Nomura Holdings, Inc. · TSE:8604
Nomura — Q3 FY2015/16 Earnings Presentation
34 slides from Nomura's earnings presentation, 2016
Slide 1: Overview of third quarter financial results
I will now give you an overview of our third quarter financial results using the document titled “Consolidated Results of Operations”. Please turn to page two.
Slide 2: Outline
LN Outline Presentation NOMURA Financial Supplement Executive summary (p. 2) Overview of results (p. 3) Business segment results (p. 4) Retail (p. 5-6) Asset Management (p. 7-8) Wholesale (p. 9-11) Non-interest expenses (p. 12) Robust financial position (p. 13) Funding and liquidity (p. 14) Consolid
Slide 3: Executive summary
For the nine months to December, net revenue and pretax income from our three business segments increased year on year, driven by resilient performances in Asset Management and Wholesale as well as a strong contribution from the first quarter. On a Group basis, net revenue declined 5 percent to 1,11
Slide 4: Highlights
Highlights (billions of yen, except EPS and ROE) ae Q0a YoY er Yor Net revenue 354.9 | +5% 16% 1,115.5 5% Non-interest expenses 303.3 | 4% 2% 938.0 +1% Income before income taxes 51.6 | +160% -56% 1775 -27% Net incomet 35.4 | -24% ~49% 150.7 +6% EPS? Y9.61 | -24% -49% Y40.85 47% ROE? 5.1% 7.3% (1) N
Slide 5: Net revenue and income before income taxes
Net revenue and income before income taxes (billions of yen) i FY2015/16 oa | Yor 130 YoY 104.3 10% -19% 350.6 1% 25.3 +11% +8% 75.1 +10% Other * Unreatzed gain (oss) on investments in pT TS CSE 16 47 Net revenue il 354.9 +5% -16% 1,115.5 5% Income Retail 27.8 -24% ~45% 115.5 5% hoe, Asset Managemen
Slide 6: Business segment results: Retail
Net revenue declined 10 percent to 104.3 billion yen and pretax income was down 24 percent at 27.8 billion yen. Given the uncertain market conditions, Retail clients remained in a wait-and-see mode and sales of stocks and investment trusts were sluggish. While our client base grew as a result of the
Slide 7: Retail: recurring revenue and NISA
As shown on the top left of page six, third quarter annualized recurring revenue was 76.8 billion yen, down slightly from last quarter due largely to market factors. However, the recurring revenue cost coverage ratio remained roughly unchanged from the previous quarter. As shown on the bottom left,
Slide 8: Asset Management results
Net revenue increased 11 percent to 25.3 billion yen and pretax income grew 28 percent to 10.7 billion yen. Assets under management reached a record 42.2 trillion yen as of the end of December and dividend income also contributed to revenues. The investment trust business reported inflows into produ
Slide 9: American Century Investments alliance
As shown on the bottom right of page eight, in December last year we announced a strategic alliance with American Century Investments and signed a definitive agreement to acquire a 41 percent stake in the company. American Century is an independent investment advisory firm with nearly 60 years of hi
Slide 10: Wholesale results
Net revenue was 186 billion yen, down 4 percent quarter on quarter. Global Markets reported a solid quarter in Equities but a continued slump in spread products, resulting in revenues roughly unchanged from last quarter. Investment Banking sold a private equity investment but global fee pools declin
Slide 11: Wholesale: Global Markets
Global Markets net revenue remained roughly unchanged at 157.2 billion yen. Fixed Income net revenue was 80.2 billion yen. Rates products had another good quarter, but Securitized Products and Credit were weak and revenues slipped 4 percent quarter on quarter. As the heat map on the right shows, the
Slide 12: Wholesale: Investment Banking
As shown on the top left, third quarter Investment Banking overall revenues were down 16 percent at 28.8 billion yen. “Other” contains a realized gain from the sale of private equity investment Mitsui Life. However, core Investment banking revenues declined significantly on the back of a decline in
Slide 13: Non-interest expenses
Third quarter non-interest expenses were 303.3 billion yen, down 4 percent from the previous quarter. Compensation and benefits declined 5 percent due to cost reduction initiatives and lower bonus provisions in line with pay for performance. Other expenses declined 7 percent as the result of a drop
Slide 14: Robust financial position
Page 13 shows our balance sheet and capital ratios. As shown in the box on the bottom left, our CET 1 ratio under Basel III was 15.1 percent, up 1.9 points from 13.2 percent at the end of September. We reduced risk amid the uncertain market conditions, resulting in a decline in risk assets of approx
Slide 15: Closing remarks
As I said at the start of my presentation, we faced a challenging environment in the third quarter as client activity slowed. While we are not satisfied with our performance, we are seeing the results of our efforts even in these market conditions. In Retail, inheritance and business succession prop
Slide 16: Financial Supplement
Financial Supplement
Slide 17: 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. L
Slide 18: Value at risk
= Definition = From April 1, 2015 to December 31, 2015 (billions of yen) — 99% confidence level — Maximum: 9.1 — 1-day time horizon for outstanding portfolio — Minimum: 3.5 — Inter-product price fluctuations considered — Average: 5.5 femonsotyen) anal era] (UNE Teoreo NN (NNN cierto es eee Equity 1.
