Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — Nippon Paint Hldgs — Q3 2023 Earnings Presentation
48 slides from Nippon Paint's earnings presentation, Nov 14, 2023
Slide 1: FY2023 3Q Financial Results Presentation Material
Betek Boya/Dolmabahce Palace November 14, 2023 FY2023 3Q Financial Results Presentation Material
Slide 2: Contents
□ FY2023 3Q Summary/Topics ・・・ P.3 □ Supplemental Material ・・・ P.11 1. FY2023 3Q Results: Highlights ・・・ P.12 2. FY2023 3Q Results: By Segment ・・・ P.15 Contents 3. FY2023 Guidance ・・・ P.24 4. FY2023 9M Results ・・・ P.28 (Appendix) Reference Data Disclosure policy for this document: - Both reported ba
Slide 3: Summary: FY2023 3Q Operating Results
1. Summary: FY2023 3Q Operating Results –Increased Revenue/Profit with Margin Improvement *1 ◆ Tanshin FY2023 3Q • Increased revenue propelled by volume growth and pricing flow-through, primarily in decorative business • Gross profit margin improved 2.7pp YoY due to improved RMCC*2 ratio • Persisten
Slide 4: Summary: FY2023 Guidance – Upward Revision
2. Summary: FY2023 Guidance –Upward Revision for All Profit Items and Annual Dividends • Anticipate revenue growth of 10.8% compared to the previous year, in line with August guidance • Expect OP growth of 50.2%, attributed to an improved RMCC ratio, effective control of SG&A expenses, etc., FY2023
Slide 5: Raw Material Market Conditions and Our Responses
3. Raw Material Market Conditions and Our Responses Advancing margin enhancement via pricing flow-through and reduction of the RMCC ratio FY2023 3Q FY2023 4Q and beyond • Crude oil prices increased by 20% compared to June-end, attributed to ongoing OPEC+ • Anticipating the Japan naphtha price to pro
Slide 6: Market & Business Environment
4. Market & Business Environment Recovery in global automobile production expected in FY2023 DGL DGL Japan NIPSEA China Americas (Pacific)* (Europe)* Automotive FY2023 3Q Decorative TUC TUB FY2023 Automotive 4Q (outlook) Decorative TUC TUB Automotive FY2023 (outlook) Decorative TUC TUB ■ Market (YoY
Slide 7: Summary of Operating Results in Major Segments
5. Summary of Operating Results in Major Segments (Billion yen) Tanshin Non-GAAP Overview 2023 3Q YoY 2023 3Q YoY ▶Decorative Flat revenue as price increases offset the impact of delays in construction projects due to unfavorable weather and Revenue 49.7 +5.1% 49.5 +4.8% consumers’ holding off on sp
Slide 8: Major Topics (1)
6. Major Topics (1) Released Our Integrated Report 2023 on September 29 • Explain our commitment to Maximization of Shareholder Value (MSV), our sole mission, achieved through skillful assembly of assets and value-enhancing management practices • Employed a logic tree to enhance reader comprehension
Slide 9: Major Topics (2)-1: Acquisition of Alina Group
6. Major Topics (2)-1 Acquisition of Alina Group LLP, a Kazakhstani paint and dry-mix manufacturer, by NIPSEA (announced on November 13) Revenue breakdown • Alina Group LLP (value basis) • Operations centered on Kazakhstan with market presence in four Central Asia countries Others Overview of (Kazak
Slide 10: Major Topics (2)-2: Overview of Kazakhstan
