Nomura Holdings, Inc. · TSE:8604
Nomura — Investor Presentation (May 2004)
47 slides from Nomura's investor presentation, May 21, 2004
Slide 1: Investor Presentation
Investor Presentation Nobuyuki Koga President & CEO Nomura Holdings, Inc. May 21, 2004 This is a summary of the Investor Presentation on May 2004. Date: May 21, 2004(Friday) Place: 7th floor Nomura Securities Co., Ltd. Speaker: Nobuyuki Koga President & CEO, Nomura Holdings, Inc. This document is pr
Slide 2: Outline of Presentation
Outline of Presentation II Business Environment This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2004 Nomura Holdings, Inc. All rights reserved. Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or othe
Slide 3: II Business Environment
II Business Environment Sustainable Economic Growth in Japan Recovery of Macro Economy Progress of Corporate Restructuring Shift of Individual Financial Assets to Risk Assets II II Review of Operating Results III III Business Strategy z Group Vision z Domestic Retail z Asset Management z Glo
Slide 4: Sustainable Economic Growth in Japan
Sustainable Economic Growth in Japan Sustainable Economic Economic Recovery Growth 2002 2003 2004(f) GDP GDP (%) (%) 1.2 3.2 2.7 (FY) Source: Nomura Key Drivers z Recovery of Macro Economy z Progress of Corporate Restructuring z Shift of Individual Financial Assets to Risk Assets I Business Environm
Slide 5: Recovery of Macro Economy (1)
Recovery of Macro Economy (1) (% QoQ annualized) Breakdown of Japanese Real GDP 12.0 Real GDP 10.0 Private Consumption Exports (Gross) Private Capital Investment 8.0 Private Inventory Other Components 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 2002 2003 2004 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 (CY) Source:
Slide 6: Recovery of Macro Economy (2)
Recovery of Macro Economy (2) Value of Exports from Japan Global Market Size of (Trillions of yen) (Trillions of yen) Core Digital Products 18 2.0 Exports to US (LHS) Exports to China (LHS) Recordable Recordable DVD’s DVD’s 15 1.5 12 Digital Digital Cameras Cameras Plasma Plasma TV’s TV’s 9 1.0 6 0.
Slide 7: Progress of Corporate Restructuring (1)
Progress of Corporate Restructuring (1) Nominal Wages (YoY, %) Employment 105 8 100 Part-time Part-time workers workers 6 100 4 95 91.9 2 90 0 85 -2 Full-time Full-time workers workers 80 -4 91 92 93 94 95 96 97 98 99 00 01 02 03 04 (CY) 91 92 93 94 95 96 97 98 99 00 01 02 03 (CY) Note: 12-month mov
Slide 8: Progress of Corporate Restructuring (2)
Progress of Corporate Restructuring (2) (Deals) M&A 2,000 Other 1,800 Group restructuring Strengthening existing business 1,600 Entering new markets 1,400 1,200 1,000 800 600 400 200 0 95 96 97 98 99 00 01 02 03 (CY) Note: Calculated on calendar year basis excluding financials Source: Nomura, using
Slide 9: Progress of Corporate Restructuring (3)
Progress of Corporate Restructuring (3) D/E Ratio & ROE (NOMURA 400, excluding financials) 200 180 160 D/E D/E ratio ratio (%) (%) 140 116% 120 100 14 12 10 9.0% 8 6 ROE ROE (%) (%) 4 2 0 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 (FY) (e) (f) Source: Nomura I Busines
Slide 10: Progress of Corporate Restructuring (4)
Progress of Corporate Restructuring (4) (Trillions of yen) Free Cash Flow (NOMURA 400, excluding financials) (Trillions of yen) 30 20 Cashflow (LHS: A) 25 CAPEX (LHS: B) 20 Free Cash Flow (RHS:A-B) 15 10 10 5 0 0 -5 -10 -15 -10 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03(
Slide 11: Shift of Individual Financial Assets to Risk Assets (1)
Shift of Individual Financial Assets to Risk Assets (1) Comparison of Individual Financial Assets, Japan and US Japan Japan US US Total ¥1,410 trillion (2003.12) Total US$32 trillion (2003.12) Investment Investment Trusts 2% Trusts 13% Bonds 2% Bonds 7% Cash & Deposits Equities 7% Equities 32% 12% S
Slide 12: Shift of Individual Financial Assets to Risk Assets (2)
