ECONOMIC REPORT

Segment report

 

In the reporting period the brokerage branch of activity was spun off from MLP Banking AG with retroactive effect from October 1, 2017. With this step, all regulated banking activities, including investment advisory services, were bundled at MLP Banking AG, while all other consulting services are now provided by the new MLP Finanzberatung SE. You can find further details on this in the chapter Fundamental principles of the Group.

 

The financial consulting segment includes revenue from all fields of consulting – i.e. old-age provision, health and non-life insurance, as well as loans and mortgages and real estate brokerage. The banking segment brings together all banking services for both private and corporate clients – from wealth management, accounts and cards, through to the interest rate business.

 

The FERI segment primarily generates revenue from the wealth management field of consulting, while the DOMCURA segment generates most of its revenue from the non-life insurance business. The industry situation for the Group described in the individual fields of consulting applies accordingly to the segments.

 

The Holding segment does not have active operations.

Financial consulting segment

The spin-off of MLP Finanzberatung SE from MLP Finanzdienstleistungen AG, described in the chapter Fundamental principles of the Group, came into force from a tax perspective on September 30, 2017 and from a financial accounting perspective on October 1, 2017. The figures disclosed in the following therefore include the brokerage business for the period from October 1, 2017 to December 31, 2017. Due to a limited scope for comparison, the previous year's values have not been provided.

 

Total revenue in the reporting period was € 133.2 million. This figure is essentially made up of commission income generated in the consulting fields of old-age provision, health insurance, non-life insurance and loans & mortgages and other commission and fees, which primarily comprises revenue from real estate brokerage. Development was in line with the overall development in the Group.

 

Other revenue was € 6.4 million. € 1.1 million of this figure is attributable to passed-on costs occurred in connection with optimising the corporate structure.

 

Commission expenses amounted to € 58.5 million. Personnel expenses amounted to € 21.5 million. Scheduled depreciation and impairment was € 3.7 million. Other operating expenses were € 21.2 million. This figure includes one-off expenses of € 1.2 million within the scope of further optimising the corporate structure. Taking into account other revenue, one-off expenses of € 0.2 million were accrued in the financial consulting segment.

 

EBIT was € 24.9 million. The EBIT margin was 18.7%. At a finance cost of € -0.2 million, EBT was € 24.7 million. It is important to note that this only includes the income and expenses for the period from October 1, 2017 to December 31, 2017. The brokerage business is traditionally very strong during this end-of-year business period. The income and expenses of the brokerage business in the period from January 1, 2017 to September 30, 2017 are recorded in the banking segment.
 

Banking segment

The spin-off of MLP Finanzberatung SE from MLP Finanzdienstleistungen AG, described in the chapter Fundamental principles of the Group, came into force from a tax perspective on September 30, 2017 and from a financial accounting perspective on October 1, 2017. Banking business operations remained at MLP Finanzdienstleistungen AG. MLP Finanzdienstleistungen AG was renamed MLP Banking AG with entry into the Commercial Register on November 30, 2017.

 

The banking segment therefore includes earnings from the spun off brokerage business generated in the period from January 1, 2017 to September 30, 2017, while in the period from October 1, 2017 to December 31, 2017 earnings do not include those of the spun off brokerage business. Wealth management and the interest rate business remained in the Banking segment. As such, the previous year's figures presented in brackets are not comparable with the figures from December 31, 2017, especially since the fourth quarter is traditionally by far the strongest in the brokerage business in terms of sales.

 

Total revenue in the reporting period was € 290.0 million. Revenue amounted to € 278.3 million. Other revenue was € 11.6 million. € 1.5 million of this can be attributed to passed-on costs occurred in connection with optimising the corporate structure. At € 20.1 million, revenue from the interest rate business was slightly below the previous year. This was due to the ongoing low interest rate.

 

Commission expenses amounted to € 129.0 million. In the light of continuingly low interest rates, interest expenses were € 1.1 million.

 

Personnel expenses were € 53.2 million. This figure includes € 0.7 million in one-off expenses for further optimising the corporate structure. Scheduled depreciation and impairment was € 7.5 million. Other operating expenses were € 103.3 million. This item includes around € 6.2 million in one-off expenses for further optimising the Group structure.

 

Taking into account other revenue, total one-off expenses of € 5.4 million were accrued in the Banking segment for further optimising the corporate structure.

 

EBIT was € -4.6 million. With a finance cost of € -0.5 million, EBT was € -5.0 million. It is important to note that this figure no longer includes the income and expenses of the brokerage business from October 1, 2017. As described, these are recorded in the financial consulting segment.
  

FERI segment

The FERI segment represents the activities of the FERI Group. Revenue is primarily generated in this segment from the wealth management field of consulting.

 

Total revenue increased by 11.9% to € 144.0 million (€ 128.7 million) and therefore reached a new record level. Among other things, FERI was able to collect higher performance fees in the last financial year than in the previous year.

 

As a result of higher revenue, commission expenses also rose to € 81.8 million (€ 72.1 million). Against a backdrop of higher variable remuneration, personnel expenses amounted to € 30.5 million (€ 28.1 million). Scheduled depreciation and impairment was € 1.2 million (€ 1.5 million). Other operating expenses decreased to € 10.6 million (€ 11.8 million).

 

As a result of higher revenue, EBIT increased to € 19.9 million (€ 14.3 million). The EBIT margin improved to 13.8% (11.1%). The finance cost amounted to € -0.2 million (€ -0.1 million). EBT therefore reached € 19.7 million (€ 14.2 million).
 

DOMCURA segment

At DOMCURA, revenue is primarily generated in the non-life insurance consulting field. DOMCURA's business model is characterised by a high degree of seasonality. Accordingly, the subsidiary records high revenue and comparably high earnings in the first quarter of each year. This is then typically followed by a loss from Q2 to Q4.

 

DOMCURA generated revenue of € 73.3 million in the reporting year (€ 70.7 million). Other revenue was € 4.6 million (€ 3.2 million). This is attributable to final settlements of expiring contracts with insurers that essentially were already made in the second quarter. Accordingly, total revenue was € 77.9 million (€ 73.9 million).

 

Commission expenses amounted to € 48.3 million (€ 46.6 million). These are essentially accrued as variable remuneration for brokerage services.

 

Administration costs were € 23.9 million (€ 24.3 million). Thereof personnel expenses accounted for € 14.3 million (€ 14.1 million). Regular depreciation and impairment was € 1.3 million (€ 1.4 million). Other operating expenses amounted to € 8.3 million (€ 8.8 million).

 

EBIT rose to € 5.7 million (€ 3.0 million). With a finance cost of € 0.0 million (€ 0.0 million), EBT was € 5.7 million (€ 3.0 million).
 

Holding segment

The Holding segment does not have active operations. Total revenue declined to € 9.6 million in the reporting year (€ 13.7 million). The previous year's higher figure was essentially due to the sale of a property and a settlement payment received in connection with a lawsuit.

 

Personnel expenses were € 3.8 million (€ 3.6 million). Scheduled depreciation and impairment amounted to € 1.7 million (€ 1.9 million). Other operating expenses increased to € 12.6 million (€ 10.5 million). This item includes around € 3.6 million in one-off expenses for further optimising the corporate structure.

 

Set against the background of the one-off expenses accrued, as well as lower total revenue, EBIT declined to € -8.4 million (€ -2.4 million). The finance cost was € -0.4 million, following € -0.6 million in the previous year. EBT was € -8.8 million (€ -3.0 million).

 

Total one-off expenses of € 3.6 million were accrued in the Holding segment in connection with further optimising the corporate structure.