Quarterly Report • May 15, 2013
Quarterly Report
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Interim Group Report for the fi rst quarter 2013
| All fi gures in € million | 1st quarter 2013 | 1st quarter 20121 | Change |
|---|---|---|---|
| MLP Group | |||
| Total revenue | 116.4 | 121.5 | – 4.2 % |
| Revenue | 112.3 | 116.3 | – 3.4 % |
| Other revenue | 4.1 | 5.2 | – 21.2 % |
| Earnings before interest and tax (EBIT) | 4.0 | 12.3 | – 67.5 % |
| EBIT margin (%) | 3.4 % | 10.1 % | – |
| Net profi t | 3.2 | 9.5 | – 66.3 % |
| Earnings per share (diluted) in € | 0.03 | 0.09 | – 66.7 % |
| Cash fl ow from operating activities | 63.0 | 36.1 | 74.5 % |
| Capital expenditure | 4.9 | 4.3 | 14.0 % |
| Shareholders' equity | 387.6 | 384.22 | 0.9 % |
| Equity ratio | 26.0 % | 25.7 %2 | – |
| Balance sheet total | 1,491.4 | 1,493.52 | – 0.1 % |
| Clients | 817,500 | 816,2002 | 0.2 % |
| Consultants | 2,037 | 2,0812 | – 2.1 % |
| Branch offi ces | 169 | 175 | – 3.4 % |
| Employees | 1,549 | 1,515 | 2.2 % |
| Arranged new business | |||
| Old-age provisions (premium sum in € billion) | 0.6 | 0.7 | –14.3 % |
| Loans and mortgages | 361.0 | 330.0 | 9.4 % |
| Assets under management in € billion | 21.7 | 21.22 | 2.4 % |
1 Previous year's fi gures adjusted. The adjustments are disclosed under Note 3. 2 As of December 31, 2012.
[Table 01]
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 more than € 21 billion and supports more than 815,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 full banking licence.
The concept of the founders, which still remains 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 within dependent consulting and conceptual services in all issues pertaining to occupational pension schemes and remuneration as well as asset and risk management.
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 .
The previous year's fi gures have been amended in the income statement, the balance sheet and the following tables.
Despite the, in part, considerably negative infl uences from neighbouring European states, the German economy still achieved relatively resilient annual growth of o.7 % in 2o12. However, the fragility of the situation was demonstrated, in particular, by the fourth quarter, during which the economy unexpectedly contracted by o.6 % – far more than experts had been anticipating. Supported by the favourable situation in the labour market, Germany returned to growth in the fi rst quarter 2o13 and, according to estimates by the DIW (German Institute for Economic Research), grew by o.5 %. The number of people out of work in March continued to fall, although the decrease was smaller than in the previous year. Compared to the previous month the unemployment rate fell by o.1 % to 7.3 %.
Alongside consumer spending, this growth was signifi cantly aided by exports. However, in view of falling economic expectations the order-book situation remains unstable and consequently no strong growth is anticipated in the short term. Set against this background, the Ifo business climate index issued by the Institute for Economic research (ifo-Institut) in March fell from 1o7.4 to 1o6.7 points.
The MLP Group generates the vast majority of its total revenue in Germany. The slight economic recovery in the fi rst quarter had no positive effect on business development in Germany. As expected, revenue in the fi rst quarter of 2o13 fell following the very strong fi nal quarter of the fi nancial year 2o12. Whilst the wealth management area signifi cantly exceeded the same quarter in the previous year, revenues in old-age provision and health insurance declined.
[Figure 01]
The market for old-age provision in Germany remains characterised by hesitancy towards longerterm investments – despite awareness among the population that accustomed living standards cannot be maintained in old-age without additional provision. A recent study conducted by the Research Centre for Intergenerational Contracts (Forschungszentrum Generationenverträge) at the University of Freiburg stated that those who rely solely on the state pension will, on average, be around € 8oo worse-off in retirement compared to their previously accustomed standard of living – and in MLP's client target group this shortfall is even higher. Furthermore, a survey carried out by the German Institute for Old-Age Provision revealed that over two-thirds of the respondents fear that they will have to curtail their standard of living in their retirement years. Only one quarter of those surveyed stated that they intend to make up the shortfall in provision during the next 12 months, (see fi gure).
The situation in the fi rst quarter was aggravated by the need for all consultants and intermediaries throughout the market to fi rst familiarise themselves with the new products as a result of the changeover to unisex tariffs on December 21, 2o12.
[Figure 02]
In this persistently challenging market environment MLP achieved a premium sum of € o.6 billion, a fi gure which remained below the previous year (€ o.7 billion). Here, occupational pension provision continues to gain in importance – in their competitive efforts to secure the services of specialised staff, companies are increasingly using this option as an incentive in order to retain existing employees over the longer term or to attract new candidates to join their organisations. In the fi rst quarter occupational pensions at MLP accounted for 14 % (13 %) of the premium sum. In cooperation with our subsidiary TPC (TPC THE PENSION CONSULTANCY GmbH) we were thus able to continue the successful business development achieved in the previous year.
Many citizens remain sceptical of the future scope of services and benefits that will be provided by the statutory healthcare system. According to the findings of the MLP Health Report that MLP compiled in cooperation with the Allensbach Institute, 83 % of individuals with private health insurance feel well covered, compared to just 6o % for those with statutory health insurance. In addition, 34 % of statutory healthcare insurees expressed concern that should they fall ill, cost considerations may restrict access to certain types of necessary treatment. In private healthcare this fi gure just accounted for 11 % .
The topic of long-term care insurance is gaining in importance. Through the introduction of statesubsidised long-term care insurance with daily allowance (the so-called "Pfl ege-Bahr") on January 1, 2o13, the government once again highlighted the need for supplementary private provision. The MLP-Health Report revealed that almost half of the respondents considered this to be a step in the right direction (see fi gure).
On the other hand, the intensive discussion about private health insurance had a negative effect on the framework conditions in health provision. As in old-age provision, in the fi rst quarter of 21o3 consultants and intermediaries had to familiarise themselves with the changeover to the new unisex tariffs. In addition, many insurance companies have only introduced their product solutions for the new "Pfl ege-Bahr" insurance during the past few weeks.
In the fi rst quarter MLP recorded a decrease in this consulting area with revenues from January to March amounting to € 13.9 million, thus falling by 27.2 % compared to the same period in the previous year (€ 19.1 million).
The financial year 2o13 began favourably for the German investment fund industry. According to figures released by the German Investment Fund Association (BVI) net infl ows in the fi rst three months of 2o13 totalled € 38.9 billion. Retail funds accounted for € 14.o billion of these infl ows. Mixed funds and fi xed income funds attracted new monies amounting to € 6.9 billion and € 5.2 billion respectively and thus remained the favoured options for investors (see fi gure). Equity funds also improved slightly. From January to March infl ows in this investment class amounted to nearly € 1.2 billion. Managed assets on behalf of institutional investors also continued to grow – in the fi rst three months 2o13 monies invested in special funds rose by € 23.o billion. During the same period, non-investment fund assets increased by € 2.o billion.
In the fi rst three months of this year managed client assets at MLP also developed positively, rising to € 21.7 billion at March 31, 2o13 ( December 31, 2o12: € 21.2 billion).
The competitive situation within the German fi nancial services market did not fundamentally change for MLP in the fi rst quarter 2o13. The industry still has a very heterogeneous structure and remains characterised by intense competitive pressure. The in-market providers include numerous banks, insurance companies and independent fi nancial intermediaries that offer varying levels of consulting quality.
In recent years the legislator instigated and implemented various regulatory changes in order to improve transparency and the quality of consulting in the market. They also have a lasting impact on the framework conditions in the current fi nancial year. In 2o11 the government passed the Investor Protection and Functionality Improvement Act (Anlegerschutz- und Funktionsverbesserungsgesetz) which, among other aspects, includes stricter training standards for investment advisors from May 2o13.
