Tokyo Century Corporation · TSE:8439

Tokyo Century — FY2024 Q3 Earnings Presentation

57 slides from Tokyo Century's earnings presentation, February 2025

1. Slide 1: IR Presentation for FY2024 Q3

   IR Presentation for FY2024 Q3 All Rights Reserved, Copyright © Tokyo Century Corporation 1

2. Slide 2: Contents

   Reference Material (2) Results for FY2024 Q3 Highlights of Medium-Term Management Plan 2027 Executive Summary 4 Management Targets: Financial and Non-financial Targets 33 Financial Highlights 5 ROE and P/B Ratio 34 Net Income & ROA by Operating Segment 6 Initiatives for Improving the P/B Ratio 35 Re

3. Slide 3: Results for FY2024 Q3

   Results for FY2024 Q3 All Rights Reserved, Copyright © Tokyo Century Corporation 3

4. Slide 4: Executive Summary

   Executive Summary Net income*1 increased ¥15.0 billion (+26%) YoY to ¥72.0 billion, the highest ever for Q1–Q3 - Specialty Financing’s strong performance in aviation and real estate drove performance, boosting the segment’s net income by ¥7.4 billion YoY. - Net income achieved 90.0％ of the annual ta

5. Slide 5: Financial Highlights

   Financial Highlights Both ordinary income and net income hit a record high for Q1–Q3 （Billions of yen） FY2023 FY2024 FY2024 Q3 Result Q3 Result Change % Change Forecast % Progress Ordinary income 91.2 101.7 10.5 11.6% 125.0 81.4% Net income (loss) attributable to owners of parent 57.1 72.0 15.0 26.3

6. Slide 6: Net Income & ROA by Operating Segment

   Net Income & ROA by Operating Segment Income increased YoY in Specialty Financing, Automobility, and International Business Net income attributable to owners of parent for Q1–Q3 ROA (Net income / Segment assets) All Rights Reserved, Copyright © Tokyo Century Corporation 6

7. Slide 7: Results of Equipment Leasing

   Results of Equipment Leasing （Billions of yen) FY2023 FY2024 FY2024 Factors in changes and annual forecast Q3 Result Q3 Result Change Forecast Gap Revenues 343.7 333.3 -10.4 Gross profit 26.9 27.9 1.0 Ordinary income (YoY) Operating income 17.6 17.2 -0.4 ∎ Decreased mainly due to increased SG&A expe

8. Slide 8: Results of Automobility

   Results of Automobility （Billions of yen) FY2023 FY2024 FY2024 Q3 Result Q3 Result Change Forecast Gap Factors in changes and annual forecast Revenues 262.9 229.3 -33.6 Gross profit Ordinary income (YoY) 68.9 72.0 3.1 Operating income 27.8 29.5 1.7 ∎ Nippon Car Solutions (NCS) Ordinary income 28.1 3

9. Slide 9: Results of Specialty Financing

   Results of Specialty Financing （Billions of yen) Factors in changes and annual forecast FY2023 FY2024 FY2024 Q3 Result Q3 Result Change Forecast Gap Ordinary income (YoY) Revenues 226.8 247.2 20.4 ∎ Aviation Gross profit 51.9 61.4 9.5 Increased mainly due to ACG’s increased gains on sales of aircraf

10. Slide 10: Results of International Business

    Results of International Business （Billions of yen) Factors in changes and annual forecast FY2023 FY2024 FY2024 Q3 Result Q3 Result Change Forecast Gap Revenues Ordinary income (YoY) 126.3 157.4 31.1 Gross profit 38.7 45.2 6.5 ∎ Asia Operating income 11.0 11.9 0.9 Increased mainly due to foreign exc

11. Slide 11: Results of Environmental Infrastructure

    Results of Environmental Infrastructure （Billions of yen) Factors in changes and annual forecast FY2023 FY2024 FY2024 Q3 Result Q3 Result Change Forecast Gap Revenues 44.3 45.4 1.2 Ordinary income (YoY) Gross profit 7.3 4.6 -2.7 ∎ Decreased, mainly due to the absence of one-time gains recorded in Op

