Interim / Quarterly Report • Sep 17, 2015
Interim / Quarterly Report
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| JDC Group AG at a glance | 3 |
|---|---|
| Management Board letter to shareholders | 5 |
| Group management interim report Business and general conditions |
9 9 |
| Market and competitors | 10 |
| Company's situation | 11 |
| Net assets | 11 |
| Financial position | 12 |
| Results of operations | 13 |
| Segment reporting | 14 |
| Events after the reporting date | 14 |
| Opportunities and risk report | 14 |
| Outlook | 16 |
| Consolidated financial statements | 18 |
| Consolidated income statement | 18 |
| Consolidated statement of comprehensive income | 19 |
| Segment reporting | 20 |
| Consolidated balance sheet | 22 |
| Consolidated cash flow statement | 24 |
| Consolidated statement of changes in equity | 25 |
| Notes | 26 |
| Contact | 39 |
At a glance
| P & L in kEUR* |
30/06/2015 kEUR |
** Pro forma 30/06/2014 kEUR |
Pro forma changes compared to previous year in% |
30/06/2014 kEUR |
Changes compared to previous year in% |
|---|---|---|---|---|---|
| Revenues | 36,949 | 34,472 | 7.2 | 38,446 | –3.9 |
| Gross margin | 11,810 | 8,949 | 32.0 | 10,408 | 13.5 |
| Gross margin in % | 32.0 | 26.0 | 23.1 | 27.1 | 18.1 |
| Total operational costs | 11,548 | 10,637 | 8.6 | 11,688 | –1.2 |
| EBITDA | 1,022 | –865 | >100 | –429 | >100 |
| EBITDA margin in % | 2.8 | –2.5 | >100 | –1.1 | >100 |
| EBIT | 262 | –1,688 | >100 | –1,280 | >100 |
| EBIT margin in % | 0.7 | –4.9 | >100 | –3.3 | >100 |
| Net profit from continuing operations | |||||
| (after shares without dominating influence) | –351 | –2,111 | 83.4 | –1,822 | 80.7 |
| Number of shares in thousands (end of period) | 10,850 | 10,850 | 0.0 | 10,850 | 0.0 |
| Earnings per share in EUR | –0.03 | –0.19 | 84.2 | –0.17 | 82.4 |
| Cashflow/Balance sheet in kEUR |
30/06/2015 kEUR |
31/12/2014 kEUR |
Changes compared to previous year in % |
|
|---|---|---|---|---|
| Cash flow from operating activities | –380 | –4,550 | 91.7 | |
| Total equity and liabilities | 65,102 | 60,336 | 7.9 | |
| Equity | 26,055 | 26,406 | –1.3 | |
| Equity ratio in % | 40.0 | 43.8 | –8.6 |
* Only continuing operations
** To facilitate comparability with the previous year, all figures have been adjusted pro forma as if compexx Finanz AG had not been included in the basis of consolidation.
Dr. Sebastian Grabmaier CEO
Ralph Konrad
CFO
we are pleased to inform you that JDC Group AG (formerly: Aragon AG) has consistently pressed ahead with its realignment in recent months. Not only that, the company's focus on the operating performance of its subsidiaries Jung, DMS & Cie. and FiNUM is already showing initial success. Even though the market climate remained challenging, JDC Group AG achieved a substantial year-on-year improvement in its earnings in the first half of the year and thus laid a strong foundation for success in the 2015 financial year and the years ahead.
Over the past months, Aragon AG has significantly streamlined its group structure by focusing on its broker pool subsidiary Jung, DMS & Cie. and the revenues subsidiaries of the FiNUM Group. Having also established its new "Advisortech" business field, the company has now achieved its planned target structure. To document this realignment externally as well, the Annual General Meeting held at the end of July provided 100 percent approval for the company to be renamed as "JDC Group AG".
With immediate effect, the JDC Group is presenting itself with a completely revitalized, up-to-date and user-friendly website at www.jdcgroup.de. Given the increasing interest shown by foreign institutional investors, the company is also making all of its reporting and its website available in both German and English. This realignment is also reflected in the JDC Group's new motto "Best Advice. Better Technology". Within its two business segments, JDC Group AG will be focusing in future on its two businesses of "Advisory" and "Advisortech".
As we have already outlined several times before, the financial services market is currently undergoing the greatest transformation in its history. Alongside changing patterns of consumer behavior, cost pressure, and regulation, a further key driver of change has now come to the forefront. The megatrend of "digitization" has seized the financial services market. As one of the last industries, the financial services industry is now discovering the enormous potential harbored by internet business models. The main actors here are not established banks, insurance companies, and large sales operations, but rather numerous newly founded companies. The total number of these financial start-ups – "fintechs" for short – is growing on a daily basis.
Currently, there are more than 12,000 newly founded companies worldwide that aim to compete with established market players by offering financial technology. Some of these companies are already worth more than five billion dollars – and are thus increasingly approaching the valuation of established banks,
such as Commerzbank. Financers clearly believe in the future of these young, agile companies. According to the management consultancy Accenture, the volume of investment in internet-based financial players has trebled to US\$ 12.2 billion in 2015. The valuation of many of these companies has since surged to astronomical levels. At US\$ 78 billion, the five largest fintech players worldwide are now worth more than Germany's five largest publicly listed banks (US\$ 67 billion). Given these valuations, the first experts are already warning against a bubble in global fintech prices. In Germany, by contrast, this development is still in its infancy and the country's domestic fintechs are generally still viewed as being far from overvalued.
For the JDC Group, this new fintech megatrend offers extremely great market opportunities. Today, JDC companies already offer market-leading IT and process solutions to financial intermediaries. While customer acquisition costs are so high as to pose a threat to the very existence of most fintech companies, JDC has more than 900,000 customers and 16,000 brokers and is thus in a superior position when it comes to launching new technological developments onto the market. In its new "Advisortech" business segment, the JDC Group therefore now aims to develop state-of-the-art applications / tools aimed at simplifying the advisory and administrative input required from both advisors and customers. By exploiting existing structures and incorporating the new technologies, the company aims to implement these measures while avoiding any disruption to existing sales connections.
Use of these applications, which will, for example, make it possible for customers to gain an overview of all their existing insurance contracts, should further enhance customer retention levels for the 16,000 financial brokers and open up further business potential. Not only that, the range of innovative services offered to end customers should enable brokers to tap interesting new business potential. As well as developing its own proprietary products, the JDC Group also intends to acquire already established fintech companies in future, and that at low investment cost.
The company can report successful developments in its operating business as well for the first half of the year:
Our broker pool Jung, DMS & Cie. Pool GmbH ("JDC Pool") successfully placed a corporate bond with a volume of EUR 15.0 million in a purely private placement executed with institutional investors. This corporate bond has a five-year term and an annual coupon of 6.0 percent.
We aim to channel the funds received from the bond issue primarily into acquiring brokers' portfolios. After all, due to regulatory changes, their high average age and the difficult recent market climate, ever more brokers are leaving the market. Not only that, older market players are increasingly interested in selling their portfolios as part of their retirement provision. To meet this need, Jung, DMS & Cie. has introduced DMR – Deutsche Makler Rente – an innovative pension product that offers brokers wishing to retire from active business life an ideal opportunity to capitalize their "lifetime achievement". Even though the retiring brokers receive good sale prices for their life's work, the acquisition of their portfolios also promises to generate high long-term returns for JDC Pool GmbH: Based on a targeted return on investment of more than 20% before taxes, investing the full value of the bond at Jung, DMS & Cie. could generate additional annual earnings contributions of EUR 2.2 million.
