MLP SE

Earnings Release • Feb 27, 2014

Frankfurt, 27th February 2014

Agenda

• 1. Overview 2013 Dr. Uwe Schroeder-Wildberg, CEO
• 1. Financials 2013 Reinhard Loose, CFO
• 1. Strategy, Outlook and Summary Dr. Uwe Schroeder-Wildberg, CEO
• 1. Questions & Answers
• 1. Overview 2013 Dr. Uwe Schroeder-Wildberg, CEO
• 1. Financials 2013 Reinhard Loose, CFO
• 1. Strategy, Outlook and Summary Dr. Uwe Schroeder-Wildberg, CEO
• 1. Questions & Answers

Overview 2013

• 2013 was a difficult year for the first time MLP experienced simultaneous, market-related decreases in two core business fields
• New all-time highs in wealth management and in loans and mortgages as well as growth in non-life insurance
• Despite the even greater market burdens, MLP generates substantial profits – strategic further development pays off
• Further slight decrease in administration costs through strict efficiency management – despite additional investments
• Executive Board proposes a dividend of 16 cents per share pay-out ratio: 68 percent

Continuingly difficult market environment in health insurance and in old-age provision

2013

Health insurance market: Decrease in new business for full insurance

Source: PKV-Verband (German Association of Private Health Insurers) Source: BMAS 2013

to further extend level of private old-age provision

Not planning

37% 38% 42% 47% 2010 2011 2012 2013 Base: Working people in Germany aged 16 and above

Source: Postbank Study "Altersvorsorge in Deutschland 2013/2014"

Old-age provision market: First decrease in Riester policies

Market:

Year-on-year comparison new contracts 2013

Source: GDV 2014

Numerous initiatives to further strengthen MLP

2013

Cost management above target despite one-off future investments
Recruiting strengthened through new entry programmes for consultants
New branches opened in the university business segment
Additional support for consultants through MLPdialog service centre
New consultant application and new IT workplace ready to roll out

• 1. Overview 2013 Dr. Uwe Schroeder-Wildberg, CEO
• 1. Financials 2013 Reinhard Loose, CFO
• 1. Strategy, Outlook and Summary Dr. Uwe Schroeder-Wildberg, CEO
• 1. Questions & Answers

Total revenue: € 501.1 million in 2013

Continuation of very positive development in wealth management

Revenue

in € million

	Q4 2012	Q4 2013	Δ in %	2012	2013	Δ in %
Old-age provision	135.0	88.3	-34.6	287.3	219.9	-23.5
Wealth management	34.2	37.7	10.2	117.9	138.1	17.1
Health insurance	18.4	11.5	-37.5	63.9	47.8	-25.2
Non-life insurance	4.3	5.4	25.6	31.1	32.5	4.5
Loans and mortgages*	4.6	4.7	2.2	13.4	14.5	8.2
Other commissions and fees	1.9	2.0	5.3	4.6	4.9	6.5
Interest income	6.0	5.5	-8.3	26.6	22.8	-14.3

* Excluding MLP Hyp

Assets under management rise to € 24.5 billion

Assets under management

Growth in non-life insurance as well as in loans and mortgages

Revenue: commissions and fees

in € million

	Q4 2012	Q4 2013	Δ in %	2012	2013	Δ in %
Old-age provision	135.0	88.3	-34.6	287.3	219.9	-23.5
Wealth management	34.2	37.7	10.2	117.9	138.1	17.1
Health insurance	18.4	11.5	-37.5	63.9	47.8	-25.2
Non-life insurance	4.3	5.4	25.6	31.1	32.5	4.5
Loans and mortgages*	4.6	4.7	2.2	13.4	14.5	8.2
Other commissions and fees	1.9	2.0	5.3	4.6	4.9	6.5
Interest income	6.0	5.5	-8.3	26.6	22.8	-14.3

* Excluding MLP Hyp

MLP benefits from broad-based revenue mix

26,300 new clients – 1,998 consultants at the end of 2013

New clients

Number of consultants

Q4/2013: 7,400 new clients

Administration costs slightly reduced – despite one-off exceptional costs of € 8 million

Administration costs*

in € million

* Personnel expenses, depreciation and amortisation, other operating expenses **adjusted for one-off exceptional costs

EBIT: € 32.8 million in 2013

Income Statement*

in € million

	Q4 2012*	Q4 2013	2012*	2013
Total revenue	212.8	162.3	568.0	501.1
EBIT	47.5	20.5	73.9	32.8
Finance cost	0.3	0.2	1.0	0.3
EBT	47.8	20.7	74.9	33.1
Taxes	-13.6	-4.7	-22.0	-7.6
Net profit	34.2	16.0	52.9	25.5
EPS in € (diluted)	0.32	0.15	0.49	0.24

