Monex Group, Inc. · TSE:8698
Monex — 1H FYE March 2011 Earnings Presentation
37 slides from Monex's earnings presentation, Oct 26, 2010
Slide 1: Financial Results of 1H of Fiscal Year Ending March 31, 2011
October 26, 2010 Financial Results of 1H of Fiscal Year Ending March 31, 2011 This is an English translation of Japanese presentation material prepared for the financial disclosure on the date above; it includes the information on consolidated financial summary under Japanese GAAP. If there is any d
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 1. PURSUE A SPIRIT OF INNOVATION We will constantly strive to pioneer new fields in finance and propose new approaches to managing money. 2. STAY CUSTOMER FOCUSED We believe that the best guide to our corporate activities is the voice of our customers. With this guide, we wil
Slide 4: Table of Contents
Table of Contents Important Matters Concerning Product-related Risks ･･･ p.1 Our Business Principles ･･･ p.2 I. Financial Results 1. Financial Overview 2. Business Strategies (1) Major Business Activities for 2Q ･･･ p.5 (1) Short-term Strategy: Cost Reduction after the Merger ･･･ p.21 (2) Financial
Slide 5: 1. Financial Results
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 4
Slide 6: Major Business Activities for the Second Quarter
Major Business Activities for the Second Quarter ◆ Trends of major revenue sources - Though revenues went down influenced by severe market condition, the cost reduction related to the merger of Monex, Inc. and ORIX Securities since May 2010 contributes to net income - Stock trading volume of Monex,
Slide 7: Financial Overview
Financial Overview ■Financial Overview of 2Q(Jul.- Sep.) of FYE Mar. 31, 2011 Significant decline on operating income compared with the previous quarter due to stock markets downturn and low volatility in FX trading markets Net operating revenues 4,846 million yen -24.7% from 1Q of FYE Mar. 31, 201
Slide 8: Highlights of Revenue (1) Increasing and Decreasing Factors
Highlights of Revenue (1) Increasing and Decreasing Factors ■Comparison with 1Q of FYE Mar. 31, 2011 ■Comparison with 1H of FYE Mar.31, 2010 ◆ Decreased due to stock markets downturn and lower ◆ Increased due to increase in FX trading values and volatility in FX trading markets improvement of Financ
Slide 9: Highlights of Revenue (2) Revenue Trends and Structure
Highlights of Revenue (2) Revenue Trends and Structure ■Net operating revenue and operating income ■Revenue structure and dependency on brokerage Million yen 100 Million yen ◆Revenue and asset in custody （1H of FYE Mar. 31, 2011） 1 0 ,000 Net operating revenue (left） 8 , 000 Operating income （left）
Slide 10: Highlights of SG&A (1) Decreasing and Increasing Factors
Highlights of SG&A (1) Decreasing and Increasing Factors ■Comparison with 1Q of FYE Mar. 31, 2011 ■ Comparison with 1H of FYE Mar.31, 2010 ◆System related costs decreased due to merger ◆Systems related costs and compensation and benefits related cost reduction increased due to the merger Decreased b
Slide 11: Highlights of SG&A (2) Cost Structure and Trends
Highlights of SG&A (2) Cost Structure and Trends ■Cost Structure (Apr. 2010 - Sep. 2010) ■ SG&A Quarterly trends Strategically (Million yen) controllable costs Fixed costs and costs Commission to correlated to the 4,873 4,891 stock exchange 5,000 number of accounts 4,137 etc. 4,000 3,585 3,447 Adver
Slide 12: Balance Sheet
Balance Sheet ■Maintain financial strength by keeping availability of funds and liquidity and controlling risk assets (*3) Non-current assets（investment value of risk assets） (in billion yen) (in billion yen) [Cash margin from customers Property/equipment 0.6 （Facilities, equipment, etc） [Segregated
