Leonteq AG (LEON) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the press conference call of Leonteq's Full Year 2022 Results. All presentation materials can be found in the Investor Relations section of our website, and we have also provided a comparison of the analyst consensus summary versus our actual reported results. 22 also marks Leonteq's 10th year as a listed company on SIX Swiss Stock Exchange. We took this opportunity to significantly reconstruct our annual report design framework, and are presenting this year our online first reporting suite. It consists of our online report, the complete annual report as a smart PDF download and the brochure for Leonteq's 10-year anniversary. Here with me today are Chief Executive Officer, Lukas Ruflin and Deputy CEO and Chief Financial Officer, Marco Amato. We will start the presentation with an overview of the highlights from '22. Marco then will present the financial performance of the company before then Lukas will go into an update on strategy and an outlook. With that, I hand over to you, Lukas.

Thank you, Dominik. Ladies and gentlemen, dear shareholders, analysts and media representatives. We would like to start this presentation by stating that 2022 was an exceptional year in many ways. We recorded a strong result underlying the resilience of our business model in extraordinary times. And we demonstrated our ability to further improve earnings quality, thanks to our efforts to help diversify our offering. At the same time, we delivered tangible and measurable progress along our 4 strategic pillars and received notable external recognition for our platform and sustainability efforts. This is also why we will continue to invest into our key growth initiatives with a view to further expand our ecosystem for investment solutions. Our record results demonstrated the continued effectiveness of key initiatives that you have made over the past years and that you will hear more about throughout our presentation today, beginning now on Page 4. We achieved a total operating income of CHF 456.4 million, up 9% year-on-year. We reported 11% growth in our profit before taxes to CHF 193.3 million. This is up from CHF 175 million in the prior year. In line with the guidance we provided in December of last year, we reported a group net profit of CHF 156.4 million, in line with the record result from the prior year. In 2022, our earnings per share rose by 1% to CHF 8.58 per share. We will also propose to our shareholders a 33% increase in our dividend to CHF 4 and we expect to launch in addition a share buyback program of up to CHF 18 million, corresponding to a pro forma distribution of CHF 1 per share in early April 2023. The dividend, together with the share buyback, therefore, equals the total distribution to shareholders of CHF 5 and the payout ratio is accordingly 58%, in line with the communicated target of more than 50% of group net profit. At the same time, and in view of the generally more challenging market environment for investors, we recorded subdued levels of client activity in most of our regions. While total group turnover was down by 20% compared to the prior year turnover generated with Leonteq only showed products remains relatively stable at CHF 13.6 billion. Also, our client franchise remains strong as evidenced by roughly the same number of intermediaries entering into transactions with us in 2022 compared to 2021. Our capital base has been further strengthened to CHF 933 million, which is a 7% increase compared to the prior year. Return on equity accordingly was 19% for 2022, down 2 percentage points year-on-year. Looking at our quarterly economic revenue chart on Page 5, you can see that we have been able to continue on a solid trade rate cut of revenue growth since founding the company 15 years ago in 2007. Accordingly, our average quarterly earnings has increased by a compound annual growth rate of 23%. This chart also shows that whilst Leonteq is on a clear growth pace, that pace is not linear and that there are inherent volatility quotes in our business model and hence in our quarterly earnings. And of course, this was also very much true for our 2022 performance. Q1 '22 was a particularly strong quarter on the back of a strong net trading result driven by the elevated and exceptional levels of overall market volatility during that period. Q4 '22 was a rather weak quarter where fee income continued to be subdued. However, stable on a month-to-month basis, whilst trading income did not provide additional contributions we have seen in the prior quarters. Marco will now continue the presentation and go into more details about the drivers of our financial results.