12. Slide 12: Reference Material (1) Topics by Operating Segment

    Reference Material (1) Topics by Operating Segment All Rights Reserved, Copyright © Tokyo Century Corporation 12

13. Slide 13: Performance of NTT TC Leasing (NTL)

    Performance of NTT TC Leasing (NTL) Ordinary income increased steadily, up ¥1.1 billion, and TC’s equity in NTL’s earnings was up ¥0.3 billion YoY Financial results for nine months ended Dec. 31, 2024 Main co-creative business fields NTT TC Leasing’s result (billions of yen) Environment and energy F

14. Slide 14: Value Improvement of Nippon Rent-A-Car Service (NRS)

    Value Improvement of Nippon Rent-A-Car Service (NRS) Pursue growth with the value improvement plan including relocations and renovations ▮Objectives ▮Car rental sales after value improvement To realize three-way satisfaction (employee happiness, customer happiness, Reference: and good business perfo

15. Slide 15: NRS's Performance

    NRS’s Performance Income reached a record high for Q1–Q3 due to high-efficiency operations and inbound demand ■Car Rental Performance Trends (Quarterly) Revenues (excl. sales of used vehicles) Ordinary income Index of total amount of rental cost and SG&A expenses (Comparison with the same quarter of

16. Slide 16: Aviation Business Strategies

    Aviation Business Strategies Drive further growth by capturing demand in thriving aircraft markets Portfolio overview and growth strategies Recurring revenue business (ACG) Services, etc. (GA Telesis and other) GA Telesis (equity-method affiliate) Develop operating leases and others in 90 countries

17. Slide 17: ACG's Financial Performance I

    ACG’s Financial Performance I Pre-tax income increased primarily due to gain on sale of aircraft Financial results (nine months ended September 30, 2024) ACG's Result (USD million) FY2023 FY2024 ∎ Revenues Q3 Result Q3 Result Change %Change Increased due to higher operating lease revenue and gain on

18. Slide 18: ACG's Financial Performance II

    ACG’s Financial Performance II Pre-tax income increased YoY mainly due to a significant increase in gain on sale of aircraft, and ROA is on an upward trend Financial results (fiscal year ended December 31, 2024) ACG's Result (USD million) ∎ Revenues FY2023 FY2024 Result Result Driven by an increase

19. Slide 19: ACG's Earnings Power

    ACG’s Earnings Power Gain on sale of aircraft significantly increased as a result of enhanced trading activities 1. Quarterly changes in operating lease revenue, interest expense and federal funds rate (USD million) 1,059 Annual 1,006 901 879 887 1,040 300 total 283 285 283 8.00% 249 253 253 251 250

20. Slide 20: ACG's Financing Activities

    ACG’s Financing Activities Diversified financing sources while flexibly responding to market conditions Financing strategies – ACG builds flexibility into its financing strategy by accessing multiple capital sources. In addition to the issuance of senior notes in the US bond market, ACG leverages To

21. Slide 21: ACG's Portfolio

    ACG’s Portfolio Diversified portfolio with a focus on liquid narrowbody aircraft in approx. 45 countries worldwide Portfolio overview (as of September 30, 2024) Geographic concentration (as of September 30, 2024) Owned, managed and committed aircraft: 514 欧州 Europe 26% (Owned: 296 Managed: 56 Commit

22. Slide 22: Real Estate Business: Portfolio Strategy

    Real Estate Business: Portfolio Strategy Promote growth through overseas projects and collaboration with TC Kobelco Real Estate, in addition to steady progress in development projects Portfolio Project completion schedule Japan Overseas Urban redevelopment projects Collaboration with prime partners

23. Slide 23: Performance of CSI Leasing (CSI)

    Performance of CSI Leasing (CSI) Expect to generate secondary income in Q3 and Q4 and achieve growth on a full-year basis Financial results (nine months ended September 30, 2024) Balance of segment assets by region (USD million) FY2023 FY2024 Since becoming our wholly owned subsidiary in 2016, Q3 Re

