Leonteq Ag · SIX:LEON
Leonteq — Credit Suisse EQ Mid Cap Conference 2018
37 slides from Leonteq's conference presentation, Nov 15, 2018
Slide 1: Credit Suisse EQ Mid Cap Conference 2018 - Leonteq AG Presentation
ZURICH, 15 NOVEMBER 2018 CREDIT SUISSE EQ MID CAP CONFERENCE 2018 LEONTEQ AG | PRESENTATION
Slide 2: Legal Disclaimer
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 LEGAL DISCLAIMER Not for release, publication or distribution in the United States of America, Canada, Japan or Australia This document is not an offer to sell or a solicitation of offers to purchase or subscribe for shares or any oth
Slide 3: Agenda
AGENDA CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 • OUR BUSINESS • OUR MARKET • OUR STRATEGY • FINANCIAL PERFORMANCE • CORPORATE GOVERNANCE • SUMMARY & OUTLOOK • APPENDIX 3
Slide 4: Our Business
OUR BUSINESS CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 4
Slide 5: Independent Experts in Structured Products
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 OUR BUSINESS INDEPENDENT EXPERTS IN STRUCTURED PRODUCTS PEOPLE TWO DISTINCT BUSINESS LINES MORE THAN 450 EMPLOYEES FROM 48 NATIONS • Founded in 2007 11% INSURANCE & WEALTH • IPO in 2012 PLANNING SOLUTIONS • Market cap of close to CHF
Slide 6: Business Line 1: Investment Solutions
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 BUSINESS LINE 1 | INVESTMENT SOLUTIONS CONNECTING BUYERS AND SELLERS OF STRUCTURED PRODUCTS Award winning • One of the largest universe services for clients of structured products Issuance Partners • More than 2,000 underlyings Aargau
Slide 7: Large Universe of Payoffs and Asset Classes
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 PRODUCT RANGE LARGE UNIVERSE OF PAYOFFS AND ASSET CLASSES Product categories Asset classes Return Leverage & Hedging Fixed Commodi- Participa- income ties tion Yield Enhance- ment Equities Capital Protected Notes FX Hybrid Risk • Yiel
Slide 8: Structured Products for Every Market Situation
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 STRUCTURED PRODUCTS FOR EVERY MARKET SITUATION BULL VS BEAR MARKET BULL SCENARIO BEAR SCENARIO Bonus Outperformance Certificate Inverse Autocallable Barrier Reverse Convertible Profit Profit Barrier g in ly er nd U Barrier Strike Stri
Slide 9: Business Line 2: Insurance & Wealth Planning Solutions
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 BUSINESS LINE 2 | INSURANCE & WEALTH PLANNING SOLUTIONS OFFERING AND OPERATING MODEL • Enable life insurers to - offer highly attractive long-term savings and drawdown solutions with guarantee and upside Our - in a fully unit-linked w
Slide 10: Insurance Products Already in the Swiss Market
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 INSURANCE PRODUCTS ALREADY 4 PRODUCTS IN THE SWISS MARKET GUARANTEE PLAN DRAWDOWN PLAN • Savings plan for recurring • One-time financed drawdown premiums with upside poten- plan with guaranteed tial and guarantee at maturity payments
Slide 11: Our Market
OUR MARKET CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 11
Slide 12: Structured Product Market Switzerland: Market Leading Position
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 STRUCTURED PRODUCT MARKET SWITZERLAND MARKET LEADING POSITION Total market turnover structured products* Market turnover yield enhancement* (in CHFbn; Bubbles: LTQ market share in %) (in CHFbn; Bubbles: LTQ market share in %) 8.3 9.2
Slide 13: Market Dynamics: Today's Challenges for Market Participants
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 MARKET DYNAMICS TODAY’S CHALLENGES FOR MARKET PARTICIPANTS Challenges for buy-and sell side Number of structured products issuers* 700 Low interest rate 600 environment -53% Increased Customised documentation 500 159 products and requ
Slide 14: Regional Performance: Global Approach with a Local Touch
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 REGIONAL PERFORMANCE GLOBAL APPROACH WITH A LOCAL TOUCH LEONTEQ SECURITIES AG • Zurich Geneva Leonteq serves private banks, commercial banks, EMEA universal banks and associated Amsterdam independent asset managers • Frankfurt loc
Slide 15: Our Strategy
OUR STRATEGY CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 15
Slide 16: Leonteq Business Model: Aggregate Turnover at Marginal Costs
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 LEONTEQ BUSINESS MODEL AGGREGATE TURNOVER AT MARGINAL COSTS Phase 1 • Differentiate Leonteq through enhanced client services Client focus • Propositions centered around transparency on product documentation, service throughout the lif
Slide 17: Strategic Priorities Create the Basis for Sustainable Growth
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 STRATEGIC PRIORITIES CREATE THE BASIS FOR SUSTAINABLE GROWTH Status Nov 2018 1 • Merge business line Investment Solutions and business line Banking Solutions Reduce complexity • Leaner, more systematic and agile approach to project ma
Slide 18: Smart Hedging and Issuance Platform (SHIP)
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 SMART HEDGING AND ISSUANCE PLATFORM (SHIP) FURTHER SCALE THE LEONTEQ PLATFORM LEONTEQ PLATFORM ISSUERS • SHIP connects issuance partners with hedging partners Others • SHIP will transform Leonteq’s position from a balance sheet busine
Slide 19: Financial Targets 2020
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 FINANCIAL TARGETS 2020 COMMITMENT TO CLEAR TARGETS Operating income (CHFm) Cost/Income Ratio (%) 300 100 • Leonteq maintains its disciplined cost management 75 200 while growing its topline • Updated financial targets ~300 50 91% 89%
Slide 20: Financial Performance
FINANCIAL PERFORMANCE CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 20
Slide 21: Business Metrics: Consistent Strong Double Digit Growth Rates
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 BUSINESS METRICS CONSISTENT STRONG DOUBLE DIGIT GROWTH RATES PLATFORM ASSETS (CHFbn) TURNOVER (CHFbn) 15 40 CAGR CAGR 36% 25% 30 10 20 13.2 5 11.4 9.2 26.8 7.6 7.9 10 20.9 18.7 18.6 15.9 5.3 3.3 10.4 11.7 14.5 2.8 3.1 6.9 7.8 0 0.7 1.
