Nomura Holdings, Inc. · TSE:8604
Nomura — FY2012/13 Earnings Presentation
41 slides from Nomura's earnings presentation, April 2013
Slide 1: Opening Remarks: Atsushi Yoshikawa, President and Group COO
Opening Remarks: Atsushi Yoshikawa, President and Group COO First, I will say a few words and then hand you over to our new CFO, Shigesuke Kashiwagi, who was appointed on April 1. He will run through the highlights of our results for the full year and fourth quarter, and we will then take your quest
Slide 2: Disclaimer
Disclaimer NOMURA 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 3: Outline
Outline Presentation NOMURA Financial Supplement Executive summary (p. 3-4) Overview of results (p. 5) Business segment results (p. 6) Retail (p. 7-8) Asset Management (p. 9-10) Wholesale (p. 11-14) Non-interest expenses (p. 15-16) Progress of cost reduction program (p. 17) Robust financial position
Slide 4: Q4 financial results: Executive summary
Q4 financial results: Shigesuke Kashiwagi, CFO I will now give you an overview of our financial results for the full year and fourth quarter ended March 2013 using the document titled “Consolidated Results of Operations”. Executive summary Please turn to page three for a summary of the full year res
Slide 5: Fourth quarter results overview
We reported our best quarter in seven years driven by the robust performance in Retail and the 50.1 billion yen one-off gain on the secondary offering of Nomura Real Estate Holdings shares. While Nomura Real Estate’s earnings are consolidated on our fourth quarter income statement, the company has b
Slide 6: Overview of group-wide and business segment results
Pages five and six give you an overview of our group-wide and business segment results. 5
Slide 7: Business segment results
Business segment results LL Net revenue and income before income taxes NOMURA FY2012/13 FY2012/13 (billions of yen) 40 Q0Q YoY Full year YoY Nat Retail 138.7 +45% +50% 397.9 +14% Revenues Asset Management 18.3 -3% +16% 68.9 +5% Wholesale 196.9 +4% +24% 644.9 +16% | Segment total 354.0 +H17% 433% 4,1
Slide 8: Retail results commentary
I will now give you an update of performance by business. Please turn to pages seven and eight. Net revenue in Retail increased 14 percent year on year to 397.9 billion yen and pretax income jumped 59 percent to 100.6 billion yen. Retail performance rebounded in the second half of the year on the ba
Slide 9: Retail: Stock market rally drives robust sales of equity-related products
Total sales Retail: Stock market rally drives robust sales of equity-related products NOMURA (billions of yen) 5,000 =Investmenttrusts Others 4,000 3,000 2,000 1,000 0 Net asset inflows’ and investment trust net inflows? ™Stocks =Bonds All products contributed to 69% QoQ increase in total sales . Er
Slide 10: Asset Management results commentary
Turning now to Asset Management on pages nine and ten, full year net revenue was 68.9 billion yen, up 5 percent year on year. Pretax income increased 3 percent to 21.2 billion yen. These gains are the result of steady growth in assets under management. Fourth quarter net revenue was 18.3 billion yen
Slide 11: Asset Management: Investment trust inflows remained strong
Asset Management: Investment trust inflows remained strong Assets under management (gross)' by business Nomura Asset Management share of public investment trust market? NOMURA (trilions of yen) investment trust business __® Investment advisory business 40.0 ao7 36.1 31.9 30.1 . 30.0 86 20.0 10.0 21.
