First Quarter of Fiscal Year Ending March 2019 (FY2018) Financial - - PowerPoint PPT Presentation

First Quarter of Fiscal Year Ending March 2019(FY2018) Financial Highlights Ricoh Leasing Company, Ltd.

Table of Contents

• 1. Consolidated Results for the First Quarter of

Fiscal Year Ending March 2019

• 2. Consolidated Income Forecast for the Fiscal

Year Ending March 2019

Forward-looking statements including earnings forecasts contained in this document are based on certain assumptions deemed to be rational in light of the information available to the Company at the time of preparing the document, and are not intended to be guarantees of future performance. Actual results may differ significantly from plans and forecasts due to a variety of factors.

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• 1. Consolidated Results for the First

Quarter of Fiscal Year Ending March 2019

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 Gross Profit : 8,082 million yen (+2.1%) Expanded sales for five consecutive periods; posted another record high  Operating Profit : 4,336 million yen (+0.4%) Expanded sales for four consecutive periods; posted another record high  Net Income : 3,015 million yen ((0.6%))

Performance Overview

4  Posted another record high for Total Transaction Volume and operating assets  Due to improvements in yields of new contracts, Gross Profit increased  Net Sales : 78,239 million yen Expanded income for nine consecutive periods; posted another record high  Operating Assets (substantial) : 871,662 million yen Posted another record high  Total Transaction Volume : 103,744 million yen Posted another record high

* In this document, “Profit Attributable to Owners of Parent” is presented as “Net Income”

Consolidated Results

• Gross Profit increased by 2.1% year-on-year. Increase in Operating Assets and higher income of

Commission Received contributed to higher profit.

• Strategic Expenses including Personnel Expenses and System Expenses increased. As a result, Operating

Profit increased by 0.4% year-on-year.

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(100 millions of yen) * Actual ROA and ROE are annualized numerical figures. 17/6 Actual 18/6 Full-year Forecast Progress Rate Actual Growth Rate Net Sales

771 782 1.5% 3,135 25.0%

Gross Profit

79 80 2.1% 327 24.7%

SGA Expenses

35 37 4.3% 157 23.9%

Operating Profit

43 43 0.4% 170 25.5%

(Operating Profit/Net Sales)

5.6% 5.5%

• 5.4%
• Ordinary Profit

43 43 1.4% 167 26.3%

Net Income

30 30 (0.6%) 114 26.4%

YoY change

Dividend per Share (yen)

• 80.00
• Earnings per Share (yen)

97.14 96.58 (0.56) 365.19

• Dividend Payout Ratio
• 21.9%
• ROA (Return on Asset Ratio)

1.31% 1.23% (0.08%) 1.15%

• ROE (Return on Equity Ratio)

7.8% 7.3% (0.5%) 6.7%

(0.5)

Gross Profit Calculation

SGA Expenses Calculation Increase in Allowance for Doubtful Accounts

17/6 Actual

Increase in gross margin for Financial Service Business Decrease in Financial Expenses

18/6 Actual

+0.2 (0.1)

Factors Affecting Operating Profit

(100 millions of yen)

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(1.2) +1.6

Others Increase in gross margin for Leases and Installment Sales Business Others Increase in Expenses

4,319 million yen 4,336 million yen +1.0 (0.9)

Increase in personnel expenses

625 662 706 745 755 34 35 38 37 36

10 20 30 40 50 60 70 80 90 100 100 200 300 400 500 600 700 800 900 1,000

14/6 15/6 16/6 17/6 18/6

Net Sales Segment Profit

 Leases and Installment Sales Business  Financial Service Business

Performance by Segment

• In the Leases and Installment Sales Business, Gross Profit increased due to the rise in Operating Assets and a

cease in the decline in Operating Asset yields. However, Segment Profit decreased due to the rise in expenses such as Personnel Expenses.