On November 1, 2o12 the Federal Financial Supervisory Authority (BaFin) introduced the new Report and Complaints Register which empowers the supervisory body to judiciously apply various sanctions even extending to the issue of temporary occupational suspension in cases of gross violation of the rules. The regulations of this legislation apply to organisations such as MLP that possess a license as a bank or a fi nancial services institute.
Further regulation steps are apparent in the revision of the Laws on Intermediaries for Financial Investments and Investment Products (Gesetz zur Novellierung des Finanzanlagenvermittler- und Vermögensanlagerechts), which, among other aspects, specifi es new training requirements for the brokerage of open and closed funds by independent intermediaries and affects the previously largely unregulated section of the market that – unlike MLP – does not fall under the jurisdiction of the Federal Financial Supervisory Authority.
We have already implemented several requirements that the legislator prescribes through regulations and view this as a competitive advantage over other market members. During the coming years additional legislation will further tighten the requirements for all market participants which, in turn, will lead to an acceleration of market consolidation (see page 1o1 et seq. of the Annual Report 2o12).
Following the dynamic fi nal quarter in 2o12, total revenue at the start of the fi nancial year 2o13 fell as expected, decreasing by 4.2 % to € 116.4 million (€ 121.5 million). Revenue from commissions and fees accounted for the largest portion of this fi gure, falling by 2.3 % to € 1o6.4 million (€ 1o8.9 million). Due to the low interest rate levels, interest income remained signifi cantly below the previous year and amounted to € 5.9 million (€ 7.3 million), other revenue totalled € 4.1 million (€ 5.2 million) in the fi rst quarter 2o13 .
The revenue breakdown by consulting area shows weaker development in old-age provision and in health insurance. Both consulting areas were signifi cantly affected by the introduction of new unisex tariffs on December 21, 2o12 and consultants throughout the industry fi rst had to familiarise themselves with the new products. In a continuingly challenging market environment revenues in old-age provision decreased from € 48.9 million to € 38.9 million and in health insurance from € 19.1 million to € 13.9 million. Non-life insurance, which was hardly impacted by the changeover, showed slight revenue growth from € 17.9 million to € 18.2 million.
Wealth management largely compensated for the decrease in the insurance areas: revenues rose by 65.1 % to € 31.7 million (€ 19.2 million). In addition to successful development at MLP, the Group also benefi tted from gains at the subsidiary Feri, which has now become an important pillar of the business portfolio. In loans and mortgages revenues remained stable at € 2.9 million (€ 2.9 million); additional earnings from the joint venture company MLP Hyp amounted to € o.1 million (€ o.2 million).
[Figure 05]
In the fi rst quarter 2o13 the largely variable commission expenses increased from € 43.o million to € 49.1 million. This rise resulted primarily from higher commission expenses in the Feri segment, which in turn was due to business growth at the Luxemburg-based subsidiary. This company specialises in the administration of funds. Expenses in this business fi eld include costs for items such as custodian banks and fund sales. Interest expenses fell from € 2.1 million to € 1.7 million.
Administration costs (defi ned as the sum of personnel expenses, depreciation and amortisation and other operating expenses) decreased by € 2.5 million to € 61.7 million in the fi rst quarter. Here, personnel expenses rose slightly from € 26.o million to € 26.7 million due to higher costs at Feri that were partially one-off items. Scheduled depreciation and amortisation fell from € 3.6 million to € 2.9 million. Other operating expenses reduced by € 2.5 million to € 32.1 million.
In the first quarter 2o13 EBIT (Earnings before interest and tax) fell to € 4.o million (€ 12.3 million). This decrease was primarily due to the anticipated decline in revenue in the fi nancial services segment. A further contributory factor was the change in revenue mix – as particularly revenues at Feri in Luxemburg lead to higher revenue costs. The fi nancial result slightly declined to € o.1 million (€ o.3 million) .
| in € million | 1st quarter 2013 | 1st quarter 2012 | Change |
|---|---|---|---|
| Total revenue | 116.4 | 121.5 | – 4.2 % |
| EBIT | 4.0 | 12.3 | – 67.5 % |
| EBIT margin | 3.4 % | 10.1 % | – |
| Finance costs | 0.1 | 0.3 | – 66.7 % |
| EBT | 4.1 | 12.7 | – 67.7 % |
| EBT margin | 3.5 % | 10.5 % | – |
| Income tax | – 1.0 | – 3.2 | – 68.8 % |
| Net profi t | 3.2 | 9.5 | – 66.3 % |
| Net margin | 2.7 % | 7.8 % | – |
[Table 02]
At the start of the year we provided a quantitative forecast for the development of our EBIT (earnings before interest and tax). Overall, for the fi nancial years 2o13 to 2o15 MLP expects EBIT to range within a corridor between € 65 million and € 78 million. Due to the announced temporarily higher expenses - in particular to make important investments in our future – we anticipate that EBIT for the fi nancial year 2o13 will come in at the lower end of the corridor. We also issued a qualitative estimate for revenue development. Accordingly, MLP expects full-year revenues for 2o13 in old-age provision to stagnate or even decline slightly. In health insurance we expect to achieve revenue at the level of the fi nancial year 2o12 and in wealth management we anticipate a rise in revenue.
After the results of the fi rst quarter we see no reason to amend this qualitative forecast. In wealth management revenue rose by 65.1 % compared to the same period of the previous year. Following the strong fi nal quarter in 2o12, revenue in old-age provision and in health insurance remained, as expected, below the levels of the previous year. Furthermore, the changeover to unisex tariffs in both these consulting areas meant that our consultants had to fi rst familiarise themselves with the new products. The development of our costs also proceeded according to plan. Earning development was therefore within the framework of our expectations and we reiterate our EBIT forecast.
In the fi rst quarter Assets under Management increased, rising to € 21.7 billion on March 31, 2o13 (December 31, 2o12: € 21.2 billion). The premium sum in old-age provision amounted to € o.6 billion and was thus below the previous year (€ o.7 billion). Occupational pension provision accounted for around 14 % (13 %) of this fi gure.
During the period from January to March MLP was able to welcome a gross number of 5,ooo new clients (6,5oo). At the reporting reference date the total number of clients stood at 817,5oo(December 31, 2o12: 816,2oo). The number of consultants at March 31, 2o13 fell slightly to 2,o37 (December 31, 2o12: 2,o81).
At the balance sheet reference date on March 31, 2o13 the total assets of the MLP Group amounted to € 1,491.4 million and thus remained at the level of December 31, 2o12 (€ 1,493.5 million). On the asset side of the balance sheet there were changes to primarily three items: receivables from banks from the banking business, fi nancial investments as well as other receivables and other assets. The reduction in receivables from banks from € 51o.5 million to € 485.8 million was heavily based on the profi t transfer from MLP Finanzdienstleistungen AG to MLP AG. Financial investments rose from € 137.1 million to € 2o9.1 million, primarily due to the investment of liquid funds at MLP in fi xed-term deposits. Other accounts receivable and other assets reduced by € 39.2 million to € 1oo.5 million (€ 139.7 million). This item mainly contains receivables from insurers for whom we have brokered insurance contracts. Due to the usual strong year-end business these rise signifi cantly at the end of the year and then fall again during the course of the following fi nancial year.
