Slide 1: Second Quarter Consolidated Financial Results
ORIX Corporation Second Quarter Consolidated Financial Results For the Six-Month Period Ended September 30, 2023 Makoto Inoue Member of the Board of Directors Representative Executive Officer President & CEO November 1, 2023 1 Copyright © ORIX Corporation All rights reserved.
Slide 2: Net Income & ROE
Net Income & ROE ✓ 128.1 Bln JPY in FY24.3 H1 net income* (up 4.7% YoY), annualized ROE of 7.0% * Net income refers to Net Income Attributable to ORIX Corporation Shareholders. ✓ 65.1 Bln JPY in Q2 net income, up 4.7 Bln JPY (+8%) YoY and up 2.2 Bln JPY (+3%) QoQ Full fiscal year ( Bln JPY) Quarterl
Slide 3: Breakdown of Segment Profits
Breakdown of Segment Profits 167.4 Bln JPY, up by 16% YoY (+23.2 Bln JPY) FY24.3 H1 Base profits Base profits higher on solid performance in Real Estate, Concession from strong inbound Segment Profits 191.0 Bln JPY tourism, growth in investment income in Insurance +11% YoY Investment 23.6 Bln JPY, d
Slide 4: Segment Profits
Segment Profits ✓ Domestic segments all posted higher profits YoY ✓ Overseas segment profits lower owing to decline in investment gains, heavier hedging cost burden for foreign- currency denominated investments Segment Profits Breakdown ( Bln JPY) 23.3 24.3 QoQ YoY Highlight Overseas H1 H2 Q1 Q2 H1
Slide 5: Segment Assets
Segment Assets ✓ Segment assets higher primarily due to changes in forex (537.9 Bln JPY out of 841.6 Bln JPY vs. end-FY23.3 Q4) ✓ Investment in and lending to Toshiba, aircraft purchases also contributed Segment Assets Breakdown ( Bln JPY) Overseas 24.3 vs. end Highlight ROA*2 (33%）*1 Q2 23.3 Q4 12%
Slide 6: FY24.3 H1 Results and FY24.3, FY25.3 Targets
FY24.3 H1 Results and FY24.3, FY25.3 Targets [Overview] Net income up 4.7% YoY, 38.82% progress towards FY24.3 targets Major reasons : (1) investment gains H2 heavy, (2) US credit market trends and risk control, (3) higher USD/Euro interest rates FY24.3 FY25.3 H1 Results (YoY) Full-year Targets Targ
Slide 7: Business Climate and Management Direction
Business Climate and Management Direction Business Climate Management Direction Domestic: Outlook clouded but steady progress Base profits Solid results, mainly in Japan ✓ Influx of overseas capital ✓ Real estate (facility operations, condominium (low yen interest rates, capital movements from Chine
Slide 8: Capital Recycling
Capital Recycling ✓ H1 results of 23.6 Bln JPY (investment gains), profits set to rise sharply on realization of exits under consideration in H2 and beyond ✓ Exits centered on Real Estate (strong demand from overseas), domestic PE investment (many potential buyers). Sale of renewable energy assets,
Slide 9: Growth Strategy (1) - Inbound Tourism
Growth Strategy (1) - Inbound Tourism ✓ Concession turns profitable for the first time since pandemic, still room for significant growth ✓ Real estate: ADR higher on strategy to prioritize gross margin, profits approaching pre-COVID levels ✓ Aircraft leasing continues to recover on strong rebound in
Slide 10: Earnings Targets - FY24.3 Full Year
Earnings Targets - FY24.3 Full Year ✓ Risk control, slower profits at ORIX USA offset by stronger earnings in Japan (up 42% YoY), mainly at inbound tourism-rel. businesses ✓ Expect rebound in AUM at Robeco, strong demand for Aircraft and Ships (Full-year forex assumption: USD/JPY＝130、EUR/JPY=140） FY
Slide 11: Growth Strategy (2) – Renewable Energy (Overseas)
Growth Strategy (2) – Renewable Energy (Overseas) ✓ Flexibly conduct capital recycling while building portfolio of superior assets ✓ Elawan: Priority markets are Europe and North America, moving towards a highly profitable, liquid portfolio As of end-Sept 2023 Major geothermal energy firm, listed on
Slide 12: Growth Strategy (3) – PE Investment (Domestic)
Growth Strategy (3) – PE Investment (Domestic) ✓ DHC progress in line with plan: Created new management structure, moving forward in key post-merger integration (PMI) areas, rebuilding marketing efforts ✓ Toshiba LP equity stake, mezzanine loan financing completed in Sept 2023, will begin contributi
Slide 13: Purpose│ORIX Group Corporate Philosophy Revision
Purpose│ORIX Group Corporate Philosophy Revision ✓ Decided upon a new ORIX Group Purpose and Culture to replace the current corporate philosophy ✓ Based on the new Purpose and Culture, aim to foster a greater sense of unity among our people globally and increase our corporate value 13 Copyright © OR
Slide 14: Purpose│ORIX Group Corporate Philosophy Revision (Japanese Version)
Purpose│ORIX Group Corporate Philosophy Revision (Japanese Version) ✓ 企業理念体系を見直し、新たに「ORIX Group Purpose & Culture」を決定 ✓ PurposeとCultureを軸に、グローバルでさらなる一体感を醸成し、企業価値の向上を目指す 14 Copyright © ORIX Corporation All rights reserved.
