Quarterly Report • Aug 9, 2012
Quarterly Report
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Interim Group Report for the fi rst half-year and the second quarter 2012
| All fi gures in € million | 2nd quarter 2012 | 2nd quarter 2011 | 1st half-year 2012 | 1st half-year 2011 | Change |
|---|---|---|---|---|---|
| Continuing operations | |||||
| Total revenue | 112.2 | 109.3 | 233.7 | 240.1 | –2.7 % |
| Revenue Other revenue |
105.9 6.3 |
105.9 3.5 |
222.2 11.5 |
231.4 8.8 |
–4.0 % 30.7 % |
| Operating EBIT (before one-off exceptional costs) | 3.1 | 0.4 | 15.6 | 12.2 | 27.9 % |
| Earnings before interest and tax (EBIT) | 3.1 | –6.8 | 15.6 | 1.7 | >100 % |
| EBIT margin (%) | 2.8 % | –6.2 % | 6.7 % | 0.7 % | >100 % |
| Earnings from continuing | |||||
| operations | 0.8 | –4.9 | 10.2 | –0.2 | – |
| Earnings per share (diluted) in € | 0.01 | –0.04 | 0.09 | 0.00 | – |
| MLP Group | |||||
| Net profi t (total) | 0.8 | –4.4 | 10.2 | 0.3 | >100 % |
| Earnings per share (diluted) in € | 0.01 | –0.04 | 0.09 | 0.00 | – |
| Cash fl ow from operating activities | –5.0 | 7.3 | 31.2 | 56.2 | –44.5 % |
| Capital expenditure | 3.2 | 1.3 | 7.5 | 1.9 | >100 % |
| Shareholders' equity | – | – | 344.7 | 399.3 1 | –13.7 % |
| Equity ratio | – | – | 24.5 % | 26.8 % 1 | –8.5 % |
| Balance sheet total | – | – | 1,404.1 | 1,487.8 1 | – 5.6 % |
| Clients2 | – | – | 804,400 | 794,500 1 | 1.2 % |
| Consultants 2 | – | – | 2,104 | 2,132 1 | – 1.3 % |
| Branch offi ces 2 | – | – | 174 | 178 1 | – 2.2 % |
| Employees | – | – | 1,528 | 1,608 | – 5.0 % |
| Arranged new business 2 | |||||
| Old-age provisions (premium sum in € billion) | 0.7 | 1.0 | 1.4 | 1.9 | – 26.3 % |
| Loans and mortgages | 298.0 | 330.4 | 628.0 | 700.1 | –10.3 % |
| Assets under management in € billion3 | – | – | 20.2 | 20.2 1 | 0.0 % |
[Table 01]
1 As of December 31, 2011.
2 Continuing operations.
3 Calculated according to the method of the German Association of Investment and Asset Management (BVI).
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 € 2o.2 billion and supports more than 8oo,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, fi nancial investment, health insurance, non-life insurance, loans and mortgages and banking. Private individuals with assets above € 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 and the joint venture HEUBECK-FERI Pension Asset Consulting GmbH, MLP also provides companies with independent 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.
In the fi rst half-year of 2o12 the German economy developed robustly by European comparison. According to calculations by the Federal Statistics Offi ce, the price-adjusted gross domestic product (GDP) increased by o.5 % in the fi rst quarter of 2o12 – thus signifi cantly exceeding analysts' estimates of o.1 % to o.2 %. In the second quarter there were signs of a slowdown in this momentum: according to estimates by the DIW (German Institute for Economic Research), GDP rose by just o.2 % compared to the previous quarter. Considering Germany's export dependence as well as the persistently negative infl uences from abroad, these fi gures are remarkable. In this respect, the DIW states that the crisis in the euro-zone is hampering the German economy. Resilient domestic demand was a major contributing factor to the growth in Germany. The labor market remained stable: according to fi gures released by the Federal Employment Agency, the unemployment rate stood at 6.6 % at the end of the fi rst half-year 2o12 compared to 6.7 % in the previous year. However, the Federal Employment Agency also noted that the number of unemployed persons in June fell less sharply than usual and views this aspect as an indication of weakening development. In this environment the future expectations of many citizens remain restrained.
The MLP Group generates almost all its total revenues in Germany. In the fi rst half-year the economic situation had no direct effects on business development in Germany.
In the fi rst half-year 2o12 MLP recorded a decrease in revenues in the health insurance area due to a catch-up effect in the same period of the previous year. Revenues in old-age provision as well as loans and mortgages also remained below the levels of the previous year. In wealth management and non-life insurance, revenues increased signifi cantly compared to the previous year.
During the period under review the European debt crisis and the associated debate about the future and the stability of the euro continued to substantially affect the market for old-age provision products in Germany. In this respect, for example, 46 % of the respondents to a survey expressed growing concern about their old-age provision due to the high level of debt of many euro-zone countries and the euro crisis in general. Around a third of those surveyed fear the threat of infl ation and the consequent erosion of their savings (see fi gure). The old-age provision environment therefore remains challenging. Accordingly, MLP recorded a decrease in the premium sum for the period from January to June 2o12 from € 1.9 billion to € 1.4 billion.
[Figure 02]
The occupation pensions business is playing an increasingly important role within the old-age provision area at MLP and accounted for 12 % of the premium sum. In cooperation with our subsidiary TPC (TPC THE PENSION CONSULTANCY GmbH, Hamburg) we were able to further develop our successful business base.
The German population remains generally sceptical of the future scope of treatments and services that will be provided by the state healthcare system. This uncertainty continues to motivate many people to seek full private healthcare insurance or supplementary healthcare cover. In this respect, a recent survey showed that a clear majority of respondents agreed with the statement that the scope of services and treatments covered by private healthcare insurance is greater than those provided by the state healthcare system. Also, the cost/benefi t ratio and the transparency of private healthcare insurance are perceived as being better than the statutory scheme (see fi gure). Furthermore, a study by Deloitte ("The German healthcare system from a patient's and insuree's perspective") reveals that the Germans are increasingly investing in private insurance cover and opting for appropriate additional cover offered by private providers to supplement their state healthcare insurance. In addition, the market for private health insurance in Germany continues to benefi t from changes to the legal framework conditions that came into effect on January 1, 2o11. This legislation now enables employees with state health insurance to switch to full private health insurance after just once exceeding the so-called annual income threshold of € 5o,85o (2o12). Insurees were previously required to exceed this threshold for three years .
Despite these generally favourable framework conditions MLP recorded, as expected, a revenue decrease in this consulting area in the fi rst half-year. Revenues fell to € 31.8 million and were thus below the previous year (€ 41.8 million), but above the corresponding periods in 2oo9 and 2o1o. This development was attributable to the strong fi rst half-year in the same period of the previous year which was characterised by a catch-up effect due to the easing of the aforementioned restrictions regarding a switch to private health insurance.
[Figure 03]
In the period from January to June 2o12 within the German investment fund industry retail funds registered net infl ows amounting to € 5.8 billion. Once again, the largest increases were recorded in fixed income funds, whereas equity-based funds experienced net outflows (see figure). In view of the European debt crisis, funds with bonds from the dollar area played an important role in the fixed income investment category. The high level of investment willingness on the part of institutional investors led to infl ows into specialist funds amounting to € 3o.9 billion. Non-investment fund assets rose by € o.6 billion. At the reference date on June 3o, 2o12 fund assets managed by German investment fund companies had risen by 5.1 % to € 1,874.4 billion. (December 31, 2o11: € 1,783.o billion).
At MLP, managed client assets stood at € 2o.2 billion and were thus at the level of December 31, 2o11 (€ 2o.2 billion).
The current competitive situation has not fundamentally changed in the fi rst half-year of 2o12 and the industry still has a heterogeneous structure. There are numerous consultants and intermediaries – from banks and insurance companies through to independent fi nancial brokers. They employ different business models, which among other aspects, are differentiated by the breadth of their product portfolio and the consulting approach they adopt as well as by the quality of the consulting provided. Clients therefore experience vastly different levels of quality within the industry. In private client consulting, MLP primarily competes against the banks.
