Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — Nippon Paint Hldgs — Q1 2022 Earnings Presentation
35 slides from Nippon Paint's earnings presentation, May 13, 2022
Slide 1: FY2022 1Q Financial Results Presentation material
May 13, 2022 FY2022 1Q Financial Results Presentation material
Slide 2: Contents
□ FY2022 1Q Summary/Topics ・・・ P.3 □ Supplemental Material ・・・ P.12 Contents 1. FY2022 1Q Results: Highlights ・・・ P.13 2. FY2022 1Q Results: By Segment ・・・ P.16 (Appendix) Reference Data Disclosure policy for this document: - Both reported base (‘Tanshin’) and adjusted base (‘Non-GAAP’) financials a
Slide 3: Summary: FY2022 1Q Operating Results
1. Summary: FY2022 1Q Operating Results ◆ Tanshin basis FY2022 1Q *1 • Revenue increased due to selling price increases in decorative business, new consolidation of Cromology and changes in exchange rates. Operating profit declined due to higher raw material prices and logistics costs • Operating pr
Slide 4: Change in Reportable Segment
2. Change in Reportable Segment Reclassified reportable segments by management unit or region from 1Q 2022 Former reportable segment New reportable segment Japan Japan ①② Key points Asia Nipsea ①Overseas business of marine coatings is in Japan segment (previously included in Nipsea China Nipsea Chin
Slide 5: Raw Material Market Conditions and Business Impact
3．Raw Material Market Conditions and Business Impact Strategic pricing actions expected to drive gradual OP margin improvement beginning in 2Q 2022 1Q 2022 2Q 2022 and beyond • Prices of crude oil and naphtha increased further, with prices unlikely to • FY2022 guidance announced in February decline
Slide 6: Market & Business Environment
4. Market & Business Environment Decorative markets expected to remain relatively robust in Americas and Japan Japan Asia (Nipsea China) Oceania Americas Europe Automotive 1Q Decorative DIY Project Automotive 2Q (outlook) Decorative DIY Project ■ Market (YoY) ■Business (vs. Market)* *NPHD's estimate
Slide 7: Summary of Operating Results in Major Segments (1Q FY2022)
5．Summary of Operating Results in Major Segments (1Q FY2022) (Billion yen) Tanshin Non-GAAP Overview 1Q 2022 YoY 1Q 2022 YoY ▶Decorative Higher revenue due to progress at delayed construction projects, despite impact of resurgence of pandemic Revenue 41.8 -1.9% 41.5 -2.5% ▶Automotive Revenue decreas
Slide 8: Major Topics①: Possible additional allowance for credit loss in China
6. Major Topics① Possibility of an additional allowance for potential credit loss on receivables relating to Chinese business (announced on May 13) • Examining and reassessing financial positions of ~15 major Chinese real estate developers, focusing on receivables, due to weak real estate market and
Slide 9: Major Topics②: M&A updates
6. Major Topics② M&A updates ◆ Cromology (acquisition closed on January 20, 2022) • Cromology welcomed as a partner company within DuluxGroup • Collaboration on future growth opportunities underway ◆ JUB (acquisition announced on October 29, 2021) Business location in Champagné • Final regulatory ap
Slide 10: Major Topics③: Selected for FTSE Blossom Japan Sector Relative Index
