Results Briefing for the Fiscal Year Ended March 2011 April 26, - - PowerPoint PPT Presentation

Results Briefing for the Fiscal Year Ended March 2011

April 26, 2011

Ricoh Leasing Company, Ltd.

Contents Contents

• Consolidated Results
• Transaction Volume by Business
• Balance of Operating Assets and Default Rate
• Selling, General & Administrative (SG&A) Expenses
• Financial Position
• 1. Performance Overview (Fiscal year ended March 2011)
• P. 3

.7 .9 .10 .11

• 3. Forecasts (Fiscal year ending March 2012)
• Consolidated Income Forecast
• Transaction Volume Plan
• P. 21

.23

• 2. Medium-term Management Strategy (FY2011 to FY2013)
• Our Goal
• Basic Policy and Key Strategies
• Sales Strategy for Priority Areas
• Goals for Financial Results and Target Management

Indicators

• Transaction Volume Target

P.13 .14 .15 .18 .19

1 1

• 1. Performance Overview

(Fiscal year ended March 2011)

10/3 11/3

Actual Initial forecast Forecasts at 2Q Actual Change (%)

Revenue 2,285 2,240 2,280 2,297 0.5 Gross profit 280 280 290 299 6.9 Selling, general and administrative expenses 164 160 145 176 7.3 Operating income 115 120 145 122 6.4 Income before special items 113 117 143 121 7.5 Net income 66 68 81 70 5.5

(Yen, %) YoY EPS 213.17 219.43 259.79 224.92 11.75 Dividends 38.00 38.00 38.00 39.00 1.00

Consolidated Results Consolidated Results Consolidated Results

Performance Overview

(100 million yen, %)

3 3

Impact of Great East Japan Earthquake and Tsunami Impact of Great East Japan Earthquake and Tsunami Impact of Great East Japan Earthquake and Tsunami

Performance Overview

1.

• 1. Employees of Ricoh

Employees of Ricoh Leasing Leasing Group Group ・ ・There have been no human casualties. There have been no human casualties.

• 2. Damage to offices
• 2. Damage to offices

・ ・No offices suffered material damage. No offices suffered material damage.

Currently, all of our offices located in affected Currently, all of our offices located in affected areas including Sendai, Morioka, Koriyama, areas including Sendai, Morioka, Koriyama, and Mito are operating as usual. and Mito are operating as usual.

• 3. Allowance for doubtful accounts
• 3. Allowance for doubtful accounts

・ ・Allowance for doubtful accounts related to Great East Japan Eart Allowance for doubtful accounts related to Great East Japan Earthquake hquake and Tsunami: 3 billion yen and Tsunami: 3 billion yen

• 4. Measures for reconstruction assistance
• 4. Measures for reconstruction assistance

・Provide leases and loans for reconstruction assistance leases and loans for reconstruction assistance ・ ・Based on a request by Ministry of Economy, Trade and Industry, Based on a request by Ministry of Economy, Trade and Industry, take flexible measures including an extension of lease payments take flexible measures including an extension of lease payments to local to local SMEs SMEs located in affected areas located in affected areas ・ ・Provide monetary donations for reconstruction assistance Provide monetary donations for reconstruction assistance ・ ・Donate office and IT Donate office and IT-

• related equipment

related equipment 4 4

Factors Affecting Operating Income Factors Affecting Operating Income

(100 million yen)

115 10/3 Actual 11/3 Actual ▲4 122 ＋7 +2 Change in lease accounting standards Increase of expenses Increase in bad debt expenses default rate Improvement of gross margin on commission income +2 Decrease in financing cost +8 Increase in re- releasing (replacement) +7 Performance Overview Items of Gross Profit Items of Gross Profit

Items of SG & A Expenses Items of SG & A Expenses

▲8

5 5

Breakdown of Revenue Breakdown of Revenue Breakdown of Revenue

(100 million yen, %)

10/3 11/3

Actual Actual YoY

Leasing revenue

1,950 1,921

• 1.5

Installment revenue

104 137 31.7

Revenue from loans

20 19

• 0.9

Received commission

24 27 12.4

Other revenue

186 191 2.5

Total revenue

2,285 2,297 0.5

Performance Overview

6 6

Transaction Volume by Business Transaction Volume by Business 10/3 11/3

Actual Actual YoY Finance leases

2,055 2,021

• 1.6

Operating leases

65 81 24.6

Installments

146 218 49.2

Lease/installment business

2,267 2,322 2.4

Financial services business

153 153 0.2

Total transaction volume

2,421 2,476 2.3

(100 million yen, %) *The above transaction volume is based on acceptance inspections *The above transaction volume is based on acceptance inspections Performance Overview

