Monex Group, Inc. · TSE:8698

Monex — 2Q FYE March 2020 Earnings Presentation

40 slides from Monex's earnings presentation, Oct 28, 2019

  1. Slide 1: DATABOOK Financial Results for 2Q of Fiscal Year Ending March 31, 2020

    October 28, 2019 (TSE 1st Section: 8698) DATABOOK Financial Results for 2Q of Fiscal Year Ending March 31, 2020 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.14 2. Financial Data p.15 - p.39 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 Asia-Pacific Segment Crypto Asset Segment 6,000,000 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, 2017 Dec.31, 2017 Mar.31, 2018

  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 Asia-Pacific Segment Crypto Asset Segment 1,000 500 0 As of As of As of As of As of As of As of As of As of Sep.30, 2017 Dec.31, 2017 Mar.31, 2018 Jun.30, 2018 Sep.30, 2018 Dec.30, 2018 Mar.31, 2019 June.30, 20

  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 2,000,000 1,500,000 1,000,000 500,000 0 As of Sep. 30, As of Dec. 31, As of Mar. 31, As of Jun. 30, As of Sep. 30, As of Dec. 31, As

  7. Slide 7: Market and Transaction Data (4) Japan Segment - Equities and ETFs

    Market and Transaction Data (4) Japan Segment - Monex, Inc. (Equities and ETFs ) ◆Market share and value of equity trading ◆ Monex’s cash & margin trading value and margin balance Monex’s share in retail trading value of 2 major stock exchanges and (JPY 100million) its equity trading values (%) Cash

  8. Slide 8: Market and Transaction Data (5) Japan Segment - 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. (FX)

    Market and Transaction Data (6) Japan Segment - Monex, Inc. (FX) ◆OTC FX business (JPY million) (JPY 100million) 1,500 200,000 FX revenue (left) Trading value (right) 150,000 1,000 100,000 500 50,000 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

  10. Slide 10: Market and Transaction Data (7) Japan Segment - Customer distribution

    Market and Transaction Data (7) Japan Segment – Monex, Inc. (Customer distribution) ◆Active accounts by gender and age ◆Active accounts by occupation Corporate Professional Corporation executive (e.g. Doctor) 30% All accounts Accounts opened within a year 35% Homemaker Civil servant 30% Self-employe

  11. Slide 11: Market and Transaction Data (8) Japan Segment - Capital Adequacy Ratio

    Market and Transaction Data (8) 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 A

  12. Slide 12: Market and Transaction Data (9) U.S. Segment – TradeStation Group

    Market and Transaction Data (9) U.S. Segment – TradeStation Group ◆ Numbers of active accounts ◆ DARTs and VIX(*1) （thousand） (account) 100 30 Futures DARTs(left) Options DARTs(left) 120,000 Equities DARTs(left) Vix Close Avg. (right) 100,000 20 80,000 50 60,000 10 40,000 20,000 0 As of Sep. 30, As

  13. Slide 13: Market and Transaction Data (10) Asia-Pacific Segment

    Market and Transaction Data (10) Asia-Pacific Segment Monex Boom Securities+Monex Securities Australia ◆ Numbers of accounts with balances ◆ DARTs (account) 3,000 14,000 12,000 10,000 2,000 8,000 6,000 1,000 4,000 2,000 0 0 As o f Sep. As o f Dec. As o f Mar. As o f Jun. As o f Sep. As o f Dec. As o

  14. Slide 14: Market and Transaction Data (11) Investment Segment – Portfolio 1/2

    Market and Transaction Data (11) Investment Segment – Portfolio 1/2 ◆ Monex Ventures, Inc. P2P lending EC Settlement DLT* Prop Tech AI/Big Data （Registered as Type 2 Financial Instruments Business） Online lending AI/Big Data Thematic Investment B2B Robo-advisor AI/Big Data Vacation Rental （Registere

  15. Slide 15: Market and Transaction Data (11) Investment Segment – Portfolio 2/2

    Market and Transaction Data (11) Investment Segment – Portfolio 2/2 ◆ MONEX EDISON Investment Limited Partnership Web media EC AI/Big Data Insure Tech Cryptoasset EC Ad Tech ◆ MV I Investment Limited Partnership B2B SaaS E-market place B2B SaaS Logistics B2B Saas EC Asset Management EC E-market plac

  16. Slide 16: 2. Financial Data

    1. Market & Transaction Data 2. Financial Data 15

  17. Slide 17: Introduction

    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 AP(*) with a view to creating a global online financial group ■ Consolidated fina