Market regulation is of particular relevance to the future competitive situation. In this respect, the German government made two important decisions last year which were designed to further improve the level of investor protection, the impact of which will begin to be felt during the coming months. Firstly, this concerns the Investor Protection Act ("Anlegerschutz- und Funktionsverbesserungsgesetz") which includes new training standards, a register for all investment advisors as well as so-called product information sheets. These regulations apply to securities service providers such as MLP. Secondly, the revision of the fi nancial investment brokerage and asset investment legislation ("Gesetz zur Novellierung des Finanzanlagenvermittler- und Vermögensanlagerechts") which applies to the hitherto largely unregulated section of the market not covered by the banking supervisory authority. Among other aspects, this legislation also specifi es new training requirements for the brokerage of open and closed funds by intermediaries and largely imposes information, consulting and documentation obligations on this market sector which already apply for banks. During the coming years additional legislation will further tighten the requirements for all market participants which will lead to an acceleration of market consolidation (see page 91 et seq. of the Annual Report 2o11).
In the period from January to June, total revenues amounted to € 233.7 million (€ 24o.1 million). Revenues from commissions and fees accounted for the largest portion of this fi gure and totalled € 2o8.3 million (€ 217.6 million). Interest income rose slightly to € 13.9 million (€ 13.8 million), other revenues amounted to € 11.5 million compared to € 8.8 million in the previous year. This increase was mainly due to the release of provisions .
The revenue breakdown by consulting area reveals that the decrease in total revenues is primarily attributable to MLP's strong performance in private health insurance in the same period of the previous year. This surge stemmed from legislation changes that came into effect on January 1, 2o11 which enabled employees to more easily switch to private health insurance – and consequently led to a catch-up effect, particularly in the fi rst quarter of 2o11. Revenues from health insurance amounted to € 31.8 million and were thus 23.9 % below the previous year (€ 41.8 million). In old-age provision the framework conditions remain diffi cult and many investors continue to be hesitant with respect to long-term investments as a result of the discussion and debate surrounding the on-going European debt crisis. Consequently, revenues fell to € 97.4 million (€ 1o6.9 million). As forecasted, wealth management developed very positively, particularly as a result of the successful business development at the subsidiary Feri. Here revenues increased by 22.4 % to € 49.2 million (€ 4o.2 million). Non-life insurance also registered revenue gains, rising by 8.7 % to € 22.6 million (€ 2o.8 million). Loans and mortgages revenue decreased slightly to € 5.5 million (€ 6.2 million); additional earnings from the joint venture company MLP Hyp amounted to € o.4 million (€ o.5 million).
Viewing the second quarter 2o12 in isolation, MLP grew total revenues by 2.7 % to € 112.2 million (€ 1o9.3 million). Here, revenues from commissions and fees developed positively and amounted to € 99.3 million (€ 98.9 million), due primarily to the positive development in wealth management. Whilst interest income decreased by 4.3 % to € 6.6 million (€ 6.9 million), other revenues –mainly as a result of the release of provisions – rose considerably, increasing by 8o.o % to € 6.3 million (€ 3.5 million).
Overall the revenue development highlights how important it was to signifi cantly broaden the business model in recent years. Therefore, MLP was able to compensate for the currently diffi cult market environment in old-age provision and for the anticipated decrease in health insurance through signifi cant increases in wealth management and in non-life insurance.
In the fi rst half-year commission expenses decreased from € 91.8 million to € 88.8 million which was due to the development of new business. However, commission expenses in the Feri segment increased due to business growth at the Luxembourg-based Feri subsidiary where expenses for items such as custodian banks and fund sales were incurred. Interest expenses in the same period amounted to € 4.2 million and thus remained at the level of the previous year. Personnel expenses in the fi rst half-year 2o12 fell from € 6o.6 million to € 49.2 million. The decrease was attributable, on the one hand, to the fact MLP was able to reduce personnel expenses as planned within the framework of the effi ciency program. In addition, in the same period of the previous year personnel expenses were infl ated by one-off expenses for severance payments. Other operating expenses decreased from € 74.6 million to € 69.8 million.
Overall, MLP continued its successful effi ciency program: in the fi rst half-year the fi xed cost base (defi ned as the sum of personnel costs, depreciation and amortization as well as other operating expenses) after adjustment for incurred exceptional costs amounting to € 1o.5 million, decreased by € 7.o million from € 132.5 million to € 125.5 million. Compared to the fi rst half-year of 2o1o the decrease amounted to € 16.8 million.
Earnings before interest and tax (EBIT) in the fi rst half-year rose from € 1.7 million to € 15.6 million. As the same period in the previous year included one-off expenses of € 1o.5 million, the increase in operating EBIT (EBIT before one-off expenses) amounted to 27.9 %. The fi nance cost improved from € –o.6 million to € o.3 million. This rise is primarily attributable to the absence of previously paid dividends to the former shareholders of Feri AG following MLP's scheduled acquisition of the remaining shares in April 2o11. On the other hand, there was no recurrence of expenses and revenues from interest swaps which had a positive effect on the fi nance cost in the previous year. Group net profi t rose to € 1o.2 million (€ o.3 million).
In the second quarter EBIT climbed from € –6.8 million to € 3.1 million compared to the previous year's second quarter. One-off expenses in the same period of the previous year totalled € 7.3 million, leading to a rise in operating EBIT from € o.4 million to € 3.1 million. The fi nance cost decreased from € o.4 million to € o.1 million. This fall was mainly due to the fact that the fi nance cost in the second quarter 2o11 was positively infl uenced by profi t from the sale of investment fund units. Due to one-off exceptional effects, the tax rate in the second quarter rose to 74 %, leading to a Group result of € o.8 million (€ –4.4 million).
| in € million | 1st half-year 2012 | 1st half-year 2011 | Change |
|---|---|---|---|
| Total revenue | 233.7 | 240.1 | –2.7 % |
| EBIT | 15.6 | 1.7 | >100 % |
| EBIT margin | 6.7 % | 0.7 % | – |
| Finance costs | 0.3 | – 0.6 | – |
| EBT | 15.8 | 1.1 | >100 % |
| EBT margin | 6.8 % | 0.5 % | – |
| Income tax | – 5.6 | – 1.3 | >100 % |
| Net profi t (continuing operations) | 10.2 | –0.2 | – |
| Net margin | 4.4 % | –0.1 % | – |
[Table 02]
At the start of the fi nancial year 2o12 we provided a quantitative forecast for the operating margin (before one-off expenses and acquisitions) referring to the earnings before interest and tax (EBIT) of 15 % in 2o12 as well as a qualitative assessment for revenue development (see page 85 et seq. of the Annual Report 2o11). Accordingly, in 2o12 we expect to achieve moderate growth in old-age provision and in health insurance. In wealth management, we expect stronger growth – not least, due to excellent potential at our subsidiary Feri.
In the fi rst half-year our estimations for wealth management proved to be correct and revenues grew by 22.4 % to € 49.2 million. Health insurance and old-age provision amounted to € 31.8 million and € 97.4 million respectively and thus remained below the same period in the previous year. However, we expect to see a signifi cant pick-up in business in both these consulting areas in the second half-year. At the same time, we also anticipate that the successful development in wealth management will continue. Our revenue development assessment for the three most important consulting areas that we issued at the start of the year thus remains in reach. Nevertheless, revenue development remains somewhat uncertain due to the continuingly challenging market environment.
The development of expenses was also as planned. MLP seeks to reduce its fi xed costs for the fi nancial year 2o12 to € 249 million – a fi gure which is some € 3o million less than 2o1o and € 24 million less than 2o11. Already in the fi rst half-year 2o12 we have achieved a signifi cant portion of these cost savings (see section on "Development of expenses", p. 1o) and all the necessary measures have been initiated.
At June 3o, 2o12 Assets under Management stood at € 2o.2 billion (March 31, 2o12: € 2o.5 billion). Due to the diffi cult market environment, the premium sum in old-age provision decreased to € 1.4 billion (€ 1.9 billion).
MLP welcomed 14,2oo new clients in the fi rst half-year (15,3oo). The total number of clients rose to 8o4,4oo (March 31, 2o12: 799,1oo) and the number of consultants fell slightly to 2,1o4 (March 31, 2o12: 2,121) remaining on a continuous low fl uctuation rate.
At the balance sheet reference date on June 3o, 2o12, the total assets of the MLP Group amounted to € 1,4o4.1 million, corresponding to a decrease of 5.6 % compared to the total net assets at December 31, 2o11 which then amounted to € 1,487.8 million. The main factor infl uencing this change on the asset side of the balance sheet was the decrease in fi nancial investments as well as in cash and cash equivalents which fell from € 263.4 million (December 31, 2o11) to € 223.2 million. On the liabilities side of the balance sheet, the decrease was mainly due to the reduction of equity capital. Both changes are a result of the dividend payment by MLP AG (€ –64.7 million).
