Slide 1: Financial Results for Fiscal Year Ending March 31, 2019
Apr 25, 2019 TSE 1st Section: 8698 Financial Results for Fiscal Year Ending March 31, 2019
Slide 2: Our Business Principles
Our Business Principles Always a step ahead of the “Y” in "MONEY," our name MONEX symbolizes our position as a forerunner in finance. In the face of an ever-changing future, the Monex Group utilizes state-of-the-art IT technologies and world-class financial expertise to design innovative ways of man
Slide 3: Table of Contents
Table of Contents Our Business Principles p. 1 Table of Contents p. 2 I. Highlights p.3 - p.14 II. Consolidated Performance p.15 - p.29 III. Business Update p.30 - p.44 Appendix: Group Overview p.45 - p.54 This is an English translation of Japanese presentation materials prepared in connection with
Slide 4: I. Highlights
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 3
Slide 5: Business Overview 1/2
Business Overview 1/2 Successfully improved the profitability in US segment. Promoting collaboration between each segment, our group companies strive to improve the profitability and growth potential Over 1.8 M accounts with over ¥ 4 T assets in custody, driven by Japan number of M&A. Promoting the
Slide 6: Business Overview 2/2
Business Overview 2/2 Steady development of online Three mid-to-long term Enhanced brokerage business growth drivers Corporate Value 2019/3EBITDA* ¥ 8.8 B Finance in a New Age Launch of short trade in general margin Crypto Explore new businesses with Japan trading will improve profitability. Activis
Slide 7: Highlights of FYE Mar. 2019 (12 months) 1/4
Highlights of FYE Mar. 2019 (12 months) 1/4 Revenue decreased due to low trading volume in Japan. A continuation of increased net financial income in US pushed up its segment profit* to a record high Low trading volume in equity market caused a decrease in revenue. Japan Segment profit* was ¥ 1.2 B
Slide 8: Highlights of FYE Mar. 2019 (12 months) 2/4
Highlights of FYE Mar. 2019 (12 months) 2/4 ◆Total operating revenue after deducting financial expenses and profit attributable to owners of the Company (JPY million) Total operating revenue after deducting financial expenses Profit attributable to owners of the Company Pre-tax Profit 1,790 Consolid
Slide 9: Highlights of FYE Mar. 2019 (12 months) 3/4
Highlights of FYE Mar. 2019 (12 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 18,541 19,338 20,000 17,417 14,637 15,616 US 15,000 1
Slide 10: Highlights of FYE Mar. 2019 (12 months) 4/4
Highlights of FYE Mar. 2019 (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 expenses and cost of sales Segment profit Crypto Asset Coincheck, Inc. joined Monex Group 3,000
Slide 11: Highlights 4Q of FYE Mar. 2019 (3 months) 1/5
Highlights 4Q of FYE Mar. 2019 (3 months) 1/5 Japan segment is in the middle of restructuring. A continuous increase in net financial income in US helped with its highest quarterly segment profits Revenue decreased due to lower equities trading volume. ¥1.8 B of impairment loss on fixed assets relat
Slide 12: Highlights 4Q of FYE Mar. 2019 (3 months) 2/5
Highlights 4Q of FYE Mar. 2019 (3 months) 2/5 Stagnation of cryptocurrency market caused a loss in Crypto Asset segment An increase in expense for continuing enhancement of internal Crypto Asset control and lower market trading volume led to a segment loss of ¥ 0.6 B Recorded ¥ 90 M as valuation gai
Slide 13: Highlights 4Q of FYE Mar. 2019 (3 months) 3/5
Highlights 4Q of FYE Mar. 2019 (3 months) 3/5 ◆Total operating revenue after deducting financial expenses and quarterly profit attributable to owners of the Company Total operating revenue after deducting financial expenses (JPY million) Quarterly profit attributable to owners of the Company Quarter
Slide 14: Highlights 4Q of FYE Mar. 2019 (3 months) 4/5
Highlights 4Q of FYE Mar. 2019 (3 months) 4/5 ◆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 4,791 5,115 4,985 US 6,000 4,619 4,619 3,000 74 209
Slide 15: Highlights 4Q of FYE Mar. 2019 (3 months) 5/5
