Monex Group, Inc. · TSE:8698
Monex — Q3 FYE March 2022 Earnings Presentation
66 slides from Monex's earnings presentation, Jan 31, 2022
Slide 1: Financial Results for the 3Q of the Fiscal Year Ending March 31, 2022
January 31, 2022 TSE 1st Section: 8698 Financial Results for the 3Q of the Fiscal Year Ending March 31, 2022
Slide 2: Our Business Principles
Our Business Principles Always a step ahead of the “Y” in "MONEY," our name MONEX expresses our desire to embrace all people who are engaged at the forefront of our future. With state-of-the-art IT technology, globally universal values and a sense of professionalism, Monex Group designs innovative w
Slide 3: Table of Contents
Table of Contents Our Business Principles p. 1 Table of Contents p. 2 I. Highlights p. 3 - p.13 II. Consolidated Performance p. 14 - p. 35 III. Business Update p. 36 - p. 54 Appendix: Group Overview p. 55 - p. 65 This is an English translation of Japanese presentation materials prepared in connectio
Slide 4: I. Highlights
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 3
Slide 5: Business Principles and New Business Areas
1-1 Business Principles and New Business Areas New business principles Realize individual self-fulfillment and optimize each person’s lifetime balance sheet Our core business has been "asset building," an important element in the self- fulfillment of individuals, now entering into fields beyond fina
Slide 6: Who We Are
1-2 Who We Are Promoting the growth strategy of each subsidiary to pursue scale and realize the Group’s business principle. Monex Group Crypto Asset Exchange US Online Broker Management Japan Online Broker Unifying Force Asia Pacific Segment Investment Segment STEAM Education Business Genome Platfor
Slide 7: Increase Corporate Value of Subsidiaries
2 Increase Corporate Value of Subsidiaries The value of each subsidiary successfully increased under the Group visions, “Global Vision” and “New Beginning (crypto-related business entry).” TradeStation Group (2011-) Coincheck (2018-) • EBITDA*1 Margin : 26% (FYE Mar 2021) • EBITDA Margin : 68% (FYE
Slide 8: TradeStation to go public on the NYSE
3-1 TradeStation to go public on the NYSE TradeStation aims to pursue further scale as a growth company, preparing to go public on the New York Stock Exchange, and has started making upfront investments, including marketing initiatives. Overview • In November 2021, TradeStation and Monex Group annou
Slide 9: TradeStation filed Form S-4 with SEC and plans to list on the NYSE
3-2 TradeStation to go public on the NYSE TradeStation filed a registration statement on Form S-4 with SEC and plans to list on the NYSE; completing a De-SPAC transaction. Highlights • Given the opportunity the expansion of the US retail investor population presents for further growth, TradeStation
Slide 10: Growth Strategy of Monex Securities (Japan Segment)
4-1 Growth Strategy of Monex Securities (Japan Segment) Monex Securities is generating stable cash flow as a Japanese online securities broker. Through collaboration with other companies, customers’ assets in custody reached ¥6 trillion and number of customer accounts grew to 2.15 million. Operation
Slide 11: Growth Strategy of TradeStation (US segment)
4-2 Growth Strategy of TradeStation (US segment) TradeStation continues to focus on marketing and product enhancements to try to achieve growth of accounts and customer assets under custody. FYE2022 Marketing acceleration FYE2021 Crypto IRA (USD billion) Crypto API (Accounts: K) FYE2020 Cryp
Slide 12: Growth Strategy of Coincheck (Crypto Asset segment)
4-3 Growth Strategy of Coincheck (Crypto Asset segment) Coincheck has been No.1*1 in Japan for three consecutive years in terms of app downloads and has an approx. 30%*2 share of the domestic market in terms of the # of verified accounts, buoyed by TV commercials and in-house digital marketing. Sep.
