Nomura Holdings, Inc. · TSE:8604
Nomura — FY2015/16 Earnings Presentation
35 slides from Nomura's earnings presentation, April 2016
Slide 1: CFO overview of FY March 2016 results
Thank you for taking the time to join us today. I am Takumi Kitamura and I was appointed CFO in April. I would first like to pay my respects to the people affected by the recent earthquakes in Kumamoto and pray for a fast recovery in the disaster area. I will now give you an overview of our financia
Slide 2: Outline
LN Outline Presentation NOMURA Financial Supplement Executive summary (p. 2-3) Overview of results (p. 4) Business segment results (p. 5) Retail (p. 6-7) Asset Management (p. 8-9) Wholesale (p. 10-12) Non-interest expenses (p. 13) Robust financial position (p. 14) Funding and liquidity (p. 15) Conso
Slide 3: Full year highlights
First, let’s look at the full year highlights. Client flows declined from August onwards as China’s economy slowed, oil prices plunged, and uncertainty grew over the impact of monetary policy in major markets. We faced a particularly challenging market environment especially in the second half of th
Slide 4: Fourth quarter highlights
Client activity declined as a result of the drop in share prices since the start of the year, the marked appreciation of the yen, and the decline in liquidity. Although we continued to contain costs, this was not enough to offset the decline in revenues and the three segments booked a total loss bef
Slide 5: Highlights
Highlights (billions of yen, except EPS and ROE) Ree Q0Q Yor Pte Yor Net revenue 280.1 | -21% -36% 1,395.7 -13% Non-interest expenses 292.5 | 4% 11% 1,230.5 2% pee) -12.3 | - - 165.2 -52% Net income (loss)! 192 | - - 131.6 41% EPs: -¥5.33 | - - 35.52 “41% ROE? . 4.9% (1) Net income (loss) attributab
Slide 6: Net revenue and income (loss) before income taxes
Net revenue and income (loss) before income taxes (omens! of yen) FY2015/16 FY2015/16 See YoY YoY 40. Full year. Netrevenue Retail 85.0 18% -31% 435.6 8% 165.1 -23.5 a * -20.7 = 280.1 21% -36% 1,395.7 13% 12.2 56% 70% 127.6 21% 58 46% 13% 36.7 +14% 16.1 alized gain (oss).on investments in 238 g : 20
Slide 7: Retail results
For the full year, net revenue was 435.6 billion yen. The first half of the year got off to a good start, but the market turmoil from August led to a slowdown in sales of stocks and investment trusts and net revenue declined 9 percent year on year. Amid this environment, we continued to take steps t
Slide 8: Retail recurring revenue and assets
As shown on the top left of page seven, fourth quarter annualized recurring revenue was 71.9 billion yen. Although down from last quarter due to market factors, by controlling costs in accordance with the top line, we were able to keep the recurring revenue cost coverage ratio roughly unchanged from
Slide 9: Asset Management results
Net revenue for the full year reached a record 95.4 billion yen as funds continued to flow into ETFs, products for discretionary investments, and privately placed funds, lifting assets under management. Income before income taxes was 36.7 billion yen, the highest level since 2007. Fourth quarter net
Slide 10: Asset Management flows and NCRAM
As shown on the bottom left, the investment trust business booked outflows of 427 billion yen. The portion shown in light pink is MRFs, etc. which shows outflows of approximately 600 billion yen. The red shows core investment trust inflows of approximately 170 billion yen. Investor demand for ETFs i
Slide 11: Wholesale results
