Nomura Holdings, Inc. · TSE:8604
Nomura — FY2011 Earnings Presentation
39 slides from Nomura's earnings presentation, 2012
Slide 1: COO: Opening remarks
Shibata COO: Opening remarks As we did on the call last quarter, I will first say a few words and then hand over to our CFO, Junko Nakagawa, to discuss the highlights of our fourth quarter and full year results. We will then take your questions. In the fourth quarter, all business divisions were pro
Slide 2: Disclaimer
Disclaimer NOMURA 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. Offers to
Slide 3: Outline
Outline Presentation NOMURA Financial Supplement Executive summary (p. 3) Overview of results (p. 4) Business segment results (p. 5) Retail (p. 6-7) Asset Management (p. 8-9) Wholesale (p. 10-14) Non-interest expenses (p. 15) Progress of cost reduction program (p. 16) Robust financial position (p. 1
Slide 4: CFO: Results overview
Nakagawa CFO: Results overview I will now give you an overview of our results for the fourth quarter and full year ended March 2012. Please turn to page three of the document entitled “Consolidated Results of Operations”. Executive Summary All business divisions were profitable on a pretax basis in
Slide 5: Overview of results and business segment breakdown
Pages 4 and 5 give you an overview of results and a breakdown by business segment. Please turn to page 6 for an outline of results in the Retail segment. 4
Slide 6: Business segment results
Business segment results NOAURA Ls Net revenue and income (loss) before income taxes (billions of yen) H ao fie 0a YoY Ree YoY Net revenue Retail 92.4 +16% -4% 350.3 -11% Asset Management 15.7 +3% 9% 658 1% Wholesale 159.2 10% -15% 555.9 12% ‘Segment total 267.2 1% -11% 971.9 “11% Other! 221.8 463%
Slide 7: Retail
Retail Fourth quarter net revenue in Retail was 92.4 billion yen, an increase of 16 percent over the previous quarter. Income before income taxes jumped 101 percent to 20.3 billion yen. We further enhanced our product offering during the quarter and continued to offer consulting based services to re
Slide 8: Retail: Consulting-based sales
Retail: Consulting-based sales Total sales NOAURA (billions of yen) =Stocks =Bonds = Investmenttrusts =Others 3,000 2,000 1,000 nc — 4000 10 = Total sales: +19% QoQ . Investment trusts: Sales outstrip market growth \ded product offering, diversified asset classes and currencies - Diversified investm
Slide 9: Asset Management
Asset Management Asset Management results are shown on pages 8 and 9. Fourth quarter net revenue was 15.7 billion yen, up 3 percent quarter on quarter. Income before income taxes was down 3 percent at 4.1 billion yen. The increase in revenues was driven by a 2 trillion yen rise in assets under manag
Slide 10: Asset Management: Robust investment trust business, global recognition
Fund flows in public stock investment trusts’ 2 Asset Management: Robust investment trust business, global recognition NOMMURA Investment advisory assets under management*? (1) Nomura Asset Management only. (2) Source: Nomura, based on data from The Investment Trust Association, Japan (3) Based on r
Slide 11: Wholesale
Wholesale Net revenue in Wholesale declined 10 percent sequentially to 159.2 billion yen and income before income taxes declined 67 percent to 12.5 billion yen. However, excluding the gain related to our private equity business booked in the third quarter, revenues increased quarter on quarter. The
Slide 12: Global Markets
Global Markets Global Markets reported its best quarter for revenues in six quarters. Net revenue of 139.3 billion yen represents a 17 percent increase quarter on quarter. Income before income taxes jumped 140 percent to 20.2 billion yen. Fixed Income net revenue increased by 22 percent compared to
Slide 13: Wholesale revenues by region
Page 12 outlines half yearly revenues by region for Fixed Income and Equities. As you can see, Fixed Income and Equities revenues in our international business rebounded strongly in the second half of the year. Please turn to page 13 for Investment Banking. 12
Slide 14: Investment Banking
