Monex Group, Inc. · TSE:8698
Monex — 3Q FYE March 2010 Earnings Presentation
38 slides from Monex's earnings presentation, Jan 27, 2010
Slide 1: Financial Results of 3Q of Fiscal Year Ending March 31, 2010
January 27, 2010 Financial Results of 3Q of Fiscal Year Ending March 31, 2010 This is an English translation of Japanese presentation material prepared for the financial disclosure on the date above; it includes the information on consolidated financial summary under Japanese GAAP. If there is any d
Slide 2: Important Matters Concerning Product-related Risks
Important Matters Concerning Product-related Risks This material is explanatory material on the financial results of Monex Group, Inc. (“the Company”). The descriptions herein concerning the products, services, etc. which are handled by the Company’s group companies (“the Group Companies”), are made
Slide 3: Our Business Principles
Our Business Principles 1. PURSUE A SPIRIT OF INNOVATION We will constantly strive to pioneer new fields in finance and propose new approaches to managing money. 2. STAY CUSTOMER FOCUSED We believe that the best guide to our corporate activities is the voice of our customers. With this guide, we wil
Slide 4: Table of Contents
Table of Contents Important Matters Concerning Product-related Risks ･･･ p.1 Our Business Principles ･･･ p.2 I. Financial Results 1. Financial Overview 2. Business Strategies (1) Major Business Activities for 3Q ･･･ p.5 (1) Short-term Strategy (2) Financial Overview of 3Q, FYE Mar. 31, 2010 ･･･ p.6
Slide 5: 1. Financial Results
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 4
Slide 6: Major Business Activities for the Third Quarter
Major Business Activities for the Third Quarter ◆ Proceeding with the consolidation of Monex, Inc. and ORIX Securities - Share Exchange Agreement with ORIX Securities was signed on October 28, 2009 and became effective on January 17, 2010 following the approval by the Extraordinary General Meeting o
Slide 7: Financial Overview
Financial Overview ■Financial Overview of 3Q(Oct.- Dec.) of FYE Mar. 31, 2010 Trading valued in major markets took downturn, but FX business expanded smoothly, so net operating revenues decreased by only 3.7% Net operating revenues 4,589 million yen -3.7% from 2Q of FYE Mar. 31, 2010 -Brokerage com
Slide 8: Highlights of Revenue (1) Increasing and Decreasing Factors
Highlights of Revenue (1) Increasing and Decreasing Factors ■Comparison with 2Q of FYE Mar. 31, 2010 ■Comparison with 3Q(Apr.-Dec) of FYE Mar. 31, 2009 ◆Trading values decreased and temporary financial ◆Equity trading values took downturn income was recognized in last 3Q Decrease by 174 million yen
Slide 9: Highlights of Revenue (2) Trends and Structure
Highlights of Revenue (2) Trends and Structure ■Net operating revenues and operating income ■Revenue structure and dependency on brokerage (million yen) (billion yen) Total trading value of individual investors ◆Revenue and asset in custody 3Q(Apr.-Dec.) of 10,000 1,000 in 4 major stock exchanges FY
Slide 10: Highlights of SG&A (1) Decreasing Factors
Highlights of SG&A (1) Decreasing Factors ■Comparison with 2Q of FYE Mar. 31, 2010 ■Comparison with 3Q(Apr.-Dec.) of FYE Mar. 31, 2009 ◆Keep low-cost structure ◆10.9% cost reduction, compared to last 3Q Decrease by 137 million yen (-3.8%) Decrease by 1,294 million yen (-10.9%) from 2Q of FYE Mar. 31
Slide 11: Highlights of SG&A (2) Cost Structure and Trends
Highlights of SG&A (2) Cost Structure and Trends ■Cost Structure (Apr. 2009 - Dec. 2009) ■Quarterly trends million yen Strategically Fixed costs and costs controllable costs 5,000 correlated to the number of accounts 4,032 3,902 4,000 3,554 3,585 3,447 Commission to stock exchange 3,000 etc. Adverti
Slide 12: Balance Sheet
Balance Sheet ■Maintain a safe financial structure by maintaining liquidity and credit trust, and by controlling risk assets (in billion yen) (*3) Non-current assets（investment value of risk assets） (in billion yen) [Segregated cash trust] [Cash margin from customers Property/equipment 0.4（Facilitie
Slide 13: Financial Summary: 2Q vs. 3Q of FYE Mar. 31, 2010
