Slide 1: ORIX Corporation Consolidated Financial Results
ORIX Corporation Consolidated Financial Results For the Consolidated Fiscal Year Ended March 31, 2023 Makoto Inoue Member of the Board of Directors Representative Executive Officer President & CEO May 10, 2023 1 Company Name (TSE: 8591; NYSE: IX) Copyright © 2022 ORIX Corporation All rights reserved
Slide 2: Net income & ROE
Net income & ROE ✓ Net income* of 273.1 Bln JPY, ROE of 8.3% ✓ Posted steady Q4 net income of 61.7 Bln JPY, supported by COVID reopening Full fiscal year Quarterly 400 11.6% 13.0% 12.6% 10.3% 10.6% 10.9% 9.9% 350 8.6% 8.3% 7.5% (Bln JPY) 8.3% 100 6.8% 7.2% 7.5% 10.0% 5.9% 6.5% 6.8% 300 6.4% 8.0% 5.0
Slide 3: Breakdown of Segment Profits
Breakdown of Segment Profits 297.8 Bln JPY, down 13% YoY (-44.6 Bln JPY) FY23.3 Base profits Lower owing to COVID-19 related payout expenses in Insurance, but Real Estate, Aircraft and Segment profits Ships posted higher profits bolstered by reopening 381.3 Bln JPY -28% YoY 83.5 Bln JPY, down 56% Yo
Slide 4: Segment Profits
Segment Profits ✓ Segment profits up YoY when investment gain from Yayoi sale excluded ✓ Reopening-related boost and investment gains in Real Estate, Environment and Energy segments offset lower profits, primarily in Insurance, ORIX USA Segment Profits Breakdown 22.3 23.3 (Bln JPY) 23.3 YoY Highligh
Slide 5: Segment Assets
Segment Assets ✓ Assets increased due to changes in forex (impact +368.7 Bln JPY), acquisition of DHC, HEXEL Works ✓ Segment ROA of 2.2% Segment Assets Breakdown (Bln JPY) 23.3 *2 Vs. end 22.3 ROA Highlight Year End Overseas Corporate Financial Services and 1 1,514.1 -2.7 3.3% Mostly flat (32%) *1 M
Slide 6: Growth Momentum: FY22.3 to FY23.3
Growth Momentum: FY22.3 to FY23.3 ✓ Excluding investment gains from Yayoi sale, FY23.3 segment profits up 18.1 Bln JPY ✓ Growth momentum fueled by progress in reopening and expansion in focus areas (domestic PE, renewable energy) Segment profits (FY22.3 to FY23.3) 531.4 (Bln JPY) Yayoi PE Investment
Slide 7: FY24.3 Outlook & FY25.3 Targets
FY24.3 Outlook & FY25.3 Targets FY23.3 FY24.3 FY25.3 Results Outlook Targets (New) Net income 273.1 Bln JPY 330.0 Bln JPY 400.0 Bln JPY EPS 231 JPY 285 JPY 351 JPY ROE 8.3% 9.0% 10.4% Financial soundness A-rating equivalent A-rating equivalent A-rating equivalent Dividend payout ratio of 33% Full-ye
Slide 8: Changes in Operating Environment
Changes in Operating Environment Operating Environment as of May 2022 Operating Environment as of May 2023 ✓ Rate hikes in US and Europe, yen depreciation ✓ US bank failures, financial, real estate market instability ✓ Longer period of elevated rates, greater recession fears ✓ Russian invasion of Uk
Slide 9: Reopening Momentum
Reopening Momentum ✓ Concession, facility operations businesses to see sharp profit growth on rebound in inbound tourism, aircraft leasing also recovering ✓ Forecast record profit for Insurance segment in FY25.3 on lower COVID-19 related payout expenses and growth in insurance premiums Aircraft and
Slide 10: ORIX USA
ORIX USA ✓ Operationally, aim to control asset size and contribute to profits by shifting to third-party asset model, careful deal selection, and controlling asset balance ✓ Focus on minimizing credit losses with proactive risk management ✓ Securing appropriate lending/financing spreads based on dis
Slide 11: Segment Profits: FY23.3 – FY25.3
Segment Profits: FY23.3 – FY25.3 ✓ Domestic: Expect strong profit growth fueled by recovery in concession, facility operations businesses, earnings contributions from new PE investees, and exits from existing deals ✓ Overseas: Pursue basic policy of strengthening risk management. Growth fueled mainl
Slide 12: Capital Recycling – FY23.3 Track Record
Capital Recycling – FY23.3 Track Record ✓ With acquisition of DHC shares, new investments (470 Bln JPY, EV basis for private equity) exceeded exits (270 Bln JPY) in FY23.3 ✓ Profitability improved, thanks to continued capital recycling, controlling pace of growth in assets FY23.3 Major Deals Oversea