| in € million | March 31, 2013 | Dec. 31, 2012 | Change |
|---|---|---|---|
| Intangible assets | 144.7 | 141.7 | 2.1 % |
| Property, plant and equipment | 67.7 | 68.8 | – 1.6 % |
| Shares accounted for using the equity method | 2.7 | 2.6 | 3.8 % |
| Deferred tax assets | 2.2 | 3.0 | – 26.7 % |
| Receivables from clients in the banking business | 427.5 | 431.4 | – 0.9 % |
| Receivables from banks in the banking business | 485.8 | 510.5 | – 4.8 % |
| Financial investments | 209.1 | 137.1 | 52.5 % |
| Tax refund claims | 12.7 | 7.4 | 71.6 % |
| Other receivables and other assets | 100.5 | 139.7 | – 28.1 % |
| Cash and cash equivalents | 31.0 | 40.7 | – 23.8 % |
| Assets held for sale | 7.4 | 10.5 | – 29.5 % |
| Total | 1,491.4 | 1,493.5 | – 0.1 % |
[Table 03]
Equity capital at March 31, 2o13 stood at € 387.6 million and thus remained at the level of December 31, 2o12 (€ 384.2 million). The equity capital position of MLP therefore continues to be good with an equity ratio of 26.o %. Changes occurred to the liabilities towards clients from the banking business in which we show the development of our deposit business. These rose from € 871.1 million to € 9o1.7 million and mainly concern deposits in current and instant access accounts as well as deposits in connection with our credit card business. In addition, other liabilities reduced from € 13o.7 million to € 89.6 million, due in part to lower commission claims by our consultants. Due to our usually strong year-end business, the commission claims by the consultants rise sharply at the balance sheet reference date on December 31, but then fall again in the following quarters .
| in € million | March 31, 2013 | Dec. 31, 2012 | Change |
|---|---|---|---|
| Shareholders' equity | 387.6 | 384.2 | 0.9 % |
| Provisions | 89.0 | 83.7 | 6.3 % |
| Deferred tax liabilities | 8.6 | 8.5 | 1.2 % |
| Liabilities due to clients in the banking business | 901.7 | 871.1 | 3.5 % |
| Liabilities due to banks in the banking business | 10.2 | 10.5 | – 2.9 % |
| Tax liabilities | 4.9 | 4.8 | 2.1 % |
| Other liabilities | 89.6 | 130.7 | – 31.4 % |
| Total | 1,491.4 | 1,493.5 | – 0.1 % |
Cash fl ow from operating activities increased to € 63.0 million compared to € 36.1 million in the same period of the previous year. Here, the main payments result from the deposit business with our clients and from the investment of these monies.
Cash fl ow from investment activities changed from € –19.4 million to € –3.6 million. During the period under review, no term deposits were invested, whereas in the comparative period € 15 million were invested in term deposits with a term of more than three months.
Overall, at the end of the fi rst quarter 2o13 the Group's liquid funds stood at € 174 million. The liquidity situation therefore remains good and the Group has adequate liquidity reserves available. In addition to the liquid funds, MLP also has access to free credit lines .
| in € million | 1st quarter 2013 | 1st quarter 2012 |
|---|---|---|
| Cash and cash equivalents at the beginning of the period | 60.7 | 51.4 |
| Cash fl ow from operating activities | 63.0 | 36.1 |
| Cash fl ow from investing activities | – 3.6 | – 19.4 |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | 59.4 | 16.8 |
| Change in cash and cash equivalents from changes to the scope of consolidation | – | 1.4 |
| Cash and cash equivalents at the end of the period | 120.0 | 69.5 |
[Table 05]
Capital measures
No capital measures were undertaken during the period under review.
In the fi rst three months of 2o13 MLP invested € 4.9 million, a fi gure that was € o.6 million higher than the previous year's value (€ 4.3 million). 96 % of this amount was allocated to the fi nancial services segment - mainly for IT items. All investments were fi nanced from current cash fl ows.
Following the dynamic fi nal quarter of 2o12 total revenue in the fi rst quarter 2o13 decreased as expected compared to the same period of the previous year. Our business development was signifi cantly infl uenced by the introduction of the new unisex products in the areas of old-age provision and health insurance with which our consultants had to fi rst familiarise themselves. EBIT (earnings before interest and tax) fell in accordance with the revenue development and composition. After conclusion of the fi rst quarter MLP still has a good equity capital base and liquidity. Overall, the business development is within the framework of our expectations and we regard the economic position of the Group as positive – both at the end of the period under review as well as at the time of the preparation of the interim report.
The number of employees in the MLP Group rose slightly during the period under review. At the reporting reference date on March 31, 2o13 the Group had a total of 1,549 employees – 34 more than a year earlier. This fi gure includes 169 temporary staff or marginal part-time employees compared to 164 in the previous year.
In March MLP received the "Top Employer" award for the seventh time. We thus continue to belong to a select circle of companies in Germany that according to the Corporate Research Foundation Institute (CRF) - one of the leading research organisations in the area of employer certifi cation and employer branding - offers exceptional working conditions and development possibilities.
| March 31, 2013 | March 31, 2012 | |
|---|---|---|
| Financial Services | 1,290 | 1,256 |
| Feri | 251 | 250 |
| Holding | 8 | 9 |
| Total | 1,549 | 1,515 |
[Table 06]
In January MLP presented the 7th MLP Health Report, conducted in cooperation with the Allensbach Institute for Public Opinion Research and based on a survey of citizens and doctors concerning the German healthcare system. The well-received study provided extensive fi ndings on topics such as long-term nursing care, the situation in hospitals as well as the shortage of doctors. Media sources throughout Germany carried over 2oo articles on the MLP Health Report .
The international classic festival "Heidelberg Spring", of which MLP is now a main sponsor, was staged from mid-March to mid-April. The acclaimed culture festival features more than 13o programme events and set a new visitor record this year .
During the period under review MLP continued its support for students. At the beginning of March, and within the framework of the "Joint the best" support programme, we awarded international internships to 14 students who now have the opportunity to benefi t from practical experience at renowned companies world-wide.
At the start of April, and thus shortly after the end of the period under review, the new issue of the MLP client magazine Forum was published as a web-version and as an App for Tablets with Apple and Android operating systems. In addition to the lead topic about long-term wealth creation, Forum also includes articles about long-term care provision and mortgages as well as interesting career and lifestyle items.
On March 21, 2o13 the Supervisory Board of MLP AG unanimously extended the existing service contract of Chief Financial Offi cer Reinhard Loose until January 31, 2o19. As CFO, Reinhard Loose bears responsibility for Controlling, Accounting, Risk Management as well as IT and Procurement.
There were no further changes within the corporate structure and the executive bodies of the MLP Group. A detailed description of the corporate structure and the executive bodies is contained on pages 38 et seq. of our Annual Report 2o12.
The MLP Group structures its business into the following operating segments:
A detailed description of the individual segments is contained on pages 65 et seq. of the Annual Report 2o12.
In the fi rst quarter 2o13 total revenue in the fi nancial services segment decreased from € 11o.4 million to € 93.7 million which was attributable to lower revenue in the consulting areas of oldage provision and health insurance (see section on "Results of operations").
Commission expenses decreased to € 36.8 million (€ 41.5 million) due to weaker revenue development. Personnel expenses, scheduled depreciation and amortisation as well as other operating expenses were each slightly below the corresponding fi gures in the previous year. EBIT (earnings before interest and tax) amounted to € 4.9 million compared to € 14.1 million in the same period of the previous year and was signifi cantly infl uenced by lower total revenue. The fi nancial result improved from € o.o million to € o.1 million. EBT (earnings before tax) thus amounted to € 5.o million (€ 14.1 million).
In the period from January to March 2o13 total revenue in the Feri segment rose by 91.3 % to € 24.1 million (€ 12.6 million) mainly due to the greater volume of business at the Luxembourg subsidiary. At the same time commission expenses increased as a result of higher revenue in Luxembourg. Personnel expenses rose slightly; the additional expense is partly attributable to one-off items. EBIT improved slightly to € o.5 million (€ o.4 million), EBT also amounted to € o.5 million (€ o.4 million) .