Investment Banking Investment Banking gross revenue declined 10 percent quarter on quarter to 40.5 billion yen. Although we reported a loss before income taxes of 7.6 billion yen, Investment Banking has made steady progress in reducing expenses, which have been trending down each quarter. Revenues f
Slide 15: Noteworthy deals
Page 14 shows some noteworthy deals on which we acted as joint bookrunner or advisor during the past year. As you can see in the middle, we acted as joint advisor to Xstrata on its 48.9 billion dollar merger with Glencore, the largest M&A transaction ever in the mining industry. And next to that on
Slide 16: Non-interest expenses
Non-interest expenses Fourth quarter non-interest expenses increased 18 percent sequentially to 438.2 billion yen, primarily due to an increase in the cost of goods sold on the back of robust real estate sales at our newly consolidated entities. Non-interest expenses excluding newly consolidated ent
Slide 17: Cost reduction program
Cost reduction program Our 1.2 billion dollar cost reduction program announced last July and November continues to progress as planned. We will continue to implement this program in order to lower our breakeven point. 16
Slide 18: Robust financial position
Robust financial position Turning now to our balance sheet on page 17, total assets at the end of the quarter was 35.7 trillion yen, gross leverage was 16.9 times and net leverage was 10.4 times. The bottom left shows that as of the end of March, our Tier 1 ratio under Basel 2.5 was 14.1 percent and
Slide 19: Funding and liquidity
Funding and liquidity The top left shows that 78 percent of our balance sheet is made up of highly liquid trading assets. About 80 percent of our unsecured funding is in the form of long-term debt and we ensure stability by diversifying our funding. Our liquidity portfolio at the end of March remain
Slide 20: Exposure to peripheral Europe
Exposure to peripheral Europe Our net country exposure at the end of March was 1.53 billion dollars, roughly flat compared to the 1.52 billion exposure at the end of December. Our inventory is all marked to market on a daily basis as trading assets and we manage our positions stringently. We will co
Slide 21: COO: Closing remarks
Shibata COO: Closing remarks We expect the revenue environment to remain challenging and the competitive environment to transform significantly. Given this, we will pursue a “narrow and deep” strategy focused on business areas where we can deliver added value to our clients. More specifically, our n
Slide 22: Consolidated balance sheet
Consolidated balance sheet NOMURA (billions of yen) Assets Liabilities Total cash and cash deposits Short-term borrowings Total payables and deposits Total loans and receivables Collateralized financing Trading liabilities Collateralized agreements Other liabilities Long-term borrowings Total tradin
Slide 23: Value at risk
Value at risk (billions of yen) = Definition = From April 1, 2011 to March 31, 2012 (billions of yen) ~ 99% confidence level (2.33 standard dev.) — Maximum: 9.7 ~ 1-day time horizon for outstanding portfolio ~ Minimum: 4.9 — Inter-product price fluctuations considered — Average: 6.5 NOMURA 42 38 26
Slide 24: Consolidated financial highlights
Consolidated financial highlights Full year NOMURA Quarter 200 ° ‘=== Net income ( loss) -200 —ROE (%) ~400 -600 -800 Net revenue Income (loss) before income taxes Net income (loss) attributable to Nomura Holdings, Inc. ("NHI") shareholders’ Total Nomura shareholders’ equity ROE (%)* Basic-Net incom
Slide 25: Consolidated income
Consolidated income NOMURA Full year Quarter Revenue Commissions 404.7 306.8 395.1 405.5 347.1 103.8 96.8 85.9 74.0 90.4 Fees from investment banking 85.1 55.0 121.3 107.0 59.6 278 13.8 13.8 17.2 14.8 Asset management and portfolio service fees 189.7 140.2 132.2 143.9 144.3 38.3 39.1 36.7 33.4 35.1
Slide 26: Main revenue items
Main revenue items NOMURA Full year Quarter “meee nar rae mae mage maa 4 10 QQ 4 Stock brokerage commissions (retail) 75.1 50.8 55.3 51.4 36.0 16.3 87 9.2 7.0 «14.4 Stock brokerage commissions (other) 166.6 144.7 140.3 144.6 132.7 37.7 34.2 34.4 32.3 31.8 Other brokerage commissions 9.3 7.9 8.0 11.5
