Nippon Paint Holdings Co Aktienkurs
Vergleich mit Peer Group
📊 Peer Group
📈 Was ist das?
Die Peer Group sind die Unternehmen mit dem ähnlichsten Geschäftsmodell. Sie dienen als Vergleichsmaßstab, um eine Aktie einzuordnen.
🧮 Wie wird sie ausgewählt?
Nach Ähnlichkeit des Geschäftsmodells, also Unternehmen aus derselben Branche, mit vergleichbaren Produkten und einer ähnlichen Kundengruppe. Nur so vergleichst du Äpfel mit Äpfeln.
🏛️ Wofür ist sie wichtig?
Ob eine Aktie günstig oder teuer ist, lässt sich am ehesten im Vergleich beurteilen. Ein KGV von 18 oder ein EV/FCF von 20 wirkt je nach Maßstab günstig oder teuer. Die Peer Group liefert dabei den treffsichersten Maßstab: Unternehmen mit ähnlichem Geschäftsmodell, die denselben Bedingungen unterliegen.
🎯 Was bedeutet das für Anleger?
Liegt eine Kennzahl unter dem Peer-Durchschnitt, ist die Aktie relativ günstiger bewertet, über dem Durchschnitt entsprechend teurer. Ein Abschlag zur Peer Group kann eine Chance sein, aber auch einen Grund haben (zum Beispiel geringeres Wachstum). Der Vergleich ist ein Startpunkt, kein Urteil.
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📘 Marktkapitalisierung
📈 Was ist das?
Die Marktkapitalisierung zeigt, wie viel ein Unternehmen laut Börse aktuell wert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft Unternehmen in Größenklassen (Large, Mid, Small Cap) einzuordnen und gibt Hinweise auf Marktmacht und Stabilität.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Große Unternehmen gelten als stabiler, zahlen oft Dividenden, wachsen aber langsamer.
- Kleine Firmen können stärker wachsen, sind aber schwankungsanfälliger.
- Die Marktkapitalisierung ist ein guter Indikator für Unternehmensgröße, aber kein Maß für Unter- oder Überbewertung.
📘 Enterprise Value (Unternehmenswert)
📈 Was ist das?
Der Enterprise Value (EV) zeigt, was ein Unternehmen tatsächlich kostet, wenn man es komplett übernehmen würde – inklusive Schulden und abzüglich Cash.
🧮 Wie wird es berechnet?
(= Marktkapitalisierung + Nettoverschuldung)
🏛️ Wofür ist es wichtig?
Der EV ist eine realistischere Bewertungsbasis als die Marktkapitalisierung, da er die Kapitalstruktur berücksichtigt. Er ist Grundlage für Kennzahlen wie EV/FCF oder EV/Sales.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Der Enterprise Value zeigt, was ein Unternehmen tatsächlich wert ist – unabhängig davon, wie es finanziert ist.
- Er ist besonders wichtig für professionelle Investoren, da er eine objektivere Grundlage für Bewertungsvergleiche bietet als die Marktkapitalisierung allein.
- Ein Unternehmen mit hoher Verschuldung erscheint im EV teurer, eines mit viel Cash günstiger – auch wenn sie an der Börse gleich viel wert sind.
📘 Nettoverschuldung
📈 Was ist das?
Die Nettoverschuldung zeigt, wie viele Schulden nach Abzug des verfügbaren Cashs tatsächlich verbleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie zeigt, wie stark ein Unternehmen von Fremdkapital abhängig ist – und wie gut es in der Lage ist, seine Schulden kurzfristig zu bedienen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine niedrige oder negative Nettoverschuldung bedeutet hohe finanzielle Stabilität.
- Unternehmen mit viel Cash und geringer Verschuldung sind besser gerüstet für Krisen.
- Eine hohe Nettoverschuldung erhöht das Risiko – besonders bei steigenden Zinsen oder konjunkturellen Schwächen.
📘 Cash
📈 Was ist das?
Der Cashbestand zeigt, wie viele liquide Mittel einem Unternehmen sofort zur Verfügung stehen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Er gibt Auskunft über die finanzielle Flexibilität: Ein hoher Cashbestand ermöglicht Investitionen, Rückkäufe oder Krisenresistenz.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Cashbestand zeigt finanzielle Stärke und Handlungsspielraum.
- Cash kann für Investitionen, Schuldentilgung oder Aktienrückkäufe genutzt werden.
- Allerdings: Zu viel ungenutztes Kapital kann auch auf mangelnde Investitionsideen hinweisen.
📘 Anzahl ausstehender Aktien
📈 Was ist das?
Die Anzahl ausstehender Aktien gibt an, wie viele Aktien eines Unternehmens aktuell im Umlauf sind und von Investoren gehalten werden.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie ist die Grundlage für viele Kennzahlen wie Gewinn je Aktie (EPS), Marktkapitalisierung oder KGV.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Je weniger Aktien im Umlauf sind, desto höher fällt z. B. der Gewinn je Aktie aus – wichtig für Bewertung und Dividendenrendite.
- Aktienrückkäufe verringern die Anzahl ausstehender Aktien – und steigern den Wert je Aktie.
- Kapitalerhöhungen haben den gegenteiligen Effekt: mehr Aktien → Verwässerung der bestehenden Anteile.
📘 Kurs-Gewinn-Verhältnis (KGV)
📈 Was ist das?
Das KGV zeigt, wie oft der Gewinn pro Aktie im aktuellen Aktienkurs enthalten ist – also wie „teuer“ eine Aktie im Verhältnis zum Gewinn ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KGV gehört zu den bekanntesten Bewertungskennzahlen. Es hilft Anlegern einzuschätzen, ob eine Aktie im Vergleich zu ihrem Gewinn eher günstig oder teuer erscheint.
🧮 Berechnung
📊 KGV (TTM) = bezogen auf den Gewinn der letzten 12 Monate (Trailing Twelve Months):🎯 Was bedeutet das für Anleger?
- Ein niedriges KGV kann auf eine günstige Bewertung hindeuten – oder auf Probleme im Geschäftsmodell.
- Ein hohes KGV kann Wachstumserwartungen widerspiegeln – oder eine überbewertete Aktie.
📘 Kurs-Umsatz-Verhältnis (KUV)
📈 Was ist das?
Das KUV zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen – unabhängig vom Gewinn.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KUV ist besonders bei wachstumsstarken oder noch nicht profitablen Unternehmen hilfreich. Es zeigt, wie hoch der Umsatz an der Börse bewertet wird.
🧮 Berechnung
Marktkapitalisierung = 2,71 Bio. ¥ | Umsatz (TTM) = 1,95 Bio. ¥
Marktkapitalisierung = 2,71 Bio. ¥ | Umsatz erwartet = 2,05 Bio. ¥
🎯 Was bedeutet das für Anleger?
- Ein niedriges KUV kann auf Unterbewertung hindeuten – oder auf schwache Margen.
- Ein hohes KUV kann hohe Erwartungen widerspiegeln – oder übermäßigen Optimismus.
- Besonders sinnvoll bei Wachstumsunternehmen, bei denen der Gewinn oder Free Cashflow (noch) keine Aussagekraft hat.
📘 Unternehmenswert zu Umsatz (EV/Sales)
📈 Was ist das?
EV/Sales zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen, wenn man auch Schulden und Cash berücksichtigt – es ist eine kapitalstrukturbereinigte Version des KUV.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl eignet sich besonders für den Vergleich von Unternehmen mit unterschiedlicher Verschuldung – sie zeigt, wie teuer ein Unternehmen tatsächlich im Verhältnis zum Umsatz ist.
🧮 Berechnung
Enterprise Value = 3,47 Bio. ¥ | Umsatz (TTM) = 1,95 Bio. ¥
Enterprise Value = 3,47 Bio. ¥ | Umsatz erwartet = 2,05 Bio. ¥
🎯 Was bedeutet das für Anleger?
- EV/Sales ist neutral gegenüber der Kapitalstruktur und eignet sich gut für Unternehmensvergleiche.
- Ein niedriges Verhältnis kann auf eine günstig bewertete Aktie hindeuten – ein hohes Verhältnis auf hohe Erwartungen oder Überbewertung.
- Besonders nützlich bei wachstumsstarken, noch nicht profitablen Firmen.
📘 Unternehmenswert zu Free Cashflow (EV/FCF)
📈 Was ist das?
EV/FCF zeigt, wie viele Jahre es dauern würde, bis ein Unternehmen seinen Unternehmenswert durch freien Cashflow „zurückverdient”.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Unternehmen auf Basis ihrer tatsächlichen Cash-Erträge zu bewerten – unabhängig von Bilanzierungsregeln oder buchhalterischem Gewinn.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriges EV/FCF deutet auf eine günstige Bewertung bei starker Cashgenerierung hin.
- Ein hohes EV/FCF kann entweder auf Optimismus oder auf temporär schwachen Cashflow hindeuten.
- Besonders hilfreich bei reifen, profitablen Unternehmen mit stabilen Cashflows.
📘 Kurs-Buchwert-Verhältnis (KBV)
📈 Was ist das?
Das KBV zeigt, wie hoch der Marktwert eines Unternehmens im Verhältnis zu seinem bilanziellen Eigenkapital ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KBV ist besonders bei Substanzwerten (z. B. Banken, Industrie) relevant. Es hilft Anlegern zu erkennen, ob ein Unternehmen unter oder über seinem buchhalterischen Vermögen bewertet ist.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein KBV unter 1 kann auf Unterbewertung oder schwache Rentabilität hindeuten.
- Ein KBV über 1 zeigt, dass der Markt dem Unternehmen Mehrwert über den Buchwert hinaus zuschreibt (z. B. Marken, Patente, Wachstum).
- Das KBV eignet sich besonders gut für Unternehmen mit stabilen, materiellen Vermögenswerten.
📘 Dividende je Aktie
📈 Was ist das?
Die Dividende je Aktie zeigt, wie viel Geld ein Unternehmen pro Aktie an seine Aktionäre ausschüttet – typischerweise jährlich oder quartalsweise.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie ist die absolute Größe der Auszahlung je Aktie – wichtig für alle, die regelmäßige Erträge suchen oder Dividendenstrategien verfolgen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine stabile oder wachsende Dividende je Aktie ist oft ein Zeichen für ein solides Geschäftsmodell.
- Die Dividende je Aktie allein sagt aber nichts über die Rendite – dafür ist auch der Aktienkurs relevant (→ Dividendenrendite).
- Langfristig steigende Dividenden sind oft ein sehr gutes Merkmal (z. B. Dividenden-Aristokraten).
📘 Dividendenrendite
📈 Was ist das?
Die Dividendenrendite zeigt, wie hoch die Dividende eines Unternehmens im Verhältnis zum Aktienkurs ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft dabei, Dividendenaktien vergleichbar zu machen – unabhängig vom absoluten Auszahlungsbetrag.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine stabile Dividendenrendite kann auf verlässliche Ausschüttungen hinweisen.
- Ein Vergleich der 1J- und 5J-Rendite hilft zu erkennen, ob das Dividendenwachstum mit dem Kurswachstum Schritt hält.
- Eine niedrige Rendite ist nicht zwingend negativ – sie kann auf starkes Kurswachstum hindeuten.
📘 Dividendenwachstum
📈 Was ist das?
Das Dividendenwachstum zeigt, wie stark ein Unternehmen seine Dividende je Aktie über die Zeit gesteigert hat.
🧮 Wie wird es berechnet?
5J: durchschnittliche jährliche Wachstumsrate (CAGR)
🏛️ Wofür ist es wichtig?
Stetig steigende Dividenden gelten als Zeichen für finanzielle Stärke und Aktionärsorientierung – besonders interessant für langfristige Investoren.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein stabiles Dividendenwachstum ist ein Zeichen nachhaltiger Ertragskraft.
- Ein hohes Dividendenwachstum kann ein erheblicher Hebel deiner Rendite sein:
- Wenn ein Unternehmen z. B. 1 € Dividende zahlt und diese über 5 Jahre jährlich um 15 % erhöht, bekommst du im 5. Jahr bereits 2 € je Aktie – doppelt so viel wie zu Beginn!
📘 Ausschüttungsquote (Payout)
📈 Was ist das?
Die Ausschüttungsquote zeigt, wie viel Prozent des Unternehmensgewinns (pro Aktie) als Dividende an die Aktionäre ausgeschüttet wird.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Quote hilft einzuschätzen, ob eine Dividende auf Dauer tragfähig ist – besonders im Verhältnis zum erzielten Gewinn.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine niedrige Ausschüttungsquote bedeutet: Das Unternehmen behält einen größeren Teil des Gewinns für Investitionen – typisch für Wachstumsunternehmen.
- Eine moderate Quote (z. B. 25–50 %) steht oft für ein gesundes Gleichgewicht zwischen Ausschüttung und Zukunftsinvestitionen.
- Hohe Ausschüttungsquoten können attraktiv wirken, sind aber riskanter, wenn die Gewinne schwanken oder sinken.
📘 Dividendensteigerungen in Folge (Erhöhungen)
📈 Was ist das?
Diese Kennzahl zeigt, wie viele Jahre in Folge ein Unternehmen seine Dividende pro Aktie erhöht hat – ohne Kürzung oder Aussetzung.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Ein langer Track Record kontinuierlicher Erhöhungen spricht für Verlässlichkeit, solide Finanzen und aktionärsfreundliche Unternehmenspolitik.
🎯 Was bedeutet das für Anleger?
- Ein langer Zeitraum mit Dividendensteigerungen stärkt das Vertrauen – besonders in Krisenzeiten.
- Solche Unternehmen gelten als verlässlich und planbar für Einkommensinvestoren.
- Je länger die Serie, desto stärker das Commitment gegenüber den Aktionären.
📘 Umsatz
📈 Was ist das?
Der Umsatz zeigt, wie viel ein Unternehmen insgesamt mit seinen Produkten und Dienstleistungen verdient – also den Bruttoerlös vor Abzug von Kosten.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Umsatz ist eine der zentralen Kennzahlen zur Einschätzung der Unternehmensgröße, Marktstellung und Wachstumskraft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein wachsender Umsatz zeigt eine steigende Nachfrage und kann ein guter Frühindikator für Gewinnsteigerungen sein.
- Vergleiche von aktuellem und erwartetem Umsatz geben Hinweise auf das Marktumfeld und Analystenerwartungen.
- Wichtig: Starker Umsatz allein genügt nicht – auch Margen und Profitabilität zählen.
📘 EBITDA
📈 Was ist das?
EBITDA steht für „Earnings Before Interest, Taxes, Depreciation and Amortization“ – also Gewinn vor Zinsen, Steuern und Abschreibungen. Es zeigt das operative Ergebnis eines Unternehmens, bereinigt um bilanztechnische und finanzierungsbedingte Effekte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBITDA ist eine verbreitete Kennzahl zur Beurteilung der operativen Leistungsfähigkeit – insbesondere bei kapitalintensiven Unternehmen oder im internationalen Vergleich.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes oder wachsendes EBITDA spricht für starke operative Erträge – unabhängig von Bilanzierung oder Steuerlast.
- EBITDA ist besonders nützlich, um Unternehmen branchenübergreifend zu vergleichen.
- Wichtig: EBITDA ist keine offizielle Gewinnkennzahl – Abschreibungen und Finanzierungskosten werden ausgeklammert.
📘 EBIT
📈 Was ist das?
EBIT steht für „Earnings Before Interest and Taxes“ – also Gewinn vor Zinsen und Steuern. Es zeigt das operative Ergebnis eines Unternehmens nach Abschreibungen, aber vor Finanzierungs- und Steueraufwand.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBIT ist eine zentrale Kennzahl zur Beurteilung der Profitabilität aus dem Kerngeschäft – unabhängig von Kapitalstruktur oder Steuersystem.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes EBIT deutet auf ein profitables Kerngeschäft hin – vor Zinslasten oder steuerlichen Effekten.
- Es erlaubt objektivere Vergleiche zwischen Unternehmen mit unterschiedlicher Finanzierung.
- Im Vergleich mit EBITDA zeigt EBIT bereits den Einfluss von Abschreibungen auf das operative Ergebnis.
📘 Nettogewinn
📈 Was ist das?
Der Nettogewinn ist der verbleibende Jahresüberschuss (oder -fehlbetrag) eines Unternehmens – nach Abzug aller Kosten, Steuern, Zinsen und Abschreibungen
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Nettogewinn ist die zentrale Erfolgskennzahl – er zeigt, wie profitabel ein Unternehmen nach allen Kosten tatsächlich arbeitet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein steigender Nettogewinn zeigt, dass das Unternehmen effizient wirtschaftet – trotz aller Kosten.
- Die Entwicklung des Gewinns beeinflusst z. B. direkt das KGV und weitere Kennzahlen.
- Im Zeitverlauf lässt sich ablesen, wie stabil und profitabel ein Geschäftsmodell wirklich ist.
📘 Free Cashflow (FCF)
📈 Was ist das?
Der Free Cashflow gibt Aufschluss über die echte finanzielle Stärke eines Unternehmens – unabhängig von Bilanzierungsregeln. Er zeigt, wie viel Spielraum für Dividenden, Aktienrückkäufe oder Schuldenabbau besteht.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow bedeutet, dass ein Unternehmen echte Finanzkraft besitzt – unabhängig vom bilanzierten Gewinn.
- Er ist oft die solideste Grundlage für nachhaltige Dividenden und Aktienrückkäufe.
- Sinkender FCF kann ein Warnsignal sein – auch wenn der Gewinn stabil aussieht.
📘 Umsatzwachstum
📈 Was ist das?
Das Umsatzwachstum zeigt, wie stark sich die Erlöse eines Unternehmens im Vergleich zum Vorjahr verändert haben – tatsächlich (TTM) und auf Prognosebasis (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (Umsatz erwartet ÷ Umsatz Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein wachsender Umsatz ist ein zentrales Signal für steigende Nachfrage, Geschäftsausweitung und Marktanteilsgewinne – besonders bei Wachstumsunternehmen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachstum ist der Motor langfristiger Wertsteigerung – besonders bei Technologie- und Wachstumsaktien.
- Wichtig ist nicht nur das aktuelle Wachstum, sondern auch dessen Nachhaltigkeit.
- Prognosen zeigen, ob Analysten weiteres Potenzial erwarten – oder eine Verlangsamung.
📘 EBITDA-Wachstum
📈 Was ist das?
Das EBITDA-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens vor Zinsen, Steuern und Abschreibungen im Vergleich zum Vorjahr gestiegen oder gesunken ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBITDA ÷ EBITDA Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein steigendes EBITDA ist ein Zeichen für verbesserte operative Ertragskraft – unabhängig von Finanzierungsstruktur oder Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Starkes EBITDA-Wachstum signalisiert operative Effizienz und Skalierung – besonders relevant in Wachstumsphasen.
- EBITDA-Wachstum ist ein Frühindikator für Margen- und Gewinnentwicklung – sollte aber stets im Zusammenhang mit Umsatz und EBIT betrachtet werden.
📘 EBIT Wachstum
📈 Was ist das?
Das EBIT-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens (nach Abschreibungen, aber vor Zinsen und Steuern) im Vergleich zum Vorjahr gewachsen ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBIT ÷ EBIT Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Das EBIT-Wachstum ist ein direkter Indikator für die wirtschaftliche Entwicklung des operativen Geschäfts – unter Berücksichtigung der Kapitalintensität (Abschreibungen).
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Steigendes EBIT signalisiert wachsende operative Rentabilität – auch unter Berücksichtigung von Abschreibungen.
- Das EBIT-Wachstum ist ein wichtiges Maß zur Beurteilung von Geschäftsmodellen mit hohen Investitionskosten.
- Im Zusammenspiel mit Umsatz- und EBITDA-Wachstum ergibt sich ein umfassendes Bild zur operativen Entwicklung.
📘 Nettogewinn-Wachstum
📈 Was ist das?
Das Nettogewinn-Wachstum zeigt, wie stark der Jahresüberschuss eines Unternehmens gegenüber dem Vorjahr gestiegen oder gesunken ist – sowohl tatsächlich (TTM) als auch auf Basis von Prognosen (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (erwarteter Nettogewinn ÷ Nettogewinn Vorjahr − 1) × 100
Der erwartete Wert basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Der Gewinn ist die entscheidende Ergebnisgröße für ein Unternehmen. Ein wachsender Nettogewinn deutet auf steigende Effizienz, stabile Kostenkontrolle und nachhaltige Ertragskraft hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachsender Nettogewinn stärkt die Bewertung, Dividendenfähigkeit und Kursfantasie.
- Stagnierender oder rückläufiger Gewinn trotz Umsatzwachstum kann auf Margendruck hinweisen.
📘 Free Cashflow-Wachstum
📈 Was ist das?
Das Free-Cashflow-Wachstum zeigt, wie sich der freie Mittelzufluss eines Unternehmens im Vergleich zum Vorjahr verändert hat – also der Betrag, der nach allen operativen Ausgaben und Investitionen übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Free Cashflow ist der echte, verfügbare Geldzufluss. Wachstum in diesem Bereich ist ein Zeichen für finanzielle Stärke und steigende Flexibilität bei Dividenden, Rückkäufen oder Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Sinkender Free Cashflow kann auf steigende Investitionen, höhere Kosten oder stagnierende operative Erträge hindeuten.
- Besonders bei Dividendenwerten ist das FCF-Wachstum wichtig – denn Dividenden werden letztlich aus dem verfügbaren Cash gezahlt.
- Ein negativer Trend sollte genauer analysiert werden – er ist nicht zwangsläufig schlecht, aber potenziell ein Warnsignal.
📘 Bruttomarge
📈 Was ist das?
Die Bruttomarge zeigt, wie viel vom Umsatz nach Abzug der direkten Herstellungskosten (Material, Produktion) als Bruttogewinn übrig bleibt – also der „Rohgewinn“ eines Unternehmens.
🧮 Wie wird es berechnet?
Auch: Bruttomarge = Bruttogewinn ÷ Umsatz × 100
🏛️ Wofür ist es wichtig?
Die Bruttomarge gibt Aufschluss über die Profitabilität eines Produkts oder Geschäftsmodells vor Fixkosten, Steuern und Zinsen. Sie zeigt, wie effizient ein Unternehmen produzieren oder einkaufen kann.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Bruttomarge deutet auf starke Preissetzungsmacht und effiziente Herstellung hin.
- Sinkende Bruttomargen können auf Kostensteigerungen oder Preisdruck hindeuten.
- Besonders im Vergleich zu Wettbewerbern liefert die Bruttomarge wertvolle Einblicke in die Geschäftsqualität.
📘 EBITDA-Marge
📈 Was ist das?
Die EBITDA-Marge zeigt, wie viel vom Umsatz als operativer Gewinn vor Zinsen, Steuern und Abschreibungen (EBITDA) übrig bleibt. Sie misst die operative Effizienz – ohne Verzerrungen durch Finanzierung oder Buchwerte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBITDA-Marge hilft zu verstehen, wie viel operativer Gewinn ein Unternehmen aus jedem Euro Umsatz erzielt – unabhängig von Kapitalstruktur oder steuerlichem Umfeld.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBITDA-Marge zeigt starke operative Ertragskraft – unabhängig von Bilanzierungseffekten.