Slide 15: Segment Information
Segment Information 15 Copyright © ORIX Corporation All rights reserved.
Slide 16: Corporate Financial Services and Maintenance Leasing
Corporate Financial Services and Maintenance Leasing Segment Profits (H1): 40.3 Bln JPY YoY +3.3 Bln JPY （+9％） Segment Assets : 1,523.4 Bln JPY YTD +9.3 Bln JPY (flat) ✓ Corporate Financial Services: Healthy fee business revenue, M&A brokerage, ✓ Corporate Financial Services: Remain careful in selec
Slide 17: Corporate Financial Services and Maintenance Leasing - About the Business
Corporate Financial Services and Maintenance Leasing - About the Business Main business: Finance and fee business; leasing and rental of automobiles, electronic measuring instruments and ICT-related equipment Corporate Financial Services Auto Rentec World leader in vehicles under Core platform for c
Slide 18: Real Estate
Real Estate Segment profits (H1) : 26.9 Bln JPY YoY +7.9 Bln JPY （+42％） Segment Assets : 1,004.4 Bln JPY YTD +69.4 Bln JPY（+7%） ✓ RE Investment and Facilities Operation: Profits higher on stronger facility ✓ Assets up, on new development for logistics centers and other operations earnings thanks to
Slide 19: Real Estate – About the Business
Real Estate – About the Business Main Business: Real estate development, rental and management; facility operation; real estate asset management Segment Assets Segment Asset Trends Unrealized gains on rental （as of end-March 2023） properties* DAIKYO Leased logistics facilities, office condominiums,
Slide 20: PE Investment and Concession
PE Investment and Concession Segment profits (H1) : 9.7 Bln JPY YoY +5.7 Bln JPY (＋141％) Segment Assets : 808.8 Bln JPY YTD +203.3 Bln JPY （+34％） ✓ PE investment: DHC (acquired FY23.3), others contribute to profits ✓ Assets up owing to investment in, loans to Toshiba ✓ Concession: Turns profitable o
Slide 21: PE Investment and Concession – About the Business
PE Investment and Concession – About the Business Currently invested in 18 companies (as of end-March 2023); aim to develop new business segments for ORIX Investment Track Record Investee Companies Leveraging our broad network and experience we have established a superior investment Management IT Se
Slide 22: Environment and Energy
Environment and Energy Segment profits (H1) : 8.1 Bln JPY YoY -0.6 Bln JPY（-7％） Segment Assets : 833.3 Bln JPY YTD +59.6 Bln JPY（+52.8 Bln JPY from forex） ✓ Domestic: Profits in line with year-earlier level thanks to sunny weather ✓ Assets increased, mainly due to changes in forex in Q2 ✓ Overseas:
Slide 23: Global Renewable Energy Portfolio
Global Renewable Energy Portfolio (as of end-Sept. 2023) ✓ Total net owned operating capacity of 4.3 GW worldwide ✓ Total operating capacity (incl. assets in operation, under construction, and in development): Elawan 10 GW, Greenko 18 GW Spain & other locations China Japan USA & other locations ・Ela
Slide 24: Insurance
Insurance Segment profits (H1) : 37.0 Bln JPY YoY +22.3 Bln JPY （＋151％） Segment Assets :2,105.7 Bln JPY YTD +55.3 Bln JPY（＋76.5 Bln JPY from forex） ✓ Profits higher on YoY growth in investment income, lower COVID-19 ✓ Assets increased, mostly due to changes in forex payouts ✓ Higher interest rates,
Slide 25: Life Insurance – About the Business
Life Insurance – About the Business ✓ Shift from mix dominated by third-sector products (such as medical insurance CURE) to a more well-balanced portfolio with introduction of first-sector products (including whole life insurance RISE, US dollar-denominated whole-life insurance Candle) ✓ The product
Slide 26: Banking and Credit
