Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2020/21 Earnings Presentation
33 slides from Nomura's earnings presentation, July 2020
Slide 1: CFO presentation of Q1 results
Good evening, this is Takumi Kitamura, CFO of Nomura Holdings. First, I would like to express my sincere condolences to those affected by the recent heavy rain in Japan and pray for a speedy recovery from this disaster. Our thoughts also go out to people affected by the coronavirus outbreak and we p
Slide 2: Presentation and Financial Supplement contents
Presentation 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) © Consolid
Slide 3: Executive summary
As I said when we announced our results in May, the rapid spread of coronavirus around the world caused markets to plunge in March and the fixed income market saw a flight to quality as safe assets such as government bonds were swept up and risk off sentiment took hold in the corporate bond market a
Slide 4: Highlights
Highlights (bilions of yen, exceptEPS and ROE) 94% 6% 2572 8% - 748 143% * 155%
Slide 5: Net revenue and income (loss) before income taxes
Net revenue and income (loss) before income taxes “nen 10 4a 10 Net revenue —_—Retail 8141 88.8 -9% 80.6 1% 279 Unrealized gain (loss) on investments in equity 23 16.6 - 29 - Income (loss) before income taxes || 181.8 24.7 [ : [ 74.8 143% “Additional information on “Other” (10) © Gain relatedto appr
Slide 6: Retail results
First quarter net revenue declined 9 percent to 81.1 billion yen and income before income taxes was 15.1 billion yen, down 18 percent quarter on quarter. Given the state of emergency in effect during the quarter it was difficult to physically meet with clients. By reforming our sales channels last y
Slide 7: Retail KPIs
Starting this quarter we will provide an update on the KPIs we announced at our recent investor day. Recurring revenue assets shown on the top left rebounded from 15.3 trillion yen at the end of March to 16.3 trillion yen at the end of June. However, the quarterly average was down compared to last q
Slide 8: Asset Management results
Net revenue jumped 4.8 times to 34 billion yen driven by an improvement in American Century Investments gain/loss. Income before income taxes rebounded markedly from a loss last quarter. 7
Slide 9: Asset Management investment trust inflows
As you can see on page eight, our investment trust business reported strong net inflows of over 1 trillion yen. The breakdown is shown on the bottom left. ETFs inflows topped 1 trillion yen and money funds such as MRFs where investors park funds also reported inflows. We continue to focus on expandi
Slide 10: Wholesale results
Net revenue increased 70 percent quarter on quarter to 248.7 billion yen and income before income taxes jumped 8.7 times to 87.9 billion yen. As the market recovered from the March downturn, we were able to meet the portfolio rebalancing needs of our clients, which combined with a favorable trading
Slide 11: Global Markets
Global Markets net revenue increased by 73 percent to 232.6 billion yen. Fixed Income net revenue was 154.9 billion yen, up 98 percent quarter on quarter. This represented record revenues for Fixed Income as Credit and Securitized Products rebounded from last quarter and Rates revenues grew signific
Slide 12: Investment Banking
Net revenue increased 38 percent quarter on quarter to 16.1 billion yen. In Japan, we saw an uptick in ECM solutions and DCM transactions, while M&A and ECM remained muted, resulting in revenues roughly unchanged quarter on quarter. International revenues increased quarter on quarter as Americas ECM
Slide 13: Non-interest expenses
Firmwide expenses totaled 278.9 billion yen, up 6 percent over last quarter. The increase is due to higher bonus provisions as a result of stronger revenues in the quarter. Non-personnel expenses are all down quarter on quarter as shown here. Occupancy and related depreciation declined 11 percent as
Slide 14: Robust financial position
Our balance sheet at the end of June totaled 41.5 trillion yen, representing a decline of 2.5 trillion yen from the end of March due to lower repurchase transactions and loans. As shown on the bottom left, Tier 1 capital was 2,861 billion yen, up by 289 billion yen from the end of March, due mainly
Slide 15: Closing summary
As the equities and fixed income markets normalized this quarter, market participant activity picked up and the trading environment improved, leading to record results in our Wholesale business. Asset Management saw an improvement in American Century Investments related gain/loss, while Retail repor
Slide 16: Financial Supplement
Financial Supplement 15
Slide 17: Consolidated balance sheet
Consolidated balance sheet (billions of yen) 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 Sa Ss Total other assets’
Slide 18: Value at risk
Definition = From April 1, 2020, to June 30, 2020 (billions of yen) — 99% confidence level ~ Maximum: 27.0 — 1-day time horizon for outstanding portfolio = Minimum: 12.0 — Inter-product price fluctuations considered — Average: 196 ee ee Equity 14 89 12 18 14 89 1.6 Interest rate 28 224 34 40 48 224
Slide 19: Consolidated financial highlights
Full year (billions of yen) ‘== Net income (loss) attributable to Nomura Holdings, Inc. (NHI) 200 shareholders: 100 ROE) i -100 -200 —y2019200 rans Frantz te 2a [3] [ae a) Net revenue 11168 1,287.8 3320 «38340-3350 «©2375 460.7 Income (loss) before income taxes 3172483 48 1285 697 AT (184.8 Netiinco
Slide 20: Consolidated income
Full year Quarter (billions of yen) “Pramas Fvani9zn —Fy2g1g200Fv2020/21 Revenue Commissions 293.1 308.8 68.2 65.3 79.3 96.1 85.5 Fees from investment banking 101.5 103.2 27.3 223 26.8 26.8 10.8 Asset management and portfolio service fees 245.5 238.2 60.0 59.9 61.0 57.3 53.7 Net gain on trading 343.
