Quarterly Report • Nov 11, 2008
Quarterly Report
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Interim Group Report for the fi rst nine months and for the third quarter 2008
| All fi gures in € m | 3rd quarter 2008 3rd quarter 2007 | 9 months 2008 | 9 months 2007 Change in % | ||
|---|---|---|---|---|---|
| continuing operations | |||||
| Total revenues | 126.4 | 138.71 | 413.8 | 411.81 | 0.5% |
| Revenues | 119.9 | 126.51 | 385.5 | 383.31 | 0.6% |
| Other revenues | 6.5 | 12.21 | 28.3 | 28.61 | –1.1% |
| Earnings before interest and taxes (EBIT) | 2.8 | 18.21 | 35.5 | 56.41 | –37.2% |
| EBIT margin (%) | 2.2 % | 13.1 % | 8.6 % | 13.7 % | – |
| Earnings from continuing operations | 0.8 | 16.81 | 15.1 | 38.81 | –61.1% |
| Earnings per share (diluted) in € | 0.01 | 0.161 | 0.15 | 0.381 | –60.5% |
| mlp group | |||||
| Net profi t (total) | 0.5 | 8.31 | 14.8 | 26.51 | –44.2% |
| Earnings per share (diluted) in € | 0.01 | 0.081 | 0.15 | 0.261 | –42.3% |
| Capital expenditure | 1.8 | 5.3 | 8.2 | 11.8 | –30.0 % |
| Shareholders' equity | – | – | 417.1 | 339.72 | 22.8% |
| Equity ratio (%) | – | – | 28.9 % | 23.9 %2 | – |
| Balance sheet total | – | – | 1,441.4 | 1,424.22 | 1.2% |
| Clients3 | – | – | 739,000 | 721,0002 | 2.5% |
| Consultants3 | – | – | 2,491 | 2,6132 | –4.7% |
| Branch offi ces3 | – | – | 252 | 2622 | –3.8% |
| Employees3 | – | – | 2,116 | 1,912 | 10.7% |
| arranged new business | |||||
| Old-age provisions | |||||
| (premium sum in € billion) | 1.2 | 1.3 | 4.2 | 3.5 | 20.0% |
| Health insurance (annual premium) | 12.0 | 10.3 | 33.6 | 33.9 | –0.9% |
| Loans | 190 | 300 | 715 | 918 | –22.1% |
| Funds under management (in € billion) | – | – | 11.3 | 11.42 | –0.7% |
1 Previous year's values adjusted. The adjustments are disclosed under note 3.
2 As at December 31, 2007.
3 Continuing operations.
| and the third quarter 2008 | |
|---|---|
| portrait | |
| interim management report for the fi rst nine months | |
| and the third quarter 2008 | |
| macroeconomic environment | |
| situation within the industry and the competitive environment | |
| company situation / results of operations | |
| net assets | |
| fi nancial position | |
| personnel | |
| communication and advertising activities | |
| legal corporate structure | |
| segment report | |
| risk report | |
| related party disclosure | |
| outlook for the current fi nancial year / forecast | |
| events subsequent to the reporting date | |
| investor relations | |
| capital measures | |
| ir activities | |
| consolidated income statement | |
| consolidated balance sheet | |
| consolidated cash fl ow statement |
changes in consolidated shareholders' equity 30 notes to consolidated fi nancial statement 32 general information 36 executive bodies at mlp ag 50 fi nancial calendar 51
MLP is the leading independent fi nancial services and asset management provider for academics and other discerning clients. The company integrates a multitude of products and services of various banks, insurance and investment companies to offer a fi nancial concept that is tailored to the requirements of each individual client. MLP clients benefi t from a holistic advisory approach covering all economic aspects that is guided by their particular requirements at their respective stages in life.
MLP has branches in Germany, Austria and the Netherlands where around 2,5oo consultants support and advise nearly 74o,ooo private and corporate clients. MLP holds a full banking license and together with the MLP Group company Feri Finance AG, manages assets of around € 11 billion – making the company the leading independent asset gatherer in Germany.
The training provided at the MLP Corporate University is regarded as the benchmark in the fi nancial consultancy industry. Commensurate with this status, the MLP Corporate University holds the coveted seal of quality granted by the European Foundation for Management Development (EFMD) and thus belongs to a small circle of twelve renowned corporate universities which can claim this status.
Although at the beginning of the year, the Germany economy, in which MLP generates over 98 % of its total revenues, still managed to positively differentiate itself from the developments in other industrialised countries, the dramatically worsening worldwide crisis within the fi nancial sector in the third quarter of 2oo8 has now signifi cantly impacted the real economy in Germany. Following a slight fall in the gross national product in the second quarter, the German economy also shrank by around o.2 % in the third quarter of the current fi nancial year and is thus now in a recession.
The labour market in Germany has so far remained very robust in the face of the ensuing worldwide economic downturn and the recent turbulence within the fi nancial markets. The unemployment rate fell further in the third quarter and amounted to just 7.4 % compared to 8.4 % at the start of the year. The number of people in employment rose and, according to fi gures released by the German Federal Employment Agency, there is continued high demand for manpower.
Due to the worldwide expectations of recession in September the annual rate of infl ation fell to 2.9 % from 3.3 % in June. In this respect, the favourable development in prices was substantially infl uenced by signifi cantly falling prices for energy and food. Due to these reductions, coupled with the negotiated higher wages and salaries in the preceding periods, led to higher disposable incomes in the third quarter.
Despite an improvement during the third quarter in key macroeconomic indicators that impact MLP's business development – such as the levels of unemployment or disposable income – the fi nancial crisis and the associated fear of recession remained the overriding negative factors infl uencing client's provision and investment behaviour.
Economic growth in Germany 2008 (in %)
Sources: Dekabank, Reuters, BMWi
During the fi rst nine months of the current fi nancial year the development of the old-age pension provision and health insurance markets was primarily infl uenced by the reform of the German Insurance Contract Law that came into effect at the start of the year. By introducing these changes, the legislator seeks to ensure a higher degree of consumer protection through greater transparency and more competition among the insurance companies, e.g. through redefi ning the terms of cancellation and profi t sharing with respect to life insurance policies. On 1st July 2oo8, the so-called information duties regulation also came into force, which forms part of the Insurance Contract Law and obliges insurers to disclose their acquisition and sales costs.
At the beginning of the year, the required adjustments to the new regulatory environment necessitated extensive training measures, and throughout the entire period under review, changes to the processes and structures within insurance companies and sales organisations were needed. This had a negative effect on the business development within the markets for old-age pension provision and health insurance.
Furthermore, private clients reacted with increasing concern towards the dramatically worsening fi nancial market crisis. Specifi c factors that contributed towards this uncertainty included worries about the possible negative effects on individuals' personal circumstances (job security, disposable income, living costs etc.). The increasing restraint on the part of clients when making long- term investments decisions, such as the conclusion of old-age pension provision contracts, is indicative of this uncertainty. One particular indicator in this respect is the number of newly concluded so-called "Riester" policies which in the third quarter of 2oo8 fell from 636,ooo to around 454,ooo compared to the same period in the previous year.
Sources: Bundesministerium für Arbeit und Soziales, BVI, GDV, own estimates
The dramatic developments within the international fi nancial markets considerably affected the wealth management of private and institutional clients in Germany. The negative development of almost all client portfolios led to a substantial reduction in the recurring and performance-linked remuneration paid to the wealth managers. In addition, there were signifi cant outfl ows of funds due to the redeployment of clients' monies into supposedly safe, yet low-return forms of investment. According to fi gures released by the central association for the German investment fund industry (BVI), some € 8 billion was withdrawn from German retail funds during the month of September – which represented the peak of the fi nancial crisis thus far. Money market funds were particularly affected, witnessing an outfl ow of funds of around € 3.6 billion. Value-protected funds were the sole benefactors of the turbulence within the capital markets, registering an infl ow of funds in September amounting to € 2.9 billion.
The forthcoming introduction of a fl at rate capital gains tax on 1st January 2oo9, applicable to all income arising from capital gains and securities transactions, was also an infl uencing factor on the behaviour of investors in Germany during the period under review. Whereas investors withdrew capital from equity and fi xed income funds, new monies amounting to € 8.3 billion were invested in capital gains tax-optimised fund of funds products. However, the positive impetus from the introduction of the fl at-rate capital gains tax was reversed by the fi nancial market crisis. Overall, in the fi rst nine months of the current fi nancial year investors placed just € 14.9 billion into German retail funds – representing only around 55 % of the infl ow of funds registered in the same period of the previous year.
At MLP too, the fi nancial market crisis overshadowed the positive impetus emanating from the forthcoming introduction of the fl at-rate capital gains tax. Revenues from wealth management fell signifi cantly and the volume of funds under management amounted to € 11.3 billion (start of the year € 11.4 billion; see also profi t situation and segment report).
Source: Bundesverband Investment und Asset Management e.V.
The market for the sale of fi nancial services is undergoing fundamental change. The regulatory requirements in Germany have further increased, starting with the reforms already introduced in 2oo7 relating to the EU brokerage guideline and the MiFID fi nancial markets guideline through to the changes to the German Insurance Contract Law (VVG) which came into effect on 1st January 2oo8. This has expedited the professionalisation and specialisation of the market participants. Experts expect that, during the coming years, a process of consolidation and concentration will take place among the market participants. Initial signs of this became evident within the period under review through the takeovers and mergers concerning fi nancial services sales organisations as well as so-called broker pools. The competition for securing the services of qualifi ed fi nancial consultants has also intensifi ed.
MLP is well equipped for the forthcoming changes. The quality of our consulting, our focus on selected client groups and our independence provide us with a very good market position. Furthermore, our fi nancial strength enables us to play an active role in the market consolidation. In March of this year we made an acquisition in the area of occupational pension provision (see also company situation).
