FY3/2021 Results
Mitsubishi HC Capital Inc.

May 17, 2021

IndexI.

FY3/2021 Results

II.

Forecast for FY3/2022

III. Appendix

1

I.

FY3/2021 Results

2

Financial Highlights
 At Mitsubishi UFJ Lease & Finance (MUL), net income attributable to owners of the parent for FY3/2021 declined 21.8% YOY to 55.3
billion yen. Although real estate-related businesses and other areas performed steadily, aviation-related earnings declined and credit
costs increased, among other factors. However, the progress rate versus forecast (net income of 50.0 billion yen) was 110.7% mainly
thanks to credit costs falling short of estimate.
 At Hitachi Capital (HC), profit before tax increased 0.1% YOY to 42.5 billion yen thanks to steady performances mainly inenvironment/energy of the Japan business, despite profit decrease mainly due to the COVID-19 pandemic in the global business. The
progress rate versus forecast (profit before tax of 38.5 billion yen) was 110.6%. Net income attributable to owners of the parent increased
4.3% YOY to 32.0 billion yen.
 Net income for FY3/2021, when simply summing up the results of both companies, was 87.3 billion yen, although the accounting
standards differed.
(a)

(b)

(c)

(d)

J-GAAP(Billion Yen)

(e)

(f)
(g)

IFRS

Mitsubishi
UFJ Lease

YOY
ChangeYOY
Change (%)

HitachiCapital

YOY
ChangeYOY
Change (%)(Reference)
Simple Sum

1

Gross Profit

160.5

-21.3

-11.8%

136.1

-0.2

-0.2%

296.6

2

Profit before Tax*1

83.2

-15.8

-16.0%

42.5

0.0

+0.1%

125.8

3

Net Income*2

55.3

-15.4

-21.8%

32.0

+1.3

+4.3%

87.3

4

Operating Assets

5,064.7-183.5-3.5%

3,247.3

+62.0

+1.9%

8,312.1

5

Total Assets

6,009.8-276.1-4.4%

3,811.0

+91.5

+2.5%

9,820.8*1 For HC, profit before tax under IFRS.
*2 For MUL, net income attributable to owners of the parent under J-GAAP.
For HC, net income attributable to owners of the parent under IFRS.

3

【MUL】 Actual Results Gross profit and incomes for FY3/2021 were down from FY3/2020 due to a decrease in aviation-related earnings and an increase in credit
costs, among other factors.
 The progress rate versus forecast (net income of 50.0 billion yen) was 110.7%, mainly due to credit costs falling short of estimate.
(a)

(b)

(c)

(d)

FY3/2020

FY3/2021

YOY
Change(e)

YOY
Change(%)

Exchange Rates
Effects-4.6(Billion Yen)
1 Revenues

923.7

894.3

-29.4

2

Gross Profit

181.9

160.5

-21.3

-1.3

-11.8%

3

Operating Income

91.8

62.4

-29.4

-0.5

-32.1%

4

Recurring Income

94.3

65.0

-29.3

-0.6

-31.1%

5

Net Income*１

70.7

55.3

-15.4

-0.4

-21.8%

1,538.6*5

1,003.2-535.4-16.5-34.8%¥25.00¥25.50+¥0.50$1=¥109.05$1=¥106.82

7

New Transactions
VolumeDividend per Share*2

8

USD Exchange Rate※

6

-3.2%

-

※ Exchange rate applied to profit and loss statement of overseas subsidiaries

9

Operating Assets

10

USD Exchange Rate※

5,248.3*6$1=¥109.56

5,064.7-183.5*7$1=¥103.50-3.5%*7-109.6-※ Exchange rate applied to balance sheet of overseas subsidiaries

11 ROE

9.2%

7.0%

-2.2P

-

12

ROA*3

1.2%

0.9%

-0.3P

-

13

OHR*4

45.1%

51.7%

+6.6P

-

*1
*2
*3
*4
*5

Net income attributable to owners of the parent
Dividend per share for full year (interim dividend FY3/2021 of 12.75 yen and year-end dividend FY3/2021 of 12.75 yen)
Net income attributable to owners of the parent on total assets
Calculated by dividing SG&A (excluding credit costs) by gross profit
Due to change of definitions of “New Transactions Volume”, changed from the figure in FY3/2020 results(from 1,881.7 billion yen→1,538.6 billion yen) (refer to page 34 for details)*6 Due to change of definitions of “Operating Assets”, changed from the figure in FY3/2020 results(from 5,228.4 billion yen→5,248.3 billions yen) (refer to page 34 for details)*7 Operating Assets is a change from the figures as of March 31, 2020

4

【MUL】Increase/Decrease in Net Income
Attributable to Owners of the Parent
Net Income▲15.4(Billion Yen)
(4)
+13.4

70.7

FY3/2020

▲21.3
(1)

Gross Profit

▲1.0
(2)

Operating Expenses

(5)
+0.4

+0.2
▲7.2
(3)

Credit Costs

Positive Factor

55.3

Non-operating
Income/Expenses*

Extraordinary
Income/LossTax Expenses

FY3/2021

Negative Factor(1) Gross Profit Declined YOY, due to a decline in aviation-related earnings and other factors, while real estate-related gains on sales
were up.

(2) Operating Expenses

 Increased YOY, due to expenses posted relating to the business integration with Hitachi Capital(5.0 billion yen, 4Q actual: 0.3 billion yen) , while operating expenses and others were down.

(3) Credit Costs

 Increased YOY, due to the posting of additional expenses on payment deferrals by some customers of aviation-related
business, and an increase in general credit costs based on FY3/2021 credit loss at a US sales finance company
ENGS, among other factors (please refer to page 29).

(4) Extraordinary
Income/Loss* Increased YOY, because of the sale of shares held for strategic purposes and earnings posted on the contribution ofasset holdings in real estate-related business to redevelopment project.

(5) Tax Expenses

 Tax expenses declined along with a decline in profits.

* Credit cost in non-operating income/expenses (bad-debts recovered etc.) excluded5【MUL】 Divisional Earnings / Assets
Increase/Decrease in Net Income (FY3/2021)

Factors Impacting Changes in Net Income (FY3/2021)(Billion Yen)

(Billion Yen)

+8.6

Net Income
▲15.4

+3.1

+0.8

+0.3

Increase/
Decrease

▲0.3

▲22.1

Decreased in lease revenues and sales
gains, increase in credit costs, other

Real Estate+3.1

Increased in profit thanks to promoting
asset turnover businesses, including
sale of logistics and residential assets

Logistics+0.8

Increased in profit thanks to an increasein marine containers lease revenues,
otherEnvironment& Energy+0.3

Increased in electricity sales revenues
thanks to accumulation of new assets,
despite reduction in the posting of sales
gains recorded in the previous fiscal
year

Healthcare

0.0

Remained unchanged from the previous
fiscal year

Infrastructure& Investment▲0.3

Adjustment▲6.1(Billion Yen)

1
FY3/2021

Divisional Net Income
Attributable to Owners of the Parent

Adjustment

Infrastructure& Investment

Healthcare

Environment& Energy

Logistics

Real Estate

Aviation

CustomerBusiness

55.3

FY3/2021

Negative Factor
CustomerBusiness

Aviation Business
Department,
JSA, ELF
Real Estate Business
Department, MULP, MURI,
MRI, DAF, Miyuki Building,
MURA, CPD, others
Logistics Business
Department, Mobility
Service Business
Department, BIL, MULR,
TKS, MAL, others

Aviation▲6.1

Positive Factor

Departments andsubsidiaries in Japan andoverseas responsible forcustomer business, others+8.6

Increased in profit because of sale ofshares held for strategic purposes andother factors, despite the impact of thedeconsolidation of an affiliate and anincrease in credit costs at ENGS

70.7

FY3/2020

Divisions andBusiness Involved

CustomerBusiness

0.0

▲22.1

Main Factor

Environment & Energy
Business Department, MEI,
Solar Energy SPC, others

Healthcare Business
Department, Japan Medical
Lease, HMP, others
Business
Increased in profit of business investees Infrastructure
Department, Investment
while one-time expense for project wasBusiness
Department,
JII,
postedinvested businesses, others
Posted expenses related to the businessintegration with HC and increased in
Head officefunding-related costs(Note) Please refer to P40 for details of subsidiaries

