Orix Corporation · TSE:8591

Orix — Q3 FY2016.3 Earnings Presentation

42 slides from Orix's earnings presentation, Jan 27, 2016

  1. Slide 1: Third Quarter Consolidated Financial Results

    ORIX Corporation (TSE: 8591; NYSE: IX) Third Quarter Consolidated Financial Results For the Nine-Month Period Ended December 31, 2015 January 27, 2016 Kazuo Kojima Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of Treasury Headquarters Takao Kato Corporate Senior Vice

  2. Slide 2: Overview (1)

    Overview（1）  215.4 bn yen in net income, up 16% YoY  Annualized ROE improved to 13.0% Net Income* and ROE (JPY Bn) 13.0% 250 12.3% 200 9.0% 150 100 118.2 185.4 215.4 50 0 14.3 Q3 15.3 Q3 16.3 Q3 Net Income ROE (annualized) *Net Income refers to Net Income Attributable to ORIX Corporation Sharehold

  3. Slide 3: Overview (2)

    Overview（2）  Segment profits up 17% YoY  Profits increase achieved in all segments except Retail segment  Significant profits growth contribution from Overseas Business, Investment and Operation, Real Estate, and Corporate Financial Services segments Segment Profits (JPY Bn) 350 300 Overseas Busi

  4. Slide 4: Overview (3)

    Overview（3）  Segment assets decreased 2% YTD  Assets decreased in Retail segment the most. Asset growth achieved in Overseas Business and Maintenance Leasing segments Segment Assets and ROA (JPY Tn) 10 3.8% 3.2% 3.0% 3.3% 2.9% 8 2.8% Overseas Business 2.3% Retail 6 2.3% Investment and Operation 1.

  5. Slide 5: Overview (4)

    Overview（4）  Pretax profits: 56.4bn yen increase YoY (+20%)  Similar level of capital gains as the same period last FY. Existing operation and new business expansion also contributed to profit growth  Segment assets: 228.9bn yen decrease YTD (▲2%)  Growth in auto-business, environment & energy b

  6. Slide 6: Segment Performance (1) Corporate Financial Services

    Segment Performance（1） （Corporate Financial Services）  Segment profits at 33.8bn yen: 15.2bn yen increase YoY (+81%) 11.1bn yen increase YoY (+59%) excl. Yayoi  Segment assets at 1,058.7bn yen: 73.7bn yen decrease YTD (▲7%)  ROA improved due to higher services income and reduced asset balance  A

  7. Slide 7: Segment Performance (2) Maintenance Leasing

    Segment Performance（2） （Maintenance Leasing）  Segment profits at 33.7bn yen: 2.1bn yen increase YoY (+7%)  Segment assets at 717.8bn yen: 55bn yen increase YTD (+8%)  Steady profit contribution from both ORIX Auto and ORIX Rentec  Increase in services income in the auto-related business  ROA ma

  8. Slide 8: Segment Performance (3) Real Estate

    Segment Performance（3） （Real Estate）  Segment profits at 44.4bn yen: 21.9bn yen increase YoY (+97%)  Segment assets at 744.9bn yen: 90.5bn yen decrease YTD (▲11%)  Increase in gains on sales of RE assets, and less impairment  Significant profit growth in facility operation business  Assets furt

  9. Slide 9: Segment Performance (4) Investment and Operation

    Segment Performance（4） （Investment and Operation）  Segment profits at 46.7bn yen: 23.7bn yen increase YoY (+103%)  Segment assets at 628.9bn yen: 31.1bn yen decrease YTD (▲5%)  ROA improved to 6.4% due to capital gain contributions  Turnover in portfolio continued with both timely exits and new

  10. Slide 10: Segment Performance (5) Retail

    Segment Performance（5） （Retail）  Segment profits at 48.8 bn yen: 47.7bn yen decrease YoY (▲49%)  Segment assets at 3,511.5bn yen: 189.1bn yen decrease YTD (▲5%)  Excluding capital gains from sales of Monex and bargain purchase gains associated with HLIKK acquisition, segment profits increased YoY

