Quarterly Report • Nov 13, 2014
Quarterly Report
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Interim Group Report for the fi rst nine months and the third quarter 2o14
| All fi gures in € million | 3rd quarter 2014 |
3rd quarter 2013 |
9 months 2014 |
9 months 2013 |
Change in % |
|---|---|---|---|---|---|
| MLP Group | |||||
| Total revenue | 117.8 | 114.5 | 345.7 | 338.8 | 2.0% |
| Revenue | 115.1 | 109.2 | 331.9 | 325.5 | 2.1% |
| Other revenue | 2.6 | 5.3 | 13.8 | 13.6 | 1.5% |
| Earnings before interest and tax (EBIT) | 4.9 | 7.3 | 10.4 | 12.3 | –15.4% |
| EBIT margin (%) | 4.2% | 6.4% | 3.0% | 3.6% | – |
| Net profi t | 3.4 | 5.3 | 7.9 | 9.5 | –16.8% |
| Earnings per share (diluted/undiluted) in € | 0.03 | 0.05 | 0.07 | 0.09 | –22.2% |
| Cashfl ow from operating activities | 12.4 | –5.6 | 39.9 | 67.2 | –40.6% |
| Capital expenditure | 5.9 | 5.9 | 12.2 | 15.4 | –20.8% |
| Shareholders' equity | – | – | 361.6 | 1 374.5 |
–3.4% |
| Equity ratio (%) | – | – | 23.3% | 1 24.4% |
– |
| Balance sheet total | – | – | 1,550.2 | 1 1,536.9 |
0.9% |
| Clients | – | – | 841,600 | 1 830,300 |
1.4% |
| Consultants | – | – | 1,944 | 1 1,998 |
–2.7% |
| Branch offi ces | – | – | 163 | 169 1 |
–4.1% |
| Employees | – | – | 1,523 | 1,558 | –2.2% |
| Arranged new business | |||||
| Old-age provisions (premium sum) | 830.0 | 800.0 | 2,200.0 | 2,060.0 | 6.8% |
| Loans mortgages | 351.0 | 379.7 | 1,048.9 | 1,177.8 | –10.9% |
| Assets under management in € billion | – | – | 26.2 | 1 24.5 |
6.9% |
¹ As of December 31, 2013
• Total revenue in the fi rst nine months rises by 2% to € 345.7 million
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 2o13. In this regard it presents signifi cant events and business transactions of the fi rst nine months and the third quarter 2o14 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.
MLP is Germany's leading independent consulting company. Supported by comprehensive research, the Group provides a holistic consulting approach that covers all economic and fi nancial questions for private and corporate clients, as well as institutional investors. The key aspect of the consulting approach is the independence from insurance companies, banks and investment fi rms. The MLP Group manages total assets of around € 26.2 billion and supports more than 84o,ooo private and 5,ooo corporate clients or employers. The fi nancial services and wealth management consulting company was founded in 1971 and holds a banking licence.
The concept of the founders, which still forms the basis of the current business model, is to provide long-term consulting for academics and other discerning clients in the fi elds of provision, wealth management, health insurance, non-life insurance, loans and mortgages and banking. Private individuals with assets of over € 5 million and institutional clients benefi t from extensive wealth management and consulting services as well as receiving economic forecasts and ratings provided by the subsidiaries of the FERI Group. Supported by its subsidiary TPC, MLP also provides companies with independent consulting and conceptual services in all issues pertaining to occupational pension schemes and remuneration.
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 2o13, and apart from the changes in organisation and administration detailed on page 5 of the Group interim report for the fi rst quarter, no further changes occurred during the period under review. Detailed information concerning "Business model", "Goals and strategies" and "Control system" can be found on pages 18 to 31 of the MLP Group's Annual Report 2o13.
The macroeconomic and industry-specifi c framework conditions did not signifi cantly differ to the outline provided in the MLP Group's Annual Report 2o13 (pages 32 to 4o).
Following a strong start to the year, German economic growth weakened in the second quarter 2o14 and, according to the autumn report issued by the leading economic research institutes, came to a standstill in the third quarter. In particular, the consumption climate has recently worsened and companies remain hesitant with respect to future investments. At the end of September the unemployment rate stood at the level of July 2o14 and amounted to 6.5%. However, after adjustment for seasonal effects, the underlying unemployment rate increased.
As previously described in the report for the fi rst half-year, the German market for old-age provision products remains diffi cult, due primarily to the continuing low interest rate phase and discussions about life insurance companies and their products.
However, despite the current hesitancy, the market potential remains large. This aspect is demonstrated in a KUBUS market study conducted by MSR Consulting: almost half (46%) of the insurance clients polled stated that they still have the fi nancial means for additional old-age provision. 24% of these clients already possess the means to act, whereas 22 % would need to reduce their expenditure in other areas of their lives in order to accommodate an increase in their level of provision. Especially home owners (33%) possess reserves for potentially greater provision without the need to impose constraints. In particular, a rise was reported in the proportion of households that have identifi ed a defi cit in their level of provision – increasing from 26% in 2o1o to the current fi gure of 38%. According to the wealth barometer of the German Savings Bank Association, 6o% of people between the age of 3o and 6o fear that their level of old-age provision will be less than they had planned.
The continuingly very low level of willingness to make provision is also evident in the current market fi gures. According to the German Insurers Association (GDV), the total premium from new business fell by around 2% in the period from January to September 2o14 compared to the corresponding period in the previous year.
The private health insurance market in Germany remains characterised by signifi cant hesitancy on the part of clients. Figures released by the Association of Private Health Insurance Companies revealed that throughout the industry the overall number of people with full private health insurance fell by more than 66,ooo in 2o13 following a preceding decrease of around 2o,ooo in 2o12. The diffi cult market environment has not changed compared to the report for the fi rst half-year.
On the other hand, citizens are becoming increasingly conscious of the topic of long-term care. The risk of needing long-term care currently ranks as the primary concern of Germans, ahead of other anxieties such as illness, poverty in old-age and unemployment. This was one of the fi ndings of the representative "Continentale Study 2o14" survey amongst the general public. Accordingly, around 84% of Germans cite their greatest fear as being dependent on long-term care and 83% are most afraid of personally burdening their relatives. However, at the same time only 3% of those surveyed have taken out private supplementary care insurance.
At August 31, 2o14 managed assets in the overall market rose to € 2,295 billion (June 2o14: € 2,239 billion). This growth continued to be driven by institutional business. In retail funds, particularly fi xed income funds and mixed funds were in demand. Equity funds continued to record net outfl ows, although to a far lesser degree than in the fi rst half-year.
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 2o13 (pages 38 to 4o).
At the start of August the Life Insurance Reform Act (LVRG) came into force. This new rate is intended to align the framework conditions for life insurers with the low interest rate phase. In this respect it seeks to more fairly apportion the available funds between existing and departing clients. Whereas some of the changes will come into immediate effect, certain other aspects will not be implemented into law until January 1, 2o15. The legislation essentially comprises the following amendments:
The new LVRG legislation did not signifi cantly impact the third quarter. Further details concerning the anticipated future effects of these changes are provided in the section "Future industry situation and the competitive environment".
In general, MLP already implemented several of the requirements now stipulated in the new legislation at an early stage and views these actions as providing the company with a competitive advantage over other market participants. During the coming years the legislator will further tighten the requirements and thereby accelerate the consolidation within the market.
In the period from January to September 2o14 total revenue of the MLP Group rose compared to the same period in the previous year. In old-age provision we recorded slight revenue growth despite the continuingly diffi cult market environment. Wealth management and non-life insurance also showed positive development. Signifi cant growth was achieved in other commissions and fees where initial successes from the expanded real estate offering were evident. In health insurance, business performance remains dominated by the diffi cult market conditions. Consequently, revenue fell below the level achieved in the same period in the previous year.
