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MLP SE

Quarterly Report Nov 12, 2010

289_10-q_2010-11-12_f005a149-6b4f-4f21-94bb-b4bc6b2811e3.pdf

Quarterly Report

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Interim Group Report for the fi rst nine months and for the third quarter 2010

MLP Group

[Table 01] MLP key fi gures

All fi gures in € million 3rd quarter 2010 3rd quarter 2009 9 months 2010 9 months 2009 Change Continuing operations Total revenue 116.0 113.9 348.8 345.3 1.0 % Revenue 111.0 109.4 332.3 330.2 0.6 % Other revenue 5.0 4.5 16.6 15.1 9.9 % Earnings before interest and tax (EBIT) 8.7 6.3 17.0 11.7 45.3 % EBIT margin (%) 7.5 % 5.5 % 4.9 % 3.4 % – Earnings from continuing operations 6.8 4.6 11.9 4.1 >100.0 % Earnings per share (diluted) in € 0.06 0.04 0.11 0.04 >100.0 % MLP Group Net profi t (total) 7.2 4.2 12.5 – 2.3 >100.0 % Earnings per share (diluted) in € 0.07 0.04 0.12 – 0.02 >100.0 % Cash fl ow from operating activities 15.0 13.7 93.0 79.6 16.8 % Capital expenditure 0.9 0.7 3.2 3.6 – 11.1 % Shareholders' equity – – 406.5 418.51 – 2.9 % Equity ratio – – 28.3 % 28.4 %1 – Balance sheet total – – 1,436.9 1,475.51 – 2.6 % Clients2 – – 771,000 785,5001 – 1.8 % Consultants2 – – 2,317 2,3831 – 2.8 % Branch offi ces2 – – 200 2381 – 16.0 % Employees – – 1,660 1,789 – 7.2 % Arranged new business2 Old-age provisions (premium sum in € billion) 1.0 1.1 3.0 3.0 – Health insurance (annual premium) 14.9 10.7 38.2 31.3 22.0 % Loans and mortgages 324 360 902 931 – 3.1 % Assets under Management (in € billion) – – 19.3 17.0 1 13.5 %

As at December 31, 2009

2 Continuing operations

Interim Group Report for the fi rst nine months and the third quarter 2010

the first nine months and the third quarter 2010 at a glance

  • Q3: Total revenue increase to € 116.0 million, EBIT rises to € 8.7 million
  • 9M: Signifi cant jump in earnings EBIT climbs to € 17.0 million (45 % increase), net profi t almost triples
  • Assets under Management continue to grow, with € 19.3 billion again reaching a record high
  • Outlook: Further pick-up in business anticipated for the year-end

Table of contents

5 Interim Management Report for the fi rst nine months and the third quarter 2010
5 Macroeconomic environment
6 Situation within the industry and the competitive environment
9 Company situation
9 Results of operations
12 Net assets
14 Financial position
15 Personnel
16 Communication and marketing activities
16 Legal corporate structure and executive bodies
17 Segment report
19 Risk report
19 Related party disclosures
19 Outlook for the current fi nancial year/forecast
22 Events subsequent to the reporting date
23 Investor Relations
26 Income statement and statement of comprehensive income
27 Consolidated statement of fi nancial position
28 Condensed statement of cash fl ows
29 Statement of changes in equity
30 Notes to the consolidated fi nancial statements
43 List of fi gures and tables
44 Executive bodies at MLP AG
45 Financial calendar

Profi le

mlp – the leading independent consulting company

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 of insurance companies, banks and investment fi rms. The MLP Group manages total assets of more than € 19.3 billion and supports more than 771,ooo private and 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 oldage provision, wealth management, health insurance, non-life insurance, loans and mortgages and banking. Those with assets above € 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 asset and risk management.

Interim Management Report for the fi rst nine months and the third quarter 2010

[Figure 01] German Gross Domestic Product, change in % compared to the previous quarter

Source: Federal Ministry of Finance

macroeconomic environment

The macroeconomic environment in Germany after the conclusion of the third quarter remains favourable. Following the rapid rise in economic output in the second quarter, which increased by 2.2 % compared to the fi rst quarter, economic experts had anticipated that the development in the third quarter would ease – but at o.6 % it still showed strong growth. MLP's business development is heavily infl uenced by the macroeconomic situation in Germany as the company generates almost all its revenue in this market.

Whereas the strong rise in economic output in the fi rst half of the year was predominantly supported by exports and investments, in the third quarter private consumption became an additional important pillar of this growth. One of the decisive factors behind this situation is surely the very positive development in the labour market. At the end of September 2o1o the unemployment rate had fallen to 7.2 %, representing a decrease of o.8 percentage points compared to the previous year. The associated job and income security led to an improvement in consumer spending. The consumer climate barometer of the market research company GfK reached a value of 4.1 in September, compared to 4.o in August.

The favourable economic situation during the period under review had only a partially positive infl uence on the business development of MLP. Although we were able to achieve, in some cases, double-digit growth rates in the areas of health insurance, wealth management and nonlife insurance, revenue in the old-age provision sector fell by 2.8 %. Here, the eff ects of the fi nancial crisis continued to prevail – in the fi rst nine months of the current fi nancial year our clients remained hesitant with respect to the conclusion of long-term old-age provision contracts (see also section on "Old-age provision", page 6).

Reduction in old-age provision in Germany

[Figure 02]

Due to the fi nancial and economic crisis, a portion of the surveyed working population cancelled or reduced their old-age provision contracts:

Source: Allensbach Institute for Public Opinion Research/Postbank

Base: Working people in Germany aged 16 and above

situation within the industry and the competitive environment

Old-age provision

The fi nancial crisis heavily impacted old-age provision in Germany. A survey commissioned by Postbank and conducted by the Allensbach Insitute for Public Opinion Research, revealed that around 2o % of respondents reduced or even cancelled their old-age provision arrangements during 2o1o. Overall, those under 5o years of age allocated 12 % less to their old-age provision – despite full awareness of the fact that their contributions would not be suffi cient to maintain their living standards in old-age. This discrepancy clearly shows the uncertainty on the part of investors in the aftermath of the fi nancial crisis with respect to long-term saving for the purpose of old-age provision.

This negative trend is also confi rmed in fi gures released by the Gesamtverband der Deutschen Versicherungswirtschaft e.V. (German Insurance Association) for the life insurance industry. In the fi rst nine months of the year, new business for life insurance with recurrent premiums fell by 2.3 %.

The hesitancy on the part of clients with respect to the conclusion of old-age provision contracts was also evident in the business development of MLP. In the fi rst nine months of the current fi nancial year, revenue in this area fell by 2.8 % to € 182.7 million.

[Figure 03]

Citizens anticipate further limitations and increasing charges in the German statutory healthcare system

Expectations for the next 10 years –

Base: Federal Republic of Germany, population 16 years and above Source: MLP Health Report 2009

Health provision

The development in the health insurance market during the period under review was very heavily infl uenced by the debate surrounding the latest healthcare reform. As the pay-as-you-go state healthcare system had once again reached the limits of its fi nanceability due to the demographic development in Germany and medical-technical advancements, a further reform became unavoidable. The reform, which comes into eff ect on January 1, 2o11, includes the following key components:

  • The standard premium for statutory health insurance funds rises from 14.9 % to 15.5 %.
  • Future cost increases must be borne entirely by the insurees. In this respect, a non income related premium is to be introduced, the level of which can be set by each individual statutory health insurance fund.
  • If the additional premium set by the statutory healthcare fund exceeds 2 % of the income of an insuree, the diff erence is to be fi nanced from tax revenue.

The controversial and public discussion about the reform was benefi cial to the business development of MLP. The adopted amendments strengthen clients' conviction that, in future, the fi nanceability of the state health insurance system can only be secured through further rises in premiums and further reductions in the catalogue of treatments and services provided. This led to greater willingness to cover health risks in the form of full private health insurance or through supplementary health insurance policies. During the period under review our revenue in this area rose by 19.o % to € 39.4 million.

[Figure 04] Infl ows and outfl ows in various types of mutual investment funds in Germany in 9M 2010 (in € billion)

Source: German Federal Association of Investment and Asset Management (BVI)

Wealth management

After the end of the third quarter 2o1o, the German investment fund industry appears to have fi nally shrugged off the fi nancial and economic crisis. From January to September 2o1o, both private as well as institutional investors started to return to investment funds. During this period private investors placed around € 18.9 billion into mutual funds, whereas institutional investors entrusted some € 42.4 billion of new monies to funds. In this respect, private investors showed a clear preference for mixed and fi xed-income funds. Due to the low interest rates, money market funds registered signifi cant outfl ows amounting to € 1o.5 billion.

