program and continued to execute on our strategic priorities.

Therefore, the main message that I really want to reemphasize with you is straightforward. The business is performing well as a portfolio and proves its structural ability to grow.

The strategy is progressing in the long-term environment for European capital markets remains constructive. At the same time, we continue to build the infrastructure needed for the next phase of market development, from integrated European capital markets to regulated digital securities.

We are confident in our trajectory, fully on track to deliver on our 2026 goals and building the foundation for sustained growth through 2028 and beyond. With that, let me hand it over to Jens.

Yes. Thank you, Stephan, and welcome, everyone.

It's a pleasure to talk you through our financial results for the second quarter and first half of 2026. Let me start with the first half overview on Page 2.

The 11% net revenue growth without the Treasury result is precisely the kind of broad-based resilient performance that our business model is designed to deliver. This was fueled by continued underlying secular trends across all 4 segments, and it builds on the strong momentum we established in Q1.

Notably, this top line growth translated into bottom line performance. EBITDA without the treasury result grew 5 percentage points ahead of revenue growth.

This is the operating leverage story we have been articulating and the first half demonstrated clearly. The overall EBITDA margin expanded to 61%.

Operating costs for the first half increased by 4%. This includes around EUR 20 million of exceptional costs related to the acquisition of all funds.

Excluding these costs, underlying operating cost growth is fully in line with our guidance. Net profit attributable to Deutsche Borse shareholders increased 12% to EUR 1.2 billion, and cash EPS grew also 12% to EUR 6.73.

These strong overall numbers reflect the quality of our earnings growth. Turning to Page 3, the Q2 stand-alone view.

Net revenue with other treasury results grew 9%. This is a strong result considering the past Q1 market normalization that Stephan described and against a demanding comparison base.

Q2 last year was itself a strong quarter with 10% net revenue growth without the treasury result, driven by hated market activity around the U.S. tariff situation at that time.

The growth this quarter was broad-based and fueled by continued underlying secular drivers. Operating costs increased by 4% to EUR 644 million, but this included EUR 7 million of exceptional costs related to the Allfunds acquisition.

Excluding these, underlying operating cost growth amounted to 3% driven by inflation and investments, again, fully in line with our guidance. The treasury results stabilized at EUR 205 million.

As Stephan noted, the headwind has almost faded and total net revenue growth reached 7%. The financial result came in at negative EUR 42 million.

This includes the expected interest increase from the bond issuance we completed in March to finance the buyout of the ISS minority stake. EBITDA without the treasury results grew 13% and cash EPS, the overall measure of our profitability also increased 13% to EUR 3.33.

Now let me turn into the segments, starting with Investment Management Solutions on Page 4. Before going into the details, I would note that FX headwinds for the segment have largely faded.

On a constant currency basis, growth rates for both the segment and its 2 businesses would have been around 1 percentage point higher. In Software Solutions, net revenue grew 7% to EUR 180 million.

This was against a demanding comparison base. Q2 of '25 included a significant Tier 1 client win in the U.S.

This quarter also reflects the back-end loaded shape of the 26 delivery calendar that reflect on the Q1 call. In addition, the signing of a Tier 1 EMEA client expansion moved from Q2 into Q3, and we expect this to close shortly.

Together with the broader pipeline conversion, this supports double-digit growth for the full year. What is important is the quality and breadth of the underlying momentum.

Annual recurring revenue stood at EUR 717 million, up 14% in constant currency, in line with our guidance and against strong prior year comparables. Growth in '26 is broader based than in '25 with incremental ARR spread across a wide range of land and expansion deals rather than concentrated in a few landmark signings.

The Americas delivered 25% ARR growth, confirming the structural momentum of the North American institutional markets and APAC accelerated to 20% ARR growth, anchored by significant expansion with an Asian sovereign wealth fund and new logos in Southeast Asia. SaaS net revenue grew 4% in Q2 against a strong prior year comparison that included substantial license fees from the large U.S.

deal. The underlying recurring subscription engine remains fully intact with SaaS representing 45% of the H1 revenue mix.

