Both Canon S120 and Leica V-Lux 20 have 12.0 MP resolution sensors but Canon S120's sensor is 1/1.7" (7.44 x 5.58 mm ) and Leica V-Lux 20's sensor is 1/2.33" (6.08 x 4.56 mm ).
Since Canon S120's has a larger sensor area with the same resolution, this means that it also has a larger pixel area hence better light collecting capacity for a given aperture compared to Leica V-Lux 20.
Below you can see the S120 and V-Lux 20 sensor size comparison.
As seen above, Canon S120 has a 1.5x Larger sensor area than Leica V-Lux 20. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.