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MLP SE

Quarterly Report Aug 12, 2010

289_10-q_2010-08-12_5cdc709d-bf9f-40d4-8a0d-d58fcf01925b.pdf

Quarterly Report

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Interim Group Report for the fi rst half-year and the second quarter 2010

MLP Group

[Table 01] MLP key fi gures

All fi gures in € million 2nd quarter 2010 2nd quarter 2009 1st half-year 2010 1st half-year 2009 Change
Continuing operations
Total revenue 111.6 105.9 232.8 231.4 0.6 %
Revenue 106.0 100.0 221.3 220.8 0.2 %
Other revenue 5.7 5.9 11.6 10.6 9.4 %
Earnings before interest and tax (EBIT) 4.3 2.2 8.3 5.4 53.7 %
EBIT margin (%) 3.9 % 2.1 % 3.6 % 2.3 %
Earnings from continuing operations 3.1 – 0.5 5.1 – 0.4 >100.0 %
Earnings per share (diluted) in € 0.03 0.00 0.05 0.00 >100.0 %
MLP Group
Net profi t (total) 3.1 – 5.1 5.3 – 6.5 >100.0 %
Earnings per share (diluted) in € 0.03 – 0.05 0.05 – 0.06 >100.0 %
Cash fl ow from operating activities 34.7 10.6 78.0 65.9 18.4 %
Capital expenditure 1.3 1.5 2.3 3.0 – 23.3 %
Shareholders' equity 399.1 418.51 – 4.6 %
Equity ratio 27.7 % 28.4 %1
Balance sheet total 1,439.2 1,475.51 – 2.5 %
Clients2 767,000 785,5001 – 2.4 %
Consultants2 2,359 2,3831 – 1.0 %
Branch offi ces2 206 2381 – 13.4 %
Employees 1,682 1,991 – 15.5 %
Arranged new business2
Old-age provisions (premium sum in € billion) 1.0 1.0 2.0 1.9 5.3 %
Health insurance (annual premium) 10.6 9.7 23.3 20.6 13.1 %
Loans and mortgages 316.0 335.6 578.0 571.0 1.2 %
Assets under management (in € billion) 18.7 17.01 10.0 %

1 As at December 31, 2009

Continuing operations

Interim Group Report for the fi rst half-year and the second quarter 2010

the first half-year and the second quarter 2010 at a glance:

  • EBIT Q2 almost doubles to € 4.3 million (€ 2.2 million)
  • Total revenue Q2 rise to € 111.6 million (€ 105.9 million)
  • Assets under management reach a new record high of € 18.7 billion increasing by € 1.0 billion in the second quarter alone
  • Further pick-up in business expected particularly in the fourth quarter

Table of contents

5 Interim Management Report for the fi rst half-year and the second quarter 2010
5 Macroeconomic environment
6 Situation within the industry and the competitive environment
9 Company situation
9 Results of operations
13 Net assets
15 Financial position
16 Personnel
17 Communication and advertising activities
17 Legal corporate structure and executive bodies
18 Segment report
20 Risk report
20 Related party disclosures
20 Outlook for the current fi nancial year/forecast
23 Events subsequent to the reporting date
24 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 statement
43 Review report
44 Assurance by the legal representatives
45 List of fi gures and tables
46 Executive bodies at MLP AG
47 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 € 18.7 billion and supports more than 76o,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 pension 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 half-year and the second quarter 2010

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

Source: Federal Ministry of Finance

macroeconomic environment

Macroeconomic impetus for MLP's business development stems almost entirely from the development of the German economy, in which the Group generates nearly 1oo % of its total revenue.

The German economy began to return to growth during the fi rst quarter of 2o1o and gained further momentum during the second quarter. Economic growth of o.2 % during the period from January to March was followed, according to estimates by economic experts, by an expansion of 1.o % for the period from April to June. In particular, the export-dependent industry benefi ted from the more dynamic global economy and the construction industry was also able to contribute to this growth in the spring quarter, having endured a hard winter.

The stronger state of the economy also had a positive eff ect on the labour market in Germany. The unemployment rate at the end of June 2o1o fell to 7.5 % (annual average 2oo9: 8.2 %). The number of employees in short-time working also continued to fall, decreasing to just 613,ooo by the end of the period under review – a very signifi cant improvement over 2oo9 when, at times, more than double this number of people were aff ected by short-time working measures.

According to estimates by the Federal Ministry of Finance, the favourable economic environment, the positive development within the labour market and the restrained price infl ation were still unable to positively infl uence the level of private consumption in the fi rst six months of 2o1o. Experts anticipate that the corresponding development in the second quarter of 2o1o will prove to have been similarly weak.

This scepticism on the part of private households with respect to the resilience of the upswing was also refl ected in MLP's business development. On the one hand, we were able to achieve single or even double-digit growth in the areas of wealth management, health insurance, nonlife insurance and mortgages and loans. However, revenue in our important old-age provision area – in which clients are required to commit to long-term savings processes – remained 3.6 % below the corresponding fi gure achieved in the fi rst six months of the previous year and amounted to € 118.6 million.

[Figure 02]

What effect do the fi nancial crisis and its possible consequences have on the most important saving targets of the German population?

Source: TNS Infratest

Survey of more than 2,000 inhabitants in Germany. Minimum age 14

situation within the industry and the competitive environment

Old-age provision

One of the indicators for the development of the market for old-age provision products is the business development of the German life insurance companies. According to the German Insurance Association (GDV) new business in the life insurance segment developed positively in the fi rst half-year of 2o1o. However, this was mainly attributable to the conclusion of life insurance policies with a one-off premium payment. Private investors also increasingly utilised the off ers available from life insurance companies in this area, although these products tend more towards capital investments than towards old-age provision products. On the other hand, new business for life insurance with recurrent premiums – the relevant area of focus for MLP – stagnated during the period under review.

This trend was also confi rmed by a study conducted by the opinion research institute TNS Infratest which revealed that the level of willingness on the part of the German population to save money for old-age provision has declined. Although around 68 % of the respondents had put money aside for old-age provision purposes in the fi rst quarter of 2o1o, this fi gure fell to just 62 % in the second quarter.

MLP was unable to escape this negative trend in the fi rst half-year and our total revenue in the old-age provision area fell by 3.6 %.

[Figure 03] Increasing interest in private supplementary health insurance

Percentage of people who have considered taking out further supplementary health insurance:

Base: Federal Republic of Germany, people insured in the state healthcare system Source: MLP Health Report 2009

Health provision

During the fi rst half-year of 2o1o the overriding topic in the market for health provision was the necessary reform of the German healthcare system. Rising costs due to the demographic development and progress in medical technology brought the existing system to the limits of its fi nanceability. In order to solve this problem the government decided to implement a healthcare reform based on the following three core elements:

  • Raising the standard premium levied by the statutory health insurance funds from 14.9 % to 15.5 %.
  • Future cost increases must be borne fully by the insurees. In addition, a further premium is to be introduced which will not be linked to the income of the insuree and which can be independently determined by each statutory health insurance fund.
  • If the further premium determined by the statutory health insurance exceeds the threshold of 2 % of an insuree's income, the diff erence will be fi nanced from tax revenue.

