Orix Corporation · TSE:8591
Orix — Q1 FY2016.3 Earnings Presentation
42 slides from Orix's earnings presentation, Jul 30, 2015
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 June 30,, 2015 July 30, 2015 Kazuo Kojima Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of the Treasury Headquarters Takao Kato Corp
Slide 2: Overview (1)
Overview（1） 81.5 bn yen in net income, up 24% YoY Achieved annualized ROE of 15.0％ Net Income* and ROE (JPY Bn) B ) 90 15.0% 13.7% 80 70 10.8% 60 50 40 81.5 30 65 9 65.9 20 45.0 10 0 14.3 Q1 15.3 Q1 16.3 Q1 Net Income ROE (annualized) * Net Income refers to Net Income Attributable to ORIX Corpor
Slide 3: Overview (2)
Overview（2） Segment profits up 19% YoY Profits increase largely driven by Investment and Operation, Corporate Financial Services,, and Real Estate segments g Retail and Overseas Business segments had profit decrease YoY due to large capital gains recorded in Q1 FY2015.3 Segment Profits (JPY Bn
Slide 4: Overview (3)
Overview（3） Segment assets decreased 3% compared to the end of FY2015.3 In Retail segment, HLIKK assets decreased, and Real Estate segment assets continued ti d tto d downsize i Segment Assets and ROA (JPY Tn) 3.7% 3.6% 10 3.8% 3.3% 2 8% 2.8% 2.9% 8 2.8% 6 2.3% Overseas Business Retaill 1.8% Inv
Slide 5: Overview (4)
Overview（4） Profits growth driven by expansion in non-finance businesses All components of services income have grown with asset management b i business contributing t ib ti ththe llargestt share h (JPY Bn) Gross Profits* (JPY Bn) Services Income* 250 100 200 80 Non--Finance 150 60 100 40 50 20
Slide 6: Segment Performance (Corporate Financial Services)
Segment Performance （Corporate Financial Services） Segment profits doubled YoY to 12.4 bn yen Non-finance revenues such services income expanded with contribution from Yayoi Transaction volume and variety increased, fee revenues increased steadily Segment Revenues/Profits Segment Assets/ROA Se
Slide 7: Segment Performance (Maintenance Leasing)
Segment Performance （Maintenance Leasing） Segment profits increased 6% YoY to 11.7bn yen Auto-related assets increased steadily Services income from value-added services contributed to stable and high ROA Segment Revenues/Profits Segment Assets/ROA (JPY Bn) (JPY Bn) 800 4.9% 4.7% 5.0% 80 11.7
Slide 8: Segment Performance (Real Estate)
Segment Performance （Real Estate） Segment profits increased 33% YoY to 14.5 bn yen Stable contribution from services income including those from facility operation In I line li with i h reduction d i iin assets, operating i expenses such h as iinterest expense, costs off operating leases, and
Slide 9: Segment Performance (Investment and Operation)
Segment Performance （Investment and Operation） Segment profits increased by 4.8 times YoY to 26.2 bn yen Recorded capital gains from sales of investees, and profit contributions from investees remain solid Expansion of environment and energy related assets Segment Revenues/Profits Segment Asse
Slide 10: Segment Performance (Retail)
Segment Performance （Retail） Segment profits decreased 25% YoY to 21.6 bn yen Segment profits achieved positive growth YoY without considering the impact of gains on sale of Monex Group shares recorded in Q1 FY15.3 Life insurance premiums and related investment income remain strong Segment Rev
Slide 11: Segment Performance (Overseas Business)
Segment Performance （Overseas Business） Segment profits decreased 13% YoY to 34.5 bn yen Revenues from corporate loans and incomes from fund investment in the Americas i increased d Services income driven by Robeco continues to be in good shape Segment Revenues/Profits Segment Assets/ROA （JPY
Slide 12: Summary