  18. Slide 18: Consolidated financial results

    Consolidated financial results (JPY million) 2Q FYE Mar. 2Q FYE Mar. Variance Change 2019 2020 Commission received 13,085 11,456 -1,630 -12.5% Net trading income 3,209 4,254 1,045 32.6% Financial income 9,733 9,949 216 2.2% Other operating income 373 375 2 0.6% Total operating revenue 26,400 26,034

  19. Slide 19: Consolidated financial results (Reclassified)

    Consolidated financial results (Reclassified) Reclassified consolidated statement of income (JPY million) 2Q FYE Mar. 2019 2Q FYE Mar. 2020 Variance Change Brokerage commissions 9,854 8,669 -1,184 -12.0% Stocks and ETFs 6,494 5,142 -1,353 -20.8% Options and Futures 3,357 3,485 128 3.8% Cryptocurrenc

  20. Slide 20: Consolidated financial results (SG&A)

    Consolidated financial results (SG&A) The details of SG&A in consolidated statement of income (JPY million) 2Q FYE Mar. 2019 2Q FYE Mar. 2020 Variance Change Transaction-related expenses 5,967 5,715 -252 -4.2% Commissions paid 2,309 2,311 1 0.1% Exchange and association dues 385 361 -24 -6.3% Commun

  21. Slide 21: Quarterly consolidated financial results (Reclassified)

    Quarterly consolidated financial results (Reclassified) Reclassified consolidated statement of income (JPY million) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q Brokerage commissions 5,134 4,720 5,332 4,278 4,341 4,328 Stocks and ETFs 3,364 3,130 3,399 2,716 2,575 2,566 Options and Futures 1,768 1,

  22. Slide 22: 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. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q Transaction-related expenses 3,157 2,810 3,000 3,085 2,881 2,834 Commissions paid 1,255 1,054 1,244 1,055 1,160 1,151 Exchange and assoc

  23. Slide 23: Quarterly consolidated financial results (Other income and other expenses)

    Quarterly consolidated financial results (Other income and other expenses) (JPY million) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q Other financial income 140 187 284 541 30 60 Gain on valuation of investments in securities 34 21 -31 13 16 56 Gain on sales of investments in securities - 0 - -0 -

  24. Slide 24: Quarterly financial results by segment (Reclassified) (Japan, the US and Asia-Pacific)

    Quarterly financial results by segment (Reclassified) (Japan, the US and Asia-Pacific) Reclassified statement of income (JPY million) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP Brokerage commissions 2,858 2,217 96 2,652 1,996 113 2,928 2

  25. Slide 25: Quarterly financial results by segment (Reclassified) (Crypto Asset, Investment)

    Quarterly financial results by segment (Reclassified) (Crypto Asset Segment, Investment Segment) Reclassified statement of income (JPY million) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q Crypto Crypto Crypto Crypto Crypto Crypto Investment Investment Investment Investment Investment Investment As

  26. Slide 26: Quarterly financial results by segment (SG&A) (Japan, the US and Asia-Pacific)

    Quarterly financial results by segment (SG&A) (Japan, the US and Asia-Pacific) The details of SG&A in statement of income (JPY million) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP Transaction-related expenses 1,371 1,615 61 1,191 1,455 69

  27. Slide 27: Quarterly financial results by segment (SG&A) (Crypto Asset, Investment)

    Quarterly financial results by segment (SG&A) (Crypto Asset Segment, Investment Segment) The details of SG&A in statement of income (JPY million) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q Crypto Crypto Crypto Crypto Crypto Crypto Investment Investment Investment Investment Investment Investment

  28. Slide 28: Quarterly financial results by segment (Other income and expenses) (Japan, US, AP)

    Quarterly financial results by segment (Other income and other expenses) ( Japan, the US and Asia-Pacific) (JPY million) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP JPN US AP Gain on valuation of investments in securities 34 - - 21 - - -31 - - 13 -

  29. Slide 29: Quarterly financial results by segment (Other income and expenses) (Crypto, Investment)

    Quarterly financial results by segment (Other income and other expenses) (Crypto Asset Segment, Investment Segment) (JPY million) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q Crypto Invest Crypto Invest Crypto Invest Crypto Invest Crypto Invest Crypto Invest Asset ment Asset ment Asset ment Asset m

  30. Slide 30: US Segment: Quarterly financial results (Reclassified) (in USD)

    US Segment :Quarterly financial results (Reclassified) (in USD) Reclassified statement of income (USD thousand) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q Brokerage commissions 20,377 17,834 21,099 18,100 19,477 19,745 Stocks and ETFs 4,731 4,258 4,813 4,556 4,248 4,212 Options and Futures 15,646

