Monex Group, Inc. · TSE:8698
Monex — FY2021 Earnings Presentation
65 slides from Monex's earnings presentation, Apr 27, 2021
Slide 1: Financial Results for Fiscal Year Ended March 31, 2021
April 27, 2021 TSE 1st Section: 8698 Financial Results for Fiscal Year Ended March 31, 2021
Slide 2: Our Business Principles
Our Business Principles Always a step ahead of the “Y” in "MONEY," our name MONEX expresses our desire to embrace all people who are engaged at the forefront of our future. With state-of-the-art IT technology, globally universal values and a sense of professionalism, Monex Group designs innovative w
Slide 3: Table of Contents
Table of Contents Our Business Principles p. 1 Table of Contents p. 2 I. Highlights p. 3 - p.19 II. Consolidated Performance p. 20 - p. 38 III. Business Update p. 39 - p. 54 Appendix: Group Overview p. 55 - p. 64 This is an English translation of Japanese presentation materials prepared in connectio
Slide 4: I. Highlights
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 3
Slide 5: Overview 1/8: Customers' assets in custody reached ¥6.4 trillion
Business Overview 1/8 Total customers’ assets in custody reached ¥ 6.4 trillion. With its business portfolio, it has grown into a corporate entity with diversified revenue sources. 4
Slide 6: Overview 2/8: All segments making steady progress
Business Overview 2/8 All segments are making steady progress in its business transformation. Three main segments boosted revenues and consolidated pre-tax profits increased by 5+ times. （¥ Billion） 25.0 ¥ 21.3B 20.0 ■Investment Segment ■Crypto Asset Segment 15.0 YoY x 5.2 ■US Segment 10.0 ■Japan Se
Slide 7: Overview 3/8: Crypto Asset segment profit rose dramatically
Business Overview 3/8 Segment profit of the Crypto Asset segment rose dramatically, driven by a highly active crypto asset market. (¥ Billion） The amount equivalent to Crypto Asset Segment Pre-tax Profit operating income ¥10.2B 10 Quarterly pre-tax profit Other expenses※ 8 ¥3.6B Pre-tax profit 6 ¥6.
Slide 8: Overview 4/8: Japan segment profit increased significantly
Business Overview 4/8 Segment profit of the Japan segment increased significantly, driven by strong US equity trading and a realized gains on sales of DeFi* project investment. (¥ Billion） QoQ 5 Japan Segment Pre-tax Profit Pre-tax profit X 2.8 ¥ 4.1B 4 Realized gains on sales of DeFi* project inves
Slide 9: Overview 5/8: Record account growth, US segment profit
Business Overview 5/8 Record account growth and the emergence of the next generation of traders drove record trading volume. Profit of the US segment almost doubled. (¥ Billion） Pre-tax profit Pre-tax profit ¥ 1.4B US Segment Pre-tax Profit QoQ 1.5 X 2.0 200,000 Quarterly profit before income taxes
Slide 10: Overview 6/8: Business portfolio diversified
Business Overview 6/8 The group's business portfolio has been diversified and established. Expanded profit contribution from non-Japan segment. 2021/3 2020/3 7% 48% Pre-tax profit of 36% 41% Pre-tax profit 3 main segments 52% 3 main segments ¥ 4.3B ¥ 20.3B 16% ■ Japan Segment ■ US Segment ■ Crypto A
Slide 11: Overview 7/8: Global Vision and New Beginning
Business Overview 7/8 Monex has steadily realized the visions of expanding the online securities business overseas under “Global Vision” since 2010, and entering the crypto asset- related business under “New Beginning” since 2018. Each strategy continues to expand the earnings base of the group. (¥
Slide 12: Overview 8/8: EBITDA up 141% YoY
Business Overview 8/8 EBITDA* increased by 141% YoY and ROE grew from 3.9% to 17.3%. Monex aims for a sustainable increase in corporate value through business model transformation and mid-to-long term growth drivers going forward. Transformation of existing Three mid-to-long term Enhanced business m
Slide 13: Highlights FYE Mar. 2021 (12 months) 1/4
Highlights FYE Mar. 2021 (12 months) 1/4 Consolidated pre-tax profit became ¥ 21.3B (5.2 times YoY), coupled with an expansion of customer base on the back of the growing needs of online trading services under the pandemic. Customers’ assets in custody reached over ¥ 5 trillion driven by the Japan b
Slide 14: Highlights of FYE Mar. 2021 (12 months) 2/4
