Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2013/14 Earnings Presentation
35 slides from Nomura's earnings presentation, July 2013
Slide 1: First quarter results overview
I will now give you an overview of our financial results for the first quarter of the year ending March 2014 using the document titled “Consolidated Results of Operations”. Please turn to page three.
Slide 2: Outline
Outline NOMURA Presentation Financial Supplement Executive summary (p. 3) Consolidated balance sheet (p. 17) Overview of results (p. 4) Value at risk (p. 18) Business segment results (p. 5) Consolidated financial highlights (p. 19) Retail (p. 6-7) Consolidated income (p. 20) Asset Management (p. 8-9
Slide 3: Executive summary
For the first quarter, we reported a significant increase in both revenue and income compared to the same period last year, driven by a strong contribution from our Japan businesses, particularly Retail. First quarter net revenue was 431.3 billion yen, income before income taxes was 113.2 billion ye
Slide 4: Overview of results
For now, please turn to page four for an overview of our results. As I said, because we booked a one-off gain last quarter on the secondary offering of Nomura Real Estate Holdings shares and as the company has been deconsolidated from this quarter, net revenue and income before income taxes declined
Slide 5: Business segment results
Please turn to page five for our business segment results. As shown at the bottom of the page, we booked full career retirement related expenses of 9 billion yen during the first quarter. To date our internal rules stipulated that when a person left the firm voluntarily they would forfeit stock opti
Slide 6: Retail results
Please turn to page six for our business segment results. Retail net revenue was 166.3 billion yen, up 20 percent from last quarter. Income before income taxes grew 42 percent to 81.1 billion yen, representing the best quarter since we started disclosing quarterly results in the year ended March 200
Slide 7: Retail net asset inflows and recurring revenue
The graph on the bottom left of page seven shows net asset inflows of 188.1 billion yen and investment trust inflows of 262.1 billion yen, demonstrating solid net inflows amid the market rally when some investors sold to lock in profits. The graph on the bottom right shows recurring revenue, a key p
Slide 8: Asset Management results
Please turn to pages eight and nine for Asset Management. Net revenue in Asset Management increased 10 percent quarter on quarter to 20.2 billion yen. This represents our best quarter since March 2008 driven by dividend income and an expansion in assets under management. Income before income taxes g
Slide 9: Asset Management: investment trust and advisory businesses
investment advisory businesses Assets under management (gross)! by business Asset Management: Solid quarter for both investment trust and NOMURA Nomura Asset Management share of public investment trust market? (trillions of yen) m™ Investment trust business Investment advisory business 40.0 36.1 36.
Slide 10: Wholesale overview
Please turn to page 10 for an overview of Wholesale. Net revenue in Wholesale was 194.6 billion yen, in line with the previous quarter as Equities and Investment Banking offset a slowdown in Fixed Income. Expenses increased due to a rise in commissions and floor brokerage from higher trading volumes
Slide 11: Global Markets results
Please turn to page 11 for an overview of Global Markets results. Net revenue in Global Markets was 165.3 billion yen. Revenues were resilient as client revenues expanded in all regions despite heightened volatility in the market. Fixed Income booked net revenue of 97.6 billion yen. As you can see o
Slide 12: Investment Banking results
Please turn to page 12 for Investment Banking. Net revenue in Investment Banking rose 23 percent quarter on quarter to 29.3 billion yen in line with the third quarter of last fiscal year, driven by robust performance in Japan-related businesses. In Japan, revenues were at the highest level in nine q
Slide 13: Non-interest expenses
Please turn to page 13 for an overview of expenses. Non-interest expenses declined by 34 percent to 318.1 billion yen due to the deconsolidation of Nomura Real Estate Holdings. “Other” expenses, which previously included cost of goods sold at Nomura Real Estate Holdings, declined by 77 percent this
Slide 14: Robust financial position
Please turn to page 14 for an update on our balance sheet. Total assets at the end of June were 4.2 trillion yen, gross leverage was 17.7 times, and net leverage was 10.6 times. On a Basel 3 basis, our Tier 1 ratio and Tier 1 common ratio were both 11.9 percent. The 10 percent figure shown on the to
Slide 15: Funding and liquidity
On page 15, there are no significant changes to our funding and liquidity from March so I will leave it for you to look through later. That concludes today’s presentation. 15
Slide 16: Financial Supplement
Financial Supplement NOMURA
Slide 17: Consolidated balance sheet
1 (billions of yen) Assets Total cash and cash deposits Total loans and receivables Total collateralized agreements Total trading assets' and private equity investments Total other assets Total assets Including securities pledged as collateral, Consolidated balance sheet 1,653] 2476 524 | | 2202 428
Slide 18: Value at risk