6. Major Topics③ Selected for FTSE Blossom Japan Sector Relative Index (Announced by NPHD on April 4) • This index is used by Japan’s Government Pension Investment Fund (GPIF) as a benchmark for passive ESG investment management • Remain committed to materiality related to sustainability identified
Slide 11: Major Topics④: Nipsea China's LiBang brand granted various awards
6. Major Topics④ Nipsea China’s LiBang brand granted various awards • Continuous award-winning is proof of trust of customers and consumers. Continue to improve products and services as brand providing value Announced on March 1 Home Furniture Association Announced on March 14 Announced on March 29
Slide 12: Supplemental Material
Supplemental Material 1. FY2022 1Q Results: Highlights … P13 2. FY2022 1Q Results: By Segment … P16 (Appendix) Reference Data
Slide 13: FY2022 1Q Results: Highlights
1. FY2022 1Q 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 *1 1Q 1Q (％) 1Q 1Q (Amount) (％) Revenue 222.7 284.1 27.6% 222.5 251.1 28.7 12.9% Operating profit 24.7 24.7 -0.0% 26.9 23.5 -3.4 -12.7% OP margin 11.1% 8.7% -2.4pt 12.1% 9.3% -
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 1Q 1Q (％) 1Q *1 1Q (Amount) (％) Revenue 42.6 41.8 -1.9% 42.6 41.5 -1.1 -2.5% Japan OP profit*2 4.3 0.3 -93.2%
Slide 16: FY2022 1Q Results: By Segment
2. FY2022 1Q 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 +12.9% (+28.7) Tanshin basis +27.6% (+61.4) 2.2 1.9 -0.7 -4.0 -2.2 2.0 FY2021 1Q 0.6 0.3 -0.1 FY2022 1Q *2 FY2022 1Q Japan Adjustments Adjustments Dulux Americas Consolidation Asia Asia Adju
Slide 18: Japan
2-2．Japan (Billion yen) Results (Tanshin) Results (Non-GAAP) Quarterly performance (Tanshin) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1Q 1Q (％) 1Q 1Q (Amount) (％) Automotive coatings 10.2 8.7 -15.2% 10.2 8.7 -1.6 -15.2% Decorative paints 9.9 10.4 4.8% 9.9 10.4 0.5 4.8% Industrial coatings 9.0 9.1 0.7
Slide 19: Nipsea (Nipsea China)
2-3．Nipsea (Nipsea China) (Billion yen) Results (Tanshin) Results (Non-GAAP) Quarterly performance (Tanshin) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1Q 1Q (％) 1Q 1Q (Amount) (％) Automotive coatings 9.3 11.0 18.7% 9.3 9.8 0.5 5.5% Decorative paints 57.3 79.3 38.4% 57.1 70.3 13.2 23.0% Revenue Industr
Slide 20: Nipsea (Asia Excepting Nipsea China)
2-4．Nipsea (Asia Excepting Nipsea China*1) (Billion yen) Results (Tanshin) Results (Non-GAAP) Quarterly performance (Tanshin) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1Q 1Q (％) 1Q 1Q (Amount) (％) Revenue 47.9 56.3 17.6% 47.9 60.6 12.7 26.5% Operating profit 10.1 9.8 -2.7% 9.9 10.5 0.6 6.0% OP margin
Slide 21: PT Nipsea (Indonesia) and Betek Boya (Turkey)
2-5．PT Nipsea (Indonesia) and Betek Boya (Turkey) (Billion yen) Results (Tanshin) Results (Non-GAAP) PT Nipsea (Indonesia) Betek Boya (Turkey) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1Q 1Q (％) 1Q 1Q (Amount) (％) Quarterly performance (Tanshin) Quarterly performance (Tanshin) Revenue 9.9 13.1 32.6% 9
Slide 22: DuluxGroup
2-6．DuluxGroup*1 (Billion yen) Results (Tanshin) Results (Non-GAAP) Quarterly performance (Tanshin) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1Q 1Q (％) 1Q 1Q (Amount) (％) Decorative paints 21.5 44.3 105.6% 21.5 22.9 1.4 6.4% Industrial coatings 1.6 1.9 23.2% 1.6 1.9 0.3 19.3% Revenue Paint related bus
Slide 23: New Consolidation: Cromology