Thank you, Lukas. And good morning, and warm welcome to all participants from my side. I would like to begin with highlighting 3 from my point of view, important points. First of all, we have delivered again record results in a challenging market environment and the results underscore the resilience of our business model. We made tangible progress in delivering our strategic initiatives and will also further increase the investments in key growth initiatives in 2023. Last but not least, we proposed to increase in line with our capital return policy, the dividend to CHF 4 and will on top launch a share buyback program of up to CHF 18 million. With that in mind, let's move into Leonteq's financial performance for 2022, this begins on Page 7. Looking at our financial results, we reported a 9% growth in our total operating income to CHF 456.4 million, primarily reflecting the strong performance in our net trading result. Total operating expenses rose to CHF 263.1 million compared to CHF 243.3 million in 2021. This was mainly due to an increase in planned investments into our strategic initiatives. Demonstrating our operating leverage, profit before taxes increased by 11% to CHF 193.3 million in 2022. And lastly, in line with the guidance that we provided at the end of December 2022, you can see on the right-hand side chart that our group net profit reached CHF 156 million, which is in line with the record results of the prior year. I will provide an in-depth look at both our top line and cost line development in the next slides. But let me spend now a few words on our tax rate. Leonteq's income taxes are driven by the amount of profits taxed either in Switzerland at statutory rate of 19.7%, all by the group's foreign operations, which are taxed at varying rates depending on the jurisdiction. In 2021, a significant portion of profits were subject to income taxes in jurisdictions where Leonteq was able to offset these profits with accumulated tax lag loss carryforwards. As disclosed in our annual report, 2021, at the end of 2021, we did not have any unrecognized tax loss carryforward anymore. In 2022, a significant portion of our profits, which are recorded in jurisdictions where we earn our trading income are taxed at the local tax rate that is above the Swiss statutory tax rate of 19.7%. As a result of these factors, our tax line increased to CHF 37 million from CHF 7 million and our tax rate increased from 11% to 90% year-on-year. Let's now discuss our top line on Page 8. Our top line primarily comprises 2 components, net fee income and net trading results. Looking at our fee income development, we recorded subdued levels of client activity on the back of a challenging market environment. Despite these headwinds, Leonteq's franchise remained strong as evidenced by the stable fee income on a monthly basis. We saw subdued levels of client activity, but we recorded different patterns across our offering. Our new business initiatives were, in fact, less impacted by the reduced client flow compared to our traditional structure product business. This positive development is particularly thanks to our efforts to diversify our offering and investing in initiatives such as the asset management like business, the pension savings as well as the balance sheet life business. From an issue perspective, we saw an above-average demand for Leonteq product compared to our historic partner product. Leonteq products only reduced by 7% in turnover where we saw a turnover reduction in historic partners by 38%. This reduced dependency as well as the positive development with our new business initiatives that we have achieved over the past years, underpinned the improved earnings quality. Now looking at our trading income. As we have reported to you in the past, our fee and trading income are codependent of each other, but are typically negatively correlated. So in positive equity markets with lower market volatility, we tend to see strong fee income and rather flat to slightly positive trading results. In more volatile markets, clients tend to be less active whilst we benefit on the hedging side, thus providing sort of a natural hedge to our fee business. Now concretely for last year, we continue to focus on disciplined risk management and recorded a very strong net trading result of CHF 264 million. This was mainly driven by exceptional levels of market volatility, in particular in Q1 and Q3 of 2022. In this environment, we also benefited from exceptional fluctuations in share prices of selected large craft companies. So our record results also underscore the resilience of our business model in extraordinary times. Let's now move on to our cost development. On Page 9, you see that we reported total operating expenses of CHF 263 million in 2022 compared to CHF 198 million in 2020. You may notice that we are comparing the increase from 2 years ago. We are doing this because we want to give you the full picture that has developed over this time. First, Leonteq continued to significantly invest in growth initiatives in '21 and '22. Compared to 2020, we spent an additional amount of CHF 21 million for strategic initiatives. On the back of these initiatives, we also saw operating costs to increase by CHF 5 million in the last 2 years. On the other hand, we also saw a benefit from our near-shoring initiatives in the amount of CHF 4 million in '21 and an additional amount of CHF 5 million in '22. This was also a reason why despite the significant growth in our head count to almost 600 employees, our fixed compensation expenses remained relatively stable year-on-year. So taking all these factors together, our cost base before additional variable costs and provisions increased to CHF 250 million in 2022. You can see in the lower half of the slide, our cost base has increased further due to the additional performance-driven variable costs, primarily in '21 and less so in 22 and the provisions for legal cases and one-off expenses grew mainly in 2021. Now looking ahead to 2023, we expect our cost base before additional variable costs and provisions to further increase due to 3 key factors. First, we will increase