Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — Nippon Paint Hldgs — Q2 2022 Earnings Presentation
50 slides from Nippon Paint's earnings presentation, Aug 10, 2022
Slide 1: FY2022 2Q Financial Results Presentation material
August 10, 2022 JUB: Acropolis Museum in Greece FY2022 2Q Financial Results Presentation material Dunn-Edwards: Color + Design 2023 Trends
Slide 2: Contents
□ FY2022 2Q Summary/Topics ・・・ P.3 □ Supplemental Material ・・・ P.13 1. FY2022 2Q Results: Highlights ・・・ P.14 Contents 2. FY2022 2Q Results: By Segment ・・・ P.17 3. FY2022 Forecast ・・・ P.26 4. FY2022 1H Results ・・・ P.30 (Appendix) Reference Data Disclosure policy for this document: - Both reported ba
Slide 3: Summary: FY2022 2Q Operating Results
1. Summary: FY2022 2Q Operating Results ◆ Tanshin basis FY2022 2Q *1 • Revenue increased due to selling price increases mainly in decorative business, new consolidation of Cromology and F/X changes • Operating profit declined, despite progress with selling price increases, due to higher raw material
Slide 4: Summary: FY2022 Forecast
2. Summary: FY2022 Forecast • Revised the Feb. 2022 guidance upwards: Revenue forecast revision due to selling price increases, positive F/X contributions and new consolidation. Operating profit forecast was reduced due to a provision for potential FY2022 credit loss in China, and application of hyp
Slide 5: Raw Material Market Conditions and Our Responses
3. Raw Material Market Conditions and Our Responses Strategic pricing actions will continue for improving OP margin from 2H 2Q 2022 3Q 2022 and beyond • Crude oil prices have remained above USD100 due to bans on • FY2022 guidance announced in February assumed Russian oil imports because of the Ukrai
Slide 6: Market & Business Environment
4. Market & Business Environment Expect decorative market to remain relatively robust and automotive market to recover in Japan Japan Asia (Nipsea China) Oceania Americas Europe Automotive 2Q Decorative DIY Project Automotive 3Q (outlook) Decorative DIY Project ■ Market (YoY) ■Business (vs. Market)*
Slide 7: Summary of Operating Results in Major Segments (2Q FY2022)
5. Summary of Operating Results in Major Segments (2Q FY2022) Tanshin Non-GAAP (Billion yen) Overview 2Q 2022 YoY 2Q 2022 YoY ▶Decorative Higher revenue due to stronger market conditions compared to 2Q 2021, coupled with higher unit prices due Revenue 45.7 4.0% 45.2 2.9% to pricing actions ▶Automoti
Slide 8: Major Topics 1: Hyperinflation accounting for Turkish subsidiaries
6. Major Topics ① Application of hyperinflation accounting for Turkish subsidiaries ◆ Outline and background • IAS 29 of IFRS requires the financial statements of a company with a functional currency that is hyperinflationary to be restated for changes in the general pricing power of the functional
Slide 9: Major Topics 2: Next Career Plan early retirement program
6. Major Topics ② “Next Career Plan” voluntary early retirement program (announced on June 17) • Implement a Next Career Plan early retirement program targeting employees within certain age groups from Group companies in Japan. The aim is to transform our organizational structure for high growth pot
Slide 10: Major Topics 3: M&A updates
6. Major Topics ③ M&A updates ◆ JUB (acquisition closed on May 31, 2022) • Started the shift to a new management structure as a partner company of DuluxGroup • JUB started contributing to consolidated earnings from June 2022 ◆ Five Chinese consolidated automotive coatings subsidiaries (acquisition c
Slide 11: Major Topics 4: ESG index selections
6. Major Topics ④ Selected for the first time as a constituent of FTSE4Good Index Series and FTSE Blossom Japan Index (announced on June 20) Selected for the first time as a constituent of MSCI Japan ESG Select Leaders Index (announced on July 4) • NPHD has been selected as a constituent of all the
Slide 12: Major Topics 5: TSE Prime Market listing criteria
6. Major Topics ⑤ Expect to meet the listing maintenance criteria for the TSE’s Prime Market as a result of increase in our stock free float ratio • Non-tradable shares held by some shareholders have been confirmed to be for pure investment purposes and traded within the past five years. If TSE's es
Slide 13: Supplemental Material
Supplemental Material 1. FY2022 2Q Results: Highlights … P.14 2. FY2022 2Q Results: By Segment … P.17 3. FY2022 Forecast … P.26 4. FY2022 1H Results … P.30 (Appendix) Reference Data
Slide 14: FY2022 2Q Results: Highlights
1. FY2022 2Q Results: Highlights 14
Slide 15: Highlights (Consolidated)
1-1．Highlights (Consolidated) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY *1 2Q 2Q (％) 2Q *1 2Q (Amount) (％) Revenue 259.1 337.0 30.0% 259.1 288.3 29.2 11.3% Operating profit 24.3 20.8 -14.2% 25.0 25.6 0.7 2.7% OP margin 9.4% 6.2% -3.2pt 9.6% 8.9% - -0.