In total, registered investment funds in Germany managed € 1,8o8.5 billion at September 3o, 2o1o, corresponding to an increase of 8.7 % compared to the previous year. The volume of assets now once again signifi cantly exceeds the level attained before the outbreak of the fi nancial crisis during the middle of 2oo8 (€ 1,65o.1 billion at the reference date on June 3o, 2oo8).

The positive development was even more apparent at MLP. We too succeeded in generating signifi cant infl ows of funds from private and institutional investors. At the end of the third quarter, managed client monies (Assets under Management) reached a new record high of € 19.3 billion, representing an increase of 13.5 % compared to the end of 2oo9.

Competition

In the third quarter of 2o1o, the federal government initiated further regulatory steps concerning the German fi nancial services market. The government approved legislation concerning the strengthening of investor protection and the improvement of the functionality of the capital markets. Through this legislation, the government seeks to further improve investor protection in the aftermath of the fi nancial crisis and thereby re-establish the confi dence and trust of market participants in functional capital markets and in a fair, customer-oriented range of fi nancial services off erings. The planned changes include measures to prescribe proof of expertise for investment consulting, introduce a register for investment consultants and sanction possibilities for misguided advice as well as establishing the requirement for a so-called product information sheet for investment products.

The competitive situation within the market has not fundamentally changed in the fi rst nine months of 2o1o. Some of the smaller market participants in particular continue to struggle with the eff ects of the more stringent legal framework conditions that were introduced in recent years (EU-brokerage guideline, Markets in Financial Instruments Directive (MiFID), changes to the Insurance Contract Law). The market is therefore in a consolidation phase.

Company situation

[Figure 05]

Total revenue from continuing operations (in € million)

results of operations

Rising total revenue

In the fi rst nine months of the current fi nancial year MLP generated total revenue amounting to € 348.8 million, corresponding to a slight increase of 1 %. Revenue from commissions and fees across all the consulting areas totalled € 313.4 million, rising by 2.6 % compared to the same period in the previous year (€ 3o5.5 million). The highest growth rate was achieved in health insurance where revenue increased by 19.o % from € 33.1 million to € 39.4 million. In wealth management there is evidence of returning confi dence and trust on the part of investors with respect to capital market-related products, which, in turn, led to a rise in revenue by 1o.2 % to € 57.1 million (€ 51.8 million). Demand for greater risk protection remained high, resulting in a 7.7 % increase in non-life insurance revenue to € 23.9 million (€ 22.2 million). Revenue from old-age provision products fell slightly and amounted to € 182.7 million (€ 188.o million). Interest income also decreased due to the prevailing low interest rates, falling to € 18.8 million (€ 24.8 million).

Revenue development in the third quarter was similar to the overall period under review. Total revenue in the period from July to September 2o1o amounted to € 116.o million (€ 113.9 million). This also equates to an increase of 3.9 % compared to the second quarter. Revenue from commissions and fees rose by 2.5 % to € 1o4.6 million. Similarly to the nine-month period, this was mainly attributable to the areas of wealth management and health insurance.

Reduction of fi xed costs as planned

In the fi rst nine months of the current fi nancial year the mainly variable commission expenses increased by 7.7 % from € 1o9.9 million to € 118.4 million, and therefore rose over-proportionally compared to the revenue from commissions and fees. On the other hand, interest expenses decreased, falling from € 9.9 million to € 7.1 million. Here the eff ects of the generally lower interest rates compared to the previous year were very evident. Overall, we thus achieved an interest result amounting to € 11.7 million (€ 14.9 million).

In the period under review our fi xed costs (personnel expenses, depreciation, amortisation and impairment and other operating expenses) decreased, as planned, by 3.3 % to € 2o7.1 million. Our goal for the full year remains to reduce the fi xed costs by around € 1o million. During the fi rst nine months of the year we have already achieved € 7.o million of this target. In particular this was largely attributable to a reduction in personnel expenses by € 5.4 million and in amortisation, depreciation and impairment by € 1.6 million.

Profi t situation signifi cantly improved

The modest pick-up in revenue and the achieved cost savings enabled us to signifi cantly improve the profi t situation of the company. Earnings before interest and tax (EBIT) rose by 45.3 % to € 17.o million. Together with the likewise improved and balanced fi nancial result (previous year € –1.1 million ), pre-tax profi t (earnings before tax, EBT) rose to € 17.o million. Compared to the previous year, this corresponds to an increase of 58.9 %.

Income tax expenses in the period under review amounted to € 5.1 million which resulted in a tax rate of 3o %. In the previous year, income tax expenses were signifi cantly higher at € 6.5 million and included, among other items, a one-off liability for tax arrears amounting to € 1.4 million. Overall, we were able to almost triple post-tax earnings from continuing operations from € 4.1 million to € 11.9 million. Earnings from the discontinued operations after tax (further details are contained in the "Notes", page 4o) amounted to € o.5 million (€ –6.4 million). This led to an improved Group result, which rose from € –2.3 million to € 12.5 million and, in turn, led to a correspondingly positive improvement in the earnings per share (diluted and basic) which increased from € –o.o2 to € o.12.

The development of expenses in the third quarter progressed similarly to the overall period under review. Due to the slight increase in revenue and the achieved cost reductions, the profi t situation also signifi cantly improved in the third quarter. We achieved earnings before interest and tax (EBIT) of € 8.7 million, corresponding to an increase of 38.1 %. Together with the slightly regressive fi nancial result of € o.7 million (€ 1.o million), MLP achieved earnings before tax (EBT) of € 9.4 million (€ 7.3 million). Taking into account the almost unchanged income tax expenses amounting to € 2.5 million (€ 2.8 million), post-tax earnings from continuing operations totalled € 6.8 million (€ 4.6 million). In the discontinued operations, the result also improved, rising from € –o.4 million to € o.3 million. The Group result in the third quarter thus amounted to € 7.2 million (€ 4.2 million) and earnings per share (diluted and basic) rose from € o.o4 to € o.o7.

[Table 02] Earnings development of continuing operations

All fi gures in € million 9 months 2010 9 months 2009 Change
Total revenue 348.8 345.3 1.0 %
EBIT 17.0 11.7 45.3 %
EBIT margin 5.1 % 3.5%
Finance costs – 0.04 – 1.1 96.4 %
EBT 17.0 10.7 58.9 %
EBT margin 5.1 % 3.2 %
Income tax – 5.1 – 6.5 – 21.5 %
Net profi t (continuing operations) 11.9 4.1 > 100.0 %
Net margin 3.6 % 1.2 %

Comparison between the actual and the forecast business development

At the beginning of the fi nancial year 2o1o we provided not only a quantitative forecast for the targeted EBIT margin in 2o12 (15 %) but also a qualitative forecast for revenue development in our core areas of old-age provision, health insurance as well as wealth management for the current fi nancial year (see page 9o of the Annual Report 2oo9). In the areas of old-age provision and health insurance we expected to achieve stable revenue development during the current fi nancial year. This forecast was confi rmed in the fi rst nine months of the fi nancial year for the old-age provision area with only a slight fall of 2.8 %. In the health insurance area, business development was signifi cantly better than anticipated, rising by 19.o % (see also section "Rising total revenue", page 9). However, in wealth management we expected to achieve a moderate revenue increase in the fi nancial year 2o1o. This development was already evident during the period under review. Revenue in wealth management rose by 1o.2 %.

The development of expenses in the fi rst nine months also conformed to our expectations. Our target for the full year is to reduce fi xed costs (personnel expenses, depreciation, amortisation and impairment and other operating expenses) by € 1o million. In the period under review these expenses were already reduced by a total of € 7.o million (see section on "Reduction of fi xed costs as planned", page 9).

Further rise in Assets under Management

Thanks to the positive development in new business with private clients and institutional investors as well as to the current up-trend in the capital markets, Assets under Management continued to grow, reaching a new record high of € 19.3 billion (June 3o, 2o1o: € 18.7 billion). In old-age provision, the premium sum remained stable in the fi rst nine months, amounting to € 3.o billion (€ 3.o billion). Occupational pension business accounted for around 11 % of this fi gure (full year 2oo9: 1o %). In private health insurance, annual premiums rose to € 38.2 million (€ 31.3 million).

MLP gains 24,500 new clients in the fi rst nine months

In the fi rst three quarters of the year MLP welcomed a total of 24,5oo new private clients (24,5oo). In this respect, the third quarter proved to be the strongest quarter of the year so far – resulting in 8,5oo new clients. The total number of clients thus stands at 771,ooo (June 3o, 2o1o: 767,ooo). At September 3o, 2o1o, the number of consultants amounted to 2,317 (June 3o, 2o1o: 2,359).

