INVAST SECURITIES CO.,LTD.

Financial Highlights(Consolidated)
4th Quarter, Fiscal Year ending Mar. 2017

Invast Securities Co., Ltd.

Contents

１．Summary of 4Q Financial Results
２．Summary of Annual Financial Results

３．Policies on shareholder returns and dividends
４．Business Highlights
５．Corporate Mission／Vision and Management

Strategies
Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved2Summary of 4Q Financial Results（Jan.-Mar.2017）

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

3Key Highlights （Jan.-Mar.2017）

 Operating revenue: JPY 1,048 million （Up 25.8% QoQ）•

ST24 – The new “Full Auto” function launched in 3Q continued to help boost overall trading
volume in 4Q. Total number of client accounts opened for the ST24 platform surpassed
100,000 in Jan 2017

•

TAETF
 Feb 2017: Renewed service by offering clients zero trading fees and higher trading
leverage (1x => 5x)
 Mar 2017: Released new “ETF auto-trading select” feature that offers various themebased investment options
 Trading volume and operating revenue doubled QoQ, but not enough to reach breakeven•

The Australian subsidiary IFS continued its growth in 4Q, posting net operating revenue of JPY
319 million (up 80.4% QoQ) and segment profit of JPY 122 million (up 338.4% QoQ)

 SG&A expenses•: JPY 893 million （Down 8.8% QoQ）

SG&A maintained low in 4Q attributable primarily to a 56.6% decrease in advertising expenses

 Ordinary income : JPY 137 million (vs JPY 150 million loss in 3Q)
Net income: JPY 73 million (vs JPY 137 million loss in 3Q)

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

4Quarterly Summary
FY ended March 2016

FY ended March 2017

１Ｑ

２Ｑ

３Ｑ

４Ｑ

１Ｑ

２Ｑ

３Ｑ

４Ｑ

Change vs.
previous
quarter

Operating revenues

969

1,025

786

1,003

924

742

833

1,048

+25.8％

Commissions earned(exchange FX, etc.)

249

274

189

256

217

162

180

151

△16.4％

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

608

641

500

626

617

503

565

829

+46.6％

Interest income

7

7

7

7

7

5

5

6

＋9.5％

Other operating
revenues

103

102

89

114

82

70

81

61

△24.3％

Financial expenses

-

-

-

-

0

2

0

1

＋35.6％Net operating revenues

969

1,025

786

1,003

924

740

832

1,047

+25.7％

Selling, general andadministrative expenses

872

890

849

862

848

866

979

893

△8.8％

Operating income (loss)

97

135

△62

141

75

△126

△146

154

-

Ordinary income (loss)

90

124

△71

137

71

△128

△150

137

-

Income (loss) before
income taxes

90

124

△71

△374

77

△128

△128

76

-

Net income (loss)

28

64

△83

△414

52

△108

△137

73

-

(Millions of yen)

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5Quarterly Selling, general and administrative expenses

ＦY ended March 2016

ＦY ended March 2017

１Ｑ

２Ｑ

３Ｑ

４Ｑ

１Ｑ

２Ｑ

３Ｑ

４Ｑ

Change vs.
previous
quarter

Selling, general andadministrative expenses

872

890

849

862

848

866

979

893

△8.8％

Trading related
expenses

209

231

242

226

212

245

327

208

△36.5％（Advertising expenses）

(107)

(117)

(150)

(110)

(112)

(154)

(223)

(96)

△56.6％

Personnel expenses

236

252

237

235

233

211

227

243

+7.1％

Real estate expenses

273

281

249

257

270

282

301

307

+1.8％

9

2

4

8

6

9

6

5

△22.6％

Depreciation expenses

89

88

88

86

88

84

80

80

＋0.7％

Tax and public charges

20

19

17

29

23

17

21

30

+38.7％

Others

32

13

9

18

14

15

13

17

＋30.5％(Millions of yen)

Clerical expenses

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6Quarterly Segment Summary
ＦY ended March 2016
(Millions of yen)