Aviation

Real Estate

Logistics

Environment &EnergyHealthcare

Infrastructure &Investment

Adjustment

Consolidated
Total

25.5

2.8

28.0

1.8

3.7

0.7

0.3

▲7.7

55.3

2

Divisional Assets*1

2,056.8

1,158.6

952.2

544.6

197.9

156.9

111.2

2.3

5,180.8

3

Divisional Net Income
Attributable to Owners of the Parent

16.8

24.9

24.9

0.9

3.3

0.6

0.6

▲1.6

70.7

Divisional Assets*1

2,304.8*2

1,101.7

976.1

521.4*2

184.3

152.2

95.0*2

2.5

5,338.3*2

FY3/2020

4*1 Operating assets plus equity method Investments*2 Changed from the figures in FY3/2020 results due to change in definition of “operating assets” (refer to page 34 for details)
Customer Business: 2,315.3 billion yen→2,304.8 billion yen, Logistics: 510.8 billion yen→521.4 billion yen,
Infrastructure & Investment: 75.1 billion yen→95.0 billion yen, Consolidated Total:5,318.4 billion yen→5,338.3 billion yen

6【HC】 Actual Results
 Profit before tax for FY3/2021 remained unchanged from FY3/2020 thanks to steady performances in key businesses such asenvironment/energy in the Japan business, despite the COVID-19 pandemic badly impacted the global business.
 The progress rate versus the initial forecast (profit before tax of 38.5 billion yen) was 110.6%. Profit attributable to owners of the parent
increased 4.3% YOY to 32.0 billion yen. The progress rate versus the forecast (27.5 billion yen) was 116.5%.
(a)

(b)

(c)

(d)

(e)

(f)

(g)

FY3/2020

FY3/2021

YOY
ChangeYOY
Change(%)

COVID-19
ImpactYOY Change(Excluding COVID-19
Impact)Initial Forecast
Comparison(Billion Yen)
1

Revenues

464.0

467.1

+3.1

+0.7%

-26.8

+6.5%

103.8%

2

Cost of Sales

327.7

331.0

+3.3

+1.0%

-14.2

+5.4%

105.4%

3

Gross Profit

136.3

136.1

-0.2

-0.2%

-12.5

+9.1%

100.1%

4

Selling, General and
Administrative Expenses

96.4

97.9

+1.5

+1.6%

-4.2

+6.0%

98.5%

5

Profit Before Tax

42.5

42.5

0.0

+0.1%

-8.2

+19.6%

110.6%

6

Net Income*1

30.6

32.0

+1.3

+4.3%

-6.3

+25.0%

116.5%

7

Volume of Business

2,186.4

1,788.6-397.8-18.2%-400.2+0.1%

101.9%¥138.24¥138.68-¥106.06¥/$¥108.73※ Exchange rate applied to profit and loss statement of overseas subsidiaries+10.3%

103.2%

8

Exchange Rate※

9

Operating Assets

10

Exchange Rate※¥/￡

3,185.3

3,247.3¥/￡¥133.32¥152.23

+62.0

+1.9%

-265.8-¥/$¥108.83¥110.71-※ Exchange rate applied to balance sheet of overseas subsidiaries
11

ROE

8.1%

8.0%

-0.1P

-

12

ROA*2

1.3%

1.3%

0.0P

-

13

OHR*3

61.9%

63.5%

+1.6P

-

*1 Net income attributable to owners of the parent*2 Profit before tax on operating assets*3 Calculated by dividing SG&A (excluding credit costs) by gross profit

7

【HC】 Increase/Decrease in Profit Before Tax(Billion Yen)

(1)
+11.3

Profit before Tax
0.0
▲3.0
▲8.2
(3)

(2)

42.5

FY3/2020

42.5

Business Expansion, etc.

Preparation Cost for
Business Integration

Positive Factor

COVID-19 Impact

FY3/2021

Negative Factor(1) Business Expansion,etc.

 Increased YOY, thanks to steady performances in key businesses, such as environment/energy andmobility, in the Japan business(2) Preparation Cost for
Business Integration

 Increased YOY, due to posting due diligence costs, such as finance and legal affairs, in relation to thebusiness integration with Mitsubishi UFJ Lease & Finance (3.2 billion yen, 4Q actual: 1.4 billion yen)

(3) COVID-19 Impact

 In the global business, volume of business declined mainly in Europe and credit costs increased due to the
response to moratoriums in the U.K. and ASEAN.

8

【HC】 Summary of Japan Business / Global Business

As for the Japan business, profit before tax increased thanks to steady performances in key businesses, such as environment/energy andmobility. The progress rate of profit before tax versus the initial forecast was 120.1%.



As for the global business, profit before tax declined due to the impact of COVID-19 pandemic on the European business.
The progress rate of profit before tax versus the initial forecast was 103.2%.
(a)

(b)

(c)

(d)

(e)

(f)

(g)

FY3/2020

FY3/2021

YOY
ChangeYOY
Change(%)

COVID-19
ImpactYOY Change(Excluding COVID-19
Impact)Initial Forecast
Comparison

Japan Business

62.4

62.5

+0.1

+0.2%

-3.8

+6.3%

101.0%

Global Business

72.8

72.8

0.0

-0.1%

-8.7

+11.9%

99.2%

Japan Business

26.5

31.6

+5.0

+19.0%-1.3+24.0%

120.1%

Global Business

24.4

21.6

-2.7

-11.4%-7.6+19.8%

103.2%

Japan Business

1,028.6

763.0-265.5-25.8%-125.2-13.6%

92.4%

Global Business

1,157.8

1,025.5-132.3-11.4%-275.0+12.3%

110.4%

Japan Business

1,669.8

1,594.5

-75.2

-4.5%

-57.1

-1.1%

97.0%

Global Business

1,515.4

1,652.7+137.3+9.1%-208.7+22.8%

109.9%

Japan Business

1.6%

1.9%

+0.3P

-

Global Business

1.5%

1.4%

-0.1P

-

Global Business

1.5%

1.4%

-0.1P

-

(Billion Yen)

1

2

3

4

5

6

Gross Profit*¹

Profit Before Tax*1

Volume of Business

Operating Assets

ROA*2

ROA*2
(Local Currency Basis)*1 Adjustments (corporate expenses, etc.) are not allocated to gross profit and profit before tax of the Japanese andGlobal businesses.
*2 Profit before tax on operating assets

9II. Forecast for FY3/202210

Basic Management Policy
Our Mission
Contribute to a prosperous and sustainable future by creating social value
through maximizing the potential of assets.

Our Vision▪ Solve social issues by developing unique and progressive businesses with consideration for
the global environment.
▪ Aim for sustainable growth through value co-creation with diverse stakeholders across theglobe.
▪ Enhance corporate value by evolving our business model through utilizing digital technology
and data.
▪ Foster "open, creative and engaging" corporate culture that shapes each and every
employee’s motivation and pride.
▪ Aim to be a trusted company by complying with laws and regulations, as well as implementing
ethical corporate management.

11

Progress of PMI Aim to maximize synergy effects from the three kinds of synergy effects, which are “synergy centering on the cost for optimization ofmanagement resources and others”, “sales synergy”, and “synergy utilizing capital capabilities generated by business integration (investment
synergy)”.
 Established a department which assumes company-wide PMI management, integrated promotion of synergy creation, etc.
Communication among employees is also promoted.
Areas
Management
Resources

Synergy Measures(As of the Time Business Integration as Announced)

Progress Optimization of management resources

 Completed the integration of corporate functions

 Integrated procurement capabilities

 Promote optimization of management resources and shared procurement
 Launch of working groups(Japan) Domestic sales, sales finance, sale of used goods, semiconductor, real estate,environment and energy, governmental agencies

Sales

 Top-line growth by utilizing each other’ssales network (Overseas) China region, Singapore, Thailand, Indonesia, mobility solutions, Americas,
Europe Identifying wide-ranging synergy measures (knowledge, positioning, resources,
diversification/multi-functionalization), not limited to contribution to revenues (increaseof the top-line, cost reduction)

 Utilizing capital capabilities anddiversification of both business andgeographical area portfolio upon thebusiness integration
Investment



Effectively conducting capitalmanagement while maintaining thecurrent credit ratings

Accumulating assets and investing inbusinesses by utilizing capital
capabilities

 Establishing frameworks to promote synergy creation with well-balanced offence(strategic resource allocation) and defense (risk management), by efficiently utilizing
capital capabilities
 Investment Strategy Committee (offense): Discussing strategies to maximize
investment synergy centering on investment in business entities as well as thepriority of key projects, from a company-wide perspective
 Risk Management Committee (defense): Managing risks in overall management
comprehensively and systematically. Discussing and reporting measures for risks ofeach category after identifying the current status and issues
 Investment Council Meeting: Discussing individual investment projects inconsideration of both “offence” and “defense”

12Forecast for FY3/2022
 The forecast for FY3/2022 takes into account the recovery of the businesses, of which net income declined in the previous fiscal year,
a decrease in credit costs related to aviation, and other factors, although expenses associated with the promotion of business activities and thedevelopment of organizational framework, etc. will increase. Net income attributable to owners of the parent in FY3/2022 is estimated to be 95.0
billion yen, up 7.6 billion yen YOY. The net income forecast for the current fiscal year would be 100.0 billion yen in case of excluding expenses
related to the business integration.
 We estimate a dividend per share of 26.00 yen, up 0.50 yen YOY (payout ratio: 39.3%), in consideration of the 22 consecutive years of dividend
increase in MUL as well as the dividend policies of the former companies.
 ROE in FY3/2022 is estimated to be 8.0%, up 0.7P YOY, by promoting businesses in the focus domains and the replacement of
low-profit assets.
 We anticipate an increase of expenses associated with the promotion of business activities mainly in overseas offices, expenses related to thebusiness integration as in the previous year, etc. However, OHR in FY3/2022 is estimated to be 55.9%, unchanged from the previous year,
through the optimization of management resources to reduce expenses.

