Monex Group, Inc. · TSE:8698
Monex — Q1 FY2006 Earnings Presentation
31 slides from Monex's earnings presentation, Jul 20, 2005
Slide 1: Financial Results 1Q of Fiscal Year Ending March 31, 2006
Financial Results 1Q of Fiscal Year Ending March 31, 2006 July 20, 2005 This is an English translation of Japanese presentation material prepared for IR conference held on the above date; it includes the information on consolidated financial summary under Japanese GAAP for FYE March 2006. If there i
Slide 2: Table of Contents
Table of Contents 1. Financial Results and Business Overview 2. Business Model and Future Development Financial Summary 1Q of FYE Mar. 31, 2005 vs. 1Q of FYE Mar. 31, 2006 3 Mission Statements 19 4Q of FYE Mar. 31, 2005 vs. 1Q of FYE Mar. 31, 2006 4 Brokerage Business 20 Financial Highlights (Quarte
Slide 3: 1. Financial Results and Business Overview
1. Financial Results and Business Overview 2. Business Model and Future Development 2
Slide 4: Financial Summary: 1Q FYE Mar. 2005 vs. 1Q FYE Mar. 2006
Financial Summary: 1Q of FYE Mar. 31, 2005 vs. 1Q of FYE Mar. 31, 2006 (in million yen, %) 1Q of FYE 1Q of FYE Mar. 31, 2005 Mar. 31, 2006 Change (Apr. 2004-Jun. 2004) (Apr. 2005-Jun. 2005) Operating Revenues 5,764 6,151 6.7% Net Operating Revenues 5,440 5,774 6.2 SG&A 2,806 2,781 0.9 Operating Inco
Slide 5: Financial Summary: 4Q FYE Mar. 2005 vs. 1Q FYE Mar. 2006
Financial Summary: 4Q of FYE Mar. 31, 2005 vs. 1Q of FYE Mar. 31, 2006 (in million yen, %) 4Q of FYE 1Q of FYE Mar. 31,2005 Mar. 31,2006 Change (Jan. 2005-Mar. 2005) (Apr. 2005-Jun. 2005) Operating Revenues 6,533 6,151 5.8 Net Operating Revenues 6,340 5,774 8.9 SG&A 3,004 2,781 7.4 Operating Income
Slide 6: Financial Summary: Financial Highlights (Quarterly Basis)
Financial Summary: Financial Highlights (Quarterly Basis) (in million yen) Net Operating Revenues (in million yen) SG&A 7,000 7,000 6,340 5,774 6,000 6,000 5,440 4,907 5,000 5,000 4,312 4,596 4,000 4,000 3,000 2,703 2,806 2,892 2,721 3,004 2,781 3,000 2,000 2,000 1,000 1,000 0 0 4Q 1Q 2 3 4 1Q 4Q 1Q
Slide 7: Financial Summary: Breakdown of Net Operating Revenues and SG&A
Financial Summary:Breakdown of Net Operating Revenues and SG&A Breakdown of Net Operating Revenues Breakdown of SG&A IPOs Others Brokerage Mutual 4% Temporary Variable 2% (Cash) Funds costs costs 2% 45% 7% 23% FOREX 7% Financial 5,774 million yen 2,781 million yen Income 16% Fixed Costs Brokerage 70
Slide 8: Comparison with Others: Retail Trading Value & Equity Brokerage Commissions
Comparison with Others: Retail Trading Value & Equity Brokerage Commissions Market Market Share Share of of Retail Retail Trading Trading Value Value Equity Equity Brokerage Brokerage Commissions Commissions ( ) (in billion yen) 25 8 20 6 15 4 10 2 5 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 2Q
Slide 9: Comparison with Others: Financial Highlights (Quarterly Basis)
Comparison with Others: Financial Highlights (Quarterly Basis) (in million yen) Net Net Operating Operating Revenues Revenues SG&A SG&A (in million yen) 10,000 5,000 8,000 4,000 6,000 3,000 4,000 2,000 2,000 1,000 0 0 1Q 2 3 4 1Q 2 3 4 1Q 1Q 2 3 4 1Q 2 3 4 1Q FYE 2004 FYE 2005 FYE 2006 FYE 2004 FYE
Slide 10: Comparison with Others: Diversified Revenue Portfolio & Stable Earning Structure
Comparison with Others: Diversified Revenue Portfolio & Stable Earning Structure IPOs IPOs,, Mutual Mutual Funds, Funds, FOREX, FOREX, etc etc Stable Stable Revenue Revenue Source, Source, Not Not vulnerable vulnerable to to Bear Bear Market Market Highest ROA [ROA] [Brokerage Commission Net Operati
Slide 11: Comparison with Others: Cash/Margin Brokerage
Comparison with Others: Cash/Margin Brokerage Cash Cash Brokerage Brokerage :: Margin Margin Brokerage Brokerage == 50% 50% :: 50% 50% Realize Realize Balanced Balanced Revenue Revenue Sources Sources [Share of Margin Trading] Mainly for Beginners Mainly for Active Traders (Margin Trading Value / Su
Slide 12: Comparison of Customer's Trading Trends Between Pre- and Post-Merger
Comparison of Customer’s Trading Trends Between Pre- and Post-Merger Trading Trading Trends Trends of of former former -Monex -Monex and and Beans Beans Customers Customers [ Assumption ] [ Analysis ] Active customers of Monex already moved No change found in trading trends of before Merger to Nikko
Slide 13: Effects of Business Merger: Further Expansion of Revenues and Reduction of Costs
Effects of Business Merger Further Expansion of Revenues and Reduction of Costs Full-line services contribute to expansion of customer base 20% SG&A Reduction Compared to that of 4Q/FYE2005 Effects of IT cost reduction will be realized after 2Q/FYE2006 Temporary Costs Variable Costs 120.0% Fixed Cos
Slide 14: Underwriting Business
Underwriting Business Aiming to Boost Revenue as the Sole Lead Manager Past Present Next First online Granted the First Sole Lead Manager Underwriting Share broker to enter Status as an Online Broker underwriting business DreamVisor.com Incorporated Growth Potential Listed on TSE Mothers on June 7,
Slide 15: Mutual Funds Business
