- analyst change -
2025 should come in solid, but momentum has likely been capped by an unfavourable mix (below-normal performance fees, real-estate restructuring and softer interest income). With these drags fading and comps getting easier, 2026 should be the year where MLP's underlying growth run-rate becomes more visible again. The improving setup is backed by a diversified advice platform and a large recurring revenue base (c.68% of sales), all supporting our BUY recommendation.
Looking at Q4 25, sales are expected to increase 2.4% yoy to € 298m (eCons: € 316m) supported by ongoing strength in wealth management (eNuW: +8% yoy before performance fees) and with P&C insurance premium volumes expected to grow steadily at c. 8% yoy. Notably, the increasing use of AI positions MLP as a pioneer in automated claims handling in P&C, delivering tangible benefits across stakeholders: customers benefit from significantly faster claims processing (end-to-end settlement possible within minutes), MLP consultants from improved service quality backed by centralised capabilities, and MLP itself from a leaner cost base following the termination of an external call centre and lower personnel requirements (previously directed at these tasks).
Despite weakening mix-effects, Q4 25 adj. EBIT looks set to rise 18% yoy to € 33.9m, with the underlying margin seen to expand 1.6pp yoy. The improvement is driven by efficiency gains across personnel (eNuW: -1.3% yoy) and other operating expenses that largely reflect IT and consulting (eNuW: -7.3% yoy), in line with Q3 trends. The adjustment to EBIT reflects an expected € 8m in goodwill impairments, following MLP's decision to abandon new real estate development projects (another € 4m of goodwill are at risk, well highlighted by MLP, in our view).
Into 2026, momentum should improve, led by P&C insurance, where strong current trends and a seasonally important Q1 provide early visibility. In addition, growing deposits at stable ECB rates should support interest income and, separately, performance fees should slowly trend towards their historical avg. of c. € 25m (vs. € 7m in 2025, eNuW). All, while EBIT margins are set to expand as incremental margins remain high (eNuW: c. 28% 2025e to 2026e), underpinning our confidence in the group's mid-term targets (eNuW: adj. EBIT CAGR of 15% 2025-28e).
Lastly, MLP offers an attractive dividend yield of c. 5%, well covered by its cash generation (FCF in 2025e: € 65m, eNuW). This provides downside support as earnings visibility improves into 2026e.
BUY, PT € 12.00 (old: € 12.50), based on Residual Income.
ISIN: DE0006569908
