Monex Group, Inc. · TSE:8698
Monex — 1H FYE March 2012 Earnings Presentation
36 slides from Monex's earnings presentation, Oct 26, 2011
Slide 1: Financial Results of 1H of Fiscal Year Ending March 31, 2012
October 26, 2011 Financial Results of 1H of Fiscal Year Ending March 31, 2012 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 Our Business Principles ･･･ p.2 I. Management Policy and Analysis Ⅳ. Data Management Policy and Analysis ･･･ p.5 1. Financial Results: Quarterly Breakdown of ･･･ p.23 Consolidated Income Statement II. Financial Results 2. F
Slide 5: 1. Management Policy and Analysis
1. Management Policy and Analysis 2. Financial Results 3. Global Vision and Strategies 4. Data 4
Slide 6: Management Policy and Analysis
Management Policy and Analysis ◆Focusing on expanding our business globally under the Global Vision ・Premise Designing the Global Vision to expand our business in China, a strong growth market, and the United States, the center of global financial markets due to stagnation of growth in Japan and the
Slide 7: 2. Financial Results
1. Management Policy and Analysis 2. Financial Results 3. Global Vision and Strategies 4. Data 6
Slide 8: Major Business Activities this Quarter
Major Business Activities this Quarter ◆Global Business Expansion Created a Road Map to apply TradeStation’s unique development capabilities to the entire Monex Group for synergies (see page 21 for details) ◆Secured Revenue of Market Volatility in August ・Increase in trades by individual investors i
Slide 9: Financial Summary: 1Q vs 2Q of FYE Mar. 31, 2012
Financial Summary : 1Q of FYE Mar. 31, 2012 vs. 2Q of FYE Mar. 31, 2012 (in 3 months) （in million yen, %） 1Q of FYE Mar. 31, 2012 2Q of FYE Mar. 31, 2012 Change (Apr. 2011 -Jun. 2011) (Jul. 2011– Sep. 2011） Operating Revenues 6,057 8,640 42.6% Net Operating Revenues 5,080 8,028 58.0% SG&A 4,350 7,03
Slide 10: 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 1Q of FYE Mar. 31, 2012 ■SG&A：Comparison with 1Q of FYE Mar. 31, 2012 ◆Brokerage commission increased due to the volatile ◆ Not considering TradeStation consolidation, slightly market in Aug. decreased due
Slide 11: Financial Summary: 1H FYE Mar. 2011 vs 1H FYE Mar. 2012
Financial Summary : 1H of FYE Mar. 31, 2011 vs. 1H of FYE Mar. 31, 2012 (in 6 months) （in million yen, %） 1H of FYE Mar. 31, 2011 1H of FYE Mar. 31, 2012 Change (Apr. 2010 – Sep. 2010） (Apr. 2011 – Sep. 2011） Operating Revenues 12,685 14,697 15.9% Net Operating Revenues 11,279 13,108 16.2% SG&A 9,02
Slide 12: Major Factors of Revenue and SG&A (Comparison with Last Fiscal Year)
Major Factors of Revenue and SG&A (Comparison with Last Fiscal Year) ■ Revenue：Comparison with 1H of FYE Mar. 31, 2011 ■ SG&A：Comparison with 1H of FYE Mar. 31, 2011 ◆ Decrease in equity trading values ◆ System related costs decreased due to the cost reduction since the merger of securities subsidia
Slide 13: Balance Sheet
Balance Sheet ■Maintain financial strength by keeping availability of funds and liquidity and controlling risk assets (*4) Non-current assets（investment value of risk assets） (in billion yen) [Cash margin from customers [Segregated cash trust] (minimum requirement)] Property/equipment 1.3 (Facilitie
Slide 14: Post-acquisition Capital Availability and Goodwill
Post-acquisition Capital Availability and Goodwill ■ Keeping sufficient equity, liquidity and financing capability Balance Sheet as of end of Sep. 2011 Goodwill/Intangible Asset and capital availability ◆Goodwill/Intangible Asset before the acquisition of TradeStation Group (Jun. 2011) Current Asset
Slide 15: Distribution of Consolidated Net Operating Revenue by Regions and Businesses
Distribution of Consolidated Net Operating Revenue by Regions and Businesses ■ 2Q FYE Mar. 31, 2012 (3 months) Getting into full swing on FX business as a growth area. Financial Income Others The percentage in the revenue doubled compared FX 4% 2% with the previous quarter. 2% Equity Futures and Opt
Slide 16: Distribution of Consolidated SG&A by Regions and Contents
Distribution of Consolidated SG&A by Regions and Contents ■2Q FYE Mar. 31, 2012 (3 months) Most of the system Others development is outsourced in 7％ Japan and the amount of the systems related costs is large. Commissions paid 12 ％ Systems Advertising expenses related costs China (inc.HK) 28 ％ Commun
Slide 17: Distribution of Consolidated Personnel by Regions and Jobs
Distribution of Consolidated Personnel by Regions and Jobs ■As of the end of September 2011 System development is mostly （Total number of employees: 727) outsourced in Japan and the number of technology related employees is small. Technology 4％ Others 4％ Marketing Operation 17 ％ 6％ 5％ China Japan (i
Slide 18: 3. Global Vision and Strategies
1. Management Policy and Analysis 2. Financial Results 3. Global Vision and Strategies 4. Data 17
Slide 19: 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 20: Concept of Shared Platform under the Global Vision
Concept of Shared Platform under the Global Vision China clients Japan clients U.S. clients Website Website Website Call center Call center Call center Develop locally Marketing Marketing Marketing Compliance Compliance Compliance Information service Information service Information service Standardi
