Monex Group, Inc. · TSE:8698
Monex — Q3 FY2015 Earnings Presentation
40 slides from Monex's earnings presentation, Jan 29, 2015
Slide 1: Financial Results for 3Q of Fiscal Year Ending March 31, 2015
January 29, 2015 (TSE 1st Section: 8698) Financial Results for 3Q of Fiscal Year Ending March 31, 2015 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 co
Slide 2: 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 3: Table of Contents
Table of Contents Our Business Principles p. 1 Table of Contents p. 2 I. Corporate Strategy Highlights p. 3 - p.10 II. Mid- & Long-term Strategy “Global Vision” p.11 - p.15 III. Consolidated Performance Highlights p.16 - p.24 IV. Segment Performance Highlights p.25 - p.34 V. Group Overview p.35 - p.
Slide 4: I. Corporate Strategy Highlights
I. Corporate Strategy Highlights II. Mid- & Long-term strategy “Global Vision” III. Consolidated Performance Highlights IV. Segment Performance Highlights V. Group Overview 3
Slide 5: Continuous investment for sustainable growth
Continuous investment for sustainable growth Creating a unique business model under “Global Vision”, our mid- to long-term (FYE Mar. 2012 – FYE Mar. 2018) strategy (mil yen) Consolidated operating revenue (*) 60,000 50,000 Goal is to expand 40,000 customer base and revenue with 30,000 internalizatio
Slide 6: Core revenue source: online brokerage for retail investors
Core revenue source: online brokerage for retail investors Our highly competitive equity brokerage business in Japan, the U.S. & China (H.K.) will continue to be our core revenue stream while we expand into B2B business 【B2C】 Offer online financial services for retail investors in Japan, the U.S. an
Slide 7: Stronger profit growth among competitors
Stronger profit growth among competitors 3Q Operating income up 70% QoQ in Japan segment, the Group’s core revenue stream, showing stronger growth among competitors ◆Comparison with three online brokers (2Q FYE Mar. 2015 vs. 3Q FYE Mar. 2015 (3months)) （mil yen,%） Monex Group, Inc Kabu.com Securitie
Slide 8: Operating Revenue: 60% Japan, 40% US
Operating Revenue: 60% Japan, 40% US Globalization realized diversification of revenue base. Toward stabilized revenue source, aim to have longer revenue ratio in US and China ◆Operating revenue by region and by business Others 2% Financial Revenue Equities 10% 30% FX 3% China Options 1% 4% U.S. Fut
Slide 9: SG&A 27,413 million yen; Employees
Globally control system related costs & personnel costs for our strategy Internalize systems and hire engineers as scheduled while controlling costs globally ◆SG&A by segment and by cost items ◆Employees by segment and by professions Technology Others FX business 5% 5% （※） 2% Marketing System 10% re
Slide 10: Shareholders' return
Shareholders’ return Maintain dividend payout policy. Year-end dividend will be based on 50% of net income of 3Q and 4Q - Maintain dividend payout policy. Dividends amount will be determined by referencing the higher of 50% of dividend ratio of net income attributable to owners of the Company or 1%
Slide 11: Corporate Governance
Corporate Governance Establish global-standard organization and fair disclosure / discussion with various shareholders ■Company with committees structure ■Efforts for valuable discussion with shareholders - Adopted in June 2013. Listed companies with “company with - Pursue fair & timely disclosure f
Slide 12: II. Mid- & Long-term Strategy Global Vision
I. Corporate Strategy Highlights II. Mid- & Long-term strategy “Global Vision” III. Consolidated Performance Highlights IV. Segment Performance Highlights V. Group Overview 11
Slide 13: Global Vision: Monex's mid- and long-term business strategy
Global Vision Monex’s mid- and long-term business strategy Globally pursue “mid- and long-term revenue growth” and “fixed-type cost reduction” “Global Vision” is a mid- and long-term business strategy which Monex Group, Inc. has promoted since FYE March 2012 with an aim towards “Globalization” and “
Slide 14: Focus of Global Vision
Focus of Global Vision ■ Mid- and long-term revenue growth - Differentiated products & services among group companies are developed and offered to retail investors - Diversify revenue sources by expansion of B2B business utilizing Monex’s own internalized system - Diversify revenue sources by geogra
Slide 15: Timeline of mid- & long-term strategy Global Vision
