Fiscal Year Ended March 2020 (FY2019) Financial Highlights May 8, - - PowerPoint PPT Presentation

Fiscal Year Ended March 2020 (FY2019) Financial Highlights

May 8, 2020 Ricoh Leasing Company, Ltd.

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Table of Contents

• 1. Consolidated Results for Fiscal Year Ended

March 2020

• 2. Mid-term Management Plan
• 3. Consolidated Income Forecast for Fiscal

Year Ending March 2021

• 4. Reference Material

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１. Consolidated Results for Fiscal Year Ended March 2020

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 “Profitability” continued to increase. Net sales and gross profit posted new record highs.  Operating profit and net income decreased due to an increase in allowance for doubtful accounts.  Dividend per share is planed to be 90 yen (interim: 45 yen; year-end: 45 yen) as forecasted at the beginning of the period.

Financial Performance Overview for the 4th Quarter of Fiscal Year Ending March 2020

Net Sales : 332.2 billion yen (+5.8%) Expanded income for ten consecutive periods Gross Profit : 35.1 billion yen (+6.8%) Expanded income for seven consecutive periods Operating Profit : 17.0 billion yen ((1.5%)) Ordinary Profit : 17.0 billion yen ((1.7%)) Net Income : 11.8 billion yen ((1.0%)) Balance of Operating Assets : 994.4 billion yen (+97.2 billion yen) Dividend Per Share : 90 yen (+10 yen) Dividend increase for 25 consecutive periods is planned

* In this material, “Profit Attributable to Owners of Parent” is listed as “Net Income” * Consecutive dividend increases include the substantial dividend increase due to the stock split in Fiscal Year Ended March 2000.

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• Accumulation of operating assets and improvement of return on assets continued while

commission revenue also increased.

• Selling, general and administrative expenses increased due to investments to reinforce the

business foundation (human resources, IT infrastructure) and an increase in allowance for doubtful accounts.

Consolidated Results

(Billion Yen) 19/3 20/3

4Q cumulative total 4Q cumulative total Growth Rate Full-Year Forecast

Net Sales

313.9

332.2

5.8% 329.1 101.0%

Gross Profit

32.9

35.1

6.8% 35.6 98.8%

Selling, General and Administrative Expenses

15.6

18.1

15.9% 17.8 102.0%

Operating Profit

17.2

17.0

(1.5%) 17.8 95.6%

Ordinary Profit

17.3

17.0

(1.7%) 17.6 97.1%

Net Income

11.9

11.8

(1.0%) 12.1 97.8%

YoY change

Dividend per Share(yen)

80.00

90.00

10.00 90.00 －

Earnings per Share(yen)

382.60

382.80

0.20 392.53 －

Dividend Payout Ratio

20.9%

23.5%

2.6% 22.9% －

ROA (Return on Asset Ratio)

1.19%

1.08%

(0.11%) 1.09% －

ROE (Return on Equity Ratio)

7.0%

6.6%

(0.4%) 6.8% －

20/3 Achievement Rate

7

17.27

billion yen

17.01

billion yen

(0.10) (0.07) +0.73 ＋1.67 0.25

billion yen

(0.62)

(1.24)

(0.62)

Factors Affecting Operating Profit

19/3 4Q cumulative total 20/3 4Q cumulative total

Gross Profit Selling, General and Administrative Expenses

(Billion Yen)

Gross Margin for Leases and Installment Sales Business Gross margin for Financial Services Business Others Financial Expenses Human Resources Other Expenses Allowance for Doubtful Accounts

8

[Financial Services Business]

• Both the commission business, such

as collection agency services, factoring services for healthcare and nursing-care facilities, and loans demonstrated steady growth.

• The segment profit increased due to

reversal of bad debt accrual.

[Leases and Installment Sales Business]

• Gross profit increased as acquired

yields of new contracts continued to improve and thanks to an increase in re-leases.

• Segment profit declined, unable to

absorb the rise in allowance for doubtful accounts.

