Monex Group, Inc. · TSE:8698
Monex — FY2010 Earnings Presentation
39 slides from Monex's earnings presentation, Apr 27, 2010
Slide 1: Financial Results of Fiscal Year Ending March 31, 2010
April 27, 2010 Financial Results of Fiscal Year Ending March 31, 2010 This is an English translation of Japanese presentation material prepared for the financial disclosure on the date above; it includes the information on consolidated financial summary under Japanese GAAP. If there is any discrepan
Slide 2: Important Matters Concerning Product-related Risks
Important Matters Concerning Product-related Risks This material is explanatory material on the financial results of Monex Group, Inc. (“the Company”). The descriptions herein concerning the products, services, etc. which are handled by the Company’s group companies (“the Group Companies”), are made
Slide 3: Our Business Principles
Our Business Principles 1. PURSUE A SPIRIT OF INNOVATION We will constantly strive to pioneer new fields in finance and propose new approaches to managing money. 2. STAY CUSTOMER FOCUSED We believe that the best guide to our corporate activities is the voice of our customers. With this guide, we wil
Slide 4: Table of Contents
Table of Contents Important Matters Concerning Product-related Risks ･･･ p.1 Our Business Principles ･･･ p.2 I. Financial Results 1. Financial Overview 2. Business Strategies (1) Major Business Activities for 4Q ･･･ p.5 (1) Short-term Strategy (2) Financial Overview of 4Q, FYE Mar. 31, 2010 ･･･ p.6
Slide 5: 1. Financial Results
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 4
Slide 6: Major Business Activities for the Fourth Quarter
Major Business Activities for the Fourth Quarter ◆ Proceeding with the consolidation of Monex, Inc. and ORIX Securities - ORIX Securities became a 100% subsidiary as of January 17, 2010 - Promoting integration of systems, businesses and organization of both companies, targeting the consolidation at
Slide 7: Financial Overview
Financial Overview ■Performance of 4Q of FYE Mar. 31, 2010 (Jan.-Mar.) Net operating revenue increased by 16.6% due to consolidation of ORIX Securities Corp. and FX business expansion ◆ Net Operating Revenue 5,349 million yen +16.6% from 3Q -Brokerage commissions 2,604 million yen +25.6% from 3Q -FX
Slide 8: Highlights of Revenue (1) Increasing and Decreasing Factors
Highlights of Revenue (1) Increasing and Decreasing Factors ■Comparison with 3Q of FYE Mar. 31, 2010 ■Comparison with FYE Mar.31, 2009 ◆Increased due to increase in equity trading values and ◆Decreased due to decrease in equity trading values and consolidation of ORIX Securities The temporal financi
Slide 9: Highlights of Revenue (2) Revenue Trends and Structure
Highlights of Revenue (2) Revenue Trends and Structure ■Net operating revenue and operating income ■Revenue structure and dependency on brokerage Million yen Billion yen ◆Revenue and asset in custody （FYE Mar. 31, 2010） Net operating revenue (left） 10,000 Operating income （left） 900 Investment Banki
Slide 10: Highlights of SG&A (1) Decreasing and Increasing Factors
Highlights of SG&A (1) Decreasing and Increasing Factors ■Comparison with 3Q of FYE Mar. 31, 2010 ■Comparison with FYE Mar.31, 2009 ◆Increased due to consolidation of ORIX Securities ◆Increased due to consolidation of ORIX Securities but offset by cost reduction efforts Increased by 1,425 million ye
Slide 11: Highlights of SG&A (2) Cost Structure and Trends
Highlights of SG&A (2) Cost Structure and Trends ■Cost Structure (Apr. 2009 - Mar. 2010) ■Quarterly trends of SG&A Million yen Fixed costs and costs 5,000 4,8 73 Strategically controllable costs correlated to the Commission to number of accounts 3,9 02 4,000 3,5 54 3,58 5 stock exchange 3,4 47 etc.
