Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2012/13 Earnings Presentation
37 slides from Nomura's earnings presentation, July 2012
Slide 1: Opening remarks: Group COO and Wholesale CEO
Opening remarks: Atsushi Yoshikawa, Group COO and Wholesale CEO Good evening. This is Atsushi Yoshikawa, newly appointed Group COO and CEO of the Wholesale division. Let me first briefly introduce myself. I was the CEO of the Asset Management division as well as the president of Nomura Asset Managem
Slide 2: Financial results: Chief Financial Officer
Financial results: Junko Nakagawa, Chief Financial Officer I will now give you an overview of our financial results for the first quarter of the fiscal year ending March 2013 using the document entitled “Consolidated Results of Operations.” Please turn to page three.
Slide 3: Outline
Outline Presentation NOMURA Financial Supplement Executive summary (p. 3) Overview of results (p. 4) Business segment results (p. 5) Retail (p. 6-7) Asset Management (p. 8-9) Wholesale (p. 10-13) Non-interest expenses (p. 14) Robust financial position (p. 15) Funding and liquidity (p. 16) Exposure t
Slide 4: Executive summary
Executive summary Net revenue for the first quarter was 369.3 billion yen, a 26 percent decline from the previous quarter. On a year-on-year basis, revenues increased 12 percent due to converting Nomura Land and Building into a subsidiary. Income before income taxes declined 68 percent sequentially
Slide 5: Overview of results by group and segment
Please turn to pages four and five for an overview of our results at the group level and by business segment. I will now give you an update of the performance of each segment, starting with Retail on pages six and seven. 4
Slide 6: Business segment results
Business segment results i Net revenue and income (loss) before income taxes NOMURA (oltions of yen) FY2012/13 FY2011/12 FY2011/12 14/4 oat 10 Q0Q ao YoY Revenues Retail 82.7 92.4 10% 94.2 12% Asset Management 16.4 15.7 +5% 18.8 -13% Wholesale! 121.9 158.4 -23% 140.0 -13% Segment total 221.0 266.5 1
Slide 7: Retail
Retail The market environment turned difficult following the rebound in the prior quarter. Retail investors shied away from taking on risk, leading to an 10 percent decline in net revenue to 82.7 billion yen. Income before income taxes dropped 40 percent to 12.2 billion yen. Sales of investment trus
Slide 8: Retail: Consulting-based sales
Retail: Consulting-based sales NOMURA Ninth straight quarter of net asset inflows’ Total sales (oillons of yen) mStocks =Bonds —sinvestmenttrusts Others 0 VEER SESE = Investment trusts: Sales down 3,000 ~ Recorded net inflows each month despite challenging market environment ~ Enhanced product lineu
Slide 9: Asset Management
Asset Management Asset Management delivered stable earnings, reporting net revenue of 16.4 billion yen, up 5 percent sequentially, and income before income taxes of 5.4 billion yen, a 30 percent increase compared to the first quarter last year. As shown in the graph on the bottom left of page eight,
Slide 10: Asset Management: Investment trust and investment advisory inflows
Asset Management: Investment trust and investment advisory inflows NOAURA Nomura Asset Management share of public investment trust Assets under management (gross)' by business market? (trilions of yen) @ Investmenttrust business Ml Investment advisory business 33.7 319 23.0% . 1.9% 1.9% 22.0% 22.1%
Slide 11: Wholesale
Wholesale Wholesale reported net revenue of 121.9 billion yen, down 23 percent from the prior quarter, and a loss before income taxes of 8.6 billion yen. Fixed Income was resilient amid the challenging market driving the division’s revenues. However, revenues in Equities and Investment Banking were
Slide 12: Fixed Income