Full year net revenue declined 9 percent to 720.3 billion yen. Equities and Investment Banking reported higher revenues year on year, while Fixed Income had a challenging year in spread products such as Credit and Securitized Products. Income before income taxes declined 81 percent from the previous
Slide 12: Global Markets
First, Global Markets. Net revenue was 108.3 billion yen, down 31 percent quarter on quarter. Fixed Income net revenue declined 66 percent to 27.6 billion yen due mainly to the sluggish performance in spread products and the slowdown in Rates products. The heat map on the right shows a general downw
Slide 13: Investment Banking
As shown on the top left, fourth quarter net revenue was 27.9 billion yen, down 3 percent quarter on quarter. The sequential decline is because last quarter we booked a gain on the sale of shares of Mitsui Life Insurance. Our core business, shown here in dark blue, reported stronger revenues. Gross
Slide 14: Non-interest expenses
Full year total expenses declined 2 percent year on year to 1,230.5 billion yen. Compensation and benefits declined 4 percent as we focused on pay for performance and we reduced costs primarily in our international operations. Fourth quarter expenses declined 4 percent from last quarter to 292.5 bil
Slide 15: Robust financial position: Basel III ratios
As you can see in the box on the bottom left, our Basel III consolidated Tier 1 ratio was 16.1 percent. The 165 billion yen of perpetual subordinated bonds issued in January are counted as Tier 1 capital, raising the ratio by 1 percentage points from the end of December of 15.1 percent. Our CET 1 ca
Slide 16: EPS target and closing remarks
Four years ago, we set a target of EPS of 50 yen by March 2016. We have taken many steps to achieve that target. We have further enhanced Retail and Asset Management as drivers of consistent earnings and in Wholesale we have focused on our areas of competitive strength and lowered our breakeven poin
Slide 17: Financial Supplement
Financial Supplement
Slide 18: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits 2,097 Total loans and receivables 2,948 Total collateralized agreements Total trading assets’ and private equity investments Total other assets Total assets 41,783) 1,802 Liabilities Short-term borrowings Total payables and deposits Total collate
Slide 19: Value at risk
= Definition = From April 1, 2015 to March 31, 2016 (billions of yen) — 99% confidence level — Maximum: 9.1 — 1-day time horizon for outstanding portfolio — Minimum: 3.5 — Inter-product price fluctuations considered — Average: 5.3 tills ofyer) | vamian| Pvzowoie, vamtans EOIN ee eee Equity 1.0 09 10
Slide 20: Consolidated financial highlights
Full year Quarter billions of yen) ‘billions of (l tyer ) sex o% Ceili yen) 12% 224.8 iE Net income 200 6% attributable to NHI 4.9% 2 shareholders 131.6 ——ROE(%) 100 3% ) 0% Net revenue 1,604.2 1,395.7, 434.5 424.0 336.6 354.9 280.1 Income (loss) before income taxes 346.8 165.2 105.0 106.0 19.9 51.6
Slide 21: Consolidated income
Full year Quarter (billions of yen) “Frais Fya0rst6 “Fy2oitS —FY20IS/6 Revenue Commissions 453.4 432.0 123.7 130.3 111.5 102.3 87.8 Fees from investment banking 95.1 118.3 25.8 24.5 44.9 20.0 29.0 Asset management and portfolio service fees 203.4 229.0 54.3, 59.9 58.2 57.8 53.1 Net gain on trading 5
Slide 22: Main revenue items
(eaionast y=) — 1a QQ Stock brokerage commissions 252.8 275.0 70.7 78.7 71.3 63.7 61.3 Other brokerage commissions 19.6 23.3 5.8 5.2 68 5.4 5.8 Commissions for distribution of investment trusts 134.3 89.5 33.6 4.3 22.0 20.8 12.4 Other 46.8 44.2 13.5 12.2 11.3 12.4 8.3 Total 453.4 432.0 123.7 130.3 1
