Nomura Holdings, Inc. · TSE:8604
Nomura — FY2016/17 Earnings Presentation
34 slides from Nomura's earnings presentation, April 2017
Slide 1: Consolidated Results of Operations overview
I will now give you an overview of our results for the year ended March 2017 using the document titled “Consolidated Results of Operations”. Please turn to page two.
Slide 2: Outline
LAL Outline Presentation NOMURA Financial Supplement Executive summary (p. 2-3) Overview of results (p. 4) Business segment results (p. 5) Retail (p. 6-7) Asset Management (p. 8-9) Wholesale (p. 10-12) Non-interest expenses (p. 13) Robust financial position (p. 14) Funding and liquidity (p. 15) Cons
Slide 3: Full year highlights
First, the full year highlights. During the first half of the year, client activity eased off ahead of monetary policy announcements and political events. But following the US presidential election, investors returned to taking on risk and the fixed income market saw brisk activity as investors reba
Slide 4: Fourth quarter results overview
Net revenue declined 5 percent quarter on quarter to 349.1 billion yen and income before income taxes declined 14 percent to 82.3 billion yen. Net income was 61.3 billion yen, down 13 percent from last quarter. The graph on the right shows we had an extremely strong third quarter. Although fourth qu
Slide 5: Highlights
Highlights (billions of yen, except EPS and ROE) FY2016/17 4Q QoQ YoY Full year YoY Net revenue 349.1 | 5% +25% 1,403.2 +1% Non-interest expenses 266.8 | -2% 9% 1,080.4 12% Income before income taxes 82.3 | -14% - 322.8 +95% 1 Net income" 61.3 | -13% : 239.6 +82% 1 EPS? 17.00 | 13% : Y65.65 +85% ROE
Slide 6: Net revenue and income before income taxes
Net revenue and income (loss) before income taxes (billions of yen) Netrevenue Retail FY2016/17 a ve FY2016/17 % 4Q Q0Q YoY Full YoY 103.2 +2% 421% 374.4 14% aan (loss 2.8 . : 66 ‘ Income (loss) before income taxes 82.3 14% - 322.8 +95% “Additional information on “Other” (4Q) ™ Gain on changes to ow
Slide 7: Retail results
For the full year, net revenue was 374.4 billion yen and income before income taxes was 74.8 billion yen, down 14 percent and 41 percent respectively. The main reason for the declines is because retail investors went into wait-and-see mode during the first half of the year due to market uncertainty.
Slide 8: Retail investment trusts and recurring revenue
As shown on the top of page seven, investment trusts and discretionary investments both booked net inflows and annualized recurring revenue increased to 78.6 billion yen. Please turn to page eight. 7
Slide 9: Asset Management results
Assets under management in Asset Management climbed to a record 44.4 trillion yen at the end of March, driven by inflows into ETFs, privately placed investment trusts, and the investment advisory business. Full year net revenue increased 4 percent to 99.4 billion yen and we worked to contain costs.
Slide 10: Asset Management AUM and ETFs
As you can see on the bottom right, we have steadily grown assets under management in ETFs by expanding our product offering in line with investor demand. Assets under management in ETFs exceed 10 trillion yen at the end of March and our share of the ETF market in Japan was an industry-leading 45 pe
Slide 11: Wholesale results
Full year net revenue was 739.3 billion yen, up 3 percent year on year. Income before income taxes jumped more than ten-fold to 161.4 billion yen. As I said earlier, the gain in income before income taxes was the result of significantly lowering our cost base while at the same time growing revenues.
Slide 12: Global Markets
Turning now to page 11, Global Markets fourth quarter net revenue was 143.5 billion yen. Fixed Income revenues declined 26 percent to 86.5 billion yen. By product, Emerging Markets and G10 FX slowed from a strong third quarter, and by region the Americas, AEJ and Japan slowed, as shown on the right
Slide 13: Investment Banking
As shown on the top left, net revenue increased 14 percent to 27.7 billion yen. Gross revenue before allocations to other divisions was 50.2 billion yen. Revenues grew both in Japan and overseas, giving the best quarter for the year. In Japan, ECM revenues increased as we won mandates for deals such
Slide 14: Non-interest expenses
Full year Group expenses declined 12 percent, or approximately 150 billion yen, to 1,080.4 billion yen. Compensation and benefits declined 14 percent as a result of cost reductions in the international business and a focus on pay for performance. Non-personnel expenses also declined by 11 percent du
Slide 15: Robust financial position
As you can see on page 14, we maintain a robust financial position. At the end of March, our Tier 1 capital ratio was 19.2 percent and our CET 1 capital ratio was 18.2 percent, both of which increased further from December. This is because the decline in risk assets, which represent the denominator
Slide 16: Funding and liquidity
Funding and liquidity NOMURA Balance sheet structure Balance sheet (As of Mar 2017) Highly liquid, healthy balance sheet structure -79% of assets are highly liquid trading and related assets that are marked-to-market and matched to trading and related liabilities through repos etc. (regionally and b
