ORIX Corporation Business Seminar About the Overseas · PDF file · 2018-02-02ORIX...

ORIX Corporation Business Seminar

About the Overseas Business

Yuki Ohshima Corporate Executive Vice PresidentHead of Global Business and Alternative Investment HQ

September 13, 2013

Copyright © 2013 ORIX Corporation All rights reserved.

Disclaimer

These materials have been prepared by ORIX Corporation (“ORIX” or the “Company”) solely for your information and are subject to change without notice. The information contained in these materials has not been independently verified and its accuracy is not guaranteed No representations warranties or undertakings express or implied are made as to and no reliance should be placed onguaranteed. No representations, warranties or undertakings, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness, or completeness, or correctness of the information or the opinions presented or contained in these materials.

These materials contain forward-looking statements that reflect the Company’s intent, belief and current expectations about future events and financial results. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects ” “intends ” or words of similar meaning These forward looking statements are not guarantees of future performance Theyprojects, intends, or words of similar meaning. These forward-looking statements are not guarantees of future performance. They are based on a number of assumptions about the Company’s operations and are subject to risks, uncertainties and other factorsbeyond the Company’s control. Accordingly, actual results may differ materially from these forward-looking statements. Factors that could cause such differences include, but are not limited to, those described under “Risk Factors” in the Company’s most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission and under “Business Risk” of the securities report (yukashouken houkokusho) filed with the Director of the kanto local Finance Bureau.p (y )

Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by the Company or any affiliate thereof.

Copyright © 2013 ORIX Corporation All rights reserved. 1

Contents

I. Trend in Segment Profits and Assets

II. History of Overseas Expansion

p. 3

p. 5y p

III. Major Partners

p. 5

p. 8IV. Asia and Middle East Strategy

V. Examples by Countryp. 10

11V. Examples by Country

VI. Summaryp. 11

p. 15p


I. Segment Profits and Assets（JPY Bn）

Assets excluding Americas grew steadily, profits remained robust

70

Breakdown of Segment Profits by Region Breakdown of Segment Assets by Region

1,400 Asia and Australia Greater China

50

60

70Other than Americas Americas

1 000

1,200

Middle East and Europe OtherAmericas

40

50

800

1,000

20

30

400

600

0

10

10/3 11/3 12/3 13/3 14/3 1Q0

200

10/3 11/3 12/3 13/3 14/3 1Q


Q

I. Segment Profits and Assets – Regional and Asset Type Basis –

Breakdown by Regions (13.6）

Middle East Asia and Australia “Equity Investment” mainly in

South Korea (Mirae Asset Life Insurance, STX Energy, etc.)

No large investment

Americas ¥375.6bn

China ¥188 4b

Middle East and Europe

¥38.7bnOther

¥168.6bnEquity

Investment

gbalance in countries other than South Korea

“Leases and Other” include assets in Malaysia, Australia,

Asia and Australia ¥493.3bn

¥188.4bnLeases and

Other

D li HQ B ildi j t

assets in Malaysia, Australia, South Korea, Indonesia, etc.

Greater ChinaBreakdown by Asset Type (13.6）

Dalian HQ Building project is the largest of the “Equity Investments”

More than half of “Leases Americas ¥375.6bnLeases

and Other

Equity Investment

Leases and and Other” is comprised of assets in Hong Kong

Equity Investment

and Other Other


II. History of Overseas Expansion Expanded its global reach starting with Hong Kong in 1971, using

knowhow developed in Japan

“N bi i ll i l b li i b h i i f “Not as ambitious as to call it a globalization, but rather it is a way of eliminating barriers that exist in Japan”

34 Countries and Regions in the Overseas(As of 2013.7.1)

1971 Hong Kong1972 Singapore1973 Malaysia 1994 Oman

Busin

Deve

1975 Indonesia1977 Philippines1978 Thailand1980 Sri Lanka1986 Pakistan Australia

1995 Poland1997 Egypt2001 Saudi Arabia, South Korea2002 United Arab Emirates2004 China

1981 Established ORIX USA1997 Launched Commercial Mortgage-Backed

Securities (CMBS) servicing business2006 Acquired investment bank (Houlihan Lokey)

ness Netw

orkelopm

ent

JapanAsia Oceania and Europe North America and South America

1986 Pakistan, Australia1988 New Zealand1991 Taiwan, Ireland1993 India

2004 China2005 Kazakhstan2008 Vietnam2013 Bahrain, Netherlands, etc.

2006 Acquired investment bank (Houlihan Lokey)2010 Acquired loan servicing business (RED Capital)2010 Acquired fund management company (Mariner Investment)2012 Established Brazilian Subsidiary

k


JapanAsia, Oceania, and Europe North America and South America

II. History of Overseas Expansion – Characteristics and Strengths –

Established partner relations with leading local companies. Promoted localization of management, acquiring local customer base and strong brand recognition

