27.02.2014
MLP AG DE0006569908
MLP AG: MLP concludes 2013 with EBIT of EUR 32.8 million - launch of comprehensive growth initiative
(DGAP-Media / 27.02.2014 / 07:32)
MLP concludes 2013 with EBIT of EUR 32.8 million - launch of comprehensive
growth initiative
- Wealth management, non-life insurance as well as loans and mortgages
develop very positively
- Q4 remains considerably behind the previous years due to the increased
market burdens in old-age provision and health insurance
- Administration costs decreased again and were slightly below 2012
- Executive Board proposes a dividend of 16 cents per share
- MLP introduces growth initiative which will include real estate
offerings and a digitalisation strategy, acquisitions under assessment
- Outlook 2014: Base scenario further foresees EBIT rising to around EUR
65 million - continuing volatility due to market burdens
Wiesloch/Frankfurt, 27th February 2014 - As already announced in November,
MLP, the independent financial services and wealth management consulting
company, recorded a decrease in earnings for the financial year 2013. On
the one hand, MLP achieved new all-time highs in wealth management and
loans and mortgages as well as sustainably increasing revenue in non-life
insurance. However, these pleasing developments were heavily overshadowed
by even greater market burdens in health insurance and particularly in
old-age provision. Against this backdrop, total revenue decreased by 11.8
percent to EUR 501.1 million. The administration costs continued to develop
favourably and for the full year remained slightly below the previous year,
despite incurred temporary expenses for investments in the future amounting
to around EUR 8 million. Overall, earnings before interest and tax (EBIT)
fell to EUR 32.8 million.
The timeframe from October to December once again proved to be by far the
strongest period of the year. However, momentum in new business - as also
experienced throughout the industry - remained significantly behind the
levels of previous years, particularly in the last few weeks of 2013.
"MLP experienced another difficult year in 2013. The market burdens proved
to be significantly greater than expected. Consequently, for the first time
in our history, revenue in two core business areas - namely old-age
provision and health insurance - simultaneously decreased," comments Chief
Executive Officer Dr. Uwe Schroeder-Wildberg. "Until 2005, these two
business areas accounted for around 90 percent of our revenue from
commissions and fees. If this situation still existed today, the past year
would have hit us very hard. However, in 2013 we were able to compensate
for significant portions of the revenue decrease through gains achieved in
other business areas. At the same time, we were still able to generate
substantial earnings thanks to our successful cost management programme.
Although we are not satisfied with the result, it does nevertheless
demonstrate that the MLP's strategic further development towards a broader
revenue mix was the correct decision - and the elements of our business
which we can directly influence, are well under control."
Full year: Total revenue of EUR 501.1 million
Total revenue in 2013 decreased from EUR 568.0 million to EUR 501.1
million. Revenue from commissions and fees accounted for the largest
portion of this figure and amounted to EUR 457.7 million (2012: EUR 518.0
million). Due to the low interest rate environment, interest income fell by
14.3 percent to EUR 22.8 million (EUR 26.6 million). Other revenue
decreased from EUR 23.5 million to EUR 20.6 million.
The revenue breakdown by consulting areas shows significant growth in
wealth management. Here, revenue rose to EUR 138.1 million (EUR 117.9
million) - a new all-time high for MLP. Within this framework, Assets under
management climbed to EUR 24.5 billion (30th September 2013: EUR 23.7
billion). In non-life insurance, revenue rose from EUR 31.1 million to EUR
32.5 million, an increase of 4.5 percent. In loans and mortgages, the high
level of interest shown by many clients with respect to purchasing property
was evident and led to an increase in revenue of 8.2 percent to EUR 14.5
million (2012: EUR 13.4 million). Additional earnings from the joint
venture company MLP Hyp amounted to EUR 0.9 million (EUR 1.0 million). The
total brokered loans and mortgages volume of EUR 1.5 billion (EUR 1.3
billion) represented the highest figure achieved by MLP thus far in its
history.
However, revenue in health insurance decreased. In this consulting area
many clients throughout the industry were hesitant due to the political
uncertainties and, not least, to the negative market reports.
Consequently, revenue decreased from EUR 63.9 million to EUR 47.8 million.
