Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2014/15 Earnings Presentation
35 slides from Nomura's earnings presentation, July 2014
Slide 1: First quarter results overview, year ending March 2015
I will now give you an overview of our financial results for the first quarter of the year ending March 2015 using the document titled “Consolidated Results of Operations”. Please turn to page two.
Slide 2: Outline
Outline Presentation NOMURA Financial Supplement Executive summary (p. 2) Overview of results (p. 3) Business segment results (p. 4) Retail (p. 5-6) Asset Management (p. 7-8) Wholesale (p. 9-11) Non-interest expenses (p. 12) Robust financial position (p. 13) Funding and liquidity (p. 14) Consolidate
Slide 3: Executive summary
We faced a challenging environment in the first quarter as geopolitical risk increased and investors weighed the outlook for monetary policy. This led to lower volatility globally and a decline in market trading volumes. Amid this environment, Retail and Asset Management both reported higher revenue
Slide 4: Highlights
Highlights (billions of yen, except EPS and ROE) FY2014/15 FY2013/14 FY2013/14 1a 4Q QoQ 10 YoY Net revenue 370.8 389.9 5% 431.3 14% Non-interest expenses 319.2 301.4 46% 318.1 40.3% Income before income taxes 51.7 88.6 42% 113.2 -54% Net income 19.9 61.3 68% 65.9 -70% a EPS? Y5.26 Y16.02 67% Y17.24
Slide 5: Business segment results
Page four gives an overview of business segment results and shows where the items I have just mentioned are included, which you can confirm later. 4
Slide 6: Retail
I will now give you an overview of performance in each business. Please turn to page five for Retail. Although sales of stocks slowed due to a decline in market volumes, sales of investment trusts rebounded during the quarter. As a result, net revenue increased 9 percent quarter on quarter to 106.9
Slide 7: Retail client-focused transformation
As shown on the bottom left of page six, net inflows into investment trusts and discretionary investments have been trending up each month and sales of insurance products have increased significantly, as you can see on the bottom right. This demonstrates that we are starting to see tangible results
Slide 8: Asset Management
Please turn to page seven for Asset Management. Net revenue was 23.3 billion yen driven by an increase in assets under management and dividend income. This represents the best revenue quarter since September 2007. ING Securities Investment & Trust, the Taiwanese firm we consolidated from this quarte
Slide 9: Asset Management net inflows and AUM
Please turn to page eight. The graph on the bottom left shows that net inflows into the investment trust business excluding ETFs totaled 496 billion yen. As you can see on the right, assets under management in Fund Wrap and SMA discretionary investments, an area Retail is focusing on, rose sharply i
Slide 10: Wholesale overview
Please turn to page nine for an overview of Wholesale. Net revenue declined 5 percent quarter on quarter to 188.9 billion yen. Investment Banking revenues slowed from last quarter due to seasonal factors, while Global Markets capitalized on revenue opportunities to deliver solid revenues in line wit
Slide 11: Wholesale: Global Markets
Please turn to page 10 for an overview of each Wholesale business line. First, Global Markets. Fixed Income net revenue inched down 3 percent quarter on quarter to 104.5 billion yen as Credit and Securitized Products offset a slowdown in Rates. This represents a solid performance compared to our pee
Slide 12: Wholesale: Investment Banking
Please turn to page 11 for Investment Banking. Net revenue in Investment Banking declined 30 percent over the previous quarter to 22.3 billion yen. Gross revenue was 43.2 billion yen. Investment Banking first quarter revenues were at the second highest level in five years, despite declining from las
Slide 13: Non-interest expenses
Please turn to page 12 for an overview of expenses. Group non-interest expenses increased 6 percent to 319.2 billion yen as compensation and benefits rose due to the 18 billion yen in FCR related expenses and a rise in bonus provisions in line with performance. All other expenses declined quarter on
Slide 14: Robust financial position
Please turn to page 13 for a snapshot of our balance sheet. Total assets were 43.9 trillion yen. Gross leverage was 17.8 times and net leverage was 11.3 times. Our Basel 3 Tier 1 and Tier 1 Common ratios were both 13 percent, representing a slight decline from 13.2 percent at the end of March. This
Slide 15: Funding and liquidity; closing remarks
On page 14, you will see that there are no significant changes to our funding and liquidity from the end of March so I will leave you to look at that later. <Closing remarks> To sum up, we gained traction in the first quarter as we started to see the results of the transformation of our Retail busin
Slide 16: Financial Supplement
Financial Supplement
Slide 17: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits Liabilities Short-term borrowings Total loans and receivables Total payables and deposits Total collateralized financing Total collateralized agreements Trading liabilities Other liabilities Total trading assets’ and private equity investments Lo
Slide 18: Value at risk
