Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2022/23 Earnings Presentation
33 slides from Nomura's earnings presentation, July 2022
Slide 1: CFO overview of Q1 results
Good evening, this is Takumi Kitamura, CFO of Nomura Holdings. I will now give you an overview of our financial results for the first quarter of the fiscal year ending March 2023 using the document titled Consolidated Results of Operations. Please turn to page two.
Slide 2: Presentation and Financial Supplement contents
Presentation Financial Supplement © Executive summary (p. 2) © Overview of results (p. 3) © Business segment results (p. 4) © Retail (p. 5-7) © Investment Management (p. 8-9) © Wholesale (p. 10-12) © Non-interest expenses (p. 13) © Robust financial position (p. 14) © Consolidated balance sheet (p. 1
Slide 3: Executive summary
It was a challenging quarter as US interest rate hikes and fears of a recession dragged on the market, negatively impacting market activity and mark-to-market valuations of our securities holdings. As you can see on the top right, income before income taxes slumped 76 percent to 11.7 billion yen and
Slide 4: Highlights
Highlights (billions of yen, excluding EPS and ROE) ons Llo--------4 353.3 318.9 351.0 340.8 | 299.0 | 12% -15% 274.7 300.4 270.9 291.3 i 287.3 i 1% 5% 78.5 18.5, 80.1 49.5 | WT | 76% -85% 485 3.2 60.3 31.0 | 17 | -95% 97% 1 1 Y15.59 Y1.01 Y19.07 Y9.89 i Y0.52 -95% -97% 7.1% 0.5% 87% 4.3% 0.2%
Slide 5: Net revenue and income (loss) before income taxes
Net revenue and income (loss) before income taxes’ “Additional information on “Other” (FY2022/23 1Q) Loss related to economic hedging (Y9.8bn) Gain on changes to own and counterparty credit spread relating to Derivatives (Y2.9bn)
Slide 6: Retail results
Retail net revenue was 71.4 billion yen, up 1 percent quarter on quarter, while income before income taxes declined 5 percent to 4.9 billion yen. From this quarter we have given a breakdown of revenues at the bottom left. Flow revenues from transactions remained sluggish as 39.1 billion yen as clien
Slide 7: Retail total sales by product
This quarter we changed the scope of how we calculate total sales. Previously, we only counted sales in the Retail channel which serves corporates and their owners as well as individual clients via our nationwide branch office network. From this quarter onwards, we are including the Japan Wealth Man
Slide 8: Retail recurring revenue assets and net inflows
As shown on the top left, net inflows into recurring revenue assets was 132.8 billion yen. This represents a strong rebound from last quarter with funds flowing into discretionary investments, level fee assets which were fully launched in April, and loans. As a result, recurring revenue remained sol
Slide 9: Investment Management results
Net revenue declined 25 percent to 7.6 billion yen, while loss before income taxes was 11.7 billion yen. The revenue breakdown on the bottom left shows investment revenue of negative 23.1 billion yen, which had a substantial impact on the division’s performance. This was mainly due to a loss related
Slide 10: Assets under management and flows
As shown on the top left, assets under management at the end of June was 65.6 trillion yen, down 2.3 trillion yen from the end of March primarily due to market factors. In terms of the flow of funds, the investment advisory business reported net outflows of 930 billion yen, but the investment trust
Slide 11: Wholesale results
Net revenue increased 2 percent to 199 billion yen. Although last quarter included 11.5 billion yen from the reversal of losses arising from transactions with a US client, revenues grew quarter on quarter thanks to strong performance in Fixed Income as well as yen depreciation. Wholesale expenses al
Slide 12: Global Markets results
Global Markets net revenue grew 11 percent to 175.3 billion yen. Fixed Income was particularly strong with revenues increasing 41 percent to 112.6 billion yen. From this quarter we have included a graph showing revenues by main products. This quarter Macro Products such as Rates and FX/EM were stron
Slide 13: Investment Banking results
Net revenue was 23.7 billion yen, down 35 percent quarter on quarter. Finance related revenues from businesses such as ECM and ALF were sluggish as global transactions slowed. Advisory revenues also slowed compared to the particularly strong past two quarters, but remained relatively resilient with
Slide 14: Non-interest expenses
Firmwide costs declined 1 percent to 287.3 billion yen. While overall costs increased due to yen depreciation, Other expenses declined significantly as last quarter included additional costs of 23 billion yen related to RMBS. Please turn to page 14 for an update of our financial position. 13
Slide 15: Robust financial position
The table on the bottom left shows Tier 1 capital of 3.2 trillion yen, an increase of over 90 billion yen compared to the end of March. This increase is mainly due to an increase in FX translation adjustments because of yen depreciation. Risk-weighted assets increased by 1 trillion yen from the end
Slide 16: Financial Supplement
Financial Supplement 15
Slide 17: Consolidated balance sheet
