Orix Corporation · TSE:8591
Orix — Q1 2025 Earnings Presentation
50 slides from Orix's earnings presentation, Aug 5, 2024
Slide 1: First Quarter Consolidated Financial Results
ORIX Corporation First Quarter Consolidated Financial Results For the Three-Month Period Ended June 30, 2024 Kazuki Yamamoto Operating Officer, Corporate Function Unit Responsible for Investor Relations and Sustainability Department August 5, 2024 1 Copyright © ORIX Corporation All rights reserved.
Slide 2: Executive Summary
Executive Summary (1) Q1 Net Income of 86.7 Bln JPY(up 38% YoY, 22% of FY25.3 390 Bln JPY target), annualized ROE of 8.7% Finance category continues to generate steady profits Operation category posted healthy Q1 on growth in airport concessions (KIX), other businesses Investments category profits s
Slide 3: Net income & ROE
Net income & ROE ✓ Achieved net income* of 86.7 Bln JPY (strongest Q1 since FY18.3), annualized ROE of 8.7% ✓ Net income up 23.8 Bln JPY (+38%) YoY * Net income refers to Net Income Attributable to ORIX Corporation Shareholders. Full fiscal year (Bln JPY) Quarterly (Bln JPY) 450 10.3% 9.6% 13.1% 13.
Slide 4: Progress toward FY25.3 Forecast: Three Categories
Progress toward FY25.3 Forecast: Three Categories ✓ Finance remains stable, Operation and Investments off to strong start with segment profits up 14% YoY, 194% YoY, respectively (Bln JPY) Full-fiscal year FY25.3 Q1 *Forex: (USD/JPY): FY24.3 (Actual) Y144.4/$, FY25.3 (Assumption) Y140.0/$ *Forex: (US
Slide 5: Assets and ROA: Three Categories
Assets and ROA: Three Categories (From FY24.3 results presentation announced in May 2024 with some updates) ✓ Within our 3 categories, we expect stable “Finance” earnings to be supported by changes in the macro climate, the ongoing shift to an asset manager model to boost “Operations” and an increas
Slide 6: Three Portfolio Categories: Finance, Operation, Investments
Three Portfolio Categories: Finance, Operation, Investments (From FY24.3 results presentation announced in May 2024 with some updates) Three Categories Three Category/Segment Matrix Finance (Recurring earnings, interest rate spread is Operation Investments source of income) (All aspects of operation
Slide 7: Segment Profits: 10 Segments
Segment Profits: 10 Segments ✓ PE Investment, airport concessions solid on rising inbound tourism, PE exit. segment profits up sharply YoY ✓ Profits up QoQ (excluding gain from sale of ORIX Credit stake) on higher investment income in Insurance, other factors (Bln JPY) FY24.3 FY25.3 Highlights Segme
Slide 8: Segment Assets: 10 Segments
Segment Assets: 10 Segments ✓ Assets higher mainly due to changes in forex (375.0 Bln JPY out of 176.6 Bln JPY increase vs. end-FY24.3) ✓ Segment assets definition changed to include cash and deposits and company-use assets from FY25.3 Q1 (past fiscal year data updated to reflect change) Segment Ass
Slide 9: Inbound Tourism
Inbound Tourism ✓ Aircraft and Ships, airport concessions posted sharp profit growth (Three business total up 6.9 Bln JPY, +78% YoY) ✓ Particularly strong growth expected in aircraft leasing, on expansion in passenger market and tight aircraft supply/demand Kansai Airports (three airports) Segment p
Slide 10: Capital Recycling: Exits and New Investments
Capital Recycling: Exits and New Investments ✓ Q1 progress (incl. exits) in line with expectations. Steady execution of investments for Q2 and beyond include already announced deals, aircraft purchases, other deals underway ✓ FY25.3: Accelerated capital recycling to fuel higher capital gains than FY
Slide 11: Breakdown of Segment Profits
Amended breakdown of segment profits of FY21.3 (August 8, 2024) Breakdown of Segment Profits 103.8 Bln JPY up 6% YoY (up 5.9 Bln JPY) FY25.3 Q1 Base profits Profits up on inbound tourism-rel. businesses, growth at domestic PE investees, Segment profits contributions from higher asset management earn
Slide 12: Segment Information
Segment Information 12 Copyright © ORIX Corporation All rights reserved.