We can afford to be satisfied with our half-year figures, and that for the first time in several years. Despite the ongoing difficult framework, JDC Group AG can point to successful developments in both revenues and earnings in the first half of 2015.
JDC Group AG can report a positive performance in its turnover-related key figures. Product sales grew by 3.4 percent from 589 million EUR in the previous year's period to 609 million EUR in the first half of 2015. Compared with the overall market, this is an excellent performance.
Assets under administration at JDC Group AG also developed well. At 4.4 billion EUR, this key figure was around 7 percent above of the previous year's figure of 4.1 billion EUR as of June 30, 2014.
Adjusted for revenues from compexx Finanz AG, which was still included in five months of the previous year's period, half-year revenues grew by 7.2 percent to 37.0 million EUR (1st Half-year 2014 excluding compexx: 34.5 million EUR).
Earnings before interest, taxes, depreciation and amortization (EBITDA) at continuing operations totaled 1,022 kEUR in the first half of the year, thus exceeding the previous year's figure – and excluding compexx – by 1,887 kEUR (1st Half-year 2014: –429 kEUR; excluding compexx Finanz AG: –865 kEUR).
At 262 kEUR, earnings before interest and taxes (EBIT) at continuing operations showed a substantial improvement of 1,542 kEUR in the first half of the year, and excluding compexx even improved by 1,950 kEUR (1st Half-year 2015: –1,280 kEUR; adjusted for compexx Finanz AG: –1,688 kEUR).
JDC Group AG posted the following performance in its relevant key balance sheet figures: As of June 30, 2015, shareholders' equity amounted to 26.1 million EUR. The equity ratio thus came to 40.0 percent (December 31, 2014: 26.4 million EUR and 43.8 percent). Due to the aforementioned bond issue at Jung, DMS & Cie. Pool GmbH, cash and cash equivalents rose to 12.9 million EUR (December 31, 2014: 4.2 million EUR).
The individual business segments performed as follows:
The Broker Pools business segment generated revenues of 29.4 million EUR in the first half of 2015, thus exceeding the figure for the previous year's period by 10.1 percent (1st Half-year 2014: 26.7 million EUR). At 1.0 million EUR, earnings before interest, taxes, depreciation and amortization (EBITDA) in the first six months of 2015 significantly surpassed the previous year's figure (1st Half-year 2014: 0.3 million EUR). At 0.7 million EUR, earnings before interest and taxes (EBIT) for the first six months of 2015 were also significantly ahead of the previous year's figure (1st Half-year 2014: –0.1 million EUR).
Revenues in the Financial Consulting business segment also grew in the first six months of 2015. Adjusted to exclude revenues from compexx Finanz AG, which were still included in the previous year's figures for five months, revenues rose by around 20 percent to 10.7 million EUR (1st Half-year 2014 (adjusted): 8.9 million EUR).
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the Financial Consulting business segment improved significantly to 0.6 million EUR in the first six months of 2015 (1st Half-year 2014 (adjusted): –0.2 million EUR). Earnings before interest and taxes (EBIT) grew to 0.3 million EUR in the first six months of 2015 (1st Half-year 2014 (adjusted): –0.4 million EUR).
Our assessment for the further course of 2015 is as follows: Given ongoing low interest rates, capital market volatility, and the erosion of consumer confidence in life insurance products, 2015 will remain challenging. We nevertheless expect to see a clearly noticeable year-end business once again and a continuation in our growth course. This will be driven in particular by our stable insurance business, as well as by growing turnover with material assets in the form of direct investments and individual properties.
Due to the measures we are taking to optimize our business, our gross margin will improve further compared with 2014. For 2015 as a whole, we therefore expect to post a seven-digit profit. From 2016, profits at the JDC Group should then rise significantly. For 2016 itself, we expect to generate revenues of between 90 million EUR and 100 million EUR and EBITDA of at least 5 million EUR.
Last, but by no means least, we would like to extend our particular thanks once again to the employees and sales partners of JDC Group AG and our subsidiaries. It is their commitment and motivation that form the basis for our success.
Equally, we also owe our thanks to our shareholders, who have placed their trust in our business model and supported and confirmed the Management and Supervisory Boards in their work.
We would be delighted if you would continue to accompany us on our course.
Yours faithfully,
Dr. Sebastian Grabmaier Ralph Konrad
The German economy has continued to grow in 2015. Based on calculations compiled by the Federal Statistical Office, price-adjusted gross domestic product (GDP) for the first half of the year grew year-onyear by 1.6 percent in the second quarter and 1.2 percent in the first quarter. This growth was chiefly driven by strong exports. Private household consumer spending showed a further slight increase. However, there are initial indications that this development is set to slow overall. Concerns as to a weaker global economy triggered by a slowdown in the Chinese economy have placed a damper on developments on the capital markets.
JDC Group AG is an independent financial services provider with operating subsidiaries that successfully operate with their own profiles, strategies, and brands in Germany, Austria, and Eastern Europe. These companies have more than 16,000 independent financial brokers who advise and broker financial products to around 900,000 end customers. The activities of JDC Group AG are subdivided in line with the respective target groups and services into the two operating business segments of "Broker Pools" and "Financial Consulting". Furthermore, the shareholding in FINE IT Solutions GmbH, Troisdorf, and JDC Group AG, Wiesbaden, are pooled at the "Holding" business segment.
The German fund industry witnessed a net inflow of new funds totaling 109 billion Euro in the first half of 2015. With an inflow of 69.9 billion Euro, specialist funds posted a record performance. Retail funds received a total of 43.3 billion Euro. Institutional funds withdrew 4.6 billion Euro from independent clients.
At the middle of the year, the members of the German Investment Funds Association (BVI) managed retail funds with a total volume of 877 billion Euro. New business between the beginning of January and the end of June revived significantly compared with previous years, with net inflows of 43.3 billion Euro. In the first half of 2014, by comparison, inflows came to just 17.8 million Euro. The new business statistics were dominated in particular by balanced funds, which attracted inflows of 23.8 billion Euro.
In 2014, premiums received in the insurance industry showed a slight year-on-year increase. This in turn was due to the performance of life insurance and property insurance policies. Assuming the same conditions, 2015 is expected to witness a continuation in this development.
1) Unless indicated otherwise, all data referred to in the following description of the investment product market was taken from the BVI press release "Investment Statistics for the 1st Half of 2015" dated August 6 2015.
2) All data referred to in the following description of the insurance market has been taken from the industry data published at gdv.de.
Premiums received for private health insurance policies are currently declining.
The market development, which is slightly positive overall, continues to be driven by the strong performance of property insurance premium volumes.
Overall, the industry aims to achieve a stable year-on-year premium performance.
The financial services market will continue to be shaped in 2015 by ongoing uncertainty, volatility, and low interest rates. The interest loss incurred above all on insurance policies in the current low interest climate will further reduce the net return on insurance products.
JDC Group AG competes with different companies in its individual business segments.
In its Broker Pools segment, the JDC Group acts via its subsidiary Jung, DMS & Cie. Aktiengesellschaft (JDC) and that company's independent financial brokers to broker financial products such as investment funds, closed funds, structured products, insurances, and financing products to end customers (B2B).
As a broker pool, JDC is in competition with all companies brokering the aforementioned financial products via independent brokers to downstream brokers or end customers. These include broker networks/pools, such as Fonds Finanz Maklerservice GmbH and BCA AG, as well as commercial banks, savings banks, cooperative banks, and financial sales companies focusing on end customers.