Leveraging business platform cultivated over the years, each local subsidiary is headed

Broad network of local partnersE bli h j i l i i h l di i

Local Partners

g g p y ytoward the direction of “Finance + Services”

Establish joint leasing company with leading companies

Aim for new developments including joint investment based on relations of trust

Consistent localization policy since 1971 Develop human resource by transferring knowledge and knowhow

to local staff

Local Management

Strong brand recognition

Customer base comprised mainly of local companies and sales platform that supports itLocal Employees

Strong brand recognition Listed in local stock exchanges of Sri Lanka, Pakistan, and Oman

Procure funding directly from local capital markets in Thailand, M l i d S th K

Local Businesses


Malaysia, and South Korea

6

II. History of Overseas Expansion – Peer Comparison –

Unrivaled network spreading to the Middle East region Maintained business base through consistent localization

Comparison with Asian and Middle East Locations of Japanese Leasing Companies

ORIX 20 countries and regions(4,743 employees)

Bank Subsidiary “T” 8 countries and regions

Manufacturer Subsidiary “H” 7 countries and regions (2,278 employees)

Bank Subsidiary “M” 6 countries and regions

Bank Subsidiary “M” 5 countries and regions

Bank Subsidiary “T” 5 countries and regions

Source: Company disclosure materials, excl. Japan


III. Major Partners

India

Initially, partners were joint investors in the first leasing company in each country. Currently increasing the number of joint investors willing to take business risks together

UAEAl Hail Holding LLC

IndiaLife Insurance Corporation of India

Largest public insurance company in India

ThailandgInvestment company in Abu Dhabi

Saudi ArabiaSaudi Investment Bank9th largest* commercial

ThailandBangkok Insurance

Leading non-Life insurance company

Philippines

EgyptNational Bank of Eg pt

9 largest commercial bank in Saudi Arabia Metrobank Group

2nd largest bank in the Philippines and its parent company group

Si

*Market cap basis

National Bank of EgyptLargest commercial bank in Egypt

SingaporeDBS Bank Limited,

United Overseas Bank LimitedOne of the largest Asian banksPakistan and Oman

Majid Al Futtaim Trust LLCMajid Al Futtaim Trust LLCLeading group handling real estate

development in the Middle EastIndonesia

Bank Negara Indonesia Tbk4th largest public bank in IndonesiaIn addition to the above, the relationship with IFC (International Finance

C ti ) d ti b k t 1970 i l di ti ti


Corporation) dating back to 1970s is also distinctiveBank Negara Indonesia Tbk is a business alliance partner

8

III. Major Partners – Recent Examples –

Country/Name Description Partnership with ORIXPhilippinesM b k G

Involved in banking (2nd in the

-Shareholder in local Philippine subsidiaryMetrobank Group (2nd in the

Philippines), real estate, power generation, auto, and insurance

subsidiary-Jointly developing a complex of hotel, office, and residences with its group real estate companyFormed business alliance ininsurance -Formed business alliance in environment and energy area, investingin power generation company GBPC in June this year Grand Hyatt Metrobank

Center Project - Artistic Rendering of Completed Site

Saudi ArabiaSaudi Investment Bank

9th largest commercial bank in Saudi Arabia

-Largest shareholder of local Saudi Arabian subsidiary-Introduced investment in Medgulf to ORIX

Rendering of Completed Site

IndonesiaBank Negara Indonesia Tbk

4th largest publicbank in Saudi Arabia

-Partnered on intermediary service where ORIX introduces Japanese companies expanding to Indonesia

UAEAl Hail Holding LLC

Investment company in Abu Dhabi

-Largest shareholder who owns 60% stake of local UAE subsidiary from July this year


IV. Asia and Middle East Strategy

Shift the business of each local subsidiary from “Finance” to “Finance + Services”

E b th f d ti d d i h t Embrace growth of domestic demand in each country

Localization of Japan’s knowledge and knowhow (Maintenance Leasing and Environment and Energy)Environment and Energy)

