Quarterly Report • Aug 14, 2014
Quarterly Report
Open in ViewerOpens in native device viewer
Interim Group Report for the fi rst half-year and the second quarter 2o14
| All fi gures in € million | 2nd quarter 2014 |
2nd quarter 2013 |
1st half-year 2014 |
1st half-year 2013 |
Change in % |
|---|---|---|---|---|---|
| MLP Group | |||||
| Total revenue | 108.1 | 107.9 | 227.9 | 224.3 | 1.6% |
| Revenue | 103.9 | 103.7 | 216.8 | 216.0 | 0.4% |
| Other revenue | 4.2 | 4.2 | 11.2 | 8.3 | 34.9% |
| Earnings before interest and tax (EBIT) | 1.1 | 0.9 | 5.5 | 4.9 | 12.2% |
| EBIT margin (%) | 1.0% | 0.8% | 2.4% | 2.2% | – |
| Net profi t | 1.1 | 1.1 | 4.5 | 4.2 | 7.1% |
| Earnings per share (diluted/undiluted) in € | 0.01 | 0.01 | 0.04 | 0.04 | 0.0% |
| Cashfl ow from operating activities | –1.2 | 9.9 | 27.5 | 72.8 | –62.2% |
| Capital expenditure | 3.6 | 4.6 | 8.8 | 9.5 | –7.4% |
| Shareholders' equity | – | – | 359.3 | 1 374.5 |
–4.1% |
| Equity ratio (%) | – | – | 23.1% | 1 24.4% |
– |
| Balance sheet total | – | – | 1,556.0 | 1 1,536.9 |
1.2% |
| Clients | – | – | 839,300 | 1 830,300 |
1.1% |
| Consultants | – | – | 1,959 | 1 1,998 |
–2.0% |
| Branch offi ces | – | – | 166 | 169 | –1.8% |
| Employees | – | – | 1,547 | 1,558 | –0.7% |
| Arranged new business | |||||
| Old-age provisions (premium sum) | 740.0 | 720.0 | 1,370.0 | 1,270.0 | 7.9% |
| Loans mortgages | 348.3 | 436.8 | 697.8 | 798.1 | –12.6% |
| Assets under management in € billion | – | – | 25.3 | 1 24.5 |
3.3% |
¹ As of December 31, 2013
• Total revenue rises to € 227.9 million in the fi rst half-year
the diffi cult market conditions
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 half-year and the second 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 € 25.3 billion and supports about 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, fi nancial investment, 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 from 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 in the second quarter proved to be more subdued. Although still supported by domestic demand, estimates issued by the German Institute for Economic Research (DIW) indicate that the economy grew by just o.2% (Q1: o.7%) in the second quarter. The situation on the labour market remained positive with the unemployment rate falling to 6.5% at the end of June compared to 7.1% in March.
The German market for old-age provision products continues to be characterised by signifi cant hesitancy – due, in particular, to the protracted low interest rate environment and the negative reports about life insurers and their products. Furthermore, in June the extensive public discussions concerning the Life Insurance Reform Act (LVRG) contributed to a wait-and-see stance on the part of many clients.
Around 25 percent of Germans are apparently less interested in private old-age provision than they were in the past and approximately 26 percent currently ignore this topic completely – such were two of the fi ndings of the "Old-Age Provision Report Germany 2o14", a representative study conducted by the Research Center for Financial Services, Steinbeis University in Berlin and Sparda-Bank, Hamburg.
However, according to the same study, the market potential remains large: The majority of respondents – around 82 percent – consider supplementary private provision to be a necessity but so far only around 5o percent of the population has made use of professional consultation and advice on this topic.
According to fi gures released by the German Insurers Association (GDV) the volume of brokered new business in the market fell by about 6% in the period from January to June 2o14 compared to the corresponding timeframe in the previous year.
Private health insurance in Germany remains bound within a diffi cult market environment due to discussions about the introduction of a citizens' insurance during the run-up to the parliamentary elections in 2o13 as well as in view of the changes in the tariff landscape following the changeover to unisex rates at the end of 2o12.
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.
At June 3o, 2o14, assets under management in the overall market rose to € 2,239 billion (March 31, 2o14: € 2,159 billion). This growth continued to be primarily driven by institutional business. In retail funds, low-risk investments in particular registered net infl ows, whereas mutual equity funds recorded outfl ows amounting to € 1.6 billion.
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).
The MLP Group was an early adopter of numerous requirements that the legislator is now stipulating through new sets of rules and standards. We consider this to provide us with a clear competitive edge over other market participants. In the coming years the legislator will further tighten the requirements which will, in turn, provide further stimulus for consolidation of the market.
In the period from January to June 2o14 total revenue rose slightly compared to the same period in the previous year. Despite the continuingly diffi cult market environment we were able to record revenue increases in the areas of old-age provision, wealth management and non-life insurance. Positive development was also achieved in other commission and fees in which the fi rst successes from the expanded real estate offering launched in March were evident. In health insurance, business performance remains dominated by the diffi cult market conditions. Here, revenue fell below the level of the previous year and behind our own expectations.
When viewed in isolation, the second quarter also showed a slight rise in total revenue. Specifi cally, we recorded revenue increases in wealth management and in non-life insurance as well as achieving signifi cant growth in other commission and fees. In old-age provision, revenue fell slightly compared to the same period in the previous year. Private health insurance revenue fell considerably.
As is usual in the MLP business model, the fi rst half-year only makes a relatively small contribution to the full-year result due to the seasonality of our business performance. Major portions of the overall result are traditionally achieved in the second half-year – and especially in the fi nal quarter.
There were no signifi cant changes in the corporate structure during the period under review.
In the fi rst half-year the number of consultants fell slightly. Due to the usual seasonal decline in the fi rst three months and the continuingly challenging recruitment environment, the number of consultants at June 3o decreased slightly to 1,959. The turnover rate stood at 1o.2% and thus remained well below our target range of a maximum of 12% to 15%. The junior staff programmes that were introduced in 2o13 in order to attract new consultants should have a positive effect over the medium term.
In the second quarter MLP opened a further two new branches in the university segment – one in Düsseldorf and one in Essen. Together with the new branches in Münster and Frankfurt, this brings the total number of new openings in the fi rst half-year to four. Through these measures we aim 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 half-year, rising by 12,3oo which exceeded the increase achieved in the same period of the previous year (11,7oo). Consequently, the total number of clients rose to 839,3oo (March 31, 2o14: 836,2oo).
