Monex Group, Inc. · TSE:8698
Monex — 1H FY2013 Earnings Presentation
45 slides from Monex's earnings presentation, Oct 24, 2012
Slide 1: Financial Results of 1H of Fiscal Year Ending March 31, 2013
October 24, 2012 Financial Results of 1H of Fiscal Year Ending March 31, 2013 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 stat
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 4. Roadmap (1) ･･･ p.22 Our Business Principles ･･･ p.2 5. Roadmap (2) ･･･ p.23 6. Roadmap (3) ･･･ p.24 I. Key Strategy Overview 7. Roadmap (4) ･･･ p.25 About Monex Group ･･･ p.5 8. Global FX: Accelerating Global Expansion
Slide 5: Key Strategy Overview
1. Key Strategy Overview 2. Financial Results 3. Global Vision and Strategies 4. Data 4
Slide 6: About Monex Group
About Monex Group ■ The Monex Group aims to be a global retail online financial service provider, offering the global standard investment products and services to retail investors online ■ We ensure our competitiveness and realize company growth by promoting Global Vision which is to globalize the c
Slide 7: Strategies for Future Growth
Strategies for Future Growth ◆ Developing a global platform in-house in order to establish a competitive business base and control cost ◆ Focus on promoting 4 strategies; Japan, U.S., China and Global Explore BtoB Business FX, and controlling fixed costs. Further explore BtoB business tors Becoming
Slide 8: Financial Results
1. Key Strategy Overview 2. Financial Results 3. Global Vision and Strategies 4. Data 7
Slide 9: Major Business Activities this Quarter
Major Business Activities this Quarter ◆Progress of internalization and development of system Promoted system development for introducing the technology to Japan in order to realize Global Vision (Detailed after page 22) ◆Japan segment secured ordinary profit even under severe environment without sp
Slide 10: Financial Summary: 1Q vs 2Q of FYE Mar. 31, 2013
Financial Summary : 1Q of FYE Mar. 31, 2013 vs. 2Q of FYE Mar. 31, 2013 (in 3 months) （in million yen, %） 1Q of FYE Mar. 31, 2013 2Q of FYE Mar. 31, 2013 Change (Apr. 2012– Jun. 2012） (Jul. 2012– Sep. 2012） Operating Revenues 8,829 7,026 -20.4% Net Operating Revenues 7,740 6,413 -17.1% SG&A 7,630 7,
Slide 11: 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 1Q of FYE Mar. 31, 2013 ■SG&A：Comparison with 1Q of FYE Mar. 31, 2013 ◆Commission decreased due to the sluggish market ◆Variable cost such as Transaction-related expenses condition in both Japan and U.S. de
Slide 12: Financial Summary: 1H of FYE Mar. 2012 vs 1H of FYE Mar. 2013
Financial Summary : 1H of FYE Mar. 31, 2012 vs. 1H of FYE Mar. 31, 2013 (in 6 months) （in million yen, %） 1H of FYE Mar. 31, 2012 1H of FYE Mar. 31, 2013 Change (Apr. 2011– Sep. 2011） (Apr. 2012– Sep. 2012） Operating Revenues 14,697 15,856 7.9% Net Operating Revenues 13,108 14,154 8.0% SG&A 11,386 1
Slide 13: Major Factors of Revenue and SG&A (Comparison with 1H of Last Fiscal Year)
Major Factors of Revenue and SG&A (Comparison with 1H of Last Fiscal Year) ■ Revenue：Comparison with 1H of FYE Mar. 31, 2012 ■ SG&A：Comparison with 1H of FYE Mar. 31, 2012 ◆ Increased due to the consolidation of TradeStation ◆ Increased due to the consolidation of TradeStation Increased by 3,672 mil
Slide 14: Balance Sheet (1)
Balance Sheet (1) ■ Keeping sufficient equity, liquidity and financing capability ◆Balance Sheet as of end of September 2012 (*1) Non-current assets（investment value of risk assets） Property/equipment 1.2 (Facilities, equipment, etc) Current Asset Current Liabilities Software 4.7 (Assets to provide
Slide 15: Balance Sheet (2)
Balance Sheet (2) ■Goodwill/Intangible Asset ■ Investment securities （in billion yen） Identifiable Name of securities Acquisition Book Estimated Appraisal Goodwill Software intangible Remaining (Purpose for acquisition） cost value Value(*4) profit As of asset years (JPY bn) (JPY bn) ◆Market value Se
Slide 16: Distribution of Consolidated Net Operating Revenues by Regions and Businesses
Distribution of Consolidated Net Operating Revenues by Regions and Businesses ■ 1H FYE March 31, 2013 (6 months) Financial Income Others 3% 3% FX Equities 7% Options 2% 21 % China (HK) Futures 1% Futures and Options 11 % US+EU+AU 2% 35 % Japan FX Equities 64 % 13 % 9% Others 5% Mutual Fund 6% Financ
Slide 17: Distribution of Consolidated SG&A by Regions and Contents
Distribution of Consolidated SG&A by Regions and Contents ■1H FYE March 31, 2013 (6 months) Most of the system development is outsourced in Japan and the amount of the systems related costs is large. Others 6% Commissions paid Systems 10 % related costs Advertising expenses 24 % 3% China (inc. HK) C