(Billion Yen)

FY3/2021

FY3/2022*1*2

YOY
ChangeYOY
Change (%)

87.3*4

95.0

+7.6

+8.8%

1

Net Income Attributableto Owners of the Parent

2

Dividend per Share¥25.50*5¥26.00+¥0.50-3

Payout Ratio

41.1%*5

39.3%

-1.8P

-

4

ROE

7.3%*4

8.0%

+0.7P

-

5

OHR*3

55.9%*4

55.9%

0.0P

-

*1 Forecast as of May 17, 2021
*2 The assumed foreign exchange rates are $1=¥108, £1=¥150, €1=¥129*3 SG&A expenses divided by (gross profit + non-operating income/expenses),but SG&A expenses and non-operating income/expenses do not include credit costs*4 Calculated based on the results of MUL and HC in FY3/2021(The figures are for reference because MUL used J-GAAP and HC used IFRS)*5 MUL results in FY3/202113

【MUL/HC】 Transition of Major Figures
FY3/2019(Billion Yen)HC(IFRS)

FY3/2020

MUL(J-GAAP)

SimpleSum

HC(IFRS)

FY3/2022*1(Forecast)

FY3/2021

MUL(J-GAAP)

SimpleSum

HC(IFRS)MUL(J-GAAP)

SimpleSum

Plan(Consolidated)

YOY

1

Net Income*2

19.3

68.7

88.1

30.6

70.7

101.4

32.0

55.3

87.3

95.0

+7.6

2

ROE

5.1%

9.4%

8.0%

8.1%

9.2%

8.9%

8.0%

7.0%

7.3%

8.0%

+0.7P

3

OHR*3

57.6%

45.6%

51.2%

60.7%

44.7%

51.6%

61.5%

51.1%

55.9%

55.9%

0.0P

(Billion Yen)

95.7

86.0
32.0

+7.6 Billion Yen
+8.8%

101.4
88.1

87.3
30.6

19.3

32.0

32.9

95.0
53.1

FY3/2017

63.6

68.7

70.7

FY3/2018

FY3/2019

FY3/2020

55.3

Mitsubishi UFJ Lease (MUL)

FY3/2021

Hitachi Capital (HC)FY3/2022(Forecast)*1 The assumed foreign exchange rates for FY3/2022 are $1=¥108, £1=¥150, €1=¥129.
*2 For MUL, net income attributable to owners of the parent under J-GAAP
For HC, net income attributable to owners of the parent under IFRS
*3 SG&A expenses / (gross profit + non-operating income/expenses), but SG&A expenses and non-operating
income/expenses do not include credit costs

14Increase/Decrease in Net Income
Attributable to Owners of the Parent
(3)
+5.5

(2)
+4.1

(1)

(Billion Yen)

+21.1

(4)
+1.9

Net Income
+7.6
▲17.9

87.3

(5)

▲7.0
(6)

32.0*1

95.0
55.3

FY3/2021(Result)

Business Growth

Extraordinary
Income/Loss

MUL result

Credit Costs

HC result*1

Expenses Related
to the Business
Integration

OperatingExpenses*2

Positive factor

OthersFY3/2022(Forecast)

Negative factor(1) Business Growth YOY increase, mainly thanks to the recovery of the European business (HC) and customer business (MUL)(2) Extraordinary
Income/Loss

 Sale of shares held for strategic purposes aiming to replace the portfolios, etc.

(3) Credit Costs

 Decrease in credit costs related to aviation business, etc.

(4) Expenses Related to theBusiness Integration

 There will be expenses associated with the change of trade name and those related to systems (6.3 billion yen), but nodue diligence expenses and other costs, which were posted in the previous fiscal year (8.2 billion yen in total for thetwo companies)(5) Operating Expenses*2

 Increase in expenses associated with the promotion of business activities mainly in overseas offices, etc.

(6) Others Increase in tax-related expenses, etc.

*1 HC’s net income attributable to owners of the parent in FY3/2021 (under IFRS)*2 Excluding expenses related to the business integration

15

Dividend for FY3/2022
 We will return profits to shareholders by distributing dividends, in principle. In consideration of dividend increase for the
22 consecutive years at MUL and the dividend policy of the former companies (payout ratio of 30% level for MUL andaround 40% for HC), dividend per share is estimated to be 26.00 yen (payout ratio: 39.3%), up 0.50 yen YOY.

FY3/2022(Forecast)

FY3/2021
Mitsubishi UFJ Lease

Hitachi Capital

Mitsubishi HC Capital

1

Dividend per Share¥25.50¥94.00¥26.002

Payout Ratio

41.1%*1

34.3%*1

39.3%*2*1 MUL: net income attributable to owners of the parent in FY3/2021 is 55.3 billion yen
HC: net income attributable to owners of the parent in FY3/2021 is 32.0 billion yen*2 Net income attributable to owners of the parent in FY3/2022 is estimated to be 95.0 billion yen as of May 17, 2021.

16

Business Strategy for FY3/2022 (1) Business strategies based on current organization are as follows.
Business StrategyCustomer Business
Division

Aviation Business
Division

Boost earnings by selecting target industries to focus on in each region and enhancing initiatives based on asset value.
Capture growth in emerging economies by investing in VietinBank Leasing in Viet Nam, among other measures .
Promote the digital strategy through acceleration of “Digital Center” project at ENGS. Simultaneously aim for three goals: increase sales opportunities, enhanceusability for customers and vendors, and improve operational efficiency.

Maximize funds to be recovered and reduce credit costs in aircraft leases by enhancing sale-and-lease back transactions in new model aircraft for blue-chipcarriers and ensuring thorough credit management.
In aircraft engine leases, enhance our exit strategy by expanding the engine parts-out business in addition to boosting operating rates and accumulating newmodel engines.

Real Estate Business
Division

Logistics Business
Division

Renewable Energy
Business Division







Healthcare Business
Division
Infrastructure &Investment Business
Division

Accelerate the creation of collaborative businesses with blue-chip partners by providing functions in line with value chain shifts by sector.
Maintain and expand a stable earnings base by establishing new sales models by maximizing the benefits of Web tools, increasing contact points withcustomers and thoroughly implementing solution-oriented sales styles supported by the Group strength.
Optimize our portfolio by enhancing effective acquisition of high ROA assets and gradually gearing down less profitable assets.

In Japan, accelerate business development with an eye on the post COVID-19 environment by promoting “deepening logistics business,” “strengthening CRE
solution business”, and “enhancing hotel management functions,” etc.
Overseas, strengthen the business management structure mainly in the US, strengthen approach to existing debt, expand the limit of investment and credit
extension, expand local AM pipeline, etc.
For marine containers, aim to improve earnings by enhancing the resale platform by establishing high-quality portfolio by well-defined investments while closely
watching changing market conditions.
For railcars, shift gradually to an asset turnover model, while working to stabilize earnings by enhancing the portfolio operating rate.
For mobility, focus on maintaining and expanding the existing auto lease business, starting new projects, and widening cooperative business initiatives with top
global players in the ASEAN region.
In solar energy, expand large-scale assets and promote engagement in more medium-scale assets. Expand functionality and portfolio realignment via a partner
strategy, while aiming for full-scale engagement in solar rooftop PPA* in Japan and Thailand.
Work to expand pipeline in other renewable-energy assets besides solar power(onshore wind and offshore wind) with existing partners and new channels.
In the healthcare fund business, expand earnings by capturing customer needs to consolidate hospital functions, realign hospital beds and revitalize hospitalmanagement, as well as by starting next-stage funds.
Seek business opportunities in digital field, promote recovery strategies in our focal domains and expand businesses in emerging market by accelerating
cooperative ventures.
For overseas infrastructure, accumulate transactions by promoting collaboration with leading partners and develop business participation platforms with theinitiative of local office (in Europe, etc).
Strengthen collaboration with partners in company investments. Strengthen presence and project structure in bilateral origination deals and large-scale projects.

