Fuyo General Lease Co., Ltd. · TSE:8424
Fuyo General Lease — 1H FY2023 Earnings Presentation
49 slides from Fuyo General Lease's earnings presentation, Nov 10, 2023
Slide 1: Financial Results Briefing for the 1st half of FY2023
Financial Results Briefing for the 1st half of FY2023 IR Presentation Fuyo General Lease Co., Ltd. Securities code:8424 November 10,2023
Slide 2: Agenda and definitions of terms
１．Overview of consolidated operating results and business activities P3 ２. Medium-term Management Plan 「Fuyo Shared Value 2026」 P11 ３．Earnings forecast and dividend policy P37 ４．Appendix P40 Definitions of figures and terms used in this document Profit before funding ： Gross profit before deducting
Slide 3: 1H FY2023 Overview of consolidated operating results
１H FY2023 Overview of consolidated operating results 3
Slide 4: Fiscal 2023 1H consolidated operating results
Overview of consolidated operating results and business activities 1 Fiscal 2023 1H consolidated operating results ⚫ Record-high 1H earnings at all levels due to growth in marginal profit from continuous expansion of business areas (Record ordinary income for the seventh consecutive period and recor
Slide 5: Profit before interest expenses; ordinary profit and profit
Overview of consolidated operating results and business activities ２ Profit before interest expenses ３ Ordinary profit and profit ⚫ Renew record-highs for ordinary profit and profit ⚫ Balanced profit growth was achieved in each segment ⚫ Expansion of business domains positioned as growth ⚫ Making st
Slide 6: Factor causing the increase in ordinary profit
Overview of consolidated operating results and business activities ４ Factor causing the increase in ordinary profit （￥100 million） -34 +88 -38 +13 -9 311 332 Ordinary Ordinary profit profit 1 2 3 4 1H Profit before Personal/equipment Funding costs Credit-related Non-operating 1H FY2022 interest expe
Slide 7: Changes in funding
Overview of consolidated operating results and business activities ５ Changes in funding ⚫ Actively raised funds with ESG financing through leveraging the Sustainable Finance Framework ⚫ Funding costs and funding yields increased, mainly in foreign currencies, due to the accumulation of overseas asse
Slide 8: Changes in costs; net assets and shareholders' equity ratio
Overview 決算概況 of consolidated operating results and business activities ６ Changes in costs 7 Net assets and the shareholders’ equity ratio ⚫ Increased personnel/equipment expenses were ⚫ Stable profit growth enabled the steady mainly due to the Group’ expansion. accumulation of net assets. ⚫ OHR con
Slide 9: Newly executed contract volume
Overview of consolidated operating results and business activities ８ Newly executed contract volume ⚫ Expansion of initiatives in the energy & environment, real estate, and aircraft contributed to growth. ⚫ Newly executed operating lease contract volume, a focus of the current Medium-term Management
Slide 10: Operating assets, ROA
Overview of consolidated operating results and business activities 9 Operating assets, ROA ⚫ Steadily accumulated mainly in business domains positioned as growth drivers. ⚫ Shifted to a more profitable portfolio and expanding business areas with ROA maintained at a high level. Operating assets, ROA
Slide 11: Medium-term Management Plan Fuyo Shared Value 2026
Medium-term Management Plan Fuyo Shared Value 2026 11
Slide 12: Overview of Fuyo Shared Value 2026
Medium-term Management Plan Overview of Fuyo Shared Value 2026 Pursuing sustainable growth as a corporate group by practicing CSV (Creating Shared Value) to resolve social issues while at the same time delivering economic value Vision for New Fuyo Shared Value 2026 Medium-term Achieving sustainable
Slide 13: Management Goals: Financial/Non-financial Goals
Management Goals Financial/Non-financial Goals • Pursue sustainable profit growth by further improving profitability and sustaining the growth we have achieved to date. • Enhance corporate value by realizing a decarbonized society and resolving other social issues. Management Goals Financial goals N
Slide 14: Management Goals: Financial/Non-financial Goals
Management Goals Financial/Non-financial Goals Results for Target value Item Remarks 1H FY2023 For FY2026 150,000 500,000 Results show the volume of contribution to Contribution to CO2 reduction t-CO2/year t-CO2/year the reduction up to the second quarter. The amount invested in the promotion of 118
Slide 15: Business Domain-Specific Results and Topics
Business Domain-Specific Results and Topics 15
Slide 16: Positioning of Business Domains: Zone Management
Positioning of Business Domains Zone Management • In addition to helping our customers resolve their management issues, we contribute to creating value through projects such as jointly run businesses with our partners. • Invest our management resources in the Transformation Zone in our efforts to al
Slide 17: Business Domain-Specific Results
