Slide 1: Second Quarter Consolidated Financial Results
ORIX Corporation Second Quarter Consolidated Financial Results For the Six-Month Period Ended September 30, 2019 Makoto Inoue Member of the Board of Directors Representative Executive Officer President & CEO October 29, 2019 (TSE: 8591; NYSE: IX) 1 Company Name Copyright © 2019 ORIX Corporation All
Slide 2: Overview (1) Net Income / ROE
Overview（1） Net Income / ROE ✓ 159.2 JPY bn in net income, up by 2.6% YoY. Annualized ROE at 10.9% Net Income* and ROE Reference: Past Quarter ROE (JPY Bn) 15.2% 15.0% 000 100 11.7% 12.1% 13.2% 12.5% 14.3% 13.7% 11.9% 11.5% 12.3% 35 0. 0 11.5% 11.3% 11.6% 11.3% 10.9% 13.0% 00 900 9.6% 8.5% 9.6% 13.7
Slide 3: Overview (2) Breakdown of Segment Profits
Overview（2） Breakdown of Segment Profits FY20.3 H1 Of which 155.9 JPY bn up by 3% YoY (+4.6 JPY bn) Segment Profits Other than Exceeded the level of last year with the contribution of new M&A (NXT, Avolon), gains on sales although there are a few segments where the profits decreased YoY 230.4 JPY bn
Slide 4: Overview (3) Segment Profits / Segment Assets
Overview（3） Segment Profits / Segment Assets ✓ Segment Profits: 230.4 JPY bn Real Estate, Investment and Operation and Overseas Business increased YoY while Corporate Financial Services, Maintenance Leasing and Retail decreased YoY ✓ Segment Assets: 10.4 JPY tn up by 4% YTD (+435.0 JPY bn) *Includes
Slide 5: Overview (4) Funding structure / Employed Capital Ratio
Overview（4） Funding structure / Employed Capital Ratio ✓ Funding structure : Diversified funding methods and maintained a high ratio of long-term debt ✓ Employed Capital Ratio : Continue to pursue growth while controlling risk and return Breakdown of Funding and Shareholder’s Equity / Trend in Long-
Slide 6: The Changes to Medium-Term Strategic Directions
The Changes to Medium-Term Strategic Directions Copyright © 2019 ORIX Corporation All rights reserved. 6
Slide 7: The Background of Medium-Term Strategic Directions Change
The Background of Medium-Term Strategic Directions Change Current Management Goals Backgrounds and the Reason of the Change ・With the uncertain in external environments, it is ・Recession becoming clearer and increasing geopolitical risks challenging to achieve the targets of ROE, profit growth ・Dist
Slide 8: Medium to Long-Term Strategic Directions (1)
Medium to Long-Term Strategic Directions （1） FY19.3 to FY21.3 Present After the Change Profit Annual net income growth FY20.3 (E) Net income: Growth at between 4-8% 300 JPY bn (▲7% YoY, pre-tax profit +9%) Capital FY21.3 (E) Net income: Efficiency ROE at 11% or higher To be announced in May 2020 Fin
Slide 9: Medium to Long-Term Strategic Directions (2)
Medium to Long-Term Strategic Directions （2） ✓ Promoted financial soundness after the global financial crisis. Managed to achieve major improvement since then Transition of key financial indicators FY2008.3 FY2019.3 1. Financial leverage D/E ratio (excluding deposits) 4.6 times 1.6 times 2. Dependen
Slide 10: Medium to Long-Term Strategic Directions (3)
Medium to Long-Term Strategic Directions （3） ✓ After April 2018, continued to make portfolio replacement in line with medium to long-term growth view ✓ Continue to promote replacement at the right time with medium to long-term vision New Investment Sales After April 2018 After April 2018 New investm
Slide 11: Medium to Long-Term Strategic Directions (4)
Medium to Long-Term Strategic Directions （4） ✓ Expected timing of investment and the expected timing for the start of profit contribution from the pipelines ✓ The pipeline only incorporates the projects with high likelihood of ORIX’s engagement. The size of the bubble expresses the investing period
Slide 12: Medium to Long-Term Strategic Directions (5)