Slide 13: Corporate Financial Services and Maintenance Leasing
Corporate Financial Services and Maintenance Leasing Segment profits: 19.8 Bln JPY YoY -0.6 Bln JPY （-3％） Segment assets: 1,778.9 Bln JPY YTD +1.6 Bln JPY （flat） ✓ Corporate Financial Services: Solid earnings, but profits lower YoY on absence of ✓ Corporate Financial Services: Remain careful in sele
Slide 14: 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 Leading equipment
Slide 15: Real Estate
Real Estate Segment profits: 14.0 Bln JPY YoY +3.7 Bln JPY（+36％） Segment assets: 1,098.4 Bln JPY YTD -11.7 Bln JPY （-1%） ✓ RE Investment and Facilities Operation: Profits up sharply on sale of investment ✓ Assets flat, as both sales and new property developments condos, other properties. Facilities
Slide 16: Real Estate – About the Business
Real Estate – About the Business ✓ Main Business: Real estate development, rental and management; facility operation; real estate asset management (Bln JPY) Segment Asset and Ratio to 10 Segment Assets ttl Trends*1 Unrealized gains on rental AUM properties*2 25% 1,808.8 OAM* ORIA** 7% 1,596.4 1,539.
Slide 17: PE Investment and Concession
PE Investment and Concession Segment profits: 32.0 Bln JPY YoY +26.3 Bln JPY (+455％) Segment assets: 967.2 Bln JPY YTD -99.5 Bln JPY (-9%) ✓ PE investment: Profits grew sharply on investee sale, profit growth at ✓ Assets lower, primarily on sale of Sasaeah Holdings current investees ✓ Concession: Re
Slide 18: PE Investment and Concession – About the Business
PE Investment and Concession – About the Business ✓ Currently invested in 18 companies (as of end-March 2024). Investment gains from sales are steadily increasing, along with the size of investments. Investment Track Record Investee Companies Leveraging our broad network and experience, we have esta
Slide 19: Environment and Energy
Environment and Energy Segment profits: -0.5 Bln JPY YoY -5.5 Bln JPY （-110％） Segment assets: 1,015.4 Bln JPY YTD +38.9 Bln JPY （+30.9 Bln JPY from forex） ✓ Domestic: Profits lower on higher costs for rebuilding existing facilities ✓ Assets increased, mainly due to changes in forex ✓ Overseas: Profi
Slide 20: Global Renewable Energy Portfolio
Global Renewable Energy Portfolio (as of end-June 2024*1) ✓ Total net owned operating capacity of 4.5 GW worldwide ✓ Total operating capacity (incl. assets in operation, under construction, and in development): Elawan 12 GW, Greenko 18 GW Spain & other locations China Japan USA & other locations ・El
Slide 21: Insurance
Insurance Segment profits: 21.9 Bln JPY YoY +2.5 Bln JPY （+13％） Segment assets: 2,884.4 Bln JPY YTD -37.6 Bln JPY （+48.4 Bln JPY from forex ） ✓ Jump in investment income led to higher profits, growth in premium income ✓ Assets mostly flat on ongoing replacement of part of investment securities also
Slide 22: Life Insurance – About the Business
Life Insurance – About the Business ✓ Business model shifted from one dominated by sales of third-sector products (such as medical insurance) to a more well- balanced portfolio with introduction of first-sector products, which have higher contract values ✓ Investment income increasing on steady dive
Slide 23: Banking and Credit
Banking and Credit Segment profits: 6.4 Bln JPY YoY-2.0 Bln JPY (-23%) Segment assets: 2,876.1 Bln JPY YTD-58.1 Bln JPY (-2%) ✓ Credit: Profits fell on lower profit contributions stemming from sale of partial ✓ Credit assets lower owing to sale of ORIX Credit stake ORIX Credit stake ✓ Banking: Lendi
