8585.T

5-Year Medium-Term Management Plan Structure

• The first 3 years are designated as a structural reform period: improve productivity of overseas and non-core individual installment businesses, shrink/exit from unprofitable areas to free up management resources, and reallocate resources to high-growth areas to build a competitive business base. The final 2 years will focus on harvesting results from the transformation.
• As of the first half, structural reform is broadly on track: the shift of management resources to growth areas from inefficient/declining areas has started as planned.

Personal Business Growth & Restructuring Progress

• Digital installment is positioned as the top growth driver, with a total target market size of approximately 8 trillion yen. Full launch on Amazon was delayed from May to August, leading to first half transaction volume and active member counts coming in far below plan; the company is currently developing promotion strategies for November Black Friday to recover the 3-month delay. There are two product types: partnership-type with major merchants (Amazon, Apple) for in-platform purchase financing, and general-purpose via the "Waketara" app. A December 2025 app refresh with new features and UI/UX improvements is in preparation.
• Personal auto lease is a second core growth area, aligned with consumer shifts from ownership to usage; Orient holds the industry's number one position in outstanding units. First half outstanding units slightly missed plan, and the company will leverage synergies from its industry-leading existing auto lease business, the recently acquired Orico Car Life insurance agency network, and online non-face-to-face operations to build a competitive position.
• New HR partnership announced with HR Solutions, Japan's largest platform for part-time worker hiring covering 500,000 business locations and 9 million annual job seekers. The partnership will mutually introduce client and merchant networks to expand customer base, and the two companies will explore developing new credit models and data businesses leveraging combined proprietary data, targeting improved financial inclusion for contingent and foreign workers.

Corporate Business Growth Progress

• Business cards are positioned as a core product for customer base expansion. A new co-branded business card with AEON Financial Service launched in October 2025, and a partnership with PayPay for a merchant-focused business card is on track to launch in the current fiscal year. A new DX digital platform for accounting and cash flow management for SMEs is scheduled for launch next year to support small business clients.
• The company's long-standing experience in credit management for 900,000 individual installment merchants and accumulated credit data for sole proprietors and corporate directors is cited as a core competitive advantage for corporate lending. Going forward, the company will roll out combined AI and corporate data credit modeling for selected products to improve credit underwriting capabilities.

Management Foundation Strengthening Initiatives

• Digital/AI: Launched the new "Athena" virtual data utilization platform in August 2025, which significantly reduces lead times for data access by building a virtual data mart covering upstream source data; the company is expanding use cases to enable more advanced data analytics and faster, more efficient marketing.
• Governance: Modified the governance structure to have a non-executive chairman serve as Board of Directors chair, and added a new informal Board discussion meeting to increase open dialogue including outside directors, aimed at improving board effectiveness.
• ALM (Asset Liability Management): Upgraded internal FTP (Fair Transfer Price) internal rate operations to consolidate interest rate positions into the central ALM team, and built out capabilities to track period-specific interest rate risk and monitor risk metrics. The company shifted from fixed-cost focused procurement management to risk-aligned management that accounts for maturity gaps, and now has systems in place for forward-looking hedging operations and procurement mix optimization.
• Human Capital & Culture Change: Launched middle management training and leadership development programs for future core talent. To address deep-rooted cultural issues of top-down communication and passive work, management is driving change through both hard and soft initiatives: the CEO is holding town halls at branches and group companies nationwide, branch managers now develop their own branch business plans to encourage proactive problem solving, and the company is conducting end-to-end business process transformation (BPX) across 6 core product lines covering 82 business processes to improve employee productivity and enable more creative work.
• Brand Strategy: Currently, the company has high name recognition but very low business awareness, so brand does not contribute to competitive advantage. The company is building a new brand identity as "Supporters for all consumers and SMEs that want to take the next step", aligned with its purpose and long-term vision.

• Full fiscal year ordinary profit progress is at 60% of the prior full year forecast, and net profit progress is at 52%, in line with planned trajectory. Management maintains its medium-term target of reaching over 50 billion yen in ordinary profit by the 2030 March fiscal year.
• Personal segment overall sales target for the 2030 March fiscal year is 270 billion yen, representing an increase of nearly 80 billion yen from current levels, with growth contributions from digital installment, auto lease, and price pass-through for existing individual installment products. Management plans to recover the first half shortfall in digital installment and auto lease in the second half of the current fiscal year.
• Structural reform is on track through the first half, and management plans to accelerate restructuring efforts in the second half of the fiscal year, with a full update on restructuring results scheduled for May 2026.
• The company will continue disciplined cost management even as it plans for higher promotion expenses for digital installment in the second half.

1. Personal Strategy Segment: Transaction volume recovered steadily, but increased financing costs could not be fully offset by price pass-through, leading to a 1.6 billion yen decrease in ordinary profit year-on-year. Growth areas of digital installment and auto lease slightly missed plan targets in the first half. The existing individual installment product's net interest spread has started an improving trend after renewed push for price pass-through in the current fiscal year.
2. Corporate Strategy Segment: Steady revenue growth from bank guarantee and other businesses drove an 800 million yen increase in ordinary profit year-on-year. All corporate business lines including accounts receivable settlement guarantee and small-ticket lease guarantee are broadly on track with plan. Business card transaction volume reached 104% of the first half plan, while new customer acquisition missed target. Accounts receivable settlement guarantee grew in line with planned growth rates, with Mizuho Bank's brokerage channel volume accounting for 20% of the segment total. Bank guarantee outstanding balance maintained an increasing trend, and the company began improving guarantee fee rates (excluding condominium loan guarantees) in the second quarter.
3. Overseas Segment: Continued running an ordinary loss, but bad debt-related expenses decreased by 1.4 billion yen year-on-year, resulting in an 1.1 billion yen improvement in ordinary profit year-on-year. Management states a path out of operating losses is gradually emerging.

• Rising market interest rates have increased financing costs by 2 billion yen year-on-year in the quarter, and put downward pressure on securitization revenues and net interest spreads for existing businesses, which has weighed on personal segment profits.
• The Amazon launch delay resulted in material first half misses for digital installment's key metrics, the company's top growth priority.
• Persistent cultural issues including top-down decision making and passive work approaches at the company remain a barrier to transformation, and require ongoing targeted initiatives to resolve.
• Low business awareness of the Orient Corporation brand means it does not currently contribute to competitive advantage, requiring significant investment to reposition the brand.

No question and answer section was included in the provided earnings call transcript.