In the Holding segment total revenue amounted to € 2.6 million and thus remained at the level of the previous year (€ 2.5 million). As both the personnel expenses and other operating costs fell, EBIT improved from € –2.1 million to € –1.3 million. The fi nancial result was slightly lower and EBT came in at € –1.3 million (€ –1.8 million).
There were no signifi cant changes in the risk 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 quarter 2o13. The MLP Group has adequate liquid funds. At the reporting date on March 31, 2o13, our core capital ratio stood at 17.5 % and continued to far exceed 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 as well as a detailed description of our risk management are contained in our risk and disclosure report on pages 74 to 94 of the Annual Report 2o12.
Related party disclosures are contained in the notes of the Annual Report 2o12, page 196 et seq.
The government expects the German economy to grow by o.5 % in 2o13 and by 1.6 % in 2o14. The leading economic institutes take a somewhat more optimistic view. In their latest forecasts they predict that the economy will expand by o.8 % in 2o13 – and for 2o14 these experts foresee stronger growth of 1.9 %, supported, in particular, by positive domestic stimulus. Buoyed by a robust labour market, private consumption expenditure is expected to be a supporting pillar of the economy. Overall, MLP does not expect any positive stimulus in the current fi nancial year from the economic development.
A detailed description of the framework conditions for our most important markets – old-age provision, health insurance and wealth management – is contained in our Annual report 2o12 on pages 96 et seq. During the fi rst three months of the fi nancial year 2o13 there were no signifi cant changes to the overall situation.
During the coming years, private and occupational pension provision will continue to be of major concern to German citizens, most of whom are already aware of the fact that the statutory pension alone will no longer be adequate to enable them to maintain their current standard of living in their retirement years. There is also a high requirement for occupational disability insurance and in the area of occupational pensions Germany still lags considerably behind other European states. Furthermore, long term care annuity insurance is an increasingly important area. However, in the short term, we continue to see uncertainty for the German provision market. Above all, the effects of the European debt crisis continue to cause hesitancy on the part of citizens with respect to the conclusion of long-term contracts.
In the German healthcare system the changing demographic situation as a result of the ageing population, and the associated rising costs will necessitate fundamental reforms. In the presence of reduced services and benefi ts offered by the statutory health insurance scheme, we anticipate that, in the future, insurees will continue to seek attractive alternatives - either through a complete switch to private health insurance or by taking out supplementary private insurance. In addition we also believe that the topic of occupational health provision – similarly to occupational pension provision – will steadily gain in signifi cance during the coming years. Furthermore, for the current fi nancial year we expect that, among other aspects, the introduction of the state-subsidised private long-term care insurance ("Pfl ege-Bahr") will heighten awareness of the need for adequate long-term care insurance.
Over the longer-term, demand for high quality wealth management services will rise. In its study entitled "Global Wealth 2o12" the management consultant fi rm Boston Consulting Group expects global asset fi gures to grow by around 4 to 5 % per annum to more than € 15o trillion by 2o16. The report predicts asset growth in Western Europe of around 2 %. In addition, very considerable account and portfolio reallocations are expected to be undertaken in the coming years: according to a study conducted by the German Institute for Old-Age Provision (DIA) around € 2.6 trillion will be inherited by private households by 2o2o. Overall, we expect modest to stagnating market growth in wealth management in the coming years .
Regulation too is playing an important role in the future competitive situation and the continuing consolidation process. Changes instigated in recent years also have an impact on the current fi nancial year. From May 2o13 for example, the new requirements of the Investor Protection and Functionality Improvement Act (Anlegerschutz- und Funktionsverbesserungsgesetz) stipulate that investment advisors, compliance offi cers and sales managers must provide proof of their professional expertise. MLP already complies with this requirement through the established training facility at its own Corporate University.
The act reforming the Laws on Intermediaries for Financial Investments and on Investment Products (Novellierung des Finanzanlagenvermittler- und Vermögensanlagerecht) was instigated back in 2o11. Consequently, commercial brokers who – unlike MLP – do not possess a banking license, must comply with an extensive set of regulations with respect to the provision of advisory services for open and closed funds. These requirements include expertise specifi cations as well as information, consulting and documentation obligations, all of which came into effect on January 1, 2o13. These changes will make it more diffi cult for less quality-orientated providers to conduct business and will also provide further stimulus for the on-going consolidation process within the market.
The German Bundestag has instigated new regulations for fee-based investment advisory services in the form of the Promotion and Regulation of Fee-Based Advice on Financial Instruments Act. MLP already offers fee-based investment advisory services in fi elds where our clients have corresponding demand. Irrespective of this situation, we remain convinced that the quality of the advisory services provided is primarily defi ned not by the type of remuneration but rather by the standard of consultant training, the quality of the product selection and the transparency afforded to the client.
In addition to this, introduction of the Markets in Financial Instruments II (MiFiD II) and Insurance mediation (IMD II) European directives is planned for implementation in the next few years. Initial drafts by the EU Commission have been already submitted for both of these new directives, although they are currently still in discussion by the respective EU committees and have yet to be passed. They are unlikely to be implemented as national legislation before 2o15.
In summary we consider the current competitive situation of MLP and the prerequisites for our future growth to be good. Through sustainable diversifi cation of our business model we have manoeuvred the company into an excellent position. Furthermore, we have already implemented several requirements that the legislator is now stipulating with new sets of regulations and standards.
In addition to moderate economic development we also face further challenges in our core markets of old-age provision, health insurance and wealth management. Consumers require a certain degree of trust and confi dence in the future when making investment decisions – particularly with respect to long-term saving processes. However, this confi dence is being eroded by current discussions about sovereign debt, the fi nancial crisis and the high volatility of the capital markets. Against this backdrop, MLP expects revenue in the old-age provision area for the fi nancial years 2o13 and 2o14 to stagnate or decline slightly but should increase slightly in 2o15. In health insurance in 2o13 we expect to maintain the revenue level achieved in 2o12. For 2o14 and 2o15 we currently anticipate a moderate increase. In wealth management we expect to increase revenues in 2o13 as well as in the two following fi nancial years. However a degree of uncertainty remains in all consulting areas due to the challenging market environment.
| 2013 | 2014 | 2015 | |
|---|---|---|---|
| Old-age provision | 0 | 0 | + |
| Health insurance | 0 | + | + |
| Wealth management | + | + | + |
| Very positive: ++, Positive: +, Neutral: 0, Negative: –, Very negative: –– | [Figure 10] |
Overall, MLP expects to record EBIT in the range of € 65 million to € 78 million in the fi nancial years 2o13 to 2o15. This corridor refl ects uncertainties that remain in place in view of the diffi cult market conditions particularly in private client business faced by MLP Finanzdienstleistungen AG. Due to the one-off expenses of about € 8 million announced for future investments, we expect to be at the lower end of this corridor in the fi nancial year 2o13.
With our outlook we are documenting our claim of maintaining the high level of earnings we once again recorded in 2o12 over the next few years – despite the fact that we are operating in diffi cult markets. MLP can also make targeted investments into future topics – thereby securing the continuous and timely further development of our business model under framework conditions that are rapidly changing.
Signifi cant changes to the opportunities resulting from the framework conditions, corporate strategic opportunities or business opportunities did not occur during the period under review. Relevant detailed explanations are contained in the Annual Report 2o12 on page 1o6 et seq.
There were no notable events subsequent to the reporting date which may affect the MLP Group's net assets, fi nancial position or results of operations.