Despite the far-reaching effects of the financial market crisis the core business of MLP has remained resilient during the first nine months of the financial year. Assisted by the positive development of the old-age pension provision business, total revenues rose from € 411.8 million to € 413.8 million. Earnings before interest and taxes (EBIT) fell to € 35.5 million (9M 2oo7: € 56.4 million); net profit from continuing operations declined to € 15.1 million (€ 38.8 million).
Total revenues (in € million)
Total revenues in the third quarter of 2oo8 decreased to € 126.4 million (Q3 2oo7: € 138.7 million). EBIT amounted to € 2.8 million compared to € 18.2 million in the previous year. Net profit totalled € o.8 million (€ 16.8 million). The fall in earnings was especially attributable to the far-reaching crisis within the international financial markets that particularly affected those areas of MLP closely connected to the financial markets. The confidence crisis within the capital markets - on a scale never previously witnessed - has significantly changed the market conditions and has led to restraint on the part of private and institutional clients.
The wealth management business is particularly affected by the fi nancial market crisis. Similar to the situation within the overall market – in which the investment fund industry recorded a 45 % fall in the infl ow of funds up to the end of September compared to the previous year, despite the forthcoming introduction of the fl at-rate capital gains tax – MLP clients have, in many instances, opted in favour of short-term saving investments rather than longterm wealth management products. Feri Finance AG also felt the effects of the restraint with respect to new business on the part of both private and institutional clients. The decline in prices on the capital markets also led to a fall in on-going remuneration. Overall, the wealth management segment contributed € 19.6 million (€ 23.6 million) to revenues from commissions and fees in the third quarter – some 17 % less than in the previous year.
In addition, a negative result was generated at the consulting company TPC, which MLP acquired in February 2oo8, in order to strengthen its presence in the occupational pension scheme domain. Here, corporate clients have deferred larger-scale projects until next year as a result of the uncertain economic climate. As forecast other revenues fell signifi cantly in the third quarter to € 6.5 million (€ 12.2 million) following profi ts from disposals in the previous year amounting to € 4.o million resulting from the sale of Feri's funds database business to Reuters.
Despite the turbulence and some heavy losses in certain asset classes on the international capital markets, managed assets fell only slightly in the third quarter to € 11.3 billion (3oth June: € 11.7 billion), demonstrating the stable development in the existing investment concepts. In the private health insurance business, annual premiums in the fi rst nine months stood at € 33.6 million - and were thus almost at last year's level - despite the new regulations introduced within the framework of the health care reform. The loans and mortgages volume amounted to € 715 million, compared to € 918 million in the previous year. The old-age pension provision business developed positively and the premium sum for new business on the reporting date of 3oth September has risen by 2o % to € 4.2 billion (€ 3.5 billion). By achieving this growth in the challenging and competitive environment we have once again clearly demonstrated our competitive strength.
MLP has widely completed its adjustment steps relating to the new Insurance Contract Law. Following extensive training courses, IT adjustments and the connection of new producer software, MLP successfully integrated the extended cost transparency in old-age pension provision and health insurance products into its consulting approach in the third quarter. This very rapid adjustment to the far-reaching changes once again demonstrates the leading role played by MLP.
The reform of the Insurance Contract Law, which came into effect on 1st January 2oo8, brings far-reaching changes for the entire industry. The provisions of the new law include an extension of information obligations towards clients and the spreading of acquisition costs relating to old-age pension provision products over a period of fi ve years. Furthermore, since 1st July a requirement now exists to provide increased cost transparency.
In the period from July to September, MLP gained a total of 1o,ooo new clients. The total number of clients on 3oth September stood at 739,ooo. The number of consultants fell to 2,491 (3oth June 2oo8: 2,534). In the fi rst nine months, revenue per consultant rose from € 137,ooo to € 144,ooo – representing an additional 5 % increase in effi ciency.
The commission expenses, which are mainly variable, fell slightly in the fi rst nine months of the fi nancial year from € 134.2 million to € 133.3 million.
Our interest result in the period under review reached € 14.2 million (12.2 million). In this respect we were able to increase interest income from € 24.7 million to € 3o.1 million. The interest expenses rose and amounted to € 15.9 million (€12.5 million).
Personnel expenses and operating expenses rose as planned by 12.6 % and 9.2 % respectively. Personnel expenses climbed from € 75.8 million to € 85.3 million due to salary increases, compensatory payments, the fi rst-time incorporation of the TPC-Group and the employment of additional personnel in sales and sales support. The rise in operating expenses from € 118.5 million to € 129.4 million was attributable to changes in the legal framework conditions, which led to additional training and IT expenses, as well as higher expenditure for advertising and promotion.
The result from at-equity valued companies amounted to € o.6 million. This contains the result contribution by MLP Hyp through which we conduct our residential mortgage business together with Interhyp AG. MLP Hyp commenced its business activities in the fourth quarter of 2oo7.
At € –9.o million (€ –2.4 million), our fi nancial result came in signifi cantly weaker than in the corresponding period of the previous year. This was primarily attributable to the dividend distribution to the minority shareholders of our subsidiary Feri Finance AG amounting to € 7.8 million which was higher than in the previous year (€ 2.2 million).
Overall, we achieved earnings before taxes (EBT) amounting to € 26.5 million (€ 54.o million).
Our tax ratio for the period under review was 42.8 % (28.1 %). The tax ratio was thereby considerably affected by the dividend payment to the minority shareholders of our subsidiary Feri Finance AG in the fi rst quarter.
We thereby achieved net profi t from continuing operations amounting to €15.1 million (€38.8 million). Together with the result from discontinued operations of € –o.4 million (€ –12.4 million) Group earnings amounted to € 14.8 million (€ 26.5 million). In the third quarter of 2oo7, the results of our former subsidiaries in Great Britain and Spain were shown as discontinued operations for the fi rst time. Our business activities in these markets ceased at that time.
In the period under review, basic earnings per share fell from € o.27 to € o.15. Diluted earnings per share also declined, decreasing from € o.26 to € o.15.
The development in expenses in the third quarter of 2oo8 did not differ signifi cantly from the development over the nine-month period.
Compared to 31st December 2oo7, total assets of the MLP Group at the reporting date on 3oth September 2oo8 had risen slightly by 1.2 % to € 1.44 billion.
On the asset side of the balance sheet the intangible assets rose by € 12.6 million to € 197.3 million, primarily through additional capitalised company assets from acquisitions.
The capital increase carried out in August 2oo8 resulted in an infl ow of € 123.8 million. These funds are the primary reason for the increase in fi nancial investments from € 52.4 million to € 174.3 million.
Tax refund claims more than doubled from € 9.7 million to € 25.2 million. Due to usual seasonal fl uctuations, other receivables and assets fell by 33.9 % to € 1o7.1 million.
Cash and cash equivalents decreased from € 37.3 to € 25.8 million. The payment of the dividend amounting to € 49 million, tax pre-payments and the outfl ow of cash for share buybacks at the start of the year reduced cash and cash equivalents. On the other hand, the profi t transfer by our subsidiary MLP Finanzdienstleistungen AG for the fi nancial year 2oo7 had a positive effect.
| All fi gures in € million | Sept 30, 2008 | Dec 31, 2007 | Change |
|---|---|---|---|
| Intangible assets | 197.3 | 184.7 | 6.8 % |
| Property, plant and equipment | 82.0 | 83.9 | –2.3 % |
| Investment property | 14.3 | 14.6 | –2.2 % |
| Investment of associates accounted for using the equity method | 2.1 | 1.6 | 35.7 % |
| Deferred tax assets | 2.1 | 1.6 | 33.9 % |
| Receivables from clients from the banking business | 257.7 | 260.3 | –1.0 % |
| Receivables from banks from the banking business | 545.1 | 604.0 | –9.7 % |
| Financial investments | 174.3 | 52.4 | 232.7 % |
| Tax refund claims | 25.2 | 9.7 | 160.8 % |
| Other receivables and other assets | 107.1 | 162.1 | –33.9 % |
| Cash and cash equivalents | 25.8 | 37.3 | –30.7 % |
| Non-current assets held for sale and disposal groups | 8.3 | 12.2 | –31.7 % |
| total | 1,441.4 | 1,424.2 | 1.2 % |
The item "non current- assets held for sale and disposal groups" consists of shares held in investment funds that were set up within the framework of our wealth management and are intended for selling on to our clients. In net terms, the value has fallen from € 12.2 million to € 8.3 million.
In the period under review we were able to increase equity capital by 22.8 % to € 417.1 million. The distribution of the dividend amounting to around € 49 million and the buyback of own shares totalling € 11.5 million initially reduced equity capital which then rose again following the capital increase carried out in August 2oo8 and through the current earnings of the fi nancial year. As a result, the equity ratio rose from 23.9 % to 28.9 %.
Other liabilities fell seasonally by 22.o % to € 217.2 million.
At the reporting date our liabilities towards clients and banks from the banking business remained almost unchanged at around € 751 million. Our deposit business has thus not changed signifi cantly compared to the end of the year 2oo7. The investment of these monies is shown on the assets side of the balance sheet under the items "Receivables from clients and banks from the banking business". Together, these items amount to € 8o2.8 million. The decrease of € 61.5 million is primarily due to the profi t transfer of our subsidiary MLP Finanzdienstleistungen AG for the fi nancial year 2oo7. The corresponding funds were rebooked from receivables from banks into cash and cash equivalents.
| All fi gures in € million | Sept 30, 2008 | Dec 31, 2007 | Change |
|---|---|---|---|
| Equity attributable to MLP AG shareholders | 417.1 | 339.7 | 22.8 % |
| Minority interests | – | 0.1 | – |
| total shareholders' equity | 417.1 | 339.7 | 22.8 % |
| Provisions | 45.8 | 43.8 | 4.7 % |
| Deferred tax liabilities | 10.4 | 9.9 | 5.5% |
| Liabilities towards clients from the banking business | 726.4 | 724.8 | 0.2% |
| Liabilities towards banks from the banking business | 24.4 | 27.5 | –11.1 % |
| Tax liabilities | 0.1 | 0.1 | – |
| Other liabilities | 217.2 | 278.5 | –22.0 % |
| total | 1,441.4 | 1,424.2 | 1.2 % |
In the fi rst nine months of 2oo8, cash fl ows from current business activities in the continuing operations improved from € 47.5 million to € 66.2 million. When compared to the previous year, this is primarily attributable to the different timing of profi t transfers by subsidiaries.
