Stock market year 2015 – Development of the markets

High degree of volatility and increasing prices

Developments of the German share indices were characterised by a high degree of volatility in 2015. While the leading German index DAX gained 11.62% in the first half of the year and reached a new record level of 12,219 points during the first quarter – primarily as a result of the announcement of the European Central Bank’s (ECB) quantitative easing programme (QE) – this was subsequently followed by a phase of significant price drops. These drops were largely caused by the weak economic data coming out of China, whose declining demand for raw materials had an ever increasing influence on global economic cycles. Rejection of the proposed austerity measures by the Greek population also had a negative impact in July. On August 24, the DAX fell by more than 7% in a single day to 9,338 points. At the end of September, the fraud scandal surrounding VW also negatively affected German automotive stocks. The hesitant attitude displayed by the Fed, the US central bank, with regard to increasing interest rates also led to uncertainty.

 

Historic interest rate increase by the Fed

In October, both the DAX (+12.3%) and the MDAX (+9.8%) recorded significant increases – primarily as a result of ECB President Mario Draghi’s proposal for further easing of the monetary policy in the form of QE2. At the same time, Germany’s unemployment figures fell to 4.6%, their lowest level since November 1971. This allowed the upward trend of the German share indices to continue, albeit at a slower pace. On December 3, the ECB then disappointed through non-extension of the monthly bond buyback volume. Investors did not view a time extension of the programme and the increase in the negative deposit rate by 10 to 30 basis points as an adequate support measure. This led to heavy share price losses in Europe of more than 3% on the day of the ECB’s decision.

 

In mid-December, the US central bank introduced the first interest rate increase in the US for seven years with its prime rate increase to 0.25% - 0.5%. In addition to this, the Fed announced further step-by-step interest rate increases for the coming year. With an unemployment rate of 5%, the US had virtually achieved full employment, the economy was enjoying moderate growth and consumption expenditure was increasing significantly. For the year as a whole, the German share market benefited from extreme drops in oil and metal prices, a euro that remained weak, as well as recovery of the economic situation in the eurozone. Despite brief dips in December, the German share indices gained significant ground in the reporting year 2015. The DAX gained 9.56% and stood at 10,743 points at the end of the year. The SDAX, which represents the German small cap index, even increased by 25.88% in the stock market year 2015, closing the year at 9,099 points.

 

MLP share

The MLP AG share was subject to pronounced fluctuations throughout 2015. Following price drops at the start of the year that took the share to its annual low of € 3.48, the price recovered again in the subsequent period. After reaching a preliminary annual peak of € 4.30 on May 26, the price was then once again put under pressure – due to the dividend payout in mid-June, as well as greater interest to sell. This was followed by a volatile third quarter, during which the share was initially able to recover to € 4.23 by the start of August – thereby almost reaching its annual high. However, in the course of the general market downturn that followed, the MLP share too lost ground, and ultimately dropped to € 3.71 on August 24. In the subsequent phase of recovery, the price once again exceeded the € 4 mark in mid-October, but then declined to € 3.67 by the end of the year following the revision of our business development forecast for 2015. This meant that the share was being quoted at virtually the same price as the start of the year. The year-on-year increase in the average volume traded to 81,000 shares per day (previous year: 43,800) is a positive aspect from the perspective of investors. 

 

You can find further information on the MLP share in the “MLP Share” section of our Investor Relations page at www.mlp-ag.de.

  

Dividend

MLP will continue its consistent dividend policy for the financial year 2015. As announced, the distribution rate will be between 50% and 70%. In concrete terms, the Executive Board and Supervisory Board will propose a dividend of € 0.12 per share at the Annual General Meeting on June 16, 2016. This corresponds to a payout-ratio of 66% of the net profit for the period.

  

Key figures compared to previous year

Increase in capital stock in return for non-cash contributions

In the reporting period, MLP AG carried out a capital increase in exchange for non-cash contributions. 1,456,948 new shares were issued in return for 33.33% of the shares in Schwarzer Familienholding GmbH (SFH GmbH), the parent company of the DOMCURA Group companies. These shares carry full dividend rights for the financial year 2015. This measure increased the share capital by 1.35% from 107,877,738 shares to 109,334,686 shares.

Changes to the shareholder structure

In March, a further institutional investor, Schroder PLC, acquired a 3.07% stake in MLP. This investment was then reduced to 2.99% in November. Within the scope of a notification of voting rights, the stake of Barmenia Beteiligungsgesellschaft mbH was reduced to 5.49%, having previously been recorded as 6.67%. As a result of the slight increase in the number of shares, as well as the reduced stake of Barmenia, the freefloat also increased slightly from 48.0% to 49.8% in the financial year 2015. In line with the German Stock Exchange’s definition, institutional investors are not taken into consideration when determining the free float. The following chart provides an overview of the major shareholders.

   

Investor relations activities

The goal of our investor relations activities is to establish a continuous and open dialogue with our shareholders, potential investors and the capital market. We are keen to establish and build on trust among investors and support the market in assessing the value potential of our company. To this end, we provide continuous, timely and transparent information on relevant events and incorporate feedback received from capital market players. We engage in active exchange with both private and institutional investors at regular capital market events, such as roadshows, capital market conferences and our Annual General Meeting. Alongside direct contact, financial reporting is a key basis for our communication. The Annual Report plays a particularly important part here, as it provides comprehensive and transparent information on all aspects of the company.

 

In July 2015, we redesigned our Investor Relations web pages and optimised them for readability on mobile devices. Interesting information on the Group, the share and other relevant notices can be found on these Investor Relations web pages. We also provide a special investor relations newsletter service, whereby anyone interested can sign up to receive e-mails on important events. Anyone interested can also keep up-to-date with news from the company and the sector via twitter. You can find the investor relations section at: www.mlp-ag.com/investors. Please feel free to contact us if you prefer to talk to someone in person.