7 7

10/3 11/3

Actual Actual YoY

Office and IT-related equipment 1,586 1,602 1.0 Medical equipment 352 335

• 5.0

Industrial machinery 105 90

• 13.7

Commercial and service industry equipment 102 129 26.2 Vehicles and transport equipment 43 60 38.3 Others 77 104 35.1 Total transaction volume 2,267 2,322 2.4

Japan Leasing Association Accumulated in 10/4 to 11/2

YoY

• 2.5
• 2.3
• 20.6
• 6.7

4.4

• 16.9
• 6.9

(100 million yen, %)

Lease/Installments Business - Transaction Volume by Business Lease/Installments Business - Transaction Volume by Business Performance Overview

8 8

Balance of Operating Assets and Default Rate Balance of Operating Assets and Default Rate

* Figures show balances with securitized portions not deducted.

4,000 5,000 6,000 4,824 4,824 4,740 4,740 89 89 101 101 354 354 339 339 668 668 661 661 07/3 08/3 09/3 10/3 3,000

～ ～ ～ ～

Default rate = Default loss amount / Average balance of trade assets Default rate

Finance leases (of which, securitized portion)

Loans Installments

Operating leases

(247) (247)

5,843 5,843 5,937 5,937 (100 million yen) 327 327 686 686 5,774 5,774 0.43 0.43 0.47 0.47 0.65 0.65 4,552 4,552 83 83 359 359 744 744

(250) (250)

5,739 5,739 4,625 4,625 0.71 0.71 135 135 11/3 4,420 4,420 84 84 412 412 776 776

(239) (239)

5,694 5,694 0.52 0.52 Performance Overview

9 9

Selling, General & Administrative (SG&A) Expenses Selling, General & Administrative (SG&A) Expenses Selling, General & Administrative (SG&A) Expenses

(100 million yen) 60 40 20 80 1H of 08 2H of 08 1H of 09 28 26 27 31 29 28 8 29 30 68 85 85 2H of 09 27 29 22 79 1H of 10 27 29 14 71

Allowance for bad debt Personnel expenses Other revenue

2H of 10 32 30 42 105

Performance Overview

100

10 10

40.6 48.2 50.6 50.6 07/3 09/3 10/3 11/3

Financial Position Financial Position Financial Position

Rating Position S&P R&I JCR

* Interest-bearing debt shows balance with debts payable due to securitization not deducted. Capital costs show expenses included in gross profit on sales.

A+ AA- 5,544 5,091 4,912 (100 million yen)

Long term debt Short term borrowings Total procurement amount

27 27 45 45 39 39 31 31 45 45 30 30 15 15 Financing cost

Fixed-charge coverage ratio

(100 million yen) 44 44 08/3 5,485 5,375 52.6 52.6 51.3 51.3 A+ Performance Overview

11 11

1,000 3,000 5,000

• 2. Medium-term Management

Strategy (FY2011 to FY2013)

Medium-term Management Strategy

Our Goals Our Goals Our Goals Pursue enhanced Pursue enhanced corporate value corporate value

Financial Service Company with Sustainable Profit Growth Financial Service Company with Sustainable Profit Growth

• 1. Company that is trusted by customers and has earned their loyalty
• 2. Employees have aspirations for the future and work hard
• 3. To be admired as a corporate citizen and lead the industry through

environmental management activities

• 4. Live up to shareholders’ expectations with outstanding financial results

Customer value Employee value Harmony with society Shareholder value Corporate value 13 13

Medium-term Management Strategy

Basic Policy and Key Strategies Basic Policy and Key Strategies Basic Policy and Key Strategies

Increase prime asset balances Increase prime asset balances by strengthening operating by strengthening operating base base Respond actively to demand Respond actively to demand for reconstruction and create for reconstruction and create promising new lines promising new lines

Further reinforce business Further reinforce business structure with high levels of structure with high levels of efficiency and profitability efficiency and profitability

Promote CSR management Promote CSR management Develop human resources and Develop human resources and enhance organizational enhance organizational capabilities capabilities

(1) Enhance value offered to vendors (1) Enhance value offered to vendors (2) Reinforce sales contacts with excellent customers (2) Reinforce sales contacts with excellent customers (3) Develop financial service business (3) Develop financial service business

(1) Respond to demand for reconstruction and absorb pent (1) Respond to demand for reconstruction and absorb pent-

• up

up demand demand (2) Expand rental business (2) Expand rental business (3) Exploit new fields and develop new services (3) Exploit new fields and develop new services

(1) Enhance corporate strength through changes in business proce (1) Enhance corporate strength through changes in business procedures dures (2) Reinforce earnings from secondary revenue sources (2) Reinforce earnings from secondary revenue sources (3) Provide adequate funding at stable and lower costs (3) Provide adequate funding at stable and lower costs (4) Reduce accident losses by improving credit management and co (4) Reduce accident losses by improving credit management and collection llection