Highlights 4Q of FYE Mar. 2019 (3 months) 5/5 ◆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 Segment profit Crypto Asset (JPY million) Coincheck, Inc. joined Monex Group 1,5
Slide 16: II. Consolidated Performance
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 15
Slide 17: YoY Comparison (12 months) Consolidated Performance
YoY Comparison (12 months) Consolidated Performance (JPY million) FYE Mar. 2018 FYE Mar. 2019 Rate of (Apr. 2017 – (Apr. 2018– Variance Reference change Mar. 2018) Mar. 2019) Total operating revenue after P18: Analysis of Japan segment deducting financial expenses 49,155 47,417 -1,738 -4% P20: Analy
Slide 18: YoY Comparison (12 months) Segment Performance
YoY Comparison (12 months) Segment Performance (JPY million) Japan US Asia Pacific Crypto Asset Investment 2018/3 2019/3 2018/3 2019/3 2018/3 2019/3 2018/3 2019/3 2018/3 2019/3 Total operating revenue after deducting financial expenses 29,028 25,739 17,417 19,338 931 808 - 2,077 2,772 414 and cost o
Slide 19: YoY Comparison Analysis: Operating Revenue (Japan)
YoY Comparison (12 months) Analysis: Operating Revenue Japan : Lower market trading volume. Pricing change for margin trading in Nov. 2017 led to higher market share and margin balance share. Tightened spread of FX services drove a rise in market share of trading volume ■Total operating revenue afte
Slide 20: YoY Comparison Analysis: SG&A (Japan)
YoY Comparison (12 months) Analysis: SG&A Japan : Advertising expenses declined by 30% with efficient marketing practice while the number of account openings remained the same level. System related expenses increased primarily to enhance cyber security ■SG&A (compared to Apr. 2017 – Mar. 2018) SG&A
Slide 21: YoY Comparison Analysis: Operating Revenue (USD)
YoY Comparison (12 months) Analysis: Operating Revenue (USD) US : Net financial income increased due to rising interest rates. Account growth and higher market volatility drove an increase in brokerage commissions ■Total operating revenue after deducting financial expenses and cost of sales (compare
Slide 22: YoY Comparison Analysis: SG&A (USD)
YoY Comparison (12 months) Analysis: SG&A (USD) US : SG&A increased due to growing headcounts to support business expansion, and an increase in operating income including higher commissions paid by larger trading volume, and an increase in incentive compensation linked to the favorable company perfo
Slide 23: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance （JPY million） 3Q FYE Mar. 4Q FYE Mar. 2019 2019 Rate of Variance change Reference (Oct. 2018- (Jan. 2019- Dec. 2018) Mar. 2019) Total operating revenue after P24: Analysis of Japan segment 12,555 11,017 -1,538 -12% deducting financial expenses P26:
Slide 24: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance (JPY million) Japan US Asia Pacific Crypto Asset Investment 2019/3 2019/3 2019/3 2019/3 2019/3 2019/3 2019/3 2019/3 2019/3 2019/3 3Q 4Q 3Q 4Q 3Q 4Q 3Q 4Q 3Q 4Q Total operating revenue after deducting financial expenses and 6,981 5,647 5,115 4,985 186 209
Slide 25: QoQ Comparison Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan : Revenue decreased due to lower equities market trading volume and margin balance driven by lower trading of individual traders ■Quarterly total operating revenue after deducting financial Quarterly total operating revenue after expenses a
Slide 26: QoQ Comparison Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan : Commissions paid decreased due to lower market trading volume. Compensation and benefits decreased due to lower incentive compensation linked to the company performance Quarterly SG&A -1.1％ (-64) ■Quarterly SG&A *Figures in parenthesis is the variance
Slide 27: QoQ Comparison Analysis: Operating Revenue (USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US : Net financial income increased for the last five consecutive quarters, driven by constant increase in net interest income, compensating the brokerage commissions decrease due to lower market volatility ■Quarterly total operating revenu