Performance by Segment

 Leases and Installment Sales Business  Financial Services Business

(Billion Yen) (Billion Yen)

267.3 281.8 294.3 303.1 320.1 14.2 14.6 13.9 14.4 13.7

0.0 5.0 10.0 15.0 20.0 25.0 30.0 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0

16/3 4Q cumulative total 17/3 4Q cumulative total 18/3 4Q cumulative total 19/3 4Q cumulative total 20/3 4Q cumulative total

Net Sales Segment Profit

6.5 6.8 7.3 8.2 9.4 3.3 3.3 3.4 3.6 4.6

19.6% 19.2% 20.6% 21.3% 27.1%

• 10%

0% 10% 20% 30% 0.0 10.0

16/3 4Q cumulative total 17/3 4Q cumulative total 18/3 4Q cumulative total 19/3 4Q cumulative total 20/3 4Q cumulative total

Net Sales Segment Profit % of Operating Profit

* % of operating profit = financial services business segment profit /

• perating income

Operating Results

9

• Transaction volumes of leases and installment sales and loans were favorable. Investments for

businesses (housing rental business, power generation business) also expanded steadily.

• Collection agency services and factoring services for healthcare and nursing-care facilities also

maintained high growth rates.

(Billion Yen)

19/3 20/3

4Q cumulative total 4Q cumulative total Growth Rate Full-Year Forecast

Leases and Installment Sales

373.2 414.0 10.9% 423.0 97.9%

Loans

48.8 61.2 25.3% 53.0 115.5% 7.2 13.8 91.8% 10.7 128.8% 20.07 cases 22.19 cases 10.6% 22.60 cases 98.2% 78.1 100.6 28.7% 95.0 105.9% 272 unit 531 unit 95.2% 500 unit 106.2%

Transaction volume of Factoring Services for Healthcare & Nursing-Care Facilities Number of units owned for housing rental 20/3 Achievement Rate Transaction Volume Investment Amount Number of Transactions in Collection Agency Services (million cases)

• Demand for remote work as part of work-style reforms in addition to last-minute demand before

the consumption tax increase and OS migration contributed to the results.

• In the environmental field, transactions increased significantly year on year due to further

diversification of asset holding styles (leases and installment sales, power generation business).

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Transaction Volume for Leases and Installment Sales /Environmental Field

 Leases and Installment Sales Transaction Volume by Product  Environmental Field

(Billion Yen) (Billion Yen)

The Transaction Volume for Leases and Installment Sales for the Environmental Field is included in the transaction volume of the above.

* Transaction Volume for Leases and Installment Sales indicates the total collection amount during the contract period * Investment amount indicates the amount to purchase assets

19/3 20/3

4Q cumulative total 4Q cumulative total Growth Rate

Full- Year Forecast

Office and IT-Related Equipment

190.6 206.3 8.2% 208.0 99.2% 17.4%

Medical Equipment

35.0 37.3 6.7% 37.0 101.0% 3.6%

Industrial Machinery

42.2 47.9 13.5% 52.5 91.3% 1.9%

Commercial and Service Equipment

38.5 36.8 (4.2%) 38.0 97.1% (3.0%)

Transport Equipment

21.3 22.0 3.4% 24.0 91.7% 3.5%

Others

45.5 63.4 39.4% 63.5 100.0% (10.0%)

Total

373.2 414.0 10.9% 423.0 97.9% 6.2%

Japan Leasing Association (cumulative total from 19/4 to 20/3) Growth Rate

20/3 Achievement Rate 19/3 20/3

4Q cumulative total 4Q cumulative total Growth Rate Full-year Forecast

Transaction Volume for Leases and Installment Sales

34.5 50.9 47.5% 45.0 113.2%

Investment Amount

2.6 5.9 124.1% 5.0 119.2%

Total

37.1 56.8 52.9% 50.0 113.8% 20/3 Achievement Rate

• Operating assets

increased by 97.2 billion yen from the end of the previous fiscal year as a result

• f steadily acquiring

contracts.

• Default loss amount

declined slightly and Default rate remained at a low level.