From a quarterly perspective, total revenue in the third quarter also rose slightly – and exhibited the same basic tendencies in the various consulting areas as those evident on a nine-month basis.
As is usual in the MLP business model, and due to the seasonality of our business performance, the fourth quarter, and particularly the last six weeks of the fi nancial year, contribute very signifi cantly to revenue and earnings for the full year.
There were no signifi cant changes in the corporate structure during the period under review.
At the end of the fi rst nine months the number of consultants fell again slightly. Due to the continuingly challenging recruitment environment the number of consultants at September 3o fell to 1,944. The turnover rate stood at 9.37% and thus remained well below our target range of a maximum of 12% to 15%. The junior staff development programmes that were introduced in 2o13 should have a positive effect over the medium term. During the period under review these measures already led to a slight rise in the number of applicants.
In the fi nancial year 2o14 MLP opened four new branches in the university segment – in Münster, Frankfurt am Main, Düsseldorf and Essen. We aim to open at least four new branches per year in this segment in order to more effectively tap the potential arising from the increasing number of students graduating from universities.
New client acquisition continued to show pleasing development in the fi rst nine months of the fi nancial year, resulting in 18,9oo (18,9oo) new clients and equalling the fi gure achieved in the same period of the previous year. Consequently, the total number of clients at September 3o rose to 841,6oo (June 3o, 2o14: 839,3oo).
As our consulting fi rm is a service provider, we are not engaged in any research and development in the classic sense.
In the fi rst nine months, total revenue of the MLP Group rose from € 338.8 million to € 345.7 million. Within this fi gure, revenue from commissions and fees increased by 2.2% to € 314.8 million (€ 3o8.o million). Interest income amounted to € 17.1 million and thus almost equalled the level of the previous year (€ 17.2 million). Other revenue totalled € 13.8 million compared to € 13.6 million in the previous year.
The revenue breakdown by consulting area reveals slight growth in old-age provision, where revenue rose to € 133.1 million (€ 131.6 million). New business brokered by MLP increased by around 7% compared to the previous year, climbing to € 2.2o billion (€ 2.o6 billion), whereas the volume of brokered new business throughout the industry as a whole fell by around 2%. Occupational pensions accounted for 13% (13%) of new business and thus remained at the level of the previous year.
Revenue in wealth management continued to develop positively in the fi rst nine months, rising from € 1oo.4 million to € 1o5.7 million. Managed assets also showed positive growth, climbing to € 26.2 billion at September 3o after € 25.3 billion at June 3o, 2o14 (see chart).
Revenue in non-life insurance increased by 9.2% to € 29.6 million (€ 27.1 million). Revenue in loans and mortgages totalled € 9.1 million (€ 9.8 million) and thus fell short of the high level achieved in the previous year. Additional earnings from the joint venture company MLP Hyp amounted to € o.8 million (€ o.7 million). Revenue from other commissions and fees rose by 86% to € 5.4 million (€ 2.9 million) and was signifi cantly infl uenced by the expanded real estate offering.
The market conditions in health insurance remain diffi cult and continue to be characterised by great hesitancy. Against this negative background, MLP recorded a fall in revenue from commissions and fees from € 36.2 million to € 31.8 million.
Viewing the third quarter in isolation, total revenue rose slightly to € 117.8 million (€ 114.5 million). Here, revenue from commissions and fees rose by 5.4% to € 115.1 following € 1o9.2 million in the previous year. Interest income amounted to € 5.7 million which was exactly the same fi gure as in the previous year. Other revenue totalled € 2.6 million after € 5.3 million in the previous year, whereby the previous year's fi gure benefi tted from the release of provisions.
Commission expenses primarily contain performance-linked commission payments to our consultants. In addition, this item also includes commission expenses in the FERI segment which particularly result from the activities of our Luxembourg-based subsidiary that specialises in the administration of funds. Variable expenses incurred in this business area include, for example, payment to the deposit bank and for fund sales. In the period from January to September commission expenses amounted to € 149.6 million (€ 142.9 million). The increase was partly attributable to the higher proportion of business from the Luxembourg-based FERI operations. Interest expenses fell from € 3.8 million to € 2.3 million due to the continuing fall in interest rates. Cost of sales thus increased from € 146.6 million to € 151.9 million.
Viewing the third quarter in isolation, cost of sales also rose, climbing from € 49.1 million to € 53.6 million. Commission expenses accounted for € 53.o million (€ 48.3 million) of this fi gure. In addition to the aforementioned Luxembourg effect, several smaller, one-off commission effects also contributed to this increase. Interest expenses fell slightly and totalled € o.7 million (€ o.9 million).
In the fi rst nine months administration costs (defi ned as the sum of personnel costs, depreciation and amortisation as well as other operating expenses) increased slightly to € 184.2 million (€ 18o.6 million). Here, personnel costs remained unchanged at € 77.1 million (€ 77.1 million), despite a one-off charge incurred in the fi rst quarter. Depreciation and amortisation rose to € 1o.1 million (€ 8.7 million) due to investments undertaken in the previous year particularly in IT, which then lead to corresponding depreciation in the following years. Other operating expenses increased to € 97.o million (€ 94.8 million). Overall, around € 2.8 million of the previously announced temporary expenses relating to the ongoing growth initiative were incurred in the fi rst nine months of this fi nancial year.
Viewing the third quarter in isolation, administration costs also rose, climbing from € 58.4 million to € 59.6 million. Personnel expenses amounted to € 24.3 million (€ 24.3 million) and thus remained at the level of the previous year. Depreciation and amortisation increased to € 3.4 million (€ 3.o million). Other operating expenses rose to € 31.9 million (€ 31.2 million) due, primarily, to temporary expenses within the framework of the ongoing growth initiative.
In the fi rst nine months EBIT (earnings before interest and tax) amounted to € 1o.4 million (€ 12.3 million) and thus remained below the level of the previous year. This reduction was due to several one-off effects in the third quarter (for further details see "Analysis of expenses"). The fi nance cost fell from € o.1 million to € –o.1 million. The tax rate stood at 22.9%. Group net profi t amounted to € 7.9 million (€ 9.5 million). The diluted and basic earnings per share were € o.o7 (€ o.o9).
Viewing the third quarter in isolation EBIT decreased to € 4.9 million (€ 7.3 million) due to the aforementioned factors. The fi nance cost stood at € o.o million (€ o.1 million). Group net profi t totalled € 3.4 million following € 5.3 million in the previous year. The diluted and basic earnings per share amounted to € o.o3 (€ o.o5).
| 9 months | 9 months | ||
|---|---|---|---|
| All fi gures in € million | 2014 | 2013 | Change in % |
| Total revenue | 345.7 | 338.8 | 2.0% |
| Gross profi t ¹ | 193.8 | 192.2 | 0.8% |
| Gross profi t margin (%) | 56.1% | 56.7% | –0.1% |
| EBIT | 10.4 | 12.3 | –15.4% |
| EBIT margin (%) | 3.0% | 3.6% | –16.7% |
| Finance cost | –0.1 | 0.1 | – |
| EBT | 10.3 | 12.4 | –16.9% |
| EBT margin (%) | 3.0% | 3.7% | –18.9% |
| Income taxes | –2.4 | –2.9 | –17.2% |
| Net profi t | 7.9 | 9.5 | –16.8% |
| Net margin (%) | 2.3% | 2.8% | –17.9% |
¹ Defi nition: Gross profi t results from total revenue less commission expenses and interest expenses.
