Monex Group, Inc. · TSE:8698

Monex — Q3 FYE March 2019 Earnings Presentation

35 slides from Monex's earnings presentation, Jan 31, 2019

1. Slide 1: Databook: Financial Results for 3Q of Fiscal Year Ending March 31, 2019

   January 31, 2019 (TSE 1st Section: 8698) DATABOOK Financial Results for 3Q of Fiscal Year Ending March 31, 2019 This is an English translation of Japanese presentation material prepared in connection with the disclosure of the financial results of Monex Group, Inc. It includes information derived fr

2. Slide 2: Table of Contents

   Table of Contents [Data Book] Table of Contents p.1 1. Market & Transaction Data p.2 - p.12 2. Financial Data p.13 - p.34 1

3. Slide 3: 1. Market & Transaction Data

   1. Market & Transaction Data 2. Financial Data 2

4. Slide 4: Market and Transaction Data (1) – Customers' Assets in Custody

   Market and Transaction Data (1) – Customers’ Assets in Custody (JPY million) Japan Segment U.S. Segment Asia-Pacific Segment 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 As of As of As of As of As of As of As of As of As of Dec.31, 2016 Mar.31, 2017 Jun.30, 2017 Sep.30, 2017 Dec.31,

5. Slide 5: Market and Transaction Data (2) – Number of Employees

   Market and Transaction Data (2) – Number of Employees (person） Japan Segment U.S. Segment Asia-Pacific Segment Crypto Asset Segment 1,000 500 0 As of As of As of As of As of As of As of As of As of Dec.31, 2016 Mar.31, 2017 Jun.30, 2017 Sep.30, 2017 Dec.31, 2017 Mar.31, 2018 Jun.30, 2018 Sep.30, 201

6. Slide 6: Market and Transaction Data (3) – Japan Segment - Monex, Inc. (Number of accounts)

   Market and Transaction Data (3) – Japan Segment - Monex, Inc. (Number of accounts) ◆Number of total accounts & active accounts (account） Total accounts Active accounts 2,000,000 1,500,000 1,000,000 500,000 0 As of Dec. 31, As of Mar. 31, As of Jun. 30, As of Sep. 30, As of Dec. 31, As of Mar. 31, As

7. Slide 7: Market and Transaction Data (4) Japan Segment - Monex, Inc. (Equities and ETFs)

   Market and Transaction Data (4) Japan Segment - Monex, Inc. (Equities and ETFs ) ◆Market share and value of equity trading ◆ Monex’s cash & margin trading value and margin balance Monex’s share in retail trading value of 2 major stock exchanges and (JPY 100million) its equity trading values (%) Cash

8. Slide 8: Market and Transaction Data (5) Japan Segment - Monex, Inc. (Mutual Funds & Bonds)

   Market and Transaction Data (5) Japan Segment - Monex, Inc. (Mutual Funds & Bonds) ◆Mutual Funds (Sales and Balance) ◆Fixed Income Businesses (Sales of non-domestic bonds) (JPY million) (JPY million) (JPY million) Sales of Investment Trusts(no-load) (left) 70,000 500,000 20,000 Sales of Investment T

9. Slide 9: Market and Transaction Data (6) Japan Segment - Monex, Inc. (FX)

   Market and Transaction Data (6) Japan Segment - Monex, Inc. (FX) ◆OTC FX business (JPY million) (JPY 100million) 1,500 150,000 FX revenue(left) Trading value (right) 1,000 100,000 500 50,000 0 0 3Q of FYE 4Q of FYE 1Q of FYE 2Q of FYE 3Q of FYE 4Q of FYE 1Q of FYE 2Q of FYE 3Q of FYE Mar. 2017 Mar.

10. Slide 10: Market and Transaction Data (7) Japan Segment – Monex, Inc. (Customer distribution)

    Market and Transaction Data (7) Japan Segment – Monex, Inc. (Customer distribution) ◆Active accounts by gender and age ◆Active accounts by occupation Corporate Professional Corporation executive (e.g. Doctor) All accounts Accounts opened within a year 35% 35% Homemaker Civil servant Self-employed 30

11. Slide 11: Market and Transaction Data (8) Japan Segment - Monex, Inc. (Capital Adequacy Ratio)

    Market and Transaction Data (8) Japan Segment - Monex, Inc. (Capital Adequacy Ratio) ◆Capital adequacy ratio (JPY million) 50,000 500% Risk asset amount（left） Non-fixed capital （left） Capital adequacy ratio（right） 40,000 400% 30,000 300% 20,000 200% 10,000 100% 0 0% As of As of As of As of As of As

12. Slide 12: Market and Transaction Data (9) U.S. Segment – TradeStation Group

    Market and Transaction Data (9) U.S. Segment – TradeStation Group ◆ Numbers of active accounts ◆ DARTs and VIX(*1) （thousand） (account) 150 30 Futures DARTs(left) Options DARTs(left) 80,000 Equities DARTs(left) Vix Close Avg. (right) 70,000 100 20 60,000 50,000 40,000 30,000 50 10 20,000 10,000 0 0

