Monex Group, Inc. · TSE:8698
Monex — Q3 FYE March 2008 Earnings Presentation
46 slides from Monex's earnings presentation, Jan 29, 2008
Slide 1: Financial Results of 3Q of Fiscal Year Ending March 31, 2008
January 29, 2008 Financial Results of 3Q of Fiscal Year Ending March 31, 2008 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 financial results of Monex Beans Holdings, Inc. (“MBH”). The descriptions herein concerning the products, services, etc. which are handled by Monex, Inc. (“Monex”), which is one of the Company’s subsidiaries,
Slide 3: Our Business Principles
Our Business Principles - PURSUING SPIRIT OF INNOVATION We will constantly strive to pioneer new fields in finance and propose new approaches to managing money. - STAYING CUSTOMER FOCUSED We believe that the best guide to our corporate activities is the voice of our customers. With this guide, we wi
Slide 4: Table of Contents
Table of Contents Important Matters Concerning Product-related Risks ･･･ p.1 2. Business Summary Our Business Principles ･･･ p.2 (1) Brokerage Business - Stock Brokerage Business ･･･ p.19 I. Financial Results - Fixed Income Business ･･･ p.20 1. Financial Highlights ･･･ p.5 - FX Business ･･･ p.21 2.
Slide 5: 1. Financial Results
1. Financial Results 2. Business Strategy and Future Development 3. To our Shareholders 4. Appendix 4
Slide 6: Financial Highlights
Financial Highlights ■3Q of FYE Mar. 31, 2008 Financial Highlights Net operating revenues 6,937 million yen -1.7% from 2Q of FYE Mar. 31, 2008 •Brokerage commissions 4,022 million yen -3.3% from 2Q of FYE Mar. 31, 2008 •Mutual fund business revenues(*1) 631 million yen -7.5% from 2Q of FYE Mar. 31
Slide 7: Financial Summary: 2Q vs. 3Q of FYE Mar. 31, 2008
Financial Summary : 2Q of FYE Mar. 31, 2008 vs. 3Q of FYE Mar. 31, 2008 (in million yen, %) 2Q of FYE 3Q of FYE Mar. 31, 2008 Mar. 31, 2008 Change (Jul. 2007-Sep. 2007) (Oct. 2007-Dec. 2007) Operating Revenues 7,716 7,979 3.4 % Net Operating Revenues 7,059 6,937 -1.7 % SG&A 3,558 3,471 -2.4 % Operat
Slide 8: Financial Summary: 3Q FYE 2007 vs. 3Q FYE 2008 (9 months)
Financial Summary : 3Q of FYE Mar. 31, 2007 vs. 3Q of FYE Mar. 31, 2008 (in 9 months) (in million yen, %) 3Q of FYE 3Q of FYE Mar. 31, 2007 Mar. 31, 2008 Change (Apr. 2006-Dec. 2006) (Apr. 2007-Dec. 2007) Operating Revenues 24,587 23,725 -3.5% Net Operating Revenues 23,120 20,869 -9.7% SG&A 10,760 1
Slide 9: Financial Summary: Financial Highlights (Quarterly Trend)
Financial Summary：Financial Highlights (Quarterly Trend) ■Net operating revenues and Operating Income ■ROE (Annualized) million yen Total Trading Value billion yen 60% 20,000 of Individual Investors 1,600 50% in 3 major stock exchanges and JASDAQ 40% 18,000 (Average per business day)(right) 1,400 30
Slide 10: Financial Summary: Profit Margin and Cost Structure
Financial Summary：Profit Margin and Cost Structure ■Profit Margin ■Cost Structure (Oct. 2007 - Dec. 2007) (Operating income/ Net Operating revenues)* 60% 53% Strategically 50% 48% 50% 50% Fixed costs and costs 50% controllable costs correlated to the number of accounts 40% Commission to 982,074,000
Slide 11: Financial Summary: Quarterly Trends in Income Statement
Financial Summary：Quarterly Trends in Income Statement (in million yen) FYE Mar.31, 2007 FYE Mar.31, 2008 1Q 2Q 3Q 4Q 1Q 2Q 3Q Brokerage commissions 6,023 4,687 4,504 5,395 4,228 4,160 4,022 Underwriting and distribution commissions 61 58 286 32 19 77 5 Subscription and distribution commissions 281
Slide 12: Financial Summary: Quarterly Trends in SG&A
Financial Summary：Quarterly Trends in SG&A (in million yen) FYE Mar.31, 2007 FYE Mar.31, 2008 1Q 2Q 3Q 4Q 1Q 2Q 3Q Transaction-related expenses 1,661 1,551 1,482 1,532 1,361 1,310 1,151 Commissions paid 237 219 214 217 231 248 245 Exchange and association dues 236 192 189 215 180 168 178 Communicati
Slide 13: Revenues/SG&A per Customers' Assets in Custody
Comparison Analysis : Revenues/SG&A per Customers’ Assets in Custody (Annualized) Direction : Low cost / portfolio management-oriented business 3.0% 1. Revenues per customers’ assets in custody Continue to grow equity brokerage business, and intensively Matsui Rakuten Securities strengthen managed a
