Nomura Holdings, Inc. · TSE:8604
Nomura — FY2017/18 Earnings Presentation
34 slides from Nomura's earnings presentation, April 2018
Slide 1: Overview of results for the year ended March 2018
I will now give you an overview of our results for the year ended March 2018. Please turn to page two.
Slide 2: Outline
Outline Presentation NOMURA Financial Supplement Executive summary (p. 2-3) Overview of results (p. 4) Business segment results (p. 5) Retail (p. 6-7) Asset Management (p. 8-9) Wholesale (p. 10-12) Non-interest expenses (p. 13) Robust financial position (p. 14) Funding and liquidity (p. 15) Consolid
Slide 3: Highlights for the full year
First, the highlights for the full year. The year started of slowly amid concerns over heightened geopolitical risks. But the market gradually returned to risk taking mode in May as the elections in France turned out as expected and the Japanese and US economies performed solidly. In October, the Do
Slide 4: Fourth quarter highlights
Please turn to page three for highlights of our fourth quarter performance. The graph on the bottom right shows three segment income before income taxes of 76.9 billion yen. The blue bar shows Wholesale, which reported a strong uplift in earnings in the fourth quarter. As a result of this, income be
Slide 5: Highlights
Highlights (billions of yen, except EPS and ROE) +8% 1,497.0 +7% ————— ———— +16% +24% 1,168.8 +8% ———— Lo | ———— 61% 43% +2% ———— ———— -74% 63% 219.3 -8% — om | — -74% 61% Y61.88 6% 1. Net income attnbutable to Nomura Holdings sharehoes~ 2. Diluted nt income atfnbutable to Nomura Holdings shareholde
Slide 6: Net revenue and income (loss) before income taxes
Net revenue and income (loss) before income taxes (billions of yen) FY2017/18 FY2017/18 4Q Gee) Yer Full year Wor Netrevenue Retail 98.2 “12% 5% 412.9 410% Asset Management 27.3 -25% +17% 127.3 +28% Other Unrealized gain (loss) on investments in equity securities held for operating purposes Net reve
Slide 7: Retail results
Please turn to page six for an overview of results in each business starting with Retail. First, the full year. Net revenue increased 10 percent year on year to 412.9 billion yen and income before income taxes grew 38 percent to 103.1 billion yen. As the Nikkei climbed towards 24,000 yen, investor s
Slide 8: Retail: net inflows and recurring revenue
Please turn to page seven. As you can see on the bottom right, investment trust net inflows were 114 billion yen, driven by inflows into funds that invest in growth areas such as robotics and Indian equities as well as the Nomura Target Income Fund, which is suited to building assets over the medium
Slide 9: Asset Management results
Please turn to page eight for Asset Management. Full year net revenue increased 28 percent to 127.3 billion yen. Income before income taxes was 66.2 billion yen, a record high since April 2001. We booked inflows of 3.3 trillion yen throughout the year, driven by ETFs, investment trusts for discretio
Slide 10: Asset Management: inflows and market share
Please turn to page nine. As shown on the top left, investment trusts and the investment advisory business continued to book inflows in the fourth quarter. As the graph on the bottom left shows, in the investment trust business, ETFs reported inflows of about 1.7 trillion yen. As a result, Nomura As
Slide 11: Wholesale results
Please turn to page 10 for Wholesale. First, the full year. Net revenue was 715.3 billion yen. Fixed Income faced historically low volatility and subdued activity from market participants, which pushed down net revenue, particularly in Rates products. But revenues in Equities and Investment Banking
Slide 12: Global Markets
Turning now to each business line, please look at page 11 for Global Markets. Net revenue increased 31 percent quarter on quarter to 182.9 billion yen. Fixed Income net revenue increased 25 percent to 98.8 billion yen. Volatility returned to the US rates market and revenue growth was driven by Emerg
Slide 13: Investment Banking
Please turn to page 12 for Investment Banking. As shown on the top left, net revenue was 28.5 billion yen, the strongest in nine quarters. Gross revenue, which represents revenues before allocation to other businesses, climbed 32 percent to 51.4 billion yen. In Japan, revenue contributions from M&A
Slide 14: Non-interest expenses
Please turn to page 13 for an overview of expenses. Full year firmwide expenses increased 8 percent year on year to 1 trillion 168.8 billion yen. For compensation and benefits, bonus provisions increased due to higher deferred compensation expenses in Wholesale and revenue growth in retail and Asset
Slide 15: Robust financial position
Please turn to page 14 for an overview of our financial position. Our balance sheet at the end of March was 40.6 trillion yen, down 3.9 trillion yen from 44.5 trillion yen at the end of December. This is due to a decline in trading related assets and yen appreciation. In terms of regulatory capital,
Slide 16: Conclusion and outlook
To conclude, I would say that this year’s results were clouded by a number of one-off factors that affected our group performance, such as the significant positive factors booked in the third quarter and the provisions booked in the US in the fourth quarter. That said, our core businesses continued
