Monex Group, Inc. · TSE:8698
Monex — Q1 FY2022 Earnings Presentation
57 slides from Monex's earnings presentation, Jul 28, 2021
Slide 1: Financial Results for the 1Q of the Fiscal Year Ending March 31, 2022
July 28, 2021 TSE 1st Section: 8698 Financial Results for the 1Q of the Fiscal Year Ending March 31, 2022
Slide 2: Our Business Principles
Our Business Principles 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 w
Slide 3: Table of Contents
Table of Contents Our Business Principles 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. 46 Appendix: Group Overview p. 47 - p. 56 This is an English translation of Japanese presentation materials prepared in connectio
Slide 4: I. Highlights
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 3
Slide 5: Business Overview 1/5
Business Overview 1/5 Monex Group’s consolidated pre-tax profit performed strongly with the contribution from the Crypto Asset segment. Monex Group’s Quarterly Consolidated Pre-tax Profit (¥ Billion） Pre-tax profit ¥ 11.1B 14 Quarterly pre-tax profit 12 10 8 6 4 2 0 2021/3 2021/3 2021/3 2021/3 2022/
Slide 6: Business Overview 2/5
Business Overview 2/5 Cryptocurrency trading value at Coincheck was high due to higher market volatility. The period for payout related to earn-out clause ended and Coincheck recorded its highest profit since becoming a part of Monex Group. Crypto Asset segment Quarterly Pre-tax Profit QoQ x 1.4 (¥
Slide 7: Business Overview 3/5
Business Overview 3/5 Revenue dependence on Bitcoin (BTC) declined as altcoin‘s revenue contribution increased with the addition of altcoin (ALT) offerings in the Coincheck’s marketplace. Coincheck’s market place trading value & BTC price Quarterly revenue contribution of BTC vs ALT （¥ Billion） （¥）
Slide 8: Business Overview 4/5
Business Overview 4/5 Monex has steadily expanded its online securities business overseas under “Global Vision” and entered the crypto asset-related business under “New Beginning.” Now it is seeking further growth in the US and Crypto Asset segments by exploring new capitalization strategy and other
Slide 9: Business Overview 5/5
Business Overview 5/5 Quarterly EBITDA* was ¥13.0B. Monex aims for a sustainable increase in corporate value through business model transformation and mid-to-long term growth drivers going forward. Transformation of existing Three mid-to-long term Enhanced business models growth drivers corporate va
Slide 10: Highlights 1Q of FYE Mar. 2022 (3 months) 1/4
Highlights 1Q of FYE Mar. 2022 (3 months) 1/4 Crypto Asset segment performed strongly and consolidated quarterly pre-tax profit was ¥ 11.1B. In 1Q, achieved 50% of ¥ 21.3B of the pre-tax profit of the previous fiscal year (12 months) . Segment profit was ¥ 2.1B with an increase in recurring revenues
Slide 11: Highlights 1Q of FYE Mar. 2022 (3 months) 2/4
Highlights 1Q of FYE Mar. 2022 (3 months) 2/4 ◆Total operating revenue after deducting financial expenses and quarterly profit attributable to owners of the Company Quarterly Pre-taxes Profit 11,107 (JPY million) Total operating revenue after deducting financial expenses Consolidated Quarterly profi
Slide 12: Highlights 1Q of FYE Mar. 2022 (3 months) 3/4
Highlights 1Q of FYE Mar. 2022 (3 months) 3/4 ◆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) 8,000 6,880
Slide 13: Highlights 1Q of FYE Mar. 2022 (3 months) 4/4
Highlights 1Q of FYE Mar. 2022 (3 months) 4/4 ◆Total operating revenue after deducting financial expenses and Segment profit (JPY million) Total operating revenue after deducting financial expenses Asia Pacific Segment profit (Quarterly profit before income taxes) 600 528 394 359 400 324 323 149 198
Slide 14: II. Consolidated Performance
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 13
Slide 15: YoY Comparison (3 months) Consolidated Performance
YoY Comparison (3 months) Consolidated Performance FYE Mar. 2021 FYE Mar. 2022 Q1 Q1 Rate of (JPY million) Variance Reference (Apr. 2020– (Apr. 2021– change Jun. 2020) Jun. 2021) P16: Analysis of Japan segment Total operating revenue after deducting financial expenses 13,208 26,069 +12,860 +97% P18:
Slide 16: YoY Comparison (3 months) Segment Performance
YoY Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q Total operating revenue after deducting financial expenses 6,811 7,373 5,326 5,728 820 12,739
