Leonteq Ag · SIX:LEON
Leonteq — Investor Presentation (January 2022)
51 slides from Leonteq's investor presentation, January 2022
Slide 1: Investor Presentation Leonteq AG
INVESTOR PRESENTATION LEONTEQ AG ZURICH, JANUARY 2022
Slide 2: Disclaimer
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 shoul
Slide 3: Our Company
ote t LEONTEQ OUR COMPANY
Slide 4: Leonteq at a Glance
LEONTEQ AT A GLANCE Leading fintech company from Switzerland 14 offices across EMEA and APAC State-of-the-art technology platform developed and maintained in-house Services delivered through API, front-end GUI and comprehensive white-label offerings >500 expert staff from >50 nations Headquarters in
Slide 5: Our offering in the context of business needs of clients and partners
OUR OFFERING IN THE CONTEXT OF THE BUSINESS NEEDS OF OUR CLIENTS AND PARTNERS Our clients Our solutions • Financial intermediaries which offer investment products to their clients (from retail clients to Fully automated click ’n’ trade multi-issuer institutional investors) platform • Current portfol
Slide 6: Our Key Differentiating Factors
OUR KEY DIFFERENTIATING FACTORS One of the leading multi- Global distribution network issuer platforms across EMEA, LATAM and APAC Highly scalable platform Best-in-class financial with large computation engineering and power recognised sales force Automated processes Full white-labelling capabilitie
Slide 7: Financial Highlights H1 2021 at a Glance
FINANCIAL HIGHLIGHTS H1 2021 AT A GLANCE Net fee income Net fee income by region Total operating income in CHF million in CHF million 15% 205.8 334.6 35% H1 2020: 103.5 Net profit 272.5 264.9 247.0 209.0 in CHF million 170.0 50% Switzerland Europe Asia 74.4 2016 2017 2018 2019 2020 H1 2021 H1 2020:
Slide 8: Unique Pool of Experts in Technology and Structured Products
UNIQUE POOL OF EXPERTS IN TECHNOLOGY AND STRUCTURED PRODUCTS FROM MORE THAN 50 NATIONS Staff base development Staff base by region Gender diversity in FTEs 19% women 14% 20% 519 510 508 486 Average age 463 440 361 65% 291 36 270 243 204 129 years 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 9: Competitive Position and Structurally Benefitting from Low Interest Rate Environment
COMPETITIVE POSITION AND STRUCTURALLY BENEFITTING FROM THE LOW INTEREST RATE ENVIRONMENT Global wealth (USD trillion)1 Market turnover Switzerland (CHF billion)2 Leonteq market share3 CAGR +12% CAGR +13% 3 9% Market share 2020 for total listed structured products 400 368 361 352 332 317 280 276 256
Slide 10: More Than 40 Industry Awards Since Inception
MORE THAN 40 INDUSTRY AWARDS SINCE INCEPTION Best products 2019 - 2021 Service, Platform & Performance 2019 - 2021 Best product on foreign currencies (2021) Top Service (2019/2020/2021) Best ESG product (2021) Best Market Maker Investment products (2020) Best Index product (2020) Best Product on alt
Slide 11: Our Market
ote t LEONTEQ OUR MARKET
Slide 12: Low Interest Rate Environment and Digitisation Drive Demand
LOW INTEREST RATE ENVIRONMENT AND DIGITISATION DRIVE DEMAND FOR TAILORED INVESTMENT SOLUTIONS Global wealth (USD trillion)1 Global portfolio allocation2 Key drivers for increase in demand for tailored investment solutions: 1. Low interest rate environment CAGR +12% • With increasing wealth, need for
Slide 13: Global Footprint with 14 Offices Supervised by 13 Regulators
GLOBAL FOOTPRINT WITH 14 OFFICES SUPERVISED BY 13 REGULATORS ACROSS EMEA AND APAC AMSTERD FRANKFU ZURIC LOND Net fee income of AM RT H ON CHF 170 million in H1 2021 by region GUERNS EY TOKY 14% O 35% PARI S MONA CO GENEVA 50% DUBAI Switzerland MILA HONG Europe (excl. Switzerland) KONG Asia (incl. Mi
Slide 14: Our Operations in Switzerland: Addressable Market of Close to CHF 400 Billion