Through the investment of funds from the capital increase, the cash fl ows from investment activity changed from € –11.9 million to € –134.5 million.
The main infl uencing factors on cash fl ows from the fi nancing activities of the continuing operations were the share buyback programme implemented at the beginning of the period under review, the distribution of the dividend at the start of June and the capital increase carried out in August. This led to a considerable improvement in the cash fl ows from fi nancing activities from € –4o.o million to € 63.9 million.
On 3oth September the fi nancial resources of the continuing operations thus amounted to € 25.1 million (€ 69.8 million). The liquidity situation therefore remains very good – the Group has adequate liquidity available. In addition to the liquid funds we also have access to free credit lines.
| All fi gures in € million | 9 months 2008 | 9 months 2007 |
|---|---|---|
| Cash fl ows from operating activities | 66.2 | 47.5 |
| Cash fl ows from investing activities | –134.5 | –11.9 |
| Cash fl ows from fi nancing activities | 63,9 | –40.0 |
| changes in cash and cash equivalents | –4.3 | –4.3 |
| Changes in cash equivalents due to | ||
| exchange rate movements | – | – |
| Cash and cash equivalents at the end of period | 25.1 | 69.8 |
On 21st August 2oo8 we carried out a capital increase by around 1o % from authorised capital. The issue of 9,799,152 new shares resulted in an infl ow of € 123.8 million. The Executive Board decided on this capital increase with the approval of the Supervisory Board following the published announcement by the Swiss insurance group Swiss Life on 14th August 2oo8 to acquire an approximately 26 % stake in MLP. The new shares were subscribed with exclusion of subscription rights by Allianz Lebensversicherung AG, AXA Lebensversicherung AG and Uberior Ena Ltd., a company belonging to the British HBOS group. The additional cash strengthens our position to actively participate in the industry consolidation.
In the fi rst nine months of the fi nancial year we invested a total of € 8.2 million (€ 11.8 million), of which € 6.3 million (€ 9.8 million) was allocated to the fi nancial services segment. The money was used in particular to improve IT support for client consulting activities and other client care processes. These investments also enable more rapid adjustment to the new regulatory environment. In addition to the capitalisable investments we also spent other investment monies which are contained as expenses in the profi t and loss account.
Within the Feri segment, we invested € 1.1 million (€ o.9 million), and in the Holding segment, investments amounted to € o.9 million (€ 1.1 million). We fi nanced our investments from current cash fl ows.
On the reporting date of 3oth September 2oo8 the MLP Group had a total of 2,116 employees, mainly in Germany. The number of employees rose by 2o5 compared to 3oth September 2oo7. 1,853 (1,655) of the personnel were employed within the fi nancial services segment. Our subsidiary Feri Finance AG (Feri segment) had 253 (248) employees. The number of employees in the Holding segment totalled 1o (9).
Further information concerning the development of personnel expenditure and the employee structure are contained in the chapter "profi t situation" and in the notes.
In the third quarter of 2oo8 MLP initiated a new image campaign entitled "The Strategy of Your Life". We fi rstly examined the brand and the image of MLP in a detailed study conducted with scientifi c support. Based on these fi ndings we then developed our new claim "MLP fi nancial consulting -– as individual as you". To implement the new image campaign we are using a multitude of advertisements and online advertising as well as a new TV spot.
The new image campaign communicates the quality claim of MLP and emotionally addresses the MLP target group of academics and other sophisticated clients. The campaign focuses on our differentiating characteristics of individuality, independence, a holistic approach and consultation quality.
In the period under review we spent a total of € 7.5 million (€ 5.6 million) on advertising measures.
The acquisition accomplished by MLP in March of the current fi nancial year of the TPC Group, Germany's leading provider of industry-related solutions for occupational pension schemes enabled MLP to considerably further strengthen its occupational pensions business. The acquisition led to a signifi cant increase in the number of attractive association and corporate clients. In the third quarter of the current fi nancial year we conducted a merger of existing subsidiaries within the occupational pension scheme area.
The MLP Group structures its business into the following operative segments:
A description of the individual segments is provided in the notes.
Total revenues in the fi nancial service segment in the fi rst nine months of the fi nancial year rose by 1.7 % to € 375.2 million. However, segment earnings before interest and taxes (EBIT) fell by 37.3 % to € 33.3 million. This was mainly attributable to the higher personnel expenses (+17.6 %) as well as to the operating expenses (+12.2 %). The personnel expenses rose due to general salary increases, new hires and the fi rst-time inclusion of the TPC Group. The rise in operating expenses was primarily due to higher training and IT expenses caused by necessary adjustments to the new regulatory environment. The expenses also include costs associated with our biennial MLP Partner Forum.
Segment pre-tax profi t (EBT) for the fi rst nine months of the fi nancial year amounted to € 32.5 million (€ 52.5 million) which contains a fi nancial result amounting to € –o.8 million (€ –o.5 million)
Total revenues in the third quarter of 2oo8 in this segment only amounted to € 115.6 million (€ 122.7 million). The dramatically worsening fi nancial crisis in the third quarter and its possible negative effects worried many clients and led them to defer longer-term investment decisions e. g. in the areas of wealth management or old-age pension provisions.
Segment earnings before interest and taxes (EBIT) in the third quarter amounted to € 3.o million (€ 15.9 million). In addition to the reduced total revenues, the other primary contributory factors to this fall were, as in the nine-month period, the rise in personnel expenses and operating expenses.
Together with the almost unchanged fi nancial result of € –o.1 million, segment pre-tax profi t in the third quarter totalled € 2.9 million (€ 15.9 million).
In the Feri segment, which refl ects wealth management as well as the rating and research activities of our subsidiary Feri Finance AG, the effects of the fi nancial crisis were clearly evident. In the nine-month comparison, total revenues fell by 7.9 % to € 34.1 million. As personnel costs and operating expenses rose in this segment too, segment earnings before interest and taxes (EBIT) only reached € 3.3 million (€ 8.7 million). The fi nancial result remained unchanged at around € o.2, leading to a segment pre-tax profi t (EBT) of € 3.5 million (€ 8.9 million).
The third quarter in this segment was particularly affected by the capital market crisis. Total revenues fell from € 15.o million to €1o.9 million. At € 2.7 million, other revenues in this segment were 52.7 % lower than in the comparative period.
As the personnel expenses and operating expenses were also higher than in the previous year on a quarter versus quarter basis, segment earnings before income and taxes (EBIT) only amounted to € o.8 million (€ 5.7 million). Together with the fi nancial result, segment pre-tax profi t (EBT) for the period from July to September totalled € o.8 million (€ 5.8 million).
Total revenues in the Holding segment in the fi rst nine months of the fi nancial year fell only slightly from € 16.5 million to € 15.6 million. Total revenues include a subsequent profi t component from the sale of the former subsidiary MLP Lebensversicherung AG amounting to € 4.o million (€ 4.5 million). As both the personnel expenditure as well as the operational expenses fell sharply, we were able to signifi cantly improve segment earnings before interest and taxes (EBIT) from € –5.4 million to € –1.4 million. At € 2.1 million, the fi nancial result was below the previous year's fi gure (€ 3.4 million) and was primarily attributable to the higher dividend of Feri Finance AG compared to the previous year and the associated distribution to the minority shareholders. Thus, segment EBT improved from € –2.1 million to € o.7 million.
The development in this segment in the third quarter did not differ signifi cantly from the development in the overall period under review.
There were no signifi cant changes in the risk situation of the Group during the period under review. Despite the dramatic crisis within the fi nancial sector there were no exceptional burdens within the framework of our default, market and liquidity risks. The Group continues to have adequate liquid funds. At the reporting date of 3oth September 2oo8 our core capital ratio of 22.5 % stood well above the required 8 % as 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 description of our risk management is contained in our annual report 2oo7.
Related party disclosures are contained in the notes.
Since the third quarter of 2oo8 at the latest, the economic development in Germany – MLP's core market – has been affected by the international fi nancial crisis, leading to drastically downgraded economic forecasts in recent weeks. Economists at banks and research institutes are now only expecting an average growth rate of 1.8 % in the gross national product for 2oo8. Private consumption is now even expected to fall by o.4 % and the forecasts for 2oo9 have also become signifi cantly more pessimistic. Whereas growth expectations at the beginning of the year were still around 1.9 %, latest estimates assume expansion of just o.2 %.
The economic expectations of the experts are largely in line with the estimates for private households which are important for assessment of the future business development of MLP. According to a survey by the market research company GfK, fear of a recession has risen within private households. Willingness to purchase has declined considerably and consumption remains stubbornly sluggish.
Consequently, for MLP the macroeconomic framework conditions for the current quarter and the fi nancial year 2oo9 have become signifi cantly more diffi cult. There is a danger that the pessimistic economic expectations may also manifest themselves in an increasing reluctance by clients with respect to the conclusion of old-age pension provision contracts or to long-term investment decisions.
MLP focuses on business activities in the areas of old-age pension provision and health insurance as well as wealth management.
For these market as well, the fi nancial crisis has become the determining factor for the future development. Particularly in the areas of old-age pension provision and wealth management, clients need to take long-term investment decisions. The, to some extent, panic-type events within the international fi nancial markets and the pessimistic economic expectations have caused deep-seated concerns especially among private clients who are thus exhibiting increasing restraint in their investment decisions.
