Orix Corporation · TSE:8591
Orix — H1 FY2013 Earnings Presentation
38 slides from Orix's earnings presentation, November 2012
Slide 1: Second Quarter Consolidated Financial Results
ORIX Corporation (TSE: 8591; NYSE: IX) Consolidated Financial Results Second Quarter Consolidated Financial Results For the Six Month Period Ended April 1 – September 30, 2012 Haruyuki Urata Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of the Treasury Headquarters T
Slide 2: Disclaimer
Disclaimer These materials have been prepared by ORIX O Corporation C (“O (“ORIX” or the “Company”) “C ) solely ffor your information f 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
Slide 3: Contents
Contents I I. Overview P3 P.3 II. Segment Evaluation and Strategies P.4 II. Future Direction P.7 III. Segment Performance P.8 IV Summary IV. P 16 P.16 Appendix pp P.17 Copyright © 2012 ORIX Corporation All rights reserved. 2
Slide 4: I. Overview
I. Overview Achieved 59.8bn in Net Income, up 34% YoY 60% of the 100bn full y year target g （JPY Bn） Net Income* and ROE 120.0 12% 100.0 100.0 10% 83 5 83.5 80.0 8% 66.0 59.8 60.0 6% 40.0 36.5 4% 20.0 2% 0.0 0% 10/3 11/3 12/3 13/3 13/3 First Half (Target) *Net Income refers to Net Income Attribu
Slide 5: II. Segment Evaluation and Strategies
II. Segment Evaluation and Strategies Maintenance : Increase assets by enhancing sales activities Leasing Corporate Financial Services : Provide P id ffurther th services i and d added-value dd d l Retail : Focus on first sector insurance and card loans ROA by Segment (After Tax) 5.0% 4.0% Maintenan
Slide 6: II. Segment Evaluation and Strategies
II. Segment Evaluation and Strategies Investment and : Increase energy and environment related assets Operation Overseas : Embrace E b opportunistic t i ti growth th Business Real Estate : Turnover the portfolio, increase base profit ROA by Segment (After Tax) 5.0% Investment & Operation 4.0% Overse
Slide 7: II. Segment Evaluation and Strategies
II. Segment Evaluation and Strategies Large amount of capital (approx. 1/3) is deployed to Real Estate but asset reductions have decreased this ratio Sufficient capital reserve for new investments Breakdown of Deployed Capital Corporate Financial Services/ Maintenance Leasing/ Retail 27% Real Es
Slide 8: III. Future Direction
III. Future Direction Evolve businesses with expertise, and continue to take on new o e cchallenges a e ges in a areas eas with g growth o po potential e a Aircraft Operation Energy & Environment Renewable Energy Power Demands in Asia Investment Opportunities presented by the European Debt Cri
Slide 9: IV. Segment Performance
IV. Segment Performance Significant profit increase in Retail, robust performance by Corporate Financial Services and Investment and Operation （JPY Bn） Trend in Segment Profit 100.0 Real Estate 80.0 Corporate Financial Services 60.0 Investment & Operation 40.0 Maintenance Leasing Overseas Business
Slide 10: IV. Segment Performance