* Power Purchase Agreement

17

Business Strategy for FY3/2022 (2)Business Strategy
 Promote earnings expansion by new business creation through integrating sales practices and knowledge from each region.
Business & Strategic
Planning Division Aim to earn service revenue in addition to financial revenue, by participating in the process of creating service business models at the HitachiGroup companies, etc. and establishing new business models by collaborating.
 Aim to gain cumulative recurring revenues by focusing on trust, asset recovery, settlement services, and trading in second-hand assets, etc.
 Strengthen the Hitachi business through the promotion of partnerships with Hitachi Group companies, collaborative tie-ups, etc..

Hitachi Group
Business Division Promote an approach that secures strong earnings, by maximizing internal company resources to design a transformation into proposal-based
sales.
 Transform business platform and service business model by capturing demands for cloud-based operation and remote working.
 Maintain earnings base by securing high-quality assets and enhance management practices by improving business processes through DX andlow-cost operations.

Corporate
Business Division Enhance client base by promoting conversion of accounts into partners, collaborating with Hitachi Group, and strengthening businessapproach in focal domains.
 Promote new businesses, by capturing earnings in IoT lease services, building service models utilizing partner solutions, etc.
 Enhance business volume and quality by expanding the trading field in key accounts in the real-estate business, expanding asset turnoverbusiness, and improving the quality of operating asset portfolio.

LIFE
Business Division Re-develop a client base in the fields of logistics, commerce, and medical care targeting social capital related to the industrial base and life
style. Implement business activities that incorporate current and future issues in those industries.
 Strengthen collaboration with partners and promote new business development.
 Promote aggressive development of wind power business through collaboration with partners.

Environment &EnergyBusiness Division Promote regional energy businesses that contribute to creation of local communities by collaboration with local municipalities and companies.
 Consider expanding the business scope with an eye on future markets (electric power retailing, aggregation business, etc.) and develop new
businesses by using next-generation technologies (storage batteries, hydrogen, etc.).
 Establish stable earnings base via low-cost, high-quality operations.

Vendor Solutions
Business Division Improve profitability by enhancing the quality and quantity by narrowing down existing vendors, and by locking in vendors through offering
original functions.
 Promote the development of new type of solution-based services.

18

Business Strategy for FY3/2022 (3)Business Strategy

Mobility Solutions
Business Division In the Japan business, aim to focus on earnings expansion by providing value to the Hitachi Group via Hitachi Capital Auto Lease,collaborating with partners in the field of logistics and rebuilding private car leasing business, etc. Promote new business development andsolutions in response to the transformational period that CASE brings.
 In the European business , promote expansion of customer base and earnings by offering a service that combines mobility solutions with auto
lease.
 Accelerate sustainable growth by maintaining and improving customer service, employee engagement and legal compliance and by
developing digital programs, etc.

Europe Develop EV-related businesses with partners, such as Hitachi. Maintain and expand construction of EVaaS (EV as a service).

 Expand the services we offer and our coverage regions in the continental European business.

 Strengthen core business by enhancing efficiency of operations through DX, improving competitiveness and profitability, and promoting
ongoing improvement through use of metrics, etc.
Americas Develop new businesses with operations and investments emphasizing SDGs, such as clean energy, mobility, and healthcare.
 Increase collaboration with MUL (USA) for speedy realization of merger benefits.

 Further expand the business model that focuses on partner strategy and local-based business.
China Build a new growth strategy by selection and concentration in businesses and finance plus something extra.
 Execute investments in line with business strategies. Strengthen investment management (including exit and reinvestment) withconsciousness of investment capacity.
 Focus on selecting and developing new businesses where demand is expected to grow against the COVID-19 landscape. In existing
businesses, strengthen relationships with sales finance vendors and partners.

ASEAN Region

 Expand businesses in the environment and energy domain including the solar power business, and in the mobility domain including car sharing,and develop them into new regions.

 Conduct appropriate management and collection of rescheduled debt against the COVID-19 landscape.

19

Major Projects for Decarbonized Society
Ireland Wind power business (2 projects)

Germany
 Submarine powertransmission businessfor offshore wind
power plants

Japan

U.S.

 Solar and wind power generation business(Output in operation*1: 767MW)
 Solar PPA*2 business, VPP*3 trial
 Solar and wind power generation business(Output in operation*1: 392MW)
 Biogas power generation business(Aomori Prefecture) Decentralized solar
power generation
project

UK Offshore wind farm project offshore power transmission
business EV charging station business

China (Hong Kong Special Administrative Region)
 Environmental recycling business
Thailand

Total

Solar PowerWind Power

813MW

771MW

42MW

HC

392MW

136MW

256MW

 Initiatives by HC

 Wind power generation business

Output in Projects in Operation*1 within and Outside Japan (MW)MUL

 Initiatives by MUL

Vietnam Solar PPA*2 business Solar PPA*2 business

Major Projects
Release

Total

1.2GW

907MW

298MW

Project Overview

April

2017

Participation in a submarine power transmission business for offshore wind power plants in Germany

May

2018

Establishment of MUL Utility Innovation and participation in a solar PPA*2 business and a VPP*3 trial.

November 2018

Participation in an offshore wind power farm project in the UK

February

Start of the operation of a solar power generation plant (Okayama Prefecture) which uses a green bond2020

November 2020

Participation in a wind power business in Ireland

December 2020

Start of collaboration to drive solar power generation business in Thailand with Hitachi Asia (Thailand) and SANTEC POWER
SOLUTIONSJanuary2021

Investment in GRIDSERVE Holdings which engages in renewable energy business in the UK(Scheduled to open 100 or more EV charging stations in the UK by 2025)

February2021

Investment in Bloom Profit Investment which engages in environmental recycling business (glass bottles recycling) in the Hong
Kong Special Administrative Region

March

2021

Participation in an offshore power transmission business in the UK

May

2021

Participation in a wind power generation business in Vietnam*1 Pro-rata figures based on the equity ownership*2 Power Purchase Agreement*3 Virtual Power Plant

20

III. Appendix

21

Macro-economic Environment as the Assumption of Forecast

Macro-economic environment as the assumptions of forecast

The outlook remains unclear because of the occurrence and expansion of COVID-19 variants, etc.
Meanwhile, the global economy in 2021 is expected to recover in from the economic downturn in the previous year thanks inpart to ongoing large-scale monetary easing and fiscal policies in various countries, and lifting of activity restrictions thanks
to the progress of vaccination.

However, depending on the pace of vaccine administration and the scale of support provided by economic policies, thetiming and degree of economic recovery are expected to vary among countries and regions. The recovery in major countries
and regions is forecasted as below.
- JapanEconomic activities are expected to gradually normalize thanks to economic measures and vaccine administration.
However, real GDP is anticipated to recover to the fiscal 2019 level in 2022 or later.
- US
The current economy is on a recovery trend thanks to easing of the restrictions on economic activities and movement
based on accelerated vaccine administration. Also with the support of fiscal and monetary policies, real GDP is expected
to recover to the level of 2019 during 2021.
- UK
The moderate recovery will be maintained in 2021 thanks to vaccine administration and ongoing fiscal and monetary
policies.
- China
As economic activities have resumed thanks to curbing the spread of COVID-19, real GDP is expected to grow at a highrate of over 8% YOY.
- ASEANThe number of COVID-19 cases has remained high in some countries and regions, therefore recovery to the level of2019 will be seen in 2022 or later.

22【MUL】 Customer Business
Breakdown of Divisional Assets (Billion Yen)

Major Figures (Billion Yen)

FY3/2020

FY3/2021

YOY

Divisional Earnings

86.6*1

78.8-7.7

Divisional Net Income
Attributable to Ownersof the Parent

16.8

25.5

+8.6

New Transactions Volume

812.0

587.2

-224.82,304.8

2,056.8-248.0*2

Divisional Assets*1 Changed from the figures in FY3/2020 results due to the transfer of consolidated subsidiary
TKS from the Customer Business to the Logistics： from 88.1 billion yen to 86.6 billion yen(refer to page 34 for details)*2 Divisional Assets is change from the figures as of March 31, 2020

Change from
FY3/2020

FY3/2020

FY3/2021

2,304.8

2,056.8-248.0

Domestic

1,862.5

1,671.2-191.2

Overseas

442.3

385.6

-56.7

North America

199.1

191.1

-8.0

ASEAN

134.0

107.8

-26.2

China Region

102.1

73.8

-28.2

6.9

12.7

+5.7

Total

OthersDivisional Assets of Customer Business by Region (FY3/2021)

Overseas
18.7%

China Region Others
0.6%
ASEAN 3.6%
5.2%

North America
9.3%[Definition]
Divisional Earnings：
Gross profit (prior to allocation of financial expenses) plus equity-method
earnings and dividend income of each division.

