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TRANSCRIPT
April 28, 2017
Fiscal Year Ended March 2017 (FY2016) Briefing on Financial Results
Ricoh Leasing Company, Ltd.
1
Performance Summary (Fiscal Year Ended March 2017)
Net Sales: 291,116 million yen Posted another record high for the third consecutive period
Operating Profit: 17,333 million yen Expanded income for three consecutive periods; posted another record high
Net Income: 11,772 million yen Posted another record high for the second consecutive period
Total Operating Assets (substantial):
808,686 million yen Posted another record high for the 6th consecutive period
Transaction Volume:369,037 million yen Posted another record high for the fourth consecutive period
2
1. Performance Overview(Fiscal Year Ended March 2017)
3
16/3 17/3
ActualMedium-Term Management
Strategy Target
Forecast ActualRatio
against Forecast
Growth Rate
Net Sales 2,758 2,800 2,850 2,911 102.1 5.5
Gross Profit 303 - 310 311 100.5 2.6
SGA Expenses 134 - 137 138 100.9 3.0
Operating Profit 169 175 173 173 100.2 2.3(Operating Profit / Net Sales) 6.1 6.3 6.1 6.0 - (0.1)
Ordinary Profit 168 - 171 171 100.5 2.0
Net Income 110 109 115 117 102.4 6.5Variance Year-on-year
in forecast change (in yen)
Earnings Per Share 353.96 - 368.39 377.12 8.73 23.16
Dividend Per Share 55.00 - 60.00 60.00 0.00 5.00
Consolidated Results
(100 millions of yen, %)
*The Medium-Term Management Strategy Target represents figures announced on April 25, 2014. Forecast figures are those announced on April 28, 2016.“Profit Attributable to Owners of Parent” is presented as “Net Income.”
4
Factors Affecting Operating Profit
Gross Profit calculation SGA Expenses
(100 millions of yen)
17,333 million yen
17/3 Actual
16,951 million yen
400million
yen
Allowance for Doubtful Accounts
Increase in
16/3 Actual
+2Increase in Financial Income
Increase in Gross Margin for the Leases
and Installment Sales Business
±0
Increase in Expenses
3+3
Decrease in Financial Expenses
1
17,033 million yen
17/3 Actual(Excluding factors
on the right)
+3
Cancellation of Large
Contracts, etc.
5
Transaction Volume by Business
* Transaction volumes are calculated on an inspection basis.
16/3 17/3
Actual Growth Rate Actual Growth
Rate
Finance Leases 2,663 1.6 2,599 (2.4)
Operating Leases 127 1.7 125 (1.4)
Installment Sales 547 12.8 637 16.5
Leases and Installment Sales Business 3,337 3.3 3,362 0.7
Financial Services Business 264 1.7 327 24.0
Total Transaction Volume 3,601 3.2 3,690 2.5
(100 millions of yen, %)
6
Transaction Volume by Product: Leases and Installment Sales Business
16/3 17/3Japan Leasing
AssociationTotal
(16/4–17/3)
Actual Forecast Actual Difference Growth Rate
Growth Rate
Office and IT-Related Equipment 1,794 1,800 1,801 1 0.4 (2.3)
Medical Equipment 432 455 415 (39) (3.8) 2.0
Industrial Machinery 337 356 321 (34) (5.0) (8.7)
Commercial and Service Equipment 328 335 335 0 2.3 2.3
Transport Equipment 139 144 168 24 20.2 2.3
Others 305 310 320 10 4.9 1.6
Total Transaction Volume 3,337 3,400 3,362 (37) 0.7 (1.3)
* Forecast figures are those announced on October 21, 2016.
