Nomura Holdings, Inc. · TSE:8604
Nomura — FY2013/14 Earnings Presentation
36 slides from Nomura's earnings presentation, April 2014
Slide 1: Consolidated Results of Operations: full year and fourth quarter ended March 2014
I will now give you an overview of our financial results for the full year and fourth quarter ended March 2014, using the document titled “Consolidated Results of Operations”. Please turn to page two.
Slide 2: Outline
WV 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 results overview
First, the full year results. As shown on the right, all business segments reported significantly higher pretax income, driven by the stock market rally in Japan and successful initiatives to improve profitability. As a result, Group earnings were at their highest level since the year ended March 20
Slide 4: Fourth quarter results overview
At the Group level, robust performance in our international operations and a realized gain on the sale of an equity stake more than offset a slowdown in Japan-related businesses, resulting in stronger revenues and pretax income compared to last quarter. International pretax income was 15.9 billion y
Slide 5: Highlights
Highlights Ch ietcone seee (3) Diluted net income per share attributable to Nomura Holdings shareholders. (4) Calculated using annualized net income FY2012/13 fqures include 2 rc. (billions of yen, except EPS and ROE) ae ao wets one BE 200 Yor Fee Yoys Net revenue. 389.9 | +3% 40% 1,557.1 14% Non-in
Slide 6: Net revenue and income (loss) before income taxes
Net revenue and income (loss) before income taxes FY2013/14 1,557.1 34.2 7.7 - - 10.7 eee ll 88.6 42% 48% 361.6 4Q additional information: 1) Includes a realized gain of Y17.9bn on sale of stake in Fortress Investment Group LLC. 2) Includes gain of Y2.7bn related to changes to own and counterparty c
Slide 7: Retail results
Full year net revenue in Retail was 511.9 billion yen, an increase of 29 percent year on year. Pretax income jumped 91 percent to 192.0 billion yen, which is close to record levels since the year ended March 2002. Fourth quarter net revenue was 97.9 billion yen and pretax income was 23.3 billion yen
Slide 8: Retail products and client assets
Looking at each product, sales of stocks and investment trusts slowed with total sales declining 23 percent from the previous quarter. As shown on the bottom left, recurring revenue showed steady growth at 54.5 billion yen on an annualized basis. Although client assets in investment trusts declined
Slide 9: Asset Management results
Full year net revenue increased 17 percent to 80.5 billion yen. Pretax income increased 28 percent year on year to 27.1 billion yen, the best year since the year ended March 2008. Fourth quarter net revenue was 20.5 billion yen, down 4 percent compared to the previous quarter which included dividend
Slide 10: Asset Management flows and ING Taiwan acquisition
The graph on the bottom left shows investment trust net inflows, excluding ETFs, of 873 billion yen in the third quarter and 820 billion yen of net outflows in the fourth quarter. This is due to fluctuations in MRFs. Last quarter, clients parked funds gained from selling out of positions before the
Slide 11: Wholesale results
Full year net revenue in Wholesale was 765.1 billion yen with all regions and business lines reporting stronger revenues year on year. Successful strategic refinement and cost reduction initiatives contributed to the strongest pretax income since the year ended March 2010 at 111.8 billion yen. Fourt
Slide 12: Global Markets
