Monex Group, Inc. · TSE:8698
Monex — Q1 FY2023 Earnings Presentation
62 slides from Monex's earnings presentation, Aug 3, 2022
Slide 1: Financial Results for 1Q of Fiscal Year Ending March 31, 2023
TSE Prime : 8698 Monex Group Financial Results for 1Q of Fiscal Year Ending March 31, 2023 August 3, 2022
Slide 2: Our Business Principles
Our Business Principles Always a step ahead of the “Y” in “MONEY,” our name MONEX expresses our desire to embrace all people who are engaged at the forefront of our future. With state-of-the-art IT technology, globally universal values and a sense of professionalism, Monex Group designs innovative w
Slide 3: Table of Contents
Our Business Principles p.1 Table of Contents p.2 Ⅰ. Highlights p.3 - p.11 Ⅱ. Consolidated Performance p.12 - p.29 Ⅲ. Business Update p.30 - p.45 Appendix: Group Overview p.46 -p.59 Disclaimer p.60 This is an English translation of Japanese presentation materials prepared in connection with the disc
Slide 4: I. Highlights
MONEX GROUP I . Highlights
Slide 5: Highlights of 1Q FYE Mar. 2023 – Consolidated Operating Revenue
Highlights of 1Q of FYE Mar. 31, 2023 – Consolidated Operating Revenue Solid revenues QoQ despite an unfavorable equity and crypto asset market environment. (JPY million) 17,612 17,698 304 274 Crypto Asset 3,160 3,162 Strong NFT business performance 6,325 US 6,918 Increase in net financial income Ot
Slide 6: Highlights of 1Q FYE Mar. 2023 – Consolidated Pre-tax Income
Highlights of 1Q of FYE Mar. 31, 2023 – Consolidated Pre-tax Income Accumulated customer deposits contributed to an increase in net financial income due to US interest rate hikes, offsetting a decrease in brokerage commissions. Advertising expenses were controlled and real profit levels were maintai
Slide 7: Financial interest impact and advertising expenses
Financial interest impact and advertising expenses Financial interest impact Advertising expenses Interest income from customer cash in US dollars at Monex Securities Each subsidiary has been actively conducting advertising and and TradeStation belongs to the Monex Group. Interest income is on promo
Slide 8: TradeStation Terminated Business Combination Agreement with Quantum FinTech
TradeStation Group (US segment) Terminated its Business Combination Agreement with Quantum FinTech Acquisition Corporation on August 2, 2022 TradeStation Group decided to terminate its business combination agreement with Quantum FinTech Acquisition Corporation. - The agreement allowed a party to ter
Slide 9: Change in Focus of TradeStation Growth Strategy
Change in Focus of TradeStation Growth Strategy (US segment) TradeStation Group aims to return to pre-tax profit by the end of this fiscal year. - Based on the results of the aggressive investments made over the past year, TradeStation has reviewed its marketing strategy and begun to reduce costs in
Slide 10: Growth Strategy of Coincheck
Growth Strategy of Coincheck (Crypto Asset Segment) Coincheck Group (CCG)*1 is proceeding with listing procedures. - After the proposed business combination with Nasdaq-listed SPAC, Thunder Bridge Capital Partners IV, Inc. (THCP), Coincheck Group is planned to go public on Nasdaq. (Termination date
Slide 11: Fair Value of Monex Group
Fair Value of Monex Group Monex Group believes that the equity value of the entire Monex Group is the sum of the values of each subsidiary (SOTP: Sum of the parts method), and it continues to execute growth and profit strategies at each subsidiary, aiming to improve the corporate value of each compa
Slide 12: Monex Group's Three Goals
Monex Group's Vision Monex Group's Three Goals 1 2 3 A global company offering A diversified business Investment in growth pursuing new services that go portfolio with three pillars: expansion of scale and beyond the future of online securities business generating sustainable cash finance to optimiz
Slide 13: II. Consolidated Performance
Ⅱ. Consolidated Performance 12
Slide 14: Highlights 1Q of FYE Mar. 2023 (3 months)
