Slide 1: Financial Results of 3Q of Fiscal Year Ending March 31, 2011
January 26, 2011 Financial Results of 3Q 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 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 2. Business Strategies 1. Financial Overview (1) Short-term Strategy: Cost Reduction after the Merger ･･･ p.21 (1) Major Business Activities for 3Q ･･･ p.5 (2) Mid-term S
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 ◆ Trends of major revenue sources - Income in October went down due to severe market condition continued from 2Q and temporary marketing cost targeting FX trading investors, but since November the market turned up, seminars and webinars incited investo
Slide 7: Financial Overview
Financial Overview ■Financial Overview of 3Q (Oct.- Dec.) of FYE Mar. 31, 2011 Stock trading value recovering and net operating revenues slightly increased, but incomes decreased from 2Q due to temporary marketing cost Net operating revenues 4,949 million yen 2.1% from 2Q of FYE Mar. 31, 2011 ・ Bro
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, 2011 ■Comparison with 3Q(Apr.-Dec.) of FYE Mar.31, 2010 ◆ Increased due to increase in FX trading values and ◆ Increase according to stock trading values but decrease improvement of Financial Income by lo
Slide 9: Highlights of Revenue (2) Revenue Trends and Structure
Highlights of Revenue (2) Revenue Trends and Structure ■Net operating revenues and operating income ■Revenue structure and dependency on brokerage ◆Revenue and asset in custody 3Q(Apr.-Dec.) of FYE Mar. Net operating revenues (left） Million yen Operating income （left） Billion yen 31, 2011 Investment
Slide 10: Highlights of SG&A (1) Increasing Factors
Highlights of SG&A (1) Increasing Factors ■Comparison with 2Q of FYE Mar. 31, 2011 ■ Comparison with 3Q(Apr.-Dec.) of FYE Mar.31, 2010 ◆ Slightly increased due to costs resulting from marketing ◆Systems related costs and compensation and benefits strategy increased due to the merger Increased by 171
Slide 11: Highlights of SG&A (2) Cost Structure and Trends
Highlights of SG&A (2) Cost Structure and Trends ■Cost Structure (Apr. 2010 - Dec. 2010) ■ SG&A Quarterly trends Million yen Strategically controllable costs Fixed costs and costs Commission to correlated to the stock exchange number of accounts etc. Advertisement costs Commissions paid and 5％ assoc
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) [Segregated cash trust] [Cash margin from customers Property/equipment 0.7（Facilities, equi
Slide 13: Financial Summary: 2Q vs. 3Q of FYE Mar. 31, 2011
Financial Summary : 2Q of FYE Mar. 31, 2011 vs. 3Q of FYE Mar. 31, 2011 (in 3 months) （in million yen, ％） 2Q of FYE Mar. 31, 2011 3Q of FYE Mar. 31, 2011 Change (Jul. 2010 – Sep. 2010） (Oct. 2010 – Dec. 2010） Operating Revenues 5,277 5,816 10.2％ Net Operating Revenues 4,846 4,949 2.1％ SG&A 4,137 4,3
Slide 14: Financial Summary: 3Q FYE Mar. 2010 vs. 3Q FYE Mar. 2011
Financial Summary : 3Q of FYE Mar. 31, 2010 vs. 3Q of FYE Mar. 31, 2011 (in 9 months) （in million yen, ％） 3Q of FYE Mar. 31, 2010 3Q of FYE Mar. 31, 2011 Change (Apr. 2009-Dec. 2009) (Apr. 2010-Dec. 2010) Operating Revenues 16,698 18,502 10.8% Net Operating Revenues 14,572 16,228 11.4% SG&A 10,587 1
Slide 15: Financial Summary: Quarterly trends in income statement
Financial Summary：Quarterly trends in income statement （in million yen） FYE Mar.31, 2009 FYE Mar. 31, 2010 FYE Mar. 31, 2011 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Brokerage commissions( includes OSE-FX) 3,505 2,612 2,911 2,342 3,145 2,670 2,073 2,604 2,772 1,904 2,089 Stocks and ETFs 3,441 2,527 2,816 2,
Slide 16: Financial Summary: Quarterly trends in SG&A
Financial Summary：Quarterly trends in SG&A （in million yen） FYE Mar.31, 2009 FYE Mar. 31, 2010 FYE Mar. 31, 2011 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Transaction-related expenses 1,182 1,172 1,188 1,095 979 1,044 948 1,247 1,267 1,118 1,260 Commissions paid 238 214 240 190 196 263 181 194 246 217 220 Ex
Slide 17: Comparison Analysis: Revenue/SG&A per Customers' Assets in Custody
Comparison Analysis : Revenue/SG&A per Customers’ Assets in Custody Matsui (Consolidated） Mitsui Sumitomo FG （Annualized） 1H of FYE Mar. 2011 (Consolidated） 2.0% 1H of FYE Mar. 2011 ◆ Net operating revenues as well as SG&A increased compared with the previous quarter. Both SG&A per customers’ assets
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 26, 2011） [ Financial products and services for individual investors ] [ Overseas subsidiary and office ] Securities Company FX Business Overseas Businesses Monex International Limited Asia business base in Hong Kong （Investment Ratio) Monex G: 100% Mon
Slide 21: Roadmap
