Quarterly Report • Nov 12, 2015
Quarterly Report
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Interim Group Report for the fi rst nine months and the third quarter 2015
| All fi gures in € million | 3rd quarter 2015 |
3rd quarter 2014 |
9 months 2015 |
9 months 1 2014 |
Change in % |
|---|---|---|---|---|---|
| MLP Group | |||||
| Total revenue | 122.9 | 117.8 | 369.5 | 344.7 | 7.2 % |
| Revenue | 119.9 | 115.1 | 357.2 | 331.9 | 7.6 % |
| Other revenue | 3.1 | 2.6 | 12.3 | 12.8 | –3.9 % |
| 3 Pro forma EBIT |
0.2 | 4.9 | 8.3 | 9.4 | –11.7 % |
| Earnings before interest and tax (EBIT) | –0.7 | 4.9 | 7.4 | 9.4 | –21.3 % |
| EBIT margin (%) | –0.6 % | 4.2 % | 2.0 % | 2.7 % | – |
| Net profi t | –2.9 | 3.4 | 3.7 | 7.2 | –48.6 % |
| Earnings per share (diluted/undiluted) in € | –0.03 | 0.03 | 0.03 | 0.07 | –57.1 % |
| Cashfl ow from operating activities | 9.8 | 12.4 | 48.6 | 39.9 | 21.8 % |
| Capital expenditure | 3.1 | 5.9 | 8.7 | 12.2 | –28.7 % |
| Shareholders' equity | – | – | 369.0 | 376.8 2 |
–2.1 % |
| Equity ratio (%) | – | – | 22.2 % | 23.2 % 2 |
– |
| Balance sheet total | – | – | 1,664.0 | 1,624.7 2 |
2.4 % |
| Clients | – | – | 854,900 | 2 839,300 |
1.9 % |
| Consultants | – | – | 1,914 | 1,952 2 |
–1.9 % |
| Branch offi ces | – | – | 157 | 162 2 |
–3.1 % |
| Employees | – | – | 1,803 | 1,523 | 0.0 % |
| Arranged new business | |||||
| Old-age provisions (premium sum) | 760.0 | 830.0 | 2,010.0 | 2,200.0 | –8.6 % |
| Loans mortgages | 473.7 | 351.0 | 1,372.1 | 1,048.9 | 30.8 % |
| Assets under management in € billion | – | – | 27.9 | 2 27.5 |
8.0 % |
Previous year's values adjusted. The adjustments are disclosed under Note 3.
2 As of December 31, 2014.
3 Adjusted for acquisition of DOMCURA.
This Group interim report has been compiled in accordance with the requirements of the German Accounting Standards No. 16 (DRS 16) "Interim Reporting" and constitutes a continuation of the consolidated fi nancial statements 2o14. In this regard, it presents signifi cant events and business transactions of the fi rst nine months and the third quarter 2o15 and updates forecast-oriented information contained in the last joint management report. The Annual Report is available on our website at www.mlp-ag.com.
In the presentation of the results of operations, fi nancial position and net assets of the MLP Group in accordance with the International Financial Reporting Standards (IFRS), the corresponding fi gures from the previous year are shown in brackets.
The information contained in this Group interim report has neither been audited by an auditor nor subjected to an audit review.
The MLP Group (MLP) is the partner for all fi nancial matters – for private clients as well as for companies and institutional investors. With our four brands, each of which enjoys a leading position in their respective markets, we offer a broad range of services:
The views of our clients represent the starting point in each of these fi elds. Building on this, we then present our clients with suitable options in a comprehensible way so that they can make the right fi nancial decisions themselves. For the implementation, we examine the offers of all relevant product providers in the market. This process is based on scientifi cally substantiated market and product analyses
Manfred Lautenschläger and Eicke Marschollek founded MLP in 1971. Nearly 2,ooo self-employed client consultants and over 1,8oo employees work at MLP.
In the fi rst nine months of the fi nancial year the German stock market indices were characterised by high volatility. In the fi rst half-year, the German benchmark index DAX rose by 11.62% and posted a new all-time high of 12,219 points in the fi rst quarter – a development that was primarily attributable to the announcement of the "quantitative easing" programme by the European Central Bank. However, these gains were followed by a phase of signifi cantly falling stock prices due, in particular, to weak economic data from China, whose decreasing demand for commodities increasingly infl uenced global economic cycles. Furthermore, the rejection of the austerity and reform programme by the citizens of Greece in July compounded the negative sentiment. Consequently, on August 24 the DAX fell by over 7% to an intra-day low of 9,338 points. Another event – the emissions test fraud scandal at VW – which came to light at the end of September, depressed the share prices of the German automobile manufacturers. In addition, the hesitant stance of the US Central Bank (Federal Reserve) with respect to a possible interest rate rise led to further uncertainty. Compared to its low at the end of August, the DAX recovered some ground by the end of the reporting period but, at 9,66o points, remained 11.7% below its level at the end of the half-year.
Following a volatile fi rst half-year the MLP AG share continued to fl uctuate considerably during the course of the third quarter. After a positive start to 2o15 and after reaching an interim high of € 4.3o on May 26, the MLP share once again came under pressure – on account of the dividend payment and the associated ex-dividend markdown in mid-June as well as due to a further wave of selling. This was followed by a volatile third quarter in which the MLP share initially regained ground, rising to € 4.23 by the beginning of August which was close to its year high. During the course of the ensuing general market decline the MLP share also fell back but recovered from its low of € 3.71 on August 24, climbing to € 3.97 at the end of the period under review. At the nine-month stage, the MLP share price thus stood 7% above its level at the beginning of the year. At the end of September the daily trading volume based on an average of the previous twelve months rose to 77,700 shares per day (June 3o, 2o15: 7o,8oo).
Further information about the MLP share is available on our Investor Relations page on the Internet at www.mlp-ag.com in the section "MLP share".
| 9 months 2015 |
9 months 2014 |
|
|---|---|---|
| Shares outstanding at end of reporting period | 109,334,686 | 107,877,738 |
| Share price at the beginning of the year | € 3.71 | € 5.26 |
| Share price high | € 4.29 | € 6.07 |
| Share price low | € 3.33 | € 4.40 |
| Share price at the end of the quarter | € 3.97 | € 4.42 |
| Dividend for the previous year | € 0.17 | € 0.16 |
| Market capitalisation (end of the reporting period) | € 433,512,030.00 | € 476,819,601.96 |
The values disclosed in the following management report have been rounded to one decimal place. As a result, differences to reported total amounts may arise when adding up the individual values.
Compared to the fundamental principles of the Group as described in the MLP Group's Annual Report 2o14 and the changes in organisation and administration presented on page 7 in the Group Interim Reports for the fi rst and second quarters 2o15, the changes described below occurred during the period under review. Detailed information concerning "Business model", "Control system" and "Research and development" can be found on pages 26 to 31 of the MLP Group's Annual Report 2o14.
During the period under review MLP AG conducted a capital increase against contributions in kind. In exchange for the transfer of 33.33% of the shares in Schwarzer Familienholding GmbH (SFH GmbH), which is the parent company of the DOMCURA group of companies, 1,456,948 new shares were issued. These shares confer full dividend entitlement for the fi nancial year 2o15. The transaction resulted in a share capital increase of 1.35% from 1o7,877,738 shares to 1o9,334,686 shares. The capital increase against contributions in kind was registered in the Commercial Register of the district court of Mannheim on August 1o, 2o15.
In the third quarter of 2o15 various changes were made to the structure and organisation of the FERI Group. These included the amalgamation of FERI Institutional and Family Offi ce GmbH into FERI Trust GmbH. In the same period the German Financial Supervisory Authority (BaFin) registered FEREAL AG as a capital management company. The FERI subsidiary thereby fulfi ls the requirements of the Alternative Investment Fund Manager (AIFM) directive which German legislators implemented by way of the Capital Investment Act (KAGB). Amongst other aspects, the law requires the holding of a corresponding license for investments in tangible assets such as real estate.
In June MLP AG signed a company acquisition contract for the complete acquisition of the DOMCURA Group. With this step the MLP Group opens up a further strategically relevant fi eld of business. Primarily operating as so-called underwriting agencies, the respective companies of the DOMCURA Group draw up, develop and realise comprehensive coverage concepts from the entire marketplace in the fi eld of non-life insurance which are currently used by around 5,ooo market participants. DOMCURA will continue to implement and signifi cantly expand this successful business model. At the same time, considerable potential exists in combination with the existing MLP business, particularly in process management. Through the closing of the transaction on July 29, 2o15, MLP AG acquired 41.66% of the shares in SFH GmbH.
Within the framework of a capital increase against contributions in kind, which was registered in the Commercial Register of the district court of Mannheim on August 1o, MLP acquired a further 33.33% of the shares in SFH GmbH.
With retrospective effect from January 1, 2o15, MLP is entitled to a share in profi ts for 1oo% of the shares. The transaction volume amounted to a total of € 18 million. Two thirds of this purchase price was paid in cash for 66.66% of the shares in SFH GmbH. The remaining third through the described issuance of new shares against contribution in kind of 33.33% of the shares in SFH GmbH.
Within the framework of the fi nancial statement for the period ending September 3o, 2o15 DOMCURA was incorporated for the fi rst time into the MLP Group scope of consolidation.
The macroeconomic and industry-specifi c framework conditions did not signifi cantly differ from the outline provided in the MLP Group's Annual Report 2o14 (pages 32 to 42).
The Germany economy is currently continuing to follow its moderate uptrend. According to calculations by FERI Trust GmbH, the gross domestic product grew by o.5% in the third quarter.
Although production in the manufacturing industry is currently stagnating, signifi cant impetus is coming from services closely related to consumption. Strong private consumption is benefi tting from the continuing buoyancy of the labour market and is providing a considerable boost to the economy. According to fi gures released by the Federal Statistical Offi ce, the unemployment rate fell at the end of the traditional spring labour market upturn in September from 6.4% to 6.2% compared to the previous month and thus also remained below the level of the previous year (6.5%). In addition, further reduced energy prices are bolstering consumer purchasing power.
The tense situation in the Eurozone and the concerns about the effects of a possible signifi cant loss of momentum in the emerging markets, above all in China, could also dampen the economy in Germany. In this environment, companies are currently adopting a more restrained stance with respect to their investment programmes.
The industry situation in this consulting area has not changed compared to the statements on pages 33 to 36 in the MLP Group's Annual Report. The market environment in old-age provision remains diffi cult.
Currently almost half of the German population (48%) possesses at least one private life insurance or pension insurance policy. However, according to calculations by TNS Infratest, the number of newly-concluded policies in the last fi ve years fell by 33%. In addition to the continuing low interest phase, the market is also burdened by negative reports about life insurers and their products, with the result that many citizens remain hesitant about signing up to long-term contracts.