[Table 03] Assets as at September 30, 2010

All fi gures in € million Sept 30, 2010 Dec 31, 2009 Change
Intangible assets 150.5 156.1 – 3.6 %
Property, plant and equipment 75.7 78.8 – 3.9 %
Investment property 11.2 11.4 – 1.8 %
Shares accounted for using the equity method 2.4 2.0 20.0 %
Deferred tax assets 2.5 3.0 – 16.7 %
Receivables from clients in the banking business 338.8 313.5 8.1 %
Receivables from banks in the banking business 437.8 498.2 – 12.1 %
Financial investments 256.4 192.4 33.3 %
Tax refund claims 18.0 33.1 – 45.6 %
Other accounts receivable and other assets 94.9 132.1 – 28.2 %
Cash and cash equivalents 48.8 55.0 – 11.3 %
Total 1,436.9 1,475.5 – 2.6%

net assets

Total assets fall by 2.6 %

Compared to December 31, 2oo9, the total assets of the MLP Group decreased by 2.6 % from € 1,475.5 million to € 1,436.9 million. The main changes on the asset side of the balance sheet relate to fi ve items. Our loans to clients (receivables from clients in the banking business) rose by 8.1 % to € 338.8 million. However, receivables from fi nancial institutions in the banking business reduced by 12.1 % to € 437.8 million. This is primarily attributable to the profi t transfer from our subsidiary MLP Finanzdienstleistungen AG to MLP AG for the fi nancial year 2oo9 amounting to € 41.8 million and to the redeployment of liquid funds into longer-term investments.

Financial investments and cash and cash equivalents grew, in total, by 23.4 % to € 3o5.2 million. The main changes arose due to the profi t transfer by our subsidiary MLP Finanzdienstleistungen AG, the dividend payment for the fi nancial year 2oo9 as well as due to the redeployment of liquid funds into longer term investments.

At the balance sheet reference date on September 3o, 2o1o, tax refund claims amounted to € 18.o million (€ 33.1 million).

Other accounts receivable and other assets fell from € 132.1 million to € 94.9 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.

[Table 04] Liabilities and shareholders' equity as at September 30, 2010

All fi gures in € million Sept 30, 2010 Dec 31, 2009 Change
Shareholders' equity 406.5 418.5 – 2.9 %
Provisions 46.2 52.4 – 11.8 %
Deferred tax liabilities 11.1 10.7 3.7 %
Liabilities due to clients in the banking business 811.5 750.3 8.2 %
Liabilities due to banks in the banking business 16.6 20.8 – 20.2 %
Tax liabilities 1.3 9.0 – 85.6 %
Other liabilities 143.7 211.8 – 32.2 %
Liabilities in connection with non-current assets held
for sale and disposal groups 2.0 – 100.0 %
Total 1,436.9 1,475.5 –2.6%

Equity capital position remains very good

After the fi rst nine months of the current fi nancial year our equity ratio was almost unchanged at 28.3 % (28.4 %) and the equity capital position of the Group therefore remains very good. The equity capital decreased slightly by 2.9 % to € 4o6.5 million. The main changes resulted from the payment of the dividend for the fi nancial year 2oo9 amounting to € 27.o million, the profi t from the period under review and a change in retained earnings due to the marked- to- market valuation of securities.

We were able to reduce the provisions from € 52.4 million to € 46.2 million. The decrease was mainly attributable to the payment of client servicing commissions to our consultants.

The development of our deposit business is shown in the liabilities due to clients and fi nancial institutions in the banking business. In the period under review client deposits rose by 8.2 % to € 811.5 million. These mainly consist of deposits in the areas of open and instant access accounts as well as deposits in connection with our credit card business.

We reduced our tax liabilities from € 9.o million to € 1.3 million. Other liabilities fell from € 211.8 million to € 143.7 million in accordance with usual seasonal fl uctuations. These mainly contain commission claims by our consultants which usually rise sharply at the reference date on December 31 due to our strong year-end business, but which then fall again in the following quarters.

All fi gures in € million 3rd quarter 2010 3rd quarter 2009 9 months 2010 9 months 2009
Cash and cash equivalents at the beginning of period 96.6 134.0 123.6 38.0
Cash fl ows from operating activities 15.1 13.9 96.2 79.4
Cash fl ows from investing activities 22.2 – 26.4 – 53.2 34.3
Cash fl ows from fi nancing activities – 0.5 – 0.8 – 29.6 – 31.0
Changes in cash and cash equivalents 37.3 –13.3 13.3 82.7
Infl ows/outfl ows due to divestments – 0.1 0.0 – 3.1 – 0.1
Cash and cash equivalents at the end of period 133.8 120.7 133.8 120.7

[Table 05] Condensed statement of cash fl ows in continuing operations

financial position

Cash fl ow from operating activities in continuing operations amounted after the fi rst three quarters of 2o1o to € 96.2 million (€ 79.4 million). Signifi cant cash fl ows in this respect result from our deposit business with our clients and from the investment of these funds. The changes in the receivables from and liabilities due to clients in the banking business result in a positive change of € 1o4.6 million which is primarily due to an increase in deposit business with our clients by € 61.2 million. In the comparative period of the previous year our deposit business with our clients declined. Other signifi cant cash fl ows arise from the negative change in the receivables from and the liabilities due to banks in the banking business amounting to € 92.9 million, which are primarily infl uenced by the fall in receivables from banks of € 6o.4 million (comparative period of the previous year € –151.5 million).

Cash fl ow from investing activities in the continuing operations changed from € 34.3 million to € –53.2 million. Here, cash was invested in securities during the period under review. In the comparative period of the previous year, matured term deposits were not reinvested.

Our cash fl ow from fi nancing activities in the continuing operations contains the dividend payment as well as outfl ows from the repayments of loans.

After the fi rst nine months the Group's total liquid funds stood at € 197 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.

Capital measures

No capital measures were undertaken during the period under review.

[Table 06] Number of employees

Sept 30, 2010 Sept 30, 2009
Financial services 1,398 1,513
Feri 249 265
Holding 13 11
Total 1,660 1,789

Investments

During the period under review we invested a total of € 3.2 million, corresponding to a decrease of 11.1 % compared to the previous year. Around 81.o % of this fi gure was allocated to the fi nancial services sector – mainly for software as well as 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 activities. All investments were fi nanced from current cash fl ows.

general statement on the business development

In the third quarter MLP further expanded its growth in earnings and again generated growth in revenue. In this respect, revenue rose across almost all the consulting areas, whilst earnings continued to benefi t from the on-going and successful cost management programme. MLP also achieved further growth in Assets under Management - which climbed to a new record high - as well as generating growing momentum in new client acquisition.

personnel

The number of employees reduced further during the period under review. At September 3o, 2o1o the MLP Group had a total of 1,66o employees, corresponding to a reduction of 129 people compared to September 3o, 2oo9. Without taking the number of marginal part-time employees into account, the fi gure decreased by 75 to 1,459. This reduction includes 55 employees who, due to the outsourcing of our IT area in the second half of 2oo9, were off ered the opportunity to become employees of our IT partner Hewlett-Packard (HP). In the third quarter the number of employees fell by 22. The development of personnel expenses is shown in the section "Results of operation", page 9.

In March of the current fi nancial year MLP received the "TOP employer" award for the fourth consecutive time. Through this award, the Corporate Research Foundation Institute (CRF), one of the leading research companies in the area of employer certifi cation and employer branding, confi rmed our outstanding corporate and employee culture with an excellent score for image, work-life balance and employee remuneration.

communication and marketing activities

Since July of this year MLP has been presenting its partner and product selection process on its internet site at www.mlp-beratungsqualitaet.de (German only). Visitors can view a short fi lm which shows how MLP regularly identifi es the highest quality products and partner organisations from the broad range of market off erings – which MLP consultants can access and utilise during their individual consultation meetings with their clients. As an independent fi nancial services and wealth management consulting company, MLP is not tied to specifi c product partners and is able to make its selections based entirely on qualitative criteria.

In August MLP presented its new Internet website. Through the newly designed pages we off er numerous multimedia applications and an extended range of services for clients, journalists and investors. In addition to gaining access to complex fi nancial topics that are explained in a clear and easy-to-understand way at www.mlp.com, users can also quickly fi nd their way to view other relevant topics thanks to the clear page structure and layout and the intuitive navigation. The likewise newly designed corporate website www.mlp-ag.com refl ects the Group structure that has been further developed in recent years and which positions MLP as a broadbased consulting house for private and corporate clients.

legal corporate structure and executive bodies

During the period under review there was a change in the composition of the Executive Board. Mr. Gerhard Frieg, responsible for product management and purchasing, resigned from the Executive Board at his own request on March 31, 2o1o in order to pursue new professional challenges elsewhere. The Supervisory Board appointed Mr. Manfred Bauer as his successor. He joined the Executive Board on May 1, 2o1o and carries responsibility for product management and purchasing.