Slide 17: YoY Analysis: Operating Revenue (Japan)
YoY Comparison (3 months) Analysis: Operating Revenue Japan : The recurring revenue from margin trading and mutual fund balance including Monex Activist Fund increased, so does revenue from growth products such as US equities and cryptocurrency CFDs. ■ Total operating revenue after deducting Total o
Slide 18: YoY Analysis: SG&A (Japan)
YoY Comparison (3 months) Analysis: SG&A Japan : Advertising expenses increased due to an increase in new accounts opening. Fixed costs such as system related expenses are adequately controlled. ■ SG&A SG&A Total +4.5% (+259) (JPY million) * Figures in parentheses indicate the variance from the prev
Slide 19: YoY Analysis: Operating Revenue (US, USD)
YoY Comparison (3 months) Analysis: Operating Revenue (USD) US : Other commissions increased due to an increase in trading volume through commission-free plans, which surpassed the drop in brokerage commissions. Net financial income increased even under low interest rates due to higher engagement in
Slide 20: YoY Analysis: SG&A (US, USD)
YoY Comparison (3 months) Analysis: SG&A (USD) US : To further accelerate the steady increase in the number of accounts, TradeStation has strengthened its advertising activities. Compensation and benefits increased as a result of increased staffing as an investment for future growth. ■ SG&A SG&A Tot
Slide 21: YoY Analysis: Operating Revenue (Crypto)
YoY Comparison (3 months) Analysis: Operating Revenue Crypto : Coincheck’s trading value at the market place significantly increased due to the volatile crypto market, the addition of altcoin offerings, and a significant account growth. Especially, trading value of altcoins increased significantly,
Slide 22: YoY Analysis: SG&A (Crypto)
YoY Comparison (3 months) Analysis: SG&A Crypto : Advertising expenses increased due to proactive marketing efforts such as TV commercials to acquire new accounts. SG&A Total +423.6% (+3,035) ■ SG&A * Figures in parentheses indicate the variance from the previous year (JPY million) [these are compar
Slide 23: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance （JPY million） 4Q FYE Mar. 1Q FYE Mar. 2021 2022 Rate of Variance change Reference (Jan. 2021- (Apr. 2021- Mar. 2021) Jun. 2021) P24: Analysis of Japan segment Total operating revenue after 29,762 26,069 -3,694 -12% P26: Analysis of US segment (USD)
Slide 24: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 4Q 1Q 4Q 1Q 4Q 1Q 4Q 1Q 4Q 1Q Total operating revenue after deducting financial expenses and 8,544 7,373 6,880 5,728 14,233
Slide 25: QoQ Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan : Revenue decreased due to a decline in market trading volume of Japanese equity, but recurring revenue from mutual funds and margin trading and revenue from growth products such as cryptocurrency CFDs increased. ■Quarterly total operating
Slide 26: QoQ Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan : Decrease in commissions paid due to lower trading volume of Japanese equity. Controlled personnel costs was driven by lower performance-linked bonuses. Quarterly SG&A -7.2％ (-465) ■Quarterly SG&A * Figures in parentheses indicate the variance from the
Slide 27: QoQ Analysis: Operating Revenue (US, USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US : Lower volatility (VIX) related to easing of concerns around COVID-19 and the ‘meme-stock’ activities*1 resulted in normalization of commission revenue and net financial income. *1 Individual investors like to invest in stocks based on
Slide 28: QoQ Analysis: SG&A (US, USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US : Advertising expenses increased due to further expansion of customer base. Professional fees increased for new growth strategies. ■Quarterly SG&A Quarterly SG&A +4.8% (+2,444) (USD thousand) * Figures in parenthesis is the variance from previous qua
Slide 29: QoQ Analysis: Operating Revenue (Crypto)
QoQ Comparison (3 months) Analysis: Operating Revenue Crypto : Trading volume remained brisk from the last quarter and revenues remained high due to the high volatility of crypto asset prices. ■Quarterly total operating revenue after deducting financial Quarterly total operating revenue after expens
Slide 30: QoQ Analysis: SG&A (Crypto)
