Slide 1: Leonteq AG Results Presentation FY 2013
LEONTEQ AG RESULTS PRESENTATION FY 2013 Zurich, 27 February 2014
Slide 2: Legal Disclaimer
LEONTEQ AG | RESULTS PRESENTATION FY 2013 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 presenta
Slide 3: Agenda
LEONTEQ AG | RESULTS PRESENTATION FY 2013 AGENDA • Main achievements 2013 at a glance • Financial results 2013 • Market & business update • Priorities, summary & outlook • Appendix 27 February 2014 | 3
Slide 4: Main Achievements 2013 at a Glance
LEONTEQ AG | RESULTS PRESENTATION FY 2013 MAIN ACHIEVEMENTS 2013 LEONTEQ AG | RESULTS PRESENTATION FY 2013 AT A GLANCE 27 February 2014 | 4
Slide 5: Main Achievements 2013 at a Glance
LEONTEQ AG | RESULTS PRESENTATION FY 2013 MAIN ACHIEVEMENTS 2013 AT A GLANCE • Strong financial performance (group net profit up 89% to CHF 38.8 m) driven by …high double-digit growth in operating income (up 24% to CHF 158.4 m) and …further improvement of cost-income ratio (down 10PP to 73%) • Risin
Slide 6: Financial Results 2013
FINANCIAL RESULTS 2013 LEONTEQ AG | RESULTS PRESENTATION FY 2013 27 February 2014 | 6
Slide 7: Key Performance Indicators: Strong Financial Performance in 2013
LEONTEQ AG | RESULTS PRESENTATION FY 2013 KEY PERFORMANCE INDICATORS STRONG FINANCIAL PERFORMANCE IN 2013 General KPIs 2013 2012 Change to 2012 Turnover (CHFbn)1 15.7 12.1 30% Share of turnover of white-labeling products 48% 21% 27PP Average margin on turnover (bps)2 101 106 (5%) Client related KPIs
Slide 8: Group Net Profit: Substantial Increase Fueled by Operational Leverage
LEONTEQ AG | RESULTS PRESENTATION FY 2013 GROUP NET PROFIT SUBSTANTIAL INCREASE FUELED BY OPERATIONAL LEVERAGE Number of clients Turnover (in CHFbn) 2013 2013 658 15.7 Growth: 13% Growth: 30% 580 12.1 2012 2012 0 200 400 600 800 0 5 10 15 20 Operating income (in CHFm) Group net profit (in CHFm) 2013
Slide 9: Income Statement: Growth Proves Scalable Platform & Business Model
LEONTEQ AG | RESULTS PRESENTATION FY 2013 INCOME STATEMENT GROWTH PROVES SCALABLE PLATFORM & BUSINESS MODEL CHFm 2013 2012 Change to 2012 Turnover (CHFbn) 15.7 12.1 30% Net fee income 135.9 120.9 12% • Turnover driven by continued strong client activity and a Net trading income 24.9 7.0 256% positiv
Slide 10: Large Ticket Transactions Reduction Improves Income Diversification
LEONTEQ AG | RESULTS PRESENTATION FY 2013 LARGE TICKET TRANSACTIONS REDUCTION IMPROVES INCOME DIVERSIFICATION Number of large ticket transactions1 Operating income on large ticket transactions (in CHFm) • Significant decrease in 2013 2013 one-off special large ticket transactions – in line with 11 9
Slide 11: Operating Leverage: Costs per Issued Product Continue to Decrease
LEONTEQ AG | RESULTS PRESENTATION FY 2013 OPERATING LEVERAGE COSTS PER ISSUED PRODUCT CONTINUE TO DECREASE Total operating expenses per issued product (CHF)1 Development of costs and number of issued products for the Structured Solutions division • Significant reduction in operating expenses per iss
Slide 12: Operating Expenses Reflecting Operating Efficiency & Cost Containment
LEONTEQ AG | RESULTS PRESENTATION FY 2013 OPERATING EXPENSES REFLECTING OPERATING EFFICIENCY & COST CONTAINMENT Development of operating expenses (in CHFm) • 8% increase in total operating 2013 expenses versus 2012 • Relatively stable other operat- ing expenses despite: 9.0 36.8 69.1 - special charg
Slide 13: Personnel Expenses: Selective Hiring to Strengthen Core Strategy
LEONTEQ AG | RESULTS PRESENTATION FY 2013 PERSONNEL EXPENSES SELECTIVE HIRING TO STRENGTHEN CORE STRATEGY FTE BREAKDOWN1 Personnel expenses evolution (CHFm) Location 2013 2012 Change to 2012 Increased personnel expenses 2013 reflecting selective hiring of 69.1 Switzerland 232 208 24 new employees an
Slide 14: Capex and Depreciation & Amortization
LEONTEQ AG | RESULTS PRESENTATION FY 2013 CAPEX AND DEPRECIATION & AMORTIZATION CONTINUED INVESTMENTS IN THE PLATFORM CHFm 2013 2012 Change to 2012 Capital expenditures (CAPEX) Capital expenditure 2.0 3.7 (46%) remained at high level amount- Depreciation (3.3) (3.0) 10% ing to CHF 12.8 m in 2013 – d