Medium to Long-Term Strategic Directions （5） ✓ Aiming to sustain profit growth by executing projects in the pipeline and replacing portfolio Net income prospect Existing Real Estate Environment and Energy Investment and Operation Concession Asset Management MICE-IR New M&A and Others Gains on Sales
Slide 13: Medium to Long-Term Strategic Directions (6)
Medium to Long-Term Strategic Directions （6） ✓ Aiming to achieve ROE11% at an early stage ROE prospect 12.0% 11.6% 11.0% FY19.3 FY20.3 FY21.3 FY22.3 FY23.3 FY24.3 FY25.3 FY26.3 FY27.3 FY28.3 FY29.3 FY30.3 ROE ROE (including gains on sales) Copyright © 2019 ORIX Corporation All rights reserved. 13
Slide 14: Summary
Summary FY20.3 H1 net income was 159.2 JPY bn (up by 2.6%), annualized ROE at 10.9% Maintain flexibility toward future growth Changed Medium-Term Strategic Directions until FY2021.3 Aiming to achieve ROE 11% at an early stage Maintain financial soundness and make maximum effort to maintain single A
Slide 15: Segment Performance
Segment Performance Copyright © 2019 ORIX Corporation All rights reserved. 15
Slide 16: (blank)
(blank) Copyright © 2019 ORIX Corporation All rights reserved. 16
Slide 17: Segment Performance (1) Corporate Financial Services
Segment Performance（1） Corporate Financial Services *As the figures less than 0.1 JPY bn are rounded off, the total of individual business unit figures does not necessarily match the segment figures Segment Profits: 9.2 JPY bn YoY ▲7.6 JPY bn (▲45％) Segment Assets: 997.0 JPY bn YTD +37.2 JPY bn (+4％
Slide 18: Segment Performance (1) Corporate Financial Services
Segment Performance（1） Corporate Financial Services （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Finance revenues 37.4 36.0 32.4 30.7 28.8 15.7 12.2 78% Gains on investment securities and dividends 1.0 7.1 2.5 17.1 -0.8 1.0 0.7 68% Operating leases 24.5 25.5 25.6 23.4 23.
Slide 19: Segment Performance (2) Maintenance Leasing
Segment Performance（2）Maintenance Leasing Segment Profits: 16.6 JPY bn YoY ▲4.0 JPY bn (▲19％) Segment Assets: 886.3 JPY bn YTD +12.5 JPY bn (+1％) ✓ Revenues from both Auto and Rentec increased. SG&A increase from service ✓ Remained at the same level as FY19.3 improvement partly caused profit decreas
Slide 20: Segment Performance (2) Maintenance Leasing
Segment Performance（2） Maintenance Leasing （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Finance revenues 11.7 12.5 13.4 14.2 14.4 7.1 7.7 108% Operating leases 185.7 188.9 187.3 189.7 198.0 98.0 102.0 104% Services income 62.5 66.8 66.3 67.8 70.6 34.1 34.3 100% Segment Re
Slide 21: Segment Performance (3) Real Estate
Segment Performance（3） Real Estate Segment Profits: 46.2 JPY bn YoY +2.0 JPY bn (+5％) Segment Assets: 742.4 JPY bn YTD +22.2 JPY bn (+3％) ✓ Gains on sales from ORIX Living, etc. ✓ Assets decreased due to some selling while new investments continue ✓ Profits from real estate asset management remained
Slide 22: Segment Performance (3) Real Estate
Segment Performance（3） Real Estate （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Finance revenues 4.2 6.9 2.4 2.1 2.1 1.0 1.4 141% Operating leases 71.4 67.9 96.0 55.2 72.5 41.4 36.3 88% Gains on Rental Property Sales 15.5 16.8 50.6 14.3 35.0 21.5 18.4 85% Sales of goods a
Slide 23: Segment Performance (4) Investment and Operation
Segment Performance（4） Investment and Operation Segment Profits: 28.4 JPY bn YoY +3.5 JPY bn (+14％) Segment Assets: 773.0 JPY bn YTD +39.4 JPY bn (+5％) ✓ Gains on sales in private equity investment in Q1. ✓ Invested in Wako Pallet, a major seller and leaser of logistics equipment ✓ Profits from conc
Slide 24: Segment Performance (4) Investment and Operation
Segment Performance（4） Investment and Operation （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Finance revenues 16.0 12.9 11.0 9.3 9.1 5.2 3.3 64% Gains on investment securities and dividends 9.3 10.2 12.9 7.6 0.1 0.6 0.7 124% Sales of goods and real estate 276.5 596.7 825.