Slide 22: Income Statement: Focus on Sustainable, Profitable Growth
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 INCOME STATEMENT FOCUS ON SUSTAINABLE, PROFITABLE GROWTH TOTAL OPERATING INCOME (CHFm) TOTAL OPERATING EXPENSES (CHFm) • Stable fee income generated 300 CAGR 300 CAGR 3% CAGR in different set of market 28% 19% CAGR 11% environment 200
Slide 23: Balance Sheet: Liquid Assets and Liabilities
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 BALANCE SHEET LIQUID ASSETS AND LIABILITIES Assets (CHFbn) Liabilities (CHFbn) • Own structured invest- ment products and partner issued products are hedged either through derivatives or through listed trading Cash & receivables Short
Slide 24: Regulatory Capital
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 REGULATORY CAPITAL BUSINESS VOLUMES DRIVE CAPITAL REQUIREMENTS Eligible capital Core Equity Tier 1 ratio (CHFm) (%) 600 40 500 30 400 300 20 556 200 420 30.2 353 388 387 26.2 23.3 10 22.7 18.0 18.1 19.6 100 119 148 0 10 0 Dec ... Dec
Slide 25: Corporate Governance
CORPORATE GOVERNANCE CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 25
Slide 26: Experienced Board and Management Team
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 EXPERIENCED BOARD AND MANAGEMENT TEAM LONG-TERM COMMITTED Board of Directors (post AGM 20171) Christopher Hans Jörg Vince Thomas Richard Patrick de Paulo • Changed leadership team Chambers Isler Behrens Chandler Meier Laxer Figueiredo
Slide 27: Composition of Board Committees
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 COMPOSITION OF BOARD COMMITTEES INCREASED INDEPENDENCE Board of Directors AGM 2017 AGM 2018 • Increased independence and skills of Board of Members 7 8 Directors Board of Directors 43% 75% 2 • Changed composition of board committees 4
Slide 28: Long Term Committed Board and EC
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 LONG TERM COMMITTED BOARD AND EC PERSONAL INVESTMENTS OF CHF 24.6 MILLION IN 2017/2018 Board of Directors Purchase 40% of Sell Holding (Shs) Purchase 40% of Sell Holding (Shs) Market value 2017 director’s fee 2017 31.12.2017 YTD 2018
Slide 29: Shareholder Structure
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 SHAREHOLDER STRUCTURE1 Shareholder group 40% Raiffeisen Switzerland2 29.02% Lukas Ruflin family interests3 8.15% Sandro Dorigo 2.45% 16% Institutional investors 1 As per Leonteq share register at 7 November 2018 and significant shareh
Slide 30: Summary & Outlook
SUMMARY & OUTLOOK CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 30
Slide 31: Summary & Outlook
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 SUMMARY & OUTLOOK • Turnaround confirmed with solid H1 2018 performance • Four major strategic priorities defined with the aim of enhancing the scalability of Leonteq’s business and facilitating further growth • Continued investments
Slide 32: Appendix
APPENDIX CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 32
Slide 33: Income Statement
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 INCOME STATEMENT CHFm FY 2015 FY 2016 FY 2017 H1 2017 H2 2017 H1 2018 Change y-o-y Net fee income 228.7 209.0 247.0 119.4 127.6 145.7 22% Net trading result (4.1) 5.5 (25.8) (16.4) (9.4) (3.7) (77%) Net interest result (4.9) (7.5) (8.
Slide 34: Details on Income Statement Items
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 DETAILS ON INCOME STATEMENT ITEMS Net trading income (CHFm) FY 2015 FY 2016 FY 2017 H1 2017 H2 2017 H1 2018 Negative treasury carry (21.1) (16.9) (12.6) (7.0) (5.6) (5.0) Hedging contribution 17.0 22.4 (13.2) (9.4) (3.8) 1.3 Net tradi
Slide 35: Staff Base
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 STAFF BASE FTE by region 31.12.2015 31.12.2016 31.12.2017 30.06.2018 Switzerland 343 350 305 309 Europe 63 84 70 71 Asia 57 76 65 65 Total FTEs 463 510 440 445 FTE by function 31.12.2015 31.12.2016 31.12.2017 30.06.2018 Business units
Slide 36: Key Performance Indicators
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 KEY PERFORMANCE INDICATORS1 Group KPIs FY 2015 FY 2016 FY 2017 H1 2017 H2 2017 H1 2018 Cost-income ratio 69% 91% 89% 99% 81% 70% Return on equity 17% 4% 6% 1% 11% 19% Investment Solutions Platform assets (CHFbn)2 7.9 9.2 11.4 10.2 11.
Slide 37: Key Performance Indicators Definitions
CREDIT SUISSE EQ MID CAP CONFERENCE 2018 ZURICH, 15 NOVEMBER 2018 KEY PERFORMANCE INDICATORS DEFINITIONS Platform assets Platform assets are defined as the outstanding volume of products issued and traded through Leonteq’s platform Return on equity Return on equity has been calculated as the ratio o