Consolidated balance sheet (billions of yen) Assets Liabilities Total cash and cash deposits ‘Short-term borrowings Total payables and deposits Total loans and receivables Total collateralized financing Trading liabilities Total collateralized agreements Other liabilities Long-term borrowings Lidjia
Slide 18: Value at risk
1 = Definition = From April 1, 2022, to June 30, 2022 (billions of yen) — 95% confidence level — Maximum: 5.4 — 1-day time horizon for outstanding portfolio — Minimum: = 2.7 — Inter-product price fluctuations considered — Average: 3.6 nae proves rma amma a 22.8 14 24 28 24 14 17 Equity Interest rate
Slide 19: Consolidated financial highlights
Full year Quarter (billions of yen) of Qian ote) « “ee 153.1 ‘== Net income (loss, 57% Biouae 150 1430 | 6% Nomura Holdings, Inc. ("NHI") shareholders 100 4% ROE (%) 50 2% 0 —r— —+ 0% Net revenue 1,401.9 1,363.9 Income (loss) before income taxes 230.7 226.6 78.5 185 80.1 495 41.7 Net income (loss) a
Slide 20: Consolidated income
Full year Quarter fuesenyen) rama Frm gg a Revenue ‘Commissions 376.9 323 82.9 16 826 752 70.4 Fees from investment banking 108.7 149.6 357 B9 46.0 340 27.3 Asset management and portfolio service fees 230.0 270.0 640 67.2 699 689 68.3 Net gain on trading 310.0 8.8 52.0 91.1 106.8 1189 141.9 Gain (lo
Slide 21: Main revenue items
(billions of yen) Full year Quarter ‘Stock brokerage commissions 2623 236.4 58.2 617 57.3 53.4 48.4 Other brokerage commissions 143 18.0 37 40 48 55 48 Comms sions for distribution of investment trusts. 688 43.7 14.4 11.2 11.6 65 75 Other 31.6 34.3 66 88 89 10.4 97 Total 376.9 332.3 82.9 1.6 82.6 75
Slide 22: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter Coons of yen) pram pring tM za Retail 92.3 50.2 19.0 17.0 18.0 52 49 Investment Management 91.0 715 449 15.0 20.4 88 11.7 Wholesale 64.3 74.5 -28.4 25.0 40.8 37.0 25.3 Three business segments
Slide 23: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 80 40 396 15.8 149 0 17 39 40 | “285 404 © Fre ane Net gain (loss) related to economic ' 15 99 a4 38 AA 84 98 Realized gain (loss) on investments in equity _ held for WW 4 02 00 00 WwW 02 Equity in earnings of affiliates 16.4 368
Slide 24: Retail results data
1 2 Full year Quarter (billions of yen) Commissions 1877 138.5 386 35.6 36.5 278 26.0 6.6% — 32.6% Of which, stock ‘ssi 926 67.4 178 17.6 176 144 11.8 18.2% © 33.7% Of which, commissions for distribution of investment trusts 68.4 43.5 144 W4 116 65 18 AT8% Sales credit 58.4 44.0 11.6 11.9 114 94 10.
Slide 25: Retail client assets
Retail client assets (trillions of yen) 140 127.0 128.7 125.0 1224 = Other 126.6 14 : 119.4 120 © Foreign investment eats 100 ® Bond investment trusts 80 = Stock investment trusts 60 = Domestic bonds 40 ‘= Foreign currency bonds 20 = Equities 0 i 75.7 5.3 127 10.0 7.4 1.3 7A 119.4 1. Including CBs a
Slide 26: Net inflows of cash and securities
Net inflows of cash and securities" Full year Quarter "Corporates "Individuals -900 + -900 -1,200 -1,200 noms eoen amet rin 7, Corporates? 1,205 -136 "Corporates m Individuals an 507 125 Corporates? -277 -1,089 722 Individuals? -318 488 __ Individuals? -36 130 475 -82 376 Total 888 351 ‘Total 471 -1
Slide 27: Number of accounts
Number of accounts (Mar) (Mar) sun) [Sep [Dec] Mar [sun Accounts with balance 5,329 5,348 5,348 5,342 5,362 5,348 5,354 Equity holding accounts 2,927 2,955 2,924 2,923 2,949 2,955 2,958 NISA accounts opened (accumulated)' 1,791 1,589 1,820 1,828 1,839 1,589 1,598 Online service accounts 4,895 5,067
Slide 28: Investment Management results and AUM by company
Full year Quarter i 100 QQ 10 ness revenue 1119 119.9 280 293 315 34 30.7 15% 9.4% Investment gain/loss 51.2 28.1 365 54 86 24 BA : . Net revenue 163.2 148.0 635 34.3 40.1 10.1 7.6 248% 88.1% Non-interest expenses 724 76.5 186 19.3 19.8 18.9 19.3 2.3% 3.9% Income (loss) Before income taxes 91.0 15 4
Slide 29: Asset inflows/outflows by business
Asset inflows/outflows by business" 2 Domestic public investment trust market and Nomura Asset Management market share? Full year Quarter “= | Prmevas || Frain |---| Investment trusts business 2,753 1,236 M6 267 250 372 478 of which ETFs 2241 683 344 -28 15 383 323 Investment adusory and intemationa
Slide 30: Wholesale results and revenue breakdown
Full year Quarter (billions of yen) ey ce ae) —eeeEeEeeeeEeeEeEeEeee Net revenue 14 1727 194.9 199. Novetwesepenees cas rm $a ma n aA) ‘mt Fas ta Income (loss) before income taxes 643 745 284 250 408 37.0 25.3 31.8% - Breakdown of Wholesale revenues Full year Quarter (billions of yen) reer rr i rr a
Slide 31: Number of employees
in Sep Dec Mar Japan 15,330 15,213 15,556 15,393 15,299 15,213 15,503 Europe 2,769 2,820 2779 2,811 2817 2,820 2,811 Americas 2,152 2,257 2,116 2171 2,181 2,257 2,252 Asia and Oceania’ 6,151 6,295 6,198 6,216 6,259 6,295 6,407 Total 26,402 26,585 26,647 26,591 26,556 26,585 26,973 1. Includes Powai
Slide 32: Disclaimer
NOMURA Disclaimer This document is produced by Nomura Holdings, Inc. (“Nomura”). Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by Nomura or any affiliate thereof. Offers to
Slide 33: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com