Related party disclosures are contained in Note 18.
Detailed information concerning the aims of fi nancial management is contained on page 46 of the MLP Group's Annual Report 2o13.
The MLP business model is low capital intensive and generates high cash fl ows. However, increased capital has been budgeted for the next few years in order to meet the revised defi nition of equity and the stricter requirements of Basel III.
At present we are 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 partially fi nanced by non-current liabilities. Current liabilities to clients and banks from the banking business also represent further refi nancing funds, which are generally available to us in the long term.
At September 3o, 2o14 liabilities towards clients and banks from the banking business which totalled € 1,oo5.8 million (December 31, 2o13: € 956.4 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 € 985.1 million (December 31, 2o13: € 981.7 million).
No capital measures were undertaken during the period under review.
Cash fl ow from operating activities fell to € 39.9 million compared to € 67.2 million in the same period of the previous year. Here, the primary 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 € –44.4 million to € –21.7 million. In the reporting period, less term deposits were reinvested than in the same period of the previous year.
Overall at the end of the third quarter 2o14 the Group had cash holdings amounting to € 128.o million. The liquidity situation therefore remains good. There are suffi cient cash reserves available to the Group. In addition to cash holdings, free lines of credit are in place.
| in € million | 3rd quarter 2014 |
3rd quarter 2013 |
9 months 2014 |
9 months 2013 |
|---|---|---|---|---|
| Cash and cash equivalents at the beginning of period |
48.5 | 50.9 | 61.4 | 60.7 |
| Cashfl ow from operating activities | 12.4 | –5.6 | 39.9 | 67.2 |
| Cashfl ow from investing activities | 1.4 | 3.6 | –21.7 | –44.4 |
| Cashfl ow from fi nancing activities | – | – | –17.3 | –34.5 |
| Change in cash and cash equivalents | 13.8 | –2.0 | 0.9 | –11.7 |
| Cash and cash equivalents at the end of period | 62.3 | 48.9 | 62.3 | 48.9 |
At the end of September the investment volume of the MLP Group stood at € 12.2 million compared to € 15.4 million in the previous year. The major portion of these investment measures, accounting for 88% of the total, was 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, 2o14 the balance sheet total of the MLP Group amounted to € 1,55o.2 million (December 31, 2o13: € 1,536.9 million). On the assets side of the balance sheet there were signifi cant changes primarily to the following items: compared to the year end, receivables from clients in the banking business reduced to € 468.1 million (€ 491.6 million). This decrease was mainly due to lower investments in promissory note bonds as well as lower receivables from the credit card business. Receivables from fi nancial institutions from the banking business rose to € 517.o million (December 31, 2o13: € 49o.1 million). This was essentially due to an increase in investment in on-demand monies. At the reporting date fi nancial assets climbed to € 164.6 million (December 31, 2o13: € 146.1 million), while cash and cash equivalents decreased from € 46.4 million to € 39.3 million. Both changes mainly result from investment redeployed in other asset classes. Tax refund claims rose to € 3o.7 million (December 31, 2o13: € 2o.6 million) and result from continued tax prepayments for the current fi nancial year. Other receivables and assets fell to € 95.2 million (December 31, 2o13: € 1o9.2 million). This item essentially comprises commission receivables from insurance companies for whom we have brokered 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, 2014 |
December 31, 2013 |
Change in % |
|---|---|---|---|
| Intangible assets | 156.5 | 155.3 | 0.8% |
| Property, plant and equipment | 66.4 | 65.8 | 0.9% |
| Investment property | 7.3 | 7.3 | 0.0% |
| Investments accounted for using the equity method | 2.4 | 2.5 | –4.0% |
| Deferred tax assets | 2.7 | 2.0 | 35.0% |
| Receivables from clients in the banking business | 468.1 | 491.6 | –4.8% |
| Receivables from banks in the banking business | 517.0 | 490.1 | 5.5% |
| Financial assets | 164.6 | 146.1 | 12.7% |
| Tax refund claims | 30.7 | 20.6 | 49.0% |
| Other receivables and other assets | 95.2 | 109.2 | –12.8% |
| Cash and cash equivalents | 39.3 | 46.4 | –15.3% |
| Total | 1,550.2 | 1,536.9 | 0.9% |
At the reference date on September 3o, 2o14, the equity capital of the MLP Group stood at € 361.6 million (December 31, 2o13: € 374.5 million). The changes are largely attributable to the dividend pay-out for the fi nancial year 2o13 in the second quarter of this fi nancial year. The equity capital situation of MLP therefore remains good with a balance sheet equity ratio at the reference date of 23.3% (December 31, 2o13: 24.4%).
At the end of the period under review provisions amounted to € 82.8 million (December 31, 2o13: € 85.1 million). Liabilities due to clients from the banking business rose from € 946.5 million to € 989.5 million and primarily refl ect a further increase in client deposits. Liabilities due to fi nancial institutions from the banking business climbed to € 16.3 million (December 31, 2o13: € 9.9 million). Other liabilities fell from € 1o6.6 million to € 84.7 million which was largely attributable to lower commission claims from our consultants. Due to our traditionally strong year-end business, commission claims by consultants rise at the balance sheet reference date of December 31 and then fall again in the following quarters.
| All fi gures in € million | September 30, 2014 |
December 31, 2013 |
Change in % |
|---|---|---|---|
| Shareholders' equity | 361.6 | 374.5 | –3.4% |
| Provisions | 82.8 | 85.1 | –2.7% |
| Deferred tax liabilities | 8.0 | 8.6 | –7.0% |
| Liabilities due to clients in the banking business | 989.5 | 946.5 | 4.5% |
| Liabilities due to banks in the banking business | 16.3 | 9.9 | 64.6% |
| Tax liabilities | 7.2 | 5.7 | 26.3% |
| Other liabilities | 84.7 | 106.6 | –20.5% |
| Total | 1,550.2 | 1,536.9 | 0.9% |
Due to the exceptional burdens in the market environment we decided to use a scenario-based approach at EBIT level for the forecast we provided in the Annual Report 2o13. Further details are contained on pages 93 to 97 of the MLP Group's Annual Report 2o13. After the conclusion of the fi rst nine months we remain within the framework of this forecast (for further details see forecast).
In the fi rst nine months MLP recorded revenue growth both in wealth management as well as in old-age provision. Whilst the increase in wealth management generally met our expectations, the revenue rise in old-age provision fell short of plan. In health insurance, revenue decreased signifi cantly in the fi rst nine months due to the market conditions and remained below our expectations.
In the fi rst nine months administration costs were burdened by one-off exceptional items. For the full year we continue to anticipate that the administration costs will remain within the forecast framework.
The MLP Group structures its business into the following operating segments:
A detailed description of the individual segments is contained on pages 51 et seq. of the MLP Group's Annual Report 2o13.
In the fi rst nine months revenue in the fi nancial services segment amounted to € 265.8 million (€ 265.8 million) and thus remained at the level of the previous year. Whereas sales revenue improved slightly to € 256.5 million (€ 256.1 million), other revenue fell slightly to € 9.3 million (€ 9.7 million).
Commission expenses increased from € 1o4.9 million to € 1o7.7 million as a result of one-off commission effects in the third quarter. Interest expenses fell from € 3.8 million to € 2.3 million due to the continued fall in interest rates. Personnel expenses remained almost unchanged at € 53.6 million (€ 53.3 million). Depreciation and amortisation increased to € 6.9 million (€ 5.4 million) due mainly to higher investments in the previous year, particularly in IT. Other operating expenses rose to € 9o.9 million (€ 88.2 million), primarily as a result of higher IT expenditure. As a consequence of, in part, one-off burdens on the cost side, EBIT decreased to € 5.2 million (€ 1o.9 million). The fi nance cost stood at € –o.1 million (€ o.2 million). Earnings before tax (EBT) therefore totalled € 5.1 million compared to € 11.1 million in the previous year.