A current survey conducted by the German Savings Banks Association (DSGV) found that around 4o% of respondents in Germany will not allocate a monthly amount for old-age provision in 2o15 – and this proportion increases progressively for individuals on lower income. For people with less than € 1,5oo per month, the majority (51%) now no longer save on a monthly basis – in 2o13 the corresponding fi gure stood at just 38%. However, even higher-earning individuals are now apparently less willing to save: 25% of citizens with a monthly income of over € 2,5oo per month do not save anything towards their old-age provision on a monthly basis. Two years ago this fi gure stood at just 2o% (see chart).
While business with classical policies is declining throughout the market, new products without, or with lower guaranteed minimum returns are now increasingly coming into focus. However, the new product offerings are – as was shown by a study conducted by TNS Infratest – still as yet relatively unfamiliar in the market. Nevertheless, this area offers signifi cant future growth potential.
The market for full private health insurance in Germany remains characterised by a signifi cant degree of hesitancy. The "Continentale Study 2o15" revealed that private health insurance remains well accepted: in the survey almost two thirds of the interviewed German citizens (62%) think that the statutory health insurance scheme either currently does not, or in future will not provide an adequate level of care and more than three quarters (76%) of respondents are of the opinion that currently, or in future, only private health provision ensures a good standard of healthcare. Furthermore, 81% of individuals with full private health insurance are satisfi ed with the level of care or treatment available to them.
However, a current representative study conducted by MSR Insights found that the number of citizens with full private health insurance has been falling for years whilst private supplementary health insurance shows high growth potential.
The industry situation in this consulting fi eld has not changed compared to the statements provided on pages 36 to 38 of the MLP Group's Annual Report.
In the third quarter equity markets suffered signifi cant share price falls. In this respect, the DAX lost around 12% in value during the period between July and the end of September. At the same time, volatility was very high. The negative development of the equity markets was primarily due to growth weakness in Asia – notably in China – and in Latin America as well as to the, in part, indecisive monetary policy adopted by the Fed. Market corrections thus occurred.
According to fi gures released by the German Association for Investment and Asset Management (BVI), the volume of managed assets in the market rose from the beginning of the year to € 2,545 billion at the end of August (December 31, 2o14: € 2,382 billion). However, compared to the end of June (€ 2,568 billion) the fi gure fell slightly. Institutional business continued to attract the highest net infl ows but mutual funds also registered growth. Here, mixed funds were ranked in fi rst position, followed by equity funds and fi xed income funds.
Overall there were no fundamental changes in the industry situation which is outlined on pages 38 and 39 of the MLP Group's Annual Report.
The competitive conditions and the regulatory environment during the reporting period did not differ signifi cantly from the information provided in the MLP Group's Annual Report 2o14 (pages 4o to 42).
On January 1, 2o15 important changes came into force within the framework of the Life Insurance Reform Act (LVRG), parts of which will also have lasting effects on the competitive situation in the overall market. A YouGov survey of independent intermediaries found that since that date a majority of insurance brokers have experienced a deterioration in commission (85%) and cancellation liability (78%).
Further fi ndings of the survey: the smaller the broker's offi ce, the stronger the impact of a decline in life insurance business. MLP anticipates that the changes will put further pressure on margins – particularly affecting providers who are smaller and signifi cantly less qualityoriented than MLP.
In the past, MLP already implemented numerous requirements now stipulated in the new legislation at an early stage. We consider this to provide us with a clear competitive advantage over other market members.
In the third quarter as well as in the fi rst nine months the MLP Group increased total revenue compared to the previous year. In the period from January to September MLP achieved growth particularly in wealth management, loans and mortgages as well as in other commission and fees, in which the expansion of our real estate business is refl ected. Old-age provision decreased compared to the same period of the previous year. In the third quarter MLP generated growth in the non-life insurance sector, health insurance and loans and mortgages as well as in the real estate brokerage. Old-age provision remained signifi cantly below the previous year, while wealth management showed a stable development – despite the decrease in performance-linked fees due to the volatility in the capital markets.
In the third quarter, EBIT (earnings before interest and tax), EBT (earnings before tax) and Group net profi t were burdened by special factors which we describe in more detail in the results of operations section of this report. For this reason, these key fi gures for the third quarter as well as for the fi rst nine months remain below the corresponding values for the previous year.
As is usual in the MLP business model, the seasonality of our business performance, especially the fourth quarter and, more particularly, the last six weeks of the year, play a very signifi cant role in full-year revenue and overall earnings.
A detailed account of the changes is contained within the description of the fundamental principles of the group which can be found on page 7 of this report.
New client acquisition in the fi rst nine months continued to develop favourably. MLP welcomed 19,3oo new clients – a fi gure which slightly exceeded the level of the previous year (18,9oo). The total number of clients thus climbed to 854,9oo (June 3o, 2o15: 85o,8oo).
In the period from January to September 2o15 total revenue of the MLP Group rose to € 369.5 million (€ 344.7 million). Here, revenue from commissions and fees increased by 8.4% to € 341.1 million (€ 314.8 million). Against a backdrop of continuingly low interest rates, interest income remained below the level of the previous year and amounted to € 16.1 million (€ 17.1 million). Other revenue fell slightly to € 12.3 million (€ 12.8 million).
The breakdown by consulting areas shows continued positive development in wealth management. In the fi rst nine months, revenue rose by 14.8% to € 121.3 million (€ 1o5.7 million). The volume of assets managed by the MLP Group increased compared to the end of 2o14 and stood at € 27.9 billion. Viewing the third quarter in isolation, this equates to a fall of € 1.3 billion. The decrease was due to the corrections on the capital markets which, for example, infl icted a 12% loss on the German benchmark index DAX.
In the fi rst nine months revenue in old-age provision stood at € 128.o million (€ 133.1 million) and thus remained below the level of the previous year. Following a positive effect on fi rst quarter revenue development due to a special item, the fi rst nine months refl ect the continued hesitancy of clients towards commitment to long-term contracts. The premium sum for new business brokered by MLP in the reporting period decreased to € 2.o billion (€ 2.2 billion). In the fi rst nine months of 2o15 occupational provision accounted for 12.8% of this fi gure compared to 13.o% in the same period of the previous year.
Despite the diffi cult market conditions, revenue in health insurance increased, rising by 5.7% compared to the previous year to € 33.6 million (€ 31.8 million). Non-life insurance in the fi rst nine months developed very positively and climbed by 24.o% to € 36.7 million (€ 29.6 million). This fi gure refl ects, for the fi rst time, the positive effects from the acquisition of the DOMCURA Group which was concluded in July. At September 3o, 2o15 DOMCURA was incorporated for the fi rst time into the MLP Group scope of consolidation for the months of August and September. In this two-month period, DOMCURA contributed € 6.4 million to revenue in the non-life insurance area.
Revenue from loans and mortgages also developed favourably, increasing by 22% compared to the previous year and amounting to € 11.1 million (€ 9.1 million). Additional earnings from the joint venture company MLP Hyp totalled € 1.4 million (€ o.8 million) and were thus also signifi cantly above the previous year. Real estate brokerage continued to develop very positively and is shown under other commissions and fees. Here, revenue almost doubled to € 1o.4 million (€ 5.4 million).
Viewing the third quarter in isolation, total revenue rose to € 122.9 million (€ 117.8 million). Within this fi gure, revenue from commissions and fees increased from € 1o9.4 million to € 114.6 million. Interest income fell to € 5.3 million (€ 5.7 million). Other revenue stood above the previous year and amounted to € 3.1 million (€ 2.6 million).
The breakdown by consulting areas in the third quarter shows stable development in wealth management. Although a signifi cantly higher volume of performance fees was achieved in the same quarter of the previous year due to better market conditions, Q3 revenue still amounted to € 38.7 million (€ 38.8 million) – highlighting the overall positive development in this consulting area. However, the considerably lower performance fees directly impacted earnings. Revenue in old-age provision fell to € 44.8 million (€ 48.9 million).
Revenue in non-life insurance more than doubled, amounting to € 11.5 million compared to € 5.5 million in the previous year. This performance refl ects the aforementioned revenue contribution from DOMCURA. Revenue in health insurance rose by 6.5% to € 11.4 million (€ 1o.7 million). Positive revenue development was also recorded in loans and mortgages as well as in other commissions and fees which, at € 4.2 million (€ 3.2 million) and € 4.o million (€ 2.4 million) respectively, signifi cantly exceeded the previous year.
Commission expenses primarily contain performance-linked commission payments to our client consultants. This item also contains commission expenses in the DOMCURA segment. These variable expenses arise through fees for brokerage services in the non-life insurance business. In addition, there are commission expenses in the FERI segment which stem, in particular, from the activities in the fund administration area. Variable expenses incurred in this area include, for example, fees levied by the deposit bank as well as for fund sales. Signifi cantly infl uenced by higher revenue from commissions and fees, but also affected by the announced expenses within the framework of our recruiting campaign, commission expenses in the fi rst nine months increased to € 167.4 million (€ 149.6 million). Interest expenses fell to € 1.4 million (€ 2.3 million) due to the lower interest rate levels. Overall, cost of sales thus rose to € 168.8 million (€ 151.9 million).
Viewing the third quarter in isolation, cost of sales increased to € 59.6 million (€ 53.6 million). Commission expenses rose to € 59.1 million (€ 53.o million). Both items were primarily infl uenced by the fi rst time consolidation of DOMCURA in the third quarter. At DOMCURA revenue-dependent costs arise mainly through payments for brokerage services in the noninsurance business. Interest expenses decreased to € o.5 million (€ o.7 million).
In the fi rst nine months, administration costs (defi ned as the sum of personnel costs, depreciation and impairments as well as other operating expenses) rose to € 194.7 million (€ 184.2 million). Here, personnel costs totalled € 81.o million (€ 77.1 million). A signifi cant portion of this increase is attributable to the fi rst-time consolidation of DOMCURA. Depreciation and impairments climbed to € 11.8 million (€ 1o.1 million). This increase was due to higher depreciation on intangible assets that already occurred in the fi rst quarter as well as to depreciation of € 1.1 million in the second quarter on a property. Other operating expenses rose to € 1o1.9 million (€ 97.o million). These also include incidental acquisition costs relating to the DOMCURA purchase amounting to around € 1.1 million.
Viewing the third quarter in isolation, administration costs increased from € 59.6 million to € 64.5 million. Here, personnel costs rose from € 24.3 million to € 26.6 million. Depreciation and impairments decreased from € 3.4 million to € 2.9 million. Other operating expenses increased to € 35.o million (€ 31.9 million) which was primarily due to the fi rst-time consolidation of DOMCURA as well as to higher other operating expenses in the FERI segment. These were partly attributable to higher advisory costs relating to the attainment of a capital management company license (Kapitalverwaltungsgesellschaft, KVG) as well as to the described changes in the corporate structure at FERI.
