Slide 1: Financial Results for Fiscal Year Ending March 31, 2020
May 7, 2020 TSE 1st Section: 8698 Financial Results for Fiscal Year Ending March 31, 2020
Slide 2: Table of Contents
Table of Contents Table of Contents p. 1 I. Highlights p. 2 - p.14 II. Consolidated Performance p. 15 - p. 33 III. Business Update p. 34 - p. 46 Appendix: Group Overview p. 47 - p. 58 This is an English translation of Japanese presentation materials prepared in connection with the disclosure of the
Slide 3: I. Highlights
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 2
Slide 4: The Company and the infection of the COVID-19 1/2
The Company and the infection of the COVID-19 1/2 The financial performance of Monex Group has been strong despite the global economic downturn, benefiting from extraordinary market activities and volumes. Social trends in response to the spread of COVID-19 • More people are staying at home in world
Slide 5: The Company and the infection of the COVID-19 2/2
The Company and the infection of the COVID-19 2/2 Monex Group maintains robust systems and operations in high market volumes. Cost-cutting initiatives done at TradeStation on April 28. Systems remain stable across the segments despite the System increase in transactions Employees have shifted to wor
Slide 6: Business Overview 1/2
Business Overview 1/2 Market activity accelerates our new business-model transformation Launch of the Monex Activist Fund to shift to an asset- management model. Mutual fund installment accounts, deposits Japan and the total units of installment have increased with recent stock price correction as a
Slide 7: Business Overview 2/2
Business Overview 2/2 EBITDA increased almost 20% YoY despite the challenging business environment. Enhance corporate value by the mid-to-long term growth drivers Transformation of existing Three mid-to-long term Enhanced business models growth drivers Corporate Value 2020/3 EBITDA* ¥ 7.7 B Asset Un
Slide 8: Highlights of FYE Mar. 2020 (12 months) 1/4
Highlights of FYE Mar. 2020 (12 months) 1/4 Trading volume recovered during the 2nd half of the year. Segment profit* was ¥ 2.3B. (Adjusting ¥ 0.3B of unrealized loss on investment Japan securities and ¥ 0.2B of impairment loss on fixed asset, segment profit was ¥ 2.8B) Profit increased due to highe
Slide 9: Highlights of FYE Mar. 2020 (12 months) 2/4
Highlights of FYE Mar. 2020 (12 months) 2/4 ◆Total operating revenue after deducting financial expenses and profit attributable to owners of the Company (JPY million) Total operating revenue after deducting financial expences Profit attributable to owners of the Company after taxes Pre-tax Profit 4,
Slide 10: Highlights of FYE Mar. 2020 (12 months) 3/4
Highlights of FYE Mar. 2020 (12 months) 3/4 ◆Total operating revenue after deducting financial expenses and cost of sales and Segment profit Total operating revenue after deducting financial expences and cost of sales (JPY million) Segment profit 18,541 17,417 19,338 19,887 20,000 15,616 US 10,000 1
Slide 11: Highlights of FYE Mar. 2020 (12 months) 4/4
Highlights of FYE Mar. 2020 (12 months) 4/4 ◆Total operating revenue after deducting financial expenses and cost of sales and Segment profit Total operating revenue after deducting financial expences and cost of sales (JPY million) Segment profit Coincheck, Inc. joined Crypto Asset Monex Group 3,812
Slide 12: Highlights 4Q of FYE Mar. 2020 (3 months) 1/4
Highlights 4Q of FYE Mar. 2020 (3 months) 1/4 Achieved quarterly segment profit in all five segments for the first time Segment profit was ¥ 0.5B driven by an increase in transactions. Japan (Adjusting ¥ 0.3B of unrealized loss on investment securities and ¥ 0.2B of impairment loss on fixed asset, s
Slide 13: Highlights 4Q of FYE Mar. 2020 (3 months) 2/4
Highlights 4Q of FYE Mar. 2020 (3 months) 2/4 ◆Total operating revenue after deducting financial expenses and quarterly profit attributable to owners of the Company Quarterly Pre-taxes Profit Total operating revenue after deducting financial expenses 1,066 (JPY million) Quarterly profit attributable
Slide 14: Highlights 4Q of FYE Mar. 2020 (3 months) 3/4
Highlights 4Q of FYE Mar. 2020 (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 Quarterly profit before income taxes 6,000 5,451 4,985 4,996 4,925
Slide 15: Highlights 4Q of FYE Mar. 2020 (3 months) 4/4