Slide 17: Financial Supplement
Financial Supplement 16
Slide 18: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits Total loans and receivables Total collateralized agreements 18,730 Total trading assets? and private equity investments 15,192 Total other assets 2,772 Total assets 42,852 932 -2,492 -2,261 Liabilities Short-term borrowings Total payables and dep
Slide 19: Value at risk
From April 1, 2017, to March 31, 2018 (billions of yen) = Definition . — 99% confidence level — Maximum: 9.0 — 1-day time horizon for outstanding portfolio — Minimum: — 3.0 — Inter-product price fluctuations considered — Average: 4.3 0.7 1.2 0.7 09 08 1.2 1.2 Equity Interest rate 27 34 2.7 25 3.0 27
Slide 20: Consolidated financial highlights
Full year Quarter (billions of yen) (billions of yen) 300 10% 100 9.3% 87% 8% 8.1% o 7.9% + 7 7.7% m= Net income + 8% 80 attributable to Nomura Holdings, 209 Inc. ("NHI") 6% 60 shareholders 4% 40 —P—ROE(%) 100 2% 20 ile) 0 0% 0 Net revenue 1,403.2 1,497.0 349.1 360.8 351.5 406.6 378.0 Income before
Slide 21: Consolidated income
(billions of yen) Full year Quarter Revenue Commissions 327.1 373.3 90.0 91.0 85.3 101.7 95.4 Fees from investment banking 92.6 101.7 28.2 22.7 27.1 29.3 22.6 Asset management and portfolio service fees 216.5 245.6 56.6 58.3 61.2 63.8 62.3 Net gain on trading 475.6 442.9 108.3 120.5 88.4 87.7 146.3
Slide 22: Main revenue items
(billions of yen) Full year Quarter Stock brokerage commissions 210.0 243.8 57.1 57.0 54.6 68.4 63.8 Other brokerage commissions. 15.1 17.0 3.0 3.4 3.2 43 6.0 ‘Commissions for distribution of investment trusts 75.1 85.7 22.6 23.2 20.9 22.1 19.5 Other 26.9 26.9 7.3 7.3 66 6.9 6.2 Total 327.1 373.3 90
Slide 23: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter tbilions of yen) ‘Prmrenr evzor8 Fy2oii7 FV20N7IIB Retail’ 74.8 103.1 25.8 24.9 25.5 31.3 21.4 Asset Management 42.3 66.2 8.7 13.6 20.5 20.8 11.3 Wholesale 161.4 100.6 28.1 25.4 17.0 14.0 44.2
Slide 24: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 80.0 60.0 56.4 50.4 40.0 37.6 226 17.3 -25.0 40.0 Net gain (loss) related to economic - hedging transactions 7.3 6.5 0.8 0.7 0.6 8.0 1.7 Realized gain (loss) on investments in equity 14 08 0.0 0.0 03 04 0.0 securities held for ope
Slide 25: Retail results data
1. 2 (billions of yen) Full year Quarter Pane ea gm ad QQ 54.1 Commissions 11.8 192.7 475 47.3 43.8 47.5 12.2% 0.2% Of which, stock brokerage commission 62.8 82.2 17.6 18.0 17.2 25.4 21.7 14.6% 23.4% Of which, commissions for distribution of investment trusts 82.3 87.1 23.6 23.7 21.3 26 195 13.9% —-
Slide 26: Retail client assets
Retail client assets" = Other = Foreign investment trusts = Bond investment trusts ‘= Stock investment trusts (trillions of yen) 140 120 107.7 100 80 60 40 20 0 | Fy2016it7/ (Mer) 115.2 122.8 = Domestic bonds ‘= Foreign currency bonds = Equities Equities 66.3 75.7 66.3 69.9 72.4 79.2 75.7 Foreign cu
Slide 27: Net inflows of cash and securities
Net inflows of cash and securities" Full year Quarter (billions of yen) (billions of yen) 1,000 1,000 500 500 0} 0 — Ha a a 43 15 “196 -306 -500 403 -600 (Prana rome 1. Cash and secuntias inflows minus outflows, excluding regional financial institutions. 26 26
Slide 28: Number of accounts
Number of accounts tousenss) I FYBOYGHTN|/VaDITBT) /FYa0Ke/7 | [yyy vane Accounts with balance 5,363. 5,318 5,363. 5,342 5,328 5,326 5,318 Equity holding accounts 2,836 2,822 2,836 2,821 2,832 2,800 2,822 Online service accounts" * 4,456 4,387 4,456 4,361 4,301 4,342 4,387 New Individual accounts /
Slide 29: Asset Management results data
Full year Quarter (omens fer | | ee ee 28.1 Net revenue 99.4 127.3 36.5 27.3 -25.2% 17.2% Non-interest expenses 57.1 61.2 14.6 14.5 15.0 15.7 16.0 2.2% 9.4% Income before income taxes 42.3 66.2 87 13.6 20.5 20.8 11.3 45.8% 30.3% Assets under management by company Nomura Asset Management 47.4 ATA 48.
Slide 30: Asset inflows/outflows by business
Asset inflows/outflows by business’ Full year Quarter Investment trusts business 1,590 3,131 969 316 886 773 1,156 of which ETFs 1,934 3,022 1,203 183 906 193 1,740 Investment advisory business 584 203 315 -86 96 -55 248 Total net asset inflow 2,174 3,334 1,284 230 982 718 1,404 Domestic public inve
Slide 31: Wholesale results data
Full year Quarter re Net revenue 739.3 715.3, 171.2 179.3 159.0 165.6 211.4 23.5% Non-interest expenses 577.8 614.7 143.1 154.0 142.0 151.6 167.2 10.3% 16.9% Income before income taxes 161.4 100.6 28.1 25.4 17.0 14.0 44.2 3.1x 57.2% Breakdown of Wholesale revenues Full year Quarter 4a 1Q QQ AQ Fixed
Slide 32: Number of employees
Japan 16,227 15,819 16,227 16,903 16,706 16,583 15,819 Europe 3,026 3,057 3,026 3,013 3,047 3,054 3,057 Americas 2,314 2,362 2,314 2,325 2,348 2,349 2,362 Asia and Oceania‘ 6,619 6,810 6,619 6,673 6,756 6,786 6,810 Total 28,186 28,048 28,186 28,914 28,857 28,772 28,048 1. Includes Powai office in In
Slide 33: Disclaimer
NOMURA 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
Slide 34: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com