Mutual Funds Business: Front-Runner Among Online Mutual Fund Distributors Number of trades per business day breaks record 3months in a row Source of Growth Strengthened product line-up through Merger Number of trades per business day Wide Array of products from Index Funds to Bull/Bear Funds 1,722 1
Slide 16: FOREX Business
FOREX Business: One of the Largest Service Providers in Domestic Retail Business Maintaining Competitive Advantage, 7% Share of Net Operating Revenues Against New FX Business Entrants Established as One of the Core Revenue Sources (in million yen) 21,000 FX Commission Revenue Number of Accounts 450
Slide 17: Fixed Income Business
Fixed Income Business ”Deposits to Securities Investments” “JPY to Multi-Currencies” Change in Japanese individual asset portfolio Only 2 Change Change in in Economic Economic Environment Environment Monex Beans Distributors + End of Constant Economic Growth One Other Broker Only As Online Broker Gr
Slide 18: Alternative Investments: Real-World Premium Products
Alternative Investments: Real-World Premium Products Launch Launch of of Asia-targeted Asia-targeted Alternative Alternative Fund: Fund: Asia Asia Focus Focus Forthcoming Forthcoming Alternative Alternative Offer Offer products products originally originally limited limited to to Institutional Insti
Slide 19: 2. Business Model and Future Development
1. Financial Results and Business Overview 2. Business Model and Future Development 18
Slide 20: Mission Statement
Mission Statement Take position as a total financial service provider, not just as an online brokerage firm Offer comprehensive products and service line-ups with “World Class Quality” Support passive investors to manage his/her financial assets efficiently Strengthen “Products Origination C
Slide 21: Brokerage Business
Brokerage Business: Expanding Customer Base with Steady Revenue Growth Providing the Best Services with the Merger of Monex and Nikko Beans Commissions Commissions Trading Trading Functions Functions Originality Originality Customer Customer Support Support Volume Discounts Trading Tool: Night Time
Slide 22: Highly-Reputed Services and Products
Highly-Reputed Services and Products Nikkei Business Associates Extra Edition Gomez “Online Broker Ranking June 2005 ” “2005 Online Broker Ranking” Aim for No.1 Financial Rank 2 Rank 1 Rank 1 Rank 2 Rank 1 Service Total Functions Information Total High-Quality Service Provider Pioneer Services Produ
Slide 23: Competitive Services and Products
Competitive Services and Products For All Customers’ Satisfaction (As of June 30, 2005) Fixed Alternative Equities Mutual Funds Others CMA Income Investments Stock Night In-house Stop JGB Monthly China/India Credit China U.S. Time Small- Lending Low High CX ATM Margin Loss /Foreign Auto- Equity (Com
Slide 24: Current and Future Business Models: Further Expansion of Revenue Potentiality
Current and Future Business Models: Further Expansion of Revenue Potentiality Potentiality 1H FYE 2005 1Q FYE 2005 (Apr.-Sep. 2004) (Apr.-Jun. 2005) 3 – 5 years later Brokerage -Expected further growth resulting from changes in national policies -Future cash inflow from banks, postal savings and oth
Slide 25: Exploiting Various Channels to Expand Customer Platform
Exploiting Various Channels to Expand Customer Platform Two Two Main Main Expanding Expanding Strategies Strategies (Online (Online and and Offline) Offline) Securities Securities Intermediary Intermediary Account Account Introduction Introduction Securities Account Opening Securities Account Openin
Slide 26: Investors Education
Investors Education : Contribute in Advancing Financial Literacy of Customers Background Monex Beans Individual Responsibility Consistent Provision of Long term Assistance for Driven by the Change of National Policy + High Quality Investors Education Customer’s Asset Management E-mail Magazines Offl
Slide 27: Product Origination Capability
Product Origination Capability The Source for Differentiation Online Online Brokerage Brokerage Status Status •Intensified Competition in the Online Securities Industry Further Commission Cut by some Online Brokers etc… •Entry of Newcomers Full-scale Entries of Major Offline Securities Firms into On
Slide 28: Monex Night Time Trading
Monex Night Time Trading: The Only PTS in Japan for Individual Investors Soon To Be Current Service New Service Launched Transaction Price Special Stock Pricing Closing Stock Price on Stock Exchange Transaction Price Market Participants Closing Stock Price on Stock Exchange or Monex Beans Customers
Slide 29: Monex Lounge @ GINZA Opening
“Monex Lounge @ GINZA” Opening “Monex Lounge @ GINZA” opens on the 4th floor of Tokyo Ginza’s “Sony Building” on July 22, 2005 New NewChallenge: Challenge: The TheFirst FirstOnline OnlineBroker BrokertotoOffer Offeran anInteractive InteractiveSpace Space Visitors Visitorscan can Open OpenMonex Monex
Slide 30: FAQ
FAQ 9New Account Acquisition 9Differentiation from Competitors 9Contemplation of Full-scale Entry of Major Offline Securities 9Banks entering the Securities Business 9System Risk 9Return on Stockholder Equities 29
Slide 31: Monex Beans Holdings, Inc.
MBH Monex Beans Holdings, Inc.