Orix Corporation · TSE:8591

Orix — Q1 FY2015.3 Earnings Presentation

43 slides from Orix's earnings presentation, Jul 30, 2014

  1. Slide 1: First Quarter Consolidated Financial Results

    ORIX Corporation p (TSE: 8591; NYSE: IX) Conference Call First Quarter Consolidated Financial Results For the Three Month Period Ended April p 1 – June 30,, 2014 July 30, 2014 Haruyuki Urata Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of the Treasury Headquarters C

  2. Slide 2: Overview

    Overview  ¥68.6bn in Net Income (up 52% YoY), achieving 33% of ¥210bn full year target  Achieved ROE of 14.2% 14 2% JPY Bn 70 14.2% 60 50 68 6 68.6 10.8% 40 10.0% 30 45 0 45.0 20 34.8 10 0 13.3 Q1 14.3 Q1 15.3 Q1 Net Income * ROE *Net Income refers to Net Income Attributable to ORIX Corporation Sh

  3. Slide 3: Overview Segment Profits

    Overview Segment Profits  Profit growth largely driven by the Overseas Business and Retail segments  Real Estate segment also exhibited strong profit growth. growth The other 3 segments continue to produce solid profits JPY Bn 100 Corporate Financial Services 80 Maintenance Leasing 60 Real Estate

  4. Slide 4: Overview Segment Assets

    Overview Segment Assets  Asset balance remains flat, while ROA increased to 3.8% JPY Tn 10 3.8% 4.0% Corporate Financial Services 3 5% 3.5% 2.7% 3.0% 8 Maintenance Leasing 2.5% 1.8% 2.0% R l EEstate Real t t 6 1.5% 1.0% Investment and Operation 4 0.5% 0.0% Retail -0.5% 2 -1.0% Overseas Business -1.

  5. Slide 5: Segment Performance: Corporate Financial Services

    Segment Performance 1. Corporate Financial Services （JPY Bn） 13.3 14.3 14.3 Q1 15.3 Q1 Change Base Profits 26.1 22.1 5.0 5.3 107% Capital Gains 0.3 1.9 0.2 0.4 - Provisions -0.3 1.0 0.1 0.1 - Impairments -0.1 -0.2 0.0 0.0 - Segment Profits 25.9 24.9 5.2 5.9 112% Segment Assets 943.3 992.1 928.6 994.

  6. Slide 6: Segment Performance: Maintenance Leasing

    Segment Performance 2. Maintenance Leasing （JPY Bn） 13.3 14.3 14.3 Q1 15.3 Q1 Change Base Profits 34.9 38.7 11.1 11.0 100% Capital Gains 0.0 0.1 0.0 0.0 - Provisions 0.1 -0.4 -0.1 0.0 - Impairments -0.1 -1.3 0.0 0.0 - Segment Profits 34.9 37.1 11.0 11.0 100% Segment Assets 549.3 622.0 567.1 637.1 -

  7. Slide 7: Segment Performance: Real Estate

    Segment Performance 3. Real Estate （JPY Bn） 13.3 14.3 14.3 Q1 15.3 Q1 Change Base Profits 25.0 22.9 7.0 4.7 67% Capital Gains 16.5 22.5 4.8 8.6 - Provisions 0.4 -2.1 0.1 0.0 - Impairments -36.4 -25.4 -6.3 -2.4 - Segment Profits 5.6 18.0 5.5 10.8 196% Segment Assets 1,133.2 962.4 1,084.8 916.1 - ROA

  8. Slide 8: Segment Performance: Investment & Operation

    Segment Performance 4. Investment & Operation （JPY Bn） 13.3 14.3 14.3 Q1 15.3 Q1 Change Base Profits 29.1 29.9 6.7 4.9 72% Capital Gains 19.0 68.6 4.4 5.1 - Provisions -5.5 -2.6 0.0 0.0 - Impairments -7.6 -1.8 -0.5 -0.1 - Segment Profits 34.9 94.1 10.7 9.8 92% Segment Assets 444.3 565.7 472.1 568.4

  9. Slide 9: Segment Performance: Retail

    Segment Performance 5. Retail （JPY Bn） 13.3 14.3 14.3 Q1 15.3 Q1 Change Base Profits 42.1 49.5 15.6 13.9 89% Capital Gains 3.7 3.9 2.8 15.4 - Provisions -2.6 -3.5 -1.2 -0.3 - Impairments 0.0 0.0 0.0 0.0 - Segment Profits 43.2 49.9 17.2 29.0 168% Segment Assets 1,994.1 2,167.0 2,021.9 2,131.1 - ROA (