１Ｑ

ＦY ended March 2017

２Ｑ

３Ｑ

４Ｑ

１Ｑ

２Ｑ

３Ｑ

４Ｑ

Change vs.
previous
quarter

ExchangeＦＸ（Click 365）
Net operating revenues

283

287

211

297

251

186

209

158

△24.2％

Segment profit or loss

44

56

△12

72

41

△15

△23

△24

-

OTC ＦＸ（ＦＸ24・ST24・TriAutoＦＸ）
Net operating revenues

587

549

431

509

515

405

436

554

+27.2％

Segment profit or loss

120

94

△4

71

75

△61

△96

95

-

OTC ＥＴＦ（TriAutoＥＴＦ）
Net operating revenues

-

-

-

-

0

0

1

5

+224.2％

Segment profit or loss

-

-

-

-

△48

△47

△44

△31

-

Overseas Financial Service（ＩＦＳ）
Net operating revenues

89

167

131

173

144

139

177

319

+80.4％

Segment profit or loss

△69

△24

△49

△9

10

5

27

122

+338.4％

Others（Click Kabu365）
Net operating revenues

19

29

20

25

14

10

8

9

＋12.9％

Segment profit or loss

1

8

4

6

△3

△6

△9

△7

-

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved7Annual Financial Results Summary（Apr.2016-Mar.2017）

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

8Highlights （Apr.2016-Mar.2017）
 Operating revenue: JPY 3,548 million (Down 6.3% YoY)•

Launched a series of value-add services including the new ST24 “Full Auto” function
throughout the year•

IFS successfully posted its first annual profitable year while it steadily builds its customer baseof institutional clients•

While IFS’s growth and ST24 “Full Auto” led to increased trading volume, the unexpected
delay in the launch of ST24 “Full Auto” along with the industry-low spread offed for OTC FX
products dragged down both revenue and profitability. Sluggish market environment also
affected Click 365 and Click Kabu 365•

Though demonstrating steady growth, TAETF, still at its infancy, continued to fall short ofachieving breakeven SG&A expenses: JPY 3,587 million (Up 3.3% YoY)•

20.8% increase in advertising expenses YoY with the launch of ST24 “Full Auto”•

Increase in fixed cost as a result of introducing a fixed minimum monthly fee scheme with
Tradency, the technology partner for the ST24 platform Ordinary loss
Net loss: JPY 70 million: 118 million yen

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9Consolidated Financial Results Summary(Millions of yen)

FY 3/16

Year-on-yearchangeFY 3/17

3,785

3,548

△6.3％

969

711

△26.6％

2,376

2,516

＋5.9％

30

25

△16.2％

409

295△27.9％-

4-

Net operating revenues

3,785

3,544

△6.4％

Selling, general and administrative expenses

3,474

3,587

+3.3％

Operating income (loss)

311

△42

-

Ordinary income (loss)

282

△70

-

Income (loss) before income taxes

△230

△102

-

Net income (loss)

△404

△118

-

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

Other operating revenues
Financial expenses

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

FY 3/16

Year-on-yearchangeFY 3/17

3,252

2,774

△14.7％

926

670△27.6％

1,921

1,807

△5.9％

3

2

△28.4％

400

293△26.6％-

4-

Net operating revenues

3,252

2,770

△14.8％

Selling, general and administrative expenses

2,787

2,979

+6.9％

Operating income (loss)

464

△209

-

Ordinary income (loss)

475

△217

-

Income (loss) before income taxes

△37

△271

-

△211

△287

-

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

Net income (loss)

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

11Segment Summary(Millions of yen)

ＦY ended March2016

ＦY ended March
2017

Change vs.
previous quarter

ExchangeＦＸ（Click 365）
Net operating revenues

1,079

807

△25.2％

Segment profit or loss

161

△22

-

Net operating revenues

2,077

1,912

△7.9％

Segment profit or loss

281

13

△95.3％Net operating revenues

-

8

-

Segment profit or loss

-

△172

-

Net operating revenues

562

780

+38.7％

Segment profit or loss

△153

166

-

Net operating revenues

95

42△54.9％

Segment profit or loss

21

△26

-

OTC ＦＸ（ＦＸ24・ST24・TriAutoＦＸ）

OTC ＥＴＦ（TriAutoＥＴＦ）

Overseas Financial Service（ＩＦＳ）

Others（Click Kabu365）

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12Percentage of Operating Revenues Accounted for by Each Segment

The ratio of the overseas financial business (IFS)
has increased by around 2.4 times over two years
FY3/15

FY3/161%

FY3/17

3%

9%

15%
34%

56%

1%

28%

54%

■OTC FX■Overseas Financial Service
Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved

23%

22%

54%

■Exchange FX■Others

13

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

(Millions of yen)

72,000ＩＮＶ

450Operating Revenues

ＩＦＳ

400
70,000350
68,000300
250

66,000200
64,000150
100

62,00050
60,000

0
4

5

6

7

8

9

10

11

12

ＦY ended March 2016

1

2

3

4

5

6

7

8

9

10

11

12

1

2

3

ＦY ended March 2017

(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

14

Operating Revenues and Balance of Deposited Margin (Non-Consolidated)

