Quarterly Report • May 14, 2010
Quarterly Report
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Interim Group Report for the fi rst quarter 2010
[Table 01] MLP key fi gures
| All fi gures in € million | 1st quarter 2010 | 1st quarter 20091 | Change |
|---|---|---|---|
| Continuing operations | |||
| Total revenue | 121.2 | 125.5 | – 3.4 % |
| Revenue | 115.3 | 120.8 | – 4.6 % |
| Other revenue | 5.9 | 4.7 | 25.5 % |
| Earnings before interest and tax (EBIT) | 4.0 | 3.2 | 26.2 % |
| EBIT margin (%) | 3.3 % | 2.5 % | – |
| Earnings from continuing operations | 2.0 | 0.1 | > 100.0 % |
| Earnings per share (diluted) in € | 0.02 | 0.00 | > 100.0 % |
| MLP Group | |||
| Net profi t (total) | 1.7 | – 1.4 | > 100.0 % |
| Earnings per share (diluted) in € | 0.02 | – 0.01 | > 100.0 % |
| Cash fl ow from operating activities | 43.3 | 55.3 | – 21.7 % |
| Capital expenditure | 1.0 | 1.5 | – 33.3 % |
| Shareholders' equity | 421.9 | 418.52 | 0.8 % |
| Equity ratio | 29.1 % | 28.4 %2 | – |
| Balance sheet total | 1,452.0 | 1,475.52 | – 1.6 % |
| Clients3 | 764,500 | 785,5002 | – 2.7 % |
| Consultants3 | 2,384 | 2,3832 | – |
| Branch offi ces3 | 212 | 2382 | – 10.9 % |
| Employees | 1,706 | 2,079 | – 17.9 % |
| Arranged new business3 | |||
| Old-age provisions (premium sum in € billion) | 1.0 | 0.9 | 11.1 % |
| Health insurance (annual premium) | 15.9 | 13.2 | 20.5 % |
| Loans and mortgages | 262.0 | 236.0 | 11.0 % |
| Assets under management (in € billion) | 17.74 | 17.02,4 | 4.1 % |
Adjustment of previous year's fi gures, see note 3
As at December 31, 2009
3 Continuing operations
4 Based on the method of calculation employed by the German Association of Investment and Asset Management (BVI)
| 5 Interim Management Report for the fi rst quarter 2010 | |
|---|---|
| 5 Macroeconomic environment | |
| 6 Situation within the industry and the competitive environment | |
| 9 Company situation | |
| 9 Results of operations | |
| 13 Net assets | |
| 15 Financial position | |
| 16 Personnel | |
| 17 Communication and advertising activities | |
| 17 Legal corporate structure and executive bodies | |
| 18 Segment report | |
| 20 Risk report | |
| 20 Related party disclosures | |
| 20 Outlook for the current fi nancial year/forecast | |
| 23 Events subsequent to the reporting date | |
| 24 Investor Relations | |
| 26 Income statement and statement of comprehensive income | |
| 27 Consolidated statement of fi nancial position | |
| 28 Consolidated statement of cash fl ows | |
| 29 Statement of changes in equity | |
| 30 Notes to the consolidated fi nancial statements | |
| 41 List of fi gures and tables | |
| 42 Executive bodies at MLP AG | |
| 43 Financial calendar |
MLP is Germany's leading independent consulting fi rm. Supported by comprehensive research, the Group provides a holistic consulting approach that covers all economic and fi nancial questions for private and corporate clients, as well as institutional investors. The key aspect of the consulting approach is the independence of insurance companies, banks and investment fi rms. The MLP Group manages total assets of around € 18 billion and supports more than 760,000 private and 4,000 corporate clients. MLP was founded in 1971 and holds a full banking licence.
The concept of the founders, which still remains the basis of the current business model, is to provide long-term consulting for academics and other discerning clients in the fi elds of old age provision, wealth management, health insurance, non-life insurance, fi nancing and banking. Those with assets above € 5 million are looked after by the subsidiary Feri Family Trust. Moreover, the Group provides consulting services to institutional investors via Feri Institutional Advisors GmbH. Supported by its subsidiary TPC and the joint venture HEUBECK-FERI Pension Asset Consulting GmbH, MLP also provides companies with independent consulting and conceptual services in all issues pertaining to occupational pension provision and asset and risk management.
Source: Federal Statistic Offi ce, German Institute for Economic Research (DIW)
At the end of 2009, the German economy – in which MLP generates nearly 100 % of its total revenue – was still characterised by the economic and fi nancial crisis. However, since the start of 2010 signs of a recovery have been evident. Improved industrial order books and stimulus from foreign trade during the fi rst quarter led companies to adopt a more positive outlook. The German Institute for Economic Research (DIW) estimates that the gross domestic product (GDP) in the fi rst quarter grew by 0.3 % compared to the preceding quarter. However, private consumption in the fi rst three months of the year provided almost no stimulus to the economic recovery. The labour market remained resilient during the fi rst quarter – an aspect that experts attribute primarily to the implementation of short time working practices. In March, unemployment fell due to the tentative economic pick up at the start of the year – even after taking the usual seasonal fl uctuations into account. The unemployment rate in March 2010 fell to 8.5 %.
In the fi rst quarter, our clients remained concerned about the threat of rising unemployment or falling incomes. These perceived expectations of the future represent a central macroeconomic indicator for our business development. Accordingly, our clients remained hesitant with respect to long-term provision and investment commitments. Revenue in our important old-age provision and health insurance business areas fell slightly.
Do you think the measures you have been taking so far with respect to your old-age provision are generally adequate or inadequate?
Source: Allensbach Institute for Public Opinion Research/Postbank: Old-age provision in Germany 2009/2010
In the fi rst quarter of 2010 the market for old-age provision was still not able to benefi t from the brightening economic landscape – an aspect exemplifi ed by the continued hesitancy on the part of clients with respect to private old-age provision. A study carried out by the Allensbach Institute for Public Opinion Research and commissioned by the Postbank shows that despite the existence of large provision gaps [Figure 02], there has been a fall in the general level of willingness in Germany towards investing in private old-age provision. According to this study, more than 17 % of the entire workforce have reduced or terminated their private old-age provision as a consequence of the economic and fi nancial crisis. One in three of the working population state that they would not receive any income from private old-age provision policies in their old age. MLP was unable to escape this trend. Revenue in the old-age provision area fell by 6.4 % in the period under review.
Percentage of people who have considered taking out further supplementary health insurance
Base: Federal Republic of Germany, people insured in the state healthcare system Source: MLP Health Report 2009
In contrast to the market for old-age provision, the market for health provision in the fi rst quarter developed more satisfactorily. The continuing political discussion about the structure and fi nanceability of the healthcare system has heightened awareness among broad sectors of the population that the state health insurance funds are no longer able to provide cover for an adequate level of treatments and services. The levying of additional premiums by many of the state insurance funds, coupled with their shrinking catalogue of off ered services and treatments, are leading consumers to increasingly secure their health provision through private insurance. The level of interest in switching to private health insurance or in taking out supplementary health insurance policies therefore remains high. MLP was able to benefi t from this development. In the private health insurance business, annual premiums rose from € 13.2 million to € 15.9 million. However, this positive development in new business was not yet fully refl ected in the revenue from the health insurance business, which fell slightly from € 13.7 million to € 12.9 million.