Viewing the third quarter in isolation, total revenue rose to € 88.9 million (€ 87.9 million). Sales revenue grew by 3.2% to € 87.3 million (€ 84.6 million). Other revenue fell to € 1.6 million (€ 3.3 million) due to positive one-time effects in the previous year.
Commission expenses increased to € 38.5 million (€ 35.4 million) as a result of primarily one-off commission effects. Personnel expenses amounted to € 16.7 million (€ 16.5 million) and thus remained at the level of the previous year. Depreciation and amortisation as well as other operating expenses rose slightly to € 2.4 million (€ 1.9 million) and € 3o.4 million (€ 29.o million) respectively. In view of the aforementioned one-off costs, EBIT in the third quarter amounted to just € o.6 million after € 4.6 million in the same period of the previous year.
| Total revenue and EBIT in the fi nancial services segment (all fi gures in € million) | ||
|---|---|---|
| 9M 2014 5.2 |
265.8 | |
| 9M 2013 10.9 |
265.8 | |
| Total revenue | EBIT |
In the fi rst nine months total revenue in the FERI segment rose from € 76.2 million to € 8o.5 million. Commission expenses increased to € 43.9 million (€ 41.3 million) due to the higher proportion of business from our Luxembourg-based subsidiary. Personnel expenses decreased compared to the previous year, falling to € 19.5 million (€ 21.1 million) due to partly one-off additional expenses incurred in the same period of the previous year. Other operating expenses reduced to € 7.2 million (€ 8.o million). EBIT rose signifi cantly to € 8.4 million (€ 4.3 million). EBT doubled to € 8.3 million (€ 4.1 million).
Viewing the third quarter in isolation, total revenue increased from € 26.9 million to € 29.6 million. Commission expenses rose in this context to € 15.2 million (€ 13.9 million). Personnel expenses remained unchanged at € 6.8 million (€ 6.8 million). Other operating expenses decreased to € 2.2 million (€ 2.6 million). EBIT improved signifi cantly to € 4.9 million following € 3.o million in the previous year. EBT totalled € 4.8 million (€ 2.9 million).
In the fi rst nine months total revenue in the Holding segment rose to € 1o.o million (€ 8.7 million), mainly due to revenue relating to the positive effect on MLP from the negative declaratory judgement against several former FERI shareholders. This already occurred in the fi rst quarter. Personnel expenses increased to € 4.o million (€ 2.7 million) due to one-off exceptional costs which were also booked in the fi rst quarter. Other operating expenses rose slightly to € 7.5 million after € 6.9 million in the previous year. EBIT thus decreased to € –3.1 million (€ –2.7 million). The fi nance cost remained unchanged at € o.4 million (€ o.4 million). At the end of the fi rst nine months EBT stood at € –3.2 million (€ –2.7 million).
Viewing the third quarter in isolation, total revenue fell to € 2.7 million (€ 3.6 million). Personnel expenses reduced to € o.7 million compared to € 1.o million in the previous year. Other operating expenses remained almost unchanged at € 2.1 million (€ 2.2 million). EBIT amounted to € –o.7 million (€ –o.2 million).
As MLP is a knowledge-based service provider, qualifi ed and motivated employees and consultants represent the most important foundations for sustainable corporate success and for achieving the company targets described in the chapter entitled "Goals and strategies" on pages 23 et seq. of the MLP Group's Annual Report 2o13.
In the period under review the number of employees in the MLP Group fell slightly. At the reporting reference date on September 3o, 2o14 MLP employed 1,523 people – 35 less than in the same period of the previous year. The reduction was mainly due to a lower number of marginal part-time staff which fell from 164 to 133.
| Segment | September 30, 2014 |
September 30, 2013 |
|---|---|---|
| Financial services | 1,288 | 1,312 |
| FERI | 228 | 237 |
| Holding | 7 | 9 |
| Total | 1,523 | 1,558 |
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 fi rst nine months of 2o14
The MLP Group has adequate liquidity. At the balance sheet reference date on September 3o, 2o14, our core capital ratio stood at 13.6% and thus remained above the 8% level prescribed by the supervisory body. 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 59 to 85 of the MLP Group's Annual Report 2o13.
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 86 of the MLP Group's Annual Report 2o13.
In their Autumn Report, the leading economic research institutes downgraded their expectations of economic growth for 2o14 and 2o15. The experts are now anticipating growth of just 1.3% for the current year compared to 1.9% in the spring. The researchers' revised forecasts for 2o15 reveal an even greater correction – with growth now expected to reach just 1.2% following the predicted fi gure of 2.o% in their Spring Report.
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 page 86 of the MLP Group's Annual Report 2o13.
The market conditions in old-age provision will remain challenging throughout the entire year. In this respect the German Insurance Association (GdV) anticipates that the number of new contracts for the full year 2o14 will fall by 4.6%, and that the premium sum for new business will decrease by 1.6% – supported by positive development in single premium business.
The diffi cult market environment in private health insurance will continue. Here, the experts at the Assekurata rating agency forecast that the number of people with full private insurance in 2o14 will fall throughout the industry for the third consecutive year.
Some of the legislative amendments contained within the new Life Insurance Reform Act (see section on "Competition and regulation") will not come into effect until 2o15.
MLP takes a positive view of the fact that binding regulations have now been found which should lead to a reduction in the public discussions about the future of life insurance products. We also welcome the future requirement to report effective costs as well as the fact that no overall cap for acquisition commissions has been incorporated into the legislation.
The adopted limitation of the maximum zillmerisation rate to 2.5% relates to the question of which costs the insurer can charge, and when – and thus has no direct effect on the level of acquisition commission. However, in our view this measure will lead to greater margin pressure. From a current perspective we expect that, in future, MLP as a quality provider will continue to receive appropriate levels of commission.
Furthermore we anticipate that the new LVRG legislation will present challenges for insurers with a weaker capital base. Clients will thus focus more attention than ever before on their choice of insurance company. As an insurance broker we select products for our clients from the broad range of offerings available on the market and implement an elaborate selection process. Our role will gain in importance and we consequently expect to benefi t from these market developments in the medium term.
In the short term, the reduction in the guaranteed interest rate to 1.25% on January 1, 2o15 could create business potential as occupational disability insurance cover, for example, will probably become more expensive from the coming year as a result of this measure such that – where there is a corresponding client need – contract conclusion in 2o14 may be benefi cial.
The fi nancial year 2o13 clearly demonstrated the prevalence of even more challenging market conditions. This makes it more diffi cult to issue a concrete forecast for the business development. In view of these exceptional burdens in the market environment MLP decided to adopt a scenariobased approach in its Annual Report 2o13 – details of which can be found on pages 93 to 97.
At the half-year we communicated our expectation that full-year EBIT would range within a corridor between the lower forecast scenario (€ 5o million) and the base scenario (€ 65 million). This was based on the experiences of the fi rst six months of the fi nancial year which showed that the market conditions remain diffi cult. For achievement of the base scenario, an initial improvement in the framework conditions would have been necessary.
After conclusion of the third quarter the lower forecast scenario with an EBIT of at least € 5o million now looks more ambitious. The coming weeks through to the end of December will be of crucial importance to our business success for the full year. This period is traditionally a timeframe in which MLP generates a large portion of its earnings.
