Slide 1: Financial Results for the 2Q of the Fiscal Year Ending March 31, 2022
October 29, 2021 TSE 1st Section: 8698 Financial Results for the 2Q of the Fiscal Year Ending March 31, 2022
Slide 2: Our Business Principles
Our Business Principles Always a step ahead of the “Y” in "MONEY," our name MONEX expresses our desire to embrace all people who are engaged at the forefront of our future. With state-of-the-art IT technology, globally universal values and a sense of professionalism, Monex Group designs innovative w
Slide 3: Table of Contents
Table of Contents Our Business Principles p. 1 Table of Contents p. 2 I. Highlights p. 3 - p.15 II. Consolidated Performance p. 16 - p. 36 III. Business Update p. 37 - p. 51 Appendix: Group Overview p. 52 - p. 61 This is an English translation of Japanese presentation materials prepared in connectio
Slide 4: I. Highlights
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 3
Slide 5: Perception of the Times
1-1 Perception of the Times Monex Group creates new businesses with a vision to stay one step ahead of the times. The world and businesses are becoming increasingly decentralized as economies, sovereignty, and personal values become more diverse. As the holding company of self-driven, independent su
Slide 6: Who We Are
1-2 Who We Are Promoting the growth strategy of each subsidiary to pursue scale and realize the Group’s business principle. Monex Group Crypto Asset Exchange US Online Broker Management Japan Online Broker Unifying Force Asia Pacific Segment Investment Segment Monex Asset Management Japan Catalyst,
Slide 7: Increase Corporate Value of Subsidiaries
2 Increase Corporate Value of Subsidiaries The value of each subsidiary successfully increased under the Group visions, “Global Vision” and “New Beginning (crypto-related business entry).” TradeStation Group (2011-) Coincheck (2018-) • EBITDA*1 Margin : 26% (FYE Mar 2021) • EBITDA Margin : 68% (FYE
Slide 8: Growth Strategy of TradeStation (US segment)
3-1 Growth Strategy of TradeStation (US segment) TradeStation has expanded its customer base through a successful transformation of its business strategy over the past several years, including re-branding, commission strategy and expansion of its product initiatives. TradeStation takes a strategy to
Slide 9: Growth Strategy of Coincheck (Crypto Asset segment)
3-2 Growth Strategy of Coincheck (Crypto Asset segment) Coincheck aims to create a “Digital Economy” by expanding crypto asset trading and new businesses such as NFT and IEO. FYE2022 First IEO* in Japan FYE2021 (¥ in billions) The amount equivalent to First TV commercial after 16 operating incom
Slide 10: Growth Strategy of Monex Securities (Japan Segment)
3-3 Growth Strategy of Monex Securities (Japan Segment) Monex Securities to generate stable cash flow over time as a Japan online securities broker. Steady growth in customers’ assets in custody and customer base enhances the asset-management model. Operational Cash Inflow and Customers' Assets in C
Slide 11: History of Total Return Ratio and Business Investment
4-1 History of Total Return Ratio and Business Investment Prioritized returning profit to shareholders as well as investing for long-term growth strategies. Cumulative Return Ratio*1 Investment Record as of FYE Mar 2021 Acquisition or establishment of subsidiary Total Return Amount*2 Strategic inves
Slide 12: Change in Shareholder Return Policy
4-2 Change in Shareholder Return Policy Pursuing further growth, new policy provides for a stable dividend payment of more than 7.5 yen per share for half a year and flexible share buybacks. 7.6 yen for Sep. 2021. Cash Flow Profit Generation At least 7.5 yen for half year Growth Return Operating I
Slide 13: History of Shareholders' Distribution
4-3 History of Shareholders’ Distribution Stable dividend payments and flexible buybacks of its own shares, while investing in the long-term growth. ◆ History of dividend per share ◆ Return on equity ratio Year-end 18% 17.3% （yen） Interim 20 15% 12.9% 15 12% 7.0 More than 7.5 9% 8.3% 10 2.6 7.5 5.0%
