Orix Corporation · TSE:8591
Orix — H1 FY2018.3 Earnings Presentation
42 slides from Orix's earnings presentation, Oct 31, 2017
Slide 1: Second Quarter Consolidated Financial Results
ORIX Corporation Second Quarter Consolidated Financial Results For the Six-Month Period Ended September 30, 2017 Makoto Inoue President & CEO Kazuo Kojima Deputy President & CFO October 31, 2017 (TSE: 8591; NYSE: IX) 1 Company Name Copyright © 2017 ORIX Corporation All rights reserved.
Slide 2: Overview (1)
Overview（1） ✓ 166.0bn yen in net income, up by 17% YoY ✓ Annualized ROE at 13.0% Net Income* and ROE (JPY Bn) 14.7% 200 13.0% 12.2% 150 100 161.3 142.2 166.0 50 0 16.3 H1 17.3 H1 18.3 H1 Net Income ROE (annualized) *Net Income refers to Net Income Attributable to ORIX Corporation Shareholders Copyri
Slide 3: Overview (2)
Overview（2） ✓ Segment profits at 249.8bn 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 large exit gain Segment Profits (J
Slide 4: Overview (3)
Overview（3） ✓ Segment assets at 9,116.2bn yen, up by 2% YTD ✓ Increased in Overseas Business, Investment and Operation and Maintenance Leasing ✓ Decreased in Retail assets due to the sale of investment securities by ORIX Life Insurance (OLI) as well as run-off in HLIKK (JPY Tn) Segment Assets and RO
Slide 5: Overview (4)
Overview（4） Pretax profits: 33.4bn yen increase YoY (+15%) ✓ Positive contribution to the existing operation from aircraft and ship-related, concession, asset management, environment and energy and banking business ✓ Gain on sales remained at similar level to FY17.3 H1 Segment assets: 159.3bn ye
Slide 6: Performance in Three Categories
See P.37 for details on the Performance in Three Categories three categories ✓ Operation: Profit growth in Robeco and contribution by BFIM Good performance in concession business, environment and energy business ✓ Investment: Strong profit growth in aircraft and ship-related business Segment Profits
Slide 7: FY18.3 H1 Key Achievements
FY18.3 H1 Key Achievements ✓ New investments of approximately 450bn yen in the “Operation” and “ Investment” ✓ Maintain solid investment pipeline ✓ Leverage outcome in various business areas for future growth Businesses Major progress • Mega solar power generation making good progress（as of the end
Slide 8: Mid-Term Strategic Directions
Mid-Term Strategic Directions Management Targets from FY2019.3 Profit Growth Annual net income growth at between 4-8% Capital Efficiency ROE above 11% Financial Soundness Maintain single A credit rating ERM with global best practice Shareholders returns policy ・ Dividend payout ratio target at 27% ・
Slide 9: Dividends and Payout Ratio
Dividends and Payout Ratio ✓ Interim dividend at 27 yen per share, up by 17% YoY ✓ Dividend payout ratio at 27% for FY18.3 ✓ Maintain the optimal balance between investment opportunities for sustainable future profit growth and stable dividend growth Dividend per Share* and Payout Ratio 27% (JPY) 70
Slide 10: Summary
Summary FY18.3 H1 net income achieved at 166.0bn yen, up 17% YoY, annualized ROE at 13.0% Steady progress in various investments for further growth Optimal balance between sustainable growth and shareholders returns Copyright © 2017 ORIX Corporation All rights reserved. 10
Slide 11: Appendix
Appendix Copyright © 2017 ORIX Corporation All rights reserved. 11
Slide 12: 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 200 IT Bubble implodes 150 FY1998.3 Asian currency crisis FY1993.3 100 Japan'
Slide 13: 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. 13
Slide 14: 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 9% Loan, Leasing, Fee businesses Services 27% 10% Automobile leasing and rentals, Car sharing, Test and Segment
Slide 15: 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. 15
Slide 16: About ORIX: Business Model
About ORIX Business Model ✓ Contribute to society by identifying changes in society and markets to create new value Copyright © 2017 ORIX Corporation All rights reserved. 16
Slide 17: Appendix (1) Performance Overview
Appendix（1） Performance Overview （JPY Bn） Change FY16.3 FY17.3 17.3 H1 18.3 H1 (YoY) Total Revenues 2,369.2 2,678.7 1,221.1 1,517.8 124% Net Income *1 260.2 273.2 142.2 166.0 117% Segment Assets 8,972.4 8,956.9 8,536.2 9,116.2 107% Total Assets 10,992.9 11,231.9 10,782.7 11,426.0 106% Shareholders'
Slide 18: Appendix (2) Profits by Segment
Appendix（2） Profits by Segment （JPY Bn） Change FY16.3 FY17.3 17.3 H1 18.3 H1 (YoY) Corporate Financial Services 42.4 38.0 19.9 22.0 111% Maintenance Leasing 42.9 39.8 19.7 20.4 104% Real Estate 42.9 72.8 35.4 44.0 124% Investment and Operation 57.2 85.0 52.0 38.9 75% Retail 51.8 72.9 35.5 43.0 121%
Slide 19: Appendix (3) Assets by Segment
Appendix（3）Assets by Segment （JPY Bn） Change 16.3 17.3 16.9 17.9 (YTD) Corporate Financial Services 1,049.9 1,032.2 1,034.4 1,001.5 97% Maintenance Leasing 731.3 752.5 724.2 782.5 104% Real Estate 739.6 657.7 705.1 628.9 96% Investment and Operation 704.2 768.7 695.8 863.6 112% Retail 3,462.8 3,291.