OUR OPERATIONS IN SWITZERLAND: STRONG PRESENCE WITH TOTAL ADDRESSABLE MARKET OF CLOSE TO CHF 400 BILLION (TURNOVER) SSPA1 SIX Swiss Exchange2 Leonteq market share2 (CHF billion, by product category) (CHF billion, by product category) CAGR +13% CAGR +8% 368 332 352 47 47 23 3 9% Market share 276 47 1
Slide 15: Our Operations in Italy: Addressable Market of Close to EUR 40 Billion
OUR OPERATIONS IN ITALY: GROWING PRESENCE WITH A TOTAL ADDRESSABLE MARKET OF CLOSE TO EUR 40 BILLION (TURNOVER) ACEPI1 – Primary issuance Borsa Italiana2 – Secondary market Leonteq market share2 (EUR billion) (EUR billion) CAGR +16% CAGR +1% 30 25 27 25 4 9% 22 2020 Market share 13 for listed invest
Slide 16: Our Platform
ote t LEONTEQ OUR PLATFORM
Slide 17: Cutting Edge Technology and Client Focus
CUTTING EDGE TECHNOLOGY AND CLIENT FOCUS Cutting edge Large universe of Flexibility to tailor to Multi-issuer Technology structured products individual needs platform • State of the art • >90 different payoffs • Competitive pricing and • 10 white-labelling technology build from • Thousands of custom
Slide 18: One of the Largest Universes of Structured Products with Leading Technology Platform
PROVIDING ONE OF THE LARGEST UNIVERSES OF STRUCTURED PRODUCTS WITH A LEADING TECHNOLOGY PLATFORM Equity Equities >200,000 client transactions indices processed each year >100,000 documents Credit Currencies generated each day Participation Leverage ~2,500 underlying Interest Commodities rates securi
Slide 19: Largest Crypto-Asset Offering Among Issuers with 25 Currencies
LARGEST CRYPTO-ASSET OFFERING AMONG ISSUERS WITH A TOTAL OF 25 CURRENCIES AVAILABLE Securitised crypto investment Trading cryptocurrencies as simply and easily as trading bonds and stocks Easy & secure access to cryptocurrencies No need for key management (hot wallet or cold storage) Large product u
Slide 20: LynQs: One-Stop-Shop Providing Digital Access to Structured Products
LYNQS: LEONTEQ’S ONE-STOP-SHOP PROVIDING CLIENTS DIGITAL ACCESS TO THE WORLD OF STRUCTURED PRODUCTS Investment ideas Latest trends and daily updated investment ideas prepared by Leonteq’s leading structuring team Quote Click ’n’ trade tailor-made investment products from more than 10 renowned issuer
Slide 21: AMC Gateway: Management of Own Tailor-Made Investment Strategy
AMC GATEWAY: ALLOWS FOR MANAGEMENT OF OWN TAILOR-MADE INVESTMENT STRATEGY Single point of entry Leonteq supports product implementation, trade execution and reporting Less administration Avoid individual trade processing with custodian banks (one central rebalancing for all clients) Cost efficient I
Slide 22: Balance Sheet Light Turnover Increased to CHF 1.5 Billion
BALANCE SHEET LIGHT TURNOVER INCREASED TO CHF 1.5 BILLION 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 provides third-party products platfor
Slide 23: Smart Hedging Issuance Platform (SHIP)
SMART HEDGING ISSUANCE PLATFORM (SHIP): ENABLES AUTOMATED PRICE SELECTION AND EXECUTION OF OPTION COMPONENT Benefits for the client • Only platform which allows to decouple the choice of the desired credit risk from the provider of the option component • Best option price out of seven leading invest
Slide 24: Savings and Retirement Solutions Platform (Omega)
SAVINGS AND RETIREMENT SOLUTIONS PLATFORM (OMEGA): ENABLES DIGITAL PROCESSING OF INSURANCE POLICIES Omega • Proprietary platform that Omega Portal / External guarantee enables the fully partner platform provider automated, digital processing of the entire lifecycle of insurance policies and capitali
Slide 25: Platform Scalability Demonstrated
PLATFORM SCALABILITY DEMONSTRATED: # TRANSACTIONS INCREASED FROM 60K IN H1 2018 TO 140K IN H1 2021 Operational leverage Drivers for improved scalability (Indexed: H1 2018 = 100) 280 +139% Automation of processes across the full value 250 chain 220 190 Full straight-through-processing rate improved t
Slide 26: Our Progress
ote t LEONTEQ OUR PROGRESS