Invast Securities(Millions of yen)
68,500(Millions of yen)
350

Balance of deposited margin

IFS (Consolidated subsidiary)(10,000 AUD)

(10,000 AUD)

8,000

180
Balance of deposited margin

Operating Revenue

Operating Revenue

68,000
300

160

7,000

67,500

140

6,000
250

67,000120

5,000

66,500200
66,000

100

4,000
80

150
65,5003,000
60

65,000

100
2,000

40

64,50050
64,00063,500

0
4

5

6

7

8
2016

9

10

11

12

1

2
2017

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

3

1,000

20

0

0
4

5

6

7

8
2016

9

10

11

12

1

2

3

2017

15

Major Management Index

FY ended March 2016

FY ended March 2017

１Ｑ

２Ｑ

３Ｑ

４Ｑ

１Ｑ

２Ｑ

３Ｑ

４Ｑ

ROE (%)

1.0

1.6

0.1

△3.7

2.0

△1.1

△2.5

△1.1

Operating and ordinary
margins (%)

9.4

12.2

△9.0

13.7

7.7

△17.4

△18.0

13.1

EBITDA (millions of yen)

180

212

17

224

159

△44

△70

218

Capital adequacy ratio (%)

1238.11230.41166.91154.21156.11096.51068.2807.2※ROE data have been annualized.
EBITDA was calculated by the formula of: Net income before taxes – extraordinary income/loss + Interest expense + Depreciation = EBITDA.

ＲＯＥ

（％）

4.0

20.0

2.0

10.0

0.0

0.0

-2.0

-10.0

-4.0

-20.0

１Ｑ

２Ｑ

３Ｑ

ＦＹ 3/16

４Ｑ

１Ｑ

Operating and ordinary margins

（％）

２Ｑ

３Ｑ

FY 3/17

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

４Ｑ

１Ｑ

２Ｑ

３Ｑ

ＦＹ 3/16

４Ｑ

１Ｑ

２Ｑ

３Ｑ

４Ｑ

FY 3/17

16

Policies on Shareholder
Returns and Dividends

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

17

Policies on Shareholder Returns and Dividends◆Dividend policy (Policy effective as of FY3/16)
Invast Securities will pay dividends at either a consolidated dividend payout ratio of 30% or
a consolidated dividend on equity ratio (DOE) of 4% (annual), whichever is higher.
◆Dividend status◆Dividends FY3/17

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

Interim dividends (Yen)

0.0

0.0

0.0

40.0

36.0

Year-end dividends (Yen)

30.0

195.0

71.0

40.0

36.0

Yearly (Yen)

30.0

195.0

71.0

80.0

72.0

Net income(Millions of yen)

600

3,931

496

△404

△118

Total dividend(Millions of yen)

187

1,137

416

469

422

Dividend payout ratio(%)

32.0

30.2

83.4

―

―

ROE (%)

5.9

32.0

4.0

―

―

DOE (%)

1.9

9.6

3.3

4.1

4.0

Dividend yield(%)※

2.7

14.8

6.1

5.9

5.5

36yen

Interim dividend

Year-end dividend 36yen (projected)■Year-end dividends■Interim dividends

(yen)
200

160

120
195

(projected)

80
40
40

0

36

71
9

30

40

36

FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17※Calculated using the closing price at the end of each fiscal year

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

18Change in Dividend Policy (Policy effective from April 1st, 2018)

 Dividend policy
・BeforeDividends twice a year: interim and year-end dividends
Consolidated dividend payout ratio of 30% orConsolidated dividend on equity ratio (DOE) of 4% (annually).
The higher ratio will be applied to dividends.
・AfterDividends twice a year: interim and year-end dividends
Consolidated dividend payout ratio of 30% orConsolidated dividend on equity ratio (DOE) of ２% (annually).
The higher ratio will be applied to dividends.
※The total annual dividend for the fiscal year ended March 31, 2018 is undecided at this time.

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

19Topics

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved20Topics2016
Apr.

“TriAuto ETF” service started

Jun.

【TriAuto FX】 Added new feature “Range Trailing”

Sep.

【ST24】Release of the ST24 “Full Auto” Function

Sep.

“IVAST Mission Project”（※）started

Oct.

Establishment of a Data Science Department

Dec.

【TriAuto FX】 Release of the “Range Focus” Function

Dec.

Invested in Southeast Asia fund operated by Spiral Ventures

2017
Jun.

【ST24】The total number of accounts exceeded the 100,000 markMar.