Based on the assessment of JDC Group AG, barriers to entry in the broker pool business are now high. Due to past developments, there are large numbers of brokerages, especially broker networks / pools, that are characterized by a widely varying sizes and degrees of professionalism. Having said this, the broker pools market has nevertheless seen substantial consolidation in recent years. During this period, JDC has grown and acquired smaller competitors leaving the market and / or continually integrated their customers.
In its Financial Consulting segment, the JDC Group offers advice on and brokers financial products to end customers (B2C) via its subsidiaries FiNUM.Private Finance Deutschland, FiNUM. Finanzhaus and FiNUM.Private Finance Österreich. In general, all companies are in competition with numerous market players, i.e. alongside financial sales operations and standalone brokers the companies also compete with exclusivity-bound organizations at insurers and banks, as well as with direct sales, such as internet-based operations. Based on the assessment of JDC Group AG, the companies' main competitors can be identified by reference to the different business models and target groups as follows:
FiNUM.Private Finance Deutschland, FiNUM. Finanzhaus and FiNUM.Private Finance Österreich focus on advising sophisticated private customers (so-called "mass affluent market") in Germany and Austria. The business mix consists almost equally of wealth accumulation and wealth protection (insurance). The main competitors are thus commercial and private banks, as well as large financial sales companies (e. g. MLP AG and Horbach Wirtschaftsberatung AG).
| H1/2015 | H1/2014 | Changes in % |
|
|---|---|---|---|
| kEUR | kEUR | ||
| Intangible assets | 31,323 | 31,661 | –1.1 |
| Fixed assets | 413 | 455 | –9.2 |
| Financial assets | 1,926 | 45 | >100 |
| Deferred taxes | 4,739 | 4,863 | –2.5 |
| Long-term non-current assets | |||
| Accounts receivable | 777 | 742 | 4.7 |
| Current assets | |||
| Accounts receivable | 8,762 | 11,901 | –26.4 |
| Other assets | 3,643 | 6,090 | –40.2 |
| Cash and cash equivalents | 12,885 | 4,176 | >100 |
| Deferred charges | 634 | 403 | 57.3 |
| Total assets | 65,102 | 60,336 | 7.9 |
Of the Group's non-current assets, amounting to 39.2 million Euro as of June 30, 2015 (previous year: 37.8 million Euro), around 31.3 million Euro involve intangible assets (previous year: 31.7 million Euro).
Current assets rose to 25.9 million Euro (previous year: 22.6 million Euro). This was chiefly due to the 8.7 million Euro increase in cash and cash equivalents as a result of the bond issue at Jung, DMS & Cie. Pool GmbH.
Total assets grew from 60.3 million Euro in 2014 to 65.1 million Euro. This was chiefly attributable to the increase in cash and cash equivalents, as well as to a 5.4 million Euro reduction in receivables.
| 30.06.2015 | 31.12.2014 | Changes | |
|---|---|---|---|
| kEUR | kEUR | in % | |
| Equity | 26,055 | 26,406 | –1.3 |
| Non-current liabilities | |||
| Deferred taxes | 1,587 | 1,454 | 9.1 |
| Bonds | 14,576 | 0 | >100 |
| Liabilities due to banks | 0 | 7 | >100 |
| Accounts payable | 7,130 | 7,078 | 0.7 |
| Other liabilities | 1,657 | 3,054 | –45.7 |
| Provisions | 2,379 | 1,476 | 61.2 |
| Current liabilities | |||
| Accrued taxes | 318 | 618 | –48.5 |
| Liabilities due to banks | 1 | 227 | –99.6 |
| Accounts payable | 6,346 | 11,291 | –43.8 |
| Other liabilites | 4,811 | 8,706 | –44.7 |
| Deferred income | 242 | 19 | >100 |
| Total equity and liabilities | 65,102 | 60,336 | 7.9 |
Overall, non-current liabilities rose from 13.1 million Euro in the previous year to 27.3 million Euro as of June 30, 2015. This increase was primarily due to the recognition of the bond at an amount of 14.6 million Euro.
Current debt fell from 20.9 million Euro to 11.7 million Euro. Current liabilities showed a marked reduction of 8.8 million Euro.
The consolidated JDC Group had an equity ratio corresponding to 40.0 percent of total assets as of June 30, 2015 (previous year: 43.8 percent). The consolidated group thus continues to benefit from very strong equity resources.
The cash flow statement shows how the cash flow developed as a result of inflows and outflows of funds during the period under report.
The cash flow from operating activities improved by 6,672 kEUR from –7,052 kEUR to –380 kEUR as of June 30, 2015. This was principally due to the significant improvement in half-year earnings and the less marked reduction in liabilities compared with the previous year.
The cash flow from investing activities was negative at –2,260 kEUR. This figure includes an amount of 1,879 kEUR for outgoing payments for investments in financial assets.
Financing activities produced a positive cash flow of 11,576 kEUR mainly resulting from the issue of a 15 million Euro bond.
Cash and cash equivalents amounted to 12,885 kEUR at the end of the first half of the financial year.
The company's financial resources were at all times adequate during the period under report. The company safeguards its short-term liquidity by working with monthly liquidity planning.
| P & L in kEUR | Changes compared to |
||
|---|---|---|---|
| 1. Half of 2015 kEUR |
1. Half of 2014 kEUR |
previous year in % |
|
| Revenues | 36,949 | 38,446 | –3.9 |
| Gross margin | 11,810 | 10,408 | 13.5 |
| Gross margin in % | 32.0 | 27.1 | 18.1 |
| Total operational costs | 11,547 | 11,688 | –1.2 |
| EBITDA | 1,022 | –429 | >100 |
| EBITDA margin in % | 2.7 | –1.1 | >100 |
| EBIT | 262 | –1,280 | >100 |
| EBIT margin in % | 0.7 | –3.3 | >100 |
| Net profit from continuing operations | –351 | –1,822 | 80.7 |
The Group's earnings performance improved significantly in the first half of 2015. Adjusted to exclude sales at compexx Finanz-Gruppe, whose figures were still included in the first five months of 2014, sales nevertheless grew to 37.0 million Euro, up 2.5 million Euro, or 7.2 percent, on the figure of 34.5 million Euro for the previous year's period. Unadjusted half-year sales basically reduced by 1.5 million Euro, or 3.9 percent, to 37.0 million Euro (1st Half-year 2014: 38.4 million Euro).
Commission expenses fell by 7.1 percent from 29.7 million Euro in the previous year to 27.6 million Euro.
Of other expenses, 6.0 million Euro relate to personnel expenses (1st Half-year 2014: 6.5 million Euro) and 5.6 million Euro to other operating expenses, including depreciation and amortization (1st Half-year 2014: 5.1 million Euro). As an annual average, the Group had a total of 187 employees (1st Half-year 2014: 182).
The largest items within other operating expenses were depreciation and amortization at 0.8 million Euro (previous year: 0.8 million Euro), advertising expenses at 0.4 million Euro (previous year: 0.6 million Euro), IT expenses at 0.8 million Euro (previous year: 0.9 million Euro), legal and advisory expenses at 1.4 million Euro (previous year: 0.7 million Euro), and sundry expenses at 0.6 million Euro (previous year: 0.5 million Euro).
Overall, the result of ordinary operations improved from –1.6 million Euro to 22 kEUR. Earnings from continuing operations after taxes improved to –0.4 million Euro, up from –1.8 million Euro in the previous year. As a result, consolidated net income came to –0.4 million Euro, a considerable improvement compared with the figure of –4.5 million Euro reported for the 1st half of 2014.
