Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — FY2014 Earnings Presentation
40 slides from Nippon Paint's earnings presentation, May 22, 2015
Slide 1: Mid-term Management Plan
Fiscal Year 2014 Nippon Paint Holdings group Mid-term Management Plan May 22, 2015
Slide 2: Intentionally Blank
Intentionally Blank 2 FY2014 Analysts‘ Meeting
Slide 3: INDEX
INDEX 1. Review of SC I ～ II ････････････ 4 2. Position of SC III ････････････ 7 3. New vision ････････････ 8 4. Global Share Position ････････････ 9 5. Goal ････････････ 10 6. Mid-term Management Plan ････････････ 11 7. Financial strategy ････････････ 19 8. IFRS adaption ････････････ 20 9. to be a
Slide 4: Review of SC I ～ II
Review of SC I ～ II 4 FY2014 Analysts‘ Meeting
Slide 5: Successful result of profitability and efficiency
Review of SC I ～ II Successful result of profitability and efficiency (Billions of Yen) 3,000 280 Consolidated net sales 27.6% Consolidated operating income 260.6 260.6 270 Actual SGA ratio in Japan segment 2,500 227.4 233.4 222.3 216.5 260 26.0% 2,000 25.1% 250 24.1% 1,500 240 33.4 33.8 230 1,000 2
Slide 6: Established solid profitability in Japan segment
Review of SC I ～ II Established solid profitability in Japan segment (Billions of Yen) Japan segment Consolidated ＦＹ２００８ ＦＹ２０１４ ＦＹ２００８ ＦＹ２０１４ ※1 Sales 199.1 ※1 200.6 239.6 260.6 ※2 Operating Profit 3.0 26.4 ※2 3.1 33.8 OP margin 1.5% 13.2% 1.3% 13.0% SGA ratio 27.7% 21.8% ※1 Including internal trans
Slide 7: Position of SC III: Period to realize both growth and profitability
Position of SC III -1 Period to realize both growth and profitability 7 FY2014 Analysts‘ Meeting
Slide 8: New Vision
New Vision Altered Vision to start Mid-term Management Plan • We will deliver satisfaction and deep impression to our customers by providing excellent specialty chemicals products and services, centering coatings technology • We will grow globally based on respect for the cultures and values of enti
Slide 9: Global Market Position
Global Market Position Room for challenges, yet powerful competitors exist Sales by business segment in FY2014 (Nippon Paint HD estimate) Market share FY2014 (Trillions of Yen) #4 # 6-7 #4 9 FY2014 Analysts‘ Meeting
Slide 10: Goal: Global Paint Major
Goal Global Paint Major <Nippon Paint HD definition> Attain Leading Position* globally in paint & coatings and related businesses Leading Position: among the top 3 position in sales of each business segment 10 FY2014 Analysts‘ Meeting
Slide 11: Mid-term Management Plan "Future Pull"
Mid-term Management Plan 1 “ Future Pull ” Ideal state in 3 years towards future goal Goal(Big Picture) ＝ Global Paint Major ↓ 2017～ Goal in 3 years from now, based on Big Picture perspective = Certain fulfilment ↓ 2016 Review the plan in accordance with environmental changes (rolling) ↓ 2015 Pictur
Slide 12: Primary & Important domains
Mid-term Management Plan 2 Primary & Important domains Business Japan China Other Asia Americas Europe Decorative ◎ ◎ ◎ Industrial ◎ ○ Heavy Duty / Marine ◎ ◎ ○ Automotive ◎ ○ ○ ○ Surface treatment ◎ ◎ ◎：Primary domains, ○：Importanto domains 12 FY2014 Analysts‘ Meeting
Slide 13: China: Presence and Goal in 2017
Mid-term Management Plan 3 China: Presence and Goal in 2017 Create the foundation to be dominant at primary market, China (Billions of Yen) 16％ Decorative #1 ➡ To be Dominant (“Dantotsu”) #1 4％ Industrial #2 group ➡ To surpass the #2 group 14％ Automotive #5 ➡ To be among top 3 (Expand shares in Chin
Slide 14: China: Driving Force for the growth
China: Driving Force for the growth Create the foundation to be dominant at primary market, China Expanding business area by aggressive M&A to get a dominant position as “Decorative No1”, including Floor and Wood paint segment Boost “repaint demand” and capture demand through new channels Aggr
Slide 15: Established main operating companies
Established 4 main operating companies Company split-up for the purpose of setting appropriate strategy and quick action to primary domain <Purpose of transferring to Holdings> Portfolio management Optimum resource allocation to group companies Governance in group companies Establish foundation
Slide 16: Mid-term Management Plan by region
Mid-term Management Plan 4 by region Further focus on Asia region, changing business structure dramatically! 16 FY2014 Analysts‘ Meeting
Slide 17: Mid-term Management Plan by business segment
Mid-term Management Plan 5 by business segment Shift to high-growth and profitable Decorative, changing portfolio drastically ! 17 FY2014 Analysts‘ Meeting
Slide 18: Mid-term Management Plan Target
