Press release: Leonteq publishes half-year 2024 results

PRESS RELEASE | LEONTEQ PUBLISHES HALF-YEAR 2024 RESULTS

Zurich, 25 July 2024 | Ad hoc announcement pursuant to Art. 53 LR

Driven by solid growth in net fee income, Leonteq AG (SIX: LEON) returned to profitability in the first half of 2024 compared to the second half of 2023 despite continued challenging market conditions. The outlook for 2024 is reaffirmed. After more than six years as CEO, Leonteq founding shareholder Lukas Ruflin has announced his intention to step down from his role once a successor has been appointed. The Board of Directors has decided to propose thereafter his election as a new member of the Board at the next shareholders’ meeting.

Financial highlights in H1 2024 vs H2 2023

• Growth in net fee income of 32% to CHF 117.9 million
• Net trading result continued to normalise to CHF 11.2 million (down from CHF 18.8 million)
• Profitability restored with Group net profit of CHF 15.7 million (up from CHF -8.2 million)
• Strong capital base maintained at CHF 871.4 million (end-2023: CHF 837.9 million)

Very high platform activity demonstrates strong client franchise (vs H2 2023)

• Record number of 23,946 products issued (+30%); 22% of which initiated via LYNQS
• Record number of 146,409 client transactions processed on the platform (+48%)
• Turnover grew by 66% to CHF 15.8 billion
• Revenues from new business initiatives grew by 51% 

Lukas Ruflin to step down as CEO

• Lukas Ruflin intends to step down as CEO once a successor has been appointed and then to stand for election as a member of the Board of Directors; search process to find new CEO initiated

Change to the Executive Committee as per 1 October 2024

• Jasmin Koelbl-Vogt appointed as General Counsel, succeeding Ingrid Silveri

Outlook

• Leonteq reaffirms its clear ambition to grow full-year 2024 profits compared to full-year 2023

Lukas Ruflin, CEO of Leonteq, stated: “While we experienced similar market trends in terms of volatility, interest rate levels and competition as we have since the beginning of 2023, revenues in the first half of 2024 were driven by a higher contribution from new business initiatives and new record levels of client activity on our platform. This emphasises the quality of our earnings and our ability to navigate a challenging environment. We also focused on optimising our cost base in a way that will reduce our run rate going forward while continuing to invest in key initiatives.”
 

Solid performance in the first half of 2024 despite continued challenging market conditions

Leonteq recorded very high platform activity in the first half of 2024. The company issued 23,946 products (up 30% vs H2 2023) and processed 146,409 client transactions (up 48% vs H2 2023) – both historic record levels. Total turnover increased by 66% to CHF 15.8 billion, which was partially driven by exceptional transactions with a high notional of CHF 1.7 billion. However, the competitive market environment and the aforementioned transactions led to a further reduction in net fee margins to 67 basis points (H2 2023: 82 bps).

Net fee income increased by 32% to CHF 117.9 million compared to the second half of 2023 and was down 5% or CHF 6.0 million compared to the first half of 2023. The latter decrease was in part driven by a higher contribution from large ticket transactions totalling CHF 22.1 million (or 18% of the Group’s net fee income) in the first half of 2023 compared to CHF 10.6 million (or 9% of the Group’s net fee income) in the reporting period.

The first half of 2024 was further characterised by continued low levels of market volatility. Against this backdrop, Leonteq recorded a net trading result with limited but positive contributions from both hedging and treasury activities totalling CHF 11.2 million compared to CHF 18.8 million in the second half of 2023 (H1 2023: CHF 17.8 million).

Total operating income was CHF 133.4 million in the first half of 2024, up 18% compared to CHF 112.9 million in the second half of 2023 (H1 2023: CHF 147.1 million).

As communicated with its full-year 2023 results, Leonteq executed a range of measures to optimise and make its cost structure more flexible in order to adapt to changing market conditions. Leonteq applied a stricter approach to new hires and replacements and used natural fluctuation to lower headcount to 573 FTEs at end-June 2024 (vs 591 FTEs at end-2023). Leonteq also recently reviewed and reduced the scope of certain initiatives which is expected to lead to a further decrease in FTEs and contractors. Taking into account these measures as well as the effect of lower variable compensation and one-off cost effects, Leonteq’s total operating expenses are expected to have a run rate basis of approximately CHF 110 million for the first half of 2025 compared to CHF 120.5 million reported for the first half of 2024 (assuming a similar market environment, revenue development and investments in current initiatives).

