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Daiwa Investment Conference Tokyo 2018Sustainability & Innovation

Daiwa Securities Group

March 6th, 2018

Seiji Nakata, President and CEODaiwa Securities Group Inc.

This presentation may contain forward-looking statements about the Daiwa Securities Group. You can identify these statements by the fact that they do not relate strictly to historic or current facts. These statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition or state other “forward-looking” information. These statements are based on currently available information and represent the beliefs of the management of the Daiwa Securities Group. These statements are subject to numerous risks and uncertainties that could cause the Daiwa Securities Group’s actual results, performance, achievements or financial condition to differ materially from those described or implied in the forward-looking statements. The Daiwa Securities Group undertakes no obligation to publicly update any forward-looking statements after the date of this presentation. These potential risks and uncertainties include, but are not limited to: competition within the financial services industries in Japan and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Daiwa Securities Group.

Index

Ⅰ - Evolvement of Daiwa Securities Group・・・ 3

Ⅱ - FY2017 Strategic Themes and its Progress・・・・ 6

Quality No.1・・・・ 8

Hybrid Securities Group・・・・ 14

Ⅲ - Direction of the New Medium-Term Management Plan・・・・ 21

Appendix ・・・・ 25

Daiwa Investment Conference Tokyo 2018Sustainability & Innovation

Ⅰ- Evolvement of Daiwa Securities Group: Business Structure Supporting Sustainable Growth

0%

20%

40%

60%

80%

050

100150200250

FY2010 3Q FY2017(Annualized)

Fixed cost (left)Stable revenues (left)Fixed cost coverage ratio (right)

FY2010 3Q FY2017-9

-6

-3

0

3

6

4

(Y bil)

Ⅰ- Evolvement of Daiwa Securities Group

Established a Robust Business Structure Supported by Stable Revenues

1.5x(Y bil)remained in the black for 7consecutive quarters

Ordinary Income by Business Segments(Y bil)

Fixed Cost Coverage Ratio Overseas Ordinary Income Shareholders’ equity

FY2010 FY2017

34%

68%

Y 833.9bil

Y1.2tri

(Y bil) ■Daiwa Securities Group Inc.

■Daiwa SecuritiesCo. Ltd.

■Daiwa Securities Group Inc.

■Daiwa SecuritiesCo. Ltd.

S&P：Upgraded on Jul. 2016

Moody’s：Upgraded on Oct. 2014

Credit Ratings

A-

A

Baa1

A3

-50

-30

-10

10

30

50

70

-50

-30

-10

10

30

50

70

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Retail Wholesale Asset Management Investments Consolidated total

Mar. 2005 Jun. 20170

200

400

600

800

Mar. 2005 Feb. 2018

Culture and DNA built up over the course of our 116-year History

*Includes the number of employees who have passed all 6 subjects and are in the process of applying for the certification.** Based on announcement of Japan Association for Financial Planners.

Supporting the Success of Female Employees

426

9.3%752.2％

745*

188

Initiatives towards Work Style Innovation

Introduction of new education program Q-Road(for employees within 3 to 5 years from joining Daiwa）

Hold CQ1 mtgs.（to penetrate Client 1st and Quality No.1 through all employees）

Initiatives towards improving the quality

Code of conduct for employees Daiwa Spiritformulated in 2008 (excerpts below)Corporate principles formulated in 1999

Building trust

Placing importance on personnel

Contributing to society

Maintaining healthyearnings results

Compliance Integrity andexpertise

Pioneer spirit Professionalism

High standards

Prompt responsiveness

Company-employeetrust / Solidarity

Self-discipline

5

Create work environments that allow all employees to fully deploy their abilities with the best intentions

Contribute to the development of society and economy through financial and capital markets