Shift of Individual Financial Assets to Risk Assets (2) Shares Held by Individual Investors (%) (Yen) 40,000 35,000 30,000 Nikkei Nikkei Stock Stock Average Average 25,000 20,000 15,000 10,000 (%) 5,000 30 25 20 Shares Shares held held by by individual individual investors investors (%) (%) (value (
Slide 13: Shift of Individual Financial Assets to Risk Assets (3)
Shift of Individual Financial Assets to Risk Assets (3) (Trillions of yen) Net Assets in Stock Investment Trusts 45 50,000 Nikkei Stock Average (RHS) 40 45,000 Stock investment trusts (LHS) 40,000 35 (Yen) 35,000 30 23.3 23.3 trillion trillion yen yen 30,000 25 10.4 10.4 trillion trillion yen yen 25
Slide 14: Shift of Individual Financial Assets to Risk Assets (4)
Shift of Individual Financial Assets to Risk Assets (4) Tax Reforms for Individual Investors Jan 2003 Jan 2008 Capital gains on 26% 10% 20% listed stocks, etc. (A) (B) (B) Apr 2003 Apr 2008 Dividends of listed stocks, MAX 50% 10% 20% etc. (C) (D) (D) Jan 2004 Jan 2008 Capital gains on stock investme
Slide 15: Shift of Individual Financial Assets to Risk Assets (5)
Shift of Individual Financial Assets to Risk Assets (5) Investments in Foreign Financial Assets by Individuals* (Trillions of yen) (Yen/US$) 18 ¥16.4 ¥16.4 trillion trillion 150 16 140 ¥/US$ (RHS) 130 14 120 12 110 10 100 ¥5.4 ¥5.4 trillion trillion 8 90 6 80 70 4 60 2 0 97 98 99 00 01 02 03 (CY) *
Slide 16: Review of Operating Results
II Business Environment z Sustainable Economic Growth in Japan z Recovery of Macro Economy z Progress of Corporate Restructuring z Shift of Individual Financial Assets to Risk Assets II II Review of Operating Results III III Business Strategy z Group Vision z Domestic Retail z Asset Management z Glo
Slide 17: Financial Results
Financial Results Historical Performance (Billions of yen) (%) 350 18 ROE (RHS) 16 300 Income before income taxes (LHS) 282.7 Net income (LHS) 14 250 11.1 12 10.1 200 10 173.0 168.0 172.3 7.4 150 8 119.9* 6 100 4 47.4 50 2 0 0 FY02.3 FY03.3 FY04.3 * Includes cumulative effect of accounting change II
Slide 18: Income before Income Taxes by Business Segment
Income before Income Taxes by Business Segment (Billions of yen) 200 191.3 FY02.3 Total Income before Income Taxes for 3 Business Segments 175 FY03.3 FY04.3 FY02.3 FY03.3 FY04.3 150 138.5 221.9 129.9 217.0 125 100 91.0 79.5 75 50 35.7 25 20.5 10.2 3.2 0 -1.0 Domestic Retail Global Wholesale Asset Ma
Slide 19: Business Strategy
II Business Environment z Sustainable Economic Growth in Japan z Recovery of Macro Economy z Progress of Corporate Restructuring z Shift of Individual Financial Assets to Risk Assets II II Review of Operating Results III III Business Strategy z Group Vision z Domestic Retail z Asset Management z Glo
Slide 20: Group Vision
Group Vision Become a Globally Competitive Japanese Financial Services Group Maintain an Average Consolidated ROE of 10-15% over the Medium to Long Term Focus Points Broaden Client Base Span Divisions to Capitalize on Group Strengths Maximize Response Speed to Change III Business Strategy 20 F
Slide 21: Business Strategy by Division
II Business Environment z Sustainable Economic Growth in Japan z Recovery of Macro Economy z Progress of Corporate Restructuring z Shift of Individual Financial Assets to Risk Assets II II Review of Operating Results III III Business Strategy z Group Vision z Domestic Retail z Asset Management z Glo
Slide 22: Goals & Strategy (Domestic Retail)
Goals & Strategy (Domestic Retail) Goals Broaden customer base Offer high-quality financial services Strategy Further develop Core Value Formation Strategy III Business Strategy – Domestic Retail 22 First, Domestic Retail. Domestic Retail’s goals are to broaden its customer base and offer high
Slide 23: Broaden Customer Base (1)
Broaden Customer Base (1) Client Assets (Domestic Retail Division, including financials) (Trillions of yen) (Yen) 37.2 37.2 trillion trillion yen yen 40.8 40.8 trillion trillion yen yen 40,000 40 Nikkei Stock Average (RHS) 30,000 30 20,000 20 10,000 10 0 85.3 86.3 87.3 88.3 89.3 90.3 91.3 92.3 93.3
