May I now hand you over to Andreas Herzog, who will lead you through this conference. Please go ahead, sir.
Well, thank you, operator, and welcome ladies and gentlemen, to the presentation of our Q3 results. I see a lot of participants in this call and thanks for joining. As we have also a lot of interesting topics today, I would like to hand over directly to our CFO, Reinhard Loose, who will guide you through the numbers and the developments. Reinhard.
Andreas, thank you very much. Good afternoon, ladies and gentlemen. We are very satisfied with the performance we've seen in the first nine months of the year. The MLP Group was able to further accelerate the successful course of the last two quarters. We recorded growth in all fields of consulting and were able to increase total revenue to a new record level despite operating in an environment that continues to be characterized by a high degree of competition, the effects of the coronavirus crisis, severe regulatory pressure, low interest rates, as well as a whole host of political uncertainties. The development observed in real estate brokerage and wealth management was particularly pleasing. In terms of EBIT, we are significantly above the previous year's figures after nine months.
Our broad-based growth also shows how we generate added value within the MLP Group for our clients and thereby for the company through diverse perspectives and areas of expertise. MLP is now expecting to significantly surpass the upper end of the previously forecast EBIT corridor of EUR 55 million-EUR 61 million for the year 2021. We are particularly focused on the year 2022, as we still plan to increase our EBIT level to around EUR 75 million-EUR 85 million by the end of that year. You can find an overview on revenue development in slide five of the presentation. Total revenue rose by 20% to EUR 632.2 million in the first nine months, which is a new all-time high.
At EUR 608.8 million commission income, that means revenue from commission and fees increased significantly and represented the biggest share of this positive development. Taking the third quarter on its own, we have achieved record growth in total revenue of 27%. Our growth from January to September came from all consulting fields. This once again underlines the diversity and stability we now have in our revenue base, thanks to the strategic further developments over the last few years. In other words, the MLP Group is in a stronger position than ever before in its 50-year history. Taking a look at the breakdown by consulting field for the first nine months of the year, we can see the strongest growth rate in real estate with an increase of 53% and wealth management with an increase of 35%.
The excellent development in wealth management can be attributed in part to highly successful new business at both FERI and MLP Banking. At MLP Banking, MLP's private client business, we were able to record a net inflow in excess of EUR 1 billion for the first time at the end of September. Furthermore, as already communicated, the performance fees accrued for the performance of investment concepts in wealth management are significantly above the same period in the previous year, and obviously also well above our planning for this year. However, I will come back to this later on during the outlook. As already mentioned, MLP also recorded strong gains in real estate brokerage in the first nine months of the year. In association with Deutschland Immobilien, we enjoyed a significant increase in revenue to EUR 39.7 million a year.
This allowed us to continue and further accelerate the significant growth already recorded after the first six months of the year in this consulting field. The 53% increase in revenue following on from 39% recorded after the first six months once again underlined the importance of real estate for our clients and that more and more consultants are successfully positioning this as part of their full-scope client consulting service. Loans and mortgages also recorded a significant increase in revenue at 17%. The strong performance in the old age provision field was also pleasing. Following the declines encountered throughout 2020 due to the effects of the coronavirus pandemic, we recorded a significant recovery here.
Revenue in the first nine months of 2021 rose by 11% over the same period in the previous year, which is also the result of intensive client support. The increase came from the fields of private and occupational pension provision. In the case of the latter, the situation was particularly challenging in the same period of the previous year, as many employers clearly faced different challenges and had other priorities while the coronavirus pandemic was underway. All the more reason for us to welcome our sustained return to growth in this field in which MLP is operating as the largest German broker. Our important key figures continued to develop positively.
Indeed, as of the 30th of September, we were able to increase the group's asset under management to an all-time high of EUR 52.9 billion. We have benefited from value gains and inflows here, both at FERI and MLP Banking. We were able to further increase the non-life insurance portfolio volumes managed by the MLP Group to EUR 549.3 million as of the 30th of September. As such, we have reached a level comparable to mid-size non-life insurers. F4M, FERI, and the other brands shown on the slide here, each stand for specific areas of expertise at our group companies and in our business segments. However, the key in the MLP Group is the way in which these various perspectives and areas of expertise are networked. Indeed, this approach has already resulted in added value for the group.
