Leonteq Ag · SIX:LEON
Leonteq — Investora 2020
27 slides from Leonteq's conference presentation, Sep 24, 2020
Slide 1: Investora 2020 Leonteq AG Presentation
INVESTORA 2020 LEONTEQ AG | PRESENTATION ZURICH, 24 SEPTEMBER 2020
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER This presentation of Leonteq AG (the “Company”) serves for information purposes only and does not constitute research. This presentation and all materials, documents and information used therein or distributed in the context of this presentation do not constitute or form part of and
Slide 3: Our Business
ote “tS CEONTEQ OUR BUSINESS
Slide 4: Independent experts in structured products and long-term savings solutions
INDEPENDENT EXPERTS IN STRUCTURED PRODUCTS AND LONG-TERM SAVINGS SOLUTIONS PEOPLE TWO DISTINCT BUSINESS LINES Around 500 employees from >50 nations 13% Insurance & Wealth Planning Solutions 11 OFFICES 87% In 10 countries across EMEA & APAC Investment Solutions CLIENTS AND PARTNERS INVESTMENT GRADE R
Slide 5: Ongoing business transformation centers around further enhancing scalability
ONGOING BUSINESS TRANSFORMATION CENTERS AROUND FURTHER ENHANCING SCALABILITY Platform Issuance Hedging Distribution Scalability impact • Enabling rapid and low- • Using 3rd party banks to • Reducing own volume of • Servicing banks and cost securitisation through issue products from their hedging exp
Slide 6: Continuous roll-out of LynQs, Leonteq's one-stop-shop for structured products
CONTINUOUS ROLL-OUT OF LYNQS, LEONTEQ’S ONE-STOP-SHOP FOR STRUCTURED PRODUCTS 1,323 Users 34,334 154 products live on LynQs Clients onboarded on mobile app (available since 2 months) 24.09.2020 6
Slide 7: AMC Gateway drives the increase in asset management-like revenues and turnover
AMC GATEWAY DRIVES THE INCREASE IN ASSET MANAGEMENT-LIKE REVENUES AND TURNOVER AMC Gateway • AMC Gateway enables clients to access several thousand underlying assets such as shares, bonds, commodities, FX, funds, listed derivatives and crypto currencies • Clients are able to include structured produ
Slide 8: Content enhancing partnership with world's biggest asset manager
CONTENT ENHANCING PARTNERSHIP WITH WORLD’S BIGGEST ASSET MANAGER Content enhancing partnership • Strategic partnership with Blackrock for the development, distribution and marketing of structured products linked to BlackRock’s Luxembourg mutual fund range and iShares UCITS ETF range • Monthly produc
Slide 9: Increasing footprint in Europe and Middle East as part of regional growth strategy
INCREASING FOOTPRINT IN EUROPE AND MIDDLE EAST AS PART OF LEONTEQ’S REGIONAL GROWTH STRATEGY Switzerland Europe Asia (incl. Middle East) London London Tokyo Tokyo Amsterdam Dubai Zurich Guernsey Paris Frankfurt Hong Kong Geneva Milan Singapore Monaco • Progress with the planned expansion in Europe a
Slide 10: Significant expansion of partner network
SIGNIFICANT EXPANSION OF PARTNER NETWORK Company Details on collaboration About the partner* • Credit rating: A- (S&P) • Leonteq to provide broad range of services along value chain • CET1 ratio: 12.5% • International distribution mandate for Leonteq • Balance sheet: EUR 43.5 billion • White-labelli
Slide 11: Progress on balance sheet light business with SHIP now operational
PROGRESS ON BALANCE SHEET LIGHT BUSINESS WITH “SHIP” NOW OPERATIONAL Smart Hedging Issuance Third-party issuers & Balance sheet light turnover (CHF million) Platform (SHIP) back-to-back hedges • Seven leading investment • In parallel to SHIP, Leonteq banks connected to the built out its offering of
Slide 12: Collaboration with Google Cloud to improve platform scalability
COLLABORATION WITH GOOGLE CLOUD TO IMPROVE PLATFORM SCALABILITY Technology enhancing partnership • Collaboration with Google Cloud to support platform scalability by extending infrastructure to the cloud • Additional flexibility and performance at scale for core grid computation processes • Benefits
Slide 13: Summary: Transformation to leading marketplace for structured investment solutions is ongoing
SUMMARY: TRANSFORMATION TO LEADING MARKETPLACE FOR STRUCTURED INVESTMENT SOLUTIONS IS ONGOING 24.09.2020 13
