Quarterly Report • Aug 11, 2011
Quarterly Report
Open in ViewerOpens in native device viewer
Interim Group Report for the fi rst half-year and the second quarter 2011
| All fi gures in € million | 2nd quarter 2011 | 2nd quarter 2010 | 1st half-year 2011 | 1st half-year 2010 | Change |
|---|---|---|---|---|---|
| Continuing operations | |||||
| Total revenue | 109.3 | 111.6 | 240.1 | 232.8 | 3.1 % |
| Revenue | 105.9 | 106.0 | 231.4 | 221.3 | 4.6 % |
| Other revenue | 3.5 | 5.7 | 8.8 | 11.6 | – 24.1 % |
| Operating EBIT (before one-off exceptional costs) | 0.4 | 4.3 | 12.2 | 8.3 | 47.0 % |
| Earnings before interest and tax (EBIT) | -6.8 | 4.3 | 1.7 | 8.3 | –79.5 % |
| EBIT margin (%) | -6.2 % | 3.9 % | 0.7% | 3.6% | – |
| Earnings from continuing operations |
-4.9 | 3.5 | -0.2 | 5.5 | >–100 % |
| Earnings per share (diluted) in € | -0.04 | 0.03 | 0.00 | 0.05 | >–100 % |
| MLP Group | |||||
| Net profi t (total) | -4.4 | 3.6 | 0.3 | 5.3 | –94.3 % |
| Earnings per share (diluted) in € | -0.04 | 0.03 | 0.00 | 0.05 | >–100 % |
| Cash fl ow from operating activities | 7.3 | 34.7 | 56.2 | 78.0 | -27.9 % |
| Capital expenditure | 1.3 | 1.3 | 1.9 | 2.3 | –17.4 % |
| Shareholders' equity | - | - | 395.9 | 428.4 1 | –7.6 % |
| Equity ratio | - | - | 28.2 % | 28.5 %1 | – |
| Balance sheet total | - | - | 1,404.8 | 1,505.4 1 | – 6.7 % |
| Clients2 | - | - | 781,000 | 774,500 1 | 0.8 % |
| Consultants 2 | - | - | 2,186 | 2,273 1 | – 3.8 % |
| Branch offi ces 2 | - | - | 183 | 192 1 | – 4.7 % |
| Employees | - | - | 1,608 | 1,682 | – 4.4 % |
| Arranged new business 2 | |||||
| Old-age provisions (premium sum in € billion) | 1.0 | 1.0 | 1.9 | 2.0 | – 5.0 % |
| Loans and mortgages | 330 | 317 | 700 | 578 | 21.1 % |
| Assets under management in € billion | - | - | 20.6 3 | 19.8 1,3 | 4.0 % |
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 half-year and the second 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 approximately Euro 2o.6 billion and supports more than 781,ooo 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. Those with assets above Euro 5 million are looked after by the subsidiary Feri Family Trust. Moreover, the Group provides consulting services to institutional investors via Feri Institutional Advisors GmbH. 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 German economy exhibited strong growth in the fi rst half-year 2o11, and concerns about the economic stability of Greece and Italy as well as the debt problems in the United States of America have so far not adversely affected this development. According to provisional estimates by the DIW (German Institute for Economic Research), the gross domestic product grew by o.4 % in the second quarter compared he previous quarter. In the fi rst quarter of 2o11 German GDP grew by 1.5 %. German exports once again contributed considerably towards this positive economic development – signifi cantly benefi ting from a generally robust world economy. The favourable economic climate also had a positive effect on the German labour market. At the end of the second quarter, the unemployment rate in Germany stood at 6.9 %, compared to 7.5 % one year ago.
As MLP generates almost 1oo % of its total revenue in Germany, the country's favourable economic environment in the fi rst half-year 2o11 had only a limited effect on the business areas of MLP. Rising revenues from commissions and fees were recorded in health insurance and wealth management. In old-age provision, the uncertainty resulting from the fi nancial crisis coupled with the current discussion about topics such as the continuation of the debt crisis continue to cause hesitancy on the part of clients with respect to the conclusion of long-term contracts. However, the rate of decline in revenues already signifi cantly lessened in the second quarter.
[Figure 01]
In the fi rst half-year of the current fi nancial year, the old-age provision market in Germany remained diffi cult. Although the signifi cant lowering of the level of state pension retirement benefi ts has heightened public awareness of the need for greater private and occupational pension provision, many consumers remain hesitant with respect to the conclusion of long-term contracts. This hesitancy stems from uncertainties following the fi nancial crisis as well as from current developments such as the euro crisis. Surveys too (see chart) show a rising tendency among the general public towards short-term investments and consumption. According to fi gures released by the GDV (German Insurance Association), this situation led to a fall in the premium sum for new business in the fi rst half-year of 3 % to € 71.24 billion.
MLP was unable to escape this trend. Overall, revenues in old-age provision for the period from January to June 2o11 declined to € 1o6.9 million (€ 118.6 million).
The private health insurance market in Germany developed very positively during the period under review. This was mainly due to the legal framework changes which came into effect on January 1, 2o11. Above all, the fact that employees in statutory healthcare funds can now switch to private insurance after just once exceeding the annual earnings threshold of currently € 49,5oo had a positive effect. Furthermore there is an increasingly sceptical perception of the statutory healthcare funds as a result of the recent healthcare reform which also included a rise in the general level of premium as well as the possibility of the imposition of additional premiums. In addition, privately insured clients lastingly view their provision in a much more positive light than members of the statutory healthcare funds (see chart).
Overall, this results in an increased willingness to take out full private health insurance or supplementary healthcare cover. Against this background, revenues in this consulting area rose to € 41.8 million (€ 26.6 million ).
[Figure 03]
The development of the German investment fund industry in the fi rst half-year 2o11 was mixed. Compared to previous year, retail funds recorded outfl ows amounting to € 3.6 billion, whereas institutional investors entrusted around € 17 billion of new monies to specialised funds. The non-investment fund assets registered outfl ows of € 2.o billion. The outfl ows in retail funds were primarily attributable to the negative development in money market and fi xed income funds. On the other hand, equity and mixed funds registered infl ows. Overall, at the reference date on June 3o, 2o11, registered investment funds in Germany managed total assets of € 1,8o3.4 billion, representing a slight decline of 1 % (December 31, 2o1o: €1,829.6 billion).
However, the MLP Group made very positive progress in wealth management in the fi rst halfyear 2o11. Thanks to infl ows of monies from both private and institutional investors, managed client assets rose from € 19.8 billion at December 31, 2o1o to € 20.6 billion at June 3o, 2o11 – a new record high in the history of MLP.
