Earnings Call: H2 2019

Feb 13, 2020

Ladies and gentlemen, welcome to the Leontec Full Year 2019 Results Conference Call. I am Sandra, the Chorus Call operator. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Dominic Rugli, Head of Investor Relations and Communication of Leontic. Please go ahead. Good morning, everyone, and welcome to the press conference of Leontic's full year 2019 results. The presentation material can be found in the Investor Relations section of our website since 7 a. M. Of this morning. Today, we also published our entire annual report including the audited consolidated financial statements and the compensation report for 2019. A replay of this press conference will be available today in the afternoon. Here with me today are Chief Executive Officer, Lukas Hoefflin and Deputy CEO and Chief Financial Officer, Marco Amato. Lucas will start the presentation with an overview of our ongoing business transformation over the past 24 months and provide you with an update on the progress of Leontic's key strategic initiatives. Marco Amato will then take over and discuss the financial performance of the full year 2019. Lucas will then conclude today's presentation with a brief summary and outlook of Leontec's positions stepping into the coming years. The presentation will last about 45 minutes, after which we are happy to take your questions. It's now my pleasure to give our CEO, Luka Zuffelin the floor. Thank you, Dominik. Morning, ladies and gentlemen, your shareholders, analysts and media representatives. I'm here in front of you today to share the Onpek's journey of the past 2 years. If you recall in 2018, we shared with you our plans regarding the journey we were embarking on as a company. A journey to overcome certain limitations we faced and to grow and transform our business. At today's press conference, we will highlight to you the progress we have made through a clear and focused execution of our strategic priorities. We will of course also update you on how business is transforming and present to you how Liontech performed financially during these 2 years and in particular 2019. Let me start the presentation on page 4 by showing you our 24 months progress and how we have reestablished a solid financial track record throughout 2018 2019. As you can see illustrated in the top left chart, our revenue base increased on a half yearly basis in 2019 compared to 2016 2017. On a full year basis, this means that our annual revenue base has increased from CHF 217,000,000 to 215,000,000 range in 2016 2017 to CHF256,000,000 to CHF282,000,000 revenue range in 20 18 2019. Looking at our profitability shown in the top right hand chart, we have demonstrated our resilience also in difficult market environments over the past four half years. As I said 1 year ago, there will always be paid for half years and half years with reduced earnings, but our focus is clearly to manage Gliontech as a profitable business and to contain in that regard our cost basis. This focus has also had a strong effect on our shareholders' equity, which increased by close to 60% to CHF 663,000,000 at year end 2019 compared to year end 2017. Along with our solid financial track record, we have transformed as a company on many fronts over this time. I'd like to highlight a few of these accomplishments on Page 5. Firstly, our newly installed leadership team has extensive experience in the financial service sector and has successfully managed the company turn over the past years. We have also improved our corporate governance framework and strengthened the independence, skills and diversity of our Board of Directors and its committees. In this context, Liontech announced today that Liontech's Vice Chairman, Hans Isler will not stand for reelection at the Annual General Meeting in March 2020. And Leonteck also announced that the Board of Directors has proposed that Philippe Weber as new member of the Board fall action at the 2020 which will take place at the end of March. Philippe Weber is Chairman and Managing Partner at Nidra Kraft and Frei in Zurich. And subject to his election, the Board intends to appoint him as Leontecs' new Vice Chairman. Goes without saying that Hans Heesler has been an outstanding member and contributor to Leontag's progress and development in the last 8 years. Hans joined Leontag's Board in summer 2012. And his debt is in terms of the long term independence of the Board to be seen, as you know, in particular in the with regard to U. S. Representatives and proximal shareholdings, board members who are considered independent lose their independence after a maximum period of 9 years And Hans thereby was now slightly above 8 years and he's step in that regard. As said, has that background and we at the Onpek are very grateful to his outstanding contributions in the last 8 years. As our company has grown, we have addressed the impending constraints in scalability of capital, platform and partners in order to transform our business model and position Leontec as a globally recognized counterparty for structured investment products. Despite the challenging market environment, increased competitive landscape and targeted investments made by us, As I said before, we have established a solid and profitable performance. I mentioned it before, we have also strengthened our capital basis by 59% to CHF663 1,000,000 at the end of 2019 compared to 2 years ago. Of course, this is also a function of our shareholder support, which was very clearly and strongly demonstrated in summer 2018 when we did the rights issue and had the pickup of the shareholder rights in excess of 99%. Over the same period of 24 months, the deferred fee income increased by 133 percent to CHF 107,000,000. This amount reflects revenues, which we have already generated, but which in line with our prudent accounting approach we only recognize in future periods. But of course, these are revenues generated and we believe it is an important line item to look at in addition to our shareholders' equity when you assess the company's capital and solidity standing. In 2019, we also obtained 2 investment grade ratings from A. F. H. Ratings who assigned us a rating of BBB- with positive outlook and B. From JCR, Japan Credit Rating who assigned us a rating of BBB plus with a stable outlook underlines recognized counterparty for structured investment products. We also defined in 20 19 our corporate culture and strengthened the framework with a new vision, mission statements and corporate values. These achievements have been vital to Leontec's transformation and lay an important basis we believe for our further developments in the coming years. On to the next slide. Our business scalability has 4 key impact areas: scalability of platform, scalability of issuance, scalability of hedging, scalability of distribution. I'd like to briefly spend some time on each one of them. Platform scalability is of course the starting point for further business growth for the OnTeq and accordingly will continue to center around the enablement of rapid and low cost securitization through automation by continuing to upgrade our platform by using the latest technology. We have progressed with leading hard and software providers in that regard. So to eventually make our entire white label service offering, for example, available on the cloud, it's very important to some of our partners who as you know are often among too big to fail institutions in their respective countries and to obviously have very stringent contingency plan requirements and something we obviously want to proactively support them with. Issuance scalability, we are making efforts in that regard as we are expanding our issuance model by enhancing cooperation with existing platform partners, we absolutely aim to increase the number of white label issuance partners in the foreseeable future. And finally, we have opened up in 2019 our platform to third party issuers, which is enhancing our multi issuer offering even further, very comparable to a typical brokerage model. On the hedging scalability as you all have heard of us before, the implementation of our smart hedging issuance platform in ship is absolutely crucial with regards to our targets to reduce our own volume of hedging exposure. I'll refer to that a bit later, but we are pleased about the progress. The 4th scalable pillar is the distribution part where we target to service banks and asset managers to distribute into their own and captive channels. To do this, we have developed our new digital marketplace, which we call Linx. Through all of these measures, we are essentially addressing the reality of our industry, which is that we are active in a business, which is more and more becoming a volume driven market. And as you have seen