Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MLP SE (WBO:MLP, Financial) set a new record for total revenue and EBIT in the first half of 2024.
- Assets under management surpassed the EUR60 billion mark.
- The company confirmed its EBIT forecast for 2024 and is targeting the upper half of the earnings corridor.
- Significant revenue growth in the wealth management competence field, with a 26% increase to EUR240 million.
- Strong balance sheet with shareholders' equity rising to EUR570 million and a regulatory core capital ratio of 19.9%.
Negative Points
- Real estate development business negatively impacted earnings in the first half of the year.
- Occupational pension provision is facing subdued demand due to the current economic situation.
- Non-life insurance portfolio grew by 7%, but revenues only increased by 2.5%, indicating a potential margin mix issue.
- Potential risks from geopolitical conflicts and lower-than-anticipated recovery of the real estate market could impact future earnings.
- Goodwill impairment risk remains for the real estate development segment.
Q & A Highlights
Q: Can you provide the specific amount of performance fees and the capital in and outflows going into assets under management? Also, what is the net liquidity figure?
A: The performance fees for the first half of the year were EUR9.2 million. Gross inflows were EUR2.4 billion, and outflows were EUR1.9 billion, leading to net inflows of around EUR0.5 billion plus a positive performance of EUR3 billion. The net liquidity figure as of June 30th is around EUR220 million. (Reinhard Loose, CFO)
Q: Regarding operating cash flow, do you expect a stable development for the remainder of the year, or do you foresee any negative swings from the banking business?
A: The cash flow depends on whether we invest more in the short-term or mid-term in the banking business. We expect to invest more in the mid-term in the banking business in the next months, which might influence the cash flow figures. (Reinhard Loose, CFO)
Q: What is your M&A strategy given the high net liquidity figure? Are valuations for industrial brokers still too high?
A: We are still open to M&A and are in discussions. However, valuations in the industrial broker segment are still relatively high, and we are not yet comfortable with the current valuations. (Reinhard Loose, CFO)
Q: Why did the non-life insurance portfolio grow more than the revenue?
A: This is due to a group of customers with relatively high rebates and small margin impact. We are in the process of adjusting these contracts, which explains the different developments in revenue and portfolio size. (Reinhard Loose, CFO)
Q: Can you provide more details on the EUR6 million positive valuation result related to Deutsche Mobion?
A: This is a one-off effect resulting from the restructuring of operations and refinancing of existing contracts, which led to a reduction in interest rates. (Reinhard Loose, CFO)
Q: What are your expectations for Deutsche Mobion's performance in the coming quarters?
A: We expect to reduce losses in the next quarters and see positive results in 2025. However, there is still a risk of goodwill impairment if the real estate sector does not improve. (Reinhard Loose, CFO)
Q: Will the financial home and consultant portal be open to non-MLP customers?
A: No, the financial home is exclusively open for MLP customers, and there are no plans to open it to others. (Reinhard Loose, CFO)
Q: Regarding the positive effect expected from Deutsche Mobion, will it come from increasing top line or decreasing costs?
A: The positive effect is expected to come from improving the top line. (Reinhard Loose, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