First, Global Markets. Fixed Income net revenue increased 9 percent to 107.7 billion yen. The heat map on the top right shows a solid quarter in Rates and Securitized Products in the Americas, and resilient performance in Rates and Credit in EMEA. Japan reported higher revenues compared to the prior
Slide 13: Investment Banking
Net revenue of 31.7 billion yen was 3 percent higher than the strong third quarter, which included private equity unrealized gains, reflecting a solid quarter in Japan and significant growth across all international regions. Investment Banking gross revenue, shown at the top of the graph on the top
Slide 14: Non-interest expenses
Full year group-wide expenses totaled 1,195.5 billion yen, representing a 24 percent decline compared to last year due to the deconsolidation of Nomura Real Estate Holdings. Excluding Nomura Real Estate Holdings, expenses increased by 12 percent on the back of improved performance and yen depreciati
Slide 15: Robust financial position
Page 14 shows our balance sheet. Total assets were 43.5 trillion yen. Gross leverage was 17.3 times and net leverage was 10.4 times. Our Basel 3 Tier 1 and Tier 1 common ratios were both 13.3 percent, which is an improvement from 12 percent at the end of December. This is mostly due to a decline in
Slide 16: Funding and liquidity
Funding and liquidity NOMURA Balance sheet structure = Highly liquid, healthy balance sheet structure —83% of assets are highly liquid trading and related assets that are marked-to-market and matched to trading and related liabilities through repos etc. (regionally and by currency) —Other assets are
Slide 17: Financial Supplement
Financial Supplement
Slide 18: Consolidated balance sheet
1 (billions of yen) Assets Total cash and cash deposits Total loans and receivables Total collateralized agreements Total trading assets’ and private equity investments Total other assets Total assets Including securities pledged as collateral. 537 Liabilities Short-term borrowings Total payables an
Slide 19: Value at risk
Definition = From April 1, 2013 to March 31, 2014 (billions of yen) — 99% confidence level — Maximum: 9.9 — 1-day time horizon for outstanding portfolio — Minimum: 4.4 — Inter-product price fluctuations considered — Average: 6.7 (billions of yen) 1.3 1.3 1.3 26 1.9 3.6 1.3 Equity Interest rate 5.0 3
Slide 20: Consolidated financial highlights
Full year Quarter (billions of yen) (billions of yen) 250 12% 499 11.3% 213.6 200 sm Net income 8% 90 150 ROE (%) 107., 6% 6 100 50 3% 30 0 0% Net revenue 1,813.6 1,557.1 Income before income taxes 237.7 361.6 Net income attributable to Nomura Holdings, inc. (/NHI") shareholders 107.2 213.6 82.4 65.
Slide 21: Consolidated income: main revenue items
(billions of yen) Full year Quarter Revenue Commissions 359.1 474.6 125.7 157.6 105.6 121.4 89.9 Fees from investment banking 62.4 91.3 21.8 25.4 23.0 15.8 27.2 Asset management and portfolio service fees 141.0 167.2 38.8 42.4 40.7 42.41 421 Net gain on trading 368.0 476.4 106.5 128.4 110.2 108.5 12
Slide 22: Main revenue items
(billions of yen) Full year Quarter Stock brokerage commissions (retail) 51.8 126.7 26.6 42.5 25.4 36.3 22.6 Stock brokerage commissions (other) 112.9 139.8 32.0 37.7 31.6 34.9 35.6 Other brokerage commissions 11.7 18.1 3.8 5.3 42 44 43 Commissions for distribution of 1601 187.8 544 639 « 3707.7 198
Slide 23: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Retail 100.6 192.0 57.2 81.1 40.0 47.7 23.3 Asset Management 21.2 27.1 3.9 67 6.2 89 5.3 Wholesale 71.7 111.8 35.7 25.2 25.3 27.8 33.5 Three Business segments total 193.5 330.9 96.8 113.0 71.4 84.4 62.1 Other 6
Slide 24: Segment Other: income (loss) before income taxes
