Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — Nippon Paint Hldgs — Q3 2022 Earnings Presentation
45 slides from Nippon Paint's earnings presentation, Nov 14, 2022
Slide 1: FY2022 3Q Financial Results Presentation Material
November 14, 2022 FY2022 3Q Financial Results Selleys brand for adjacencies Presentation Material
Slide 2: Contents
□ FY2022 3Q Summary/Topics ・・・ P.3 □ Supplemental Material ・・・ P.12 1. FY2022 3Q Results: Highlights ・・・ P.13 Contents 2. FY2022 3Q Results: By Segment ・・・ P.16 3. FY2022 9M Results ・・・ P.25 (Appendix) Reference Data Disclosure policy for this document: - Both reported base (‘Tanshin’) and adjusted
Slide 3: Summary: FY2022 3Q Operating Results
1. Summary: FY2022 3Q Operating Results ◆ Tanshin basis FY2022 3Q *1 ・ Higher revenue driven by continued pricing actions mainly in decorative business, new consolidation of Cromology and JUB, and FX ・ Higher operating profit on higher revenue driven by strong pricing, despite application of hyperin
Slide 4: Raw Material Market Conditions and Our Responses
2. Raw Material Market Conditions and Our Responses Flow through of price increases continues to drive margin recovery 3Q 2022 4Q 2022 and beyond • Crude oil prices dropped to USD80-range from USD100-range due to • Japan naphtha price fell to ¥70,000-range due to concerns over economic slowdown caus
Slide 5: Market & Business Environment
3. Market & Business Environment 3Q automotive market strong in all regions due to recovery from production slump a year earlier Japan Asia (Nipsea China) Oceania Americas Europe Automotive 3Q Decorative DIY Project Automotive 4Q (outlook) Decorative DIY Project ■ Market (YoY) ■Business (vs. Market)
Slide 6: Summary of Operating Results in Major Segments
4. Summary of Operating Results in Major Segments Tanshin Non-GAAP (Billion yen) Overview 3Q 2022 YoY 3Q 2022 YoY ▶Decorative Higher revenue driven by pricing actions to respond to raw material inflation and higher sales of products for Revenue 47.2 11.7% 46.6 10.1% architectural applications ▶Autom
Slide 7: FY2022 Forecast (For Reference)
5. FY2022 Forecast (For Reference) (Billion yen) *1 Tanshin base Tanshin base (For reference) *2 <Exchange rate for P/L (average rate)> *2 FY2022 Forecast FY2021 FY2022 4Q Forecast YoY YoY FY2021 FY2022 (Calculated backward as of Aug. 10 4Q Results (Amount) (%) Full Year from FY2022 Forecast) Full Y
Slide 8: Assumptions for FY2022 Forecast (For Reference)
6. Assumptions for FY2022 Forecast (For Reference) (Billion yen) FY2021 Results (Tanshin basis) *1 FY2022 Outlook (In Local Currency) Full Year 4Q Full Year 4Q (Calculated backward from FY2022 Forecast) *2 YoY YoY YoY YoY*2 Revenue OP margin Revenue OP margin (Revenue) (OP margin) (Revenue) (OP marg
Slide 9: Major Topics ①: Integrated Report 2022
7. Major Topics ① Integrated Report 2022 (launched on Aug. 31) • Explains our medium- and long-term value creation story as we pursue Maximization of Shareholder Value (MSV) based on Asset Assembler model for accelerating growth by leveraging existing businesses and M&A • Explains our initiatives fo
Slide 10: Major Topics ②: Next Career Plan early retirement results
7. Major Topics ② Results of “Next Career Plan” voluntary early retirement program (announced on Oct. 11) • Drive transformation into a resilient organization that tackles new challenges and delivers on results speedily for recovering profitability in Japan ◆Outline of the “Next Career Plan” Target
Slide 11: Major Topics ③: Sustainable Procurement Team
7. Major Topics ③ Established Sustainable Procurement Team to reinforce our sustainability structure • In 2022, established four Global Teams based on Materiality, working directly under Co-Presidents under Asset Assembler model, to establish an autonomous sustainability structure not controlled by
Slide 12: Supplemental Material
Supplemental Material 1. FY2022 3Q Results: Highlights … P.13 2. FY2022 3Q Results: By Segment … P.16 3. FY2022 9M Results … P.25 (Appendix) Reference Data
Slide 13: 1. FY2022 3Q Results: Highlights
1. FY2022 3Q Results: Highlights 13
Slide 14: Highlights (Consolidated)
1-1．Highlights (Consolidated) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY *1 3Q 3Q (％) 3Q *1 3Q (Amount) (％) Revenue 254.5 357.9 40.6% 254.5 304.4 49.9 19.6% Operating profit 17.1 38.2 123.2% 20.2 29.1 8.9 44.4% OP margin 6.7% 10.7% 4.0pt 7.9% 9.6% - 1.