Slide 13: Rich Pipeline
Rich Pipeline ✓ Pipeline of promising projects of around 1.5 Tn JPY ✓ As number of deals increases, carefully select and execute those likely to generate high returns while controlling for risk Target Overview Investment amount • IT/information services, healthcare, BPO, logistics Domestic PE • Many
Slide 14: MICE-IR / Toshiba
MICE-IR / Toshiba MICE-IR ✓ On April 14, Japan’s Minister of Land, Infrastructure, Transport and Tourism approved Osaka IR KK’s (ORIX, US MGM Resorts International main shareholders) bid to develop an integrated resort ✓ Implementation agreement with Osaka City and Prefecture to be signed by mid-Jul
Slide 15: 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 16: ESG: Executive Compensation
ESG: Executive Compensation ✓ Considering adding quantitative measure of progress towards ESG efforts to compensation criteria for titled Executive Officers ✓ Raised employee wages in an aim to increase motivation Planned Compensation Criteria for Titled Executive Officers* Employee Wages Quantitati
Slide 17: Improving Share Price Valuation (Corporate Value)
Improving Share Price Valuation (Corporate Value) ✓ 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 directors) with investors ROE, EPS, P/B Trends 14% 1.2 X ROE (left) Average 10
Slide 18: Segment Performance
Segment Performance Copyright © 2023 ORIX Corporation All rights reserved. 18
Slide 19: Corporate Financial Services and Maintenance Leasing
Corporate Financial Services and Maintenance Leasing Segment profit: 73.2 Bln JPY YoY -166.6 Bln JPY (-69％) Segment assets: 1,514.1 Bln JPY YTD -2.7 Bln JPY (flat) ✓ Corporate Financial Services: Profits up YoY despite absence of valuation gains from investee booked in FY22.3 ✓ Corporate Financial S
Slide 20: 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 21: Real Estate
Real Estate Segment profit: 51.5 Bln JPY YoY +19.5 Bln JPY (+61%) Segment assets: 935.0 Bln JPY YTD +24.9 Bln JPY (+3%) ✓ Facility operations: Earnings improved dramatically on progress in ✓ Assets rose as development of new logistics centers and other reopening properties offset ongoing property sa
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* Leased logistics facilities, office DAIKYO buildings, and
Slide 23: PE Investment and Concession
PE Investment and Concession Segment profit: 2.7 Bln JPY YoY +14.4 Bln JPY (return to the black) Segment assets: 605.5 Bln JPY YTD +251.9 Bln JPY (+71%) ✓ PE investment: Returned to the black on full year basis despite booking costs ✓ Continued capital recycling focus, assets up on new investments i
Slide 24: 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 25: Environment and Energy
Environment and Energy Segment profit: 35.7 Bln JPY YoY +32.6 Bln JPY (+1,171%) Segment assets: 773.6 Bln JPY YTD +70.0 Bln JPY (+49.0 Bln JPY from forex) ✓ Profits up dramatically on partial sale of Ormat stake, higher prices in ✓ Assets increased due to changes in forex electricity spot market ove
Slide 26: Global Renewable Energy Portfolio
Global Renewable Energy Portfolio ✓ Total net owned operating capacity of 3.7 GW worldwide （as of end-Mar 2023） ✓ Total operating capacity (incl. assets in operation, under construction, and in development): Elawan 11GW, Greenko 18 GW Spain & other locations China Japan USA & other locations ・Elawan
Slide 27: Insurance
Insurance Segment profit: 38.0 Bln JPY YoY -15.3 Bln JPY (-29%) Segment assets: 2,050.4 Bln JPY YTD -21.7 JPY Bln (+58.4 Bln JPY from forex) ✓ Positive on embedded value basis, despite lower mark-to-market value of ✓ Excluding impact of higher COVID-19 related payout expenses, profits up YoY on grow
Slide 28: 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 29: Banking and Credit
Banking and Credit Segment profit: 37.6 Bln JPY YoY -3.9 Bln JPY (-9%) Segment assets: 2,698.7 Bln JPY YTD +11.6 Bln JPY (+0%) ✓ Banking: Financial revenues remained steady YoY, but profits fell as there ✓ Assets mostly flat were one-time profits recorded in the previous period ✓ Credit: Profits low