Slide 12: Balance Sheet
Balance Sheet ■Maintain financial strength by keeping availability of funds and liquidity and controlling risk assets (*3) Non-current assets（investment value of risk assets） (in billion yen) (in billion yen) Property/equipment 0.6（Facilities, equipment, etc） [Segregated cash trust] [Cash margin fro
Slide 13: Financial Summary: 3Q vs. 4Q of FYE Mar. 31, 2010
Financial Summary : 3Q of FYE Mar. 31, 2010 vs. 4Q of FYE Mar. 31, 2010 (in 3 months) （in million yen, %） 3Q of FYE Mar. 31, 2010 4Q of FYE Mar. 31, 2010 Change (Oct. 2009 - Dec. 2009) (Jan. 2010 – Mar. 2010） Operating Revenues 5,317 5,801 9.1% Net Operating Revenues 4,589 5,349 16.6% SG&A 3,447 4,8
Slide 14: Financial Summary: FYE Mar. 2009 vs. FYE Mar. 2010
Financial Summary : FYE Mar. 31, 2009 vs. FYE Mar. 31, 2010 (in 12 months) （in million yen, %） FYE Mar. 31, 2009 FYE Mar. 31, 2010 Change (Apr. 2008 – Mar. 2009） (Apr. 2009 – Mar. 2010） Operating Revenues 24,812 22,499 -9.3% Net Operating Revenues 21,053 19,921 -5.4% SG&A 15,784 15,460 -2.1% Operati
Slide 15: Financial Summary: Quarterly Trends in Income Statement
Financial Summary：Quarterly Trends in Income Statement （in million yen） FYE Mar.31, 2009 FYE Mar. 31, 2010 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Brokerage commissions 3,505 2,612 2,911 2,342 3,145 2,670 2,073 2,604 Underwriting and distribution commissions 1 0 1 2 1 3 3 14 Subscription and distribution commission
Slide 16: Financial Summary: Quarterly Trends in SG&A
Financial Summary：Quarterly Trends in SG&A （in million yen） FYE Mar.31, 2009 FYE Mar. 31, 2010 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Transaction-related expenses 1,182 1,172 1,188 1,095 979 1,044 948 1,247 Commissions paid 238 214 240 190 196 263 181 194 Exchange and association dues 157 111 109 92 128 117 100 17
Slide 17: Revenues/SG&A per Customers' Assets in Custody
Comparison Analysis : Revenues/SG&A per Customers’ Assets in Custody Mitsui Sumitomo FG （Annualized） ◆Customers’ asset in custody and SG&A increased due to (Consolidated） consolidation of ORIX Securities, which slightly increased SG&A 3Q of Mar. 2010 2.0% per customer’s assets in custody. Note that
Slide 18: 2. Strategies
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 17
Slide 19: Mission Statement
Mission Statement Take the position as an online integrated financial service provider for individual investors Provide individual investors with institutional investor level investment opportunities Offer comprehensive products and services with “world class quality” Empower investors educa
Slide 20: The Monex Group
The Monex Group Holding Company （As of April 27, 2010） [ Financial products and services for individual investors ] [ Overseas subsidiary and office ] Securities Company FX Business Overseas Businesses Beijing ORIX Securities Corp. Representative Office (Monex Group) Monex FX, Inc. Developing busine
Slide 21: Leadership and Originality of Monex
Leadership and Originality of Monex ◆ Brokerage business Monex Night Time Trading Jan. 2001: The first PTS (proprietary trading system) offered to retail investors in Japan Stock lending service Jan. 2003: First to offer to retail investors in Japan ◆ Mutual fund business Top class online sales Keep
Slide 22: Roadmap
Roadmap ■ Long-term goal: Aim for overseas business to contribute 1/3 of the total revenue Our goal is to become a GLOBAL TECHNOLOGY-BASED RETAIL financial services provider Future growth and management policy Online • Expand active trader customer segment Trading • Strengthen FX business segment
Slide 23: Rising Importance of Business Scale and Cost Efficiency in Online Securities Industry
Rising Importance of Business Scale and Cost Efficiency in Online Securities Industry ■Status of online securities industry Grew rapidly after brokerage commission liberalized in 1999, but trading volume depressed since 2006 Competition for customer accounts through price discount intensified, with
Slide 24: Short-term Strategy: Marketing Outline after the Merger
Short-term Strategy： Marketing Outline after the Merger of Monex, Inc. and ORIX Sec. ■Expansion of market share Aiming to expand trading shares by fully utilizing the customer base that will be strengthened from the merger between Monex and ORIX Sec. ◆ Equity trading （Cash/Margin） Aim to have over 8
Slide 25: Short-term Strategy: Cost Reduction and P/L Impact after the Merger
