Mitsubishi UFJ Lease & Finance : New Medium-term Management Plan (FY2020~2022)～~Sustainable Growth 2030～

Mitsubishi UFJ Lease & Finance	March 12, 2020
News Release
Company Name:	Mitsubishi UFJ Lease & Finance Company Limited
Representative:	Takahiro Yanai, President & CEO
Securities Code:	8593
Listing:	Tokyo Stock Exchange, First Section
	Nagoya Stock Exchange, First Section
For inquiries:	Taro Hasegawa, General Manager
	Corporate Communications Department

Medium-term Management Plan (FY2020-2022)

~Sustainable Growth 2030~

Mitsubishi UFJ Lease & Finance Company Limited (the "Company") today announced the formulation of our new Medium-term Management Plan (below, referred to as "Medium-term Management Plan" or the "Plan") spanning the three-year period starting from April 1, 2020. The Plan is explained below. The Medium-term Management Plan is situated to cover the initial 3 years of our medium- to long-term strategy based on our outlook for changes in the external environment over the next 10 years, up until 2030, subtitled "Sustainable Growth 2030".

1．Our Corporate Goal based on our outlook in Ten Years

• • We see six issues about mega trends and global structural changes coming to the fore over the next ten years, namely: "rapid advancement of urbanization", "climate change and resource shortage", "demographic change", "shift in global economic power", "technology advancement", and "multipolarizing world".
• In view of the changes we foresee in the medium- to long-term external environment, we are seeing many "shared issues of international society" and "operational issues at customers". To solve these, what we are aiming for "enhancement of corporate value", "sustainable growth", and "solutions of societal issues" by focusing on value creation by leveraging our financial capital and non-financial capital (intellectual capital, manufacturing capital, social capital, natural capital, human capital, etc.). Based on the above understanding, we set our corporate goal in ten years as below.
• 1. To enhance corporate value by deploying business utilizing asset value creation1 and continuing the provision of new value beyond leasing business
  2. To aim for sustainable growth by developing business in new domains, continuously enhancing the quality and earning power of asset business and increasing investment capacity
  3. All company and group members act from a strong sense of vocation and contribute to solve societal issues centering on asset business

(Note 1) "Asset value creation" is the capacity to improve the business competitiveness of customers and business partners by creating and continuously providing valuable services and taking the initiative in clearing their business obstacles.

"Asset" of "asset value creation" includes intangible assets such as computerized assets (software, database), innovative assets (R&D, license) and economic competitiveness (human resources, organization).

2．Management Strategy

• This Medium-term Management Plan is positioned to cover the initial three years of our medium- to long-term strategy incorporating changes in the external environment over a 10- year time frame. We rotate the full-year PDCA cycle by periodically verifying the 10-year environmental and strategic outlook, 3-yearMedium-term Management Plan and individual fiscal-year plan, and implement the strategy with agility and flexibility.
• As an asset-business platform company with an ability to create asset value, we focus our resources on domains involving solutions to social issues, including the field of global assets, social infrastructure, and renewable energy.
• We work on strengthening the "resources to raise competitiveness" necessary for realizing our management strategies and establish a "supporting mechanism" to enforce strategic progress for 10 years, 3 years, and 1 year.

(1) Asset-Business Platform Company

• Our strengths are "customer base", which ranges from large to small and medium-sized companies, "financial base", underpinned by strong credit ratings and "asset business insights" accumulated through lease business.
• We aim to create "an asset business platform company" that can monetize asset values by increasing businesses utilizing "asset value creation" based on our business strengths.

(2) Focus areas

• We identify global social needs arising along with mega global trends.
• We contribute to the solution of medium- to long-term societal issues by focusing on three business domains: "global assets" where we already have a strong position by fulfilling global demand in land, sea and air logistics, "social infrastructure", where we invest in existing demand in developed countries and new demands of emerging countries, and
  "renewable energy" which is to address resource shortage issues.