Slide 18: Distribution of Consolidated Personnel by Regions and Jobs
Distribution of Consolidated Personnel by Regions and Jobs ■As of the end of September 2012 System development is mostly outsourced in Japan and the number of (Total number of employees: 920) technology related employees is small. Technology IBFX 5% Marketing 11 % 11 % 4% Others China Japan 10 % (in
Slide 19: Global Vision and Strategies
1. Key Strategy Overview 2. Financial Results 3. Global Vision and Strategies 4. Data 18
Slide 20: Background for the Global Vision
Background for the Global Vision ■Coping with local market bias issue Japan clients China Japan U.S. clients clients clients Idling Idling Trade Volume Trade Volume Capacity Capacity Idling Idling capacity capacity China Japan U.S. China Japan U.S. products products products products products produc
Slide 21: Concept of Shared Platform under the Global Vision
Concept of Shared Platform under the Global Vision ■Global Platform China clients Japan clients U.S. clients Website Website Website Call center Call center Call center Marketing Marketing Marketing Develop locally Compliance Compliance Compliance Information service Information service Information
Slide 22: Current Condition and Future Plan
Current Condition and Future Plan (Current condition) (Future plan) Revenue side: Revenue side: － Developing internally to construct competitive platform －World wide stagnant market affects Original plans which will promote client’s investment activities, attract commission revenues from each local
Slide 23: Roadmap (1)
Roadmap (1) ■Measures to integrate systems and control cost FYE March 2013 FYE March 2014 FYE March 2015 FYE Mar. 2016 Introduce TradeStation Reduce Global FX Trading (Winter) Introduce MT4 to platform to Monex FX and system platform Monex FX and Monex, Inc. Monex, Inc. related cost Liquidity/risk I
Slide 24: Roadmap (2)
Roadmap (2) ■ Measures to increase revenue Expand customer asset Win competitors’ clients - Establish brand image as a “Global & leading online financial company” General - Provide innovative financial services using in-house developed technology Construct competitive business platform / Create dema
Slide 25: Roadmap (3)
Roadmap (3) ■New Service of U.S. Equity ◆Technology of TradeStation can make the best U.S. Equity trading system in Japan Largest numbers of More than 2,800 brands of stocks will be available from the service start stocks Longest trading time Pre session (8:00～9:30 EST） and post session（16:00～20:00
Slide 26: Roadmap (4)
Roadmap (4) ■Products and services being developed for Japanese clients ◆ MT4, de facto standard FX platform, to be introduced into Japan Monex, Inc. plans to introduce MT4, de facto standard FX platform, which Is equipped with original function developed by IBFX, for Japanese clients in this winter
Slide 27: Global FX: Accelerating Global Expansion by IBFX
Global FX：Accelerating Global Expansion by IBFX ■Leverage group synergy to expand globally Monex, Inc. Monex FX IBFX, Inc. - Initiating current FX business since April 2011, - Started as one of the first TradeStation Forex merged IBFX in Dec. 2011 and FX providers in Japan in - Targets FX traders as
Slide 28: Global FX: Local Activities
Global FX: Local Activities ■Japan (Monex, Inc. and Monex FX) ■U.S. and Australia (IBFX, Inc.) ◆ Because of lower volatility, trading volume is stagnated ◆ Global FX business to be expanded under IBFX brand Revenue (million yen) Trading volume (billion yen) Revenue (thousand dollar) Trading volume (
Slide 29: Japan: Equity Business
Japan: Equity Business ■ Breakdown of DARTs and correlation with market ■Equity Business (Monex, Inc.) trading value (Japan) ◆ Market share and value of equity trading Total trading value of individual investors in 3 major stock exchanges （Average per business day）（right） Others DARTs(left) (thousan
Slide 30: Japan: Mutual Fund Business / Fixed Income Business
Japan: Mutual Fund Business / Fixed Income Business ■Mutual Fund Business (Monex, Inc.) ■Fixed Income Business (Monex, Inc.) ◆ Trends in mutual fund sales and balance ◆ Enriched foreign bond lineup and strengthened sales (billion yen) ・Stock price linked euro-yen notes FYE March 2013 FYE March 2011
Slide 31: Japan: Business Alliance with Sony Bank
Japan: Business Alliance with Sony Bank ■Strengthen business alliances to enhance brokerage business ◆Acquisition of Sony Bank Securities and merger into ◆Strengthen business alliance between Monex, Inc. Monex, Inc. and Sony Bank ・For increasing number of new accounts and revenues of ・Sony Bank Secu
