Nippon Paint Holdings Co., Ltd. · TSE:4612
Nippon Paint — Q3 2020 Earnings Presentation
56 slides from Nippon Paint's earnings presentation, Nov 13, 2020
Slide 1: FY2020 3Q Financial Results Presentation Material
November 13, 2020 FY2020 3Q Financial Results Presentation Material
Slide 2: Contents
Contents 1. Summary of Today’s Presentation / Topics ・・・ P.3 2. FY2020 3Q Highlights ・・・ P.14 3. FY2020 3Q Results (by Region) ・・・ P.17 4. FY2020 Forecast ・・・ P.26 5. Reference -(1) FY2020 9 Month Highlights ・・・ P.34 -(2) FY2020 9 Month Results (by Region) ・・・ P.38 -(3) Breakdown of Adjustments ・・・
Slide 3: Summary of Today's Presentation (1)
1-1． Summary of Today’s Presentation (1) ・FY2020 3Q Results (YoY): ‘Tanshin’/Revenue: +18.7%, operating profit: +17.3% ‘Non-GAAP’/Revenue: +6.8%, operating profit: +6.7% FY2020 3Q ・China economy has grown 4.9%. NIPSEA China business has achieved higher YoY Growth Rate revenue 18% and profit 38% comp
Slide 4: Summary of Today's Presentation (2)
1-1． Summary of Today’s Presentation (2) ・COVID impact easing globally but the risk of market deterioration remains in some regions due to the resurgence of new cases. Still difficult to reasonably estimate final demand but updated FY2020 FY2020 guidance to reflect strong 3Q earnings Consolidated ・F
Slide 5: Summary of Market Conditions in Major Regions (1)
1-2． Summary of Market Conditions in Major Regions (1) Market and business conditions in major regions Decorative: 3Q demand remained weak due to COVID and to a long rainy season and typhoons. Demand to recover from weakness in 2019 following the consumption tax hike. However, slow recovery seen, no
Slide 6: Summary of Market Conditions in Major Regions (2)
1-2． Summary of Market Conditions in Major Regions (2) Market conditions in major regions Higher YoY sales across all business (+9%/reference value) with COVID enhanced home improvement activity continuing, regardless of stay-at-home restrictions. While DIY activity Oceania remained very strong in 3
Slide 7: Major Topics After the 2Q Results Announcement ①
1-3． Major Topics After the 2Q Results Announcement ① Acquisition of Asian JV Stake and Indonesia Business (announced on August 21) ・Decided to acquire 100% ownership of Asian JVs and Indonesia Business ・Transaction will enable full capture of growing Asian businesses, realizing substantial profit g
Slide 8: Major Topics After the 2Q Results Announcement ②
1-3． Major Topics After the 2Q Results Announcement ② Developed “PROTECTON,” a new brand specialized in anti-viral and anti- bacterial products (announced on September 4) ・Anti-viral and anti-bacterial products, not limited to paint, are to be developed using this new brand, with applications rangin
Slide 9: Major Topics After the 2Q Results Announcement ③
1-3． Major Topics After the 2Q Results Announcement ③ Launched a new company commercial in Japan from October 3 featuring the excitement and fascination of paint (announced on September 28) ・Actress Mikako Tabe is the brand ambassador to promote PAINT.WONDER, a world of paint and coatings technology
Slide 10: Major Topics After the 2Q Results Announcement ④
1-3． Major Topics After the 2Q Results Announcement ④ Published Integrated Report 2020 (released on September 30) ・New content and design from the previous year’s report ・The report explains the strategic story of aiming for the Maximization of Shareholder Value (MSV), which is our paramount mission