Mid-term Management Plan 6 Target ROE Over 10% 9.7% ※ Sales growth rate Over 10% Among the top 3 position in each business segment ※Excluding extraordinary income, 148.8 billion yen, from Net income. 18 FY2014 Analysts‘ Meeting
Slide 19: Financial Strategy
Financial Strategy Fund generation Cash flow from operating ・Aim to create over 200 billion yen in three years net cash flow activities ・Aim to achieve over 15% in operating income margin by increasing profit ・Loans or borrowing facility for growth strategy Funding (targeting EBITDA ratio up to 1.5,
Slide 20: IFRS adaption
IFRS adaption Plan to disclose Securities Report, based on IFRS from FY2018 To improve management quality with actions, such as appropriate and immediate reorganization, by unifying globally evaluation for operation To reinforce governance and improve operation efficiency by standardization of f
Slide 21: to be a Global Paint Major
to be a Global Paint Major Future Lead the Global Paint Major global market Expand growth 2020 Attain Leading Position globally in paint & coatings and related businesses (Long-term) Create foundation 2017 (Mid-term) Establishes the Construct foundation for the 2014 footing for growth, by attaining
Slide 22: Intentionally Blank
Intentionally Blank 22 FY2014 Analysts‘ Meeting
Slide 23: Forward-looking statements
The forward-looking statements in this document are based on information available at the time of preparation and involve inherent risks and uncertainties. Accordingly, the actual results and performance of Nippon Paint Holdings Co., Ltd. and the Nippon Paint Holdings Group may be significantly diff
Slide 24: Supplement
〈Supplement〉 ※Significant changes in financial results of FY2015 by the acquisition of equity-method affiliates in Asia 24 FY2014 Analysts‘ Meeting
Slide 25: Consolidated Financial Results
Consolidated Financial Results 【Conslidated PL】 (100 million Yen) ※1 Actual gap excluding the effect of exchange rate fluctuations, business sale of Powder FY2014 vs FY2013 coating unit in North America(November, 2013), and transferring Decorative paint Results business in Thailand to equity method
Slide 26: Operating income gap analysis FY2014 vs FY2013
Operating income Gap Analysis in FY2014 vs FY2013 (100 million Yen) Operating income for FY2013 333.9 (Japan: 270.2, Otverseas etc.: 63.7) Change by segment Change in Change in Net sales ▲18.8 Japan ※2 Non-consolidated company Selling prices correction +2.6 Japan segment Details of change by factor
Slide 27: Consolidated Financial Forecast
Consolidated Financial Forecast 【Conslidated Financial Forecast】 (100 million Yen) ※2 Excludes 148.8 billion yen as Extraordinary income in FY2014. vs FY2014 ※3 Actual effect of additional consolidation which excludes. Newly Newly consolidation adjustment. FY2015 Exsisting consolidated consolidated
Slide 28: Operating income forecast and gap analysis FY2015 vs FY2014
Operating income Forecast and Gap Analysis in FY2015 vs FY2014 (100 million Yen) Operating income for FY2014 337.5 (Japan: 264.1, Asia: 45.3, others: 28.1) Change by segment Change Change in Net sales +3.7 in Japan ※2 Non-consolidated company Selling prices correction ▲6.4 Japan segment Raw matieral
Slide 29: Consolidated Financial Results
Consolidated Financial Results FY2011 FY2012 FY2013 FY2014 FY2015 Full-year 1H Full-year 1H Full-year 1H Full-year 1H Full-year 1H forecast forecast Net sales 1,068.3 2,222.6 1,193.3 2,333.8 1,269.0 2,605.8 1,272.5 2,605.9 2660 5600 ※1 ※1 Operating income 50.2 163.2 135.5 258.6 165.5 333.9 156.9 337
Slide 30: Consolidated Sales and Incomes by Region
Consolidated Sales and Incomes by Region （100 million Yen) FY2011 FY2012 FY2013 FY2014 FY2015 Full-year 1H Full-year 1H Full-year 1H Full-year 1H Full-year 1H forecast forecast Japan Net sales 822.0 1723.3 895.8 1745.2 909.1 1874.8 916.3 1872.0 885 1800 ※1 ※1 ※1 Operating income 47.9 152.7 116.9 224
Slide 31: Consolidated Net Sales by Business Segment
Consolidated Net Sales by Business Segment (100 million Yen) FY2011 FY2012 FY2013 FY2014 FY2015 Full-year 1H Full-year 1H Full-year 1H Full-year 1H Full-year 1H forecast forecast Automotive coatings 328.7 724.1 414.7 812.9 457.4 925.1 450.9 933.5 670 1435 Decorative 191.9 397.6 220.0 437.7 243.4 500
Slide 32: Consolidated Net Sales by Business Segment: Japan
Consolidated Net Sales by Business Segment Japan (100 million Yen) FY2011 FY2012 FY2013 FY2014 FY2015 Full-year 1H Full-year 1H Full-year 1H Full-year 1H Full-year 1H forecast forecast Automotive coatings 176.8 415.5 224.7 428.2 217.8 444.3 218.9 446.0 215 440 Decorative 173.1 363.2 198.2 395.0 215.