Divisional Assets:
Operating assets plus equity-method investments.
A portion of assets which generate Divisional Earnings is not included (e.g.
shares held for strategic purposes and small-lot equity investments.)

Total
2,056.8
Billion Yen

Domestic
81.3%

Domestic
81.3%

23

【MUL】 Aviation
JSA’s Aircraft Ownership Breakdown (FY3/2021)

Major Figures (Billion Yen)

FY3/2020

FY3/2021

YOY

Divisional Earnings

74.9

56.4

-18.4

Divisional Net Income
Attributable to Ownersof the Parent

24.9

2.8

-22.1

New Transactions Volume

212.3

106.0

-106.2

1,101.7

1,158.6+56.8*1

Divisional Assets

1. By Asset Type

2. By Region
Middle East andOthers
6.4%

Others11.2%

Europe
22.5%

Total
179
AircraftAmericasTotal 35.8%
179
Aircraft*1 Divisional Assets is change from the figures as of March 31, 2020

Narrow Body*4
88.8%

Breakdown of Divisional Assets (Billion Yen)
FY3/2020

FY3/2021

Change from
FY3/2020

1,101.7

1,158.6+56.8

Aircraft Lease (JSA)

841.6

834.9

-6.6

Engine Lease (ELF)

253.3

242.2

-11.0

Aircraft Lease (MUL)

6.7

81.4

+74.6

FY3/2020

FY3/2021

Change from
FY3/2020

Total

Asia/Oseania
35.3%*4 Aircraft used for domestic lines and short-distance flights(A320 series of Airbus, B737 series of Boeing, etc.)

ELF’s Regional Breakdown of Engine Ownership (FY3/2021)
Middle Eastand Others
11.5%

Owned Aviation-related Assets

Number of Aircraft*2 (JSA)
Number of Aircraft
Purchased*
Number of Aircraft
Sold*3
Number of Aircraft
Engines (ELF)

168

179

+11

24

12

-12

14

1

-13

309

311

+2

Americas

Europe26.2%

Total 32.0%
311
Engines
Asia/Oseania
30.3%*2 Starting from FY3/2021 2Q results, aircraft owned by MUL parent excluded:
FY3/2020 170 aircraft→168 aircraft*3 After consolidated adjustment(do not match with sales profits/losses for aircraft numbers recognized on the P/L)24

【MUL】 Real Estate[Reference] Amount of equity contribution for real estate financing*2*3(Billion Yen)

Major Figures (Billion Yen)
FY3/2020

FY3/2021

YOY

Divisional Earnings

47.1

52.1

+4.9

Divisional Net Income
Attributable to Ownersof the Parent

24.9

28.0

+3.1

New Transactions Volume

304.8

146.4

-158.4

Divisional Assets

976.1

952.2

-23.9*1

Change from
FY3/2020

FY3/2020

FY3/2021

99.2

111.4

+12.1

Domestic Securitization

32.3

37.2

+4.9

Real Estate
Revitalization
Investment

66.9

74.1

+7.2

Total

*1 Divisional Assets is change from the figures as of March 31, 2020.

Breakdown of Divisional Assets (Billion Yen)
FY3/2020

FY3/2021

Change from
FY3/2020

976.1

952.2

-23.9

Real estate leasing

268.4

254.9

-13.4

Other real estate
Finance

255.4

245.2

-10.1

Securitization(Debt)

119.7

122.7

+3.0

Domestic

108.1

103.1

-4.9

Overseas

11.5

19.5

+7.9

54.5

64.8

+10.2

Domestic

40.7

48.0

+7.2

Overseas

13.8

16.7

+2.9

107.6

89.7

-17.8

170.3

174.6

+4.2

Total

Securitization(Equity)

Real estate rental
business
Real estate
revitalization
investment[Reference] Ratio of amount of equity contribution for real estate financing*2*3(Billion Yen)
2. By Region

1. By Asset Type

OthersResidence 0.8%
3.3%
Logistics
19.6%

Commercial
Facility
20.7%

Office
29.6%

Total
111.4
Billion Yen

Hotel
26.0%

NagoyaMetroporitan
District
7.7%

Others11.4%

Tokyo
Metroporitan
District
49.0%
Total

111.4
Billion Yen

Osaka
Metroporitan
District
31.9%*2 Management accounting value (total equity contribution value in domestic securitization financing andreal estate revitalization investments) does not match equity among divisional assets as someinvestments were turned into consolidated subsidiaries with investments and capital being offset andeliminated in financial accounting processes.
*3 Divisional assets corresponding to domestic securitization finance amounted to 40.7 billion yen for
FY3/2020 and 48.0 billion yen for FY3/2021 while those corresponding to real estate revitalization
investments came to 170.3 billion yen for FY3/2020 and 174.6 billion yen for FY3/2021.

25

【MUL】 Logistics【MUL】 Environment & Energy

Major Figures (Billion Yen)

Major Figures (Billion Yen)
FY3/2020

FY3/2021YOY

19.1*1

20.6+1.5

Divisional Earnings
Divisional Net Income
Attributable to Ownersof the Parent

FY3/2020

FY3/2021

YOY

Divisional Earnings

11.1

10.9

-0.2

3.3

3.7

+0.3

0.9

1.8

+0.8

Divisional Net Income
Attributable to Ownersof the Parent

New Transactions Volume

116.0

75.1

-40.8

New Transactions Volume

37.4

33.1

-4.2

Divisional Assets

521.4

544.6

+23.2*2

Divisional Assets

184.3

197.9

+13.6*2

FY3/2020

FY3/2021

Change from
FY3/2020

184.3

197.9

+13.6

Debt

59.8

52.2

-7.6

Equity

30.1

26.3

-3.7

Power Generation
Business Assets

82.9

103.4

+20.5

Others*6

11.3

15.8

+4.4

*1 Changed from the figures in FY3/2020 results due to the transfer of consolidated subsidiary
TKS from the Customer Business to the Logistics： from 17.6 billion yen to 19.1 billion yen(refer to page 34 for details)*2 Divisional Assets is change from the figures as of March 31, 2020

Breakdown of Divisional Assets*5 (Billion Yen)

Breakdown of Divisional Assets (Billion Yen)
FY3/2020

FY3/2021

Change from
FY3/2020

521.4

544.6

+23.2

Marine Containers

219.2

223.5

+4.3

Railway Freight Cars

170.7

195.7

+25.0

Shipping and Others

131.5

125.3

-6.1

Total

Owned Logistics-related Assets*3

Marine Container Fleet(TEU 1,000) *4
Number ofRailway Freight Cars

December 31,
2019

December 31,
2020

Change from
December 31,
2019

1,368

1,515

+146

16,544

20,554+4,010Total*5 Solar power-related leases were recorded in customers business*6 Includes equity-method investments*3 Numbers based on management account*4 TEU: Twenty Feet Equivalent Unit(converted into 20ft. containers)

26

【MUL】 Healthcare【MUL】 Infrastructure & Investment

Major Figures (Billion Yen)

Major Figures (Billion Yen)

Divisional Earnings

FY3/2020

FY3/2021

YOY

5.0

5.3

+0.3

FY3/2020

FY3/2021

YOY

Divisional Earnings

3.5

4.1

+0.5

0.6

0.3

-0.3

Divisional Net Income
Attributable to Ownersof the Parent

0.6

0.7

0.0

Divisional Net Income
Attributable to Ownersof the Parent

New Transactions Volume

40.8

39.5

-1.2

New Transactions Volume

14.9

15.5

+0.5

Divisional Assets

152.2

156.9

+4.6*1Divisional Assets

95.0

111.2

+16.2

*1 Divisional assets is change from the figures as of March 31, 2020

Breakdown of Divisional Assets*2 (Billion Yen)

Total
Leases and installment
sales
Factoring
Healthcare-related
Loans andinvestments

Performance of Overseas Infrastructure Projects

FY3/2020

FY3/2021

Change from
FY3/2020

152.2

156.9

+4.6

106.9

106.3

-0.5

24.8

27.7

+2.9

Booking
Party

Submarine Power Transmission Business inGermanyWind Power Business in Ireland (1)Water Supply Business in the UK
Offshore Wind Farm Project in the UK

MUL
20.4

22.7

+2.3

*2 Assets sales to medical institutions and care homes recorded in the
Customer Business are excluded.

