Monex Group, Inc. · TSE:8698
Monex — 1H FYE03/2003 Earnings Presentation
28 slides from Monex's earnings presentation, Oct 17, 2002
Slide 1: FYE03/2003 1H Financial Results
FYE03/2003 1H Financial Results October 17, 2002 Forward-looking Statements Statements made at this presentation and in this material include forward-looking statements that are based on our current expectations, assumptions, estimates and projections about our business and the industry. These forwa
Slide 2: Financial Results; Other Business; Newly introduced Services and our Business Model
Ⅰ. Financial Results Ⅱ. Other Business Ⅲ. Newly introduced Services and our Business Model 1
Slide 3: FYE 03/2003 1H Financial Summary
FYE 03/2003 1H Financial Summary （unit： ：Yen million） ） FYE 03/2002 FYE 03/2003 change 1H (Apr-Seo) 1H (Apr-Seo) Operating Revenue 1,707 1,452 -14.9% (Commission Revenue) 1,679 1,425 -15.1% Operating expense 2,156 2,285 6.0% Operating loss 449 833 - Ordinary loss 416 828 - Net loss 468 859 - FYE 03/
Slide 4: FYE 03/2003 2Q Financial Summary (2)
FYE 03/2003 2Q Financial Summary (2) Quarter to quarter （unit： ： Yen million） ） FYE 03/2003 FYE 03/2003 Change 1Q(Apr-Jun) 2Q(Jul-Sep) Operating Revenue 811 641 -21.0% (Commission Revenue) 793 631 -20.5% Operating expense 1,148 1,136 -1.0% Operating loss 337 495 - Ordinary loss 334 493 - Net loss 34
Slide 5: Lease Outstanding
Lease Outstanding ￥ Million) (￥ 4,000 Margin Trading/Stock Lending related initial 3,500 investment(estimate) Existing Lease Outstanding 3,000 The graph is based on existing lease 2,500 and future capex related to business development and replacement are 2,000 not included. 1,500 1,000 500 0 0 1 2 3
Slide 6: Operating Revenue vs. SGA
Operating Revenue vs. SGA (Yen million） 1,182 1,217 1,142 1,148 1,136 1,015 974 923 891 848 942 Operating 850 Revenue 764 779 794 811 748 752 647 641 SGA FYE 03/2001 2Q 3Q 4Q 2Q 3Q 4Q FYE 03/2003 2Q 1Q FYE 03/2002 1Q 1Q Operating Revenue Breakdown SGA Breakdown 100%＝ ＝ 641(Yen million） ） ＝ 1,136（ 10
Slide 7: Break-Even Analysis – Spreadsheet
Break- Break-Even Analysis – Spreadsheet 1. Divide major items of SG & A into 2 categories (1) Variable (trade volume or number of accounts base) and (2) Fixed. After excluding one-time expenses, Outsourcing Expenses are divided into three categories. (unit: million yen） FYE March 2001 FYE March 200
Slide 8: Break-Even Analysis – Number of Trade
Break- Break-Even Analysis – Number of Trade 2,500 1,000 867 FYE 2003/3 2Q 822 791 788 2,000 753 800 ■ Costs are maintained relatively Number of trades(000) 612 788 601 low; no material 577 Costs (\million) 564 1,500 600 changes in break- 441 465 461 482 even number of trade. 441 414 518 369 378 372
Slide 9: Break-Even Analysis – Executed Deal Ratio
Break- Break-Even Analysis – Executed Deal Ratio 20% 18% B/E executed deal ratio is gradually declined. 16% 14% 12% Affe cte d by the me rge r of 10% Saison Se curitie s Co., Ltd. 8% 6% 4% 2% （ B/E executed deal ratio） ） =（ （ B/E number of executed deal） ） /（ （ Number of accounts） ） （ Actual execute
Slide 10: TSE Trading Volume vs Monex Trading Volume
TSE Trading Volume ｖｓ Monex Trading Volume （ Index： ： April 2000＝ ＝ 100） ） 600 Oct 00 - Mar 01 Apr-Sep 01 Oct 01 - Mar02 Apr-Sep 02 9.0% Apr-Sep 00 Margin Margin Margin 21% Margin 500 29% 36% 43% Cash ？ ？ 7.5% Cash Cash 57% Cash 64% 71% 79% 400 6.0% TradingVolume Spot vs. Margin at Online trading Sh
Slide 11: Stock Price
Stock Price Monex vs. Nikkei 225 average Index (based on August 4, 2000) 200 Monex share price (closing price of Aug. 4, 2000=100) 180 Nikkei 225 average index （ closing price of Aug. 4, 2000＝ ＝ 100） ） 160 Monex IPO Price （closing （ ＝ 100） price of Aug. 4, 2000＝ ） 140 120 100 80 60 Price movement fr
Slide 12: Other Business
Ⅰ. Financial Results Ⅱ. Other Business Ⅲ. Newly introduced Services and our Business Model 11
Slide 13: Number of customers' accounts
A 0 50,000 100,000 150,000 200,000 pr - 250,000 M 00 ay -0 Ju 0 n- 00 Ju l- Number of accounts A 00 ug -0 Se 0 p- O 00 ct - N 00 ov - Number of customers’ D 00 ec -0 Ja 0 n- 0 Fe 1 b- M 01 ar - A 01 pr - customers’ accounts M 01 ay -0 Ju 1 n- 01 Ju l- A 01 ug -0 Se 1 p- O 01 ct - N 01 ov - D 01 ec -
Slide 14: Account acquiring costs
Account acquiring costs Newly acquired accounts Two major initial costs 25,000 20,000 (1) System related costs 15,000 (2) Account acquiring costs 10,000 Higher return on equity may 5,000 be materialized by 0 maintaining (2) AACosts low FYE 03/2003 Advertising costs (Yen 000) ・AA costs have been kept
