CEO Message

Change is the fuel for continued growth.

For the fiscal year ended March 2025, while we did not achieve our initial target (net profit of 390 billion yen), consolidated net profit reached 351.6 billion yen, marking the third consecutive year of record-breaking profits.
We anticipate that the external environment will remain uncertain in the fiscal year ending March 2026; however, ORIX is committed to striving for even higher standards.
We have announced new medium-term goals, which are achievable only with the broad support of our clients, business partners, employees, investors, and shareholders. We sincerely request your continued support and trust.
We have prepared this Integrated Report to deepen your understanding of our company, and we would be honored if you would take the time to review it.

Since its founding nearly 60 years ago, ORIX has cultivated the ability to continue growing despite the changing economic environment by flexibly reconstituting its portfolio. Starting with leasing, we have accumulated expertise and experience in various financial fields both in Japan and overseas.
Leveraging this diverse experience, we are actively and flexibly building new value both domestically and internationally across a wide range of business areas, including automobiles, electronic equipment, real estate, airports, renewable energy, aircraft, ships, and asset management. By rotating our diversified and dispersed portfolio in line with market trends, we believe we have built a corporate structure unique to ORIX.
The global economy continues to face heightened uncertainty and structural changes. We believe that geopolitical risks, intensifying trade friction, ongoing inflation, and uncertainty surrounding national monetary policies are contributing to extremely high volatility in global capital markets.
While corporate decision-making criteria is becoming increasingly complex, we believe that the ability to make cautious yet bold decisions in such an environment is the fuel that will sustain ORIX's continued growth.

Failure is the key to growth

ORIX currently operates in approximately 30 countries and regions worldwide, with approximately 34,000 group employees. Under the "ORIX Group Purpose & Culture" introduced in November 2023, executive management is tasked with the important task of strengthening group cohesion while meeting the needs of our customers, adhering to business ethics and norms, and making accurate judgements on a wide variety of transactions and projects all while accurately assessing local financial market trends.
It is crucial for management to make decisions swiftly while also insisting on thorough due diligence and clear deal documentation. For ORIX, maintaining a mindset of proactively embracing change as an opportunity and taking the initiative to enter new ventures is essential.
ORIX's growth has been driven by learning lessons from failures not just as individuals but as an organization as a whole so that they can be applied to future deals.
The shipping and aircraft businesses, which has become one of our core segments, experienced significant losses in the past. However, rather than writing off those losses and withdrawing from these businesses, we learned their unique characteristics and leveraged our failures as lessons and continued to operate them; as a result, they have grown into highly profitable segments.
Perseus Shipping (now ORIX Maritime) was established in 1977 for ORIX to obtain a ship chartering license and ORIX Aviation Systems (OAS) was established in 1991 for ORIX to be able to register aircraft registration. These companies were initially crisis management responses to deal with assets that were stranded by shipping and air transport market crashes caused by geopolitical crises, but they accumulated significant expertise in operations, maintenance, and market strategies, and ultimately became valuable assets. Santoku Senpaku Co., Ltd. and SOMEC Corporation, joined our Group this past fiscal year, enabling us to establish a unique position in the shipping industry. In the aviation business, we began aircraft leasing operations in 1991 by purchasing 74 aircraft (24 firm orders and 50 options) from a bankrupt airline. However, we faced numerous challenges, including the Gulf War, the bankruptcy of many airlines, engine design issues, and terrorist attacks. However, these experiences enabled the accumulation of know-how, and today, we hold a 30% stake in Avolon, the world's third-largest aircraft leasing company, which together with OAS, have established for us a solid position in the primary and secondary sectors of the aircraft leasing business.
At ORIX, we believe that failure is the key to growth. A single failure contains far more lessons than a hundred successes. The measures taken to overcome crises become know-how that can be applied to future challenges, and in a rapidly changing environment, we can boldly seize opportunities for growth. Our strength lies in our ability to seize opportunities for recovery through a culture that counts successes rather than failures.
For example, I believe the 2008 global financial crisis provided us with an opportunity to learn the importance of risk management which has since led to a significant recovery in performance and an increase in corporate value.ORIX had actively re-allocated capital to businesses such as real estate from its financial business, which was facing difficulties in maintaining profitability due Japan’s prolonged zero interest rate policy. However, we faced a sharp contraction in domestic real estate transactions and a sudden contraction in global financial markets. At the time, ORIX relied heavily on short-term commercial paper for funding and was forced to significantly reduce its debt, leading to a severe decline in its stock price. Based on this experience, ORIX has diversified its business lines as well as portfolio to reduce risk and strengthen its financial base. By splitting its capital across diversified businesses and establishing a management system capable of responding flexibly to changes in the environment, ORIX Group has been able to achieve sustainable profit growth.
In addition, the company has made strengthening corporate governance and enhancing risk management its most important focus area, and has established a risk dashboard that enables identification and quantitative analysis of the Group's market risk, credit risk, operational risk, and liquidity risk. This system enables the rapid analysis and evaluation of business projects by business divisions, timely involvement of management divisions, and the implementation of sound financial discipline, all of which can be utilized in management decision-making.