Global Assets

Social Infrastructure

Renewable Energy

・ Focus on logistics assets

・ Focus on social infrastructure

・ Place an emphasis on

with high marketability and

for industries and life

renewable energy, and also

value in the global market

services in and outside Japan

target energy creation,

・ Use of expertise in operating

・ Use of expertise in real estate

storage and conservation

leases to develop

financing to develop

・ Shift from project investment

comprehensive mobility

infrastructure management

and loan to joint business

services including

and investment businesses

with strategic companies

maintenance and mobility

・ Plan to participate in

・ Promote energy solution

lease

community development

business going forward

・ Plan to provide one-stop

business

solutions for logistics

business going forward

Automobile

Mobility services

Logistics facility

Hotel

Solar Power

Energy services

Maritime

Rail car

Office

Medical facility

Biomass

Wind power

containers

Aviation

Aircraft Engines

High speed railway

Power transmission

Battery

Distributed power

(3) Resources to Raise Competitiveness

• As resources to raise competitiveness for realization of our management strategy, we are focusing on and strengthening "HR Enhancement and Efficient Use", "Consolidated Global Management" and "Promotion of Collaboration with Partners."

(4) Supporting Mechanism

• We intend to establish a supporting mechanism that rotate PDCA cycle by linking (1) corporate administrative theme (financial operations and risk management) which consists of operational strategy, asset allocation / management foundation and other measures per division along with (2) cross-divisional themes such as investment strategy, portfolio management, digitalization strategy, and others.

3．Management Plan

• We aim to boost returns by promoting strategic investments and asset turnover businesses, while accumulating blue-chip assets and substituting out less profitable assets.
• We seek to secure a favorable balance between capital adequacy ratio and shareholders return through dividend payment and plan to maintain dividend payout ratio at 30% level based on our track record of increased dividend payment for 20 consecutive fiscal years.

	Purpose	Numerical guidance
		Net income
	Profit	attributable	85 billion yen
Quantitative targets for the Final Year	growth	to owners of	or more
	the parent
of Medium-term Management Plan
Asset		Approximately
(FY2022)	ROA
efficiency	1.3%
	Shareholder	Dividend	Keep at 30% level
	return	Payout
Medium- to long-term directionality	Capital	ROE	10~12%
(3-5 years)	efficiency

Attachment: Medium-term Management Plan ~Sustainable Growth 2030~

END

New Medium-term

Management Plan (FY2020~2022)

~Sustainable Growth 2030~

March 12, 2020

Mitsubishi UFJ Lease & Finance

Index

1. Review of Current Medium-term Management Plan (FY2017~2019)
2. External Environment
3. Corporate Goal in 10 years
4. Management Strategy
5. Management Plan
6. Value Creation Process

2

1. Review of Current Medium-term Management Plan (FY2017~2019)

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Mitsubishi UFJ Lease & Finance

Review of Current Medium-term Management Plan (FY2017~2019)

Achievements of Numerical Targets
	Declared Target of
	Current Medium-term
	Management Plan	FY2016 Actual	FY2017 Actual	FY2018 Actual	FY2019 Forecast
Net Income1	63 billion yen or more	53.1 billion yen	63.6 billion yen	68.7 billion yen	70.0 billion yen
ROA	1.1% or more	1.01%	1.16%	1.21%	1.17%

(Note)1. Net income attributable to owners of the parent

Major Achievements of Current Medium-term Management Plan

• Progress in conversion of asset turnover business in mainstays aviation and real estate, and improving business performance thanks to increase in gains on sales and other measures

Growth Strategy  Substitution in business portfolio with more focus on growth and profitability

(Reorganization of Japanese group companies, M&A/capital and business alliance deals and others, including ENGS Holdings Inc. and MUL Railcars, Inc.)

