Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — Nippon Paint Hldgs — Q2 2021 Earnings Presentation
41 slides from Nippon Paint's earnings presentation, Aug 10, 2021
Slide 1: FY2021 2Q Financial Results Presentation Material
August 10, 2021 FY2021 2Q Financial Results Presentation Material
Slide 2: Contents
Contents 1. Summary of Today’s Presentation/Topics ・・・ P.3 2. FY2021 2Q Highlights ・・・ P.11 3. FY2021 2Q Results (by Region) ・・・ P.14 4. FY2021 Forecast ・・・ P.24 5. FY2021 1H Results ・・・ P.33 (Appendix)Reference Disclosure policy for this document: - Both reported base (‘Tanshin’) and adjusted base
Slide 3: Summary of Today's Presentation (1)
1-1．Summary of Today’s Presentation(1) ・Record-high revenue and operating profit achieved on a Tanshin basis in FY2021 2Q, driven by continuous growth of our existing businesses and effects of operational integration through aggressive M&A and cross- FY2021 2Q functional PMI YoY Growth Rate ・Revenue
Slide 4: Summary of Today's Presentation (2): FY2021 Consolidated Earnings Forecast
1-1．Summary of Today’s Presentation(2) ・The FY2021 forecast is revised upward from our Feb. 10 forecast due to greater-than-expected business growth and cost reduction. Both revenue and FY2021 Consolidated operating profit are forecast to reach record high Earnings Forecast ◆Revenue: ¥1,010.0 bn (+2
Slide 5: Summary of Today's Presentation (3): Raw material market conditions
1-1．Summary of Today’s Presentation(3) Raw material market conditions and impact on our operations in FY2021 2Q ・Prolonged impact of the cold wave in North America and disruptions in marine transportation continued to affect raw material supply and prices ・The impact of raw material price increases
Slide 6: Major Topics: Launch of film business in automotive coatings
1-2．Major Topics After Announcement of FY2021 1Q Results ①② Launch of film business in automotive coatings business (announced on July 1) ・Decorative films for automotive interiors provide protection of car informatics, anti-glare screen protection, and anti-viral function, and have design flexibili
Slide 7: Major Topics: PROTECTON products proven effective against coronavirus
1-2．Major Topics After Announcement of FY2021 1Q Results ③ Five PROTECTON brand products proven effective in suppressing the novel coronavirus and Alpha variant through joint research with the University of Tokyo (announced on July 15) ・PROTECTON brand※ anti-viral and anti-bacterial paint products d
Slide 8: Major Topics: Dissolution and liquidation of former European Headquarters
1-2．Major Topics After Announcement of FY2021 1Q Results ④ Dissolution and liquidation of the former European Headquarters (announced on August 10) ・As announced on April 1, 2021, we implemented business restructuring to make our automotive coatings business in Europe more competitive and adopted a
Slide 9: Share transfer of European automotive and India businesses (1)
1-2．Major Topics After Announcement of FY2021 1Q Results ⑤-(1) Share transfer of European automotive business and India businesses to the Wuthelam Group (announced on August 10) ■ Summary Share transfer of NPAE※1, BNPA※2, and NPI※3 to the Wuthelam Group ■ Background ・The automotive coatings business
Slide 10: Share transfer of European automotive and India businesses (2)
1-2．Major Topics After Announcement of FY2021 1Q Results ⑤-(2) Share transfer of European automotive business and India businesses to the Wuthelam Group (announced on August 10) ■Objectives ・This share transfer to the Wuthelam Group will enable these businesses to ensure continuous medium- and long-
Slide 11: 2. FY2021 2Q Highlights
2. FY2021 2Q Highlights Photo image: DuluxGroup/Dulux Colour Forecast for 2021 “Reset”
Slide 12: FY2021 2Q Highlights
2-1．FY2021 2Q Highlights Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Revenue 182.5 266.2 45.9% 182.4 232.7 50.3 27.6% Operating profit 19.4 22.4 15.2% 18.5 19.5 1.0 5.4% OP margin 10.6% 8.4% -2.2pt 10.1% 8.4% - -1.8pt EBITDA 2
Slide 13: FY2021 2Q Highlights (Revenue & Operating Profit by Region)
2-2．FY2021 2Q Highlights (Revenue & Operating Profit by Region) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Revenue 35.7 40.3 12.9% 35.7 40.3 4.6 12.9% Japan OP profit※1 1.8 3.0 65.5% 1.8 3.0 1.2 65.5% Revenue 88.1 145.7 65.4%
