Orix Corporation · TSE:8591
Orix — FY2018.3 Earnings Presentation
44 slides from Orix's earnings presentation, May 10, 2018
Slide 1: Consolidated Financial Results for Fiscal Year Ended March 31, 2018
ORIX Corporation Consolidated Financial Results For the Consolidated Fiscal Year Ended March 31, 2018 Makoto Inoue Director, Representative Executive Officer President & CEO Kazuo Kojima Director, Representative Executive Officer Deputy President Hitomaro Yano Executive Officer Head of Treasury and
Slide 2: Overview (1)
Overview（1） 313.1bn yen in net income, up by 15% YoY New record high in four consecutive years and growth in nine consecutive years ROE at 12.1% Net Income* and ROE (JPY Bn) 12.1% 300.0 11.5% 11.7% 11.3% 10.5% 250.0 200.0 7.4% 6.2% 313.1 150.0 5.1% 260.2 273.2 234.9 100.0 3.0% 187.4 50.0 111.9
Slide 3: Overview (2)
Overview（2） Segment Profits at 429.1bn yen, up by 2% YoY Segment Assets at 9,017.3bn yen, flat YTD Segment Profits Segment Assets and ROA (JPY Bn) (JPY Tn) 10 9.2 9.0 9.0 9.0 Overseas Business 4.5% 500 420.8 429.1 8 Retail 400 380.1 3.5% 336.5 3.5% Investment and 6 2.9% 2.9% 3.0% Operation 300 R
Slide 4: Overview (3)
Overview（3） Pretax Profits: 10.5bn yen increase YoY (+2%) Positive contribution from the existing operation such as aircraft and ship‐related operations, concession, asset management, and environment and energy Gains on sales decreased YoY Segment Assets: 60.4bn yen increase YTD (+1%) Incr
Slide 5: Performance in Three Categories
See P.39 for details on the three Performance in Three Categories categories Finance: Banking business and gain on investment securities contributed in Japan, loss on sales of shares of affiliates in overseas Operation: Overseas asset management business and domestic real estate asset management
Slide 6: Review of Previous Mid-term Strategic Directions
Review of Previous Mid‐term Strategic Directions Management Targets from FY2016.3 to FY2018.3 were all achieved FY15.3 Results FY18.3 Targets FY18.3 Results Evaluation Net Income 234.9bn yen 300.0bn yen 313.1bn yen Achieved Capital Efficiency 11.5% 11‐12% 12.1% Achieved (ROE) R&I（Long‐Term Debt） A
Slide 7: FY18.3 New Investments
FY18.3 New Investments New investments of approximately 740bn yen in the “Operation” and “Investment” (approx. 600bn yen in FY17.3) Promoted portfolio rebalance as well Environment/ • Expansion of environment and energy business in Overseas and Japan Infrastructure Overseas: New investment in ge
Slide 8: Mid-Term Strategic Directions
Mid‐Term Strategic Directions Management Targets from FY2019.3 to FY2021.3 Profit Growth Annual net income growth at between 4‐8% Capital Efficiency ROE above 11% Financial Soundness Maintain single A credit rating ERM with global best practice Shareholders returns policy ・ Dividend payout ratio tar
Slide 9: Business Areas for Further Growth in Operation
Business Areas for Further Growth in “Operation” Aiming portfolio expansion through new investments and M&A Operation Environment and Energy Asset Management • Operate domestic mega‐solar sequentially, promote • Diversify business lines and expand geographical utilization of own power supply in el
