LEON.SWLEON.SWSIX
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Dominik Ruggli: Good morning everyone, and welcome to the press conference call of Leonteq's Full Year 2025 Results. Today at 6:30 a.m. we published the results press release, the results presentation, the annual report and the sustainability report for 2025. All these documents can be found in the Investor Relations section of our website. In today's discussion of our financials, we will use information that references alternative performance measures. For that, I refer you to the APM section at the end of the press release where you will also find the usual cautionary statement. That cautionary statement also applies to the information provided verbally in this presentation and the Q&A session. Here with me today are Chief Executive Officer, Christian Spieler; and our Chief Financial Officer, Hans Widler. We will start the presentation with our key messages. Afterwards, Hans will provide you a detailed discussion of our financial performance in 2025. And Christian will then take you through our strategic progress update. The presentation will last about 45 minutes, after which we are happy to take questions. We intend to close the conference call latest by 11:00 a.m. With that, I hand over to you, Christian.
Christian Spieler: Thank you, Dominik. Also from my side, a warm welcome to all investors, analysts, and media representatives on this call. 2025 presented a mixed set of developments. We closed the year with an unsatisfactory result, as challenging market conditions and lower activity from our historic partners weighed on our earnings. We also continued to feel the effects of legacy matters in our business. At the same time, we began to see improved client momentum in the second half of the year. The transition to the new regulatory regime in a very short time frame was a major achievement, reflecting significant commitment across the entire organization. At the end of December 2025, we reported a strong CET1 ratio of 16.9%. We have also executed against our strategic priorities in a disciplined manner along our ROE plan: Resize, Optimize and Expand, with the focus on resizing and optimizing in 2025. We can now fully focus our resources on expansion while continuing to transform the company. For 2026, our full focus is on growing and expanding promising businesses, and we expect to return to a positive pretax result for H1 and full year 2026. I also want to draw your attention to our further announcement today: the nomination of Felix Oegerli as new Independent Chairman proposed for election at the AGM 2026. Felix is an accomplished leader in the financial services industry and brings experience across the major business areas in which we operate. He retired last year after more than 11 years at ZKB as Head of Trading, Sales and Capital Markets. Before that, he ran the Kantonalbank's liquidity management, short-term interest rates and prime finance activities for more than 5 years. Earlier in his career, he spent 21 years at UBS, where he held positions including Global Head of Prime Brokerage and Deputy Global Head of Securities Lending and Repo. I am convinced that this background and skills will be of great value in the continued transformation of our company, and I very much look forward to working with him. Now I'll hand over to Hans for the financial update.
Hans Widler: Thank you, Christian. Also a very warm welcome from my side and thank you for joining us here today. I would like to start by putting our performance into the context of the market environment we faced as shown on Page 6. 2025 was indeed a challenging market environment for Leonteq with 2 distinctly different half years. Looking at the left-hand side chart, we provide you with the development of 1-month implied versus realized volatility of the Standard & Poor's 500. In the first half year of 2025, we saw a significant increase in market volatility following the so-called Liberation Day. In the second half, the realized volatility decreased significantly and was constantly below the implied volatility. Why is this relevant? We keep a structurally long volatility position on the trading book as a macro hedge against market dislocations. In periods of heightened market volatility, we benefit from significant positive contributions on the trading side. Due to the fact that the realized volatility was constantly below the implied volatility, we recognized negative contributions from our hedging activities in the second half of 2025. Such a pattern is very rare and unusual over an extended period of time. Looking at the right-hand chart, the Swiss franc, which was the best performing currency in the G10 last year, continued to strengthen against major currencies. This impacted parts of our revenues given a large component of our client flow is denominated in U.S. dollars and in euro. Let's move now to Page 7 to look at how these parameters concretely influenced our numbers. Our net income declined by 17% to CHF 178.5 million in 2025. This was on the back of 4 key factors. First, we had a temporary halt in new business activities with Leonteq's largest insurance partner due to a merger-related shift in priorities. Second, on the structured product side, we saw a decrease in margins from 70 basis points to 59 basis points on the back of a change in our partner and product mix. Third, contributions from large tickets decreased from approximately CHF 14 million to CHF 7 million year-on-year. And fourth, the before-mentioned strengthening of the Swiss franc impacted fee income by another CHF 5 million. Let's look now at