Orix Corporation · TSE:8591

Orix — Q1 FY2014 Earnings Presentation

41 slides from Orix's earnings presentation, Jul 30, 2013

  1. Slide 1: First Quarter Consolidated Financial Results

    ORIX Corporation p (TSE: 8591; NYSE: IX) Conference Call First Quarter Consolidated Financial Results For the Three Month Period Ended April 1 – June 3030, 2013 July 30, 2013 Haruyuki Urata Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of the Treasury Headquarters Ta

  2. 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

  3. Slide 3: Contents

    Contents I. Overview P. 3 II Segment II. S t Performance P f P 6 P. III Topics III. P.12 Ⅳ. Real Estate Segment P.15 Ⅴ. Asset Quality P.16 Ⅵ. Funding P.17 Ⅶ Summary Ⅶ. P 20 P.20 Appendix Copyright © 2013 ORIX Corporation All rights reserved. 2

  4. Slide 4: I. Overview: Net Income and ROE

    I. Overview  Achieved 45bn in Net Income, a 29% increase year on year and 33% of the full year target Net Income* and ROE (JPY Bn) 150.0 135.0 12% 111.9 10% 100.0 8% 83.5 66.0 6% 50.0 45.0 4% 2% 0.0 0% 11.3 12.3 13.3 13.1Q 14.3 （Target） *Net Income refers to Net Income Attributable to ORIX Corporat

  5. Slide 5: I. Overview: Trend in Segment Profit

    I. Overview  Maintenance Leasing, Real Estate, Retail, and Overseas Business increased profits. Investment and Operation was also robust Trend in Segment Profit (JPY Bn) 70 Corporate Financial Services 60 Maintenance Leasing 50 Real Estate 40 Investment and Operation 30 Retail 20 Overseas Business

  6. Slide 6: I. Overview: Trend in Segment Assets

    I. Overview  Mainly Maintenance Leasing, Retail, and Overseas Business increased assets. ROA is also on a rising trend Trend in Segment Assets (JPY Bn) 7,000 4.0% Robeco 6,000 3.5% Corporate Financial Services 3 0% 3.0% 5,000 2.9% Maintenance Leasing 2.5% 4,000 Real Estate 2.0% 1 8% 1.8% 3,000 1.5%

  7. Slide 7: Corporate Financial Services

    II. Segment Performance 1. Corporate Financial Services （JPY Bn） 12.3 13.3 13.3 1Q 14.3 1Q Change Base Profit 24.5 24.8 5.7 4.7 82% Capital Gains 03 0.3 02 0.2 02 0.2 02 0.2 - Provisions -2.3 -0.1 0.2 0.1 - p Impairments -1.1 -0.1 0.0 0.0 - Segment Profit 21.5 24.8 6.1 4.9 81% Segment Assets 898 8 8

  8. Slide 8: Maintenance Leasing

    II. Segment Performance 2. Maintenance Leasing （JPY Bn） 12.3 13.3 13.3 1Q 14.3 1Q Change Base Profit 34.7 36.2 9.3 11.4 122% Capital Gains 01 0.1 01 0.1 00 0.0 00 0.0 - Provisions 0.0 -0.1 -0.1 -0.1 - Impairments p 0.0 -0.1 0.0 0.0 - Segment Profit 34.7 36.1 9.2 11.3 123% Segment Assets 537 8 537.8

  9. Slide 9: Real Estate

    II. Segment Performance 3. Real Estate （JPY Bn） 12.3 13.3 13.3 1Q 14.3 1Q Change Base Profit 18.3 25.0 7.0 7.0 100% Capital Gains 14 2 14.2 16 5 16.5 30 3.0 48 4.8 - Provisions -3.0 0.4 0.1 0.1 - Impairments p -28.2 -36.4 -8.2 -6.3 - Segment Profit 1.3 5.6 1.8 5.5 301% Segment Assets 1 369 2 1,369.2

