OVB : Annual Report 2023

Annual Report 2023

Contents

02 |

04	|
08	|
10	|

42 |

48 |

99 |

1. |

1. |

Welcome

Interview

Capital market

Combined management report 2023

Consolidated financial statements 2023

Notes to the consolidated financial statements

Responsibility statement

Independent auditor's report

Report of the

Supervisory Board

02 Welcome

1. Interview with CEO Mario Freis

1. OVB on the capital market

1. Basic information on the Group

1. Business report

1. Report on opportunities and risks

1. Outlook

1. Statement on corporate governance
2. Remuneration report

1. Separate non-financial consolidated management report

1. Information pursuant to sections 289a (1), 315a (1) HGB and explanatory report

1. Statement of the Executive Board pursuant to Section 312 (3) AktG

1. Consolidated statement of financial position

1. Consolidated income statement

1. Consolidated statement of comprehensive income
2. Consolidated statement of cash flows
3. Consolidated statement of changes in equity

48 General information

68 Notes to the consolidated statement of financial position

1. Notes to the consolidated income statement

1. Other information

1. Responsibility statement
2. Independent auditor's report

106 Report of the Supervisory Board

112 Company boards and board memberships

1. Financial Calendar/Contact
2. Imprint

OVB profile

With more than 4.5 million clients, over 5,800 full-time financial advisors and business operations in 16 national markets, OVB is one of the leading financial intermediary groups in Europe.

Key figures for the OVB Group 2023

Key operating figures

Clients (31/12)

Financial advisors (31/12)

Brokerage income

Key financial figures

Earnings before interest and taxes (EBIT)

EBIT margin

Consolidated net income after non-controlling interests

Key figures for OVB shares

Share capital (31/12)

Number of shares (31/12)

Earnings per share (undiluted/diluted)

Dividend per share

1. 2023 proposed dividend

Unit

Number

Number

Euro million

Unit

Euro million

%

Euro million

Unit

Euro million

Shares million

Euro

Euro

	2022		2023
	4.27 m			4.50 m
5,772		5,892

331.9354.3

	2022		2023

22.017.8

6.65.0

14.714.3

	2022		2023
	14.25			14.25
14.25		14.25
1.03		1.00
0.90		0.901)

Change

+5.4 %

+2.1 %

+6.7 %

Change

-19.0 %

-1.6%-pts

-2.4 %

Change

±0.0 %

±0.0 %

-2.4 %

±0.0 %

Key figures for the regions 2023

Central and Eastern Europe

Clients (31/12)

Financial advisors (31/12)

Brokerage income

Earnings before interest and taxes (EBIT)

EBIT margin

Unit

Number

Number

Euro million

Euro million

%

	2022		2023
	2.92 m			3.11 m
3,461		3,695
174.4		198.5
18.8		19.6
10.8		9.9

Change

+6.7 %

+6.8 %

+13.8 %

+4.5 %

-0.9%-pts

Germany

Clients (31/12)

Financial advisors (31/12)

Brokerage income

Earnings before interest and taxes (EBIT)

EBIT margin

Southern and Western Europe

Clients (31/12)

Financial advisors (31/12)

Brokerage income

Earnings before interest and taxes (EBIT)

EBIT margin

Unit

Number

Number

Euro million

Euro million

%

Unit

Number

Number

Euro million

Euro million

%

2022

616,224

1,219

61.2

7.2

11.8

2022

738,712

1,092

96.3

5.2

5.4

2023

613,037

1,120

58.7

4.8

8.2

2023

779,678

1,077

97.2

3.2

3.3

Change
-0.5 %
-8.1 %
-4.1 %
-33.2 %
-3.6%-pts
Change
+5.5 %
-1.4 %
+0.8 %	1
-38.0 %
-2.1%-pts

Percentages and figures may be subject to rounding differences. Percentages are calculated on the basis of EUR thousand.