the net trading result, which is influenced by our hedging and our treasury activities. In 2025, the net trading result decreased to minus CHF 3.1 million compared to CHF 21.5 million in 2024. On the hedging side, we recorded positive hedging contributions in the first half of 2025. These were reversed in the second half on the back of the realized volatility which was consistently below the implied volatility as mentioned before. Contributions from Leonteq's treasury activities were also negative, primarily due to a change in our investment portfolio in preparation of the newly defined business-specific liquidity regime. This resulted in reduced credit risk exposure, but also yielded in lower returns. For the same reason, we extended and used available credit facilities leading to a net interest result of minus CHF 6.4 million. On the cost side, underlying operating expenses decreased by CHF 36 million or 16% in 2025. I will give you a detailed breakdown of the drivers and also the view between reported and underlying costs on the next page. Overall, on the back of lower net fee income and a reduced trading result, we reported an underlying pretax loss of CHF 21.5 million for 2025 despite significant cost reductions and renewed momentum in client business activities in the second half of the year. On an IFRS reported basis, which includes one-off charges that are non-recurring in the amount of approximately CHF 11 million, the Group net loss amounted to CHF 33 million. Moving now to Page 8. I would like to give you more color on the drivers behind our cost base. On a reported IFRS basis, costs are down CHF 25 million or 11%. We reduced personnel expenses by CHF 20 million. This was driven by a more than 50% reduction in lower variable compensation committed for 2025 compared with the previous year. We also reduced our head count by 7% and reduced our contractors by 24%. Leonteq also recognized lower net provisions of approximately CHF 5 million due to the conclusion of legacy matters. On an underlying basis, our costs went down by 16% to CHF 194 million. This excludes CHF 2.2 million one-off costs in relation to the transition to our new regulatory framework. It also excludes CHF 9 million for one-off restructuring costs which we incurred in 2025. For 2026, Leonteq expects total operating expenses of approximately CHF 200 million. This slight increase compared to the underlying cost base 2025 reflects 3 factors. First, the planned launch of the retail flow business in Germany, which will require marketing-related expenditures. Second, we expect to see a certain normalization of the variable compensation following 2 years of significant reductions in bonuses for our staff. Third, we further expect certain index-related price increases, in particular on market data services and software licenses. These increases are partly offset by the full-year effects of cost reductions achieved in 2025 and result in net increased costs of approximately CHF 6 million. Let us now move to Page 9 of the slide deck. Since 1st January 2025, Leonteq is subject to enhanced capital and large exposure requirements as defined by the Swiss Capital Adequacy Ordinance. This governs capital requirements for banks and account-holding securities firms in Switzerland. Simultaneously and effective January 2025, the revised capital adequacy requirements known as Basel III final entered into force. Under this framework, most relevant are capital calculations under the standardized approach for market risks for Leonteq. These were introduced under the so-called Fundamental Review of the Trading Book. I will refer to FRTB from here onwards during the presentation. Leonteq's business model is largely driven by the issuance of structured investment products with embedded derivatives. Therefore, Leonteq is required to perform capital calculations according to FRTB. Taking into account, the complexity of risk-weighted asset calculations under FRTB, Leonteq was allowed to temporarily apply the so-called simplified standard approach over a phasing period until end 2026. Leonteq invested significant resources in implementing FRTB, which required substantial changes in systems, data infrastructure and calculation engines. We completed the transition to FRTB in November 2025 and thus significantly ahead of schedule. The implementation of the risk-weighted asset calculations according to FRTB had a material positive impact on Leonteq's capital position. The market risk risk-weighted assets decreased by 16% resulting in an increase in the CET1 ratio of approximately 270 basis points to 16.9% at the end of December 2025. This is a strong capital ratio and well above the guidance provided with first half year 2025 results. Looking now ahead, we will continue to optimize our capital framework to reduce the sensitivity to risk-weighted asset fluctuations. We also want to maintain an appropriate buffer under different stress test scenarios, and for that, an appropriate observation time period is required. In light of the reported financial loss and in line with its capital return policy, the Board decided that Leonteq will not pay a dividend for 2025. The Board considers it prudent not to return capital at this point in time. This will allow the effectiveness of measures taken to further optimize the company's capital framework to be monitored. The Board is determined to return excess capital through a share buyback in early 2027, provided that the CET1 ratio is maintained at a level meaningfully in excess of 15% on a sustainable basis. This is also very much in line with the capital return policy defined last