M&A in the financial field (ex. Investment in the Middle Eastern insurance company Medgulf)

Joint investment with partners in fields other than finance (ex. Real estate complex development and investment in power generation company GBPC)

Expansion into unexplored regions

Mongolia (ex. Investment in financial services holding company TenGer)

Continue considering Vietnam and Myanmar


V. Examples by Country: Malaysia

Name, Established Year, Shareholding ORIX Leasing Malaysia Berhad (OLM), Established 1973, ORIX 100%

Business Base and Number of Employees Locations: Head office + 14 branches, 672 employees

Lim Beng ChorManaging Director & CEO

Number of Employees p y

Industry Position Leader in leasing industry

-Breakdown of profits: 50% corporate finance (leasing/installment purchase of construction equipments, manufacturing facilities, and industrial machines, and insurance agency business), 30% automobiles and IT

Characteristics and Strengths

equipment operating lease, and 20% non-performing loan business.-Customer base of over 20,000, diversified clients and assets.-Holds the line against low rate competition, expanding assets while maintaining spreads by strengthening product lineup.

-Track record of providing finance for the main industry of palm oil at corporate finance Also provides lending

Focus Area and Growth Strategy

Track record of providing finance for the main industry of palm oil at corporate finance. Also provides lending for solar panels.

-Operating leases including buses, forklifts, cranes, and generators in addition to automobiles. Recently began maintenance leasing of forklifts.

-Considering leasing business of factories and distribution warehouses.

Breakdown by Product

Breakdown by Industry

Breakdown by Client Type

Other

Office Construction Autos Construction

Japanese US/European

2 0%

2.5%

3.0%

3.5%

2 000

2,500

3,000

3,500 Asset（RM million) ROA（After Tax）

Office Equipments

Industrial Equipments Autos

EquipmentsService

ManufacturingTransportation

Commercial

Local0.5%

1.0%

1.5%

2.0%

500

1,000

1,500

2,000


As of 6/30/2013

g0.0%0

10/3 11/3 12/3 13/3 14/3 1Q

V. Examples by Country: Indonesia

Name, Established Year, Shareholding PT. ORIX Indonesia Finance (ORIF), Established 1975, ORIX 85%Business Base and 11 locations 530 employees

Shuji OhtakePresident, COO

Number of Employees 11 locations, 530 employees

Industry Position One of the leading leasing companies. Many players including Japanese/local and large/small competitors exist in the market.

Ch i i d

-Strengths include knowhow based on its long history in the business, especially the credit screening capability towards local companies.O h l i i i li i bil d bik d l ff fi l i ORIF i h lCharacteristics and

Strengths-Other leasing companies specialize in automobiles and bikes, and only offers finance leasing. ORIF is the only company that extensively offers operating leases while handling wide range of products.

- Almost half of the assets were equipments relating to coal mining but were reduced to 1/4 in half a year, responding to the drop in coal price last summer.

- Focused on auto leasing and have increased number of units. Also focusing on truck leasing in which the k t i di


market is expanding.-Considering investment in financial services company with an anticipation of income growth of the middle class in the future.

-Formed alliance with Bank Negara Indonesia Tbk in July. ORIF aims to expand transactions with Japanese companies expanding into Indonesia.

Asset（Rp billion) ROA（Afte Ta ） Breakdown by Product



Heavy

Industrial Machines

ForkliftsOther

Coal MiningJapanese

US/European

3 0%

4.0%

5.0%

5,000

7,500Asset（Rp billion) ROA（After Tax）

Heavy Machinery

Autos

Company Cars,Large Company Cars

Other

Transportation

Manufacturing

Agriculture, Forestry & Fishery

Local1.0%

2.0%

3.0%

2,500


As of 6/30/2013

Fishery0.0%0

10/3 11/3 12/3 13/3 14/3 1Q

V. Examples by Country: Australia and New Zealand

Name, Established Year, Shareholding ORIX Australia Corporation Limited (OACL), Established 1986, ORIX 100%

Business Base and

John CarterManaging Director

Number of Employees

Australia: 12 locations, New Zealand: 4 locations, 275 employees

Industry Position Mid-size leasing company specializing in automobile leasing (OACL manages 41,000 units out of the total 510,000 units in the leasing market)-Customers include fleet users such as global/major companies (Top 10 companies comprise 28% of

Characteristics and Strengths

Customers include fleet users such as global/major companies (Top 10 companies comprise 28% of assets).