Value at risk NOMURA = Definition = From April 1, 2013 to June 30, 2013 (billions of yen) — 99% confidence level — Maximum: 7.9 — 1-day time horizon for outstanding portfolio — Minimum: 4.5 — Inter-product price fluctuations considered — Average: 6.1 (billions of yen) 1.4 1.2 1.0 24 1.3 2.6 Equity I
Slide 19: Consolidated financial highlights
Consolidated financial highlights Quarter NOMURA (yen) (1) Quarterly ROE is calculated using annualized year-to-date net income. Full year (billions of yen) 120 107.2 100 mm Net income 80 60 ROE (%) 40 11.6 20 06% 0 Net revenue 1,535.9 1,813.6 Income before income taxes 85.0 237.7 Net income attribu
Slide 20: Consolidated income
Consolidated income (billions of yen) Full year Quarter NOMURA Revenue Commissions 347.1 359.1 77.4 72.3 83.7 125.7 157.6 Fees from investment banking 59.6 62.4 10.4 17.1 13.0 21.8 25.4 Asset management and portfolio service fees 144.3 141.0 33.8 33.4 35.0 38.8 42.4 Net gain on trading 272.6 368.0 8
Slide 21: Main revenue items
Main revenue items (billions of yen) Full year Quarter NOMURA Stock brokerage commissions (retail) 36.0 51.8 74 7.0 10.7 26.6 42.5 Stock brokerage commissions (other) 132.7 112.9 28.4 25.3 27.2 32.0 37.7 Other brokerage commissions 9.4 11.7 23 26 3.0 3.8 5.3 Commissions for distnbution of 1366 160.1
Slide 22: Income before income taxes by segment and region
Consolidated results: Income (loss) before income taxes by segment and region NOA\URA Adjustment of consolidated results and segment results: Income (loss) before income taxes (billions of yen) “Fyaornn2 Fy20%273 ry2on2s FY2019/14 Sn 0 0 °° Retail 63.1 100.6 12.2 11.0 20.3 57.2 81.1 Asset Management
Slide 23: Segment Other
Segment “Other” hedging transactions Corporate items' Others! Net gain (loss) related to economic Income (Loss) before income taxes Income (loss) before income taxes NOMURA Realized gain(loss) on investments in equity securities held for operating purposes Equity in earnings of affiliates Full year
Slide 24: Retail related data (1)
Retail related data (1) NOMURA Full year Quarter 2012/13 (ettlons of yen) Praovim2 Fvaotatta er ale a Commissions 201.5 225.9 44.1 41.7 55.7 110.3 30.8% 150.0% Sales credit 59.0 80.9 15.1 16.8 20.3 28.6 29.7 3.7% 96.4% Fees from investment banking and other 38.2 36.8 10.3 9.4 66 10.4 9.8 5.8% 45% In
Slide 25: Retail related data (2)
Retail related data (2) NOMURA Stock brokerage commissions and commissions for distribution of investment trusts Full year Quarter (billions of yen) (billions of yen) 180 70 150 60 50 "Stock brokerage 120 ‘commissions 40 920 = Commissions for 30 distribution of investment 60 trusts 20 30 10 0 0 : fo
Slide 26: Retail related data (3)
Retail related data (3) Retail client assets (trillions of yen) 100 = Other 83.8 87.7 Overseas mutualfunds ©9720 68.2 67.3 ined "Bond investmenttrusts go = Stock investment trusts 40 = Domestic bonds "Foreign currency bonds 99 Equities i) Equities 37.2 34.4 33.4 38.0 46.7 50.5 Foreign currency bonds
Slide 27: Retail related data (4)
Retail related data (4) NOMURA Retail client assets: Net asset inflow! Full year Quarter (billions of yen) (billions of yen) 4,000 900 647 700 2,400 500 2,000 360 300 4,035 188 » o- = 0 “10 -100 —FY2013/14 “Preonine aor: 100 QQ 1 (1) Net asset inflow = asset inflow — asset outflow. Retail lent asset
Slide 28: Retail related data (5)
Retail related data (5) Number of accounts NOMURA (Thousands) cFyaot2 = Fyzonaig 20194 Accounts with balance 4,985 4,997 5,003 5,006 5,025 5,069 Equity holding accounts 2,706 2,714 2,731 2,710 2,717 2,727 Nomura Home Trade / Net & Call accounts 3,773 3,796 3,823 3,846 3,747 3,822 New Individual acco
Slide 29: Asset Management related data (1)
(bilions of yen) 1 090 Yor Penne rate 100 QQ At Net revenue 65.8 68.9 16.4 15.4 18.8 18.3 20.2 10.3% 22.9% Non-interest expenses 45.3 47.8 11.0 10.9 11.5 14.4 13.5 6.2% 22.0% Income before income taxes 20.5 21.2 5.4 46 7.3 3.9 67 70.6% 24.6% Total assets under management Asset Management related dat
Slide 30: Asset Management related data (2)
Asset Management related data (2) NOMURA Assets under management (gross) by business’ Asset inflows/outflows by business* Full year Quarter ttons of yen) vig vias vane (ions ot yen te (Mar.12 Jun.12 Sep.12 Dec.12 Mar 13 Jum 13 a Investment trust 230 215 21.7 240 26.5 26.4 business pee tosg BT SH SSD
Slide 31: Wholesale related data (1)
Wholesale related data (1) NOMURA Wholesale Net revenue 555.0 644: 121.9 137.1 189.0 196.9 194.6 1.2% 59.7% Non-interest expenses 592.7 573.2 130.4 136.9 144.6 161.3 169.4 5.0% 29.9% Income (Loss) before income taxes 37.7 71.7 86 0.2 44.4 35.7 25.2 -29.2% - Breakdown of Wholesale revenues tone tye a
Slide 32: Wholesale related data (2)
Wholesale related data (2) Private equity related investments (billions of yen) 400 300 = Terra Firma 221.3 mAsia 200 ™ Europe (excluding Terra Firma) = Japan 100 i) Japan 65.5 Europe (excluding Terra Firma) 26.8 Asia 1.9 Sub Total 94.1 Terra Firma 127.2 Total 221.3 206.0 206.4 103.1 104.6 59.6 58.9
Slide 33: Number of employees
Number of employees (1), Excludes employees of private equity investee companies (2) Includes Powai office in India. Japan (excluding FA)" 19,598 20,197 20,039 19,877 14,123 14,654 Japan (FA) 2,011 2,014 1,981 1,951 1,907 1,914 Europe 4,014 3,975 3,940 3,747 3,618 3,485 Americas 2,420 2,423, 2,425 2
Slide 34: Disclaimer
Disclaimer NOMURA ® 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 35: Nomura Holdings, Inc.
NOMURA Nomura Holdings, Inc. www.nomura.com