Financial Summary : 2Q of FYE Mar. 31, 2010 vs. 3Q of FYE Mar. 31, 2010 (in 3 months) (in million yen, %) 2Q of FYE 3Q of FYE Mar. 31, 2010 Mar. 31, 2010 Change (Jul. 2009-Sep. 2009) (Oct. 2009-Dec. 2009) Operating Revenues 5,242 5,317 1.4 ％ Net Operating Revenues 4,763 4,589 -3.7 ％ SG&A 3,585 3,447
Slide 14: Financial Summary: 3Q FYE Mar. 2009 vs. 3Q FYE Mar. 2010
Financial Summary : 3Q of FYE Mar. 31, 2009 vs. 3Q of FYE Mar. 31, 2010 (in 9 months) (in million yen, %) 3Q of FYE 3Q of FYE Mar. 31, 2009 Mar. 31, 2010 Change (Apr. 2008-Dec. 2008) (Apr. 2009-Dec. 2009) Operating Revenues 19,884 16,698 -16.0 ％ Net Operating Revenues 16,694 14,572 -12.7 ％ SG&A 11,8
Slide 15: Financial Summary: Quarterly trends in income statement
Financial Summary：Quarterly trends in income statement (in million yen) FYE Mar.31, 2008 FYE Mar.31,2009 FYE Mar.31,2010 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Brokerage commissions 4,228 4,160 4,022 3,692 3,505 2,612 2,911 2,342 3,145 2,670 2,073 Underwriting and distribution commissions 19 77 5 9 1 0 1
Slide 16: Financial Summary: Quarterly trends in SG&A
Financial Summary：Quarterly trends in SG&A (in million yen) FYE Mar.31, 2008 FYE Mar.31,2009 FYE Mar.31,2010 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Transaction-related expenses 1,361 1,310 1,151 1,099 1,182 1,172 1,188 1,095 979 1,044 948 Commissions paid 231 248 245 233 238 214 240 190 196 263 181 Exchan
Slide 17: Comparison Analysis: Revenues/SG&A per Customers' Assets in Custody
Comparison Analysis : Revenues/SG&A per Customers’ Assets in Custody (Annualized) Matsui MUFG (Consolidated) Rakuten Securities (Consolidated) 2.0% Customers’ assets in custody remained unchanged 2Q of Mar. 2010 2Q of Mar. 2010 Holdings (Consolidated) compared to the end of 2Q. Revenues per customer
Slide 18: 2. Strategies
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 17
Slide 19: Mission Statement
Mission Statement Take the position as an online integrated financial service provider for individual investors Provide individual investors with institutional investor level investment opportunities Offer comprehensive products and services with “world class quality” Empower investors educa
Slide 20: The Monex Group
The Monex Group Holding Company （As of January 27, 2010） [ Financial products and services for individual investors ] [ Overseas subsidiary and office ] Securities Company FX Business Overseas Businesses MBH America, Inc. ORIX Securities Corp. Research in the global financial industry Monex FX, Inc.
Slide 21: Leadership and Originality of Monex
Leadership and Originality of Monex ◆ Brokerage business Monex Night Time Trading Jan. 2001: The first PTS (proprietary trading system) offered to retail investors in Japan Stock lending service Jan. 2003: First to offer to retail investors in Japan ◆ Mutual fund business Top class online sales Keep
Slide 22: Roadmap
Roadmap ■ Long-term goal: Aim for overseas business to contribute 1/3 of the total revenue Our goal is to become a GLOBAL TECHNOLOGY-BASED RETAIL financial services provider Future growth and management policy Online • Expand active trader customer segment Trading • Strengthen FX business segment
Slide 23: Rising Importance of Business Scale and Cost Efficiency in Online Securities Industry
Rising Importance of Business Scale and Cost Efficiency in Online Securities Industry ■Status of online securities industry Grew rapidly after brokerage commission liberalized in 1999, but trading volume depressed since 2006 Competition for customer accounts through price discount intensified, with
Slide 24: Short-term Strategy: Merger to Achieve Expansion of Scale and Obtain Cost Synergy
Short-term Strategy: Merger to Achieve Expansion of Scale and Obtain Cost Synergy ■Structure and purpose of merger ■Outlook after share exchange and capital alliance Structure after share exchange (January 17, 2010) ◆System - The infrastructure system is to be integrated into Monex’s current system
Slide 25: Short-term Strategy: Outlook of Online Securities Companies
Short-term Strategy: Outlook of Online Securities Companies ◆Numbers of accounts（end of December 2009） ◆Assets in custody （end of December 2009） (in billion yen) SBI 2,001,660 SBI 3,714.3 （assumption）Monex + ORIX 1,308,265 （assumption）Monex + ORIX 2,152.5 Monex 935,918 Monex 1,670.6 Rakuten 913,016