Banking and Credit Segment profits (H1) : 16.5 Bln JPY YoY +1.3 Bln JPY （+8％） Segment Assets : 2,705.8 Bln JPY YTD +7.1 Bln JPY (flat) ✓ Banking: Profits up YoY as higher interest rates bolstered financial ✓ Assets mostly flat revenues ✓ Credit: Segment profits mostly flat Segment Profits (Bln JPY)
Slide 27: Banking – About the Business
Banking – About the Business ✓ In addition to its mainstay real-estate investment loan business, ORIX Bank is strengthening its financing business to industries which support a sustainable society ✓ By utilizing its trust banking license, ORIX Bank will develop and sell financial products, such as s
Slide 28: Aircraft and Ships
Aircraft and Ships Segment profits (H1) : 10.4 Bln JPY YoY -0.2 Bln JPY （-2%） Segment Assets : 907.1 Bln JPY YTD+164.3 Bln JPY（＋87.2 Bln JPY from forex） ✓ Ships profits down on absence of last year’s opportunistic sell down of ✓ Assets higher due to changes in forex, aircraft purchases ship assets,
Slide 29: Aircraft and Ships – About the Business
Aircraft and Ships – About the Business GLOBALLY NARROWBODY OEM DIVERSE WEIGHTING BREAKDOWN Owned Committed ORIX （NBV） （number of aircraft） （number of aircraft） fleet fleet Aviation 58 0 ✓ Fully-owned subsidiary 12% 19% 27% Average age ✓ Mainly trading in second-hand market 6.6 5.3 years 47% ✓ Arran
Slide 30: ORIX USA
ORIX USA Segment profits (H1) : 16.3 Bln JPY YoY -5.3 Bln JPY（-24%） Segment Assets : 1,525.5 Bln JPY YTD +63.4 Bln JPY（＋175.8 Bln JPY from forex） ✓ Profits lower on absence of investment gains from last year’s PE exits ✓ Continuing to strengthen risk controls. While USD-based assets ✓ Stable financi
Slide 31: ORIX USA – About the Business
ORIX USA – About the Business ✓ A provider of capital and financing solutions to middle market companies in USA, targets growth in asset management for three key verticals (total AUM / AUA $75.1 Bln) ✓ Operates a hybrid strategy, investing own principal capital while providing capital market and ass
Slide 32: ORIX Europe
ORIX Europe Segment profits (H1) : 13.4 Bln JPY YoY -3.1 Bln JPY（-19%） Segment Assets : 453.0 Bln JPY YTD+35.1 Bln JPY（＋35.2 Bln JPY from forex） ✓ Profits at Robeco Group lower, as higher Euro interest rates resulted in an ✓ Assets higher, mostly due to changes in forex increase in hedging costs for
Slide 33: ORIX Europe – About the Business
ORIX Europe – About the Business ✓ Main Business: Equities, fixed income, renewable energy and other fund management ✓ Actively promoting ESG investing, especially through Robeco and Gravis Capital Management Established Major Subsidiaries Head Office Primary Business (Acquired) An ESG pioneer since
Slide 34: ORIX Group – Asset Management Business
ORIX Group – Asset Management Business ✓ Expansion in asset management business centered on Europe, US supports base profit growth ✓ Focus on management of diversified asset base, in addition to equities, fixed income, and alternative assets (Top domestic manager of renewable energy, aircraft, condo
Slide 35: Asia and Australia
Asia and Australia Segment profits (H1) : 12.4 Bln JPY YoY -12.0 Bln JPY（-49%） Segment Assets : 1,569.9 Bln JPY YTD+174.8 Bln JPY（＋110.4 BlnJPY fromforex） ✓ Decrease due to absence of gain on sale in an affiliate in the same period ✓ Assets up YTD, on favorable new lease executions in various countr
Slide 36: Asia and Australia – About the Business
Asia and Australia – About the Business ✓ Main Business: Leasing, lending, and investment businesses in Asia and Australia ✓ Leasing: Primarily industrial equipment and auto leasing across Asia and Australia. Investments: PE investments mainly in Greater China and South Korea Segment Assets by Busin
Slide 37: Appendices
Appendices 37 Copyright © ORIX Corporation All rights reserved.