1位

Among domesticinsurance and financial industry **

Female employees career support training initiatives

Implemented a nanny introduction system

The Number of CFP Holders Female Employees in Managerial Positions

HR strategy

Group strategy

No.1

Penetration of leaving work by 7pm Removed the age limit of reemployment

for sales representatives Expand support for balancing work and

nursing care Introduced a plan to support working for

employee diagnosed with cancer

Bloomberg Financial Service Gender Equality Index MSCI Japan Women Empowering Index (WIN) FTSE Blossom Japan Index Nadeshiko Brand（ministry of economy, Trade and Industry & Tokyo Stock Exchange) Health and Productivity Stock Selection（ministry of economy, Trade and Industry & Tokyo Stock Exchange)

Ⅰ- Evolvement of Daiwa Securities Group

Ⅱ- FY2017 Strategic Themes and its Progress

7

For Sustainable Growth

Continued growth through maintaining healthy earnings results＝Sustainability

Quality No.1Establish industry’s

highest quality

Hybrid Securities GroupLeverage the benefits of being an

independent securities group

Culture and DNA built up over the course of our 116-year history

A robust business structure supported by stable revenues



Quality No.1Quality No.1

Further penetration to whole organization as KPI

9

Provide Highest Quality Service

Establish a sales model with more priority on customer perspective to accomplish Quality No.1

Sales System Customer SatisfactionIntroducing Bottom-up Sales Approach

Branch A Branch B Branch C

Equities

Investment trusts

WrapAccountservices

Wealthmgmt.

Visualization of Customer Satisfaction

Customer Questionnaires

Over-the-Counter Service Survey

<Sample Questions>

• Whether the latest transaction was based on true understanding of customer needs

• Level of overall satisfaction with the branch

<Sample Survey Items>• Willingness to listen to

customers• How to use materials

and what to explain• Appropriate services

and proposals• Consideration for

customersEach sales branch makes sales decisions

based on customer needs

Quality No.1Quality No.1

Implementation of a new indicator（NPS® : Net Promoter Score® ）


Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

10

Strengthen Support for Foreign EquitiesFurther strengthen customer support for foreign equities by providing timely and high quality information from overseas offices. Trading value of foreign equities reached a record high by capturing strong demand from retail customers under the new sales promotion strategy.

Strengthened Customer Support for Foreign Equity trading

Provide timely and high quality information from overseas offices

*Accounts which did not hold foreign equities for past one year*Accounts which did not hold foreign equities for past one year

New Accounts Purchased Foreign Equities*

Expansion of Foreign Equity Trading Valueand AUC (vs 4Q FY2016)

売買代⾦

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2015 FY2016 FY2017

2.6x2.6x

Asset Under Custody(at the end of the quarter)

Expand foreign equity seminars

・Foreign equity seminars at each branch・Online US equity seminars・Foreign equity seminars at each branch・Online US equity seminars

Quality No.1Quality No.1Ⅱ- FY2017 Strategic Themes and its Progress

1.6x1.6x

Trading value

FY2016 FY2017.3Q

2.3x(monthly average)

2.3x(monthly average)

New YorkHong KongMumbai

Melbourne

Singapore

TokyoLondon

NY Market

ダイワアドバンスラッ

プ

・機動的な国際分散投資の　「コア運用」とお客様独自の　「サテライト運用」

プレミアム

・最大5つの運用口・約500通りの運用スタイル・相続時受取人指定サービス

ダイワファンドラップ

・100種類以上の運用スタイル

オンライン・ロボ・アドバイザーの活用

11

Provide Products through Customer’s PerspectiveProvide best-performing investment trusts among the industry, including those other than Daiwa. Newly introduced Daiwa Advance Wrap which offers flexible international diversified investments.