After adjustment for the acquisition of the DOMCURA Group, pro forma EBIT (earnings before interest and tax) amounted to € 8.3 million (€ 9.4 million). Inclusive of the DOMCURA acquisition, EBIT totalled € 7.4 million (€ 9.4 million). This fi gure was burdened, on the one hand, by the mentioned seasonal nature of the DOMCURA business model. Based on this, the subsidiary records very strong earnings in the fi rst quarter of each year, followed by a loss from Q2 to Q4. If the company acquisition had taken place at January 1, 2o15 EBIT for the fi rst nine months would have stood at € 12.6 million at September 3o, 2o15. For the full year we continue to expect a positive result. Group EBIT was negatively affected by signifi cantly lower performance-linked fees in wealth management at the end of the third quarter compared to the previous year.
The fi nance cost stood at € –2.3 million and was thus signifi cantly below the previous year (€ –o.1 million). This fall was due to interest on a retrospective tax payment, originating primarily from MLP's international business activities which were already terminated by 2oo7. EBT (earnings before tax) thus amounted to € 5.o million, compared to € 9.3 million in the previous year. The tax ratio stood at 27.5% which was burdened by the aforementioned retrospective tax payment. Group net profi t totalled € 3.7 million compared to € 7.2 million in the previous year. The diluted and basic earnings per share amounted to € o.o3 (€ o.o7). For the current year, this calculation is based on the average number of shares outstanding as of September 3o, 2o15 of 1o8,12o,563 units. Based on the number of shares in the same period of the previous year totalling 1o7,877,738 shares, earnings per share also amounted to € o.o3 (€ o.o7).
Viewing the third quarter in isolation, pro forma EBIT amounted to € o.2 million (€ 4.9 million). Inclusive of the DOMCURA acquisition EBIT stood at € –o.7 million (€ 4.9 million). Due to the described one-off tax effects, the fi nance cost totalled € –2.o million (€ o.o million). Group net profi t fell to € –2.9 million (€ 3.4 million).
| 9 months | 9 months | ||
|---|---|---|---|
| All fi gures in € million | 2015 | 2014 | Change in % |
| Total revenue | 369.5 | 344.7 | 7.2% |
| Gross profi t 1 | 200.7 | 192.8 | 4.1% |
| Gross profi t margin (%) | 54.3% | 55.9% | –2.9% |
| Pro forma EBIT (bevor aquisitions) | 8.3 | 9.4 | –11.7% |
| Pro forma EBIT margin (%) | 2.2% | 2.7% | –18.5% |
| EBIT | 7.4 | 9.4 | –21.3% |
| EBIT margin (%) | 2.0% | 2.7% | –25.9% |
| Finance cost | –2.3 | –0.1 | >–100% |
| EBT | 5.0 | 9.3 | –46.2% |
| EBT margin (%) | 1.4% | 2.7% | –48.1% |
| Income taxes | –1.4 | –2.1 | –33.3% |
| Net profi t | 3.7 | 7.2 | –48.6% |
| Net margin (%) | 1.0% | 2.1% | –52.4% |
1 Defi nition: Gross profi t results from total revenue less commission expenses and interest expenses.
Related party disclosures are contained in Note 19.
Detailed information concerning the aims of fi nancial management is contained on page 49 of the MLP Group's Annual report 2o14.
The MLP business model is relatively low capital intensive and generates high cash fl ows. However, increased capital has been budgeted in order to meet the revised defi nition of equity and the stricter requirements of Basel III.
We are currently not using any borrowed funds in the form of securities or promissory note bond issues to fi nance the Group long term. Our non-current assets are fi nanced by non-current liabilities. Current liabilities to clients and banks from the banking business also represent further refi nancing funds which are also generally available to us in the long term.
At September 3o, 2o15 liabilities towards clients and banks from the banking business which totalled € 1,o84.6 million (December 31, 2o14: € 1,o25.1 million) were offset on the assets side of the balance sheet by receivables from clients and fi nancial institutions from the banking business amounting to € 1,o75.o million (December 31, 2o14: € 1,o54.9 million).
During the period under review MLP AG conducted a capital increase against contributions in kind (see page 5 "Changes in organisation and administration").
Cash fl ow from operating activities increased to € 48.6 million, compared to € 39.9 million in the same period of the previous year. Here, signifi cant cash fl ows result from the deposit business with our clients and from the investment of these funds.
Cash fl ow from investing activities changed from € –21.7 million to € –6.o million. In the reporting period, more term deposits matured than in the same period of the previous year.
| in € million | 3rd quarter 2015 |
3rd quarter 2014 |
9 months 2015 |
9 months 2014 |
|---|---|---|---|---|
| Cash and cash equivalents at the beginning of period |
96.1 | 48.5 | 72.1 | 61.4 |
| Cashfl ow from operating activities | 9.8 | 12.4 | 48.6 | 39.9 |
| Cashfl ow from investing activities | –9.4 | 1.4 | –6.0 | –21.7 |
| Cashfl ow from fi nancing activities | – | – | –18.3 | –17.3 |
| Change in cash and cash equivalents | 0.5 | 13.8 | 24.5 | 0.9 |
| Cash and cash equivalents at the end of period | 96.6 | 62.3 | 96.6 | 62.3 |
At the end of the third quarter 2o15, the MLP Group had cash and cash equivalents of around € 157 million. The liquidity situation therefore remains good. There are suffi cient liquidity reserves available to the MLP Group. In addition to the liquid funds, free lines of credit are also in place.
In the fi rst nine months the investment volume of the MLP Group amounted to € 8.7 million (€ 12.2 million). The vast majority of these investment measures, namely 85%, were undertaken in the fi nancial services segment. Here, the investments were primarily made in IT. All investments were fi nanced from cash fl ow.
At the balance sheet reference date on September 3o, 2o15 the balance sheet total o the MLP Group amounted to € 1,664.o million (December 31, 2o14: € 1,624.7 million) and thus remained almost unchanged compared to the end of 2o14. On the assets side of the balance sheet, intangible assets rose from € 156.2 million to € 172.9 million, was mainly due to the fi rst-time consolidation of DOMCURA (see notes 4, page 32). Receivables from banks in the banking business increased slightly € 57o.5 million (December 31, 2o14: € 559.3 million), primarily attributable to a rise in investments in sight deposits. Receivables from clients in the banking business remained stable at € 5o4.5 million (December 31, 2o14: € 495.6 million). Whilst fi nancial assets decreased to € 14o.o million at the balance sheet reference date (December 31, 2o14: € 145.3 million), cash and cash equivalents increased from € 49.1 million to € 79.6 million. This increase was mainly driven by the acquisition of DOMCURA. Other receivables and other assets fell to € 95.9 million (December 31, 2o14: € 117.7 million). This item essentially comprises commission receivables from insurance companies for whom we broker insurance policies. Due to the traditionally strong year-end business, these rise signifi cantly at the end of the year and then reduce again during the course of the following fi nancial year.
| All fi gures in € million | September 30, 2015 |
December 31, 2014 |
Change in % |
|---|---|---|---|
| Intangible assets | 172.9 | 156.2 | 10.7% |
| Property, plant and equipment | 66.4 | 66.0 | 0.6% |
| Investment property | 6.1 | 7.3 | –16.4% |
| Investments accounted for using the equity method | 3.0 | 2.8 | 7.1% |
| Deferred tax assets | 8.0 | 6.7 | 19.4% |
| Receivables from clients in the banking business | 504.5 | 495.6 | 1.8% |
| Receivables from banks in the banking business | 570.5 | 559.3 | 2.0% |
| Financial assets | 140.0 | 145.3 | –3.6% |
| Tax refund claims | 16.9 | 18.7 | –9.6% |
| Other receivables and other assets | 95.9 | 117.7 | –18.5% |
| Cash and cash equivalents | 79.6 | 49.1 | 62.1% |
| Total | 1,664.0 | 1,624.7 | 2.4% |
At the reference date on September 3o, 2o15, the equity capital of the MLP Group amounted to € 369.o million (December 31, 2o14: € 376.8 million). The reduction is primarily due to the payment of the dividend for the fi nancial year 2o14 in June of this year. The capital increase against contributions in kind in August of this year had an opposite effect. At the reference date the balance sheet equity ratio stood at 22.2% (December 31, 2o14: 23.2%). At the reference date, provisions reduced to € 82.8 million (December 31, 2o14: € 92.o million). The decrease was signifi cantly infl uenced by the reduction in provisions for client servicing commissions as these were already paid out on a regular basis during the course of the second quarter. Liabilities due to clients from the banking business rose to € 1,o63.3 million (December 31, 2o14: € 1,oo7.7 million), largely due to a further increase in client deposits.
Liabilities due to fi nancial institutions from the banking business stood at € 21.3 million (December 31, 2o14: € 17.4 million), resulting from higher refi nancing deposits. Tax liabilities increased to € 9.o million (€ 5.5 million). The rise was due to a retrospective tax payment within the framework of a regular tax audit. Essentially, this concerned the non-recognition of losses from international activities that MLP had terminated by 2oo7. Other liabilities fell to € 1o7.8 million (December 31, 2o14: € 117.8 million) and refl ect, among other aspects, lower commission claims by our client consultants. These rise sharply at the balance sheet reference date of December 31 as a result of our traditionally strong year-end business and then fall again in the following quarters.
| Liabilities and shareholders' equity as of September 30, 2015 | ||
|---|---|---|
| All fi gures in € million | September 30, 2015 |
December 31, 2014 |
Change in % |
|---|---|---|---|
| Shareholders' equity | 369.0 | 376.8 | –2.1% |
| Provisions | 82.8 | 92.0 | –10.0% |
| Deferred tax liabilities | 10.9 | 7.4 | 47.3% |
| Liabilities due to clients in the banking business | 1,063.3 | 1,007.7 | 5.5% |
| Liabilities due to bank in the banking business | 21.3 | 17.4 | 22.4% |
| Tax liabilities | 9.0 | 5.5 | 63.6% |
| Other liabilities | 107.8 | 117.8 | –8.5% |
| Total | 1,664.0 | 1,624.7 | 2.4% |
At the beginning of the year we provided a qualitative-comparative forecast for the development of Group EBIT which documented MLP's expectation to achieve a slight increase in full-year EBIT for the fi nancial year 2o15 compared to the previous year.
In the fi rst nine months of 2o15 revenue in health insurance showed slight growth as anticipated. Old-age provision fell slightly and thus remained within the framework of our adjusted expectations after the fi rst half-year. At the start of the year we had expected stable development.
At the beginning of the year we had expected to achieve a slight revenue increase in wealth management. Following the successful development in wealth management in the fi rst six months, we anticipated strong growth for the remaining portion of the year. However, in the third quarter only stable development was recorded. On a nine-month basis we have still seen strong growth – but this has been less pronounced than we had recently anticipated.
After adjustment for the DOMCURA acquisition, administration costs developed within the framework of our plan.
Earnings development remains below our expectations and is particularly attributable to the continuing market burdens in old-age provision as well as to the reduced momentum in wealth management on account of the correction in the capital markets in the third quarter.