Income (loss) before income taxes Full year Quarter (billions of yen) (billions of yen) 60 60 50.1 40 342 40 20 20.0 20 = L . = ; Hi = = 70 3.5 -3.7 -20 -20 Franrans Fz AQ QQ QA Net gain (loss) related to economic . hedging transactions 1.0 17.4 08 7.4 1.7 5.2 6.5 Realized gain(loss) on investments
Slide 25: Retail results detail
Full year Quarter Si yaar femons oryen) Fraotansrvaorana i a a Commissions 225.9 301.7 110.3 78.3 46.5 -40.6% -44.8% Sales credit 80.9 106.1 28.6 29.7 24.3 25.7 26.4 2.8% -7.6% Fees from investment banking and other 36.8 40.3 10.4 9.8 13.4 8.0 91 13.9% -12.5% Investment trust administration fees and
Slide 26: Stock brokerage commissions and investment trust distribution commissions
Stock brokerage commissions and commissions for distribution of investment trusts Full year Quarter (billions of yen) (billions of yen) 180 70 150 0 50 120 ™ Stock brokerage 40 commissions 90 = Commissions for distribution 30 of investment trusts 60 20 30 10 0 Stock brokerage commissions 51.8 126.7
Slide 27: Retail client assets
Retail client assets (trillions of yen) = Other 100 O17 90.9 91.7 83.8 83.8 87.7 ™ Overseas mutual funds 80 ™Bond investment trusts 60 ‘= Stock investment trusts = Domestic bonds 40 ™Foreign currency bonds 20 = Equities 0 Equities 46.7 53.2 46.7 50.5 53.4 56.5 53.2 Foreign currency bonds 6.6 6.3 66
Slide 28: Retail client assets: net asset inflow
Retail client assets: Net asset inflow’ Full year Quarter (billions of yen) (billions of yen) 2,000 4,225 1,200 900 600 1,035 1,000 ’ 872 188 300 38 = _ ° -38 -300 (1) Excluding regional financial institutions. 27
Slide 29: Number of accounts
Number of accounts (mowers) © Mar Mar Mar Jun Sep Dec Mar Accounts with balance 5,025 5,144 5,025 5,069 5,090 5,104 5,144 Equity holding accounts 2,717 2,718 2,717 2,727 2,722 2,674 2,718 Nomura Home Trade / Net & Call accounts 3,747 4,012 3,747 3,822 3,881 3,939 4,012 New Individual accounts / IT s
Slide 30: Asset Management results detail
7 Fy2oi213 2014 (billions of yen) 10 2Q 0 8Q Qe Net revenue 68.9 80.5 18.3 20.2 18.6 21.2 20.5 3.5% 11.9% Non-interest expenses 47.8 53.4 14.4 13.5 12.5 12.3 15.1 23.3% 5.4% Income before income taxes 21.2 27.1 3.9 67 62 8.9 5.3 40.4% 35.6% Total assets under management (trillions of yen) 40.3 364 2
Slide 31: Assets under management by business
Assets under management (gross) by business" (trillions of yen) Investment trust business 265 284 265 264 268 294 284 Investment advisory business 9.6 9.8 96 104 105 109 98 Assets under management (gross) 1 38.2 36.1 8 37.3 40.3 38.2 Asset inflows/outflows by business* Full year Quarter Cae |_| “ee
Slide 32: Wholesale
Wholesale (ptions of yen) “evaorana evaorane Feo EA SW | Net revenue 644.9 765.1 196.9 194.6 183.3 188.7 198.5 5.2% 0.8% Non-interest expenses §73.2 653.3 161.3 169.4 158.1 160.9 165.0 2.6% 2.3% Income before income taxes 717 111.8 35.7 25.2 25.3 278 33.5 20.4% 6.1% Breakdown of Wholesale revenues C
Slide 33: Private equity related investments
Private equity related investments (billions of yen) 150 = Terra Firma 1046 ’ 107.0 1021 100 mAsia Europe (excluding Terra Firma) 50 = Japan Japan Europe (excluding Terra Firma) Asia Sub Total Terra Firma 28.1 24.6 28.1 29.6 25.8 24.9 24.6 Total 104.6 57.2 104.6 107.0 102.1 61.2 57.2 32 32
Slide 34: Number of employees
Japan (excluding FA) 14,123 14,123 14,654 14,454 14,308 . Japan (FA) 1,907 . 1,907 1,911 1,923, 1,918 1,888 Europe 3,618 3,464 3,618 3,485 3,459 3,456 3,461 Americas 2,274 2,284 2,274 2,240 2,243 2,248 2,284 Asia-Pacific! 6,037 5,891 6,037 5,961 5,945 5,902 5,891 Total 27,956 27,670 27,956 28,251 28
Slide 35: Disclaimer
WV 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 36: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com