Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2015/16 Earnings Presentation
34 slides from Nomura's earnings presentation, July 2016
Slide 1: Overview of first quarter financial results
I will now give you an overview of our financial results for first quarter of the year ending March 2016 using the document titled “Consolidated Results of Operations”. Please turn to page two.
Slide 2: Outline
VM 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) Consolid
Slide 3: Executive summary
In the first quarter, all business divisions reported higher net revenue and pretax income year on year. Firm-wide income before income taxes totaled 106 billion yen, exceeding 100 billion yen for the third straight quarter. Net income was 68.7 billion yen, the highest first quarter net income in ei
Slide 4: Highlights
Highlights (billions of yen, except EPS and ROE) Pyan1sit 6 Panna 5 QoQ Pyaona' 5 YoY Net revenue 424.0 | 434.5 -2% 370.8 +14% Non-interest expenses 318.0 | 329.6 -3% 319.2 0.4% Income before income taxes 106.0 os 41% 51.7 +105% ee Net income’ 68.7 82.0 -16% 19.9 3.5x EPS? Y18.65 Y22.08 -16% Y5.26 3
Slide 5: Net revenue and income before income taxes
Net revenue and income before income taxes (billions of yen) ‘Net Retail revenue Asset Management FY2015/16 FY2014/15 QoQ Ye 10 4a 10 ov 130.7 122.9 +6% 106.9 +22% 26.9 23.9 +13% 23.3 415% Proaaed On resets racy 50.9 11.7 40.9 67 31.6 147 -4.0 : 26 5.8x 9.0 76 +19% 35 +157% || 106.0 105.0 | +1% 51.7
Slide 6: Retail results
Net revenue in Retail was 130.7 billion yen, the highest since the three months to June 2013 and up 6 percent quarter on quarter. Robust sales of thematic funds targeting corporate value improvement and an increase in sales of discretionary investments and insurance helped to drive growth in net rev
Slide 7: Retail client activity and net inflows
This quarter, we continued to interview clients to make proposals matched to their individual needs and as shown on the bottom left, total net inflows into investment trusts and discretionary investments exceeded 600 billion yen. Recurring revenue was 78 billion yen on an annualized basis, which is
Slide 8: Asset Management results
Inflows into the investment trust business in the first quarter totaled 1.3 trillion yen driven by the thematic funds I mentioned in relation to Retail and funds for discretionary investments. Assets under management reached a record 41.4 trillion yen. We also booked dividend income and Asset Manage
Slide 9: Investment trust inflows and market share
As shown in the graph on the bottom left, the investment trust business reported inflows of 940 billion yen, of which roughly 300 billion yen was into MRFs and other short duration funds and 640 billion yen was into core funds. ETFs reported 310 billion yen of inflows and as shown on the top right,
Slide 10: Wholesale results
Net revenue was 205.2 billion yen, down 11 percent from the strong prior quarter. Equities reported ongoing revenue growth due to heightened client activity, while Fixed Income had a tough quarter in EMEA and AEJ due to challenging market conditions which dampened client flows and reduced liquidity.
Slide 11: Global Markets net revenue
Global Markets net revenue decreased 11 percent to 176.2 billion yen. Fixed Income net revenue declined by 28 percent to 84.1 billion yen. As shown by the heat map on the right, net revenue in the Americas was up quarter on quarter as Rates products improved significantly. In EMEA, Rates, Credit, an
Slide 12: Investment Banking
As shown in the graph at the top left, first quarter net Investment Banking revenues were 29.1 billion yen, roughly unchanged from last quarter. Total net revenue declined 11 percent to 29 billion yen. The sequential decline is due to “Other” including a gain on some investee companies last quarter.
Slide 13: Non-interest expenses
First quarter non-interest expenses were 318 billion yen, down 3 percent quarter on quarter. Non-personnel expenses declined and notably “Other” expenses dropped 23 percent as the charge for decommissioning IT systems and FX loss on an overseas investment booked last quarter were not repeated this q
Slide 14: Robust financial position
Total assets were 44 trillion yen. Gross leverage was 15.8 times and net leverage was 9.7 times. Our Basel III Tier 1 and Tier 1 common ratios were 13.5 percent, up 0.6 percent from 12.9 percent at the end of March. This is due to higher Tier 1 capital from a buildup in earnings and a decline in ris
Slide 15: Summary and collaboration across divisions
To sum up, we met the diverse needs of our global client base in the first quarter and we saw synergies from our efforts to collaborate across divisions and regions. For instance, Asset Management showed how it can meet the needs of our Retail clients with the fund targeting corporate value improvem
Slide 16: Financial Supplement
Financial Supplement 15
Slide 17: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits Total loans and receivables Total collateralized agreements Total trading assets! and private equity investments 17,309) Total other assets 2,710 Total assets 41,783) 1,620 18 2,213 Liabilities Short-term borrowings Total payables and deposits To
