Monex Group, Inc. · TSE:8698

Monex — 2Q FYE March 2016 Earnings Presentation

30 slides from Monex's earnings presentation, Oct 29, 2015

  1. Slide 1: Databook: Financial Results for 2Q of Fiscal Year Ending March 31, 2016

    October 29, 2015 (TSE 1st Section: 8698) DATABOOK Financial Results for 2Q of Fiscal Year Ending March 31, 2016 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 fr

  2. Slide 2: Table of Contents

    Table of Contents [Data Book] Table of Contents p. 1 1. Market & Transaction Data p. 2 - p.12 2. Financial Data p. 13 - p.29 1

  3. Slide 3: 1. Market & Transaction Data

    1. Market & Transaction Data 2. Financial Data 2

  4. Slide 4: Market and Transaction Data (1) – Customers’ Assets in Custody

    Market and Transaction Data (1) – Customers’ Assets in Custody (JPY million) Japan Segment U.S. Segment China Segment 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 As of As of As of As of As of As of As of As of As of Sep.30, 2013 Dec.31, 2013 Mar.31, 2014 Jun.30, 2014 Sep.30, 2014 Dec.31, 201

  5. Slide 5: Market and Transaction Data (2) – Number of Employees

    Market and Transaction Data (2) – Number of Employees (person） Japan Segment U.S. Segment China Segment 1,200 800 400 0 As of As of As of As of As of As of As of As of As of Sep.30, 2013 Dec.31, 2013 Mar.31, 2014 Jun.30, 2014 Sep.30, 2014 Dec.31, 2014 Mar.31, 2015 Jun.30, 2015 Sep.30, 2015 (person）

  6. Slide 6: Market and Transaction Data (3) – Japan Segment - Monex, Inc. (Number of accounts)

    Market and Transaction Data (3) – Japan Segment - Monex, Inc. (Number of accounts) ◆Number of total accounts & active accounts (account） Total accounts Active accounts 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 As of Sep. 30, As of Dec. 31, As of Mar. 31, As of Jun. 30

  7. Slide 7: Market and Transaction Data (4) Japan Segment - Monex, Inc. (Equities)

    Market and Transaction Data (4) Japan Segment - Monex, Inc. (Equities) ◆Market share and value of equity trading ◆ Breakdown of DARTs and market trading value Monex’s share in retail trading value of 2 major stock exchanges and (JPY 100million) its equity trading values (%) Futures and Options DARTs

  8. Slide 8: Market and Transaction Data (5) Japan Segment - Monex, Inc. (Mutual Funds & Bonds)

    Market and Transaction Data (5) Japan Segment - Monex, Inc. (Mutual Funds & Bonds) ◆Mutual Funds (Sales and Balance) ◆Fixed Income Businesses (Sales of non-domestic bonds) (JPY million) Sales of Investment Trusts(no-load) (left) (JPY million) (JPY million) 70,000 Sales of Investment Trusts(load) (le

  9. Slide 9: Market and Transaction Data (6) Japan Segment – Monex, Inc. (Customer distribution)

    Market and Transaction Data (6) Japan Segment – Monex, Inc. (Customer distribution) ◆Active accounts by gender and age ◆Active accounts by occupation Corporate Professional Corporation executive (e.g. Doctor) All accounts Accounts opened within a year 35% 35% Homemaker Civil servant Self-employed 30

  10. Slide 10: Market and Transaction Data (7) Japan Segment - Monex, Inc. (Capital Adequacy Ratio)

    Market and Transaction Data (7) Japan Segment - Monex, Inc. (Capital Adequacy Ratio) ◆Capital adequacy ratio (JPY million) 50,000 500% Risk asset amount（left） Non-fixed capital （left） Capital adequacy ratio（right） 40,000 400% 30,000 300% 20,000 200% 10,000 100% 0 0% As of As of As of As of As of As

  11. Slide 11: Market and Transaction Data (8) U.S. Segment – TradeStation Group

    Market and Transaction Data (8) U.S. Segment – TradeStation Group ◆ DARTs and VIX(*) （thousand） 150 Futures DARTs(left) Options DARTs(left) Equities DARTs(left) Vix Close Avg. (right) 30 100 20 50 10 0 0 2Q of FYE 3Q of FYE 4Q of FYE 1Q of FYE 2Q of FYE 3Q of FYE 4Q of FYE 1Q of FYE 2Q of FYE Mar. 2

  12. Slide 12: Market and Transaction Data (9) China Segment - Monex Boom Securities

    Market and Transaction Data (9) China Segment - Monex Boom Securities ◆ Numbers of accounts with balances ◆ DARTs (account) 12,000 2,000 10,000 1,500 8,000 6,000 1,000 4,000 500 2,000 0 0 As of Sep. As of Dec. As of Mar. As of Jun. As of Sep. As of Dec. As of Mar. As of Jun. As of Sep. 2Q of FYE 3Q

  13. Slide 13: Market and Transaction Data (10) Global FX

    Market and Transaction Data (10) Global FX ◆OTC FX business in Japan (Monex, Inc. and Monex FX, Inc.) ◆OTC FX business in U.S. (TradeStation Group) (JPY million) (JPY 100million) (USD thousand) （100mil USD） 1,500 200,000 8,000 1,000 Commissions(left) Trading revenue(left) Trading value (right) 150,0

  14. Slide 14: 2. Financial Data

    1. Market & Transaction Data 2. Financial Data 13

  15. Slide 15: Introduction: Consolidated financial statements for 2Q FYE March 2016

    Introduction We have adopted IFRSs since FYE March 2013 to improve the international comparability of financial information, while we engage in business activities with a focus of 3 major locations (Japan, the U.S. and China) with a view to creating a global online financial group ■ Consolidated fin