Slide 15: Highlights (by Segment)
1-2．Highlights (by Segment) Expenses related to NPCS are included in Japan segment from 1Q 2022 Results (Tanshin) Results (Non-GAAP) (Billion yen) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY *1 *1 3Q 3Q (％) 3Q 3Q (Amount) (％) Revenue 42.3 47.2 11.7% 42.3 46.6 4.3 10.1% Japan OP profit*2 1.2 1.8 50.8% 1.
Slide 16: 2. FY2022 3Q Results: By Segment
2. FY2022 3Q Results: By Segment 16
Slide 17: Revenue and Operating Profit Analysis
2-1．Revenue and Operating Profit Analysis (Billion yen) Paint and Coatings Business *1 Revenue Non-GAAP basis +19.6% (+49.9) Tanshin basis +40.6% (+103.4) *2 Operating Profit Non-GAAP basis +8.9 *1 Products included in the Paint and Coatings Business such as semi-finished products and fine chemicals
Slide 18: Japan
2-2．Japan (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 7.6 9.1 18.8% 7.6 9.1 1.4 18.8% Decorative paints 11.4 11.9 4.4% 11.4 11.9 0.5 4.4% Industrial coatings 9.6 10.2 7.2%
Slide 19: Nipsea (Nipsea China)
2-3．Nipsea (Nipsea China) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 8.6 11.9 38.8% 8.6 10.1 1.5 17.8% Decorative paints 92.1 111.9 21.5% 92.1 95.2 3.1 3.3% Revenue Indust
Slide 20: Nipsea (Nipsea Except China)
2-4．Nipsea (Nipsea Except China*1) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) *2 3Q 3Q*2 (％) 3Q 3Q (Amount) (％) Revenue 41.7 68.2 63.4% 41.7 77.2 35.5 85.0% Operating profit 4.9 8.7 77.9% 4.9 8.3 3.4 70.3% OP margin 11.7
Slide 21: PT Nipsea (Indonesia) & Betek Boya (Türkiye)
2-5．PT Nipsea (Indonesia) & Betek Boya (Tϋrkiye) Results (Tanshin) Results (Non-GAAP) (Billion yen) PT Nipsea (Indonesia) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Betek Boya (Tϋrkiye) 3Q 3Q (％) 3Q 3Q (Amount) (％) Quarterly performance (Tanshin) Quarterly performance (Tanshin) Revenue 8.1 13.6 66.6% 8
Slide 22: DuluxGroup
2-6．DuluxGroup*1 (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) 3Q 3Q (％) 3Q 3Q (Amount) (％) Decorative paints 22.0 51.4 133.2% 22.0 23.3 1.3 6.0% Industrial coatings 1.9 2.5 30.4% 1.9 2.1 0.2 11.9% Revenue Paint related bus
Slide 23: New Consolidation: Cromology (Europe) & JUB (Europe)
2-7．New Consolidation: Cromology (Europe) & JUB (Europe) Results (Tanshin) Results (Non-GAAP) (Billion yen) Cromology (Europe) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY JUB (Europe) 3Q 3Q (％) 3Q 3Q (Amount) (％) Quarterly performance (Tanshin) Quarterly performance (Tanshin) Revenue - 23.8 - - - - - Cr
Slide 24: Americas
2-8．Americas (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 5.5 9.1 64.7% 5.5 7.3 1.7 31.4% Decorative paints 13.4 17.8 32.4% 13.4 14.1 0.6 4.8% Revenue Fine chemicals 0.2 0.4
Slide 25: 3. FY2022 9M Results
((@)) NIPPON PAINT HOLDINGS CO, LTD. 3. FY2022 9M Results
Slide 26: Highlights (Consolidated) 9M
3-1．Highlights (Consolidated) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 9M *1 9M (％) 9M *1 9M (Amount) (％) Revenue 736.3 979.9 33.1% 736.0 845.6 109.6 14.9% Operating profit 66.1 82.4 24.7% 72.0 76.5 4.5 6.3% OP margin 9.0% 8.4% -0.6pt 9.8% 9.0% - -0.
