Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — FY2019 Earnings Presentation
19 slides from Nippon Paint's earnings presentation, Feb 13, 2020
Slide 1: FY2019 4Q Financial Result Conference Call Presentation Summary
FY2019 4Q Financial Result Conference Call Presentation Summary February 13, 2020 Good day everyone. I am Yuichiro Wakatsuki, chief financial officer of Nippon Paint Holdings. Thank you for participating in this conference call about our earning results for FY2019 fourth quarter. I will begin with a
Slide 2: Disclosure policy and non-GAAP basis
shows the year on year change in earnings of our continuing operations. There are adjustments for M&A activity and one-time factors. The numbers and comments in this material are basically on a non-GAAP basis. The non-GAAP basis includes adjustments to eliminate the effects of foreign exchange, reve
Slide 3: Summary of non-GAAP results of operations
This page is a summary of our non-GAAP results of operations. I will talk about DuluxGroup and Betek Boya separately, as they are not included in non-GAAP financial information. In the fourth quarter of FY2019, compared with one year earlier, revenue increased 3.5% and operating profit increased 7.0
Slide 4: No FY2020 forecast and coronavirus response
revenue and operating profit of the two companies. After a 0.5 billion yen amortization resulting from purchase price allocation adjustment, the two companies contributed 4.1 billion yen to the fourth quarter consolidated operating profit. We are not announcing a FY2020 forecast because the novel co
Slide 5: FY2019 fourth quarter earnings results
This page shows our earning results for FY2019 fourth quarter. On a non-GAAP basis, fourth quarter revenue increased 5.4 billion yen, or 3.5%, year on year to 158.5 billion yen. Operating profit increased 1.3 billion yen, or 7%, to 19.2 billion yen. On a tanshin basis, which includes DuluxGroup and
Slide 6: Regional revenue and earnings, tanshin and non-GAAP
This page shows regional revenue and earnings on a tanshin and non-GAAP basis. Generally speaking, lower revenue and earnings in Japan was offset by the strong performance in Asia in the fourth quarter. There are no non-GAAP numbers for Oceania, which is the DuluxGroup, because it is a new segment.
Slide 7: Performance versus market benchmark
On this page, we are using this format for the first time to show our performance. The market benchmark shows whether we have outperformed (increased market share), inline (maintained market share), or underperformed (lost market share). Rather than simply being positive or negative, it is also posi
Slide 8: Change in fourth quarter operating profit
This page shows the changes in our fourth quarter operating profit on a tanshin and non-GAAP basis. As you can see, fourth quarter non-GAAP operating income increased by 1.3 billion yen from 17.9 billion yen in FY2018 to 19.2 billion yen in FY2019. On a tanshin basis, fourth quarter operating profit
Slide 9: Breakdown of the Adjustment Items (4Q)
)) NIPPON PAINT HOLDINGS CO.LTD. | 4- (3) -1. Breakdown of the Adjustment Items (4Q) (Billion yen) FY2018 4Q FY2019 4Q Subsidy, M&A A New Subsidy, M&A ‘ FX | Insurance, } related ma acqui- } Total FX} Insurance, | related Bursts a Total etc. cost sitions etc. cost Decorative E E E E E - - - - - Japa
Slide 10: Fourth quarter adjustments by segment
The tables on pages 32 and 33 show the fourth quarter adjustments in the business segments of each region. The total net adjustment is negative 7.6 billion yen, which is on the far right of the last line on page 33. This is the difference between the 4.2 billion yen addition and 11.8 billion yen ded
Slide 11: Breakdown of the Adjustment Items (Full Year)
«“@ NIPPON PAINT HOLDINGS CO.LTD. | 4- (3) -3. Breakdown of the Adjustment Items (Full Year) FY2018 FY2019 Subsidy, M&A " ‘Subsidy, M&A - FX | Insurance, | related ma Total FX — j Insurance, } related mea Total etc. cost sitions etc. cost ‘Automotive + + + + + - - - + - Decorative E E E - E E E E E
Slide 12: FY2019 full year adjustments
The tables on pages 34 and 35 show the FY2019 full year adjustments. As you can see on page 35, the total positive adjustment is 12.9 billion yen. There are additions of 8 billion yen for new acquisitions and 4.8 billion yen for subsidies and insurance. The 4.8 billion yen consists of a 2.8 billion
Slide 13: NIPSEA China decorative paints
As I said earlier, NIPSEA China posted fourth quarter decorative paints revenue growth of 5% in the DIY segment and 42% in the project segment year on year. DIY revenue increased even though we believe this market in China is flat. This is why we decided on green with an upward arrow for DIY on page
Slide 14: Oceania and DuluxGroup
Oceania includes the recently acquired DuluxGroup, which is excluded from the non- GAAP data. On the tanshin basis, fourth quarter revenue was 34.4 billion yen and operating profit was 3 billion yen. After excluding the purchase price allocation deduction, the operating margin was 9.7%. I will now m
Slide 15: Outlook for 2020 and China factory status
I would like to explain the outlook for 2020. As I have already explained, we have not disclosed a forecast for FY2020. Regarding factories in China, we are considering a resumption of operations while cooperating with government authorities. The safety of employees will be our utmost priority conce
Slide 16: Raw material procurement and supply
What I can tell you now is that almost all of our factories in China are already starting to resume operations. Raw material procurement is the third subject of this page. Right now, the novel coronavirus outbreak is having only a small impact on the supply of raw materials in China. There may be de
Slide 17: Coronavirus impact on sales and earnings
My next subject is how the novel coronavirus will affect our sales and earnings. We believe that the timing of the abatement of infection is strongly correlated with performance. We believe that a negative impact on performance in the first quarter of FY2020 is unavoidable. But we think a recovery i
Slide 18: Resumption of operations and financial strength
For automotive coatings and industrial coatings, we are closely monitoring our relationships with customers. As was reported in the media, Japanese automakers plan to restart production in China on February 17. We are making preparations to resume full-scale operations as well in order to meet the r
Slide 19: Closing and investor briefing
For DuluxGroup, the plan is revenue of 143 billion yen and operating profit of 17 billion yen, before the purchase price allocation deduction. For Betek Boya, the plan is revenue of 34 billion yen and operating profit of 3.1 billion yen, before the purchase price allocation deduction. I will not go