- Die Marge ermöglicht gute Vergleiche zwischen Unternehmen und Branchen.
- Ein stabiler oder wachsender Wert kann auf effiziente Kostenkontrolle und Skalierbarkeit hindeuten.
📘 EBIT-Marge
📈 Was ist das?
Die EBIT-Marge zeigt, wie viel Prozent des Umsatzes als operativer Gewinn nach Abschreibungen, aber vor Zinsen und Steuern übrig bleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBIT-Marge misst die operative Ertragskraft eines Unternehmens unter Berücksichtigung der Kapitalintensität (z. B. Maschinen, Anlagen). Sie eignet sich gut zum Vergleich von Geschäftsmodellen mit unterschiedlich hohen Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBIT-Marge zeigt, dass ein Unternehmen auch nach Abschreibungen effizient arbeitet.
- Sie ist besonders relevant in kapitalintensiven Branchen.
- Langfristig stabile oder steigende Margen sind ein Zeichen wirtschaftlicher Stärke und Preissetzungsmacht.
📘 Nettomarge
📈 Was ist das?
Die Nettomarge zeigt, wie viel vom Umsatz am Ende als „Reingewinn“ übrig bleibt – also nach Abzug aller Kosten, Zinsen, Steuern und Abschreibungen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Nettomarge gibt an, wie effizient ein Unternehmen über alle Stufen hinweg wirtschaftet. Sie zeigt, wie viel Gewinn tatsächlich je Euro Umsatz übrig bleibt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Nettomarge zeigt, dass ein Unternehmen nicht nur operativ stark ist, sondern auch seine Finanzierung und Steuerbelastung im Griff hat.
- Vergleiche mit Wettbewerbern geben Einblicke in die wirtschaftliche Qualität.
- Sinkende Nettomargen trotz Umsatzwachstum können ein Warnsignal sein – etwa für steigende Kosten oder sinkende Effizienz.
📘 Free Cashflow Marge
📈 Was ist das?
Die Free-Cashflow-Marge zeigt, wie viel vom Umsatz nach Abzug aller operativen Ausgaben und Investitionen tatsächlich als freier Mittelzufluss übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Marge misst die echte Liquidität, die ein Unternehmen erwirtschaftet – unabhängig von Bilanzierungsregeln oder Abschreibungen. Sie ist besonders relevant für Dividenden, Rückkäufe und Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Free-Cashflow-Marge zeigt, dass ein Unternehmen nachhaltig liquide Mittel erwirtschaftet.
- Sie ist ein starkes Signal für finanzielle Stabilität und Ausschüttungspotenzial.
- Wichtig ist der langfristige Trend – sinkende Werte können auf steigende Investitionen oder rückläufige operative Effizienz hindeuten.
📘 Eigenkapitalquote
📈 Was ist das?
Die Eigenkapitalquote zeigt, wie hoch der Anteil des Eigenkapitals an der Bilanzsumme eines Unternehmens ist – also wie stark es sich aus eigenen Mitteln finanziert.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Eine hohe Eigenkapitalquote steht für finanzielle Stabilität, Krisenfestigkeit und gute Bonität. Sie ist besonders relevant bei der Beurteilung der Verschuldung.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalquote signalisiert finanzielle Stabilität – besonders in Krisenzeiten.
- Ein niedriger Wert kann auf ein höheres Risiko oder eine aggressive Verschuldung hinweisen.
- Wichtig: Die Eigenkapitalquote sollte immer gemeinsam mit der Eigenkapitalrendite betrachtet werden. Nur so lässt sich beurteilen, ob ein Unternehmen nicht nur solide, sondern auch effizient wirtschaftet.
📘 Eigenkapitalrendite (ROE)
📈 Was ist das?
Die Eigenkapitalrendite zeigt, wie effizient ein Unternehmen mit dem Kapital seiner Aktionäre arbeitet – also wie viel Gewinn es pro Euro Eigenkapital erwirtschaftet.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Eigenkapitalrendite ist eine zentrale Rentabilitätskennzahl. Sie hilft Anlegern zu erkennen, ob das Unternehmen eine attraktive Verzinsung auf das eingesetzte Eigenkapital erwirtschaftet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalrendite spricht für ein starkes, effizientes Geschäftsmodell.
- Besonders interessant ist sie bei kapitalintensiven Firmen oder solchen mit hoher Eigenkapitalquote.
- Wichtig: Ein sehr hoher ROE kann auch auf hohe Schulden hinweisen – daher sollte sie immer im Kontext mit der Eigenkapitalquote betrachtet werden.
📘 Return on Capital Employed (ROCE)
📈 Was ist das?
ROCE misst die Gesamtrentabilität eines Unternehmens – also wie effizient es das eingesetzte Kapital (Eigen- und Fremdkapital) zur Gewinnerzielung nutzt.
🧮 Wie wird es berechnet?
Das eingesetzte Kapital ist das gesamte betriebsnotwendige Kapital, unabhängig von der Finanzierungsquelle.
🏛️ Wofür ist es wichtig?
ROCE eignet sich besonders gut für den Vergleich unterschiedlich finanzierter Unternehmen. Es zeigt, wie effektiv ein Unternehmen Kapital investiert – unabhängig von der Kapitalstruktur.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROCE zeigt, dass ein Unternehmen sein Kapital effizient einsetzt – unabhängig davon, ob es durch Eigen- oder Fremdkapital finanziert ist.
- Je höher der ROCE im Vergleich zu ähnlichen Unternehmen, desto mehr Wert schafft das Unternehmen mit seinem investierten Kapital.
- Besonders wichtig ist der ROCE bei Firmen mit hohen Investitionen – z. B. in Industrie, Energie oder Infrastruktur.
📘 Return on Invested Capital (ROIC)
📈 Was ist das?
ROIC zeigt, wie effizient ein Unternehmen das Kapital investiert, das langfristig im operativen Geschäft gebunden ist – unabhängig davon, ob es aus Eigen- oder Fremdkapital stammt.
🧮 Wie wird es berechnet?
- NOPAT = „Net Operating Profit After Taxes“
- Investiertes Kapital = operatives Vermögen abzüglich nicht-verzinster Schulden
🏛️ Wofür ist es wichtig?
ROIC ist eine der präzisesten Kennzahlen zur Bewertung der Kapitalrendite – besonders im Vergleich zur Eigenkapitalrendite, weil es Verzerrungen durch Schulden vermeidet. Er zeigt, ob ein Unternehmen Mehrwert für alle Kapitalgeber schafft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROIC zeigt, wie gut ein Unternehmen mit dem tatsächlich investierten (betriebsnotwendigen) Kapital wirtschaftet.
- Im Unterschied zu ROCE wird nur Kapital betrachtet, das wirklich zur Finanzierung operativer Aktivitäten dient – und verzinst werden muss.
- Besonders hilfreich, um die Kapitalrendite von Unternehmen mit viel „überschüssigem“ Kapital oder zinsfreien Verbindlichkeiten realistisch zu vergleichen.
📘 Verschuldungsgrad (Leverage Ratio)
📈 Was ist das?
Der Verschuldungsgrad zeigt, wie stark ein Unternehmen durch verzinsliche Schulden (z. B. Kredite und Anleihen) im Verhältnis zum Eigenkapital finanziert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Kennzahl hilft, das finanzielle Risiko und die Abhängigkeit von Fremdkapital zu beurteilen. Ein hoher Verschuldungsgrad kann die Eigenkapitalrendite steigern – birgt aber auch erhöhte Risiken bei Zinsanstiegen oder Liquiditätsengpässen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Verschuldungsgrad steht für finanzielle Stabilität und Unabhängigkeit.
- Ein hoher Wert kann auf erhöhte Risiken hinweisen – insbesondere bei schwankenden Zinsen oder konjunkturellen Schwächen.
- Wichtig: Immer im Kontext zur Branche und Kapitalintensität bewerten.
📘 Ergebnis je Aktie (EPS)
📈 Was ist das?
Das Ergebnis je Aktie (EPS) zeigt, wie viel Gewinn auf eine einzelne Aktie entfällt – und ist eine der wichtigsten Kennzahlen zur Bewertung von Unternehmen.
🧮 Wie wird es berechnet?
Die verwässerte Aktienanzahl berücksichtigt auch potenzielle neue Aktien, etwa durch Optionen, Wandelanleihen oder andere Umtauschrechte.
🏛️ Wofür ist es wichtig?
EPS bildet die Basis für viele Bewertungskennzahlen wie KGV, PEG oder Payout Ratio. Es macht den Gewinn für Aktionäre vergleichbar – unabhängig von der Unternehmensgröße.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- EPS hilft, die Profitabilität pro Aktie zu erfassen – und ist besonders wichtig im Zeitvergleich oder im Vergleich mit Analystenschätzungen.
- Steigendes EPS kann ein Zeichen für stabiles Wachstum oder Aktienrückkäufe sein.
- Wichtig: Verwende verwässertes EPS für realistische Bewertungen – besonders bei stark aktienbasierten Vergütungssystemen.
📘 Free Cashflow je Aktie (FCF je Aktie)
📈 Was ist das?
Der Free Cashflow je Aktie zeigt, wie viel freier Mittelzufluss einem Unternehmen pro Aktie zur Verfügung steht – nach Investitionen, aber vor Dividenden oder Schuldentilgung.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der FCF je Aktie zeigt, wie viel liquide Mittel pro Aktie tatsächlich im Unternehmen verbleiben – wichtig für Dividenden, Aktienrückkäufe oder Schuldentilgung. Im Gegensatz zum Gewinn ist er schwerer manipulierbar und daher besonders aussagekräftig.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow je Aktie ist ein Zeichen für hohe finanzielle Flexibilität.
- Er zeigt, wie viel Kapital ein Unternehmen effektiv einsetzen oder ausschütten kann.
- Besonders relevant für dividendenstarke Unternehmen oder solche mit starker Kapitalrendite.
📘 Short Interest
📈 Was ist das?
Short Interest zeigt, wie viele Aktien eines Unternehmens aktuell leerverkauft wurden – also von Investoren geliehen und verkauft, in der Erwartung fallender Kurse.
🧮 Wie wird es berechnet?
Der Wert zeigt den Anteil der Aktien, der aktuell auf fallende Kurse spekuliert wird.
🏛️ Wofür ist es wichtig?
Short Interest dient als Stimmungsindikator: Ein hoher Wert deutet auf Skepsis oder negative Erwartungen gegenüber dem Unternehmen hin – kann aber auch zu einem „Short Squeeze“ führen, wenn der Kurs plötzlich steigt.
🎯 Was bedeutet das für Anleger?
- Ein niedriger Short Interest deutet auf Vertrauen in das Unternehmen hin.
- Ein hoher Wert kann ein Warnsignal sein – oder eine Chance, wenn sich die Stimmung dreht.
- Besonders spannend in volatilen Märkten oder vor wichtigen Quartalszahlen.
📘 Employees
📈 Was ist das?
Die Mitarbeiteranzahl zeigt, wie viele Personen ein Unternehmen weltweit beschäftigt – ein Indikator für Größe, Struktur und Geschäftsmodell.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft bei der Einschätzung von Skaleneffekten, Effizienz und Personalkosten. Zusammen mit Umsatz und Gewinn lassen sich Kennzahlen wie Produktivität je Mitarbeiter ableiten.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Viele Mitarbeiter bedeuten große operative Komplexität – aber auch hohes Umsatzpotenzial.
- Produktivität je Mitarbeiter ist ein wichtiger Indikator für Effizienz.
- Besonders spannend bei stark wachsenden Tech- oder Industrieunternehmen.
📘 Umsatz je Mitarbeiter
📈 Was ist das?
Der Umsatz je Mitarbeiter zeigt, wie viel Erlös ein Unternehmen durchschnittlich pro Beschäftigtem erwirtschaftet – eine Kennzahl für Effizienz und Produktivität.
🧮 Wie wird es berechnet?
Die Mitarbeiterzahl stammt in der Regel aus dem letzten verfügbaren Jahresbericht.
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Geschäftsmodelle zu vergleichen – insbesondere zwischen arbeitsintensiven und technologiegetriebenen Unternehmen. Ein hoher Wert deutet auf Automatisierung, Effizienz oder hohen Wertschöpfungsanteil hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Umsatz je Mitarbeiter spricht für ein skalierbares und margenstarkes Geschäftsmodell.
- Ein niedriger Wert kann auf arbeitsintensive Prozesse oder geringere Wertschöpfung hinweisen.
- Besonders hilfreich beim Vergleich von Tech- vs. Industrieunternehmen.
Nippon Paint Holdings Co Aktie Analyse
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Nippon Paint Holdings Co Events
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Nippon Paint Holdings Co — Q2 2026 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you very much for your patience. From here, we would like to start Nippon Paint Holdings Earnings Teleconference for the second quarter of the fiscal year ending December 2026. [Operator Instructions] Please be advised that simultaneous translation for Japanese and English is provided for today's conference.
Mr. Wakatsuki-san, please begin.
Thank you very much. Good afternoon, everyone. I am Wakatsuki, Co-President of Nippon Paint Holdings. Thank you very much for joining us today despite your busy schedule. I will now outline the key points of our financial results for the second quarter of fiscal 2026. Please note that members of the media are also joining us today.
I'll begin by addressing 2 points on Slide #2. First, regarding the revision of our full year earnings forecast for fiscal 2026. To properly reflect the current market conditions, we have adjusted our exchange rate assumptions shifting towards a weaker yen compared to the initial forecast in February. Specifically, the assumed rate for the U.S. dollar has been revised from previously JPY 150 to JPY 155 for the second quarter and JPY 156.8 for the full year. Chinese yuan from previously JPY 21.5 to JPY 23.1 for the full year.
Second, regarding the definition of adjusted profit, we have slightly changed the treatment of PPA-related expenses and retroactively restated the figures from the prior years. We believe this change will allow us to improve the comparability with our global peers and better reflect our underlying business performance. First, number three, Page #3. Please take a look at the long-term historical trend of second quarter performance.
As we have mentioned before, we take a dual approach of organic growth and M&A, and we have steadily expanded the revenue, adjusted operating profit and adjusted EPS with this approach. In the second quarter, even amidst uncertain business environment such as the raw material prices caused by the Middle East situation, we have maintained and expanded our profitability through measures like price pass-throughs and cost control. And the second quarter results represents the continuation of this track record. And especially for the second quarter, although there was no incremental contribution from the new M&A activity from the previous fiscal year, we have been able to sustain a strong organic growth in the adjusted operating profit.
Next, Page 4. Let's review the financial results for the second quarter. Revenue was JPY 133.4 billion, up 19.4% year-on-year. This growth was driven by increased sales volume and improved product mix as well as the favorable exchange rate. Adjusted operating profit stood at JPY 94.9 billion, an increase of 30.4%, a significant increase year-on-year.
Adjusted operating profit margin was 17.8%, an improvement of 1.5 percentage point from the previous year. Adjusted EPS was JPY 29.4, up 31.7% year-on-year. The key takeaway here is not -- is just not that we simply increased sales. Even amid the uncertain situation in the Middle East, we achieved margin improvement by combining revenue growth with better raw material cost ratio and effective cost control. The impact of soaring raw material costs linked with the situation in the Middle East varies by region and business.
While we were able to absorb these costs in the second quarter through price pass-throughs and cost reduction initiatives, the impact may become more pronounced in the second half of the year. We are not taking an optimistic view about the situation, and we will manage the operations in each region closely monitoring the pricing, procurement, inventory and SG&A expenses. Regarding the performance by segment, AOC, because the market shows signs of bottoming out, AOC achieved increases in both revenue and profit driven by price hikes and to offset the raw material cost increase and increased sales volume.
Japan NIPSEA other than China and DJO Pacific also posted revenue and profit growth, supported by higher sales volume and product price increases and other factors. As for NIPSEA China, the surge in raw material costs exacerbated by the Middle East situation further compounded the effects of the weak real estate market and subdued consumer sentiment. Amid this challenging environment, rather than aggressively pushing for volume expansion, we prioritized sales discipline, cost efficiency and the maintenance of the brand strength, and this approach allows us to secure a profit margin of about 15%.
We believe it is crucial to maintain a management approach that safeguards profitability without relying on the assumption of an early recovery in the Chinese market. Next, I will explain on Page 5, the revisions to our full year earnings forecast for fiscal 2026. First, regarding revenue, we raised our forecast from the JPY 1.92 trillion in February to JPY 2 trillion, an improvement of JPY 80 billion. This represents an expected year-on-year increase of 12.7%. We have also presented figures for adjusted metrics.
We anticipate the full year adjusted operating profit of JPY 316 billion, an adjusted operating profit margin of 15.8% and adjusted EPS of JPY 95.7. These figures represents a projected 13.6% increase in adjusted operating profit and 10% growth in adjusted EPS compared to the previous fiscal year.
Driven by the strong performance in the first and second quarters, alongside the continued effectiveness of price pass-throughs and cost control measures, we expect to achieve record high levels of revenue and profit for the full year. At the same time, as we stated when we announced the first quarter results, we are adopting somewhat cautious assumptions for the second half of the year. China's real estate market is still in the process of recovery and the consumer sentiment is still subdued.
Furthermore, we continue to face rising raw material costs driven by the situation in the Middle East and the uncertainty in the United States still continues. Rather than counting on market recovery, we believe by continuing to pass on cost, improving product mix, reducing cost and controlling SG&A, we can absorb these cost increases and maintain the profitability levels for the full year that are in line with our projections.
Regarding the reported figures, we maintain our operating profit forecast at JPY 283 billion unchanged. This reflects the fact that the upward revision resulting from foreign exchange rate fluctuations is being offset by the one-off expenses such as M&A-related costs and business transformation costs for the DuluxGroup in Europe. We also project EPS at JPY 81.5, a figure that accounts for the impact of one-off expenses and effective tax rate. The forecast for annual dividend remains unchanged at JPY 17 per share.
We intend to continue prioritizing EPS growth from the perspective of MSV while updating the outlook for the first quarter onwards as necessary.
Page 6 and 7. Next, I would like to outline the assumptions underlying our full year forecast, reflecting the first half results, which were strong. And despite anticipating some adjustments in the second half of the year, we revised raised our adjusted operating profit forecast for Japan DuluxGroup and NIPSEA business other than China.
On the other hand, regarding NIPSEA China, where the real estate market and consumer sentiment remains sluggish, we maintained our forecast for the Automotive segment, but revised our initial forecast for both TUC and TUB. As for the Americas, due to the persistent economic uncertainty, we maintained the outlook for AOC as the market shows signs of bottoming up, but we still take a cautious approach for the Americas.
Page 8. Market conditions are expected to be flattish year-on-year in the second half and beyond. Japan in the second quarter due to supply concern because of Middle East situation and brought forward demand, there was a temporarily strong movement mainly for decorative. But for third quarter and beyond, we don't expect such a special factor. China, automotive business is relatively strong, but TUC in the second quarter dropped markedly due to Middle East situation, but we expect market in the third quarter will recover to the first quarter level. The Americas, there's uncertainty in automotive production and housing demand. For AOC, end market demand cannot be said to have strong recovery yet. Meanwhile, the business is becoming solid through price flexibility, continued supply and sales volume improvement.
Given such market conditions, this full year forecast this time is not an explanation of good first half results, but rather based on the pursuit of profitable growth with uncertainty factored in. Next, Page 9. I'll explain the outline of results of major segments. The details will be left to Q&A session, so just a brief comment. First, Japan. Revenue, JPY 61.6 billion, up 17.9%. Adjusted operating profit is JPY 8.9 billion, up 65%. For decorative, sales increase and sales brought forward of hydraliability product for architectural and structural products contributed and for industrial automotive, sales volume increase contributed.
For profit side, increased revenue and improved material cost ratio, SG&A ratio significantly contributed. NIPSEA China revenue JPY 129.1 billion, up 9.7%. Adjusted OP profit, JPY 18.7 billion, flattish year-on-year. On a yen basis, revenue increased, but TUC saw a 14% decrease in revenue in local currencies due to sluggish real estate market in China and weak consumer sentiment. TUB also decreased its revenue by 9% due to sluggish market in local currency. That said, profitable profit margin is maintained by keeping sales channel discipline, avoiding inventory buildup and improved cost efficiency.
NIPSEA, except China, revenue, JPY 124.9 billion, up 26.4%. Adjusted operating profit, JPY 27.4 billion, up 53.1%, very strong results. Growth was achieved in wide areas, including Malaysia, Singapore, Thailand, Tukai, Indonesia and India. Increased revenue, improved raw material cost ratio and effort for rationalization led to profit increase. DuluxGroup, First Pacific, revenue JPY 73.7 billion, up 29.2%. Adjusted operating profit, JPY 10.7 billion, up 42.9%.
Even under tough market environment, Specialty Coatings business share increase and small-sized acquisition and FX, big factor contributed. DuluxGroup Europe revenue JPY 50.1 billion, up 19.9%. Adjusted OP profit, JPY 5 billion, up 9.6%. The France was flattish year-on-year in South and Central Europe showed some strong growth. But Europe as a whole is still on the path for recovery. Next, Americas. revenue JPY 34.9 billion, up 12.2%. Adjusted operating profit, JPY 3.2 billion, up 8.5%. For automotive, share increased through acquisition of new business.
For decorative, price hike and FX contributed, but the market conditions remain tough. Lastly, AOC revenue JPY 59.1 billion, up 23%; adjusted OP profit, JPY 21.5 billion, up 26%. Even without plus 12% coming from FX, the performance was very robust. While macro environment remains severe, profit contribution level remains high through pass-through of material cost increase on prices, sales volume increase and sales volume growth in Americas and Europe exceeding that in Asia Pacific, leading to better regional breakdown. AOC, although some retrospective correction due to finalized PPA, profitability and cash creation capability on an adjusted basis remains robust. Page 10, main topics.
First, let me explain about purchase back of European automotive coatings business from Wuthelam Group, which we announced today. In August 2021, we announced transfer of European automotive business to Wuthelam Group. And this time, we will purchase it back at about EUR 47 million or about JPY 8.5 billion. The closing is expected in October -- within October 2026. With this deal and with Indian business purchased back in 2024, there will be no Nippon Paint Group business directly held by Wuthelam Group.
What is important about this deal is not the formality of buying it back, but we have made a judgment that the purchase at this time is the best from MSV point of view. Under Wuthelam umbrella, reorganization and other rehabilitation measures have progressed and the performance recovered to some extent compared to the time of FT transfer. We judged it to be better to take integrated approach, including capital relationship to accelerate automotive coating business globally.
For this deal, we set up a special committee comprising of 3 independent directors to discuss profit and protection of minority shareholders and from MSV perspective. The acquisition price was decided based on equity value calculation by the third party and the BOD Chairman Go has not participated in deliberation and resolution of this deal. In the first year after this deal, its impact for October, December '26 period is expected to be modest from 2027, more recovery is expected. The size of financial impact is limited, but we believe it is a significant step from a strategic point of view.
Page 11, other topics. First, about integrated report 2026 issued in June. This year's report was planned, structured and edited based on representative questions from investors to convey more clearly the present position vis-a-vis MSP journey and the points of argument from now on. Each section explains about thinking about these questions and specific initiatives. The report features many interesting content, including a dialogue among Co-President, We, BOD Chair Nakamura and myself. Please read it in your leisure time.
