Monex Group, Inc. · TSE:8698
Monex — H1 FY2007 Earnings Presentation
33 slides from Monex's earnings presentation, Oct 25, 2006
Slide 1: Financial Results of 1st Half of the Fiscal Year Ending March 31, 2007
October 25, 2006 Financial Results of 1st Half of the Fiscal Year Ending March 31, 2007 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
Slide 2: Table of Contents
Table of Contents 1. Financial Results Page 2. Business Model and Future Development Page ■ Summary ・・・ 3 ■ Mission Statement ・・・ 10 ■ Current Environment and Monex’s Positioning ・・・ 11 Financial Summary ■ Action Plans ・・・ 12 ■ 1st Half of FYE Mar. 31, 2006 ■ Current and Future Revenue Structure by
Slide 3: 1. Financial Results
1. Financial Results 2. Business Model and Future Development 3. Appendix 2
Slide 4: Summary
Summary ■Strengthening our Origination Capability and Creating a Differentiated Business Model among Competitors Developing a platform as the one and only “Online Investment Bank” in the world Ⅰ. In spite of the bearish market in Japan, revenues and profits, as well as customers’ assets under custod
Slide 5: Financial Summary: 1st Half FYE Mar. 2006 vs. 1st Half FYE Mar. 2007
Financial Summary：1st Half of FYE Mar. 31, 2006 vs. 1st Half of FYE Mar. 31, 2007 (in million yen, %) First Half of FYE First Half of FYE Mar. 31, 2006 Mar. 31, 2007 Change (Apr. 2005-Sep. 2005) (Apr. 2006-Sep. 2006) Operating Revenues 15,196 16,832 +10.8% Net Operating Revenues 14,481 16,034 +10.7%
Slide 6: Financial Summary: 1Q vs. 2Q of FYE Mar. 2007
Financial Summary：1Q of FYE Mar. 31, 2007 vs. 2Q of FYE Mar. 31, 2007 (in million yen, %) 1Q of FYE 2Q of FYE Mar. 31, 2007 Mar. 31, 2007 Change (Apr. 2006-Jun. 2006) (Jul. 2006-Sep. 2006) Operating Revenues 9,335 7,496 -19.7% Net Operating Revenues 8,904 7,129 -19.9% SG&A 3,730 3,481 -6.7% Operatin
Slide 7: Financial Highlights (Quarterly Trend)
Financial Summary：Financial Highlights (Quarterly trend) ■Net operating revenues and Operating Income ■SG&A million yen billion yen million yen Trading Value of Individual Investors 20,000 in 3 major markets and JASDAQ 20 10,000 (Average per business day)(right) 7,500 Net operating revenues （left） 5
Slide 8: Profit Margin and Cost Structure
Financial Summary：Profit Margin and Cost Structure ■Profit Margin (Operating income/Operating revenues) ■ Cost structure (2Q of FYE Mar. 2007) 80% Decrease in variable costs Strategically due to decrease in net controllable costs Fixable costs and costs operating revenues, but correlated to the numb
Slide 9: Revenues/SG&A per Customers' Assets in Custody
Financial Summary : Revenues/SG&A per Customers’ Assets in Custody (Annualized) Rakuten Securities 3.5% Bearish stock market in Japan led to weak brokerage business (Consolidated) 1Q of Mar. 2007 Both revenues and SG&A per customers’ assets in custody decreased 3.0% Matsui kabu.com (Consolidated) MB
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: Current Environment and Monex's Positioning
Current Environment and Monex’s Positioning With Japanese population having started to decline and economic growth slowing down, we are facing changes in individual’s investment needs and competitive environment of financial institutions ■Recognition of environment 【Past～Present】 【Future】 • With les
Slide 13: Action Plans
Action Plans ■Three principal strategies and creating a fundamental environment supporting those strategies 【Three Principal Strategies】 Products ◆Customer Relationship Management ◆Distribution Channel In order to deliver right products and In order to provide the right product the In order to beco
Slide 14: Current and Future Revenue Structure by Product
Current and Future Revenue Structure by Product ■Current revenue structure (2Q of FYE Mar. 2007) ■Future revenue structure Dependency on brokerage business = 84% Dependency on brokerage (Brokerage commission revenues business = 62% plus financial income) IPO 4% IPO Others Mutual funds Mutual funds 0
Slide 15: Investor Education
Investor Education： Providing high quality educational opportunities of investment for many people ■Providing contents for all types of investors ■Broadening investment learning opportunities ◆Launching “Monex Campus” Monex’s know-how NetLearning’s know-how on education • Constantly holding on e-lea
Slide 16: Brokerage Business
Brokerage Business : Strengthening our original products and services ■Answering to the diverse needs of customers ■Expansion of stock lending services ◆Enhancement of product line-up ◆Rapid increase in the number of accounts and outstanding balance of Enabled •Started offering of Fukuoka stock exch
Slide 17: Monex Night Time Trading
Monex Night Time Trading : Advantage in market scale as pioneer in the operating of the PTS market ■Steady expansion since start of service ■Comparison with kabu.com ◆History of Monex Night Time Trading ◆Comparison in Trading Value of Night Time Trading Jun. 2001 Started service as Japan’s first Pro
Slide 18: Underwriting Business