• The Financial Services Business posted greater income on higher sales thanks to the increased commission

business, including the rise in Loans Balance and Collection Agency Services and Factoring Services for Nursing- Care Facilities.

(100 millions of yen) (100 millions of yen)

* % of Operating Profit = Financial Service Business Segment Profit / Operating Income

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14 15 16 17 19 6 7 7 8 9 16.2% 18.4% 16.3% 19.3% 21.1%

0% 10% 20% 10 20 30 40

14/6 15/6 16/6 17/6 18/6

Net Sales Segment Profit % of Operating Profit Net Sales Segment Profit Net Sales % of Operating Profit Segment Profit

Leases and Installment Sales Business: Transaction Volume by Contract/Product

• Transaction Volume decreased due to the rebound of large transactions on Environment-Related Equipment

from the previous year. As the decrease from the rebound was initially expected, progressed as planned.

• Flagship Office and IT-Related Equipment increased by 4.1% year-on-year.

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(100 millions of yen) Transaction volumes are presented on an inspection basis.

 Transaction Volume by Contract  Transaction Volume by Product

17/6 Actual 18/6 Full-year Forecast Progress Rate Actual Growth Rate Finance Leases

670 671 0.2% 2,720 24.7%

Operating Leases

32 45 40.5% 160 28.6%

Installment Sales

275 189 (31.2%) 810 23.4%

Total

978 906 (7.3%) 3,690 24.6%

17/6 Actual 18/6 Full-year Forecast Progress Rate

Japan Leasing Association

(cumulative total from 18/4 to 18/5)

Growth Rate

Actual Growth Rate Office and IT-Related Equipment

464 483 4.1% 1,925 25.1% 7.7%

Medical Equipment

99 82 (17.6%) 360 22.9% (9.8%)

Industrial Machinery

172 88 (48.7%) 455 19.4% (22.8%)

Commercial and Service Equipment

74 95 28.1% 355 26.8% 1.9%

Transportation Equipment

41 51 24.7% 165 31.5% 6.4%

Others

125 104 (16.6%) 430 24.3% 9.4%

Total

978 906 (7.3%) 3,690 24.6% 1.9%

Of which, Environmental Field

150 71 (52.9%) 350 20.3%

319 389 422 438 488 1,072 1,218 1,332 1,380 1,392 1,607 1,755 1,819 15/3 16/3 17/3 18/3 18/6 April–June July–March

[Commission business]

• In Collection Agency Services, the number of new

customers grew steadily and the number of transactions increased by 11.2% year-on-year.

• In Factoring Services for Nursing-Care Facilities, the

Transaction Volume increased by 9.0% year-on- year as a result of capturing new customers and increasing the use of services by existing customers. [Loans]

• Corporate lending was mainly favorable, and

Transaction Volume jumped 207.9% year-on-year.

Financial Services Business: Number of Transactions/Transaction Volume

 Number of Transactions in Collection Agency Services  Loan Transaction Volume  Transaction Volume of Factoring Services for Nursing-Care Facilities

(100 millions of yen) (100 millions of yen) (10,000 cases)

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70 102 141 171 186 256 369 465 549 326 471 606 720 32 49 59 67 71

• 10

10 30 50 70 200 400 600 800 1000 1200 15/3 16/3 17/3 18/3 18/6

April–June July–March Balance

55 63 86 42 131 204 200 240 300 259 264 327 343 1,052 1,106 1,216 1,374 1,450 200 400 600 800 1,000 1,200 1,400 1,600 100 200 300 400 500 600 15/3 16/3 17/3 18/3 18/6 April–June July–March Balance April–June July–March April–June July–March Balance April–June July–March Balance

• Operating Assets increased by 15.2 billion yen from the end of the previous fiscal year, marking

a record high.

• As the Operating Assets increased, the default rate remained almost unchanged.

* Default rate = Default loss amount / Average Operating Assets (for 18/6, default loss amount was annualized to calculate the default rate) * Operating Assets shown includes securitized portions of lease receivables.