Highlights of FYE Mar. 2021 (12 months) 2/4 ◆Total operating revenue after deducting financial expenses and profit attributable to owners of the Company (JPY million) Pre-tax Profit 21,296 Consolidated Total operating revenue after deducting financial expences 80,000 Profit attributable to owners of
Slide 15: Highlights of FYE Mar. 2021 (12 months) 3/4
Highlights of FYE Mar. 2021 (12 months) 3/4 ◆Total operating revenue after deducting financial expenses and cost of sales and Segment profit (JPY million) Total operating revenue after deducting financial expences and cost of sales Segment profit 25,000 22,958 19,887 US 17,417 19,338 15,616 15,000 -
Slide 16: Highlights of FYE Mar. 2021 (12 months) 4/4
Highlights of FYE Mar. 2021 (12 months) 4/4 ◆Total operating revenue after deducting financial expenses and cost of sales and Segment profit (JPY million) Total operating revenue after deducting financial expences and cost of sales Segment profit Crypto Asset 25,000 Coincheck, Inc. joined 20,822 Mon
Slide 17: Highlights 4Q of FYE Mar. 2021 (3 months) 1/4
Highlights 4Q of FYE Mar. 2021 (3 months) 1/4 Three major segments made great progress with consolidated pre-tax profit of ¥ 12.4B (2.6 times QoQ). Consolidated EBITDA largely increased to ¥ 16.6B. Segment profit was ¥ 4.1B with a realized gains on sales of investment Japan in DeFi project of ¥ 1.1B
Slide 18: Highlights 4Q of FYE Mar. 2021 (3 months) 2/4
Highlights 4Q of FYE Mar. 2021 (3 months) 2/4 ◆Total operating revenue after deducting financial expenses and quarterly profit attributable to owners of the Company Quarterly Pre-taxes Profit Total operating revenue after deducting financial expenses 12,352 (JPY million) Quarterly profit attributabl
Slide 19: Highlights 4Q of FYE Mar. 2021 (3 months) 3/4
Highlights 4Q of FYE Mar. 2021 (3 months) 3/4 ◆Total operating revenue after deducting financial expenses and cost of sales and Segment profit Total operating revenue after deducting financial expenses and cost of sales (JPY million) Segment profit (Quarterly profit before income taxes) 8,000 6,880
Slide 20: Highlights 4Q of FYE Mar. 2021 (3 months) 4/4
Highlights 4Q of FYE Mar. 2021 (3 months) 4/4 ◆Total operating revenue after deducting financial expenses and Segment profit (JPY million) Total operating revenue after deducting financial expences and cost of sales Crypto Asset 20,000 Segment profit (Quarterly profit before income taxes) 14,233 10,
Slide 21: II. Consolidated Performance
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 20
Slide 22: YoY Comparison (12 months) Consolidated Performance
YoY Comparison (12 months) Consolidated Performance FYE Mar. 2020 FYE Mar. 2021 Rate of (JPY million) (Apr. 2019– (Apr. 2020– Variance Reference change Mar. 2020) Mar. 2021) P23: Analysis of Japan segment Total operating revenue after deducting financial expenses 47,990 73,695 25,705 54% P25: Analys
Slide 23: YoY Comparison (12 months) Segment Performance
YoY Comparison (12 months) Segment Performance Japan US Asia Pacific Crypto Asset Investment (JPY million) 2020/3 2021/3 2020/3 2021/3 2020/3 2021/3 2020/3 2021/3 2020/3 2021/3 Total operating revenue after deducting financial expenses 24,342 29,099 19,887 22,958 634 1,604 3,812 20,822 148 509 and c
Slide 24: YoY Analysis: Operating Revenue (Japan)
YoY Comparison (12 months) Analysis: Operating Revenue Japan : Revenue increased by 19.5% YoY due to larger transaction volume of both Japan and US equities trading. Brokerage commission offset lower FX and stock lending income with given interest rate and market condition. ■ Total operating revenue
Slide 25: YoY Analysis: SG&A (Japan)
YoY Comparison (12 months) Analysis: SG&A Japan : Limited overall increase in SG&A to the increase in revenues, although advertising expenses increased for favorable account growth, so does commissions paid and bonus accruals due to higher trading volume. ■ SG&A SG&A Total +11.4% (+2,465) (JPY milli
Slide 26: YoY Analysis: Operating Revenue (US, USD)
YoY Comparison (12 months) Analysis: Operating Revenue (USD) US : Commission-free trading, account growth and higher volatility (VIX) generated a significant increase in trading volume resulting in higher brokerage and other commissions. ■ Total operating revenue after deducting financial expenses a