Timeline of mid- & long-term strategy “Global Vision” FYE Mar. 2013 FYE Mar. 2014 FYE Mar. 2015 FYE Mar. 2016 FYE Mar. 2017 FYE Mar. 2018 Completed project Ongoing project ●Nov. 2012 Upgraded U.S. equity service for Japanese customers Revenue Growth ●Dec. 2013 Started “Tokutei” accounts(*) to Japane
Slide 16: Cost-cutting plan in Global Vision
Cost-cutting plan in Global Vision Cost increase / decrease prospect from FYE Mar. 2013 Increase / decrease of fixed-type costs in consolidated SG&A, assuming FYE Mar. 2013 as the baseline Prospect as of Dec. 31, 2014 Cost reduction effect will appear in FYE Mar. 2017 when parallel operation of a
Slide 17: III. Consolidated Performance Highlights
I. Corporate Strategy Highlights II. Mid- & Long-term strategy “Global Vision” III. Consolidated Performance Highlights IV. Segment Performance Highlights V. Group Overview 16
Slide 18: Business Highlights
Business Highlights Revenue up over 9% QoQ in all segments. Japan, 60% of the group’s revenue, up 21% 3Q of FYE Mar. 2015 (3 months) 3Q FYE Mar. 2015 vs 2Q FYE Mar. 2015 Total revenue: JPY 14,184 million +16.9% Quarterly income before income taxes: JPY 3,190 million JPY -578 million in 2Q 3Q of FYE
Slide 19: Financial Summary: 2Q vs. 3Q FYE Mar. 2015 (3 months)
Financial Summary: 2Q of FYE Mar. 2015 vs. 3Q of FYE Mar. 2015 (3 months) Total operating revenue up 18%; up 21% in Japan, up 12% in U.S. and up 11% in China (mil yen, %) 2Q of FYE Mar. 2015 3Q of FYE Mar. 2015 Fluctuation (%) (Jul. to Sep. 2014） (Oct. to Dec. 2014） Total revenue 12,135 14,184 16.9%
Slide 20: Major Increase/Decrease Factors of Revenue and Expenses (QoQ)
Major Increase/Decrease Factors of Revenue and Expenses (QoQ Comparison) Revenue increased significantly due to total revenue up and total expense down ■ Total revenue (Comparison with Jul. to Sep. 2014) ■ Total expenses (Comparison with Jul. to Sep. 2014) ■Total revenue increased mainly due to incr
Slide 21: Financial Summary: 3Q FYE Mar. 2014 vs. 2015 (9 months)
Financial Summary: 3Q of FYE Mar. 2014 vs. 3Q of FYE Mar. 2015 (9months) Total operating revenue down 13%; down 22% in Japan, but up 8% in US (mil yen, %) 3Q of FYE Mar. 2014 3Q of FYE Mar. 2015 Fluctuation(%) (Apr. to Dec. 2013） (Apr. to Dec. 2014） Total revenue 45,102 37,222 -17.5% Of Total operat
Slide 22: Major Increase/Decrease Factors of Revenue and Expenses (YoY)
Major Increase/Decrease Factors of Revenue and Expenses (vs. 3Q FYE Mar. 2014) Revenue decreased mainly due to the quiet equity and FX market (Japan and the U.S.) ■ Total revenue (Comparison with Apr. to Dec. 2013) ■ Total expenses (Comparison with Apr. to Dec. 2013) ◆Total revenue decreased due to
Slide 23: Financial Summary: Reclassified (3 months)
Financial Summary: Reclassified (2Q of FYE Mar. 2015 vs. 3Q of FYE Mar. 2015 (3 months)) Reclassified consolidated statement of income (mil yen, %) 2Q of FYE Mar. 2015 3Q of FYE Mar. 2015 Fluctuation (%) (Jul. to Sep. 2014） (Oct. to Dec. 2014） Total revenue 12,020 14,134 17.6% Total operating revenu
Slide 24: Financial Summary: Reclassified (9 months)
Financial Summary: Reclassified (3Q of FYE Mar. 2014 vs. 3Q of FYE Mar. 2015 (9months)) Reclassified consolidated statement of income (mil yen, %) 3Q of FYE Mar. 2014 3Q of FYE Mar. 2015 Fluctuation (%) (Apr. to Dec. 2013） (Apr. to Dec. 2014） Total revenue 42,668 36,977 -13.3% Total operating revenu
Slide 25: Summary of Statement of Financial Position
Summary of Statement of Financial Position Established solid financial position with non-current type assets being smaller than net capital and sufficient cash and investments ◆ Summary of consolidated statement of financial position as of December 31, 2014 Assets Liabilities (*1) Non-current type a
Slide 26: IV. Segment Performance Highlights
I. Corporate Strategy Highlights II. Mid- & Long-term strategy “Global Vision” III. Consolidated Performance Highlights IV. Segment Performance Highlights V. Group Overview 25
Slide 27: Segment Performance Highlights Japan Segment (1)
Segment Performance Highlights Japan Segment (1) Stock brokerage commissions share remain stable; Try to acquire active traders ◆Stock brokerage commissions share of 5 major ◆Margin account opening (3Q FYE Mar. 2014 - 3Q FYE Mar. 2015) online brokers for the past 10 years (2Q FYE Mar. 2006 – (accoun
Slide 28: Segment Performance Highlights Japan Segment (2)