Highlights 1Q of FYE Mar. 2023 (3 months) Consolidated pre-tax income was ¥1.1B amid sluggish equity and crypto markets. Changing commissions of Japan equity cash trading, it strengthens the marketing capabilities Japan and its cash transaction share is on the road to recovery. Segment profit* was ¥
Slide 15: YoY Comparison (3 months) Consolidated Performance
YoY Comparison (3 months) Consolidated Performance FYE Mar. 2022 1Q FYE Mar. 2023 1Q Rate of (JPY million) Variance Reference (Apr–Jun. 2021) (Apr–Jun. 2022) change P16: Analysis of Japan segment Total operating revenue after deducting financial expenses and cost of sales 26,069 17,698 -8,370 -32% P
Slide 16: YoY Comparison (3 months) Segment Performance
YoY Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2022/3 2023/3 2022/3 2023/3 2022/3 2023/3 2022/3 2023/3 2022/3 2023/3 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q Total operating revenue after deducting 7,373 7,345 5,728 6,918 12,739 3,162 323 287 101 166 f
Slide 17: YoY Analysis: Operating Revenue (Japan)
YoY Comparison (3 months) Analysis: Operating Revenue Japan: Revenues remained almost flat with strong FX revenues and increased mutual fund revenues mitigating a commissions cut in Japan equities cash trading. ■ Total operating revenue after deducting financial expenses Total operating revenue afte
Slide 18: YoY Analysis: SG&A (Japan)
YoY Comparison (3 months) Analysis: SG&A Japan: While commissions paid increased with the transfer of accounts from Shinsei Bank, depreciation expenses decreased due to a control in systems investments. ■ SG&A (JPY million) SG&A Total +6.2％ (+372) 8,000 * Figures in parentheses indicate the variance
Slide 19: YoY Analysis: Operating Revenue (USD, US)
YoY Comparison (3 months) Analysis: Operating Revenue (USD) US: Net financial income increased and offset lower brokerage commissions and other revenue. ■ Total operating revenue after deducting financial expenses Total operating revenue after deducting financial expenses and and cost of sales cost
Slide 20: YoY Analysis: SG&A (USD, US)
YoY Comparison (3 months) Analysis: SG&A (USD) US: Although SG&A increased due primarily to increased advertising, based on its marketing results and worsening economic conditions, TradeStation has already begun to reduce advertising expenses and focus on a more balanced approach of trying to grow r
Slide 21: YoY Analysis: Operating Revenue (Crypto)
YoY Comparison (3 months) Analysis: Operating Revenue Crypto: Net trading income decreased due to lower trading volumes amidst a slower crypto market. Others increased due to the expansion of NFT businesses. ■ Total operating revenue after deducting financial expenses Quarterly total operating reven
Slide 22: YoY Analysis: SG&A (Crypto)
YoY Comparison (3 months) Analysis: SG&A Crypto: Advertising expenses have decreased by 60% in response to current market conditions. Total SG&A decreased YoY. (JPY million) SG&A Total -28.5％ (-1,070) 5,000 * Figures in parentheses indicate the variance from the previous year (JPY million) [reflects
Slide 23: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance FYE Mar. 2022 FYE Mar. 2023 4Q 1Q Rate of (JPY million) Variance Reference (Jan. 2022– (Apr. 2022– change Mar. 2022) Jun. 2022) P24: Analysis of Japan segment Total operating revenue after deducting financial expenses and cost of sales 17,612 17,698
Slide 24: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2022/3 2023/3 2022/3 2023/3 2022/3 2023/3 2022/3 2023/3 2022/3 2023/3 4Q 1Q 4Q 1Q 4Q 1Q 4Q 1Q 4Q 1Q Total operating revenue after deducting financial expenses and cost of sales 7,823 7,345 6,325
Slide 25: QoQ Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan: FX revenues increased due to highly volatile market activity, mitigating the impact of reduced Japan equities cash commissions. Mutual fund related revenues grew due to the promotion of the asset management model. ■ Total operating revenue
Slide 26: QoQ Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan: Appropriate control of fixed costs such as system-related expenses. ■ SG&A Quarterly SG&A Total -5.7％ (-384) (JPY million) * Figures in parentheses indicate the variance from the previous quarter (JPY million) 8,000 ■ Others（+122） 6,792 7,000 6,342 6,4