During the period under review, the controversial debate surrounding the healthcare reform proved to be benefi cial to MLP's business development. It heightened our clients' awareness of the fact that the costs in the state-run healthcare system will continue to rise and the catalogue of treatments and services off ered will diminish. This led to greater willingness to cover healthcare risks through private full insurance or supplementary insurance policies. In the fi rst six months of this year our revenue in this area rose by 16.7 % to € 26.6 million.

[Figure 04] Infl ows and outfl ows in various types of mutual investment funds in Germany in H1 2010 (in € billion)

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

Wealth management

In the fi rst half of 2o1o the German investment fund industry registered signifi cantly higher infl ows compared to the corresponding period in 2oo9. Mutual funds took in € 1o.2 billion (€ 1.3 billion), and institutional investors placed € 23.7 billion (€ 2.3 billion) of new money into special funds. Among the mutual funds, the mixed, equity and fi xed income funds par ticularly benefi ted. Due to the low interest rates money market funds continued to experience a fall, recording outfl ows of € 7.6 billion.

At the reference date on June 3o, 2o1o, the German investment fund companies managed a total of € 1,75o.6 billion of assets – thus taking the overall fund volume to above the level attained prior to the outbreak of the economic and fi nancial crisis (€ 1,65o.1 billion at the reference date on June 3o, 2oo8).

MLP too was able to benefi t from this pleasing development in the market. In the fi rst halfyear we registered signifi cant infl ows, both from private as well as from institutional investors. Assets under management rose to a new record high of € 18.7 billion, representing an increase of 1o % compared to the end of 2oo9.

Competition

The competitive situation in the German fi nancial services market did not change signifi cantly during the period under review. The market for the sale of fi nancial services remains highly fragmented. Banks and insurance companies with their respective distribution channels, as well as tied sales organisations and brokers all compete for market share. In the fi rst half-year of 2o1o, legislators discussed the possible introduction of further regulatory measures designed to increase the level of consumer protection in the wake of the economic and fi nancial crisis. As yet, no fi rm decisions have been reached.

Company situation

[Figure 05] Total revenue from continuing operations (in € million)

results of operations

Rising total revenue

Total revenue in the fi rst half-year of 2o1o amounted to € 232.8 million and was thus slightly above the previous year (€ 231.4 million). In particular, the areas of wealth management, health insurance and non-life insurance contributed to this fi gure. In wealth management, revenue rose by 12.1 % to € 37.1 million. The growth in health insurance was even more dynamic, increasing by 16.7 % to € 26.6 million. Non-life insurance grew by 8.o %, resulting in revenue of € 2o.2 million. However, revenue from old-age provision products declined, falling by 3.6 % to € 118.6 million. Interest income was also regressive, declining by 28.3 % to € 12.4 million due to the prevailing low interest rates.

In the second quarter, revenue from commissions and fees increased across all the consulting areas, rising to € 99.7 million and representing an 8.5 % gain compared to the same quarter in the previous year (€ 91.9 million). The breakdown analysis shows a signifi cant pick-up in wealth management business where revenue rose by 18.2 % to € 18.8 million (€ 15.9 million). In the private health insurance area, the growth was even more striking –revenue climbed by 5o.5 % to € 13.7 million (€ 9.1 million). Demand for greater risk provision also remains high, leading to a 11.8 % rise in non-life insurance revenue to € 3.8 million (€ 3.4 million). Old-age provision amounted to € 59.7 million and thus almost equalled the previous year's level (€ 6o.1 million). However, interest income fell due to the prevailing low interest rates, declining by 22.2 % to € 6.3 million (€ 8.1 million). Overall, total revenue in the second quarter rose by 5.4 % to € 111.6 million.

Development of expenses

In the fi rst six months of the current fi nancial year commission expenses developed slightly over-proportionally to the revenue from commissions and fees. Whereas revenue from commissions and fees grew by 2.6 %, the expenses rose by 6.6 % to € 77.5 million.

Due to the generally lower level of interest rates, interest expenses fell signifi cantly from € 7.5 million to € 5.1 million. Overall, our interest result decreased from € 9.8 million to € 7.3 million.

In the fi rst half-year of 2o1o we were able to reduce our fi xed costs (personnel expenses, depreciation and amortisation, other operating expenses) by 2.5 % to € 142.3 million. This included a decrease in personnel expenses of 6.7 % and a reduction in depreciation and amortisation of 1o.9%. However, other operating expenses rose by 1.5 % to € 8o.9 million.

EBIT rises by 53.7 %

MLP signifi cantly increased its earnings before interest and tax (EBIT) in the period under review. Following € 5.4 million in the previous year, we achieved € 8.3 million this year. The fi nancial result also improved in the fi rst six months of the current fi nancial year, rising from € – 2.1 million to € – o.7 million. This, in turn, led to signifi cantly higher earnings before tax (EBT) of € 7.6 million (€ 3.3 million).

[Table 02] Earnings development of continuing operations

All fi gures in € million 1st half-year 2010 1st half-year 2009 Change
Total revenue 232.8 231.4 0.6 %
EBIT 8.3 5.4 53.7 %
EBIT margin 3.6 % 2.3 %
Finance costs – 0.7 – 2.1 66.7 %
EBT 7.6 3.3 > 100.0 %
EBT margin 3.3 % 1.4 %
Income tax – 2.5 – 3.8 – 34.2 %
Net profi t (continuing operations) 5.1 – 0.4 > 100.0 %
Net margin 2.2 % – 0.2 %

Based on a tax rate of 32.9 %, income tax expenses amounted to € 2.5 million (€ 3.8 million). Following a reported loss of € o.4 million in continuing operations for the corresponding period of the previous year, MLP was able to generate a post-tax profi t of € 5.1 million for the period under review. Together with the result from the discontinued operations the Group result came in at € 5.3 million (€ – 6.5 million).

This led to improved diluted earnings per share which rose from € – o.o6 to € o.o5.

The development of expenses in the second quarter of 2o1o progressed similarly to the overall half-year. Due primarily to the increase in total revenue by 5.4 %, we were able to improve our earnings before interest and tax (EBIT) from € 2.2 million to € 4.3 million. Together with the fi nancial result of € – o.2 million (€ – o.6 million), earnings before tax (EBT) in the second quarter rose to € 4.1 million (€ 1.6 million). Income tax was signifi cantly lower at € 1.o million (€ 2.1 million).

In the discontinued operations the result improved from € – 4.6 million to € o.o4 million. During the previous year we booked disposal and closure costs of € 1.3 million and recorded an operating loss of € 1.7 million. In addition we incurred tax charges for already discontinued business activities amounting to € 1.5 million due to the tax authorities' non-acceptance of loss carry-forwards for the fi nancial years 2oo2 to 2oo6.

In the second quarter of 2o1o the Group result improved signifi cantly from € – 5.1 million to € 3.1 million.

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 and 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 expect to achieve stable revenue development during the current fi nancial year despite framework conditions remaining diffi cult.

