Financial Results for theFirst Half of the Fiscal Year Ending ...pdf.irpocket.com/C8793/TM54/tMoh/pjC2.pdf1. Financial Results for theFirst Half of FY2015 Revenues ：Increased by

Financial Results for the First Half of the Fiscal Year Ending March 31, 2016(FY2015)

October 30, 2015NEC Capital Solutions Limited

CONTENTS1. Financial Results for the First Half of FY2015

1）Highlights of Consolidated Financial Statements

2）Business Environment3）Consolidated Financial Summary4）Consolidated Revenues by Business Segment5）Contracts Executed by Business Segment

（Non-consolidated base）6）Leasing/Installment Sales Business（Non-consolidated base）7）Finance Business（Non-consolidated base）8）RISA Business (Operating Income)9）Operating Asset Balances (Consolidated)

10）Procurement Funds (Consolidated)11）Credit Costs (Consolidated)

2. Business Plan for March 2016 Term(FY2015)1）Consolidated Earnings Forecasts

3. Most Recent Business Topics

1. Financial Results for the First Half of FY2015

5 © NEC Capital Solutions Limited 2015


【Business Environment】・Total leasing contracts increased Y/Y due to lessening of the effect offactors such as the tax rate increase implemented in April of last year.・Conditions for procuring funds remained favorable.・Both the number of bankruptcies and their total liabilities were declining.

【 Sales Top Line 】・ Contract executions in the Leasing/Installment Sales business increasedY/Y .・New contracts increased Y/Y.・Finance Business fell Y/Y.

＜ Leasing/Installment Sales Business ＞Contracts executed: up 11.0％ New transactions: up 6.9 ％

＜ Finance Business ＞Contracts executed: down 4.0％ New transactions: down 3.2％

【 Business Performance 】・Income increased on sales of healthcare-related real estate, ordinary income and quarterly net income decreased due to factors such as reduced reversals of credit costs.

1）Highlights of Consolidated Financial Statements



0

1000

2000

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4000

0

200

400

600

800

1000

1200

1400

13/1Q 13/2Q 13/3Q 13/4Q 14/1Q 14/2Q 14/3Q 14/4Q 15/1Q 15/2Q

Total Leasing Contracts:-Our mainstay Information and Communication Equipment leasing increased by 9.6% Y/Y.-Total leasing contracts also up by 10.6% Y/Y. Bankruptcies：-Total liabilities in bankruptcy in the current fiscal year fell Y/Y for four terms in a row. -Recorded the lowest number of bankruptcy events since the Lehman shock

2） Business Environment

(Unit: JPY bn)▌Bankruptcies (total liabilities/number of bankruptcies)

Total liabilities(Left axis)

(Number)

(Right axis)

-40

-30

-20

-10

0

10

20

30

40

50

60

12/1Q 12/2Q 12/3Q 12/4Q 13/1Q 13/2Q 13/3Q 13/4Q 14/1Q 14/2Q 14/3Q 14/4Q 15/1Q 15/2Q

▌Year-on-year change in total leasing contracts

Volume of leasing

contracts

Information and communication

equipment

Construction machinery

Number of bankruptcies

(Source: Lease statistics of the Japan Leasing Association)(Source: Bankruptcy information on the website of Teikoku Data Bank; liabilities of companies that filed for bankruptcy)



Revenues ：Increased by 3.0% Y/Y on sales of healthcare-related realestate held for resale. Ordinary Income ：Reductions of reversals of credit costs and increased impairment losses booked on leased assets contributed to a48.8% Y/Y declineEquity Ratio ：9.9% （Sep.2013）→10.3% （Sep.2014）→9.4% （Sep.2015）

3） Consolidated Financial Summary

5.0

2.6

2.0

0.6 0.5

0.3 0.2 0.4 0.8

Profit on loan increased

Gross profit on otherdeclined

Reversalsof credit

costsdeclined

Impairment loss

Non-operating incomeincreased

▌Performance measures

Selling, general and administrative expenses increased

Gross profit on Leasing declined

▌Main Reasons for Y/Y Increase/Decrease in Ordinary Income(Unit: JPY bn)

