HITACHI CAPITAL CORP

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Hitachi Capital : Consolidated Financial Results Summary for the First Quarter ended June 30, 2020

08/05/2020 | 12:47am

Consolidated Financial Results Summary for the First Quarter ended June 30, 2020

August 5, 2020

© Hitachi Capital Corporation 2020. All rights reserved.

The highlights of Consolidated Financial Results for the First Quarter of FY2020

  • Consolidated earnings forecasts for the fiscal year ending March 31, 2021 remain unchanged.

(Unchanged assumption of the COVID-19 impact calculation)

  • Profit before tax: The result exceeded initial forecasts of the first quarter as a result of steady performance of Environment/Energy in Japan and cost reduction, etc.

(1Q result: ¥9 billion/Progress rate to initial forecasts of the first half(¥16.3 billion): 55%)

  • Volume of business: The result exceeded initial forecasts of the first

quarter despite negative impact resulting from economic slowdown and city-wide lockdown due to the COVID-19 impact.

(1Q result: ¥353.4 billion/Progress rate to initial forecasts of the first half(¥702.7 billion): 50%)

  • Selling, general and administrative expenses: Allowance for doubtful accounts temporary increased within expectation due to correspondence

to moratoriums in UK and Indonesia, etc.

(1Q result: ¥23.8 billion/Progress rate to initial forecasts of the first half(¥49.5 billion): 48%)

The Company incorporates decreases in business volume and revenues in its consolidated earnings forecasts for the fiscal year ending March 31, 2021, assuming that the COVID-19 impact will have significant negative impact until June 2020 and then the economy will gradually recover towards March 2021.

© Hitachi Capital Corporation 2020. All rights reserved.

1

Profit before tax of the First Quarter of FY2020 (Year on Year)

  • The result(¥9.0 billion) progressed 55% to initial forecasts of the first half (¥16.3 billion).
  • The result increased 6% year on year excluding the COVID-19 impact.

(Billions of yen)

11.4*

(Y on Y: 106%)

Effect of

COVID-19

Business

impact

Exchange

expansion, etc.

rate changes

COVID-19

(Mainly Japanese

▲0.2

business)

impact

10.8

+0.8

(Mainly global

9.0

▲2.4

business)

(Y on Y: 83%)

FY2019/1Q

FY2020/1Q

Result

Result

*The result excluding the COVID-19 impact

© Hitachi Capital Corporation 2020. All rights reserved.

2

Contents

  1. Summary of Consolidated Financial Results for the First Quarter of FY2020
  2. Summary of Performance by Business
  3. Consolidated Financial Forecast for FY2020

© Hitachi Capital Corporation 2020. All rights reserved.

3

1. Summary of Consolidated Financial Results for the First Quarter of FY2020

(Millions of yen)

FY2019/1Q

FY2020/1Q

Y on Y

Foreign

Y on Y

exchange

(excluding foreign

Results

Results

Change

effects

exchange effects)

Volume of business

574,536

353,446

62%

▲6,745

63%

Revenues

114,517

109,758

96%

▲2,092

98%

Cost of sales

80,702

78,243

97%

▲1,330

99%

Gross profit

33,815

31,514

93%

▲761

95%

Selling, general and administrative expenses

23,634

23,859

101%

▲595

103%

Profit before tax

10,832

8,993

83%

▲166

85%

Net income attributable to owners of the parent

8,064

6,574

82%

▲132

83%

Operating assets

3,226,070

3,073,646

95%

▲28,644

96%

ROE

8.5%

6.9%

▲1.6%

ROA

1.3%

1.1%

▲0.2%

OHR

62.7%

64.1%

+1.4%

Yearly average currency

Yen /

141 yen

134 yen

▲8 yen

exchange rate

Yen / US

110 yen

108 yen

▲2 yen

© Hitachi Capital Corporation 2020 All rights reserved.