  10. Slide 10: Segment Performance: Overseas Business

    Segment Performance 6. Overseas Business （JPY Bn） 13.3 14.3 14.3 Q1 15.3 Q1 Change Base Profits 37.5 65.6 12.9 16.4 127% Capital Gains 19.3 20.9 6.5 23.9 - Provisions -2.4 -5.7 -1.2 -0.4 - Impairments -1.6 -11.1 -2.6 -0.3 - Segment Profits 52.8 69.7 15.5 39.7 256% Segment Assets 1,318.4 1,972.1 1,37

  11. Slide 11: Trends in Base Profits and Capital Gains

    Trends in Base Profits and Capital Gains  Base profits grew steadily, while capital gains remain stable Base Profits and Capital Gains Capital Gain Breakdown （Segment Total） （Excluding large valuation gains, segment total） JPY Bn Base Profits JPY Bn IInvestment t t Related R l t dG Gains i 250 100

  12. Slide 12: Base Profit Breakdown

    Base Profit Breakdown  “Other operating profits” are the main driver of service related revenues  Maintenance Leasing, Real Estate, and Investment and Operation segments have shown growing trend in “other operating profits profits.”” Service Related Revenue Breakdown*1 Other Operating Profit Break

  13. Slide 13: Investment and Operation Segment in Depth

    Investment and Operation Segment in Depth  Environment and energy related business and PE investment have been a contributor to “other operating profits”  Renewable bl energy related l db business in particular l h has b been expanding d rapidly dl Other Operating Profits: Scale of Renewable Energ

  14. Slide 14: Summary

    Summary Achieved h d ¥68.6bn b in Net Income, 33% off the h full f ll year target Segment asset ROA increased to 3.8%, 3 8% ROE increased to 14.2% 14 2% Making solid strides towards accelerating “Finance Finance + Services Services” Copyright © 2014 ORIX Corporation All rights reserved. 13

  15. Slide 15: This page is intentionally left blank

    This page is intentionally left blank Copyright © 2014 ORIX Corporation All rights reserved. 14

  16. Slide 16: Appendix

    Appendix pp Copyright © 2014 ORIX Corporation All rights reserved. 15

  17. Slide 17: About ORIX: Sustainable Growth

    Appendix (1) About ORIX Sustainable Growth  Aim to break past record of net income in FY15.3 Net Income Attributable to ORIX Corporation Copyright © 2014 ORIX Corporation All rights reserved. 16

  18. Slide 18: About ORIX: Business expertise and Group-wide capability

    Appendix (2) About ORIX Business expertise and Group-wide capability  ORIX evolved by venturing into neighboring areas while increasing its finance and asset expertise Credit Screening and Banking Asset Management Finance Capability Investment Life Insurance Lending Principal investment Business

  19. Slide 19: About ORIX: Expansive Domestic and Overseas Network

    Appendix (3) About ORIX Expansive Domestic and Overseas Network  Expanded its global reach starting with Hong Kong in 1971, using knowhow developed in Japan  Not as ambitious as to call it a globalization, but rather it is a way of eliminating barriers that exist in Japan 36 Countries and Regions

  20. Slide 20: Changing Balance Sheet Structure

    Appendix (4) Changing Balance Sheet Structure  Improving profitability while strengthening financial soundness Percentage of Segment Assets （ROA） Real Estate Segment Others excl. Real Estate Real Estate 10 JPY Tn Percentage of Real Estate Segment Asset ROA 3.00% 40% 4% 8 30% 3% 2.00% 6 20% 2% 4 1.0

  21. Slide 21: Changing Revenue Structure

    Appendix (5) Changing Revenue Structure  Solid growth in base profits and pursuit of stabilized capital gains Base Profits and Capital Gains JPY Bn Base Profits Capital Gains Large Valuation Gains 250 200 150 100 50 0 07.3 08.3 09.3 10.3 11.3 12.3 13.3 14.3 15.3 Q1 Copyright © 2014 ORIX Corporation

  22. Slide 22: Trend in Performance

    Appendix (6) Trend in Performance (JPY Bn) 13.3 14.3 14.3 Q1 15.3 Q1 Total Revenues 1,055.8 1,341.7 276.1 437.7 Net Income *1 111.9 186.8 45.0 68.6 Segment Assets 6,382.7 7,281.4 6,450.0 7,182.0 Total Assets 8,439.7 9,069.4 8,218.9 8,980.7 Shareholders' Equity 1,643.6 1,918.7 1,690.2 1,943.5 Shareho

  23. Slide 23: Profit by Segment

    Appendix (7) Profit by Segment (JPY Bn) 13.3 14.3 14.3 Q1 15.3 Q1 Change Corporate Financial Services 25.9 24.9 5.2 5.9 112% M i t Maintenance LLeasing i 34 9 34.9 37 1 37.1 11 0 11.0 11 0 11.0 100% Real Estate 5.6 18.0 5.5 10.8 196% Investment and Operation 34.9 94.1 10.7 9.8 92% Retail 43.2 49.9 1