Slide 30: 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, will develop and sell financial products, such as securitized
Slide 31: Aircraft and Ships
Aircraft and Ships Segment profit: 18.6 Bln JPY YoY +20.9 Bln JPY (return to the black) Segment assets: 742.9 Bln JPY YTD +58.8 Bln JPY (+60.2 Bln JPY from forex) ✓ Aircraft: Profits up sharply on higher leasing and service revenues, ✓ Foreign currency-denominated assets were mostly flat, as aircraf
Slide 32: 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 51 0 15% 22% ✓ Fully-owned subsidiary Average age ✓ Mainly trading in second-hand 30% 6.6 6.1 years market 49% 51% ✓ A
Slide 33: ORIX USA
ORIX USA Segment profit: 49.0 Bln JPY YoY -26.2 Bln JPY (-35%) Segment assets: 1,462.1 Bln JPY YTD +97.9 Bln JPY (+125.0 Bln JPY from forex) ✓ Fewer private equity exits led to reduction in capital gains, real estate ✓ USD-denominated assets declined, but yen weakness led to increase in loan income
Slide 34: 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 $74.4 Bln) ✓ Operates a hybrid strategy, investing own principal capital while providing capital market and ass
Slide 35: ORIX Europe
ORIX Europe Segment profit: 40.7 Bln JPY YoY -8.7 Bln JPY (-18%) Segment assets: 417.9 Bln JPY YTD +16.1 Bln JPY (+26.5 Bln JPY from forex) ✓ Profits fell YoY owing to lower AUM caused by deteriorating markets ✓ Assets increased due to changes in forex Segment profit Segment assets・ROA AUM Full-year
Slide 36: 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 An ESG pioneer since the mid-1990s, Robeco is Major Subsidiaries Head Office Primary Busine
Slide 37: 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 38: Asia and Australia
Asia and Australia Segment profit: 34.3 Bln JPY YoY -16.8 Bln JPY (-33%) Segment assets: 1,395.1 Bln JPY YTD +89.0 Bln JPY (+49.7 Bln JPY from forex) ✓ Reopening-fueled increase in new business deal executions in Asia led to ✓ Assets up as new business grew in Asian markets (including South higher i
Slide 39: 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 40: Appendix
Appendix Copyright © 2023 ORIX Corporation All rights reserved. 40
Slide 41: 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) *2 273.1Bln JPY 8.3% 9.3％ 3.7GW Enhanced shareholder returns Well-balanced earnings*1 Top-class inve
Slide 42: 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 Bln JPY COVID-19 crisis Bln JPY 350 300 250 FY2009.3 Global financial crisis FY2002.3 200 Burst of IT bubble 150
Slide 43: 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. 43
Slide 44: 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 2.1X, CAGR of 9.3% (FY23.3 vs FY13.3) ✓ Also strengthened financial base, reducing D/E ratio from 2.7X to 1.7
Slide 45: 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 46: Reopening: Key Indicators
Reopening: Key Indicators Business Indicator Narrow body aircraft lease rates (vs. 2H 2019, Source: IBA) 120% 737MAX8(Age0) A320Neo(Age0) 110% Aircraft and 100% Ships 90% (Aircraft leasing) 80% 70% 60% H1-2020 H2-2020 H1-2021 H2-2021 H1-2022 H2-2022 H1-2023 RevPAR of ORIX facilities (vs2019) Inns Ho
Slide 47: 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% 93% 91% 91% 4.5 91% 88% 88% 8.0 4.0 86% 85% (Tln JPY) 7.0 7.1 3.4 6.8 3.
Slide 48: 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 Deposits Foreign currency funding costs 28% Yen funding costs FY23.3 Borrowings from financial 3.57% 8.0 Tln JPY 3.27% 3.28% instit
Slide 49: 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 Interest rates End-Mar 2023 ◼ Japanese Yen & US Dollar = Negligible 3.8x S&P A- (Negative) ◼ Euro = -2 to -3 Bln JPY 3.4x 11.5% *Sensitivity of pre-tax profits assum
Slide 50: 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 Share Buyback and Total Return Ratio 78% 50% 200 69% (JPY) （円） 130 (Bln JPY) 49% 120 55% 59% 110 47%
Slide 51: 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 52: 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 52 Company Name Copyri