4

2-1. Summary of Japan Business/Global Business

(Millions of yen)

FY2019/1Q

FY2020/1Q

Y on Y

Foreign

Y on Y

exchange

Results

Results

Change

(excluding foreign

effects

exchange effects)

Volume of

Japan Business

251,861

176,991

70%

▲ 27

70%

business

Global Business

322,675

176,454

55%

▲6,717

57%

Gross profit

Japan Business

15,235

15,276

100%

0

100%

Global Business

18,538

16,274

88%

▲760

92%

Profit before

Japan Business

6,849

7,440

109%

0

109%

tax

Global Business

6,209

3,691

59%

▲165

62%

Operating

Japan Business

1,605,771

1,625,247

101%

▲53

101%

assets

Global Business

1,620,298

1,448,398

89%

▲28,591

91%

ROA

Japan Business

1.7%

1.8%

+0.1%

Global Business

1.5%

1.0%

▲0.5%

ROA

(Local currency

Global Business

1.5%

1.0%

▲0.5%

basis)

*Adjustments (company-wide expense) are not allocated to gross profit and profit before tax of Japan Business and Global Business.

© Hitachi Capital Corporation 2020

All rights reserved. 5

2-2. Breakdown of Japan Business

(Millions of yen)

Volume of business

Operating assets

FY2019/1Q

FY2020/1Q

Y on Y Change

FY2019/1Q

FY2020/1Q

Y on Y Change

Results

Results

Results

Results

Total of Japan Business

251,861

176,991

70%

1,605,771

1,625,247

101%

Account Solution

201,985

138,248

68%

1,053,337

1,119,860

106%

Vendor Solution

47,825

36,874

77%

435,696

439,422

101%

Total of reportable segments

249,811

175,122

70%

1,489,034

1,559,283

105%

Other

2,348

2,209

94%

116,737

65,963

57%

Gross profit

Profit before tax

FY2019/1Q

FY2020/1Q

Y on Y Change

FY2019/1Q

FY2020/1Q

Y on Y Change

Results

Results

Results

Results

Total of Japan Business

15,235

15,276

100%

6,849

7,440

109%

Account Solution

9,109

9,178

101%

5,266

5,688

108%

Vendor Solution

4,057

4,110

101%

1,501

1,721

115%

Total of reportable segments

13,167

13,289

101%

6,768

7,410

109%

Other

2,067

1,987

96%

80

30

38%

*Adjustments (company-wide expense) are not allocated to total of Japan Business

© Hitachi Capital Corporation 2020 All rights reserved.

6

2-3. Breakdown of Global Business(1):

Europe, The Americas

  • Europe (UK, Poland, the Netherlands, Germany, Austria, Belgium, Czech, Slovakia, Hungary)

(Millions of yen)

FY2019/1Q

FY2020/1Q

Foreign

Y on Y

Y on Y Change

exchange

Results

Results

(excluding foreign

effects

exchange effects)

Volume of business

164,817

73,757

45%

▲ 4,210

47%

Gross profit

11,202

10,185

91%

▲ 580

96%

Profit before tax

3,993

3,135

79%

▲ 168

83%

Operating assets

841,677

822,937

98%

▲ 24,732

101%

ROA (Local currency basis)

1.9%

1.5%

▲0.4%

  • The Americas (US, Canada)

(Millions of yen)

FY2019/1Q

FY2020/1Q

Foreign

Y on Y

Y on Y Change

exchange

Results

Results

(excluding foreign

effects

exchange effects)

Volume of business

105,154

69,342

66%

▲ 1,469

67%

Gross profit

4,202

3,530

84%

▲ 74

86%

Profit before tax

967

473

49%

▲ 10

50%

Operating assets

354,390

314,036

89%

▲ 145

89%

ROA (Local currency basis)

1.0%

0.6%

▲0.4%

© Hitachi Capital Corporation 2020 All rights reserved.

7

2-3. Breakdown of Global Business(2):

China, ASEAN

  • China (Mainland China, Hong Kong)

(Millions of yen)

FY2019/1Q

FY2020/1Q

Foreign

Y on Y

Y on Y Change

exchange

Results

Results

(excluding foreign

effects

exchange effects)

Volume of business

24,057

23,687

98%

▲ 598

101%

Gross profit

1,431

1,127

79%

▲ 27

81%

Profit before tax

749

455

61%

▲ 9

62%

Operating assets

275,534

185,575

67%

▲ 1,057

68%

ROA (Local currency basis)

1.0%

0.9%

▲0.1%

  • ASEAN (Singapore, Thailand, Malaysia, Indonesia)

(Millions of yen)

FY2019/1Q

FY2020/1Q

Foreign

Y on Y

Y on Y Change

exchange

Results

Results

(excluding foreign

effects

exchange effects)

Volume of business

28,646

9,667

34%

▲ 439

35%

Gross profit

1,701

1,430

84%

▲ 77

89%

Profit before tax

498

▲ 372

22

Operating assets

148,696

125,849

85%

▲ 2,655

86%

ROA (Local currency basis)

1.3%

▲1.3%

▲2.6%

© Hitachi Capital Corporation 2020 All rights reserved.