Slide 27: YoY Analysis: SG&A (US, USD)
YoY Comparison (12 months) Analysis: SG&A (USD) US : Advertising expenses increased to support new account additions and the growth of the newer crypto asset product suite. Bonus accruals increased due to improved financial performance. ■ SG&A SG&A Total +13.0% (+21,417) (USD thousand) * Figures in
Slide 28: YoY Analysis: Operating Revenue (Crypto)
YoY Comparison (12 months) Analysis: Operating Revenue Crypto : Coincheck’s trading value at the market place significantly increased due to the booming market and an increase in the number of accounts. Especially, trading value of altcoins increased significantly, which led to 5.5 times increase in
Slide 29: YoY Analysis: SG&A (Crypto)
YoY Comparison (12 months) Analysis: SG&A Crypto : Coincheck ran TV commercials in Q4 in response to the booming crypto asset market. Advertising expenses increased due to agile marketing initiatives. Compensation and benefits increased due to higher bonus accruals linked with the business performan
Slide 30: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance （JPY million） 3Q FYE Mar. 4Q FYE Mar. 2021 2021 Rate of Variance change Reference (Oct. 2020- (Jan. 2021- Dec. 2020) Mar. 2021) P31: Analysis of Japan segment Total operating revenue after 16,826 29,762 12,936 77% P33: Analysis of US segment (USD) d
Slide 31: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance Japan US Asia Pacific Crypto Asset Investment (JPY million) 2021/3 2021/3 2021/3 2021/3 2021/3 2021/3 2021/3 2021/3 2021/3 2021/3 3Q 4Q 3Q 4Q 3Q 4Q 3Q 4Q 3Q 4Q Total operating revenue after deducting financial expenses and 7,231 8,544 5,406 6,880 359 528
Slide 32: QoQ Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan : Commissions from Japanese and US equities grew in line with the active stock markets. US equities accounted for 23% of total brokerage commissions in 4Q. ■Quarterly total operating revenue after deducting financial Quarterly total operati
Slide 33: QoQ Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan : Fixed cost including system related expenses was well under control, while advertising expense and bonus increased driven by active account openings and the favorable business performance. Quarterly SG&A +8.5％ (+509) ■Quarterly SG&A * Figures in paren
Slide 34: QoQ Analysis: Operating Revenue (US, USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US : Brokerage and other commissions increased due to record account growth driving higher trading volumes despite lower VIX. Crypto asset related revenue increased. ■Quarterly total operating revenue after deducting financial expenses and
Slide 35: QoQ Analysis: SG&A (US, USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US : Total expenses have increased in line with variable expenses associated with revenue growth and improved financial performance. ■Quarterly SG&A Quarterly SG&A +13.2% (+5,979) (USD thousand) * Figures in parenthesis is the variance from previous qua
Slide 36: QoQ Analysis: Operating Revenue (Crypto)
QoQ Comparison (3 months) Analysis: Operating Revenue Crypto : The number of accounts increased significantly due to the active market and marketing initiatives such as TV commercials. The trading value at the market place tripled QoQ, resulting in a significant increase in revenue. ■Quarterly total
Slide 37: QoQ Analysis: SG&A (Crypto)
QoQ Comparison (3 months) Analysis: SG&A Crypto : Advertising expenses increased significantly due to agile marketing measures such as TV commercials in response to the booming crypto asset market. Compensation and benefits increased due to an increase in personnel to support account openings and bo
Slide 38: Summary of Statement of Financial Position
Summary of Statement of Financial Position The difference between “Net capital” and “Non-current assets” is the source of funds for investments and shareholders distribution ◆Summary of consolidated statement of financial position as of March 31, 2021 (*1) Non-current Assets Assets Liabilities Prope
Slide 39: Shareholders' Distribution
