Slide 1: Financial Results for Fiscal Year Ending March 31, 2015
April 30, 2015 (TSE 1st Section: 8698) Financial Results for Fiscal Year Ending March 31, 2015 This is an English translation of Japanese presentation material prepared in connection with the disclosure of the financial results of Monex Group, Inc. It includes information derived from the consolidat
Slide 2: Our Business Principles
Our Business Principles "MONEX" stands for the future of finance, one step advanced from "MONEY" The Monex Group is aspiring to empower traders and investors worldwide with best of breed technology, education, service and financial professionalism to provide access to top financial markets globally
Slide 3: Table of Contents
Table of Contents Our Business Principles p. 1 Table of Contents p. 2 I. Highlights p. 3 - p.6 II. Consolidated Performance p.7 - p.17 III. Business Update p.18 - p.23 IV. Mid- & Long-term Strategy “Global Vision” p.24 - p.27 V. Corporate Governance p.28 - p.29 Appendix. Group Overview p. 30 - p. 38
Slide 4: I. Highlights
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-term Strategy “Global Vision” V. Corporate Governance Appendix. Group Overview 3
Slide 5: Highlights: Consolidated performance of FYE Mar. 2015
Highlights ■ Consolidated performance of FYE Mar. 2015 (1 Year) Though revenues and profit decreased mainly due to loss on business restructuring in 2Q, Japan and US showed a trend in revenue growth toward year-end JPY 3.0B of the JPY 6.9B decrease in net income is attributed to one-off factors ◆Rev
Slide 6: Highlights: Japan, US and China segments
Highlights ■Japan segment ・1 Year（12 months）Daily average trading value of individual investors in the two major stock exchanges in Tokyo and Nagoya declined 23% YoY while Monex brokerage commission fell 22% YoY. Revenues showed a growth trend toward the year-end. Customers’ assets recorded a histor
Slide 7: Monex corporate value and market cap
Monex Market Cap (graphic) Aim: Higher Monex corporate value and market cap by making US segment profitable during FYE Mar. 2016 and through steady progress of our mid-and long-term strategy, “Global Vision” 1,800 Potential corporate value generated Online brokerage business in China segment from gr
Slide 8: II. Consolidated Performance
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-term Strategy “Global Vision” V. Corporate Governance Appendix. Group Overview 7
Slide 9: Year (12 months) Consolidated performance
1 Year (12 months) Consolidated performance Of the JPY 6.9B decline in net income, JPY 3.0B was attributed to one-time factors, such as gain on sale of stock in the previous fiscal year and business restructuring losses in this fiscal year （JPY Million） FYE Mar. 2014 FYE Mar. 2015 Change (Apr. 2013-
Slide 10: Year (12 months) Segment performance
1 Year (12 months) Segment performance JPY 1.7B decrease in net income of US segment is mainly attributable to business restructuring losses related to the partial sale of the FX business (JPY million) Japan US China Change Change Change 2014/3 2015/3 2014/3 2015/3 2014/3 2015/3 (%) (%) (%) Total op
Slide 11: Analysis: Japan segment operating revenue and SG&A
1 Year (12 months) Analysis: Japan segment Operating revenue and SG&A Japan: Stock brokerage commissions decreased at same level as stock trading value of 2 exchanges ◆ Increase / decrease analysis of total operating revenue after deducting financial expenses (compared to Apr. 2013 – Mar. 2014) FYE
Slide 12: Analysis: US segment operating revenue and SG&A (USD)
1 Year (12 months) Analysis: US segment Operating revenue and SG&A (USD) US: Revenue from futures, options and net financial income increased. FX revenue decreased due to business restructuring losses ◆ Increase / decrease analysis of total operating revenue after deducting financial expenses (compa
Slide 13: 4Q (3 months) Consolidated performance
4Q (3 months) Consolidated performance Total operating revenue after deducting financial expenses down 4% (JPY million) 3Q FYE Mar. 2015 4Q FYE Mar. 2015 Change (Oct. 2014 – (Jan. 2015 – Analysis (%) Dec. 2014) Mar. 2015) Total operating revenue after Analysis of Japan segment: P14 12,803 12,331 -3.