Operating Assets and Changes in Default Rate

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(100 millions of yen) 5,327 5,517 5,627 5,761 5,782 158 187 208 230 240 725 837 958 1,113 1,148 1,142 1,231 1,292 1,458 1,544 7,354 7,773 8,086 8,563 8,716 0.19% 0.18% 0.18% 0.17% 0.18%

• 10.00%
• 8.00%
• 6.00%
• 4.00%
• 2.00%

0.00%

15/3 16/3 17/3 18/3 18/6

Financial Services/Others Installment Sales Operating Leases Leases Default Rate Financial Services/Others Installment Sales Operating Leases Finance Leases Default Rate

213 216 215 207 204 14 16 18 24 24 23 24 26 25 26 53 55 58 65 67 305 313 318 323 323 4.77% 4.53% 4.35% 4.21% 4.00%

• 7.50%
• 5.50%
• 3.50%
• 1.50%

0.50% 2.50% 4.50% 6.50%

14/3 15/3 16/3 17/3 18/3

Others (Commission Received, etc.) Loans Installment Sales Leases % of Gross Profit (before deducting Financial Expenses)

50 52 51 50 51

6 5 6 5 6 6 6 6 6 7 17 14 16 18 18 81 79 80 81 83 4.15% 3.95% 3.99% 3.99% 3.97%

• 7.50%
• 5.50%
• 3.50%
• 1.50%

0.50% 2.50% 4.50% 6.50%

17-1Q 17-2Q 17-3Q 17-4Q 18-1Q

* Gross Profit = Net Sales - Cost of Sales (excluding Financial Expenses) * % of Gross Profit (before deducting Financial Expenses) = Gross Profit (before deducting Financial Expenses) / Average Operating Assets (for 18/6, the amount of Gross Profit (before deducting Financial Expenses) was annualized to calculate the % of Gross Profit (before deducting Financial Expenses)).

• From FY2017 2Q onwards, the decline in operating asset yields ceased due to the improvements

in acquired yields of new contracts.

• % of Gross Profit (before deducting Financial Expenses) remained almost unchanged.

Transition of Gross Profit (before deducting Financial Expenses)

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(100 millions of yen)

Others (Commission Received, etc.) Loans Installment Sales Leases % of Gross Profit (before deducting Financial Expenses)

Interest-Bearing Debt Outstanding

* Financial Expenses Ratio = Financial Expenses / Average Operating Assets * For 18/6, Financial Expenses was annualized to calculate the Financial Expenses Ratio. * The balance includes the amount of procurement through securitized portions of lease receivables. * Current portion of Long-term liabilities within one year is included in long-term debt.

• Interest-bearing debt increased in line with the rise in Operating Assets.
• Continued to procure funds at low interest rates while Financial Expenses and the Financial

Expenses Ratio decreased.

Financial Expenses and Financial Expenses Ratio

Total Procurement Amount and Financial Expenses

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(100 millions of yen) (100 millions of yen) 3.9 3.6 3.1 2.8 2.5 11.2 10.8 8.5 8.0 15.1 14.5 11.6 10.8 0.22% 0.20% 0.15% 0.13% 0.12%

• 3.00%
• 2.50%
• 2.00%
• 1.50%
• 1.00%
• 0.50%

0.00% 0.50% 15/3 16/3 17/3 18/3 18/6 Financial Expenses July– March Financial Expenses April– June Financial Expenses Ratio 4,902 5,378 5,745 6,156 6,256 1,434 1,332 1,121 1,110 1,245 6,337 6,710 6,866 7,266 7,501 15/3 16/3 17/3 18/3 18/6 Short-term Long-term Short-term Long-term

Financial Expenses July– March Financial Expenses April– June Financial Expenses Ratio

Changes in Selling, General and Administrative Expenses

• In Selling, General and Administrative Expenses, a year-on-year increase by 4.3% due to

Personnel Expenses and Strategic Expenses.