Slide 16: 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 *1 2Q 2Q (％) 2Q 2Q (Amount) (％) Revenue 43.9 45.7 4.0% 43.9 45.2 1.3 2.9% Japan OP profit*2 2.8 2.2 -19.9% 2.8
Slide 17: FY2022 2Q Results: By Segment
2. FY2022 2Q Results: By Segment 17
Slide 18: Revenue and Operating Profit Analysis (FY2022 2Q)
2-1．Revenue and Operating Profit Analysis (FY2022 2Q) (Billion yen) Paint and Coatings Business *1 Revenue Non-GAAP basis +11.3% (+29.2) Tanshin basis +30.0% (+77.9) *2 *3 Operating Profit Non-GAAP basis +0.7 *1 Products included in the Paint and Coatings Business such as semi-finished products and
Slide 19: Japan
2-2．Japan (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) 2Q 2Q (％) 2Q 2Q (Amount) (％) Automotive coatings 8.5 7.4 -13.7% 8.5 7.4 -1.2 -13.7% Decorative paints 11.9 12.8 7.4% 11.9 12.8 0.9 7.4% Industrial coatings 9.6 10.2 6.
Slide 20: Nipsea (Nipsea China)
2-3．Nipsea (Nipsea China) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) 2Q 2Q (％) 2Q 2Q (Amount) (％) Automotive coatings 9.8 10.0 1.8% 9.8 8.6 -1.2 -12.1% Decorative paints 85.0 104.9 23.5% 84.9 91.0 6.1 7.1% Revenue Indust
Slide 21: Nipsea (Asia Excepting Nipsea China)
2-4．Nipsea (Asia Excepting Nipsea China*1) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) *2 2Q 2Q*2 (％) 2Q 2Q (Amount) (％) Revenue 49.3 64.8 31.5% 49.3 71.5 22.2 45.0% Operating profit 7.6 7.6 -0.0% 7.6 7.5 -0.1 -1.9% OP ma
Slide 22: PT Nipsea (Indonesia) and Betek Boya (Turkey)
2-5．PT Nipsea (Indonesia) and Betek Boya (Turkey) Results (Tanshin) Results (Non-GAAP) (Billion yen) PT Nipsea (Indonesia) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Betek Boya (Turkey) 2Q 2Q (％) 2Q 2Q (Amount) (％) Quarterly performance (Tanshin) Quarterly performance (Tanshin) Revenue 9.7 11.9 22.5% 9
Slide 23: DuluxGroup
2-6．DuluxGroup*1 (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) 2Q 2Q (％) 2Q 2Q (Amount) (％) Decorative paints 21.6 51.7 139.7% 21.6 22.3 0.7 3.4% Industrial coatings 1.9 2.3 19.6% 1.9 2.1 0.2 9.2% Revenue Paint related busi
Slide 24: New Consolidation: Cromology (Europe) and JUB (Europe)
2-7．New Consolidation: Cromology (Europe) and JUB (Europe) Results (Tanshin) Results (Non-GAAP) (Billion yen) Cromology (Europe) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY JUB (Europe) 2Q 2Q (％) 2Q 2Q (Amount) (％) Quarterly performance (Tanshin) Quarterly performance (Tanshin) Revenue - 28.1 - - - - -
Slide 25: Americas
2-8．Americas (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Quarterly performance (Tanshin) 2Q 2Q (％) 2Q 2Q (Amount) (％) Automotive coatings 6.1 7.6 24.9% 6.1 6.4 0.3 4.4% Decorative paints 14.3 17.8 24.6% 14.3 15.0 0.7 4.7% Revenue Fine chemicals 0.3 0.3
Slide 26: FY2022 Forecast
«ey NIPPON PAINT HOLDINGS CO, LTD. 3. F¥Y2022 Forecast
Slide 27: FY2022 Forecast
3-1．FY2022 Forecast (Billion yen) Tanshin FY2021 *1 FY2022 FY2021 Results Feb. Forecast Aug. Forecast vs. vs. Results Feb. Forecast Aug. Forecast Aug. Forecast (Revised) Revenue 998.3 1,200.0 1,320.0 32.2% 10.0% Operating profit 87.6 115.0 105.0 19.8% -8.7% OP margin 8.8% 9.6% 8.0% -0.8pt -1.6pt Pro
Slide 28: Revenue and Operating Profit Analysis (Full Year Outlook)
3-2．Revenue and Operating Profit Analysis (Full Year Outlook) Revenue Operating profit (Billion yen) (Billion yen) August 2022 forecast (vs. February 2022 forecast) • Japan ： Reduced revenue forecast despite customers’ acceptance of selling price increases in every business, due to lower automobile
