Quarterly Report • Nov 10, 2011
Quarterly Report
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Interim Group Report for the fi rst nine months and for the third quarter 2011
| All fi gures in € million | 3rd quarter 2011 | 3rd quarter 2010 | 9 months 2011 | 9 months 2010 | Change |
|---|---|---|---|---|---|
| Continuing operations | |||||
| Total revenue | 116.3 | 116.0 | 356.5 | 348.8 | 2.2 % |
| Revenue | 112.3 | 111.0 | 343.7 | 332.3 | 3.4 % |
| Other revenue | 4.0 | 5.0 | 12.8 | 16.6 | –22.9 % |
| Operating EBIT (before one-off exceptional costs) | 6.5 | 8.7 | 18.7 | 17.0 | 10.0 % |
| Earnings before interest and tax (EBIT) | 2.9 | 8.7 | 4.6 | 17.0 | –72.9 % |
| EBIT margin (%) | 2.5% | 7.5% | 1.3% | 4.9% | – |
| Earnings from continuing operations |
1.6 | 6.8 | 1.4 | 12.3 | –88.6 % |
| Earnings per share (diluted) in € | 0.02 | 0.06 | 0.01 | 0.11 | –90.9 % |
| MLP Group | |||||
| Net profi t (total) | 1.7 | 7.2 | 2.0 | 12.5 | –84.0 % |
| Earnings per share (diluted) in € | 0.02 | 0.07 | 0.02 | 0.12 | –83.3 % |
| Cash fl ow from operating activities | 0.6 | 15.0 | 56.8 | 93.0 | –38.9 % |
| Capital expenditure | 2.3 | 0.9 | 4.1 | 3.2 | 28.1 % |
| Shareholders' equity | – | – | 397.1 | 428.4 1 | –7.3 % |
| Equity ratio | – | – | 28.6 % | 28.5 %1 | – |
| Balance sheet total | – | – | 1.390.7 | 1.505.4 1 | – 7.6 % |
| Clients2 | – | – | 785.500 | 774.500 1 | 1.4 % |
| Consultants 2 | – | – | 2.160 | 2.273 1 | – 5.0 % |
| Branch offi ces 2 | – | – | 179 | 192 1 | – 6.8 % |
| Employees | – | – | 1.563 | 1.660 | – 5.8 % |
| Arranged new business 2 | |||||
| Old-age provisions (premium sum in € billion) | 1.0 | 1.0 | 2.9 | 3.0 | – 3.3 % |
| Loans and mortgages | 329 | 324 | 1,030 | 902 | 14.2 % |
| Assets under management in € billion | – | – | 19.3 3 | 19.8 1.3 | –2.5 % |
As at December 31, 2010. 2 Continuing operations.
3 Calculated according to the method of the German Association of Investment and Asset Management (BVI). [Table 01]
The fi rst nine months and the third quarter 2011 at a glance:
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 € 19.3 billion and supports more than 785,5oo private and over 4,ooo corporate clients. 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 old-age 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.
Following strong growth in the German economy in the fi rst quarter 2o11, the second quarter 2o11 saw a signifi cant weakening of this momentum. However, initial estimates suggest that the German economy grew more strongly again in the third quarter 2o11. According to provisional calculations by the DIW (German Institute for Economic Research), the gross domestic product probably grew by o.4 % in the third quarter of 2o11. Strong order books in the construction and manufacturing industries contributed signifi cantly to this positive economic development. The German labour market also benefi tted from this growth momentum. At the end of the third quarter, the unemployment rate in Germany stood at 6.6 %, compared to 7.2 % one year ago.
The MLP Group, which generates almost 1oo % of its total revenue in Germany, was able to partially benefi t from the economic climate. In the fi rst nine months of 2o11, revenues in the health insurance business rose signifi cantly and the wealth management area also slightly surpassed the level achieved in the previous year. Although MLP recorded a decrease in the old-age provision area on a nine-month basis, the decline was considerably smaller in the third quarter than in the fi rst half-year.
[Figure 01]
The old-age provision market in Germany continues to be infl uenced by the discussions concerning the effects of the debt crisis in Europe and the upheavals on the capital markets. Against this backdrop, many consumers remain hesitant with respect to the conclusion of long-term contracts for private and occupational pensions. However, surveys suggest that the willingness on the part of consumers with respect to old-age provision has recently risen again to some extent (see graph). According to fi gures released by the GDV (German Insurance Association) the premium sum for new business in the fi rst nine months fell by around 2 % to € 1o6.4 billion.
At MLP, the premium sum in the period from January to September 2o11 decreased slightly from € 3.o billion to € 2.9 billion. However, there were signs of a slight improvement, particularly in the third quarter in which the premium sum amounted to € 1.o billion and remained at the previous year's level (€ 1.o billion).
[Figure 02]
In the third quarter of 2o11 the private health insurance market in Germany continued to benefi t from the legal framework changes which came into effect on January 1, 2o11. Since the introduction of this legislation it has been easier for state healthcare system insurees to switch to private health insurance. Furthermore, the general uncertainty on the part of state healthcare system insurees with respect to the future scope of treatment and services led to greater willingness to opt for full private health insurance or supplementary healthcare cover (see graph).
This positive market environment is also refl ected at MLP. In the fi rst nine months of the fi nancial year 2o11 the independent fi nancial services and wealth management consulting company achieved revenues in this business area amounting to € 56.8 million (9M 2o1o: € 39.4 million).
The observed development in the German investment fund industry since the start of the current fi nancial year continued in the third quarter of 2o11. The already existing uncertainty on the part of private investors was further compounded by the upheavals on the global equity markets between July and September. In this period the German benchmark index DAX fell by almost 26 %. This led to outfl ows from retail funds amounting to € 4.9 billion until end of August 2o11 compared to the end of 2o1o. In contrast, high investment willingness on the part of institutional investors resulted in infl ows totalling € 2o.o billion into specialised funds. Assets outside of investment funds reduced by € 3.6 billion. Overall, at the reference date on August 31, 2o11, the total managed total assets of registered investment funds in Germany decreased by 4 % to € 1,762.3 billion (December 2o1o: € 1,829.6 billion).
The development on the capital markets also affected MLP. Due, above all, to the markedly negative development in numerous investment categories in the third quarter of 2o11, managed client assets fell from € 19.8 billion on December 31, 2o1o to € 19.3 billion on September 3o, 2o11.
Infl ows and outfl ows in various types of mutual investment funds in Germany until August 31, 2011 (in € billion)
The competitive situation in the German fi nancial services market has not fundamentally changed in the fi rst nine months of 2o11. In the market 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 the product portfolio and the consulting approach as well as by the quality of the consulting offered. In the private client consulting area, MLP faces competition primarily from commercial and private banks.
Market regulation is of particular relevance to the future competitive situation. In this respect the German government made two important decisions during the course of the year which are designed to further improve the level of investor protection: The investor protection act ("Anlegerschutzund Funktionsverbesserungsgesetz") which was passed in spring this year 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. For the hitherto largely unregulated section of the market, which is not covered by the banking supervisory authority, the Federal Cabinet passed legislation in October concerning the revision of the fi nancial investment brokerage and asset investment act ("Finanzanlagenvermittler- und Vermögensanlagerecht") which among other aspects, 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 the legislator will further tighten the requirements for all market participants and will continue to push consolidation.
In the period from January to September 2o11, MLP increased total revenues by 2 percent to € 356.5 million (9M 2o1o: € 348.8 million). This growth was mainly driven by the successful development in revenues from commissions and fees which rose by 3 percent to € 322.8 million (€ 313.4 million). Interest income also developed positively, amounting to € 2o.9 million (€ 18.8 million). However, other revenues decreased due to lower recharges to MLP consultants falling by 23 percent to € 12.8 million (€ 16.6 million).
