Monex Group, Inc. · TSE:8698
Monex — Q1 FY2011 Earnings Presentation
36 slides from Monex's earnings presentation, Jul 27, 2010
Slide 1: Financial Results of 1Q of Fiscal Year Ending March 31, 2011
July 27, 2010 Financial Results of 1Q of Fiscal Year Ending March 31, 2011 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 disc
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 4Q ･･･ p.5 (1) Short-term Strategy (2) Financial Overview of 1Q, FYE Mar. 31, 2011 ･･･ 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 First Quarter
Major Business Activities for the First Quarter ◆ Completed the merger of ORIX Securities - Successfully integrated system, business and organization of Monex, Inc. and ORIX Sec. as of May 1, 2010 - Temporary costs in 1Q concerning the merger: JPY0.29B as SG&A, and JPY1.12B as extraordinary loss - C
Slide 7: Financial Overview
Financial Overview ■Financial Overview of 1Q(Apr.- Jun.) of FYE Mar. 31, 2011 As FX trading values increased extremely and cost reduction efforts went well after the merger, ordinary income increased by 339.8% Net operating revenues 6,432 million yen +20.2% from 4Q of FYE Mar. 31, 2010 ・Brokerage c
Slide 8: Highlights of Revenue (1) Increasing and Decreasing Factors
Highlights of Revenue (1) Increasing and Decreasing Factors ■Comparison with 4Q of FYE Mar. 31, 2010 ■Comparison with 1Q of FYE Mar.31, 2010 ◆ Increased due to increase in FX trading values and ◆ Increased due to increase in FX trading values and improvement of financial income improvement of financ
Slide 9: Highlights of Revenue (2) Revenue Trends and Structure
Highlights of Revenue (2) Revenue Trends and Structure ■Net operating revenue and operating income ■Revenue structure and dependency on brokerage Million yen 100 Million yen ◆Revenue and asset in custody （1Q of FYE Mar. 31, 2011） 1 0 ,000 Net operating revenue (left） 8 , 000 Operating income （left）
Slide 10: Highlights of SG&A (1) Decreasing and Increasing Factors
Highlights of SG&A (1) Decreasing and Increasing Factors ■Comparison with 4Q of FYE Mar. 31, 2010 ■ Comparison with 1Q of FYE Mar.31, 2010 ◆Remained flat by cost reduction efforts ◆Systems related costs and compensation and benefits （Note that SG&A of Ex-ORIX Sec. is included from February to April
Slide 11: Highlights of SG&A (2) Cost Structure and Trends
Highlights of SG&A (2) Cost Structure and Trends ■Cost Structure (Apr. 2010 - Jun. 2010) ■ SG&A Quarterly trends Million yen Strategically 4,873 4,891 controllable costs Fixed costs and costs 5,000 Commission to correlated to the stock exchange 3,554 3,585 number of accounts 4,000 3,447 etc. Adverti
Slide 12: Balance Sheet
Balance Sheet ■Maintain financial strength by keeping availability of funds and liquidity and controlling risk assets (*3) Non-current assets（investment value of risk assets） (in billion yen) (in billion yen) Property/equipment 0.5（Facilities, equipment, etc） [Segregated cash trust] [Cash margin fro
Slide 13: Financial Summary: 4Q FYE Mar. 2010 vs. 1Q FYE Mar. 2011
Financial Summary : 4Q of FYE Mar. 31, 2010 vs. 1Q of FYE Mar. 31, 2011 (in 3 months) （in million yen, %） 4Q of FYE Mar. 31, 2010 1Q of FYE Mar. 31, 2011 Change (Jan. 2010 – Mar. 2010） (Apr. 2010 – Jun. 2010） Operating Revenues 5,801 7,407 27.7% Net Operating Revenues 5,349 6,432 20.2% SG&A 4,873 4,
Slide 14: Financial Summary: 1Q FYE Mar. 2010 vs. 1Q FYE Mar. 2011
Financial Summary : 1Q of FYE Mar. 31, 2010 vs. 1Q of FYE Mar. 31, 2011 (in 3 months) （in million yen, %） 1Q of FYE Mar. 31, 2010 1Q of FYE Mar. 31, 2011 Change (Apr. 2009-Jun. 2009) (Apr. 2010-Jun. 2010) Operating Revenues 6,138 7,407 20.7% Net Operating Revenues 5,218 6,432 23.3% SG&A 3,554 4,891
Slide 15: Financial Summary: Quarterly trends in income statement
Financial Summary：Quarterly trends in income statement （in million yen） FYE Mar. FYE Mar.31, 2009 FYE Mar. 31, 2010 31, 2011 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Brokerage commissions 3,505 2,612 2,911 2,342 3,145 2,670 2,073 2,604 2,772 Underwriting and distribution commissions 1 0 1 2 1 3 3 14 1 Subscriptio
Slide 16: Financial Summary: Quarterly trends in SG&A
Financial Summary：Quarterly trends in SG&A （in million yen） FYE Mar. FYE Mar.31, 2009 FYE Mar. 31, 2010 31, 2011 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Transaction-related expenses 1,182 1,172 1,188 1,095 979 1,044 948 1,247 1,267 Commissions paid 238 214 240 190 196 263 181 194 246 Exchange and association due
Slide 17: Comparison Analysis: Revenues/SG&A per Customers' Assets in Custody
Comparison Analysis : Revenues/SG&A per Customers’ Assets in Custody Matsui Mitsui Sumitomo FG （Annualized） ◆ ORIX Securities became a wholly owned subsidiary （Consolidated） (Consolidated） 2.0% since previous quarter. This caused temporal increase FYE Mar. 31, 2010 FYE Mar. 31, 2010 in SG&A and the
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 June 30, 2010） [ Financial products and services for individual investors ] [ Overseas subsidiary and office ] Securities Company FX Business Overseas Businesses Beijing Representative Office (Monex Group) Developing business Monex FX, Inc. opportunities in Chi
Slide 21: 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 Strategies for future growth （Achievements） Short-term: - Expand active trader Short-term: customer segment - Acquired Monex
Slide 22: Short-term Strategy: Marketing Strategy after Merger of Monex, Inc. and ORIX Sec.