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Operating Assets and Default Rate

(Billion Yen)

551.7 562.7 576.1 589.8 622.1 18.7 20.8 23.0 29.0 30.5 83.7 95.8 111.3 133.1 152.9 123.1 129.2 145.8 169.8 213.4 777.3 808.6 856.3 921.9 1,019.1 0.18% 0.18% 0.17% 0.17% 0.16%

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

0.00%

16/3 17/3 18/3 19/3 20/3

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

* Default rate = default loss amount / average balance of operating assets * The balance of operating assets includes the amount of the securitizations of lease receivables (Amount of Securitized Lease Receivables for the 4th quarter of 20/3: 24.6 billion yen)

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[Balance of Interest-Bearing Debt]

• Interest-bearing debt increased in line

with the rise in operating assets

• Financed according to duration
• Issued 10 billion yen of green bonds

each in 19/3 and 20/3

Total Procurement Amount and Financial Expenses

 Interest-Bearing Debt Outstanding  Financial Expenses and Financial Expenses Ratio

(Billion Yen) (Billion Yen)

537.8 574.5 615.6 678.9 812.3 133.2 112.1 111.0 96.2 67.2 671.0 686.6 726.6 775.2 879.5 16/3 17/3 18/3 19/3 20/3

Short-term Long-term

1.45 1.16 1.08 1.02 1.12 0.20% 0.15% 0.13% 0.12% 0.12%

• 0.50%
• 0.30%
• 0.10%

0.10% 0.30% 16/3 17/3 18/3 19/3 20/3

Financial Expenses 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 * Financial expenses ratio = financial expenses / average

• perating assets

[Financial Expenses and Financial Expenses Ratio]

• Financing remained at a low level.
• Though financial expenses showed an

increase, its ratio remained the same.

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• Bad debt expenses

increased mainly due to the recording of an allowance caused by the impact of COVID- 19.

• The investment to

reinforce the business foundation (human resources, IT infrastructure) was maintained.

Selling, General and Administrative Expenses

(Billion Yen) 7.1 7.1 7.2 7.7 8.3 5.4 5.6 5.8 6.2 6.8 0.7 1.1 1.5 1.6 2.8 13.4 13.8 14.7 15.6 18.1

2 4 6 8 10 12 14 16 18 20

16/3 4Q cumulative total 17/3 4Q cumulative total 18/3 4Q cumulative total 19/3 4Q cumulative total 20/3 4Q cumulative total Bad Debt Expenses Others Personnel Expenses

* Transferred staffing expenses from “Other Expenses” to “Personnel Expenses” from the first quarter of 20/3. Figures in charts show transferred amounts

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• 2. Mid-term Management Plan

Review of FY2017 – FY2019 Mid-term Management Plan

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Review of FY2017 – FY2019 Mid-term Management Plan

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Expansion of core businesses Advance into new businesses around the core business fields by responding to customers’ expectations

Expansion of business areas

FY2017 – FY2019 Mid-term Management Plan Next-period Mid-term Management Plan FY2014 – FY2016 Mid-term Management Plan

Growth period heading toward “beyond leasing” Vision “Beyond leasing”

<Business areas> Leases and Installment Sales Financial services

Mid-term Management Plan

Grow to become a company that can not only provide services/products in leasing and financial services markets but also offer ones that contribute to the development of the environment, society and customers

1. Construction of a new platform to further enhance product competitiveness and operating efficiency in response to diversifying needs and services 2. Human resource management in response to changes in society, markets and working styles 1. Reinforcing alliances with vendors and establishing a firm sales & marketing platform by maximizing the customer network 2. Creation of value provided other than leasing 3. Deployment of lease + service business through collaboration with RICOH Group companies 4. Taking on challenges in new environmental fields centered on energy-creation and energy-saving 5. Development and provision of financial services to accommodate changes and resolve issues in society

Business Growth Strategy Strategy for Enhancement of Organizational Strength

Review of FY2017 – FY2019 Mid-term Management Plan Measures

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Management strategies Measures

Business Growth Strategy

Reinforcing alliances with vendors and establishing a firm sales & marketing platform by maximizing the customer network

• Active development of new areas
• Further improvement of added value by improving efficiency and

differentiation through cooperation with vendors Creation of value provided other than leasing

• Business partnership with eGuarantee, Inc. (guarantee of accounts

receivable )

• Investment in Peace Tec Lab, Inc. (C/B to C rental platform)

Deployment of lease + service business through collaboration with RICOH Group companies

• Mutual utilization of vendor maintenance and production functions
• Cooperation in the renewable energy business (regional revitalization,

O&M) Taking on challenges in new environmental fields centered on energy-creation and energy-saving

• Increase in transaction volumes and operating assets (diversification
• f power supply)
• Start of power generation business
• Approach to self-power generation facilities (to end the reliance on

FIT) Development and provision of financial services to accommodate changes and resolve issues in society

• Start of Housing Rental Business
• Business partnership with JS Corporation (revitalization of apartment

complex)

• Start of RiLTA, fast-cashing service
• Capital alliance with Net Protections Holdings, Inc.

