Nomura Holdings, Inc. · TSE:8604
Nomura — Q3 FY2015 Earnings Presentation
35 slides from Nomura's earnings presentation, January 2015
Slide 1: Consolidated Results of Operations, Third quarter, year ending March 2015
NOMURA Connecting Markets East & West Consolidated Results of Operations Third quarter, year ending March 2015 (US GAAP) Nomura Holdings, Inc. January 2015 © Nomura
Slide 2: Overview of financial results
I will now give you an overview of our financial results for the third quarter of the year ending March 2015 using the document titled “Consolidated Results of Operations”. Please turn to page two. 1
Slide 3: Consolidated results summary
For the nine months to December, we booked net revenue of 1,169.7 billion yen, income before income taxes of 241.8 billion yen, and net income of 142.8 billion yen, close to the strong results in the same period last year. Fund inflows and market factors combined to drive up Retail client assets to
Slide 4: Share buyback program
Today we also resolved to conduct a share buyback program with an upper limit of 40 million shares and maximum total value of 30 billion yen. The share buyback we announced last October with an upper limit of 40 million shares and 28 billion yen was completed between November 13 and January 16. We a
Slide 5: Segment Other income before income taxes
In the box at the bottom of the page, you will find additional information regarding the 44.8 billion yen income before income taxes from segment “Other”. First, equity in earnings of affiliates of 18.2 billion yen was higher than normal. This is due to a large unrealized gain on securities held by
Slide 6: Retail results
Please turn to page five for an overview of results by business. First, in Retail, sales of stocks were robust on the back of the market rally stemming from monetary easing by the Bank of Japan and an increase in primary deals. Discretionary investment inflows and sales of insurance products also pe
Slide 7: Retail recurring revenue and discretionary investment
As shown on page six, discretionary investment net inflows and sales of insurance products were at the highest level since the start of our business model transformation. Third quarter recurring revenue was 16.6 billion yen, which is 65.7 billion yen annualized, putting us within reach of our March
Slide 8: Asset Management results
Net revenue increased 8 percent to 23.4 billion yen. Income before income taxes grew to 9.3 billion yen, representing the best quarter since the three months ended September 2007. Assets under management reached a record high of 37.7 trillion yen as of the end of December driven up by inflows into p
Slide 9: Nomura Asset Management public investment trust market
Nomura Asset Management public investment trust market Assets under management (gross)! by business share? (trillions of yen) 1m Investment trust business ‘= Investment advisory business 24.0% , 23.6% 2.1% 23.7% 50.0 427 46.0 22.8% 40.3 382 40.6 2 40.0 : 30.0 20.0 10.0 0.0 22.9% 22.0% 20.0% 18.0% 16
Slide 10: Wholesale results
Net revenue declined 6 percent quarter on quarter to 178.9 billion yen. The main reason for the decline was a significant drop in Fixed Income revenues in EMEA and the Americas as a result of the challenging trading environment on the back of a decline in yields and a spike in volatility in October.
