Nomura Holdings, Inc. · TSE:8604
Nomura — Investor Presentation (May 2002)
40 slides from Nomura's investor presentation, May 16, 2002
Slide 1: Investor Presentation
INVESTOR PRESENTATION Junichi Ujiie President & CEO, Nomura Holdings, Inc. May 2002 This is a summary of the Investor Presentation on May 2002. Date: May 16, 2002(Thursday) Place: Level 19, Urbannet Otemachi Building Speaker: Junichi Ujiie, President and Chief Executive Officer 1
Slide 2: Outline of the Presentation
Outline of the Presentation · Results of Operations · Business Environment · Group Vision & Business Execution · Strategies by Business · Corporate Governance 1. This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2002 Nomura Holdings, Inc. All rights reserved. 2. Nothing in thi
Slide 3: Results of Operations
Results of Operations Summary Segment Information 3
Slide 4: Results of Operations (1): Summary
Results of Operations (1) Summary Fiscal Year ended March 2002 (US GAAP) !Income before Income Taxes 173.0 billion yen (+11%*) !Net Income 168.0 billion yen (+193%*) !Total Assets 17,758.3 billion yen (+612.2 billion yen**) !Shareholders’ Shareholders’ Equity 1,604.9 billion yen (+168.5 billion yen*
Slide 5: Results of Operations (2): Segment Information
Results of Operations (2) Segment Information (Income before Income Taxes) FY01.3 (Billions of yen) FY02.3 300 252.7 250 200 191.3 150 100 50.8 50 20.5 20.5 10.2 0 Dom estic Retail G lobal W holesale Asset M anagem ent 5 During the reported period, income before income taxes was 20.5 billion yen for
Slide 6: Business Environment
Business Environment Shift of Financial Assets Acceleration of Corporate Restructuring 6
Slide 7: Shift of Financial Assets (1)
Business Environment Shift of Financial Assets (1) (YOY % ) 40 Demand Deposits (Individuals) Term Deposits (Individuals) 30 Demand Deposits (Corporate) 20 10 0 -10 -20 Term Deposits (Corporate) -30 M ar. Jun. Sep. Dec. M ar. Jun. Sep. Dec. M ar. 00 00 00 00 01 01 01 01 02 Source: NRI 7 This slide co
Slide 8: Shift of Financial Assets (2)
Business Environment Shift of Financial Assets(2) 12 (Trillions of yen) (Yen/$) 160 Individual Foreign Exchange Rate: Currency Deposits • LHS • 10 Yen/$ • RHS • Individual Foreign 140 8 Securities Investments • LHS • 6 120 4 100 2 0 80 Mar-90 Mar-91 Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 M
Slide 9: Shift of Financial Assets (3)
Business Environment Shift of Financial Assets (3) Net Cash Flow of Equity- Equity-type Investment Trusts (Trillions of yen) (Yen) 8 25,000 Net cash flow of equity-type 4 20,000 investment trusts (LHS) Nikkei Stock Average (RHS) 0 15,000 -4 10,000 -8 5,000 90 91 92 93 94 95 96 97 98 99 00 01 Source:
Slide 10: Acceleration of Corporate Restructuring (1)
Business Environment Acceleration of Corporate Restructuring (1) (No. of deals) 1,600 M&A by Japanese companies 1,400 Dom estic transactions C ross-border (targeting Japanese com panies) 1,200 1,000 800 600 400 200 0 90 91 92 93 94 95 96 97 98 99 00 01 Source: Nomura Securities Financial Research Ce
Slide 11: Acceleration of Corporate Restructuring (2)
Business Environment Acceleration of Corporate Restructuring (2) Share Buy- Buy-Backs* (Trillions of yen) 2.5 2.0 1.5 1.0 0.5 0.0 M ar.99 M ar.00 M ar.01 M ar.02 • Share buy- buy-backs include write- write-off purposes and issuance of stock options Source: Nomura Securities Financial Research Center
Slide 12: Acceleration of Corporate Restructuring (3)
Business Environment Acceleration of Corporate Restructuring (3) Net Aggregated Balance of Equity Transactions M ar.98 S ep.98 M ar.99 S ep.99 M ar.00 S ep.00 M ar.01 S ep.01 M ar.02 0 -1 -2 -3 -4 -5 Banks (city banks, regional banks, long-term -6 credit banks• -7 Business Corporations -8 (Trillions
Slide 13: Acceleration of Corporate Restructuring (4)
Business Environment Acceleration of Corporate Restructuring (4) (Trillions of yen) Securitization in Japan Real Estate 2.5 (CMBS, REIT) Housing Loans 2.0 Bonds (CBO) Consumer Credit & Loans 1.5 Auto Loans Equipment Leases 1.0 Others 0.5 0.0 1998 1999 2000 2001 Source: Nomura Securities 13 As this f
