Nomura Holdings, Inc. · TSE:8604
Nomura — FY2014/15 Earnings Presentation
36 slides from Nomura's earnings presentation, April 2015
Slide 1: Overview of financial results for FY and 4Q March 2015
I will now give you an overview of our financial results for the full year and fourth quarter of the year ended March 2015 using the document titled “Consolidated Results of Operations”. Please turn to page two.
Slide 2: Outline
Outline Presentation NOMURA Financial Supplement Executive summary (p. 2-3) Overview of results (p. 4) Business segment results (p. 5) Retail (p. 6-7) Asset Management (p. 8-9) Wholesale (p. 10-12) Non-interest expenses (p. 13) Robust financial position (p. 14) Funding and liquidity (p. 15) Consolid
Slide 3: Full year results: revenues and income increased
For the full year, both revenues and income increased year on year with net income at the highest level since the year ended March 2006. Net revenue increased 3 percent to 1,604.2 billion yen. Income before income taxes remained strong at 346.8 billion yen, but declined 4 percent year on year due to
Slide 4: Fourth quarter rebound in international business
We saw a rebound in our international business, particularly in EMEA and the Americas, during the fourth quarter with net income at the highest level in two years. As shown in the graph on the bottom right, income before income taxes from our three business segments increased 68 percent quarter on q
Slide 5: Overview of results
WV Overview of results Highlights NOMURA (billions of yen, except EPS and ROE) 1 i 1 ' ! t 1 1 t FY2014/15 1 ' FY2014/15 1 4Q H hie Noy ' Full year H voy H \ i H 1 it H ' H Net revenue 434.5 H +2% +11% { 1,604.2 H 43% Non-interest expenses 329.6 4+7% +9% 1,257.4 45% Hi i i i Income before income tax
Slide 6: Business segment results
yv Business segment results Net revenue and income before income taxes NOMURA (billions of yen) Net revenue Income before income taxes (PREDIEIHTS QoQ YoY ae YoY Retail 5% +26% 476.5 -7% Asset Management 42% H7% 924 15% Wholesale 429% +17% 789.9 +3% | Subtotal +19% 1,358.7 40.1% _ Other -40% 220.6 H
Slide 7: Retail full year net revenue
Full year net revenue in Retail was 476.5 billion yen, which, although down 7 percent from the particularly strong previous year, was in line with expectations and demonstrates continued progress in transforming our business model. Retail client assets reached a record 109.5 trillion yen. We continu
Slide 8: Retail recurring revenue reaches target
Fourth quarter recurring revenue in Retail was 72 billion yen on an annualized basis, reaching our March 2016 target one year ahead of schedule. By focusing closer on meeting the needs of our clients, net inflows into discretionary investments and sales of insurance products have grown significantly
Slide 9: Asset Management record net revenue
Full-year net revenue increased 15 percent to a record 92.4 billion yen, and income before income taxes grew 18 percent to 32.1 billion yen. In the investment trust business, strong market conditions drove inflows into funds seeking income gains and funds for discretionary investments. International
Slide 10: Asset Management inflows and AUM
The graphs on the left show continued inflows mainly into investment trusts backed by our highly regarded investment management expertise. This helped drive an expansion in assets under management. The graph on the top right shows our share of public investment trusts at 24 percent, the highest sinc
Slide 11: Wholesale full-year net revenue
Wholesale reported full-year net revenue of 789.9 billion yen. There were some challenging market conditions during the year, such as in the third quarter, but we were able to overcome this to report a 3 percent increase in net revenue as growth in our client franchise and robust performance in AEJ
Slide 12: Global Markets results
In Global Markets, as shown in the graph on the right, full-year net revenue increased by 5 percent as Japan and AEJ offset a slowdown in EMEA and the Americas. Fourth quarter net revenue increased significantly, up 33 percent quarter on quarter to 199 billion yen. Fixed Income made a strong contrib
Slide 13: Investment Banking revenue
The graph on the top left shows fourth quarter net revenue of 32.4 billion yen, up 11 percent quarter on quarter. Gross revenue was 57.3 billion yen, representing the best revenue quarter since December 2010. Revenues in Japan remained roughly unchanged from last quarter, driven by multiple high-pro