[Figure 04] Infl ows and outfl ows in various types of mutual investment funds in Germany in Q1 2010 (in € billion)
Source: German Federal Association of Investment and Asset (BVI)
Following the signifi cant impact of the economic and fi nancial crisis on the wealth management market, it is now showing signs of a return to more dynamic development. According to the Federal Association of Investment and Asset Management (BVI), the investment industry took in € 31.4 billion of new money during the fi rst quarter of the year (fi rst quarter 2009: € 4.2 billion). Mutual funds accounted for € 10.6 billion of this fi gure. At March 31, 2010, total fund assets amounted to € 681.1 billion, thus taking the volume of mutual funds back above the corresponding fi gure before the economic and fi nancial crisis.
During the period under review, mixed and open property mutual funds recorded infl ows of € 5.4 billion and € 3.2 billion respectively. Equity funds took in € 2.3 billion in the fi rst three months of this year, and fi xed income funds € 2.0 billion. Only money market funds experienced a fall, recording outfl ows of € 3.3 billion.
MLP too was able to further increase its assets under management – which amounted to € 17.7 billion at the end of the fi rst quarter (December 31, 2009: € 17.0 billion).
Within the highly fragmented German fi nancial services market, the economic and fi nancial crisis has led to further strengthening of the consolidation process that was initially triggered by the tightening of the statutory framework conditions through the introduction of various laws and regulations (EU Insurance Mediation Directive, Markets in Financial Instruments Directive (MiFID) and the reform of the German Insurance Contract Law). In addition, discussions took place during the period under review between politicians and consumer protectionists concerning further measures for improving the quality of fi nancial consulting in Germany. In this respect, the Federal Ministry for Consumer Protection for example, is seeking to secure binding minimum standards for all fi nancial brokers as well as a demanding professional qualifi cation. Furthermore, the Federal Ministry of Finance has announced a planned legislative initiative to improve consumer protection. One of the central aspects of this intended legislation will be the application of the German Securities Trading Act (WpHG) to consulting and brokerage activities concerning closed-end funds. It is to be expected that there will be further tightening of the regulations, which will also accelerate the pace of consolidation within the industry.
MLP has begun the fi nancial year 2010 with a signifi cant rise in earnings – despite having to operate in a market environment still beset by the eff ects of the economic and fi nancial crisis. In the fi rst quarter, earnings before interest and tax (EBIT) rose by 26.2 % to € 4.0 million (€ 3.2 million).
Total revenue – signifi cantly aff ected by lower interest income – fell slightly to € 121.2 million (€ 125.5 million). Although the market environment remains generally tense, we are nevertheless seeing positive signs in our private client and corporate client business areas and have laid a good foundation in the fi rst quarter for the coming months. All the early indicators for future revenue development moved in a positive direction in the period from January to March. Accordingly, MLP welcomed 8,000 new clients, 1,400 more than in the same period last year (6,600). Assets under Management, which form the foundation for future revenue in wealth management, climbed from € 17.0 billion (December 31, 2009) to € 17.7 billion. New business in old-age provision also rose compared to the same period last year, increasing from € 0.9 billion to € 1.0 billion. Occupational pension scheme business accounted for 15 % of this new business and thus contributed to a higher degree than ever before. In private health insurance, annual premiums rose to € 15.9 million (€ 13.2 million).
[Figure 06] Total revenue in continuing operations (in € million)
The positive development in new business is not yet fully refl ected in the revenue from commissions and fees. Here, revenue in old-age provision amounted to € 58.9 million and thus remained around 6.4 % below the previous year (€ 62.9 million). In the private health insurance business, revenue fell to € 12.9 million (€ 13.7 million). However, MLP achieved growth in the wealth management business, which rose by 6.4 % to € 18.3 million (€ 17.2 million). Continued high demand for greater risk provision helped increase revenue from non-life insurance by 7.9 % to € 16.4 million (€ 15.2 million). Combining all the consulting areas together, revenue from commissions and fees totalled € 109.1 million – almost equalling the previous year's fi gure of € 111.6 million. However, interest income was clearly regressive, falling by 32.6 % to € 6.2 million (€ 9.2 million) due to the prevailing low interest rates. Total revenue thus amounted to € 121.2 million (€ 125.5 million).
Commission expenses fell from € 41.5 million to € 40.3 million. This fi gure contains the performance-related commission payments to our sales force.
Due to the generally lower level of interest rates compared to the fi rst quarter of 2009, interest expenses fell from € 4.6 million to € 2.5 million. This led to an interest result of € 3.7 million (€ 4.6 million).
Within the framework of the cost reduction programme that was initiated in the fi rst quarter of 2009, MLP succeeded in lowering its fi xed costs (personnel expenses, depreciation and amortisation, other operating expenses) by a further € 1.8 million. This fall was attributable, in particular, to reductions in personnel expenses as well as in depreciation and amortisation. Personnel expenses fell by 4.5 % to € 27.6 million, due primarily to the reduction in the number of employees by 116 people (excluding marginal part-time employees). Depreciation and amortisation also reduced, decreasing from € 4.6 million to € 4.1 million. Other operating expenses amounted to € 42.7 million and thus remained at exactly the same level as in the fi rst quarter of 2009.
| All fi gures in € million | 1st quarter 2010 | 1st quarter 2009 | Change |
|---|---|---|---|
| Total revenue | 121.2 | 125.5 | – 3.4 % |
| Earnings before interest and tax (EBIT) | 4.0 | 3.2 | 26.2 % |
| EBIT margin | 3.3 % | 2.5 % | – |
| Finance cost | – 0.5 | – 1.5 | – 66.7 % |
| EBT | 3.5 | 1.7 | >100.0 % |
| EBT margin | 2.9 % | 1.4 % | – |
| Income tax | – 1.6 | – 1.6 | – |
| Net profi t | 2.0 | 0.1 | >100.0 % |
| Net margin | 1.7 % | 0.1 % | – |
EBIT was burdened by an exceptional expense amounting to € 2.0 million that was incurred due to premature hedging costs within the framework of the participation programme for MLP consultants and employees. Nevertheless, this key fi gure still rose by 26.2 % to € 4.0 million (€ 3.2 million). The annual dividend distribution to the minority shareholders of the subsidiary Feri Finance AG reduced the fi nancial result in the fi rst quarter, as planned, by € 0.7 million. This resulted in net profi t from continuing operations of € 2.0 million (€ 0.1 million). The net profi t of the MLP Group rose signifi cantly to € 1.7 million (€ –1.4 million).
At the beginning of the fi nancial year 2010 we provided not only a quantitative forecast for the targeted EBIT margin in 2012 (15 %) but also a qualitative forecast for revenue development in our core areas of old-age provision and health insurance as well as wealth management for the current fi nancial year (see page 90 of the Annual Report 2009). In the areas of old-age provision and health insurance we expect to achieve stable revenue development during the current fi nancial year, despite framework conditions remaining diffi cult. This development was confi rmed in the fi rst quarter – in both areas revenue are only slightly regressive, falling by 6.4 % and 5.8 % respectively. However, in wealth management we expect to achieve a moderate revenue increase in the fi nancial year 2010. This development was already evident during the period under review, in which revenue from wealth management was 6.4 % higher than the comparative period.
The development of expenses in the fi rst quarter conformed to our expectations. Our target for the full year is to reduce fi xed costs (personnel expenses, depreciation and amortisation as well as other operating costs) by € 10 million. In the period under review these expenses decreased by a total of € 1.8 million (see section on "Development of expenses").