with many other industry before, higher volume is a reflection of maybe in general a bigger market, but usually goes hand in hand with increased pressures on margin on the need for the market participants on the provider side to automate and to differentiate in the long term about on costs and cost management. We believe it is an opportunity for us this market environment, but it's very clearly a necessity for us to continue investing. So I can now draw your attention to Slide 7 where I'd like to detail in more detail the market. The left hand chart shows that the global wells showed by many statistics has continued to grow during the last 2 years. Progress in terms of growth has been quite impressive with 12% increase of wealth globally since 2016. Of course, this has been tremendously helped particularly last year by generally benign market environment and to some extent support from global central banks. It's obviously something which in a given year can also reduce, but I think the tendency there is clear. What we are also seeing is that market turnover on structural products is increasing in Switzerland. We show you the Swiss statistics because it's one of the best researched. We also have data available from the Swiss National Bank, which obviously gets central seed in data from all the custodians in Switzerland. And again, we see a decent growth there. What however is not said on any of the sites is that the provider of structured products in the context of what I've just described before are seeing a more severe market environment. It's something which we have expected for the last 2 years and which we have highlighted to you already in 2018. If you turn now to the next Page 8, you will see our illustrated equation for creating long term shareholder value and sustainable growth in this sort of market environment. We have defined 3 areas which will help us to reach it. 1st, we will enhance our scalability on all levels mentioned before, which essentially addresses the development of the Structural Products business into a volume driven market environment and should hopefully result for us in a growing revenue base. Secondly, we will continue being very focused on improving our profitability through investing in key projects, while optimizing our cost base hopefully result in growing net profits. Which should hopefully result in growing net profits. And thirdly, by continuing to strengthen our absolute capital base, we will position ourselves unquestionably such that with regard to any counterparty we face, be it a client, a partner or a hedging counterparty, we are in every regard a very serious counterparty they would be delighted to do business with. My colleague Mark Amato will later show to you a change in the Swiss regulatory regime with regard to security firms. Our minimum capital expectations by regulators have changed significantly since the beginning of the year. We are now subject to a minimum capital level of CHF20 1,000,000 that compares to shareholders' equity of CHF663 1,000,000. Despite all of this, we will continue to increase our absolute capital levels in the context of the necessity as I just said to become unquestionably a counterparty of choice for any of our clients. I'd like now to spend a few minutes on updating you on key initiatives, where in aggregate in the last 2 years we have spent about €40,000,000 in terms of hard cash investments. On Page 10, you can see our marketplace for structured investment solutions as it's taking shape. Throughout 2019, this digital marketplace developed into what today we call links and provides neon tech clients digital access to one of the largest structural product universes available. This is represented in the center of the graphic. Ings was developed by Leontec in house to serve as a one stop shop and provides Leontec's clients external access to applications, services and market and product data that were previously only available internally. Our clients can choose from a variety of issues on our platform, which are represented on the left hand side of the slide. Those are our sell side partners, which we can offer services along the entire value chain from issuance to distribution to life cycle management of their own white labeled products. Importantly, as I said before, we further opened up our offering for 3rd party issue of 13 at the time. This is a very big service extension for our clients. Until the beginning of 2019, we could offer 10 credit party counterparty risks to a client who wanted to buy a structured product. Today, a client can choose from a selection of 23 counterparties. On top of the slide in the gray area, you see how Ship is connected to links by providing best option prices for selected number of products and issuers. Further development of this marketplace will continue to open up new opportunities for us, our partners and our clients. And again, if we just go back to the slide please, 2019 probably in the future when we look back will be the year of transformation for LEO Antec. I mentioned the white labeling issuance partner which has more than doubled in terms of numbers. We today have on the ship side not just the opportunity to deliver for the future, but the proof that ship works. I'll come to that later. And if you just look on the right hand side and you imagine you are on the buy side, so you are representative of a private bank through links through the Leontec automated one stop shop. You essentially can pick and choose from the issue of your choice. And we as the on tech will give you the comfort that you will get the best option in the price not because the OnTeq has the best price, but because we will ask the market and you then choose the options of your choice. On to the next Slide 11. Scalability is a big word. Many people use it, but how do you measure it? Hindsight, it's not that difficult You actually look at the few key numerics. And we thought it for the first time relevant to show you some of the in house management tracking statistics we look at very closely. First of all, the number of products we issue is obviously a very good and direct linkage to the client activity. And what we see here is that on average the number of products issued has increased by 21% each single year. Turnover, again a good metric has increased by 13% on average per year and reached a new record of just above CHF 30,000,000,000 in 2019. In 2019, we performed roughly 164,000 transactions compared to only 67,000 in 2016. It might not sound such a large number, but I assure you processing 100,000 more transactions on our platform and we talk here about often complex products requires an entirely different IT and operating system than we had in 2016. The way we have invested in the last few years, I feel very confident that the numbers could easily double, triple. And with our current platform, we could stomach such further growth. That's obviously absolutely critical if we assume margin continues to decrease. And as a result, in order to increase the absolute revenue base, you therefore must increase the number of transactions. Finally, our platform assets, which is a certain a certain indicator for future activity have also solidly increased over the years reaching a new record of CHF 15,000,000,000 at the end of and implementing state of the art infrastructure and the development environment in house that allows for the management of in house and third party solutions in a fast and resilient way. We have added 2 cloud solutions to our offering, which today already improves flexibility of our infrastructure capacity. And of course, we have made significant project progress on CHIP, which you can see in more detail on the next page. CHIP as a collection stands for Smart Hedging Insurance Platform, which is designed to reduce hedging exposure by offering the Ontax issuance partners the opportunity to enter into hedging transactions for their issued products with external hedging partners. Before I spoke briefly about the appeal of ship to the buy side. So a private bank who wants to pick a certain issue, but wants to have the comfort that they get best price on the option element. What we talk here about is that cheap of course also brings a lot of advantages to our white label powers. Concretely as an example, Raiffeisen until about 2 months ago whenever they issued a structured product had only the choice to hedge with Leontec. Today as we are speaking, Wi Fi has on any hedge it does As long as the underlying payoff is already on the ship platform, the choice to transact with Leontec, but also the alternative to transact with another ship hedging counterparty. We commenced development in 2018. We immediately declared ships by far highest priority project of the firm. And accordingly, I'm