Monex Group, Inc. · TSE:8698
Monex — 1H FYE March 2010 Earnings Presentation
40 slides from Monex's earnings presentation, Oct 28, 2009
Slide 1: Financial Results of 1H of Fiscal Year Ending March 31, 2010
October 28, 2009 Financial Results of 1H of Fiscal Year Ending March 31, 2010 This is an English translation of Japanese presentation material prepared for IR conference held on the date above; it includes the information on consolidated financial summary under Japanese GAAP. If there is any discrep
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 III. Businesses 1. Financial Overview 1. Brokerage Business (1) Major Business Activities for 2Q ･･･ p.5 - Stock Brokerage Business ･･･ p.24 (2) Financial Overview of 1H,
Slide 5: 1. Financial Results
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 5. Appendix 4
Slide 6: Major Business Activities for the Second Quarter
Major Business Activities for the Second Quarter ◆ Realization of cost-cuts Following the cut of 6.5% for this year’s budget compared to that from the previous fiscal year, we are continuing to carry out further cuts, realizing a 9.0% decrease for the SG&A of the first half of this fiscal year compa
Slide 7: Financial Overview
Financial Overview ■Financial Overview of 2Q(Jul.- Sep.) of FYE Mar. 31, 2010 Trading valued in major markets took downturn, and both net operating revenues and net income decreased Net operating revenues 4,763 million yen -8.7% from 1Q of FYE Mar. 31, 2010 -Brokerage commissions 2,670 million yen
Slide 8: Highlights of 2Q (1) Net Operating Revenues
Highlights of 2Q (1) Net Operating Revenues ■Comparison with 1Q of FYE Mar. 31, 2010 ■Comparison with 1H of FYE Mar. 31, 2009 ◆Equity trading values took downturn ◆Trading values decreased and temporary financial income was recognized in last 1H Decrease by 454 million yen (-8.7%) from 1Q of FYE Mar
Slide 9: Highlights of 2Q (2) SG&A
Highlights of 2Q (2) SG&A ■Comparison with 1Q of FYE Mar. 31, 2010 ■Comparison with 1H of FYE Mar. 31, 2009 ◆Temporary/variable costs increased ◆9.0% cost reduction, compared to last 1H Increase by 30 million yen (+0.9%) Decrease by 709 million yen (-9.0%) from 1Q of FYE Mar. 31, 2010 from 1H of FYE
Slide 10: Highlights of 2Q (3) Balance Sheet
Highlights of 2Q (3) Balance Sheet ■Maintain a safe financial structure by maintaining liquidity and credit trust, and by controlling risk assets (in billion yen) (*3) Non-current assets（investment value of risk assets） (in billion yen) [Segregated cash trust] [Cash margin from customers Property/eq
Slide 11: Financial Summary: 1Q vs. 2Q of FYE Mar. 31, 2010
Financial Summary : 1Q of FYE Mar. 31, 2010 vs. 2Q of FYE Mar. 31, 2010 (in 3 months) (in million yen, %) 1Q of FYE 2Q of FYE Mar. 31, 2010 Mar. 31, 2010 Change (Apr. 2009-Jun. 2009) (Jul. 2009-Sep. 2009) Operating Revenues 6,138 5,242 -14.6 ％ Net Operating Revenues 5,218 4,763 -8.7 ％ SG&A 3,554 3,5
Slide 12: Financial Summary: 1H FYE Mar. 2009 vs. 1H FYE Mar. 2010
Financial Summary : 1H of FYE Mar. 31, 2009 vs. 1H of FYE Mar. 31, 2010 (in million yen, %) 1H of FYE 1H of FYE Mar. 31, 2009 Mar. 31, 2010 Change (Apr. 2008-Sep. 2008) (Apr. 2009-Sep. 2009) Operating Revenues 13,952 11,380 -18.4 ％ Net Operating Revenues 11,847 9,982 -15.7 ％ SG&A 7,849 7,139 -9.0 ％
Slide 13: Financial Summary: Financial highlights (quarterly trend)
Financial Summary：Financial highlights (quarterly trend) ■Net operating revenues and operating income ■ROE (Annualized) (million yen) (billion yen) 20% 14% 12,000 1,000 15% Total trading value 10% 6% 4% of individual investors 5% in 4 major stock exchanges 900 0% (Average per business day) (right) -
Slide 14: Financial Summary: Profit margin and cost structure
Financial Summary：Profit margin and cost structure ■Profit Margin (Operating income/ Net Operating revenues)* ■Cost Structure (Jul. 2009 - Sep. 2009) 60% Strategically Fixed costs and costs 50% controllable costs correlated to the number of accounts 40% Commission to 33% 32% stock exchange 30% 25% e