-Strengths not only include established maintenance leasing framework, but also high quality IT system. Provides online based auto/contract management system, in which customers can extract data any time they desire and are able to order autos without having to contact sales.


-Aim for scale expansion while maintaining high profitability.-Focus on high value-added consulting services.

Breakdown by Breakdown by 10 0%1 000 Asset （A$ million) ROA（After Tax）Product Client Type

OtherJapanese

US/European

6.0%

8.0%

10.0%

600

800

1,000 $ )

VehiclesLocal

p

0.0%

2.0%

4.0%

0

200

400


As of 6/30/2013

0 0%010/3 11/3 12/3 13/3 14/3 1Q

V. Examples by Country: South Korea

Name, Established Year, Shareholding ORIX Capital Korea Corporation (OCK), Established 2004, ORIX 100%

Business Base and

Sung-Yoon ChungPresident, COO

Business Base and Number of Employees 5 locations, 119 employees

Industry Position Market where manufacturer related captive leasing companies are strong, owing to the economic structure centered on conglomerates. OCK is a rare independent/foreign company.

Characteristics and -Although the leasing rate competition is fierce, OCK is diversifying its asset type to gradually lower the Strengths

g g p , y g yp g ypercentage of automobiles.


-Focus on operating lease and establish maintenance network in auto business.-Expand operating lease to include machine tools and semiconductor facilities.-Expand corporate financial business other than leasing such as factoring and stock collateral loans.gy p p g g-Considering store leasing by cooperating with Japan's leading apparel company.

Breakdown by Product



2.0%1,000,000 資産（KRW MM） ROA（After Tax）

y yp

Industrial Equipments

Construction Equipments

Other

ServiceOther

Japanese

1.0%

1.5%

400,000

600,000

800,000

Autos

Construction

Manufacturing

TransportationCommercial

Local

0.0%

0.5%

0

200,000

10/3 11/3 12/3 13/3 14/3 1Q


PE investments such as Mirae Asset Life Insurance are not includedAs of 6/30/2013

V. Summary

“L li i ” d “P hi ” k f “Localization” and “Partnership” are key features

Shift from “Finance” to “Finance + Services” in each local subsidiary

Embrace growth in Asia through active M&A and PE g ginvestment


E it I t t St tEquity Investment Strategy in Japan and Overseas

September 13, 2013

Investment and Operation HeadquartersInvestment and Operation Headquarters

Business Development and Investment Group/Global Business Development and Investment Groupp p


1. Organizational Structure Business Development and Investment Group invests in Japanese companies (Comprised of 3 teams/34 members). Global Business Development and Investment Group (previously the Global Business Promotion Team) was transferred from

Global Business and Alternative Investment HQ in October 2012 to consolidate Japanese and overseas investment operations (Comprised of 18 members working in cooperation with Global Business and Alternative Investment HQ).

Corporate Financial Services Segment

Maintenance Leasing Segment Kazuo Kojima, Director and Corporate Executive Vice PresidentR ibl f I t t d O ti HQ

Investment and

Responsible for Investment and Operation HQ

Yuichi Nishigori, Executive OfficerHead of Investment and Operation HQRetail Segment

Real Estate Segment

Investment and Operation Segment

Business Developmentd I t t G

Operation HQ

34 members

Team 2

Team 1

Sh ji I i E ti Di t

Investment and Operation Segment

Team 3

and Investment Group

Global Business Developmentand Investment Group

Team 2

18 members

Shuji Irie, Executive DirectorDeputy Head of Investment and Operation HQ

C tiGlobal Business and

Alternative Investment HQOverseas Business Segment

Administrative Department

Cooperation Transaction Sourcing: Global Business Development and Investment Group handles and executes transactions using network of overseas local subsidiaries.

Monitoring: Investments mainly monitored by Global B i d Alt ti I t t HQ ’ C t

1Copyright © 2013 ORIX Corporation All rights reserved.

Group Companies Business and Alternative Investment HQs’ Corporate Finance Team and overseas local subsidiaries.

2. Business Development and Investment Group - Investment Track Record

Investments were mainly rehabilitation transactions when we launched the operation. During the expansion phase, we focused on non-bid deals such as business succession as price range did not meet our standards due to increased competition. Post-Lehman Crisis, we made exits on existing investments while postponing new investments (Sold all portfolios).