Slide 11: Global Markets results
Global Markets booked net revenue of 149.7 billion yen, down 11 percent quarter on quarter. Fixed Income net revenue declined 27 percent to 76.3 billion yen. Japan Rates and AEJ FX performed well, while Rates and Credit in EMEA and the Americas had a challenging quarter. Equities net revenue grew 15
Slide 12: Investment Banking results
Net revenue increased 30 percent to 29.2 billion yen. Investment Banking gross revenue was 52.7 billion yen. We booked stronger revenues in both Japan and overseas quarter on quarter and year on year. In Japan, we won high-profile IPO and convertible bond mandates and retained a high market share in
Slide 13: Firm-wide expenses
Third quarter firm-wide expenses were 308.9 billion yen, up 3 percent quarter on quarter. This is due to yen depreciation. Excluding the FX impact, firm-wide costs actually declined slightly. In particular, compensation and benefits declined as bonus provisions were reduced in line with performance
Slide 14: Balance sheet and capital ratios
Total assets were 44.1 trillion yen and shareholders’ equity was 2.7 trillion yen. Our Basel III Tier 1 and Tier 1 common ratios were 12.5 percent, down slightly from 12.7 percent at the end of September due to an increase in risk- weighted assets as a result of yen depreciation. Applying the fully
Slide 15: Summary and outlook
To sum up, we continue to gain traction with our Retail business model transformation and this is spreading to Asset Management, so we are pleased with the performance of these businesses during the quarter. However, Wholesale was affected by the challenging trading environment in October, leading t
Slide 16: Financial Supplement
Financial Supplement
Slide 17: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits 2,189 Total loans and receivables 2,571 Total collateralized agreements Total trading assets’ and private ecuity ines 18,714 Total other assets 2,699, Total assets 43,520) 241 210 71,784 Liabilities ‘Short-term borrowings Total payables and depos
Slide 18: Value at Risk
= Definition = From April 1, 2014 to December 31, 2014 (billions of yen) — 99% confidence level — Maximum: 9.8 — 1-day time horizon for outstanding portfolio — Minimum: 3.1 — Inter-product price fluctuations considered — Average: 65 (billions of yen) Equity Interest rate 5.0 3.9 6.6 3.9 5.2 4.2 45 F
Slide 19: Consolidated financial highlights
Full year Quarter (billions of yen) 250 8.9% (billions of yen) 85% 8.9% 90 =m Net income attributable to NHI 60 shareholders ROE (%) 30 oO Net revenue 1,813.6 1,587.1 3794 3899S 3708 = 373.8 = 428.0 Income before income taxes 237.7 361.6 86.9 88.6 51.7 74.0 116.4 Net income attributable to Nomura Ho
Slide 20: Consolidated income statements
Full year Quarter (billions of yen) “Pramas Fvzore —Fy201g14 F204 Revenue Commissions 350.1 4746 i499 SCHSSSCASC*C*«iSC Fees from investment banking a4. 913 168 +42 198 206 288 Asset management and portfolio service fees 141.0 167.2 42.1 42.1 45.4 48.4 50.6 Net gain on trading 3680 476.4 7085 1292 «
Slide 21: Breakdown of revenue
Full year Quarter —Fy2otgi4 —FY201IS (eaionast y=) pesecp seni} — 8Q QQ QQ Stock brokerage commissions (retail) 51.8 126.7 36.3 22.6 15.8 21.9 27.0 Stock brokerage commissions (other) 112.9 139.8 34.9 35.6 34.3 36.9 46.0 Other brokerage commissions 11,7 18.14 44 43 3.8 4.0 61 Commissions for distrib
Slide 22: Segment and geographic income before income taxes
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter (olfions of yen) ‘Praane Frzoa - J 7 J Retail 100. 192.0 47.7 23.3 31.6 38.9 50.5 Asset Management 21.2 27.1 8.9 5.3 8.3 78 9.3 Wholesale 71.7 111.8 27.8 33.5 5.7 22.2 0.5 Three Business segme
Slide 23: Segment Other income before income taxes