（Y bil）（Y bil）

Introduced Daiwa Advance Wrap for Meeting the Customers Needs ofPerformance-oriented

Contract AUM for Wrap Account Service

**Private asset allocation service

Strengthen Product Selection Capabilities forInvestment Trusts

Launch investment Trusts Meeting Customer Needs

New lineup funds：11（Apr. 2017- Feb. 2018）

Managed by outside the Group：6

Jan. 2018Newly launched fund Global EV Revolution Fund

Investing mainly into companies expected to grow with expansion of EV (Electric Vehicle)

Robeco SAM* manages mother fund with ESG perspective

* Robeco SAM is an investment specialist, owned 100% by asset management company RobecoGroup in Netherlands, focused exclusively on sustainability investing.


Y100 mil -

Y30 mil -

Y3 mil -

Y0.5 mil -

344564

1,2421,540 1,661

1,944

0

500

1,000

1,500

2,000

2,500

2012 2013 2014 2015 2016 2017.12（FY）（FY）

Minimum Amount of contractMinimum Amount of contract

Added valueAdded value

High

High

DaiwaAdvance

Wrap

PAAService**

PAAService**

OnlineOnline

DaiwaFund Wrap

DaiwaFund Wrap

PremiumPremium

Launched inMar. 2018

HighHigh

DaiwaAdvance

Wrap

PremiumPremium

DaiwaFund Wrap

DaiwaFund Wrap

OnlineOnline

・Core Investment, flexible international diversified investmentand Satellite Investment,based on each customers original needs

・Core Investment, flexible international diversified investmentand Satellite Investment,based on each customers original needs

・Utilization of robo-advsior technology

・Utilization of robo-advsior technology

・Investment style: more than 100

・Investment style: more than 100

・Investment portfolio:up to 5

・Investment style:about 500

・Inheritance beneficiarydesignation service

・Investment portfolio:up to 5

・Investment style:about 500

・Inheritance beneficiarydesignation service

Global EV Revolution Fund

Japan equities DIAM　Domestic Equity OpenDevelopedcountriesequities

Manulife　US Bank Equity FundFidelity　European Smaller Companies Open

Emergingcountriesequities

UBS　Emerging Countries Equity Selected Investment Fund

Global bonds PIMCO　Income strategy fundManulife　US Investment Grade Bond Fund

12

Increase Face-to-Face Customer ContactOptimize sales channels to meet various customer needs.Implement efficient sales branch strategy by rationalizing and integrating existing sales branches, and increasing small-size sales offices at the same time.

Mass Mass-affluent,Affluent

Customers’Life Stages Active

clientsNon-active

clients

FinancialConsultant

CS(Client Support)

Asset buildingperiod

(age 20-40)

Asset management /

succession period

（age 50 -）

AssetConservation

Period (age 75 -)

WealthConsultant

Anshin Planner(consultant for elderly)

Subdivision customers’ attributes and life stages and optimize sales channels

（Started with 7 branches from 2H FY2017）

NEW

NEW

Select sales branches opening area by local

area marketing

Improve area coverage ratio to increase customer contacts

Increase flexible & low-cost sales offices

Future Plan

Optimize Sales ChannelsSales Branch Strategy(Number of Daiwa Securities’ Sales Branches)

Anshin Planner and Financial Consultant Scheduled to be introduced to 10 additional branches

from Apr. 2018 Aim to be introduced to all branches by 2020


120 118 117120

100

120

140

160

2010 2011 2012 2013 2014 2015 2016 2017(予定)

2018.5(予定)

Includes 36 sales offices

153153

（FY）（FY）

Low-cost & small-size offices without back-office functions

Sales Offices

Scheduled to integrate 2 large

branches in Nagoya

( S c h e d u l e d )( S c h e d u l e d )

Sales branches excl. sales offices

Sales branches excl. sales offices

（Sales branches)（Sales

branches)

13

Services for Asset Building Generation

Provide services to be chosen by asset building generation through offering lowest fee in the industry for Daiwa’s iDeco and strengthening promotion for monthly investment-type NISA.

