Nomura Holdings, Inc. · TSE:8604
Nomura — Q2 FY2013/14 Earnings Presentation
36 slides from Nomura's earnings presentation, October 2013
Slide 1: Overview of Q2 financial results
I will now give you an overview of our financial results for the second quarter of the year ending March 2014 using the document titled “Consolidated Results of Operations”. Please turn to page three.
Slide 2: Outline
Outline NOMURA Presentation Financial Supplement Executive summary (p. 3) Consolidated balance sheet (p. 18) Overview of results (p. 4) Value at risk (p. 19) Business segment results (p. 5) Consolidated financial highlights (p. 20) Retail (p. 6-7) Consolidated income (p. 21) Asset Management (p. 8-9
Slide 3: Executive summary
For the first-half period, although revenues and expenses were elevated through last year as Nomura Real Estate Holdings was a consolidated subsidiary, net revenue increased 2 percent year on year to 787.7 billion yen. All business divisions reported higher revenues and income, and group-wide income
Slide 4: Overview of results
Page four gives an overview of our second quarter and first half results. Please turn to page five for our business segment results. 4
Slide 5: Business segment results
As shown at the bottom of the page, segment “Other” includes a loss from changes to our own and counterparty credit spreads of 11.6 billion yen. Our credit spread tightened throughout the quarter, partly due to Fitch upgrading Nomura Holdings and Nomura Securities to A minus on September 25. Please
Slide 6: Retail results
As shown on the right, Retail net revenue declined 28 percent quarter on quarter to 119.7 billion yen. Income before income taxes remained strong at 40 billion yen, despite declining 51 percent from the first quarter which was the best quarter since the year ended March 2002. Net asset inflows excee
Slide 7: Retail recurring revenue and NISA
Recurring revenue, one of our key performance indicators, was 13.2 billion yen, or 52.9 billion yen on an annualized basis as shown on the bottom left of page seven. Although this is slightly lower than last quarter, it is trending ahead of plan as we work towards achieving our March 2016 target. Th
Slide 8: Asset Management results
Net revenue in Asset Management was 18.6 billion yen, a decline of 8 percent from last quarter. Income before income taxes remained strong, although declining 8 percent to 6.2 billion yen. Net assets under management reached 30 trillion yen for the first time since September 2007 on inflows primaril
Slide 9: Asset Management: Continued inflows into investment trusts
Asset Management: Continued inflows into investment trusts NOMURA Nomura Asset Management share of public investment trust Assets under management (gross)' by business market (trlons of yen) gy qyestment trust business lm Invesiment advisory business 40.0 36.1 36.8 37.3 23.0% > 22.7% 22.4% 22.5% 22.
Slide 10: Wholesale results
Wholesale booked net revenue of 183.3 billion yen, a decline of 6 percent compared to last quarter. Income before income taxes was 25.3 billion yen as disciplined cost control resulted in income in line with the first quarter. As shown on the bottom left, by region, Japan-related businesses slowed d
Slide 11: Global Markets
Net revenue in Global Markets was 159.6 billion yen. As shown on the heat map on the top right, Japan reported a slowdown compared to the strong first quarter, while both Fixed Income and Equities booked higher revenues in all international regions, limiting the quarter on quarter decline to 3 perce
Slide 12: Investment Banking
Net revenue in Investment Banking was 23.8 billion yen, down 19 percent quarter on quarter. Investment banking gross revenue shown at the top left of the page was in line with last quarter driven by resilient performance in Japan and EMEA. We were able to tap into the strong demand in Japan for fina