The breakdown of the revenues from commissions and fees shows that the strongest growth was in health insurance where revenues grew by 44 percent to € 56.8 million (€ 39.4 million). The rise in demand was mainly due to the abolition of the three-year waiting period for employees wishing to switch to private health insurance as well as to the increasingly sceptical perception of the level of services and care provided by the state healthcare system. In wealth management, revenues rose by 4 percent to € 59.2 million (€ 57.1 million) thanks to positive business development at both MLP and the subsidiary Feri. Against the backdrop of uncertainty on the capital markets, clients' interest in buying their own home remained high and helped to expand revenues from loans and mortgages from € 7.9 million to € 9.3 million. At the same time the earnings from the joint venture company MLP Hyp increased from € o.8 million to € o.9 million. Revenues from non-life insurance amounted to € 25.o million and were thus also slightly above the previous year (€ 23.9 million). In old-age provision MLP maintained the upward trend. Although revenues in the third quarter 2o11 fell slightly by 2 percent to € 62.7 million (€ 64.1 million), the decrease continued to reduce compared to the fi rst quarter (minus 14 percent) and to the second quarter (minus 6 percent).
In the third quarter of 2o11 the framework conditions deteriorated signifi cantly compared to the same period in the previous year. This was attributable to the discussions surrounding the effects of the debt crisis in Europe, the upheavals on the capital markets and the less favourable economic outlook for the coming year. Despite this situation, total revenues amounted to € 116.3 million and were slightly above the previous year's level of € 116.o million. The revenues from commissions and fees also surpassed the previous year, rising from € 1o4.6 million to € 1o5.3 million. Interest income increased by 9 % to € 7.o million (€ 6.4 million). Other revenues decreased from € 5.o million to € 4.o million.
In the fi rst nine months of 2o11 commission expenses increased from € 118.4 million to € 135.5 million. In addition to the revenue-related rise, the higher expenses were above all due to the generally improved results of our branches as well as to an adjustment of the trailer commission paid to our consultants for existing contracts with their clients. In the same period, interest expenses fell from € 7.1 million to € 6.3 million.
Our announced investment and effi ciency programme affected various cost items in the fi rst nine months of the year. One-off exceptional costs for severance payments were major contributors to the rise in personnel expenses to € 85.4 million (€ 77.6 million). On the other hand, the effi ciency programme measures led to a reduction in other operating expenses from € 117.4 million to € 114.2 million.
After adjustment of the fi xed costs – consisting of personnel expenses, depreciation and amortisation as well as other operating expenses – to take account of the exceptional costs resulting from the investment and effi ciency programme, these decreased in the fi rst nine months of 2o11 from € 2o7.2 million to € 196.8 million. A portion of these cost savings is due to temporary effects, such that at September 3o, 2o11 MLP had achieved around € 7 million of the targeted fi xed cost reductions of at least € 3o million by the end of the fi nancial year 2o12.
Earnings before interest and taxes before one-offs (Operating EBIT) in the fi rst nine months increased by 1o percent from € 17.o million to € 18.7 million. As already announced in April, one-off exceptional costs were incurred within the framework of the investment and effi ciency programme which amounted to € 14.1 million during the period from January to September. This resulted in EBIT of € 4.6 million (€ 17.o million). Group net profi t fell accordingly to € 2.o million (€ 12.5 million). Earnings per share (basic and diluted) thus amounted to € o.o2 (€ o.12).
In the third quarter of 2o11 operating EBIT decreased from € 8.7 million to € 6.5 million. After adjustment for one-off exceptional costs of around € 3.6 million, EBIT amounted to € 2.9 million (€ 8.7 million). Earnings from the continuing operations fell to € 1.6 million (€ 6.8 million). In the discontinued operations earnings decreased from € o.3 million to € o.1 million. Group net profi t fell correspondingly to € 1.7 million (€ 7.2 million).
| 9 months 2011 | 9 months 2010 | Change |
|---|---|---|
| 356.5 | 348.8 | 2.2 % |
| 4.6 | 17.0 | –72.9 % |
| 1.3 % | 4.9 % | – |
| – 0.5 | 0.0 | >100 % |
| 4.2 | 17.0 | –75.3 % |
| 1.2 % | 4.9 % | – |
| – 2.8 | – 4.6 | –39.1 % |
| 1.4 | 12.3 | –88.6 % |
| 0.4 % | 3.6 % | – |
[Table 02]
At the start of the fi nancial year 2o11 we provided a quantitative forecast for the targeted EBIT margin of 15 % in 2o12 as well as a qualitative forecast for revenue development in old-age provision, health insurance and wealth management (see page 111 of the Annual Report 2o1o). Accordingly, for the full-year 2o11 we expect to achieve growth in health insurance and wealth management as well as stable revenues in old-age provision.
This forecast proved to be largely correct in the fi rst nine months. Revenues from commissions and fees in wealth management and in health insurance rose in total by 2o % to € 116.1 million. After nine months, revenues in old-age provision stood at € 169.6 million and were thus 7 % below the previous year. The further business development remains somewhat uncertain but from a current perspective we expect increased momentum in the fourth quarter and therefore uphold our outlook of achieving revenues in old-age provision at the level of the previous year.
The development of expenses in the fi rst nine months was as planned. The fi xed costs (personnel expenses, depreciation and amortisation, other operating expenses), which MLP seeks to reduce by at least € 3o million by the end of 2o12, fell in this period – after adjustment for one-off exceptional costs – by a total of € 1o.4 million (see section on "Development of expenses", page 1o).
In old-age provision the premium sum in the fi rst nine months of the fi nancial year 2o11 stood at € 2.9 billion (€ 3.o billion). Occupational pensions accounted for 1o percent of this fi gure (full year 2o1o: 9 percent). When viewing the third quarter in isolation, the premium sum in old-age provision amounted to € 1.o billion and thus remained at the level of the previous year (€ 1.o billion). Assets under Management fell to € 19.3 billion (June 3o, 2o11: € 2o.6 billion) due to the markedly negative performance of numerous investment sectors in the third quarter.
In the period from January to September 2o11 MLP welcomed 22,8oo new clients (24,5oo). The total number of clients rose to 785,5oo (June 3o, 2o11: 781,ooo). The number of consultants decreased slightly to 2,16o (June 3o, 2o11: 2,186).
At the balance sheet reference date on September 3o, 2o11 the total assets of the MLP Group amounted to € 1,39o.7 million, corresponding to a decrease of 7.6 % compared to the total assets at December 31, 2o1o which then stood at € 1,5o5.4 million. The main infl uencing factors were the payment of the dividend for the fi nancial year 2o1o as well as the provisional purchase price for the remaining Feri shares. The main changes on the asset side of the balance sheet related to three items: our receivables from fi nancial institutions from the banking business reduced by € 46.9 million to € 438.1 million which was mainly due to the profi t transfer agreement with our subsidiary MLP Finanzdienstleistungen AG for the fi nancial year 2o1o. Compared to the end of 2o1o, our fi nancial investments reduced from € 252.7 million to € 23o.4 million. Here, the disposal of investment funds holdings and the liquidation of fi xed term deposits exceeded the infl ow of fi xed interest securities. Other accounts receivable and other assets fell from € 122 million to € 85 million as a result of usual seasonal variations. This item mainly consists of receivables from insurance companies 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 | Sept 30, 2011 | Dec 31, 2010 | Change |
|---|---|---|---|
| Intangible Assets | 143.1 | 148.2 | – 3.4 % |
| Property, plant and equipment | 71.6 | 74.4 | – 3.8 % |
| Investment property | 11.0 | 11.2 | – 1.8 % |
| Shares accounted for using the equity method | 2.5 | 2.9 | – 13.6 % |
| Deferred tax assets | 3.9 | 3.3 | 19.6 % |
| Receivables from clients in the banking business | 353.5 | 343.5 | 2.9 % |
| Receivables from banks in the banking business | 438.1 | 485.0 | – 9.7 % |
| Financial investments | 230.4 | 252.7 | –8.8 % |
| Tax refund claims | 11.1 | 11.8 | –6.1 % |
| Other accounts receivable and other assets | 85.0 | 122.0 | – 30.3 % |
| Cash and cash equivalents | 40.5 | 50.5 | – 19.7 % |
| Total | 1,390.7 | 1,505.4 | – 7.6 % |
[Table 03]
Due primarily to the payment of the dividend for the fi nancial year 2o1o, the equity capital decreased from € 428.4 million to € 397.1 million during the period under review. The equity capital position of MLP remains very good with an equity ratio of 28.6 % (28.5 %).
