Financial Results for FY2015 Q3 January 1 to September 30, 2015 October 29, 2015 (TSE1: Ticker 2174)
FY2015 Q3 Financial Performance
Summary of FY2015 Q3 Results 9-month revenue was 10 billion yen and Operating Profit was 1.9 billion yen. Operating profit by advisory segment increased 120% over the first 9 months of 2014. Japan advisory revenue doubled from the same period last year, reaching an all time high largely contributed by the mega transaction closed this quarter. Pipeline for the US region remains robust. It includes a couple of mega transactions. We continue to return 100% of net income to shareholders. Increased annual dividend from 10 yen to 20 yen per share, and interim dividend of 10 yen per share was paid out in August. Executed 300 million yen share repurchase in Q3. Remaining budget for repurchases is 1.0 billion yen. 3
FY2015 Q3 Financial Performance - Detail Total advisory revenue increased, and Japan advisory doubled over last year. Operating profit from Advisory was 2.1 billion which is a 120% increase over last year (in MM) Actual (1) FY2015 3Q % FY2014 3Q % Change % Revenue Advisory - Japan 5,987 3,007 2,980 99.1 % Advisory - US 3,808 4,164 (356) (8.5)% Advisory Total 9,795 7,171 2,624 36.6 % Asset Management 212 2,435 (2,223) (91.3)% Total Revenue 10,007 9,607 400 4.2 % EBIT before Investment 2,167 21.7% 2,836 29.5% (669) (23.6)% Investment 252 271 EBIT 1,915 19.1% 2,565 26.7% (650) (25.3)% Net Income 1,220 12.2% 1,516 15.8% (296) (19.5)% Revenue and EBIT for Advisory Segment 実績 (1) FY2015 3Q % FY2014 3Q % Change % Revenue Advisory - Japan 5,987 3,007 2,980 99.1 % Advisory - US 3,808 4,164 (356) (8.5)% Advisory Total 9,795 7,171 2,624 36.6 % EBIT 2,132 21.8% 971 13.5 % 1,161 119.6 % Notes: Exchange rates for FY2015 3Q (actual average) : 120.90/US$ and 185.34/GBP; FY2014 3Q (actual average): 102.96/US$ and 171.86/GBP. 4
FY2015 Q3 Advisory Business Advisory revenue increased 37% over Q3 2014 and operating profit increased 120% over last year. Expecting the firm s highest advisory revenue ever in 2015. Advisory Business (million yen) (Revenue) 10,000 Revenue EBIT 9,795 (EBIT) 2,200 9,000 2,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 5,855 722 7,171 971 2,132 1,800 1,600 1,400 1,200 1,000 800 600 400 1,000 200 0 2013 3Q 2014 3Q 2015 3Q 0 Note) Subsidiaries in India and China are consolidated from FY2014. Exchange rates for FY2015 3Q (actual average): 120.90/US$ and 185.34/GBP, FY2014 3Q (actual average): 102.96/US$ and 171.86/GBP, FY2013 3Q (actual average): 96.71/US$ and 149.39/GBP. 5
Quarterly Financial Performance Q3 advisory revenue hit its highest level ever. Revenue (Fund Unconsolidated) 6,000 5,000 4,000 3,000 2,000 1,000 (Million Yen) Asset Management Due Diligence Advisory 0 2,500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (Million Yen) 2012 2013 2014 EBIT (Fund Unconsolidated) 2015 2,000 1,500 1,000 500 0-500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 6
GCA Savvian Advisory Ranking Ranked 7th by value in Japanese companies related M&A in FY2015 3Q FY2015 3Q Financial Advisors to Japanese M&A : Rank Value Deal Size No. of Advisor JPY mil. Deal 1 Nomura 712,672 22 2 Mizuho FG 610,024 30 3 Goldman Sachs 460,282 2 4 Rothschild 460,282 1 5 Mitsubishi UFJ Morgan Stanley 309,018 5 6 Merrill Lynch 308,922 3 7 GCA Savvian 267,667 6 8 SMBC 137,202 24 9 Daiwa 75,159 8 10 BNP Paribas 47,870 1 Notes: Source: Thomson Reuters. 7