Slide 14: Non-interest expenses
Full-year group-wide expenses were up 5 percent year on year at 1,257.4 billion yen. While this was mainly due to yen depreciation, other factors included an increase in commissions and floor brokerage due to higher trading volumes and the addition of consolidated subsidiaries. Expenses declined whe
Slide 15: Robust financial position
Total assets were 41.8 trillion yen, gross leverage was 15.4 times, and net leverage was 9.3 times. Our Basel III Tier 1 and Tier 1 common ratios were 12.9 percent, up from 12.5 percent at the end of December as risk assets declined, centered mostly on market risk. As shown on the top right, applyin
Slide 16: Conclusion
To conclude, we made progress in improving international profitability during the year and EPS grew 8 percent to 60 yen. The transformation of our Retail business is starting to deliver results and is having a spill on effect to our Asset Management business. We made significant progress over the pa
Slide 17: Financial Supplement
Financial Supplement
Slide 18: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits Liabilities Short-term borrowings Total payables and deposits Total loans and receivables Total collateralized financing Total collateralized agreements Irading liabilities Other liabilities Total trading assets" and private equity investments. L
Slide 19: Value at risk
Definition = From April 1, 2014 to March 31, 2015 (billions of yen) — 99% confidence level — Maximum: 9.8 - 1-day time horizon for outstanding portfolio = Minimum: = 3.1 — Inter-product price fluctuations considered — Average: 6.4 (billions of yen) Equity Interest rate 3.9 42 3.9 5.2 42 45 42 Foreig
Slide 20: Consolidated financial highlights
Consolidated financial highlights Full year Quarter billions of yen} billions of yen Coilfons of yen) g 99% 8.6% - 9x | st) ) 86% 9% so.” =m Net income attributable to NHI 8% eo | ots shareholders =e ROE(%) 3% 30 | 3% 0% 0 0% Net revenue 1,587.1 1,604.2 389.9 370.8 373.8 425.0 434.5 Income before in
Slide 21: Consolidated income
Full year Quarter (cillions of yen) “Pramas rranuaris “Fyaoiga FYROM Revenue Commissions 473.1 453.4 89.5 95.6 110.8 123.2 123.7 Fees from investment banking 91.3 95.1 27.2 19.8 20.6 28.8 25.8 Asset management and portfolio senice fees 168.7 203.4 425 46.1 497 53.3 54.3 Net gain on trading 476.4 531
Slide 22: Main revenue items
Full year Quarter Stock brokerage commissions (retail) 126.7 92.0 22.6 15.8 21.9 27.0 27.3 Stock brokerage commissions (other) 139.8 160.7 35.6 34.3 36.9 46.0 43.5 Other brokerage commissions 18.1 19.6 4.3 3.8 40 6.1 5.8 Commissions for distribution of investment trusts 157.8 134.3 19.3 30.5 37.5 32
Slide 23: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes (billions of yen) Full year Quarter 31.6 38.9 50.5 (a) Retail 192.0 161.8 23.3 40.9 Asset Management 27.1 32.1 5.3 8.3 78 9.3 6.7 Wholesale 111.8 82.2 33.5 5.7 22.2 0.5 53.8 Three Business segments total 330.9
Slide 24: Segment Other: income before income taxes
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 46.0 44.8 40.0 34.2 30.0 20.0 20.0 10,0 26 25 0.0 — — = “10.0 ae Net gain related to economic hedging transactions 17.4 15.4 65 6.9 22 6.4 0.3 Realized gain on investments in equity securities held for operating purposes al a
Slide 25: Retail results
Full year Quarter (eiltens ety) “Przone Prope 400 10 PQ QQ Commissions 300.2 258.9 46.1 55.4 67.5 70.6 65.3 TA Sales credit 106.1 106.4 26.4 25.0 25.9 30.0 25.4 15.3% Fees from investment banking and other 403 32.5 94 94 87 87 80 7.9% Investment trust administration fees and other 57.5 n9 143 15.0 1
Slide 26: Stock brokerage and investment trust commissions
Stock brokerage commissions and commissions for distribution of investment trusts Full year (billions of yen) 180 150 ™ Stock brokerage commissions 120 ™ Commissions for distribution of investment 90 oO AQ 10 26 158 Deen aan 27.0 27.3 trusts 60 30 0 Stock brokerage commissions 126.7 Commissions for
Slide 27: Retail client assets
Retail client assets (trillions of yen) 120 109.5 sie 409.5 = Other es 99.3 100 91.7 91.7 i = Overseas mutual funds 80 = Bond investment trusts Stock investment trusts 60 = Domestic bonds 40 "Foreign currency bonds 4, = Equities 0 Equities 53.2 67.2 53.2 55.6 58.1 62.2 67.2 Foreign currency bonds 6.