＊1 As of March 31, 2022 ＊2 These figures represent an ROA for the ICT business. General Business Domain-Specific Results 1H FY2022 1H FY2023 YoY change Ordinary Operating Ordinary Operating Ordinary Operating （¥100 million） ROA ROA ROA profit assets profit assets profit assets Rising Transformation
Slide 18: Business Domain-Specific Results (Comments)
General Business Domain-Specific Results (Comments) • Strong performance by overseas operating companies led to a year-on-year increase in ordinary profit. Mobility • Delays in new car deliveries are improving, but there remains uncertainty about the future of the used car market. • The renewable en
Slide 19: Rising Transformation Mobility (1)
Rising Transformation Mobility (1) Achieved sustainable profit growth mainly overseas ■ Ordinary profit and ROA for the mobility business （¥100 million） Q2: Results 31 ⚫ Strong performance by overseas operating companies led to 26 a year-on-year increase in ordinary profit. 3.6% ⚫ Delays in new car
Slide 20: Mobility (2) Initiatives to Promote EVs in Communities
Rising Transformation Mobility (2) Initiatives to Promote EVs in Communities Expansion of the business domain through collaboration with partners Achieving regional development and Vehicles area a decarbonized society through the use of commercial EVs ◼ Collaborated with EV Motors Japan, which devel
Slide 21: Energy & Environment (1)
Accelerating Transformation Energy & Environment (1) Expansion of the overseas renewable energy business ■Ordinary profit and ROA Q2: Results for the Energy & Environment business ⚫ Expansion of the renewable energy business mainly in Europe. Operating ⚫ Ordinary profit decreased partly due to the r
Slide 22: Energy & Environment (2) Expand Business Domains
Accelerating Transformation Energy & Environment (2) Expand Business Domains In addition to overseas renewable energy, efforts in new domains are also making progress U.K./ Established Renewable energy Japan/ Large-scale grid New domain (secondary energy, etc.) a local subsidiary storage battery bus
Slide 23: Energy & Environment (3) Global expansion of renewable energy
Energy & Environment (3) Accelerating Transformation Development of Renewable Energy Business Global expansion of renewable energy power generation business ●OECD countries*/ Renewable energy development loan fund ●U.K./ Offshore wind power *For Europe, North America, and Asia Pacific regions genera
Slide 24: BPO/ICT (1)
Accelerating Transformation BPO/ICT (1) Pursuit of efficiency and profitability for profit growth ■Ordinary profit and ROA for the BPO/ICT business （¥100 million） Q2: Results The ROA figures shown here are based on the results ⚫ Ordinary profit remained flat year-on-year due in part to from the ICT
Slide 25: BPO/ICT (2) Building a New Business Model by Utilizing AI
Accelerating Transformation BPO/ICT（２）Building a New Business Model by Utilizing AI Provide high-value-added BPO services utilizing AI AI-BPS : Business Process Service with AI Business consulting + BPO services DX solutions utilizing algorithms + DX solutions and AI technology Fuyo Lease Group’s BP
Slide 26: Healthcare (1)
Accelerating Transformation Healthcare（１） Progress in initiatives to expand the business domain, but revenue growth remains a work in progress ■Ordinary profit and ROA for the Healthcare business （¥100 million） Q2: Results ⚫ Operating assets were not increased, and ordinary profit declined year-on-y
Slide 27: Healthcare (2) Expansion of New Solutions
Accelerating Transformation Healthcare（２）Expansion of New Solutions Providing a variety of services to meet healthcare providers’ needs Region-specific healthcare fund Dental hygienist recruitment service business Tohoku Healthcare Support No.1 Fund Service name Medical and nursing care providers in
Slide 28: Real Estate
Growing Performance Real Estate Ordinary profit expanded based on ROA improvement Q2: Results ■Ordinary profit and ROA for the ⚫ Ordinary profit and ROA increased significantly due to Real Estate business （¥100 million） accumulation of asset from the previous fiscal year and the recording of gain on
Slide 29: Aircraft
Growing Performance Aircraft Good progress in both ordinary profit and assets due to recovery in passenger demand ■Ordinary profit and （¥100 million） ROA for the Aircraft Q2: Results business 30 ⚫ Ordinary profit increased significantly due to the normalization 27 of lease fee collections from airli
Slide 30: Towards Sustainable Value Creation
Towards Sustainable Value Creation 30
Slide 31: Non-financial Goals and Business Domains
Non-financial Goals and Business Domains Non-financial Goals and Business Domains Realizing a prosperous society and contributing to sustainable growth Expanding business domains and promoting further evolution in our relentless attempt to create new value Anticipating social changes and taking on t
Slide 32: Initiatives to Reduce Greenhouse Gas Emissions
Realization of a decarbonized society Initiatives to Reduce Greenhouse Gas Emissions Avoided emissions in the Group Avoided emissions by customers and communities Joined RE100 2012 Started renewable energy support for renewable energy-related Investment in and commercialization (first by Japanese co
