Mizuho Leasing Company, Limited · TSE:8425

Mizuho Leasing — Investor Presentation (May 2024)

45 slides from Mizuho Leasing's investor presentation, May 14, 2024

1. Slide 1: Investor Presentation for FY2023

   Investor Presentation for FY2023 May 14, 2024 ©︎2024 Mizuho Leasing Company, Ltd.

2. Slide 2: Table of Contents

   Table of Contents 1. Financial Results and Business Performance Overview 2. Medium-Term Management Plan 2025 3. Capital and Business Alliance with Marubeni 4. Earnings Forecasts and Shareholder Return 5. Appendix 1

3. Slide 3: CEO Message

   CEO Message 2  We posted a record high net income of ¥35.2 bn in FY2023, far exceeding the initial plan (+¥4.2 bn (+14%) vs. plan). This was due to growth in underlying profit, driven by the continued accumulation of operating assets, performance contribution of Rent Alpha Pvt. Ltd., and one-time g

4. Slide 4: 1. Financial Results and Business Performance Overview

   1. Financial Results and Business Performance Overview

5. Slide 5: Summary for FY2023

   Summary for FY2023 4  Profits at each income level grew significantly YoY, thanks to growth in underlying profit driven by the continued steady accumulation of operating assets, as well as the performance contribution from Rent Alpha Pvt. Ltd., which was consolidated in June 2023. Additionally, one-

6. Slide 6: Changes in Operating Assets and Profits at Each Income Level

   Changes in Operating Assets and Profits at Each Income Level 5 (¥bn) Operating Assets Gross Profit before Funding Costs Gross Profit Ordinary Income 2,858.9 91.2 2,580.1 72.3 73.6 2,416.6 62.1 61.4 54.5 50.9 40.1 20.1 As of Mar.31 As of Mar.31 As of Mar.31 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 F

7. Slide 7: Factors behind Changes in Net Income Attributable to Owners of the Parent

   Factors behind Changes in Net Income Attributable to Owners of the Parent 6 Gross profit Operating Ordinary (¥bn) +12.3 income income +7.7 +10.8 35.2 (+6.8) 28.4 (A) (B) (C) (D) (E) * In addition to the performance contribution from Rent Alpha Pvt. Ltd. (+¥5.5 bn), the real estate sector performed w

8. Slide 8: Gross Profit before Funding Costs and Operating Assets by Business Area

   Gross Profit before Funding Costs and Operating Assets by Business Area 7  Domestic leasing businesses: Operating assets were flat. Profit increased partly as a result of one-time gains on the cancellation of contracts and continued efforts to focus on profitability. Newly executed contract volume

9. Slide 9: Equity in Earnings and Losses (Non-operating Income and Expenses)

   Equity in Earnings and Losses (Non−operating Income and Expenses) 8  Both domestic and overseas associated companies performed well overall. Domestic: Despite the impact of loss on valuation of investment securities at RICOH LEASING (-¥0.7 bn), the solid performance of NIPPON STEEL KOWA REAL ESTATE

10. Slide 10: Funding

    Funding 9  Interest-bearing debt increased in line with the accumulation of operating assets. Raised funds mainly through long-term borrowings and corporate bonds (issued four times over the full year, totaling ¥120 bn), including the use of sustainable finance  The funding cost ratio increased ow

11. Slide 11: Credit Ratings

    Credit Ratings 10  In FY2023, our rating was upgraded to AA- by both R&I and JCR rating agencies Credit Ratings Type of Credit Ratings R&I JCR Long-Term Issuer Rating AA− (Outlook: Stable) AA− (Outlook: Stable) Short-Term Commercial Paper a-1+ (Maximum: ¥650 bn) J-1+ (Maximum: ¥ 650 bn) Long-Term C

12. Slide 12: Share Split and Abolition of Shareholder Benefit Plan

    Share Split and Abolition of Shareholder Benefit Plan 11  Implemented the share split to create a more accessible environment for investment, in light of the “shift from savings to investment” trend with the launch of the new NISA, in addition to complying with the Tokyo Stock Exchange’s request to