[Figure 04]
The competitive situation in the German fi nancial services market did not fundamentally change in the fi rst half-year 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 amongst other aspects are differentiated by the breadth of the product portfolio and the consulting approach as well as 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 in the fi rst half-year 2o11, designed to further improve the level of investor protection: The Investor Protection Act ("Anlegerschutz- und Funktionsverbesserungsgesetz") which was passed in the early part of the year includes new training standards, a register for all consultants as well as so-called product information sheets. These regulations apply to securities service providers such as MLP. For the hitherto largely unregulated portion of the market, which is not covered by the banking supervisory authority, the federal cabinet initiated draft legislation in April for revision of the fi nancial investment brokerage and asset investment law ("Novellierung des Finanzanlagenvermittler- und Vermögensanlagerechts"), which calls for new training requirements for the brokerage of open and closed funds by intermediaries and also seeks to largely impose information, consulting and documentation obligations on this market sector – similar to those which are already in effect for banks. This legislation will probably be passed during the course of the current fi nancial year.
The legislation will further increase the requirements for all market participants, particularly for providers that are not covered by the banking supervisory authority, and will accelerate market consolidation.
During the period from January to June 2o11 and compared to last year total revenues increased by 3 % to € 24o.1 million (H1 2o1o: € 232.8 million). This growth was mainly driven by the successful development in revenues from commissions and fees, which rose by 4 % to € 217.6 million (€ 2o8.8 million). Interest income also made pleasing progress, climbing to € 13.8 million (€ 12.4 million). However, other revenues fell by 24 % to € 8.8 million (€ 11.6 million) due to lower recharges to MLP consultants.
The breakdown of the revenues from commissions and fees shows growth in almost all consulting areas. The health insurance business exhibited particularly dynamic progress – revenues rose by 57 % to € 41.8 million (€ 26.6 million). The increased demand was primarily due to the abolition of the three-year rule for insurees intending to switch to private insurance and to the increasingly sceptical perception on the part of broad sections of the population with respect to the statutory health insurance system. Wealth management also developed well. The increase from € 37.1 million to € 4o.2 million was due to positive business development both at MLP as well as at Feri. Clients continue to show a high level of interest in purchasing their own residential property. Against this background, revenues from mortgages and loans rose by 32 % to € 6.2 million (€ 4.7 million). In addition, the earnings from our joint venture company MLP Hyp, through which MLP conducts a considerable portion of its property mortgages, rose by 25 % to € o.5 million (€ o.4 million). Revenues in nonlife insurance amounted to € 2o.8 million and were thus also above the fi gure for the previous year (€ 2o.2 million).
However, revenues in old-age provision decreased, falling by 1o % from € 118.6 million to € 1o6.9 million. The continuingly diffi cult market environment is mainly due to the hesitancy of many clients with respect to the conclusion of long-term contracts.
Viewing the second quarter 2o11 in isolation, total revenues fell slightly to € 1o9.3 million (€ 111.6 million). Revenues from commissions and fees remained stable and amounted to € 98.9 million (€ 99.7 million), whereas interest income rose by 1o % to € 6.9 million (€ 6.3 million). Other revenues fell by 39 % to € 3.5 million (€ 5.7 million).
[Figure 05]
In the fi rst half-year 2o11 commission expenses increased from € 77.5 million to € 91.8 million. The higher expenses were mainly due to the generally improved results of our branches as well as to an adjustment of the trailer commissions paid to our consultants for existing contracts with their clients. In the same period, interest expenses fell to € 4.2 million (€ 5.1 million).
Due to exceptional costs for severance payments, which were incurred as a result of our announced effi ciency programme, personnel expenses in the fi rst half-year 2o11 increased to € 6o.6 million (€ 53.2 million ). On the other hand, the effi ciency programme measures already began to have a positive effect on the other operating expenses, which fell from € 8o.9 million to € 74.6 million.
After adjusting 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 from € 142.3 million to € 132.5 million.
Operating EBIT (Earnings before interest and taxes before one-off exceptional costs) in the fi rst half-year increased by 47 % to € 12.2 million (€ 8.3 million). As announced in April, the second quarter in particular was affected by one-off exceptional costs relating to the extensive investment and effi ciency programme, primarily for severance payments. For the fi rst half-year these exceptional charges amounted to € 1o.5 million, resulting in EBIT of € 1.7 million (€ 8.3 million). Earnings from the continuing operations amounted to € –o.2 million (€ 5.5 million), Group net profi t totalled € o.3 million (€ 5.3 million). Earnings per share (basic and diluted) thus amounted to € o.oo (€ o.o5).
In the second quarter the operating EBIT fell from € 4.3 million to € o.4 million. The one-off exceptional costs in this period amounted to € 7.3 million, resulting in EBIT (Earnings before interest and taxes) of € –6.8 million (€ 4.3 million). Earnings from the continuing operations fell to € –4.9 million (€ 3.5 million). In the discontinued operations earnings improved to € o.5 million (€ o.o million) mainly due to the capitalisation of receivables from the sale of MLP Finanzdienstleistungen AG, Vienna. Group net profi t thus amounted to € –4.4 million (€ 3.6 million).
| in € million | 1st half-year 2011 | 1st half-year 2010 | Change |
|---|---|---|---|
| Total revenue | 240.1 | 232.8 | 3.1 % |
| EBIT | 1.7 | 8.3 | –79.5 % |
| EBIT margin | 0.7 % | 3.6 % | – |
| Finance costs | – 0.6 | – 0.7 | –14.3 % |
| EBT | 1.1 | 7.6 | –85.5 % |
| EBT margin | 0.5 % | 3.3 % | – |
| Income tax | – 1.3 | – 2.1 | –38.1 % |
| Net profi t (continuing operations) | –0.2 | 5.5 | >–100 % |
| Net margin | –0.1 % | 2.4 % | – |
[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 correct at the fi rst half-year. Revenues from commissions and fees in wealth management and in health insurance rose in total by 29 % to € 82.o million (€ 63.7 million). After the fi rst six months, revenues in old-age provision stood at € 1o6.9 million (€ 118.6 million) and were thus 1o % below the previous year. Following an improvement in the second quarter, we expect a further upswing in this consulting area in the second half of the year – particularly in the fourth quarter. We therefore stick to our guidance.
The development of expenses in the fi rst half-year was as planned. The fi xed costs (personnel expenses, depreciation and amortisation, other operating expenses), which MLP seeks to reduce by a total of € 3o million by the end of 2o12, fell – after adjustment for one-off exceptional costs – by a total of € 9.8 million in the fi rst half-year (see sections on "Development of expenses", page 1o).