not entirely surprised to be able to say today that we have made good progress since then. What we simply did not know in 2018 was whether ship from a technology point of view would work. It is again a quite complex technology project in terms of execution. You have to imagine that the client who needs best option price once that best option price within a matter of seconds. So it's not just about getting a price from a hedging counterparties, say, a U. S. Investment bank, but it's about getting the price instantly. And we thought for many reasons it was possible, but as we all know visions are not never reality. Today I can tell you the vision is reality, ShipWorks. We have by now tested the platform well. And we have 6 leading investment banks connected to the platform and actually contributing quotes. Whenever we onboard a counterparty, we put them for a certain period in a data testing mode, simply because when we go live we do not want to have breakage in terms of OTC confirmations. Ship is not just about getting a good price, but it's obviously about the entire value chain of the product. So once hedged you need a proper back office function OTC confirmation that's fully automated. And of course, eventually the client might want to sell back the underlying structural product. So you need a well functioning secondary market activity. So again, we put new counterparties into a beta testing mode. 3 of them are out of this mode and fully live. 3 are in the beta testing mode. They are daily providing quotes, but we are not yet if you want actively trading with them until that test phase is over. We however expect that now to be a matter in some instances of weeks, another instance of a couple of months until the 6 counterparties are fully up and live. In addition, we have beyond tech as a hedging counterparties on ship. And with then 7 counterparties fully live, we will be able to declare the on pack that ship is now fully up and running. Time line will bring us closer to somewhat that's in line with the time line we have guided you on during the last 2 years. Importantly, in 2019 and you would not see that in the ship statistics per se, but it's obviously very critical for our future development. We have now also enabled issuance partners notably Raiffeisen to become a direct ship counterparty. In December, we had the 1st trade where Raiffeisen entered into a ship transaction, did not hedge with Liontech and the OTC transaction and settlement happens directly between Raiffeisen and the 3rd party hedging company. This is very important for LEOMTECH because that was the first time in our history that we enabled the structure product issuance for a partner, but we did not use our balance sheet in between. And clearly, we will see much more of these transactions in the future. The bottom right chart shows you the progress Chip has made throughout 2019 with both turnover and number of trades doubling from the first to the second half of the year. In the full year 2019, we The majority The majority of the trades were still hedged by the OnTeq as a function of the OnTeq quoting the best option price for their respective transactions. And sometimes ask whether that's a problem. The answer is absolutely not. Management has been focused in the last 18 months on getting ship up and running. Neon tech can very easily increase the number of cheap transaction not hedged by Liontech. That's a direct function of Liontech's competitiveness on the trading side. So I could today decide that tomorrow all our shippable transactions are no longer hedged. By Lyondtek you decrease the pricing competitiveness of the Ontech options and you will base the way a ship works, you always 100% of the trades hedged by that counterpart who shows the best price. It's however for us important in this early stage of the life of ships that we show to clients that ship generally also brings an added value to them. So for a certain transformation period, Leon take on purpose is also quite aggressive on the ship platform because of course you do not want to leave people the inflation they ship even though it's now a competitive marketplace leads to less good pricing for clients. We also want to ensure that our sheep hedging counterparties understands that they will only win a sheep trade if they are very sharp on the pricing side. So in summary, I'm happy to reconfirm what we communicated earlier, which is that ship will be fully operational by mid-twenty 20. Moving on to Slide 13, I'd like to take a moment to underline the OnTeq's local commitments to our clients. We are servicing, as you know, our clients along the entire life cycle of structured products and we are geographically present where our clients are located. So far, we have a footprint in Europe and Asia, But we have out of those local offerings of course certain regional growth which we can cover from ancillary offices. So for example, we have a business in Italy which has seen nice and good progress in the last 18 months. We have covered that business out of the U. K, which was until recently very easy to do, will be less so in the future. And we have obviously also had a certain activity in the Middle East. In view of some macroeconomic changes, particularly Brexit in the U. K, but also in view of the good growth we have seen of our business in those locations, We have decided to open 2 new offices in both Milano and Dubai in the course of the year. We will accordingly expand our European onshore offering and also open up the presence in the Middle East. Of course, this is all subject to regulatory approvals. And in terms of future reporting for the time being, we would include Middle East and Asia. Once Middle East would be out of the new startup mode, we would possibly reconsider showing it separately. But in transparency for now, we would show it within Asia. Finally, we also have as you know we had it in Switzerland which is facing there's a constraint our clients every day and that's the low interest rate environment. We had now here for 10 years either 0 or negative interest rates in Switzerland and in particular in the long term saving plan area, which we cover through our Insurance and Wealth Planning Solutions division, we are working on what we believe to be a very innovative new concept, which we believe would allow clients to address at our interest rate which clients face. 2018 with IWPS, we had mentioned to you that we are reassessing all our options. We have reassessed all our options. We are very positive about the future prospects of this business. And as I said, we have a certain new product offering, which we will try to test in the market. We select the clients in the coming months and as if and when we see that again addition could become reality, we would update you a bit more probably the first time in the first half twenty twenty. With that, I would like to ask our CFO to join. Marco? Thank you, Lucas. Also good morning and warm welcome to all participants from my side. I'm pleased to present to you Lantek's financial performance for 2019. Starting on page 15, I would like to give you a brief overview of our financial highlights for 2019. Following a subdued start to the year, we had a solid performance with a net profit of CHF 62,700,000 in 2019 amidst the challenging market environment. This compares with the record results of $91,500,000 that Leontec achieved in 2018. Our earnings per share was CHF3.35 which was down from CHF5.40 in 2018. Total operating income amounted to CHF256,200,000. This was driven by a relatively stable net fee income of CHF264 million and the absence of contributions from hedging activities. We maintained a disciplined cost management with a cost base at CHF 191,100,000 despite making investments in headcount growth and key strategic initiatives throughout the year. We also maintained a strong capital position with a total BIS eligible capital of CHF 6 48,100,000 and a total capital ratio of 21.1%. Furthermore, the Board of Directors has decided to initiate a new phase of conservative dividend policy. For the financial year 2019, we will propose to shareholders a total distribution of $0.50 per share. Let me now elaborate more on our top line on the next page of the presentation. Lemtek's total operating income is mainly driven by 2 line items. First, we have the net fee income, which results from issuing and distributing structured products. This is displayed as orange bar chart on the graph on page 16. Then there is the net trading result, which derives from hedging structure product and our refinancing activities. This is marked as the dark gray bar chart. Let's now look at how these two items performed in the first and second half of twenty nineteen compared to the prior year. As already