Slide 26: Short-term Strategy: Basic Policy to Integrate Products and Services
Short-term Strategy: Basic Policy to Integrate Products and Services ■Products and services Will build based upon the current Monex, Inc. system, and the current products and services of Monex, Inc. will be continued ◆Stock brokerage（Cash/Margin） Maintain the current securities trading transaction f
Slide 27: Mid-term Strategy: Intelligence Infrastructure
Mid-term Strategy: Intelligence Infrastructure ■"Intelligence Infrastructure" ■Online tool to provide various customers with advice ◆Creating a new value of Monex -To provide proper investment advice with global standard ◆Advice to customers with various investment styles products –Advice for custom
Slide 28: Overseas Business Development
Overseas Business Development ■Business development and areas of growth ■Update on overseas business development ◆Overseas markets with high growth potential ◆ China The population with material financial assets is increasing in March 2008 - Established Beijing Representative Office emerging countri
Slide 29: 3. Businesses
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 28
Slide 30: Breakdown of Net Operating Revenues
Breakdown of Net Operating Revenues ■3Q(Apr.-Dec.) of FYE Mar. 31, 2010 (in million yen) Transaction Business category Entity Management Fee Total % Refer to Commission Fee 2,507 7,889 Brokerage Monex, Inc. (Interest income from 10,397 71% p. 30 (Commissions) margin business) Monex, Inc. 2,367 FX bu
Slide 31: Equity Business / FX Business
Equity Business / FX Business ■Equity business ■ FX business: Expanding profit in a growing market ◆ Self-manufacture of Futures/Options for further growth ◆Monex, Inc. FX PLUS ・Our trading share of Nikkei225(Large) exceeded 10% Activities in 3Q: ・Trading volume of other Futures/Options also growing
Slide 32: Mutual Fund Business (1)
Mutual Fund Business (1) ■Strengthen product lines and services to expand mutual fund asset ■Top-class online mutual fund sales ◆Purchase by monthly auto-investment program increases ◆Keeping the top-class position in online mutual fund sales （billion yen Assets in custody by category and monthly sa
Slide 33: Mutual Fund Business (2) / Fixed Income and Stock Lending Businesses
Mutual Fund Business (2) / Fixed Income and Stock Lending Businesses ■Alternative Investment Business ■Fixed income and stock lending businesses ◆ Fixed income : Promoting as a steady investment product http://www.monexai.com/english.php in the context of current macroeconomic environment - Timely p
Slide 34: Investment Banking Business / R&D
Investment Banking Business / R&D ■IPO Underwriting Business (Monex, Inc.) ■ R&D by Trade Science Corporation (TS) While other security firms tend to withdraw from the IPO ◆ R&D outfit of Monex Group underwriting business, Monex continues to utilize our - Positioned as an in-house laboratory for inf
Slide 35: Customer Data of Monex, Inc.
Customer Data of Monex, Inc. (935,918 accounts as of the end of Dec, 2009) ■ Sex ■ District Others Female 23.2% 25.3% Tokyo Metropolitan District Nagoya District 50.5% Male 8.5% 74.7% Osaka District 17.8% ■ Age ■ Occupation Over 70 3.7% Company Employee 47.2% 60s 12.3% Unemployed 17.8% 50s 16.0% Sel
Slide 36: Customer Data of ORIX Securities
Customer Data of ORIX Securities (372,347 accounts as of the end of Dec, 2009) ■ Sex ■ District Others Female 25.4% 21.7% 43.6% Nagoya District Tokyo Male 10.4% Metropolitan 78.3% Osaka District District 20.6% ■ Age ■ Occupation Company Employee 43.5% Over 70 4.5% Unemployed 21.5% 60s 13.4% Self-emp
Slide 37: 4. To our Shareholders
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 36
Slide 38: Investors' Guide
Investors’ Guide ■Pursuing investment returns for our shareholders ◆Shareholder’s return Major shareholders and share distribution - The Company’s policy for shareholder’s return is to pay the dividends based on the business performance. The payout Based on the record as of the end of September 200
Monex Group — 3Q FYE March 2010 Earnings Presentation on 6ix