Assets under Management, which forms an important foundation for future revenue in wealth management, reached a new record high of € 2o.6 billion (March 31, 2o11: € 19.9 billion ) – thanks primarily to the acquisition of new institutional clients. In old-age provision the premium sum in the second quarter stood at € 1.o billion and thus remained at the previous year's level (Q2 2o1o: € 1.o billion). At the half-year, the fi gure amounted to € 1.9 billion and was therefore slightly below the previous year (H1 2o1o: € 2.o billion). Occupational pension provision accounted for 1o % of this amount (Full year 2o1o: 9 %).
MLP welcomed 15,3oo new clients (16,ooo) in the period from January to June. The total number of clients rose to 781,ooo (March 31, 2o11: 778,ooo). The number of consultants fell to 2,186 (March 31, 2o11: 2,222).
At the balance sheet reference date on June 3o, 2o11, the total assets of the MLP Group amounted to € 1,4o4.8 million, corresponding to a decrease of 6.7 % compared to the end of 2o1o. The main infl uencing factors were the payment of the dividend for the fi nancial year 2o1o as well as of the purchase price for the remaining Feri shares. The main changes on the asset side of the balance sheet relate to three items: our receivables from fi nancial institutions reduced by € 29.7 million to € 455.3 million which was mainly due to the profi t transfer agreement with our subsidiary MLP Finanzdienstleistungen AG for the fi nancial year 2o1o. Our fi nancial investments reduced in the period under review by € 15.9 million to € 236.8 million which was due to the disposal of investment fund holdings and the liquidation of fi xed term deposits. This exceeded the infl ow of fi xed interest securities. Other accounts receivable and other assets fell from € 122.o million to € 88.3 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 | June 30, 2011 | Dec 31, 2010 | Change |
|---|---|---|---|
| Intangible Assets | 144.8 | 148.2 | – 2.3 % |
| Property, plant and equipment | 71.7 | 74.4 | – 3.6 % |
| Investment property | 11.0 | 11.2 | – 1.8 % |
| Shares accounted for using the equity method | 3.4 | 2.9 | 17.2 % |
| Deferred tax assets | 4.0 | 3.3 | 21.2 % |
| Receivables from clients in the banking business | 340.4 | 343.5 | – 0.9 % |
| Receivables from banks in the banking business | 455.3 | 485.0 | – 6.1 % |
| Financial investments | 236.8 | 252.7 | –6.3 % |
| Tax refund claims | 12.7 | 11.8 | 7.6 % |
| Other accounts receivable and other assets | 88.3 | 122.0 | – 27.6 % |
| Cash and cash equivalents | 36.3 | 50.5 | – 28.1 % |
| Total | 1,404.8 | 1,505.4 | – 6.7 % |
Due to the payment of the dividend for the fi nancial year 2o1o amounting to € 32.4 million, the equity capital decreased from € 428.4 million to € 395.9 million. The equity capital position of MLP remains very good with an equity ratio of 28.2 % (28.5 %).
The development of our deposit business is shown in the liabilities due to clients. The liabilities due to clients from the banking business in the fi rst half-year increased from € 819.3 million to € 84o.1 million. These mainly consist of deposits in the areas of open and instant access.
Other liabilities reduced by 46.8 % to € 94.6 million. This relates to 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. Furthermore, the payment of the purchase price for the remaining shares in Feri Finance AG also contributed to the reduction on other liabilities.
| in € million | June 30, 2011 | Dec 31, 2010 | Change |
|---|---|---|---|
| Shareholders' equity | 395.9 | 428.4 | –7.6 % |
| Provisions | 47.1 | 52.0 | –9.4 % |
| Deferred tax liabilities | 10.7 | 10.6 | 0.9 % |
| Liabilities due to clients in the banking business | 840.1 | 819.3 | 2.5 % |
| Liabilities due to banks in the banking business | 14.8 | 16.4 | – 9.8 % |
| Tax liabilities | 1.6 | 1.1 | 45.5 % |
| Other liabilities | 94.6 | 177.7 | – 46.8 % |
| Total | 1,404.8 | 1,505.4 | – 6.7 % |
[Table 04]
Cash fl ow from operating activities in the continuing operations decreased to € 56.6 million (€ 81.o million). Here, main payments result from the deposit business with our clients and from the investment of these monies. This is primarily due to a lower increase of the account deposits compared to the previous year.
The change in cash flow from investment activities of the continuing operations from € –75.9 million to € –93.o 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 amount of € 35.o million (€ 4o.o million) as well as investments in securities of net € 5.o million (€ 33.o million) also affected the cash fl ow.
The change in the cash fl ow from fi nancing activities in the continuing operations from € –29.1 million to € –32.4 million is almost entirely due to higher dividend payments.
Overall, at the end of the fi rst half-year 2o11 the Group's liquid assets stood at around € 16o 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 | 2nd quarter 2011 | 2nd quarter 2010 | 1st half-year 2011 | 1st half-year 2010 |
|---|---|---|---|---|
| Cash and cash equivalents at the beginning of the period |
201.3 | 116.0 | 125.5 | 123.6 |
| Cash fl ow from operating activities | 7.6 | 33.0 | 56.6 | 81.0 |
| Cash fl ow from investing activities | –120.0 | – 27.2 | –93.0 | – 75.9 |
| Cash fl ow from fi nancing activities | – 32.4 | – 27.0 | – 32.4 | – 29.1 |
| Changes in cash and cash equivalents | –144.7 | – 21.1 | –68.7 | – 24.0 |
| Infl ows/outfl ows due to divestments | – 0.3 | 1.7 | – 0.4 | – 3.1 |
| Cash and cash equivalents at the end of the period |
56.3 | 96.6 | 56.3 | 96.6 |
[Table 05]
No capital measures were undertaken during the period under review.
In the fi rst half-year MLP invested € 1.9 million which amounted to € o.4 million less than the investments made during the same period of the previous year of € 2.3 million. Around 75 % 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.
In the fi rst half-year 2o11 MLP grew total revenues by 3 % and increased operating EBIT by 47 %. In this respect MLP reaped the benefi ts of its holistic business model: falling revenues from commissions and fees in the old-age provision area were compensated by rising revenues in the areas of health insurance and wealth management. At the same time – and after adjustments for one-off exceptional items – we have further reduced our fi xed costs. After conclusion of the fi rst half-year, 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 June 3o, 2o11 the Group had a total of 1,6o8 employees, of which 18o were temps or marginal part-time employees. The decrease compared to the previous year is mainly due to a reduction in the number of marginal part-time employees as well as assistants in the branches. The major portion of the personnel reductions at the headquarters in Wiesloch, which were announced in April, will only become evident in the key fi gures from the second half-year.