Daiwa’s Services

【Daiwa’s iDeCo】Lowest fee in the industry(Zero management fee)

Most attractive level of campaign in the industry

(13,000yen gift as maximum)Competency

Expand customer base by using external channels

Promote Investment for Savings Utilizing Tax Benefits

Promote WorkplaceMonthly

Investment-type NISA

FuturePlan

＋ Provide Daiwa’s monthly investment-type NISA

by payroll deduction or deduction from bank account

Introduced to Daiwa Securities Group as one of fringe benefits paying 5％ incentive (applied for by more than 3,000 employees)

Promotion of Daiwa’s Monthly Investment-type NISA

Launch and Promotion of Workplace MonthlyInvestment-type NISA


Individual-type DefinedContribution (iDeCo)

Monthly Investment-typeNISA

2002※The scope of individuals eligible to participate expanded from 2017

2018YearStarted

EligibilityIndividuals aged between 20 and 60

Japan residents aged 20 and above

TaxBenefit

Deductible at time of installmentNon-taxable on capital gainsTax benefit at time of receipt

Capital gains, dividendsare tax exempt for 20 yrs.

AmountLimit

Y144,000 to Y816,000 per year Y400,000 per year

Use LUPIN the THIRD, a famous cartoon characters among people in their 40’s, for a character of

Daiwa’s monthly investment-type NISA

Daiwa’s Monthly Investment-type NISA

LUPIN the THIRD

Hybrid Securities GroupHybrid Securities GroupⅡ- FY2017 Strategic Themes and its Progress

15

Expansion Strategy of Group Business

Traditional securities business x Diversified business portfolio

Hybrid Securities GroupLeverage the benefits of being an independent securities group

Hybrid Securities GroupLeverage the benefits of being an independent securities group

Advantageous Position in Securities Business Image of Hybrid Securities Group

Hybrid Securities GroupHybrid Securities Group

High

Low

Daiwa Securities

Group

Stability of the Group’s

revenue base

Independence ofmanagement

Business development not bound by industry law

Group strategy centered on securities business

Stable and efficient diversified business portfolio

Low(Bank affiliates, etc.)

Group Strategy centered on

banking business

Business model centered on wholesale business

Traditional securities business

(Daiwa Securities)

Banking BusinessDaiwa Next Bank

Investment BusinessDaiwa PI PartnersDaiwa Corporate

Investment

New ServicesUtilizingFinTech

IT/Think TankDIR

Real Estate/InfrastructureAM Business

Daiwa Real Estate AMMi-Casa AM

Asset Management BusinessDaiwa AMDaiwa SB

Overseas BusinessOverseas Subsidiaries

Alliance Partners

NewBusiness


High(Independent)

Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

16

Retained 1st place on PO/IPO league table by managing a number of large deals.Realized synergies with Retail Division such as expansion of new customer base and revenue growth.

Synergies with Retail Division from Managing Large-deals

*Exclude accounts that were newly opened through employee benefit plans such as employee stock ownership and accumulation savings, etc.

JapanPost

IdemitsuKosan

RenesasElectronics

SGHDKatitas

Optorun

(Y bil)

（FY）** (Share price on Feb. 28 – Offering price) x No. of shares sold by Daiwa to domestic retail customers

Successful Investment Experience for Retail Customers(Estimation of wealth effect based on offering price*)

RenesasElecronicsJun. 2017Global PO

Offering SizeY348.5 bil

IdemitsuKosan

Jul. 2017Global PO

Offering SizeY 124.8 bil

SG HoldingsDec. 2017Global IPO

Offering SizeY127.6 bil

Y20.7 bil Y45.7 bil Y12.2 bil

League Table (Apr. – Dec. 2017）

Daiwa Securities Underwriting Commission (equities)

Newly Opened Accounts by PO/IPO*（Apr. – Dec. 2017）

Large PO/IPO Deals Lead-Managed by Daiwa

1Q-3QFY2017

(Source) Daiwa Securities Co. Ltd.