This applies particularly to wealth management and has stifl ed the previously expected positive impetus from the forthcoming introduction of a fl at-rate withholding tax on capital gains in Germany from 1st January 2oo9. Experts had expected this introduction to lead to a huge redeployment of funds within the portfolios of private clients in the current fi nancial year.
The legal framework conditions concerning the old-age pension and healthcare provision business fi elds have changed signifi cantly in the past 18 months, such as, with respect to the current fi nancial year, the new regulations of the German Insurance Contract Law. These far-reaching changes necessitated adjustment processes throughout the entire industry during the fi rst nine months of 2oo8. MLP was one of the fi rst sales organisations to successfully implement these changes.
In the old-age pension provision sector, the legislator decided to extend the scope of the state subsidies relating to "Riester" policies from 2oo9 to residential property - a step that could lead to a stimulation of demand for "Riester" policies.
Against this macroeconomic and industry-specifi c background we feel compelled to revise our forecast issued at the beginning of the year. We now no longer expect that total revenues will rise moderately and that our operative margin (EBIT margin) will not fall below the level of the fi nancial year 2oo6 (around 16 %). Since October, MLP has registered increased momentum in its year-end old-age pension provision business. Because of the current restraint on the part of many private clients it is not – at least from a present perspective – expected to match the growth dynamics of previous years. Despite the very diffi cult market conditions we now assume that total revenues for the current fi nancial year will be around the level of the record fi gure achieved in 2oo7 (€ 638.8 million).
In the fourth quarter we will continue with the planned investments to improve customer consulting and care – mainly within the fi nancial services segment. Financing measures are not planned. The same applies for signifi cant changes to the legal corporate structure or to the organisation or administration.
There were no notable events after the balance sheet reference date that affected the MLP Group's net assets, fi nancial position or profi t situation.
The development in the equity markets in the third quarter of 2oo8 was very heavily infl uenced by the further deteriorating worldwide crisis in the fi nancial sector and its negative effects on the further development of the world economy. By the end of the third quarter the crisis affecting the banks and insurance companies had taken on a new dimension which forced governments in the leading economies to draw up very far-reaching supporting measures. Multibillion state aid funds have been set up, intended to ensure liquidity and adequate capital resources of banks and insurance companies and thus prevent the collapse of the worldwide fi nancial system. Furthermore, these measures are designed to secure the provision of loan capital by the fi nancial sector to companies in other industries and to, at least, limit the negative consequences of the fi nancial crisis on worldwide economic growth.
In the face of this strained environment, beset by uncertainty and fears of recession, the leading indices slumped. Since the beginning of the year up until the end of September the American Dow Jones Industrial Average index fell by over 16 %. The DAX registered a loss of over 26 %. The MDAX, on which the MLP share is listed, declined almost 3o % since the beginning of the year and the DAXsector Financial Services plummeted by 48 %, refl ecting the tense situation within the fi nancial sector. After the end of the reporting period the downtrend signifi cantly accelerated. By the end of October the Dow Jones lost 28.5 %, the DAX 37.3 %, the MDAX 44.2% and the DAXsector Financial Services 53.3 % of their value.
Source: Deutsche Börse
As MLP was not directly affected by the crisis within the fi nancial markets, the MLP share price developed positively and contrarily to the market during the fi rst nine months of the year. In addition, takeover speculation arising from the acquisition of a 24 % stake in MLP by the Swiss insurance group Swiss Life uplifted the share at times. At 3oth September 2oo8, the share had risen by 21 % compared to the start of 2oo8, climbing from €1o.74 to € 13.oo. After this date, our share was unable to escape the ensuing rapid fall in share prices which particularly affected fi nancial stocks and stood at € 9.69 on 31st October 2oo8.
On 14th August 2oo8 the Swiss insurance group Swiss Life announced that it was to acquire around 26 % of the shares in MLP. In order to sustainably secure our business model as an independent consulting house, the Executive Board, following approval by the Supervisory Board, decided on 21st August 2oo8 to issue 9,799,152 new shares from its authorised capital in exchange for cash amounting to € 123.8 million - thereby increasing the number of ordinary MLP shares by almost 1o %. The new shares were subscribed in an expedited placement excluding subscription rights. Allianz Lebensversicherung AG and AXA Lebensversicherung AG each subscribed 46 %, with the remaining 8 % being subscribed by Uberior Ena Ltd., a company belonging to the British HBOS group. The additional cash strengthens the position of MLP to actively participate in the expected upcoming consolidation within the industry.
In addition to numerous capital market conferences and road shows, this year we once again participated in a share forum organised by the DSW (Germany's largest association for private investors). At this event, held on 29th September 2oo8 in Frankfurt am Main, some 15o private investors used the opportunity to inform themselves of our business model as well as our future business development. Our participation in this event formed part of our efforts, particularly during this diffi cult stock market period, to intensify our direct dialogue with private investors.
Within the framework of the "The Best Annual Reports" competition commissioned by German "Manager Magazin", experts rated the around 2oo annual reports of companies listed in the DAX, MDAX, SDAX, TecDAX and Stoxx 5o indices. Within the industry-specifi c comparison of banks, insurance companies and other fi nancial organisations, the MLP annual report was placed third, equalling last year's performance. In the rankings within the respective stock market index, our Annual Report 2oo7 was placed in 8th position in the MDAX.
At this year's Annual General Meeting on 16th May, the shareholders approved the proposal put forward by the Supervisory Board and the Executive Board with 99.98 % of the votes to raise the dividend to € o.5o. The 25 % increase in the dividend resulted in MLP distributing a dividend sum of around € 49 million to its shareholders. From this year, shareholders in MLP AG can receive a dividend distribution volume of up to around € 4oo million tax-free. This results from the changed tax treatment of the incorporation of MLP AG subsidiaries into MLP AG and their subsequent sale, and is subject to fi nal confi rmation from the fi nancial authorities.
| All fi gures in €'000 Notes |
3rd quarter 2008 3rd quarter 2007* | 9 months 2008 | 9 months 2007* | |
|---|---|---|---|---|
| (6) Revenues |
119,918 | 126,461 | 385,501 | 383,259 |
| Other revenues | 6,525 | 12,201 | 28,269 | 28,572 |
| total revenues | 126,443 | 138,662 | 413,770 | 411,830 |
| Commission expenses | –41,564 | –43,652 | –133,280 | –134,174 |
| Interest expenses | –5,669 | –4,473 | –15,948 | –12,513 |
| Personnel expenses (7) |
–27,670 | –25,057 | –85,322 | –75,758 |
| Depreciation and amortisation | –4,480 | –4,975 | –14,886 | –14,382 |
| Operating expenses (8) |
–44,541 | –42,241 | –129,427 | –118,521 |
| Earnings from companies accounted | ||||
| for using the equity method | 257 | –41 | 564 | –41 |
| earnings before interest and taxes (ebit) | 2,775 | 18,222 | 35,471 | 56,442 |
| Other interest and similar income (9) |
1,456 | 1,367 | 3,802 | 3,913 |
| Other interest and similar expenses (9) |
–1,583 | –1,380 | –12,803 | –6,348 |
| fi nance cost (9) |
–126 | –13 | –9,001 | –2,434 |
| earnings before taxes (ebt) | 2,649 | 18,209 | 26,470 | 54,008 |
| Income taxes | –1,828 | –1,360 | –11,340 | –15,162 |
| earnings from continuing operations after taxes | 821 | 16,849 | 15,130 | 38,846 |
| earnings from discontinued operations after taxes | –349 | –8,508 | –355 | –12,359 |
| net profi t (total) | 472 | 8,342 | 14,775 | 26,487 |
| Of which | ||||
| shareholders of the MLP AG | 472 | 8,342 | 14,775 | 26,487 |
| minority interest account for | – | – | – | – |
| earnings per share in € | ||||
| from continuing operations | ||||
| basic | 0.00 | 0.17 | 0.15 | 0.39 |
| diluted** | 0.01 | 0.16 | 0.15 | 0.38 |
| from continuing and discontinued operations | ||||
| basic | 0.00 | 0.09 | 0.15 | 0.27 |
| diluted** | 0.01 | 0.08 | 0.15 | 0.26 |
* Previous year's values adjusted. The adjustments are disclosed under note 3. ** The ordinary shares resulting from the conversion of convertible debentures are treated as shares already issued.
| All fi gures in €'000 | Notes | September 30, 2008 | December 31, 2007* |
|---|---|---|---|
| Intangible assets | 197,292 | 184,739 | |
| Property, plant and equipment | 82,009 | 83,910 | |
| Investment property | 14,316 | 14,635 | |
| Investment of associates accounted for using the equity method | 2,144 | 1,579 | |
| Deferred tax assets | 2,102 | 1,570 | |
| Receivables from clients from the banking business | 257,684 | 260,297 | |
| Receivables from banks from the banking business | (10) | 545,112 | 603,951 |
| Financial investments | (11) | 174,346 | 52,400 |
| Tax refund claims | 25,176 | 9,653 | |
| Other receivables and other assets | (12) | 107,146 | 162,075 |
| Cash and cash equivalents | 25,806 | 37,251 | |
| Non-current assets held for sale and | |||
| disposal groups | (13) | 8,296 | 12,154 |
| total | 1,441,430 | 1,424,214 |
| All fi gures in €'000 | Notes | September 30, 2008 | December 31, 2007* |
|---|---|---|---|
| Equity attributable to MLP AG shareholders | (14) | 417,077 | 339,660 |
| Minority interest | – | 63 | |
| total shareholders' equity | (14) | 417,077 | 339,723 |
| Provisions | 45,833 | 43,777 | |
| Deferred tax liabilities | 10,437 | 9,897 | |
| Liabilities towards clients from the banking business | 726,431 | 724,816 | |
| Liabilities towards banks from the banking business | 24,418 | 27,465 | |
| Tax liabilities | 55 | 74 | |
| Other liabilities | 217,179 | 278,461 | |
| total | 1,441,430 | 1,424,214 |
* Previous year's values adjusted. The adjustments are disclosed under note 3.
| All fi gures in €'000 | Notes | 9 months 2008 | 9 months 2007* |
|---|---|---|---|
| Cash fl ow from operating activities | (16) | 66,238 | 43,280 |
| Cash fl ow from investing activities | (16) | –142,201 | –14,198 |
| Cash fl ow from fi nancing activities | (16) | 63,928 | –39,959 |
| changes in cash and cash equivalents | –12,035 | –10,877 | |
| Changes in cash equivalents due to exchange rate movements | – | –82 | |
| Cash and cash equivalents at the end of the period | 25,141 | 72,330 |
| All fi gures in €'000 | 9 months 2008 | 9 months 2007* |
|---|---|---|
| Cash Flow from operating activities | – | –4,262 |
| Cash Flow from investing activities | –7,740** | –2,285 |
| Cash Flow from fi nancing activities | – | – |
| changes in cash an cash equivalents | –7,740** | –6,547 |
| Changes in cash an cash equivalents due to exchange rate movements | – | –82 |
| Cash an cash equivalents at the end of the period | – | 2,532 |
* Previous year's values adjusted. The adjustments are disclosed under note 3.
