Slide 1: Third Quarter Consolidated Financial Results
ORIX Corporation Third Quarter Consolidated Financial Results For The Nine-Month Period Ended December 31, 2022 Hitomaro Yano Executive Officer Corporate Function Unit Responsible for Treasury, Accounting, Corporate Planning, Investor Relations and Sustainability February 6, 2023 1 Company Name (TSE
Slide 2: Executive Summary
Executive Summary (1) Q1-Q3 net income 211.4 Bln JPY (up YoY, achieved 85% of net income target*), annualized ROE of 8.6% Posted FY23.3 Q3 net income of 89.6 Bln JPY (up 50% QoQ, up 39% vs. FY22.3 Q3) Q3 segment profits rose QoQ in 7 of 10 segments *FY23.3 net income target of 250.0 Bln JPY. (2) Reo
Slide 3: Net Income & ROE
Net Income & ROE ✓ Q1-Q3 211.4 Bln JPY in net income* (up YoY), annualized ROE of 8.6% ✓ 89.6 Bln JPY in Q3 net income, up 29.7 Bln JPY QoQ (+50%), second highest quarterly net profit recorded since start of pandemic Full fiscal year Quarterly 400 (Bln JPY) 13.0% (Bln JPY) 12.6% 10.6% 10.9% 350 12.1
Slide 4: Breakdown of Segment Profits
Breakdown of Segment Profits 229.1 Bln JPY, down 17% YoY (-46.3 Bln JPY) FY23.3 Q1-Q3 Segment profits Base profits Insurance down owing to COVID-related payout expenses, but profits in four segments (incl. Aircraft and Ships) up YoY on reopening 290.7 Bln JPY -13% YoY Investment 61.6 Bln JPY, up 4%
Slide 5: Recovery Progressing in COVID-Impacted Businesses
Recovery Progressing in COVID-Impacted Businesses ✓ Total segment profits at three COVID-impacted businesses recovering since the beginning of FY23.3 ✓ Insurance profits improving, as changes to eligibility requirements led to decline in COVID-related payout expenses in Q3 Segment profits Three COVI
Slide 6: Recovery Progressing in COVID-Impacted Businesses
Recovery Progressing in COVID-Impacted Businesses ✓ Aircraft and Ships: Profits up, fueled by rebound in North American, European passenger markets ✓ Facility operations: Occupancy rates now around 80%, average daily rates (ADR) have mostly recovered to pre- pandemic (FY20.3) levels ✓ Concession: Sh
Slide 7: Ongoing Capital Recycling
Ongoing Capital Recycling ✓ In overseas renewable energy business, sold part of Ormat stake (Q3), plan to make Elawan wholly- consolidated subsidiary (Q4) ✓ In domestic PE business, exited Net Japan (Q3), completed investment in DHC in January *Major investment pipeline projects as of September 2022
Slide 8: Segment Profits
Segment Profits ✓ PE Investment, Environment and Energy, Aircraft and Ships segment profits rose YoY, while Insurance, ORIX USA, and ORIX Europe fell ✓ Recorded strong quarterly profits, with 7 of 10 segments including Energy and Environment, Insurance, and ORIX Europe up QoQ Segment Profits Breakdo
Slide 9: Segment Assets
Segment Assets ✓ Assets increased, mainly due to changes in forex ✓ Segment asset ROA (annualized) improved QoQ (up 0.3%) (Bln JPY) Segment Assets Breakdown 23.3 3Q Vs. end 22.3 ROA* Highlight Overseas 1 Corporate Financial Services 1,515.4 -1.4 3.4% Essentially flat vs. end-FY22.3, as large new tra
Slide 10: Shareholder Returns
Shareholder Returns ✓ Maintain basic policy of “1/3 of net income allocated to dividends, 1/3 to new investments, and 1/3 to retained earnings and share buybacks” ✓ Completed 50.0 Bln JPY buyback program, cancelled 23.43 million shares (2% of outstanding shares) ✓ FY23.3 full-year dividend: 85.6 JPY
Slide 11: Segment Performance
Segment Performance Copyright © 2023 ORIX Corporation All rights reserved. 11
Slide 12: Corporate Financial Services and Maintenance Leasing