mentioned during our half year twenty nineteen announcement, LEMTECH experienced a subdued start to 2019. Economic revenues saw a short decline to €8,100,000 in January 2019 compared to €26,100,000 in January 2018. The months following January 2019 saw a recovery in client demand and overall we were able to deliver a solid performance during the 1st 6 months of 2019. In the second half year twenty nineteen, we were able to grow Elentek's net fee income by 14% to $144,000,000 compared to the second half of twenty eighteen. This was driven by 2 effects. First, we saw an increase of 19% in turnover in our Investment Solutions business line, which compensated for a decrease in margin to 80 bps. 2nd, also our Insurance and Wealth Planning Solutions segment had a positive contribution year over year, which was primarily driven by a one off effect of €9,700,000 euros On the trading income line, we distinguish the contribution from hedging activities on the one hand and the contribution from the Treasury result. As you know, our hedging strategy is to hold a structurally long volatility position. Especially in market shock scenarios, we tend to earn positive trading income, which we consider as a natural hedge to our client revenues. This was the case for the second half of twenty eighteen, where trading income amounted to €25,000,000 Now in the second half of twenty nineteen market volatility was reduced and there was no major equity market disruptions leading to a €13,000,000 negative contribution from hedging activity in the second half of twenty nineteen compared to a positive contribution of €38,000,000 in the prior year period. Analyzing the second element, the treasury result, LEMTECH recorded an improvement of $15,500,000 from its investment activities in H2 2019. As a result of negative hedging and positive treasury result, the net trading result was negative €11,000,000 in the second half of twenty nineteen compared to a positive result of €35,000,000 in the same period in 2018. Moving on to Page 17, let's look at Leantec's cost base. Despite and as mentioned by Lukas significant investments of approximately CHF 40,000,000 into key initiatives such as Lynx, the ship platform, but also our AMC gateway, LEMTECH has continued to maintain a stable cost base over the past 2 years. Total operating expenses amounted to $94,000,000 in H1 and CHF97,000,000 in H2 2019. For the full year, our cost base increased only by 1% to CHF 191,000,000 and we were able to be below our guidance of CHF200,000,000 for the full year. The introduction of IFRS 16 leases resulted in a decrease of Lernpax operating expenses of €10,700,000 but caused the increase in depreciation in the amount of 9,600,000. In order to further optimize our cost base, we have also started to assess options to nearshore certain processes and functions also in light of future growth. Let's look at page 18. Over the past years, Lendec has built up a strong shareholders' equity with the successful completion of the capital increase in August 2018, obtaining net proceeds of CHF 118,000,000 and retained earnings amounting to CHF154 1,000,000 from 2018 2019 retained earnings. Our shareholders' equity totaled $662,500,000 at the end of 2019, which is an increase of 58% compared to end of 2017. During the same period, we also built up our deferred fee income, which totaled €107,000,000 at the end of 2019 compared to €46,000,000 at the end of 2017. These combined effects have allowed us to attain a total of CHF 769,000,000. On the back of this and in consideration of the strategic process achieved over the last 2 years, the Board of Directors has decided to launch a new phase of conservative dividend policy. As mentioned, for the financial year 2019, Lendtec will propose to its shareholders a total distribution of $0.50 per share. In line with the new company law in Switzerland, which is effective as of January 2020, the distribution will be paid in equal amounts of the retained earnings and reserves from capital distribution contribution. Looking now at page 19, you will see the composition of our balance sheet. Our balance sheet is driven by 2 factors. First, we issued LEMTECH owned structured products, which are recognized on the liability side. To hedge these liabilities, we invest approximately half of the proceeds from the own issuance into a conservative investment portfolio and the other half into hedging derivatives positions such as equities and indices. Likewise, as a result of the issuance partner business, we mostly hedge for our partners their structured product exposure by purchasing into either the underlying securities of the products or options. In 2019, our total assets decreased by 15% to CHF 19,100,000,000 The decrease in both assets and liabilities was primarily driven by a reduction in positive and negative replacement values of derivative financial instruments coming out of calmer equity markets. To sum up, we have a solid balance sheet with a low risk profile and a leverage ratio of 7.4%. Our regulatory capital on page 20 shows that Leontay maintained its strong capital position. You can see on the left chart that our platform assets increased significantly by 24% from CHF11.9 billion in December 2018 to CHF14.7 billion in December 2019. In turn, our risk weighted assets also increased but only by 10% from CHF2.8 billion to CHF3.1 billion between December 2018 December 2019. As a result of our strong capital position with total BIS eligible capital of CHF648,000,000 we reported a total capital ratio of 21 0.1% at year end. As I wrap up the discussion of Laemtech's financial performance, let me give you a brief update on Laemtech's financial targets for 2020 on Page 21. In light of the continued challenging trading environment, particularly with regards to market volatility, we expect to achieve total operating income in the range of CHF270,000,000 to CHF300,000,000 for 2020. The main drivers for the targeted revenue growth will be LINKS, 3rd party issuers, fund derivatives, actively managed certificates, the European issuance program as well as Lemtech's ZEX listing. Furthermore, we expect total operating expenses of approximately CHF 200,000,000 for the year 2020 similar to the last year. I would like to conclude my presentation with a regulatory update on slide 22, which Luca already anticipated. As of January as of 1st January 2020, a new capital framework applies to LEMTECH as a result of the Financial Institution Act that entered into force. This act essentially regulates the licensing requirements for certain financial institutions, including security dealers, which are now newly labeled as securities firms. For the application of capital requirements, the new regime distinguishes between account holding and non account holding securities firms. Securities firms which do not hold accounts for clients are no longer subject to the capital adequacy ordinance, but not permanently hold capital of at least 1 quarter of the fixed costs of the last annual financial statements, but no more than CHF20 1,000,000. LEMTECH does not hold client accounts and thus falls under the new regulatory regime. In this context, I would like to point out that since our inception in 2007, we have operated under securities dealers license and have significantly exceeded the capital requirements for each reporting year in the past. Since the 1st January 2020, Lemtech is operating as a securities firm and adhered to the new capital framework and we will report capital figures under the new framework for the first time when we announce our half year results 2020. With regards to our capital planning in the future, LendTech will continue to operate under the existing risk management framework. At the same time, we'll continue to reinforce our capital base and we'll pursue a conservative dividend policy for the foreseeable future. With that, I will hand back to Lukas. Thank you, Marco. Let me conclude today's presentation with a brief summary and outlook on Page 25. Johntag's full year 2019 results are evidence that we can deliver solid performance also in the context of a difficult market environment and increased competitive landscape. Over the past years, we have increased our annual revenue base from roughly 207215,000,000 to 260,000,000 to 280,000,000 during the last 2 years. We've increased the sum of our shareholders' equity and deferred income to approximately CHF 770,000,000 We have renegotiated a new dividend phase, clearly a conservative one. And accordingly, the Board of Directors will propose a payment of €0.50 per share at the taking place at the end of March. With regards to our outlook, we expect CHIP to be fully operational by mid of this year. We are planning to open 2 new offices in the course of 2020 in Milano and