24. Slide 24: CSI's Growth Strategies

    CSI’s Growth Strategies Global strategies are rapidly boosting segment assets, contributing to future income 4,500 Profit Structure and Future Growth - CSI’s profits consist mainly of gains on sale or re-leasing income of equipment at the end of the 2–3 year lease terms. 4,000 - Global strategies co

25. Slide 25: CSI's Global Strategies

    CSI’s Global Strategies Globally consistent services drive expansion of business bases Further expand the network including ITAD service locations through M&A ITAD service location in Japan CSI acquired a 20% stake of EPC Japan in 2023 Approx. 40 bases in the U.S. Base in Hungary Transaction states

26. Slide 26: Data Center Business with the NTT Group

    Data Center Business with the NTT Group Pursue expansion of data center (DC) business, utilizing strengths of the NTT DATA Group and Tokyo Century Profitability of DC business in the U.S. Collaboration with the NTT DATA Group (according to a survey by a research firm） - Collaboration in DC business

27. Slide 27: Overseas Renewable Energy Projects

    Overseas Renewable Energy Projects Collaboration with prime partners to increase high-return projects overseas Investment projection North America and Europe Main targets for higher profitability and more deals Despite different conditions for each project, the standard investment projection is the

28. Slide 28: Ordinary Income and ROA by Operating Segment

    Ordinary Income and ROA by Operating Segment Ordinary income increased ¥10.5 billion YoY primarily due to aviation business and real estate business in Specialty Financing Ordinary income ROA (Ordinary income / Segment assets) (billions of yen) All Rights Reserved, Copyright © Tokyo Century Corporat

29. Slide 29: Breakdown of Ordinary Income (Core earnings, gain on sales, impairment, etc.)

    Breakdown of Ordinary Income (Core earnings, gain on sales, impairment, etc.) Core earnings amounted to ¥95.3 billion, up ¥5.2 billion YoY YoY Quarterly changes (Billions of yen) Impairment, bad debt expenses, and gain (loss) Core earnings Gain on sales*1 on valuation of operational investment secur

30. Slide 30: Breakdown of Ordinary Income by Operating Segment

    Breakdown of Ordinary Income by Operating Segment (Core earnings, gain on sales, impairment, etc.) NRSは3Q（zennnenndoのレジャー等の需要が増加）に利益が偏る傾向※ Core earnings in Specialty Financing increased due to the growth of aviation business （Billions of yen） FY2023 FY2024 Total Total Total Change Q1 Q2 Q3 Q4 Q1 Q2

31. Slide 31: Balance of Segment Assets by Operating Segment

    Balance of Segment Assets by Operating Segment Increased ¥51.3 billion from the end of the previous fiscal year, primarily due to increases in International Business and Automobility, in addition to the impact of exchange rate fluctuations * Exchange rate factors All Rights Reserved, Copyright © Tok

32. Slide 32: Reference Material (2) Highlights of Medium-Term Management Plan 2027

    Reference Material (2) Highlights of Medium-Term Management Plan 2027 All Rights Reserved, Copyright © Tokyo Century Corporation 32

33. Slide 33: Management Targets: Financial and Non-financial Targets

    Management Targets: Financial and Non-financial Targets Net income of ¥100.0 billion, ROE of 10%, and P/B ratio above 1.0 Align financial targets with net income-based figures Recognize the current cost of equity at 10% and aim to reduce it Set non-financial targets to promote ESG initiatives Financ

34. Slide 34: ROE and P/B Ratio

    ROE and P/B Ratio Analysis for P/B ratio above 1.0 Maintained a high ROE and realized profit growth by Medium-Term expanding the Specialty Financing, Automobility, Impact of COVID-19 Management Plan and International Business segments and Russia’s invasion 50.0% of Ukraine 2027 2.0 Price-to-book val

35. Slide 35: Initiatives for Improving the P/B Ratio

    Initiatives for Improving the P/B Ratio Aim to achieve ROE above 10% and reduce cost of shareholders’ equity by promoting TCX (TC Transformation) and eliminating information asymmetry through constructive dialogue with shareholders and investors, leading to P/B ratio above 1.0 ROE 8.8%* *ROE of FY20

