INVAST SECURITIES CO.,LTD.

Financial Highlights(Consolidated)
3rd Quarter, Fiscal Year ended March 31, 2018

Invast Securities Co., Ltd.

Contents

１．Summary of ３Q Financial Results
２．Annual Financial Results Summary
３．Policies on shareholder returns and dividends
４．Topics
５．Mission/Vision and Management Strategies

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved2Summary of ３Q Financial Results（Oct.-Dec. 2017）

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved3Quarterly Financial Highlights（key points from 3Q results, fiscal year ended March 31, 2018）

Main takeaways from financial results of 3Q FY2018 (Oct-Dec 2017) 1.018 billion yen in operating revenues (+22.2% from same quarter of previous year)••

Domestic financial service (INV) posted 733 million yen in net operating revenues (+11.8% fromsame quarter of previous year) and segment profit of 42 million yen (-174 million yen from samequarter of previous year)
Overseas Financial Service (Australian subsidiary IFS) posted 271 million yen in net operating
revenues (+53.1% year-on-year), and segment profit of 63 million yen (+127.8% year-on-year)➢ Trading profit was 821 million yen, +45.1% from the same quarter of the previous year. Subsidiary IFS
continued to perform well, and earnings contributions from “TriAuto ETF” gained momentum➢ The sluggish market for FX market “Click 365” resulted in 139 million yen in commissions earned, 22.9% from the same quarter of the previous year

 895 million yen in sales, general and administrative expenses(-8.5% from same quarter of previous year)••

Advertising expenses decreased compared to last year (-38.3% year-on-year) when large-scale advertising
investments were made for ST 24
Depreciation decreased (-12.5% year-on-year) due to depreciation of client-related assets having been
completed 106 million yen in operating income (-146 million yen from same quarter of previous year)
91 million yen in ordinary income (-150 million yen from same quarter of previous year)
120 million yen in quarterly net income attributable to parent
company shareholders (-137 million yen from same quarter of previous year)•

Posted 37 million yen of extraordinary profit for consumption tax refunds at subsidiary IFS

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

4Quarterly Summary
FY 3/17

FY 3/18(Millions of yen)

Year-onYearchange

１Ｑ

２Ｑ

３Ｑ

４Ｑ

１Ｑ

２Ｑ

３Ｑ

Operating revenues

924

742

833

1,048

943

989

1,018

+3.0％

+22.2％

Commissions earned(exchange FX, etc.)

217

162

180

151

146

147

139

△5.1％

△22.9％

Trading profit and loss
(over-the-counter FX)

617

503

565

829

736

790

821

+3.9％

+45.1％

Interest income

7

5

5

6

11

13

25

＋84.2％+341.3％

Other operating
revenues

82

70

81

61

48

38

33

△13.3％△59.1％

Financial expenses

0

2

0

1

4

8

17

＋105.9％+2,135.1％

Net operating revenues

924

740

832

1,047

938

981

1,001

+2.1％

+20.3％

Selling, general andadministrative expenses

848

866

979

893

843

868

895

+3.1％

△8.5％

Operating income (loss)

75

△126

△146

154

95

112

106

△5.4％

―％

Ordinary income (loss)

71

△128

△150

137

98

108

91

△15.6％―％

Income (loss) before
income taxes

77

△128

△128

76

103

108

128

+18.7％―％Net income (loss)

52

△108

△137

73

94

101

120

+18.8％―％

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

４Ｑ

ChangevsPrevious
Quarter5Quarterly Selling, general and administrative expenses

FY 3/17

FY 18/３(Millions of yen)

Year-onYearchange

１Ｑ

２Ｑ

３Ｑ

４Ｑ

１Ｑ

２Ｑ

３Ｑ

848

866

979

893

843

868

895

+3.1％

△8.5％

Trading related expenses

212

245

327

208

177

201

234

+16.1％△28.6％(Advertising expenses)

(112)

(154)

(223)

(96)

(83)

(116)

(137)

+18.8％△38.3％

Personnel expenses

233

211

227

243

247

254

252

△0.6％

+11.2％

Real estate expenses

270

282

301

307

291

291

296

+1.5％

△1.9％

(IT system expenses)

(224)

(234)

(246)

(248)

(236)

(231)

(232)

+0.5％

△5.6％

6

9

6

5

6

7

8

+8.9％

+18.9％

Depreciation expenses

88

84

80

80

78

80

70

△12.7％△12.5％Tax and public charges

23

17

21

30

26

21

24

+13.3％+11.7％

Others

14

15

13

17

15

12

10

△16.1％△25.9％

Selling, general andadministrative expenses

Clerical expenses

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

４Ｑ

ChangevsPrevious
Quarter6

Quarterly Segment Summary

FY 3/17

FY 3/18(Millions of yen)