Slide 14: Group Vision & Business Execution
Group Vision & Business Execution Group Vision Business Execution Structure 14
Slide 15: Group Vision
Group Vision Globally Competitive Japanese Financial Services Group Focus · Broadening Business in Mother Market · Promotion of Japan- Japan-Focused Globalization · Enhancement of Asset Management Business Financial Target Average ROE of 10-15% over mid to long term 15 I would now like to discuss ou
Slide 16: Business Execution Structure
Business Execution Structure Strategic Strategic Management Management Nomura Holdings Committee Committee Advisory Advisory " " Examine Examine Business Business Plan Plan Board Board " " Capital Capital Allocation Allocation Domestic Retail Monitoring NVA, Other Global measurements Wholesale Busin
Slide 17: Strategies by Business
Strategies by Business Domestic Retail Global Wholesale Asset Management 17
Slide 18: Domestic Retail: Goals & Strategy
Domestic Retail Goals & Strategy Establish Strong Domestic Sales Base & Stable Profit Structure • Broaden Client Base • Diversify Product Mix 18 Our goal in Domestic Retail is to establish a strong sales base in the domestic retail market and create a profit structure less susceptible to the fluctua
Slide 19: Domestic Retail: Broaden Client Base (1)
Domestic Retail Broaden Client Base (1) Method to Broaden Client Base Enlarge Asset Builder Strengthen Consulting Business & Corporate Employee Client Base Improve Productivity Approach via by Utilizing IT Corporate Channel 19 We believe there are two methods to broadening our client base. First, we
Slide 20: Domestic Retail: Broaden Client Base (2)
Domestic Retail Broaden Client Base (2) Improving Productivity by Utilizing IT Nomura Clients Consulting Face- Face-to- to-Face High- High-Net- Net-Worth Call Center Customers Administrative Services IT Services Execution, settlement, Asset Builders administration of accounts, market information, et
Slide 21: Broaden Client Base (3): Approach via Corporate Channels (1)
Domestic Retail Broaden Client Base (3) – Approach via Corporate Channels (1) Our Approach via Employee Stock Ownership Plan (ESOP) Nomura Corporations Employees Number of Customers: Number of Customers’ Customers’ Employees: 3,000 companies 3 million (estimate) Number of ESOP Members: Number of 1.4
Slide 22: Broaden Client Base (4): Approach via Corporate Channels (2)
Domestic Retail Broaden Client Base (4) – Approach via Corporate Channels (2) Emergence of New Business Chances through Corporate Restructuring Restructuring # Business Re- Re-organization Demutualization New Investment Needs # Change of arising from Employment System Early Retirement Corporate Plan
Slide 23: Domestic Retail: Diversify Product Mix (1)
Domestic Retail Diversify Product Mix (1) Revenue Breakdown by Product 100% 14% 90% 24% 30% 80% 24% 70% 13% Investment trusts 16% 60% (administration fees) 10% 50% Investment trusts 15% 28% (distribution fees) 40% Bonds 30% 52% Equity 20% 40% 35% 10% 0% Mar.00 Mar.01 Mar.02 23 Next, I would like to
Slide 24: Domestic Retail: Diversify Product Mix (2)
Domestic Retail Diversify Product Mix (2) Investment Trust Lineup Nomura Fund Universe Total Return Cash Reserve Income Funds Funds MMF Nomura Bond Open Global Equity Free Financial Fund Nomura Short Term Global Bond Prime Fund Long- Long-term Bond Domestic Equity Investment Trust 24 Investment trus
Slide 25: Domestic Retail: Diversify Product Mix (3)
Domestic Retail Diversify Product Mix (3) Retail Client Assets in Foreign Currency Bonds 2.5 (Trillions of yen) 2 1.5 1 0.5 0 M ar.00 Jun.00 Sep.00 Dec.00 M ar.01 Jun.01 Sep.01 Dec.01 M ar.02 * All currencies converted into yen at end of month 25 As you can see from the graph, there has been a drama
Slide 26: Business Lines
Business Lines Domestic Retail Global Wholesale Asset Management 26
Slide 27: Global Wholesale: Goals & Strategy
Global Wholesale Goals & Strategy Establish Strong Presence in Japan Focusing on Global Business • Establishment of Global Product Supply System • Promotion of Solution Finding Financial Business 27 In Global Wholesale, we are establishing a global product supply system and strengthening solution-fi