(1) Improve internal control functions (1) Improve internal control functions (2) Strengthen risk management activities for various risks (2) Strengthen risk management activities for various risks (3) Accelerate environmental management (3) Accelerate environmental management

(1) Develop human resources who can respond quickly to changes i (1) Develop human resources who can respond quickly to changes in the n the environment environment (2) Operate organization actively with a sense of unity (2) Operate organization actively with a sense of unity (3) Develop a company (3) Develop a company-

• wide climate in which employees obtain job

wide climate in which employees obtain job satisfaction satisfaction

Basic Policy Basic Policy

Key Strategies Key Strategies

14 14

Sales Strategy on Priority Areas Sales Strategy on Priority Areas

Lease/installment business (Office and IT-related equipment) Medium-term Management Strategy

Fiscal year ended March 2011 Fiscal year ending March 2014

Actual Target

Average growth rate Transaction volume

• f office and IT-related

equipment

JPY 160.2 B JPY 176.0 B

3.2%

• Increase transactions through strengthened

business relationships with important vendors

• Solution approach to excellent customers using

relationships with vendors

• Expand rental business
• Develop new products that respond to customer

needs Expand our business domains Increase added value

Expand customer segment

←Type of equipment→ Hardware Solution services

(Hardware) MFP/LP, PC/Server (Hardware and services) Carbon offset PCMS rental

← Customer size → Large Small S2 5 to 29 M2 100 to 299 S1 1 to 4 M1 30 to 99 L1 300 to 999

2,041,000 offices (34.7%) 50,000 offices (0.8%) 12,000 offices (0.2%) Economic Census (former Statistics

• n Business)

3,520,000 offices (59.8%) 264,000 offices (4.5%) Number of employees

L2 (Major Account) More than 1,000

15 15

Medium-term Management Strategy ← Area → Medical care Nursing care/welfare

Expand our business domains

• Enlarge a target segment to medium-scale

hospitals

• Expand target areas to nursing care and welfare
• Promote business tie-up with medical device

manufacturers

• Develop products that respond to sales strategies
• f manufacturers and customer needs

Fiscal year ended March 2011 Fiscal year ending March 2014

Actual Target

Average growth rate Transaction volume of medical

device

JPY 33.5 B JPY 40.0 B

6.0%

Increase business areas

Expand customer segment

99,635 facilities 6,047facilities 2,692 facilities

Medical Facility Survey by Ministry of Health, Labor and Welfare * The number of medical facilities is as of October 1, 2009.

Sales Strategy on Priority Areas Sales Strategy on Priority Areas

Lease/installment business (medical devices) Lease/installment business (medical devices)

General clinic with 0 to 19 beds Medium-scale hospital with 20 to 199 beds Large-scale hospital with more than 200 beds

Number of beds

← Customer size → Large Small

16 16

Fiscal year ended March 2011 Fiscal year ending March 2014

Actual Target

Average growth rate Received commission

JPY 2.7 B JPY 3.6 B

10.6%

Monthly transaction volume of collection services

540,000 cases 1,000,000

cases

1.9 times

Key business fields of Ricoh Leasing ← Customer size → Large Small ← Number of collections → Small Large

Expand

• ur

business fields

• Obtain small customers effectively by

reinforcing Web marketing

• Exploit large-scale customers with dedicated

sales teams

• Specialize in industries including nursing care

and education

• Develop and expand product services

19 34 41 54 1 million cases 20 40 60 80 100 120 08/3 09/3 10/3 11/3 14/3

(10 thousands of cases)

Number of monthly collections Number of monthly collections Medium-term Management Strategy

Sales Strategy for Priority Areas Sales Strategy for Priority Areas Financial service (collection agency) Financial service (collection agency)

17 17

Expand customer segment

Increase target industries

Financial Results Goal/Target Management Indicators Financial Results Goal/Target Management Indicators Revenue Operating income Net income Operating profit margin JPY 229.7 B JPY 12.2 B JPY 7.0 B 5.3% JPY 230.0 B JPY 14.0 B JPY 8.0 B

6.1%

FY10

(term ending March 31, 2011)

Actual

FY13

(term ending March 31, 2014)

Plan

ROE (Net earnings

ratio to net worth)

7.1%

6.8%

0.0% 4.6% 4.4% 0.8%

Average growth rate

－

ROA (Net earnings

ratio to total assets)

1.13%

1.26%

0.13%

Change (%)

Medium-term Management Strategy

JPY 248.5 B JPY 13.1 B JPY 7.7 B 5.3%

FY07 FY07

(term ended March 31, 2008) (term ended March 31, 2008)