Slide 14: 2. Business Strategy and Future Development
1. Financial Results 2. Business Strategy and Future Development 3. To our Shareholders 4. Appendix 13
Slide 15: Mission Statement
Mission Statement Take position as an integrated financial service provider for individual investors, not just as an online brokerage firm Propose products and services to investors who are not active traders seeking market conditions Offer comprehensive products and services with “World Class
Slide 16: The Monex Group
The Monex Group （As of January 29, 2008） Securities Company Asset Management Investment Education M&A Advisory Overseas subsidiary and office Business Incubation Monex, Inc. Providing the Best Alternative Investment Products to Individual Investors Premium Online Financial Institution Investor Educa
Slide 17: Current Environment Recognition
Current Environment Recognition ■ Increasing Asset Management by Individuals Financial Assets Held by Households (End of Sep.2007) Investment Private ◆ With Japanese population having started to decline Bonds 2.9 Trusts 5.0 Equities 4.8 Others 4.2 and economic growth slowing down, people trust less
Slide 18: Monex's Business Model
Monex’s Business Model Aspect of an Investment Bank Asset management business shall be a major growth field rather than stock brokerage services Originating unique original products by highly-skilled professionals Gain competitive advantages by not only distributing investment products online at l
Slide 19: Current and Future Structure of Revenues and Customers' Assets by Product
Current and Future Structure of Revenues and Customers’ Assets by Product ■Resetting a new mid/long-term business goal. Strengthen mutual fund business and diversify revenue sources 【Current Structure (1Q-3Q of FYE Mar. 2008)】 Direction of Each Business Line 【Future Structure】 Investment Banking Und
Slide 20: Stock Brokerage Business: Keeping market share and expanding services
Stock Brokerage Business： Keeping market share and expanding services ■Keeping Market Share ■Improvement and Enhancement of Services ◆Average market share for 3Q of FYE 2008 : 7% ◆Increase of unique trading tool “Monex Trader” users ・1% increase in market share compared to 1H of FYE 2008 ・Tool users
Slide 21: Fixed Income Business: Providing original and popular products
Fixed Income Business ： Providing original and popular products to expand customer base ■Meeting Market Trends and Customer Needs ■Effects of “Monex Short-term Notes for Individuals” ◆Taking initiative in origination to promote development ◆ New money and cross-sell analysis ・Account activities of “
Slide 22: Fixed Income Business / FX Business
Fixed Income Business FX Business ■For Further Growth ■Stable Growth despite Volatile Market ◆Number of Accounts and Trading Value ◆Expanding customer base by offering “Monex Short- （Accounts） （Billion yen） Number of Accounts (Left) Trading Value (Right) term Notes” continuously 70,000 1,000 900 60,
Slide 23: Mutual Fund Business: No.1 online mutual fund sales
Mutual Fund Business ： No.1 online mutual fund sales ■Strengthen Product lines and Services ■Top-class Online Mutual fund Sales to Expand Mutual Fund Balance ◆Sales volume and balance ◆Hold the top position in online mutual fund sales （billion yen （billion yen Total Sales amount of equity mutual fun
Slide 24: Alternative Investment Business: Providing well performing funds
Alternative Investment Business: Providing well performing funds ■Expansion of Investment Management Business ■Alternative Investment Products ◆Premium Hybrid 2007 ◆Asia Focus (AUM 9.7 billion yen as of Dec.2007) ・Provides absolute return with rigorous risk management ・Investment for Premium Hybrid
Slide 25: Investment Banking Business: M&A advisory services started
Investment Banking Business ： M&A advisory services started and synergy with IPO underwriting business expected ■IPO Underwriting Business ■M&A Advisory Business IPO League Table Value of IPO Deals (3Q of FYE March 2008 ） (hundred million yen) http://www.wrh.co.jp/ Rank Name Deals 120 1 Nomura 44 ◆S
Slide 26: Other Financial Businesses, etc.
