Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2016/17 Earnings Presentation
33 slides from Nomura's earnings presentation, July 2016
Slide 1: Consolidated Results of Operations overview
I will now give you an overview of our results for the first quarter using the document titled “Consolidated Results of Operations”. Please turn to page two.
Slide 2: Outline
Outline Presentation NOAURA Financial Supplement Executive summary (p. 2) Overview of results (p. 3) Business segment results (p. 4) Retail (p. 5-6) Asset Management (p. 7-8) Wholesale (p. 9-11) Non-interest expenses (p. 12) Robust financial position (p. 13) Funding and liquidity (p. 14) Consolidate
Slide 3: Executive summary
The market remained volatile during the first quarter due to the impact from monetary policy around the world and the Brexit vote in the UK. Retail investor sentiment was subdued on the back of yen appreciation and weaker equity markets. The fixed income market started to stabilize and client activi
Slide 4: Highlights
Highlights (billions of yen, except EPS and ROE) FY2016/17 FY2015/16 FY2015/16 1a 4Q QoQ 10 YoY Net revenue 338.5 280.1 +21% 424.0 -20% Non-interest expenses 275.7 292.5 6% 318.0 13% Income (loss) before income . . t 62.8 12.3 106.0 41% Net income (loss)! 46.8 19.2 - 68.7 -32% EPS? Y12.71 | -Y5.33 -
Slide 5: Net revenue and income (loss) before income taxes
Net revenue and income (loss) before income taxes FY2016/17 FY2015/16 FY2015/16 (billions of yen) Q0Q YoY 19 40 19 Netrevenue Retail 83.8 85.0 1% 130.7 -36% Asset Management 259 203 428% 269 4% Wholesale 190.9 136.2 +40% 205.2 1% Other * 43.4 624 22% 52.2 1% 4 iy secuftes held Yor operat rating purp
Slide 6: Retail net revenue
Retail reported net revenue of 83.8 billion yen, down 1 percent quarter on quarter. The decline is mainly due to slower sales of stocks and bonds. However, investment trusts and discretionary investments improved from the weak prior quarter. Income before income taxes declined 29 percent to 8.7 bill
Slide 7: Retail client discussions and discretionary investments
This quarter saw continued volatility in the equities and FX markets and a further decline in interest rates, presenting a challenging investment environment for our retail clients. In times like these, we place even greater focus on maintaining close dialog with our clients and provide solutions th
Slide 8: Asset Management net revenue
Net revenue increased by 28 percent, lifted by dividend income, realized gains from the potential liquidation of an overseas entity, and other factors. Income before income taxes was 12.2 billion yen, the highest level since September 2007. Assets under management declined by 2.8 trillion yen from M
Slide 9: American Century Investments investment
As you can see on the bottom right of page eight, our investment into American Century Investments was completed on May 19. We have established a Business Opportunity Committee and set up working groups to draw up concrete strategies to realize the benefits to collaboration. Please turn to page nine
Slide 10: Wholesale results
Net revenue was 190.9 billion yen, up 40 percent quarter on quarter. Fixed Income made a strong contribution to revenues across all regions and products. Expenses were 144.3 billion yen and have been steadily declining each quarter. Our cost base has been lowered significantly mainly in personnel ex
Slide 11: Global Markets net revenue
Global Markets booked net revenue of 170.5 billion yen, up 57 percent quarter on quarter. Fixed Income net revenue was 107.9 billion yen, increasing nearly fourfold quarter on quarter. As the heat map on the right shows, the arrows in all regions are pointing up with Rates products having a particul
Slide 12: Investment Banking
As shown on the top left, first quarter net revenue was 20.4 billion, down 27 percent from last quarter. Gross revenue was 33.9 billion yen, declining on the back of lower ECM transactions and the impact of yen appreciation. In Japan, market turmoil and seasonal factors led to a shrink in the fee po
Slide 13: Non-interest expenses
Group non-interest expenses for the first quarter totaled 275.7 billion yen, down 6 percent quarter on quarter due mainly to yen appreciation and lower business development expenses and occupancy and depreciation. Looking at the quarterly trend, you can see we are making progress through our ongoing
Slide 14: Robust financial position
Total assets were 42.9 trillion yen, gross leverage was 16.2 times and net leverage was 9.8 times. Our Tier 1 ratio was 16.9 percent and our CET 1 ratio was 16.3 percent, both up significantly from March due to lower market risk. Applying the fully-loaded 2019 Basel III standard to our balance sheet
Slide 15: Funding and liquidity
Funding and liquidity NOMURA Balance sheet structure = Highly liquid, healthy balance sheet structure —80% of assets are highly liquid trading and related assets that are marked-to-market and matched to trading and related liabilities through repos etc. (regionally and by currency) —Other assets are
Slide 16: Financial Supplement
Financial Supplement 15
Slide 17: Consolidated balance sheet
(billions of yen) Assets Liabilities Total cash and cash deposits Short-term borrowings Total payables and deposits Total loans and receivables Total collateralized financing Trading liabilities Total collateralized agreements Other liabilities Long-term borrowings Teale asset and private Total liab
Slide 18: Value at risk
= Definition = From April 1, 2016, to June 30, 2016 (billions of yen) — 99% confidence level — Maximum: 6.7 — 1-day time horizon for outstanding portfolio — Minimum: = 3.4 — Inter-product price fluctuations considered — Average: 5.1 (billions of yen) Equity Interest rate 42 38 3.9 5.2 49 3.8 44 Fore
Slide 19: Consolidated financial highlights
Full year Quarter (billions of yen) (billions of yen) 8.6% ‘mmm Net income (loss) 100 10.0% attributable to NHI shareholders ——ROE(%) Net revenue Income (loss) before income taxes 346.8 165.2 106.0 19.9 51.6 12.3 62.8 Net income (loss) attributable to Nomura 7 Holdi Inc. ("NHI") sI olders 224.8 131.