Since our consulting fi rm is a service provider, we are not engaged in any research and development in the classic sense.
In the period from January to June 2o14 total revenue of the MLP Group rose slightly to € 227.9 million (€ 224.3 million). Revenue from commissions and fees totalled € 2o5.4 million (€ 2o4.5 million) and was thereby also marginally above the same period of the previous year. Interest income remained around the previous year's level and amounted to € 11.4 million (€ 11.5 million). Other revenue increased to € 11.2 million compared to € 8.3 million in the previous year. This rise was due, in part, to the positive effect on MLP of a court ruling with respect to a negative declaratory judgement against several former FERI shareholders. This already occurred in the fi rst quarter.
The revenue breakdown by consulting area shows a continuation of the positive tendency in old-age provision from the fi rst quarter, albeit with slightly reduced momentum. In the fi rst six months, new business brokered by MLP rose by around 8% to € 1.37 billion (€ 1.27 billion); viewing the second quarter in isolation, the increase amounted to 3%. Occupational provision accounted for 14% of this fi gure, compared to 13% in the previous year. Revenue from commission and fees totalled € 84.3 million (€ 83.5 million).
Despite the strong development in the same period of the previous year, revenue in wealth management rose to € 67.o million (€ 65.3 million). Assets under management also continued to develop positively, climbing from € 24.4 billion at March 31, 2o14 to € 25.3 billion at the end of the half-year (see chart).
Revenue in non-life insurance also showed pleasing progress, increasing by 7% in the period under review to € 24.1 million (€ 22.5 million). Revenue in loans and mortgages amounted to € 5.9 million and thus remained at the previous year's level (€ 6.o million); additional earnings from the joint venture company MLP Hyp amounted to € o.4 million (€ o.3 million). Other commission and fees developed very positively in which the initial successes from the expanded real estate offering launched in March were evident. Here revenue rose by 82% from € 1.7 million to € 3.1 million.
The market conditions in health insurance continue to be characterised by great hesitancy. Against this negative backdrop, MLP recorded a fall in revenue from commissions and fees which decreased from € 25.6 million to € 21.1 million.
Viewing the second quarter in isolation, total revenue improved slightly to € 1o8.1 million (€ 1o7.9 million). Here, revenue from commissions and fees also rose slightly to € 98.3 million (€ 98.1 million). Interest income and other revenue amounted to € 5.6 million (€ 5.6 million) and € 4.2 million (€ 4.2 million) respectively and thus remained at the previous year's levels.
The breakdown by consulting area in the second quarter shows a slight decrease in revenue in old-age provision from € 44.6 million to € 44.1 million. This development primarily refl ects the intensive public debate in the second quarter concerning the introduction of the LVRG. The diffi cult market conditions led to a fall in revenue in health insurance from € 11.7 million to € 9.7 million. Wealth management continued to develop positively – here revenue rose to € 34.4 million (€ 33.6 million). Revenue in non-life insurance also developed positively, increasing by 23% to € 5.3 million (€ 4.3 million). Revenue from other commission and fees also grew considerably and amounted to € 1.8 million after € 1.o million in the previous year.
The distribution of revenue from commissions and fees highlights the successful diversifi cation of the MLP Group and contributes signifi cantly towards highly stable revenue development.
Commission expenses primarily contain performance-linked commission payments to our consultants. In addition, this item also includes commission expenses in the FERI segment which 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, payments to the deposit bank and for fund sales. In the fi rst half-year commission expenses totalled € 96.6 million (€ 94.6 million). Interest expenses fell to € 1.6 million (€ 2.9 million).
Viewing the second quarter in isolation, revenue costs fell slightly from € 46.7 million to € 46.2 million. Here, commission expenses amounted to € 45.5 million (€ 45.5 million) and thus remained at the level of the previous year. Interest expenses reduced to € o.7 million (€ 1.2 million).
In the period from January to June 2o14 administration costs (defi ned as the sum of personnel costs, depreciation and amortisation as well as other operating expenses) increased slightly to € 124.6 million (€ 122.2 million). Here, personnel costs stood at € 52.8 million (€ 52.8 million) and thus remained at the previous year's level. This fi gure includes a one-off exceptional cost. Depreciation and amortisation rose slightly to € 6.7 million (€ 5.7 million) due to investments undertaken in the previous year which then lead to corresponding depreciation in the following years. Other operating expenses increased compared to the previous year and amounted to € 65.1 million (€ 63.7 million). Overall, around € 1.4 million of the previously announced temporary expenses relating to the ongoing growth initiative were incurred in the fi rst half-year.
Viewing the second quarter in isolation, administration costs rose slightly from € 6o.6 million to € 61.1 million. Within this fi gure, personnel expenses reduced to € 25.1 million (€ 26.1 million). Depreciation and amortisation as well as other operating expenses rose slightly to € 3.3 million (€ 2.9 million) and € 32.7 million (€ 31.6 million) respectively.
In the fi rst six months EBIT (earnings before interest and tax) increased to € 5.5 million (€ 4.9 million) due to slightly higher total revenue. The fi nance cost reduced marginally from € o.o million to € –o.1 million. The tax rate stood at 16.2% due to higher proportional earnings from the Luxembourg-based FERI subsidiary. Group net profi t in the fi rst half-year rose to € 4.5 million following € 4.2 million in the previous year. The diluted and basic earnings per share were € o.o4.
Viewing the second quarter in isolation, EBIT climbed from € o.9 million to € 1.1 million. The fi nance cost reduced slightly to € –o.1 million (€ o.o million). Group net profi t amounted to € 1.1 million (€ 1.1 million) and thus remained at the level of the previous year.
| All fi gures in € million | 1st half-year 2014 |
1st half-year 2013 |
Change in % |
|---|---|---|---|
| Total revenue | 227.9 | 224.3 | 1.6% |
| Gross profi t ¹ | 129.7 | 126.8 | 2.3% |
| Gross profi t margin (%) | 56.9% | 56.5% | 0.7% |
| EBIT | 5.5 | 4.9 | 12.2% |
| EBIT margin (%) | 2.4% | 2.2% | 9.1% |
| Finance cost | –0.1 | 0.0 | – |
| EBT | 5.4 | 5.0 | 8.0% |
| EBT margin (%) | 2.4% | 2.2% | 9.1% |
| Income taxes | –0.9 | –0.7 | 28.6% |
| Net profi t | 4.5 | 4.2 | 7.1% |
| Net margin (%) | 2.0% | 1.9% | 5.3% |
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 June 3o, 2o14 liabilities towards clients and banks from the banking business which totalled € 1,o23.3 million (Dec. 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 € 1,oo1.5 million (Dec. 31, 2o13: € 981.7 million).
