Roadshow Frankfurt

The MLP Group –
The partner for all
financial matters
,
Management Presentation
The MLP Group
1. MLP at a glance
2. Key Financials 2015
3. Strategy & Outlook
4. Appendix
Page 2
March/April 2016
The MLP Group at a glance
The MLP Group
The Partner for all financial matters | Private Clients – Companies – Institutional Investors
MLP Finanzdienstleistungen AG
The Partner for all
matters
• ~1,950 consultants
• ~160 branch offices
• ~1,300 employees
FERI AG
DOMCURA AG
TPC GmbH
The investment expert
for institutional
investors and high
net-worth individuals
The underwriting
agency, focussing on
private and commercial
non-life insurance
The specialist in
occupational pension
provision management
• ~220 employees
• International locations:
Vienna, Zurich,
Luxembourg
• ~290 employees
• ~5,000 partners
(insurance brokers,
pools, sales offices)
• ~25 employees
• Client consulting
together with MLP
client consultants
 The views and expectations of our clients always represent the starting point in each of these fields
 We examine the offers of all relevant product providers in the market
 We then present our clients with suitable options so that they can make the right financial decisions
The process based on scientifically substantiated market and product analyses.
Page 3
March/April 2016
MLP Group – An Overview
• Around 859,000 private clients in the mass affluent segment of the market target groups: graduates (i.e. physicians, solicitors,
engineers and economists)
• Over 200 private clients in the HNWI market & over 5,000 corporate clients, employers and institutional clients
Main business areas
Clients
Old-age provision
Brokered premium sum for new business totalled € 3.5 billion in 2015.
Occupational pension provision accounted for around 12% of this figure.
Share of revenue ‘15
42%
Wealth
Management
€ 29.0 billion in assets under management as at December 31, 2015 in business with mass
affluent clients, HNWI and institutional investors.
32%
Non-life insurance
Business field expanded by acquisition of DOMCURA Group in 2015.
More that € 350 million premium volume within the MLP Group.
11%
Health insurance
Private health insurance, supplementary private health insurance,
long-term care, occupational health insurance, statutory health insurance.
9%
Top Financials FY 2015
Total revenue: € 557.2 mil.
Pro forma EBIT*: € 32.5 mil.
EBIT:
€ 30.7 mil.
Net profit:
€ 19.8 mil.
MLP Share
Shares outstanding: 109,334,686
Free Float: 49.81% (Definition on the German stock exchange)
Average daily trading volume: 81,000 (Xetra, 12-month average as at end of December 2015)
Page 4
March/April 2016
Equity Ratio:
22.0%
Core Capital Ratio: 14.3%
Consultants:
1,935
Dividend per share:
Return on Equity:
Employees (9M’15):
€ 0.12
5.1%
1,803
*adjusted for the
aquisition of DOMCURA
Attractive dividend policy & stable shareholder structure
11.8%
Dividend policy
Return on
dividend:
Pay-out ratio:
50% - 70% of net profit
6.4%
2010
Shareholder
structure
Dr. h. c. Manfred Lautenschläger
HDI
Barmenia
Allianz SE
Angelika Lautenschläger
Freefloat (Def. Deutsche Börse)
23.22%
9.36%
5.49%
6.18%
5.94%
49.81%
4.6%
4.0%
3.1%
2011
2012
2013
Research coverage
Page 5
March/April 2016
2015
Freefloat
Angelika Lautenschläger
Barmenia
Allianz SE
HDI Pensionskasse
Buy
Hold
Underperform
Hold
Hold
2014
Dr. h. c. Manfred Lautenschläger
[FMR LLC: 7.00%, Schroders PLC: 2.99%]
Equinet/ESN
Bankhaus Lampe
Main First
Independent Research
HSBC Global Research
3.3%
PT 3.50
PT 3.50
PT 3.60
PT 2.90
PT 3.00
Fundamental changes in the market
Trend
Effects
Client behaviour
 Fundamental scepticism on the part of clients towards the financial industry
since the outbreak of the financial crisis
 Quick and inexpensive information possibilities for clients
via the internet
 Distinct desire to make their own financial decisions
• Intense competition
• Quality of consulting services and differentiation
from the competition continue to gain in significance
• Contract conclusion for simple products sometimes takes place without
consultation
Demographics
 Rising life expectancy and low birth rate lead to a significantly ageing society
