Nomura Holdings, Inc. · TSE:8604
Nomura — FY2018/19 Earnings Presentation
35 slides from Nomura's earnings presentation, May 10, 2019
Slide 1: Consolidated Results of Operations Fourth quarter, year ended March 2019
Connecting Markets East & West Consolidated Results of Operations Fourth quarter, year ended March 2019 (US GAAP) Nomura Holdings, Inc. April 2019 © Nomura
Slide 2: Outline
Outline Presentation Executive summary (p. 2-4) Overview of results (p. 5) Business segment results (p. 6) Retail (p. 7-8) Asset Management (p. 9-10) Wholesale (p. 11-13) Non-interest expenses (p. 14) Robust financial position (p. 15) Funding and liquidity (p. 16) Financial Supplement Consolidated b
Slide 3: Executive summary (1/2)
Executive summary (1/2) FY2018/19 full year highlights Loss before income taxes: Y37.7bn; Net loss1: Y100.4bn; EPS2: -Y29.92 Three segment performance declined significantly YoY due to lower client activity and challenges in emerging markets and the credit market Business momentum slowed in both Who
Slide 4: FY2018/19 Factors behind loss before income taxes
FY2018/19 Factors behind loss before income taxes Changes from same period last year (billions of yen) 328.2 Gain/loss related to ACI1 approx. -27 NFR&T2 which is not included in Asset Retail Management from FY2018/19: -2.2 Retail 103.1 Asset -53.6 Management -32.0 Asset Management Booked in FY2
Slide 5: Executive summary (2/2)
Executive summary (2/2) FY2018/19 4Q highlights Income before income taxes: Y24.4bn; Net Income1: Y0.8bn; EPS2: Y0.23 Firmwide performance improved QoQ but remained muted Three segment performance turned positive due to the non-recurrence of goodwill impairment charge (Y81bn) attributable to Wholesa
Slide 6: Overview of results
Overview of results Highlights (billions of yen, except EPS and ROE) FY2018/19 FY2018/19 QoQ YoY YoY 4Q Full year Net revenue 301.3 +16% -20% 1,116.8 -25% Non-interest expenses 276.9 -18% -16% 1,154.5 -1% Income (loss) before income 24.4 —48% -37.7—taxes Net income (loss)1 0.8 —96% -100.4—EPS2 Y0.23
Slide 7: Business segment results
Business segment results Net revenue and income (loss) before income taxes FY2018/19 FY2018/19 QoQ YoY YoY 4Q Full year Net revenue Retail 74.2 -15% -24% 339.5 -18% Asset Management 30.9 91% 13% 97.8 -23% Wholesale 142.2 11% -33% 555.4 -22% Subtotal 247.3 7% -27% 992.7 -21% Other* 52.1 32% 13% 131.3
Slide 8: Retail
Retail Net revenue and income before income taxes (billions of yen) Full year Quarter FY17/ FY17/ FY18/ FY2018/19 18 QoQ YoY 18 19 4Q 1Q 2Q 3Q 4Q Net revenue 412.9 339.5 98.2 92.8 85.7 86.8 74.2 -15% -24% Non-interest expenses 309.8 290.0 76.7 72.9 73.5 72.7 70.9 -3% -8% Income before income 103.1 4
Slide 9: Retail: Growth in consulting-related revenue amid slower recurring revenue
Retail: Growth in consulting-related revenue amid slower recurring revenue Recurring revenue (billions of yen) Recurring revenue (annualized, adjusted basis) Recurring revenue cost coverage ratio (rhs) 100.0 31% 31% 31% 31% 29% 30% 80.0 20% 60.0 90.0 90.4 90.9 89.9 88.0 40.0 10% 20.0 0% FY2017/18 FY
Slide 10: Asset Management
Asset Management Net revenue and income before income taxes1 Key points (billions of yen) Full year Quarter Full year Net revenue: Y97.8bn (-23% YoY) FY17/ Income before income taxes: Y34.2bn (-48% YoY) FY17/ FY18/ FY2018/19 18 QoQ YoY 18 19 4Q 1Q 2Q 3Q 4Q ? Robust business performance; Gain/loss re
Slide 11: Asset Management: Collaboration with American Century Investments yields results
Asset Management Collaboration with American Century Investments (ACI) yields results Nomura Asset Management public investment trust market Flow of funds1 share2 (billions of yen) 28.0% Investment trust business Investment advisory business 27.7% 27.6% 1,404 27.4% 1,500 27.3% 787 27.3% 248 1,000 61
