Nomura Holdings, Inc. · TSE:8604
Nomura — H1 FY2002 Earnings Presentation
35 slides from Nomura's earnings presentation, Nov 1, 2001
Slide 1: Consolidated Results of Operations (Six months ended September 30, 2001)
Consolidated Results of Operations (Six months ended September 30, 2001) Nomura Holdings, Inc. October 2001 1 This is a summary of the presentation on consolidated results of operations for the six months ended September 31, 2001. Date: November 1, 2001 (Thursday) Place: Nihonbashi Headquaters of No
Slide 2: Outline of the Presentation
Outline of the Presentation n Review of Operations Ø Global Wholesale Ø Consolidated Financial Summary 4 • Fixed Income 18 Ø Commissions 5 • Equity 19 Ø Net Gain on Trading 9 • Investment Banking 20 Ø Selling, General and Administrative Expenses 10 Asset Management Businesses 24 Ø Cost Structure 11
Slide 3: Review of Operations
NOMURA Review of Operations
Slide 4: Consolidated Financial Summary under Japanese GAAP
Consolidated Financial Summary under Japanese GAAP Six months ended September 30, 2001 n Operating Results Ø Net Operating Revenue 279.3 billion yen, down 29%* Ø Selling, General and Administrative Expenses 242.0 billion yen, down 6%* Ø Ordinary Income 52.9 billion yen, down 65%* Ø Net Income 11.3 b
Slide 5: Commissions (1): Brokerage Commissions
Commissions (1) Brokerage Commissions Stock Brokerage Com. 48.1 billion yen, down 24% Down n Retail Stock Brokerage Commissions* (Billions of yen) 25% Ø Equivalent to 67% of total stock brokerage 80 66.8 commissions 70 1.9 Ø 32.3 billion yen, down 24% 60 1.4 49.9 20.8 0.9 n Individual Equity Agency
Slide 6: Commissions (2): Underwriting Commissions
Commissions (2) Underwriting Commissions Equity Underwriting Com. 12.4 billion yen, down 46% Down n Stagnant Equity Primary Markets (Billions of yen) 18% IPO * 35.7 40 Ø Market: 383.2 billion yen, down 44% Ø Nomura: 64.5 billion yen, down 78% 35 0.3 29.5 Ø Nomura’s share: 17% 30 12.6 0.3 PO * Ø Mark
Slide 7: Commissions (3): Distribution of Investment Trusts
Commissions (3) Commissions for Distribution of Investment Trusts n Domestic Distribution Volume of Investment Trusts (Billions of yen) Down Ø Total: 34% • 13.1 trillion yen, up 17% 20 18.8 Ø Bond investment trusts: • 11.8 trillion yen, up 19% 15 Ø Stock investment trusts: 12.5 • 0.7 trillion yen, d
Slide 8: Commissions (4): Other Commissions
Commissions (4) Other Commissions Asset Management Fees 57.4 billion yen, down 21% n Factors of Decrease (Billions of yen) Down Redemption of Medium-term Government Securities Fund 19% 100 91.8 Ø Assets under management (NAM) 3.6 tril. as of Mar. 01 Decrease in equity investment trusts 90 11.8 74.1
Slide 9: Net Gain on Trading
Net Gain on Trading n Equity Trading Down Ø Block trades (Billions of yen) 51% 172.6 170 4.6 n Bond Trading 25.9 150 Ø Medium-term Notes 16.4 130 Ø Bonds denominated in foreign currencies 110 84.0 90 4.6 n Principal Finance 70 22.0 125.7 50 30 59.3 10 -1.8 -10 FY01.3 (1/2) FY02.3 1H Equity Fixed inc
Slide 10: Selling, General and Administrative Expenses
Selling, General and Administrative Expenses n Compensation and Benefits (Billions of yen) Down Ø FY01.3 268.4 billion yen (full -year base) 300 6% Ø FY02.3 1H 122.4 billion yen, down 9% 256.2 250 14.0 242.0 4.1 12.6 17.8 3.8 n IT-related Expenses 19.9 200 31.9 Ø FY01.3 49.2 billion yen (full -year
Slide 11: Cost Structure
Cost Structure n Breakdown of Compensation and Benefits n Strategic Outsourcing Target for FY02.3 Ø Down 7.6 billion yen compared with FY00.3 80 77.8 73.6 n Reconsideration of Investment Plans for 70 69.5 the Latter Half of FY02.3 64.7 Ø IT-related investment 10%* 60 Ø Real estate-related investment
Slide 12: Review of Businesses
Review of Businesses n Securities Businesses Ø Domestic Retail Ø Global Wholesale n Asset Management Businesses 12 12
Slide 13: Business Portfolio
Business Portfolio Securities Domestic Global Businesses Retail Wholesale Fixed Income Equity Investment Banking Merchant Banking Asset Management Asset Businesses Management 13 This page shows Nomura’s business portfolio. Nomura’s business portfolio consists of two business areas: securities busine