* OHR = (Selling, General and Administrative Expenses - Bad Debt Expenses) / (Gross Profit + Financial Expenses)

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(100 millions of yen) 16 16 17 17 17 15 15 15 16 16 2 1 2 2 2 34 34 35 35 37 41.7% 41.4% 39.7% 40.8% 41.8%

20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 10 20 30 40 50 60 70 14/6 15/6 16/6 17/6 18/6 Bad Debt Expenses Others Personnel Expenses OHR Bad Debt Expenses OHR Others Personnel Expenses

• 2. Consolidated Income Forecast for the

Fiscal Year Ending March 2019

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Consolidated Income Forecast

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* Operating Assets shown includes securitized portions of lease receivables. (100 millions of yen) 18/3 Actual 19/3 Forecast Growth Rate Net Sales

3,043 3,135 3.0%

Gross Profit

312 327 4.6%

SGA Expenses

147 157 6.7%

Operating Profit

165 170 2.7%

(Operating Profit/Net Sales)

5.4% 5.4%

• Ordinary Profit

164 167 1.7%

Net Income

113 114 0.8%

YoY change

Dividend per Share (yen)

70.00 80.00 10.00

Earnings per Share (yen)

362.19 365.19 3.00

Dividend Payout Ratio

19.3% 21.9% 2.6%

ROA (Return on Asset Ratio)

1.20% 1.15% (0.05%)

ROE (Return on Equity Ratio)

7.1% 6.7% (0.4%)

YoY change

Operating Assets

8,563 9,053 489

Transaction Volume Forecast by Business

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(100 millions of yen) (100 millions of yen) * Transaction volumes are presented on an inspection basis.

 Leases and Installment Sales Business  Financial Service Business

18/3 Actual 19/3 Forecast Growth Rate Office and IT-Related Equipment

1,887 1,925 2.0%

Medical Equipment

358 360 0.5%

Industrial Machinery

413 455 10.1%

Commercial and Service Equipment

348 355 1.9%

Transportation Equipment

163 165 0.9%

Others

399 430 7.5%

Transaction Total for Leases and Installment Business

3,571 3,690 3.3%

Of which, Environmental Field

315 350 11.1%

18/3 Actual 19/3 Forecast Growth Rate Number of Transactions in Collection Agency Services (10,000 cases)

1,819 cases 2,060 cases 13.2%

Transaction Volume of Factoring Services for Nursing-Care Facilities

720 910 26.2%

Loan Transaction Volume

343 330 (3.9%)

Breakdown of Net Sales and Operating Assets: Actual/Forecast

 Breakdown of Net Sales  Breakdown of Operating Assets

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(100 millions of yen) (100 millions of yen) * Operating Assets shown are after securitized portions of lease receivables are deducted.

18/3 Actual 19/3 Forecast Growth Rate Leases

2,234 2,284 2.2%

Installment Sales

468 501 6.9%

Loans

26 29 11.4%

Commission Received

53 56 5.4%

Others

261 265 1.4%

Total Net Sales

3,043 3,135 3.0%

18/3 Actual 19/3 Forecast Growth Rate Finance Leases

5,513 5,635 2.2%

Operating Leases

230 240 4.1%

Total Leases

5,744 5,875 2.3%

Installment Sales

1,113 1,290 15.9%

Total Leases and Installment Sales Business

6,857 7,165 4.5%

Financial Service Business

1,395 1,575 12.9%

Subtotal

8,253 8,740 5.9%

Others

63 63 (0.2%)

Total Operating Assets

8,316 8,803 5.9%

<Contact> Ricoh Leasing Company, Ltd. Corporate Planning Department Tel: 03-6204-0608 Email: ir@rle.ricoh.co.jp URL: http://www.r-lease.co.jp

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Ricoh Leasing Company, Ltd.