Slide 23: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter (billions of yen) Praia Retail 161.8 127.6 .9 50.9 36.7 27.8 12.2 Asset Management 32.1 36.7 67 11.7 84 10.7 5.8 Wholesale 82.2 15.4 53.8 19.7 8.6 9.9 22.8 ‘Three Business segments total 276.1
Slide 24: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 46.0 40.0 30.0 20.0 14.7 10.0 6.1 0.0 10.0 4.0 -20.0 30.0 -23.0 ramets ronan (4a ten 2a saa) Net gain (loss) related to economic 7 hedging transactions 15.1 6.4 0.3 26 14 0.6 8.5 Realized gain on investments in equity securit
Slide 25: Retail results data
Full year Quarter — Pam am ge EE ee Ee ‘Commissions 258.9 220.3 67.7 73.8 55.8 51.8 38.9 24.9% 42.6% Of which, ssi 81.8 78.9 22.6 26.4 20.0 18.0 144 20.0% 36.2% Of which, commissions for distribution of investment trusts 134.9 93.6 33.7 34.9 22.5 22.0 14.3 35.1% 87.6% Sales credit 106.4 86.4 25.4 26
Slide 26: Retail client assets
Retail client assets (trillions of yen) = Other = Overseas mutual funds = Bond investment trusts. Stock investment trusts = Domestic bonds "Foreign currency bonds = Equities Equities 120 Foreign currency bonds Domestic bonds" Stock in nt trusts: Bond investment trusts Overseas mutual funds Other Tot
Slide 27: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter (billions of yen) (billions of yen) 1,500 1,000 997 1,000 500 (1) Cash and securities inflows minus outflows, excluding regional financial institutions, 26 26
Slide 28: Number of accounts
Number of accounts (thousands) —Fy201at8 Fy20t86 — Fy201415 F206 ES Be Ee ee ee ee Accounts with balance 5,294 5,389 5,294 5,316 5,366 5,384 5,389 Equity holding accounts 2,719 2,827 2,719 2,700 2,725 2,796 2,827 Nomura Home Trade / Net & Call accounts 4,216 4,412 4,216 4,270 4,337 4,384 4,412 New I
Slide 29: Asset Management results and AuM
Full year Quarter {omone'of yen) Fraps 20118 a 4a ta a Net revenue 92.4 95.4 23.9 26.9 2.9 25.3 20.3 19.8% — -15.0% Non-interest expenses 60.3 58.7 17.2 18.2 144 146 145 0.4% 15.6% Income before income taxes 32.1 36.7 67 117 84 10.7 58 86.2% 13.3% Assets under management by company O) @ oy) ow Sa RE
Slide 30: Asset inflows/outflows by business
Asset inflows/outflows by business Full year Quarter (billons of yen) | motte | cote Fy2oats Fv2ONSIG Investment trusts business 3,418 2,717 942 1,252 896 157 412 of which ETFs. 843 2,339 477 308 1,294 102 838 Investment advisory business 50 2,038 113 38 1,446 646 -92 Net asset inflow 3,469 4,755 1,
Slide 31: Wholesale results and revenue breakdown
Wholesale Full year Quarter (billions of yen) Net revenue 789.9 720.3 231.5, 205.2 192.9 186.0 136.2 26.8% 1.2% Non-interest expenses 707.7 704.9 177.7 185.5, 184.3 176.0 159.0 97% 10.5% Income (loss) before income taxes 82.2 15.4 53.8 19.7 86 9.9 22.8 . . Breakdown of Wholesale revenues Full year Q
Slide 32: Private equity related investments
Private equity related investments (billions of yen) 70 60 56.4 56.4 = Tera Firma 50 45.6 mAsia oaN 40 = Europe (excluding Terra aie , 30 ; Firma) 24.4 24.4 Japan 20 10 O Japan 10.6 35 10.6 9.5 44.41 3.4 35 Europe (excluding Terra Firma) 19.9 5.2 19.9 87 68 5.8 5.2 Asia 24 1.8 24 24 2.0 2.0 1.8 Sub
Slide 33: Number of employees
Japan 15,973 16,083 15,973 16,570 16,381 16,282 16,083 Europe 3,485 3,424 3,485, 3,492 3,494 3,433 3,424 Americas 2,449 2,503 2,449 2,439 2,514 2,501 2,503 Asia and Oceanea’ 6,765 6,855, 6,765 6,788 6,862 6,853 6,855 Total 28,672 28,865 28,672 29,289 29,251 29,069 (28,865 (1) Includes Powai office i
Slide 34: Disclaimer
y\V NOMURA Disclaimer 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
Slide 35: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com NOMURA