Other liabilities reduced signifi cantly by € 84.4 million to € 93.3 million. Contributing items to this reduction included the payment of the provisional purchase price for the remaining shares in Feri Finance AG as well as lower commission claims by our consultants. Due to our usually strong year end business, the commission claims by our consultants rise sharply at the balance sheet reference date on December 31, but then fall again in the following quarters .
| in € million | Sept 30, 2011 | Dec 31, 2010 | Change |
|---|---|---|---|
| Shareholders' equity | 397.1 | 428.4 | –7.3 % |
| Provisions | 50.0 | 52.0 | –3.8 % |
| Deferred tax liabilities | 10.8 | 10.6 | 2.5 % |
| Liabilities due to clients in the banking business | 823.5 | 819.3 | 0.5 % |
| Liabilities due to banks in the banking business | 14.6 | 16.4 | – 11.0 % |
| Tax liabilities | 1.4 | 1.1 | 24.5 % |
| Other liabilities | 93.3 | 177.7 | – 47.5 % |
| Total | 1,390.7 | 1,505.4 | – 7.6 % |
[Table 04]
Cash fl ow from operating activities in the continuing operations decreased to € 56.o million (€ 96.2 million). Here, main payments result from the deposit business with our clients and from the investment of these monies. This is primarily due to the lower increase of the account deposits compared to the previous year.
The change in cash flow from investment activities of the continuing operations from € –53.2 million to € –89.4 million is mainly due to the acquisition of the remaining Feri shares. Investments in fi xed-term deposits with a term of more than three months amounting to a net fi gure of € 35.o million (€ o.o million) as well as lower investments in securities of € o.o million (€ 5o.o million) also affected the cash fl ow.
The change in cash flow from financing activities in the continuing operations from € –29.6 million to € –32.4 million is almost entirely due to higher dividend payments.
Overall, at the end of the fi rst nine months of 2o11 the Group's liquid assets stood at around € 159 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.
| in € million | 3rd quarter 2011 | 3rd quarter 2010 | 9 months 2011 | 9 months 2010 |
|---|---|---|---|---|
| Cash and cash equivalents at the beginning of the period |
56.3 | 96.6 | 125.5 | 123.6 |
| Cash fl ow from operating activities | –0.1 | 15.1 | 56.0 | 96.2 |
| Cash fl ow from investing activities | 3.6 | 22.6 | –89.4 | –53.2 |
| Cash fl ow from fi nancing activities | 0.0 | – 0.5 | – 32.4 | – 29.6 |
| Changes in cash and cash equivalents | 3.5 | 37.3 | –65.8 | 13.3 |
| Infl ows/outfl ows due to divestments | 0.7 | – 0.1 | 0.8 | – 3.1 |
| Cash and cash equivalents at the end of the period |
60.5 | 133.8 | 60.5 | 133.8 |
[Table 05]
No capital measures were undertaken during the period under review.
In the period from January to September 2o11 our investment volume amounted to € 4.1 million which signifi es an increase of € o.9 million compared to the investments made during the same period of the previous year. Around 84 % of this fi gure was allocated to the fi nancial services sector – mainly for software as well as for operating and offi ce equipment (including hardware). A signifi cant portion of the funds was allocated to projects designed to improve IT support for client consulting and service activities. All investments were fi nanced from current cash fl ows. General statement concerning the business development
In the fi rst nine months of 2o11 MLP grew total revenues by 2 % and increased operating EBIT by 1o %. In this respect, and in the face of challenging market conditions, MLP reaped the benefi ts of its holistic business model: Decreasing revenues from old-age provision products were compensated by rising revenues in the areas of health insurance and wealth management. In addition, MLP achieved a further reduction of its fi xed costs after adjustment for one-off exceptional costs. After conclusion of the fi rst nine 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. At the reference date on September 3o, 2o11 the Group had a total of 1,563 employees, of which 172 were temps or marginal part-time employees. The fall compared to the previous year is attributable to two developments. Firstly, the number of employees up to the middle of the year 2o11 reduced, above all, due to a decrease in the number of marginal part-time employees and assistants in the branches. Secondly, the reduction in the number of employees at the headquarters in Wiesloch during the months July to September which was announced in April, led to a further decrease. The signifi cant part of these measures will only become evident in the key fi gures for the coming quarters.
In March 2o11 MLP received the "TOP Employer Germany" award for the fi fth consecutive time and further improved its score in terms of image, work-life balance and employee remuneration. Through this award, the Corporate Research Foundation Institute (CRF) which is one of the leading research companies in the area of employer certifi cation and employer branding, once again confi rmed MLP's outstanding corporate and employee culture.
| Sept 30, 2011 | Sept 30, 2010 | |
|---|---|---|
| Financial Services | 1,304 | 1,398 |
| Feri | 249 | 249 |
| Holding | 10 | 13 |
| Total | 1,563 | 1,660 |
[Table 06]
At the start of October MLP rolled out a nationwide image campaign. The campaign content focuses on the requirements of the various academic occupational groups with respect to high quality consulting and highlights the position of MLP as a reliable partner for academics' fi nancial planning needs. The campaign is centred on MLP founder Manfred Lautenschläger and is featured in TV, print and online media.
The October issue of the client magazine FORUM features a main section on the opportunities and challenges of the ageing population in society. Further highlights include a report on our subsidiary Feri and interviews with former government minister Heiner Geißler and the President of the German Medical Association Frank Ulrich Montgomery.
In July, and for the sixth time, MLP presented its service award to product partners in the areas of old-age provision, health insurance and non-life insurance. The feedback was gathered within the framework of a survey conducted among over 1,8oo consultants relating to aspects including service quality such as professional competence, response times and reachability. In addition, MLP also presented the Investment Award within the MLP wealth management concepts – an award for funds that achieved outstanding performance compared to their respective benchmark index.
Within the framework of "Medical Excellence" – the most comprehensive grant programme for medical students in Germany – 16 scholarship students were selected, having successfully come through a multi-stage selection process from among some 3oo applicants nationwide. Each selected student receives a € 5oo grant per semester from MLP for a period of three years.
There were two changes to the Executive Board team during the period under review. On March 31, 2o11, and by amicable arrangement, Ralf Schmid, Chief Operating Offi cer (COO) of the MLP Group as well as a member of the Executive Boards of MLP AG and the subsidiary MLP Finanzdienstleistungen AG, resigned from his position on both boards in order to pursue new professional challenges elsewhere. His duties were reassigned and split among the other members of the Executive Board. On February 1, 2o11 Reinhard Loose took up his duties as Chief Financial Offi cer, having been appointed to this position by the Supervisory Board in November 2o1o.
In April, and within the framework of its strengthening of the wealth management business area, MLP AG acquired the remaining 43.4 % holding in Feri Finance as planned. The purchase price for the shares, which were solely in the hands of the Feri managing partners, provisionally amounts to € 5o.6 million. MLP had previously acquired a 56.6 % stake in Feri in the autumn of 2oo6.
In September 2o11 Feri Finance AG restructured its business with wealthy private and institutional investors. The purely advisory services for both investors groups provided by the previous companies Feri Family Trust GmbH and Feri Institutional Advisors GmbH were incorporated into the new company Feri Institutional & Family Offi ce GmbH. Another new Feri Group company named Feri Trust GmbH brings together all wealth management services for institutional and private clients. With this new structure Feri no longer differentiates between individual client groups but separates purely advisory services from wealth management.
Supporting functions such as reporting, accountancy and investment controlling are brought together under the umbrella of Feri Investment Services GmbH. Feri EuroRating Services AG also belongs to the Feri-Group.
The MLP Group structures its business into the following operating segments:
A detailed description of the individual segments is contained on pages 212 et seq. of the Annual Report 2o1o.
In the fi rst nine months of 2o11 MLP increased total revenues in the fi nancial services segment from € 319.9 million to € 325.5 million compared to the previous year. Essential reasons for this growth include positive developments in the areas of loans and mortgages, non-life insurance and particularly health insurance. The loans and mortgages area benefi tted from the continued high level of interest on the part of our clients to purchase their own residential property. However, the most dynamic development of all consulting areas was achieved in the health insurance area, where revenues climbed by 44 % compared to the previous year (see section on "Results of Operations").