our annual spend in key growth initiatives by 50%, so approximately CHF 11 million to CHF 32 million a year. Second, we anticipate certain impact of overall cost inflation. And third, we will recognize in 2023 part of the deferred driver compensation committed in prior years. So my key message here is we continue to tightly manage our cost base but make targeted investments in our key growth initiatives, which we are executing in a diligent manner. Let's now continue on to Page 10 to look at our solid balance sheet. Our balance sheet is driven by 2 factors. First, we issued Leonteq own structured products, which are recognized on the liability side. To hedge these liabilities, we invest approximately 40% of the proceeds from own issuance into high-quality investment portfolio and the other 60% into hedging positions such as equity securities or indices or derivatives. Likewise, as a result of the issuance partner business, we mostly hedged for our partners, their structured product exposure by purchasing into either the underlying securities of the product or options. We reported a decrease of 14% in total assets from CHF 14.4 billion in 21 to CHF 12.4 billion in 2022. This was mainly driven by a decrease in trading financial assets by CHF 2 billion, which reflects our hedge portfolio and which was impacted by the lower client flow. In addition, the delta exposure has reduced due to the market recovery in the second half of 2022. Our high-quality investment portfolio amounted to CHF 2.8 billion at the end of 2022, and we have a strong liquidity position with more than CHF 1.5 billion in excess liquidity and a strong shareholders' equity amounting to approximately CHF 900 million. Now moving to Page 11, our strong capital position. We defined a capital base as the aggregate amount of shareholders' equity and deferred income. Shareholders' equity increased by 8% to CHF 870 million as of the 31st of December 2022 compared to CHF 802.1 million at the end of 2021. This was driven by the strong increase in retained earnings of CHF 156.4 million, partially offset by the distribution of CHF 55 million to shareholders. In addition, we recorded a net impact of minus CHF 19 million to our OCI mainly driven by the net unrealized losses on debt instruments measured at fair value to other comprehensive income, which were recognized on the back of widening credit spreads. And we recognized an additional minus CHF 15 million for employee-related share plans. Together with deferred fee income of EUR 63 million, Leonteq capital base was further strengthened to CHF 932.8 million as of the end of last year. Now moving to the last page of my section. We show on Page 12, our attractive returns for shareholders as well as new capital return policy. The Board of Directors will propose a dividend of CHF 44 for the financial year 2022 at the Annual General Meeting at the end of March 2023. This is a 33% increase from CHF 3 per share for 2021. This distribution will be paid in equal amounts out of retained earnings and capital contribution reserves. Additionally, Leonteq's Board of Directors has also approved the launch of a share buyback program to up to CHF 80 million, which is equivalent to a pro forma distribution of CHF 1 per share. The program is expected to be launched in early April of this year and to 1 until the end of December 2023. The execution of the program is subject to market conditions and regulatory approvals and the shares are planned to be bought via second trading line on the Swiss Exchange. Shares that will be repurchased on the program are expected to be canceled under the new Swiss Capital Bank regime to be approved at the Annual General Meeting of 2023. So the dividend of CHF 4, together with the share buyback, this corresponds to a total capital return of CHF 5 per share for the financial year 2022. This combined is a payout ratio of 58% of group net profit, which is in line with our previously announced target of more than 50%. Today, we also provide you transparency about our refined capital return policy. Leonteq business has developed and performed strongly in recent years. Our refined policy takes these developments into account, and we want our shareholders to participate in our success. From the financial year 2023 onward, Leonteq will continue to target a payout ratio of more than 50% of the group's net profit. We have the ambition to pay annual dividend of at least CHF 2 per share and the intention to launch annual share buyback programs if financial results permit. Our strong capitalization further gives us the strategic flexibility to execute a larger direct share buyback if a sizable block of shares becomes available. The Board of Directors and the management team are convinced that this accretive approach will offer attractive returns for our shareholders over the years to come. Before I hand over to Lukas, I also want to briefly touch on today's announcement regarding my own role. As you have read, I will step down as CFO of Leonteq in due course to pursue new opportunities. When I started at Leonteq more than 6 years ago, we had a capital base of approximately CHF 400 million, and we're undergoing a significant restructuring exercise. Since then, we have massively transformed the business, strengthened our capital base to more than CHF 900 million, obtained investment-grade credit ratings and we recently received considerable ESG rating upgrades. We have also now delivered record results in 2 consecutive years and a leading company with a well-defined strategic plan as well as a setup on the ESG side that the company can build on. So it's a good time for me to move on, and I have agreed with the company that I will step down by the end of August. I'm grateful to the Board of Directors for the trust they placed in me. I had the privilege to work alongside Lukas and the other colleagues at the Executive Committee and reshaped Leonteq over the past 6 years. I'm also thankful for a fantastic CFO management team and the entire CFO division staff, who significantly contributed to the company's development during my tenure. With that, I hand back over to you, Lukas.