Summary Q1 nett income i achieved hi d att 81.5 81 5 bn b yen, up 24% YoY Y Y and a new record Q1 result Annualized segment asset ROA and ROE at 3.6% and 15.0% respectively Steady expansion of non-finance non finance businesses highlighted by services income growth Copyright © 2015 ORIX Corporation
Slide 13: Appendix
Appendix pp Copyright © 2015 ORIX Corporation All rights reserved. 12
Slide 14: About ORIX Sustainable Growth
About ORIX Sustainable Growth Maintaining profitable for the past 50 years and achieving sustainable profit growth Net Income Attributable to ORIX Corporation FY2015.3 Record Net Income JPY Bn FY2009 3 FY2009.3 250 Collapse of Lehman Brothers 200 FY2002.3 Bursting of the IT Bubble FY1998.3 150 Asi
Slide 15: About ORIX Business expertise and Group-wide capability
About ORIX Business expertise and Group-wide capability ORIX evolved by advancing into neighboring areas while increasing its finance and asset expertise Credit Screening and Banking Asset Management Finance Capability Life Insurance Investment Lending Principal investment Business revitalization
Slide 16: About ORIX Assets by Segment
About ORIX Assets by Segment Maximizing core competencies of each segment while creating group synergy Corporate Financial Services Lending, Leasing, fee businesses Overseas Business 12% 25% Leasing, Lending, Investment 7% Maintenance Leasing in bonds, Investment banking, Asset management, g , Seg
Slide 17: About ORIX Extensive Overseas Network
About ORIX Extensive Overseas Network Expanded its global reach starting with Hong Kong in 1971, using knowhow developed in Japan Not N t as ambitious biti as tto callll it a globalization, l b li ti b butt rather th it iis a way off eliminating barriers that exist in Japan 36 Countries and Regi
Slide 18: Appendix(1) Performance overview
Appendix(1) Performance overview （JPY Bn） Change FY14.3 FY15.3 14.3 Q1 15.3 Q1 16.3 Q1 (YoY) Total Revenues 1,375.3 2,174.3 266.4 425.3 606.1 143% Net Income *1 187.4 234.9 45.0 65.9 81.5 124% Segment Assets 7,267.8 9,170.2 6,450.0 7,186.0 8,918.7 124% Total Assets 9,067.0 11,443.6 8,218.9 8,954.8 1
Slide 19: Appendix(2) Profits by Segment
Appendix(2) Profits by Segment （JPY Bn） Change FY14.3 FY15.3 14.3 Q1 15.3 Q1 16.3 Q1 ( (YoY) ) Corporate Financial Services 24.9 25.5 5.2 5.9 12.4 212% Maintenance Leasing 37.1 40.4 11.0 11.0 11.7 106% Real ea Estate state 18.0 8.0 3.5 5.5 10.8 0.8 14.5 .5 133% 33% Investment and Operation 95.8 42.4
Slide 20: Appendix(3) Assets by Segment
Appendix(3) Assets by Segment （JPY Bn） Change FY14.3 FY15.3 14.3 Q1 15.3 Q1 16.3 Q1 (YoY) Corporate Financial Services 992.1 1,132.5 928.6 994.8 1,076.1 108% Maintenance Leasing 622.0 662.9 567.1 637.1 675.0 106% Real Estate 962 4 962.4 835 4 835.4 1 084 8 1,084.8 916 0 916.0 802 5 802.5 88% Investm
Slide 21: Appendix(4) Income Statement Data
Appendix(4) Income Statement Data （JPY Bn） Change FY14.3 FY15.3 14.3 Q1 15.3 Q1 16.3 Q1 (YoY) Finance revenues 191 7 191.7 186.99 186 52.22 52 46.11 46 49.66 49 108% Gains on investment securities and dividends 27.2 56.4 7.6 23.9 22.9 96% Operating leases 114.0 124.9 28.2 33.9 35.4 105% Life insuran
Slide 22: Appendix(5) Funding
Appendix(5) Funding （JPY Bn） Change Funding FY14.3 FY15.3 14.3 Q1 15.3 Q1 16.3 Q1 (YoY) CP 101.0 89.6 107.8 162.0 90.7 -71.3 Borrowings from Financial Institutions 2,631.4 2,882.6 2,290.8 2,583.0 2,870.8 287.8 Bonds / MTN 1,174.8 1,153.9 1,313.1 1,147.6 1,088.7 -58.9 Deposits 1,206.4 1,287.4 1,097.3
Slide 23: Appendix(6) Corporate Financial Services
Appendix(6) Corporate Financial Services （JPY Bn） Change FY14 3 FY14.3 FY15 3 FY15.3 14 3 Q1 14.3 15 3 Q1 15.3 16 3 Q1 16.3 (YoY) Finance revenues 37.2 35.6 9.4 9.2 8.4 92% Operating leases 25.6 24.5 6.1 6.1 6.2 102% Services income 14.9 22.0 2.7 3.5 8.1 234% Segment Revenues 78.8 85.5 18.4 19.4 27.