Slide 14: Highlights – Consolidated 1st half FYE Mar 2022 (EBITDA)
5-1 Highlights – Consolidated basis for the 1st half of FYE Mar 2022 (EBITDA) Consolidated EBITDA for the 1st half was ¥20B. In the 2nd half of this fiscal year, the Group will keep investing in growth of the U.S. segment, while aiming for long- term growth of the entire Group. Highlights of Consoli
Slide 15: Highlights – Consolidated 1st half (Revenues)
5-2 Highlights – Consolidated basis for the 1st half of FYE Mar 2022 (Revenues) Revenue in the 1st half of FYE Mar 2022 from the three main segments increased significantly by +74% YoY, illustrating steady growth in each business segment with different regional and business characteristics. 1st half
Slide 16: Highlights – Cryptoasset
5-3 Highlights – Consolidated basis for the 1st half of FYE Mar 2022 (Cryptoasset) Blockchain and crypto asset-related businesses contribute to the Group revenue as a growth driver. Crypto Trading Spread, Revenue from NFT and IEO 20.4B （bill JPY） YoY x8 1st half of FYE Mar. 2022 200 Blockchain Relat
Slide 17: II. Consolidated Performance
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 16
Slide 18: Highlights 2Q of FYE Mar. 2022 (3 months) 1/4
Highlights 2Q of FYE Mar. 2022 (3 months) 1/4 Pre-tax quarterly profit was ¥ 7.2 B, while promoting strategic investments for medium- and long-term growth. Recurring revenue from mutual fund and margin trading services as well Japan as revenues from growth products increased. Segment profit* was ¥ 3
Slide 19: Highlights 2Q of FYE Mar. 2022 (3 months) 2/4
Highlights 2Q of FYE Mar. 2022 (3 months) 2/4 ◆Total operating revenue after deducting financial expenses and cost of sales, and quarterly profit attributable to owners of the Company (JPY million) Total operating revenue after deducting financial expenses and cost of sales Quarterly Pre-taxes Profi
Slide 20: Highlights 2Q of FYE Mar. 2022 (3 months) 3/4
Highlights 2Q of FYE Mar. 2022 (3 months) 3/4 ◆Total operating revenue after deducting financial expenses and cost of sales, and Segment profit (JPY million) Total operating revenue after deducting financial expenses and cost of sales Segment profit (Quarterly profit before income taxes) 8,000 6,880
Slide 21: Highlights 2Q of FYE Mar. 2022 (3 months) 4/4
Highlights 2Q of FYE Mar. 2022 (3 months) 4/4 ◆Total operating revenue after deducting financial expenses and segment profit (JPY million) Total operating revenue after deducting financial expense Asia Pacific Segment profit (Quarterly profit before income taxes) 800 600 528 394 359 400 323 321 198
Slide 22: YoY Comparison (6 months) Consolidated Performance
YoY Comparison (6 months) Consolidated Performance FYE Mar. 2021 FYE Mar. 2022 2Q 2Q Rate of (JPY million) Variance Reference (Apr. 2020– (Apr. 2021– change Sep. 2020) Sep. 2021) P23: Analysis of Japan segment Total operating revenue after 27,106 46,799 +19,693 +73% P25: Analysis of US segment (USD)
Slide 23: YoY Comparison (6 months) Segment Performance
YoY Comparison (6 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q Total operating revenue after deducting financial expenses 13,324 14,754 10,672 11,192 2,592 2
Slide 24: YoY Comparison (6 months) Analysis: Operating Revenue (Japan)
YoY Comparison (6 months) Analysis: Operating Revenue Japan : Recurring revenue from margin trading and mutual fund increased. Revenue from growth products such as U.S. equities and crypto asset CFDs also increased, resulting in total revenue increased of approx. 11%. ■ Total operating revenue after
Slide 25: YoY Comparison (6 months) Analysis: SG&A (Japan)
YoY Comparison (6 months) Analysis: SG&A Japan : Fixed costs reduced such as system-related expenses to streamline its cost structure in the long-run. ■ SG&A SG&A Total +4.1% (+473) (JPY million) * Figures in parentheses indicate the variance from the previous year (JPY million) 15,000 [these are co
Slide 26: YoY Comparison (6 months) Analysis: Operating Revenue (USD)