Slide 11: Major Topics After the 2Q Results Announcement ⑤
1-3． Major Topics After the 2Q Results Announcement ⑤ Improving information disclosure through the IR website (contents launched successively by September 30) ・Enhanced the content of our IR website to provide information necessary for communications with Japanese and international investors and ana
Slide 12: Major Topics After the 2Q Results Announcement ⑥
1-3． Major Topics After the 2Q Results Announcement ⑥ Global integration of automotive coatings business (announced on October 1) ・Realign automotive coatings and motorcycle coatings operations in Japan, China and other Asian countries, Europe and the Americas on January 1, 2021, with Nippon Paint A
Slide 13: Major Topics After the 2Q Results Announcement ⑦
1-3． Major Topics After the 2Q Results Announcement ⑦ Established an ESG Statement and Identified Materiality (released on October 30) ・The ESG Statement, which sets forth our basic policy on ESG management, was established with the participation and input of our overseas partner companies ・Material
Slide 14: FY2020 3Q Highlights
2. FY2020 3Q Highlights Photo image: Betek Boya/ Dolmabahce Palace
Slide 15: FY2020 3Q Highlights
2-1． FY2020 3Q Highlights (Billion yen) Results(Tanshin) Results(Non-GAAP) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Revenue 182.7 216.9 18.7% 182.7 195.1 12.5 6.8% Operating profit 24.4 28.6 17.3% 23.6 25.2 1.6 6.7% OP margin 13.4% 13.2% -0.2pt 12.9% 12.9% - -0.0pt Profit
Slide 16: FY2020 3Q Highlights (Revenue & Operating Profit by Region)
2-2． FY2020 3Q Highlights (Revenue & Operating Profit by Region) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Revenue 46.4 39.9 -14.0% 46.4 39.9 -6.5 -14.0% Japan ※ OP profit 5.2 2.0 -62.5% 6.3 2.1 -4.2 -67.4% Revenue 93.4 103.
Slide 17: FY2020 3Q Results (by Region)
3. FY2020 3Q Results (by Region) Photo image: Dunn-Edwards
Slide 18: Market & Business Environment (3Q)
3-1．Market & Business Environment (3Q) 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 is recovering in most regions, alth
Slide 19: Operating Profit Gap Analysis for 3Q
3-2．Operating Profit Gap Analysis for 3Q （Billion yen） Major reasons for changes ✓Japan: Lower profit due to slow recovery from the COVID impact in all businesses ✓China: Higher profit on higher revenue due to DIY recovery from COVID impact and strong growth for project construction segment ✓Europe:
Slide 20: Analysis of Regional Performance (Japan)
3-3．Analysis of Regional Performance (Japan) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 11.3 8.8 -22.1% 11.3 8.8 -2.5 -22.1% Decorative paints 12.6 10.6 -16.2% 12.6 10.6 -2.0 -16.2% Industrial coatings 10.
Slide 21: Analysis of Regional Performance (NIPSEA China)
3-4．Analysis of Regional Performance (NIPSEA China) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 7.5 8.5 13.6% 7.3 8.6 1.3 17.1% Decorative paints 55.3 65.2 17.9% 55.6 65.8 10.3 18.5% Revenue Industrial coat
Slide 22: Analysis of Regional Performance (Asia Excepting NIPSEA China)
3-5．Analysis of Regional Performance (Asia Excepting for NIPSEA China) (Billion yen) Results(Tanshin) Results(Non-GAAP) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Revenue 25.1 23.8 -5.2% 25.1 24.2 -0.9 -3.5% Operating profit 3.0 3.6 18.5% 3.0 3.5 0.5 16.3% OP margin 12.2% 1