Slide 24: Broaden Customer Base (2)
Broaden Customer Base (2) Retail Client Assets (Trillions of yen) (Yen) 40 25,000 Others Investment trusts 32.1 32.1 trillion trillion yen yen 35.2 35.2 trillion trillion yen yen Equities Domestic bonds Foreign bonds 20,000 30 Nikkei Stock Average (RHS) 15,000 20 10,000 10 5,000 0 0 FY98.3 FY99.3 FY
Slide 25: Broaden Customer Base (3) Bonds
Broaden Customer Base (3) <Bonds> Retail Foreign Currency Bond Assets JGBs for Individual Investors (Trillions of yen) (Trillions of yen) 4 1.5 1st 1st 3.7 3.7 trillion trillion yen yen 31% 32% Nomura’s share Other distribution amount Post Office distribution amount 3 Nomura’s amount 1.6 1.6 trillio
Slide 26: Broaden Customer Base (4) Equities
Broaden Customer Base (4) <Equities> (Thousands Equity Holding Accounts/Retail Equity Assets (Trillions of yen) of accounts) 1,600 16 18 ¥20,337 16 trillion trillion yen yen ¥20,337 Nikkei Stock Average Equity Assets (RHS) 15 Equity Holding Accounts (LHS) 1,400 12 16.3 16.3 trillion trillion yen yen
Slide 27: Further Develop Core Value Formation Strategy
Further Develop Core Value Formation Strategy Wealthy Investors/ Affluent Investors WM Establish Financial Management Division Section Financial Open Cashless Branch Office Consulting Section FA Section Strengthen Financial Advisor Channels SA Section Customer Customer Service Service Section Sectio
Slide 28: Next is Asset Management
II Business Environment z Sustainable Economic Growth in Japan z Recovery of Macro Economy z Progress of Corporate Restructuring z Shift of Individual Financial Assets to Risk Assets II II Review of Operating Results III III Business Strategy z Group Vision z Domestic Retail z Asset Management z Glo
Slide 29: Goals & Strategy - Asset Management
Goals & Strategy - Asset Management Goals Increase Assets under Management Expand Number of Pension Administration Contracts and Product Offerings Strategy Capitalize on Group Strength Enhance Value Added for Asset Management Services Strengthen Marketing Increase Value Added of Consulti
Slide 30: Increase Assets Under Management
Increase Assets Under Management Assets Under Management Nomura Asset Management End-March, 2004 Market Share End-March 2004 Year-on-Year Bond Investment Trust share ---------- 40% (1st) Stock Investment Trust share ---------- 19% (1st) ETF Share ------------------------------------ 67% (1st) Nomura
Slide 31: Enhance Value Added of Asset Management Service
Enhance Value Added of Asset Management Service <Asset Management Business> Investment Capability Enhancement Project Enhance process for providing lasting value added services Continually improve screening system Expand asset management capacity to allow handling greater volume Upgrade trading
Slide 32: Strengthen Marketing (1)
Strengthen Marketing (1) <Asset Management Business> 1 Greater collaboration with Domestic Retail Main Fund Sales Results Review client services structure Nomura Real Growth Open (Established 10/03, 3/04 NAV = ¥43.1bn) Strengthen fund sales support World Genome Technology Open structure for exis
Slide 33: Strengthen Marketing (2)
Strengthen Marketing (2) <Asset Management Business> Investment Advisory Assets (Trillions of yen) 2 Enhance Bank Distribution Channels 6 Domestic Increase sales channels Foreign Mitsubishi Trust and Banking Global High Income Stock Fund Bank of Yokohama US-Euro Bond Income Open 4 Introduce new
Slide 34: Pension Administration Contracts and Product Offerings (1)
Expand Number of Pension Administration Contracts and Product Offerings (1) <Defined Contribution Pension Plan Business> Companies Offering Nomura Products Defined Contribution Pension Plan (Companies) Investment Trust Assets (Billions of yen) 160 50 40 120 30 80 20 40 10 0 0 02.9 02.12 03.3 03.6 03
Slide 35: Pension Administration Contracts and Product Offerings (2)
