Monex Group, Inc. · TSE:8698
Monex — Q1 FY2013 Earnings Presentation
41 slides from Monex's earnings presentation, Jul 25, 2012
Slide 1: Financial Results of 1Q of Fiscal Year Ending March 31, 2013
July 25, 2012 Financial Results of 1Q of Fiscal Year Ending March 31, 2013 This is an English translation of Japanese presentation material prepared in connection with the disclosure of the financial results of Monex Group, Inc. It includes information derived from the consolidated financial stateme
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 "MONEX" stands for the future of finance, one step advanced from "MONEY" The Monex Group is aspiring to empower traders and investors worldwide with best of breed technology, education, service and financial professionalism to provide access to top financial markets globally.
Slide 4: Table of Contents
Table of Contents Important Matters Concerning Product-related Risks ･･･ p.1 III. Global Vision and Strategies Our Business Principles ･･･ p.2 1. Background for the Global Vision ･･･ p.18 2. Concept of Shared Platform under the Global Vision ･･･ p.19 I. Key Strategy Overview 3. Current Condition and
Slide 5: 1. Key Strategy Overview
1. Key Strategy Overview 2. Financial Results 3. Global Vision and Strategies 4. Data 4
Slide 6: Strategies for Future Growth
Strategies for Future Growth ◆ Developing a global platform in-house in order to establish a competitive business base and control cost ◆ Focus on promoting 4 strategies; Japan, U.S., China and Global FX, and controlling fixed costs. Additionally explore BtoB business Explore BtoB Business possibili
Slide 7: 2. Financial Results
1. Key Strategy Overview 2. Financial Results 3. Global Vision and Strategies 4. Data 6
Slide 8: Major Business Activities this Quarter
Major Business Activities this Quarter ◆Implementation of Roadmap to generate synergy effect through utilizing TradeStation technologies within the group Promoted system development for introducing the technology to Japan based on the roadmap (mid/long term plan) announced in April 2012 (Detailed af
Slide 9: Financial Summary: 4Q FYE Mar. 2012 vs. 1Q FYE Mar. 2013 (3 months)
Financial Summary : 4Q of FYE Mar. 31, 2012 vs. 1Q of FYE Mar. 31, 2013 (in 3 months) （in million yen, %） 4Q of FYE Mar. 31, 2012 1Q of FYE Mar. 31, 2013 Change (Jan. 2012– Mar. 2012） (Apr. 2012– Jun. 2012） Operating Revenues 8,905 8,829 -0.8% Net Operating Revenues 8,345 7,740 -7.2% SG&A 7,822 7,63
Slide 10: Major Factors of Revenue and SG&A (Comparison with Previous Quarter)
Major Factors of Revenue and SG&A (Comparison with Previous Quarter) ■Revenue：Comparison with 4Q of FYE Mar. 31, 2012 ■SG&A：Comparison with 4Q of FYE Mar. 31, 2012 ◆Commission decreased due to the sluggish market ◆Cost decreased due to various measures of cost reduction condition in Japan Decreased
Slide 11: Financial Summary: 1Q FYE Mar. 2012 vs. 1Q FYE Mar. 2013
Financial Summary : 1Q of FYE Mar. 31, 2012 vs. 1Q of FYE Mar. 31, 2013 (in 3 months) （in million yen, %） 1Q of FYE Mar. 31, 2012 1Q of FYE Mar. 31, 2013 Change (Apr. 2011– Jun. 2011） (Apr. 2012– Jun. 2012） Operating Revenues 6,057 8,829 45.8% Net Operating Revenues 5,080 7,740 52.4% SG&A 4,350 7,63
Slide 12: Major Factors of Revenue and SG&A (Comparison with 1Q of Last Fiscal Year)
Major Factors of Revenue and SG&A (Comparison with 1Q of Last Fiscal Year) ■ Revenue：Comparison with 1Q of FYE Mar. 31, 2012 ■ SG&A：Comparison with 1Q of FYE Mar. 31, 2012 ◆ Increased due to the consolidation of TradeStation ◆ Increased due to the consolidation of TradeStation Increased by 3,280 mil
Slide 13: Balance Sheet (1)
Balance Sheet (1) ■ Keeping sufficient equity, liquidity and financing capability ◆Balance Sheet as of end of June 2012 (*1) Non-current assets（investment value of risk assets） Property/equipment 1.2 (Facilities, equipment, etc) Current Asset Current Liabilities Software 3.8 (Assets to provide servi
Slide 14: Balance Sheet (2)
Balance Sheet (2) ■Goodwill/Intangible Asset ■ Investment securities （in billion yen） Goodwill Identifiable Software Remaining Name of securities Acquisition Book Estimated Appraisal intangible years (Purpose for acquisition） cost value Value(*3) profit As of June 2012 (JPY bn) asset(JPY bn) (JPY bn
Slide 15: Distribution of Consolidated Net Operating Revenues by Regions and Businesses
