Slide 1: Third Quarter Consolidated Financial Results
ORIX Corporation Third Quarter Consolidated Financial Results For the Nine-Month Period Ended December 31, 2020 Hitomaro Yano Executive Officer Head of Treasury and Accounting Headquarters February 8, 2021 1 (TSE: 8591; NYSE: IX) Company Name Copyright © 2020 ORIX Corporation All rights reserved.
Slide 2: Executive Summary
Executive Summary (1) Overview 142.0 JPY Bn in net income (-42% YoY), annualized ROE 6.4% Achieved 75% of FY21.3 net income forecast (190.0 JPY Bn), which was released at FY21.3 H1 announcement Net income recovered QoQ, from 43.8 JPY Bn in Q2 to 48.2 JPY Bn in Q3 (2) Shareholder Returns Completed ex
Slide 3: Overview Net Income / ROE
Overview Net Income / ROE ✓ 142.0 JPY Bn in net income (down 42% YoY, 75% of FY21.3 forecast of 190.0 JPY Bn). Annualized ROE at 6.4% ✓ Net income recovered QoQ, from 43.8 JPY Bn in Q2 to 48.2 JPY Bn in Q3 Net income* and ROE Quarterly Net Income Trend (JPY Bn) (JPY Bn) 400.0 11.7% 11.3% 12.1% 11.6%
Slide 4: Overview Breakdown of Q1-Q3 Segment Profits
Overview Breakdown of Q1-Q3 Segment Profits FY 21.3 Q1-Q3 179.2 JPY Bn, down by 30.5% YoY (-78.7 JPY Bn) Base Profits Profits decreased in Real Estate (Facilities Operation), Concession, Aircraft Leasing Segment profits Meanwhile, Environment & Energy, Life Insurance, Banking and Credit profits were
Slide 5: Overview Q3 Impact of COVID-19
Overview Q3 Impact of COVID-19 ✓ Caution still warranted, but negative COVID-19 impact shrank in Q3 vs. Q2 (Figures are based on segment profits) Impact Impact Impact Business Q3 Conditions amount (Q1) amount (Q2) amount (Q3) ① Real Estate COVID-19 impact smaller vs. Q2 with Go To Travel campaign -6
Slide 6: Segment Performance (1) Segment Profits
Segment Performance (1) Segment Profits ✓ Profits in six segments rose in QoQ, while four segments posted higher profits YoY （JPY Bn） Q1 Q2 Q3 QoQ Q1-Q3 YoY Highlight （JPY Bn） Corporate Financial Services 1 10.2 14.7 16.2 1.5 41.2 -8.6 QoQ profits increased on recovery in Auto and Rentec and Mainten
Slide 7: Segment Performance (2) Segment Assets
Segment Performance (2) Segment Assets ✓ Corporate Financial Services and Maintenance Leasing, ORIX USA remain cautious about using balance sheet to fund new investments, assets down YoY ✓ Steady growth in new policies fueled growth in Insurance segment assets （JPY Bn） 21.3 ROA （JPY Bn） Q3 YTD (annu
Slide 8: New Investments
New Investments ✓ Approx. 400 JPY Bn in new investments announced YTD in FY21.3 ✓ Announced acquisition of Elawan, Gravis Capital Management, SUGIKO in Q3 Company Overview Global renewable energy company headquartered in Spain Elawan ① Environment and Energy (Operating capacity: 0.7 GW, Pipeline: Mo
Slide 9: Financial Soundness / Liquidity
Financial Soundness / Liquidity ✓ Continue to maintain high liquidity ✓ S&P, Moody’s, Fitch all reaffirmed A- ratings. R&I is AA- ✓ Ratings may change depending on timing of investments or asset sales, but we will maintain financial soundness commensurate with an ‘A’ rating over the medium to long t
Slide 10: Segment Performance
Segment Performance Copyright © 2021 ORIX Corporation All rights reserved. 10
Slide 11: Corporate Financial Services and Maintenance Leasing
Corporate Financial Services and *As figures less than 0.1 JPY Bn are rounded off, the total of Segment Performance (1) Maintenance Leasing individual business unit figures does not necessarily match segment figures Segment Profits: 41.2 JPYB Bn YoY -8.6 JPY Bn (-17%) Segment Assets: 1,690.6 JPY Bn
Slide 12: Corporate Financial Services and Maintenance Leasing
Corporate Financial Services and Maintenance Leasing Main business: Finance and fee business; leasing and rental of automobiles, electronic measuring instruments and IT-related equipment; Yayoi Corporate Financial Services Auto Yayoi Utilize domestic ORIX Group network to Automobile leasing, No. 1 S
Slide 13: Segment Performance (2) Real Estate
Segment Performance (2) Real Estate Segment Profits : 15.6 JPY Bn YoY -42.4 JPY Bn（-73％） Segment Assets : 834.7 JPY Bn YTD +13.5 JPY Bn（+2％） ✓ RE Investment and Facilities Operations: Segment profit up as ✓ Asset growth flat accommodation facility occupancy rates recovered ✓ AUM in Real Estate Asset
