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Maximization of Shareholder Value (MSV)

Our sole mission: MSV

Nippon Paint Group is pursuing MSV as its sole mission. We will aim to create wealth by maximizing the residual shareholder value that remains after fulfilling our obligations to customers, suppliers, employees, society, and other stakeholders.

Maximization of Shareholder Value (MSV)

The diagram above shows the stakeholder relationship for profit and loss statement items: customers for revenue, suppliers for operating expenses, employees for personnel expenses, financial institutions for interest expenses, and governments 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. A prerequisite is to fulfill those obligations to stakeholders that have upper limits, and shareholder value will be the residual value that remains after fulfilling those obligations. MSV strictly pursues the maximization of medium- and long-term shareholder value, rather than short-term maximization.

MSV logic tree: Actions for achieving MSV

Earnings per Share (EPS) and price-to-earnings ratio (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 logic tree
Organic (existing businesses) Revenue growth
  1. Volume/unit price
  2. Market share
  3. New business/product
Profitability improvement
  1. Variable costs (raw materials cost, logistics cost, etc.)
  2. Fixed costs (overhead cost)
Inorganic (M&A) M&A strategy
  1. Contributing to EPS in Year 1 after acquisition
  2. Leveraging the Group’s strengths
Fostering understanding and expectations
  1. Continuous M&A
  2. Building up successful M&A cases
Balance sheet management Financial discipline
  1. Prioritizing debt financing
  2. Maintaining sufficient leverage capacity and enhancing engagement with financial institutions and rating agencies
  3. Equity-based capital raising remains an option premised on EPS accretion
Communications with capital markets Reducing recognition gap (capital cost)
  1. Propagating success stories
  2. Increasing engagement
  3. Enhancing disclosure materials
Sustainability Environment & Safety
  • Climate change
  • Resources and environment
  • Safety and operations
People & Community
  • Diversity & Inclusion
  • Growth with communities
Innovation & Product Stewardship
  • Innovation for a sustainable future
  • Oversight on execution
  • Internal control
  • Risk management

Pages related to Our Business Model

  • Progress of the Medium-Term Plan

  • Value Creation Achievements
    (Financial and Non-Financial Highlights)

  • Analysis of Regional and Market Environment

  • [Feature Article] Medium- and Long-Term Business Strategy That Reflects Regional Characteristics and Structural Changes in Markets

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