QoQ Comparison (3 months) Analysis: SG&A Crypto : Coincheck conducted marketing to acquire new accounts. Total expenses slightly decreased QoQ. Quarterly SG&A -6.3％ (-253) ■Quarterly SG&A * Figures in parentheses indicate the variance from the previous quarter (JPY million) (JPY million) 4,005 ■ Oth
Slide 31: Summary of Statement of Financial Position
Summary of Statement of Financial Position The difference between “Net capital” and “Non-current assets” is the source of funds for investments and shareholders distribution. ◆Summary of consolidated statement of financial position as of June 30, 2021 (*1) Non-current Assets Assets Liabilities Prope
Slide 32: Shareholders' Distribution
Shareholders’ Distribution Given the successful business transformation of each segment, revision of shareholders’ return policy is under consideration to accelerate further growth. ◆ Total return amount (*2) and total return ratio ◆ Return on equity ratio （million yen） Amount of dividends (left) Am
Slide 33: III. Business Update
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 32
Slide 34: Business Update Japan Segment 1/4
Business Update Japan Segment 1/4 Aiming to improve financial access and expand customer base by waiving purchase fees for odd-lot shares. Optimizing trading environment for small investors in Japan Conceptual diagram for Fee change for odd-lot shares expanding customer base • In a first for a domes
Slide 35: Business Update Japan Segment 2/4
Business Update Japan Segment 2/4 UUs for U.S. equity trading grew substantially. Steady increase in the balance of mutual funds. US Equity Mutual Fund • U.S. stock trading has become the number • Use of the daily installment service increased one reason for opening a new account at and the monthly
Slide 36: Business Update Japan Segment 3/4
Business Update Japan Segment 3/4 Encouraging individual investors to participate in corporate transformation and further democratizing capital markets. One Year Anniversary of Monex Activist Fund • AUM has reached 9.6 billion yen* in one Base Value Favorable performance of year since the public off
Slide 37: Business Update Japan Segment 4/4
Business Update Japan Segment 4/4 AUM of the discretionary investment management service ON COMPASS+ reached 10 billion yen, and AUM of the IFA business reached 22 billion yen. ON COMPASS / ON COMPASS+ IFA Business Contracted IFA firms increased to 10, and AUM ¥10.2B* revenues expanded mainly in bon
Slide 38: Business Update US Segment 1/2
Business Update US Segment 1/2 Customer base expansion has reduced dependence on trading volatility. Account Additions & Client Assets Trading Volumes • Significant account growth driven by focused digital • DARTs remain at elevated levels, with YoY growth driven by marketing efforts, including incr
Slide 39: Business Update US Segment 2/2
Business Update US Segment 2/2 TradeStation is moving forward with its transformational strategy to support the expansion of legacy and new businesses to a wider audience of investors. Commission Revenue TradeStation Crypto (TCI) • Brokerage commissions and PFOF revenue in total were • TradeStation
Slide 40: Business Update Crypto Asset Segment 1/4
Business Update Crypto Asset Segment 1/4 Coincheck focuses on acquiring new customers and maintains its position as a leading company in the Japanese crypto asset industry. Leading Company Among Japanese Crypto Exchanges Strong Support among Young Generation No.1 app DLs*1 and supported coins among
Slide 41: Business Update Crypto Asset Segment 2/4
Business Update Crypto Asset Segment 2/4 Coincheck maintains a high operating profit margin while focusing on new account acquisition with marketing. Operating Profit Margin Marketing Expence and Number of Accounts • Coincheck has a low-cost structure with a small • Coincheck’s populality increased
Slide 42: Business Update Crypto Asset Segment 3/4
Business Update Crypto Asset Segment 3/4 Coincheck is the Japan’s first NFT marketplace among domestic crypto asset exchange business and conducted Japan’s first IEO. Non-Fungible Token (NFT) Japan’s First IEO • Coincheck NFT (β version) is monetized from Mar. 2021. • Coincheck launched Japan’s firs
Slide 43: Business Update Crypto Asset Segment 4/4
Business Update Crypto Asset Segment 4/4 Coincheck supports the primary to secondary distribution of crypto assets through its IEO business, and contributes to the further development of crypto assets and the blockchain industry. Building a Digital Economic Zone Through Expansion of Each Business Cr