 Increasing pressure on state social welfare systems
 Number of people in work constantly falling
• Great need for private and occupational old-age provision as well as private
health insurance
• Recruiting: Good labour market perspectives leads to a “war of talents” for welleducated/trained individuals
Regulation (e.g. IMD II, MiFID II, LVRG)
 Since 2004 and especially since 2008 intensive regulation
 In addition to impacting at the product level,
regulation also particularly applies to the training of consultants, documentation
and transparency
• Significant rise in administrative activities burdens productivity
• Increase in fixed costs for training, IT systems and administration
• Quality becoming an increasingly important aspect
Page 6
March/April 2016
The MLP Group
1. MLP at a glance
2. Key Financials 2015
3. Strategy & Outlook
4. Appendix
Page 7
March/April 2016
Growth in virtually all fields of consulting
Old-age provision
Wealth
management
Non-life insurance
Health insurance
Loans
Other commissions
and fees
- 10 %
+ 13 %
+ 59 %
+ 6%
+ 19 %
+ 86 %
250
239,7
180
215,7
166
60
54.9
50
43.5
147
45.9
15.6
16
18
16.2
13.6
34.6
125
90
0
0
2014
2015
2015
March/April 2016
2015
Pro forma EBIT:
€ 32.5 million
0
0
0
2014
8
9
25
0
2014
Total revenue:
€ 557.2 million
Page 8
8.4
30
2014
2015
Dividend proposal:
12 cents per share
2014
2015
2014
2015
Key facts on business development
 In 2015 MLP profited from the broadening of the revenue basis more than
ever before.
 Growth in virtually all consulting fields – old-age provision remains very
difficult due to market conditions.
 MLP generates solid profits despite challenging framework conditions.
 MLP is further tightening its cost management in order to produce
sustainable growth again from 2017.
Page 9
March/April 2016
Difficult market environment in old-age provision persists
Percentage of people who make no monthly savings for old-age provision:
in percent
40
40
35
32
30
20
18
20
10
2011
2012
2013
2014
Source: Deutscher Sparkassen- und Giroverband financial group, Wealth Barometer 2011–2015
Page 10
March/April 2016
2015
Strategic portfolio significantly broadened
Expansion of
non-life insurance
Occupational pension provision
Clear business model
Wealth management
Real estate
2004
Foundation of Occupational
Pension Provision division
2005
Sale of own
insurance subsidiaries
2006
MLP buys shares in FERI AG
2011
Start of real estate portfolio
2015
Acquisition of DOMCURA Group
2011
MLP acquires all shares
in FERI as planned
2014
Expansion of
real estate portfolio
• Underwriting agency
2008
Acquisition of TPC
• Further strategically relevant
business segment tapped
• Significant potential with
existing business
FY 2005
FY 2015
Commission income € 467.9 million
Commission income € 514.3 million
4%
3% 3%
2% 1%
Proportion of recurring revenue
11 %
10 %
42 %
80 %
3%
9%
~30 %
~60 %
Old-age provision
incl. occupational pension provision
Wealth management
Non-life insurance
Health insurance
Loans and mortgages
32 %
Other commission and fees (incl. real estate)
Page 11
March/April 2016
FY 2015: Total revenue rises to € 557.2 million
Total revenue FY
€ million
568.0
499.0
Revenue
Commission income
486.9
457.7
480.5
518.0
544.6
498.5
526.7
400
557.2
531.1
514.3
535.7
545.5
509.7
600
Revenue from the
interest rate business
Other revenue
200
0
28.2
18.8
2011
Page 12
March/April 2016
26.6
23.5
2012
22.9
21.4
22.8
18.5
2013
*
2014
21.4
21.5
2015
*Previous year's values adjusted
Growth in virtually all consulting areas
Revenue
€ million
∆ 2014/2015 in %
Old-age provision
-10.0
Wealth management
12.9
Health insurance
5.5
Non-life insurance
58.7
Loans and mortgages*
19.1
Other commission and fees
Revenue from the interest rate business
*Excluding MLP Hyp
Page 13
March/April 2016
85.7
-6.6
∆ in %
2015
2014
Q4 2015
215.7
239.7
87.8
106.6
-17.6
117,9
166.0
147.0
44.7
41.3
8.2
45.9
43.5
9.2
13.9
-33.8
54.9
34.6
21.3
2.7
>100.0
16.2
13.6
5.1
4.5
13.3
15.6
8.4
5.1
3.0
70.0
21.4
22.9
5.3
5.8
-8.6
Q4 2014
Assets under management continue to grow
Wealth management
Old-age provision
Assets under management, MLP Group
Premium sum of MLP's new business
€ billion
€ billion
29.0
30,0
4.12
4,5