In the fi rst quarter 2o13 stock markets worldwide continued their positive development of the previous year. In January the German benchmark index DAX, as well as the American Dow Jones Industrial Average and the S&P 5oo indices posted new fi ve-year highs, signifi cantly helped by favourable quarterly results. Following renewed uncertainty in February – caused by the parliamentary elections in Italy as well as the still unresolved issue of the "fi scal cliff" in the United States of America – which suppressed the mood of investors, the markets entered a correction phase and then a volatile sideways move. At the end of the quarter investor optimism was given fresh impetus, particularly as a result of the aggressive US central bank policy as well as the prospect of a protracted policy of cheap money in Europe. Overall, the German benchmark index DAX rose by 2.4 % to 7,795 points during the period under review. During the same period, the American Dow Jones index climbed by 11.3 % to 14,578 points.
Following falls at the end of the previous year the MLP share began the year with strong gains. On January 3o, the share reached its high of € 6.64. At the end of the quarter persistent selling pressure led to a price correction. On March 28, the MLP share closed at € 5.2o corresponding to a gain of 4.o % compared to the end of 2o12.
Further information concerning the MLP share is available on our Investor Relations page on the MLP website at www.mlp-ag.com under the heading "MLP share".
| 1st quarter 2013 | 1st quarter 2012 | |
|---|---|---|
| Share price at the beginning of the quarter | € 5.08 | € 5.05 |
| Share price high | € 6.64 | € 6.66 |
| Share price low | € 5.05 | € 5.05 |
| Share price at the end of the quarter | € 5.20 | € 6.66 |
| Dividend for the previous year | € 0.32* | € 0.60 |
| Market capitalisation (end of reporting period) | € 560,964,237.60 | € 718,465,735.08 |
| [Table 07] |
* Subject to the approval of the Annual General Meeting on June 6, 2013.
The Executive and Supervisory Boards of MLP are proposing a dividend of € o.32 per share for approval at the Annual General Meeting (AGM) on June 6, 2o13. MLP thus offers one of the most attractive dividend yields in Germany and once again demonstrates a high level of dividend continuity for its shareholders.
The MLP Annual General Meeting 2o13 will take place on June 6, 2o13 in the Rosengarten in Mannheim. Information about all aspects of the Annual General Meeting is provided on our Investor Relations page at http://www.mlp-hauptversammlung.de.
| All fi gures in €'000 | Notes | 1st quarter 2013 | 1st quarter 20121 |
|---|---|---|---|
| Revenue | (6) | 112,320 | 116,273 |
| Other revenue | 4,083 | 5,189 | |
| Total revenue | 116,403 | 121,462 | |
| Commission expenses | (7) | – 49,132 | – 43,014 |
| Interest expenses | – 1,678 | – 2,102 | |
| Personnel expenses | (8) | – 26,693 | – 26,023 |
| Depreciation and amortization | – 2,856 | – 3,579 | |
| Other operating expenses | (9) | – 32,104 | – 34,596 |
| Earnings from shares accounted for using the equity method | 109 | 183 | |
| Earnings before interest and tax (EBIT) | 4,048 | 12,332 | |
| Other interest and similar income | 248 | 530 | |
| Other interest and similar expenses | – 192 | – 199 | |
| Finance cost | (10) | 56 | 331 |
| Earnings before tax (EBT) | 4,104 | 12,663 | |
| Income taxes | – 951 | – 3,198 | |
| Net profi t | 3,153 | 9,464 | |
| Of which attributable to | |||
| owners of the parent company | 3,153 | 9,464 | |
| Earnings per share in €2 | |||
| basic/diluted | 0.03 | 0.09 | |
1 Previous year's values adjusted. The adjustments are under note 3.
2 Basis of calculation: Average number of shares at March 31, 2013: 107,877,738.
| All fi gures in €'000 | 1st quarter 2013 | 1st quarter 20121 |
|---|---|---|
| Net profi t | 3,153 | 9,464 |
| Other comprehensive income | ||
| Non-reclassifi able gains/losses | – | – |
| Gains/losses from the change in the fair value of securities available for sale | 240 | 1,377 |
| Deferred taxes on gains/losses from the change in fair value | 2 | -400 |
| Reclassifi able gains/losses | 242 | 977 |
| Other comprehensive income after tax | 242 | 977 |
| Total comprehensive income for the year | 3,396 | 10,441 |
| Total comprehensive income attributable to | ||
| owners of the parent company | 3,396 | 10,441 |
1 Previous year's values adjusted. The adjustments are under note 3. [Table 08]
| All fi gures in €'000 | Notes | March 31, 2013 | Dec. 31, 20121 |
|---|---|---|---|
| Intangible assets | 144,730 | 141,713 | |
| Property, plant and equipment | 67,683 | 68,782 | |
| Shares accounted for using the equity method | 2,710 | 2,601 | |
| Deferred tax assets | 2,229 | 2,999 | |
| Receivables from clients in the banking business | (11) | 427,520 | 431,396 |
| Receivables from banks in the banking business | (11) | 485,807 | 510,510 |
| Financial assets | (12) | 209,095 | 137,118 |
| Tax refund claims | 12,743 | 7,428 | |
| Other accounts receivable and other assets | (13) | 100,487 | 139,749 |
| Cash and cash equivalents | 31,043 | 40,682 | |
| Assets held for sale | 7,403 | 10,532 | |
| Total | 1,491,448 | 1,493,509 | |
| [Table 10] |
1 Previous year's values adjusted. The adjustments are under note 3.
| All fi gures in €'000 | Notes | March 31, 2013 | Dec. 31, 20121 |
|---|---|---|---|
| Shareholders' equity | (14) | 387,553 | 384,157 |
| Provisions | 88,997 | 83,704 | |
| Deferred tax liabilities | 8,552 | 8,465 | |
| Liabilities due to clients in the banking business | 901,656 | 871,110 | |
| Liabilities due to banks in the banking business | 10,198 | 10,498 | |
| Tax liabilities | 4,937 | 4,831 | |
| Other liabilities | (13) | 89,554 | 130,745 |
| Total | 1,491,448 | 1,493,509 |
1 Previous year's values adjusted. The adjustments are under note 3.
[Table 11]
| All fi gures in €'000 | 1st quarter 2013 | 1st quarter 2012 |
|---|---|---|
| Cash fl ow from operating activities | 62,958 | 36,140 |
| Cash fl ow from investing activities | – 3,597 | –19,351 |
| Cash fl ow from fi nancing activities | - | – |
| Change in cash and cash equivalents | 59,361 | 16,789 |
| Cash and cash equivalents at the end of the period | 120,043 | 69,493 |
| [Table 12] |
| 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 |
Retained earnings |
Total shareholders' equity |
| As of Jan. 1, 2012 | 107,878 | 142,184 | 424 | 149,154 | 399,640 |
| Effects from the retrospective application of IAS 19 |
– | – | – | – 1,066 | – 1,066 |
| As of Jan. 1, 2012 (adjusted) | 107,878 | 142,184 | 424 | 148,088 | 398,574 |
| Net profi t | – | – | – | 9,464 | 9,464 |
| Other comprehensive income | – | – | 977 | – | 977 |
| Total comprehensive income | – | – | 977 | 9,464 | 10,441 |
| Changes to the scope of consolidation | – | 50 | – | 161 | 211 |
| As of March 31, 2012 | 107,878 | 142,234 | 1,401 | 157,713 | 409,226 |
| As of Jan. 1, 2013 | 107,878 | 142,184 | 382 | 137,110 | 387,554 |
| Effects from the retrospective application of IAS 19 |
– | – | – | – 3,397 | – 3,397 |
| As of Jan. 1, 2013 (adjusted) | 107,878 | 142,184 | 382 | 133,713 | 384,157 |
| Net profi t | – | – | – | 3,153 | 3,153 |
| Other comprehensive income | – | – | 242 | – | 242 |
| Total comprehensive income | – | – | 242 | 3,153 | 3,396 |
| As of March 31, 2013 | 107,878 | 142,184 | 624 | 136,867 | 387,553 |
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, 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, health care, 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, 2o12.