summer, and we are confident that we will be able to deliver also on this ambition. Continuing on Page 10, let's look at our balance sheet. In terms of numbers, we reported an increase in total assets of CHF 0.5 billion to CHF 11.2 billion at the end of 2025. This is predominantly driven by an increase in trading financial assets on the back of higher equity hedging positions which in turn increased our securities lending activities. Cash and receivables decreased mainly due to a decrease in transaction volumes towards the end of the year. Our investment portfolio remained broadly stable at CHF 2.7 billion, but the composition is today even more conservative. In preparation for the business-specific liquidity regime, Leonteq shifted its investment approach to higher quality liquid assets resulting in reduced credit stress exposure. On the liability side, Leonteq issued products increased by 2% to CHF 5.3 billion, underscoring the continued confidence by our clients in Leonteq. We shifted further certain of our funding activities in relation to the before mentioned increase in equity hedging positions and saw an increase in short-term credit and liabilities by 20% to CHF 2.3 billion. Lastly, our shareholders' equity reduced by 14% to CHF 0.7 billion. This was predominantly driven by 2 factors. First, Leonteq made a CHF 52.9 million distribution to shareholders in April 2025. Second, the depreciation of the U.S. dollar against the Swiss franc had an OCI impact on our structural U.S. dollar position of CHF 46.6 million. This capital impact, however, strongly correlated with the currency impacts of risk-weighted assets. Overall, Leonteq has a highly liquid hedge book and runs a very conservative investment portfolio. This puts us in a sound position to manage our assets and liabilities in different operating environments. I will now turn over to Christian for his remarks on our strategic progress update.
Christian Spieler: Thank you, Hans. I have now been CEO of Leonteq for roughly a year. I would like to briefly outline what I found when I took on the role, how we addressed key challenges, and where I believe we stand today, where we're going next. My first and foremost observation is that with both the existing talent and some new leaders I added when I joined, Leonteq has indeed a very strong team. This team is highly business and customer driven and extremely committed and gives me confidence we'll succeed. Let us now look at our business model and put this into context of our strategy. Our business model is in fact very simple. Leonteq generates fees by selling structured products through distributors. These financial intermediaries generally distribute these products to end investors. The fees usually are generated by charging margin on transacted volumes. So this is a straightforward business model. However, as you can see on the left side in the grey box area, we operate a highly specialized product factory for structured investment solutions. This requires highly skilled teams, advanced trading systems and sophisticated risk control. The business model depends on high volume transaction processing, which means operational complexity and execution intensity. We work closely with financial intermediaries and partner institutions to distribute our products. But in some of these relationships our pricing power is limited, which contributes to margin pressure. To attract more volume to the platform, Leonteq has built over the years a number of additional core services to support the needed growth in fees. In particular, these are: First, different white labeling setups to onboard new issuance partners. Second, the company started to offer auxiliary services such as accounting, risk metrics, lifecycle management support and regulatory reporting services for its partners. Third, a SHIP infrastructure was built to allow partners to back-to-back hedge the exposure on a trade-by-trade basis to external hedging counterparties. And fourth, a powerful digital investing platform called LYNQS was developed. However, all these services are provided free of charge. So to a certain extent, you can think of all these services in the grey box on the left as Leonteq's fixed cost base. Over the years, also the operating environment has fundamentally changed. The economic dynamics of the structured products market have steadily deteriorated over the last 15 years, with fee and margin compression, excess capacity, and aggressive pricing becoming the norm. Competitors are increasingly pursuing scale, commoditized offerings, and volume-driven models, all of which have put pressure on industry margins. In response to these market dynamics, a number of countermeasures were taken in the past. These you can see on the right side in the green box. First, the number of partners were increased to leverage the existing fixed cost base and to reduce the historic dependence on 2 large partners. Whilst this dependency was in part reduced, it also affected one stable revenue sources as well as margins. Second, the client base was widened through regional expansion and a significant increase in target markets from 30 to 70, together with a widened client risk spectrum within a few years. Third, the product offering was diversified which triggered significant investments. Altogether, these countermeasures led to an increasingly diversified revenue mix with a nevertheless high and increased cost base, but also with a continued dependency on volatile trading results. As a further challenge, which you can see on the top in the red box areas, increased regulatory scrutiny since 2022 and a lingering