Slide 27: Fundamental Change in Business Dynamics Over Three Years
FUNDAMENTAL CHANGE IN BUSINESS DYNAMICS OVER THREE YEARS end-June 2018 end-June 2021 Environment • Pre-pandemic • Post-pandemic • Margin pressure • Less competition on margins • Trends towards digitisation • Digitalisation trends accelerating • Low interest rate environment • Continuous low interest
Slide 28: Diligent Execution on Strategic Priorities Defined in H1 2018
DILIGENT EXECUTION ON STRATEGIC PRIORITIES DEFINED IN H1 2018 PRIORITIES DEFINED IN H1 2018 UPDATES & ACHIEVEMENTS • More agile and systematic approach to project Increase efficiency, reduce management (product organisation) IT personnel 1 functional overlaps and clarify • Many of Leonteq’s key offe
Slide 29: Significant Progress Achieved Over the Past Three Years
SIGNIFICANT PROGRESS ACHIEVED OVER THE PAST THREE YEARS March 2018 June 2018 September 2019 April 2020 June 2020 July 2020 August 2020 January 2021 April 2021 October 2021 AMC Go-live of new AMC Gateway Won Products SHIP Crypto Tender offer for with BlackRock Fully App currency SHIP investment funds
Slide 30: Improved Revenue Quality and Business Diversification
IMPROVED REVENUE QUALITY AND BUSINESS DIVERSIFICATION Balance sheet light business Leonteq & new issuers New offices (Turnover contribution) (Turnover contribution) (Revenues; CHF million) 22 9% 61% 40% 14 NA H1 2018 H1 2021 H1 2018 H1 2021 H1 2018 H1 2021 Asset management-like business Crypto asset
Slide 31: Our Strategy
ote t LEONTEQ OUR STRATEGY
Slide 32: Journey Towards a Scalable Business Model
LEONTEQ’S JOURNEY TOWARDS A SCALABLE BUSINESS MODEL ACROSS TECHNOLOGY, ISSUANCE, CONTENT, HEDGING AND DISTRIBUTION Scaled distribution Scaled (D2C) distribution (B2B4C) Scaled hedging Scaled content Scaled issuance White-labelled Scaled (B2B) Strengthen Addition of White-labelled digital consumer pl
Slide 33: Our Ecosystem for Investment Solutions
OUR ECOSYSTEM FOR INVESTMENT SOLUTIONS +5 Private Regional Universal Self partners banks banks banks directed investors OMEGA SIGMA sp.leonteq.com Independent asset Institutional managers investors Family offices Digital solutions & Clients & connectivity investors Content, White- product and labell
Slide 34: Leonteq Is Well Positioned for Future Growth
LEONTEQ IS WELL POSITIONED FOR FUTURE GROWTH Expansion of product offering Further build-out of AMCs, systematic indices, quantitative investment strategies and cryptocurrencies Expansion of issuer universe Build-out existing set-ups and add new white-labelling partners Acceleration of digital offer
Slide 35: Our Performance
ote t LEONTEQ OUR PERFORMANCE
Slide 36: Attractive Offering Resulted in Growing Volumes
ATTRACTIVE OFFERING AND HIGH QUALITY SERVICE RESULTED IN GROWING VOLUMES Platform assets (CHF billion)1 Turnover (CHF billion) CAGR CAGR +28% +18% 15 30 15 29 14 27 26 11 12 21 9 19 19 8 16 8 15 10 12 5 7 8 3 3 3 1 4 1 2008200920102011201220132014201520162017201820192020 H1 2008200920102011201220132
Slide 37: Scalability Enables Significant Growth of Products on the Platform
SCALABILITY ENABLES SIGNIFICANT GROWTH OF PRODUCTS MANAGED ON THE PLATFORM Structured products issued (thousand) Outstanding insurance policies (thousand)1 CAGR CAGR +32% +43% 37 52 52 32 47 28 41 27 21 33 21 27 14 24 13 19 10 13 6 8 1 2 1 3 6 2 3 2008200920102011201220132014201520162017201820192020
Slide 38: Historic Revenue Development Since Inception
HISTORIC REVENUE DEVELOPMENT SINCE INCEPTION Quarterly economic revenues since inception (in CHF million)1 160 140 120 100 80 60 40 20 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1 Economic revenues are defined as sales and trading income earned and are considered as reco
Slide 39: Profit Outlook Raised to CHF 140–160 Million for FY 2021
