Fiscal Year Ended March 2016 Briefing on Financial Results

0

Fiscal Year Ended March 2016

Briefing on Financial Results

April 28, 2016

Ricoh Leasing Company, Ltd.

1

1. Performance Overview(Fiscal Year Ended March 2016)

2

15/3 16/3

Actual Forecast Actual Difference Ratio Growth Rate

Net sales 2,587 2,660 2,758 98 103.7 6.6Gross profit 298 306 303 (2) 99.3 1.9

SGA expenses 133 136 134 (1) 98.7 0.8Operating income 165 170 169 0 99.7 2.7(Operating income ratio) 6.4 6.4 6.1 (0.3) - (0.3)

Ordinary income 164 168 168 0 100.3 2.4Net income 101 108 110 2 102.3 9.0

(Net income ratio) 3.9 4.1 4.0 (0.1) - 0.1Year-on-year change in yen

Net income per share 324.71 345.97 353.96 7.99 - 29.25Dividend per share 50.00 55.00 55.00 0.00 - 5.00

Consolidated ResultsConsolidated Results Performance Overview

(100 millions of yen, %)

* Forecast figures are those announced on April 28, 2015.

Record high

Record high

“Profit attributable to owners of parent” is presented as “Net income.”

3

Factors Affecting Operating Income Performance Overview

16,500 million

yen

16/3Actual

16,900 million

yen

400 million yen

Gross profit calculation SGA expenses

Increase in gross margin

for the lease/installment business

Increase in expenses

15/3 Actual

Increase in financial income

+1

Decrease in allowance for

doubtful accounts

+4

(2)

(100 millions of yen)

+1Financing cost

±0

44

Changes in Selling, General and Administrative ExpensesChanges in Selling, General and Administrative Expenses Performance Overview

63 62 58 59 59

62 63 62 64 67

4 4 9 8

50

100

150

12/3 13/3 14/3 15/3 16/3

125 125 121 123

115

126

125133130

134

(10)

OthersPersonnel expenses

Allowance for Doubtful accounts

5

Transaction Volume by BusinessTransaction Volume by Business


*Transaction volumes are calculated on an inspection basis.

Performance Overview

15/3 16/3

Actual Growth Rate Actual Growth

Rate

Finance lease 2,621 (2.7) 2,663 1.6

Operating lease 124 19.5 127 1.7

Installment sales 485 18.5 547 12.8

Leasing/Installment sales business 3,231 0.7 3,337 3.3

Financial services business 259 4.6 264 1.7

Total transaction volume 3,491 1.0 3,601 3.2

Record high

Record high

Record high

6


Transaction Volume by Product: Leasing/Installment sales businessTransaction Volume by Product: Leasing/Installment sales business Performance Overview

15/3 16/3Japan Leasing

AssociationTotal (15/4-16/3)

Actual Forecast Actual Difference Growth Rate

Change from 14/3

Growth Rate

Growth Rate

Change from 14/3

Growth Rate

Office and IT-related equipment 1,855 1,910 1,794 (115) (3.3) (11.6) 1.9 (8.6)

Medical equipment 398 420 432 12 8.4 (1.9) 10.1 (21.9)

Industrial machinery 285 320 337 17 18.5 98.8 16.2 6.1

Commercial and service industry equipment

300 305 328 23 9.2 29.8 (1.9) (6.9)

Vehicles and transportation equipment

137 140 139 0 1.4 10.2 2.5 (3.0)

Others 253 260 305 45 20.5 60.4 15.1 9.7Total transaction

volume 3,231 3,355 3,337 (17) 3.3 4.0 5.7 (3.9)

7

Operating Results by Segment (Lease/Installment business)Operating Results by Segment (Lease/Installment business) Performance Overview


Net sales (left bar) Segment income (right bar)

2,249 2,2772,388

2,673

155 154138 142

0

500

1,000

1,500

2,000

2,500

12/3 13/3 14/3 16/30

50

100

150

200

Record high


2,511

144

15/3

8

Operating Results by Segment (Financial Services Business)Operating Results by Segment (Financial Services Business) Performance Overview

(100 millions of

yen)

45.949.6

54.4

65.3

20.322.7

27.0

33.1

0

10

20

30

40

50

60

12/3 13/3 14/3 16/3

Record highNet sales (left bar) Segment income (right bar)