  24. Slide 24: Assets by Segment

    Appendix (8) Assets by Segment (JPY Bn) By Segment 13.3 14.3 15.3 Q1 Corporate Financial Services 943.3 992.1 994.8 Maintenance Leasing 549.3 622.0 637.1 Real Estate 1,133.2 962.4 916.1 Investment and Operation 444 3 444.3 565 7 565.7 568 4 568.4 Retail 1,994.1 2,167.0 2,131.1 Overseas Business 1,31

  25. Slide 25: Overseas Business Segment Assets by Region/Business Line

    Appendix (9) Overseas Business Segment Assets by Region/Business Line (JPY Bn) By Region 13.3 14.3 15.3 Q1 Americas 475.9 518.1 621.4 Asia / Australia 492.4 655.6 543.6 Greater China 180 4 180.4 196 6 196.6 198 7 198.7 Middle East / Europe 15.9 41.9 40.1 Robeco - 375.1 368.5 Oth Other 153 7 153.7 18

  26. Slide 26: Real Estate Portfolio

    Appendix (10) Real Estate Portfolio 1 ■ Trend in Real Estate Segment Assets by Type (JPY Bn) 13.3 14.3 15.3 Q1 Rental Property 754.4 665.8 616.7 Under Lease 603.4 536.9 506.1 Under Development 151.0 128.9 110.6 Condo Assets 55.4 31.1 29.9 NRL / Specified Bonds 113.4 48.8 ＊ 43.3 Operating Facilities

  27. Slide 27: Real Estate Portfolio

    Appendix (11) Real Estate Portfolio 2 ■ Rental Property Assets by Type (14.6) (JPY Bn) Under Lease Under Property Type Total Balance NOI Yield Development Office Buildings 179.8 3.9% 49.2 229.0 Logistics Centers 20.2 7.8% 1.9 22.1 Commercial Facilities 119.4 6.3% 24.2 143.6 Rental Condos 59.4 4.6% 7

  28. Slide 28: Robeco

    Appendix (12) Robeco (JPY Bn) 14.3 Q2 14.3 Q3 14.3 Q4 15.3 Q1 Segment Profits 4.4 5.9 11.2 8.3 Segment Seg e t Assets ssets 328.9 3 89 365.0 365 0 375.1 3 5 368.5 368 5 ROA (After Tax) 3.3% 3.7% 5.0% 5.7% (EUR Bn) 14 3 Q2 14.3 14 3 Q3 14.3 14 3 Q4 14.3 15 3 Q1 15.3 End of Period AUM 197.1 205.2 210.

  29. Slide 29: Funding and Liquidity

    Appendix (13) Funding and Liquidity (JPY Bn) 13.3 14.3 15.3 Q1 CP 151 5 151.5 101 0 101.0 162 0 162.0 Borrowings from Financial Institutions 2,368.0 2,638.8 2,584.5 Bonds / MTN 1,283.0 1,174.8 1,147.6 Deposits 1,078.6 1,206.4 1,195.3 Subtotal 4,881.1 5,121.1 5,089.4 ABS, CMBS 679.8 253.8 225.4 g Sho

  30. Slide 30: Asset Quality

    Appendix (14) Asset Quality ■ Asset Quality (Adjusted **) (JPY Bn) 13.3 14.3 15.3 Q1 Investment in Direct Financing Leases 826.4 971.4 983.2 90+Days Past-Due Direct Financing Leases 15.8 13.9 15.0 Installment Loans 2,176.1 2,155.2 2,196.4 90+Days Past-Due Loans 7.7 6.1 5.9 Not individually Evaluated

  31. Slide 31: Reconciliation Table of Non-GAAP Financial Measurement 1

    Appendix (15) Reconciliation Table of Non-GAAP Financial Measurement 1 These materials include certain financial measures presented on a basis not in accordance with U.S. GAAP, or non-GAAP measures, including total assets and long-term liabilities excluding liabilities in line with securitized trans

  32. Slide 32: Reconciliation Table of Non-GAAP Financial Measurement 2

    Appendix (16) Reconciliation Table of Non-GAAP Financial Measurement 2 (JPY Bn) Key Ratio 13.3 14.3 15.3 Q1 Total Assets （a） 8,439.7 9,069.4 8,980.7 Deduct: Payables under Securitized Leases, Loan Receivables and 679 8 679.8 253 8 253.8 225 4 225.4 Investment in Securities Adjusted Total Assets （b）

