MLP SE — Investor Presentation 2016

Mar 10, 2016

The MLP Group – The partner for all financial matters

Management Presentation

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 859,000 private clients in the mass affluent segment of the market target groups: graduates (i.e. physicians, solicitors, engineers and economists) • Over 200 private clients in the HNWI market & over 5,000 corporate clients, employers and institutional clients
	Old-age provision		Share of revenue '15
s a e ar s s e n si u b n ai		Occupational pension provision accounted for around 12% of this figure.	42%
	Wealth Management	€	29.0 billion in assets under management as at December 31, 2015 in business with mass affluent clients, HNWI and institutional investors.
	Non-life insurance	More that €	Business field expanded by acquisition of DOMCURA Group in 2015. 11% 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% 4.6% 3.1% 3.3% 2011 2012 2013 2014 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	Dr. h. c. Manfred Lautenschläger Angelika Lautenschläger Barmenia Allianz SE HDI Pensionskasse
Research coverage	Equinet/ESN Buy Bankhaus Lampe Hold Main First Independent Research Hold HSBC Global Research Hold	PT 3.50 PT 3.50 Underperform PT 3.60 PT 2.90 PT 3.00

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

Key facts on business development

• In 2015 MLP profited from the broadening of the revenue basis more than ever before.
• Growth in virtually all consulting fields old-age provision remains very difficult due to market conditions.
• MLP generates solid profits despite challenging framework conditions.
• MLP is further tightening its cost management in order to produce sustainable growth again from 2017.

Difficult market environment in old-age provision persists

Percentage of people who make no monthly savings for old-age provision:

Source: Deutscher Sparkassen- und Giroverband financial group, Wealth Barometer 2011–2015

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 %		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

Own funds 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 %)

Executive Board proposes dividend of 12 cents – dividend yield: 3,3 %

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

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 Financial Planning Communication Mandatory modules Selective modules Selective modules

Business Administration Leadership

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

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

• 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

Page 33 March/April 2016

Consolidated balance sheet MLP Group

Assets as at December 31, 2015

Liabilities and shareholder's equity as at December 31, 2015

All figures in € '000	Dec 31, 2015	Dec 31, 2014
Intangible assets	174,504	156,182
Property, plant and equipment	65,745	66,037
Investment property	-	7,262
Shares accounted for using the equity method	3,481	2,772
Deferred tax assets	7,033	6,728
Receivables from clients from the banking business	542,696	495,569
Receivables from banks from the banking business	600,339	559,316
Financial investments	147,916	145,276
Tax refund claims	14,893	18,743
Other receivables and other assets	112,531	117,665
Cash and cash equivalents	77,540	49,119
Non-current assets held for sale	6,040	-
Total	1,752,719	1,624,668

All figures in € '000	Dec 31, 2015	Dec 31, 2014
Equity	385,753	376,795
Provisions	86,536	92,049
Deferred tax liabilities	10,549	7,404
Liabilities towards clients from the banking business	1,102,569	1,007,728
Liabilities towards banks from the banking business	23,095	17,380
Tax liabilities	4,006	5,531
Other liabilities	140,211	117,780
Total	1,752,719	1,624,668

Income statement for the period from January 1 to December 31, 2015

All figures in € '000	Q4 2015	Q4 2014	2015	2014
Revenue	178,434	177,819	535,651	509,727
Other revenue	9,251	8,618	21,529	21,378
Total revenue	187,685	186,437	557,180	531,105
Commission expenses	-86,158	-84,030	-253,584	-233,633
Interest expenses	-564	-563	-1,921	-2,838
Personnel expenses	-32,465	-28,832	-113,457	-105,964
Depreciation and amortisation	-3,308	-3,341	-15,113	-13,417
Other operating expenses	-42,330	-40,392	-144,234	-137,394
Earnings from shares accounted for using the equity method	465	334	1,836	1,127
Earnings before interest and taxes (EBIT)	23,326	29,612	30,706	38,986
Other interest and similar income	113	151	509	669
Other interest and similar expenses	-532	-1,368	-3,263	-2,007
Finance cost	-410	-1,217	-2,753	-1,337
Earnings before taxes (EBT)	22,916	28,395	27,953	37,649
Income taxes	-6,785	-6,631	-8,170	-8,694
Net profit	16,131	21,764	19,783	28,955
Of which attributable to owners of the parent company	16,131	21,764	19,783	28,955
Earnings per share in €
basic	0.15	0.20	0.18	0.27
diluted	0.15	0.20	0.18	0.27
Number of shares	108,484,800*	107,877,738	108,484,800*	107,877,738

