Orix Corporation · TSE:8591
Orix — Q3 FY2013 Earnings Presentation
37 slides from Orix's earnings presentation, Jan 31, 2013
Slide 1: ORIX Corporation Conference Call: Third Quarter Consolidated Financial Results
ORIX Corporation (TSE: 8591; NYSE: IX) Conference Call Third Quarter Consolidated Financial Results For the Nine Month Period Ended April 1 – December 31, 2012 January 31, 2013 Haruyuki Urata Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of the Treasury Headquarters
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 Performance P.4 III. Fiscal Year Target P.12 IV. Capital and Funding P.14 V Summary V. P 15 P.15 Appendix pp Copyright © 2013 ORIX Corporation All rights reserved. 2
Slide 4: I. Overview
I. Overview Achieved 90.1bn in Net Income, up 35% year on year Net income target revised upward from 100bn to 110bn （JPY Bn） Net Income and ROE 120 0 120.0 110 0 110.0 12% 100.0 90.1 10% 80.0 8.4% 8% 66.6 6.7% 60.0 6% 40.0 4% 20 0 20.0 2% 0.0 0% 12.3 3Q 13.3 3Q 13.3 (Target) *3Q refers to the th
Slide 5: II. Segment Performance: Profit
II. Segment Performance Profit Significant increase in Investment & Operation and Retail Overseas Business and Maintenance Leasing maintained high profit level （JPY Bn） Trend in Segment Profit 150.0 Corporate Financial Services 120 0 120.0 Maintenance Leasing 90.0 Real Estate Investment & Operat
Slide 6: II. Segment Performance: Assets
II. Segment Performance Assets Increase in Retail, Overseas Business, Maintenance Leasing Continued asset reduction in Real Estate Trend in Segment Assets （JPY Bn） 2 50% 2.50% 6,000 Investment & Operation 2.00% 5,000 , Maintenance Leasing g 4,000 1.50% Corporate Financial Services 3,000 O Overse
Slide 7: Segment Performance 1. Corporate Financial Services
II. Segment Performance 1. Corporate Financial Services 12.3 13.3 (JPY Bn) 11.3 12.3 Change 3Q 3Q Base Profit 22 6 22.6 24 5 24.5 17 4 17.4 17 6 17.6 101% Capital Gains 0.4 0.3 0.3 0.1 - Provisions -12.7 -2.3 -2.1 0.6 - Impairments -0.3 -1.1 -0.8 -0.1 - Segment Profit 10.0 21.5 14.7 18.2 123% Segmen
Slide 8: Segment Performance 2. Maintenance Leasing
II. Segment Performance 2. Maintenance Leasing 12.3 13.3 (JPY Bn) 11.3 12.3 Change 3Q 3Q Base Profit 28 4 28.4 34 7 34.7 26 9 26.9 27 0 27.0 100% Capital Gains 0.1 0.1 0.1 0.1 - Provisions -2.0 0.0 0.1 -0.4 - Impairments -0.4 0.0 0.0 -0.1 - Segment Profit 26.2 34.7 27.1 26.6 98% Segment Assets 502.7
Slide 9: Segment Performance 3. Real Estate
II. Segment Performance 3. Real Estate 12.3 13.3 (JPY Bn) 11.3 12.3 Change 3Q 3Q Base Profit 11 6 11.6 18 3 18.3 14 6 14.6 19 1 19.1 131% Capital Gains 22.5 14.2 5.8 10.2 - Provisions -1.1 -3.0 -2.1 0.5 - Impairments -32.9 -28.2 -21.2 -25.6 - Segment Profit 0.1 1.3 -2.9 4.2 - Segment Assets 1,539.8
Slide 10: Segment Performance 4. Investment & Operation
II. Segment Performance 4. Investment & Operation 12.3 13.3 (JPY Bn) 11.3 12.3 Change 3Q 3Q Base Profit 18 1 18.1 22 4 22.4 16 4 16.4 24 6 24.6 150% Capital Gains 10.9 5.3 5.6 16.4 - Provisions -6.8 -7.5 -1.5 -2.6 - Impairments -9.0 -4.2 -2.6 -5.8 - Segment Profit 13.2 16.0 17.8 32.7 184% Segment As
Slide 11: Segment Performance 5. Retail
II. Segment Performance 5. Retail 12.3 13.3 (JPY Bn) 11.3 12.3 Change 3Q 3Q Base Profit 25 4 25.4 32 8 32.8 25 9 25.9 31 6 31.6 122% Capital Gains 0.0 0.3 0.3 3.4 - Provisions -1.4 -1.1 0.0 -1.5 - Impairments -2.2 -12.7 -12.7 0.0 - Segment Profit 21.8 19.4 13.6 33.6 247% Segment Assets 1,653.7 1,738
Slide 12: Segment Performance 6. Overseas Business
II. Segment Performance 6. Overseas Business 12.3 13.3 (JPY Bn) 11.3 12.3 Change 3Q 3Q Base Profit 42 1 42.1 40 4 40.4 29 1 29.1 24 7 24.7 85% Capital Gains 13.9 21.2 13.7 11.8 - Provisions -3.2 -3.8 -1.5 -1.1 - Impairments -7.1 -8.0 -1.9 -1.1 - Segment Profit 45.6 49.8 39.3 34.3 87% Segment Assets