Slide 14: 4Q (3 months) Segment performance
4Q (3 months) Segment performance US segment revenues increased 4% and SG&A declined 3% to reduce deficit (JPY million) Japan US China 2015/3 2015/3 Change 2015/3 2015/3 Change 2015/3 2015/3 Change 3Q 4Q (%) 3Q 4Q (%) 3Q 4Q (%) Total operating revenue after 8,837 8,198 -7.2％ 3,879 4,019 3.6％ 158 176
Slide 15: 4Q Analysis: Japan segment operating revenue and SG&A
4Q (3 months) Analysis: Japan segment Operating revenue and SG&A Japan: Revenue down due to changes in the fair value of securities. Expenses up temporarily towards future system replacement costs ◆ Increase / decrease analysis of total operating revenue after deducting financial expenses (compared
Slide 16: 4Q Analysis: US segment operating revenue and SG&A (USD)
4Q (3 months) Analysis: US segment and SG&A (USD) US: Revenue slightly up. Deficit smaller due to decreases in advertising and personnel expenses ◆ Increase / decrease analysis in total operating revenue after deducting financial expenses (compared to Oct. 2014 – Dec. 2014) USD +315K QoQ (+0.9%) 3Q
Slide 17: Summary of Statement of Financial Position
Summary of Statement of Financial Position The difference between “capital” and “non-current assets” is a source for investment and shareholders’ return ◆ Summary of consolidated statement of financial position as of March 31, 2015 Assets Liabilities (*1) Non-current assets JPY 1,055.2B JPY 968.3B P
Slide 18: Basic policy for Shareholders' return policy
Basic policy for Shareholders’ return policy Launched a more specific policy. Aim to achieve 75% of total return ratio (*1) on a multi-year basis and revised lower limit of dividend to 2% of DOE ◆Changes (See underlined) ◆Per share dividend and total return ratio FYE Mar. 2015 From FYE Mar. 2016 Bas
Slide 19: III. Business Update
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-term Strategy “Global Vision” V. Corporate Governance Appendix. Group Overview 18
Slide 20: Japan Segment Highlight
Japan Segment Highlight Stable revenue base. Aim to acquire more commission share by acquiring a new customer base ◆Stock brokerage commission share of Monex, Inc. ◆Stock brokerage commission value of major among 5 major online brokers online brokers (3Q FYE Mar. 2015 (3 months)) (from 3Q FYE Mar. 2
Slide 21: US Segment Highlight (1)
US Segment Highlight (1) Customers’ assets, a source of interest income, is steadily increasing. Net financial income improved by initiatives Net interest income will improve with executing initiatives below despite the continuing low interest rate environment (estimate as of April 2015) Interest ra
Slide 22: US Segment Highlight (2)
US Segment Highlight (2) The number of accounts increasing thanks to growing volatility. Establish a base for more revenue A 1pt increase in VIX brings additional USD 2.95M revenue (based on a regression analysis of commission data in Jan. 2009- Mar. 2015) ◆Number of active accounts excl. MT4 ◆VIX a
Slide 23: US Segment Highlight (3)
US Segment Highlight (3) Positive EBITDA in 4Q FYE Mar. 2015. Cost-cutting plan in progress since 2Q EBITDA became profitable in 4Q. Aim to realize positive quarterly net income during FYE Mar. 2016 Established a cost reduction plan of USD 17.2M (*) / year in Sep. 2014 (*) Compared to the basis of a
Slide 24: China Segment Highlight
China Segment Highlight Big tailwind for business development in mainland China ■A company to which we provide technical support started online brokerage business in PRC Big step towards being a part of the online brokerage business in mainland China ■Change in the “One person, One account” policy
Slide 25: IV. Mid- & Long-term Strategy "Global Vision"
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-term Strategy “Global Vision” V. Corporate Governance Appendix. Group Overview 24
Slide 26: Mid- & Long-term strategy "Global Vision"
Mid- & Long-term strategy “Global Vision” Globally pursue “mid- and long-term revenue growth” and “fixed-type cost reduction” ■ Mid- and long-term revenue growth - Work with group companies to develop and offer to retail investors differentiated products & services, such as the group-developed globa