On July 23, we announced reorganization of Japan Group, where Nippon Paint SS Chemicals is to be split and integrated into Nippon Paint Automotive Coatings and Nippon Paint Industrial Coatings effective January 1, 2027. And we have published information both internally and externally. We will shift to a system to offer surface treatment product and coatings products, which have been provided from its subsidiary in a more integrated manner. By doing so, we will further strengthen product development and technology service, improving competitiveness and customer satisfaction.
Lastly, let me report that we are awarded the distinguished service Encouragement Award at the 42nd Corporate Public Relations Award. The advertising activities we'd like to deepen trust relationship with stakeholders and foster understanding and pride among employees for our company. In the second results, we achieved record high revenue and adjusted operating profit owing to global partner company's continuous effort in wide areas, including material procurement, product supply and customer service. That said, there remains some issues to note such as raw materials, FX and geopolitical risks.
Our employees are operating with a sense of alert towards the second half. We are committed to pursue to achieve MSV as said assembler by watching closely those risks and accumulating adjusted profit, EPS and cash. We would like to continue to hold dear constructive engagement with investors.
Thank you very much for listening.
[Operator Instructions] This is a question from the Japanese channel. We'd like to take the question from the Japanese channel. The first question is from Goldman Sachs. Ikeda-san.
2. Question Answer
This is Ikeda from Goldman Sachs Securities. Congratulations on your very good results. The full year adjusted OP. Compared to the February forecast, you have decided to keep it unchanged. By region, I think there may be different colors. In Japan and other than -- NIPSEA other than China, they have achieved upside, but NIPSEA China, I think, has been revised downwards. MFC AOC remains unchanged according to my understanding.
To the extent possible, with the raw material prices going up, can you give us some color regarding the pricing trends and also the volume? Have they changed compared to initial forecast? And also for China, the raw material costs -- raw material, I think, is easy to procure, I think, and the there might be room for you to reduce prices, but the prices and also the volume are coming down according in China, the consumption mindset given the situation in the Middle East, such as what is the situation regarding the coating or painting business in these markets? If you can comment on that?
Thank you very much, Ikeda-san, for the question. Regarding your first question, to avoid any misunderstanding, OP, adjusted operating profit, as of February, we did not give the detailed number, the concrete number because AOP, adjusted AOP was revised upwards effectively.
On a reported basis, the operating profit remains unchanged because in the adjustment items, there are one-off expenses. So in the new forecast, these things offset the favorable impact of the foreign exchange. So therefore, JPY 283 billion remains unchanged. Roughly, my gut feeling says that the February AOP was about JPY 300 billion or so. I think that was the ballpark figure that we had anticipated. So in that regard, there was basically an upward trend. So this is the strength of our underlying performance.
Now the AOP margin as of the first half was 15.8%. And then in the second half, because there are some uncertainties, to what extent do we factor in such uncertainty was the question. As of this point, these are -- the numbers that we present is the must achieve number. And so roughly speaking, the second quarter in many regards, the price pass-throughs, we were able to achieve this quite swiftly. And because the traits of a company, we have agility.
So we were able to agilely pass on the prices. But the raw materials prices are coming up, and there's a timing difference of about 6 to 3 months. So the inventory benefits are still manifesting themselves. So towards the second half of the year, the downward pressure on the margin will have to be -- we have to anticipate that. So as it turns out, on a full year basis, 15.8%, I think, is something that we are well positioned to achieve.
As far as revenue is concerned, the demand recovery is not something that we anticipate. That's what I explained in the heat map. So we would like to fulfill our responsibility to supply and also improve the market share and thereby secure margin through -- by working on cost control. So that's the basic approach that we would like to take. Secondly, regarding the China market, to be honest with you, in the second quarter, on a local currency basis, TUC was quite difficult, quite tough.
First and foremost, as Ikeda-san mentioned, the real estate market in China, we are seeing signs of bottoming out already in China. However, the bread and butter TUC business, this relates to consumer goods, slow-moving consumer goods. those repainting demand, this is quite affected by the consumer sentiment quite significantly. So overall, when we look at many different statistics, rather than spending, people are now focused on savings. People are quite cautious right now, and they're not spending money as much as before.
So eventually, I think people will start repainting their homes or whatever. But at this point of time, the situation remains very tough. If I may add one more comment. In light of the situation, we -- including relationship with the distributors, we are not going to push our sales towards them. We would like to make sure that keep quite closely monitor the market inventory so that we'll make sure that we can sell well.
And for that purpose, we are conducting many different promotions in the third quarter. Third quarter is a very important quarter. So some investments are anticipated in the third quarter. So the margin will come down slightly in the third quarter according to our current anticipation.
As I mentioned during the first quarter results presentation, that basically price pass on will be done on many different fronts, and we have been able to do this to some extent. And although the sentiment is not really favorable, if we raise the prices recklessly, that could have a negative impact. So therefore, we would like to keep a margin discipline and the mid-teen level, 15% or so level of margin is something that we would like to achieve. This is something that we aim for, for the full year. That is the current situation. That's all for now.
So some peers are lowering their prices. But is there any movement on the side of price discipline? In large cities, for example, investment in the AI, are there any different colors in different regions?
In short, it's not that the market has a very rigorous price discipline. We are always in the red ocean. But our positioning is not to be involved in price competition, and we continue to sell at reasonable prices, especially during the past several years, that's the discipline that we have been using. Actually, in the second quarter, from 0 to 2 are the main markets. And 2 to 3 to 6, it is not a big difference. So all in all, the situation is tough.
So for us, high single-digit minus for volume, mid- to high single digit. As to price, it's not lowering prices. It is a mix of activities. So in some cases, the economic product sales taking enough margin with the current price level. But in our view, from region to region, there's not much difference. all the regions are in difficulties.
Next, Enomoto-san from BofA Securities.
Here is Enomoto from BofA Securities. Separately from the other results, the acquisition offer for the decorative side Akzo model, there was a merger, the proposal. I understand that, that deal is gone. Am I right?
And also about the background, Akzo model, I think you made the proposal for acquisition many times. So what is so attractive about European Coatings business? So I think you have been involved in the various M&A activities. What is the background for those activities? And also M&A cost, I think, is included and this particular deal is also included?
Enomoto-san, as to M&A, I do not make any comment on M&A. Whether it is done or not, included. There's no comment to make here other than that we have already publicized. As to M&A cost, although we are very serious associated with Akzo. The cost is included, reflected. I push myself to say the comment. The M&A will not be our goal. So it should be at the right value, right asset, low-risk asset.
If there is any opportunity there to buy such an asset, we will pursue such opportunity. That's it. And of course, there's a counterparty. Sometimes the deal will go through, sometimes it won't. So that stance remains unchanged. But sometimes the deal is publicized before the deal is done. So that is associated with the difficulties, but within our expectation.
Next, SMBC Nikko, Shintani-san.
This is Shintani from Nikko Securities SMBC. Now regarding AOC, the sales, I'm looking at Page 25, 12% on the -- plus 12% on an FIC basis. So that's a 2% double-digit increase. So can you talk about the demand situation? 3 months ago, by and large, you said there are no many differences, but there was a slight recovery and also infrastructure was taking a lead. So can you talk about the second quarter performance and towards the second half, what's your projection? Maybe there might not be so many changes. But if you can give some color on that point.
Okay. Regarding AOC, the overall picture is that I think excluding currency basis, double-digit growth in revenues of JPY 800 million or so was already achieved. So that is the resilience of the AOC. So that made a strong contribution to this resilience of AOC. So that's another thing that I would like to comment here once again. And regarding the second quarter, the Middle East, not only the Middle East, but depending on the market, the onetime demand is also there.
So it's good that they have been able to capture those demand, but this double-digit revenue growth, whether that is going to be sustained or not, it's too early for us to determine that at this point of time. So the full year outlook remains to be very subdued or conservative. So please be advised of that. Regarding the segment, the construction market overall remains weak. That remains unchanged. But infrastructure is so good. So that's the difference of the color. And that remains really unchanged from the first quarter.
The AOC strength is that they have a broad range of customer base and they'd be able to offer a value-add service to these different customers. So in that regard, they have a very sustainable revenue stream. And with the pent-up demand, depending on the pent-up demand manifesting very gradually, at least as we have mentioned before, we are seeing signs of bottoming out, and that will continue to be the case going forward.
For the second quarter, I think the local people said that it's too well that my peers said so. So maybe too good is also the manifestation of their underlying performance, but I think the situation is like that. So please be advised.
So if that is the case, then in terms of level, the level is so okay. As for the second half of the year, what is the margin you're expecting? The cost increase is going to kick in from other reasons. But what about the AOC? Can we have the same outlook for AOC as well? And also for Europe, the business systems penetration is something that you've been working on. So can you talk about how the progress of that effort?
Well, first of all, in association with the Middle East situation, the impact from Middle East is the least pronounced in the United States. The logistic expenses, including these and also it's on the inflationary trend in terms of cost. So we cannot be too optimistic. However, towards the second half of the year, we are not expecting a significant impact from that element. Demand, I think, is a bigger impact towards the second half of the year.
As for Europe, to some extent, the Middle East impact may become stronger in Europe compared to the Americas, but I think the bulk is much higher with the Americas in terms of the business composition. So the business system as well, we are making steadfast progress. So in that regard, on a net-net basis, in totality, margin remains to be robust, I believe. However, at the risk of repeating myself, AOC in the case of AOC, the price changes is done dynamically. So it's not a simple margin. We are rather focused on the contribution margin and volume.
So the contribution margin per unit, this is something that we keep an eye on. And if you multiply that with the volume, the total -- what comes in as a total profit. So these are the things like the big -- it will not result in a big erroneous number. But if you just look at that, I think you may misunderstand the underlying performance and capability of AOC.
[indiscernible] Newspaper, Takahashi-san, please.
Here is Takahashi of Nikkei. Can you hear me?
Yes, I can.
I have one question. Page 5, the revision of the forecast. If it is already explained, maybe I would like to have some clarification. So revenue and adjusted operating profit, it's all revised up. As to net profit it is -- because of the temporarily the cost, it is revised down, it is one-off the expense. What is it?
As you can find here, M&A-related cost or the Dulux Europe, the business -- the transformation cost, especially the latter accounts for a big part. On a total basis, JPY 12 billion to JPY 13 billion or so, that is for the business transformation cost. The DuluxGroup Europe, it's mainly France, the business transformation there. That 3 things roughly, headquarters cost containment and the closing of one factory. And distribution stores are reviewed -- are being reviewed.
In France, for many years, the market recovery has been expected, but it seems that the market is not recovering. With that assumption, we need to be more the profitable. And for that, we are making some transformation and the cost is associated with the transformation.
Just for information for this one-off expenses, at the AOP level, this is not included in the adjusted operating profit. So at the operating level, the profitability does not factor in such one-off expenses. So please be advised of that just for the sake of confirmation. I mentioned this.
The next question is from UBS Securities, Omura-san.
This is Omura from UBS Securities. I have a question relating to the overall picture. This earnings results, you achieved a good profit level. And I think the business environment is significantly changing. In 2022, when the Ukraine war started, erupted, I think your situation deteriorated quite significantly. Compared to that time frame, I think the naphtha prices changed this time around quite significantly.
So when the environment changes significantly, you've been able to achieve this good results. What are the factors that allowed you to deliver these very favorable results? Maybe there are some unique elements to you and maybe there might be some changes in the environment. So if you can you give us the big factors that allowed you to deliver good results?
What did you say? What industry do you say, the...
you say what industry the automotive industry, for example, if they change their pace of price increases, is there anything that was noteworthy?
When you say -- is this -- are you talking about B2B business?
'm talking about your -- the industry that you are facing or interfacing.
Interfacing industries. Okay. You're talking about our customers?
Yes, that's correct. Yes.
So all right. Thank you very much for the question. To be honest with you, this is going to be an apple-to-orange comparison. Back in 2022, the business portfolio, the corporate portfolio was different. It was immediately after the COVID-19 outbreak started to finish and also the situation in Japan was better, but the raw material costs started to increase back then already and our price hikes efforts were belated.
So therefore, as far as the elements related to our company in each region, the volatility of raw material was not existent before, but that started to permeate into the entire organization. So we -- nowadays, we are able to take preemptive actions. With the inflation becoming the norm in the current situation, if you are the price leader, especially, you have to work on price hikes in a steadfast fashion. And against these cost increases, we have to be sensitive. We are not really small and we're not really sensitive in the past. But after going through those ups and downs in the past, now as a corporate trade as Nippon Paint, this sensitivity has become more broadly and deeply penetrated across the organization.
Now when we look at the access from the various industry vectors or the industry segments, depending on the customer, the sensitivity is different from customer to customer. So we cannot generalize everything. Like if it's a decorative paint, we cannot say that they are they are strong against the price hikes because if that -- if it's China, that will have a very negative impact.
So we cannot be frequent in price hikes. But there are some other regions where it's easier for us to raise the prices. So this relates to our brand strength, our market position. So we have to make a comprehensive judgment whenever we do the price hikes. And when it comes to the B2B customer, we have a stronger accountability. And also, we have to fulfill our responsibility to supply products because that relates to our relationship of trust. So based on the relationship of trust, it's all about whether we can gain the understanding of customer.
In Japan, for example, back in 2022, inflation was not real at all. But compared to 2022, I think the acceptability of cost increases has become more generous, I think, compared to before. But depending on the customer, to be honest with you, the acceptance is different. The sensitivity is different. So we can never say that the price increases is easily done in this market.
Did I answer your question?
Yes. Specifically, as far as Japan is concerned, automotive industry, are we -- can we say that the price increase is to be done based on a formula? Have you been able to implement the price increases earlier than expected? If you can comment on anything.
Automotive, if I talk about automotive industry, you'll be able to pinpoint the customers, so I won't comment on that.
Okay. Understood. On a related note, the inventory assets for this year has -- this term increased by 26 percentage points compared to the last fiscal year. Have you done anything to secure raw materials?
A significant increase. Most of the revenue is also increasing. So inventory increase is not something that strange or awkward in that regard because revenue is also increasing. As I said, we have to fulfill our responsibility of supply. So we have leveraged our capability and build up our raw material inventory.
So we have a higher level of inventory for the raw materials, and that's reflected in the number. For example, in China, for example, generally speaking, the TUC at the year-end, we build up the inventory generally. And then -- so in terms of working capital, this tends to go up. But we do not think that this is a level that is problematic for us yet.
Next, Okazaki-san from Nomura Securities.
Here is Okazaki of Nomura Securities. So more than 5 years have passed since you became Co-President. So what are you struggling with? What are you -- what kind of issues are you working on Wakatsuki-san? I read your -- the integrated report very interestingly and how to raise the equity valuation.
Of course, we need to make more efforts on our side. But what are the business issues or challenges that you are thinking about? Could you please talk about it? For example, M&A is not going very well or China, well, it depends on the business environment, the mid- to long-term picture, any progress or anything else?
Maybe next time, you can hear me complaining about things over drink. Okazaki-san. Yes, often, what keeps you awake at night? Frequently asked questions by investors. On the operational side, the reason that is supervising it very firmly. So actually, there's no concern for me personally. the cash is being created, and we are -- we have this strength as a group of such the businesses. The capital allocation, especially for M&A, what is the target, what should be the valuation. That is one of the big drops for me.
And as a result, share price. So what keeps you wake up night? So surprise, what way can we operate in a very firm but aggressive way? And how can it be visible for external audience. And that is another big challenge for me. And other than that, for each quarter, so what do we think very good might not be so satisfactory from an analyst point of view.
I wonder why sometimes the first quarter, second quarter, we have very good results. but some people might find it unsatisfactory when it comes to full year result. JPY 162 is now coming down to JPY 157 on FX side. So it's a big fluctuation towards the second half. we do not expect demand to contract. So we think we will be okay. But we do not expect all the regions to go as we have expected. But as a whole, Nippon Paints strength, especially what we have described on Page 2. So my biggest issue is how this picture can be well understood by external people. Please share your issues and concerns with me again.
The next question is from Toyo Keizai. Yamada-san.
Can you hear me?
Yamada-san, hello.
It's been a long time since we last met. Okay. So we have heard this several comments already and also in the past meetings. But in the current -- based on your current plan, it looks as though that the second half will be -- profitability will be declining compared to the first half. Is it because you are having a conservative assumption? Given the situation of the world today, maybe this cannot be helped, I think. But on your real feeling, what is the performance on a neutral basis?
If you can comment on that. well, maybe you may have to readjust the numbers if that is the case. But then if that is the case, then what's your projections for the next fiscal year? Based on your cautious projection, we may have to anticipate a slowdown in the second and next fiscal year. So is there anything that you can comment on at this point of time? That would be appreciated.
Well, I -- there are not so many things that I can comment on at this point of time because this is the only official statement that we can share with you at this point of time. But based on the track record of the past, basically, underpromise and overdeliver is the basic posture of the company. So whatever we announced as a number is a must achieve number for us.
So of course, the business environment remains very tough, but how to overachieve the numbers we stated is the mandate that we have to work on. And if we are able to overachieve this in the current guidance, as a Japanese company, not many companies are delivering this magnitude of number. So I think this is worthy of praise to some extent. Also for the second half of the year, the second half of last year, we have seen -- that was the timing when the raw material cost has come down significantly.
So as a general trend, because this industry has a high raw material cost ratio. So of course, with price pass-throughs and cost control, we are trying to absorb these cost increases. But as a major trend, the 2026 second half versus the 2025 second half are looking at different directions. So how do we overcome this is the question that we have to address. It's not going to be an easy journey. It's not going to be an easy comparison. So please be advised of that.
Understood. And what's your outlook for the next year?
We'll comment on that in February next year. Because macro environment is very uncertain. And to give guidance further down the road might not be so appropriate. That said, on a midterm basis, what we have told about midterm targets, we would like to stay committed both to the top line and the bottom line. We would like to achieve those targets. So this fiscal year, the market conditions are very tough and to achieve those numbers, if the -- because the possibility is that the macro environment gets worse. And of course -- I'm sorry, if that's okay, forget it. Anyway, we will do our best. Thank you.
Question from English channel. [Operator Instructions] No question from the English channel. So we go back to Japanese channel.
JPMorgan Securities, Nakada-san, please.
Here's Nakada of JPMorgan. The one-off expense for the European transformation business, I would like to ask questions. JPY 12 billion to JPY 13 billion is expected, and it will not be included in the adjustment. But the next year on, it will have some impact for cost improvement side. How much did the contribution to profit next year? And why did you make the decision at this time?
Because we have been waiting for the market to recover. But as Nakada-san asked, is it because of the pipeline issues that's why you have to start to transform European business? Up to JPY 13 billion, it is combined with other one-off expenses. So at this moment, it's a very rough estimate. So I cannot talk about the breakdown of that number. I will not make any comment on that. In the first half alone, JPY 6.6 billion was booked and the rest will be booked in the second half. As to timing, -- it has nothing to do with M&A. Another restructuring measures, of course, are about the people. So we need to be prudent. As I have said repeatedly, just to wait for the market to recover, it will not be good enough.
o the Dulux site's Board, myself and [indiscernible] are sitting, decision was made at that Board meeting. It has nothing to do with M&A. Thank you.
JPY 7.3 billion is booked. And the impact for the improvement, the expense will be decreased or the fixed cost decrease that can be seen next year and onwards?
Yes, of course. On a total basis, we are still reviewing it, but at least, and we expect to have some benefits. That's why we are using those expenses.
Next question from Umebayashi-san from Daiwa Securities.
This is Umebayashi from Daiwa Securities. NIPSEA other than China, Indonesia, Turkey and so forth and Malaysia, Singapore and Thailand included, this time around, the performance was quite favorable, it seems, and the top line is showing a very strong growth. Of course, depending on the region, there might be different reasons for this. So compared against China, of course, the market conditions generally are better in these markets. But as a result of this, the initiatives that you can implement, how are they different from the China market? Is it easy for you to implement price increases in these markets maybe? But compared against China, what's the reason that the performance of non-China market of NIPSEA performing well?
Dear participants, it's 5:00 already. Since there are some other questions, I would like to continue with this meeting if there are any unanswered questions. I would like to first address Mr. Umebayashi's question. As he rightly pointed out, the market other than China performed very well. Indonesia, for example, as we mentioned during the last earnings call, the first quarter -- in the first quarter, they performed very well. But compared against the peers, the performance was not so good because the timing of the price hike was different.
In May, we implemented price increases. Therefore, that's the reason why the April was good. So the acceptability of our price increases, to be honest with you, compared to other regions, these markets are better accepting price increases, I believe. So there are because of 2 reasons. One is that the market itself, the acceptance of premium products, I think, for example, in Indonesia is getting better. So that's one thing.
And on the other hand, when it comes to Turkey, volume is not increasing at all. In that environment, the market is going through inflation. So we are making up for the volume decrease or not increases with the cost increases or the price increases. So it's not really reasonable to compare versus China. So I think the characteristics of each market are different, quite different compared to China.
Within ourselves, the non-China NIPSEA market, we are -- I want you to understand -- to understand these markets very well. So what kind -- what is the best way to disclose these markets is something that we are giving thoughts to. Thank you.
Time to o stop Q&A session. Wakatsuki-san, please.
Thank you very much, everyone. Again, we had a very strong second quarter. And as was asked in the question, with agility, we are successfully dealing with the current situation. Our products and coatings and their prices and the pass-through on prices. I would not say easy to do that, but we did make a successful execution and our market continues to be uncertain, and we would like to achieve or go more than the goals and targets. Thank you very much.
And with that, we are going to complete FY 2026 second quarter financial results presentation by Nippon Paint Holdings. Thank you very much for joining us today despite a tighter schedule.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]
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Nippon Paint Holdings Co — Q2 2026 Earnings Call
Nippon Paint Holdings Co — Q2 2026 Earnings Call
Nippon Paint lieferte starke Q2-Zahlen, hob die bereinigte Jahresprognose an, behält aber berichtete Gewinne wegen Einmalaufwendungen unverändert.
📊 Quartal auf einen Blick
- Umsatz: JPY 133,4 Mrd. (+19,4% YoY)
- Bereinigtes OP: JPY 94,9 Mrd. (+30,4% YoY)
- Bereinigte Marge: 17,8% (+1,5 Prozentpunkte)
- Bereinigtes EPS: JPY 29,4 (+31,7% YoY)
- Segmenttreiber: Starkes organisches Wachstum, bessere Produktmix- und FX-Effekte; NIPSEA ex-China und AOC besonders robust.
🎯 Was das Management sagt
- FX-Annahmen: USD/JPY auf JPY155 (Q2) und JPY156,8 (Jahresannahme) angehoben; CNY auf JPY23,1.
- Profitabilität: Fokus auf Preis-Pass-through, Kostenkontrolle und Produktmix zur Margensicherung; Vertriebdisziplin in China statt aggressiver Volumenförderung.
- Strategische M&A: Rückkauf der europäischen Automotive‑Coatings‑Einheit von Wuthelam (~EUR 47 Mio.) zur globalen Integration; Reorganisation Japan (wirksam 1.1.2027).