FY20142Ｑ

FY20152Ｑ

(Unit: JPY bn)FY2014 FY2015

2Q 2Q Y/Y Change

Revenues 97.2 100.2 3.0%

Operating Income 5.2 2.5 -53.0%

Ordinary Income 5.0 2.6 -48.8%

Profit attributable to owners of parent 3.0 1.8 -39.7%

Net Income per Share (JPY) 137.24 82.72 －

Operating Asset Balance 641.8 727.4 13.3%

Net Assets 85.8 99.9 16.5%

Shareholders' Equity 73.9 75.2 1.7%

Equity Ratio (%) 10.3 9.4 -1.0

Interim Dividend per Share (JPY) 22 22 －



4） Consolidated Revenues by Business Segment

▌Revenues by Business Segment >・Revenues decreased by 2.7% Y/Y on withdrawal from small-scale business.

Operating income fell by 51.5% Y/Y due to factors such as smaller reversals of credit costs.

>・Revenues increased by 51.2% Y/Y on increased income from sale of investment securities.Operating income fell by 4.6 % Y/Y on smaller

reversals of credit costs.>・Despite an operating profit in the RISA business at the non-consolidated level, depreciation of goodwill produced an operating loss at the consolidated level.

>・Revenues increased by 41.1% Y/Y on sales of healthcare-related real estate held for sale.

Operating income improved by JPY 100 million Y/Y, moving into the black, on higher gross profit.

*Excluding adjustment amount


2Q 2Q Y/Y Change

Revenues 84.6 82.3 -2.7%Gross Profit 6.5 5.5 -15.5%Operating Income 4.3 2.1 -51.5%Revenues 1.7 2.5 51.2%Gross Profit 1.2 2.1 72.0%Operating Income 1.2 1.1 -4.6%Revenues 4.1 5.7 37.1%Gross Profit 2.2 1.6 -30.0%Operating Income 0.5 -0.0 -Revenues 6.9 9.7 41.1%Gross Profit 0.9 1.2 36.9%Operating Income -0.1 0.1 -Revenues 97.2 100.2 3.0%Gross Profit 10.8 10.3 -4.6%Operating Income 5.2 2.5 -53.0%

Total

Leasing/InstallmentSales Business

Finance Business

RISA Business

Other Business



5）Contracts Executed by Business Segment(Non-consolidated base)

▌Contracts Executed by Business Segment

>・Various successful measures in the Leasing and Installment Sales Businessincreased contract executions by 11.0%. ・In the Finance Business, despite a large liquidation of receivables in the sameperiod last year, contracts executed rebounded to be virtually unchanged Y/Y.

>・The Leasing/Installment Sales Business and Finance Business both performed in

line with contracts executed in those business segments.

▌New Transactions by Business Segment

(Unit: JPY bn)

FY2014 FY20152Q 2Q Y/Y Change

59.9 66.5 11.0%Leasing 57.9 62.4 7.7%Installment Sales 2.0 4.1 101.6%

Finance Business 141.6 135.9 -4.0%Loans 93.0 87.6 -5.8%Bulk Factoring 48.6 48.3 -0.6%

Other Business 1.4 2.0 48.7%

Total 202.9 204.4 0.7%

Leasing/ Installment Sales Business


2Q 2Q Y/Y Change

90.5 96.7 6.9%

Leasing Business 87.8 93.3 6.2%Installment Sales 2.7 3.5 27.6%

Finance Business 141.4 136.9 -3.2%Loans 92.8 88.6 -4.6%Bulk Factoring 48.6 48.3 -0.6%

Other Business 1.5 2.3 50.4%

Total 233.5 235.9 1.0%

Leasing/ Installment Sales Business



（単位：億円）

6） Leasing/Installment Sales Business (Non-consolidated base)

▌(For reference) Contracts Executed by Equipment

▌Contracts Executed by Customers’ Sector ▌New Transactions by Customers’ Sector

・Contracts Executed by Customers’ Sector inpublic and private both increased by Y/Y

Overall, Contracts Executed by Customers’ Sector increased by 11.0% Y/Y.

・Private sector new transactions grew significantly Y/Y

Overall, New Transactions by Customers’ Sector increased by 6.9％ Y/Y.

・2Q saw steady growth in public sector lines and private sector lines due to the implementation of various measures.