  33. Slide 33: Reconciliation Table of Non-GAAP Financial Measurement 3

    Appendix (17) Reconciliation Table of Non-GAAP Financial Measurement 3 (JPY Bn) Consolidated Corporate Investment Maintenance Overseas Segment Financial Segment Profit Details Financial Real Estate and Retail Total Leasing Business Total Statement Services Operation Adjustment Base Profits *1 26.1 3

  34. Slide 34: Reference Data

    Reference Data Copyright © 2014 ORIX Corporation All rights reserved. 33

  35. Slide 35: Macro Economic Indicators

    Macro Economic Indicators National CPI (Ex Fresh Food) Trends in Machineryy Orders (YoY Change) (Indicator of Capital Expenditure) (% Change) (JPY Tn) 10 0 10.0 3.0 3 0 16 1.6 8.0 1.4 2.5 6.0 1.2 2.0 10 1.0 4.0 1.5 0.8 2.0 0.6 1.0 0.0 Private demand excl. volatile orders*(Left） 04 0.4 Manufacturing

  36. Slide 36: Japanese Corporate Indices

    Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate Diffusion Index (Q t l B (Quarterly Basis) i) (JPY Tn) (Cases ) 4.0 4,500 30 4,000 20 3.0 3,500 10 2.0 3,000 0 1.0 2,500 -10 0.0 2,000 -20 10.6 11.6 12.6 13.6 14.6 10.6 11.6 12.6 13.6 14.6 Liabilities Bankruptcies Large Medium Small

  37. Slide 37: Japanese Real Estate Indicators

    Japanese Real Estate Indicators Japan TSE REIT Index Office Rental Rates (Yen per 3.3㎡) 2 000 2,000 20 000 20,000 16,000 1,500 12,000 1,000 8,000 500 4,000 0 0 10.6 11.6 12.6 13.6 14.6 10 6 10.6 11 6 11.6 12 6 12.6 13 6 13.6 14 6 14.6 Tokyo Avg. Rent Osaka Avg. Rent Source: Tokyo y Stock Exchange g

  38. Slide 38: Domestic Lease Business Indicators

    Domestic Lease Business Indicators Private Equipment q p Investment New Car Sales (JPY Bn) (1,000 Units) 100,000 12.0% 7,000 14.0% 10.0% 6,000 12.0% 80,000 5,000 10.0% 8.0% , 60,000 4 000 4,000 8 0% 8.0% 6.0% 40,000 3,000 6.0% 4.0% 2,000 4.0% 20,000 2.0% 1,000 2.0% 0 0.0% 0 0.0% 02.3 04.3 06.3 08.3

  39. Slide 39: Other Domestic Indicators

    Other Domestic Indicators Number of condominium sold in the Domestic Shipping Amount of Solar Cell Tokyo metropolitan area (Cases) (MW) 70,000 10,000 60,000 Others 8,000 50,000 Residential 6 000 6,000 40,000 30,000 4,000 20,000 2,000 10,000 0 0 08 3 08.3 09 3 09.3 10 3 10.3 11 3 11.3 12 3 12.3 13 3

  40. Slide 40: Other Domestic Indicators

    Other Domestic Indicators The number of M&A The number of the New Listed Companies (Cases) (Cases) OUT-IN 90 3,000 IN-OUT 80 2,500 IN-IN 70 2,000 60 50 1,500 40 1,000 30 20 500 10 0 0 02.12 04.12 06.12 08.12 10.12 12.12 05.12 07.12 09.12 11.12 13.12 14.1-6 Source: RECOF Corporation Source: Tokyo Sto

  41. Slide 41: Other Domestic Indicators

    Other Domestic Indicators Retail Life Insurance Consumer Finance Loans (JPY Bn) (JPY Bn) 25,000 14,000 12,000 20,000 10,000 15,000 , 8 000 8,000 6,000 10,000 4,000 5,000 2,000 0 0 02 3 02.3 04 3 04.3 06 3 06.3 08 3 08.3 10 3 10.3 12 3 12.3 14 3 14.3 02 3 02.3 04 3 04.3 06 3 06.3 08 3 08.3 10 3 10.3

  42. Slide 42: Disclaimer

    Disclaimer  These materials have been prepared by ORIX Corporation (“ORIX” or the “Company”) solely for your information and are subject to change without notice. The information contained in these materials has not been independently verified and its accuracy is not guaranteed. No representations,

  43. Slide 43: Additional Information

    Additional Information For annual and more historical data please access our website. A list of major disclosure materials is given below. ORIX W Website: bi URL: http://www.orix.co.jp/grp/en/ URL h // i j / / / IR Website: URL: http://www.orix.co.jp/grp/en/ir/ If you would ld lik like to b be iincl

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