Fuyo General Lease Co., Ltd. · TSE:8424
Fuyo General Lease — 1H FY2018 Earnings Presentation
33 slides from Fuyo General Lease's earnings presentation, Nov 12, 2018
Slide 1: Financial Results Briefing for the 1st Half of FY2018
Financial Results Briefing for the 1st Half of FY2018 IR Presentation November 12, 2018 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. Operating results forecast and dividend policy 5. Appendix Earnings forecasts and other forward-looking statements provided in this material
Slide 3: Overview of consolidated operating results: 1H FY2018 results
1. Overview of consolidated operating results (1) 1H FY2018 results ・Reached new record-high levels of ordinary profit and profit attributable to owners of parent due to progress in strategic areas of the medium-term management plan. ・Newly executed contract volume and operating assets fell in absen
Slide 4: Total revenues; ordinary profit and profit attributable to owners of parent
1. Overview of consolidated operating results (3) Ordinary profit and profit (2) Total revenues attributable to owners of parent Despite a decrease in large overseas projects, total Due to growth in the non-asset business, both ordinary profit revenues remained near our previous high. and profit att
Slide 5: Factors causing the increase in ordinary profit
1. Overview of consolidated operating results (4) Factors causing the increase in ordinary profit ・Profit before interest expenses grew steadily. Non-operating profit was up, mainly due to an increase in the value of holdings in equity-method affiliates. ・Ordinary profit rose, absorbing cost increas
Slide 6: Profit before interest expenses
1. Overview of consolidated operating results (5) Profit before interest expenses Leases: Asset balance and gross margin on assets ・ The gross margin on assets in the Leases business stopped declining, due to the switching out of stock. (Billions of yen) 1,474.4 (%) 1,369.8 1,421.0 5 ・ Profit in the
Slide 7: Changes in funding
1. Overview of consolidated operating results (6) Changes in funding ・ Foreign-currency funding increased, in line with expansion of the aircraft business. ・ The rises in interest expenses and funding costs, due to an increase in external funding, were within our range of expectations. (Billions of
Slide 8: Changes in costs; net assets and equity ratio
1. Overview of consolidated operating results (7) Changes in costs (8) Changes in net assets and the equity ratio ・The rise in credit-related costs was due mainly to a Net assets and the equity ratio were both stable as a decrease in the reversal gains experienced in FY2017. result of ongoing profit
Slide 9: Newly executed contract volume
2. Overview of business activities (1) Newly executed contract volume ・The Financing and Other segments showed strength due to higher volume in the factoring business, centered on Accretive. ・The Leases business was affected significantly by a decrease in large projects, but we expect the volume of
Slide 10: Operating assets and ROA
2. Overview of business activities (2) Operating assets and ROA ・ROA improved due to a rise in non-asset earnings. ・Operating assets fell in the first half, mainly due to exits from large bridge projects. In the second half, we expect to more than compensate for this decrease through the accumulatio
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 “Going Where No One Has Gone Before” Aiming to be a corporate group that moves into uncharted areas of business and continues to push back frontiers 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 1H FY2018 Indicator FY2021 FY2019 results ¥2,300.0- Operating assets ¥2,500.0 billion ¥2,400.0billion ¥2,12
Slide 13: Position of each business and first-half highlights
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan (2) Position of each business and first-half highlights RE100 Personnel in Singapore office Start of advisory business Invoice BPO (business process outsourcing) 13
Slide 14: Real estate: operating assets down temporarily
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (3) 1. Real estate Areas Operating assets down temporarily as we exit from bridge projects (Billions of yen) (%) 4.0 Target Operating assets and ROA of plan (real estate leasing) 1) We are exiting as planned from bridge p
Slide 15: Real estate: bridge ratio down due to exits from large projects
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (3) 1. Real estate Areas Operating assets: Bridge ratio down due to exits from large projects Breakdown of real estate leases by building use Based on operating assets ・Percentages are approximate values based on figures
Slide 16: Aircraft
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (4) 2. Aircraft Areas The number of self-owned aircraft is growing, and we are doing business with an increasing number of airlines. (Billions of yen) (%) Target 4.0 Aircraft leasing operating of plan 1) The number of air
Slide 17: Overseas
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (5) 3. Overseas Areas Organic strategy: Promote expansion of overseas bases and transaction schemes Overseas = Business of overseas subsidiaries, excluding aircraft leasing (Billions of yen) (%) 1) Decision to employ peop
