Monex Group, Inc. · TSE:8698
Monex — Q1 FYE March 2024 Earnings Presentation
63 slides from Monex's earnings presentation, Jul 28, 2023
Slide 1: Financial Results for 1Q of Fiscal Year Ending March 31, 2024
TSE Prime : 8698 Monex Group Financial Results for 1Q of Fiscal Year Ending March 31, 2024 July 28, 2023
Slide 2: Corporate Philosophy
Corporate Philosophy Always a step ahead of the “Y” in “MONEY,” our name MONEX expresses our desire to embrace all people who are engaged at the forefront of our future. With state-of-the-art IT technology, globally universal values and a sense of professionalism, Monex Group designs innovative ways
Slide 3: Table of Contents
Corporate Philosophy p.1 Table of Contents p.2 Ⅰ. Highlights p.3 - p.9 Ⅱ. Consolidated Performance p.10 - p.29 Ⅲ. Business Update p.30 - p.47 Appendix: Group Overview p.48 -p.61 Disclaimer p.62 This is an English translation of Japanese presentation materials prepared in connection with the disclosu
Slide 4: I. Highlights
MONEX GROUP I . Highlights
Slide 5: Consolidated and Segment Adjusted EBITDA
Consolidated and Segment Adjusted EBITDA Adjusted EBITDA* on a consolidated basis continues to grow driven by growth in the Japan segment on the back of active Japanese equities market, strong performance in the U.S. segment, and cost controls in the Crypto Asset segment. Adjusted EBITDA (JPY Millio
Slide 6: Business Performance of the Japan Segment
Business Performance of the Japan Segment The steady growth in the revenue streams linked to the balance of respective assets in custody and the higher commissions from Japanese equities driven by the brisk market transactions contributed to a large increase in revenues and income. Quarterly Revenue
Slide 7: Business Performance of the US Segment
Business Performance of the US Segment Operating revenue* remained strong due to the steady trading from active traders, who are the main focus of TradeStation, and the favorable gains on management of cash deposits driven by higher rates. Quarterly Revenue and Profit of the US Segment (USD Million)
Slide 8: Business Performance of the Crypto Asset Segment
Business Performance of the Crypto Asset Segment Revenue declined QoQ as the IEO revenue in Q4 came off and the crypto asset market remained subdued, but the management continues to control SG&A appropriately. The crypto asset market is currently recovering and the management expects improvement of
Slide 9: Financial Interest Impact
Financial Interest Impact Financial interest impact Gains from management of customer cash in US dollars at Monex Gains from management of customer cash in US dollars in each segment Securities and TradeStation belong to the Monex Group*1,2. Customer (JPY Million) (USD Million) cash in US dollars at
Slide 10: Strategy Overview of Three Major Segments of Monex Group
Strategy Overview of Three Major Segments of Monex Group Each of Monex Securities, TradeStation, and Coincheck has its own solid enterprise value and strategy. Monex Group will continue to strive to make those values evident and secure the sustainable growth of its enterprise value by pursuing those
Slide 11: II. Consolidated Performance
Ⅱ. Consolidated Performance 10
Slide 12: Highlights 1Q of FYE Mar. 2024 (3 months)
Highlights 1Q of FYE Mar. 2024 (3 months) The Japan segment recorded higher revenue and income due to the brisk equity market and other factors, while the US segment continues to perform strong. Despite the Crypto Asset segment decreases its revenue and income, consolidated pre-tax income was ¥2.9B.