13. Slide 13: 2. Medium-Term Management Plan 2025

    2. Medium-Term Management Plan 2025 i. Financial and Non-Financial Targets ii. Transform and Sophisticate Business Portfolio Management iii. Alliance and Inorganic Growth Strategies iv. Promote Sustainability Management v. Strengthen and Further Sophisticate Corporate Systems to Support Growth

14. Slide 14: i. Financial Targets

    i. Financial Targets 13  Promoted medium-term management plan measures in the “Core,” “Growth,” and “Frontier” areas, resulting in a steady accumulation of operating assets and profits  In FY2023, net income significantly exceeded the plan. Also achieved the medium-term management plan targets for

15. Slide 15: i. Non-Financial Targets

    i. Non-Financial Targets 14  To promote sustainability management, promoted measures to expand renewable energy power generation capacity and initiatives to achieve a circular economy, and we are also actively utilizing sustainable finance for funding  In strengthening organizational management sy

16. Slide 16: ii. Transform and Sophisticate Business Portfolio Management: Core

    ii. Transform and Sophisticate Business Portfolio Management Core 15  Accumulated high-quality operating assets, mainly real estate, to secure a solid foundation for earnings  In addition to the traditional sales style, promoted a problem-solving sales style Vendor Financing Underlying revenue sou

17. Slide 17: ii. Transform and Sophisticate Business Portfolio Management: Growth

    ii. Transform and Sophisticate Business Portfolio Management Growth 16  In addition to growth investments in the global business and environment and energy business, created multi-layered sourcing channels and strengthened business investment initiatives  In aircraft, performance was solid as pass

18. Slide 18: ii. Transform and Sophisticate Business Portfolio Management: Frontier

    ii. Transform and Sophisticate Business Portfolio Management Frontier 17  Invested management resources in areas that will flourish significantly over the long term, such as the circular economy and XaaS  Accelerated efforts to promote the spread of EVs as part of efforts to achieve carbon neutral

19. Slide 19: iii. Alliance and Inorganic Growth Strategies (Alliance)

    iii. Alliance and Inorganic Growth Strategies (Alliance) 18  Entered into a capital and business alliance agreement with Marubeni Corporation (“Marubeni”) in May 2024. Intend to issue new shares through third-party allotment, with Marubeni as the allottee, in June 2024 − After capital increase by t

20. Slide 20: iii. Alliance and Inorganic Growth Strategies (Inorganic)

    iii. Alliance and Inorganic Growth Strategies (Inorganic) 19  During Medium-Term Management Plan 2025, inorganic investment of ¥150 bn is envisioned to expand existing and create new businesses  In FY2023, executed initiatives in aircraft and global sectors, namely underwriting Aircastle Limited's

21. Slide 21: iv. Promote Sustainability Management—Renewable Power Generation Capacity

    iv. Promote Sustainability Management—Renewable Power Generation Capacity 20  Increased power generation by 235 MW as part of efforts to achieve our target of 1 GW from renewable energy, achieving 590 MW in the first year of the medium-term management plan  Participating in grid storage battery pr

22. Slide 22: iv. Promote Sustainability Management—Realization of a Circular Economy

    iv. Promote Sustainability Management—Realization of a Circular Economy 21  Mizuho-Toshiba Leasing Company, Limited collaborated with REVER Corporation to support the introduction of state-of-the-art recycling facilities. Selected for subsidy by the Ministry of the Environment as a “CO2-saving adva

23. Slide 23: iv. Promote Sustainability Management—Utilizing Sustainable Finance

    iv. Promote Sustainability Management—Utilizing Sustainable Finance 22  Executed Sustainability-Linked Bonds and Green Loans utilizing the Sustainable Finance Framework established in October 2023  Utilized Positive Impact Finance as a new method of raising funds in March 2024, promoting sustainab