Slide 13: Fair Value of Monex Group
5-1 Fair Value of Monex Group Through M&As and subsequent value enhancement, Monex Group has created a globally unique business portfolio and leverages management resources for future growth strategies. Cumulative Fair Value of Monex Group Cumulative Fair Value （JPY billion) Monex Group of Monex Gro
Slide 14: Highlights – Consolidated basis for the 1-3Q of FYE Mar 2022 (Revenues)
5-2 Highlights – Consolidated basis for the 1-3Q of FYE Mar 2022 (Revenues) Revenue in the 1-3Q of FYE Mar 2022 from the three main segments increased by +51% YoY, illustrating steady growth in each business segment with different regional and business characteristics. Consolidated revenue* (¥65.9B)
Slide 15: II. Consolidated Performance
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 14
Slide 16: Highlights 3Q of FYE Mar. 2022 (3 months) 1/4
Highlights 3Q of FYE Mar. 2022 (3 months) 1/4 Pre-tax quarterly profit was ¥1.0B, while promoting strategic investments for medium- and long-term growth. Recurring revenue from mutual fund and margin trading services as well Japan as revenues from US equity trading increased. Customers’ assets in cu
Slide 17: Highlights 3Q of FYE Mar. 2022 (3 months) 2/4
Highlights 3Q of FYE Mar. 2022 (3 months) 2/4 ◆Total operating revenue after deducting financial expenses and cost of sales, and quarterly profit attributable to owners of the Company (JPY million) Total operating revenue after deducting financial expenses and cost of sales Quarterly Pre-taxes Profi
Slide 18: Highlights 3Q of FYE Mar. 2022 (3 months) 3/4
Highlights 3Q of FYE Mar. 2022 (3 months) 3/4 ◆Total operating revenue after deducting financial expenses and cost of sales, and segment profit (JPY million) Total operating revenue after deducting financial expenses and cost of sales Segment profit (Quarterly profit before income taxes) 8,000 6,880
Slide 19: Highlights 3Q of FYE Mar. 2022 (3 months) 4/4
Highlights 3Q of FYE Mar. 2022 (3 months) 4/4 ◆Total operating revenue after deducting financial expenses and segment profit (JPY million) Asia Pacific Total operating revenue after deducting financial expenses Segment profit (Quarterly profit before income taxes) 800 600 528 359 323 321 296 400 198
Slide 20: YoY Comparison (9 months) Consolidated Performance
YoY Comparison (9 months) Consolidated Performance FYE Mar. 2021 FYE Mar. 2022 3Q 3Q Rate of (JPY million) Variance Reference (Apr. 2020– (Apr. 2021– change Dec. 2020) Dec. 2021) Record High Total operating revenue after P21: Analysis of Japan segment deducting financial expenses 43,932 65,937 +22,0
Slide 21: YoY Comparison (9 months) Segment Performance
YoY Comparison (9 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 2021/3 2022/3 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q 3Q Total operating revenue after deducting financial expenses 20,555 22,615 16,078 17,254 6,589 2
Slide 22: YoY Comparison (9 months) Analysis: Operating Revenue (Japan)
YoY Comparison (9 months) Analysis: Operating Revenue Japan : Revenue other than brokerage fees increased by approximately 30% due to an increase in financial income from margin trading and mutual fund trust fees. Steady growth in U.S. equities also contributed to earnings. Total operating revenue a
Slide 23: YoY Comparison (9 months) Analysis: SG&A (Japan)
YoY Comparison (9 months) Analysis: SG&A Japan : Fixed costs has been well controlled such as system-related expenses to streamline its cost, which resulted in a small SG&A increase of 4.7%. ■ SG&A SG&A Total +4.7% (+823) (JPY million) * Figures in parentheses indicate the variance from the previous
Slide 24: YoY Comparison (9 months) Analysis: Operating Revenue (USD)
YoY Comparison (9 months) Analysis: Operating Revenue (USD) US : Total operating revenue increased YoY due to a slight increase in commissions revenue driven by account growth, despite a significant YoY drop in volatility (VIX), and higher net interest income, driven by securities lending and crypto
Slide 25: YoY Comparison (9 months) Analysis: SG&A (USD)
YoY Comparison (9 months) Analysis: SG&A (USD) US : Advertising and compensation & benefits increased YoY due to implementation of account growth strategy and product initiatives. Professional fees increased in connection with the De-SPAC. ■ SG&A SG&A Total +42.2% (+56,790) (USD thousand) 200,000 19
Slide 26: YoY Comparison (9 months) Analysis: Operating Revenue (Crypto)
YoY Comparison (9 months) Analysis: Operating Revenue Crypto : Total revenue increased by approx. 4 times YoY. Trading value at marketplace increased significantly due to the booming market, the addition of altcoin offering, and a significant account growth. ■ Total operating revenue after deducting
Slide 27: YoY Comparison (9 months) Analysis: SG&A (Crypto)