Business

Infrastructure

Reinforcement

Strategy

• Increased foreign-currency fund raising capacity underpinned by the first bond issuance in the US under the form of 144a/Regulation S
• Building PDCA process for investment deals matching acceleration in business participation and business operations (including new establishment of the Investment Management Division, and other measures)
• Stimulation of Workplace Enhancement Project, by taking such measures as readjustment to our human resources system, introduction of a work-at-home setup, and use of RPA (Robotics Process Automation)

Business Operation	 Full-fledged launch of newly introduced business division system
System

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Mitsubishi UFJ Lease & Finance

Review of Current Medium-term Management Plan (FY2017~2019) (by Division)

	Major Achievements
	 Industrial marketing: Progress in collaborative efforts with partner companies. Area marketing: Promotion of
Domestic Customer	efficiencies via clarification of operational functions
Business	 Reorganization of group companies in Japan (deconsolidation of MMC Diamond Finance, Shinko Lease, and
	Techno Rent, etc.)
Overseas Customer	 Growth in business with local and multi-national companies while maintaining foundation of business with
Japanese companies
Business
 Acquisition of ENGS Holdings Inc. in US, establishment of car auction JV in Indonesia with BlueBird
	 Stake in INAV, a US-based aircraft engine part-out company, and new business development (direct orders to
Aviation Business Division	aircraft manufacturers)
	 Diversification of foreign-currency fund raising (Issuance of private-placement bonds)
Real Estate Business	 Reinforcement of real estate revitalization business. Expansion of asset management business. Increased
investment in logistics development
Division
 Increased investment and loans of US real estate
Logistics Business	 BIL (Beacon Intermodal Leasing, LLC: marine container) achieved to become 6th in the world with 1.3 million
TEU1
Division
 MULR (MUL Railcars, Inc.: rail cars): Converted to staffed office and expanded business scope
Environment & Energy	 Accumulation of solar power related investment projects. Started turnover of assets by strategically selling off
businesses
Business Division
 Entry into the biomass field and investment in on-shore wind power deals in Japan for both
Healthcare Business	 Field of recovery and rehabilitation chosen as a core focus
Division	 Increased investment in funds established by HMP (Healthcare Management Partners)
Infrastructure & Investment	 Launch of overseas infrastructure together with JII (Japan Infrastructure Investment)
Business Division	 Participation in [Germany] submarine power transmission, [Ireland] onshore wind power, [UK] offshore wind
power, water works, high-speed railway, and [USA] dispersion-type solar power distribution system

(Note)1. Converted into 20-foot containers

5

2. External Environment

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Mitsubishi UFJ Lease & Finance

External Environment

Mega Global Trends

Rapid Advancement of Urbanization

• Emergence of new cities in newly developing countries
• Necessity of large scale investment in smart infrastructure

Shift in Global Economic Power

• Change in economic structure influencing global economy and business activities
• Rapid expansion of capital flow between emerging countries

Climate Change and

Resource Shortage

• Aggravation of impact that climate change and resource shortage have on society and economy

Technology Advancement

• New investment opportunities to increase in cutting-edge technologies such as nanotechnology, experiencing quantum leaps, and other R&D fields

Demographic Change

• Rapid growth in population in certain areas while concurrent decline seen in other areas
• Resource shortage and change in common social practices due to economic power shift

Multipolarizing World

• Transformation of international order and relations based on free market and democracy
• Complexity in geopolitical risks

7

3. Corporate Goal in 10 years

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Mitsubishi UFJ Lease & Finance

Corporate Goal in 10 years

• Foresee medium- and long-term changes in the external environment and aim to solve diverse issues such as "Shared issues of international society" and "Operational issues at Customers" (collectively "societal issues", below). Achieve "corporate value enhancement", "sustainable growth" and "solutions to societal issues" by focusing on value creation in financial capital and non-financial capital1

Implement strategy Contributing to

Solve Social Issues

Shared Issues of

International Society

Value creation of financial capital and non-financial capital

Operational Issues at Customers

Our Corporate Goal

Achieve Management Vision

Enhancement of Corporate Value

Sustainable Growth

Resolution of Societal Issues

1. To enhance corporate value by deploying business utilizing asset value creation2 and continuing the provision of new value beyond leasing business
2. To aim for sustainable growth by developing business in new domains, continuously enhancing the quality and earning power of asset business and increasing investment capacity
3. All company and group members act from a strong sense of vocation and contribute to solve societal issues centering on asset business

(Note) 1. Non-financial capital includes intellectual capital, manufacturing capital, social capital, natural capital, human capital, etc.

