Nomura Holdings, Inc. · TSE:8604
Nomura — Q3 FY2012/13 Earnings Presentation
39 slides from Nomura's earnings presentation, 2013
Slide 1: Opening Remarks: Atsushi Yoshikawa, President and Group COO
Opening Remarks: Atsushi Yoshikawa, President and Group COO First, I will say a few words before handing over to our CFO Junko Nakagawa to go through the highlights of our third quarter results. After that we will take your questions. Earlier today we announced our third quarter financial results, r
Slide 2: Outline
Outline Presentation NOMURA Financial Supplement Executive summary (p. 3) Overview of results (p. 4) Business segment results (p. 5) Breakdown of income before income taxes and net income (p. 6) Retail (p. 7-8) Asset Management (p. 9-10) Wholesale (p. 11-14) Non-interest expenses (p. 15) Progress of
Slide 3: Q3 Financial Results: Junko Nakagawa, CFO
Q3 Financial Results: Junko Nakagawa, CFO I will now give you an overview of our financial results for the third quarter of the fiscal year ending March 2013. All business divisions reported higher revenues and income in the third quarter driven by favorable market conditions. Net revenue from Retai
Slide 4: Overview of results
Third quarter net revenue declined 3 percent quarter on quarter to 389.1 billion yen. As I said, all of our three business segments reported higher revenues. The factors behind the firm-wide decline in revenues are reflected in the “Other” segment and include a 16 percent drop in revenues at consoli
Slide 5: Business segment results
Next, please turn to page five for our business segment results. Net revenue from our three business segments increased 30 percent from last quarter to 303.4 billion yen. Income before income taxes was 71.9 billion yen, up 4.6 times sequentially to the highest level in three years. A detailed breakd
Slide 6: Breakdown of income before income taxes and net income
Please turn to page six for a breakdown of the factors affecting income before income taxes and net income. As you can see, income before income taxes from our three business segments was robust, increasing by 4.6 times quarter on quarter to 71.9 billion yen. After deducting the 23.2 billion yen los
Slide 7: Retail results
Turning now to business performance, the results for Retail are shown on pages seven and eight. Net revenue increased 18 percent quarter on quarter to 95.7 billion yen and income before income taxes increased 85 percent to 20.3 billion yen. The market turned favorable in December, prompting an incre
Slide 8: Retail: Robust sales of equity-related products on higher risk appetite
Total sales Retail: Robust sales of equity-related products on higher risk appetite NOMURA (billions of yen) 3,000 2,000 1,000 O Net asset inflows’ mStocks mBonds minvestmenttrusts Others Total sales increased 23% QoQ driven by stocks and investment trusts. = Stocks: Significant increase in sales am
Slide 9: Asset Management results
Turning to Asset Management on pages nine and ten, net revenue increased 22 percent to 18.8 billion yen. Income before income taxes was up 60 percent at 7.3 billion yen, marking the strongest quarter since the first quarter of last fiscal year. The improved investment environment and fund inflows le
Slide 10: Asset Management: Strong inflows in investment trusts, higher market
share Assets under management (gross)! by business Asset Management: Strong inflows in investment trusts, higher market NOMURA Nomura Asset Management share of public investment trust market (2) Basedon assets under management (net) (3) _ Source: Nomura, based on data from The Investment Trusts Asso
Slide 11: Wholesale results
Please turn to page 11 for Wholesale. Net revenue in Wholesale increased 38 percent to 189 billion yen. Income before income taxes improved significantly quarter on quarter to 44.4 billion yen. Improved market conditions added to higher revenues in all businesses and across each region of our intern
Slide 12: Fixed Income
First, Fixed Income performance is shown on page 12. Fixed Income net revenue was 110.7 billion yen, up 25 percent sequentially and the strongest quarter since 2009. Steady client revenues coupled with stronger trading revenues meant revenues were well balanced across all regions and products. Reven