Slide 14: Our Performance
OUR PERFORMANCE 24.09.2020 14
Slide 15: Robustness of technology platform and solidity of client franchise proven throughout H1 2020
ROBUSTNESS OF LEONTEQ’S TECHNOLOGY PLATFORM AND SOLIDITY OF CLIENT FRANCHISE PROVEN THROUGHOUT H1 2020 Stable platform Engaged employees Client service at all times Significant platform traffic as a result of Full home office capabilities across Excellent feedback from clients & high client activity
Slide 16: Political events around Covid-19 resulted in hedging-related losses of CHF 58 million
POLITICAL EVENTS AROUND COVID-19 RESULTED IN HEDGING-RELATED LOSSES OF CHF 58 MILLION IMPACTING REVENUES AND BOTTOM-LINE Total operating income (CHF million) Net profit (CHF million) 146.3 51.4 136.1 131.6 124.6 103.5 40.1 30.2 32.5 5.5 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H1 2018 H2 2018 H1 2019
Slide 17: Flexible cost management and focus on supporting growth initiatives at lower cost
FLEXIBLE COST MANAGEMENT AND FOCUS ON SUPPORTING GROWTH INITIATIVES AT LOWER COST • Total operating expenses up 5% to CHF 98.7 million driven by investments in hiring and key initiatives in the first half of 2020 • Given strong strategic progress in Q2 2020, Leonteq decided to selectively invest in
Slide 18: Strong build-up of capital and deferred income, totalling CHF 740 million
STRONG BUILD-UP OF CAPITAL AND DEFERRED INCOME, NOW TOGETHER TOTALLING CHF 740 MILLION (+62% SINCE END-2017) • Shareholders' equity totalled CHF 659.0 Shareholders’ equity (CHF million) million at end-June 2020 (9) • Change in regulatory framework on 01 (29) January 2020: Leonteq operates as a 160 s
Slide 19: Summary
ote “tS CEONTEQ SUMMARY
Slide 20: Summary & Outlook
SUMMARY & OUTLOOK • Half-year 2020 results impacted by Covid-19 situation • Robustness of technology platform and solidity of client franchise proven during unprecedented market turmoil Summary • Significant strategic progress achieved; white-labelling partner network expanded with Banque Internatio
Slide 21: Appendix
ote “tS CEONTEQ APPENDIX
Slide 22: Group Results
GROUP RESULTS Record net fee income Change CHFm H1 2020 H2 2019 H1 2019 • Net fee income rose by 76% to a record y-o-y CHF 213.0 million driven by high client Net fee income 213.0 144.0 120.9 76% demand Net trading result (107.1) (10.7) 7.5 NA • Growth in turnover of 3% and exceptional increase in m
Slide 23: Segment Results
SEGMENT RESULTS Investment Solutions H1 2020 H2 2019 H1 2019 Change FY 2019 FY 2018 Change y-o-y y-o-y Total operating income (CHFm) 76.8 98.2 107.3 (28%) 205.5 250.2 (18%) Total operating expenses (CHFm) (82.3) (75.1) (74.4) 11% (149.5) (154.3) (3%) Profit before taxes (CHFm) (5.5) 23.1 32.9 (117%)
Slide 24: Regional Results
REGIONAL RESULTS Fee income breakdown H1 2020 H2 2019 H1 2019 Change FY 2019 FY 2018 Change CHFm y-o-y y-o-y Switzerland 82.0 59.3 52.4 56% 111.7 115.3 (3%) Europe (excl. Switzerland) 113.2 69.8 55.2 105% 125.0 125.3 0% Asia 17.8 14.9 13.3 34% 28.2 31.9 (12%) Total net fee income 213.0 144.0 120.9 7
Slide 25: Revenue Development H1 2020
REVENUE DEVELOPMENT H1 2020 Weekly economic revenues (CHFm)1 30 Long volatility 20 position results in positive hedging contribution 10 0 -10 Dividend First oil price shock cancellations approx. CHF -20m approx. CHF -38m Increased -20 hedging costs -30 Jan Feb Mar Apr May Jun 1 Economic revenues are
Slide 26: High-quality investment portfolio with CHF 2.5 billion at end-June 2020
HIGH-QUALITY INVESTMENT PORTFOLIO (Ø AA RATING) WITH CHF 2.5 BILLION AT END-JUNE 2020 By credit rating By type of investment By accounting measurement 5% 5% 18% 18% 31% 35% 31% 34% 30% 30% 35% 66% 47% 47% 34% 34% Governments & Supranationals Fair value through profit and loss Aaa Aa1-Aa3 A1-A3 Baa1-
Slide 27: Shareholder Structure
SHAREHOLDER STRUCTURE Shareholder structure1 Significant shareholders1,2 Raiffeisen Switzerland3 29.02% Lukas T. Ruflin 8.17% Sandro Dorigo 2.79% 17% 27% Subtotal shareholders’ agreement 39.98% Rainer-Marc Frey 10.03% Credit Suisse Funds AG 5.34% Swisscanto Fondsleitung AG 3.03% 7% Directors and Exe