Despite higher total revenues, EBIT decreased. This fall was mainly due to the rise in commission expenses to € 132.5 million (€ 117.3 million) and to the increase in personnel expenses to € 61.4 million (€ 56.7 million) due to the one-off exceptional costs within the framework of the investment and effi ciency programme. In the fi rst nine months of 2o11 EBIT thus decreased compared to the previous year, falling from € 19.5 million to € 12.4 million. The fi nancial result amounted to € –o.6 million and thus remained at the previous year's level (€ –o.6 million). Earnings before taxes (EBT) fell from € 19.o million to € 11.8 million.
Compared to the same period of the previous year, total revenues in the third quarter of 2o11 rose slightly from € 1o5.6 million to € 1o6.3 million. EBIT fell to € 6.o million (€ 8.3 million); EBT similarly declined from € 8.2 million to € 5.9 million.
The companies of Feri Finance AG were also able to increase revenues in the fi rst nine months of 2o11. The companies that form this segment improved total revenues from € 28.8 million to € 33.2 million. EBIT fell to € –2.6 million (€ 1.5 million). This operating result was negatively affected by higher commission expenses as well as by increased personnel expenses due in part to one-off exceptional costs within the framework of the investment and effi ciency programme. In the same period EBT decreased from € 1.4 million to € –2.6 million.
Compared to the same quarter in the previous year, the companies of Feri Finance AG increased total revenues in the third quarter of 2o11 from € 1o.5 million to € 12.3 million. One-off exceptional costs affected the EBIT which fell in the period from July to September 2o11 to € –2.o million (€ 1.5 million). EBT in the third quarter 2o11 declined from € 1.4 million to € –2.o million compared to the previous year.
Total revenue and EBIT for the Feri segment (in € million)
In the fi rst nine months of 2o11 the Holding segment posted a fall in total revenues from € 9.2 million to € 8.3 million. EBIT fell from € –4.1 million to € –5.2 million due to increased personnel expenses on account of one-off exceptional costs within the framework of the investment and effi ciency programme. In the same period the fi nancial result improved signifi cantly and rose to € 2.4 million (€ 1.5 million). EBT decreased from € –2.6 million to € –2.8 million.
Compared to the previous year, total revenues in the Holding segment in the third quarter of 2o11 fell only slightly to € 2.6 million (€ 2.9 million). EBIT amounted to € –1.1 million and thus remained at the previous year's level (€ –1.1 million). EBT decreased from € –o.3 million to € –o.8 million.
There were no signifi cant changes in the risk situation of the MLP Group during the period under review. Even in the aftermath of the fi nancial and economic crisis there were no exceptional burdens within the framework of our counterparty default risks, market price risks, liquidity risks, and operational or other risks.
The MLP Group has adequate liquid funds. At the reporting date on September 3o, 2o11, our core capital ratio amounted to 21.5 % 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 85 to 1o4 of the Annual Report 2o1o .
Related party disclosures are contained in the Annual Report 2o1o, page 228 et seq., and the notes.
Following strong economic growth in the fi rst quarter of 2o11 and a marked reduction in momentum in the second quarter, currently available forecasts suggest that the German economy improved in the third quarter. However, experts such as the representatives of the DIW (German Institute for Economic Research) expect economic growth in Germany to deteriorate at the end of the year. In its autumn projection, the Federal Government too anticipates that the rate of growth will lessen. In this respect, the effects of the uncertainty in view of the debt crisis in numerous countries is evident.
Overall, the Federal Government expects the gross domestic product to grow by 2.9 % during the current fi nancial year and to grow 1 % in 2o12. Despite the weaker outlook, the labour market in particular is benefi ting from the economic development. The Federal Government anticipates that the unemployment rate for this year will be 7 % and 6.7 % next year. Disposable incomes will rise by 3.2 % this year followed by a forecasted 2.9 % in 2o12.
In general, the German economy remains resilient but the macroeconomic environment is deteriorating.
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 2o1o on page 1o4 et seq. During the fi rst nine months of the fi nancial year 2o11 there were no signifi cant changes to the overall situation.
In private and occupational old-age pension provision we continue to expect – in line with numerous market studies – that in the medium term meaningful growth rates will materialise. Triggered by the demographic development, several reforms have been initiated during recent years that have led to a signifi cant fall in the level of benefi ts offered by the state pension scheme – thereby considerably increasing the need for supplementary old-age provision. At the same time, the Federal Government has signifi cantly improved state subsidies for private and occupational pensions. All in all, we expect that this situation will once again result in sustainable growth rates in this market segment. However, in the short term the market for old-age provision remains heavily infl uenced by the hesitancy on the part of many consumers with respect to long-term investments – not least, due to the discussions surrounding the debt crisis in Europe and the upheavals on the capital markets.
The demographic development also directly affects the health insurance business area. Together with the advances in medical technology, this is now putting signifi cant pressure on the statutory healthcare system – which in turn results in further cuts to the range and scope of treatments and services or forces premiums to rise. At the beginning of this year the Federal Government increased the premiums in the statutory healthcare scheme – a move which further increases the attractiveness of private health insurance. Another positive aspect is that since the start of the year, insurees in the statutory health insurance scheme can now more easily switch to full private health insurance, and only need to exceed the annual income threshold of € 49,5oo once to be able to transfer. A further factor infl uencing the health insurance business area is the decision taken by the Bundestag within the framework of the revision of the fi nancial investment brokerage and asset investment act ("Novellierung des Finanzanlagenvermittler- und Vermögensanlagerechts"); the capping of contract conclusion commission and a lengthening of the cancellation liability periods in private health insurance. The new regulation that the government coalition included in the legislation at short notice, comes into effect on April 1, 2o12. In detail, the act limits the maximum permissible contract conclusion commission for private health insurance policies to nine monthly premiums. Furthermore the liability period of the intermediary for cancellation of the insurance contract by the client will in future be fi ve years. These measures will further change the market and make business considerably more diffi cult for 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 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 market – both in the MLP private client market as well as at Feri. This results in part from the continuingly high liquidity orientation of many investors as well as from the high wealth fi gures in Germany.
A further important factor infl uencing the market development are the changes to the consulting legislation. Following the numerous steps taken by the legislator during recent years in order to increase the level of professionalism in the market, new measures have recently been initiated or passed such as the investor protection act and the revision of fi nancial investment brokerage and asset investment act. These moves will further strengthen the trend towards quality and transparency which will also accelerate the consolidation in the market. As a market leader in client orientation, MLP stands to benefi t from such developments.
At the start of April 2o11 MLP initiated extensive investments. At the same time we accelerated our ongoing effi ciency programme and pulled forward measures into the current fi nancial year.
The measures will focus on strengthening the MLP brand through an extensive marketing campaign, signifi cant improvement of visibility at the branch locations, even more effective support for MLP consultants as well as further optimisation of processes. The concentration of the effi ciency measures into the current fi nancial year will result in one-off exceptional costs of around € 3o million in 2o11. From 2o12, the programme will contribute towards a signifi cant increase in the previously planned effi ciency measures. Overall, and on this basis, MLP expects to achieve a sustainable reduction in annual fi xed costs of at least € 3o million by the end of 2o12.
Following completion of the fi rst nine months of 2o11 we see no reason to amend the qualitative revenue forecast provided in our Annual Report 2o1o. In wealth management and in health insurance we expect to achieve revenue growth, both in 2o11 as well as in 2o12. The effects of the new legislation regarding contract conclusion commissions (see page 2o) on the development of our health insurance business are somewhat unpredictable. However, from a current perspective, we expect the effects on MLP to be manageable and therefore uphold our revenue target. In old-age provision we currently still expect to achieve revenues in line with the previous year's level followed by a slight increase in 2o12. However the market environment both in oldage provision as well as in wealth management remains diffi cult and there exist uncertainties regarding the future business development. Overall we maintain our objective to achieve an operating EBIT margin of 15 % in 2o12.
| 2011 | 2012 | |
|---|---|---|
| Revenue old-age provision | ||
| Revenue wealth management | ||
| Revenue health insurance | ||
| [Table 07] |
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 on page 114 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 in the global stock markets in the fi rst nine months of 2o11 can be divided into two distinct phases. The fi rst phase, which lasted from the start of January to the middle of July, was characterised by a sideways move in the markets. In July, events such as the negative rating decisions concerning Greece and Ireland as well as the arguments over the ceiling in the United States of America led to a deepening of the debt crisis and to very sharp falls on the stock markets – particularly on the European exchanges. As in the fi rst half year of 2o11, the American Dow Jones Industrial Average benchmark index was less affected in the period under review than for instance German stock indices. At the end of September, the Dow Jones Industrial Average stood at 1o,913 points, and thus 6.5 % lower than at the start of the year. The German DAX benchmark index fell by 21.3 % in the fi rst nine months of 2o11 and closed at 5,5o2 points at the end of September. The German small cap index SDAX performed somewhat better during the period under review, closing at 4,311 points at the end of September, corresponding to a fall of 17.8 % since the start of the year. Until end of September 2o11, the DAXsector Financial Service index – the index for fi nancial services companies in Germany – lost 21.5 % of its value.