27.5
3.62
3.47
24.5
25,0
19.8
20,0
20.2
3
21.2
17.0
1,5
15,0
12.7
14.0
0
10,0
2007
2008
2009
as at 31 December
Page 14
March/April 2016
2010
2011
2012
2013
2014
2015
2013
2014
2015
Number of consultants rises slightly
New clients, gross
Client consultants
2000
30000
1,952
1,913
1,914
1,935
27,900
27,500
25000
20000
1750
15000
10000
1500
Dec 31, 2014
Q230,
2015
Jun
2015
Sep 30, 2015
Dec 31, 2015
Total clients:
Page 15
March/April 2016
2014
2015
847,600
858,700
Client counting method will reflect the Group structure in a
better way
Presentation of client numbers as of Q1 2016
Private clients (families)
• Combined individuals:
Partner relationship or parents-child unit and
allocated to the same client consultant
• System applies for MLP and the relevant
subsidiaries FERI and ZSH
Number
of individual clients
• Corporate clients in occupational pension provision
Corporate
and institutional clients
• Institutional clients at FERI
• Sales partners at DOMCURA
• Freelance professionals such a doctors as employers
Page 16
March/April 2016
FY 2015: Pro forma EBIT amounts to € 32.5 million
Income statement
€ million
Q4 2015
Q4 2014
187.7
186.4
557.2
531.1
Pro forma EBIT*
24.2
29.6
32.5
39.0
EBIT
23.3
29,6
30.7
39.0
Finance cost
-0.4
-1.2
-2.8
-1.3
EBT
22.9
28.4
28.0
37.6
Taxes
-6.8
-6.6
-8.2
-8.7
Net profit
16.1
21.8
19.8
29.0
Total revenue
EPS in euros
(diluted/basic)
*adjusted for the acquisition of DOMCURA
Page 17
March/April 2016
0.15
0.20
2015
0.18
2014
0.27
Net profit 2015 based on an assumed
acquisition of DOMCURA with effect from
Jan 1, 2015: € 23.3 million
Already reported one-off effects
from Q3/2015:
• One-off charge to the financial result
(€ -2.0 million)
• One-off extra tax expense
(€ -1.1 million)
Own funds ratio of 14.3 %
€ million
Dec 31, 2015
Dec 31, 2014
Intangible assets
174.5
156.2
Financial assets
147.9
145.3
77.5
49.1
Other receivables and assets
112.5
117.7
Shareholders' equity
385.8
376.8
Cash and cash equivalents
Equity ratio
Other liabilities
Total
Page 18
March/April 2016
22.0 %
23.2 %
140.2
117.8
1,752.7
1,624.7
 Core capital ratio: 14.3 % (15.6 %)
 Equity ratio: 22.0 % (23.2 %)
 Return on equity: 5.1 % (7.7 %)
Executive Board proposes dividend of 12 cents –
dividend yield: 3,3 %
Dividend per share
Dividend yield*
in %
euro cent
20
5
17
16
4.6
15
12
10
 Distribution rate: 56 %**
3.3
3,5
3.1
2,5
 Unchanged planned distribution rate:
50 % to 70 % of the
net profit for the period
5
0
0
2013
2014
2015
2013
*as at 31 December
Page 19
 At the same time, capital is required for:
- acquisitions
- capital expenditure
- capital management (Basel III)
March/April 2016
2014
2015
**based on the group net profit, simulating the
acquisition of DOMCURA as of 1 January 2015
The MLP Group
1. MLP at a glance
2. Key Financials 2015
3. Strategy & Outlook
4. Appendix
Page 20
March/April 2016
Strategic agenda 2016
Implementation
Strategic focus
1
Inorganic growth
2
• MLP Group open to acquisitions in two areas:
• In FERI market segment
• In MLP private client business
• Previously started growth initiatives will be continued:
Organic growth
•
•
•
3
Tightening of cost
management
Page 21
March/April 2016
Broadening of revenue basis: Integration and further development of
DOMCURA business; further expansion of wealth management;
expansion of real estate portfolio
Implementation of digitalisation strategy: Online sale of basic products
and expansion of digital range of information and services
Continuation of recruiting offensive: New entry-level models
established, master's course ready to start
• Further reduction of cost by around € 15 million by
the end of 2017
Making MLP more
independent
of short-term
market influences
and returning it to a
significantly
increased profit
level
Significant increase in consolidation within the market due to
Life Insurance Reform Act (LVRG)
Number of insurance intermediaries
Effects of the Life Insurance Reform Act
in Germany
(LVRG)
280.000
,
• Quality of consultancy and
portfolio is even more important
,
260.000
,
240.000
,
220.000
• Sale organisations with a high cancellation
rate lose trail commissions
,
200.000
180.000
,
,
160.000
• Major challenges for pyramid sales