On the assets side of the balance sheet other accounts receivable and other assets fell from € 143.6 million (December 31, 2o11) to € 1o6.8 million due to the usual seasonal decrease. This item mainly consists of receivables from insurance companies for whom we have brokered insurance contracts. As a result of 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.
The reduction in receivables from banks from the banking business to € 45o.4 million (December 31, 2o11: € 487.6 million) was mainly attributable to the profi t transfer payment from MLP Finanzdienstleistungen AG to MLP AG. However, this profi t transfer had an opposite effect on cash and cash equivalents at June 3o, 2o12.
The rise in receivables from clients in the banking business by € 27.3 million to € 387.4 million (December 31, 2o11: € 36o.1 million) was mainly due to higher investments of client monies in promissory note bonds. Liabilities towards clients rose by € 39.2 million from € 827.4 million (December 31, 2o11) to € 866.6 million.
| June 30, 2012 | Dec. 31, 2011 | Change |
|---|---|---|
| 139.5 | 140.3 | – 0.6 % |
| 73.3 | 71.6 | 2.4 % |
| 7.4 | 7.5 | –1.3 % |
| 2.0 | 2.9 | –31.0 % |
| 3.6 | 4.7 | –23.4 % |
| 387.4 | 360.1 | 7.6 % |
| 450.4 | 487.6 | – 7.6 % |
| 196.1 | 232.0 | –15.5 % |
| 10.5 | 6.1 | 72.1 % |
| 106.8 | 143.6 | – 25.6 % |
| 27.1 | 31.4 | –13.7 % |
| 1,404.1 | 1,487.8 | – 5.6 % |
[Table 03]
Equity capital decreased from € 399.3 million to € 344.7 million due to the dividend payment for the fi nancial year 2o11 amounting to € 64.7 million. The equity capital position of MLP thus remains very good with an balance sheet equity ratio of 24.5 % (December 31, 2o11: 26.8 %). Changes were primarily recorded in the item "Other liabilities" which decreased from € 147.6 million to € 84.8 million. This was partly due 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. The development of our deposit business is shown in the liabilities towards clients and banks. The liabilities towards clients from the bank business increased from € 827.4 million to € 866.6 million. This mainly relates to a rise in deposits in current and instant access accounts. The decrease in provisions by € 5.2 million to € 82.6 million (December 31, 2o11: € 87.8 million) results from lower provisions such as cancellation risks as well as from share-based credits.
| in € million | June 30, 2012 | Dec. 31, 2011 | Change |
|---|---|---|---|
| Shareholders' equity | 344.7 | 399.3 | –13.7 % |
| Provisions | 82.6 | 87.8 | –5.9 % |
| Deferred tax liabilities | 9.5 | 9.4 | 1.1 % |
| Liabilities due to clients in the banking business | 866.6 | 827.4 | 4.7 % |
| Liabilities due to banks in the banking business | 12.6 | 14.5 | – 13.1 % |
| Tax liabilities | 3.2 | 1.6 | 100.0 % |
| Other liabilities | 84.8 | 147.6 | – 42.5 % |
| Total | 1,404.1 | 1,487.8 | – 5.6 % |
| [Table 04] |
Cash fl ow from operating activities in the continuing operations decreased to € 31.2 million compared to € 56.6 million in the same period of the previous year. Here, main payments result from the deposit business with our clients and from the investment of these monies.
Cash fl ow from investment activities in the continuing operations changed from € –42.3 million to € 47.9 million. In the period under review, matured term deposits amounting to a net value of € 5o.o million were not reinvested, whereas in the comparative period, term deposits amounting to a net value of € 35.o million were reinvested.
The change in cash fl ow from investment activities in the continuing operations is primarily due to the purchase of the remaining Feri shares in the same period of the previous year as well as, on the other hand, to higher dividend payments during the period under review .
Overall, at the end of the fi rst six months of 2o12 the Group's liquid funds stood at around € 12o million. The liquidity situation therefore remains very good. The Group has adequate liquidity reserves available. In addition to the liquid funds, MLP also has access to free credit lines.
| 1st half-year 2011* | |||
|---|---|---|---|
| 125.5 | |||
| –5.0 | 7.6 | 31.2 | 56.6 |
| 67.2 | – 69.3 | 47.9 | – 42.3 |
| –64.7 | – 83.0 | –64.7 | – 83.0 |
| –2.4 | – 144.7 | 14.3 | – 68.7 |
| – | – 0.3 | – | – 0.4 |
| 0.0 | – | 1.4 | – |
| 67.1 | 56.3 | 67.1 | 56.3 |
| 2nd quarter 2012 69.5 |
2nd quarter 2011* 201.3 |
1st half-year 2012 51.4 |
* Adjustment of previous year's fi gures. See page 28.
No capital measures were undertaken during the period under review.
In the fi rst half-year 2o12 MLP invested € 7.5 million which was € 5.6 million more than the corresponding fi gure for the same period in the previous year. Most of this fi gure was allocated to investments in the Financial Services segment – mainly for software and IT infrastructure. All investments were fi nanced from current cash fl ows.
In the fi rst half-year of 2o12 total revenues decreased, whereas earnings before interest and tax (EBIT) rose signifi cantly. In this respect, MLP benefi tted from a lower cost base, and the reduction in fi xed costs (defi ned as the total of personnel expenses, depreciation and amortizations, other operating expenses) that MLP is striving to achieve for the full year was already partially realised in the fi rst half-year. After conclusion of the fi rst six months, MLP still has a very good equity capital base and liquidity. Overall, we are satisfi ed with the business development and 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 reduced during the period under review and was in line with the announced framework. At the reference date on June 3o, 2o12 the Group had a total of 1,528 employees, 8o less than at the end of the same quarter in the previous year and 13 more than at March 31, 2o12.
The reduction compared to June 3o, 2o11 is attributable to two factors. Firstly, during the past 12 months the number of employees in the branches as well as the number of marginal part-time employees and assistants fell slightly. Secondly, the reduction is due to the personnel reduction measures at the company headquarters in Wiesloch that were announced in April 2o11. These were effected – as communicated – partially through active personnel reductions, some of which were not completed until the fi rst quarter 2012 due to contractual obligations. In addition, we have also utilised the natural employee turnover and not recruited for some of the positions within the company after they became vacant.
| June 30, 2012 | June 30, 2011 | |
|---|---|---|
| Financial Services | 1,268 | 1,342 |
| Feri | 252 | 253 |
| Holding | 8 | 13 |
| Total | 1,528 | 1,608 |
[Table 06]
In the fi rst half-year 2012 MLP continued its image campaign which was rolled out in 2o11. The campaign strengthens the position of MLP as a reliable partner and specialist in fi nancial planning, serving the needs of academics. Based on the message "Those who make their career their life's work, should expect the same passion from their fi nancial advisor", the initiative focuses on the requirements of academics with respect to high quality fi nancial consulting.
The MLP client magazine "Forum" appeared in May for the fi rst time as an "e-magazine" on the internet at www.forum-mlp.de. The magazine is now also available as an app.
This year MLP once again acted as title sponsor of the MLP Marathon Mannheim Rhine-Neckar event. The marathon which took place on May 12 is the largest recreational sport gathering in the region and has fi rmly established itself as a core event in the running calendar .
At the end of May MLP presented its service award to product partners in the areas of old-age provision, health insurance and non-life insurance. More than 1,8oo consultants were surveyed by around fi fty insurance companies concerning service quality – which represents an important criterion for consultant and client satisfaction.
The provision of support for students also played an important role for MLP during the period under review: in mid-April the fourth application phase commenced for "Medical Excellence", the support initiative specifi cally for medical students. Since the end of May – and for the ninth time – applications are being accepted for the "Join the Best" initiative designed to assist mobility abroad for academics from all subject disciplines.
In addition, at the end of June the selection process for the recipients of the "MINT Excellence" grants was completed. This initiative supports students of mathematics, information science, natural sciences and technological engineering and was instigated by the Manfred Lautenschläger Foundation – a foundation of the company founder – but is managed by MLP.
During the period under review on March 2o, 2o12 the Supervisory Board of MLP AG unanimously extended the existing service contract of the Chief Executive Offi cer Dr. Uwe Schroeder-Wildberg by fi ve years to December 31, 2o17.