Slide 14: Real Estate
Real Estate Main Business：Real estate development, rental and management; facility operations; real estate asset management Segment Assets Unrealized gains on rental Segment Asset Trends properties* （as of March 31, 2020） (JPY Bn) (JPY Bn) 2500 90 35.0% 82.8 30.1% 80 30.0% 73.7 71.9 Others 70.1 2000
Slide 15: Segment Performance (3) PE Investment and Concession
Segment Performance (3) PE Investment and Concession Segment Profits: 4.3 JPY Bn YoY -39.4 JPY Bn (-90%) Segment Asset: 399.0 JPY Bn YTD +76.4 JPY Bn (+24%) ✓ PE Investment: Investee earnings were healthy ✓ PE Investment: One new investment in Q1*1, three new investments However, profits were down o
Slide 16: PE Investment and Concession
PE Investment and Concession ✓ Currently invested in 17 companies (as of end-Dec 2020); aim to create a new business segment for ORIX Investment Track Record What makes us unique? Leveraging our broad network and ORIX has not only sufficient funding ability but also possesses significant operating e
Slide 17: Segment Performance (4) Environment and Energy
Segment Performance (4) Environment and Energy Segment Profits: 17.8 JPY Bn YoY +6.2 JPY Bn (+54%) Segment Assets: 479.3 JPY Bn YTD +0.5 JPY Bn (flat) ✓ Solid performance despite COVID-19 impact, segment profits down ✓ Asset growth flat QoQ owing to seasonal factors (fewer hours of sunlight in solar
Slide 18: Global Renewable Energy Portfolio
Global Renewable Energy Portfolio ✓ Total net owned operating capacity of 3 GW* worldwide Around 2 GW of projects under construction, primarily at Elawan, Greenko. Pipeline assets include Greenko (more than 8 GW), Elawan (more than 10 GW) Spain & other locations China Japan USA & other locations ・El
Slide 19: Segment Performance (5) Insurance
Segment Performance (5) Insurance Segment Profits: 50.7 JPY Bn YoY +7.1 JPY Bn (+16%) Segment Assets: 1,888.0 JPY Bn YTD +307.8 JPY Bn (+19%) ✓ Posted steady profits despite COVID-19 ✓ Investment securities increased due to increase in new policies ✓ Non-face-to-face channels posted growth Segment P
Slide 20: Life Insurance
Life Insurance ✓ Omni-channel strategy utilizing four sales channels - agency, banks and other financial institutions, mail order and Internet sales, and in-person sales by ORIX Life reps ✓ Pioneering Internet / mail-order sales channel first launched in 1997, strong performer during COVID Industry-
Slide 21: Segment Performance (6) Banking and Credit
Segment Performance (6) Banking and Credit Segment Profits: 37.0 JPY Bn YoY +7.5 JPY Bn (+26%) Segment Assets: 2,707.3 JPY Bn YTD +103.5 JPY Bn (+4%) ✓ Banking: Profits remain steady due to accumulation of assets ✓ Banking: Profits higher on greater demand for real-estate investment ✓ Credit: Profit
Slide 22: Banking
Banking ✓ ORIX Bank’s differentiated service menu focused on real-estate investment loans helps it realize a high ROE, ROA compared to peers ✓ Low-cost business model with no branches, ATMs, or settlement services delivers a low expense ratio and a high loan-to-deposit ratio FY20.3 Expense Ratio FY2
Slide 23: Segment Performance (7) Aircraft and Ships
Segment Performance (7) Aircraft and Ships Segment Profits: 3.1 JPY Bn YoY -30.2 JPY Bn (-91%) Segment Assets: 560.0 JPY Bn YoY -25.3 JPY Bn (-4%) ✓ Aircraft leasing, Avolon: Profits decreased on drop in lease revenue, ✓ Excluding forex impact, segment assets flat investment gains (Lease revenue dec
Slide 24: Aircraft Leasing Business
Aircraft Leasing Business GLOBALLY NARROWBODY OEM DIVERSE WEIGHTING BREAKDOWN Owned Committed ORIX （NBV） （number of aircraft） （number of aircraft） fleet fleet 73 0 15% 15% Average age 33% 5.8 years 44% 56% Remaining Managed fleet lease term 134 52% 85% 6.8 years APAC Narrowbody Airbus Americas EMEA
Slide 25: Segment Performance (8) ORIX USA
Segment Performance (8) ORIX USA Segment Profits: 27.5 JPY Bn YoY -22.7 JPY Bn (-45%) Segment Assets: 1,235.9 JPY Bn YTD -138.2 JPY Bn (-10%) ✓ Profits continued sharp recovery from Q2, owing to lower credit losses and ✓ Remains cautious about investment using own balance sheet, assets improvement i
