Wiesloch, November 10, 2022 – The MLP Group continued its growth course in the first nine months of the financial year 2022. The company succeeded in raising both total revenue and earnings before interest and taxes (EBIT). The strategic diversification pursued over recent years once again proved to have a very positive effect. EBIT rose by 10 percent to EUR 52.2 million (9M 2021: EUR 47.3 million). In the period from January to September, 2022, total revenue rose by 7 percent to EUR 674.7 million (9M 2021: EUR 632.2 million). Due to the development on capital markets, MLP only generated low performance-based compensation in wealth management in the first nine months. However, at the same time there was a significant up-tick in interest rate business at MLP Banking, particularly in the third quarter.
"This increasingly difficult economic period in particular shows the positive effects of MLP's diversified business model. As a result, we not only benefit more than average in economically dynamic phases. Rather, in phases of overall economic strain, such as at present, the fact that our business now rests on several interlinked pillars has a clear stabilising effect. It is not a given to achieve a plus in revenues and earnings in such times," says Dr Uwe Schroeder-Wildberg, Chief Executive Officer of MLP SE. "The environment is characterised by significant recessionary tendencies in the economy and increasing strains on the markets. We have no influence on such external effects, but we have a good handle on what we are able to control as a company. In addition, we are experiencing just how much importance clients attach to comprehensive and independent support from a personal advisor, especially in times of crisis. With great calm, clarity and determination, we are continuing on our course."
In the period from January to September, 2022, total revenue rose by 7 percent to EUR 674.7 million (9M 2021: EUR 632.2 million). At the same time, commission income increased from EUR 596.8 million to EUR 611.6 million. At EUR 12.6 million, interest income was significantly above the previous year's level (EUR 9.6 million). Taking the third quarter on its own, total revenue amounted to EUR 202.1 million (Q3 2021: EUR 210.4 million; Q3 2020: EUR 166.3 million). Interest income rose by 57 percent over the same period in the previous year to EUR 5.1 million (Q3 2021: EUR 3.2 million).
The breakdown by consulting fields shows growth in the period from January to September especially in real estate and non-life insurance. The field of real estate (real estate brokerage and development) recorded an especially big leap of 66 percent (increase in revenue from EUR 39.7 million to EUR 66.0 million). This is attributable to successful project business at the MLP subsidiary Deutschland.Immobilien. In addition, real estate brokerage primarily by MLP consultants has contributed to the positive development over the past nine months. Activity slowed here as at the end of the reporting period. Non-life insurance also increased considerably by 17 percent to EUR 142.1 million in this period (9M 2021: EUR 121.4 million). The first-time consolidation of the entities in the Industrial Broker segment also had an effect here; among them RVM, which has been fully consolidated since the second quarter of 2021. DOMCURA and MLP's private client business also displayed positive developments in the first nine months of 2022. The portfolios managed by the MLP Group in the field of non-life insurance rose from EUR 620.1 million as at June 30, 2022, to EUR 623.2 million at September 30, 2022.
Health insurance also performed modestly positively with growth of 2 percent to EUR 41.6 million; business picked up in this consulting field particularly in the third quarter of 2022. The loans and mortgages business, too, achieved a slight climb of about 2 percent to EUR 16.1 million after nine months, despite very gloomy market conditions.
The MLP Group's strong position in wealth management is reflected in the relevant key figures: Despite significant declines on the capital markets in the meantime, the Group's assets under management amount to EUR 54.4 billion as at September 30, 2022 (June 30, 2022: EUR 54.2 billion). This is slightly above the previous year's figure (September 30, 2021: EUR 52.9 billion). The strong positioning of the MLP Group in wealth management is also reflected in the net inflows of funds achieved in all three quarters of 2022 at MLP Banking and FERI. Thanks to this positioning, the MLP Group has only recorded a slightly negative development in wealth management revenue over the past nine months despite the challenging situation on the capital markets and the associated significant decline in performance-based compensation. Revenues amounted to EUR 240.1 million (9M 2021: EUR 249.8 million), although they declined in the second and especially in the third quarter of 2022 compared to the same period of the previous year – as expected. In all three quarters, no significant performance-based compensation incurred due to the negative developments on the capital markets, after they had still contributed significantly to revenues in the comparable period of the previous year, especially in Q3 2021, due to the very positive development on the capital markets at that time.