Slide 13: III. Fiscal Year Target
III. Fiscal Year Target Net Income target revised upward to 110bn, forecast ROE of 7.7% Real estate asset reduction, significant g improvement in profitability y Trend in Net Income and ROE Trend in Segment Assets and ROA R lE Real Estate t t (JPY Bn) (JPY Bn) Segment Asset（ex. Real Estate） 7,00
Slide 14: III. Fiscal Year Target: Base Profit and Revenues
III. Fiscal Year Target Growth in base profit contributed to increase in profit Base revenues* led by service related revenues Trend in Base Profit Breakdown of Base Revenues (JPY Bn) (JPY Bn) Interest related revenues 400 Base Profit（Segment Total） 3.5% 400 Service related revenues Base Profit
Slide 15: IV. Capital and Funding
IV. Capital and Funding Liquidity on-Hand / Capital Status Continue to maintain ample liquidity on-hand Use for aggressive investment while securing capital sufficiency (JPY Bn) Liquidity vs. Short-term Liabilities Capital Status 1,600 350% 289% 294% 100% 1,400 300% 148% 204% 1,200 80% 250% 1 00
Slide 16: V. Summary
V. Summary Achieved 90.1bn in Net Income, 90% of the full year target Net Income target g revised upward p to 110bn Aim for new investment and profit growth in market/sector with high growth potential Copyright © 2013 ORIX Corporation All rights reserved. 15
Slide 17: Appendix
Appendix pp Copyright © 2013 ORIX Corporation All rights reserved. 16
Slide 18: Appendix (1) Trend in Performance
Appendix (1) Trend in Performance (JPY Bn) 12.3 12 3 13.3 13 3 11.3 12.3 3Q 3Q Total Revenue 944.4 969.7 702.0 783.4 Net Income *1 1 66 0 66.0 83 5 83.5 66 6 66.6 90 1 90.1 Segment Assets 6,142.8 6,002.1 5,922.4 6,173.3 Total Assets 8,561.9 8,332.8 8,173.3 8,241.8 Shareholders' Equity 1,306.6 1,380.
Slide 19: Appendix (2) Profit by Segment
Appendix (2) Profit by Segment (JPY Bn) 12.3 13.3 11.3 12.3 Change 3Q 3Q Corporate Financial Services 10 0 10.0 21 5 21.5 14 7 14.7 18 2 18.2 123% Maintenance Leasing 26.2 34.7 27.1 26.6 98% Real Estate 0.1 1.3 -2.9 4.2 - Investment and Operation 13.2 16.0 17.8 32.7 184% Retail 21.8 19.4 13.6 33.6 2
Slide 20: Appendix (3) Assets by Segment & Region
Appendix (3) Assets by Segment & Region (JPY Bn) 11.3 12.3 13.3 3Q Corporate Financial Services 968.3 898.8 885.1 Maintenance Leasing 502.7 537.8 595.8 Real Estate 1,539.8 1,369.2 1,211.2 Investment and Operation 506 0 506.0 471 1 471.1 402 4 402.4 Retail 1,653.7 1,738.5 1,934.9 Overseas Business 97
Slide 21: Appendix (4) Funding and Liquidity
Appendix (4) Funding and Liquidity ( (JPY Bn)) 11.3 12.3 13.3 3Q CP 180.8 180.4 169.4 Borrowings from Financial Institutions 2,360.9 2,277.3 2,214.8 Bonds / MTN 1,450.0 1,393.0 1,378.5 Deposits 1,065.2 1,103.5 1,135.3 Subtotal 5,056.9 4,954.3 4,898.0 ABS, CMBS 1,018.2 874.7 714.6 Short-term Debt, Lo
Slide 22: Appendix (5) Real Estate Portfolio
Appendix (5) Real Estate Portfolio ■ Trend in Real Estate Segment Assets by Type (JPY Bn) 11.3 12.3 13.3 3Q Rental Property 905.9 876.3 823.3 Under Lease 680.3 705.9 646.7 Under Development 225.6 170.4 176.6 Condo Assets 128.1 87.3 63.9 NRL / S Specified ifi d B Bonds d 301 8 301.8 205 4 205.4 * 137
Slide 23: Appendix (6) Real Estate Portfolio
Appendix (6) Real Estate Portfolio ■ Rental Property Assets by Type （12.12） (JPY Bn) Under Lease Under Property Type Total Balance NOI Yield Development Office Buildings 215.0 4.7% 72.3 287.3 Logistics Centers 19.5 6.1% 17.4 36.9 Commercial Facilities 172.8 6.3% 36.6 209.4 Rental Condos 137 4 137.4
Slide 24: Appendix (7) Asset Quality