Dubai. We target for 2020 a total operating income of between CHF 270,000,000 to CHF 300 million. That's a reduction from our previous guidance of approximately CHF 300,000,000 and we expect approximately CHF 200,000,000 in total operating expenses very much in line with what we expected before. But of course, as we have revised the range of the revenue guidance, the cost income ratio which you get by dividing total costs by total expected revenues is also now more variable than it was before. We will continue to focus on our cost management and we are considering options to nearshore certain processes and functions to further optimize our cost base. Lastly, we will retain our priority of strengthening our absolute capital base and investing into future opportunities. In conclusion, I'm pleased to be able to say that BioNTech has never stood stronger and we feel that we are well positioned for the future. Thank you very much for your attention. I have a couple of questions. First, maybe if you, Marco, could again explain me a little bit the moving parts on the trading income line, particularly, let's say, the €1,000,000 in H €1,000,000 in H2 and the trading income in Insurance and Wealth Planning Solutions. And how shall we think about this going forward? I think I record or remember that you once said you have reduced your volatility exposure in your trading book. Now you have at least in Investment Solutions quite a strongly negative trading result. And yes, if you could just explain how it came there and how shall we think about this going forward into 20 20? And particularly with regards to your 2020 targets, what were your assumptions when giving this range? I think the moving part between €270,000,000 €300,000,000 is probably the trading income. Then the second question is about the capital and dividend policy. Obviously, now the previous capital regime is more or less obsolete. How shall we think about your capital? And what is your ideal capital going forward? And what is then triggering further dividend payments or maybe restricting further dividend payments? And then the third question is about the third question is on SHIP. If you just could give me an indication what are now the key bottlenecks for increasing the turnover on ship? Is it the number of issuance partners which are willing to allow their product for ship. Obviously, now you have quite a decent number of hedging partners. But what needs to happen now that the turnover increases on ship, respectively, what could happen that it will not increase? Yes. And then the 4th question is about this 3rd party issuance. What is there the difference between the modus how you deal with this 3rd party issuers versus your partner or issuance partners. And I think I'll leave it. Thanks, Daniel. I'll probably take the first question regarding trading and then hand over to Lukas for the capital question, Siip, and if you want to take also the 3rd party issue question. So thanks for the questions, Daniel. I think on the trading side, as we always stated, we have a structurally long volatility position in our books that specifically true for our Investment Solutions division. We have seen a negative contribution from hedging contribution in the second half year 2019, which even though was not significantly worse than what we have seen in H1 2017. So I would say given the low volatility environment in the second half year twenty nineteen, I would say the result doesn't surprise us. You correctly stated that we have obviously 2 different divisions. 1 is the Investment Solutions where we have a structurally long vol position. With regards to trading results in the IWPS space that's obviously more linked to interest rates and some opportunities that we have anticipated there. As such, we had a positive contribution from the trading results in the IWPS space. With regard to 2020 targets, as mentioned, we have specified targets from previously approximately €300,000,000 to €270,000,000 to €300,000,000 and the reason is exactly the trading results and the market volatility environment, which we have seen in the second half year twenty nineteen and which we continue to see especially now in January, February with good environment for equity markets, but a low volatility environment. So anticipating that this could continue for the year 2020, we have been more specific and say, if we continue to have such an environment, we might not make a lot of money on the trading side. It might be even a nil. It might be even slight negative. And as such, we would anticipate a top line of rather €270,000,000 to €300,000,000 Should the environment be more favorable for our trading environment or for our trading books, we could still see the EUR 300,000,000 as realistic target for the year 2020. If I could maybe just add to the to what Marco said and to your question, how do you need to think about this volatility position? First of all, we don't get this position by coincidence. Clients when they typically sell our structure product buy from our structure products are selling to us volatility. We could obviously then go and sell it into the market. Ultimately, the position is mainly on the books because we have now seen in the last 13 years that whenever volatility is very high, client activity decreases. Might have short term effects, of course, you say the big crisis, then you have short term a lot of activity, but then it comes down. But this long volatility position structurally speaking is hedging an environment where clients will be much less active. We have shown you clearly in the second half twenty eighteen that it works, But it comes at the price. And the price is that when markets are like last year, you essentially have a position with hindsight benefit you should never have had. To take an analogy, we could have said our equity say average €650,000,000 of the year we should have put in the world world MSI index and we would have had 20% return on equity. Hindsight, it's obviously easy to say that. We feel comfortable with that position. However, knowing and that's something investors need to understand, if you have a 2020, which on the volatility side is like 2019 and we had many phases where volatility was a historic low. We will structurally lose money on that position. It will be offset by increased client activity. So it's not necessarily only bad news for us, but it explains the range as Marco said. Now with regard to your second question, I was expecting that question to come as the first and I'm pleased to see that it wasn't the first. It's a very good question. And I guess it's in the context of this new regulatory regime and obvious one to ask. What would trigger us or the Board to become a little bit more proactive and change the dividend policy? Let me first start by saying we have already come with positive news. We had communicated that for the foreseeable future, we do not see any dividend at all. And that policy has been changed to a conservative dividend stance. But in some way, that's the beginning hopefully of a certain journey. And I hope it is seen by our shareholders as a shareholder friendly journey. As I said before, we are not as the on take completely working in a vacuum. We are working with the largest counterparties in the financial industries you can think of, whether it's on the hedging side, whether it's on the client side. As you know, we do not bank with end clients. We do business with intermediaries, but these are the world's largest asset managers, private banks, pension funds, insurance companies. And for them a very solid counterparty in absolute terms is very important. And our journey to continue strengthening therefore our equity base has to have absolute priorities. We also since the year are now rated by 2 rating agencies and of course for them, solidity of capital and also the absolute capital basis is an important factor when it comes to considerations of rating. Finally, the highest that could be have in the firm and the one we must always worry the most about is the fact that clients trusted us with their savings. And from a client's point of view, you just need to be sure that Beyond Tech will always be very safe. It is a conservative approach. We recognize that, but it's very much in line with the traditions of Switzerland. Take any of the long standing private banking partnerships. As a general rule, these institutions are all well maybe over capitalized, but in the long run it has served them very well and that's certainly a strategy the OnDeck will continue. We started with 10,000,000 shareholders' equity in 2,007. We saw the financial crisis coming and we didn't see it coming, but when it came we saw the effects it can have. And we know how important it is to save in good times for more