In the fi rst part of the fi nal quarter new business developed positively. However, very high momentum will be required in the remaining weeks of the year in order to achieve the lower forecast scenario. On the cost side we continue to expect that the administration costs for the full year will amount to around € 255 million. Overall, our goal remains to signifi cantly increase revenue and EBIT in the full year.
We will continue to have good fi nancial strength, which we intend to utilise together with our market positioning in order to further expand our competitive position. We also continue to expect that the overall development of the MLP Group will be clearly positive.
During the fi rst nine months of the year global equity markets were characterised by high volatility. Swayed by the interplay of favourable economic data and the continuation of the cheap money policy on the one hand, and the disturbing news fl ow emanating from the crisis regions of the Crimea, Syria and Iraq as well as fears of an imminent interest rate rise on the other hand, the German benchmark index DAX reached a historic all-time high of 1o,o51 points in June. However, the nervous state of the market was particularly evident during the course of the third quarter. Following a rise in the DAX at the beginning of July back up towards its previous high, the index then entered a negative phase, posting heavy falls through to the beginning of August. Within the space of just a few weeks the DAX retreated by more than 1,ooo points. Once again, action by the European Central Bank paved the way for the equity market to stage an equally fulminant recovery. The implemented reduction in the main refi nancing rate to o.o5% constituted a new historic low level. The DAX responded to this step with a signifi cant rally, rising to 9,891 points. During the further course of the month, the release of better than expected economic data rekindled fears of an interest rate rise, pushing the index down to 9,474 points by the end of the third quarter.
Following a volatile fi rst half-year, the MLP share price continued to oscillate in the third quarter as well. After falling at the end of the second quarter, the MLP share re-established itself above the € 5 level in June before renewed selling pressure with higher volumes led to a fall by the end of August back down to the previous low of the year at € 4.5o. At that level the MLP share was able to establish valid support but fell below this mark at the end of the month, closing at € 4.42 at the end of trading on September 3o.
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 2014 |
9 months 2013 |
|
|---|---|---|
| Share price at the beginning of the year | € 5.26 | € 5.08 |
| Share price high | € 6.07 | € 6.64 |
| Share price low | € 4.40 | € 4.40 |
| Share price at the end of the quarter | € 4.42 | € 4.73 |
| Average trading volume 1 |
€ 43,600 | € 37,900 |
| Dividend for the previous year | € 0.16 | € 0.32 |
| Shares outstanding (end of reporting period) | 107,877,738 | 107,877,738 |
| Market capitalisation (end of reporting period) | € 476,819,601.96 | € 510,261,700.74 |
¹ Average daily trading volume Xetra, based on the preceding 12 months.
| 3rd quarter 3rd quarter 9 months All fi gures in €'000 Notes 2014 2013 2014 Revenue (6) 115,143 109,185 331,908 Other revenue 2,610 5,292 13,761 Total revenue 117,752 114,477 345,668 Commission expenses (7) –52,959 –48,242 –149,603 |
9 months 2013 325,202 |
|---|---|
| 13,601 | |
| 338,803 | |
| –142,872 | |
| Interest expenses –667 –867 –2,275 |
–3,761 |
| Personnel expenses (8) –24,283 –24,322 –77,132 |
–77,105 |
| Depreciation and impairments –3,422 –2,954 –10,076 |
–8,684 |
| Other operating expenses (9) –31,929 –31,162 –97,002 |
–94,842 |
| Earnings from investments accounted for using the equity method 375 405 793 |
733 |
| Earnings before interest and tax (EBIT) 4,866 7,337 10,374 |
12,272 |
| Other interest and similar income 218 290 519 |
686 |
| Other interest and similar expenses –218 –179 –639 |
–547 |
| Finance cost (10) 1 112 –120 |
139 |
| Earnings before tax (EBT) 4,867 7,449 10,254 |
12,411 |
| Income taxes –1,479 –2,177 –2,353 |
–2,926 |
| Net profi t 3,388 5,272 7,901 |
9,485 |
| Of which attributable to | |
| owners of the parent company 3,388 5,272 7,901 |
9,485 |
| Earnings per share in €1 | |
| basic/diluted 0.03 0.05 0.07 |
0.09 |
1 Basis of calculation: Average number of shares at September 30, 2014: 107,877,738 .
| 3rd quarter | 3rd quarter | 9 months | 9 months | |
|---|---|---|---|---|
| All fi gures in €'000 | 2014 | 2013 | 2014 | 2013 |
| Net profi t | 3,388 | 5,272 | 7,901 | 9,485 |
| Gains/losses due to the revaluation of defi ned benefi t obligations | –1,647 | –30 | –6,531 | –1,465 |
| Deferred taxes on non-reclassifi able gains/losses | 477 | 7 | 1,893 | 424 |
| Non-reclassifi able gains/losses | –1,170 | –23 | –4,638 | –1,041 |
| Gains/losses from changes in the fair value of available-for-sale securities | 101 | –3 | 1,453 | 117 |
| Deferred taxes on non-reclassifi able gains/losses | –20 | 117 | –360 | 25 |
| Reclassifi able gains/losses | 81 | 115 | 1,093 | 142 |
| Other comprehensive income | –1,088 | 92 | –3,546 | –899 |
| Total comprehensive income | 2,300 | 5,363 | 4,356 | 8,586 |
| Of which attributable to | ||||
| owners of the parent company | 2,300 | 5,363 | 4,356 | 8,586 |
| All fi gures in €'000 | Notes | Sept. 30, 2014 | Dec. 31, 2013 |
|---|---|---|---|
| Intangible assets | 156,474 | 155,267 | |
| Property, plant and equipment | 66,360 | 65,822 | |
| Investment property | 7,275 | 7,325 | |
| Investments accounted for using the equity method | 2,438 | 2,547 | |
| Deferred tax assets | 2,724 | 1,974 | |
| Receivables from clients in the banking business | (11) | 468,066 | 491,570 |
| Receivables from banks in the banking business | (11) | 517,000 | 490,110 |
| Financial assets | (12) | 164,639 | 146,082 |
| Tax refund claims | 30,719 | 20,622 | |
| Other receivables and assets | (13) | 95,226 | 109,164 |
| Cash and cash equivalents | 39,257 | 46,383 | |
| Total | 1,550,179 | 1,536,865 |
| All fi gures in €'000 | Notes | Sept. 30, 2014 | Dec. 31, 2013 |
|---|---|---|---|
| Shareholders' equity | (14) | 361,572 | 374,477 |
| Provisions | 82,824 | 85,138 | |
| Deferred tax liabilities | 7,953 | 8,628 | |
| Liabilities due to clients in the banking business | 989,538 | 946,484 | |
| Liabilities due to banks in the banking business | 16,335 | 9,924 | |
| Tax liabilities | 7,217 | 5,654 | |
| Other liabilities | (13) | 84,739 | 106,560 |
| Total | 1,550,179 | 1,536,865 |
| All fi gures in €'000 | 9 months 2014 |
9 months 2013 |
|---|---|---|
| Cash fl ow from operating activities | 39,893 | 67,218 |
| Cash fl ow from investing activities | –21,739 | –44,444 |
| Cash fl ow from fi nancing activities | –17,260 | –34,521 |
| Change in cash and cash equivalents | 893 | –11,748 |
| Cash and cash equivalents at the end of the period | 62,257 | 48,934 |
| All fi gures in €'000 | 3rd quarter 2014 |
3rd quarter 2013 |
|---|---|---|
| Cash fl ow from operating activities | 12,416 | –5,605 |
| Cash fl ow from investing activities | 1,367 | 3,599 |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | 13,783 | –2,006 |
| Cash and cash equivalents at the end of the period | 62,257 | 48,934 |
The notes on the statement of cash fl ow appear in Note 15.