MLP is expecting a signifi cant acceleration in terms of business development at the end of the year. However, in view of the weaker development in the third quarter, the continuingly very diffi cult market conditions in old-age provision and the strong fourth quarter in the previous year, the slight increase in EBIT that had previously been targeted will now presumably not be achieved.
The MLP Group structures its business into the following operating segments:
A detailed description of the individual segments is contained on pages 53 et seq. of the MLP Group's Annual Report 2o14. Following the closing of the DOMCURA acquisition on July 29, 2o15 this new segment was incorporated into the scope of consolidation of the MLP Group for the fi rst time at September 3o. Further relevant details are contained in the segment report for DOMCURA on page 22 of this report.
In the fi rst nine months total revenue in the fi nancial services segment amounted to € 272.1 million (€ 264.8 million) and was thus slightly above the level of the previous year. Sales revenue rose to € 263.3 million (€ 256.5 million). Other revenue totalled € 8.8 million compared to € 8.3 million in the previous year. Commission expenses rose due to higher sales revenue and the announced expenses within the framework of our recruiting campaign , increasing to € 112.7 million (€ 1o7.7 million). Interest expenses fell to € 1.4 million (€ 2.3 million) on account of lower interest rates. Personnel expenses remained almost unchanged at € 55.3 million (€ 53.6 million). Depreciation and impairments increased to € 7.6 million (€ 6.9 million), due primarily to one-off higher depreciation on intangible assets that occurred in the fi rst quarter. Other operating expenses amounted to € 91.9 million (€ 9o.9 million) and thus remained at the level of the previous year. EBIT climbed to € 4.6 million (€ 4.2 million). The fi nance cost reduced to € –o.2 million (€ –o.1 million). EBT (earnings before tax) thus amounted to € 4.4 million compared to € 4.1 million in the previous year.
Viewing the third quarter in isolation, total revenue amounted to € 87.5 million (€ 88.9 million) and thus remained at the level of the previous year. Here, sales revenue totalled € 85.9 million (€ 87.3 million). Other revenue remained unchanged at € 1.6 million (€ 1.6 million). In the presence of slightly lower sales revenue and stable administration costs, EBIT fell to € –1.2 million compared to € o.6 million in the previous year.
In the fi rst nine months total revenue in the FERI segment increased by 16.1% to € 93.5 million (€ 8o.5 million). In addition to new business, higher performance fees in the fi rst six months for the performance in client portfolios also contributed signifi cantly to this development. Due to the high degree of volatility on the capital markets in the third quarter, signifi cantly lower performance fees were earned in this period compared to the same period of the previous year. Commission expenses increased on account of higher revenue and rose to € 52.7 million (€ 43.9 million). Personnel expenses in the period under review climbed to € 21.3 million (€ 19.5 million) due to higher earnings in the period under review and the associated variable personnel expenses which were particularly incurred in the fi rst and second quarter. Other operating expenses amounted to € 9.3 million (€ 7.2 million). This increase is based partially on higher consultancy costs relating to the attainment of the capital management company license (Kapitalverwaltungsgesellschaft, KVG) as well as on the aforementioned change in the corporate structure at FERI. EBIT rose slightly to € 8.9 million (€ 8.4 million). EBT stood at € 8.7 million (€ 8.3 million).
Viewing the third quarter in isolation, total revenue amounted to € 29.6 million (€ 29.6 million) and thus remained at the level of the previous year despite signifi cantly lower performance fees. Commission expenses increased to € 17.o million (€ 15.2 million) due to the higher proportion of revenue from the FERI subsidiary in Luxembourg which specialises in fund administration. Personnel expenses fell slightly to € 6.5 million (€ 6.8 million). Other operating expenses amounted to € 3.4 million (€ 2.2 million). EBIT decreased to € 2.4 million (€ 4.9 million) on account of the described fall in performance fees. EBT reduced to € 2.3 million (€ 4.8 million).
| 93.5 | |||
|---|---|---|---|
| 9M 2015 | 8.9 | ||
| 80.5 | |||
| 9M 2014 | 8.4 |
At September 3o, 2o15 DOMCURA was incorporated for the fi rst time into the scope of consolidation at the MLP Group. The closing of the acquisition took place on July 29, 2o15. The segment report therefore only includes the months of August and September. As this is the fi rst consolidation, no fi gures for the previous year are shown.
The DOMCURA business model is characterised by a high degree of seasonality. Accordingly, the subsidiary generates high revenue and strong earnings in the fi rst quarter of each fi nancial year. However, in Q2 to Q4 a loss is incurred. The profi t for each full fi nancial year is thus generated in the fi rst quarter.
In the period under review sales revenue totalled € 6.7 million. Other revenue amounted to € o.2 million. Commission expenses stood at € 4.3 million and are essentially incurred as variable fees for brokerage services. The administration costs amounted to € 3.6 million. Here, personnel expenses stood at € 2.o million. Depreciation and impairments totalled € o.3 million and other operating expenses amounted to € 1.3 million. EBIT came in at € –o.9 million and EBT at € –o.9 million.
Total revenue in the Holding segment during the period from January to September amounted to € 8.2 million (€ 1o.o million) and thus remained below the level of the previous year. The higher revenue in the previous year was due to the positive effect on MLP resulting from the negative declaratory judgement against several former FERI shareholders. Following a one-off exceptional cost in the previous year, personnel expenses fell to € 2.4 million (€ 4.o million). Depreciation and impairments rose to € 2.6 million (€ 1.6 million). This rise was attributable to a one-off higher write-down due to the revaluation of a property in the second quarter. Other operating expenses totalled € 8.2 million compared to € 7.5 million in the previous year. EBIT fell to € –5.1 million (€ –3.1 million) due to lower revenue. The fi nance cost was signifi cantly burdened by the previously described tax effect and fell to € –2.1 million (€ –o.1 million). Here, other interest and similar expenses rose from € –o.4 million to € –2.4 million due to the interest expense on the retrospective tax payment. EBT thus fell to € –7.2 million (€ –3.2 million).
Viewing the third quarter in isolation, total revenue amounted to € 2.7 million (€ 2.7 million) and thus remained at the level of the previous year. Personnel expenses reduced slightly to € o.6 million (€ o.7 million). Depreciation and impairments totalled € o.5 million (€ o.5 million). Other operating expenses amounted to € 2.5 million compared to € 2.1 million in the previous year. EBIT stood at € –o.9 million (€ –o.7 million). EBT totalled € –2.9 million (€ –o.6 million).
As the MLP Group is a knowledge-based service provider, qualifi ed and motivated employees and consultants represent the most important foundation for sustainable company success. The focus is therefore on continuous further development of personnel work, qualifi cations and further training as well as recruiting new consultants.
During the period under review the number of employees in the MLP Group increased by around 18 percent – due to the acquisition of DOMCURA. At the reference date on September 3o, 2o15, MLP employed 1,8o3 people. After adjustment for the DOMCURA acquisition the number of employees rose slightly from 1,523 to 1,543. The new appointments were primarily made for positions at the company headquarters as well as at MLP Dialog.
| Segment | September 30th, 2015 |
September 30th, 2014 |
|---|---|---|
| Financial services | 1,302 | 1,288 |
| FERI | 234 | 288 |
| Holding | 7 | 7 |
| Total (without DOMCURA) | 1,543 | 1,523 |
| DOMCURA | 260 | – |
| Total | 1,803 | – |
At the end of the fi rst nine months, the number of client consultants fell. Due to the usual seasonal reduction in the fi rst three months of the year as well as to the continuingly challenging environment in recruiting, the number of consultants at September 3o decreased to 1,914 (September 3o, 2o14: 1,944). Viewing the third quarter in isolation, the number of consultants remained stable (June 3o, 2o15: 1,913). The turnover rate remains at a historically low level and, at 8.4%, also remains well below our maximum target of 12% (+/– 2%). The number of client consultant applications developed favourably and was more than 5o% above the same period in the previous year. The aim of the recruiting campaign that was launched this year is to once again increase the number of client consultants.
At September 3o MLP operated 157 offi ces (June 3o, 2o15: 16o). In the third quarter MLP opened a new offi ce in the university segment in Würzburg. In this way we aim to better utilise the potential arising from the growing number of graduates at universities. The opening of further offi ces in the university segment is planned.
There were no appreciable events after the balance sheet date affecting the MLP Group's net assets, fi nancial position or results of operations.
MLP's Group-wide early risk detection and monitoring system is used as the basis for a Groupwide active risk management. This system ensures appropriate identifi cation, assessment, controlling, monitoring and communication of the major risks. The aim of the MLP Group's integrated opportunity management system is the systematic and early identifi cation of opportunities and corresponding assessment.
There were no signifi cant changes to the risk and opportunity situation of the MLP Group during the period under review. There were no exceptional burdens within the framework of our counterparty default risks, market price risks, liquidity risks and operational or other risks in the third quarter 2o15.
The fi rst-time consolidation of DOMCURA has broadened the scope of consolidation of the MLP Group. DOMCURA is currently being integrated into the risk controlling and control processes. This is not associated with a change in the main types of risk. The MLP Group has adequate liquidity. At the balance sheet reference date on September 3o, 2o15, our core capital ratio stood at 13.1% (June 3o, 2o15: 14.3%) and thus remained above the 8% level prescribed by the supervisory body. The reduction in the ratio is primarily attributable to the intangible assets (see also notes 4, "Information concerning company acquisitions", page 32), which increased due to the acquisition of DOMCURA. This effect is mitigated through the capital increase against contribution in kind that was carried out in the third quarter. At the present time, no existence-threatening risks to the MLP Group have been identifi ed.
A detailed presentation of our corporate risks and opportunities as well as a detailed description of our risk and opportunity management are contained in our risk and opportunity report on pages 62 to 8o of the MLP Group's Annual Report 2o14.
In the period under review there were no signifi cant changes in our expectations of overall future economic development. A detailed description of these expectations can be found in the forecast section on page 81 of the MLP Group's Annual Report 2o14.
In the period under review there were no signifi cant changes in our expectations of the overall future industry situation and the competitive environment. A detailed description of these expectations can be found in the forecast section on pages 82 to 89 of the MLP Group's Annual Report 2o14.
With respect to the remainder of the current fi nancial year, in old-age provision further hesitancy is expected throughout the industry with respect to citizens' willingness to commit to long-term contracts. In the current discussion concerning the possible abolition of the guaranteed interest rate no decision is anticipated by the end of the year. According to estimates by the German Insurance Association (GDV) the premium sum for new business is likely to fall in 2o15. In private health insurance too, no appreciable improvements in the market conditions can be expected in the near term. In wealth management, risks through market corrections also exist at the end of the year.
With the release of its preliminary results for the third quarter and fi rst nine months on October 26, 2o15, MLP also adjusted its outlook for the fi nancial year 2o15. Details of the original forecast are contained on pages 89 to 92 of the Annual Report 2o14.
