AWD, Europe’s biggest independent financial adviser, maintained its position in core market Germany in 2008 in a turbulent market environment that was impacted by the financial crisis. Despite the trend in the industry, AWD posted revenue of €385.6 million in Germany (+0.2%). And AWD’s business situation was stable in Switzerland: revenue of €69.3 million was close to the prior-year level (-1.6%). Developments in the United Kingdom were particularly affected by the consequences of the international financial and property crisis: revenue in the UK amounted to €64 million (-33%). This was partially due to extensive restructuring actions: as of 12 December 2008, in the context of a strategic refocus, AWD disposed of the AWD Home Finance unit in the United Kingdom. “The current impact of the credit and property crisis, which is particularly acute in the UK, was one of the factors behind this decision,” stated Manfred Behrens, Co-CEO of the AWD Group. In the region Austria and CEE, revenue declined to €114.5 million (-30.8%). This was primarily due to developments in Austria, where the previous years had been affected by the focus on equity-based and property-based products. Revenue in Central and Eastern Europe continued to climb, although the rate of expansion slowed down in the second half of the year for economic reasons. Due to the ongoing distortions and price falls in the equity markets and the very difficult market environment in the challenging year 2008, AWD achieved total revenue of only €633.0 million (-11.8%).
Group-wide extraordinary expenses for marketing and recruiting actions and the one-time restructuring expenditure in the United Kingdom had a negative impact on earnings before interest and taxes (EBIT) in 2008. On the basis of continuing operations, EBIT amounted to €19.7 million, which is significantly less than the prior-year result (€83 million). Net profit of continuing operations for the year fell accordingly: from €55.2 million to €2.1 million. As already reported in November 2008, AWD Holding AG will not distribute a dividend for 2008. At the Annual Press Conference on 26 March 2008, the Board of Management of AWD Holding had pointed out that 2008 would be a year of transition.
“The international financial crisis and the loss of confidence in financial and investment products are currently slowing the growth of the financial sector,” explained Carsten Maschmeyer, founder of the AWD Group. “However, we see this period of transition as an opportunity, and we are positioning AWD for the future with an even stronger focus on long-term insurance and pension products throughout the Group.” The AWD Group generated more than 81% of its revenue in the area of long-term insurance and pension products in 2008.
In total, 429,100 customers benefited from AWD’s financial advice in 2008, demonstrating their trust in the independent advice provided by the Group. With a total of 181,500 new customers advised for the first time, customer acquisition was at a high level compared with the rest of the sector. 247,600 existing customers sought AWD’s advice once again in 2008.
6,009 advisers were active for the AWD Group at the end of 2008, representing a slight decrease of 4.7% compared with the previous year. The decrease was primarily the result of increased fluctuation in the Austria and United Kingdom regions. 67 advisers left the Group with the sale of AWD Home Finance. The Germany region posted a small increase in the number of advisers in the fourth quarter. This resulted from the first successes of the recruitment campaign that was started in April 2008. The Group also acquired 333 advisers through the takeover of Deutsche Proventus AG. Last year alone, more than 700 advisers successfully took the examination set by the Chamber of Industry and Trade with a pass rate of approximately 80%. “Compared with the developments in the market, our investment in recruiting already led to positive results last year,” stated Carsten Maschmeyer.
AWD founder and Co-CEO Carsten Maschmeyer, the biggest single shareholder of Swiss Life with a stake of 8 percent, will be appointed to the Advisory Board of Swiss Life. In this context, he will step down from his current position as Co-CEO of AWD as of 31 March 2009. Carsten Maschmeyer will remain associated with AWD also in his new function and will continue to be available to the company for sales events. Manfred Behrens, to date Co-CEO of AWD together with Carsten Maschmeyer, will be the company’s sole CEO (Chairman of the Board of Management) as of 1 April.
The results of the first quarter of 2009 will be published on 5 May.
The Annual Report 2008 can be downloaded at www.AWD-Gruppe.de
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Key figures 2008 for the AWD Group
Please note: Unless otherwise indicated, all figures and details given here relate to the continuing operations of the AWD Group and exclude the operations of AWD Home Finance, which were discontinued on 12 December 2008. Deutsche Proventus AG was fully acquired on 9 December 2008. Due to the first-time consolidation on 31 December 2008, the figures of Deutsche Proventus are included only in the balance sheet and adviser numbers of the AWD Group.