Nomura Holdings, Inc. · TSE:8604
Nomura — Investor Day (December 2003)
46 slides from Nomura's investor day presentation, Dec 5, 2003
Slide 1: Investors' Day
INVESTORS’ DAY Nobuyuki Koga President & CEO Nomura Holdings, Inc. December 5, 2003 This is a summary of a presentation for INVESTORS’ DAY. Date: 5 December 2003 (Friday) Place: 7th floor Nomura Securities Co., Ltd. Speaker: Nobuyuki Koga President & CEO, Nomura Holdings, Inc. This document is produ
Slide 2: Outline of Presentation
Outline of Presentation I Business Environment This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2003 Nomura Holdings, Inc. All rights reserved. Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other
Slide 3: I Business Environment
I Business Environment lShift of Individual Financial Assets lAcceleration of Corporate Restructuring lMacroeconomic Changes II Review of Operating Results III Business Strategy lGroup Vision lDomestic Retail lAsset Management lGlobal Wholesale IV Corporate Governance 3 First, the business environme
Slide 4: Japan's Revival
Business Environment Macroeconomic Changes Shift of Individual Financial Assets Japan’s Revival Acceleration of Corporate Restructuring I Business Environment 4 There has been no change to our view of the business environment, namely that the key to Japan’s revival lies in the shift of individual fi
Slide 5: Shift of Individual Financial Assets (1)
Shift of Individual Financial Assets (1) Breakdown of Individual Financial Assets Japan Japan US US Total ¥ 1,385 trillion (2003.06) Total US$ 32 trillion (2003.06) Investment 2% Mutual Funds 12% Trusts Bonds 2% Bonds 8% Cash & Deposits 13% Equity 6% Equity 32% Cash & Insurance & Deposits Insurance
Slide 6: Shift of Individual Financial Assets (2)
Shift of Individual Financial Assets (2) (Trillions of yen) Net Flow of Investment in Foreign Assets by Individuals* (Yen/US$) 5 180 ¥/US$ (RHS) 160 4 140 3 ¥120/US$ 120 2 100 33 months months 1 80 0 60 -1 91.3 92.3 93.3 94.3 95.3 96.3 97.3 98.3 99.3 00.3 01.3 02.3 03.3 04.3 (FY) * Total net flow of
Slide 7: Shift of Individual Financial Assets (3)
Shift of Individual Financial Assets (3) FY 2003 Tax Reforms Related to Stock Transactions Jan 2003 Jan 2008 Capital gains on listed 26% 10% 20% stocks, etc (A) (B) (B) Apr 2003 Apr 2008 Dividends of listed stocks, Max 50% 10% 20% etc. (C) (D) (D) Interest income from 20% deposits (D) (A): Withholdi
Slide 8: Acceleration of Corporate Restructuring (1)
Acceleration of Corporate Restructuring (1) Unwinding of Cross Shareholdings (%) 35 30 33% Cross Shareholdings Ratio 25 21% 20 20% Individuals’ Shareholdings Ratio 18% 15 15% 10 Foreigners’ Shareholdings Ratio 5 5% 0 91.3 92.3 93.3 94.3 95.3 96.3 97.3 98.3 99.3 00.3 01.3 02.3 03.3 (FY) Note: The cro
Slide 9: Acceleration of Corporate Restructuring (2)
Acceleration of Corporate Restructuring (2) (No. of deals) M&A Deals 2,000 1,800 Group restructuring Strengthening existing business 1,600 Entering new markets 1,400 99 months months 1,200 1,000 800 600 400 200 0 95 96 97 98 99 00 01 02 03 (CY) Note: Calculated on a calendar year basis excluding fin
Slide 10: Acceleration of Corporate Restructuring (3)
Acceleration of Corporate Restructuring (3) (No. of deals) Rehabilitation-type Bankruptcy Procedures* 1,000 900 Civil Reorganization Law** Composition Law 800 99 months months Corporate Rehabilitation Law 700 600 500 400 300 200 100 0 90 91 92 93 94 95 96 97 98 99 00 01 02 0 3 (CY) * Source: Teikoku
Slide 11: Macroeconomic Changes (1)