The Broker Pools segment generated revenues of 29.4 million Euro in the first half of 2015 and thus exceeded the figure for the previous year's period by 10.1 percent (1st Half-year 2014: 26.7 million Euro). At 1.0 million Euro, earnings before interest, taxes, depreciation and amortization (EBITDA) for the first six months of 2015 were significantly up on the previous year's figure (1st Half-year 2014: 0.3 million Euro). At 0.7 million Euro, earnings before interest and taxes (EBIT) for the first six months of 2015 were also substantially higher than in the previous year (1st Half-year 2014: –0.1 million Euro).
Sales in the Financial Consulting segment also increased in the first six months of 2015. Excluding compexx Finanz AG, which was still included for five months in the previous year, revenues grew by around 20 percent to 10.7 million Euro (1st Half-year 2014 (adjusted): 8.9 million Euro).
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the Financial Consulting segment improved sharply to 0.6 million Euro in the first six months of the year (1st Half-year 2014 (adjusted): –0.2 million Euro). Earnings before interest and taxes (EBIT) rose to 0.3 million Euro in the first six months of 2015 (1st Half-year 2014 (adjusted) –0.4 million Euro).
Earnings also improved in the Holding segment. Segment income reduced to 0.2 million Euro, compared with 0.3 million Euro in the previous year. EBIT improved to –0.8 million Euro, as against –1.2 million Euro in the first half of 2014.
No events of material significance have occurred since the balance sheet date.
The Group's future business performance involves all opportunities and risks associated with the sale of financial products and the purchase, management and sale of companies. The risk management system at JDC Group AG is structured to facilitate the early detection of risks the derivation of suitable measures to minimize such risks. Financial instruments are used exclusively for hedging purposes. To facilitate the early detection of potential problems at associate companies and their investments, the most important key figures are collected and evaluated on a monthly basis.
JDC Group AG manages the Group by means of a monthly reporting system which includes the most important key figures and takes particular account of the liquidity situation. Furthermore, the Management Board is kept informed of the current liquidity status on a daily basis.
Relevant company-related risks are as follows:
Relevant market-related risks are as follows:
Relevant regulatory risks are as follows:
The Management Board currently cannot detect any further risks to the Group's continued existence or development.
The Management Board sees the ongoing process of market consolidation as the main source of the Group's opportunities.
Due not least to the impact of the new LVRG legislation, many financial sales operations are currently in a weak financial position. In parallel with poor sales results in recent years, regulatory requirements have also become considerably stricter. As a result, many competitors have now exhausted their financial resources and the pressure to consolidate has intensified – a process from which large market players, including JDC Group companies, stand to benefit. Jung, DMS & Cie., for example, has already acquired several major customers with seven-digit commission sales in each case. Given regulatory trends and market developments, these companies have discontinued their own business handling activities and outsourced these to JDC.
The Management Board believes that all these factors will lead to positive developments at JDC Group AG shareholdings and thus also at JDC Group AG itself once again in the 2015 financial year.
To date, the prospects for a slight acceleration in global growth in 2015 were still assessed favorably. At present, however, it is becoming apparent that the Chinese economy is weakening. This is significantly influencing developments on the capital market. In Germany, strong exports mean that the economy continues to grow. Private consumer spending remains high, while unemployment is low.
In January 2015, the ECB approved the introduction of an extensive acquisition program for bonds in the central governments of EU member states, issuers with public subsidy mandates, and European institutions. This program is furnished with a monthly volume of 60 billion Euro. In view of this, we do not expect to see any further significant changes in monetary policy in the remainder of the year. The ECB is expected to implement the acquisition program as announced. Base rates are expected to remain at the level now reached for the entire year. By contrast, the US Fed is expected to further scale back the expansiveness of its monetary policy. In view of faltering economic developments, the first base rate increase in China is not expected in the near future. Given the ECB's even more expansive monetary policy, market interest rates in the euro area are expected to remain very low, although various factors indicate a rise in returns as the year progresses. These factors also include a slight improvement in the euro area economy. The oil price is also not expected to decline any further, a factor that should help stabilize inflation expectations.
For the JDC Group, the key focus in 2015 involves significantly and sustainably enhancing the company's operating business. Given the persistently difficult framework and its implications for the company's income, further cost optimizations are also on the agenda in 2015.
The following assessment of the expected business performance of the JDC Group consolidated group for 2015 is based on the macroeconomic assumptions presented in the group management report. Any further weakening in global macroeconomic developments accompanied by turbulence on the financial markets may significantly affect the financial, net asset, and earnings position of the JDC Group consolidated group.
Jung, DMS & Cie. AG remains one of the leading broker pools, with commission income of around Euro 60 million, while the FiNUM. group is the advisory unit focusing on sophisticated customers and in turn generates commission income of around Euro 20 million. The cost-cutting programs needed to adjust overheads to the company's smaller size have been completed and are showing the intended effect.
Currently, the shareholdings of the JDC Group can report performances that are mostly positive and in no case less than robust.
For 2015, the Management Board expects the overall Group to post a positive business performance.
Wiesbaden, September 17, 2015
Dr. Sebastian Grabmaier Ralph Konrad
| Notes | 01/01– 30/06/2015 kEUR |
01/01– 30/06/2014 kEUR |
||
|---|---|---|---|---|
| 1. | Commission income | [1] | 36,949 | 38,446 |
| 2. | Capitalised services | [2] | 336 | 212 |
| 3. | Other operating income | [3] | 2,115 | 1,412 |
| 4. | Commission expenses | [4] | –27,590 | –29,662 |
| 5. | Personnel expenses | [5] | –5,977 | –6,543 |
| 6. | Depreciation and amortisation of tangible and | |||