On January 2, 2o12 the renaming of Feri AG was implemented. Previous to that date, the company had operated under the name Feri Finance AG für Finanzplanung und Research. Feri AG heads a corporate group of companies for investment consulting and management, economic research and ratings and is a wholly-owned subsidiary of MLP AG.
Following a decision taken on March 22, 2o12 and with effect from January 1, 2o12, the previously for minority reasons non-consolidated Luxembourg-based subsidiaries Family Private Fund Management Company Sàrl, Ferrum Fund Management Company Sàrl, Ferrum Pension Management Sàrl and Private Trust Management Company Sàrl were retrospectively merged with the since 2o11 fully consolidated Feri Trust (Luxemburg) S.A. (up to March 22, 2o12: Institutional Trust Management Company Sàrl).
Following a decision taken on May 1o, 2o12 with effect from January 1, 2o12 the previously, for minority reasons non-consolidated German subsidiary MLP Media GmbH, Wiesloch was retrospectively merged with the fully-consolidated MLP Finanzdienstleistungen AG .
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 33 et seq. of our Annual Report 2o11.
The MLP Group structures its business into the following operating segments:
A detailed description of the individual segments is contained on pages 56 et seq. of the Annual Report 2o11.
In the fi rst half-year total revenues in the Financial Service segment contracted compared to the same period in the previous year, falling from € 219.2 million to € 2oo.3 million. The decrease was mainly due to lower revenues in the old-age provision and health insurance consulting areas (see "results of operations").
Despite lower total revenues, earnings grew signifi cantly – a development which is primarily attributable to the cost reductions arising from the on-going effi ciency program and to one-off expenses in the same period of the previous year. Against this backdrop, personnel expenses and other operating expenses fell considerably. Earnings before interest and tax (EBIT) in the fi rst half-year thus amounted to € 16.9 million compared to € 6.4 million in the same period of the previous year. The fi nance cost improved to € –o.2 million (€ –o.5 million). This led to improved earnings before tax (EBT) which climbed from € 5.9 million to € 16.8 million.
Compared the same period of the previous year, second quarter total revenues decreased from € 97.9 million to € 89.9 million. EBIT rose to € 2.8 million (€ –5.1 million). EBT increased from € –5.2 million to € 2.8 million .
In the fi rst half-year 2o12 the total revenues of Feri Group rose by 73.2 % to € 36.2 million (€ 2o.9 million), mainly due to the greater business volume at the Luxembourg subsidiary. At the same time, commission expenses increased as a result of higher revenues in Luxembourg. On the other hand, lower personnel expenses had a positive effect. EBT rose from € –o.5 million to € 2.1 million .
Compared to the same quarter of the previous year Feri AG signifi cantly increased total revenues in the second quarter 2o12 from € 11.5 million to € 23.6 million. EBIT climbed from € –o.2 million to € 1.9 million. EBT rose from € –o.2 million to € 1.8 million.
In the Holding segment total revenues fell in the fi rst half-year of 2o12 from € 5.7 million to € 5.1 million. The reduction in personnel expenses more than compensated for the rise in other operating expenses, thus leading to improved EBIT which climbed from € –4.1million to € –3.5 million. Due to a reduction in other interest and similar revenues, the fi nance cost in the same period decreased to € o.5 million (€ 2.1 million). The fi nance cost of the previous year also included the dividend distribution of our subsidiary Feri AG as well as partial forwarding of the dividend to the remaining former managing partners of Feri AG in the fi nancial year 2o11. Following the acquisition of the remaining Feri shares, no further dividend payments will be made to the former managing partners from 2o12. In addition, the previous year included an interest result from swaps of € o.7 million. EBT decreased correspondingly from € –2.o million to € –3.1 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 halfyear. The MLP Group has adequate liquid funds. At the reporting date on June 3o, 2o12, our core capital ratio as prescribed by the supervisory body stood at 17.9 % and continued to far exceed the required 8 % level. 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 65 to 85 of the Annual Report 2o11.
Related party disclosures are contained in the notes of the Annual Report 2o11, page 2oo et seq.
According to information issued by the Federal Government and subsequently confi rmed at the end of April, the German economy is expected to grow by o.7 % in 2o12 and by 1.6 % in the following year. The cited driver of this growth is domestic demand, even if higher prices are hampering actual consumption. German exports are – particularly due to weaker demand from the Eurozone – lower than in the previous year. Other forecasts paint a more optimistic picture. In this respect, the experts at the German Institute for Economic Research (DIW) predict growth of 1.o % in 2o12 and 1.9 % in 2o13. In their estimates, they expect the German domestic economy to play a central role. The German government is forecasting an unemployment rate of 6.7 % for this year. According to government estimates, disposable incomes will rise by 3.3 % in this fi nancial year and by 3.1 % in 2o13.
MLP anticipates that the academic private target client group can benefi t from the economic framework data and will maintain its relatively favourable overall fi nancial position. At the same time, particularly the high earning target client group individuals are aware of the need to invest in private provision to close the gap between their working salary and their expected state pension. However, the evident hesitancy to commit to longer-term investments is likely to persist – not least due to the discussion and debate surrounding the European debt crisis.
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 2o11 on pages 85 et seq. During the fi rst six months of the fi nancial year 2o12 there were no signifi cant changes to the overall situation.
Private old-age provision is an important topic for German society. An increasing number of citizens are concerned about their ability to maintain a decent standard of living in their oldage. In addition, and in response to the demographic development, several reforms have been introduced that have led to signifi cant reductions in the statutory pension scheme – which, in turn, considerably increase the requirement for private provision measures.
At the same time, state subsidies for private and occupational old-age provision have been signifi cantly expanded. In order to address these complex topics, high quality consulting will be necessary, from which MLP should be able to markedly benefi t during the coming years. However, in the short term, the market for old-age provision remains characterised by hesitancy on the part of many consumers with respect to longer-term investments – not least due to the continuing discussion surrounding the debt crisis in Europe .
In the health provision business area the trend towards private health and long-term care insurance remains unbroken. The rising costs within the healthcare system make further reforms in the medium to long term unavoidable. We therefore anticipate that more and more people will wish to switch from the state healthcare system to private health insurance – at least in the form of private supplementary health cover. Accordingly, for 2o12 we expect to assist a large number of clients to choose a suitable full health insurance or supplementary insurance policy to cover their needs. The capping of acquisition commissions and the extension of the cancellation liability period of intermediaries in private health insurance also exert an infl uence on the health provision consulting area. These measures will further alter the market landscape and make business signifi cantly more diffi cult for some sections of the industry. However, for MLP as a client-oriented provider with very low cancellation rates and comprehensive existing client care operations, the effects of such measures are, from a current perspective, manageable. Compared to the current situation, we expect that trailing commissions will play a greater role.
We also see further growth potential in the wealth management area – both in the MLP private client market as well as at Feri. According to the World Wealth Report published by Merrill Lynch Global Wealth Management and Capgemini in October 2o11, Germany is home to over 924,ooo millionaires, 7.2 % more than the previous year. Furthermore, the fi nancial industry expects large account and portfolio reallocations to take place in the coming years – due to generation changes as well as to the fact that Swiss banks have lost some of their appeal to large German investors as a result of the tax agreement with Germany.
Changes to the consulting legislation will also play an important role in the market development. Following the numerous steps taken by the legislator during recent years in order to improve the level of professionalism in the market, new measures were passed in 2o11 such as the Investor Protection Act ("Anlegerschutz- und Funktionsverbesserungsgesetz") and the revision of fi nancial investment brokerage and asset investment legislation ("Gesetz zur Novellierung des Finanzanlagenvermittler- und Vermögensanlagerechts"). Furthermore, implementation of the European guidelines Markets in Financial Instruments II (MiFID II) and Insurance Mediation Directive (IMD II) is planned during the coming years. Proposals for both of these new regulations have already been tabled by the European Commission but must fi rst be discussed and passed by the European Committees. Only then can they be incorporated into national law. From a current perspective, these regulations are expected to come into effect in 2o16.
Overall, the trend towards quality and transparency will continue to strengthen. In general, MLP as a quality provider will benefi t from these developments whilst the consolidation in the market accelerates.