Slide 27: Timeline of mid- & long-term strategy "Global Vision"
Timeline of mid- & long-term strategy “Global Vision” FYE Mar. 2013 FYE Mar. 2014 FYE Mar. 2015 FYE Mar. 2016 FYE Mar. 2017 FYE Mar. 2018 Completed project Ongoing project ●Nov. 2012 Upgraded U.S. equity service for Japanese customers Revenue Growth ●Dec. 2013 Started “Tokutei” accounts(*) for Japan
Slide 28: Cost-cutting plan in Global Vision
Cost-cutting plan in Global Vision Cost increase / decrease prospect from FYE Mar. 2013 Forecast as of Mar. 31, 2015, for fixed-type cost increases / decreases in consolidated SG&A, assuming FYE Mar. 2013 as the baseline Parallel operation of the new and old Japanese main brokerage systems *transfer
Slide 29: V. Corporate Governance
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-term Strategy “Global Vision” V. Corporate Governance Appendix. Group Overview 28
Slide 30: Corporate Governance
Corporate Governance Establish global-standard corporate governance practices and fair disclosure / discussion with shareholders and investors ■Highly effective executive management ■Respect for shareholders’ rights monitoring system (1) Appropriate and equal information disclosure (both (1) Clear d
Slide 31: Appendix. Group Overview
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-term Strategy “Global Vision” V. Corporate Governance Appendix. Group Overview 30
Slide 32: Group Overview – Global business expansion and sophisticated technological skills
Group Overview – Global business expansion and sophisticated technological skills We have a retail customer base in Japan, US and China (Hong Kong) 60% of 1,000 employees are in US. 50% of the US employees are engineers contributing to system internalization TradeStation’s trading platform has
Slide 33: Group Overview – Japan segment
Group Overview – Japan segment Since our establishment, we have promoted “long-term diversified investments” to acquire investors as our main customers. From now, we will also strive to acquire active traders Compared to our competitors, we have more investors who prefer mid- & long-term investmen
Slide 34: Group Overview – US segment
Group Overview – US segment Former system developer. Internally developed trading platform highly regarded by active traders ■Active traders are main customers. Revenue per account is at same level as peers ◆Commission per account comparison (annualized actual figures of 4Q FYE Mar. 2015) (USD) 2,00
Slide 35: Group Overview – China segment
Group Overview – China segment Aiming to establish online brokerage business in PRC by taking several initiatives in Hong Kong and PRC ■Ensure stable profitability of Monex BOOM Securities Group in Hong Kong With the development of Shanghai-Hong Kong Stock Connect, future revenue increase is expec
Slide 36: Monex Group
Monex Group (As of April 30, 2015) Listed Holding Company [Japan] [U.S./Europe] [China] Online Securities Company Monex International Limited Holding Company in Hong Kong Online Securities Company TradeStation Group, Inc. Holding Company in the U.S. Monex, Inc. Online Securities Company Comprehensiv
Slide 37: Introduction of Monex Group and main subsidiary companies
Introduction of Monex Group and main subsidiary companies ■ Monex Group, Inc. (Tokyo, Japan) TSE 1st Sec. Code: 8698 ■ TradeStation Group (HQ in Florida, U.S.) - Chairman, Representative Executive Officer & CEO: Oki Matsumoto Online securities group with award-winning trading technology development
Slide 38: History of Monex Group
History of Monex Group Japan U.S. China (Hong Kong) 1982 - TradeStation Technologies, Inc. formed as Omega Research, Inc. 1997 - TradeStation stock listed on NASDAQ - Boom Securities (H.K.) Limited was founded (now Monex Boom Securities (H.K.) Limited, being the first in Asia Pacific to launch Inter
Slide 39: Investors' Guide
Investors’ Guide ■Pursue returns to shareholders through ROE improvement ■Shareholders & indicators per share ◆ Our basic policy for shareholders’ return ◆Major shareholders and shareholder breakdown To provide returns to shareholders based on our business (as of March 31, 2015) performance, while r