LEONTEQ AG EQS-Adhoc: Leonteq AG: Leonteq provides business update against the background of COVID-19

Directive transparence : information réglementée

09/04/2020 07:00

EQS Group-Ad-hoc: Leonteq AG / Key word(s): Change in Forecast
Leonteq AG: Leonteq provides business update against the background of COVID-19

09-Apr-2020 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.


Zurich, 9 April 2020

Leonteq AG (SIX: LEON) today announced that while its results have been impacted by the Covid-19 situation, its client business remains strong and the company is making further progress in executing its strategy.

During the extraordinary events surrounding the Covid-19 situation, Leonteq's top priority has been to safeguard the health and safety of its employees, clients and other stakeholders. It has implemented comprehensive contingency measures early-on and has continued to provide full client service at all times under unprecedented market conditions.

Leonteq's start to the 2020 financial year was strong with high levels of client activity and a positive trading result on the back of increased volatility towards the end of February. In March, the global spread of Covid-19 and the oil price shock resulted in extraordinary high levels of volatility and a turmoil of global capital markets affecting all asset classes underlying structured products. In this environment, Leonteq recorded a significant increase in turnover and fee income, as it continued to provide clients its full service offering including liquid market making services. At the same time, Leonteq faced hedging-related losses as a result of the oil-price shock as well as the wide and unexpected cancellations of already announced dividend payments affecting cashflows from shareholdings owned by Leonteq for hedging purposes. In addition, Leonteq recorded a notable increase in hedging-related costs as market risk exposures changed rapidly in an increasingly illiquid hedging market. As a result, Leonteq currently expects first-half 2020 profits to come in around break-even level.

With its continued strong client business and its solid capital and liquidity position, Leonteq is prepared to navigate any foreseeable market scenario for the remainder of the year. However, given the uncertainties around the duration and the global economic impact of the Covid-19 situation, Leonteq is currently not in a position to provide a financial outlook for the full year and is withdrawing its previously communicated 2020 guidance. Leonteq will publish its half-year results on 23 July 2020.

Lukas Ruflin, Chief Executive Officer of Leonteq, stated: "The Covid-19 situation has created a real stress test for global financial markets, and Leonteq has navigated solidly through this unprecedented turmoil. Given the ongoing uncertainties, we will focus on protecting Leonteq's profitability and exercise strict cost management. At the same time, we continue to see strong client demand, and delivering the service and support our clients expect during this challenging period is our key concern. We remain well positioned, with solid capital and liquidity levels, and continue to drive our business forward."

On a strategic level, Leonteq has made good further progress with its key initiatives in the year to date and continues to drive its business transformation forward, especially the Smart Hedging Issuance Platform (SHIP). Leonteq's new digital marketplace LynQs has also been further developed and new additional features for its lifecycle management module have been integrated to enhance user experience.

Furthermore, Leonteq has recently signed a cooperation agreement with a new white-labelling partner, details of which will be announced in the course of this month.

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Leonteq AG is a Swiss company active in the finance and technology sector with a focus on the structured products segment. 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 to produce capital-efficient, unit-linked pension products with guarantees. The company has offices and subsidiaries in 10 countries, through which it serves over 50 markets. Leonteq is listed on the SIX Swiss Exchange.

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

1019077  09-Apr-2020 CET/CEST