Within the framework of our focus on growth markets we are concentrating our private client business at our subsidiary MLP Finanzdienstleistungen AG on our core market Germany. For this reason we reached agreement with NBG B. V., Valkenswaard, Netherlands, in January 2o1o concerning the sale of our branch in the Netherlands. This market accounted for less than 1 % of our total revenue.

[Figure 07]

Total revenue and EBIT for the fi nancial services segment (in € million)

segment report

The MLP Group structures its business into the following operating segments:

  • Financial services
  • Feri
  • Holding

A detailed description of the individual segments is contained on pages 193 et seq. of the Annual Report 2oo9.

Financial services segment

Total revenue in the fi nancial services segment in the fi rst nine months of 2o1o amounted to € 319.9 million, corresponding to an increase of o.2 %. Earnings before interest and tax (EBIT) totalled € 19.5 million and was thus 7.1 % lower than in the comparative period of the previous year. The fi xed costs (personnel expenses, depreciation, amortisation and impairment and other operating expenses) decreased by € 3.o million to € 176.7 million. Commission expenses rose by 7.5 % to € 117.3 million. The fi nancial result improved from € –1.7 million to € –o.6 million, but was not enough to fully compensate for the increase in total expenses. This led to earnings before tax (EBT) of € 19.o, which was also below the previous year (€ 19.3 million).

The development of total revenue in the third quarter did not signifi cantly diff er from the development in the nine-month period. Here too, we recorded a marginal increase of o.2 % to € 1o5.6 million. However, as in the second quarter, we were able to halt the negative earnings development from the fi rst quarter. Although the commission expenses in the third quarter rose by 9.7 % similarly to the overall period under review, MLP did manage to reduce the fi xed costs by 6.8 % to € 55.1 million thanks to its on-going cost reduction programme. This led to earnings before interest and tax (EBIT) of € 8.3 million (€ 7.1 million). Due to slightly improved fi nance costs, earnings before tax (EBT) thus rose by 18.8 % to € 8.2 million.

[Figure 08] Total revenue and EBIT for the Feri segment (in € million)

Feri segment

Very pleasing business development was achieved in the Feri segment during the fi rst nine months of the current fi nancial year. Total revenue increased by 8.3 % to € 28.8 million. Earnings before interest and tax (EBIT) improved signifi cantly by € 3.7 million from € –2.2 million to € 1.5 million – a fi gure that was partly attributable to the increase in total revenue as well as, in particular, to the reduction in personnel expenses from € 19.1 million to € 17.5 million. After consideration of an unchanged fi nancial result of € –o.1 million, earnings before tax (EBT) amounted to € 1.4 million (€ –2.3 million).

The trend from the previous quarters also continued in the third quarter. Due to rising total revenue and slightly reduced costs we were able to signifi cantly improve the balanced earnings before interest and tax (EBIT) from the previous year to € 1.5 million. The fi nancial result remained almost unchanged, thus leading to an improvement in earnings before tax (EBT) from € –o.1 million to € 1.4 million.

Holding segment

The earnings situation in the Holding segment improved signifi cantly during the period under review. Although total revenue fell from € 1o.o million to € 9.2 million, total expenses decreased by € 3.9 million to € 13.2 million. This was mainly attributable to the reduction in other operating expenses by € 4.5 million. In the previous year this item contained expenses for one-off consulting costs of € 2.9 million concerning the holding in MLP acquired by Swiss Life in 2oo8. Earnings before interest and tax (EBIT) thus amounted to € –4.1 million (€ –7.1 million). The fi nancial result in the segment was € 1.5 million (€ 3.8 million). The decrease was primarily due to the lower than the previous year dividend payment by our subsidiary Feri Finance AG amounting to € o.9 million (€ 3.1 million) in the fi rst quarter of 2o1o. Despite this, earnings before tax (EBT) improved from € –3.3 million to € –2.6 million.

The third quarter was unable to contribute to the overall positive development during the nine months of the period under review. Total revenue fell (–9.4 %) and total expenses remained unchanged. This led to a fall in earnings before interest and tax (EBIT) of € o.3 million. As the fi nancial result also fell by € o.3 million, earnings before tax (EBT) amounted to € –o.3 million (€ o.4 million ).

[Figure 09] Expected economic growth in Germany (in %)

Source: German Federal Bank, OECD, German Federal Government

risk report

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, operational or other risks. The MLP Group has adequate liquid funds. At the reporting date on September 3o, 2o1o our core capital ratio amounted to 21.7 % 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 67 to 83 of the Annual Report 2oo9.

related party disclosures

Related party disclosures are contained in the notes of the Annual Report 2oo9, page 21o et seq.

outlook for the current financial year/forecast

Future macroeconomic situation

In the current fi nancial year, the German economy – in which MLP generates almost 1oo % of its revenue – has recovered surprisingly rapidly from the sharp economic decline of the previous year. Particularly the strong growth in the second quarter of 2o1o has led to signifi cant upward revisions of growth expectations. Whereas at the end of the second quarter, the German government was still forecasting economic growth of 2 % for 2o1o, this fi gure has now been upgraded to 3.4 %. For 2o11 the federal government has also raised its forecast from 1.6 % to 1.8 %. In view of these optimistic future expectations, the still existent risks for the macroeconomic development have been pushed into the background. The fi nancing problems of some of the EU states, the imbalances in global trade and possible currency disputes could dampen the dynamic development in Germany.

The favourable economic development will continue to positively infl uence the labour market and the development of salary and wages in Germany. The unemployment fi gure is likely to fall below the 3-million level during the course of the fourth quarter and is expected to average just over 2.8 million during 2o11. Furthermore, the demands for signifi cant wage and salary increases currently being voiced by the trade unions point towards rising disposables incomes.

This favourable macroeconomic scenario should have a fundamentally positive eff ect on the business development of MLP. Job security and the prospect of rising income provide positive stimulus for our private client business. However, it remains to be seen whether this applies to the observed continuing hesitancy on the part of investors with respect to long-term savings processes in the area of old-age provision (see also section on "Old-age provision", page 6).

Future situation within the industry and competition

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 2oo9 on pages 84 et seq. During the fi rst nine months of 2oo9 there were no signifi cant changes to the overall situation.

From a medium to long-term perspective, we continue to expect rising demand for old-age provision products - a view which is primarily based on the demographic development in Germany. Rising life expectancy and the increasing number of people in the age group over 65 are leading to a reduction of benefi ts from the state pension scheme. This pension gap should be bridged through increased occupational and private old-age provision.

We also see growth potential in the health insurance area. The announced reform of the healthcare system due to come into eff ect on January 1, 2o11 has heightened public awareness of the fact that the system can, in future, only remain fi nanceable through further premium increases together with further reductions in the treatments and services off ered. This makes a transfer to private healthcare insurance or supplementary healthcare insurance more attractive. In addition, the government has decided to abolish the three-year waiting period for transfer from a state-run healthcare insurance fund to a private healthcare insurer from January 1, 2o11 – a step that increases the potential for new clients in the coming year.

Wealth management also represents a growth market. In the past 1o years, for example, the monetary assets of German citizens, even after taking the losses of the recent fi nancial crisis into account, have grown on average by 2.8 %. In addition to market growth our existing client base also off ers considerable potential. Here we aim to signifi cantly increase penetration rates with wealth management concepts for private clients developed by our subsidiary Feri Finance AG which we acquired in 2oo6. Furthermore the winning of new wealth management mandates in the institutional client business off ers further prospects for growth.

[Table 07] Anticipated development of revenue from 2010 – 2012

2010 2011 / 2012
Revenue old-age provision
Revenue wealth management
Revenue health provision

As already described in the section "Competition" (page 8) we expect to see the introduction of further regulatory changes concerning the sale of fi nancial services. Following the adoption by the government of the draft legislation pertaining to investor protection in September, the further regulation of the industry is taking shape. Whereas institutes with a banking licence such as MLP - are subject to supervision by the Federal Financial Supervisory Authority (BaFin), it is planned that brokers of closed-end funds will, in future, be supervised by the trade licensing offi ces. That would be a disservice to investor protection, as the trade licensing offi ces adopt a signifi cant laxer approach to monitoring and supervision as well as having fewer possibilities for applying sanctions. According to announcements, the initiation of further new regulatory measures can be expected during the coming months. Many market participants will fi nd it diffi cult to keep pace with the stricter requirements. Furthermore we anticipate that competition will further intensify with respect to securing the services of qualifi ed fi nancial consultants.

Anticipated business development

Traditionally, the fourth quarter, particularly the last few weeks of the year, has a signifi cant infl uence on the full-year performance of MLP. Despite the positive development in the past few quarters and the favourable economic environment, the German private client market as well as the corporate client business remains challenging. However, the business in October further improved compared to the third quarter, and we expect to see a further pick-up during the coming weeks.

