MLP SE — Investor Presentation 2016

Jun 30, 2016

The MLP Group – The partner for all financial matters

The MLP Group

• 1. MLP at a glance
• 1. Key Financials 2015
• 1. Strategy & Outlook
• 1. Appendix

The MLP Group at a glance

The views and expectations of our clients always represent the starting point in each of these fields

• We examine the offers of all relevant product providers in the market
• We then present our clients with suitable options so that they can make the right financial decisions

The process based on scientifically substantiated market and product analyses.

MLP Group – An Overview

Clients		• Around 511,000 private clients (families) in the mass affluent segment of the market target groups: graduates (i.e. physicians, solicitors, engineers and economists) • Around 18,300 corporate and institutional clients					*as of March 31, 2016
	Old-age provision		Brokered premium sum for new business totalled €	Occupational pension provision accounted for around 12% of this figure.	3.5 billion in 2015.			Share of revenue '15
s a e								42%
ar s s e n	Wealth Management	€	29.3 billion in assets under management as at March 31, 2016 in business with mass affluent 32% clients, HNWI and institutional investors.
si u b n ai	Non-life insurance	Business field expanded by acquisition of DOMCURA Group in 2015. 11% More that € 350 million premium volume within the MLP Group.
M	Health insurance	Private health insurance, supplementary private health insurance, long-term care, occupational health insurance, statutory health insurance.	9%
Top Financials FY 2015		Total revenue: Pro forma EBIT*: € EBIT: Net profit:	€ 557.2 mil. 32.5 mil. € 30.7 mil. € 19.8 mil.	Equity Ratio: Core Capital Ratio: 14.3% Consultants:	22.0% 1,935	Dividend per share: Return on Equity: Employees (9M'15):	€ 0.12 5.1% 1,803	*adjusted for the aquisition of DOMCURA
MLP Share		Shares outstanding: 109,334,686		Free Float: 49.81% (Definition on the German stock exchange)		Average daily trading volume: 81,000 (Xetra, 12-month average as at end of December 2015)

Attractive dividend policy & stable shareholder structure

Dividend policy	Pay-out ratio: 50% - 70% of net profit	Return on dividend:	4.0% 2010	11.8% 6.4% 2011 2012	3.1% 2013	4.6% 2014	3.3% 2015
Shareholder structure	Dr. h. c. Manfred Lautenschläger 23.22% HDI 9.36% Barmenia 5.49% Allianz SE 6.18% Angelika Lautenschläger 5.94% Freefloat (Def. Deutsche Börse) 49.81% [FMR LLC: 7.00%, Schroders PLC: 2.99%]		Freefloat		Barmenia Allianz SE HDI Pensionskasse	Dr. h. c. Manfred Lautenschläger Angelika Lautenschläger
Research coverage	Equinet/ESN Bankhaus Lampe Main First Independent Research HSBC Global Research	Accumulate Hold Underperform Hold Hold	PT 3.80 PT 3.50 PT 3.60 PT 2.90 PT 3.20

Fundamental changes in the market

Trend

Client behaviour

• Fundamental scepticism on the part of clients towards the financial industry since the outbreak of the financial crisis
• Quick and inexpensive information possibilities for clients via the internet
• Distinct desire to make their own financial decisions

Demographics

• Rising life expectancy and low birth rate lead to a significantly ageing society
• Increasing pressure on state social welfare systems
• Number of people in work constantly falling

Regulation (e.g. IMD II, MiFID II, LVRG)

• Since 2004 and especially since 2008 intensive regulation
• In addition to impacting at the product level, regulation also particularly applies to the training of consultants, documentation and transparency

Effects

• Intense competition
• Quality of consulting services and differentiation
• from the competition continue to gain in significance
• Contract conclusion for simple products sometimes takes place without consultation
• Great need for private and occupational old-age provision as well as private health insurance
• Recruiting: Good labour market perspectives leads to a "war of talents" for welleducated/trained individuals
• Significant rise in administrative activities burdens productivity
• Increase in fixed costs for training, IT systems and administration
• Quality becoming an increasingly important aspect

The MLP Group

• 1. MLP at a glance
• 1. Key Financials 2015
• 1. Strategy & Outlook
• 1. Appendix

Growth in virtually all fields of consulting

Strategic portfolio significantly broadened

Clear business model Occupational pension provision	Wealth management	Real estate	Expansion of non-life insurance
2005 2004 Sale of own Foundation of Occupational insurance subsidiaries Pension Provision division 2008 Acquisition of TPC	2006 MLP buys shares in FERI AG 2011 MLP acquires all shares in FERI as planned	2011 Start of real estate portfolio 2014 Expansion of real estate portfolio	2015 Acquisition of DOMCURA Group • Underwriting agency • Further strategically relevant business segment tapped
			• Significant potential with existing business

