Ricoh Leasing Company, Ltd. - リコーリース株式会社 Materials... · Ricoh Leasing Company,...

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


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.


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



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%)


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


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


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.


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


20


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


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


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


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


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


2016

15.9%


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


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


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


<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


*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.

Ricoh Leasing Company, Ltd. - リコーリース株式会社 Materials... · Ricoh Leasing Company,...

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Transcript of Ricoh Leasing Company, Ltd. - リコーリース株式会社 Materials... · Ricoh Leasing Company,...