Slide 28: QoQ Comparison Analysis: SG&A (USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US : Commissions paid decreased due to lower trading volumes ■Quarterly SG&A Quarterly SG&A -2.1% (-824) (USD thousand) 45,000 *Figures in parenthesis is the variance from previous quarter 40,345 39,150 (USD thousand) 38,326 ■ Others (+237) 40,000 37,83
Slide 29: 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, 2019 Assets Liabilities (*1) Non-current assets JPY
Slide 30: Shareholders' Distribution
Shareholders’ Distribution Total return ratio (*1) is 75% on a multi-year basis. The Company has calculated its forecast of year-end dividends based on the lower limit, 2% of annual DOE ◆Total return amount(*2) and total return ratio ◆Return on Equity ratio （million yen） 12,000 Amount of acquisition
Slide 31: III. Business Update
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 30
Slide 32: Business Update Cross-segment Cooperation 1/2
Business Update Cross-segment Cooperation 1/2 Promote cooperation between each business segment to realize Global Vision Ⅲ Investment and Technology Trading Technology fusion including Blockchain development AI implementation 1 2 3 4 The Future Of Finance 1. Customer 2. Service 3. Startup 4. Busines
Slide 33: Business Update Cross-segment Cooperation 2/2
Business Update Cross-segment Cooperation 2/2 Set multiple customer intersection between Monex Securities and Coincheck Owned media: Money Clip Coincheck Articles Monex Cryptocurrency Lab Monex Securities Users, Coincheck Users Enhance Knowledge on Cryptocurrency Easier to Start Cryptocurrency Tradi
Slide 34: Business Update Japan segment: FX and US equities
Business Update Japan segment Market share of FX trading increased. Revenue from US equity trading decreased due to the market condition US Equity Trading FX Trading - Number of trade through the smartphone - The spread of the Monex Securities’ FX service app reached 30% at record high “FX PLUS” was
Slide 35: Business Update Japan segment: Margin trading
Business Update Japan segment Expanded margin trading service and enriched the financial instruments intermediary service with other financial institutions Margin trading Intermediary Service with Financial Institutes Enabled investors to make short trades in general margin trading dated Mar. 23 - I
Slide 36: Monex Activist Forum
Business Update Japan segment Monex Securities launched a new initiative “Monex Activist Forum” An initiative called “Monex Activist Forum” began by Monex Securities to help individual traders execute shareholders’ rights in a well-thought manner - Objective This project aims to facilitate communica
Slide 37: Business Update US segment
Business Update US segment Segment profit increased for the last five consecutive quarters and generated the highest quarterly profit among five business segments in Monex Group - Segment profit of this quarter was $ 7 M, the highest among the five segments in Monex Group - New branding and simplifi
Slide 38: Business Update US segment: net financial income
Business Update US segment Net financial income is forecasted to largely increase in FYE March 2020, driven by larger net interest income - Commission received plus net financial income decreased by 1% from previous quarter - Market volatility declined in 4Q and quarterly DARTs average decreased by
Slide 39: Business Update Asia Pacific Segment
Business Update Asia Pacific Segment Monex Boom Securities remains profitable for the last nine consecutive quarters Monex Boom Securities (HK) Cherry Technology Co., Ltd (China) - Recorded the amount equivalent to operating - Providing technology and knowledge of online income for the last nine con
Slide 40: Business Update Crypto Asset Segment
Business Update Crypto Asset Segment Segment loss increased by a revenue decrease, due to lower market transaction of cryptocurrency, and an increase in expenses for strengthening internal control and security. Implement controls over expense going forward 4Q FYE March 2019（Crypto Asset Segment） 3Q
Slide 41: Business Update Crypto Asset Segment: customer base