Short-term Strategy: Marketing Strategy after Merger of Monex, Inc. and ORIX Sec. ■Upon merger: Maintain ex-ORIX customer base ■Next stage：Increasing market share ◆Maintain and strengthen business base through merger Aim to expand trading shares by fully utilizing the ・Establishment of the Sales Div
Slide 23: Short-term Strategy: Cost Reduction and P/L Impact after the Merger
Short-term Strategy: Cost Reduction and P/L Impact after the Merger ■Monthly Trend of Cost Reduction (SG&A) Merger-related temporary 1.94 1.95 0.5 billion yen decrease costs 9.3% 10.8% （in billion yen） ◆ The total amount of Compensation and Transaction-related expenses benefits and system related co
Slide 24: Mid-term Strategy: Intelligence Infrastructure
Mid-term Strategy: Intelligence Infrastructure ■“Intelligence Infrastructure” ■“MONEX VISION” and “MONEX SIGN” ◆Creating a new value by financial intelligence & IT ◆Technical trading advice tool “MONEX SIGN (Beta 2)” Intelligence Infrastructure (new information platform) Major functions • Advice the
Slide 25: Long-Term Strategy: Overseas Business Development
Long-Term Strategy：Overseas Business Development ■Achievements and future plans for overseas business development ◆ Updates on business development in mainland China - JV in Beijing: BaiFor (百富睿通投資顧問有限会社) - Start of Financial Education (Training) Services Development of system platform for online ed
Slide 26: 3. Businesses
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 25
Slide 27: Breakdown of Net Operating Revenues
Breakdown of Net Operating Revenues ■1Q of FYE Mar. 31, 2011 （3 months： from Apr. 2010 to Jun. 2010） （in million yen） Business Transactional Entity Management Fee Total % Refer to category commission fee 1,155 Monex, Inc. 2,772 Brokerage （Interest income from 3,928 61% p.27 ORIX Securities （Commissi
Slide 28: Equity Business
Equity Business ■Stock：Keeping Customer base of ORIX Sec ■Futures/Options: Aim to increase trading share ◆Keeping customer base of ORIX Sec ◆Increasing trading share by merger ・Keep customer base (Margin purchases, Login users, etc) ・Trading share and volume keeps high level. Largest in Apr. ・Tradin
Slide 29: FX Business
FX Business ■Positioned as a priority growth area ■Breakdown by currency pairs Monex, INC.: FX PLUS Monex FX: GAIKA de SUPPORT Trading volume (billion yen) Order unit Order unit Revenue (million yen) (thousand) （thousand） ORIX FX added 800 3,500 800 3,500 trading revenue from Feb 700 3,000 700 comis
Slide 30: Mutual Fund Business
Mutual Fund Business ■Strengthen product lines and services to expand mutual fund asset ■Top-class online mutual fund sales ◆The sales trend recovering (Apr.-Jun. 2010) ◆Keeping top-class position in online mutual fund sales （billion yen （billion yen/ Total amount of sales: About 25.3 billion yen /a
Slide 31: Alternative Investment Business
Alternative Investment Business ■Efforts of MAI for institutional investors rewarded ■Unprecedented products for retail investors ◆ Product line-ups of alternative FOF for retail investors Fund nickname Portfolio assets AUM ◆ MAI makes breakthrough as the FOF manager in Japan Asia Focus HF of Japan
Slide 32: Fixed Income and Stock Lending Businesses/Investment Banking Business
Fixed Income and Stock Lending Businesses/Investment Banking Business ■Fixed income and stock lending businesses ■Investment Banking Business ◆Fixed income：Provision of various investment vehicle ◆IPO Underwriting Business (Monex, Inc.) such as structured note and issued note - The only participant
Slide 33: R&D by Trade Science Corporation
R&D ■ R&D by Trade Science Corporation (TS) Positioned as an in-house laboratory for information science and financial engineering, TS plans to offer leading-edge financial services and products ◆ R&D of the Algorism-based asset management service - Has hosted an open platform of a trading algorithm
Slide 34: Customer Portfolio of Monex, Inc.
Customer Portfolio of Monex, Inc. (1,316,445 accounts as of the end of Jun, 2010*) ■ Sex ■ District Others Female 23.8% 24.4% Tokyo Metropolitan District Nagoya District 48.7% Male 9.0% 75.6% Osaka District 18.5% ■ Age ■ Occupation Over 70 4.7% Company Employee 45.4% 60s Unemployed 19.1% 12.7% House
Slide 35: 4. To our Shareholders
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 34
Slide 36: Investors' Guide
Investors’ Guide ■Pursuing investment returns for our shareholders ◆Basic policy for shareholder’s return Major shareholders and share distribution - The Company’s policy for shareholder’s return is to pay the Total number of issued shares as of end of Mar. 2010: dividends based on the business per