Other Financial Businesses, etc. ■Life Insurance Business ■Alliance with eBANK ◆Promoting financial instruments intermediary http://www.netseiho.com/ September 2007 ・Started financial instruments intermediary business ◆In December 2007, Net Life Planning Co., Ltd. issued new Introducing stocks, IPO/
Slide 27: Topics
Topics ■ “Kabu-Robo” Project ■ Contact Center (Monex, Inc.) ◆Monex, Inc. to open a Contact Center in Hachinohe City, http://www.kaburobo.jp/ Aomori Prefecture ・Spring 2008: Initial employment of approx. 20 people ・Autumn 2008: Start transferring the contact center function “Kabu-robo” (Automated sto
Slide 28: Overseas Business: Extending business to other growing markets overseas
Overseas Business: Extending business to other growing markets overseas ■Establishment of Beijing Representative Office ■Businesses of MBH America (our U.S. subsidiary) ◆Objectives ◆Research into the most advanced financial products and the global financial industry ・Research on Chinese financial ma
Slide 29: Investor Education: Providing high quality investment educational opportunities
Investor Education: Providing high quality investment educational opportunities for more people ■2 reasons why we provide investor education ■Activities ◆Continuously holding seminars Enhancing the return of Developing infrastructure our customer of Monex’s growth ・ From April to December 2007 - Off
Slide 30: 3. To our Shareholders
1. Financial Results 2. Business Strategy and Future Development 3. To our Shareholders 4. Appendix 29
Slide 31: ROE and Dividend
ROE and Dividend ■Pursuing Investment Return to Our Shareholders ◆Dividend Payout Policy ◆ROE ROE ・Calculation formula (from FYE March, 2008) 50% Consolidated net income of MBH’s current fiscal year ・Interim dividends to be paid out as of current fiscal term ◆Dividend Payout Ratio 40% ・Aiming for ap
Slide 32: Investors' Guide
Investors’ Guide ■Stock Information ◆Share price and volume Major shareholders and share distribution Volume (shares) Price（yen） (Recorded as of the end of September 2007) 2,500,000 250,000 Major shareholders Top 3 shareholders Financial 7.59% Nikko Cordial Group 26.29% 2,000,000 200,000 Institutio
Slide 33: 4. Appendix
1. Financial Results 2. Business Strategy and Future Development 3. To our Shareholders 4. Appendix 32
Slide 34: Customer Portfolio (as of December 31, 2007)
Customer Portfolio (as of December 31, 2007) ■Sex ■Location Others Female 23.6% 24.7% Tokyo Metropolitan District Nagoya District 52.2% Male 8.7% 75.3% Osaka District 18.5% ■Age ■Occupation 会社員 Company Employee 47.7% 70代以上 Over 70 3.2% 就業なし Unemployed 16.7% 60代 60s 11.1% 自営業 Self-employed 9.6% 50代 5
Slide 35: Competitive Services and Products: For all customers' satisfaction
Competitive Services and Products: For all customers’ satisfaction (As of January 25, 2008) Fixed Equity Mutual Funds Others Income Small Stock Night Alterna- Credit Stop Chinese U.S Time Unit Program Lending JGB/ Monthly Original tive Settle-ment Loss Trading Trading Foreign Auction Purchase Stocks
Slide 36: (Additional Materials)
(Additional Materials) Monex Beans Holdings, Inc. 35
Slide 37: Establishment of "Intelligence Infrastructure" by Research on Investment Theories