This forecast was confi rmed in the fi rst half-year. In both areas together we achieved revenue amounting to € 145.2 million compared to € 145.8 million in the previous year. However, in wealth management we do expect to achieve a moderate revenue increase in the fi nancial year 2o1o. This development too was already evident during the period under review in which revenue from wealth management was 12.1 % higher than in the comparative period.

The development of expenses in the fi rst half-year conformed to our expectations. Our target for the full year is to reduce fi xed costs (personnel expenses, depreciation and amortisation, other operating expenses) by € 1o million. In the period under review these expenses reduced by a total of € 3.6 million (see section on "Development of expenses", page 1o).

Assets under management reach a new record high

Thanks to positive new business with private investors and, in particular, institutional clients, Assets under management reached a new all-time high of € 18.7 billion. This corresponds to an increase of € 1.o billion compared to March 31, 2o1o (€ 17.7 billion) – the highest quarterly growth in the history of MLP. Through this achievement we have laid down an important foundation for future revenue in wealth management. The premium sum of new business in old-age provision in the fi rst half-year rose slightly to € 2.o billion (€ 1.9 billion). Occupational pensions accounted for 12 % of this fi gure (Full year 2oo9: 1o %). In the health insurance business, annual premiums climbed to € 23.3 million (€ 2o.6 million).

MLP gains 16,000 clients in the fi rst half-year

In the first half-year MLP gained a gross total of 16,ooo private clients (15,1oo). Thus the total number of clients stands at 767,ooo. The number of consultants stood at 2,359 (March 31, 2o1o: 2,384).

[Table 03] Assets as at June 30, 2010

All fi gures in € million June 30, 2010 Dec 31, 2009 Change
Intangible assets 152.6 156.1 – 2.2 %
Property, plant and equipment 76.5 78.8 – 2.9 %
Investment property 11.3 11.4 – 0.9 %
Shares accounted for using the equity method 2.4 2.0 20.0 %
Deferred tax assets 2.8 3.0 – 6.7 %
Receivables from clients in the banking business 331.3 313.5 5.7 %
Receivables from banks in the banking business 452.3 498.2 – 9.2 %
Financial investments 239.5 192.4 24.5 %
Tax refund claims 16.7 33.1 – 49.5 %
Other accounts receivable and other assets 102.2 132.1 – 22.6 %
Cash and cash equivalents 51.6 55.0 – 6.2 %
Total 1,439.2 1,475.5 – 2.5%

net assets

Total assets fall by 2.5%

At the reporting reference date on June 3o, 2o1o the total assets of the MLP Group had decreased by 2.5 % to € 1,439.2 million. On the asset side of the balance sheet fi ve items primarily contributed to this situation.

Our loans to clients (receivables from clients in the banking business) increased by 5.7 %, or by € 17.8 million to € 331.3 million. On the other hand, receivables from fi nancial institutions in the banking business fell by € 45.9 million to € 452.3 million. This change was mainly due to the profi t transfer from our subsidiary MLP Finanzdienstleistungen AG to MLP AG for the fi nancial year 2oo9 which amounted to € 41.8 million.

Overall, fi nancial investments and cash and cash equivalents increased signifi cantly, rising by 17.7 % to € 291.1 million. This was also primarily attributable to the profi t transfer from our subsidiary MLP Finanzdienstleistungen AG. Cash and cash equivalents reduced slightly, falling by 6.2 % to € 51.6 million and was due, in part, to the dividend payment for 2oo9. On the other hand we in creased the fi nancial investments from € 192.4 million to € 239.5 million through the redeployment of liquid funds in longer-term investments.

At the balance sheet reference date on June 3o, 2o1o tax refund claims amounted to just € 16.7 million (€ 33.1 million).

Other accounts receivable and other assets fell from € 132.1 million to € 1o2.2 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 the fall again during the course of the following fi nancial year.

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

All fi gures in € million June 30, 2010 Dec 31, 2009 Change
Shareholders' equity 399.1 418.5 – 4.6 %
Provisions 44.9 52.4 – 14.3 %
Deferred tax liabilities 10.7 10.7 0 %
Liabilities due to clients in the banking business 814.4 750.3 8.5 %
Liabilities due to banks in the banking business 18.8 20.8 – 9.6 %
Tax liabilities 1.0 9.0 – 88.9 %
Other liabilities 150.5 211.8 – 28.9 %
Liabilities in connection with non-current assets held
for sale and disposal groups 2.0 – 100.0 %
Total 1,439.2 1,475.5 –2.5%

Very good equity capital position

Our equity capital position changed from € 418.5 million to € 399.1 million due primarily to the payment of the dividend for the fi nancial year 2oo9 amounting to € 27.o million, the profi t of the fi rst half-year of 2o1o and a change in retained earnings due to the marked to market of securities. At the balance sheet reference date the equity ratio stood at 27.7 % (28.4 %) and the equity capital position of the Group therefore remains very good.

We were able to reduce the provisions from € 52.4 million to € 44.9 million. The decrease is 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 banks in the banking business. Client deposits rose by 8.5 % to € 814.4 million. These mainly consist of deposits in the areas of accounts, credit cards and instant access savings accounts.

We reduced our tax liabilities from € 9.o million to € 1.o million.

Other liabilities fell from € 211.8 million to € 15o.5 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 the strong year-end business but which then fall again in the following quarters.

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

All fi gures in € million 2nd quarter 2010 2nd quarter 2009 1st half-year 2010 1st half-year 2009
Cash and cash equivalents at the beginning of period 116.0 131.2 123.6 38.0
Cash fl ows from operating activities 33.0 10.7 81.0 65.5
Cash fl ows from investing activities – 27.2 21.9 – 75.9 60.7
Cash fl ows from fi nancing activities – 27.0 – 30.2 – 29.1 – 30.2
Changes in cash and cash equivalents –21.1 2.4 –24.0 96.0
Infl ows/outfl ows due to divestments 1.7 0.4 – 3.1 0
Cash and cash equivalents at the end of period 96.6 134.0 96.6 134.0

financial position

Cash fl ow from operating activities in continuing operations amounted to € 81.o million (€ 65.5 million). Signifi cant cash fl ows in this respect result from our deposit business with clients and from the investment of these funds. The change of cash fl ows in the receivables from, and liabilities due to clients in the banking business results in a positive change of € 1o8.5 million which is primarily due to an increase in deposit business with our clients in the current fi nancial year. In the corresponding period of the previous year there was a decline in the deposit business. Other signifi cant cash fl ows arise from the negative change of cash fl ows in the receivables from, and liabilities due to banks in the banking business amounting to € 95.3 million, which were primarily infl uenced by the fall in receivables from banks.

Cash fl ow from investment activity in the continuing operations changed from € 6o.7 million to € – 75.9 million. Here, cash was invested in term deposits and 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 activity in the continuing operations contains the dividend payments as well as the outfl ows from the repayments of loans.

At the end of the fi rst half-year the Group's total liquid funds stood at € 192.3 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.

[Table 06] Number of employees

June 30, 2010 June 30, 2009
Financial services 1,417 1,713
Feri 251 267
Holding 14 11
Total 1,682 1,991

Capital measures

No capital measures were undertaken during the period under review.