Slide 25: Segment Performance (5) Retail
Segment Performance（5）Retail Segment Profits: 43.2 JPY bn YoY ▲6.0 JPY bn (▲12％) Segment Assets: 3,946.7 JPY bn YTD +375.3 JPY bn (+11％) ✓ Life insurance premium income increased with the number of policies increased. ✓ Investment in securities at life insurance business and installment loans at Pro
Slide 26: Segment Performance (5) Retail
Segment Performance（5） Retail （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Finance revenues 56.8 61.0 68.1 72.9 76.7 38.7 40.1 104% Life insurance premiums and related investment income 352.5 190.8 297.9 353.0 348.3 181.3 183.2 101% Segment Revenues 426.1 254.4 368.7 428.
Slide 27: Segment Performance (6) Overseas Business
Segment Performance（6） Overseas Business Segment Profits: 86.9 JPY bn YoY +19.1 JPY bn (+28%) Segment Assets: 3,087.3 JPY bn YTD ▲51.6 JPY bn (▲2％) ✓ Profit from new investments in FY19.3 and gains on sales in Asia in Q1 contributed ✓ Excluding foreign exchange impact of ▲116.8 JPY bn, segment asset
Slide 28: Segment Performance (6) Overseas Business
Segment Performance（6） Overseas Business （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Finance revenues 67.3 79.4 85.1 98.4 111.6 49.5 61.7 125% Gains on investment securities and dividends 29.8 16.1 13.3 17.5 16.6 9.4 18.9 201% Operating leases 82.1 92.0 88.4 111.6 121.9
Slide 29: Appendix
Appendix Copyright © 2019 ORIX Corporation All rights reserved. 29
Slide 30: About ORIX: Proven Track Record of Profitability
About ORIX Proven Track Record of Profitability ✓ ORIX has achieved 54 years of sustained, profitable growth JPY Bn Net Income Attributable to ORIX Corporation Shareholders 350 300 250 FY2002.3 FY2009.3 Burst of IT bubble Global financial crisis 200 FY1998.3 Asian currency crisis 150 FY1993.3 Burst
Slide 31: About ORIX: Expertise in Business and Collective Capabilities
About ORIX Expertise in Business and Collective Capabilities of the Group ✓ ORIX will continue to enhance our expertise in finance and tangible assets as we synergistically expand our businesses Copyright © 2019 ORIX Corporation All rights reserved. 31
Slide 32: About ORIX: Profits and Assets by Segment
About ORIX Profits and Assets by Segment ✓ Individual businesses demonstrate their strengths to the maximum extent possible to bring about synergies 6% Corporate Financial Finance and fee business 10% Services 31% Segment Profits Automobile leasing and rentals, car-sharing; Maintenance Leasing test
Slide 33: About ORIX: Global Network
About ORIX Global Network ✓ Using its expertise cultivated in Japan, ORIX has expanded its business globally, with operations in 37 countries and regions worldwide Copyright © 2019 ORIX Corporation All rights reserved. 33
Slide 34: Appendix (1) Performance Overview
Appendix（1） Performance Overview （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Total Revenues 2,174.3 2,369.2 2,678.7 2,862.8 2,434.9 1,262.0 1,112.7 88% Net Income *1 234.9 260.2 273.2 313.1 323.7 155.1 159.2 103% Segment Assets 9,464.8 9,246.3 9,201.9 9,098.9 9,997.7 9,6
Slide 35: Appendix (2) Profits by Segment
Appendix（2） Profits by Segment （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Corporate Financial Services 25.5 42.4 38.0 49.3 25.5 16.8 9.2 55% Maintenance Leasing 40.4 42.9 39.8 40.2 38.8 20.6 16.6 81% Real Estate 9.8 52.3 84.5 74.4 89.2 44.2 46.2 105% Investment and Oper
Slide 36: Appendix (3) Assets by Segment
Appendix（3） Assets by Segment （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YTD) Corporate Financial Services 1,203.4 1,133.9 1,086.0 991.8 959.7 966.4 997.0 104% Maintenance Leasing 750.7 783.0 806.7 847.2 873.8 859.0 886.3 101% Real Estate 1,054.9 917.7 843.9 802.0 720.2 783.