2Q 2Q Y/Y Change

61.3 59.4 -3.1%Private Sector 29.2 37.3 27.7%

Services 6.4 8.9 37.6%Distribution 6.7 9.9 46.8%Manufacturing 7.8 10.6 35.8%Other 8.3 8.0 -3.4%

Total 90.5 96.7 6.9%

Public Sector: Government & Municipal


2Q 2Q Y/Y Change

25.9 30.3 17.1%Private Sector 34.1 36.2 6.3%

Services 6.3 9.1 43.6%Distribution 7.5 9.5 27.3%Manufacturing 6.8 13.4 96.6%Other 13.5 4.2 -68.7%

Total 59.9 66.5 11.0%

Public Sector: Government & Municipal


2Q 2Q Y/Y Change

34.8 47.3 35.8%Computer Hardware 19.3 21.1 9.7%Computer Software 14.4 25.2 74.7%Telecommunications Equipment 1.1 1.0 -15.0%

Office Equipment 2.1 2.0 -7.2%Other 23.0 17.2 -25.1%

Total 59.9 66.5 11.0%

Information and Communication Equipment



7） Finance Business (Non-consolidated base)

▌Contracts Executed by Form of Contract

・In terms of executions by type of contract, Individual Factoring fell below the level last year due to a large factoring transaction last year, and Business Loans declined Y/Y, with the Finance Business as a whole declining by 5.8% Y/Y.

・Although the Services, Distribution and Other sectors saw growth, other sectorssaw Y/Y declines, and overall Private Sector declined by 5.7%.

・In line with global strategy, foreign projects also saw significant improvements inresults.

▌Contracts Executed by Customer s’ Sector(Unit: JPY bn)

FY2014 FY20152Q 2Q Y/Y Change

Reimbursements,APF, Installment Sales Transaction-Backed 3.6 4.9 37.3%

Individual Factoring 42.3 36.7 -13.2%Securitization of Medical Institution Receivables 0.1 ― ―

Business Loans 42.3 37.6 -11.0%

Other 4.7 8.3 77.0%

Total 93.0 87.6 -5.8%


2Q 2Q Y/Y Change

0.5 0.4 -23.6%

Private Sector 92.5 87.2 -5.7%

Services 5.0 7.4 48.5%

Distribution 4.3 8.7 101.6%

Manufacturing 45.7 36.0 -21.4%

Financial 13.3 13.1 -1.0%

Real Estate 9.5 5.2 -45.9%

Other 14.6 16.8 14.6%

Total 93.0 87.6 -5.8%

Public Sector:Government & Municipal


(Unit: JPY bn)

FY2014 FY20152Q 2Q

Asset business Revenues 2.9 3.7 26.8%

Gross profit 1.9 1.0 -46.4%

Operating income 1.1 0.4 -63.7%

Real estate Revenues 0.9 1.7 89.9%

Gross profit 0.1 0.3 197.4%

Operating income -0.1 0.1 ―

Advisory Revenues 0.4 0.3 -12.6%

services Gross profit 0.3 0.3 -11.8%

business Operating income 0.1 -0.0 ―

Goodwill Revenues -0.0 0.0 ―

other Gross profit -0.1 -0.0 ―

Operating income -0.6 -0.5 ―

Total Revenues 4.1 5.7 37.1%

(Consolidated) Gross profit 2.2 1.6 -30.0%

Operating income 0.5 -0.0 ―

Y/Y Change

business


8） RISA Business (Operating Income)

Despite an operating profit at the non-consolidated level,

depreciation of goodwill produced an operating loss at

the consolidated level.>・Profits declined on lower collection profits in the loan asset investment business.

>・Income increased on sales of real estate held for sale.

・Secured roughly similar profits to last year.

※Cut-off error had a large monetary impact, so was reported for this segment.



>

・Leasing/Installment Sales Businessbalance grew by 6.8％ or JPY 28.8bn Y/Y.

The Loan Business balance increased by 20.5% or JPY 28.3bn Y/Y.