(100 millions of yen, %)
7
Operating Results by Segment (Leases and Installment Sales Business)
Net sales (left bar)
Segment Profit (right bar)
2,277
2,818
2,388
2,673
146154138 142
0
500
1,000
1,500
2,000
2,500
17/313/3 14/3 16/30
50
100
150
200
2,511
144
15/3
(100 millions of yen)
(100 millions of yen)
8
Operating Results by Segment (Financial Services Business)
Net Sales Segment Profit
13.3% 16.8% 16.0% 19.6% 19.2%
49.654.4
59.465.3
68.8
22.727.0 26.3
33.1 33.2
0
20
40
60
13/3 14/3 15/3 16/3 17/3% of
Operating Profit
( Commission Received)
(Medium-Term Management
Strategy Target: 20%)
(100 millions of yen)
9
Financial Services Business Collection Agency Services and Factoring Services for Nursing-Care Facilities
Number of Monthly Transaction Cases of Collection Agency Services (Unit: 10,000)
Factoring Services for Nursing-Care Facilities -Annual Transaction Volume
92106
128137
160
0
50
100
150
13/3 14/3 15/3 16/3 17/3
90
198
326
471
606
0
200
400
600
13/3 14/3 15/3 16/3 17/3
170Medium-Term Management Strategy Target
600
Medium-Term Management Strategy Target
(100 millions of yen)
1010
Transition of Gross Profit (Before Deducting Financial Expenses)
*Gross Profit (before deducting Financial Expenses): Net Sales - Cost of sales. The sum of each product sales amount net of Cost of Sales is the Gross Profit before Financial Expenses deduction.
% of Gross Profit (before deducting Financial Expenses) = Amount of Gross Profit (before deducting Financial
Expenses) / Average Operating Assets
0
200
300
13/3 14/3 15/3 16/3 17/3
5.184.77
4.53 4.35 4.21
306 305 313 318 323
Leases
Operating Loans
Installment Sales
Others(Sales
Commission, etc.)
% of Gross Profit (before
deducting Financial
Expenses)(%)
221 213 216 215 207
13 14 16 18 2422 23 24 26 25
49 53 55 58 65
257 252 258 260 257
(100 millions of yen)
11
Operating Assets and Changes in Default Rate
Leases (including securitized portions)
Loans
Installment Sales
Default Rate(%)
Default Rate = Default Loss Amount / Average Operating Assets0.37
0.25 0.19 0.18 0.18
4,785(244)
5,265(245)
5,486(246)
5,704(247)
5,836(247)
508612
725837 958
1,039
1,0991,142
1,2311,292
4,000
5,000
6,000
7,000
8,000
13/3 14/3 15/3 16/3 17/3
6,333
6,9787,354
7,7738,086
*Balances shown include securitized portions of lease receivables.
(100 millions of
yen)
1212
Total Procurement Amount and Financial Expenses
[External Rating]JCR AA-R&I AS&P A-
Procurement Rate(%)
Financial Expenses
Liabilities outstanding
Financial Expenses Ratio = Financial Expenses / Average Operating Assets
Long-term
Short-term
0.34 0.300.22 0.20 0.15
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
13/3 14/3 15/3 16/3 17/3
5,988
6,866
5,425
6,710
11
1920
6,337
15 14
*Liabilities outstanding represent the balance including the amount of procurement through securitized portions of lease receivables.Financial expenses shown are expenses included in the calculation of gross profit.