Slide 14: Domestic Retail (1): Net Asset Accumulation
Securities Businesses – Domestic Retail (1) Net Asset Accumulation n Net Asset Accumulation (monthly average) n Client Assets of Major Bond Investment Trusts (Nomura Securities) (Billions of yen) 700 12 592.5 600 2.3 10 3.1 500 8 2.6 1.0 388.7 400 6 300 238.8 192.0 4 200 2 100 38.1 0 0 FY99.3 FY00.3
Slide 15: Domestic Retail (2): Retail Client Assets
Securities Businesses – Domestic Retail (2) Retail Client Assets (Trillions of yen) n 12% Decrease of Assets in Equities* 30.0 Ø TOPIX down by 20% 27.8 26.5 26.9 0.7 0.6 0.7 24.7 25.0 n 11% Decrease of Assets in Investment Trusts* 0.7 5.9 Ø Redemption of Medium-term Government Securities Fund 9.0 19
Slide 16: Domestic Retail (3): Development of Client Accounts
Securities Businesses – Domestic Retail (3) Development of Client Accounts (Thousands of accounts) (Thousands of accounts) 3,000 60 2,686 2,539 2,500 49 2,395 50 43 2,169 2,000 1,903 37 40 1,665 1,500 30 23 25 21 1,000 20 500 10 0 0 FY01.3 1Q 2Q 3Q 4Q FY02.3 1Q 2Q Number of NCMS* accounts as of the
Slide 17: Domestic Retail (4): Online Trading
Securities Businesses – Domestic Retail (4) Online Trading Market Share as of the End of Sep. 2001* 31.1% (Thousands of 900 accounts) 38% 778 40% 800 34% 36% 32% 35% 686 700 30% 26% 584 600 25% 25% 500 461 18% 17% 20% 400 349 15% 14% 283 15% 300 10% 8% 10% 200 100 5% 0 0% FY01.3 1Q 2Q 3Q 4Q FY02.3 1
Slide 18: Global Wholesale (1): Fixed Income
Securities Businesses – Global Wholesale (1) Fixed Income n Fixed Income Trading n Cooperate with Domestic Retail Ø Medium-term Notes Share in JGB Auction* Ø Bonds denominated in foreign currencies 16% n Expand Structured Products Businesses Ø CMBS in Japan Share in Secondary Trading* Ø Housing loan
Slide 19: Global Wholesale (2): Equity
Securities Businesses – Global Wholesale (2) Equity Off-floor/Off-exchange Trading Share* Net Gain on Equity Trading (Nomura Securities) (Billions of yen) 30 30% (Trillions 70 65.5 of yen) 24% 25 22% 25% 60 19% 19% 19% 20 18 18% 20% 51.7 18 50 16 15 14 15% 13 11 38.5 40 10 10% 28.8 30 27.2 5 5% 21.6
Slide 20: Global Wholesale (3): Equity Underwriting
Securities Businesses – Global Wholesale (3) Investment Banking: Equity Underwriting Japanese Equity: Japanese Equity: Primary and Secondary Offerings IPOs 4,000 60% 1,000 60% 44% 40% (Billions 900 3,500 of yen) (Billions of yen) 40% 40% 800 42% 17% 3,000 36% 682.2 700 20% 20% 2,500 2,233.6 600 16%
Slide 21: Global Wholesale (4): Bond Underwriting
Securities Businesses – Global Wholesale (4) Investment Banking: Bond Underwriting Retail-targeted Japanese Euro Yen Japanese Samurai Bonds Corporate Bonds Bonds Corporate Bonds 54% 52% 44% 33% 33% 24% 22% 19% 18% 19% 18% 18% FY00.3 FY01.3 FY02.3 FY00.3 FY01.3 FY02.3 FY00.3 FY01.3 FY02.3 FY00.3 FY01
Slide 22: Global Wholesale (5): Enhancement of Product Lines
Securities Businesses – Global Wholesale (5) Investment Banking: Enhancement of Product Lines n M&A/Financial Advisory Ø Strategic alliance with Thomas Weisel Partners M&A ranking (Jan.-Sep. 2001)* Ø M&A ranking (Jan.-Sep. 2001) #2* Amount # of Rank Advisor Ø Assigned as an advisor of large M&A deal
Slide 23: Global Wholesale (6): Alliance with Thomas Weisel Partners
Securities Businesses – Global Wholesale (6) Alliance with Thomas Weisel Partners Launch: 1999 Headquarters: San Francisco CEO: Thomas W. Weisel Purpose of the Alliance The Alliance includes: n To expand our investment banking services, n A $75 million investment in TWP; including coordination of cr
Slide 24: Asset Management Businesses
Asset Management Businesses Assets Under Management (NAM) Market Share (NAM) (Trillions of yen) 40% 25 35% 35% 20.0 21.0 32% 19.9 0.2 19.8 30% 20 0.1 0.2 0.2 30% 28% 4.9 30% 4.9 4.4 25% 14.7 5.6 28% 25% 27% 15 0.0 26% 4.8 20% 23% 21% 10 20% 10.7 11.7 13.3 12.9 15% 18% 18% 17% 7.8 10% 5 Bond investme
Slide 25: Management Structure of Nomura Holdings, Inc.