  31. Slide 31: US Segment: Quarterly financial results (SG&A) (in USD)

    US Segment :Quarterly financial results (SG&A) (in USD) The details of SG&A in statement of income (USD thousand) FYE Mar. 2019 FYE Mar. 2020 1Q 2Q 3Q 4Q 1Q 2Q Transaction-related expenses 14,849 12,997 13,649 13,822 13,458 13,575 Commissions paid 7,929 6,236 7,787 6,301 7,444 7,532 Exchange and ass

  32. Slide 32: Financial results by consolidated and segment

    Financial results by consolidated and segment (JPY million) FYE Mar. 2018 FYE Mar. 2019 Variance Cons.* JPN US AP Cons. JPN US AP Cons. JPN US AP Commission received 29,196 16,968 11,858 557 25,741 13,301 12,014 406 -3,455 -3,667 156 -151 Net trading income 3,865 3,865 - 0 6,461 4,535 - -3 2,596 670

  33. Slide 33: Financial results by consolidated and segment

    Financial results by consolidated and segment (JPY million) FYE Mar. 2018 FYE Mar. 2019 Variance Crypto Asset Investment Crypto Asset Investment Crypto Asset Investment Commission received - - 186 - 186 - Net trading income - - 1,929 - 1,929 - Financial income - 2,772 - 414 - -2,357 Sales - - - - -

  34. Slide 34: Financial results by consolidated and segment (Reclassified)

    Financial results by consolidated and segment(Reclassified) (JPY million) FYE Mar. 2018 FYE Mar. 2019 Variance Cons. * JPN US AP Cons. JPN US AP Cons. JPN US AP Brokerage commissions 22,540 14,082 8,091 554 19,463 10,650 8,573 404 -3,077 -3,432 481 -150 Stocks and ETFs 15,974 13,733 1,874 554 12,610

  35. Slide 35: Financial results by consolidated and segment (Reclassified)

    Financial results by consolidated and segment(Reclassified) (JPY million) FYE Mar. 2018 FYE Mar. 2019 Variance Crypto Asset Investment Crypto Asset Investment Crypto Asset Investment Brokerage commissions - - 3 - 3 - Stocks and ETFs - - - - - - Options and Futures - - - - - - Cryptocurrency - - 3 -

  36. Slide 36: Financial results by consolidated and segment (SG&A)

    Financial results by consolidated and segment(SG&A) (JPY million) FYE Mar. 2018 FYE Mar. 2019 Variance Cons.* JPN US AP Cons. JPN US AP Cons. JPN US AP Transaction-related expenses 11,963 5,787 6,043 332 12,051 5,135 6,126 268 88 -652 83 -64 Commissions paid 4,125 1,398 2,842 85 4,609 1,414 3,129 43

  37. Slide 37: Financial results by consolidated and segment (SG&A)

    Financial results by consolidated and segment(SG&A) (JPY million) FYE Mar. 2018 FYE Mar. 2019 Variance Crypto Asset Investment Crypto Asset Investment Crypto Asset Investment Transaction-related expenses - 11 709 5 709 -6 Commissions paid - 9 213 2 213 -7 Exchange and association dues - - - - - - Co

  38. Slide 38: Consolidated statement of financial position (1) Assets

    Consolidated statement of financial position (1) ■Assets (JPY million) As of As of As of As of Mar. 31, 2019 Sep. 30, 2019 Mar. 31, 2019 Sep. 30, 2019 Cash and cash equivalents 154,146 174,120 Property and equipment 2,456 4,915 Cash segregated as deposits 566,220 572,575 Intangible assets 47,698 46,

  39. Slide 39: Consolidated statement of financial position (2) Liabilities, Equity

    Consolidated statement of financial position (2) ■Liabilities ■Equity (JPY million) As of As of As of As of Mar. 31, 2019 Sep. 30, 2019 Mar. 31, 2019 Sep. 30, 2019 Derivative liabilities 4,312 3,821 Common stock 10,394 10,394 Margin transaction liabilities 32,793 37,461 Additional-paid in capital 40

  40. Slide 40: Consolidated statement of financial position (3) Investments in securities

    Consolidated statement of financial position (3) ■Investments in securities (JPY million) As of As of Measurement method Description Mar. 31, 2019 Sep. 30, 2019 Investments in securities 3,914 4,905 Fair Value Through Profit or Loss (FVTPL) Quoted prices (unadjusted) in active markets for identical

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