IV. Segment Performance Increase in Retail and Maintenance Leasing segments Continued reduction in Real Estate Trend in Segment Assets （JPY Bn） 7,000.0 2.5% 6,000.0 2.0% Investment & Operation 5,000.0 Maintenance Leasing 1.5% 4,000.0 Corporate Financial Services 3,000.0 Overseas Business 1.0% Re
Slide 11: Segment Performance: Corporate Financial Services
II. Segment Performance 1. Corporate Financial Services 12.3 13.3 （JPY Bn） 11.3 12.3 Change First Half First Half Base Profit 22.6 24.5 11.9 11.9 100% Capital Gains 0.4 0.3 0.3 0.2 - Provisions -12.7 -2.3 -3.5 -0.3 - Impairments -0.3 03 -1.1 11 00 0.0 -0.1 01 - Segment Profit 10.0 21.5 8.6 11.8 137%
Slide 12: Segment Performance: Maintenance Leasing
II. Segment Performance 2. Maintenance Leasing 12.3 13.3 （JPY Bn） 11.3 12.3 Change First Half First Half Base Profit 28.4 34.7 18.2 18.1 100% Capital Gains 0.1 0.1 0.0 0.0 - Provisions -2.0 0.0 0.1 -0.3 - Impairments -0.4 04 00 0.0 00 0.0 -0.1 01 - Segment Profit 26.2 34.7 18.3 17.8 97% Segment Asse
Slide 13: Segment Performance: Real Estate
II. Segment Performance 3. Real Estate 12.3 13.3 （JPY Bn） 11.3 12.3 Change First Half First Half Base Profit 11.6 18.3 9.5 12.3 129% Capital Gains 22.5 14.2 3.4 7.3 - Provisions -1.1 -3.0 -2.8 0.6 - Impairments -32.9 32 9 -28.2 28 2 -6.6 66 -17.3 17 3 - Segment Profit 0.1 1.3 3.5 3.0 86% Segment Ass
Slide 14: Segment Performance: Investment and Operation
II. Segment Performance 4. Investment and Operation 12.3 13.3 （JPY Bn） 11.3 12.3 Change First Half First Half Base Profit 18.1 22.4 11.5 17.9 156% Capital Gains 10.9 5.3 5.8 4.8 - Provisions -6.8 -7.5 -1.0 -1.6 - Impairments -9.0 90 -4.2 42 -1.4 14 -4.7 47 - Segment Profit 13.2 16.0 14.9 16.4 110% S
Slide 15: Segment Performance: Retail
II. Segment Performance 5. Retail 12.3 13.3 （JPY Bn） 11.3 12.3 Change First Half First Half Base Profit 25.4 32.8 18.0 20.8 115% Capital Gains 0.0 0.3 0.3 3.4 - Provisions -1.4 -1.1 0.2 -0.5 - Impairments -2.2 22 -12.7 12 7 -12.7 12 7 00 0.0 - Segment Profit 21.8 19.4 5.9 23.6 404% Segment Assets 1
Slide 16: Segment Performance: Overseas Business
II. Segment Performance 6. Overseas Business 12.3 13.3 （JPY Bn） 11.3 12.3 Change First Half First Half Base Profit 42.1 40.4 20.0 15.1 76% Capital Gains 13.9 21.2 11.9 8.3 - Provisions -3.2 -3.8 -1.3 -0.5 - Impairments -7.1 71 -8.0 80 -1.4 14 -0.2 02 - Segment Profit 45.6 49.8 29.1 22.7 78% Segment
Slide 17: V. Summary
V. Summary A hi Achieved d 59 59.8bn 8b iin nett iincome, 60% off th the ffullll year ttargett Maintained stable profitability (2.0% Segment Asset ROA) Aim for new investment opportunities and increased assets in areas with high g ggrowth Copyright © 2012 ORIX Corporation All rights reserved. 16
Slide 18: Appendix
Appendix pp Copyright © 2012 ORIX Corporation All rights reserved. 17
Slide 19: Appendix(1) Trend in Performance
Appendix(1) Trend in Performance （JPY Bn） 12.3 12 3 13 3 13.3 11.3 12.3 First Half First Half Total Revenue 945.6 971.5 474.1 510.9 Net Income *1 66.0 83.5 44.7 59.8 Segment Assets 6,142.8 6,002.1 5,946.7 6,083.6 Total Assets 8,561.9 8,332.8 8,234.5 8,186.5 Sh h ld ' E Shareholders' Equity it 1 306
Slide 20: Appendix(2) Profit by Segment