Pleasing progress was made through the acquisition of 8,000 new clients in the fi rst quarter, although the total number of private clients fell to 764,500 (December 31, 2009: 785,500). This was due to data matching with product partners and new processes, through which MLP is further improving the interfaces to product partners and thereby further enhancing the quality of customer data. The number of consultants remained constant at 2,384 (December 31, 2009: 2,383).
| All fi gures in € million | March 31, 2010 | Dec 31, 2009 | Change |
|---|---|---|---|
| Intangible assets | 154.3 | 156.1 | – 1.2 % |
| Property, plant and equipment | 77.6 | 78.8 | – 1.5 % |
| Investment property | 11.4 | 11.4 | – |
| Shares accounted for using the equity method | 2.1 | 2.0 | – 5.0 % |
| Deferred tax assets | 2.9 | 3.0 | – 3.3 % |
| Receivables from clients in the banking business | 315.8 | 313.5 | 0.7 % |
| Receivables from banks in the banking business | 471.7 | 498.2 | – 5.3 % |
| Financial investments | 239.8 | 192.4 | 24.6 % |
| Tax refund claims | 31.3 | 33.1 | – 5.4 % |
| Other receivables and other assets | 99.0 | 132.1 | – 25.1 % |
| Cash and cash equivalents | 46.2 | 55.0 | – 16.0 % |
| Total | 1,452.0 | 1,475.5 | – 1.6 % |
The total assets of the MLP Group decreased by 1.6 % compared to December 31, 2009, falling to € 1,452.0 million. On the asset side of the balance sheet, four items primarily contributed to this situation. Receivables from banks in the banking business fell by € 26.5 million to € 471.7 million. This change was mainly attributable to the profi t transfer of our subsidiary MLP Finanzdienstleistungen AG to MLP AG for the fi nancial year 2009 which amounted to € 41.8 million.
Financial investments and cash and cash equivalents increased signifi cantly during the period under review and together stood at € 286.0 million (€ 247.4 million) on March 31, 2010. The increase was primarily due to the profi t transfer from our subsidiary MLP Finanzdienstleistungen AG for the fi nancial year 2009. The changes to the individual items result from the reallocation of liquid funds to longer-term investments.
Other receivables and other assets fell from € 132.1 million to € 99.0 million as a result of usual seasonal fl uctuations. This item consists mainly of receivables from insurance companies for whom we have brokered insurance contracts. Due to the usual seasonal business development, these rise considerably at the year end and then fall signifi cantly during the course of the following fi nancial year.
| All fi gures in € million | March 31, 2010 | Dec 31, 2009 | Change |
|---|---|---|---|
| Shareholders' equity | 421.9 | 418.5 | 0.8 % |
| Provisions | 53.4 | 52.4 | 1.9 % |
| Deferred tax liabilities | 11.5 | 10.7 | 7.5 % |
| Liabilities due to clients in the banking business | 772.4 | 750.3 | 2.9 % |
| Liabilities due to banks in the banking business | 23.5 | 20.8 | 13.0 % |
| Tax liabilities | 1.3 | 9.0 | – 85.6 % |
| Other liabilities | 168.0 | 211.8 | – 20.7 % |
| Liabilities in connection with non-current assets | |||
| held for sale and disposal groups | 0.0 | 2.0 | >100.0 % |
| Total | 1,452.0 | 1,475.5 | – 1.6 % |
Thanks primarily to the result achieved in the fi rst quarter of 2010 as well as to a change in retained earnings due to the marked to market of securities, we were able to increase the equity capital of the Group from € 418.5 million to € 421.9 million. This, in turn, led to a further improvement in the equity ratio, which rose from 28.4 % to 29.1 %. The equity capital position of the Group therefore remains very good.
The development of our deposit business is shown in the liabilities due to clients and banks in the banking business. Client deposits increased by € 22.1 million to € 772.4 million. These mainly consist of deposits in the areas of accounts, credit cards and instant access savings accounts.
Through tax payments we reduced our tax liabilities from € 9.0 million to € 1.3 million.
Other liabilities fell signifi cantly by 20.7 % to € 168.0 million in accordance with usual seasonal fl uctuations. These mainly contain commission claims by our consultants which rise sharply at the reference date on December 31 due to the usual strong year-end business but which then fall again in the following quarters.
| All fi gures in € million | 1st quarter 2010 | 1st quarter 2009 |
|---|---|---|
| Cash and cash equivalents at beginning of period | 123.6 | 38.0 |
| Cash fl ows from operating activities | 46.5 | 54.8 |
| Cash fl ows from investing activities | – 48.7 | 38.8 |
| Cash fl ows from fi nancing activities | – 2.2 | – |
| Changes in cash and cash equivalents | –4.4 | 93.6 |
| Infl ows/outfl ows due to divestments | – 3.2 | – 0.4 |
| Cash and cash equivalents at end of period | 116.0 | 131.2 |
Cash fl ow from operating activities in continuing operations amounted to € 46.5 million (€ 54.8 million). Signifi cant cash fl ows in this respect result from our deposit business with clients and from the investment of these funds – mainly with German fi nancial institutions.
The change in the receivables from, and liabilities due to clients in the banking business results in a positive change of € 18.9 million, which is primarily due to an increase in deposit business with our clients of € 22.1 million. Other signifi cant cash fl ows arise from the positive change in receivables from and liabilities due to banks in the banking business, amounting to € 31.6 million.
Cash fl ow from investment activity in the continuing operations changed from € 38.8 million to € –48.7 million. Here, cash was invested in term deposits during the period under review. In the comparative period of the previous year, matured term deposits were not reinvested.
Our cash fl ow from fi nancing activity in the continuing operations contains the outpayment from the repayment of loans.
At the end of the fi rst quarter, the Group's total liquid funds stood at € 205.1 million. The liquidity situation therefore remains very good. The Group has adequate liquidity reserves available. In addition to the liquid funds, MLP also has access to free credit lines.
| March 31, 2010 | March 31, 2009 | |
|---|---|---|
| Financial services | 1,435 | 1,803 |
| Feri | 257 | 265 |
| Holding | 14 | 11 |
| Total | 1,706 | 2,079 |
No capital measures were undertaken during the period under review.
In the fi rst three months of the current fi nancial year we invested a total of € 1.0 million (€ 1.5 million) throughout the Group. Over 81 % of this fi gure was allocated to the fi nancial services segment – mainly for fi ttings and offi ce equipment (including hardware) and software. In this segment we continue to invest in the improvement of IT support for client consulting activities, as well as in all relevant client care processes. All investments were fi nanced from current cash fl ows.
At the end of the fi rst quarter of 2010 the MLP Group had a total of 1,706 employees. Without taking the number of marginal part-time employees into account, the number of employees fell by around 116 people. This was partly due to the outsourcing of our IT area. Within the framework of this measure, 55 employees in this area were off ered the opportunity to become employees of our IT partner Hewlett Packard (HP). The development of personnel expenses is contained in the section "Development of expenses" (page 10).
Furthermore, MLP is proud to have once again received the "TOP employer" award – for the fourth consecutive time. Through this award, the Corporate Research Foundation Institute (CRF), one of the leading research companies in the area of employer certifi cation and employer branding, confi rms our outstanding corporate and employer culture with an excellent score for image, work-life balance and employee remuneration.
In the fi rst quarter of 2010, MLP registered its Financial Planner vocational training course at the Corporate University for accreditation by the German Financial Planning Standards Board. Through this step MLP will enable its consultants to prepare themselves for the Certifi ed Financial Planner (CFP) certifi cation. The CFP is the highest internationally recognised training standard for fi nancial consultants. The fi rst training class starts in July.
With respect to advertising activities, MLP has decided to extend its involvement as title sponsor for the Mannheim Marathon for a further two years – the event will therefore continue to be staged as the "MLP Marathon" until at least 2012. MLP has supported this event as title sponsor since its inception in 2004. The 7th MLP Marathon Mannheim Rhine-Neckar will take place during the afternoon of May 15, 2010. Further information concerning the event is available at www.mlp-marathonmannheim.de.