Slide 13: Non-interest expenses
Non-interest expenses declined 11 percent quarter on quarter to 283.5 billion yen. In particular, compensation and benefits were declined 17 percent to 135.4 billion yen. The decline in expenses was due primarily to: The absence of approximately 9 billion of full career retirement related expenses b
Slide 14: Wholesale expenses and net revenue
Wholesale has implemented cost reduction initiatives of 2 billion dollars since July 2011. The blue bar graph on the top left shows quarterly Wholesale expenses on a half yearly basis. The red line tracks expenses converted into US dollars using the average month-end spot rate over each six month pe
Slide 15: Robust financial position
Total assets at the end of September were 41.9 trillion yen, gross leverage was 17.6 times, and net leverage was 10.9 times. On a Basel 3 basis, our Tier 1 ratio and Tier 1 common ratio were both 12.2 percent. The 10.7 percent figure shown on the top right was calculated by applying Basel 3 standard
Slide 16: Funding and liquidity
Lastly, page 16 shows our funding and liquidity. As there are no significant changes from June, I will leave it for you to look through later. That concludes the presentation on our second quarter results. Today we also declared a dividend of 8 yen per share to shareholders of record as of September
Slide 17: Financial Supplement
Financial Supplement NOMURA
Slide 18: Consolidated balance sheet
Consolidated balance sheet NOMURA (billions of yen) Assets Liabilities Total cash and cash deposits 1,653 = 8 Short-term borrowings nN Py © Total loans and receivables Total collateralized agreements Total payables and deposits Total collateralized financing Trading liabilities Other liabilities 2,4
Slide 19: Value at risk
Value at risk = Definition — 99% confidence level — 1-day time horizon for outstanding portfolio — Inter-product price fluctuations considered From April 1, 2013 to September 30, 2013 (billions of yen) — Maximum: — Minimum: — Average: 9.3 44 6.4 (billions of yen) “ryzornn2 Fy2012/13 En Essa Equity 1
Slide 20: Consolidated financial highlights
NOMURA Quarter Consolidated financial highlights Full year (billions of yen) 120 107.2 100 mmm Net income 80 60 me ROE (%) 40 20 11.6 06g, 0 Net revenue 1,535.9 1,813.6 Income before income taxes 85.0 237.7 Net income attributable to Nomura Holdings, Inc. ("NHI") shareholders 116 107.2 Total NHI sha
Slide 21: Consolidated income
Consolidated income NOMURA Full year Quarter (billions of yen) raotiig Fy2oi2a3 F201 Revenue Commissions 347.1 359.1 72.3 83.7 125.7 157.6 105.6 Fees from investment banking 59.6 62.4 17.4 13.0 21.8 25.4 23.0 Asset management and portfolio service fees 144.3 141.0 33.4 35.0 38.8 42.4 40.7 Net gain o
Slide 22: Main revenue items
Main revenue items NOMURA Full year Quarter Stock brokerage commissions (retail) 36.0 51.8 7.0 10.7 26.6 42.5 25.4 Stock brokerage commissions (other) 132.7 112.9 25.3 27.2 32.0 37.7 31.6 Other brokerage commissions 9.4 11.7 26 3.0 3.8 5.3 4.2 Commissions for distribution of investment trusts 136.6
Slide 23: Income before income taxes by segment and region
segment and region Consolidated results: Income (loss) before income taxes by Adjustment of consolidated results and segment results: Income (loss) before income taxes NOMURA Income (loss) before income taxes by region? Retail 63.1 100.6 11.0 20.3 57.2 81.1 40.0 Asset Management 20.5 21.2 46 7.3 3.9
Slide 24: Segment “Other”