With a view to the remainder of the fi nancial year 2o15, we anticipate that the diffi cult market conditions will continue. Already at the end of the fi rst half-year we adjusted our expectations for the individual consulting areas. After completion of the fi rst nine months, we anticipate slightly to considerably regressive revenue in old-age provision. In health insurance we still expect to achieve slight growth. In wealth management we continue to expect strong growth on a full-year basis, even though the danger of further setbacks through volatile capital markets has increased. We expect that the administration costs – without consideration of the DOMCURA acquisition – will remain stable at around € 255 million.
As is usual with the MLP business model, we anticipate a signifi cant acceleration in terms of business development at the end of the year. However, in view of the aforementioned exceptional burdens in the third quarter, the continuingly very diffi cult markets in old-age provision and the strong fourth quarter last year, the hitherto targeted slight rise in EBIT compared to the previous year will presumably not be achieved.
We have good fi nancial strength which we intend to utilise together with our market positioning in order to further expand our competitive position.
| 3rd quarter | 3rd quarter | 9 months | 9 months | ||
|---|---|---|---|---|---|
| All fi gures in €'000 | Notes | 2015 | 2014 | 2015 | 20142 |
| Revenue | (7) | 119,895 | 115,143 | 357,217 | 331,908 |
| Other revenue | 3,053 | 2,610 | 12,278 | 12,761 | |
| Total revenue | 122,949 | 117,752 | 369,495 | 344,668 | |
| Commission expenses | (8) | -59,123 | -52,959 | -167,426 | -149,603 |
| Interest expenses | -516 | -667 | -1,357 | -2,275 | |
| Personnel expenses | (9) | -26,625 | -24,283 | -80,992 | -77,132 |
| Depreciation and impairments | (10) | -2,927 | -3,422 | -11,806 | -10,076 |
| Other operating expenses | (11) | -35,026 | -31,929 | -101,904 | -97,002 |
| Earnings from investments accounted for using the equity method | 538 | 375 | 1,371 | 793 | |
| Earnings before interest and tax (EBIT) | -729 | 4,866 | 7,380 | 9,374 | |
| Other interest and similar income | 193 | 218 | 396 | 519 | |
| Other interest and similar expenses | -2,233 | -218 | -2,740 | -639 | |
| Finance cost | (12) | -2,040 | 1 | -2,344 | -120 |
| Earnings before tax (EBT) | -2,769 | 4,867 | 5,037 | 9,254 | |
| Income taxes | -134 | -1,479 | -1,385 | -2,063 | |
| Net profi t | -2,904 | 3,388 | 3,652 | 7,191 | |
| Of which attributable to | |||||
| owners of the parent company | -2,904 | 3,388 | 3,652 | 7,191 | |
| Earnings per share in €1 | |||||
| basic/diluted | -0.03 | 0.03 | 0.03 | 0.07 |
1 Basis of calculation: Average number of shares at September 30, 2015: 108,120,563.
2 Previous year's values adjusted. The adjustments are disclosed under Note 3.
| All fi gures in €'000 | 3rd quarter 2015 |
3rd quarter 2014 |
9 months 2015 |
9 months 20141 |
|---|---|---|---|---|
| Net profi t | -2,904 | 3,388 | 3,652 | 7,191 |
| Gains/losses due to the revaluation of defi ned benefi t obligations | 1,602 | -1,647 | 1,602 | -6,531 |
| Deferred taxes on non-reclassifi able gains/losses | -468 | 477 | -468 | 1,893 |
| Non-reclassifi able gains/losses | 1,134 | -1,170 | 1,134 | -4,638 |
| Gains/losses from changes in the fair value of available-for-sale securities | -128 | 101 | -356 | 1,453 |
| Deferred taxes on non-reclassifi able gains/losses | -47 | -20 | 66 | -360 |
| Reclassifi able gains/losses | -175 | 81 | -290 | 1,093 |
| Other comprehensive income | 959 | -1,088 | 844 | -3,546 |
| Total comprehensive income | -1,945 | 2,300 | 4,496 | 3,645 |
| Of which attributable to | ||||
| owners of the parent company | -1,945 | 2,300 | 4,496 | 3,645 |
1 Previous year's values adjusted. The adjustments are disclosed under Note 3.
| September 30, | December 31, | ||
|---|---|---|---|
| All fi gures in €'000 | Notes | 2015 | 2014 |
| Intangible assets | 172,877 | 156,182 | |
| Property, plant and equipment | 66,449 | 66,037 | |
| Investment property | 6,116 | 7,262 | |
| Investments accounted for using the equity method | 3,016 | 2,772 | |
| Deferred tax assets | 7,963 | 6,728 | |
| Receivables from clients in the banking business | 504,538 | 495,569 | |
| Receivables from banks in the banking business | 570,549 | 559,316 | |
| Financial assets | (13) | 140,049 | 145,276 |
| Tax refund claims | 16,922 | 18,743 | |
| Other receivables and assets | (14) | 95,938 | 117,665 |
| Cash and cash equivalents | 79,574 | 49,119 | |
| Total | 1,663,991 | 1,624,668 |
| All fi gures in €'000 | Notes | September 30, 2015 |
December 31, 2014 |
|---|---|---|---|
| Shareholders' equity | (15) | 368,952 | 376,795 |
| Provisions | 82,761 | 92,049 | |
| Deferred tax liabilities | 10,922 | 7,404 | |
| Liabilities due to clients in the banking business | 1,063,323 | 1,007,728 | |
| Liabilities due to banks in the banking business | 21,259 | 17,380 | |
| Tax liabilities | 8,956 | 5,531 | |
| Other liabilities | (14) | 107,819 | 117,780 |
| Total | 1,663,991 | 1,624,668 |
| All fi gures in €'000 | 9 months 2015 |
9 months 2014 |
|---|---|---|
| Cash fl ow from operating activities | 48,591 | 39,893 |
| Cash fl ow from investing activities | -5,796 | -21,739 |
| Cash fl ow from fi nancing activities | -18,339 | -17,260 |
| Change in cash and cash equivalents | 24,456 | 893 |
| Cash and cash equivalents at the end of the period | 96,574 | 62,257 |
| All fi gures in €'000 | 3rd quarter 2015 |
3rd quarter 2014 |
|---|---|---|
| Cash fl ow from operating activities | 9,846 | 12,416 |
| Cash fl ow from investing activities | -9,394 | 1,367 |
| Cash fl ow from fi nancing activities | - | - |
| Change in cash and cash equivalents | 451 | 13,783 |
| Cash and cash equivalents at the end of the period | 96,574 | 62,257 |
The notes on the statement of cash fl ow appear in Note 16.
Equity attributable to MLP AG shareholders
| Gains/losses Revaluation gains/ from changes in losses related to the fair value of defi ned benefi t available-for-sale obligations after All fi gures in €'000 Share capital Capital reserves securities2 taxes As of January 1, 2014 107,878 142,184 837 –4,750 Retrospective adjustments – – – – As of January 1, 2014 (adjusted) 107,878 142,184 837 –4,750 Dividend – – – – Transactions with owners – – – – Net profi t – – – – Other comprehensive income – – 1,093 –4,638 Total comprehensive income – – 1,093 –4,638 As of September 30, 2014 107,878 142,184 1,930 –9,388 As of January 1, 2015 107,878 142,184 1,460 –10,730 Dividend – – – – Increase of capital - §202 of the German Stock Corporation Act (AktG) 1,457 4,543 - - Transactions with owners 1,457 4,543 - - Net profi t - - - - Other comprehensive income - - -290 1,134 Total comprehensive income - - -290 1,134 |
||
|---|---|---|
| Retained earnings1 |
Total share holders' equity |
|
| 128,329 | 374,477 | |
| –4,020 | –4,020 | |
| 124,309 | 370,457 | |
| –17,260 | –17,260 | |
| –17,260 | –17,260 | |
| 7,191 | 7,191 | |
| – | –3,546 | |
| 7,191 | 3,645 | |
| 114,240 | 356,842 | |
| 136,004 | 376,795 | |
| –18,339 | –18,339 | |
| - | 6,000 | |
| -18,339 | -12,339 | |
| 3,652 | 3,652 | |
| - | 844 | |
| 3,652 | 4,496 | |
| As of September 30, 2015 109,335 146,727 1,170 -9,596 |
121,317 | 368,952 |
1 Previous year's values adjusted. The adjustments are disclosed under Note 3.
2 Reclassifi able gains/losses.
The consolidated fi nancial statements were prepared by MLP AG, Wiesloch, Germany, the ultimate parent company of the MLP Group. MLP AG is listed in the Mannheim Commercial Register under the number HRB 332697 at the address Alte Heerstraße 4o, 69168 Wiesloch, Germany.
Since it was founded in 1971, the MLP Group (MLP) has been operating as a broker and adviser for academics and other discerning clients in the fi elds of old-age provision including occupational pension provision, healthcare provision, non-life insurance, fi nancing, wealth management and banking services.
The interim fi nancial report has been prepared in line with the regulations set out in IAS 34 "Interim fi nancial reporting". It is based on the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) as well as the interpretations of the International Financial Reporting Interpretation Committee (IFRIC), as applicable within the European Union (EU). In accordance with the provisions of IAS 34, the scope of the report has been reduced compared to the consolidated fi nancial statements at December 31, 2o14.
Except for the changes presented in the notes under item 3, the condensed consolidated interim fi nancial statements are based on the accounting and valuation methods as well as the consolidation principles that were applied to the Group fi nancial statements for the fi nancial year 2o14. These are presented in the Group notes of the Annual Report 2o14 that can be downloaded from the company's website (www.mlp-ag.com).
The interim fi nancial report has been drawn up in euros (€), which is the functional currency of the parent company. Unless otherwise specifi ed, all amounts are stated in thousands of euros (€'ooo). Both single and cumulative fi gures are values with the smallest rounding difference. As a result, differences to reported total amounts may arise when the individual values shown are added up.
The accounting policies applied are the same as those used in the previous year, with the following exceptions.