１Ｑ

２Ｑ

３Ｑ

４Ｑ

１Ｑ

２Ｑ

３Ｑ

４Ｑ

ChangevsPrevious
QuarterYear-onYearchangeDomestic Financial Service（ＩＮＶ）
Net operating revenues

782

603

655

728

710

753

733

△2.7％

+11.8％

Segment profit or loss

64

△131

△174

31

40

67

42

△36.9％―％

Overseas Financial Service（ＩＦＳ）
Net operating revenues

144

139

177

319

229

230

271

+17.6％+53.1％

Segment profit or loss

10

5

27

122

54

44

63

+42.2％+127.8％

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved7Annual Financial Results Summary（Apr.-Dec. 2017）

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

8Consolidated Financial Results Summary(Millions of yen)

FY 3/173Q

FY 3/18
3Q

Year-on-Yearchange

2,500

2,951

+18.0％

560

432△22.8％

1,686

2,348

+39.2％

1950+165.6％233

119△48.8％

329+800.1％

Net operating revenues

2,497

2,921

+17.0％

Selling, general and administrative expenses

2,694

2,607

△3.2％

Operating income (loss)

△197

313

―

Ordinary income (loss)

△207

299

―

Income (loss) before income taxes

△179

340

―

Net income (loss)

△192

316

―

Operating revenues
Commissions earned (exchange FX, etc.)
Trading profit and loss (over-the-counter FX, etc)
Interest income

Other operating revenues
Financial expenses

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

9Non-Consolidated Financial Results Summary(Millions of yen)

FY 3/173Q

FY 3/18
3Q

Year-on-Yearchange

2,045

2,227

+8.9％

533

345

△35.2％

1,277

1,726

+35.1％

131+1,536.0％

232

123

△46.8％

329+800.1％

Net operating revenues

2,042

2,197

+7.6％

Selling, general and administrative expenses

2,283

2,046

△10.4％

Operating income (loss)

△241

150

―

Ordinary income (loss)

△237

149

―

Income (loss) before income taxes

△230

153

―

Net income (loss)

△243

129

―

Operating revenues
Commissions earned (exchange FX, etc.)
Trading profit and loss (over-the-counter FX, etc)
Interest income
Other operating revenues
Financial expenses

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

10Operating Revenues and Balance of Deposited Margin (Consolidated)
ＩＮＶ(Millions of yen)

Operating Revenues

ＩＦＳ(Millions of yen)

76,000450

74,000400

72,000350

70,000300

68,000250

66,000200

64,000150

62,000100

60,00050

58,000

0
10

11

12

1

2

3

ＦY 3/17

4

5

6

7

8

9

10

11

12

ＦY 3/18(Notes) 1. The above figures are consolidated with a three-month delay because the consolidated subsidiary company IFS
ends its financial year on December 31.
2. The operating revenues, etc. of IFS are converted into yen using the monthly average exchange rate.

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

11

Major Management Index

FY 3/17

FY 3/18

１Ｑ

２Ｑ

３Ｑ

４Ｑ

１Ｑ

２Ｑ

３Ｑ

ROE (%)

2.0

△1.1

△2.5

△1.1

3.7

3.8

4.1

Operating and ordinary
margins (%)

7.7

△17.4

△18.0

13.1

10.5

11.0

9.0

EBITDA (millions of yen)

159

△44

△70

218

177

188

161

Capital adequacy ratio (%)

1156.11096.51068.2

807.2

760.8

806.4

769.5

４Ｑ

※ROE data have been annualized.
EBITDA was calculated by the formula of: Net income before taxes – extraordinary income/loss + Interest expense + Depreciation = EBITDA.

ＲＯＥ

（％）

（％）
20.0

6.0
4.0

Operating and ordinary margins

10.0

2.0
0.0

0.0
-2.0

-10.0

-4.0

-20.0

３Ｑ

４Ｑ
17/3

１Ｑ

２Ｑ
18/3

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

３Ｑ

３Ｑ

４Ｑ
17/3

１Ｑ

２Ｑ

３Ｑ

18/3

12

Policies on Shareholder Returns
and Dividends

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

13

Policies on Shareholder Returns and Dividends◆Dividend policy (Policy effective as of FY3/18)
Invast Securities will pay dividends at either a consolidated dividend payout ratio of 30% or
a consolidated dividend on equity ratio (DOE) of 2% (annual), whichever is higher.
◆Dividend status◆Dividends FY3/18
Interim dividend

17yen

Year-end dividend

TBD

(yen)
200
year-end dividends
Interim dividends
160

120
195

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18Interim dividends (Yen)

0.0

0.0

40.0

36.0

17.0

Year-end dividends (Yen)

195.0

71.0

40.0

36.0

TBD

Yearly (Yen)

195.0

71.0

80.0

72.0

Net income(Millions of yen)

