Fuyo General Lease Co., Ltd. · TSE:8424
Fuyo General Lease — 1H FY2019 Earnings Presentation
37 slides from Fuyo General Lease's earnings presentation, Nov 12, 2019
Slide 1: Financial Results Briefing for the 1st half of FY2019
Financial Results Briefing for the 1st half of FY2019 IR Presentation November 12, 2019 FUYO GENERAL LEASE CO., LTD. 1
Slide 2: Agenda
Agenda 1. Overview of consolidated operating results 2. Overview of business activities 3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan 4. Earnings forecast and dividend policy 5. Appendix During the second quarter ended September 30, 2019, the Company finalized the provisional
Slide 3: (1) 1H FY2019 results
1. Overview of consolidated operating results (1) 1H FY2019 results • Total revenues and profit records were rewritten in consecutive years thanks to the accumulation of quality operating assets and the contribution of the profits of BPO services centered on INVOICE INC. • While operating assets inc
Slide 4: (2) Total revenues (3) Ordinary profit and profit attributable to owners of parent
1. Overview of consolidated operating results (2) Total revenues (3) Ordinary profit and profit attributable to owners of parent Records from 1H FY2017 were rewritten following Past records for 1H results were rewritten in expansion of business field. consecutive years based on an increase in profit
Slide 5: (4) Factors causing the increase in ordinary profit
1. Overview of consolidated operating results (4) Factors causing the increase in ordinary profit • Profit before interest expenses increased by a large degree due to accumulation of operating assets primarily in strategic areas and consolidation of INVOICE INC. • The increase in personnel/equipment
Slide 6: (5) Profit before interest expenses
1. Overview of consolidated operating results (5) Profit before interest expenses • Profit before interest expenses increased by a large degree due to growth in profit from Leases due to accumulation of assets in strategic areas and significant growth in Other profit centered on BPO services. (¥100
Slide 7: (6) Changes in funding
1. Overview of consolidated operating results (6) Changes in funding • The direct financing environment is favorable and it is being aggressively utilized. • Rises in interest expenses and funding costs due to an increase in procurement of foreign currency were within plan range. (¥100 million) Fund
Slide 8: (7) Changes in costs (8) Changes in net assets and shareholders' equity ratio
1. Overview of consolidated operating results (7) Changes in costs (8) Changes in net assets and the shareholders’ equity ratio Overhead ratio maintained at a steady level Shareholders’ equity ratio maintained in despite an increase in costs due to Group approximately 10% range amid growth in expans
Slide 9: (1) Newly executed contract volume
2. Overview of business activities (1) Newly executed contract volume • Increased year on year for all segments • Increased 60% year on year overall for Leases, with strong performance centered on real estate and aircraft (¥100 million) Newly executed contract volume Accretive 6,887 Contributing fac
Slide 10: (2) Operating assets, ROA
2. Overview of business activities (2) Operating assets, ROA • Accompanying the growth in executed contracts, operating assets have also steadily increased. • ROA improved with accumulation of operating leases centered on real estate and aircraft, accompanied by a contribution from BPO services. (¥1
Slide 11: Frontier Expansion 2021
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Medium-Term Management Plan Frontier Expansion 2021 “Go Where No One Has Gone Before” Aiming to be a corporate group that moves into uncharted businesses and continues to expand the frontier 11
Slide 12: (1) Goals and three core strategies
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (1) Goals (target performance indicators) and three core strategies Target performance indicators Target value Interim goal 1H FY2019 Item FY2021 FY2019 results ¥2,300.0- Operating assets ¥2,500.0 billion ¥2,400.0 billion ¥2,366.7
Slide 13: (2) Position of each business, topics
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Expand alliance (2) Position of each business, topics partners The 100% Renewable Electricity Declaration Disruptive Innovations Sustaining Innovations Support Program Transformation Zone Performance Zone Revenue Performance (Grow
Slide 14: (3) Progress on the Medium-Term Management Plan: Operating assets
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (3) Progress on the Medium-Term Management Plan: Operating assets ・ Balances of operating assets of high-profitability strategic areas centered on real estate and aircraft have steadily increased. ・ These operating assets hold an i
Slide 15: (4) Transitions in contract spread
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (4) Transitions in contract spread(*1) (Ref) • General leases (*2) improvement trend continues (*2) General leases: leases excluding real estate leases (A category within the Company’s management accounting) • Maintained high level
Slide 16: Status of Progress in Strategic Areas and Topics
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Status of Progress in Strategic Areas and Topics *In 1H FY2019, the Company changed its method for calculating results in ordinary profit for each business area. As a result, ROA for FY2018 has been restated to reflect the change.