| intangible assets | –760 | –851 | ||
| 7. | Other operating expenses | [6] | –4,811 | –4,294 |
| 8. | Result from the valuation of companies at equity | 0 | 0 | |
| 9. | Income from closed-end fund investments | 0 | 0 | |
| 10. Other interest and similar income | 23 | 53 | ||
| 11. | Depreciation of financial assets | 0 | 0 | |
| 12. Interest and similar expenses | –263 | –332 | ||
| 13. Operating profit/loss | 22 | –1,559 | ||
| 14. Income tax expenses | –369 | –212 | ||
| 15. Other tax expenses | –4 | –4 | ||
| 16. Earnings from continuing operations after taxes | –351 | –1,775 | ||
| 17. Earnings from discontinued operations after taxes | 0 | –2,674 | ||
| 18. Minority interests | 0 | –47 | ||
| 19. Net profit | –351 | –4,496 | ||
| 20. Earnings per share | –0.03 | –0.41 | ||
| from continuing operations | –0.03 | –0.17 | ||
| from continuing and discontinued operations | –0.03 | –0.41 |
Consolidated financial statements
Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
| 01/01/– 30/06/2015 kEUR |
01/01/– 30/06/2014 kEUR |
|
|---|---|---|
| Profit or loss for the period | –351 | –4,496 |
| Other income | ||
| Net gain from hedging of net investments | 0 | 0 |
| Income tax effect | 0 | 0 |
| 0 | 0 | |
| Currency translation of foreign operations | 0 | 0 |
| Net gain/loss from hedging of cash flows | 0 | 0 |
| Income tax effect | 0 | 0 |
| 0 | 0 | |
| Net gain/loss from availble-for-sale financial assets | 0 | –35 |
| Income tax effect | 0 | –11 |
| 0 | –46 | |
| Reclassified income after taxes | 0 | –46 |
| Total income after taxes Attributable to: |
–351 | –4,542 |
| – Parent company's shareholders | –351 | –3,448 |
| – Shares without controlling interests | 0 | –1,094 |
| Broker Pools | Financial Consulting | |||
|---|---|---|---|---|
| 1. Half of 2015 | 1. Half of 2014 | 1. Half of 2015 | 1. Half of 2014 | |
| kEUR | kEUR | kEUR | kEUR | |
| Segment income | ||||
| Commission income | 29,391 | 26,687 | 10,670 | 12,927 |
| of which with other segments | 3,194 | 0 | 0 | 458 |
| Total segment income | 29,391 | 26,687 | 10,670 | 12,927 |
| Capitalised services | 198 | 81 | 0 | 0 |
| Other income | 980 | 1,192 | 1,280 | 592 |
| Segment expenses | ||||
| Commissions | –23,054 | –21,341 | –7,673 | –9,370 |
| Personnel expenses | –3,838 | –3,912 | –1,257 | –1,832 |
| Depreciation and amortisation | –284 | –385 | –218 | –239 |
| Other | –2,660 | –2,424 | –2,458 | –2,075 |
| Total segment expenses | –29,836 | –28,062 | –11,606 | –13,516 |
| EBIT | 733 | –102 | 344 | 3 |
| EBITDA | 1,017 | 283 | 562 | 242 |
| Income from investments | 0 | 0 | 0 | 0 |
| Other interest and similar income | 290 | 648 | 103 | 224 |
| Yield on other securities | 0 | 0 | 0 | 0 |
| Depreciation of financial assets | 0 | 0 | 0 | 0 |
| Other interest and similar expenses | –116 | –388 | –550 | –666 |
| Financial result | 174 | 260 | –447 | –442 |
| Segment earnings before tax (EBT) | 907 | 158 | –103 | –439 |
| Tax expenses | –291 | –18 | –82 | –199 |
| Segment net profit from continuing operations | 616 | 140 | –185 | –638 |
| Segment net profit from discontinued operations | 0 | 0 | 0 | 0 |
| Minorities | 0 | 0 | 0 | –47 |
| Segment net profit after minority interests | 616 | 140 | –185 | –685 |
financial statements Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated 21 Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
| Holding | Total reportable segments |
Transfer | Total | ||||
|---|---|---|---|---|---|---|---|
| 1. Half of 2015 kEUR |
1. Half of 2014 kEUR |
1. Half of 2015 kEUR |
1. Half of 2014 kEUR |
1. Half of 2015 kEUR |
1. Half of 2014 kEUR |
1. Half of 2015 kEUR |
1. Half of 2014 kEUR |
| 173 | 310 | 40,234 | 39,924 | –3,284 | –1,478 | 36,949 | 38,446 |
| 80 | 89 | 3,274 | 547 | –3,274 | –547 | 0 | 0 |
| 173 | 310 | 40,234 | 39,924 | –3,284 | –1,478 | 36,949 | 38,446 |
| 137 | 131 | 335 | 212 | 0 | 0 | 335 | 212 |
| 1,540 | 1,151 | 3,801 | 2,935 | –1,686 | –1,523 | 2,115 | 1,412 |
| 0 | –220 | –30,727 | –30,931 | 3,133 | 1,269 | –27,594 | –29,662 |
| –882 | –799 | –5,977 | –6,543 | 0 | 0 | –5,977 | –6,543 |
| –258 | –227 | –760 | –851 | 0 | 0 | –760 | –851 |
| –1,525 | –1,527 | –6,643 | –6,026 | 1,837 | 1,732 | –4,806 | –4,294 |
| –2,665 | –2,773 | –44,107 | –44,351 | 4,970 | 3,001 | –39,137 | –41,350 |
| –815 | –1,181 | 262 | –1,280 | 0 | 0 | 262 | –1,280 |
| –557 | –954 | 1,022 | –429 | 0 | 0 | 1,022 | –429 |
| 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 546 | 576 | 939 | 1,448 | –916 | –1,395 | 23 | 53 |
| 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| –513 | –673 | –1,179 | –1,727 | 916 | 1,395 | –263 | –332 |
| 33 | –97 | –240 | –279 | 0 | 0 | –240 | –279 |
| –782 | –1,278 | 22 | –1,559 | 0 | 0 | 22 | –1,559 |
| 0 | 0 | –373 | –217 | 0 | 0 | –373 | –217 |
| –782 | –1,278 | –351 | –1,775 | 0 | 0 | –351 | –1,775 |
| 0 | –2,674 | 0 | –2,674 | 0 | 0 | 0 | –2,674 |
| 0 | 0 | 0 | –47 | 0 | 0 | 0 | –47 |
| –782 | –3,952 | –351 | –4,496 | 0 | 0 | –351 | –4,496 |
| Assets | |||
|---|---|---|---|
| 30/06/2015 | 31/12/2014 | ||
| Notes | kEUR | kEUR | |
| Non-current assets | |||
| Intangible assets | [7] | 31,323 | 31,661 |
| Fixed assets | 413 | 455 | |
| Financial assets | [8] | 1,926 | 45 |
| 33,662 | 32,161 | ||
| Deferred taxes | [9] | 4,739 | 4,863 |
| Long-term non-current assets | |||
| Accounts receivable | [10] | 777 | 742 |
| Total non-current assets | 39,178 | 37,766 | |
| Current assets | |||
| Accounts receivable | [11] | 8,762 | 11,901 |
| Other assets | [11] | 3,643 | 6,090 |
| Other securities | [11] | 0 | 0 |
| Cash and cash equivalents | [11] | 12,885 | 4,176 |
| Deferred charges | [11] | 634 | 403 |
| Total current assets | 25,924 | 22,570 | |
| Total assets | 65,102 | 60,336 |
Consolidated financial statements
Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
| 30/06/2015 | 31/12/2014 | ||
|---|---|---|---|
| Notes | kEUR | kEUR | |
| Equity | |||
| Subscribed capital | 10,850 | 10,850 | |
| Capital reserves | 40,686 | 40,686 | |
| Other retained earnings | 266 | 283 | |
| Other equity components | -25,747 | –25,413 | |
| Non-controlling interests | 0 | 0 | |
| Total equity | 26,055 | 26,406 | |
| Non-current liabilities | [12] | ||
| Deferred taxes | [9] | 1,587 | 1,454 |
| Bond | [12] | 14,576 | 0 |
| Liabilities due to banks | [12] | 0 | 7 |
| Accounts payable | [12] | 7,130 | 7,078 |
| Other liabilities | [12] | 1,657 | 3,054 |
| Accruals | [13] | 2,379 | 1,476 |
| Total non-current liabilities | 27,329 | 13,069 | |
| Current liabilities | [14] | ||
| Accrued taxes | 318 | 618 | |
| Liabilities due to banks | 1 | 227 | |
| Accounts payable | 6,346 | 11,291 | |
| Other liabilites | 4,811 | 8,706 | |
| Deferred income | 242 | 19 | |
| Total current liabilities | 11,718 | 20,861 | |
| Total equity and liabilities | 65,102 | 60,336 | |
| 01/01/– 30/06/2015 kEUR |
01/01/– 30/06/2014 kEUR |
Changes to previous year in kEUR |
||
|---|---|---|---|---|
| 1. | Result for the period | –351 | –4,496 | 4,145 |
| 2. | + Depreciation and amortisation of fixed assets | 760 | 851 | –91 |
| 3. | –/+ Other non-cash itemised income/expenses | 0 | ||