We began sourcing investments with focus on certain industries, targeting companies with lion’s share in niche market when We began sourcing investments with focus on certain industries, targeting companies with lion s share in niche market when operations restarted in 2012. We built portfolio of 5 companies and investment size of 35bn yen (Consolidated assets of 82bn yen).

Expansion Phase

Launched Operation

Operation Reduced (Lehman Crisis)

Operation Restarted(Expansion)p ( ) ( p )

Trend in Equity Investment Balance

(Consolidated Assets: 82bn yen）

183230

350

Investment Balance (100mil yen)

3 3New Invest

Aim for equity investment of 100bn yen in next three years (Consolidated assets

of 200bn yen) 3 10 15 17 35 31

91 9457

30 28

Year01/3 02/3 03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3

1 1 1 1

1 1 1 12

Invest-ments

Number of Exits 1

12 2

1

2 2 2

2

Existing transactions only include investments made since 2012:

Kawachiya Corporation (Liquor Wholesale), invested February 2012, Kinrei Corporation (Food Products), invested April 2012, Net Protections Inc (e Commerce Deferred Payment) invested December 2012 Asahi Fiber Glass Co Ltd (Heat Insulator Manufacturer)

22 2 2


Protections, Inc (e-Commerce Deferred Payment), invested December 2012, Asahi Fiber Glass Co., Ltd. (Heat Insulator Manufacturer), invested March 2013, 1st Holdings, Inc. ( IT Software), invested May 2013.

3. Investment Strategy Targeting mainly top niche companies, we implement investment sourcing activities with different themes: “business succession”

allowing non-bid based investment, “MBO” that focuses on under priced shares, and “subsidiary sales/carve-out” of large companies looking to concentrate resources on core business.

Actively create investment opportunities, setting focus industries including stable “Food” industry capable of making overseas i “IT/I f ti S i ” i hi h i t t i i t d “H lth ” hi h i th i d t i Jexpansion, “IT/Information Services” in which investment expansion is expected, “Healthcare” which is a growth industry in Japan

and “Business Process Outsourcing (BPO)” which is highly compatible with ORIX Group business.

Investment Approach IndustryTop Class Niche

Kawachiya

Business Succession

Industry Reorganization

AsahiFiber Glass

Niche Top

Energy SavingBusinessSuccession Food

Kawachiya

Niche Top

Fiber Glass

Niche Top

MBO（Privatization）

IT/Information

Services

KINREIFood

Niche Top 1st MBO (Privatization)

p

IT/Information ServicesCarve-out and

Sale of Subsidiary

Healthcare

Net

IT/Information Services

Carve-out and Sale of Subsidiary

sHoldings

y

BPO


Protectionsy

4. Investment PortfolioKawachiya

Invested in February 2012.Business Succession （from founder）.

Li h l l (N 2 i T k M t lit A )

Invested in December 2012.Large company selling its subsidiary (Sub-subsidiary of Olympus).

E d f d t l i (N 1 Pi )

Net Protections

Liquor wholesaler (No.2 in Tokyo Metropolitan Area)

Investment ThemeIndustry reorganization (Build a dominant position through acquisitions and alliances with other liquor wholesalers)

E-commerce deferred payment clearance service (No.1 - Pioneer)

Investment ThemeExpand customer base in accordance with the spread of deferred payment clearance measures (Sales support by ORIX). Business development utilizing user data as resource.

KINREI (Food)

Invested in April 2012.Secondary Buyout (Subsidiary of Osaka Gas).

Invested in March 2013.Secondary buyout（Subsidiary of Asahi Glass)

Asahi Fiber Glass

Frozen food business（No.1 in frozen noodle in aluminum trays for conveniences stores)

Investment ThemeOverseas expansion (Asia), strengthening of COOP and volume sales (ORIX sales support) partnership strategy (summer products)

Glass fiber manufacturer (No.1 in the industry. Formaldehyde-free product Aclear）

Investment ThemeEnhance quality of heat insulator for housing in accordance with energy saving (Standard for next generation） Increase marketsales (ORIX sales support), partnership strategy (summer products) energy saving (Standard for next generation）. Increase market share by increasing production capacity.

KINREI (Restaurants) Japanese restaurant business (Kagonoya) . 71 restaurants in the

Kansai and Kanto area. No.1 in 3,000 yen per person price Invested in May 2013.

MBO（Privatization/Listed on 2nd Section of Tokyo Stock Exchange)

1st Holdings

Kansai and Kanto area. No.1 in 3,000 yen per person price segment.