  10. Slide 10: Investment and Operation

    II. Segment Performance 4. Investment and Operation （JPY Bn） 12.3 13.3 13.3 1Q 14.3 1Q Change Base Profit 22.4 29.1 12.1 6.7 56% Capital Gains 53 5.3 19 0 19.0 38 3.8 44 4.4 - Provisions -7.5 -5.5 -1.3 0.0 - Impairments p -4.2 -7.6 -3.9 -0.5 - Segment Profit 16.0 34.9 10.6 10.7 101% Segment Assets 4

  11. Slide 11: Retail

    II. Segment Performance 5. Retail （JPY Bn） 12.3 13.3 13.3 1Q 14.3 1Q Change Base Profit 32.8 42.1 10.2 15.6 153% Capital Gains 03 0.3 37 3.7 33 3.3 28 2.8 - Provisions -1.1 -2.6 -0.1 -1.2 - Impairments p -12.7 0.0 0.0 0.0 - Segment Profit 19.4 43.2 13.4 17.2 128% Segment Assets 1 738 5 1,738.5 1 971

  12. Slide 12: Overseas Business

    II. Segment Performance 6. Overseas Business （JPY Bn） 12.3 13.3 13.3 1Q 14.3 1Q Change Base Profit 40.4 37.5 8.8 12.9 146% Capital Gains 21 2 21.2 19 3 19.3 25 2.5 65 6.5 - Provisions -3.8 -2.4 0.2 -1.2 - Impairments p -8.0 -1.6 0.0 -2.6 - Segment Profit 49.8 52.8 11.5 15.5 135% Segment Assets 986 8

  13. Slide 13: III. Topics: MEDGULF

    III. Topics MEDGULF  Acquired 25.7% stake in MEDGULF, a holding company that owns No.1 Saudi Arabian and No.1 Lebanese life insurance companies as its subsidiaries, from its major shareholder  Penetration rate of life insurance in the Middle East region is less than 2% 2%, approx approx. one fifth

  14. Slide 14: III. Topics: GBPC

    III. Topics GBPC  Strategic alliance regarding energy business with GT Capital group, which includes major commercial bank Metrobank and FMIC, a Metrobank affiliate  Also acquired 20% stake in power generation company GBPC from FMIC  GT Capital, FMIC, and ORIX will actively promote electricity po

  15. Slide 15: III. Topics: TenGer

    III. Topics TenGer  Reached basic agreement to make capital participation through acquisition of 16% stake in major financial services holding company TenGer Financial Group(TFG)  Its It main i subsidiary b idi Xac X Bank B k is i the th fourth f th largest l t commercial i lbbank k iin M Mongolia

  16. Slide 16: IV. Real Estate Segment

    Ⅳ. Real Estate Segment  Accounts for approx. 17% of total segment assets T d iin S Trend Segmentt Assets A t Trend in Base Profit （JPY Bn） （JPY Bn） 1,539.8 20 2.5% 1,600 , 1,369.2 7.0 4.2 7.0 301.8 15 2.0% 1,200 205.4 1,111.8 1,063.5 128.1 10 87 3 87.3 113.4 1.5% 86.2 225.6 170.4 55.4 52.6 151.0 12

  17. Slide 17: V. Asset Quality

    V. Asset Quality  Non-performing ratio is almost flat at 6.3%  Coverage ratio against loans individually evaluated for impairment p is approx. pp 93% Trend in Non-Performing Ratio* Coverage Ratio of Loans Individually （JPY Bn） Evaluated for Impairment 3,500 12.0% 10.4% （JPY Bn） 12.6 12.9 12.12 13.