In old-age provision the framework conditions have remained difficult since
the outbreak of the financial crisis in 2008 and as a result of the
European debt crisis, and many citizens are reluctant to commit to
long-term contracts. In recent months, particularly the discussions
concerning the low interest rate environment and the extensive negative
reports about life insurers and their products have contributed to the
emergence of a further temporary burden. Against this backdrop, the number
of newly brokered base pension policies ("Basis-Rente") in the market fell
by 33 percent on a full-year basis and the number of newly brokered
"Riester" insurance policies decreased by over 25 percent. At MLP, revenue
fell by 23.5 percent to EUR 219.9 million. New business decreased from EUR
4.8 billion to EUR 3.6 billion; occupational provision accounted for around
12 percent of the brokered premium sum.
FY 2013: EBIT falls to EUR 32.8 million
Due to the revenue decrease, EBIT for the full year fell to EUR 32.8
million (EUR 73.9 million). The administration costs (personnel expenses,
depreciation and amortisation as well as other operating expenses)
decreased from EUR 251.9 million to EUR 250.6 million - even though, as
previously announced, MLP incurred around EUR 8 million of temporary
expenses relating to investments for the future. The administration costs
were thus around EUR 61 million lower than in 2008. Group net profit
amounted to EUR 25.5 million (EUR 52.9 million).
Q4: EBIT of EUR 20.5 million - number of consultants: 1,998
Viewing the fourth quarter in isolation, total revenue amounted to EUR
162.3 million (Q4 2012: EUR 212.8 million). EBIT decreased to EUR 20.5
million (EUR 47.5 million). "In October some indicators had pointed towards
a further increase in momentum - such as, in particular, the high number of
client consultation appointments. However, unlike in previous years, and
due to the situation in the market, this did not lead to the expected
contract conclusions in old-age provision and health insurance," comments
Chief Financial Officer Reinhard Loose.
In the financial year 2013 MLP welcomed 26,300 new clients (2012: 32,600);
the fourth quarter was the strongest period in this respect with 7,400 new
clients. The number of consultants as of 31st December 2013 stood at 1,998
(30th September 2013: 1,996).
Dividend proposal of 16 cents per share
Based on the business development, the Executive Board is proposing a
dividend of 16 cents per share (2012: 32 cents). This represents a pay-out
ratio of 68 percent and thus is in line with the previously announced
framework. In view of the Basel III requirements, MLP intends to deploy the
remaining portion of net profit in order to maintain a comfortable level of
capitalisation for the future. Furthermore, the company is currently
assessing specific acquisitions in the corporate client business area and
at the subsidiary FERI as well as proceeding with its investments in IT.
MLP introduces extensive growth initiative
Despite the difficult environment, MLP intends to return to revenue and
earnings growth. The Executive Board has therefore initiated an extensive,
four-pronged initiative consisting of a further broadening of the revenue
base, the consistent implementation of a digitalisation strategy, further
development of MLP's technology leadership and the recruitment of new
consultants.
The specific measures include the fact that MLP consultants are now able to
offer properties to a braod base of clients for their personal or
third-party use and on request. The quality assurance aspect in this
respect will be undertaken by FERI EuroRating Services. Building on the
successful development of recent years, MLP will furthermore extend its
corporate client business by also providing visible non-life insurance
expertise. Expansion of the real assets offerings at the subsidiary FERI is
also planned. In this respect, acquisitions at FERI as well as within the
corporate client business area are currently under specific consideration.
Within the scope of the digitisation strategy MLP intends to expand its
internet presence, making it an important medium for winning new clients in
the university segment. In addition, MLP also plans to provide a facility
for clients to purchase simple banking and insurance products online. With
respect to recruiting, MLP will continue its strategy introduced in 2013,
utilising new entry models for consultants via a trainee programme and
combined degree programmes as well as the targeted opening of new branches
in the university segment. All measures are flanked by an on-going
efficiency management. MLP will be presenting further details about its
growth initiative within the framework of today's annual press and
analysts' conference. "By expanding our wealth management business and
setting up the occupational provision area we have developed MLP
significantly further. We are now looking to build on this basis and will
further accelerate the transformation. Our objective is to make MLP more
independent of short-term market influences," comments Uwe
Schroeder-Wildberg.