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 2o12. These are presented in the Group notes of the annual report 2o12 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, 2o12 except the standards and interpretations to be used for the fi rst time in the fi nancial year 2o13.
In the fi nancial year 2o13 the following new or revised standards are to be used for the fi rst time:
The amendments to IAS 1 affect the presentation of other comprehensive income. The individual items of other comprehensive income are to be split into items for which a reclassifi cation to profi t or loss is possible (reclassifi able), and items for which a reclassifi cation to profi t or loss is not possible (non-reclassifi able).
Through the abolition of the corridor method in the amended IAS 19, the actuarial gains and losses now have a direct effect in the Group balance sheet which leads to an increase in accruals for pensions and similar obligations as well as to a reduction in equity capital. Actuarial gains and losses must be recorded immediately as they arise under other comprehensive income and have no effect on the income statement. In addition the new standard also introduces the net interest approach through which the balance sheet net obligation (difference between Defi ned Benefi t Obligation and plan assets) attracts interest at the actuarial interest rate. The amendments to IAS 19 are to be applied retrospectively. Due to the effects of the amended IAS 19, the previous year's values are adjusted .
The following tables present the main effects resulting from the amended requirements of IAS 19.
| March 31, 2013 | Jan. 1, 2012 | ||||
|---|---|---|---|---|---|
| Before | After | Before | After | ||
| adjustment | |||||
| 2,597 | 402 | 2,999 | 4,880 | 435 | 5,315 |
| 1,493,108 | 402 | 1,493,509 | 1,489,751 | 435 | 1,490,186 |
| 387,554 | – 3,397 | 384,157 | 399,640 | – 1,066 | 398,573 |
| 78,921 | 4,783 | 83,704 | 89,511 | 1,501 | 91,012 |
| 11,827 | 4,783 | 16,610 | 12,718 | 1,501 | 14,219 |
| 67,094 | – | 67,094 | 76,793 | – | 76,793 |
| 9,449 | -984 | 8,465 | 9,428 | – | 9,428 |
| 1,493,108 | 402 | 1,493,509 | 1,489,751 | 435 | 1,490,186 |
| adjustment | Adjustment | adjustment | adjustment | Adjustment |
[Table 14]
| March 31, 2012 Before All fi gures in €'000 adjustment Adjustment Other operating expenses – 34,507 – 89 – 34,596 Earnings before interest and tax (EBIT) 12,421 – 89 12,332 Other interest and similar expenses – 377 177 – 199 |
||||
|---|---|---|---|---|
| After adjustment |
||||
| Finance cost | 154 | 177 | 331 | |
| Earnings before tax (EBT) 12,574 88 12,663 |
||||
| Income taxes – 3,173 – 26 – 3,198 |
||||
| Net profi t 9,402 63 9,464 |
[Table 15]
The effects of the adjustment in 2o12 on the earnings per share were less than € o.o1.
Changes from the fi rst-time application of IFRS 13 and the amendments to IFRS 7 primarily result in more extensive disclosures in the notes.
In all other cases there were no effects on the representation of the Group's net fi nancial position or results of operations.
As expected, revenue decreased in the fi rst quarter 2o13 following a very strong fourth quarter in the fi nancial year 2o12. Nevertheless, in view of the usual seasonal infl uences on business operations, the Group expects to achieve higher earnings for the remainder of the fi nancial year than in the fi rst quarter.
| Financial Services | |||
|---|---|---|---|
| All fi gures in €'000 | 1st quarter 2013 | 1st quarter 20121 | |
| Revenue | 90,335 | 106,698 | |
| of which total inter-segment revenue | 1,255 | 1,251 | |
| Other revenue | 3,400 | 3,670 | |
| of which total inter-segment revenue | 442 | 423 | |
| Total revenue | 93,736 | 110,369 | |
| Commission expenses | – 36,784 | – 41,452 | |
| Interest expenses | – 1,679 | – 2,103 | |
| Personnel expenses | – 18,587 | – 18,759 | |
| Depreciation/amortization | – 1,770 | – 2,442 | |
| Other operating expenses | – 30,115 | – 31,708 | |
| Earnings from shares accounted for using the equity method | 109 | 183 | |
| Segment earnings before interest and tax (EBIT) | 4,909 | 14,088 | |
| Other interest and similar income | 195 | 84 | |
| Other interest and similar expenses | – 105 | – 104 | |
| Finance cost | 90 | -21 | |
| Earnings before tax (EBT) | 4,999 | 14,067 | |
| Income taxes | |||
| Net profi t |
1 Previous year's values adjusted. The adjustments are under note 3.
There were no signifi cant changes compared to December 31, 2o12.
| Feri | Holding | Consolidation | Total | ||||
|---|---|---|---|---|---|---|---|
| 1st quarter 2013 | 1st quarter 2012 | 1st quarter 2013 | 1st quarter 20121 | 1st quarter 2013 | 1st quarter 2012 | 1st quarter 2013 | 1st quarter 20121 |
| 23,304 | 10,976 | – | – | – 1,319 | – 1,402 | 112,320 | 116,273 |
| 64 | 151 | – | – | – 1,319 | – 1,402 | – | – |
| 788 | 1,629 | 2,558 | 2,475 | – 2,664 | – 2,585 | 4,083 | 5,189 |
| – | – | 2,222 | 2,162 | – 2,664 | – 2,585 | – | – |
| 24,092 | 12,605 | 2,558 | 2,475 | – 3,983 | – 3,987 | 116,403 | 121,462 |
| – 13,460 | – 2,795 | – | – | 1,112 | 1,234 | – 49,132 | – 43,014 |
| – | – | – | – | 1 | 1 | – 1,678 | – 2,102 |
| – 7,185 | – 6,046 | – 922 | – 1,218 | – | – | – 26,693 | – 26,023 |
| – 479 | – 502 | – 606 | – 635 | – | – | – 2,856 | – 3,579 |
| – 2,436 | – 2,850 | – 2,291 | – 2,769 | 2,738 | 2,732 | – 32,104 | – 34,596 |
| – | – | – | – | – | – | 109 | 183 |
| 533 | 412 | – 1,261 | – 2,147 | – 132 | – 20 | 4,048 | 12,332 |
| 1 | 5 | 115 | 532 | – 64 | – 90 | 248 | 530 |
| – 57 | – 57 | – 142 | – 152 | 112 | 114 | – 192 | – 199 |
| – 55 | – 52 | – 27 | 379 | 49 | 24 | 56 | 331 |
| 477 | 360 | – 1,289 | – 1,768 | – 84 | 3 | 4,104 | 12,663 |
| – 951 | – 3,198 | ||||||
| 3,153 | 9,464 | ||||||
[Table 16]
| All fi gures in €'000 | 1st quarter 2013 | 1st quarter 2012 |
|---|---|---|
| Old-age provision | 38,943 | 48,946 |
| Wealth management | 31,717 | 19,247 |
| Non-life insurance | 18,222 | 17,877 |
| Health insurance | 13,880 | 19,082 |
| Financing | 2,908 | 2,904 |
| Other commission and fees | 747 | 877 |
| Commission and fees | 106,417 | 108,934 |
| Interest income | 5,903 | 7,339 |
| Total | 112,320 | 116,273 |
| [Table 17] |
Commission expenses increased in the period from January 1 to March 31, 2o13 compared to the same period of the previous year from € 43,o14 thsd to € 49,132 thsd. They mainly contain commissions and other remuneration components for the self-employed MLP consultants. 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 March 31, 2o13 compared to the same period of the previous year from € 26,o23 thsd to € 26,693 thsd. For further explanations please refer to the section "Personnel" of the Group Interim Management Report.