YoY Comparison (9 months) Analysis: SG&A Crypto : Advertising expenses increased due to proactive marketing efforts such as TV commercials and web marketing initiatives to acquire new accounts. SG&A Total +239.2% (+7,472) ■ SG&A * Figures in parentheses indicate the variance from the previous year (
Slide 28: QoQ Comparison (3 months) Consolidated Performance
QoQ Comparison (3 months) Consolidated Performance （JPY million） 2Q FYE Mar. 3Q FYE Mar. 2022 2022 Rate of (JPY million) Variance change Reference (Jul. 2021- (Oct. 2021- Sep. 2021) Dec. 2021) Total operating revenue after P29: Analysis of Japan segment deducting financial expenses 20,730 19,138 -1,
Slide 29: QoQ Comparison (3 months) Segment Performance
QoQ Comparison (3 months) Segment Performance Japan US Crypto Asset Asia Pacific Investment (JPY million) 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2022/3 2Q 3Q 2Q 3Q 2Q 3Q 2Q 3Q 2Q 3Q Total operating revenue after deducting financial expenses and 7,381 7,861 5,464 6,062 7,695 5
Slide 30: QoQ Comparison (3 months) Analysis: Operating Revenue (Japan)
QoQ Comparison (3 months) Analysis: Operating Revenue Japan : Revenue increased due to steady growth in non Japan equity brokerage commissions, including financial income from stock lending and margin trading, and U.S. equity commissions. ■Quarterly total operating revenue after deducting financial
Slide 31: QoQ Comparison (3 months) Analysis: SG&A (Japan)
QoQ Comparison (3 months) Analysis: SG&A Japan : Controlled fixed costs while striving to maintain and improve services. Communication costs included one-time costs associated with the start of collaboration with Shinsei Bank Group. Quarterly SG&A +4.3％ (+261) ■Quarterly SG&A * Figures in parenthese
Slide 32: QoQ Comparison (3 months) Analysis: Operating Revenue (USD)
QoQ Comparison (3 months) Analysis: Operating Revenue (USD) US : Net financial income increased by 26% driven by securities lending and crypto lending. Commissions revenue increased due to higher VIX and account growth. ■Quarterly total operating revenue after deducting financial expenses and cost o
Slide 33: QoQ Comparison (3 months) Analysis: SG&A (USD)
QoQ Comparison (3 months) Analysis: SG&A (USD) US : Advertising expenses increased due to increased marketing to acquire new accounts. Compensation and benefits increased due to an increase in headcount to support marketing and product development. ■Quarterly SG&A Quarterly SG&A +22.2% (+13,737) (US
Slide 34: QoQ Comparison (3 months) Analysis: Operating Revenue (Crypto)
QoQ Comparison (3 months) Analysis: Operating Revenue Crypto : Revenue declined QoQ due to a drop in trading value as the crypto asset market slowed down. ■Quarterly total operating revenue after deducting financial Quarterly total operating revenue after expenses and cost of sales deducting financi
Slide 35: QoQ Comparison (3 months) Analysis: SG&A (Crypto)
QoQ Comparison (3 months) Analysis: SG&A Crypto : Aggressive marketing to acquire new customers, resulting in a large increase in advertising expenses. Quarterly SG&A +33.2％ (+975) ■Quarterly SG&A * Figures in parentheses indicate the variance from the previous quarter (JPY million) (JPY million) 4,
Slide 36: History of Shareholders' Distribution
4-3 History of Shareholders’ Distribution Stable dividend payments and flexible buybacks of its own shares, while investing in the long-term growth. ◆ History of dividend per share ◆ Return on equity ratio （JPY） Year-end 18% 17.3% Interim 20 15% 12.9% 15 12% 7.0 More than 7.5 9% 8.3% 10 2.6 7.5 5.0%
Slide 37: III. Business Update
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview Appendix. Group Overview 36
Slide 38: Business Update Japan Segment 1/5
Business Update Japan Segment 1/5 After announcing an asset-management model transformation, total assets in custody grew 1.4 times in two years, reaching to ¥6 trillion. U.S. equity and mutual funds contribute to the growth in assets in custody. Monex Securities Assets Under Custody by Product (¥Tr
Slide 39: Business Update Japan Segment 2/5
Business Update Japan Segment 2/5 Revenues other than Japanese equity commissions surpassed fixed costs to help build a stable revenue base. Accelerating the asset-management model in which revenues increase along with assets under custody. Revenue Other than Japan Equity Commissions and Fixed Costs
Slide 40: Business Update Japan Segment 3/5
Business Update Japan Segment 3/5 To promote the asset-management model, Monex is striving to increase assets in custody by utilizing offline channels. Leveraging the Competence of Monex Securities to Drive “Asset Management Model” Monex Securities’ Assets Under Custody Customer Base Strengths Servi
Slide 41: Business Update Japan Segment 4/5
Business Update Japan Segment 4/5 Continued focus on revenues other than Japan equity commissions, including mutual fund trust fees and U.S. equity trading revenues. Mutual Fund U.S. Equity Trading • Number of applications for Monex Card • U.S. equity commissions account for 22% of entire increased.