Segment Performance Highlights Japan Segment (2) Continuous support for “long-term diversification investment” contributed to increase in revenue of various products ■FX trading in good volume ■Active in US equities trading - # of traders as of Dec. 31, 2014 36% up QoQ - 175% up QoQ in trading value
Slide 29: Segment Performance Highlights U.S. Segment (1)
Segment Performance Highlights U.S. Segment (1) EBITDA recovers due to volatility recovery and personnel expense decrease ◆ Quarterly EBITDA ■Revenue up by volatility recovery and expense down by less (mil USD) personnel fee 5 - Increased revenue is attributed to higher VIX(*) index QoQ (commission
Slide 30: Segment Performance Highlights U.S. Segment (2)
Segment Performance Highlights U.S. Segment (2) Steady increase in customer assets contributed to increase in net interest income Histrical high profit from stock-lending # of new customers- 2nd biggest quarter in history ■Net interest income composed of : (A) interest income from investment managem
Slide 31: Segment Performance Highlights U.S. Segment (3)
Segment Performance Highlights U.S. Segment (3) Executed interest rate swap. Expect to bring USD 7 million of interest income in FYE Mar. 2016 ■Interest swap transactions - Aim to realize a part of future interest income from U.S. customers’ deposit (about USD 1.8 billion) of TradeStation Securities
Slide 32: Segment Performance Highlights U.S. Segment (4)
Segment Performance Highlights U.S. Segment (4) TradeStation 9.5 launched in Korea & China to diversify revenue stream ◆DARTs share among 5 U.S. major online brokers (*1) ■B2B business successful, keep seeking for further expansion TradeStation Korea E*Trade 8% - TradeStation 9.5 (latest version of
Slide 33: Segment Performance Highlights U.S. Segment (5)
Segment Performance Highlights U.S. Segment (5) Started cost-reduction plan aiming to reduce USD 17.2 mil / year; USD 11 mil is expected to reduce in FYE Mar. 2016 ◆Yearly cost reduction prospect (USD mil) 0 ■Employee compensation -2 and benefits Cost-cutting by fixed-type cost reduction plan -4 ■Da
Slide 34: Segment Performance Highlight China Segment
Segment Performance Highlight China Segment Gear up for deregulation of foreign capital companies and establishing solid ground to acquire customers in PRC Basic policy :Flexibly promote measures in mainland China while controlling downside risks ■ Activities in 3Q of FYE Mar. 2015 - Net income attr
Slide 35: Performance Highlights Corporate activities
Performance Highlights Corporate activities Enhance corporate value; establish business base by offering new value and reorganizing Japan’s operations ◆Monex, Inc. will merge with Monex FX, Inc. ◆Capital & business alliance with Shizuoka Bank - Two subsidiaries are scheduled to merge on Feb. 1, 2015
Slide 36: V. Group Overview
I. Corporate Strategy Highlights II. Mid- & Long-term strategy “Global Vision” III. Consolidated Performance Highlights IV. Segment Performance Highlights V. Group Overview 35
Slide 37: The Monex Group
The Monex Group (As of December 31, 2014) Listed Holding Company [Japan] [U.S./Europe] [China] Online Securities Company Monex International Limited Holding Company in Hong Kong TradeStation Group, Inc. Holding Company in the U.S. Online Securities Company Monex, Inc. Online Securities Company Compr
Slide 38: Introduction of Monex Group and main subsidiary companies
Introduction of Monex Group and main subsidiary companies ■ Monex Group, Inc. (Tokyo, Japan) TSE 1st Sec. Code: 8698 ■ TradeStation Group (HQ in Florida, the U.S.) - Chairman, Representative Executive Officer & CEO: Oki Matsumoto Online securities group with award winning trading technology developm
Slide 39: History of Monex Group
History of Monex Group Japan U.S. China (Hong Kong) 1982 - TradeStation Technologies, Inc. formed as Omega Research, Inc. 1997 - TradeStation stock listed on NASDAQ - Boom Securities (H.K.) Limited was founded (now Monex Boom Securities (H.K.) Limited, being the first in Asia Pacific to launch Inter
Slide 40: Investors' Guide
Investors’ Guide ■Pursue shareholders’ return by improvement of ROE ■Shareholders & indicators per share ◆ Our basic policy for shareholders’ return ◆Major shareholders and shareholder breakdown To provide return to shareholders based upon our business (as of September 30, 2014) performance, while r