*Previous year's values adjusted

Return on equity: 6.6 %

in € million
	31/12/2012*	31/12/2013
Intangible assets	141.7	155.3	 Equity ratio:
Financial investments	137.1	146.1	24.4 %
Cash and cash equivalents	40.7	46.4	6.6 %
Other receivables and other assets	139.7	109.2
			16.3 %
Shareholders' equity	384.2	374.5
Equity ratio	25.7 %	24.4 %
Other liabilities	130.7	106.6
Total	1,493.5	1,536.9

Return on equity:

Core capital ratio:

* Previous year's values adjusted

Executive Board proposes dividend of 16 cents – pay-out ratio: 68 percent

Dividend per share

• Pay-out ratio: 68 percent
• At the same time capital is required for:
• Acquisitions
• Investments
• Capital management (Basel III)

• In future too, pay-out ratio of 60 to 70 % of Group net profit

• 1. Overview 2013 Dr. Uwe Schroeder-Wildberg, CEO
• 1. Financials 2013 Reinhard Loose, CFO
• 1. Strategy, Outlook and Summary Dr. Uwe Schroeder-Wildberg, CEO
• 1. Questions & Answers

Diverse regulatory activities – MLP is well prepared

Basel III / Capital Requirements Directive IV	• EU directive and regulations in force since July 2013. New regulations concerning appropriate capitalisation apply from January 2014. • Continuous strengthening of MLP's capital base in order to ensure maintenance of the currently comfortable equity capital situation.
Act on Promoting and Regulating fee-based Advice on Financial Instruments ("Honoraranlageberatungsgesetzt")	• The German government has decided to introduce an occupational profile for fee-based consultants in wealth management (introduction in July 2014) and is currently drawing up legislation prior to the implementation of the EU directive MiFiD II. • MLP clients are fully credited with kickbacks that MLP receives from investment companies for the brokerage of investment assets (flat fee) – MLP thus already fulfils the main requirement for registration as a fee-based advisor. Further details (such as the handling of existing business) will be clarified in the pending directive.
MiFiD II	• Decided upon at EU level in trialogue. The directive requires that "independent advisory services" in the wealth management area a) have access to a sufficient number of products available in the market AND b) do not take in any commissions from Third Parties.  Expected transposition into national law: 2017 – already largely covered by the Act on Promoting and Regulating fee-based Advice on Financial Instruments in Germany.
IMD II	• IMD II constitutes a revision of an EU level directive for the insurance area which pursues analogous aims to MiFiD II. • No agreement has yet been reached with respect to the actual composition of this directive. No final decisions are expected to be taken until after the European elections.  Expected transposition into national law: 2017 at the earliest.

Growth initiatives for the future

Around € 36 million invested in the further development of our technology leadership

Balance sheet investments – MLP Group

Base scenario still sees rise in EBIT to € 65 million in 2014

Outlook

Administration costs Revenue

	2014	2015
Revenue Old-age Provision	+	0
Revenue Health Insurance	+	+
Revenue Wealth Management	+	+

positive: +, neutral: 0, negative: -

Forecast base scenario:

EBIT of around € 65 million in 2014 and a slight increase in 2015

Significant increase in earnings expected in all scenarios

Outlook

	Environment	Assumptions	EBIT
Upper Scenario	Significant improvement in the market environment	• Hesitancy towards capital market-related provision products largely disappears • Health insurance develops very positively throughout the market • New areas of potential through real estate brokerage • Disappearance of the negative unisex effect from 2013	~ € 75 m
Base Scenario	Initial improvement in the framework conditions	• Opportunities for products with minor capital market component (long term care pension, occupational disability, occupational provision) • Slight improvement for capital market-related provision products – especially through new guarantee concepts • Reduction of uncertainties in health insurance • New areas of potential through real estate brokerage • Disappearance of the negative unisex effect from 2013	~ € 65 m
Lower Scenario	Continued hesitancy on the part of clients	• Critical public debate, such as a reduction of the guaranteed interest rate for life insurance and pension insurance policies, leads to similar hesitancy as witnessed in 2013 • Reduction of uncertainties in health insurance • New areas of potential through real estate brokerage • Disappearance of the negative unisex effect from 2013	~ € 50 m
Administration costs 2014: ~ € 255 million

Summary

• 1. Difficult financial year 2013 shows the importance of the initiated further development of the company and of the cost management programme implemented during the past few years.
• 1. MLP will vigorously push ahead with the transformation. All growth initiatives are aimed at making MLP more independent of short-term developments.
• 1. Outlook for 2014 is cautiously optimistic, despite the continuance of major challenges.
• 1. Overview 2013 Dr. Uwe Schroeder-Wildberg, CEO
• 1. Financials 2013 Reinhard Loose, CFO
• 1. Strategy, Outlook and Summary Dr. Uwe Schroeder-Wildberg, CEO
• 1. Questions & Answers

Frankfurt, 27th February 2014