Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — Nippon Paint Hldgs — Q4 2020 Earnings Presentation
55 slides from Nippon Paint's earnings presentation, Feb 10, 2021
Slide 1: FY2020 4Q Financial Results Presentation Material
February 10, 2021 FY2020 4Q Financial Results Presentation Material
Slide 2: Contents
Contents 1. Summary of Today’s Presentation / Topics ・・・ P.3 2. FY2020 4Q Highlights ・・・ P.16 3. FY2020 4Q Results (by Region) ・・・ P.19 4. FY2021 Forecast ・・・ P.29 5. Reference -(1)FY2020 Highlights ・・・ P.36 -(2)FY2020 Results (by Region) ・・・ P.40 -(3)Breakdown of Adjustments ・・・ P.44 -(4)Performanc
Slide 3: Summary of Today's Presentation (1) FY2020
1-1．Summary of Today’s Presentation (1) FY2020 ◆Our earnings were impacted by COVID; but we achieved record earnings FY2020 YoY (revenue of ¥781,1 bn and operating profit of ¥86.9 bn) on a Tanshin basis due to full-year contribution※ of DuluxGroup and Betek Boya and Growth Rate recovery that started
Slide 4: Summary of Today's Presentation (2) FY2020 4Q
1-1．Summary of Today’s Presentation (2) FY2020 4Q ◆NIPSEA China (YoY Growth): Revenue: +22.7%, Operating profit: +13.1% (1)Project revenue: +34% due to continued recovery of new FY2020 4Q YoY construction projects and higher share in key and strategic customers Growth Rate (2)DIY revenue: +21% due t
Slide 5: Summary of Today's Presentation (3) FY2021 Forecast
1-1．Summary of Today’s Presentation (3) FY2021 Forecast ◆For FY2021, we forecast record results in terms of revenue and operating profit due to stable growth in all regions and FY2021 businesses and effects of full capture of profits of Asian JVs and new consolidation Consolidated (Sales) Earnings F
Slide 6: FY2021 Forecast (Indonesia and India Businesses)
1-2．FY2021 Forecast (Indonesia and India Businesses) (Billion yen) FY2019 FY2020 FY2021 Indonesia Results Results Forecast (For Revenue 33.9 30.3 +10～15% reference) Operating profit 10.3 10.2 OP margin 30.3% 33.8% 30～35% (Billion yen) FY2019 FY2020 FY2021 India Results Results Forecast (For Revenue
Slide 7: Summary of Market and Business Conditions in Major Regions (1)
1-3．Summary of Market and Business Conditions in Major Regions (1) Market and business conditions in major regions Decorative: Slow 4Q sales growth due to resurgence of COVID that started in late November. In FY2021, around 10％ revenue growth expected due to focus on marketing and sales promotion an
Slide 8: Summary of Market and Business Conditions in Major Regions (2)
1-3．Summary of Market and Business Conditions in Major Regions (2) Market and business conditions in major regions Higher YoY sales across all businesses, with higher home improvement activity driven by Oceania economic stimulus, low interest rates and some ongoing COVID enhanced demand. We anticipa
Slide 9: Major Topics After Announcement of 3Q Results ①
1-4．Major Topics After Announcement of 3Q Results ① Started initiatives for reducing infection risk based on industry-academia co-creation agreement (announced on Nov. 24) ・Water-based paint with photocatalytic properties proven effective in suppressing SARS-CoV-2 virus (COVID-19) based on joint tes
Slide 10: Major Topics After Announcement of 3Q Results ②
1-4．Major Topics After Announcement of 3Q Results ② Started selling PROTECTON Interior Wall VK-200 for DIY (announced on Dec. 18) ・An affordable indoor-use anti-viral and anti-bacterial water-based paint using a visible light-responsive photocatalyst, featuring improved workability and ease of appli
Slide 11: Major Topics After Announcement of 3Q Results ③
1-4．Major Topics After Announcement of 3Q Results ③ Completed reorganization of automotive operations in the Americas (announced on Jan. 18) ・Nippon Paint Automotive Coatings Co., Ltd. (NPAC) completed reorganization of its automotive coatings business in the Americas on Jan. 1, 2021 ・The automotive
Slide 12: Major Topics After Announcement of 3Q Results ④
1-4．Major Topics After Announcement of 3Q Results ④ Started selling FASTAR next-generation industry-first nanotechnology-based hydrolysis antifouling paint in January (announced on Jan. 22) ・A marine-environment-friendly product that reduces elution of antifouling agents by up to 50% compared with c