Slide 28: 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 (1). Cash and secunties inflows minus outfiows, excluding regional francial institutions, 27 27
Slide 29: Number of accounts
Number of accounts (Thousands) ([Tvaptar| | rvzorarts | [ev2otsiag || yao | Accounts with balance 5,144 5,256 5,144 5,186 5,211 5,238 5,256 Equity holding accounts 2,718 2,719 2,718 2,721 2,720 2,723 2,719 Nomura Home Trade / Net & Call accounts 4,012 4,216 4,012 4,053 4,103 4,154 4,216 New Individu
Slide 30: Asset Management results
Full year Quarter Fy2oivt4 0 FY2014/15 (ion of yen EBS Sa Net revenue 80.5 92.4 20.5 23.3 217 23.4 23.9 16.7% Non-interest expenses 53.4 60.3 15.1 15.1 13.9 14.1 17.2 22.2% 13.7% Income before income taxes 27.1 32.1 5.3 8.3 78 9.3 6.7 28.7% 25.4% Total assets under management (trillions of yen) 50.0
Slide 31: Assets under management by business
Assets under management (gross) by business* Asset inflows/outflows by business? (trillions of yen) {nvestment trust 284 349 284 296 313 339 349 Full year Quarter i (pas) FYING (billions of yen) a (4a )/ 10 || 20 sa) 40 | Investment trusts 1598 3,418 319 473 879 1,124 942 business business neste adv
Slide 32: Wholesale results
Wholesale (billions of yen) Full year Quarter Net revenue 765.1 789.9 198.5 188.9 190.6 178.9 231.5 29.4% 16.6% Non-interest expenses 653.3 707.7 165.0 183.1 168.4 178.5, 177.7 0.5% 7.7% Income before income taxes 111.8 82.2 33.5 5.7 22.2 05 53.8 119x 60.7% Breakdown of Wholesale revenues Full year
Slide 33: Private equity related investments
Private equity related investments (billions of yen) 70 60 57.2 56.4 87.2 58.8 58.6 58.7 ea ‘= Terra Firma : 50 BAsia 40 ™ Europe (excluding Terra Firma) 30 mJapan 20 10 0 Japan 81 10.6 8.1 10.8 13.2 10.8 10.6 Europe (excluding Terra Firma) 22.6 19.9 22.6 18 19.3 20.7 19.9 Asia 1.9 24 19 18 19 24 24
Slide 34: Number of employees
Japan (excluding FA) 14,149 14,144 14,149 14,559 14,391 44,290 14,144 Japan (FA) 1,888 4,829 1,888 1,889 1,853 1,853 1,829 Europe 3,461 3,485 3,461 3,481 3,530 3,539 3,485 Americas 2,281 2,449 2,281 2,335 2,421 2,445 2,449 Asia-Pacific! 5,891 6,765 5,891 6,656 6,744 6,762 6,765 Total 27,670 28,672 2
Slide 35: Disclaimer
Vv \ 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. Offer
Slide 36: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com