Distribution of Consolidated Net Operating Revenues by Regions and Businesses ■ 1Q FYE March 31, 2013 (3 months) Financial Income Others FX business strengthened by acquiring IBFX 3% 3% FX Equities 7% Options 2% 20 % China (HK) Futures and Options Futures 1% US+EU+AU 2% 11 % 35 % FX Japan Equities 6
Slide 16: Distribution of Consolidated SG&A by Regions and Contents
Distribution of Consolidated SG&A by Regions and Contents ■1Q FYE March 31, 2013 (3 months) Most of the system development is outsourced in Japan and the amount of the systems related costs is large. Others 7% Systems Commissions paid related costs 10 % Advertising expenses 23 % China (inc. HK) 4% 2
Slide 17: Distribution of Consolidated Personnel by Regions and Jobs
Distribution of Consolidated Personnel by Regions and Jobs ■As of the end of June 2012 System development is mostly outsourced in Japan and the number of (Total number of employees: 892) technology related employees is small. Technology IBFX 5% 11 % Marketing 13 % Others 4% China 8% Japan (inc.HK) O
Slide 18: 3. Global Vision and Strategies
1. Key Strategy Overview 2. Financial Results 3. Global Vision and Strategies 4. Data 17
Slide 19: Background for the Global Vision
Background for the Global Vision ■Coping with local market bias issue Japan clients China Japan U.S. clients clients clients Idling Idling Trade Volume Trade Volume Capacity Capacity Idling Idling capacity capacity China Japan U.S. China Japan U.S. products products products products products produc
Slide 20: Concept of Shared Platform under the Global Vision
Concept of Shared Platform under the Global Vision ■Global Platform China clients Japan clients U.S. clients Website Website Website Call center Call center Call center Marketing Marketing Marketing Develop locally Compliance Compliance Compliance Information service Information service Information
Slide 21: Current Condition and Future Plan
Current Condition and Future Plan (Current condition) Revenue side: － World wide stagnant market affects commission revenues from each local business base of the Group － Under the above circumstances, Japan segment recognized financial income and U.S. segment added revenue by acquiring IBFX (Nov. 20
Slide 22: Roadmap (1)
Roadmap (1) ■Measures to integrate systems and control cost FYE March 2013 FYE March 2014 FYE March 2015 FYE Mar. 2016 Introduce MT4 to Introduce TradeStation Reduce Trading Global FX Monex FX and Monex, platform to Monex FX system platform and Monex, Inc. related cost Inc. Liquidity/risk Integrate
Slide 23: Roadmap (2)
Roadmap (2) ■ Measures to increase revenue Expand customer asset Win competitors’ clients - Establish brand image as a “Global & leading online financial company” General - Provide innovative financial services using in-house developed technology Construct competitive business platform / Create dema
Slide 24: Roadmap (3)
Roadmap (3) ■Products and services being developed for Japanese clients [Monex, Inc. / Monex FX] ◆ Preparing MT4 trading platform to be introduced in 3Q, a overwhelmingly supported tool among FX traders worldwide ・ Plan to offer 27 currency pairs, both for individual and corporate customers, and ena
Slide 25: Global FX: Accelerating Global Expansion by IBFX
Global FX：Accelerating Global Expansion by IBFX ■Leverage group synergy to expand globally Monex, Inc. IBFX, Inc. Monex FX (renamed from TradeStation Forex) - Initiating current FX business since April 2011, - Started as one of the first TradeStation Forex merged IBFX in Dec. 2011 and FX providers i
Slide 26: Global FX: Local Activities
Global FX: Local Activities ■Japan (Monex, Inc. and Monex FX) ■U.S. and Australia (IBFX, Inc.) ◆Decrease trading volume due to low volatility ◆ Global FX business to be expanded under IBFX brand Revenue (million yen) Trading volume (billion yen) Revenue (thousand dollar) Trading volume (billion doll
Slide 27: Japan: Equity Business
Japan: Equity Business ■ Breakdown of DARTs and correlation with market ■Equity business (Monex, Inc.) trading value (Japan) ◆ Market share and value of equity trading Total trading value of individual investors in 3 major stock exchanges （Average per business day）（right） Others DARTs(left) (thousan
Slide 28: Japan: Mutual Fund Business / Alternative Investment Business
Japan: Mutual Fund Business / Alternative Investment Business ■Mutual Fund Business (Monex, Inc.) ■ Alternative Investment Business (MAI) ◆ Trends in mutual fund sales and balance (billion yen) FYE Mar. FYE March 2011 FYE March 2012 2013 ◆ Announced to become a 100% subsidiary of ASTMAX 1Ｑ 2Ｑ 3Ｑ 4Ｑ