Slide 14: 3. FY2021 2Q Results (by Region)
3. FY2021 2Q Results (by Region) Photo image: NIPSEA/2021 Colour Life Festival - Collaboration between Nippon Paint & Elle
Slide 15: Market & Business Environment (2Q)
3-1．Market & Business Environment (2Q) Japan Asia(NIPSEA China) Oceania Americas Automotive Decorative DIY Project ■ Market(YoY) ■Business(vs. Market)※ ※Own estimation Strong Weak Outperform Inline Underperform Market analysis ✓Automotive： In Japan and Americas, market conditions improved significan
Slide 16: Operating Profit Gap Analysis for FY2021 2Q
3-2．Operating Profit Gap Analysis for FY2021 2Q (Billion yen) Incl. the impact of production facility restructuring projects in Japan (c. ¥-1.0bn) and fair market valuation for PPA Gap(Non-GAAP) in Indonesia 1.0 (c. ¥-1.5bn) Major reasons for changes ✓NIPSEA China: Lower profit due to higher RMCC ra
Slide 17: Analysis of Regional Performance (Japan)
3-3．Analysis of Regional Performance (Japan) (Billion yen) Results(Tanshin) Results(Non-GAAP) Quarterly performance (Tanshin) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Automotive coatings 5.5 8.5 54.3% 5.5 8.5 3.0 54.3% Decorative paints 11.1 11.9 6.8% 11.1 11.9 0.8 6.8% I
Slide 18: Analysis of Regional Performance (NIPSEA China)
3-4．Analysis of Regional Performance (NIPSEA China) (Billion yen) Results(Tanshin) Results(Non-GAAP) Quarterly performance (Tanshin) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Automotive coatings 7.5 9.8 30.1% 7.5 8.7 1.1 15.3% Decorative paints 59.8 85.0 42.1% 59.7 75.9 16
Slide 19: Analysis of Regional Performance (Asia Excepting NIPSEA China)
3-5．Analysis of Regional Performance (Asia Excepting NIPSEA China) (Billion yen) Results(Tanshin) ※ Results(Non-GAAP) Quarterly performance (Tanshin) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Revenue 15.6 43.2 177.6% 15.6 25.0 9.4 60.2% Operating profit 0.4 4.4 - 0.2 2.8 2
Slide 20: Analysis of Regional Performance (Indonesia and India)
3-6．Analysis of Regional Performance (Asia: Indonesia and India) Results(Tanshin) Results(Non-GAAP) Quarterly performance (Tanshin) (Billion yen) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Revenue - 9.7 - - - - - Indonesia Operating profit - 1.7 - - - - - ※1 Operating profi
Slide 21: Analysis of Regional Performance (Oceania)
3-7．Analysis of Regional Performance (Oceania) (Billion yen) Results(Tanshin) Results(Non-GAAP) Quarterly performance (Tanshin) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Decorative paints 18.9 21.6 14.1% 18.9 18.4 -0.5 -2.8% Industrial coatings 1.2 1.9 54.2% 1.2 1.6 0.4 31
Slide 22: Analysis of Regional Performance (Americas)
3-8．Analysis of Regional Performance (Americas) (Billion yen) Results(Tanshin) Results(Non-GAAP) Quarterly performance (Tanshin) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Automotive coatings 2.5 6.1 147.9% 2.5 5.9 3.4 138.5% Decorative paints 12.0 14.3 19.4% 12.0 14.0 2.1
Slide 23: Analysis of Regional Performance (Other)
3-9．Analysis of Regional Performance (Other) (Billion yen) Results(Tanshin) Results(Non-GAAP) Quarterly performance (Tanshin) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 2Q 2Q (％) 2Q 2Q (Amount) (％) Automotive coatings 0.9 2.4 165.8% 0.9 2.2 1.3 141.7% Decorative paints 4.1 7.5 82.4% 4.1 9.1 5.0 121.2%
Slide 24: 4. FY2021 Forecast
4. FY2021 Forecast Photo image: PROTECTON series INTERIOR WALL VK-200 (for DIY use) INTERIOR PAINT PREMIUM BARRIERXTM SPRAY
Slide 25: FY2021 Forecast
4-1. FY2021 Forecast Tanshin Constant FX Basis (Billion yen) FY2020 FY2021 FY2021 vs. Previous vs. Previous Aug. YoY(%) Forecast(%) Aug. YoY(%) Forecast(%) Feb. Feb. Results Forecast (Feb.vs Aug.) Forecast (Feb.vs Aug.) Forecast Forecast (Revised) (Revised) Revenue 781.1 890.0 1,010.0 29.3% 13.5% 89
Slide 26: Market & Business Environment (FY2021 3Q)
4-2．Market & Business Environment (FY2021 3Q) Japan Asia (NIPSEA China) Oceania Americas Automotive Decorative DIY Project ■ Market (YoY) Strong Weak Market analysis ✓Automotive: Market conditions are expected to be stronger compared to the slump in automobile production due to COVID in 3Q 2020, alt
Slide 27: Market & Business Environment (FY2021)