🔭 Ausblick & Guidance
- Umsatz (FY): Erhöht auf JPY 2,0 Bio. (+12,7% YoY)
- Bereinigtes OP (FY): JPY 316 Mrd., Marge 15,8%; bereinigtes EPS JPY 95,7 (jeweils +10–13% Bereich)
- Berichtet: Operatives Ergebnis unverändert JPY 283 Mrd. – FX‑Vorteil wird durch Einmalaufwände (Dulux Europe Restrukturierung, M&A‑Kosten, ~JPY12–13 Mrd.) ausgeglichen; Dividende unverändert JPY 17.
- Risiken: Rohstoffkosten (Nahost), China‑Nachfrage, FX; Management erwartet H2‑Druck, strebt Guidance aber durch Preispolitik und Kostenmaßnahmen an.
❓ Fragen der Analysten
- Preise vs. Volumen: Analysten fragten nach Preisakzeptanz und Volumentrends; Management betont schnelle Pass‑throughs, aber zeitliche Verzögerungen bei Kosteneffekten und konservative H2‑Annahmen.
- China‑Schwäche: Nachfrage in dekorativem Geschäft (TUC/TUB) bleibt schwach; Nippon hält Vertriebsdisziplin, vermeidet Lageraufbau und plant Promotions/Q3‑Investitionen.
- Einmalkosten & M&A: Fragen zu Dulux‑Restrukturierung (JPY12–13 Mrd., JPY6.6 Mrd. H1 gebucht) und zur M&A‑Strategie; Management sieht Rückkauf als strategisch sinnvoll, erwartet langfristigen Nutzen.
⚡ Bottom Line
- Für Aktionäre: Solide operative Dynamik und angehobene bereinigte Jahresziele signalisieren Ertragskraft; berichtete Ergebnisse bleiben wegen hoher Restrukturierungs‑ und M&A‑Einmalaufwendungen begrenzt. Kurzfristig bestehen Risiken aus Rohstoffpreisen, China‑Nachfrage und FX, mittelfristig sollte Integration (Auto‑Coatings) und Kostdisziplin Wert schaffen.
Nippon Paint Holdings Co — Q1 2026 Earnings Call
1. Management Discussion
Thank you very much for waiting. We will now begin Nippon Paint Holdings FY 2026 Q1 Financial Results Conference Call. Before we begin, a little housekeeping announcement. [Operator Instructions] Please note that this phone conference will be conducted with simultaneous interpretation in English and Japanese.
Now Mr. Wakatsuki, Mr. Tanaka, please begin.
Thank you very much. Hello, everyone. I am Wakatsuki, Co-President of NPHD. Thank you very much for taking the time to join us today despite your busy schedules. I will provide an overview of our FY 2026 Q1 financial results.
First, as always, historical performance is shown on Page 3. This Q1 was also strong with revenue CAGR of 16% and operating profit CAGR of 17.6% even in the long term. Furthermore, the profit contributions from organic and inorganic growth are 10% each, showing that both wheels of our Asset Assembler business are working well.
Next, on Page 4. On a consolidated basis, revenue reached JPY 490.3 billion. Adjusted operating profit was JPY 76.4 billion. Adjusted OP margin was 15.6% and adjusted EPS was JPY 24.2, all of which were record highs for Q1. Revenue growth was over 20%, and adjusted operating profit rose sharply at approximately 38%. Organic and inorganic profit contribution was 21.6% and 16.3%, respectively. Adjusted OP margin was 15.6%, also up by 1.9 percentage points year-on-year.
This market has been highly uncertain, particularly since March due to the escalating tensions surrounding Iran, but amidst this rapidly changing environment, all partner companies responded extremely quickly and autonomously, prioritizing their responsibility to supply to customers. I believe we were able to demonstrate our presence as reliable partners, especially during such uncertain times.
Raw material cost increases linked to tensions surrounding Iran are affecting regions and businesses differently and is expected to gradually become apparent from Q2 through the second half of the year. Margin is expected to fluctuate slightly from quarter-to-quarter as well. However, the overall full year impact is expected to be largely offset by cost reduction measures and price pass-through implemented as countermeasures. The FX has also shifted to a weaker yen than forecasted in February. And even considering the uncertain demand environment, we believe that our full year guidance is well achievable. We hope to provide an updated outlook in Q2.
As with our past crisis responses, we believe that challenging market conditions present an opportunity to leverage our group strength such as our group's procurement capabilities and the agile management decisions made by local management to further enhance our competitive advantage in each region.
Next, Page 5. As you can see from the heat map, the market is generally flat or slightly weaker than FY 2025. Within this environment, we aim to maintain and improve our market share while steadily pursuing profitable growth. Please note that the market outlook for Q2 and beyond is based on current conditions and may change depending on future developments in the Middle East.
Next, Page 6 provides a summary of operating results in major segments. While I will leave the details to the Q&A session, let me briefly comment on each region.
In Japan, in the Decorative segment, sales increased for high durability architectural and structural products. And in the Industrial segment, price pass-through continued to progress. Furthermore, from March onward, there was a certain level of front-loaded demand aimed at securing supply. Overall, improved RMCC ratio and continued SG&A cost control drove higher revenue and profit with the adjusted operating profit margin rising to 12.3%. From the second quarter onward, we will continue to fulfill our responsibility to ensure stable supply to customers while securing appropriate profitability.
NIPSEA China, revenue and profit continued to increase and the adjusted OP margin improved significantly to 17.6%, up 2 points from the same period last year. TUC, despite a weak market and consumer sentiment, sales volumes increased in both paint and non-paint businesses and non-paint business and textured paint offset the decline in conventional paint, resulting in a nearly flat revenue year-on-year on a local currency basis. For TUB, revenue declined 5% on a local currency basis due to ongoing impact of the property market, but the decline moderated compared to the prior year. In addition, automotive coatings grew significantly, particularly for Chinese manufacturers.
We believe it is important that even in a challenging market, we are not pursuing volume at any cost, but are expanding our strong areas and improving profitability. We will continue to assume no early recovery in the Chinese market, but we believe that profitable growth can be maintained through expansion of share, mix improvement in non-paint businesses.
NIPSEA, except China, despite the challenging environment, strong growth in both volume and price mix across each region, together with ongoing streamlining efforts led to a significant increase in both revenue and profit.
DuluxGroup DGL Pacific, with market conditions remaining largely flat, continued mix benefit and contributions from small-scale acquisitions together with foreign exchange effects led to a significant increase in both revenue and profit, demonstrating steady and consistent growth.
Meanwhile, Europe also achieved substantial growth. However, while market conditions in France recovered to around the price year level, profitability is still recovering and performance varied across regions with South and Central Europe remaining strong.
In the Americas, revenue was higher despite the impact of market conditions for both decorative automotive business. Profit increased year-on-year.
And finally, for AOC, contribution expanded from 1 month in the prior year period to a full quarter contribution this year and both revenue and profit increased. Margins remain high, delivering strong profit contribution and cash generation. As a reference, revenue declined 2% year-on-year, but the shift to volume growth is an encouraging sign.
Page 7. As for major topics, in March, we celebrated the 145th anniversary of founding. I do not intend to boast, but I believe that there were a few listed Japanese companies with such a long history that are demonstrating this level of growth today. We have taken this opportunity to establish a new showroom in Shinagawa, and we would like to see you and visit at your convenience.
In addition, we have received the Excellence Award at the Nikkei Integrated Report Awards this year. Although it did not reach last year's grand prize, we will continue together with our ongoing IR activities to engage proactively with investors, and we appreciate your continued support.
This concludes my presentation. Thank you.
[Operator Instructions] First, from the Japanese channel. First question is from Goldman Sachs Securities. Ikeda-san, please.
2. Question Answer
Ikeda from Goldman Sachs Securities. Congratulations for great results. Q1 profit margin and top line and profit margin in all lines, you had an extraordinary profit and results. In March, due to the aggravating Iran results, the raw material cost increased, and there were some front-loading factor. From Q2 onward, the raw material cost impact by region and by application, if you could give us some color, I'd appreciate it.
In your company, China business is large and your procurement capability is very high. So using the China site, will you do a group-wide procurement? AOC, the U.S. raw material cost is not rising much. So I think there are regional differences. So that is my question. And also the price increase, what is the sensitivity?
And the solvent, I hear is slightly short in Japan and Asia. So what impact is expected? So sorry for a lot of questions. So after the Iran, my main question is the raw material impact.
Thank you very much, Ikeda-san for the question. So I understand that your question becomes long because, as you rightly said, the situation differ from region to region. So it's not that one single answer can cover all situations. So I will do my best to answer your questions.
First, the impact on raw material. Japan and Asia have high dependence on Middle East. And therefore, the impact is bigger in these regions. On the other hand, Australia or Europe are impacted the next. And for now, the U.S. does not have the direct impact so far. But overall, the solvent is one issue, but the packaging, package and container, TiO2, there is impact on TiO2. So we need to watch closely on things trend and operate our business in each region accordingly. So that is one aspect.
Under such circumstances, for March, we had the accumulation from the past. So our priority was to fulfill the supply responsibility. So we leveraged our supply -- strong supply capability and tried to meet customers' front-loaded demand so that we do not miss any opportunity.
In Asia, in particular, the profitability was higher than we anticipated. In other words, from Q2 onwards, as I said earlier, Q2 and Q3 onward, second half, various impacts will emerge gradually, and we have to be prepared for that. So of course, the alternative procurement and packaging, we need to utilize available packaging and do our best to win the customers' understanding and increase the prices. So things are different among regions, but we will try to look into the future and take proactive measures. So we'll do our best in all the regions we operate.
So in Q1, Q1 was strong, but we are not content with that. Rather, we are prepared for difficult times from here onward. As I said earlier, there may be a slight time lag, but we think we can achieve the profitability on a full year basis sufficiently.
Our procurement capability is not just on China, but including China, the group-wide interchange can be leveraged. And the transportation cost, incurred surcharge. And in March, it was difficult. It may happen more in April and onward. First, we will prioritize on fulfilling our supply capability, supply responsibility to our customers. And on that basis, we want to demonstrate ourselves as a trusted partner, reliable partner.
And to repeat myself, this crisis comes with risks, but is the opportunity in each site, customers are not fully satisfied. So we don't want to use the word opportunity too much, but this is the time when we can really show our presence. We think it is an opportunity. So that is the policy we have. In the end, we want to hit the right balance between the supply and the profitability. I hope this answers your question.
So if the Strait of Hormuz situation continues and the oil price stays at a high level of $100, you can raise prices. And on a full year basis, you can offset these shortages, shortfalls? You are raising price by 70% and also that some manufacturers are raising prices in China. So on the price raise, if you could share with us anything?
Yes. To repeat myself, the price raise is not welcomed by the customers. So we are doing the best we can, make the best effort in our company, but the raw material cost rise is high. So we have no other choice but to raise prices in that case.
In reality, in the first half results, we are the last one to announce our results. And I looked at our peer -- global peers' situation, they're all taking similar measures. So in the end, I do not think we will see a big problem. But just one point. Of course, if we enter an inflationary environment, the demand environment will not turn for the better, most likely.
So demand decline is possible. It depends on how long the situation surrounding Iran will linger. And no one can foresee that around the world. So we may be impacted to a certain extent, but through streamlining and through price raise, we will try to address the situation. So the same message. I think the situation is similar around the world with slight differences from region to region, depending on their economic status. Thank you.
Next, Nomura Securities, Okazaki-san, please.
This is Okazaki from Nomura Securities. So on a related note, I would like to ask a similar question. So what you said, so in terms of procurement, relatively speaking, U.S., China, relatively easier to procure. And on a global basis, you are supplying within the groups. That is one of the strengths. Am I right? I would like to confirm that point.
And also about the price pass on, I think there will be some differences depending on the region. In the past, well, for example, there were easier regions to pass on price, for example, Indonesia, Australia and AOC. Relatively, I think it is easier to pass on price. That is my understanding. I would like to confirm whether my understanding is correct.
And for the full year, profitability, JPY 283 billion is achievable that you mentioned. And Q1, 1/4 we completed and maybe there are some seasonalities. So the basic thinking is that Q2, Q3, there will be some cost increase and from -- starting from the end of Q3, Q4, you will be able to pass on prices. And for the full year, that will lead to the full year results. Of course, there are differences by regions, but is my assumption, my thinking correct? I would like to confirm that. That is my question.
Thank you for your question. So about our procurement capability to procure from the U.S. and whether it's applying that globally, that is not always the case. From the closer proximity nations procurement, that is the principle. And our group companies, we do have to start with a very strong coordination, cooperative relationship. So where we should procure from partners and Mr. Wee Siew Kim, we talk together so that there is not a loss of opportunities and also so that we can fulfill our responsibility to supply to our customers.
So our sense, our feeling is that, to be quite frank, compared to a month ago -- from now compared to a month ago, the supply -- the shortage, the lacking of supply, I think that we've been able to somewhat with our procurement capability, been able to address that situation. But having said that, does it -- it means there are some cost of elements. For example, as I said, packaging containers, also the logistics transportation fees are going up. So in every element, there is a cost pressure that we are facing. So as you said, you said correctly, second quarter or towards the second half compared to the first quarter, it will be much tougher. And how rapidly we could respond and address that taking actions is the key, alternative supply also streamlining and rationalization, advancement of those efforts. That is going to be the key.
And the question, I think that is will be the deciding factor, which we are determined to resolve, and we believe we have the agility to take the action in the region appropriately. We believe we can operate in that way.
And 1/4 of the year, well, that mentioned -- as I've been saying, because there are seasonality, Q2, Q3 does account for a large portion. And taking into other elements, there are some differences between the quarters naturally, obviously. Also, additionally, the FX, there are some fluctuation caused by the foreign effect. So taking that into account, at the end, for the full year, we do believe that our outlook is -- needs to be achieved. And given the current situation, our view forecast that it is achievable. And if any update is required, when we announce the second quarter in August, it could go up or down. So at this point, we believe that as a minimum, this February guidance is achievable at this point. And there are some possibilities of upside, and that is what we believe in doing in our daily operation.
And the third point, what was it again?
Cost pass on, cost transfer, price pass on, whether -- which areas are relatively easier to pass on price.
Well, to be frank, well, we don't want to -- I don't want to give a single answer and give a blended answer because the business environment also is related. In China, as I said earlier, it's not necessary that the market condition is strong. Market is not strong. So I can't just easily say that because of the cost is higher and even if we can procure and also the logistics cost, transportation cost increase, cost is increasing. But given that the market is weak, it is not in an environment that we can raise the price.
Also, in Americas, although the overall impact is moderate, gas price, logistics price is going up. And against such backdrop, how can we have our customers understand their value. That is also one of part of the strength of AOC. So when it comes to this point. And I do ask the analysts to understand that never -- nothing is ever easy. At the front line, we are doing our best and also for the delivery, as always, it has been, and we are striving to do our best. And we hope to be helpful and useful. But at the end, it does differ. The results or -- it will differ and the color is different by region.
Yes, I understand that the company is striving to make an effort. But in the past, AOC, I think it was relatively because of its stronger competitiveness, I think you explained that it was easier to pass on price. So that kind of a trend in nature hasn't changed, I believe. But -- so that was what I wanted to confirm.
So right, as I said earlier, America, America is less hit directly. So the impact is moderate. And given that circumstances still, the cost is increasing. So how we understand that, how we respond to that will depend on how strong a position that we have. So that is -- AOC is also striving to do their best.
Next question is BofA Securities, Enomoto-san, please.
Rush order, how are you addressing rush order? And how were they incorporated into your January-March quarter results? In your Q&A, you said you addressed the front-loaded demand as much as possible. So how much -- how big an impact was that? And by region, what are the differences? According to your competitors, they said they have too much rush order and they could not deal with normal orders. So how did you handle this?
What order did you say?
Rush order.
Rush order, I see. So last-minute order, so because there's procurement worries, companies want to make orders to hoard or stock up, right? I've never used this word, rush order.
We are trying to deliver to the areas that were really in need. We do not have abundant stock. So when we think of the distribution, we try to ascertain where we are needed the most. Thinner, this is in Japan, but -- it's like the toilet paper problem in the past. People tend to have sentiment of hoarding. So we raised the price beforehand in a proactive manner. So our policy is to distribute to where we are in need the most.
And in the end, for our conventional customers, we think we have been able to deliver overall. I don't know if all customers are 100% happy, but I think we were able to manage. So I think that is happening to a certain extent in each region. But overall, using our past relationship, we were able to manage the unreasonable orders well. But that said, some clients may place orders, small-scale orders anticipating the future price raise. In our JPY 400 billion, JPY 500 billion revenue, maybe hundreds of millions of level. There were -- these events happened, I think, to the tune of JPY 100 million or so. But it was not so big that we needed to disclose as a material event.
In Q2, you do not anticipate this kind of situation?
As I said earlier, we can secure our material. Although we cannot be too optimistic, we are securing our material. Compared to a month ago, we have good visibility. So I don't know if all customers are 100% happy. I cannot guarantee you that. But for our customers, we are delivering to all of them.
So rush order. If Middle East situation crisis aggravates, then we don't know what will happen. But in the current circumstances, we are managing the situation somehow. But to avoid misunderstanding, I want to clarify that cost is rising. That's for sure. We are fulfilling the supply responsibility, but cost is rising. So how can we absorb this cost increase and how we can ask the customer to also shoulder a portion of that. In April, May, June, this is the big mission for us regardless of any region. So in all regions, this is our challenge.
Next, SMBC Nikko, Shintani-san, please.
This is Shintani from SMBC Nikko Securities. I would like to ask a question about AOC. So you explained that the volume has turned to a positive. And I would like to know about the Q1 demand situation and also the future outlook. Competitors in Americas, there has been some increase from import to Asia. And also, in terms of volumes, also profitability has improved for competitors. I would like to confirm if it is the same for you as well. And also in the material presentation, there was a mention at the beginning of the pressure on the materials. So could you comment on that, please.
Right. For AOC, there are -- it is very dynamic in terms of the market. Also, the price is also fast moving and a very dynamic situation. So in that sense, on a daily basis, I would say that for procurement price and also the selling price, there is the contribution margin, how we manage that on a daily basis, we are controlling in our business system and monitoring the situation every day.
And against such backdrop, as I will repeat in saying, last year, from the second half, about from the second half, we started to see the signs of bottoming out. And once again, I would like to say once again that we are seeing the bottoming out in Q1. And there is a pent-up demand is likely to happen. That is our view.
And still, having said that, what -- how to say, we do not want to be too optimistic or to give a too optimistic outlook because there's still a lot of uncertainties. For example, recently, the inflation rate in the U.S. is going up and also the FRB chair also has changed. And also, there was a comment about the inflation -- fighting the inflation. So the rates also is not going to be cut continuously, given that the U.S. economy, the economic situation and also secondary housing, the movements, if we look, still the movements are slow and not robust. Given such a situation, we do need to take actions appropriately.
On the other hand, the cost is even small, but it is rising. As I said at the outset, the U.S., Americas in terms of the impact level compared to Asia is moderate, small, but still cost is rising. And to our customers, as we fulfill our responsibility to supply, that is the most important because it is all related to infrastructure. So we need to deliver. That is the priority and also have our customers understand the situation. And if necessary, depending on the situation, raise the price. That is likely.
And second quarter and beyond for the demand, if we look at the market, we are expecting a flat market. Our view is that against such market situation -- and in a fragile market, as we have the top market share, AOC is being the fast mover. And as a result, there are opportunities to increase the market share. And we do hope to see the positive impact -- positive effects from that. That is my response to your question.
Well, for example, by application, is there any differences in color for the demand, for example, in the past, infrastructure could be the first recovery, but construction, decorative, could it be weaker?
Right. There is no change to that. And [ leisure ], leisure-related, we are seeing some recovery that is marine boat. And -- but overall, as you said, your understanding is correct.
Next, Mizuho Securities, Otani-san, please.
Otani from Mizuho Securities. Can you hear me?
Hello, Otani-san.
I have a question on the Middle East situation. The impact from the Middle East, naphtha-derived raw material is now a hot topic. In your presentation, you said the titanium oxide is also impacted. So what about this TiO2? If you could elaborate on that point. So the sulfur does not come from Middle East and so the oxide titanium cannot be produced. I think the impact is large in China. So if you could give us some more color by region.
Thank you. The situation changes day by day, but as you rightly said, the titanium oxide in China, the supply is changing and is rising little by little. And eventually, in the U.S. decorative business, this will not be in the short term, and we have a price lock in. But further down the road, the volume and price, we need to look for alternative sources for supply and price will most likely rise. There is a possibility that price will rise. So the situation does not warrant optimism. So it boils down to our streamlining efforts and the price flow-through, price pass-through efforts. I hope this answers your question.
I understand well. So this is not talked much in -- but anything that you have concerns about, anything you're worried about?
Worrisome, risky ones, not really, but logistics cost or packaging cost. These are our variable costs. They are rising overall. But in the end, if I name them as risk factor, it's the matter of demand.
In this economic situation, I always talk about the consumer goods that we -- our business has the consumer goods side. And when the interest rate rises or the economy slows down or in China, we see the signs of hitting bottom, but the economy is not so bright and secondary is not so good. So if this situation lingers, we think we can win in the share -- market share game, but the market demand will be impacted. So that is one big concern.
But to repeat myself, in this situation with risk, I would not say a crisis, but a situation that has risk, difficult situation. We pride ourselves of overcoming these situations in the past and have built our corporate structure going through these adversities. So I don't want to just easily say use this challenge as an opportunity, but I think it is an opportunity. And our peers are also expressing it the same way.
But this product of paint is a resilient product. So this is the sentiment that the industry -- management has, but the front line are working very hard every day to deal with our customers and to fulfill the supply responsibility. The front line is keeping themselves extremely busy to fulfill the responsibility. So I always mention that and it's something that you -- I would like you to understand.
Next, Daiwa Securities, Umebayashi-san, please.
This is Umebayashi from Daiwa Securities. So about the AOC, maybe I misheard it. I thought you said that January, March quarter for the revenue compared to before the acquisition, the volume increased, but the revenue decreased by 2%. Volume increased. So is that the unit price just simply dropped. So for the reason for that, simply put, although it's sold, you were selling, but is it about the mix?
And -- or is it about the raw material, transportation and logistics and also the FX, if it is shifting to a cost increase, maybe nominally that the revenue is declining. So if against the cost increase, AOC, I understand that there is a flexibility in terms of formulation. So maybe it could be addressed by how you operate at the front lines with using more less expensive materials. But if there's any way?
Also I'm not sure if you can talk or disclose. If we look at the profit compared to the previous year, are you maintaining profitability? Or are you facing deterioration? Are there any comments that you can make?
Thank you for the question. The situation of AOC, January, February and also March, there is some differences. There's a dynamic change, raw materials and also pricing, the situation is very fluid and volume, price, if we look at that relationship, the cost when it is decreasing, we also lower the price. So it's not just about revenue only. It is between -- well, our thought is the volume and the contribution margin. We do need to look at -- we focus on the contribution margin. The selling price and the raw material, the price difference, whether we have the price difference multiplied by the volume, so it's not just the dollar amount of the revenue, whether it has increased or decreased because it could be misleading and although it will imply the trend. So that is my first point.