On-premise net revenue grew 21%, boosted by a stronger than usual renewal cycle. On AI, roughly 15% of strategic R&D capacity is now dedicated to AI initiatives following through on the road map we presented at the SimCorp Global Summit.

This is already in production and delivering results, positioning AI, both as a client value driver and as a scalability lever on the cost side. In ESG, headwinds from subdued demand increased moderately in Q2, particularly in Market Intelligence and Corporate Solutions, where prolonged sales cycles continued to weigh on net revenue.

The political and legal environment around ESG-related services in some U.S. states also remains difficult, leading to a modest increase in legal costs in the quarter.

We expect this to continue in the second half and are managing these costs within our overall cost guidance. On the positive side, our ESG ratings and data business remained stable, underscoring the deep anchoring and continued relevance of our products and index grew 7% and supported by record levels of assets under management in ETFs.

This continues the trajectory we saw in Q1. Overall, the solid performance in Software Solutions and index more than offset the ESG headwinds.

Segment EBITDA of EUR 98 million reflected the higher prior year comparison base from financial investments and seasonal cost phasing. Adjusting for these effects, the underlying EBITDA trajectory remained positive.

Turning to Page 5, Trading and Clearing. Net revenue without the treasury result grew 7%, and EBITDA without the treasury results increased 11%.

These results demonstrate strong operating leverage, particularly given the normalization of market activity following the exceptional Q1. Financial derivatives was the standout performer again, with net revenue up 15%.

The details tell a compelling story of broad-based strength. Fixed income derivatives, net revenue grew 27% with all 3 pillars contributing strongly.

This performance reflects the deepening of our euro yield curve ecosystem, supported by record Eurozone sovereign issuance, divergent fiscal trajectories driving demand for our non-German LTR futures and growing institutional adoption across the curve. This is most visible in OTC clearing, which delivered an exceptional quarter, with net revenue up 49%.

This performance reflects higher volumes, the active account requirement beginning to translate into real activity and structural improvements in revenue quality, including a significant shift towards nonpackage volumes and adjusted partnership program terms. Importantly, while the EU buy-side activation rate has not yet increased materially, the onboarded client base has grown to over 2,500 and the number of active clients has approximately doubled to around 500 over the last 18 months.

With 80% of onboarded clients not yet active, there remains significant room to grow, and we are still in the early innings. The short-term interest rate derivatives, an important part of our overall lead curve offering.

We saw an improvement in market share from the lows we experienced in March. We have redesigned our incentive framework effective from July and will review the overall steel approach after the summer to calibrate our strategy.

We continue to believe that the broader benefits of the active account requirements will also support the build-out of our store franchise over time. Repo continued to perform very well, with net revenue up 41% and outstandings reaching a record EUR 1.4 trillion.

The structural drivers remain firmly intact, declining ECB excess liquidity, rising sovereign issuance and growing demand from public sector and buy-side entities. Equity derivatives saw a more modest growth following the March volatility spike, but the quality of revenue improved.

This growth was driven by a favorable product mix and the benefits of pricing measures we implemented earlier this year against the strong Q2 last year. Commodity has experienced a significant normalization of activity in European power derivatives as reflected in Q1, the exceptional performance driven by the search and guess derivatives and innovative power market activity was unlikely to repeat with the same intensity.

This is exactly what we are seeing. Hedging demand moderated as the geopolitical situation in the Middle East began to ease.

And we also saw some financially driven participants, reducing the risk exposure during the quarter. In addition, the lingering impact of higher collateral requirements weighed on trading activity, creating a further headwind for volumes.

The long-term secular growth drivers of our commodities business remain firmly intact growing global power consumption driven by electrification and data center demand, the energy transition, the continued shift of OTC onto exchanges and our expanding global footprint. We remain on track to deliver on our leading the transformation targets for the commodities business.

Cash equities trading benefited from ongoing demand for both European equities and ETFs with net revenue up 9%. This was supported by continued strong retail participation and the growing relevance of European equity markets and global portfolios.