Invested in venture funds operated by 500 Startups

Mar.

Invast Global named Best Specialist Prime Broker at the 2017 HedgeWeek Global Awards※Mission Project: Customers trading using INVAST SECURITIES’ FX Services earn social contribution points according to their trading volume.
They can use these social contribution points to donate to accredited NPOs selected by INVAST, or exchange them for merchandise
supporting social contributions.

Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved21

【ST24】The total number of accounts exceeded the 100,000 markIn January 2017 the total number of “ST24” accounts exceeded the 100,000 mark.

In September 2016 we released “Full Auto” function.
“Full Auto” is function for constant automatic selection and implementation of a favorable strategy
in order to improve investment management results.

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

22Invested in venture funds operated by 500 Startups
500 Startups
Based out of Silicon Valley USA, 500 Startups is the world’s most active early-stage venture
fund with investments in over 1,500 companies in 50 countries, offering paths to success forstartup companies with the likes of Twilio, Credit Karma, and Grab.
500 Startups also brings best practice to the startup ecosystem through its seed-accelerator
program, offering mentorship to highly motivated entrepreneurs and startups.
The investment will allow Invast to build close relationship with 500 Startups, through which
Invast will benefit from 500 Startups’ domain expertise, global footprint, and extensive industry
network in seeking out opportunities for strategic partnership with innovative startup
companies.

Overview of Fund
Fund Name

500 Mobile Collective L.P.

Fund Management Company

500 Startups Management Company, L.L.C.

Investment Fields

Primarily in early-stage companies principally focused in the mobile technology field

Fund Name

500 Durians II L.P.

Fund Management Company

500 Startups Management Company, L.L.C.

Investment Fields

Primarily in early-stage companies operating directly or indirectly in South East Asia
and which are principally focused in the information technology, communications,and internet technology fields

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

23Invast Global named Best Specialist Prime Broker
at the 2017 HedgeWeek Global Awards
Invast Global has been voted HedgeWeek Global Awards
2017 ‘Best Specialist Prime Broker’.
The global awards are presented annually to top
performers in various financial services categories througha peer review system, consisting of the HedgeWeekreadership.
The award comes as Invast Global announces record
revenues and turnover in 2016 for its global multi-asset
prime services facility PurePrime.

hedgeweekawards
http://www.hedgeweek.com/awards「HedgeWeek Global Awards 2017」IFS

CEO Gavin White（Photo right）

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

24Mission/Vision andManagement Strategy

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

25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

26

The Solutions We Provide
Our Proposal
Automated FX/ETF trading using Fintech ST24 Full Auto———

Over 6,000 strategies are constantly monitored, and strongly performing strategies that match theconditions provided are automatically selected
Each strategy is an automated trading program for algorithmic trading collected from around the globe
The trading results of each transaction are all disclosed, and performance is only based on actual past
results

 TriAuto FX Range Trailing—

Multiple buy orders and sell orders can be set simultaneously within a predetermined price band (pricerange) to automatically finalize profits and repeat new orders as long as the price fluctuates within thatprice band.

 TriAuto ETF Auto-trading select—A simple and easy way to engage in ETF trading, recommended for beginners. Once activated, the autopilot function will commence trading based on selected investment themes and trading logic.

TriAuto ETF「Auto-trading select」↓↓↓
httphttps://www.invast.jp/etf/autoselect/
Copyright© INVAST SECURITIES CO.,LTD. All Rights Reserved27

Management Strategies(10,000 users) Expansion of existing businesses + Ongoinglaunch of new businesses
New businesses
Existing businesses

 Continue to launch financial solutions that
resolve money-related issues for a variety ofpeople as new businesses

Existing businesses
Investment in “automated trading using fintech”

New businesses⁃ Enhancement of ST24 Full Auto functionality⁃ Ongoing launch and enhancement of new strategies⁃ Ongoing improvement of contract precision andtransparency⁃ Launch of new services centered on automatedtradingFurther expansion of the rapidly growing overseas
financial business⁃ Seeking geographical expansion⁃ Improvement of financing capability

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

Facing the challenge of launching new financial
solutions⁃ Asset building solutions using ETFs
⁃ Commercialization of solutions to social issues
 Student loan repayments⁃ Seeking businesses centered on solutions to moneyrelated issues

Facing challenges with outside professionals⁃ Expansion of network through venture capital fundinvestment⁃ M&A, capital and operating alliances, strategic
partnerships

28

Corporate GuidanceInvast Securities Co., Ltd. (as of March 31th 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 Reserved29