Fuyo General Lease Co., Ltd. · TSE:8424
Fuyo General Lease — 1H FY2020 Earnings Presentation
40 slides from Fuyo General Lease's earnings presentation, Nov 16, 2020
Slide 1: Financial Results Briefing for the 1st half of FY2020
Financial Results Briefing for the 1st half of FY2020 IR Presentation November 16, 2020 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. Earnings forecast and dividend policy 5. Appendix Earnings forecasts and other forward-looking statements provided in this material are base
Slide 3: 1H FY2020 results
1. Overview of consolidated operating results （１） 1H FY2020 results • Total revenues and profit records were rewritten in consecutive years as increased earnings, mainly in real estate leases and financing, overcame the impact of the COVID-19 pandemic. • Operating assets increased significantly, mai
Slide 4: Total revenues; ordinary profit and profit attributable to owners of parent
1. Overview of consolidated operating results （３）Ordinary profit and profit （２） Total revenues attributable to owners of parent Revenue continued to increase mainly due to the Ordinary profit and profit attributable to owners of consolidation of YAMATO LEASE and NOC. parent records were rewritten in
Slide 5: Factors causing the increase in ordinary profit
1. Overview of consolidated operating results （4） Factors causing the increase in ordinary profit • Profit before interest expenses increased significantly as real estate leases continued to grow and the financing business had strong performance. • The increase in personnel/equipment expenses due to
Slide 6: Profit before interest expenses
1. Overview of consolidated operating results （５） Profit before interest expenses ・Profit increased in all segments, including the strongly performing financing business. ・Profit on Leases continued to grow due to the increase in real estate leases and consolidation of YAMATO LEASE.Other, which is c
Slide 7: Changes in funding
1. Overview of consolidated operating results （６） Changes in funding • The funding balance rose due to consolidation of YAMATO LEASE and accumulation of operating assets. • The impact of the COVID-19 pandemic on the funding environment has decreased. (¥100 million) 単位：億円 (¥100 million) Funding balan
Slide 8: Changes in costs; net assets and shareholders' equity ratio
1. Overview of consolidated operating results （８） Changes in net assets and （７） Changes in costs the shareholders’ equity ratio ・Personnel/equipment expenses increased, ・Net assets have steadily accumulated. stemming from an increase in consolidated ・Shareholders’ equity ratio is forecast to subsidi
Slide 9: Newly executed contract volume
２．Overview of business activities (1) Newly executed contract volume ・Overall, on a par with the previous year due to the increase in Financing, Other. ・New leases for aircraft have been restrained in light of the recent business environment. Newly executed contract volume (¥100 million) 6,887 6,624
Slide 10: Operating assets, ROA
２．Overview of business activities （２） Operating assets, ROA • Operating assets increased significantly mainly due to consolidation of YAMATO LEASE. • Operating leases have steadily accumulated, centered on real estate leases. • In Financing, Other, bond investment is performing with strong results.
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 businesses and continues to expand the frontier 11
Slide 12: Goals 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 1H FY2020 Item FY2021 results Achieved ahead of schedule Operating assets ¥2,500.0 billion ¥2,575.6 billion FY2020 ROA 2
Slide 13: Position of each business, topics
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (2) Position of each business, topics Accumulation of operating PPA service Zero Carbon City assets was firm Disruptive Innovations Sustaining Innovations Transformation Zone Performance Zone Revenue Performance (Grow new businesse
Slide 14: Progress on the plan: Operating assets
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (3) Progress on the Medium-Term Management Plan: Operating assets ・The balance in strategic areas increased due to the consolidation of YAMATO LEASE and growth in real estate leases. ・Steady accumulation will continue, while keepin
Slide 15: Transitions in contract spread
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （４） Progress on the Medium-Term Management Plan: Transitions in contract spread(*1) (Ref) ・General leases*2 continued with profitability-focused initiatives (*2) General leases: leases excluding real estate ・Maintained high level f
Slide 16: External assessment (company credit ratings)
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (5) Progress on the Medium-term Management Plan: External assessment (company credit ratings) Issuer credit ratings assigned by credit rating agencies were up 1 notch from the start of the Medium-term Management Plan recognizing fa
Slide 17: Real estate ①
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （６） Real estate ① Steady accumulation of operating assets towards the target for the final fiscal year Inquiries continue despite COVID-19 (％) ● Expanding the business base by building strong relationships with a wide-range (¥100 m
Slide 18: Real estate ②
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （６） Real estate ② Topic: Providing a real estate lease for the facilities housing the “Warner Bros. Studio Tour Tokyo – The Making of Harry Potter” Fuyo Lease is providing Warner Bros. Japan with a real estate lease of the Studio T
Slide 19: Real estate ③
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （６） ) Real estate ③ Accumulation of bridge contracts through cooperation with alliance partners Breakdown of real estate leases by building application Based on operating assets • Percentages are approximate values based on figures
Slide 20: Aircraft
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （７） Aircraft Prudent business management continues (¥100 million) (％) Target of 5.0 Aircraft leasing operating assets and ROA the plan Harsh business environment continues 2,800 4.0 ●New leases for aircraft have been restrained wit
Slide 21: Overseas