During the period under review there was a change in the composition of the Executive Board. Gerhard Frieg, responsible for product management and purchasing, resigned from the Executive Board at his own request on March 31, 2010 in order to pursue new professional challenges elsewhere. The Supervisory Board appointed Manfred Bauer as his successor. He joined the Executive Board of MLP on May 1, 2010 and assumes responsibility for product management and purchasing.
Within the framework of our focus on growth markets we are concentrating our private client business at our subsidiary MLP Finanzdienstleistungen AG on our core market Germany. For this reason we reached agreement with NBG B. V., Valkenswaard, Netherlands, in January 2010 on the sale of our branch in the Netherlands. This market accounted for less than 1 % of our total revenue.
The MLP Group structures its business into the following operating segments:
A detailed description of the individual segments is contained on pages 193 ff of the Annual Report 2009.
Total revenue in the fi nancial services segment during the period under review amounted to € 112.0 million, corresponding to a fall of 4.3 %. The largely variable commission expenses also fell, decreasing by 3.1 % to € 40.0 million. Due to the generally low level of interest rates compared to the comparative period in the previous year, interest expenses reduced from € 4.6 million to € 2.5 million. Compared to the fi rst quarter of 2009, the number of employees (excluding marginal part-time employees) fell from 1,803 to 1,435. This led to a decrease in personnel expenses from € 21.8 million to € 20.5 million. Depreciation and amortisation also reduced signifi cantly, falling by 9.7 % to € 2.8 million. However, other operating expenses in this segment rose by € 3.7 million to € 41.1 million. This was mainly attributable to higher expenditure on electronic data processing as well as to an exceptional expense item concerning the corporate incentive programme for employees and consultants.
Earnings before interest and tax (EBIT) in the period under review amounted to € 5.3 million (€ 8.8 million). The fi nancial result improved only slightly from € –0.4 million to € –0.3 million. This led to earnings before tax (EBT) in the fi nancial services segment of € 5.0 million (€ 8.4 million).
Total revenue development in the Feri segment during the period under review remained stable and amounted to € 8.8 million (€ 8.8 million). Total expenses fell from € 9.8 million to € 9.0 million. This refl ects the success of our cost reduction programme that was initiated in the fi rst quarter 2009. In particular, we were able to signifi cantly reduce fi xed costs (personnel expenses, depreciation and amortisation, other operating expenses). This led to a considerable improvement in earnings before interest and tax (EBIT) from € –1.0 million to € –0.2 million. Earnings before tax in the period under review also amounted to € –0.2 million (€ –1.0 million).
Total revenue in the Holding segment rose only slightly from € 3.2 million to € 3.3 million. Within the framework of our cost reduction programme we were, in particular, able to signifi cantly decrease the other operating expenses in this segment, which fell by € 3.9 million to € 2.2 million. This also led to an improvement in earnings before interest and tax (EBIT) which rose from € –4.6 million to € –1.0 million. Due to the lower than the previous year dividend payment by our subsidiary Feri Finance AG amounting to € 0.9 million (€ 3.1 million), fi nance cost decreased from € 2.0 million to € 0.7 million. Earnings before tax (EBT) thus amounted to € –0.3 million (€ –2.6 million).
There were no signifi cant changes in the risk situation of the Group during the period under review. Despite the continuing economic and fi nancial crisis there were no exceptional burdens within the framework of our counterparty default risks, market price risks, liquidity risks, operational or other risks. The Group continues to have adequate liquid funds. At the reporting date of March 31, 2010, our core capital ratio of 23.1 % far exceeded the required 8 % prescribed by the supervisory body. At the present time no existence-threatening risks to the MLP Group have been identifi ed.
A detailed presentation of the corporate risks as well as a detailed description of our risk management are contained in our risk and disclosure report on pages 67 to 83 of the Annual report 2009.
Related party disclosures are contained in the notes of the annual report 2009, page 210 ff .
Forecasts by the economic research institutes predict that the global economy will recover from the economic and fi nancial crisis in 2010 and 2011. Since the beginning of this year initial signs of improvement have been detected in the German economy – MLP's core market. The federal government confi rmed this view and stated in its published early-year projection that it expects to see a recovery in the German economy – forecasting a rise of 1.4 % in the gross domestic product for the current year. The federal government is anticipating further pick up in growth for 2011 coupled with a 1.6 % increase in the gross domestic product.
Source: Early-year projection 2010, Federal Government
Following the surprisingly positive labour market fi gures at the end of the fi rst quarter, experts now no longer expect any further rise in unemployment in Germany for the rest of the year. On average, the number of unemployed people is forecast to remain around the 3.4 million level.
The worsening of the fi nancial crisis in Greece represents an additional risk factor for macroeconomic development. It remains to be seen whether the planned aid proves to be eff ective and whether the crisis spreads to other countries such as Portugal, Ireland or Spain.
Overall, the macroeconomic outlook after the end of the fi rst quarter 2010 has not altered signifi cantly compared to the end of the fi nancial year 2009. As before, we currently do not expect the economic environment to provide any notable stimulus for our business development.
Compared to the start of the year, the framework conditions in our most important markets – old-age provision, health insurance and wealth management – have not changed signifi cantly during the course of the fi rst quarter 2010 (see also Annual Report 2009, pages 84 ff .).
In view of the demographic development in Germany we continue to anticipate a great need for private and occupational pension provision. Sooner or later this should translate into rising demand for old-age provision products.
The need for private full health insurance cover or supplementary health insurance will also rise in the future. The fi nancing problems of the German healthcare system necessitate further reforms which will lead to rising premiums and a shrinking catalogue of treatment and services covered by the state-run health insurance funds. Both these aspects increase the willingness to switch to private health insurance or force the members of the state-run schemes to take out supplementary insurance.
We also see potential in the wealth management market. We plan to increase the level of assets under management – both in our private client business as well as for institutional investors.
The competition within our industry will continue to increase due to the foreseeable tighter regulation in the coming years and should further accelerate the consolidation process (see also section on "Competition").
| 2010 | 2011 / 2012 | |
|---|---|---|
| Revenue: old-age provision | ||
| Revenue: wealth management | ||
| Revenue: health provision |
In view of the previously described macroeconomic background and the development in our most important markets we see no reason to amend the guidance we published at the end of March 2010 in our Annual Report 2009.
We continue to expect the fi nancial year 2010, particularly the fi rst half year, to be characterised by similarly diffi cult framework conditions to those that we encountered in 2009. Although there are initial signs of a tentative pick-up in the private client and institutional client business areas, the market environment still remains tense. We do not expect the economic environment to provide any appreciable stimulus for our business development. Due to this diffi cult market environment we are only providing a qualitative forecast for our revenue up to 2012. In our core areas of old-age provision and health insurance we expect stable revenue development this year, despite the continued diffi cult framework conditions. In 2011 and 2012 – in an improving macroeconomic environment – we intend to return to a growth path in those areas. In wealth management however, we expect to achieve a moderate increase in revenue in the current year, which will then continue during the following two years.
In addition to ensuring full exploitation of revenue potential, MLP will also diligently continue to exercise strict cost discipline during the current fi nancial year. We are maintaining our cost reduction target for 2010 and intend to lower the fi xed costs (personnel expenses, depreciation and amortisation, other operating costs; without one-off eff ects and before acquisition-related cost increases) by € 10 million.
A further objective that MLP has set itself is – when the economic and fi nancial crisis subsides – to return to its accustomed strong level of profi tability and to almost double EBIT margin by the end of 2012 to 15 % compared to 2009.
Signifi cant changes to the opportunities resulting from the development of the framework conditions, corporate-strategic opportunities or business opportunities did not occur during the period under review. Relevant detailed explanations are contained in the Annual Report 2009 on page 93 f.