No capital measures were undertaken during the period under review.
Cash fl ow from operating activities fell to € 27.5 million compared to € 72.8 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 € –48.o million to € –23.1 million. In the reporting period, matured net term deposits with a term of more than three months and amounting to € 2o.o million were not reinvested, whereas in the same period of the previous year no term deposits matured.
At the end of the fi rst half-year 2o14, the Group had cash holdings amounting to around € 123 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 | 2nd quarter 2014 |
2nd quarter 2013 |
1st half-year 2014 |
1st half-year 2013 |
|---|---|---|---|---|
| Cash and cash equivalents at the beginning of period |
52.9 | 120.0 | 61.4 | 60.7 |
| Cashfl ow from operating activities | –1.2 | 9.9 | 27.5 | 72.8 |
| Cashfl ow from investing activities | 14.1 | –44.4 | –23.1 | –48.0 |
| Cashfl ow from fi nancing activities | –17.3 | –34.5 | –17.3 | –34.5 |
| Change in cash and cash equivalents | –4.4 | –69.1 | –12.9 | –9.7 |
| Cash and cash equivalents at the end of period | 48.5 | 50.9 | 48.5 | 50.9 |
In the fi rst half-year 2o14 the investment volume of the MLP Group decreased slightly to € 8.8 million (€ 9.5 million). The major portion of the 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 June 3o, 2o14 the balance sheet total of the MLP Group amounted to € 1,556.o million (Dec. 31: € 1,536.9 million). On the assets side of the balance sheet there were changes primarily to the following items: compared to the year end, receivables from clients in the banking business reduced from € 491.6 million to € 464.8 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 € 536.7 million (Dec. 31, 2o13: € 49o.1 million). This was essentially due to an increase in investment in on-demand monies. At the reporting reference date, fi nancial assets climbed € 163.8 million (Dec. 31, 2o13: € 146.1 million) while cash and cash equivalents decreased from € 46.4 million to € 31.6 million. Both changes mainly result from investment redeployment in other asset classes. Tax refund claims rose to € 31.1 million (Dec. 31, 2o13: € 2o.6 million). Other receivables and assets fell from € 1o9.2 million to € 93.6 million. This item essentially comprises commission receivables from insurance companies for whom we have brokered insurance policies. Due to the traditionally stronger 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.
| June 30, | Dec. 31, | Change | |
|---|---|---|---|
| All fi gures in € million | 2014 | 2013 | in % |
| Intangible assets | 156.5 | 155.3 | 0.8% |
| Property, plant and equipment | 66.3 | 65.8 | 0.8% |
| Investment property | 7.3 | 7.3 | 0.0% |
| Investments accounted for using the equity method | 2.1 | 2.5 | –16.0% |
| Deferred tax assets | 2.3 | 2.0 | 15.0% |
| Receivables from clients in the banking business | 464.8 | 491.6 | –5.5% |
| Receivables from banks in the banking business | 536.7 | 490.1 | 9.5% |
| Financial assets | 163.8 | 146.1 | 12.1% |
| Tax refund claims | 31.1 | 20.6 | 51.0% |
| Other receivables and other assets | 93.6 | 109.2 | –14.3% |
| Cash and cash equivalents | 31.6 | 46.4 | –31.9% |
| Total | 1,556.0 | 1,536.9 | 1.2% |
At the reference date on June 3o, 2o14, the equity capital of the MLP Group stood at € 359.3 million (Dec. 31, 2o13: € 374.5 million). The changes are largely attributable to the dividend pay-out for the fi nancial year 2o13. The equity capital situation of MLP therefore remains good with a balance sheet equity ratio at the reference date of 23.1% (Dec. 31, 2o13: 24.4%).
Provisions at the end of the half-year fell to € 76.8 million (Dec. 31, 2o13: € 85.1 million) which was mainly due to the reduction in provisions for client support commission after this had been paid out according to schedule during the course of the second quarter. Liabilities due to clients from the banking business increased from € 946.5 million to € 1,oo9.9 million and primarily refl ect a further increase in client deposits. Liabilities due to fi nancial institutions from the banking business also increased, rising to € 13.4 million at the reference date (Dec. 31, 2o13: € 9.9 million). Other liabilities fell from € 1o6.6 million to € 82.8 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 sharply at the balance sheet reference date on December 31 and then fall again in the following quarters.
| All fi gures in € million | June 30, 2014 |
Dec. 31, 2013 |
Change in % |
|---|---|---|---|
| Shareholders' equity | 359.3 | 374.5 | –4.1% |
| Provisions | 76.8 | 85.1 | –9.8% |
| Deferred tax liabilities | 8.0 | 8.6 | –7.0% |
| Liabilities due to clients in the banking business | 1,009.9 | 946.5 | 6.7% |
| Liabilities due to bank in the banking business | 13.4 | 9.9 | 35.4% |
| Tax liabilities | 5.8 | 5.7 | 1.8% |
| Other liabilities | 82.8 | 106.6 | –22.3% |
| Total | 1,556.0 | 1,536.9 | 1.2% |
Due to the exceptional burdens in the market environment we have decided to use a scenariobased approach in the forecast at EBIT level in the Annual Report 2o13. Further details are contained on pages 93 to 97 of the MLP Group's Annual Report 2o13. After conclusion of the fi rst half-year we remain within the framework of this forecast (for further details see forecast).
Furthermore we provided a qualitative-comparative estimate for our revenue development. Accordingly, in the base scenario, MLP anticipated signifi cant revenue growth in old-age provision and in health insurance in 2o14. In addition, following the successful development in the past few years, we expected to also achieve slight revenue increase in wealth management in 2o14.
In the fi rst half-year MLP recorded revenue growth both in wealth management as well as in old-age provision. However, in health insurance revenue decreased and thus remains below our expectations. Despite the diffi cult market MLP nevertheless anticipates a pick-up in health insurance for the second half-year.