13.3 13.4

14.3 14.0

13.7

14.5

2012 2013 2014 2015 2016

Primary andSecondery equity

offeringsShare IPO Share

1 (3) Daiwa 29.3% 1 (3) Daiwa 27.0%

2 (2) Nomura 25.6% 2 (1) Nomura 26.7%

3 (5) Mitsubishi UFJMS 10.5% 3 (2) Mitsubishi UFJMS 13.9%

4 (4) Mizuho 8.0% 4 (4) Mizuho 11.2%

5 (9) Goldman Sachs 7.9% 5 (5) SMBC Nikko 10.0%※():FY2016 results

Rank Rank

17

Promoting M&A Deals by Leveraging Daiwa’s Global NetworkSagent and Signal Hill integrated into DCS Advisory on March 1st, 2018.Continue to aggressively promote M&A advisory by leveraging global network including new platform in the U.S..

Consolidated Group M&A Commission(1Q-3Q FY2017)

Purpose for Acquiring Sagent & Signal Hill

（Y bil)Daiwa’s M&A Global Network and Cross-border M&A Deal Value**

Alliancepartners

Europe

Asia/Oceania

America

JapanBetween

Japanese and Americancorporations

Y2.3 tri

Between European and American

corporations

Y35 tri

*Source：Recof** 2017 results（Source: Thomson Reuters), 1$=JPY112.2 (2017 average）

To create synergy with other overseas offices by expanding size and sector coverage

To expand sector and regional coverage within the U.S. (esp. west coast)

Japanese M&A Market Size*

Between Japanese and European

corporations

Y1.6 tri

(Y tri)

（CY）（CY）

0

10

20

30

40

50

60

1Q 2Q 3Q

Asia

Japan


0

5

10

15

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total deal value of M&As by Japanese corporationscross-border deals within total deal value

18

Further Expansion of Real Estate Asset Management Business

※ As of the end of fiscal year, based on acquisition amount

Expand asset size of existing

funds

Expand real estate AM business

overseasDiversification of investment

Newly invested into Samty Residential Investment Corporation and Samty Asset Management Co.,Ltd.. AUM of real estate asset management stood at Y880 bil and looking to reach Y1 tri

Investment to Samty Residential and Samty AM

Prepare for the launch of hotel-focused private REIT

（Y bil）

Y15 bil

33%

Daiwa’s Real Estate AM Business AUM Initiatives towards Expanding Real Estate AM Business

Initiatives Going Forward

・ Plan to operate in 1H FY2018 Hotel-focused private REIT Primarily investing in 23 wards of Tokyo, 7 major cities（Osaka、Kyoto、

Nagoya、Yokohama、Sapporo、Fukuoka、Urayasu）and cities located near the international airports such as Narita and Kansai

Lease agreements consist of the high proportion of fixed rentM

ain Sponsor


InvestmentTargets Status Asset Management Company

※():% share held by Daiwa GroupDaiwa Office Investment Corporation Offices ListedDaiwa Residential Private Investment Corporation Residences Unlisted

Nippon Healthcare Investment Corporation Healthcarefacilities

Listed

Japan Rental Housing Investments Inc. Residences Listed Mi-CasaAsset Management Inc. (98)

Samty Residential Investment Corporation Residences Listed SamtyAsset Management Co.,Ltd. (33)

Investment Corporation Name

Daiwa Real EstateAsset Management Co. Ltd. (100)

Samty Asset Management Co.,Ltd.

Business

Type II Financial InstrumentsBusiness Operator, InvestmentManagement Business,Investment Advisory andAgency Business

Capital Y120 mil

Samty Residential Investment Corporation (3459)Total acquisitionamount

Y81.5 bil ※ As of Feb. 2017

InvestmentTargets

Residences（Emphasis on single and compacttype properties）

0

200

400

600

800

1,000

2009 2010 2011 2012 2013 2014 2015 2016 2018.2

Samty Residential Investment CorporationJapan Rental Housing Investments Inc.Nippon Healthcare Investment CorporationDaiwa Residential Private Investment CorporationDaiwa Office Investment CorporationOther

19

Initiatives on New Businesses Centered on AI and FinTech

Create new value utilizing FinTech and business and capital alliances with the companies outside the group by defying the boundaries of existing securities business.