Slide 29: Japan: Business Alliance with Sony Bank
Japan: Business Alliance with Sony Bank ■Strengthen business alliances to enhance brokerage business (Announced on July 17, 2012) ◆Acquisition of Sony Bank Securities and merger into ◆Impact on business performance of Monex Group Monex, Inc. ・Booking of negative goodwill of 900 to 1,000 million yen
Slide 30: U.S.: About TradeStation
U.S.: About TradeStation ■Overview ■Management Benchmark ◆ Comparison of DARTs(*1) among US listed brokerages 400 350 -Based on their disclosure Apr.-Jun. 2012 ◆ Company Overview 300 250 • Formed in 1982 as a trading platform provider. Initial Public Monex, Inc. Offering in 1997 (listed on the NASDA
Slide 31: U.S.: About TradeStation and US Business Progress
U.S.: About TradeStation and US Business Progress ■Characteristics of TradeStation ■U.S. business progress ◆ TradeStation® (trading platform) ◆ New accounts growth remained steady TradeStation® is an award winning direct-access trading TradeStation (including IBFX) had 7,106 new accounts platform wh
Slide 32: China
China ■ Business in HK, Asia’s global financial center ■Business development in Mainland China ◆Targeting ultimately to initiate online brokerage business in Mainland China for retail investors, several ◆ Monex Boom Group Overview business possibilities are being discussed and Monex Boom Group offer
Slide 33: 4. Data
1. Key Strategy Overview 2. Financial Results 3. Global Vision and Strategies 4. Data 32
Slide 34: Breakdown of Global DARTs and Global FX Volume by Region
Breakdown of Global DARTs and Global FX Volume by Region ■Global. DARTs: 1Q of FYE March 2013 (DARTs of Apr. – Jun. 2012) DARTs=Daily Average Revenue Trades (Equities, Options and Futures, FX and Mutual Funds) Monex, Inc. TradeStation Monex BOOM Monex FX, Inc. (U.S., etc.) Total: Global DARTs (China
Slide 35: Quarterly Breakdown of Consolidated Income Statement
Financial Results：Quarterly Breakdown of Consolidated Income Statement （in million yen） FYE Mar. FYE Mar. 31, 2011 FYE Mar. 31, 2012 31, 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Brokerage commissions (includes OSE-FX) 2,772 1,904 2,089 3,336 2,120 3,941 3,387 3,675 3,128 Stocks and ETFs 2,582 1,631 1,855 3,0
Slide 36: Quarterly Breakdown of Consolidated SG&A
Financial Results：Quarterly Breakdown of Consolidated SG&A （in million yen） FYE Mar. FYE Mar. 31, 2011 FYE Mar. 31, 2012 31, 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Transaction-related expenses 1,267 1,118 1,260 1,360 1,224 2,439 2,521 2,679 2,625 Commissions paid 246 217 220 237 238 1,038 1,034 933 958 Exc
Slide 37: Quarterly Breakdown by Local Segments (Income Statement)
Financial Results：Quarterly Breakdown by Local Segments (Income Statement) （in million yen） FYE Mar. 2012 FYE Mar. 2013 2Q 3Q 4Q 1Q Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Brokerage commissions 2,150 1,710 80 1,865 1,464 57 2,317 1,292 64 1,746 1,339 48 Stocks and ETFs 1,855
Slide 38: Quarterly Breakdown by Local Segments (SG&A)
Financial Results：Quarterly Breakdown by Local Segments (SG&A) （in million yen） FYE Mar. 2012 FYE Mar. 2013 2Q 3Q 4Q 1Q Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Transaction-related expenses 1,187 1,222 30 1,140 1,357 23 1,302 1,350 28 1,213 1,396 26 Commissions paid 229 792 15
Slide 39: Corporate Governance
Corporate Governance ■Board of Directors and Management Team to Enforce Mid-Long Term Strategy ◆ Board of Directors from June 2012: 5 external (4 independent) directors out of 9 ◆Board of Auditors: 2 external and independent out of 4 Takeshi Tamaki Full time, external & independent member Oki Matsum
Slide 40: Investors' Guide
Investors’ Guide ■Pursuing investment returns for our shareholders ◆ Basic policy for shareholder’s return Major shareholders and share distribution - Reserving necessary capital as a growing company, the - Total number of issued shares as of the end of March 2012: Company aims to provide return t
Slide 41: The Monex Group
The Monex Group Holding Company （As of July 25, 2012） [ China ] [ Japan ] [ US/EU ] Online Securities Company R&D of Program Trading Monex International Limited Asia business base in Hong Kong Trade Science Corporation Next generation asset management utilizing artificial intelligence TradeStation G