Monex Group, Inc. · TSE:8698
Monex — Q1 FYE March 2007 Earnings Presentation
30 slides from Monex's earnings presentation, Jul 21, 2006
Slide 1: Financial Results 1Q of Fiscal Year Ending March 31, 2007
Financial Results 1Q of Fiscal Year Ending March 31, 2007 July 21, 2006 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. If there i
Slide 2: Table of Contents
Table of Contents 1. Financial Results 2. Business Model and Future Development ■ Summary ・・・ 3 ■ Mission Statement ・・・ 10 ■ Recognition of Environments and Monex’s Positioning ・・・ 11 Financial Summary ■ Competition Analysis ・・・ 12 ■ 1Q of FYE Mar. 31, 2006 ■ Investor’s Education ・・・ 13 vs. FYE Mar.
Slide 3: 1. Financial Results
1. Financial Results 2. Business Model and Future Development 3. Appendix 2
Slide 4: Summary
Summary “Sustaining a growth trend, Monex continues to establish a business model for a new era.” 1. In spite of a decline in individuals’ trading value at TSE, OSE and JASDAQ by approximately 30% compared to the previous quarter, Monex managed a decline in its operating revues by approximately 20%
Slide 5: Financial Summary: 1Q FYE Mar. 2006 vs. 1Q FYE Mar. 2007
Financial Summary : 1Q of FYE Mar. 31, 2006 vs. 1Q of FYE Mar. 31, 2007 (in 3 months) (in million yen, %) 1Q of FYE 1Q of FYE Mar. 31, 2006 Mar. 31, 2007 Change (Apr. 2005-Jun. 2005) (Apr. 2006-Jun. 2006) Operating Revenues 6,151 9,335 +51.8% Net Operating Revenues 5,774 8,904 +54.2% SG&A 2,781 3,73
Slide 6: Financial Summary: 4Q FYE Mar. 2006 vs. 1Q FYE Mar. 2007
Financial Summary : 4Q of FYE Mar. 31, 2006 vs. 1Q of FYE Mar. 31, 2007 (in 3 months) (in million yen, %) 4Q of FYE 1Q of FYE Mar. 31, 2006 Mar. 31, 2007 Change (Jan. 2006-Mar. 2006) (Apr. 2006-Jun. 2006) Operating Revenues 11,995 9,335 -22.2% Net Operating Revenues 11,686 8,904 -23.8% SG&A 3,662 3,
Slide 7: Financial Highlights (Quarterly Trend)
Financial Summary : Financial Highlights (Quarterly Trend) Net Operating Revenues SG&A （in million yen) （in million yen) 11,642 11,686 12,000 12,000 8,706 8,904 8,000 8,000 5,774 3,323 3,662 3,730 4,000 4,000 2,781 2,869 0 0 1Q of FYE 2Q of FYE 3Q of FYE 4Q of FYE 1Q of FYE 1Q of FYE 2Q of FYE 3Q of
Slide 8: Sustaining High Profitability
Financial Summary : Sustaining High Profitability Profitability (Operating Income/Operating Revenues) Cost Structure 80% 69% Others 11％ 67% Commission paid 65% (freight and and association communication, fees 13% tax and dues, etc.) Highly correlated 60% 55% to the trading value of customers 49% Adv
Slide 9: Comparison with Competitors: Revenues/SG&A Per Customers' Assets in Custody
Comparison with Competitors : Revenues/SG&A Per Customers’ Assets in Custody (Annualized) Matsui MatsuiSecurities Securities(consolidated) (consolidated) 4.00% 9Revenues per customers’ assets in custody declined due to the unfavorable 4Q 4Qof ofFYE FYEMar. Mar.2006 2006 market condition 9Monex targe
Slide 10: 2. Business Model and Future Development
1. Financial Results 2. Business Model and Future Development 3. Appendix 9
Slide 11: 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 12: Recognition of Environments and Monex's Positioning
Recognition of Environments and Monex’s Positioning As the population in Japan has started to decrease and its economic growth has slowed down, there is a change in individual’s investment needs and competitive environment of financial institutions Environment ≪Past ～Present≫ ≪Future≫ ・Life after re
Slide 13: Competition Analysis: Our Strategies
Competition Analysis : Our Strategies As investment needs of individuals increase, we will expand Premium Online Financial Services with two core strategies 【Active Investors】 【Non-Active Investors】 Behavior ・Trading on their own initiative through online brokerage firms ・Prefers bank deposits even
Slide 14: Investor's Education
Investor’s Education : In-depth Investment Education for All Individual Investors Offline Services ： Seminars Online Services ： e-Learning Service “ Monex Campus” ◆Constantly holding seminars as a “real learning space” ◆1,000 monitors participated in our trial campaign from April to June Large scale
Slide 15: Current and Future Revenue Structure by Product
Current and Future Revenue Structure by Product Presupposition of Change of Revenue Structure Increase in assets under custody Developing businesses other than brokerage business to Establishing a strong revenue base by obtaining inflow from bank depositors offset an expected decline in stock market
Slide 16: Brokerage Business: Providing Premium Services
Brokerage Business : Providing Premium Services Providing Original Investment Information Providing Original and Selected Investment Information Establishment of Investment Information Office ・On July 3, 2006, established an independent division to enhance investment information and meet the 独自サービ