(Reference) Healthcare-related assets under management*3 (Billion yen)

Assets under management(AUM)

FY3/2020

FY3/2021

20.3

27.1

Change from
FY3/2020+6.7

Project Overview

JII

Power Distribution Project in the UK
Distributed Solar Power Generation Project in
the USWind Power Business in Ireland (2)Offshore Power Transmission Business in theUK
Rail Infrastructure Initiative in the UK
Optical Submarine Cable Initiative
Railway Freight Car Maintenance and Lease
Initiative in the UK
Passenger Railcar lease and MaintenanceInitiative in the UK
Toll Highway Operating Company in India
Optical Submarine Cable Initiative

Remarks

In operation
In operation
Investment completed
Scheduled to start
operating in 2022
Investment completed
In operation
In operation
In operation
In operation
In operation
In operation
Scheduled to start
operating in 2022
Investment committed
Completion planned for2H 2022*3 Management accounting values

27

【MUL】 Details of New Transactions Volume by Division(Billion Yen)

FY3/2020

FY3/2021

YOY Change

YOY Change (%)

1

Customer Business

812.0

587.2

-224.8-27.7%

2

Aviation

212.3

106.0

-106.2-50.0%

3

Real Estate

304.8

146.4

-158.4-52.0%

4

Logistics

116.0

75.1

-40.8

-35.2%

5

Environment & Energy

37.4

33.1

-4.2

-11.3%

6

Healthcare

40.8

39.5

-1.2

-3.1%

7

Infrastructure & Investment

14.9

15.5

+0.5

+4.0%

8

Volume of All New
Transactions

1,538.6

1,003.2-535.4-34.8%

28

【MUL】 Credit Cost
MUL/Subsidiaries(Billion Yen)

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

YOY
Change

1

MUL

-2.9

-0.0

-1.8

2.2

-0.6

-2.8

2

Domestic Subsidiaries

0.4

1.5

0.9

0.6

0.6

0.0

3

Overseas Subsidiaries

2.1

0.9

2.1

4.2

14.3

+10.1

4

Total Net Credit Cost

-0.4

2.4

1.1

7.1

14.3

+7.2

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

YOY
ChangeBy Sector(Billion Yen)
5

Real Estate Sector

-0.6

0.7

-1.2

-0.0

-0.1

-0.1

6

Manufacturing Sector

-0.1

0.4

1.3

1.2

0.4

-0.8

7

Transportation Sector

1.6

0.7

-1.0

0.9

8.4

+7.5

8

Others*

-1.3

0.6

2.0

4.9

5.6

+0.7

9

Total Net Credit Cost

-0.4

2.4

1.1

7.1

14.3

+7.2

* Includes general credit costs calculated based on the historical rate of credit loss and ENGS credit costs29

【MUL】 Funding Structure(Billion Yen)

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

Change from
FY3/2020 (%)

1

Borrowing

2,395.1

2,444.7

2,492.0

2,863.2

2,870.3

+0.2%

2

Yen

1,449.4

1,470.6

1,352.2

1,425.5

1,476.6+3.6%3

Foreign Currency

945.7

974.1

1,139.8

1,437.6

1,393.7-3.1%

4

CP (Commercial Paper)

835.9

807.4

742.2

762.1

434.1

-43.0%

5

Securitization

137.4

165.8

145.8

135.7

106.2

-21.8%

6

Corporate Bonds

773.5

833.7

1,060.3

1,169.5

1,224.2

+4.7%

7

Yen

452.0

496.0

583.5

763.3

756.2

-0.9%

8

Foreign Currency

321.5

337.7

476.8

406.2

467.9

+15.2%

9Total Funding

4,142.0

4,251.7

4,440.3

4,930.6

4,634.9-6.0%

10Foreign Currency
Funding Ratio*

30.6%

30.9%

37.0%

37.4%

40.2%

+2.8P

* Foreign-currency loans and Corporate Bonds as a proportion of total funding30

【MUL】 Financial Performance: Profit & Loss Statement(Million Yen)
1

Revenues

2

Cost of Revenues

3

Financial Expenses

4

Gross Profit

5

SG&A Expenses

6

Personnel Expenses

7

Non-personnel Expenses

8

Allowance

9

Operating Income

10

Recurring Income

11

Extraordinary Income

12

Extraordinary Loss13

Net Income Attributable to
Owners of the Parent

FY3/2017
16/4～17/3

FY3/2018
17/4～18/3

FY3/2019
18/4～19/3

FY3/2020
19/4～20/3

FY3/2021
20/4～21/3

838,886+1.6%
688,655+4.4%
35,703-8.4%
150,231-9.5%
71,119-8.5%
33,790+4.8%
33,461-4.1%
3,867-63.6%
79,112-10.4%
84,731-8.6%
4,257+541.6%2,517-22.2%
53,157-2.7%

869,948+3.7%
713,779+3.6%
43,722+22.5%
156,169+4.0%
76,883+8.1%
36,453+7.9%
35,482+6.0%
4,946+27.9%
79,285+0.2%
86,177+1.7%
2,926-31.3%
836-66.8%
63,679+19.8%

864,224-0.7%
705,904-1.1%
49,494+13.2%
158,320+1.4%
77,949+1.4%
36,899+1.2%
37,689+6.2%
3,360-32.1%
80,371+1.4%
87,605+1.7%
7,086+142.1%1,136+35.8%
68,796+8.0%

923,768+6.9%
741,804+5.1%
59,865+21.0%
181,964+14.9%
90,110+15.6%
40,601+10.0%
41,465+10.0%
8,043+139.4%91,853+14.3%
94,376+7.7%
5,030-29.0%
308-72.8%
70,754+2.8%

894,342-3.2%
733,761-1.1%
62,418+4.3%
160,581-11.8%
98,166+8.9%
40,473-0.3%
42,598+2.7%
15,095+87.7%
62,414-32.1%
65,002-31.1%
18,457+266.9%242-21.6%
55,330-21.8%(Note) The bottom percentage show year-on-year percentage change31【MUL】 Financial Performance: Balance Sheet(Million Yen)
1

2

3

4

5

6

7

8

9

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

102,011

165,100

195,831466,228

294,241-14.9%+61.8%+18.6%+138.1%-36.9%

686,378

731,124

778,582

798,820821,233

+6.9%

+6.5%

+6.5%

+2.6%

+2.8%

5,388,844

5,552,712

5,790,929

6,285,966

6,009,831

+5.2%

+3.0%

+4.3%

+8.5%

-4.4%

-

-

5,142,614

5,338,325

5,180,874

-

-

-

+3.8%

-2.9%

4,876,553

4,910,705

5,060,114

5,248,363

5,064,796

+5.4%

+0.7%

+3.0%

+3.7%

-3.5%

-

-

82,50089,962116,078

-

-

-

+9.0%

+29.0%

34,14434,892

27,286

24,69339,269+22.3%+2.2%-21.8%-9.5%+59.0%

16,365

15,658

15,103

13,831

22,501

+0.4%

-4.3%

-3.5%

-8.4%

+62.7%

17,77919,234

12,183

10,862

16,767+53.0%+8.2%-36.7%-10.8%+54.4%Cash and Cash Equivalents

Total Equity

Total Assets

Divisional Assets

Operating Assets*

Equity-Method Investments

Impaired Assets

Allowance

Net Balance of
Impaired Assets(Note) The bottom percentage show year-on-year percentage change* Change in definition of “operating assets” from FY3/2021 (refer to page 34 for details)32【MUL】 Financial Performance: Balance Sheet (Cont’d)(Million Yen)

10

11

12

13

14

15

16

17

18

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

12.2%

12.7%

13.0%

12.4%

13.4%

+0.2P

+0.5P

+0.3P

-0.6P

+1.0P

8.4%

9.3%

9.4%

9.2%

7.0%

-0.6P

+0.9P

+0.1P

-0.2P

-2.2P

1.0%

1.2%

1.2%

1.2%

0.9%

-0.1P

+0.2P

+0.0P

-0.0P

-0.3P

4,142,073

4,251,769

4,440,352

4,930,692

4,634,956

+6.0%

+2.6%

+4.4%

+11.0%-6.0%

2,395,158

2,444,766

2,492,008

2,863,257

2,870,347+10.4%

+2.1%

+1.9%

+14.9%+0.2%

1,746,914

1,807,002

1,948,344

2,067,434

1,764,608

+0.4%

+3.4%

+7.8%

+6.1%

-14.6%

835,900

807,400

742,200

762,100

434,171

-2.1%

-3.4%

-8.1%

+2.7%

-43.0%

137,484

165,897

145,842

135,781106,230-18.6%+20.7%-12.1%-6.9%-21.8%

773,530

833,705

1,060,302

1,169,553

1,224,206

+7.9%

+7.8%

+27.2%+10.3%+4.7%

Equity Ratio

ROE

ROA*

Total Funding

Indirect Funding

Direct FundingCP

Securitization

Corporate Bonds(Note) The bottom percentage figures with P (point) show year-on-year percentage change* Net income attributable to owners of the parent on total assets33

【MUL】 Impact of Definitional Changes on Results from FY3/2021
 As we announced in our “FY3/2021 1st Quarter Results”, “FY3/2021 2nd Quarter Results” and “FY3/2021 3rd Quarter Results”, in order tomore accurately portray the actual state of our business, we have made the following definitional changes from FY3/2021.
Items Changed
Divisional Earnings

Details of Definitional Changes
 From FY3/2021, the Indonesian automotive lease subsidiary, PT. Takari Kokoh Sejahtera (TKS) business domain was transferred from
Customer Business to the Logistics, and retroactive adjustments were made for past fiscal years.
 From FY3/2021, the following two items changed and retroactive adjustments were made for past fiscal years.