Slide 15: Customers' assets in Custody
Customers’ Customers’ assets in Custody \15, 000 Nikkei 225 Average Index \12, 000 \9, 000 447.0 458.9 418.4 428.8 402.1 (Yen billion) 374.5 76.1 72.0 64.4 64.2 63.4 31.4 31.9 291.9 31.0 66.0 31.8 30.3 28.7 55.5 13.0 318.5 334.1 349.0 326.6 274.5 303.1 222.6 MRF and IT Mar/01 Jun/01 Sep/01 Dec/01 Ma
Slide 16: Investment Trust Business
Investment Trust Business Investment Trusts Outstanding and Number of Order/Day 100 983 969 949 1,000 90 889 879 839 833 80 792 788 794 760 773 Outstanding (yen billion) 717 800 70 646 643 60 Order/Day 600 50 470 421 405 40 31 30.5 30 29.7 30.2 30.3 29.7 30.4 31.4 31.6 32.9 31.9 32.0 32.0 31.8 400 3
Slide 17: Underwriting business
Underwriting business Underwriting: number of issues Underwriting fee (Yen million) •We underwrote the followings (share) in 2Q: 4Q 167 4Q 36 141 COMPUTER WAVE 3Q 3Q INC. (5%) 9 2Q 2Q RENTRAK JAPAN CO., 1Q 67 LTD (4%) 7 16 1Q NIPPON HERALD 11 16 FILMS, INC (2%) 15 28 33 6 19 Soft front (3%) 5 5 28 1
Slide 18: Newly introduced Services and our Business Model
Ⅰ. Financial Results Ⅱ. Other Business Ⅲ. Newly introduced Services and our Business Model 17
Slide 19: Business Model – Structural Changes would support our model
Business Model – Structural Changes would support our model 【Real Network】】 【Partnership】】 ・ATM / CD ・Joint Marketing ・CMA （Monex 《Saison》 》Card）） with Credit Saison w/cash card+credit card function 【Asset Gathering】 】 ・Monthly fixed purchase plan 【Government: Structural Change】 】 ・Account Aggregati
Slide 20: Monex: unique Services
Monex: unique Services 【Cash management account】 】 Credit Card settlement through MRF account at Monex. The nation wide ATM network of 25,000 Postal Offices The instant cash settlement from banks on the website. 【Information Service】 】 Professional–use real time information system and various report
Slide 21: Stock Lending – a new tool to enhance return on clients' portfolio
Stock Lending－ Lending－ a new tool to enhance return on clients’ portfolio Securities Lending: Monex customers could enhance their portfolio return by lending their own stock portfolio to Securities Lending: Monex customers could enhance their portfolio return by lending their own stock portfolio to
Slide 22: Stock Lending structure
Stock Lending structure Purchase on Sell on Stock Lending Monex’ clients Monex ING/JSF margin margin position Loan Ａ Buyer on Securities collateral margin １．９％ Ｅ Loan A Ｂ Ｃ Ｄ Buyer on Securities collateral margin １．９％ Ｆ Ｂ Stocks Seller on Cash Collateral Stock lending position to be loaned to the ma
Slide 23: Margin Trading
Margin Trading ■To be released on December 2, 2002 ■Commission ・Internet Margin trading commission table: Same as spot trades※ ・Stop Loss Order ¥ 750 / trade ※ A new rate structure will be also introduced: ¥ 3,000 for unlimited number of trade up to yen 3,000,000 trade amount in total. ■Interest cha
Slide 24: Margin trading: Impact on total number of trades
Margin trading: Impact on total number of trades ■Estimate of activities level Number of trades: Ratio of Increase in number of trades Prospective one margin account when 1% of Monex customers to one cash account @ Monex open margin accounts A or B A. Margin accounts with higher activities (same as
Slide 25: New services: Impact on Profitability (Revenue)
New services： services： Impact on Profitability 【Revenue】 Revenue increase ⇒ expected from January 2003 ■Advertising and promotion ： An increase in number of new accounts as well as number of trades is expected. Promotional price (Margin trading ¥900 and night trade¥470 ): a decrease in revenue per
Slide 26: New service: Impact on Profitability (Costs)
New service： service： Impact on Profitability 【Costs 【Costs】 Costs】 Introduction of new services require the following costs ⇒ Costs to increase from 2H of this FY ■Additional Personnel costs： ： for a few additional experienced employees ■System related capital investment （5 ） （ year lease） Margin t
Slide 27: Corporate Governance and Disclosure
Corporate Governance and Disclosure Corporate Governance ・Board of Directors： ： 4 external directors among 6 directors ・Auditors： ： One standing statutory auditor and 3 statutory auditors (all four are defined as “external auditors” by Japanese Commercial Code) ・Advisory Board ： Consists of respecte
Slide 28: http://www.monex.co.jp/
MONEX http://www.monex.co.jp/