Monex Group, Inc. · TSE:8698
Monex — FY3/2002 2Q Earnings Presentation
30 slides from Monex's earnings presentation, October 2001
Slide 1: FYE 03/2002 2Q Financial Results
FYE 03/2002 2Q Financial Results October 2001 Forward-looking Statements Statements made at this presentation and in these materials include forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking
Slide 2: FY 3/2002 Financial Summary agenda
FY 3/2002 1Q Financial Summary I. Semi-annual Financial Result and Analysis II. Business Model and Strategy 1
Slide 3: I. Semi-annual Financial Result and Analysis
I. Semi-annual Financial Result and Analysis
Slide 4: FY 3/2002 Semi-annual Financial Summary
FY 3/2002 Semi- Semi-annual Financial Summary ） (million Yen） FY 3/2001 FY3/2002 Semi-annual Semi-annual % chg Operating Revenue 1,497 1,707 +14.0% (Commission Revenue） 1,472 1,679 +14.1% Operating Expense 1,863 2,156 +15.7% Operating Loss 365 449 - Ordinary Loss 474 416 - Net Loss 500 468 - * P/L o
Slide 5: FY 3/2002 2Q Financial Summary
FY 3/2002 2Q Financial Summary ） (million Yen） FY 3/2001 FY3/2002 2Q 2Q % chg Operating Revenue 850 764 -10.1% (Commission Revenue） 835 756 -9.5% Operating Expense 1,015 1,182 +16.5% Operating Loss 164 417 - Ordinary Loss 230 414 - Net Loss 243 427 - 4
Slide 6: Operating Revenue vs. SG&A
Operating Revenue vs. SG&A (million Yen) FEY 03/2000 FEY 03/2001 1Q 2Q 3Q 4Q 1Q 2Q Operating Revenue (1) 647 850 748 752 942 764 SG and A (2) 848 1,015 923 891 974 1,182 million Yen (1) / (2) 76% 84% 81% 84% 97% 65% 1,400 1,182 1,200 1,015 974 923 31 1,000 891 417 848 164 800 175 139 201 600 850 942
Slide 7: Number of Customers' Account
100,000 120,000 140,000 160,000 180,000 200,000 0 20,000 40,000 60,000 80,000 19 99 /1 19 0 99 /1 19 1 99 /1 2 20 00 /0 20 1 00 /0 20 2 00 /0 3 20 00 /0 Number of Customers’ 20 4 00 /0 20 5 00 /0 6 20 00 /0 20 7 00 Customers’ Account /0 20 8 00 /0 9 20 00 /1 20 0 00 /1 20 1 00 /1 2 20 01 /0 20 1 01
Slide 8: Cost to Acquire Customers' Account
Cost to Acquire Customers’ Customers’ Account Numbe r of C ustome rs' Account Acqui re d 25,000 44,270 accounts 20,000 transferred from Saison 15,000 Securities are not included 10,000 in new account acquired 5,000 0 for 1Q in FYE 03/2001. FYE 03/2001 2Q 4Q 2Q (Avg.） Advertising Expense (thousand US
Slide 9: Break-Even Analysis
Break- Break-Even Analysis 1. Divide major ite ms of SG & A into 2 cate gorie s (1) Variable s (trade volume and numbe r of accounts base ) and (2) Fixe d. Some of the ite ms are calculate d base d on partial variable s and fixe d cost. Outsourcing Expe nse s are divide d into thre e cate gorie s af
Slide 10: Revised Break-Even Analysis – Number of Trade
Revised Break- Break-Even Analysis – Number of Trade Accepted a rise in fixed-cost and in one-time cost to concentrate investment for expanding an infrastructure for new services. Infrastructure: Account Aggregation, ATM (to link with Postal Office/Credit Saison), Cash Management Account, mobile pho
Slide 11: Stability of the Clients from Saison Securities
Stability of the Clients from Saison Securities Ex- Ex-Saison Securities’ Securities’ Customers’ Customers’ Ratio in Number of Orders and Executed Deals (%: Weekly Average) Average) 16 14 12 10 8 June 30, 2001 a merger of Monex and Saison Securities 6 4 Number or Orders Number of Executed Deal (part
Slide 12: Revised Break-Even Analysis – Executed Deal Ratio
Revised Break- Break-Even Analysis – Executed Deal Ratio Break-even of Executed Deal Ratio and Nikkei 225 Average 20000 20.0% 18000 18.0% 16000 16.0% Executed Deal Ratio Nikkei 225 Averag 14000 14.0% 12000 12.0% 10000 10.0% 8000 8.0% 6000 6.0% 4000 4.0% Due to merger on Jun 30 2000 2.0% 0 0.0% Jul-0
Slide 13: Correlation with Market
Correlation with Market Individual Trading Volume at TSE and Monex Individual Trading Volume at TSE and (index April 2000 =100) Nikkei 225 Average （ 1986 =100） 200 180 200 160 140 150 120 100 100 80 60 50 40 Correlation Coefficient=0.9334 20 0 0 Jul-00 Jul-01 May-00 Jun-00 Sep-00 Oct-00 Nov-00 Dec-0
Slide 14: Comparison with Other On-line Brokers
Comparison with Other On- On-line Brokers Movement of the Number of Executed Deal Ratio of Margin Trade and Account (April 2001 = 100 index） （ As of June 2001） ） 160 Mon e x （ Accoun t） Cut in commission and an E*TRADE 140 introduction of fixed- Mone x （ Trade ） commission are announced 120 DLJ E*Tr
Slide 15: Ratio of shareholdings
Shareholders Monex's Shareholder (as of April 1, 2001) Potential stocks (Stock 100% = 1,505,977 shares ・Latent Stock Total: 105,983 Shares 7.1% O ption related) 100% 22.4% O thers Ratio of shareholdings 1.8% ・Financial institutional and individual 2.6% Goldman Sachs Credit Saison investors （24.2% （2
