Fuyo General Lease Co., Ltd. · TSE:8424
Fuyo General Lease — FY2019 Earnings Presentation
41 slides from Fuyo General Lease's earnings presentation, May 13, 2020
Slide 1: Financial Results Briefing for FY2019
Financial Results Briefing for FY2019 IR Presentation May 13, 2020 FUYO GENERAL LEASE CO., LTD. 1
Slide 2: Agenda
Agenda 1. Overview of consolidated operating results 2. Overview of business activities 3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan 4. Earnings forecast and dividend policy 5. Appendix Earnings forecasts and other forward-looking statements provided in this material are base
Slide 3: FY2019 results
1. Overview of consolidated operating results (1) FY2019 results ・In this fiscal year, total revenues and profit records were rewritten (Ordinary Profit for 3 consecutive terms, Net Profit for 5 consecutive terms) thanks to the accumulation of assets in strategic areas, centered on real estate and a
Slide 4: Total revenues and ordinary profit
1. Overview of consolidated operating results (2) Total revenues (3) Ordinary profit and profit attributable to owners of parent Revenue continued to increase largely due to a Ordinary profit and profit attributable to owners of growth in BPO services. parent records were rewritten in consecutive ye
Slide 5: Factors causing the increase in ordinary profit
1. Overview of consolidated operating results (4) Factors causing the increase in ordinary profit ・In this fiscal year, profit before interest expenses grew significantly thanks to strategic areas, centered on real estate and aircraft, as well as new business domains. ・Ordinary profit grew significa
Slide 6: Profit before interest expenses
1. Overview of consolidated operating results (5) Profit before interest expenses ・Growth in profit in the Lease segment increased thanks to a progress in the accumulation of assets in strategic areas. ・The other segments centered on BPO services also significantly increased, causing a large growth
Slide 7: Changes in funding
1. Overview of consolidated operating results (6) Changes in funding ・Rises in interest expenses and funding costs due to an increase in procurement of foreign currency were within plan range. ・There was no major change in funding costs in yen. (¥100 million) (¥100 million) Interest expenses, Fundin
Slide 8: Changes in costs; net assets and shareholders' equity ratio
1. Overview of consolidated operating results (7) Changes in costs (8) Changes in net assets and the shareholders’ equity ratio ・Despite a rise in personnel/equipment expenses stemming ・Net assets have steadily accumulated. from an increase in consolidated subsidiaries, the OHR, which indicates busi
Slide 9: Newly executed contract volume
2. Overview of business activities (1) Newly executed contract volume ・With a steady growth in real estate leases, overall newly executed contract volume in leases increased year on year. ・Accretive’s newly executed contract volume grew in both factoring businesses for trade receivables and medical
Slide 10: Operating assets, ROA
2. Overview of business activities (2) Operating assets, ROA ・Operating leases have steadily accumulated centered on real estate. ・In Financing, Other, real estate financing is performing with strong results. ・ROA continues to improve (+0.30pt compared to 17/3) with the steady progress of the medium
Slide 11: Medium-Term Management Plan: Frontier Expansion 2021
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Medium-Term Management Plan Ｆｒｏｎｔｉｅｒ Ｅｘｐａｎｓｉｏｎ 2021 “Go Where No One Has Gone Before” Aiming to be a corporate group that moves into uncharted businesses and continues to expand the frontier 11
Slide 12: Goals and three core strategies
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (1) Goals (target performance indicators) and three core strategies Target performance indicators Target value Interim goal FY2019 Item FY2021 FY2019 results ¥2,300.0- Operating assets ¥2,500.0 billion ¥2,400.0 billion ¥2,384.0 bil
Slide 13: Position of each business
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (2) Position of each business Disruptive Innovations Sustaining Innovations Transformation Zone Performance Zone Revenue Performance (Grow new businesses) Payout period: (Achieve results in existing businesses) 2-3 years Strategic
Slide 14: Progress: Operating assets in strategic areas