Slide 13: Equities
Please turn to page 13 for Equities. Net revenue in Equities increased 47 percent to 47.3 billion yen. Client revenues declined 3 percent quarter on quarter due to a slowdown in activity in Europe and the US. However, Japan reported a stronger quarter as global investors returned to Japanese equitie
Slide 14: Investment Banking
Please turn to page 14 for Investment Banking. Net revenue in Investment Banking rose 89 percent to 30.9 billion yen. “Other” revenue posted a significant gain on the sale of Annington, a private equity investee company, during the third quarter. Investment Banking gross revenue remained roughly unc
Slide 15: Non-interest expenses
Please turn to page 15 for an outline of expenses. Non-interest expenses increased 3 percent from the previous quarter to 376.1 billion yen. Compensation and benefits was up 1 percent due to the increase in revenues, but the run rate is down, reflecting our revised cost base. Despite a decline in co
Slide 16: Progress of cost reduction program
Please turn to page 16. The additional 1 billion dollar cost reductions announced last September are progressing on schedule. We continue to focus on reducing both personnel and non-personnel expenses as we aim to complete 78 percent of the reductions by the end of March. At the end of December, we
Slide 17: Robust financial position
Please turn to page 17 for an overview of our balance sheet. Total assets were 38.6 trillion yen, gross leverage was 17.8 times, and net leverage was 11.6 times. At the end of December our Tier 1 ratio was 16.9 percent and our Tier 1 common ratio was 14.9 percent. Both ratios improved significantly
Slide 18: Funding and liquidity
Page 18 outlines our funding and liquidity. I will leave it for you to look through later, except to say that there are no significant changes from the end of September. 18
Slide 19: Exposure to European peripheral countries
Lastly, on page 19 you can see that our net country exposure to European peripheral countries at the end of December was 2.94 billion dollars, representing a decline of 250 million dollars from our exposure of 3.19 billion dollars at the end of September. Sovereigns account for 70 percent of this ex
Slide 20: Closing Remarks: Atsushi Yoshikawa, President and Group COO
Closing Remarks: Atsushi Yoshikawa, President and Group COO Given the constantly changing competitive and regulatory environments, it’s hard to be optimistic. That said, we are transforming ourselves under the fit for the future plan in order to align the firm with social changes and the needs of ou
Slide 21: Consolidated balance sheet
Consolidated balance sheet (billions of yen) Assets Total cash and cash deposits 1,954 Total loans and receivables 2,211 Total collateralized agreements 13,743) Total trading assets’ and private equity investments Total other assets 3,666 Total assets 35,697 1. Including secunties pledged as collate
Slide 22: Value at risk
Value at risk = Definition 99% confidence level 1-day time horizon for outstanding portfolio — Inter-product price fluctuations considered (billions of yen) From April 1, 2012 to December 31, 2012 (billions of yen) Maximum: Minimum: — Average: 8.7 43 6.2 NOMURA 18 16 1.9 15 1.4 1.2 1.0 24 Equity Int
Slide 23: Consolidated financial highlights
Consolidated financial highlights Full year Quarter NOMURA ——— Netincome (loss) 30 4 ROE (%) Net revenue Income (loss) before income taxes Net income (loss) attributable to Nomura Holdings, Inc. ("NHI") shareholders Total NHI shareholders’ equity ROE (%)' Basic-Net income (loss) attributable to NHI
Slide 24: Consolidated income
Consolidated income NOMURA Full year Quarter (billions of yen) ‘Prato Franti Fvaoni2 ryzNaNS Revenue Commissions 405.5 347.1 74.0 90.4 774 72.3 83.7 Fees from investment banking 107.0 59.6 17.2 14.8 10.4 17.1 13.0 Asset management and portfolio service fees 143.9 144.3 33.4 35.1 33.8 33.4 35.0 Net g
Slide 25: Main revenue items
Main revenue items NOAURA Full year Quarter (billions of yen) Fy20iortt Fya20t1/i2 —Fy20NI2— 201213 — 3Q AQ 1 QQ Stock brokerage commissions (retail) 51.4 36.0 7.0 144 74 7.0 10.7 Stock brokerage commissions (other) 144.6 132.7 32.3 31.8 28.4 25.3 27.2 Other brokerage commissions 11.5 94 2.0 18 23 2
