Slide 1: Financial Results for Fiscal Year Ending March 31, 2018
April 26, 2018 (TSE 1st Section: 8698) Financial Results for Fiscal Year Ending March 31, 2018 This is an English translation of Japanese presentation materials prepared in connection with the disclosure of the financial results of Monex Group, Inc. It includes information derived from the consolida
Slide 2: Our Business Principles
Our Business Principles Always a step ahead of the “Y” in "MONEY," our name MONEX symbolizes our position as a forerunner in finance. In the face of an ever-changing future, the Monex Group utilizes state-of-the-art IT technologies and world-class financial expertise to design innovative ways of man
Slide 3: Table of Contents
Table of Contents Our Business Principles p. 1 Table of Contents p. 2 I. Highlights p.3 - p.13 II. Consolidated Performance p.14 - p.28 III. Business Update p.29 - p.35 IV. Mid- & Long-Term Initiatives p.36 - p.39 Appendix: Group Overview p.40 - p.49 2
Slide 4: I. Highlights
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-Term Initiatives Appendix. Group Overview 3
Slide 5: Business Overview 1/3
Business Overview 1/3 Monex Group Asia- Crypto-Asset Japan US Pacific Business EBITDA* EBITDA* EBITDA* Coincheck, Inc. ¥14.4B in FYE 2018 ¥2.9B in FYE 2018, ¥100M in FYE 2018 New member of (+114％ vs FYE 2017) ¥4.8B if 4Q is annualized Monex Group since April 2018 Monex, Inc. TradeStation Group, Inc.
Slide 6: Business Overview 2/3
Business Overview 2/3 US segment established a revenue base independent of market volatility and recorded EBITDA of ¥ 2.9 B. Coincheck, Inc. will help us build a business portfolio with global potential growth for our "New Beginning” ・Introducing in Nov 2017 a new equity margin trading commissions f
Slide 7: Business Overview 3/3
Business Overview 3/3 Coincheck, Inc. joined Monex Group as a wholly owned subsidiary on April 16, 2018 Financial performance of Coincheck, Inc. in FYE 2018 (Forecast) (Billion yen) FYE 2018 (12 months) Sales (Netting) * 62.6 Selling, general and administrative expenses 8.8 Crypto- Operating income
Slide 8: Revision of Shareholder Distribution Policy
Revision of Shareholder Distribution Policy Return total return ratio to 75% on a multi-year basis in FYE March 2019 ■Reason for the change ・ Since Coincheck, Inc. joined Monex Group in April 2018, we expect to make further investment for future growth of our group. For this and other reasons, the a
Slide 9: Highlights FYE Mar. 2018 (12 months) 1/3
Highlights FYE Mar. 2018 (12 months) 1/3 Significant revenue and profit increase in Japan, full-year profit and revenue increase in the US Total operating revenue after deducting financial expenses rose to ¥31.8B (+19%) due to an increase in brokerage commissions driven by high Japan volatility, an
Slide 10: Highlights FYE Mar. 2018 (12 months) 2/3
Highlights FYE Mar. 2018 (12 months) 2/3 ◆Total operating revenue after deducting financial expenses and quarterly profit attributable to owners of the Company (JPY million) Total operating revenue after deducting financial expenses Pre-tax Profit 8,631 Consolidated 60,000 Profit attributable to own
Slide 11: Highlights FYE Mar. 2018 (12 months) 3/3
Highlights FYE Mar. 2018 (12 months) 3/3 ◆Total operating revenue after deducting financial expenses and cost of sales and Segment profit Total operating revenue after deducting financial expenses and cost of sales US (JPY million) Segment profit 18,541 20,000 17,417 14,637 15,616 15,000 13,243 10,0