reputational overhang have impacted Leonteq's client business and reduced strategic flexibility. Combined with a generally reduced risk appetite, certain counterparties and partners have been limiting their exposure to us. Or the company has itself limited certain activities since the beginning of 2025. On top, our new much stricter regulatory framework has required major investments in systems, processes, risk infrastructure, and liquidity management, weighing on our profitability and absorbing significant management time last year. This is why we introduced our ROE strategy, our execution framework to build sustainable performance. Resize parts of the business that are not profitable. Optimize established areas. And expand initiatives with strong future potential. So the goal is clear: a structurally stronger Leonteq with less dependence on volatile trading income, improved profitability, and more resilient returns. Let me walk you through how we are executing on this strategy and the progress made so far since last summer. Let's start with the Resize pillar where we're reshaping the footprint and cost base with discipline. We have materially reduced our cost base. Underlying operating expenses are down 16% to CHF 194 million in 2025. We're actively improving the structural efficiency of our organization with 26% of non-sales trading staff now based in Lisbon, and targeting about 30% by end 2026. We're decreasing our footprint where it is strategically and economically sensible. For example, we signed an agreement to sell our Japan entity which is expected to close in Q1 2026. And we're making very good progress in exiting our pension savings initiative, bench. In the past months, we managed to transfer saving balances of all bench customers to other providers and target the controlled wind-down by end 2026. In our Optimize pillar, we are strengthening efficiency and capital discipline in the core. We're improving profitability by focusing on the levers that matter most: stronger operational execution, lower capital consumption and tighter control of complexity and risks. We're taking a pragmatic approach here: improve what works, fix what doesn't and remove avoidable friction in our model. Now most importantly, our Expand pillar. We are building up initiatives with more recurring revenues and a more efficient capital profile and are increasing our total addressable market. This includes businesses like: quantitative investment strategies, QIS; actively managed certificates, AMC; the retail flow business; and LYNQS. To be clear, this is not growth at any price. It's targeted expansion into areas where Leonteq has a clear right to win and to achieve superior margins. Let's now move to the next page to back up my statements with concrete data points that demonstrate why we're confident about our strategic trajectory. As you can see on Page 14, we saw an improved client momentum in the second half of 2025 despite all the headwinds we faced. Our client transactions increased by 14% to more than 140,000 and we issued a record of 33,000 products on our platform in the second half of 2025. Also in our home market Switzerland, we increased our market share in structured investment products to 29% in H2 2025. On Page 15, I want to take a closer look at the regional performance. Net fee income in Switzerland declined by 16% to CHF 39 million in H2, mainly driven by a decline in fee income from the pension savings business. This decrease is related to a temporary halt in new business activities with our largest insurance partner on the back of a merger-related shift in priorities there. Operations in Europe generated net fee income of CHF 38 million in H2, mainly due to a change in partner mix. As you can see, we had a significant drop already in H1 2025 and are now starting to see a slow improvement from here. In the Asia and Middle East region, net fee income grew by 38% to CHF 13 million in H2, reflecting the first positive results of the leadership change in Asia. Whilst obviously our starting point is low, we are seeing positive trends in the second half which continued now in the start of the new year, and we clearly expect revenue growth across all our regions for 2026. On Page 16, you can see continued progress in key growth areas. In 2025, we consistently rolled out our new generation of AMCs to a broader client base. This offering has attracted considerable interest, especially in Asia, and the outstanding volume had already risen to approximately CHF 0.3 billion at the end of December 2025. That's an increase of 46% year-on-year. Overall, across all AMC products, the total outstanding volume in AMCs amounted to CHF 2.3 billion. That's minus 5% year-on-year. This provided the Group with recurring revenues totaling CHF 28.3 million in the second half of 2025, which is broadly flat versus H2 2024. This clearly demonstrates the recurring revenue nature of this business, even in a half year when total revenues are down notably. We also advanced our retail flow business initiative, which represents our single biggest investment in recent years. Leonteq entered the market of listed leverage products in Switzerland in April 2025. As of end 2025, we offered more than 10,000 listed leverage products on SIX and BX Swiss, positioning Leonteq among the leading issuers in this market. With eight months of entering the Swiss market, we had achieved 7% market share in the offered product categories at SIX Swiss Exchange. At the beginning of 2026, we also received BaFin approval for a license extension in Germany. This marks an important step in the expansion of the Retail Flow