Investments

In the fi rst six months of the current fi nancial year we invested a total of € 2.3 million, corresponding to a decrease of € o.7 million. Around 82% of this fi gure was allocated to the fi nancial services segment – mainly for software and 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.

personnel

The number of employees reduced further during the period under review. At June 3o, 2o1o the MLP Group had a total of 1,682 (1,991) employees. Without taking the number of marginal parttime employees into account, the fi gure decreased by 126 people. This was partly due to the outsourcing of our IT area in the second half of 2oo9. Within the framework of this measure, 55 employees in this area were off ered the opportunity to become employees of our IT partner Hewlett-Packard (HP). However, even compared to March 31, 2o1o, the number of employees has fallen by 24.

The development of personnel expenses is shown in the section "Development of expenses", page 1o.

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 employer culture with an excellent score for image, work-life balance and employee remuneration.

communication and advertising activities

During the second quarter MLP received several awards for the quality of its consulting services. In a client assessment survey conducted in May by the online portal "WhoFinance.de", MLP once again achieved the top grade for its consulting and was ranked in second position overall.

According to a publication by the investor magazine "Börse Online", MLP achieved the best overall ranking in a survey conducted by the private university WHU – Otto Beisheim School of Management concerning client satisfaction in the private banking segment – ahead of Merck Finck and Berenberg Bank.

legal corporate structure and executive bodies

During the period under review there was a change in the composition of the Executive Board. 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 Manfred Bauer as his successor. He joined the Executive Board of MLP 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 on 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 ff of the Annual Report 2oo9.

Financial services segment

Total revenue in the fi nancial service segment in the fi rst half-year of 2o1o amounted to € 214.3 million, corresponding to a slight increase of € o.3 million compared to the same period of the previous year. The largely variable commission expenses increased from € 72.1 million to € 76.7 million. Due to the generally low level of interest rates, interest expenses fell signifi cantly, decreasing by 32.o % to € 5.1 million. The success of our cost reduction programme was evident in the personnel expenses as well as in depreciation and amortisation. Personnel expenses fell by € 3.o million to € 39.2 million. Depreciation and amortisation decreased by € o.8 million to € 5.5 million. However, other operating expenses amounted to € 76.9 million and were thus higher than in the fi rst half of 2oo9 (€ 72.o million). Overall, total expenses in this segment rose by € 3.2 million to € 2o3.4 million. Earnings before interest and tax (EBIT) for this segment amounted to € 11.2 million (€ 14.o million). The fi nancial result also improved signifi cantly from € – 1.6 million in the previous year to € – o.5 million, but the improvement was not enough to compensate for the higher total expenses. Earnings before tax (EBT) therefore fell by 12.9 % to € 1o.8 million.

In the second quarter of 2o1o we were able to stop the negative trend in total revenue compared to the fi rst quarter of 2o1o. Whereas total revenue in the fi rst quarter was still regressive to the tune of 4.3 %, it rose again in the second quarter by 5.5 % to € 1o2.3 million. The development of expenses in the second quarter did not signifi cantly diff er from the development in the fi rst half-year. Total expenses rose slightly by 5.o % to € 96.5 million. Due to the higher total revenue we were nevertheless able to improve earnings before interest and tax (EBIT) which rose from € 5.2 million to € 6.o million. The fi nance cost in the second quarter of 2o1o improved to € – o.1 million (€ – 1.2 million). In the previous year this item included interest expenses in connection with a tax audit.

Through the increase in total revenue and the improvement of the fi nance cost, we were able to increase earnings before tax (EBT) in the segment by 45.o % to € 5.8 million.

Feri segment

Pleasing business development was achieved in the Feri segment during the period under review. Total revenue increased by 3.4 % to € 18.3 million, coupled with a reduction in total expenses of 8.5 % to € 18.2 million. Earnings before interest and tax (EBIT) improved from € – 2.2 million to € o.o3 million. Taking the fi nancial result of € o.o2 million (€ – o.o6 million) into account, we achieved even earnings before tax (EBT; previous year € – 2.2 million).

In the second quarter of 2o1o the positive trend from the fi rst quarter of 2o1o strengthened. Whereas total revenue in the fi rst quarter only reached the corresponding level of the previous year, we achieved an increase of 6.7 % in the second quarter to € 9.5 million. Total expenses in the second quarter fell by 8.9 %, decreasing slightly more than in the fi rst quarter (8.2 %). Cost reductions in both quarters were achieved primarily in the areas of personnel expenses and other operating expenses.

Earnings before interest and taxes (EBIT) in the second quarter improved signifi cantly from € – 1.2 million to € o.3 million. After consideration of the fi nancial result of € – o.o2 million (€ – o.o5 million), earnings before tax (EBT) improved from € – 1.2 million to € o.2 million.

Holding segment

Total revenue in the Holding segment in the fi rst half-year decreased slightly from € 6.8 million to € 6.3 million. However, earnings before interest and tax (EBIT) improved signifi cantly from € – 6.3 million to € – 2.9 million. This was mainly due to the fall in other operating expenses which decreased by 44.9 % to € 5.4 million. In the previous year this position had also included expenses for the one-off consulting services amounting to € 3.4 million concerning the holding in MLP acquired by Swiss Life in 2oo8. In the fi rst half-year of 2o1o we achieved a fi nancial result of € o.6 million (€ 2.6 million). The decrease is primarily attributable 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. Earnings before tax thus improved from € – 3.7 million to € – 2.3 million.

In the second quarter of 2o1o we managed to reduce total expenses in the Holding segment by 7.5 % to € 4.9 million. However, this was unable to compensate for the fall in total revenue from € 3.6 million to € 2.9 million. This led to earnings before interest and tax (EBIT) in the second quarter of € – 2.o million (€ – 1.7 million). The fi nancial result amounted to € – o.o6 million (€ o.6 million) and was also behind last year. Overall we achieved earnings before tax (EBT) in the second quarter of € – 2.o million (€ – 1.1 million).

risk report

There were no signifi cant changes in the risk situation of the Group during the period under review. Despite the continuing economic and fi nancial crisis there were no exceptional burdens within the framework of our counterparty default risks, market price risks, liquidity risks, operational or other risks. The Group continues to have adequate liquid funds. At the reporting date of June 3o, 2o1o, our core capital ratio of 22.2 % far exceeded the required 8 % 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 the 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 ff .

outlook for the current financial year/forecast

Future macroeconomic situation

Economic experts are cautiously optimistic about the further development of the German economy in which MLP generates almost 1oo % of its revenue. Following a signifi cant rise in economic momentum in the second quarter, the Federal Ministry of Finance now anticipates that the economic recovery will become more robust during the second half of the year. Adopting a similar stance, the German Bundesbank considers the possibility of a relapse into a new recession during the current year or next year to be very unlikely. Consequently, the growth expectations for 2o1o have been revised upwards. The German government is now predicting economic growth for 2o1o of over 2 % (estimate end of 2oo9 was 1.4 %). The outlook for 2o11 remains unchanged with forecast growth in the gross domestic product (GDP) of 1.6 %.

This optimistic outlook is however based on the premise that the fi nancial problems of some of the EU states and the associated negative eff ects, particularly for the banking system, do not worsen. A further limiting factor could be the phasing out of the economic stimulus programmes in the industrialised nations.

