Monex Group, Inc. · TSE:8698
Monex — Q3 FY2024 Earnings Presentation
67 slides from Monex's earnings presentation, Jan 31, 2024
Slide 1: Financial Results for 3Q of Fiscal Year Ending March 31, 2024
TSE Prime : 8698 Monex Group Financial Results for 3Q of Fiscal Year Ending March 31, 2024 January 31, 2024
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.12 Ⅱ. Consolidated Performance p.13 - p.31 Ⅲ. Business Update p.32 - p.50 Appendix: Group Overview p.51 -p.65 Disclaimer p.66 This is an English translation of Japanese presentation materials prepared in connection with the disclos
Slide 4: I. Highlights
MONEX GROUP I . Highlights
Slide 5: Strategy Overview of Monex Group
Strategy Overview of Monex Group Through business alliances, Monex Securities is promoting the nationwide trend of democratizing asset formation. Monex Group will foster the growth strategy of each group company and strengthen the Company’s growth investments to further enhance its enterprise value.
Slide 6: Impact of Capital Business Alliance with NTT DOCOMO
Impact of Capital Business Alliance with NTT DOCOMO With the Capital Business Alliance with NTT DOCOMO, Monex Securities will acquire a drastic growth opportunity. The Company intends to use a portion of the funds obtained from the sale of shares for growth investment, aiming to achieve stable growt
Slide 7: Transaction Overview
Transaction Overview By utilizing the funds from the partial transfer to NTT DOCOMO of shares in the intermediate holding company established through the alliance, Monex Group plans to increase enterprise value through growth investments and enhance shareholder returns Capital relationship*2 Funds a
Slide 8: Use of Capital: Change in Shareholder Distribution Policy
Use of Capital Change in Shareholder Distribution Policy on and after Jan. 4, 2024*1. While continuing to pay stable dividends to shareholders, the Company will accelerate its growth strategy. • Double the minimum amount of annual dividend per share from JPY15 to JPY30. • Launch share buyback progra
Slide 9: Consolidated and Segment Profit Attributable to Owners of the Company
Consolidated and Segment Profit Attributable to Owners of the Company Stable business foundation of the Japan segment, strong performance of the US segment, and a return to profitability of the Crypto Asset segment resulted in significant growth in the consolidated quarterly profit attributable to o
Slide 10: Business Performance of the Japan Segment
Business Performance of the Japan Segment Steady growth in net financial income and mutual fund related revenues that is linked to client deposits. Diverse product offerings generate complementary revenues and stable profits even in various market environments. Quarterly Revenue and Profit of the Ja
Slide 11: Business Performance of the US Segment
Business Performance of the US Segment Segment profit 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. (USD Million) Quarterly Revenue and Profit of the US Segment (US
Slide 12: Business Performance of the Crypto Asset Segment
Business Performance of the Crypto Asset Segment Returned to profitability for the 3 months(Oct. 2023- Dec. 2023) and the 9 months (Apr. 2023- Dec. 2023) due to the cost controls implemented by Management and the recovery of the crypto asset market. Quarterly Revenue and Profit of the Crypto Asset S
Slide 13: Acquisition of Shares of 3iQ Digital Holdings Inc.
Acquisition of Shares of 3iQ Digital Holdings Inc. Announced the acquisition of a Canadian crypto asset management company, 3iQ Digital Holdings Inc. Aims to capture the crypto asset management needs of institutional investors and exchanges around the world, which are expected to grow in the future.