In the fi rst half-year 2o12 MLP once again highlighted its client orientation by further increasing the degree of transparency in wealth management. Accordingly, MLP will pass on all retrocessions – trailing commissions from capital investment companies – to its clients. Overall, MLP offers one of the most attractive cost/benefi t ratios on the market. MLP also emphasised its quality advantage over the market with respect to training: In January the Financial Planning Standards Board Deutschland e. V. accredited MLP as a provider of training for the qualifi cation of Certifi ed Financial Planner (CFP). The CFP is the highest internationally-recognised training standard for fi nancial consultants. In gaining this status, MLP Corporate University has now become one of just three accredited training institutes in Germany – the other two being the European Business School in Oestrich-Winkel and the Frankfurt School of Finance & Management.
For 2o12 MLP continues to expect to achieve a sustainable reduction in annual fi xed costs (defi ned as the sum of personnel expenses, depreciation and amortization as well as other operating expenses) to around € 249 million – which is some € 3o million less than in the fi nancial year 2o1o. In the fi rst half-year alone, MLP decreased the operating fi xed costs by € 7.o million compared to the same period in 2o11 and by € 16.8 million compared to the fi rst half-year 2o1o. The effi ciency program is thus fully on track. We expect revenues in old-age provision and health insurance to pick up signifi cantly in the second half-year. Our assessment that we issued at the beginning of the year, predicting moderately rising revenues in both consulting areas for the full year, thus remains within reach. In wealth management we still anticipate stronger growth. However, the further development remains somewhat uncertain in all consulting areas due to the continuingly challenging market environment.
Overall, we reiterate our guidance to achieve an operating EBIT margin (before one-off expenses and acquisitions) of 15 % in the fi nancial year 2o12.
Signifi cant changes to the opportunities resulting from the framework conditions, corporatestrategic opportunities or business opportunities did not occur during the period under review. Relevant detailed explanations are contained in the Annual Report 2o11 on page 96 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.
The development of global stock markets in the fi rst half-year was characterised by high volatility. The generally positive-trend of the fi rst quarter was broken by a downturn on the stock markets at the start of the second quarter. At the end of the fi rst half-year there were signs of a slight recovery from this downturn. During the period under review the US American Dow Jones Industrial Average benchmark index rose by 5.4 % and closed at 12,88o points on June 29, 2o12. Despite the continuing discussion and debate surrounding the debt situation of certain European countries and the high volatility within the period under review, the German benchmark index DAX also recorded an overall gain in the fi rst half-year 2o12. The index closed at the end of June at 6,416 points, 5.6 % above its level at the start of January 2o12. Following a relative outperformance in the fi rst quarter by the German small cap index SDAX compared to the DAX, the SDAX subsequently forfeited this lead and closed at 4,8o4 points at the end of June, representing a rise of 4.9 % since the beginning of the year. The DAXsector Financial Services index for fi nancial services companies in Germany, posted a gain at the end of June of 12.2 %.
Source: Bloomberg
[Figure 12]
The MLP share closed at € 5.o3 on June 29, 2o12, thus returning to its level of the start of the year when the share was trading at € 5.o5. During this period the share rose by 31.9 % by the end of the fi rst quarter 2o12 but then endured a signifi cant pullback, particularly at the end of the second quarter, due in part to the ex-dividend markdown. For a lengthy term during the period under review the share traded above the sector index and moved within a price corridor of € 5.oo at the end of June and € 6.86 at the beginning of April.
Further information concerning the MLP share is available from our Investor Relations page on the MLP website at www.mlp-ag.com under the heading "MLP-share".
| 1st half-year 2012 | 1st half-year 2011 | |
|---|---|---|
| Share price at the beginning of the half-year | € 5.05 | € 7.64 |
| Share price high | € 6.86 | € 7.85 |
| Share price low | € 5.00 | € 6.41 |
| Share price at the end of the half-year | € 5.03 | € 7.07 |
| Dividend for the previous year | € 0.60 | € 0.30 |
| Market capitalisation (End of reporting period) | € 542,625,022.14 | € 762,695,607.66 |
[Table 07]
At the Annual general Meeting on June 26, 2o12 the shareholders of MLP AG approved by an almost unanimous vote (99.99 %) the proposal by the Executive and Supervisory Boards to pay a dividend of € o.6o per share (previous year: € o.3o). The dividend sum amounted to € 64.7 million. MLP thus offers one of the most attractive dividend yields in Germany and underlines its high dividend continuity for investors.
Overall more than 7oo shareholders attended the Annual General Meeting. They represented some 75 % of the company's share capital and approved all agenda items by a large majority. The resolutions included the discharge of the Executive and Supervisory Boards, the control agreement with the subsidiary Feri AG as well as the appointment of KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, as auditor for the consolidated fi nancial statements 2o12 and for the review of the half-year fi nancial report 2o12.
Further information about all aspects of the Annual General Meeting is available on our Investor Relations page at http://www.mlp-agm.com.
| All fi gures in €'000 | Notes | 2nd quarter 2012 | 2nd quarter 2011 | 1st half-year 2012 | 1st half-year 2011 |
|---|---|---|---|---|---|
| Revenue | (6) | 105,920 | 105,850 | 222,193 | 231,376 |
| Other revenue | 6,319 | 3,456 | 11,508 | 8,772 | |
| Total revenue | 112,239 | 109,306 | 233,701 | 240,148 | |
| Commission expenses | (7) | –45,793 | –43,462 | –88,807 | –91,754 |
| Interest expenses | –2,095 | –1,991 | –4,197 | –4,164 | |
| Personnel expenses | (8) | –23,184 | –30,736 | –49,207 | –60,624 |
| Depreciation and amortisation | –2,969 | –4,195 | –6,549 | –7,817 | |
| Other operating expenses | (9) | –35,258 | –36,041 | –69,765 | –74,569 |
| Earnings from shares accounted for using the equity method | 204 | 275 | 387 | 509 | |
| Earnings before interest and tax (EBIT) | 3,144 | –6,843 | 15,565 | 1,729 | |
| Other interest and similar income | 494 | 800 | 1,024 | 2,048 | |
| Other interest and similar expenses | –367 | –413 | –744 | –2,658 | |
| Finance cost | (10) | 126 | 386 | 280 | –610 |
| Earnings before tax (EBT) | 3,270 | –6,457 | 15,844 | 1,119 | |
| Income taxes | –2,435 | 1,606 | –5,608 | –1,341 | |
| Earnings from continuing operations after tax | 835 | –4,851 | 10,236 | –222 | |
| Earnings from discontinued operations after tax | – | 469 | – | 518 | |
| Net profi t | 835 | –4,355 | 10,236 | 296 | |
| Of which attributable to | |||||
| owners of the parent company | 835 | –4,355 | 10,236 | 296 | |
| Earnings per share in €* | |||||
| From continuing operations | |||||
| basic | 0.01 | –0.04 | 0.09 | 0.00 | |
| diluted | 0.01 | –0.04 | 0.09 | 0.00 | |
| From continuing and discontinued operations | |||||
| basic | 0.01 | –0.04 | 0.09 | 0.00 | |
| diluted | 0.01 | –0.04 | 0.09 | 0.00 | |
* Basis of calculation: Average number of shares at June 30, 2012: 107,877,738. [Table 08]
| All fi gures in €'000 | 2nd quarter 2012 | 2nd quarter 2011 | 1st half-year 2012 | 1st half-year 2011 |
|---|---|---|---|---|
| Net profi t | 835 | –4,355 | 10,236 | 296 |
| Other comprehensive income | ||||
| Gains / losses from changes in the fair value of available-for-sale securities | –1,533 | 61 | –155 | –545 |
| Deferred taxes recognized on components of other comprehensive income | 446 | –48 | 46 | 42 |
| Other comprehensive income after tax | –1,086 | 12 | –109 | –503 |
| Total comprehensive income for the year | –252 | –4,343 | 10,127 | –208 |
| Total comprehensive income attributable to | ||||
| owners of the parent company | –252 | –4,343 | 10,127 | –208 |
[Table 09]
| All fi gures in €'000 | Notes | June 30, 2012 | Dec. 31, 2011 |
|---|---|---|---|
| Intangible assets | 139,498 | 140,331 | |
| Property, plant and equipment | 73,275 | 71,569 | |
| Investment property | 7,442 | 7,481 | |
| Shares accounted for using the equity method | 2,032 | 2,863 | |
| Deferred tax assets | 3,554 | 4,688 | |
| Receivables from clients in the banking business | 387,387 | 360,148 | |
| Receivables from banks in the banking business | (11) | 450,384 | 487,557 |
| Financial assets | (12) | 196,112 | 232,024 |
| Tax refund claims | 10,485 | 6,140 | |
| Other accounts receivable and other assets | (13) | 106,787 | 143,640 |
| Cash and cash equivalents | 27,116 | 31,350 | |
| Total | 1,404,073 | 1,487,792 |
[Table 10]
| All fi gures in €'000 Notes June 30, 2012 Dec. 31, 2011 Shareholders' equity (14) 344,742 399,341 Provisions 82,635 87,849 Deferred tax liabilities 9,507 9,428 Liabilities due to clients in the banking business 866,603 827,413 Liabilities due to banks in the banking business 12,577 14,540 Tax liabilities 3,186 1,585 |
||
|---|---|---|
| Other liabilities (13) 84,823 147,635 |
||
| Total 1,404,073 1,487,792 |
| All fi gures in €'000 | 1st half-year 2012 1st half-year 2011 * | |
|---|---|---|
| Cash fl ow from operating activities | 31,188 | 56,203 |
| Cash fl ow from investing activities | 47,886 | –42,349 |
| Cash fl ow from fi nancing activities | –64,727 | –82,988 |
| Change in cash and cash equivalents | 14,347 | –69,134 |
| Cash and cash equivalents at the end of the period | 67,094 | 56,331 |
| Thereof discontinued operations | ||
| Cash fl ow from operating activities | – | –398 |
| Cash fl ow from investing activities | – | – |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | – | –398 |
| Cash and cash equivalents at the end of the period | – | – |
| * The settlement payment for the acquisition of the remaining shares in Feri AG amounting to € 50,620 thsd was reclassifi ed from | [Table 12] |
cash fl ow from investment activities to cash fl ow from fi nancing activities.