Strategy for Enhancem ent of Organizati

• nal

Strength

Construction of a new platform to further enhance product competitiveness and operating efficiency in response to diversifying needs and services

• Utilization of AI for credit operation
• Preparation for development of new mission-critical system

Human resource management in response to changes in society, markets and working styles

• Work-style reform: Arrangement of IT and office environment,

enhancement of human resource system

• Reinforcement of human resources: Enhancement of human

resources, investment to improve employees’ motivation to grow and abilities

Review of FY2017 – FY2019 Mid-term Management Plan Operating Targets

Transaction volumes of factoring services for healthcare and nursing- care facilities 100.0 billion yen

56.8 billion yen 33.1%

Transaction volumes of leases and installment sales 367.5 billion yen Number of units owned for housing rental 500 units

Started the power generation business in FY2018. Expanded the business through promoting diversification of initiatives. Achieved the target one year in advance as a result of proceeding to improve the acquired yield of new contracts. Started the housing rental business in FY2017. Steadily built up the number of units

• wned and expanded the business.

Environmental field 50.0 billion yen Number of transactions in collection agency services 25.00 million cases

Number of firms using the services steadily increased and the business maintained a high growth rate.

22.19 million cases 8.1% 100.6 billion yen 18.4% 531 units －

Maintained two-digit growth by capturing new customers and increasing the usage

• f services by existing customers.

Achieved Achieved Not achieved Achieved Achieved

Mid- term Manage ment plan target

414.0 billion yen 7.2%

Top line: FY2019 results Bottom line: CAGR (FY2016 → FY2019)

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Review of FY2017 – FY2019 Mid-term Management Plan Financial Targets

Operating Profit 18.3 billion yen

17.0 billion yen (0.6%)

Balance of Operating Assets 900.0 billion yen ROA 1.30% Financial Services Business % of Operating Profit 30% Dividend Payout Ratio 25%

Mid- term Manage ment plan target Mid- term target (3 to 5 years) 27.1% 1.08% 23.5%

“Profitability” increased due to accumulation of assets and improving yields. Achieved the target one year in advance through diversifying methods to accumulation of assets. % of operating profit increased to 27.1% from 19.2%. Financial services business maintained high growth. ROA declined to 1.08% from 1.31% due to more-than-expected accumulation of assets and lower profit. Dividend increased for 25 consecutive periods. Dividend payout ratio increased to 23.5% from 15.9%.

Gross Profit 33.5 billion yen

Operating profit did not reach the target due to active investments for reinforcing the business foundation and an increase in allowance for doubtful accounts.

Achieved Achieved Not achieved Not achieved

1,019.1 billion yen 8.0% 35.1 billion yen 4.1%

Top line: FY2019 results Bottom line: CAGR (FY2016 → FY2019)

* Pre-deduction balance of securitizations of receivables, etc.

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 While increasing profitability, pursued investments in human resources and IT infrastructure toward achieving further growth.

Review of FY2017 – FY2019 Mid-term Management Plan “Profitability”

16.05 billion yen

14/3

17.33 billion yen

20/3 (0.60)

Billion yen

+0.78

Profitability

＋1.78 (0.68)

General Expenses

17.01 billion yen

(2.56) +0.04 ＋3.98 (1.77)

Profitability Financial Expenses Financial Expenses Bad Debt Expenses General Expenses Bad Debt Expenses

17/3

FY2017 – FY2019 Mid-term Management Plan FY2014 – FY2016 Mid-term Management Plan

21

Intentionally blank

FY2020 – FY2022 Mid-term Management Plan

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Formulation of FY2020 – FY2022 Mid- term Management Plan