59.4

26.3

15/3

Record high

% of operating income

12.1% 13.3% 16.8% 16.0% 19.6%

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Financial Services Business-Priority MeasuresFinancial Services Business-Priority Measures Performance Overview

Number of monthly transaction cases of collection agency services(Unit: 10,000)

92106

137

0

50

100

150

Medium-term management strategy

target (17/3)

13/3 14/3 15/3 16/3


90

198

326

0

100

200

300

400

13/3 14/3 15/3

Factoring services for nursing-care benefits - transaction volume

128

170

600

471

16/3Medium-term

management strategy target (17/3)

500

10

Balance of Operating Assets and Changes in Default RateBalance of Operating Assets and Changes in Default Rate

*Balances shown include securitized portions.


Finance lease (securitized

portion)

Operating loans

Installment sales

Operating lease

Default rate (%)

Default rate = Default loss amount / Average balance of operating assets

Record high

(100 millions of

yen)

4,529(242)

4,687(244)

5,142(245)

5,327(246)

93 97123 158

436508

612725

9251,039

1,0991,142

4,000

5,000

6,000

7,000

8,000

12/3 13/3 14/3 15/3 16/3

5,9866,333

7,3546,978

777,300 million yen

0.32 0.370.25 0.19 0.18

5,517(247)

187837

1,231

1111

Total Procurement Amount and Capital CostTotal Procurement Amount and Capital Cost

[External ratings]S&P AR&I A+JCR AA-

Fixed charge coverage ratio (%)

Capital cost

Total amount procured

*Total amounts procured: Balances include debts paid through securitization.Capital costs shown are expenses included in the calculation of gross profit.



0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

12/3 13/3 14/3 15/3 16/3

5,988

5,1035,425

671,000 million yen

251920

6,337

15

Long-term

Short-term

55.6 57.9 56.961.1 62.0

1400 million yen

12

2. Financial Forecast(Fiscal Year Ending March 2017)

13

Current Business EnvironmentCurrent Business Environment Financial Forecast

・ Concerns about economic slowdowns in major countries, uncertainties about the future due to stock price and exchange rate fluctuations, and low crude oil prices (CHAIL) Impact on capital investments in Japan

・ Monetary easing policy (negative interest rates, etc.) by the Bank of Japan Continuing low levels of corporate bankruptcies and interest rates

・ Expansion of inbound demand, activation in the agricultural field・ Saturation of demand associated with the reconstruction of Tohoku

Market

Medical/nursing care: Bipolarization before the scheduled revisions of medical fees and nursing care fees in 2018 (hospitals, clinics, pharmacies, nursing care facilities) M&A, investments (capital, human resources), relocation, business closure

Information equipment: Increasing needs for virtualization and cloud computing From selling equipment to receiving consignment of operations

(service contract)Manufacturing: Capital investments have been stagnant since the China shock last

summer

Customer

Company

・ Sluggish growth in transactions due to changes in the market environment

・ Decreases in lease renewals due to decreasing transactions for new leases after Lehman collapse

・ Defaults in the nursing care industry on the rise despite the overall record low level

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Consolidated Income ForecastConsolidated Income Forecast(100 millions of yen, %)

15/3 16/3 17/3Actual Actual Forecast Growth Rate

Net sales 2,587 2,758 2,850 3.3Gross profit 298 303 310 2.1

SGA expenses 133 134 137 2.1Operating income 165 169 173 2.1

(Operating income ratio) 6.4 6.1 6.1 (0.0)

Ordinary income 164 168 171 1.5Net income 101 110 115 4.1

(Net income ratio) 3.9 4.0 4.0 0.0Year-on-year change in yen

ROA 1.26% 1.29% 1.29% (0.00%)ROE 7.7% 7.9% 7.7% (0.2%)

Net income per share 324.71 353.96 368.39 14.43Dividend per share 50.00 55.00 60.00 5.00

Financial Forecast

15

Transaction Volume Forecast by BusinessTransaction Volume Forecast by Business


16/3 17/3

Actual Forecast Growth Rate

Finance lease 2,663 2,700 1.4

Operating lease 127 130 2.4

Installment sales 547 600 9.6

Leasing/Installment sales business 3,337 3,430 2.8

Financial services business 264 285 7.9

Total transaction volume 3,601 3,715 3.1

Financial Forecast

16

Transaction Volume Forecast by Product: Leasing/Installment sales businessTransaction Volume Forecast by Product: Leasing/Installment sales business