On May 1, 2010 Manfred Bauer joined the Executive Board of MLP and assumed responsibility for the product management and purchasing (see also section on "Legal corporate structure and executive bodies").
Otherwise there were no notable events after the balance sheet reference date that aff ected the MLP Group's net assets, fi nancial position or profi t situation.
Source: Deutsche Börse
[Figure 12]
Source: Deutsche Börse
During the course of last year stock markets increasingly recovered from the economic and fi nancial crisis and were then able to continue this trend during the fi rst quarter of the current year. Although weakened at the beginning of the year by sluggish US economic data and fears of state bankruptcy in Greece, the new stock market year did however produce positive developments. The Chinese economy grew more strongly in the fi rst quarter than at any time since 2007 and Germany announced positive labour market data.
In the fi rst quarter the German stock exchange held its fi rst large IPOs for over two years – four stock exchange newcomers were admitted to the Prime Standard, the segment with the highest transparency standards on the Frankfurt stock exchange.
On the international stock markets, the American Dow Jones Industrial Average index rose from 10,428 points at the end of 2009 to 10,856 points at the end of the period under review – a rise of 4.1 %. The German DAX index also advanced in the fi rst quarter, rising by 3.3 % to 6,153 points. However, in the opening quarters of the two previous years the DAX suff ered heavy losses, falling by 15 % in 2009 and by 19 % in 2008.
| 1st quarter 2010 | 2009 | |
|---|---|---|
| Share price at the beginning of the year | 8.27 € | 9.80 € |
| Share price high | 8.27 € | 10.98 € |
| Share price low | 6.69 € | 5.25 € |
| Share price at the end of the quarter/year | 7.80 € | 8.06 € |
| Dividend for the previous year | 0.25 €* | 0.28 € |
| Market capitalisation (End of reporting period) | 841,446,356.40 € | 889,494,568.00 € |
* Subject to the approval of the Annual General Meeting on May 20, 2010
The MDAX, on which the MLP share is listed, rose by almost 8.5% in the fi rst three months of the year, rallying from 7,507 points at the start of the year to 8,143 points. However the industry index for the German fi nance sector DAXsector Financial Services declined slightly, falling by –1.3% to 677 points.
During the fi rst quarter of 2010 the MLP share price fell by 3.2%, thus broadly following the development of the industry index DAXsector Financial Services. The MLP share price rose from € 8.06 at the end of 2009 to € 8.27 at the start of 2010, a level which also marked the highest price for the share in the fi rst quarter 2010. The lowest price of the share in this period was € 6.69. By the end of the quarter the MLP share had recovered some ground and closed at € 7.80.
Further information concerning the MLP share is available on the Internet from our Investor Relations page at www.mlp-ag.com under the heading "MLP share".
In 2010 we once again intend to enable our shareholders to appropriately share in our corporate success. Accordingly, the Executive and Supervisory Boards are proposing a dividend of € 0.25 per share (previous year: € 0.28). Subject to approval by the shareholders at the Annual General Meeting (AGM) on May 20, 2010, MLP will thus distribute a total of € 27.0 million to its owners. The distribution sum amounts to almost 100% of the net profi t from continuing operations. This year our shareholders can once again receive the dividend tax-free.
The MLP Annual General Meeting will take place at 10 a.m. on May 20, 2010 in the Congress Center Rosengarten in Mannheim, Germany. Information concerning many aspects of the MLP Annual General Meeting is available from our Investor Relations page on the Internet at www.mlp-ag.com.
| Notes All fi gures in €'000 |
1st quarter 2010 | 1st quarter 2009* |
|---|---|---|
| Revenue (5) |
115,289 | 120,799 |
| Other revenue | 5,903 | 4,700 |
| Total revenue | 121,191 | 125,499 |
| Commission expenses | – 40,324 | – 41,516 |
| Interest expenses | – 2,470 | – 4,592 |
| Personnel expenses (6) |
– 27,618 | – 28,947 |
| Depreciation and amortisation | – 4,112 | – 4,559 |
| Other operating expenses (7) |
– 42,732 | – 42,714 |
| Earnings from shares accounted for using the equity method | 103 | 29 |
| Earnings before interest and tax (EBIT) | 4,039 | 3,200 |
| Other interest and similar income | 1,663 | 2,285 |
| Other interest and similar expenses | – 2,163 | – 3,743 |
| Finance cost (8) |
– 499 | – 1,458 |
| Earnings before tax (EBT) | 3,540 | 1,742 |
| Income taxes | –1,550 | – 1,646 |
| Earnings from continuing operations after tax | 1,990 | 96 |
| Earnings from discontinued operations after tax | – 287 | – 1,449 |
| Net profi t | 1,703 | – 1,353 |
| Of which attributable to | ||
| owners of the parent company | 1,703 | –1,353 |
| Earnings per share in €** | ||
| From continuing operations | ||
| basic | 0.02 | 0.00 |
| diluted*** | 0.02 | 0.00 |
| From continuing and discontinued operations | ||
| basic | 0.02 | –0.01 |
| diluted*** | 0.02 | –0.01 |
* Previous year's value adjusted. The adjustments are disclosed under note 3
** Basis of calculation: Average number of shares at March 31,2010: 107,877,738, Potential shares (convertible debentures): 943,145
*** The ordinary shares resulting from the conversion of convertible debentures are treated as shares already issued
| All fi gures in €'000 | 1st quarter 2010 | 1st quarter 2009* |
|---|---|---|
| Net profi t | 1,703 | – 1,353 |
| Other comprehensive income | ||
| Securities marked to market | 1,703 | 253 |
| Tax expense | – 12 | –20 |
| Other comprehensive income after tax | 1,691 | 234 |
| Total comprehensive income | 3,394 | – 1,120 |
| Total comprehensive income attributable to | ||
| owners of the parent company | 3,394 | –1,120 |
* Previous year's value adjusted. The adjustments are disclosed under note 3
| Notes All fi gures in €'000 |
March 31, 2010 | Dec 31, 2009 |
|---|---|---|
| Intangible assets | 154,284 | 156,138 |
| Property, plant and equipment | 77,564 | 78,781 |
| Investment property | 11,372 | 11,432 |
| Shares accounted for using the equity method | 2,116 | 2,013 |
| Deferred tax assets | 2,863 | 2,969 |
| Receivables from clients in the banking business | 315,767 | 313,494 |
| Receivables from banks in the banking business (9) |
471,696 | 498,201 |
| Financial investments (10) |
239,801 | 192,389 |
| Tax refund claims | 31,294 | 33,059 |
| Other accounts receivable and other assets (11) |
99,037 | 132,088 |
| Cash and cash equivalents | 46,198 | 54,968 |
| Total | 1,451,992 | 1,475,532 |
| Notes All fi gures in €'000 |
March 31, 2010 | Dec 31, 2009 |
|---|---|---|
| Shareholders' equity (12) |
421,926 | 418,532 |
| Provisions | 53,363 | 52,383 |
| Deferred tax liabilities | 11,512 | 10,668 |
| Liabilities due to clients in the banking business | 772,387 | 750,282 |