Slide 24: Appendix(7) Maintenance Leasing
Appendix(7) Maintenance Leasing （JPY Bn） Change FY14 3 FY14.3 FY15 3 FY15.3 14 3 Q1 14.3 15 3 Q1 15.3 16 3 Q1 16.3 (YoY) Finance revenues 9.5 11.1 2.3 2.9 3.0 105% Operating leases 177.1 185.7 43.4 46.2 46.7 101% Services income 60 3 60.3 62 5 62.5 15 7 15.7 14 9 14.9 16 8 16.8 112% Segment Revenues
Slide 25: Appendix(8) Real Estate (1)
Appendix(8) Real Estate (1) （JPY Bn） Change FY14 3 FY14.3 FY15 3 FY15.3 14 3 Q1 14.3 15 3 Q1 15.3 16 3 Q1 16.3 (YoY) Operating leases 66.6 63.8 17.4 18.6 18.8 101% Gains on Rental Property Sales 13.8 14.9 3.5 6.2 7.6 124% Services income 101 8 101.8 104 1 104.1 25 6 25.6 24 9 24.9 27 0 27.0 109% Sal
Slide 26: Appendix(9) Real Estate (2)
Appendix(9) Real Estate (2) ■Breakdown of Real Estate Segment Assets （JPY Bn） Change FY14 3 FY14.3 FY15 3 FY15.3 14 3 Q1 14.3 15 3 Q1 15.3 16 3 Q1 16.3 (YoY) Rental Property 665.8 566.9 733.1 616.7 553.2 90% Under Lease 536.9 471.5 607.0 506.1 458.1 91% Under Development 128 9 128.9 95 4 95.4 126 1
Slide 27: Appendix(10) Investment and Operation
Appendix(10) Investment and Operation （JPY Bn） Change FY14 3 FY14.3 FY15 3 FY15.3 14 3 Q1 14.3 15 3 Q1 15.3 16 3 Q1 16.3 (YoY) Finance revenues 18.4 15.7 5.2 4.7 3.7 80% Gains on investment securities and dividends 9.7 9.3 4.4 2.5 8.2 336% Sales of goods and real estate 120 6 120.6 371 4 371.4 97 9.
Slide 28: Appendix(11) Retail
Appendix(11) Retail （JPY Bn） Change FY14 3 FY14.3 FY15 3 FY15.3 14 3 Q1 14.3 15 3 Q1 15.3 16 3 Q1 16.3 (YoY) Finance revenues 50.4 52.5 12.5 12.8 13.5 105% Life insurance premiums and 155.8 352.5 37.6 40.5 68.6 170% related investment income Gains on investment securities and 5.4 20.9 1.2 16.5 1.8 1
Slide 29: Appendix(12) Overseas Business (1)
Appendix(12) Overseas Business (1) （JPY Bn） Change FY14.3 FY15.3 14.3 Q1 15.3 Q1 16.3 Q1 (YoY) Finance revenues 57.3 63.3 15.0 14.2 19.0 134% Gain on investment securities and dividends 15.8 30.5 4.0 5.6 9.6 173% Operating p g leases 76.6 82.1 20.6 19.4 21.7 112% Services income 228.8 321.5 19.0 70.