During the period under review 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.
| June 30, 2011 | June 30, 2010 | |
|---|---|---|
| Financial Services | 1,342 | 1,417 |
| Feri | 253 | 251 |
| Holding | 13 | 14 |
| Total | 1,608 | 1,682 |
[Table 06]
In the second quarter MLP began to roll out an extensive communication campaign, focussing on old-age provision. Through a special supplement entitled "Welt Klasse" in the "Welt am Sonntag" newspaper on May 22 and an internet presence at www.mlp-laengerleben.de (German only) MLP shows clients and interested readers the effects that rising life expectancy can have on various aspects of their life – and how to optimally prepare and provide for this phase.
In May MLP was the lead sponsor for the eighth time of the Mannheim Rhine-Neckar marathon which has become an established event in the region and popular amongst runners throughout the country. Furthermore, the two support programmes for students "Join the best" and "Medical Excellence" have moved onto the next stage. At the start of July MLP completed its "Surfi n' Tour" at 33 university locations in Germany to mark its 40th anniversary. Many students visited the road show and were taken back to the atmosphere of the time when MLP was founded. A comprehensive review is available on the Internet at www.mlp-surfi ntour.de (German only).
There were two changes to the Executive Board team during the period under review. On March 31, 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.
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 half-year 2o11 MLP increased total revenues in the fi nancial services segment from € 214.3 million to € 219.2 million compare to the previous year. Reasons for this rise include the high level of interest on the part of our clients to purchase their own residential property, which has a positive effect on the business development of our loans and mortgages business area, and rising revenues in the non-life insurance area. However, the most dynamic development was achieved in the health insurance area, where revenues in the fi rst half-year climbed by 57 % (see section on "Results of Operations").
Despite higher total revenues, EBIT fell from € 11.3 million to € 6.4 million. This decrease was mainly due to the rise in commission expenses to € 89.4 million (€ 76.7 million) and to the increase in personnel expenses to € 43.8 million (€ 39.2 million) due to the one-off exceptional costs within the framework of the investment and effi ciency programme. The fi nancial result remained almost unchanged and amounted to € –o.5 million at the end of June 2o11. Earnings before taxes (EBT) fell from € 1o.8 million to € 5.9 million.
Compared to the same period of the previous year total revenues in the second quarter 2o11 decreased from € 1o2.3 million to € 97.9 million. EBIT fell to € –5.1 million (€ 6.o million). EBT declined from € 5.8 million to € –5.2 million.
[Figure 07]
The companies of Feri Finance AG were also able to increase revenues in the fi rst half-year 2o11. The companies that form this segment Feri improved total revenues from € 18.3 million to € 2o.9 million. EBIT fell to € –o.5 million (€ o.o million). Primarily this 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. At the end of June 2o11 EBT amounted to € –o.5 million.
Compared to the same quarter in the previous year, the companies of Feri Finance AG increased total revenues signifi cantly in the second quarter 2o11 from € 9.5 million to € 11.5 million. Corresponding to the half-year result, exceptional costs also affected the EBIT in the second quarter which fell from € o.3 million to € –o.2 million. EBT declined from € o.2 million to € –o.2 million.
Total revenue and EBIT for the Feri segment (in € million)
In the fi rst half-year 2011 the Holding segment posted a fall in total revenues from € 6.3 million to € 5.7 million. EBIT fell to € –4.1 million (€ –2.9 million). This development was primarily due to increased personnel expenses which rose from € 2.3 million to € 3.7 million mainly on account of one-off exceptional costs within the framework of the investment and effi ciency programme. The fi nancial result improved signifi cantly from € o.6 million to € 2.1 million. EBT improved slightly and stood at € –2.o million (€ –2.3 million) at the end of June.
Total revenues in the Holding segment fell only slightly in the second quarter 2o11 to € 2.7 million (€ 2.9 million). EBIT improved from € –2.o million to € –1.6 million. EBT at the end of the second quarter amounted to € –1.1 million compared to € –2.o million in the previous year.
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 counter-party default risks, market price risks, liquidity risks, and operational or other risks. The MLP Group has adequate liquid funds. At the reporting date on June 3o, 2o11, our core capital ratio amounted to 23.1 % and continued to far exceed the 8 % level prescribed by the supervising authority. 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.
The German gross domestic product grew considerably during the first half-year 2o11. Overall, experts expect the German economy, in which MLP generates almost 1oo % of its total revenues, to continue to expand during the second half-year 2o11. However, the Federal Ministry of Economics anticipates that the macroeconomic growth will slow somewhat. This statement is backed up by the most recent development in the ifo business climate index issued by the Institute for Economic Research (ifo) in Munich, which, as an early indicator, provides information about the assessment of the current business situation of industry. In June this index unexpectedly fell from 114.5 to 112.9 points. Accordingly, the surveyed companies also assume that the current upswing will lose some of its present momentum.
Overall, the federal government expects the gross domestic product to grow by at least 2.6 % during the current year and by 1.8 % in 2o12. The labour market will also benefi t from these developments. Furthermore, the federal government anticipates that due to the latest round of wage settlements, the gross wage sum will rise at a normal rate, both in this year and next year. An increase of 3.1 % is expected in 2o11 and 3.3 % in 2o12.
In general, it must however be assumed that the foreign trade risks, such as the effects of the debt crisis in the United States of America and in Europe will increase and impact the development of the German economy.
[Figure 9]
A 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 six months of the fi nancial year 2o11 there were no signifi cant changes to the overall situation.
In private and occupational old-age 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 – irrespective of the current hesitancy on the part of many consumers - will once again result in sustainable growth rates in this market segment.
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 could result 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 for the private health insurance 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.
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 factor infl uencing the market development are the regulatory framework conditions. 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 ("Anlegerschutz- und Funktionsverbesserungsgesetz") and the revision of fi nancial investment brokerage and asset investment legislation ("Novellierung des Finanzanlagenvermittler- und Vermögensanlagerechts"). 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 are accelerating our ongoing effi ciency programme and pulling 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.
[Table 07]
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. At the same time 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 half-year 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. However, the business environment in old-age provision remains challenging. From a current perspective, we still expect to achieve stable revenues in this area for the current fi nancial year, followed by a slight increase in 2o12.
Despite one-off exceptional costs of approximately € 3o million, we expect to achieve a positive result in 2o11. We also 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 |
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.
During the period under review the worldwide stock markets developed very differently and fl uctuated signifi cantly. In this respect, in the fi rst half-year the American Dow Jones Industrial Average Index was less infl uenced by the debt problems in the USA than the European indices were affected by the fi nancial problems of certain member states. At the end of June, the Dow Jones Index stood at 12,414 points and was thus 7.3 % higher than at the start of the year. During the fi rst half-year 2o11 the German DAX index rose by 5.5 % and closed at the end of June at 7,376 points. The small cap index SDAX rose more modestly, climbing by 3.3 %. At June 3o, 2o11 the index stood at 5,417 points. The DAXsector Financial Services index – the index for fi nancial services companies in Germany – also rose slightly by 2 % compared to the start of the year.