[Figure 11]
The MLP share stood at € 4.79 on September 3o, 2o11, corresponding to a fall of 37.3 % compared to the start of the year. During this period the share moved within a price corridor between € 7.85 at the start of February and € 4.71 at the end of September.
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".
| 9 months 2011 | 9 months 2010 | |
|---|---|---|
| Share price at the beginning of the year | € 7.64 | € 8.27 |
| Share price high | € 7.85 | € 8.27 |
| Share price low | € 4.71 | € 6.21 |
| Share price at the end of the quarter | € 4.79 | € 7.48 |
| Dividend for the previous year | € 0.30 | € 0.25 |
| Market capitalisation (End of reporting period) | € 516,734,365.02 | € 806,925,480.24 |
[Table 08]
As in previous years, MLP achieved one of the top rankings in "The Best Annual Report" competition run by the fi nancial publication "manager magazine" for the 17th time. Among all the represented companies from the SDAX, MLP was placed in second position. The jury, under the scientifi c leadership of Professor Jörg Baetge from the University of Münster, particularly praised the reporting of the business development as well as the informative forecast report. The competition is the most comprehensive comparison in Germany and one of the largest worldwide.
| All fi gures in €'000 | Notes | 3rd quarter 2011 | 3rd quarter 2010 | 9 months 2011 | 9 months 2010 |
|---|---|---|---|---|---|
| Revenue | (6) | 112,318 | 111,001 | 343,694 | 332,253 |
| Other revenue | 4,015 | 5,041 | 12,788 | 16,596 | |
| Total revenue | 116,334 | 116,043 | 356,482 | 348,849 | |
| Commission expenses | (7) | –43,791 | –40,888 | –135,546 | –118,364 |
| Interest expenses | –2,105 | –2,046 | –6,269 | –7,103 | |
| Personnel expenses | (8) | –24,783 | –24,399 | –85,407 | –77,612 |
| Depreciation and amortisation | (9) | –3,520 | –3,965 | –11,337 | –12,132 |
| Other operating expenses | (10) | –39,606 | –36,476 | –114,175 | –117,408 |
| Earnings from shares accounted for using the equity method | 359 | 417 | 869 | 780 | |
| Earnings before interest and tax (EBIT) | 2,888 | 8,686 | 4,617 | 17,009 | |
| Other interest and similar income | 513 | 1,840 | 2,561 | 5,261 | |
| Other interest and similar expenses | –357 | –1,165 | –3,015 | –5,296 | |
| Finance cost | (11) | 156 | 675 | –454 | –35 |
| Earnings before tax (EBT) | 3,044 | 9,361 | 4,163 | 16,974 | |
| Income taxes1 | –1,419 | –2,515 | –2,760 | –4,625 | |
| Earnings from continuing operations after tax | 1,625 | 6,846 | 1,403 | 12,349 | |
| Earnings from discontinued operations after tax | (18) | 112 | 348 | 630 | 103 |
| Net profi t | 1.737 | 7,194 | 2,032 | 12,452 | |
| Of which attributable to | |||||
| owners of the parent company | 1,737 | 7,194 | 2,032 | 12,452 | |
| Earnings per share in €2 | |||||
| From continuing operations | |||||
| basic | 0.02 | 0.06 | 0.01 | 0.11 | |
| diluted | 0.02 | 0.06 | 0.01 | 0.11 | |
| From continuing and discontinued operations | |||||
| basic | 0.02 | 0.07 | 0.02 | 0.12 | |
| diluted | 0.02 | 0.07 | 0.02 | 0.12 |
A tax effect correction undertaken at June 30, 2010 was withdrawn at December 31,2010. This resulted in an
[Table 09]
income tax decrease amounting to € 434 thsd which reduced the earnings from discontinued operations.
2 Basis of calculation: Average number of shares at September 30, 2011: 107,877,738.
| All fi gures in €'000 | 3rd quarter 2011 | 3rd quarter 2010 | 9 months 2011 | 9 months 2010 |
|---|---|---|---|---|
| Net profi t | 1,737 | 7,194 | 2,032 | 12,452 |
| Other comprehensive income | ||||
| Securities marked to market | –534 | 243 | –1,079 | 2,598 |
| Tax expense | 62 | –57 | 104 | –139 |
| Other comprehensive income after tax | –472 | 187 | –975 | 2,459 |
| Total comprehensive income for the year | 1,265 | 7,381 | 1,057 | 14,911 |
| Total comprehensive income attributable to | ||||
| owners of the parent company | 1,265 | 7,381 | 1,057 | 14,911 |
| [Table 10] |
| All fi gures in €'000 | Notes | Sept 30, 2011 | Dec 31, 2010 |
|---|---|---|---|
| Intangible assets | 143,054 | 148,157 | |
| Property, plant and equipment | 71,606 | 74,403 | |
| Investment property | 10,978 | 11,178 | |
| Shares accounted for using the equity method | 2,513 | 2,910 | |
| Deferred tax assets | 3,926 | 3,283 | |
| Receivables from clients in the banking business | 353,463 | 343,453 | |
| Receivables from banks in the banking business | (12) | 438,094 | 485,023 |
| Financial assets | (13) | 230,374 | 252,687 |
| Tax refund claims | 11,125 | 11,846 | |
| Other accounts receivable and other assets | (14) | 84,988 | 121,999 |
| Cash and cash equivalents | 40,528 | 50,470 | |
| Total | 1,390,650 | 1,505,411 | |
| [Table 11] |
| Notes | Sept 30, 2011 | Dec 31, 2010 |
|---|---|---|
| (15) | 397,121 | 428,390 |
| 49,992 | 51,960 | |
| 10,811 | 10,551 | |
| 823,474 | 819,294 | |
| 14,596 | 16,391 | |
| 1,380 | 1,109 | |
| (14) | 93,277 | 177,716 |
| 1,390,650 | 1,505,411 | |
| All fi gures in €'000 | 9 months 2011 | 9 months 2010 |
|---|---|---|
| Cash fl ow from operating activities | 56,798 | 93,019 |
| Cash fl ow from investing activities | –89,368 | –53,224 |
| Cash fl ow from fi nancing activities | –32,368 | –29,645 |
| Change in cash and cash equivalents | –64,938 | 10,150 |
| Cash and cash equivalents at the end of the period | 60,527 | 133,775 |
| Thereof discontinued operations | ||
| Cash fl ow from operating activities | 826 | –3,146 |
| Cash fl ow from investing activities | – | – |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | 826 | –3,146 |
| Cash and cash equivalents at the end of the period | – | – |
| [Table 13] |
| All fi gures in €'000 | 3rd quarter 2011 | 3rd quarter 2010 |
|---|---|---|
| Cash fl ow from operating activities | 595 | 15,037 |
| Cash fl ow from investing activities | 3,601 | 22,647 |
| Cash fl ow from fi nancing activities | – | –504 |
| Change in cash and cash equivalents | 4,196 | 37,180 |
| Cash and cash equivalents at the end of the period | 60,527 | 133,775 |
| Thereof discontinued operations | ||
| Cash fl ow from operating activities | 650 | –85 |
| Cash fl ow from investing activities | – | – |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | 650 | –85 |
| Cash and cash equivalents at the end of the period | – | – |
| [Table 14] |
| Equity attributable to MLP AG shareholders | |||||
|---|---|---|---|---|---|
| All fi gures in €'000 | Share capital |
Capital reserves |
Securities marked to market |
Other equity |
Total shareholders' equity |
| As at Jan 1, 2010 | 107,878 | 142,184 | –1,573 | 170,044 | 418,532 |