Slide 44: Business Update Asia Pacific Segment
Business Update Asia Pacific Segment Asia Pacific segment showed steady growth despite a decline in transaction volume from the previous quarter. Monex Boom / Monex Australia Cherry Technology Co., Ltd (China) U.S. equity trading remains popular, which Providing technology and knowledge of the conne
Slide 45: Business Update Investment Business
Business Update Investment Business Continued to expand investment portfolio with the establishment of the MV2 fund following MV1. Investment Entity Investment Portfolio MV1 fund to shift to incubation phase Investment 2.65 billion yen (Founded in Jan.2019) Size Completed investment phase with 58 In
Slide 46: Business Update ESG Management 1/2
Business Update ESG Management 1/2 Invigorated DEI (Diversity, Equity & Inclusion) initiatives, including revising its corporate philosophy and formulating a sustainability statement Committed to building a sustainable society based on DEI Corporate Philosophy with Sustainability Statement Sustainab
Slide 47: Business Update ESG Management 2/2
Business Update ESG Management 2/2 Established a climate impact fund to address the global environmental issues in the scope of our core business as a financial institution. Commencement of transactions related to environment-related assets Sustainable Finance Entry into the J-credit trading market
Slide 48: Appendix. Group Overview
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 47
Slide 49: Group Overview－Revenues, Costs, and Employees
Group Overview－Revenues, Costs, and Employees Total operating revenue Selling, general and The amount equivalent to after deducting financial expenses administrative expenses operating income 2％ 1％ 2％ 0％ 2％ 2％ 12％ 25％ 28％ ¥73.7B 39％ ¥49.9B 46％ ¥23.8B FYE Mar 2021 FYE Mar 2021 FYE Mar 2021 9％ 30％ 40％
Slide 50: 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 i
Slide 51: Monex Group structure
Monex Group (As of June 30, 2021) Listed Holding Company [Japan] [US/Europe] [Asia Pacific] Crypto asset exchange Online Securities Company Monex International Limited service provider Holding Company in Hong Kong TradeStation Group, Inc. Online Securities Company Holding Company in the U.S. Monex,
Slide 52: Overview of Monex Group and Main Subsidiary Companies
Overview of Monex Group and Main Subsidiary Companies ■ Monex, Inc. (Tokyo, Japan) ■ Coincheck, Inc. (Tokyo, Japan) One of the major online brokerage firms in Japan Crypto asset Exchange/Marketplace agency - President : Yuko Seimei - President: Satoshi Hasuo - Founded in 1999 - Founded in 2012, join
Slide 53: History of Monex Group
History of Monex Group Japan U.S. Asia Pacific 1982 - TradeStation Technologies, Inc. is formed as Omega Research, Inc. 1997 - TradeStation stock lists on NASDAQ - Boom Securities (H.K.) Limited is founded (now Monex Boom Securities (H.K.) Limited), becoming the first in Asia Pacific to launch Inter
Slide 54: Investors' Guide
Investors’ Guide ■ Shareholders distribution ■ Shareholders & indicators per share ◆ Our basic policy for shareholders distribution ◆ Major shareholders and shareholder breakdown Monex Group aims to provide returns to its shareholders (as of March 31, 2021) Monex Group, Inc. based on the business pe
Slide 55: Investment Segment – Portfolio 1/3
Investment Segment – Portfolio 1/3 ◆ Monex Ventures, Inc. P2P lending EC Settlement DLT* Prop Tech Online lending （Registered as Type 2 Financial Instruments Business） AI/Big Data Thematic Investment AI/Big Data Vacation Rental B2B SaaS E-market place （Registered as Type 1 Financial Instruments Busi
Slide 56: Investment Segment – Portfolio 2/3
Investment Segment – Portfolio 2/3 ◆ MV I Investment Limited Partnership B2B SaaS E-market place B2B SaaS Logistics B2B Saas EC Asset Management EC E-market place Ad Tech B2B Saas B2B SaaS B2B SaaS B2B SaaS Agri-Tech B2B Saas Insure Tech KYC / Big Data B2B SaaS Robotics Marketplace AI / Sports-tech
Slide 57: Investment Segment – Portfolio 3/3
Investment Segment – Portfolio 3/3 ◆ MV I Investment Limited Partnership B2B SaaS EC EC VR Elderly Care B2B SaaS Audio Content Marketing VR Healthcare ◆ MV II Investment Limited Partnership Pet-tech HR Marketplace 56