As described in the Annual Report, in the fi nancial year 2o14 MLP became aware of a case that was recorded inappropriately in the previous years. The following tables show the effects of this correction on the previous year's values:
| January 1, 2014 | |||
|---|---|---|---|
| All fi gures in €'000 | Before adjustment | Adjustment | After adjustment |
| Deferred tax assets | 1,974 | 1,284 | 3,258 |
| Other receivables and assets | 109,164 | –4,512 | 104,653 |
| Total assets | 1,536,865 | –3,227 | 1,533,638 |
| Shareholders' equity | 374,477 | –4,020 | 370,457 |
| Provisions | 85,138 | –1,000 | 84,138 |
| Deferred tax liabilities | 8,628 | –356 | 8,272 |
| Other liabilities | 106,560 | 2,148 | 108,708 |
| Total liabilities and shareholders' equity | 1,536,865 | –3,227 | 1,533,638 |
| 9 months 2014 | |||
|---|---|---|---|
| All fi gures in €'000 | Before adjustment | Adjustment | After adjustment |
| Other revenue | 13,761 | -1,000 | 12,761 |
| Total revenue | 345,668 | -1,000 | 344,668 |
| Earnings before interest and tax (EBIT) | 10,374 | -1,000 | 9,374 |
| Earnings before tax (EBT) | 10,254 | -1,000 | 9,254 |
| Income taxes | -2,353 | 290 | -2,063 |
| Net profi t | 7,901 | -710 | 7,191 |
| Total comprehensive income | 7,901 | -710 | 7,191 |
In the fi nancial year 2o15 the following new or revised standards are to be used for the fi rst time:
• Amendments to IAS 19 "Employee Benefi ts"
• Annual improvements to IFRS 2o1o–2o12
• Annual improvements to IFRS 2o11–2o13
There were no signifi cant effects on the representation of the Group's net assets, fi nancial position or results of operations.
On June 16, 2o15 MLP acquired the DOMCURA Group in order to targetedly develop a further fi eld of business.
As a so-called underwriting agency, DOMCURA draws up, develops and realises comprehensive coverage concepts from the entire marketplace in the fi eld of non-life insurance.
The cartel authorities approved the transaction on July 9, 2o15. The transaction was closed on July 29, 2o15 (acquisition reference date).
The purchase price for 1oo% of the shares from Schwarzer Familienholding GmbH amounts to € 18 million. € 12 million thereof will be paid in cash. The remaining sum of € 6 million will be settled through the issuance of new MLP shares as a capital increase against contributions in kind. As a result, the share capital of MLP AG will increase by 1.35%.
With effect from January 1, 2o15 MLP is entitled to a share in profi ts for 1oo% of the shares. In an initial step, MLP acquired 41.6% of the shares. A further 33.33% were transferred to MLP upon entry in the commercial register of a capital increase against contributions in kind which took place on August 1o, 2o15. A quarter of the shares will initially be retained by the DOMCURA company founder. The remaining, non-voting right-entitled 25% of the shares will be transferred at least at January 1, 2o17.
The capital increase is taking place within the scope of the capital authorised by the Annual General Meeting 2o14 under exclusion of subscription rights. Accordingly, the equity share capital of MLP AG will increase by 1.35% from € 1o7,877,738 to € 1o9,334,686. The new shares are subject to a holding period of six months from issue.
At the time of the preparation of the Interim Report, the purchase price allocation had not been fi nally completed All fi gures are to be viewed as provisional. The following is an overview of how the provisional goodwill is determined:
| Carrying amount | |||
|---|---|---|---|
| All fi gures provisional in €'000 | before purchase | Adjustment | Fair value |
| Intangible assets | 3,107 | 9,924 | 13,031 |
| Property, plant and equipment | 1,143 | – | 1,143 |
| Financial assets | 73 | – | 73 |
| Other receivables and other assets | 9,003 | – | 9,003 |
| Cash and cash equivalents | 14,127 | – | 14,127 |
| Provisions | –4,551 | – | –4,551 |
| Liabilities | –16,676 | – | –16,676 |
| Deferred tax liabilities | – | –3,787 | –3,787 |
| Net assets | 6,227 | 6,137 | 12,364 |
| Pro-rata net assets | 100% | 12,364 | |
| Goodwill | 5,669 | ||
| Purchase price | 18,032 | ||
| Cash outfl ow due to the acquisition | 12,000 |
The provisional goodwill primarily contains synergies from the business combination, the workforce of the DOMCURA Group as well as deferred tax liabilities.
The DOMCURA Group contributed with a net profi t of € –463 thsd to earnings at September 3o, 2o15. If the company acquisition had taken place at the beginning of the year, Group net profi t at September 3o, 2o15 would have amounted to € 7,138 thsd and revenue on Group level for the fi rst nine months would have totalled € 4o4,568 thsd.
Due to the seasonal development of its business, the Group generally expects earnings to be higher in the fourth quarter than in the previous quarters.
Beyond the new segment DOMCURA there were no signifi cant changes compared to December 31, 2o14.
| Financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 3rd quarter 2015 |
3rd quarter 2014 |
|
| Revenue | 85,921 | 87,290 | |
| of which total inter-segment revenue | 816 | 704 | |
| Other revenue | 1,607 | 1,637 | |
| of which total inter-segment revenue | 511 | 492 | |
| Total revenue | 87,528 | 88,927 | |
| Commission expenses | -38,621 | -38,470 | |
| Interest expenses | -516 | -668 | |
| Personnel expenses | -17,564 | -16,733 | |
| Depreciation and impairments | -1,721 | -2,372 | |
| Other operating expenses | -30,824 | -30,431 | |
| Earnings from investments accounted for using the equity method | 538 | 375 | |
| Segment earnings before interest and tax (EBIT) | -1,180 | 628 | |
| Other interest and similar income | 11 | 39 | |
| Other interest and similar expenses | -91 | -76 | |
| Finance cost | -80 | -37 | |
| Earnings before tax (EBT) | -1,260 | 591 | |
| Income taxes | |||
| Net profi t |
| FERI | DOMCURA | Holding | Consolidation | Total | |||||
|---|---|---|---|---|---|---|---|---|---|
| 3rd quarter 2015 |
3rd quarter 2014 |
3rd quarter 2015 |
3rd quarter 2014 |
3rd quarter 2015 |
3rd quarter 2014 |
3rd quarter 2015 |
3rd quarter 2014 |
3rd quarter 2015 |
3rd quarter 2014 |
| 28,157 | 28,577 | 6,725 | – | - | - | -908 | -724 | 119,895 | 115,143 |
| 92 | 20 | - | – | - | - | -908 | -724 | - | - |
| 1,478 | 1,062 | 163 | – | 2,651 | 2,699 | -2,846 | -2,788 | 3,053 | 2,610 |
| 4 | - | - | - | 2,330 | 2,296 | -2,846 | -2,788 | - | - |
| 29,635 | 29,639 | 6,888 | – | 2,651 | 2,699 | -3,754 | -3,513 | 122,949 | 117,752 |
| -16,950 | -15,150 | -4,323 | – | - | - | 771 | 660 | -59,123 | -52,959 |
| - | - | - | - | - | - | 1 | 1 | -516 | -667 |
| -6,461 | -6,830 | -1,967 | – | -633 | -720 | - | - | -26,625 | -24,283 |
| -437 | -542 | -272 | – | -496 | -507 | - | - | -2,927 | -3,422 |
| -3,405 | -2,227 | -1,265 | – | -2,467 | -2,131 | 2,936 | 2,859 | -35,026 | -31,929 |
| - | - | - | – | - | - | - | - | 538 | 375 |
| 2,383 | 4,890 | -940 | – | -946 | -659 | -46 | 8 | -729 | 4,866 |
| 5 | 2 | 5 | – | 174 | 180 | -2 | -3 | 193 | 218 |
| -40 | -49 | 0 | – | -2,141 | -140 | 39 | 47 | -2,233 | -218 |
| -36 | -46 | 5 | – | -1,967 | 39 | 38 | 45 | -2,040 | 1 |
| 2,347 | 4,844 | -935 | – | -2,913 | -619 | -8 | 52 | -2,769 | 4,867 |
| -134 | -1,479 | ||||||||
| -2,904 | 3,388 |
notes 35
| Financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 9 months 2015 |
9 months 20141 |
|
| Revenue | 263,320 | 256,517 | |
| of which total inter-segment revenue | 2,399 | 2,101 | |
| Other revenue | 8,809 | 8,292 | |
| of which total inter-segment revenue | 1,502 | 1,507 | |
| Total revenue | 272,129 | 264,809 | |
| Commission expenses | -112,650 | -107,657 | |
| Interest expenses | -1,359 | -2,277 | |
| Personnel expenses | -55,327 | -53,641 | |
| Depreciation and impairments | -7,600 | -6,897 | |
| Other operating expenses | -91,932 | -90,931 | |
| Earnings from investments accounted for using the equity method | 1,371 | 793 | |
| Segment earnings before interest and tax (EBIT) | 4,632 | 4,199 | |
| Other interest and similar income | 144 | 159 | |
| Other interest and similar expenses | -385 | -218 | |
| Finance cost | -241 | -59 | |
| Earnings before tax (EBT) | 4,391 | 4,140 | |
| Income taxes | |||
| Net profi t |
1 Previous year's values adjusted. The adjustments are disclosed under Note 3.
| FERI | DOMCURA | Holding | Consolidation | Total | |||||
|---|---|---|---|---|---|---|---|---|---|
| 9 months 2015 |
9 months 2014 |
9 months 2015 |
9 months 2014 |
9 months 2015 |
9 months 2014 |
9 months 2015 |
9 months 2014 |
9 months 2015 |
9 months 20141 |
| 89,879 | 77,638 | 6,725 | – | 0 | 0 | -2,708 | -2,247 | 357,217 | 331,908 |
| 309 | 146 | - | – | - | - | -2,708 | -2,247 | - | - |
| 3,623 | 2,901 | 163 | – | 8,180 | 9,971 | -8,497 | -8,404 | 12,278 | 12,761 |
| 4 | 4 | - | - | 6,991 | 6,892 | -8,497 | -8,404 | - | - |
| 93,502 | 80,539 | 6,888 | – | 8,180 | 9,971 | -11,205 | -10,650 | 369,495 | 344,668 |
| -52,740 | -43,913 | -4,323 | – | - | - | 2,287 | 1,967 | -167,426 | -149,603 |
| - | - | - | - | - | - | 2 | 2 | -1,357 | -2,275 |
| -21,291 | -19,484 | -1,967 | – | -2,408 | -4,007 | - | - | -80,992 | -77,132 |
| -1,307 | -1,563 | -272 | – | -2,626 | -1,616 | - | - | -11,806 | -10,076 |
| -9,312 | -7,156 | -1,265 | – | -8,240 | -7,493 | 8,845 | 8,578 | -101,904 | -97,002 |
| - | - | - | – | - | - | - | - | 1,371 | 793 |
| 8,852 | 8,423 | -940 | – | -5,094 | -3,145 | -71 | -103 | 7,380 | 9,374 |
| 22 | 4 | 5 | – | 254 | 371 | -29 | -15 | 396 | 519 |
| -128 | -149 | 0 | – | -2,373 | -425 | 146 | 153 | -2,740 | -639 |
| -105 | -145 | 5 | – | -2,119 | -55 | 117 | 139 | -2,344 | -120 |
| 8,747 | 8,278 | -935 | – | -7,212 | -3,199 | 46 | 36 | 5,037 | 9,254 |
| -1,385 | -2,063 | ||||||||
| 3,652 | 7,191 | ||||||||
notes 37
| All fi gures in €'000 | 3rd quarter 2015 |
3rd quarter 2014 |
9 months 2015 |
9 months 2014 |
|---|---|---|---|---|
| Old-age provision | 44,839 | 48,879 | 127,958 | 133,139 |
| Wealth management | 38,716 | 38,753 | 121,285 | 105,703 |
| Non-life insurance | 11,513 | 5,459 | 36,749 | 29,587 |
| Health insurance | 11,381 | 10,741 | 33,584 | 31,841 |
| Financing | 4,206 | 3,228 | 11,118 | 9,130 |
| Other commission and fees | 3,985 | 2,360 | 10,433 | 5,418 |
| Commission and fees | 114,638 | 109,420 | 341,127 | 314,818 |
| Interest income | 5,257 | 5,723 | 16,089 | 17,089 |
| Total | 119,895 | 115,143 | 357,217 | 331,908 |
In the period from January 1 to September 3o, 2o15 commission expenses rose from € 149,6o3 thsd to € 167,426 thsd compared to same period of the previous year. These mainly contain the commissions and other fee components for the freelance MLP consultants in the fi nancial services segment. For further explanations please refer to the section "Results Of Operations" of the Group Interim Management Report.