6. Major Topics (2)-2 Overview of Kazakhstan Russia The strong GDP growth is expected to continue in step with population growth and urbanization GDP growth rate*1 Urbanization rate*2 • Population*1 : 19.77m (2022) (%) (%) 6 60 • GDP*1 : USD225.5bn (2022) 4 58 2 • Area : 2.72m km2 0 56 Kazakhstan -2
Slide 11: Supplemental Material
Supplemental Material 1. FY2023 3Q Results: Highlights … P.12 2. FY2023 3Q Results: By Segment … P.15 3. FY2023 Guidance … P.24 4. FY2023 9M Results … P.28 (Appendix) Reference Data
Slide 12: FY2023 3Q Results: Highlights
1. FY2023 3Q Results: Highlights 12
Slide 13: Highlights (Consolidated)
1-1．Highlights (Consolidated) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q *1 3Q (％) 3Q *1 3Q (Amount) (％) Revenue 357.9 393.0 9.8% 357.7 394.1 36.4 10.2% Operating profit 39.7 47.9 20.5% 35.5 47.7 12.1 34.1% OP margin 11.1% 12.2% 1.1pp 9.9% 12.1% - 2
Slide 14: Highlights (by Segment)
1-2．Highlights (by Segment) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q * 3Q (％) 3Q * 3Q (Amount) (％) Revenue 47.2 49.7 5.1% 47.2 49.5 2.3 4.8% Japan Operating profit 1.8 4.5 155.3% 1.8 4.5 2.8 154.6% Revenue 198.9 219.0 10.1% 198.7 228.1 29.4 14.8%
Slide 15: FY2023 3Q Results: By Segment
2. FY2023 3Q Results: By Segment 15
Slide 16: Revenue and Operating Profit Analysis
2-1．Revenue and Operating Profit Analysis (Billion yen) Paint and Coatings Business * Revenue Non-GAAP basis +10.2% (+36.4) Tanshin basis +9.8% (+35.1) Operating Profit Non-GAAP basis +12.1 *Products included in the Paint and Coatings Business such as semi-finished products and fine chemicals with u
Slide 17: Japan
2-2．Japan Results (Tanshin) Results (Non-GAAP) (Billion yen) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 9.1 10.5 16.1% 9.1 10.5 1.5 16.1% Decorative paints 11.9 12.0 0.9% 11.9 12.0 0.1 0.9% Industrial coatings 10.2 10.1 -1.5% 10.2 10.1 -0.2 -1.5% Revenue
Slide 18: NIPSEA China
2-3．NIPSEA China Results (Tanshin) Results (Non-GAAP) (Billion yen) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 11.9 13.1 10.2% 13.4 13.1 -0.3 -2.2% Decorative paints 111.9 116.6 4.2% 110.3 116.5 6.2 5.6% Revenue Industrial coatings 6.3 5.7 -10.0% 6.3 5.7
Slide 19: NIPSEA Except China
2-4．NIPSEA Except China*1 (Billion yen) Results (Tanshin) Results (Non-GAAP) *2 FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q *2 3Q *2 (％) 3Q*2 3Q*2 (Amount) (％) Revenue 68.2 83.1 21.9% 68.2 92.4 24.2 35.5% Operating profit 8.7 13.7 57.3% 8.7 14.5 5.8 66.4% OP margin 12.8% 16.5% 3.7pp 12.8% 15.7% - 2.9
Slide 20: PT Nipsea (Indonesia) & Betek Boya (Türkiye)
2-5．PT Nipsea (Indonesia) & Betek Boya (Tϋrkiye) Results (Tanshin) Results (Non-GAAP) (Billion yen) PT Nipsea (Indonesia) Betek Boya (Tϋrkiye)*2 FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Revenue 13.6 14.7 8.4% 13.6 14.4 0.8 6.2% PT Nipsea Operating profit 3.9 4.7 19.6% 3.9
Slide 21: DGL (Pacific)
2-6．DGL (Pacific) Results (Tanshin) Results (Non-GAAP) (Billion yen) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Decorative paints 27.3 29.1 6.4% 27.3 28.9 1.6 5.9% Industrial coatings 2.5 2.6 3.1% 2.5 2.6 0.1 2.4% Revenue Adjacencies business 25.2 27.5 9.2% 25.2 27.3 2.1 8.