Slide 27: Adjustment of consolidated results and segment results
Adjustment of consolidated results and segment results: Income (loss) before income taxes NOMURA Full year Quarter 113.4 101.2 (billions of yen) 31.4 44 15.2 20.0 20.5 63 74 47 42 44 150.1 717.3 175.2 67 37.6 29.4 14.9 -73.4 378 12.5 3.3 -695.0 303.8 127.9 46.1 53.4 14.6 -57.7 52.2 36.9 -18.1 62.1 -
Slide 28: Segment "Other"
Segment “Other” NOMURA Income (loss) before income taxes Full year Quarter (billions of yen) (billions of yen) . 35.4 - 40 21.0 15.4 13.9 0 et : = —_ 40. 18.4 A78 12.9 15.2 40 80 | 62.1 -80 -120 -120 -160 -160 -200 -200 -207.9 -240 -240 Net gain (loss) related to economic 14 280 33 23 84 24 15 42 77
Slide 29: Retail related data (1)
Retail related data (1) (billions of yen) Full year Quarter NOMURA Commissions 2259 151.0 2389 2448 2015 588 587 482 387 558 44.1% Sales credit 042 714 638 528 590 132 152 130 152 156 3.0% 18.3% Fees from investment banking 149 «134 «33604230 «382107 62S 137) BT (86.4% 18.2% Investment trust adminis
Slide 30: Stock brokerage commissions and investment trust distribution
Stock brokerage commissions and commissions for distribution of investment trusts’ Full year Quarter (billions of yen) (billions of yen) 180 70 150 50 120 - ™ Stock brokerage commissions 40 5 ™ Commissions for distribution of 0 | investment trusts 30 20 10 0 to) 8 2 gs 2 8 Stock brokerage commission
Slide 31: Retail client assets
Retail client assets Retail related data (3) Full year Quarter NOAURA (trillions of (tilions of yen) 2. Includes CBs and warrants. 3.__ includes annuity insurance. 1. Euroyen bonds have been moved from domestic bands to foreign currency bonds from the third quarter of the fiscal year ended March 31,
Slide 32: Retail related data (4)
Retail related data (4) Retail client assets: Net asset inflow’ NOMURA (billions of yen) 6,000 5,000 1. Net asset inflow = asset inflow — asset outflow. Retail client assets exclude portion from regional financial institutions. Full year Quarter (billions of yen) 4,000 5,279 4,868 4,928 3,000 4.000
Slide 33: Retail related data (5)
Retail related data (5) Number of accounts NOMURA (Thousands) Accounts with balance 4,165 4,467 4,883 4,936 4,945 4,954 4,966 4,985 Equity holding accounts 2,027 2,347 2,572 2,695 2,696 2,703 2,707 2,706 Nomura Home Trade / Net & Call accounts 2,765 3,095 3,189 3,328 3,348 3,369 3,745 3,773 New Indi
Slide 34: Asset Management related data (1)
Asset Management related data (1) NOAURA (billions of yen) a a a Te a Net revenue 81.1 51.9 62.1 66.5 65.8 17.3 18.8 16.0 15.3 15.7 26% -9.2% Non-interest expenses 50.0 478 46.8 46.5 45.3 11.0 11.4 11.2 11.4 11.6 48% 5.2% Income before income taxes 31.4 44 15.2 20.0 20.5 63 74 47 42 441 3.0% -34.4%
Slide 35: Asset Management related data (2)
Nomura Asset Management investment trust net assets under management' Asset Management related data (2) Domestic public investment trust market and Nomura Asset Management market share? NOAURA rent 98 95 81 (trillions of yen) 2 reporting. ‘Source: Investment Trusts Association, Japan trusts 65 81 94
Slide 36: Wholesale related data (1)
Wholesale related data (1) NOMURA Wholesale it a ae Se (olions of yen) ae ee ir a a oe Global Markets -157.3 658.4 460.7 137.0 130.1 118.7 139.3 17.3% Investment Banking 6.4 131.1 : 1 7 95.1 49.4 11.2 o 57.4 19.9 -65.4% om Net revenue -163.6 789.5 630.5 555.9 186.3 141.2 79.3 176.2 159.2 T% -14.6% N
Slide 37: Wholesale related data (2)
= Terra Firma =Asia ™ Europe (excluding Terra Firma) = Japan Japan Asia ‘Sub Total Terra Firma Total 600 500 400 300 Europe (excluding Terra Firma) Wholesale related data (2) Private equity related investments NOMURA Full year Quarter (billions of yen) 381.4 366.3 370.0 327.7 313.7 170.5 381.4 286.4
Slide 38: Number of employees
Number of employees NOMURA 3. Includes Powal office in India. 1. Excludes employees of private equity investee companies. 2. Figuresup to March 2008 include savings advisors. Japan (excluding FA)' 11,561 12,929 12,857 12,829 20,105 19,882 19,598 Japan (FA)? 2,377 2,391 2,196 2,089 2,096 2,078 2,048
Slide 39: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com NOMURA 38