Asset Assembler

Our Business Model: Asset Assembler

Our Asset Assembler model aims for sustainable EPS compounding through both organic growth (existing businesses) and inorganic growth (accumulating high-quality and low-risk M&A deals). This unique business model is designed to pursue Maximization of Shareholder Value (MSV), our sole mission.

Compounding EPS via organic and inorganic growth towards MSV

Accumulating excellent
assets (newly acquired
brands, talent, and
technology)

Inorganic

EPS compounding
through M&A

MSV

Organic

EPS growth through
autonomous and
decentralized
management

Aggressively sharing
and leveraging
technologies, channels,
sourcing, know-how,
brands, etc., across
the Group

Relentlessly pursuing unlimited upside in shareholder value

Operating under the assumption that the macroeconomic environment will always be uncertain and unclear, we consistently accumulate low-risk assets that offer good returns that still exist globally. In our M&A activities, we leverage not only the advantage of low-cost funding in Japanese yen, but also the trust placed in Japanese companies as acquirers, capitalizing on our unique position as a Japan-based company.

We strive to earn recognition and favorable evaluations from capital markets for our Asset Assembler model, which is committed to the safe and consistent compounding of EPS via organic and inorganic growth. This approach aims to enhance our PER and ultimately achieve MSV. By unlocking the maximum potential of the assets we acquire, we aim to accelerate our organic growth, thereby attracting new assets to our Group. This virtuous cycle enables us to relentlessly pursue unlimited shareholder value upside.

Assumptions (medium- to long-term outlook)	Ever-present macroeconomic uncertainty Low-risk, good-return targets globally Japan-based advantages (Japan-US interest rate gap, consumer trust in Japanese brands, etc.) are likely to persist
Features	A model focused on low-risk and steady EPS compounding via organic and inorganic initiatives Capital markets’ conviction in our Asset Assembler model will boost PER, enabling MSV Unlocks unlimited growth potential for us

Three primary features of good assets

1. Autonomous growth enabled by excellent management teams aligned with MSV

2. Low-cost operations and strong cash generation

3. Capturing resilient market demand and exploiting operating leverage

Compounding EPS via organic and inorganic growth towards MSV

In our existing businesses, the excellent management team in each region pursues autonomous growth by creating synergies through the proactive sharing of technical capability, distribution networks, purchasing capability, know-how, and brands within the Group. At the same time, we execute good and low risk M&As, thereby boosting our performance and building up newly acquired brands and human resources, which can be further leveraged within the Group.

Asset Assembled to Date

Revenue
Existing businesses
New M&A*

*Total revenue of companies acquired in FY2018 and afterwards
Number of key brands
Number of CEOs of key partner companies
Engineering talent (consolidated)

Autonomous and decentralized management that accelerates EPS compounding through organic growth

Nippon Paint Group is pursuing autonomous growth through collaboration and cooperation among our partner companies in each region, supported by autonomous and decentralized management that combines the delegation of authority with accountability based on trust in our partner companies around the world.

Our Platform That Underpins Autonomous and Decentralized Management

Each partner company, operating under autonomous and decentralized management, proactively leverages our Group's management resources including financial strength, technical capabilities, and brand power, while voluntarily learnig from each other occasionally. This approach fueld their ongoing growth.