| Equity attributable to MLP AG shareholders | |||||||
|---|---|---|---|---|---|---|---|
| All fi gures in €'000 | Share capital | Capital reserves | Gains/losses from changes in the fair value of available-for-sale securities* |
Revaluation gains/ losses related to defi ned benefi t obligations after |
taxes Retained earnings | Total share holders' equity |
|
| As of Jan. 1, 2013 | 107,878 | 142,184 | 382 | – | 137,110 | 387,554 | |
| Effects due to the retrospective application of IAS 19 |
– | – | – | –3,648 | 251 | –3,397 | |
| As of Jan. 1, 2013 (adjusted) | 107,878 | 142,184 | 382 | –3,648 | 137,361 | 384,157 | |
| Dividend | – | – | – | – | –34,521 | –34,521 | |
| Transactions with owners | – | – | – | – | –34,521 | –34,521 | |
| Net profi t | – | – | – | – | 9,485 | 9,485 | |
| Other comprehensive income | – | – | 142 | –1,041 | – | –899 | |
| Total comprehensive income | – | – | 142 | –1,041 | 9,485 | 8,586 | |
| As of Sept. 30, 2013 | 107,878 | 142,184 | 524 | –4,689 | 112,325 | 358,221 | |
| As of Jan. 1, 2014 | 107,878 | 142,184 | 837 | –4,750 | 128,329 | 374,477 | |
| Dividend | – | – | – | – | –17,260 | –17,260 | |
| Transactions with owners | – | – | – | – | –17,260 | –17,260 | |
| Net profi t | – | – | – | – | 7,901 | 7,901 | |
| Other comprehensive income | – | – | 1,093 | –4,638 | – | –3,546 | |
| Total comprehensive income | – | – | 1,093 | –4,638 | 7,901 | 4,356 | |
| As of Sept. 30, 2014 | 107,878 | 142,184 | 1,930 | –9,388 | 118,970 | 361,572 |
* 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, 2o13.
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 2o13. These are presented in the Group notes of the Annual Report 2o13 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 fi nancial statements at December 31, 2o13 except for the standards and interpretations to be used for the fi rst time in the fi nancial year 2o14.
In the fi nancial year 2o14 the following new or revised standards are to be used for the fi rst time:
MLP did not anticipate any signifi cant effects on the scope or methods of consolidation from the introduction of IFRS 1o and IFRS 11.
In all other cases there were no signifi cant effects on the representation of the Group's net assets, fi nancial position or results of operations.
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.
There were no signifi cant changes compared to December 31, 2o13.
| Financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 3rd quarter 2014 |
3rd quarter 2013 |
|
| Revenue | 87,290 | 84,596 | |
| of which total inter-segment revenue | 704 | 1,097 | |
| Other revenue | 1,637 | 3,256 | |
| of which total inter-segment revenue | 492 | 474 | |
| Total revenue | 88,927 | 87,852 | |
| Commission expenses | –38,470 | –35,409 | |
| Interest expenses | –668 | –867 | |
| Personnel expenses | –16,733 | –16,488 | |
| Depreciation and impairments | –2,372 | –1,852 | |
| Other operating expenses | –30,431 | –29,036 | |
| Earnings from investments accounted for using the equity method | 375 | 405 | |
| Segment earnings before interest and tax (EBIT) | 628 | 4,605 | |
| Other interest and similar income | 39 | 69 | |
| Other interest and similar expenses | –76 | –34 | |
| Finance cost | –37 | 34 | |
| Earnings before tax (EBT) | 591 | 4,639 | |
| Income taxes | |||
| Net profi t | |||
| FERI | Holding | Consolidation | Total | ||||
|---|---|---|---|---|---|---|---|
| 3rd quarter 2014 |
3rd quarter 2013 |
3rd quarter 2014 |
3rd quarter 2013 |
3rd quarter 2014 |
3rd quarter 2013 |
3rd quarter 2014 |
3rd quarter 2013 |
| 28,577 | 25,757 | – | – | –724 | –1,168 | 115,143 | 109,185 |
| 20 | 71 | – | – | –724 | –1,168 | – | – |
| 1,062 | 1,123 | 2,699 | 3,613 | –2,788 | –2,699 | 2,610 | 5,292 |
| - | 5 | 2,296 | 2,219 | –2,788 | –2,699 | – | – |
| 29,639 | 26,880 | 2,699 | 3,613 | –3,513 | –3,867 | 117,752 | 114,477 |
| –15,150 | –13,931 | – | – | 660 | 1,097 | –52,959 | –48,242 |
| – | – | – | – | 1 | 1 | –667 | –867 |
| –6,830 | –6,829 | –720 | –1,004 | – | – | –24,283 | –24,322 |
| –542 | –494 | –507 | –608 | – | – | –3,422 | –2,954 |
| –2,227 | –2,645 | –2,131 | –2,219 | 2,859 | 2,738 | –31,929 | –31,162 |
| – | – | – | – | – | – | 375 | 405 |
| 4,890 | 2,981 | –659 | –219 | 8 | –31 | 4,866 | 7,337 |
| 2 | 0 | 180 | 224 | –3 | –2 | 218 | 290 |
| –49 | –65 | –140 | –142 | 47 | 63 | –218 | –179 |
| –46 | –65 | 39 | 81 | 45 | 61 | 1 | 112 |
| 4,844 | 2,916 | –619 | –137 | 52 | 30 | 4,867 | 7,449 |
| –1,479 | –2,177 | ||||||
| 3,388 | 5,272 | ||||||
| 9 months 2014 |
9 months 2013 |
|
|---|---|---|
| 256,517 | 256,101 | |
| 2,101 | 3,576 | |
| 9,292 | 9,658 | |
| 1,507 | 1,384 | |
| 265,809 | 265,759 | |
| –107,657 | –104,903 | |
| –2,277 | –3,763 | |
| –53,641 | –53,312 | |
| –6,897 | –5,389 | |
| –90,931 | –88,244 | |
| 793 | 733 | |
| 5,199 | 10,881 | |
| 159 | 356 | |
| –218 | –169 | |
| –59 | 187 | |
| 5,140 | 11,068 | |
| Financial services |
| 9 months 9 months 9 months 9 months 9 months 9 months 9 months 2014 2013 2014 2013 2014 2013 2014 77,638 72,885 – – –2,247 –3,784 331,908 146 208 – – –2,247 –3,784 – 2,901 3,295 9,971 8,706 –8,404 –8,057 13,761 4 5 6,892 6,667 –8,404 –8,057 – 80,539 76,180 9,971 8,706 –10,650 –11,841 345,668 –43,913 –41,294 – – 1,967 3,325 –149,603 – – – – 2 2 –2,275 –19,484 –21,072 –4,007 –2,720 – – –77,132 –1,563 –1,474 –1,616 –1,821 – – –10,076 –7,156 –8,046 –7,493 –6,866 8,578 8,314 –97,002 – – – – – – 793 8,423 4,293 –3,145 –2,702 –103 –200 10,374 4 1 371 396 –15 –67 519 –149 –188 –425 –427 153 237 –639 –145 –187 –55 –31 139 169 –120 8,278 4,106 –3,199 –2,733 36 –30 10,254 –2,353 |
FERI | Holding Consolidation |
Total | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 9 months 2013 |
|||||||||
| 325,202 | |||||||||
| – | |||||||||
| 13,601 | |||||||||
| – | |||||||||
| 338,803 | |||||||||
| –142,872 | |||||||||
| –3,761 | |||||||||
| –77,105 | |||||||||
| –8,684 | |||||||||
| –94,842 | |||||||||
| 733 | |||||||||
| 12,272 | |||||||||
| 686 | |||||||||
| –547 | |||||||||
| 139 | |||||||||
| 12,411 | |||||||||
| –2,926 | |||||||||
| 7,901 | 9,485 |
| All fi gures in €'000 | 3rd quarter 2014 |
3rd quarter 2013 |
9 months 2014 |
9 months 2013 |
|---|---|---|---|---|
| Old-age provision | 48,879 | 48,079 | 133,139 | 131,589 |
| Wealth management | 38,753 | 35,067 | 105,703 | 100,355 |
| Health insurance | 10,741 | 10,686 | 31,841 | 36,242 |
| Non-life insurance | 5,459 | 4,609 | 29,587 | 27,141 |
| Loans and mortgages | 3,228 | 3,842 | 9,130 | 9,798 |
| Other commission and fees | 2,360 | 1,153 | 5,418 | 2,850 |
| Commission and fees | 109,420 | 103,437 | 314,818 | 307,975 |
| Interest income | 5,723 | 5,748 | 17,089 | 17,227 |
| Total | 115,143 | 109,185 | 331,908 | 325,202 |
In the period from January 1 to September 3o, 2o14 the commission expenses rose from € 142,872 thsd. to € 149,6o3 thsd. compared to the 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, 2o14 compared to the same period of the previous year from € 77,1o5 thsd. to € 77,132 thsd. For further explanations please refer to the section "Personnel" of the Group interim management report.