In the fi rst half-year, administration costs were burdened by one-off exceptional items but they otherwise ran operatively according to plan.
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 half-year total revenue in the fi nancial services segment amounted to € 176.9 million (€ 177.9 million) and thus remained only slightly below the previous year's level. Whereas sales revenue of € 169.2 million (€ 171.5 million) fell slightly, other revenue rose from € 6.4 million to € 7.7 million – largely due to the release of provisions.
Commission expenses amounted to € 69.2 million (€ 69.5 million) and were thus slightly below the level of the previous year. Personnel expenses remained almost unchanged at € 36.9 million (€ 36.8 million). Depreciation and amortisation increased from € 3.5 million to € 4.5 million. These depreciations followed higher investments in the previous year – particularly in IT. Other operating expenses totalled € 6o.5 million (€ 59.2 million). This rise was related to IT changeover measures at employee workstations. EBIT amounted to € 4.6 million after € 6.3 million in the same period of the previous year. The fi nance cost reduced to € o.o million after € o.2 million in the previous year. EBT (earnings before tax) therefore totalled € 4.5 million (€ 6.4 million).
When viewing the second quarter in isolation, total revenue decreased slightly from € 84.2 million to € 82.5 million. Here, sales revenue amounted to € 79.8 million and was thus only marginally below the previous year (€ 81.2 million). Other revenue stood at € 2.8 million (€ 3.o million). With costs remaining almost unchanged, EBIT fell to € –o.2 million (€ 1.4 million).
In the period from January to June 2o14 total revenue in the FERI segment rose from € 49.3 million to € 5o.9 million. Commission expenses increased to € 28.8 million (€ 27.4 million). In the reporting period personnel expenses fell from € 14.2 million to € 12.7 million due to partially one-off additional expenses incurred in the previous year. Other operating expenses amounted to € 4.9 million following € 5.4 million in the same period of the previous year. Consequently, EBIT climbed to € 3.5 million (€ 1.3 million) and thus more than doubled. EBT improved to € 3.4 million (€ 1.2 million).
In the second quarter total revenue increased slightly to € 25.9 million (€ 25.2 million). Commission expenses also rose slightly to € 14.7 million (€ 13.9 million). Compared to the previous year, personnel expenses in the second quarter reduced to € 6.5 million (€ 7.1 million). Other operating expenses also fell and amounted to € 2.3 million (€ 3.o million). EBIT thus climbed signifi cantly to € 1.9 million following € o.8 million in the previous year. EBT improved similarly and amounted to € 1.9 million (€ o.7 million).
In the fi rst half-year 2o14 total revenue in the holding segment rose to € 7.3 million (€ 5.1 million), mainly due to a positive effect on MLP resulting from the negative declaratory judgement against several former FERI shareholders. This already occurred in the fi rst quarter. Personnel expenses increased to € 3.3 million (€ 1.7 million) due to one-off exceptional costs already incurred in the fi rst quarter. Other operating expenses rose slightly from € 4.6 million to € 5.4 million. EBIT amounted to € –2.5 million (€ –2.5 million), thus remaining at the level of the previous year. The fi nance cost of € –o.1 million (€ –o.1 million) also stayed constant. Halfyear EBT came in at € –2.6 million (€ –2.6 million).
When viewing the second quarter in isolation, total revenue increased to € 3.2 million (€ 2.5 million). Personnel expenses totalled € o.7 million (€ o.8 million) and thus remained slightly below the previous year. Other operating expenses amounted to € 2.7 million (€ 2.4 million). EBIT improved to € –o.6 million after € –1.2 million in the previous year.
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 June 3o, 2o14, MLP employed 1,547 people – 11 fewer than in the same period of the previous year.
| Segment | June 30, 2014 | June 30, 2013 |
|---|---|---|
| Financial services | 1,308 | 1,301 |
| FERI | 232 | 248 |
| Holding | 7 | 9 |
| Total | 1,547 | 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 Group-wide 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 half-year 2o14.
The MLP Group has adequate liquidity. At the balance sheet reference date on June 3o, 2o14, our core capital ratio stood at 13.7% (March 31, 2o14: 13.8%) 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 the 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.
At the beginning of July 2o14 the lower and upper houses of the German parliament (Bundestag and Bundesrat) passed the LVRG. Certain changes have come into effect in the short term by virtue of their respective announcement in the Law Gazette, while other sections will be implemented into law at January 1, 2o15. The legislation essentially comprises the following amendments:
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. 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 operate 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 will probably become more expensive from the coming year such that – where there is a corresponding client need – contract conclusion in 2o14 may be benefi cial. However, there is a risk that this effect will become clearly overshadowed by the ongoing fundamental discussions about old-age provision and the low nominal interest rate.
In private health insurance, analysis conducted by experts at the rating agency Assekurata in May 2o14 indicates that, throughout the industry as a whole, the number of citizens with full private insurance in 2o14 is in decline for the third consecutive year.
The fi nancial year 2o13 clearly demonstrated the prevalence of even more diffi cult 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. Also after conclusion of the fi rst half-year, we remain within the framework of this forecast.
The fi rst half-year 2o14 provided further evidence of the continuingly diffi cult market conditions. Throughout the industry as a whole, new business in old-age provision fell by around 6% and in private health insurance domain experts expect the number of citizens with full private health insurance to decrease in 2o14 for the third consecutive year.
Our base scenario assumed that the framework conditions would start to improve. However, as the industry fi gures show, no such improvement has yet occurred in health insurance or oldage provision. Further risk factors include the, in part, very critical public discussions about life insurance companies and their products.
Against this backdrop MLP expects full-year EBIT in the fi nancial year 2o14 to range within a corridor between the lower forecast scenario (€ 5o million) and the base scenario (€ 65 million). For this year it thus remains our objective to achieve signifi cant growth in total revenue and EBIT.
The second half-year and especially the fi nal quarter make a very decisive contribution to our full-year results as MLP traditionally generates by far the largest portion of its profi t in the period from October to December. From a current perspective, for the full-year revenue we continue to expect a slight increase in wealth management and to grow strongly in old-age provision. In private health insurance we anticipate that we will see business pickup in the second half-year but, at best, we expect to achieve stable revenue.
We will continue to have good fi nancial strength, which we intend to utilise together with our positioning as an independent consulting fi rm in order to further expand our competitive position. Consequently, we continue to expect that the overall development of the MLP Group will be clearly positive.