Slide 33: Consolidated Net Sales by Business Segment: Asia
Consolidated Net Sales by Business Segment Asia (100 million Yen) FY2011 FY2012 FY2013 FY2014 FY2015 Full-year 1H Full-year 1H Full-year 1H Full-year 1H Full-year 1H forecast forecast Automotive coatings 73.9 143.8 84.5 179.1 111.7 222.6 102.6 212.6 286 615 Decorative 18.8 34.4 21.8 42.7 27.6 53.7 2
Slide 34: Capital Expenditure, Depreciation, R&D Expenses
Consolidated Capital Expenditure, Depreciation, R&D Expenses (100 million Yen) FY2011 FY2012 FY2013 FY2014 FY2015 Full-year 1H Full-year 1H Full-year 1H Full-year 1H Full-year forecast Capital Expenditure 18.9 35.5 27.2 51.1 27.8 59.8 23.3 51.3 215 Depreciation 37.5 75.3 31.7 64.2 30.0 61.1 29.3 59.
Slide 35: Consolidated Cash Flows
Consolidated Cash Flows (100 million Yen) FY2011 FY2012 FY2013 FY2014 1H Full-year 1H Full-year 1H Full-year 1H Full-year Cash flows from 21.6 224.8 101.8 318.5 75.5 269.2 145.8 344.2 operating activities Cash flows from -14.0 -37.1 -26.2 -69.2 -29.2 -71.7 -20.7 -869.7 investing activities Cash flow
Slide 36: Foreign Exchange Rates (Term Average)
Foreign Exchange Rates(Term Average) (Yen) FY2011 FY2012 FY2013 FY2014 FY2015 Full-year 1H Full-year 1H Full-year 1H Full-year 1H Full-year forecast US Dollar 81.8 79.7 79.8 80.1 95.9 98.0 102.2 106.4 119.2 Chinese Yuan 13.0 12.9 12.6 12.7 15.5 16.0 16.6 17.2 19.0 Thai Baht 2.77 2.68 2.56 2.58 3.20
Slide 37: Main Consolidated Indicators
Main Consolidated Indicators FY2011 FY2012 FY2013 FY2014 1H Full-year 1H Full-year 1H Full-year 1H Full-year Gross profit margin(%) 31.6 33.0 34.7 35.2 36.4 35.9 35.8 35.5 Operating income margin(%) 4.7 7.3 11.4 11.1 13.0 12.8 12.3 13.0 Ordinary income margin(%) 6.1 9.1 12.3 14.1 17.9 18.0 17.9 18.9
Slide 38: Market Conditions: Japan-Produced Naphtha Prices
Market Conditions: Japan-Produced Naphtha Prices （Yen/KL） 1Q 2Q 3Q 4Q FY2011 59,000 54,900 51,700 54,100 FY2012 60,600 49,800 55,800 63,800 FY2013 65,500 63,900 67,800 72,000 FY2014 69,900 70,900 66,000 47,000 FY2015 ※ 47,000 ※ The figure of FY 2015 is the Company’s estimate. 38 FY2014 Analysts‘ Mee
Slide 39: Market Conditions: Automobiles Produced in Japan
Market Conditions: the Number of Automobiles Produced in Japan （10,000 units） 1H 2H Full-year FY2011 390 537 927 FY2012 490 465 955 FY2013 474 517 991 FY2014 478 481 959 FY2015 ※ 940 ※ The figure of FY 2015 is the Company’s estimate. 39 FY2014 Analysts‘ Meeting
Slide 40: Forward-looking statements
The forward-looking statements in this document are based on information available at the time of preparation and involve inherent risks and uncertainties. Accordingly, the actual results and performance of Nippon Paint Holdings Co., Ltd. and the Nippon Paint Holdings Group may be significantly diff