Corporate Financial Services and Maintenance Leasing Segment profit: 56.4 Bln JPY YoY -5.4 Bln JPY (-9％) Segment assets: 1,515.4 Bln JPY YTD -1.4 Bln JPY (flat) ✓ Corporate Financial Services: Profits healthy if year-earlier investment gains ✓ Corporate Financial Services: Balance flat on large tran
Slide 13: 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 14: Real Estate
Real Estate Segment profit: 24.5 Bln JPY YoY -2.1 Bln JPY (-8%) Segment assets: 946.1 Bln JPY YTD +36.0 Bln JPY (+4%) ✓ Facility operations: Earnings improved dramatically as reopening progresses ✓ Assets rose as development of new logistics centers and other properties offset ongoing property sales
Slide 15: Real Estate – About the Business
Real Estate – About the Business Main Business: Real estate development, rental and management; facility operation; real estate asset management Segment Assets Unrealized gains on rental （as of end-March 2022） Segment Asset Trends properties* Primarily DAIKYO Primarily leased logistics facilities, 2
Slide 16: PE Investment and Concession
PE Investment and Concession Segment profit: 6.7 Bln JPY YoY +17.3 Bln JPY (return to black) Segment assets: 340.8 Bln JPY YTD -12.8 Bln JPY (-4%) ✓ Profits rose YoY on sale of investee in 3Q, even after considering absence ✓ Impact of sale of Net Japan offset new investment in HEXEL Works, of year-
Slide 17: 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 18: Environment and Energy
Environment and Energy Segment profit: 34.1 Bln JPY YoY +15.8 Bln JPY (+86%) Segment assets: 761.8 Bln JPY YTD +58.2 Bln JPY (+67.7 Bln JPY from forex) ✓ Profits up dramatically on partial sale of Ormat stake, higher prices in ✓ Assets increased due to changes in forex electricity spot market overse
Slide 19: Global Renewable Energy Portfolio
Global Renewable Energy Portfolio ✓ Total net owned operating capacity of 3.4 GW worldwide （as of end-December 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 ・E
Slide 20: Insurance
Insurance Segment profit: 24.0 Bln JPY YoY -20.7 Bln JPY (-46%) Segment assets: 1,944.8 Bln JPY YTD -127.4 JPY Bln (-6%) ✓ Excluding impact of higher COVID-19 related payout expenses, profits up ✓ Positive on embedded value basis, despite lower mark-to-market value of YoY on growth in policies in fo
Slide 21: 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 22: Banking and Credit
Banking and Credit Segment profit: 24.9 Bln JPY YoY -7.7 Bln JPY (-24%) Segment assets: 2,728.0 Bln JPY YTD +40.8 Bln JPY (+2%) ✓ 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 lo
Slide 23: 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 24: Aircraft and Ships
Aircraft and Ships Segment profit: 17.0 Bln JPY YoY +14.2 Bln JPY (+499%) Segment assets: 695.8 Bln JPY YTD +11.7 Bln JPY (+55.4 Bln JPY from forex) ✓ Aircraft: Profits up sharply on higher leasing and service revenues, ✓ Assets increased overall, as forex effects offset sales of owned ships support
Slide 25: Aircraft and Ships – About the Business
Aircraft and Ships – About the Business GLOBALLY NARROWBODY OEM DIVERSE WEIGHTING BREAKDOWN Owned Committed ORIX （NBV） （number of aircraft） （number of aircraft） fleet fleet Aviation 50 0 14% 22% ✓ Fully-owned subsidiary Average age ✓ Mainly trading in second-hand 36% 44% 6.6 6.4 years market ✓ Arran
Slide 26: ORIX USA
ORIX USA Segment profit: 33.0 Bln JPY YoY -34.4 Bln JPY (-51%) Segment assets: 1,454.7 Bln JPY YTD +90.5 Bln JPY (+116.0 Bln JPY from forex) ✓ Private equity: Multiple exits in the previous period led to reduction in ✓ USD-denominated assets declined capital gains ✓ Maintained low non-performing loa
Slide 27: ORIX USA