business in the German market. We plan to go live in the second quarter of 2026 and are looking forward to a well-executed start that will be just as successful as the one in Switzerland. And finally, we continue to make progress with our digital investment platform, LYNQS. Major developments included the addition of further third-party issuers on the platform as well as the enablement of QIS for pricing. In the second half of 2025, the number of products initiated via LYNQS increased by 90% to 11,087 products. As a result, our click 'n' trade ratio improved to 33% in H2 2025 compared to 26% in the prior year period. This demonstrates the company's success in shifting trade execution to the platform, particularly for smaller ticket sizes. Let's now look at our performance from an issuer perspective on Page 17. We saw a strong pick up in demand for our own issued products, which demonstrate continued confidence in our Leonteq product. Turnover in Leonteq products increased by 23% to CHF 7.5 billion in the second half of 2025. Turnover from Tier 1 issuers increased by 7% to CHF 4.5 billion in H2. In this segment, we saw a change in partner mix. This also had an impact on our margins. Turnover from Tier 2 and Tier 3 issuers saw a strong growth by 42% in H2 to CHF 1.7 billion. As reported before, we have revised our acquisition framework and have launched a process to identify an additional high-rated issuer. So let me wrap up today's presentation on Page 18. We are at an inflection point. Legacy matters are largely behind us, and with the transition to the new regulatory regime now completed, we have full clarity on our capital ratios, and our capital position is strong. This significantly reduces uncertainty and frees up management capacity and resources to focus on our core priorities: strengthening client relationships; onboarding new clients; and growing revenues. We have already seen a recovery in client activity in the second half of 2025, reflected in higher issuance volumes and increased transaction activity. Client sentiment has improved and flows into Leonteq-issued products have picked up, underscoring the continued confidence in Leonteq by our clients. Following a year focused on resizing and optimizing the company, we are now in a position to focus our resources toward growth and the expansion of the initiatives defined under our new strategy. In terms of financial outlook, we expect to return to a positive pretax result for both the first half and the full year 2026 and now expect to achieve our mid-term financial targets in 2028. The key now is disciplined execution of our strategic priorities. While the transformation will take time, my first year at Leonteq has reinforced my conviction that we have distinctive capabilities and a highly committed team that can deliver progress and shareholder value. In closing, what I ask of our shareholders and stakeholders is this: judge us by execution and trajectory. Look beyond the unsatisfactory result for 2025. Look at what we have achieved already in a short time. Going forward, look for disciplined delivery of our ROE initiatives and steady progress in our performance step-by-step. The direction is right. The measures are in motion and our foundations are solid. We need the time and support to complete this turnaround and fully deliver on Leonteq's value creation potential. We have a capital and infrastructure-intensive business. It requires a sophisticated and costly machine. But when run well, it will deliver attractive returns and meet shareholders' expectations over time. I'm confident we're on the right track. With this, I would like to thank you for your attention and hand back over to Dominik.
Dominik Ruggli: Thank you, Christian and Hans for the presentation. We are now happy to start with the Q&A session. We will take the first question.
Operator: [Operator Instructions] The first question comes from the line of Daniel Regli from Zurcher Kantonalbank.
Daniel Regli: I have a couple of questions. First about capital policy. Obviously, you have achieved quite a nice capital ratio of 16.9% by year-end. And you announced a share buyback in early 2027. Should the CET1 ratio remain meaningfully above 15%? So here, I first wanted to ask, can you specify a little bit more what you exactly mean by meaningfully above 15%? And then secondly, obviously regarding 2026, since you expect a profit, can we also assume that investors will again get a dividend in 2026? And what do you have in mind in terms of payout ratio for 2026? Is it still the kind of 50% you once mentioned, or has anything changed in this regard? Then my second question on the turnover developments. And I mean, I appreciate you trying to provide more clarity on the turnover, however, can you maybe talk a little bit more specifically about, the old world traditional or historic partners versus new partners? Obviously, I lack a bit the comparability of the new tiring of the partners since partners can move between the different tiers. So yes, can you maybe talk a little bit more about this? And then also regarding turnover, historically you have always talked about a balance sheet-light turnover. Can you maybe specify how this has developed and in how far this SHIP project from years ago has kind of recovered in importance due to the regulatory transition? And then maybe lastly, can you maybe talk a little bit about the regulatory legacy points which I think with BaFin you are now kind of settled, FINMA is also settled. So there remains something in France. Can you maybe talk a little bit about the timeline until when you expect clarity on this one?