Slide 10: Business Areas for Further Growth in Investment
Business Areas for Further Growth in “Investment” Aiming to expand assets with optimal funding sources and schemes for each projects Investment PE Investment Aircraft / Ships • Keep adding value to investees • Maintain diversified revenue sources • Promote investment in the Americas and Asia • Con
Slide 11: Shareholder Return
Shareholder Return Dividend payout ratio at 27% in FY18.3, full year dividend at 66 yen per share, up by 26% YoY Forecasted interim dividend at 30 yen per share in FY19.3, aiming to increase dividends by profit growth Maintain the optimal balance between investment opportunities for sustainabl
Slide 12: Summary
Summary Achieved 313.1bn yen in net income, up 15% YoY, New record high in four consecutive years Management targets from FY2015.3 to FY2018.3 were all achieved Turn into a company with robust business base as a “Multinational Boutique Enterprise” Copyright © 2018 ORIX Corporation All rights reserve
Slide 13: Appendix
Appendix Copyright © 2018 ORIX Corporation All rights reserved. 13
Slide 14: About ORIX: Proven Track Record of Profitability
About ORIX Proven Track Record of Profitability ORIX has achieved 53 years of sustained, profitable growth JPY Bn Net Income Attributable to ORIX Corporation Shareholders 350 300 250 FY2009.3 FY2002.3 Global financial crisis IT Bubble 200 implodes 150 FY1998.3 Asian currency crisis FY1993.3 100 Ja
Slide 15: About ORIX: Evolving and Dynamic Portfolio
About ORIX Evolving and Dynamic Portfolio ORIX will continue to enhance our experience in finance and tangible assets as we synergistically expand our businesses Infrastructure Copyright © 2018 ORIX Corporation All rights reserved. 15
Slide 16: About ORIX: Business by Segment
About ORIX Business by Segment Our highly diversified company contains many complementary businesses, providing ample opportunity for synergies and knowledge sharing 12% Corporate Financial Loan, Leasing, Fee businesses 25% Services 9% Segment Profits Automobile leasing and rentals, Car sharing, T
Slide 17: About ORIX: Global Network
About ORIX Global Network ORIX has spread its business globally by expanding operations in 38 countries and regions worldwide Copyright © 2018 ORIX Corporation All rights reserved. 17
Slide 18: About ORIX: Business Model
About ORIX Business Model Contribute to society by identifying changes in society and markets to create new value Copyright © 2018 ORIX Corporation All rights reserved. 18
Slide 19: Appendix (1) Performance Overview
Appendix（1） Performance Overview （JPY Bn） Change FY16.3 FY17.3 FY18.3 (YoY) Total Revenues 2,369.2 2,678.7 2,862.8 107% Net Income *1 260.2 273.2 313.1 115% Segment Assets 8,972.4 8,956.9 9,017.3 101% Total Assets 10,992.9 11,231.9 11,426.0 102% Shareholders' Equity 2,310.4 2,507.7 2,682.4 107% Shar
Slide 20: Appendix (2) Profits by Segment
Appendix（2） Profits by Segment （JPY Bn） Change FY16.3 FY17.3 FY18.3 (YoY) Corporate Financial Services 42.4 38.0 49.3 130% Maintenance Leasing 42.9 39.8 40.2 101% Real Estate 42.9 72.8 62.4 86% Investment and Operation 57.2 85.0 96.1 113% Retail 51.8 72.9 74.5 102% Overseas Business 142.9 112.3 106.