• Challenges to Realize “beyond leasing”
• Diversification of assets such as housing rental and

power generation businesses

• Reinforcement of foundation (human resources,

IT) aimed at future growth

• Revision of corporate philosophy

Customers and markets Competitors

• Concerns about economic deterioration due to

COVID-19

• Emergence of new business utilizing innovative

technologies

• Heightening anticipation for response to SDGs

Company

• Diversification of business
• Cross-industry business partnership and alliance
• Intensified competition with organizations in

different industries such as local banks

Vision

FY2017 – FY2019 Mid-term Managem ent Plan

“Beyond leasing”

Grow to become a company that can not only provide services/products in leasing and financial services markets but also

• ffer ones that contribute to the

development of the environment, society and customers

Presenting the mid-to-long

“target vision” and

redefining “business

domains”

24

Mid-to-long-term Vision

Create favorable circulation in the environment, society and the economy by adopting “management centered

• n individuals” and be a bridge to an abundant future

“Become a Circulation- Creating Company”

25

New Business Domains

26

 Solving social issues through business activities by strengthening existing businesses and creating new business.

ESG Domain Sub-domain

Ｅ  Environmental circulation

Contributing to reasonable environmental circulation and restoration Energy (energy-creation and energy-saving) 3R (Reduce, Reuse, Recycle)

Ｓ  Social & Community

Contributing to achieving safe and secure housing and living environments to diverse customer groups and creating rich & vigorous communities Healthcare & Wellness Residence & Life support

Ｇ  Business & Governance

Contributing to economic activities — work, commerce, manufacturing — for society to achieve sustainable growth Work & Commerce Industry & Infrastructure

Target Vision of Ricoh Leasing

Contribution to customers Contribution to society Happiness of employees

Create favorable circulation in the environment, society and the economy by adopting “management centered on individuals” and be a bridge to an abundant future

Continuous value creation

Realization of management centered on individuals

S G E

• Environment ⇒ Environmental circulation
• Social

⇒ Social & Community

• Governance ⇒ Business & Governance

Creation of sustainable circulatory society

Financial Services Advance into new businesses around the Company’s core business fields FY2017 – FY2019 Mid-term Management Plan FY2020 – FY2022 Mid-term Management Plan 5 to 10 years later Leases Installment Sales

27

Direction from a Long-term Perspective

Aggressive capital policy

Enhancement of corporate value Trends

• Demographic changes
• Changes in the global

environment

• Technological leap

Corporate Philosophy

We will be a bridge to an abundant future with our independent financial services

• Integrity and reliable

business activities

• Services beyond

expectations

• Enjoyable and active
• Enhance corporate value

Business growth

Execution of SDGs commitment

Continuous value creation

■ Contribution to society ■ Contribution to customers ■ Happiness of employees

Reinforce- ment of foundation

[E] Environmental circulation Renewable energy, 3R circulation Creation of pleasant and diverse living environments, local healthcare [G] Business & Governance

• No. 1 vendor leasing, unique services

Organizational strength Solid infrastructure Governance, internal control, management quality

Deployment & extension of measures

• Profitability
• Asset efficiency

Creation of sustainable circulatory society 28

[S] Social & Community Quality control

Enhance- ment of

• rganiza-

tional strength Business growth

Mid- term Manage- ment Plan Business domains Promotion of sustainable management

Contributing to realizing a clean global environment rooted in environmental circulation Creation of safe, secure and pleasant housing and living environments Further evolution of vendor leasing and enhancement of value provided to customers Reconstruction of the rental business Contributing to reasonable environmental circulation and restoration Contributing to the creation of rich and vigorous communities Contributing to economic activities — work, commerce, manufacturing

[G] Business & Governance [S] Social & Community [E] Environmental circulation

Execution of SDGs commitment to realize CSV Pioneering new business areas and creating business models Business expansion not dependent on assets Business expansion under alliance with Mizuho Leasing Development of a mission-critical system and operation structure for pursuing high quality and high efficiency Human resource management that links the employees’ happiness with the Company’s business expansion Reinforcement of governance

FY2020 – FY2022 Mid-term Management Plan Scheme to Realize the Target Vision

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FY2020 – FY2022 Mid-term Management Plan Business Growth Strategy - 1

Further evolution of vendor leasing and enhancement of value provided to customers Creation of safe, secure and pleasant housing and living environments ２ Contributing to realizing a clean global environment rooted in environmental circulation ３ Business Growth Strategy Measures １