Welcome

Heinrich Fritzlar, COO	Mario Freis, CEO	Frank Burow, CFO
- Born 1973	- Born 1975	- Born 1972
- More than 20 years of experience­	- More than 25 years of ­experience	- More than 20 years of experience­
in the fields of insurance­ and	in the ­distribution of financial	in finance, accounting­	and
IT consulting	services	controlling
- With OVB since 2022	- With OVB since 1995	- With OVB since 2010

Welcome

Dear shareholders, ladies and gentlemen,

OVB Holding AG continued its growth trajectory in the 2023 financial year with increasing

­momentum in the second half of the year. Brokerage income rose significantly by 6.7 per cent to Euro 354.3 million. Accordingly, the company has achieved an all-time sales record for the fourth time in a row.

The operating income was influenced mainly by inflation-related cost increases and is on target at Euro 17.8 million.

The number of clients increased by 5.4 per cent to 4.5 million in the reporting period, which also marks a new record. The OVB sales team was also expanded further. The number of full-time financial advisors grew from 5,772 to 5,892.

At their meeting on 20 March 2024, the Management Board and Supervisory Board resolved to propose to the Annual General Meeting that a dividend of Euro 0.90 per share be distributed for the 2023 financial year, unchanged from the previous year.

The Executive Board of OVB Holding AG assumes that the overall positive trend in revenue development will continue. In order to take account of the current uncertainties in the macroeconomic development, OVB is forecasting brokerage income for the Group in the range of Euro 360 to Euro 385 million and operating income of between Euro 17 and Euro 20 million for the 2024 financial year.

We would like to thank our financial advisors and employees for their commitment and appreciate the trust that our clients place in us. We would also like to thank you, our shareholders, for accompanying us on our journey into the future. We are well positioned for this path.

Yours,

Mario Freis	Frank Burow	Heinrich Fritzlar
CEO	CFO	COO

2

3

Interview with CEO Mario Freis

Interview with the CEO

Mario Freis has known OVB from the beginning of his career. After obtaining his Abitur in 1995, he completed an apprenticeship as an insurance broker at OVB Germany. He completed a part-time degree programme as a certified insurance specialist (with the International Chamber of Industry and Commerce - IHK). Since 2001, he has held various management positions as Managing Director, member of the Executive Board, and on supervisory bodies, where he has been entrusted with the management and control of the sales subsidiaries, which today total 16. Freis has been a member of the Executive Board of OVB Holding AG since January 2010. Initially responsible for sales and product management at the subsidiaries, in mid- 2014, he assumed overall responsibility for sales, training and product management throughout Europe and was appointed Chief Executive Officer (CEO) in 2016. Mario Freis has made a significant contribution to the successful international expansion of the OVB Group.

Mr Freis, looking back at the 2023 financial year, how would you sum it up?

Mario Freis: 22023 was an eventful and once again challenging year. We find ourselves in politically and economically challenging times, in which private households in particular are feeling the effects of rising costs. After covering the necessary expenses, there is often less money available for insurance and pension provisions. This is when personal advice becomes all the more important. We advise our clients with foresight, for example by highlighting optimisation and savings potential. In this way, we help to create greater flexibility for the necessary risk coverage and private pension provisions. Looking back, we can say that we have once again grown as a group in the face of challenges. For the fourth time in a row, OVB Holding AG achieved a record result in brokerage income. We are delighted with this success, and I would like to take

Interview with CEO Mario Freis

this opportunity to thank our dedicated financial advisors and employees throughout Europe for their commitment over the past financial year.

How would you assess the developments in the German market?

Mario Freis: A significant industry-wide decline in the financing business due to the rise in interest rates was offset by double-digit growth rates at OVB Germany in the product areas of private pension provision, health insur- ance, and property insurance. In addition to inflation-related cost increases, earnings were primarily influenced by investments in digitalisation.

We continue to focus primarily on organic growth. In addition, we are systematically reviewing potential acquisition targets, particularly in the German market. We are focusing on companies that fit our business model or can complement it in a meaningful way. We consider this to be a particularly solid basis for further growth in the German market.

What is the status of implementation of your new "OVB Excellence 2027" strategy?

Mario Freis: After completing the previous strategy 'OVB Evolution 2022', preparations for our new corporate strategy began already in 2022. We have involved all stakeholders in the extensive development process

• e.g. through interviews and surveys - and are therefore seeing a correspondingly high level of identification with the measures and objectives of our new strategy, which was adopted in the past financial year and communicated throughout the Group. The subsidiaries have developed their country strategies based on this umbrella strategy. The design and implementation of the strategic measures are already in full swing. 