Actual

9.4% 1.15% 18 18

JPY 272.5 B Lease/installment business JPY 176.0 B

Office and IT- related equipment

JPY 279.6 B JPY 199.5 B

FY13

(term ending March 31, 2014)

Target Medical equipment

JPY 40.0 B JPY 31.6 B

Transaction Volume Target Transaction Volume Target

FY07

(term ended March 31, 2008)

Actual

6.0% 5.5% 3.2%

Average growth rate

JPY 21.5 B Financial services business JPY 14.3 B 11.8% Transaction volume JPY 595.0 B

Balance of

• perating assets

* before net of securitization of lease assets

JPY 593.7 B 1.5%

Medium-Term Management Strategy

JPY 294.0 B Total transaction volume JPY 294.0 B 5.9% JPY 232.2 B JPY 160.2 B JPY 33.5 B

FY10

(term ending March 31, 2011)

Actual

JPY 15.3 B JPY 569.4 JPY 247.6 B 19 19

• 3. Forecasts

(Fiscal year ending March 2012)

Consolidated Income Forecast Consolidated Income Forecast

(100 million yen, %) (Yen)

11/3 12/3

Actual Forecast Change (%)

Revenue 2,297 2,251

• 2.0

Gross profit 299 292

• 2.5

Selling, general and administrative expenses 176 157

• 11.3

Operating income 122 135 10.2 Income before special items 121 133 9.1 Net income 70 76 8.2

YoY

EPS 224.92 243.46 18.54

Consolidated Income Forecast

21 21

Revenue Forecast Revenue Forecast Revenue Forecast

(100 million yen, %)

11/3 12/3

Actual Forecast Change (%)

Leasing revenue 1,921 1,862

• 3.1

Installment revenue 137 148 7.7 Revenue from loans 19 21 5.0 Received commission 27 28 4.8 Other revenue 191 191 0.2 Total revenue 2,297 2,251

• 2.0

Consolidated Income Forecast

22 22

Transaction Volume Plan Transaction Volume Plan Transaction Volume Plan

(100 million yen, %)

11/3 12/3

Actual Forecast Change (%)

Finance leases

2,021 2.031 0.5

Operating leases

81 84 2.7

Installments

218 220 0.5 Lease/installment business 2,322 2,335 0.5

Financial services business

153 159 3.3 Total transaction volume 2,476 2,494 0.7

Consolidated Income Forecast

23 23

Lease/Installment Business - Transaction Volume Plan by Business Lease/Installment Business - Transaction Volume Plan by Business

(100 million yen, %)

11/3 12/3

Actual Forecast Change (%)

Office and IT-related equipment 1,602 1,593

• 0.6

Medical equipment 335 355 5.8 Industrial machinery 90 92 1.4 Commercial and service industry equipment 129 130 0.4 Vehicles and transport equipment 60 60 0.7 Others 104 104 0.0 Total 2,322 2,335 0.5

Consolidated Income Forecast

24 24

1H of 08 2H of 08 1H of 09 2H of 09 1H of 10 2H of 10

0.0% 20.0%

Consolidated Transaction Volume (Lease/Installment Business) Consolidated Transaction Volume (Lease/Installment Business) Consolidated Transaction Volume (Lease/Installment Business)

Ricoh Leasing Ricoh Leasing transaction transaction volume (100 volume (100 million yen) million yen) Ricoh Leasing Ricoh Leasing transaction transaction volume (Y volume (Y-

• Y %

Y % change) change)

* Japan Leasing Association transaction volume (Y-o-Y % change) of 11/3 2H is the total amount from 10/10 to 11/2.

(100 million yen)

Japan Leasing Association transaction volume (Y-o-Y % change) * *

Consolidated Income Forecast

• 5.6%
• 22.0%
• 16.1%

+6.5%

• 13.9%
• 16.8%
• 20.5%
• 17.5%
• 9.4%

+4.6%

• 3.5%
• 6.6%

+8.1% +0.2%

1H of 11 Forecast 2H of 11 Forecast

1,126 1,141 1,057 1,360 1,193 1,128 1,115 1,220

25 25

500 1,000 1,500

Reference Material – FY 12/3 Forecast of Factors Affecting Operating Income

(100 million yen) 122 11/3 Actual 12/3 Forecast Decrease in bad debt expenses default rate Change in lease accounting standards Increase in re- releasing (replacement) Decrease in financing cost

+13

+4 +1 Items of Gross Profit

Items of SG & A Expenses

▲13 ▲1 Increase of expenses Increase in commission income +1 135 +21

26 26

The plans and forecasts provided in this document are based on information available at the time of its preparation. Actual results may differ considerably from these plans and forecasts due to a variety of significant factors.

Ricoh Leasing Company, Ltd

Reliability for the Future

Ricoh Leasing Company, Ltd. Ricoh Leasing Company, Ltd.