** The payments in the fi nancial year 2008 are associated with the sale of the insurance
subsidiaries and the subsidiaries in Great Britain and Spain.
| All fi gures in €'000 | Equity attributable | |||||||
|---|---|---|---|---|---|---|---|---|
| to MLP AG shareholders | Minority interest |
Total Share- |
||||||
| Share capital |
Capital- reserves |
Securities to market |
Other marked comprehensive income |
Treasury stock |
Total | holders' equity |
||
| as at jan 1, 2007 (as reported) |
108,781 | 14,487 | 69 | 348,392 | –148,353 | 323,376 | 63 | 323,439 |
| Valuation change | – | – | – | 1,445 | – | 1,445 | – | 1,445 |
| as at Jan 1, 2007 (adjusted) | 108,781 | 14,487 | 69 | 349,836 | –148,353 | 324,820 | 63 | 324,883 |
| Currency translation | – | – | – | –7 | – | –7 | – | –7 |
| Securities marked to market | – | – | –19 | – | – | –19 | – | –19 |
| net income recognised directly in equity |
– | – | –19 | –7 | – | –26 | – | –26 |
| Net profi t* | – | – | – | 26,487 | – | 26,487 | – | 26,487 |
| total recognised income and expense |
||||||||
| for the period | – | – | –19 | 26,480 | – | 26,461 | – | 26,461 |
| Dividend* | – | – | – | –39,967 | – | –39,967 | – | –39,967 |
| Convertible debentures | 30 | 1,347 | – | – | – | 1,377 | – | 1,377 |
| Acquisition of treasury stock | – | – | – | – | – | – | – | – |
| sum of other equity | ||||||||
| capital changes | 30 | 1,347 | – | –39,967 | – | –38,591 | – | –38,591 |
| as at september 30, 2007 | 108,811 | 15,833 | 50 | 336,349 | –148,353 | 312,691 | 63 | 312,754 |
* Adjusted. The adjustments are disclosed under note 3.
| All fi gures in €'000 | Equity attributable to MLP AG shareholders |
Total Share- |
||||||
|---|---|---|---|---|---|---|---|---|
| Share capital |
Capital- reserves |
Securities to market |
Other marked comprehensive income |
Treasury stock |
Total | holders' equity |
||
| as at Jan 1, 2008 |
108,812 | 16,056 | –151 | 370,749 | –155,805 | 339,660 | 63 | 339,723 |
| Securities marked to market |
– | – | –1,939 | – | – | –1,939 | – | –1,939 |
| net income recognised directly in equity |
– | – | –1,939 | – | – | –1,939 | – | –1,939 |
| Net profi t | – | – | – | 14,775 | – | 14,775 | – | 14,775 |
| total recognised income and expense |
||||||||
| for the period | – | – | –1,939 | 14,775 | – | 12,837 | – | 12,837 |
| Dividend | – | – | – | –48,996 | – | –48,996 | – | –48,996 |
| Convertible debentures | 65 | 1,202 | – | – | – | 1,267 | – | 1,267 |
| Acquisition of treasury stock | – | – | – | – | –11,455 | –11,455 | – | –11,455 |
| Reduction of capital – §237 AktG | –10,821 | 10,821 | – | –167,260 | 167,260 | 0 | – | 0 |
| Acquisition of remaining | ||||||||
| shares – BERAG | – | – | – | – | – | – | –63 | –63 |
| Increase of capital – §202 AktG | 9,799 | 113,964 | – | – | – | 123,763 | – | 123,763 |
| sum of other equity | ||||||||
| capital changes | –957 | 125,987 | – | –216,256 | 155,805 | 64,579 | –63 | 64,516 |
| as at september 30, 2008 |
107,856 | 142,043 | –2,089 | 169,268 | 0 | 417,077 | 0 | 417,077 |
| All fi gures in €'000 | Financial services* | ||
|---|---|---|---|
| 3rd quarter 2008 | 3rd quarter 2007 | ||
| revenues | |||
| Revenues | 111,755 | 117,117 | |
| of which with other segments-total | 69 | – | |
| of which with other continuing segments | 69 | – | |
| Other revenues | 3,834 | 5,588 | |
| total revenues | 115,588 | 122,705 | |
| Commission expenses | –41,385 | –43,433 | |
| Interest expenses | –5,946 | –4,539 | |
| Personnel expenses | –20,581 | –16,586 | |
| Depreciation and amortisation | –2,932 | –3,430 | |
| Operating expenses | –41,971 | –38,736 | |
| Earnings from companies accounted for using the equity method | 257 | –41 | |
| segment earnings before interest and taxes (ebit) | 3,030 | 15,940 | |
| Other interest and similar income | 133 | 53 | |
| Other interest an similar expenses | –263 | –126 | |
| fi nance cost | –130 | –72 | |
| segment earnings before taxes (ebt) | 2,900 | 15,868 | |
| Income taxes | – | – | |
| segment earnings from continuing operations after taxes | – | – | |
| segment earnings from discontinued operations after taxes | – | –7,569 | |
| group net profi t incl. minority interest | – | – |
* Previous year's values adjusted. The adjustments are disclosed under note 3.
| Feri Holding |
Consolidation/ Other* |
Total* | |||||
|---|---|---|---|---|---|---|---|
| 3rd quarter 2008 3rd quarter 2007 3rd quarter 2008 3rd quarter 2007 3rd quarter 2008 | 3rd quarter 2007 3rd quarter 2008 3rd quarter 2007 | ||||||
| 8,233 | 9,345 | – | – | –69 | – | 119,918 | 126,461 |
| – | – | – | – | – | – | – | – |
| – | – | – | – | – | – | – | – |
| 2,655 | 5,611 | 3,590 | 4,582 | –3,553 | –3,581 | 6,525 | 12,201 |
| 10,887 | 14,956 | 3,590 | 4,582 | –3,622 | –3,581 | 126,443 | 138,662 |
| –256 | –219 | – | – | 77 | – | –41,564 | –43,652 |
| – | – | – | – | 278 | 66 | –5,669 | –4,473 |
| –6,226 | –5,772 | –864 | –2,700 | – | – | –27,670 | –25,057 |
| –686 | –669 | –863 | –877 | – | – | –4,480 | –4,975 |
| –2,875 | –2,583 | –3,261 | –4,503 | 3,567 | 3,581 | –44,541 | –42,241 |
| – | – | – | – | – | – | 257 | –41 |
| 844 | 5,713 | –1,398 | –3,497 | 299 | 66 | 2,775 | 18,222 |
| 9 | 109 | 1,634 | 1,306 | –319 | –101 | 1,456 | 1,367 |
| –39 | –19 | –1,322 | –1,270 | 41 | 34 | –1,583 | –1,380 |
| –30 | 90 | 312 | 36 | –278 | –66 | –126 | –13 |
| 814 | 5,803 | –1,086 | –3,461 | 21 | 0 | 2,649 | 18,209 |
| – | – | – | – | – | – | –1,828 | –1,360 |
| – | – | – | – | – | – | 821 | 16,849 |
| – | – | – | – | –350 | –939 | –349 | –8,508 |
| – | – | – | – | – | – | 472 | 8,342 |
| All fi gures in €'000 | Financial services* | ||
|---|---|---|---|
| 9 months 2008 | 9 months 2007 | ||
| revenues | |||
| Revenues | 359,518 | 354,257 | |
| of which with other segments-total | 88 | – | |
| of which with other continuing segments | 88 | – | |
| Other revenues | 15,724 | 14,818 | |
| total revenues | 375,242 | 369,075 | |
| Commission expenses | –132,307 | –132,419 | |
| Interest expenses | –16,226 | –12,705 | |
| Personnel expenses | –63,547 | –54,028 | |
| Depreciation and amortisation | –10,248 | –9,701 | |
| Operating expenses | –120,225 | –107,175 | |
| Earnings from companies accounted for using the equity method | 564 | –41 | |
| segment earnings before interest and taxes (ebit) | 33,254 | 53,006 | |
| Other interest and similar income | 319 | 141 | |
| Other interest an similar expenses | –1,100 | –609 | |
| fi nance cost | –781 | –467 | |
| segment earnings before taxes (ebt) | 32,473 | 52,539 | |
| Income taxes | – | – | |
| segment earnings from continuing operations after taxes | – | – | |
| segment earnings from discontinued operations after taxes | –1,034 | –11,262 | |
| group net profi t incl. minority interest | – | – |
* Previous year's values adjusted. The adjustments are disclosed under note 3.
