Leonteq (LEON) H2 2023 earnings summary

Executive summary

• Challenging 2023; net profit fell 87% YoY to CHF 20.6m, mainly as net trading result declined from exceptional 2022 levels.

• Client franchise remained resilient, with new partner turnover up 39% to CHF 4.3bn and platform transactions up 15% to 197,118.

• Strategic priorities advanced through offering diversification, expanded international coverage, and continued investment in LYNQS.

Financial highlights

• Total operating income CHF 260.0m, down 43% YoY; net fee income CHF 213.2m, down 4%; net trading result CHF 36.6m, down 85%.

• Profit before taxes CHF 18.4m, down 90%; group net profit CHF 20.6m, down 87%, including taxes of CHF 2.2m.

• Net fee income from pension savings rose 20% to CHF 21.6m, partly offsetting structured products net fee income down 6% reported and 3% FX-adjusted.

• Total operating expenses fell 8% to CHF 241.6m, mainly on lower variable compensation; personnel expenses declined 9% to CHF 138.0m.

Outlook and guidance

• Ambition to grow FY 2024 profits vs FY 2023; market conditions and hedging contributions are expected to remain difficult to predict.

• 2024 priorities include harvesting prior investments to diversify revenue sources and optimizing the cost structure for a rapidly changing market environment.

• Swiss retail flow launch targeted for mid-2024; the “bench” guaranteed 3a savings solution was expected to launch in the near future.