Hans Widler: Thanks a lot, Daniel, for your questions. Allow me to start first with the capital policy and your question with regards to the dividend. As you know, we switched to FRTB for market risks in November. That is just about 2 months ago. Leonteq feels it's prudent and adequate first to focus on the sensitivity of the respective capital ratios over a certain period of time before committing to the capital return policy that we have announced accordingly. With regards to dividend, we adhere to our guidance provided earlier, that is no dividend with a loss-making result. And we reiterate the current payout ratio of 30% that was guided earlier. With regards to the share buyback early 2027, as mentioned, it's important that we observe the sensitivity of the respective ratios over a certain period of time, and we feel it's adequate and prudent then to launch it on the basis accordingly beginning of 2027. With regards to historic versus new partners, the split that you asked on the turnover side, the major drivers that you see on Tier 1 issuance partner are obviously the historic partners. That didn't change within the last 6 to 12 months. So majority of the respective Tier 1 partner impacts can be really compared with the historic partners. And as you can see, it is clearly our ambition to further diversify as reflected in the increase of Tier 2 and Tier 3 partner activities. With regards to your question on balance sheet-light. Balance sheet-light turnover amounted to approximately 13%. This is comparable with last year. We will have a continued focus on expanding balance sheet-light activities as part of our efforts to optimize our regulatory capital requirements. With regards to the regulatory update, I will pass on to Christian.
Christian Spieler: Yes. On the regulatory side, I mean, first, you've seen, and we've talked about this already before in December, the announcement by BaFin, we closed matters with them related to legacy stuff that was at a low fine. But we then immediately after got an expansion of our license. So on the side of BaFin, everything is resolved and fine. On the side with FINMA, we have taken everything they had and wanted us to fix on board. We -- everything has been remediated. And it's all done. And so now on this front, we are -- there's a last audit going through, but nothing is expected here. So that is considered that one done. There is one large -- one other EU regulator where there was a finding in 2023 that was largely -- that was largely with respect to lack of certain processes and certain governance structures. All of those findings that we were told about in 2023 were remediated fully very quickly and are fully remediated. We were also told in that interaction that things -- that nothing new had occurred and been found since, and we are expecting that to close in the future.
Operator: Next question comes from the line of Anne Risold from Octavian.
Anne-Chantal Risold: Maybe on the German retail flow business, I mean, over the years -- I mean, it's good you have finally received the license. Over the years, we had -- that was your main investment, and we had previously some figures how much you could contribute. But if you could maybe give us again how much do you expect now that you have the license and kicking in, how much it will contribute to your profitability in the midterm? And what kind of margin do you expect from this business? One on the -- you mentioned a lower fee from the insurance contribution because of your partner is having some restructuration or merging. Do you expect -- what do you expect on this front? Is it going to restart? Or do you think the merged entity of your counter partner may change their view? On the -- and then on the governance side, did I understand right that also you mentioned that you described previously the regulatory update. So clearly, on the French regulatory update, do you still -- did you close this? Or do you -- when do you expect to close this with the French regulator? And maybe one thing on the -- at the beginning of January, the shareholder agreement with Raiffeisen and 2 stakeholder has terminated, was not renewed. Do you expect that it could have any effect on your operation?
Christian Spieler: Yes. Thank you for the questions. So first on the RFB business. The RFB business so far, and that's just based on what we've done in Switzerland has generated this year around about CHF 3 million of revenues. That's a significant increase versus the prior year and like in the order of magnitude increase of CHF 2 million. And as we said, like we went into the market with only 8 months, we went to a significant number of listed products, achieved sort of like #3 player in the market. That is a very significant achievement here. And looking at Germany, which is a much larger market, we think this is going to be a very, very good success for us. We're looking forward to it. But what are the drivers? Why do we believe this? We have probably the best team, most experienced team in this space on our platform. They joined us a few years ago. They built a tech platform, which is absolutely market-leading. And this business is largely -- there is a lot of technology drive in this business. So having a leading top-notch tech platform that has all the experience of 30 years of these people built into this platform and the experienced people on board with our execution strategy there, we expect this to be a very successful start. And altogether, the RFB business this year is budgeted to deliver around CHF 8 million of revenues. That's a significant increase. You asked about margin. It's a high-volume business with low margin. But again, tech platform comes into play and becomes the real strength here because the ability to handle large volumes, low-margin product still, in the end, generates significant revenues, and we have a very positive outlook for the medium to longer-term for this business, which obviously goes into the double-digit revenue region.