And having said that, as you asked, there is somewhat related to the product mix. And also the competitive environment also is somewhat related. Although we have the top market share, still, we are subject to the competition. Some are good positive and some -- and depending on the term, the quarter, there are some differences. And it is not that the price is declining in a linear manner, but sometimes in a quarter, we may lose an account, a customer. And because of that, it could result in the fluctuations in the revenue, and the opposite is likely as well.
So all of that, it is not that overall, as a trend, we are losing share or we do believe that we will be able to gain. I will not refrain from commenting on the profitability, but I would say that we are maintaining a high profitability and generating cash. So there is no difference from what we had expected before the acquisition. That is my response to your question.
So I understand that although you need to make an effort, it's not that you're facing a situation that the price is falling and you do not have such concerns.
You are correct. Your understanding is correct.
Next is CLSA Securities, Cho-san, please.
Cho from CLSA Securities. First, my question is, in the past, in 2021 and '22, Ukraine war and China electricity restriction. In 2022, the oil price was temporarily up to $120. So my question is, 2022 and -- compared to '22, '23, the raw material cost increase -- compared to last time, what is different from last time? And back then, raw material procurement or the pricing pass-through, how long did it take for pricing pass-through? In 2022, we had the Ukraine war. So if you could compare that with the Middle East situation, how do these 2 impacts compare?
Cho-san, I think it's an apple-to-orange comparison. So it's not really appropriate to compare these 2 events, but there is a regional difference again. So for example, in Japan, in 2021 and '22, the raw material cost surged and the price increase agility, the speed of price increase was due to the long-lasting deflation, it was difficult. Price increase was difficult. And that was the case in general. But for good or for bad, now price increase of various goods is something we have no other choice but to do with a stronger understanding. The understanding is spreading. So compared to back then, the environment has changed and the time required for pricing pass-through may be shorter. So that's one point I can make.
But in overseas markets, the availability issue. Well, last time, price went up, but the Asia solvent type products were not delivered last time. And we have not experienced that. So we are using our procurement capability to deliver to our customers without fail. And maybe this is something our peers cannot do. So in that case, our reliability, our credibility is rising. It may rise more than we saw last time around. So this can be a differentiating factor. And as a result, it may be a difference when we try to raise prices this time.
In China, for example, it's not so much the availability problem. It's a cost problem. And if it's a cost problem, local players are in the same situation. We will all raise prices, but the demand is not so strong. So how we navigate is different dynamics. So there is no one single answer to this. But in the end, we can sufficiently make ends meet, as I mentioned at the outset.
And if I could ask you a second question about China. As mentioned earlier, in Q1, sales has not recovered much, but profitability is rising now. And is it because the real estate market is recovering or because our peers, the SMEs are now shaken out and the industry discipline is improving? Or this demand recovery in China, real estate market is recovering or maybe the industry consolidation is progressing, if you could give us some update.
As I said, China market is not recovering yet. And we are not operating on the -- based on the assumption that it is recovering, we are still cautious. Now you mentioned discipline. As I've mentioned many times over, we are the price leader. So we are profitability oriented. And therefore, we are enjoying the optimal margin and our competitors are probably a beneficiary of this. But that is not to say that the competition is easy. It is severe. We see severe competition in various forms locally. Our high value-added products are our focus. We're trying to sell high value-added products. One is textured paint. There were bigger gaps with local peers, but now in the Q1, this gap is narrowing. But the product makeup or composition is different. So it's not an easy comparison.
So to repeat myself, we were able to secure the optimal level of margin. But from Q2 onward, the raw material and logistics cost increase will emerge more. And so we cannot take this Q1 result for granted, and we need to be careful. I hope this answers your question.
Next, UBS Securities, Omura-san, please.
This is Omura, UBS Securities. My question is related to the Japan business. Naphtha price increase, I believe that you're also facing an impact from this. And to be specific, April in Q2, as we start the Q2, your receiving price for the raw material, how much raw material price increase are you facing? I think usually, there's about a 3-month delay gap in the price increase.
Now the upstream company, when I had a conversation, they say that almost immediately, the price hike is happening. So the receiving price for your raw material prices, naphtha for the domestic 120,000, is that the price, if it's possible for you to respond? Please comment.
Omura-san, well, I will refrain from giving the details. But what I can say is, as you mentioned, the current situation compared to the normal times differs from ordinary price negotiation. There are different dynamics. At the same time, we do need to fulfill our responsibility to supply to our customers. And there is not much of a time gap, and we are raising prices and price hike is happening.
At the same time, for price hike also from early stage being prepared, and also the price hike has been put in place. So at the end, I think that everything, the ends will meet. That is the background and the comment that I can provide.
Next, JPMorgan Securities, Nakada-san, please.
Nakada from JPMorgan Securities. So continuing on from Omura-san's question, so making it meet. So what is beyond that? Nuance. And if that's the case, then the price will decline again if raw material cost declines, that is one structure. But in your case, your paint, there must be differences among regions. But to -- if you are raising price to secure supply, it does not mean price will decline when cost declines. So what is the reason for the price increase? And what steps will you take when cost declines?
Well, I hope that will be the case. But I don't know that far into the future. But if I may say something, B2C and B2B are different. In B2C, we do not need to lower prices right away. But on the other hand, the competitive landscape needs to be taken into account. Peers are in the same environment. So we have to think of our strategy. So we're not asking this as a surcharge. We are sincerely asking customers to understand the situation. And if the situation settles, customers' understanding may decline.
But B2B is more about the negotiation. And for the request for price increase, it is not easy compared to B2C, but the level of understanding need to be considered on a more bilateral basis. So if the situation changes, we may need to lower more quickly. So we have more B2C business. So it's not like ending a surcharge. That will not be the case. But of course, in the long-term trend, it will end at one point. So when cost increases, prices increase and when cost decreases, price will decrease with some time lag.
As of this time, now we would like to close the Q&A session. Wakatsuki-san, please.
Thank you very much once again, amid your busy schedule attending and participating. And there's a lot of uncertainties. And as uncertainties remain, our position is that we will do our best at the front line to service our customers and fulfill our responsibility to supply while balancing our profitability. I think this is a common issue and globally and the stronger organization will become stronger. That is likely to happen if we look at the history in the past, we know from history. And once again, I would like to highlight -- stress that point. And we would like to ask for your cooperation, and we will provide you with updates as anything changes in the second quarter. Thank you.
So with this, we would like to conclude 2026 Q1 the results presentation conference for Nippon Paint Holdings. Thank you very much for participating amid your busy schedule. Now we would like to end the conference.
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Nippon Paint Holdings Co — Q1 2026 Earnings Call
Nippon Paint Holdings Co — Q1 2026 Earnings Call
Starkes Q1 mit Rekordmargen, aber steigende Rohstoffkosten durch den Nahost-Konflikt drücken auf die Quartalsprognose; Management hält FY-Guidance für erreichbar.
📊 Quartal auf einen Blick
- Umsatz: JPY 490,3 Mrd. (Q1, +>20% YoY)
- Adj. EBIT: JPY 76,4 Mrd. (+~38% YoY)
- Adj. EBIT-Marge: 15,6% (+1,9 Prozentpunkte YoY)
- Adj. EPS: JPY 24,2 (Rekord für Q1)
- Profit-Beitrag: Organisch 21,6% / Inorganisch 16,3% (Q1)
🎯 Was das Management sagt
- Lieferverantwortung: Priorität auf stabile Versorgung der Kunden; schnelle, lokale Entscheidungen der Gruppenfirmen sollen Versorgung sicherstellen.
- Kostenausgleich: Erwartete Rohstoff- und Logistikkosten werden teilweise durch Preisweitergabe und Kostreduktionen kompensiert; Procurement-Netzwerk (inkl. China) soll Engpässe dämpfen.
- Profitabilitätsfokus: Kein Volumenspiel um jeden Preis; Fokus auf Margensteigerung durch Mix (non-paint, Textured Paint) und Marktausbau, AOC liefert hohe Margen und Cash.
🔭 Ausblick & Guidance
- Zeithorizont: Rohstoffeffekte erwarten sie vor allem ab Q2 bis H2; Margen können quartalsweise schwanken.
- Guidance: Management hält die im Februar kommunizierte Jahresprognose (Analystenreferenz: JPY 283 Mrd. wurde in Frage gestellt) für erreichbar; Update für Q2 avisiert.
- Risiken: Eskalation im Nahen Osten, weitere TiO2-/Lösungsmittel-Engpässe, steigende Verpackungs- und Logistikkosten sowie nachlassende Nachfrage in China/Global.
❓ Fragen der Analysten
- Rohstoff & Preisweitergabe: Hauptthema; Management nannte regionale Unterschiede (Japan/Asien stärker betroffen, USA moderat) und betonte Preis-Pass-Through plus Alternativbeschaffung, ohne konkrete Sensitivitäten zu nennen.
- Rush-/Vorlaufbestellungen: Gab Frontloading im März; Firma priorisierte Kunden mit akutem Bedarf, Einfluss auf Q1 war klein (ca. Hundert Mio. JPY, kein materialer Effekt).
- AOC & China: Fragen zu Volumen vs. Umsatz bei AOC beantwortet: Volumen erholt sich, Umsatz leicht rückläufig durch Mix; AOC-Margen bleiben hoch. China: Nachfrage noch nicht robust, Gewinnverbesserung durch Mix und Preisführerschaft.
⚡ Bottom Line
- Kurzmeinung: Q1 bestätigt operative Stärke und Margenresilienz; mittelfristig bleiben Rohstoffpreise, regionale Verfügbarkeiten und Nachfrageentwicklung (China, Nahost-Risiko) die wichtigsten Treiber für Kursrisiken; Management signalisiert Vertrauen in Guidancen, aber ein Q2-Update ist entscheidend.
Nippon Paint Holdings Co — Q4 2025 Earnings Call
1. Management Discussion
It is now time to commence the Nippon Paint Holdings Co., Ltd. FY 2025 Q4 Financial Results briefing and medium-term strategy update briefing.
Thank you very much for joining us today despite your busy schedules. This briefing will be held online only. Now let me introduce today's attendee. Director, Representative, Executive Officer and Co-President, Yuichiro Wakatsuki. Today's agenda will proceed with an explanation from Wakatsuki, followed by a Q&A session.
Please note that simultaneous interpretation in Japanese and English is provided for this briefing. President Wakatsuki, the floor is yours.
Thank you. Hello, everyone. I am Wakatsuki, Co-President of NPHD. Thank you very much for taking the time to join us today despite your busy schedules. I will provide an overview of our FY 2025 Q4 and full year financial results as well as an update on our medium-term strategy. We typically announce our medium-term strategy in April. Last year, there were changes such as the consolidation of AOC. This year, we covered a wide range of topics, including AOC, China, NIPSEA and M&A at our IR Day in November.
Our basic policy remains unchanged. So I would like to briefly discuss the additional updates. And after that, I would like to take questions on each topic. Members of the media are also participating today. First, on Page 2, please note that we have made some changes to our disclosure since Q3 of last year.
While these changes have been generally well received by investors, we will continue to listen to your constructive feedback and make further improvements as necessary.
We have also changed the way we display exchange rates, showing the rates for each quarter instead of cumulative totals. The yen generally weakened year-on-year in Q4, but strengthened slightly for the full year. The assumed yen exchange rate for 2026 is slightly stronger than the actual rate, that JPY 150 to $1, but is expected to be roughly flat year-on-year.
Next, Pages 3 and 4 are included from Q3. But first, Page 3 shows the long-term performance trend for Q4. This Q4 was also very strong. And I think you can see at a glance our extremely high growth track record and growth of organically and inorganically.
The long-term trends for the full fiscal year are included on Page 4. As I mentioned in the last term, organic profits turned negative temporarily due to COVID-19 in 2020 and rising raw material prices in 2021, but have recovered significantly since 2022, demonstrating the strong resilience of our organic profitability.
Next, let me give you an overview of Q4 on Page 5. Both revenue and operating profit were record high with increases in revenue by 14% in real terms, adjusted operating profit by 54% and adjusted EPS by a significant 75%.
Operating profit contribution was organic, plus 24% and inorganic plus 30% with margins improving by 4.7 percentage points. By region, AOC remained a high profit contributor. And with the interest rate cuts in the U.S., the market is showing signs of bottoming out.
In China, the economic outlook remains tough and we continue to achieve profit growth by focusing on margins. In regions other than NIPSEA China, both volume and prices have improved overall.
Page 6 shows FY 2025 results. Revenue increased 11%. Adjusted operating profit increased by 38% and the adjusted OP margin improved by 3.3 percentage points year-on-year to 15.5%. Adjusted EPS also increased 43.3% and EPS of JPY 76.7 on the accounting basis significantly exceeded our April guidance along with operating profit and net profit.
Page 7, please. Regarding our FY 2026 guidance, although the economic environment will remain relatively challenging, we expect both revenue and operating profit to reach new record highs. We expect growth in revenue by approximately 8%, adjusted operating profit and net profit by approximately 10% and a modest uptick in adjusted OP margin.
EPS on the accounting basis is expected to increase by 11.4% to JPY 85.3 with share buybacks contributing slightly above 1%. Regionally, AOC is expecting a return to low single-digit revenue growth, and TUC in China is also expecting profitable high single-digit growth, as I mentioned in the recent IR Day.
In addition, we expect continued strong revenue and profit growth in NIPSEA outside of China. As we announced at the time of AOC acquisition in October 2024, we adopt a progressive dividend policy, so we will prioritize deleveraging in preparation for future additional M&A and expect to increase dividend by JPY 1 backed by our strong performance.
Next, Page 8 and 9. These 2 pages show the assumptions for the guidance for each segment. Simply put, revenue growth will continue to be driven by China and NIPSEA, while profitable growth is expected in each region based on our competitive advantages.
Page 10, please. As you can see from the heat map, Against the tough market conditions overall, we are firmly aiming for profitable growth.
Page 11 is a summary of operating results in major segments. I will leave the details to the Q&A session, but we'll briefly comment on each region. In the Japan segment, tough market conditions and volume were offset by a favorable price mix resulting in a slight increase in revenue and profits increased by approximately 18%, not including gain on the sale of fixed assets, thanks to improved RMCC and SG&A control and margin also improved to 13.1%.
NIPSEA China achieved a 30% increase in profits in Q4 despite tough market conditions in all areas, except for the automotive industry. Through strong cost control, we achieved a margin improvement of nearly 5 percentage points even though it was a period of declining demand.
While market conditions are expected to remain tough in 2026, as I mentioned at the beginning, we aim to return to growth trajectory based on our competitive strength. NIPSEA, excluding China, continued to see an overall trend of increased revenue and profits with results that more than offset the negative impact of exchange rates.
DGL Pacific achieved double-digit increases in both revenue and profits despite a nearly flat market, thanks to continued volume growth, mix benefits, small scale acquisitions and exchange rates, demonstrating continued stable growth. Meanwhile, in Europe, market conditions remained tough in France, Southern Europe was strong and ETICS markets in JUB was weak, resulting in mixed results, but profits increased, thanks to the FX impact.
In light of the worsening market conditions in Europe, Cromology Group recorded a goodwill impairment loss of JPY 5.5 billion as a result of an impairment test.
In the Americas, the number of automobiles produced across the region decreased. Long-term interest rates have not yet fallen and housing demand generally decreased, resulting in a decrease in revenue and profits for the Americas.
AOC continues to maintain very high margins and is making significant contribution to profits. For reference, revenue was down 2% year-on-year and signs of bottoming out are becoming apparent.
PPA has been completed. And on unadjusted basis, amortization of intangible assets and inventory step-up expenses, totaling JPY 5.1 billion were recorded. However, depreciation of tangible fixed assets of JPY 2.1 billion was recorded after adjustments. And excluding this, the adjusted OP margin remains at approximately 35%.
And next, Page 12, please. There are 3 major topics. First, we held IR Day in November of last year, as already announced. Secondly, we continue receiving very high ratings from the IR and sustainability evaluation organizations. Let me once again express our gratitude to all those involved who have provided us with various constructive feedback.
The third point is on Page 13, which we announced yesterday. The share buyback is progressing steadily. While it is certainly unfortunate that our stock price remains low, we view this as a positive opportunity to purchase our shares at a very favorable price. If all goes well, the buyback will mostly be completed by the end of February, which will boost EPS by about 1.2% year-on-year.
This concludes the financial results presentation, and I would like to move on to an update on our medium-term strategy. First, Page 3, executive summary. There are no fundamental changes from the policy announced in April 2024 and updated last April. Going forward, I'd like to share only the main points.
First, we remain steadfast in our asset assembler strategy as the end of unlimited organic and inorganic growth. Second, as you saw in the FY '25 results, our organic growth capability remains solid, even under a challenging market environment. However, regarding revenue compared with 2024, uncertainty about the outlook ahead has increased. We are taking a slightly more conservative view on growth in China. And in the short term, there will also be dilution of growth due to the addition of the U.S.-centered AOC business onto the portfolio, which is facing somewhat difficult conditions.
As a result, we are lowering our previous targets of 8% to 9% revenue growth and 10% to 12% EPS growth and now aim for a mid single digit in revenue and high single-digit growth in EPS. I will touch on this again later. And third, we will continue to pursue inorganic growth through both bolt-on and asset type approaches. Even after the acquisition of AOC, we continue to consider M&A on an ongoing basis. While we have passed on some opportunities due to price mismatches or concerns about the sustainability of the business, we believe there are currently many opportunities for us as a buyer.
We have previously said there is no limit, but based on investor feedback that this was too broad and that the statement itself does not resonate with new investors who are not familiar with Nippon Paint. We have decided to present our approach more specifically. In other words, our primary targets will be companies in the chemical domain that operate in solid growth markets, have competitive advantages and whose growth can be enhanced under our group. We will aim for M&A that contributes to EPS from the first year and achieves ROIC exceeding WACC within approximately 3 years.
On the other hand, as I mentioned repeatedly, M&A is not an end in itself. So we will pursue it with discipline, including with respect to pricing. Next, Page 4. This is a reprint from our earnings materials. But our revenue CAGR from 2018 to 2025 is 16%, and the CAGR for adjusted EPS is 17.4%.
Please note that this EPS growth reflects impact of the share issuance associated with the move to 100% ownership of our Asia joint venture and the acquisition of the Indonesia business in 2021.
Once again, I believe this demonstrates our growth capability over the long term through both organic and inorganic initiatives, and we take pride in consistently delivering on what we say we will achieve.
Next, Page 5. Here, we are briefly looking back since we announced our policy in April 2024. At that time -- and also in corporate governance code, this reflection has been emphasized. And I would like to make a comparison from back then. At the time, we had not anticipated the acquisition of AOC. And we stated our midterm targets of 8% to 9% annual revenue growth and 10% to 12% EPS growth.
Over the past 2 years, we have achieved nearly those levels with organic revenue growth of just under 7% or 6.7% and adjusted EPS growth of just over 10%. Considering how dramatically the political and economic environment has changed since April 2024, I believe this is a very solid performance.
In addition, with the contribution from AOC, we ultimately achieved revenue growth of 11%. This excludes the China adjustments. But with adjustments, it will be around 12% and adjusted EPS growth of 22.2% was achieved.
Furthermore, compared with 2023, margins and cash generation capability have improved. And also, our business portfolio, as you see on the right-hand side, has become more balanced.
Next, Page 6. This is a summary of our organic growth. There are 4 points. First, regarding the market environment. As I have consistently stated, paints and coatings, especially decorative paints have very resilient demand and grow steadily in line with population growth, urbanization and rising economic standards.
On the other hand, they are also linked to economic conditions. So given the current market environment, we believe it is necessary to adopt somewhat cautious assumptions.
Second, against this backdrop, as mentioned earlier, our performance achieved very strong organic growth, even excluding the impact of AOC. Based on the strong organic growth and cash flow, we continue to have a solid foundation to pursue further growth.
And third, under these circumstances, our midterm targets, assuming the current portfolio are mid-single-digit growth in revenue and high single-digit growth in adjusted EPS.
However, internally, we are, in fact, aiming for a double-digit growth. And finally, as we also showed at IR Day, both our China business and AOC remain attractive as growth businesses and this is not changed.
Page 7. Here, we show the results over the past 2 years compared with our forecast at the time in 2024 for each region as well as the outlook we have just explained. For Japan, the profit margin was 9.6% in 2023 and has risen to 10.7% in 2025 after adjustments. So margins have improved largely in line with our guidance. For China, as mentioned repeatedly, the market environment has been challenging. And we prioritized margins.
As a result, performance reflects that approach with somewhat lower revenue, but a significant improvement in margin. Profit CAGR was at 5.9%, which is somewhat below expectation. However, this was offset by NIPSEA except China. As for DGL, performance is in line with guidance, but the recovery of the market environment in Europe, particularly in France will be the key factor going forward.
Page 8. As for China, myself and Co-President, Wee Siew Kim already explained this at IR Day, so I will not repeat the details. However, based on the premise that the market will remain soft, we will pursue growth more aggressively and aim for a high single-digit growth for TUC in 2026. That said, as shown on the previous page, we believe mid-single-digit growth is a realistic figure over the medium term. And of course, we will continue to make further efforts locally to exceed that level.
And as I have said before, China is a very dynamic market. And we believe that only our company has the capabilities to leverage brand strength, scale, digitalization, advancement of IT systems and development of new models in Tier 3 to 6 cities. When the market eventually recovers, which we are not assuming at this point, we believe we will be the company best positioned to benefit most significantly.
Next, Page 9. On inorganic growth and M&A. Regarding the M&A market environment, given macroeconomic uncertainty and the overall decline in valuation multiples, we believe this is a good opportunity for buyers.
In fact, my impression is that discussions have become more active. Against this backdrop, in terms of our track record, not only has AOC made a contribution, but the companies we acquired to date have also steadily grown and improved returns, as shown on the following pages.
Our strength in low-cost funding continues to be an advantage. Of course, as interest rates rise, our sensitivity to risk also increases. So there are some aspects that make us a bit more cautious.
However, at current cost levels, at the current interest rate levels, we still believe there are many acquisition opportunities that can be pursued without compromising the company's financial stability.
As mentioned at the beginning, our acquisition criteria and targets remain unchanged. Based on investor feedback, I would like to clarify that I am not denying the importance of ROIC. In fact, particularly as our valuation has declined, our focus on ROIC has increased significantly. And our acquisition standards have become stricter accordingly. However, if we focus solely on ROIC, it could hinder our growth aspirations. So we believe it is important to strike the right balance.
Next is Page 10. This is also an update of the EPS compounding track record we have shown previously including the latest figure. Since I received questions from time to time, to avoid any misunderstanding, let me repeat that in 2021, we increased the number of shares by 46% due to the move to 100% ownership of our Asia joint venture and the acquisition of the Indonesia business. So the bottom, the dark blue, as a result, on an EPS basis, the existing business may appear to have temporarily declined. However, in reality, this reflects addition of the corresponding acquired businesses. And overall, EPS has, in fact, increased.
Page 11. This is also an update of the ROIC for each asset that we presented at IR Day with addition of 2025. We show figures both including and excluding goodwill and intangible assets. And please take note of the following 3 points. First, ROIC for each asset has been steadily improving after the acquisitions. This can be seen as evidence that in addition to selecting high-quality targets, our model based on autonomy and accountability is working effectively.