Slide 17: Brokerage Business: Pricing Strategy
Brokerage Business : Pricing Strategy Customer’s Ultimate Goal : Improvement of Investment Return ⇒ Monex’s Strengths : Attractive commission rates Stable and high-speed trading platform Value-added services Commission structure suitable for customers’ Stability and speediness is core function for C
Slide 18: Reinforcement of Systems and Business Continuity Plan
Reinforcement of Systems and Business Continuity Plan Providing Stable Systems Developing Stable Platform ・No system failure of our Japanese stock order systems during session after the merger. However, a response delay occurred for about ten to twenty minutes per trade in May 2005. (This was fully
Slide 19: Underwriting Business
Underwriting Business : Killer Contents for Attracting Individual’s Risk Money and Increasing New Accounts Constant increase in Underwriting Share Track Records Amount Amount of of IPOs IPOs Number Number of of IPOs IPOs ◆Steadily building up track records 120 120 (one (one hundred hundredmillion mi
Slide 20: Fixed Income and FOREX Businesses
Fixed Income and FOREX Businesses : Making Fixed Income Investments More Familiar Fixed Income Strengthening Fixed Income Business as a major product next to Stocks and Mutual Funds With signs of rising interest rates, Fixed Income Investment is one of the considerable measures as “the first step fr
Slide 21: Mutual Fund Business: Front-Runner among Online Distributors
Mutual Fund Business : Front- Runner among Online Distributors Steady Growth in Sales Value and Number of trades Huge Increase in Number of Mutual Fund Holders # of holders 70,000 Monthly Sales Value # of trades 60,000 100 million yen Number of Trades per Business Day 50,000 300 4,500 40,000 4,000 2
Slide 22: New Asset Management Services
New Asset Management Services: Innovative Investment Products for Passive Investors First Full-fledged Alternative Investment Fund “Kaburobo” / SMA Investment Trust : “Asia Focus” [Launched in Jul.2005] ◆Establishment of algorithmic investment company Total Fund Size : Approx. 10.9 billion yen [As
Slide 23: Corporate Governance
Corporate Governance： Pursuit of Managing Various Risks concerning Business Model and Business Operations Strengthening Internal Control System Reinforcement of Crisis-Management System ◆ Enforcement of checking system of the management ◆Alliance with outside legal counsel by increasing external boa
Slide 24: Recruitment and Human Capital Reallocation
Recruitment and Human Capital Reallocation : Basis for Creating New Business Model Recruitment and Continuous Review of Operations 1. Hiring personnel with origination capabilities We recognize “products/services origination” as a key to survive in fiercer competition with entrants and deep discount
Slide 25: To Our Investors
To Our Investors Diversified Shareholder’s Portfolio Open Shareholder’s Meeting 【March 31, 2005】 【March 31, 2006】 ◆June 24, 2006 Shareholder’s Meeting Number of Shareholders: 38,425 Number of Shareholders: 48,941 464 people attended and 861 voting rights were exercised Others excluding through the i
Slide 26: 3. Appendix
1. Financial Results 2. Business Model and Future Development 3. Appendix 25
Slide 27: The MBH Group
The MBH Group % = investment ratio 100% 100% 33.3% Premium Online Financial Institution Discovery and Incubation of New Businesses Aspiring to introduce a new IPO system 34% MBI 70％ 51％ Monex Busuiness Incubation, Inc. 【Established September, 2005】 【Established September 2006】 【Established May 2005
Slide 28: Reference: Individual Investor's Trend
< Reference > Individual Investor’s Trend Individual Investors in Japan The Ratio of Inte rne t Trading Value Individual investors' trading is in Individual Inve stors Risk of depending only influenced easily from the trend of the 100% on stock brokerage for earnings 86% stock market 90% 83% 80% 84%
Slide 29: Expanding Our Customer Base
Expanding Our Customer Base: New Business Channels by Alliance During DuringFYE FYEMar. Mar.2007, 2007,we weplan plantotoinvest invest7% 7%ofofnet netoperating operatingincome incomeininmarketing marketingactivities activitiesand andwill willincrease increase ads and promotional campaigns to develop
Slide 30: Competitive Services and Products
Competitive Services and Products: For All Customers’ Satisfaction [As of July 20, 2006] Alternative Equity Fixed Income Mutual Fund Others Investments Stock Small Unit In-house Night Time JGB Monthly Credit Trading Lending China/India Stop Loss China High Low Commodities ATM Margin U.S. Stock Tradi
Monex Group — Q1 FYE March 2007 Earnings Presentation on 6ix