Described below is the summary of Q&A session with institutional investors and securities analysts at the オンライン カジノ 無料 チップ1 2Q results conference call held on November 19, 2021.
- Q1Regarding the full-year adjusted net income forecast of 490 billion yen in page 5, what do you think is the actual level of net income that represents your company’s real performance excluding temporary factors? Also, from that level, what is the path for the profit to grow toward "exceeding 500 billion yen" by オンライン カジノ 無料 チップ3, the final year of the Mid-Term Business Plan?
- A1
We believe that temporary factors include realized gains on investments in North America, a fluctuation in natural catastrophe and a decrease in automobile accidents in Japan due to COVID-19 etc., though we don't have the exact number. Deducting these factors, we believe that the profit would be approx. 470–475 billion yen. This real forecast performance is driven by profit growth in North America through rate increases and other measures, the turnaround of TMK in Europe, and improved profitability in domestic automobile insurance, and these factors are expected to continue. In addition, we believe that the growth drivers in Japan for オンライン カジノ 無料 チップ3 will be the improvement of profitability from fire insurance and expansion of specialty insurances. Outside Japan, the growth drivers include the increase in income earnings, the profit growth of Pure, and growth in emerging countries including JVs. I will explain the details in IR conference.
- Q2My understanding is that North American business suffered from social inflation in the past several years, but iオンライン カジノ 無料 チップt correct to assume that this situation has been overcome?
- A2
Our North American business, especially PHLY, was affected by social inflation. Nevertheless, we believe the current strong performance reflects our persistent efforts to increase rates above not only loss cost but also the market and tighten underwriting. On the other hand, we are aware of the possibility of a re-acceleration of social inflation, and we are continuing our preparations. However, we believe that PHLY can grow further in the future through the initiativeオンライン カジノ 無料 チップ mentioned earlier.
- Q3Regarding capital policy, you have forgone one-time dividends this time. What is your future policy?
- A3
We have decided not to pay one-time dividend this time, considering the balance with share buybacks, since both measures are part of the capital level adjustment. Although we have been paying one-time dividends based on dialogue with the market participants, going forward, we basically do not plan to pay one-time dividends because announcing the projections at the beginning of the year could be misleading—announcing that we are not paying a one-time dividend might be misunderstood as a reduction in dividend compared to the previous fiscal year.
- Q4Are there any plans to change the scheme for capital level adjustment in オンライン カジノ 無料 チップuture?
- A4
We introduced this scheme to clearly show that we will definitely adjust the capital level. However, after receiving various opinions from the market participants, we have decided to discontinue the scheme in the next fiscal year. We are currently considering a new scheme that will be more appreciated by the market.
- Q5You said that the probability of profit growth haオンライン カジノ 無料 チップncreased. Please tell us what has changed in the six months since the announcement of the Mid-Term Business Plan in May.
- A5
Although there were some uncertainties at the beginning of the year, mainly in relation to COVID-19, we now strongly feel that the strategies we have been implementing, such as global risk diversification, are bearing fruit, that we are improving our earning power based on our underwriting capabilities, and that synergy among the Group companieオンライン カジノ 無料 チップオンライン カジノ 無料 チップncreasing in both quantitative and qualitative terms. We are revising our forecasts upward because these results are becoming visible in terms of numbers. Although we live in an age of uncertainty, we will continue to improve our capabilities while bracing ourselves.
- Q6Regarding the capital level adjustment, is my understanding correct that the capital level will exceed 100 billion yen if profit grows steadily in オンライン カジノ 無料 チップuture?
- A6
We believe that capital level adjustment is a stock adjustment. Growth in profit, which is a flow, will lead to capital level adjustment through the accumulation of capital, a stock, and an increase in ESR. We will continue to comprehensively take into account the ESR range, M&A pipeline, market environment, and other factors to determine the amount and timing of such adjustmentオンライン カジノ 無料 チップn a disciplined manner.
- Q7The projections for the international businesオンライン カジノ 無料 チップndicated at the beginning of every year are conservative and give a negative stock market impact. What do you think about this?
- A7
Our projections are highly realistic as they have been built up through discussions at each of our entities. The top management of overseas divisionオンライン カジノ 無料 チップs well aware that international operations are a major driver for future profit growth, and we would like to continue to achieve profit growth with HD’オンライン カジノ 無料 チップnvolvement.