3,931

496

△404

△118

Total dividend(Millions of yen)

1,137

416

469

422

Dividend payout ratio(%)

30.2

83.4

―

―

ROE (%)

32.0

4.0

―

―

DOE (%)

9.6

3.3

4.1

4.0

Dividend yield(%)※

14.8

6.1

5.9

5.5

80
40
40

36

71
40

36
17

0
FY3/14

FY3/15

FY3/16

FY3/17

FY3/18※Calculated using the closing price at the end of each fiscal year

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

14Topics

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

15Release of Money Hatch The first accumulation-type investment
service in the world that lets you begin investing with zero funds

What is “Money Hatch”?
Money Hatch is an accumulation-type investment service that makes it possible to start investing with nofunds by using points earned from credit cards and other such consumer rewards programs as principal
for investments. Funds accumulated various ways are regularly invested by trading of ETFs (exchangetraded funds) on a weekly basis, and realized gains are then re-invested.

Start investing with no funds—using points
•
•
•



Diversified worldwide investment, automatically
•
•
•
•



Automatic cash conversion of points earned at a 1% rate on purchases made with Invast-issued credit
cards
Cash back on trading through services offered by Invast
Automatic transfers from services accounts and bank accounts opened at Invast

Invest in ETFs (exchange-traded funds) in Japan and worldwide
With “Global Stock ETF Automated Trading,” configure an automated trading style when getting started
on Money Hatch
Trading uses contracts for difference (CFDs), so there is no foreign exchange risk on investment principal
Investing is possible in small amounts starting with 0.1 units, with no service charge

Automated trading with accumulated investments•

Complete automation that follows movements in market prices to buy low, sell high, buy more when
prices of holdings fall, and re-invest profits

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

16Invast Card
 Points on purchases automatically convert to cash and ETF investments
each month••Fully automated conversion requires no procedures whatsoever to convert points into cash
Points converted to cash automatically become principal for ETF investments

Points earned at 1.00% rate on purchases•

Earned at 1.50% or more when purchasing on JACCS Mall₋

Never any annual fees if using the card••No fees the first year
No fees every subsequent fiscal year if at least one purchase is made with the card the previous fiscal
year

Extensive lineup of insurance
•
•
•



JACCS Mall features more than 550 popular stores
Amazon.co.jp
Rakuten Ichiba/Rakuten Travel
Yahoo! Auctions
Yahoo! Shopping
ZOZOTOWN
iTunes Store

Includes domestic travel insurance (insured up to 10 million yen against death and disability, andresidual disability)
Card theft insurance
Online security service

No annual ETC card fees, family cards also have no annual fees when used forpurchases

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

17Effects of Money Hatch yield major growth for TriAuto ETF
Since the release of Money Hatch in July 2017

Number of accounts with deposits: roughly 7.5 times increase

Margin deposits: 5.9 times increase
8,000

2,500,000

Margin
預り証拠金
deposits

6,000

Amount of margin deposits (non-disclosure)

Number of accounts with deposits (non-disclosure)

7,000

Accounts

残有口座
with

2,000,000

deposits

Release of
Money Hatch on
July 24, 2017

4,000

預
り
証
1,500,000
拠
金
額

3,000

1,000,000
◠

5,000

非
開
示
◡
500,000

2,000
1,000
0

0
4月
Apr

5月
May

6月
Jun

7月
Jul

8月
Aug

9月
Sep 10月
Oct 11月
Nov 12月
Dec

2016年
2016

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

1月
Jan

2月
Feb

3月
Mar

4月
Apr

5月
6月
May Jun

7月
Jul

8月
Aug

9月 10月Sep
Oct 11月
Nov 12月
Dec

2017年
2017

18

Positive trading profit/loss balance per-customer for “TriAuto ETF”

Per-customer profit/loss(total of profit/loss on settlement and profit/loss on valuation)+77,777 yen (at end of December 2017)
Per-customer profit/loss graph(yen)
140000120000Overall profit/loss

Realized profit/loss

Valuation profit/loss

10000080000

Per customer
profit/loss

60000＋77,777 yen

40000
20000
0
-20000-40000-60000
4

5

6

7

8

9

10

11

12

1

2

3

2016

4

5

6

7

8

9

10

11

12

2017

* Data is TriAuto ETF profit/loss data from April 27, 2016 (not including Money Hatch).
Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

19

2017 Highlights of Invast Financial Services• Business– Client deposits increased 47% YoY– Turnover :FX +31%, Index CFD +277%, DMA CFD +51% (2017 vs 2016)– Total active institutional clients increased by 89% (Dec 2016 vs Dec 2017)• Governance－Appointment of Michael Cunningham as Non-Executive Director
Michael is a leading figure in the financial markets industry
in Asia Pacific, having enjoyed a 35 year Investment Banking
career including serving as Group Treasurer forGoldman Sachs Australia/New Zealand,
Chief Risk Officer - Oceania for Bank of Tokyo-Mitsubishi UFJ
and Country Treasurer at Citigroup,
across various ASEAN jurisdictions.
Most recently, as a Partner at KPMG, Michael has earned
a reputation globally as an expert in Risk and Regulatory issues,particularly as they pertain to the Asia Pacific region.