Segment “Other” Income (loss) before income taxes NOMURA Net gain (loss) related to economic hedging transactions Realized gain(loss) on investments in equity securities held for operating purposes Equity in earnings of affiliates Corporate items‘ Others" Income (Loss) before income taxes 02 10.6 -3
Slide 25: Retail related data (1)
Retail related data (1) (billions of yen) Full year Quarter NOMURA (1) _Nomura Securities. Commissions 201.5 225.9 417 557 110.3 66.5 -39.7% 59.3% Sales credit 59.0 809 168 203 286 297 243 18.2% 44.5% Fees from investment banking and other 38.2 36.8 9.4 66 104 98 13.4 36.0% 41.9% Investment trust ad
Slide 26: Retail related data (2)
Retail related data (2) NOMURA Stock brokerage commissions and commissions for distribution of investment trusts Full year Quarter (billions of yen) (billions of yen) 180 70 150 60 50 ™ Stock brokerage 120 ‘commissions 40 "= Commissions for distribution 90 30 of investment trusts 60 20 30 10 0 i?) S
Slide 27: Retail client assets
a) 2) Retail client assets = Other ™ Overseas mutual funds ™Bond investment trusts ™ Stock investment trusts = Domestic bonds ™ Foreign currency bonds Retail related data (3) (trillions of yen) 80 72.0 60 40 20 ° 83.8 : 73.6 67.3 = Equities Fraotiig Fyzoiia F212 | Mar 12 Mar.13Sep.12 Dec. 12 Mar. 13
Slide 28: Retail related data (4)
Retail related data (4) NOMURA Retail client assets: Net asset inflow’ Full year Quarter (billions of yen) (billions of yen) 4,000 4,225 1,300 1,100 2,400 900 2,000 700 500 360 1,035 188 300 =. og Gf «~ — 0 10 -100 (1) Net asset inflow = asset inflow — asset outflow. Retail client assets exclude por
Slide 29: Retail related data (5): Number of accounts
Retail related data (5) Number of accounts NOMURA (Thousands) /FY201112, FY2012/13 | Mar.12 Mar.43 Sep.12 Dec. 12 Mar.13 Jun. 13 Sep. 13 Accounts with balance 4,985 5,025 5,003 5,006 5,025 5,069 5,090 Equity holding accounts 2,706 2,717 2,731 2,710 2,717 2,727 2,722 Nomura Home Trade / Net & Call ac
Slide 30: Asset Management related data (1)
Asset Management related data (1) NOMURA (blions of yen) i a i ae Pravelran| 70 QA 2 (2) Netafter deducting duplications from assets under management ( (1) [etal gscete under management for Nomura Asset Management Nomure Funds Research and Technologies, Nomura Corporate Reseerch end Asset Menagement
Slide 31: Asset Management related data (2)
Assets under management (gross) by business* Asset Management related data (2) NOMURA Asset inflows/outflows by business* (net)? Full year Quarter (ions of yen) ere ria ving Fyzonaia tenonsetyen 200 3Q QQ 2 Investment trusts {hvestment trust 230 265 217 240 265 264 268 business 295 1,099 87 = 354 53
Slide 32: Wholesale related data (1)
Wholesale related data (1) Wholesale NOMURA (billions of yen) 555.0 Net revenue 137.1 189.0 196.9 194.6 183.3 -5.8% 33.7% Non-interest expenses 592.7 573.2 136.9 144.6 161.3 169.4 158.1 6.7% 15.5% Income (Loss) before income taxes 37.7 71.7 02 444 35.7 25.2 25.3 0.2% 131.0x Breakdown of Wholesale re
Slide 33: Wholesale related data (2)
Wholesale related data (2) Private equity related investments (billions of yen) 300 Terra Firma 221.3 = Asia 200 mEurope (excluding Terra Firma) 104.6 = Japan 100 5 0 Japan 65.5 52.7 Europe (excluding Terra Firma) 26.8 21.8 Asia 1.9 2.0 Sub Total 94.4 76.5 Terra Firma 127.2 28.1 Total 221.3 104.6 20
Slide 34: Number of employees
Number of employees NOMURA Japan (excluding FA) 19,598 14,123 20,039 19,877 14,123 14,654 14,454 Japan (FA) 2,011 1,907 1,981 1,951 1,907 1,911 1,923 Europe 4,014 3,618 3,940 3,747 3,618 3,485, 3,459 Americas 2,420 2,271 2,425 2,316 2,274 2,240 2,243 Asia-Pacific! 6,352 6,037 6,430 6,207 6,037 5,961
Slide 35: Disclaimer
Disclaimer NOMURA ® 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
Slide 36: Nomura Holdings, Inc.
NOAURA Nomura Holdings, Inc. www.nomura.com