At the start of the year, and due to the diffi cult market environment, we only issued a qualitative forecast for our revenue development up to 2o12. In our core areas of old-age provision and health insurance we expected stable revenue development in the current fi nancial year despite the persistence of diffi cult framework conditions. In 2o11 and 2o12 – in an improving macroeconomic environment – we intended to return to a growth path in those areas. In wealth management however, we already expected to achieve moderate revenue growth in the current fi nancial year which was expected to continue during the following two years.

In view of the better than expected business development in health insurance during the fi rst nine months, we are slightly modifying our estimates after the end of the third quarter. In our health insurance business we now anticipate that we can achieve higher revenue in this year. For the other two areas of old-age provision and wealth management the original forecast of stagnating or slightly rising revenue remains unchanged. Our estimates for 2o11 and 2o12 also remain unchanged – here we continue to expect moderate revenue increases in each of the three areas.

[Figure 10] Development of the EBIT margin from 2005 – 2012 (all fi gures in %)

In addition to ensuring full exploitation of revenue potential, MLP will continue to exercise strict cost discipline during the current fi nancial year. We are maintaining our cost reduction target for 2o1o and intend to lower the fi xed costs (personnel expenses, depreciation, amortisation and impairment and other operating expenses; without one-off eff ects and before acquisition-related cost increases) by € 1o million.

A further objective that MLP has set itself is to return to its accustomed strong level of profi tability and to almost double the EBIT margin to 15 % by the end of 2o12 (full year 2oo9: 7.9 %).

Opportunities

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 2oo9 on page 93 f.

events subsequent to the reporting date

There were no notable events after the balance sheet reference date that aff ected the MLP Group's net assets, fi nancial position or profi t situation.

Investor Relations

[Figure 11] MLP share, SDAX and DAXsector Financial Services in the fi rst nine months 2010

Source: Deutsche Börse

Development in the stock markets

The development in the stock markets during the period under review was mixed. Although large benchmark indices such as the American Dow Jones Industrial Average or the DAX rose by just 1.9 % and 3.o % respectively in the nine-month period, the SDAX smaller companies index climbed by 2o.6 %. Whereas the sluggish advancement of the Dow Jones was linked to the very slowly recovering US economy, the diff ering development of the DAX and SDAX can be explained by their respective index composition. Compared to the SDAX, the DAX has a signifi cantly higher weighting of fi nancial companies. However, the performance of these shares was considerably weaker than those of the industrial companies – an aspect which is clearly illustrated by the 5.5 % fall in the DAXsector Financial Services index. The SDAX performance is therefore a much more accurate refl ection of the very positive development of the German economy.

[Table 08] Key fi gures of the MLP share

9 months 2010 9 months 2009
Share price at the beginning of the quarter/year € 7.31 € 9.80
Share price high € 8.27 € 10.98
Share price low € 6.21 € 5.25
Share price at the end of the quarter/year € 7.47 € 8.06
Dividend for the previous year € 0.25 € 0.28
Market capitalisation (end of reporting period) € 806,925,480.24 € 869,494,568.28

The MLP share

During the period under review the MLP share was unable to escape the overall development of the industry index for fi nancial companies – the DAXsector Financial Services index – falling by 9.7 % by the end of the period. In the fi rst nine months of this year the MLP share price ranged between € 8.27 at the beginning of the year and a low of € 6.21 at the end of May. The closing price at the end of September 2o1o was € 7.47. Compared to the closing price of the halfyear the share showed a modest rise of 2.33 %.

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".

MLP share now listed on the SDAX

On June 21, 2o1o the MLP share moved from the MDAX to the SDAX, due primarily to the change in the shareholder structure since the second half-year of 2oo8 and to the associated reduction in the free fl oat (portion of freely tradable shares of the share capital). The change in the shareholder structure occurred as result of the securing of the Group's independence through important anchor shareholders.

[Figure 12] MLP shareholder structure

Award-winning MLP Annual Report 2009

For another consecutive year MLP achieved one of the top scores in the "The Best Annual Report" award issued by the publication "manager magazine". In the overall assessment MLP improved from 71.97 points in the previous year to 74.8o points (out of a possible 1oo) and achieved fi rst place in the fi nancial services industry. In the league of all companies in the MDAX – on which MLP was listed until June 2o1o – MLP achieved 4th position (previous year: 3rd). Each year, under the scientifi c leadership of Prof. Baetge, "manager magazine" analyses the annual reports of the major German stock market-listed companies and presents awards to those companies that report comprehensively and reliably to their investors.

New MLP website

MLP's newly designed Internet site was activated in August 2o1o and off ers clients, journalists and investors an extended range of services. The Investor Relations pages of the site provide visitors with information about the MLP Group as well as the MLP share. In addition, visitors can keep themselves up to date with new developments at MLP and within the industry via twitter (http://twitter.com/MLP_AG; German only).

The Investor Relations area can be accessed at: www.mlp-ag.com/investor-relations

Income statement and statement of comprehensive income

[Table 09]

Income statement for the period from January 1 to September 30, 2010

All fi gures in €'000 Notes 3rd quarter 2010 3rd quarter 20091 9 months 2010 9 months 20091
Revenue (5) 111,001 109,438 332,253 330,236
Other revenue 5,041 4,473 16,596 15,068
Total revenue 116,043 113,910 348,849 345,304
Commission expenses – 40,888 – 37,145 – 118,364 – 109,870
Interest expenses – 2,046 – 2,372 – 7,103 – 9,897
Personnel expenses (6) – 24,399 – 26,010 – 77,612 – 82,995
Depreciation and amortisation – 3,965 – 4,541 – 12,132 – 13,720
Other operating expenses (7) – 36,476 – 37,649 – 117,408 – 117,358
Earnings from shares accounted
for using the equity method 417 101 780 257
Earnings before interest and tax (EBIT) 8,686 6,296 17,009 11,722
Other interest and similar income 1,840 2,131 5,261 6,719
Other interest and similar expenses – 1,165 – 1,100 – 5,296 – 7,778
Finance cost (8) 675 1,031 – 35 – 1,059
Earnings before tax (EBT) 9,361 7,327 16,974 10,663
Income taxes – 2,515 – 2,758 – 5,059 – 6,535
Earnings from continuing operations after tax 6,846 4,569 11,915 4,127
Earnings from discontinued operations after tax 348 – 388 537 – 6,408
Net profi t 7,194 4,181 12,452 – 2,280
Of which attributable to
owners of the parent company 7,194 4,181 12,452 – 2,280
Earnings per share in €2
From continuing operations
basic 0.06 0.04 0.11 0.04
diluted3 0.06 0.04 0.11 0.04
From continuing and discontinued operations
basic 0.07 0.04 0.12 – 0.02
diluted3 0.07 0.04 0.12 – 0.02

Previous year's value adjusted. The adjustments are disclosed under note 3

Basis of calculation: Average number of shares at September 30, 2010: 107,877,738, potential shares (convertible debentures): 454,028

The ordinary shares resulting from the conversion of convertible debentures are treated as shares already issued

[Table 10] Statement of comprehensive income for the period from January 1 to September 30, 2010

All fi gures in €'000 3rd quarter 2010 3rd quarter 20091 9 months 2010 9 months 20091
Net profi t 7,194 4,181 12,452 – 2,280
Other comprehensive income
Securities marked to market 243 – 481 2,598 – 1,455
Tax expense –57 – 31 – 139 – 73
Other comprehensive income after tax 187 – 512 2,459 – 1,528
Total comprehensive income for the year 7,381 3,669 14,911 – 3,808
Total comprehensive income attributable to
owners of the parent company 7,381 3,669 14,911 – 3,808

Previous year's value adjusted. The adjustments are disclosed under note 3

Consolidated statement of fi nancial position

[Table 11]

Assets as at September 30, 2010

Notes
All fi gures in €'000
Sept 30, 2010 Dec 31, 2009
Intangible assets 150,466 156,138
Property, plant and equipment 75,655 78,781
Investment property 11,245 11,432
Shares accounted for using the equity method 2,424 2,013
Deferred tax assets 2,473 2,969
Receivables from clients in the banking business 338,810 313,494
Receivables from banks in the banking business
(9)
437,794 498,201
Financial investments
(10)
256,388 192,389
Tax refund claims 17,995 33,059
Other accounts receivable and other assets
(11)
94,881 132,088
Cash and cash equivalents 48,775 54,968
Total 1,436,906 1,475,532

[Table 12]

