Nomura Holdings, Inc. · TSE:8604
Nomura — Q2 FY2003 Earnings Presentation
35 slides from Nomura's earnings presentation, Nov 1, 2002
Slide 1: Consolidated Results of Operations (US GAAP) Second quarter, fiscal year ended March 2003
Consolidated Results of Operations (US GAAP) Second quarter, fiscal year ended March 2003 Nomura Holdings, Inc. October 2002 This is a summary of a presentation on consolidated results of operations for the second quarter, fiscal year ended March 2003. Date: 1 November, 2002 (Friday) Speaker: Koichi
Slide 2: Outline of the Presentation
Outline of the Presentation ! Financial Summary ! Review of Businesses " Segment Information " Domestic Retail " Global Wholesale " Asset Management " Non-interest Expenses ! Appendix 1. This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2002 Nomura Holdings, Inc. All rights re
Slide 3: Consolidated Financial Summary
Consolidated Financial Summary Six months ended September 30, 2002 " Net revenue 283.4 (up 18%*) " Non-interest expenses 242.8 (down 33%*) Semi Annual Results " Income before income taxes 40.6 (N.M.) (billions of yen) " Net income 131.1 (N.M.) " Total assets 18,963.6 (up 1,205.3***) " Total sharehol
Slide 4: Review of Businesses
Review of Businesses ! Segment Information (P5) ! Domestic Retail (P6-9) ! Global Wholesale (P10-13) ! Asset Management (P14-15) ! Non-interest Expenses (P16-17) 4
Slide 5: Segment Information
Segment Information Income before Income Taxes by Segment 1Q 95.6 (Billions of yen) 2Q 95 02.3 (1/2) 75 TOTAL (Six-month total) Down 3% 55 46.9 45.5 9.0 24.6 35 Up 152% 36.5 15.3 15 10.4 1.4 22.3 Down 66% 10.2 13.9 7.1 2.2 6.1 1.3 5.1 4.9 2.4 -4.3 1.1 -5 02.3 1H 03.3 1H 02.3 (1/2) 02.3 1H 03.3 1H 02
Slide 6: Domestic Retail (1)
Domestic Retail (1) Commissions (25.7 billion yen, up 28%) ! Stock Brokerage Commissions (10.2 billion yen, down 21%) " Individual Equity Agency Transaction Value* (monthly average) # 3.9 trillion yen, up 15% Net Revenue ! Commissions for Investment Trust Distribution** (6.1 billion yen, up 32%) " L
Slide 7: Domestic Retail (2) Revenue Breakdown
Domestic Retail (2) Revenue Breakdown (approx figs.) Variable annuity insurance Investment trusts (administrations fees) Investment trusts (distributions fees) Equities Bonds 100% 8% 14% 90% 24% 30% 15% 80% 24% 70% 13% 13% 16% 60% 50% 29% 35% 40% 52% 40% 30% 20% 36% 28% 10% 15% 10% 0% FY00.3 FY01.3
Slide 8: Domestic Retail (3) Client Assets / Net Asset Accumulation
Domestic Retail (3) Client Assets / Net Asset Accumulation (excluding financial institutions) ! Client Assets (Domestic Retail Division, ! Net Asset Accumulation (monthly average) excluding financial institutions) (Billions of yen) (Trillions of yen) 800 35 727.1 31.5 31.6 28.9 29.3 0.6 0.7 28.4 28.
Slide 9: Domestic Retail (4) Target Markets
Domestic Retail (4) (Target Markets) !Multiplier effect resulting from pursuing business in both the individual client and corporate and public sector markets Domestic Retail Division Corporate & Individual Market Public Sector ! High-net-worth Market • Regional listed companies ! Asset Builders • R
Slide 10: Global Wholesale (1) Fixed Income
Global Wholesale (1) Fixed Income Point Net Revenue !Foreign Currency Bonds and MTNs $ FHLB Global Dollar Issue – US$3 billion (Billions of yen) $ Foreign Currency Bond for Retail Investors* 35 32.5 " FY03.03 1Q 275.2 billion yen " FY03.03 2Q 249.4 billion yen (up 55% YOY) Up 40% 30 -- Common Wealth
Slide 11: Global Wholesale (2) Equity
Global Wholesale (2) Equity Point ! Sluggish Equity Market Net Revenue $ Equity Agency Transaction Value* 29.2 trillion yen (monthly average), down 5% (Billions of yen) $ Decrease in block trades due to share price decline 40 35.9 ! Net Gain on Equity Trading (Nomura Securities) 35 31.3 (Billions of
Slide 12: Global Wholesale (3) Investment Banking
Global Wholesale (3) Investment Banking Point Net Revenue ! IPO, PO* (Billions of yen) " IPO Market: 124.2 billion yen, down 52% 25 Nomura: 9.7 billion yen, down 82% 22.1 " PO Market: 236.8 billion yen, down 36% Nomura: 109.7 billion yen, down 24% " Major Issues 20 # Bank of China,Yamada Denki CB, F
Slide 13: Global Wholesale (4) Merchant Banking
Global Wholesale (4) Merchant Banking* Point Net Revenue ! Exposure in merchant banking business (Billions of yen) $ Terra Firma I 265.8 billion yen 35 33.9 $ NPF 12.8 billion yen 30 25 (Billions of yen) NPF 20 350 2.0 Terra Firma I 15 300 16.1 12.7 12.8 10 250 5 200 N.A. 314.8 0 150 265.7 259.3 265
Slide 14: Asset Management (1)
Asset Management (1) Point ! New Funds $ Nomura CRF $ 13 new funds launched for DC pension funds & variable Net Revenue annuity insurance ! Assets Under Management of NCRAM (Billions of yen) $ Sept. 30, 2001 - US$2.5 billion 14 $ Sept. 30, 2002 - US$3.8 billion (up 55% YOY) Down 2% 11.8 12 ! Assets