YoY Comparison (6 months) Analysis: Operating Revenue (USD) US : Total revenue increased YoY due to a slight increase in commissions revenue due to account growth, despite a significant YoY drop in volatility (VIX), higher net interest income driven by increased margin, securities lending and crypto
Slide 27: YoY Comparison (6 months) Analysis: SG&A (USD)
YoY Comparison (6 months) Analysis: SG&A (USD) US : Advertising and compensation and benefits increased YoY, as expected, due to execution of account growth strategy and product initiatives. Professional fees increased due to preparing to raise capital and funds in the US. ■ SG&A SG&A Total +29.6% (
Slide 28: YoY Comparison (6 months) Analysis: Operating Revenue (Crypto)
YoY Comparison (6 months) Analysis: Operating Revenue Crypto : Total revenue increased by 8 times YoY. Coincheck's trading volume at the market place increased significantly due to the booming market, the addition of altcoin offering, and a significant account growth, which TV commercials help. In a
Slide 29: YoY Comparison (6 months) Analysis: SG&A (Crypto)
YoY Comparison (6 months) Analysis: SG&A Crypto : Advertising expenses increased due to proactive marketing efforts such as TV commercials and web marketing initiatives to acquire new accounts. SG&A Total +276.6% (+4,911) ■ SG&A * Figures in parentheses indicate the variance from the previous year (
Slide 30: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance （JPY million） 1Q FYE Mar. 2Q FYE Mar. 2022 2022 Rate of Variance change Reference (Apr. 2021- (Jul. 2021- Jun. 2021) Sep. 2021) P31: Analysis of Japan segment Total operating revenue after 26,069 20,730 -5,338 -20% P33: Analysis of US segment (USD)
Slide 31: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 1Q 2Q 1Q 2Q 1Q 2Q 1Q 2Q 1Q 2Q Total operating revenue after deducting financial expenses and 7,373 7,381 5,728 5,464 12,739
Slide 32: QoQ Comparison (3 months) Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan : Recurring revenue from mutual funds and margin trading and revenue from growth products increased. Margin trading share is on an upward trend after the pricing change for margin commissions in August. ■Quarterly total operating revenue af
Slide 33: QoQ Comparison (3 months) Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan : Marketing expenses increased due to the favorable account openings. Fixed costs decreased such as system-related expenses to streamline its cost structure. Quarterly SG&A +0.7％ (+45) ■Quarterly SG&A * Figures in parentheses indicate the variance from
Slide 34: QoQ Comparison (3 months) Analysis: Operating Revenue (USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US : Total revenue declined QoQ principally on lower net crypto lending income due to market environment. ■Quarterly total operating revenue after deducting financial expenses and cost of sales (USD thousand) Quarterly total operating reven
Slide 35: QoQ Comparison (3 months) Analysis: SG&A (USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US : Timing of advertising expenses accelerated in 2Q, as marketing program expanded to build awareness. TradeStation continued to increase headcount to support product development. ■Quarterly SG&A Quarterly SG&A +15.2% (+8,194) (USD thousand) * Figures
Slide 36: QoQ Comparison (3 months) Analysis: Operating Revenue (Crypto)
QoQ Comparison (3 months) Analysis: Operating Revenue Crypto : Net trading income decreased due to calm trading volume in the crypto asset market. Other revenues from new businesses have grown steadily. ■Quarterly total operating revenue after deducting financial Quarterly total operating revenue af
Slide 37: QoQ Comparison (3 months) Analysis: SG&A (Crypto)
QoQ Comparison (3 months) Analysis: SG&A Crypto : Bonus and management consulting fee decreased due to a lower revenue, resulting in over 20% decrease of the total expense. Quarterly SG&A -21.8％ (-818) ■Quarterly SG&A * Figures in parentheses indicate the variance from the previous quarter (JPY mill
Slide 38: III. Business Update