Macroeconomic Changes (1) Real GDP (%) 2.5 Japan US UK Germany 2.0 1.5 1.0 0.5 0.0 -0.5 02.3 02.6 02.9 02.12 03.3 03.6 03.9 (CY) Source: Nomura Research Institute I Business Environment 11 I will now touch on macroeconomic changes. This graph shows real GDP, which has grown for seven straight quarte
Slide 12: Macroeconomic Changes (2)
Macroeconomic Changes (2) World Economic Outlook Units: % Sept Forecast Change from Apr Forecast 2001 2002 2003 2004 2003 2004 World 2.4 3.0 3.2 4.1 – – Japan 0.4 0.2 2.0 1.4 +1.2 +0.4 US 0.3 2.4 2.6 3.9 +0.4 +0.3 UK 2.1 1.9 1.7 2.4 0.3 0.1 Germany 0.8 0.2 0.0 1.5 0.5 0.4 Source: IMF World Economic
Slide 13: II Review of Operating Results
I Business Environment lShift of Individual Financial Assets lAcceleration of Corporate Restructuring lMacroeconomic Changes II Review of Operating Results III Business Strategy lGroup Vision lDomestic Retail lAsset Management lGlobal Wholesale IV Corporate Governance 13 Moving on, I will now review
Slide 14: Financial Results
Financial Results Historical Performance (%) (Billions of yen) 180 18 ROE (RHS) 159.3 160 16 Income before income taxes (LHS) 140 Net income (LHS) 14 120 11.1 12 10.4 100 10 86.5 84.0 86.7 7.4 80 8 60.0* 60 6 40 4 23.7 20 2 0 0 FY02.3 (1/2) FY03.3 (1/2) FY04.3 1H Note: Includes cumulative effect of
Slide 15: Income before Income Taxes by Segment
Income before Income Taxes by Segment (Billions of yen) 95.6 95.4 95 Total Income before Income FY02.3 (1/2) Taxes for 3 Business Segments FY03.3 (1/2) FY02.3 FY03.3 FY04.3 FY04.3 1H (1/2) (1/2) 1H 70 110.9 110.9 64.9 64.9 132.4 132.4 45.5 45 39.4 20 17.8 10.2 5.1 1.6 -2.4 -5 Domestic Retail Global
Slide 16: III Business Strategy
I Business Environment lShift of Individual Financial Assets lAcceleration of Corporate Restructuring lMacroeconomic Changes II Review of Operating Results III Business Strategy lGroup Vision lDomestic Retail lAsset Management lGlobal Wholesale IV Corporate Governance 16 I will now discuss our busin
Slide 17: Group Vision
Group Vision n Globally Competitive Japanese Financial Services Group n Maintain an Average Consolidated ROE of 10-15% over the Medium to Long Term III Business Strategy 17 Our Group vision is to become a globally competitive Japanese financial services group and maintain an average consolidated ROE
Slide 18: Domestic Retail
I Business Environment lShift of Individual Financial Assets lAcceleration of Corporate Restructuring lMacroeconomic Changes II Review of Operating Results III Business Strategy lGroup Vision lDomestic lDomestic RetailRetail lAsset Management lGlobal Wholesale IV Corporate Governance 18 I will now e
Slide 19: Goals & Strategy
Goals & Strategy Goals n Encourage the shift of individual financial assets concentrated in cash and deposits into risk assets n Broaden customer base Strategy n Further develop Core Value Formation Strategy III Business Strategy – Domestic Retail 19 Domestic Retail’s goal is to concentrate its reso
Slide 20: Shift of Individual Financial Assets into Risk Assets (1)
Shift of Individual Financial Assets into Risk Assets (1) (Trillions of yen) Foreign Currency Denominated Client Assets at Nomura* 6 5.1 5.1 tril tril yen yen 5 Up 95% 4 2.6 2.6 tril tril yen yen 3 2 1 0 FY01.3 FY02.3 FY03.3 FY04.3 * Foreign currency denominated assets = foreign currency bond assets
Slide 21: Shift of Individual Financial Assets into Risk Assets (2)
Shift of Individual Financial Assets into Risk Assets (2) (Billions of yen) Distribution of JGBs for Individual Investors 1000 Issue amount Amount distributed by post offices 800 % % Nomura’s share Amount distributed by Nomura 600 400 37% 37% 200 18% 18% 15% 10% 10% 15% 0 March April July September