Fixed Income reported net revenue of 71.5 billion yen, down 18 percent quarter on quarter. While client businesses performed well, subdued market volumes impacted trading. The pie graph on the top right gives a breakdown of revenues for our four core products. Revenues were well balanced across each
Slide 13: Equities
Net revenue in Equities declined 28 percent from last quarter to 37.1 billion yen. Muted trading volumes in Japan and AEJ coupled with a dearth of primary deals led to a 15 percent sequential decline in client revenues. Trading revenues deteriorated as lower levels of market liquidity impacted resul
Slide 14: Investment Banking
Net revenue in Investment Banking was 13.3 billion yen, 33 percent lower than the prior quarter. Despite the decline in the global fee pool throughout the year, gross revenue was flat at 32.3 billion yen. While there were fewer revenue opportunities in the ECM business, we have won a number of manda
Slide 15: Non-interest expenses
Non-interest expenses Non-interest expenses declined 20 percent from last quarter to 349.6 billion yen, due primarily to a decline in cost of goods sold at consolidated entities. Non-interest expenses excluding entities consolidated as a result of converting Nomura Land and Building into a subsidiar
Slide 16: Robust financial position
Robust financial position Turning now to our balance sheet on page 15, total assets at the end of the quarter were 35.3 trillion yen, gross leverage was 16.8 times, and net leverage was 10.6 times. The chart on the bottom left shows our capital ratios. Under Basel 2.5, our Tier 1 ratio was 15 percen
Slide 17: Funding and liquidity
Funding and liquidity Page 16 outlines our funding and liquidity portfolio. As shown on the top left, 79 percent of our balance sheet is composed of highly liquid trading and related assets. The bottom right shows that approximately 80 percent of unsecured funding is long-term debt and demonstrates
Slide 18: Exposure to European peripheral countries
Exposure to European peripheral countries Our net country exposure at the end of June was 2.21 billion dollars, representing an increase of 633 million dollars from our exposure of 1.58 billion dollars at the end of March. This increase is mainly attributable to a rise in short-term inventory in Spa
Slide 19: Closing remarks: Group COO and Wholesale CEO
Closing remarks: Atsushi Yoshikawa, Group COO and Wholesale CEO We have been making decisions swiftly, anticipating the changing earnings environment. Faced with a difficult economic conditions, market uncertainty, and a new regulatory environment, the Wholesale division needs to explore and build a
Slide 20: Consolidated balance sheet
Consolidated balance sheet (billions of yen) Assets Total cash and cash deposits Total loans and receivables Collateralized agreements Total trading assets' and private equity investments Total other assets Total assets 1. Including securities pledged as collateral. Liabilities Short-term borrowings
Slide 21: Value at risk
Value at risk = Definition 99% confidence level (billions of yen) 18 1.6 1.9 15 14 1.2 — 1-day time horizon for outstanding portfolio — Inter-product price fluctuations considered = From April 1, 2012 to June 29, 2012 (billions of yen) Maximum: 7.2 — Minimum: 4.3 — Average: 5.5 Equity Interest rate
Slide 22: Consolidated financial highlights
Consolidated financial highlights Full year Quarter NOAURA (billions of yen) (billions of yen) 1.__ Quarterly ROE is calculated using annualized year-to-date net income. 40 p 10% 40 3.4% ° 8% °° 178 22.4 mmm Net income ( 30 28.7 20. 178 L loss) 40 ROE (% y 6% . (%) 20 O- ‘ E | 4% -10 5 r 11.6 40 -20
Slide 23: Consolidated income
Consolidated income (billions of yen) Full year Quarter NOAURA Revenue Commissions 405.5 347.1 96.8 85.9 74.0 90.4 774 Fees from investment banking 107.0 59.6 13.8 13.8 17.2 14.8 10.4 Asset management and portfolio service fees 143.9 144.3 39.1 36.7 33.4 35.1 33.8 Net gain on trading 336.5 272.6 67.