Revenues exceeding 100% YoY for 40 consecutive months. Investment ThemeIncrease number of restaurants in the Kanto area. Expand in the

MBO（Privatization/Listed on 2 Section of Tokyo Stock Exchange)

Software vendor (No.1 in invoice (“SVF”) and Business Intelligence (“Dr. Sum”))

Investment ThemeUpgrade “Dr.Sum” (Used by large companies), expand into Cloud


pTokai region and overseas (Asia). Roll up other restaurants. technology (Alliances), and expand into overseas markets.

5. Value Up Strategy

Business management and support by creating unity with the investee through hands on management by dispatched ORIX employees. Professionals from relevant industries provide strategic support and make replacements on management if necessary.

Expand operation of the investees through acquisitions and alliances within the same/neighboring industries to obtain a dominant position and also expand customer base using sales support of ORIX’s business units (Differentiation from PE Funds)

Business M t/

position and also expand customer base using sales support of ORIX s business units (Differentiation from PE Funds).

StrategicPartnerships and

Acquisitions and alliances within the

Management/ Support

- Increase Corporate Value -

Partnerships and Acquisitions

Investee CompaniesORIX employees dispatched offer

hands on management and support

qsame/neighboring industries to

expand operation

ORIX sales develop customer base(Expansion of sales route using network)

Industry professionals offer strategicd l (Expansion of sales route using network)support and management replacement

ORIXProfessionalSales Support

ProfessionalHuman Resources


6. Industry Environment Domestic buy-out funds steadily increased in the start up phase, but following the Lehman Crisis in 2009, the number of funds and

commitment amount decreased rapidly to a low level. The figures rebounded in 2012 when commitment amount reached 90bn yen for the first time in three years.

This year, we expect increased competition and spike in purchase price due to increased investment capacity through fundraising b l di f d d i f LBO l b fi i l i tit ti U i f i t t i d bilit t iby leading funds and expansion of LBO loans by financial institutions. Uniqueness of investment sourcing and ability to increase the corporate value of investees are key in differentiating from our competitors.

ExpansionStart Up Reduction Recovery

3440

5608 5380 5069

2422 21

4000

5000

6000

20

25

30

30 207 1540 1520 1012 1433 1405

2794

972 665 600 92069

7 11 13 1518

21

61000

2000

3000

5

10

15

30 15401 2 3 4

6 501997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0

コミットメント総額設立本数Commitment

AmountNumber of New Funds

LBO Loan MarketFollowing the monetary easing of Abenomics, financial institutions are shifting from investing in government bonds towards lending to pursue LBO loans actively taking this lending opportunity The funding environment for investors is improving both in terms of volume

（Source：Japan Buy-out Research Institute Corporation)


pursue LBO loans, actively taking this lending opportunity. The funding environment for investors is improving, both in terms of volume and interest rate conditions (Leading to a spike in acquisition price).

7. ORIX’s Position

Expand sales platform by cooperating with ORIX’s business units (Win-Win, since ORIX benefits from

CollaborationWe make proprietary investments unlike other PE Funds. No fixed limits on investment amounts or period Flexible in actions handling full equity

Flexibility

additional sales products). Joint promotion of discontinued growth through business alliance, roll-ups, etc. Aim for improved company value from increased

b i ORIX’ G t k i t d f

period. Flexible in actions, handling full equity investment, exit on IPO, etc.Unlike other companies, we maintain independence and corporate culture of the investees.Diversified investment styles including class shares, revenues by using ORIX’s Group network instead of

streamlining the business. Diversified investment styles including class shares, joint investment, mezzanine finance, etc.

Unique player unlike PE funds orUnique player unlike PE funds or strategic investors

- Become the “Value-up Sponsor” in

GlobalizationCredibility

p pdemand by companies -

Support overseas expansion of investees using ORIX’s local subsidiaries (Funding, financial sales support, arrangement of joint business partners).Business and capital alliances with overseas companies

Achieve reduced funding cost of investees using ORIX’s credibility and relationships with financial institutions.Appeal sustainability of investees using ORIX’s name


companies.pp y g(Gives peace of mind to customers of investees).