24. Slide 24: v. Strengthen and Further Sophisticate Corporate Systems to Support Growth

    v. Strengthen and Further Sophisticate Corporate Systems to Support Growth 23  Steadily progressed in strengthening and enhancing organizational management systems to support our growth and business domain expansion  Significantly improved in operational productivity through radical revisions of e

25. Slide 25: v. Corporate Systems to Support Growth–Headquarters Relocation

    v. Strengthen and Further Sophisticate Corporate Systems to Support Growth–Headquarters Relocation 24  Plan to relocate headquarters in spring 2026 to create a stronger organizational management systems that supports our business domain expansion (“TORANOMON ALCEA TOWER” / Toranomon 2-chome Zone Ty

26. Slide 26: 3. Capital and Business Alliance with Marubeni

    3. Capital and Business Alliance with Marubeni

27. Slide 27: Status of Collaboration with Marubeni / Goals of the Alliance Agreement

    Status of Collaboration with Marubeni / Goals of the Alliance Agreement 26  Concluded a capital and business alliance agreement with Marubeni in May 2024 to further strengthen the strategic synergies already achieved since the business alliance in February 2019  Expand business domains and accumul

28. Slide 28: Financial Impact

    Financial Impact 27  Raise ¥41.7 bn through third-party allocation of shares, with Marubeni and Mizuho FG as the allottees  With the accumulation of approximately 1.5 years' worth of profits, capital will be enhanced, but number of shares will increase, causing capital efficiency to temporarily de

29. Slide 29: Establishment of Company-Wide Business Collaboration System

    Establishment of Company-Wide Business Collaboration System 28  Engage in active personnel exchange and establish company-wide business collaboration system to further enhance the corporate value of both companies  Establish the Marubeni Collaboration Division within our company in order to maximi

30. Slide 30: 4. Earnings Forecasts and Shareholder Returns

    4. Earnings Forecasts and Shareholder Returns

31. Slide 31: Earnings Forecasts for FY2024

    Earnings Forecasts for FY2024 30  In FY2024, will increase underlying profit by accumulating operating assets, particularly in core and growth areas, despite persisting uncertainties such as interest rate movement. Combined with promoting new initiatives in the Frontier area, alliances and inorgani

32. Slide 32: Shareholder Returns

    Shareholder Returns 31  Our policy is to pay dividends in line with business performance while making efforts to improve profitability  In FY2023, increased the dividend by +¥20 due to strong performance and by +¥6 upon the announcement of the abolition of the shareholder benefit plan on November

33. Slide 33: 5. Appendix

    5. Appendix

34. Slide 34: Multi-Layered Business Portfolio

    Overview of Medium-Term Management Plan 2025 33 (Excerpts from the Medium-Term Management Plan released on May 12, 2023) The current plan will be a three-year challenge of changing towards growth and Keywords Challenge Change Grow leaping further into the future Transform and Sophisticate Business P

35. Slide 35: Positioning of Medium-Term Management Plan 2025

    Positioning of Medium-Term Management Plan 2025 34 (Excerpts from the Medium-Term Management Plan released on May 12, 2023)  We position this Plan as a period of aggressive investment of managerial resources into both business and management infrastructure, in order to make great strides towards th

36. Slide 36: Main News & Topics in FY2023 (1/3)

    Main News & Topics in FY2023 (1/3) 35 Date Contents Apr. 28, Concluded one of the Largest Virtual PPAs in Japan with Kao Corporation Environment and energy 2023 —Switched power used at Kao’s Sumida Office to additional renewable energy sources June 13, Concluded a Business Agreement with Social Inte

37. Slide 37: Main News & Topics in FY2023 (2/3)

    Main News & Topics in FY2023 (2/3) 36 Date Contents Oct. 13, Participated in the "30by30 Alliance for Biodiversity" Sustainability 2023 —Joined a voluntary coalition dedicated to conserving at least 30% of land and sea as healthy ecosystems Provided Equity Support to Rent Alpha Pvt. Ltd. Oct. 30, 20

