Creating wealth by pursuing MSV as our sole mission
Nippon Paint Group is a unique Japan-origin global company that positions MSV as its sole mission. Based on Asset Assembler model, 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.
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Our sole mission: Maximization of Shareholder Value (MSV) / How Shareholder Value Is Maximized
Fulfilling obligations to stakeholders
The major premise of MSV, before everything else, is the fulfillment of our obligations to customers, suppliers, employees, society, and other stakeholders. The relationship of trust with stakeholders through engagement is an asset integral to our Asset Assembler model. We will continue to strive for the maximization of shareholder value that remains after fulfilling our obligations to all stakeholders.
Key stakeholders
Examples of fulfillment of obligations
Customers
Examples of fulfillment of obligations
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Joint development activities aimed for solving social issues (new-generation technologies such as decorative films and target line paint for assisting automated driving)
- Periodic factory tour events and customer satisfaction surveys (technology and sales areas, etc.)
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Provision of high-quality products with considerations to health and safety
- Exhibit and participate at events aimed for obtaining industry trends and information sharing (lectures at SURCAR (automotive), International Auto Aftermarket EXPO (auto refinish), High Performance Paint Exhibition and other industry events, and writing professional articles)
- Respond to questionnaire surveys such as CDP (an international NGO) by request from customers
Suppliers
Examples of fulfillment of obligations
- Conduct questionnaires aimed for sustainable procurement of materials and services
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Eliminate organizations involved in human rights abuses and the use of raw materials made through human rights abuses
Employees
Examples of fulfillment of obligations
- Keep tabs on employee satisfaction levels using questionnaires by the Labor Union and external surveys and conduct employee engagement activities
- Design and implement training programs to gain knowledge and skills about products, businesses, etc.
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Establish an internal reporting system that enables employees to speak up and report violations without experiencing unfair treatment
Management with Attention Paid to Our Stock Price
Turning the maximization of EPS and PER into stock price appreciation
Nippon Paint Group is pursuing our sole mission of MSV through the maximization of EPS and PER. We practice management with attention paid to our stock price, which is the outcome of the pursuit of MSV.
Our historical stock price, EPS, and PER over the past 10 years have exceeded the TOPIX chemical sector average and the average of competitors (mean value) (see the graph below.) We will continue to pursue the achievement of MSV by posting sustained EPS growth and raising expectations from capital markets.
Historical stock price of NPHD
*1 Source: FactSet (as of June 30, 2023), Bloomberg
*2 The stock prices were indexed with the closing price on July 1, 2013, as 100
*3 Competitors covered are Sherwin-Williams, BASF, Asian Paints, PPG Industries, AkzoNobel, Berger Paints India, Axalta, SKSHU Paint, Kansai Paint, TOA Paint, Asia Cuanon
*4 Stock prices of Axalta, SKSHU Paint, TOA Paint, and Asia Cuanon were indexed using the indexed stock price of Sherwin-Williams on the listing dates of these stocks
Historical EPS of NPHD
*1 Source: FactSet (as of June 30, 2023), Bloomberg
*2 Competitors covered are Sherwin-Williams, BASF, Asian Paints, PPG Industries, AkzoNobel, Berger Paints India, Axalta, SKSHU Paint, Kansai Paint, TOA paint, and Asia Cuanon
*3 The exchange rates used for the calculation of EPS (for the next 12 months) were the following rates as of June 30, 2023: USD/EUR=1.091000, USD/INR=0.012190, USD/CNY=0.137664, USD/JPY=0.006919, USD/THB=0.028205
Historical PER of NPHD
*1 Source: FactSet (as of June 30, 2023), Bloomberg
*2 PER (for the next 12 months) is calculated by the stock price on each day divided by EPS (for the next 12 months) on each day
*3 Competitors covered are Sherwin-Williams, BASF, Asian Paints, PPG Industries, AkzoNobel, Berger Paints India, Axalta, SKSHU Paint, Kansai Paint, TOA Paint, and Asia Cuanon
Our Value Creation Model
Value creation model is based on (1) organic EPS growth, (2) inorganic EPS accretion, and (3) maximization of PER
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Our Value Creation ModelPDF170KB
Financial and Non-Financial Resource
INPUT
OUTPUT
Human resources/organizations
INPUT
- Create workplaces that encourage active participation by people with diverse backgrounds and characteristics
- Embrace reforms and changing work styles
- Firmly establish the Purpose and the Global Code of Conduct
- Increase the effectiveness of risk management
OUTPUT
- Consolidated number of employees (ratio outside Japan)
33,763 (89.2%)
- Employee satisfaction level
81％ (Japan Group)
- Ratio of women in managerial positions (global)
24.8％
Technologies
INPUT
- Cultivate engineering talent
- Step up R&D activities
- Maintain and reinforce production facilities
- Develop sustainable products
OUTPUT
- Engineering talent (global)
3,895 persons
- New Product Sales Index (NPSI)
20％ (Total of NIPSEA Group and Japan Group)
External partner
INPUT
- Open innovation with universities and research institutions
- Joint research with automobile manufacturers
- Increase engagement with investors and other stakeholders
- Strengthen and deepen partnerships with Wuthelam Group
OUTPUT
- Joint development with the University of Tokyo
New anti-viral materials
- Transferred to Wuthelam Group
European automotive coatings business and India businesses
Customer base
INPUT
- Build distribution networks that will allow us to supply products to consumers around the world
- More strategic partnerships with real estate developers
- Build strong relationships based on trust with automobile manufacturers and other customers
OUTPUT
- Number of sales locations in China
104,000 stores
- Number of countries/regions where Nippon Paint Group has the No. 1 market share in decorative paints
13 countries/regions
Brands
INPUT
- Advertising and marketing activities
- Increase visibility among consumers
- Hold the AYDA Awards international architectural and interior design competition
- Social contribution activities
OUTPUT
- Brand award from a Chinese brand evaluation institution
Awarded the Gold Brand for seven consecutive years (Wall Paint Category)
- Brand award in Australia
Recognized as Most Trusted Brands (Several DuluxGroup brands)
Financial base
INPUT
- Rigorous financial discipline
- Prioritize debt financing and maintaining leverage capacity
- Engagement with financial institutions and credit rating agencies
- Build a global investor base
OUTPUT
- Net D/E ratio
0.50 times
- R&I rating
A
- Total shareholder return (TSR)
152.5％
Nature/environment
INPUT
- Actions to combat global warming
- Responsible water use
- Reduce environmental impacts by developing water-based paints
OUTPUT
- GHG emissions (Scope 1 and 2, Global)
55.6 kg-CO2/production volume (ton)
- ESG indexes adopted by GPIF
Selected as a constituent in all six indexes
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