Trends review as structural rather than cyclical. And for FX and digital assets, business achieved solid growth of 8% through client wins despite the normalization of the FX market environment following the currency volatility we saw in Q1.

Average daily volumes remained at all-time high levels, with June setting a new record, building on the milestone of crossing EUR 200 billion for the first time in March. The structural client acquisition momentum remains intact, and this is a business where we continue to gain market share quarter-by-quarter.

The treasury result in trading and clearing declined 7% to EUR 50 million, reflecting the continued impact of lower margin fees because of higher netting efficiency for our clients. Overall, Trading and Clearing delivered a strong quarter.

EBITDA growth significantly outpaced revenue growth, a powerful demonstration of the operating leverage embedded in this business. The details tele compelling story, structural growth and financial derivatives, resilient performance in cash equities and FX, fully compensating the anticipated normalization in commodities, which does not change the long-term trajectories.

Now moving on to Fund Services on Page #6. Net revenue without the treasury result grew 14% and EBITDA without the treasury result increased 20%.

This marks another quarter of strong double-digit growth and impressive operating leverage in this business. Fund processing was the key driver, with revenues up 19%.

This growth was fueled by record levels of assets under custody, which reached EUR 5 trillion, up 25% year-over-year as well as higher settlement activity, which surged 3%. These are remarkable numbers that reflect the structural growth of this business.

This performance is a direct result of our investments in our platform and our successful partnerships with global participants. These investments position us perfectly to capture the 2 powerful and reinforcing structural trends that Stephan described.

the industry-wide shift towards outsourcing and fund administration and the structural acceleration of capital markets-based retirement savings across Europe. The Allfunds acquisition is progressing as planned with the process of obtaining the required regulatory approvals fully on track.

We continue to expect completion in the first half of '27. Now turning to Securities Services on Page 7, which once again delivered an exceptional performance.

Net revenue without the treasury result grew 16%, while EBITDA without the treasury result surged 27%. This is the strongest operating leverage across all of our segments and it underscores the scalability of Clearstream's platform.

The growth was driven by record levels across all key metrics. Assets under custody reached EUR 17 trillion, up 8%, driven mainly by international debt issuance.

Settlement activity rose 14%, supported by elevated retail flows and collateral management outstandings crossed the EUR 1 trillion mark for the first time, reaching that level with 31% growth year-over-year. [indiscernible] demand for safe and efficient collateralization continues to propel this business forward.

I also want to draw your attention to the important inflection point. The treasury results in Security Services showed its first year-over-year growth since Q4 of '23, increasing 3%.

This growth was driven by higher cash balances, which grew 7% and by stabilizing interest rates. This is the turning point we have been signaling and it is now confirmed in the numbers.

As a result, total net revenue in Security Services grew 12%, reaching a new all-time high of EUR 441 million. Finally, let me conclude with our updated outlook for '26 on Page #8.

Our core guidance is confirmed. We continue to expect EUR 5.7 billion of net revenue and EUR 3.1 billion of EBITDA, both without the treasury results.

With roughly half of both targets delivered in the first half, we are tracking at the midpoint of our annual targets. The upgrade is on the treasury side.

The treasury result for '26 is now expected to exceed EUR 0.7 billion and this is driven by the changed global interest rate outlook and higher cash balances. Accordingly, total net revenue is now expected to exceed EUR 6.4 billion and all-in EBITDA to exceed EUR 3.8 billion.

Regarding operating costs, we continue to expect an increase of approximately 3% in '26, excluding the exceptional costs related to the acquisition of all funds. To sum up, a strong first half with broad-based secular growth and expanding margins, combined with an improved treasury result outlook gives us the confidence to upgrade our full year guidance, we are firmly on track.

That concludes our presentation. We look forward to your questions.

And the first question comes from Benjamin Goy from Deutsche Bank.

Maybe just one to follow-up questions on Security Services given the continued strong performance there. Can you elaborate on the custody margin, which seems to be tracking higher now in the second quarter and rowhow sustainable this is?