• Further enhancement of vendor support

function

• Development of portal for customers and

enhancement of value provided

• Deployment of measures to further upgrade

assets

• Contribution to revitalization of local

communities by the housing rental business + peripheral services

• Provision of diverse loans in line with the

external environment

• Reinforcement of sales of solutions in the

fields of healthcare and wellness

• Provision of finance services in the renewable

energy field and investment in the power generation business

• Reinforcement of 3R contributing to

environmental circulation and reduction of environmental load

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FY2020 – FY2022 Mid-term Management Plan Business Growth Strategy - 2

Pioneering new business areas and creating business models ４ Reconstruction of the rental business ５

• Expansion of the rental business through

collaboration with Ricoh Group companies

• Expansion of initiatives in the ICT field
• Deployment of new rental services

Business expansion not dependent on assets ６

• Reinforcement of new field pioneering by

existing products

• Development of services that meet

expectations and needs of society and customers Business expansion under alliance with Mizuho Leasing ７

• Reinforcement of existing businesses and

creation of new business opportunities

• Pioneering new fields through diversification
• f financing methods
• Creation of new businesses through

collaboration with investees and alliance partners

• Business investment focused on ESG
• Taking on challenges into overseas markets

Business Growth Strategy Measures

31

FY2020 – FY2022 Mid-term Management Plan Strategy for Enhancement of Organizational Strength

32

Development of a mission-critical system and operation structure for pursuing high quality and high efficiency １

• Development of a new mission-critical

system

• Promotion of business efficiency and

improvement of quality through standardization and automation

• Examination and credit function reforms

(mechanisms and use of AI) Human resource management that links the employees’ happiness with the Company’s business expansion ２

• Deployment of measures to increase the

happiness of employees

• Continued promotion of diversity & inclusion
• Recruitment and development of human

resources to realize business growth Reinforcement of governance ３

• Deployment of measures to increase

corporate value

• Enhancement of internal control and internal

audit Strategy for Enhancement of Organizational Strength Measures

 Continue mid-to-long term investments in IT and human resources, looking toward sustainable growth

IT investment Human resource investment

New mission-critical system

Front

Leases Commissions

・・・

Business-specific system Individual business system Reinforcement of settlement function Expansion of profitability in each business Manpower plan Sales Increase Increase Maintain

Mid-to-long term investments (FY2020 – FY2022, FY2023 – FY2025 Mid-term Management Plan)

Investments for Reinforcement of Business Foundation

Digital workflows Implementation of electronic contracts Improvement

• f operating

efficiency Reinforcement of governance Response to remote working Business expansion and response to diversification

Improvement of productivity

Staff mem- bers Opera- tions

Investing human resources in profitable divisions

Back Common system

Billing Assets Business partners

・・・

Contents of investment Aim

Middle

Common system across operations

Workflows Documentation control

 Reinforcement of human resources for creating new businesses and strengthening governance  Maintaining manpower by pursuing efficiency through using IT and improving

• perations

New business

・・・

33

19.9 19.9 19.2 18 20 22 18/3期 19/3期 20/3期 21/3期 22/3期 23/3期 24/3期

1…

Productivity per person

FY2023 and

• nward

(Million Yen)

18/3 19/3 20/3 21/3 22/3 23/3

20.0 billion yen

• r above

(5.6% or above) 17.0 billion yen FY2019 results FY2022 targets 1.20% 1.08% 7.0% 6.6% 1,300.0 billion yen （8.5%） 1,019.1 billion yen

* Pre-deduction balance of securitizations of receivables, etc.

FY2020 – FY2022 Mid-term Management Plan Targets

There is no telling when the spread of COVID-19 will be contained in Japan and abroad, and there are concerns about a further spread and prolonged impact on economic activities. Since it is difficult to fully measure the impact of COVID-19, the Company will not disclose its mid-term target figures until the impact can be identified. Operating Profit ROA

(Return on Assets)

ROE

(Return on Equity)

Balance of Operating Assets

34

39 41 43 45 50 55 60 70 80 90 95 17.3% 13.6% 13.1% 14.7% 15.4% 15.5% 15.9% 19.3% 20.9% 23.5%

25.9%

30%

11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 ・・・ 23/3 Dividend per Share Dividend Payout Ratio

Basic Policy for Shareholder Return Our basic policy is to provide stable shareholder returns over the medium to long term, and steadily increase shareholder dividends while working to achieve sustainable growth, appropriate capital structure and a strengthened financial position. Our mid- term management plan target for shareholder returns is a dividend payout ratio of 30%.