Slide 26: Adjustment of consolidated results and segment results
Adjustment of consolidated results and segment results: Income (loss) before income taxes NOMURA Full year Quarter (billions of yen) Income (loss) 93.3 85.0 34.5 60.8 19.7 35.4 13.0 {3 Basle a reorgenizaton mn Apr 2012, reported emounts for Whotesele ond Other have been Teclessied. 2s
Slide 27: Segment “Other”
Segment “Other” Income (loss) before income taxes Full year NOMURA 40 Net gain (loss) related to economic hedging transactions Realized gain(loss) on investments in equity securities held for operating purposes Equity in earnings of affiliates Corporate items’ Others'* Income (Loss) before income ta
Slide 28: Retail related data (1)
Retail related data (1) (billions of yen) Full year Quarter NOMURA te 100 Commissions 2448 201.5 38.7 441 41.7 85.7 33.5% 43.9% Sales credit 528 59.0 152 156 151 168 20.3 21.1% 34.2% Fees from investment banking and other 423 38.2 13.7 87 103 04 66 -29.8% 51.8% Investment trust administration fees a
Slide 29: Retail related data (2)
Retail related data (2) Stock brokerage commissions and commissions for distribution of investment trusts Full year Quarter (billions of yen) (billions of yen) 180 70 150 60 50 ™ Stock brokerage commissions 120 40 90 = Commissions for distribution of 30 investmenttrusts 60 20 30 10 o} ° Sag a — 400
Slide 30: Retail related data (3)
Retail related data (3) Retail client assets (1) Includes CBs and warrants. (2) _Hincludes annuity insurance Full year Quarter (trillions of yen) 100 mOther 80 If 70.6 72.0 721 73.6 = Overseas mutual funds. 650 2.0 68.2 673 mBond investmenttrusts 9 ™ Stock investment trusts 40 = Domestic bonds ™Fore
Slide 31: Retail related data (4)
Retail related data (4) NOAURA Retail client assets: Net asset inflow’ Full year Quarter (billions of yen) (billions of yen) 6,000 + 900 3,942 4,000 647 2,400 360 499 2,000 260 lJ 185 0 | | — 10 -100 (1) Netasset inflow = asset inflow — asset outfiow. Retail client assets exclude portion from region
Slide 32: Retail related data (5)
Retail related data (5) Number of accounts NOMURA (Thousands ‘praoior Fvaowwn2 = raging rang Accounts with balance 4,936 4,985 4,954 4,966 4,985 4,997 5,003 Equity holding accounts 2,695 2,706 2,703 2,707 2,706 2,714 2,731 Nomura Home Trade / Net & Call accounts! 3,328 3,773 3,369 3,745 3,773 3,796
Slide 33: Asset Management related data (1)
Asset Management related data (1) NOMURA (billions of yen) Fezo1011 a Gag Net revenue 66.5 65.8 15.3 15.7 16.4 15.4 18.8 21.7% 22.8% Non-interest expenses 46.5 45.3 44 11.6 11.0 10.9 11.5 5.4% 3.7% Income before income taxes 20.0 20.5 42 44 54 46 73 60.5% 72.5% (1) Dueto a reorganization in April 20
Slide 34: Asset Management related data (2)
Asset Management related data (2) Assets under management (gross) by business‘ css ‘Mar 12 Mar 12 Dee Investmenttrust business 24.3 23.0 21.0 23.0 215 Investmentadvisory business Assets under management 327 31.9 29.2 31.9 30.1 (gross)' Assets under management by company NOMURA Asset inflows/outflows
Slide 35: Wholesale related data (1)
Wholesale related data (1) NOAURA Wholesale tilons of yen [rvaonna rao Net revenue 626.1 555.0 175.1 158.4 121.9 137.1 189.0 37.8% 7.9% Non-interest expenses 622.0 592.7 138.1 146.5 130.4 136.9 144.6 5.6% 47% Income (Loss) before income taxes 441 37.7 37.1 11.9 8.6 0.2 44.4 229.8x 19.7% Breakdown of
Slide 36: Wholesale related data (2)
Wholesale related data (2) Private equity related investments Full year (billions of yen) 400 327.7 Terra Firma 300 BAsia mEurope (excluding 200 Terra Firma) = Japan 100 i) Japan 165.9 Europe (excluding Terra Firma) 33.5 Asia Sub Total 202.7 Terra Firma 125.0 Total 327.7 Quarter 221.3 208.9 71.2 65.
Slide 37: Number of employees
Number of employees NOMURA (2) Includes Powal office in India. (1) Excludes employees of private equity investee companies Japan (excluding FA)' 12,829 20,263 20,105 19,882 19,598 20,197 20,039 19,877 Japan (FA) 2,089 2,096 2,078 2,048 2,011 2,014 1,981 1,951 Europe 4,353 4,436 4,492 4,143 4,014 3,9
Slide 38: Disclaimer
Disclaimer NOMURA 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. Offers to
Slide 39: Nomura Holdings, Inc.
NOMURA Nomura Holdings, Inc. www.nomura.com