Expand Number of Pension Administration Contracts and Product Offerings (2) <Defined Contribution Pension Plan Business> Pension System Corporate Pension Reform Reform Accelerating Adoption of Defined Contribution Pension Plan Aim to Greatly Expand The Number of Pension Administration Contracts Capi
Slide 36: Next is the Global Wholesale Division
II Business Environment z Sustainable Economic Growth in Japan z Recovery of Macro Economy z Progress of Corporate Restructuring z Shift of Individual Financial Assets to Risk Assets II II Review of Operating Results III III Business Strategy z Group Vision z Domestic Retail z Asset Management z Glo
Slide 37: Goals & Strategy - Global Wholesale
Goals & Strategy - Global Wholesale Goals Establish a globally competitive wholesale business division Strategy Respond to changing markets Span divisions to capitalize on Group strengths Promote Japan-focused globalization III Business Strategy – Global Wholesale 37 Global Wholesale’s goal
Slide 38: Respond to Changing Markets (1)
Respond to Changing Markets (1) Securitization/REITs MPO (Multiple Private Offerings) Daiichi Life subordinated loan Isuzu securitization Korean Airlines fare revenue Tokyo Tomin Bank securitization Akihabara office building Edion Corporation securitization Catherina Mita Tower Suite
Slide 39: Respond to Changing Markets (2)
Respond to Changing Markets (2) Global Wholesale Investment Global Merchant Banking Markets Banking Consolidate underwriting functions Capital Syndicate Market Department Equity Fixed Income Department Separate syndicate functions III Business Strategy – Global Wholesale 39 In Global Wholesale, we c
Slide 40: Respond to Changing Markets (3)
Respond to Changing Markets (3) Establish Global Markets Division Establish Capital Market Department Consolidate equity and bond trading functions Consolidate equity and bond underwriting functions Consolidate syndicate functions Objective Objective Strengthen trading structure for Respond to h
Slide 41: Span Divisions to Capitalize on Group Strengths
Span Divisions to Capitalize on Group Strengths Foreign Currency Bond Sales (Trillions of yen) to Retail Investors 3.5 Public Offerings IBRD 3.0 EIB SEK Ajinomoto 2.5 Sharp Ito Yokado 2.0 1.5 Public Offerings of China Related Equities 1.0 China Steel 0.5 Semiconductor Manufacturing I
Slide 42: Promote Japan-focused Globalization (1)
Promote Japan-focused Globalization (1) IPO Market Share (2003.4.1-2004.3.31) Financial Advisory Tokyu REIT 27% Matsushita Electric = Matsushita Electric Shinsei Bank 1st Industrial Works (TOB) JAPEX IRCJ = Kanebo (Acquisition of cosmetics business) Asahi Brewery, = Tingyi PO Market Shar
Slide 43: Promote Japan-focused Globalization (2)
Promote Japan-focused Globalization (2) Merchant Banking Merchant Banking (Billions of yen) Exposure 400 Nomura Principal Finance (NPF) NPF Terra Firma 357.2 MBO Deals Revitalization Deals 350 66.0 Tungaloy Huis Ten Bosch (formerly Toshiba Tungaloy) 300 281.8 284.9 Millenium Retailing Sliont
Slide 44: Corporate Governance
II Business Environment z Sustainable Economic Growth in Japan z Recovery of Macro Economy z Progress of Corporate Restructuring z Shift of Individual Financial Assets to Risk Assets II II Review of Operating Results III III Business Strategy z Group Vision z Domestic Retail z Asset Management z Glo
Slide 45: Corporate Governance
Corporate Governance Adoption of the Committee System Determine proposal details regarding director Nomination Shareholders’ Shareholders’’ Shareholders Committee election and dismissal for submission to General Meeting of Shareholders Meeting Meeting Majority comprised of outside directors Comm
Slide 46: Corporate Governance Ranking
Corporate Governance Ranking Corporate Governance Quotient Corporate Governance Index (CGQ) Ranking Rank Company Points Index Country Industry Ranking Ranking Ranking 1 Orix 73 2 Nomura Holdings 72 97.7 100.0 100.0 3 Konica Minolta Holdings 71 4 Hitachi 70 “ Nomura Holdings outperformed 97.7% of 5 O
Slide 47: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com/ www.nomura.com/ 47 47