Slide 1: ORIX Corporation First Quarter Consolidated Financial Results
ORIX Corporation First Quarter Consolidated Financial Results For the Three-Month Period Ended June 30, 2023 Hitomaro Yano Executive Officer Corporate Function Unit Responsible for Treasury, Accounting, Corporate Planning, Investor Relations and Sustainability August 4, 2023 Copyright © 2023 ORIX Co
Slide 2: Executive Summary
Executive Summary (1) Q1 Net Income of 63.0 Bln JPY (up 2% YoY), annualized ROE of 7.0% Earnings solid, mainly in Corporate Financial Services and Maintenance Leasing, PE Investment and Concession, Insurance segments Q1 base profit up 12% YoY, surpassed pre-COVID levels (2) Reopening Momentum Accele
Slide 3: Net Income & ROE
Net Income & ROE ✓ Net income* of 63.0 Bln JPY, annualized ROE of 7.0% *Net income refers to Net Income Attributable to ORIX Corporation Shareholders ✓ Net income rose by 1.0 Bln JPY YoY (+2%) Full fiscal year (Bln JPY) Quarterly （Bln JPY） 400 11.6% 13.0% 13.1% 10.3% 10.0% 10.6% 10.2% 8.9% 350 Net i
Slide 4: Breakdown of Segment Profits
Breakdown of Segment Profits 82.2 Bln JPY, up 12% YoY (+8.5 Bln JPY) FY24.3 Q1 Segment profits Base profits Higher owing to strong performance in Real Estate bolstered by progress in reopening, growth 91.5 Bln JPY in investment income for Insurance +6% YoY Investment 9.3 Bln JPY, down 27% YoY (-3.5
Slide 5: Reopening Momentum Accelerates
Reopening Momentum Accelerates ✓ Concession business set to turn profitable in FY24.3 on sustained recovery in international passengers ✓ Facility operations posted first profitable Q1 since start of pandemic on higher RevPAR fueled by inbound tourism ✓ Aircraft leasing continues to recover post-COV
Slide 6: Reopening – Key Indicators
Reopening – Key Indicators ✓ Aircraft lease rates (global average) and RevPAR (ORIX hotels/inns) have surpassed pre-COVID levels, continue to rise ✓ Kansai International Airport international route passengers recovered to 63% of 2019 level (June 2023) Business Indicator Narrow body aircraft lease ra
Slide 7: Corporate Financial Services and Maintenance Leasing
Corporate Financial Services and Maintenance Leasing Segment Profits : 19.9 Bln JPY YoY+3.3 Bln JPY （+20%） Segment Assets: 1,508.1 Bln JPY YTD -6.0 Bln JPY (flat) ✓ Corporate Financial Services: Profits up on growth in fee business revenue ✓ Corporate Financial Services: Continue to be selective on
Slide 8: Real Estate
Real Estate Segment Profits : 10.0 Bln JPY YoY- 2.0 Bln JPY （-17％） Segment Assets : 945.4 Bln JPY YTD +10.4 Bln JPY (+1%) ✓ RE Investment and Facilities Operation: Profits down on absence of investment gain on ✓ Assets rose as development of new logistics centers and other properties offset sale of
Slide 9: PE Investment and Concession
PE Investment and Concession Segment Profits : 5.7 Bln JPY YoY+3.4 JPY Bln (＋１５１％) Segment Assets : 613.4 Bln JPY YTD +7.9 Bln JPY (+1%) ✓ PE investment: Profits up on expiry of Kobayashi Kako-related costs, contributions from ✓ Assets mostly flat new investees acquired in FY23.3 (such as DHC) ✓ Con
Slide 10: Environment and Energy
Environment and Energy Segment Profits : 3.0 Bln JPY YoY -0.5 Bln JPY （-14％） Segment Assets : 789.6 Bln JPY YTD +16.0 Bln JPY (+10.7 Bln JPY from fx) ✓ Domestic: Profits down owing to output caps at solar generation plants ✓ Assets increased due to changes in forex ✓ Overseas: Profits up YoY as Gree
Slide 11: Insurance
Insurance Segment Profits : 19.2 Bln JPY YoY +7.8 Bln JPY （＋68％） Segment Assets: 2,222.3 Bln JPY YTD +171.8 Bln JPY (+56.0 Bln JPY from fx) ✓ Profits higher YoY on growth in investment income, lower COVID-19 payout ✓ Assets grew due to changes in forex, increase in investment securities related expe
Slide 12: Banking and Credit