Slide 37: Appendix (4) Income Statement Data
Appendix（4） Income Statement Data （JPY Bn） Change FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Finance revenues 192.8 208.2 211.9 228.3 242.9 117.4 126.1 107% Gains on investment securities and dividends 56.4 35.8 30.3 43.3 16.0 11.7 20.4 174% Operating leases 124.9 128.8 155.1 127.3 156
Slide 38: Appendix (5) Funding
Appendix（5） Funding （JPY Bn） Change Funding FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) CP 89.6 102.4 50.1 54.9 41.1 79.8 15.8 -64.0 Borrowings from Financial Institutions 2,881.6 2,970.6 2,958.2 3,056.2 3,279.4 2,999.5 3,219.7 220.2 Bonds / MTN 1,151.5 938.1 885.1 940.1 997.5 935.2 957
Slide 39: Financials (1) Funding Structure
Financials（1） Funding Structure ✓ Diversified funding. Controlled costs while maintaining a high long-term debt ratio Breakdown of Funding Trend in Funding Costs and Long-term Debt Ratio* *Excluding deposits 5.00% 100% Deposits 33% 4.00% 80% As of Sep 30, 2019 3.00% 60% ABS, CMBS 2.00% 40% 2% Borrow
Slide 40: Financials (2) Debt-to-Equity Ratio
Financials（2） Debt-to-Equity Ratio ✓ Debt-to-Equity Ratio continuously stays at a low level Trend in Debt-to-Equity Ratio (JPY Tn) 7 2.7× 6 2.5× Total ORIX Corporation 2.3× Shareholders’ Equity 5 2.2× 2.2× 2.2× 2.1× 1.9× Deposits 4 1.7× 1.6× 1.5× 1.5× 3 Short- and Long-Term Debt （Excluding Deposits)
Slide 41: Financials (3) Bond Maturity Ladder
Financials（3） Bond Maturity Ladder ✓ Leveled out annual redemption amounts by dispersing bond maturities Maturity Ladder (As of Sep 30, 2019) (JPY Bn) 150 Matured 100 ORIX Domestic Bond for Institutional Investors ORIX Domestic Bond for Retail Investors 50 ORIX Overseas Bond / Local Subsidiary Bond
Slide 42: Performance in Three Categories
Performance in Three Categories See P.45 for details on the three categories Growth in Finance will not be proactively sought under the current low interest rate environment; rather, efforts will be made to maintain the current status. Focus will continue to be put on Operation and Investment with h
Slide 43: Business Portfolio in Three Categories Segment Profits
Business Portfolio in Three Categories Segment Profits （JPY Bn） Change The 3 categories Sub Categories FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YoY) Finance Japan 43.3 50.4 56.0 73.4 54.2 31.4 23.6 75% Overseas 31.2 32.3 41.4 15.5 13.7 0.8 12.7 1581% Subtotal 74.5 82.6 97.3 88.8 67.9 32.2
Slide 44: Business Portfolio in Three Categories Segment Assets
Business Portfolio in Three Categories Segment Assets （JPY Bn） Change The 3 categories Sub Categories FY15.3 FY16.3 FY17.3 FY18.3 FY19.3 19.3 H1 20.3 H1 (YTD) Finance Japan 2,817.2 2,869.3 2,961.0 2,999.7 3,176.7 3,046.1 3,378.1 106% Overseas 801.8 868.3 901.3 977.4 1,025.6 1,032.2 997.3 97% Subtota
Slide 45: Business Portfolio in Three Categories
Business Portfolio in Three Categories Finance Operation Investment Main Risk Credit risk Operation/Business risk Market risk Category Capital Requirement Low Medium-High High Environment/ Financial Maintenance Fixed Tangible Japan Overseas Others Equity Infrastructure Services Services Income Asset
Slide 46: Shareholders Return
Shareholders Return ✓ The interim dividend at 35 yen per share in FY20.3 ✓ The full year dividend in FY20.3 will be either a payout ratio of 30% or 76 yen per share, whichever is higher ✓ Maintain optimal balance between investment opportunities for sustainable future profit growth and stable shareh
Slide 47: 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 48: ORIX Corporation
For the current IR materials and archives of past financial data, please access our website. IR Section https://www.orix.co.jp/grp/en/ir/ IR Library https://www.orix.co.jp/grp/en/ir/library/ ORIX Corporation Corporate Planning Department World Trade Center Building, 2-4-1, Hamamatsu-cho, Minato-ku,