And then also on collateral management, you mentioned the EUR 1 trillion was crossed. It was always a business that theoretically had significant opportunities it still has EUR 1 trillion versus [ '17 ], but what is driving the latest acceleration in growth?

And yes, that would be appreciated.

Benjamin, I think, first of all, the question on the margin on the custody side is absolutely sustainable. I think we do not see any special effects there from the cost or whatever.

This is -- we're continuing to invest in the business in a solid way, but there is no special effects. So therefore, I think it is a very positive development and represents the scaling benefit.

Now on the collateral management, I mean that is a 30% increase in the quarter. The $1 trillion that you alluded to half year is a 20% growth on the revenues.

I think what we just see is a heightened sort of sensitivity and awareness of the clients. to collateral optimization.

That's what we really benefit on in a wider sense. And we have also added in the context on our product side or we have improved our collateral basket creation tools, and that gives us additional volumes.

And should a specified revenue margin in custody, which seems to be higher as well as the revenue capture better than your entity growth would [indiscernible]

I think, Benjamin, I mean, always the result of this combination of having collateral management revenues and custody in 1 line item and then comparing it to the custody assets. So if collateral management grows over proportionately 31% in terms of the volumes, then the average revenue margin, of course, will come up within the custody business on a stand-alone basis, we see stable to maybe slightly improving revenue margins.

And the next question comes from Grace Dargan from Barclays.

Maybe if I could just ask 2 quickly. So firstly, the on-premises in SimCorp was stronger than certainly I was expecting given your SaaS focus.

So how should we be thinking about progression of the on-premises revenues going forward? Has anything that particularly changed?

And then secondly, just on the kind of account activations, what's the catalyst to really get that moving from here?

Grace, on the first question, as I alluded to was an exceptional renewal cycle quarter for the on-premise business. The underlying strategic development is, of course, fully unchanged here.

So there is a full focus on driving SAAS forward. as I said, we had a strong prior year comparison with a large U.S.

client coming in. So that's basically made this growth rate look a little bit lower this quarter.

And then the other one was a bit inflated by an exceptional cycle but underlyingly, we continue to increase the share of SAS and on-premise revenues will in their share decrease over time. And then on the second question, the account activation.

So it's a combination of things, right? I mean 1 topic is, of course, regulatory tailwinds, right?

So we -- as you may have seen, the regulator, the ESMA brought out a report reviewing the current activation cycle and where people stand and the compliance degrees and so forth. And that also leads us to think that there may be a stricter enforcement coming towards us over time then also creating some tailwinds.

And the other thing is still simply that we believe we have a very competitive offering here, right? I mean we believe that particularly through the clearing angle and bond and overtime cross product margin, we believe that we should be able to win market share.

And the next question comes from Michael Werner from UBS.

Thank you very much for the presentation. I want to go back -- I have 1 question.

I want to go back to the security service business. We did see, as I alluded to in the earlier question, stronger revenue growth than cost revenue growth than asset on custody growth, even if you exclude the collateral management revenues, we saw a better settlement revenues as well versus the actual transactions.

I think it was plus 23% versus plus 14%. I'm just trying to figure out what's driving -- and again, this is 2 really strong quarters from this division.

I'm just trying to figure out, is this really being driven just by greater issuance within fixed income, and that comes with other fees and higher-margin business. Is this where you're actually succeeding in increasing the value-add offerings to the clients there.

I just want to get a little bit more color on what's been such a strong area.

I'm picking up on both of your sub questions in a way, the settlement, in particular, is something where the outer performance the revenue development versus the volume is really driven by the activation that we see and continue to see on the retail side. I think that is an important driver.

It is also influenced by the mix of our client base. So as we have highlighted before, we do see many of the neo brokers and those fresh and fast-growing players coming directly to us.

So I think that's a very important element that helps in addition to the product mix itself.

And the next questioner is Hubert Lam from Bank of America.

I just got one question on commodities. You talked about the long-term drivers within that business.