During the fi rst half of the year global equity markets were marked by volatility. In particular, the ongoing crisis in the Ukraine and weak import data from China put pressure on the German benchmark index DAX in April, pushing it down to its low for the quarter of 9,173 points on April 15. Subsequent positive economic data from the USA and especially the continuation of the expansionary monetary policy by the European Central Bank triggered a rise in the major indices which took them to new highs. The reduction of the reference interest rate and negative deposit rates left investors with few investment alternatives and subsequently drove the DAX to a historic high on June 2o of 1o,5o1 points. However the equity market was unable to maintain this momentum through to the end of the half-year. The Ukraine crisis, the unrest in Iraq and Syria as well as the rising oil price returned to the fore, leading to a fall in the DAX down to 9,9o2 points on June 3o – and thus below the historic 1o,ooo points level.
Following its volatile price development in the fi rst quarter the MLP AG share stabilised well above the previous lows and ranged within a price corridor of € 4.8o and € 5.oo. In the run-up to the Annual General Meeting trading volumes and price picked up again such that the share rose to € 5.34 on June 4. As a result of the ex-dividend markdown and due to a general deterioration in the market environment the share price retreated below the € 5.oo level towards the end of the half-year, closing at € 4.92 at the end of trading on June 3o, 2o14.
Further information about the MLP share is available on our Investor Relations page on the internet www.mlp-ag.com in the section "MLP share".
| 1st half-year 2014 |
1st half-year 2013 |
|
|---|---|---|
| Share price at the beginning of the year | € 5.26 | € 5.08 |
| Share price high | € 6.06 | € 6.64 |
| Share price low | € 4.57 | € 4.40 |
| Share price at the end of the quarter | € 4.92 | € 4.68 |
| Dividend for the previous year | € 0.16 | € 0.32 |
| Market capitalisation (end of reporting period) | € 530,758,470.96 | € 504,436,302.90 |
Shareholders at the Annual General Meeting on June 5, 2o14 voted almost unanimously (99.99%) to approve the proposal by the Executive and Supervisory Boards to pay a dividend of € o.16 per share, equating to a pay-out ratio of 68% of net profi t.
The Executive and Supervisory Boards were also discharged by an almost unanimous vote. In total, over 6oo shareholders attended the Annual General Meeting and represented around 74% of the share capital. Information about all aspects of the Annual General Meeting is available on the internet at www.mlp-agm.com.
| 2nd quarter | 2nd quarter | 1st half-year | 1st half-year | ||
|---|---|---|---|---|---|
| All fi gures in €'000 | Notes | 2014 | 2013 | 2014 | 2013 |
| Revenue | (6) | 103,944 | 103,697 | 216,765 | 216,017 |
| Other revenue | 4,181 | 4,227 | 11,151 | 8,309 | |
| Total revenue | 108,126 | 107,923 | 227,916 | 224,326 | |
| Commission expenses | (7) | –45,472 | –45,498 | –96,644 | –94,630 |
| Interest expenses | –742 | –1,216 | –1,608 | –2,894 | |
| Personnel expenses | (8) | –25,052 | –26,090 | –52,849 | –52,783 |
| Depreciation and impairments | –3,347 | –2,875 | –6,654 | –5,731 | |
| Other operating expenses | (9) | –32,713 | –31,577 | –65,073 | –63,681 |
| Earnings from investments accounted for using the equity method | 266 | 219 | 419 | 328 | |
| Earnings before interest and tax (EBIT) | 1,066 | 887 | 5,507 | 4,936 | |
| Other interest and similar income | 142 | 148 | 300 | 396 | |
| Other interest and similar expenses | –223 | –177 | –421 | –369 | |
| Finance cost | (10) | -81 | -29 | -121 | 27 |
| Earnings before tax (EBT) | 985 | 858 | 5,387 | 4,962 | |
| Income taxes | 157 | 201 | –874 | –749 | |
| Net profi t | 1,142 | 1,060 | 4,513 | 4,213 | |
| Of which attributable to | |||||
| owners of the parent company | 1,142 | 1,060 | 4,513 | 4,213 | |
| Earnings per share in €1 | |||||
| basic/diluted | 0.01 | 0.01 | 0.04 | 0.04 |
Basis of calculation: Average number of shares at June 30, 2014: 107,877,738 .
| All fi gures in €'000 | 2nd quarter 2014 |
2nd quarter 2013 |
1st half-year 2014 |
1st half-year 2013 |
|---|---|---|---|---|
| Net profi t | 1,142 | 1,060 | 4,513 | 4,213 |
| Gains/losses due to the revaluation of defi ned benefi t obligations | –2,912 | –1,435 | –4,884 | –1,435 |
| Deferred taxes on non-reclassifi able gains/losses | 844 | 417 | 1,415 | 417 |
| Non-reclassifi able gains/losses | –2,068 | –1,018 | –3,469 | –1,018 |
| Gains/losses from changes in the fair value of available-for-sale securities | 676 | –120 | 1,351 | 120 |
| Deferred taxes on non-reclassifi able gains/losses | –129 | –95 | –340 | –93 |
| Reclassifi able gains/losses | 547 | –215 | 1,012 | 28 |
| Other comprehensive income | –1,522 | –1,233 | –2,457 | –991 |
| Total comprehensive income | –379 | –173 | 2,056 | 3,222 |
| Of which attributable to | ||||
| owners of the parent company | –379 | –173 | 2,056 | 3,222 |
| All fi gures in €'000 | Notes | June 30, 2014 | Dec. 31, 2013 |
|---|---|---|---|
| Intangible assets | 156,499 | 155,267 | |
| Property, plant and equipment | 66,304 | 65,822 | |
| Investment property | 7,290 | 7,325 | |
| Investments accounted for using the equity method | 2,064 | 2,547 | |
| Deferred tax assets | 2,325 | 1,974 | |
| Receivables from clients in the banking business | (11) | 464,795 | 491,570 |
| Receivables from banks in the banking business | (11) | 536,666 | 490,110 |