In old-age provision, revenue saw stable development in the first nine months and stood at EUR 136.3 million (9M 2021: EUR 137.9 million). Market-related challenges were felt at the start of the second quarter in this consulting field. This applies for both private and occupational pension provision and can be attributed to uncertainties for consumers and the strain that numerous companies are currently facing, in particular due to the natural gas supply crisis, ongoing disruptions to supply chains, as well as high inflation. Nevertheless, the topic of occupational health insurance is increasingly in demand.
At EUR 52.2 million (9M 2021: EUR 47.3 million; 9M 2020: EUR 26.8 million), MLP also achieved a significant increase in EBIT after the first nine months in 2022. This was driven primarily by the strong increase in EBIT to EUR 34.6 million in Q1 2022 (Q1 2021: EUR 21.8 million). Q3 EBIT totalled EUR 8.2 million in 2022 (Q3 2021: EUR 15.9 million; Q3 2020: EUR 8.1 million) under significantly less favourable economic conditions. The third quarter of 2021 was still characterised by high performance-based compensation. Net profit rose from EUR 31.2 million to EUR 34.9 million after the first nine months of 2022.
As of September 30, 2022, the MLP Group served 568,400 family clients (June 30, 2022: 567,200). In the first nine months of the year, the gross number of newly acquired family clients was 13,700 (September 30, 2021: 14,500). With 25,100 business and institutional clients, the MLP Group saw slight growth in this area (June 30, 2021: 25,000). As of September 30, 2022, 2,040 client consultants worked for MLP (June 30, 2022: 2,042).
Despite further increased risks in the markets, MLP is still anticipating EBIT in the range of EUR 75 to 85 million for the financial year 2022. Indeed, the Group still expects further growth in new business and an increase in recurring revenue in various consulting fields to largely compensate for the decline that has already been observed and is still to be anticipated in terms of performance-based compensation in wealth management.
Over the past years, MLP has specifically further developed its strategic position. In phases of external economic strain in particular, the Group's business model is able to offset declines in individual areas against growth in other areas, or even to overcompensate for them. As such, MLP continues to expect ongoing satisfactory development in revenue. While MLP is lowering its expectations slightly in the consulting fields of loans and mortgages and old-age provision, the company anticipates a gentle revenue increase in the health insurance business. In terms of interest income, MLP is now expecting a considerable increase for the financial year 2022. At the same time, consistent cost management will continue, not least against the backdrop of the inflation trend.
MLP once again reaffirms the mid-term planning already communicated: Based on the forecast for the current year, MLP is planning an increase in EBIT to a level of EUR 100 to 110 million by the end of 2025, as well as sales revenue of more than EUR 1.1 billion in the same year. This planning essentially rests on three core strategic success factors: a further increase in assets under management in the Group, sustainable growth across all consulting fields and continued expansion of the real estate business even under more difficult general conditions.
"Our continued growth in the first nine months shows that the MLP Group is in a very stable and solid position across the various pillars. We are especially active in high-quality client segments. This gives us stability – also in view of the further increased risks in our markets, which we repeatedly pointed out in the past months. In light of this, we remain very vigilant. For this year, we continue to be generally optimistic and are also keeping a close eye on our medium-term planning for 2025," says Chief Financial Officer Reinhard Loose.
|MLP Group (in EUR million)||Q3/2022||Q3/2021||Change in %||9 months 2022||9 months 2021||Change in %|
|Revenue from real estate project development||8.6||6.7||28||35.0||12.0||+>100|
|Earnings before interest and taxes (EBIT)||8.2||15.9||-48||52.2||47.3||10|
|Earnings before taxes (EBT)||7.5||15.0||-50||50.2||44.6||13|
|Earnings per share (diluted/basic) in EUR||0.04||0.09||-56||0.32||0.29||10|
|Corporate, institutional clients||25,100||25,000*||0|
*) As of June 30, 2022