| All fi gures in €'000 | 2nd quarter 2012 2nd quarter 2011 * | |
|---|---|---|
| Cash fl ow from operating activities | –4,952 | 7,271 |
| Cash fl ow from investing activities | –67,237 | –69,299 |
| Cash fl ow from fi nancing activities | –64,727 | –82,985 |
| Change in cash and cash equivalents | –2,442 | –145,014 |
| Cash and cash equivalents at the end of the period | 67,094 | 56,331 |
| Thereof discontinued operations | ||
| Cash fl ow from operating activities | – | –335 |
| Cash fl ow from investing activities | – | – |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | – | –335 |
| Cash and cash equivalents at the end of the period | – | – |
* Previous year's values adjusted. See table 12.
[Table 13]
| All fi gures in €'000 | Share capital |
Capital reserves |
Gains/losses from changes in the fair value of available for-sale securities |
Other equity |
Total shareholders' equity |
|---|---|---|---|---|---|
| As of Jan. 1, 2011 * | 107,878 | 142,184 | 1,193 | 168,731 | 419,984 |
| Dividend | – | – | – | –32,363 | –32,363 |
| Changes to the scope of consolidation | – | – | – | 88 | 88 |
| Transactions with owners | – | – | – | –32,276 | –32,276 |
| Total comprehensive income | – | – | –503 | 296 | –208 |
| As of June 30, 2011 | 107,878 | 142,184 | 690 | 136,751 | 387,501 |
| As of Jan. 1, 2012 | 107,878 | 142,184 | 424 | 148,857 | 399,341 |
| Dividend | – | – | – | –64,727 | –64,727 |
| Transactions with owners | – | – | – | –64,727 | –64,727 |
| Total comprehensive income | – | – | –109 | 10,236 | 10,127 |
| As of June 30, 2012 | 107,878 | 142,184 | 314 | 94,366 | 344,742 |
* Previous year's values adjustments are disclosed in the annual report 2011 on page 134. [Table 14]
| Financial Services | |||
|---|---|---|---|
| All fi gures in €'000 | 2nd quarter 2012 | 2nd quarter 2011 | |
| Revenue | 85,678 | 95,856 | |
| of which total inter-segment revenue | 1,253 | 40 | |
| Other revenue | 4,271 | 2,082 | |
| of which total inter-segment revenue | 438 | 413 | |
| Total revenue | 89,949 | 97,938 | |
| Commission expenses | – 34,620 | – 41,566 | |
| Interest expenses | – 2,095 | – 1,991 | |
| Personnel expenses | – 16,103 | – 23,253 | |
| Depreciation/amortization | – 1,846 | – 2,347 | |
| Impairment | – | –628 | |
| Other operating expenses | – 32,697 | – 33,504 | |
| Earnings from shares accounted for using the equity method | 204 | 275 | |
| Segment earnings before interest and tax (EBIT) | 2,792 | –5,076 | |
| Other interest and similar income | 114 | 49 | |
| Other interest and similar expenses | – 147 | – 199 | |
| Finance cost | – 33 | – 151 | |
| Earnings before tax (EBT) | 2,759 | –5,277 | |
| Income taxes | |||
| Earnings from continuing operations after tax | |||
| Earnings from discontinued operations after tax | – | 496 | |
| Net profi t (total) | |||
| Feri | Holding | Consolidation | Total | ||||
|---|---|---|---|---|---|---|---|
| 2nd quarter 2012 | 2nd quarter 2011 | 2nd quarter 2012 | 2nd quarter 2011 | 2nd quarter 2012 | 2nd quarter 2011 | 2nd quarter 2012 | 2nd quarter 2011 |
| 21,570 | 10,090 | – | – | – 1,328 | – 95 | 105,920 | 105,850 |
| 75 | 56 | – | – | – 1,328 | – 95 | – | – |
| 2,059 | 1,407 | 2,590 | 2,687 | – 2,601 | – 2,720 | 6,319 | 3,456 |
| – | – | 2,163 | 2,307 | – 2,601 | – 2,720 | – | – |
| 23,629 | 11,497 | 2,590 | 2,687 | – 3,929 | – 2,816 | 112,239 | 109,306 |
| – 12,349 | – 1,926 | – | – | 1,176 | 30 | – 45,793 | – 43,462 |
| – | – | – | – | 1 | 1 | – 2,094 | – 1,991 |
| – 6,209 | – 6,651 | – 872 | – 832 | – | – | – 23,184 | – 30,736 |
| – 491 | – 544 | – 632 | – 676 | – | – | – 2,969 | – 3,567 |
| – | – | – | – | – | – | – | –628 |
| – 2,728 | – 2,545 | – 2,501 | – 2,804 | 2,668 | 2,811 | – 35,258 | – 36,041 |
| – | – | – | – | – | – | 204 | 275 |
| 1,852 | – 169 | – 1,414 | – 1,625 | – 85 | 26 | 3,144 | –6,843 |
| 4 | 9 | 374 | 748 | 2 | – 6 | 494 | 800 |
| – 97 | – 8 | – 219 | – 216 | 96 | 10 | – 368 | – 413 |
| – 93 | 1 | 154 | 532 | 98 | 4 | 126 | 386 |
| 1,759 | – 168 | – 1,260 | – 1,093 | 13 | 30 | 3,270 | –6,457 |
| – 2,435 | 1,606 | ||||||
| 835 | –4,851 | ||||||
| – | 496 | ||||||
| 835 | –4,355 | ||||||
| [Table 15] |
| Financial Services | |||
|---|---|---|---|
| All fi gures in €'000 | 1st half-year 2012 | 1st half–year 2011 | |
| Revenue | 192,377 | 212,976 | |
| of which total inter-segment revenue | 2,504 | 99 | |
| Other revenue | 7,941 | 6,258 | |
| of which total inter-segment revenue | 861 | 843 | |
| Total revenue | 200,318 | 219,234 | |
| Commission expenses | – 76,073 | – 89,417 | |
| Interest expenses | – 4,197 | – 4,165 | |
| Personnel expenses | – 34,862 | – 43,815 | |
| Depreciation/amortization | – 4,288 | – 4,710 | |
| Impairment | – | – 628 | |
| Other operating expenses | – 64,346 | – 70,631 | |
| Earnings from shares accounted for using the equity method | 387 | 509 | |
| Segment earnings before interest and tax (EBIT) | 16,940 | 6,376 | |
| Other interest and similar income | 198 | 107 | |
| Other interest and similar expenses | – 370 | – 579 | |
| Finance cost | – 172 | – 473 | |
| Earnings before tax (EBT) | 16,768 | 5,903 | |
| Income taxes | |||
| Earnings from continuing operations after tax | |||
| Earnings from discontinued operations after tax | – | 518 | |
| Net profi t (total) | |||
| Feri | Holding | Consolidation | Total | ||||
|---|---|---|---|---|---|---|---|
| 1st half-year 2012 | 1st half–year 2011 | 1st half-year 2012 | 1st half–year 2011 | 1st half-year 2012 | 1st half–year 2011 | 1st half-year 2012 | 1st half–year 2011 |
| 32,547 | 18,600 | – | – | – 2,730 | – 200 | 222,193 | 231,376 |
| 226 | 101 | – | – | – 2,730 | – 200 | – | – |
| 3,688 | 2,284 | 5,066 | 5,688 | – 5,186 | – 5,458 | 11,508 | 8,772 |
| – | – | 4,326 | 4,615 | – 5,186 | – 5,458 | – | – |
| 36,234 | 20,884 | 5,066 | 5,688 | – 7,916 | – 5,658 | 233,701 | 240,148 |
| – 15,144 | – 2,387 | – | – | 2,410 | 50 | – 88,807 | – 91,754 |
| – | – | – | – | 1 | 1 | – 4,196 | – 4,164 |
| – 12,255 | – 13,113 | – 2,090 | – 3,696 | – | – | – 49,207 | – 60,624 |
| – 993 | – 1,070 | – 1,267 | – 1,408 | – | – | – 6,549 | – 7,189 |
| – | – | – | – | – | – | – | –628 |
| – 5,578 | – 4,846 | – 5,241 | – 4,679 | 5,401 | 5,587 | – 69,765 | – 74,569 |
| – | – | – | – | – | – | 387 | 509 |
| 2,263 | – 533 | – 3,533 | – 4,095 | – 105 | – 20 | 15,565 | 1,729 |
| 9 | 17 | 905 | 4,407 | – 88 | –2,483 | 1,024 | 2,048 |
| – 154 | – 12 | – 431 | – 2,285 | 210 | 218 | – 745 | – 2,658 |
| – 145 | 5 | 474 | 2,122 | 121 | – 2,265 | 279 | – 610 |
| 2,118 | – 528 | – 3,058 | – 1,973 | 16 | – 2,284 | 15,844 | 1,119 |
| – 5,608 | – 1,341 | ||||||
| 10,236 | –222 | ||||||
| – | 518 | ||||||
| 10,236 | 296 | ||||||
| [Table 16] |
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 .