Among other things, the fact that every company which has joined the group in the last few years has significantly increased its earnings serves to underline this. We are continuously building on and expanding this synergy. Allow me to give you an example. TPC primarily serves mid-sized enterprises, addressing issues and questions relating to occupational pension provision. We are now in a position to also offer precisely these corporate clients highly competitive insurance cover solutions through our most recent group member, RVM. This obviously also works the other way around for existing RVM corporate clients. The key benefit here is not only that we have the expertise in the group, but are already sitting at a table with the respective corporate clients and can therefore build on good existing relations. Further development of the MLP Group obviously also involves the topic of digitalization.
Over the last few years, we have already provided several reports on our proven approach. In MLP's private client business, we see this as face-to-face consulting complemented by additional digital offers and services. We are now keen to build on and substantially expand this customer-oriented approach, above all through data management. At the same time, we are continuing to expedite the digitization of processes. Please now allow me to move on to the income statement on slide nine of the presentation. At EUR 47.3 million after nine months, MLP recorded a significant increase in EBIT over the previous year's figure. This was driven primarily by the significant increase in EBIT to EUR 21.8 million in the first quarter and to EUR 15.9 million in the third quarter. The next slide shows you our balance sheet.
As of the balance sheet date, shareholders' equity rose slightly from EUR 454 million to EUR 462.1 million. The core capital ratio was 18.2% on the reporting date, meaning that we remain very well-positioned. We are also anticipating a similar level as we move towards the end of the year. As of the 30th of September, the MLP Group served 559,500 family clients. At 14,500, the gross number of newly acquired family clients in the first nine months of the year is well above the previous year. We also served 24,600 corporate and institutional clients. I've already offered a first impression of the additional potential that this holds within our group. 2,051 client consultants were working for MLP as of the 30th of September.
The figure therefore remained constant relative to the comparative values for both the previous year and the previous quarter. Lingering effects of the restrictions associated with the coronavirus pandemic could also still be felt in the third quarter of 2021, in particular in terms of canceled recruitment fairs. However, in our young segment, we already have just under 450 consultants. For the full year 2021, we are anticipating a slight rise in the number of client consultants overall at MLP. Yet, the quality of applicants will remain our focus here. Ladies and gentlemen, I will now move on to our outlook. Following the successful performance in the first nine months, and as already communicated, MLP is expecting EBIT to be significantly above the upper end of the corridor of EUR 55 million-EUR 61 million for the year 2021.
In this vein, we are adjusting our expectations in wealth management revenue and are now anticipating a strong increase for the year as a whole after the strong first nine months. As already addressed when communicating our figures for the first half of the year, I would once again like to point out here today that we benefited greatly from performance fees in both the third and fourth quarter of the previous year. However, the target figure for the current closing quarter of 2021 only comprises a low level of performance fees. We also have amended our forecast for the non-life insurance business and are now only anticipating slight growth for the whole year rather than the significant growth previously expected. In the old-age provisions field of consulting, we are turning to our quality assessment with slight positive development.
Despite the recovery observed in the two previous quarters, our business not only here continues to face market-based risks and especially risks resulting from the effects of the coronavirus pandemic. However, we are still anticipating dynamic development in real estate brokerage as well as loans and mortgages. If you were to ask me why we do not further substantiate our forecast around six weeks before the end of the year, the answer would be that, like every year, the last week of the year will have a particular significant influence on the results for 2021. Among others, this includes whether we will once again collect performance fees and how our private client business is likely to develop in the remaining weeks. Yet irrespective of this, one thing we can already say for sure is that MLP will deliver excellent results in 2021.