volatile times. And that conservative management and broad approach will absolute equity basis than we have today. And absolute equity basis than we have today. And secondly, certainly also progress on the strategic projects including in partnership. We obviously should always look at the absolute capital base in the context of our risk profile on the balance sheet and to the extent we do less trades, expanding our balance sheet for those trades. To that extent, we also need less equity. But I'd nevertheless like to say it's the beginning of a new journey and it's a clear message to shareholders that we will continue pursuing a dividend, a conservative dividend policy. So please do not factor in now some dividend ratios, which we wouldn't see as at World and Management. Chip what is the bottleneck? I would say only one thing and that's time. Half a year ago, I would have said final proof of technology working. And for me that proof is behind us. It's now time. It's getting the 3 additional data testing ship counterpart is on board. And it's letting time make sure that all the market participants showed a sort of competitive prices we expect them to see. It's something we see as a very gradually improving picture. So I believe more or less I would almost say every week, but maybe given some weekly volatility I should say every month, but every month we see progress. And every month we see the progress being at least at our expectations if not above. We'll give you an update in 6 months and can then tell you what the first half year for. What is the difference as the final question about third party issuers and our worldwide paper partners. In terms of Leontec service, there is a big difference because white paper partners are enabled by Leontec. They would outsource to us part of the full value chain of issuing, settling, trading and market making a structure product whereas a third party issuer essentially connects to the extent we onboard solid third party issuers who are at our levels and standards in terms of the servicing. Ideally, there is no difference. That's obviously very much in line with our vision to make LEO. On tech a one stop shop and essential marketplace for our clients when it comes to structured product purchases. About your 2 offices opening, I guess it's a mix of both, but maybe I would like to have some kind of colors. Are you more following your existing clients or are you conquering new markets? Thank you for the question. It's definitely more of the second part. We believe we have a big market opportunities in these markets to the extent we are local. In Italy, I think proximity to clients is a very good thing. That's generally obviously true for all the markets. But I think Italy as a structured product market when it comes to certain payoffs to certain clients behavior is a bit particular and it's certain these are local also when it comes to being day to day in touch with the large distribution houses. In terms of Dubai, we are not just opening office, but we are already now working on the Sharia compliant offering and that would open entirely new distribution channels. We however go into these markets with the comfort of knowing that our current client base would probably offset the increased investments we have to do in order to become local. Okay. There's no more there's one more question in the room and then we move to the participants on the phone. Thank you very much. Kito Frasondel from Independent Credit attracting even more counterparties also with a view to enabling more diversity and diversification opportunities for your clients? And the second question with regard to Page 19, the liability side of your balance sheet. Could you comment on how you manage the liquidity requirements that go with the €2,900,000,000 in derivatives liabilities? Thank you. I'll take the first question and pass on to Marco for the balance sheet related questions. It's a very good question. We need to find as Leontec as the provider of the ship marketplace the right balance between getting good prices, but also ensuring that the market participants consider this an attractive market to be present in. So we had communicated from the very beginning that we would see 8 up to 8 counterparties on ship. Plus in addition, the on tech, the interest is higher than that. It took a bit of time to convince people, but we were very clear and transparent to potential markets participants at the beginning that it's a pre investment into something a bit unknown, but it would come at the benefit of a certain market participant protection once we have filled up the position. So essentially, once we have 8 positions, we would probably not add on additional counterparties unless they brought us for example hedging possibilities in a market where we wouldn't have access through the existing 8 counterparties. So I'll just take an example. We would have a counterparty who has, for specific in house reasons an angle to hedge specific market. In Asia, you would probably take them on for that specific market, but not necessarily for the entire marketplace. And again, that's driven by our belief, but also understanding that cheap business must not only be attractive for our buy side clients, but also for our sell side cheap hedging counterparties. They all need to be able to make a decent revenue stream out of that marketplace in order to invest, etcetera. Marco? With regards to the pension item, you obviously know that the net defined pension liability is a function of basically FTE, the conversion rate, the provider of the pension type. And we have seen a sharp decrease Sorry, not pensions, the liquidity requirement that goes with the negative market value of the derivatives? That is the question. How do you manage these liquidity requirements? The $2,900,000,000 you show up on the liability side. You would need to post collateral. And when we look at the assets, how much of these assets are earmarked as collateral for liabilities, negative market values? It's a very good question and because you put the variations of our structured product offering. First of all, you need to differentiate if we now really look at the mathematics of it. That's who the issue is. If Leontag is the issue, you obviously get liquidity upfront from your clients and you use some of the liquidity to then do the hedging respectively if you hedge through options to provide collateral to the counterparties. If however the issuer is a 3rd party, so say Raiffeisen, they would hedge with Viantech that's now the pre ship world and Viantech then hedges in the market. But there technically speaking what happens is that obviously you get collateral from your counterparty white label partner and that collateral then would be available to for example pass on to an OTC clear up with regard to clearing positions at the OTC market. We in terms therefore of the liquidity profile feel very confident. Our problem from a balance sheet point of view is the reverse. We are sitting on too much liquidity. We are swimming in liquidity and we have committed in context of what I said before to run this business from on a very conservative risk profile. Historically, the excess liquidity was put into a government bonds portfolio mainly of Germany and France as issues. There was a very, very expensive conservative approach. And we have changed that in so far that we now do a diversified investment portfolio where we are either in best in government, sub financials, in corporate issuers or financial issuers, target trading is single A or higher, we would occasionally have a BBB bond. But I guess the weighted average rating currently of those issuers is somewhere between A plus and AA- you would find more disclosure on in the annual report and the notes. Hello. This is again Daniel Ehrlichke from Octavian. Apologies, but I have to ask a couple of follow on questions on my previous questions. Maybe again on your 2020 revenue target, sorry to maybe annoy you with this question. But yes, I struggle a bit with this range. On one hand you're saying, yes, of course, the trading income is the swinging factor driving giving this range. But on the other hand, you're saying that basically trading should in normal environment offset eventual swings on the fee income side, but we still have like a €30,000,000 range of your operating income Can you just give me a little bit more sense what exactly needs to happen that you only reached €217,000,000 And what needs to happen that you reach the €300,000,000 on the trading and on the fee income side? Maybe I'll just quickly answer that one. First of all, the way we manage the business is that we don't differentiate internally, okay? We don't think one side of the revenues is good and the other is bad. Ultimately, we