Slide 42: Business Update Japan Segment 5/5
Business Update Japan Segment 5/5 Total assets under management (AUM) of Monex Asset Management, the asset management company within the group, grew by 3.2 times YoY to reach a total of ¥54.4 billion. Assets Under Management Grow Strongly Monex Asset Management Favorable Performance of （¥Billion） To
Slide 43: Business Update US Segment 1/4
Business Update US Segment 1/4 Strong year-over-year growth in total accounts and customer assets under custody. Account Additions & Client Assets DARTs and VIX • Total accounts*1: 179k (+36% YoY) • DARTs declined YoY due to COVID-driven elevated trading of the prior year, but increased by 6% sequen
Slide 44: Business Update US Segment 2/4
Business Update US Segment 2/4 Commission revenue growth reflects TradeStation’s account growth. Commission Revenue Interest Income • Total brokerage revenue*1 was $38.9M in 3Q. • Growth of total customer assets expands interest income • Brokerage commission revenue growth YoY was driven by through
Slide 45: Business Update US Segment 3/4
Business Update US Segment 3/4 TradeStation positions itself to attract an expanding market of self-directed investors. TradeStation’s Pillars for Growth Expanding Customer Base of Experienced and New Traders • Demographic wave of Millennials and Gen-Z investors, coupled with increased interest in s
Slide 46: Business Update US Segment 4/4
Business Update US Segment 4/4 To broaden its appeal, TradeStation seeks to enhance its extensive suite of products by leveraging its advanced technology and deep operational expertise. Recent Product Releases Expected Enhancements Crypto Individual Retirement Account (IRA) Brokerage • Starting in D
Slide 47: Business Update Crypto Asset Segment 1/4
Business Update Crypto Asset Segment 1/4 The global crypto asset and NFT markets are growing rapidly. Crypto Asset Market NFT Market*3 ・ With the entry of institutional investors overseas and with the • The blockchain industry is rapidly expanding not only in the market capitalization of BTC growing
Slide 48: Business Update Crypto Asset Segment 2/4
Business Update Crypto Asset Segment 2/4 Coincheck app wins No.1 app downloads in Japan for three consecutive years, and continues to be highly popular among younger generation. Strengths of Coincheck No.1 App Downloads in Japan for 3 years in a row Coincheck (crypto trading service) • The Coincheck
Slide 49: Business Update Crypto Asset Segment 3/4
Business Update Crypto Asset Segment 3/4 Coincheck has been able to implement highly agile measures and achieve overwhelming acquisition share with unique in-house marketing. Strengths of Coincheck Marketing Coincheck's customer acquisition • Coincheck has been aggressively marketing to maintain the
Slide 50: Business Update Crypto Asset Segment 4/4
Business Update Crypto Asset Segment 4/4 Coincheck creates and expands the digital econmy with an eye on Web 3.0 through its NFT/Metaverse initiatives. New business leveraging customer base New Projects Expansion of new businesses utilizing the customer base Oasis TOKYO of Coincheck, a crypto asset
Slide 51: Business Update Asia Pacific Segment
Business Update Asia Pacific Segment Margin lending increased. Asia Pacific segment is preparing for future business development. Monex Boom / Monex Australia Margin Lending • Accounts with balance is 22k (YoY +20%) • Margin lending balance is USD 13 million (YoY +42%) • U.S. stock trading connected
Slide 52: Business Update Investment Business
Business Update Investment Business Continued to expand investment portfolio with the establishment of the MV2 fund following MV1. Investment Entity Investment Portfolio MV1 fund to shift to incubation phase Investment 2.65 billion yen (Founded in Jan. 2019) Size Completed investment phase with 58 I
Slide 53: New Group Company: Genex
New Group Company The new company, Genex, envisions a future in which individuals will be able to manage “with whom”, “when/how” their entire genome information is used. Business Description Social Impact of the Project While the average time to confirm the diagnosis of rare diseases is 5-7 years, “
Slide 54: New Group Company: Viling