At September 3o, 2o14, the MLP Group had the following numbers of employees in the strategic fi elds of business:
| Sept. 30, 2014 | Sept. 30, 2013 | |||||
|---|---|---|---|---|---|---|
| of which executive employees |
of which mar ginal part-time employees |
of which executive employees |
of which mar ginal part-time employees |
|||
| Financial | ||||||
| services | 1,288 | 33 | 82 | 1,312 | 31 | 105 |
| FERI | 228 | 8 | 51 | 237 | 8 | 59 |
| Holding | 7 | 2 | – | 9 | 2 | – |
| Total | 1,523 | 43 | 133 | 1,558 | 41 | 164 |
| 3rd quarter | 3rd quarter | 9 months | 9 months | |
|---|---|---|---|---|
| All fi gures in €`000 | 2014 | 2013 | 2014 | 2013 |
| IT operations | 11,651 | 11,133 | 35,063 | 32,930 |
| Rental and leasing | 3,276 | 3,256 | 10,149 | 10,116 |
| Administration operations | 2,778 | 2,802 | 8,464 | 8,224 |
| Consultancy | 3,004 | 2,164 | 7,952 | 7,029 |
| Representation and advertising | 1,361 | 1,602 | 4,635 | 5,060 |
| External services – banking business | 1,478 | 1,908 | 4,561 | 6,625 |
| Other external services | 1,157 | 812 | 3,045 | 2,987 |
| Travel expenses | 853 | 1,152 | 2,985 | 2,703 |
| Premiums and fees | 884 | 572 | 2,846 | 1,969 |
| Training and further education | 851 | 783 | 2,808 | 2,852 |
| Entertainment | 592 | 408 | 2,160 | 1,902 |
| Insurance | 567 | 534 | 1,856 | 1,789 |
| Expenses for commercial agents | 416 | 442 | 1,575 | 1,269 |
| Maintenance | 328 | 635 | 1,558 | 1,723 |
| Depreciation and impairments of other receivables | ||||
| and assets | 646 | 613 | 1,353 | 1,110 |
| Depreciation and impairments of other receivables | ||||
| from clients in the banking business | 269 | 261 | 771 | 841 |
| Other employee-related expenses | 212 | 227 | 757 | 590 |
| Audit | 218 | 313 | 685 | 874 |
| Expenses from the disposal of assets | 19 | 14 | 88 | 96 |
| Sundry other operating expenses | 1,370 | 1,531 | 3,692 | 4,153 |
| Total | 31,929 | 31,162 | 97,002 | 94,842 |
The costs of IT operations are mainly attributable to 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. Expenses for representation and advertising include costs incurred due to media presence and client information activities. The item "External services - banking business" mainly contains securities settlement and transaction costs in connection with the MLP credit card. Expenses for commercial agents include costs for former consultants and the training allowance granted for new consultants. Sundry other operating expenses essentially comprise goodwill payments, remuneration for members of the Supervisory Board and vehicle costs.
| All fi gures in €'000 | 3rd quarter 2014 |
3rd quarter 2013 |
9 months 2014 |
9 months 2013 |
|---|---|---|---|---|
| Other interest and similar income | 218 | 290 | 519 | 686 |
| Interest expenses from fi nancial instruments | –71 | –35 | –200 | –117 |
| Interest expenses from net obligations for | ||||
| defi ned benefi t plans | –146 | –143 | –439 | –430 |
| Other interest and similar expenses | –218 | –179 | –639 | –547 |
| Finance cost | 1 | 112 | –120 | 139 |
The reduction in the fi nance cost is primarily attributable to lower revenue from the discounting of provisions and simultaneously higher expenses from the accumulation of provisions. On the other hand, there was higher revenue from bank deposits.
Receivables from banking business increased from € 981,68o thsd. at December 31, 2o13 to € 985,o66 thsd. For further explanations please refer to the section "Financial position" of the Group interim management report.
| All fi gures in €'000 | Sept. 30, 2014 | Dec. 31, 2013 |
|---|---|---|
| Held-to-maturity investments | 59,005 | 74,283 |
| Financial assets at fair value through profi t and loss | 5,096 | 5,133 |
| Available-for-sale fi nancial assets | 26,071 | – |
| Debentures and other fi xed income securities | 90,172 | 79,416 |
| Available-for-sale fi nancial assets | 6,576 | 6,948 |
| Financial assets at fair value through profi t and loss | 1,466 | 1,728 |
| Shares and other variable yield securities | 8,042 | 8,677 |
| Fixed and time deposits (loans and receivables) | 63,143 | 55,230 |
| Investments in non-consolidated subsidiaries (available-for-sale fi nancial assets) | 3,282 | 2,759 |
| Total | 164,639 | 146,082 |
The increase in fi nancial investments is primarily attributable to the investment of fi xed-term money deposits, of debentures and of other fi xed income securities.
Due to the seasonally stronger year-end business, high receivables from insurance companies as well as high liabilities towards commercial agents at December 31, 2o13 had to be shown which were then balanced out in the fi rst quarter of 2o14. Through the seasonal infl uences a lower amount of receivables and liabilities were built up in the fi rst nine months of 2o14.
The share capital of MLP AG is made up of 1o7,877,738 (previous year: 1o7,877,738) no-par-value shares. The retained earnings include statutory reserves of € 3,117 thsd. (previous year: € 3,117 thsd.).
In accordance with the resolution passed at the Annual General Meeting on June 5, 2o14 a dividend of € 17,26o thsd. (previous year: € 34,521 thsd) was to be paid for the fi nancial year 2o13. This corresponds to € o.16 per share (previous year: € o.32 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 if necessary. 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 | Sept. 30, 2014 | Sept. 30, 2013 |
|---|---|---|
| Cash and cash equivalents | 39,257 | 33,934 |
| Loans ≤3 months | 23,000 | 15,000 |
| Cash and cash equivalents | 62,257 | 48,934 |
Cash and cash equivalents
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.
There were no signifi cant changes compared to December 31, 2o13.