| Financial assets | (12) | 163,762 | 146,082 |
| Tax refund claims | 31,085 | 20,622 | |
| Other receivables and assets | (13) | 93,585 | 109,164 |
| Cash and cash equivalents | 31,584 | 46,383 | |
| Total | 1,555,958 | 1,536,865 |
| All fi gures in €'000 | Notes | June 30, 2014 | Dec. 31, 2013 |
|---|---|---|---|
| Shareholders' equity | (14) | 359,273 | 374,477 |
| Provisions | 76,809 | 85,138 | |
| Deferred tax liabilities | 8,026 | 8,628 | |
| Liabilities due to clients in the banking business | 1,009,868 | 946,484 | |
| Liabilities due to banks in the banking business | 13,389 | 9,924 | |
| Tax liabilities | 5,844 | 5,654 | |
| Other liabilities | (13) | 82,750 | 106,560 |
| Total | 1,555,958 | 1,536,865 |
| All fi gures in €'000 | 1st half-year 2014 |
1st half-year 2013 |
|---|---|---|
| Cash fl ow from operating activities | 27,477 | 72,823 |
| Cash fl ow from investing activities | –23,106 | –48,044 |
| Cash fl ow from fi nancing activities | –17,260 | –34,521 |
| Change in cash and cash equivalents | –12,889 | –9,742 |
| Cash and cash equivalents at the end of the period | 48,475 | 50,940 |
| All fi gures in €'000 | 2nd quarter 2014 |
2nd quarter 2013 |
|---|---|---|
| Cash fl ow from operating activities | –1,221 | 9,865 |
| Cash fl ow from investing activities | 14,074 | –44,447 |
| Cash fl ow from fi nancing activities | –17,260 | –34,521 |
| Change in cash and cash equivalents | –4,408 | –69,103 |
| Cash and cash equivalents at the end of the period | 48,475 | 50,940 |
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 | – | – | – | – | 4,213 | 4,213 |
| Other comprehensive income | – | – | 28 | –1,018 | – | –991 |
| Total comprehensive income | – | – | 28 | –1,018 | 4,213 | 3,222 |
| As of June 30, 2013 | 107,878 | 142,184 | 410 | –4,666 | 107,053 | 352,857 |
| 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 | – | – | – | – | 4,513 | 4,513 |
| Other comprehensive income | – | – | 1,012 | –3,469 | – | –2,457 |
| Total comprehensive income | – | – | 1,012 | –3,469 | 4,513 | 2,056 |
| As of June 30, 2014 | 107,878 | 142,184 | 1,849 | –8,219 | 115,582 | 359,273 |
* 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 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 12.
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 second half-year than in the fi rst half-year.
There were no signifi cant changes compared to December 31, 2o13.
| Financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 2nd quarter 2014 |
2nd quarter 2013 |
|
| Revenue | 79,759 | 81,170 | |
| of which total inter-segment revenue | 689 | 1,224 | |
| Other revenue | 2,765 | 3,002 | |
| of which total inter-segment revenue | 506 | 468 | |
| Total revenue | 82,524 | 84,172 | |
| Commission expenses | –31,491 | –32,710 | |
| Interest expenses | –743 | –1,216 | |
| Personnel expenses | –17,896 | –18,237 | |
| Depreciation and impairments | –2,322 | –1,767 | |
| Other operating expenses | –30,587 | –29,093 | |
| Earnings from investments accounted for using the equity method | 266 | 219 | |
| Segment earnings before interest and tax (EBIT) | –249 | 1,367 | |
| Other interest and similar income | 48 | 93 | |
| Other interest and similar expenses | –80 | -30 | |
| Finance cost | –32 | 63 | |
| Earnings before tax (EBT) | –281 | 1,430 | |
| Income taxes | |||
| Net profi t | |||
| FERI | Holding | Consolidation | Total | ||||
|---|---|---|---|---|---|---|---|
| 2nd quarter 2014 |
2nd quarter 2013 |
2nd quarter 2014 |
2nd quarter 2013 |
2nd quarter 2014 |
2nd quarter 2013 |
2nd quarter 2014 |
2nd quarter 2013 |
| 24,927 | 23,823 | – | – | –742 | –1,297 | 103,944 | 103,697 |
| 53 | 73 | – | – | –742 | –1,297 | – | – |
| 991 | 1,384 | 3,228 | 2,535 | –2,803 | –2,694 | 4,181 | 4,227 |
| 4 | – | 2,294 | 2,226 | –2,803 | –2,694 | – | – |
| 25,919 | 25,207 | 3,228 | 2,535 | –3,545 | –3,991 | 108,126 | 107,923 |
| –14,673 | –13,904 | – | – | 692 | 1,116 | –45,472 | –45,498 |
| – | – | – | – | 1 | 1 | –742 | –1,216 |
| –6,476 | –7,059 | –680 | –794 | – | – | –25,052 | –26,090 |
| –515 | –501 | –509 | –607 | – | – | –3,347 | –2,875 |
| –2,318 | –2,965 | –2,677 | –2,357 | 2,870 | 2,838 | –32,713 | –31,577 |
| – | – | – | – | – | – | 266 | 219 |
| 1,937 | 779 | –639 | –1,222 | 17 | –36 | 1,066 | 887 |
| 1 | – | 95 | 57 | –2 | –2 | 142 | 148 |
| –52 | –66 | –141 | –142 | 51 | 61 | –223 | –177 |
| –51 | –66 | –46 | –85 | 48 | 60 | –81 | –29 |
| 1,886 | 712 | –685 | –1,307 | 66 | 23 | 985 | 858 |
| 157 | 201 | ||||||
| 1,142 | 1,060 | ||||||
| Financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 1st half-year 2014 |
1st half-year 2013 |
|
| Revenue | 169,227 | 171,505 | |
| of which total inter-segment revenue | 1,397 | 2,479 | |
| Other revenue | 7,656 | 6,402 | |
| of which total inter-segment revenue | 1,015 | 910 | |
| Total revenue | 176,882 | 177,907 | |
| Commission expenses | –69,187 | –69,494 | |
| Interest expenses | –1,610 | –2,896 | |
| Personnel expenses | –36,908 | –36,824 | |
| Depreciation and impairments | –4,525 | –3,537 | |
| Other operating expenses | –60,501 | –59,208 | |
| Earnings from investments accounted for using the equity method | 419 | 328 | |
| Segment earnings before interest and tax (EBIT) | 4,571 | 6,276 | |
| Other interest and similar income | 120 | 287 | |
| Other interest and similar expenses | –142 | –135 | |
| Finance cost | –22 | 153 | |
| Earnings before tax (EBT) | 4,549 | 6,429 | |
| Income taxes | |||
| Net profi t | |||