Slide 12: Highlights 4Q FYE Mar. 2018 (3 months) 1/3
Highlights 4Q FYE Mar. 2018 (3 months) 1/3 Profitability in all segments. US segment sees increased brokerage commissions driven by a hike in volatility Total operating revenue after deducting financial expenses increased to Japan ¥9.3B (+12%), driven by a gain on sales of venture investments and an
Slide 13: Highlights 4Q FYE Mar. 2018 (3 months) 2/3
Highlights 4Q FYE Mar. 2018 (3 months) 2/3 ◆Total operating revenue after deducting financial expenses and quarterly profit attributable to owners of the Company Total operating revenue after deducting financial expenses (JPY million) Consolidated Quarterly profit attributable to owners of the Compa
Slide 14: Highlights 4Q FYE Mar. 2018 (3 months) 3/3
Highlights 4Q FYE Mar. 2018 (3 months) 3/3 ◆Total operating revenue after deducting financial expenses and cost of sales and Segment profit (JPY million) US Total operating revenue after deducting financial expenses and cost of sales Segment profit, Pre-tax profit 6,000 4,791 4,569 4,223 4,167 4,236
Slide 15: II. Consolidated Performance
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-Term Initiatives Appendix. Group Overview 14
Slide 16: YoY Comparison (12 months) Consolidated Performance
YoY Comparison (12 months) Consolidated Performance (JPY million) FYE Mar. 2017 FYE Mar. 2018 Rate of (Apr. 2016 – (Apr. 2017 – Variance Reference change Mar. 2017) Mar. 2018) Total operating revenue after P17: Analysis of Japan segment deducting financial 41,852 49,155 7,303 17.4% P19: Analysis of
Slide 17: YoY Comparison (12 months) Segment Performance
YoY Comparison (12 months) Segment Performance (JPY million) Japan US Asia Pacific Rate of Rate of Rate of 2017/3 2018/3 change 2017/3 2018/3 2017/3 2018/3 change change Total operating revenue after deducting financial expenses 26,692 31,799 19.1% 15,616 17,417 11.5% 707 931 31.6% and cost of sales
Slide 18: YoY Analysis: Operating Revenue (Japan)
YoY Comparison (12 months) Analysis: Operating Revenue Japan： Revenue increased due to larger net financial income, increase in brokerage commissions and the license fee of our backbone system ■Total operating revenue after deducting financial expenses and cost of sales (compared to Apr. 2016 - Mar.
Slide 19: YoY Analysis: SG&A (Japan)
YoY Comparison (12 months) Analysis: SG&A Japan : Fixed cost(*1) per year decreased by ¥ 2.1B due to a migration to new backbone system ■SG&A (compared to Apr. 2016 – Mar. 2017) (JPY million) SG&A Total -6.4% (-1,616) 30,000 *figures in parenthesis is the variance from FYE Mar. 2017 (JPY million) 25
Slide 20: YoY Analysis: Operating Revenue (USD)
YoY Comparison (12 months) Analysis: Operating Revenue (USD) US：Increase in net financial income due to higher yields from rate increases on growing client cash balances. Brokerage commissions from options and futures trading increased ■ Total operating revenue after deducting financial expenses and
Slide 21: YoY Analysis: SG&A (USD)
YoY Comparison (12 months) Analysis: SG&A (USD) US：Higher advertising expenses led to record account growth. Commissions paid increased coupled with an increase of trading volume ■SG&A (compared to Apr. 2016 – Mar. 2017) SG&A Total 2.0% (+2,973) (USD thousand) *figures in parenthesis is the variance
Slide 22: QoQ Comparison (3 months) Consolidated Performance