  11. Slide 11: Segment Performance (6) Overseas Business

    Segment Performance（6） （Overseas Business）  Segment profits at 116.0bn yen: 31.2bn yen increase YoY (+37%)  Segment assets at 2,279.6bn yen: 100.7bn yen increase YTD (+5%) 141.3bn yen increase YTD excl. FX impact  Recognized capital gains and valuation gains from IPO of Houlihan Lokey (c.40bn yen

  12. Slide 12: Summary

    Summary Q3 YTD net income achieved at 215.4bn yen, up 16% YoY Solid progress along the mid-term strategic direction Continue to focus on expanding existing operation and new investments with caution under the current uncertain economic environment Copyright © 2016 ORIX Corporation All rights reserve

  13. Slide 13: Appendix

    Appendix Copyright © 2016 ORIX 12 Corporation All rights reserved. 12

  14. Slide 14: About ORIX Sustainable Growth

    About ORIX Sustainable Growth  Maintaining profitable for the past 50 years and achieving sustainable profit growth Net Income Attributable to ORIX Corporation Shareholders FY2015.3 Record Net Income JPY Bn FY2009.3 250 Collapse of Lehman Brothers 200 FY2002.3 Bursting of the IT Bubble FY1998.3 150

  15. Slide 15: About ORIX Business Expertise and Group-Wide Capability

    About ORIX Business Expertise and Group-Wide Capability ORIX evolved by advancing into neighboring areas while increasing its finance and asset expertise Credit Screening and Banking Asset Management Finance Capability Life Insurance Investment Lending Principal investment Business turnaround Co

  16. Slide 16: About ORIX Assets by Segment

    About ORIX Assets by Segment  Maximizing core competencies of each segment while creating group synergy Corporate Financial Services Lending, Leasing, fee businesses Overseas Business 12% 26% Leasing, Lending, Investment 8% Maintenance Leasing in bonds, Investment banking, Asset management, Segment

  17. Slide 17: About ORIX Extensive Overseas Network

    About ORIX Extensive Overseas Network  Expanded its global reach starting with Hong Kong in 1971, using knowhow developed in Japan 36 Countries and Regions worldwide (As of 2015.9.30) 1971 Hong Kong 1972 Singapore 1994 Oman 1973 Malaysia 1995 Poland Business Network 1975 Indonesia 1997 Egypt 1981 E

  18. Slide 18: Appendix(1) Performance Overview

    Appendix(1) Performance Overview （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Total Revenues 1,375.3 2,174.3 938.9 1,572.0 1,797.1 114% Net Income *1 187.4 234.9 118.2 185.4 215.4 116% Segment Assets 7,267.8 9,170.2 7,029.0 9,287.7 8,941.4 96% Total Assets 9,067.0 11,443.6 8,673.6 11,

  19. Slide 19: Appendix(2) Profits by Segment

    Appendix(2) Profits by Segment （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Corporate Financial Services 24.9 25.5 18.0 18.7 33.8 181% Maintenance Leasing 37.1 40.4 30.3 31.6 33.7 107% Real Estate 18.0 3.5 15.7 22.5 44.4 197% Investment and Operation 95.8 42.4 29.9 23.0 46.7 203% Reta

  20. Slide 20: Appendix(3) Assets by Segment

    Appendix(3) Assets by Segment （JPY Bn） Change 14.3 15.3 13.12 14.12 15.12 (YTD) Corporate Financial Services 992.1 1,132.5 954.6 1,083.2 1,058.7 93% Maintenance Leasing 622.0 662.9 596.2 675.8 717.8 108% Real Estate 962.4 835.4 1,008.0 877.6 744.9 89% Investment and Operation 552.2 660.0 444.6 611.5

  21. Slide 21: Appendix(4) Income Statement Data

    Appendix(4) Income Statement Data （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Finance revenues 191.7 186.9 146.8 139.3 152.6 110% Gains on investment securities and dividends 27.2 56.4 19.4 38.0 33.0 87% Operating leases 114.0 124.9 87.6 101.4 100.7 99% Life insurance premiums and re