| 4. | –/+ Profit/loss from disposals of fixed assets | 0 | 0 | |
| 5. | –/+ Increase/decrease of inventories, accounts receivable as well as other assets | |||
| 5,444 | 7,003 | –1,559 | ||
| 6. | – /+ Decrease/increase of accounts payable as well as other liabilities | |||
| –6,233 | –10,411 | 4,178 | ||
| 7. | = Cash flow from operating activities | –380 | –7,052 | 6,672 |
| of which from discontinued operations | –279 | 279 | ||
| 8. | + Cash receipts from disposals of intangible assets | 0 | 383 | –383 |
| 9. | – C ash payments for investments in intangible assets | –327 | –271 | –56 |
| 10. + Cash receipts from disposals of fixed assets | 6 | 23 | –17 | |
| 11. | – Cash payments for investments in intangible assets | –60 | –70 | 10 |
| 12. + Cash receipts from disposals of financial assets | 0 | 0 | ||
| 13. – Cash payments for investments in financial assets | –1,879 | –61 | –1,818 | |
| 14. + Cash receipts from the disposal of consolidated companies | 0 | 5,347 | –5,347 | |
| 15. – Cash payments from the disposal of consolidated companies | 0 | 0 | 0 | |
| 16. – Cash receipts from the acquisition of consolidated companies | 0 | 0 | 0 | |
| 17. | – Cash payments from the acquisition of consolidated companies | 0 | 0 | 0 |
| 18. = Cash flow from investment activities | –2,260 | 5,351 | –7,611 | |
| of which from discontinued operations | 0 | 0 | 0 | |
| 19. +/- Cash receipts/-payments from capital increase | 0 | –765 | 765 | |
| 20. +/- Cash receipts/-payments from minority shareholders | –1,094 | 1,094 | ||
| 21. + Cash receipts from banks | 14,576 | 0 | 14,576 | |
| 22. – Cash payments from loan redemptions | –3,000 | –113 | –2,887 | |
| 23. = Cash flow from financing activities | 11,576 | –1,972 | 13,548 | |
| of which from discontinued operations | 0 | 0 | 0 | |
| 24. non-cash itemised changes in cash and cash equivalents (total of pos. 7, 18, 23) | 8,936 | –3,673 | 12,609 | |
| 25. + Cash and cash equivalents at the beginning of the period | 3,949 | 8,071 | –4,122 | |
| 26. = Cash and cash equivalents at the end of the period | 12,885 | 4,398 | 8,487 | |
| Breakdown of cash and cash equivalents | 30/06/2015 kEUR |
30/06/2014 kEUR |
Changes to previous kEUR |
|
| Cash and cash in banks | 12,885 | 4,768 | 8,116 | |
| Current securities | 0 | 0 | 0 | |
| Current liabilities due to banks | 0 | -371 | 371 |
12,885
4,397
8,487
Consolidated financial statements
Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
| Number of shares |
Subscribed capital kEUR |
Capital reserve kEUR |
Other retained earnings kEUR |
Cash Flow hedge marked to market kEUR |
Securities marked to market kEUR |
Other equity compo nents kEUR |
Shares without dominating influence |
Total equity kEUR |
|
|---|---|---|---|---|---|---|---|---|---|
| As of 01/01/2014 | 10,849,974 | 10,850 | 40,686 | 283 | 0 | 25 | –17,957 | 1,094 | 34,981 |
| Result as of 30/06/2014 | –4,449 | –4,449 | |||||||
| Changes in market valuation for investments | –25 | –25 | |||||||
| Changes in market valuation for | |||||||||
| cash flow hedge | 0 | ||||||||
| Changes in deferred taxes | 0 | ||||||||
| Other additions/disposals | –740 | –740 | |||||||
| Retained earnings | |||||||||
| – Allocation of earnings | 0 | ||||||||
| Shares without dominating influence | 0 | ||||||||
| – Additions | 0 | ||||||||
| – Disposals | –1,141 | –1,141 | |||||||
| – Changes due to the results as of | |||||||||
| 30/06/2014 | –47 | 47 | 0 | ||||||
| As of 30/06/2014 | 10,849,974 | 10,850 | 40,686 | 283 | 0 | 0 | –23,193 | 0 | 28,626 |
| As of 01/01/2015 | 10,849,974 | 10,850 | 40,686 | 283 | 0 | 0 | –25,413 | 0 | 26,406 |
| Results as of 30/06/2015 | –351 | –351 | |||||||
| Changes in market valuation for investments | 0 | ||||||||
| Changes in market valuation for | |||||||||
| cash flow hedge | 0 | ||||||||
| Changes in deferred taxes | 0 | ||||||||
| Other additions/disposals | 0 | ||||||||
| Retained earnings | |||||||||
| – Allocation of earnings | 0 | ||||||||
| Shares without dominating influence | |||||||||
| – Additions | 0 | ||||||||
| – Disposals | 0 | ||||||||
| – Changes due to the results as of | |||||||||
| 30/06/2015 | 0 | ||||||||
| As of 30/06/2015 | 10,849,974 | 10,850 | 40,686 | 283 | 0 | 0 | –25,764 | 0 | 26,055 |
| 1 General information | 27 | |
|---|---|---|
| 1.1 | Declaration of compliance by the | |
| Management Board | 27 | |
| 1.2 | Accounting principles and valuation | |
| methods applied | 27 | |
| 1.3 | Basis of consolidation | 28 |
financial statements 29
| 2.1 | Notes to the consolidated income statement 29 | |
|---|---|---|
| 2.1.1 | Commission income [1] | 29 |
| 2.1.2 | Other capitalised services [2] | 29 |
| 2.1.3 | Other operating income [3] | 30 |
| 2.1.4 | Commission expenses [4] | 30 |
| 2.1.5 | Personnel expenses [5] | 30 |
| 2.1.6 | Operating expenses [6] | 30 |
| 2.2 | Notes to the consolidated balance sheet | 31 |
| 2.2.1 | Intangible assets [7] | 31 |
| 2.2.2 | Impairment expenses | 31 |
| 2.2.3 | Financial assets and other | |
| non-current assets [8] | 32 | |
| 2.2.4 | Deferred tax assets and liabilities [9] | 32 |
| 2.2.5 | Non-curent assets [10] | 32 |
| 2.2.6 | Current assets [11] | 33 |
| 2.2.7 | Equity | 33 |
| 2.2.8 | Non-current liabilities [12] | 33 |
| 2.2.9 | Provisions [13] | 34 |
| 2.2.10 Current liabilities [14] | 34 | |
| 2.3 | Related parties | 34 |
| 3 Significant events after the reporting date | 35 | |
|---|---|---|
| 4 Statement of changes in equity | 35 | |
| 5 Cash Flow Statement | 35 | |
| 6 Segment reporting | 36 | |
| 7 Additional information | 37 | |
| 7.1 | Description of the business development | 37 |
| 7.2 Additional information |
37 |
The JDC Group AG ("JDC Group") is a diversified financial services company with the operative segments Broker Pools and Financial Consulting. The company was registered on 6th October 2005 under the name Aragon Aktiengesellschaft in the commercial register of the Wiesbaden district court (HRB 22030). The firm's name was changed from Aragon AG to JDC Group on 31th July 2015. The company's registered office is located in Wiesbaden. The address is:
Kormoranweg 1 65201 Wiesbaden Federal Republic of Germany
JDC Group shares are admitted for the open market (Entry Standard). The interim financial statements for the reporting period from 1 January 2015 to 30 June 2015 relates to the parent company and its subsidiaries on a consolidated basis.
JDC Group's interim financial statements for the first half year of 2015 and the corresponding previous year period from 1 January 2014 to 30 June 2014 have been prepared in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB), which is applicable in the European Union (EU). The term IFRS also includes the International Accounting Standards (IAS) which are still in place. All interpretations binding for financial year 2015 by the International Financial Reporting Interpretations Committee (IFRIC), formerly the Standing Interpretations Committee (SIC), as applicable in the EU have likewise been applied. In the following the term IFRS has been used throughout.
