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.

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.

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.

Autonomous and decentralized management that accelerates EPS compounding through organic growth

Built on trust in the management teams of our partner companies in Japan and overseas, our Group has adopted a unique autonomous and decentralized management framework that combines delegation of authority with accountability.

This approach empowers management teams in each region and business segment to make swift and flexible decisions. Its greatest strength is the ability to allow us to exercise agility and competitiveness in a rapidly changing business environment.

As our core business in decorative paints operates under a local production for local consumption model, it does not make much sense for Nippon Paint Holdings as a holding company to to centrally control its partner companies across the Group. Rather, it is essential for our partner companies to learn from one another and to generate synergies as a Group.

At the core of autonomous and decentralized management are the values of autonomy and accountability. By granting a high degree of discretion to the management teams of each partner company while holding them accountable for outcomes, we promote prompt, agile, and autonomous decision-making, while maintaining a flexible level of control as a Group.
The balance between autonomy and accountability is the key to recruiting and retaining exceptional talents and strengthening competitiveness, and serves as the driving force behind sustainable EPS compounding.

From a governance perspective, decisions regarding the appointment and dismissal of partner company CEOs and financial strategy are made by the management team of the holding company, acting as the Group’s top decision-makers. In all other areas, each partner company autonomously pursues its own initiatives, enabling the creation of diverse synergies across the Group.

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.

Three Key Investor Questions About Our Asset Assembler Model

Point1 Can the Asset Assembler model, particularly for inorganic growth initiatives, maintain its competitive advantage even if interest rates in Japan rise further?	Point2 Under autonomous and decentralized management, how do you foster collaboration and synergy among partner companies?	Point3 Is the Asset Assembler model versatile enough to function effectively after a transition to the next generation of management?
We have both the capability and a strong will to leverage the benefits of low funding costs in Japanese yen. Even if interest rates in Japan rise, we believe our relative advantage will remain secure as long as the rise is within expectations. In addition, the trust we have built as a Japanese corporation, combined with our emphasis on respecting the brands and autonomy of management teams at acquired companies, represents a significant strength supporting our M&A strategy.	We have established a system that enables our partner companies to learn from one another autonomously and voluntarily by leveraging the Group platform to share best practices and success cases, all while respecting the autonomy of our exceptional partner companies. Through these interactions, partner companies exchange technologies, brands, expertise, operational know-how, and management practices, creating an open and uninhibited environment for collaboration and synergy across the Group.	Our Asset Assembler model is not a management scheme reliant on specific individuals but a systematic and replicable model that enables sustainable EPS compounding through both organic and inorganic initiatives. On the organic side, growth is achieved through autonomous and decentralized management, where the authority to operate local businesses is delegated to the management teams of partner companies. On the inorganic side, growth is driven by the accumulation of good assets that contribute to MSV, adhering to rigorous acquisition criteria designed to minimize risk.