Leonteq publishes full-year 2023 results
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Leonteq AG / Key word(s): Annual Results PRESS RELEASE | LEONTEQ PUBLISHES FULL-YEAR 2023 RESULTS Zurich, 8 February 2024 | Ad hoc announcement pursuant to Art. 53 LR Leonteq AG (SIX: LEON) reports Group net profit of CHF 20.6 million for the full-year 2023 as net fee income was relatively stable supported by a solid client franchise, while net trading result significantly decreased due to materially lower market volatility compared to unprecedented market conditions in the prior-year period. Financials 2023
Resilient client franchise
Outlook
Despite the continued challenging market environment in 2023, Leonteq’s client franchise remained solid with a 15% growth in client transactions and a 32% rise in new issued products albeit with lower average ticket sizes. Net fee income decreased by 4% year on year. Taking into account the significant strengthening of the Swiss franc against major currencies, in particular the US dollar and the euro, net fee income decreased by 2% on a currency-adjusted basis. Reflecting the continued efforts to diversify revenues across issuers, turnover from products issued by new partners increased by 39% to CHF 4.3 billion year on year whilst turnover from products issued by historic partners totalled CHF 6.0 billion compared to CHF 6.4 billion in 2022. Turnover from products issued by Leonteq decreased to CHF 11.0 billion in 2023 from CHF 13.6 billion in the prior year. Total platform turnover reduced by 8% to CHF 21.3 billion in 2023 (down 4% on a currency-adjusted basis). 2023 was characterised by inflationary pressure, increased geopolitical uncertainties and a significant reduction in market volatility, which reached an all-year low in November 2023. Against this backdrop, Leonteq recorded a normalised net trading result with limited but positive contributions from both hedging and treasury activities totalling CHF 36.6 million. This compared to an exceptionally strong net trading result of CHF 236.7 million in 2022, which was driven by unprecedented market conditions. Total operating expenses declined by 8% to CHF 241.6 million in 2023 mainly reflecting a significant reduction in discretionary compensation by more than 50% for the year 2023. Leonteq also continued to further enhance its service and technology platform and made select key hires in the sales and IT organisation. Profit before taxes was CHF 18.4 million in 2023, down from CHF 193.3 million in 2022. Income taxes were positive at CHF 2.2 million in 2023, reflecting prior year tax adjustments. As a result of these factors, and marginally above the upper range of the guidance provided on 1 December 2023, Leonteq reported Group net profit of CHF 20.6 million in 2023, compared to the record result of CHF 156.4 million in the prior year. Shareholders’ equity totalled CHF 780.1 million as of 31 December 2023, compared to CHF 870.0 million as of 31 December 2022. The decrease was mainly driven by a total distribution to shareholders of CHF 90.4 million, including a share buyback programme in the amount of CHF 18.0 million. Leonteq’s capital base, comprising shareholders’ equity as well as deferred fee income of CHF 57.8 million, remained strong at CHF 837.9 million as of end-2023, versus CHF 932.8 million at the end of 2022. The Board of Directors will propose a dividend of CHF 1.00 (2022: CHF 4.00) per share for the financial year 2023 at the Annual General Meeting on 28 March 2024, which is to be paid in equal amounts out of retained earnings and capital contribution reserves. This corresponds to a payout ratio of 87% compared to the announced target of more than 50%. From the financial year 2024 onwards, Leonteq will continue to target a payout ratio of more than 50% of Group net profits including the potential launch of annual share buyback programmes if financial results permit. Christopher Chambers, Chairman of Leonteq, stated: “Leonteq made significant distributions to its shareholders through dividends and share buybacks totalling CHF 90 million for 2022 following two record financial years. For the year 2023, the Board of Directors has opted for a prudent approach to capital management and will propose a dividend of CHF 1.00 per share. Going forward, our refined capital return policy takes into account the inherent earnings volatility of our business whilst continuing to commit to an attractive payout ratio.”
Throughout 2023, Leonteq continued to make progress in executing its Growth Strategy 2026 across all four pillars
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. Going forward, Leonteq aims to start harvesting from these key investments which are aimed at further diversifying revenue sources. At the same time, Leonteq is evaluating a range of measures to optimise and make its cost structure more flexible in order to adapt to rapidly changing market conditions. In terms of profitability, Leonteq has the clear ambition to grow profits for the full-year 2024 compared to the full-year 2023.
The presentation, including slides, can be followed live via audio webcast.
A digital playback of the telephone conference will be available for one month at: https://www.leonteq.com/fullyearresults Investor Relations LEONTEQ www.leonteq.com DISCLAIMER 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. 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 Inside Information |
1832835 08-Feb-2024 CET/CEST
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