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 37
Slide 39: Business Update Japan Segment 1/4
Business Update Japan Segment 1/4 Reaching out using offline channels to acquire new customer segments. Leverage the Competence of Monex Securities to Drive “Asset Management Model” Online Function Offline Function Monex Securities’ Customer Base Strengths Services Historical AUM of Offline Channels
Slide 40: Business Update Japan Segment 2/4
Business Update Japan Segment 2/4 Continued focus on revenues other than Japan equity commissions, including recurring revenues and U.S. stock trading revenues. Growth in the Base of Recurring Revenue U.S. Equity Trading • To reduce dependence on Japan equity • TradeStation enables Monex to offer th
Slide 41: Business Update Japan Segment 3/4
Business Update Japan Segment 3/4 Monex Asset Management has quadrupled its AUM within a year, reaching 50 billion JPY in total. Assets Under Management Grow Strongly （bill JPY） Monex Asset Management Total AUM Total Asset Under Management 600 50B+ JPY* (Quadrupled within a year) 500 Annual growth ＊
Slide 42: Business Update Japan Segment 4/4
Business Update Japan Segment 4/4 Monex Activist Fund has AUM* of 11.5 billion yen including domestic private placement. Engagement Activities Further Revitalized • AUM has reached 11.5 billion yen* due Base Value Favorable Performance of AUM to consecutive engagement activities. (After deducting ma
Slide 43: Business Update US Segment 1/3
Business Update US Segment 1/3 TradeStation’s trading and learning platform appears to support increased interest in self-directed investment among Millennials and Gen-Z. Account Additions & Client Assets Trading Volumes and VIX • # of active accounts: 160k (+30% YoY) • TradeStation’s trading volume
Slide 44: Business Update US Segment 2/3
Business Update US Segment 2/3 Growth of cryptocurrency trading reflects TradeStation multi-asset brokerage positioning and platform versatility Commission Revenue TradeStation Crypto (TCI) • Brokerage revenue*1 in total was $37M in 2Q. • TCI promotional marketing is attracting new accounts and cryp
Slide 45: Business Update US Segment 3/3
Business Update US Segment 3/3 TradeStation is building on its technology and operations strength to re-launch as a growth company appealing to an expanding market of self-directed investors. Strengths of TradeStation Well-Defined Growth and Product Strategy Marketing • Investments in brand awarenes
Slide 46: Business Update Crypto Asset Segment 1/4
Business Update Crypto Asset Segment 1/4 Coincheck maintains approx. 30% of the domestic account share in the growing crypto asset industry. Strengths of Coincheck Growth Opportunity Coincheck (crypto trading service) The crypto industry as a whole is still growing. The - # of app downloads 4.42MDLs
Slide 47: Business Update Crypto Asset Segment 2/4
Business Update Crypto Asset Segment 2/4 Coincheck maintains a high operating profit margin while focusing on new account acquisition with marketing. Marketing Operating Profit Margin ・ By conducting in-house web marketing instead of • The operating profit margin for the quarter was outsourcing to a
Slide 48: Business Update Crypto Asset Segment 3/4
Business Update Crypto Asset Segment 3/4 Achieved the first IEO in Japan, with applications exceeding ¥22.4 billion for a funding target of over ¥0.9 billion. Japan’s First IEO Coincheck is responsible for screening of issuers and token, listing, and even the exchange of the tokens after listing. Is
Slide 49: Business Update Crypto Asset Segment 4/4
Business Update Crypto Asset Segment 4/4 Expanding the NFT business on the strength of its customer base and safety as an FSA-registered firm. NFT business Against a backdrop of an expanding NFT market with the entry of various companies and the possibility of the introduction of regulations, Coinch
Slide 50: Business Update Asia Pacific Segment