Slide 17: Financial Supplement
Financial Supplement
Slide 18: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits Liabilities Short-term borrowings Total loans and receivables Total payables and deposits Total collateralized financing Total collateralized agreements Trading liabilities Other liabilities Total trading assets" and private equity investments Lo
Slide 19: Value at risk
= Definition = From April 1, 2016, to March 31, 2017 (billions of yen) — 99% confidence level — Maximum: 6.7 — 1-day time horizon for outstanding portfolio — Minimum: — 2.7 — Inter-product price fluctuations considered — Average: 4.3 (billions of yen) Eee ee ee EEE ES eee 0.9 0.7 0.9 07 0.9 1.4 0.7
Slide 20: Consolidated financial highlights
1 Full year Quarter (billions of yen) (billions of " 8. 100 " 8.1% 8.6% 7% 300 o 9% . : 7.0 == Net income 80 (loss)attrbutable to Nomura Holdings, 60 Inc. ("NHI") 200 4.9% 6% shareholders ° 40 ROE(%) 100 3% 20 0 0 0% -20 Net revenue 1,395.7 1,403.2 Income (loss) before income taxes 165.2 322.8 12.3
Slide 21: Consolidated income
(billions of yen) Full year Quarter Revenue Commissions 432.0 327.1 87.8 76.3 74.6 86.3 90.0 Fees from investment banking 118.3 92.6 29.0 17.3 23.4 23.7 28.2 Asset management and portfolio service fees 229.0 216.5 53.1 52.6 52.1 55.1 56.6 Net gain on trading 354.0 475.6 61.5 140.1 118.8 108.4 108.3
Slide 22: Main revenue items
Full year Quarter Pacer Przrene Fran ga 400 10 QQ AQ Stock brokerage commissions 275.0 210.0 61.3 48.4 47.0 57.5 57.1 Other brokerage commissions 23.3 15.1 5.8 43 3.4 43 3.0 Commissions for distribution of investment trusts. 89.5 75.1 12.4 15.8 17.6 19.1 22.6 Other 44.2 26.9 8.3 7.7 66 5.4 7.3 Total
Slide 23: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter (billions of yen) _FY2015/16- Retail 127.6 74.8 12.2 87 14.4 25.9 25.8 Asset Management 36.7 42.3 58 12.2 74 14.0 8.7 Wholesale 15.4 161.4 -22.8 46.6 39.3 47.4 28.1 Three business segments tot
Slide 24: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 40.0 30.0 20.0 37.6 -10.0 3.8 -20.0 -30.0 16.1 13.4 10.0 6.1 a | 58 00 = _ Net gain (loss) related to economic FY2015/16 rane (rrr) 400 1 QA 6.4 7.3 85 Ne one actone 120 44 15.9 08 Realized ood fh onontng puveeee, 02 14 0.0 0
Slide 25: Retail related data
1. Full year Quarter 42 QQ ‘Commissions 2203 © 174.8 38.9 38.4 38.9 474 47.5 08% 22.1% Of which, brol commission 78.9 62.8 144 18.4 124 198 17.6 1.2% == 21.8% Of which, commissions for distribution of investment trusts 93.6 82.3 143 176 20.0 21.4 236 © 120% 65.5% Sales credit 86.4 85.3, 175 186 19.9
Slide 26: Retail client assets
Retail client assets (trillions of yen) 120 = Other 100 = Foreign investment trusts = Bond investment trusts = Stock investment trusts = Domestic bonds =Foreign currency bonds 20 Equities i) Equities Foreign currency bonds Domestic bonds* Stock investment trusts Bond investment trusts Foreign invest
Slide 27: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter (billions of yen) (billions of yen) 1,000 1,000 500 500 319 48 0 = 0 — a — 43 “43 -308 243 -338 -500 -500 —FY2015/16 4. Cash and securities inflows minus outflows, excluding regional financial institutions. 26 26
Slide 28: Number of accounts
Number of accounts (messanes) Mar Mar Mar un Sep Dee Mar Accounts with balance 5,389 5,363 5,389 5,390 5,384 5,383 5,363 Equity holding accounts 2,827 2,836 2,827 2,842 2,856 2,839 2,836 Nomura Home Trade / Net & Call accounts 4412 4,528 4412 4,443 4,470 4,497 4,528 New Individual accounts / IT shar
Slide 29: Asset Management related data
1, 2 Full year Quarter Net revenue 95.4 99.4 20.3 25.9 21.3 28.9 23.3 19.4% 14.8% Non-interest expenses 58.7 57.1 14.5 13.7 13.8 14.9 14.6 1.9% 0.7% Income before income taxes 36.7 42.3 5.8 12.2 74 14.0 8.7 38.0% 50.1% Assets under management by company Nomura Asset Management 43.5 47.4 43.5 40.3 41
Slide 30: Asset inflows/outflows by business
Asset inflows/outflows by business! Full year Quarter Investment trusts business 2,717 1,590 412 423 6 1,038 969 of which ETFs 2,339 1,934 838 -24 477 279 1,203 Investment advisory business 2,038 584 92 -169 344 95 315 Net asset inflow 4,755 2,174 320 -§92 349 1,132 1,284 Domestic public investment
Slide 31: Wholesale related data
Full year Quarter (billions of yen) Praise FY2016/17 Me 400 10 2 QQ Net revenue 720.3 739.3 136.2 190.9 179.9 197.3 171.2 13.2% Non-interest expenses 704.9 577.8 159.0 144.3 140.6 149.9 143.1 4.5% 10.1% Income (loss) before income taxes 15.4 161.4 22.8 46.6 39.3 474 28.1 40.7% - Breakdown of Wholesa
Slide 32: Number of employees
1 | Mar Jun Sep Dee Mar Japan 16,083 16,227 16,083 16,792 16,543 16,450 16,227 Europe 3,424 3,026 3,424 3,170 3,147, 3,063 3,026 Americas 2,503 2,314 2,503 2,481 2,297 2,279 2,314 Asia and Oceania’ 6,855 6,619 6,855 6,769 6,667 6,606 6,619 Total 28,865 28,186 28,865 29,212 28,654 28,398 28,186 Inclu
Slide 33: Disclaimer
LM 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. Offers
Slide 34: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com