Outlook: Base scenario foresees rise in EBIT to around EUR 65 million
In the financial year 2014 MLP will continue to keep the administration
costs under control but will however - as in 2013 - incur temporary
expenses, amounting to around EUR 6 million within the framework of the
growth initiative. Including this figure, MLP expects the administration
costs to total around EUR 255 million.
On the revenue side, the financial year 2013 and particularly the fourth
quarter demonstrated that the market burdens and the associated
uncertainties influencing our further operating development have
significantly intensified. This increases the volatility and makes it more
difficult to provide a concrete forecast. In the most probable case, MLP
expects that in 2014 the strained framework conditions in old-age provision
and in health insurance will begin to ease. Furthermore, there will be
additional revenue potential from real estate offering as well the absence
of the unisex tariff changeover which negatively affected the old-age
provision and health insurance areas in 2013. Overall, based on this
scenario, which MLP also considers to be the most probable situation, EBIT
is expected to total around EUR 65 million - a figure which comes in at the
lower end of the planned corridor of EUR 65 to 78 million.
Risk factors for future business development include the continuing and, in
part, very critical public discussions about a possible further reduction
in the guaranteed interest rate for life insurance and pension insurance
policies. If, on account of this situation, clients were to adopt a
similarly hesitant approach as seen in 2013, MLP would expect a lower-based
scenario to apply - resulting in EBIT of at least EUR 50 million. However,
should the environment improve significantly more than currently assumed, a
higher-based scenario would be possible with EBIT rising up to a maximum of
EUR 75 million. In today's annual press and analysis conference, MLP will
also be presenting further details relating to the forecast.
"Through the various scenarios we are conveying the greater risks which
have been particularly evident in our business development during the past
three months," explains Reinhard Loose. "At the same time, we are clearly
illustrating our intention to return to notable earnings growth in each
case."
Overview of the key figures
MLP Group Q4/ Q4/ Change 12 months 12 months Change (in EUR million ) 2013 2012 in % 2013 2012 in % Revenue 155.3 204.4 -24 480.5 544,6 -12 Revenue from commissions 149.8 198.4 -24 457.7 518.0 -12 and fees Interest income 5.5 6.0 -8 22.8 26.6 -14 Other revenue 7.0 8.4 -17 20.6 23.5 -12 Total revenue 162.3 212.8 -24 501.1 568.0 -12 Earnings before interest 20.5 47.5 -57 32.8 73.9 -56 and taxes (EBIT) Earnings before tax (EBT) 20.7 47.8 -57 33.1 74.9 -56 Group net profit 16.0 34.2 -53 25.5 52.9 -52 Earnings per share 0.15 0.32 -53 0.24 0.49 -51 (diluted) in EUR Clients 830,300 825,600* 1 Consultants 1,998 1,996* 0*) 30th September 2013 About MLP: MLP is Germany's leading independent consulting company. Supported by comprehensive research, the Group provides a holistic consulting approach that covers all economic and financial questions for private and corporate clients, as well as institutional investors. The key aspect of the consulting approach is the independence from insurance companies, banks and investment firms. The MLP Group manages total assets of around EUR 24.5 billion and supports more than 830,000 private and 5,000 corporate clients or employers. The financial services and wealth management consulting company 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 fields of provision, financial investment, health insurance, non-life insurance, loans and mortgages and banking. Private individuals with assets of over EUR 5 million and institutional clients benefit from extensive wealth management and consulting services as well as receiving economic forecasts and ratings provided by the subsidiaries of the Feri Group. Supported by its subsidiary TPC, MLP also provides companies within dependent consulting and conceptual services in all issues pertaining to occupational pension schemes and remuneration. End of Media Release --------------------------------------------------------------------- Issuer: MLP AG Key word(s): Finance 27.02.2014 Dissemination of a Press Release, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: MLP AG Alte Heerstraße 40 69168 Wiesloch Germany Phone: +49 (0)6222-308-1135 Fax: +49 (0)6222-308-8351 E-mail: [email protected] Internet: www.mlp-ag.de ISIN: DE0006569908 WKN: 656990 Indices: SDAX Listed: Regulierter Markt in Frankfurt (Prime Standard), Stuttgart; Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München; Terminbörse EUREX End of News DGAP-Media --------------------------------------------------------------------- 254635 27.02.2014
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