Orix Corporation · TSE:8591
Orix — Q1 FY2018.3 Earnings Presentation
35 slides from Orix's earnings presentation, Jul 31, 2017
Slide 1: First Quarter Consolidated Financial Results
ORIX Corporation First Quarter Consolidated Financial Results For the Three-Month Period Ended June 30, 2017 Kazuo Kojima Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of Treasury and Accounting Headquarters Takao Kato Corporate Senior Vice President, Deputy Head of
Slide 2: Overview (1)
Overview（1） ✓ 89.7bn yen in net income, up by 17% YoY ✓ Annualized ROE at 14.3% Net Income* and ROE (JPY Bn) 100 15.0% 14.3% 13.2% 80 89.7 60 81.5 76.8 40 16.3 Q1 17.3 Q1 18.3 Q1 Net Income ROE (annualized) *Net Income refers to Net Income Attributable to ORIX Corporation Shareholders Copyright © 20
Slide 3: Overview (2)
Overview（2） ✓ Segment profits at 134.5bn yen, up by 17% YoY ✓ Significant growth in Overseas Business, Real Estate and Retail ✓ Corporate Financial Services and Maintenance Leasing performed steadily ✓ Decreased in Investment and Operation due to the absence of the capital gain from PE investment in
Slide 4: Overview (3)
Overview（3） ✓ Segment assets at 8,901.3bn yen, down by 1% YTD ✓ Decreased in Retail assets due to the sale of investment securities by ORIX Life Insurance (OLI) and HLIKK’s run-off business ✓ Segment Assets ROA rose to 4.0% (JPY Tn) Segment Assets and ROA 10 4.0% 4.2% 3.6% 3.5% 3.7% 8 3.0% Overseas
Slide 5: Overview (4)
Overview（4） Pretax profits: 17.2bn yen increase YoY (+15%) ✓ Concession business, income from PE investment and Environment and energy business made positive contribution as part of the existing operation ✓ Profit of HLIKK decreased sharply due to the market fluctuation in the same period last FY
Slide 6: Segment Performance (1) Corporate Financial Services
Segment Performance（1）Corporate Financial Services Segment profits: 10.2bn yen, up by 1.7bn yen YoY (+20%) ✓ Increased in services income YoY ✓ Gains on sales of shares of affiliates were recognized (approximately 2.0bn yen) Segment assets: 1,007.4bn yen, down by 24.7bn yen YTD (▲2%) ✓ Installme
Slide 7: Segment Performance (2) Maintenance Leasing
Segment Performance（2）Maintenance Leasing Segment profits: 9.9bn yen, remained flat YoY (+0%) ✓ Revenue from auto-related business increased due to the increase of assets, despite of lower gains on sales of used cars Segment assets: 759.6bn yen, up by 7.1bn yen YTD (+1%) ✓ Increased in new auto
Slide 8: Segment Performance (3) Real Estate
Segment Performance（3）Real Estate Segment profits: 32.8bn yen, up by 9.2bn yen YoY (+39%) ✓ Realized gains from well-timed sales of real estate assets Segment assets: 655.9bn yen, down by 1.8bn yen YTD (▲0%) ✓ Assets decreased due to rental property sales Segment Revenues/Profits （JPY Bn） Segmen
Slide 9: Segment Performance (4) Investment and Operation
Segment Performance（4）Investment and Operation Segment profits: 16.7bn yen, down by 14.3bn yen YoY (▲46%) ✓ Profit from environment and energy business and concession business increased steadily, while the profit in PE investment decreased due to the absence of the large capital gain in this quart
Slide 10: Segment Performance (5) Retail
Segment Performance（5）Retail Segment profits: 22.0bn yen, up by 9.5bn yen YoY (+76%) ✓ Life insurance premiums increased ✓ Profits of HLIKK also increased compared to previous fiscal year when its profits dropped sharply Segment assets: 3,201.7bn yen, down by 89.9bn yen YTD (▲3%) ✓ Assets decrea
Slide 11: Segment Performance (6) Overseas Business
Segment Performance（6）Overseas Business Segment profits: 42.9bn yen, up by 13.0bn yen YoY (+44%) ✓ 0.5bn yen increased due to FX rate fluctuation ✓ Gains on sales of Asian PE investment and Houlihan Lokey shares were recognized Segment assets: 2,508.3bn yen, up by 54.1bn yen YTD (+2%) ✓ 15.6bn y