QoQ Ccomparison (3 months) Consolidated Performance （JPY million） 3Q FYE Mar. 4Q FYE Mar. Rate of 2018 (Oct.- 2018 (Jan.- Variance change Reference Dec. 2017) Mar. 2018) Total operating revenue P23: Analysis of Japan segment after deducting financial 12,590 14,109 1,519 12.1% P25: Analysis of US seg
Slide 23: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance (JPY million) Japan US Asia Pacific 2018/3 2018/3 Rate of 2018/3 2018/3 Rate of 2018/3 2018/3 Rate of 3Q 4Q change 3Q 4Q change 3Q 4Q change Total operating revenue after deducting financial expenses and 8,368 9,330 11.5% 4,236 4,791 13.1% 222 243 9.5% c
Slide 24: QoQ Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan : Revenue increased due to gain on sales of investment in ventures ■Quarterly total operating revenue after deducting financial expenses and cost of sales Quarterly total operating revenue after (JPY million) 9,330 10,000 deducting financia
Slide 25: QoQ Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan : Despite the one-time expense(*1) related to office rent, fixed cost(*2) overall remains flat vs 3Q FYE 2018 ■Quarterly SG&A (JPY million) Quarterly SG&A 8.0％ (+472) 6,607 *figures in parenthesis is the variance from previous quarter 7,000 6,369 (JPY m
Slide 26: QoQ Analysis: Operating Revenue (USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US: Revenue increased. Volatility returned driving a significant increase in brokerage commissions, while net financial income remained high ■Quarterly total operating revenue after deducting financial expenses and cost of sales (USD thousa
Slide 27: QoQ Analysis: SG&A (USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US : Commissions paid increased in conjunction with higher brokerage commissions revenues generated from the higher market volatility ■Quarterly SG&A (USD thousand) Quarterly SG&A 1.5% (+571) *figures in parenthesis is the variance from previous quarter
Slide 28: Summary of Statement of Financial Position
Summary of Statement of Financial Position The difference between “Net capital” and “Non-current assets” is the source of funds for investments and shareholders distribution ◆ Summary of consolidated statement of financial position as of March 31, 2018 Assets Liabilities (*1) Non-current assets JPY
Slide 29: Shareholders' Distribution
Shareholders’ Distribution Return total return ratio (*1) to 75% on a multi-year basis since FYE Mar, 2019 ◆Total return amount(*2) and total return ratio ◆Return on Equity ratio （million yen） 12,000 Amount of acquisition of own shares(left) 900% 15% Amount of dividends (left) Total return ratio(rig
Slide 30: III. Business Update
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-Term Initiatives Appendix. Group Overview 29
Slide 31: Business Update Japan segment (1) Customer base expansion 1/2
Business Update Japan segment (1) Customer base expansion 1/2 Expanded customer base with new product development, our area of strength For active traders Japanese equities trading platform tool, TradeStation - High performance tool designed for active traders. Flat-rate plans at the lowest price le
Slide 32: Business Update Japan segment (2) Customer base expansion 2/2
Business Update Japan segment (2) Customer base expansion 2/2 Monex for Wealth Creation Services with various product lineup Wealth Creation Service - Investment balance is about ¥36B(*) including a wrap service (MSV LIFE) for individuals and investment entrusted by institutional investors - A licen
Slide 33: Japan segment (3) Customer base of Monex, Inc.