Slide 38: ORIX by the Numbers
ORIX by the Numbers Strong profitability High growth Leading renewable energy 10-year net income CAGR provider in Japan Net income ROE (FY13.3-FY23.3) Renewable energy generating Capacity (worldwide) *2 290.3 Bln JPY 8.5% 10％ 4.3GW Enhanced shareholder returns Well-balanced earnings*1 Top-class inve
Slide 39: Capital Recycling - Profit Growth
Capital Recycling - Profit Growth (From FY23.3 H1 results presentation announced in Nov 2022 with some updates) ✓ Accelerated capital recycling model led to company-wide net income growth of 2.6X, CAGR of 10% (FY23.3 vs FY13.3) ✓ Also strengthened financial base, reducing D/E ratio from 2.7X to 1.6X
Slide 40: Reopening – Key Indicators
Reopening – Key Indicators ✓ Kansai International Airport international route passengers recovered to 80% of 2019 levels (Sept 2023) ✓ Aircraft lease rates (global average) and RevPAR (ORIX hotels/inns) have surpassed pre-COVID levels, continue to rise Business Indicators Narrow body aircraft lease
Slide 41: Investment Gains and Major Breakdown
Investment Gains and Major Breakdown (JPY) Segment FY18.3 FY19.3 FY20.3 FY21.3 FY22.3 FY23.3 42.9Bln 56.5Bln 53.6Bln 16.9Bln 21.4Bln 29.5Bln Real Estate ORIX Golf Mixed-use property ORIX Living Logistics centers Management PE Investment and 26.9Bln 0.3Bln 16.4Bln -0.7Bln -19.1Bln 2.6Bln Concession A
Slide 42: Financials Funding Structure / Employed Capital Ratio
Financials Funding Structure / Employed Capital Ratio ✓ Diversified funding methods and maintained a high long-term debt ratio ✓ Maintained appropriate employed capital ratio through progress in capital recycling Funding Structure and Long-term Debt Ratio*1 Shareholders’ Equity / Employed Capital Ra
Slide 43: Financials Funding Structure
Financials Funding Structure ✓ Diversified funding. Controlled funding costs while maintaining a high long-term debt ratio Breakdown of Funding Trends in Funding Costs Foreign currency funding costs JPY funding costs Deposits 27% 5.06% * Borrowings from financial 3.57% FY24.3 End-H1 ABS, CMBS 8.3 Tl
Slide 44: D/E Ratio, Credit Ratings, Interest Rate & Forex Sensitivity
Financials D/E Ratio, Credit Ratings, Interest Rate & Forex Sensitivity D/E Ratio・ROE Credit Ratings Interest Rate & Forex Sensitivity D/E ratio End-Sept 2023 Interest rates (excl. deposits) 3.8X S&P A- (Negative) ◼ Japanese Yen = Positive 3.4X 11.7% 12.1% 11.5% 11.3% 11.6% Moody’s A3 (Stable) ◼ US
Slide 45: JPY Interest Rates
JPY Interest Rates ✓ Higher JPY interest rates lift Group profits, primarily in Banking and Insurance ✓ Renewed momentum in Corporate Financial Services’ asset businesses (leasing, loans) Banking Insurance Interest rate sensitive assets (end-Sept 2023) Installment loans 2.4 Tln JPY Investment securi
Slide 46: ESG: Ratings
ESG: Ratings ✓ As of March 2023, ORIX now included in all six ESG indices (for Japanese stocks) adopted by Government Pension Investment Fund (GPIF) ✓ ORIX’s Board of Directors now has a majority of outside directors, making progress towards achievement of other key goals, including GHG emissions re
Slide 47: Improving Share Price Valuation (Corporate Value)
Improving Share Price Valuation (Corporate Value) (From FY23.3 results presentation announced in May 2023 with some updates) ✓ Average ROE for past decade is 10.4%, first aim is to improve valuation to P/B of 1.0X or higher ✓ Promoting proactive communication by top management (including outside dir
Slide 48: Shareholder Returns
Shareholder Returns ✓ Maintain basic policy of “1/3 of net income allocated to dividends, 1/3 to new investments, and 1/3 to retained earnings and share buybacks” ✓ Will flexibly carry out shareholder returns while giving consideration to profit growth, investment pipeline, and financial soundness D
Slide 49: 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 50: 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 Investor Relations and Sustainability Department Tel: +81-3-3435-3121