Liabilities and shareholders' equity as at September 30, 2010

Notes
All fi gures in €'000
Sept 30, 2010 Dec 31, 2009
Shareholders' equity
(12)
406,473 418,532
Provisions 46,199 52,383
Deferred tax liabilities 11,134 10,668
Liabilities due to clients in the banking business 811,457 750,282
Liabilities due to banks in the banking business 16,619 20,774
Tax liabilities 1,336 9,029
Other liabilities
(11)
143,688 211,816
Liabilities in connection with non-current assets held
for sale and disposal groups 2,049
Total 1,436,906 1,475,532

Condensed statement of cash fl ows

[Table 13]

Condensed statement of cash fl ows for the period from January 1 to September 30, 2010

All fi gures in €'000 9 months 2010 9 months 20091
Cash fl ow from operating activities 93,019 79,599
Cash fl ow from investing activities –53,224 34,242
Cash fl ow from fi nancing activities –29,645 –31,047
Change in cash and cash equivalents 10,150 82,794
Cash and cash equivalents at the end of the period 133,775 121,241

Thereof discontinued operations

All fi gures in €'000 9 months 2010 9 months 20091
Cash fl ow from operating activities –3,146 155
Cash fl ow from investing activities –50
Cash fl ow from fi nancing activities
Change in cash and cash equivalents – 3,146 105
Cash and cash equivalents at the end of the period 562

Previous year's value adjusted. The adjustments are disclosed under note 3

[Table 14]

Condensed statement of cash fl ows for the period from July 1 to September 30, 2010

All fi gures in €'000 3rd quarter 2010 3rd quarter 20091
Cash fl ow from operating activities 15,037 13,710
Cash fl ow from investing activities 22,647 –26,379
Cash fl ow from fi nancing activities –504 –819
Change in cash and cash equivalents 37,180 – 13,488
Cash and cash equivalents at the end of the period 133,775 121,241

Thereof discontinued operations

All fi gures in €'000 3rd quarter 2010 3rd quarter 20091
Cash fl ow from operating activities –85 –214
Cash fl ow from investing activities
Cash fl ow from fi nancing activities
Change in cash and cash equivalents – 85 – 214
Cash and cash equivalents at the end of the period 562

Previous year's value adjusted. The adjustments are disclosed under note 3

Statement of changes in equity

[Table 15]

equity attributable to mlp ag shareholders
All fi gures in €'000 Share
capital
Capital
reserves
Securities marked
to market
Other comprehen
sive income
Total
As at Jan 1, 2009 (as reported) 107,861 142,084 – 97 179,278 429,125
Retrospective adjustments1 – 3,197 – 3,197
As at Jan 1, 2009 (adjusted) 107,861 142,084 – 97 176,081 425,928
Dividend – 30,201 – 30,201
Exertion of conversion rights 17 100 117
Transactions with owners 17 100 – 30,201 – 30,084
Total comprehensive income – 1,528 – 2,280 – 3,808
As at Sept 30, 2009 107,878 142,184 – 1,625 143,599 392,036
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
Total comprehensive income 2,459 12,452 14,911
As at Sept 30, 2010 107,878 142,184 886 155,527 406,473

1 See note 3

Notes to the consolidated fi nancial statements

[Table 16]

Segment reporting (quarterly comparison)

financial services feri
All fi gures in €'000 3rd quarter 2010 3rd quarter 20091 3rd quarter 2010 3rd quarter 2009
Revenue 102,400 101,691 8,716 7,778
of which total inter-segment revenue 70 32 45
Other revenue 3,204 3,699 1,785 1,086
of which total inter-segment revenue 441 636
Total revenue 105,604 105,390 10,501 8,864
Commission expenses – 40,579 – 36,970 – 354 –134
Interest expenses – 2,046 – 2,372
Personnel expenses – 17,501 – 19,101 – 5,799 – 6,017
Depreciation/amortisation and impairment – 2,646 – 3,120 – 562 – 608
Other operating expenses – 34,952 –36,864 – 2,287 – 2,138
Earnings from shares accounted for using the equity method 417 101
Segment earnings before interest and tax (EBIT) 8,296 7,065 1,499 – 33
Other interest and similar income 74 97
Other interest and similar expenses – 173 –243 – 78 – 19
Finance cost – 99 – 146 – 78 – 19
Earnings before tax (EBT) 8,197 6,919 1,421 – 52
Income taxes
Earnings from continuing operations after tax
Earnings from discontinued operations after tax 348 – 1,151
Net profi t

1 Previous year's value adjusted. The adjustments are disclosed under note 3

holding consolidation/other total
3rd quarter 2010 3rd quarter 2009 3rd quarter 2010 3rd quarter 20091 3rd quarter 2010 3rd quarter 20091
–115 – 32 111,001 109,438
–115 – 32 0 0
2,937 3,169 – 2,884 – 3,481 5,041 4,473
2,443 2,845 – 2,884 – 3,481 0 0
2,937 3,169 – 2,998 – 3,513 116,043 113,910
45 –42 – 40,888 – 37,145
1 1 – 2,046 – 2,372
– 1,098 – 892 – 24,399 – 26,010
– 757 – 813 – 3,965 – 4,541
– 2,188 – 2,262 2,950 3,615 – 36,476 – 37,649
417 101
– 1,106 – 798 – 3 61 8,686 6,296
1,770 2,038 –5 – 4 1,840 2,131
– 920 –841 7 3 – 1,165 – 1,100
850 1,196 2 – 1 675 1,031
– 256 399 – 1 60 9,361 7,327
– 2,515 – 2,758
6,846 4,569
764 348 – 388
7,194 4,181

[Table 17]

Segment reporting (nine-month comparison)

financial services feri
All fi gures in €'000 9 months 2010 9 months 20091 9 months 2010 9 months 2009
Revenue 308,204 307,888 24,360 22,583
of which total inter-segment revenue 173 114 139 122
Other revenue 11,673 11,506 4,418 4,028
of which total inter-segment revenue 1,344 1,879
Total revenue 319,877 319,394 28,778 26,611
Commission expenses – 117,317 – 109,069 – 1,162 – 843
Interest expenses – 7,105 – 9,899
Personnel expenses – 56,691 – 61,332 – 17,539 – 19,109
Depreciation/amortisation and impairment – 8,116 – 9,439 – 1,740 – 1,836
Other operating expenses – 111,884 – 108,895 – 6,809 – 7,038
Earnings from shares accounted for using the equity method 780 257
Segment earnings before interest and tax (EBIT) 19,543 21,016 1,528 – 2,215
Other interest and similar income 261 774 2 18
Other interest and similar expenses – 813 – 2,486 – 104 –98
Finance cost – 552 – 1,712 – 101 –80
Earnings before tax (EBT) 18,991 19,305 1,426 –2,295
Income taxes
Earnings from continuing operations after tax
Earnings from discontinued operations after tax 537 – 8,395
Net profi t
Sept 30, 2010 Dec 31, 2009 Sept 30, 2010 Dec 31, 2009
Segment assets 1,069,172 1,094,592 102,145 105,626

1 Previous year's value adjusted. The adjustments are disclosed under note 3

holding consolidation/other total
9 months 2010 9 months 2009 9 months 2010 9 months 20091 9 months 2010 9 months 20091
– 311 – 235 332,253 330,236
– 311 – 235 0 0
9,188 9,979 – 8,683 – 10,445 16,596 15,068
7,338 8,566 – 8,683 – 10,445 0 0
9,188 9,979 – 8,994 – 10,680 348,849 345,304
116 43 – 118,364 – 109,870
2 3 – 7,103 – 9,897
– 3,382 – 2,554 – 77,612 – 82,995
– 2,275 – 2,445 – 12,132 – 13,720
– 7,586 – 12,073 8,870 10,648 – 117,408 – 117,358
780 257
– 4,055 – 7,092 – 6 13 17,009 11,722
6,014 9,355 – 1,017 – 3,428 5,261 6,719
– 4,552 – 5,533 173 338 –5,296 – 7,778
1,462 3,822 – 845 – 3,090 – 35 – 1,059
– 2,593 – 3,271 – 851 – 3,076 16,974 10,663
– 5,059 –6,535
11,915 4,127
1,987 537 – 6,408
12,452 – 2,280
Sept 30, 2010 Dec 31, 2009 Sept 30, 2010 Dec 31, 2009 Sept 30, 2010 Dec 31, 2009
467,824 513,831 – 202,236 – 238,517 1,436,906 1,475,532

(1) Information about the company

The consolidated fi nancial statements were prepared by MLP AG, Wiesloch, Germany, the 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 corporate pension business, health care, fi nancing, wealth management and banking services.

(2) Principles governing the preparation of the fi nancial statements

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, 2oo9.

Apart from the exceptions detailed in note 3, the same consolidation principles and accounting policies as for the consolidated fi nancial statements of the fi nancial year 2oo9 have been applied to this interim fi nancial report. These are presented in the Group notes of the Annual Report 2oo9 that can be downloaded from the company's website (www.mlp-ag.com).