Slide 12: Wholesale results commentary
Please turn to page 11 for Wholesale. Full year net revenue in Wholesale was 644.9 billion yen, an increase of 16 percent year on year. Pretax income was 71.7 billion yen, which represents a strong rebound from the pretax loss booked in the prior year. Quarterly net revenue was up 4 percent at 196.9
Slide 13: Fixed Income
Please turn to page 12 for Fixed Income. Fourth quarter net revenue in Fixed Income was 108 billion yen, representing the second strongest quarter for the year. Japan had a good quarter due to the changing macro environment, while our international business slowed from a strong third quarter. That s
Slide 14: Equities
Please turn to page 13 for Equities. Fourth quarter net revenue in Equities was 65.1 billion yen, an increase of 38 percent compared to the previous quarter. Market turnover recovered in Japan and other major markets, driving up client revenues by 37 percent. The graph on the right highlights the re
Slide 15: Investment Banking
Please turn to page 14 for Investment Banking results. Quarterly net revenue in Investment Banking was 23.8 billion yen, down 23 percent from the previous quarter which included private equity gains. Excluding “Other”, net revenue increased by 32 percent. Investment Banking gross revenue was 44.1 bi
Slide 16: Non-interest expenses
Please turn to page 15 for an overview of costs. Full year non-interest expenses increased by 9 percent to 1.58 trillion yen, primarily due to the fact that Nomura Land and Building expenses were recognized for the full twelve months versus just ten months in the previous year. Another key factor be
Slide 17: Non-interest expenses excluding Nomura Real Estate
Please turn to page 16 for an overview of costs excluding Nomura Real Estate. The graph on the left shows that full-year non-interest expenses were roughly flat year on year. Although we were affected by the depreciating yen and booked higher one-off expenses such as restructuring costs and IT syste
Slide 18: Progress of cost reduction program
Please turn to page 17. Our additional 1 billion dollar cost reduction program is on schedule and was 78 percent complete at the end of March. As noted on page 16, the one-off expenses due to headcount reduction and IT system disposal costs mean it will take some time for the benefits of our cost re
Slide 19: Robust financial position
Please turn to page 18 for an update of our balance sheet. Total assets at the end of March were 37.9 trillion yen, gross leverage was 16.5 percent and net leverage was 10.4 percent. We started applying Basel 3 to our capital ratios from March. Our Tier 1 ratio and Tier 1 common ratio were both 11.7
Slide 20: Changes to shareholders' equity and risk-weighted assets
As shown on the top right of this page, our fully loaded 2019 Tier 1 common ratio is approximately 10 percent, based on our year-end balance sheet. 19
Slide 21: Funding and liquidity
Please turn to page 20. There are no significant changes to our funding and liquidity from December so I will leave it for you to look through later. 20
Slide 22: European exposure and share buyback program
Page 21 outlines our exposure to European peripheral countries. Our net country exposure at the end of March was 920 million dollars, down from 2.94 billion dollars in December. The decline is mainly the result of a reduction in our sovereign debt exposure in Italy. Our inventory consists entirely o
Slide 23: Closing Remarks: Atsushi Yoshikawa
Closing Remarks: Atsushi Yoshikawa, President and Group COO As I said at the start of the call, Abenomics has led to a significantly improved business environment and market conditions in Japan since the end of last year. Given our huge client franchise in Japan and our high market shares in our hom
Slide 24: Consolidated balance sheet
Consolidated balance sheet NOMURA (billions of yen) Assets Liabilities Total cash and cash deposits 954 4,653 Short-term borrowings 1186738 i Total payables and deposits 2437/2414 Total loans and receivables 2,211 2,630 418 Total collateralized financing 12,519] 15,409, a Trading liabilities 7 406)
Slide 25: Value at risk
Value at risk = Definition From April 1, 2012 to March 29, 2013 (billions of yen) — 99% confidence level — Maximum: 8.7 — 1-day time horizon for outstanding portfolio — Minimum: = 4.3 — Inter-product price fluctuations considered — Average: 6.1 (billions of yen) Mar 31, Jun. 30, Sep. 30, Dec. 31, Ma
Slide 26: Consolidated financial highlights
Consolidated financial highlights NOMURA (yen) Full year Quarter (billions of yen) (billions of yen) 120 8% 400 107.2 100 mmmNet income gp ROE (%) 60 40 20 ie) Net revenue 1,535.9 1,813.6 499.0 369.3 401.7 389.1 653.6 Income before income taxes 85.0 237.7 60.8 19.7 35.4 13.0 169.7 Net income attribu