| FERI | Holding | Consolidation | Total | ||||
|---|---|---|---|---|---|---|---|
| 1st half-year 2014 |
1st half-year 2013 |
1st half-year 2014 |
1st half-year 2013 |
1st half-year 2014 |
1st half-year 2013 |
1st half-year 2014 |
1st half-year 2013 |
| 49,061 | 47,128 | – | – | –1,523 | –2,616 | 216,765 | 216,017 |
| 125 | 137 | – | – | –1,523 | –2,616 | – | – |
| 1,839 | 2,172 | 7,272 | 5,093 | –5,615 | –5,358 | 11,151 | 8,309 |
| 4 | – | 4,596 | 4,448 | –5,615 | –5,358 | – | – |
| 50,900 | 49,300 | 7,272 | 5,093 | –7,138 | –7,974 | 227,916 | 224,326 |
| –28,763 | –27,364 | – | – | 1,307 | 2,228 | –96,644 | –94,630 |
| – | – | – | – | 1 | 1 | –1,608 | –2,894 |
| –12,654 | –14,243 | –3,287 | –1,716 | – | – | –52,849 | –52,783 |
| –1,020 | –980 | –1,108 | –1,213 | – | – | –6,654 | –5,731 |
| –4,929 | –5,402 | –5,362 | –4,647 | 5,719 | 5,576 | –65,073 | –63,681 |
| – | – | – | – | – | – | 419 | 328 |
| 3,533 | 1,311 | –2,486 | –2,483 | –111 | –169 | 5,507 | 4,936 |
| 1 | 1 | 191 | 172 | –12 | –65 | 300 | 396 |
| –100 | –123 | –285 | –285 | 106 | 174 | –421 | –369 |
| –99 | –122 | –94 | –113 | 94 | 108 | –121 | 27 |
| 3,434 | 1,190 | –2,580 | –2,596 | –17 | –60 | 5,387 | 4,962 |
| –874 | –749 | ||||||
| 4,513 | 4,213 |
| All fi gures in €'000 | 2nd quarter 2014 |
2nd quarter 2013 |
1st half-year 2014 |
1st half-year 2013 |
|---|---|---|---|---|
| Old-age provision | 44,128 | 44,567 | 84,260 | 83,510 |
| Wealth management | 34,400 | 33,571 | 66,950 | 65,288 |
| Non-life insurance | 5,319 | 4,309 | 24,128 | 22,531 |
| Health insurance | 9,720 | 11,676 | 21,100 | 25,556 |
| Loans and mortgages | 2,976 | 3,048 | 5,902 | 5,956 |
| Other commission and fees | 1,794 | 950 | 3,058 | 1,697 |
| Commission and fees | 98,337 | 98,120 | 205,398 | 204,538 |
| Interest income | 5,607 | 5,576 | 11,367 | 11,479 |
| Total | 103,944 | 103,697 | 216,765 | 216,017 |
In the period from January 1 to June 3o, 2o14 the commission expenses rose from € 94,63o thsd. to € 96,644 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 June 3o, 2o14 compared to the same period of the previous year from € 52,783 thsd. to € 52,849 thsd. For further explanations please refer to the section "Personnel" of the Group interim management report.
At June 3o, 2o14, the MLP Group had the following numbers of employees in the strategic fi elds of business:
| June 30, 2014 | June 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 |
1,308 | 33 | 88 | 1,301 | 31 | 101 |
| FERI | 232 | 8 | 55 | 248 | 8 | 66 |
| Holding | 7 | 2 | – | 9 | 2 | – |
| Total | 1,547 | 43 | 143 | 1,558 | 41 | 167 |
| 2nd quarter | 2nd quarter | 1st half-year | 1st half-year | |
|---|---|---|---|---|
| All fi gures in €`000 | 2014 | 2013 | 2014 | 2013 |
| IT operations | 12,004 | 10,753 | 23,412 | 21,797 |
| Rental and leasing | 3,465 | 3,524 | 6,873 | 6,860 |
| Administration operations | 2,911 | 2,530 | 5,686 | 5,423 |
| Consultancy | 2,654 | 2,653 | 4,948 | 4,865 |
| Representation and advertising | 1,637 | 1,959 | 3,274 | 3,458 |
| External services – banking business | 1,584 | 1,894 | 3,083 | 4,717 |
| Other external services | 1,124 | 845 | 2,132 | 1,551 |
| Travel expenses | 1,034 | 678 | 1,962 | 1,398 |
| Premiums and fees | 849 | 762 | 1,956 | 2,069 |
| Training and further education | 862 | 1,173 | 1,888 | 2,176 |
| Entertainment | 645 | 653 | 1,568 | 1,494 |
| Insurance | 645 | 630 | 1,289 | 1,255 |
| Expenses for commercial agents | 578 | 569 | 1,230 | 1,088 |
| Maintenance | 535 | 352 | 1,159 | 827 |
| Depreciation and impairments of other receivables and assets |
373 | 239 | 707 | 496 |
| Depreciation and impairments of other receivables from clients in the banking business |
350 | 168 | 545 | 363 |
| Other employee-related expenses | 265 | 254 | 502 | 581 |
| Audit | 240 | 322 | 467 | 561 |
| Expenses from the disposal of assets | 18 | 15 | 69 | 82 |
| Sundry other operating expenses | 940 | 1,604 | 2,322 | 2,620 |
| Total | 32,713 | 31,577 | 65,073 | 63,681 |
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 | 2nd quarter 2014 |
2nd quarter 2013 |
1st half-year 2014 |
1st half-year 2013 |
|---|---|---|---|---|
| Other interest and similar income | 142 | 148 | 300 | 396 |
| Interest expenses from fi nancial instruments | –76 | –34 | –129 | –82 |
| Interest expenses from net obligations for defi ned benefi t plans |
–146 | –143 | –293 | –287 |
| Other interest and similar expenses | –223 | –177 | –421 | –369 |
| Finance cost | –81 | –29 | –121 | 27 |
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 € 1,oo1,461 thsd. For further explanations please refer to the section "Financial position" of the Group interim management report.
| All fi gures in €'000 | June 30, 2014 | Dec 31, 2013 |
|---|---|---|
| Held-to-maturity investments | 54,086 | 74,283 |
| Financial assets at fair value through profi t and loss | 5,097 | 5,133 |
| Available-for-sale fi nancial assets | 25,876 | – |
| Debenture and other fi xed income securities | 85,058 | 79,416 |
| Available-for-sale fi nancial assets | 6,844 | 6,948 |
| Financial assets at fair value through profi t and loss | 1,631 | 1,728 |
| Shares and other variable yield securities | 8,474 | 8,677 |
| Fixed and time deposits (loans and receivables) | 67,147 | 55,230 |
| Investments in non-consolidated subsidiaries (available-for-sale fi nancial assets) | 3,082 | 2,759 |
| Total | 163,762 | 146,082 |
The increase in fi nancial investments is primarily attributable to the investment of fi xed-term money deposits of MLP AG.