Slide 27: QoQ Analysis: Operating Revenue (USD, US)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US: Total operating revenue slightly declined due to lower commissions as a result of reduced trading, offset by higher net financial income. ■ Total operating revenue after deducting financial expenses and cost of sales Quarterly total ope
Slide 28: QoQ Analysis: SG&A (USD, US)
QoQ Comparison (3 months) Analysis: SG&A (USD) US: SG&A declined due to reduction in advertising expenses to focus on a more balanced approach of trying to grow revenue while returning to profitability. ■ SG&A (USD thousand) Quarterly SG&A Total -3.4％ (-2,394) *Figures in parenthesis reflect the var
Slide 29: QoQ Analysis: Operating Revenue (Crypto)
QoQ Comparison (3 months) Analysis: Operating Revenue Crypto: Total revenue increased slightly due to growth in NFT businesses while net trading income decreased due to lower trading volumes amidst a slower crypto market. ■ Total operating revenue after deducting financial expenses and cost of sales
Slide 30: QoQ Analysis: SG&A (Crypto)
QoQ Comparison (3 months) Analysis: SG&A Crypto: Total SG&A expenses decreased significantly as advertising expenses declined by approx. 50% despite one-time expenses related to the De-SPAC transaction. ■ SG&A (JPY million) SG&A Total -37.8％ (-1,631) * Figures in parentheses indicate the variance fr
Slide 31: III. Business Update
MONEX GROUP IT. Business Update 30
Slide 32: Japan Segment 1/4: Total Operating Revenue of Monex Securities
Business Update Japan Segment 1/4 Monex Securities increased revenues other than Japan equities brokerage commissions, and its revenue base has become more solid. Total Operating Revenue of Monex Securities Financial income Forex and fixed income Others Mutual funds (¥ million) Brokerage commission
Slide 33: Business Update Japan Segment 2/4
Business Update Japan Segment 2/4 The number of mutual fund unique users increased with the launch of Monex Card and the operation of accounts transferred from Shinsei Bank. Mutual Funds US Equities • Number of unique users for holding mutual funds grew • A large number of stocks handled, rapid addi
Slide 34: Business Update Japan Segment 3/4
Business Update Japan Segment 3/4 Transaction share in cash equity trading is on the road to recovery. A new marketing strategy, such as the in-house marketing promotion, introduced in 2Q and new account acquisitions were strong in July. Equity Transaction Volume Share Monthly Gross New Accounts Lau
Slide 35: Business Update Japan Segment 4/4
Business Update Japan Segment 4/4 Position the asset management business as a growth area with great potential. Robo-advisor AUM increased by 2.4 times YoY. Asset Under Management Robo-advisor service AUM ￥42.0B （YoY ｘ2.4） Robo-advisor services (¥ billion) ON COMPASS/ON COMPASS+ Todal AUM 800 Activi
Slide 36: Business Update US Segment 1/2
Business Update US Segment 1/2 Commission revenues are stable even in a down market. DARTs and Commission revenue Commission revenues are stable even in a down market, since active traders, who are TradeStation’s core customers, actively trade as long as VIX (volatility) is high. Commssion revenue D
Slide 37: Business Update US Segment 2/2
Business Update US Segment 2/2 TradeStation, a self-clearing brokerage, recorded a significant increase in net financial income from customer cash due to interest rate hikes. Net financial income Net financial income in 1Q $12M Net financial income (YoY +20%, QoQ +37%) （$ Million） Interest on custom
Slide 38: Business Update Crypto Asset Segment 1/5
Business Update Crypto Asset Segment 1/5 Coincheck further strengthens its leading position in the crypto asset industry in Japan. Coincheck Competitive Advantage 1. User friendly UI/UX 2. Customer Appeal 3. Broad product set Robust KYC / AML and compliance No.1 domestic market share for Number of t
Slide 39: Business Update Crypto Asset Segment 2/5