* Weighted average number of shares in the financial year

MLP Group Segment reporting FY 2015

	Financial Services		FERI		DOMCURA		Holding		Consolidation		Total
All figures in € '000	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
Revenue	395,515	403,705	123,885	109,229	20,007	-	-	-	-3,757	-3,208	535,651	509,727
Other revenue	13,016	12,224	6,235	4,698	2,182	-	10,995	15,443	-10,900	-10,987	21,529	21,378
Total revenue	408,531	415,929	130,120	113,927	22,190	-	10,995	15,443	-14,656	-14,195	557,180	531,105
Commission expenses	-172,542	-176,026	-70,693	-60,253	-13,454	-	-	-	3,105	2,647	-253,584	-233,633
Interest expenses	-1,923	-2,841	-	-	-	-	-	-	2	2	-1,921	-2,838
Personnel expenses	-74,187	-72,842	-30,361	-27,575	-5,144	-	-3,765	-5,547	-	-	-113,457	-105,964
Depreciation/amortisation and impairment	-9,473	-9,180	-1,762	-2,110	-686	-	-3,193	-2,127	-	-	-15,113	-13,417
Other operating expenses	-126,672	-126,586	-13,575	-11,611	-4,745	-	-10,723	-10,468	11,482	11,272	-144,234	-137,394
Earnings from shares accounted for using the equity
method	1,836	1,127	-	-	-	-	-	-	-	-	1,836	1,127
Earnings before interest and tax (EBIT)	25,569	29,582	13,729	12,377	-1,839	-	-6,686	-2,699	-67	-274	30,706	38,986
Other interest and similar income	178	238	50	19	21	-	286	429	-26	-17	509	669
Other interest and similar expenses	-468	-779	-370	-673	-3	-	-2,598	-757	176	202	-3,263	-2,007
Finance cost	-290	-540	-319	-653	19	-	-2,312	-329	149	185	-2,753	-1,337
Earnings before tax (EBT)	25,279	29,041	13,409	11,724	-1,820	-	-8,998	-3,027	82	-89	27,953	37,649
Income taxes											-8,170	-8,694
Net profit (total)											19,783	28,955

MLP Group Segment reporting Q4 2015

		Financial Services		FERI DOMCURA		Holding		Consolidation		Total
All figures in € '000	Q4/2015	Q4/2014	Q4/2015	Q4/2014	Q4/2015	Q4/2014	Q4/2015	Q4/2014	Q4/2015	Q4/2014	Q4/2015	Q4/2014
Revenue	132,195	147,188	34,006	31,591	13,282	-	-	-	-1,049	-961	178,434	177,819
Other revenue	4,207	3,932	2,612	1,797	2,019	-	2,815	5,473	-2,402	-2,583	9,251	8,618
Total revenue	136,402	151,120	36,618	33,388	15,302	-	2,815	5,473	-3,451	-3,544	187,685	186,437
Commission expenses	-59,892	-68,369	-17,953	-16,340	-9,130	-	-	-	818	680	-86,158	-84,030
Interest expenses	-565	-563	-	-	-	-	-	-	1	1	-564	-563
Personnel expenses	-18,860	-19,202	-9,070	-8,091	-3,177	-	-1,357	-1,540	-	-	-32,465	-28,832
Depreciation/amortisation and impairment	-1,873	-2,282	-455	-547	-413	-	-566	-511	-	-	-3,308	-3,341
Other operating expenses	-34,741	-35,655	-4,263	-4,454	-3,480	-	-2,483	-2,975	2,636	2,693	-42,330	-40,392
Earnings from shares accounted for using the equity
method	465	334	-	-	-	-	-	-	-	-	465	334
Earnings before interest and tax (EBIT)	20,937	25,382	4,877	3,955	-899	-	-1,592	446	3	-171	23,326	29,612
Other interest and similar income	35	79	28	16	17	-	31	58	3	-2	113	151
Other interest and similar expenses	-83	-560	-242	-524	-3	-	-225	-332	30	48	-523	-1,368
Finance cost	-48	-481	-214	-508	14	-	-194	-274	32	46	-410	-1,217
Earnings before tax (EBT)	20,888	24,901	4,663	3,447	-885	-	-1,786	172	36	-125	22,916	28,395
Income taxes											-6,785	-6,631
Net profit (total)											16,131	21,764