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 40.0 30.0 20.0 0.0 -10.0 10.0 6.6 20.0 3.7 34.2 Income (loss) before income taxes Net gain related to economic. fear Tanewtlone 5.2 65 69 22 64 bean (ia 1.0 44 13 24 29 0.3 08 Equity in eamings of affiliates 14.4 286 82 62 35
Slide 24: Retail results
Full year Quarter (billions of yen) ‘Frzorans Fvzo1a6 Rese ws es) 30 QQ 2 8 ‘Commissions 2259 301.7 733 (465 56.1 68.8 722 49% 7.9% Sales credit 809 © 1061 257 26.4 25.0 25.9 300 15.6% 16.6% Fees from investment banking and other 368 403 80 a4 ot 67 878.1% = 7.8% Investment trust administration fees
Slide 25: Stock brokerage and investment trust commissions
Stock brokerage commissions and commissions for distribution of investment trusts Full year Quarter (billions of yen) 180 150 ® Stock brokerage commissions 120 = Commissions for distribution of investment 90 trusts 30 51.8 (billions of yen) 40 ° 26 158 921 Stock brokerage commissions 126.7 36.3 9 27
Slide 26: Retail client assets
Retail client assets (trillions of yen) 120 = Other 100 317 96.0 917 95.3 ™ Overseas mutual funds 83.8 ™ Bond investment trusts = Stock investment trusts 60 = Domestic bonds 40 = Foreign currency bonds 44 80 ms Equities ° a Fvaoi2ia Fyzoiart4 EEE Be EE ce oe Equities 46.7 53.2 56.5 53.2 55.6 58.1 62
Slide 27: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter (billions of yen) (billions of yen) 1,500 1,000 1,000 145 473 a | 500 O -500 (1) Cash and securities inflows minus outflows, excluding regional financial institutions, 366 26 26
Slide 28: Number of accounts
Number of accounts Frog Fyzoraia | FYROM (mousands) a ee ee Accounts with balance 5,025 5,144 5,104 5,144 5,186 5,211 5,238 Equity holding accounts 2717 2.718 2,674 2.718 2,721 2,720 2,723 Nomura Home Trade / Net & Call accounts 3,747 4,012 3,939 4,012 4,053 4,103 4,154 New Individual accounts / IT
Slide 29: Asset Management results
Full year Quarter ee a Net revenue 68.9 80.5 21.2 20.5 23.3 21.7 23.4 8.1% 10.5% Non-interest expenses 478 53.4 12.3 15.1 15.1 13.9 14.1 1.5% 14.7% Income before income taxes 21.2 27.1 8.9 5.3 83 7.8 9.3 19.7% 4.7% Total assets under management (trillions of yen) 50.0 400} 36.4 38.2 =AuM ' 279 (gros
Slide 30: Assets under management by business
Assets under management (gross) by business* Asset inflows/outflows by business? (trilions of yen) Full year Quarter | rotate raat (omens ofyen) oie he (39040 19 2a 30 Investment trust Investment trusts . business 265 284 294 24 26 313 339 business 1,099 1,598 962 319 473 879 1,124 re Nester it advi
Slide 31: Wholesale
Wholesale Full year Quarter (billions of yen) “Frzorats F204, a tg ag — 8Q 0 QQ 2 Net revenue 644.9 765.1 188.7 6.1% 5.2% Non-interest expenses 873.2 653.3 160.9 6.0% 11.0% Income before income taxes 17 111.8 27.8 98.0% 98.4% Breakdown of Wholesale revenues Full year Quarter F204 FROIN (oilfons of y
Slide 32: Private equity related investments
Private equity related investments (billions of yen) 150 Terra Firma 104.6 BAsia 100: mE cluding T 2 a al 57.2 B12 57.2 58.8 58.6 58.7 ~ o i oO Dee) ee ee ES ee ee Japan 52.7 a1 10.5 8.1 10.8 13.2 10.8 Europe (excluding Terra Firma) 21.8 22.6 23.9 22.6 21.8 19.3 20.7 Asia 2.0 1.9 1.9 1.9 1.8 1.9 24
Slide 33: Headcount by region
Japan (excluding FA) 14,123 14,149 14,308 14,149 14,559 14,391 14,290 Japan (FA) 1,907 1,888 1,918 1,888 1,889 1,853 1,853 Europe 3,618 3,461 3,456 3,461 3,481 3,530 3,539 Americas 2,271 2,281 2,248 2,281 2,335 2,421 2,445 Asia-Pacific’ 6,037 5,891 5,902 5,891 6,656 6,744 6,762 Total 27,956 27,670 2
Slide 34: Disclaimer
yV NOMURA 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
Slide 35: Nomura Holdings, Inc.
NOMURA Nomura Holdings, Inc. www.nomura.com