Slide 13: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance FYE Mar. 2023 FYE Mar. 2024 4Q 1Q Rate of (JPY million) Variance Reference change (Jan. 2023– Mar. 2023) (Apr. 2023– Jun. 2023) Total operating revenue after P14: Analysis of Japan segment deducting financial expenses and 19,033 20,203 +1,170 +6% P1
Slide 14: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2023/3 2024/3 2023/3 2024/3 2023/3 2024/3 2023/3 2024/3 2023/3 2024/3 4Q 1Q 4Q 1Q 4Q 1Q 4Q 1Q 4Q 1Q Total operating revenue after deducting financial expenses and cost of sales 7,589 8,976 9,675
Slide 15: QoQ Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan: Total revenue materially increased. Trading volume of Japanese equities spiked, resulting in an increase in brokerage commissions. Growth in stock lending business and success fees derived from the favorable performance of Monex Activist F
Slide 16: QoQ Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan: Larger transaction volume drove higher commissions paid and favorable business performance caused an increase in bonuses. System related expenses increased due to the several ongoing projects. ■ Total SG&A Quarterly SG&A Total +4.6％ (+322) * Figures in
Slide 17: QoQ Analysis: Operating Revenue (USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US: Total revenue in 1Q was at nearly the same level in 4Q. Commissions decreased due to lower trading volume. Net financial income increased as US interest rates continued to climb. ■ Total operating revenue after deducting financial expen
Slide 18: QoQ Analysis: SG&A (USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US: The increase in compensation and benefits was primarily driven by annual merit increases and higher long-term incentive expense associated with higher non-executive grants. ■ Total SG&A Quarterly SG&A Total +2.5％ (+1,461) *Figures in parenthesis ref
Slide 19: QoQ Analysis: Operating Revenue (Crypto)
QoQ Comparison (3 months) Analysis: Operating Revenue Crypto: Signs of a market recovery despite flat trading volumes. Revenue decreased as IEO related revenue was included in revenue in the previous quarter. ■ Total operating revenue after deducting financial expenses Quarterly total operating reve
Slide 20: QoQ Analysis: SG&A (Crypto)
QoQ Comparison (3 months) Analysis: SG&A Crypto: Total SG&A expenses decreased QoQ as a result of advertising budget management in response to current market conditions. ■ Total SG&A Total SG&A -7.3％ (-126) (JPY million) * Figures in parentheses indicate the variance from the previous quarter (JPY m
Slide 21: YoY Comparison (3 months) Consolidated Performance
YoY Comparison (3 months) Consolidated Performance 1Q of FYE Mar. 2023 1Q of FYE Mar. 2024 Rate of (JPY million) Variance Reference (Apr. 2022 – Jun. 2022) (Apr. 2023 – Jun. 2023) change Total operating revenue after P22: Analysis of Japan segment deducting financial expenses and cost 17,698 20,203
Slide 22: YoY Comparison (3 months) Segment Performance
YoY Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2023/3 2024/3 2023/3 2024/3 2023/3 2024/3 2023/3 2024/3 2023/3 2024/3 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q Total operating revenue after deducting financial expenses and cost of sales 7,345 8,976 6,918
Slide 23: YoY Analysis: Operating Revenue (Japan)
YoY Comparison (3 months) Analysis: Operating Revenue Japan: Increased revenue streams associated with the respective products’ balance such as mutual funds, stock lending and management of customers’ USD cash deposits. Asset gathering model has been in progress while gradually diversifying its reve
Slide 24: YoY Analysis: SG&A (Japan)
YoY Comparison (3 months) Analysis: SG&A Japan: Compensation and benefits increased due to a growth in headcount as a result of M&As. System related expenses increased driven by the launch of US equities margin trading service. ■ Total SG&A SG&A Total +15.1％ (+966) * Figures in parentheses indicate
Slide 25: YoY Analysis: Operating Revenue (USD)
YoY Comparison (3 months) Analysis: Operating Revenue (USD) US: Total revenue increased 32.5% YoY due to a significant increase in net financial income as a result of higher interest rates. Trading volume stayed steady despite lower VIX. Total operating revenue after deducting financial expenses and
Slide 26: YoY Analysis: SG&A (USD)
YoY Comparison (3 months) Analysis: SG&A (USD) US: Commissions paid and association dues increased primarily as a result an increase in the third- party pass-through exchange fees for futures customers. Significantly reduced advertising expenses as part of the re-focus strategy on the active traders
Slide 27: YoY Analysis: Operating Revenue (Crypto)
YoY Comparison (3 months) Analysis: Operating Revenue Crypto: Signs of a market recovery despite the decrease in trading volumes of crypto assets and NFT related revenue. ■ Total operating revenue after deducting financial expenses Total operating revenue after deducting financial expenses and and c
Slide 28: YoY Analysis: SG&A (Crypto)
YoY Comparison (3 months) Analysis: SG&A Crypto: Advertising expenses decreased about 75% YoY, by controlling advertising budget in response to current market conditions. ■ Total SG&A Total SG&A -40.6％ (-1,090) * Figures in parentheses indicate the variance from the previous year (JPY million) (JPY
