Shareholder and investor engagement
NPHD pursues MSV by building relationships of trust with shareholders through thorough and fair disclosure of information to shareholders in Japan and overseas and by reducing information asymmetry and holding down capital costs. NPHD also strives to understand the structure of its shareholders in order to engage in constructive dialogue with them, and pays close attention to the prevention of leaks of insider information when engaging in dialogue.
We have appointed the Representative Executive Ofﬁcer & Co-President and general managers of the Investor Relations Department and General Affairs Department as the dialogue contacts with shareholders. Also, we provide opportunities for engagement with Independent Directors. We give the Board of Directors feedback of opinions and suggestions obtained from dialogues with shareholders as appropriate and reﬂect them on corporate management. Opinions from the Directors including Independent Directors are also utilized in dialogues with shareholders.
In FY2020, the Company strengthened communication with investors and held IR interviews with 346 companies (an increase of 23.1% from the previous year) to promote the understanding of the paint market and the Company’s strategies. As an IR event, the Company held the "Brieﬁng for Institutional Investors" in February, in which the management team explained the growth potential of the paint market, our strengths and future direction, etc. In August, the Company held an investor presentation meeting on the acquisition of 100% ownership of the Asian JVs, which was our long-term priority, and explained the strategic signiﬁcance, beneﬁts, and ﬁnancial impact. In addition, we are promoting proactive disclosure of information through measures including expanding and reinforcing the Integrated Report and IR website.
Number of IR meetings held
Meeting with domestic investors
Meeting with overseas investors
Of which, meetings with ESG investors
(in Japan and overseas)
IR events held
Teleconference on financial results
Briefing for institutional investors
Briefing for individual investors
Outcomes of shareholder and investor engagement
Feedback from shareholders and investors
- When will NPHD carry out the acquisition of 100% ownership of the Asian JVs? The transaction will have a signiﬁcant impact on your valuation, so I hope that it will be achieved at an early date.
- We would like to have an interview with the local management about the Chinese market and businesses.
- The operating proﬁt in the Japan segment includes headquarters expenses, which makes it difﬁcult to grasp the proﬁtability only of the Japan segment. Please disclose the breakdown of the operating proﬁt in the Japan segment.
- Please disclose your investment policies and ﬁnancial disciplines for your M&A strategy.
- We would like you to disclose long-term ﬁnancial targets as well in the Medium-Term Plan.
- We expect NPHD to properly respond to MSCI and other ESG ratings because many investors place emphasis on these ratings.
- We are concerned about your governance structure. Please explain the actual situation and effectiveness of your corporate governance in details.
|Regarding major shareholder|
(the Wuthelam Group)
- Please communicate periodically the ideas and thoughts of the Wuthelam Group as the major shareholder.
Concrete measures taken based on shareholder and investor engagement
- Under the new management structure launched in FY2020, we reinforced our corporate governance structure to ensure the protection of the interests of minority shareholders, and enhanced smooth communication with the Wuthelam Group, resulting in quick agreement on the acquisition of 100% ownership of the Asian JVs (August 2020).
- We were unable to hold investor brieﬁng due to COVID-19. However, we provided explanations on market analyses and business strategies given by the local management in China and other regions in the Integrated Report (September 2020).
- We excluded the headquarters expenses from the operating proﬁt in the Japan segment and presented as adjustments in order to clearly show the performance in the Japan segment. We disclosed the adjustment ﬁgures for the past year (on a quarterly basis) (May 2021).
- We disclosed basic M&A policies including target areas, our advantages, and ﬁnancial disciplines, although it is difﬁcult to disclose details of M&A strategies considering the possible impact on target companies and competitors. We also disclosed the track record of acquisition of small-scale companies to show progress in the M&A strategy (March 2021).
- In the New Medium-Term Plan (FY2021-2023), we set and disclosed ﬁnancial targets that exceeded those of overseas competitors as a long-term goal, in addition to the medium-term targets for the existing businesses excluding M&A (March 2021).
- In FY2020, we established the “ESG Promotion Department” and the “ESG Committee,” grasped and analyzed the external evaluation to collect information and responded to questions. As a result, our MSCI rating was upgraded from “BBB” to “A” (April 2020).
- We shifted to a Company with a Three Committees structure and raised the ratio of Outside Directors to 67% (at that time) in order to protect the interests of minority shareholders (March 2020). In addition, the Company expanded and reinforced the governance disclosure and information disclosure by taking steps including disclosing “Discussions by the Board of Directors” in the Integrated Report (September 2020).
|Regarding major shareholder|
(the Wuthelam Group)
- We provided the history of partnership with the Wuthelam Group that started in 1962 and the proﬁle of the representative of the group in the Integrated Report in order to facilitate the understanding of our relationship with the Wuthelam Group and its corporate proﬁle (September 2020). Additionally, we explained the background to and some details on the agreement with the Wuthelam Group on the acquisition of 100% ownership of the Asian JVs at the investor presentation in August 2020, and provided the message from the representative of the Wuthelam Group in the Integrated Report (September 2020).