Slide 30: Appendix(13) Overseas Business (2)
Appendix(13) Overseas Business (2) ■Overseas Business segment assets breakdown （JPY Bn） Change By Region FY14.3 FY15.3 14.3 Q1 15.3 Q1 16.3 Q1 ( (YoY) ) Americas 518.1 776.2 474.2 621.4 738.1 119% Asia / Australia 655.6 591.5 501.3 543.6 597.8 110% Greater China 196.6 249.2 188.4 198.7 256.5 129% Mi
Slide 31: Appendix(14) Reconciliation Table of Non-GAAP Financial Measurement
Appendix(14) Reconciliation Table of Non-GAAP Financial Measurement 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 transact
Slide 32: Appendix(15) Reconciliation Table of Non-GAAP Financial Measurement
Appendix(15) Reconciliation Table of Non-GAAP Financial Measurement （JPY Bn） Key Ratio FY14.3 FY15.3 14.3 Q1 15.3 Q1 16.3 Q1 Total Assets （a） 9,067.0 11,443.6 8,218.9 8,954.8 11,252.0 Deduct: Payables under Securitized Leases Leases, Loan Receivables and 253.8 291.6 497.5 225.4 365.2 Investment in S
Slide 33: Reference Data
Reference Data Copyright © 2015 ORIX Corporation All rights reserved. 32
Slide 34: Macro Economic Indicators
Macro Economic Indicators National CPI (Ex Fresh Food) Trends in Machinery Orders (YoY Change) JPY Tn % Change 10.0 3.5 8.0 3.0 6.0 2.5 40 4.0 2.0 2.0 1.5 0.0 1.0 -2.0 0.5 -4.0 0.0 11.6 12.6 13.6 14.6 15.6 11.3 12.3 13.3 14.3 15.3 Japan U.S China Private demand excl. volatile orders* Manufacturing i
Slide 35: Japanese Corporate Indices
Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate Diffusion Index (Quarterly Basis) (Quarterly Basis) JPY Tn Cases 3.0 4,000 30 3,000 20 2.0 2 000 2,000 10 1.0 1,000 0 0.0 0 -10 11.6 12.6 13.6 14.6 15.6 11.6 12.6 13.6 14.6 15.6 Liabilities ((left)) p Bankruptcies ((right) g ) Large
Slide 36: Japanese Real Estate Indicators
Japanese Real Estate Indicators Japan p TSE REIT Index Office Rental Rates Yen per 3.3㎡ 20,000 , 2,000 16,000 1,500 12,000 1,000 500 8,000 11.6 12.6 13.6 14.6 15.6 11.6 12.6 13.6 14.6 15.6 Tokyo Avg. Rent Osaka Avg. Rent Source: Tokyo Stock Exchange Source: Miki Shoji Copyright © 2015 ORIX Corporati
Slide 37: Domestic Lease Business Indicators
Domestic Lease Business Indicators Private Equipment Investment New Car Sales JPY Tn 1,000 Units 100 12.0% 7,000 14.0% 10.0% 6,000 12.0% 80 5,000 10.0% 8.0% 60 4,000 8.0% 6.0% 40 3,000 6.0% 4.0% 2,000 4.0% 20 2.0% 1,000 2.0% 0 0.0% 0 0.0% 03.3 05.3 07.3 09.3 11.3 13.3 15.3 04.12 06.12 08.12 10.12 12
Slide 38: Other Domestic Indicators
Other Domestic Indicators Number of condominium sold in the Domestic Shipping Amount of Solar Cell Tokyo metropolitan area MW No. of transactions 10,000 60,000 50,000 8,000 Others Residential 40 000 40,000 6,000 30,000 4,000 20 000 20,000 2,000 10,000 0 0 08.6 09.6 10.6 11.6 12.6 13.6 14.6 15.6 09.3
Slide 39: Other Domestic Indicators
Other Domestic Indicators The number of M&A deals The number of the New Listed Companies OUT-IN 2,500 100 IN-OUT IN-IN 2,000 80 1 500 1,500 60 1,000 40 500 20 0 0 09 12 09.12 10 12 10.12 11 12 11.12 12 12 12.12 13 12 13.12 14 12 14.12 08 12 09.12 08.12 09 12 10.12 10 12 11.12 11 12 12.12 12 12 13.12
Slide 40: Other Domestic Indicators
Other Domestic Indicators Premium Income for Individual Insurance Consumer Finance Loan Balance JPY Bn JPY Bn 25,000 15,000 20,000 12,000 15,000 9,000 10,000 6,000 5,000 3,000 0 0 04.3 06.3 08.3 10.3 12.3 14.3 04.3 06.3 08.3 10.3 12.3 14.3 S Source: JJapan St Statistics ti ti B Bureau S Source: JJap
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: Additional Information
Additional Information For annual and more historical data please access our website. A list of major disclosure materials is given below. ORIX Website: URL: http://www.orix.co.jp/grp/en/ IR Website: URL: http://www.orix.co.jp/grp/en/ir/ If you would like to be included on our e-mail list for major