More than ever before, the focus of earnings target is on the year 2022. As such, we are not just planning for significant increase in our earnings levels for the end of the coming year, but can already deduce this today on the basis of key early indicators. Once again, we confirm our planning based on which EBIT is likely to rise to around EUR 75 million-EUR 85 million by the end of 2022. The overview on slide 17 once again lists the growth areas that we had already highlighted at the start of the previous year, and for which I already provided a detailed report when presenting our figures for the first half of the year back in August. There's one thing I would like to emphasize here.
We cannot simply expect subsequent years to display the same kind of successful development in terms of performance fees in wealth management as we did this year or last year. In other words, as already explained at the start of the year, our 2022 targets are based on significantly lower performance fees than we are currently seeing. By implication, however, this means that our growth levels remain intact. For example, we are set to break even our young segment. The young consultants already on board here are not only making an initial earnings contribution, their productivity is also set to increase over time. This will produce a powerful leverage for our business.
I would now like to take this opportunity to tell you that we intend to present our new midterm planning as part of our 2022 press and analyst conference. Ladies and gentlemen, please now allow me to move on to the summary. Firstly, we recorded a significant increase in both sales revenue and profit in the first nine months of the year. We will be carrying this momentum forward into the important closing quarter. Secondly, MLP will also record strong earnings in 2021, whereby the remaining weeks of the year will be crucial in terms of the concrete figure. Thirdly, our growth levels are continuing to develop as planned, and we are on track to reach our 2022 targets.
Indeed, once again, we confirm our planning based on which EBIT is likely to rise to around EUR 75 million-EUR 85 million by the end of 2022. Many thanks for your time. I'm now happy to take any questions.
Dear ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial zero and one on the telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it's your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making a selection. One moment, please, for the first question. We have a first question. It's from Olivier Calvet, Kepler Cheuvreux. The line is now open for you.
Yes, good afternoon, Reinhard. I have a few questions. I will take them one by one. The first one is on coalition building, in particular with regards to the old age provision impact. Can you shed some light on what we could expect or what we can't really say at this stage on the impact of the coalition's plans on old age provision for your business?
Okay, Olivier. Thanks. Okay. I'll answer your first question. This might be the difficult or the most difficult question because at the moment, obviously there are no plans. We all know, I think here on the call that, in the last government, there were some ideas, concerning some restrictions. This idea was not or were not set in place. Therefore, definitely we are looking forward to what will come, as a result, of the final plans of the coalition. At the moment, I find it a little bit early to comment.
Definitely we are looking with some concerns but nevertheless, after the first results or the first things we hear from there, with not too many nervousness or anxiety to the final plans. As you know, just for updating again, with final plans which were, let's say, in the air, there were some effects also to our P&L. Very limited ones. Therefore, let's see what the results will be.
Yeah. Okay. Fair enough. Second question, I was just wondering if you could come back to the real estate segment. You show the brokered real estate volume targets. I just wanted to know if you could remind us or let us know how much revenue do you target really in this segment? Maybe breaking it down into brokerage and project development or, you know, say, I guess on the brokerage part, is it fair to assume, let's say a ratio between the brokered real estate sales and the volumes of around 8%-10%?
In the brokerage, let's say the gross margin on average is more around 7%.
The question still on the project development side, could you shed some light on what kind of targets you have there for next year?
As said, in the project development, we are seeing some delays. To also be quite honest, we expected some more income and more positive development in this year. We see delays especially in the approval from the authorities. Positive part is that this project, which let's say we started or initiated, we will see in next year. Therefore, at the moment, we have planned, let's say, an average to have something around 10 projects per year. Due to the delay in this year, we expect to see more projects than this 10 in the following year.
Meaning that the effect is a little bit more positive than you could imagine from this interesting slide we have on page 15, where we see this column, which said growth and revenue, including real estate. This, let's say, a very simplified figure. The effect from real estate might be even higher.
Yeah. Just can you remind us in terms of revenue contribution, maybe, the average, let's say contribution for a project or the average target you have over the full year? Because you talk of 10 projects on average over the year.