Personnel expenses increased in the period from January 1 to September 3o, 2o15 compared to the same period of the previous year from € 77,132 thsd to € 8o,992 thsd. For further explanations please refer to the section "Employees and Consultants" of the Group Interim Management Report.
At September 3o, 2o15, the MLP Group had the following numbers of employees in the strategic fi elds of business:
| September 30, 2015 |
September 30, 2014 |
|||||
|---|---|---|---|---|---|---|
| of which executive employees |
of which mar ginal part-time employees |
of which executive employees |
of which mar ginal part-time employees |
|||
| Financial services |
1,302 | 30 | 75 | 1,288 | 33 | 82 |
| FERI | 234 | 9 | 53 | 228 | 8 | 51 |
| DOMCURA | 260 | 7 | 26 | - | - | - |
| Holding | 7 | 2 | - | 7 | 2 | - |
| Total | 1,803 | 48 | 154 | 1,523 | 43 | 133 |
The depreciation and impairments include a non-scheduled writedown on intangible assets amounting to € 1,5oo thsd (previous year: € o thsd).
Also after awareness of termination of the operating-leasing relationship with effect from December 31, 2o15, the "investment property" underwent an impairment review. The determined impairment requirement amounts to € 1,116 thsd (previous year: € o thsd).
As at September 3o, 2o15 impairment expenses recorded in connection with DOMCURA amounted to € 272 thsd (previous year: € o thsd).
| All fi gures in €'000 | 3rd quarter 2015 |
3rd quarter 2014 |
9 months 2015 |
9 months 2014 |
|---|---|---|---|---|
| Intangible assets | 1,433 | 2,031 | 4,960 | 5,814 |
| Property , plant and equipment | 1,490 | 1,376 | 4,200 | 4,212 |
| Investment property | 4 | 15 | 29 | 49 |
| Depreciation | 2,927 | 3,422 | 9,189 | 10,076 |
| Intangible assets | – | – | 1,500 | – |
| Property, plant and equipment | – | – | - | – |
| Investment property | – | – | 1,116 | – |
| Impairments | – | – | 2,616 | – |
| Total | 2,927 | 3,422 | 11,806 | 10,076 |
| 3rd quarter | 3rd quarter | 9 months | 9 months | |
|---|---|---|---|---|
| All fi gures in €'000 | 2015 | 2014 | 2015 | 2014 |
| IT operations | 11,551 | 11,651 | 35,010 | 35,063 |
| Rental and leasing | 4,313 | 3,276 | 10,767 | 10,149 |
| Administration operations | 2,921 | 2,778 | 8,557 | 8,464 |
| Consultancy | 2,937 | 3,004 | 8,304 | 7,952 |
| External services – banking business | 1,734 | 1,478 | 4,968 | 4,561 |
| Representation and advertising | 1,621 | 1,361 | 4,795 | 4,635 |
| Other external services | 1,772 | 853 | 3,858 | 2,985 |
| Training and further education | 879 | 1,157 | 3,785 | 3,045 |
| Premiums and fees | 1,042 | 851 | 2,939 | 2,808 |
| Travel expenses | 769 | 884 | 2,720 | 2,846 |
| Expenses for commercial agents | 471 | 328 | 2,022 | 1,558 |
| Insurance | 661 | 567 | 1,987 | 1,856 |
| Depreciation and impairments of receivables | 202 | 858 | 1,920 | 2,110 |
| Entertainment | 499 | 592 | 1,872 | 2,160 |
| Maintenance | 963 | 416 | 1,662 | 1,575 |
| Other employee-related expenses | 311 | 269 | 934 | 771 |
| Audit | 270 | 218 | 750 | 685 |
| Goodwill payments | 261 | 95 | 564 | 383 |
| Remuneration for members of the Supervisory | ||||
| Board | 201 | 207 | 603 | 636 |
| Sundry other operating expenses | 1,647 | 1,087 | 3,887 | 2,761 |
| Total | 35,026 | 31,929 | 101,904 | 97,002 |
The costs of IT operations mainly consist of IT services and computer centre services that have been outsourced to an external service provider. The expenses for administration operations contain costs relating to building operations, offi ce costs and communication costs. The consulting costs are made up of tax advice costs, legal advice costs as well as general and IT consulting costs. The item "External services – banking business" mainly contains securities settlement and transaction costs in connection with the MLP credit card. Expenses for representation and advertising include cost incurred due to media presence and client information activities. The depreciation and impairment of receivables contain depreciation and impairment of other receivables and assets amounting to € 1,57o thsd (previous year: € 1,353 thsd) and depreciation and impairment of receivables from clients from the banking business amounting to € 35o thsd (previous year: € 757 thsd). Expenses for commercial agents include costs for former consultants and the train-ing allowance granted to new consultants. Sundry other operating expenses mainly comprise expenses for other taxes, cars, literature, donations and expenses from currency conversion. Consulting expenses comprise incidental acquisition costs of € 1,o38 thsd generated in connection with the acquisiton of DOMCURA.
| All fi gures in €'000 | 3rd quarter 2015 |
3rd quarter 2014 |
9 months 2015 |
9 months 2014 |
|---|---|---|---|---|
| Other interest and similar income | 193 | 218 | 396 | 519 |
| Interest expenses from fi nancial instruments | -2,113 | -71 | -2,379 | -200 |
| Interest expenses from net obligations for defi ned benefi t plans |
-120 | -146 | -361 | -439 |
| Other interest and similar expenses | -2,233 | -218 | -2,740 | -639 |
| Finance cost | -2,040 | 1 | -2,344 | -120 |
The decrease in the fi nancial result is mainly attributable to interest expenses in connection with a retrospective tax payment and lower income from bank deposits.
| All fi gures in €'000 | September 30, 2015 |
December 31, 2014 |
|---|---|---|
| Held-to-maturity investments | 54,636 | 43,983 |
| Financial assets at fair value through profi t and loss | 20,064 | 20,453 |
| Available-for-sale fi nancial assets | - | 5,074 |
| Debentures and other fi xed income securities | 74,700 | 69,510 |
| Available-for-sale fi nancial assets | 5,877 | 6,129 |
| Financial assets at fair value through profi t and loss | 1,315 | 1,231 |
| Shares and other variable yield securities | 7,192 | 7,359 |
| Fixed and time deposits (loans and receivables) | 52,125 | 63,138 |
| Loans (loans and receivables) | 74 | - |
| Investments in non-consolidated subsidiaries (available-for-sale fi nancial assets) | 5,959 | 5,268 |
| Total | 140,049 | 145,276 |
The decrease in fi nancial investments results primarily from reduced term deposit investment.
Due to the seasonally stronger year-end business, high receivables from insurance companies as well as high liabilities towards commercial agents at December 31, 2o14 had to be shown which were then balanced out in the fi rst quarter of 2o15. Through the seasonal infl uences a lower amount of receivables and liabilities were built up in the fi rst nine months of 2o15. As at September 3o, 2o15 items in other liabilities in connection with DOMCURA amounted to € 24,693 thsd (previous year: € o thsd).
The share capital of MLP AG is made up of 1o9,334,686 (December 31, 2o14: 1o7,877,738) no-parvalue shares. The change results from the capital increase relating to the DOMCURA acquisition. For further explanations please refer to note 4.
The capital reserves were increased by € 4,543 thsd in the course of the capital increase.
The retained earnings include statutory reserve of € 3,117 thsd (previous year: € 3,117 thsd).
Dividend
In accordance with the resolution passed at the Annual General Meeting on June 18, 2o15 a dividend of € 18,339 thsd (previous year: € 17,26o thsd) was to be paid for the fi nancial year 2o14. This corresponds to € o.17 per share (previous year: € o.16 per share).
The consolidated statement of cash fl ow shows how cash and cash equivalents have changed in the course of the year as a result of infl ows and outfl ows of funds. As per IAS 7 "Statement of Cash Flows", differentiation is made between cash fl ows from operating activities, from investing activities and from fi nancing activities.
Cash fl ow from operating activities results from cash fl ows that cannot be defi ned as investing or fi nancing activities. It is determined on the basis of net profi t. As part of the indirect determination of cash fl ow, the changes in balance sheet items due to operating activities are adjusted by effects from changes to the scope of consolidation and currency translations. The changes in the respective balance sheet items can therefore only be partially aligned with the corresponding values in the published consolidated balance sheets. For further details, please refer to the "Financial position" section in the management report.
Cash fl ow from investing activities is mainly infl uenced by the investment of monies in fi xedterm deposits as well as by matured term investments.
Cash fl ow from fi nancing activities includes cash-relevant equity changes and loans used and paid back.
Cash and cash equivalents with a term to maturity of not more than three months are recorded under cash and cash equivalents. Cash equivalents are short-term fi nancial assets which can be converted into cash at any time and which are only subject to minor value fl uctuation risks.
| All fi gures in €'000 | September 30, 2015 |
September 30, 2014 |
|---|---|---|
| Cash and cash equivalents | 79,574 | 39,257 |
| Loans ≤3 months | 17,000 | 23,000 |
| Cash and cash equivalents | 96,574 | 62,257 |
Receivables of MLP Finanzdienstleistungen AG due from banks are included in cash and cash equivalents provided they are separable as own-account investing activities. Inseparable elements are allocated to the operating business of the banking business segment and therefore to cash fl ow from operating activities.
Compared to December 31, 2o14 contingent liabilities on account of sureties and warranties (face value of the obligation) increased from € 3,156 thsd to € 3,915 thsd. Compared to December 31, 2o14 irrevocable credit commitments (contingent liabilities) rose from € 32,874 thsd to € 52,o43 thsd.
Beyond this there were no signifi cant changes compared to December 31, 2o14.