Slide 23: Analysis of Regional Performance (Oceania)
3-6．Analysis of Regional Performance (Oceania) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Decorative paints 6.6 20.0 204.5% 6.6 6.9 0.3 5.1% Industrial coatings 0.5 1.6 229.6% 0.5 0.5 0.0 8.0% Revenue Paint related business 6
Slide 24: Analysis of Regional Performance (Americas)
3-7．Analysis of Regional Performance (Americas) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 6.3 6.4 1.5% 6.3 6.6 0.3 5.2% Decorative paints 12.1 12.4 2.5% 12.1 12.7 0.6 4.8% Revenue Fine chemicals 0.7 0.6 -
Slide 25: Analysis of Regional Performance (Other)
3-8．Analysis of Regional Performance (Other) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 3Q 3Q (％) 3Q 3Q (Amount) (％) Automotive coatings 2.6 2.3 -9.8% 2.6 2.4 -0.2 -8.3% Decorative paints 4.7 6.8 47.0% 4.7 8.7 4.0 86.9% Industrial coatings 0.8 1.0 20.7%
Slide 26: FY2020 Forecast
4. FY2020 Forecast The logo of PROTECTON: a new brand specialized in anti-viral and anti-bacterial products
Slide 27: FY2020 Forecast
4-1. FY2020 Forecast ※1 Results (Tanshin) Constant Exchange Rate Basis (Billion yen) FY2020 Forecast FY2020 Forecast vs. Previous vs. Previous vs. Previous vs. Previous As of Nov. Forecast (%) Forecast (%) As of Nov. Forecast (%) Forecast (%) As of May As of Aug. As of May As of Aug. (current) （May
Slide 28: FY2020 4Q Forecast
4-2. FY2020 4Q Forecast Results (Tanshin) (Billion yen) FY2019 FY2020 YoY YoY 4Q Forecast (Amount) (%) 4Q Results (as of Nov.) Revenue 196.9 197.7 0.8 0.4% Operating profit 22.9 12.7 -10.2 -44.5% (excl. impairment loss in FY2019) Operating profit 11.6 12.7 1.1 9.5% OP margin 5.9% 6.4% - 0.5pt Profit
Slide 29: Market & Business Environment (4Q)
4-3．Market & Business Environment (4Q) Japan Asia (NIPSEA China) Oceania Americas Automotive Decorative DIY Project ■ Market (YoY) Strong Weak Market analysis ✓Automotive: In Japan, car production recovery to continue from 3Q but remain below prior-year level In China, market growth likely to be slo
Slide 30: Various Assumptions for the FY2020 Forecast (1)
4-4．Various Assumptions for the FY2020 Forecast (1) NIPSEA China YoY(Forecast YoY(Forecast Revenue Qualitative Information as of Nov.※) as of Aug.※) NIPSEA China 0%～+5% 0%～-5% Decorative Improved Chinese consumer post COVID. Demand recovery for (DIY) 0%～+5% repainting existing houses following lifti
Slide 31: Various Assumptions for the FY2020 Forecast (2)
4-4．Various Assumptions for the FY2020 Forecast (2) Japan YoY (Forecast YoY(Forecast Revenue Qualitative Information as of Nov.※) as of Aug.※) Japan No change -10%～-20% Automotive A smaller revenue decline due to slightly stronger recovery of -20%～-30% -25%～-35% auto market compared to August assump
Slide 32: Various Assumptions for the FY2020 Forecast (3)
4-4．Various Assumptions for the FY2020 Forecast (3) Americas YoY(Forecast YoY(Forecast Revenue Qualitative Information as of Nov.※1) as of Aug.※1) Americas No change -5%～-10% Automotive 3Q production increased as assumed in 2Q due to low inventory at customers, but the market slowdown remains a caus
Slide 33: Various Assumptions for the FY2020 Forecast (4)
4-4．Various Assumptions for the FY2020 Forecast (4) Current FY2020 Forecast (YoY Growth Rates※1) FY2019 Results (¥ bn) Revenue Full-year 4Q Full-year 4Q NIPSEA China 0%～+5% 0%～+5% 257.5 61.2 Decorative (DIY) 0%～+5% +5%～+10% 202.7 47.7 Decorative (PRJ) +15%～+25% +10%～+20% Automotive -5%～-10% -5%～-10%