  18. Slide 18: VI. Funding Structure, Long-Term Debt, Funding Cost

    Funding Structure, Trend in Share of Long-Term Ⅵ. Funding Debt, Funding Cost  Well-balanced funding structure  Pursue stable and lengthened g maturities for each funding g option p Breakdown of Funding Sources Trend in Long-Term Debt Share and Funding Cost (As of June June.30 30 2013 / Excluding A

  19. Slide 19: VI. Funding: Bond Issuances / Maturity Ladder

    Ⅵ. Funding Bond Issuances/ Maturity Ladder  Expect to issue bonds within maturity amount Term Issued Amount Issued to Coupon T Spread (year) 【ORIX /Domestic Bond】 170 April 30, 2013 JPY 15 bil 5 Retail Investors 0.475% 29bp 171 April 30, 2013 JPY 20 bil 10 Retail Investors 1.126% 57bp 172 April 17,

  20. Slide 20: VI. Funding: Liquidity on-Hand

    Ⅵ. Funding Liquidity on-Hand  Continue to maintain ample liquidity on-hand Liquidity q y vs. Short-term Liabilities （JPY Bn） 1,500 350% 303% 289% 295% Available Commitment Line(1) 300% 204% 250% Cash and Cash Equivalents(1) 1,000 200% CP (2) 150% Current Redemptions（Bond, MTN）(2) 500 100% Liquidity

  21. Slide 21: VII. Summary

    Ⅶ. Summary A hi Achieved d 45b 45bn iin N Nett IIncome, 33% off the th ffullll year ttargett Segment assets are on an increasing trend Segment asset ROA increased to 2 2.9% 9% and ROE increased to 10.8% Copyright © 2013 ORIX Corporation All rights reserved. 20

  22. Slide 22: Appendix

    Appendix pp Copyright © 2013 ORIX Corporation All rights reserved. 21

  23. Slide 23: Appendix(1) Trend in Performance

    Appendix(1) Trend in Performance (JPY Bn) 12.3 13.3 13.3 1Q 14.3 1Q Total Revenue 970.4 1,065.1 250.7 278.9 Net Income *1 83.5 111.9 34.8 45.0 Segment Assets 6,002.1 6,202.7 6,132.9 6,266.3 Total Assets 8,332.8 8,439.7 8,177.5 8,218.9 Sh h ld ' E Shareholders' Equity it 1 380 7 1,380.7 1 643 6 1,643

  24. Slide 24: Appendix(2) Profit by Segment

    Appendix(2) Profit by Segment (JPY Bn) 12.3 13.3 13.3 1Q 14.3 1Q Change g Corporate Financial Services 21.5 24.8 6.1 4.9 81% Maintenance Leasing g 34.7 36.1 9.2 11.3 123% Real Estate 1.3 5.6 1.8 5.5 301% Investment and Operation 16.0 34.9 10.6 10.7 101% Retail 19.4 43.2 13.4 17.2 128% Overseas Busin

  25. Slide 25: Appendix(3) Assets by Segment & Region

    Appendix(3) Assets by Segment & Region 12.3 13.3 14.3 1Q (JPY Bn) Corporate Financial Services 898.8 892.7 873.2 Maintenance Leasing 537.8 599.1 620.9 Real Estate 1,369.2 1,111.8 1,063.5 Investment and Operation 471.1 416.6 444.9 Retail 1,738.5 1,971.0 1,999.2 Overseas Business 986.8 1,211.5 1,264.6

  26. Slide 26: Appendix(4) Funding and Liquidity

    Appendix(4) Funding and Liquidity (JPY Bn) 12.3 13.3 14.3 1Q CP 180.4 151.5 107.8 Borrowings from Financial Institutions 2,277.3 2,368.0 2,290.8 Bonds / MTN 1,393.0 1,283.0 1,313.1 Deposits 1,103.5 1,078.6 1,097.3 Subtotal 4,954.3 4,881.1 4,809.0 ABS, CMBS 874.7 679.8 497.5 Short-term Debt, Long-ter

  27. Slide 27: Appendix(5) Real Estate Portfolio

    Appendix(5) Real Estate Portfolio ■ Trend in Real Estate Segment Assets by Type (JPY Bn) 12.3 13.3 14.3 1Q Rental Property 876.3 754.4 733.1 Under Lease 705.9 603.4 607.0 Under Development 170.4 151.0 126.1 Condo Assets 87.3 55.4 52.6 NRL / Specified Bonds 205.4 113.4 ※ 86.2 Operating Facilities 153

