Monex Group, Inc. · TSE:8698
Monex — Q3 FY2013 Earnings Presentation
41 slides from Monex's earnings presentation, Jan 29, 2013
Slide 1: Financial Results of 3Q of Fiscal Year Ending March 31, 2013
January 29, 2013 Financial Results of 3Q 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 stat
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.21 2. Concept of Shared Platform under the Global Vision ･･･ p.22 I. Key Strategy Overview 3. Roadmap (1) ･･･ p.23
Slide 5: I. Key Strategy Overview
I. Key Strategy Overview II. Financial Results III. Global Vision and Strategies IV. Data 4
Slide 6: About Monex Group
About Monex Group ■ The Monex Group aims to be a global retail online financial service provider, offering the global standard investment products and services to retail investors online ■ We ensure our competitiveness and realize company growth by promoting Global Vision which is to globalize the c
Slide 7: 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 Develop BtoB Business ◆ Focus on promoting 4 strategies; Japan, U.S., China and Global FX, and controlling fixed costs. tors Becoming a global financial group based
Slide 8: II. Financial Results
I. Key Strategy Overview II. Financial Results III. Global Vision and Strategies IV. Data 7
Slide 9: Major Business Activities this Quarter
Major Business Activities this Quarter ◆A Steady Roadmap Progress - Launched New U.S. Equity Service in Japan New U.S. equity service jointly developed by TradeStation and Monex, Inc. was successfully launched by Monex, Inc. on November 28, 2012, as one of the essential steps to realize our Global V
Slide 10: Financial Summary: 2Q vs. 3Q of FYE Mar. 31, 2013 (3 months)
Financial Summary : 2Q of FYE Mar. 31, 2013 vs. 3Q of FYE Mar. 31, 2013 (in 3 months) （in million yen, %） 2Q of FYE Mar. 31, 2013 3Q of FYE Mar. 31, 2013 Change (Jul. 2012– Sep. 2012 ） (Oct. 2012– Dec. 2012） Operating Revenues 7,026 8,726 24.2 % Net Operating Revenues 6,413 7,446 16.1 % SG&A 7,428 7
Slide 11: 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 2Q of FYE Mar. 31, 2013 ■SG&A：Comparison with 2Q of FYE Mar. 31, 2013 ◆Commission increased due to the brisk market ◆Variable cost such as Transaction-related expenses condition in Japan increased due to th
Slide 12: Financial Summary: 3Q FYE2012 vs. 3Q FYE2013 (9 months)
Financial Summary : 3Q of FYE Mar. 31, 2012 vs. 3Q of FYE Mar. 31, 2013 (in 9 months) （in million yen, %） 3Q of FYE Mar. 31, 2012 3Q of FYE Mar. 31, 2013 Change (Apr. 2011– Dec. 2011） (Apr. 2012– Dec. 2012） Operating Revenues 23,387 24,583 5.1 % Net Operating Revenues 20,709 21,600 4.3 % SG&A 18,782
Slide 13: Major Factors of Revenue and SG&A (Comparison with 3Q of Last Fiscal Year)
Major Factors of Revenue and SG&A (Comparison with 3Q of Last Fiscal Year) ■ Revenue：Comparison with 3Q of FYE Mar. 31, 2012 ■ SG&A：Comparison with 3Q of FYE Mar. 31, 2012 ◆ Increased due to the consolidation of TradeStation ◆ Increased due to the consolidation of TradeStation Increased by 3,855 mil
Slide 14: Balance Sheet (1)
Balance Sheet (1) ■ Keeping sufficient equity, liquidity and financing capability ◆Balance Sheet as of end of December 2012 (*1) Non-current assets（investment value of risk assets） Property/equipment 1.1 (Facilities, equipment, etc) Current Asset Current Liabilities Software 4.8 (Assets to provide s
Slide 15: Balance Sheet (2)
Balance Sheet (2) ■Goodwill/Intangible Asset ■ Investment securities （in billion yen） Identifiable Name of securities Acquisition Book Estimated Appraisal Goodwill Software intangible Remaining (Purpose for acquisition） cost value Value profit As of asset years (JPY bn) (JPY bn) ◆Market value Decemb
Slide 16: Distribution of Consolidated Net Operating Revenues by Regions and Businesses
Distribution of Consolidated Net Operating Revenues by Regions and Businesses ■ 3Q FYE March 31, 2013 (9 months) Financial Income Others 3% FX 3% Equities 6% Options 23 % 2% Futures 11 % China (HK) 1% US+EU+AU Futures and Options 34 % 2% Japan Equities 9% 65 % FX 13 % Others 5% Mutual Fund Financial
Slide 17: Distribution of Consolidated SG&A by Regions and Contents
Distribution of Consolidated SG&A by Regions and Contents ■3Q FYE March 31, 2013 (9 months) Most of the system development is outsourced in Japan and the amount of the Others systems related costs is large. 6% Commissions paid Systems 10 % related costs Advertising expenses 24 % 3% China (inc. HK) C
Slide 18: Distribution of Consolidated Personnel by Regions and Jobs
Distribution of Consolidated Personnel by Regions and Jobs ■As of the end of December 2012 System development is mostly outsourced in Japan and the number of (Total number of employees: 919) technology related employees is small. Technology IBFX 4% Marketing 10 % 10 % 4% Others China Japan 11 % (inc
Slide 19: About 4Q of FYE March 2013
About 4Q of FYE March 2013 ◆ Prospected extraordinary factors in 4Q (as disclosed) By the merger of Sony Bank Sec. by Monex, Inc. as of Jan. 12, 2013: - JPY100M of integration costs (negative impact to the net income) - JPY900M of income tax adjustment (positive impact to the net income) ◆ As for th
Slide 20: Accounting Standard Change from J-GAAP to IFRS
