Fuyo General Lease Co., Ltd. · TSE:8424
Fuyo General Lease — FY2018 Earnings Presentation
39 slides from Fuyo General Lease's earnings presentation, May 20, 2019
Slide 1: Financial Results briefing for FY2018 IR Presentation
Financial Results briefing for FY2018 IR Presentation May 20, 2019 FUYO GENERAL LEASE CO., LTD. 1
Slide 2: Agenda
Agenda 1. Overview of consolidated operating results 2. Overview of business activities 3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan 4. Operating results forecast and dividend policy 5. Appendix Earnings forecasts and other forward-looking statements provided in these materia
Slide 3: (1) FY2018 results
1. Overview of consolidated operating results (1) FY2018 results • Consecutive years of record highs for sales and profit on the build-up of assets in strategic areas, mainly real estate and aircraft, as well as contributions from the consolidation of INVOICE. • Operating assets grew favorably and R
Slide 4: (2) Total revenues (3) Ordinary profit and profit attributable to owners of parent
1. Overview of consolidated operating results (2) Total revenues (3) Ordinary profit and profit attributable to owners of parent Revenues increased mainly on the effect of the The build-up of operating assets in strategic areas and consolidation of INVOICE the benefits of the INVOICE consolidation r
Slide 5: (4) Factors causing the increase in ordinary profit
1. Overview of consolidated operating results (4) Factors causing the increase in ordinary profit • In addition to favorable performance in strategic areas centered on real estate and aircraft, the effect of the consolidation of INVOICE (for half of fiscal year) also contributed. • No major changes
Slide 6: (5) Profit before interest expenses
1. Overview of consolidated operating results (5) Profit before interest expenses • "Leases" increased despite cancellations and reduction in gains on sales. Also maintained gross margin on assets. • "Other" performance mainly due to the consolidation of INVOICE and growth in non-asset businesses (¥
Slide 7: (6) Changes in funding
1. Overview of consolidated operating results (6) Changes in funding • Currency procurement increased due to growth of aircraft business • Increases in interest expenses and funding costs due to external funding was within plan range (¥100 million) (¥100 million) Funding balance, Interest expenses,
Slide 8: (7) Changes in costs (8) Net assets and shareholders' equity ratio
1. Overview of consolidated operating results (8) Changes in net assets and the (7) Changes in costs shareholders' equity ratio • Personnel/equipment expenses mainly due to Shareholders' equity ratio maintained in 10% range INVOICE consolidation amid growth in operating assets • Interest expenses in
Slide 9: (1) Newly executed contracts volume
2. Overview of business activities (1) Newly executed contracts volume • Contracts executed in strategic areas such as real estate and aircraft increased, overall outperforming the previous fiscal year • Accretive factoring of medical fees receivable increased steadily Accretive Contributions from g
Slide 10: (2) Operating assets and ROA
2. Overview of business activities (2) Operating assets and ROA • Balances increased favorably on increased "Operating leases," particularly for real estate and aircraft, and increases for "Others" due to the launch of a new mega solar business. • Growth due to build-up of assets in strategic areas
Slide 11: Medium-Term Management Plan Frontier Expansion 2021
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Medium-Term Management Plan Frontier Expansion 2021 "Go Where No One Has Gone Before" Aiming to be a corporate group that moves into uncharted areas of business and continues to push back frontiers 11
Slide 12: (1) Goals (target performance indicators) and three core strategies
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan (1) Goals (target performance indicators) and three core strategies Target performance indicators Target value Interim goal Indicator FY2018 results FY2021 FY2019 ¥2,300.0- Operating assets ¥2,500.0 billion ¥2,400.0 billion ¥2,262.