| Feri* | Holding Consolidation/ Other |
Total* | |||||
|---|---|---|---|---|---|---|---|
| 9 months 2008 | 9 months 2007 | 9 months 2008 | 9 months 2007 | 9 months 2008 | 9 months 2007 | 9 months 2008 | 9 months2007 |
| 26,427 | 29,002 | – | – | –444 | – | 385,501 | 383,259 |
| 355 | – | – | – | – | – | – | – |
| 355 | – | – | – | – | – | – | – |
| 7,668 | 8,024 | 15,575 | 16,455 | –10,698 | –10,725 | 28,269 | 28,572 |
| 34,095 | 37,025 | 15,575 | 16,455 | –11,142 | –10,725 | 413,770 | 411,830 |
| –1,050 | –1,755 | – | – | 77 | – | –133,280 | –134,174 |
| – | – | – | – | 278 | 192 | –15,948 | –12,513 |
| –18,569 | –16,704 | –3,206 | –5,026 | – | – | –85,322 | –75,758 |
| –2,045 | –2,017 | –2,593 | –2,664 | – | – | –14,886 | –14,382 |
| –9,140 | –7,857 | –11,187 | –14,214 | 11,124 | 10,725 | –129,427 | –118,521 |
| – | – | – | – | – | – | 564 | –41 |
| 3,290 | 8,693 | –1,411 | –5,449 | 337 | 192 | 35,471 | 56,442 |
| 279 | 211 | 14,226 | 9,356 | –11,022 | –5,795 | 3,802 | 3,913 |
| –106 | –20 | –12,135 | –6,005 | 538 | 285 | –12,803 | –6,348 |
| 173 | 191 | 2,090 | 3,351 | –10,483 | –5,510 | –9,001 | –2,434 |
| 3,464 | 8,884 | 680 | –2,098 | –10,146 | –5,318 | 26,470 | 54,008 |
| – | – | – | – | – | – | –11,340 | –15,162 |
| – | – | – | – | – | – | 15,130 | 38,846 |
| – | – | – | – | 680 | –1,097 | –355 | –12,359 |
| – | – | – | – | – | – | 14,775 | 26,487 |
The interim fi nancial report was prepared by the MLP AG, Wiesloch, Germany. The MLP AG is listed in the Mannheim Commercial Register under the number HRB 332697 with the address Alte Heerstrasse 4o, 69168 Wiesloch, Germany.
Since it was founded in 1971, MLP has been advising academics and other discerning clients in the fi elds of old-age and health provision, insurance cover, fi nancial investments and loans and mortgages. The MLP Group offers fi nancial services, wealth management and banking services.
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 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, 2oo7.
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 2oo7 have been applied to this interim fi nancial report. These are presented in the Group notes of the annual report 2oo7 that can be downloaded from the company's website (www.mlp.de).
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 difference. As a result, differences to reported total amounts may arise when the individual values are added up.
The accounting policies applied are the same as those used in the fi nancial year 2oo7, with the following exceptions:
From 2oo8 MLP consolidates income/expenses from the brokerage business, income/ expenses from the banking business and income/expenses from wealth management under the position "revenues" and "commission or interest expenses". Furthermore, the cash and cash equivalents of MLP Finanzdienstleistungen AG are reclassifi ed from the balance sheet item "cash and cash equivalents" to "receivables from banks from the banking business". Additionally, the item "receivables/liabilities from banking business" has been split into the items "receivables from/liabilities towards clients from banking business" or "receivables from/liabilities towards banks from banking business". In the cases mentioned, the previous year's fi gure was adjusted in accordance with IAS 8. These adjustments have no effect on either the Group result or the earnings per share.
The fi nancial result for the corresponding period of the previous year is to be adjusted with respect to the income statement due to the change introduced at December 31, 2oo7 concerning the treatment of the paid dividend to the minority shareholders of the Feri-Group.
In the fourth quarter of 2oo7 MLP changed the balance sheet preparation of cancellation provisions, and valued these for the fi rst time without compensation effects. Cancellation provisions take account of the risk of a repayment of received commission due to premature discontinuation of brokered insurance contracts. In accordance with IAS 8 this change was to be undertaken retrospectively.
The tables below illustrate the effects of the changes in the accounting policies on the previous year's values:
| All fi gures in €'000 | Dec 31, 2007 Adjusted |
Dec 31, 2007 as reported |
+ / – | Of which reporting change |
|---|---|---|---|---|
| Receivables from clients from banking business | 260,297 | – | 260,297 | 260,297 |
| Receivables from banks from banking business | 603,951 | – | 603,951 | 603,951 |
| Receivables from banking business | – | 771,751 | –771,751 | –771,751 |
| Other receivables and other assets | 162,075 | 157,263 | 4,812 | 4,812 |
| Cash and cash equivalents | 37,251 | 134,559 | –97,309 | –97,309 |
| Liabilities towards clients due to banking business | 724,816 | – | 724,816 | 724,816 |
| Liabilities towards banks due to banking business | 27,465 | – | 27,465 | 27,465 |
| Liabilities due to banking business | – | 752,281 | –752,281 | –752,281 |
| All fi gures in €'000 | 9 months 2007 adjusted |
9 months 2007 as reported |
+ / – | Of which Provisions for cancellations |
Of which reporting change |
|---|---|---|---|---|---|
| Revenues | 383,259 | – | 383,259 | 4,345 | 378,914 |
| Revenues-brokerage business | – | 289,792 | –289,792 | – | –289,792 |
| Revenues-banking business | – | 59,059 | –59,059 | – | –59,059 |
| Revenues-wealth management | – | 29,002 | –29,002 | – | – 29,002 |
| Other revenues | 28,572 | 28,572 | – | – | – |
| total revenues | 411,830 | 406,424 | 5,407 | 4,345 | 1,061 |
| Commission expenses | –134,174 | – | –134,174 | –2,347 | –131,827 |
| Interest expenses | –12,513 | – | –12,513 | – | –12,513 |
| Expenses for brokerage business | – | –128,658 | 128,658 | – | 128,658 |
| Expenses for banking business | – | –16,237 | 16,237 | – | 16,237 |
| Expenses for wealth management | – | –1,755 | 1,755 | – | 1,755 |
| Personnel expenses | –75,758 | –75,758 | – | – | – |
| Depreciation and amortisation | –14,382 | –14,382 | – | – | – |
| Operating expenses | –118,521 | –116,181 | –2,340 | – | –2,340 |
| Earnings from companies accounted | |||||
| for using the equity method | –41 | –41 | – | – | – |
| earnings before interest | |||||
| and taxes (ebit) | 56,442 | 53,413 | 3,029 | 1,998 | 1,031 |
| Other interest and | |||||
| similar income | 3,913 | 4,975 | –1,061 | – | –1,061 |
| Other interest and | |||||
| similar expenses | –6,348 | –4,227 | –2,120 | – | –2,120 |
| fi nance cost | –2,434 | 747 | –3,182 | – | –3,182 |
| earnings before taxes (ebt) | 54,008 | 54,160 | –153 | 1,998 | –2,151 |
| Income taxes | –15,162 | –14,482 | –679 | –679 | – |
| earnings from continuing | |||||
| operations after taxes | 38,846 | 39,678 | –832 | 1,319 | –2,151 |
| earnings from discontinued | |||||
| operations after taxes | –12,359 | –12,359 | – | – | – |
| net profi t (total) | 26,487 | 27,319 | –832 | 1,319 | –2,151 |
| Earnings per share in € | |||||
| From continuing operations | |||||
| basic | 0.39 | 0.40 | |||
| diluted | 0.38 | 0.39 | |||
| Earnings per share in € | |||||
| From continuing and discontinued operations | |||||
| basic | 0.27 | 0.27 | |||
| diluted | 0.26 | 0.27 |
On January 1, 2oo8, and thus earlier than legal requirements, the Group switched to using the new standard for segment reporting - IFRS 8 "Operating segments". Up until December 31, 2oo7 the segment reporting was undertaken in accordance with IAS 14 "Segment reporting" (see notes item 17 "Notes on Group reporting by segment"). The previous year's fi gures were adjusted accordingly. The changeover to IFRS 8 had no effect on either the Group result or the earnings per share.
The fi rst-time application of IFRIC 11 "Group and Treasury share transactions", the use of which became mandatory from January 1, 2oo8, had no effect on the presentation of the assets, fi nancial or profi t situation of the Group due to the lack of relevance of this content to MLP. Furthermore, IAS 39 and IFRS 7 were amended with respect to the reclassifi cation of fi nancial assets (applicable to reclassifi cations covered by these changes to the standard occurring after July 1, 2oo8). The amended IAS 39 now also permits in exceptional cases the reclassifi cation of certain fi nancial assets belonging to the categories "held for trading" and "available for sale". MLP didn't exercise this option.
On February 29, 2oo8, MLP acquired 1oo% of the voting rights in TPC-Group GmbH, Hamburg in order to strengthen its business in the area of occupational pensions. TPC-Group GmbH was incorporated into the Group interim accounts from the date of acquisition (February 29, 2oo8). In the third quarter of 2oo8, TPC-Group GmbH was amalgamated with BERAG Beratungsgesellschaft für betriebliche Altersversorgung und Vergütung mbH.
Prior to the acquisition of the company and until its amalgamation with BERAG Beratungsgesellschaft für betriebliche Altersversorgung und Vergütung mbH, TPC-Group GmbH performed only holding company functions as a parent company. It has hold 100% of the shares in TPC THE PENSION CONSULTANCY GmbH ("TPC Pension Consultancy") and in TPC THE PRIVATE CONSULTANCY GmbH ("TPC Private Consultancy"). In the third quarter TPC Pension Consultancy GmbH and TPC Private Consultancy were amalgamated into TPC-Group GmbH.