Slide 15: Segment Results: Continuous Growth in Both Business Divisions
LEONTEQ AG | RESULTS PRESENTATION FY 2013 SEGMENT RESULTS CONTINUOUS GROWTH IN BOTH BUSINESS DIVISIONS • EU and Asia main drivers of CHFm STRUCTURED SOLUTIONS ASSET MANAGEMENT CORPORATE CENTER profit growth in Structured & PENSION SOLUTIONS Solutions 2013 2012 Change 2013 2012 Change 2013 2012 Chang
Slide 16: Regional Development – Structured Solutions
LEONTEQ AG | RESULTS PRESENTATION FY 2013 REGIONAL DEVELOPMENT – STRUCTURED SOLUTIONS SIGNIFICANT GROWTH CONTRIBUTION FROM EU & ASIA CHFm CORE REGIONS1 EUROPEAN UNION ASIA • Asia turning profitable reflec- ting strong business perfor- 2013 2012 Change 2013 2012 Change 2013 2012 Change mance in Singa
Slide 17: Capital Structure: Total Capital Ratio Stable at 18.1%
LEONTEQ AG | RESULTS PRESENTATION FY 2013 CAPITAL STRUCTURE TOTAL CAPITAL RATIO STABLE AT 18.1% (vs. 18.0% IN 2012) Capital development CHFm Required capital/Risk-weighted assets CHFm • Reduction of risk-weighted assets vs. H1 2013 (CHF 852.7 m) Tier 1 capital (31 Dec 2012) 118.6 Market risk (incl.
Slide 18: Balance Sheet Development Shaped by Strong Growth in Own Issuances
LEONTEQ AG | RESULTS PRESENTATION FY 2013 BALANCE SHEET DEVELOPMENT SHAPED BY STRONG GROWTH IN OWN ISSUANCES Total assets • Increase in total assets to 31.12.2013 CHF 4.8 bn (vs. CHF 3.2 bn in 2012) and total liabilities to 10.9% 88.1% 1.0% CHF 4.6 bn (vs. CHF 3.0 bn in 2012) in 2013 31.12.2012 • To
Slide 19: Market & Business Update
LEONTEQ AG | RESULTS PRESENTATION FY 2013 MARKET & BUSINESS UPDATE 27 February 2014 | 19
Slide 20: Development of Structured Products Market
LEONTEQ AG | RESULTS PRESENTATION FY 2013 DEVELOPMENT OF STRUCTURED PRODUCTS MARKET RISING SHARE OF EQUITY-LINKED PRODUCTS European AuM (EURbn)* Swiss AuM (EURbn)* Asia Pacific AuM (EURbn)* 2013 2013 2013 • AuM in Europe and Switzer- 696.1 43.4 571.9 land consolidated in 2013 2012 2012 2012 despite
Slide 21: White-Labeling: Significant Contributor to Financial Results
LEONTEQ AG | RESULTS PRESENTATION FY 2013 WHITE-LABELING SIGNIFICANT CONTRIBUTOR TO FINANCIAL RESULTS Total issued products (2013) Leonteq Securities White-labeling 2013 2012 2013 2012 Turnover (CHFbn) 8.2 9.5 7.5 2.6 Operating income (CHFm) 88.4 97.0 70.0 30.8 4´102 6´030 40% 60% Margin (bps) 108 1
Slide 22: Risk Update: Average Value at Risk
LEONTEQ AG | RESULTS PRESENTATION FY 2013 RISK UPDATE AVERAGE VALUE AT RISK AT CHF 1.1 M IN 2013 (vs. CHF 1.2 M IN 2012) VaR BY ASSET CLASS2 VaR (CHFk) Total VaR 2013 (in CHFk)1 2´500 VaR equity 992 VaR fixed income 383 VaR FX 41 2´000 VaR commodity 271 VaR total 1´030 1´500 1´000 500 0 1 99% confid
Slide 23: Priorities, Summary & Outlook
LEONTEQ AG | RESULTS PRESENTATION FY 2013 PRIORITIES, SUMMARY & OUTLOOK 27 February 2014 | 23
Slide 24: Our Priorities
LEONTEQ AG | RESULTS PRESENTATION FY 2013 OUR PRIORITIES • Further expansion of client base in Switzerland and internationally through existing locations Structured Solutions • Expand white-labeling business with new partners in Europe/Asia Asset Management & • Increase volumes / number of policies
Slide 25: Summary & Outlook
LEONTEQ AG | RESULTS PRESENTATION FY 2013 SUMMARY & OUTLOOK • Strong financial results and strategic development in 2013 • Operating leverage continues to unfold – reflected in shrinking cost-income ratio • Positive organic growth in all segments and regions • Optimistic for further business develop
Slide 26: Appendix
LEONTEQ AG | RESULTS PRESENTATION FY 2013 APPENDIX 27 February 2014 | 26
Slide 27: Introduction
LEONTEQ AG | RESULTS PRESENTATION FY 2013 LEONTEQ INTRODUCTION WHO WE ARE • Independent provider of investment solutions with a modern and integrated platform • A leading engineering and infrastructure partner in the area of white-labeling • Comprehensive service offering, covering the entire struct
Slide 28: At a Glance