Slide 13: (2) Schematic representation of strategies
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan (2) Schematic representation of strategies Interim goal Target value Operating ※ FY2019 forecast figures assets ¥2,300.0- (initial target: ¥2,172.6 billion ¥2,262.8 billion ¥2,500.0 billion (¥2,047.4 billion) ¥2,400.0 billion ¥38.0
Slide 14: (3) Position of each business
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan (3) Position of each business Disruptive Innovations Sustaining Innovations Transformation Zone Performance Zone Revenue Performance (Grow new businesses) Payout period: (Achieve results in existing businesses) 2-3 years Strategic
Slide 15: (4) Progress: Operating assets
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan (4) Progress of the Medium-Term Management Plan: Operating assets • Since launching the Medium-Term Management Plan, profitable strategic areas such as Rear Estate and Aircraft operating assets increased steadily Ratio relative to
Slide 16: (4) Progress: Operating assets and ROA
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan (4) Progress of the Medium-Term Management Plan: Operating assets and ROA • Build-up of quality operating assets and an inorganic strategy focused on new domains have resulted in favorable progress towards final goals for operating
Slide 17: (4) Progress: Transitions in contract spread
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan (4) Progress of the Medium-Term Management Plan: Transitions in contract spread (*1) (Ref) • General leases (*2) spread trending towards improvement thanks to contract selection (*2) "General leases" refer to non-real-estate leases
Slide 18: (5) Real estate
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic (5) Real estate Areas Achieved interim goal for operating assets 1 year ahead of schedule (¥100 million) (％) Target of 4.0 Operating assets and ROA Plan (Real estate leases) 4,800 3.5 4,219 3,800 3.0 3,620 Interim goal 2.
Slide 19: (5) Real estate breakdown by building application
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic (5) Real estate Areas Continuing to diversify long-term real estate leases based on building application Breakdown of real estate leases by building application Based on operating assets • Ratio estimate calculated based
Slide 20: (6) Aircraft
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic (6) Aircraft Areas Increase in airline customers resulted in favorable growth in number of self-owned aircraft, balances Target of (％) (¥100 million) plan 4.0 Aircraft leasing operating assets and ROA 2,800 3.5 Interim go
Slide 21: (7) Overseas
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic (7) Overseas Areas Inorganic growth strategy in North America growing Operating asset balance (approximate value) according to the (Overseas = Business of overseas subsidiaries, excluding aircraft leasing) Company's share
Slide 22: (8) Energy/environment
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic (8) Energy/environment Areas Solar Power Generation Business operations steady (¥100 million) (％) Operating assets and ROA of the solar power generation Target of 20.0 business within Energy/environment plan Interim ROA o
Slide 23: (8) Energy/environment: plant factory
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic (8) Energy/environment Areas Topics: Participate in large-scale plant factory ✔ Established merger company with TEPCO Energy Partners and Farmship to operate plant factory ✔ Japan's largest production capacity as a single
Slide 24: (9) Medical/social welfare
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic (9) Medical/social welfare Areas Use Group partnerships to conduct sales through various channels Main services offered Factoring of medical fees receivable remain favorable. Factoring of medical Operating assets increase
Slide 25: (9) Medical/social welfare platform concept
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic Group (9) Medical/social welfare Areas Respond to diverse needs using platform concept 25
Slide 26: (10) BPO services (New domains)
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic (10) BPO services (New domains) Areas Frontiers Group Launch BPO domain, aim for revenue growth Launched BPO domain in April 2019 as core segment for new domains Invoice processing Accounts receivable Accounts payable Gen