are measured against our performance top line costs and net profit. How it then breaks down with hindsight benefits we can show you, but it's not against what we measure ourselves. Very simply put, you have in specific times obviously an over effect of 1 or the other. And that part that we control the least is the macroeconomic volatility environment. It's very visible when you go on to page where we see the half year number development of the if you go on to Page 16, you might have half a year where the long volatility position and mind you it's not only that you have other effects, okay. But that's by far the biggest driver brings you €25,000,000 and you might have half a year like the second half last year where it costs €11,000,000 Now you could obviously have 2 half years like that. And what we would probably not do even though we have that half year is change completely our approach to the risk methodology. Had a low volatility environment in 2,000 second half twenty nineteen to then say I think markets have forever changed and now I sell my volatility position. And therefore, I will not suffer again. Probably the more logical thing to do is to say no. I was unlucky, but it's definitely not now the time to change it. Having said so, you could have the effect twice. So in a best case scenario, if you have twice a second half twenty eighteen scenario you have €50,000,000 more. The worst case scenario you have I just take the 4 years. By the way, there were other half years where the effect was even larger in the past 13 years. But if you take that as a benchmark, you could say worst case I lose €22,000,000 The €30,000,000 range is a 10% difference, okay. That wasn't the mathematically derived range. We just said we've seen a 10% range. We believe we get there. We as a management are benchmarked ideally against the €300,000,000 but we owe you full transparency. And if we have 3 weeks as we had at the beginning of the year with historically low volatilities for the rest of the year, euros 300,000,000 will be very challenging to reach. Never impossible because we will do whatever we can on the client serving size to offset it, but it will be very challenging. If you have a week like the last week of January in the context of the coronavirus market rate volatility increase, it's much easier. Volatility has since then come back again. And to be very honest, I've given up as a CEO to predict the market environment because to me at least equity markets in particular are behaving to a pattern, I don't under state. And we are sharing with you a bit that uncertainty by giving you a range. But it's a 10% range. It's not the mathematically derived number. I fully understand about the trading income, which you talked about. Yes, trading income was obviously negative in the 1st 3 weeks of January, now a bit more positive in the last week. How was the behavior of your clients on the fee income side in this period? Can you give us a little bit sense how it Yes. I think what as you know, last year, we came to you and we said after a difficult starting to the year, And then 6 months later we could give you the exact numbers. We have not given you any such message, which essentially means that business is doing the way it should behave. With regard to the trading there is also not really a point of discussing weeks because this can all change and it can change within a matter of days. The message here clearly to you is our guidance is now a range. If you want to budget the number from a conservative side, please use €270,000,000 If you want to be a little bit more bullish, you can go up to €300,000,000 We realize the management team try to deliver within that range. But I assure you if we could we would prefer being above €300,000,000 So if we are below it's not because we have not tried hard enough but because we had some things which we couldn't control maybe ourselves directly. Daniel, if you don't mind, also in the interest of time of all the participants, we'd like to go. We have a couple of questions from the call. Thank you. The first question from the phone comes from Andreas Broon from Credit Suisse. Please go ahead. Thanks for taking my questions. I have also a couple of them. First one, could you share any news regarding new cooperations with partners? 1 year ago, I remember that you stated that you are in late stage talks. Then my second question refers to Page 8 of the presentation. You're right about investments in key projects resulting in growth or in growing net profits. Could you share any details? Then my third question, how much is hedged at the moment by 3rd parties on chip? And if it is like only 1% as is my best guess, what ratio do you expect within the next 12 months? And then my last question, like how do you assure that 3rd party hatches will price the hedges on chip more attractively going forward in order that the LEOONTEC share decreases? Thanks. I was actually thank you very much. I was expecting the question on the pharmacist question number 2. So I'm not at 100% lottery gain this morning, but not entirely off. A very good question on the new partners. And we debated whether we should give you some sentence there, but then thought that we probably then create even more questions. We gave you as you correctly said, the update a year ago that we are in late stage discussions. And then 6 months ago, we said that the late stage discussions are advanced. And the absence of any communication today is not that those discussions have fallen off. But they are even more advanced. And when we are ready you will be informed, okay? But I said to a journalist a year ago, we will announce new partners. And I reassure you, we will announce new partners. But bear with us a little bit. Sometimes our timing does not entirely meet the timing of our future partners and we will have news, but we don't have news today. New projects, we have a variety of new projects. I maybe just give you one example. We have historically not offered structure product on fund there on fund underlines. Obviously from a client point of view this is a huge sector clients invest money into. We have hired a very good and promising team with a long standing experience from a friendly competitor. They joined us about 3 months ago and we had already early signs which are very positive and which suggest to us as we had assumed that we will see a good increase in business flow around fund derivatives. There are many more projects that we have now launched. Linx is another good example. But of course some of them show immediate impact like selling a structured product on a fund to a client shows you immediately the revenues and that are more strategic and take a bit more time like the LINKS Marco, would you like to add to any on that? I think Adev, it's very important that over the last year to 2 years we have significantly invested in our technology and platform. And as we expect now in 2020 to recapitalize and take profit out of these investments, particularly in LINKS, which will be rolled out or is being rolled out to our clients, the AMC Gateway, where we hopefully have really now a leading platform in the market, but also the European issuance program and obviously the opening of Milano and Dubai. These are all additional elements which will bring us our top line to the €270,000,000 to €300,000,000 On cheap, we have given you the number. We said about €1,000,000,000 of turnover was done on cheap. You know the other number about €30,000,000,000 you divide 1 by the other you get 2%, 3%. It's obviously not entirely reflective of the reality because SHIP was not run up and running on January 1, 2019. If you want to run those sort of statistics, I would never still recommend you do that from summer 2020 onwards because it's only when ship is up and running. But I'll nevertheless answer your question. So let's take as a rough assumption that a bit unclean approximation. You divide ship turnover by global turnover over the year. You had 3%. We say the majority is hedged by the Ontech. We don't go to that level of disclosure. But if you were to say 2 thirds, 1 third, you will not be completely off. Therefore, you could say within the facility plusminus of 1 percent was hedged externally. It's for me not the relevant number. What is relevant is the 3%. Any trade being on ship, I can easily make sure the Ontech doesn't win it. We obviously see where our ship counterpart is coming with hindsight benefits. It's something we also share with them. And on an annualized basis and you can therefore when you provide hedging prices more or less assume what you have to do in order to win or lose cheap trades. At this stage for us what was critical is make the technology work. That for me was not an obvious thing. I