Business Update Crypto Asset Segment 2/5 Coincheck continues to acquire new accounts while carefully monitoring market conditions to adapt its variable cost structure. Marketing expense and Account acquisition Coincheck suspended TV commercials in Mar. 2022 and has maintained a 27% domestic market s
Slide 40: Business Update Crypto Asset Segment 3/5
Business Update Crypto Asset Segment 3/5 NFT businesses have grown steadily. NFT businesses Features and Strengths - Leveraging the customer base of Coincheck, a (JPY million) crypto asset trading platform. NFT sales profit* Percentage of NFT sales profit in revenue (right) 600 20% - Offering the gl
Slide 41: Business Update Crypto Asset Segment 4/5
Business Update Crypto Asset Segment 4/5 Coincheck intends to create and expand its digital economic sphere with an eye on Web3. Metaverse/Web3 Oasis TOKYO・Oasis KYOTO・Oasis MARS • Launched a project to create "Oasis TOKYO,“ "Oasis KYOTO" and “Oasis MARS”on land in the metaverse owned by Coincheck.
Slide 42: Business Update Crypto Asset Segment 5/5
Business Update Crypto Asset Segment 5/5 Coincheck has identified numerous large growth opportunities that can be pursued organically and accelerated through M&A or partnerships. Deepen Existing Broaden Digital Asset Offerings Solutions Marketplace / NFTs Web3 Institutional Financial On-ramp Interna
Slide 43: Business Update Asia Pacific and Investment Business Segment
Business Update Asia Pacific and Investment Business Segment In the Asia-Pacific segment, market transaction volume declined. Investment Business Segment recorded steady performance and continuous valuation gains. Asia Pacific Segment Investment Segment • Accounts with balance is 23K (YoY +6%). • MV
Slide 44: Business Update New Businesses
Business Update New Businesses Acquired a STEAM education business and a genome platform business. STEAM Education Business Genome Platform Business Viling, Inc. operates classrooms to offer STEAM educations. Genex creates a genome management platform. STEAM Education Business Overview Whole Genome
Slide 45: Business Update ESG and Sustainability 1/2
Business Update ESG and Sustainability 1/2 Improved external evaluation of our ESG/sustainability efforts. New ESG/Sustainability Disclosures 1st online brokers to be selected for four of the five Score Improvement ESG indices for Japan equities used by GPIF MSCI Japan ESG Select Leaders Index Susta
Slide 46: Business Update ESG and Sustainability 2/2
Business Update ESG and Sustainability 2/2 Revised our Materiality Matrix based on quantitative and qualitative analysis of the business impact and stakeholder importance of each ESG issue. May change prioritization in response to engagement and other factors. The importance of DEI and optimizing on
Slide 47: Appendix: Group Overview
MONEX GROUP Appendix: Group Overview 46
Slide 48: Appendix: Highlights 1Q of FYE Mar. 2023 1/3
Appendix: Highlights 1Q of FYE Mar. 2023 (3 months) 1/3 ◆Total operating revenue after deducting financial expenses and cost of sales, and quarterly profit attributable to owners of the Company Total operating revenue after deducting financial expenses and cost of sales Quarterly profit attributable
Slide 49: Appendix: Highlights 1Q of FYE Mar. 2023 2/3
Appendix: Highlights 1Q of FYE Mar. 2023 (3 months) 2/3 ◆Total operating revenue after deducting financial expenses and cost of sales, and Segment profit (JPY million) Total operating revenue after deducting financial expenses and cost of sales Segment profit (Quarterly profit before income taxes) 8
Slide 50: Appendix: Highlights 1Q of FYE Mar. 2023 3/3
Appendix: Highlights 1Q of FYE Mar. 2023 (3 months) 3/3 ◆Total operating revenue after deducting financial expenses, and Segment profit (JPY million) Total operating revenue after deducting financial expense Segment profit (Quarterly profit before income taxes) Asia 800 Pacific 600 400 323 321 296 2
Slide 51: History of Shareholders' Distribution
History of Shareholders’ Distribution Shareholder Return Policy: Stable dividend payments and flexible buybacks of its own shares, while investing in the long-term growth. ◆ History of dividend per share ◆ Return on equity ratio (JPY) 17.3% 20 18% 13.4% 15% 12.9% 15 7.0 12% 7.7 8.3% 10 9% 2.6 7.5 6.