The MLP share
At June 3o, 2o11 the MLP share stood at € 7.o7, representing a fall of 7.5 % compared to its closing price at the end of 2o1o. The MLP share price fl uctuated between a high of € 7.85 at the start of February and a low of € 6.41 in the middle 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 2011 | 1st half-year 2010 | |
|---|---|---|
| Share price at the beginning of the half-year | € 7.64 | € 8.27 |
| Share price high | € 7.85 | € 8.27 |
| Share price low | € 6.41 | € 6.21 |
| Share price at the end of the half-year | € 7.07 | € 7.31 |
| Dividend for the previous year | € 0.30 | € 0.25 |
| Market capitalisation (End of reporting period) | € 762,695,607.66 | € 788,586,264.78 |
| [Table 08] |
At the Annual General Meeting on June 1o, 2o11 the shareholders of MLP AG approved almost unanimously (99.96 %) the proposal by the Executive and Supervisory Boards to pay a dividend of € o.3o per share – an increase of 2o % compared to the previous year. The dividend sum thus amounts to € 32.4 million, the distribution ratio amounts to almost 1oo % of net profi t.
In total, more than 6oo shareholders attended the Annual General Meeting and represented around 73 % of the equity capital. They passed all the agenda items with a large majority. The resolutions included the approval of the profi t transfer contract with Feri Finance AG and the remuneration of the members of the Executive Board. Furthermore the shareholders elected KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, as auditor for the fi nancial statements and the consolidated fi nancial statements as well as for the review of the half-year fi nancial report 2o11. Additionally they approved a resolution permitting MLP to buy back its own shares up to a maximum of 1o % of share capital until December 9, 2o13.
Further information about all aspects of the MLP Annual General Meeting is available from our Investor Relations page on the Internet at www.mlp-ag.com/investorrelations/calendar/annualgeneral-meeting.
| All fi gures in €'000 | Notes | 2nd quarter 2011 | 2nd quarter 2010 | 1st half-year 2011 | 1st half-year 2010 |
|---|---|---|---|---|---|
| Revenue | (6) | 105,850 | 105,963 | 231,376 | 221,252 |
| Other revenue | 3,456 | 5,652 | 8,772 | 11,555 | |
| Total revenue | 109,306 | 111,616 | 240,148 | 232,807 | |
| Commission expenses | (7) | –43,462 | –37,152 | –91,754 | –77,475 |
| Interest expenses | –1,991 | –2,588 | –4,164 | –5,058 | |
| Personnel expenses | (8) | –30,736 | –25,596 | –60,624 | –53,214 |
| Depreciation and amortisation | (9) | –4,195 | –4,056 | –7,817 | –8,168 |
| Other operating expenses | (10) | –36,041 | –38,200 | –74,569 | –80,932 |
| Earnings from shares accounted for using the equity method | 275 | 260 | 509 | 363 | |
| Earnings before interest and tax (EBIT) | –6,843 | 4,284 | 1,729 | 8,323 | |
| Other interest and similar income | 800 | 1,758 | 2,048 | 3,421 | |
| Other interest and similar expenses | –413 | –1,968 | –2,658 | –4,131 | |
| Finance cost | (11) | 386 | –211 | –610 | –710 |
| Earnings before tax (EBT) | –6,457 | 4,073 | 1,119 | 7,613 | |
| Income taxes3 | 1,606 | –560 | –1,341 | –2,110 | |
| Earnings from continuing operations after tax | –4,851 | 3,513 | –222 | 5,503 | |
| Earnings from discontinued operations after tax | (18) | 496 | 41 | 518 | -245 |
| Net profi t | –4,355 | 3,555 | 296 | 5,258 | |
| Of which attributable to | |||||
| owners of the parent company | –4,355 | 3,555 | 296 | 5,258 | |
| Earnings per share in €1 | |||||
| From continuing operations | |||||
| basic | –0.04 | 0.03 | 0.00 | 0.05 | |
| diluted2 | –0.04 | 0.03 | 0.00 | 0.05 | |
| From continuing and discontinued operations | |||||
| basic | –0.04 | 0.03 | 0.00 | 0.05 | |
| diluted2 | –0.04 | 0.03 | 0.00 | 0.05 |
Basis of calculation: Average number of shares at June 30, 2011: 107,877,738, Potential shares (convertible debentures): 448,005.
[Table 09]
2 The ordinary shares resulting from the conversion of convertible debentures are treated as shares already issued.
3 A tax effect correction undertaken at June 30, 2010 was withdrawn at December 31,2010. This resulted in an income tax decrease
amounting to € 434 thsd which reduced the earnings from discontinued operations.