⇒ The Loan Business balance increased on financing denominated in foreign currencies associated with development of global businesses. Also, IndividualFactoring increased by JPY 22.6bn due to growth in manufacturing industry factoring. ・The balance in Other Business grew by

JPY 30.4bn Y/Y.⇒Healthcare-related real estate for sale

grew by JPY 30.7bn.JPY 7.1bn (Sep. 2014)→JPY 37.8bn (Sep. 2015)

423.6 423.3 452.1

130.5 138.5 166.9

22.6 26.6

27.0 39.2

49.8 44.6

42.2

628.0 641.8

727.4

0

200

400

600

800

Sep.2013 Sep.2014 Sep.2015

RISABusiness

OtherBusiness

BulkFactoring

LoanBusiness

Leasing /InstallmentSalesBusiness

9）Operating Asset Balances (Consolidated)

＋6.8%

(Unit: JPY bn)

(Unit: JPY bn)Sep.2014 Sep.2015 Y/Y Change

Public Sector 247.4 262.3 14.8

Private Sector 175.8 189.7 13.9

423.3 452.1 28.8



476.6 449.5

429.7 437.8 458.6 452.1

135.0 137.3

127.3 110.9

145.1 166.9

31.6 33.6

33.3 24.3

28.9 27.0

2.63.1

42.6 39.282.6

83.4

56.0 43.0

42.5 42.2

725.8 703.7

648.8 619.2

717.8 727.4

0

200

400

600

800

Mar.2011 Mar.2012 Mar.2013 Mar.2014 Mar.2015 Sep.2015

Trends in operating asset balances

RISA Business

Other Business

Bulk Factoring

Loan Business

Leasing / InstallmentSales Business

(Unit: JPY bn)

9-1） Trends in contract executions, operating asset balances

151.3 149.5 156.9 181.6 175.6

66.5

145.8 143.8 160.4

143.7 162.9

110.2

132.2 121.0 118.6 94.0

100.6

48.3

2.4 2.9

3.0 3.6

3.4

2.0

431.6 417.2

438.9 422.8

442.6

227.1

0

200

400

600

FY2011 FY2012 FY2013 FY2014 FY2015 FY2015 2Q

Trends in contract executions

Other Business

Bulk Factoring

Loan Business

Leasing / Installment Sales Business

(Unit: JPY bn)


0%10%20%30%40%50%60%70%80%90%

100%

Sep.2013 Sep.2014 Sep.2015

・Funding cost ratio was 0.72％ onconsolidated basis

⇒Although the average balance of interest-bearing debt grew, thefunding cost ratio declined on a Commercial Paper shift on long-termdebts, lower funds procurementspread, and lower market interestrates.・Direct funding ratio was increasedby 14.4 ％(Sep. 2014) → 21.0 ％(Sep.2015）⇒ Rose on higher Commercial Paper balance


0.84%

0.85% 0.72%

0.6%

0.7%

0.8%

0.9%

1.0%

FY2013 2Q FY2014 2Q FY2015 2Q

資金原価率（%）＝資金原価÷有利子負債平残

Short-termborrowings

Long-termdebts

Payable UnderSecuritized

LeaseReceivable

CommercialPaper

Bonds Directfunding

ratio21.0％

10）Procurement Funds (Consolidated)▌Funding Cost Ratio

▌Composition of Interest-bearing Debt

▌Composition of Interest-bearing DebtFunding cost ratio (%)= Cost of funding / Average Balance of Interest-bearing debt

(Unit: JPY bn)

FY2014 FY2015

2Q CompositionRatio 2QComposition

Ratio Y/Y Change

Short-term Borrowings 25.1 4.3% 19.8 3.0% -5.3Long-term Debts 479.3 81.4% 497.7 76.0% 18.4Commercial Paper 33.0 5.6% 71.0 10.8% 38.0Bonds 35.0 5.9% 50.0 7.6% 15.0Payable UnderSecuritized LeaseReceivables

16.7 2.8% 16.6 2.5% -0.1

Total 589.2 100.0% 655.1 100.0% 66.0



0.23

-0.03

-0.8

0.17

-1.6

-0.2

-2.1 -0.1

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

FY2014 2Q FY2015 2Q

Except Loan Business

Loan Business

RISA Business

(Unit: JPY bn)(Unit: JPY bn)

11）Credit Costs (Consolidated)

・Credit costs were increased by JPY 2.0bn Y/Y (of which, general expensesincreased by JPY 0.9bn).・Specific reserve expenses increased by JPY 1.1bn due to factors such as lowerreversals of allowances for doubtful debts.

