Nomura Holdings, Inc. · TSE:8604
Nomura — Q3 FY2020/21 Earnings Presentation
36 slides from Nomura's earnings presentation, January 2021
Slide 1: CFO overview of third quarter results
Good evening, this is Takumi Kitamura, CFO of Nomura Holdings. I will now give you an overview of our financial results for the third quarter of the fiscal year ending March 2021 using the document titled Consolidated Results of Operations. Please turn to page two.
Slide 2: Presentation and Financial Supplement contents
Presentation Financial Supplement © Executive summary (P2-5) © Overview of results (P6) © Business segment results (P7) © Retail (P8-9) © Asset Management (P10-11) © Wholesale (P12-14) © Non-interest expenses (P15) © Robust financial position (P16) © Funding and liquidity (P17) © Consolidated balanc
Slide 3: Nine-month results summary
Net revenue for the nine months to December was 1,231.8 billion yen, representing a year-on-year increase of 17 percent. Income before income taxes increased 45 percent to 396.8 billion yen. Net income grew 23 percent to 308.5 billion yen. This is a record set of results from the year ended March 20
Slide 4: International business income improved significantly
First, the performance of our international business has improved significantly, delivering a record level of income before income taxes since the year ended March 2003 when comparisons are possible. The bar graph on the left shows income before income taxes by region. Firm-wide income before income
Slide 5: Market share in core products
Page four is a slide we used at our investor presentation in December which shows the market share for our core products. We have grown our market share and retain top five positions in key products such as US and European government bonds, AEJ Credit, US Securitization business, and US equity liste
Slide 6: Third quarter performance
As shown on the top right, firm-wide income before income taxes increased 57 percent to 131.3 billion yen, while net income grew 45 percent to 98.4 billion yen. All of our three core business segments posted strong performance this quarter. Three segment income before income taxes was 127.5 billion
Slide 7: Highlights
Highlights (billions of yen, except EPS and ROE)
Slide 8: Net revenue and income before income taxes
Net revenue and income (loss) before income taxes {billions of yen) 26 35% - 69 ‘ 1313 | 51% } 88% } 396.8 | 45% “Additional information on “Other" © Gain related to economic hedging (Y1.4bn) ™ Gain on changes to own and counterparty credit spread to (¥2.5bn)
Slide 9: Retail
First, Retail. Third quarter net revenue increased 6 percent quarter on quarter to 98.2 billion yen, while expenses remained roughly unchanged from the previous quarter. As a result, income before income taxes grew 24 percent to 28.3 billion yen, the highest level in three years. In summer 2019 we r
Slide 10: Retail recurring revenue assets and clients
Recurring revenue assets shown on the top left increased to nearly 18 trillion yen lifted by market gains. The consulting-related business shown here on the lower left consists of many transactions that require extensive face-to-face interactions so is the most susceptible to restrictions on sales a
Slide 11: Asset Management
Third quarter net revenue increased 39 percent quarter on quarter to 37.3 billion yen and income before income taxes gained 96 percent to 22.3 billion yen. American Century Investments related gain/loss was significant this quarter at 13.2 billion yen. These results represent the strongest net reven
Slide 12: Asset Management flows and AUM
First, the flow of funds shown on the left saw about 590.0 billion yen of inflows into the investment trust business. ETFs reported inflows of approximately 200.0 billion yen and MRF inflows were approximately 500 billion yen from funds likely derived from profit taking on the back of the stock mark
Slide 13: Wholesale
Net revenue remained high in line with last quarter at 223.1 billion yen, while expenses declined by 6 percent. As a result, income before income taxes increased 17 percent to 76.9 billion yen. Compared to when the pandemic first started to take hold, we have been able to respond much better to inve
Slide 14: Global Markets
Global Markets maintained momentum from the strong previous quarter with net revenue of 187.5 billion yen, a record since the year ended March 2002 when comparisons are possible. Fixed Income net revenue declined 6 percent quarter on quarter to 98.1 billion yen. While softer revenues in Rates is the
Slide 15: Investment Banking
Net revenue increased 27 percent quarter on quarter to 35.6 billion yen. Third quarter revenues saw strong contributions from industrial realignment and business reorganizations in Japan and cross-border M&A transactions. Japan-related ECM also had a strong quarter. Investment Banking net revenue wa
Slide 16: Non-interest expenses
Firm-wide expenses decreased 5 percent to 270.8 billion yen. Although firm-wide revenues increased by 9 percent, compensation and benefits were kept at roughly the same level as last quarter. Commissions and floor brokerage declined by 5 percent on lower trading volumes in the Americas. Occupancy an
Slide 17: Robust financial position