I would also add that synergies are actually materializing in both tangible and intangible ways. And second, with acquisitions, we pay consideration that includes goodwill and intangible assets. So we cannot completely exclude them. Even so, if you look on the right-hand side, I believe you can understand that the acquisitions target highly asset-light and highly profitable companies.
And third, we are often benchmarked against peers using simple company-wide ROIC comparisons. However, companies that actively pursue M&A like ourselves and those that do not have very different asset compositions and their growth capabilities also differ.
Some investors who look closely at the details try to make adjustments in various ways. But as I mentioned earlier, focusing solely on ROIC can obscure these differences. So again, I would like to remind you of this point.
And for Page 14, this is also a repeat from IR Day. Based on strong capital generated through organic EPS growth, we aim to achieve compelling growth by reinvesting that capital into M&A that firmly contributes to MSV. What is important is for investors to recognize the reliability of our growth strategy from both the organic and inorganic perspectives. We will continue to steadily build our track record going forward.
Page 15. With respect to financial discipline, we will continue to balance sound financial management with growth, targeting net debt-to-EBITDA ratio below 4x and a D/E ratio below 1x.
At the end of last year, net debt to EBITDA stood at 2.9x, even after executing a certain level of share buybacks, which exceeded our expectation. Based on this, we anticipate reducing it by approximately another 0.5x this year. As we mentioned at IR Day and again today, we are already advancing preparations for our next M&A opportunity.
And with our current financial position, we believe we have ample capacity to proceed with the next step. Again, Page 16, our continued commitment to MSV remains unchanged. I believe there are very few companies that stayed so clear and consistently that MSV is their core mission. We, the management as well as the Board take pride in the fact that this philosophy is deeply embedded in everything we do. And based on it, we intend to continue delivering solid results.
This concludes my presentation on the earnings results and the update to our midterm management policy. Thank you very much for your attention.
We will now move on to the Q&A session.
We have 3 points I'd like to ask you. First, to provide as much opportunity to many investors, we'd like to limit the number of questions to 1 per person. [Operator Instructions]
First question is Goldman Sachs Securities, Ikeda-san.
2. Question Answer
This is Ikeda from Goldman Sachs. First, you are exceeding the business plan and you're exceeding the consensus on the guidance for this fiscal year. Congratulations for the very robust performance. First question. Q4, China business. The market environment is difficult, and TUC sales volume is upper single-digit and 5% decline overall, but the profit margin is improving quite significantly.
Sales price is unchanged. And so the margin improved. And this trend will continue this year? The raw material cost due to -- may rise due to the competition, but China's business environment and this year's forecast, please?
Thank you, Ikeda-san, for the question. For Q4, unfortunately, TUC was minus 5%. So we are not in a full recovery trajectory yet. Q4, as you know, is a slow season. So we will do the realigning and recover and collect the receivables.
We think we are running a healthy business. And there is no excessive inventory in the market, and we are recovering the accounts receivable. We felt the risk in the account receivable collection, but now our healthy management is bearing fruit.
And as you rightly said, raw material benefit is being enjoyed the premium products sold well, but the economy products were a bit difficult. The market overall is minus 5%. So we are in line with the market trend.
In one word, this is -- although we're in a slow season, the demand was rather weak. And in Q4, that was also the case. As I mentioned earlier, in FY '26, we are not assuming a radical improvement in the market, but still aiming for high single-digit growth.
So we will pursue the premium strategy. And as we've mentioned earlier, the Tier 3 to 6 cities, our experience in these 3 to 6 cities can be exerted Direct2Front, D2F, as I mentioned on Page 9.
I mentioned this on IR Day. We are doing this before other competitors, and we are well established in terms of system. So we think this will come to fruition. Last week, I met my Asian team, China team are very much motivated for sales increase. They are saying we will alleviate your -- the burden on your shoulders. Our China management team have high credibility, high trust, and they're saying it boils down to profit. We have to raise profit. Like Wee Siew Kim said, high single digits, will be secured in TUC as well.
But at the same time, for margin, raw material is basically flat. Our assumption is flat. So there is some risk. It can go up or down. Of course, the downside of the slow economy is sales, but the benefit is raw material cost decline. So we think these 2 factors will offset each other, and we can secure margin. So for profitable growth as Wee Siew Kim and China management team have committed, so we will secure the profitable growth.
So to repeat myself, the market, we're not assuming a turnaround in the market, but we want to achieve this target. So that is the basis of our guidance.
One follow-up question. as of Q2 and Q3, you mentioned the credit control. You will have more disciplined credit control. The inventory level sell-in and sell-through are well balanced now?
Thank you for the question. In Q4, this is the collection of receivables. So do you see our collection is progressing steadily. So this is the sound management. And we are not pushing to the stock. So yes, as you rightly said, it is well balanced. Yes. I hope this answers your question.
If time permits, you can ask a follow-up questions later. Next, from SMBC Nikko Securities, Shintani-san.
Can you hear me?
Shintani, your audio is a bit low. So if you could speak into the microphone, that would be great.
Can you hear me.
Well, it's still very low, but...
This is Shintani from SMBC Nikko. I have a question regarding AOC for the 4Q, a 2% decrease in revenue. So compared to the third quarter, given the challenging market conditions, that's understandable. And for the next fiscal year, you're looking at increase by low single digit. And the interest rate cuts considered, and I think you are more targeting towards the second half.
So how do you view the recovery curve for this business? And also during the IR Day, you talked about how the market conditions are now close to the bottom. And for the -- in terms of segments, infrastructure may be recovering first. So just to -- if you could give some color and share your views on how this business will fare.
Yes, Shintani-san, thank you very much. As you rightly said, AOC -- with regards to AOC, the market conditions are bottoming out. But whether we will have a V-shaped recovery, I think this is where we need to be somewhat cautious, including the housing segment, the pent-up demand has accumulated to a certain degree. However, the U.S. environment per se, in terms of the housing segment, for example, the mortgage rate is not low.
Even with the policy rates coming down, the long-term interest rates are not at low levels for personal consumption, housing turnover will not proceed as expected.
So given these understandings for us, as you said, we are looking at various segments, including infrastructure, we believe there are still rooms for growth. And Europe, we are not expecting significant recovery from Europe either.
So of course, we were always pursuing further business growth. Given the worsening economic conditions, so there may be a margin deterioration that we must accept. So in many ways, we should not be optimistic, we should follow a solid operation of the business. But the key points to bear in mind are for this year, single digit in the medium term, mid-single digits, that's the level of recovery that we are targeting. So a rather moderate recovery starting from the second half of the next year on to the year after that.
I think that's where we are expecting and how we will leverage the strengths and competitive advantage of the company is something that we need to consider.
Understood. And for Europe, you think there's still room for recovery in the European region this year compared to last year, we can expect some recovery from that region as well?
Yes. Well, honestly speaking, the economic recovery in Europe versus economic recovery in the U.S., which is bigger, of course, varying views, but myself and the local management share the same view that the U.S. economic recovery may be faster. So it's not that we are betting on Europe. Europe will steadily try to improve and recover the business and to gain more share, but the main market will be the U.S.
Next, BofA Securities, Enomoto-san.
BofA Securities, Enomoto speaking. NIPSEA outside China, excluding China, Q4. Why is it so good? If you could elaborate. In the material, it says Indonesia is improving significantly. Other than that, doesn't seem like others are improving that much, but NIPSEA excluding China, is showing a radical improvement. And so why is Indonesia so strong? And in other areas, I think there are big improvements. Which areas were strong.
Thank you for the question. First of all, NIPSEA China is diverse. So it's not one answer fits all. So first of all, starting from Indonesia. Q3 -- Q4 or Q1 is the demand season. Q4, we had a strong campaign. And as you can see in the volume, double-digit growth. It's not low double digit. So it's a high growth, and we're impacted by FX. So at a glance, on Page 22, you see plus 9.4%. FX is minus 6%.
So on a local currency basis, it was very strong. Margin is -- remains high. So this is decorative and industrial, although the volume is small, overall was strong. And Betek Boya FX was a negative impact. But actually, the profit is positive.
As you see in Q4, the adjusted operating profit margin, 23.4% -- 23.4%. So it is a high profit contribution. Q4 volumes struggled somewhat. But with the price increase, we are doing well. And others, overall, it's not just one factor. There are multiple positive factors. In some regions, there were temporary adjustments. And they were -- these were small adjustments. So that is an upward factor. So Singapore, Malaysia, Thailand were all generally strong.
Just a follow-up question. In the new year, what is the new year forecast. Is Southeast Asia negative margin, I think, is your forecast and Turkey is a big deterioration in margin. Other than NIPSEA China, are there -- what's the background to your weak forecast.
FY '25 was strong. That's one thing. So we are a bit conservative we cannot help but doing that. For Turkey, this indication is misleading. Due to inflation, they overperform compared to initial forecast. So when we build up our guidance, this is the assumption. In reality, our profit margin is 17.1% in Turkey. So even a few percentage point lower, it will still be 15%. So overall, as I said earlier, China will grow, but NIPSEA is always -- growth is a factor, the focus. We don't have any particular concerns anywhere.
Thank you. Next, Citigroup Securities, Nishiyama-san.
This is Nishiyama of Citigroup Securities. For your plan for the new year, on Page 10, I'm looking at the heat map and also Pages 8 and 9. When I compare these pages, NIPSEA, Dulux, these will be the central businesses that will perform better than the market conditions. Is it coming from share gains or pricing policy. If it's from share gains, I think the situation varies between regions. But including promotional costs, I think you've had a stricter cost control, including promotional costs. So I understand you place emphasis on EPS over market share. But can you share your thoughts on this?
Thank you. As I said at the beginning, with respect to the market conditions, we try not to be optimistic, we try to assume a more conservative view on the market.
With that, by regions, of course, the situation varies. For example, I think the easiest is the Dulux specific. For a long time, the market remains flat, but we have achieved a growth of around 5% continuously.
And if you look in the appendix in the midterm plan, the market share is close to 50%, and it remains flat. But in terms of value amount, I think our share is higher.
Of course, having such high shares will not always contribute positively. So that is why I have shared a rather more conservative view. The same for other regions. In relation to the market data, we tend to have a more modest view of our market share.
But if you look more closely, we are mostly exceeding the market in most regions. For example, in Indonesia by slightly the market share is growing by 19% to 20% -- 19% to 20%.
So by region, as I already mentioned during the organic growth section, we may sometimes temporarily focus on expanding the margin. But in the medium term, revenue and share gains are what we emphasize at Nippon Paint Holdings. So that stance remains unchanged. And in that sense, including Japan, even in markets that remain stagnant, we continue to pursue positive growth.
And on top of the profits, as you mentioned, if volume is struggling, then we need to make pricing adjustments. If it's a value-added product that customers demand, then pricing should be accepted. So we will pursue such a possibility.
And lastly, I would also want to mention about the cost structure that it is being reviewed constantly. In order to improve productivity for Japan as a whole, what's often being said is how to utilize and make use of AI, that's very much been talked about.
When it comes to paints and coatings. This is a rather traditional business, and that is all the more reason why we need to apply AI improve productivity and to achieve growth while controlling the headcount.
So in that sense, we are advanced in the industry when it comes to this kind of AI technology-related initiatives, the operating leverage will come in and we believe that we will be able to achieve profitable growth. That's all for me.
I have a follow-up question. With respect to the market share, how you are using the promotional costs compared to the previous year for the new year, are you going to increase promotional costs? Or are you going to control and reduce the cost in that sense?
For this, again, different regions have different situations. Indonesia, where we expect growth, we hope to increase and also Betek as well, we will invest in marketing as well. For China, surprisingly, even when we say promotion, it's not just advertisement, it also includes incentives from discounts.
And they are not really succeeding as I shared last year or 2 years ago, in some regions where this kind of initiative isn't successful, we wouldn't want to waste funding on promotions that would not bear fruit.
So situations vary from region to region. Dulux, we've always spent promotional costs, and we will continue to do so, but we will always review whether that's optimal. Of course, right now, they are producing good results.
But always, we are considering the latest market condition and to make adjustments accordingly. So as of now, whether increasing promotions or decreasing promotions, that is not finalized. We would like to proceed with agility and reflect our views of the market conditions to reflect the reality. That's how we operate.
Next, UBS Securities, Omura-san.
UBS Securities, Omura speaking here. I have a question on your China business and forecast, a follow-up on China. Earlier, you talked about the China team, Asia team last week. You said China team this year will work very hard. They showed a commitment you said. More specifically, what is the change in the strategy this year from last year or 2 years ago? This year, are you changing something in particular?
Thank you, Omura-san. That was just an example earlier. They say they work their very best every year. So it's not that this year will be all that different, but the Asia group management meeting, which we hold every year, China team came to me and they said we will do our very best. They came all the way to say that word to me. It was impressive. It left an impression on me. But way back on last year with a relationship to our competitors, we had TUC 25% market share in the second and third companies, we are 3 or 4x different, bigger than the second and third player.
So we have the scale and brand. We have the advantage. That remains unchanged. But in small areas, we were looking for -- compared to last year, we're trying to deep dive and see that we are really advantageous. And as Wee Siew Kim said, picture print.
Compared to the conventional emulsion print, it is growing. So local companies are now working very hard. And it's not that we are not focusing on that, but we do not have sufficient traction, not necessarily.
So what can we do? We're thinking again. And as we say, it's our policy, so I cannot elaborate too much, but we want to take steps, take the strategy and tactics to win in this competition. And so we discussed that.
That is one example. One more point, as I alluded to earlier, Tier 3 to 6 cities, we are a latecomer in 3 to 6 cities. So overall, our bread and butter is Tier 0 to 2, 80% is 0 to 2 cities and 3 to 6 cities is only 20%. So we have more room to grow. We have the asset-light strategy and other CCM installment, those are also bearing fruit.
But I think we can do more. So the distribution advantage and Direct2Front, the order from the sales office can be delivered to the site directly. These cannot be imitated by the latecomers, but they will catch up eventually. So how can we maintain our advantage. We're working, discussing every day and executing this every day in China. And as I said earlier, AI is most advanced in China. AI utilization. So efficiency and sales growth.
In our group, China has scale. And I think it's a team that can crystallize this the most. So Wee Siew Kim is saying high single digit. He's committing to high single digit. So it's not just pie in the sky. I think we can achieve this for real.
Additional question. Do you have a plan of increasing the sales headcount, sales team changes from last year. Are you changing your sales structure or increasing the sales head count or anything in your [indiscernible] CapEx numbers, NIPSEA overall comparing last year and the year before that overall is down by JPY 16 billion or JPY 17 billion. So you're not in a capital-intensive industry. So this may not be a big important factor, but capital expenditure and the expansion of sales personnel, any changes in that area from last year to this year?
First of all, regarding CapEx, our business is asset light business. In other words, we're not in the business where we cannot maintain the competitive edge without CapEx. So for unnecessary CapEx, we will stop, suspend or postpone. We call this CapEx prudence. We have a very tight disciplined control. In this year, we will do that. Again, overall, so the CapEx will be 3% -- within 3% of revenue.
In Decorative, we think we can achieve 2%, within 2% of revenue, it's well achievable. So we are deliberately conducting this tight control. Now on the sales personnel, I will not go into too much detail, but our China business has huge divisions, TUC, TUV and IU.
So cross-functionally, we can utilize each other's asset and distribution channels. We're trying to explore more opportunities. So without changing -- increasing the sales personnel, we want to be more productive. So more business per person.
Until now, we try to consolidate the back office. But now we think we can do that in the front office as well. So on that basis, we will focus on becoming more efficient, and we're taking measures to do that. So a simple head count increase will not apply in China.
Next, Tysan, [ free writer ].
This is Okazaki of Nomura Securities. Sorry. Is it my turn? Can I ask a question?
I think we are waiting for Tysan to ask questions first. Okazaki, if you can wait a moment. Tysan, can you hear me? Perhaps you are unmuted. My apologies. I forgot I wrongly called out the name Okazaki-san. My apologies, it's Okazaki-san of Nomura Securities. So it wasn't Tysan, it was Okazaki-san, my apologies. Sorry, Okazaki-san, please go ahead.
This was covered in the previous questions. But regarding the raw materials and fuel, of course, it's difficult to predict. But between January, March, April, June period, just to give rough estimates for Japan, China, Indonesia, Australia, for these markets, how are the prices trending. Looking from outside, it doesn't seem so much increases have been had. But to the extent possible, how are the raw materials and fuel prices trending in these markets.
Yes. Thank you. Well, roughly speaking, we expect the prices to remain flat. Honestly speaking, if there is any upward pressure for raw materials in Japan, there certainly is, but we are implementing cost reductions and through productivity improvement, we believe such increase will be absorbed for raw materials.
And the same can be said for the other regions. So if there is a significant rise in the raw material prices, and of course, this will impact our earnings plan. But as of today, we are not anticipating -- we are not expecting such significant increases.
There are variations from region to region, but I will not go into that. So for the term that just ended, October, December, comparing January to April, we should not expect such a difference. Yes, that should be the assumption.
And there's one more thing I want to confirm on Page 20 in NIPSEA China towards top right, FX impact plus 4%. On Page 20, I'm looking at Page 20, top right. FX, plus 4%. So the operating profit margin improvement compared to the same period last year. In the fourth quarter that you just reported, you had a 4% improvement.
Well, FX mainly affects the revenue. So in that sense, profits are also impacted to some extent. But basically, this is an impact on the revenue.
If you go to Page 2, we try to make it more comprehensible. So in the fourth quarter, renminbi in 2024, it was 21.3 and fourth quarter in 2025, it was JPY 22.1. So in terms of exchange conversion, this is only in yen, so it worked positively.
Next, Toyokezai, Yamada-san, please.
Toyokezai Yamada speaking. So similar question. Your performance is solid. And your year-end result seems in line and under the difficult environment, I think you're in good shape. In the IR, you're focusing -- continue focusing on IR, we feel that very much. but your share price doesn't change.
The market is rising. So before -- compared to the past, you are now -- it seems like you're left behind in terms of share price. And there's nothing you can do, you are doing MSV, pursuing the maximization of shareholder value, highest priority there. And so I understand that you are frustrated at this moment, but I'm sorry for the long introduction.
So you are doing so much, but in market -- you cannot do anything about the market, but what will you change going forward? Or what will you keep unchanged. For example, share buyback, you were rather backward looking. But given the environment a while ago, you decided to do this, repurchase your shares.
And including a revision of your medium-term strategy, what do you think you need to change? It's not clear on what you plan to change. So if you could elaborate, including capital policy and in sales and marketing, business operation, I think you're doing sufficiently, but that is not satisfactory. So if you have anything in mind, please?
Thank you, Yamada-san, for a very straightforward point. Yes, we're pursuing MSV, but the share price is not rising. I've said this a few times ago in the past. And on Board, we're discussing this a few times. First of all, we need to build our track record and have this track record believable by you. Until now the way it appears, it's presented to you from Q3 last year. We split the organic and inorganic and showing the long-term trend. And it's difficult to compare with our overseas peers. And so we are adjusting that as well to make it comparable.
So it's not large changes. We're trying to listen to the voices from the market and be flexible in changing ourselves. As you mentioned, share buyback. As you just said, we want to use money for M&A. We think it's the right way of using money and share buyback.
It seems like it will be a diminishing equilibrium. So it's not the main point, main focus. In October last year, it's not part of the shareholder return. We use capital in M&A and without premium, our share price is so low. And so we listened to the investors voice from the market and we thought that makes sense.
And as we have cash, we were generating cash. We thought that this is a viable option. And we propose that to the Board. And it's unfortunate that market did not react, but share can be bought for JPY 1,000 and the people may look back and say, this was very right choice. It was good. So our underlying strategy, for example, the medium-term strategy and EPS, JPY 100, JPY 200, JPY 300. We say we will bring it up to that level in the long term by running the company in a sound manner.
At one point market will think about us sooner or later, we think. And this is a reflection I'm reflecting on myself. And I said this in the IR Day last year. ROIC. Until now, I was rather backward looking on ROIC, but in year 2020 and 2021 PER 50x and then if you calculate backwards, the -- it's 2% shareholder cost.
And if debt cost is 0%, then ROIC, WACC, theoretical weighted average cost is there, but we're focusing on EPS. So especially from 2024 onwards, we right sized, we revised ourselves.
So for M&A, we will continue studying it, but with more discipline. And this shows our flexibility and our strong commitment to MSV. So we tried to show that in today's presentation more. So the basic strategy remains unchanged. Of course, the yen interest rate, if yen interest rate is 5%, we may change a little. But with the current interest rate level, we can still have ample value creation.
So without daily trade, a day-to-day trade, the long-term investors see value in us and are investing in us. And so we should not just say long term. We need to bear results in the short term, too.
So in Q4, we exceeded -- far exceeded the market consensus. And for the full year, too, and the 2026 guidance, we had a consensus and guidance is something that we think is sufficiently achievable.
So if this penetrate and if the credibility to our management rises, then I think it will start showing changes. Maybe this is not so different from what I've been saying, but we're revising the details or fine-tuning.
And from the investors' viewpoint, agility, I think we are evaluated more as a company that has the agility. So if you could give us a little more time, I'd appreciate it.
I'm not the investor side, on a different standpoint. And so I'm not saying that is bad. You are doing what you need to do and you are upholding MSV. And so it seems like you are struggling because of that. But the goodwill and the intangibles are increasing, it's weighing heavy on you. And at the current moment, it's not a problem, but that -- it could be one concern. But -- so for good or for bad, you are unwavering, you have a solid basic stance. So I just want to wish for the best for you.
Thank you.
Toyokezai interview, I said I will not buy convenience stores, and that was not taken well by the investors. So I said, I have no intention. I said clearly, I have no intention. I said back then that I have no intention, but it sounded like I will buy if it makes sense.
So once again, I want you to rest assured, the M&A that we are aiming for is not there. So thank you very much. So we're making little adjustments like that.
Convenience store, of course, yes, I know that you have no intention of buying a convenience store, but it's just wording in the context, it's so difficult to communicate. We'll do our best. We'll do better on our side as well.
Thank you. Thank you so much.
Yes, investor side misunderstanding should not be led. If you know my character, you know how I say things and some like me for that, but those who are not so familiar with Nippon Paint may take it differently. So I have to say things carefully. I'm adjusting myself, too. Thank you very much.
We have this session planned until 5:30. So if you have any questions, please go ahead. Next is Kubota from Nikkei Shimbun Inc. Can you hear me?
Yes, Kubota-san, I can hear you. Regarding interest rates, as was briefly mentioned in the presentation earlier, I would like to further seek clarification. So as we move towards a world with positive interest rates, how will this affect the portfolio, fundraising, M&A strategies? Does it change the size and industry of target companies? Would there be any impact. That's what I would like to understand.
Thank you for the question. In the midterm policy, if you refer to Page 14, bottom left, currently, we are looking at 1.2% before tax for the interest rates, it will be within 1.0% post tax, we are not particularly concerned. But if you look closely, the ratio of variable interest rates, and we are looking at average maturity of less than 5 years, and we are increasing the ratio of variable interest rates.