Surviving through swift decision-making and delegation of authority

In our medium-term plan, we have set 11% ROE and an A-grade international credit rating as targets for the fiscal year ending March 2028, and 15% ROE and 1 trillion yen net income as targets for the fiscal year ending March 2035. To achieve these targets, simply increasing total assets is not a viable strategy, and maintaining an A-rated international credit rating is a critical management priority to ensure financial soundness and profitability.
As part of our management strategy, we are promoting capital recycling. For all portfolio companies, including subsidiaries, we must continuously enhance their value while assessing growth potential, and constantly seek to maintain liquidity and identify appropriate exit timing.
Investment opportunities carry the risk of becoming obsolete from the day they are executed. Even the most attractive-looking opportunities can see their corporate value change due to market fluctuations. Waiting to act until the environment deteriorates is too late, making daily monitoring crucial. To maximize returns while also minimizing risks, we believe it is essential to recognize that capital recycling should serve as a guiding principle for sound business operations. In order to constantly optimize capital allocation in a changing market, objective analysis and calm judgment are essential. We have established a system to accurately determine the timing of divestment, based on the premise that projects with relatively low ROA and ROE are actively targeted for capital recycling.
ORIX's business scale and organization have grown significantly, and we are seeing an increase in the variety of investment opportunities, such as complex cross-border initiatives and domestic and overseas M&A deals. To respond to this, securing diverse talent and creating a group-wide environment where they can thrive has become even more important. Expanding the Group's human capital is a top management priority so that we may attract top talent, ensure all employees understand ORIX's corporate culture, and enable them to grow as professionals in their respective fields and contribute globally.
In overseas business environments, we believe that clear communication that eliminates ambiguity and swift decision-making in negotiations are essential. We recognize that empowering the talent we hire in each country and delegating authority to them is a critical theme for the Group as we expand and grow our global operations. We believe that granting responsibility and authority to individuals at each workplace is the foundation of ORIX's human capital management, which places a strong emphasis on autonomy. In addition to talent acquisition and development, it is also necessary to review compensation systems to enhance our global competitiveness. Building compensation systems that align with local market standards and reflect the roles and achievements of employees across the Group's various businesses and regions is essential for human capital management.
While such reforms require time, we recognize that they are urgent priorities for our survival in a global environment and demand prompt action.

Maintaining unity and speed to forge a path toward the future

Effective January 1, Hidetake Takahashi has been appointed as Representative Executive Officer, President and COO. I have delegated some of my authority related to management decisions to Mr. Takahashi, who has assumed responsibility for important decision-making related to business operations as COO. It is important for the CEO and COO to have a shared vision in the direction of the company, and this appointment will not impact the cohesion of the group or the speed of decision-making. There will be no changes to our multi-faceted management approach, which includes evaluation criteria for investment decisions, future market outlook, exit strategies, policies regarding ROE and credit ratings, and sustainability.
ORIX has never had major shareholders and has charted its own course independently. We believe that maintaining ORIX’s fundamental culture where each employee acts with a sense of autonomy and a vision for the future of the company is essential for the company's continued success. Proposals and opinions from both business and administrative departments may not always represent the most optimal solution. It is the responsibility of management to make the best decisions for the company as a whole in the medium- to long-term, so while we respect each proposal and opinion, we will not be enamored by them. Each one of these sound decisions enhance the quality of our business management as a whole and increase our trust and recognition as a company.
We believe it is essential to continue striving to earn the recognition of being an "excellent company" while keeping our eye on the future.

In May of this year, we announced our long-term vision for 2035 and our medium-term plan through 2028 and shared them with management around the world at our Global Management Conference. Going forward, we will focus even more on improving capital efficiency, strengthening portfolio management, and creating new businesses. We will also promote human capital management and contribute to a sustainable society, and our commitment to meeting your expectations remains unchanged.

We look forward to your continued support and trust.