ORIX Corporation

It's time to start the meeting. Thank you for joining this conference of RX Corporation for first quarter. Consulted financial results for the three-month period ended June 30th, 2026. I'll be the master of the ceremony. My name is Tomioka with IR. Thank you. The attendees at this conference are Masataka Yamada, Senior Managing Executive Officer, Chief Financial Officer and Chief Strategy Officer, and Kazuki Yamamoto, Operating Officer, responsible for investor relations. Both Yamada and Yamamoto will provide you with explanation, which will be followed by Q&A. The whole meeting should last approximately one hour. Now we would like to hand over to Yamada-san.

Thank you very much for taking time out of your busy schedule to attend the Oryx Group Financial Results Briefing today. I'm Masataka Yamada, Oryx Group CFO and CSO. Without further ado, I'd like to explain the financial results for the first quarter of FY2027. First, please turn to page 2 of the presentation deck. The points we would like to convey at today's briefings are the following three points. Net income is the first. Stronger core earnings power and robust capital recycling. And the third, first half earnings forecast and dividend policy. I will explain the first and the third points, and then Operating Officer Yamamoto, who oversees IR, will explain the second point. The first point is net income. Net income for the first quarter was 280.8 billion yen, an increase of 173.5 billion yen year over year, marking the highest quarterly profit on record. Progress against the full-year net income forecast of 530 billion yen was 53%. Gains related to the sales and valuation gains on Kioxia shares held by Toshiba, one of our investees, contributed significantly. The second point is Oryx's stronger core earnings power and robust capital recycling. Regarding our core earnings power in the first quarter of this fiscal year, Oryx Europe expanded its AEM to record high levels primarily through Robeco. Thank you for watching. Next, regarding capital recycling, we proceeded with the exit as planned for domestic PE investee Sugiko, as well as multiple PE investments at OREX USA, including peak utility and network connects. Regarding OREX Bank, the transfer of all shares to Diver Securities Group was completed on August 3rd. Additionally, as announced on the same day, we have signed a share transfer agreement for the 100% acquisition of Airfin, a major aircraft parts-out company. We are steadily advancing capital recycling while maintaining a balance between investments and divestments. The third point is the first half earnings forecast and dividend policy. We have calculated our first half net income forecast at 840 billion yen. Of this, 300 billion yen is categorized as adjusted profit, and 540 billion yen, which is non-cash profit, is categorized as kyokusha sale and valuation gains. We have changed our policy to use adjusted profits as the source of dividends. The full year net income forecast of 530 billion yen remains unchanged. Details will be explained on the following pages. Please turn to page 3. I will explain our first half net income forecast for FY27. Our net income is significantly affected by fluctuation in the price of Kyoksha shares held by Toshiba. This page shows the results of a calculation of the first half net income forecast based on Kyoksha share price at the end of June. The blue bar graph on the furthest left represents the full-year net income forecast of 530 billion yen we announced on May 11th, calculated based on the assumption that Toshiba would continue to account for kiosk-related gains and losses as equity method earnings. The box immediately to the right briefly explains the announcement of May 21st. which was the result of calculating the impact on our first quarter results following our revised assumptions namely Toshiba's change to market valuation of Kyoxya shares in its full year results for FY26. Next, the grey and red bar graph, second from the right, shows the first quarter net income of 280.8 billion yen mentioned on the previous page broken down into 121.7 billion yen of Kioxia sale and valuation gains in grey and 159.1 billion yen of adjusted profits in red. This Kioxia sale and valuation gains of 121.7 billion yen is based on the valuation gains recorded by Toshiba using Kioxia's share price at the end of March, which was 19,080 yen, as shown at the bottom of this page. Finally, the bar graph on the far right shows our first half net income forecast, which was also calculated based on Kyokusha's share price at the end of June, which was 89,680 yen. Sorry to repeat myself, but the first half net income forecast is 840 billion yen, which includes one Kyoxya sale and valuation gains grade of 540 billion yen and adjusted profits in red of 300 billion yen. Next, please turn to page 4. The reason we kept the full year net income forecast