So the policy rate affects more on the short-term side and of course, the market due to Prime Minister Takaichi's policies, there may be some concerns voiced by the market, and this could lead to increased long-term interest rate.
But through the asset assembler strategy, we are mostly raising funds through debt and this will not be affected too much. So in terms of the portfolio, as you mentioned, we further look to debt mostly from the bank borrowings. And currently, we don't have any corporate bonds, but of course, we will consider that as an option.
So within the debt space, we will raise funds. For equity, it's not that we are denying the possibility of issuance but we try not to issue stocks in such a low valuation environment.
So that policy remains changed. And as for the future, what if the interest rate reaches 5% or even 3%. Of course, our risk sensitivity will be higher accordingly. Just because it's at 1%, it doesn't mean we can acquire and purchase everything and anything. So our perception of risk needs to be further advanced. Otherwise, we would not be able to achieve the ultimate MSV.
So our basic strategy remains unchanged and also it would not affect the scale or the size that we are targeting, but we are cautious when it comes to rising interest rates. I would like to reiterate we continue to pursue M&As with organic business growth, so we are generating cash. So I think it's meaningful that we spend cash and allocate it towards M&A.
Thank you. Next, CLSA Securities. Zhang.
One question. This year, in the new year, in AOC, U.S. interest rate cut and AI investment, the demand -- can demand be stimulated. And in China, from around January, the real estate property, the tightening has been relaxed. And so there was a policy that was announced. So we think the channel will turn upward as well. But looking at the new year, what is your impression? China real estate and AOC, which do you think has more room for growth? So if you could ask that one question.
To be honest with you, China real estate policy change or the economic stimulus measures, we don't know how much impact it will have on the paint demand. This has been discussed much. But as far as the current assumption goes, it is still difficult. And if it has some positive impact, it will be an upside. That is our view.
Now like AOC, the interest rate cut, the FRB, the Fed chair will change. We don't know what will happen. And the long-term interest rate trend, no one knows what will happen. AI investment, not much, but the -- in the construction market, the housing and infrastructure, with the lower interest rate, we can expect an upside. So unfortunately, we're depending on other risk factors, but we want to achieve this with our own efforts without the tailwind of the external factors.
So when the market recovers, we will enjoy the upside, we will be the beneficiary of that. So that is our line of thinking. So I can't say which one or the other.
One follow-up question. AOC margin in Q1, Q2, Q3 last year, it was 35% or so. And in the next year, new year, is it slightly lower than 35% or roughly 35%. Your volume is up, but margin doesn't seem to be rising much. So if you could elaborate, please.
AOC, as I've been saying, the contribution margin, the price up and down is done with the raw material cost increase. So the volume of the -- not that different, but the fixed cost is low. So the operating leverage being high is not in line with the reality. And so the added value and the raw material cost level will determine the margin. So we think it will be flat or slight decline and achieve profitable growth on that basis.
Thank you. We are still accepting questions from the Japanese line, but we will switch to the English channel. [Operator Instructions] It seems there are no more questions on the English channel, so we will go back to the Japanese channel and receive questions from the Japanese channel listeners. [Operator Instructions] Daiwa Securities, Umebayashi-san.
This is Umebayashi of Daiwa Securities. This is my first time asking a question. With respect to your strategy in China, I would like to ask a question. The other day, during the IR day. You talked about targeting regional cities and when doing so rather than executing CapEx on your own, you would look to form partnerships with the local companies and to make use of their assets for expanding in those regional cities.
So this strategy has been implemented since before. But over the past 1 to 2 years, you said that perhaps you've been able to identify who are the good partners and who are not. And you also mentioned that you now have insight, the future where you are working together with those good partners. So going forward, can we expect better results in terms of your performance, your results through the partnership with the local companies in those regional cities in China compared to last year.
Well, I don't talk too much about unfavorable partners. But for us, as I mentioned before, CapEx prudence is important to us. So when it comes to CapEx, we need to control when necessary. And as a result, the strategy per se resulted in an elimination of 1 competitor. And of course, we can make use of their assets, their capacity and for them as well by making Nippon Paint products their utilization rate improves and this results in a win-win relationship.
So each individual partnership scheme is small, but particularly from March to June period now -- Tier 3 to 6 cities. Through this scheme, we are able to cover those cities where we alone cannot. So this contributes positively. And if we can achieve growth in those cities, then this partnership will be successful. But if it remains stagnant, if the utilization rates at our partner companies do not improve by much, then it would not have a significant results.
The partnership itself may be working. But the sales strategies as a premise to that or the texture paint strengthening that we've been talking about or the Direct2Front. In other words, the distributors themselves are making the deliveries rather making deliveries from the factories is something we are promoting.
And as a result, we can increase the user base. And of course, it is for reflect positively on the satellite cities. So in simple terms, so far, so good. Things are moving positively, but I think we can expect this to flourish more once we reach a certain level of volume from these cities and partners.
I have a follow-up question. So this kind of partnership strategy, do you see the need to implement this kind of strategy in regions outside China? Or do you see benefits of doing so in other regions?
Thank you for the question. Needless to say, this model has been studied by respective partner companies. And if there is a need if it makes sense in other regions, of course, we will implement it. If there are smaller competitors willing to join Nippon Paint, then that should be considered. Luckily or unlikely for us in China because the market condition is quite worsened, I think that proved to be an incentive for these companies to join hands perhaps in other regions when things are faring better, they don't see the need.
So we are not saying that we will not implement or we will implement with absolute certainty, we will review each situation individually. Wee Siew Kim has a keen sorry -- NIPSEA has a keen eye in determining these situations and assessing the individual circumstances.
Next, Citigroup Securities, Nishiyama-san.
So my second time, Nishiyama from Citi. So medium-term growth is now a bit more conservative, you revised it down. The current market is a bit sluggish, but your medium-term forecast was revised. If you could give us some more color to that.
Why did you do that? By region, if you made bigger changes by region, I would like to know those areas. If my numbers are not wrong, China is revised down. So your medium-term view on China, maybe it's difficult to have an optimistic view on China? Or if you could elaborate, please.
As I alluded to earlier and as you rightly mentioned, China is expected to grow by around 10%. So mid-single digit is revised down to mid-single digit, this year is high single digit. So it seems like it will just continue declining. I don't want this to be misunderstood. But in the medium term, the soft market now is used as the basis as the assumption. And if it recovers, it will be an upside for us.
So we want to take a conservative look for now. China is a big portion of our business. So 8% to 9% overall growth, it will impact the overall growth of 8% to 9%. And in 2024, AOC was not part of our business. In profit, it is making significant contribution.
But as Zhang said earlier, from the current economic situation, it's difficult to say it will grow at high single digit. It's difficult to have that kind of assumption, so mid-single digit. So including that, because of the dilution, it will be down from 7%, 8%, 9% to mid-single digit. But 10% to 12% EPS is now high single digit.
But we want 10% bottom line growth. So that is our aim. But the background is very simple. So if you could understand like that.
Next, Okazaki-san of Nomura Securities.
This is Okazaki of Nomura Securities. Regarding AOC, it has been mentioned several times. July, September, I think on a local currency basis, revenue decreased by 9%, but October, December, it was down by 2%. So the decrease has been smaller.
And 1/3 of the sales comes from infrastructure. This covers pipelines, renewable energy, alternative energies and bridges. So the decrease has been smaller. So during the IR Day, there were some comments saying that it was difficult to understand what is happening on the ground. So what is happening? And where we could expect growth in the coming year.
Right. I cannot divulge into much details, but continuing from before, we will continue to say that we are bottoming out. But there are competitors, and this information in itself is sensitive for us.
So we hear numerous comments, but in principle, we say that overall, it is true that infrastructure may go ahead of others, but overall, we are seeing signs of bottoming out. But at the same time, we are not expecting a V-shaped recovery with that assumption. We presented a rather conservative guidance. That's all I can say.
Thank you. It is time. So we will close the Q&A session. Lastly, President Wakatsuki, please.
Thank you very much for staying with us for a long time. So this time, we did the financial results briefing and the full year briefing and the medium to long term strategy. I think you were able to understand our strength and our track record. We want you to take a look at the track record. So we're trying to improve our disclosure in many ways.
As I mentioned earlier, MSV is the basic strategy. And so this is unwavering. But strategy-wise, we're making -- constantly improving and adjusting our strategy by listening to the voices of the market so that we can get the conviction by the investors.
We will continue making our very best effort. So I ask you for your constructive feedback as always. Thank you very much.
With that, we will close this briefing. Thank you very much for your attendance.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]
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Nippon Paint Holdings Co — Q4 2025 Earnings Call
Nippon Paint Holdings Co — Q4 2025 Earnings Call
📊 Quartal auf einen Blick
- Umsatz: Q4 +14% (real terms); Geschäftsjahr (FY2025) +11% YoY.
- Adj. Betriebsergebnis: Q4 +54%; FY2025 +38% mit adj. OP‑Marge 15,5% (+3,3 Prozentpunkte YoY).
- Adj. EPS: Q4 +75%; FY2025 +43,3% auf JPY 76,7 (Accounting‑EPS deutlich über Guidance).
- Beitrag: Operativer Gewinn organisch +24% / inorganisch +30%; Q4 Margenverbesserung +4,7pp.
🎯 Was das Management sagt
- Strategie: Asset‑assembler‑Modell bleibt Kern: organisches Wachstum + gezielte M&A; keine fundamentale Richtungsänderung.
- M&A‑Disziplin: Fokus auf Chemie‑Firmen in stabilen Märkten; Ziel: EPS‑akkretiv im 1. Jahr und ROIC über WACC binnen ~3 Jahren.
- Operative Schwerpunkte: China: Premium‑/Tier‑3‑6‑Expansion und Direct‑to‑Front (D2F); Digitalisierung/AI zur Produktivitätssteigerung; Kapitalpriorität auf Deleveraging vor weiteren großen Zukäufen.
🔭 Ausblick & Guidance
- FY2026 Guidance: Umsatz ~+8%, adj. Betriebsergebnis und Nettogewinn ≈+10%; leichte Verbesserung der adj. OP‑Marge erwartet.
- EPS‑Prognose: Accounting‑EPS +11,4% auf JPY 85,3; Aktienrückkäufe tragen ~+1% zum EPS bei.
- Regionale Tendenzen: AOC Rückkehr zu low‑single‑digit Wachstum; TUC China Ziel: profitables high‑single‑digit in FY2026, mittelfristig realistisch mid‑single‑digit.
❓ Fragen der Analysten
- China‑Fragilität: Nachfrage bleibt schwach (TUC Q4 −5%); Management betont Margenfokus, Receivables‑Sammlung und Einsatz von D2F/AI statt Headcount‑Aufbau.
- AOC‑Erholung: Markt zeigt Bodenbildung in den USA; Housing‑Recovery unsicher wegen langlaufender Zinsen—erwartete Erholung moderat, zweite Jahreshälfte als Wendepunkt.
- Kapitalpolitik & Aktionärswert: Kritik am Aktienkurs; Management verteidigt Buybacks, progressive Dividende (+JPY1) und strengere ROIC‑Prüfung bei M&A.
⚡ Bottom Line
- Implikation: Starke Ergebnislage und Margenverbesserung bestätigen operatives Momentum; Guidance ist erreichbar, aber konservativ wegen China/AOC‑Risiken. Solide Bilanz (Net Debt/EBITDA ~2,9x) erlaubt weitere disziplinierte M&A und Buybacks—kurzfristig bleibt Aktienkurs‑Risiko bestehen, langfristig Unterstützung für Wertsteigerung vorhanden.
Nippon Paint Holdings Co — Analyst/Investor Day - Nippon Paint Holdings Co., Ltd.
1. Management Discussion
So we will now begin Nippon Paint Holdings IR Day 2025. Thank you for joining us today despite your busy schedule. Today's event will consist of individual programs, each featuring a presentation followed by a Q&A session. I'm Tanaka from Investor Relations, and I will be the MC for today's event. Thank you.
Let us begin with the opening remarks from Yuichiro Wakatsuki, Director, Representative Executive Officer and Co-President of Nippon Paint Holdings. Wakatsuki-san, the floor is yours.
Okay. Thank you, Tanaka-san. Well, good morning, good evening and afternoon, wherever you're dialing in from. Today, I am pleased to present to you our second IR Day event and thank you all for listening in.
Last year, if you recall, we had our first IR Day with a focus on our brand, NIPSEA and governance. We have always felt that the power of our brands are not well understood. And as a showcase asked my partner CEO, Pat Houlihan from DuluxGroup and NIPSEA representative Gladys Goh to go through our brand strategy and why it is important.
I hope investors received the impression that in the decorative space, we are not really a chemicals company, but more consumer goods company, a slow-moving one where brand matters, and we have come a long way to establish one, which is not easy to replicate by our competitors. More importantly, I hope you took away the people aspect where talent matters and that we have the right talents.
Today, we have 3 sessions also in an attempt to respond to many investors' interests, AOC, NIPSEA China and Turkey as well as M&A. I have been talking about the AOC business to the public on behalf of Mr. Joe Salley, CEO of AOC. And this session will give you an opportunity to hear directly from the people on the ground. NIPSEA China has always been on the spot and most recently, investors reacted negatively to the second quarter degrowth in TUC. My partner co-president, Wee Siew Kim, who is also the CEO of NIPSEA Group, will discuss our continued commitment to grow the business and how to go about it. Finally, I will discuss our M&A strategy, which has not really changed and maybe nothing new, but with emphasis on the successful track record and our thinking on the way forward.
I hope these sessions will deepen your understanding towards Nippon Paint as an attractive investment opportunity, noting that we do not have AI, semiconductors or dot-com in our labels.
So with all that, let me turn the stage to Joe Salley, the CEO of AOC, and Bob Seidel, the CFO of AOC. Joe, Bob, the floor is yours.
Thank you very much. Good morning, good afternoon and good evening. It's a privilege speak with you. I'm Joe Salley, and today, I'm joined by my CFO, Bob Seidel.
If we can advance to the first slide, I'd like to give a brief overview of AOC. AOC is a leading formulator of unsaturated polyester and vinyl ester solutions with a focus on the most attractive parts of the market, coating and protective barriers colorants and visual effects, adhesives and custom formulations. As you can see on the right, these product lines make up about 80% of our volumes. You can also see from the green chart on the right that about 70% of our revenues are in North America, which we consider to be the most attractive geography and about 70% of our stock keeping units are custom products. This means they are unique formulas tailored for and sold to only 1 customer. We will give more detail in this presentation, but we believe we are competitively advantaged in the market by providing to our customers the best performing products with the best service. The way we drive performance and value is through a highly disciplined set of business systems, which we will also describe further. We believe these business systems along with the market rebound and acquisitions will help drive above-market growth going forward.
On Page 2, you can see that we have over 3,000 stock keeping units and over 1,000 customers. Our products are used in many applications that enhance daily living. Many of our products service coatings or protective barriers, such as relining or cured in place pipe to give longer life to existing pipes, corrosion and fire protection in industrial equipment and glass intermediates. Colorants and digital effect solutions enable Class A finishes and automotive parts and gel coats are used in applications such as marine and bathroom. And our solutions in conventional composites enable lamination applications in kitchen and bath, panels for construction and transportation and castings for infrastructure.
On Page 3, we can see that on the left-hand side of the chart, the market for unsaturated polyester resin formulations has evolved substantially over the last 15 to 20 years with the emergence of 3 global players, including AOC. However, on the right-hand side of the page, you can see that AOC positions itself very differently in the market than others. By our estimate, about 28% of the market is in the CASE, colorant and customized segments, which we favor for their attractiveness, yet almost 80% of our volume comes from these segments.
On Page 4, we can see how we have our assets and capabilities deployed. It is important to note that with our customers, typically the most important factor in their buying decision is product performance. So we invest in research and development as well as commercial resources locally because it's critical to understand the individual customer requirements intimately and to be able to formulate bespoke solutions to meet their requirements. We believe that our customers view AOC as #1 in product quality and performance. I will also note that many of these formulations have a limited shelf life and some of our customers have dynamic and demanding delivery requirements. So we have manufacturing facilities to produce these products locally and enable short lead times. Meeting their delivery requirements is usually the second most important factor in our customers' buying decision, and they view AOC as #1 in delivery as well.
Finally, we understand that the third most important criteria in our customers' buying decision is typically technical service. As many of our customers and the end customer processes are very technical, our ability to have local technical resources who can service our customers is critical. And our customers typically view AOC as #1 in technical service as well.
Now if we turn to Page 5, so we would like to explain in a bit more detail what we mean when we say that AOC is a formulations company and why that's important in our focus segments. As we highlighted before, we have over 1,000 customers and over 3,000 stock-keeping units. And approximately 70% of those products are custom products meaning they are unique formulations for 1 customer. Often, our in-use manufacturers have very demanding performance requirements that involve multiple parameters. They might simultaneously need, for example, our strength and lightweight in a Class A finish, amongst additional factors. Sometimes we sell directly to the final manufacturer but sometimes there is another manufacturing in the supply chain to whom we sell directly who in turn sells to the in manufacturer. In this case, in addition to helping the final manufacturer meet all their requirements. We also have to satisfy our direct customers' requirements. These customers can have unique plant level processes with customized requirements. For example, they may simultaneously need a formulation that enables low shrinkage, has consistent thickening and fast curing.
Then in addition to solving all of the downstream requirements in the context of our own operations in which we are managing a lot of complexity, serving over 1,000 customers with over 3,000 products. There are an additional set of requirements we must meet to practically service the market. For example, we may need certain raw material and change wheel flexibility, rapid introduction of new stock keeping units, batch and plant consistency as well as other requirements. Ultimately, to satisfy the requirements of all of these players, it's like solving a complex and mini faceted Rubik's cube. We believe that being able to solve that well all the while providing the highest performing products with the flexible delivery, provide the best technical service and do so cost competitively is what differentiates AOC from others in the market.
On Page 6, we can see that AOC has a strong set of differentiated capabilities that enable its advantaged position. We believe that we have unique formulations expertise that starts with a deep understanding of the downstream requirements and includes proprietary expertise to develop tailored solutions to meet those requirements. AOC has a suite of highly relevant and differentiated technologies that enable its formulation capabilities. We have a dedicated team of technical service experts, who are deployed locally to our customers. These technical service experts are instrumental in the design, commercialization and post-commercialization support. And finally, AOC has a robust operating system that we believe simultaneously enables the lowest cost position, the highest quality, the best delivery with the most complex offering of highly customized products.
Page 7 explains AOC's approach, which is very unique in the industry. We have a robust set of business systems, which we believe ensure the highest level of performance in the industry in a way that is sustainable and repeatable. On the left-hand side of the page, you can see that we focus our business systems in new product development, commercial excellence, lean and procurement. In our view, these are critical business processes to master for a well-run formulations business. We can speak in depth for many hours about each of these systems. But to briefly summarize, each is guided by a robust set of process management, people management and performance management elements. For each of these business systems there are established processes with clearly defined steps, a rich set of tools, templates and systems that are tailored for each process. Great care is taken to architect the right organizational design in which each position has defined roles on how to support the business system. In addition, there's a robust performance management component to ensure that the business system achieves the desired ambition.
On Page 8, we highlight a few examples of how our differentiated technologies serve demand driven by secular trends. For example, AOC has best-in-class ultra low-density Class A formulations, aimed at displacing traditional materials like steel, unique formulations for carbon fiber spark caps, aimed at displacing epoxy, novel formulations for use in relying for potable water, which are also aimed at displacing epoxy and a number of formulations with recycled content aimed at displacing materials with virgin input. These are but a few examples of focusing our industry-leading innovation in markets that will likely benefit from strong demand tailwinds.
That leads us to Page 9, where we share our optimism about the future. We believe AOC is well positioned for significant value creation. First, we will discuss the market tailwinds. Based on the data we are reviewing, we believe that the industry is at or near its cyclical low point for demand, and we expect that we will experience a full rebound. That implies that we can expect to experience demand tailwinds for the first time in over 3 years, with the market volumes being down between 20% to 25% from their prior high point, favorable exposure to growing megatrends and a robust set of business systems, we believe it is plausible to expect mid-single-digit growth over the medium-term horizon. In addition, we are looking to participate in the continued market evolution in Europe through bolt-on acquisitions, and we believe that our business systems can help ensure success in these activities.
In summary, on Page 10, and AOC is a leading formulator that is uniquely positioned in the attractive market segments with a focus on highly customized products and with a fragmented customer base. The company is competitively positioned to differentiate itself in the most important dimensions for our customers, the best performing products with the best delivery and the best technical service. We have developed a unique set of robust business systems that ensure value delivery and a risk set of controllable and multifaceted growth opportunities.
With that, I will conclude my remarks, and I would be happy to take any questions that you may have.
And the next program is NIPSEA group business strategy. So our speaker is Wee Siew Kim, Director, Representative Executive Officer and Co-President of Nippon Paint Holdings. Wee Siew, please begin.
Good morning, good afternoon or good evening, everybody. At the IR Day last year, I gave a presentation on NIPSEA Group with specific focus on our China group and Malaysia Plus group as together, they constitute a very substantial part of our business. Today, I will update on our business in China. I will also spend some time on our Turkey group, as I only spoke briefly about it as part of the Malaysia Plus group last year.
For 2025 we estimate that our addressable decorative market in China for TUC, which is the business unit focusing on the consumers is down by about 5%. While we expect our TUC revenue to end the year by a drop of about 1%. For TUB, which is the business units that is facing the business enterprises, we believe that because of the measures we have taken to manage our risk, our TUB revenue will drop by about 20%, which we estimate to be up with the same decrease as that in our addressable TUB market. The expected lower revenue growth performance in TUC reflects the ongoing weak consumer sentiments in China. The continual decline in our TUB revenue stems from the long winter in the residential property sector and our efforts to pivot to other sectors for TUB is just beginning to bear fruit.
Overall, together with our Automotive and Industrial Coatings segments, NIPSEA China's operating top line revenue will be flat, but we will have margin growth and increased operating profits. Our investors are familiar with Nippon Paints sole mission of maximizing shareholder value, or MSV. In NIPSEA China, this comes to life in our balanced growth strategy of delivering profitable growth through a careful balance between market share gains and profit margin. We try not to chase after market share at the expense of long-term sustainable profitability.
As a responsible market leader, with the key premium brand in China, it is always incumbent upon us to resist major price adjustments to avoid precipitating a race to the bottom, especially in this trying market conditions. Cost optimization is the constant in the equation to increase profit margin and profitability, and it is ingrained in our operating culture. Our efforts in utilizing our scale to extract further cost improvements as well as innovative ways to manage our supply chains are reflected in the current margin growth. This chart is a depiction of where we think we are in the TUC market space in 2025.
In a shrinking market, we achieved small market share gains in all city tiers in China, while maintaining relatively high top of mind and higher operating profits. We are also taking the time to strengthen internally and manage our risk exposure. For example, in TUB, cash collection is a top priority, and we have actually walked away from a lot of businesses that carry high credit risk. For TUC where account receivables from specific customers become significantly overdue, we tightened credit terms. Where stocks remain high in certain regions of our market, we hold back from pushing sales in these areas.