The acquired TPC-Group strengthens MLP through its specialisation in consulting within the area of occupational pension provision (Primary areas of consultancy: Pension scheme solutions for leading trade associations, advising larger medium-sized companies and the implementation of innovative concepts such as life-time working accounts)
The fi elds of business of TPC Pension Consultancy GmbH include the provision of consultancy services for employers and employees within the area of old-age pension provision as well as its conceptual structure and contractual implementation with selected service partners; brokerage of investment and contract conclusion within the meaning of § 2, Section 6, No. 8 of KWG (German Banking Law) and the activity as an agent middleman within the meaning of § 93 HGB (German Commercial Code).
The activities of TPC Private Consultancy GmbH include holistic consultation services to wealthy private clients as well as the brokerage of loan contracts, the brokerage of insurance policies, participations in limited partnerships as well as certain investment funds. In addition, the company offers commercial brokerage of contract conclusion for plots of land, leasehold rights and commercial space.
For the acquisition of all shares in the TPC-Group GmbH, a total purchase price of € 8,3o1 thsd. accrued. This is made up of the following:
| All fi gures in €'000 | 2008 |
|---|---|
| Fixed purchase price component | 1,000 |
| Variable purchase price component (anticipated value) | 6,304 |
| Incidental acquisition expenses | 997 |
| total purchase price | 8,301 |
The purchase price split from this acquisition was fi nally completed in the third quarter 2oo8. The purchase price allocation led to the capitalization of additional intangible assets ("Client contracts") amounting to € 1,426 thsd. The remaining business and company value according to the purchase price allocation is attributable to various factors. These primarily include general synergies and cost-saving potential in the areas of product procurement and sales. In addition, the acquisition results in a signifi cant strengthening of MLP's market position in occupational pensions. The following table provides an overview of the differential amount:
| Acquired net assets – All fi gures in €'000 | IFRS carrying amount (before purchase) |
Adjustment | Fair value |
|---|---|---|---|
| Intangible assets | 78 | 1,426 | 1,504 |
| Property, plant and equipment | 204 | – | 204 |
| Financial investments | 52 | – | 52 |
| Receivables and other assets | 3,606 | – | 3,606 |
| Cash and cash equivalents | – | – | – |
| Provisions | –123 | – | –123 |
| Liabilities | –8,902 | – | –8,902 |
| Deferred tax liabilities | – | –427 | –427 |
| total net assets | –5,086 | 999 | –4,087 |
| Proportion of net assets | 100,00 % | –4,087 | |
| Good will | 12,388 | ||
| total purchase price | 8,301 | ||
| Accrued liabilities | 6,436 | ||
| Net cash outfl ow from acquisition | 1,997 |
The TPC-Group's contribution to the MLP Group interim result amounted to € –1,oo5 thsd. (since the acquisition date to nine months result: € –2,639 thsd.). If the integration had taken place at the start of the year, the nine months result would have amounted to € 13,871 thsd. and the revenues from continuing operations for the fi rst nine months of 2oo8 would have totalled € 385,863 thsd.
In addition, in the third quarter of 2oo8, BAV GmbH was merged into MLP Finanzdienstleistungen AG and BERAG Versicherungs-Makler GmbH was amalgamated into BERAG Beratungsgesellschaft für betriebliche Altersversorgung und Vergütung mbH.
Despite an improvement in the third quarter of key macroeconomic indicators that impact MLP's business development – such as the levels of unemployment or disposable income – the fi nancial crisis and the associated fear of recession remained the overriding negative factors infl uencing demand on the part of clients for professional fi nancial consultation. However, in the fourth quarter the Group expects to achieve higher earnings from continuing operations than in the preceding quarters.
| All fi gures in €'000 | 3rd quarter 2008 3rd quarter 2007 | 9 months 2008 | 9 months 2007 | |
|---|---|---|---|---|
| Old-age pension provision | 72,757 | 76,039 | 227,103 | 208,389 |
| Wealth management | 19,569 | 23,575 | 61,531 | 71,848 |
| Health insurance | 10,260 | 10,055 | 33,143 | 44,752 |
| Non-life insurance | 2,926 | 2,877 | 22,028 | 19,476 |
| Loans and mortgages | 2,827 | 4,375 | 8,965 | 11,969 |
| Other commissions and fees | 842 | 892 | 2,583 | 2,158 |
| commissions and fees | 109,181 | 117,813 | 355,353 | 358,591 |
| interest income | 10,737 | 8,648 | 30,147 | 24,668 |
| total | 119,918 | 126,461 | 385,501 | 383,259 |
Personnel expenses increased from € 75,758 thsd. to € 85,322 thsd., primarily due to the fi rst time incorporation of the TPC-Group, general salary increases, to off compensatory payments and additional personnel in the wealth management area.
At September 3o, 2oo8, the MLP Group had the following numbers of employees in the strategic fi elds of business:
| September 30, 2008 | September 30, 2007 | |||
|---|---|---|---|---|
| parttime | parttime | |||
| employees | employees | |||
| Financial services | 1,853 | 480 | 1,655 | 462 |
| Feri | 253 | 53 | 248 | 69 |
| Holding | 10 | 1 | 9 | – |
| total | 2,116 | 534 | 1,912 | 531 |
| All fi gures in €'000 | 3rd quarter 2008 3rd quarter 2007 | 9 months 2008 | 9 months 2007 | |
|---|---|---|---|---|
| IT costs | 12,339 | 10,237 | 33,845 | 26,468 |
| Cost of premises | 6,019 | 5,567 | 17,271 | 16,540 |
| Audit and consultancy costs | 3,101 | 4,670 | 10,247 | 11,957 |
| Training and seminars | 3,768 | 2,890 | 10,251 | 8,993 |
| Advertising expenses | 2,090 | 1,756 | 7,455 | 5,619 |
| Communication requirements | 2,029 | 2,147 | 6,723 | 6,140 |
| Allowances and bad debts | 2,013 | 1,298 | 5,730 | 4,732 |
| Expenses-fi eld staff | 666 | 2,041 | 2,605 | 4,621 |
| Representation, entertainment expenses | 2,154 | 1,792 | 5,413 | 4,549 |
| Costs-MLP Card | 808 | 779 | 2,543 | 2,283 |
| Laptop rental | 828 | 821 | 2,473 | 2,414 |
| Offi ce supplies | 633 | 695 | 2,221 | 2,306 |
| Travelling costs | 672 | 613 | 2,021 | 1,695 |
| Costs- securities transactions | 607 | 548 | 1,997 | 1,807 |
| Insurances | 502 | 453 | 1,996 | 1,899 |
| Premiums and fees | 263 | 900 | 1,034 | 1,764 |
| Sundry operating expenses | 6,047 | 5,033 | 15,601 | 14,734 |
| total | 44,541 | 42,241 | 129,427 | 118,521 |
The increase in IT costs is primarily attributable to higher service and maintenance costs and, as a result of a broadened service spectrum, to higher costs for the computer centre. The higher advertising and publicity costs are mainly due to a strengthening of sales activities with cooperation partners as well as to a greater medial presence. The expenses for training and seminars rose due to extended training activities by the sales team. The increase in expenses for representation and entertainment is largely attributable to higher costs for training and conference events. The reduction in fees and premiums is mainly due to the fact that the previous year still included the payment of premiums to the protection schemes of two institutes. Sundry operating expenses mainly comprises other rents, other personnel costs as well as car costs.
| All fi gures in €'000 | 3rd quarter 2008 | 3rd quarter 2007 | 9 months 2008 | 9 months 2007 |
|---|---|---|---|---|
| Other interest and similar income | 1,456 | 1,366 | 3,802 | 3,907 |
| Income from loans | – | 1 | – | 6 |
| other interests and similar income | 1,456 | 1,367 | 3,802 | 3,913 |
| Interest and similar expenses | –1,297 | –1,402 | –12,178 | –5,975 |
| Discount adjustment on pension provisions | –144 | 22 | –431 | –368 |
| Losses on the disposal of fi nancial investments | –142 | – | –193 | –4 |
| interest and similar expenses | –1,583 | –1,380 | –12,803 | –6,348 |
| total | –126 | –13 | –9,001 | –2,434 |
The change in the fi nance cost is primarily attributable to dividend payments to the other shareholders of Feri Finance AG which is disclosed in the income statement as interest expenses. The payments in the fi rst nine months 2oo8 amounted to € 7,83o thsd. (previous: € 2,151 thsd.).
The reduction in receivables from banks from € 6o3,951 thsd. to € 545,112 thsd. results mainly from the transfer of the profi t generated in the fi nancial year 2oo7 by MLP FDL to MLP AG.
| All fi gures in €'000 | Sept 30, 2008 | Dec 31, 2007 |
|---|---|---|
| Available for sale: | ||
| Securities | 40,148 | 34,741 |
| Investments | 4,239 | 3,629 |
| Held to maturity securities | 24,811 | 13,963 |
| Loans and receivables | 105,148 | 66 |
| total | 174,346 | 52,400 |
The increase of the loans and receivables is mainly caused by the investment of funds arising from the capital increase in fi xed-term investments (see notes item 14) and by the acquisition of investment funds.
Due to the seasonally stronger year-end business, high receivables from insurance companies as well as high liabilities towards commercial agents at December 31, 2oo7 had to be shown which were then balanced out in the fi rst quarter of 2oo8. A lower amount of receivables and liabilities were built up due to the comparatively lower volume of new business in the third quarter of 2oo8.
This item also includes shares in an investment fund intended for sale. The decrease of € 3,858 thsd. to € 8,296 thsd. is primarily due to disposals.