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved20

2017 Highlights of Invast Financial Services

FX Global Code Executive Cocktail NightIn July 2017 IFS cemented its place as an industry
leader by hosting an exclusive Summit to promote
the FX Global Code of Conduct.
The event featured 50 leading Investment
Banking executives from around the world
and included a keynote speech from special guest,
Deputy Governor of the Reserve Bank of Australia,
Guy Debelle.

Hedgeweek Global Award for Best Specialist
Prime Broker 2017
Shortlisted/received commendations inindustry-leading awards
FXWeek Global Awards, HFM Global Awards,
FinanceMagnates Global Awards 2017

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

21

【IFS】Trading Income・Clients deposit（1,000AUD）

Client Deposit

Operating Revenue（1,000AUD）

12,000180

Client Deposit+47%（YoY）

160

10,000
140

8,000

120

100
6,000
80

4,000

60

40
2,000
20

0

0
10

11

12

1

2

3

ＦY 3/17

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

4

5

6

7

8

9

10

11

12

ＦY 3/18

22

Mission/Vision andManagement Strategy

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

23Mission / Vision
Mission Why we do business
Making the world a better place
To make the world a better place by providing people all across the globe with financial
solutions that enable happier lives.
The “better place” we envisage is a world where people who work hard can become wealthy, a good society inwhich talented and motivated students do not need to abandon options due to financial reasons, and a society
in which anyone can build assets to become happy.
Our mission is to create solutions that resolve financial issues in the life planning of people across the globe, tosupport people who face challenges, and to help more people grab opportunities to enrich their lives. We wantto contribute to the creation of a better world through the happiness of the people of the world provided fromthe aspect of finance.

Vision What we want to achieve
Creating financial solutions with a global base of 10 million
users by 2025
We aim to create solutions for resolving financial issues starting with asset management and extending to avariety of areas of people’s lives such as raising children, education, gaining employment, getting married andbuilding assets. We want to be a global company with customers across the globe in which talented staff
gathered from around the world fulfill their responsibility as true professionals to discuss, decide upon andexecute our vision day to day. The first step is to create financial solutions with a global base of 10 million users
by 2025.

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

24

Business Strategy to Achieve Our Vision

STAGE 1: 2017-2019
Boost profitability of

STAGE 2: 2020-2022
Continuous businessexisting business
Create new businessgrowthSeek group synergies

Investment
periodGrowthperiodSTAGE 3: 2023-2025
Be a global company with 10
million users worldwide

Reap therewards

Business Strategy (Stage 1: 2017-2019)(1) Boost profitability of existing business・Strengthen capability to deliver our own unique value-added services(automated trade solutions utilizing technology)
・Prioritize investments in high-profitability businesses with growth potential
・Cost structure improvements such as integrating systems and doing production in-house(2) Create new business・Enter new business domains, create second and third main revenue sources after FX・Seek out businesses that focus on solutions involving people’s money (school loan repayment issues)
・M&A, business partnerships, and other arrangements through VC fund investments(3) Other
・Build our corporate brand・Bring in top talent that can fuel our global expansion, and strengthen our organizational
human resources base

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved25Corporate GuidanceInvast Securities Co., Ltd. (as of Dec 31, 2017)■ Company name

： INVAST SECURITIES CO., LTD.

■ Head office： 1-6-21 Nishishinbashi, Minato-ku, Tokyo Japan■ Established： August 10, 1960

■ Paid in capital： 5,965,086,800 yen■ Market listing： JASDAQ (Code: 8709) (*1) Listed on March 6, 2006

■ President： President and CEO Takeshi Kawaji■ Licenses

Financial Instruments Business Operators (Type 1/ Type 2), Investment Advisory： and Agency BusinessDirector-General of Kanto Local Finance Bureau (Kinsho) No. 26■： Tokyo Financial Exchange

Membership

NBF Toranomon Building

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

26

Disclaimer

・The purpose of the information in this document is to inform, and not to solicit investments.
・The information in this document includes future forecasts. There are various risks anduncertainties inherent in these future forecasts, and the actual future results may differ
greatly from what the forecasts predict or suggest.
・All possible measures have been taken to ensure the accuracy of the information in thisdocument, but the information is only what was available at the time the document was
created and we do not guarantee that it is complete, accurate, applicable, useful, etc.

・Anyone using this information to make decisions does so at their own risk; Invast Securities
assumes no responsibility whatsoever.

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved27