Nippon Paint : Updated Latest Results and Forecast Page

Latest Results

＜Consolidated Financial Results for the Nine Months Ended September 30, 2021 (January 1, 2021 to September 30, 2021)＞

*: Following the transfer of the European automotive coatings business and the two India businesses to the Wuthelam Group as announced on August 10, 2021, those businesses have been classified as discontinued operations. Revenue, operating profit, and profit before tax figures are for continuing operations only.

During the nine months ended September 30, 2021, consolidated revenue of the Nippon Paint Group increased by 32.3% from the previous year to ¥736,257 million due to the acquisition of 100% ownership of the Asian JVs and the Indonesia business owned by the Wuthelam Group (Wuthelam and Mr. Goh Hup Jin collectively, "Wuthelam and Mr. Goh"; Wuthelam and Mr. Goh, Wuthelam's subsidiaries, and companies substantively controlled by Wuthelam and Mr. Goh are collectively the "Wuthelam Group"), coupled with the strong performance of the decorative paints business in China, which is a key business of the Nippon Paint Group. Consolidated operating profit increased by 3.2% from the previous year to ¥66,737 million on higher revenue despite raw material price increases in many parts of the world. Consolidated profit before tax increased by 1.5% from the previous year to ¥65,988 million, and profit attributable to owners of parent increased by 59.0% to ¥50,308 million.

Japan

Revenue for automotive coatings increased from the previous year due to a higher number of automobiles manufactured despite the impact of semiconductor shortage. Industrial coatings revenue increased due to solid market conditions such as strong new housing starts and the recovery from the COVID-19 downturn in the construction machinery market. Decorative paints revenue increased due to factors such as the restart of delayed construction projects despite the impact of a resurgence of COVID-19.
As a result, consolidated revenue increased by 4.5% from the previous year to ¥122,526 million. Consolidated operating profit declined by 20.2% to ¥8,723 million. Beginning with the first quarter of the current fiscal year, headquarters expenses incurred by NPHD, which were previously allocated to the Japan segment, are classified as "Adjustments" that do not belong to any reportable segment in order to more accurately reflect the performance of each reportable segment.

Asia

Earnings of the Indonesia business have been included in the consolidated performance of the Nippon Paint Group since January 2021. Revenue for automotive coatings increased from the previous year, despite the ongoing impact of semiconductor shortage, due to the increase in the number of automobiles manufactured in China and Thailand during the nine months ended September 30, 2021. Revenue of decorative paints, a mainstay business in Asia, was higher than in the previous year as a result of contributions from the earnings of the Indonesia business, the continuing recovery in demand for repainting interiors of existing homes in China, and market share gains due to aggressive marketing activities in the major markets including China, Malaysia, and Indonesia.
As a result, consolidated revenue increased by 54.6% from the previous year to ¥390,335 million, and consolidated operating profit increased by 15.1% to ¥44,576 million.

Oceania

Revenue for decorative paints increased from the previous year due to the absence of the adverse effects of bushfires and floods in the previous year, coupled with robust demand for home renovations. Revenue for the paint related business increased due to strong demand for home renovations.
As a result, consolidated revenue increased by 19.3% from the previous year to ¥127,776 million, and consolidated operating profit increased by 19.8% to ¥16,432 million.

Americas

Revenue for automotive coatings increased from the previous year due to a higher number of automobile manufactured in the United States, a core region, despite the impact of the semiconductor shortage. Decorative paints revenue increased from the previous year due to factors such as stable housing demand and favorable weather.
As a result, consolidated revenue increased by 10.5% from the previous year to ¥57,640 million. Consolidated operating profit increased by 17.0% to ¥3,940 million.

Other

Revenue for decorative paints and paint related businesses increased due to the continuing brisk market conditions and successful marketing activities.
As a result, consolidated revenue increased by 37.5% from the previous year to ¥37,978 million, and consolidated operating profit increased by 5.1% to ¥4,141 million.

Revenue composition by region (Million yen) ■ Japan: 122,526 ■ Asia: 390,335 ■ Oceania: 127,776 ■ Americas: 57,640 ■ Other: 37,978	Revenue composition by business (Million yen) ■ Automotive coatings: 97,258 ■ Decorative paints: 449,415 ■ Industrial coatings: 62,779 ■ Fine chemicals: 12,342 ■ Other paints: 42,532 ■ Paint related business: 71,929

《Revenue》

(Million yen)

*: Following the transfer of the European automotive coatings business and the two India businesses to the Wuthelam Group as announced on August 10, 2021, those businesses have been classified as discontinued operations. The nine months figures for FY2021 have been adjusted to the amounts for continuing operations excluding the amounts for discontinued operations.

《Operating profit》

(Million yen)

*: Following the transfer of the European automotive coatings business and the two India businesses to the Wuthelam Group as announced on August 10, 2021, those businesses have been classified as discontinued operations. The nine months figures for FY2021 have been adjusted to the amounts for continuing operations excluding the amounts for discontinued operations.

《Profit attributable to owners of parent》

(Million yen)

*: Following the transfer of the European automotive coatings business and the two India businesses to the Wuthelam Group as announced on August 10, 2021, those businesses have been classified as discontinued operations. The amount presented as profit attributable to owners of parent is the aggregate of the amounts for continuing operations and discontinued operations.

Earnings Forecast

＜FY2021 Forecast＞ ※Released on October 12, 2021

《Reasons for Revisions》

The performance of our core decorative paints business has been steadily growing. In our automotive coatings business, however, automobile production has remained below our expectations globally due to the shortage of semiconductor chips and the impact of the COVID-19 pandemic. As a result, our consolidated revenue is projected to be roughly in line with our initial forecast.
In the meantime, the raw materials price inflation has been longer lasting worldwide than we initially anticipated. We responded to the higher raw material prices by taking actions such as increasing selling prices, procuring substitutes for necessary raw materials, and reviewing SG&A expenses. However, these actions have only partially absorbed the higher cost of raw materials, etc. After taking these factors into consideration, we have decided to revise downward our earnings forecast for operating profit, profit before tax, and profit attributable to owners of parent for the fiscal year ending December 31, 2021 from our previously announced forecasts.

(Billion yen)

Assumptions for the FY2021 Forecast

Japan

※ Forecasts are in local currencies

NIPSEA China

※ Forecasts are in local currencies

Asia Excepting NIPSEA China

※ Forecasts are in local currencies

Indonesia

※ Forecasts are in local currencies

Oceania

※ Forecasts are in local currencies

Americas

※ Forecasts are in local currencies

Other

※ Forecasts are in local currencies

*Figures are in local currencies

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