Slide 52: Investors' Guide
Investors’ Guide Shareholders distribution Shareholders & indicators per share ◆ Our basic policy for shareholders distribution ◆ Major shareholders and shareholder breakdown (as of Mar. 31, 2022) Our basic principle is to increase its corporate value in a sustainable way as Monex Group, Inc. 0.4% w
Slide 53: Consolidated balance sheet
Consolidated balance sheet Key points of Monex Group’s consolidated balance sheet of Monex 1. Actual net debt is ¥13.7B for the holding company Monex Group, Inc., which does not engage in securities transactions, etc. 2. Trust assets, which are segregated deposits received from customers and guarant
Slide 54: Corporate Governance
Corporate Governance Established global-standard corporate governance practices and emphasis on dialogue with retail/institutional investors. Monex Group shifted to the new listing category of Tokyo Stock Exchange, "Prime Market" on Apr. 4, 2022. Adoption of “company with three committees” structure
Slide 55: Group Overview
Group Overview Listed Holding Company (As of June 30, 2022) [Japan] [US/Europe] [Asia Pacific] Crypto asset exchange Online Securities Company Monex International Limited service provider Holding Company in Hong Kong TradeStation Group, Inc. Online Securities Company Holding Company in the U.S. Mone
Slide 56: Overview of Monex Group and Main Subsidiary Companies
Overview of Monex Group and Main Subsidiary Companies ■ Monex, Inc. (Tokyo, Japan) ■ Coincheck, Inc. (Tokyo, Japan) One of the major online brokerage firms in Japan Crypto asset Exchange/Marketplace agency - President : Yuko Seimei - President: Satoshi Hasuo - Founded in 1999 - Founded in 2012, join
Slide 57: Group Overview－Revenues, Costs, and Employees
Group Overview－Revenues, Costs, and Employees Five Segments Contribution in FYE Mar. 2022 ■ Japan Segment Total operating revenue Selling, general and ■ US Segment after deducting financial expenses administrative expenses ■ Crypto Asset Segment 1% 1% 2% 0% ■ Asia Pacific Segment 20% ■ Investment Se
Slide 58: Investment Segment – Portfolio 1/3
Investment Segment – Portfolio 1/3 ◆ Monex Ventures, Inc. Becamepublicon Mothers TSE ◆ MONEX EDISON Investment Limited Partnership 57
Slide 59: Investment Segment – Portfolio 2/3
Investment Segment – Portfolio 2/3 ◆ MV I Investment Limited Partnership 58
Slide 60: Investment Segment – Portfolio 3/3
Investment Segment – Portfolio 3/3 ◆ MV I Investment Limited Partnership ◆ MV II Investment Limited Partnership 59
Slide 61: Disclaimer
Disclaimer About Coincheck Important Information About the Business Combination and Where to Find It In connection with the proposed business combination in connection with to the business combination agreement among Coincheck, Inc. (“Coincheck”), Coincheck Group B.V. (“CCG”), Thunder Bridge Capital
Slide 62: © Monex Group, Inc.
© Monex Group, Inc. www.monexgroup.jp/