Establish next generationsecurities platform

Strengthen capabilities of providing information

Foster new businesses Operational efficiency

Major Initiatives in FY2017Fintertech

＝ Finance × Entertainment × TechnologyFoundation Apr. 2018 Shareholder Daiwa Securities Group Inc. (100%)

DG Lab Fund

Blockchain AI VR/AR BioTechSECURITY

＜Investment Fields＞

＜Investment Examples＞

50%50%

Investment

LPInvestment

2018.4 Establish Fintertech for creating nextgeneration financial services

2018.2 Started to provide Daiwa securities’ market information compatible with Amazon Alexsa

2018.2 Capital and Business Alliance with KDDI inasset-building field

2017.12 Started to provide market information utilizing AI 2017.11 Entered into an agreement with Finatext and Smartplus 2017.11 Developed real time-based stock volume forecast

model by AI 2017.10 Plan of compliance related operational efficiency by AI 2017.9 Invested into startups with next generation

through DG Lab Fund 2017.9 Started to apply Blockchain to securities

post-trade business 2017.6 Introduced Chatbot to improve operational efficiency

of answering internal inquiries 2017.5 Started to provide stock information using

stock price forecast model by AI

*Includes capital reserve

ForefrontTechnologies Digital ChannelExpertise in Securities

and Financial Businesses

Provide next generation financial servicesto Digital-Native customers


invested into startups with next generation technology

LPInvestment

Capital* Y800 mil

New company creatingnext generation financial services

0

200

400

600

800

1,000

1,200

1,400

1,600

0

500

1,000

1,500

2,000

2,500

3,000

Age 20 to29

Age 30 to39

Age 40 to49

Age 50 to59

Age 60 to69

Age 70 andover

Others

Securities

Insurance

Cash and Deposits

Smartphone Holders (Right)

20

Capital and Business Alliance in Asset-Building FieldsStrengthen service platform through the capital and business alliance with KDDI, the majortelecommunications providers owning various customer base to promote customer’s asset building by providing iDeCo and investment trusts.

Strongly support the transition from savings to asset building by providing new investment opportunities for

individual investors

66.6％Investment

33.4％Investment

KDDIAsset Management

au usersThe number of contracts:

39mil

New iDeCo

Defined Contribution

Investment Trusts for Asset

Building Generation

Investment Trusts

Provide Productsproducts

System

Daiwa’s Customer

New iDeCo

Daiwa’s iDeCo

Age Group of eligibility for iDeCo

Capital and Business Alliance with KDDI (Establishment of KDDI Asset Management)

Household Financial Assets* and Population of Smartphone Holders** by age groups (Estimated)

*Household basis(2 or more persons) as at Sep. 2017. **Estimated by multiplying the ratio of smartphone holders for each age group by population of each age group (2016).


(Source) Complied by Daiwa Securities Group Inc. based on Family budget Survey, Communications Usage Trend Survey, and Population Estimates by the Ministry of Internal Affairs and Communications

（Y ten thousands）（Y ten thousands）

Daiwa Institute of ResearchBusiness Innovation

Ⅲ- Direction of New Medium-Term Management Plan: Promoting Innovation

22

Ⅲ- Direction of New Medium-Term Management Plan

Direction of New Medium-Term Management Plan 1

Age of longevity Widening gap and diversity

Fierce competitive environment

Business OpportunitiesResolve issues with our clients to prepare for an uncertain future = Create the Future

Fiscalstringency

Digital transformation

Population and economic growth

Domestic Household Financial Assets Corporation / Local Government Industrial structureAsia

