Monex Group, Inc. · TSE:8698
Monex — Q1 FY2012 Earnings Presentation
33 slides from Monex's earnings presentation, Jul 26, 2011
Slide 1: Financial Results of 1Q of Fiscal Year Ending March 31, 2012
July 26, 2011 Financial Results of 1Q of Fiscal Year Ending March 31, 2012 This is an English translation of Japanese presentation material prepared in connection with the disclosure of the financial results of Monex Group, Inc. It includes information derived from the consolidated financial stateme
Slide 2: Important Matters Concerning Product-related Risks
Important Matters Concerning Product-related Risks This material is explanatory material on the financial results of Monex Group, Inc. (“the Company”). The descriptions herein concerning the products, services, etc. which are handled by the Company’s group companies (“the Group Companies”), are made
Slide 3: Our Business Principles
Our Business Principles "MONEX" stands for the future of finance, one step advanced from "MONEY" The Monex Group is aspiring to empower traders and investors worldwide with best of breed technology, education, service, and financial professionalism to provide access to top financial markets globally
Slide 4: Table of Contents
Table of Contents Important Matters Concerning Product-related Risks ･･･ p.1 Our Business Principles ･･･ p.2 I. Financial Results Ⅳ. Data 1. Major Business Activities in this Quarter p.5 1. Financial Results: Quarterly Breakdown of Income ･･･ p.22 2. 4Q of FYE Mar. 31, 2011 vs. 1Q of FYE Mar. 31, 20
Slide 5: 1. Financial Results
1. Financial Results 2. Acquisition of TradeStation 3. Business Strategies 4. Data 4
Slide 6: Major Business Activities in this Quarter
Major Business Activities in this Quarter ◆Global business expansion ・Successfully completed the acquisition of TradeStation Group, Inc., a U.S. online securities company formerly listed on NASDAQ (June 10, 2011) ・Developing specific plans to utilize TradeStation to create positive synergies within
Slide 7: Financial Summary: 4Q FYE Mar. 2011 vs. 1Q FYE Mar. 2012
Financial Summary : 4Q of FYE Mar. 31, 2011 vs. 1Q of FYE Mar. 31, 2012 (in 3 months) （in million yen, %） 4Q of FYE Mar. 31, 2011 1Q of FYE Mar. 31, 2012 Change (Jan. 2011 - Mar. 2011) (Apr. 2011 – Jun. 2011） Operating Revenues 6,725 6,057 -9.9% Net Operating Revenues 6,361 5,080 -20.1% SG&A 4,509 4
Slide 8: Major Factors of Revenue and SG&A (Comparison with Previous Quarter)
Major Factors of Revenue and SG&A (Comparison with Previous Quarter) ■Revenue：Comparison with 4Q of FYE Mar. 31, 2011 ■SG&A：Comparison with 4Q of FYE Mar. 31, 2011 ◆Significant decrease in equity trading values ◆ Slight decrease of trading related payment due to the Decreased by 1,281 million yen（-2
Slide 9: Financial Summary: 1Q FYE Mar. 2011 vs. 1Q FYE Mar. 2012
Financial Summary : 1Q of FYE Mar. 31, 2011 vs. 1Q of FYE Mar. 31, 2012 (in 3 months) （in million yen, %） 1Q of FYE Mar. 31, 2011 1Q of FYE Mar. 31, 2012 Change (Apr. 2010 – Jun. 2010） (Apr. 2011 – Jun. 2011） Operating Revenues 7,407 6,057 -18.2% Net Operating Revenues 6,432 5,080 -21.0% SG&A 4,891
Slide 10: Major Factors of Revenue and SG&A (Comparison with Last Fiscal Year)
Major Factors of Revenue and SG&A (Comparison with Last Fiscal Year) ■ Revenue：Comparison with 1Q of FYE Mar. 31, 2011 ■ SG&A：Comparison with 1Q of FYE Mar. 31, 2011 ◆Significant decrease in equity trading values ◆ System related costs decreased due to the cost reduction Decreased by 1,352 million y
Slide 11: Balance Sheet