According to its own statement, "OVB Excellence 2027" builds on the successful components of the previous strategy period "OVB Evolution 2022". Are there things that you are doing differently this time from the previous strategy?

Mario Freis: We are of course continuing to move forward with the main topics that have carried us successfully and safely through the volatile environment of recent years.

This includes, among other things, consistent digital transformation as part of the focal topic "Operational Excellence".

In terms of differences compared to the previous strategy, "OVB Excellence 2027" will place even heavier emphasis on our clients. The individual country strategies derived from the joint umbrella strategy also carry greater weight. The countries have developed these according to the 'play-to-win' approach, in particular by taking into account the local competitive situation and analysing their own strengths. At the beginning of 2024, the country strategies developed were presented at the international managing directors' conference in order to obtain valuable feedback and identify best practices across countries. Using the 'Team IQ' of the whole management of OVB Europe, the country strategies were further improved and then finalised.

What role does sustainability play in your new corporate strategy?

Mario Freis: The economy as a whole faces the challenge of mastering the transition to a low-emissions and resource-efficient economy. We cannot exempt ourselves from this. We must and want to take responsibility as well. We have therefore defined sustainability as an integral part of our "OVB Excellence 2027" umbrella strategy. Our focal topics ensure that we are constantly developing in the core dimensions of sustainability, i.e. environmental, social and governance issues.

4

5

Interview with CEO Mario Freis

How can a company such as OVB, which is active in the brokerage of financial services, make a concrete ESG contribution?

Mario Freis: Firstly, we offer our clients a socially relevant and valuable service. OVB has a duty to explain the importance and added value of sustainability in pension provisions. We have a great deal of leverage particularly because we are gradually expanding our product range to include sustainable product solutions. Financial inflows and outflows must be reorganised and increasingly channelled into business activities that are compatible with climate strategies and transformation. OVB has therefore integrated the topic of sustainability into its advisory processes, and is reinforcing the relevant expertise of its financial advisors. We want to be economically successful in the long term, while at the same time assuming social and ecological responsibility and making a contribution to sustainable development.

OVB currently offers its services in 16 countries in ­Europe. This brings together very different people with differing experiences from various cultures among clients, employees, and financial advisors. How do you deal with the issue of diversity?

Mario Freis: Our success is based on the diversity of our company, among other things. People from the most diverse nations with the most varied backgrounds and

personalities work for our company. This not only helps us to ensure balanced knowledge and expertise spanning all generations and regions, but also to reach broad sections of the population with our valuable services. We specifically promote international communications in order to learn from each other, which helps us to improve even further. The current proportion of women in sales at the national OVB subsidiaries was 45.9 per cent throughout the Group at the end of 2023 and was increased from the previous year.

This development is an incentive for us to focus even more strongly on the advantages of self-employment, such as flexible working hours, especially for women. Equal opportunities have been deeply rooted in our corporate culture since our company was founded. The percentage of women in the management of our national subsidiaries has risen in recent years. This also applies to the percentage of women at management level throughout Europe. However, we aim to improve even further in this area.

What is the motivation for OVB's long-standing social commitment?

Mario Freis: We have been involved with OVB Hilfswerk for more than 40 years. Looking after others and actively offering them our support in difficult situations is part of who we are. Solidarity with the people of Ukraine, a country in which we have been doing business since 2007, remains firm. Our colleagues in the back office and sales force throughout OVB Europe provide long-term support by donating money and goods. We are involved in myriad ways in addition to this. We support both international emergency aid measures in the event of environmental disasters caused by climate change and smaller neighbourhood aid projects in which our financial advisors and local employees are involved on the ground. In addition, our commitment ranges from jointly organised blood drives to the teaching of financial knowledge in schools and universities.

Regional expansion is one way that your business leverages growth. You most recently established a national subsidiary in Slovenia in 2022. The target markets you have mentioned include Portugal and Luxembourg. How far along are you with your plans there?

Mario Freis: We are currently sounding out the market in Portugal. We are speaking with local experts and potential business partners. We are identifying market opportunities that we still have to make a final assessment on. We