Annual Report 2012
Accelerating Growth with a DNA of Continual Innovation ORIX has consistently evolved as a financial service group, creating new businesses through ongoing development of advanced products and services. Since its establishment in 1964, the Company started with the leasing business, and then acquired expertise in a variety of areas as it has ventured into neighboring fields. From the beginning, ORIX has held a steadfast DNA of self-reliance and a spirit of willingness to take on new challenges. This DNA which threads through the Group is ORIX s defining feature and the cornerstone that supports its unique business model. Driven by this willingness to take on new challenges, we are accelerating the pace of business development and the shift from debt to equity, and then on to operations as a part of efforts to secure further growth. Operations Life Insurance Banking Corporate Philosophy ORIX is constantly anticipating market needs and working to contribute to society by developing leading financial services on a global scale and Equity striving to offer innovative products that create new value for customers. Debt Leasing Machinery and equipment leasing Automobile leasing Leasing and rental of precision measuring and IT-related equipment Ship/Aircraft leasing Lending Corporate finance Housing loans Card loans ORIX Corporation Annual Report 2012
Real Estate Development and rental Facilities operation Asset management Investment and advisory services Servicer Loan servicing Non-performing loan investment Automobiles Car rental Maintenance services Vehicle management Car sharing Ships/Aircraft Asset management Ship/Aircraft investment Environment/Energy Waste disposal and recycling Energy-saving measures Sale of solar power systems Electric business Investment Banking M&A advisory Fund management Investment Principal investment Business rehabilitation support Bond investment Venture capital ORIX Corporation Annual Report 2012 1
Accelerating Growth with a DNA of Continual Innovation One of ORIX s core strengths is its ability to adapt to change. Overcoming dramatic fluctuations in the operating environment, from oil shocks to the bursting of the bubble economy and more recently Lehman shock, the Company consistently generates a steady stream of profits. Working toward a new stage of profit growth, ORIX is targeting net income of 100 billion yen in fiscal 2013. To this end, the Company will continue to pursue its medium- to long-term management strategies of increasing the pace of Finance + Services and embracing growth in emerging markets such as Asia. At the same time, we will constantly review and rebuild our existing business foundation while increasingly taking up the challenge of capturing new business opportunities and sustainable growth. Trend in Net Income* (Billions of yen) 200 150 100 50 September 1988 Black Monday September 1974 First Oil Shock September 1979 Second Oil Shock March 1989 (Interim Results) 0 1964 1975 1980 1985 1990 *Net Income Attributable to ORIX Corporation 2 ORIX Corporation Annual Report 2012
Fiscal Year Ending March 2013 100.0 billion (Target) March 2012 86.2 billion March 2009 Lehman Shock March 1993 Bursting of the Economic Bubble March 1998 Asian Currency Crisis March 2002 Bursting of the IT Bubble 1995 2000 2005 2010 2012 2013 ORIX Corporation Annual Report 2012 3
Accelerating Growth with a DNA of Continual Innovation ORIX is made up of six business segments: Corporate Financial Services, Maintenance Leasing, Real Estate, Investment and Operation, Retail and Overseas Business. While each business makes full use of its individual strengths, every measure is taken to promote mutual cooperation and development of an extensive Group-wide operating foundation through the common sharing of customer base and information. Currently, the Company operates in 27 countries and regions worldwide and maintains a strong network and customer base abroad. ORIX s ongoing business development is underpinned by its sophisticated risk management and stable financial base. Swift action is determined based on a risk assessment that takes into consideration changes in operating conditions as well as the condition of each business segment. Sophisticated expertise in each business segment Business expertise and Group-wide capability Group network linking each business segment The ability to adapt to changes in the environment through portfolio diversification Over 40 year history of business overseas Expansive domestic and overseas network A policy of Localization and Partnership together with leading partners Products and services that address the needs of each country and region Sophisticated risk management and a stable financial base Balanced funding structure and diversified funding sources Focus on longer term funding and optimal liquidity control 4 ORIX Corporation Annual Report 2012
Contents 6 Financial Highlights 8 To Our Shareholders A Message from CEO Yoshihiko Miyauchi Attaining the Next Growth Stage: Advancing from Debt to Equity, and then on to Operations 12 An Interview with COO Makoto Inoue While adapting to an ever-changing business environment, we will actively transform our business model 16 Segment at a Glance 18 Segment Topics Introducing Kyuko-Lease Inc. into the Group and building a partnership with Kyudenko Corporation Aiming to combine the collective Group strength and expand the Bank s card loan activities Leveraging expertise to expand the facilities operation business Striving to provide new products and services in a growing world 24 Segment Overview 24 Corporate Financial Services 26 Maintenance Leasing 28 Real Estate 30 Investment and Operation 32 Retail 34 Overseas Business 36 An Interview with CFO Haruyuki Urata Risk Management and Financial Strategies that Support Future Growth 38 Risk Management 44 Corporate Governance 44 Management Team 49 Corporate Governance System 54 Comments from Outside Directors 57 Financial Section 68 About ORIX 68 Group Companies 70 Group Network 72 Corporate Information/Share Information ORIX Corporation Annual Report 2012 5