Slide 26: ORIX USA
ORIX USA ✓ 40+ year track record in US ✓ Focused on serving the middle market customer across three verticals: Credit, Private Equity, Real Estate Aim to achieve further growth in asset management business Credit Private Equity Real Estate Segment assets: $6 bn Segment assets: $1 bn Segment assets:
Slide 27: Segment Performance (9) ORIX Europe
Segment Performance (9) ORIX Europe Segment Profits: 25.9 JPY Bn YoY +0.8 JPY Bn (+3%) Segment Assets: 337.2 JPY Bn YTD +19.3 JPY Bn (+6%) ✓ Profits increased QoQ on a recovery in AUM ✓ AUM increased moderately with market recovery ✓ Enjoyed improved mix shift with several mandates won ✓ Acquired 70
Slide 28: ORIX Europe
ORIX Europe Segment business: Equity, fixed income asset management Completed acquisition of alternative asset manager Gravis Capital Management* in Feb 2021 ① ORIX Europe Corporation Head Office Primary Business Established An ESG pioneer since the mid-1990s, Robeco is (Acquired) recognized as a le
Slide 29: Reference: ORIX's Asset Management Business
Reference: ORIX’s Asset Management Business ✓ Operates a diverse range of asset management businesses (Total AUM 45 JPY Tn as of end-Dec 2020) Completed acquisition of Boston Capital’s LIHTC assets (AUM: 770 JPY Bn) in Dec 2020, Gravis Capital Management (AUM: 440 JPY Bn) in Feb 2021 ✓ Asset managem
Slide 30: Segment Performance (10) Asia and Australia
Segment Performance (10) Asia and Australia Segment Profits: 8.4 JPY Bn YoY -17.7 JPY Bn (-68%) Segment Assets: 1,017.2 JPY Bn YTD +6.9 JPY Bn (+1%) ✓ PE investment recorded Impairment in Q2 and Q3, but subsidiaries ✓ Excluding forex impact, segment assets fell by 26.7 JPY Bn YTD remained stable ✓ I
Slide 31: Asia and Australia
Asia and Australia Main Business: Finance and investment businesses in Asia and Australia Major Subsidiaries（Asia and Australia） Country Company Name Primary Business Established Segment Assets NET Segment Revenue* (Region) (as of March 31, 2020) （FY 20.3） Leasing, Automobile ORIX Asia Limited Hong
Slide 32: Appendix
Appendix Copyright © 2021 ORIX Corporation All rights reserved. 32
Slide 33: About ORIX: Proven Track Record of Profitability
About ORIX Proven Track Record of Profitability ✓ ORIX has achieved 55 years of sustained, profitable growth (JPY Bn) Net Income Attributable to ORIX Corporation Shareholders 350 300 250 FY2009.3 FY2002.3 Burst of IT bubble Global financial crisis 200 FY1998.3 150 Asian currency crisis FY1993.3 Burs
Slide 34: 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 © 2021 ORIX Corporation All rights reserved. 34
Slide 35: About ORIX: Global Network
About ORIX Global Network ✓ Using its expertise cultivated in Japan, ORIX has expanded its business globally, with operations in 34 countries and regions worldwide Copyright © 2021 ORIX Corporation All rights reserved. 35
Slide 36: 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 3% Corporate Financial Services Finance and fee business; leasing and rental of automobiles, electronic measuring 11% 18% and Maintenance Leasing instr
Slide 37: Financial Soundness: Funding Structure / Employed Capital Ratio
Financial Soundness Funding Structure / Employed Capital Ratio ✓ Funding structure: Diversified funding methods and maintained a high ratio of long-term debt ✓ Employed Capital Ratio: Illustrates the ratio of capital employed to ORIX shareholders’ equity Continue to pursue growth while controlling r
Slide 38: Financials Funding Structure
Financials 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 Dec 31, 2020 3.00% 60% ABS, CMBS 2.00% 40% 3% Borrowing
Slide 39: Shareholder Return
Shareholder Return ✓ For FY21.3, full-year dividend of 76 JPY per share or 50% payout ratio, whichever is higher ✓ Completed execution of buyback program (44.2 JPY Bn) announced on Nov 2, 2020 with FY21.3 H1 results Dividend per Share and Payout Ratio Share Buyback and Total Return Ratio （JPY） （JPY
Slide 40: 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 41: 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 orix_corpcomm@orix.jp