Shareholders’ Distribution Total return ratio(*1) is aimed at 75% on a multi-year basis ◆ Total return amount (*2) and total return ratio ◆ Return on equity ratio （million yen） Amount of dividends (left) Amount of acquisition of own shares(left) Total return ratio(right) 18% 17.3% 12,000 827% 900% 8
Slide 40: III. Business Update
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 39
Slide 41: Update Japan Segment 1/5
Business Update Japan Segment 1/5 Customers’ assets in custody reached over ¥ 5 trillion. Account openings surpassed pre-COVID19 levels and significantly. Customer’s assets in custody and quarterly new account openings at Monex, Inc. （Assets in custody：trillion yen） * As of the end of each quarter （
Slide 42: Update Japan Segment 2/5
Business Update Japan Segment 2/5 Stock-type assets in custody steadily increased, driven by successful service expansion of Mutual Funds and Securities Lending. Stock-type business offerings and initiatives for increasing customers’ assets Securities Lending New Platform Business • Enabled margin a
Slide 43: Update Japan Segment 3/5
Business Update Japan Segment 3/5 Brokerage commissions from US equity trading made up for 23% of all brokerage commission revenues Services to increase customers’ assets in custody US Equity Trading Investment Education Courses • US equity and USD assets in custody increased • Began offering paid i
Slide 44: Update Japan Segment 4/5
Business Update Japan Segment 4/5 Monex Activist Fund performs well above TOPIX (+ 5point). Reinforcing group’s asset management capability Discretionary Investment Service Engagement Fund ON COMPASS／ON COMPASS+ Monex Activist Fund AUM ¥ 11.1 billion AUM ¥ 6.8 billion* The hybrid face-to-face discre
Slide 45: Update Japan Segment 5/5: Monex Climate Impact Strategy
Business Update Japan Segment 5/5 Monex Climate Impact Strategy to hold renewable energy assets to have positive impact on global climate issues. Sustainable Finance Sustainable Finance Proportion of Sustainable Investing Triggered by the GPIF's investment in Relative to Total Managed Assets* enviro
Slide 46: Update US Segment 1/2
Business Update US Segment 1/2 TradeStation’s customer base and revenue base has almost doubled in one year. Account Additions & Client Assets Trading Volumes DARTs continue to increase after the introduction of TradeStation has expanded its customer target from commission-free trading, which has se
Slide 47: Update US Segment 2/2
Business Update US Segment 2/2 TradeStation has evolved into a growth company with its newer crypto product suite performing strongly. Commission Revenue TradeStation Crypto (TCI) • Despite volatility stabilizing, customer trading • Crypto Earn, a service that offers interest income on volumes remai
Slide 48: Update Crypto Asset Segment 1/4
Business Update Crypto Asset Segment 1/4 The number of accounts rose dramatically due to increased popularity driven by TV commercials during the booming market. Leading Company among Japanese Crypto Exchanges Effort to expand customer base and revenue base No. 1 app DLs*1 and supported coins - Coin
Slide 49: Update Crypto Asset Segment 2/4
Business Update Crypto Asset Segment 2/4 Coincheck’s quarterly trading value in the marketplace tripled QoQ driven by high market activity and an increase in the number of accounts. Coincheck’s services Quarterly trading value Coincheck is not based on proprietary trading and its Trading value incre
Slide 50: Update Crypto Asset Segment 3/4
Business Update Crypto Asset Segment 3/4 OP margin was 72%* in Q4. Coincheck develops new business initiatives. Operating Profit Margin (OP margin) New business - Coincheck has built a revenue structure that allows Sharely it to increase profits significantly when the market is (Virtual shareholder
Slide 51: Update Crypto Asset Segment 4/4
Business Update Crypto Asset Segment 4/4 Launched Japan’s first NFT marketplace combined with a crypto asset exchange. Aiming to become No.1 in the world. Non-Fungible Token Coincheck NFT (β version) • NFT (Non-Fungible Token) is a digital asset that • Coincheck NFT (β version) is now available for
Slide 52: Update Asia Pacific Segment