Slide 29: Assumptions for FY2022 Forecast (New Business Segment Basis)
3-3．Assumptions for FY2022 Forecast (New Business Segment Basis) (Billion yen) FY2021 Results*1 FY2022 Outlook (In Local Currency) (Tanshin basis) Feb. 2022 Forecast Aug. 2022 Forecast YoY *2 YoY YoY *2 YoY (OP margin) Revenue OP margin YoY (Revenue) vs As of Feb. (OP margin) (Revenue) (OP margin) S
Slide 30: FY2022 1H Results
((@)) NIPPON PAINT HOLDINGS CO, LTD. 4. FY2022 1H Results
Slide 31: Highlights (Consolidated) 1H
4-1．Highlights (Consolidated) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1H *1 1H (％) 1H *1 1H (Amount) (％) Revenue 481.8 622.0 29.1% 481.6 541.2 59.7 12.4% Operating profit 49.0 44.2 -9.7% 51.8 46.9 -4.9 -9.5% OP margin 10.2% 7.1% -3.1pt 10.8% 8.7% -
Slide 32: Highlights (by Segment) 1H
4-2．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 *1 1H 1H (％) 1H 1H (Amount) (％) Revenue 86.6 87.5 1.0% 86.6 86.8 0.2 0.2% Japan OP profit*2 7.1 2.5 -64.1% 7.1
Slide 33: Revenue and Operating Profit Analysis (FY2022 1H)
4-3．Revenue and Operating Profit Analysis (FY2022 1H) (Billion yen) Paint and Coatings Business *1 Revenue Non-GAAP basis +12.4% (+59.7) Tanshin basis +29.1% (+140.2) *2 Operating Profit Non-GAAP basis -4.9 *1 Products included in the Paint and Coatings Business such as semi-finished products and fi
Slide 34: Japan & Nipsea China
4-4．Japan & Nipsea China (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1H 1H (％) 1H 1H (Amount) (％) Automotive coatings 18.7 16.0 -14.5% 18.7 16.0 -2.7 -14.5% Decorative paints 21.8 23.2 6.2% 21.8 23.2 1.4 6.2% Industrial coatings 18.6 19.3 3.9% 18.6 19.3
Slide 35: Asia Excepting Nipsea China, PT Nipsea, Betek Boya
4-5．Asia Excepting Nipsea China & PT Nipsea (Indonesia) & Betek Boya (Turkey) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY Asia Excepting 1H 1H (％) 1H 1H (Amount) (％) Revenue 97.2 122.2 25.7% 97.2 133.8 36.6 37.7% Nipsea China Operating profit OP margin
Slide 36: DuluxGroup, Cromology and JUB
4-6．DuluxGroup & New Consolidation: Cromology (Europe) & JUB (Europe) (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1H 1H (％) 1H 1H (Amount) (％) Decorative paints 43.1 96.0 122.6% 43.1 45.2 2.1 4.9% Industrial coatings 3.5 4.2 21.2% 3.5 4.0 0.5 13.7% Dulu
Slide 37: Americas
4-7．Americas (Billion yen) Results (Tanshin) Results (Non-GAAP) FY2021 FY2022 YoY FY2021 FY2022 YoY YoY 1H 1H (％) 1H 1H (Amount) (％) Automotive coatings 12.3 14.6 18.9% 12.3 12.7 0.4 3.5% Decorative paints 25.5 32.1 25.9% 25.5 28.0 2.5 9.6% Americas Revenue Fine chemicals 0.6 0.7 8.5% 0.6 0.6 -0.0 -
Slide 38: 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 39: FY2022 2Q Financial Results Reference Data
FY2022 2Q Financial Results Presentation Material Reference Data August 10, 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 & Op
Slide 40: Revenue & Operating Profit Transition by Segment (Former Segment)
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 41: Revenue & Operating Profit Transition by Segment (Former Segment)
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 42: Transition by Segment (New Segment): Japan and DuluxGroup
2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) (Billion yen) FY2021※1 FY2022 1Q 2Q 3Q 4Q Full Year 1Q 2Q Automotive 10.2 8.5 7.6 8.9 35.3 8.7 7.4 Decorative 9.9 11.9 11.4 12.1 45.4 10.4 12.8 Industrial 9.0 9.6 9.6 10.0 38.1 9.1 10.2 Fine chemicals 2.3 2.4 2.0 1.8 8.4 2.