The interim fi nancial report has been drawn up in euros (€), the functional currency of MLP AG. Unless the notes state otherwise, all amounts are rounded to the nearest thousand euros (€'ooo). Both single and cumulative fi gures are values with the smallest rounding diff erence. As a result, diff erences to reported total amounts may arise when the individual values are added up.

(3) Adjustments to the accounting policies

The accounting policies applied are the same as those used in the fi nancial statements at December 31, 2oo9 except the standards and interpretations to be used for the fi rst time in the fi nancial year 2o1o.

In the fi nancial year 2oo9, MLP became aware of two cases which were recorded incorrectly in the previous years. In one case a trailer commission and in the other an expense were allocated to the wrong period of time. The errors are corrected retroactively in line with IAS 8. The eff ects of the adjustment in 2oo9 on the earnings per share were less than € o.o1.

Furthermore, in the fourth quarter of 2oo9 MLP concluded the purchase price allocation (ppa) concerning the acquisition of ZSH. This led to a change in the depreciation. The eff ect of the adjustment in 2oo9 on the earnings per share amounted to less than € o.o1.

The table below illustrates the eff ects of the changes with regard to the previous year's fi gures:

[Table 18]

All fi gures in €'000 9 months 2009
adjusted
9 months 2009
as reported
+ / – of which
error correction
of which business
acquisition (ppa)
Total revenue 345,304 345,304
Depreciation/amortisation
and impairment – 13,720 – 13,046 – 674 – 674
Other operating expenses – 117,358 – 116,835 – 523 – 523
Earnings before interest and tax (EBIT) 11,722 12,919 –1,196 – 523 -674
Finance cost – 1,059 – 1,059
Earnings before tax (EBT) 10,663 11,859 –1,196 – 523 – 674
Income taxes – 6,535 – 6,895 359 153 206
Earnings from continuing operations
after tax 4,127 4,965 – 837 – 370 – 467
Earnings from discontinued operations
after tax – 6,408 – 6,408
Net profi t (total) – 2,280 – 1,443 – 837 – 370 – 467

Furthermore, in the fi nancial year 2o1o the following new or revised standards are to be used for the fi rst time:

  • IFRS 2 "Share-based payment"
  • Improvement to IFRSs 2oo9
  • IFRS 1 "Additional exemption for fi rst-time adopters"
  • IFRS 7 "Financial instruments: disclosures"
  • IFRIC 14 "Prepayments of a minimum funding requirements"
  • IAS 24 "Related party disclosures"
  • IFRIC 19 "Extinguishing fi nancial liabilities with equity instruments"

The improvements to the IFRS in April 2oo9 (endorsed by the EU in March 2o1o) are of relevance to MLP, particularly concerning the changes to IAS 7 "Cash Flow Statement". In accordance with the revised standard, cash outfl ows are only to be allocated to investing activities if they are associated with the capitalisation of assets. Accordingly, in the fi rst nine months 2o1o MLP allocated € 3,146 thsd of net cash outfl ow associated with the sale of subsidiaries, to operating activities. In the absence of specifi c transitional regulations, the change to IAS 7 is to be applied retroactively. As a consequence, in the cash fl ow statement for the fi rst nine months 2oo9, € 57 thsd have now been shown as cash fl ow from operating activities instead of as cash fl ow from investing activities. The other changes did not have any eff ect on the presentation of the MLP Group's net assets, fi nancial position or result from operations.

(4) Seasonal infl uences on the business operations

The discussion about the healthcare reform, which comes into eff ect on January 1, 2o11, was benefi cal to the business development in the health insurance market. In the area of old-age provision, the eff ects of the fi nancial crisis continued to prevail. Due to seasonal infl uences on its business operations, the Group anticipates a higher level of net profi t from continuing operations in the fourth quarter than was achieved in the previous quarters.

(5) Revenue

[Table 19]

All fi gures in €'000 3rd quarter 2010 3rd quarter 2009 9 months 2010 9 months 2009
Old-age provision 64,149 65,066 182,717 188,019
Wealth management 19,963 18,682 57,090 51,751
Health insurance 12,827 10,362 39,432 33,149
Non-life insurance 3,724 3,493 23,901 22,164
Loans and mortgages 3,155 3,463 7,900 7,960
Other commission and fees 782 929 2,366 2,426
Commission and fees 104,600 101,994 313,405 305,468
Interest income 6,401 7,443 18,848 24,768
Total 111,001 109,438 332,253 330,236

(6) Personnel expenses/Number of employees

Personnel expenses decreased from € 82,995 thsd to € 77,612 thsd. The decrease is primarily due to the decline of the number of employees.

At September 3o, 2o1o, the MLP Group had the following numbers of employees in the strategic fi elds of business.

Sept 30, 2010 Sept 30, 2009
of which part-time
employees
of which part-time
employees
Financial services 1,398 137 1,513 188
Feri 249 63 265 66
Holding 13 1 11 1
Total 1,660 201 1,789 255

[Table 20]

(7) Other operating expenses

[Table 21]

All fi gures in €'000 3rd quarter 2010 3rd quarter 20091 9 months 2010 9 months 20091
IT operations 12,441 11,332 35,754 31,694
Rental and leasing 3,506 4,618 11,951 13,548
Administration operations 3,510 3,502 10,671 10,706
Consultancy 2,533 2,952 10,333 13,180
External services – banking business 2,223 1,959 5,866 6,129
Representation and advertising 1,527 3,138 5,036 7,948
Depreciation/impairment on other accounts receivable
and other assets 1,243 1,806 4,720 3,788
Expenses for commercial agents 1,086 1,279 3,757 3,624
Premiums and fees 1,101 1,239 3,757 4,277
Training and further training 894 593 3,499 3,330
Depreciation/impairment on receivables from clients
in the banking business 800 860 2,971 2,132
Travel expenses 1,007 1,025 2,841 3,749
Insurance 583 486 2,398 1,993
Entertainment 626 557 2,268 2,529
Maintenance 499 381 1,302 1,247
Audit 284 251 884 766
Other personnel costs 289 232 866 877
Expenses from currency translation 17 -10 53 41
Expenses from disposal of assets 10 33 38 289
Sundry other operating expenses 2,299 1,417 8,443 5,510
Total 36,476 37,649 117,408 117,358

1 Previous year's value adjusted. The adjustments are disclosed under note 3

The costs of IT operations contain operating expenses for applications that have passed over to an external service provider through outsourcing. The consulting costs consist of tax advice costs, legal advice costs as well as general and IT consulting costs. The consulting costs in 2oo9 contained one-off expenses for defence against a takeover. The expenses for representation and advertising include costs for media presence and client information. The depreciation and impairment on other accounts receivable and other assets contain the allowance for risk on receivables from commercial agents. The expense for commercial agents includes the expense for consultants who have left the company as well as the training allowance for new consultants. Sundry other operating expenses mainly consist of external services, car costs, donations and specialist literature.

[Table 22] (8) Finance cost

All fi gures in €'000 3rd quarter 2010 3rd quarter 2009 9 months 2010 9 months 2009
Other interest and similar income 1,840 2,131 5,261 6,719
Interest from fi nancial instruments –853 –953 –4,359 –7,338
Accrued interest on pension
provisions –312 –147 –937 –440
Other interest and similar
expenses – 1,165 – 1,100 – 5,296 – 7,778
Finance cost 675 1,031 – 35 – 1,059

The decrease in other interest and similar income results from lower interest of cash funds. The decrease in other interest and similar expenses is mainly attributable to dividend payments to the remaining shareholders of Feri Finance AG amounting to € 653 thsd (previous year: € 2,368 thsd) as well as to the absence of interest charges on tax liabilities that were incurred in the previous year as a result of an audit. However, depreciation on fi nancial investments amounted to € 1,236 thsd (previous year: € o thsd).

(9) Receivables from banks in the banking business

The reduction in receivables from banks, which fell from € 498,2o1 thsd to € 437,794 thsd, is mainly attributable to the profi t transfer payment by MLP Finanzdienstleistungen AG to MLP AG.

[Table 23]

(10) Financial investments

All fi gures in €'000 Sept 30, 2010 Dec 31, 2009
Available for sale
Debt securities and holdings in investment funds 38,113 33,424
Investments 3,448 3,398
Held-to-maturity securities 89,539 45,385
Loans and receivables 125,288 110,183
Total 256,388 192,389

The increase in fi nancial investments is mainly attributable to the purchase of new securities.

(11) Other accounts receivable and other assets/other liabilities

Due to the seasonally stronger year-end business, high receivables from insurance companies as well as high liabilities towards commercial agents at December 31, 2oo9 had to be shown which were then balanced out in the fi rst quarter of 2o1o. A lower amount of receivables and liabilities were built up in the fi rst nine months of 2o1o.