Banking and Credit Segment Profits : 8.2 Bln JPY YoY +1.0 Bln JPY （+13％） Segment Assets : 2,712.3 Bln JPY YTD +13.5 Bln JPY (+1%) ✓ Banking: Profits rose, bolstered by growth in financial revenues, trust fees ✓ Assets broadly flat ✓ Credit: Lower QoQ owing to absence of FY23.3 Q4 reversal from CECL*
Slide 13: Aircraft and Ships
Aircraft and Ships Segment Profits : 3.6 Bln JPY YoY -1.8 Bln JPY （-33%） Segment Assets : 847.8 Bln JPY YTD +104.9 Bln JPY (+62.5 Bln JPY from fx) ✓ Ships profits down YoY on absence of year-earlier gains on timely sale of owned vessels. ✓ Assets up, aided by aircraft acquisitions, changes in forex
Slide 14: ORIX USA
ORIX USA Segment Profits : 9.7 Bln JPY YoY+3.7Bln JPY （+61%） Segment Assets : 1,565.6 Bln JPY YTD +103.5 Bln JPY (+125.3 Bln JPY from fx) ✓ Profits higher YoY on stable financial revenues posted in credit business, ✓ Assets higher owing to yen depreciation, although USD denominated investment gains
Slide 15: ORIX Europe
ORIX Europe Segment Profits : 4.2 Bln JPY YoY-5.1 Bln JPY （-55%） Segment Assets : 455.6 Bln JPY YTD +37.7 Bln JPY (+34.1 Bln JPY from fx) ✓ Profits lower on higher EUR funding costs (at ORIX Group level), despite ✓ Assets rose, mainly due to changes in forex recovery in AUM Segment Profits Segment A
Slide 16: Asia and Australia
Asia and Australia Segment Profits : 8.0 Bn JPY YoY -4.7 Bln JPY（-37%） Segment Assets : 1,515.4 Bln JPY YTD +120.3 Bln JPY (+82.0 Bln JPY from fx) ✓ Decrease due to the absence of gain on sale of an affiliate in the same period ✓ Increased due to favorable new lease executions in various countries,
Slide 17: Progress vs. FY24.3 Outlook
Progress vs. FY24.3 Outlook ✓ Domestic: Profits in both financial/non-financial categories up YoY. ✓ Overseas: Profits lower YoY on reduced investment gains during this Q1 and the impact of higher interest rates (Full-year forecast: USD/JPY=130, EUR/JPY=140） FY23.3* FY24.3 （Bln JPY） 1Q Actual Full-F
Slide 18: Macroeconomic Climate
Macroeconomic Climate ✓ Higher EUR interest rates a minor drag on earnings, working to reduce interest rate sensitivity ✓ Weaker yen, low interest rates a tailwind for exits in Japanese assets, such as real estate ✓ Addressing inflation by passing along higher costs in service fees Aiming to leverag
Slide 19: Capital Recycling
Capital Recycling ✓ Strong desire to invest in Japanese assets (real estate, PE) from overseas investors, providing opportunities for profitable exits ✓ Environment and Energy: Elawan aims to exit some of its renewable energy generation plants from FY24.3 ✓ ORIX USA: While navigating current uncerta
Slide 20: Segment Information
Segment Information Copyright © 2023 ORIX Corporation All rights reserved. 20
Slide 21: Corporate Financial Services and Maintenance Leasing - About the Business
Corporate Financial Services and Maintenance Leasing - About the Business Main business: Finance and fee business; leasing and rental of automobiles, electronic measuring instruments and ICT-related equipment Corporate Financial Services Auto Rentec World leader in vehicles under Core platform for c
Slide 22: Real Estate – About the Business
Real Estate – About the Business Main Business: Real estate development, rental and management; facility operation; real estate asset management Segment Assets Unrealized gains on rental （as of end-March 2023） Segment Asset Trends properties* DAIKYO Leased logistics facilities, condominiums, office
Slide 23: PE Investment and Concession – About the Business
PE Investment and Concession – About the Business ✓ Currently invested in 18 companies (as of end-March 2023); aim to develop new business segments for ORIX Investment Track Record Investee Companies IT Services Initial investment Business Leveraging our broad network and Management Koike Co., Ltd.
Slide 24: Global Renewable Energy Portfolio
Global Renewable Energy Portfolio ✓ Total net owned operating capacity of 3.9 GW worldwide （as of end-June 2023） ✓ Total operating capacity (incl. assets in operation, under construction, and in development): Elawan 10 GW, Greenko 18 GW Spain & other locations China Japan USA & other locations ・Elaw
Slide 25: Life Insurance – About the Business
Life Insurance – About the Business ✓ Omni-channel strategy (including online/mail order) has allowed ORIX Life to post growth in policies well above industry average ✓ Shift from mix dominated by third-sector products (such as medical insurance CURE) to a more well-balanced portfolio with introduct
Slide 26: Banking – About the Business
Banking – About the Business ✓ In addition to its mainstay real-estate investment loan business, ORIX Bank is strengthening its financing business to industries which support a sustainable society ✓ By utilizing its trust banking license, ORIX Bank will develop and sell financial products, such as s
Slide 27: Aircraft and Ships – About the Business
Aircraft and Ships – About the Business GLOBALLY NARROWBODY OEM DIVERSE WEIGHTING BREAKDOWN Owned Committed ORIX （NBV） （number of aircraft） （number of aircraft） fleet fleet Aviation 57 0 ✓ Fully-owned subsidiary 12% 19% 25% Average age ✓ Mainly trading in second-hand market 6.6 5.2 years 46% ✓ Arran
Slide 28: ORIX USA – About the Business
ORIX USA – About the Business ✓ A provider of capital and financing solutions to middle market companies in USA, targets growth in asset management for three key verticals (total AUM / AUA $74.7 Bln) ✓ Operates a hybrid strategy, investing own principal capital while providing capital market and ass
Slide 29: ORIX Europe – About the Business
ORIX Europe – About the Business ✓ Main Business: Equities, fixed income, renewable energy and other fund management ✓ Actively promoting ESG investing, especially through Robeco and Gravis Capital Management Established Major Subsidiaries Head Office Primary Business (Acquired) An ESG pioneer since
Slide 30: ORIX Group – Asset Management Business
ORIX Group – Asset Management Business ✓ Expansion in asset management business centered on Europe, US supports base profit growth ✓ Focus on management of diversified asset base, in addition to equities, fixed income, and alternative assets (Top domestic manager of renewable energy, aircraft, condo
Slide 31: Asia and Australia – About the Business
Asia and Australia – About the Business ✓ Main Business: Leasing, lending, and investment businesses in Asia and Australia ✓ Leasing: Primarily industrial equipment and auto leasing across Asia and Australia. Investments: PE investments mainly in Greater China and South Korea Segment Assets by Busin
Slide 32: Appendices
Appendices Copyright © 2023 ORIX Corporation All rights reserved. 32
Slide 33: ORIX by the Numbers
ORIX by the Numbers Strong profitability High growth Leading renewable energy 10-year net income CAGR provider in Japan Net income ROE (FY13.3-FY23.3) Renewable energy generating Capacity (worldwide) *2 290.3 Bln JPY 8.5% 10％ 3.9GW Enhanced shareholder returns Well-balanced earnings*1 Top-class inve
Slide 34: About ORIX: Proven Track Record of Profitability
About ORIX Proven Track Record of Profitability ✓ Excluding founding year, ORIX has been profitable for 58 straight years Net Income Attributable to ORIX Corporation Shareholders FY2021.3 COVID-19 crisis Bln JPY 350 300 FY2009.3 250 Global financial crisis FY2002.3 Burst of IT bubble 200 FY1998.3 15
Slide 35: About ORIX: Expertise in Business and Collective Capabilities
About ORIX Expertise in Business and Collective Capabilities of the Group ✓ ORIX will continue to enhance our expertise in finance and tangible assets as we synergistically expand our businesses Copyright © 2023 ORIX Corporation All rights reserved. 35
Slide 36: FY24.3 Outlook & FY25.3 Targets
FY24.3 Outlook & FY25.3 Targets (From FY23.3 results presentation announced in May 2023 with some updates) FY23.3 FY24.3 FY25.3 Results Outlook Targets (New) Net income 290.3 Bln JPY 330.0 Bln JPY 400.0 Bln JPY EPS 246 JPY 285 JPY 351 JPY ROE 8.5% 9.0% 10.4% Financial soundness A-rating equivalent A
Slide 37: Segment Profits
Segment Profits Segment Profits Breakdown （Bln JPY） 23.3 24.3 QoQ YoY Overseas 1Q 2Q 3Q 4Q 1Q Corporate Financial Services （28%）*1 1 16.6 20.4 21.2 16.9 19.9 +3.0 +3.3 9% and Maintenance Leasing 5% 22% 2 Real Estate 11.9 7.0 5.6 27.0 10.0 -17.1 -2.0 3 PE Investment and Concession 2.3 1.8 2.8 -4.0 5.