Slide 33: Investment in Forest Funds
Achieving a decarbonized society Investment in Forest Funds Creation of carbon credits through investment in a U.S. forest fund organized by the Sumitomo Forestry Group Substantially expand the number of forests properly managed through the fund’s mechanisms, contributing to global climate change ac
Slide 34: Investment in Human Resources
Investment in Human Resources Investment in human capital (Establishment of the Fuyo Shared Value Creation Center) Establish the “Fuyo Shared Value Creation Center,” an ecosystem for growth and learning, while at the same time promoting an unprecedented and aggressive investment in human resources i
Slide 35: DX Strategy
Digital Transformation DX Strategy Goal of our DX strategies To create long-term shared value by utilizing digital technology to ensure that the value we provide to the society continues to evolve to adapt to the ever- changing external environment Address social issues by effectively utilizing digi
Slide 36: Fund Procurement through ESG Finance
ESG Finance Fund Procurement through ESG Finance Pursuing the CSV-oriented business strategies and ESG finance initiatives in terms of funding. Strengthen engagement on climate change and social issues through ESG finance. Sustainable Finance Framework established with the aim of strengthening fundi
Slide 37: Earnings forecast and dividend policy
Earnings forecast and dividend policy 37
Slide 38: FY2023 consolidated earnings forecast
Earnings forecast and dividend policy 1 FY2023 consolidated earnings forecast 1H FY2023 FY2023 （¥100 million） results forecast Net sales 3,504 7,000 Operating profit 278 570 Ordinary profit 332 640 Profit attributable owners of parent 230 430 Basic earnings per share 767.20 1,434.09 Copyright(C) Fuy
Slide 39: Dividend policy
Earnings forecast and dividend policy ２ Dividend policy 1H FY2023 results ¥195 as initially forecast FY2023 forecast Annual dividend payment forecast unchanged from initial forecast (¥390) Aiming to achieve a dividend payout ratio of Changes in dividends and dividend payout ratio 30% or more by FY20
Slide 40: Appendix
Appendix 40
Slide 41: Key topics (1)
Appendix 1 Key topics（１） Established a “region-specific healthcare fund” management company to provide optimal solutions to medical Healthcare and nursing care providers Energy & Launched commercial operation of a large-scale “Samegawa Aono Solar Power Plant” in Fukushima Prefecture Environment 1Q C
Slide 42: Key topics (2)
Appendix 1 Key topics（２） Energy & Photon Taiwan Fund, construction of a 120MW solar power plant in Taiwan Environment Green power to be supplied to semiconductor manufacturing company Signed a business alliance agreement to promote “circular economy leasing” Circular Economy - Business alliance with
Slide 43: Summary of consolidated operating results
Appendix ２ Summary of consolidated operating results （¥100 million） 1H 1H 1H 1H 1H YoY FY2019 FY2020 FY2021 FY2022 FY2023 Change Net sales 3,445 3,574 2,854 3,561 3,504 -57 Cost of sales 3,029 3,114 2,373 3,028 2,883 -145 Profit before funding costs 416 459 481 533 621 +88 Funding costs 47 50 47 48
Slide 44: Segment results (Consolidated)
Appendix ３ Segment results（Consolidated） Leases and Installment sales Leases Installment sales Total （¥100 million） 1H 1H YoY YoY 1H 1H YoY YoY 1H 1H YoY YoY Change Change Change Change Change Change FY2022 FY2023 （amount） （％） FY2022 FY2023 （amount） （％） FY2022 FY2023 （amount） （％） Net sales 3,033 2,9
Slide 45: Operating assets
Appendix ４ Operating assets 1H YoY （¥100 million） YoY change FY2019 FY2020 FY2021 FY2022 Change FY2023 (amount) (%) Leases 16,136 17,133 16,916 16,882 17,213 +332 +2.0% Finance lease (11,068) (10,808) (10,198) (8,908) (8,777) (-132) (-1.5%) Operating leases (5,068) (6,325) (6,718) (7,974) (8,437) (+
Slide 46: Newly executed Contract Volume
Appendix ５ Newly executed Contract Volume 1H 1H 1H 1H 1H YoY （¥100 million） YoY change Change FY2019 FY2020 FY2021 FY2022 FY2023 (amount) (%) Leases 3,016 2,173 2,272 1,934 2,725 +791 +40.9% Finance leases (2,066) (1,608) (1,241) (1,128) (1,205) (+77) (+6.8%) Operating leases (950) (565) (1,031) (80
Slide 47: Newly executed lease contract volume (by type of equipment)
Appendix ６ Newly executed lease contract volume (by type of equipment) 1H 1H 1H （¥100 million） YoY Change FY2021 FY2022 FY2023 IT & office equipment 662 636 649 +14 Industrial machinery 92 66 77 +11 Civil engineering and construction machinery 16 14 13 -1 Transportation equipment 356 185 571 +385 Me
Slide 48: Summary of the operating results of the major subsidiaries
Appendix ７ Summary of the operating results of the major subsidiaries Sharp Finance Corporation Fuyo Auto Lease Co., Ltd. YAMATO LEASE CO., LTD. Accretive Co., Ltd. (ownership ratio: 65%) (ownership ratio: 100%) (ownership ratio: 60%) (ownership ratio: 74%) 1H 1H 1H 1H 1H 1H 1H 1H YoY change YoY cha
Slide 49: Going Where No One Has Gone Before
“Going Where No One Has Gone Before” FUYO GENERAL LEASE CO., LTD. 49