2. "Asset value creation" is the capacity to improve the business competitiveness of customers and business partners by creating and continuously providing valuable services and taking the initiative in clearing their business obstacles. Asset of "asset value creation" includes intangible assets such as computerized assets (software, database), innovative assets (R&D, license) and economic competitiveness (human resources, organization)

9

4. Management Strategy

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Mitsubishi UFJ Lease & Finance

Management Strategy (Overall View)

• The medium-term management plan (FY2020~2022) consists of the first 3 years of our medium- to long-term strategy incorporating changes in the external environment over a 10-year timeframe. We plan to periodically verify the 10-year environmental and strategic
  outlook ↔ 3-yearmedium-term management plan ↔ Individual fiscal-year plan, and implement the strategy with agility and flexibility
• As an asset-business platform company with an ability to create asset value, we are focusing our resources on domains involving solutions to social issues, including the field of global assets, social infrastructure, and renewable energy [Details on slide 12-13]
• To strengthen the "resources to raise competitiveness" necessary for realizing the management strategy and streamline the "supporting mechanism" to evolve the 10-year ↔ 3-year ↔ individual fiscal year plan [Details on slides 14]

	Mega Global Trends		SDGs

	Solve Shared Issues of International Society				Solve Customer Operational Issues
	Medium-andLong-term Strategy					Management Vision
	For Next 10 Years			Enhance		Sustainable Growth		Resolve
			Corporate Value			Societal Issues

Initial	Medium-term Management Plan
(Sustainable Growth 2030)
3 Years
	Asset-Business Platform Company
Global Assets	Social Infrastructure	Renewable Energy
Resources to Raise Competitiveness	Supporting Mechanism

Each Fiscal Year	Individual Fiscal-Year Plan

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Mitsubishi UFJ Lease & Finance

Management Strategy (Concept of Business Model)

• Continue the promotion of "integration of finance and business" implemented under the current medium-term management plan
• Aim to create "an asset business platform company" that can monetize asset values by increasing businesses utilizing "asset value creation" based on all-MUL strengths
• Clarify an asset business platform that has a clear mechanism to "provide and deliver value" and "make money," enhance profitability and sustainability, and sophisticate 8 business functions by utilizing our asset business insights in a bid to add value to our services by combining business functions

			MUL's Advantages
	Customer Base		Asset Business Insights		Financial Base

Asset Holder

Asset Value Creation

8 Business Functions

Acquisition

Development

Possession

Rent

Management

Maintenance

Operation

Sale

	Asset Business Platform Company
Asset Utilization	Provision of Asset	Asset Investment	Asset-based	Asset-related
Business	Utilization Value	and Loan	Financial Solution	Services
New Business	Growth Business	Core Business	Function
Enhancement

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Mitsubishi UFJ Lease & Finance

Management Strategy (Focus Areas)

• Presence of global social needs such as SDGs along with mega global trends
• Contribute to the solutions of medium- and long-term societal issues by making all-MUL efforts in three business domains: "global asset" where we already have a strong position by fulfilling global demand in land, sea and air logistics, "social infrastructure" where MUL invests in existing demands of developed countries and new demands of emerging countries, and "renewable energy" which is to address resource shortage issues

			Mega Global Trends
		Rapid		Climate Change		Demographic
			and Resource
		Urbanization			Change
			Shortage
		Shift in Global		Technology		Multipolarizing
		Economic Power		Advancement		World

	Solve Shared Issues of International Society		Solve Customer Operational Issues

Global Assets

• Focus on logistics assets with high marketability and value in the global market
• Use of expertise in operating leases to develop comprehensive mobility services including maintenance and mobility lease
• Plan to provide one-stop solutions for logistics business going forward

Automobile		Mobility Services
Marine Container		Rail Car
Aviation		Aircraft Engine

Social Infrastructure

• Focus on social infrastructure for industries and life services in and outside Japan
• Use of expertise in real estate financing to develop infrastructure management and investment businesses
• Plan to participate in community development business