Slide 15: Financial Summary: Quarterly trends in income statement
Financial Summary：Quarterly trends in income statement (in million yen) FYE Mar.31, 2008 FYE Mar.31,2009 FYE Mar.31,2010 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Brokerage commissions 4,228 4,160 4,022 3,692 3,505 2,612 2,911 2,342 3,145 2,670 Underwriting and distribution commissions 19 77 5 9 1 0 1 2 1 3 Sub
Slide 16: Financial Summary: Quarterly trends in SG&A
Financial Summary：Quarterly trends in SG&A (in million yen) FYE Mar.31, 2008 FYE Mar.31,2009 FYE Mar.31,2010 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Transaction-related expenses 1,361 1,310 1,151 1,099 1,182 1,172 1,188 1,095 979 1,044 Commissions paid 231 248 245 233 238 214 240 190 196 263 Exchange and asso
Slide 17: 2. Strategies
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 5. Appendix 16
Slide 18: 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 19: The Monex Group
The Monex Group Holding Company （As of September 30, 2009） [ Financial products and services for individual investors ] [ Overseas subsidiary and office ] Securities Company FX Business Overseas Businesses MBH America, Inc. Research in the global financial industry Monex FX, Inc. （Investment Ratio）
Slide 20: Roadmap
Roadmap ■ Long-term goal: Aim for overseas business to contribute to 1/3 of the total revenue Our goal is to become a GLOBAL TECHNOLOGY-BASED RETAIL financial services provider Future growth and management policy Online • Expanding active trader customer segment Trading • Strengthening FX business
Slide 21: Overseas Business Development
Overseas Business Development ■Business development and areas of growth ■Update on overseas business development Overseas markets with high growth potential ◆ China With the extraordinary levels of economic growth we see March 2008 - Establishment of Beijing Representative in countries such as the
Slide 22: Revenues/SG&A per Customers' Assets in Custody
Comparison Analysis : Revenues/SG&A per Customers’ Assets in Custody (Annualized) Matsui (Consolidated) Rakuten Securities Customers’ assets in custody remained unchanged 2.0% 1Q of Mar. 2010 Holdings compared to the end of 1Q. (Consolidated) Revenues per customers’ assets in custody decreased 1Q of
Slide 23: Current and Future Structure of Revenues and Customers' Assets by Product
Current and Future Structure of Revenues and Customers’ Assets by Product ■Strengthen FX and mutual fund businesses and diversify revenue sources 【Current Structure (2Q of FYE Mar. 2010)】 Direction of each business line 【Future Structure】 Investment Banking （Foreign business development plan is not
Slide 24: 3. Businesses
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 5. Appendix 23
Slide 25: Stock and Derivative Brokerage Business: Expansion of shares of trading products
Stock and Derivative Brokerage Business：Expansion of shares of trading products ■Further activation of Nikkei225 Futures/Options ■Stock market ◆Market shares continually increasing ◆Mobile trading service grows -Trade volume, commission income and market share remain - Mobile trading shares steadily
Slide 26: FX Business: Expanding profit in a growing market
FX Business：Expanding profit in a growing market ■Structure of trading profit on FX business ◆Monex, Inc. FX PLUS ◆Monex FX, Inc Trading volume rose in 2Q for the following reasons: - Remained in surplus on monthly basis, and the monthly number - Made transaction fees free as of July 13, 2009 of act
Slide 27: Interest Product Business
Interest Product Business： Adding varieties to the fixed income products and growth of the stock lending service ■Enhancing fixed income products ■Original short-term investment products/services Signs that the issuance of notes will pick up because of the ◆Growth of the stock lending service stabil