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:
| Sept. 30, 2014 | |||||||
|---|---|---|---|---|---|---|---|
| Carrying | Fair value | No fi nancial | |||||
| amount | instruments | ||||||
| according to | |||||||
| IAS32/39 | |||||||
| Carrying amount |
|||||||
| corresponds | |||||||
| All fi gures in €'000 | to fair value | Level 1 | Level 2 | Level 3 | Total | ||
| Financial assets measured at fair value | 39,210 | 22,644 | 16,566 | 39,210 | |||
| Fair Value Option | 6,562 | 1,466 | 5,096 | 6,562 | |||
| Financial investments (share certifi cates and | |||||||
| structured bonds) | 6,562 | – | 1,466 | 5,096 | – | 6,562 | – |
| Available-for-sale fi nancial assets | 32,647 | 21,178 | 11,469 | 32,647 | |||
| Financial investments (share certifi cates and | |||||||
| investment fund shares) | 6,576 | – | 6,098 | 479 | – | 6,576 | – |
| Financial assets (bonds) | 26,071 | – | 15,080 | 10,991 | – | 26,071 | – |
| Financial assets measured at amortised cost | 1,217,315 | 462,035 | 11,652 | 776,134 | 1,249,821 | ||
| Loans and receivables | 1,155,028 | 458,752 | 727,721 | 1,186,473 | |||
| Receivables from banking business – clients | 468,066 | 117,260 | – | 381,809 | – | 499,068 | – |
| Receivables from banking business – banks | 517,000 | 171,531 | – | 345,912 | – | 517,443 | – |
| Financial investments (fi xed and time deposits) | 63,143 | 63,143 | – | – | – | 63,143 | – |
| Other receivables and assets | 67,561 | 67,561 | – | – | – | 67,561 | 27,664 |
| Cash and cash equivalents | 39,257 | 39,257 | – | – | – | 39,257 | – |
| Held-to-maturity investments | 59,005 | 11,652 | 48,413 | 60,065 | |||
| Financial assets (bonds) | 59,005 | – | 11,652 | 48,413 | – | 60,065 | – |
| Available-for-sale fi nancial assets | 3,282 | 3,282 | 3,282 | ||||
| Financial assets (investments) | 3,282 | 3,282 | – | – | – | 3,282 | – |
| Financial liabilities measured at amortised cost | 1,062,908 | 1,031,089 | 31,638 | 1,062,727 | |||
| Liabilities due to banking business – clients | 989,538 | 973,302 | – | 16,271 | – | 989,572 | – |
| Liabilities due to banking business – banks | 16,335 | 752 | – | 15,367 | – | 16,119 | – |
| Other liabilities | 57,036 | 57,036 | – | – | – | 57,036 | 27,704 |
| Liabilities due to fi nancial guarantees and credit commitments |
34,334 | 34,334 | – | – | – | 34,334 | – |
| Dec. 31, 2013 | ||
|---|---|---|
| -- | -- | --------------- |
| 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 | 17,091 | 13,809 | 3,282 | 17,091 | |||
| Fair Value Option | 10,143 | 6,861 | 3,282 | 10,143 | |||
| Receivables from banking business – clients | 3,282 | – | – | 3,282 | – | 3,282 | – |
| Financial investments (share certifi cates and structured bonds) |
6,861 | – | 6,861 | – | – | 6,861 | – |
| Available-for-sale fi nancial assets | 6,948 | 6,948 | 6,948 | ||||
| Financial investments (share certifi cates and investment fund shares) |
6,948 | – | 6,948 | – | – | 6,948 | – |
| Financial assets measured at amortised cost | 1,240,270 | 513,243 | 29,981 | 341,634 | 383,836 | 1,268,695 | |
| Loans and receivables | 1,163,228 | 510,484 | 295,594 | 383,836 | 1,189,915 | ||
| Receivables from banking business – clients | 488,288 | 130,764 | – | – | 383,836 | 514,600 | – |
| Receivables from banking business – banks | 490,110 | 194,891 | – | 295,594 | – | 490,485 | – |
| Financial investments (fi xed and time deposits) | 55,230 | 55,230 | – | – | – | 55,230 | – |
| Other receivables and assets | 83,217 | 83,217 | – | – | – | 83,217 | 25,948 |
| Cash and cash equivalents | 46,383 | 46,383 | – | – | – | 46,383 | – |
| Held-to-maturity investments | 74,283 | 29,981 | 46,040 | 76,021 | |||
| Financial assets (bonds) | 74,283 | – | 29,981 | 46,040 | – | 76,021 | – |
| Available-for-sale fi nancial assets | 2,759 | 2,759 | 2,759 | ||||
| Financial assets (investments) | 2,759 | 2,759 | – | – | – | 2,759 | – |
| Financial liabilities measured at fair value | 179 | 179 | 179 | ||||
| Financial instruments held for trading | 179 | 179 | 179 | ||||
| Other liabilities | 179 | – | – | 179 | – | 179 | – |
| Financial liabilities measured at amortised cost | 1,044,282 | 1,019,123 | 24,771 | 1,043,894 | |||
| Liabilities due to banking business – clients | 946,484 | 930,991 | – | 15,318 | – | 946,309 | – |
| Liabilities due to banking business – banks | 9,924 | 269 | – | 9,453 | – | 9,722 | – |
| Other liabilities | 87,863 | 87,863 | – | – | – | 87,863 | 18,517 |
| Liabilities due to fi nancial guarantees and credit commitments |
43,776 | 43,776 | – | – | – | 43,776 | – |
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.
Due to a change in purpose, receivables from clients in the banking business with an amount of € 3,282 thsd. were reclassifi ed from the category "fi nancial assets measured at fair value" to the category "loans and receivables" in the fi rst nine months of 2o14. Due to changes in regulatory requirements, bonds with a carrying amount of € 9,55o thsd. and a fair value of € 1o,692 thsd. also were reclassifi ed from the category "held-to-maturity investments" to the category "available-for-sale fi nancial assets".
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 2o13.
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, ad ministration 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) |
Regrouping between level 1 and level 2
On the reporting reference date the bonds to be held to maturity with a carrying amount of € 12,944 thsd. and a fair value of € 12,49o thsd. were transferred from level 1 to level 2 as the quoted in-market prices for these bonds were no longer regularly observable.
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.
On March 31, 2o14 Muhyddin Suleiman, Executive Board member of MLP AG and of MLP Finanzdienstleistungen AG, with responsibility for sales, resigned from both executive bodies.
There were no signifi cant changes compared to December 31, 2o13.
There were no appreciable events after the balance sheet date affecting the MLP Group's fi nancial or asset situation.
Wiesloch, November 12, 2o14
MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Manfred Bauer Reinhard Loose
Dr. Uwe Schroeder-Wildberg (Chairman, appointed until December 31, 2o17)
Manfred Bauer (Product Management, appointed until April 3o, 2o2o)
Reinhard Loose (Controlling, IT, Procurement, Accounting, Risk Management, appointed until January 31, 2o19)
Muhyddin Suleiman (Sales, until March 31, 2o14)
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 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]
22 MLP share, SDAX and DAXsector Financial Services, January to September 2014
23 Key fi gures of the MLP share
Februar 26, 2o15 Publication of the results for the fi nancial year 2o14. Annual press conference and analyst conference in Frankfurt.
March 26, 2o15 Publication of the Annual Report for the fi nancial year 2o14.
May 12, 2o15 Publication of the results for the fi rst quarter 2o15.
June 18, 2o15 Annual General Meeting (AGM) of MLP AG in Mannheim. MLP AG holds its AGM at the Rosengarten in Mannheim.
August 13, 2o15 Publication of the results for the fi rst half-year and the second quarter 2o15.
Publication of the results for the fi rst nine months and third quarter 2o15.
More:
www.mlp-ag.com, Investor Relations, Calendar
prognosis
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.
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.
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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