Kansai Paint : Consolidated Financial Results for the Fiscal Year Ended March 31, 2021

Fiscal Year ending March 31, 2022 (Forecast)

Fiscal Year ended March 31, 2021

Fiscal Year ended March 31, 2020

2. Dividends

Fiscal Year ended March 31, 2021 Fiscal Year ended March 31, 2020

(3) Consolidated cash flows

As of March 31, 2021

As of March 31, 2020 (Reference) Shareholders' equity:

(2) Consolidated financial positions

Consolidated Financial Results [Japanese GAAP]
	for the Fiscal Year Ended March 31, 2021
	(April 1, 2020 － March 31, 2021)
		May 12, 2021
Company name:	Kansai Paint Co., Ltd.
Stock listing:	Tokyo Stock Exchange
Code number:	4613
URL:	https://www.kansai.co.jp/
Representative:	MORI Kunishi, Representative Director of the Board, President
Contact:	TAKAHARA Shigeki, Senior Managing Executive Officer,
	Chief of Corporate Planning, Finance, HR & Administration
Telephone:	[phone]
Scheduled date of the annual shareholders' meeting:	June 29, 2021
Scheduled date of the filing of Securities Report:		June 30, 2021
Scheduled date of dividend payment:		June 30, 2021
Supplemental information:	Yes
Financial results briefing:	Yes
		(Amounts are rounded down to the nearest million yen)

1. Consolidated financial results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 － March 31, 2021)

(1) Consolidated operating results

(The percentages represent the rates of increase (decrease) compared to the corresponding prior period.)

Fiscal Year ended March 31, 2021 Fiscal Year ended March 31, 2020

(Note) Comprehensive income:

Net sales		Operating income		Ordinary income		Net income attributable to
			owners of the parent
Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
364,620	(10.4)	31,228	(0.9)	35,880	2.9	20,027	8.4
406,886	(4.8)	31,510	(2.5)	34,874	0.1	18,477	6.2

Fiscal Year ended March 31, 2021:		29,550	million yen		189.7%
Fiscal Year ended March 31, 2020:		10,199	million yen		－%
Net income per	Diluted net income				Ordinary		Operating
Return on equity	income - total	income - sales
share		per share
					assets ratio			ratio
	Yen			Yen			%		%		%
Fiscal Year ended March 31, 2021	77.91		72.47			7.2		6.2		8.6
Fiscal Year ended March 31, 2020	71.87		65.71			6.9		6.2		7.7
(Reference) Equity in earnings (losses) of unconsolidated subsidiaries and affiliates:
Fiscal Year ended March 31, 2021:		4,802	million yen
Fiscal Year ended March 31, 2020:		3,990	million yen
Total assets			Net assets	Shareholders' equity ratio	Net assets per share
	Millions of yen		Millions of yen		%		Yen
	606,580			338,859		47.3			1,115.87
	544,123			320,697		49.4			1,045.99
As of March 31, 2021:	286,799	million yen
As of March 31, 2020:	268,877	million yen
Cash flows from		Cash flows from		Cash flows from		equivalents
operating activities		investing activities	financing activities
		at end of fiscal year
	Millions of yen		Millions of yen		Millions of yen		Millions of yen
	42,647				(507)		16,828			108,377
	40,324			(22,045)		(37,403)		50,594
	Dividends per share				Total amounts	Payout ratio	Net asset
				payout ratio
								of dividends	(Consolidated)
1st Quarter 2nd Quarter 3rd Quarter	Year-end	Total		(Consolidated)
Yen	Yen		Yen		Yen	Yen	Millions of yen		%	%
－	15.00		－	15.00	30.00		7,746		41.7	2.9
－	15.00		－	15.00	30.00		7,746		38.5	2.8
－	15.00		－	15.00	30.00				29.7

3. Consolidated financial forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 － March 31, 2022)

(The percentages represent the rates of increase (decrease) compared to the corresponding prior period.)

