Slide 1: Second Quarter Consolidated Financial Results
ORIX Corporation Second Quarter Consolidated Financial Results For the Six-Month Period Ended September 30, 2022 Makoto Inoue Member of the Board of Directors Representative Executive Officer President & CEO November 7, 2022 1 Company Name (TSE: 8591; NYSE: IX) Copyright © 2022 ORIX Corporation All
Slide 2: Net Income & ROE
Net Income & ROE ✓ 121.8 Bn JPY in FY23.3 H1 net income* (down 17% YoY), annualized ROE of 7.4% ✓ 59.9 Bn JPY in 2Q net income, down 1.9 Bn JPY (down 3%) QoQ amidst a tough macro climate Full-Fiscal Year Quarterly 400 13.0% 120 10.6% 12.6% 350 12.1% 11.6% 8.6% 8.3% 7.5% 7.2% (Bn JPY) 9.9% 6.8% 5.9%
Slide 3: Breakdown of Segment Profits
Breakdown of Segment Profits 144.8 Bn JPY, down by 18% YoY (-32.2 Bn JPY) FY23.3 H1 Segment Profits Base Profits Profits relatively stable, as sharp gains in Aircraft and Ships and healthy earnings in Environment and Energy, Asia and Australia offset lower profits in Insurance, ORIX USA, ORIX Europe
Slide 4: Segment Profits
Segment Profits ✓ 4 segments higher YoY, Aircraft and Ships in particular ✓ Profits were lower in Insurance, ORIX USA, ORIX Europe, but Aircraft and Ships, Asia and Australia ended higher. Overseas profit ratio was more than 40% (Bn JPY) 22.3 23.3 QoQ YoY Highlight H1 H2 Q1 Q2 H1 Segment Profits Cor
Slide 5: Segment Assets
Segment Assets ✓ Assets increased, mainly in overseas segments, due to changes in forex ✓ Corporate Financial Services assets shrink as continue to carefully select new business deals, Auto lower from new car supply constraints (Bn JPY) 23.3 H1 Vs. 22.3 ROA* Highlight Segment Assets Corporate Financ
Slide 6: FY23.3 H1 Results and Full-Year Outlook
FY23.3 H1 Results and Full-Year Outlook FY23.3 H1 Results Full-Year Outlook*1 FY25.3 Target*2 Net income 121.8 Bn JPY 250.0 Bn JPY 440.0 Bn JPY ROE 7.4% 7.5% 11.7% Financial Maintained an A-rating equivalent financial base soundness ✓ Dividends: Payout ratio of 33% or previous fiscal year’s dividend
Slide 7: Operating Environment and Outlook
Operating Environment and Outlook Operating environment ORIX Surging resource prices, inflation, higher Diversified portfolio, healthy base profits interest rates, Yen depreciation Global slump in equity markets Stable cash flows Heightened recession concerns Financial soundness, ample pipeline More
Slide 8: ORIX USA, Insurance, PE Investment and Concession Segments
ORIX USA, Insurance, PE Investment and Concession Segments ✓ Amidst ongoing uncertainties in US business climate, promoting enhanced risk management and shift to third-party asset management model at ORIX USA ✓ In Insurance segment, H1 is bottom for COVID-related impact. In PE Investment, taking cau
Slide 9: Capital Recycling - Profit Growth
Capital Recycling - Profit Growth ✓ Accelerated Capital Recycling model led to company-wide net income growth of 2.8X, CAGR of 12% (FY22.3 vs FY13.3) ✓ Also strengthened financial base, reducing D/E ratio from 2.7X to 1.5X over same period RoadSafe Acquisition/ new Yayoi business QRacian ORIX Living
Slide 10: Capital Recycling – Model for Adding Value
Capital Recycling – Model for Adding Value ✓ Utilizing its finance and operational experience, ORIX originates projects, executes investments, improves the value of investees, and makes decisions to hold or sell ✓ Strengthens quality and number of new investments while recycling capital, leading to
Slide 11: Capital Recycling – Base Profits
Capital Recycling – Base Profits ✓ Many investees entering ORIX Group have seen profit expansion, contributing to Group’s stable growth ✓ Provides ongoing boost to base profits, cash flows; realizes synergies Daikyo Robeco Group 1. 2005 1. 2013 2. Growth in condo management, construction 2. Posted r