Business Update Crypto Asset Segment Growth potential in customer base where the millennials are the majority Assets in Custody Customer Transfer within Monex Group Correlating with the Bitcoin prices, assets 1.75 Million 0.9 Million in custody at Coincheck has gradually Number of downloads Number o
Slide 42: Crypto Asset Segment: Coincheck initiatives
Business Update Crypto Asset Segment Expand the potential growth of Crypto Asset segment by strengthening investors protection, resumption and launch of services at Coincheck as well as new business development utilizing Blockchain technology Coincheck Projects/Initiatives - Coincheck compensated us
Slide 43: Cheeese app and Monex Cryptocurrency Lab
Business Update Crypto Asset Segment Familiarize individuals with cryptocurrency by utilizing a smart-phone app “Cheeese” and a web-based news media “Monex Cryptocurrency Lab” • A smart-phone application “Cheeese” to give away small amount of Bitcoin by answering simple questionnaires and read the a
Slide 44: Business Update Investment Segment
Business Update Investment Segment Established a flagship fund “MV I Investment Limited Partnership” in a total committed capital of ¥ 2.5 B Entity and scope of investment Monex Ventures, Inc. ：Principle investment with a focus on Fintech companies MONEX EDISON Investment ：Leveraging track-record of
Slide 45: Investment Segment Portfolio
Business Update Investment Segment (Portfolio of Monex Ventures, Inc., MONEX EDISON Investment Limited Partnership and MV I Investment Limited Partnership) Expand investments mainly to Fintech companies, to which Monex Securities will propose IPO lead arranger Mortgage loan P2P lending EC Payment DL
Slide 46: Appendix. Group Overview
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 45
Slide 47: Group Overview: Consolidated Assets in Custody
Group Overview Japan: 1.82M accounts, Crypto Asset: 1.75M users, US: 110K accounts, AP: 13K accounts. Global customer base as a group Aim for continuous growth in the online brokerage business and enhancement of crypto asset business for retail investors as our core business (JPY 100 million) ◆C
Slide 48: Group Overview: Revenues, Costs, and Employees
Group Overview－Revenues, Costs, and Employees ◆Total operating revenue after deducting financial expenses ◆SG&A by segment and by cost items by region and by business Others 3% Compensation and benefits 4% Crypto System related expenses 3% Othres 2% 2. System Asset 1. Equities Others 2% Crypto Finan
Slide 49: Corporate value creation process
Group Overview－Corporate value creation process As experts in finance, we strive to expand customer base using IT technology 48
Slide 50: New financial conglomerate in a new age
Group strategy overview combined with crypto-asset business New financial conglomerate in a new age Traditional Financial New Financial Monex Group Conglomerate Conglomerate Bank Crypto Asset Bank Coincheck Monex Securities, TradeStation Securities Broker Global Online Brokerage Securities, Monex Bo
Slide 51: 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 52: Monex Group structure
Monex Group (As of March 31, 2019) Listed Holding Company [Japan] [US/Europe] [Asia Pacific] Cryptocurrency exchange Online Securities Company service provider Monex International Limited Holding Company in Hong Kong TradeStation Group, Inc. Online Securities Company Holding Company in the U.S. Mone
Slide 53: Overview of Monex Group and Main Subsidiary Companies
Overview of Monex Group and Main Subsidiary Companies ■ Monex, Inc. (Tokyo, Japan) ■ TradeStation Group, Inc. (HQ in Florida, U.S.) One of the major online brokerage firms in Japan Online securities group with award-winning trading technology - President : Oki Matsumoto development capabilities - Fo
Slide 54: 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 55: Investors' Guide
Investors’ Guide ■ Shareholders distribution ■ Shareholders & indicators per share ◆ Our basic policy for shareholders distribution ◆ Major shareholders and shareholder breakdown (as of Mar. 31, 2019) Monex Group, Inc. Monex Group aims to provide returns to its shareholders 0.2% MOMO&Co. and Oki Mat