| All fi gures in €'000 | 2nd quarter 2011 | 2nd quarter 2010 | 1st half-year 2011 | 1st half-year 2010 |
|---|---|---|---|---|
| Net profi t | –4,355 | 3,555 | 296 | 5,258 |
| Other comprehensive income | ||||
| Securities marked to market | 61 | 652 | – 545 | 2,354 |
| Tax expense | – 48 | – 70 | 42 | – 82 |
| Other comprehensive income after tax | 12 | 581 | – 503 | 2,272 |
| Total comprehensive income for the year | –4,343 | 4,136 | –208 | 7,530 |
| Total comprehensive income attributable to | ||||
| owners of the parent company | –4,343 | 4,136 | –208 | 7,530 |
[Table 10]
| All fi gures in €'000 | Notes | June 30, 2011 | Dec 31, 2010 |
|---|---|---|---|
| Intangible assets | 144,777 | 148,157 | |
| Property, plant and equipment | 71,652 | 74,403 | |
| Investment property | 11,045 | 11,178 | |
| Shares accounted for using the equity method | 3,419 | 2,910 | |
| Deferred tax assets | 4,005 | 3,283 | |
| Receivables from clients in the banking business | 340,439 | 343,453 | |
| Receivables from banks in the banking business | (12) | 455,335 | 485,023 |
| Financial assets | (13) | 236,758 | 252,687 |
| Tax refund claims | 12,704 | 11,846 | |
| Other accounts receivable and other assets | (14) | 88,316 | 121,999 |
| Cash and cash equivalents | 36,331 | 50,470 | |
| Total | 1,404,782 | 1,505,411 | |
| [Table 11] |
| All fi gures in €'000 | Notes | June 30, 2011 | Dec 31, 2010 |
|---|---|---|---|
| Shareholders' equity | (15) | 395,906 | 428,390 |
| Provisions | 47,143 | 51,960 | |
| Deferred tax liabilities | 10,718 | 10,551 | |
| Liabilities due to clients in the banking business | 840,123 | 819,294 | |
| Liabilities due to banks in the banking business | 14,781 | 16,391 | |
| Tax liabilities | 1,553 | 1,109 | |
| Other liabilities | (14) | 94,558 | 177,716 |
| Total | 1,404,782 | 1,505,411 |
| All fi gures in €'000 | 1st half-year 2011 | 1st half-year 2010 |
|---|---|---|
| Cash fl ow from operating activities | 56,203 | 77,982 |
| Cash fl ow from investing activities | –92,969 | –75,871 |
| Cash fl ow from fi nancing activities | –32,368 | –29,141 |
| Change in cash and cash equivalents | –69,134 | –27,030 |
| Cash and cash equivalents at the end of the period | 56,331 | 96,595 |
| Thereof discontinued operations | ||
| Cash fl ow from operating activities | –398 | –3,062 |
| Cash fl ow from investing activities | – | – |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | –398 | –3,062 |
| Cash and cash equivalents at the end of the period | – | – |
| [Table 13] |
| All fi gures in €'000 | 2nd quarter 2011 | 2nd quarter 2010 |
|---|---|---|
| Cash fl ow from operating activities | 7,271 | 34,683 |
| Cash fl ow from investing activities | –119,919 | –27,160 |
| Cash fl ow from fi nancing activities | –32,366 | –26,969 |
| Change in cash and cash equivalents | –145,014 | –19,446 |
| Cash and cash equivalents at the end of the period | 56,331 | 96,595 |
| Thereof discontinued operations | ||
| Cash fl ow from operating activities | –335 | 1,689 |
| Cash fl ow from investing activities | – | – |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | –335 | 1,689 |
| Cash and cash equivalents at the end of the period | – | – |
| [Table 14] |
| 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 | – | – | – | 5,258 | 5,258 |
| Other comprehensive income after tax | – | – | 2,272 | – | 2,272 |
| Total comprehensive income | – | – | 2,272 | 5,258 | 7,530 |
| As at June 30, 2010 | 107,878 | 142,184 | 699 | 148,333 | 399,092 |
| 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 | – | – | – | 88 | 88 |
| Transactions with owners | – | – | – | –32,276 | –32,276 |
| Net profi t | – | – | – | 296 | 296 |
| Other comprehensive income after tax | – | – | –503 | – | –503 |
| Total comprehensive income | – | – | –503 | 296 | –208 |
| As at June 30, 2011 | 107,878 | 142,184 | 690 | 145,155 | 395,906 |
[Table 15]
| All fi gures in €'000 | 2nd quarter 2011 | 2nd quarter 2010 | |
|---|---|---|---|
| Revenue | 95,856 | 98,312 | |
| of which total inter–segment revenue | 40 46 |
||
| Other revenue | 2,082 | 3,941 | |
| of which total inter–segment revenue | 413 462 |
||
| Total revenue | 97,938 | 102,253 | |
| Commission expenses | –41,566 | –36,740 | |
| Interest expenses | –1,991 | –2,588 | |
| Personnel expenses | –23,253 | –18,653 | |
| Depreciation/amortisation and impairment | –2,975 | –2,711 | |
| Other operating expenses | –33,504 | –35,850 | |
| Earnings from shares accounted for using the equity method | 275 260 |
||
| Segment earnings before interest and tax (EBIT) | –5,076 | 5,971 | |
| Other interest and similar income | 49 91 |
||
| Other interest and similar expenses | –199 | –225 | |
| Finance cost | –151 | –134 | |
| Earnings before tax (EBT) | –5,227 | 5,837 | |
| Income taxes | |||
| Earnings from continuing operations after tax | |||
| Earnings from discontinued operations after tax | 496 41 |
||
| Net profi t (total) | |||
| Feri | Holding | Consolidation/Other | Total | ||||
|---|---|---|---|---|---|---|---|
| 2nd quarter 2011 | 2nd quarter 2010 | 2nd quarter 2011 | 2nd quarter 2010 | 2nd quarter 2011 | 2nd quarter 2010 | 2nd quarter 2011 | 2nd quarter 2010 |
| 10,090 | 7,768 | – | – | –95 | –117 | 105,850 | 105,963 |
| 56 | 71 | – | – | –95 | –117 | 0 | 0 |
| 1,407 | 1,705 | 2,687 | 2,915 | –2,720 | –2,909 | 3,456 | 5,652 |
| – | – | 2,307 | 2,447 | –2,720 | –2,909 | 0 | 0 |
| 11,497 | 9,473 | 2,687 | 2,915 | –2,816 | –3,026 | 109,306 | 111,616 |
| –1,926 | –407 | – | – | 30 | –5 | –43,462 | –37,152 |
| – | – | – | – | 1 | – | –1,991 | –2,588 |
| –6,651 | –5,971 | –832 | –972 | – | – | –30,736 | –25,596 |
| –544 | –586 | –676 | –759 | – | – | –4,195 | –4,056 |
| –2,545 | –2,258 | –2,804 | –3,156 | 2,811 | 3,064 | –36,041 | –38,200 |
| – | – | – | – | – | – | 275 | 260 |
| –169 | 251 | –1,625 | –1,972 | 26 | 33 | –6,843 | 4,284 |
| 9 | 1 | 748 | 1,667 | –6 | –2 | 800 | 1,758 |
| –8 | –22 | –216 | –1,726 | 10 | 5 | –413 | –1,968 |
| 1 | –21 | 532 | –59 | 4 | 3 | 386 | –211 |
| –168 | 230 | –1,093 | –2,031 | 30 | 37 | –6,457 | 4,073 |
| 1,606 | –560 | ||||||
| –4,851 | 3,513 | ||||||
| 496 | 41 | ||||||
| –4,355 | 3,555 | ||||||
[Table 16]
| Financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 1st half–year 2011 | 1st half–year 2010 | |
| Revenue | 212,976 | 205,804 | |
| of which total inter–segment revenue | 99 | 103 | |
| Other revenue | 6,258 | 8,469 | |
| of which total inter–segment revenue | 843 | 903 | |
| Total revenue | 219,234 | 214,274 | |
| Commission expenses | –89,417 | –76,738 | |
| Interest expenses | –4,165 | –5,059 | |
| Personnel expenses | –43,815 | –39,190 | |
| Depreciation/amortisation and impairment | –5,338 | –5,471 | |
| Other operating expenses | –70,631 | –76,932 | |
| Earnings from shares accounted for using the equity method | 509 | 363 | |