Slide 24: Main revenue items
Main revenue items NOAURA Full year Quarter aia Re Sooo 1000 QQ 41 Stock brokerage commissions (retail) 51.4 36.0 8.7 9.2 7.0 11.41 74 Stock brokerage commissions (other) 144.6 132.7 34.2 34.4 32.3 31.8 28.4 Other brokerage commissions 11.5 9.4 25 3.2 2.0 18 2.3 Commissions for distribution of inves
Slide 25: Adjustment of consolidated and segment results: income before taxes
Y @ Full year Adjustment of consolidated results and segment results: Income (loss) before income taxes Quarter NOAURA (billions of yen) i i re 22.0 10.7 10.1 20.3 12.2 Three Business segments total Segments total ‘Due to @ reorganization in April 2012, reported amounts for Wholesale and Other have
Slide 26: Segment “Other”
Segment “Other” Income (loss) before income taxes Net gain (loss) related to economic Full year Quarter NOMURA (billions of yen) 40) 35.2 hedging transactions 23 84 a5 42 uw Realized gain (loss) on investments in equity 02 02 07 02 03 securities held for operating purposes Equity in earnings of affi
Slide 27: Retail related data (1)
Retail related data (1) (billions of yen) Full year Quarter NOMURA Commissions 244.8 201.5 58.7 48.2 38.7 55.8 441 -20.9% -24.9% Sales credit 52.8 59.0 15.2 13.0 15.2 15.6 15.1 3.2% 0.4% Fees from investmentbanking and other 42.3 38.2 6.2 9.5 13.7 8.7 10.3 17.9% 66.0% Investment trust administration
Slide 28: Stock brokerage commissions and commissions for distribution of investment trusts
Stock brokerage commissions and commissions for distribution of investment trusts Full year Quarter (billions of yen) (billions of yen) 180 70 150 60 5 120 $0 ™ Stock brokerage commissions 40 90 ™ Commissions for distribution 30 - of investment trusts * 60 20 30 10 oO} . 0 Paver art Sigma Saniaae |
Slide 29: Retail related data (3)
Retail related data (3) Retail client assets Full year Quarter NOMURA 100 = Other 80 ™ Overseas mutual funds ™ Bond investment trusts ™ Stock investment trusts = Domestic bonds ™ Foreign currency bonds = Equities 60 40 20 Equities Foreign currency bonds Domestic bonds ' Stock investmenttrusts Bond i
Slide 30: 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 5 ; 4,000 3,000 3,942 4,000 + 2,000 2,400 2,000 1,107 847 » 1,000 647 | | = _ a of = Lo (1) Net asset inflow = asset inflow — asset outflow. Retail cient assets exclude
Slide 31: Retail related data (5)
Retail related data (5) NOMURA Number of accounts (ean “reas penne aon Accounts with balance 4,936 4,985 4,945 4,954 4,966 4,985 4,997 Equity holding accounts 2,695 2,706 2,696 2,703 2,707 2,706 2,714 Nomura Home Trade / Net & Call accounts’ 3,328 3,773 3,348 3,369 3,745 3,773 3,796 New Individual a
Slide 32: Asset Management related data (1)
pan ni 12 QQ At 66.5 65.8 Asset Management related data (1) NOMURA mM Relat assets under management for Nomura Asset Managemen, ‘Nomura Funds Research and Technologies, Nomura Corporate Research and Asset Management, Nomura Private Equity Capital, and Nomura Funds are) (2) _ Net after deducting from
Slide 33: Asset Management related data (2)
Asset Management related data (2) Assets under management (gross) by business" Asset inflows/outflows by business* NOMURA ea rvs ———— went unit Sept echt Marte nz, bien stn a el ee ee thvestment trust 243 230 248 212 210 230 215 1a 22 3410 Investment trust 1778 «2953512 80s 1B Investment advisory 84
Slide 34: Wholesale related data (1)
Wholesale related data (1) Wholesale (billions of yen) Breakdown of Wholesale revenues Net revenue 626.1 140.0 81.6 175.1 158.4 121.9 23.1% 12.9% Non-interest expenses 622.0 592.7 155.9 152.2 138.1 146.5 130.4 11.0% 16.3% Income (Loss) before income taxes 41 37.7 -15.9 -70.7 37.4 11.9 8.6 - - (billi
Slide 35: Wholesale related data (2)
Wholesale related data (2) Private equity related investments NOAURA Full year Quarter (billions of yen) 500 = Terra Firma 400 3277 : 313.7 mAsia ™ Europe (excluding 208.9 221.3 206.0 Terra Firma) Japan Japan 165.9 65.5 159.7 Europe (excluding Terra Firma) 33.5 26.8 29.2 Asia 3.3 1.9 3.2 Sub Total 2
Slide 36: Number of employees
Number of employees (1) Excludes employees of private equity investee companies (2) Includes Powa’ office in India Japan (excluding FA)! 12,829 20,263 20,105 19,882 19,598 20,197 Japan (FA) 2,089 2,096 2,078 2,048 2,011 2,014 Europe 4,353 4,436 4,492 4,143 4,014 3,975 Americas 2,348 2,383 2,537 2,46
Slide 37: Nomura Holdings, Inc.
NOMURA Nomura Holdings, Inc. www.nomura.com