As a result of the growth in net fee income and the controlled cost base, Leonteq reported profit before taxes of CHF 12.9 million for the first half of 2024. Income taxes were positive at CHF 2.8 million, reflecting an increase in deferred tax assets. Group net profit totalled CHF 15.7 million in the first half of 2024 following a net loss of CHF -8.2 million in the second half of 2023 and a net profit of CHF 28.8 million in the first half of 2023.

Shareholders’ equity totalled CHF 814.4 million as of 30 June 2024, compared to CHF 780.1 million as of end-2023. Leonteq’s capital base, comprising shareholders’ equity as well as deferred fee income of CHF 57.0 million, remained strong at CHF 871.4 million as of 30 June 2024.

Progress on key initiatives

In the first half of 2024, Leonteq focused on harvesting from key investments which are aimed at further diversifying revenue sources.

The company advanced its retail flow business initiative, its single biggest investment in recent years. Following its acquisition of a 10% stake in BX Swiss from Boerse Stuttgart Group in December 2023, Leonteq implemented a phased approach to gradually assume the role of exclusive market maker for equity securities and ETFs on BX Swiss from April 2024. Turnover recorded on the exchange in the second quarter of 2024 has almost doubled compared to the prior-year quarter. As part of its retail flow business initiative, Leonteq also expects to launch leverage products in Switzerland during the second half of 2024.

Leonteq also continued advancing its digital investing platform, LYNQS. The number of products initiated via LYNQS increased by 67% to 5,181 products in the first half of 2024 compared to the second half of 2023 (up 303% vs H1 2023). As a result, its click ‘n’ trade ratio improved to 22% in the first half of 2024 (H1 2023: 7%; H2 2023: 17%). Further, the number of available third-party issuers for LYNQS users was expanded to include four top-rated internationally renowned banking groups. As a result, LYNQS users now have access to structured products from a total of 15 issuers.

Overall, revenues from new business initiatives grew by 51% to CHF 77.2 million and contributed 58% of Group economic revenues (excluding net result of hedging activities) in the first half of 2024 (H2 2023: 55%; H1 2023: 42%). In particular the Group’s fund derivatives business, balance sheet-light business and treasury initiative recorded strong performances with double digit growth rates versus both the first half and the second half of 2023.

Strong market positions in Switzerland and Italy

Net fee income in Leonteq’s Swiss home market totalled CHF 53.0 million in the first half of 2024, an increase of 20% compared to CHF 44.1 million in the second half of 2023 (H1 2023: CHF 48.2 million). Together with its platform partners, Leonteq managed to further expand its market share of SIX listed structured products from 13% in the second half of 2023 to 15%, ranking third among all issuers in Switzerland (H1 2023: 11%). For SIX-listed yield enhancement products, Leonteq significantly strengthened its leading position with a market share of 35% (H1 2023: 27%, H2 2023: 29%). At the Swiss Derivative Awards 2024, Leonteq was recognised as the top service provider for the 14^th consecutive year.

Operations in Europe delivered strong performance and generated 52% growth in net fee income, which rose to CHF 55.9 million from CHF 36.8 million in the second half of 2023. (H1 2023: CHF 62.7 million). In Italy, Leonteq made continued progress in establishing a strong market position, achieving a market share of 17% for listed products on Borsa Italiana’s Cert-X market in the first half of 2024 (H1 2023: 13%, H2 2023: 16%), and was recognised at the Italian Certificate Awards, where it received two product-related accolades.

Net fee income in the Asia region (including the Middle East) increased by 7% to CHF 9.0 million, compared to CHF 8.4 million in the second half of 2023. (H1 2023: CHF 13.0 million).

Lukas Ruflin to transition to the Board following appointment of a new CEO

Lukas Ruflin has decided to step down as CEO once a successor has been appointed. The Board of Directors has decided to thereafter propose his election as a new member of the Board at the next shareholders’ meeting which is expected to be the Annual General Meeting 2025, subject to regulatory approval. The CEO succession is to be determined by means of a search process led by the Chairman of the Board.

Lukas Ruflin was one of the co-founders of Leonteq in 2007 and remains the company’s second largest shareholder. He served as a member of Leonteq’s Board of Directors from 2009 and was Vice-Chairman from 2015 to 2018. In 2018, he agreed to the Board of Directors’ request to take on the CEO role for approximately five years.