Slide 20: Consolidated income
Full year Quarter sen = Revenue Commissions 453.4 432.0 130.3 111.5 102.3 87.8 76.3 Fees from investment banking 95.1 118.3 24.5 44.9 20.0 29.0 17.3 Asset management and portfolio service fees 203.4 229.0 59.9 58.2 57.8 53.1 52.6 Net gain on trading 531.3 354.0 124.7 62.6 105.2 61.5 140.1 Gain on pr
Slide 21: Main revenue items
Full year Quarter ee ten Powis mame ig ag 100 QQ AQ 1 ‘Stock brokerage commissions 252.8 275.0 78.7 71.3 63.7 61.3 48.4 Other brokerage commissions 19.6 23.3 5.2 68 5.4 5.8 4.3 Commissions for distribution of investment trusts 134.3 89.5 34.3 22.0 20.8 12.4 15.8 Other 46.8 44.2 12.2 11.3 12.4 8.3 7.
Slide 22: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter prensonen) Fame gg Retail 161.8 127.6 50.9 36. 27. 12.2 8.7 Asset Management 32.1 36.7 11.7 10.7 5.8 12.2 Wholesale 82.2 15.4 19.7 9.9 -22.8 46.6 Three business segments total 276.1 179.7 82.3
Slide 23: Segment Other: income (loss) before income taxes
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 46.0 40.0 30.0 20.0 14.7 16.1 10.0 6.1 a | 58 00 = -10.0 16 -20.0 -30.0 -23.0 Nata Wonsactons. to economic 15.41 64 14 06 85 12.0 Realized gain on investments in equi ceountios held for operating eauily 47 02 02 0.0 0.0 0.0 0
Slide 24: Retail results
Full year Quarter i ‘Commissions 258.9 220.3, 73.8 55.8 51.8 38.9 38.4 1.2% 48.0% Of which, i 818 78.9 26.4 20.0 18.0 144 13.4 9.1% — -$0.4% ‘Of which, commissions for distribution of i trusts 134.9 93.6 34.9 225 22.0 14.3 176 = 23.3% = -49.6% Sales credit 106.4 86.4 26.0 19.7 23.2 175 18.6 6.6% 28.
Slide 25: Retail client assets
Retail client assets (trillions of yen) 120 = Other 100 = Overseas mutual funds 80 ™ Bond investment trusts Stock investment trusts 60 = Domestic bonds. 40 Foreit bond: "Foreign currency bonds = Equities i) Equities Foreign currency bonds Domestic bonds* Stock investment trusts Bond investment trust
Slide 26: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter (billions of yen) (billions of yen) 1,500 1,000 4 997 1,000 500 352 | = 500 0+ = — “ | 48 -356 248 i) -500 Pranaiis Pras 10 QQ 1 (1). Cash and secunties inflows minus outflows, excluding regional financial institutions. 25 25
Slide 27: Number of accounts
Number of accounts (thousands) _Fyzowis Fy2ots6 —FYQOISIG F201 Accounts with balance 5,294 5,389 5,316 5,366 5,384 5,389 5,390 Equity holding accounts 2,719 2,827 2,700 2,725 2,796 2,827 2,842 Nomura Home Trade / Net & Call accounts 4,216 4412 4,270 4,337 4,384 4,412 4,443 New Individual accounts /
Slide 28: Asset Management results and AuM
Full year Quarter sees Be ea I OE Net revenue 92.4 95.4 26.9 22.9 25.3 20.3 25.9 27.7% 3.7% Non-interest expenses 60.3 58.7 15.2 14.4 14.6 14.5 13.7 5.8% 9.7% Income before income taxes 32.1 36.7 11.7 8.4 10.7 5.8 12.2 111.8% 4.2% Assets under management by company a ic) @ ) re Nomura Asset Manageme
Slide 29: Asset inflows/outflows by business
Asset inflows/outflows by business’ Full year Quarter (bilions of yen) Pramas Prants6 _-FY2016/17 Investment trusts business 3,418 2717 1,252 896 157 412 423 of which ETFs 843 2,339 308 1,294 102 838 24 Investment advisory business 50 2,038 38 1,446 646 -92 169 Net asset inflow 3,469 4,755 1,290 2,3
Slide 30: Wholesale results and revenue breakdown
Full year Quarter (billions of yen) Protas: Fy2018/16 FY2015/16 FY 2016/17 rr 100 QQ 1 Net revenue 789.9 720.3 205.2 192.9 186.0 136.2 190.9 Non-interest expenses 707.7 704.9 185.5 184.3 176.0 159.0 144.3 9.3% 22.2% Income (loss) before income taxes 82.2 15.4 19.7 8.6 9.9 22.8 46.6 - 137.1% Breakdow
Slide 31: Number of employees
Japan 15,973 16,083 16,570 16,381 16,282 16,083 16,792 Europe 3,485 3,424 3,492 3,494 3,433 3,424 3,170 ‘Americas 2,449 2,503 2,439 2,514 2,501 2,503 2,481 Asia and Oceania’ 6,765 6,855 6,788 6,862 6,853, 6,855 6,769 Total 28,672 28,865 29,289 29,251 29,069 28,865 29,212 (1) Includes Powai office in
Slide 32: Disclaimer
yV NOMURA Disclaimer 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
Slide 33: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com