Roadmap ■ 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 Moved up overseas revenue contribution by business development in Hong Kong Strategies for future growth （Achievements） Short-term: - Expan
Slide 22: Short-term Strategy: Cost Reduction, re-examination of commission and segment marketing
Short-term Strategy: Cost Reduction, re-examination of commission and segment marketing ■Measures toward further cost reduction (SG&A) 1.95 10.8% 0.5 billion yen decrease （in billion yen） ◆ Compared with Oct. 2010(JPY1.46billion) JPY90million is supposed to reduce by cutting 22.6% 1.45 1.48 1.37 1.4
Slide 23: Mid-term Strategy: Achievement and plans for Overseas Business Development
Mid-term Strategy: Achievement and plans for Overseas Business Development ■ Acquired BOOM in HK, Asia’s global financial center ■ Activities in Mainland China ◆Beijing Representative Office of Monex, Inc. - Connection to China Authorities including China Securities Regulatory Commission and the Sec
Slide 24: Financial statement and operating results of Boom Group
Financial statement and operating results of Boom Group ■Boom Group consolidated balance sheet ■Boom Group consolidated P/L Statement (Jan. 2010- Dec.2010, in thousand HKD) (As of Dec. 31, 2010, in thousand HKD) Operating revenue Assets Liabilities Current assets Current liabilities Commission recei
Slide 25: Mid/Long-term Strategy: Intelligence Infrastructure
Mid/Long-term Strategy: Intelligence Infrastructure ■Account aggregation service ”MONEX ONE” ■Market visualizer “MONEX Industry Map for iPad” released on Jun. 17, 2011 released on Nov. 19, 2010 Function： Function：Graphical map of the whole market 1) To collectively manage external and market prices/
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 ■3Q of FYE Mar. 31, 2011 （9 months： from Apr. 2010 to Dec. 2010） （in million yen） Business category Revenue from “stock” Revenue from “flow” Total % Refer to Net financial income Cash trading commissions 3,422 Equities 3,420 Margin trading commissions 2,498 9,496
Slide 28: Change of profit structure
Change of profit structure ■Change of profit structure by Business category （Net Operating Revenues） 100% 3% 2% 2% 2% 3% Others 90% 17% 19% 17% 23% 21% 80% 3% 2％ 6% Net f inancial income 3% 6% 1％ 3% 1％ 6% 70% 6% 4% 6% 1％ 1％ 1% 2% 3% Agency commissions, management f ee, etc. 8% 19% 60% 1% 13% 1% 25%
Slide 29: Equity Business
Equity Business ■Stock ■ Stock lending service ◆Aim to increase margin balance ◆New function to introduce new users -Margin balance recovered as market recovered -Number of accounts constantly growing -Increased the size of the initial position limit from JPY 100 -“Dividend automatic sweep function”
Slide 30: Derivative Business
Derivative Business ■Futures/Options ■Plans to expand futures/options trading ◆Recovering market share ◆Actions for obtaining new accounts of futures/options Recovering market shares through promoting lowest trading -Carried out a fee cash back campaign to new customers of fee in the industry and im
Slide 31: FX Business: Positioning as a Priority Growth Area
FX Business: Positioning as a Priority Growth Area ■ Continuing to grow trading profit rapidly ■ Monex, Inc. Revenue (million yen) Trading volume (billion yen) ◆ OTC “FX PLUS” Trading volume in Nov 2010 became second-largest level since 2010 May. Released an advance trading tool “Monex Joo” in Dec.
Slide 32: Mutual Fund Business
Mutual Fund Business ■Strengthen product lines and services to expand mutual fund asset ■Top-class online mutual fund sales ◆Sales recovering (Oct.-Dec. 2010) ◆Keeping top-class position in online mutual fund sales （billion yen （billion yen/ - Sales: 17.3 billion yen (20.7% up from 2Q 2010) /assets）
Slide 33: Alternative Investment Business
Alternative Investment Business ■ Big leap for top alternative investment manager ■Pension mandates thru Mizuho exceed ¥ 5.5 B ◆ Exceptional track records as a FOF manager in Japan ・ MAI has commenced global FOF investment service for pension funds through Mizuho Trust Bank since April 2010. ◆ Merge
Slide 34: Fixed Income Business / R&D / Investment Banking Business
Fixed Income Business / R&D / Investment Banking Business ■Fixed Income Business ■Investment Banking Business ◆Expansion of products & services to meet investor needs ◆IPO underwriting, financing and IR support service To satisfy the investor’s needs, which are becoming more ・Participated in 2 IPOs
Slide 35: Customer Distribution of Monex, Inc.
Customer Distribution of Monex, Inc. (1,202,760 accounts as of the end of Dec, 2010) ■ Sex ■ District Others Female Tokyo Metropolitan District Nagoya District Male Osaka District ■ Age ■ Occupation 34
Slide 36: 4. To our Shareholders
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 35
Slide 37: 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 Sep. 2010: dividends based on the business p