ORIX Corporation

Thank you for joining Oryx Corporation for annual results for the Council of the Fiscal Year ended March 31st, 2025, despite your very busy schedule. I'll be the master of ceremony. My name is Anna Kane from IR and Sustainability Department. Thank you for this opportunity. The attendee at today's conference is Member of the Board, Representative Executive Officer, President and CEO I owe Hidetake Takahashi and also Kazuki Yamamoto, operating officer responsible for investor relations. Now, Takahashi Yamamoto will give presentation followed by a Q&A session. The briefing session is scheduled to last approximately one hour. I would like to hand over to Mr. Yamamoto. Thank you.

I am Yamamoto from Oryx. So I would like to now report on the consolidated net income for Oryx for 25 March end. So please refer to page three to begin with. So consolidated net income for the fiscal year ending March 2025 was 351.6 billion yen, which was announced at 3.30. Although it fell short by 9.8% compared to the forecast of 390 billion yen, but the NAIF income was up 2% from the previous year's result of 346.1 billion yen. OREX once again achieved record high profit. The full-year ROE was 8.8%. At the end of FY25 March end, The market had changed significantly with increased uncertainty due to disruptions in the global supply chain and fluctuations in resource prices. As a result, we reviewed future prospects for our businesses, and after considering these uncertainties, we recorded total impairments of 53.1 billion yen on a pre-tax basis for some assets and investments. On the other hand, many... Segments, including PEN concession, aircraft and ships, and corporate financial services improved their performance, leading to another record high profit for the full year. On the next page, we will explain pre-tax profit and segment profit based on the three categories. Slide 4. If you could refer to the bottom row of the table below, compared to the net income of 351.6 billion yen mentioned earlier, pre-tax profit was 480.5 billion yen, which is 10.5 billion yen more than the same period last year. The profit from the stand segments, excluding headquarters costs, came at 544.7 billion yen. Now I will explain the breakdown using the three categories. First profit from the finance category was 176.3 billion yen. Last year, we booked a gain from the sales of Oryx Credit. So excluding that impact, profits were higher. The main factors behind the profit increased were strong investment income from Oryx Life Insurance and the U.S. private credit businesses. The profit from the operation category was 200.2 billion yen. Profit declined year over year, mainly due to our conservative revision of plans, more than the conservative plan of FY22 March 1 for the biomass coal-fired power plants, that resulted in an impairment of approximately 20 billion yen. On the other hand, contributions from Kansai Street Airports, Robeco and Santoku Shipping resulted in higher profits excluding impairments. Regarding the investments category, segment profits were on 168.2 billion yen, a significant increase of 56.2 billion yen compared to the same period last year. Two exits were realized in the domestic PE business thanks to contributions from significant improvements in profits at investees and investment gains in the U.S. and real estate sectors. Segment and increase profits from equity method investees like Avalon. Next, we will explain segment profit in terms of base profit and investment gains. So please proceed to the next page. Out of total segment profits of 544.7 billion, the so-called base profit was 457.1 billion yen, a 5% increase from the previous year. Investment gains net of impairments were 87.6 billion yen. Base profits exceeded 100 billion yen in all four quarters for the first time in FY25 March end. The overall operations and investment portfolio contributed solidly to profits supported by the recovery from the pandemic in band demand and the steady recovery of domestic economic activities. Through value creation in our strong domestic PE investment ships, aircraft leasing, and European asset management businesses, and in businesses expected to grow further, we will continue to drive sustainable base profit growth for the Oryx Group. Additionally, investment gains through capital recycling are one of the pillars for realizing profits in a diversified operating and investment portfolio. In the fourth quarter, investment gains bore a net loss of about 2 billion yen due to impairments exceeding 50 billion yen. However, we were able to record... Gross investment gains exceeding 50 billion yen through PE investment exits in Japan and the U.S., making full-year gross investment gains larger than the same period last year, and second only to the first fiscal year, FY22 margin, when we booked the investment gains on the Yayoi sales. Finally, we will discuss the progress of capital recycling. In the fiscal year ending March 2025, we recorded capital gains of 140.7 billion yen for the full year. The cash inflow from the sales for the full year was about 645 billion yen, while new executions amounted to about 600 billion yen in total. So, So therefore, there was a difference as been indicated. The assets sold were primarily those with strong performance, such as the two domestic PE investees listed here, where optimal buyers were selected for the firms from... both domestic and international bidders. In corporate financial services, the selection of business succession targets progressed in the micro-business succession M&A project faster than the past several years, resulting in three exits. Additionally, there was a significant cash inflow from the sales of a large mouth-type purpose facility in Tokyo, which had been a long-term holding while its value was being enhanced. These cash inflows were used for new investments focused on the domestic real estate, domestic PE, and aircraft following the usual IRR focus selection process. Among these, we proactively invested in aircraft based on the assumption that the supply and demand for aircraft will remain tight in the future. For this fiscal year, we will continue to execute new investment while striking the right balance between recouping investment through capital recycling. We will remain flexible in making a decision if we think the deal will contribute to OREX's future growth. So you can see the pipeline on the following page. Now, vertical axis representing investment amount and the horizontal axis representing the time required from investment execution to earnings contribution so at rx from the time of investment we would try to swiftly try to generate the profit from like ships and aircraft and also in addition to private equity investment On a long-term perspective, we will try to make an investment that would allow us to enjoy a capital gain for many years to come. So we will try to identify investment that benefits from inflationary environment and also proceed with execution if we can enjoy better terms and conditions. terms and conditions for the deal. Now, so we have roughly about, as you can see, more than 2 trillion yen of investment, and that will remain to be unchanged. And this concludes my presentation, and I would like to hand over to President Takahashi, who will present on our forecast for the new year.

So good afternoon.