Slide 16: Monex Share Price vs Nikkei 225
Monex Share Price vs Nikkei 225 Monex Share Price v.s. Nikkei 225 Average Index (August 4, 2000 2000 as a base) 200 180 Monex index (Aug. 4, 2000 closing price:68,300 Yen＝ 100） Nikkei 225 average index （ Aug. 4 2000 closing price:15,667 Yen =100） 160 Monex IPO share Price:45,000 Yen 140 120 100 80 6
Slide 17: II. Business Model and Strategy
II. Business Model and Strategy
Slide 18: Preconditions for our Business Model
Preconditions for our Business Model Asset Allocation of Household (as of Dec.2000) （ million Internet users in Japan people ） 4.0% 87.2million 4.1% 2.4% 100 Japan 54.9% 6.6% 28.0% 80 47.1 million 60 USA 10.6% 9.2% 11.9% 34.1% 31.6% 40 2.6% 20 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0 1997 1998 1999 200
Slide 19: Monex's Target
Monex’ Monex’s Target Monex targets “Mass-Market” People trading Inter-net Users Stocks and Investment Trust Monex’s Target = “Mass-Market” 18
Slide 20: Targeting Map
Targeting Map Trade Activity ： high Others’ target customers Other online brokers’ customers Assets: Small ： Large Assets： Monex’s customers Current = Target ＞＞similar ＞＞ to clients of Post Office, Current traditional Banks and Credit Card users brokers’ customers Materialized combining “VIRTUAL” in
Slide 21: Status Quo
Status Quo Ratio of Individual investors in On-line trading A shift from indirect finance to direct finance has not 34% taken place yet 35% 30% 25% 20% 9% 15% But several measures such as smaller unit of share, 10% 5% Japanese 401k, and tax structural change has already been 0% 3/1/2000 3/1/2001 dis
Slide 22: Business Model
Business Model Changes for the precondition of our business model !Shift from Indirect to Direct Finance !Shift from Off-line to On-line Trading Monex plans and materializes a new type of infrastructure for individuals for coming new phase, replacing saving deposit at banks Monex aims at the followi
Slide 23: Image of Individual Account in New Financial System
Image of Individual Account in New Financial System Life Life Non-Life Non-Life Bank Bank Saison SaisonCard Card Finance Agent CMA ATM ITS AA Tax Rese- Finance Platform CMA ATM ITS AA Financial Tax Financial Report Rese- rving （Cash (Saison （Internet （Account Advice Report rving （Cash (Saison （Inter
Slide 24: Asset Gatherer – Movement in Customers' Asset in Custody
Asset Gatherer – Movement in Customers’ Customers’ Asset in Custody Nikkei 225 Avg. （Yen） ） 20,000 18,000 16,000 14,000 Billion Yen 12,000 refer to p.13 for comparison 10,000 refer to p.13 for comparison 4,184 with other brokers with other brokers 3,745 4,000 2,919 3,000 2,459 2,451 1,938 2,000 1,30
Slide 25: Asset Gatherer – Investment Trust, Monthly Purchase and MRF
Asset Gatherer – Investment Trust, Monthly Purchase and MRF Outstanding (billion Yen） Number of accounts 80.0 1,000 839 70.0 760 792 900 800 60.0 700 50.0 600 421 470 40.0 405 500 307 31.0 30.5 30.0 28.7 400 30.0 13.0 13.9 14.6 300 20.0 200 10.0 100 7.6 8.2 8.2 11.6 11.0 10.3 9.5 0.0 0 2001/3 2001/4
Slide 26: Future Development: Stock Brokerage Business
Future Development: Stock Brokerage Business Basic Strategy： ・Acquiring overwhelming number of customers’ account at low cost in order to generate profit even with a low rate of orders from customers As for information services, materialized the content to satisfy even the most active traders by col
Slide 27: Future Development: Investment Trust Business
Future Development: Investment Trust Business To reinforce our top-ranked position among the on-line securities firms （Concrete Plan） ） • Reinforcement and promotion of monthly fixed amount purchase as well as ‘Card de Tsumitate’ • Reviewing the possibility to enter into Japanese 401k business • Mak
Slide 28: Future Development: Underwriting Business
Future Development: Underwriting Business Acutal Number of deal for 2Q FYE 2001 Number of Deal Lead Manager 30 40 37 Ranking MONEX 2 Postponed 30 2000 2 20 22 2001 E*TRADE 5 ・ Postponed due to Market condition. 20 18 ・ One of which, Monex is co- 16 DLJ 6 manager (10% of share) 13 10 20 Executed 10 5
Slide 29: Partnership
Partnership Materializing strategies efficiently by collaborating with Partners ： Most Important Partners： !Credit Saison About 13 million card-holders （10% of population、24% of household penetration） Mailing monthly bill-statement to about 6 million people. →Realization of CMA and ATM network, as w
Slide 30: MONEX
MONEX http://www.monex.co,jp/