Slide 17: (5) Real estate
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (5) Real estate Areas Continued steady accumulation of operating assets (¥100 million) ① Overcame exits from large bridge-type Operating assets and ROA (％) 4.0 contracts in 1H and steadily increased (Real estate leases) T
Slide 18: (5) Real estate: No major changes in composition of assets
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (5) Real estate Areas No major changes in composition of assets Breakdown of real estate leases by building application Based on operating assets • Percentages are approximate values based on figures used internally for m
Slide 19: (6) Aircraft
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (6) Aircraft Areas Continue fully integrated business utilizing inhouse platform (¥100 million) Target of (％) ① In 1H we arranged leases for four self- Aircraft leasing operating assets and ROA 6.0 the plan owned aircraft
Slide 20: (7) Overseas
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (7) Overseas Areas Group Promote creation of Group synergies overseas (Overseas = Business of overseas subsidiaries, excluding aircraft leasing) ① Operating assets decreased, partly due to (¥100 million) (％) 4.0 Overseas
Slide 21: (8) Energy/environment: Solar power generation
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (8) Energy/environment Areas Frontiers Solar power generation business operations perform steady (¥100 million) (％) Operating assets and ROA of the solar power generation 20.0 business in Energy/environment Target of ① No
Slide 22: (8) Energy/environment: Expanding services
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (8) Energy/environment Areas Frontiers Expanding services in response to growing environmental awareness The 100% Renewable Electricity Declaration Support Program ✔ Started finance program in October for companies and or
Slide 23: (9) Medical/social welfare
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (9) Medical/social welfare Areas Group Steadily expand business domains through collaboration in and outside the Group ① FPS Medical(*) growing steadily (¥100 million) Operating assets of FPS Medical Steady increase in co
Slide 24: (10) BPO services (New domains): Overview of NOC
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (10) BPO services (New domains) Areas Frontiers Group Made NOC Outsourcing & Consulting, Inc. (NOC) a consolidated subsidiary Effects of NOC becoming a Group company ① Expand domain: General BPO services, adding to our ex
Slide 25: (10) BPO services (New domains): Services provided
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (10) BPO services (New domains) Areas Frontiers Group Enabling provision of services to meet diverse needs ■Concept of service provision using NOC *New services and functions acquired through (Reference) Profit level of c
Slide 26: (1) FY2019 consolidated earnings forecast
4. Earnings forecast and dividend policy (1) FY2019 consolidated earnings forecast (¥100 million) 1H FY2019 FY2019 results forecast Total revenues 3,445 7,000 Operating profit 205 395 Ordinary profit 220 420 Profit attributable to owners of 137 260 parent Basic earnings per share ¥455.81 ¥862.49 26
Slide 27: (2) Dividend policy
4. Earnings forecast and dividend policy (2) Dividend policy End of 1H FY2019 — Interim dividend payment as initially forecast: ¥100 End of FY2019 — Annual dividend payment forecast unchanged from initial forecast (¥200) (¥) Change in dividend 50th anniversary 200 commemorative 188 dividend of ¥14 1
