Leonteq AG · SIX:LEON
Leonteq — Baader Investment Conference 2018
32 slides from Leonteq's conference presentation, Sep 25, 2018
Slide 1: Baader Investment Conference 2018 - Leonteq AG Company Presentation
MUNICH, 25 SEPTEMBER 2018 BAADER INVESTMENT CONFERENCE 2018 LEONTEQ AG | COMPANY PRESENTATION
Slide 2: Legal Disclaimer
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 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 other sec
Slide 3: Agenda
AGENDA BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 • OUR BUSINESS • OUR MARKET • STRATEGIC PRIORITIES • FINANCIAL PERFORMANCE • OUTLOOK • APPENDIX 3
Slide 4: Our Business
OUR BUSINESS BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 4
Slide 5: Facts & Figures: Experts in Structured Products and Savings Solutions
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 FACTS & FIGURES EXPERTS IN STRUCTURED PRODUCTS AND SAVINGS SOLUTIONS PEOPLE TWO DISTINCT BUSINESS LINES MORE THAN 450 EMPLOYEES FROM >35 NATIONS 11% • Founded in 2007 INSURANCE & WEALTH • IPO in 2012 PLANNING SOLUTIONS • Market cap of ca CH
Slide 6: Investment Solutions: Offering and Operating Model
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 INVESTMENT SOLUTIONS OFFERING AND OPERATING MODEL • Provide over 1,000 clients in more than 50 countries access to one of the largest universes of structured investment products with more than 2,000 underlyings and 90 payoffs • Multi-issuer
Slide 7: Investment Solutions: Continued Growth in Partner Business
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 INVESTMENT SOLUTIONS CONTINUED GROWTH IN PARTNER BUSINESS Turnover & margins* Net fee income (CHFm) 30 120 250 114 94 84 83 200 75.4 20 80 97.4 64.0 150 26.8 100 54.0 10 20.9 40 18.6 132.6 150.6 15.9 50 115.2 78.6 0 0 0 2015 2016 2017 H1 20
Slide 8: Investment Solutions: Diverse Client Base Benefits from Broad Product Offering
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 INVESTMENT SOLUTIONS DIVERSE CLIENT BASE BENEFITS FROM BROAD PRODUCT OFFERING Economic fee income by product category Economic fee income by client type 3% 12% 4% 1% 14% 69% 33% 64% YIELD ENHANCEMENT PARTICIPATION CAPITAL PROTECTION
Slide 9: Insurance & Wealth Planning Solutions: Offering and Operating Model
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 INSURANCE & WEALTH PLANNING SOLUTIONS OFFERING AND OPERATING MODEL • Offer digital platform to life insurers, enabling unit-linked retail products with financial protection • Provide a viable alternative to traditional guarantee product app
Slide 10: Insurance & Wealth Planning Solutions: Competitive Advantage of Unique Product Design
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 INSURANCE & WEALTH PLANNING SOLUTIONS COMPETITIVE ADVANTAGE OF UNIQUE PRODUCT DESIGN Outstanding policies Net fee income (CHFm) 42,000 24 35,000 20 28,000 16 21,000 12 37,150 21.0 33,388 14,000 8 16.1 26,781 23,632 12.4 13.1 7,000 4 0 0 201
Slide 11: Our Market
OUR MARKET BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 11
Slide 12: Structured Product Market Switzerland
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 STRUCTURED PRODUCT MARKET SWITZERLAND MARKET GROWTH IN 2018 MAINLY DRIVEN BY LEVERAGE PRODUCTS Total market turnover structured products* Total market turnover split by product group (in CHFbn; Bubbles: LTQ market share in %) 8.3 9.2 9.0 9.
