ORIX Corporation

The attendees are member of the Board of Directors, President and CEO, Mr. Inoue. Member of the Board of Directors, Cinemaging Executive Officer, Mr. Taniguchi. Executive Officer, Head of Treasury and Accounting Headquarters, Mr. Yano. Before we begin, we would like to ask you to make sure that you keep your mobile phones and other communication devices away from the telephone or turn them off in order to prevent feedback. If there is severe feedback during the meeting, the organizer may decide to interrupt the meeting for a short while and speak to the participant who may be causing the howling with your kind understanding. We will receive presentation from Mr. Yano, first half, and Mr. Inoue, second half, followed by Q&A. The duration of the meeting is expected to be approximately one hour. With that, we would like to begin the meeting. At this time, I would like to call upon Mr. Yano.

I am Yano, head of finance and accounting headquarters. Thank you very much for joining us in the financial results briefing today despite of your busy schedule. I would now like to explain our financial results for the second quarter of the fiscal year ending March 2022. So please open page two of the financial results briefing material on hand. In the first half of FY 2022, net profit was up 56.3% from the previous year to 146.7 billion Japanese Yen. This is a progress of 58.7% against a full-year profit forecast of 250 billion Japanese yen. ROE on an annualized basis was 9.5%. Although we did not reach our target of 11%, we are getting closer to achieving double-digit figure. We will continue to aim for improvement of the performance. Please see the chart on the right. This shows the trend of the quarter. Net income for the second quarter was 81.5 billion Japanese yen, the highest level since the COVID-19 outbreak. You can see that we have recovered to the level of the second and the third quarter of the fiscal year ended March 2020, before the outbreak of COVID-19. So please refer to the next page. The page shows the breakdown of segment profits, segment income, total 240.7%. 1 billion Japanese yen, an increase of 53.1%, compared with the same period of the previous fiscal year. In this section, we explain our results by dividing them into base profit and investment gains. The dark navy color base profit on the chart shows an increase of 45.6% year-over-year, 173.5 billion Japanese yen, which accounts for 72% of the total segment profit. In the domestic market, the corporate financial service and maintenance leasing and real estate segments recorded significant increase. As for the overseas, three segments excluding transportation equipment continued to perform well in the second quarter following the first quarter, contributing significantly to the increase in profits. The pale blue colored gain on sales increased by 77.1% year over year to 66.6 billion yen. At Oryx USA, we recorded gains on the sales of road safety the leading U.S. traffic infrastructure safety service business in the first quarter and in the second quarter due to the exit of several TE investees. In addition, in the real estate segment, we sold a total of three logistics facilities in the first half of the fiscal year. Seifi Company Limited, a business partner of Corporate Financial Services, is a video recording service company focused on surveillance cameras. The IPO of this company resulted in gains on the sale of shares held as well as valuation gains, which also made a significant contribution. Investment gains for the first half of FY March 2019 and the first half of FY March 2020 before the outbreak of COVID-19 was approximately 70 billion yen or so. So you can see that the gain on sales returned to the level before the outbreak of COVID-19. We intend to capture favorable market conditions to continue to realize gains on sales, as well as improving base profit. Please refer to page four and five. Now, breakdown of process analysis by segment is shown on these two pages. The table are shown to allow the investment community to grasp the situation of the segment. These are the information for each segment can be found from page 21 and onwards. So please refer to them at your leisure time. In this section, we will focus on some of the highlights. First of all, Oryx USA and the banking and credit segments which recorded gains on large sale divestiture in the first quarter reported lower earnings compared to the previous quarter, while the other eight segments reported higher earnings compared to the previous quarter. Compared with the same period of the previous fiscal year, five segments of corporate financial services and maintenance leasing, real estate Oryx USA, Oryx Europe, and Asia Australia recorded increasing profits. but the extent of increase in these segments was in units of 10 billion yen, respectively in terms of the rate of increase that ranged from 67% to 446%.

In the corporate sales and maintenance fees segment, in the corporate sales unit, we recorded valuation gains and gains on sales associated with the IPO of an investee, as mentioned before in the second quarter. In the automotive unit, in addition to the strong performance of the U.S. car market, The sales policy emphasizing profitability for assets above fruit, resulting in substantial increase in profit. Renting units also doubled earnings due to growing demand for rental products and the impact of rising prices in the used equipment market. In the investment operations units in the real estate segment, we generate gains in the sales of logistics and other facilities, and hotels and inns continue to be affected by COVID-19, and have not really contributed to profits. However, with the termination of emergency declaration, operations are gradually improving. If this unit recovers, we can expect a further result. In Daikyo, profits doubled due not only to the sales of newly built condominiums, but also to the purchase and resale of pre-owned condominiums, as well as the steady performance in condominium and building management. Oryx USA Business. In addition to gains from the sale of private equity investments, sales of real estate loan origination and asset management services such as Zulmint were strong. Regarding Oryx Europe, AUM continues to rise. The balance at the end of the second quarter was 328 billion euros, a new record high on a quarterly basis. In particular, the balance of sustainable development Equity funds, in which Robeco has strength, have increased, and these AUM expansions have contributed to the increase in fee income. In the Asia and Australia segment, some investees recorded impediment losses in the previous fiscal year, but income from investees increased in the current fiscal year. In addition, leasing increased in South Korea and China, while in Australia, auto leasing performed well, resulting in a significant increase in profits. Please turn to page five. Segment assets increased mainly in the environment and energy segment and the Asia and Australia segment. In the environmental energy segment, we successfully completed the M&A of Elowan, a Spanish-based renewable energy company, in July. In the Asia and Australia segment, we are increasing lease assets, primarily in South Korea and China, where COVID-19 impact has a lesser impact. As a result of these factors, segment asset ROA on an annualized basis improved to 2.6%, a year-on-year increase of 0.9%. Like ROE, we would like to continue to improve ROA. And finally, once again, looking back at our overall performance, we can say that the second quarter has been returned to pre-COVID level. despite the fact that some units continue to experience sluggishly earnings due to impact of COVID-19, thanks to the strong performance of other units. That's all from me. Next, we would like to invite our CEO, Mr. Inoue.