organisations
,
140.000
,
120.000
100.000
,
2010
2011
2012
2013
Source: DIHK, entries in the Insurance Intermediary Register
Page 22
March/April 2016
2014
2015
Even more balanced revenue basis in the medium term
Development of revenue distribution
Proportion of recurring revenue
2015
2005
4%
2% 1%
11%
80%
10%
2019e
Old-age provision
Wealth management
3% 3%
42%
21%
3% 3%
34%
Health insurance
incl. occupational pension
provision
Non-life insurance
Loans and mortgages
Other commission and fees (incl. real estate)
3%
9%
~30%
32%
~65%
~60%
8%
31%
Page 23
March/April 2016
DOMCURA acquisition: targeted further development within the
MLP Group
New solution for MLP clients in the non-life insurance sector: complete protection with liability insurance,
accident insurance, etc.
RT 1
RT 2
RT 3
RT 4
RT 5
Private product bundle
Liability Contents Accident Buildings
Legal
with process management
Service
Exact knowledge of the needs
of MLP clients
Collection Claim
Easy access to all
relevant data
Instant policy
Client
Client
Client
Client
Client
Client
Client
Client
Further development of the DOMCURA business with other market actors (e. g. brokers)
Expansion of the corporate client business through DOMCURA commercial and industrial brokers
Page 24
March/April 2016
Recruiting offensive to be continued
Further training grants and allowances for easing
transition to self-employment are bearing fruit
Further measures:
 Introduction of a master's course in order
to increase attractiveness for bachelor's graduates
 Intensification of recruiting activities via online
media
 Continuation of internship programme
 Continuation of the strategy of opening new offices
in the university segment
Master of Financial Planning
Steinbeis School of Management and Innovation (SMI)
• Widespread recognition of MLP training
• Very high level of flexibility for participants
Financial Planning
Selective modules
Mandatory modules
Selective modules
Business Administration
Page 25
March/April 2016
Communication
Leadership
Online strategy contributes to personal consulting
Digital services
• Range of information (mlp-financify.de, mlp.de)
• Online sale of basic products
Personal consulting
65 %
27%
across the market
want consulting on
complex products in
the branch or at home*
only online
• Digital (self-)services, e. g. vehicle business
• Client portal for digital interaction with existing clients
*Source: Roland Berger
Page 26
March/April 2016
New kinds of support through expansion of Customer Service
Centre (CSC)
Now
Client is supported by consultant
Future
Consultant chooses type of support
Support by consultant
Temporary support by CSC
Direct support by CSC
Active and reactive
Commission
Consultant entitled to
commission
Consultant entitled to commission
Consultant not entitled to
commission
Additional costs
(for consultant)
None
Consultant pays fee
None
Page 27
March/April 2016
Cost management tightened further
Administrative expenses* 2008 – 2017 (planned)
in € million
Incl. DOMCURAadministrative expenses
350
Total administrative
expenses
One-offexpenses
314
300
262
273
280,5
Saving***
11
23
3,5
15
Saving***
265,5
11,5
250
As of
August
2015
200
150
100
2008
2016**
2015
* Defined as personnel expenses, depreciation and amortisation as well as other operating expenses
**Allowances for losses are a seperate item in the income statement as of this year
Page 28
March/April 2016
***Assumptions: completely realised in administrative expenses
2017
Outlook
Qualitative assessment of the development of sales revenues
2016
2017
Revenue from old-age provision
0
0
Revenue from health insurance
+
0
Revenue from wealth management
+
+
Revenue from non-life insurance
++
+
very positive: ++, positive: +, neutral: 0, negative: -, very negative: -(in each case compared to the
previous year)
 For 2016 MLP expects an operating EBIT (before one-off effects) slightly above 2015
 Compared to 2015 MLP anticipates a significant increase in EBIT from 2017 onwards
Page 29
March/April 2016
Summary
 In view of the external conditions the year 2015 is additional proof that the further
development of the business model is increasingly taking effect.
