Monex Group, Inc. · TSE:8698
Monex — Q3 FY2007 Earnings Presentation
33 slides from Monex's earnings presentation, Jan 24, 2007
Slide 1: Financial Results of 3Q of the Fiscal Year Ending March 31, 2007
January 24, 2007 Financial Results of 3Q of the Fiscal Year Ending March 31, 2007 This is an English translation of Japanese presentation material prepared for IR conference held on the date above; it includes the information on consolidated financial summary under Japanese GAAP for FYE March 2007.
Slide 2: Our Business Principles
Our Business Principles - PURSUING SPIRIT OF INNOVATION We will constantly strive to pioneer new fields in finance and propose new approaches to managing money. - STAYING CUSTOMER FOCUSED We believe that the best guide to our corporate activities is the voice of our customers. With this guide, we wi
Slide 3: Table of Contents
Table of Contents I. Financial Results Page 1. Summary ・・・ 4 III. To Our Shareholders Page 2. Financial Summary 1. ROE and Dividend ・・・ 25 (1)3Q of FYE Mar. 31, 2006 vs. 3Q FYE Mar. 31, 2007 (9 months) ・・・ 5 2. Disclosure ・・・ 26 (2) 3Q of FYE Mar. 31, 2006 vs. 3Q of FYE Mar. 31, 2007 (3 months) ・・・
Slide 4: 1. Financial Results
1. Financial Results 2. Business Strategy and Future Development 3. To our Shareholders 4. Appendix 3
Slide 5: Summary
Summary ■ Focusing on the “Online” channel and keeping low cost structure One and only “Online Investment Bank” Strengthening origination capabilities and developing in the world a platform as an “Investment Bank” Ⅰ. Customers’ assets in bonds and mutual funds (excluding MRFs) have increased signifi
Slide 6: Financial Summary: 3Q FYE Mar. 2006 vs. 3Q FYE Mar. 2007 (9 months)
Financial Summary : 3Q of FYE Mar. 31, 2006 vs. 3Q of FYE Mar. 31, 2007 (in 9 months) (in million yen, %) 3Q of FYE Mar. 31, 2006 3Q of FYE Mar. 31, 2007 Change (Apr. 2005-Dec. 2005) (Apr. 2006-Dec. 2006) Operating Revenues 27,227 24,587 -9.7％ Net Operating Revenues 26,124 23,120 -11.5％ SG&A 8,974 1
Slide 7: Financial Summary: 3Q FYE 2006 vs. 3Q FYE 2007 (3 months)
Financial Summary : 3Q of FYE Mar. 31, 2006 vs. 3Q of FYE Mar. 31, 2007 (in 3 months) (in million yen, %) 3Q of FYE Mar. 31, 2006 3Q of FYE Mar. 31, 2007 Change (Oct. 2005-Dec. 2005) (Oct. 2006-Dec. 2006) Operating Revenues 12,031 7,755 -35.5％ Net Operating Revenues 11,642 7,086 -39.1％ SG&A 3,323 3,
Slide 8: Financial Summary: 2Q vs. 3Q of FYE Mar. 2007
Financial Summary : 2Q of FYE Mar. 31, 2007 vs. 3Q of FYE Mar. 31, 2007 (in million yen, %) 2Q of FYE Mar. 31, 2007 3Q of FYE Mar. 31, 2007 Change (Jul. 2006-Sep. 2006) (Oct. 2006-Dec. 2006) Operating Revenues 7,496 7,755 +3.5％ Net Operating Revenues 7,129 7,086 -0.6％ SG&A 3,481 3,548 +1.9％ Operatin
Slide 9: Financial Highlights (Quarterly Trend)
Financial Summary：Financial Highlights (Quarterly trend) ■Net operating revenues and Operating Income ■SG&A million yen billion yen million yen Trading Value of Individual Investors 20,000 in 3 major markets and JASDAQ 2,000 (Average per business day)(right) 10,000 8,000 18,000 1,800 6,000 Net opera
Slide 10: Profit Margin and Cost Structure
Financial Summary：Profit Margin and Cost Structure ■Profit Margin (Operating income/Operating revenues) ■ Cost Structure (Oct. 2006-Dec. 2006) 80% Decrease in variable costs due Strategically controllable costs Fixed costs and costs to decrease in net operating correlated to the number of 69% revenu
Slide 11: Revenues/SG&A per Customers' Assets in Custody