PROFIT OUTLOOK RAISED TO CHF 140 – 160 MILLION FOR FULL-YEAR 2021 Total operating income (CHF million) Net profit (CHF million) Benefits of investment phase Re-establishment materialising of solid track record Negative Covid-19 impact Restructuring years Negative Covid-19 impact 74 206 51 37 40 34 3
Slide 40: Cost Increase from Strategic Investments, Variable Costs and Legal Provisions
London COST INCREASE RESULTING FROM CONTINUED STRATEGIC INVESTMENTS, PERFORMANCE DRIVEN VARIABLE COSTS AND LEGAL PROVISIONS Total operating expenses (CHF million) Nearshoring initiative Lisbon, Portugal 125 • Phase 1 (since H1 2020) successfully completed. A total of 36 109 employees working in a se
Slide 41: Our Liquidity & Capital Management
OUR LIQUIDITY & CAPITAL MANAGEMENT 41
Slide 42: Solid Balance Sheet (as of 30.06.2021)
SOLID BALANCE SHEET DRIVEN BY OWN ISSUANCE, LIQUID HEDGING POSITIONS AND HIGH QUALITY INVESTMENT PORTFOLIO (AS OF 30.06.2021) Assets (CHF billion) Liabilities (CHF billion) • Cash and short-term credits serve to settle securities with partners 12.4 12.4 and brokers and to provide/receive collateral
Slide 43: High-Quality Investment Portfolio with CHF 2.5 Billion
HIGH-QUALITY INVESTMENT PORTFOLIO (Ø AA RATING) WITH CHF 2.5 BILLION AT END-JUNE 2021 By credit rating By type of investment By maturity 7% 5% 18% 23% 8% 22% 27% 35% 36% 10% 37% 18% 34% 47% 23% 50% Governments & Supranationals 0-12 months 12-24 months 24-36 months Aaa Aa1-Aa3 A1-A3 Baa1-Baa3 Governm
Slide 44: Strong Build-Up of Capital Base
STRONG BUILD-UP OF CAPITAL BASE (EQUITY + DEFERRED FEE INCOME) Shareholders’ equity (CHF million)1 Capital base (CHF million)1,2 721 769 800 663 648 723 608 683 416 385 418 449 464 376 418 421 158 185 125 129 2012 2013 2014 2015 2016 2017 2018 2019 2020 H1 2012 2013 2014 2015 2016 2017 2018 2019 202
Slide 45: Leonteq's Capital Position and Dividend Policy
LEONTEQ’S CAPITAL POSITION AND DIVIDEND POLICY AGM 2018 AGM 2019 AGM 2020 AGM 2021 AGM 2022 AGM 2023 onwards Target of CHF 800m area2 Minimum Capital CHF 464m CHF 769m CHF 723m reached CHF 800m CHF 683m base1 (at end-2017) (at end-2018) (at end-2019) (at end-2020) (at-mid 2021) area2 No dividend for
Slide 46: Appendix
ote t LEONTEQ APPENDIX
Slide 47: Group Results
GROUP RESULTS Income statement H1 2021 H2 2020 H1 2020 FY 2020 FY 2019 CHFm Net fee income 170.0 121.6 213.0 334.6 264.9 Net trading result 35.4 8.7 (107.1) (98.4) (3.2) Net interest result (2.4) (1.5) (5.0) (6.5) (8.3) Other ordinary income 2.8 2.2 2.6 4.8 2.8 Total operating income 205.8 131.0 103
Slide 48: Segment Results
SEGMENT RESULTS Investment Solutions H1 2021 H2 2020 H1 2020 FY 2020 FY 2019 Total operating income (CHFm) 194.4 121.0 76.8 197.8 205.5 Total operating expenses (CHFm) (94.3) (77.1) (82.3) (159.4) (149.5) Profit before taxes (CHFm) 100.1 43.9 (5.5) 38.4 56.0 Platform assets (CHFbn) 1 15.4 14.1 13.1
Slide 49: Regional Results
REGIONAL RESULTS Fee income breakdown H1 2021 H2 2020 H1 2020 FY 2020 FY 2019 CHFm Switzerland 60.0 46.5 82.0 128.5 111.7 Europe (excl. Switzerland) 85.8 59.8 113.2 173.0 125.0 Asia (incl. Middle East) 24.2 15.3 17.8 33.1 28.2 Total net fee income 170.0 121.6 213.0 334.6 264.9 Staff breakdown H1 202
Slide 50: Shareholder Structure
SHAREHOLDER STRUCTURE Shareholder structure1 Significant shareholders1,2 Raiffeisen Switzerland3 29.02% Lukas T. Ruflin 8.17% 13% Sandro Dorigo 2.79% Subtotal shareholders’ agreement 39.98% 8% 32% Rainer-Marc Frey 9.98% Credit Suisse Funds AG 4.94% Swisscanto Fondsleitung AG 3.03% 21% Directors and
Slide 51: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS Dominik Ruggli Leonteq AG Head Investor Relations, Investor Relations Communications & Marketing Europaallee 39 | 8004 Zürich | Switzerland +41 58 800 18 55 investorrelations@leonteq.com www.leonteq.com/investors Follow Us Linkedin Twitter Renato Bolliger Facebook Investo