Slide 13: Major Topics After Announcement of 3Q Results ⑤
1-4．Major Topics After Announcement of 3Q Results ⑤ Completed acquisition of Asian JV stake and Indonesia business (announced on Jan. 25) ・Transactions closed on January 25, 2021 ・Realizing substantial earnings growth as well as minority protection and Maximization of Shareholder Value (MSV) by aimi
Slide 14: Major Topics After Announcement of 3Q Results ⑥
1-4．Major Topics After Announcement of 3Q Results ⑥ Issuer credit rating from R&I upgraded from “A-” to “A” (announced on Feb. 4) ・The upgrade reflects the NPHD Group’s creditworthiness as the leading paint manufacturer in Asia ・The acquisition of Betek Boya and DuluxGroup has resulted in robust ear
Slide 15: Major Topics After Announcement of 3Q Results ⑦
1-4．Major Topics After Announcement of 3Q Results ⑦ Notice Regarding Stock Split and Associated Amendment to the Articles of Incorporation (announced on Feb. 10) ・Aimed to improve the liquidity of our stock and make the stock more accessible to a broader base of ・investors as well as our employees a
Slide 16: FY2020 4Q Highlights
2. FY2020 4Q Highlights Photo image: NIPSEA/Florentia Village (Guangzhou-Foshan)
Slide 17: FY2020 4Q Highlights
2-1．FY2020 4Q Highlights (Billion yen) Results(Tanshin) Results(Non-GAAP) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 4Q 4Q (％) 4Q 4Q (Amount) (％) Revenue To Grace-san, 196.9 218.9 11.2% 196.8 223.6 26.8 13.6% Operating profit 11.7 23.6 102.0% 23.1 21.9 -1.3 -5.4% 数値の準備が整っておらず。恐れ入りますが数値無しで OP margin 5.9
Slide 18: FY2020 4Q Highlights (Revenue & Operating Profit by Region)
2-2．FY2020 4Q Highlights (Revenue & Operating Profit by Region) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 4Q 4Q (％) 4Q 4Q (Amount) (％) Revenue 46.1 44.0 -4.5% 46.1 44.0 -2.1 -4.5% Japan ※ OP profit 4.2 2.3 -45.7% 5.2 2.4 -2.8 -53.4% Revenue 88.1 102.9 1
Slide 19: FY2020 4Q Results (by Region)
3. FY2020 4Q Results (by Region) Photo image: DuluxGroup The Ivanhoe Grammar School Senior Years and Science Centre, Australia, by McBride Charles Ryan Architects, a finalist in the 2017 Dulux Colour Awards. Photographer: John Gollings.
Slide 20: Market & Business Environment (4Q)
3-1．Market & Business Environment (4Q) Japan Asia (NIPSEA China) Oceania Americas Automotive DIY Project Decorative ■ Market (YoY) ■Business (vs. Market)※ ※Own estimation Strong Weak Outperform Inline Underperform Market analysis ✓Automotive: Automobile production continued to recover in all regions
Slide 21: Growing Potential of Chinese Paint Market
3-2．Growing Potential of Chinese Paint Market(Market Share Reexamination) Changes in DIY/Project markets ・In the Chinese paint market, demand previously was mainly for new houses. However, demand for renovating ・existing houses has recently grown rapidly ・Home renovation demand is expected to make t
Slide 22: Operating Profit Gap Analysis for 4Q
3-3．Operating Profit Gap Analysis for 4Q (Billion yen) Major reasons for changes ✓Japan: Lower profit due to slow recovery from COVID in industrial coatings and higher personnel and advertising expenses in all businesses ✓China: Higher profit due to higher DIY revenue on continued demand for repaint
Slide 23: Analysis of Regional Performance (Japan)
3-4．Analysis of Regional Performance (Japan) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 4Q 4Q (％) 4Q 4Q (Amount) (％) Automotive coatings 10.2 10.1 -1.0% 10.2 10.1 -0.1 -1.0% Decorative paints 11.8 11.7 -0.7% 11.8 11.7 -0.1 -0.7% Industrial coatings 10.4
Slide 24: Analysis of Regional Performance (NIPSEA China)
3-5．Analysis of Regional Performance (NIPSEA China) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 4Q 4Q (％) 4Q 4Q (Amount) (％) Automotive coatings 9.1 10.2 13.0% 9.2 10.2 1.0 10.6% Decorative paints 47.7 59.5 24.8% 46.8 59.0 12.2 26.1% Revenue Industrial co
Slide 25: Analysis of Regional Performance (Asia Excepting NIPSEA China)
3-6．Analysis of Regional Performance (Asia Excepting NIPSEA China) (Billion yen) Results(Tanshin) Results(Non-GAAP) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 4Q 4Q (％) 4Q 4Q (Amount) (％) Revenue 27.0 27.4 1.5% 27.0 28.3 1.3 4.9% Operating profit 2.4 4.7 96.3% 5.0 4.8 -0.3 -5.3% OP margin 9.0% 17.3% 8.