Slide 22: DGL (Europe)
2-7．DGL (Europe)*1 Results (Tanshin) Results (Non-GAAP) (Billion yen) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Decorative paints 24.1 28.8 19.7% 24.1 25.6 1.5 6.3% Revenue Adjacencies business 5.4 7.6 39.5% 5.4 4.8 -0.6 -11.9% Total 29.5 36.3 23.3% 29.5 30.3 0.9 2.9% Oper
Slide 23: Americas
2-8．Americas Results (Tanshin) Results (Non-GAAP) (Billion yen) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 9.1 10.5 14.4% 9.1 9.8 0.6 7.1% Decorative paints 17.8 17.9 0.8% 17.8 17.1 -0.6 -3.6% Revenue Fine chemicals 0.4 0.4 18.4% 0.4 0.4 0.1 13.3% Total
Slide 24: FY2023 Guidance
((@)) NIPPON PAINT HOLDINGS CO, LTD. 3. FY2023 Guidance
Slide 25: FY2023 Guidance
3-1．FY2023 Guidance (Billion yen) Tanshin Tanshin (For reference) FY2022 FY2023 FY2022 FY2023 FY2022 Results Aug. Guidance Results Aug. Nov. 4Q 4Q Guidance YoY vs. vs. Guidance Guidance (Calculated backw ard (%) (Revised) Nov. Guidance Nov. Guidance Results*2 from Nov. Guidance) FY2022 FY2023 FY2023
Slide 26: Assumptions for FY2023 Guidance (1)
3-2．Assumptions for FY2023 Guidance (1) (For reference) (Billion yen) FY2023 Guidance (In Local Currency) FY2022 Results (Tanshin basis) Aug. Guidance Nov. Guidance YoY *1 YoY YoY*1 YoY YoY*1 Revenue OP margin (OP margin) (Revenue) (OP margin) (Revenue) (OP margin) vs. Aug. guidance Segment total 18
Slide 27: Assumptions for FY2023 Guidance (2)
3-2．Assumptions for FY2023 Guidance (2) (For reference) (Billion yen) FY2023 Guidance (In Local Currency) FY2022 Results (Tanshin basis) Aug. Guidance Nov. Guidance *1 *1 YoY YoY YoY *1 YoY YoY*1 Revenue OP margin (OP margin) (Revenue) (OP margin) (Revenue) (OP margin) vs. Aug. Guidance Segment tota
Slide 28: FY2023 9M Results
((@)) NIPPON PAINT HOLDINGS CO, LTD. 4. FY2023 9M Results
Slide 29: Highlights (Consolidated) 9M
4-1．Highlights (Consolidated) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 9M *1 9M (％) 9M *1 9M (Amount) (％) Revenue 979.9 1,085.9 10.8% 979.6 1,070.2 90.7 9.3% Operating profit 81.8 131.6 60.8% 89.5 122.1 32.5 36.3% OP margin 8.4% 12.1% 3.8pp 9.1% 11.4
Slide 30: Highlights (by Segment) 9M
4-2．Highlights (by Segment) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 9M * 9M (％) 9M * 9M (Amount) (％) Revenue 134.7 147.0 9.1% 134.7 146.4 11.7 8.7% Japan Operating profit 4.3 12.5 189.8% 4.8 12.4 7.6 157.3% Revenue 538.9 591.8 9.8% 538.6 605.5 66.9
Slide 31: Revenue and Operating Profit Analysis 9M
4-3．Revenue and Operating Profit Analysis (Billion yen) Paint and Coatings Business * Revenue Non-GAAP basis +9.3% (+90.7) Tanshin basis +10.8% (+106.0) Operating Profit Non-GAAP basis +32.5 31 *Products included in the Paint and Coatings Business such as semi-finished products and fine chemicals wi
Slide 32: Japan & NIPSEA China 9M
4-4．Japan & NIPSEA China (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 9M 9M (％) 9M 9M (Amount) (％) Automotive coatings 25.1 30.9 23.3% 25.1 30.9 5.8 23.3% Decorative paints 35.1 35.9 2.2% 35.1 35.9 0.8 2.2% Industrial coatings 29.6 29.2 -1.2% 29.6 29.2 -
Slide 33: NIPSEA Except China, PT Nipsea & Betek Boya 9M
4-5．NIPSEA Except China & PT Nipsea (Indonesia) & Betek Boya (Türkiye) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 9M 9M (％) 9M 9M (Amount) (％) NIPSEA Revenue 190.4 218.8 14.9% 190.4 238.1 47.8 25.1% Except China*1 Operating profit 24.9 36.7 47.7% 24.9
Slide 34: DGL (Pacific) & DGL (Europe) 9M
4-6．DGL (Pacific) & DGL (Europe) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 9M 9M (％) 9M 9M (Amount) (％) Decorative paints 75.5 82.3 9.1% 75.5 80.6 5.1 6.8% DGL Revenue Industrial coatings 6.7 7.0 3.8% 6.7 6.8 0.1 1.7% Adjacencies business 65.8 73.0 11
Slide 35: Americas 9M
4-7．Americas (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2022 FY2023 YoY FY2022 FY2023 YoY YoY 9M 9M (％) 9M 9M (Amount) (％) Automotive coatings 23.7 29.6 24.6% 23.7 27.0 3.2 13.7% Decorative paints 49.9 50.0 0.2% 49.9 46.4 -3.5 -7.1% Revenue Americas Fine chemicals 1.1 1.3 19.9% 1.1 1.2 0.1
Slide 36: Nippon Paint Holdings Investor Relations
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 37: Reference Data
FY2023 3Q Financial Results Presentation Material Reference Data November 14, 2023 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 38: Revenue & Operating Profit Transition by Segment (Former)
1. Revenue & Operating Profit Transition by Segment (Former Reportable Segment) (Billion yen) FY2018 FY2019 FY2020*1 FY2021*1 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 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 10.2 8.5 7.6 8.9 35.3 Deco
Slide 39: Revenue & Operating Profit Transition: Breakdown of Asia
1. Revenue & Operating Profit Transition by Segment (Former Reportable Segment) (Billion yen) FY2018 FY2019 FY2020*1 FY2021*1 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 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 18.2 18.0 15.8 20.5 72.5
Slide 40: Transition by Segment (New): DuluxGroup
2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) (Billion yen) FY2021*1 FY2022*2 FY2023 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q Automotive 10.2 8.5 7.6 8.9 35.3 8.7 7.4 9.1 10.0 35.1 10.4 10.0 10.5 Decorative 9.9 11.9 11.4 12.1 45.4 10.4 12.8 11.9 12.7 47.8 11.1 12.7 12.