Balance Sheet ■Consolidated TradeStation’s Balance Sheet upon the acquisition in June 2011 (*3) Non-current assets（investment value of risk assets） (in billion yen) [Cash margin from customers [Segregated cash trust] (minimum requirement)] Property/equipment 0.9（Facilities, equipment, etc） Software
Slide 12: 2. Acquisition of TradeStation
1. Financial Results 2. Acquisition of TradeStation 3. Business Strategies 4. Data 11
Slide 13: Distribution of Revenue by Regions and Businesses
Distribution of Revenue by Regions and Businesses ■ Combined the net operating revenues of Monex Group, Inc. (FYE Mar. 31, 2011) and TradeStation Group, Inc. (FYE Dec. 31, 2010) (Revenues of Monex International Limited inc. Monex BOOM Securities were annualized) Interest Income Interest Income is se
Slide 14: Distribution of Cost by Regions and Businesses
Distribution of Cost by Regions and Businesses ■ Combined costs of Monex Group, Inc. (FYE Mar. 31, 2011) and TradeStation Group, Inc. (FYE Dec. 31, 2010) (Costs of Monex International Limited inc. Monex BOOM Sec. were annualized.) Others Most of the system development is outsourced in Commissions pa
Slide 15: Distribution of Consolidated Personnel by Regions and Jobs
Distribution of Consolidated Personnel by Regions and Jobs ■Consolidated as of the end of June 2011 System development is mostly Technology outsourced in Japan and the number of technology related Others 3％ employees is small. 4％ Operation Marketing 6％ 17 ％ 4％ China (inc.HK) US+EU Japan Marketing 54
Slide 16: 3. Business Strategies
1. Financial Results 2. Acquisition of TradeStation 3. Business Strategies 4. Data 15
Slide 17: Value Proposition by TradeStation
Value Proposition by TradeStation What Monex gains through the acquisition of TradeStation Top-ranked technology, brand, and development resource China/HK Japan US/EU ■Adaption of TradeStation’s ■Adaption of TradeStation’s ■Expansion in US technology in China technology in Japan -Enhancing marketing
Slide 18: Measure for Revenue Improvement after the Acquisition of TradeStation
Measure for Revenue Improvement after the Acquisition of TradeStation ■Globalization of our business: Aiming to increase net operating revenues by more than 1.5 times Structure of the revenue by region： Structure of the revenue by product line： (in million yen） (in million yen） 60,000 *images based
Slide 19: Measures for Cost Efficiency after the Acquisition of TradeStation
Measures for Cost Efficiency after the Acquisition of TradeStation ■Reducing cost Structure of cost： *images based on the current measures Structure of cost by region： (in million yen） (in million yen） *images based on the current measures 35,000 35,000 ・Variable cost 30,000 increases in New busines
Slide 20: Further Improvement of Revenue and Cost Efficiency
Further Improvement of Revenue and Cost Efficiency ■Management indicator Targeting 40% of profit margin and 10% of ROE in mid/long term ■Current plans for improvement We envision that current plans will reduce fixed cost by 8% and increase revenue by 45% in 4 years to improve profit margin(*) up to
Slide 21: Disclosure Policy and Shareholder's Return
Disclosure Policy and Shareholder’s Return ◆Disclosure policy Monex Group, Inc. Japan US China/HK (consolidated) Monex, Inc. TradeStation Monex BOOM Sec. Weekly ― ― ― ― (from Aug. 2011) （Stop weekly disclosure） Monthly Operating revenues Change of items - DARTs ― (from July 2011) Net operating reven
Slide 22: 4. Data
1. Financial Results 2. Acquisition of TradeStation 3. Business Strategies 4. Data 21
Slide 23: Financial Results: Quarterly Breakdown of Income Statement