Correspond to industrialstructure changeStrengthen global competitivenessDevelop social-issue

-solving industriesDiversified

financial needsImportance of

life planning

Provide value-added solution with the highest quality consulting services

Create and provide new value as hybrid securities group

Create the Future as Pioneer of Financial and Capital Market

Approaches to bothhigh net-worth and

mass-affluentLink Japan andgrowth of Asia

Identify and developnew industries

Approaches to new business areas

Daiwa Securities Group’sPassion, Professionalism, Potential ＋Innovation

Direction of Strategy

23

Customer Oriented KPI

Customer Satisfaction

AUC at Daiwa Securities

Earnings KPI

Ordinary IncomeROE

Financial KPI

Consolidated Total Capital Ratio

Ⅲ- Direction of New Medium-Term Management Plan

Direction of New Medium-Term Management Plan 2

SDGs as Management StrategyⅢ- Direction of New Medium-Term Management Plan

24

Daiwa Securities Group SDGs Promotion CommitteeChairman：Seiji Nakata, President & CEO of Daiwa Securities Group Inc.

SDGs × “Finance” SDGs × “Technology” SDGs × “Local Community”

Established SDGs Promotion Committee to solve social issues through our group business in financial and capital markets.

Gather latest information on global initiatives on SDGs and discuss group wide approaches and solutions.

Daiwa Securities Group Inc. Establish SDGs Promotion Office

Group CompaniesDaiwa Securities Co. Ltd. Daiwa Institute of Research Holdings Ltd. Daiwa Asset Management Co. Ltd. etc.

Appendix

26

Medium Term Management Plan (“Passion for the Best” 2017)

In response to the full-fledged start of an era of transition from savings to investment, attract customers with the industry’s top quality, and become their best partner

Provide investment services to lead the era of transition from savings to investment

Basic Policy 1: Pursue best quality Establish product and service platforms in response to the needs of a wide range of

investors Strengthen asset management abilities Expand the pool of talented personnel with advanced

expertiseBasic Policy 2: Dramatically expand the customer base and revenue Strengthen approach to a wide range of investors by leveraging product

and service platforms Dramatically expand the customer base and revenue by responding to

growing investment needs

Basic Policy 3: Support the sustainable growth of companies and the development of new industries Identify and develop next-generation growth companies and help them to raise capital for growth Provide solutions in response to corporate globalization and M&A needs

Numerical targets

FY2017FY2016FY2015

1. ROE: 10% or more 2. Fixed cost coverage ratio : 2. Fixed cost coverage ratio : 75% or more in the final fiscal year

Positive cycle of

“transition from savings to

investment

” and

“improvem

ent of corporate value

”

Provide solutions that contribute to the improvement in corporate value

Appendix

27

Medium Term Management Plan : Progress of Numerical Targets

ROE: 10% or more Fixed cost coverage ratio : 75% or more in the final fiscal year

※Stable revenues consist of : AM Management fees (including investment advisory fees), agency fees, Daiwa Next Bank profit margins, Daiwa Office Investment net operating revenues, Daiwa Real Estate AM management fees, management fees on SMA/Fund Wrap, interest fees on margin, interest fees on LMS etc.

Appendix

Shareholders’ equity（Y bil）

ROE

ROE （excl. effect of losses carried forward belonging to Daiwa Securities）

Profit attributable to owners of parent company（Y 100mil）

Fixed cost （Y bil）

Stable revenues ※

（Y bil）Fixed cost

coverage ratio

28

Appendix

3Q FY2017 Net operating revenues: Y134.9 bil (+3.1% QoQ)

3Q FY2017 Ordinary income: Y43.2 bil (-1.4% QoQ)

3Q FY2017 Profit attributable to owners of parent company: Y22.6 bil (-28.9% QoQ)

Revenue in Retail Division expanded due to increase in equity trading volume and stock investment trust sales reflecting strong domestic and overseas equity market.