LEONTEQ AG | RESULTS PRESENTATION FY 2013 LEONTEQ AT A GLANCE WE FOCUS ON • Modern, integrated technology platform and independent product provider CLIENT SERVICE... • Distributor of products in Europe and Asia with manufacturing centralized in Switzerland • Distribution through third-party intermed
Slide 29: Leonteq Is Unique in the Structured Products Market
LEONTEQ AG | RESULTS PRESENTATION FY 2013 LEONTEQ IS UNIQUE IN THE STRUCTURED PRODUCTS MARKET WELL POSITIONED ACROSS THE ENTIRE VALUE CHAIN Offering focus Vanilla products Brokerage model for Client driven structured Proprietary trading (warrants, structured investment investment products driven str
Slide 30: Market and Business Model: Creating Client Value
LEONTEQ AG | RESULTS PRESENTATION FY 2013 MARKET AND BUSINESS MODEL CREATING CLIENT VALUE THROUGH CONTROL OF THE ENGINE “ELECTRONICS” (SERVICE ELEMENTS) • Leonteq Market-making • Leonteq Product Reports • Leonteq Life Cycle Management • Leonteq Termsheets • Leonteq Reporting (Risk & Regulatory) • Le
Slide 31: White-Labeling: Win-Win Solution for All Parties
LEONTEQ AG | RESULTS PRESENTATION FY 2013 WHITE-LABELING WIN-WIN SOLUTION FOR ALL PARTIES In a white-labeling cooperation, structured investment products are created for a partner that issues the structured investment products and interacts directly with the end-customer. White-labeling services com
Slide 32: Pension Solutions: Products for Every Stage of Life
LEONTEQ AG | RESULTS PRESENTATION FY 2013 PENSION SOLUTIONS PRODUCTS FOR EVERY STAGE OF LIFE Leonteq’s Pension Platform covers an extensive range of product types, including products for every life cycle stage, i.e. accumulation, evolution and decumulation products. Leonteq’s product offering suppor
Slide 33: Guiding Principles
LEONTEQ AG | RESULTS PRESENTATION FY 2013 GUIDING PRINCIPLES Y ENC SE RV AR IC SP E N Focused business A TR in attractive Transparency on risk, Service offering product niche return & performance differentiated by characteristics for proactive support of clients Experienced clients and white-labelin
Slide 34: International Presence
LEONTEQ AG | RESULTS PRESENTATION FY 2013 LEONTEQ AG INTERNATIONAL PRESENCE LEONTEQ SECURITIES AG • Zurich Geneva Guernsey LEONTEQ SECURITIES (EUROPE) GMBH •Frankfurt London Paris LEONTEQ SECURITIES (HONG KONG) LTD. • Hong Kong LEONTEQ SECURITIES (MONACO) SAM •Monaco EFG BANK AG, SINGA
Slide 35: Share Overview
LEONTEQ AG | RESULTS PRESENTATION FY 2013 LEONTEQ AG SHARE OVERVIEW Share price development (in CHF)* Market capitalization CHF 787 m (as per 06.02.2014)unitie 130 Outstanding shares 6‘666‘665 registered sharesopport 120 110 Listing SIX Swiss Exchange 100 90 Listing date 19.10.2012 80 70 Ticker symb
Slide 36: Management Team & Board of Directors
LEONTEQ AG | RESULTS PRESENTATION FY 2013 LEONTEQ AG MANAGEMENT TEAM & BOARD OF DIRECTORS EXECUTIVE COMMITTEE* Jan Schoch CEO (Founding partner) Michael Hartweg Deputy CEO, Head White-labeling & Platform Development (Founding partner) Roman Kurmann Chief Financial Officer Manish Patnaik Chief Operat
Slide 37: Awards
LEONTEQ AG | RESULTS PRESENTATION FY 2013 AWARDS HIGH QUALITY OF SERVICES & INNOVATION RECOGNIZED BY MARKET 2013 SWISS DERIVATIVE AWARDS • 1st Category Best Equity Product • Top Service Award • Best Market Making Investment Products • Special Award – Innovator and IPO 2012 SWISS DERIVATIVE AWARDS •
Slide 38: Leonteq Platform in Switzerland
LEONTEQ AG | RESULTS PRESENTATION FY 2013 LEONTEQ PLATFORM IN SWITZERLAND Largest issuers by number of outstanding listed structured investment products (defined as all product types except leverage products) Collateralized structured products on SIX Structured Products Exchange1 (~79% market share)
Slide 39: Milestones
LEONTEQ AG | RESULTS PRESENTATION FY 2013 MILESTONES 2007 Sep EFG Financial Products AG Zurich and EFG Financial Products Holding AG founded Nov EFG Financial Products (Guernsey) Limited founded as an issuer of products Dec 35 employees and FINMA Licenced Zurich Office of EFG Financial Products AG o