8. FY2013 Strategy

Deepen industry-based strategy (Food, IT/Information Services, Healthcare) and consider increasing focus industries (BPO Services etc) Expand from companies

Hands-on business management and support by dispatched ORIX employees (Create sense of unity with the investees)

Increase Corporate ValueExpansion and Diversification of Investment Target

industries (BPO Services, etc). Expand from companies focusing on internal demand to export companies.Expand investment size. In addition to the competitive “Small-Lower Mid (EV5-30bn yen)” companies, focus on “Upper-Mid (30-50bn yen)” companies.

the investees).Expand business platform and develop customer base by cooperating with ORIX’s sales unit (Strategic revenue allocation to increase motivation). Select investees which can capitalize on our sales activities.

Concentrate on business succession, carve-out of large companies and MBO (Avoid secondary buy-out bidding).Diversify forms of investment. Expand investment opportunities by taking flexible approach based on needs: Class shares joint investment mezzanine

Expand operation through roll-ups(acquisitions) within the same/neighboring industries and develop strategic partnerships. Promote collaboration between investees.Expand new investments leveraging knowledge of existing investees (ex Investment in IT Industry by

Global Strategy, etc.

needs: Class shares, joint investment, mezzanine finance, etc.

existing investees (ex. Investment in IT Industry by partnering with 1st Holdings)

R i ll d it th h th th j b t i i S t i f i t

Human Resource Development and Organizational Enhancement

Raise all around capacity through the on the job training of existing team members (Through Deal experience/Hands on Assignments).Actively recruit external human resources. Diversify and specialize human resources with the aim of increasing

Support overseas expansion of investees(Alliance with ORIX overseas local subsidiaries)-Asahi Fiber Glass: Enter Global Market-1st Holdings: Capture Japanese companies in Asia as

customers.KINREI: Expand sales of frozen noodles in Asiag

core deal players and dividing down functions (Analysis, accounting, and legal). Expand network and improve knowledge by recruiting industry specialists (from inside and outside the company). Have management support and replacement

-KINREI: Expand sales of frozen noodles in Asia.Explore opportunities for joint investment relating to overseas M&A by Japanese companies

Diff ti ti i t th i t ORIX


company). Have management support and replacement capacity by creating a pool of managerial human resources

- Differentiation using strengths unique to ORIX -

9. Global Business Development and Investment Group - Investment Track Record

Its predecessor “New Business Development Group” was established at the same time as Global Business and Alternative Investment HQ in January 2009. Its original mission was to set up new businesses overseas and support diversification of overseas local subsidiaries. Its main task became restructuring of existing investments after the Lehman Crisis in 2009 and 2010.

It d t th I t t d O ti HQ ith th i f lid ti d ti d i t t i O t b

-Transition-

It was moved to the Investment and Operation HQ with the aim of consolidating domestic and overseas investment in October 2010. With a clear mission of M&A investment with the financial industry as its main target, it does not rely simply on transactions coming from local subsidiaries but has also begun its own independent investment sourcing activities.

-Transition-

New BusinessDevelopment Group Global Business and Alternative Investment HQ

Support diversification of overseas local subsidiaries

2009/1

Global Business Promotion Team

Global Business

Restructuring of existing investments2010/6

2012/10 Investment and Operation HQC lid d f

Three Three TransactionsTransactionsGlobal Business

Development and Investment Group

- Consolidated management ofdomestic and overseas investments

- Clarification of investment mission

Transactions Transactions are Complete/ are Complete/

Pending Pending

Global Business and Alternative Investment HQ Corporate Finance Team

Seamless Cooperation


Overseas Local Subsidiaries

10. Overseas Investment Theme

Leasing is the primary business in countries ORIX has already expanded into through its local subsidiary. Aim for discontinuous growth by promoting M&A in other financial businesses (banking, insurance, consumer finance as main target).

In countries where we have yet to expand, establish new platform by making new investments to embrace future growth in ti t irespective countries.

Countries where ORIX Currently Operates

Countries without ORIX Operations

Diversification of financial business (Break out of monoline business model of leasing)

Establish new platforms

Currently Operates ORIX Operations

Focus Areag)

Use of local knowhow (Support growth by utilizing customer base/knowhow)

Embrace growth of investee country (expansion into leasing business, etc.)

Collaborate with overseas d l t fi i l i tit ti

- Banking- Insurance- Consumer Finance

Business development (Seek opportunities using local subsidiary customer network)

development financial institutions- Leasing

Target RegionsASEAN (Indonesia, Malaysia, Thailand,

Vietnam, etc.)

MENA (Th Middl E t N th Af i )

Target RegionsMekong Delta (Vietnam, Cambodia, etc.)Central Asia (Mongolia, etc.)TurkeyS b S h Af i


MENA (The Middle East, North Africa) Sub-Saharan Africa

11. Investment Portfolio

TenGer Financial Group(Mongolia)

Mongolia Opportunities Fund (Mongolia)

Invested in September 2013.