| Dividend | – | – | – | –26,969 | –26,969 |
| Transactions with owners | – | – | – | –26,969 | –26,969 |
| Net profi t | – | – | – | 12,452 | 12,452 |
| Other comprehensive income after tax | – | – | 2,459 | – | 2,459 |
| Total comprehensive income | – | – | 2,459 | 12,452 | 14,911 |
| As at September 30, 2010 | 107,878 | 142,184 | 886 | 155,527 | 406,473 |
| As at Jan 1, 2011 | 107,878 | 142,184 | 1,193 | 177,136 | 428,390 |
| Dividend | – | – | – | –32,363 | –32,363 |
| Changes to the scope of consolidation | – | – | – | 37 | 37 |
| Transactions with owners | – | – | – | –32,326 | –32,326 |
| Net profi t | – | – | – | 2,032 | 2,032 |
| Other comprehensive income after tax | – | – | –975 | – | –975 |
| Total comprehensive income | – | – | –975 | 2,032 | 1,057 |
| As at September 30, 2011 | 107,878 | 142,184 | 218 | 146,843 | 397,121 |
[Table 15]
| Financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 3rd quarter 2011 | 3rd quarter 2010 | |
| Revenue | 104,368 | 102,400 | |
| of which total inter-segment revenue | 2,045 | 70 | |
| Other revenue | 1,930 | 3,204 | |
| of which total inter-segment revenue | 421 | 441 | |
| Total revenue | 106,298 | 105,604 | |
| Commission expenses | –43,086 | –40,579 | |
| Interest expenses | –2,105 | –2,046 | |
| Personnel expenses | –17,607 | –17,501 | |
| Depreciation/amortisation and impairment | –2,285 | –2,646 | |
| Other operating expenses | –35,592 | –34,952 | |
| Earnings from shares accounted for using the equity method | 359 | 417 | |
| Segment earnings before interest and tax (EBIT) | 5,982 | 8,296 | |
| Other interest and similar income | 54 | 74 | |
| Other interest and similar expenses | –144 | –173 | |
| Finance cost | –91 | –99 | |
| Earnings before tax (EBT) | 5,892 | 8,197 | |
| Income taxes | |||
| Earnings from continuing operations after tax | |||
| Earnings from discontinued operations after tax | 112 | 348 | |
| Net profi t (total) | |||
| Feri | Holding | Consolidation/Other | Total | ||||
|---|---|---|---|---|---|---|---|
| 3rd quarter 2011 | 3rd quarter 2010 | 3rd quarter 2011 | 3rd quarter 2010 | 3rd quarter 2011 | 3rd quarter 2010 | 3rd quarter 2011 | 3rd quarter 2010 |
| 10,114 | 8,716 | – | – | –2,164 | –115 | 112,318 | 111,001 |
| 119 | 45 | – | – | –2,164 | –115 | 0 | 0 |
| 2,172 | 1,785 | 2,642 | 2,937 | –2,728 | –2,884 | 4,015 | 5,041 |
| – | – | 2,307 | 2,443 | –2,728 | –2,884 | 0 | 0 |
| 12,286 | 10,501 | 2,642 | 2,937 | –4,893 | –2,998 | 116,334 | 116,043 |
| –2,798 | –354 | – | – | 2,092 | 45 | –43,791 | –40,888 |
| – | – | – | – | 1 | 1 | –2,105 | –2,046 |
| –6,290 | –5,799 | –886 | –1,098 | – | – | –24,783 | –24,399 |
| –558 | –562 | –677 | –757 | – | – | –3,520 | –3,965 |
| –4,676 | –2,287 | –2,151 | –2,188 | 2,813 | 2,950 | –39,606 | –36,476 |
| – | – | – | – | – | – | 359 | 417 |
| –2,036 | 1,499 | –1,071 | –1,106 | 13 | –3 | 2,888 | 8,686 |
| 11 | 0 | 452 | 1,770 | –4 | –5 | 513 | 1,840 |
| –17 | –78 | –213 | –920 | 17 | 7 | –357 | –1,165 |
| –6 | –78 | 240 | 850 | 13 | 2 | 156 | 675 |
| –2,042 | 1,421 | –832 | –256 | 26 | –1 | 3,044 | 9,361 |
| –1,419 | –2,515 | ||||||
| 1,625 | 6,846 | ||||||
| 112 | 348 | ||||||
| 1,737 | 7,194 | ||||||
| [Table 16] |
| Financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 9 months 2011 | 9 months 2010 | |
| Revenue | 317,344 | 308,204 | |
| of which total inter-segment revenue | 2,144 | 173 | |
| Other revenue | 8,188 | 11,673 | |
| of which total inter-segment revenue | 1,264 | 1,344 | |
| Total revenue | 325,532 | 319,877 | |
| Commission expenses | –132,503 | –117,317 | |
| Interest expenses | –6,271 | –7,105 | |
| Personnel expenses | –61,422 | –56,691 | |
| Depreciation/amortisation and impairment | –7,624 | –8,116 | |
| Other operating expenses | –106,223 | –111,884 | |
| Earnings from shares accounted for using the equity method | 869 | 780 | |
| Segment earnings before interest and tax (EBIT) | 12,358 | 19,543 | |
| Other interest and similar income | 160 | 261 | |
| Other interest and similar expenses | –723 | –813 | |
| Finance cost | –563 | –552 | |
| Earnings before tax (EBT) | 11,795 | 18,991 | |
| Income taxes | |||
| Earnings from continuing operations after tax | |||
| Earnings from discontinued operations after tax | 630 | 103 | |
| Net profi t (total) | |||
| Feri | Holding | Consolidation/Other | Total | ||||
|---|---|---|---|---|---|---|---|
| 9 months 2011 | 9 months 2010 | 9 months 2011 | 9 months 2010 | 9 months 2011 | 9 months 2010 | 9 months 2011 | 1st half-year 2010 |
| 28,714 | 24,360 | – | – | –2,365 | –311 | 343,694 | 332,253 |
| 221 | 139 | – | – | –2,365 | –311 | 0 | 0 |
| 4,456 | 4,418 | 8,330 | 9,188 | –8,186 | –8,683 | 12,788 | 16,596 |
| – | – | 6,922 | 7,338 | –8,186 | –8,683 | 0 | 0 |
| 33,170 | 28,778 | 8,330 | 9,188 | –10,551 | –8,994 | 356,482 | 348,849 |
| –5,185 | –1,162 | – | – | 2,142 | 116 | –135,546 | –118,364 |
| – | – | – | – | 2 | 2 | –6,269 | –7,103 |
| –19,403 | –17,539 | –4,582 | –3,382 | – | – | –85,407 | –77,612 |
| –1,628 | –1,740 | –2,085 | –2,275 | – | – | –11,337 | –12,132 |
| –9,522 | –6,809 | –6,829 | –7,586 | 8,400 | 8,870 | –114,175 | –117,408 |
| – | – | – | – | – | – | 869 | 780 |
| –2,568 | 1,528 | –5,166 | –4,055 | –7 | –6 | 4,617 | 17,009 |
| 28 | 2 | 4,860 | 6,014 | –2,487 | –1,017 | 2,561 | 5,261 |
| –29 | –104 | –2,498 | –4,552 | 235 | 173 | –3,015 | –5,296 |
| –1 | –101 | 2,361 | 1,462 | –2,251 | –845 | –454 | –35 |
| –2,569 | 1,426 | –2,805 | –2,593 | –2,258 | –851 | 4,163 | 16,974 |
| –2,760 | –4,625 | ||||||
| 1,403 | 12,349 | ||||||
| 630 | 103 | ||||||
| 2,032 | 12,452 |
[Table 17]
The consolidated fnancial 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, 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, 2o1o.
Apart from exception detailed in note 3, the same consolidation principles and accounting policies as for the consolidated fi nancial statements of the fi nancial year 2o1o have been applied to this interim fi nancial report. These are presented in the Group notes of the annual report 2o1o 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, 2o1o except for the standards and interpretations to be used for the fi rst time in the fi nancial year 2o11.
In the fi nancial year 2o11 the following new or revised standards are to be used by MLP for the fi rst time:
With the exception of the more detailed reporting requirements in accordance with IAS 34, the improvements to IFRS 2o1o (adopted by the EU in February 2o11) have no effect on the presentation of the net assets, fi nancial position or the results of operations.