Highlights 4Q of FYE Mar. 2020 (3 months) 4/4 ◆Total operating revenue after deducting financial expenses and cost of sales and Segment profit Total operating revenue after deducting financial expenses and cost of sales Quarterly profit before income taxes Crypto Asset (JPY million) 1,274 1,256 1,50
Slide 16: II. Consolidated Performance
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 15
Slide 17: YoY Comparison (12 months) Consolidated Performance
YoY Comparison (12 months) Consolidated Performance FYE Mar. 2019 FYE Mar. 2020 Rate of (JPY million) (Apr. 2018– (Apr. 2019– Variance Reference change Mar. 2019) Mar. 2020) P18: Analysis of Japan segment Total operating revenue after deducting financial expenses 47,417 47,990 573 1% P20: Analysis o
Slide 18: YoY Comparison (12 months) Segment Performance
YoY Comparison (12 months) Segment Performance Japan US Asia Pacific Crypto Asset Investment (JPY million) 2019/3 2020/3 2019/3 2020/3 2019/3 2020/3 2019/3 2020/3 2019/3 2020/3 Total operating revenue after deducting financial expenses 25,739 24,342 19,338 19,887 808 634 2,077 3,812 414 148 and cost
Slide 19: YoY Analysis: Operating Revenue (Japan)
YoY Comparison (12 months) Analysis: Operating Revenue Japan : US equities and FX income significantly increased, while brokerage commissions from Japanese equities and net financial income decreased ■ Total operating revenue after deducting Total operating revenue after deducting financial expenses
Slide 20: YoY Analysis: SG&A (Japan)
YoY Comparison (12 months) Analysis: SG&A Japan : Total expenses have been well controlled with a focus on system related expenses and advertising expenses ■ SG&A SG&A Total -5.8% (-1,342) (JPY million) 24,000 23,013 ■Others (-56) ■Advertising expenses (-97) 1,505 21,671 21,000 1,212 1,450 18,000 1,
Slide 21: YoY Analysis: Operating Revenue (US, USD)
YoY Comparison (12 months) Analysis: Operating Revenue (USD) US : Net financial income increased due to higher interest rates, growing customers’ assets in custody, and the expiration of the interest rate swap. Brokerage commissions increased due to higher volatility ■ Total operating revenue after
Slide 22: YoY Analysis: SG&A (US, USD)
YoY Comparison (12 months) Analysis: SG&A (USD) US : Investment in new TradeStation Crypto and YouCanTrade businesses resulted in increases in Compensation and Benefits and Amortization and Depreciation ■ SG&A SG&A Total +5.7% (+8,816) (USD thousand) ■Others (+286) * 200,000 ■Advertising expenses （-
Slide 23: YoY Analysis: Operating Revenue (Crypto)
YoY Comparison (12 months) Analysis: Operating Revenue Crypto : Net trading income drastically increased because the services that resumed later in the previous year fully contributed to the revenue in FY 2019, as well as new currency releases and increased trading volume in the active market Total
Slide 24: YoY Analysis: SG&A (Crypto)
YoY Comparison (12 months) Analysis: SG&A Crypto : Coincheck largely reduced fixed cost after registration as a cryptocurrency exchange in January 2019 ■ SG&A SG&A Total -26.5% (-1,264) (JPY million) 5,000 4,766 ■Others (-488) * 1,041 ■Advertising expenses (+180) 4,000 84 3,502 ■Communication, freig
Slide 25: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance （JPY million） 3Q FYE Mar. 4Q FYE Mar. 2020 2020 Rate of Variance change Reference (Oct. 2019- (Jan. 2020- Dec. 2019) Mar. 2020) P26: Analysis of Japan segment Total operating revenue after 11,157 13,556 2,400 22% P28: Analysis of US segment (USD) de
Slide 26: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance Japan US Asia Pacific Crypto Asset Investment (JPY million) 2020/3 2020/3 2020/3 2020/3 2020/3 2020/3 2020/3 2020/3 2020/3 2020/3 3Q 4Q 3Q 4Q 3Q 4Q 3Q 4Q 3Q 4Q Total operating revenue after deducting financial expenses and 6,293 6,821 4,514 5,451 65 278
Slide 27: QoQ Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan : Trading volume of Japanese equities at Monex Securities increased more than the market. Brokerage commissions from US equities continue to increase and the total brokerage commissions increased ■Quarterly total operating revenue after ded
Slide 28: QoQ Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan : Commissions paid increased in the market with increased volume, and advertising expenses increased due to account growth Quarterly SG&A +9.3％ (+497) ■Quarterly SG&A *Figures in parenthesis is the variance from previous quarter (JPY million) (JPY milli