Our balance sheet at the end of December was 44.6 trillion yen, up 1.9 trillion yen from the end of September due to repos and trading assets. As shown on the bottom left, our Tier 1 capital ratio at the end of December was 19.9 percent and our CET 1 capital ratio was 17.7 percent, both up compared
Slide 18: Summary of the quarter
To sum up, this quarter we saw the results of our business platform realignment started two years ago and we were able to monetize favorable market conditions and business opportunities. We delivered results in terms of earnings with three segment income before income taxes reached a record high sin
Slide 19: Financial Supplement
Financial Supplement 18
Slide 20: Consolidated balance sheet
Consolidated balance sheet (billions of yen) Assets Total cash and cash deposits Total loans and receivables ‘Short-term borrowings Total payables and deposits Total collateralized financing Trading liabilities Total collateralized agreements Other liabilities Long-term borrowings calredihee smn Tot
Slide 21: Value at risk
= Definition = From April 1, 2020, to December 31, 2020 (billions of yen) — 99% confidence level ~ Maximum: 27.0 — 1-day time horizon for outstanding portfolio = Minimum’: 7.0 — Inter-product price fluctuations considered — Average’: 13.9 toons yon) ES ee Equity 441 89 14 89 16 34 34 Interest rate 2
Slide 22: Consolidated financial highlights
1. Full year Quarter (billions of yen) (billions of yen) 12% 300 mmm Net income (loss) attributable to Nomura 217.0 9 Holdings, Inc. (NHI") 200 8% — 509 ‘shareholders 100 4% 100 ——ROE(%) 0 o% 0 “100 4004 20 100 Net revenue 1,116.8 1,287.8 Income (loss) before income taxes 377 248.3 Net income (loss)
Slide 23: Consolidated income
Full year Quarter (billions of yen) “Fr2ua%9 Fr2019% — Fvanz0 0 Fv20@O2A Revenue ‘Commissions 293.1 308.8 79.3 6.1 85.5 923 96.7 Fees from investment banking 101.5 103.2 26.8 268 10.8 27.0 36.1 Asset management and portfolio service fees 245.5 238.2 61.0 57.3 53.7 57.4 58.6 Net gain on trading 343.0
Slide 24: Main revenue items
Full year Quarter ; —Fy20197200 200021 (bilions of yen) ze ees oo ‘Stock isSi 192.0 196.5 48.1 6.3 629 61.0 65.5 Other brokerage commissions 144 14.4 3.0 5.9 43 29 34 ‘Commissions for distribution of investment trusts 56.6 66.7 19.0 18.6 141 193 18.1 Other 30.0 31.2 92 82 42 91 9.6 Total 293.1 308.8
Slide 25: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter — Fyzoz0Fy20202t (billions of m a= a sa ts Retail 49.5 49.4 17.6 18.4 15.14 228 28.3 Asset Management 34.2 28.8 93 87 192 11.4 22.3 Wholesale 111.4 92.2 43.2 10.4 87.9 65.5 76.9 ‘Three busines
Slide 26: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 160 120 992 574 | 28 18.0 40 279 Net gain (loss) related to economic hedging transactions - 18 17.5 23 46 56 6.0 ail Realized gain (loss) on investments in equity securities held for open 02 66 49 03 07 01 07 Equity in earnings of
Slide 27: Retail results
Full year Quarter (omens ofyen) | -Fvaotezo yoann Commissions 1428 153.2 422 454 408 46.6 49.3 5.6% 16.7% ie Galle. aac Shckiaricie’CSiNERSION’ 60.2 61.2 170 191 27 20.2 24.8 22.4% 45.3% Of which, ¢: for di: of trust 57.9 669 192 186 139 19.6 18.9 3.5% 1.3% Sales credit 55.8 568 167 126 140 144 15.8
Slide 28: Retail client assets
Retail client assets (trillions of yen) 140 Other 122.3 m2 121.0 120 1147 112.2 : ‘= Foreign investment 104.0 104.0 trusts 100 = Bond investment trusts 80 = Stock investment tusts 60 = Domestic bonds 0 Foreign currency bonds 2 = Equities 0 Equities 1.9 62.7 78.3 627 70.2 728 77.2 Foreign currency bo
Slide 29: 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 2015 1,800 1,800 - 1,200 1,200 600 600 ~ 424 = = fs ° » = Oo ” -600 429 -600 28 28
Slide 30: Number of accounts
Number of accounts (thousands) —Fyzows19 Fy20ig720 © Fy20N20, Fv zmQOE Accounts with balance 5,338 5,319 5,328 5,319 5,323 5,323 5,333 Equity holding accounts 2,908 2,920 2.897 2,920 2,935 2,952 2,939 NISA accounts opened (accumulated)' 1,702 4,737 1,728 1,737 1,746 1,753 1,761 Online service accoun
Slide 31: Asset Management results and AUM
on Full year’ Quarter' rvemoet (ottons of yen) “Frzovate F220 i i ae Revenue (excl. ACI-related gain/loss) 102.9 100.2 234 247 1.3% ACl-related gain/loss 5.0 76 06 164 103 22 13.2 61x - Net revenue 97.8 926 25.4 70 340 26.8 73 39.0% 46.9% Non-interest expenses 63.7 638 16.1 158 149 15.4 15.0 2.9% 68
Slide 32: Asset inflows/outflows by business
Asset inflows/outflows by business Full year Quarter “ [rear | rraweco ee | | Investment trusts business 2,187 1,788 296 560 1,210 563 588 of which ETFs 2531 2,133 115 1,130 1,153 618 203 Investment advsory and international 20 302 498 146 163 640 678 businesses Total net asset inflow 2.207 2,090 49
Slide 33: Wholesale results and revenue breakdown
Full year Quarter cere Se ee 30 QQ Net revenue 555.4 186.5 145.9 248.7 220.3 223.1 1.3% 19.6% Non.interest expenses: 666.8 556.4 143.3 135.8 160.8 154.8 146.3 5.5% 21% Income (loss) before income taxes 111.4 922 43.2 10.1 87.9 65.5 76.9 17.4% 1.9% Breakdown of Wholesale revenues! Full year Quarter C
Slide 34: Number of employees
Japan 15,852 15,748 15,971 15,748 16,069 15,807 15,701 Europe 2,909 2,691 2,658 2,691 2,728 2,765 2,751 Americas 2,357 2,120 2,116 2,120 2,164 2,157 2,158 Asia and Oceania’ 6,746 6,070 6,554 6,070 6118 6,140 6,146 Total 27,864 26,629 27,209 26,629 27,079 26,869 26,756 1. Includes Powai office in ind
Slide 35: 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 36: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com