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （８） Overseas Continue to expand business with cross-selling (Overseas = Business of overseas subsidiaries, excluding aircraft leasing) ROA improved (¥100 million) (％) 4.0 Overseas business operating assets (*) and ROA Target of ●RO
Slide 22: Energy/environment ①
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （９） Energy/environment ① Convert from “financing” to “business” (¥100 million) 単位：％ Operating assets and ROA of the solar power generation 20.0 Solar power generation business business in Energy/environment Upper section: Solar pow
Slide 23: Energy/environment ②
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （９） Energy/environment ② Progress in new initiatives for decarbonizing PPA service Concluded the Company’s first green Overview of services power purchase agreement (PPA service) ●The first customer of the service is Seiko Holdings
Slide 24: Medical/social welfare
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （10） Medical/social welfare Respond to diverse needs, while keeping an eye on the impact of COVID-19 (¥100 million) Provide solutions that meet the needs of each business operator Operating asset balance in medical/social welfare (
Slide 25: BPO services ①
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （11） ) BPO services ① Increased BPO needs amid COVID-19 Environmental change in the “With Corona” era (1) Work-style reform (2) DX expansion (3) Regulatory reform and legislative system amendments Change in commercial practice thro
Slide 26: BPO services ②
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （11） ) BPO services ② Respond to new needs through Group cooperation Outsourcing of operations that are still done manually when there is a shift to telecommuting (accounting related processes, etc.) Needs Solutions [Completion of
Slide 27: Mobility business
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （12）Mobility business Build a cooperative structure with YAMATO LEASE Promote cross-selling according to clients’ needs (¥100 million) Truck Leases Client base Service Fuyo Lease Group YAMATO LEASE Operating assets of the mobility
Slide 28: Impact of the spread of the COVID-19 pandemic
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan （13）Impact of the spread of the COVID-19 pandemic ・Impacts on real estate, vendor leases and funding costs were limited (were not factors exerting downward pressure as anticipated at the beginning of the period). ・The harsh busines
Slide 29: ESG related initiatives
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (14) ESG related initiatives Considering the issuance of the first sustainability-linked bond by a Japanese financial institution Sustainability-linked bond: A method of funding where investors invest based on their assessment of t
Slide 30: FY2020 consolidated earnings forecast
4. Earnings forecast and dividend policy （１） FY2020 consolidated earnings forecast (¥100 million) 1H FY2020 FY2020 results forecast Total revenues 3,574 7,200 Operating profit 209 420 Ordinary profit 228 450 Profit attributable to owners of parent 139 270 Basic earnings per share ¥462.79 ¥900.84 30
Slide 31: Dividend policy
4. Earnings forecast and dividend policy （２） Dividend policy End of 1H FY2020 — Interim dividend payment as initially forecast: ¥110 End of FY2020 — Annual dividend payment forecast unchanged from initial forecast (¥220) (¥) Change in dividend （Forecast) 50th anniversary 110 commemorative 188 205 di
Slide 32: Key topics
５． Appendix （１） Key topics Medical/ Concluded capital and business agreement with THINKCYTE, which is developing a next-generation cell social welfare isolation system Q1 Energy/ environment Commenced operation of the world’s largest fully artificial light-based plant factory Energy/ environment Dec
Slide 33: Summary of consolidated operating results
５． Appendix （２） Summary of consolidated operating results (¥100 million) YoY change 1H FY2016 1H FY2017 1H FY2018 1H FY2019 1H FY2020 (1H FY2019 to 1H FY2020) Total revenues 2,450 3,026 2,957 3,445 3,574 +128 Total costs 2,179 2,714 2,636 3,077 3,165 +88 (Interest expenses) [36] [36] [41] [47] [50]
Slide 34: Segment results (consolidated)
５． Appendix （３） Segment results (consolidated) (¥100 million) Leases Installment sales Leases and Installment sales total 1H 1H YoY YoY 1H 1H YoY YoY 1H 1H YoY YoY Change Change Change Change Change Change FY2019 FY2020 (amount) (%) FY2019 FY2020 (amount) (%) FY2019 FY2020 (amount) (%) Total revenue
Slide 35: Newly executed contract volume
５． Appendix （４） Newly executed contract volume (¥100 million) YoY Change YoY change 1H 1H 1H 1H 1H (amount) (%) (1H FY2019 to (1H FY2019 to FY2016 FY2017 FY2018 FY2019 FY2020 1H FY2020) 1H FY2020) Leases 2,570 2,807 1,884 3,016 2,173 -843 -28.0% Finance leases [2,061] [2,191] [1,636] [2,066] [1,608]
Slide 36: Newly executed lease contract volume (by type of equipment)
５． Appendix （５） Newly executed lease contract volume (by type of equipment) (¥100 million) YoY change 1H 1H 1H Segment (1H FY2019 to FY2018 FY2019 FY2020 1H FY2020) IT & office equipment 974 1,199 869 -330 Industrial machinery 135 260 136 -123 Civil engineering and construction machinery 42 52 42 -1
Slide 37: Operating assets
５． Appendix （６） Operating assets (¥100 million) YoY Change YoY change 1H (amount) (%) FY2016 FY2017 FY2018 FY2019 (FY2019 to (FY2019 to FY2020 1H FY2020) 1H FY2020) Leases 13,698 14,744 15,648 16,136 17,240 +1,104 +6.8% Finance leases [10,486] [10,987] [10,835] [11,068] [11,542] [+474] [+4.3%] Opera
Slide 38: Leases and Financing: Asset balance and gross margin on assets
５． Appendix （７）Leases and 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) (¥100 million) 8,0 00 5.0 5 7,225 7,0 00 17,240 6,656 4.0 15,648 16,136 6,0 00 14,744 4 13,698 5,634 5,737
Slide 39: 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., Sharp Finance Corporation Fuyo Auto Lease Co., Ltd. YAMATO LEASE Ltd. (non-consolidated) (ownership ratio: 65%) (ownership ratio: 100%) (ownership ratio; 60%) 1H
Slide 40: Go Where No One Has Gone Before
“Go Where No One Has Gone Before” FUYO GENERAL LEASE CO., LTD. 40