Management update for Q1 2016

Leonteq AG (SIX: LEON), the independent technology and service provider for investment solutions, today provided a management update for the three months ended 31 March 2016. This is the company’s first such quarterly update, aimed at increasing transparency between its annual and half-year results announcements.

Leonteq had a strong start to 2016, but recorded a slow-down in March due to significantly reduced client activity against the backdrop of a challenging market environment. Leonteq’s platform partner (“Finteq”) business achieved strong double-digit growth in turnover in the first quarter of 2016, a marked improvement on the first quarter of 2015. Meanwhile, turnover from own issuances decreased considerably, in line with Leonteq’s strategy. Total operating income also posted robust double-digit growth during the period, despite a reduced revenue contribution rate from own issuances compared with the first quarter last year. As previously announced, Leonteq is operating on a higher cost base in 2016 due to the strategic investments and hires made last year.

As a result, group net profit was lower in the first quarter of 2016 than in Q1 2015. Leonteq will continue to invest in regional expansion, as well as in its capabilities for onboarding new platform partners and new technologies. The company has increased its staff base by 36 full-time equivalents in strategic areas in the first quarter of 2016. At the same time, it has tightened cost controls and initiated targeted cost reduction measures.

Leonteq has gone live with three new platform partners in the year to date: Structured investment products from J.P. Morgan (distribution in Switzerland, since 4 April 2016), Deutsche Bank (distribution in Switzerland and selected European countries, since 4 February 2016) and Bank of Montreal (distribution in Switzerland and selected other countries, since 4 February 2016) are now available on Leonteq’s platform. The total number of active platform partners has thus increased to seven. Extended product offerings and systems integration are expected to strengthen the contribution to results from these new partners over the next 12-18 months. Discussions and preparations with new envisaged platform partners are progressing. The go-live dates will depend on a range of factors, including the parties’ resources, technical requirements, and the market conditions for the first launch of specific products.

Jan Schoch, Chief Executive Officer: “We had a strong start to 2016 and recorded double-digit growth in our top line in the first quarter. However, expenses outpaced revenues as markets weakened in March. We are confident about the development of our business going forward, although further strategic investments and hires, as well as reduced results contribution from own issuances, may continue to weigh on profits over the course of this year.”

Media and analysts conference call today

A conference call for analysts, media and investors with CEO Jan Schoch and CFO Roman Kurmann will be held on Thursday, 21 April 2016 at 8.30am CET.

Should you wish to participate please use the following dial-in details:

  • Dial-in number for Switzerland: +41 (0)58 310 50 00
  • Dial-in number for the UK: +44 (0)203 059 58 62
  • Dial-in number for the US: +1 (1)631 570 5613

Please call 10-15 minutes before the start of the presentation and ask for “Leonteq Q1 2016 update”.

A digital playback will be available approx. one hour after the conference call. It will be available for 48 hours via the following numbers:

  • Switzerland: +41 (0)91 612 4330
  • UK: +44 (0)207 108 6233
  • USA: +1 (1)631 982 4566

Please enter the access code 14254 followed by #.