Logistics Facility		Hotel
Office		Medical Facility
High Speed Railway		Power Transmission

Renewable Energy

• Place an emphasis on renewable energy, and also target energy creation, storage and conservation
• Shift from project investment and loan to joint business with strategic partners
• Promote energy solution business going forward

Solar Power		Energy Services
Biomass		Wind Power
Battery		Distributed Power

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Mitsubishi UFJ Lease & Finance

Management Strategy (Resources to Raise Competitiveness, Supporting Mechanism)

Resources to Raise Competitiveness

HR Enhancement and Efficient Use

• HR enhancement
  (hiring, career development, sophistication of personnel-system)
• Efficient use of HR
  (revision of career path and job requirements)
• Group-wideHR management
  (shared HR platform and group-wide staff allocation strategy)

Global Consolidated Management

• A shared philosophy for consolidated management
• • Establish a framework where each domestic and overseas company can inject energy into business promotion aligned with the division strategy by sharing a management vision for the Group as a whole, unifying management infrastructure, and effective leveraging management resources. Maximize our performance through whole- company efforts for group synergies
• Linking corporate functions between domestic and overseas group companies

Promotion of Collaboration with Partners

• Promotion of collaboration with various partner companies

Supporting Mechanism

• To periodically verify 1. external environment outlook over a timeframe of 10 years and medium- to long-term strategies,
  2. three-yearmedium-term management strategy, and 3. annual strategy for each fiscal year and to evolve strategy by implementing PDCA cycle
• We intend to establish a supporting mechanism that rotate PDCA cycle by linking (1) corporate administrative theme (financial operations and risk management) which consists of operational strategy, asset allocation / management foundation and other measures per division along with (2) cross-divisional themes such as investment strategy, portfolio management, digitalization strategy, and others

									Cross-Divisional
					Management
								Theme
	Operational				Strategy
							Investment
	Strategy per
								Strategy
	Division				Management
					Plan
								Portfolio
					Corporate			Management
							Digitalization
					Administrative
							Strategy
					Theme
									・
					Financial
								・
					Operations				・

Risk

Management

・

・

・

14

5. Management Plan

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Mitsubishi UFJ Lease & Finance

Management Plan (Company Targets)

• Aim to boost returns by promoting strategic investments and asset turnover businesses, while accumulating blue-chip assets and substituting out less profitable assets
• Seek to secure a favorable balance between capital adequacy ratio and shareholders return through dividend payment and plan to maintain dividend payout ratio at 30% level based on our track record of increased dividend payment for 20 consecutive fiscal years
• Enhance corporate value and deliver sustainable growth by increasing ROE over the medium- and long-term while firmly maintaining financial soundness and paying attention to capital efficiency

PurposeNumerical Guidance

	Profit growth	Net Income1	85 billion yen or more
Quantitative Targets for Final Year of	Asset efficiency	ROA	Approximately 1.3%
Medium-term Management Plan
(FY2022)
Shareholders return	Dividend	Keep 30% level
	Payout
Medium- to Long-term Directionality	Capital efficiency	ROE	10~12%
(3-5 Years)

(Reference) FY2019 Forecast

Net Income1

70 billion yen

ROA1.2%

Dividend

Payout31.8%

ROE9.0%

				Net Income1
		One-time impact of U.S. Tax Reform			85 billion yen or more
	(Billion yen)		68.7	70.0
				2.1
			63.6	4.3
53.1	8.4
		67.9
				64.4
			55.2
		FY2016	FY2017	FY2018	FY2019		FY2022
(Note)1. Net income attributable to owners of the parent		(Forecast)

16

Mitsubishi UFJ Lease & Finance

Management Plan (Business Strategy by Division: Part 1)

Customer Business (Domestic)

• Existing Business: Optimization of asset portfolio by gradually decreasing less profitable assets, such as loans and installment sales, and substituting with higher profitable assets of growth business area
• Growth Business Area: Accelerate collaborative businesses creating new demand with major corporate partners through enhanced concentration and selection of industry

Customer Business (Overseas)