The subscribed capital consists of 1o7.855.709 (December 31, 2oo7: 1o8,812,289) no par value common shares. The change results in part from the withdrawal of own shares amounting to 1o,82o,765 shares as well as to the action based on the decision by the Executive Board with the approval of the Supervisory Board on 21st August 2oo8 to issue 9,799,152 new ordinary shares against cash investments amounting to € 123,763,29o from approved capital. The new shares were issued without subscription rights by way of an expedited placement. In the fi nancial year 2oo8, 65,o33 new shares were issued through the exercising of rights of conversion. In total, so far 236,636 new shares have been issued through convertible loan stock.
The capital reserve was increased by € 1o,82o,765 in accordance with the withdrawal of own shares, and by € 113,964,138 on account of the capital increase.
Up to December 31, 2oo7 MLP AG bought back a total of 9,648,6o9 of its own shares. In the fi rst quarter of 2oo8 further 1,172,156 own shares were acquired. All 1o,82o,765 own shares were withdrawn in March 2oo8.
In accordance with a resolution passed at the Annual General Meeting on May 16, 2oo8, a dividend of € o.5o per share was to be paid for the fi nancial year 2oo7. For the fi nancial year 2oo6 MLP AG distributed a dividend amounting to € o.4o per share in the second quarter of 2oo7.
In the course of restructuring its foreign business in 2oo7, MLP sold MLP Private Finance plc., London, Great Britain and MLP Private Finance Correduria de Seguros S. A., Madrid, Spain. The expenses and revenues from these and previously discontinued operations are shown in the following table:
| All fi gures in €'000 | 3rd quarter 2008 3rd quarter 2007 | 9 months 2008 | 9 months 2007 | |
|---|---|---|---|---|
| Revenues | – | 428 | – | 2,130 |
| Other revenues | – | 69 | – | 101 |
| total revenues | – | 497 | – | 2,231 |
| Other expenses | – | –1,801 | – | –7,269 |
| earnings before interest and taxes (ebit) | – | –1,304 | – | –5,038 |
| Finance cost | – | 31 | – | 74 |
| earnings before taxes (ebt) | – | –1,272 | – | –4,963 |
| Income taxes | – | – | – | – |
| operating result | – | –1,272 | – | –4,963 |
| Earnings from the sale of operations before taxes | –380 | –7,289 | –488 | –7,334 |
| Income taxes | 30 | 53 | 133 | –62 |
| total result from discontinued operations | –349 | –8,508 | –355 | –12,359 |
| earnings per share in € | ||||
| From discontinued operations | ||||
| basic | 0.00 | –0.08 | 0.00 | –0.12 |
| diluted | 0.00 | –0.08 | 0.00 | –0.12 |
The operating result in the fi rst nine months 2oo7 contains only the expenses and income of the subsidiaries in Great Britain and Spain.
The loss shown in the position "Earnings from the sale of operations before taxes" in the fi rst nine months 2oo8 includes run-on expenses and income from earlier discontinued operations.
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. The cash and cash equivalents disclosed in the balance sheet have been reduced by € 17 thsd. (previous year: € 17 thsd.) which are subject to other restrictions.
Cash and cash equivalents are split across the following balance sheet items:
| All fi gures in €'000 | Sept 30, 2008 | Sept 30, 2007 |
|---|---|---|
| Cash and cash equivalents | ||
| Consolidated balance sheet | 25,806 | 53,339 |
| Restraints | –17 | –17 |
| Other investments < 3 months | 146 | 17,500 |
| Liabilities to banks due on demand | –794 | –1,025 |
| cash and cash equivalents | 25,141 | 69,798 |
The receivables from the MLP Finanzdienstleistungen AG of the brokerage business are not included in the fi nancial resources because they are attributable to the banking activities.
The operative cash fl ow is primarily infl uenced by the amalgamation-associated reclassifi cation of cash and cash equivalents of MLP Finanzdienstleistungen AG into the item "Receivables from banks from the banking business" (see notes item 3). Operative cash fl ow was mainly infl uenced by reclassifi cation of monies at MLP Finanzdiensleistungen AG under the item "Receivables from banks from banking business" in connection with the amalgamation of MLP Finanzdienstleistungen Aktiengesellschaft with MLP Bank (see notes item 3). The increase in cash fl ow from fi nancing activity primarily results from the capital increase amounting to € 123,763 thsd. The investment of funds from the capital increase is primarily responsible for the change in cashfl ow from investment activity.
Since January 1, 2oo8, and thus earlier than legally required, the Group has been using IFRS 8 "Operating segments". IFRS 8 requires the provision of information about the operative segments of the Group. The standard replaces IAS 14 "Segment reporting" and takes over the "Management Approach" for the segment reporting according to IFRS, as it is realised in SFAS 131. The classifi cation of the reporting segments has thus to follow the one for the internal reporting.
For the purpose of segment reporting in accordance with IAS 14 "Segment reporting" the MLP Group previously structured itself till December 31, 2oo7 into the following (primary) segments:
Following the amalgamation of MLP Finanzdienstleistungen Aktiengesellschaft and MLP Bank AG in 2oo7, the internal reporting was adjusted in 2oo8 and no longer differentiates between the business fi elds "Consulting and sales" and "Banking". For the purpose of segment reporting in accordance with IFRS 8, these now jointly form the operative segment "fi nancial services".
For the purpose of segment reporting in accordance with IFRS 8 "Operating segments", the MLP Group structures itself since January 1, 2oo8 into the following operative segments:
The fi nancial services segment consists of consulting services for academics and other discerning clients, particularly with regards to insurance, investments, occupational old-age pension provision schemes and fi nancing as well as the brokerage of contracts concerning these fi nancial services. The segment also includes the administration of fi nancial portfolios, the trustee credit business and loan and credit card business. With 2,491 consultants and a comprehensive scope of services, the Group currently caters for some 739,ooo clients in the named segments.
This segment, focussing on the brokerage business, is made up of MLP Finanzdienstleistungen AG, Wiesloch, BERAG Beratungsgesellschaft für betriebliche Altersversorgung und Vergütung mbH, Bremen, MLP Finanzdienstleistungen AG (previously MLP Vermögensberatung AG), Vienna, Austria and MLP Hyp GmbH, Schwetzingen.
The discontinued operations of the fi nancial services segment are made up of the subsidiaries MLP Private Finance plc., London, Great Britain, MLP Private Finance Correduria de Seguros S. A., Madrid, Spain, and MLP Private Finance AG, Zurich, Switzerland.
The business operations of the Feri segment cover wealth and investment consulting. This segment consists of Feri Finance AG für Finanzplanung und Research, Bad Homburg v.d. Höhe, Feri Wealth Management GmbH, Bad Homburg v.d. Höhe, Feri Institutional Advisors GmbH, Bad Homburg v.d. Höhe, and Feri EuroRating Services AG, Bad Homburg v.d. Höhe.
MLP AG, Wiesloch constitutes the Holding segment. The main internal services and activities are combined in this segment.
The accounting and valuation principles in the interim Group accounts correspond to the principles used in the Group accounts at December 31, 2oo7. This also applies to transactions between the operative segments. The management reaches its decisions about resource allocation and the assessment of segment performance based on the segment result.
Presentation of the individual business sectors (primary segments) takes place after consolidation of transactions within the particular business sectors, but before cross segment consolidation.
Intrasegment supplies and services are settled in principle at normal market prices. In the case of intra-group allocations, an appropriate general overhead surcharge is levied on the direct costs actually incurred.
Segment reporting is classifi ed mainly in conformity with the consolidated income statement in order to achieve greater transparency as regards earning power and prospects.
Depending on the future economic development of TPC-Group GmbH, Hamburg, the fi xed purchase price component can be supplemented with a variable purchase price component of up to € 25.2 million. MLP expects that this variable component of the purchase price will amount to € 6.4 million (purchase price obligation recorded as liability at the balance sheet date). The variable purchase price component is due in 2o13 and is expected to lead to an outfl ow of funds of around € 7.4 million.The payout of the maximum amount leads to an outfl ow of funds amounting to € 29.o million.
Beyond this, there were no other signifi cant changes in the contingent liabilities and other obligations during the period under review.
Compared to December 31, 2oo7 there were no signifi cant changes in the relationships and no signifi cant business with related companies and persons.
There were no notable events after the balance sheet date which may affect the MLP Group's net assets, fi nancial position or results of operations.
Wiesloch, November 1o, 2oo8 MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Gerhard Frieg Muhyddin Suleiman
Dr. Uwe Schroeder-Wildberg (Chief Executive Offi cer, appointed until December 31, 2o12)
Gerhard Frieg (Product management and purchasing, appointed until May 18, 2o12)
Muhyddin Suleiman (Sales and Marketing, appointed until September 3, 2o12)
Manfred Lautenschläger (Chairman)
Dr. Peter Lütke-Bornefeld (Vice Chairman)
Dr. Claus-Michael Dill
Johannes Maret
Maria Bähr (Employee Representative)
Norbert Kohler (Employee Representative)
Tel +49 (o) 6222 • 3o8 • 832o Fax +49 (o) 6222 • 3o8 • 1131 [email protected]
Tel +49 (o) 6222 • 3o8 • 831o Fax +49 (o) 6222 • 3o8 • 1131 [email protected]
| 2008 | ||
|---|---|---|
| November 26 – 27 | Roadshow | Europe |
| November 27 | LBBW Corporate Conference | London, UK |
| 2009 | ||
| January 12 – 14 | DrKW German Investment Seminar | New York, USA |
| January 13 | Cheuvreux Insurance Conference | Paris, France |
| January 19 – 21 | Cheuvreux German Corporate Conference | Frankfurt a. M., Germany |
| February 18 | Preliminary Results of 2008 | |
| March 26 | MLP Group Annual Report 2008 | |
| May 13 | Results for the 1st Quarter 2009 | |
| May 28 | Annual General Meeting 2009 | Mannheim, Germany |
| August 12 | Results for the 2nd Quarter 2009 | |
| November 11 | Results for the 3rd Quarter 2009 |
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 differing 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 differing from expectations. The prognoses 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.de
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