The same consolidation principles and accounting policies as for the consolidated fi nancial statements of the fi nancial year 2o11 have been applied to this interim fi nancial report. These are presented in the Group notes of the annual report 2o11 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, 2o11 except the standards and interpretations to be used for the fi rst time in the fi nancial year 2o12 .
In the fi nancial year 2o12 the following new or revised standards are to be used for the fi rst time:
• Amendment to IFRS 7 "Financial Instruments: Disclosures".
MLP does not expect any effects on the net assets, fi nancial position or profi t situation from the amendment to IFRS 7 (adopted by the EU in November 2o11), but there may be more detailed information requirements.
Following a resolution passed on March 22, 2o12 and with effect from January 1, 2o12, the previously, for minority reasons, non-consolidated Luxembourg-based subsidiaries Family Private Fund Management Company Sàrl, Ferrum Fund Management Company Sàrl, Ferrum Pension Management Sàrl and Private Trust Management Company Sàrl were retrospectively merged with the since 2o11 fully consolidated Feri Trust (Luxembourg) S.A. (up to March 22, 2o12: Institutional Trust Management Company Sàrl).
Following a resolution passed on May 1o, 2o12 and with effect from January 1, 2o12, the previously, for minority reasons, non-consolidated subsidiary MLP Media GmbH, Wiesloch was retrospectively merged with the fully consolidated MLP Finanzdienstleistungen AG.
Due to the seasonal development of its business, the Group generally expects earnings from continuing operations to be higher in the second half-year than in the fi rst half-year.
| All fi gures in €'000 | 2nd quarter 2012 | 2nd quarter 2011 | 1st half-year 2012 | 1st half-year 2011 |
|---|---|---|---|---|
| Old-age provision | 48,414 | 56,374 | 97,361 | 106,882 |
| Wealth management | 29,920 | 20,857 | 49,167 | 40,206 |
| Health insurance | 12,692 | 13,707 | 31,775 | 41,751 |
| Non-life insurance | 4,731 | 3,984 | 22,608 | 20,796 |
| Loans and mortgages | 2,599 | 3,040 | 5,504 | 6,167 |
| Other commission and fees | 981 | 982 | 1,858 | 1,757 |
| Commission and fees | 99,338 | 98,945 | 208,272 | 217,558 |
| Interest income | 6,582 | 6,905 | 13,921 | 13,818 |
| Total | 105,920 | 105,850 | 222,193 | 231,376 |
[Table 17]
Commission expenses decreased in the period from January 1 to June 3o, 2o12 compared to the same period of the previous year from € 91,754 thsd to € 88,8o7 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 decreased in the period from January 1 to June 3o, 2o12 compared to the same period of the previous year from € 6o,624 thsd. to € 49,2o7 thsd. For further explanations please refer to the section "Personnel" of the Group Interim Management Report.
At June 3o, 2o12, the MLP Group had the following numbers of employees in the strategic fi elds of business:
| All fi gures in €'000 | June 30, 2012 | of which part-time employees |
June 30, 2011 | of which part-time employees |
|---|---|---|---|---|
| Financial Services | 1,268 | 108 | 1,342 | 120 |
| Feri | 252 | 63 | 253 | 59 |
| Holding | 8 | – | 13 | 1 |
| Total | 1,528 | 171 | 1,608 | 180 |
[Table 18]
| All fi gures in €'000 | 2nd quarter 2012 | 2nd quarter 2011 | 1st half-year 2012 | 1st half-year 2011 |
|---|---|---|---|---|
| IT operations | 11,040 | 12,009 | 21,777 | 24,206 |
| Rental and leasing | 3,799 | 4,099 | 7,484 | 8,043 |
| Administration operations | 2,966 | 3,304 | 6,291 | 6,548 |
| Consultancy | 3,441 | 2,802 | 6,450 | 5,816 |
| Representation and advertising | 3,020 | 2,309 | 5,276 | 4,231 |
| External services – banking business | 1,699 | 1,669 | 3,419 | 3,279 |
| Premiums and fees | 1,131 | 1,066 | 2,858 | 2,305 |
| Training and further education | 811 | 730 | 1,833 | 2,643 |
| Travel expenses | 903 | 1,301 | 1,704 | 2,552 |
| Write-downs and impairments of other receivables and other assets |
376 | 102 | 517 | 1,797 |
| Expenses for commercial agents | 809 | 949 | 1,488 | 1,781 |
| Insurance | 681 | 845 | 1,448 | 1,590 |
| Entertainment | 760 | 650 | 1,560 | 1,799 |
| Write-downs and impairments of other receiv | ||||
| ables from clients in the banking business | 717 | 538 | 1,223 | 1,062 |
| Maintenance | 290 | 343 | 798 | 866 |
| Other personnel costs | 362 | 353 | 659 | 660 |
| Audit | 209 | 207 | 414 | 439 |
| Expenses from the disposal of assets | 21 | 64 | 77 | 71 |
| Sundry other operating expenses | 2,222 | 2,702 | 4,498 | 4,879 |
| Total | 35,258 | 36,041 | 69,765 | 74,569 |
The costs of IT operations are mainly attributable to IT services and computer center services that have been outsourced to an external service provider. The consulting costs are made up of tax advice costs, legal advice costs as well as general and IT consulting costs. The expenses for administration operations contain costs relating to building operations, offi ce costs and communication costs. Expenses for representation and advertizing 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. Depreciation and impairment on other receivables and other assets comprise allowances for receivables from commercial agents. Expenses for commercial agents include costs for former consultants and the training allowance granted for new consultants. Sundry other operating expenses essentially comprise external services, expenses for the participation program, car costs and Supervisory Board remuneration.
| All fi gures in €'000 | 2nd quarter 2012 | 2nd quarter 2011 | 1st half-year 2012 | 1st half-year 2011 |
|---|---|---|---|---|
| Other interest and similar income | 494 | 800 | 1,024 | 2,048 |
| Interest and similar expenses from fi nancial instruments |
–35 | –94 | –79 | –2,017 |
| Accrued interest on pension provisions | –333 | –320 | –666 | –641 |
| Other interest and similar expenses | –368 | –413 | –745 | –2,658 |
| Finance cost | 126 | 386 | 279 | –610 |
[Table 20]
The improved fi nancial result is primarily attributable to the absence of dividend payments to former shareholders of Feri AG, which, in the previous year, led to interest expenses amounting to € 1,74o thsd. On the other hand, there was no recurrence of expenses and revenue from interest swaps which positively infl uenced the fi nancial result in the previous year.