Slide 28: Mutual Fund Business: Top-class online mutual fund business
Mutual Fund Business：Top-class online mutual fund business ■Strengthen product lines and services ■Top-class online mutual fund sales to expand mutual fund asset ◆Sales volume and balance ◆Keeping the top-class position in online mutual fund sales Total sales amount of equity mutual funds （billion y
Slide 29: Alternative Investment Business
Alternative Investment Business: For Global First Class Investment Management ■Individual investors business efforts http://www.monexai.com/english.php ◆Unprecedented alternative investment products for ■Institutional investors business efforts individual investors ◆Global first class performance In
Slide 30: Investment Banking Business
Investment Banking Business: Aiming towards creating new financial services ■Monex, Inc. and WR Hambrecht & Co Japan, Inc. ◆ Aiming to provide small and mid capital companies with a wide variety of investment banking services such as fund raising, investments, IPOs and M&A advice ◆ Providing one-sto
Slide 31: Intelligence Infrastructure: Creating a new value of Monex Group
Intelligence Infrastructure：Creating a new value of Monex Group ■Creating a new value - Advisory ■ Continuous outflow of information ◆Creating a new value of Monex ◆Started to provide weekly Strategy Reports -To provide proper investment advice to various customers - Started to provide weekly Strate
Slide 32: R&D: The next generation of asset management by Kabu-robo
R&D: The next generation of asset management by Kabu-robo ■ Recent developments of Trade Science ◆ Kabu-robo, automated investment software Trade Science Corporation - Kabu-robo investment decisions are based on ◆ R&D outfit of Monex Group investment strategies programmed in advance using real-time
Slide 33: 4. To our Shareholders
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 5. Appendix 32
Slide 34: ROE and Shareholder's Return
ROE and Shareholder’s Return ■Pursuing investment returns for our shareholders ◆ROE ◆Shareholder’s return 40% - The Company’s policy for shareholder’s return is to pay the dividends based on the business performance. The payout ratio is generally targeted at 50% of consolidated net income 30% of cur
Slide 35: Investors' Guide
Investors’ Guide ■Stock information of Monex Group, Inc. ◆Share price and volume Major shareholders and share distribution Volume (shares) Price（yen） (Recorded as of the end of September 2009) 2,000,000 200,000 Major shareholders Top 3 shareholders Financial Institutions 9.43% Nikko Citi Holdings I
Slide 36: 5. Appendix
1. Financial Results 2. Strategies 3. Businesses 4. To our Shareholders 5. Appendix 35
Slide 37: Additional Data (Monex, Inc.)
20 0 10 20 30 40 50 60 70 80 90 100 20 0 5 10 15 20 25 08 08 /1 /1 0 0 20 20 08 08 (billion yen) /1 /1 (billion yen) 1 1 20 20 08 08 /1 /1 2 2 20 20 09 09 /1 /1 ◆Cash Inflow/Outflow ◆Stock Inflow/Outflow 20 20 09 09 /2 /2 20 20 09 09 /3 /3 20 20 09 09 /4 /4 20 20 09 09 /5 /5 20 20 09 09 /6 /6 Additi
Slide 38: Customer Portfolio of Monex, Inc.
Customer Portfolio of Monex, Inc. (as of the end of Sep, 2009) ■ Sex ■ District Others Female 23.2% 25.3% Tokyo Metropolitan District Nagoya District 50.5% Male 8.5% 74.7% Osaka District 17.8% ■ Age ■ Occupation Company Employee 46.8% Unemployed 17.5% Over 70 3.6% 60s 12.1% Self-employed 10.2% 50s 1
Slide 39: Additional Material
Monex Group, Inc. ADDITIONAL MATERIAL 38
Slide 40: Monex Group and Orix Corporation to Merge Respective Securities Subsidiaries
Monex Group and Orix Corporation to Merge Respective Securities Subsidiaries and Enter into Capital Alliance ■Outlook after share exchange and capital ■Structure and purpose of merger alliance (planned) ◆ Orix Securities will become a wholly owned subsidiary ◆ Become a top-sized internet financial c
Monex Group — 1H FYE March 2010 Earnings Presentation on 6ix