Comparison Analysis : Revenues/SG&A per Customers’ Assets in Custody (Annualized) Rakuten Securities Holdings Bearish stock market in Japan led to weak brokerage business (Consolidated) 2.5% 2Q of Mar. 2007 Matsui MBH (Consolidated) (Consolidated） 2Q of Mar. 2007 1Q of Mar. 2007 kabu.com (Unconsolid
Slide 12: 2. Business Strategy and Future Development
1. Financial Results 2. Business Strategy and Future Development 3. To our Shareholders 4. Appendix 11
Slide 13: Mission Statement
Mission Statement Take position as a total financial service provider, not just as an online brokerage firm Offer comprehensive products and service line-ups with “World Class Quality” Support passive investors to manage his/her financial assets efficiently Strengthen “Products Origination C
Slide 14: Current Environment Recognition
Current Environment Recognition With Japanese population having started to decline and economic growth slowing down, Japanese individuals’ asset management is forced to be more proactive, which expands Monex’s role. ≪until Recently≫ ≪from Now on≫ • With less life security after retirement by governm
Slide 15: Goals and Strategies
Goals and Strategies ■Monex’s Key Goal Monex’s business model is enhanced by “Three Strategies” and “Investment Education Efforts” 《Existing Securities Firms’ Model》 《Monex’s Model》 Securities Securities Issuers of Stocks and Bonds/ Exchange Issuers of Stocks and Bonds/ Exchange Investment Managemen
Slide 16: Current and Future Structure of Revenues and Customers' Assets by Product
Current and Future Structure of Revenues and Customers’ Assets by Product 【Current Structure(3Q of FYE Mar. 2007)】 Direction of Each Business Line 【Future Structure】 Managed assets Underwriting 2% Underwriting (Mutual funds, etc.) 1. Stock Brokerage Business Managed assets Others 2% 4%(+2 points) 5%
Slide 17: Brokerage Business: Strengthening our original products and services
Brokerage Business : Strengthening our original products and services ■ Enhancement of Original Products ■ For Investment Beginners ◆ Expansion of stock lending services ◆Supported the Launch of stock trading training game The Number of Accounts and Outstanding balance of (The number “Kabutore! ” (B
Slide 18: Underwriting Business
Underwriting Business： Performance exceeding the framework of an online brokerage firm ■Track Records ■4th track record of Lead Manager ■Underwriting date basis Number of IPOs Amount of IPO Offerings ・Bringing 3 companies to the TSE Mothers 120 (hundred million yen) Market as lead manager, the most
Slide 19: Fixed Income Business
Fixed Income Business ： Offering products to meet the needs of our customers ■Providing Products to More Customers ■Increasing Number of Bond Investors ◆Started distribution of structured notes ◆A wide variety of products leading to an increase in the number of bond investors Previous Line-up Struct
Slide 20: FX Business: Introduction of new platform
FX Business：Introduction of new platform to enhance service ■Introduction of Monex FX pro ■Saxo Bank ◆ Offering two trading platform to fulfill various needs ・The platform of Monex FX pro is supported by Saxo Bank, an internet bank based in Copenhagen, Denmark Monex FX Monex FX pro ・Saxo Bank has wo
Slide 21: Mutual Fund Business
Mutual Fund Business：Front runner among online distributors ■Top-class online mutual funds sales forces ■Attractive Investment Opportunities Top ranking online mutual funds sales performance Expanding product line-ups and Services Assets in custody and number of mutual funds holders to meet custom
Slide 22: Alternative Investments