Slide 41: Transition by Segment (New): NIPSEA
2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) (Billion yen) FY2021*1 FY2022*2 FY2023 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q Automotive 18.6 18.4 16.0 21.0 74.1 21.2 20.3 24.5 30.5 96.5 21.8 24.0 25.5 Decorative 85.5 112.2 114.4 107.4 419.5 111.8 140.2 149.7 112.3 514
Slide 42: Contribution from DuluxGroup, Betek Boya and PT Nipsea
3. Revenue & Operating Profit Contribution from DuluxGroup, Betek Boya and PT Nipsea (Billion yen) FY2020*1 FY2021*1 FY2022*1 FY2023*1 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q F/Y 4Q F/Y 1Q 2Q 3Q Revenue 31.8 35.0 40.3 41.2 148.3 41.5 42.7 43.6 48.5 176.2 68.0 79.1 84.5 83.3 314.9 81.7 89.0 95.5 DuluxG
Slide 43: Breakdown of Adjustments (3Q): DuluxGroup
4. Breakdown of Adjustments (FY2022 3Q vs. FY2023 3Q) FY2022 3Q FY2023 3Q (Billion yen) M&A New M&A New Subsidy, Credit loss Subsidy, Credit loss FX related acqui- Total FX related acqui- Total etc.*1 provision etc.*1 provision expenses sitions expenses sitions Automotive - - - - - - - - - - - - Dec
Slide 44: Breakdown of Adjustments (3Q): NIPSEA
4. Breakdown of Adjustments (FY2022 3Q vs. FY2023 3Q) FY2022 3Q FY2023 3Q (Billion yen) M&A New M&A New Subsidy, Credit loss Subsidy, Credit loss FX related acqui- Total FX related acqui- Total etc.*1 provision etc.*1 provision expenses sitions expenses sitions Automotive -1.5 - - - - -1.5 0.3 - - -
Slide 45: Breakdown of Adjustments (9M): DuluxGroup
5. Breakdown of Adjustments (FY2022 9M vs. FY2023 9M) FY2022 9M FY2023 9M (Billion yen) M&A New M&A New Subsidy, Credit loss Subsidy, Credit loss FX related acqui- Total FX related acqui- Total etc.*1 provision etc.*1 provision expenses sitions expenses sitions Automotive - - - - - - - - - - - - Dec
Slide 46: Breakdown of Adjustments (9M): NIPSEA
5. Breakdown of Adjustments (FY2022 9M vs. FY2023 9M) FY2022 9M FY2023 9M (Billion yen) M&A New M&A New Subsidy, Credit loss Subsidy, Credit loss FX related acqui- Total FX related acqui- Total etc.*1 provision etc.*1 provision expenses sitions expenses sitions Automotive -1.5 - - - - -1.5 2.0 - - -
Slide 47: Key Financial Data
6. Key Financial Data ＜Capital Expenditure, Depreciation, R&D Expenses> FY2022 FY2023 (Billion yen) 3Q 3Q Property, plant and 13.0 8.1 Capital equipment expenditure Intangible assets 1.1 0.2 Total 14.1 8.4 Property, plant and 9.8 11.3 equipment Depreciation Intangible assets 2.8 2.4 Total 12.6 13.7
Slide 48: Key Market Data
7. Key Market Data <Paint sales volume> FY2020 FY2021 FY2022 FY2023 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q 4Q F/Y 1Q 2Q 3Q Japan*1 (10,000t) 40 36 38 42 156 40 40 40 41 161 39 39 38 40 155 37 24 25 *1 Source: Japan Paint Manufacturers Association; FY2023 3Q covers July and August <Automobile produ