The expected positive development should also lead to a further reduction in unemployment. Although at the end of June 2o1o some 3.2 million people in Germany were without work, experts now consider a fall to below the 3 million level by the end of the year to be possible.

Despite the improving economic outlook, private households have become rather more sceptical. According to a survey conducted by the opinion research institute Allensbach, only just over half of the German population were concerned about the crisis when asked in 2oo9. By the middle of 2o1o this fi gure had risen to three quarters.

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

Source: German Federal Bank

As far as the further development of MLP is concerned, the macroeconomic perspectives in Germany refl ect a mixed picture. On the one hand, the positive economic expectations point towards a pick-up in business. On the other hand, the private households have – probably due to the rapid pace of the crisis management – become rather more hesitant. This leads to the assumption that private clients will continue to exercise restraint with respect to the conclusion of longer-term old-age provision contracts and investments in longer-term wealth management concepts. Due to the mixed picture we still do not expect the economic environment to provide any notable stimulus for our business development. At best, there could be a gradual improvement in our private client business.

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 ff . During the fi rst half-year of 2o1o 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. Rising life expectancy and the increasing number of people in the age group over 65 necessitates further provision to secure income during old age through private and occupational pensions.

Despite the recent reforms within the German healthcare system we continue to anticipate rising demand for private full health insurance and supplementary health insurance. Although the reform has, for now, secured the fi nanceability of the system, this was primarily only achieved by increasing the premiums (also see section on "Health provision", page 7). This situation will further strengthen the willingness on the part of insurees to switch to private health insurance.

Our objective in wealth management is to further increase the volume of assets under management from private clients and institutional investors. Overall we expect the market to grow. For example, the monetary wealth of the German population has grown, on average, by 2.8 % in the last ten years, including the losses incurred during the most recent fi nancial crisis. In addition, we see further growth potential in our existing client base in this area. The winning of new wealth management clients in the institutional sector also off ers growth prospects.

In the near future we expect to see further regulatory steps concerning the sale of fi nancial services (see section on "Competition", page 8). Such measures will raise the market entry barriers and accelerate the consolidation within the industry. The level of competition among providers to secure the services of qualifi ed fi nancial consultants will also remain high.

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

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

Anticipated business development

In view of the previously described macroeconomic background and the development in our most important markets, we see no reason to amend the guidance we published at the end of March 2o1o in our Annual Report 2oo9. Overall, the framework conditions are likely to remain diffi cult during the next few months. Despite the brightening horizon in the fi rst half-year of 2o1o, the market is still quite a long way from the level witnessed before the outbreak of the far-reaching economic and fi nancial crisis. However, we expect to see a further signifi cant pickup in business, particularly in the traditionally important fourth quarter.

We do not expect the economic environment to provide any appreciable stimulus for our business development. Due to this diffi cult market environment we are only providing a qualitative forecast for our revenue up to 2o12. In our core areas of old-age provision and health insurance we expect stable revenue development this year, despite the persistence of diffi cult framework conditions. In 2o11 and 2o12 – in an improving macroeconomic environment – we intend to return to a growth path in those areas. In wealth management however, we expect to achieve an increase in revenue in the current fi nancial year, which will then continue during the following two years.

[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 and amortisation, other operating costs; without one-off eff ects and before acquisition-related cost increases) by € 1o million.

A further objective that MLP has set itself is – when the economic and fi nancial crisis subsides – to return to its accustomed strong level of profi tability and to almost double EBIT to 15 % by the end of 2o12.

Opportunities

Signifi cant changes to the opportunities resulting from the framework conditions, corporate strategic opportunities or business opportunities did not occur during the period under review. Relevant detailed explanations are contained in the Annual Report 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

Source: Deutsche Börse

[Figure 12] MLP shareholder structure

As at June 30, 2010* * Defi nition free fl oat Deutsche Börse As at June 30, 2008*

Development in the stock market

The development in the stock markets during the period under review was unsettled. At the end of the fi rst half-year of 2o1o the American Dow Jones index stood 7.7 % lower than at the start of the year – a development that can be attributed to the continuingly sluggish economic recovery in the USA. The German Dax index registered a fall of 1.4 %. The small gains from the fi rst quarter of 2o1o were lost again in the second quarter. This development was not foreseeable, as the German economy was able to recover from the crisis of 2oo9 surprisingly quickly and with considerable momentum. Investors remain sceptical as to whether the upswing will continue after the phasing out of government economic stimulus programmes. The EU debt crisis also negatively infl uenced the German stock market. This aspect was particularly refl ected in the development of the DAXsector Financial Services index which fell by 7.9 % compared to the start of the year. However, the MDAX index, on which the MLP share was listed until June 21, 2o1o rose by 4.3 %.

[Table 08] Key fi gures of the MLP share

All fi gures in € 1st half-year 2010 2009
Share price at the beginning of the quarter/year 8.27 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 7.31 8.06
Dividend for the previous year 0.25 0.28
Market capitalisation (end of reporting period) 788,586,264.78 869,494,568.28

The MLP share

During the fi rst half-year of 2o1o the MLP share fl uctuated within a price corridor between € 8.27 and € 6.21. The high of € 8.27 was reached on the fi rst trading day of the year. The closing price on June 3o, 2o1o stood at € 7.31, corresponding to a fall of 11.6 %. However, after the end of the reporting period the share rose again and climbed back to over € 8 by the end of July 2o1o.

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 tradeable 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.

Annual General Meeting approves € 0.25 dividend per share

At the Annual General Meeting on May 2o, 2o1o, the shareholders of MLP AG almost unanimously approved the proposal by the Executive and Supervisory Boards to pay a dividend of € o.25 per share for the fi nancial year 2oo9. In executing this decision MLP thus distributed a dividend sum of € 27.o million to its shareholders, corresponding to a distribution ratio of almost 1oo % with respect to earnings from continuing operations.

A total of around 6oo shareholders, representing approximately 8o % of the share capital, attended the Annual General Meeting. Further important resolutions that were passed included the approval of the Executive Board remuneration system, the buy-back of MLP shares and the appointment of Ernst & Young GmbH, as auditors for the current fi nancial year. These resolutions too were passed with a majority of more than 99 % of the votes.

Further information concerning the MLP Annual General Meeting is available on the Internet from our Investor Relations page at www.mlp-ag.com.

