FY2013 3Q Financial Performance - GCA Global · • Japanese companies remain acquisitive for their...
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Transcript of FY2013 3Q Financial Performance - GCA Global · • Japanese companies remain acquisitive for their...
GCA Savvian CorporationFinancial Results for FY2013 3Q (January 1 to September 30, 2013)
Presented October 30, 2013
(TSE 1 :Ticker 2174)GCA Savvian Group Corporation changed its business name to GCA Savvian Corporation
Overview of 2013 3Q Results
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Revenue and EBIT increased significantly from prior year to 18.5 billion yen and 3.7 billion yen, respectively. Revenue became 240% of prior year due particularly to the recoveries of the preferred share investments by the mezzanine fund.
On a fund un-consolidated basis, both revenue and EBIT surpassed the same period last year with the strong performance by the US region, which recorded 2 billion yen during the last three months.
With increasing recoveries of mezzanine investments, success fees were realized. Further success fees can be expected in future.
Due to the Abenomics effect, sentiment of corporate executives is improving, and our pipeline is shifting upward. Cross-border M&As by Japanese companies are expected to increase. (See the slide 9)
Mid-year dividend of 5 yen (Record date is June 30, 2013).Year-end dividend is expected to be at least 5 yen (Record date is December 31, 2013).
2013 3Q Financial Performance
Notes:(1) Foreign exchange rates for FY2013 3Q Actual Average: ¥96.71/US$ and ¥149.39/GBP
Foreign exchange rates for FY2012 3Q Actual Average: ¥ 79.38/US$ and ¥125.22/GBP(2) Foreign exchange rates for FY2012 Actual Average: ¥79.83/US$ and ¥126.50/GBP 3
(in ¥MM)Fund Consolidated FY2012 Actual
Actual (1)
FY2013 3Q % Margin FY2012 3Q % Margin Change FY2012 % MarginRevenue 18,549 7,830 136.9 % 10,813Operating Profit 3,764 20.3% 2,134 27.3% 76.4 % 2,746 25.4%Net Income 836 4.5% 652 8.3% 28.2 % 1,259 11.6%
Fund UnconsolidatedActual (1)
FY2013 3Q % Margin FY2012 3Q % Margin Change FY2012 % MarginRevenue 6,954 6,804 2.2 % 9,555Operating Profit 1,302 18.7% 1,192 17.5% 9.2 % 1,588 16.6%Net Income 833 12.0% 642 9.4% 29.8 % 1,248 13.1%
Actual (2)
Actual (2)
With the increase in the US advisory revenue along with the 5 recoveries of mezzanine investments, revenue and EBIT increased significantly on a fund consolidated basis.Even on a fund un-consolidated basis, due to the success fees from the mezzanine fund, both revenue and EBIT increased from the same period last year.
2013 3Q Financial Performance Detail
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(in ¥MM) Actual (1) Actual (2)
FY2013 3Q % Margin FY2012 3Q % Margin Change FY2012 % MarginRevenueAdvisory Japan 2,665 2,987 (10.8)% 4,395 US 2,970 3,028 (1.9)% 4,065Due Diligence 220 206 6.7 % 346Asset Management 1,100 583 88.6 % 749 Fund Unconsolidated 6,954 6,804 2.2 % 9,555Revenue from Fund 12,694 1,598 694.4 % 1,996Elimination (1,100) (572) 92.2 % (738) Fund Consolidated 18,549 7,830 136.9 % 10,813
EBIT Fund Unconsolidated 1,302 18.7 % 1,192 17.5% 9.2 % 1,588 16.6% Fund 2,462 942 161.4 % 1,158 Fund Consolidated 3,764 20.3% 2,134 27.3% 76.4 % 2,746 25.4%
Net Income 836 4.5 % 652 8.3% 28.2 % 1,259 11.6%
Notes:(1) Foreign exchange rates for FY2013 3Q Actual Average: ¥96.71/US$ and ¥149.39/GBP
Foreign exchange rates for FY2012 3Q Actual Average: ¥ 79.38/US$ and ¥125.22/GBP(2) Foreign exchange rates for FY2012 Actual Average: ¥79.83/US$ and ¥126.50/GBP
The US recorded 2 billion yen revenue just for the 3Q, and is catching up with the last year rapidly. For Japan region, the success fees from the mezzanine fund contributed to the increases in revenue and EBIT.
Quarterly Financial Performance
Notes:(1) Foreign exchange rate for FY2011 Actual Average: ¥ 79.84/US$ and ¥128.06/GBP(2) Foreign exchange rate for FY2012 Actual Average: ¥79.83/US$ and ¥126.50/GBP(3) Foreign exchange rate for FY2013 3Q Actual Average: ¥96.71/US$ and ¥149.39/GBP
3Q (3-month period) revenue was 3.37 billion yen which is the highest since 4Q 2010.