Slide 12: Capital Recycling – Investment Gains
Capital Recycling – Investment Gains ✓ Developed exit strategies for both pure investments assuming an exit, and companies joining ORIX Group ✓ Strengthened financial base through large-scale exits while continuing new investments Yayoi Houlihan Lokey QRacian 1. Business software 1. US investment ba
Slide 13: Focus Areas and Pipeline
Focus Areas and Pipeline ✓ Ample investment pipeline of more than 3 Tn JPY ✓ Near-term focus mainly on domestic PE investments (including large-scale projects), as well as overseas renewable energy, Real Estate Business area Major pipeline projects ◼ Large-scale projects Domestic PE FY23.3 H2 or FY2
Slide 14: Reopening
Reopening ✓ Aircraft leasing continues to recover worldwide ✓ Real estate operations, concession should head towards full-fledged recovery following relaxation of Japan’s border restrictions Segment profits* trends Aircraft and Ships Real estate operations Business Macro Indicators Concession Three
Slide 15: Shareholder Returns
Shareholder Returns ✓ FY23.3 full-year dividend: 85.6 JPY per share (previous fiscal year’s dividend) or a dividend payout ratio of 33%, whichever is higher ✓ Share buybacks to be carried out opportunistically, 50 Bn JPY planned for FY23.3 (38.7 Bn JPY already executed as of end-Oct 2022) Dividend p
Slide 16: ESG
ESG ✓ Setting ESG-related key goals and issues and strengthening disclosure have led to improved ratings/scores by ESG rating agencies, wider inclusion by ESG indices ORIX now included in four of five ESG indices (for Japanese stocks) adopted by Government Pension Investment Fund (GPIF) ✓ ORIX’s Boa
Slide 17: Segment Performance
Segment Performance Copyright © 2022 ORIX Corporation All rights reserved. 17
Slide 18: Corporate Financial Services and Maintenance Leasing
Corporate Financial Services and Maintenance Leasing Segment Profits: 35.5 Bn JPY YoY -10.8 Bn JPY (-23％) Segment Assets: 1,476.2 Bn JPY YTD -40.6 Bn JPY (-3%) ✓ Profits healthy if investment gains from Yayoi and investee IPO, valuation gains on ✓ Corporate Financial Services: Continued to be carefu
Slide 19: 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 20: Real Estate
Real Estate Segment Profits: 18.9 Bn JPY YoY -4.1 Bn JPY (-18%) Segment Assets: 907.9 Bn JPY YTD -2.2 Bn JPY (flat) ✓ Investment gains realized on sale of logistics facilities, rental condos ✓ Assets mostly flat YoY as asset recycling related-sales, mainly of ✓ Facilities operations: Occupancy rates
Slide 21: Real Estate – About the Business
Real Estate – About the Business Main Business: Real estate development, rental and management; facilities operation; real estate asset management Segment Assets Unrealized gains on rental （as of end-Mar, 2022） Segment Asset Trends properties* Primarily DAIKYO Primarily leased logistics facilities,
Slide 22: PE Investment and Concession
PE Investment and Concession Segment Profits: 3.9 Bn JPY YoY +2.3 Bn JPY (+142%) Segment Assets: 370.1Bn JPY YTD +16.5 Bn JPY (+5%) ✓ PE Investment: Profits increased due to steady performance of ✓ Increased due to new investment in HEXEL Works investees ✓ Concession: Earnings on recovery track than
Slide 23: PE Investment and Concession – About the Business
PE Investment and Concession – About the Business ✓ Currently invested in 17 companies (as of end-March 2022); aim to develop new business segments for ORIX Investment Track Record Investee Companies Leveraging our broad network and IT Services Initial investment Business Management experience we ha
Slide 24: Environment and Energy