Slide 12: Wholesale
Wholesale Net revenue1 and income (loss) before income taxes2, 3 Key points (billions of yen) Full year Quarter Full year FY17/ Net revenue: Y555.4bn (-22% YoY) FY17/ FY18/ FY2018/19 18 QoQ YoY Loss before income taxes: Y111.4bn 18 19 4Q 1Q 2Q 3Q 4Q—Market uncertainty led to lower client activity an
Slide 13: Wholesale: Global Markets
Wholesale: Global Markets Net revenue1 FY2018/19 full year and 4Q net revenue by region (billions of yen) Full year Fourth quarter Equities Change of accounting policy2 Fixed Income 180.0 YoY QoQ QoQ +10% -25% FI EQ 84.4 123.8 112.2 113.6 YoY 103.5 Americas 54.2 -37% 54.5 45.6 65.9 EMEA 95.7 57.7 69
Slide 14: Wholesale: Investment Banking
Wholesale: Investment Banking 1-3Q announced deals 4Q announced deals Deals completed in 4Q Net revenue1 Won multiple high-profile cross-border transactions (billions of yen) Asia (Incl. Japan) 31.4 28.6 Takeda QoQ Ocean Holdings? 25.1 Pharmaceutical?s Nintendo 23.9 24.7 +16% acquisition of Orion ac
Slide 15: Non-interest expenses
Non-interest expenses Full year Quarter Key points Full year (billions of yen) (billions of yen) Non-interest expenses: Y1,154.5bn Other 400 (-1% YoY) 1,500 ? Compensation and benefits (-6% YoY) 331.1 336.8 Lower bonus provisions due to pay for Business development performance expenses 1,168.8 1,154
Slide 16: Robust financial position
Robust financial position Balance sheet related indicators1 and capital ratios RWA and CET 1 capital ratio4 (trillions of yen) Mar 2018 Dec 2018 Mar 2019 RWA (Basel 3) (lhs) CET1 capital ratio (Basel 3) (rhs) 20.0 17.9% 20.0% Total assets Y40.3trn Y45.1trn Y41.0trn 16.5% 17.0% 17.1% 16.1% Shareholde
Slide 17: Funding and liquidity
Funding and liquidity Balance sheet Balance sheet structure (As of March 2019) Highly liquid, healthy balance sheet Assets Liabilities and equity Unsecured funding2 structure ? 77% of assets are highly liquid Approx. 80% of unsecured funding is trading and related assets that are long-term debt mark
Slide 18: Financial Supplement
Financial Supplement
Slide 19: Consolidated balance sheet
Consolidated balance sheet Consolidated balance sheet1 (billions of yen) Mar 31, Mar 31, Increase Mar 31, Mar 31, Increase 2018 2019 (Decrease) 2018 2019 (Decrease) Assets Liabilities Total cash and cash deposits 2,959 3,262 303 Short-term borrowings 743 842 98 Total payables and deposits 3,568 3,76
Slide 20: Value at risk
Value at risk Definition From April 1, 2018, to March 31, 2019 (billions of yen)—99% confidence level—Maximum: 10.6—1-day time horizon for outstanding portfolio—Minimum: 3.1—Inter-product price fluctuations considered—Average: 4.6 (billions of yen) FY2017/18 FY2018/19 FY2017/18 FY2018/19 Mar Mar Mar
Slide 21: Consolidated financial highlights
Consolidated financial highlights Full year Quarter (billions of yen) (billions of yen) 300 7.9% 10% 100 7.9% 10% 8% 8% Net income (loss) 200 attributable to Nomura 6% 50 6% Holdings, Inc. (“NHI”) 4% 4% shareholders 100 22.7 219.3 0.8% 2% 2% 0.8 5.2 0 0% 0 0% -11.2 ROE(%) -100 -100.4 -50 -200 -300 -
Slide 22: Consolidated income
Consolidated income Full year Quarter (billions of yen) FY2017/18 FY2018/19 FY2017/18 FY2018/19 4Q 1Q 2Q 3Q 4Q Revenue Commissions1 373.3 293.1 95.4 79.5 74.8 72.7 66.1 Fees from investment banking 101.7 101.5 22.6 24.0 19.1 33.1 25.3 Asset management and portfolio service fees 245.6 245.5 62.3 63.0
Slide 23: Main revenue items
Main revenue items Full year Quarter (billions of yen) FY2017/18 FY2018/19 FY2017/18 FY2018/19 4Q 1Q 2Q 3Q 4Q Stock brokerage commissions1 243.8 192.0 63.8 50.2 47.4 50.5 43.9 Other brokerage commissions 17.0 14.4 6.0 4.1 3.4 4.3 2.5 Commissions Commissions for distribution of investment trusts 85.7