In April 2o11 MLP acquired the remaining 43.4 % shares in Feri Finance AG (FFAG). The purchase price provisionally amounts to € 5o.6 million. Even before the acquisition of the remaining shares, MLP did not report any minority holdings in Feri Finance as the main risks and opportunities arising from the legally not yet transferred shares as acquisition of the fi rst shares in 2oo6 lay with MLP. Furthermore, since January 1, 2o11 Institutional Trust Management Company S.à.r.l., Luxemburg (ITM), which was a subsidiary of Feri Institutional Advisors GmbH (FIA) until July 31, 2o11 has been included in the scope of consolidation. On August 1, 2o11 the shares in ITM were sold to FFAG.
On August 1, 2o11 the Feri Group changed its structure. This has the following effect on the companies previously included in the scope of consolidation (FFAG, FIA, ITM, Feri Family Trust GmbH (FFT), Feri EuroRating Services AG (FERS)).
On August 12, 2o11 the assembly of the managing partners of FFT decided to increase the share capital by € 43 thsd for the purpose of the amalgamation with FIA as well as for the change in the company name to Feri Trust GmbH (FT). In accordance with the amalgamation contract of August 12, 2o11, FIA was amalgamated retroactively with FT as from January 1, 2o11. Feri Beteiligung GmbH which was previously not included in the scope of consolidation was renamed Feri Institutional & Family Offi ce GmbH (FIFO) on August 11, 2o11. The "Family Offi ce" and "Consulting" business divisions were sold by FFT and FIA to FIFO. Also in August 2o11, Feri Finance AG acquired Weilchensee 659. VV GmbH and decided to rename it Feri Investment Services GmbH (FIS). The "Investment-related Services", "IT Management" and "IT Development" business divisions were sold by FT and FFAG to FIS.
At September 3o, 2oo1 the following companies of the Feri Group are therefore included in the scope of consolidation: Feri Finance AG, Feri Trust GmbH, Feri Investment Services GmbH, Feri Institutional & Family Offi ce GmbH, Feri EuroRating Services AG and Institutional Trust Management Company S.à.r.l.
Due to the seasonal development of its business, the Group generally expects earnings from continuing operations to be higher in the fourth quarter than in the previous quarters.
| All fi gures in €'000 | 3rd quarter 2011 | 3rd quarter 2010 | 9 months 2011 | 9 months 2010 |
|---|---|---|---|---|
| Old-age provision | 62,735 | 64,149 | 169,617 | 182,717 |
| Wealth management | 19,026 | 19,963 | 59,231 | 57,090 |
| Health insurance | 15,086 | 12,827 | 56,837 | 39,432 |
| Non-life insurance | 4,180 | 3,724 | 24,975 | 23,901 |
| Loans and mortgages | 3,153 | 3,155 | 9,320 | 7,900 |
| Other commission and fees | 1,101 | 782 | 2,858 | 2,366 |
| Commission and fees | 105,280 | 104,600 | 322,838 | 313,405 |
| Interest income | 7,039 | 6,401 | 20,856 | 18,848 |
| Total | 112,318 | 111,001 | 343,694 | 332,253 |
Commission expenses increased from € 118,364 thsd to € 135,546 thsd. They mainly contain commissions and other remunration components for the self-employed MLP consultants. For further explanations please refer to the Management Report.
Personnel expenses increased from € 77,612 thsd to € 85,4o7 thsd. This was mainly due to reorganisation costs. For further explanations please refer to the Management Report.
At September 3o, 2o11, the MLP Group had the following numbers of employees in the strategic fi elds of business.
| All fi gures in €'000 | Sept 30, 2011 | of which part-time employees |
Sept 30, 2010 | of which part-time employees |
|---|---|---|---|---|
| Financial services | 1,304 | 113 | 1,398 | 137 |
| Feri | 249 | 59 | 249 | 63 |
| Holding | 10 | – | 13 | 1 |
| Total | 1,563 | 172 | 1,660 | 201 |
| [Table 19] |
Depreciation/amortisation and impairment includes non-scheduled write-downs on property, plant and equipment amounting to € 619 thsd (previous year: € o thsd).
| All fi gures in €'000 | 3rd quarter 2011 | 3rd quarter 2010 | 9 months 2011 | 9 months 2010 |
|---|---|---|---|---|
| IT operations | 12,321 | 12,441 | 36,527 | 35,754 |
| Rental an leasing | 3,714 | 3,506 | 11,757 | 11,951 |
| Administration operations | 3,373 | 3,510 | 9,921 | 10,671 |
| Consultancy | 3,254 | 2,533 | 9,071 | 10,333 |
| Representation and advertising | 2,400 | 1,527 | 6,631 | 5,036 |
| External services – banking business | 1,945 | 2,223 | 5,225 | 5,866 |
| Premiums and fees | 894 | 1,101 | 3,200 | 3,757 |
| Training and further education | 518 | 894 | 3,161 | 3,499 |
| Travel expenses | 578 | 1,007 | 3,130 | 2,841 |
| Write-downs and impairments of other recei vables and other assets |
1,219 | 1,243 | 3,016 | 4,720 |
| Expenses for commercial agents | 730 | 1,086 | 2,511 | 3,757 |
| Insurance | 629 | 583 | 2,219 | 2,398 |
| Entertainment | 394 | 626 | 2,193 | 2,268 |
| Write-downs and impairments of other recei | ||||
| vables from clients in the banking business | 934 | 800 | 1,996 | 2,971 |
| Maintenance | 456 | 499 | 1,321 | 1,302 |
| Other personnel costs | 238 | 289 | 898 | 866 |
| Audit | 202 | 284 | 641 | 884 |
| Expenses from the disposal of assets | 369 | 10 | 440 | 38 |
| Sundry other operating expenses | 5,437 | 2,317 | 10,317 | 8,496 |
| Total | 39,606 | 36,476 | 114,175 | 117,408 |
[Table 20]
The costs of IT operations are mainly attributable to IT services and computer centre services that have been outsourced to an external service provider. The expenses for administration operations contain costs relating to building operations, offi ce costs and communication costs. The consulting costs are made up of tax advice costs, legal advice costs as well as general and IT consulting costs. The costs recognised under representation and advertising are attributable to media presence and client information activities. External services – banking business mainly contain securities settlement and transaction costs in connection with the MLP credit card. Write-downs and impairments of other accounts receivable and other assets comprise allowances for receivables from commercial agents. The expense for commercial agents includes expenses for former consultants and the training allowance for new consultants. Sundry other operating expenses mainly consist of external services, car costs, donations and remuneration for the Supervisory Board.
| All fi gures in €'000 | 3rd quarter 2011 | 3rd quarter 2010 | 9 months 2011 | 9 months 2010 |
|---|---|---|---|---|
| Other interest and similar income | 513 | 1,840 | 2,561 | 5,261 |
| Interest and similar expenses from fi nancial | ||||
| instruments | –37 | –853 | –2,054 | –4,359 |
| Accrued interest on pension provisions | –321 | –312 | –962 | –937 |
| Other interest and similar expenses | –357 | –1,165 | –3,015 | –5,296 |
| Finance cost | 156 | 675 | –454 | –35 |
[Table 21]
The decrease in other interest and similar income is due to the non-recurrence of interest which arose in the previous year in connection with an audit, non-recurrence of interest income from the valuation of the purchase price liability for Feri Finance AG, as well as lower income from interest swaps. The fall in other interest and similar expenses is mainly attributable to the nonrecurrence of write-downs on fi nancial investments and lower expenses from interest swaps. On the other hand, there were higher dividend payments to the other managing partners of Feri Finance AG.
The change in receivables from banks in the banking business from € 485,o23 thsd to € 438,o94 thsd, is mainly attributable to the profi t transfer payment by MLP Finanzdienstleistungen AG to MLP AG.
| All fi gures in €'000 | Sept 30, 2011 | Dec 31, 2010 |
|---|---|---|
| Available for sale | ||
| Debt securities and holdings in investment funds | 14,734 | 40,639 |
| Investments | 2,999 | 3,385 |
| Held-to-maturity securities | 107,369 | 83,379 |
| Loans and receivables | 105,271 | 125,284 |
| Total | 230,374 | 252,687 |
| [Table 22] |
The decrease in fi nancial assets mainly results from the sale of investment fund holdings as well as from the outfl ow of fi xed-term monies which exceeds the infl ow of fi xed-term securities. At September 3o, 2o11 the fi nancial investments did not contain any securities from the PIIGS states.
