Monex Group, Inc. · TSE:8698
Monex — Q1 FY2015 Earnings Presentation
35 slides from Monex's earnings presentation, Jul 31, 2014
Slide 1: Financial Results for 1Q of Fiscal Year Ending March 31, 2015
July 31, 2014 (TSE 1st Section: 8698) Financial Results for 1Q of Fiscal Year Ending March 31, 2015 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 conso
Slide 2: 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 3: Table of Contents
Table of Contents Our Business Principles p. 1 Table of Contents p. 2 I. WHAT IS MONEX GROUP? p. 3 - p. 9 II. Consolidated Performance Highlights p.10 - p.16 III. Segment Performance Highlights p.17 - p.25 IV. Mid- & Long-term Strategy “Global Vision” p.26 - p.28 V. Group Overview p.29 - p.34 2
Slide 4: I. What Is Monex Group?
I. WHAT IS MONEX GROUP? II. Consolidated Performance Highlights III. Segment Performance Highlights IV. Mid- & Long-term strategy “Global Vision” V. Group Overview 3
Slide 5: Online financial group with 1 million active accounts over the globe
Online financial group with 1 million active accounts over the globe - Globally offer financial services for institutional investors to retail investors - Online financial group with 1 million active accounts (total of Japan, the U.S. and H.K, as of June 30, 2014) - 12 business offices and locations
Slide 6: Globally invest capital and knowledge since the foundation
Globally invest capital and knowledge since the foundation Expand B2B business in addition to global expansion of B2C business 【B2C】 Offer online financial services for retail investors in Japan, the U.S. and China (H.K.) 【B2B】 Japan U.S. China (H.K.) FX B2B It has retail investors mainly preferring
Slide 7: Continuous investment for sustainable growth
Continuous investment for sustainable growth Establish our own business model with the mid- and long-term business strategy “Global Vision” in FYE Mar. 2012 – FYE Mar. 2018 (mil yen) Consolidated operating revenue (*) 60,000 50,000 Goal is to expand 40,000 customer base and revenue with the 30,000 t
Slide 8: Mid- & long-term strategy "Global Vision"
Mid- & long-term strategy “Global Vision” FYE Mar. 2012 FYE Mar. 2013 FYE Mar. 2014 FYE Mar. 2015 FYE Mar. 2016 FYE Mar. 2017 Completed project Ongoing project June 2011 Acquire TradeStation ●Nov. 2012 Upgraded U.S. equity service for Japanese customers ●Aug. 2013 Launched FX service, “Monex MT4”, f
Slide 9: Operating Revenue: 60% Japan, 40% the U.S.
Operating Revenue: 60% Japan, 40% the U.S. Globalization makes diversification of regional revenue base possible. Aim to establish business portfolio for revenue stabilization ◆Regional operating revenue & business diversification Others 2% Financial Revenue Equities 10% 29% FX 4% China Options 1% 5
Slide 10: SG&A and Employees: Globally control system related costs & personnel costs
Globally control system related costs & personnel costs for our strategy Internalize system and hire engineers as scheduled while controlling the costs globally ◆SG&A by local segment and by cost items ◆Employees by local segment and by professions Others Technology （※） 5% 4% System Marketing Commis
Slide 11: II. Consolidated Performance Highlights
I. WHAT IS MONEX GROUP? II. Consolidated Performance Highlights III. Segment Performance Highlights IV. Mid- & Long-term strategy “Global Vision” V. Group Overview 10
Slide 12: Business Highlights
Business Highlights Decrease in revenue due to weakness in the stock market in Japan and the U.S. ■ Business Highlights 1Q of FYE Mar. 2015 (3 months) 1Q of FYE Mar. 2015 QoQ YoY Total income: JPY 10,903 million -9.0% -43.1% Net income attributable to owners of the Company: JPY 562 million -48.7% -8
Slide 13: Financial Summary: 4Q FYE Mar. 2014 vs. 1Q FYE Mar. 2015