Policy for Shareholder Return

Mid-term management plan target

(Yen)

35

Intentionally blank

37

* The Company assumes that the consolidated income forecast for the fiscal year ending March 31, 2021 will see an impact from the spread of COVID-19 particularly in the first quarter, although the impact may fluctuate depending on the timing of containment and the effects on the economy along with other

• factors. If the need arises to adjust the income forecast going forward, we will

promptly make a disclosure.

• 3. Consolidated Income Forecast for

Fiscal Year Ending March 2021

• Lower sales and lower profit are expected due mainly to the impact of COVID-19.
• Dividend per share of 95 yen per share, an increase for 26 consecutive periods, and a dividend

payout ratio of 25.9% are expected.

38

Consolidated Income Forecast

(Billion Yen) Full-year Actual Growth Rate Full-year Forecast Growth Rate Net Sales

332.2 5.8%

330.4

(0.6%)

Gross Profit

35.1 6.8%

36.9

4.9%

Selling, General and Administrative Expenses

18.1 15.9%

20.2

11.2%

Operating Profit

17.0 (1.5%)

16.7

(1.9%)

Ordinary Profit

17.0 (1.7%)

16.4

(4.0%)

Net Income

11.8 (1.0%)

11.3

(4.5%)

YoY change YoY change

Dividend per Share (yen)

90.00 10.00

95.00

5.00

Earnings per Share (yen)

382.80 0.20

366.59

(16.21)

Dividend Payout Ratio

23.5% 2.6%

25.9%

2.4%

ROA (Return on Asset Ratio)

1.08% (0.11%)

0.97%

(0.11%)

ROE (Return on Equity Ratio)

6.6% (0.4%)

6.1%

(0.5%)

21/3 20/3

(0.57) (0.70) ＋0.45

39

20/3 4Q Cumulative Total 21/3 Full-Year Forecast

16.70

billion yen

17.01

billion yen

(0.28) +0.74 ＋0.79

• The speed of accumulation of operating assets will slow down, due mainly to a decrease in transaction volume

caused by COVID-19.

• Based on the strategy for enhancement of organizational strength, investments to reinforce the business

foundation (human resources, IT infrastructure) will continue, and an allowance for doubtful accounts will increase.

(0.44) (0.32)

Forecast on Factors Affecting Operating Profit

(Billion Yen)

Gross Profit

Selling, General and Administrative Expenses

0.31

billion yen Gross Margin for Leases and Installment Sales Business Gross Margin for Financial Service Business Others Financial Expenses Human Resources Strategic Expenses Other expenses Allowance for Doubtful Accounts

Breakdown of Operating Assets — Forecast

40

* Pre-deduction balance of securitizations of receivables, etc.

(Billion Yen)

Full-year Actual Growth Rate Full-year Forecast Growth Rate

Finance Leases

622.1 5.5% 627.0 0.8%

Operating Leases

30.5 5.3% 31.0 1.3%

Installment Sales

152.9 14.8% 158.0 3.3% 805.7 7.1% 816.0 1.3%

Loans and Others

190.7 18.8% 230.0 20.6%

Investment

22.6 144.9% 41.0 81.0%

Total Operating Asset

1,019.1 10.5% 1,087.0 6.7%

21/3 Total Transaction Volume for Leases and Installment Sales 20/3

41

• 4. Reference Material

42

Actual Results of Transaction Volume and Investment Amount

(Billion Yen)

* Transaction Volume for Leases and Installment Sales indicates the total collection amount during the contract period * Investment Amount indicates the amount to purchase assets

19/3 20/3

4Q cumulative total 4Q cumulative total Growth Rate Full-Year Forecast Finance Leases