Slide 27: Consolidated income
Consolidated income NOMURA Full year Quarter (bilions of yen) ‘Praotni2 Fraoran Rome yong Revenue Commissions 347.1 359.1 90.4 77.4 72.3 83.7 125.7 Fees from investment banking 59.6 62.4 14.8 10.4 17.4 13.0 21.8 Asset management and portfolio service fees 144.3 141.0 35.1 33.8 33.4 35.0 38.8 Net gai
Slide 28: Main revenue items
Main revenue items (billions of yen) Full year Quarter NOMURA ‘Stock brokerage commissions (retail) 36.0 51.8 11.1 7.4 7.0 10.7 26.6 Stock brokerage commissions (other) 132.7 112.9 31.8 28.4 25.3 27.2 32.0 Other brokerage commissions 9.4 11.7 18 2.3 26 3.0 3.8 Commissions for distribution of 196.6 ©
Slide 29: Adjustment of consolidated results and segment results
Adjustment of consolidated results and segment results: Income (loss) before income taxes NOMURA Full year Quarter (ons of yen ‘ovine Panam sFyzotn2 = Fyzonatg (1) Due to @ reorganization in April 2012, reported amounts for Wholesale and Other have been reclassified. 28
Slide 30: Segment "Other"
Segment “Other” Income (loss) before income taxes NOMURA Net gain (loss) related to economic hedging transactions Realized gain(loss) on investments in equity securities held for operating purposes Equity in earnings of affiliates Corporate items Others! Income (Loss) before income taxes 0.2 10.6 32
Slide 31: Retail related data (1)
a Retail related data (1) (billions of yen) Full year Quarter NOMURA Commissions 2015 228.9 558 94410 41.7 55.7) BAA 51.8% © 81.2% Sales credit 59.0 80.9 156 151 168 203 286 40.7% 83.3% Fees from investment banking and other 38.2 36.8 87 10.3 94 6.6 10.4 57.8% 19.6% Investment trust administration f
Slide 32: Retail related data (2)
Retail related data (2) NOMURA Stock brokerage commissions and commissions for distribution of investment trusts Full year Quarter (billions of yen) (billions of yen) 180 70 150 60 mStock brokerage ‘commissions = Commissions for 90 distribution of investment 30 trusts 60 20 30 i) to) Stock brokerage
Slide 33: Retail related data (3)
Retail related data (3) Retail client assets Full year (trillions of yen) = Other 100 = Overseas mutual funds 80 72.0 ‘= Bond investment trusts: 60 = Stock investment trusts: =Domesticbonds 40 = Foreign currency bonds 20 = Equities 0 Equities 37.2 Foreign currency bonds Domestic bonds ' 12.7 Stock i
Slide 34: Retail related data (4)
Retail related data (4) NOAURA Retail client assets: Net asset inflow’ Full year Quarter (billions of yen) (billions of yen) 4,000 900 2,400 647 700 2,000 500 360 1,035 300 185 a 38 100 0 — = 10 -100 (1) Net asset inflow = asset inflow — asset outflow. Retail client assets exclude portion from regio
Slide 35: Retail related data (5)
Retail related data (5) Number of accounts NOMURA (Thesands “rroowne Fyoons Fraon2 yam Accounts with balance 4,985 5,025 4,985 4,997 5,003 5,006 5,025 Equity holding accounts 2,706 2,717 2,706 2,714 2,731 2,710 2,717 Nomura Home Trade / Net 2 Call account! 3,773 3,747 3,773 3,796 3,823 3,846 3,747 N
Slide 36: Asset Management related data (1)
(ions ot er AE i ws ws [ie a a Net revenue 65.8 15.7 16.4 15.4 18.8 18.3 2.6% 16.5% Non-interest expenses 45.3 478 11.6 11.0 10.9 11.5 14.4 25.3% 24.0% Income before income taxes 20.5 21.2 44 5.4 46 73 3.9 46.4% 4.8% Total assets under management Asset Management related data (1) NOMURA Full year Qu
Slide 37: Asset Management related data (2)
Asset Management related data (2) Assets under management (gross) by business* (trillions of yen) rn Frias Investment trust trvestme 230 265 230 215 217 240 265 Investment advisory rvesine 89 (86 89 86 78 87 96 Assets under management = 34.4 36.4 34.9 30.1 296 327 364 (gross) Assets under management
Slide 38: Wholesale related data (1)
Wholesale related data (1) NOMURA Wholesale (illo of yen est a a, Net revenue 555.0 158.4 121.9 137.1 189.0 196.9 4.2% 24.3% Non-interest expenses 592.7 573.2 146.5 130.4 136.9 144.6 161.3 11.5% 10.0% Income (Loss) before income taxes -37.7 71.7 11.9 8.6 0.2 44.4 35.7 -19.6% 3.0x Breakdown of Wholes
Slide 39: Wholesale related data (2)
Wholesale related data (2) NOMURA Private equity related investments Full year Quarter (billions of yen) 300 = Terra Firma 221.3 PAR 206.0 206.4 mAsia 200 ™ Europe (excluding Terra Firma) 104.6 103.1 104.6 = Japan 100 m 0 (Mar 12 Mar13 Mar 12 Jun.12 Sep.12 Dec. 12 Mar. 13 Japan 65.5 52.7 65.5 59.6 5
Slide 40: Number of employees
Number of employees (1) Excludes employees of pri (2) Includes Powai office in India. equity investee companies Japan (excluding FA)! 19,598 20,197 20,039 19,877 14,123 Japan (FA) 2,011 2,014 1,981 1,951 1,907 Europe 4,014 3,975 3,940 3,747 3,618 Americas 2,420 2,423, 2,425 2,316 2,274 Asia-Pacific?
Slide 41: Nomura Holdings, Inc.
NOMURA Nomura Holdings, Inc. www.nomura.com