Slide 24: Income (loss) before income taxes by segment and region
Consolidated results: Income (loss) before income taxes by segment and region Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter (billions of yen) FY2017/18 FY2018/19 FY2017/18 FY2018/19 4Q 1Q 2Q 3Q 4Q Retail 103.1 49.5 21.4 19.9 12.2 14.0 3.3
Slide 25: Segment "Other"
Segment “Other” Income (loss) before income taxes Full year Quarter (billions of yen) 80.0 60.0 56.4 40.0 17.8 20.0 15.1 0.0 -2.8 -20.0 -11.2 -25.0 -24.5 -40.0 1 2 1 2 3 4 5 FY2017/18 FY2018/19 FY2017/18 FY2018/19 4Q 1Q 2Q 3Q 4Q Net gain (loss) related to economic -6.5 1.8 1.7 -13.8 -16.0 25.1 6.6 h
Slide 26: Retail related data (1)
Retail related data (1) Full year Quarter (billions of yen) FY2017/18 FY2018/19 FY2017/18 FY2018/19 4Q 1Q 2Q 3Q 4Q QoQ YoY Commissions 192.7 142.8 47.5 40.8 36.8 34.1 31.0 -9.1% -34.7% Of which, stock brokerage commission 82.2 60.2 21.7 16.8 15.3 15.8 12.2 -22.7% -43.6% Of which, commissions for dis
Slide 27: Retail related data (2)
Retail related data (2) Retail client assets (trillions of yen) 140 Other 122.8 118.6 117.7 114.7 117.7 114.7 Foreign investment 120 110.0 trusts 100 Bond investment trusts 80 Stock investment trusts 60 Domestic bonds 40 Foreign currency 20 bonds Equities 0 FY2017/18 FY2018/19 FY2017/18 FY2018/19 Ma
Slide 28: Retail related data (3)
Retail related data (3) Net inflows of cash and securities1 Full year Quarter (billions of yen) (billions of yen) 2,500 2,500 2,015 2,000 2,000 1,762 1,500 1,500 1,000 1,000 682 500 500 0 0 -196 -37 -500 -500 -403 -393 FY2017/18 FY2018/19 FY2017/18 FY2018/19 4Q 1Q 2Q 3Q 4Q 1. Cash and securities inf
Slide 29: Retail related data (4)
Retail related data (4) Number of accounts (thousands) FY2017/18 FY2018/19 FY2017/18 FY2018/19 Mar Mar Mar Jun Sep Dec Mar Accounts with balance 5,318 5,338 5,318 5,318 5,318 5,354 5,338 Equity holding accounts 2,822 2,908 2,822 2,823 2,829 2,905 2,908 Online service accounts1, 2 4,387 4,569 4,387 4
Slide 30: Asset Management related data (1)
Asset Management related data (1) Full year1 Quarter1 (billions of yen) FY2017/18 FY2018/19 FY2017/18 FY2018/19 QoQ YoY 4Q 1Q 2Q 3Q 4Q Revenue (excl. ACI-related) 105.3 102.9 26.5 26.3 26.1 24.5 26.0 6.3% -1.7% ACI-related revenue 22.1 -5.0 0.9 -0.2 -1.5 -8.3 4.9—5.7x Net revenue 127.3 97.8 27.3 26.
Slide 31: Asset Management related data (2)
Asset Management related data (2) Asset inflows/outflows by business1 Full year Quarter FY2017/18 FY2018/19 (billions of yen) FY2017/18 FY2018/19 4Q 1Q 2Q 3Q 4Q Investment trusts business 3,131 2,187 1,156 263 280 1,141 503 of which ETFs 3,022 2,531 1,740 147 510 1,391 483 Investment advisory busine
Slide 32: Wholesale related data
Wholesale related data Full year Quarter (billions of yen) FY2017/18 FY2018/19 FY2017/18 FY2018/19 QoQ YoY 4Q 1Q 2Q 3Q 4Q Net revenue 715.3 555.4 211.4 137.3 147.7 128.2 142.2 11.0% -32.7% Non-interest expenses 614.7 666.8 167.2 144.7 142.7 224.1 155.3 -30.7% -7.1% Income (loss) before income taxes
Slide 33: Number of employees
Number of employees FY2017/18 FY2018/19 FY2017/18 FY2018/19 Mar Mar Mar Jun Sep Dec Mar Japan 15,819 15,852 15,819 16,474 16,296 16,138 15,852 Europe 3,057 2,909 3,057 3,030 3,020 2,963 2,909 Americas 2,362 2,357 2,362 2,364 2,390 2,384 2,357 Asia and Oceania1 6,810 6,746 6,810 6,873 6,843 6,796 6,7
Slide 34: Disclaimer
Disclaimer This document is produced by Nomura Holdings, Inc. (?Nomura?). Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by Nomura or any affiliate thereof. Offers to sell, s
Slide 35: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com