Environment and Energy Segment Profits: 10.6 Bn JPY YoY +1.1 Bn JPY (+11％) Segment Assets: 772.9 Bn JPY YTD +69.3 Bn JPY(+Y55.6 Bn JPY from forex) ✓ In Japan, solar business performed well due to higher power generation from good ✓ Assets increased due to changes in forex weather ✓ Overseas, revenue
Slide 25: Global Renewable Energy Portfolio
Global Renewable Energy Portfolio ✓ Total net owned operating capacity of 3.5 GW worldwide （as of end-September 2022） ✓ Total operating capacity (incl. assets in operation, under construction, and in development): Elawan 9 GW, Greenko 18 GW Spain & other locations China Japan USA & other locations ・
Slide 26: Insurance
Insurance Segment Profits: 13.0 Bn JPY YoY -19.3 Bn JPY (-60%) Segment Assets: 2,052.7 Bn JPY YTD -19.5 Bn JPY (+74.6 Bn JPY from forex) ✓ Rising COVID-19 infections led to an increase in payout-related expenses, and profits ✓ Excluding impact from forex changes, market slump, assets declined (total
Slide 27: Life Insurance – About the Business
Life Insurance – About the Business ✓ Omni-channel strategy (including online/mail order) has allowed ORIX Life to post growth in policies well above industry average ✓ Shift from mix dominated by third-sector products (such as medical insurance CURE) to a more well-balanced portfolio with introduct
Slide 28: Banking and Credit
Banking and Credit Segment Profits: 15.2 Bn JPY YoY -5.7 Bn JPY (-27%) Segment Assets: 2,677.4 Bn JPY YTD -9.8 Bn JPY (flat) ✓ Banking: Financial revenues remained steady YoY, but profits fell as there ✓ Assets mostly flat were one-time profits recorded in the previous period ✓ Credit: Profits decre
Slide 29: 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, will develop and sell financial products, such as securitized
Slide 30: Aircraft and Ships
Aircraft and Ships Segment Profits: 10.6 Bn JPY YoY +10.3 Bn JPY (+2,786%) Segment Assets: 752.6 Bn JPY YTD +68.5 Bn JPY (+120.1 Bn JPY from forex) ✓ Ships: Profits increased significantly due to well-timed sales of owned ships ✓ Assets increased overall, as forex effects offset sales of owned ships
Slide 31: Aircraft and Ships – About the Business
Aircraft and Ships – About the Business GLOBALLY NARROWBODY OEM DIVERSE WEIGHTING BREAKDOWN Owned Committed （NBV） （number of aircraft） （number of aircraft） fleet fleet ORIX Aviation 52 0 ✓ Fully-owned subsidiary 14% 21% Average age ✓ Mainly trading in second-hand 6.6 years market 39% 42% ✓ Arrangeme
Slide 32: ORIX USA
ORIX USA Segment Profits : 21.6 Bn JPY YoY -25.5 Bn JPY (-54%) Segment Assets : 1,624.3 Bn JPY YTD +260.2 Bn JPY (+250.3 Bn JPY from forex) ✓ Private Equity: Multiple exits in the previous period led to reduction in ✓ Assets increased due to changes in forex capital gains ✓ Maintained a low non-perf
Slide 33: ORIX USA 1Q vs 2Q
ORIX USA 1Q vs 2Q ✓ Profits higher on exit completed in 2Q Segment Profits Breakdown （USD Mil） Capital gains Base profits Business line Factors behind change 23.3 1Q 23.3 2Q Change 23.3 1Q 23.3 2Q Change Private Equity -4 42 +46 -5 -11 -6 ◼ Capital gains: Realized exit ◼ Capital gains: Sold several
Slide 34: 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 $74.3 Bn) ✓ Operates a hybrid strategy, investing own principal capital while providing capital market and asse
Slide 35: ORIX Europe
ORIX Europe Segment Profits: 16.4 Bn JPY YoY -12.0 Bn JPY (-42%) Segment Assets: 409.5 Bn JPY YTD +7.6 Bn JPY (+16.5 Bn JPY from forex) ✓ Fall in stock market resulted in reduced AUM which led to lower profits ✓ Assets increased due to changes in forex ✓ Transtrend performance upbeat Segment Profits
Slide 36: 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 An ESG pioneer since the mid-1990s, Robeco is Major Subsidiaries Head Office Primary Busine