Slide 28: Global Wholesale: Business Model
Global Wholesale Business Model Credit Creation by Banks Corporate Revival Securitization Debt Finance Domestic Japanese Cross- Cross-Share Overseas Bank Loans Risk Money Risk Money Investors Corporations Holdings Investors Unwinding of Equity Finance Cross- Cross-Share Holdings Corporate M&A Adviso
Slide 29: Global Product Supply System (1): Market Share
Global Wholesale Establishment of Global Product Supply System (1) Market Share (FY March 2002) Off-floor/Off-exchange Equity Trading* Secondary Bond Trading* 19% 14% Japanese Equity Japanese Equity IPO* Samurai Bonds** Public Offering* 34% 36% 38% Sources: *Nomura Securities **Thomson Financial, bo
Slide 30: Global Product Supply System (2)
Global Wholesale Establishment of Global Product Supply System (2) Retail Targeted Global Equity Offerings Foreign Currency Bonds Total Offering Amount* (Billions of yen) • Dentsu 300 • Daido Life 250 • N RI 200 150 100 Global Dollar Bonds 50 0 M ar.01** M ar.02 2Q 3Q 4Q • EIB • ADB • OKB 1Q * Lead
Slide 31: Solution Finding Financial Business (1): M&A Advisory
Global Wholesale Promote Solution Finding Financial Business (1) Enhance M&A Advisory Business Cross- Cross-Border M&A M&A Ranking(Jan. - Mar. 2002) · Japan Telecom- Telecom-Vodafone Rank Advisor Transaction Deals Amounts · Seiyu- Seiyu-Wal- Wal-Mart ($ Billion) · Taihei- Taihei-Citigroup 1 Nomura 8
Slide 32: Solution Finding Financial Business (2): Merchant Banking
Global Wholesale Promote Solution Finding Financial Business (2) Enhance Merchant Banking Business Increase MBO · CCI Domestic Investment · UHT Corporate Reorganization · Daikuma Corporate Revival · Fuji Car Manufacturing Restructuring of PFG Overseas Investment 32 Next, enhancing merchant banking b
Slide 33: Business Lines
Business Lines Domestic Retail Global Wholesale Asset Management 33
Slide 34: Asset Management: Goals & Strategy
Asset Management Goals & Strategy Enhance Asset Management Business · Enhance Product Mix · Strengthen Defined Contribution Pension Plan Business 34 The business environment surrounding asset management recently has undergone great changes on account of the introduction of the defined contribution p
Slide 35: Asset Management: Enhance Product Mix (1)
Asset Management Enhance Product Mix (1) Savings- Savings-type Investment Trusts Short Term Medium Term Cash Reserve MRF Bond Fund MMF FFF Nomura Short Term Nomura Short Term Income Funds Prime Fund Bond Open 35 As regards enhancement of product mix, we are actively re-shaping and developing our pro
Slide 36: Asset Management: Enhance Product Mix (2)
Asset Management Enhance Product Mix (2) ETF !Market Share (as of end of March 2002) TOPIX Type Nikkei 225 Type 89% 69% ! Develop Industry Index ETF # TOPIX Electric Appliances # TOPIX Transportation Equipment # TOPIX Banks Exchange Source: Nomura Securities 36 Additionally, NAM’s market share of th
Slide 37: Strengthen Defined Contribution Pension Plan Business (1)
Asset Management Strengthen Defined Contribution Pension Plan Business (1) Provide Efficient Services Utilizing Group Network # Utilize strong presence in ESOP market # Utilize know- know-how obtained from investment trusts and investment advisory business # Provide comprehensive services ! Customiz
Slide 38: Strengthen Defined Contribution Pension Plan Business (2)
Asset Management Strengthen Defined Contribution Pension Plan Business (2) Market Share (based on the number of employees at end of March 2002) Nomura 48% Source: Nomura Securities 38 Though our defined contribution pension scheme is still in its infancy, Nomura has a 48% share among pension adminis
Slide 39: Corporate Governance
Corporate Governance 39
Slide 40: Enhance Corporate Governance
Corporate Governance Enhance Corporate Governance •Outside Directors (2 out of 11) •Set Up Audit Committee (Includes outside directors) •Set Up Executive Compensation Committee (Outside directors form majority of committee) 40 I would like to say a few words on the measures we have been taking to en