Slide 29: History of Shareholders' Distribution
History of Shareholders’ Distribution Shareholder Return Policy: Stable dividend payments and flexible buybacks of shares, while investing in the long-term growth. ◆ History of dividend per share ◆ Return on equity ratio (JPY) Five Years Average ROE 7.9% 18% Interim Year-end 17.3% 20 15% 13.4% 12.9%
Slide 30: Investors' Guide
Investors’ Guide Shareholders distribution Shareholders & indicators per share ◆ Our basic policy for shareholders distribution ◆ Major shareholders and shareholder breakdown (as of Mar. 31, 2023) To ensure shareholder return, we will consistently offer dividend of 7.5 yen or Monex Group, Inc. 0.6%
Slide 31: III. Business Update
MONEX GROUP IT. Business Update 30
Slide 32: Business Update Japan Segment 1/5
Business Update Japan Segment 1/5 Customer assets* have continued to grow since the announcement of the asset gathering model, exceeding 7 trillion yen as of June 2023. Customer Assets (As of June 31, 2023) Customer Assets by Product in the Japan Segment (JPY Trillion) 8 Japanese Equities Others 7.1
Slide 33: Business Update Japan Segment 2/5
Business Update Japan Segment 2/5 Revenue stream has become more diversified at Monex Securities due to the steady increase of revenues other than Japanese equities brokerage commissions. Total Operating Revenue at Monex Securities Financial Income FX and Fixed Income Others Mutual Fund Related Reve
Slide 34: Business Update Japan Segment 3/5
Business Update Japan Segment 3/5 Financial instrument intermediary business partnership between Monex Securities and AEON Bank is in progress toward the transfer of accounts and mutual fund balances in January 2024. Broadening Number of investment activity AEON Bank accounts Client In-house backbon
Slide 35: Business Update Japan Segment 4/5
Business Update Japan Segment 4/5 Expanded the balance of mutual fund using periodic investment service. IFA (Independent Financial Advisors) and wealth management business is steadily growing. Mutual Funds IFA / Wealth Management (WM) • The number of accounts holding mutual fund balances • Launched
Slide 36: Business Update Japan Segment 5/5
Business Update Japan Segment 5/5 Asset under management (AUM) of Monex Asset Management exceeded ¥300B. Robo-advisor service “ON COMPASS+” to become available under the new NISA program from 2024 ■ Robo-advisor services Asset Under Management (JPY Billion) Total AUM ON COMPASS 1 3500 Robo-advisor s
Slide 37: Business Update US Segment 1/4
Business Update US Segment 1/4 Trading from active customers remained steady despite lower VIX and rising interest rates. Brokerage commissions and other commissions Brokerage commissions decreased due to a decrease in futures trading and options trading. Other commissions remains stable as the decl
Slide 38: Business Update US Segment 2/4
Business Update US Segment 2/4 Net interest income from customer deposits increased as US interest rates continued to climb. Interest on customer cash Interest income from customer cash deposits belongs to TradeStation and is recorded as net financial income. About 50% of customer cash invested at f
Slide 39: Business Update US Segment 3/4
Business Update US Segment 3/4 The number of main target customers* of TradeStation is steadily growing. The number of main target customers and its percentage of total customers Continuing to increase the main target customers by growing them by 48% from the same quarter previous year Main target c
Slide 40: Business Update US Segment 4/4
Business Update US Segment 4/4 TradeStation captures active traders through organic marketing and third-party referral partners. Customers Revenue* by Funnel Source ・Both organic customers revenue and third-party referral customers revenue are growing. ・Third-party referral customers revenue as a pe
Slide 41: Business Update Crypto Asset Segment 1/5
Business Update Crypto Asset Segment 1/5 Expanding institutional business by leveraging the strong retail customer base of exchange/marketplace Digital Asset Ecosystem Exchange/Marketplace Exchange/ Marketplace Possess a solid industry position and the large retail customer base as a leading crypto
Slide 42: Business Update Crypto Asset Segment 2/5
Business Update Crypto Asset Segment 2/5 Coincheck is Japan’s premier and trusted crypto assets trading platform. Crypto asset exchange / marketplace App Downloads Leading market share with 25%*2 Number of tokens supported No.1 domestic market share for 4 consecutive years1 share of verified account
Slide 43: Business Update Crypto Asset Segment 3/5
Business Update Crypto Asset Segment 3/5 Diversifying our earnings based on the large retail customer base as a crypto asset trading platform. Coincheck Initial Exchange Offering (IEO) Coincheck is a leading player in the Japanese IEO market, completing the largest number of IEOs 1st IEO - PLT 2nd I
Slide 44: Business Update Crypto Asset Segment 4/5
Business Update Crypto Asset Segment 4/5 Coincheck Group (CCG)*1 is proceeding with listing procedures. We plan to be listed on Nasdaq to secure global talent and business opportunities - After the proposed business combination with Nasdaq-listed SPAC, Thunder Bridge Capital Partners IV, Inc. (THCP)