Management Structure of Nomura Holdings, Inc. 25 25
Slide 26: Management Structure of Nomura Holdings, Inc. (NHI)
Management Structure of Nomura Holdings, Inc. (NHI) General General Meeting Meeting of of Shareholders Shareholders Board Board of of Statutory Statutory Board Board of of Directors Directors Statutory Statutory Auditors Auditors Auditors Auditors n n Internal Internal audit audit function function
Slide 27: Appendix
n Quarterly Revenue Breakdown Appendix n Client Assets (Nomura Securities) n Retail Client Assets n Number of Accounts Ø Nomura Home Trade (online trading) Ø Nomura Cash Management Services n Market Share: Individual Equity Agency Transactions n Value at Risk n NAM’s Assets under Management n Number
Slide 28: Quarterly Revenue Breakdown
Quarterly Revenue Breakdown (Billions of yen) 250 200 150 100 50 0 FY01.3 1Q 2Q 3Q 4Q FY02.3 1Q 2Q Net gain on trading 106.1 87.3 37.7 114.1 45.8 38.3 Underwriting commissions* 16.3 25.6 20.0 9.7 9.5 20.0 Com. for distribution of investment trusts 13.9 12.5 5.0 6.3 7.8 4.7 Asset management related f
Slide 29: Client Assets (Nomura Securities)
Client Assets (Nomura Securities) 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. 98 98 98 98 99 99 99 99 00 00 00 00 01 01 01 Total client assets 47.4 46.6 43.4 43.7 49.5 54.8 57.6 60.6 62.4 61.8 58.3 54.4 56.8 57.5 52.3 Others 0.3 0
Slide 30: Retail Client Assets
Retail Client Assets (Trillions of yen) 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. 98 98 98 98 99 99 99 99 00 00 00 00 01 01 01 Total client assets 18.2 18.7 18.1 18.4 19.7 21.5 22.9 26.2 26.5 27.0 26.6 26.5 26.9 27.8 24.7 Others 0.1 0
Slide 31: Number of Accounts
Number of Accounts Nomura Home Trade (online trading accounts) 778 800 686 (Thousands of accounts) 584 600 461 400 349 283 188 200 109 61 4 6 7 8 9 17 0 Mar.98 Jun.98 Sep.98 Dec.98 Mar.99 Jun.99 Sep.99 Dec.99 Mar.00 Jun.00 Sep.00 Dec.00 Mar.01 Jun.01 Sep.01 Nomura Cash Management Service 3000 (Thous
Slide 32: Individual Equity Agency Transactions
Individual Equity Agency Transactions* (Trillilions of yen) 20 Market (monthly average) Nomura's share 30% 25% 25% 21% 15 21% 20% 19% 20% 17% 16% 16% 16% 16% 10.4 9.7 10 15% 7.2 6.3 5.6 10% 5.1 4.9 5 3.7 3.7 3.3 5% 0 0% FY00.3 FY01.3 FY02.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Sources: Tokyo Stock Exchange
Slide 33: Assets Under Management (NAM)
Assets Under Management (NAM) (Trillions of yen) 25 20 15 10 5 0 Mar. Jun. Sep. D e c . Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. 98 98 98 98 99 99 99 99 00 00 00 00 01 01 01 Total 14.1 15.1 14.1 14.1 14.7 17.7 17.6 17.9 19.9 21.7 20.0 20.3 21.0 21.9 19.8 Investment advisory (overseas)
Slide 34: Value at Risk
Value at Risk n Definition n From Apr. to Sep. 2001 Ø 99% confidential level Ø Maximum: 4.5 billion yen Ø Minimum: 2.7 billion yen Ø 1-day holding period Ø Average: 3.3 billion yen (Billions of yen) Mar.00 Sep.00 Dec.00 Mar.01 Jun.01 Sep.01 Equity 1.7 2.6 2.3 3.0 2.5 2.0 Interest Rate 1.5 1.8 1.9 2.
Slide 35: Number of Employees
Number of Employees 20,000 15,000 10,000 5,000 0 Mar. 98 Mar. 99 Mar. 00 Sep. 00 Mar. 01 Jun. 01 Sep. 01 Total 16,611 15,803 14,823 14,636 14,393 14,998 14,827 Asia / Oceania 557 517 488 500 486 473 476 Americas 1,258 1,145 983 796 835 874 871 Europe 2,290 1,769 1,319 1,329 1,370 1,380 1,449 Japan (