Slide 19: Consolidated financial highlights
Full year Quarter (billions of yen) 300 = Net income attributable to NHI shareholders #ROE(%) 8.9% + 8.6% + 9% (billions of 90 60 30 yen) Net revenue 1,557.1 1,604.2 Income before income taxes 361.6 346.8 116.1 105.0 106.0 19.9 51.6 Net income attributable to Nomura Holdings, Inc. (NHP) share! 1s 21
Slide 20: Consolidated income
Full year Quarter (billions of yen) “Praminis Fvzots Fy2o15 2018/16 Revenue Commissions 473.1 453.4 123.2 123.7 130.3 111.5 102.3 Fees from investment banking 91.3 95.1 28.8 25.8 24.5 44.9 20.0 Asset management and portfolio service fees 168.7 203.4 53.3 54.3 59.9 58.2 57.8 Net gain on trading 476.4
Slide 21: Main revenue items
Full year Quarter 7 —FY2015 FY QO1S/IG (ptions of yen) Frm erat a Stock brokerage commissions 266.6 252.8 73.1 70.7 78.7 71.3 63.7 Other brokerage commissions 18.1 19.6 61 5.8 5.2 6.8 5.4 Commissions for distribution of investment trusts 157.8 134.3 32.6 33.6 34.3 22.0 20.8 Other 30.6 46.8 11.4 13.5
Slide 22: 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) Retail 192.0 161.8 50.5 0.9 50.9 27.8 ‘Asset Management 27.1 32.1 9.3 67 11.7 8.4 10.7 Wholesale 111.8 82.2 0.5 53.8 19.7 8.6 9.9 Three Business segments total 330.9 276.1 60
Slide 23: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 46.0 44.8 40.0 30.0 20.0 20.0 14.7 10.0 | 0.0 —_ -10.0 40 A6 -20.0 -30.0 -23.0 Pramas gan oo Net gain (loss) related to economic 174 154 64 03 26 4 06 hedging transactions Realized gain on investments in equity securities hel
Slide 24: Retail results
Full year Quarter (pions of yen) rrowns vate ‘Commissions 297.2 258.9 69.8 677 73.8 55.8 51.8 7.2% 25.8% Of which, > 115.4 81.8 25.1 226 26.4 20.0 18.0 10.1% 28.3% Of which, commissions for distribution of i nt trusts 155.4 134.9 32.8 33.7 34.9 22.5 22.0 22% — -33.0% Sales credit 106.1 106.4 30.0 25
Slide 25: Retail client assets
Retail client assets (trillions of yen) 120 109.5 = Other 100 917 = Overseas mutual funds: 80 ‘™Bond investment trusts ™Stock investment trusts 60 = Domestic bonds 40 = Fore’ Foreign currency bonds 20 "Equities oO Equities 53.2 67.2 Foreign currency bonds 63 63 Domestic bonds' 12.8 12.3 Stock invest
Slide 26: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter (billions of yen) (billions of yen) 1,500 1,000 1,076 4,000 oo? 500 352 177 | a 500 i) = (1) Cash and secunities inflows minus outfiows, excluding regional financial institutions. 25 25
Slide 27: Number of accounts
Number of accounts thousands) “rvzoisiie Frzowns yaoi zon (Mar Mare Mar un Sep ae Accounts with balance 5,182 5,294 5,276 5,294 5,316 5,366 5,384 2,718 2,719 2,723 2,719 2,700 2,725 2,796 Equity holding accounts Nomura Home Trade / Net & Call accounts 4,012 4,216 4,154 4,216 4,270 4,337 4,384 New In
Slide 28: Asset Management results and AUM
Full year Quarter ee ee Net revenue 23.4 26.9 22.9 25.3 10.8% 8.1% Non-interest expenses 53.4 60.3 14.1 17.2 15.2 14.4 14.6 1.1% 3.6% Income before income taxes 27.1 32.1 9.3 67 417 8.4 10.7 27.6% 14.8% Assets under management by company — ee ee eee Nomura Asset Management *? 34.4 43.3 41.9 43.3 45.
Slide 29: Asset inflows/outflows by business
Asset inflows/outflows by business* Full year Quarter (billions of yen) Ea Ea RvR FYROISIIG Investment trusts business 1,598 3,418 1,124 942 1,252 896 157 of which ETFs 882 843 298 477 308 1,294 102 Investment advisory business -520 50 46 113 38 1,446 646 Net asset inflow 1,078 3,469 1,078 1,055 1,2
Slide 30: Wholesale
Wholesale Full year Quarter (piions of yen) Fyaorats ry201516 Net revenue 765.1 789.9 178.9 231.5 205.2 192.9 186.0 Non-interest expenses 653.3 707.7 178.5 477.7 185.5 184.3 176.0 4.5% 14% Income before income taxes 111.8 82.2 0S 53.8 19.7 8.6 9.9 15.2% 22.0x Breakdown of Wholesale revenues Full yea
Slide 31: Private equity related investments
Private equity related investments (billions of yen) 70 57.2 56.4 58.7 56.4 = Tema Firma 50 45.6 mAsia 44.6 40 Europe (excluding Terra Firma) 30 28.8 = Japan 20 10 ) EeSEeES EE Japan 8.1 10.6 10.8 10.6 9.5 14.1 3.4 Europe (excluding Terra Firma) 22.6 19.9 207 19.9 87 68 5.8 Asia 1.9 21 24 21 24 2.0
Slide 32: Number of employees
Japan 16,037 15,973 16,143 15,973 16,570 16,381 16,282 Europe 3,461 3,485 3,539 3,485 3,492 3,494 3,433 ‘Americas 2,281 2,449 2,445 2,449 2,439 2,514 2,504 Asia and Oceanea’ 5,891 6,765 6,762 6,765 6,788 6,862 6,853 Total 27,670 28,672 28,889 28,672 29,289 29,251 29,069 (1) Includes Powai office in
Slide 33: Disclaimer
NM 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