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Leonteq AG / Key word(s): Half Year Results
PRESS RELEASE | Leonteq publishes half-year 2022 results
Zurich, 21 July 2022 | Ad hoc announcement pursuant to Art. 53 LR
Leonteq AG (SIX: LEON) delivers strong growth in revenues and record profitability in the first half of 2022, driven by unprecedented market conditions.
Financial highlights in H1 2022
Focused execution of Growth Strategy 2026
Lukas Ruflin, Chief Executive Officer of Leonteq, stated: “Leonteq generated exceptional growth in revenues and profitability in the first half of 2022. While this strong performance was particularly driven by heightened market volatility, our results also demonstrate the resilience of our business and the benefits of the continued diversification of our revenue streams over the past few years. In line with our Growth Strategy 2026, we remain focused on further expanding Leonteq’s ecosystem for innovative investment solutions and on pursuing our sustainable growth path.”
1) Tax provisions in the amount of CHF 12.3 million reclassified to taxes.
Strong performance in the first half of 2022
The first half of 2022 was marked by unprecedented market conditions with elevated levels of overall market volatility, including exceptional fluctuations in the share prices of selected large-cap companies at around the time of their fourth quarter 2021 and first quarter 2022 earnings announcements. Leonteq continued to focus on disciplined risk management and saw more than a five-fold increase in its net trading result in the first half of 2022.
At the same time, in view of the generally more challenging market environment for investors, Leonteq recorded subdued levels of client activity in most of its regions, reducing net fee income by 32% compared to the same period of 2021. This was also driven by a significant reduction in the number of large ticket transactions. Despite these headwinds, Leonteq’s franchise remained strong, with around the same number of clients entering into transactions in the first half of 2022 as in the prior-year period. Furthermore, turnover generated with Leonteq’s own issued products remained relatively stable at CHF 7.1 billion, while turnover generated with Leonteq’s historic platform partners decreased to CHF 3.5 billion in the first half of 2022 from CHF 6.2 billion in the first half of 2021. This demonstrates investor confidence in Leonteq’s investment grade credit rating as well as its stand-alone position as an established player in the structured products market.
As a result of this combination of factors, total operating income grew to CHF 289.2 million in the first half of 2022, up 41% year on year.
Total operating expenses increased to CHF 143.4 million in the first half of 2022, up 15% year on year, mainly reflecting higher performance-driven variable costs and higher provisions for legal cases. In support of its Growth Strategy 2026, Leonteq also continued to invest in strategic initiatives to further enhance its business and technology platform.
Leonteq reported 81% growth in profit before taxes to CHF 145.8 million in the first half of 2022, up from CHF 80.6 million in the first half of 2021. Income tax expenses of CHF 27.8 million in the first half of 2022 were significantly higher than the figure of CHF 6.2 million reported in the prior-year period, which benefited from tax-loss carry-forwards.
As a result, and in line with the guidance provided on 3 June 2022, Leonteq reported record Group net profit of CHF 118.0 million in the first half of 2022, compared to CHF 74.4 million in the prior-year period. Earnings per share rose by 60% to CHF 6.45, compared to CHF 4.04 in the first half of 2021.
Shareholders’ equity totalled CHF 823.2 million as of 30 June 2022, compared to CHF 802.1 million as of 31 December 2021. Together with deferred fee income of CHF 67.0 million, Leonteq further strengthened its capital base to CHF 890.2 million as of 30 June 2022. Annualised return on equity was 29% for the first half of 2022 (H1 2021: 22%).
Focused execution of Growth Strategy 2026
As communicated when Leonteq announced its full-year 2021 results on 10 February 2022, the current year marks the beginning of a new five-year strategy cycle. In the first half of 2022, Leonteq made progress in executing its Growth Strategy 2026 across all four dimensions:
Through its investments in key initiatives over the past few years, Leonteq has created a solid and diversified foundation for the company to build on. Leonteq’s client franchise remained strong in the first half of 2022 but heightened investor uncertainty is expected to persist in a market environment characterised by higher levels of volatility, increasing inflationary pressures and rising interest rates. Leonteq will continue to maintain a prudent approach to risk management and its trading result is expected to continue partially compensating for subdued client demand in periods of higher market volatility. As a result, Leonteq targets record group net profit for the full-year 2022 (previous record result was CHF 155.7 million in 2021).
Lukas Ruflin, Chief Executive Officer of Leonteq, stated: “While the market environment is likely to remain highly uncertain in the second half of 2022, we are confident that we can continue to achieve profitable growth for our shareholders. We will stay fully focused on our business and on the systematic execution of our strategy as we work towards the targets we have set for 2026.”
A press and analyst conference call with Lukas Ruflin, CEO of Leonteq, and Marco Amato, Deputy CEO and CFO of Leonteq, will be held today, 21 July 2022, at 9.45 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 10-15 minutes before the start of the presentation and ask for ‘Leonteq half-year 2022 results’:
This press release, the half-year 2022 results presentation and the half-year 2022 report are available at: https://www.leonteq.com/halfyearresults
A digital playback of the telephone conference will be available approximately one hour after the event and can be accessed for one month at: https://www.leonteq.com/halfyearresults
9 February 2023 Full-year 2022 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 2022 report 2022 on page 7.
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, through which it serves over 50 markets. Leonteq AG is listed on the SIX Swiss Exchange (SIX: LEON). www.leonteq.com
This press release issued by Leonteq AG (the “Company”) serves for information purposes only and does not constitute research. This press release and all materials, documents and information used therein or distributed in the context of this press release do not constitute or form part of and should not be construed as, an offer (public or private) to sell or a solicitation of offers (public or private) to purchase or subscribe for shares or other securities of the Company or any of its affiliates or subsidiaries in any jurisdiction or an inducement to enter into investment activity in any jurisdiction, and may not be used for such purposes. Copies of this press release may not be made available (directly or indirectly) to any person in relation to whom the making available of the press release is restricted or prohibited by law or sent to countries, or distributed in or from countries, to, in or from which this is restricted or prohibited by law.
This press release may contain specific forward-looking statements, e.g. statements including terms like “believe“, “assume“, “expect“, "target" “forecast“, “project“, “may“, “could“, “might“, “will“ or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the Company or any of its affiliates or subsidiaries and those explicitly or implicitly presumed in these statements. These factors include, but are not limited to: (1) general market, macroeconomic, governmental and regulatory trends, (2) movements in securities markets, exchange rates and interest rates and (3) other risks and uncertainties inherent in our business. In addition, currently, it is very difficult to provide a meaningful prediction on how the governmental actions in response to the ongoing outbreak of a novel coronavirus disease (COVID-19) and other COVID-19 related factors will affect Leonteq's operations and how long such measures will remain in place. The COVID-19 outbreak has caused, and may continue to cause, uncertainty, economic instability and a significant decrease of total economic output in the affected areas and globally. The impact of the COVID-19 outbreak on the general economic environment in the markets in which Leonteq operates remain uncertain and could be significant. Against the background of these uncertainties, you should not rely on forward-looking statements. Neither the Company nor any of its affiliates or subsidiaries or their respective bodies, executives, employees and advisers assume any responsibility to prepare or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this press release or to adapt them to any change in events, conditions or circumstances, except as required by applicable law or regulation.
End of ad hoc announcement