266.8 294.9 10.5% 297.0 99.3%

Operating Leases

20.2 17.3 (14.3%) 19.0 91.4%

Installment Sales

86.1 101.7 18.1% 107.0 95.1% 373.2 414.0 10.9% 423.0 97.9%

Loans Transaction Volume

48.8 61.2 25.3% 53.0 115.5%

Total Transaction Volume

422.1 475.2 12.6% 476.0 99.9%

Investment Amount

7.2 13.8 91.8% 10.7 128.8% 429.3 489.1 13.9% 486.7 100.5%

Total

20/3 Achievement Rate

Total Transaction Volume for Leases and Installment Sales

43

Commission Business, Loans

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

(million cases) (Billion Yen)

16.07 17.55 18.19 20.07 22.19 16/3 17/3 18/3 19/3 20/3 47.1 60.6 72.0 78.1 100.6 4.9 5.9 6.7 7.9 11.1

• 15
• 13
• 11
• 9
• 7
• 5
• 3
• 1

1 3 5 7 9 11 13 15 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 16/3 17/3 18/3 19/3 20/3 Transaction volume Balance

 Loans Transaction Volume

(Billion Yen)

26.4 32.7 34.3 48.8 61.2 110.6 121.6 137.4 154.3 190.7 0.0 50.0 100.0 150.0 200.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 16/3 17/3 18/3 19/3 20/3 Transaction volume balance

44

Net sales and profit by segment

 Net Sales

(Million Yen)

 Segment Profit

(Million Yen)

* “Others” are the business segments which are not included in reporting segments, and include

• utsourcing technology services such as measurement, calibration and device inspection, loan and

factoring within the Ricoh Group, operation of a domestic cash management system and operation of solar power generation facilities

4Q cumulative total Growth Rate 4Q cumulative total Growth Rate Leases and Installment Sales Business

303,148 3.0% 320,115 5.6%

Financial Services Business

8,282 12.8% 9,439 14.0%

Others

2,525 (4.2%) 2,701 7.0%

Total

313,957 3.2% 332,256 5.8% 19/3 20/3

4Q cumulative total Growth Rate 4Q cumulative total Growth Rate Leases and Installment Sales Business

14,447 3.7% 13,765 (4.7%)

Financial Services Business

3,672 7.5% 4,609 25.5%

Others

171 (26.9%) 275 60.6%

Total

18,291 4.1% 18,650 2.0% 20/3 19/3

45

Overview of Consolidated Statements of Income

(Million Yen)

* Staffing Expenses out of Selling, General and Administrative Expenses have been calculated by including them in “Personnel Expenses” since the first quarter of 20/3. Accordingly, the figures for the actual results of the previous year have been stated by calculating in the same standard

4Q cumulative total Growth Rate 4Q cumulative total Growth Rate Full-Year Forecast Growth Rate Net Sales

313,957 3.2% 332,256 5.8% 330,400 (0.6%)

Leases

230,186 3.0% 238,418 3.6% 233,100 (2.2%)

Installment Sales

50,451 7.7% 51,105 1.3% 53,200 4.1%

Loans

2,888 10.9% 3,284 13.7% 3,800 15.7%

Commission Received

5,726 7.8% 6,132 7.1% 6,100 (0.5%)

Others

24,703 (5.5%) 33,315 34.9% 34,200 2.7%

Cost of Sales

281,013 2.9% 297,073 5.7% 293,500 (1.2%)

Leases

208,639 2.8% 215,456 3.3% － －

Installment Sales

47,632 7.3% 47,971 0.7% － －

Financial Expenses

1,022 (5.9%) 1,127 10.2% － －

Others

23,717 (3.8%) 32,518 37.1% － －

Gross Profit

32,943 5.4% 35,182 6.8% 36,900 4.9% 15,667 6.5% 18,164 15.9% 20,200 11.2%

Personnel Expenses

7,771 6.8% 8,398 8.1% 9,100 8.3%

Provision of Allowance for Doubtful Accounts

1,632 5.3% 2,879 76.4% 3,200 11.1%

Operating Profit

17,276 4.4% 17,018 (1.5%) 16,700 (1.9%)

Ordinary Profit

17,383 5.9% 17,087 (1.7%) 16,400 (4.0%)

Net Income

11,943 5.6% 11,827 (1.0%) 11,300 (4.5%) 20/3 19/3 21/3

Selling, General and Administrative Expenses

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