We're talking about 10 projects. Each project exists again very roughly and just as a thumb rule. Every project has more or less around 100 units. And a single unit can be around EUR 100,000-EUR 150,000 each. Meaning 10 to-
Yeah.
10-15. That's a thumb rule.
Yeah.
It can be even higher.
Yeah. Fair enough. That's fine. Okay. Then moving on to the 2022 EBIT guidance. I just wanted to come back to this slide and clarify, you know, the effect we might expect from the three, let's say, bridge items that you list and from cost management. Notably because we have, let's say roughly EUR 20 million of EBIT from the performances last year.
Yeah.
Taking that out, of course, the question is how much upside, I guess, there is to the three EBIT bridge items you list. How much, so on the revenue side and on the cost side, how much, let's say, room for cost reduction you have? Any color there to, let's say, offset the EUR 20 million-ish performance fee contribution last year would be helpful.
First let me reiterate this plan that we stick to the target to reach between EUR 75 million-EUR 85 million, knowing how much performance fees we have this year in our books. Meaning that we, from the single topics, we have concrete plans and, not only plans, but concrete measures on our way to come to this target. One of this levels is, as you mentioned, cost reduction. Just bring one example.
We are at the moment in the financial consulting segment, Finanzberatung. In this segment we are in the phase of a bigger change in IT, and this will reduce IT costs by a double digit number million number in next year. Obviously, there will be other costs and other investments next year, but the IT costs will go down significantly next year. On the other side, as we said, on the growth areas, definitely main growth area for next year in our plans and in the projects we have in the pipeline will be, as mentioned before, the real estate area. And also in the other segments at the moment, the outlook for next year is quite positive.
Therefore, both together cost reduction on one side and revenue increase on the other side will lead us to this level I mentioned before.
Okay. Just to clarify, next year is it fair to say that you have about EUR 6 million or so of EBIT from FERI or in the guidance or to at least expect this?
In our plans we lifted a little bit up and we will see in our plans a number which is still single digits but at the upper end.
Okay. Sorry, finally just two housekeeping questions. First of all, on the earnings related to associates, if you could give us a sense of where you expect the associates to develop. Second question, on the AUM, how much of the increase is value gain? How much is net inflow?
On the consultants, you meaning the first question was concerning the number of consultants?
No. Sorry. It's MLP Hyp is what I mean.
Okay. Sorry, can you repeat the question? I'm not quite sure if I got it correctly.
Just wondering if what is your expectation there for, let's say, the earnings from associates there?
Obviously, I think the details for expectations for next year we'll discuss in our press conference in spring. Let's go to our outlook for 2021, where we expect an increase in mortgages and financing, which also will be reflected in the numbers for the MLP, for example, that this will continue to go up, and we are positive there on the outlook until the year end. I think I'm not too optimistic to say that we see a continuation of this trend also next year.
Okay.
And-
The AUM, yeah.
The AUM. That's a question normally of Mr. Hässler , and I hope he allows me to answer you the question.
I can thank him later if you want. Sorry, too many questions.
Philip. No, no. I'm joking. I'm just seeing Philip Hässler also in the line for the questions and I'm answering the question I expect from him. We had inflows, gross inflows in this year of EUR 9 billion and outflows of EUR 1.6 billion.
The performance? Sorry.
The performance is EUR 2.8 billion.
Okay. Thanks a lot.
You're welcome.
The next question is by Philip Hässler of Pareto. The line is now open for you.
Yes, hello. Philip Hässler from Pareto. I have to find another question now that the net inflows question has already been answered. Thank you for that.
You're welcome.
Yeah. Firstly, on the inventory changes you booked in Q3, EUR 10.5 million. Could you perhaps elaborate a little bit on this? What, I mean, is this that you made some progress on the projects, or was it that you have been granted building permits for land? Maybe you could shed some light on this. Secondly, on your outlook for the current year, significantly above the upper end, could you perhaps be a little bit more concrete or particularly in the old age provision business, what have you seen so far in this quarter? Do you think last year's level is achievable? I mean, if we saw a good quarter, you could already reach your 2022 target this year.
