Nomura Holdings, Inc. · TSE:8604
Nomura — Investor Presentation (May 2006)
34 slides from Nomura's investor presentation, May 15, 2006
Slide 1: Investor Presentation
Investor Presentation May 15, 2006 Nobuyuki Koga President and CEO Nomura Holdings, Inc. This is a summary of the May 2006 Investor Presentation Date: May 15, 2006 Place: 7th Floor, Nomura Securities Co., Ltd. Speaker: Nobuyuki Koga President and CEO, Nomura Holdings, Inc. 0
Slide 2: Disclaimer
1. This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2006 Nomura Holdings, Inc. All rights reserved. 2. 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
Slide 3: Corporate Vision and Goals
Corporate Vision and Goals Corporate Vision Deliver clients superior services and solutions to meet all investing needs Corporate Goals Become a globally competitive Japanese financial services group Achieve an average consolidated ROE of 10% to 15% in the medium- to long-term 2 Good afternoon ladie
Slide 4: Review of Performance: Net Income and ROE
Review of Performance (billions of yen) Net Income and Consolidated ROE (%) 350 25 Consolidated ROE (rhs) 304.3 300 Net Income (lhs) 20 250 15.5% 15 200 168.0 172.3 150 11.1% 119.9 10 10.1% 100 94.7 7.4% 5 50 5.2% 0 0 FY2002.3 FY2003.3 FY2004.3 FY2005.3 FY2006.3 3 As we announced on April 28, net in
Slide 5: Review of Performance: Segment Income before Income Taxes
Review of Performance (billions of yen) Segment Income before Income Taxes 600 Income before income taxes from all business segments Other 452.0 500 Asset Management Income up in Global Merchant Banking 400 Global Investment Banking all 5 business segments Global Markets Domestic Retail 300 225.5 18
Slide 6: Corporate Strategy
Corporate Strategy Expand scope of operations as financial services group Further growth 5 These significant changes are giving rise to new business opportunities in areas that go beyond the traditional framework of the securities and financial industries. Nomura sees this as the perfect opportunity
Slide 7: New Operating Structure
New Operating Structure Reduced Reduced Nomura Nomura Holdings Holdings executive executive officers officers from from 32 32 to to 11 11 More flexible management Appointed Appointed Division Division CEOs CEOs Clarified authority and accountability of Division CEOs 6 The number of Nomura Holdings e
Slide 8: Three Issues for Further Growth
Three Issues for Further Growth Accelerate Current Strategies 1 Strengthen domestic client base, increase revenue sources Implement Implement New New Initiatives Initiatives 2 Revamp international operations 3 Develop new businesses 7 We have pinpointed three issues that need to be addressed if we a
Slide 9: Three Issues (1) Strengthen domestic client base, increase revenue sources
Three Issues (1) 1 Strengthen domestic client base, increase revenue sources Achieve 100 trillion yen in Domestic Client Assets I ahead of schedule II Expand distribution channels III Boost product development and origination capabilities IV Build up solution-based and complex businesses 8 Let’s fir
Slide 10: 100 Trillion Yen in Domestic Client Assets
I. 100 Trillion Yen in Domestic Client Assets (trillions of yen) 100 80 60 40 20 2003.3 2006.3 2006.3 2003.3 2003.3 2006.3 2006.3 2003.3 0 A B Nomura C Group* Source: Based on disclosure documents of each company *Sum of personal deposits and securities affiliate assets in custody (FY2006.3 personal
Slide 11: 100 Trillion Yen in Domestic Client Assets: Actions
I. 100 Trillion Yen in Domestic Client Assets 100 trillion yen 5 million accounts 80 80 trillion trillion yen yen Investing in infrastructure z Branches: Add 50-100 to current network of 134 3.78 z Home Trade: Increase functions, discount plan million accounts z Call Centers: Boost employees to 1000
Slide 12: Expand Distribution Channels
II. Expand Distribution Channels (billions of yen) Japan Japan Post Post Funds Funds sold sold at at (billions of yen) Investment Investment Trusts Trusts banks banks 600 180 Others 160 570 570 billion billion yen yen 500 Nomura Global 6 Assets Diversified Fund 140 120 120 billion billion 120 400 ye
Slide 13: Boost Product Development, Origination Capabilities
III. Boost Product Development, Origination Capabilities Foreign Foreign Equities Equities Credit Credit Interest Interest rate rate Real Real estate estate exchange exchange Equity derivatives / Structured bonds High value- value-added Loans / Asset finance HPOs MPOs Structured bonds REITs Block tr
Slide 14: Trading-related Revenue and Consolidated VaR
III. Boost Product Development, Origination Capabilities Consolidated VaR Trading-related revenue* (billions of yen) Trading-related Revenue* and Consolidated VaR (billions of yen) 10 400 Consolidated VaR (lhs) 345.5 Trading-related revenue* (rhs) 327.9 8 296.8 300 272.0 7.0 6 165.5 200 4 3.9 4.1 3.