Slide 28: (1) Topics related to SDGs
5. Appendix (1) Topics related to SDGs ✔ Initiatives for decarbonizing ✔ Major indexes that incorporate the Company An index comprising companies that are • First Japanese general leasing FTSE4Good Index conducting outstanding measures from an 2018 Sept. company to join RE100 Series ESG perspective,
Slide 29: (2) Key topics
5. Appendix (2) Key topics Other Consolidated main office functions into the office in Kojimachi, Chiyoda (Relocation period: after May 2020) Real estate Acquired trust beneficiary rights of Nasu Garden Outlet jointly with Sojitz Commerce Q1 Development Corporation Energy/ Announced agreement with p
Slide 30: (3) Summary of consolidated operating results
5. Appendix (3) Summary of consolidated operating results (¥100 million) YoY change 1H 1H 1H 1H 1H (1H FY2018 FY2015 FY2016 FY2017 FY2018 FY2019 to 1H FY2019) Total revenues 2,485 2,450 3,026 2,957 3,445 +489 Total costs 2,223 2,179 2,714 2,636 3,077 +441 (Interest expenses) [33] [36] [36] [41] [47]
Slide 31: (4) Segment results (consolidated)
5. Appendix (4) Segment results (consolidated) (¥100 million) Leases Installment sales Leases and Installment sales total 1H 1H YoY YoY 1H 1H YoY YoY 1H 1H YoY YoY Change Change Change Change Change Change FY2018 FY2019 (amount) (%) FY2018 FY2019 (amount) (%) FY2018 FY2019 (amount) (%) Total revenue
Slide 32: (5) Newly executed contract volume
5. Appendix (5) Newly executed contract volume (¥100 million) YoY Change （単位：億円） YoY change 1H 1H 1H 1H 1H (amount) (%) (1H FY2018 to (1H FY2018 to FY2015 FY2016 FY2017 FY2018 FY2019 1H FY2019) 1H FY2019) Leases 2,081 2,570 2,807 1,884 3,016 +1,133 +60.1% Finance leases [1,759] [2,061] [2,191] [1,63
Slide 33: (6) Newly executed lease contract volume (by type of equipment)
5. Appendix (6) Newly executed lease contract volume (by type of equipment) (¥100 million) YoY change 1H 1H 1H Segment (1H FY2018 to FY2017 FY2018 FY2019 1H FY2019) IT & office equipment 976 974 1,199 +225 Industrial machinery 122 135 260 +125 Civil engineering and 47 42 52 +9 construction machinery
Slide 34: (7) Operating assets
5. Appendix (7) Operating assets (¥100 million) YoY Change YoY change 1H (amount) (%) FY2015 FY2016 FY2017 FY2018 FY2019 (FY2018 to (FY2018 to 1H FY2019) 1H FY2019) Leases 12,440 13,698 14,744 15,648 16,265 +617 +3.9% Finance leases [10,060] [10,486] [10,987] [10,835] [11,131] [+296] [+2.7%] Operati
Slide 35: (8) Leases and Financing: Asset balance and gross margin on assets
5. Appendix (8) Leases and Financing: Asset balance and gross margin on assets Leases: Asset balance and gross margin on assets Financing: Asset balance and gross margin on assets (¥100 million) (¥100 million) 7,0 00 5.0 5 6,221 16,265 6,0 00 5,634 5,737 15,648 14,744 5,325 4.0 13,698 4 5,0 00 4,763
Slide 36: (9) Overview of non-consolidated results and principal consolidated companies' results
5. Appendix (9) Overview of non-consolidated results and principal consolidated companies’ results (¥100 million) Fuyo General Lease Co., Ltd. Fuyo Auto Lease Co., Ltd. Sharp Finance Corporation (non-consolidated) (ownership ratio: 100%) (ownership ratio: 65%) YoY YoY YoY 1H FY2018 1H FY2019 change
Slide 37: "Go Where No One Has Gone Before"
“ Go Where No One Has Gone Before” FUYO GENERAL LEASE CO., LTD. 37