16/3 17/3


Office and IT-related equipment 1,794 1,830 2.0

Medical equipment 432 455 5.3

Industrial machinery 337 356 5.3

Commercial and service industry equipment 328 335 2.1

Vehicles and transportation equipment 139 144 2.9

Others 305 310 1.4

Total 3,337 3,430 2.8

Financial Forecast

Business Expansion Efficiency

Business Productivity

On Business

Customer (Increase customers)

New Business

Efficiency (Personnel efficiency)ALM (Asset Liability Management)Accident (Fewer accidents)

Sales support-related leasing know-howVendors: 6,000 companies/yearCustomers: About 400,000 companies Mainly small- and medium-sized companies

Industry’s top funding capabilitiesSmall-amount/large-volume contracts Risk diversificationNo. of processing items: About 1.2 million items/year

OCeaN

Stra

tegi

esS

treng

ths

Ricoh Group companies

Communication & Speed & Challenge

ES (Employee Satisfaction) CS (Customer Satisfaction)

CSRCor

pora

te

cultu

re

17

Management StrategyManagement Strategy Financial Forecast

18

Three ReformsThree Reforms Financial Forecast

Measures implemented in FY2015 Measures planned for implementation in FY2016

Bus

ines

s

To be the industry’s No. 1 in office and IT-related equipment, medical equipment, and nursing care businesses

・Collaboration among Ricoh Group companies (new businesses, process reforms)

・Lead manager/keyperson assignment (medical/nursing care)

・New development by making use of new scheme/human network

・Realization of OCeaN Strategy management・Promotion of measures to increase profits

Exploring new growth areas

・New productsCasa Direct, accounting outsourcing service, loan for condominium management associations

・Implementation of new business development office

・Provision of customer value based on new products and schemesLease of forklift with RL guardHome owner direct, etc.

Proc

ess

Continuing to implement cross-company business process reforms

・New establishment of structural reform promotion department→Reinforcement of systems and workforce→Formulation of structural reform scheme and

implementation of short-term measures

・Adoption of structural reform schemeWorking style reformsBusiness process/system reforms

Hum

an R

esou

rces Implementation of new personnel system “Be kind to people but strict in terms of work”

・New personnel system (challenge assessment, course change, promotion & demotion)

・Internal job posting system・Child care/nursing care support (child-rearing father

support/challenge vacation system, etc.)・Family Day

・Promotion of good health management“Good Health Declaration” (all employees personally)Ensuring proper management of persons subject to reexaminationEnhancement of industrial physician system, promoting transparency of health indicators

19

Final SummaryFinal Summary Financial Forecast

Platinum “Kurumin”

Health & Productivity Stock

Nadeshiko Brand

20Forward-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.

21

<Reference> Breakdown of Sales for Fiscal Year Ended March 2016<Reference> Breakdown of Sales for Fiscal Year Ended March 2016


15/3 16/3

Actual Forecast Actual Difference RatioGrowth

Rate

Leasing revenue 2,012 2,078 2,124 46 102.3 5.6

Installment sales revenue 299 309 352 43 114.0 17.7

Financing revenue 24 26 26 0 101.4 6.4

Commission revenue 40 42 44 2 105.6 10.6

Others 210 205 211 6 103.0 0.2

Total net sales 2,587 2,660 2,758 98 103.7 6.6

22

<Reference> Breakdown of Sales Forecast for Fiscal Year Ending March 2017<Reference> Breakdown of Sales Forecast for Fiscal Year Ending March 2017


16/3 17/3


Leasing revenue 2,124 2,190 3.1

Installment sales revenue 352 390 10.7

Financing revenue 26 27 2.4

Commission revenue 44 48 8.2

Others 211 195 (7.6)

Total net sales 2,758 2,850 3.3

23

Reference: Anticipated Factors Affecting Operating Income for FYE March 2017


17,300 million

yen

16/3Forecast

16,900 million

yen

400 million yen

Gross profit calculation SGA expenses

Allowance for doubtful

accounts

16/3Actual

+2Increase in

financial income

Increase in gross margin for the

lease/installment business

Increase in expenses

(2)

+4

Financingcost±0 ±0