unchanged at 530 billion yen is that it is difficult to predict the impact of Kyoxya sales and valuation gains on our full year net income. For every 10,000 Japanese yen change in Kyoksha share price, our after-tax Kyoksha sale and valuation gains fluctuate by 57 billion yen. This is calculated based on Toshiba's holdings of Kyoksha shares. As of the end of June, Kyoksha share price was 89,680 yen at the end of June, and the closing price yesterday, August 5th, was 54,300 yen. Depending on Kyoxya's share price at the end of September, we may record Kyoxya's sale and valuation losses in the third quarter. Now, with the improvement in core earnings power as a backdrop, we plan to steadily grow adjusted profits in the second half as well. Now next, please. Turn to page 5. This page explains the change in dividend policy for the 27 fiscal period. In the center of the page, we have again given a definition of Kyoxya sales and valuation gains. This refers specifically to the portion of Toshiba-related investment gains and losses related to the sales and valuation gains on Kyoxya shares after tax. Under our revised dividend policy, we will define adjusted profits as the portion of accounting net income excluding kiosk sales and valuation gains and use this as a source of dividends. There is no change to our approach or policy of paying either in that 39% of payout ratio or the previous year's dividend of 166.10 Japanese yen, whichever is higher. Based on the first half adjusted profits forecast of 300 billion yen, and calculated under revised dividend policy, the interim DPS for this fiscal year will be 107.27 yen. This concludes my presentation. Next, Operating Officer Mr. Kazuki Yamamoto will provide some additional commentary.

Yes, I'm Kazuki Yamamoto with SYNC Corporate Planning, Iron and Sustainability. I will use page 6 and 7 to talk about Japan and APAC, infrastructure, US and Europe, and insurance. Before those new segments, I would like to talk about the pre-tax profits and assets year over year, and also a comparison against the end of a prior fiscal year. Infrastructure performed well with higher profit excluding large gains on sales recorded in Q1 of the previous fiscal year. So profits increased year-on-year in three segments excluding infrastructure. As it's increased, this is end of a prior fiscal year at Oryx USA in USA and Europe segment and expanded leading executions due to expanded leading executions, but there's no significant changes in the other three segments. I would like to use some supplemental material to explain. Please turn to page 13. Profit for Japan on APAC was 289.8 billion yen, an increase of 237.6 billion yen year over year. In addition to gains of approximately 62.3 billion yen from sales of Sugiko, a domestic PE investee, the auto business expanded new lease origination. and that contributed. Excluding the 179.8 billion yen from Kyokushio sale and valuation gains, segment profit was 110 billion yen, an increase of 57.8 billion yen year-over-year, compared to the 52.2 billion. Asset increased slightly because of the new execution and equity investment increase, Toshiba and Asia Pacific FX. But balance was slightly declining in Greater China. Please refer to page 15 for the list of PE Investees exits and new items. And also for breakdown of APAC and Greater China, please refer to page 16. IPEC in Japan accounts for 33% of the total segment asset. Please turn to page 17. Infrastructure segment. Segment profit was 43.3 billion yen, a decrease of 25.1 billion yen year over year. If we exclude the absence of the sales on gain from the prior year, it's actually an increase. Avalon and SHIB's business benefited from favorable market conditions and achieved growth in both gains and the sales of their current least revenues. We will try to close the deal by 26. And for energy... There's been problem with the output regulation or restriction in renewable energy and the profit was down. And concession including Kansai Airport actually declined in profit over the year. The details are shown on page 18 for your reference later. Segment assets. While strong performance at Avalon and continued investment in ships boosted assets, this was offset by aircraft sales and exit from logistics center and real estate, and it was down slightly year over year. Moving on to page 22, USA and Europe. Segment profit was 63 billion yen, an increase of 52.4 billion yen year over year. Oryx USA recorded fair value gains from PE investments and Robeco and others overseen by Oryx Europe significantly expanded AUM and grew fee income As for segment assets, NXT Capital Loan asset-based lending continued and this pushed up the numbers At Oryx, as for Oryx USA, please refer to page 23 for LOB profit and asset breakdown for your reference. Moving on to page 25, insurance segment. Segment profit was, this is mostly Oryx Life, but it was up 3.9 billion yen at