38. Slide 38: Main News & Topics in FY2023 (3/3)

    Main News & Topics in FY2023 (3/3) 37 Date Contents Executed “Mizuho Green Real Estate Non-Recourse Loan” for TPG Angelo Gordon's real estate project Feb. 29, Sustainability —Using an assessment framework formulated by Mizuho Bank, financed funds for the acquisition of a logistics facility by 2024 T

39. Slide 39: Consolidated B/S (Assets)

    Consolidated B/S (Assets) 38 YoY YoY % （¥bn） End−Mar. End−Mar. End−Mar. End−Mar. End−Mar. Change Change 2020 2021 2022 2023 (1) 2024 (2) (3) = (2)−(1) (3) / (1) Current assets 1,947.3 2,085.1 2,166.7 2,279.7 2,378.1 ＋98.4 ＋4% Cash and deposits 22.8 21.1 25.3 34.0 56.7 ＋22.7 ＋67% Investment in lease

40. Slide 40: Consolidated B/S (Liabilities and Equity)

    Consolidated B/S (Liabilities and Equity) 39 YoY YoY % （¥bn） End−Mar. End−Mar. End−Mar. End−Mar. End−Mar. Change Change 2020 2021 2022 2023 (1) 2024 (2) (3) = (2)−(1) (3) / (1) Current liabilities 1,314.1 1,492.9 1,548.4 1,573.5 1,715.2 ＋141.7 ＋9% Short−term borrowings 256.7 317.8 380.3 418.4 524.1

41. Slide 41: Consolidated P/L

    Consolidated P/L 40 YoY YoY % （¥bn） FY2022 FY2023 FY2019 FY2020 FY2021 Change Change (1) (2) (3) = (2)−(1) (3) / (1) Revenues 539.2 497.9 554.8 529.7 656.1 ＋126.4 ＋24% Gross profit before funding costs 60.3 59.3 62.1 72.3 91.2 ＋18.9 ＋26% Funding costs 9.7 8.0 7.6 10.9 17.6 ＋6.7 ＋61% Gross profit 50.

42. Slide 42: Consolidated Statements of Comprehensive Income

    Consolidated Statements of Comprehensive Income 41 YoY YoY % （¥bn） FY2022 FY2023 FY2019 FY2020 FY2021 Change Change (1) (2) (3) = (2)−(1) (3) / (1) Net income 18.1 22.5 15.5 29.4 37.1 ＋7.7 ＋26% Unrealized gain on 0.7 –1.0 0.9 4.8 7.1 ＋2.3 ＋47% available−for−sale securities Deferred gain/loss on deri

43. Slide 43: Gross Profit before Funding Costs by Business Area

    Gross Profit before Funding Costs by Business Area 42 YoY YoY % （¥bn） FY2022 FY2023 FY2019 FY2020 FY2021 Change Change (1) (2) (3) = (2)−(1) (3) / (1) Revenues 539.2 497.9 554.8 529.7 656.1 ＋126.4 ＋24% Leasing and installment sales 512.1 482.9 537.8 505.2 621.0 ＋115.8 ＋23% Finance 19.6 15.4 17.4 25.

44. Slide 44: Newly Executed Contract Volume by Business Area

    Newly Executed Contract Volume by Business Area 43 Leasing and Installment Sales Segment YoY YoY % （¥bn） FY2022 FY2023 FY2021 Change Change (1) (2) (3) = (2)−(1) (3) / (1) Information and communications 158.9 115.4 88.4 –27.0 –23% Real estate 151.7 157.4 332.9 ＋175.5 ＋111% Industry and factory 75.5

45. Slide 45: Contact

    Contact Mizuho Leasing Company, Limited Corporate Communications Department Tel: +81-3-5253-6540 This document contains forecasts and other forward−looking statements that are based on information available at the time of preparation of this document and subject to certain risks and uncertainties, a

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