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (3) Progress on the Medium-Term Management Plan: Operating assets ・Balances of operating assets of high-profitability strategic areas centered on real estate and aircraft have steadily increased. ・The share of entire operating asse
Slide 15: Progress: Ordinary profit ratio by business areas
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (4) Progress on the Medium-Term Management Plan: Changes in the ordinary profit ratio by business areas During 3 years of the medium-term management plan, in addition to increase in operating assets in strategic areas, the expansio
Slide 16: Transitions in contract spread
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (5) Progress on the Medium-Term Management Plan: <Non-consolidated> Transitions in contract spread(*1) (Ref) • General leases (*2) improvement trend continues (*2) General leases: leases excluding real estate • Maintained high leve
Slide 17: Real estate (i): Operating asset target revised upward
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (6) Real estate (i) Areas Targets for the operating asset balance was revised upward First half of the plan (results) The balance exceeded the target due to expansion of alliance (¥100 million) (％) partners and business p
Slide 18: Real estate (ii): Bridge contracts strong
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (6) Real estate (ii) Areas Bridge contracts have shown strong performance due to an increase in alliance partners Breakdown of real estate leases by building application Based on operating assets • Percentages are approxi
Slide 19: Aircraft
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (7) Aircraft Areas The number and balance of aircraft owned grew steadily, and the quality of ROA improved. (¥100 million) Target of (％) 6.0 First half of the plan (results) Aircraft leasing operating assets and ROA the P
Slide 20: Overseas
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (8) Overseas Areas Strengthen cooperation in strategic areas (Overseas = Business of overseas subsidiaries, excluding aircraft leasing) (¥100 million) ％ First half of the plan (results) Target of 4.0 Overseas business ope
Slide 21: Energy/environment (i): Solar power generation business
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (9) Energy/environment (i) Areas Solar power generation business ：For generation capacity, target of the plan was achieved ahead of schedule (¥100 million) (％) Operating assets and ROA of the solar power 20.0 Agribusiness
Slide 22: Energy/environment (ii): New fields for climate change
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic Frontiers (9) Energy/environment (ii) Areas Efforts for new fields in response to climate change issues Green electricity supply services Storage battery Finance program (PPA services) Framework to set up solar power As a
Slide 23: Medical/social welfare (i): Broad solutions under platform
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (10) Medical/social welfare (i) Areas Group Provide broad solutions that meet customer needs under the platform scheme (¥100 million) First half of the plan (results) Operating asset balance in medical/social welfare (The
Slide 24: Medical/social welfare (ii): Differentiation from upper stream
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (10) Medical/social welfare (ii) Areas Group Promote differentiation through approach from “upper stream” ①Enrichment of information channels and approach tools • Joined partner corporate membership of Medical Management
Slide 25: BPO services (i): NOC cooperation
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (11) BPO services (i) Areas Frontiers Group Fully leverage NOC cooperation to cater to broad BPO needs BPO service companies Consolidated ACR Accretive Co., subsidiary since Ltd. January 2017 management plan Consolidated
Slide 26: BPO services (ii): Expand BPO needs amid labor shortage
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (11) BPO services (ii) Areas Frontiers Group Expand BPO needs by heightened of labor shortage No. of INVOICE Broad BPO services of NOC & INVOICE contracts through Group collaboration*１ 277 companies Core Share business Cu
Slide 27: Mobility Business (i): Redefining auto leasing
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (12) Mobility Business (i) Areas Frontiers Group Redefining auto leasing business (core field) into mobility business with growth potential Strategic Support through offering broad solutions to solve problems of vision ve
Slide 28: Mobility Business (ii): Yamato Lease consolidated subsidiary