Hans Widler: Then with regards to our major insurance partner, [ indiscernible ], we are in very close collaboration for a potential new product launch in this regard. On operating level, we are in contact, obviously, on a daily basis in this regard. But we also have full sympathy for the respective partner given the legal merge that the priorities are short-term different. With regards to expectations for 2026, we expect a comparable revenue contribution in 2026 as for 2025, excluding effects of a potential relaunch accordingly. Why do we expect the comparable revenue contribution? Whilst certain policy cancellations every year are standard and hence, the number of policies are expected to slightly decline without a relaunch of new products, the AUCs given the premium inflows will increase and herewith lead to a stable revenue contribution. We are highly committed to that large insurance partner and looking forward to relaunch additional products, but have full sympathy and full support for the interim period for the merger requirement adjustments. With regards to French regulator, I will pass on to Christian.
Christian Spieler: Yes. I mean, this was effectively part of my answer to Daniel Regli's question earlier. When I referred to a large EU regulator, again, as I said, as answer to that question, we have remediated everything that has been asked for. We've been told there have been no new findings since the original raising of the issue in 2023. And as I also mentioned, we expect this to close in the future. I cannot comment on timing because the regulators work this their way, but we look forward to this being closed. Lastly, your question on the shareholder agreement, we do not expect that to have any impact to say. Raiffeisen is our main shareholder and remains our main shareholder. We welcome them as our main shareholder. And to the extent they want to stay committed in their investment, we love that, and we'll work with them.
Operator: We now have a question comes from the line of Sylvain Perret from AlphaValue.
Sylvain Perret: So I wanted to know whether you could share more details on how you perceive the market environment in the beginning of 2026? Has it become less difficult than in 2025? And if so, what positive market catalysts do you see as having the potential to accelerate the turnover growth and the fee margin recovery this year? And my second question is on the retail flow business. So considering the good success you already observed in Switzerland and the expertise you are building there, do you expect to launch the business into additional countries besides just Germany? That's all for me.
Christian Spieler: Yes, thank you for the question. Market environment 2026, I would characterize in short as very different from the second half of 2025. What 2025 second half made it a really rare stretch of a market environment was the consistently higher volatility, implied price volatility versus the actual realized volatility. Specifically in the maturity segment of the products that we offer. That obviously for us being largely buyers of optionality led to us buying at the high price implied volatility and hedging at the lower realized volatility, which caused some of the issues in our trading result in the second half. That again is a very rare environment and over the years to observe. And if we now look at 2026, we are in a completely different environment. It's been very different. Like, high level, realized vol has been above implied vol. And we're seeing a very active market. So it's a market environment that suits us. That being said, our outlook is it's too early to comment on an outlook for the performance for H1 in trading per se because obviously we only had about 5 or 6 weeks into the new year under our belt. But -- and it also depends, like results depend very much on how flows materialize from the client side et cetera. But we're seeing an overall what I would call healthy market environment 2026. A question of the RFB business. So I give two answers. So one is, we're expecting to go live in Germany in Q2 2026. And yes, we do have a list of further countries where we intend to roll this out. One major country that's on our list is Italy.
Operator: [Operator Instructions] The next question comes from the line of [ Thomas Paul ] from [ AVP ].
Unknown Analyst: I just have one question on your pension savings business. Did I understand this right? This was slowed down by the merger -- this is probably Helvetia Baloise? And will this pick up now in 2026 or 2027 meaningfully?
Hans Widler: Thanks a lot, Mr. Paul, for your question. I mean we are not commenting on single insurance partners or on single partner names itself from that perspective. But with regards to the contributions, the reduction compared with 2024 is two-fold. On one side, we had some extraordinary effects in revenues in 2024. On the other side, we benefited still from the launch of new so-called contingencies, from new insurance policy sets. We do expect that to continue. With regards to the timing, we are to some extent also dependent on the respective partner activities. But it's clearly a business activity that is close to Leonteq's DNA and that we will continue to invest, also with potential new insurance partners that we target.
Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Dominik Ruggli for any closing remarks.
Dominik Ruggli: So thank you everyone for attending the conference and the interesting debate. We look forward to speaking and meeting with many of you in the coming days and weeks. And we wish you all a very good day. Thank you.