▌Non-performing Loans (Specific reserve)▌Credit Costs (Specific reserve + general reserve)

RISA Business


0.23

-0.03 -0.7

0.11

-0.7

-0.18

-1.2 -0.1

-0.38% -0.03%

-6%

-4%

-2%

0%

-1.5

-1

-0.5

0

0.5

1

ＦＹ2014 2Q ＦＹ2015 2Q

Except Loan business

Loan Business

RISA Business

Rate of Client Bankruptcy

RISA Business


The specific reserve ratio (%) = the amount of losses arising as a result of new insolvencies / (average balance of operating assets + average balance of claims in bankruptcy)The amount of losses arising as a result new bankruptcies = claims in bankruptcy + doubtful loans

2. Business Plan for March 2016 Term(FY2015)


2. Business Plan for March 2016 Term(FY2015)

1）Consolidated Earnings Forecasts

▌Consolidated Earning Forecasts

▌Dividend Per Share(Unit: JPY)

Interim Year-end Annual

22.00 22.00 44.00

22.00 22.00 44.00FY2014 Actual

FY2015 Forecast

(Unit: JPY bn)Actual Forecast

FY2015 FY2015 FY2015

(1H) (1H)

Revenues 100.2 90.0 190.0

Operating Income 2.5 2.5 5.5

Ordinary Income 2.6 2.5 5.5

Profit attributable to owners of parent 1.8 1.5 3.5　　　　　　　　　　　　(Unit: JPY)Net Income per Share 82.72 69.66 162.54



▌Leases of Electricity Rechargers for EV/PHV Charging Stationsl In partnership with NEC, introduced recharger leases for large-scale projects to

install regular rechargers to recharge electric vehicles (EV) and plug-in hybrid vehicles (PHV) lDecision to establish multiple large-scale facilities for the trading industrylCumulative number of installation contracts surpassed 2,200 contracts in Oct. 2015lNEC Group providing total service solutions from choice of machinery and

installation, through to funding and managementlEV and PHV stations are indispensable infrastructure to allow for the popularization

of environment-friendly next-generation vehicles, and the business of those installations is a good example of CSV management

※A regular electric rechargers installed at the Joyful Honda Chiyoda Store



▌Equity investment in Hamamatsu New Electric. Co. Ltd. (Oct. 15)l Equity stake investment in the new electric company promoting local generation for local consumption of

renewable energy within Hamamatsu Cityl This initiative is the first public-private partnership regional PPS enterprise among Japan’s government-

designated citiesl Purchases of renewable energy generated within city, e.g. solar, supply clean and inexpensive power to

residents and businesses in city and public facilities

Hamamatsu New Electric.

Co. Ltd.

(Established in Hamamatsu City) Investment

Power purchase

Renewable energy

Chubu Electric Chubu Electric Power Co., Inc.,other

Power purchase

Power sale

Customers within cityPower sale

NTT

INC.

NTT FACILITIES,

INC.

NEC Capital Solutions

Businessmanagement

PPS operations

Hamamatsu City public Hamamatsu City public facilities

Hamamatsu City

Power Power Producers

Mega solar

Incineration plant

Investors (total 9) Hamamatsu City、NTT FACILITIES, INC.、Other 6 investorsNEC Capital Solutions

CEMS demand/supply management

Promote energy policies



▌Absorption-type merger of consolidated subsidiaries to strengthen ICT-related services business (Oct. 1)l To create a structure that provides a one-stop shop for complete lifecycle management of

customer ICT assets, merged two subsidiaries and renamed the company “Reboot Technology Services and Capitech Limited”

l Integrated the functions of provider of ICT-equipment management and outsourcing of administration services operations, Capitech Limited, and used ICT-related equipment regeneration and resale company, Reboot Technology Services Limited

l Combined with our finance functions including leases, able to provide greater levels of service than ever before

Reboot Technology Services Limited

（Recycling and sale of used ICT-related equipment）

Reboot Technology Services and CapitechLimited

Capitech Limited(Management of ICT equipment,

outsourcing of administration services operations)

Functional integrationMerger



▌CSV management evaluated highly by third-party organizations

▌SMBC Sustainability Assessment Loan (Oct. 6)lObtaining Highest AAA rating: 7 rating levels AAA to E (last year’s rating: AA)l “SMBC Sustainability Assessment Loan” are loans that set loan conditions according

to ratings of such things as a company’s efforts in terms of ESG information disclosure and sustainability, based on special evaluation criteria created by Sumitomo Mitsui Banking Corporation and The Japan Research Institute, Ltd.

lOur “corporate philosophy commitment to sustainability,” “responding to social issues and improving enterprise value” and “measures to reduce burden on the environment of business activities” were all evaluated very highly.