Integrated financial group. Includes leasing and insurance companies in addition to the fourth largest bank in Mongolia. Overseas development financial institution also invests in the company.

Invested in February 2013.

First private equity fund in Monglia（Established June 2011）Targets mid-size companies in mining, infrastructure, and exporting.

I t t Th company.

Investment ThemeInvestment in a platform in Mongolia where economic growth driven by wealth of natural resources is anticipated. Contribute to its financial business diversification by providing knowhow (leasing business etc )

Investment ThemeThrough this investment, embrace economic growth of Mongolia, a country with top level of natural resource globally, while creating new investment opportunities by establishing local network.

(leasing business, etc.).

Medgulf(Saudi Arabia)

Invested in June 2013.

Largest private insurance group in the Middle East（Mainly medical and auto insurance). Second in Saudi Arabia with the largest market in the Middle East. Also active in Lebanon and

- Other -Still have pipelines on investment

Bahrain.

Investment ThemeParticipation in a new field (insurance) in the rapidly growing Middle East market. Progress in shift towards compulsory health insurance and expansion in Turkey and North Africa. Support

Still have pipelines on investment expected to close or under consideration


expansion into Islamic countries in Asian region.

12. Overseas Investment PolicyDomestic Business

Asset

LeasingLending Ship

Aircraft Investment Automobile Real EstateLife

Insurance BankingEnergy and Environment Loan

Servicing

Investment Banking

Management

1970~Hong KongSingapore

1980~Sri LankaUnited States

1990~TaiwanIreland

2000~Saudi ArabiaKazakhstan

Overseas Expansion

2010~VietnamBrazilg p

MalaysiaIndonesiaPhilippinesThailand

PakistanAustraliaNew Zealand

IndiaOmanPolandEgypt

UAEChinaSouth Korea

MongoliaNetherlands

Promote overseas investment leveraging strategic platform built upon track record of business diversification in Japan and 40-year history of leasing business expansion

targeting local customers overseas


- Firmly support growth of invested financial companies -

13. Overseas Investment StrategyExpand Overseas Financial Business Support Growth of Investees

Support expansion of investee companies’ business fields by transferring ORIX’s domestic business model (Diversification

Expand from overseas business centered on leasing to other financial areas (Banking life insurance consumer finance transferring ORIX s domestic business model (Diversification

of financial business).

Cross sell to customers of overseas local subsidiaries, support expansion to regions such as Asia where ORIX is strong.

financial areas (Banking, life insurance, consumer finance, asset management, etc.).

Promote new equity investment leveraging customer base of local subsidiaries and close relationships with local partners.

A i l tf th h M&A (F k th t i l d strong.

Capture business opportunities as ORIX, such as co-investment in accordance with investee’s expansion into new business areas/regions

Acquire new platform through M&A (Framework that includes exit strategy based on equity investment knowhow)

Positioned as Equity InvestorPositioned as Equity Investor having having Operational FunctionOperational Function

Embrace Growth in Emerging Economies ORIX Group Overseas Expansion

Enjoy growth of scale by investing in financial business in Establish foothold for overseas expansion of ORIX business emerging economies where future economic growth is expected.

Based on age structure, target financial business where we can expect increase in market penetration through increased

l ti /i

units/Group companies (ORIX Credit, Life Insurance, Auto, Real Estate, Loan Servicing, Energy, etc.).

Expand joint financial business with investee.


population/income.

14. Target Regions for InvestmentFocus on Asian Emerging Markets, the Middle East, and Africa

Entrance at Early Stage of Economic Growth (Before the Launch of Direct Flight from Japan)

Central AsiaTurkey

The Middle M k D lt

North Africa

East Mekong Delta

ASEANSub-Saharan Af iAfrica

Asian Emerging Markets: Continue to cooperate with countries where we have local subsidiaries (Thailand, Indonesia, and Malaysia).

MENA/Turkey： Seek for opportunities through local subsidiaries and already invested Medgulf.


Sub-Saharan Africa： Start market research, focusing on potential economic growth (Expect to make joint investment with partners).

ORIX Corporation Business Seminar About the Overseas · PDF file · 2018-02-02ORIX...

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Transcript of ORIX Corporation Business Seminar About the Overseas · PDF file · 2018-02-02ORIX...