(100 millions of yen)
1313
Changes in Selling, General and Administrative Expenses
67 63 62 64 67
4
50
100
150
17/313/3 14/3 15/3 16/3
127125 121 123
115
126
125 133138
134
OthersPersonnel Expenses
Allowance for Doubtful Accounts
Figures in parentheses represent the number of employees at fiscal year-end on consolidated basis
(900) (916) (928) (917) (894)
5959595862
(10)9 7
11
(100 millions of
yen)
14
2. Mid-Term Management Plan
(FY2017 to FY2019)
15
Current Business Environment
Customers/ Markets
Competitors
Company
• Change in value “from ownership to use” and “from products to services”• Stagnation in domestic capital investments, leasing market; concerns about the impact of IFRS• Low default rate and market interest rate despite concerns about a turnaround• Change in population trends (declining number of children, aging population, lower ratio of working-
age population)• Technological innovation, e.g., AI, robotics and IoT• Overcoming environmental energy restrictions and expansion of investment (energy-saving/energy-
creation markets)• Intensified competition with other industries, such as regional banks (monetary relaxation / lowering
of market interest rates) and lowering of industrial barriers
• Expansion of business platforms and earnings platforms through new businesses beyond financial boundaries and advancement of international businesses
• Growth and expansion through capital alliances, acquisitions• Strengthening of earning power and improvement of corporate structure through enhancement of
strong areas and specialty areas• Investment for the future in fields such as robotics, smart agriculture and IoT
• Decline in the composition ratio of office and IT-related equipment, which used to account for a high percentage
• Asset in which the traditional eases and installment sales business accounts for a large percentage • Delay in entering new business areas due to restrained investment
16
Mid-Term Management Plan — Vision
Beyond leasing
17
What “Beyond Leasing” Signifies
FY2014–FY2016 Mid-Term Management Plan
FY2017–FY2019 Mid-Term Management Plan
Next-period Mid-Term Management Plan
Expa
nsio
n of
bus
ines
s ar
eas
• Enter new business areas and take risks in order to achieve business growth and income growth.• Pursue research/development of businesses and products to respond to the expectations of customers
and to further get a head start on future expectations.
Expansion of core businesses
Advance into new businesses around the core business fields by responding to customers’ expectations.
Grow to become a company that can not only provide services/products in leasing and financial services markets but also offer ones that contribute to the development of the environment, society and customers.
Business AreasLeases and
Installment SalesFinancial Services
18
Mid-Term Management Plan — Management Strategy
Taking on challenges in new environmental fields centered on energy-creation and energy-saving
• Reinforce initiatives toward establishing environmental and renewable energy facilities
Reinforcing alliances with vendors and establishing a firm sales & marketing platform by maximizing the customer network
• Provide effective offering model to vendors and reinforce relationships through strategic alliances• Strengthen points of contact in the customer network comprising 400,000 firms
Deployment of lease + service business through collaboration with RICOHGroup companies
• Create new services and business models by combining the strengths of group companies in regard to production, sales, logistics, etc.
Development and provision of financial services to accommodate changes and resolve issues in society
• Strengthen response to diversifying settlement means• Develop and provide financial services that respond to the changes in population trends• Aim to have the Financial Services Business account for 30% of Operating Profit
Creation of value provided other than leasing• Develop products and businesses demanded by customers, markets and the era• Expand business areas by taking new risks
Business Growth Strategy
2.
3.
5.
1.
4.
• Further heighten consulting and other expert capabilities and promote the use and expansion of the customer network
• Actively expand nursing-care fee factoring and medical service fee factoring• Transaction volume for the factoring business: 60,600 million yen in the year ended
March 2017 ⇒ 100,000 million yen in the year ending March 2020
• Expand through active risk-taking using diverse schemes• Take initiatives toward establishing new power generation facilities for biomass power
generation, etc. beyond solar power generation• Develop and provide services and businesses toward realizing a zero-energy-based
society• Transaction volume for leases and installment sales business: 24,100 million yen in the
year ended March 2017 ⇒ 50,000 million yen in the year ending March 2020
• Develop new provision formats using the RICOH Group’s infrastructure• Provide distinguished products in deploying services that respond to the shift from
“products” to “services”
• Deploy business based on a proprietary approach in line with the domestic population trend ⇒ Launch of rental housing business
• Develop and provide diverse services for real estate business operators and lessors
19
Areas of Focus
Medical / Nursing Care Field
Environmental Field
Office & IT-Related Field
Real Estate Field
Mid-Term Management Plan — Management Strategy
20
Mid-Term Management Plan — Management Strategy
Construction of a new platform to further enhance product competitiveness and operating efficiency in response to diversifying needs and services
• Establish an IT infrastructure that supports the development and provision of new businesses, services and products
• Promote operational efficiency by using AI and other new technologies
Human resources management in response to changes in society, markets and working styles
• Shift workforce toward productivity improvement and business growth by implementing flexible working styles that are not bound by time and location
• Increase motivation to grow and take on challenges by introducing a remuneration system that rewards contributions made to operating performance
1.