Accounting Standard Change from J-GAAP to IFRS Anticipated to Occur at FYE March 31, 2013 ◆Adoption of IFRS J-GAAP to apply for disclosures of financial results on 1Q to 3Q of FYE March 2013 IFRS is expected to apply starting from the disclosure of financial results on full-year of FYE March 2013 ・1
Slide 21: III. Global Vision and Strategies
I. Key Strategy Overview II. Financial Results III. Global Vision and Strategies IV. Data 20
Slide 22: 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 23: Concept of Shared Platform under the Global Vision
Concept of Shared Platform under the Global Vision ■Construct Global Platform to be shared in the group and extended for BtoB business China clients Japan clients U.S. clients Products & Services Products & Services Products & Services Company A Company B - Drastically improve profitability - Achiev
Slide 24: Roadmap (1)
Roadmap (1) ■Measures to integrate systems and control cost FYE March 2013 FYE March 2014 FYE March 2015 FYE Mar. 2016 Reduce Global FX Trading (Feb.) Introduce MT4 to Introduce TradeStation system related platform Monex, Inc. platform to Monex, Inc. cost Liquidity/risk Integrate liquidity/risk mana
Slide 25: Roadmap (2)
Roadmap (2) ■Plan to control cost by system integration, etc. (JPY, show cost decrease by – [minus] and increase by + [plus]) FYE Mar. 2013 FYE Mar. 2014 FYE Mar. 2015 FYE Mar. 2016 FYE Mar. 2017 Global FX -560M -560M -560M Information - 260M -260M -260M -260M U.S. equities -50M System related Japan
Slide 26: Roadmap (3)
Roadmap (3) ■ 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 27: Progress in Roadmap: New U.S. Equity Service
Progress in Roadmap: New U.S. Equity Service ■Monex, Inc. and TradeStation co-developed new U.S. equity service ◆Released No.1 U.S. equity service in Japan as of Nov. 28, 2012 - No.1 tradable issues More than 2,800 brands (including U.S. ETFs） - Lowest commission Min. $14.7 / trade (including tax） -
Slide 28: Progress in Roadmap: MT4 / Information Service
Progress in Roadmap: MT4 / Information Service ■Products and services being developed for Japanese clients ◆ MT4, de facto standard FX platform, to be introduced to Japan in Feb. 2013 ◆ MT4 for Japan will be: ・ Account opening is easier since MT4 account is separated from our comprehensive securitie
Slide 29: Global FX: Local Activities
Global FX: Local Activities ■Japan (Monex, Inc. and Monex FX) ■U.S. and Australia (IBFX, Inc.) ◆ Trading volume is increased due to recovery of volatility ◆ Global FX business to be expanded under IBFX brand Revenue (million yen) Trading volume (billion yen) Revenue (thousand dollar) Trading volume
Slide 30: 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） (thousands) (billion yen) A
Slide 31: Japan: Mutual Fund / Fixed Income Businesses and Collaboration
Japan: Mutual Fund / Fixed Income Businesses and Collaboration (Monex, Inc.) ■Strengthen business alliances to enhance brokerage ■Mutual Fund/Fixed Income Businesses business ◆ Trends in mutual fund sales and balance (billion yen) ◆Acquisition of Sony Bank Securities and merger into Monex, Inc. ・Son
Slide 32: U.S.: About TradeStation
U.S.: About TradeStation ■Overview ■Characteristics of TradeStation ◆ TradeStation® (trading platform) TradeStation® is an award winning direct-access trading platform which offers sophisticated analysis capabilities for ◆ Company Overview every level of trader. TradeStation® provides the ability to
Slide 33: U.S.: Business Progress
U.S.: Business Progress ■Management Benchmark ■U.S. business progress ◆ Comparison of DARTs(*1) among US listed brokerages ◆Promoting B2B business -Based on their disclosure Apr.-Dec. 2012 Developing version of TradeStation’s award winning platform to license to software companies and brokers outsid
Slide 34: 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 35: IV. Data
I. Key Strategy Overview II. Financial Results III. Global Vision and Strategies IV. Data 34
Slide 36: Quarterly Breakdown of Consolidated Income Statement
Financial Results：Quarterly Breakdown of Consolidated Income Statement （in million yen） FYE Mar. 31, 2011 FYE Mar. 31, 2012 FYE Mar. 31, 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Brokerage commissions( includes OSE-FX) 2,772 1,904 2,089 3,336 2,120 3,941 3,387 3,675 3,128 2,809 3,506 Stocks and ETFs 2,5
Slide 37: Quarterly Breakdown of Consolidated SG&A
Financial Results：Quarterly Breakdown of Consolidated SG&A （in million yen） FYE Mar. 31, 2011 FYE Mar. 31, 2012 FYE Mar. 31, 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Transaction-related expenses 1,267 1,118 1,260 1,360 1,224 2,439 2,521 2,679 2,625 2,379 2,429 Commissions paid 246 217 220 237 238 1,038
Slide 38: 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 2Q 3Q Japan U.S. H.K. Japan U.S. H.K. 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 6
Slide 39: 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 2Q 3Q Japan U.S. H.K. Japan U.S. H.K. 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 1,2
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 Company aims to provide return to its shareho
Slide 41: The Monex Group
The Monex Group Holding Company （As of January 29, 2013） [ China ] [ Japan ] [ US/EU ] Online Securities Companies Monex International Limited Asia business base in Hong Kong TradeStation Group, Inc. Holding company in U.S. Online Securities Company Online Securities Company Monex, Inc. Comprehensiv