Slide 27: (10) BPO services (New domains)
3. Progress on "Frontier Expansion 2021" Medium-Term Management Plan Strategic Group (10) BPO services (New domains) Areas Frontiers Providing needs-based services based on Group partnerships ■Service provision image Major service lineup INVOICE Accretive • BPO needs assessment • Develop proposal se
Slide 28: (1) FY2019 consolidated operating results forecast
4. Operating results forecast and dividend policy (1) FY2019 consolidated operating results forecast (¥100 million) FY2018 FY2019 results forecast Total revenues 6,181 7,000 Operating profit 357 395 Ordinary profit 392 420 Profit attributable to owners of parent 257 260 Basic earnings per share ¥850
Slide 29: (2) Dividend policy
4. Operating results forecast and dividend policy (2) Dividend policy [FY2018] Year beginning forecast (¥156) + dividend increase of ¥32 (including commemorative dividend of ¥14) for a total dividend of ¥188. Dividend payout ratio is 22.1% [FY2019] Forecasting previous FY dividend + ¥12 for a total
Slide 30: (1) Key topics
5. Appendix (1) Key topics Real estate "Hydrogen hotel" opened (Tokyu Hotels) Q1 Real estate Building lease for "accommodations-oriented hotel" in Nijo area of Kyoto (Mitsubishi Estate Group) Energy/ New Concluded capital partnership agreement with Exergy Power Systems (next-generation energy enviro
Slide 31: (1) Key topics
5. Appendix (1) Key topics Energy/ environment Issued green bond (Issue period: five years; Amount: ¥10.0 billion) Energy/ Started construction of solar power plant in Namie, Fukushima Prefecture; one of the largest in the environment Tohoku region Q3 Energy/ environment Launched solar power plant o
Slide 32: (2) Summary of consolidated operating results
5. Appendix (2) Summary of consolidated operating results (¥100 million) YoY change FY2014 FY2015 FY2016 FY2017 FY2018 (FY2017 to FY2018) Total revenues 4,723 4,938 5,072 5,903 6,181 +278 Total costs 4,237 4,426 4,519 5,298 5,514 +216 (Interest expenses) 66 69 71 73 86 (+13) Gross profit 486 512 553
Slide 33: (3) Segment results (consolidated)
5. Appendix (3) Segment results (consolidated) (¥100 million) Leases Installment sales Lease and Installment sales total YoY YoY YoY YoY YoY YoY FY2017 FY2018 Change Change FY2017 FY2018 Change Change FY2017 FY2018 Change Change (amount) (%) (amount) (%) (amount) (%) Total revenues 5,112 4,796 -317
Slide 34: (4) Newly executed contracts volume
5. Appendix (4) Newly executed contracts volume (¥100 million) YoY change YoY change (amount) FY2014 FY2015 FY2016 FY2017 FY2018 (FY2017 to (%) (FY2017 to FY2018) FY2018) Leases 3,968 4,536 5,234 5,636 5,300 -336 -6.0% Finance leases (3,311) (3,644) (3,958) (4,052) (3,724) (-328) (-8.1%) Operating l
Slide 35: (5) Newly executed lease contracts volume (by type of equipment)
5. Appendix (5) Newly executed lease contracts volume (by type of equipment) (¥100 million) YoY change Segment FY2016 FY2017 FY2018 (FY2017 to FY2018) IT and office equipment 2,213 1,839 1,897 +58 Industrial machinery 422 384 414 +29 Civil engineering and construction machinery 91 96 94 -2 Transport
Slide 36: (6) Operating assets
5. Appendix (6) Operating assets (¥100 million) EOY FY2017 EOY change 15/3 16/3 17/3 18/3 19/3 to FY2018 FY2017 to (amount) FY2018 (%) Leases 11,765 12,440 13,698 14,744 15,648 +904 +6.1% Finance leases (9,649) (10,060) (10,486) (10,987) (10,835) (-152) (-1.4%) Operating leases (2,116) (2,380) (3,21
Slide 37: (7) Leases, Financing: Asset balance and gross margin on assets
5. Appendix （7）Leases,Financing: Asset balance and gross margin on assets Leases: Asset balance and gross margin on assets Financing: Asset balance and gross margin on assets (¥100 million) (%) (%) 18,000 5 7,000 5 16,000 15,648 14,744 6,000 5,737 5,634 4 13,698 4 5,325 14,000 12,440 5,000 4,763 11,
Slide 38: (8) Overview of non-consolidated results and principal consolidated companies' results
5. Appendix (8) Overview of non-consolidated results and principal consolidated companies' results (¥100 million) Fuyo General Lease Co., Ltd. Fuyo Auto Lease Co., Ltd. Sharp Finance Corporation (non-consolidated) (ownership ratio: 100%) (ownership ratio: 65%) FY2017 FY2018 YoY change FY2017 FY2018
Slide 39: Go Where No One Has Gone Before
“ Go Where No One Has Gone Before” FUYO GENERAL LEASE CO., LTD. 39