▌Development Bank of Japan Environmental Responsibility Ratings (Mar. 20)lRating result: 209.5 points/possible 250 points (last year 208.0 points/250)l For 11 consecutive years since 2004 we have received the highest ranking of

“especially progressive measures to care for the environment” and have received special awards six times.

l “DBJ environmental rating financing” selects outstanding businesses to provide loans at preferential interest rates based on a screening system (rating system) developed by the DBJ that evaluates a business’s level of environmental management.

lOur “Development of a Medium- to Long-term Environmental Plan,” “Proprietary Measures to Integrate Funds Procurement and Leases,” “Providing services that contribute to a recycling social structure” and “Collaborating with suppliers as a manufacturer-affiliated leasing company” were all evaluated very highly.


The presentation materials are solely for the purpose of providing corporateinformation of NEC Capital Solutions Limited and not for soliciting purchase, sale, orinvestment in securities issued by the Company. We ask for the discretion ofinvestors in making investment decisions.The presentation materials contain forward-looking statements pertaining to theCompany’s plans, strategies and financial targets, which are created based oncurrently available assumptions, data, or methods and contain a certain level of riskor uncertain factors.Investors are advised not to place undue reliance on the forward-looking statementsas they only reflect the Company’s analysis and expectations. A number of importantfactors that could cause actual results to differ materially from such statementsinclude (i) change in general economic conditions and laws/regulations in theCompany’s market, (ii) potential legal liabilities relating to the Company’s businessand operations, (iii) fluctuating demand for and competitive pricing pressure on theCompany’s services, (iv) deterioration of the global economic and financialenvironment, (v) downturn of domestic and international stock markets, and soforth. Risks and uncertainties also include any future events with materialunforeseen impacts.Forward-looking statements contain the most updated information as of the date ofcompilation. New risks and uncertainties constantly arise, and it is impossible for theCompany to predict such events or how they may affect the Company.


本資料に記載されている株主・投資家向け情報は、投資勧誘・保証を目的として作成された

ものではありません。実際に投資を行う際は、ご利用者ご自身のご判断において行われるよ

うお願い致します。

本資料に記載されている当社の計画、戦略および業績見通しは、将来の予測であって、リス

クや不確定な要因を含んでおります。

また、本資料に記載されている経営目標は予想ではなく、将来の業績に関する経営陣の現在

の予想を反映したものでもありません。むしろ、経営陣が事業戦略の実行を通じて達成しよ

うとする目標であります。

実際の業績等は、さまざまな要因により、見通し等と大きく異なる結果となりうることをあ

らかじめご承知願います。実際の業績等に影響を与えうる重要な要因としては、当社の事業

領域を取り巻く経済情勢及び規制や法令の変更、潜在的な法的責任、当社のサービスに対す

る需要変動や競争激化による価格下落圧力などがありますが、これら以外にも様々な要因が

ありえます。また、世界経済の悪化、世界の金融情勢の悪化、国内外の株式市場の低迷など

により、実際の業績等が経営目標その他の見通しと異なる結果となる可能性もあります。

当社による将来予測に関する記述は、その日現在のものであることをご承知おきください。

新たなリスクや不確定要因は随時生じるものであり、その発生や影響を予測することは不可

能であります。また、リスクや不確定要因があるため、将来予測に関して記述されているこ

とが実際には起こらない場合もありえます。これらの記述に全面的に依拠することは控える

ようお願いします。

To be a global solution service company that aims to enhance social value with customers

NEC Capital Solutions Group Vision

Financial Results for theFirst Half of the Fiscal Year Ending ...pdf.irpocket.com/C8793/TM54/tMoh/pjC2.pdf1. Financial Results for theFirst Half of FY2015 Revenues ：Increased by

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