Underwriting Business： Performance exceeding the framework of an online brokerage firm ■Track records ■Fulfilling needs of individual and corporate customers ■Underwriting date basis Number of IPOs Amount of IPOs ◆Providing Investor Education (hundred million yen) ・Holding IR Workshops for individua
Slide 19: Fixed Income and FOREX Businesses
Fixed Income and FOREX Businesses : Fulfilling product line-up to realize investment diversification for individual investors ■ Full Line-up of a variety of bonds ■“MONEX FX” ◆Variation of Currency, Maturity, and Coupon ◆Increasing the number of accounts / margin balance Bonds offered at Monex (Apri
Slide 20: Mutual Funds Business
Mutual Funds Business：Front runner among online distributors ■Top-class online mutual funds distributor ■Steady growth of monthly administration fee ◆ Record-high assets in custody and mutual funds holders ◆ A stable revenue source despite market fluctuations hundred million yen ♯ of Accounts 1,400
Slide 21: Alternative Investments
Alternative Investments: World-class Premium Products to Individual Investors ■ Launch of two new original alternative funds exclusive to our customers, following “Asia Focus” “China Focus” “Premium Hybrid 2006” Monex-Fullerton China Focus Fund Monex Fund of Funds Series I Monex-HFR Private Equity
Slide 22: Kabu-Robot Project
“Kabu-Robot” Project：Efforts toward Provision of New Asset Management Service ■Selecting excellent “Kabu-Robot”s, a system trading program, through Super “Kabu-Robot” Contest →In preparation of providing new age asset management products & services utilizing “Kabu-Robot” for investors who do not act
Slide 23: To Our Shareholders (1)
To Our Shareholders (1) ■Pursuing investment return to our shareholders Dividend & Payout Ratio ROE ・Dividend payout ratio: approx. 50% of previous year’s Net Income of subsidiary, Monex,Inc. 50% ⇒FYE Mar.2007 2,900 yen Dividend (Planned) ・ Keeping high dividend payout ratio 40% 38.1% Yen Dividend
Slide 24: To Our Shareholders (2)
To Our Shareholders (2) ■We will continue to endeavor clear and timely disclosure Clearest disclosure among the industry Communication with our Stakeholders Disclosure Frequency Language Started ・General shareholder meeting held on Saturdays Accounts, etc. Weekly/Monthly English 1999 Japanese Hold
Slide 25: 3. Appendix
1. Financial Results 2. Business Model and Future Development 3. Appendix 24
Slide 26: Trend of Individual Investors
Trend of Individual Investors ■Individual Investors in Japan The Ratio of Internet Trading Value in Individual Investors 100% 86% 90% 83% Individual investors are vulnerable Risk of high dependency on 80% 84% to market fluctuations stock brokerage commissions 81% 70% 71% 74% 60% Online trading has b
Slide 27: Expanding Our Customer Base (1)
Expanding Our Customer Base (1) ■Strategic Media Planning ■ Integration of Advertisements for Re-Branding media Paper Based Online To become the Premium Online Financial Service Institution target for individual investors Our Business Philosophy Independent Investors ・Bringing attention of our ・Ba
Slide 28: Expanding Our Customer Base (2)
Expanding Our Customer Base (2) ■Business Partners ■Other Alliances Promoting partnerships with high business affinity regardless of “Yoshimoto Shoken” Online/Offline Channels and Financial/Non-Financial Industries Official sponsor for the investment site established by Yoshimoto Kogyo (Japanese Com
Slide 29: Customer Portfolio (As of September 30, 2006)
Customer Portfolio (As of September 30, 2006) ■Gender ■Location Female Others 24.1% 22.4% Tokyo Metropolitan District Nagoya District 51.3% Male 8.3% 75.9% Osaka District 18.0% ■Age ■Occupation Over 70 3.1% Company Employee 48.2% 60s 8.9% Unemployed 16.5% Housewife 9.7% 50s 17.3% 24.3% Self-employed
Slide 30: Competitive Services and Products
Competitive Services and Products: For All Customers’ Satisfaction (As of October 20,2006) Fixed Equity Mutual Fund Alternative Others Income Small Stock Credit Night China/ In-house Stop Unit Lending JGB/ Monthly Commo Settle- China U.S Time India High Low Margin Loss Trading Foreign Auction Purcha
Slide 31: Comparison among 5 Major Online Securities (1)
Comparison among 5 Major Online Securities (1) ■Net operating revenues ■SG&A 40% 40% 30% 30% 18% 20% 20% 20% 18% 20% 18% 18% 17% 17% 15% 16% 10% 10% 0% 0% 2006/03 1Q 2006/03 2Q 2006/03 3Q 2006/03 4Q 2007/03 1Q 2006/03 1Q 2006/03 2Q 2006/03 3Q 2006/03 4Q 2007/03 1Q ■Ordinary Income ■Customers’ assets
Slide 32: Comparison among 5 Major Online Securities (2)
Comparison among 5 Major Online Securities (2) ■Net operating revenues per accounts ■SG&A per accounts yen yen 40,000 12,000 35,000 10,000 30,000 25,000 21,458 8,000 17,989 18,504 12,742 6,137 5,928 6,125 5,798 20,000 6,000 5,519 15,000 13,174 4,000 10,000 2,000 5,000 0 0 2006/03 1Q 2006/03 2Q 2006/
Slide 33: The MBH Group
The MBH Group （as of October 25, 2006） %: Investment Ratio 50% 100% 100% Research and Planning on Discovery and Incubation of Premium Online Financial Institution Life Insurance Business New Businesses Net Life Planning 【Established October 2006】 MBI Monex Business Incubation, Inc. 34% 70% 55% 33.3%