The interim report has not been subject to an auditor's review.
JDC Group AG is not a parent company within the meaning of Section 315a (1) and (2) of the German Commercial Code (HGB ) that is required to prepare interim financial statements in accordance of IFRS. JDC Group AG voluntarily prepares its interim financial statements under IFRS.
The consolidated financial statements consists of the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and the notes to the consolidated financial statements.
The separate financial statements of JDC Group AG and its subsidiaries have been included in the interim financial statements in observance of the recognition and valuation policies applicable throughout the Group.
The interim financial statements have been prepared in euros (EUR), which is the functional currency of the Group. Except as otherwise indicated, all figures have been rounded to the nearest thousand euros (kEUR). The interim consolidated income statement has been prepared in accordance with the total cost accounting method. The consolidated financial statements have been uniformly prepared for the periods presented here in accordance with the following principles of consolidation, accounting and valuation.
The interim financial statement, including figures from the comparison period in the previous year, was basically compiled according to the consolidation, accounting and valuation principles applied to the annual report 2014. A detailed description of these principles is published in the notes of the annual report 2014. The annual report 2014 is available on the company's website: www.jdcgroup.de.
In addition to JDC Group AG the interim consolidated financial statements generally include all subsidiaries under IAS 27, in which JDC Group AG holds a majority of voting rights or which it can control by other means. Control within the meaning of IAS 27 is present if there is the possibility of determining the financial and business policy of a company, in order to draw benefit from its activities.
With the exception of Jung, DMS & Cie. GmbH, Vienna/Austria, Jung, DMS und Cie. Maklerservice GmbH, Vienna/Austria, FiNUM.Private Finance AG, Vienna/Austria, and FiNUM.Private Holding GmbH, Vienna/Austria, all of the subsidiaries are registered in Germany. In addition to the parent company, the interim consolidated financial statements also include the direct subsidiaries and sub-groups Jung, DMS & Cie. Aktiengesellschaft, FiNUM.Private Finance Holding, C.E.H Verwaltungs GmbH, FiNUM.Finanzhaus AG, Wiesbaden, and FiNUM.Private Finance Holding GmbH, Vienna/Austria. The JDC Group daughter Jung, DMS & Cie. acquired 25.1 percent of the asset manager BB Wertpapier-Verwaltungs-Gesellschaft mbH on 24 February 2015, which is not part of basis of consolidation due to inessentiality.
Consolidated financial statements
Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
Income by segment is shown in the segment report.
Income relates essentially to initial and follow-up commission from brokerage services in the three segments of insurance products, investment funds and investments/closed-end funds as well as other services and breaks down as follows:
| 01/01/–30/06/2015 kEUR |
01/01/–30/06/2014 kEUR |
|
|---|---|---|
| Initial commission | ||
| Insurance products | 16,081 | 17,056 |
| Investment funds | 7,742 | 8,543 |
| Shares/Closed-end funds | 1,307 | 708 |
| Follow-up commission | 8,328 | 7,868 |
| Overrides | 771 | 582 |
| Other income | 2,720 | 3,689 |
| Total | 36,949 | 38,446 |
As of 30 June 2014 3.974 kEUR belonged to compexx Finanz AG, the company was deconsolidated by 31 May 2015. Adjusted by this amount the commission income increased by 7.2 percent compared to the first half year 2014.
The follow-up commissions raises up to 8,328 kEUR stable level of assets under administration.
Capitalised services amounted to 336 kEUR (30 June 2014: 212 kEUR) and were primarily achieved by developing in-house software solutions (Compass, World of Finance, ATWOF, ATWOF, iCRM) (cf. ref. 2.2.1.1 Software and licences).
The other operating income of 2,115 kEUR (30 June 2014: 1,412 kEUR) primarily relates from the debtor warrant due to the sale compexx Finanz AG 230 kEUR, 66 kEUR of accruals release, 894 kEUR income from assumptions of risk, 77 kEUR from benefits in kind and 360 kEUR from other income.
The item contains mainly the commissions for independent brokers. The expenses, which rise in relation to the increase in commission income, increased by 992 kEUR to 27,590 kEUR versus the previous year (30 June 2014 adjusted by compexx Finanz AG: 26,598 kEUR).
| 01/01/–30/06/2015 kEUR |
01/01/–30/06/2014 kEUR |
|
|---|---|---|
| Wages and salaries | 5,085 | 5,605 |
| Social security | 892 | 938 |
| Total | 5,977 | 6,543 |
Personnel expenses essentially comprise wages and salaries, remuneration and other payments to the Management Board and employees of the JDC Group.
Social security includes the employer's statutory contributions (social security contributions).
| 01/01/–30/06/2015 kEUR |
01/01/–30/06/2014 kEUR |
|
|---|---|---|
| Marketing costs | 424 | 557 |
| External services | 124 | 126 |
| IT costs | 776 | 852 |
| Occupancy costs | 643 | 761 |
| Vehicle costs | 172 | 203 |
| Fees, insurance premiums | 351 | 448 |
| Postage, telephone | 81 | 115 |
| Other | 2,240 | 1,232 |
| Total | 4,811 | 4,294 |
The other costs mainly include legal and consulting costs of 1,351 kEUR (30 June 2014: 701 kEUR).
financial statements Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated 31 Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
The item "Concessions and licences" essentially comprises software licences for standard commercial software and customer base with a carrying amount of 6,766 kEUR (31 December 2014: 7,104 kEUR). This software is amortised on a straight-line basis over a period of three to six years.
In the financial period internally generated software tools totalling 336 kEUR (30 June 2014: 212 kEUR) were capitalised. These are essentially company-specific software applications (Compass, World of Finance, AT WOF, iCRM) to support sales of financial products.
Goodwill results from the first-time consolidation at the time of the relevant business combination.
| 30/06/2015 kEUR |
31/12/2014 kEUR |
|
|---|---|---|
| Broker Pools | 19,095 | 19,095 |
| Financial Consulting | 5,460 | 5,460 |
| Holding | 2 | 2 |
| 24,557 | 24,557 |
Goodwill was subjected to an impairment test as of 31 December 2014. The calculation was based on estimated cash flows before income taxes. The cash flows were calculated on the basis of detailed budgeting for the Group companies for the financial years 2015 to 2017 (phase I). For subsequent periods, the cash flow was forecast as a perpetual annuity (phase II). The discount rate of 2.9% (previous year: 4.9%) was calculated using a risk-free base interest rate of 0.65% derived from the yield-curve (previous year: 2.37%), a market risk premium of 2.23% (previous year: 2.56%) and using a beta factor for comparable investments of 0.7 (previous year: 1.1). The discount rate used to determine the present value of the initial cash flows of the perpetual annuity included a growth discount of 1.0 % (previous year: 1.0%).
The assumptions made with regard to the sales growth in the operating units are an additional factor influencing free cash flow.
The breakdown of book values is as follows:
| 30/06/2015 kEUR |
31/12/2014 kEUR |
|
|---|---|---|
| Available-for-sale | ||
| Shares in affiliated companies | 25 | 25 |
| Investments | 111 | 20 |
| Securities | 1,790 | 0 |
| Total | 1,926 | 45 |
| 30/06/2015 kEUR |
31/12/2014 kEUR |
|
|---|---|---|
| Deferred tax assets | ||
| Tax reimbursements | ||
| from losses carried forward | 4,739 | 4,863 |
| 4,739 | 4,863 | |
| Deferred tax liabilities | –766 | –766 |
| Intangible assets (software) | –821 | –688 |
| From other valuation differences | –1,587 | –1,454 |
For the German companies, deferred taxes were calculated on the basis of a corporation tax rate of 15.0% plus solidarity surcharge of 5.5% and the local trade tax rate of the city of Wiesbaden of 440.0% (combined income tax rate: 31.23%).