Slide 21: Main revenue items
Full year Quarter (billions of yen) ‘Stock brokerage commissions 192.0 196.5 426 425 48.1 63.3 62.9 Other isSit 14.4 14.4 27 28 3.0 59 43 Commissions for distribution of investment trusts 56.6 66.7 16.4 126 19.0 18.6 14.1 Other 30.0 1.2 64 74 92 82 42 Total 293.1 308.8 68.2 65.3 79.3 96.1 85.5 30.0
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 eee 2S Se oe ee oe Retail 49.5 49.4 84 53 17.6 184 15.4 Asset M2 28.8 18.1 10.0 93 87 19.2 Wholesale 111.4 922 20.0 189 432 10.4 87.9 Three bu total 27 170.4 463 M2 70.2 19.8 1224 Other 28 99.
Slide 23: Segment Other income before income taxes
Income (loss) before income taxes Full year Quarter (billions of yen) 160 = 992 934 80 40 5 i) 28 40 -279 Pe Seca ee Net gain (loss) related t i gain (loss) 10 economic hedtenitancicd 18 17.5 128 70 23 46 5.6 Realized gain (loss) on investments in equity secuities held for as 02 66 01 13 49 03 O7 Eq
Slide 24: Retail financial data
Full year Quarter (ottions of yen) - rrantgen vena Commissions 1428 153.2 MS uz 422 454 408 10.0% 18.4% Ofwhich, stock brokerage commission 60.2 61.2 125 126 17.0 191 27 13.9% 74.3% Ofwhich, commissions for: tion of ‘treats S79 69 165 126 192 186 139 25.2% = 15.8% Sales credit 55.8 68 149 127 16.7 1
Slide 25: Retail client assets
Retail clientassets (trillions of yen) other me 1223 to? 120} 1147 13-1 poss ; ‘=Foreign investment 104.0 104.0 sanvend 100 ‘Bond investment 80 = Stock investment trusts 60 = Domestic bonds 40 — Foreign carrey 0 = Equities 0 Equities mn9 627 70.3 71.9 78.3 62.7 70.2 Foreign currency bonds 63 58 64 6
Slide 26: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter (billions of yen) (billions of yen) 2,400 2.400 2,015 1,800 1,800 1,200 1,200 600 600 424 = | r 0} = zi ‘ | -600 429 -600 25 25
Slide 27: Number of accounts
Number of accounts (thousands) —-Fraoiet9Fy2o120 Ss va01920vz00/21 Accounts with balance 5,338 5,319 5,335 5,326 5,328 5,319 5,323 Equity holding accounts 2,908 2,920 2,914 2,913 2,897 2,920 2,935 NISA accounts opened (accumulated)" 1,702 1,737 1,710 1,719 1,728 1,737 1,746 Online service accounts 4
Slide 28: Asset Management results and assets under management
Full year* vac = Ss 100.2 -Fy2020/21 i 25.0 26.0 23.4 23.7 76 10.3 92.6 63.8 Revenue (excl. ACI-related gain/loss) 102.9 ACl-elated gain/loss 50 Net revenue 97.8 Non-interest expenses 63.7 Income (loss) before income taxes M2 Assets under management by company (trillions ofyen) Nomura Asset Manageme
Slide 29: Asset inflows/outflows by business
Asset inflows/outflows by business* Full year Quarter 2020 2020/21 eect i es EE EE Investment trusts business 2,187 1,788 672 259 296 560 1,210 of which ETFs 2,531 2,133 642 246 115 1,130 1,153 Investment advisory business 20 302 164 121 198 146 -163 Total net asset inflow 2,207 2,090 508 381 494 70
Slide 30: Wholesale results and revenue breakdown
Full year Quarter (sons of ye) | vata rvznz0t Net revenue 555.4 159.5 156.7 186.5 145.9 248.7 70.4% 55.9% Non-interest expenses 666.8 556.4 139.5 137.8 143.3 135.8 160.8 18.4% 15.3% Income (loss) before income taxes 111.4 922 20.0 18.9 43.2 10.1 87.9 81x 44x Breakdown of Wholesale revenues' Full yea
Slide 31: Number of employees
Japan 15,852 15,748 16,423 16,119 15,971 15,748 16,069 Europe 2,909 2,691 2775 2734 2,658 2,691 2,728 Americas 2,357 2,120 2,230 2,167 2,116 2,120 2,164 Asia and Oceania’ 6,746 6,070 6,684 6,692 6,554 6,070 6,118 Total 27,864 26,629 28,112 27,712 27,299 26,629 27,079 1. Includes Powai office in indi
Slide 32: 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 to sell, sales, solici
Slide 33: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com