Income statement and statement of comprehensive income

[Table 09]

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

All fi gures in €'000 Notes 2nd quarter 2010 2nd quarter 20091 1st half-year 2010 1st half-year 20091
Revenue (5) 105,963 100,000 221,252 220,798
Other revenue 5,652 5,895 11,555 10,595
Total revenue 111,616 105,895 232,807 231,394
Commission expenses – 37,152 – 31,209 – 77,475 – 72,725
Interest expenses – 2,588 – 2,934 – 5,058 – 7,525
Personnel expenses (6) – 25,596 – 28,038 – 53,214 – 56,985
Depreciation and amortisation – 4,056 – 4,621 – 8,168 – 9,179
Other operating expenses (7) – 38,200 – 36,995 – 80,932 – 79,709
Earnings from shares accounted
for using the equity method 260 128 363 156
Earnings before interest and tax (EBIT) 4,284 2,227 8,323 5,427
Other interest and similar income 1,758 2,303 3,421 4,588
Other interest and similar expenses – 1,968 – 2,935 – 4,131 – 6,678
Finance cost (8) – 211 – 632 – 710 – 2,090
Earnings before tax (EBT) 4,073 1,595 7,613 3,336
Income taxes – 994 – 2,131 – 2,544 – 3,778
Earnings from continuing operations after tax 3,080 – 537 5,069 – 441
Earnings from discontinued operations after tax4 41 – 4,571 188 – 6,020
Net profi t 3,121 – 5,108 5,258 – 6,461
Of which attributable to
owners of the parent company 3,121 – 5,108 5,258 – 6,461
Earnings per share in €2
From continuing operations
basic 0.03 0.00 0.05 0.00
diluted3 0.03 0.00 0.05 0.00
From continuing and discontinued operations
basic 0.03 – 0.05 0.05 – 0.06
diluted3 0.03 – 0.05 0.05 – 0.06

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

2 Basis of calculation: Average number of shares at June 30, 2010: 107,877,738, potential shares (convertible debentures): 926,775

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

Due to a subsequent correction of a tax effect, the earnings from discontinued operations for the 1st quarter 2010 are € 434 thsd higher than reported

[Table 10]

Statement of comprehensive income for the period from January 1 to June 30, 2010

All fi gures in €'000 2nd quarter 2010 2nd quarter 20091 1st half-year 2010 1st half-year 20091
Net profi t 3,121 – 5,108 5,258 – 6,461
Other comprehensive income
Securities marked to market 652 – 1,227 2,354 – 974
Tax expense – 70 – 22 – 82 – 42
Other comprehensive income after tax 581 – 1,250 2,272 – 1,016
Total comprehensive income for the year 3,702 – 6,358 7,530 – 7,477
Total comprehensive income attributable to
owners of the parent company 3,702 – 6,358 7,530 – 7,477

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

Consolidated statement of fi nancial position

[Table 11]

Assets as at June 30, 2010

All fi gures in €'000 Notes June 30, 2010 Dec 31, 2009
Intangible assets 152,556 156,138
Property, plant and equipment 76,544 78,781
Investment property 11,312 11,432
Shares accounted for using the equity method 2,376 2,013
Deferred tax assets 2,817 2,969
Receivables from clients in the banking business 331,280 313,494
Receivables from banks in the banking business (9) 452,277 498,201
Financial investments (10) 239,505 192,389
Tax refund claims 16,673 33,059
Other accounts receivable and other assets (11) 102,228 132,088
Cash and cash equivalents 51,617 54,968
Total 1,439,185 1,475,532

[Table 12]

Liabilities and shareholders' equity as at June 30, 2010

Notes
All fi gures in €'000
June 30, 2010 Dec 31, 2009
Shareholders' equity
(12)
399,092 418,532
Provisions 44,862 52,383
Deferred tax liabilities 10,650 10,668
Liabilities due to clients in the banking business 814,352 750,282
Liabilities due to banks in the banking business 18,762 20,774
Tax liabilities 1,016 9,029
Other liabilities
(11)
150,450 211,816
Liabilities in connection with non-current assets held
for sale and disposal groups 2,049
Total 1,439,185 1,475,532

Condensed statement of cash fl ows

[Table 13]

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

All fi gures in €'000 1st half-year 20102 1st half-year 20091
Cash fl ow from operating activities 77,982 65,889
Cash fl ow from investing activities – 75,871 60,621
Cash fl ow from fi nancing activities – 29,141 – 30,228
Change in cash and cash equivalents – 27,030 96,282
Cash and cash equivalents at the end of the period 96,595 134,729

Thereof discontinued operations

All fi gures in €'000 1st half-year 20102 1st half-year 20091
Cash fl ow from operating activities – 3,062 369
Cash fl ow from investing activities – 50
Cash fl ow from fi nancing activities
Change in cash and cash equivalents – 3,062 319
Cash and cash equivalents at the end of the period 730

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

For the fi rst quarter of 2010, income taxes – in accordance with the previous expenses accounting method – amounting to € 1,564 thsd

were reclassifi ed within the operative cash fl ow from continuing operations to discontinued operations

[Table 14]

Condensed statement of cash fl ows for the period from April 1 to June 30, 2010

All fi gures in €'000 2nd quarter 2010 2nd quarter 20091
Cash fl ow from operating activities 34,683 10,581
Cash fl ow from investing activities – 27,160 21,849
Cash fl ow from fi nancing activities – 26,969 – 30,228
Change in cash and cash equivalents – 19,446 2,202
Cash and cash equivalents at the end of the period 96,595 134,729

Thereof discontinued operations

All fi gures in €'000 2nd quarter 2010 2nd quarter 20091
Cash fl ow from operating activities 1,689 – 157
Cash fl ow from investing activities – 11
Cash fl ow from fi nancing activities
Change in cash and cash equivalents 1,689 – 168
Cash and cash equivalents at the end of the period 730

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 1 5 6
Transactions with owners 1 5 – 30,201 – 30,195
Total comprehensive income – 1,016 – 6,461 – 7,477
As at June 30, 2009 107,862 142,089 – 1,113 139,418 388,256
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 2,272 5,258 7,530
As at June 30, 2010 107,878 142,184 699 148,333 399,092

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 2nd quarter 2010 2nd quarter 20091 2nd quarter 2010 2nd quarter 2009
Revenue 98,312 92,843 7,768 7,283
of which total inter-segment revenue 46 26 71 100
Other revenue 3,941 4,120 1,705 1,643
of which total inter-segment revenue 462 629
Total revenue 102,253 96,963 9,473 8,926
Commission expenses – 36,740 – 30,777 – 407 – 470
Interest expenses – 2,588 – 2,934
Personnel expenses – 18,653 – 20,420 – 5,971 – 6,806
Depreciation/amortisation and impairment – 2,711 – 3,190 – 586 – 615
Other operating expenses – 35,850 – 34,610 – 2,258 – 2,209
Earnings from shares accounted for using the equity method 260 128
Segment earnings before interest and tax (EBIT) 5,971 5,159 251 – 1,174
Other interest and similar income 91 444 1 9
Other interest and similar expenses – 225 – 1,615 – 22 – 62
Finance cost – 134 – 1,172 – 21 – 54
Earnings before tax (EBT) 5,837 3,987 230 – 1,228
Income taxes
Earnings from continuing operations after tax
Earnings from discontinued operations after tax 41 – 5,390
Net profi t