Slide 20: Appendix (4) Income Statement Data
Appendix（4） Income Statement Data （JPY Bn） Change FY16.3 FY17.3 17.3 H1 18.3 H1 (YoY) Finance revenues 200.9 200.6 96.6 106.5 110% Gains on investment securities and dividends 35.8 30.3 15.2 20.5 135% Operating leases 128.8 155.1 74.8 72.7 97% Life insurance premiums and related investment income 68
Slide 21: Appendix (5) Funding
Appendix（5） Funding （JPY Bn） Change Funding 16.3 17.3 16.9 17.9 (YoY) CP 102.4 50.1 14.0 71.2 57.2 Borrowings from Financial Institutions 2,970.6 2,958.2 2,769.1 3,044.4 275.3 Bonds / MTN 938.1 885.1 942.5 972.1 29.6 Deposits 1,398.5 1,614.6 1,490.2 1,698.4 208.2 ABS, CMBS 275.5 245.1 288.3 115.6 -1
Slide 22: Segment Performance
Segment Performance Copyright © 2017 ORIX Corporation All rights reserved. 22
Slide 23: Segment Performance (1) Corporate Financial Services
Segment Performance（1）Corporate Financial Services Segment profits: 22.0bn yen, up by 2.2bn yen YoY (+11%) ✓ Increase in services income YoY ✓ Gains on sales of investment securities and shares of affiliates were recognized Segment assets: 1,001.5bn yen, down by 30.7bn yen YTD (▲3%) ✓ Installmen
Slide 24: Segment Performance (1) Corporate Financial Services
Segment Performance（1）Corporate Financial Services （JPY Bn） FY16.3 FY17.3 17.3 H1 18.3 H1 Change (YoY) Finance revenues 34.2 30.2 15.5 14.9 96% Operating leases 25.5 25.6 12.2 11.5 94% Services income 35.7 40.6 20.1 20.9 104% Sales of goods and real estate and others 11.7 6.6 4.2 6.6 158% Segment Re
Slide 25: Segment Performance (2) Maintenance Leasing
Segment Performance（2）Maintenance Leasing Segment profits: 20.4bn yen, up by 0.8bn yen YoY (+4%) ✓ Increase in revenue in line with asset growth, despite the lower sales gains of used cars Segment assets: 782.5bn yen, up by 30.0bn yen YTD (+4%) ✓ Increase in new auto leases Segment Revenues/Prof
Slide 26: Segment Performance (2) Maintenance Leasing
Segment Performance（2）Maintenance Leasing （JPY Bn） FY16.3 FY17.3 17.3 H1 18.3 H1 Change (YoY) Finance revenues 12.1 13.0 6.4 7.0 110% Operating leases 188.8 187.2 93.3 94.5 101% Services income 66.8 66.3 33.3 33.7 101% Segment Revenues 271.7 270.6 134.8 137.0 102% Segment Expenses 228.7 230.8 115.2
Slide 27: Segment Performance (3) Real Estate
Segment Performance（3）Real Estate Segment profits: 44.0bn yen, up by 8.5bn yen YoY (+24%) ✓ Realized gains from well-timed sales of real estate assets, solid contribution from facility operation business Segment assets: 628.9bn yen, down by 28.8bn yen YTD (▲4%) ✓ Assets decreased due to the sale
Slide 28: Segment Performance (3) Real Estate
Segment Performance（3）Real Estate （JPY Bn） FY16.3 FY17.3 17.3 H1 18.3 H1 Change (YoY) Finance revenues 6.7 2.3 0.8 1.0 119% Operating leases 60.3 88.2 43.3 30.1 70% Gains on Rental Property Sales 16.1 49.7 23.0 12.6 55% Services income 110.6 112.6 55.9 60.9 109% Sales of goods and real estate and ot
Slide 29: Segment Performance (4) Investment and Operation
Segment Performance（4）Investment and Operation Segment profits: 38.9bn yen, down by 13.1bn yen YoY (▲25%) ✓ 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 Segment ass
Slide 30: Segment Performance (4) Investment and Operation
Segment Performance（4）Investment and Operation （JPY Bn） FY16.3 FY17.3 17.3 H1 18.3 H1 Change (YoY) Finance revenues 12.6 10.7 5.3 4.6 86% Gains on investment securities and dividends 10.3 13.0 6.2 4.4 70% Sales of goods and real estate 718.9 938.4 377.4 601.8 159% Services income 277.2 299.7 145.6 1