FY 2015: Total revenue rises to € 557.2 million

Total revenue FY

€ million

Growth in virtually all consulting areas

Revenue

€ million

		2014/2015 in %	2015	2014	Q4 2015	Q4 2014	 in %
Old-age provision	-10.0		215.7	239.7	87.8	106.6	-17.6
Wealth management		12.9	166.0 117,9	147.0	44.7	41.3	8.2
Health insurance		5.5	45.9	43.5	9.2	13.9	-33.8
Non-life insurance		58.7	54.9	34.6	21.3	2.7	>100.0
Loans and mortgages*		19.1	16.2	13.6	5.1	4.5	13.3
Other commission and fees		85.7	15.6	8.4	5.1	3.0	70.0
Revenue from the interest rate business	-6.6		21.4	22.9	5.3	5.8	-8.6

*Excluding MLP Hyp

Assets under management continue to grow

Wealth management

Assets under management, MLP Group

Old-age provision Premium sum of MLP's new business

as at 31 December

Number of consultants rises slightly

Client consultants

New clients, gross

Client counting method will reflect the Group structure in a better way

Presentation of client numbers as of Q1 2016

Number		Private clients (families)	• Combined individuals: Partner relationship or parents-child unit and allocated to the same client consultant • System applies for MLP and the relevant subsidiaries FERI and ZSH
of individual clients		Corporate and institutional clients	• Corporate clients in occupational pension provision • Institutional clients at FERI • Sales partners at DOMCURA • Freelance professionals such a doctors as employers

FY 2015: Pro forma EBIT amounts to € 32.5 million

Income statement

€ million	Q4 2015	Q4 2014	2015
Total revenue	187.7	186.4	557.2	531.1
Pro forma EBIT*	24.2	29.6	32.5	39.0
EBIT	23.3	29,6	30.7	39.0
Finance cost	-0.4	-1.2	-2.8	-1.3
EBT	22.9	28.4	28.0	37.6
Taxes	-6.8	-6.6	-8.2	-8.7
Net profit	16.1	21.8	19.8	29.0
EPS in euros (diluted/basic)	0.15	0.20	0.18	0.27

²⁰¹⁴ Net profit 2015 based on an assumed acquisition of DOMCURA with effect from Jan 1, 2015: € 23.3 million

Already reported one-off effects from Q3/2015:

• One-off charge to the financial result (€ -2.0 million)
• One-off extra tax expense (€ -1.1 million)

*adjusted for the acquisition of DOMCURA

Core capital ratio of 14.3 %

€ million

	Dec 31, 2015	Dec 31, 2014
Intangible assets	174.5	156.2
Financial assets	147.9	145.3
Cash and cash equivalents	77.5	49.1
Other receivables and assets	112.5	117.7
Shareholders' equity	385.8	376.8
Equity ratio	22.0 %	23.2 %
Other liabilities	140.2	117.8
Total	1,752.7	1,624.7

• Core capital ratio: 14.3 % (15.6 %)
• Equity ratio: 22.0 % (23.2 %)
• Return on equity: 5.1 % (7.7 %)

Dividend of 12 cents – dividend yield: 3,3 %

Dividend per share

Dividend yield*

Distribution rate: 56 %**

• At the same time, capital is required for:
• acquisitions
• capital expenditure
• capital management (Basel III)
• Unchanged planned distribution rate: 50 % to 70 % of the net profit for the period

The MLP Group

• 1. MLP at a glance
• 1. Key Financials 2015
• 1. Strategy & Outlook
• 1. Appendix

Strategic agenda 2016

Significant increase in consolidation within the market due to Life Insurance Reform Act (LVRG)

Number of insurance intermediaries in Germany

Effects of the Life Insurance Reform Act (LVRG)

• Quality of consultancy and portfolio is even more important
• Sale organisations with a high cancellation rate lose trail commissions
• Major challenges for pyramid sales organisations

Source: DIHK, entries in the Insurance Intermediary Register

Positive effects on MLP through DOMCURA

DOMCURA acquisition: targeted further development within the MLP Group

New solution for MLP clients in the non-life insurance sector: complete protection with liability insurance, accident insurance, etc.