Slide 13: Financial Summary: 1Q vs. 2Q of FYE Mar. 31, 2011
Financial Summary : 1Q of FYE Mar. 31, 2011 vs. 2Q of FYE Mar. 31, 2011 (in 3 months) （in million yen, %） 1Q of FYE Mar. 31, 2011 2Q of FYE Mar. 31, 2011 Change (Apr. 2010 – Jun. 2010） (Jul. 2010 – Sep. 2010） Operating Revenues 7,407 5,277 -28.8% Net Operating Revenues 6,432 4,846 -24.7% SG&A 4,891
Slide 14: Financial Summary: 1H FYE Mar. 2010 vs. 1H FYE Mar. 2011
Financial Summary : 1H of FYE Mar. 31, 2010 vs. 1H of FYE Mar. 31, 2011 （in million yen, %） 1H of FYE Mar. 31, 2010 1H of FYE Mar. 31, 2011 Change (Apr. 2009-Sep. 2009) (Apr. 2010-Sep. 2010) Operating Revenues 11,380 12,685 11.5% Net Operating Revenues 9,982 11,279 13.0% SG&A 7,139 9,029 26.5% Opera
Slide 15: Financial Summary: Quarterly trends in income statement
Financial Summary：Quarterly trends in income statement （in million yen） FYE Mar.31, 2009 FYE Mar. 31, 2010 FYE Mar. 31, 2011 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Brokerage commissions 3,505 2,612 2,911 2,342 3,145 2,670 2,073 2,604 2,772 1,904 Underwriting and distribution commissions 1 0 1 2 1 3 3 14 1 1
Slide 16: Financial Summary: Quarterly trends in SG&A
Financial Summary：Quarterly trends in SG&A （in million yen） FYE Mar.31, 2009 FYE Mar. 31, 2010 FYE Mar. 31, 2011 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 1Q Transaction-related expenses 1,182 1,172 1,188 1,095 979 1,044 948 1,247 1,267 1,118 Commissions paid 238 214 240 190 196 263 181 194 246 217 Exchange and as
Slide 17: Comparison Analysis: Revenues/SG&A per Customers' Assets in Custody
Comparison Analysis : Revenues/SG&A per Customers’ Assets in Custody Matsui (Consolidated） Mitsui Sumitomo FG （Annualized） ◆ SG&A reduced as expected after the merger of (Consolidated） 2.0% Monex, Inc and ORIX Securities as of May 1, 2010. 1Q of Mar. 2011 1Q of Mar. 2011 This led to the decrease in
Slide 18: 2. Strategies
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 17
Slide 19: Mission Statement
Mission Statement Take the position as an online integrated financial service provider for individual investors Provide individual investors with institutional investor level investment opportunities Offer comprehensive products and services with “world class quality” Empower investors educa
Slide 20: The Monex Group
The Monex Group Holding Company （As of October 26, 2010） [ Financial products and services for individual investors ] [ Overseas subsidiary and office ] Securities Company FX Business Overseas Businesses Beijing Representative Office (Monex Group) BaiFor Investment Advisory Ltd. Financial training J
Slide 21: Roadmap
Roadmap ■ Aim for overseas business to contribute 1/3 of the total revenue Our goal is to become a GLOBAL TECHNOLOGY-BASED RETAIL financial services provider Moved up overseas revenue contribution by business development in Hong Kong Strategies for future growth （Achievements） Short-term: - Expan
Slide 22: Short-term Strategy: Cost Reduction and P/L Impact after the Merger
Short-term Strategy: Cost Reduction and P/L Impact after the Merger ■Monthly Trend of Cost Reduction (SG&A) Merger-related temporary 0.5 billion yen decrease costs ◆ The total amount of Compensation and 1.94 1.95 （in billion yen） Transaction-related benefits and system related costs in May 9.3% 10.8
Slide 23: Mid-term Strategy: Overseas Business Development
Mid-term Strategy: Overseas Business Development ■Achievements and future plans for overseas business development ◆ Acquiring BOOM Group in Hong Kong, Asia’s global ◆ Achievements in mainland China financial center ・ Opening Beijing Rep. Office of Monex, Inc. CSRC approved the set up of Monex, Inc.