For Wholesale Division, Global Investment Banking maintained strong performance and equity revenues in Global Markets grew from increased client flow.

SG&A rose to Y94.7 bil (+4.2% QoQ) as bonus linked to earnings increased. It remained at a high level, even though ordinary income slightly dropped from the 2nd quarter in which there was

a capital gain by an exit of the investment in Investment Division.

Profit attributable to owners of parent decreased as provision for loss on litigation (Y9.5 bil) was posted in 3Q FY2017. Annualized ROE: 7.1%, BPS: Y780.71

Net Operating Revenues Ordinary Income Profit Attributable to Owners of Parent Company

（Y bil）（Y bil）（Y bil）

124.7111.7114.0 115.0121.9 121.6

108.5130.9134.9

0

60

120

180

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2015 FY2016 FY2017

37.9

28.632.5 33.2 35.4 34.3

25.1

43.8 43.2

0

20

40

60

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2015 FY2016 FY2017

26.321.3 24.5

30.426.6

22.3 19.3

31.9

22.6

0

20

40

60

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2015 FY2016 FY2017

3Q FY2017 Earnings Result Summary

0

20

40

60

80

100

120

140

160

2010 2011 2012 2013 2014 2015 2016 2017

46.4 47.1

35.2

43.0 45.7

16.9 16.4

6.4

12.8 12.7

グローバル・マーケッツ純営業収益

グローバル・インベストメント・バンキング純営業収益49.6 49.6 48.8

51.2

59.5

9.5 8.7 10.3 10.6

18.0

29

Stable Revenues

（FY）（FY）


（3Q Annualized）（3Q Annualized）

Segment Summary

Retail Division

3Q 4Q 1Q 2Q 3QFY2016 FY2017

Wholesale Division

3Q 4Q 1Q 2Q 3QFY2016 FY2017

Asset Management Division Investment Division

3Q 4Q 1Q 2Q 3QFY2016 FY2017

3Q 4Q 1Q 2Q 3QFY2016 FY2017

Net operating revenues Ordinary income

11.5 11.7 12.0 12.1 12.6

6.5 6.6 7.2 7.1 7.4



Segment Summary and Stable RevenuesAppendix

Global Markets (Net operating revenues)

Global Investment Banking(Net operating revenues)

※See page 27 about stable revenues

2.5 2.4 1.8

13.9

6.3

1.8 1.5 1.4

13.1

5.5

30

Shareholder Return Policy

FY2013Interim Year-end




“Passion for the Best”2014 （FY2012-FY2014）

“Passion for the Best” 2017（FY2015-FY2017）

Dividendper share（JPY）

Payout ratio

(actual)

FY2017Interim

Sharerepurchase

Amount repurchased

Y19.0bil

Dividend Policy

Dividends will be paid semi-annually at a payout ratio of approx. 40% based on the consolidated financial performance.

The Company will also consider increasing returns to its shareholder with various options including share buyback when it sufficiently secures capital to pursue further growth.


15 34 30 29 263 12 17 17 14 16 17 12 13 13 13

34.9％ 34.1％ 34.5％

42.5％

Amount to be repurchased(upper limit):

Total amount paid forrepurchase:（as at Feb. 28）

42.3％ 42.3％（Actual payout ratio in 1H）

Amount repurchased

Y18.6bil

Total payout ratio:58.3％

Total payout ratio:60.4％

Appendix

Y40.0bil

Y33.7bil

Period of share repurchase:Nov. 2, 2017 to Mar. 23, 2018

Daiwa Securities Group Inc.Investors Relations

TEL: +81-3-5555-1300 FAX: +81-3-5555-0661E-mail: [email protected]

URL: http://www.daiwa-grp.jp/ir/english

mailto:[email protected]

http://www.daiwa-grp.jp/ir/english

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