Strong Balance Sheet Maintain high capital ratio of 68 % Simple and healthy balance sheet (in MM) Accounts 2015/9 (1) 2014/12 (2) Cash and Cash Equivalent 8,561 9,412 Accounts Receivable 2,129 918 Operational Invest Security 153 598 Others 2,020 516 Current Assets 12,865 11,443 Furniture etc. 208 199 Investment Sec. 233 319 Others 863 1,227 Fixed Assets 1,305 1,744 Total 14,170 13,188 Income Tax Payable 1,190 879 Others 3,395 3,597 Liabilities 4,585 4,476 Capital 8,765 7,819 Treasury Stock 0 (241) Exchange Valuation 819 1,135 Net Assets 9,584 8,712 Total 14,170 13,188 Capital Ratio 68% 66% Notes: (1) Ex-rate as of Sep 30, 2015: 119.97/US$ and 181.86/GBP. (2) Ex-rate as of Dec 31, 2014 : 120.53/US$ and 187.01/GBP. 8
Notable Transactions in 2015 Q3 Notable Domestic Transactions Cross-border Transactions Advised Japan Tobacco on its transfer of shares of vending machine operation business and JT s beverage brands Advised dotloop on its Sale to Zillow Advised THK on acquisition of the Linkage and Suspension business in USA, Canada, Germany and Czech from TRW Automotive, Inc. Advised ROHM on its Acquisition of Powervation Limited. Closed in Jul 2015 Closed in Aug 2015 Closed in Aug 2015 Closed in Jul 2015 9
M&A remains a top priority for Japanese companies Japanese companies continue to prioritize M&A as means of investment. They tend to focus more on increasing enterprise value for the long-term as part of corporate governance reform. M&A Capital Investment Repayment of debt Buy Back/ Dividend etc. Others Source: CCA Savvian ( July 14, 2015 July 28, 2015. 430 responses (239 companies) 10
Basic Capital Policy Rate of Shareholder Return=100% (Combination of Dividend and Buy Back) Dividend 0.6 bn Buy Back 1.6 bn Return 100% of 2014 Net Income ( 2.2 billion) The firm's principal growth investment is to hire additional talent. The investment made during the term is recorded as a cost. Therefore, all post-investment net profits are available for shareholder returns. 11
Share Repurchases Status of 2015 Share Repurchases Budget at Beginning 2015 1.8bn (Incl. prior year carry over 0.2 bn) 1.0bn Remaining Budget 0.8bn Executed Remaining budget for repurchases is 1.0 billion. 12
Status of IR Activities for Individual Investors IR Conference for Individual Investors No. Date / Time Place 1 Oct 17, 2015 (Sat) (Executed) Daiwa (Tokyo Head Office) 2 Nov 26, 2015 (Thu) 17:30-18:20 SMBC Nikko (Tokyo Head Office) 3 Nov 26, 2015 (Sat) 14:20-15:05 Mitsubishi Bulding M+ 4 Feb 25, 2016 (Thu) 17:30-18:20 Nomura (Osaka Branch) We had our first IR conference for individual investors on October 17, 2015. Webcast is available on our homepage. http://www.gcasavvian.com/jp/news/ 13
Appendix
Supplemental Data Ratio of Large Deals 2012 2013 2014 2015 3Q Others 39% Large * 29% Mega * 32% Others 39% Large * 61% Others 29% Large * 71% Others 26% Mega * 13% Large * 62% Number of Professionals Number of Professionals FY2014 FY2015 FY2015 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q End Advisory Japan 78 82 85 84 86 94 95 96 Advisory US 60 64 64 65 67 65 76 76 Advisory Europe 1 1 1 1 1 1 1 1 Due Diligence 27 25 22 20 20 21 22 23 Mezzanine 9 9 9 8 8 8 7 6 175 181 181 178 182 189 201 202 Notes: * Large represents transaction fee greater than 0.1bn; Mega represents transaction fee greater than 1bn 15
Trusted Advisor For Client s Best Interest 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. 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. 16