  22. Slide 22: Appendix(5) Funding

    Appendix(5) Funding （JPY Bn） Change Funding 14.3 15.3 13.12 14.12 15.12 (YoY) CP 101.0 89.6 103.9 145.6 73.7 -72.0 Borrowings from Financial Institutions 2,631.4 2,882.6 2,508.7 2,727.5 2,885.4 157.8 Bonds / MTN 1,174.8 1,153.9 1,253.4 1,145.7 1,077.7 -68.0 Deposits 1,206.4 1,287.4 1,122.4 1,250.1 1

  23. Slide 23: Appendix(6) Corporate Financial Services

    Appendix(6) Corporate Financial Services （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Finance revenues 37.2 35.6 27.8 27.0 26.1 97% Operating leases 25.6 24.5 19.6 18.4 19.2 104% Services income 14.9 22.0 9.5 13.6 25.8 190% Gains on investment securities 1.1 3.4 0.8 2.1 10.4 505% and

  24. Slide 24: Appendix(7) Maintenance Leasing

    Appendix(7) Maintenance Leasing （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Finance revenues 9.5 11.1 7.0 8.0 8.9 112% Operating leases 177.1 185.7 133.0 140.4 142.0 101% Services income 60.3 62.5 45.5 47.0 50.8 108% Segment Revenues 251.3 263.5 188.8 198.2 204.7 103% Segment Expense

  25. Slide 25: Appendix(8) Real Estate (1)

    Appendix(8) Real Estate (1) （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Finance revenues 6.1 4.1 4.9 3.2 6.1 193% Operating leases 66.6 63.8 52.3 55.9 50.1 90% Gains on Rental Property Sales 13.8 14.9 10.2 18.1 16.4 91% Services income 101.8 104.1 79.1 81.6 86.7 106% Sales of goods a

  26. Slide 26: Appendix(9) Real Estate (2)

    Appendix(9) Real Estate (2) ■Breakdown of Real Estate Segment Assets （JPY Bn） Change 14.3 15.3 13.12 14.12 15.12 (YTD) Rental Property 665.8 566.9 689.1 598.8 508.5 90% Under Lease 536.9 471.5 567.7 494.7 422.9 90% Under Development 128.9 95.4 121.4 104.1 85.6 90% Condo Assets 31.1 16.5 38.0 22.7 7.

  27. Slide 27: Appendix(10) Investment and Operation

    Appendix(10) Investment and Operation （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Finance revenues 18.4 15.7 14.5 11.6 10.4 90% Gains on investment securities and dividends 9.7 9.3 8.3 6.9 10.1 147% Sales of goods and real estate 120.6 371.4 53.7 220.7 527.6 239% Services income 86.1

  28. Slide 28: Appendix(11) Retail

    Appendix(11) Retail （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Finance revenues 50.4 52.5 37.8 39.6 41.2 104% Life insurance premiums and 155.8 352.5 113.3 276.2 161.6 58% related investment income Services income and others 5.4 20.9 4.3 19.4 6.0 31% Segment Revenues 211.6 426.0 155

  29. Slide 29: Appendix(12) Overseas Business (1)

    Appendix(12) Overseas Business (1) （JPY Bn） Change FY14.3 FY15.3 14.3 Q3 15.3 Q3 16.3 Q3 (YoY) Finance revenues 57.3 63.3 43.7 46.5 55.9 120% Gain on investment securities and dividends 15.8 30.5 9.9 14.0 13.8 98% Operating leases 76.6 82.1 57.4 60.0 67.3 112% Services income 228.8 321.5 150.6 235.3

  30. Slide 30: Appendix(13) Overseas Business (2)

    Appendix(13) Overseas Business (2) ■Overseas Business segment assets breakdown （JPY Bn） Change By Region 14.3 15.3 13.12 14.12 15.12 (YTD) Americas 518.1 776.2 487.1 767.4 774.3 100% Asia / Australia 655.6 591.5 640.8 635.5 611.2 103% Greater China 196.6 249.2 199.5 250.7 264.1 106% Middle East / Eu

  31. Slide 31: Appendix(14) Reconciliation Table of Non-GAAP Financial Measurement

    Appendix(14) Reconciliation Table of Non-GAAP Financial Measurement 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 transact