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 half-year 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 reserve of € 3,117 thsd. (previous year: € 3,117 thsd.).
Dividend
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. The changes in the respective balance sheet items can therefore only be partially aligned with the corresponding values in the published consolidated balance sheets. For further details, please refer to the "Financial position" section in the management report.
Cash fl ow from investing activities is mainly infl uenced by the investment of monies in fi xedterm deposits as well as by matured term investments.
Cash fl ow from fi nancing activities includes cash-relevant equity changes and loans used and paid back.
Cash and cash equivalents with a term to maturity of not more than three months are recorded under cash and cash equivalents. Cash equivalents are short-term fi nancial assets which can be converted into cash at any time and which are only subject to minor value fl uctuation risks.
| All fi gures in €'000 | June 30, 2014 | June 30, 2013 |
|---|---|---|
| Cash and cash equivalents | 31,584 | 35,940 |
| Loans ≤3 months | 17,000 | 15,000 |
| Liabilities to banks due on demand | -109 | - |
| Cash and cash equivalents | 48,475 | 50,940 |
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:
| June 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 | 39,446 | 13,571 | 25,876 | 39,446 | |||
| Fair Value Option | 6,727 | 6,727 | 6,727 | ||||
| Financial investments (share certifi cates and | |||||||
| structured bonds) | 6,727 | – | 6,727 | – | – | 6,727 | – |
| Available-for-sale fi nancial assets | 32,719 | 6,844 | 25,876 | 32,719 | |||
| Financial investments (share certifi cates and | |||||||
| investment fund shares) | 6,844 | – | 6,844 | – | – | 6,844 | – |
| Financial assets (bonds) | 25,876 | – | – | 25,876 | – | 25,876 | – |
| Financial assets measured at amortised cost | 1,220,046 | 491,806 | 11,728 | 368,574 | 380,084 | 1,252,191 | |
| Loans and receivables | 1,162,877 | 488,723 | 325,276 | 380,084 | 1,194,083 | ||
| Receivables from banking business – clients | 464,795 | 115,721 | – | – | 380,084 | 495,805 | – |
| Receivables from banking business – banks | 536,666 | 211,586 | – | 325,276 | – | 536,861 | – |
| Financial investments (fi xed and time deposits) | 67,147 | 67,147 | – | – | – | 67,147 | – |
| Other receivables and assets | 62,685 | 62,685 | – | – | – | 62,685 | 30,899 |
| Cash and cash equivalents | 31,584 | 31,584 | – | – | – | 31,584 | – |
| Held-to-maturity investments | 54,086 | 11,728 | 43,298 | 55,026 | |||
| Financial assets (bonds) | 54,086 | – | 11,728 | 43,298 | – | 55,026 | – |
| Available-for-sale fi nancial assets | 3,082 | 3,082 | 3,082 | ||||
| Financial assets (investments) | 3,082 | 3,082 | – | – | – | 3,082 | – |
| Financial liabilities measured at amortised cost | 1,080,488 | 1,050,975 | 29,290 | 1,080,266 | |||
| Liabilities due to banking business – clients | 1,009,868 | 993,624 | – | 16,157 | – | 1,009,781 | – |
| Liabilities due to banking business – banks | 13,389 | 120 | – | 13,134 | – | 13,253 | – |
| Other liabilities | 57,231 | 57,231 | – | – | – | 57,231 | 25,518 |
| Liabilities due to fi nancial guarantees and credit commitments |
47,148 | 47,148 | – | – | – | 47,148 | – |
| Dec. 31, 2013 | |
|---|---|
| Carrying | Fair value | No fi nancial | |||||
|---|---|---|---|---|---|---|---|
| amount | instruments according to |
||||||
| IAS32/39 | |||||||
| Carrying | |||||||
| amount | |||||||
| All fi gures in €'000 | 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 first half-year 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) |
On the reporting reference date the bonds to be held to maturity with a carrying amount of € 14,989 thsd. and a fair value of € 15,297 thsd. were transferred from level 1 to level 2 as the quoted in-market prices for these bonds were no longer regularly observable.
In the first half-year 2o14 the bonds to be held to maturity with a carrying amount of € 2,5oo thsd. and a fair value of € 2,5o2 thsd. were transferred from level 2 to level 1 as the quoted in-market prices for these bonds became 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, August 13, 2o14
MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Manfred Bauer Reinhard Loose
To the best of our knowledge, and in accordance with the applicable reporting principles for interim fi nancial reporting, the interim consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the fi nancial year.
Wiesloch, August 13, 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, 2o15)
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 June 2014
23 Key fi gures of the MLP share
November 13, 2o14
Publication of the fi nancial results for the fi rst nine months and the third quarter 2o14.
More:
www.mlp-ag.com, Investor Relations, Calendar
This documentation includes certain prognoses and information on future developments founded on the conviction of MLP AG's Executive Board and on assumptions and information currently available to MLP AG. Words such as "expect", "estimate", "assume", "intend", "plan", "should", "could", "project" and similar terms used in reference to the company describe prognoses based on certain factors subject to uncertainty.
Many factors can contribute to the actual results of the MLP group differing signifi cantly from the prognoses made in such statements.
MLP AG accepts no obligation to the public for updating or correcting prognoses .All prognoses and predictions are subject to various risks and uncertainties which can lead to the actual results numerically differing from expectations. The prognoses refl ect the points of view at the time when they were made.
MLP AG Alte Heerstraße 40 69168 Wiesloch Tel +49 (0) 6222 • 308 • 8320 Fax +49 (0) 6222 • 308 • 1131 www.mlp-ag.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.