Slide 15: Build up Solution-based and Complex Businesses: League Tables
IV. Build up Solution-based and Complex Businesses Equities Bonds M&A FY2005 FY2005 FY2005 Japan Equity & Equity-related Domestic Straight Bonds Any Japanese Involvement Financial (excluding self-funding) Advisers (announced deals) Rank Bookrunner Rank Bookrunner Rank Adviser 1 1 1 2 Daiwa Securitie
Slide 16: Build up Solution-based and Complex Businesses
IV. Build up Solution-based and Complex Businesses Financial Diverse range of financing and Corporates Large, complex M&As Capital Markets 15 In today’s market, we are seeing increasingly diverse means of corporate finance as well as ever-larger and complex M&A deals. It is no longer enough to rely
Slide 17: Fuji Photo Film 200bn yen EB
IV. Build up Solution-based and Complex Businesses Apr. 2006: 200bn yen EB for Fuji Photo Film Product Individual proposals Fuji Investors Origination Photo Film capabilities (including some institutional investors) Trading capabilities Sales strength 16 As the market changes, we will focus on provi
Slide 18: Advantages of Being Independent
IV. Build up Solution-based and Complex Businesses Financial Advantages of being independent and Corporates Deal origination, Capital Markets execution capabilities Domestic & global network 17 Our independent position gives us an advantage in terms of managing conflicts of interest. We will use thi
Slide 19: Three Issues (2) Revamp international operations
Three Issues (2) 2 Revamp international operations I Business model to suit regional differences II Increase profitability in Europe, Americas, Asia 18 Increasing profitability in our international operations is an urgent task for management. To date, we have focused on providing a full lineup of bu
Slide 20: Revamp International Operations
Revamp International Operations Europe Europe Increase Increase function function as as product product supply supply base base Americas Americas Focus Focus on on core core competencies competencies Asia Asia Expand Expand operations operations 19 In our global value chain, Europe acts as a product
Slide 21: Expand Operations in Asia: Major Deals
Expand Operations in Asia Lead Lead manager manager in in major major deals deals in in FY2006.3 FY2006.3 1st ADR Nov. 2005 listed on TSE POSCO US$691mil Lead manager Public offering Joint global Dec. 2005 in India and ICICI Bank US$1.7bn coordinator international markets Largest IPO by LOTTE Joint
Slide 22: Expand Operations in Asia
Expand Operations in Asia Seoul Beijing Asia Shanghai Japan Hong Kong Taipei Investors Hanoi Investors Manila Bangkok Corporates Corporates Kuala Lumpur Singapore Jakarta 21 The high-net-worth market in Asia is growing rapidly. As such, we see great opportunities for future growth in supplying produ
Slide 23: Three Issues (3) Develop new businesses
Three Issues (3) 3 Develop new businesses Unified Unified Partners Partners Five Five Business Business Joinvest Joinvest Divisions Divisions Securities Securities Loans Loans 22 Next, let’s look at new businesses. Nomura Group’s business portfolio currently consists of five business divisions. In a
Slide 24: Three Issues (3) Develop new businesses