Slide 15: Asset Management (2) Assets Under Management and Market Share
Asset Management (2) Assets Under Management (NAM) Market Share (NAM) Stock investment trusts Bond investemnt trusts (Trillions of yen) Bond investment trusts 25 Investment advisory Others Total public investment trusts Stock investment trusts 45% 21.0 40% 19.9 0.2 19.8 39% 39% 40% 20 0.1 0.2 18.2 3
Slide 16: Non-Interest Expenses (1)
Non-Interest Expenses* (1) Other (special losses) Other Point Business and development expenses Occupancy and related depreciation !Compensation and Benefits Information processing and communications 57.7 billion yen, down 27% Commissions and floor brokerage " Down 4% YOY excluding special charge of
Slide 17: Non-Interest Expenses (2)
Non-Interest Expenses (2) !Compensation and Benefit* $ Fixed- Fixed-type expenses: 35.3 billion yen $ Variable- Variable-type expenses: 22.4 billion yen Compensation and Benefit** Benefit** (Billions of yen) Fixed-type 45 Variable-type 40.4 40 36.7 36.6 35.3 34.2 35 36.0 32.5 30 25 27.0 23.2 22.4 20
Slide 18: Appendix
Appendix • Revenue and Income by Segment (P19-20)) • Revenue and Income by Business Line (P21) • Major Differences (Segment / Income Statement) (P22) • Revenue (P23-26) • Expenses (P27) • Client Assets (P28) • Number of Accounts (P29) • Secondary Market Share Data (P30) • Primary Market Share Data (
Slide 19: Revenue and Income by Business Segment (1) (Semi-annual Base)
Revenue and Income by Business Segment (1) (Semi-annual Base) 150 (Bil. yen) 113.3 123.8 114.6 Domestic Retail 100 50 6.1 15.3 10.2 0 FY02.3 1H FY03.3 1H FY02.3 (1/2) Net Revenue 113.3 123.8 114.6 Non-interest Expenses 107.2 108.4 104.3 Income before Income Taxes 6.1 15.3 10.2 250 (Bil. yen) 220.0 2
Slide 20: Revenue and Income by Business Segment (2) (Quarterly Base)
Revenue and Income by Business Segment (2) (Quarterly Base) Units: Millions of yen Domestic Retail FY02.3 FY03.3 1Q 2Q 3Q 4Q 1Q 2Q Non-interest revenue 60,953 50,806 57,224 57,172 66,436 56,136 Net-interest revenue 1,076 467 870 537 599 605 Net revenue 62,029 51,274 58,091 57,710 67,035 56,742 Non-i
Slide 21: Global Wholesale Revenue and Income by Business Line
Global Wholesale (Revenue and Income by Business Line, Quarterly Base) Units: Millions of yen Fixed Income FY02.3 FY03.3 1Q 2Q 3Q 4Q 1Q 2Q Net revenue 20,727 23,175 19,549 27,302 43,887 32,476 Non-interest expenses 15,450 16,768 15,648 18,873 18,944 16,334 Income before income taxes 5,277 6,407 3,90
Slide 22: Major Differences (Segment / Income Statement)
Major Differences (Segment / Income Statement) Total Income before Income Taxes for 3 Business Segments: 63.2 billion yen Loss on non-designated hedging instrument -1.8 billion yen Valuation gains/losses on equity securities 10.9 billion yen Equity in gains of affiliates 0.4 billion yen Total Corpor
Slide 23: Revenue (1) Commissions
Revenue (1) (Commissions) Stock brokerage Stock brokerage Bond brokerage Commissions for Other commissions commissions (others) commissions distribution of investment (Domestic Retail) trusts (Billions of yen) 50 (Billions of yen) 46.1 90 Up 14% 80.8 5.7 80 39.6 40 2.4 70.6 15.5 70.0 34.8 34.7 70 34
Slide 24: Revenue (2) Fees from Investment Banking
Revenue (2) (Fees from Investment Banking) Equity underwriting Bond underwriting Financial Other commissions commissions advisory fees (Billions of yen) (Billions of yen) 45 25 37.6 22.9 40 37.0 Down 8% 0.3 0.7 0.7 33.9 2.8 19.6 35 20 0.1 18.6 18.3 1.4 6.7 7.1 2.4 0.5 1.0 30 15.6 7.2 14.1 3.9 0.3 15
Slide 25: Revenue (3) Asset Management and Portfolio Service Fees
Revenue (3) (Asset Management and Portfolio Service Fees) Asset Management Fees Custodial Fees (Billions of yen) (Billions of yen) 35 65 55.0 57.4 60 Down 20% 29.6 30 27.8 55 5.1 2.5 26.9 25.7 46.1 4.9 50 2.6 2.5 24.2 25 2.3 45 2.4 21.9 4.6 40 2.3 20 35 30 15 52.3 27.1 25 50.1 25.2 24.4 23.4 41.5 21
Slide 26: Revenue (4) Net Gain on Trading / Net Interest Revenue
Revenue (4) (Net Gain on Trading / Net Interest Revenue*) Bonds Gain on private equity Equity Net interest revenue and other investment/merchant banking trading** (Billions of yen) (Billions of yen) 169.3 180 175.4 175 21.4 Up 10% 36.1 150 112.4 123.3 125 34.3 130 29.5 56.5 100 88.7 60.1 66.6 15.9 6
Slide 27: Non-interest Expenses
Non-interest Expenses* Compensation Commissions and Information Occupancy Business Other Other and benefits floor brokerage Processing and and related development (special losses) communications depreciation expenses (Billions of yen) (Billions of yen) 250 239.4 400 361.2 350 332.0 93.4 200 93.8 47.