Thank you, Marco. In addition to our solid overall financial strike, [indiscernible] strong capital base 2022 was the first year of our 5-year strategic cycle. Let's take a look at our continued execution of this on Page 14. The pandemic related trends affecting and investor behavior, digitalization and online connectivity has accelerated the growth opportunities for Leonteq in terms of product distribution and white labeling offerings. Against this background, we defined our growth strategy 2026 based on 4 key dimensions: offering platform regions and sustainability. As we continue to grow our activities beyond the traditional structured products business, we are focusing on sales expanding and diversifying our offering across product, sales classes and issuers. Through these expansions, we intend to further quote the revenue contribution from growth initiatives and/or activities with lower balance sheet intensity. With our scalable technology platform, we want to stay at the forefront of digitalization and further automate processes and services across the entire value chain. We will continue to create innovative digital solutions for and with our clients and partners. We will do this with the aim to increase the number of client transactions processed. Additionally, while further strengthening our market-leading position in Switzerland, we are expanding our offering to an informational client base. At the same time, we are taking targeted measures to strengthen our brand in Europe, Asia and the Middle East, with the intention to increase our revenue contributions from offices outside of Switzerland. Lastly, and underscoring our ambition to further integrate ESG aspects into our service offering and business activities, we are continuing to implement responsible investing opportunities for our clients and continuing to integrate best ESG practices for sustainable development of our company. In this context, you will see here that we have had 2 new sustainability targets for 2026. The first target is to sell as a 72% trust index score from great Place to Work. For the first time in 2022, Leonteq worked together with Great Place to Work. As part of this, Leonteq employees globally were asked to participate in an employee survey as a first step in the process to build a great company culture at Leonteq. Based on the survey results, Leonteq scored an average trust index score of 68%. We, as a company, intend to build on this by implementing further measures to improve this score subsequently conduct such service every other year. We therefore aim to improve our overall trust index score to over 72% by 2026. The second sustainability target is to increase the gender diversity of Leonteq base to over 25% similar presentation. Leonteq is a diverse company already today in terms of nationalities, background and skill set we hire, but over the past years, we have over around 18% to 19% female representation at the company. This, of course, is in part due to the fact that many of Leonteq's functions are in areas where there are more male than female candidates available. We have, however, recognized this challenge and are or will be implementing various measures to improve the statistics because we believe and are convinced that gender diversity is important to the success of Leonteq. Let me share with you now some of the achievements we have made in 2022 along the 4 strategic pillars of our growth strategy. I ask you please to look at Page 15. As part of our offering pillar, we have introduced a new innovative white-labelling issuance model via structuringHUB, which is designed to reduce time to market and cost for banks. VP Bank became the first structuringHUB sponsor, and we are seeing good progress since the go-live of the corporation back in July 2022. Furthermore Swissquote joined Leonteq's multi-issuer platform in early '22 offering investors access to yield enhancement payoffs from Switzerland's market leader in online banking. The second half of '22, the product offering was expanded to include anticipation products such as actively managed certificates and capital protection products. Regarding Leonteq's Smart Hedging Issuance Platform ship, all hedging counterparties have successfully transitioned to the use of the new alternative reference rates. And we have conducted to an additional hedging counterparty last year. This brings us to now a total of 9 counterparties, including Leonteq that are connected to the platform. In 2022, Leonteq was also recognized as a third country administrator under the EU Benchmark regulation. This will enable us to offer products that drive runs a wide range of proprietary indices to our clients. Leonteq also maintained its leading position in offering cryptos assets in a securitized format by increasing our universe available to a total of 30 crypto assets. We also deputed our ETP+ label, which uses a Switzerland-based custodian and collateral agents and provides for the independent checks, which serve as a key mitigator of the issuer risk for end clients. Leonteq was and still is the first issuer of ETP products in the Swiss market, which is licensed as a security firm by FINMA. Together with our investment grade rating, our strong capital base and our proven track record spending more than 15 years now, it clearly differentiate from existing ETP issuers which tend to be special purpose vehicles with limited trade act rating or regulatory supervision and often only with minimum paging capital. Within our strategic pillar covering our platform development 2022 was marked by the launch of a new range pricing feature on links that allows parameters to be combined in accordance with individual investor demands with matrix pricing results presented in the form of a heatmap in a matter of seconds. We also rolled out new links module called