| Liabilities due to banks in the banking business | 23,498 | 20,774 |
| Tax liabilities | 1,309 | 9,029 |
| Other liabilities | 167,997 | 211,816 |
| Liabilities in connection with non-current assets held for sale and disposal groups | – | 2,049 |
| Total | 1,451,992 | 1,475,532 |
| All fi gures in €'000 | 1st quarter 2010 | 1st quarter 2009* |
|---|---|---|
| Cash fl ow from operating activities | 43,299 | 55,307 |
| Cash fl ow from investing activities | – 48,711 | 38,773 |
| Cash fl ow from fi nancing activities | – 2,172 | – |
| Change in cash and cash equivalents | –7,584 | 94,080 |
| Cash and cash equivalents at the end of the period | 116,040 | 132,527 |
| All fi gures in €'000 | 1st quarter 2010 | 1st quarter 2009* |
|---|---|---|
| Cash fl ow from operating activities | – 3,187 | 526 |
| Cash fl ow from investing activities | – | – 39 |
| Cash fl ow from fi nancing activities | – | – |
| Change in cash and cash equivalents | –3,187 | 487 |
| Cash and cash equivalents at the end of the period | 0 | 1,287 |
* Previous year's value adjusted. The adjustments are disclosed under note 3
[Table 14]
| Equity attributable to mlp ag shareholders | |||||
|---|---|---|---|---|---|
| All fi gures in €'000 | Share capital |
Capital reserves |
Securities marked to market |
Other comprehen sive income |
Total |
| As at Jan 1, 2009 (as reported) | 107,861 | 142,084 | – 97 | 179,278 | 429,125 |
| Retrospective adjustments | – | – | – | – 3,197 | – 3,197 |
| As at Jan 1, 2009 (adjusted) | 107,861 | 142,084 | – 97 | 176,081 | 425,928 |
| Transactions with owners | – | – | – | – | – |
| Total comprehensive income | – | – | 234 | – 1,353 | – 1,120 |
| As at March 31, 2009 | 107,861 | 142,084 | 137 | 174,727 | 424,809 |
| As at Jan 1, 2010 | 107,878 | 142,184 | – 1,573 | 170,044 | 418,532 |
| Transactions with owners | – | – | – | – | – |
| Total comprehensive income | – | – | 1,691 | 1,703 | 3,394 |
| As at March 31, 2010 | 107,878 | 142,184 | 118 | 171,747 | 421,926 |
Segment reporting
| financial services | |||
|---|---|---|---|
| All fi gures in €'000 | 1st quarter 2010 | 1st quarter 2009* | |
| Revenue | 107,492 | 113,354 | |
| of which total inter-segment revenue | 56 | 56 | |
| Other revenue | 4,528 | 3,687 | |
| of which total inter-segment revenue | 442 | 614 | |
| Total revenue | 112,020 | 117,041 | |
| Commission expenses | – 39,998 | – 41,323 | |
| Interest expenses | – 2,471 | – 4,593 | |
| Personnel expenses | – 20,537 | – 21,812 | |
| Depreciation/amortisation and impairment | – 2,759 | – 3,129 | |
| Other operating expenses | – 41,082 | – 37,421 | |
| Earnings from shares accounted for using the equity method | 103 | 29 | |
| Segment earnings before interest and tax (EBIT) | 5,276 | 8,793 | |
| Other interest and similar income | 97 | 233 | |
| Other interest and similar expenses | – 415 | – 628 | |
| Finance cost | – 318 | – 394 | |
| Earnings before tax (EBT) | 4,958 | 8,399 | |
| Income taxes | |||
| Earnings from continuing operations after tax | |||
| Earnings from discontinued operations after tax | – 287 | – 1,854 | |
| Net profi t | |||
| March 31, 2010 | Dec 31, 2009 | ||
| Segment assets | 1,047,213 | 1,094,592 |
* Previous year's value adjusted. The adjustments are disclosed under note 3
| feri | holding | consolidation / other | total | |||||
|---|---|---|---|---|---|---|---|---|
| 1st quarter 2010 | 1st quarter 2009 | 1st quarter 2010 | 1st quarter 2009 | 1st quarter 2010 | 1st quarter 2009 | 1st quarter 2010 | 1st quarter 2009* | |
| 7,876 | 7,522 | – | – | – 80 | – 78 | 115,289 | 120,799 | |
| 23 | 22 | – | – | – 78 | – 78 | 0 | 0 | |
| 928 | 1,299 | 3,336 | 3,213 | – 2,890 | – 3,498 | 5,903 | 4,700 | |
| – | – | 2,448 | 2,885 | – 2,890 | – 3,498 | 0 | 0 | |
| 8,804 | 8,821 | 3,336 | 3,213 | – 2,970 | – 3,576 | 121,191 | 125,499 | |
| – 401 | – 240 | – | – | 76 | 47 | – 40,324 | – 41,516 | |
| – | – | – | – | 1 | 1 | – 2,470 | – 4,592 | |
| – 5,770 | – 6,285 | – 1,311 | – 850 | – | – | – 27,618 | – 28,947 | |
| – 592 | – 614 | – 760 | –816 | – | – | – 4,112 | – 4,559 | |
| – 2,264 | – 2,690 | – 2,243 | – 6,136 | 2,856 | 3,533 | – 42,732 | – 42,714 | |
| – | – | – | – | – | – | 103 | 29 | |
| – 222 | – 1,008 | – 977 | – 4,589 | – 37 | 4 | 4,039 | 3,200 | |
| 1 | 9 | 2,577 | 5,462 | – 1,011 | – 3,420 | 1,663 | 2,285 | |
| – 3 | – 17 | – 1,906 | – 3,431 | 161 | 332 | – 2,163 | – 3,743 | |
| – 3 | – 7 | 671 | 2,031 | – 850 | – 3,088 | – 499 | – 1,458 | |
| – 225 | – 1,015 | – 306 | – 2,558 | – 887 | – 3,084 | 3,540 | 1,742 | |
| – 1,550 | – 1,646 | |||||||
| 1,990 | 96 | |||||||
| – | – | – | – | – | 405 | – 287 | – 1,449 | |
| 1,703 | – 1,353 | |||||||
| March 31, 2010 | Dec 31, 2009 | March 31, 2010 | Dec 31, 2009 | March 31, 2010 | Dec 31, 2009 | March 31, 2010 | Dec 31, 2009 | |
| 102,063 | 105,626 | 506,170 | 513,831 | – 203,454 | – 238,517 | 1,451,992 | 1,475,532 | |
The consolidated fi nancial statements were prepared by MLP AG, Wiesloch, Germany, the ultimate parent company of the MLP Group. MLP AG is listed in the Mannheim Commercial Register under the number HRB 332697 at the address Alte Heerstraße 40, 69168 Wiesloch, Germany.
Since it was founded in 1971, MLP has been operating as a broker and adviser for academics and other discerning clients in the fi elds of old-age provision, including corporate pension business, health care, fi nancing, wealth management and banking services.
The interim fi nancial report has been prepared in line with the regulations set out in IAS 34 "Interim fi nancial reporting". It is based on the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) as well as the interpretations of the International Financial Reporting Interpretation Committee (IFRIC), as applicable within the European Union (EU). In accordance with the provisions of IAS 34, the scope of the report has been reduced compared to the consolidated fi nancial statements at December 31, 2009.
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 2009 have been applied to this interim fi nancial report. These are presented in the Group notes to the annual report 2009 that can be downloaded from the company's website (www.mlp-ag.com).
The interim fi nancial report has been drawn up in euros (€), the functional currency of MLP AG. Unless otherwise specifi ed, all amounts are rounded to the nearest thousand euros (€'000). Both single and cumulative fi gures are values with the smallest rounding diff erence. As a result, diff erences to reported total amounts may arise when the individual values are added up.
The accounting policies applied are the same as those used in the comparison period, with the following exceptions:
In the fi nancial year 2009, MLP became aware of two cases which were recorded incorrectly in the previous years. In one case a trailer commission and in the other an expense were allocated to the wrong period of time. The errors are corrected retroactively in line with IAS 8. The eff ects of the adjustment in 2008 on the earnings per share were less than € 0.01.