Slide 26: Analysis of Regional Performance (Oceania)
3-7．Analysis of Regional Performance (Oceania) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 4Q 4Q (％) 4Q 4Q (Amount) (％) Decorative paints 18.0 21.1 17.4% 18.0 20.9 2.9 16.0% Industrial coatings 1.5 1.5 1.5% 1.5 1.5 0.0 0.3% Revenue Paint related business
Slide 27: Analysis of Regional Performance (Americas)
3-8．Analysis of Regional Performance (Americas) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 4Q 4Q (％) 4Q 4Q (Amount) (％) Automotive coatings 6.2 6.2 0.8% 6.2 6.6 0.4 6.5% Decorative paints 10.7 11.3 5.4% 10.7 11.8 1.2 10.8% Revenue Fine chemicals 0.8 0.4
Slide 28: Analysis of Regional Performance (Other)
3-9．Analysis of Regional Performance (Other) (Billion yen) Results(Tanshin) Results(Non-GAAP) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 4Q 4Q (％) 4Q 4Q (Amount) (％) Automotive coatings 3.0 2.9 -2.1% 3.0 3.1 0.2 6.0% Decorative paints 4.2 4.8 16.5% 4.2 6.8 2.6 63.6% Industrial coatings 0.9 1.1 26.0% 0.
Slide 29: FY2021 Forecast
4. FY2021 Forecast Photo image: Vessel coated with Nippon Paint Marine Coatings’ low friction coating
Slide 30: FY2021 Forecast
4-1. FY2021 Forecast Tanshin (Billion yen) Overview FY2020 FY2021 YoY YoY Results Forecast (%) (Amount) ・FY2021 forecast projects record earnings in Revenue 781.1 890.0 13.9% 108.9 ・revenue and operating profit due to stable growth Operating profit ・in all regions and businesses and effects 86.9 92.
Slide 31: Market & Business Environment (FY2021)
4-2．Market & Business Environment (FY2021) Japan Asia (NIPSEA China) Oceania Americas Automotive coatings Decorative DIY Project paints ■ Market (YoY) Strong Weak Market analysis ✓Automotive: In Japan, recovery of automobile production to continue from 4Q of FY2020 In China, market projected to reco
Slide 32: Assumptions for FY2021 Forecast (1)
4-3. Assumptions for FY2021 Forecast (1) Japan FY2021 Forecast Qualitative Information Revenue c. +5% Revenue expected to be on prior-year levels due to uncertainty of COVID Automotive ±0% impact, despite continuing recovery of automotive market Higher revenue expected due to overall recovery of the
Slide 33: Assumptions for FY2021 Forecast (2)
4-3. Assumptions for FY2021 Forecast (2) Asia Excepting NIPSEA China FY2021 Forecast Qualitative Information In automotive coatings, strengthen partnerships with customers by Asia supplying high quality paints and strengthening technical support. A Excepting +5～10% slow market recovery expected. In
Slide 34: Assumptions for FY2021 Forecast (3)
4-3. Assumptions for FY2021 Forecast (3) Americas FY2021 Forecast Qualitative Information Revenue c. +5% Higher revenue expected as production expected to rebound Automotive +5～10% sharply after significant cuts due to COVID in FY2020 Higher revenue expected due to the outlook for strong housing Dec
Slide 35: Assumptions for FY2021 Forecast (4)