Slide 43: Transition by Segment (New Segment): Nipsea
2. Revenue & Operating Profit Transition by Segment (New Reportable Segment) (Billion yen) FY2021※1 FY2022 1Q 2Q 3Q 4Q Full Year 1Q 2Q Automotive 18.6 18.4 16.0 21.0 74.1 21.2 20.3 Decorative 85.5 112.2 114.4 107.4 419.5 111.8 140.2 Industrial 8.9 10.4 9.9 10.1 39.3 9.4 11.5 Fine chemicals 1.6 1.7 1
Slide 44: Contribution from DuluxGroup, Betek Boya, PT Nipsea, Cromology and JUB
3. Revenue & Operating Profit Contribution from DuluxGroup, Betek Boya, PT Nipsea, Cromology and JUB (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 2Q DuluxGroup Revenue Before 13.1 34.4 47.6 31.8 35.0 40.3 41.2 148.3 41.5 42.7
Slide 45: Breakdown of Adjustments (2Q): DuluxGroup
4. Breakdown of Adjustments (FY2021 2Q vs. FY2022 2Q) FY2021 2Q FY2022 2Q (Billion yen) M&A Provison New M&A Provison New Subsidy, Subsidy, FX related for bad acqui- Total FX related for bad acqui- Total etc.※1 etc.※1 expense debt sitions expense debt sitions Automotive - - - - - - - - - - - - Decor
Slide 46: Breakdown of Adjustments (2Q): Nipsea
4. Breakdown of Adjustments (FY2021 2Q vs. FY2022 2Q) FY2021 2Q FY2022 2Q (Billion yen) M&A Provison New M&A Provison New Subsidy, Subsidy, FX related for bad acqui- Total FX related for bad acqui- Total etc.※1 etc.※1 expense debt sitions expense debt sitions Automotive -0.0 - - - - -0.0 2.3 - - - -
Slide 47: Breakdown of Adjustments (1H): DuluxGroup
5. Breakdown of Adjustments (FY2021 1H vs. FY2022 1H) FY2021 1H FY2022 1H (Billion yen) M&A Provison New M&A Provison New Subsidy, Subsidy, FX related for bad acqui- Total FX related for bad acqui- Total etc.※1 etc.※1 expense debt sitions expense debt sitions Automotive - - - - - - - - - - - - Decor
Slide 48: Breakdown of Adjustments (1H): Nipsea
5. Breakdown of Adjustments (FY2021 1H vs. FY2022 1H) FY2021 1H FY2022 1H (Billion yen) M&A Provison New M&A Provison New Subsidy, Subsidy, FX related for bad acqui- Total FX related for bad acqui- Total etc.※1 etc.※1 expense debt sitions expense debt sitions Automotive 0.0 - - - - 0.0 3.9 - - - - 3
Slide 49: Key Financial Data
6. Key Financial Data ＜Capital Expenditure, Depreciation, R&D Expenses> FY2021 FY2021 FY2022 FY2022 (Billion yen) 1Q 2Q 1Q 2Q Capital Property, plant and 8.8 10.5 11.3 11.3 Intangible assets 0.9 1.2 1.2 0.3 expenditure Total 9.7 11.7 12.6 11.6 Property, plant and 6.7 6.8 8.0 8.7 Depreciation Intangi
Slide 50: Key Market Data
7. 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 2Q ※1 Japan (10,000t) 44 43 44 47 178 43 43 43 43 172 40 36 38 42 156 40 40 40 41 161 39 25 ※1 Source: Japan Paint Manufacturers Assoc