Slide 29: QoQ Analysis: Operating Revenue (US, USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US : Brokerage commissions and other commission increased by over 40% QoQ due to higher VIX. This drove an increase in total revenues of 21.5% despite a decline in net financial income due to lower interest rates ■Quarterly total operating
Slide 30: QoQ Analysis: SG&A (US, USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US : Variable costs increased due to higher commissions paid and an increase in incentive compensation earned from the favorable company performance. Advertising expenses increased due to official launch of new business ■Quarterly SG&A Quarterly SG&A +1
Slide 31: QoQ Analysis: Operating Revenue (Crypto)
QoQ Comparison (3 months) Analysis: Operating Revenue Crypto : Net trading income drastically increased due to larger market volume driven by higher volatility ■Quarterly total operating revenue after deducting financial Quarterly total operating revenue after expenses and cost of sales deducting fi
Slide 32: QoQ Analysis: SG&A (Crypto)
QoQ Comparison (3 months) Analysis: SG&A Crypto : SG&A increased due to an increase in incentive compensation linked to the favorable company performance and consulting fee (including full year catch-up) to the Company Quarterly SG&A +69.3％ (+404) ■Quarterly SG&A *Figures in parenthesis is the varia
Slide 33: Summary of Statement of Financial Position
Summary of Statement of Financial Position The difference between “Net capital” and “Non-current assets” is the source of funds for investments and shareholders distribution ◆ Summary of consolidated statement of financial position as of March 31, 2020 Assets Liabilities (*1) Non-current assets JPY
Slide 34: Shareholders’ Distribution
Shareholders’ Distribution Total return ratio (*1) is 75% on a multi-year basis ◆ Total return amount(*2) and total return ratio ◆ Return on Equity ratio （million yen） Amount of acquisition of own shares(left) Amount of dividends (left) Total return ratio(right) 15% 12,000 827% 900% 12.9% 103% 800%
Slide 35: III. Business Update
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 34
Slide 36: Business Update Japan segment 1/4
Business Update Japan segment 1/4 Monex Activist Fund has started investments in April and will offer publicly offered investment trusts to individual investors in June Restore sovereignty to individual investors, the anchor of capital markets • Best time to invest considering the recent correction
Slide 37: Business Update Japan segment 2/4
Business Update Japan segment 2/4 Monex Asset Management starts managing Monex Activist Fund, being advised by Japan Catalyst • Monex-Saison-Vanguard was renamed as Monex Asset Management which will become a wholly-owned subsidiary of Monex Group as its core company for transforming itself to an ass
Slide 38: Business Update Japan segment 3/4
Business Update Japan segment 3/4 Steady growth in mutual fund services. Launch of new services for asset management transformation Mutual Fund New service for asset management transformation “ON COMPASS“ (discretionary investment) Monex SP Trust, Inc. - Rebranded from MSV LIFE to “ON COMPASS” - The
Slide 39: Business Update Japan segment 4/4
Business Update Japan segment 4/4 Favorable growth YoY in US equity. Higher market share in margin trading US Equity Trading Margin Trading - Number of transactions and active accounts - In addition to the service expansion of increased by 350% and 250% respectively YoY general margin trading servic
Slide 40: Business Update US segment 1/2
Business Update US segment 1/2 Trading volume significantly increased due to high volatility and commission-free plans. Number of active accounts continues to grow Trading volume Account acquisitions • Trading volume (DARTs) increased approx. 1.8 • Number of account openings significantly times QoQ
Slide 41: Business Update US segment 2/2
Business Update US segment 2/2 New business initiatives to offset revenue decline Revenue Dynamics New business • Net interest income in 4Q was $10M. Net interest • Revenues from TradeStation Crypto, Inc. (TCI) income in FY2019 was $50M increased due to active market. TCI grew approved accounts over
Slide 42: Business Update Crypto Asset segment 1/2
Business Update Crypto Asset segment 1/2 Full-year profit of ¥0.3B (*) with larger revenue streams driven by higher trading volume and the cost-reduction with creating efficient operations Crypto-assets Revenue Dynamics New initiatives - Monthly average trading amount per user - Started new currency
Slide 43: Business Update Crypto Asset segment 2/2
