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

Further market share gains achieved, underpinned by solid demand and price pass-through capability in our market that showed resilience against challenging business climate including pandemic, conflict in Ukraine and raw material inflation, as well as by powerful brands and technological strengths of our Group.

Our business model of building up excellent assets through M&A using a low financing cost started in 2019 and has significantly contributed to EPS (earnings per share) accretion through 2022. This model allows us to unleash the potential of excellent companies that join our Group.

Every asset of our Group is highly cash generative and generally requires no additional capital injection. Our so-called decoupled assets featuring local production for local consumption can demonstrate their true worth based on their high market shares and profit margins in their local markets all the more under the current challenging business climate. Our business model encourages autonomous collaboration among our partner companies without unnecessary HQ-led intervention or standardized integration of acquired companies forced, which allows us to pursue further growth even with a small and lean headquarters.

Our position to maintain yen-based financing and solid relationships with Japanese banks will give us a competitive advantage.
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.
.Strategy Update by Asset
Analysis by Region: Achieving growth exceeding MTP guidance, driven by growth outpacing market and pricing actions in most regions
Revenue (Billion yen) |
FY2021 Results (Tanshin)*1 |
FY2022 Results (Non-GAAP) |
YoY | FY2023 Guidance (In LCY) |
Overview |
---|---|---|---|---|---|
Japan | 174.0 | 184.2 | +5.8% | c. +5% |
|
NIPSEA China | 379.1 | 395.1 | +4.2% | +5-10% |
|
NIPSEA (NIPSEA Except China)*2 |
103.8 | 119.5 | +15.1% | +0-5% |
|
Betek Boya (Türkiye) |
49.2 | 123.6 | +151.3% | c. +30% |
|
PT Nipsea (Indonesia) |
39.5 | 45.8 | +15.9% | c. +15% |
|
DuluxGroup (consolidated) |
176.2 | 187.3 | +6.3% | +5-10% |
|
Cromology (Europe) |
- | -*5 | - | +5-10% | - |
JUB (Europe) |
- | -*5 | - | +5-10% | - |
Americas | 76.4 | 83.1 | +8.8% | +0-5% |
|
*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
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 |
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People & Community |
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Innovation & Product Stewardship |
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Governance | All Materiality categories |
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Sustainable Procurement | All Materiality categories |
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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.

② Geography: Not limited
③ Potential targets: Strong corporate/product, brand and excellent management team

① Fundamentals of paint and adjacencies markets e.g. population growth and urbanization create enormous growth opportunities
② No restrictions in terms of target locations as long as acquisition contributes to MSV. Distant location to be carefully examined
③ Continue to assemble assets leveraging strengths of our autonomous and decentralized business model

② Ability to finance in Japan, with stable currency and stable market
③ Full access to the Nippon Paint Group’s platform
④ Excellent management teams enabling autonomous and decentralized business model

① Stable cash generating ability and strong financial position
② Low interest rate borrowings, safety and liquidity of the stock market
③ Sharing expertise, products, and technologies within the Group
④ Minimize the PMI risk

② ROIC*1>WACC*2
③ Sufficient leverage capacity
④ Debt financing prioritized; equity-based capital raising remains an option

① Aim to achieve EPS accretion in Year 1 after acquisition
② Take capital efficiency into consideration
③ Secure financial soundness to prepare for future M&As
④ EPS accretion also a must in rare case of equity financing
*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