Slide 34: Reference: FY2020 9 Month Highlights
5-(1) Reference: FY2020 9 Month Highlights
Slide 35: FY2020 9 Month Highlights
5-(1)-1．FY2020 9 Month Highlights (Billion yen) Results(Tanshin) Results(Non-GAAP) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 9 month 9 month (％) 9 month 9 month (Amount) (％) Revenue 495.1 562.3 13.6% 495.2 467.7 -27.5 -5.6% Operating profit 66.4 63.3 -4.6% 63.6 48.9 -14.8 -23.2% OP margin 13.4% 11.3%
Slide 36: Operating Profit Gap Analysis (Based on Non-GAAP Results)
5-(1)-2．Operating Profit Gap Analysis (Based on Non-GAAP Results) （Billion yen） Gap(Non-GAAP) -14.8 36
Slide 37: FY2020 9 Month Highlights (Revenue & Operating Profit by Region)
5-(1)-3．FY2020 9 Month Highlights (Revenue & Operating Profit by Region) Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 9 month 9 month (％) 9 month 9 month (Amount) (％) Revenue 136.5 115.6 -15.3% 136.5 115.6 -20.9 -15.3% Japan OP profit※ 19.2 4.9 -74.5% 19.2
Slide 38: Reference: FY2020 9 Month Results (by Region)
5-(2) Reference: FY2020 9 Month Results (by Region)
Slide 39: Analysis of Regional Performance / Japan & NIPSEA China
5-(2)-1．Analysis of Regional Performance / Japan & NIPSEA China Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 9 month 9 month (％) 9 month 9 month (Amount) (％) Automotive coatings 34.7 24.6 -29.1% 34.7 24.6 -10.1 -29.1% Decorative paints 36.4 32.0 -12.3% 36.
Slide 40: Analysis of Regional Performance / Asia Excepting NIPSEA China & Oceania
5-(2)-2．Analysis of Regional Performance/Asia Excepting for NIPSEA China & Oceania Results(Tanshin) Results(Non-GAAP) Asia (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY Excepting 9 month 9 month (％) 9 month 9 month (Amount) (％) for NIPSEA Revenue 74.8 61.1 -18.3% 74.8 63.3 -11.4 -15.3% Opera
Slide 41: Analysis of Regional Performance / Americas & Other
5-(2)-3．Analysis of Regional Performance / Americas & Other Results(Tanshin) Results(Non-GAAP) (Billion yen) FY2019 FY2020 YoY FY2019 FY2020 YoY YoY 9 month 9 month (％) 9 month 9 month (Amount) (％) Automotive coatings 19.8 14.8 -24.9% 19.8 15.3 -4.4 -22.4% Decorative paints 34.7 35.2 1.5% 34.7 35.9
Slide 42: Reference: Breakdown of Adjustments
5-(3) Reference: Breakdown of Adjustments
Slide 43: Breakdown of Adjustments (FY2019 3Q vs. FY2020 3Q)
5-(3)-1．Breakdown of Adjustments (FY2019 3Q vs. FY2020 3Q) (Billion yen) FY2019 3Q FY2020 3Q M&A Suspension New M&A Suspension New Subsidy, of amortiza- Subsidy, of amortiza- FX related acqui- Total FX related acqui- Total Insurance tion of IA※2 Insurance tion of IA※2 cost sitions cost sitions Autom
Slide 44: Breakdown of Adjustments (FY2019 3Q vs. FY2020 3Q)
5-(3)-2．Breakdown of Adjustments (FY2019 3Q vs. FY2020 3Q) (Billion yen) FY2019 3Q FY2020 3Q M&A Suspension New M&A Suspension of New Subsidy, of amortiza- Subsidy, amortiza- FX related acqui- Total FX related acqui- Total Insurance tion of IA ※2 Insurance tion of IA ※2※3 cost sitions cost sitions A
Slide 45: Breakdown of Adjustments (FY2019 9 Month vs. FY2020 9 Month)
5-(3)-3．Breakdown of Adjustments(FY2019 9 Month vs. FY2020 9 Month) (Billion yen) FY2019 9 month FY2020 9 month M&A Suspension of New M&A Suspension of New Subsidy, amortiza- Subsidy, amortiza- FX related acqui- Total FX related acqui- Total Insurance tion of IA※2 Insurance tion of IA※2 cost sitions