(in ¥MM) 2011 (1)
4Q 1Q 2Q 3Q 4Q 1Q 2Q 3QRevenueAdvisory Japan 981 1,304 861 822 1,408 883 835 947 US 798 533 833 1,662 1,037 353 561 2,056Due Diligence 155 124 72 10 140 90 73 57Asset Management 187 184 193 206 166 159 627 313 Fund Unconsolidated 2,121 2,145 1,959 2,700 2,751 1,485 2,096 3,373Revenue from Fund 1,579 440 403 756 397 9,393 3,270 31Elimination (187) (184) (193) (195) (166) (159) (627) (313) Fund Consolidated 3,513 2,401 2,169 3,261 2,982 10,719 4,739 3,091
EBIT: Fund Unconsolidated 208 488 240 464 396 (68) 237 1,133EBIT: Fund 1,381 246 196 500 216 2,651 108 (297)EBIT: Fund Consolidated 1,589 734 436 964 612 2,583 345 836
Net Income 101 302 99 251 607 5 145 686
2012 (2) 2013 (3)
Strong Balance Sheet
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Notes:(1) Ex-rate as of Dec 31, 2012: ¥86.58/US$ and ¥139.53/GBP.(2) Ex-rate as of September 30, 2013: ¥97.75/US$ and ¥158.01/GBP.(3) Accounts impacted by Fund Consolidation.
(in ¥MM) Fund Consolidated Fund UnconsolidatedAccounts 2012/12(1) 2013/9(2) 2012/12 (1) 2013/9(2)
Cash and Cash Equivalent 5,556 5,206 4,781 4,379Accounts Receivable 1,033 942 1,033 1,603Operational Invest Security (3) 15,491 6,503 255 303Operational Invest Loan (3) 10,589 500 240 11Others 1,128 586 1,010 580
Current Assets 33,799 13,738 7,321 6,877Furniture etc. 235 262 235 262Investment Sec. 251 273 251 273Others 1,079 1,171 1,077 1,171
Fixed Assets 1,565 1,707 1,565 1,707Total 35,364 15,445 8,886 8,585Income Tax Payable 488 362 488 362Others 2,418 1,566 2,407 1,700
Liabilities 2,906 1,929 2,895 2,062Capital 7,644 7,968 7,580 7,900Treasury Stock (2,000) (2,000) (2,000) (2,000)Exchange Valuation 412 621 411 621Minority Interest (3) 26,402 6,925
Net Assets 32,458 13,515 5,991 6,522Total 35,364 15,445 8,886 8,585
Actual Capital Ratio→ 76%
The acquisition of the treasury shares in 2012 improved the capital efficiency significantly. The ROE in 2012 was 22%.By recoveries of mezzanine investments, Minority Interest declined and the net assets decreased accordingly.
M&A Advisory Ranking - Japan
Ranked No.4 for FY2013 3Q
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Notes:Source: mergermarket (Deal Announcement Base)
Deal Size No. ofAdvisor US$ mil. Deal
1 Nomura 12,213 442 Mizuho 3,782 413 Mitsubishi UFJ Morgan Stanley 31,422 304 GCA Savvian 5,597 275 Daiwa 6,833 246 Sumitomo Mitsui FG 13,947 227 Deloitte 1,856 208 KPMG 1,589 179 Goldman Sachs 19,656 15
10 PwC 1,398 13
FY2013 3Q Financial Advisors toJapanese M&A : Number of Deals
Notable Transactions
September 2013
Advised Toray Industries, Inc. on acquisition of
Zoltek Companies,Inc.
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Advised Index Corporation on its reorganization.
Advised complex transactions by leveraging our strengths:
September 2013June 2013
Advised Hitachi,LTD. on business integration in the thermal power
generation systems field with Mitsubishi Heavy Industries,LTD. .
Value
Number
Trillion Yen
Increasing Cross-border M&A by Japanese Company
• Transactions during July – September increased to 166 or 30% as compared with the same period last year. The transaction value doubled to 3 trillion yen .
• Japanese companies remain acquisitive for their global expansion.
Source) Nikkei News Paper (Recof)
Strategic Business Alliance with ICICI Securities, Ltd.
Mumbai
Tokyo
• Entered into the strategic business alliance with ICICI Securities Ltd., a wholly-owned subsidiary of ICICI Bank Ltd, a largest private sector bank.
• ICICI Securities’ extensive network and information will enable us to provide greater Indian M&A information to our clients.
About ICICI Group
ICICI Bank Limited• Established 1955,the second largest bank in India• Stock Exchange:Bombay, New York• Own subsidiaries including securities, life insurance, and asset management etc.