  16. Slide 16: Consolidated financial results (6 months)

    Consolidated financial results (6 months) (million yen) 2Q FYE Mar. 2Q FYE Mar. Variance Change 2014 2015 Commission received 13,519 17,372 3,853 28.5% Net trading income 2,419 3,747 1,328 54.9% Financial income 6,586 7,423 837 12.7% Other operating income 319 425 106 33.2% Total operating revenue 2

  17. Slide 17: Consolidated financial results (Reclassified) 6 months

    Consolidated financial results (Reclassified) 6 months Reclassified consolidated statement of income (million yen) 2Q FYE Mar. 2014 2Q FYE Mar. 2015 Variance Change Brokerage commissions 10,616 13,830 3,214 30.3% Stocks and ETFs 7,979 9,913 1,935 24.2% Options and Futures 2,619 3,917 1,298 49.6% OSE

  18. Slide 18: Consolidated financial results (SG&A) 6 months

    Consolidated financial results (SG&A) 6 months The details of SG&A in consolidated statement of income (million yen) 2Q FYE Mar. 2014 2Q FYE Mar. 2015 Variance Change Transaction-related expenses 6,226 7,067 841 13.5% Commissions paid 2,323 2,873 551 23.7% Exchange and association dues 641 648 7 1.1

  19. Slide 19: Quarterly consolidated financial results

    Quarterly consolidated financial results (JPY million) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q Commission received 6,314 7,205 8,319 8,242 8,499 8,872 Net trading income 1,244 1,175 1,968 1,854 1,813 1,934 Financial income 3,115 3,471 3,673 3,729 3,670 3,753 Other operating income 149 170 174

  20. Slide 20: Quarterly consolidated financial results (Reclassified)

    Quarterly consolidated financial results (Reclassified) Reclassified consolidated statement of income (JPY million) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q Brokerage commissions 4,906 5,710 6,679 6,527 6,769 7,061 Stocks and ETFs 3,627 4,352 4,917 4,688 4,974 4,940 Options and Futures 1,269 1,

  21. Slide 21: Quarterly consolidated financial results (SG&A)

    Quarterly consolidated financial results (SG&A) The details of SG&A in consolidated statement of income (JPY million) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q Transaction-related expenses 3,006 3,220 3,520 3,490 3,522 3,544 Commissions paid 1,124 1,198 1,375 1,454 1,371 1,502 Exchange and assoc

  22. Slide 22: Quarterly consolidated financial results (Other income and other expenses)

    Quarterly consolidated financial results (Other income and other expenses) (JPY million) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q Other financial income 20 35 20 7 77 -50 Gain on sales of investment securities - - 1 -0 - - Dividends income 16 34 11 5 15 5 Gain or loss on Financial instruments f

  23. Slide 23: Quarterly financial results by segment

    Quarterly financial results by segment (JPY million) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN Commission received 3,922 2,337 73 4,696 2,448 84 5,304 2,949 96 5,112 3,057 99 5,394 2,975 163 5,415 3,379 114 Net trading

  24. Slide 24: Quarterly financial results by segment (Reclassified)

    Quarterly financial results by segment (Reclassified) Reclassified statement of income (JPY million) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN Brokerage commissions 3,220 1,628 73 3,910 1,735 84 4,438 2,173 96 4,205 2,

  25. Slide 25: Quarterly financial results by segment (SG&A)

    Quarterly financial results by segment (SG&A) The details of SG&A in statement of income (JPY million) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN JPN U.S. CHN Transaction-related 1,461 1,528 35 1,486 1,717 41 1,573 1,928 52 1,680 1,

  26. Slide 26: U.S. Segment: Quarterly financial results (Reclassified) (in USD)

    U.S. Segment :Quarterly financial results (Reclassified) (in USD) Reclassified statement of income (USD thousand) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q Brokerage commissions 15,954 16,552 19,051 19,174 17,714 20,168 Stocks and ETFs 4,624 4,699 5,198 4,886 4,356 4,580 Options and Futures 11,3

  27. Slide 27: U.S. Segment: Quarterly financial results (SG&A) (in USD)

    U.S. Segment :Quarterly financial results (SG&A) (in USD) The details of SG&A in statement of income (USD thousand) FYE Mar. 2015 FYE Mar. 2016 1Q 2Q 3Q 4Q 1Q 2Q Transaction-related expenses 14,970 16,397 16,816 15,015 15,277 15,601 Commissions paid 8,320 8,614 9,409 9,174 8,626 9,632 Exchange and a

  28. Slide 28: Consolidated statement of financial position (1)

    Consolidated statement of financial position (1) ■Assets (JPY million) As of As of As of As of Mar. 31, 2015 Sep. 30, 2015 Mar. 31, 2015 Sep. 30, 2015 Cash and cash equivalents 68,540 70,324 Property and equipment 2,408 2,359 Cash segregated as deposits 525,567 522,419 Intangible assets 48,807 51,36

  29. Slide 29: Consolidated statement of financial position (2)

    Consolidated statement of financial position (2) ■Liabilities ■Equity (JPY million) As of As of As of As of Mar. 31, 2015 Sep. 30, 2015 Mar. 31, 2015 Sep. 30, 2015 Derivative liabilities 12,158 9,192 Common stock 10,394 10,394 Margin transaction liabilities 46,125 27,178 Additional-paid in capital 4

  30. Slide 30: Consolidated statement of financial position (3)

    Consolidated statement of financial position (3) ■Investments in securities (JPY million) As of Mar. As of Sep. measurement method Description 31, 2015 30, 2015 Investments in securities 8,176 3,839 Fair Value Through Profit or Loss Quoted prices (unadjusted) in active markets for identical Akatsuki

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