At March 31, 2o13, the MLP Group had the following numbers of employees in the strategic fi elds of business:
| March 31, 2013 | of which part-time employees |
March 31, 2012 | of which part-time employees |
|
|---|---|---|---|---|
| Financial Services | 1,290 | 105 | 1,256 | 106 |
| Feri | 251 | 64 | 250 | 58 |
| Holding | 8 | - | 9 | - |
| Total | 1,549 | 169 | 1,515 | 164 |
[Table 18]
| All fi gures in €'000 | 1st quarter 2013 | 1st quarter 20121 |
|---|---|---|
| IT operations | 11,044 | 10,737 |
| Rental and leasing | 3,336 | 3,685 |
| Administration operations | 2,892 | 3,325 |
| External services – banking business | 2,823 | 1,719 |
| Consultancy | 2,212 | 3,009 |
| Representation and advertising | 1,499 | 2,256 |
| Premiums and fees | 1,307 | 1,727 |
| Training and further education | 1,003 | 1,022 |
| Entertainment | 841 | 799 |
| Travel expenses | 720 | 801 |
| Other external services | 706 | 731 |
| Insurance | 625 | 767 |
| Expenses for commercial agents | 519 | 679 |
| Maintenance | 476 | 499 |
| Other personnel costs | 326 | 297 |
| Write-downs and impairments of other receivables and other assets | 257 | 142 |
| Audit | 239 | 205 |
| Write-downs and impairments of other receivables from clients in the banking business | 195 | 505 |
| Expenses from the disposal of assets | 67 | 56 |
| Sundry other operating expenses | 1,017 | 1,635 |
| Total | 32,104 | 34,596 |
| 1 | [Table 19] |
1 Previous year's values adjusted. The adjustments are under note 3.
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 item "External services - banking business" mainly contains securities settlement and transaction costs in connection with the MLP credit card. 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. Expenses for commercial agents include costs for former consultants and the training allowance granted for new consultants. The other operating costs mainly include expenses for goodwill payments, remuneration for members of the Supervisory Board and vehicle costs.
| All fi gures in €'000 | 1st quarter 2013 | 1st quarter 20121 |
|---|---|---|
| Other interest and similar income | 248 | 530 |
| Interest and similar expenses from fi nancial instruments | – 48 | – 44 |
| Accrued interest on pension provisions | – 143 | – 155 |
| Other interest and similar expenses | – 192 | – 199 |
| Finance cost | 56 | 331 |
| 1 Previous year's values adjusted. The adjustments are disclosed under note 3. |
[Table 20] |
The reduction in the fi nance cost is primarily attributable to low interest income from bank deposits.
Receivables from banking business decreased from € 941,9o6 thsd per December 31, 2o12 to € 913,327 thsd per March 31, 2o13. For further explanations please refer to the section "Financial Position" of the Group Interim Management Report.
| All fi gures in €'000 | March 31, 2013 | Dec. 31, 2012 |
|---|---|---|
| Bonds and other fi xed-income securities | ||
| Held–to-maturity investments | 92,939 | 90,456 |
| Securities rated at fair value through profi t and loss | 5,069 | 5,126 |
| 98,008 | 95,582 | |
| Shares and other variable yield securities | ||
| Available-for-sale fi nancial assets | 6,937 | 6,692 |
| Securities rated at fair value through profi t and loss | 2,057 | 1,840 |
| 8,994 | 8,532 | |
| Fixed-term deposits (loans and receivables) | 99,244 | 30,248 |
| Investments in subsidiaries and associates (available-for-sale fi nancial assets) | 2,850 | 2,756 |
| Total | 209,095 | 137,118 |
| [Table 21] |
The increase in fi nancial investments is primarily attributable to the outfl ow of fi xed-term deposits.
Due to the seasonally stronger year-end business, high receivables from insurance companies as well as high liabilities towards commercial agents at December 31, 2o12 had to be shown which were then balanced out in the fi rst quarter of 2o13. A lower amount of receivables and liabilities were built up in the fi rst quarter of 2o13.
As of March 31, 2o13 the share capital of MLP AG is made up of 1o7,877,738 (December 31, 2o12: 1o7,877,738) no-par-value shares. The retained earnings include satutory reserve of € 3,117 thsd (previous year: € 3,117 thsd).
In accordance with the resolution passed at the Annual General Meeting June 6, 2o13 a dividend of € 34,521 thsd (previous year: € 64,727 thsd) was to be paid for the fi nancial year 2o12. This corresponds to € o.32 per share (previous year: € o.6o).
The consolidated cash fl ow statement 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.
The Cash fl ow from operating activities results from cash fl ows that cannot be defi ned as investing or fi nancing activities. This is determined on the basis of the consolidated net profi t for the year. 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 explanations please refer to the section "Financial Position" of the Management Report.
The Cash fl ow from investing activities is mainly infl uenced by the investment of monies in fi xed-term deposits as well as by matured term investments.
The Cash fl ow from fi nancing activity represents cash-related equity changes, loans used and paid back, as well as payments for the acquisition of additional shares in subsidiaries.
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 investments 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 | March 31, 2013 | March 31, 2012 |
|---|---|---|
| Cash | 31,043 | 33,139 |
| Loans ≤ 3 months | 89,000 | 35,000 |
| Change in cash and cash equivalents from changes to the scope of consolidation | – | 1,354 |
| Cash and cash equivalents | 120,043 | 69,493 |
| [Table 22] |
MLP Finanzdienstleistungen AG receivables 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 business segment "bank" and thus to the cash fl ow from operating activities.
There were no signifi cant changes compared to December 31, 2o12.
The carrying amounts and fair values of fi nancial assets and fi nancial liabilities are broken down into the fi nancial instrument classes and categories as shown in the following table:
| March 31, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| Carrying | No fi nancial instruments according to IAS |
Carrying | No fi nancial instruments according to |
|||
| All fi gures in €'000 | amount | Fair value | 32/39 | amount | Fair value | IAS 32/39 |
| Financial assets measured at fair value | 17,524 | 17,524 | 17,795 | 17,795 | ||
| Fair Value Option | 10,587 | 10,587 | 11,103 | 11,103 | ||
| Receivables from banking business – clients | 3,462 | 3,462 | – | 4,137 | 4,137 | – |
| Financial investments (share certifi cates and structured bonds) |
7,125 | 7,125 | – | 6,966 | 6,966 | – |
| Available-for-sale fi nancial assets | 6,937 | 6,937 | 6,692 | 6,692 | ||
| Financial investments (share certifi cates and investment fund shares) |
6,937 | 6,937 | – | 6,692 | 6,692 | – |
| Financial assets measured at amortised cost | 1,200,945 | 1,239,411 | 1,210,876 | 1,263,886 | ||
| Loans and receivables | 1,108,006 | 1,144,540 | 1,120,420 | 1,171,331 | ||
| Receivables from banking business – clients | 424,058 | 455,949 | – | 427,258 | 476,195 | – |
| Receivables from banking business – banks | 485,807 | 490,451 | – | 510,510 | 512,485 | – |
| Financial investments (fi xed and time deposits) | 99,244 | 99,244 | – | 30,248 | 30,248 | – |
| Other accounts receivable and other assets | 67,854 | 67,854 | 32,633 | 111,721 | 111,721 | 28,028 |
| Cash and cash equivalents | 31,043 | 31,043 | – | 40,682 | 40,682 | – |
| Held to maturity investments | 92,939 | 94,871 | 90,456 | 92,555 | ||
| Financial assets (bonds) | 92,939 | 94,871 | – | 90,456 | 92,555 | – |
| Financial assets measured at cost | 2,850 | 2,850 | 2,756 | 2,756 | ||
| Available-for-sale fi nancial assets | 2,850 | 2,850 | 2,756 | 2,756 | ||
| Financial assets (investments) | 2,850 | 2,850 | – | 2,756 | 2,756 | – |
| Financial liabilities measured at fair value | 230 | 230 | 345 | 345 | ||
| Financial instruments held for trading | 230 | 230 | 345 | 345 | ||
| Other liabilities | 230 | 230 | – | 345 | 345 | – |
| Financial liabilities measured at amortised cost |
974,426 | 970,437 | 987,988 | 985,585 | ||
| Liabilities due to banking business – clients | 901,656 | 893,258 | – | 871,110 | 867,761 | – |
| Liabilities due to banking business – banks | 10,198 | 14,608 | – | 10,498 | 11,443 | – |
| Other liabilities | 62,572 | 62,572 | 26,753 | 106,381 | 106,381 | 24,364 |
| Liabilities due to fi nancial guarantees and credit commitments |
41,050 | 41,050 | – | 43,104 | 43,104 | – |
| [Table 23] |
Insofar as there is an active market for fi nancial assets and fi nancial liabilities, the respective market prices on the closing date are used for determining the fair value. 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 for fi nancial instruments remain unchanged compared to the previous year and are contained in the Annual Report 2o12.