Financial Summary: 4Q of FYE Mar. 2014 vs. 1Q of FYE Mar. 2015 (3 months) Total revenue decreased by 9%; quarterly net income decreased by 49% (QoQ) and in all segments (mil yen, %) 4Q of FYE Mar. 2014 1Q of FYE Mar. 2015 Fluctuation (%) (Jan. to Mar. 2014) (Apr. to Jun. 2014） Total revenue 11,984 1
Slide 14: Major Increase/Decrease Factors of Revenue and Expenses (QoQ Comparison)
Major Increase/Decrease Factors of Revenue and Expenses (QoQ Comparison) Revenue decreased due to less transaction in equity and FX market (Japan and the U.S.) ■ Total revenue ■ Total expenses (Comparison with 4Q of FYE March 2014) (Comparison with 4Q of FYE March 2014) ◆Total revenue decreased due
Slide 15: Financial Summary: 1Q FYE Mar. 2014 vs. 1Q FYE Mar. 2015
Financial Summary: 1Q of FYE Mar. 2014 vs. 1Q of FYE Mar. 2015 (3 months) Total revenue decreased by 43%; total expenses decreased by 7%; quarterly net income decreased by 89% in all segments (mil yen, %) 1Q of FYE Mar. 2014 1Q of FYE Mar. 2015 Fluctuation(%) (Apr. 2013 to Jun. 2013） (Apr. 2014 to J
Slide 16: Major Increase/Decrease Factors of Revenue and Expenses (YoY Comparison)
Major Increase/Decrease Factors of Revenue and Expenses (YoY Comparison) Revenue decreased mainly due to less activities in equity and FX market (Japan and the U.S.) ■ Total revenue (Comparison with 1Q of FYE March 2014) ■ Total expenses (Comparison with 1Q of FYE March 2014) ◆Total revenue decrease
Slide 17: Summary of Statement of Financial Position
Summary of Statement of Financial Position Established solid financial position with non-current assets being smaller than net capital and sufficient cash and investments ◆ Summary of consolidated statement of financial position as of June 30, 2014 Assets Liabilities (*1) Non-current type assets JPY
Slide 18: III. Segment Performance Highlights
I. WHAT IS MONEX GROUP? II. Consolidated Performance Highlights III. Segment Performance Highlights IV. Mid- & Long-term strategy “Global Vision” V. Group Overview 17
Slide 19: Segment Performance Highlights Japan Segment (1)
Segment Performance Highlights Japan Segment (1) Stock brokerage commissions share and margin balance share remains stable; planning for margin balance share growth ◆Stock brokerage commissions share of 5 major ◆Margin balance share of 5 major online brokers online brokers for the past 10 years (FYE
Slide 20: Segment Performance Highlights Japan Segment (2)
Segment Performance Highlights Japan Segment (2) Introduction of competitive trading tool helps acquire active traders and revenue share (1) Maintain revenue share Keep supporting investors’ asset building with long-diversified investment method - Mutual funds : Substantially free commission for pur
Slide 21: Segment Performance Highlights U.S. Segment (1)
Segment Performance Highlights U.S. Segment (1) Active traders trade less due to historically low volatility ◆ Quarterly EBITDA ◆DARTs (excluding FX)(*) & VIX (mil USD) 5 120,000 DARTs (left) 40 100,000 VIX (right) 30 80,000 0 60,000 20 40,000 10 -5 20,000 1Q of FYE 2Q of FYE 3Q of FYE 4Q of FYE 1Q
Slide 22: Segment Performance Highlights U.S. Segment (2)
Segment Performance Highlights U.S. Segment (2) Customer assets and accounts, the sources of financial income, have increased; we expect higher interest income as interest rate rises ■Net interest income composed of : (A) interest income from investment management and (B) net interest income from lo
Slide 23: Segment Performance Highlights U.S. Segment (3)
Segment Performance Highlights U.S. Segment (3) B2B business got off to a flying start; award-winning TradeStation 9.5 launched in Korea ■Progress of B2B business ■ Other revenue streams Korea Option Flat Fee - TradeStation 9.5 launched in Korea on June 2, 2014, through - Commission structure for cu
Slide 24: Segment Performance Highlights U.S. Segment (4) & Global FX