Slide 37: 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 38: Asia and Australia
Asia and Australia Segment Profits : 24.1 Bn JPY YoY +4.2 Bn JPY (+21%) Segment Assets : 1,399.1 Bn JPY YTD +93.0 Bn JPY (+99.8 Bn JPY from forex) ✓ New business deals execution increased as COVID-related impacts waned ✓ Assets increased due to changes in forex from latter half of previous period, c
Slide 39: Asia and Australia – About the Business
Asia and Australia – About the Business ✓ Main Business: Leasing, lending, and investment businesses in Asia and Australia ✓ Leasing, loans: Primarily industrial equipment and auto leasing across Asia and Australia. Investments: PE investments mainly in Greater China and South Korea Segment Assets b
Slide 40: Appendix
Appendix Copyright © 2022 ORIX Corporation All rights reserved. 40
Slide 41: 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-FY22.3) Renewable energy generating capacity*2 312.1Bn JPY 9.9% 12％ 3.5GW Enhanced shareholder returns Well-balanced earnings*1 Top-class investment track re
Slide 42: About ORIX: Proven Track Record of Profitability
About ORIX Proven Track Record of Profitability ✓ Excluding founding year, ORIX has been profitable for 57 straight years Net Income Attributable to ORIX Corporation Shareholders FY2021.3 Bn JPY COVID-19 crisis 350 300 250 FY2009.3 FY2002.3 Global financial crisis Burst of IT bubble 200 150 FY1998.3
Slide 43: About ORIX: Expertise in Business and Collective Capabilities of the Group
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 © 2022 ORIX Corporation All rights reserved. 43
Slide 44: Medium- to Long-term Growth
Medium- to Long-term Growth (From FY22.3 full-year results presentation announced in May 2022) ✓ Operation & Investment and Asset Management positioned as growth drivers, aim to achieve 440.0 Bn JPY in net income by FY25.3 ✓ After FY25.3, will sustain growth into FY30.3 supported by new investments
Slide 45: Three Portfolio Categories
Three Portfolio Categories (Breakdown of Financing & Insurance, Asset Management, Operation and Investment) Three Categories Three Category and Segment Matrix Financing & Insurance Asset Management Operation & Investment Corporate Financial Services and Auto, rental equipment, Corporate financial se
Slide 46: Breakdown of Investment Gains
Breakdown of Investment Gains Investment Gains* Major Business Sales (Bn JPY) Segment FY18.3 FY19.3 FY20.3 FY21.3 FY22.3 No. Company Timing of sale ORIX Electric Power ① FY18.3 Real Estate 42.9 ② 56.5 ③ 53.6 16.9 21.4 Corporation ② ORIX Golf Management FY19.3 PE Investment and Concession 26.9 0.3 16
Slide 47: Financials Funding Structure / Employed Capital Ratio
Financials Funding Structure / Employed Capital Ratio ✓ Diversified funding methods and maintained a high long-term debt ratio Funding Structure and Long-term Debt Ratio*1 Shareholders’ Equity / Employed Capital Ratio*2 93% 93% 93% 91% 91% 4.5 88% 88% 86% 86% 7.7 4.0 85% (Tn JPY) 7.0 7.1 6.8 3.5(Tn
Slide 48: Financials Funding Structure
Financials Funding Structure ✓ Diversified funding. Controlled funding costs while maintaining a high long-term debt ratio Breakdown of Funding Trends in Fundings Costs Deposits Foreign currency funding costs Yen funding costs 29% Borrowings from financial FY23.3 H1 institutions 3.27% 3.28% 3.23% 7.
Slide 49: 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 Interest rates End-Sept 2022 ◼ Japanese Yen & US Dollar = Negligible 3.8x S&P A- (Stable) ◼ Euro = -2 to -3 Bn JPY 3.4x 11.5% 10.5% 11.7% 11.3% 12.1% 11.6% *Sensitiv
Slide 50: 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 51: 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 51 Company Name Copyri