(12) Shareholders' equity

Share capital

The share capital of MLP AG is made up of 1o7,877,738 no-par-value shares (December 31, 2oo9: 1o7,877,738 no-par-value shares). In the fi rst nine months 2o1o no new no-par-value shares were issued through the exercising of rights of conversion.

Dividend

In accordance with the resolution passed at the Annual General Meeting May 2o, 2o1o a dividend of € 26,969 thsd was to be paid for the fi nancial year 2oo9. This corresponds to € o.25 per share. For the fi nancial year 2oo8 MLP AG distributed a dividend of € o.28 per share in the second quarter 2oo9.

(13) Discontinued operations

The revenue and expenses from the discontinued operations are illustrated below.

[Table 24]

All fi gures in €'000 3rd quarter 2010 3rd quarter 2009 9 months 2010 9 months 2009
Revenue 1,602 4,913
Other revenue 25 151
Total revenue 1,626 5,064
Commission expenses –440 –1,967
Personnel expenses –1,331 –4,249
Depreciation and amortisation - –3
Other operating expenses –431 –2,767
Earnings before interest and tax (EBIT) – 576 – 3,922
Other interest and similar income 1 8
Other interest and similar expenses –1
Finance cost 1 7
Earnings before tax (EBT) – 575 – 3,915
Income taxes –125 –41
Operating profi t – 700 – 3,956
Earnings from the sale of operations before tax 370 300 128 –1,020
Income taxes –22 12 408 –1,431
Earnings from the sale of operations after tax 348 312 537 – 2,452
Earnings from discontinued operations after tax 348 – 388 537 – 6,408
Earnings per share in €
From discontinued operations
basic 0.00 0.00 0.00 –0.06
diluted 0.00 0.00 0.00 –0.06

(14) Notes on the consolidated statement of cash fl ows

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.

[Table 25]

All fi gures in €'000 Sept 30, 2010 Sept 30, 2009
Cash and cash equivalents 48,775 53,767
Cash and cash equivalents, contained in non-current assets
held for sale and disposal groups 562
Loans < 3 months 85,000 70,000
Liabilities to banks due on demand –3,088
Cash and cash equivalents 133,775 121,241

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.

The cash fl ow from operating activities results from cash fl ows that cannot be defi ned as investment or fi nancing activities. The starting point for the calculation of the cash fl ow from operating activities is the net profi t. For indirect determination of the cash fl ow, the changes in items due to operating activities are adjusted to take account of eff ects from changes to the scope of consolidation and currency translation. The changes in the respective items can therefore only be partly aligned with the corresponding values in the published consolidated statements. The cash fl ow from operating activities rose by € 13.4 million year on year to € 93.o million.

In the current fi nancial year, cash fl ow from investing activities is mainly infl uenced by the investment of cash in fi xed term deposits. In the comparative period matured fi xed term deposits were not reinvested.

The change of the cash fl ow from fi nancing activities is mainly attributable to the repayment of loan liabilities.

(15) Notes on Group reporting by segment

There were no signifi cant changes compared to December 31, 2oo9.

(16) Other fi nancial commitments, contingent assets and liabilities and other liabilities

On the balance sheet reference date there are liabilities on account of sureties and warranties amounting to € 1o,512 thsd (Dec 31, 2oo9: € 23,3oo thsd) as well as irrevocable credit commitments of € 25,115 thsd (Dec 31, 2oo9: € 9,117 thsd).

Beyond this there were no signifi cant changes compared to December 31, 2oo9.

(17) Related party disclosures

Compared to December 31, 2oo9 there were no signifi cant changes.

(18) Events subsequent to the reporting reference date

There were no notable events after the balance sheet date which may aff ect the MLP Group's net assets, fi nancial position or results of operations.

Wiesloch, November 1o, 2o1o

MLP AG

Executive Board

Dr. Uwe Schroeder-Wildberg Manfred Bauer Ralf Schmid Muhyddin Suleiman
---------------------------- --------------- ------------- -------------------

List of fi gures and tables

list of figures list of tables

Management report

05 Figure 01 German Gross Domestic Product
06 Figure 02 Reduction in old-age provision in Germany
07 Figure 03 Citizens' anticipations for the German statutory
healthcare system
08 Figure 04 Infl ows and outfl ows in various types of mutual
investment funds in Germany in 9M 2010
09 Figure 05 Total revenue from continuing operations
10 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 economic growth in Germany
22 Figure 10 Development of the EBIT margin from 2005 – 2012

Investor Relations

23 Figure 11 MLP share, SDAX und DAXsector Financial Services
in the fi rst nine months 2010
25 Figure 12 MLP shareholder structure

Cover

Table 01 MLP key fi gures

Management report

11 Table 02 Earnings development of continuing operations
12 Table 03 Assets as at September 30, 2010
13 Table 04 Liabilities and shareholders' equity
as at September 30, 2010
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
from 2010 – 2012

Investor Relations

24 Table 08 Key fi gures of the MLP share

MLP consolidated fi nancial statements

26 Table 09 Income statement for the period
from January 1 to September 30, 2010
26 Table 10 Statement of comprehensive income for the
period from January 1 to September 30, 2010
27 Table 11 Assets as at September 30, 2010
27 Table 12 Liabilities and shareholders' equity
as at September 30, 2010
28 Table 13 Condensed statement of cash fl ows for the period
from January 1 to September 30, 2010
28 Table 14 Condensed statement of cash fl ows for the period
from July 1 to September 30, 2010
29 Table 15 Statement of changes in equity

Notes

30 Table 16 Segment reporting (quarterly comparison)
32 Table 17 Segment reporting (nine-month comparison)
35 Table 18 Adjustments to the accounting policies
36 Table 19 Revenue
36 Table 20 Personnel expenses/Number of employees
37 Table 21 Other operating expenses
38 Table 22 Finance cost
38 Table 23 Financial investments
40 Table 24 Discontinued operations
41 Table 25 Notes on the consolidated statement of cash fl ows

Executive Bodies of MLP AG

Executive Board

Dr. Uwe Schroeder-Wildberg (Chairman, appointed until December 31, 2o12)

Manfred Bauer (Product management and purchasing, since May 1, 2o1o, appointed until April 3o, 2o15)

Gerhard Frieg (Product management and purchasing, until March 31, 2o1o)

Ralf Schmid (Chief Operating Offi cer, appointed until December 31, 2o12)

Muhyddin Suleiman (Sales, appointed until September 3, 2o12)

Supervisory Board

Dr. Peter Lütke-Bornefeld (Chairman)

Dr. h. c. Manfred Lautenschläger (Vice chairman)

Dr. Claus-Michael Dill

Johannes Maret

Maria Bähr (Employee representative)

Norbert Kohler (Employee representative)

Contact

Investor Relations

Tel +49 (o) 6222 • 3o8 • 832o Fax +49 (o) 6222 • 3o8 • 1131 [email protected]

Public Relations

Tel +49 (o) 6222 • 3o8 • 831o Fax +49 (o) 6222 • 3o8 • 1131 [email protected]

Financial calendar 2010 Financial calendar 2011

November 11 Results for the 3rd quarter 2o1o (Publication of the fi nancial interim report)

November 16 Commerzbank Corporate Day, London

November 17 WestLB German Conference, Frankfurt

December 1 Roadshow, London

January 17-19 Cheuvreux German Conference, Frankfurt

February 23 Annual press conference and analysts conference, Frankfurt

March 24 Publication of the Annual Report 2o1o

March 31 Bankhaus Lampe Capital Market Conference, Baden-Baden

May 12 Results for the 1st quarter 2o11 (Publication of the fi nancial interim report)

June 10 Annual General Meeting of MLP AG, Mannheim

August 11 Results for the 2nd quarter 2o11 (Publication of the fi nancial interim report)

September 27-29 UniCredit German Conference, Munich

November 10 Results for the 3rd quarter 2o11 (Publication of the fi nancial interim report)

Guidelines on consulting and supporting private clients

    1. The client is our main focus.
    1. MLP places great emphasis on selecting the right consultants.
    1. All consultants receive thorough training and continue to attend regular training throughout their career.
    1. Consultants' remuneration enables long-term client support.
    1. A comprehensive portfolio and needs analysis is the starting point for all consultations.
    1. MLP advises its clients with a long-term, holistic approach based on their individual needs.
    1. Products are selected independently and based on objective criteria.
    1. MLP clearly lays out the charges and services involved in its consulting.
    1. Comprehensive documentation of the consultation off ers clients clear added value.
  • 1o. MLP supports further development of the legal framework for fi nancial advice.

More information at: www.mlp-beratungsqualitaet.de (German only)

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 diff ering 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 diff ering 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 • 0 Fax +49 (0) 6222 • 308 • 9000 www.mlp-ag.com

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