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

holding consolidation/other total
2nd quarter 2010 2nd quarter 2009 2nd quarter 2010 2nd quarter 20091 2nd quarter 2010 2nd quarter 20091
– 117 – 126 105,963 100,000
– 117 – 126 0 0
2,915 3,598 – 2,909 – 3,465 5,652 5,895
2,447 2,836 – 2,909 – 3,465 0 0
2,915 3,598 – 3,026 – 3,591 111,616 105,895
– 5 38 – 37,152 – 31,209
1 – 2,588 – 2,934
– 972 – 812 – 25,596 – 28,038
– 759 – 816 – 4,056 – 4,621
– 3,156 – 3,675 3,064 3,500 – 38,200 – 36,995
260 128
– 1,972 – 1,706 33 – 52 4,284 2,227
1,667 1,855 – 2 – 4 1,758 2,303
– 1,726 – 1,261 5 4 – 1,968 – 2,935
– 59 594 3 – 1 – 211 – 632
– 2,031 – 1,111 37 – 53 4,073 1,595
– 994 – 2,131
3,080 – 537
819 41 – 4,571
3,121 – 5,108

[Table 17]

Segment reporting (half-year comparison)

financial services feri
All fi gures in €'000 1st half-year 2010 1st half-year 20091 1st half-year 2010 1st half-year 2009
Revenue 205,804 206,197 15,644 14,805
of which total inter-segment revenue 103 82 94 122
Other revenue 8,469 7,807 2,633 2,942
of which total inter-segment revenue 903 1,243
Total revenue 214,274 214,004 18,278 17,747
Commission expenses – 76,738 – 72,100 – 808 – 710
Interest expenses – 5,059 – 7,527
Personnel expenses – 39,190 – 42,232 – 11,741 – 13,091
Depreciation/amortisation and impairment – 5,471 – 6,319 – 1,178 – 1,229
Other operating expenses – 76,932 – 72,031 – 4,522 – 4,900
Earnings from shares accounted for using the equity method 363 156
Segment earnings before interest and tax (EBIT) 11,247 13,951 29 – 2,182
Other interest and similar income 187 677 2 18
Other interest and similar expenses – 640 – 2,243 – 25 – 79
Finance cost – 453 – 1,566 – 23 – 61
Earnings before tax (EBT) 10,794 12,385 5 – 2,243
Income taxes
Earnings from continuing operations after tax
Earnings from discontinued operations after tax2 188 – 7,244
Net profi t
June 30, 2010 Dec 31, 2009 June 30, 2010 Dec 31, 2009
Segment assets 1,069,048 1,094,592 100,864 105,626

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

Due to a subsequent correction of a tax effect, the earnings from discontinued operations for the 1st quarter 2010 are € 434 thsd higher than reported

holding consolidation/other total
1st half-year 2010 1st half-year 2009 1st half-year 2010 1st half-year 20091 1st half-year 2010 1st half-year 20091
– 197 – 204 221,252 220,798
– 197 – 204 0 0
6,251 6,810 – 5,799 – 6,964 11,555 10,595
4,895 5,721 – 5,799 – 6,964 0 0
6,251 6,810 – 5,996 – 7,167 232,807 231,394
71 85 – 77,475 – 72,725
1 2 – 5,058 – 7,525
– 2,283 – 1,662 – 53,214 – 56,985
– 1,519 – 1,632 – 8,168 – 9,179
– 5,398 – 9,811 5,920 7,033 – 80,932 – 79,709
363 156
– 2,949 – 6,295 – 3 – 48 8,323 5,427
4,244 7,317 – 1,013 – 3,424 3,421 4,588
– 3,632 – 4,691 166 335 – 4,131 – 6,678
612 2,626 – 847 – 3,089 – 710 – 2,090
– 2,337 – 3,669 – 850 – 3,137 7,613 3,336
– 2,544 – 3,778
5,069 – 441
1,224 188 – 6,020
5,258 – 6,461
June 30, 2010 Dec 31, 2009 June 30, 2010 Dec 31, 2009 June 30, 2010 Dec 31, 2009
472,245 513,831 – 202,973 – 238,517 1,439,185 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. The interim accounts were subject to an independent auditor's review.

Apart from the exception 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 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 change with regard to the previous year's fi gures:

All fi gures in €'000 1st half-year 2009
adjusted
1st half-year 2009
as reported
+ / – of which
error correction
of which business
acquisition (ppa)
Total revenue 231,394 231,394
Depreciation/amortisation
and impairment – 9,179 – 8,758 – 421 – 421
Other operating expenses – 79,709 – 79,702 – 7 – 7
Earnings before interest and tax (EBIT) 5,427 5,855 – 428 – 7 – 421
Finance cost – 2,090 – 2,090
Earnings before tax (EBT) 3,336 3,764 – 428 – 7 – 421
Income taxes – 3,778 – 3,908 131 2 129
Earnings from continuing operations
after tax – 441 – 144 – 297 – 5 – 292
Earnings from discontinued operations
after tax – 6,020 – 6,020
Net profi t (total) – 6,461 – 6,164 – 297 – 5 – 292

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

• Amendments to IFRS 2 "Group cash-settled share-based payment transactions"

• Improvement to IFRSs 2oo9

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 half-year 2o1o MLP allocated € 3,o62 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 half-year 2oo9, € – 11 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.

[Table 18]

(4) Seasonal infl uences on the business operations

Particularly in the area of old-age provision, the fi nancial crisis remains the determining negative factor aff ecting the level of clients' demand. Due to seasonal infl uences on its business operations, the Group nevertheless anticipates a higher level of net profi t from continuing operations for the remainder of the fi nancial year than was achieved in the fi rst half-year.

(5) Revenue

[Table 19]
All fi gures in €'000 2nd quarter 2010 2nd quarter 2009 1st half-year 2010 1st half-year 2009
Old-age provision 59,707 60,067 118,568 122,953
Wealth management 18,803 15,904 37,127 33,069
Health insurance 13,746 9,109 26,605 22,787
Non-life insurance 3,781 3,442 20,177 18,672
Loans and mortgages 2,624 2,545 4,745 4,496
Other commission and fees 1,014 824 1,583 1,497
Commission and fees 99,676 91,892 208,805 203,474
Interest income 6,288 8,108 12,447 17,324
Total 105,963 100,000 221,252 220,798

(6) Personnel expenses/Number of employees

Personnel expenses decreased from € 56,985 thsd to € 53,214 thsd. The decrease is primarily due to the decline of the number of employees.

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

[Table 20]
June 30, 2010 June 30, 2009
of which part-time
employees
of which part-time
employees
Financial services 1,417 146 1,713 327
Feri 251 65 267 67
Holding 14 1 11 1
Total 1,682 212 1,991 395

(7) Other operating expenses

[Table 21]

All fi gures in €'000 2nd quarter 2010 2nd quarter 20091 1st half-year 2010 1st half-year 20091
IT operations 11,625 10,270 23,313 20,362
Rental and leasing 3,954 4,374 8,445 8,930
Consultancy 4,256 3,286 7,799 10,229
Administration operations 3,662 3,597 7,161 7,204
External services – banking business 1,847 2,289 3,642 4,170
Representation and advertising 1,693 2,631 3,509 4,810
Depreciation/impairment on other accounts receivable
and other assets 1,681 1,032 3,477 1,983
Expense for commercial agents 1,154 1,340 2,671 2,345
Premiums and fees 1,032 1,427 2,656 3,038
Training and further training 697 482 2,605 2,737
Depreciation/impairment on receivables from clients
in the banking business 872 349 2,171 1,271
Travel expenses 931 1,487 1,834 2,724
Insurance 1,084 898 1,815 1,507
Entertainment 558 682 1,643 1,972
Maintenance 424 444 804 865
Audit 254 255 600 515
Other personnel costs 280 272 577 645
Expenses from currency translation 9 22 36 51
Expenses from disposal of assets 19 – 11 29 256
Sundry other operating expenses 2,169 1,871 6,144 4,093
Total 38,200 36,995 80,932 79,709