Slide 28: Client Assets (trillions of yen)
Client Assets (trillions of yen) Nomura Securities Mar. 00 Jun. 00 Sep. 00 Dec. 00 Mar. 01 Jun. 01 Sep. 01 Dec. 01 Mar. 02 Jun. 02 Sep. 02 Equity 36.4 34.8 31.6 27.5 28.3 28.9 24.9 24.8 25.1 24.9 23.6 Bonds 12.8 12.3 12.4 12.3 12.9 12.3 12.8 13.3 13.7 14.9 15.4 Stock investment trusts 4.0 3.8 3.6 3.
Slide 29: Number of Accounts
Number of Accounts (thousands of accounts) Nomura Home Trade (online trading accounts) Mar.00 Jun.00 Sep.00 Dec.00 Mar.01 Jun.01 Sep.01 Dec.01 Mar.02 Jun.02 Sep.02 188.0 283.0 349.0 461.0 584.0 686.0 778.0 860.0 936.0 1005.0 1079.0 IT Share FY01.3 FY02.3 FY03.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q No. of o
Slide 30: Secondary Market Share Data
Secondary Market Share Data Market units: trillions of yen Individual Equity Agency Transactions (monthly average) FY01.3 FY02.3 FY03.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Market 6.3 5.1 3.7 3.7 4.9 3.3 3.9 4.0 5.2 3.9 Nomura's share 25% 21% 19% 16% 16% 16% 16% 13% 20% 16% Off-floor/Off-exchange Equity Tr
Slide 31: Primary Market Share Data (Value Base)
Primary Market Share Data (Value Base) Straight Bonds * FY02.3 FY03.3 4-6 4-9 4-12 4-3 4-6 4-9 Nomura's share 19% 19% 19% 21% 20% 22% Euro-Yen Bonds ** FY02.3 FY03.3 4-6 4-9 4-12 4-3 4-6 4-9 Nomura's share 27% 23% 22% 28% 35% 24% Samurai Bonds ** FY02.3 FY03.3 4-6 4-9 4-12 4-3 4-6 4-9 Nomura's share
Slide 32: Investment Trust Data
Investment Trust Data Assets Under Management (NAM) (Trillions of yen) Mar. 00 Jun. 00 Sep. 00 Dec. 00 Mar. 01 Jun. 01 Sep. 01 Dec. 01 Mar. 02 Jun. 02 Sep. 02 Stock investment trusts 3.5 3.4 3.2 2.8 2.6 2.7 2.4 2.9 3.2 3.6 3.3 Bond investment trusts 10.7 13.2 11.7 12.3 13.3 14.5 12.9 10.9 10.4 9.2 8
Slide 33: Value at Risk
Value at Risk ! Definition ! From Apr. 2001 to Sept. 2002 " 99% confidentiality " Maximum: 4.5 billion yen " Minimum: 1.9 billion yen " 1-day holding period " Average: 2.5 billion yen " Inter-product price fluctuations considered (Billions of yen) The End of Quarter Mar.00 Sep.00 Mar.01 Jun.01 Sep.0
Slide 34: Number of Employees
Number of Employees Mar. 00 Mar.01 Jun. 01 Sep. 01 Dec. 01 Mar. 02 Jun. 02 Sep. 02 Asia/Oceania 488 486 473 476 464 468 469 462 Americas 983 835 874 893 881 827 769 753 Europe 1,319 1,370 1,380 1,449 1,430 1,381 1,346 1,352 Japan (FA, SA) 2,173 2,195 2,260 2,192 2,130 2,177 2,110 2,072 Japan (exclud
Slide 35: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com 35 35