Slide 14: II. Consolidated Performance
Ⅱ. Consolidated Performance 13
Slide 15: Highlights 3Q of FYE Mar. 2024 (3 months)
Highlights 3Q of FYE Mar. 2024 (3 months) The Japan segment generated stable revenue due to a growth in recurring revenues and the US segment continued to perform well. The Crypto Asset segment returned to profitability, resulting in a consolidated quarterly profit* of ¥2.3B. Revenue increased due t
Slide 16: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance FYE Mar. 2023 FYE Mar. 2024 2Q 3Q Rate of (JPY million) Variance Reference change (Jul. 2023– Sep. 2023) (Oct. 2023– Dec. 2023) Total operating revenue after P17: Analysis of Japan segment deducting financial expenses and 20,749 21,369 +620 +3% P19:
Slide 17: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2024/3 2024/3 2024/3 2024/3 2024/3 2024/3 2024/3 2024/3 2024/3 2024/3 2Q 3Q 2Q 3Q 2Q 3Q 2Q 3Q 2Q 3Q Total operating revenue after deducting financial expenses and cost of sales 8,922 9,029 10,44
Slide 18: QoQ Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan: Recurring revenues, such as margin interest, stock lending revenue and mutual fund related revenues, increased. Fixed income revenues via IFAs and FX revenue were also brisk, leading to growth in total revenues. ■ Total operating revenue a
Slide 19: QoQ Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan: System-related expenses increased, partially driven by higher depreciation costs due to an ongoing system development project. Advertising expenses rose due to the strengthening of digital marketing. ■ Total SG&A Quarterly SG&A Total +2.8％ (+213) *Figu
Slide 20: QoQ Analysis: Operating Revenue (US, USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US: Total revenue declined slightly from the previous quarter. Commissions remained steady and net financial income on client cash was strong as US interest rates stayed at elevated levels, though down from the previous quarter due to weake
Slide 21: QoQ Analysis: SG&A (US, USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US: Total expenses decreased QoQ due to a decline in bonus expense, despite an increase in communication expenses from one-time market data fees paid to NYSE. ■ Total SG&A Quarterly SG&A Total -0.2％ (-136) *Figures in parenthesis reflect the variance fr
Slide 22: QoQ Analysis: Operating Revenue (Crypto)
QoQ Comparison (3 months) Analysis: Operating Revenue Crypto: Higher crypto asset values driving an increase in volume and net trading income. ■ Total operating revenue after deducting financial expenses Quarterly total operating revenue after deducting financial and cost of sales expenses and cost
Slide 23: QoQ Analysis: SG&A (Crypto)
QoQ Comparison (3 months) Analysis: SG&A Crypto: Continued SG&A cost discipline through the reduction of the fixed cost base. ■ Total SG&A Total SG&A +9.1％ (+136) (JPY million) *Figures in parentheses indicate the variance from the previous quarter (JPY million) 2,000 1,799 1,718 ■ Other (+144)*1 1,
Slide 24: YoY Comparison (9 months) Consolidated Performance
YoY Comparison (9 months) Consolidated Performance 3Q of FYE Mar. 2023 3Q of FYE Mar. 2024 Rate of (JPY million) Variance Reference (Apr. 2022 – Dec. 2022) (Apr. 2023 – Dec. 2023) change Total operating revenue after P25: Analysis of Japan segment deducting financial expenses and cost 54,283 62,320
Slide 25: YoY Comparison (9 months) Segment Performance
YoY Comparison (9 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 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q Total operating revenue after deducting financial expenses and cost of sales 23,351 26,927 24,
Slide 26: YoY Analysis: Operating Revenue (Japan)
YoY Comparison (9 months) Analysis: Operating Revenue Japan: Progress in the asset management model led to higher recurring revenues, which is linked to the customers’ assets in custody. Brokerage commissions also increased due to an active Japanese equities market. Total operating revenue after ded
Slide 27: YoY Analysis: SG&A (Japan)
YoY Comparison (9 months) Analysis: SG&A Japan: Personnel expenses rose due to base-pay increases. System-related expenses increased due to the launch of US equities margin trading and business alliances with partner companies. ■ Total SG&A SG&A Total +13.6％ (+2,726) (JPY million) *Figures in parent
Slide 28: YoY Analysis: Operating Revenue (US, USD)
YoY Comparison (9 months) Analysis: Operating Revenue (USD) US: Total revenue increased 16.7% YoY due to a significant increase in net financial income driven by higher interest rates. DARTs declined 5% despite a 10 ppt decline in volatility. Total operating revenue after deducting financial expense