Slide 38: Segment Assets
Segment Assets Segment Assets Breakdown （Bln JPY） 23.3 24.3 vs. end ROA Overseas 1Q 2Q 3Q 4Q 1Q 23.3 4Q （33%）*1 Corporate Financial Services 1 1,486.1 1,476.2 1,515.4 1,514.1 1,508.1 -6.0 3.6% 12% 11% and Maintenance Leasing 2 Real Estate 904.2 907.9 946.1 935.0 945.4 +10.4 2.9% 3% 7% 3 PE Investmen
Slide 39: Capital Recycling - Profit Growth
Capital Recycling - Profit Growth (From FY23.3 H1 results presentation announced in Nov 2022 with some updates) ✓ Accelerated capital recycling model led to company-wide net income growth of 2.6X, CAGR of 10% (FY23.3 vs FY13.3) ✓ Also strengthened financial base, reducing D/E ratio from 2.7X to 1.6X
Slide 40: Investment Gains and Major Breakdown
Investment Gains and Major Breakdown (JPY) Segment FY18.3 FY19.3 FY20.3 FY21.3 FY22.3 FY23.3 42.9Bln 56.5Bln 53.6Bln 16.9Bln 21.4Bln 29.5Bln Real Estate ORIX Golf Mixed-use property ORIX Living Logistics centers Management PE Investment and 26.9Bln 0.3Bln 16.4Bln -0.7Bln -19.1Bln 2.6Bln Concession A
Slide 41: Financials Funding Structure / Employed Capital Ratio
Financials Funding Structure / Employed Capital Ratio ✓ Diversified funding methods and maintained a high long-term debt ratio Funding Structure and Long-term Debt Ratio*1 Shareholders’ Equity / Employed Capital Ratio*2 93% 93% 91% 91% 90% 93% (Tln JPY) 8.0 8.1 4.5 91% 88% 7.0 7.1 4.0 (Tln JPY) 85%
Slide 42: Financials Funding Structure
Financials Funding Structure ✓ Diversified funding. Controlled funding costs while maintaining a high long-term debt ratio Breakdown of Funding Trends in Fundings Costs Foreign currency funding costs JPY funding costs Deposits 28% 4.86% Borrowings from FY24.3 Q1 financial institutions 3.57% 8.1 Tln
Slide 43: D/E Ratio, Credit Ratings, Interest Rate & Forex Sensitivity
Financials D/E Ratio, Credit Ratings, Interest Rate & Forex Sensitivity D/E Ratio・ROE Credit Ratings Interest Rate & Forex Sensitivity D/E ratio End-June 2023 Interest rates (excl. deposits) 3.8X S&P A- (WatchNegative) ◼ Japanese Yen & US Dollar = Negligible 3.4X 11.7% 12.1% 11.5% 11.3% 11.6% Moody’
Slide 44: ESG: Ratings
ESG: Ratings ✓ As of March 2023, ORIX now included in all six ESG indices (for Japanese stocks) adopted by Government Pension Investment Fund (GPIF) ✓ ORIX’s Board of Directors now has a majority of outside directors, making progress towards achievement of other key goals, including GHG emissions re
Slide 45: Improving Share Price Valuation (Corporate Value)
(From FY23.3 results presentation announced in May 2023 Improving Share Price Valuation (Corporate Value) with some updates) ✓ Average ROE for past decade is 10.4%, first aim is to improve valuation to P/B of 1.0X or higher ✓ Promoting proactive communication by top management (including outside dir
Slide 46: Shareholder Returns
Shareholder Returns ✓ Maintain basic policy of “1/3 of net income allocated to dividends, 1/3 to new investments, and 1/3 to retained earnings and share buybacks” Dividend per Share and Payout Ratio (JPY) Share Buyback and Total Return Ratio （Bln JPY） 78% 50% 200 69% 130 Total return ratio 59% 120 5
Slide 47: Disclaimer
Disclaimer ◼ These materials have been prepared by ORIX Corporation (“ORIX” or the “Company”) solely for your information 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 representations,
Slide 48: ORIX Corporation Investor Relations
For the current IR materials and archives of past financial data, please access our website. IR Section https://www.orix.co.jp/grp/en/ir/ IR Library https://www.orix.co.jp/grp/en/ir/library/ ORIX Corporation Investor Relations and Sustainability Department Tel: +81-3-3435-3121 48 Company Name Copyri