Short-term Strategy: Cost Reduction and P/L Impact after the Merger ■Financial Breakdown of ORIX Sec. (Feb.-Mar. 2010) ■Early realization of merger effect by cost reduction (in million yen) ◆Temporary merger related cost（consolidated) Feb. - Mar., 2010 Merger related ・Realized 2.11 billion yen in FY
Slide 26: Mid-term Strategy: Intelligence Infrastructure
Mid-term Strategy: Intelligence Infrastructure ■ “Intelligence Infrastructure” ■“MONEX VISION” and “MONEX SIGN” ◆ Creating a new value of Monex ◆Portfolio management advice tool “MONEX VISION(Beta)” • Give advice to customers with various goals and properties by • Target: Long-term investment provid
Slide 27: Long-term Strategy: Overseas Business Development
Long-term Strategy: Overseas Business Development ■Business development into growth markets ■Update on overseas business development ◆Overseas markets with high growth potential ◆ China With the extraordinary levels of growth seen in emerging • Establishment of JV for Financial Education (Training)
Slide 28: 3. Businesses
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 27
Slide 29: Breakdown of Net Operating Revenues
Breakdown of Net Operating Revenues ■FYE Mar. 31, 2010 （12 months： from Apr. 2009 to Mar. 2010） （in million yen） Business Transactional Entity Management Fee Total % Refer to category commission fee 3,430 Monex, Inc. 10,494 Brokerage （Interest income from 13,924 70% p.29 ORIX Securities （Commissions
Slide 30: Equity Business: Big Leap After Merger
Equity Business: Big Leap After Merger ■Stock: Aim to get back market share ■Futures/Options: Giant step to top class ◆ More than 8% market share by Monex plus ORIX Sec. ◆ System-improvement for further growth ・Implement a variety of measures to minimize the decrease of ・Seamless trading in securiti
Slide 31: FX Business: Expanding Profit on a Growing Market
FX Business：Expanding Profit on a Growing Market ■Highlight of the 4th quarter ■Expanding trading profit continuously Revenue (miｌｌion yen) Trading volume (billion yen) ◆Monex, Inc.: FX PLUS ORIX FX 450 trading revenue added from 2,000 ・Developed new customer base and achieved 100 thousand comission
Slide 32: Mutual Fund Business
Mutual Fund Business ■Strengthen product lines and services to expand mutual fund asset ■Top-class online mutual fund sales ◆Keeping top-class position in online mutual fund sales ◆Released the new user-friendly system for monthly （billion yen Assets in custody by category and monthly sales volume （
Slide 33: Alternative Investments Business
Alternative Investments Business ■Excellent performance qualifies for institutions ■Institutional investor proof quality for retail investors ◆ The same quality service for both retail investors and institutional investors. ◆First institutional mandate from pension funds Existed channel Retail ・ Miz
Slide 34: Fixed Income and Stock Lending Businesses/Investment Banking Business
Fixed income and stock lending businesses/Investment Banking Business ■Fixed income and stock lending businesses ■Investment Banking Business ◆Fixed income： Released the online platform to buy and ◆IPO Underwriting Business (Monex, Inc.) sell issued notes, aiming to expand investment ･The only parti
Slide 35: R&D
R&D ■ R&D by Trade Science Corporation (TS) Positioned as an in-house laboratory for information science and financial engineering, TS plans to offer leading-edge financial services and products ◆ R&D of the Algorism-based asset management service - TS has hosted an open platform of a trading algori
Slide 36: Customer Portfolio of Monex, Inc.
Customer Portfolio of Monex, Inc. (947,114 accounts as of the end of Mar, 2010) ■ Sex ■ District Others Female 23.2% 25.4% Tokyo Metropolitan District Nagoya District 50.5% Male 8.5% 74.6% Osaka District 17.8% ■ Age ■ Occupation Over 70 3.8% Company Employee 46.7% 60s 12.6% Unemployed 17.6% Self-emp
Slide 37: Customer Data of ORIX Securities
Customer Data of ORIX Securities (372,347 accounts as of the end of Dec, 2009) ■ Sex ■ District Others Female 25.4% 21.7% 43.6% Nagoya District Tokyo Metropolitan Male 10.4% District 78.3% Osaka District 20.6% ■ Age ■ Occupation Company Employee 43.5% Over 70 4.5% 60s Unemployed 21.5% 13.4% Self-emp
Slide 38: 4. To our Shareholders
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 37
Slide 39: Investors' Guide
Investors’ Guide ■Pursuing investment returns for our shareholders ◆Basic policy for shareholder’s return Major shareholders and share distribution - The Company’s policy for shareholder’s return is to pay the - Jan. 17, 2010: 673,002 new shares issued for share dividends based on the business perf