Academy, which is an online education program that has been developed in collaboration with the Institute for Management Development, IMD based in Lausanne. This course was offered as part of our Academy module provides a deep dive into the world of structured products. Our continued efforts in the development of links also led to links being named the best issuance platform by structured retail products. These achievements and the continuing marketing efforts led to a significant increase in the number of grinds connected to links, which grew by 37% to 890 financial intermediaries. '22, we also started developing a crypto asset platform to support custody, trading and settlement of digital lessons, and we continued the build-out of our Sigma platform to enable pension savings solutions in a scalable manner. Regionally, Leonteq maintained its strong position in its Swiss home market. Together with our platform partners, we remain the leading issuer of 6 listed yield enhancement products with a market share of 24% and currently, rank as the #3 issuer of 6 lease structure investment products, excluding the leveraged range of products with a market share of 12%. Underscoring our strong client focus on the European market, we won 5 awards at the SRP Europe awards in '22. And we continued our progress on establishing a strong market position in Italy being recognized also at the Italian Certificate Awards, where Leonteq won the category of Certificate of the Year. As part of our ambition to further expand our offering to serve an international client base, we strengthened our regional management team in Hong Kong and Dubai and launched Shari'a compliant trust certificates with the aim to grow our business in the Middle East. Our service center in Lisbon also strengthened this year with by now total number of 72 employees. As part of our sustainability efforts, we worked on the expansion of our reporting framework, which includes today's publication of our sustainability report in accordance with the GRI standards. Led by the Sustainability Committee, which is positioned at the Executive Committee level, we defined a clear set of key performance and key risk indicators to monitor report progress against our sustainability strategy defined by our Board of Directors. Among the measures implemented in 2022 is the publication of Leonteq's Code of Conduct and ethics, the publication of the supplier code of conduct and the establishment of a global escalation with the blown policy and integrity line. We have now looked at our strategic progress for 2022. Let's now please also see how we are measuring our progress on the next page. A year ago, we told you that we would measure our progress along the 4 strategic pillars against a clear set of KPIs defined and communicated to you in early '22. Whilst these are KPIs that we measure over 5 years, we want to be absolutely transparent about where Leonteq stands today. Here on Page 16, you can see 4 progress parts, reflecting Leonteq's increasingly diversified business offering that goes beyond the traditional structured products business by now. Revenues from new business activities contributed 51% of overall revenues in '22. This is an increase of 7 percentage points from the prior year period and demonstrates our ability to improve our earnings credit quality, thanks to our efforts to diversify the offering. On the other hand, client transaction decreased from over CHF 260,000 in '21 to just above CHF 170,000 in '22. However, remaining above the pre-pandemic level of around CHF 164,000 transactions by quarter '19, reflecting Leonteq's continued business expansion, and of course, also taking account of the fact that client activity last year was lower across the industry. Similarly, on the back of heightened market uncertainty, Leonteq registered reduced activity in most of its regions throughout 2022, which you see on the chart 3. Switzerland's net fee income was less affected due to a positive contribution from our pension savings business in Switzerland and also the transfer of sales coverage for the Nordic's region, from Europe to Switzerland. As a result, net fee income in Switzerland totaled CHF 96 million in '22. Operations in Europe generated a net fee income of CHF 83 million and net fee income in the Asia region, which includes in our definition, the Middle East was CHF 24 million. Our efforts in further embedding ESG considerations and sustainability practices into our business activities and reporting transparency on our progress each year has been recognized. In '22, Leonteq received rating upgrades from a number of ESG rating agents. MSCI, the world's largest ESG provider assigned Leonteq a double rating-upgrade to A from BP. In Sustainalytics and other leading ESG research firm upgraded Leonteq's rating from the category medium risk to the category lower risk. By these 4 progress reports, you can see that like in any other business, progress is not always made in a linear fashion. Although I'm less pleased about the fact that today, we can only see 2 out of 4 checkmarks on this slide, I'm confident in Leonteq's capabilities to continue to diligently execute on its key priorities in the next 4 years. And I'm convinced that these efforts will eventually lead to positive progress marks in each of the areas highlighted. I would like to now pivot slightly and speak about Leonteq's ecosystem for Investment Solutions. You can find this on Page 17. Now before elaborating on this slide, I would like to briefly pause and highlight to you that with this year's full year '22 results, Leonteq is also celebrating our 10 years anniversary on the SIX Swiss Exchange. As part of the special edition of our annual report in this context, we have highlighted how Leonteq has expanded its ecosystem for investment solutions over the past 10 years. It