For equity instruments of fi nancial investments not listed on an active market, the fair value is generally determined on the basis of the gross rental method using non-observable parameters such as beta factors or risk-equivalent discount interest rates. If it is not possible to reliably determine the fair value, in particular due to a lack of necessary data on earnings projections, equity instruments not listed on an active market are recognised at their acquisition costs, minus any impairments. At the balance sheet reference date, there is no indication of fair values being lower than carrying amounts. For these fi nancial instruments it is assumed that the fair values are equivalent to the carrying amounts. There was no existing basic intention to sell any of the assets reported at March 31, 2o13.
The fair values determined for measurement in the balance sheet are broken down into the following hierarchy levels:
| March 31, 2013 | Dec. 31, 2012 | |||||
|---|---|---|---|---|---|---|
| All fi gures in €'000 | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 |
| Assets- measured at fair value | ||||||
| Receivables from clients in the banking business |
– | 3,462 | – | – | 4,137 | – |
| Financial assets | 14,062 | – | – | 13,685 | – | – |
| Financial liabilities – measured at fair value | ||||||
| Other liabilities – interest derivatives | – | 230 | – | – | 345 | – |
| [Table 24] |
The fi nancial assets and liabilities measured by MLP at fair value are split into three hierarchy levels in accordance with IFRS 13. Fair values at hierarchy level 1 are determined using the prices available in active markets for the respective fi nancial instrument (quoted market prices). The fair values at hierarchy level 2 are either determined using prices on active markets for comparable, but not identical, fi nancial instruments or using valuation techniques based on data from observable markets. When using valuation techniques, which incorporate a key parameter that cannot be observed in the market, fair values are assigned to hierarchy level 3.
At the balance sheet reference date MLP had no level 3 fair values. No measurement reclassifi cations between the levels were made during the fi rst quarter of 2o13.
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. Beyond this there were no signifi cant changes compared to December 31, 2o12.
There were no notable events after the balance sheet date which may affect the MLP Group's net assets, fi nancial position or results of operations.
Wiesloch, May 14, 2o13
MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Manfred Bauer Reinhard Loose Muhyddin Suleiman
| 05 Figure 01 | Economic growth in Germany | |
|---|---|---|
| 06 Figure 02 | Hesitancy with respect to old-age provision | |
| remains evident | ||
| 07 Figure 03 | Broad-based support for state-susidised | |
| supplementary nusing care insurance | ||
| 08 Figure 04 | Infl ows and outfl ows in various types of mutual | |
| investment funds in Germany in Q1 2013 | ||
| 10 Figure 05 | Revenue from commissions and fees in comparison | |
| to the previous year | ||
| 11 Figure 06 | EBIT in comparison to previous year | |
| 17 Figure 07 | Total revenue and EBIT for the Financial Services | |
| segment | ||
| 18 Figure 08 | Total revenue and EBIT segment Feri | |
| 19 Figure 09 | Sales revenue estimate: 2012–2015 | |
| 21 Figure 10 | Expected growth in GDP in Germany | |
| 21 Figure 11 | Development of operating EBIT |
Figure 12 MLP share, SDAX and DAXsector Financial Services in Q1 2013
| 02 Table 01 | MLP Key fi gures |
|---|---|
| 11 Table 02 | Earnings development of continuing operations |
|---|---|
| 13 Table 03 | Assets as of March 31, 2013 |
| 13 Table 04 | Liabilities and shareholders' equity as of |
| March 31, 2013 | |
| 14 Table 05 | Condensed statement of cash fl ow in continuing |
| operations | |
| 15 Table 06 | Number of employees |
| 23 Table 07 | Key fi gures of the MLP share |
|---|---|
| ------------- | ------------------------------- |
| 24 Table 08 | Income statement for the period from |
|---|---|
| January 1 to March 31, 2013 | |
| 24 Table 09 | Statement of comprehensive income |
| for the period from January 1 to March 31, 2013 | |
| 25 Table 10 | Assets as of March 31, 2013 |
| 25 Table 11 | Liabilities and shareholders' equity as of |
| March 31, 2013 | |
| 26 Table 12 | Condensed statement of cash fl ow for the |
| period from January 1 to March 31, 2013 | |
| 26 Table 13 | Statement of changes in equity |
| Adjustments to the accounting policies – | |
|---|---|
| Statement of fi nancial position | |
| Adjustments to the accounting policies – | |
| Income statement | |
| Information on the reportable business segments | |
| Revenue | |
| Personnel expenses/Number of employees | |
| Other operating expenses | |
| Finance cost | |
| Financial assets | |
| Cash and cash equivalents | |
| Additional information on fi nancial instruments | |
| Hierarchy levels – Fair values | |
| 29 Table 14 29 Table 15 30 Table 16 32 Table 17 32 Table 18 33 Table 19 34 Table 20 34 Table 21 36 Table 22 37 Table 23 38 Table 24 |
Dr. Uwe Schroeder-Wildberg (Chairman, appointed until December 31, 2o17)
Manfred Bauer (Product Management, appointed until April 3o, 2o15)
Reinhard Loose (Controlling, IT and Procurement, Accounting, Risk Management, appointed until January 31, 2o19)
Muhyddin Suleiman (Sales, appointed until September 3, 2o17)
Dr. Peter Lütke-Bornefeld (Chairman, appointed until 2o13)
Dr. h. c. Manfred Lautenschläger (Vice chairman, appointed until 2o13)
Dr. Claus-Michael Dill (appointed until 2o13)
Johannes Maret (appointed until 2o13)
Maria Bähr (Employee representative, appointed until 2o13)
Norbert Kohler (Employee representative, appointed until 2o13)
Telephone +49 (o) 6222 • 3o8 • 832o Fax +49 (o) 6222 • 3o8 • 1131 E-Mail [email protected]
Telephone +49 (o) 6222 • 3o8 • 831o Fax +49 (o) 6222 • 3o8 • 1131 E-Mail [email protected]
May 15, 2o13 Publication of the results for the fi rst quarter. MLP publishes the Interim Report for the fi rst quarter.
June 6, 2o13 Annual General Meeting of MLP AG in Mannheim. MLP AG holds its ordinary Annual General Meeting in the Rosengarten in Mannheim.
August 14, 2o13 Publication of the results for the fi rst half-year and the second quarter. MLP publishes the Interim Report for the fi rst half-year and the second quarter.
November 14, 2o13 Publication of the results for the fi rst nine months and the third quarter. MLP publishes the Interim Report for the fi rst nine months and the third quarter.
All updated Investor Relations dates can be found in our fi nancial calendar at: http://www.mlp-ag.com/investor-relations/fi nancial-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 • 8230 Fax +49 (0) 6222 • 308 • 1131 www.mlp-ag.de
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