Slide 21: Value Proposition by TradeStation
Value Proposition by TradeStation What Monex gains through the acquisition of TradeStation Top-ranked technology, Brand, and Development Resource China/HK Japan US/EU ■Adaption of TradeStation’s ■Adaption of TradeStation’s ■Expansion in US technology in China technology in Japan -Enhancing marketing
Slide 22: Measures for Revenue Improvement
Measures for Revenue Improvement ■Integration Progress and Roadmap ◆Progress on Business Integration 1.Linked bonuses to Monex Group’s stock prices for board members and some employees （2Q） 2.Global Management Committee (GMC) held weekly to manages progress based on the Road Map （2Q） 3.Started perso
Slide 23: 4. Data
1. Management Policy and Analysis 2. Financial Results 3. Global Vision and Strategies 4. Data 22
Slide 24: Quarterly Breakdown of Consolidated Income Statement
Financial Results：Quarterly Breakdown of Consolidated Income Statement （in million yen） FYE Mar. 31, 2010 FYE Mar. 31, 2011 FYE Mar. 31, 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Brokerage commissions( includes OSE-FX) 3,145 2,670 2,073 2,604 2,772 1,904 2,089 3,336 2,120 3,941 Stocks and ETFs 3,063 2,577
Slide 25: Quarterly Breakdown of Consolidated SG&A
Financial Results：Quarterly Breakdown of Consolidated SG&A （in million yen） FYE Mar. 31, 2010 FYE Mar. 31, 2011 FYE Mar. 31, 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Transaction-related expenses 979 1,044 948 1,247 1,267 1,118 1,260 1,360 1,224 2,439 Commissions paid 196 263 181 194 246 217 220 237 238 1,
Slide 26: Financial Results: Overseas Subsidiaries
Financial Results：Overseas Subsidiaries (Income Statement) (SG&A) （in million yen） 2Q of FYE Mar. 31, 2012 2Q of FYE Mar. 31, 2012 U.S. Hong Kong U.S. Hong Kong Brokerage commissions 1,710 80 Transaction-related expenses 1,222 30 Stocks and ETFs 590 80 Commissions paid 792 15 Options and Futures 1,1
Slide 27: Trends in Revenue
Trends in Revenue ■Net operating revenue and operating income ■ Profit margin(*1) and ROE trends Total trading value of individual investors in 3 major stock exchanges (Million yen) （Average per business day）（right） (Billion yen) 60.0% 4 8 .2% Profit margin Net operating 50.0% revenue (left） ROE Ope
Slide 28: Breakdown of Net Operating Revenues by Business
Breakdown of Net Operating Revenues by Business ■1H of FYE Mar. 31, 2012 （6 months： Apr. to Sep. 2011） （in million yen） Business category Revenue from “stock” Revenue from “flow” Total % Japan 1,988 Japan 3,651 Equities U.S. 566 U.S. 590 7,004 53% Hong Kong 40 Hong Kong 166 Japan 260 Derivatives U.S
Slide 29: Monex, Inc.: Equity Business / FX Business
Monex, Inc.: Equity Business / FX Business ■Equity business ■FX business ◆Market share of equity trading and equity trading values ◆Trading volume grew in spite of the leverage regulatory Revenue (million yen) Trading volume (billion yen) - Started an e-mail alert service “Monex Signal” for monitors
Slide 30: Monex, Inc. Mutual Fund Business / MAI: Alternative Investment Business
Monex, Inc. Mutual Fund Business / MAI: Alternative Investment Business ■Mutual Fund Business ■ Alternative Investment Business ◆ Trends in mutual fund sales and balance (Billion yen) FYE March 2011 FYE March 2012 ◆ New commodity fund is in preparation 1Q 2Q 3Q 4Q 1Q 2Q ・ Providing a new type of ris
Slide 31: About TradeStation
About TradeStation ■Summary of TradeStation ■Management Benchmark ◆ Comparison of DARTs(*1) among US listed brokerages -TD Ameritrade & E*Trade based on their disclosure 450 Jan.-Aug. 2011 400 - Monex+TradeStation & Charles Schwab based on their ◆ Company Overview 350 disclosure Jan.-Sep. 2011 • For
Slide 32: About TradeStation and US Business Strategies
About TradeStation and US Business Strategies ■Characteristics of TradeStation ■US business strategies ◆ TradeStation® (trading platform) ◆ Re-launch options business TradeStation® is an award winning direct-access trading TradeStation will launch OptionStation Pro along with platform which offers s
Slide 33: About Monex BOOM Group
About Monex BOOM Group ■ Business in HK, Asia’s global financial center ■Marketing strategy in Hong Kong ◆This Quarter: Leverage existing customer base Launched programs to (1) stimulate trades from existing margin- and active-traders; and (2) recruit new clients by ◆ Monex BOOM Group Overview lever
Slide 34: 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 end of Sep. 2011: company aim to provide return to its sha
Slide 35: Disclosure from 2Q
Disclosure from 2Q Monex Group, Inc. Japan U.S. China/Hong Kong (consolidated) Monex, Inc. TradeStation Monex BOOM Sec. Monthly - Operating revenues -Numbers of accounts - DARTs ― - Net operating revenues (Comprehensive, margin - Total client assets (in JP and EN) and FX), customers’ asset - Average
Slide 36: The Monex Group
The Monex Group Holding Company （As of October 26, 2011） [ China ] [ Japan ] [ US/EU ] Securities Company FX Business Monex International Limited Asia business base in Hong Kong TradeStation Group, Inc. Securities Company Holding company in US Monex FX, Inc. Specialized for FX trading Monex, Inc. Co
Monex Group — 1H FYE March 2012 Earnings Presentation on 6ix