 MLP will further accelerate the transformation in 2016. The Group's cost
management will be tightened even further to this end. Alongside the successful
growth initiatives, MLP is checking opportunities for inorganic growth.
 On this basis the level of earnings is to significantly rise again from 2017.
Page 30
March/April 2016
Contact
Andreas Herzog
Head of Investor Relations and
Financial Communications
Alte Heerstr. 40
69168 Wiesloch
Germany
Tel.: +49 (0) 6222 • 308 • 8310
Fax: +49 (0) 6222 • 308 • 1131
[email protected]
www.mlp-ag.com
Page 31
March/April 2016
The MLP Group
1. MLP at a glance
2. Key Financials 2015
3. Strategy & Outlook
4. Appendix
Page 32
March/April 2016
Consolidated balance sheet MLP Group
Assets as at December 31, 2015
All figures in € '000
Intangible assets
Property, plant and equipment
Investment property
Shares accounted for using the equity method
Deferred tax assets
Receivables from clients from the banking business
Receivables from banks from the banking business
Financial investments
Tax refund claims
Other receivables and other assets
Cash and cash equivalents
Non-current assets held for sale
Total
Page 33
March/April 2016
Liabilities and shareholder's equity as at December 31, 2015
Dec 31, 2015 Dec 31, 2014
174,504
156,182
65,745
66,037
7,262
3,481
2,772
7,033
6,728
542,696
495,569
600,339
559,316
147,916
145,276
14,893
18,743
112,531
117,665
77,540
49,119
6,040
1,752,719
1,624,668
All figures in € '000
Equity
Provisions
Deferred tax liabilities
Liabilities towards clients from the banking business
Liabilities towards banks from the banking business
Tax liabilities
Other liabilities
Total
Dec 31, 2015 Dec 31, 2014
376,795
385,753
92,049
86,536
7,404
10,549
1,007,728
1,102,569
17,380
23,095
5,531
4,006
117,780
140,211
1,752,719
1,624,668
Income statement for the period from
January 1 to December 31, 2015
All figures in € '000
Q4 2015
Q4 2014
2015
2014
Revenue
Other revenue
Total revenue
Commission expenses
Interest expenses
Personnel expenses
Depreciation and amortisation
Other operating expenses
Earnings from shares accounted for using the equity method
Earnings before interest and taxes (EBIT)
Other interest and similar income
Other interest and similar expenses
Finance cost
Earnings before taxes (EBT)
Income taxes
Net profit
Of which attributable to owners of the parent company
178,434
9,251
187,685
-86,158
-564
-32,465
-3,308
-42,330
465
23,326
113
-532
-410
22,916
-6,785
16,131
16,131
177,819
8,618
186,437
-84,030
-563
-28,832
-3,341
-40,392
334
29,612
151
-1,368
-1,217
28,395
-6,631
21,764
21,764
535,651
21,529
557,180
-253,584
-1,921
-113,457
-15,113
-144,234
1,836
30,706
509
-3,263
-2,753
27,953
-8,170
19,783
19,783
509,727
21,378
531,105
-233,633
-2,838
-105,964
-13,417
-137,394
1,127
38,986
669
-2,007
-1,337
37,649
-8,694
28,955
28,955
0.15
0.15
0.20
0.20
0.18
0.18
0.27
0.27
108,484,800*
107,877,738
108,484,800*
107,877,738
Earnings per share in €
basic
diluted
Number of shares
* Weighted average number of shares in the financial year