About ICICI Group
ICICI Securities, Ltd.• A wholly-owned subsidiary of ICICI Bank, Ltd. • Employees at Investment banking : 70• Locations:Mumbai, Delhi, New York, Ruwi (Oman), Singapore
About ICICI Group
Ranked No 1 and No 2 by transaction value and transaction count,respectively, in the middle market where Indian companies involved (transaction value of USD 5 – 250 million)
Deal Size No. ofAdvisor US$ mil. Deal
1 ICICI Securities 854 122 KPMG 798 83 Kotak Investment Banking 609 84 Ambit Corporate Finance 528 65 Morgan Stanley 523 156 Ernst & Young 456 57 Axis Capital limited 436 68 Avendus Capital 368 79 Barclays 358 2
10 Deloitte 340 8
FY2013 3Q Financial Advisors toIndian M&A : Rank Value
About ICICI Group
Comparison ICICI Bank and Kotak Mahindra Bank- Much greater network, asset size, ranking than Kotak in India
INR 1,158bil (1,737 billion yen)INR 6,748bil (10,122 billion yen)Asset Size
(FY2013.03)
INR 518bil (777 billion yen)INR 1,134bil (1,701 billion yen)Market Cap
No. 28No. 8Brand Ranking *
4373,514Number of Branch
INR 22bil (33 billion Yen)INR 164bil (246 billion yen)Revenue
(FY2013.03)
Kotak Mahindra BankICICI Bank
* Indian Brand Ranking Survey conducted in July 2013 by The Economic Times in India
Notes:(*) Large represents transaction fee greater than ¥0.1bn, Mega represents transaction fee greater than ¥1bn
Ratio of Large Deal
Number of Professionals
2011 2013 3Q2010 2012
Transaction Size and Number of Professionals
Large *43%
Others57%
Large *41%
Large *29%
Large *58%
Others59% Others
39% Others42%
(Unit : Person)
Mega *32%
Number of Professionals FY2012 FY2013 FY20131Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q End
Advisory Japan 75 80 80 78 77 78 76 75Advisory US 65 67 65 65 65 62 64 65Advisory Europe 2 2 1 1 1 1 1 1Due Diligence 30 31 31 31 29 30 30 31Asset Management 11 11 11 11 10 10 10 10
183 191 188 186 182 181 181 182
The ratio of large transaction became the same level as last year.
Success Fee from Fund that Mezzanine Corporation Manages
Success fee was realized, as the cumulative returns in the fund managed by Mezzanine Corporation exceeded the reference value.
CumulativeInvestments Recovery of
Investments
ProfitProfit exceeding reference value is Success Fee
Further success fee can be expected in future
Investments
Recoveries
8.0 9.67.0
7.01.3
11.64.1
7.4
5.7
0.0
5.0
10.0
15.0
20.0
25.0
30.0
FY2011 FY2012 FY2013 3Q
Subordinated LoanPreferred Share/Interest/DividendM&A Advisory (w/o Funds)
Impact of Mezzanine fund on Revenue
Recovery of preferred shares is accounted for as revenue under the current accounting policy. (If recovery of subordinated debt was considered as revenue, the 2013 3Q revenue would be 26 billion yen.)
Reported Revenue
Recovery is not accounted for as revenue
Revenue w/o funds
(Billion Yen)
Notes:(1) Foreign exchange rate for FY2011 Actual Average: ¥79.84/US$ and ¥128.06/GBP(2) Foreign exchange rate for FY2012 Actual Average: ¥79.83/US$ and ¥126.50/GBP(3) Foreign exchange rate for FY2013 3Q Actual Average: ¥96.71/US$ and ¥149.39/GBP
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“Trusted Advisor For Client’s Best Interest”
Statements made at this presentation and in these materials include forward-looking statements that are based on our current forecasts, assumptions, estimates and projections about our business and the industry. These forward-looking statements are subject to various risks and uncertainties. These statements discuss future forecasts and plans, identify strategies, contain projections of results of operations and of our financial condition, and state other “forward-looking”information. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from expected results contained in any forward-looking statements. Potential risks and uncertainties include, without limitation, our ability to continue to attract and retain customers; our ability to make our operations profitable; our ability to continue to expand and maintain our computers and electronic systems to avoid failures of these systems, and our ability to maintain our relationship with our founding shareholders. The financial information presented in not in accordance with US GAAP. Forward-looking statements are made based upon the best information available to us on the day of presentation and we will not revise or update any forward-looking statements for any new information or future events.
This is an English translation of Japanese presentation materials prepared for investor relations purpose. If there is any discrepancy between a statement in English and a statement in Japanese, the Japanese version will be the controlling document.
As the world’s global public M&A solutions group and public institution, GCA Savvian Corporation aims to contribute to the growth and development of clients and the world economy by
continuously providing value creating M&A solutions.