Business Update Asia Pacific Segment Steady account growth drove higher DARTs +60% QoQ and segment profit increased by 88%. Monex Boom / Monex Australia Cherry Technology Co., Ltd (China) In Hong Kong, the number of accounts grew Providing technology and knowledge of the despite the Chinese New Year
Slide 53: Update Investment Business
Business Update Investment Business Growing track record of investment to support social innovation Track Record*1 Investment Portfolio PFM*2 Information Online Insurance Platform Invested in 2012 invested in 2009 invested in 2006 Listed on TSE Mothers Listed on TSE Mothers Listed on TSE Mothers in
Slide 54: Update ESG Management 1/2
Business Update ESG Management 1/2 Positioned this year to kick off full-scale ESG initiatives. The executive officers themselves are promoting ESG initiatives as part of business promotion. ESG Initiatives “Sustainable Finance” as a material The Monex Group’s ESG Approach ESG issue • Embracing our
Slide 55: Update ESG Management 2/2
Business Update ESG Management 2/2 Proposals for the General Meeting of Shareholders to be held in June Technology expertise and younger generations as credentials for new candidates Proposals １．Partial amendment to the Articles of Incorporation The number of board of directors from “not more than n
Slide 56: Appendix. Group Overview
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 55
Slide 57: Group Overview－Revenues, Costs, and Employees
Group Overview－Revenues, Costs, and Employees Total operating revenue Selling, general and The amount equivalent to after deducting financial expenses administrative expenses operating income 2％ 1％ 2％ 0％ 2％ 2％ 12％ 25％ 28％ ¥73.7B 39％ ¥49.9B 46％ ¥23.8B FYE Mar 2021 FYE Mar 2021 FYE Mar 2021 9％ 30％ 40％
Slide 58: Corporate Governance
Corporate Governance Established global-standard corporate governance practices and emphasis on dialogue with retail/institutional investors Adoption of “company with three committees” structure - highly effective executive management monitoring system - Adopted “company with committees” structure i
Slide 59: Monex Group structure
Monex Group (As of March 31, 2021) Listed Holding Company [Japan] [US/Europe] [Asia Pacific] Crypto asset exchange Online Securities Company Monex International Limited service provider Holding Company in Hong Kong TradeStation Group, Inc. Online Securities Company Holding Company in the U.S. Monex,
Slide 60: Overview of Monex Group and Main Subsidiary Companies
Overview of Monex Group and Main Subsidiary Companies ■ Monex, Inc. (Tokyo, Japan) ■ Coincheck, Inc. (Tokyo, Japan) One of the major online brokerage firms in Japan Crypto asset Exchange/Marketplace agency - President : Yuko Seimei - President: Satoshi Hasuo - Founded in 1999 - Founded in 2012, join
Slide 61: History of Monex Group
History of Monex Group Japan U.S. Asia Pacific 1982 - TradeStation Technologies, Inc. is formed as Omega Research, Inc. 1997 - TradeStation stock lists on NASDAQ - Boom Securities (H.K.) Limited is founded (now Monex Boom Securities (H.K.) Limited), becoming the first in Asia Pacific to launch Inter
Slide 62: Investors' Guide
Investors’ Guide ■ Shareholders distribution ■ Shareholders & indicators per share ◆ Our basic policy for shareholders distribution ◆ Major shareholders and shareholder breakdown Monex Group aims to provide returns to its shareholders (as of March 31, 2021) Monex Group, Inc. based on the business pe
Slide 63: Investment Segment – Portfolio 1/3
Investment Segment – Portfolio 1/3 ◆ Monex Ventures, Inc. P2P lending EC Settlement DLT* Prop Tech Online lending （Registered as Type 2 Financial Instruments Business） AI/Big Data Thematic Investment B2B Robo-advisor AI/Big Data Vacation Rental SNS （Registered as Type 1 Financial Instruments Busines
Slide 64: Investment Segment – Portfolio 2/3
Investment Segment – Portfolio 2/3 ◆ MV I Investment Limited Partnership B2B SaaS E-market place B2B SaaS Logistics B2B Saas EC Asset Management EC E-market place Ad Tech B2B Saas B2B SaaS B2B SaaS IoT/AI B2B SaaS Agri-Tech B2B Saas Insure Tech KYC / Big Data B2B SaaS Robotics Marketplace AI / Sport
Slide 65: Investment Segment – Portfolio 3/3
Investment Segment – Portfolio 3/3 ◆ MV I Investment Limited Partnership B2B SaaS EC EC VR Elderly Care B2B SaaS Audio Content Marketing VR EC Healthcare 64