Slide 29: YoY Analysis: SG&A (US, USD)
YoY Comparison (9 months) Analysis: SG&A (USD) US: Significantly reduced advertising expenses as part of the re-focus strategy on the active traders. Commissions paid and association dues increased because of a higher mix of futures volumes traded driving higher futures clearing and exchange fees. C
Slide 30: YoY Analysis: Operating Revenue (Crypto)
YoY Comparison (9 months) Analysis: Operating Revenue Crypto: Despite a decline in NFT-related revenues, the value of crypto asset transactions recovered to about the same level as the corresponding period of the previous year. ■ Total operating revenue after deducting financial expenses Total opera
Slide 31: YoY Analysis: SG&A (Crypto)
YoY Comparison (9 months) Analysis: SG&A Crypto: Reduction of advertising expenses by 65% compared to the same period last year, through a dynamic management approach in response to market conditions. ■ Total SG&A Total SG&A -25.6％ (-1,633) *Figures in parentheses indicate the variance from the prev
Slide 32: Shareholder Distribution
Shareholder Distribution The interim dividend for this fiscal year was 8.0 yen per share. New Shareholder Distribution Policy became effective on Jan. 4, 2024. ◆ History of dividend per share ◆ Return on equity ratio (JPY) 30 10,000 Amount of dividends Amount of acquisition of own shares 25 8,000 In
Slide 33: III. Business Update
MONEX GROUP IT. Business Update 32
Slide 34: Business Update Japan Segment 1/5
Business Update Japan Segment 1/5 The alliance with nationwide partners and the reinforced asset management business drive rapid growth in the customer assets and steady progress of the asset gathering model. Customer Assets in the Japan Segment Japanese Equities Others Foreign Equities ¥7.6T (JPY T
Slide 35: Business Update Japan Segment 2/5
Business Update Japan Segment 2/5 The transfer of mutual fund accounts from AEON Bank has been completed. Since Jan. 2024, there has been strong performance in terms of the openings of general securities accounts and NISA accounts by AEON Bank customers who previously did not have a mutual account.
Slide 36: Business Update Japan Segment 3/5
Business Update Japan Segment 3/5 Aiming to make investment a part of people’s daily lives by combining NTT DOCOMO's service platforms and customer base with Monex Securities' product and services. FYE Mar. 2024 FYE Mar. 2025 or later ➊ Promotional activities (underway) Service linkage example ① d C
Slide 37: Business Update Japan Segment 4/5
Business Update Japan Segment 4/5 Asset under management (AUM) of Monex Asset Management exceeded ¥480B. Robo-advisor service series, ON COMPASS+, become available under the new NISA program ■ Robo-advisor services Asset Under Management Total AUM ON COMPASS 1 (JPY Billion) 6000 approx. ¥ 480B Ranke
Slide 38: Business Update Japan Segment 5/5
Business Update Japan Segment 5/5 Mutual fund balances expanded by the completion of accounts transfer from AEON Bank. Independent Financial Advisors (IFA) and wealth management (WM) businesses are steadily growing. Mutual Funds IFA / WM Business • Mutual fund balance surpassed ¥1.5T driven by accou
Slide 39: Business Update US Segment 1/4
Business Update US Segment 1/4 Commissions stayed strong as trading from active customers remained steady. Brokerage commissions and other commissions （USD Million） （DARTs: Thousand） （USD Million） Brokerage commission and VIX Other commissions and DARTs (Equities + Options) Other commissions(left) D
Slide 40: 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 ($2.7 B as of the end of Dec. 2023) belongs to TradeStation and is recorded as net financial income. Abou
Slide 41: Business Update US Segment 3/4
Business Update US Segment 3/4 The number of target customers* continues to be closely monitored, although it is declined QoQ due to seasonality. The number of target customers Continuing to increase the target customers by growing them by 9% from the same quarter previous year. Target customers The
Slide 42: 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 ・Revenues from both organic customers and third-party referral customers have remained steady despite an extended period of low volatil
Slide 43: Business Update Crypto Asset Segment 1/6
Business Update Crypto Asset Segment 1/6 Expanding the institutional business through leveraging the strong retail customer base. More users will be connected to Coincheck with a growing institutional business Exchange/Marketplace Possess a solid industry position and a large retail customer base as