Business Update Crypto Asset segment 2/2 No.1 app downloads in the cryptocurrency exchanges in Japan (*) No.1 in the number of cryptocurrencies available in Japanese exchanges Registered and ID-confirmed Users Create Stable Revenue Streams Number of app downloads Asset creation with Lisk staking ser
Slide 44: Business Update Crypto-asset Initiatives
Business Update Crypto-asset Initiatives Provide market insight of crypto-assets and blockchain to investors as well as offer related services to society Crypto-assets Crypto-assets and blockchain A web-based media delivering latest trends and Offers holistic database services, delivering news regar
Slide 45: Business Update Asia Pacific segment
Business Update Asia Pacific segment Revenue increased by higher trading volume. Number of active accounts significantly increased Monex Boom Securities (HK) Cherry Technology Co., Ltd (China) ・ Number of transactions +87% QoQ • Providing technology and knowledge of online brokerage business through
Slide 46: Business Update Investment Segment
Business Update Investment Segment MV1 attracts promising investment opportunities by leveraging its unique network Details of MV1 Fund R&D purpose investment* Features Active support for startups in product IoT Blockchain Cryptocurrency development and growth stages Investment 2.65 billion yen (Fou
Slide 47: Business Update ESG Management
Business Update ESG Management Contribute to the sound development of the capital market and promote initiatives that lead to sustainable growth of Monex Group Materiality Matrix ESG Initiatives Disclosing Materiality Matrix Corporate Governance - Prioritized ESG topics based on our group - Establis
Slide 48: Appendix. Group Overview
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 47
Slide 49: Our Business Principles
Our Business Principles Always a step ahead of the “Y” in "MONEY," our name MONEX symbolizes our position as a forerunner in finance. In the face of an ever-changing future, the Monex Group utilizes state-of-the-art IT technologies and world-class financial expertise to design innovative ways of man
Slide 50: Group Overview
Group Overview Japan: 1.86M accounts, Crypto Asset: 2.03M users, US: 104K accounts, AP: 14K accounts. Established global customer base as a group Aim for continuous growth in the online brokerage business and enhancement of crypto asset business for retail investors as our core business (JPY 100
Slide 51: Group Overview－Revenues, Costs, and Employees
Group Overview－Revenues, Costs, and Employees ◆Total operating revenue after deducting financial expenses ◆SG&A by segment and by cost items by region and by business Others 2% Crypto Compensation and benefits 3% Asset System related expenses 2% Othres 1% 1. Equities 8% 21% Crypto 2. System Investme
Slide 52: Group Overview－Corporate value creation process
Group Overview－Corporate value creation process Democratization of capital markets is our core value and the key driver for the Company’s sustainable growth 51
Slide 53: 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 i
Slide 54: Monex Group
Monex Group (As of March 31, 2020) Listed Holding Company [Japan] [US/Europe] [Asia Pacific] Cryptocurrency 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. Mone
Slide 55: Overview of Monex Group and Main Subsidiary Companies
Overview of Monex Group and Main Subsidiary Companies ■ Monex, Inc. (Tokyo, Japan) ■ TradeStation Group, Inc. (Florida, U.S.) One of the major online brokerage firms in Japan Online securities group with award-winning trading technology - President : Yuko Seimei development capabilities - Founded in
Slide 56: 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 57: 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 provide returns to its shareholders (as of March 31, 2020) Monex Group, Inc. based on the business pe
Slide 58: Investment Segment – Portfolio 1/2
Investment Segment – Portfolio 1/2 ◆ Monex Ventures, Inc. P2P lending EC Settlement DLT* Prop Tech Online lending （Registered as Type 2 Financial Instruments Business） AI/Big Data Thematic Investment B2B Robo-advisor AI/Big Data Vacation Rental SNS （Registered as Type 1 Financial Instruments Busines
Slide 59: Investment Segment – Portfolio 2/2
Investment Segment – Portfolio 2/2 ◆ MONEX EDISON Investment Limited Partnership Web media EC AI/Big Data Insure Tech EC Ad Tech ◆ 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 IoT/AI B