Three Issues (3) 3 Develop new businesses Five Five Business Business Divisions Divisions 23 We are approaching these new businesses with the determination of growing them to a scale that matches business divisions in Nomura Group. In short, we will continue to seek growth in our existing businesses
Slide 25: Capital Policy
Capital Policy Achieve average ROE of 10- 10-15% in medium- medium- to long- long-term, steadily increase shareholders’ shareholders’ equity and returns to shareholders Return Return about about 30% 30% ofof profits profits as as 1 155% % dividend – 1100 – dividend RO R OE E Dividend Dividend Stock
Slide 26: Returning Profits to Shareholders
Returning Profits to Shareholders (billions of yen) 160 80% Total return ratio Payout ratio 70% 140 Share buybacks Dividend 120 60% 100 50% 80 40% 60 30% 40 20% 20 10% 0 0% FY2002.3 FY2003.3 FY2004.3 FY2005.3 FY2006.3 Dividend per share (yen) 15.0 15.0 15.0 20.0 48.0 Share buybacks (billions of yen)
Slide 27: Returning Profits to Shareholders: Dividend Target
Returning Profits to Shareholders Dividend target (minimum level of dividend) = DOE 3.0% Performance- Performance-linked portion is based on full- full-year dividend payout ratio of 30% Dividend per share (yen) Dividend payout 30% DOE 3.0% Low ROE High 26 Going forward, we have raised our dividend-o
Slide 28: Appendix
Appendix 27
Slide 29: Nikkei Average and Distribution of Household Assets
Nikkei Average and Distribution of Household Assets (yen) 45,000 2 40,000 35,000 30,000 25,000 4 20,000 1 15,000 3 10,000 5,000 0 1 Early ’80s 2 Bubble period 3 Economic trough 4 Current Household Financial Assets Household Financial Assets Household Financial Assets Household Financial Assets 328 t
Slide 30: Comparison of Households in Japan and US
Comparison of Households in Japan and US Japan US Household Financial Assets Household Financial Assets 1,509 trillion yen 38.5 trillion dollars Equity 11.4% Equity 33.2% Bonds 2.2% Bonds 7.1% Investment Trusts 3.4% Investment Trusts 13.4% Cash & Deposits 12.8% Dec. Cash & Dec. Insurance & 2005 Depo
Slide 31: Investment Assets among Households
Investment Assets among Households Investment Assets (trillions of yen) 300 271 Bonds 16 258 256 Investment Trusts 236 17 Equities 229 33 250 38 19 38 23 208 202 184 33 34 182 177 182 173 29 174 173 24 191 190 51 200 176 21 27 160 29 28 31 30 153 32 23 32 29 28 26 137 23 25 34 26 130 34 38 150 28 27
Slide 32: Publicly Offered Investment Trusts Net Assets and Market Share
Publicly Offered Investment Trusts Net Assets and Market Share (trillions of yen) 100% 80 Security firm market share for publicly offered investment trusts (lhs) Net assets in publicly Bank market share for publicly offered investment trusts (lhs) offered bond investment trusts (rhs) Net assets in p
Slide 33: Debt to Equity Ratio and ROE (NOMURA 400, excluding financials)
Debt to Equity Ratio and ROE (NOMURA 400, excluding financials) ROE (%) D/E ratio (%) 15 300 FY06(f) 10.0% 10 200 D/E D/E ratio ratio (%) (%) ROE ROE (%) (%) 5 100 FY05(e) 82% 0 0 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 (FY) (e)
Slide 34: Mergers and Acquisitions
Mergers and Acquisitions (No. of deals) (trillions of yen) 2,500 16.0 Value 14.0 2,000 No. of deals 12.0 10.0 1,500 8.0 1,000 6.0 4.0 500 2.0 0 0.0 1993 1995 1997 1999 2001 2003 2005 (CY) Source: Nomura Securities Financial & Economic Research Center 33 33