Appendix(2) Profit by Segment （JPY Bn） 12.3 12 3 13.3 13 3 11.3 12.3 Change First Half First Half Corporate Financial Services 10.0 21.5 8.6 11.8 137% Maintenance Leasing 26 2 26.2 34 7 34.7 18 3 18.3 17 8 17.8 97% Real Estate 0.1 1.3 3.5 3.0 86% Investment and Operation 13.2 16.0 14.9 16.4 110% Ret
Slide 21: Appendix(3) Assets by Segment and Region
Appendix(3) Assets by Segment and Region （JPY Bn） 11.3 12.3 13.3 2Q Corporate Financial Services 968.3 898.8 897.8 Maintenance Leasing 502.7 537.8 569.2 Real Estate 1,539.8 1,369.2 1,269.5 Investment and Operation 506.0 471.1 428.5 Retail 1,653.7 1,738.5 1,944.7 Overseas Business 972.2 986.8 973.9 T
Slide 22: Appendix(4) Funding
Appendix(4) Funding （JPY Bn） 11 3 11.3 12 3 12.3 13 3 2Q 13.3 CP 180.8 180.4 168.8 Borrowings from Financial Institutions 2,360.9 2,277.3 2,245.9 Bonds / MTN 1,450.0 1,393.0 1,359.7 Deposits 1,065.2 1,103.5 1,128.1 Subtotal 5,056.9 4,954.3 4,902.5 ABS, CMBS 1,018.2 874.7 732.0 Short-term Debt, Long-
Slide 23: Appendix(5) Liquidity
Appendix(5) Liquidity （JPY Bn） 11 3 11.3 12 3 12.3 13 3 2Q 13.3 Available Commitment Line (1) 410.4 427.4 417.8 Cash and Cash Equivalents (2) 732.1 786.9 719.0 Liquidity (1+2) 1,142.6 1,214.3 1,136.8 Marketable Short-term Debt (3) *1 559.3 420.7 399.1 Liquidity Coverage Ratio (1+2)/(3) 204% 289% 285
Slide 24: Appendix(6) Real Estate Portfolio
Appendix(6) Real Estate Portfolio Trend in Real Estate Segment Assets by Type （JPY Bn） Property Type 11.3 12.3 13.3 2Q Rental Property p y 905.9 876.3 846.0 Under Lease 680.2 705.9 678.1 Under Development 225.6 170.4 168.0 Condo Assets 128.1 87.3 74.8 NRL / Specified Bonds 301.8 205.4 ※ 149.6 ※58.
Slide 25: Appendix(7) Real Estate Portfolio
Appendix(7) Real Estate Portfolio Rental Property Assets by Type (12.9) （JPY Bn） Under Lease Under Property p y Type yp Total B l Balance NOI Yield Yi ld Development D l t Office Buildings 235.8 4.5% 68.6 304.4 Logistics Centers 19.7 5.6% 17.4 37.1 Commercial Facilities 174.9 6.2% 35.4 210.3 Renta
Slide 26: Appendix(8) Asset Quality
Appendix(8) Asset Quality Asset Quality (Adjusted **) （JPY Bn） 11.3 12.3 13.3 2Q Investment in Direct Financing Leases 660.0 728.0 751.5 90+ Da Days s Past Past-Due D e Direct Financing Leases 22 8 22.8 17 4 17.4 15 7 15.7 Installment Loans 2,142.0 2,073.2 2,221.8 90+ Days Past-Due Loans 10.0 8.6
Slide 27: Appendix(9) Reconciliation Table of Non-GAAP Financial Statement
Appendix(9) Reconciliation Table of Non-GAAP Financial Statement These materials include certain financial measures presented on a basis not in accordance with U.S. GAAP, or non-GAAP measures, including total assets and long-term liabilities excluding liabilities in line with securitized transaction
Slide 28: Appendix(10) Reconciliation Table of Non-GAAP Financial Statement
Appendix(10) Reconciliation Table of Non-GAAP Financial Statement （JPY B ） Bn） Key Ratio 11.3 12.3 13.3 2Q Total Assets （a） 8,561.9 8,332.8 8,186.5 Deduct: Payables under Securitized Leases, Loan Receivables and Investment in Securities 1 018 2 1,018.2 874 7 874.7 732 0 732.0 Adjusted Total Assets （
Slide 29: Appendix(11) Reconciliation Table of Non-GAAP Financial Statement
