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Medium-Term Plan Update (FY2023)

Released April 7, 2023

Nippon Paint Group Medium-Term Plan Update

Overview of Medium-Term Plan (FY2021-2023) Update

Resilience of our Asset Assembler model to pursue Maximization of Shareholder Value (MSV) through organic growth and M&A reassured

Steady growth through organic growth and M&A expected despite dramatic changes in external environment since our MTP guidance announcement

Comparison between original plan and current guidance (FY2023 forecast)

Our revenue guidance for FY2023, created in March 2021, was 1,100 billion yen. However, we have increased our revenue guidance for FY2023 to 1,400 billion yen.

(Billion yen)
MTP guidance (Mar. 2021)
FY2023 guidance (Feb. 2023)
MTP guidance (Mar. 2021)
FY2023 guidance (Feb. 2023)
Operating profit
MTP guidance (Mar. 2021)
FY2023 guidance (Feb. 2023)

.Strategy Update by Asset

Analysis by Region: Achieving growth exceeding MTP guidance, driven by growth outpacing market and pricing actions in most regions

(Billion yen)
YoY FY2023
(In LCY)
Japan 174.0 184.2 +5.8% c. +5%
  • New reportable segment (inclusion of overseas marine) from FY2022
  • Automotive: Roughly in line with MTP despite chip and parts shortage
  • Industrial and decorative: Below MTP due to pandemic, etc., despite aggressive product proposals to increase market share and pricing actions
NIPSEA China 379.1 395.1 +4.2% +5-10%
  • TUC: Above MTP due to higher-than-expected market growth with market share gains
  • TUB: Below MTP due to soft market
  • Total revenue in China expected to exceed MTP
(NIPSEA Except China)*2
103.8 119.5 +15.1% +0-5%
  • Above MTP due to pricing actions, growth in adjacencies business and market share gains that outpace market in every region (Malaysia, Singapore, Thailand)
Betek Boya
49.2 123.6 +151.3% c. +30%
  • Above MTP despite impact of hyperinflationary accounting, due to pricing actions amid hyperinflation and successful branding strategies and growth in adjacencies business driving our market share
PT Nipsea
39.5 45.8 +15.9% c. +15%
  • Above MTP due to pricing actions and market share gains through expansion of distributors and more CCM*3 installed at paint shops
176.2 187.3 +6.3% +5-10%
  • Pacific*5: Above MTP due to ongoing bias to premium product mix, pricing actions in response to raw material inflation and new adjacent business bolt-ons
- -*5 - +5-10% -
- -*5 - +5-10% -
Americas 76.4 83.1 +8.8% +0-5%
  • Automotive: Roughly in line with MTP despite chip and parts shortage
  • Decorative: Roughly in line with MTP due to firm market until 1H 2022, pricing actions, etc.

*1: FY2021 results have been revised retrospectively following change in reportable segment from 1Q FY2022
*2: Figures excluding Betek Boya and PT Nipsea from the total of NIPSEA Except China
*3: Computerized Color Matching
*4: Australia, New Zealand and Papua New Guinea
*5: Cromology was newly consolidated from Jan. 2022 and JUB from Jun. 2022 and are not included in Non-GAAP FY2022 results

Sustainability Strategy

Established Basic Policy on Sustainability aimed to achieve MSV based on Asset Assembler model

Key points of update

ESG Statement
Basic Policy on Sustainability
Position of MSV
ESG Statement
Stated that the delivery of sustainability improvement plans will lead to the creation of new business opportunities and MSV
Basic Policy on Sustainability
Clearly state that MSV is the goal of our sustainability initiatives

Share success cases of each partner company, identify priority issues and develop roadmaps for addressing identified issues

Team Materiality Main actions/achievements in FY2022 Targets/actions in FY2023 and onwards
Environment & Safety
  • Climate Change
  • Resources and Environment
  • Safe People and Operations
  • Identify further improvement focus areas for
    • Climate change
    • Resource usage
    • Significant safety risk
  • Agreed standardized metrics and implementation plan
  • Implement and disclose:
    • Scope 3
    • Water usage
    • High potential safety incidents
  • TCFD risk and opportunity assessment and actions
People & Community
  • Diversity & Inclusion
  • Growth with Communities
  • Shared actions to increase the ratio of women in all employees
  • Decide the group’s target to celebrate the diversity
  • Established a global CSR framework as a guiding structure for all partner companies
  • Increase the ratio of women in managerial positions in accordance with targets in each region
  • Develop a long-term community engagement strategy with our global framework and targets
Innovation & Product Stewardship
  • Innovation for a Sustainable Future
  • Stated ESG innovation strategy and roadmap
  • Redefined sustainable products*
  • Developed Green Design Review
  • Established packaging recycled content
  • Use Sustainability Scoreboard in broader partner companies
  • Identify and compile Chemicals of Concern and develop a phase out plan
Governance All Materiality categories
  • Increase diversity in Board of Directors
  • Enhance growth strategy discussions by Directors
  • Established the Nippon Paint Group Global Code of Conduct
  • Modified the Group Risk Management Basic Policy and established Global Basic Policy of Whistleblowing Hotline
  • Enhance growth strategy discussions and implement succession plans
  • Continuously improve group management effectiveness
  • Establish Whistleblowing Hotline and verify its effectiveness
  • Reform governance framework responding to changes in social demand (including in compliance and risk management)
Sustainable Procurement All Materiality categories
  • Established global team
  • Developed Supplier Code of Conduct and supplier questionnaire
  • Organize regional teams
  • Conducted trial supplier survey
  • Conduct supplier survey
  • Define supplier ESG assessment methodology
  • Scope 3 disclosure (raw materials related)

M&A Strategy

Continue to pursue aggressive M&A strategy by leveraging our autonomous and decentralized business model

There is no significant change in the key elements of our M&A strategy. We will have MSV as the guiding axis when discussing our targets, strengths, and financial discipline, and will continue to build up excellent M&As that contribute to EPS accretion with limited risk.

*1: Return on invested capital (after one-off expenses)
*2: Weighted average cost of capital

Related Materials of Nippon Paint Group Medium-Term Plan Update

Links to related pages

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