2.
Strategy for Enhancement of Organizational Strength
Further Promotion of CSR
(1) Reduction of Environmental Burden through Business Activities- Expand environmental business activities aimed at increasing the magnitude of environmental contribution
(2) Contribution to each Stakeholder for Realizing Sustainable Growth- Promote activities in the order of priority toward resolving social issues
(3) Continuous Enhancement of Corporate Governance- Increase corporate value through reinforcing the PDCA cycle
21
Financial Targets
Operating Profit(100 millions of yen) 183173160
ROA (Return on Assets Ratio)
1.30%(Medium-
Term Target)1.31%1.29%
OperatingAssets
(100 millions of yen, including securitized
portions)
9,0008,0866,978
Fiscal Year Ending March 2020
Fiscal Year Ended March 2017
Fiscal Year Ended March 2014
Financial Targets / P&L
1.8%
-
3.6%
Fiscal year ended March 2017 to Fiscal year ending
March 2020 CAGR
22
Operating Targets
Transaction Volume of Leases and Installment
Sales Business (Environmental Field) (100 millions of yen)
3,675(500)
3,362(241)
3,209
Number of Annual Transaction Cases of
Collection AgencyServices
(10,000 cases)
2,5001,7551,152
Transaction Volume for Medical / Nursing-
Care Factoring(100 millions of yen)
1,000606198
Fiscal Year Ending March
2020Fiscal Year Ended
March 2017Fiscal Year Ended
March 2014
Fiscal year ended March 2017 to Fiscal year ending March 2020
CAGR
3.0%(27.5%)
12.5%
18.1%
Operating Targets
23
3. Financial Forecast(Fiscal Year Ending March 2018)
24
Consolidated Income Forecast
(100 millions of yen, %)
17/3 18/3Actual Forecast Growth Rate
Net Sales 2,911 2,973 2.1Gross Profit 311 313 0.5
SGA Expenses 138 145 4.9Operating Profit 173 168 (3.1)
(Operating Profit Ratio) 6.0 5.7 (0.3)
Ordinary Profit 171 165 (4.0)Net Income 117 113 (4.0)
Year-on-year change
Total Operating Assets 8,086 8,385 299ROA 1.31% 1.21% (0.10%)ROE 7.8% 7.1% (0.7)
Earnings Per Share (yen) 377.12 361.99 (15.13)Dividends Per Share (yen) 60.00 70.00 10.00
*Total Operating Assets shown include securitized portions of lease receivables.
25
Projected Factors Affecting Operating Profit
(100 millions of yen)
16,800million yen
18/3 Forecast
17,333million yen
5
Gross Profit calculation SGA Expenses
17/3 Actual
+3
Increase in Financial Income
Increase in Gross Margin for the Leases
and Installment Sales Business
Increase in Expenses
2
Increase in Financial Expenses1
+34
17,033million yen
17/3 Actual (excluding factors
on the left)
Cancellation of Large
Contracts, etc.