Slide 22: Broadening Customer Base (1)
Broadening Customer Base (1) (Thousands of accounts) Increase in Equity Holding Accounts (Yen) 1,400 20,000 Nikkei Stock Average 1.32 1.32 million million accounts accounts at at end end of of Sept Sept 03 03 (of (of which, which, 53% 53% are are (RHS) ‘special ‘special accounts’ accounts’ for for s
Slide 23: Broadening Customer Base (2)
Broadening Customer Base (2) IT Share* (Thousands of accounts) 100% 1.215 1.215 million million accounts accounts 1,400 (Sept (Sept 03) 03) 90% IT share (LHS) 1,200 80% Online trading accounts (RHS) 70% 1,000 FY04.3 FY04.3 2Q 2Q 60% 46% 46% 800 50% 600 40% 30% 400 20% 200 10% 0% 0 FY00.3 FY01.3 FY02
Slide 24: Broadening Customer Base (3)
Broadening Customer Base (3) Client Assets (Domestic Retail Division, excluding financials) (Yen) (Trillions of yen) 25,000 Others 32.1 32.1 tril tril yen yen 31.3 31.3 tril tril yen yen Investment trusts (Jun (Jun 2000) 2000) (Sept (Sept 2003) 2003) Equities Domestic bonds 20,000 Foreign bonds 30 N
Slide 25: Broadening Customer Base (4)
Broadening Customer Base (4) Client Assets (Domestic Retail Division, including financials) (Trillions of yen) 37.2 37.2 tril tril yen yen 36.6 36.6 tril tril yen yen (Sept (Yen) 40 (Sept 89)89) (Sept (Sept 03) 03) 40,000 Nikkei Stock Average (RHS) 35,000 30 30,000 25,000 20 20,000 15,000 10 10,000
Slide 26: Broadening Customer Base (5)
Broadening Customer Base (5) Nomura Asset Management Fair n Largest event of its kind in Japan for individual investors n Various seminars held, ranging from the basics of investment consultation to application n IR booths set up so individual investors and corporate representatives can interact wit
Slide 27: Asset Management
I Business Environment lShift of Individual Financial Assets lAcceleration of Corporate Restructuring lMacroeconomic Changes II Review of Operating Results III Business Strategy lGroup Vision lDomestic Retail lAsset lAsset Management Management lGlobal Wholesale IV Corporate Governance 27 Now let’s
Slide 28: Goals & Strategy
Goals & Strategy Goals n Strengthen asset management business n Enhance defined contribution pension plan business Strategy n Improve performance and overall added-value, expand distribution channels, improve revenue yield and cost control n Expand pension administration share and increase the numbe
Slide 29: Strengthening Asset Management Business (1)
Strengthening Asset Management Business (1) NAM Share (Sept 03) Assets Under Management (NAM) (Trillions of yen) Bond Bond Investment Investment Trust Trust Share Share 25 Others Investment advisory No. 1 41% 20 Bond investment trusts Stock investment trusts 15.4 tril yen 15 Stock Stock Investment I
Slide 30: Strengthening Asset Management Business (2)
Strengthening Asset Management Business (2) Increase Number of Analysts to Expand Coverage Mar Mar 2003 2003 Sept Sept 2003 2003 No. No. of of Analysts Analysts 44 62 Stocks Stocks Covered Covered Japanese 600 740 +23% Stocks Overseas 250 360 +44% Stocks III Business Strategy – Asset Management 30 I
Slide 31: Strengthening Asset Management Business (3)
Strengthening Asset Management Business (3) Establish Product Committee Product Product Committee Committee Examine New Products Review Existing Funds e it ttyyppe Attractive Attractive Dividends Dividends Blue Blue Chip Chip Fund Fund 22 Unnit U (Established (Established in in April April at at 25.