But in the near term, do you still expect to continue to see pressure as you've seen this quarter and what do you think could be the drivers for an improvement in the near term?

First of all, as you correctly say, Hubert, thank you for the question. It's very important to underline that the key drivers of the business are fully intact and some of them are midterm, but some of them are also driving the business more short term, right?

I mean things such as renewable energy, for example, and the volatility it brings to the network. That is something that is something also impacting on the short-term note the increasing share of new customers financially driven or algo traders our continued expansion in Japan and a bit in the Nordics, our [indiscernible] derivatives clearing offering through our Nodal Exchange in the U.S., all of these things actually also have an impact on the short term, let alone on the midterm.

So because of these things, we fully believe that the story is intact. Q2, we view as sort of an exceptional normalization after the first quarter as we alluded to because some participants have basically hedged their positions for the rest of the year.

Some participants reduce their positions also partly maybe because they created losses in the first quarter. So this is sort of an overreaction that we're seeing at the moment from our perspective, and we basically assume that that's going to normalize throughout the rest of the year.

And the next question comes from Arnaud Giblat from BNP Pariba.

My question is on SimCorp. So we're seeing a divergence between the revenues and ARR growth and I think you've touched upon this during the presentation and during our Capital Markets Day that we should expect this.

and revenue growth will continue to slow into '27 before catching up with ARR. But I was just wondering if you could give a bit more color in terms of where we are in that and maybe talk a bit more about mix of clients between on-premise and SaaS.

So just how things are shaping up and if you're still very confident that growth -- revenue growth and ARR growth will eventually catch up.

So I mean, first of all, on your last question, the mix, as we alluded to is almost half-half, right? So we are around the 45 percentage mark in terms of as revenue share and then the remainder is on-premise and other components of our revenues.

The underlying story is [indiscernible] you correctly alluded to, the revenue shift will be made as of the first of next year. and then ARR growth and accounting growth, particularly for the SAS part, but also overall, we'll move more closely together.

I think it's important to always keep in mind that even with that strategy over time unfolding, we will never have 0% on-premise and 100% SaaS, right? There will always be clients that require on-premise offerings, think about sovereign institutions, for example, who just because of regulation cannot move into the cloud.

So there will always be somewhat of a delta, but we are still fully on track to continue to close that gap next year with the accounting change.

I mean, one element that supports for me to build on that is the entire AI sort of product offering or it creates a strong incentive to go into the cloud. because clearly, the availability of the AI tools and the accessibility across SimCorp 1.

And that's a big discussion we are having with many clients, especially after the Global Summit, which was a big success as alluded to. So I think this is an accelerator of the sort of SaaS story.

And Ian White from Autonomous Research has the next question.

Maybe we could talk in a bit more detail about the developments within ESG in the second quarter. Do you have clients canceling Corporate Solutions services?

And if so, what are they switching to? And just on proxy advisory, are you seeing any contract cancellations or attempts to in-source those services by the asset management clients, please?

That's my main question. And maybe just a small follow-up.

We're starting to see inflation pick up, both in Europe and the U.S.A. In which parts of the business might that have some bearing on pricing discussions as we head into 2027, please?

Let me take your first one, Ian. Thanks for addressing the proxy advisory we generally see a very high renewal dynamics.

That's very positive. There have been selected cases.

Some of them quite public for reasons that are more related to the thematic public discussion on proxy. But overall, it's very clear that the sort of offering and the depth of our data from the history is a powerful sort of engine that drives the attractiveness of the ISS offering.

If there is move then certainly also the belief of very big players to have an in-house AI capabilities, one of the angles that is potentially relevant, yes.

Sorry. In the second question on pricing, which business that I referred to?

I was just -- the question was really for you guys, in which parts of the business will you start thinking about basically inflation and having a bearing on the price increases that you proposed to clients for 2027. Where is that relevant to you basically?

So overall, Ian, as you know, pricing in our growth trajectory plays only a minor role, right? So we're always guiding on average across the portfolio around 100 basis points.