Slide 45: Business Update Crypto Asset Segment 5/5
Business Update Crypto Asset Segment 5/5 The crypto asset industry has seen notable recovery in 2023 2023 YTD price movement*1 Recent developments in the crypto sector ・Bitcoin ETF application by major asset manager +457% (BlackRock, Fidelity, Invesco, etc.) – June 2023 ・The case of Ripple Labs vs S
Slide 46: Business Update Asia Pacific and Investment Segment
Business Update Asia Pacific and Investment Segment The Social Impact Investment Fund received additional funding with a total of ¥3.7B under management. The fund has officially started its investment phase. Asia Pacific Segment Investment Segment Monex Boom Securities (H.K.) Limited Social Impact I
Slide 47: Business Initiatives on AI
Business Initiatives on AI Explore the opportunities surrounding AI at each group company to improve business efficiency Initiatives in each segment Business related to generative AI Crafter Co. Ltd. launched a service, CREW, that Monex Securities provides institutional players with a safe access to
Slide 48: Business Update ESG and Sustainability
Business Update ESG and Sustainability Promote sustainability management by enhancing ESG disclosures Selected as a component of FTSE Blossom Japan Index Added to ESG Index adopted by GPIF* New disclosure on the Securities Report • Newly selected as a component of FTSE • Disclosed the concept and st
Slide 49: Appendix: Group Overview
MONEX GROUP Appendix: Group Overview 48
Slide 50: Appendix: Highlights 1Q of FYE Mar. 2024 (3 months) 1/3
Appendix: Highlights 1Q of FYE Mar. 2024 (3 months) 1/3 ◆Total operating revenue after deducting financial expenses and cost of sales, and quarterly profit attributable to owners of the Company Total operating revenue after deducting financial expenses and cost of sales Quarterly profit attributable
Slide 51: Appendix: Highlights 1Q of FYE Mar. 2024 (3 months) 2/3
Appendix: Highlights 1Q of FYE Mar. 2024 (3 months) 2/3 ◆Total operating revenue after deducting financial expenses and cost of sales, and Segment profit (JPY Million) Total operating revenue after deducting financial expenses and cost of sales Segment profit (Quarterly profit before income taxes) 1
Slide 52: Appendix: Highlights 1Q of FYE Mar. 2024 (3 months) 3/3
Appendix: Highlights 1Q of FYE Mar. 2024 (3 months) 3/3 ◆Total operating revenue after deducting financial expenses, and Segment profit (JPY Million) Total operating revenue after deducting financial expense Segment profit (Quarterly profit before income taxes) 800 Asia 600 Pacific 400 287 263 255 2
Slide 53: Consolidated balance sheet
Consolidated balance sheet Key points of Monex Group’s consolidated balance sheet of Monex 1. Actual net debt is ¥10.6B for the holding company Monex Group, Inc., which does not engage in securities transactions, etc. 2. Trust assets, which are segregated deposits received from customers and guarant
Slide 54: Corporate Governance
Corporate Governance Established global-standard corporate governance practices and emphasis on dialogue with retail/institutional investors. Adoption of “company with three committees” structure - highly effective executive management monitoring system - Adopted “company with committees” structure
Slide 55: Overview of Monex Group and Main Subsidiaries
Overview of Monex Group and Main Subsidiaries ■ Monex, Inc. (Tokyo, Japan) ■ Coincheck, Inc. (Tokyo, Japan) One of the major online brokerage firms in Japan Crypto asset Exchange/Marketplace agency that is ranked No.1 in crypto asset • President : Yuko Seimei trading app downloads in Japan for 4 con
Slide 56: Group Overview of the Group
Group Overview of the Group Listed Holding Company [ Japan Segment ] [ US Segment ] [ Crypto Asset Segment ] Online Brokerage Asset Management Crypto Asset Exchange Agency Monex, Inc. Monex Asset Management, Inc. TradeStation Group, Inc. Coincheck, Inc. Comprehensive investment service provider Smal
Slide 57: Group Overview - Revenues, Costs, and Employees
Group Overview - Revenues, Costs, and Employees Five Segments Contribution in FYE Mar. 2023 ■ Japan Segment Total operating revenue Selling, general and ■ US Segment after deducting financial expenses administrative expenses ■ Crypto Asset Segment 1% 0% 2% 0% ■ Asia Pacific Segment 10% 11% ■ Investm
Slide 58: Investment Segment – Portfolio 1/4
Investment Segment – Portfolio 1/4 ◆ Monex Ventures, Inc. ◆ MONEX EDISON Investment Limited Partnership 57
Slide 59: Investment Segment – Portfolio 2/4
Investment Segment – Portfolio 2/4 ◆ MV I Investment Limited Partnership 58
Slide 60: Investment Segment – Portfolio 3/4
Investment Segment – Portfolio 3/4 ◆ MV I Investment Limited Partnership ◆ MV II Investment Limited Partnership 59
Slide 61: Investment Segment – Portfolio 4/4
Investment Segment – Portfolio 4/4 ◆ Social Impact Investment Fund 60
Slide 62: Disclaimer
Disclaimer About Coincheck Important Information About the Business Combination and Where to Find It In connection with the proposed business combination in connection with to the business combination agreement among Coincheck, Inc. (“Coincheck”), Coincheck Group B.V. (“CCG”), Thunder Bridge Capital
Slide 63: © Monex Group, Inc.
© Monex Group, Inc. www.monexgroup.jp/
Monex Group — Q1 FYE March 2024 Earnings Presentation on 6ix