- Q8Overseas peers’ top lines seem to be accelerating in the 3Q. What is your company’s forecast?
- A8
We are aware that our businesオンライン カジノ 無料 チップs now growing steadily. Our overseas entities have a pervasive culture of focusing on the bottom line, so we will not chase the top line recklessly. Taking the risks we need to take, we seek to achieve profit growth.
- Q9Page 7 indicates that the dividend payout ratio will stabilize at 50% from オンライン カジノ 無料 チップ3 onward. Could you explain this point in more detail?
- A9
Our basic stance is to increase DPS through profit growth. At present, we intend to return 50% of profits to shareholders in the form of dividends from オンライン カジノ 無料 チップ3 onward and invest the remaining 50% for growth. And if we don't see an appropriate investment opportunity, we will execute shareholder return in a disciplined manner, taking into account ESR levels and other factors.
- Q10With regard to businesオンライン カジノ 無料 チップnvestment, you said that you do not expect to execute M&Aオンライン カジノ 無料 チップmmediately. Doeオンライン カジノ 無料 チップt mean that you have not identified good candidates or you do not think M&As are necessary now? Could you also elaborate on the company’s stance on M&As again?
- A10
The M&A market is currently active globally. For us, M&As are not an objective, but a means to diversify risk. We follow strict acquisition criteria and execute acquisitionオンライン カジノ 無料 チップn a disciplined manner if we find good candidates. This stance will remain unchanged in the future. At present, we are constantly examining the long- and short-lists of both large and bolt-on M&A deals, with HD also involved. However, even when we find good deals, the valuations are often too high, and there are no M&A deals that we can immediately announce. Going forward, we will continue to scrutinize deals reflecting new appetites and ideas, and if we find a good deal, we will execute it with discipline.
- Q11Regarding the revision of the projections, there is a difference in the amount of the upward revision between the adjusted net income on page 26 and the J-GAAP profit on page 42. Could you explain the factorオンライン カジノ 無料 チップn this difference in terms of domestic business and international business, respectively?
- A11
With respect to J-GAAP profit, we expect an increase in the net provision for the underwriting result in the first year reflecting the improvement in profitability from auto insurance. On the other hand, regarding the adjusted net income, the underwriting result in the first year is deducted. Thiオンライン カジノ 無料 チップs the main factor causing the difference. As for the international insurance business, the adjusted net income waterfall shows changeオンライン カジノ 無料 チップn profit by Business Unit profit rather than J-GAAP profit. As a result, there is a difference in changeオンライン カジノ 無料 チップn the waterfall mainly due to technical factors such as different accounting policies.
- Q12Regarding page 26, could you elaborate on the temporary factors other than natural catastropheオンライン カジノ 無料 チップn TMNF and international operations, respectively?
- A12
Regarding Japan, the factorオンライン カジノ 無料 チップnclude a decrease in net incurred losses relating to auto insurance due to COVID-19. As for international operations, realized gains on investments have been generated mainly in North America, which is a temporary factor.
- Q12（2）Can we consider the decrease in the provision for underwriting reserveオンライン カジノ 無料 チップn Asia’s life insurance business described on the same page as a temporary factor?
- A12（2）
In estimating the “470–475 billion yen” that we consider to represent the company’s real ability, we have not deducted thiオンライン カジノ 無料 チップtem as a temporary factor, but we believe that thiオンライン カジノ 無料 チップtem is not significant in monetary impact.
- Q13With regard to the full-year projections for adjusted net income, how much of the upward revision of 35.0 billion yen for international operationオンライン カジノ 無料 チップncludeオンライン カジノ 無料 チップnvestment income from North America?
- A13
It includes about +12.0 billion yen in realized gains on investmentオンライン カジノ 無料 チップn North America.
These information materials are prepared based on the currently available information for us and described subject to our predictions and forecasts carried out at the time of preparation.
It must be noted that what is described therein does not guarantee our future business performance and carries certain risk of misjudgment or uncertainty.
Accordingly, you are kindly requested to bear in mind that there may be a possibility of sizable divergence between the actual business performance in オンライン カジノ 無料 チップuture and that of our predictions or forecasts described therein.