• Existing overseas branches: Enhance efficiencies through business digitalization, review of branch business scopes, and other measures
• Strengthen operations in the Americas by expanding ENGS
  Holdings Inc.'s business, entrance into emerging markets
• Emerging markets: Unearth business through collaboration with local partners

Aviation Business Division

• Aircraft and engine lease business: Expansion of existing business via acquisition of portfolio and other measures; acquisition of large-scale sales and lease back deals through collaboration with investors
• Development and start of operations by utilizing our expertise in 1. aircraft leasing (Jackson Square Aviation), 2. aircraft engine leasing (Engine Lease Finance Corporation) and 3. Japanese Operating Lease (JOL), expanding our targeted assets, reinforcing functions of asset management operations, etc.

17

Real Estate Business Division

• Finance business in Japan: Functional sophistication to improve profitability by maintaining stable earnings stream at the same time
• Real estate business in Japan: Reinforcement of such functions as investment, development, reconstruction, and asset management
• Overseas real estate business: Expansion of real estate securitization finance with a focus on the US

Mitsubishi UFJ Lease & Finance

Management Plan (Business Strategy by Division: Part 2)

Logistics Business Division

• Mobility: Create new businesses through collaboration with partners by integrating our loan finance capability in which we have competitive advantage, customer base, and others
• Rail Cars in North America (MUL Railcars, Inc.): Increase number of railcars to 25,000 and aim to become one of the ten majors in the industry
• Marine Containers (Beacon Intermodal Leasing, LLC): Improve profitability by bolstering structure of resale business

Environment & Energy Business Division

• Enhancement of renewable energy business through strategic investments
• Buildup of alliances with strategic partners in the fields of utility and others ahead of the coming end of feed-in tariff scheme in Japan
• Expansion of renewable energy business in overseas markets (ASEAN, etc.)

Healthcare Business Division

• Field of recovery and rehabilitation: Expansion of asset under management through the launch of a new fund by Healthcare Management Partners, entry into the advanced rehabilitation fields through cross-industrial collaboration, etc.
• Expansion of operational area such as financing of medical equipment on the overseas market through alliances with leading partners

Infrastructure & Investment Business Division

• Overseas Infrastructure: Accumulation of high quality assets and pursuit of higher profitability through business collaboration with top companies within the business fields in focus and other measures
• Business Investment: Measures aimed at expanding revenue opportunities by providing loan/equity finance to companies based on their business stage

18

6. Value Creation Process

19

Mitsubishi UFJ Lease & Finance

Value Creation Process

Management Vision

Enhance Corporate Value

Sustainable Growth

Resolve Societal Issues

Input		Business Activity			Output			Outcome
	PlatformCompany	Asset Utilization			Global Assets			Customers	Financial
Capital	Business							Capital
Provision of						Employees
		Asset-Use Value						Intellectual
				Social Infrastructure
Financial-Non+CapitalFinancial								Capital
RaisetoResources Competitiveness		Supporting	Mechanism		IssuesSocietalResolve	EngagementStakeholder
Asset Investment		Suppliers/
		and Loan
	Business						Partner
	Asset-Style						Companies	Manufacturing
								Capital
		Financial Solutions
			Renewable Energy			Local
	Asset							Societies
	Asset-Related Services						Social
									Capital
								Shareholders
		HR enhancement and			Corporate Administration
								Natural
		efficient use
								Bond	Capital
		Global consolidated						Investors
		management
		Promotion of collaboration						Financial	Human
							Capital
		with partners						Institutions
		~Sustainable Growth 2030~

External Environment (Megatrends / SDGs)

20

Mitsubishi UFJ Lease & Finance

Inquiries

Inquiries

• Corporate Communications Department TEL [phone]

Corporate Communications Department

• https://www.lf.mufg.jp/english/

21

This presentation contains forward-looking statements regarding estimations, forecasts, targets and plans in relation to the results of operations, financial conditions and other overall management of MUL 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 from the 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 MUL at the time 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, and management 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. MUL undertakes no obligation to update or correct any forward-looking statements after the date of this 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.