gives you a good overview of the accomplishments made over the past decade, and I would kindly invite you to have a good look at our annual report where we have also received testimonies from partners and ecosystem contributors for which we are very grateful. From now going to specifically the slide on Page 17, which shows to you the progress made in '22. From our white labeling partners on the left side to our 27 third-party issuers just below that you can see directly across our main client types with whom we impact on a regular basis. On the bottom right, we have highlighted our ship hedging counterparties, further more content, product and technology enhances are shown on the right-hand side in the middle. In this case, we work with different experts from various industries and disciplines in the first suite of delivering high-quality solutions for our clients. Finally, the ecosystem is then complemented by our digital solutions and connectivity to various marketplace and stock exchanges among others, features for which, as mentioned before, we have also won various awards. Taking you to Page 18 and highlighting for a moment the various awards, we aim at Leonteq to provide excellent service to our clients and partners and therefore, we are particularly proud to have again received this year derivative award, which has recognized now for the 12th consecutive year Leonteq as a top service provider in the market for structured products in Switzerland. Of course, we do not take this recognition lightly. We remain honored and grateful to our clients for this recognition, and we will continue to put our base efforts in servicing our clients and partners to their expectation. We are, of course, also very pleased in the context of one of our strategic pillars defined that the ESG rating agencies start to recognize our efforts in this area. I've referred to before to the rating upgrade, particularly from MSCI and Sustainalytics, but would also refer to the [indiscernible] listed on the page. And of course, we will continue our active engagement with all rating agencies on the back of today's now for the first time, published part of the sustainability report as we strive to further improve our ESG ratings. On to Page 19, reflecting on the progress and recognition we have made and received during the first 5 years of our 5-year growth strategy cycle, we fully intend to continue investing in key initiatives going forward. You can see on Page 19 that we are increasing our yield investments into these initiatives to CHF 32 million. We are expanding our product offering by also building out our EMC systematic indices and fund derivatives, including QIS businesses. We are expanding our crypto offering and invest in platform capabilities for crypto assets. We are expanding our balance sheet-light business. We are investing in an automated flow trading platform and intends to newly offer a large range of securitized leveraged products in due course. We also plan to expand our issuer universe by building out our existing setups, including our recently launched innovative solution with structuringHUB and adding new white labeling partners to this in due course. We will accelerate our digital solutions by the continued rollout of our white labeling features to clients and will continue to add new feature functionalities on things. Our new pension savings offering we launched as a new innovative product concept for the voluntary retirement savings market in Switzerland. This is the so-called 3A Pillar Plan pension savings foreseen by Swiss legal and pension laws and frameworks. We are also continuing to build out our Sigma platform to enable savings solutions on an automated and scalable basis. Throughout Europe, Asia and the Middle East, we will invest in marketing activities to strengthen our brand. We are continuing to integrate ESG aspects into our business activities and as a result of all of this we will be guided by our strategy. We have defined our key initiatives, and we will work as a company towards our diligent execution of our growth strategy. Before we end today's call, I would like to now move on to summarize the full year 2022 and provide an outlook for 2023 on Page 21. Leonteq rate costs result in '22 for the second year in a row. Our results were driven by a strong trading result on the back of high levels of market volatility. In this environment, client activity was reduced, but our franchise remains strong. So the results demonstrate both the resilience of our business model and our ability to further improve the quality of our wins. With our now refined capital return policy, we are providing attractive capital returns to shareholders whilst being conscious and transparent about the inherent volatility in terms of quarterly performance of our business. And we are focused on executing on our growth strategy 2026, of which tangible progress on key initiatives has been made in '22. Now looking ahead, we have built a solid and diversified foundation for the company to build on, and we are increasing our annual investments in key growth initiatives starting this year. Following 2 record financial years in a row, supported by unprecedented market condition, Leonteq expects to deliver more normalized profitability levels with profit before taxes of CHS 70 million to CHF 100 million for the full year 2023. Thank you for your attention. I hand back over to you, Dominik.

Thank you, Lukas. Thank you, Marco for the presentation. We are now happy to start with the Q&A session, and we'll take the first question.

The first question is from Daniel Regli of Credit Suisse.

I actually have about 6 questions. Shall I just run through all the questions or shall I ask them one by one? And do you want to ask -- answer them one by one.

Run all the questions, and then we answer them.