We do from time to time in the businesses, review our pricing schedules, right, and also optimize those. We already shared.

I think with you guys, I think Thomas did that on the occasion of the Capital Markets Day, for example, that we had been doing so within Eurex at the end of last year, and that is also taking effect now. We are also working on the pricing schedules of a few of the other businesses, particularly within post trading, but it's not that 1 big strategic push, so to speak.

So we are -- on average, pricing is 1 smaller lever, but it's not a key component of our growth.

And the next question comes from Ben Bathurst from RBC Capital Markets.

Thanks, Stephan, for your update on the European opportunity at the start of the call. I just wondered if you could share thoughts on what the next key milestones are to advance some of those opportunities, and in particular, where you think you might see further progress over the next 6 to 12 months?

Thanks for picking up on this, Ben, because indeed, it is the tangibility that I think makes the last few months quite exciting and positive. Let me on my 3 different angles that I talked about.

The first one is really the domestic German sort of wider environment. I mean there's the activation by end of the year of the [indiscernible] the next leg, and then we will see into the first quarter of next year, the start of the public pension scheme support of capital market or capital savings based component.

So I think that's very tangible. We'll see the legislation come into effect in the beginning of next year.

I think with respect to the European sort of changes, then I do expect a process which will crystallize the outcome on both the commission side as well as the E side in the course of September and October. And then you know that European legislative framework requires a negotiation between parliament and commission and the government, and that will take into Q1.

But there's a lot of high pressure on that. So I think we will know the pattern of the outcome in the end of the year.

It will be very clear. And I'm very excited that they have picked up on some topics that were no go for many years like enforcing more public trading venues.

This is a big change that is going to come because it's a clear sort of perception that, that has overshot in the past. Now I think the last and third element is a general process progress on some of the digitization stories.

And there, I think, in particular, in autumn, the activation of the ECB's digital currency on the wholesale side or the first module of that is going live in October, I think that will support especially many of the issuance activities that we have started to do, which so far, we can do the securities lag digitally but we lack the cash lag. So I think in that sense, October for that.

And then, as I said, German legislation will -- with the beginning of the year will be effective and not just conceptual and then the European commission plan and outcome will be also clear in January and will power us for the next few years term.

And the last question comes from Oliver Carruthers from Goldman Sachs.

Oliver Carruthers from Goldman Sachs. I just have 1 question.

on the ARR in Software Solutions, please. I guess you've gone from 18% to 14% on a constant currency basis in 2 quarters.

My understanding of this metric is this effectively a function of your gross sales less any cancellations plus any pricing benefit. And I'm not asking you to give us the disclosure or the building blocks here.

But are you able to quantify the impact of the, I think, 2 big client wins that you had last year, I think [ Copper and AllianceBernstein ]. I know there were big wins and good momentum, but just 400 basis points is quite a big headwind.

I'm just trying to contextualize that in the context of the slowdown. And -- or perhaps another way, could you just confirm that there's been no change to the -- either the cancellation rates or the pricing relative to the comparable period last year.

Just again, just trying to frame the context of 18% to 14%.

We can confirm to you there is no cancellation dynamic. So that's not at all an issue we encounter.

There is also no reduced pricing power dynamics. That is not the case at all.

I think it really comes down that on an ARR level, certainly, some of those big clients can make a 2% or 3% difference in a single case. And we did speak a bit about 1 of the cases that slipped from Q2 to Q3.

So you can be assured that our teams were very bullish that they would get it done. As you also know, it's sometimes better from a pricing dynamics to not be pressurized to meet the quarter end or year-end, but to prop and negotiate the price in the contract.

So again, as I said, it's probably the -- can be a 2% or 3% difference in ARI if we really talk about a big trend.

Understood. So the moving parts between changes in quarter-to-quarter, subscription growth is really driven by gross sales.

This is the way to understand that.

Yes, absolutely. Thanks for the question, Oliver.

Great. There are no further questions in the line.

So therefore, we would like to conclude today's call. Thank you very much for your participation, and have a good day and a good summer.

Thank you.