Slide 32: Enhancing Defined Contribution Pension Plan Business (1)
Enhancing Defined Contribution Pension Plan Business (1) No. of Employees at US Pension Plan Assets Pension Administrators (US$ billions) (Thousands) 3000 3000 700 Defined benefit pension (LHS) Industry total Defined contribution pension (LHS) 600 2500 2500 Nomura S&P500 (RHS) 500 2000 2000 400 1500
Slide 33: Enhancing Defined Contribution Pension Plan Business (2)
Enhancing Defined Contribution Pension Plan Business (2) Number of Employees at Pension Administrators (end of Sept. 2003) Nomura DC Planning Co., Ltd.* (Nomura Group) Nippon Life Insurance Company No. No. of of employees employees 186,000 186,000 Defined Contribution Plan 28% 28% share share Consul
Slide 34: Global Wholesale
I Business Environment lShift of Individual Financial Assets lAcceleration of Corporate Restructuring lMacroeconomic Changes II Review of Operating Results III Business Strategy lGroup Vision lDomestic Retail lAsset Management lGlobal lGlobal Wholesale Wholesale IV Corporate Governance 34 Now, let’s
Slide 35: Goals & Strategy
Goals & Strategy Goals n Establish a globally competitive wholesale business division Strategy n Promote Japan-focused globalization n Capitalize on collective strengths of Domestic Retail and Global Wholesale III Business Strategy – Global Wholesale 35 Global Wholesale’s goal is to establish a glob
Slide 36: Changes to the Business Environment
Changes to the Business Environment Macroeconomic Changes and their Effect on Nomura’s Business Improved Business n Cash needs Confidence n Business acquisitions Stock Market n Unwinding of cross Recovery shareholdings n Equity finance n Demand for yen Change in the Yen Interest Rate Level denominat
Slide 37: Establishing a Globally Competitive Wholesale Business Division (1)
Establishing a Globally Competitive Wholesale Business Division (1) Equity Finance Equity Global Equity and Equity-Related League Table Secondary Offerings (2003.1.1 – 2003.9.30) n Daiwa House Industry Co., Ltd. Domestic and international equity and equity-related issues by Japan domiciled issuers.
Slide 38: Establishing a Globally Competitive Wholesale Business Division (2)
Establishing a Globally Competitive Wholesale Business Division (2) Cross CrossBorder BorderM&A M&A M&A League Table (2003.1.1 – 2003.9.30) (Announced Mergers & Acquisitions; Any Japanese Involvement) n Bosch Automotive Systems = Mkt. No. of Toyoda Machine Works Rank Advisor Share (%) Deals 1 Citigr
Slide 39: Establishing a Globally Competitive Wholesale Business Division (3)
Establishing a Globally Competitive Wholesale Business Division (3) Merchant Banking Exposure NPF (Billions of yen) Terra Firma 300 Nomura NomuraPrincipal PrincipalFinance Finance 19.2 14.3 16.1 250 n 8 deals (as of end of Sept 2003) n 2 exits 200 n New deals 150 l Toshiba Tungaloy 277.1 265.7 265.7
Slide 40: Capitalizing on Collective Strengths of Domestic Retail and Global Wholesale
Capitalizing on Collective Strengths of Domestic Retail and Global Wholesale Distribution of Foreign (Billions of yen) Currency Bonds to Individuals Large Large-scale -scale Foreign Foreign Currency Currency Bonds Bonds 1,400 1,200 n IFC €1 billion (Apr) 1,000 n Republic of Italy US$1.25 billion (Ap
Slide 41: IV Corporate Governance
I Business Environment lShift of Individual Financial Assets lAcceleration of Corporate Restructuring lMacroeconomic Changes II Review of Operating Results III Business Strategy lGroup Vision lDomestic Retail lAsset Management lGlobal Wholesale IV Corporate Governance 41 Lastly, I would now like to
Slide 42: Committee System
Committee System General GeneralMeeting Meeting of ofShareholders Shareholders Nomination NominationCommittee Committee Board Boardof ofDirectors Directors Audit AuditCommittee Committee President Compensation CompensationCommittee President&&CEO CEO Committee Purpose l To separate management and ov
Slide 43: Nomura Holdings Management Structure (1)
Nomura Holdings Management Structure (1) Board of Directors General GeneralMeeting Meeting of ofShareholders Shareholders Board Boardof ofDirectors Directors Directors Name Chairman Junichi Ujiie: Senior Managing Director Nobuyuki Koga: President & CEO Director (Representative Executive Officer) Pre
Slide 44: Nomura Holdings Management Structure (2)
Nomura Holdings Management Structure (2) Three Committees General GeneralMeeting Meeting Nomination Nomination of ofShareholders Shareholders Committee Committee nThree Directors Junichi Ujiie (including two outside directors) Board Boardof ofDirectors Directors Masaharu Shibata nDetermine the parti
Slide 45: Nomura Holdings Management Structure (3)
Nomura Holdings Management Structure (3) Business Decision Making Structure General GeneralMeeting Meeting of ofShareholders Shareholders Nomination Nomination Committee Committee Board Audit Audit Committee Committee Boardof ofDirectors Directors Compensation Compensation Committee Committee Board
Slide 46: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com 46 46