Slide 24: Mid/Long-term Strategy: Intelligence Infrastructure
Mid/Long-term Strategy: Intelligence Infrastructure ■“Intelligence Infrastructure” ■Portfolio management advice tool “MONEX VISION” Creating a new value by financial intelligence & IT released on Oct. 1, 2010 Give market information and education to customers Function： -Chief Economist N.MURAKAMI, M
Slide 25: Capital Strategy: Strengthening for Overseas Business Development
Capital Strategy: Strengthening for Overseas Business Development ■Public offering of new shares and secondary offering by a major shareholder ◆Offering Overview (announced on Sep 21, 2010） ・Issue price of this offering: 23,745 yen per share （Price determined on Oct 4, 2010） ・Public offering: Issued
Slide 26: 3. Businesses
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 25
Slide 27: Breakdown of Net Operating Revenues
Breakdown of Net Operating Revenues ■1H of FYE Mar. 31, 2011 （6 months： from Apr. 2010 to Sep. 2010） （in million yen） Business category Revenues from “stock” Revenues from “flow” Total % Refer to Cash trading commissions 2,396 Equity Net financial income 2,228 Margin trading commissions 1,706 6,449
Slide 28: Change of Revenue Structure
Change of Revenue Structure ■Change of revenue structure by business category （Net Operating Revenues） 100% 3% 2% 2% 2% 2% 4% Others 90% 17% 19% 17% 18% 23% 22% Net financial income 80% 3% 2％ 6% 5% 1％ 3% 6% 3% 1％ 70% 6% 4% 1％ 6% 2% 1％ 3% 7% Agency commissions, management fee, etc. 1% 8% 2% 1％ 60% 13
Slide 29: Equity Business
Equity Business ■Stock ■ Stock Lending Service ◆Keeping margin trading customer base ◆Aim to increase accounts by service improvement - Keeping customer base of ORIX Sec. (OS) -Number of the accounts constantly increasing. - Enhanced campaigns and investment supporting information. -Outstanding bala
Slide 30: Derivative Business
Derivative Business ■Futures/Options ■Exchange (listed) CFDs ◆Lowest commission level in the industry, but market ◆The first major online broker to provide “Click kabu 365” share decreased due to intensified competitiveness ・The first major online broker to provide exchange equity ・Continue to provi
Slide 31: FX Business: Expanding profit on a growing market
FX Business：Expanding profit on a growing market ■Expanding trading profit at a good rate ■Monex, Inc Revenue (miｌｌion yen) Trading volume (billion yen) ◆ Monex, Inc. “FX PLUS” OSE FX: Trading volume 800 3,500 ・Planning to add new type of order trading revenue Revenue Handing fee Trading “trailing o
Slide 32: Mutual Fund Business
Mutual Fund Business ■Strengthen product lines and services to expand mutual fund asset ■Top-class online mutual fund sales ◆Increase in sales of foreign currency MMF due to sales ◆Keeping top-class position in online mutual fund sales （billion yen （billion yen/ campaign with commission cash back (J
Slide 33: Alternative Investment Business
Alternative Investment Business ■Institutional mandates exceed JPY 5 billion ■Twin engines; individual and institutional ◆Global FOF: Institution trust MAI records of individual Investor Fund nickname Portfolio assets AUM ◆ MAI has been awarded milestone repatriation mandates Asia Focus HF of Japan
Slide 34: Fixed Income/R&D/Investment Banking Business
Fixed Income/R&D /Investment Banking Business ■Fixed income Business ■Investment Banking Business ◆Expansion of products & services to meet investor needs (Monex, Inc.） Succeeded in facilitate the inflow of the redemption money to: ◆Domestic IPO Underwriting, Financing and IR -New issue bonds ・In 2Q
Slide 35: Customer Portfolio of Monex, Inc.
Customer Portfolio of Monex, Inc. (1,283,440 accounts as of the end of Sep., 2010*) ■ Sex ■ District Others Female 23.7% 24.6% Tokyo Metropolitan District Nagoya District 48.9% Male 9.0% 75.4% Osaka District 18.4% ■ Age ■ Occupation Over 70 4.9% Company Employee 45.4% 60s 13.0% Unemployed 19.1% Hous
Slide 36: 4. To our Shareholders
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 35
Slide 37: Investors' Guide
Investors’ Guide ■Pursuing investment returns for our shareholders ◆Basic policy for shareholder’s return Major shareholders and share distribution - The Company’s policy for shareholder’s return is to pay the Total number of issued shares as of end of Sep. 2010: dividends based on the business per
Monex Group — 1H FYE March 2011 Earnings Presentation on 6ix