Appendix(11) Reconciliation Table of Non-GAAP Financial Statement （JPY Bn） Consolidated Corporate Maintenance Investment and Overseas Financial Segment Profit Details Financial Real Estate Retail Segment Total Total Leasing Operations Business Statement Services Adjustment Base Profit *1 22.6 28.4 1
Slide 30: Reference Data
Reference Data Copyright © 2012 ORIX Corporation All rights reserved. 29
Slide 31: Stock Market
Stock Market Performance of Major Stock Markets since September 2008 (Sep 30, 2008 =100) 200 150 100 50 Nikkei (Japan) Dow Jones (US) Hang Seng (HK) CSI 300 (China) SENSEX ((India)) 0 08.09 09.03 09.09 10.03 10.09 11.03 11.09 12.03 12.09 Source: Bloomberg Copyright © 2012 ORIX Corporation All rights
Slide 32: Interest Rate Trend
Interest Rate Trend Interest Rate Trend of Major Currencies since September 2008 (%) 6.0 1 year Inter-Bank Deposit Rate in Japan 50 5.0 1 year Inter-Bank Deposit Rate in U.S. 1 year RMB Deposit Rate by Bank of China 4.0 3.0 20 2.0 1.0 0.0 08.09 09.09 10.09 11.09 12.09 Source: Sou ce Bloomberg oo be
Slide 33: Macro Economic Indicators
Macro Economic Indicators Real GDP Growth National CPI (Ex Fresh Food) (QoQ Change) (YoY Change) (% Change) (% Change) 15.0 10.0 8.0 10.0 6.0 5.0 40 4.0 0.0 2.0 0.0 -5.0 -2.0 -10.0 -4.0 08.09 09.09 10.09 11.09 12.09 08.09 09.09 10.09 11.09 12.09 Japan U S U. S. China Japan U S U. S. China Source: Bl
Slide 34: Japanese Corporate Indices
Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate (Quarter) Diffusion Index (JPY Tn) (Cases) 8.0 4,500 , 30 6.0 4,000 20 10 4.0 3,500 0 2.0 3,000 -10 -20 0.0 2,500 08.09 09.03 09.09 10.03 10.09 11.03 11.09 12.03 12.09 08.09 09.03 09.09 10.03 10.09 11.03 11.09 12.03 12.09 Liabilities
Slide 35: Japanese Real Estate Indicators
Japanese Real Estate Indicators Japan p TSE REIT Index Office Rental Rates (Yen per 3.3㎡) 2,000 16,000 14 000 14,000 1,500 12,000 10,000 1,000 8 000 8,000 6,000 500 4,000 2 000 2,000 0 0 08.09 09.03 09.09 10.03 10.09 11.03 11.09 12.03 12.09 02.09 03.09 04.09 05.09 06.09 07.09 08.09 09.09 10.09 11.09
Slide 36: Domestic Lease Business Indicators
Domestic Lease Business Indicators Private Equipment Investment New Car Sales ( JPY Bn) (,000 Units) 90,000 12.0% 7,000 14.0% 80 000 80,000 10.0% 6,000 12.0% 70,000 5,000 10.0% 60,000 8.0% 50,000 4,000 8.0% 6.0% 40 000 40,000 3,000 6.0% 30,000 4.0% 2,000 4.0% 20,000 2.0% 10,000 1,000 2.0% 0 0 0% 0.0
Slide 37: Other Domestic Indicators
Other Domestic Indicators Retail Life Insurance Consumer Finance Loans ( JPY Bn) ( JPY Bn) 14,000 25,000 12,000 20,000 10,000 15,000 8,000 6,000 10,000 4,000 5,000 2,000 , 0 0 2000 2002 2004 2006 2008 2010 2000 2002 2004 2006 2008 2010 2012 Consumer Finance Loan(100 mil Yen) Retail Life Insurance Pr
Slide 38: Additional Information
Additional Information For annual and more historical data please access our website. A list of major disclosure materials is given below. ORIX Website: URL: http://www http://www.orix.co.jp/grp/en/ orix co jp/grp/en/ IR Website: URL: http://www.orix.co.jp/grp/en/ir/ Financial Reports: URL: http://w