Appendix (7) Asset Quality Asset Quality (Adjusted **) (JPY Bn) 11.3 12.3 13.3 3Q Investment in Direct Financing Leases 660.0 728.0 801.2 90+ Days Past-Due Direct Financing Leases 22.8 17.4 16.2 Installment Loans 2,142.0 2,073.2 2,224.3 90+ Days Past-Due Loans 10.0 8.6 7.7 y Evaluated for Impairme
Slide 25: Appendix (8) Reconciliation Table of Non-GAAP Financial Measurement
Appendix (8) 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
Slide 26: Appendix (9) Reconciliation Table of Non-GAAP Financial Measurement
Appendix (9) Reconciliation Table of Non-GAAP Financial Measurement ( (JPY Bn)) Key Ratio 11.3 12.3 13.3 3Q Total Assets （a） 8,561.9 8,332.8 8,241.8 Deduct: Payables y under Securitized Leases, Loan Receivables and Investment in Securities 1 018 2 1,018.2 874 7 874.7 714 6 714.6 Adjusted Total Asset
Slide 27: Appendix (10) Reconciliation Table of Non-GAAP Financial Measurement
Appendix (10) Reconciliation Table of Non-GAAP Financial Measurement ( (JPY Bn)) Consolidated Corporate Investment Maintenance Overseas Segment Financial Segment Profit Details Financial Real Estate and Retail Total Leasing Business Total Statement Services Operations Adjustment Base Profit *1 22.6
Slide 28: Reference Data
Reference e e e ce Data ata Copyright © 2013 ORIX Corporation All rights reserved. 27
Slide 29: Stock Market
Stock Market Performance of Major Stock Markets since September 2008 (Sep 30, 2008 =100) 250 200 150 100 Nikkei (Japan) Dow Jones (US) 50 Hang Seng (HK) CSI 300 (China) SENSEX (India) 0 08.12 09.06 09.12 10.06 10.12 11.06 11.12 12.06 12.12 Source: Bloomberg Copyright © 2013 ORIX Corporation All righ
Slide 30: 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 5.0 1 year Inter-Bank Inter Bank Deposit Rate in U U.S. S 1 year RMB Deposit Rate by Bank of China 4.0 3.0 2.0 1.0 0.0 08.12 09.12 10.12 11.12 12.12 Source: Sou ce Bloombe
Slide 31: 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 -5.0 0.0 -2.0 -10.0 08.09 09.09 10.09 11.09 12.09 -4.0 Japan U. S. China 08.12 09.12 10.12 11.12 12.12 Japan U. S. China Source: Bloomberg
Slide 32: Japanese Corporate Indices
Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate (Quarter) Diffusion Index (JPY Tn) (Cases) 80 8.0 4 500 4,500 30 20 6.0 4,000 10 4.0 3,500 0 2.0 3,000 , 10 -10 0.0 2,500 -20 08.12 09.06 09.12 10.06 10.12 11.06 11.12 12.06 12.12 08.12 09.06 09.12 10.06 10.12 11.06 11.12 12.06 12.12
Slide 33: 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 , 1,500 12,000 10,000 1 000 1,000 8 000 8,000 6,000 500 4,000 2,000 0 0 08.12 09.06 09.12 10.06 10.12 11.06 11.12 12.06 12.12 02.09 03.09 04.09 05.09 06.09 07.09 08.09 09.09 10.09 11.09 12.0
Slide 34: Domestic Lease Business Indicators
Domestic Lease Business Indicators Private Equipment Investment New Car Sales ( JPY Bn) (,000 Units) 90,000 12.0% 80,000 7,000 14.0% 10.0% 70,000 6,000 12.0% 60,000 8.0% 5,000 10.0% 50 000 50,000 6.0% 4,000 8.0% 40,000 3,000 6.0% 30,000 4.0% 2,000 4.0% 20,000 2 0% 2.0% 10,000 1,000 2.0% 0 0.0% 0 0.0
Slide 35: Other Domestic Indicators
Other Domestic Indicators Retail Life Insurance Consumer Finance Loans ( JPY Bn) ( JPY Bn) 14,000 25,000 12,000 10,000 20,000 8,000 15,000 6,000 10,000 4,000 5,000 2 000 2,000 0 2000 2002 2004 2006 2008 2010 0 2000 2002 2004 2006 2008 2010 2012 Retail Life Insurance Premiums Consumer Finance Loan(10
Slide 36: Other Domestic Indicators: Renewable Energy Supply
Other Domestic Indicators Trend in Domestic Supply of Renewable Energy （Primary Energy Supply Basis） ( Petajoule) Source: Agency for Natural Resources and Energy Copyright © 2013 ORIX Corporation All rights reserved. 35
Slide 37: 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