13. Slide 13: Market and Transaction Data (10) Asia-Pacific Segment

    Market and Transaction Data (10) Asia-Pacific Segment Monex Boom Securities+Monex Securities Australia ◆ Numbers of accounts with balances ◆ DARTs 3,000 (account) 14,000 12,000 2,000 10,000 8,000 6,000 1,000 4,000 2,000 0 0 3Q of FYE 4Q of FYE 1Q of FYE 2Q of FYE 3Q of FYE 4Q of FYE 1Q of FYE 2Q of

14. Slide 14: 2. Financial Data

    1. Market & Transaction Data 2. Financial Data 13

15. Slide 15: Introduction

    Introduction We have adopted IFRSs since FYE March 2013 to improve the international comparability of financial information, while we engage in business activities with a focus of 3 major locations (Japan, the U.S. and AP(*) with a view to creating a global online financial group ■ Consolidated fina

16. Slide 16: Consolidated financial results

    Consolidated financial results (JPY million) 3Q FYE Mar. 3Q FYE Mar. Variance Change 2018 2019 Commission received 21,356 19,996 -1,360 -6.4% Net trading income 2,893 5,014 2,121 73.3% Financial income 13,074 14,562 1,487 11.4% Other operating income 1,053 544 -510 -48.4% Total operating revenue 38,

17. Slide 17: Consolidated financial results (Reclassified)

    Consolidated financial results (Reclassified) Reclassified consolidated statement of income (JPY million) 3Q FYE Mar. 2018 3Q FYE Mar. 2019 Variance Change Brokerage commissions 16,393 15,186 -1,207 -7.4% Stocks and ETFs 11,831 9,893 -1,938 -16.4% Options and Futures 4,561 5,289 728 16.0% Cryptocurr

18. Slide 18: Consolidated financial results (SG&A)

    Consolidated financial results (SG&A) The details of SG&A in consolidated statement of income (JPY million) 3Q FYE Mar. 2018 3Q FYE Mar. 2019 Variance Change Transaction-related expenses 8,752 8,964 214 2.4% Commissions paid 2,960 3,552 594 20.1% Exchange and association dues 670 588 -82 -12.2% Comm

19. Slide 19: Quarterly consolidated financial results (Reclassified)

    Quarterly consolidated financial results (Reclassified) Reclassified consolidated statement of income (JPY million) FYE Mar. 2018 FYE Mar. 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q Brokerage commissions 5,247 5,217 5,928 6,147 5,134 4,720 5,332 Stocks and ETFs 3,736 3,705 4,391 4,142 3,364 3,130 3,399 Options and F

20. Slide 20: Quarterly consolidated financial results (SG&A)

    Quarterly consolidated financial results (SG&A) The details of SG&A in consolidated statement of income (JPY million) FYE Mar. 2018 FYE Mar. 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q Transaction-related expenses 3,000 2,765 2,987 3,211 3,157 2,810 3,000 Commissions paid 981 962 1,017 1,165 1,255 1,054 1,244 Exchang

21. Slide 21: Quarterly consolidated financial results (Other income and other expenses)

    Quarterly consolidated financial results (Other income and other expenses) (JPY million) FYE Mar. 2018 FYE Mar. 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q Other financial income 336 -60 -25 47 140 187 284 Gain on valuation of investments in - - - - 34 21 -31 securities Gain on sales of investments in securities 0 85

22. Slide 22: Quarterly financial results by segment (Reclassified) (Japan, the US and Asia-Pacific)

    Quarterly financial results by segment (Reclassified) (Japan, the US and Asia- Pacific) Reclassified statement of income (JPY million) FYE Mar. 2018 FYE Mar. 2019 2Q 3Q 4Q 1Q 2Q 3Q JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP Brokerage commissions 3,289 1,840 131 3,965 1,871 131 3,565

23. Slide 23: Quarterly financial results by segment (Reclassified) (Crypto Asset Segment, Investment Segment)

    Quarterly financial results by segment (Reclassified)(Crypto Asset Segment, Investment Segment) Reclassified statement of income (JPY million) FYE Mar. 2018 FYE Mar. 2019 2Q 3Q 4Q 1Q 2Q 3Q Crypto Crypto Crypto Crypto Crypto Crypto Investment Investment Investment Investment Investment Investment Ass

24. Slide 24: Quarterly financial results by segment (SG&A) (Japan, the US and Asia-Pacific)

    Quarterly financial results by segment (SG&A)(Japan, the US and Asia-Pacific) The details of SG&A in statement of income (JPY million) FYE Mar. 2018 FYE Mar. 2019 2Q 3Q 4Q 1Q 2Q 3Q JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP Transaction-related expenses 1,364 1,360 89 1,553 1,412 67