| Segment earnings before interest and tax (EBIT) | 6,376 | 11,247 | |
| Other interest and similar income | 107 | 187 | |
| Other interest and similar expenses | –579 | –640 | |
| Finance cost | –473 | –453 | |
| Earnings before tax (EBT) | 5,903 | 10,794 | |
| Income taxes | |||
| Earnings from continuing operations after tax | |||
| Earnings from discontinued operations after tax | 518 | –245 | |
| Net profi t (total) | |||
| Feri | Holding | Consolidation/Other | Total | ||||
|---|---|---|---|---|---|---|---|
| 1st half–year 2011 | 1st half–year 2010 | 1st half–year 2011 | 1st half–year 2010 | 1st half–year 2011 | 1st half–year 2010 | 1st half–year 2011 | 1st half–year 2010 |
| 18,600 | 15,644 | – | – | –200 | –197 | 231,376 | 221,252 |
| 101 | 94 | – | – | –200 | –197 | 0 | 0 |
| 2,284 | 2,633 | 5,688 | 6,251 | –5,458 | –5,799 | 8,772 | 11,555 |
| – | – | 4,615 | 4,895 | –5,458 | –5,799 | 0 | 0 |
| 20,884 | 18,278 | 5,688 | 6,251 | –5,658 | –5,996 | 240,148 | 232,807 |
| –2,387 | –808 | – | – | 50 | 71 | –91,754 | –77,475 |
| – | – | – | – | 1 | 1 | –4,164 | –5,058 |
| –13,113 | –11,741 | –3,696 | –2,283 | – | – | –60,624 | –53,214 |
| –1,070 | –1,178 | –1,408 | –1,519 | – | – | –7,817 | –8,168 |
| –4,846 | –4,522 | –4,679 | –5,398 | 5,587 | 5,920 | –74,569 | –80,932 |
| – | – | – | – | – | – | 509 | 363 |
| –533 | 29 | –4,095 | –2,949 | –20 | –3 | 1,729 | 8,323 |
| 17 | 2 | 4,407 | 4,244 | –2,483 | –1,013 | 2,048 | 3,421 |
| –12 | –25 | –2,285 | –3,632 | 218 | 166 | –2,658 | –4,131 |
| 5 | –23 | 2,122 | 612 | –2,265 | –847 | –610 | –710 |
| –528 | 5 | –1,973 | –2,337 | –2,284 | –850 | 1,119 | 7,613 |
| –1,341 | –2,110 | ||||||
| –222 | 5,503 | ||||||
| 518 | –245 | ||||||
| 296 | 5,258 |
[Table 17]
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, 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. The interim accounts were subject to an independent auditor's review.
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:
• Improvement to IFRSs 2o1o.
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. 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 since 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), a subsidiary of Feri Institutional Advisors GmbH, Bad Homburg v.d. Höhe, has been incorporated into the scope of consolidation.
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 2011 | 2nd quarter 2010 | 1st half-year 2011 | 1st half-year 2010 |
|---|---|---|---|---|
| Old-age provision | 56,374 | 59,707 | 106,882 | 118,568 |
| Health insurance | 13,707 | 13,746 | 41,751 | 26,605 |
| Wealth management | 20,857 | 18,803 | 40,206 | 37,127 |
| Non-life insurance | 3,984 | 3,781 | 20,796 | 20,177 |
| Loans and mortgages | 3,040 | 2,624 | 6,167 | 4,745 |
| Other commission and fees | 982 | 1,014 | 1,757 | 1,583 |
| Commission and fees | 98,945 | 99,676 | 217,558 | 208,805 |
| Interest income | 6,905 | 6,288 | 13,818 | 12,447 |
| Total | 105,850 | 105,963 | 231,376 | 221,252 |
[Table 18]
Commission expenses increased from € 77,475 thsd to € 91,754 thsd. They mainly contain commissions and other remuneration components for the self-employed MLP consultants. For further explanations please refer to the Management Report.
Personnel expenses increased from € 53,214 thsd to € 6o,624 thsd. This was mainly due to reorganisation costs. For further explanations please refer to the Management Report.
At June 3o, 2o11, the MLP Group had the following numbers of employees in the strategic fi elds of business.
| All fi gures in €'000 | June 30, 2011 | of which part-time employees |
June 30, 2010 | of which part-time employees |
|---|---|---|---|---|
| Financial services | 1,342 | 120 | 1,417 | 146 |
| Feri | 253 | 59 | 251 | 65 |
| Holding | 13 | 1 | 14 | 1 |
| Total | 1,608 | 180 | 1,682 | 212 |
Depreciation/amortisation and impairment includes non-scheduled write-downs on property, plant and equipment amounting € 628 thsd (previous year: € o thsd).
| All fi gures in €'000 | 2nd quarter 2011 | 2nd quarter 2010 | 1st half-year 2011 | 1st half-year 2010 |
|---|---|---|---|---|
| IT operations | 12,009 | 11,625 | 24,206 | 23,313 |
| Rental and leasing | 4,099 | 3,954 | 8,043 | 8,445 |
| Administration operations | 3,304 | 3,662 | 6,548 | 7,161 |
| Consultancy | 2,802 | 4,256 | 5,816 | 7,799 |
| Representation and advertising | 2,309 | 1,693 | 4,231 | 3,509 |
| Training and further education | 730 | 697 | 2,643 | 2,605 |
| Write-downs and impairments of other accounts receivable and other assets |
102 | 1,681 | 1,797 | 3,477 |
| External services – banking business | 1,669 | 1,847 | 3,279 | 3,642 |
| Travel expenses | 1,301 | 931 | 2,552 | 1,834 |
| Premiums and fees | 1,066 | 1,032 | 2,305 | 2,656 |
| Entertainment | 650 | 558 | 1,799 | 1,643 |
| Expenses for commercial agents | 949 | 1,154 | 1,781 | 2,671 |
| Insurance | 845 | 1,084 | 1,590 | 1,815 |
| Write-downs and impairments of other receiva bles from clients in the banking business |
538 | 872 | 1,062 | 2,171 |
| Maintenance | 343 | 424 | 866 | 804 |
| Other personnel costs | 353 | 280 | 660 | 577 |
| Audit | 207 | 254 | 439 | 600 |
| Expenses from the disposal of assets | 64 | 19 | 71 | 29 |
| Sundry other operating expenses | 2,702 | 2,177 | 4,879 | 6,180 |
| Total | 36,041 | 38,200 | 74,569 | 80,932 |
[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. External services - banking business mainly contain securities settlement and transaction costs in connection with the MLP credit card. The consulting costs are made up of tax advice costs, legal advice costs as well as general and IT consulting costs. The costs recognised under representation and advertising are attributable to media presence and client information activities. 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 specialist literature.
| All fi gures in €'000 | 2nd quarter 2011 | 2nd quarter 2010 | 1st half-year 2011 | 1st half-year 2010 |
|---|---|---|---|---|
| Other interest and similar income | 800 | 1,758 | 2,048 | 3,421 |
| Interest and similar expenses from fi nancial instruments |
–94 | –1,655 | –2,017 | –3,506 |
| Accrued interest on pension provisions | –320 | –313 | –641 | –625 |
| Other interest and similar expenses | –413 | –1,968 | –2,658 | –4,131 |
| Finance cost | 386 | –211 | –610 | –710 |
[Table 21]
The reduction in other interest and similar income is attributable to the non-recurrence of interest that arose last year in connection with an audit, as well as to lower income from interest rate swaps. The decrease in other interest and similar expenses is mainly due to the non-recurrence of write-downs on fi nancial investments (previous year: € 1,236 thsd) and to lower expenses for interest rate swaps. On the other hand, there were higher dividend payments to the other managing partners of Feri Finance AG amounting to € 1,740 thsd (previous year: € 653 thsd).