For the Austrian companies, the corporation tax rate of 25.0% has been applied, which has been in force since 2005.
| 30/06/2015 kEUR |
31/12/2014 kEUR |
|
|---|---|---|
| Accounts receivable | 777 | 742 |
| Total | 777 | 742 |
The accounts receivable relate essentially to commission receivable from the cancellation reserves.
Consolidated financial statements
Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
| 30/06/2015 kEUR |
31/12/2014 kEUR |
|
|---|---|---|
| Accounts receivable | 8,762 | 11,901 |
| Other assets | ||
| Commission advances | 1,526 | 1,787 |
| Deferred charges | 634 | 403 |
| Other | 2,117 | 4,303 |
| Total | 13,039 | 18,394 |
Accounts receivable essentially relate to commission receivable from partner companies and broker pool partners from brokerage services and the cancellation reserve. The remaining other assets essentially relate to rent deposits, tax refund claims and short-term loans. Prepaid expenses relate to payments on account for advertising events in the subsequent year, insurance, contributions and motor vehicle tax.
Movements in the Group equity of JDC Group AG are shown in the statement of changes in equity (cf. also ref. 4).
| 30/06/2015 kEUR |
31/12/2014 kEUR |
|
|---|---|---|
| Bond | 14,576 | 0 |
| Liabilities to banks | 0 | 7 |
| Accounts payable | 7,130 | 7,078 |
| Other liabilities | ||
| Other | 1,657 | 3,054 |
| Total | 23,363 | 10,139 |
The increase of non-current liabilities is due to the issuing of the bond of 14,576 kEUR (nominal 15,000 kEUR). The other liabilities reduced around 1,397 kEUR to 1,657 kEUR due to the repayment of loans.
| 30/06/2015 kEUR |
31/12/2014 kEUR |
|
|---|---|---|
| Provisions for asset damage prevention | 1,448 | 1,252 |
| Provisions for legal costs | 931 | 224 |
| Total | 2,379 | 1,476 |
Deductions from commissions that are intended to hedge against potential defaults at brokers have been presented as financial loss provisions. Furthermore, a provision for potential litigation risks has also been presented here, as has other income of 894 kEUR resulting from the assumption of a risk (c.f. Section 2.1.3).
| 30/06/2015 kEUR |
31/12/2014 kEUR |
|
|---|---|---|
| Provisions for taxes | 318 | 618 |
| Liabilities to banks | 1 | 227 |
| Accounts payable | 6,346 | 11,291 |
| Other current liabilities | ||
| Puchase price liabilities | 0 | 2,086 |
| L oan obligation |
0 | 1,678 |
| Other | 4,811 | 4,942 |
| Deferred income | 242 | 19 |
| Total | 11,718 | 20,861 |
The reduction in current liabilities is primarily due to payments of purchase prices and the reduction in accounts payable.
Transactions with members of the Management Board and Supervisory Board:
| 30/06/2015 | 30/06/2014 | |
|---|---|---|
| kEUR | kEUR | |
| Supervisory Board | ||
| Remuneration | 22 | 115 |
| Management Board | ||
| Total remuneration1) | 368 | 368 |
* The total remuneration of the Boards of JDC Group AG is disclosed, even when the costs have been borne by subsidiaries.
Consolidated financial statements
Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
No significant events occurred after the reporting date.
The development in Group equity as of the reporting date is shown in the statement of changes in equity, which forms part of the interim consolidated financial statements.
The 351 kEUR decrease in Group equity during the financial year essentially results from the half-year earnings.
The Group's financial position is reflected in the cash flow statement, which forms part of the interim consolidated financial statements in accordance with IFRS. The cash flow from operating activities was negative with –380 kEUR.
In the cash flow statement, the changes in cash and cash equivalents in the JDC Group during the financial year under review is reflected by the payment inflows and outflows from operating activities, investment activities and financing activities. Non-cash operations are summarized in one amount and are shown in the cash flow from running operating activities.
Cash and cash equivalents are broken down in the consolidated cash flow statement. Cash and cash equivalents with a residual term of a maximum of three months are pooled in this item. Cash equivalents are current investments that can be converted into cash at any time and which are only subject to minor fluctuations in value.
JDC Group AG reports on three operating segments which are managed independently by committees responsible for the segment in accordance with the type of products and services offered. The designation of company segments as business segments is based in particular on the existence of segment managers responsible for the results who report directly to the chief operating decision maker of the JDC Group Group.
The JDC Group Group is divided into the following segments:
In the Broker Pools segment, the Group pools its activities involving independent financial advisers. The offering encompasses all asset classes (investment funds, closed-end funds, insurance products and certificates) provided by different product companies and including order processing and commission settlement as well as various other services relating to investment advice for retail customers.
The Group's activities that focus on advisory and sales services for retail customers are bundled in the Financial Consulting segment. As an independent financial and investment adviser, we offer our customers holistic consultancy services for insurance, investmentfunds and financing products that are tailored to the customer's particular situation.
In the segment Holding includes our interest in Fine IT Solutions GmbH and JDC Group AG.
The measurement principles for JDC Group's segment reporting are based on the IFRS standards used in the consolidated financial statements. JDC Group evaluates the performance of the segments using, among other things, the operating results (EBIT). The revenues and preliminary services between the segments are allocated on the basis of market prices.
JDC Group Group is mainly acting in Germany and Austria, therefore the customer Group forms a single geographic segment (German-speaking region of the European Union).
Consolidated financial statements
Consolidated income statement Consolidated statement of comprehensive income Segment reporting
Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in equity Notes
Despite a continued difficult market environment JDC Group AG significantly improved its earnings compared to the previous year and therefore it achieved a good basis for the future.
The first half-year revenue increased by 2.5 million Euro or 7.2 percent to 37.0 million Euro (1st halfyear 2014 adjusted by compexx Finanz AG: 34,5 million Euro). The earnings before interests, taxes and depreciation (EBITDA) from continuing operations amounts for the first half-year to 1,022 kEUR (1st halfyear 2014: –429 kEUR). The earnings before interests and taxes (EBIT) from continuing operations significantly improved to 262 kEUR (1st half-year 2014: –1,280 kEUR).
The second half-year is generally better in terms of revenues and earnings comparing to the first half-year.
In the annual average the Group companies employed 187 staff (31 December 2014: 182), excluding Management Board members.
Dr. Sebastian Grabmaier Grünwald Attorney CEO
Mainz Businessman (Dipl.-Kfm.) CFO
Jens Harig
Cologne Independent entrepreneur Chairman
Frankfurt am Main Member of Management Board of FinLab AG and Attorney
Hamburg Certified Public Auditor
The remuneration of the Management Board and Supervisory Board is disclosed under ref. 2.3. There is no obligation to disclose the remuneration of individual members of the Management Board in accordance with Section 314 (1) No. 6a Clause 5 ff. of the German Commercial Code (HGB), as JDC Group AG is not a listed joint stock company within the meaning of Section 3 (2) of the German Stock Corporation Act (AktG).
JDC Group AG Kormoranweg 1 65201 Wiesbaden
Telephone: +49 (0)611 890 575 0 Telefax: +49 (0)611 890 575 99
[email protected] www.jdcgroup.de
The Interim Report of JDC Group AG is available in German and English. The German version is legally binding. The reports can be downloaded from the company's website: www.jdcgroup.de
We will provide you with additional information about JDC Group AG and its subsidiaries upon request.
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