36. Slide 36: Shareholder Returns (Dividend) Policy

    Shareholder Returns (Dividend) Policy Provide stable, long-term returns to shareholders, which is our basic policy Maintain stable returns to shareholders during the period of the Medium-Term Management Plan 2027 while balancing with growth investment and financial base While adopting a progressive

37. Slide 37: Balance Sheet Management (Medium-Term Management Plan 2027)

    Balance Sheet Management (Medium-Term Management Plan 2027) FY2022 FY2027 Increase in total assets by Total assets: approx. 6 trillion yen approx. 1 trillion yen Total assets: approx. 7trillion yen Segment Assets Liabilities and Equity （approx. ＋1.0） （approx. ＋1.0） Assets Liabilities (Trillions of y

38. Slide 38: Results and Challenges of Each Operating Segment for Achieving Medium-Term Management Plan 2027

    Results and Challenges of Each Operating Segment for Achieving Medium-Term Management Plan 2027 Automobility achieved the planned amount due in part to NRS’s contributions, while Specialty Financing and International Business strive to further enhance earnings power Comparison of FY2023 Result and F

39. Slide 39: Operating Performance of Equipment Leasing

    Operating Performance of Equipment Leasing To achieve the Medium-Term Management Plan 2027: Strengthen earnings power on a non-consolidated basis and expand joint businesses with partners, thereby increasing consolidated income FY2027 Targets ROA (based on ordinary income) 2.8% ROA (based on net inc

40. Slide 40: Operating Performance of Automobility

    Operating Performance of Automobility The Medium-Term Management Plan 2027 already achieved; next steps: Strengthen profitability in the existing business areas and accumulate prime assets FY2027 Targets ROA (based on ordinary income) 6.0% ROA (based on net income) Having already exceeded the plan,

41. Slide 41: Operating Performance of Specialty Financing

    Operating Performance of Specialty Financing To achieve the Medium-Term Management Plan 2027: Build high-quality portfolio, and improve ROA by facilitating asset turnover ROA (based on ordinary income) FY2027 ROA (based on net income) Targets 2.7% 2.5% 2.4% 3.7% 1.8% 1.8% 1.5% 1.1% 1.7% -0.8% 2,825.

42. Slide 42: Operating Performance of International Business

    Operating Performance of International Business To achieve the Medium-Term Management Plan 2027: Expand CSI’s assets and improve earnings power by investing in new growth areas FY2027 Targets ROA (based on ordinary income) 3.7% 3.7% ROA (based on net income) 2.2% 2.4% 2.1% 1.5% 1.5% 1.5% -0.2% Measu

43. Slide 43: Operating Performance of Environmental Infrastructure

    Operating Performance of Environmental Infrastructure To achieve the Medium-Term Management Plan 2027: Promote investment in overseas renewable energy and other projects FY2027 Targets ROA (based on ordinary income) 2.9% ROA (based on net income) 1.4% 0.2% 1.7% 0.7% -0.9% 0.1% Measures to achieve th

44. Slide 44: Reference Material (3) Promotion of Collaboration with Partner Companies

    Reference Material (3) Promotion of Collaboration with Partner Companies All Rights Reserved, Copyright © Tokyo Century Corporation 44

45. Slide 45: Collaboration with the NTT Group

    Collaboration with the NTT Group Collaboration underway in each business field by integrating the strengths of both companies 2005 2020 2021 2022 Started Collaboration with Auto leasing Leasing and finance Environment and Data centers Real estate Collaboration - NTT Auto Leasing and - Established a

46. Slide 46: Collaboration with ITOCHU Corporation

    Collaboration with ITOCHU Corporation Advancing collaboration with the ITOCHU Group in various projects Construction machinery and Environment and energy truck finance Domestic and overseas renewable energy projects ZAXIS Finance − Collaboration in domestic solar power and biomass power − Entered in