Financial Results：Quarterly Breakdown of Income Statement （in million yen） FYE Mar. FYE Mar. 31, 2010 FYE Mar. 31, 2011 31, 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Brokerage commissions( includes OSE-FX) 3,145 2,670 2,073 2,604 2,772 1,904 2,089 3,336 2,120 Stocks and ETFs 3,063 2,577 1,979 2,449 2,582 1,63
Slide 24: Financial Results: Quarterly Breakdown of SG&A
Financial Results：Quarterly Breakdown of SG&A （in million yen） FYE Mar. FYE Mar. 31, 2010 FYE Mar. 31, 2011 31, 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Transaction-related expenses 979 1,044 948 1,247 1,267 1,118 1,260 1,360 1,224 Commissions paid 196 263 181 194 246 217 220 237 238 Exchange and association
Slide 25: Trends in Revenue
Trends in Revenue ■Net operating revenue and operating income ■ Profit margin(*1) and ROE trends Total trading value of individual 60.0% investors in 3 major stock exchanges (Million yen) （Average per business day）（right） (Billion yen) 4 8 .2% 50.0% Profit margin 10,000 700 ROE 40.0% Net operating r
Slide 26: Breakdown of Net Operating Revenues by Business
Breakdown of Net Operating Revenues by Business ■1Q of FYE Mar. 31, 2012 （3 months： Apr. to Jun. 2011） （in million yen） Business category Revenue from “stock” Revenue from “flow” Total % Net financial income Cash trading commission 1,078 Equities 1,038 Margin trading commissions 774 2,921 57% Others
Slide 27: Equity Business / FX Business
Equity Business / FX Business ■Equity business ■FX business ◆Market share of equity trading and margin balance Revenue (million yen) Trading volume (billion yen) Monex' s share in retail equity market and its margin balance 9.0% Margin transaction balance (right:billion yen) 300 8.0% Monex share 250
Slide 28: Mutual Fund Business / Alternative Investment Business
Mutual Fund Business / Alternative Investment Business ■Mutual Fund Business ■ Alternative Investment Business ◆ Trends in mutual fund sales and balance (Billion yen) FYE ◆ New Commodity fund is in the planning stage FYE March 2010 FYE March 2011 March 2012 ・ We will offer low-risk and expanded mana
Slide 29: About TradeStation
About TradeStation ■Summary of TradeStation ■Prominent difference in client base, reflected in Revenue per account ◆ Comparison of DARTs among US listed brokerages 400 379 372 350 ◆ Company overview 300 271 • Formed in 1982 as a trading platform provider. Initial Public 250 Offering in 1997 (listed
Slide 30: Revenue Structure of TradeStation
Revenue Structure of TradeStation ■(Ref.)Income Statement of TradeStation Group, Inc. ■ Comparison of revenue structure ◆From Jan. to Jun. 2011, unaudited (in thousand USD) ◆ TradeStation: Trend of Net Operating Revenue Revenues: (US GAAP) Net interest income decrease in line with declining interest
Slide 31: About Monex BOOM Group
About Monex BOOM Group ■ Business in HK, Asia’s global financial center ■Quarterly financial result ◆Consolidated financial result of Monex International Limited including Monex BOOM Group (As from Apr. to Jun. 2011, in thousand yen) Operating revenue ◆ Monex BOOM Group Overview Commission received
Slide 32: Investors' Guide
Investors’ Guide ■Pursuing investment returns for our shareholders ◆Basic policy for shareholder’s return Major shareholders and share distribution ・Reserving necessary capital as a growing company, the - Total number of issued shares as of end of Mar. 2011: company aim to provide return to its sha
Slide 33: The Monex Group
The Monex Group Holding Company （As of July 26, 2011） [ China ] [ Japan ] [ US/EU ] Securities Company FX Business Monex International Limited Asia business base in Hong Kong TradeStation Group, Inc. Securities Company Holding company in US Monex FX, Inc. Specialized for FX trading Monex, Inc. Compr