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (12) Mobility Business (ii) Areas Frontiers Group Made Yamato Lease a consolidated subsidiary (April 2020) ■Overview of Yamato Lease ■ Earnings trend (¥100 million) Establishment 1977 FY2019 FY2016 FY2017 FY2018 （1H） Fuyo
Slide 29: Main impact expected from COVID-19
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (13) Main impact expected from COVID-19 Group- ・Extra costs arising from primary lease expiry ownership ・Airlines ask to defer on leases ⇒ Lower debtor ratings Higher leases （*Transaction also reliant on value of property, so impac
Slide 30: FY2020 consolidated earnings forecast
4. Earnings forecast and dividend policy (1) FY2020 consolidated earnings forecast (¥100 million) FY2019 FY2020 results forecast Total revenues 7,123 7,200 Operating profit 414 420 Ordinary profit 440 450 Profit attributable to owners of parent 262 270 Basic earnings per share ¥871.95 ¥900.84 The Fo
Slide 31: Dividend policy
4. Earnings forecast and dividend policy (2) Dividend policy [FY2019] Year beginning forecast (¥200) dividend increase of ¥5 for a total dividend of ¥205. Dividend payout ratio is 23.5% [FY2020] Forecast previous FY dividend increase of ¥15 for a total dividend of ¥220, a dividend payout of 24.4% (¥
Slide 32: Key topics (i)
5. Appendix (1) Key topics (i) Real estate Acquired trust beneficiary rights of Nasu Garden Outlet jointly with Sojitz Commerce Development Corporation Q1 Energy/ Announced agreement with proposals of the Task Force on Climate-related environment Financial Disclosures (TCFD) Energy/ New Finance Prog
Slide 33: Key topics (ii)
5. Appendix (1) Key topics (ii) Other Rating and Investment Information, Inc. (R&I) changed the Company’s rating outlook to positive Q3 Other Japan Credit Rating Agency, Ltd. (JCR) upgraded the Company’s rating to A+ BPO Made MerryBiz Inc. an equity-method affiliate Mobility Made Yamato Lease Co., L
Slide 34: Summary of consolidated operating results
5. Appendix (2) Summary of consolidated operating results (¥100 million) YoY FY2015 FY2016 FY2017 FY2018 FY2019 Change Total revenues 4,938 5,072 5,903 6,181 7,123 +942 Total costs 4,426 4,519 5,298 5,514 6,360 +845 (Interest expenses) [69] [71] [73] [86] [94] [+8] Gross profit 512 553 605 667 763 +
Slide 35: Segment results (consolidated)
5. Appendix (3) Segment results (consolidated) (¥100 million) Leases Installment sales Leases and Installment sales total YoY YoY YoY YoY YoY YoY FY2018 FY2019 Change Change FY2018 FY2019 Change Change FY2018 FY2019 Change Change (amount) (%) (amount) (%) (amount) (%) Total revenues 4,796 4,946 +151
Slide 36: Newly executed contract volume
5. Appendix (4) Newly executed contract volume (¥100 million) YoY Change FY2015 FY2016 FY2017 FY2018 FY2019 (amount) YoY change (%) Leases 4,536 5,234 5,636 5,300 5,445 145 +2.7% Finance leases [3,644] [3,958] [4,052] [3,724] [3,654] [-69] [-1.9%] Operating leases [893] [1,276] [1,584] [1,576] [1,79
Slide 37: Newly executed lease contract volume by equipment type
5. Appendix (5) Newly executed lease contract volume (by type of equipment) (¥100 million) Segment FY2017 FY2018 FY2019 YoY change IT & office equipment 1,839 1,897 2,072 +176 Industrial machinery 384 414 442 +28 Civil engineering and 96 94 102 +8 construction machinery Transportation equipment 594
Slide 38: Operating assets
5. Appendix (6) Operating assets (¥100 million) YoY Change YoY change FY2015 FY2016 FY2017 FY2018 FY2019 (amount) (%) Leases 12,440 13,698 14,744 15,648 16,136 488 +3.1% Finance leases [10,060] [10,486] [10,987] [10,835] [11,068] [+233] [+2.2%] Operating leases [2,380] [3,212] [3,757] [4,813] [5,068
Slide 39: Leases and Financing: Asset balance and gross margin
5. Appendix (7) Leases and Financing: Asset balance and gross margin on assets Leases: Asset balance and gross margin on assets Financing: Asset balance and gross margin on assets (¥100 million) (%) (¥100 million) (%) 7,000 5.0 18,000 5 15,648 16,136 6,656 16,000 6,000 14,744 4.0 13,698 4 5,737 14,0
Slide 40: Non-consolidated and principal consolidated companies' results
5. Appendix (8) Overview of non-consolidated results and principal consolidated companies’ results (¥100 million) Fuyo General Lease Co., Ltd. Fuyo Auto Lease Co., Ltd. Sharp Finance Corporation (non-consolidated) (ownership ratio: 100%) (ownership ratio: 65%) YoY YoY YoY FY2018 FY2019 change FY2018
Slide 41: Go Where No One Has Gone Before
“Go Where No One Has Gone Before” FUYO GENERAL LEASE CO., LTD. 41