New Group Company Viling provides educational services that nurture "the ability to play an active role in AI society" and "human richness" under the corporate philosophy of "creating a society full of enthusiasm. Business Description STEAM Education Business STEAM education with a method of “constr
Slide 55: Business Update ESG/Sustainability Management
Business Update ESG/Sustainability Management DEI* initiatives widely recognized. M&A and new services to realize the business principle. Management team committed to increasing third-party ESG ratings. To realize the principle “optimizing people’s lifetime balance sheet” Award for Monex DEI initiat
Slide 56: Appendix. Group Overview
I. Highlights II. Consolidated Performance III. Business Update Appendix. Group Overview 55
Slide 57: Group Overview－Revenues, Costs, and Employees
Group Overview－Revenues, Costs, and Employees Total operating revenue Selling, general and The amount equivalent to after deducting financial expenses administrative expenses operating income 2％ 1％ 2％ 0％ 2％ 2％ 12％ 25％ 28％ ¥73.7B 39％ ¥49.9B 46％ ¥23.8B FYE Mar 2021 FYE Mar 2021 FYE Mar 2021 9％ 30％ 40％
Slide 58: Corporate Governance
Corporate Governance Established global-standard corporate governance practices and emphasis on dialogue with retail/institutional investors. Monex Group will shift to the new listing category of Tokyo Stock Exchange, "Prime Market" on Apr. 4, 2022. Adoption of “company with three committees” struct
Slide 59: Monex Group (As of December 31, 2021)
Monex Group (As of December 31, 2021) Listed Holding Company [Japan] [US/Europe] [Asia Pacific] Crypto asset exchange Online Securities Company Monex International Limited service provider Holding Company in Hong Kong TradeStation Group, Inc. Online Securities Company Holding Company in the U.S. Mon
Slide 60: Overview of Monex Group and Main Subsidiary Companies
Overview of Monex Group and Main Subsidiary Companies ■ Monex, Inc. (Tokyo, Japan) ■ Coincheck, Inc. (Tokyo, Japan) One of the major online brokerage firms in Japan Crypto asset Exchange/Marketplace agency - President : Yuko Seimei - President: Satoshi Hasuo - Founded in 1999 - Founded in 2012, join
Slide 61: History of Monex Group
History of Monex Group Japan U.S. Asia Pacific 1982 - TradeStation Technologies, Inc. is formed as Omega Research, Inc. 1997 - TradeStation stock lists on NASDAQ - Boom Securities (H.K.) Limited is founded (now Monex Boom Securities (H.K.) Limited) 1999 - Monex, Inc. is co-founded by Oki Matsumoto a
Slide 62: Investors' Guide
Investors’ Guide ■ Shareholders distribution ■ Shareholders & indicators per share ◆ Our basic policy for shareholders distribution ◆ Major shareholders and shareholder breakdown Monex Group aims to To ensure shareholder return, we will (as of September 30, 2021) Monex Group, Inc. consistently offer
Slide 63: Appendix. Valuation in Fair Value of Monex Group
Appendix. Valuation in Fair Value of Monex Group Data for the valuation of fair value based on the Sum-of-the-Parts method Calculated by adding up the fair value of the subsidiaries using the sum-of-the-parts method. Target subsidiaries are Monex, Inc., Coincheck, TradeStation Group, Monex Asset Man
Slide 64: Investment Segment – Portfolio 1/3
Investment Segment – Portfolio 1/3 ◆ Monex Ventures, Inc. P2P lending EC Settlement Prop Tech Online lending AI/Big Data （Registered as Type 2 Financial Instruments Business） Thematic Investment AI/Big Data Vacation Rental B2B SaaS E-market place IoT （Registered as Type 1 Financial Instruments Busin
Slide 65: Investment Segment – Portfolio 2/3
Investment Segment – Portfolio 2/3 ◆ MV I Investment Limited Partnership B2B SaaS E-market place B2B SaaS Logistics B2B Saas EC Asset Management EC E-market place Ad Tech B2B Saas B2B SaaS B2B SaaS B2B SaaS Agri-Tech B2B Saas Insure Tech KYC / Big Data B2B SaaS Robotics Marketplace AI / Sports-tech
Slide 66: Investment Segment – Portfolio 3/3
Investment Segment – Portfolio 3/3 ◆ MV I Investment Limited Partnership B2B SaaS EC EC VR Elderly Care B2B SaaS Audio Content Marketing VR Healthcare ◆ MV II Investment Limited Partnership Pet-tech HR Marketplace B2B SaaS X-Tech FinTech B2B SaaS Prop Tech FinTech e-Sports HR Tech 65
Monex Group — Q3 FYE March 2022 Earnings Presentation on 6ix