Furthermore, in the fourth quarter of 2009 MLP concluded the purchase price allocation (ppa) concerning the acquisition of ZSH. This led to a change in the depreciation. The eff ect of the adjustment in 2009 on the earnings per share amounted to less than € 0.01.
The table below illustrates the eff ects of the changes with regard to the previous year's fi gures:
| All fi gures in €'000 | 1st quarter 2009 adjusted |
1st quarter 2009 as reported |
+ / – | of which error correction |
of which business acquisition (ppa) |
|---|---|---|---|---|---|
| Total revenue | 125,499 | 125,499 | – | – | – |
| Depreciation/amortisation and impairment | – 4,559 | – 4,390 | –168 | – | –168 |
| Other operating expenses | – 42,714 | – 42,654 | –61 | –61 | – |
| Earnings before interest and tax (EBIT) | 3,200 | 3,429 | – 229 | – 61 | – 168 |
| Finance cost | – 1,458 | – 1,458 | – | – | – |
| Earnings before tax (EBT) | 1,742 | 1,971 | – 229 | – 61 | – 168 |
| Income taxes | – 1,646 | – 1,715 | 69 | 18 | 52 |
| Earnings from continuing operations | |||||
| after tax | 96 | 255 | – 160 | – 43 | – 117 |
| Earnings from discontinued operations | |||||
| after tax | – 1,449 | – 1,449 | – | – | – |
| Net profi t (total) | – 1,353 | – 1,194 | – 160 | – 43 | – 117 |
[Table 16]
Furthermore, in the fi nancial year 2010 the following new or revised standards are to be used for the fi rst time:
• Amendments to IFRS 2 "Group cash-settled share-based payment transactions",
• Improvements to IFRSs 2009.
The improvements to the IFRS in April 2009 (endorsed by the EU in March 2010) are of relevance to MLP, particularly concerning the changes to IAS 7 "Cash Flow Statement". In accordance with the revised standard, cash outfl ows are only to be allocated to investing activities if they are associated with the capitalisation of assets.
Accordingly, in the fi rst quarter 2010 MLP allocated € 3,187 thsd of net cash outfl ow associated with the sale of subsidiaries, to operating activities. In the absence of specifi c transitional regulations, the change to IAS 7 is to be applied retroactively. As a consequence, in the cash fl ow statement for the fi rst quarter 2009, € –400 thsd have now been shown as cash fl ow from operating activities instead of as cash fl ow from investing activities.
The other changes did not have any eff ect on the presentation of the MLP Group's net assets, fi nancial position or result from operations.
The fi nancial crisis and the associated fears of recession remain the determining negative factors in terms of client demand for professional fi nancial consulting services. Due to seasonal infl uences on its business operations, the Group nevertheless anticipates a higher level of net profi t from continuing operations for the remainder of the fi nancial year than was achieved in the fi rst quarter.
| [Table 17] | |||
|---|---|---|---|
| All fi gures in €'000 | 1st quarter 2010 | 1st quarter 2009 |
|---|---|---|
| Old-age provision | 58,860 | 62,886 |
| Wealth management | 18,324 | 17,165 |
| Non-life insurance | 16,396 | 15,229 |
| Health insurance | 12,859 | 13,678 |
| Loans and mortgages | 2,120 | 1,952 |
| Other commission and fees | 570 | 673 |
| Commission and fees | 109,129 | 111,582 |
| Interest income | 6,159 | 9,217 |
| Total | 115,289 | 120,799 |
Personnel expenses decreased from € 28,947 thsd to € 27,618 thsd. The decrease is primarily due to the decline in the number of employees.
At March 31, 2010, the MLP Group had the following numbers of employees in the strategic fi elds of business:
| [Table 18] | ||
|---|---|---|
| March 31, 2010 | March 31, 2009 | |||
|---|---|---|---|---|
| of which part-time employees |
of which part-time employees |
|||
| Financial services | 1,435 | 155 | 1,803 | 418 |
| Feri | 257 | 68 | 265 | 62 |
| Holding | 14 | 1 | 11 | 1 |
| Total | 1,706 | 224 | 2,079 | 481 |
[Table 19]
| All fi gures in €'000 | 1st quarter 2010 | 1st quarter 2009* |
|---|---|---|
| IT operations | 11,688 | 10,093 |
| Rental and leasing | 4,491 | 4,556 |
| Consultancy | 3,544 | 6,943 |
| Administration operations | 3,499 | 3,607 |
| Training and further training | 1,908 | 2,254 |
| Representation and advertising | 1,816 | 2,179 |
| External services – banking business | 1,796 | 1,881 |
| Depreciation/impairment on other accounts receivable and other assets | 1,796 | 951 |
| Premiums and fees | 1,624 | 1,611 |
| Expenses for commercial agents | 1,517 | 1,005 |
| Depreciation / impairment on receivables from clients in the banking business | 1,299 | 922 |
| Entertainment | 1,085 | 1,290 |
| Travel expenses | 903 | 1,237 |
| Insurance | 731 | 610 |
| Maintenance | 380 | 421 |
| Audit | 347 | 261 |
| Other personnel costs | 298 | 373 |
| Expenses from currency translation | 27 | 29 |
| Expenses from disposal of assets | 9 | 268 |
| Sundry other operating expenses | 3,975 | 2,223 |
| Total | 42,732 | 42,714 |
* Previous year's value adjusted. The adjustments are disclosed under note 3
The costs of IT operations contain operating expenses for applications that have passed over to an external service provider through outsourcing. The expenses for administration operations contain costs relating to building operations, offi ce costs as well as communication costs. The consulting costs consist of tax advice costs, legal advice costs as well as general and IT consulting costs. The consulting costs in 2009 contained one-off expenses for defence against a takeover. The depreciation and impairment on other accounts receivable and other assets contain the allowance for risk on receivables from commercial agents. The expense for commercial agents includes the expense for consultants who have left the company as well as the training allowance for new consultants. Sundry other operating mainly consist of external services, car costs, donations and specialist literature.
| All fi gures in €'000 | 1st quarter 2010 | 1st quarter 2009 |
|---|---|---|
| Other interest and similar income | 1,663 | 2,285 |
| Interest from fi nancial instruments | –1,851 | – 3,596 |
| Accrued interest on pension provisions | – 312 | – 147 |
| Other interest and similar expenses | – 2,163 | – 3,743 |
| Finance cost | – 499 | – 1,458 |
The decrease in other interest and similar income results from lower interest of cash funds. The decrease in other interest and similar expenses is mainly attributable to dividend payments to the remaining shareholders of Feri Finance AG amounting to € 653 thsd (previous year: € 2,368 thsd).
The reduction in receivables from banks, which fell from € 498,201 thsd to € 471,696 thsd, is mainly attributable to the profi t transfer payment by MLP Finanzdienstleistungen AG to MLP AG.
| All fi gures in €'000 | March 31, 2010 | Dec 31, 2009 |
|---|---|---|
| Available for sale | ||
| Debt securities and holdings in investment funds | 36,353 | 33,424 |
| Investments | 3,414 | 3,398 |
| Held-to-maturity securities | 49,742 | 45,385 |
| Loans and receivables | 150,293 | 110,183 |
| Total | 239,801 | 192,389 |
The rise in fi nancial investments mainly results from the investment of the funds stemming from the profi t transfer from MLP Finanzdienstleistungen AG as fi xed term deposits.
Due to the seasonally stronger year-end business, high receivables from insurance companies as well as high liabilities towards commercial agents at December 31, 2009 had to be shown which were then balanced out in the fi rst quarter of 2010. A lower amount of receivables and liabilities were built up in the fi rst quarter of 2010.