		Net sales		Operating income	Ordinary income	Net income attributable
			to owners of the parent
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Full Year	400,000	9.7	38,000	21.7	44,000	22.6	26,000	29.8
*Notes
(1) Changes in significant subsidiaries during the period
(changes in specified subsidiaries due to changes in scope of consolidation):				None
(2) Changes in accounting policies, changes in accounting estimates, and retrospective restatement
1.	Changes in accounting policies in accordance with revision of accounting standards:			None
2.	Changes in accounting policies other than 1. above:						None
3.	Changes in accounting estimates:							None
4.	Retrospective restatement:							None

1. Number of shares of common stock issued

1. Number of shares of common stock issued at period-end (including treasury stock):

	As of March 31, 2021:	272,623,270	shares
	As of March 31, 2020:	272,623,270	shares
2.	Number of shares of treasury stock at period-end:
	As of March 31, 2021:	15,603,530	shares
	As of March 31, 2020:	15,567,211	shares
3.	Average number of shares during the period:
	Fiscal Year ended March 31, 2021:	257,051,346	shares
	Fiscal Year ended March 31, 2020:	257,104,459	shares

Net income

per share

Yen

101.16

(Reference) Overview of Non-Consolidated Financial Results for the Year Ended March 31, 2021 (April 1, 2020 － March 31, 2021)

(1) Non-Consolidated operating results

(The percentages represent the rates of increase (decrease) compared to the corresponding prior period.)

Fiscal Year ended March 31, 2021 Fiscal Year ended March 31, 2020

Fiscal Year ended March 31, 2021

Fiscal Year ended March 31, 2020

(2) Non-Consolidated financial positions

As of March 31, 2021

As of March 31, 2020 (Reference) Shareholders' equity:

Net sales		Operating income	Ordinary income	Net income
Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
133,807	(10.0)	10,580	(22.8)	22,834	22.6	18,877	-
148,678	(4.4)	13,702	(7.7)	18,623	(19.3)	(6,694)	-
Net income per	Diluted net income
share	per share
Yen		Yen
73.14	68.04
(25.93)	-
Total assets		Net assets	Shareholders' equity ratio	Net assets per share
Millions of yen	Millions of yen		%		Yen
	386,319		203,554		52.7		788.66
	334,706		189,140		56.5		732.83
As of March 31, 2021:	203,554	million yen
As of March 31, 2020:	189,140	million yen

*Status of the implementation of audit procedures

These financial statements are not subject to the audit procedure of certified public accountant or audit firm.

*Explanation for appropriate use of forecasts and other notes

The forward-looking statements such as operational forecasts contained in this document are based on information currently available to the Company and certain assumptions which are regarded as legitimate. However, it does not mean that we guarantee its achievement. Actual results may differ from such forward-looking statements for a variety of reasons.

Overview of financial results

During the fiscal year under review, the global economy observed a recovery of consumption as a result of the resumption of economic activities despite a temporary slowdown affected by the COVID-19 pandemic from the beginning of the year in addition to concerns over geopolitical risks. Under such circumstances, the Chinese economy recovered quickly from the spread of the COVID-19. The United States, Europe, other Asian emerging countries, and Africa continued to face severe economic conditions while signs of recovery were observed in most of those countries. The Japanese economy saw signs of recovery in capital investment and production, it remained in a difficult condition due to voluntary restraint of economic activities and the deterioration of overseas economies caused by the spread of COVID-19.

The Group's net sales for the fiscal year under review were 364,620 million yen (down 10.4% year on year). Operating income was 31,228 million yen (down 0.9% year on year), impacted by the decreased net sales despite a decline in raw material prices and an internal effort to reduce selling, general and administrative expenses. Ordinary income ended at 35,880 million yen (up 2.9% year on year) due to an increase in equity in earnings of affiliates. While gain on sale of investment securities increased due to the reduction of cross-held shares, there was a loss on disaster in Indonesia and impairment loss of Tangible and Intangible fixed asset in China and Malaysia. As a result, Net income attributable to owners of parent ended at 20,027 million yen (up 8.4% year on year).

Segment overviews are as follows.

In the new car area of the automotive coatings sector, sales decreased year on year, although signs of recovery in automobile production were observed. Sales in the industrial coatings sector decreased year on year as paints for automotive components and construction machinery were negatively affected by production adjustments. The decorative coatings sector saw a year on year increase in sales, reflecting growth in demand for DIY paints. Sales in the marine sector posted a year on year decrease due to the impact of postponement of ship repair works. In the automotive coatings (for refinishing) and the protective coating sectors, sales decreased year on year due to sluggish market conditions.

As a result of those factors, net sales and ordinary income in the segment were 142,999 million yen (down 7.8% year on year) and 15,532 million yen (down 14.4% year on year).

