ECONOMIC REPORT

Net Assets

 

Analysis of the asset and liability structure

Further increase in balance sheet total

On the reporting date of December 31, 2015 the balance sheet total of the MLP Group increased by € 128.0 million to € 1,752.7 million (€ 1,624.7 million).

 

Intangible assets – essentially including the client base, brand and goodwill – increased from € 156.2 million to € 174.5 million. This increase is primarily associated with the aforementioned acquisition of the DOMCURA Group in the last financial year. At € 65.7 million (€ 66.0 million), property, plant and equipment remained stable. The “Investment property” item declined to € 0.0 million (€ 7.3 million). This was due to the reclassification of property to the “Non-current assets held for sale and disposal groups” item. As of the balance sheet date, this item amounted to € 6.0 million (€ 0.0 million). The difference reflects the write-down performed on this property back in the second quarter of 2015.

 

Receivables from banks in the banking business increased to € 600.3 million (€ 559.3 million). This rise is essentially the result of an increase in investments in daily deposits due on demand. Receivables from clients in the banking business also increased to € 542.7 million (€ 495.6 million). This can largely be attributed to an increase in loan exposure, as well as an increase in investments in promissory note bonds. Around 66% (66%) of receivables from banks and clients in the banking business have a term to maturity of less than one year.

 

At € 147.9 million (€ 145.3 million), financial investments remained virtually unchanged from the previous year. Cash and cash equivalents increased to € 77.5 million (€ 49.1 million). The main reason behind this development is the first-time inclusion of the DOMCURA Group in the scope of consolidation, as well as the profit transfers of MLP Finanzdienstleistungen AG and FERI AG for the financial year 2014. Among other factors, the dividend payment to our shareholders, as well as payment of a portion of the purchase price within the scope of the acquisition of the DOMCURA Group, had the opposite effect. You can find detailed information on the change in cash and cash equivalents in the chapter entitled “Financial position”.

 

Other receivables and assets fell from € 117.7 million to € 112.5 million. This item essentially contains commission receivables from insurance companies resulting from the brokerage of insurance products.

   

Equity capital backing remains good

The equity capital backing of the MLP Group remains good. As of December 31, 2015, shareholders’ equity was € 385.8 million (€ 376.8 million). The increase can essentially be attributed to the consolidated net earnings in 2015, as well as the aforementioned capital increase in exchange for non-cash contributions. Due to the higher balance sheet total, the equity ratio was 22.0% (23.2%). Based on Group net profit of € 19.8 million, we therefore achieved a return on equity of 5.1% (7.7%).

 

Provisions fell from € 92.0 million to € 86.5 million, largely due to the lower provisions for cancellation risks and pensions.

 

Further increase in client deposits

The deposits of our clients (liabilities due to clients in the banking business) increased to € 1,102.6 million (€ 1,007.7 million) at the end of the reporting period. This increase is primarily attributable to short-term deposits held in bank accounts, credit cards and instant access savings accounts. Liabilities due to banks in the banking business rose to € 23.1 million (€ 17.4 million). This can be attributed to a higher volume of development loans being passed on to our clients. This item includes the refinancing funds from funding institutions.

Other liabilities increased to € 140.2 million (€ 117.8 million). This item essentially comprises current liabilities due to our consultants and office managers in connection with open commission claims (please also refer to the section entitled “Financial position”). The increase is primarily the result of the first-time inclusion of the DOMCURA Group.

General statement on the economic situation

The corporate management still considers the Group’s economic situation to be positive, both at the end of the reporting period and at the time of preparing the Group management report. This also applies to our financial position. Liquidity remains at a good level. The equity capital backing also remains good.

Comparison of the actual and forecast development of business

At the start of 2015, we issued a forecast for EBIT that indicated a slight increase over the previous year. We also made a qualitative estimate regarding the development of sales revenues.

 

Although we did not quite reach our target in the field of old-age provision, the field of health insurance recorded a slight increase as planned. In the field of wealth management, we surpassed our original forecast for a slight increase in revenue.

 

For administrative expenses, we had forecast a constant level of € 255 million. With actual administrative expenses of € 262.3 million (prior to acquisitions) in 2015, we remained largely within our budgetary framework.

 

With pro forma EBIT (prior to acquisitions) of € 32.5 million, we did not quite reach our original forecast level.