Alternative Investments：World-class premium products to individual investors ■ Grand Success in the Sales of Two New Original Alternative Funds “Premium Hybrid 2006” “China Focus” Monex-Fullerton China Focus Fund Monex Fund of Funds Series I ・Providing access to RMB-denominated China A shares, in
Slide 23: Topics
Topics ■ “ Kabu-Robo” Project ■Entry into the M&A Business ・Dec 18, 2006 Awarding ceremony of 1st Super Kabu-Robo Contest operated by ・Enforcing the management & corporate structure and enforcing the Trade Science Corporation M&A advisory business ⇒Selected 10 excellent automatic stock-trading progr
Slide 24: Investor Education
Investor Education： Providing appropriate educational opportunities of investment for many people ■Holding Seminars and Improving e-learning Services ■Improving Financial Literacy ◆Offline services： Providing various types of seminars ◆ “ Kabu-no-Gakko” (School of Stocks) ・ Educational Seminars - 13
Slide 25: 3. To our Shareholders
1. Financial Results 2. Business Strategy and Future Development 3. To our Shareholders 4. Appendix 24
Slide 26: ROE and Dividend
ROE and Dividend ■Pursuing Investment Return to Our Shareholders Dividend & Payout Ratio ROE ・Dividend payout ratio: approx. 50% of previous year’s Net Income of subsidiary, Monex,Inc. 50% ⇒Dividend for FYE Mar.2007 2,900 yen (Planned) ・Sustaining high dividend payout ratio 40% 38.1% Yen Dividend
Slide 27: Disclosure
Disclosure ■Clear and Timely Disclosure Major shareholders and share distribution map Clearest disclosure among the industry (Recorded as of the end of September 2006) Securities Finncial Companies Disclosure Frequency Language Started Top 3 major shareholders Institutions 4.2% Accounts, etc. Week
Slide 28: 4. Appendix
1. Financial Results 2. Business Strategy and Future Development 3. To our Shareholders 4. Appendix 27
Slide 29: Customer Portfolio
Customer Portfolio (As of December 31, 2006) ■Gender ■Location Others Female 22.7% 24.2% Tokyo Metropolitan District Nagoya District 51.0% Male 8.4% 75.8% 17.9% Osaka District ■Age ■Occupation Over 70 2.7% Company Employee 48.2% 9.7% Unemployed 16.5% 60s Self-employed 9.7% 50s 17.3% Housewife 9.6% 4
Slide 30: Marketing Strategy
Marketing Strategy ■Business Partners ■Advertising Strategy Promoting partnerships with high business affinity Penetration of the Monex brand by unification of design regardless of Online/Offline channels and Financial/Non-Financial Industries ・ Partnership with “So-net M3, Inc.”, which manages
Slide 31: Competitive Services and Products
Competitive Services and Products: For all customers’ satisfaction (As of January 17, 2007) Fixed Equity Mutual Fund Alternative Others Income Small Stock Credit Night China/ In-house Stop China U.S Time Unit Lending JGB/ Monthly India High Low Commodi Settle- Margin Loss Trading Foreign Auction Pur
Slide 32: Comparison with Major Securities Firm
Comparison with Major Securities Firm ■Customers’ assets in custody ■Net Operating Revenues ■SG&A （as of September 30, 2006） 2Q of FYE Mar. 31, 2007 (3 months) 2Q of FYE Mar. 31, 2007 (3 months) Although Monex has diversified Customers’ assets Major securities firm has diversified revenue Monex has
Slide 33: The Monex Group
The Monex Group （as of January 23, 2007） Investment Education for all Providing the Best Alternative Investment Individual Investors Products to Individual Investors （Investment Ratio） MBH : 70% Monex, Inc. (Investment Ratio) MBH : 55% Premium Online Financial Institution : 45% 10% 10% 10% (Investme