Slide 27: Highlights (by Segment) 9M
3-2．Highlights (by Segment) Expenses related to NPCS are included in Japan segment from 1Q 2022 Results (Tanshin) Results (Non-GAAP) (Billion yen) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 9M *1 9M (％) 9M *1 9M (Amount) (％) Revenue 128.9 134.7 4.5% 128.9 133.4 4.5 3.5% Japan OP profit*2 8.2 4.3 -47.6%
Slide 28: Revenue and Operating Profit Analysis 9M
3-3．Revenue and Operating Profit Analysis (Billion yen) Paint and Coatings Business *1 Revenue Non-GAAP basis +14.9% (+109.6) Tanshin basis +33.1% (+243.7) *2 Operating Profit Non-GAAP basis +4.5 *1 Products included in the Paint and Coatings Business such as semi-finished products and fine chemical
Slide 29: Japan & Nipsea China
3-4．Japan & Nipsea China (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 9M 9M (％) 9M 9M (Amount) (％) Automotive coatings 26.4 25.1 -4.9% 26.4 25.1 -1.3 -4.9% Decorative paints 33.2 35.1 5.6% 33.2 35.1 1.9 5.6% Industrial coatings 28.2 29.6 5.0% 28.2 29.6 1
Slide 30: Nipsea Except China, PT Nipsea & Betek Boya
3-5．Nipsea Except China & PT Nipsea (Indonesia) & Betek Boya (Tϋrkiye) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Nipsea 9M 9M (％) 9M 9M (Amount) (％) Revenue 138.9 190.4 37.0% 138.9 211.0 72.1 51.9% Except China Operating profit OP margin 22.6 16.3% 24
Slide 31: DuluxGroup, Cromology & JUB
3-6．DuluxGroup & New Consolidation: Cromology (Europe) & JUB (Europe) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 9M 9M (％) 9M 9M (Amount) (％) Decorative paints 65.1 147.4 126.2% 65.1 68.6 3.4 5.3% Industrial coatings 5.4 6.7 24.5% 5.4 6.1 0.7 13.1% Rev
Slide 32: Americas
3-7．Americas (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 9M 9M (％) 9M 9M (Amount) (％) Automotive coatings 17.8 23.7 33.2% 17.8 20.0 2.2 12.2% Decorative paints 39.0 49.9 28.1% 39.0 42.1 3.1 8.0% Revenue Americas Fine chemicals Total 0.9 57.6 1.1 74.7 21
Slide 33: Investor Relations contact and cautionary notes
NIPPON PAINT HOLDINGS CO., LTD. Investor Relations Email: ir_kouhou@nipponpaint.jp 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 Pai
Slide 34: Reference Data
FY2022 3Q Financial Results Presentation Material Reference Data November 14, 2022 Nippon Paint Holdings Co., Ltd. ーContentsー 1. Revenue & Operating Profit Transition by Segment (Former Reportable Segment) 2 2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) 4 3. Revenue &
Slide 35: Revenue & Operating Profit Transition by Segment (Former Segments)
1. Revenue & Operating Profit Transition by Segment (Former Reportable Segment) (Billion yen) FY2018 FY2019 FY2020*1 FY2021*1 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year Automotive 11.5 11.1 10.6 12.1 45.3 11.9 11.4 11.3 10.2 44.9 10.2 5.5 8.9 10.1 34.7 10
Slide 36: Revenue & Operating Profit Transition by Segment (Former Segments, cont.)