New Transactions
Volume(1) Factoring, which consists largely of short-term transaction, was excluded from new transactions volume.
(2) A portion of equity investments, which were not included in new transactions volume, was added to new transactions volume.

 From FY3/2021, the following two items changed and retroactive adjustments were made for past fiscal years.
Operating Assets(1) A portion of equity investments, which were not included in the operating assets, was added to operating assets.
(2) Same as the definitional change of Divisional Earnings above, “TKS” was transferred from Customer Business to the Logistics.

Revision Impact in FY3/2020
FY3/2020
Before Adjustment(Billion Yen)
Total
Divisional Earnings*1

Customer Business

Logistics
Total
New Transactions
VolumeCustomer Business
Healthcare
Infrastructure & Investment
Total

Divisional Assets*2

Customer Business
Logistics
Infrastructure & Investment

247.9
88.1
17.6
1,881.7
1,074.7
128.8
7.3
5,318.4
2,315.3
510.8
75.1

ImpactAfter Adjustment

247.9
86.6
19.1
1,538.6
812.0
40.8
14.9
5,338.3
2,304.8
521.4
95.0

-1.4
+1.4
-343.0-262.6
-87.9
+7.6
+19.9
-10.5
+10.5
+19.9

*1 Gross profit (prior to allocation of financial expenses) plus equity-method earnings and dividend income of each division.
*2 Operating assets plus equity-method investments.

34

【HC】Breakdown of Japan BusinessJapan Business (Account Solution)
FY3/2020

FY3/2021(Billion Yen)

YOY
ChangeYOY
Change(%)

COVID-19
ImpactYOY Change(Excluding COVID-19
Impact)Initial Forecast
Comparison

Gross Profit

36.9

38.3

+1.3

+3.7%

-2.2

+9.7%

102.6%

Profit Before Tax

20.1

24.1

+3.9

+19.4%-1.0+24.5%

122.1%

Volume of Business

828.3

593.4

-234.8-28.4%-96.7-16.7%

90.6%

Operating Assets

1,155.8

1,104.0

-51.8

-4.5%

-35.7

-1.4%

95.3%

1.8%

2.1%

+0.3P

YOY Change

Initial Forecast
Comparison

ROA*

-

Japan Business (Vendor Solution)
FY3/2020

FY3/2021(Billion Yen)

YOY
ChangeYOY
Change(%)

COVID-19
Impact(Excluding COVID-19
Impact)Gross Profit

16.4

15.8

-0.6

-4.0%

-1.3

+4.4%

96.2%

Profit Before Tax

5.4

6.7

+1.3

+24.7%-0.3+30.2%

105.7%

Volume of Business

191.7

161.7

-29.9

-15.6%

-28.0

-1.0%

99.8%

Operating Assets

444.4

433.4

-10.9

-2.5%

-21.3

+2.3%

100.3%

ROA*

1.2%

1.5%

+0.3P

-

* Profit before tax on operating assets35【HC】 Breakdown of Global Business (1): Europe, The Americas
Europe (the UK, Poland, the Netherland, Germany, Austria, Belgium, Czech, Slovakia, Hungary, Finland)
FY3/2020

FY3/2021(Billion Yen)

YOY
ChangeYOY
Change(%)

COVID-19
ImpactYOY Change(Excluding COVID-19
Impact)Initial Forecast
Comparison

Gross Profit

45.9

45.4

-0.5

-1.2%

-5.5

+10.8%

99.6%

Profit Before Tax

18.5

15.1

-3.3

-18.1%

-4.3

+5.2%

105.3%

Volume of Business

651.4

538.4

-112.9-17.3%-109.2-0.6%

116.9%

Operating Assets

874.7

1,000.4+125.6+14.4%-105.8+26.5%

116.0%

ROA*(Local Currency Basis)

2.1%

1.7%

-0.5P

-

YOY Change

Initial Forecast
Comparison

The Americas (US, Canada)
FY3/2020

FY3/2021(Billion Yen)

YOY
ChangeYOY
Change(%)

COVID-19
Impact(Excluding COVID-19
Impact)Gross Profit

15.4

16.2

+0.7

+4.6%

-1.4

+14.2%

98.5%

Profit Before Tax

3.2

4.2

+1.0

+31.7%-1.0+65.2%

123.6%

Volume of Business

332.5

332.9

+0.3

+0.1%

-90.0

+27.2%

114.1%

Operating Assets

312.4

364.3

+51.8

+16.6%-59.7+35.7%

105.4%

ROA*(Local Currency Basis)

0.9%

1.3%

+0.4P

-

* Profit before tax on operating assets36

【HC】 Breakdown of Global Business (2): China, ASEAN
China (Mainland China, Hong Kong Special Administrative Region)
FY3/2020

FY3/2021(Billion Yen)

YOY
ChangeYOY
Change(%)

COVID-19
ImpactYOY Change(Excluding COVID-19
Impact)Initial Forecast
Comparison

Gross Profit

4.8

5.2

+0.3

+8.3%

-0.5

+19.4%

111.7%

Profit Before Tax

1.9

1.8

-0.1

-6.0%

-0.3

+11.8%

105.4%

Volume of Business

86.1

91.4

+5.3

+6.2%

-36.1

+48.1%

86.8%

-21.6

-6.1%

102.0%YOY Change

Initial Forecast
Comparison..

Operating Assets

200.5

166.6

-33.9

-16.9%

ROA*(Local Currency Basis)

0.8%

1.0%

+0.3P

-

ASEAN (Singapore, Thailand, Malaysia, Indonesia)
FY3/2020

FY3/2021(Billion Yen)

YOY
ChangeYOY
Change(%)

COVID-19
Impact(Excluding COVID-19
Impact)Gross Profit

6.6

5.9

-0.6

-9.4%

-1.1

+8.6%

89.0%

Profit Before Tax

0.7

0.3

-0.3

-46.1%-1.8+219.5%

27.5%

Volume of Business

87.7

62.6

-25.0

-28.6%-39.6+16.6%

87.4%

Operating Assets

127.6

121.3

-6.3

-5.0%

-21.5

+11.9%

91.4%

ROA*(Local Currency Basis)

0.5%

0.2%

-0.2P

-

* Profit before tax on operating assets37【HC】 Breakdown of Cost of Revenues/SG & A
Breakdown of Cost of Revenues(Million Yen)

Cost of Revenues

Financial Expenses

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

YOY
ChangeYOY
Change(%)

245,100

272,425

312,859

327,703

331,074+3,371+1.0%

25,98230,28838,59940,02731,855-8,172-20.4%Breakdown of SG & A(Million Yen)

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

YOY
ChangeYOY
Change(%)

81,902

86,274110,997

96,442

97,978+1,536+1.6%

Personnel Expenses

44,76047,324

48,70349,24650,721+1,474+3.0%

Business Management
Expenses

31,51332,81534,12235,16235,719

+557

+1.6%

Credit Costs

5,627

6,134

28,171

12,033

11,537

-495

-4.1%

SG &A Expenses38

【HC】 Credit Trends by Region
Credit Loss Ratio*1

Credit Loss*2(Million Yen)

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021

0.15%

0.20%

0.18%

0.23%

0.35%

5,103

6,452

6,156

7,383

11,498

Japan

0.04%

0.05%

0.06%

0.07%

0.06%

823

812

911

1,160

1,031

Europe

0.26%

0.22%

0.25%

0.30%

0.50%

1,613

1,705

2,169

2,655

4,982

The
Americas

0.41%

0.79%

0.49%

0.79%

0.75%

1,357

2,652

2,070

2,480

2,737

Asia

0.27%

0.28%

0.22%

0.33%

0.95%

1,309

1,281

1,005

1,087

2,746

Total

*1 Credit Loss Ratio: Credit Loss divided by Operating Assets*2 Credit Loss: This is the actual amount of bad debt losses that are different from credit costs and the allowance for bad debt

39

【MUL】 Major Group Companies
Division

Company

Mitsubishi UFJ Lease & Finance(Domestic Branches)

CustomerBusiness

Main Business-Leasing, etc.