Slide 12: Performance in Three Categories
See P.31 for details on the Performance in Three Categories three categories ✓ Operation: Profit growth in environment and energy business, concession business, Life insurance and Robeco ✓ Investment: Strong profit growth in Tangible assets such as real estate and aircraft, while gain on sales of eq
Slide 13: Summary
Summary Q1 net income achieved at 89.7bn yen, up 17% YoY, annualized ROE at 14.3% Continuously focus on “Operation” and “Investment” Establish a cycle for generating stable earnings while turning over assets Copyright © 2017 ORIX Corporation All rights reserved. 12
Slide 14: Appendix
Appendix Copyright © 2017 ORIX Corporation All rights reserved. 13
Slide 15: About ORIX: Proven Track Record of Profitability
About ORIX Proven Track Record of Profitability ✓ ORIX has achieved 52 years of sustained, profitable growth Net Income Attributable to ORIX Corporation Shareholders JPY Bn 300 250 FY2009.3 FY2002.3 Global financial crisis IT Bubble implodes 200 FY1998.3 Asian currency crisis 150 FY1993.3 Japan's bu
Slide 16: About ORIX: Evolving and Dynamic Portfolio
About ORIX Evolving and Dynamic Portfolio ✓ORIX will continue to enhance our experience in finance and tangible assets as we synergistically expand our businesses Infrastructure Copyright © 2017 ORIX Corporation All rights reserved. 15
Slide 17: About ORIX: Business by Segment
About ORIX Business by Segment ✓ Our highly diversified company contains many complementary businesses, providing ample opportunity for synergies and knowledge sharing Corporate Financial Loan, Leasing, Fee businesses 9% Services 27% 10% Automobile leasing and rentals, Car sharing, Test and measurem
Slide 18: About ORIX: Global Network
About ORIX Global Network ✓ ORIX has spread its business globally by expanding operations in 36 countries and regions worldwide (As of 2017.3.31) Copyright © 2017 ORIX Corporation All rights reserved. 17
Slide 19: Appendix(1) Performance Overview
Appendix(1) Performance Overview （JPY Bn） Change FY16.3 FY17.3 17.3 Q1 18.3 Q1 (YoY) Total Revenues 2,369.2 2,678.7 587.9 792.3 135% Net Income *1 260.2 273.2 76.8 89.7 117% Segment Assets 8,972.4 8,956.9 8,570.2 8,901.3 104% Total Assets 10,992.9 11,231.9 10,762.9 11,317.9 105% Shareholders' Equity
Slide 20: Appendix(2) Profits by Segment
Appendix(2) Profits by Segment （JPY Bn） Change FY16.3 FY17.3 17.3 Q1 18.3 Q1 (YoY) Corporate Financial Services 42.4 38.0 8.5 10.2 120% Maintenance Leasing 42.9 39.8 9.9 9.9 100% Real Estate 42.9 72.8 23.6 32.8 139% Investment and Operation 57.2 85.0 31.0 16.7 54% Retail 51.8 72.9 12.5 22.0 176% Ove
Slide 21: Appendix(3) Assets by Segment
Appendix(3) Assets by Segment （JPY Bn） Change 16.3 17.3 16.6 17.6 (YTD) Corporate Financial Services 1,049.9 1,032.2 1,033.2 1,007.4 98% Maintenance Leasing 731.3 752.5 700.4 759.6 101% Real Estate 739.6 657.7 705.6 655.9 100% Investment and Operation 704.2 768.7 678.6 768.4 100% Retail 3,462.8 3,29
Slide 22: Appendix(4) Income Statement Data
Appendix(4) Income Statement Data （JPY Bn） Change FY16.3 FY17.3 17.3 Q1 18.3 Q1 (YoY) Finance revenues 200.9 200.6 48.1 54.0 112% Gains on investment securities and dividends 35.8 30.3 4.0 10.3 257% Operating leases 128.8 155.1 44.8 34.9 78% Life insurance premiums and related investment income 68.1
Slide 23: Appendix(5) Funding
Appendix(5) Funding （JPY Bn） Change Funding 16.3 17.3 16.6 17.6 (YoY) CP 102.4 50.1 35.9 132.1 96.2 Borrowings from Financial Institutions 2,970.6 2,958.2 2,863.3 3,002.5 139.2 Bonds / MTN 938.1 885.1 953.9 881.4 -72.5 Deposits 1,398.5 1,614.6 1,428.2 1,655.2 227.0 ABS, CMBS 275.5 245.1 283.1 241.3
Slide 24: Appendix(6) Corporate Financial Services