the 28 billion yen. Fed by strong earnings from yen-denominated whole life insurance products newly launched in the previous year and also we acquired high value contracts for corporate high net worth clients resulting in increased insurance profit. Investment profit was also strong. Assets increased slightly as investment assets grew on the back of expanded premium income. Please return to page six. For the four segments, Based on their performance in the first quarter, as you can see at the bottom segment profit basis, this was 173% and for pre-tax profit 161% and net income 162%. So compared to the prior year, the profit was up in each of these lines. And the progress is a 53% against the full year forecast. Moving on to page 7. At the end of the line, you can see the segment asset in total. 14.4261 trillion yen. Up 190.9 billion yen a year. And the total assets was 18.257 trillion yen, including 3.262 trillion yen for assets from discontinued operations. Please turn to page 8. This page shows the relationship between the business lines comparing the four new segments and the three categories, finance, operations and investments that we have been using. To clarify the understanding based on this, please turn to page 9. So this is the four-year outlook and also the pre-tax of profit and progress year over year for the three conventional categories. Human profit for finance was 45.2 billion yen, an increase of 6.6 billion yen year-over-year, with achievement of 27% against the full-year plan. The main driver of the profit was an increase of insurance. Please note that both the four-year forecast and the Q1 results do not include profits from Oryx Bank because this is going to be classified as discontinued operation in Q2. Q1 profit for operation was 55.4 billion yen. A decrease of 8 billion yen year over year because of the absence of the gain on sales of the prior year. Oryx and Robeco fees are strong and also domestically Oryx Auto has been continuing its strength and therefore the progress was 23%. Last but not least, Q1 profit for investment was 323.5 billion yen. and this includes Kioxia. And the overall progress was 112% exceeding the original plan. But if we exclude Kioxia sales and valuation gains, the profit was 143.7 billion yen. In this case, an increase would be 90.4 billion yen year over year and 50% progress. So the dotted line in the middle is representing what I've just explained. Nothing more to page 10. Capital recycling for this year. Capital gain recorded was 115.7 billion yen and cash inflows from capital regroupment was approximately 300 billion yen. PE Unit and Oryx USA exited PE Investees and made steady progress. Additionally, we sold logistics facilities. and the multiple aircrafts. Cash outflows was approximately 80 billion yen. In addition to the PE investment in Nihon Information Industry Corp as first deal for the joint funding established with the Qatar Investment Authority, we have been investing in developer-owned businesses in logistics, aircrafts and ships. Cashing is much higher than cash out, but based on the current status of pipeline, we will continue to capital recycling and optimize the portfolio. The full year outlook remains unchanged from the forecast announced in May, as you can see to the right. But air thin acquisition has been already announced, and 80 billion yen new investment actually includes this. Share transfer of Oryx Bank and equity transfer of Network Connex, a PE Investee from Oryx USA, have already been completed in Q2 and already reflected. As for other new investments, main areas continue to be Domestic Real Estate, PE Investments, Aircraft and Osaka IR. Airfin Major aircraft parts at company through Oryx Aviation. Well, with Elfin joining the group, we aim to expand our business foundation across the entire aircraft value chain from new aircraft leasing to post-retirement parts utilization and enhanced asset management services. And capital gains amount mentioned earlier does not include profits and losses recognized from equity method investees such as Toshiba. Please turn to page 11. Shareholder returns. As Yamada has explained, interim dividend returns Based on the adjusted profit is set at 107.27 yen per share. For the full year forecast, well, as Yamada explained, the net income forecast is maintained at 130 billion and therefore the full year dividend forecast is steady at 187.36 yen. Based on changed dividend policy and also based on the pipeline, profit and investment recouping, we will continue to end excess capital. And this stance has not really changed. As for share buyback, Against the total amount which was announced at 250 billion yen in May, at the end of July, we have purchased a 78.4 billion, progress of 31%. And for this fiscal year, full year payout ratio, including dividends and shared buyback, is maintained at 85.9% as disclosed in May. That's all from me. Thank you.