8

3. Consolidated Financial Forecast for FY2020 (Preliminary calculation)

(Millions of yen)

FY2019

FY2020

Y on Y Change

Results

Forecasts

Volume of business

2,186,490

1,755,000

80%

Revenues

464,020

450,200

97%

Cost of sales

327,703

314,200

96%

(of which, cost of capital)

40,027

36,900

92%

Gross profit

136,316

136,000

100%

Selling, general and administrative expenses

96,442

99,500

103%

Profit before tax

42,526

38,500

91%

Net income attributable to owners of the parent

30,693

27,500

90%

Dividend per share (yen)

150 yen(*1)

94 yen

Payout ratio

41.9%(*2)

39.9%

▲2.0%

ROE

8.1%

7.1%

▲1.0%

ROA

1.3%

1.2%

▲0.1%

OHR

61.9%

65.7%

+3.7%

Yearly average

Yen /

138 yen

135 yen

Exchange sensitivity (*3)

: Approx. 110 million yen

currency exchange rate

Yen / US

109 yen

108 yen

: Approx. 30 million yen

Exchange sensitivity (*3)

(*1) Ordinary dividend payments 110 yen + Special Dividends 40 yen (*2) Calculated using ordinary dividend payments (110 yen share)

(*3) The impact on Profit before tax in case JPY vs £/$ changed 1 yen (FY2020 forecasts )

© Hitachi Capital Corporation 2020 All rights reserved.

9

https://www.hitachi-capital.co.jp/

Note:

This document contains forwardlooking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management's views and assumptions formed using information available at the time. Accordingly, forecasts may differ from actual results due to a variety of factors.

Appendix

© Hitachi Capital Corporation 2020. All rights reserved.

Breakdown of Cost of Sales/SG&A

■ Breakdown of cost of sales

(Millions of yen)

FY2019/1Q

FY2020/1Q

Y on Y Change

Results

Results

Cost of sales

80,702

78,243

97%

(of which, cost of capital)

10,595

8,592

81%

■ Breakdown of SG&A

(Millions of yen)

FY2019/1Q

FY2020/1Q

Y on Y Change

Results

Results

Selling, general and administrative

23,634

23,859

101%

expenses

(of which, personnel costs)

12,572

12,288

98%

(of which, business management

8,632

7,916

92%

expenses, etc.)

(of which, bad debt-related

2,430

3,654

150%

expenses)

© Hitachi Capital Corporation 2020

All rights reserved. 12

Quarterly Credit Trends by Region

Credit loss ratio

Annually Accumulated

1Q

Accumulated

FY2017

FY2018

FY2019

FY2020/1Q

Results

Results

Results

Results

Total

0.20%

0.18%

0.23%

0.29%

Japan

0.05%

0.06%

0.07%

0.06%

Europe

0.22%

0.25%

0.30%

0.45%

The

0.79%

0.49%

0.79%

0.90%

Americas

Asia

0.28%

0.22%

0.33%

0.49%

Credit loss(Millions of yen)

Annually Accumulated

1Q

Accumulated

FY2017

FY2018

FY2019

FY2020/1Q

Results

Results

Results

Results

6,452

6,156

7,383

2,244

812

911

1,160

233

1,705

2,169

2,655

920

2,652

2,070

2,480

709

1,281

1,005

1,087

381

*Credit loss ratio : Credit loss ÷ Operating assets

*Credit loss : This is the actual amount of bad debt losses that are different from bad debt-related expenses and the allowance for bad debt.

© Hitachi Capital Corporation 2020 All rights reserved.

13

Disclaimer

Hitachi Capital Corporation published this content on 05 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2020 04:46:06 UTC

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