Further development of the DOMCURA business with other market actors (e. g. brokers)

Expansion of the corporate client business through DOMCURA commercial and industrial brokers

Recruiting offensive to be continued

Further training grants and allowances for easing transition to self-employment are bearing fruit

Further measures:

• Introduction of a master's course in order to increase attractiveness for bachelor's graduates
• Intensification of recruiting activities via online media
• Continuation of internship programme
• Continuation of the strategy of opening new offices in the university segment

Master of Financial Planning Steinbeis School of Management and Innovation (SMI)

• Widespread recognition of MLP training
• Very high level of flexibility for participants

Digital footprint significantly expanded

MLP Websites relaunched mlp.de mlp-financify.de 180 sites of branches 2,000 client consultant profiles 7 million visits p.a

First online policy sales

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Page 26 June/July 2016

Further enhancing our digital approach

More online policy sales

MLP Financepilot further developed Scan-to-bank (easy payment order) Paydirekt (B2C) SecureGo WhatsCash (C2C) Further companies with basic data

Client portal One login Dashboard Personal Finance Management (PFM)

New kinds of support through expansion of Customer Service Centre (CSC)

Cost management tightened further

Administrative expenses* 2008 – 2017 (planned)

* Defined as personnel expenses, depreciation and amortisation as well as other operating expenses

**Allowances for losses are a seperate item in the income statement as of this year ***Assumptions: completely realised in administrative expenses

Outlook

Qualitative assessment of the development of sales revenues

	2016	2017
Revenue from old-age provision	0	0
Revenue from health insurance	+	0
Revenue from wealth management	+	+
Revenue from non-life insurance	++	+

very positive: ++, positive: +, neutral: 0, negative: -, very negative: --

(in each case compared to the previous year)

• For 2016 MLP expects an operating EBIT (before one-off effects) slightly above 2015 g

• Compared to 2015 MLP anticipates a significant increase in EBIT from 2017 onwards g

• In view of the external conditions the year 2015 is additional proof that the further development of the business model is increasingly taking effect.

• MLP will further accelerate the transformation in 2016. The Group's cost management will be tightened even further to this end. Alongside the successful growth initiatives, MLP is checking opportunities for inorganic growth.
• On this basis the level of earnings is to significantly rise again from 2017.

Contact

Andreas Herzog Head of Investor Relations and Financial Communications

Alte Heerstr. 40 69168 Wiesloch Germany

Tel.: +49 (0) 6222 • 308 • 8310 Fax: +49 (0) 6222 • 308 • 1131 investorrelations@mlp.de

www.mlp-ag.com

The MLP Group

• 1. MLP at a glance
• 1. Key Financials 2015
• 1. Strategy & Outlook
• 1. Appendix

Q1/2016: Positive early indicators at the start of the year

Total revenue Q1

• Operating EBIT: € 8.8 million (Q1 2015: € 7.0 million)
• Positive early indicators for further revenue development

Q1/2016: In non-life business MLP is benefiting from the acquisition of DOMCURA

Revenue

[in € million]

	Q1 2016	Q1 2015	Δ in %
Old-age provision	36.2	42.0	-14
Wealth management	38.9	40.7	-4
Health insurance	11.8	11.8	0
Non-life insurance	50.7	20.1	>100
Loans and mortgages*	3.6	3.2	13
Other commissions and fees	2.4	2.5	-4
Interest income	5.2	5.6	-6

Q1/2015:

• Revenue old-age provision in Q1/2015 positively influenced by a one-time effect

Q1/2016:

• Revenue contribution DOMCURA of around € 30.5 million

*excluding MLP Hyp

Q1/2016: Further broadened revenue mix

Revenue from commissions and fees Q1 2016: € 143.6 million (€ 120.3 million)

Q1/2016: Operating EBIT at € 8.8 million

Income statement

€ million

	Q1 2016	Q1 2015
Total revenue	152.4	130.0
Operating EBIT*	8.8	7.0
EBIT	8.7	7.0
Finance cost	-0.1	-0.2
EBT	8.6	6.9
Taxes	-2,4	-1,6
Group net profit	6,2	5.2
EPS in € (diluted/undiluted)	0,06	0.05

Q1/2016:

• One-off expenses within the scope of the efficiency measures: € 0.1 million

*before one-off exceptional costs

Q1/2016: Core capital ratio: 13.5 %

€ million

	Mar 31, 2016	Dec 31, 2015
Intangible assets	173.9	174.5
Financial assets	158.8	147.9
Cash and cash equivalents	133.4	77.5
Other receivables and assets	94.1	112.5
Shareholders' equity	387.9	385.8
Equity ratio	21.6%	22.0%
Other liabilities	163.0	140.2
Total	1,799.2	1,624.7

• Core capital ratio: 13.5 %

Equity ratio: 21.6 %

Q1/2016: Assets under management continue to grow

Wealth management

Assets under management, MLP Group

Old-age provision Premium sum of MLP's new business

Q1/2016: MLP attracts 4,200 new private clients

Gross number of new clients (families) Consultants

DOMCURA: Underwriting agency selects the appropriate insurer from the marketplace