Slide 32: U.S.: About TradeStation
U.S.: About TradeStation ■Overview ■Management Benchmark ◆ Comparison of DARTs(*1) among US listed brokerages 400 350 -TD Ameritrade based on their disclosure Apr.-Aug. 2012 -Others Based on their disclosure Apr.-Sep. 2012 ◆ Company Overview 300 • Formed in 1982 as a trading platform provider. Initi
Slide 33: U.S.: About TradeStation and US Business Progress
U.S.: About TradeStation and US Business Progress ■Characteristics of TradeStation ■U.S. business progress ◆ TradeStation® (trading platform) ◆ Accounts continue to grow TradeStation® is an award winning direct-access trading TradeStation (including IBFX) had 6,204 new accounts during platform which
Slide 34: China
China ■ Business in HK, Asia’s global financial center ■Business development in Mainland China ◆Targeting ultimately to initiate online brokerage business in Mainland China for retail investors, several ◆ Monex Boom Group Overview business possibilities are being discussed and Monex Boom Group offer
Slide 35: Data
1. Key Strategy Overview 2. Financial Results 3. Global Vision and Strategies 4. Data 34
Slide 36: Breakdown of Global DARTs and Global FX Volume by Region
Breakdown of Global DARTs and Global FX Volume by Region ■Global. DARTs: 2Q of FYE March 2013 (DARTs of Jul. – Sep. 2012) DARTs=Daily Average Revenue Trades (Equities, Options and Futures, FX and Mutual Funds) Monex, Inc. TradeStation Monex FX, Inc. (U.S., etc.) Monex BOOM Total: Global DARTs Sony B
Slide 37: Quarterly Breakdown of Consolidated Income Statement
Financial Results：Quarterly Breakdown of Consolidated Income Statement （in million yen） FYE Mar. 31, FYE Mar. 31, 2011 FYE Mar. 31, 2012 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Brokerage commissions( includes OSE-FX) 2,772 1,904 2,089 3,336 2,120 3,941 3,387 3,675 3,128 2,809 Stocks and ETFs 2,582 1,631
Slide 38: Quarterly Breakdown of Consolidated SG&A
Financial Results：Quarterly Breakdown of Consolidated SG&A （in million yen） FYE Mar. 31, FYE Mar. 31, 2011 FYE Mar. 31, 2012 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Transaction-related expenses 1,267 1,118 1,260 1,360 1,224 2,439 2,521 2,679 2,625 2,379 Commissions paid 246 217 220 237 238 1,038 1,034 93
Slide 39: Quarterly Breakdown by Local Segments (Income Statement)
Financial Results： Quarterly Breakdown by Local Segments (Income Statement) （in million yen） FYE Mar. 2012 FYE Mar. 2013 2Q 3Q 4Q 1Q 2Q Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Brokerage commissions 2,150 1,710 80 1,865 1,464 57 2,317 1,292 64 1,746 1,339 48 1,
Slide 40: Quarterly Breakdown by Local Segments (SG&A)
Financial Results： Quarterly Breakdown by Local Segments (SG&A) （in million yen） FYE Mar. 2012 FYE Mar. 2013 2Q 3Q 4Q 1Q 2Q Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Japan U.S. H.K. Transaction-related expenses 1,187 1,222 30 1,140 1,357 23 1,302 1,350 28 1,213 1,396 26 1,120 1
Slide 41: Corporate Governance
Corporate Governance ■Board of Directors and Management Team to Enforce Mid-Long Term Strategy ◆ Board of Directors from June 2012: 5 external (4 independent) directors out of 9 ◆Board of Auditors: 2 external and independent out of 4 Takeshi Tamaki Full time, external & independent member Oki Matsum
Slide 42: 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 the end of Company aims to provide return to its shareho
Slide 43: The Monex Group
The Monex Group Holding Company （As of October 24, 2012） [ China ] [ Japan ] [ US/EU ] Online Securities Companies Monex International Limited Asia business base in Hong Kong TradeStation Group, Inc. Holding company in U.S. Sony Bank Securities Inc. (Acquired from Sony Bank as of Aug. 1, 2012 and wi
Slide 44: Efforts on Vitalization of Capital Markets
(Ref.) Efforts on Vitalization of Capital Markets ◆Gathered Consents of 700,000 People On Internet for Extension of 10% Reduction in Securities Tax System Joint action by 4 online securities companies (Monex, Inc., SBI Securities, Kabu.com and Rakuten Securities) gathered over 700,000 signatures, wh
Slide 45: Accounting Standard Change from J-GAAP to IFRS
(Ref.) Accounting Standard Change from J-GAAP to IFRS Anticipated to Occur at March 31, 2013 ◆Adoption of IFRS J-GAAP to apply for disclosures of financial results on 1Q to 3Q of FYE March 2013 IFRS is expected to apply starting from the disclosure of financial results on full-year of FYE March 2013