DFL Lease

80.0%

Leasing, etc.

Shutoken Leasing

70.7%

Leasing, etc.

DRS

100.0%

Rental and leasing, etc.

Mitsubishi UFJ Lease & Finance(U.S.A.)

100.0%

Leasing, etc.

ENGS Commercial Finance*2

100.0%

Vendor finance, etc.

Bangkok Mitsubishi UFJ Lease

44.0%

Leasing, etc.

Mitsubishi UFJ Lease (Singapore)

100.0%

Leasing, etc.

Mitsubishi UFJ Lease & FinanceIndonesia

100.0%

Leasing, etc.

Mitsubishi UFJ Lease & Finance(China)100.0%

Leasing, etc.

Mitsubishi UFJ Lease & Finance(Hong Kong)

100.0%

Leasing, etc.

Mitsubishi UFJ Lease & Finance(Ireland)

100.0%

Finance, etc.

-

Japanese
operating lease, etc.

Jackson Square Aviation (JSA)

100.0%

Aircraft leasing

Engine Lease Finance (ELF)

100.0%

Aircraft engine leasing,part-out-

Securitization finance

MUL Property (MULP)

100.0%

Real estate leasing

MUL Realty Investment (MURI)

100.0%

Real estate revitalization
investment

MUL Realty Investments(MRI)

100.0%

Overseas securitization
finance

Division

Real Estate

Main Business100.0%

Real estate rental andother real estate financeMiyuki Building

98.3%

Real estate rental

MUL Realty Advisers (MURA)

66.6%

Real estate asset management

33.4%

Asset management services forlogistics real estate-

Ship finance100.0%

Marine container leasing

MUL Railcars (MULR)

100.0%

Railcar leasing

Takari Kokoh Sejahtera (TKS)

75.0%

Auto leasing, etc.

Mitsubishi Auto Leasing
(MAL)

50.0%

Auto leasing

Company

Center Point Development(CPD)
MUL (Logistics Business
Department)
Beacon Intermodal Leasing(BIL)

Environment& Energy

Healthcare

MUL (Real Estate Business Department)

Ownership Ratio*1

Diamond Asset Finance(DAF)
Real Estate

Logistics

MUL (Aviation Business Department)
Aviation

Ownership Ratio*1

Infrastructure& Investment

MUL (Environment & Energy
Business Department)
MUL Energy Investment(MEI)
MUL Utility Innovation(MUI)

100.0%MUL (Healthcare Business
Department)--

100.0%

Japan Medical Lease

100.0%MUL Healthcare (MULH)

100.0%

Healthcare Management
Partners (HMP)

66.0%

MUL (Infrastructure
Business Department)
MUL (Investment Business
Department)
Japan Infrastructure
Initiative (JII)

Renewable-energy business
Operation and asset managementof renewable-energy businesses
Development ofenergy-related businesses
Medical equipment leasing
and medical fee factoring
Medical equipment and real estateleasing
Support service for installment of
medical equipment and medical
institution consulting
Management of fund to support
management specializing in the
medical and long-term care fields-

Infrastructure business,
PFI business-Corporate investment

47.6%

Infrastructure investment
and loan*1 Includes indirect ownership portions*2 Vendor finance entity of ENGS Holdings Inc.

40

【HC】 Major Group Companies
Division

Company
Hitachi Capital Auto Lease

Account
Solution

Ownership Ratio*
51.0%

Main Business

Division

Auto leasing

Sekisui Leasing

90.0%

Leasing and financial
business

Hitachi Capital Insurance

79.4%

Non-life insurance

Hitachi Capital Community

100.0%

Real estatedevelopment/
management/leasing

HCD Properti Indonesia

63.5%

Real estate leasing

Hitachi Capital Trust

100.0%

Trust business

Hitachi Green Energy

100.0%

Power generation

The
Americas

China

VendorSolution

EuropeHitachi Wind Power

85.1%

Power generation

Hitachi Sustainable Energy

85.1%

Power generation

Hitachi Capital NBL

100.0%

Leasing

Hitachi Capital (UK)100.0%

Leasing and financial
business

Hitachi Capital European Vendor
Solutions100.0%

Leasing and financial
business

Hitachi Capital Polska

100.0%

ASEAN

Auto leasing

Hitachi Capital Mobility Holding
Netherlands

98.6%

Financial holding
company

Hitachi Capital Mobility Netherlands

100.0%

Auto leasing

Maske Fleet

100.0%

Auto leasing and rental

Maske Langzeit-Vermietung

100.0%

Auto leasing and rental

Company

Ownership Ratio*

Hitachi Capital America

100.0%

Hitachi Capital Canada

100.0%

CLE Capital

100.0%

Hitachi Capital Management (China)

100.0%

Hitachi Capital (Hong Kong)

100.0%

BOT LEASE (HONG KONG)

100.0%

Hitachi Capital Leasing (China)

94.1%

Hitachi Capital Factoring (China)

100.0%

Hitachi Capital Asia Pacific100.0%

Hitachi Capital (Thailand)

74.0%

Hitachi Capital Malaysia

100.0%

Arthaasia Finance

85.0%

Hitachi Capital Finance Indonesia

73.8%

Hitachi Capital Servicer

100.0%

Hitachi Capital Services

100.0%

Hitachi Triple Win

100.0%

Japan Infrastructure Initiative (JII)

47.6%

Infrastructure
investment and loan

Hitachi Auto Service

40.0%

Automobile-related
businesses

OthersEquity- method
Affiliates

Main BusinessLeasing and financial
business
Leasing and financial
business
Leasing and financial
business
Financial holding
company
Leasing and financial
business
Leasing and financial
business
Leasing and financial
business
Factoring
Leasing and financial
business
Leasing and financial
business
Leasing and financial
business
Leasing and financial
business
Leasing and financial
business
Credit management
and collection
Purchase and sale ofused goods
Outsourcing business,business relating tofood, beverages andagriculture* Includes indirect ownership portions

41

Corporate Profile
Company Name

Mitsubishi HC Capital Inc.

Location

5-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100-6525, Japan

Paid in Capital

33,196 Million Yen

Accounting Standards

J-GAAP

Title and name ofrepresentatives

Fiscal Year End

Representative Director, Chairman

Seiji Kawabe

Representative Director, President & CEO

Takahiro Yanai

Representative Director, Deputy President

Kanji Nishiura

March, 31
Mitsubishi UFJ Financial Group, Inc.

Major Shareholders

Mitsubishi Corporation
Hitachi, Ltd.

42

Inquiries

Corporate Communications Department
I

II

Inquiries

WebsiteTEL： +81 3-6865-3002

https://www.mitsubishi-hc-capital.com/english/

43Legal Disclaimer
 This presentation contains forward-looking statements regarding estimations, forecasts, targets and plans inrelation to the results of operations, financial conditions and other overall management of Mitsubishi HC
Capital Inc. and/or its group companies (collectively, the “Group”).

 These forward-looking statements are inherently subject to a number of risks and uncertainties that could
cause the Group’s actual results, performance, achievements, financial position etc. to differ materially fromthe information expressed or implied by these forward-looking statements, which is based on assumptions
and beliefs in light of information currently available to the management of Mitsubishi HC Capital Inc. at thetime of publication. Accordingly, due to various risks and uncertainties, the statements are not a guarantee of
future performance or developments. We may not be successful in implementing our business strategy, andmanagement may fail to achieve its targets for a wide range of possible reasons.
 The Amount less than one unit is omitted in this presentation, which may cause fraction error in the total
amount. We undertake no obligation to update or correct any forward-looking statements after the date ofthis presentation. The information set forth in this presentation is subject to change without notice.
 This presentation is not intended to solicit, offer, sell or market securities in any jurisdiction, and should not
be the sole basis for making investment and other decisions. The reader is cautioned not to place undue
reliance on forward-looking statements.
 This presentation is made in Japanese and translated into English. The Japanese text is the original and theEnglish text for reference purposes. If there is any conflict or inconsistency between these two texts, theJapanese text shall prevail.

44