Slide 44: Business Update Crypto Asset Segment 2/6
Business Update Crypto Asset Segment 2/6 Coincheck is Japan’s premier and most trusted crypto assets trading platform. Crypto asset exchange and marketplace App Downloads Leading market share with 22%*2 No.1 domestic market share for （Million） share of verified accounts 5 consecutive years1 6.03 M D
Slide 45: Business Update Crypto Asset Segment 3/6
Business Update Crypto Asset Segment 3/6 Bitcoin prices rose on rising expectations for Bitcoin ETF approval in the US. Bitcoin held by Coincheck customers increased in both the number of crypto asset units and value Bitcoin volume held by customers （million yen） Bitcoin value held by customers (JPY
Slide 46: Business Update Crypto Asset Segment 4/6
Business Update Crypto Asset Segment 4/6 Diversifying earnings into new products through our strong reputation and large customer base. Coincheck Initial Exchange Offering (IEO) Coincheck is the leading player in the Japanese IEO market, completing the largest number of IEOs Progress has been made i
Slide 47: Business Update Crypto Asset Segment 5/6
Business Update Crypto Asset Segment 5/6 Coincheck is supporting the blockchain community through the introduction of Coincheck INO. INO (NFT to be sold for the first time) Coincheck started “Coincheck INO” in which NFT collections are to be sold for the first time. Coincheck handled the 2nd INO “CE
Slide 48: Business Update Crypto Asset Segment 6/6
Business Update Crypto Asset Segment 6/6 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 49: Business Update Asia Pacific and Investment Segment
Business Update Asia Pacific and Investment Segment The Social Impact Investment Fund received funding with a total of ¥4.0B under management. The fund is in its investment phase. Asia Pacific Segment Investment Segment Monex Boom Securities (H.K.) Limited Social Impact Investment Fund (2023) • One
Slide 50: Business Update New Businesses (Japan segment)
Business Update New Businesses (Japan segment) Promote new businesses based on a corporate philosophy that aims to optimize an individual's lifetime balance sheet. STEAM / Bilingual Education Business Genome Platform Business STEAM Education New business alliances with partner companies Viling, Inc.
Slide 51: Business Update ESG and Sustainability
Business Update ESG and Sustainability Enhanced disclosures related to human capital. Monex Group and Monex Securities have received the "D&I Award" for three consecutive years. Initiatives to strengthens human capital Enhanced disclosure of human capital-related initiatives Received the D&I Award f
Slide 52: Appendix: Group Overview
MONEX GROUP Appendix: Group Overview 51
Slide 53: Business Update Japan Segment
Business Update Japan Segment Toward more customer-centric and tailor-made financial services. Key Activities 1 Market presence in online Provide easy and simple asset building services d POINT membership broker securities industry for investment beginners Offer d POINT as part of royalty High p
Slide 54: Appendix: Highlights 3Q of FYE Mar. 2024 (3 months) 1/3
Appendix: Highlights 3Q 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 55: Appendix: Highlights 3Q of FYE Mar. 2024 (3 months) 2/3
Appendix: Highlights 3Q 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 56: Appendix: Highlights 3Q of FYE Mar. 2024 (3 months) 3/3
Appendix: Highlights 3Q 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 400 255 248 227 2
Slide 57: Consolidated balance sheet
Consolidated balance sheet Key points of Monex Group’s consolidated balance sheet of Monex 1. Actual net debt is ¥8.6B 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 guarante
Slide 58: 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 59: 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 60: 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 61: 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 62: Investment Segment – Portfolio 1/4
Investment Segment – Portfolio 1/4 ◆ Monex Ventures, Inc. ◆ MONEX EDISON Investment Limited Partnership 61
Slide 63: Investment Segment – Portfolio 2/4
Investment Segment – Portfolio 2/4 ◆ MV I Investment Limited Partnership 62
Slide 64: Investment Segment – Portfolio 3/4
Investment Segment – Portfolio 3/4 ◆ MV I Investment Limited Partnership ◆ MV II Investment Limited Partnership 63
Slide 65: Investment Segment – Portfolio 4/4
Investment Segment – Portfolio 4/4 ◆ Social Impact Investment Fund 64
Slide 66: 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 67: © Monex Group, Inc.
© Monex Group, Inc. www.monexgroup.jp/