Page 34
March/April 2016
MLP Group Segment reporting FY 2015
Financial Services
All figures in € '000
Revenue
Other revenue
Total revenue
Commission expenses
Interest expenses
Personnel expenses
Depreciation/amortisation and impairment
Other operating expenses
Earnings from shares accounted for using the equity
method
Earnings before interest and tax (EBIT)
Other interest and similar income
Other interest and similar expenses
Finance cost
Earnings before tax (EBT)
Income taxes
Net profit (total)
Page 35
March/April 2016
FERI
DOMCURA
Holding
Consolidation
Total
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
395,515
13,016
408,531
-172,542
-1,923
-74,187
-9,473
-126,672
403,705
12,224
415,929
-176,026
-2,841
-72,842
-9,180
-126,586
123,885
6,235
130,120
-70,693
-30,361
-1,762
-13,575
109,229
4,698
113,927
-60,253
-27,575
-2,110
-11,611
20,007
2,182
22,190
-13,454
-5,144
-686
-4,745
-
10,995
10,995
-3,765
-3,193
-10,723
15,443
15,443
-5,547
-2,127
-10,468
-3,757
-10,900
-14,656
3,105
2
11,482
-3,208
-10,987
-14,195
2,647
2
11,272
535,651
21,529
557,180
-253,584
-1,921
-113,457
-15,113
-144,234
509,727
21,378
531,105
-233,633
-2,838
-105,964
-13,417
-137,394
1,836
25,569
1,127
29,582
13,729
12,377
-1,839
-
-6,686
-2,699
-67
-274
1,836
30,706
1,127
38,986
178
-468
-290
25,279
238
-779
-540
29,041
50
-370
-319
13,409
19
-673
-653
11,724
21
-3
19
-1,820
-
286
-2,598
-2,312
-8,998
429
-757
-329
-3,027
-26
176
149
82
-17
202
185
-89
509
-3,263
-2,753
27,953
669
-2,007
-1,337
37,649
-8,170
19,783
-8,694
28,955
MLP Group Segment reporting Q4 2015
Financial Services
FERI
DOMCURA
Holding
Consolidation
Total
All figures in € '000
Q4/2015
Q4/2014
Q4/2015
Q4/2014
Q4/2015
Q4/2014
Q4/2015
Q4/2014
Q4/2015
Q4/2014
Q4/2015
Q4/2014
Revenue
Other revenue
Total revenue
Commission expenses
Interest expenses
Personnel expenses
Depreciation/amortisation and impairment
Other operating expenses
Earnings from shares accounted for using the equity
method
Earnings before interest and tax (EBIT)
132,195
4,207
136,402
-59,892
-565
-18,860
-1,873
-34,741
147,188
3,932
151,120
-68,369
-563
-19,202
-2,282
-35,655
34,006
2,612
36,618
-17,953
-9,070
-455
-4,263
31,591
1,797
33,388
-16,340
-8,091
-547
-4,454
13,282
2,019
15,302
-9,130
-3,177
-413
-3,480
-
2,815
2,815
-1,357
-566
-2,483
5,473
5,473
-1,540
-511
-2,975
-1,049
-2,402
-3,451
818
1
2,636
-961
-2,583
-3,544
680
1
2,693
178,434
9,251
187,685
-86,158
-564
-32,465
-3,308
-42,330
177,819
8,618
186,437
-84,030
-563
-28,832
-3,341
-40,392
465
20,937
334
25,382
4,877
3,955
-899
-
-1,592
446
3
-171
465
23,326
334
29,612
35
-83
-48
20,888
79
-560
-481
24,901
28
-242
-214
4,663
16
-524
-508
3,447
17
-3
14
-885
-
31
-225
-194
-1,786
58
-332
-274
172
3
30
32
36
-2
48
46
-125
113
-523
-410
22,916
151
-1,368
-1,217
28,395
-6,785
16,131
-6,631
21,764
Other interest and similar income
Other interest and similar expenses
Finance cost
Earnings before tax (EBT)
Income taxes
Net profit (total)
Page 36
March/April 2016