Due to the seasonally stronger year-end business, high receivables from insurance companies as well as high liabilities towards commercial agents at December 31, 2o1o had to be shown which were then balanced out in the fi rst quarter of 2o11. A lower amount of receivables and liabilities were built up in the fi rst nine months of 2o11. Furthermore, the fall in other liabilities was infl uenced by the purchase price payments for the remaining Feri shares.
The share capital of MLP AG is made up of 1o7,877,738 no-par-value shares (December 31, 2o1o: 1o7,877,738 no-par-value shares). In the fi rst nine months of 2o11 no new no-par-value shares were issued through the exercising of rights of conversion .
In accordance with the resolution passed at the Annual General Meeting on June 1o, 2o11 a dividend of € 32,363 thsd (previous year: € 26,969 thsd) was to be paid for the fi nancial year 2o1o. This corresponds to € o.3o per share (previous year: € o.25) .
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 the cash fl ow, the changes in statement of fi nancial position items due to operating activities are adjusted by effects from changes to the scope of consolidation and currency translation. The changes in the respective statement of fi nancial position items can therefore only be partially aligned with the corresponding values in the published consolidated statement of fi nancial positions. Cash fl ow from operating activities has decreased by € 36.2 million to € 56.8 million. For further explanations please refer to 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 the purchase of shares in companies. In the comparative period, cash fl ow from investing activities was infl uenced by the investment in fi xed-term deposits and the purchase of long-term securities.
The cash fl ow from fi nancing activities is mainly infl uenced by the dividend distribution by MLP AG. In the comparative period, cash fl ow from fi nancing activities was infl uenced by the dividend distribution by MLP AG and the repayment of loan liabilities.
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. 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.
| All fi gures in €'000 | Sept 30, 2011 | Sept 30, 2010 |
|---|---|---|
| Cash and cash equivalents | 40,528 | 48,775 |
| Loans < 3 months | 20,000 | 85,000 |
| Liabilities to banks due on demand | –1 | 0 |
| Cash and cash equivalents | 60,527 | 133,775 |
| [Table 23] |
There were no signifi cant changes compared to December 31, 2o1o.
Expenses and income from discontinued operations break down as follows.
| All fi gures in €'000 | 3rd quarter 2011 | 3rd quarter 2010 | 9 months 2011 | 9 months 2010 |
|---|---|---|---|---|
| Operating profi t | – | – | – | – |
| Earnings from the sale/disclosure of operations before tax |
158 | 370 | 890 | 128 |
| Income taxes* | –46 | –22 | –260 | –26 |
| Earnings from the sale of operations after tax |
112 | 348 | 630 | 103 |
| Earnings from discontinued operations after tax |
112 | 348 | 630 | 103 |
| Earnings per share in € | ||||
| from discontinued operations | ||||
| basic and diluted | 0.01 | 0.00 | 0.01 | 0.00 |
* A tax effect correction undertaken at June 30, 2010 was withdrawn at December 31, 2010. This resulted in an income tax increase amounting to € 434 thsd which reduced the earnings from discontinued operations.
[Table 24]
The purchase contract between MLP and the acquirer of MLP Finanzdienstleistungen AG, Vienna, contains a purchase price adjustment clause which is dependent on the expenses for the restructuring of MLP Finanzdienstleistungen AG, Vienna, until April 3o, 2o11 at the latest. In the current fi nancial year MLP has so far received € o.7 million in this respect. The sale of MLP Finanzdienstleistungen AG, Vienna gives rise to contingent liabilities amounting to € 1.o million.
Beyond this there were no signifi cant changes compared to December 31, 2o1o.
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. Ralf Schmid, Chief Operating Offi cer of the MLP Group as well as a member of the Executive Boards of MLP AG and MLP Finanzdienstleistungen AG, resigned from both boards on March 31, 2o11. He received a severance payment. Reinhard Loose took up his duties as Chief Financial Offi cer on February 1, 2o11.
Beyond this there were no signifi cant changes compared to December 31, 2o1o.
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, November 9, 2o11
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 | Survey shows increasing willingness to focus |
| on old-age provisions | |
| 07 Figure 03 | Statutory health insured persons are dissatisfi ed |
| 08 Figure 04 | Infl ows and outfl ows in various types of mutual |
| funds in Germany until August 31, 2011 | |
| 09 Figure 05 | Total revenue from continuing operations |
| 11 Figure 06 | EBIT from continuing operations |
| 17 Figure 07 | Total revenue and EBIT for the fi nancial services |
| segment | |
| 18 Figure 08 | Total revenue and EBIT for the Feri segment |
| 19 Figure 09 | Expected GDP growth in Germany |
| 21 Figure 10 | Development of the operating EBIT margin |
| 2007–2012 |
Figure 11 MLP share, SDAX and DAXsector Financial Services in the fi rst nine months 2011
Table 01 MLP Key fi gures
| 11 Table 02 | Earnings development of continuing operations | |
|---|---|---|
| 12 Table 03 | Assets as at September 30, 2011 | |
| 13 Table 04 | Liabilities and shareholders' equity as at | |
| September 30, 2011 | ||
| 14 Table 05 | Condensed statement of cash fl ows in continuing | |
| operations | ||
| 15 Table 06 | Number of employees | |
| 21 Table 07 | Anticipated development of revenue 2011 to 2012 |
Table 08 Key fi gures of the MLP share
| 24 Table 09 | Income statement for the period from | ||
|---|---|---|---|
| January 1 to September 30, 2011 | |||
| 25 Table 10 | Statement of comprehensive income | ||
| for the period from January 1 to September 30, 2011 | |||
| 25 Table 11 | Assets as at September 30, 2011 | ||
| 25 Table 12 | Liabilities and shareholders' equity as at | ||
| September 30, 2011 | |||
| 26 Table 13 | Consolidated statement of cash fl ows for the period | ||
| from January 1 to September 30, 2011 | |||
| 26 Table 14 | Consolidated statement of cash fl ows for the period | ||
| from July 1 to September 30, 2011 | |||
| 27 Table 15 | Statement of changes in equity | ||
| Notes | |||
| 28 Table 16 | Segment reporting (quarterly comparison) |
|---|---|
| 30 Table 17 | Segment reporting (nine-months comparison) |
| 33 Table 18 | Revenue |
| 34 Table 19 | Personnel expenses/Number of employees |
| 35 Table 20 | Other operating expenses |
| 36 Table 21 | Finance cost |
| 36 Table 22 | Financial assets |
| 38 Table 23 | Cash and cash equivalents |
| 38 Table 24 | Income statement of discontinued operations |
Executive Board Dr. Uwe Schroeder-Wildberg (Chairman, appointed until December 31, 2o12)
Manfred Bauer (Product Management and Purchasing, appointed until April 3o, 2o15)
Reinhard Loose (Chief Financial Offi cer, since February 1, 2o11, appointed until January 31, 2o14)
Ralf Schmid (Chief Operating Offi cer, appointed until March 31, 2o11)
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)
Investor Relations Telephone +49 (o) 6222 • 3o8 • 832o Fax +49 (o) 6222 • 3o8 • 1131 [email protected]
Media Relations Telephone +49 (o) 6222 • 3o8 • 831o Fax +49 (o) 6222 • 3o8 • 1131 [email protected]
November 17, 2o11 Roadshow in Zurich. MLP presents its business activities, strategy and the long-term outlook for the company to investors.
November 23, 2o11 Roadshow in London MLP presents its business activities, strategy and the long-term outlook for the company to investors.
February 29, 2o12 Annual press conference and analyst conference in Frankfurt.
MARCH March 22, 2o12
Publication of annual report 2o11.
MAY
May 1o, 2o12 Publication of interim report for the 1st quarter 2o12.
JUNE June 26, 2o12 Annual General Meeting in Mannheim.
AUGUST August 9, 2o12 Publication of interim report for the 2nd quarter 2o12.
NOVEMBER November 14, 2o12 Publication of interim report for the 3rd quarter 2o12.
All Investor Relations dates for the current year can be found in our fi nancial calendar at: www.mlp-ag.com/investor-relations/calendar
prognosis
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", "anticipate", "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 liability 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 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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