Definition = From April 1, 2014 to June 30, 2014 (billions of yen) — 99% confidence level — Maximum: 9.3 — 1-day time horizon for outstanding portfolio — Minimum: 4.7 — Inter-product price fluctuations considered — Average: 67 (billions of yen) Equity Interest rate 5.0 3.9 5.4 5.1 6.6 3.9 5.2 Foreig
Slide 19: Consolidated financial highlights
4% 2% Full year Quarter (billions of yen) (billions of yen) 12% 11.3% 280 213.6 100 li Net income attributable 200 ox 8 o% 35% 8.9% to NHI 65.9 61 shareholders 150 60 5 107.2 6x 48.3 > ROE(%) 38.1 40 a 2% 50 ae) 0 0% Net revenue 1,813.6 1,557.1 431.3 356.4 379.4 389.9 370.8 Income before income taxe
Slide 20: Consolidated income
(billions of yen) Full year Quarter Revenue Commissions 359.1 474.6 157.6 105.6 121.4 89.9 96.3 Fees from investment banking 62.4 91.3 25.4 23.0 15.8 27.2 19.8 Asset management and portfolio senice fees 141.0 167.2 42.4 40.7 424 42.1 45.4 Net gain on trading 368.0 476.4 128.4 110.2 108.5 129.2 158.6
Slide 21: Main revenue items
Full year Quarter Stock brokerage commissions (retail) 51.8 126.7 42.5 25.4 36.3 22.6 15.8 Stock brokerage commissions (other) 112.9 139.8 37.7 31.6 34.9 35.6 34.3 Other brokerage commissions 11.7 18.1 5.3 42 44 43 3.8 Commissions for distribution of investment trusts 150.1 157.8 63.9 37.0 37.7 19.3
Slide 22: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes telions of yen) ead ate) | CN | || Retail 100.6 192.0 81.1 40.0 477 23.3 31.6 Asset Management 21.2 27.1 67 6.2 8.9 5.3 8.3 Wholesale 117 111.8 25.2 25.3 27.8 33.5 5.7 Three Business segments total 193.5 330.9
Slide 23: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) (billions of yen) 40 40 34.2 20.0 20 20 6.6 2.6 ° = = om a HH @ 7 7.0 -20 -20 Net gain (loss) related to economic . ing transactions 1.0 17.4 74 1.7 5.2 6.5 6.9 Realized gain(loss) on investments in equity securities held for ing
Slide 24: Retail results
Full year Quarter (billions of yen) er ee ee aa ee 100 2Q QA 1 Commissions 2259 301.7 110.3 66.5 78.3 46.5 56.1 20.5% — -49.2% Sales credit 80.9 106.1 29.7 24.3 28.7 26.4 25.0 5.3% 15.6% Fees from investment banking and other 36.8 40.3 98 13.4 8.0 4 4 0.7% 7.7% Investment trust administration fees a
Slide 25: Stock brokerage and investment trust commissions
Stock brokerage commissions and commissions for distribution of investment trusts Stock brokerage commissions = Commissions for distribution of investment trusts Stock brokerage commissions (billions of yen) 180 150 120 90 60 30 Full year Quarter 60 50 40 30 20 10 oO 51.8 126.7 0 (billions of yen) 4
Slide 26: Retail client assets
Retail client assets Other Overseas mutual funds 80 ™Bond investment trusts ™ Stock investment trusts Domestic bonds "Foreign currency bonds 29 Equities Equities (trillions of yen) 100 60 40 Foreign currency bonds Domestic bonds Stock investment trusts Bond investment trusts Overseas mutual funds Ot
Slide 27: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter (billions of yen) (billions of yen) 1,500 1,000 805 1,076 1,000 500, ot 473 145 500 0 | 385 -366 i) -500 (1) Cash and secunties inflows minus outflows, excluding regional financial institutions. 26 26
Slide 28: Number of accounts
Number of accounts (movsands) _Fy2oiai3 Fyzois4 —FR0ISA FY 2014/15 a a ee Accounts with balance 5,025 5,144 5,069 5,090 5,104 5,144 5,186 Equity holding accounts 2,717 2,718 2,727 2,722 2,674 2,718 2,721 Nomura Home Trade / Net & Call accounts 3,747 4,012 3,822 3,881 3,939 4,012 4,053 dual accounts
Slide 29: Asset Management results
(billions of yen) re ie a [pee rv a 68.9 Net revenue 18.6 21.2 20.5 23.3 14.0% 15.7% Non-interest expenses 47.8 53.4 13.5 12.5 12.3 15.1 15.1 0.5% 11.7% Income before income taxes. 21.2 27.1 67 62 89 5.3 8.3 55.6% 23.7% Total assets under management (trillions of yen) 40.3 38.2 40.6 40.0 =AM , 30.0
Slide 30: Assets under management by business
Assets under management (gross) by business* Asset inflows/outflows by business? Full year Quarter (trillions of yen) FviZngFYigt4 = FYNSNG FYE is og — Fyz01s/14 2014/15 / Mar Mar dun Sep Dee | Mar un! mm G8 998 En Ee Investment trust 265 284 264 268 294 284 29,6 — investmenttusts 1099 1698 844.410
Slide 31: Wholesale results
Wholesale (billions of yen) ee ee ee, az 100 QQ 1 Net revenue 644.9 765.1 194.6 183.3 188.7 198.5 188.9 Non-interest expenses 573.2 653.3 169.4 158.1 160.9 165.0 183.1 11.0% 8.1% Income before income taxes 71.7 111.8 25.2 25.3 27.8 33.5 5.7 82.8% 77.3% Breakdown of Wholesale revenues (billions of ye
Slide 32: Private equity related investments
Private equity related investments billions of yen) ( Hons of y ) Tera Firma 104.6 107.0 102.1 mAsia 100 Europe (excluding Terra Firms) (excluding 57.2 61.2 57.2 58.8 Japan 50 i 0 Japan 52.7 81 52.5 51.7 10.5 81 10.8 Europe (excluding Terra Firma) 218 22.6 22.9 22.9 23.9 22.6 21.8 Asia 2.0 19 19 18
Slide 33: Number of employees
Japan (excluding FA) 14,123 14,149 14,654 14,454 14,308 14,149 14,559 Japan (FA) 1,907 1,888 1,911 1,923 1,918 1,888 1,889 Europe 3,618 3,461 3,485 3,459 3,456 3,461 3,481 Americas 2,271 2,281 2,240 2,243 2,248 2,281 2,335 Asia-Pacific’ 2 6,037 5,891 5,961 5,945 5,902 5,891 6,656 Total 27,956 27,670
Slide 34: Disclaimer
y\V 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. Of
Slide 35: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com