thought it was possible, but it was a risky project because it's one of these IT investments where you spend a lot of money and you only know that it works when the machine actually shows your screen which is not stuck anymore. And the second priority we have now is to make Ship a very good platform and we certainly want everyone to be competitive on it. So we as if you want as the sponsor of the ship platform obviously need to start by also having very good prices there as we undertake. The weekly and monthly developments as I said before Andreas absolutely go into the direction. New counterparties test it. They want to see that everything we have promised works. And they actually see it works. They start making money. And you know how this industry works. You see more flow and then you are willing to commit more and therefore you are maybe also on average a bit more price friendly. And accordingly the turnover of external parties increases. The On-site would be very happy if we had I'd say a number 20%, 25% ship ratio, key ratio and 75%, 80% is hedged by external parties. So we are very happy for them to win cheap trades and accordingly then also make the money which is inherent in the assumption that when you hedge you can also make a bit of money. We have one more question from Matti. The next question comes from Nimes Matti from UBS. Please go ahead. Yes. Good morning and thanks for taking my questions. I have 3 of them please. Firstly on the new capital framework predictable I suppose is the question. What does exactly mean that you continue operating under the current risk management firm work? Does that mean trading and position limits are unchanged? Similarly also counterparty credit risk approach unchanged? And also does this mean actually you continue reporting your capital ratios and RWAs? And I hear you regarding expectations from rating agents and clients to show solid stance in terms of balance sheet and capital and your willingness to keep increasing the absolute level of capital in the business. I'm just wondering what is the minimum level of capital ratio you would aim to maintain or you think clients would like you to maintain in this new regime? Also if you could be a little bit more specific in terms of how you see shareholder equity evolving going forward? So that is the first question a bit long winded. Second one is on dividend policy. Can you clarify what exactly you mean under conservative dividend policy? Is that a progressive dividend policy? Or what is it exactly? And thirdly, the $200,000,000 cost target for 2020, it's approximately 5% growth if I'm not mistaken. Is that mainly hiring? Or is that like for like higher budgeted compensation driven by expected revenue growth? Or is it G and A cost perhaps further investments? And also in the context of the $270,000,000 $300,000,000 revenue target, If you end up at the lower end of the revenue target, so $270,000,000 that would be around 5% growth in revenues. That would also mean not much in terms of positive operating jaws. Would you be aiming for a below €200,000,000 number on the cost side then, so a bit of savings? Thank you. Thank you very much, Matt. It's a lot of difficult questions you're asking this morning. First of all, let me just clarify. The new capital framework requires you to forget about most of the points you highlighted in your question. Capital asset term we all got used to in the last 20 years when we looked at the security dealer in Switzerland is no longer a mention. And this is aligning, if you want, the Swiss framework to the international standards. So there are under the new capital regime no risk weighted assets. There is no capital ratio. You have seen on the page 22 what the new standards are. And therefore, we will of course also not report along those lines because it's just not something that as a notion is relevant for security firms going forward. You probably also have noted that in Switzerland, the banking regulation has changed as far as small banks are concerned. In Germany, it's called the Kleinbanken regime. And those who have applied and will be or has been accepted by FINMA to report under the Kleinbanken regime are for example also not going to report risk weighted assets. So it's not just the framework for Leontec has changed, but the regulatory framework in Switzerland has changed. And when you assess Leontec as a security firm without client accounts, most of the questions you asked capital ratio, risk weighted assets, minimum capital ratio etcetera are not notions we can use any longer. They do not exist anymore. What obviously does not change at all and there is also very clear expectations from the regulator in that regard is that the business needs to continue to be managed prudently conservatively and in view of any risk the firm might have be it liquidity risk, be it reputational risk etcetera. And our communication there is very clear that Board's risk limits are not changing. So if we have, for example, a certain risk limit appetite on volatility risk to come back to a point we discussed before then you will not now see the Onpek changing its risk limits in that regard. When it comes to our risk appetite say about liquidity risk, how we invest our bond portfolio, you will again not see a material change at all. As the business evolves, you will obviously need to adjust certain of your underlying risk parameters, but that I would say is not anything else to what we would have done before. And I mentioned it, we will put in the center of our attention a very solid balance sheet and we will continue with a conservative dividend policy. And now what does that mean? We could have come to you and given you hard tangible numbers. We could have said our equity base needs to be X and our dividend ratio for the foreseeable future is a certain percentage of retained earnings, for example. We have not done that on purpose. 1st, on the equity base, the message is clear. It needs to strengthen. But it's today difficult in an abstract to tell you what the right number is because for example it very much also depends on how ship comes along. I would say the absolute capital level can be a bit lower if Sheep develops very well and should probably be a bit higher if Sheep doesn't develop well because essentially you are using more of your balance sheet and therefore you want the solidity and strength of the balance sheet to be higher. On the dividend side, again, it's very much obviously a function of absolute net profit, but it's also a function of the wish to get to a certain absolute capital level faster or slower. I think the benchmark and the assumption you should take is, you have a Board and the management team, which wants this company to become unquestionably the reference counterparty when it comes to structured product, probably not the only one, but one of the top three reference counterparties. And what would you want to see as a counterparty in terms of the on tax capitalization and that's probably the starting number. We think that number is higher than today. We, however, also highlighted to you that it's not only shareholders' equity we are looking at, but also deferred income. We are now taking the 2 together €770,000,000 euros We started the business with 10,000,000. We are telling you 770,000,000 is maybe not yet quite enough, but we are certainly also saying we are very well capitalized and it's not exactly that we will need to have one day €10,000,000,000 of shareholder answered to the satisfaction of all the counterparties the question of what they would like to see. We will of course then also be able to eventually look at a more progressive dividend. But as always I need to make in my function a disclaimer here. This is a decision that the Board takes and the decision that shareholders finally have the last say on in the Annual Meetings. Martin, with regards to the question to the €200,000,000 cost, you know in 2019 we have anticipated or given a cost guidance of €200,000,000 we always said that we would have some flexibility assuming top line will not development to our satisfaction. That's exactly what you see now in the full year 2019 results with a cost base of €191,000,000 We have meanwhile increased the number of full time employees from 4.86 at the end of 2018 to 508 at the end of 2019, which implicitly also increases the fixed costs in terms of personal expenses. We have taken this into account. We feel comfortable with the guidance of €200,000,000 and yes, we would have some flexibility obviously and we would manage costs based out also on the development of our top line for 2020 as well. Excellent. Thank you both. That was helpful. Thank you very much. With that, we thank you for your attention and close today's press conference.