Slide 18: Value at risk
= Definition — 99% confidence level — 1-day time horizon for outstanding portfolio — Inter-product price fluctuations considered From April 1, 2015 to June 30, 2015 (billions of yen) — Maximum: — Minimum: — Average: 6.6 3.8 5.2 SS Se ee Equity 1.3 1.0 28 1.5 3.3 1.0 1.3 Interest rate 3.9 42 5.2 42 4
Slide 19: Consolidated financial highlights
Full year Quarter (billions of yen) 30, = Net income attributable to NHI sharehokers (billions of yen) 9% 90 60 @ROE(%) 0 o Net revenue 1,557.1 1,604.2 Income before income taxes 361.6 346.8 Net income attributable to Nomura Holdings, Inc. CNHI") shareholders 213.6 224.8 19.9 52.9 70.0 82.0 68.7 Tot
Slide 20: Consolidated income
Full year Quarter (billions of yen) “Prana Frans v2.05 FY 2018/16 Revenue Commissions 473.1 453.4 95.6 110.8 123.2 123.7 130.3 Fees from investment banking 91.3 95.1 19.8 20.6 28.8 25.8 24.5 Asset management and portfolio service fees 168.7 203.4 46.1 49.7 53.3 54.3 59.9 Net gain on trading 476.4 53
Slide 21: Main revenue items
Full year Quarter Stock brokerage commissions 266.6 252.8 50.1 58.8 73.1 70.7 78.7 Other brokerage commissions 18.1 19.6 3.8 40 61 5.8 5.2 ‘Commissions for distribution of investment trusts 157.8 134.3 30.5 37.5 32.6 33.6 34.3 Other 30.6 46.8 11.3 10.5 11.4 13.5 12.2 Total 473.1 453.4 95.6 110.8 123
Slide 22: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter nensonyen) ‘Praane Frans en ee Retail 192.0 161.8 31.6 38.9 50.5 40.9 50.9 Asset Management 27.1 32.1 8.3 78 9.3 67 11.7 Wholesale 111.8 82.2 5.7 22.2 0.5 53.8 19.7 Three Business segments tot
Slide 23: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 46.0 44.8 40.0 30.0 20.0 20.0 14.7 10.0 26 25 0.0 a = -10.0 4.0 fae eae) 10000 QQ 1 Net gain related to economic hedging transactions 17.4 15.1 6.9 2.2 64 0.3 2.6 Realized gain on investments in equity securtties held for ing
Slide 24: Retail results data
Full year Quarter (ition of yer rawr rams VHP gay — 100 2a Qt 258.9 54.6 66.7 9.0% Commissions’ 297.2 69.8 67.7 73.8 35.1% ‘Of which, brokerage commission 115.4 81.8 14.3 19.8 25.1 22.6 26.4 16.8% 84.4% Ofwhich, commissions for distribution of investment trusts 155.4 134.9 30.8 37.6 32.8 33.7 34.9 3
Slide 25: Retail client assets
Retail client assets (trillions of yen) 120 109.5 104.8 109.5 = Other 95.3 99.3 100 91.7 . = Overseas mutual funds 80 ™Bond investment trusts Stock investment trusts 60 = Domestic bonds 40 "Foreign currency bonds 4 Equities 0 Equities 53.2 67.2 55.6 58.1 62.2 67.2 70.2 Foreign currency bonds 6.3 6.3
Slide 26: 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 1,076 1,000 or 500 473 485 362 177 ” ° a = 137 0 -500 (1) Cash and securities inflows minus outfiows, excluding regional nancial institutions 25
Slide 27: Number of accounts
Number of accounts (mowsands) Mer Mar un Sep Dee Mar un Accounts with balance’ 5,182 5,294 5,224 5,250 5,276 5,294 5,316 Equity holding accounts 2.718 2,719 2,721 2,720 2,723 2,719 2,700 Nomura rome Trade ! 4,012 4,216 4,053 4,103 4,154 4,216 4,270 New Individual accounts / IT share? Full year Quart
Slide 28: Asset Management results and AUM
Full year Quarter (tions of yen peare] en A Net revenue 21.7 23.4 23.9 26.9 12.7% 15.3% Non-interest expenses 53.4 60.3 15.1 13.9 14.1 17.2 15.2 11.9% 0.7% Income before income taxes. 27.1 32.1 83 7.8 9.3 67 11.7 76.2% 42.0% Assets under management by company etn ed ee i Nomura Asset Management 33.8
Slide 29: Asset inflows/outflows by business
Asset inflows/outflows by business’ Full year Quarter (billions of yen) Ear FYRONIIS F208 116 Investment trusts business 1,598 3,418 473 879 1,124 942 1,252 of which ETFs 882 843. -23 90 298 477 308 Investment advisory business -520 50 27 44 46 113 38 Net asset inflow 1,078 3,469 500 835 1,078 1,055
Slide 30: Wholesale
Wholesale Full year Quarter (bilions of yen) [raea rae ryztaits ry 2018/16 00 Yor 100 QQ 1 Net revenue 765.1 188.9 190.6 178.9 231.5 205.2 11.4% 8.6% Non-interest expenses 653.3 707.7 183.1 168.4 178.5 177.7 185.5 44% 1.3% Income before income taxes 111.8 82.2 5.7 22.2 0.5 53.8 19.7 63.4% 3.4x Break
Slide 31: Private equity related investments
Private equity related investments (billions of yen) 70 60 57.2 56.4 58.8 58.6 58.7 56.4 = Tera Firma - 50 45.6 mAsia 40 ™ Europe (excluding Terra Firma) 30 = Japan 20 10 i) Japan 8.1 10.6 10.8 13.2 10.8 10.6 9.5 Europe (excluding Terra Firma) 22.6 19.9 21.8 19.3 20.7 19.9 8.7 Asia 1.9 24 1.8 1.9 21
Slide 32: Number of employees
Japan (excluding FA) 14,149 14,144 14,559 14,391 14,290 14,144 14,722 Japan (FA) 1,888 1,829 1,889 1,853 1,853 1,829 1,848 Europe 3,461 3,485 3,481 3,530 3,539 3,485, 3,492 Americas 2,281 2,449 2,335 2,421 2,445 2,449 2,439 Asia-Pacific! 5,891 6,765 6,656 6,744 6,762 6,765 6,788 Total 27,670 28,672
Slide 33: Disclaimer
VM 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. Off
Slide 34: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com NOMURA