1. Revenue & Operating Profit Transition by Segment (Former Reportable Segment) (Billion yen) FY2018 FY2019 FY2020*1 FY2021*1 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year Automotive 18.5 19.6 17.6 18.5 74.2 16.5 17.2 15.9 17.5 67.1 11.7 11.3 15.0 18.2 56.3
Slide 37: Transition by Segment (New Segments): Japan, DuluxGroup
2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) (Billion yen) FY2021*1 FY2022 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q Automotive 10.2 8.5 7.6 8.9 35.3 8.7 7.4 9.1 Decorative 9.9 11.9 11.4 12.1 45.4 10.4 12.8 11.9 Industrial 9.0 9.6 9.6 10.0 38.1 9.1 10.2 10.2 Fine chemicals 2.3 2
Slide 38: Transition by Segment (New Segments): Nipsea
2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) (Billion yen) FY2021*1 FY2022 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q Automotive 18.6 18.4 16.0 21.0 74.1 21.2 20.3 24.5 Decorative 85.5 112.2 114.4 107.4 419.5 111.8 140.2 149.7 Industrial 8.9 10.4 9.9 10.1 39.3 9.4 11.5 10.8 Fine
Slide 39: Revenue & Operating Profit Contribution from Acquired Companies
3. Revenue & Operating Profit Contribution from DuluxGroup, Cromology, JUB, Betek Boya and PT Nipsea (Billion yen) FY2019*1 FY2020*1 FY2021*1 FY2022*1 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q DuluxGroup Revenue Before 13.1 34.4 47.6 31.8 35.0 40.3 41.2 148.3 41.5 42
Slide 40: Breakdown of Adjustments (FY2021 3Q vs. FY2022 3Q): DuluxGroup
4. Breakdown of Adjustments (FY2021 3Q vs. FY2022 3Q) FY2021 3Q FY2022 3Q (Billion yen) M&A Provison New M&A Provison New Subsidy, Subsidy, FX related for bad acqui- Total FX related for bad acqui- Total etc.*1 etc.*1 expenses debt sitions expenses debt sitions Automotive - - - - - - - - - - - - Dec
Slide 41: Breakdown of Adjustments (FY2021 3Q vs. FY2022 3Q): Nipsea
4. Breakdown of Adjustments (FY2021 3Q vs. FY2022 3Q) FY2021 3Q FY2022 3Q (Billion yen) M&A Provison New M&A Provison New Subsidy, Subsidy, FX related for bad acqui- Total FX related for bad acqui- Total etc.*1 etc.*1 expenses debt sitions expenses debt sitions Automotive -0.0 - - - - -0.0 3.3 - - -
Slide 42: Breakdown of Adjustments (FY2021 9M vs. FY2022 9M): DuluxGroup
5. Breakdown of Adjustments (FY2021 9M vs. FY2022 9M) FY2021 9M FY2022 9M (Billion yen) M&A Provison New M&A Provison New Subsidy, Subsidy, FX related for bad acqui- Total FX related for bad acqui- Total etc.*1 etc.*1 expenses debt sitions expenses debt sitions Automotive - - - - - - - - - - - - Dec
Slide 43: Breakdown of Adjustments (FY2021 9M vs. FY2022 9M): Nipsea
5. Breakdown of Adjustments (FY2021 9M vs. FY2022 9M) FY2021 9M FY2022 9M (Billion yen) M&A Provison New M&A Provison New Subsidy, Subsidy, FX related for bad acqui- Total FX related for bad acqui- Total etc.*1 etc.*1 expenses debt sitions expenses debt sitions Automotive 0.0 - - - - 0.0 7.2 - - - -
Slide 44: Key Financial Data
6. Key Financial Data ＜Capital Expenditure, Depreciation, R&D Expenses> FY2021 FY2021 FY2021 FY2022 FY2022 FY2022 (Billion yen) 1Q 2Q 3Q 1Q 2Q 3Q Capital Property, plant and 8.8 10.5 12.4 11.3 11.3 13.0 Intangible assets 0.9 1.2 0.2 1.2 0.3 1.1 expenditure Total 9.7 11.7 12.6 12.6 11.6 14.1 Property
Slide 45: Key Market Data
7. Key Market Data <Paint sales volume> FY2018 FY2019 FY2020 FY2021 FY2022 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q Japan*1(10,000t) 44 43 44 47 178 43 43 43 43 172 40 36 38 42 156 40 40 40 41 161 39 39 25 *1 Source: Japan Paint Manufacturers A