Slide 46: Breakdown of Adjustments (FY2019 9 Month vs. FY2020 9 Month)
5-(3)-4．Breakdown of Adjustments(FY2019 9 Month vs. FY2020 9 Month) (Billion yen) FY2019 9 month FY2020 9 month M&A Suspension of New M&A Suspension of New Subsidy, amortiza- Subsidy, amortiza- FX related acqui- Total FX related acqui- Total Insurance tion of IA※2 Insurance tion of IA※2※3 cost sitio
Slide 47: Reference: Partial Revision of Adjustments for Prior Periods
5-(4) Reference: Partial Revision of Adjustments for Prior Periods
Slide 48: Partial Revision of Adjustments for Prior Periods ①
5-(4)．Partial Revision of Adjustments for Prior Periods ① ・’Non-GAAP’ adjustment figures shown in Breakdown of Adjustment Items in FY2020 2Q Financial Results Presentation Material, dated August 14, 2020, were partially revised to conform to figures disclosed for prior periods ・No change was made to
Slide 49: Partial Revision of Adjustments for Prior Periods ②
5-(4)．Partial Revision of Adjustments for Prior Periods ② P.43 4-(3)-7 Breakdown of the Adjustment Items （FY2018 3Q vs. FY2019 3Q) Before revision After revision P.44 4-(3)-8 Breakdown of the Adjustment Items (FY2018 3Q vs. FY2019 3Q) Before revision After revision ※Revised figures are shown in
Slide 50: Reference: Performance Indicators
5-(5) Reference: Performance Indicators
Slide 51: Revenue & Operating Profit Transition by Region ①
5-(5)-1．Revenue & Operating Profit Transition by Region ① FY2018(IFRS) FY2019(IFRS) FY2020(IFRS) (Billion yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Automotive 11.5 11.1 10.6 12.1 11.9 11.4 11.3 10.2 10.3 5.5 8.8 Decorative 10.6 12.0 11.2 13.0 11.0 12.8 12.6 11.8 10.3 11.1 10.6 Industrial 9.5 10.0 10.0 1
Slide 52: Revenue & Operating Profit Transition by Region ②
5-(5)-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 Automotive 18.5 19.6 17.6 18.5 16.5 17.2 15.9 17.5 12.4 11.4 15.7 Decorative 54.6 62.2 64.0 50.2 54.3 65.6 65.3 58.5 40.5 66.0 75.3 Industrial 6.4 7.6 7.5 6
Slide 53: Statement of Financial Position
5-(5)-3．Statement of Financial Position (Billion yen) As of As of As of As of Increase / Increase / Assets Dec. 31, Sep. 30, Liabilities and equity Dec. 31, Sep. 30, Decrease Decrease 2019 2020 2019 2020 Total current assets 507.2 550.2 43.0 Total liabilities 790.7 820.7 30.1 Cash and cash equivalen
Slide 54: Capital Expenditure, Depreciation, R&D Expenses, etc.
5-(5)-4．Capital Expenditure, Depreciation, R&D Expenses, etc. ＜Capital Expenditure, Depreciation, R&D Expenses, etc.> (Billion yen) FY2019 FY2020 9 months 9 months Property, plant and 22.1 27.7 equipment Capital Intangible assets 1.6 2.3 expenditure Total 23.7 30.0 Property, plant and 12.4 16.9 equi
Slide 55: FX Rates & Market Conditions
5-(5)-5．FX Rates & Market Conditions <Exchange rate for P/L(average rate)> <Exchange rate for F/P(closing rate)> FY2020 4Q As of As of FY2019 FY2020 FY2020 FY2020 2H FY2019 (Current Dec. 31, Sep. 30, 3Q 3Q (as of May) (as of Aug.) forcast) 2019 2020 JPY/USD 109.2 109.2 107.2 107.0 107.7 105.8 JPY/US
Slide 56: Nippon Paint Holdings Co., Ltd. Investor Relations
NIPPON PAINT HOLDINGS CO., LTD. Investor Relations Email: [email protected] 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
Nippon Paint Holdings — Q3 2020 Earnings Presentation on 6ix