  28. Slide 28: Appendix(6) Real Estate Portfolio

    Appendix(6) Real Estate Portfolio ■ Rental Property Assets by Type (13.6) (JPY Bn) Under Lease Under Property Type Total Balance NOI Yield Development Office Buildings 204.6 4.3% 60.1 264.7 Logistics Centers 29.6 5.8% 3.7 33.3 Commercial Facilities 139.7 6.5% 31.8 171.5 Rental Condos 117 0 117.0 4 4

  29. Slide 29: Appendix(7) Asset Quality

    Appendix(7) Asset Quality ■ Asset Quality (Adjusted **) (JPY Bn) 12.3 13.3 14.3 1Q Investment in Direct Financing Leases 728.0 826.4 866.9 90 D 90+Days P Past-Due t D DiDirectt Fi Financing i L Leases 17 4 17.4 15 8 15.8 15 8 15.8 Installment Loans 2,073.2 2,176.1 2,120.7 90+Days Past-Due Loans 8.6

  30. Slide 30: 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 transacti

  31. Slide 31: Appendix(9) Reconciliation Table of Non-GAAP Financial Measurement

    Appendix(9) Reconciliation Table of Non-GAAP Financial Measurement ( (JPY Bn)) Key Ratio 12.3 13.3 14.3 1Q Total Assets （ a） 8,332.8 8,439.7 8,218.9 Deduct: Payables under Securitized Leases, Loan Receivables and Investment in Securities 874 7 874.7 679 8 679.8 497 5 497.5 Adjusted Total Assets （ b）

  32. Slide 32: 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 24.5 34.7

  33. Slide 33: Reference Data

    Reference e e e ce Data ata Copyright © 2013 ORIX Corporation All rights reserved. 32

  34. Slide 34: Macro Economic Indicators

    Macro Economic Indicators National CPI (Ex Fresh Food) (YoY Change) (% Change) Source: Bloomberg Copyright © 2013 ORIX Corporation All rights reserved. 33 33

  35. Slide 35: Japanese Corporate Indices

    Japanese Corporate Indices Corporate Bankruptcies Tankan Corporate (Quarterly Basis) Diffusion Index (JPY Tn) (Cases) Source: Teikoku Databank, Ltd. Source: Bank of Japan Copyright © 2013 ORIX Corporation All rights reserved. 34

  36. Slide 36: Japanese Real Estate Indicators

    Japanese Real Estate Indicators Japan p TSE REIT Index Office Rental Rates (Yen per 3.3㎡) Source: Tokyo Stock Exchange Source: CBRE Copyright © 2013 ORIX Corporation All rights reserved. 35 35

  37. Slide 37: Domestic Lease Business Indicators

    Domestic Lease Business Indicators Private Equipment Investment New Car Sales (JPY Bn) (1,000 Units) Source: Japan Leasing Association Source: Japan Automotive Leasing Association Copyright © 2013 ORIX Corporation All rights reserved. 36 36

  38. Slide 38: Other Domestic Indicators

    Other Domestic Indicators Trend in Domestic Supply of Domestic Shipping Amount of Solar Cell Renewable Energy （Primary Energy Supply Basis） (Petajoule) (MW) Source: Agency for Natural Resources and Energy Source: Japan Photovoltaic Energy Association Copyright © 2013 ORIX Corporation All rights rese

  39. Slide 39: Other Domestic Indicators

    Other Domestic Indicators The number of M&A The number of the new listed companies (Cases) (Cases) Source: RECOF Corporation Source: Tokyo Stock Exchange Copyright © 2013 ORIX Corporation All rights reserved. 38 38

  40. Slide 40: Other Domestic Indicators

    Other Domestic Indicators Retail Life Insurance Consumer Finance Loans (JPY Bn) (JPY Bn) 25,000 20,000 15,000 10,000 5,000 0 2000 2002 2004 2006 2008 2010 Retail Life f Insurance Premiums Source: Japan Statistics Bureau Source: Japan Financial Services Agency Copyright © 2013 ORIX Corporation All ri

  41. Slide 41: 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

ORIX — Q1 FY2014 Earnings Presentation on 6ix