47. Slide 47: Reference Material (4) Topics for Decarbonization

    Reference Material (4) Topics for Decarbonization All Rights Reserved, Copyright © Tokyo Century Corporation 47

48. Slide 48: Efforts for Businesses Targeting Municipalities

    Efforts for Businesses Targeting Municipalities A combination of the third-party ownership model and collaboration with a new regional power company helps municipalities realize decarbonization Leveraging collaboration with many partner companies that has been cultivated in the business development,

49. Slide 49: Reference Material (5) Financial Data

    Reference Material (5) Financial Data In addition to this document, financial information is disclosed in the DATA BOOK (Excel format) available in the IR Library on the Company’s website on a quarterly basis. https://www.tokyocentury.co.jp/en/ir/library/2024.html All Rights Reserved, Copyright © To

50. Slide 50: Statement of Income

    Statement of Income （Billions of yen） # FY2023 FY2024 Major Factors in Changes Q3 Result Q3 Result Change %Change Revenues 1 1,003.4 1,011.8 8.5 0.8% Funding cost Costs 2 812.8 803.4 -9.5 -1.2% Increased mainly due to financing in foreign Funding cost 3 73.7 91.9 18.1 24.6% currency Gross profit 4 1

51. Slide 51: Balance Sheet

    Balance Sheet （Billions of yen） # Mar. 31, Dec. 31, Major Factors in Changes 2024 2024 Change %Change Total assets 1 6,460.9 6,563.4 102.5 1.6% Non-current assets, etc. Current assets 2 2,938.9 2,971.6 32.7 1.1% Increased mainly due to other operating assets, including data center related assets in

52. Slide 52: Interest-Bearing Debt

    Interest-Bearing Debt Balance of Interest-Bearing Debt Financing Cost Ratio*1,2 (Billions of yen) （Billions of yen） 2.7% Funding cost # Mar. 31, 2023 Mar. 31, 2024 Dec. 31, 2024 Change %Change Interest expense 2.3% Interest-bearing debt 1 4,514.7 4,749.0 4,855.8 106.8 2.2% Japanese yen 2 2,628.6 2,5

53. Slide 53: Balance of Segment Assets and Transaction Volume in Automobility

    Balance of Segment Assets and Transaction Volume in Automobility Segment assets increased ¥20.6 billion from the end of the previous fiscal year （Billions of yen） Mar. 31, 2021 Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2024 Dec. 31, 2024 Change Balance of segment assets 629.5 611.8 611.6 479.0 499.6 20.6

54. Slide 54: Quarterly Results of Subsidiaries and Affiliate in Automobility

    Quarterly Results of Subsidiaries and Affiliate in Automobility NRはSは3Q（夏季のレジャー等の需要が増加）に利益が偏る傾向※ NCS and NRS performed well and income hit a record high for Q1–Q3 FY 2023 FY 2024 Total Total Total Change Change Q1 Q2 Q3 Q4 Q1 Q2 Q3 (Q1-Q3) (Annual) (Q1-Q3) ( YoY ) ( YTD ) NCS 54.3 50.9 49.7 48.2 154

55. Slide 55: Balance of Segment Assets in Specialty Financing

    Balance of Segment Assets in Specialty Financing Segment assets increased ¥5.2 billion from the end of the previous fiscal year mainly due to an increase in real estate, in addition to the impact of exchange rate fluctuations （Billions of yen） Mar. 31, 2021 Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2024

56. Slide 56: Balance of Segment Assets in International Business

    Balance of Segment Assets in International Business Segment assets increased ¥66.9 billion from the end of the previous fiscal year due to increases in the U.S. 為替要因除き、セグメント資産残高は前期末比+70億円の増加 and Europe, in addition to the impact of exchange rate fluctuations （Billions of yen） Mar. 31, 2021 Mar. 31,

57. Slide 57: Forward-looking statements and contact information

    Any statements in this document, other than those of historical facts, are forward-looking statements about the future performance of Tokyo Century Corporation and its Group companies, which are based on management’s assumptions and beliefs in light of information currently available, and involve ri

Tokyo Century — FY2024 Q3 Earnings Presentation on 6ix