Business Update Asia Pacific Segment Business in Asia Pacific segment was strong despite economic uncertainty in China. Monex Boom / Monex Australia Cherry Technology Co., Ltd (China) Accounts with balance: 22K (+27% YoY) Profit of equity method investments recovered significantly from the previous
Slide 51: Business Update Investment Business
Business Update Investment Business Continued to expand investment portfolio with the establishment of the MV2 fund following MV1. Investment Entity Investment Portfolio MV1 fund to shift to incubation phase Investment 2.65 billion yen (Founded in Jan. 2019) Size Completed investment phase with 58 I
Slide 52: Business Update ESG/Sustainability Management
Business Update ESG/Sustainability Management Published Monex Group Integrated Report 2021 (English version in process), describing details of new business principles and Monex’s DEI* approach To realize the principle “optimizing people’s life-time balance sheet” Diverse and effective governance DEI
Slide 53: Appendix. Group Overview
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 52
Slide 54: Group Overview－Revenues, Costs, and Employees
Group Overview－Revenues, Costs, and Employees Total operating revenue Selling, general and The amount equivalent to after deducting financial expenses administrative expenses operating income 2％ 1％ 2％ 0％ 2％ 2％ 12％ 25％ 28％ ¥73.7B 39％ ¥49.9B 46％ ¥23.8B FYE Mar 2021 FYE Mar 2021 FYE Mar 2021 9％ 30％ 40％
Slide 55: Corporate Governance
Corporate Governance Established global-standard corporate governance practices and emphasis on dialogue with retail/institutional investors. Adoption of “company with three committees” structure - highly effective executive management monitoring system. - Adopted “company with committees” structure
Slide 56: Monex Group structure
Monex Group (As of September 30, 2021) Listed Holding Company [Japan] [US/Europe] [Asia Pacific] Crypto asset exchange Online Securities Company Monex International Limited service provider Holding Company in Hong Kong TradeStation Group, Inc. Online Securities Company Holding Company in the U.S. Mo
Slide 57: Overview of Monex Group and Main Subsidiary Companies
Overview of Monex Group and Main Subsidiary Companies ■ Monex, Inc. (Tokyo, Japan) ■ Coincheck, Inc. (Tokyo, Japan) One of the major online brokerage firms in Japan Crypto asset Exchange/Marketplace agency - President : Yuko Seimei - President: Satoshi Hasuo - Founded in 1999 - Founded in 2012, join
Slide 58: History of Monex Group
History of Monex Group Japan U.S. Asia Pacific 1982 - TradeStation Technologies, Inc. is formed as Omega Research, Inc. 1997 - TradeStation stock lists on NASDAQ - Boom Securities (H.K.) Limited is founded (now Monex Boom Securities (H.K.) Limited), becoming the first in Asia Pacific to launch Inter
Slide 59: Investors' Guide
Investors’ Guide ■ Shareholders distribution ■ Shareholders & indicators per share ◆ Our basic policy for shareholders distribution ◆ Major shareholders and shareholder breakdown Monex Group aims to To ensure shareholder return, we will (as of September 30, 2021) Monex Group, Inc. consistently offer
Slide 60: Investment Segment – Portfolio 1/3
Investment Segment – Portfolio 1/3 ◆ Monex Ventures, Inc. P2P lending EC Settlement DLT* Prop Tech Online lending （Registered as Type 2 Financial Instruments Business） AI/Big Data Thematic Investment AI/Big Data Vacation Rental B2B SaaS E-market place （Registered as Type 1 Financial Instruments Busi
Slide 61: Investment Segment – Portfolio 2/3
Investment Segment – Portfolio 2/3 ◆ MV I Investment Limited Partnership B2B SaaS E-market place B2B SaaS Logistics B2B Saas EC Asset Management EC E-market place Ad Tech B2B Saas B2B SaaS B2B SaaS B2B SaaS Agri-Tech B2B Saas Insure Tech KYC / Big Data B2B SaaS Robotics Marketplace AI / Sports-tech
Slide 62: Investment Segment – Portfolio 3/3
Investment Segment – Portfolio 3/3 ◆ MV I Investment Limited Partnership B2B SaaS EC EC VR Elderly Care B2B SaaS Audio Content Marketing VR Healthcare ◆ MV II Investment Limited Partnership Pet-tech HR Marketplace B2B SaaS X-Tech FinTech B2B SaaS 61