Slide 21: Appendix (3) Assets by Segment
Appendix（3）Assets by Segment （JPY Bn） Change 16.3 17.3 18.3 (YTD) Corporate Financial Services 1,049.9 1,032.2 961.9 93% Maintenance Leasing 731.3 752.5 818.2 109% Real Estate 739.6 657.7 620.2 94% Investment and Operation 704.2 768.7 847.7 110% Retail 3,462.8 3,291.6 3,174.5 96% Overseas Business 2
Slide 22: Appendix (4) Income Statement Data
Appendix（4） Income Statement Data （JPY Bn） Change FY16.3 FY17.3 FY18.3 (YoY) Finance revenues 200.9 200.6 214.1 107% Gains on investment securities and dividends 35.8 30.3 43.3 143% Operating leases 128.8 155.1 127.3 82% Life insurance premiums and related investment income 68.1 95.8 96.5 101% Sales
Slide 23: Appendix (5) Funding
Appendix（5） Funding （JPY Bn） Change Funding 16.3 17.3 18.3 (YoY) CP 102.4 50.1 54.9 4.8 Borrowings from Financial Institutions 2,970.6 2,958.2 3,056.2 98.0 Bonds / MTN 938.1 885.1 940.1 55.0 Deposits 1,398.5 1,614.6 1,757.5 142.9 ABS, CMBS 275.5 245.1 82.1 ‐163.0 Short‐term Debt, Long‐term Debt and
Slide 24: Segment Performance
Segment Performance Copyright © 2018 ORIX Corporation All rights reserved. 24
Slide 25: Segment Performance (1) Corporate Financial Services
Segment Performance（1）Corporate Financial Services Segment Profits: 49.3bn yen, up by 11.2bn yen YoY (+30%) Yayoi contributed 6.4bn yen Gains on sales of investment securities and shares of affiliates were recognized in segment profits Increase in services income YoY by 1.9bn yen Segment Ass
Slide 26: Segment Performance (1) Corporate Financial Services
Segment Performance（1）Corporate Financial Services （JPY Bn） FY16.3 FY17.3 FY18.3 Change (YoY) FY18.3 Results Finance revenues 34.2 30.2 28.4 94% Fee business contributed to stable revenue Operating leases 25.5 25.6 23.4 91% Started to build a new distribution network Services income 35.7 40.6 42
Slide 27: Segment Performance (2) Maintenance Leasing
Segment Performance（2）Maintenance Leasing Segment Profits: 40.2bn yen, up by 0.4bn yen YoY (+1%) Increase in revenue in line with asset growth while the gain on sales of used cars decreased Segment Assets: 818.2bn yen, up by 65.7bn yen YTD (+9%) Increase in new auto leases, acquisition a ren
Slide 28: Segment Performance (2) Maintenance Leasing
Segment Performance（2）Maintenance Leasing （JPY Bn） FY16.3 FY17.3 FY18.3 Change (YoY) FY18.3 Results Finance revenues 12.1 13.0 14.1 108% Increased in new auto leases Operating leases 188.8 187.2 189.6 101% Services income 66.8 66.3 67.8 102% Developed IoT services with telematics for Segment Rev
Slide 29: Segment Performance (3) Real Estate
Segment Performance（3）Real Estate Segment Profits: 62.4bn yen, down by 10.5bn yen YoY (▲14%) Decreased YoY due to the absence of large capital gain, solid contribution from service income Segment Assets: 620.2bn yen, down by 37.5bn yen YTD (▲6%) Assets decreased YTD due to the sales of renta
Slide 30: Segment Performance (3) Real Estate
Segment Performance（3）Real Estate （JPY Bn） FY16.3 FY17.3 FY18.3 Change (YoY) FY18.3 Results Finance revenues 6.7 2.3 2.1 89% Operating leases 60.3 88.2 46.9 53% Promoted portfolio rebalance as a market Gains on Rental Property Sales 16.1 49.7 13.0 26% remained favorable Services income 110.6 112.6
Slide 31: Segment Performance (4) Investment and Operation
Segment Performance（4） Investment and Operation Segment Profits: 96.1bn yen, up by 11.1bn yen YoY (+13%) Profit from environment and energy business and concession business increased steadily Segment Assets: 847.7bn yen, up by 79.0bn yen YTD (+10%) New investments in environment and energy b
Slide 32: Segment Performance (4) Investment and Operation
Segment Performance（4） Investment and Operation （JPY Bn） FY16.3 FY17.3 FY18.3 Change (YoY) FY18.3 Results Finance revenues 12.6 10.7 9.0 84% Gains on investment securities and dividends 10.3 13.0 7.6 59% The profit from concession business Sales of goods and real estate 718.9 938.4 1,048.7 112% in