+3
Increase in Allowance for
Doubtful Accounts1
Strategy Expenses
26
Transaction Volume Forecast by Business
(100 millions of yen, %)
17/3 18/3
Actual Forecast Growth Rate
Finance Leases 2,599 2,600 0.0
Operating Leases 125 130 3.8
Installment Sales 637 650 1.9
Leases and Installment Sales Business 3,362 3,380 0.5
Financial Services Business 327 270 (17.6)
Total Transaction Volume 3,690 3,650 (1.1)
27
Transaction Volume Forecast by Product: Leases and Installment Sales Business
(100 millions of yen, %)
17/3 18/3
Actual Forecast Growth Rate
Office and IT-Related Equipment 1,801 1,805 0.2
Medical Equipment 415 420 1.0
Industrial Machinery 321 340 5.9
Commercial and Service Equipment 335 320 (4.7)
Transport Equipment 168 170 1.1
Others 320 325 1.4
Total Transaction Volume 3,362 3,380 0.5
28
Policy on Return to Shareholders
Dividend Payout Ratio
Dividend per share
15.4% 15.5%
Fiscal Year Ended March
2015
Fiscal Year Ended March
2016
15.9%
Fiscal Year Ended March
2017
25%
50 yen 55 yen 60 yen
Medium-Term Target
70 yen
19.3%
Fiscal Year Ending March
2018 (Plan)
The Company strives to steadily increase dividends to shareholders by ensuring growth and appropriate capital enhancement and strengthening its financial position.In pursuing further return of profits to shareholders, the Company aims at realizing a
dividend payout ratio of 25% in the medium term (in three to five years).
29
Forward-looking statements including earnings forecasts contained in this document are based on certain assumptions deemed to be rational in light of the information available to the Company at the time of preparing the document,and are not intended to be guarantees of future performance. Actual results may differ significantly from plans and forecasts due to a variety of factors.
Reliability for
the FutureRicoh Leasing Company, Ltd.
Ricoh Leasing Company, Ltd.
30
<Reference> Breakdown of Sales for Fiscal Year Ended March 2016
(100 millions of yen, %)
16/3 17/3
Actual Forecast ActualRatio
against Forecast
Growth Rate
Leases 2,124 2,190 2,179 99.5 2.6
Installment Sales 352 390 414 106.3 17.8
Loans 26 27 25 95.6 (2.1)
Commission Received 44 48 48 100.5 8.8
Others 211 195 243 124.6 15.1
Total Net Sales 2,758 2,850 2,911 102.1 5.5
31
<Reference> Breakdown of Sales Forecast for Fiscal Year Ending March 2018
(100 millions of yen, %)
17/3 18/3
Actual ForecastGrowth
Rate
Leases 2,179 2,218 1.8
Installment Sales 414 450 8.5
Loans 25 26 0.8
Commission Received 48 50 3.6
Others 243 229 (5.8)
Total Net Sales 2,911 2,973 2.1
32
14/3 Medium-Term Management
Strategy Target (17/3)
17/3
Actual Actual Comparedwith 14/3
Comparedwith plan
Net Sales 2,459 2,800 2,911 118.4 104.0
Operating Profit 160 175 173 107.9 99.0
Net Income 95 109 117 123.3 108.0
Operating Profit /Net Sales 6.5 6.3 6.0 (0.5) (0.3)
ROA 1.29 1.3 or above 1.31 +0.02 +0.01
ROE 7.8 7.4 or above 7.8 +0.0 +0.4
(100 millions of yen, %)
<Reference> Previous Medium-Term Strategy Results (Operating Performance/Management Indicators)
Increase/ Decrease Variance
33
<Reference> Previous Medium-Term Strategy Results (Operating Performance)
14/3 Medium-Term Management
Strategy Target (17/3)
17/3
Actual Actual Compared with 14/3
Compared with plan
Office and IT-Related Equipment 2,028 2,200 1,801 88.8 81.9
Medical Equipment 440 500 415 94.4 83.2
Leasing and Installment Sales Business 3,209 3,660 3,362 104.8 91.9
Financial Services Business 248 340 327 131.9 96.3
Total Transaction Volume 3,457 4,000 3,690 106.7 92.3
Total Operating Assets 6,978 7,800 8,086 115.9 103.7
Collection Agency Services 1,060,000 cases
1,700,000 cases
1,600,000 cases
150.9 94.1
Factoring Services for Nursing-Care Facilities 198 600 606 306.1 101.0
(100 millions of yen, %)
*Figures for collection agency services are calculated based on the largest monthly number of items in a year.
*Operating assets shown include securitized portions of lease receivables.