Slide 31: Segment Performance (5) Retail
Segment Performance（5）Retail Segment profits: 43.0bn yen, up by 7.4bn yen YoY (+21%) ✓ Finance revenue in banking business and Life insurance premiums increased ✓ Profits of HLIKK also increased YoY Segment assets: 3,209.1bn yen, down by 82.5bn yen YTD (▲3%) ✓ Assets decreased due to sales of bo
Slide 32: Segment Performance (5) Retail
Segment Performance（5）Retail （JPY Bn） FY16.3 FY17.3 17.3 H1 18.3 H1 Change (YoY) Finance revenues 55.3 59.2 28.9 30.9 107% Life insurance premiums and 190.8 297.9 116.4 181.9 156% related investment income Services income and others 8.2 11.6 5.8 6.7 117% Segment Revenues 254.3 368.7 151.1 219.5 145%
Slide 33: Segment Performance (6) Overseas Business
Segment Performance（6）Overseas Business Segment profits: 81.4bn yen, up by 29.9bn yen YoY (+58%) ✓ 4.1bn yen increased due to FX rate fluctuation ✓ Profit growth in aircraft and ship-related business as well as Robeco and asset management business in Americas Segment assets: 2,630.5bn yen, up by
Slide 34: Segment Performance (6) Overseas Business
Segment Performance（6）Overseas Business （JPY Bn） FY16.3 FY17.3 17.3 H1 18.3 H1 Change (YoY) Finance revenues 75.0 81.3 37.9 46.6 123% Gain on investment securities and dividends 16.1 13.3 5.6 11.3 202% Operating leases 92.0 88.5 43.5 57.3 132% Services income 250.1 216.7 105.9 117.0 111% Segment Rev
Slide 35: Segment Performance (6) Overseas Business
Segment Performance（6）Overseas Business ■Overseas Business segment assets breakdown （JPY Bn） Change By Region 16.3 17.3 16.9 17.9 (YTD) The Americas 787.2 879.3 703.0 896.2 102% Asia and Australia 592.3 593.6 551.1 638.6 108% Greater China 260.3 315.6 239.9 327.6 104% Middle East and Europe 49.3 36.
Slide 36: Business Portfolio in Three Categories
Business Portfolio in Three Categories Copyright © 2017 ORIX Corporation All rights reserved. 36
Slide 37: Business Portfolio in Three Categories
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 Services Income Ass
Slide 38: Business Portfolio in Three Categories: Segment Profits
Business Portfolio in Three Categories Segment Profits （JPY Bn） Change The 3 categories Sub Categories FY16.3 FY17.3 17.3 H1 18.3 H1 (YoY) Finance Japan 50.4 56.0 29.0 33.9 117% Overseas 32.3 41.4 18.1 15.2 84% Subtotal 82.6 97.3 47.1 49.1 104% Operation Environment/Infrastructure 21.8 37.0 16.6 20.
Slide 39: Business Portfolio in Three Categories: Segment Assets
Business Portfolio in Three Categories Segment Asssets （JPY Bn） Change The 3 categories Sub Categories 16.3 17.3 16.9 17.9 (YTD) Finance Japan 2,775.9 2,905.3 2,792.5 2,946.8 101% Overseas 868.3 901.3 801.0 971.1 108% Subtotal 3,644.2 3,806.6 3,593.6 3,917.8 103% Operation Environment/Infrastructure
Slide 40: Usage of Shareholders' Equity
Usage of Shareholders’ Equity ✓ Employed capital ratio* is controlled within the range meeting single A rating requirement ✓ Estimated employed capital ratio in FY18.3 is around 85% *ORIX calculation (Risk Capital/Shareholders’ Equity) Employed Capital Ratio Breakdown of Capital Employed （JPY Bn） 17
Slide 41: 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 42: 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