Slide 13: Regional Performance: Global Approach with a Local Touch
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 REGIONAL PERFORMANCE GLOBAL APPROACH WITH A LOCAL TOUCH LEONTEQ SECURITIES AG • Zurich Geneva EMEA Amsterdam • Frankfurt Guernsey London • Monaco Paris APAC • Hong Kong • Singapore • Tokyo Net fee income (CHFm) FY 2016 FY 2017 Cha
Slide 14: Strategy
STRATEGY BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 14
Slide 15: Strategic Priorities Create the Basis for Sustainable Growth
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 STRATEGIC PRIORITIES CREATE THE BASIS FOR SUSTAINABLE GROWTH Status Sep 2018 1 • Merge business line Investment Solutions and business line Banking Solutions Reduce complexity • Leaner, more systematic and agile approach to project manageme
Slide 16: Smart Hedging and Issuance Platform (SHIP)
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 SMART HEDGING AND ISSUANCE PLATFORM (SHIP) MAKE BUSINESS MODEL MORE SCALABLE LEONTEQ PLATFORM • SHIP connects issuance partners with hedging partners ISSUERS • Capital intensity without SHIP: each CHF 1 billion platform assets triggers appr
Slide 17: Targets 2020: Commitment to New Financial Targets
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 TARGETS 2020 COMMITMENT TO NEW FINANCIAL TARGETS Operating income (CHFm) Cost/Income Ratio 300 100 • Leonteq maintains its disciplined 75 cost management while growing 200 its topline • Updated financial targets increase ~300 50 91% 89% tra
Slide 18: Financial Performance
FINANCIAL PERFORMANCE BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 18
Slide 19: Financial Results H1 2018: Improved Profitability
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 FINANCIAL RESULTS H1 2018 IMPROVED PROFITABILITY Total operating income (CHFm) Total operating expenses (CHFm) Net profit (CHFm) 200 120 -3% 60 +CHFm +36% 38.9 150 90 45 100 60 30 99.0 93.1 95.7 136.1 40.1 50 100.2 115.2 30 15 21.9 1.2 0 0
Slide 20: Cost Base 2018E: Targeted Investments in Growth
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 COST BASE 2018E TARGETED INVESTMENTS IN GROWTH Cost base development (in CHFm) 190 • New investment plan to increase staff base by approx. 10% (mainly IT specialists) over the next 12 months 3 • Closely monitor business 2 180 development an
Slide 21: Regulatory Capital: Strengthened Capital Position
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 REGULATORY CAPITAL STRENGTHENED CAPITAL POSITION Risk weighted assets (CHFm) Eligible capital (CHFm) Core equity tier 1 ratio (%) 2,400 600 24 1,800 450 18 1,200 300 12 2,381 556.0 22.7 23.3 2,138 19.6 1,700 386.7 419.7 600 150 6 0 0 0 Dec
Slide 22: Summary & Outlook
SUMMARY & OUTLOOK BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 22
Slide 23: Summary & Outlook
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 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 in tec
Slide 24: Appendix
APPENDIX BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 24
Slide 25: Income Statement
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 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) (8.8) (4.
Slide 26: Details on Income Statement Items
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 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 trading res
Slide 27: Revenues H1 2018
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 REVENUES H1 2018 Weekly revenue development (in CHFk) • Stable fee income generation 17,500 (on average CHF 5.6 million per week) 15,000 • Contribution of large ticket trans- actions to fee income increased 12,500 to 7% from 5% • Market env
Slide 28: Balance Sheet
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 BALANCE SHEET CHFm 31.12.2015 31.12.2016 31.12.2017 30.06.2018 Cash and receivables 786.3 603.6 1,022.5 1,719.9 Financial assets 5,707.7 4,841.8 5,204.7 6,658.7 Other assets 93.2 112.8 120.7 133.1 Total assets 6,587.2 5,558.2 6,347.9 8,511.
Slide 29: Staff Base
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 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 179 2
Slide 30: Key Performance Indicators
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 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 11.4 13.2
Slide 31: Shareholder Structure
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 2018 SHAREHOLDER STRUCTURE1 40% Shareholder group Raiffeisen Switzerland2 29.02% Lukas Ruflin family interests3 8.15% Sandro Dorigo 2.45% 21% Institutional investors 1 As per Leonteq share register at 30 June 2018 and 21% significant shareholdin
Slide 32: Key Performance Indicators Definitions
BAADER INVESTMENT CONFERENCE 2018 MUNICH, 25 SEPTEMBER 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 of annu