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 administration operations contain costs relating to building operations, offi ce costs as well as communication costs. 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 2nd quarter 2010 2nd quarter 2009 1st half-year 2010 1st half-year 2009
Other interest and similar income 1,758 2,303 3,421 4,588
Interest from fi nancial instruments – 1,655 – 2,789 – 3,506 – 6,385
Accrued interest on pension
provisions
– 313 – 146 – 625 – 293
Other interest and similar
expenses – 1,968 – 2,935 – 4,131 – 6,678
Finance cost – 211 – 632 – 710 – 2,090

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 € 452,277 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 June 30, 2010 Dec 31, 2009
Available for sale
Debt securities and holdings in investment funds 38,588 33,424
Investments 3,450 3,398
Held-to-maturity securities 72,174 45,385
Loans and receivables 125,293 110,183
Total 239,505 192,389

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 half-year of 2o1o.

(12) Shareholders' equity

Share capital

The share capital consists of 1o7,877,738 no-par-value shares (December 31, 2oo9: 1o7,877,738 no-par-value shares). In the fi rst half-year 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 amounting to € o.28 per share in the second quarter 2oo9.

(13) Discontinued operations

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

[Table 24]

All fi gures in €'000 2nd quarter 2010 2nd quarter 2009 1st half-year 2010 1st half-year 2009
Revenue 1,463 3,311
Other revenue 95 126
Total revenue 1,558 3,438
Commission expenses – 684 – 1,527
Personnel expenses – 1,559 – 2,918
Depreciation and amortisation – 3
Other operating expenses – 1,135 – 2,335
Earnings before interest and tax (EBIT) – 1,821 – 3,345
Other interest and similar income 3 6
Other interest and similar expenses – 1
Finance cost 3 5
Earnings before tax (EBT) – 1,817 – 3,340
Income taxes 89 84
Operating profi t – 1,728 – 3,256
Earnings from the sale of operations before tax 63 – 1,318 – 242 – 1,321
Income taxes1 – 22 – 1,525 430 – 1,443
Earnings from the sale of operations after tax 41 – 2,843 188 – 2,764
Earnings from discontinued operations after tax 41 – 4,571 188 – 6,020
Earnings per share in €
From discontinued operations
basic 0.00 – 0.05 0.00 – 0.06
diluted 0.00 – 0.05 0.00 – 0.06

Due to a subsequent correction of a tax effect, the earnings from discontinued operations for the 1st quarter 2010 are € 434 thsd higher than reported

(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 June 30, 2010 June 30, 2009
Cash and cash equivalents 51,617 47,356
Cash and cash equivalents, contained in non-current assets
held for sale and disposal groups 730
Loans < 3 months 45,000 90,000
Liabilities to banks due on demand – 22 – 3,357
Cash and cash equivalents 96,595 134,729

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. This is determined on 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 € 12.1 million year on year to € 78.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 invested.

The cash fl ow from fi nancing activities contents the paid dividends and 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 € 11,125 thsd (Dec 31, 2oo9: € 23,3oo thsd) as well as irrevocable credit commitments of € 25,3o4 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, August 11, 2o1o

MLP AG

Executive Board

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

Review report

To MLP AG

We have reviewed the interim condensed 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, and the interim condensed group management report of MLP AG, Wiesloch, for the period from January 1, 2o1o to June 3o, 2o1o, which are part of the six-monthly fi nancial report pursuant to Sec. 37w WpHG ["Wertpapierhandelsgesetz": German Securities Trading Act]. The preparation of the interim condensed consolidated fi nancial statements in accordance with IFRSs on interim fi nancial reporting as adopted by the EU and of the group management report in accordance with the requirements of the WpHG ["Wertpapierhandelsgesetz": German Securities Trading Act] applicable to interim group management reports is the responsibility of the Company's management. Our responsibility is to issue a report on the interim condensed consolidated fi nancial statements and the interim group management report based on our review.

We conducted our review of the interim condensed consolidated fi nancial statements and the interim group management report in accordance with 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 to obtain a certain level of assurance in our critical appraisal to preclude that the interim condensed consolidated fi nancial statements are not prepared, in all material respects, in accordance with IFRSs on interim fi nancial reporting as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the applicable provisions of the WpHG. A review is limited primarily to making inquiries of company personnel and applying analytical procedures and thus does not provide the assurance that we would obtain from an audit of fi nancial statements. In accordance with our engagement, we have not performed an audit and, accordingly, we do not express an audit opinion.

Based on our review nothing has come to our attention that causes us to believe that the interim condensed consolidated fi nancial statements are not prepared, in all material respects, in accordance with IFRSs on interim fi nancial reporting as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the WpHG applicable to interim group management reports.

Stuttgart, August 11, 2o1o

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

Müller-Tronnier Frey Wirtschaftsprüfer Wirtschaftsprüfer [German Public Auditor] [German Public Auditor]

Assurance by the legal representatives

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 11, 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 Effects of the fi nancial crisis on the most important
saving targets of the German population
07 Figure 03 Increasing interest in private supplementary health
insurance
08 Figure 04 Infl ows and outfl ows in various types of mutual
investment funds in Germany in H1 2010
09 Figure 05 Total revenue from continuing operations
10 Figure 06 EBIT from continuing operations
18 Figure 07 Total revenue and EBIT
for the fi nancial services segment
19 Figure 08 Total revenue and EBIT
for the Feri segment
21 Figure 09 Expected economic growth in Germany
23 Figure 10 Development of the EBIT margin from 2005 – 2012

Cover

Table 01 MLP key fi gures

Management report

11 Table 02 Earnings development from continuing operations
13 Table 03 Assets as at June 30, 2010
14 Table 04 Liabilities and shareholders' equity
as at June 30, 2010
15 Table 05 Condensed statement of cash fl ows in continuing
operations
16 Table 06 Number of employees
22 Table 07 Anticipated development of revenue
from 2010 – 2012

Investor Relations

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

Notes

30 Table 16 Segment reporting (quarterly comparison)
32 Table 17 Segment reporting (half-year 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

Investor Relations

24 Figure 11 MLP share, MDAX und DAXsector Financial Services
in the fi rst half-year 2010
24 Figure 12 MLP shareholder structure

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)

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]

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)

Financial calendar 2010 Financial calendar 2011

August 12 Publication of fi nancial results for the fi rst half-year and the second quarter 2o1o

September 22 UniCredit German Conference, Munich

October 6-7 Roadshow, USA

November 11 Publication of fi nancial results for the third quarter 2o1o

November 17 WestLB German Conference, Frankfurt

December 1-2 Roadshow, Europa

Januar 17-19 Cheuvreux German Conference, Frankfurt

June 10 Annual General Meeting, Mannheim

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 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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