2-7．New Consolidation: Cromology (Billion yen) Results (Tanshin) Results (Non-GAAP) Quarterly performance (Tanshin) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1Q 1Q (％) 1Q 1Q (Amount) (％) Revenue - 22.6 - - - - - Cromology Operating profit - 1.4 - - - - - OP margin* - 6.4% - - - - - Revenue OP FY2020 F
Slide 24: Americas
2-8．Americas (Billion yen) Results (Tanshin) Results (Non-GAAP) Quarterly performance (Tanshin) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1Q 1Q (％) 1Q 1Q (Amount) (％) Automotive coatings 6.2 7.0 13.0% 6.2 6.3 0.2 2.6% Decorative paints 11.2 14.3 27.4% 11.2 13.0 1.8 15.9% Revenue Fine chemicals 0.3 0.4
Slide 25: 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 26: FY2022 1Q Financial Results Reference Data
FY2022 1Q Financial Results Presentation Material Reference Data May 13, 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 & Opera
Slide 27: Revenue & Operating Profit Transition by Segment (Former): Japan
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 28: Revenue & Operating Profit Transition by Segment (Former): Asia
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 29: Revenue & Operating Profit Transition by Segment (New): Japan, DuluxGroup
2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) (Billion yen) FY2021※1 FY2022 1Q 2Q 3Q 4Q Full Year 1Q Automotive 10.2 8.5 7.6 8.9 35.3 8.7 Decorative 9.9 11.9 11.4 12.1 45.4 10.4 Industrial 9.0 9.6 9.6 10.0 38.1 9.1 Fine chemicals 2.3 2.4 2.0 1.8 8.4 2.0 Japan Others※2
Slide 30: Revenue & Operating Profit Transition by Segment (New): Nipsea
2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) (Billion yen) FY2021※1 FY2022 1Q 2Q 3Q 4Q Full Year 1Q Automotive 18.6 18.4 16.0 21.0 74.1 21.2 Decorative 85.5 112.2 114.4 107.4 419.5 111.3 Industrial 8.9 10.4 9.9 10.1 39.3 9.3 Fine chemicals 1.6 1.7 1.6 1.9 6.8 2.1 ※2 O
Slide 31: Revenue & Operating Profit Contribution from Acquired Companies
3. Revenue & Operating Profit Contribution from DuluxGroup, Betek Boya, PT Nipsea and Cromology (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 DuluxGroup Revenue Before 13.1 34.4 47.6 31.8 35.0 40.3 41.2 148.3 41.5 42.7 43.6 48.
Slide 32: Breakdown of Adjustments: DuluxGroup
4. Breakdown of Adjustments (FY2021 1Q vs. FY2022 1Q) FY2021 1Q FY2022 1Q (Billion yen) M&A New M&A New Subsidy, Subsidy, FX related acqui- Total FX related acqui- Total etc.※1 etc.※1 expense sitions expense sitions Automotive - - - - - - - - - - Decorative - - - - - - - - - - Industrial - - - - - -
Slide 33: Breakdown of Adjustments: Nipsea
4. Breakdown of Adjustments (FY2021 1Q vs. FY2022 1Q) FY2021 1Q FY2022 1Q (Billion yen) M&A New M&A New Subsidy, Subsidy, FX related acqui- Total FX related acqui- Total etc.※1 etc.※1 expense sitions expense sitions Automotive 0.0 - - - 0.0 1.6 - - - 1.6 Decorative 0.2 - - - 0.2 6.5 - - - 6.5 Indust
Slide 34: Key Financial Data
5. Key Financial Data ＜Capital Expenditure, Depreciation, R&D Expenses> FY2021 FY2022 (Billion yen) 1Q 1Q Capital Property, plant and 8.8 11.3 Intangible assets 0.9 1.2 expenditure Total 9.7 12.6 Property, plant and 6.7 8.0 Depreciation Intangible assets 1.7 2.2 Total 8.4 10.2 R&D 5.6 6.2 ＜Other Maj
Slide 35: Key Market Data
6. 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 ※1 Japan (10,000t) 44 43 44 47 178 43 43 43 43 172 40 36 38 42 156 40 40 40 41 161 24 ※1 Source: Japan Paint Manufacturers Association