The carrying amounts and fair values of fi nancial assets and fi nancial liabilities, including their (hierarchical) tiers, are grouped into fi nancial instrument classes and categories as shown in the following tables.
| September 30, 2015 | |||||||
|---|---|---|---|---|---|---|---|
| Carrying amount |
Fair value | No fi nancial instruments according to IAS32/39 |
|||||
| All fi gures in €'000 | Carrying amount corresponds to fair value |
Level 1 | Level 2 | Level 3 | Total | ||
| Financial assets measured at fair value | 27,256 | 16,976 | 10,280 | 27,256 | |||
| Fair Value Option | 1,315 | 1,315 | 1,315 | ||||
| Financial investments (share certifi cates and structured bonds) |
1,315 | - | 1,315 | - | - | 1,315 | - |
| Available-for-sale fi nancial assets | 25,941 | 15,661 | 10,280 | 25,941 | |||
| Financial investments (share certifi cates and investment fund shares) |
5,877 | - | 5,524 | 353 | - | 5,877 | - |
| Financial assets (bonds) | 20,064 | - | 10,137 | 9,927 | - | 20,064 | - |
| Financial assets measured at amortised cost | 1,339,421 | 510,527 | 21,152 | 415,775 | 421,818 | 1,369,272 | |
| Loans and receivables | 1,278,827 | 504,568 | 381,916 | 421,818 | 1,308,302 | ||
| Receivables from banking business – clients | 504,538 | 112,776 | - | - | 421,818 | 534,594 | - |
| Receivables from banking business – banks | 570,549 | 188,052 | - | 381,916 | - | 569,969 | - |
| Financial investments (fi xed and time deposits) | 52,125 | 52,125 | - | - | - | 52,125 | - |
| Financial investments (loans) | 74 | 74 | - | - | - | 74 | - |
| Other receivables and assets | 71,968 | 71,968 | - | - | - | 71,968 | 23,970 |
| Cash and cash equivalents | 79,574 | 79,574 | - | - | - | 79,574 | - |
| Held-to-maturity investments | 54,636 | 21,152 | 33,859 | 55,011 | |||
| Financial assets (bonds) | 54,636 | - | 21,152 | 33,859 | - | 55,011 | - |
| Available-for-sale fi nancial assets | 5,959 | 5,959 | 5,959 | ||||
| Financial assets (investments) | 5,959 | 5,959 | 5,959 | ||||
| Financial liabilities measured at amortised cost | 1,161,531 | 1,120,772 | 40,299 | 1,161,071 | |||
| Liabilities due to banking business – clients | 1,063,323 | 1,043,435 | - | 19,981 | - | 1,063,416 | - |
| Liabilities due to banking business – banks | 21,259 | 387 | - | 20,319 | - | 20,706 | - |
| Other liabilities | 76,950 | 76,950 | - | - | - | 76,950 | 30,869 |
| Sureties and warranties | 3,915 | 3,915 | 3,915 | ||||
| Irrevocable credit commitments | 52,043 | 52,043 | 52,043 |
| December 31, 2014 | |||||||
|---|---|---|---|---|---|---|---|
| Carrying amount |
Fair value | No fi nancial instruments according to IAS32/39 |
|||||
| All fi gures in €'000 | Carrying amount corresponds to fair value |
Level 1 | Level 2 | Level 3 | Total | ||
| Financial assets measured at fair value | 32,887 | 17,073 | 15,814 | 32,887 | |||
| Fair Value Option | 6,305 | 1,231 | 5,074 | 6,305 | |||
| Receivables from banking business – clients | – | – | – | – | – | – | – |
| Financial investments (share certifi cates and structured bonds) |
6,305 | – | 1,231 | 5,074 | – | 6,305 | – |
| Available-for-sale fi nancial assets | 26,582 | 15,843 | 10,739 | 26,582 | |||
| Financial investments (share certifi cates and investment fund shares) |
6,129 | – | 5,704 | 425 | – | 6,129 | – |
| Financial assets (bonds) | 20,453 | – | 10,138 | 10,315 | – | 20,453 | – |
| Financial assets measured at amortised cost | 1,307,510 | 528,314 | 16,704 | 394,047 | 401,837 | 1,340,902 | |
| Loans and receivables | 1,258,260 | 523,046 | 365,657 | 401,837 | 1,290,539 | ||
| Receivables from banking business – clients | 495,569 | 125,990 | – | – | 401,837 | 527,828 | – |
| Receivables from banking business – banks | 559,316 | 193,681 | – | 365,657 | – | 559,337 | – |
| Financial investments (fi xed and time deposits) | 63,138 | 63,138 | – | – | – | 63,138 | – |
| Other receivables and assets | 91,118 | 91,118 | – | – | – | 91,118 | 26,547 |
| Cash and cash equivalents | 49,119 | 49,119 | – | – | – | 49,119 | – |
| Held-to-maturity investments | 43,983 | 16,704 | 28,390 | 45,095 | |||
| Financial assets (bonds) | 43,983 | – | 16,704 | 28,390 | – | 45,095 | – |
| Available-for-sale fi nancial assets | 5,268 | 5,268 | 5,268 | ||||
| Financial assets (investments) | 5,268 | 5,268 | – | – | – | 5,268 | – |
| Financial liabilities measured at amortised cost | 1,113,068 | 1,080,174 | 32,893 | 1,113,067 | |||
| Liabilities due to banking business – clients | 1,007,728 | 991,307 | – | 16,466 | – | 1,007,773 | – |
| Liabilities due to banking business – banks | 17,380 | 907 | – | 16,427 | – | 17,335 | – |
| Other liabilities | 87,960 | 87,960 | – | – | – | 87,960 | 29,821 |
| Sureties and warranties | 3,156 | 3,156 | 3,156 | ||||
| Irrevocable credit commitments | 32,874 | 32,874 | 32,874 |
Cash and cash equivalents, receivables and liabilities due to banking business without agreed terms to maturity, trade receivables, receivables from companies in which the Group holds an interest and other assets all predominantly have short terms to maturity. Their carrying amounts on the balance sheet date are therefore almost identical to the fair values. The same applies to the trade accounts payable. In so far as fair values for stakes are not reliably determinable, they are measured at cost minus any impairments. At the balance sheet date there is no indication of fair values being lower than carrying amounts. There are also no plans to dispose of these investments. Nevertheless, in the fi rst nine months a profi t of € 916 thsd was realised from the disposal of stakes.
Insofar as there is an active market, which represents the principal market for fi nancial assets and fi nancial liabilities, the respective market prices on the closing date are used as the basis for determining the fair value. With investment shares, the fair value corresponds to the redemption prices published by the capital investment companies. If there is no active market on the closing date, the fair value is determined using recognised valuation models. The underlying accounting and valuation principles with respect to fi nancial instruments remain unchanged compared to the previous year and are contained in the Annual Report 2o14.
The table below shows the valuation techniques that were used to determine tier 3 fair values, as well as the signifi cant, non-observable input factors applied:
| Type | Valuation technique | Signifi cant, non-observable input factors |
Relationship between signifi cant, non-observable input factors and measurement at fair value |
|---|---|---|---|
| Receivables from banking business – clients with agreed maturity |
The valuation model takes into account the present value of the anticipated future cash infl ows/outfl ows throughout the remaining term, which are dis counted using a risk-free discount rate. The discount rate is based on the current yield curve. Credit and default risks, administration costs and expected return on equity are taken into account when determining future cash fl ows. |
Adjustment of cash fl ows by: • Credit and counterparty default risks • Administration costs • Anticipated return on equity |
The estimated fair value would increase (decrease) if: • the credit and default risk were to rise (fall) • the admin costs were to fall (rise) • the anticipated return on equity were to fall (rise) |
Within the scope of the ordinary business, legal transactions under standard market conditions were made between the Group and members of the Executive Board and the Supervisory board.
Tina Müller, Chief Marketing Offi cer and Member of the Management Board of Opel Group GmbH was voted to the Supervisory Board. She succeeds Johannes Maret, who stepped down from the Board after the Annual General Meeting at his own request.
Beyond this there were no signifi cant changes compared to December 31, 2o14.
There were no appreciable events after the balance sheet date affecting the Group's net assets, fi nancial position or results of operations.
Wiesloch, November 11, 2o15
MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Manfred Bauer Reinhard Loose
05 MLP share, SDAX and DAXsector Financial Services, January to September 2015
MLP key fi gures
06 Key fi gures of the MLP share
Dr. Uwe Schroeder-Wildberg (Chairman, appointed until December 31, 2o17)
Manfred Bauer (Product Management, appointed until April 3o, 2o2o)
Reinhard Loose (Controlling, Purchasing, IT, Group Accounting, Risk Management, Internal Audit, Legal, Human Resources, appointed until January 31, 2o19)
Dr. Peter Lütke-Bornefeld (Chairman, appointed until 2o18)
Dr. h. c. Manfred Lautenschläger (Vice Chairman, appointed until 2o18)
Dr. Claus-Michael Dill (appointed until 2o18)
Johannes Maret (appointed until June 2o15)
Tina Müller (since June 2o15, appointed until 2o18)
Alexander Beer (Employee representative, appointed until 2o18)
Burkhard Schlingermann (Employee representative, appointed until 2o18)
Telephone +49 (o) 6222 • 3o8 • 832o Telefax +49 (o) 6222 • 3o8 • 1131 [email protected]
Telephone +49 (o) 6222 • 3o8 • 831o Telefax +49 (o) 6222 • 3o8 • 1131 [email protected]
November 25, 2o15 Company presentation at German Equity Forum Frankfurt.
February 25, 2o16 Publication of the results for the fi nancial year 2o15 - Annual analyst conference and press conference in Frankfurt.
March 24, 2o16 Publication of the annual reprot for the fi nancial year 2o15.
May 12, 2o16 Publication of the fi nancial results for the fi rst quarter 2o16.
June 16, 2o16 Annual General Meeting (AGM) of MLP AG in Wielsoch MLP AG holds its AGM at the Palatin Congress Center in Wiesloch.
August 11, 2o16 Publication of the fi nancial results for the half year and the second quarter 2o16.
November 1o, 2o16 Publication of the fi nancial results for the fi rst nine months and the third quarter 2o16.
www.mlp-ag.com, Investor Relations, Calendar
This documentation includes certain prognoses and information on future developments founded on the conviction of MLP AG's Executive Board and on assumptions and information currently available to MLP AG. Words such as "expect", "estimate", "assume", "intend", "plan", "should", "could", "project" and similar terms used in reference to the company describe prognoses based on certain factors subject to uncertainty.
Many factors can contribute to the actual results of the MLP Group differing signifi cantly from the prognoses made in such statements.
MLP AG accepts no obligation to the public for updating or correcting prognoses. All prognoses and predictions are subject to various risks and uncertainties which can lead to the actual results numerically differing from expectations. The prognoses refl ect the points of view at the time when they were made.
MLP AG Alte Heerstraße 40 69168 Wiesloch Tel +49 (0) 6222 • 308 • 8320 Fax +49 (0) 6222 • 308 • 1131 www.mlp-ag.com
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