25. Slide 25: Quarterly financial results by segment (SG&A) (Crypto Asset Segment, Investment Segment)

    Quarterly financial results by segment (SG&A)(Crypto Asset Segment, Investment Segment) The details of SG&A in statement of income (JPY million) FYE Mar. 2018 FYE Mar. 2019 2Q 3Q 4Q 1Q 2Q 3Q Crypto Crypto Crypto Crypto Crypto Crypto Investment Investment Investment Investment Investment Investment A

26. Slide 26: Quarterly financial results by segment (Other income and other expenses) (Japan, US, Asia-Pacific)

    Quarterly financial results by segment (Other income and other expenses) ( Japan, the US and Asia-Pacific) (JPY million) FYE Mar. 2018 FYE Mar. 2019 2Q 3Q 4Q 1Q 2Q 3Q JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP Gain on valuation of investments in securities - - - - - - - - - 34 - - 2

27. Slide 27: Quarterly financial results by segment (Other income and other expenses) (Crypto Asset, Investment)

    Quarterly financial results by segment (Other income and other expenses) (Crypto Asset Segment, Investment Segment) (JPY million) FYE Mar. 2018 FYE Mar. 2019 2Q 3Q 4Q 1Q 2Q 3Q Crypto Invest Crypto Invest Crypto Invest Crypto Invest Crypto Invest Crypto Invest Asset ment Asset ment Asset ment Asset m

28. Slide 28: US Segment: Quarterly financial results (Reclassified) (in USD)

    US Segment :Quarterly financial results (Reclassified) (in USD) Reclassified statement of income (USD thousand) FYE Mar. 2018 FYE Mar. 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q Brokerage commissions 17,067 16,579 16,584 22,826 20,377 17,834 21,099 Stocks and ETFs 4,255 3,635 3,785 5,242 4,731 4,258 4,813 Options an

29. Slide 29: US Segment: Quarterly financial results (SG&A) (in USD)

    US Segment :Quarterly financial results (SG&A) (in USD) The details of SG&A in statement of income (USD thousand) FYE Mar. 2018 FYE Mar. 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q Transaction-related expenses 15,538 12,259 12,502 14,261 14,849 12,997 13,649 Commissions paid 6,283 5,934 5,968 7,472 7,929 6,236 7,787

30. Slide 30: Financial results by consolidated and segment

    Financial results by consolidated and segment (JPY million) FYE Mar. 2017 FYE Mar. 2018 Variance Cons. * JPN US AP Cons. JPN US AP Cons. JPN US AP Commission received 26,349 15,267 10,858 347 29,196 16,968 11,858 557 2,847 1,701 1,001 209 Net trading income 4,498 4,499 - -1 3,865 3,865 - 0 -633 -634

31. Slide 31: Financial results by consolidated and segment (Reclassified)

    Financial results by consolidated and segment(Reclassified) (JPY million) FYE Mar. 2017 FYE Mar. 2018 Variance Cons. JPN US AP Cons. JPN US AP Cons. JPN US AP Brokerage commissions 20,141 12,547 7,371 346 22,540 14,082 8,091 554 2,399 1,535 721 207 Stocks and ETFs 14,193 12,125 1,845 346 15,974 13,7

32. Slide 32: Financial results by consolidated and segment (SG&A)

    Financial results by consolidated and segment(SG&A) (JPY million) FYE Mar. 2017 FYE Mar. 2018 Variance Cons. JPN US AP Cons. JPN US AP Cons. JPN US AP Transaction-related expenses 11,281 5,323 5,869 226 11,963 5,797 6,043 332 682 474 174 106 Commissions paid 4,114 1,229 2,965 56 4,125 1,407 2,842 85

33. Slide 33: Consolidated statement of financial position (1) Assets

    Consolidated statement of financial position (1) ■Assets (JPY million) As of Mar. 31, As of Dec. 31, As of Mar. 31, As of Dec. 31, 2018 2018 2018 2018 Cash and cash equivalents 83,884 145,345 Property and equipment 2,122 2,501 Cash segregated as deposits 543,438 554,117 Intangible assets 49,851 49,0

34. Slide 34: Consolidated statement of financial position (2) Liabilities and Equity

    Consolidated statement of financial position (2) ■Liabilities ■Equity (JPY million) As of Mar. 31, As of Dec. 31, As of Mar. 31, As of Dec. 31, 2018 2018 2018 2018 Derivative liabilities 5,340 5,406 Common stock 10,394 10,394 Margin transaction liabilities 29,683 17,007 Additional-paid in capital 40

35. Slide 35: Consolidated statement of financial position (3) Investments in securities

    Consolidated statement of financial position (3) ■Investments in securities (JPY million) As of Mar. 31, As of Dec. 31 measurement method Description 2018 2018 Investments in securities 3,123 3,637 Fair Value Through Profit or Loss (FVTPL) - Quoted prices (unadjusted) in active markets for identical

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