MLP SE (of NuWays AG): BUY

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Original research: MLP SE – from NuWays AG

15.08.2024 / 09:02 Central European Time/Central European Time

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Classification of NuWays AG to MLP SE

Company name: MLP SE

ISIN code: DE0006569908

Reason for the investigation: Update

Recommendation: BUY

from: 15.08.2024

Target price: EUR 11.50

Last review change:

Analyst: Henry Wendisch

Solid Q2 driven by asset management and banking

Subject: Following the preliminary EBIT results of July 29 (see update of

(July 30) Yesterday, MLP provided more details on its final second quarter results.

This is the news:

* Solid sales figures: total revenue grew 8.5% year-on-year to EUR 230 million (H1: EUR

514m, % yoy), mainly driven by the market tailwind in Wealth

Management (% yoy; 39% of revenue), Interest income (% yoy; 10% of

sales) and real estate brokerage (흯% yoy; 4% of sales), which

offset the decline in non-life insurance (-7% year-on-year; 15% of turnover), while

Old-age provision (% yoy; 22% of turnover) and health insurance (% yoy;

6% of turnover) remained stable.

* Non-life insurance and old age provisions temporarily dampened: Although

demand for company pension plans from MLP’s institutional clients

has temporarily declined due to investment restrictions in SMEs,

management expects a recovery in the coming quarters. The current weakness

in non-life insurance resulted from a discontinuation of the low-margin

contracts that temporarily burden turnover, but ultimately

benefit future profitability.

* EBIT mix driven by banking, brokerage and asset management: EBIT H1

showed a substantial improvement compared to H1’23 (% yoy to EUR 48.7 million). Here,

the main expansion drivers were similar to banking sales (%

yoy), brokerage (�% yoy) and asset management (% yoy). Especially

the net interest income of EUR 28 million (% yoy) in the banking sector, as well as

Performance fees of EUR 9.2 million (�% yoy) in asset management contributed

significantly to profitability and accounted for approximately 76% of H1 EBIT. On the

on the other hand, in RE development (ie Deutschland.Immobilien) H1 EBIT

deteriorated to EUR -9 million (vs. EUR 3 million in H1’23) due to the almost complete cessation of

projects.-

* Real estate recovery coming: although real estate brokerage has already made a strong jump

from low levels (Q2 sales 흯% YoY and 176% QoQ) RE development should

have now reached their lowest point and are following the brokerage in the future. Here

Management expects a steady increase in sales in the coming quarters, which

should lead to a less negative EBIT in H2’24e and even a positive EBIT

in fiscal year ’25.

* Improved KPIs on all fronts: in addition to record turnover and EBIT figures, MLP

recorded record AuMs of EUR 60.5 billion (% yoy), a record for non-life insurance

volume of EUR 729 million (% yoy) and strong net liquidity of EUR 220 million (vs. EUR

191 million per Y/E’23), with the latter explaining 35% of the market capitalization. –

Overall, a solid press release that shows MLP is on track to outperform its peers.

guideline. By simply assuming last year’s H2 EBIT (EUR 37.2 million excl. one-off items)

for H2’24e, FY’24e EBIT would come to EUR 86 million, which is already above the specified

guidance of EUR 80-85 million. Furthermore, we expect EBIT to be EUR 90 million, based on

on (1) still strong net interest income, (2) higher AuMs and (3) less

negative effects of renewable energy sources expected for H2.

In our view, MLP stocks remain very attractive, with an adjusted FCF of 16%.

yield, a dividend yield of 5.6% and just 5.3x EV/EBIT for FY’24e, while also

to be a well diversified and stable quality company. That is why we are

reiterate our BUY recommendation and MLP’s position in our NuWays’ AlphaList

with an unchanged PT of EUR 11.50, based on FCFY’24e and SOTP

You can download the study here: http://www.more-ir.de/d/30493.pdf

For more information, please visit our website: www.nuways-ag.com/research

Contact us for questions:

NuWays AG – Equity Research

Website: www.nuways-ag.com

Email address: [email protected]

LinkedIn: https://www.linkedin.com/company/nuwaysag

Address: Mittelweg 16-17, 20148 Hamburg, Germany

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1968439 15.08.2024 Central European Time/Central European Time

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