Maybe you could elaborate a little bit more on this, although I know you don't like this too much. Last but not least, non-life insurance business was very strong this year, +1 0%. Is this also related to COVID-19 somehow that your customers look for more security, that they are more risk-averse? Is this a trend which may continue, or has there been any special reason for this development? Thank you.
Yeah. Thanks a lot. You're welcome. The inventory changes was, which was your first question. As you thought, it's the changes in the projects of Deutschland Immobilien, and that means this is, let's say, the development of the project level. Meaning, to be more precise there, when we buy some land and for example, start with a project and then the costs we have for the land and for the project itself before it will be sold is the development of the change in inventory.
It is.
Therefore, let's say the worth of the project has increased by EUR 10 million.
I mean, it has been only at 12.3 for the first nine months. So is this due now that there was no lockdown anymore, that you had such a strong Q3, so some catch-up effect or?
What I said is when the development of the changes, when it's not. My example was before it is sold. On the other side, when we start selling this value will decrease. Therefore, let's say it's a mixture of the growth of some project on one side and on the other side, as a reduction, the sell-out of this project. Therefore, there can be a quite successful year or quite successful quarter, and the value there in this line will not change necessarily. Therefore, I think it's a little bit.
Yeah.
This just as a first answer to this question. The next question also is an interesting one: outlook. As we said, let's say overall, I think the first part of your question was to give a little bit more details to what we mean with our outlook and that we expect our results to be above the corridor. That I think was the first part of the question. We said we expect something like significant above our corridor. In our terms, significant is 10% and more to this. Old age provision I think was the question was if we will see the same revenues as the year before.
I think we will see more than the year before in revenues in old age provisions. I hope these were your questions on the outlook. Before I come to the next, does it answer your questions on the outlook?
Yeah, yeah. Thank you. That's good.
Non-life. Yeah, it was quite strong in the first month. Starting from the positive part, why was it that strong? There's one small effect included. We had the acquisition of RVM. And the results for RVM of EUR 5.3 million in the second quarter and in the third quarter are something like a one-off effect. Obviously, these effects increase the comparison to the year before. This is number one. Number two, as every year we see our increase, which is in a normal range between 4%-6%. There were in some areas some positive developments.
On the other side, also mentioning this, at the moment, we see in this area, at least operationally, quite an interesting load of work. Because especially in our DOMCURA segment, where we have many houses insured or we manage the insurance for many houses. You can imagine that, after the tragedy we saw, especially in Ahrtal, that there are many things to do, and we have much more workload and much more damages to manage than a normal year. Which, let's say, hinders a little bit the development and the normal business. Therefore, that was one reason why we reduced, let's say, also our outlook for non-life insurance.
Okay. Thank you very much.
You're welcome.
Our next question is by Jochen Schmitt, Metzler. The line is now open for you.
Thank you. Good afternoon. I have two questions, please. Firstly, could you comment on the start of your financial consulting segment into Q4? Secondly, on the same segment, could you explain the quarter on quarter increase in other operating expenses in Q3? These are my questions. Thank you.
Jochen Schmitt. Yes. First, question, how is the segment Finanzberatung Financial Consulting developing in the beginning of the fourth quarter? We are always a little hesitating with the question on this. Let's say we have seen on the revenue side a quite interesting increase in the first nine months. There is no negative development seen in the first days of the final quarter. This is question number one. The other income quarter by quarter, to be quite honest, I'm hesitating there a little bit if I see the correct result. Because I'm wondering, because overall, the changes there are relatively small.
Other expenses, I think.
Did you say other revenues or other expenses? Sorry.
Other operating expenses.
Other operating expenses. Okay. Good point. The main issue there on other operating expenses is that on the question with Olivier Calvet's topics concerning, let's say, the cost management for 2022, I explained that we are in the course of a quite a huge IT project which will reduce our IT costs next year by a quite significant number. Due to this IT strategy, as we call it, we see higher IT costs this year due to the fact that we are, at the moment, in the phase to operate two systems in parallel.
Okay. Thank you.
You're welcome.