Slide 33: Segment Performance (5) Retail
Segment Performance（5） Retail Segment profits: 74.5bn yen, up by 1.7bn yen YoY (+2%) Finance revenue in banking business and life insurance premiums increased Segment assets: 3,174.5bn yen, down by 117.1bn yen YTD (▲4%) Assets decreased due to sales of investment securities in OLI and run‐of
Slide 34: Segment Performance (5) Retail
Segment Performance（5） Retail （JPY Bn） FY16.3 FY17.3 FY18.3 Change (YoY) FY18.3 Results Finance revenues 55.3 59.2 61.2 103% Life insurance policies in force steadily Life insurance premiums and 190.8 297.9 353.0 118% increased related investment income Services income and others 8.2 11.6 14.5 125
Slide 35: Segment Performance (6) Overseas Business
Segment Performance（6） Overseas Business Segment Profits: 106.6bn yen, down by 5.7bn yen YoY (▲5%) 5.2bn yen increased due to FX rate fluctuation Profit growth in aircraft and ship‐related operations as well as asset management business Loss on sales of shares of affiliates, lower contributi
Slide 36: Segment Performance (6) Overseas Business
Segment Performance（6） Overseas Business （JPY Bn） FY16.3 FY17.3 FY18.3 Change (YoY) FY18.3 Results Finance revenues 75.0 81.3 96.4 119% Gain on investment securities and dividends 16.1 13.3 17.5 131% Aircraft‐related operations steadily Operating leases 92.0 88.5 111.4 126% expanded Services incom
Slide 37: Segment Performance (6) Overseas Business
Segment Performance（6） Overseas Business ■ Breakdown of segment assets in Overseas Business （JPY Bn） Change By Region 16.3 17.3 18.3 (YTD) The Americas 787.2 879.3 855.6 97% Asia and Australia 592.3 593.6 643.5 108% Greater China 260.3 315.6 329.6 104% Middle East and Europe 49.3 36.5 20.5 56% ORIX
Slide 38: Business Portfolio in Three Categories
Business Portfolio in Three Categories Copyright © 2018 ORIX Corporation All rights reserved. 38
Slide 39: Business Portfolio in Three Categories
Business Portfolio in Three Categories Finance Operation Investment Main Risk Credit risk Operation/Business risk Market risk Categories Capital Requirement Low Medium‐High High Environment/ Financial Maintenance Fixed Tangible Japan Overseas Others Equity Infrastructure Services Services Income Ass
Slide 40: Business Portfolio in Three Categories: Segment Profits
Business Portfolio in Three Categories Segment Profits （JPY Bn） Change The 3 categories Sub Categories FY16.3 FY17.3 FY18.3 (YoY) Finance Japan 50.4 56.0 73.4 131% Overseas 32.3 41.4 15.5 37% Subtotal 82.6 97.3 88.8 91% Operation Environment/Infrastructure 21.8 37.0 45.7 123% Financial Services 115.
Slide 41: Business Portfolio in Three Categories: Segment Assets
Business Portfolio in Three Categories Segment Assets （JPY Bn） Change The 3 categories Sub Categories 16.3 17.3 18.3 (YTD) Finance Japan 2,775.9 2,905.3 2,969.8 102% Overseas 868.3 901.3 977.4 108% Subtotal 3,644.2 3,806.6 3,947.2 104% Operation Environment/Infrastructure 451.7 505.9 608.6 120% Fina
Slide 42: Usage of Shareholders' Equity
Usage of Shareholders’ Equity Employed capital ratio* is controlled within the range meeting single A rating requirement *ORIX calculation (Risk Capital/Shareholders’ Equity) Employed Capital Ratio Breakdown of Capital Employed （JPY Bn） 18.3 15% 30% Shareholders’ Equity 2,682.4 Employed 2,269.8 18
Slide 43: 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 44: ORIX Corporation
For the current IR materials and archives of past financial data please access our website ORIX Website https://www.orix.co.jp/grp/en/ IR Section https://www.orix.co.jp/grp/en/ir/ ORIX Corporation Corporate Planning Department World Trade Center Building., 2‐4‐1, Hamamatsu‐cho, Minato‐ku, Tokyo 105‐