Slide 24: Banking – About the Business
Banking – About the Business ✓ In addition to its mainstay real-estate investment loan business, ORIX Bank is strengthening its business financing industries which support a sustainable society ✓ Aims to achieve sustainable growth and improve ROA while controlling quality, size of asset base, by uti
Slide 25: Aircraft and Ships
Aircraft and Ships Segment profits: 11.8 Bln JPY YoY+4.1 Bln JPY （+54%） Segment assets: 1,304.9 Bln JPY YTD +135.3 Bln JPY （+ 61.2 Bln JPY from forex ） ✓ Aircraft, Avolon profits up on expansion in global passenger market ✓ Assets higher even excluding changes in forex, owing to increase in aircraft
Slide 26: Aircraft and Ships – About the Business
Aircraft and Ships – About the Business (as of end-June 2024) ORIX Aviation (Business since 1978) Owned, Managed, and Committed Fleet APAC Wide body EMEA 24% 19% 113 Average age Managed Fleet 31% 139 151 6.6 years 152 143 GLOBALLY NARROWBODY Boeing 141 144 DIVERSE WEIGHTING 47% OEM BREAKDOWN Airbus
Slide 27: ORIX USA
ORIX USA Segment profits: 11.8 Bln JPY YoY -0.4 Bln JPY （-3%） Segment assets: 1,767.6 Bln JPY YTD +73.2 Bln JPY （+106.0 Bln JPY from forex ） ✓ Segment profits lower as ongoing slump in real estate, private equity offset ✓ Remain price sensitive and selective in underwriting new deals. USD- growth in
Slide 28: ORIX USA – About the Business
ORIX USA ✓ A provider of capital and financing solutions to middle market companies in USA, targets growth in asset management for three verticals (total AUM / AUA $75.3 Bln) ✓ Operates a hybrid strategy, investing own principal capital while providing capital market and asset management solutions t
Slide 29: ORIX Europe
ORIX Europe Segment profits: 11.2 Bln JPY YoY+4.0 Bln JPY （+56%） Segment assets: 702.9 Bln JPY YTD +40.8 Bln JPY （+37.1 Bln JPY from forex ） ✓ Profits up YoY on growth in asset management fees backed by higher AUM ✓ Assets increased, mostly due to changes in forex Segment profits Segment assets・ROA
Slide 30: ORIX Europe – About the Business
ORIX Europe – About the Business ✓ Asset management business including traditional equities, fixed income, commodities, renewable energy and other fund management ✓ Focus on maximizing growth in asset management business by capitalizing on global network (e.g. ROBECO’s Asia strategy) Major Group Com
Slide 31: Asia and Australia
Asia and Australia Segment profits: 8.9 Bln JPY YoY -2.0 Bln JPY （-19%） Segment assets: 1,802.9 Bln JPY YTD+93.7 Bln JPY （＋91.4 Bln JPY from forex） ✓ Leasing exposure rose in South Korea, India, Australia, but profits ✓ Assets higher on changes in forex, robust new lease executions lower YoY on abse
Slide 32: Asia and Australia – About the Business
Asia and Australia – About the Business ✓ Leasing primarily for industrial equipment and automobile across Asia and Australia, as well as PE investment business mainly in Greater China Segment Assets by Business Trends of Segment Assets by major Country and Region （Bln JPY） Leases, Loans*1 Investmen
Slide 33: Appendices
Appendices 33 Copyright © ORIX Corporation All rights reserved.
Slide 34: 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-FY24.3) Renewable energy generating Capacity (worldwide) *2 346.1 Bln JPY 9.2% 11％ 4.5GW Enhanced shareholder returns Well-balanced earnings*1 Top-class inve
Slide 35: About ORIX: Expertise in Business and Collective Capabilities of the Group
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 35 Copyright © ORIX Corporation All rights reserved.