4-3. Assumptions for FY2021 Forecast (4) FY2021 FY2020 Forecast Results (billion yen) Revenue c. +5% 159.6 Automotive ±0% 34.7 Japan Decorative c. +10% 43.7 Industrial c. +15% 35.3 Revenue c. +10% 268.1 NIPSEA China Decorative (DIY) c. +10% 216.0 Decorative (PRJ) c. +20% Automotive +5～10% 31.8 Asia
Slide 36: Reference: FY2020 Highlights
5-(1) Reference: FY2020 Highlights
Slide 37: FY2020 Highlights
5-(1)-1．FY2020 Highlights Results(Tanshin) Results(Non-GAAP) (Billion yen) YoY YoY YoY FY2019 FY2020 FY2019 FY2020 (％) (Amount) (％) Revenue 692.0 781.1 12.9% 692.0 691.2 -0.7 -0.1% Operating profit 78.1 86.9 11.4% 86.7 70.7 -16.0 -18.5% OP margin 11.3% 11.1% -0.2pt 12.5% 10.2% - -2.3pt Profit before
Slide 38: Operating Profit Gap Analysis (FY2020)
5-(1)-2．Operating Profit Gap Analysis (FY2020) (Billion yen) 38
Slide 39: FY2020 Highlights (Revenue & Operating Profit by Region)
5-(1)-3．FY2020 Highlights (Revenue & Operating Profit by Region) (Billion yen) Results(Tanshin) Results(Non-GAAP) YoY YoY YoY FY2019 FY2020 FY2019 FY2020 (％) (Amount) (％) Revenue 182.6 159.6 -12.6% 182.6 159.6 -23.0 -12.6% Japan OP profit※ 23.4 7.2 -69.4% 24.4 7.4 -17.0 -69.6% Revenue 359.2 356.6 -0
Slide 40: Reference: FY2020 Results (by Region)
5-(2) Reference: FY2020 Results (by Region)
Slide 41: Analysis of Regional Performance / Japan & NIPSEA China
5-(2)-1．Analysis of Regional Performance / Japan & NIPSEA China Results(Tanshin) Results(Non-GAAP) (Billion yen) YoY YoY YoY FY2019 FY2020 FY2019 FY2020 (％) (Amount) (％) Automotive coatings 44.9 34.7 -22.7% 44.9 34.7 -10.2 -22.7% Decorative paints 48.2 43.7 -9.4% 48.2 43.7 -4.6 -9.4% Industrial coat
Slide 42: Analysis of Regional Performance / Asia Excepting NIPSEA China & Oceania
5-(2)-2．Analysis of Regional Performance / Asia Excepting NIPSEA China & Oceania (Billion yen) Results(Tanshin) Results(Non-GAAP) Asia FY2019 FY2020 YoY FY2019 FY2020 YoY YoY (％) (Amount) (％) Excepting Revenue 101.7 88.5 -13.0% 101.7 91.6 -10.1 -10.0% NIPSEA Operating profit 10.7 11.1 3.4% 13.3 10.8
Slide 43: Analysis of Regional Performance / Americas & Other
5-(2)-3．Analysis of Regional Performance / Americas & Other Results(Tanshin) Results(Non-GAAP) (Billion yen) YoY YoY YoY FY2019 FY2020 FY2019 FY2020 (％) (Amount) (％) Automotive coatings 25.9 21.0 -18.8% 25.9 21.9 -4.0 -15.5% Decorative paints 45.4 46.5 2.4% 45.4 47.7 2.3 5.1% Americas Revenue Fine c
Slide 44: Reference: Breakdown of Adjustments
5-(3) Reference: Breakdown of Adjustments
Slide 45: Breakdown of Adjustments (FY2019 4Q vs. FY2020 4Q)
5-(3)-1．Breakdown of Adjustments (FY2019 4Q vs. FY2020 4Q) (Billion yen) FY2019 4Q FY2020 4Q M&A Suspension of New M&A Suspension of New Subsidy, amortiza- Impairment Subsidy, amortiza- FX related loss acqui- Total FX related acqui- Total Insurance tion of IA ※2 Insurance tion of IA ※2 cost sitions
Slide 46: Breakdown of Adjustments (FY2019 4Q vs. FY2020 4Q)
