Our mission: Maximization of Shareholder Value (MSV)
MSV is about maximizing the residual value after fulfilling our obligations to customers, suppliers, employees, society, and other stakeholders.
The diagram below shows the stakeholder relationship for profit and loss statement items: customers for revenue, suppliers for input costs, employees for personnel expenses, financial institutions for interest expenses, and states for taxes. Fulfilling our obligations to each stakeholder group is the primary premise for MSV. Fulfillment of obligations includes not only legal contracts but also social and ethical obligations, as well as the concept of sustainability.
MSV entails maximizing the residual value that remains after fulfilling obligations to all stakeholders as a way of rewarding shareholders that make an investment with an awareness of the associated risks.
MSV=Maximization of EPS x Maximization of PER
Stock price equates to EPS (earnings per share) multiplied by PER (price-to-earnings ratio). Therefore, we pursue the maximization of both EPS and PER.
Maximize EPS
Why do we maximize EPS instead of just earnings? We note that an earnings increase can sometimes result in EPS reduction if accompanied
by less than ideal share issues which dilute EPS.
There are 2 pillars of EPS maximization:
- Organic growth
- Asset assembly
We strive to maximize both pillars through operational efforts as well as disciplined M&A accompanies by ideal financing.
Maximize PER
PER basically reflects capital markets' expectation of the company's EPS growth. We focus on maximizing our PER by using a variety of IR activities, a carefully formulated finance strategy, and sustainability initiatives, as well as by assembling quality assets to raise our EPS growth potential.
How Shareholder Value Is Maximized
EPS and PER are important benchmarks for achieving MSV. Nippon Paint Group is taking various actions that will contribute to maximizing EPS and PER in order to achieve MSV over the medium and long term.
MSV
EPS
PER
Sustainability
・Environment & Safety
・People & Community
・Innovation & Product
Stewardship
・Governance
・Sustainable
Procurement
Organic
(existing businesses)
Strive for market
share & profitability
Inorganic
(M&A)
Asset Assembler
model
Balance sheet
management
Financial discipline
Communications
with capital markets
Nurture market
expectation
Our pursuit
Develop low-carbon/
eco-friendly products
Ensure safe people
and operations
Recruit/train
diverse employee
Earn the trust of
stakeholders
Develop sustainable products
（NPSI↑monitor LCA）
Chemicals of
concern
Oversee
management
Encourage
risk-taking
Low-cost and
sustainable procurement
Reduce environmental
and human rights risks
Relentless pursuit of technologies, talents.
Intensive use of IT
Vigorous pursuit of higher quality,
lower cost, capex efficiency
Rally targets to aspire
to joining the federation
Strive to lower funding cost & risk,
maintain high PER
Debt leverage
with market acceptance
Equity financing
with EPS accretion
Ingrain
equity story
Increase
engagement
Enhance
disclosure
materials