Christopher Chambers, Chairman of Leonteq, stated: “Since Leonteq’s foundation Lukas has been instrumental in its strategic development, and we are grateful for his operational leadership and what he has achieved. During his tenure, shareholders’ equity has grown to over CHF 800 million, and supported by new business initiatives, cumulative profits of over CHF 500 million have been generated. Despite recent challenges and disappointing share price performance, Leonteq is very well positioned as the interest outlook improves and markets for structured products are set to recover.” He added: “We welcome that Lukas is willing to continue to support Leonteq as a fellow board member in the future.”

Lukas Ruflin said: “It has been a privilege to lead Leonteq as CEO over the last more than six years, where we transformed Leonteq into a more diversified independent business. From today’s basis, Leonteq has a range of attractive options for its next development stage, which a new CEO will undertake. I am very optimistic for Leonteq and will continue to support the company as a long-term shareholder.”

Jasmin Koelbl-Vogt appointed General Counsel

Jasmin Koelbl-Vogt has been appointed General Counsel and member of the Executive Committee as per 1 October 2024, subject to regulatory approval. She will succeed Ingrid Silveri who will step down from her role by end-September 2024.

Jasmin Koelbl-Vogt (1970) started her career working for Clifford Chance and Linklaters in Germany before joining Citigroup Global Markets Europe (CGME) as General Counsel Germany, Austria and Northern Europe in 2008. Since 2011, she has been a member of the Executive Board of CGME, where she has been responsible for all legal and regulatory topics as well as tax and HR. In 2023, she was CGME’s CEO on an interim basis for five months. A German national, Jasmin Koelbl-Vogt is a member of the German bar and has a PhD in law from the University of Marburg.

Lukas Ruflin stated: “Jasmin Koelbl-Vogt brings comprehensive experience both as a lawyer and as a leader in a prestigious global banking group. This makes her uniquely suited to further develop our Legal & Compliance organisation and to contribute as a member of the Executive Committee to the ongoing execution of our strategy. At the same time, we want to thank Ingrid Silveri for her great commitment and valuable contributions over many years and we wish her all the best in her next career move.”

 Outlook

Thanks to a strong client franchise and an increasingly diversified offering, Leonteq has demonstrated its ability to deliver solid performance and gain market share despite a continued challenging market environment. The structured products market is expected to continue to develop towards a volume-driven business characterised by a higher amount of transactions with smaller average ticket sizes. In this context, Leonteq is actively assessing new strategic initiatives to further increase recurring revenue streams and to increase its activity in addressing self-directed investors (D2C business model).

Leonteq reaffirms its clear ambition to grow profits for the full-year 2024 compared to the full-year 2023.

Leonteq half-year 2024 results press and analyst conference call

A press and analyst conference call with Lukas Ruflin, CEO of Leonteq, and Hans Widler, CFO of Leonteq, will be held today, 25 July 2024, at 10.30 a.m. CEST.

The presentation, including slides, can be followed live via audio webcast.

If you wish to join the phone Q&A session, please dial in using the following numbers and ask for “Leonteq half-year 2024 results”:

• Dial-in number Switzerland: +41 (0)58 310 50 00
• Dial-in number UK: +44 (0) 207 107 06 13
• Dial-in number USA: +1 (1) 631 570 56 13

This press release, the half-year 2024 results presentation and the half-year 2024 report are available at: https://www.leonteq.com/halfyearresults

A digital playback of the telephone conference will be available for one month at: https://www.leonteq.com/halfyearresults

 
Important dates
6 February 2025 Full-year 2024 results
27 February 2025 Sustainability Report 2024
27 March 2025 Annual General Meeting 2025
24 July 2025 Half-year 2025 results

Alternative Performance Measures used in this press release

The definitions of Alternative Performance Measures used in this press release are provided in the half-year 2024 report on page 5.

CONTACT

Media Relations 
+41 58 800 1844
media@leonteq.com

 Investor Relations 
+41 58 800 1855
investorrelations@leonteq.com
 

LEONTEQ

Leonteq is a Swiss fintech company with a leading marketplace for structured investment solutions. Based on proprietary modern technology, the company offers derivative investment products and services and predominantly covers the capital protection, yield enhancement and participation product classes. Leonteq acts as both a direct issuer of its own products and as a partner to other financial institutions. Leonteq further enables life insurance companies and banks to produce capital-efficient, unit-linked pension products with guarantees. The company has offices and subsidiaries in 13 countries across Europe, the Middle East and Asia. Leonteq AG has a BBB credit rating by Fitch Ratings, was assigned with an AA ESG rating by MSCI and is listed on the SIX Swiss Exchange (SIX: LEON). www.leonteq.com

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