5-(3)-2．Breakdown of Adjustments (FY2019 4Q vs. FY2020 4Q) (Billion yen) FY2019 4Q FY2020 4Q M&A Suspension of New M&A Suspension of New Subsidy, amortiza- Impairment Subsidy, amortiza- FX related loss acqui- Total FX related acqui- Total Insurance tion of IA ※2 Insurance tion of IA ※2※3 cost sition
Slide 47: Breakdown of Adjustments (FY2019 vs. FY2020)
5-(3)-3．Breakdown of Adjustments (FY2019 vs. FY2020) (Billion yen) FY2019 FY2020 M&A Suspension of New M&A Suspension of New Subsidy, amortiza- Impairment Subsidy, amortiza- FX related loss acqui- Total FX related acqui- Total Insurance tion of IA ※2 Insurance tion of IA ※2 cost sitions cost sitions
Slide 48: Breakdown of Adjustments (FY2019 vs. FY2020)
5-(3)-4．Breakdown of Adjustments (FY2019 vs. FY2020) (Billion yen) FY2019 FY2020 M&A Suspension of New M&A Suspension of New Subsidy, amortiza- Impairment Subsidy, amortiza- FX related loss acqui- Total FX related acqui- Total Insurance tion of IA ※2 Insurance tion of IA ※2※3 cost sitions cost sitio
Slide 49: Reference: Performance Indicators
5-(4) Reference: Performance Indicators
Slide 50: Revenue & Operating Profit Transition by Region ①
5-(4)-1．Revenue & Operating Profit Transition by Region ① (Billion yen) FY2018(IFRS) FY2019(IFRS) FY2020(IFRS) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Automotive 11.5 11.1 10.6 12.1 11.9 11.4 11.3 10.2 10.3 5.5 8.8 10.1 Decorative 10.6 12.0 11.2 13.0 11.0 12.8 12.6 11.8 10.3 11.1 10.6 11.7 Industrial 9.
Slide 51: Revenue & Operating Profit Transition by Region ②
5-(4)-2．Revenue & Operating Profit Transition by Region ② (Billion yen) FY2018(IFRS) FY2019(IFRS) FY2020(IFRS) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Automotive 18.5 19.6 17.6 18.5 16.5 17.2 15.9 17.5 12.4 11.4 15.7 19.0 Decorative 54.6 62.2 64.0 50.2 54.3 65.6 65.3 58.5 40.5 66.0 75.3 70.8 Industrial
Slide 52: Statement of Financial Position
5-(4)-3．Statement of Financial Position (Billion yen) As of As of As of As of Increase / Increase / Assets Dec. 31, Dec. 31, Liabilities and equity Dec. 31, Dec. 31, Decrease Decrease 2019 2020 2019 2020 Total current assets 507.2 643.5 136.3 Total liabilities 790.7 915.6 124.9 Cash and cash equival
Slide 53: Capital Expenditure, Depreciation, R&D Expenses, etc.
5-(4)-4．Capital Expenditure, Depreciation, R&D Expenses, etc. ＜Capital Expenditure, Depreciation, R&D Expenses, etc.＞ (Billion yen) As of As of Dec. 31, Dec. 31, 2019 2020 Property, plant and 32.6 35.3 equipment Capital Intangible assets 2.7 3.6 expenditure Total 35.3 38.9 Property, plant and 18.3 2
Slide 54: FX Rates & Market Conditions
5-(4)-5．FX Rates & Market Conditions <Exchange rate for P/L(average rate)> <Exchange rate for F/P(closing rate)> As of As of FY2019 FY2020 FY2021 Dec. 31, Dec. 31, 2019 2020 JPY/USD 109.2 106.4 105.0 JPY/USD 109.5 103.5 JPY/RMB 15.8 15.4 15.7 JPY/RMB 15.7 15.9 JPY/AUD 74.7 73.7 75.0 JPY/AUD 76.5 78.
Slide 55: Nippon Paint Holdings Co., Ltd. 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