Establishment of “Intelligence Infrastructure” by Research on Investment Theories ■Advice Tools that Adjust to Customers’ Investment Objective and Risk Tolerance ◆“Intelligence Infrastructure” ● ● • Create and manage portfolio with appropriate financial products and • The Monex Group has offered enh
Slide 38: Monex Beans Holdings to Change Company Name
Monex Beans Holdings to Change Company Name (Quoted from company press release issued on January 29, 2008) Monex Beans Holdings, Inc. (“MBH”) announces that it has decided to change its company name, subject to shareholder approval at the forthcoming 4th Annual General Meeting to be held in June 200
Slide 39: Risks and Fees Related to Monex's Products Described Herein
Risks and Fees Related to Monex’s Products Described Herein Details of Monex, Inc. (our subsidiary) Company name (trade name): Monex, Inc. Financial instrument firm Registration number: Director of Kanto Local Finance Bureau (Kinsho) No. 165 Industry organization membership: Japan Securities Dealers
Slide 40: Risks and Fees: Stock Lending Services
Risks and Fees Related to Monex’s Products Described Herein Important Matters concerning Stock Lending Services ▪ Risks Credit risk: Since the investors execute unsecured loan agreement for the stock lending services, the investors will be exposed to credit risk of the Company and the Company’s borr
Slide 41: Risks and Fees: Investment Trust
Risks and Fees Related to Monex’s Products Described Herein Important Matters concerning Investment Trust ▪ Risks The base value of the investment trust may rise or fall since the investment trust substantially invests in securities with fluctuating prices. Therefore, the invested principal and inte
Slide 42: Risks and Fees: Asia Focus
Risks and Fees Related to Monex’s Products Described Herein Important Matters Concerning “Asia Focus” ▪ Risks - The base value of the Fund is subject to fluctuation since the Fund will mainly invest in securities exposed to price movement such as corporate and government bonds. Therefore, the invest
Slide 43: Risks and Fees: China Focus
Risks and Fees Related to Monex’s Products Described Herein Important Matters concerning “China Focus” ▪ Risks - The base value of the Fund is subject to fluctuation since the Fund will mainly invest in securities exposed to price movement, such as equities (the Fund will be exposed to foreign excha
Slide 44: Risks and Fees: Bond Trading
Risks and Fees Related to Monex’s Products Described Herein Important Matters concerning Bond Trading ▪ Risks - In a case where bonds are sold before maturity, a loss of original investment (loss of invested principal) may be incurred from a lower sales price compared to purchase price due to changi
Slide 45: Risks and Fees: Monex Bonds for Individual Investors
Risks and Fees Related to Monex’s Products Described Herein Important Matters concerning [Monex Bonds for Individual Investors (Type: Structured Notes)] ▪ Risks Basically, the market price of yen-denominated bonds fluctuates in accordance with the changes in the base interest rate of the market. The
Slide 46: Risks and Fees: FX
Risks and Fees Related to Monex’s Products Described Herein Important Matters concerning “FX” ▪ Risks Price fluctuation risk: If the foreign exchange rate fluctuates in a direction that is reverse to the investor's anticipation due to fluctuation in the price of the traded currency (exchange rate) a
Monex Group — Q3 FYE March 2008 Earnings Presentation on 6ix