The share capital of MLP AG is made up of 107,877,738 (December 31, 2009: 107,877,738) no-par-value shares. In the fi rst quarter of 2010 no new no-par-value shares were issued through the exercising of rights of conversion.
The Executive and Supervisory Board propose to the Annual General Meeting on May 20, 2010 a dividend of € 26,969 thsd for the fi nancial year 2009. This corresponds to € 0.25 per share. For the fi nancial year 2008 MLP AG distributed a dividend amounting to € 0.28 per share in the second quarter 2009.
[Table 22]
The revenue and expenses from discontinued operations are illustrated below.
The operating results in 2009 contain only the expenses and income of the foreign subsidiary in Austria and the branch in the Netherlands.
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.
| All fi gures in €'000 | March 31, 2010 | March 31, 2009 |
|---|---|---|
| Cash and cash equivalents | 46,198 | 33,126 |
| Cash and cash equivalents, contained in non-current assets held for | ||
| sale and disposal groups | – | 1,287 |
| Loans < 3 months | 70,000 | 100,000 |
| Liabilities to banks due on demand | –158 | – 1,886 |
| Cash and cash equivalents | 116,040 | 132,527 |
The receivables from banks of MLP Finanzdienstleistungen AG are not included in cash and cash equivalents, as they are to be attributed to the operating activities of the banking business segment.
The cash fl ow from operating activities results from cash fl ows that cannot be defi ned as investment or fi nancing activities. This is determined on the net profi t. For indirect determination of the cash fl ow, the changes in items due to operating activities are adjusted to take account of eff ects from changes to the scope of consolidation and currency translation. The changes in the respective items can therefore only be partly aligned with the corresponding values in the published consolidated statements. The cash fl ow from operating activities fell by € 12.0 million year on year to € 43.3 million.
In the current fi nancial year, cash fl ow from investing activities is mainly infl uenced by the investment of cash in fi xed term deposits. In the comparative period, cash fl ow from investing activities was infl uenced by matured fi xed term deposits.
The change in cash fl ow from fi nancing activities is due to the repayment of loan liabilities.
There were no signifi cant changes compared to December 31, 2009.
Compared to December 31, 2009 there were no signifi cant changes in other fi nancial commitments, contingent assets and liabilities or other liabilities.
Compared to December 31, 2009 there were no signifi cant changes in the relationships and no signifi cant business with related companies and persons.
On May 1, 2010 Manfred Bauer joined the Executive Board of MLP and assumed responsibility for the product management and purchasing.
Beyond this there were no notable events after the balance sheet date which may aff ect the MLP Group's net assets, fi nancial position or results of operations.
Wiesloch, May 11, 2010
MLP AG
Executive Board
Dr. Uwe Schroeder-Wildberg Manfred Bauer Ralf Schmid Muhyddin Suleiman
| 05 | Figure 01 | German Gross Domestic Product |
|---|---|---|
| 06 | Figure 02 | Assessment of own efforts |
| 07 | Figure 03 | Increasing interest in private supplementary |
| health insurance | ||
| 08 | Figure 04 | Infl ows and outfl ows in various types of mutual |
| investment funds in Germany in Q1 2010 | ||
| 09 | Figure 05 | EBIT from continuing operations |
| 10 | Figure 06 | Total revenue in continuing operations |
| 18 | Figure 07 | Total revenue and EBIT for the fi nancial services |
| segment | ||
| 19 | Figure 08 | Total revenue and EBIT Feri segment |
| 21 | Figure 09 | Expected economic growth in Germany |
| 23 | Figure 10 | Development of the EBIT margin from 2005 to 2012 |
| 24 | Figure 11 | Development of the DAX in the fi rst quarter |
|---|---|---|
| 24 | Figure 12 | MLP share, MDAX and DAXsector Financial Services |
| in the fi rst quarter 2010 |
Table 01 MLP key fi gures
| 11 | Table 02 | Earnings development of continuing operations |
|---|---|---|
| 13 | Table 03 | Assets as at March 31, 2010 |
| 14 | Table 04 | Liabilities and shareholders' equity as at |
| March 31, 2010 | ||
| 15 | Table 05 | Simplifi ed statement of cash fl ows in continuing |
| operations | ||
| 16 | Table 06 | Number of employees |
| 22 | Table 07 | Anticipated development of revenue from |
| 2010 to 2012 |
Table 08 Key fi gures of the MLP share
| 26 | Table 09 | Income statement for the period from January 1 |
|---|---|---|
| to March 31, 2010 | ||
| 26 | Table 10 | Statement of comprehensive income for the period |
| from January 1 to March 31, 2010 | ||
| 27 | Table 11 | Assets as at March 31, 2010 |
| 27 | Table 12 | Liabilities and shareholders' equity as at |
| March 31, 2010 | ||
| 28 | Table 13 | Statement of cash fl ows for the period from |
| January 1 to March 31, 2010 | ||
| 29 | Table 14 | Statement of changes in equity |
| 30 | Table 15 | Segment reporting |
|---|---|---|
| 33 | Table 16 | Adjustments to the accounting policies |
| 34 | Table 17 | Revenue |
| 34 | Table 18 | Personnel expenses/number of employees |
| 35 | Table 19 | Other operating expenses |
| 36 | Table 20 | Finance cost |
| 36 | Table 21 | Financial investments |
| 38 | Table 22 | Discontinued operations |
| 39 | Table 23 | Notes to the consolidated statement of cash fl ows |
Dr. Uwe Schroeder-Wildberg (Chairman, appointed until December 31, 2012)
Gerhard Frieg (Product management and purchasing, until March 31, 2010)
Manfred Bauer (Product management and purchasing, since May 1, 2010, appointed until April 30, 2015)
Ralf Schmid (Chief Operating Offi cer, appointed until December 31, 2012)
Muhyddin Suleiman (Sales, appointed until September 3, 2012)
Dr. Peter Lütke-Bornefeld (Chairman)
Dr. h. c. Manfred Lautenschläger (Vice chairman)
Dr. Claus-Michael Dill
Johannes Maret
Maria Bähr (Employee representative)
Norbert Kohler (Employee representative)
Tel +49 (0) 6222 • 308 • 8320 Fax +49 (0) 6222 • 308 • 1131 [email protected]
Tel +49 (0) 6222 • 308 • 8310 Fax +49 (0) 6222 • 308 • 1131 [email protected]
Results for the 1st quarter 2010 (Publication of the fi nancial interim report)
May 20 Annual General Meeting 2010, Mannheim
May 21 Dividend payment
June 23-24 Roadshow, Frankfurt, London
August 12 Results for the 2nd quarter 2010 (Publication of the fi nancial interim report)
October 6-7 Roadshow, USA
November 11 Results for the 3rd quarter 2010 (Publication of the fi nancial interim report)
December 1-2 Roadshow, Europe
January 17-19 Cheuvreux German Conference, Frankfurt
prognosis
This documentation includes certain prognoses and information on future developments founded on the conviction of MLP AG's Executive Board and on assumptions and information currently available to MLP AG. Words such as "expect," "anticipate," "estimate," "assume," "intend," "plan," "should," "could," "project" and other similar terms used in reference to the company describe prognoses based on certain factors subject to uncertainty.
Many factors can contribute to the actual results of the MLP Group diff ering signifi cantly from the prognoses made in such statements.
MLP AG accepts no liability to the public for updating or correcting prognoses. All prognoses and predictions are subject to various risks and uncertainties, which can lead to the actual results diff ering from expectations. The prognosis refl ect the points of view at the time when they were made.
MLP AG Alte Heerstraße 40 69168 Wiesloch, Germany Tel +49 (0) 6222 • 308 • 0 Fax +49 (0) 6222 • 308 • 9000 www.mlp-ag.com
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