Business Update Japan segment (3) Customer base of Monex, Inc. Aiming to double equities commissions through acquisition of active traders as well as investors, Monex's main customer base Higher ratio than the average of the main online Larger than the average of the main online securities securitie
Slide 34: Business Update US segment (1)
Business Update US segment (1) Record high in new account openings. Revenue increase further driven by a rise in volatility and interest rate ■ Expanded services and customer base - Record number of active accounts driving increased client assets totaling $ 5.2 B in 4Q. Also, attrition rate dropped
Slide 35: Business Update US segment (2)
Business Update US segment (2) ■ Steady profit structure and a further increase in revenue by higher volatility and interest rates - Increased brokerage commission in 4Q due to high volatility of 17.4* (vs 10.3* in 3Q) - As an increase in volatility accelerated transactions in 4Q, Commission receive
Slide 36: Business Update Asia Pacific Segment
Business Update Asia Pacific Segment Explore business opportunities in Asia Pacific area ■ Launched online securities business operation in Australia - Monex Securities Australia Pty Ltd operates online securities business since January 2018 - The company makes use of the system of the HK-based brok
Slide 37: IV. Mid- & Long-Term Initiatives
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-Term Initiatives Appendix. Group Overview 36
Slide 38: MONEX's New Beginning
MONEX’s New Beginning Redefine finance for a new era. Support everyone’s investment and economic needs Using block chain technology, execute all the tradings of financial products and every financial transactions in Future of safety and at low cost. Creating our own block chain and finance, its ICO
Slide 39: Medium- to long-term strategy "Global Vision II-Bloom"
Our medium- to long-term management strategy “Global Vision Ⅱ- Bloom” Aim to improve margin to achieve business growth and a consolidated operating profit margin of 30% Listed Holding Company Monex Group will enhance its ability to oversee each region and segment to ensure the implementation of opti
Slide 40: Corporate Governance
Corporate Governance Establish global-standard corporate governance practices and emphasize on dialogue with retail/institutional investors Adoption of “company with three committees” structure - Highly effective executive management monitoring system - Adopted “company with committees” structure in
Slide 41: Appendix. Group Overview
I. Highlights II. Consolidated Performance III. Business Update IV. Mid- & Long-Term Initiatives Appendix. Group Overview 40
Slide 42: Group Overview – streams for Monex value
Group Overview – 3 streams for Monex value Three retail brands: “Monex”, “TradeStation”, and “BOOM” －Oki Matsumoto, a former partner at Goldman Sachs, established Monex and led the online brokerage industry as a pioneer in Japan Brand － Japan: “Monex” promotes long & diversified investment and is su
Slide 43: Group Overview – Customer accounts and operating revenue
Group Overview Japan: 1.76M accounts, US: 93K accounts, HK: 10K accounts. Monex has a global customer base Aim for continuous growth in the online brokerage business for retail investors as our core business ◆Consolidated Operating Revenue (JPY million) 600 Operating revenue in Asia-pacific segm
Slide 44: Group Overview – Revenues, Costs, Employees
Group Overview－Revenues, Costs: 60% from Japan, 40% from US; Employees: 40% in Japan, 60% in US ◆Total operating revenue after deducting financial expenses ◆SG&A by segment and by cost items by region and by business Others 2% Others 3% Financial income 9% Commissions Equities*1 paid 7% Options*1 AP
Slide 45: Group Overview – Corporate value creation process
Group Overview－Corporate value creation process As experts in finance, our personnel strive to expand customer base using IT technology 44
Slide 46: Group Overview - Investment portfolio
Group Overview - Investment portfolio Expanding investments in Fintech companies Information platform PFM*/Crowd Accounting Online life insurance /Curation invested in 2006 investedin2009 invested in 2012 Listedon Mar. 2012 Listedon Oct. 2016 on TSE Mothers Listedon Sep.2017 on TSE Mothers on TSE Mo
Slide 47: Monex Group structure
Monex Group (As of March 31, 2018) Listed Holding Company [Japan] [US/Europe] [Asia Pacific] Online Securities Company Monex International Limited Holding Company in Hong Kong TradeStation Group, Inc. Online Securities Company Holding Company in the U.S. Monex, Inc. Comprehensive investment service
Slide 48: Overview of Monex Group and Main Subsidiary Companies
Overview 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 capab
Slide 49: History of Monex Group
History of Monex Group Japan U.S. Asia Pacific 1982 - TradeStation Technologies, Inc. is formed as Omega Research, Inc. 1997 - TradeStation stock lists on NASDAQ - Boom Securities (H.K.) Limited is founded (now Monex Boom Securities (H.K.) Limited), becoming the first in Asia Pacific to launch Inter
Slide 50: Investors' Guide
Investors’ Guide ■Pursue returns to shareholders through ROE improvement ■Shareholders & indicators per share ◆ Our basic policy for shareholders distribution ◆Major shareholders and shareholder breakdown To provide returns to shareholders based on our business (as of Mar. 31, 2018) Monex Group, Inc