4-3．Market & Business Environment (FY2021) Japan Asia (NIPSEA China) Oceania Americas Automotive Decorative DIY Project ■ Market (YoY) Strong Weak Market analysis ✓Automotive: In Japan, the market is on a par with prior-year levels because the recovery of automobile production from COVID will be off
Slide 28: FY2021 Forecast (Revenue Gap Analysis)
4-4．FY2021 Forecast (Revenue Gap Analysis) (Billion yen) Consolidated (constant FX basis) +80.0 Major reasons for changes ✓NIPSEA China: Higher decorative revenue due to continuing strong market conditions and price increases ✓Other regions: Higher revenue mainly in decorative paints also at other r
Slide 29: FY2021 Forecast (Operating Profit Gap Analysis)
4-5．FY2021 Forecast (Operating Profit Gap Analysis) (Billion yen) Consolidated +15.0 Major reasons for changes ✓Higher revenue across ・Higher revenue than our Feb. 10 forecast, mainly at NIPSEA China, and price increases across our operating regions + cost regions and businesses mitigated the impact
Slide 30: FY2021 Forecast (Profit Gap Analysis)
4-6．FY2021 Forecast (Profit Gap Analysis) (Billion yen) Consolidated +11.0 Major reasons for changes ✓Impact of share transfer: The exclusion of five months of earnings (net loss) at NPAE (automotive coatings business in Europe) and NPI/BNPA (India businesses) from consolidated earnings contributed
Slide 31: Assumptions for FY2021 Forecast (1)
4-7. Assumptions for FY2021 Forecast(4)-① FY2020 Results FY2021 Forecast FY2021 Forecast (Tanshin) (As of Feb.)※ (As of Aug.) ※ YoY YoY YoY YoY Revenue OP margin (Revenue) (OP margin) (Revenue) (OP margin) 10.1% Revenue 159.6 (exc HD expenses) c. +5% → No change ↘ Automotive 34.7 ±0% c. +10% Japan D
Slide 32: Assumptions for FY2021 Forecast (2)
4-7. Assumptions for FY2021 Forecast(4)-② FY2020 Results FY2021 Forecast FY2021 Forecast (Tanshin) (As of Feb.)※ (As of Aug.) ※ YoY YoY YoY YoY Revenue OP margin (Revenue) (OP margin) (Revenue) (OP margin) (For reference) (For reference) Indonesia Revenue 30.3 33.8% +10～15% +25～30% (For reference) →
Slide 33: 5. FY2021 1H Results
5. FY2021 1H Results
Slide 34: FY2021 1H Highlights
5-1．FY2021 1H Highlights (Billion yen) Results(Tanshin) Results(Non-GAAP) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 1H 1H (％) 1H 1H (Amount) (％) Revenue 345.4 497.7 44.1% 345.2 440.0 94.8 27.5% Operating profit 34.7 48.7 40.3% 33.7 41.9 8.2 24.4% OP margin 10.0% 9.8% -0.3pt 9.7% 9.5% - -0.2pt EBITDA 4
Slide 35: Operating Profit Gap Analysis for FY2021 1H
5-2．Operating Profit Gap Analysis for FY2021 1H (Billion yen) Gap(Non-GAAP) 8.2 35
Slide 36: FY2021 1H Highlights (Revenue & Operating Profit by Region)
5-3．FY2021 1H Highlights (Revenue & Operating Profit by Region) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 1H 1H (％) 1H 1H (Amount) (％) Revenue 75.8 80.2 5.9% 75.8 80.2 4.4 5.9% Japan OP profit※1 6.9 7.3 6.9% 6.9 7.3 0.5 6.9% Revenue 150.5 263.1 74.9% 15
Slide 37: Analysis of Regional Performance (Japan & NIPSEA China)
5-4．Analysis of Regional Performance (Japan & NIPSEA China) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 1H 1H (％) 1H 1H (Amount) (％) Automotive coatings 15.8 18.7 18.5% 15.8 18.7 2.9 18.5% Decorative paints 21.4 21.8 2.0% 21.4 21.8 0.4 2.0% Industrial coa
Slide 38: Analysis of Regional Performance (Asia Excepting NIPSEA China, Indonesia, India)
5-5．Analysis of Regional Performance (Asia Excepting NIPSEA China & Indonesia & India) Asia (Billion yen) Results(Tanshin) ※1 FY2020 FY2021 YoY FY2020 Results(Non-GAAP) FY2021 YoY YoY Excepting 1H 1H (％) 1H 1H (Amount) (％) Revenue 37.3 87.7 135.1% 37.3 52.6 15.3 41.0% NIPSEA Operating profit 2.7 14.
Slide 39: Analysis of Regional Performance (Oceania & Americas)
5-6．Analysis of Regional Performance (Oceania & Americas) (Billion yen) Results(Tanshin) Results(Non-GAAP) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 1H 1H (％) 1H 1H (Amount) (％) Decorative paints 35.9 43.1 19.9% 35.9 36.8 0.8 2.3% Industrial coatings 2.5 3.5 37.9% 2.5 3.0 0.4 17.6% Revenue Oceania Pai
Slide 40: Analysis of Regional Performance (Other)
5-7．Analysis of Regional Performance (Other) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2020 FY2021 YoY FY2020 FY2021 YoY YoY 1H 1H (％) 1H 1H (Amount) (％) Automotive coatings 3.5 5.3 50.0% 3.5 5.0 1.5 43.0% Decorative paints 9.3 14.2 52.9% 9.3 17.5 8.2 88.2% Industrial coatings 1.6 2.3 49.3%
Slide 41: 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