Slide 36: About ORIX: Proven Track Record of Profitability
About ORIX Proven Track Record of Profitability ✓ ORIX has been profitable for 59 straight years Net Income Attributable to ORIX Corporation Shareholders FY24.3 400.0 Record profits 350.0 FY21.3 COVID pandemic 300.0 250.0 FY09.3 Global financial crisis 200.0 FY02.3 IT bubble bursts 150.0 FY98.3 Asia
Slide 37: Reference: Final Year of Medium-term Outlook
Reference: Final Year of Medium-term Outlook (From FY24.3 results presentation announced in May 2024) Medium-term Outlook (Three Year) FY22.3 FY23.3 FY24.3 FY25.3 Results Targets Results Targets Results Targets Net income (Bln JPY) 317.4 250.0 290.3 （273.1）*1 330.0 346.1 390.0 （400.0）*2 EPS (JPY per
Slide 38: Capital Recycling Profit Growth
Capital Recycling Profit Growth ✓ Accelerating capital recycling model led to company-wide net income growth of 3.1X, CAGR of 11% (FY24.3 vs FY13.3) Yayoi RoadSafe Acquisition /new Primagest business (Projector business) Sasaeah HD (Fujita Pharmaceutical, Kyoto Biken) Houlihan ORIX Living Yayoi ORIX
Slide 39: Investment Gains and Major Breakdown
Amended investment gains of FY21.3 (August 8, 2024) Investment Gains and Major Breakdown (JPY) Segment FY18.3 FY19.3 FY20.3 FY21.3 FY22.3 FY23.3 FY24.3 42.9 Bln 56.5 Bln 53.6 Bln 16.9 Bln 21.4 Bln 29.5 Bln 34.1 Bln Real Estate ORIX Golf Property under facilities ops., Mixed-use property ORIX Living,
Slide 40: Investment Pipeline: FY25.3 and Beyond
Investment Pipeline: FY25.3 and Beyond (From FY24.3 results presentation announced in May 2024) ✓ Building portfolio capable of mid- to long-term stable growth by combining investments in variety of asset classes ◼ Mix of assets immediately accretive to profits vs. those requiring development period
Slide 41: Growth Driver: Shift to Asset Manager Model
Growth Driver: Shift to Asset Manager Model (From FY24.3 results presentation announced in May 2024) ✓ Will shift to an asset manager model, as size of investments increases. Aim for AUM of 100 Tln JPY (69 Tln JPY Aum as of end-FY24.3*1) ✓ Goal to be pursuit of profit margins, by further sharpening
Slide 42: 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 43: Financials: Funding Structure / Employed Capital Ratio
Financials Funding Structure / Employed Capital Ratio ✓ Diversified funding methods and maintained a high long-term debt ratio ✓ Maintained appropriate employed capital ratio through progress in capital recycling Funding Structure and Long-term Debt Ratio*1 Shareholders’ Equity / Employed Capital Ra
Slide 44: Financials: Funding Structure
Financials Funding Structure ✓ Diversified funding. Controlled funding costs while maintaining a high long-term debt ratio Breakdown of Funding Trends in Funding Costs Foreign currency funding costs JPY funding costs Deposits 5.16% 5.20% 25% 25.3 Q1 Borrowings from 3.57% ABN, ABS, CMBS financial 3.2
Slide 45: Financials: D/E Ratio & ROE, Credit Ratings, Macro Sensitivity
Financials: D/E Ratio & ROE, Credit Ratings, Macro Sensitivity D/E Ratio & ROE Credit Ratings Interest Rate & Forex Sensitivity 4.6X (as of end-June 2024) Interest rate*1 4.5X D/E Ratio (excl. deposits) ◼ Japanese Yen : Slightly negative 3.8X S&P BBB+ (Stable) 3.4X ◼ US Dollar : Positive 13.8% 3.4X
Slide 46: Improving Share Price Valuation (Corporate Value)
(From FY24.3 results presentation announced in May 2024) Improving Share Price Valuation (Corporate Value): After Reaching P/B 1.0x ✓ Position strengthening corporate value through profit-driven ROE improvement as core strategy, emphasis on EPS through ongoing share buybacks ✓ Promoting communicatio
Slide 47: Shareholder Returns: Hiking Dividend Payout Ratio
Shareholder Returns: Hiking Dividend Payout Ratio ✓ FY25.3 shareholder return policy: Pay out 39% of net income to dividends, set share buyback program of 50.0 Bln JPY, allocate remainder to internal reserves and new investments ✓ Forecast full-year DPS of 133.2 JPY, EPS of 341 JPY (assuming net inc
Slide 48: ESG: Ratings
ESG: Ratings ✓ ORIX 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 reductions Improved Rati
Slide 49: 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 50: 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