Segment Performance Highlights U.S. Segment (4) & Global FX Ensure high-level commission revenue per account owing to active traders, TradeStation’s main customers ◆DARTs share among 5 U.S. major online brokers ◆ Commission revenue per account among 5 U.S. major online brokers TradeStation (USD) （*）
Slide 25: Segment Performance Highlight China Segment
Segment Performance Highlight China Segment Monex BOOM group in black, but China segment in red due to initial investment for customer acquisition in PRC ■ Total operating revenue & the amount equivalent to ■Founded joint venture in mainland China operating revenue of Monex BOOM group - Founded join
Slide 26: Performance Highlights Corporate activities
Performance Highlights Corporate activities Enhance corporate value; establish business base by reaching the world standard, offering new value and respecting diversity ◆Majority of the board is outside directors, ◆Capital & business alliance with The Shizuoka strengthening corporate governance Bank
Slide 27: IV. Mid- & Long-term Strategy "Global Vision"
I. WHAT IS MONEX GROUP? II. Consolidated Performance Highlights III. Segment Performance Highlights IV. Mid- & Long-term strategy “Global Vision” V. Group Overview 26
Slide 28: Global Vision: Monex's mid- and long-term business strategy
Global Vision Monex’s mid- and long-term business strategy Globally pursues “mid- and long-term revenue growth” and “fixed-type cost reduction” “Global Vision” is a mid- and long-term business strategy which Monex Group, Inc. has promoted since FYE March 2012 with an aim towards “Globalization” and
Slide 29: Global Vision: revenue growth and fixed-type cost reduction
Global Vision ■ Mid- and long-term revenue growth - Differentiated products & services among group companies are developed and offered to retail investors - Diversify revenue sources by expansion of B2B business utilizing Monex’s own internalized system - Diversify revenue sources by geographical ex
Slide 30: V. Group Overview
I. WHAT IS MONEX GROUP? II. Consolidated Performance Highlights III. Segment Performance Highlights IV. Mid- & Long-term strategy “Global Vision” V. Group Overview 29
Slide 31: The Monex Group
The Monex Group (As of June 30, 2014) Listed Holding Company [Japan] [U.S./Europe] [China] Online Securities & FX Company Monex International Limited Holding Company in Hong Kong TradeStation Group, Inc. Holding Company in the U.S. Online Securities Company Monex, Inc. Online Securities Company Comp
Slide 32: Corporate governance and disclosure
Corporate governance and disclosure Global-standard organization and financial disclosure based on IFRSs ■Company with committees - Adopted company with committees organizational structure in June 2013 - 6 directors out of 11 are outside and independent directors - Most of the outside directors have
Slide 33: Introduction of Monex Group and main subsidiary companies
Introduction of Monex Group and main subsidiary companies ■ Monex Group, Inc. (Tokyo, Japan) TSE 1st Sec. Code: 8698 ■ TradeStation Group (HQ in Florida, the U.S.) - Chairman, Representative Executive Officer & CEO: Oki Matsumoto Online securities group with award winning trading technology developm
Slide 34: History of Monex Group
History of Monex Group Japan U.S. China (Hong Kong) 1982 - TradeStation Technologies, Inc. formed as Omega Research, Inc. 1997 - TradeStation stock listed on NASDAQ - Boom Securities (H.K.) Limited was founded (now Monex Boom Securities (H.K.) Limited, being the first in Asia Pacific to launch Inter
Slide 35: Investors' Guide
Investors’ Guide ■Efforts to pursue shareholders’ return by ■Shareholders & indicators per share improvement of ROE ◆ Our basic policy for shareholders’ return ◆Major shareholders and shareholder breakdown (as of March 31, 2014) Securities companies 3.9% To provide return to shareholders based upon