The change in receivables from banks from € 487,557 thsd per December 31, 2o11 to € 45o,384 thsd per June 3o, 2o12, is mainly attributable to the profi t transfer payment by MLP Finanzdienstleistungen AG to MLP AG for the fi nancial year 2o11 .
| All fi gures in €'000 | June 30, 2012 | Dec. 31, 2011 |
|---|---|---|
| Securities rated at fair value through profi t and loss | 6,994 | 6,695 |
| Available for sale | ||
| Securities | 7,032 | 8,522 |
| Investments | 2,750 | 2,774 |
| Held-to-maturity securities | 104,080 | 108,768 |
| Loans and receivables | 75,257 | 105,265 |
| Total | 196,112 | 232,024 |
| [Table 21] |
The decrease 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, 2o11 had to be shown which were then balanced out in the fi rst quarter of 2o12. A lower amount of receivables and liabilities were built up in the fi rst quarter of 2o12.
As of June 3o, 2o12 the share capital of MLP AG is made up of 1o7,877,738 no-par-value shares (December 31, 2o11: 1o7,877,738 no-par-value shares .
The Executive and Supervisory Board propose to the Annual General Meeting on June 26, 2o12 a dividend of € 64,727 thsd (previous year: € 32,363 thsd) for the fi nancial year 2o11. This corresponds to € o.6o per share (previous year: € o.3o per share) .
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 from continuing operations, current earnings and profi t from the sale of discontinued operations. 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 | June 30, 2012 | June 30, 2011 |
|---|---|---|
| Cash | 25,720 | 36,331 |
| Loans ≤ 3 months | 40,000 | 20,000 |
| Liabilities to banks due on demand | –23 | – |
| Change in cash and cash equivalents from changes to the scope of consolidation | 1,397 | – |
| Cash and cash equivalents | 67,093 | 56,331 |
| [Table 22] |
The receivables from banks of MLP Finanzdienstleistungen AG are not included in cash and cash equivalents, as they are to be attributed to the operating activities of the banking business segment.
There were no signifi cant changes compared to December 31, 2o11.
Net income from discontinued operations breaks down as follows.
| All fi gures in €'000 | 2nd quarter 2012 | 2nd quarter 2011 | 1st half-year 2012 | 1st half-year 2011 |
|---|---|---|---|---|
| Operating profi t | ||||
| Earnings from the sale/disclosure of operations before tax |
– | 700 | – | 732 |
| Income taxes | – | –205 | – | –214 |
| Earnings from the sale of operations after tax |
– | 496 | – | 518 |
| Earnings from discontinued operations after tax |
– | 496 | – | 518 |
| Earnings per share in € | ||||
| from discontinued operations | ||||
| basic and diluted | – | 0.00 | – | 0.00 |
| [Table 23] |
There were no signifi cant changes compared to December 31, 2o11.
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, 2o11.
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, August 7, 2o12
MLP AG
Executive Board
We have reviewed the condensed interim consolidated fi nancial statements – comprising the balance sheet, the income statement and comprehensive income, the condensed cash fl ow statement, the statement of changes in equity and selected explanatory notes – together with the interim group management report of MLP AG, Wiesloch, for the period from January 1, 2o12 to June 3o, 2o12 that are part of the semi annual fi nancial report according to § 37w WpHG ("Wertpapierhandelsgesetz": German Securities Trading Act). The preparation of the condensed interim consolidated fi nancial statements in accordance with those IFRS applicable to interim fi nancial reporting as adopted by the EU, and of the interim group management report in accordance with the requirements of the WpHG applicable to interim group management reports, is the responsibility of the Company's management. Our responsibility is to issue a report on the condensed interim consolidated fi nancial statements and on the interim group management report based on our review.
We performed our review of the condensed interim consolidated fi nancial statements and the interim group management report in accordance with the German generally accepted standards for the review of fi nancial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany, IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated fi nancial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim fi nancial reporting as adopted by the EU, and that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a fi nancial statement audit. Since, in accordance with our engagement, we have not performed a fi nancial statement audit, we cannot issue an auditor's report.
Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated fi nancial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim fi nancial reporting as adopted by the EU, or that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports.
Frankfurt am Main, August 8, 2o12
KPMG AG Wirtschaftsprüfungsgesellschaft
Dr. Hübner Fust Wirtschaftsprüfer Wirtschaftsprüfer
(German Public Auditor) (German Public Auditor)
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 7, 2o12
MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Manfred Bauer Reinhard Loose Muhyddin Suleiman
| 05 Figure 01 | German Gross Domestic Product, change in % compared to the previous quarter |
|---|---|
| 06 Figure 02 | There is "increasing concern about old-age provision" |
| 07 Figure 03 | Comparison between private health insurance and the state healthcare system |
| 08 Figure 04 | Infl ows and outfl ows in various types of mutual investment funds in Germany January – June 2012 |
| 09 Figure 05 | Total revenue from continuing operations |
| 11 Figure 06 | EBIT from continuing operations |
| 18 Figure 07 | Total revenue and EBIT for the Financial Services segment |
| 18 Figure 08 | Total revenue and EBIT for the Feri segment |
| 20 Figure 09 | Expected growth in GDP in Germany |
| 22 Figure 10 | Anticipated development of revenue 2012 |
| 23 Figure 11 | Development of the operating EBIT margin 2004–2012 |
| 24 | Figure 12 | MLP share, SDAX and DAXsector Financial Services |
|---|---|---|
| in the fi rst half-year 2012 |
02 Table 01 MLP Key fi gures
| 11 Table 02 | Earnings development of continuing operations | |
|---|---|---|
| 13 Table 03 | Assets as of June 30, 2012 | |
| 13 Table 04 | Liabilities and shareholders' equity as of | |
| June 30, 2012 | ||
| 14 Table 05 | Condensed statement of cash fl ow in continuing | |
| operations | ||
| 15 Table 06 | Number of employees | |
25 Table 07 Key fi gures of the MLP share
| 26 Table 08 | Income statement for the period from | |
|---|---|---|
| January 1 to June 30, 2012 | ||
| 27 Table 09 | Statement of comprehensive income | |
| for the period from January 1 to June 30, 2012 | ||
| 27 Table 10 | Assets as of June 30, 2012 | |
| 27 Table 11 | Liabilities and shareholders' equity as of | |
| June 30, 2012 | ||
| 28 Table 12 | Condensed statement of cash fl ow for the | |
| period from January 1 to June 30, 2012 | ||
| 28 Table 13 | Condensed statement of cash fl ow for the period | |
| from April 1 to June 30, 2012 | ||
| 29 Table 14 | Statement of changes in equity | |
| 30 Table 15 | Segment reporting (quarterly comparison) | |
|---|---|---|
| 32 Table 16 | Segment reporting (half-year comparison) | |
| 35 Table 17 | Revenue | |
| 36 Table 18 | Personnel expenses/Number of employees | |
| 36 Table 19 | Other operating expenses | |
| 37 Table 20 | Finance cost | |
| 38 Table 21 | Financial assets | |
| 39 Table 22 | Cash and cash equivalents | |
| 40 Table 23 | Net income from discontinued operations | |
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, 2o14)
Muhyddin Suleiman (Sales, appointed until September 3, 2o17) Supervisory Board 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]
November 19, 2o12 Roadshow in London. MLP corporate presentation to investors including aspects such as the company's activities and strategy as well as the long-term prospects for the company.
Publication of the results for the fi rst nine months and the third quarter 2o12. MLP publishes the Interim Report for the fi rst nine months and the third quarter 2o12.
October 17–18, 2o12 Roadshow in New York. MLP corporate presentation to investors including aspects such as the company's activities and strategy as well as the long-term prospects for the company.
All updated Investor Relations dates can be found in our fi nancial calendar at: http://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, Germany Tel +49 (0) 6222 • 308 • 8320 Fax +49 (0) 6222 • 308 • 1131 www.mlp-ag.com
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