  32. Slide 32: Appendix(15) Reconciliation Table of Non-GAAP Financial Measurement

    Appendix(15) Reconciliation Table of Non-GAAP Financial Measurement （JPY Bn） Key Ratio 14.3 15.3 13.12 14.12 15.12 Total Assets （a） 9,067.0 11,443.6 8,673.6 11,380.5 11,064.6 Deduct: Payables under Securitized Leases, Loan Receivables and 253.8 291.6 293.4 273.8 306.1 Investment in Securities Adjust

  33. Slide 33: Reference Data

    Reference Data Copyright © 2016 ORIX Corporation All rights reserved. 32

  34. Slide 34: Macro Economic Indicators

    Macro Economic Indicators National CPI (Ex Fresh Food) Trends in Machinery Orders (YoY Change) JPY Tn % Change 3.5 7.0 6.0 3.0 5.0 2.5 4.0 3.0 2.0 2.0 1.5 1.0 0.0 1.0 -1.0 0.5 -2.0 -3.0 0.0 11.12 12.12 13.12 14.12 15.12 11.9 12.9 13.9 14.9 15.9 Japan U.S China Private demand excl. volatile orders* M

  35. Slide 35: Japanese Corporate Indices

    Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate Diffusion Index (Quarterly Basis) (Quarterly Basis) JPY Tn Cases 30 3.0 4,000 20 3,000 2.0 10 2,000 1.0 1,000 0 0.0 0 -10 11.12 12.12 13.12 14.12 15.12 11.12 12.12 13.12 14.12 15.12 Large Medium Small Liabilities(Left) Bankruptcies(r

  36. Slide 36: Japanese Real Estate Indicators

    Japanese Real Estate Indicators Japan TSE REIT Index Office Rental Rates Yen per 3.3㎡ 2000 20,000 1500 16,000 1000 12,000 500 8,000 11.12 12.12 13.12 14.12 15.12 11.12 12.12 13.12 14.12 15.12 Tokyo Avg. Rent Osaka Avg. Rent Source: Tokyo Stock Exchange Source: Miki Shoji Copyright © 2016 ORIX Corpor

  37. Slide 37: Domestic Lease Business Indicators

    Domestic Lease Business Indicators Private Equipment Investment New Car Sales JPY Tn 1,000 Units 7,000 14.0% 100 12.0% 6,000 12.0% 10.0% 80 5,000 10.0% 8.0% 60 4,000 8.0% 6.0% 3,000 6.0% 40 4.0% 2,000 4.0% 20 2.0% 1,000 2.0% 0 0.0% 0 0.0% 03.3 05.3 07.3 09.3 11.3 13.3 15.3 04.12 06.12 08.12 10.12 12

  38. Slide 38: Other Domestic Indicators

    Other Domestic Indicators Number of condominium sold in the Domestic Shipping Amount of Solar Cell Tokyo metropolitan area MW No. of transactions 60,000 10,000 Others 50,000 8,000 Residential 40,000 6,000 30,000 4,000 20,000 2,000 10,000 0 0 09.3 10.3 11.3 12.3 13.3 14.3 15.3 15.4-12 10.3 11.3 12.3

  39. Slide 39: Other Domestic Indicators

    Other Domestic Indicators The number of M&A deals The number of the New Listed Companies OUT-IN 2,500 100 IN-OUT IN-IN 2,000 80 1,500 60 1,000 40 500 20 0 0 09.12 10.12 11.12 12.12 13.12 14.12 09.12 10.12 11.12 12.12 13.12 14.12 15.12 Source: RECOF Corporation Source: Tokyo Stock Exchange Copyright

  40. Slide 40: Other Domestic Indicators

    Other Domestic Indicators Premium Income for Individual Insurance Consumer Finance Loan Balance JPY Bn JPY Bn 25,000 15,000 20,000 12,000 15,000 9,000 10,000 6,000 5,000 3,000 0 0 05.3 07.3 09.3 11.3 13.3 15.3 05.3 07.3 09.3 11.3 13.3 15.3 Source: Japan Statistics Bureau Source: Japan Financial Serv

  41. Slide 41: 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,

  42. Slide 42: 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.orix.co.jp/grp/en/ IR Website: URL: http://www.orix.co.jp/grp/en/ir/ If you would like to be included on our e-mail list for major

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