Appendix(6) Corporate Financial Services （JPY Bn） FY16.3 FY17.3 17.3 Q1 18.3 Q1 Change (YoY) Finance revenues 34.2 30.2 8.1 7.9 98% Operating leases 25.5 25.6 6.0 5.7 95% Services income 35.7 40.6 9.5 9.7 102% Sales of goods and real estate and others 11.7 6.6 1.4 2.0 149% Segment Revenues 107.2 103
Slide 25: Appendix(7) Maintenance Leasing
Appendix(7) Maintenance Leasing （JPY Bn） FY16.3 FY17.3 17.3 Q1 18.3 Q1 Change (YoY) Finance revenues 12.1 13.0 3.1 3.5 114% Operating leases 188.8 187.2 45.8 46.4 101% Services income 66.8 66.3 17.3 17.3 100% Segment Revenues 271.7 270.6 67.2 68.3 102% Segment Expenses 228.7 230.8 57.3 58.2 101% Seg
Slide 26: Appendix(8) Real Estate (1)
Appendix(8) Real Estate (1) （JPY Bn） FY16.3 FY17.3 17.3 Q1 18.3 Q1 Change (YoY) Finance revenues 6.7 2.3 0.4 0.5 122% Operating leases 60.3 88.2 28.4 16.5 58% Gains on Rental Property Sales 16.1 49.7 18.2 8.2 45% Services income 110.6 112.6 26.6 27.9 105% Sales of goods and real estate and others 13
Slide 27: Appendix(9) Real Estate (2)
Appendix(9) Real Estate (2) ■Breakdown of Real Estate Segment Assets （JPY Bn） Change 16.3 17.3 16.6 17.6 (YTD) Rental Property 493.4 378.8 463.2 352.3 93% Under Lease 406.1 322.1 386.5 308.3 96% Under Development 87.3 56.7 76.7 44.0 78% Operating Facilities 168.1 211.2 170.5 213.1 101% Hotels and In
Slide 28: Appendix(10) Investment and Operation
Appendix(10) Investment and Operation （JPY Bn） FY16.3 FY17.3 17.3 Q1 18.3 Q1 Change (YoY) Finance revenues 12.6 10.7 2.7 2.2 82% Gains on investment securities and dividends 10.3 13.0 0.7 3.1 416% Sales of goods and real estate 718.9 938.4 184.9 339.7 184% Services income 277.2 299.7 67.5 75.4 112%
Slide 29: Appendix(11) Retail
Appendix(11) Retail （JPY Bn） FY16.3 FY17.3 17.3 Q1 18.3 Q1 Change (YoY) Finance revenues 55.3 59.2 14.1 15.3 108% Life insurance premiums and 190.8 297.9 37.1 94.0 253% related investment income Services income and others 8.2 11.6 2.8 3.3 119% Segment Revenues 254.3 368.7 54.0 112.6 208% Segment Exp
Slide 30: Appendix(12) Overseas Business (1)
Appendix(12) Overseas Business (1) （JPY Bn） FY16.3 FY17.3 17.3 Q1 18.3 Q1 Change (YoY) Finance revenues 75.0 81.3 18.8 23.4 124% Gain on investment securities and dividends 16.1 13.3 2.3 6.0 268% Operating leases 92.0 88.5 22.7 26.2 115% Services income 250.1 216.7 55.1 56.6 103% Segment Revenues 52
Slide 31: Appendix(13) Overseas Business (2)
Appendix(13) Overseas Business (2) ■Overseas Business segment assets breakdown （JPY Bn） Change By Region 16.3 17.3 16.6 17.6 (YTD) The Americas 787.2 879.3 693.9 825.1 94% Asia and Australia 592.3 593.6 553.4 609.1 103% Greater China 260.3 315.6 239.3 318.5 101% Middle East and Europe 49.3 36.5 45.1
Slide 32: Appendix(14) Business Portfolio in Three Categories
Appendix(14) Business Portfolio in Three Categories Finance Operation Investment Main Risk Credit risk Operation/Business risk Market risk Categories Capital Requirement Low Medium-High High Environment/ Financial Maintenance Fixed Tangible Japan Overseas Others Equity Infrastructure Services Servic
Slide 33: Appendix (15) Usage of Shareholders' Equity
Appendix (15) Usage of Shareholders’ Equity ✓ Employed capital ratio* is controlled within the range meeting single A rating requirement ✓ Secure c.20% as a capital buffer for financial soundness and flexibility *ORIX calculation (Risk Capital/Shareholders’ Equity) Employed Capital Ratio Breakdown o
Slide 34: 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,
Slide 35: ORIX Corporation
For the current IR materials and archives of past financial data please access our website ORIX Website http://www.orix.co.jp/grp/en/ IR Section http://www.orix.co.jp/grp/en/ir/ ORIX Corporation Corporate Planning Department World Trade Center Building., 2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105-61