Slide 18: Energy and the environment: solar power generation
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (6) 4. Energy and the environment Areas Steady progress in the solar power generation business 20.0 (Billions of yen) (%) Solar power generation business Target 1) One additional site became operational in the first Opera
Slide 19: First general leasing company in Japan to join RE100
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (6) 4. Energy and the environment Areas The first general leasing company in Japan to join RE100 (*) RE100: An international consortium of companies that aim to procure 100% Fuyo Lease’s RE100(＊) targets of the energy use
Slide 20: Medical/social welfare: healthcare advisory business
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (7) 5. Medical/social welfare Areas Commencement of a management support advisory business targeting healthcare companies Riverfield Fuyo General Lease Fuyo Lease Sales MerryBiz Fuyo General Lease Healthcare Advisory Offi
Slide 21: FGL's service menu for healthcare companies
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (7) 5. Medical/social welfare Areas Commencement of a management support advisory business targeting healthcare companies FGL’s service menu Provide optimal services Improve management efficiency and solutions ・Integrated
Slide 22: New domains: INVOICE consolidated subsidiary
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (8) 6. New domains Areas Frontiers Group Converted INVOICE to a consolidated subsidiary, in a full-fledged effort to reinforce the BPO* business ・In October 2018, acquired a 60% stake in INVOICE INC., which provides integ
Slide 23: Vision and actions for strengthening BPO functions
3. Progress on “Frontier Expansion 2021” Medium-Term Management Plan Strategic (8) 6. New domains Areas Frontiers Group Vision and actions for strengthening BPO functions ・As a core field among the new domains, we plan to proactively invest management resources in this area. ⇒We are rolling out busi
Slide 24: FY2018 consolidated operating results forecast
4. Operating results forecast and dividend policy (1) FY2018 consolidated operating results forecast (Billions of yen) 1H FY2018 actual FY2018 forecast Total revenues 295.7 600.0 Operating profit 18.2 34.0 Ordinary profit 19.6 37.5 Profit attributable to owners of parent 12.7 23.0 Basic earnings per
Slide 25: Dividend policy
4. Operating results forecast and dividend policy (2) Dividend policy Our dividend payment of ¥78 at end-1H FY2018 was in line our with initial forecast. For end-FY2018, our initial forecast of an annual dividend of ¥156 remains unchanged. (Yen) Changes in dividend 156 78 146 130 100 80 78 70 74 62
Slide 26: Key topics
5. Appendix (1) Key topics Real estate “Hydrogen hotel” opens (Tokyu Hotels) Q1 Real estate Building lease for a business hotel in Kyoto Nijo (Mitsubishi Estate Group) Energy/ environ- New Capital and business alliance with Exergy Power Systems (develops next- domains ment generation energy storage
Slide 27: Summary of consolidated operating results
5. Appendix (2) Summary of consolidated operating results (Billions of yen) 1H 1H 1H 1H 1H YoY change (1H FY2017 to FY2014 FY2015 FY2016 FY2017 FY2018 1H FY2018) Total revenues 225.5 248.5 245.0 302.6 295.7 ▲7.0 Total costs 201.2 222.3 217.9 271.4 263.6 ▲7.8 （Interest expenses） （3.2） （3.3） （3.6） （3.
Slide 28: Segment results (consolidated)
5. Appendix (3) Segment results (consolidated) (Billions of yen) Leases Installment sales Leases and Installment sales total YoY YoY YoY 1H 1H YoY Change 1H 1H YoY Change 1H 1H YoY Change Change Change Change FY2017 FY2018 (amount) (%) FY2017 FY2018 (%) FY2017 FY2018 (%) (amount) (amount) Total 262.
Slide 29: Newly executed contract volume
5. Appendix (4) Newly executed contract volume (Billions of yen) YoY Change YoY change 1H 1H 1H 1H 1H (amount) (%) (1H FY2017 to (1H FY2017 to FY2014 FY2015 FY2016 FY2017 FY2018 1H FY2018) 1H FY2018) Leases 177.8 208.1 257.0 280.7 188.4 ▲92.3 ▲32.9% （Finance leases） （162.4） （175.9） （206.1） （219.1） (
Slide 30: Newly executed lease contract volume (by type of equipment)
5. Appendix (5) Newly executed lease contract volume (by type of equipment) (Billions of yen) YoY Change Segment 1H FY2016 1H FY2017 1H FY2018 (1H FY2017 to 1H FY2018) IT & office equipment 107.1 97.6 97.4 ▲0.2 Industrial machinery 23.6 12.2 13.5 +1.2 Civil engineering and 2.7 4.7 4.2 ▲0.5 construct
Slide 31: Operating assets
5. Appendix (6) Operating assets (Billions of yen) YoY Change 1H YoY change (%) (amount) FY2014 FY2015 FY2016 FY2017 ( FY2017 to ( FY2017 to FY2018 1H FY2018) 1H FY2018) Leases 1,176.5 1,244.0 1,369.8 1,474.4 1,421.0 ▲53.4 ▲3.6% (Finance leases)] (964.9) (1,006.0) (1,048.6) (1,098.7) (1,049.7) (▲49.
Slide 32: Non-consolidated results and principal consolidated companies' results
5. Appendix (7) Overview of non-consolidated results and principal consolidated companies’ results (Billions of yen) Sharp Finance Fuyo General Lease Co., Fuyo Auto Lease Co., Ltd. Accretive Co., Ltd. Corporation Ltd. (non-consolidated) (ownership ratio: 100%) (ownership ratio; 51%*) (ownership rati
Slide 33: Going Where No One Has Gone Before
“Going Where No One Has Gone Before” 33