The change in receivables from banks in the banking business from € 485,o23 thsd to € 455,335 thsd, is mainly attributable to the profi t transfer payment by MLP Finanzdienstleistungen AG to MLP AG and to the new investment of monies.
| All fi gures in €'000 | June 30, 2011 | Dec 31, 2010 |
|---|---|---|
| Available for sale | ||
| Debt securities and holdings in investment funds | 24,242 | 40,639 |
| Investments | 3,224 | 3,385 |
| Held-to-maturity securities | 104,016 | 83,379 |
| Loans and receivables | 105,275 | 125,284 |
| Total | 236,758 | 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 June 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 half-year 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 half-year 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 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 € 21.8 million to € 56.2 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 change in the cash fl ow from fi nancing activities mainly results from the higher dividend distribution by MLP AG compared to the comparative period.
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 | June 30, 2011 | June 30, 2010 |
|---|---|---|
| Cash and cash equivalents | 36,331 | 51,617 |
| Loans < 3 months | 20,000 | 45,000 |
| Liabilities to banks due on demand | – –22 |
|
| Cash and cash equivalents | 56,331 | 96,595 |
| [Table 23] |
[Table 24]
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 | 2nd quarter 2011 | 2nd quarter 2010 | 1st half-year 2011 | 1st half-year 2010 |
|---|---|---|---|---|
| Operating profi t | ||||
| Earnings from the sale/disclosure of operations before tax |
700 | 63 | 732 | -242 |
| Income taxes* | –205 | –22 | –214 | –4 |
| Earnings from the sale of operations after tax |
496 | 41 | 518 | –245 |
| Earnings from discontinued operations after tax |
496 | 41 | 518 | –245 |
| Earnings per share in € | ||||
| from discontinued operations | ||||
| basic and diluted | 0.00 | 0.00 | 0.00 | 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.
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 fi rst half-year 2o11, MLP recorded receivables amounting to € 1 million. In addition, MLP is investigating the possibility of further receivables from the purchaser. The sale of MLP Finanzdienstleistungen AG, Vienna gives rise to contingent liabilities amounting to € o.9 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, August 1o, 2o11
MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Manfred Bauer Reinhard Loose Muhyddin Suleiman
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, 2o11 to June 3o, 2o11 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 11, 2o11
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 1o, 2o11
MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Manfred Bauer Reinhard Loose Muhyddin Suleiman
| German Gross Domestic Product, change | |
|---|---|
| in % compared to the previous quarter | |
| Survey shows declining willingness to save money | |
| for old-age provision | |
| Private health insured persons are satisfi ed with | |
| their insurance protection | |
| Infl ows and outfl ows in various types of mutual | |
| funds in Germany in H1 2011 | |
| Total revenue from continuing operations | |
| EBIT from continuing operations | |
| Total revenue and EBIT for the fi nancial services | |
| segment | |
| Total revenue and EBIT for the Feri segment | |
| Expected growth in GDP in Germany | |
| Development of the operating EBIT margin | |
| 2007–2012 | |
| 05 Figure 01 06 Figure 02 07 Figure 03 08 Figure 04 09 Figure 05 11 Figure 06 17 Figure 07 18 Figure 08 19 Figure 09 21 Figure 10 |
| 22 | Figure 11 | MLP share, SDAX and DAXsector Financial Services |
|---|---|---|
| in the fi rst half-year 2011 |
02 Table 01 MLP Key fi gures
| 11 Table 02 | Earnings development of continuing operations | |
|---|---|---|
| 12 Table 03 | Assets as at June 30, 2011 | |
| 13 Table 04 | Liabilities and shareholders' equity as at | |
| June 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 |
| 23 Table 08 | Key fi gures of the MLP share | ||||||
|---|---|---|---|---|---|---|---|
| -- | ------------- | -- | ------------------------------- | -- | -- | -- | -- |
| 24 Table 09 | Income statement for the period from | |
|---|---|---|
| January 1 to June 30, 2011 | ||
| 25 Table 10 | Statement of comprehensive income | |
| for the period from January 1 to June 30, 2011 | ||
| 25 Table 11 | Assets as at June 30, 2011 | |
| 25 Table 12 | Liabilities and shareholders' equity as at | |
| June 30, 2011 | ||
| 26 Table 13 | Consolidated statement of cash fl ows for the period | |
| from January 1 to June 30, 2011 | ||
| 26 Table 14 | Consolidated statement of cash fl ows for the period | |
| from April 1 to June 30, 2011 | ||
| 27 Table 15 | Statement of changes in equity | |
| 28 Table 16 | Segment reporting (quarterly comparison) | |
|---|---|---|
| 30 Table 17 | Segment reporting (half-year comparison) | |
| 33 Table 18 | Revenue | |
| 33 Table 19 | Personnel expenses/Number of employees | |
| 34 Table 20 | Other operating expenses | |
| 35 Table 21 | Finance cost | |
| 35 Table 22 | Financial assets | |
| 37 Table 23 | Notes on the consolidated statement of cash fl ows | |
| 37 Table 24 | Income statement of discontinued operations |
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, 2o11)
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 [email protected]
Telephone +49 (o) 6222 • 3o8 • 831o Fax +49 (o) 6222 • 3o8 • 1131 [email protected]
November 1o, 2o11 MLP publishes the Interim Report for the fi rst nine months and the third quarter.
November 23-24, 2o11 Roadshow in London amongst others. MLP presents its business activities, strategy and the long-term outlook for the company to investors.
September 28, 2o11 UniCredit German Conference in Munich. At this capital market conference, MLP presents its business activities, strategy and the long-term outlook for the company to investors.
All updated Investor Relations dates 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 other 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 prognosis 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 • 9000 www.mlp-ag.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.