While the automotive coatings sector showed a sign of recovery in the second half of the year, sales fell on a year-on-year basis due to a significant decrease in automobile production in the April-June period. The decorative coatings sector saw a year-on- year decrease in sales due to the impact of lockdowns associated with the spread of COVID-19 at the beginning of the year, although the sector observed a sign of recovery mainly in the suburban market in the second half of the year. Sales in India as a whole decreased year on year. Under these circumstances, profits fell just slightly, reflecting an internal effort to reduce selling, general and administrative expenses in addition to a decline in raw material prices.

As a result of those factors, net sales and ordinary income in the segment were 73,084 million yen (down 10.5% year on year) and 10,198 million yen (down 0.7% year on year).

In Turkey, the industrial coatings and automotive coatings sectors recorded an increase in sales in a local currency, and profits also grew, reflecting a decline in raw material prices. However, the translated result in the Japanese yen was negatively affected by currency conversion. On the other hand, the decorative coatings sector saw an increase in equity in earnings of affiliates supported by the decrease in corporate tax due to privilege measures for capital expenditure in addition to robust demand. In other European countries, while the automotive coatings (for refinishing), the decorative coatings and the protective coating sectors recorded a year-on-year increase in sales on the back of robust demand, sales in the industrial coatings sector faced a year-on-year decrease. As a result, sales in Europe as a whole decreased year on year. Under these circumstances, profits increased, reflecting stable raw material prices, cost reduction efforts and various support by governments.

As a result of those factors, net sales of the segment were 66,002 million yen (down 3.2 % year on year) while ordinary income including the amortization of goodwill ended at 5,220 million yen (up 91.9 % year on year).

Having quickly recovered from a stagnant economy caused by the spread of COVID-19 from the beginning of the year, China saw just a slight decrease in sales compared with the previous year. In Indonesia, Thailand and Malaysia, automobile production decreased year on year due to the spread of COVID-19, resulting in a year on year decrease in net sales despite a sign of recovery in the second half of the year.

As a result of those factors, net sales of the segment were 49,504 million yen (down 17.7% year on year). Ordinary income ended at 4,638 million yen (down 15.0% year on year).

Amid the sluggish economy in South Africa and neighboring countries, net sales of the companies in the South African region significantly decreased year on year additionally due to an economic stagnation caused by the implementation of lockdowns associated with the spread of COVID-19. In the companies in the East African region, the decorative coatings sector recorded growth of sales, reflecting robust demand. However, sales in Africa as a whole fell year on year. Reorganization of unprofitable businesses and internal effort to reduce fixed costs in addition to a decline in raw material prices contributed to limiting losses despite a significant decrease in net sales.

As a result of those factors, net sales of the segment were 27,917 million yen (down 21.9% year on year) while ordinary loss including the amortization of goodwill ended at 858 million yen.

In North America, sales in the industrial coatings sector fell year on year due to stagnant economic activity affected by the spread of COVID-19.

As a result of those factors, net sales of the segment were 5,112 million yen (down 15.1% year on year). Ordinary income ended at 1,149 million yen (down 7.6% year on year).

Consolidated financial statements

(1) Consolidated Balance Sheets		(Millions of yen)
	As of March 31, 2020	As of March 31, 2021
Assets
Current assets
Cash and deposits	58,618	114,292
Trade notes and accounts receivables	101,512	105,129
Securities	4,705	10,154
Finished goods	35,095	35,782
Work-in-process	5,696	5,538
Raw materials and supplies	23,530	24,346
Other	14,932	8,498
Allowance for doubtful receivables	(3,152)	(3,269)
Total current assets	240,938	300,471
Non-current assets
Property, plant and equipment
Buildings and structures, net	58,222	58,119
Machinery, equipment and vehicles, net	31,067	30,024
Tools, furniture and fixtures, net	8,355	6,940
Land	25,041	25,292
Construction in progress	6,732	6,844
Total property, plant and equipment	129,419	127,220
Intangible assets
Leasehold right	3,306	3,011
Software	2,320	2,105
Software in progress	227	302
Goodwill	33,551	29,882
Other	19,000	16,033
Total intangible assets	58,406	51,335
Investments and other assets
Investment securities	76,183	86,942
Investments in capital	17,414	17,611
Loans receivable	2,292	2,255
Net defined benefit asset	9,012	14,588
Deferred tax assets	7,470	3,637
Other	7,626	7,120
Allowance for doubtful receivables	(4,641)	(4,602)
Total investments and other assets	115,358	127,552
Total non-current assets	303,185	306,108
Total assets	544,123	606,580