ORIX USA ✓ Instituted more conservative risk management stance, reflecting uncertain economic, monetary outlook in US ✓ Implemented enhanced internal controls and changes to committees in order to grow asset management business Segment Profit Breakdown (FY23.3) （USD Mln） Capital gains Base profits B
Slide 28: 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 $74.9 Bln) ✓ Operates a hybrid strategy, investing own principal capital while providing capital market and ass
Slide 29: ORIX Europe
ORIX Europe Segment profit: 35.9 Bln JPY YoY -20.1 Bln JPY (-36%) Segment assets: 404.9 Bln JPY YTD +3.1 Bln JPY (+14.0 Bln JPY from forex) ✓ Profits fell YoY owing to lower AUM ✓ Assets increased due to changes in forex ✓ Segment profit up sharply QoQ thanks to Transtrend performance fee booked in
Slide 30: 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 31: 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 32: Asia and Australia
Asia and Australia Segment profit: 34.1 Bln JPY YoY -1.0 Bln JPY (-3%) Segment assets: 1,394.4 Bln JPY YTD +88.3 Bln JPY (+51.8 Bln JPY from forex) ✓ Reopening-fueled increase in new business deal executions in Asia led to ✓ Assets up on new business deal execution in Asia markets and due to higher
Slide 33: 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 34: Appendix
Appendix Copyright © 2023 ORIX Corporation All rights reserved. 34
Slide 35: 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*2 312.1Bln JPY 9.9% 12％ 3.4GW Enhanced shareholder returns Well-balanced earnings*1 Top-class investment track r
Slide 36: 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 Bln Bn JPY JPY COVID-19 crisis 350 300 250 FY2009.3 FY2002.3 Global financial crisis Burst of IT bubble 200 150
Slide 37: 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 © 2023 ORIX Corporation All rights reserved. 37
Slide 38: FY23.3 Q1-Q3 Results and Full-Year Outlook
(From FY23.3 H1 results presentation announced in FY23.3 Q1-Q3 Results and Full-Year Outlook Nov 2022 with some updates) FY23.3 Q1-Q3 Results Full-Year Outlook*1 FY25.3 Target*2 Net income 211.4 Bln JPY 250.0 Bln JPY 440.0 Bln JPY ROE 8.6% 7.5% 11.7% Financial Maintained an A-rating equivalent finan
Slide 39: 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 Bln JPY in net income by FY25.3 ✓ After FY25.3, will sustain growth into FY30.3 supported by new investments
Slide 40: 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 41: Breakdown of Investment Gains
Breakdown of Investment Gains Investment Gains* Major Business Sales (Bln 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 1
Slide 42: Capital Recycling - Profit Growth
Capital Recycling - Profit Growth (From FY23.3 H1 results presentation announced in Nov 2022 with some updates) ✓ 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
Slide 43: 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% 4.0 85% 85% 7.5 (Tln JPY) 7.0 7.1 6.8 3.5(Tl
Slide 44: 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 Foreign currency funding costs Deposits Yen funding costs 31% Borrowings from FY23.3 Q3 financial 7.5 Tln JPY institutions 3.27% 3.
Slide 45: 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-Dec 2022 ◼ Japanese Yen & US Dollar = Negligible 3.8x S&P A- (Stable)*1 ◼ Euro = -2 to -3 Bln JPY 3.4x 11.5% *Sensitivity of pre-tax profits assum
Slide 46: ESG
ESG ✓ ORIX now included in all five ESG indices (for Japanese stocks) adopted by Government Pension Investment Fund (GPIF) ✓ ORIX’s Board of Directors now has a majority of outside directors (ESG-related Key Goal 1.). Making progress towards achievement of other key goals *Link to Presentation at Mo
Slide 47: 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 48: 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 48 Company Name Copyri