Latest Results

Consolidated Financial Results for the Six Months Ended June 30, 2023 (January 1, 2023 to June 30, 2023)

During the six months ended June 30, 2023, consolidated revenue of the Nippon Paint Group increased by 11.4% from the same period of the previous year to ¥692,925 million. Growth was mainly attributable to the acquisition on May 31, 2022 of European paint manufacturer DP JUB delniška družba pooblaščenka d.d., the weaker yen, and the normalization of economic activities in the decorative paints business in China, which is a core business of the Nippon Paint Group, following the lifting of lockdowns and other pandemic restrictions.
Consolidated operating profit increased by 98.9% to ¥83,738 million due primarily to the gross profit margin improvement because of the flow through of price increases and the absence of credit loss provision in China in the same period of the previous year. Consolidated profit before tax increased by 105.4% to ¥81,954 million, and profit attributable to owners of parent increased by 125.8% to ¥60,898 million.

Japan

Automotive coatings revenue increased due mainly to a rebound in the number of automobiles manufactured from the downturn a year ago caused by the semiconductor chip shortage and other problems. Industrial coatings revenue was flat, despite weaker market conditions than a year ago, due to the flow through of price increases. Decorative paints revenue increased because of the flow through of price increases, despite the impact of unfavorable weather such as heavy rain.
As a result, consolidated revenue increased by 11.3% from the previous year to ¥97,324 million, and consolidated operating profit increased by 214.0% to ¥7,954 million.

NIPSEA

Automotive coatings revenue increased due to a recovery in the number of automobiles manufactured in all areas of the NIPSEA Group segment including Thailand due to a rebound in China from the downturn a year ago caused by the semiconductor chip shortage, lockdowns, and other problems. Revenue from decorative paints was higher due to the normalization of economic activities following the lifting of lockdowns and other pandemic restrictions in China, the continuing strength of paint demand for repainting interiors of existing homes in China, and the flow through of price increases in major markets including Singapore, Malaysia, and Indonesia.
As a result, consolidated revenue increased by 9.6% from the previous year to ¥372,893 million, and consolidated operating profit increased by 145.3% to ¥54,896 million.

DuluxGroup

Revenue from decorative paints increased due to the flow through of price increases in Oceania and Europe, despite weaker consumer demand caused by interest rate hikes. Revenue in the adjacencies business was higher than a year ago due to the flow through of price increases in every brand in Oceania and Europe.
As a result, consolidated revenue increased by 16.1% from the previous year to ¥170,728 million, and consolidated operating profit increased by 32.0% to ¥18,476 million.

Americas

Automotive coatings revenue increased, driven by a rebound in production of automobiles in the United States, a core region in the automotive coatings business, from the downturn caused by semiconductor chip shortages and other difficulties, as well as by consistently solid demand. Decorative paints revenue was flat due to the slowdown of the US economy and housing market and unfavorable weather in California.
As a result, consolidated revenue increased by 9.7% from the previous year to ¥51,979 million. Consolidated operating profit decreased by 31.9% to ¥3,449 million due to the absence of a gain on sale of fixed assets recorded in the same period a year ago.

Revenue composition

Revenue composition by region (Million yen) ■Japan: 97,324 ■NIPSEA: 372,893 ■DuluxGroup: 170,728 ■Americas: 51,979	Revenue composition by business (Million yen) ■Automotive coatings: 85,320 ■Decorative paints: 445,076 ■Industrial coatings: 43,228 ■Fine chemicals: 9,485 ■Other paints: 38,588 ■Paint related business: 71,226

Revenue (cumulative results)

Nippon Paint Group revenue has grown steadily through the acquisitions of paint manufacturers in the United States in FY2017 and in Australia and Türkiye in FY2019 along with the successful growth of the decorative paints business in China and other Asian countries. In FY2021, we achieved revenue growth driven by the acquisition of the Indonesia business, flow through of selling price increases in every region, and the weaker yen. In FY2022, we delivered revenue growth for six consecutive years and a record revenue due to continuous selling price increases and new consolidations mainly in the decorative paints business, as well as FX.

(Million yen)

*1: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and the two India businesses have been classified as discontinued operations. Figures for the 3Q FY2020 cumulative period and full year FY2020 have been adjusted retrospectively to the amounts for continuing operations.
*2: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and the two India businesses have been classified as discontinued operations. Figures for the 1Q FY2021, 3Q FY2021 cumulative period, and full-year FY2021 are the amounts for continuing operations excluding discontinued operations.
*3: Hyperinflation accounting has been applied for our Turkish subsidiaries beginning with FY2022 2Q. The figures for FY2022 and FY2023 are adjusted for the application of this accounting policy.

Operating profit (cumulative results)

Group operating profit reached a record high in FY2020 due to the benefits of acquisitions and growth of the Chinese business. Group operating profit remained at the same level in FY2021 due to higher revenue and the reduction of fixed costs, despite raw material price increases and provisions for potential credit loss in China. Group operating profit increased in FY2022 to exceed the FY2020 level and reach a new record high due to higher revenue driven by the flow through of selling price increases, despite raw material price increases, an additional credit loss provision in China, and an application of hyperinflation accounting.

(Million yen)

*1: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and the two India businesses have been classified as discontinued operations. Figures for the 3Q FY2020 cumulative period and full year FY2020 have been adjusted retrospectively to the amounts for continuing operations. Figures for the full year FY2020 have been adjusted retrospectively to reflect a change in the accounting policy for configuration or customization costs in a cloud computing arrangement implemented beginning with the 4Q FY2021.
*2: Following the business transfer to the Wuthelam Group announced on August 10, 2021, the European automotive coatings business and the two India businesses have been classified as discontinued operations. The figures for FY2021 are amounts for continuing operations excluding discontinued operations. The figures for FY2021 have been adjusted to reflect a change in the accounting policy for configuration or customization costs in cloud computing agreements implemented beginning with 4Q FY2021.
*3: Hyperinflation accounting has been applied for our Turkish subsidiaries beginning with FY2022 2Q. The figures for FY2022 and FY2023 are adjusted for the application of this accounting policy.

Profit attributable to owners of parent (cumulative results)

Profit attributable to owners of parent rises or falls roughly in line with changes in earnings, such as operating profit. In FY2021, net profit increased significantly as a result of the full integration of the Asian JVs and the acquisition of the Indonesia business. In FY2022, net profit increased due to higher operating profit driven by the flow through of selling price increases and other factors.

(Million yen)

*1: Figures for the 1Q and full year FY2020 have been adjusted to reflect a change in the accounting policy for configuration or customization costs in a cloud computing arrangement implemented beginning with the 4Q FY2021.
*2: The figures for FY2021 have been adjusted to reflect a change in the accounting policy for configuration or customization costs in cloud computing agreements implemented beginning with 4Q FY2021.
*3: Hyperinflation accounting has been applied for our Turkish subsidiaries beginning with FY2022 2Q. The figures for FY2022 and FY2023 are adjusted for the application of this accounting policy.

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