As our responses to this continuing sluggish market conditions are different in TUC and TUB, I will attempt to discuss them separately. For TUC is about leading and expanding. NIPSEA China currently holds about 25% of the TUC market in China, while the next 2 competitors each hold about high single-digit shares. In TUC, what continues to be of critical importance for our business going forward are: one, a strong brand that reflects the quality and value of our products and allows us to find willing and able partners to forge mutually beneficial relationships, the so-called strong brand and partners linkage; and two, an effective and efficient distribution network that allows us to penetrate markets and deliver quality service to our customers to the last mile, which is the efficient distribution and penetration quality service linkage; and three, a sufficiently comprehensive product portfolio that allows us to target different markets with suitable products at appropriate price points and also complementary nonpaint products to meet our customers' complete needs, the competitive and brand range product portfolio aspect.
By following these 3 guiding points, we had achieved significant success in the Chinese market in the past. These points remain relevant as we respond to the changing competitive landscape and consumer needs and preferences in China. And in the course of the next 10 minutes, I will illuminate with actions we have taken in 2025 along these lines. Going forward, the TUC market is supported by stable and recurring repainting demand this year. In this stable and possibly sluggish environment in order to capture additional growth, we continue to, one, pursue a color and texture strategy; two, penetrate into Tier 3 to 6 cities with paint and complementary products; and three, enhanced customer service at the last mile through operational innovations.
As you may recall from last year, we are in the fourth year of our color and texture strategy with the aim to dominate the TUC market. As market leader, NIPSEA China has to take the lead in color innovation and color trend setting. As for texture strategy, Magic Paint is our superior texture paint product and coupled with our advantage of heavy the infrastructure to train a large group of painters in the specialized application of texture paint. In this regard, NIPSEA China holds the distinction of being the first foreign private enterprise to be certified by the Chinese government for extending this type of training.
As for growing our businesses in the Tier 3 to 6 cities, the smaller cities in China, I also mentioned previously that we have adopted an asset-light approach of partnering regional players, also in the paint industry as our tollers to produce our formulations. In this win-win arrangement, we bring our brand, technologies and formulations while they bring their local capabilities to the partnership. We also adopted a similar asset-light approach for complementary product offerings of dry mix, party and motor. Although for these nonpaint products, we started by setting up our own factories to learn the trade until we gain enough confidence. Now by adopting this asset-light approach, NIPSEA China is able to expand quickly into Tier 3 to 6 cities, some in far-flung regions of China without the need to invest hard assets on the ground.
Remember, I mentioned 3 guiding points earlier. In our progress in texture paint and the Tier 3 to 6 cities business expansion in 2025 and the strong brand and partners linkage and the efficient distribution and penetration, quality service linkage guiding points are clearly seen in action. As we become more attuned to the different market dynamics in the smaller Tier 3 to 6 cities from our experience in the big metros. We adopted our distribution concept to country, distributor and application service providers or ASP model. See, the right-hand chart of an illustrative example, of Zhu Ma Dian City in Henan province. By having the ASPs who offer application services for paint jobs, to sell paints and also complementary products typically needed in any building refurbishment or home renovation, we believe we are beginning to accelerate the penetration into the Tier 3 to 6 cities.
Here, both the strong brand and partners penetration quality service linkages are in play. The strong Nippon Paint brand attracts service providers as our partners and the support by key county distributors to the web of service providers ensure that these ASPs can focus on customer acquisition and service delivery. Specifically, on texture paints, we have enhanced our production efficiency and review our raw material purchases to enable our texture paint to be price competitive in these smaller markets, which is the third guiding point of competitive and broad range product portfolio. With these adjustments in our texture paints and the Tier 3 to 6 cities business expansion activities in 2025, we are confident that we will be able to further gain ground by leaning on our 5,000-plus ASPs.
While we are holding well in the Tier 0 and Tier 1 to 2 cities, there is no room for complacency, and we will continue to innovate and improve as it is our belief that the repainting market in a Tier 0 to 2 cities will continue to grow, we are enhancing our sales reach and consumer experience beyond our traditional retail store model. Working with partners, we are setting up community stores dedicated to a repainting service so as to be closer to the customer with a target of 2,000-plus community stores in 2026, with the community stores carrying our flagship texture matched paints and other quality paint products, tapping on professional service by painters trained and certified by us, offering a standard menu of products and services, we believe we will make renovation and repainting so much more accessible and appealing to our customers.
As an operational innovation, we have developed and implemented a concept to centralized supply chain management and execution for distribution networks in Tier 0 and selected Tier 1 to 2 cities. The key idea of this centralized direct to the front logistics concept for large urban cities is to leverage our better logistics capabilities, coupled with our advantage of scale to send products directly to the retail stores and also construction sites, reducing friction in the current process. This way, our distributors can save on logistics overheads and the retail stores can focus on customer acquisition and experience. We have successfully implemented this concept in Shanghai with 2 central gaps and are working to implement it in other cities. China comprises different complex markets even for TUC, and we have adopted different approaches to appropriately tackle the multitude of markets and their dynamics.
Now I'll turn to TUB, which focus is stabilizing and diversifying. We have stabilized our TUB business in China following the serious downturn in the residential property sector. We went on a very strict credit regime and exited from many of the troubled counters. As a result, we have successfully reduced debt associated with TUB customers. If there was a silver lining to this difficult period, it was -- it awakened us to opportunities that we had reflected in the past. In the past, like our competitors, we were single-mindedly focused on providing products and services to the big property developers. And pre-COVID, they were really racing away. Today, our customer base is more broad-based including regional developers, contractors and service providers, and we are also pivoting to the nonresidential sectors, such as government offices, schools, hospitals, district rejuvenation, factories and even central kitchens. In time to come, this diversification of our TUB customer base, which includes those with specialized requirements will fortify our sales volume and OP margin and reduce our dependence on new build construction in the residential sector.
As our TUB colleagues break new grounds in a nonresidential area, they can utilize the product offerings from Nippon Paint industrial businesses. One area that we are banking on to grow is to offer integrated solutions for industrial new build and renovation. This is a new business segment we call the MRO, maintenance, repair and operations to industrial facilities across China. We could potentially count 6 million sizable enterprises as customers, and apart from our usual provision of industrial coatings. We aim to provide MRO spray chemicals, such as lubricants, degreasers, cleaners for parts and contact services and sticker removers, for example, so watch this space.
2025, we continue on innovation and improvement. As a company, NIPSEA aims to continually innovate and excite the market. At the China International Import Expo in Shanghai earlier this month under the theme Together Refresh a Sustainable Future. NIPSEA China showcased its innovative products and scenario-based solutions aligned with China's key development priorities, which are namely the low altitude economy, AI in manufacturing, new energy vehicles, high-quality housing and ESG. We had the global debut of our Nippon Paint low-altitude aviation comprehensive coating solution developed by our global R&D. We presented the protective outerwear coating for the composite airframe of eVTOL aircraft and the resilient ground coating system engineered to withstand rotor downwash and impacts during the vertical takeoff and landing.
At our booth, you would have also seen our radiative cooling coating under our Industrial Coating Solutions, the insulation, fire resistant and protective polyurea coatings for new energy vehicles and integrated solutions for building exterior and interior walls and garages for existing and new houses to be safer, more comfortable and to enhance eco-friendliness. Through Nippon Paint Group's purpose statement, we use the power of science plus imagination to enrich the living world.
Now for NIPSEA in 2026. We believe the business environment in China has not made a meaningful recovery that we have hoped for in 2025. Nevertheless, we recognize that there are areas where we could have done better, and we have undertaken various initiatives to address growth in a sluggish market situation. For TUC, we are targeting for high single-digit growth for 2026. As for TUB, our team in China believe our TUB business has bottomed up in 2025, and we are optimistic that we arrested the decline that as we have seen over the last 4 years. Overall, we believe we have done what we should strategically staying the course in our balanced growth strategy, managing our risk provenly and laying the groundwork to strike when the market is right again with many more cylinders firing in our engine of growth.
While we are focused on the decorative market, let me round up China by reporting that in the industrial sector, our auto business grew at a compounded annual growth rate of 7.6% over the last 4 years with enhanced profitability, and we are poised to write the tailwinds of Chinese auto OEMs internationalizing. We won the lion's share of the business in the latest 3 international competitions in Thailand, Indonesia and Hungary as a CASE in point.
Now moving on from the market of a long and proud civilization in Asia, China to another at the crossroads of Asia and Europe. And let me spend a little time on our Turkey group. In our NIPSEA organization, Betek Boya is part of the Malaysia Plus Group, which I covered broadly last year. Grouping Betek Boya in this way in the Malaysia Plus Group facilitates sharing and learning as Betek Boya integrates into the NIPSEA Group. However, as Betek Boya finds its feet, executes its growth, we decided that it can also be our vanguard for growth and we formed the Turkey Group in 2024, comprising Betek Boya headquartered in Istanbul as the core with presence in Turkey, Egypt and Kazakhstan.
And our Kazakhstan presence substantially enlarged with the acquisition of Alina in late 2023. So Alina is bolted on to the Turkey. Centered in Almaty, Kazakhstan, Alina operates in 4 countries in Central Asia. The Turkey group led by Tayfun Bey now has over 4,000 employees across 17 manufacturing sites and exports to more than 30 countries. Betek Boya was acquired in mid-2019 immediately giving us a strong position in Turkey. We have a young and growing population, now 87 million, Turkey offers high growth potential due to this population, urbanization and long-term rising GDP. In Betek Boya, we gained a company with the highest market share in the decorative paint segment in Turkey at the time of acquisition in 2019, 25% market share. We gained a very established brand portfolio with high recognition and a strong sales and distribution network in the country.
We also benefited from gaining entry into a new product segment of external thermal installation composite systems, ETICS for short, in which Betek Boya commanded about 30% of the market in Turkey at the time of acquisition. Above all, we inherited an outstanding and experienced management team with a positive track record of expanding the business. With Betek Boya and as part in leading the Turkey Group, we are now not only seeking to win in Turkey, we wanted the Turkey Group to be our regional base to expand into the Middle East, North Africa and Central Asia.
Let me turn to Alina. We acquired 75% of Alina in 2023 and got to work with a strong local partner, our 25% shareholder. Alina has the leading position in the dry mix motor market in Kazakhstan and a good presence in the paints and coatings market. The acquisition of Alina brought enhanced competence in a dry mix segment, which is a subset of the Construction Chemicals segments which we now see as a key adjacency to paint and coatings. Alina, together with Betek Boya are intended to be our springboard for expansion into Central Asia. In 2024, the Turkey Group achieved a top line revenue of USD 735 million and an operating profit margin of 15.6%.
2024 was the first year when Alina was consolidated with a full year performance. Betek Boya itself achieved strong growth since our acquisition in 2019 despite the hyperinflationary pressures in Turkey from 2022 when hyperinflationary accounting IAS 29 was first applied to 2024, '22 to '24, the top line revenue grew from JPY 71 billion to JPY 95 billion, a 35% increase over 2 years. Operating profit increased to JPY 13 billion. Of course, we will strive to do even better.
Our investors often wondered how Betek Boya fared in this turbulent inflationary environment. This slide shows the 2 paint brands of Betek Boya, which is Filli Boya and Fawori and how they fit against our competing brands in the market over the first 9 months of this year. These are all publicly available information as the competing brands in Turkey are all publicly listed companies. As you can see, while we did not record positive growth in net sales compared to the same period -- the same 9 months period last year, we fared significantly better than our main competitors based on this metric. We also achieved an increase in OP margin to 8.9% as compared to last year.
Our market share of the decorative paints market in Turkey, is expected to reach 36% in 2025, an increase of 1% from last year, but a massive improvement from the 25% when we acquired the company in 2019. Our share of the ETICS market in Turkey is projected to grow by an additional 3% to 50% this year from the 30% in 2019. Betek Boya sales by value is expected to grow 28%, while the decor market value in Turkey is only expected to grow by 21%, beating the market pace by 7%. And for ETICS market, the similar comparative number is the market growing at 24%, and we have grown by 31%. In addition, we have also grown our exports by some 11% in 2025. From this view, we believe that Betek Boya continues to make good hit ray despite the challenging market conditions in the country.
How we think we prevailed? This slide captures the competitive strengths that enable Betek Boya to continue to make good headway despite the headwinds. One, on the left-hand side of the picture, we have a robust multi-brand strategy across the market segments for decorative paints. With Nippon Paint occupying the premium paint segment, Filli Boya, the upper middle segment and Fawori, the economy to lower middle segments.
Two, if you look at the center part of the chart, the cost application costs is now constituting a larger and larger percentage of the overall cost vis-a-vis the product costs. We find more consumers moving up to the upper middle and premium segments over time, which is a very good development for us. And three, if you look at the right-hand side of the chart, our Filli Boya brand occupies top spots in perceived quality and as a trusted brand with a top of mind of 51% across both social economic groups and age groups in a survey done in 2024 by FutureBright which is the research agency in Turkey accredited to the Turkish Researchers Institute. We believe that the initial placement of Betek Boya within the Malaysia Plus Group has brought us a lot of advantages to both Betek Boya and the Turkey Group and the Malaysia Group has also learned from Betek Boya.
One of the things we've learned and achieved is the transfer of technical expertise both ways, but more importantly, Betek Boya has access to lower-cost raw materials and without these strengths, we believe we will not have prevailed and grown in the difficult operating conditions in Turkey. The strength of the Nippon Paint Group is clearly demonstrated against the stand-alone competitors in Turkey. These are some photographs to highlight key activities of the Turkey Group, including Alina this year. We continue to try harder. Having built the NIPSEA values and ethos, the Turkey Group continues to innovate, strengthen its brands, expand the business and drive market share growth.
I started my presentation by recapping and explaining our strategic rationale of acquiring Betek Boya and Alina. Our plans to expand across product lines and regional countries are still very much work in progress. In essence, our expansion plans have not been derailed significantly due to the challenges of hyperinflation in Turkey. As you can see, the growth story of the Turkey Group continues to unfold.
Thank you so much for your attention.
Thank you, Wee Siew. The next program is M&A strategy. So our speaker is Yuichiro Wakatsuki. Wakatsuki-san, please begin.
Okay. So hello again. Well, again, I would like to express my gratitude to you all for listening into our IR Day sessions. And here, I am happy to elaborate on our M&A strategy. We have been somewhat consistent in strategy since MSV maximization of shareholder value became our one and only mission back in 2018. But with some involvements as we have really endeavored to maximize the potential of our platform through our asset assembler model. Today, I would like to summarize where we stand, our strength and where we are heading towards the longer-term future.
Well, Page 2 gives the executive summary for today. Maybe I would like to stress 3 key points, and you probably have heard it already. First, our strategy to assemble good assets and drive growth both organically and inorganically remains unchanged and our aspiration to compound EPS in a safe and sound manner should prove effective in the long run. Our M&A aspiration may be split into 2 dimensions. One, whereby our partner companies aspire for growth through bolt-on M&As which would generally be in the nearby geography or business arena, usually effectuating real synergies. This is probably not so different from typical M&As you see, and we encourage our partners to look into those more aggressively compared to pretty Nippon Paint ownership days.
The other is the assembly of assets or build-out of pillars, which would be more stand-alone, more autonomy, but with the accountability, less reliance on synergies to justify our valuation and may be more sizable. Acquisition of DuluxGroup in 2019 and more recently, AOC this year would fall into this category. Bear in mind that our most recent decision to acquire our own stock is as stated, a pure financial decision with our stock price extremely low. One investor put to me as an ex M&A banker, wouldn't you recommend your client to buy Nippon Paint at this valuation without a premium and without due diligence. So in a sense, it is a slightly different form of EPS compounding and remains consistent with our overall strategy.
Number two, we started to publicly state asset assembler back in 2022, at which point in time, the intent was not to limit ourselves to just a paint assembler, but with a broader arena to acquire. Adjacencies we refer to then were more SAF, sealants, adhesives and fillers or construction chemicals. Well, I have to confess that given our share price trading at a premium, maybe 40 to 60x P/E around them, coupled with a significantly low cost of debt and with targets highly cash generative, our primary focus was really on EPS accretion and maybe less about ROIC as you can imagine, are real, not the theoretical cost of capital is very low.
Unfortunately, with our share valuation coming now on the back of slowdown in China and other macro issues, which implies a much higher cost of capital, we came to revisit our arena further. And in 2024 April midterm strategy briefing, we have stated no limits to our acquisition targets. This is a reflection of us redefining our strength as a buyer, not just reliant on low cost and funding, but other features, which I will talk about later. Still, we have also made clear that it should be low risk and good return, which means good assets, good management, less geopolitically sensitive, EPS accretion from year 1 at all. Acquisition of AOC is a reflection of such evolution, and we are happy to have such high-margin, cash-generative company with excellent management, be part of our group.
Going forward, we would most likely still keep our chemical head on as we see ample attractive opportunities in the space that there is less need to broaden our universe as of today. That said, are we regretting historical acquisitions at higher multiples? The answer is no. We have been acquiring very capital-efficient companies with good cash generation and all of them have been improving returns over the years. They have been making a lot of contribution to our group, including, but not limited to best practices. While the Selleys example later shown highlights some of those successful effects brought to our group which may not directly show in the individual ROIC numbers.
Number three, with that in mind, I would like to remind you that I am not on vacation for the pursuit of M&A. We have made some offers, which either were rejected or we declined thereafter recently post AOC acquisition. Whilst keeping in mind our strong deleveraging status, our Board of Directors continues to believe the pursuit of further attractive M&A is the right place to allocate capital in order to maximize the potential of our platform. We are also very mindful of the financial discipline to ensure the trust we obtained from financial institutions, they remain intact.
I always take the possibility of an equity offering only if and only when it is meaningfully EPS accretive post money. But you can imagine that we will be somewhat reluctant to issue shares under this level of valuation for our stock. Well, this does not mean that I cannot go beyond the, let's say, the 4x net debt to EBITDA at all. With the strong cash generation, I may still obtain comfort from our lending banks to go beyond the 4x and wait for the deleveraging to go through before the next acquisition thereafter. Well, but this is all predicated on the good acquisition opportunity. I always state M&A is only a means to an end and in of itself is not the objective. Well, the good news about our portfolio is that there is no must-do deal for us. This precludes the possibility of an overpay at the expense of shareholder value.
Well, the next Page 3. This is the full year version of what we have started to show in Q3. You can see that our asset assembler is working with the growth engines coming both from organic and inorganic activities. This would continue as we end year 2025 with another successful growth as we include the addition of AOC. We are here to say that we look to continuing and even accelerating our growth journey going forward through this very model.
Next page is a recap of our infinite growth model for Asset Assembler. Our advantage over many corporations around the world stems from, a, low-cost funding but not just that, our will to make use of such low-cost funding; B, or number two, our discipline to motivate and enhance the ability of our assets in EPS contribution; and C, three, our ability to attract world-class talent who empathize with our business model.
Next, I would like to touch upon our 2 pillars in M&A, one deriving from our partner companies, which we would call bolt-ons. But we are not limiting them to buy only in their arena, as management of our partners show their confidence for returns, we would encourage them to look beyond the traditional zone, noting that management resource in and of itself is limited, this encouraging them to look for high value-added ones, but only with reasonable valuations. Well, Mr. Goh Hup Jin, our Chairman; Wee Siew Kim, my partner, Co-President; and myself, all 3 of us sit on the Board of NIPSEA, DuluxGroup and AOC and for certain transaction size, requires Nippon Paint Holdings Board approval. Thus, our discipline will still be kept.
Then comes to the right-hand side where we talk about a larger asset assembly. Well, given our holding company only having 50 people, we are not here to do massive standardization and post-merger integration and I definitely do not want to build bureaucracy into our organization. Still one M&A takes a lot of effort to complete, a lot of due diligence, a lot of researching interviews, in which case, we would rather have a higher return on our resource investment, thereby size matters. Well, all in all, M&A has to serve our one and only mission, MSV. It not only has to be EPS accretive from year 1, it has to provide meaningful return on capital employed with good prospect for a sustainable contribution to Nippon Paint.
Here, we showcased the mindset change in our partner in DuluxGroup. They have been an excellent company from its ASX-listed companies days. And in the 9 years, they have completed 9 acquisitions. Well, since they joined Nippon Paint Group, a slightly more aggressive growth mindset has resulted in 24 acquisitions, including Cromology in EU in the last 6 years. It is quite important to note that the parent never forces them to buy. It is upon their conviction and will to acquire these with discipline. It is not what the holding company wants them to do, but what Dulux wants to do and why? And the question is how the parent can help. Needless to say, money is not free, and there are several cases where the DuluxGroup Board rejected the proposal. At the end of the day, it all has to make sense, and we are not afraid to have a healthy debate about it.
While this is a detailed chart, from here onwards, I would like to touch upon our excellent track record, to be frank, seemingly a bit underestimated and undervalued. I understand we are not yet at Danaher or a Berkshire Hathaway. And of course, M&A comes with certain risk. That said, we do invest in very easy to understand cash-generating assets that serves for MSV. Since 2019, we have continuously acquired companies as seen on the left-hand of the chart, number includes some of the smaller ones undisclosed.
A quick glance on the improvement post being part of our group on the right-hand side with good improvement in sales, OP and market share. Bottom right shows our growth in SAF, sealants, adhesive, fillers business within NIPSEA. The DuluxGroup acquisition accompany the Selleys business, which is an excellent non-paint business in the SAF arena. DuluxGroup had a stand-alone Asian business before our acquisition which were to be frank, not really making progress and eventually sold it to NIPSEA, which already had a scalable distribution. With the initial launch being successful, we have become more confident in this field, leading to the acquisition of Vital Technical in Malaysia in 2021. This area has shown significant growth which stems from the partner companies talking to each other and making sense as opposed to the holding company instructing to do this in that. Well, this highlights the power of our group with very strong growth mindset and talent.
Page 8, here, we display our ROIC inclusive and exclusive of goodwill and intangibles. Yes, we pay for the goodwill, so may not be able to emit this totally. Still, this chart shows you that each assets are improving year-on-year, well, maybe with the exception of Cromology. Also noting that exclusive of goodwill and intangibles, these provide very high return on tangible assets, which indicate a very asset-light model. We have disclosed the ROIC on a local currency basis, while noting that the funding are all Japanese yen-based without hedging. So we believe the yen-based returns are similarly important.
Page 9 refers to our EPS compounding journey through Asset Assembly. Well, when we first showed this, some people got misguided by the dark blue which is existing business since 2018 and it being lower in 2021 and '22 compared to the previous years. You need to know that this is all EPS, and you have to take into account the 46% increase in share count in 2021. We and the addition of the 49% of NIPSEA business as in the light blue color, altogether, which have shown significant growth over the years. We have made a high level estimate of adjusted EPS guidance in 2025 to be JPY 74.1 adjusting to the EPS guidance of JPY 69 non-adjusted, effectuating a 15.3% CAGR since 2018. I have to stress that I am not sure there are many companies that have delivered this level of consistent and stable growth under such volatile and uncertain times.
Let me turn to capital allocation. Coupled with our stronger focus on cash conversion across our partner companies recently, we believe a deleveraging of 0.6 to 0.8 turns to EBITDA per annum is doable, which implies we are ready for the next one. One banker told me that the chart on the left side, which was shown in the past, could imply that I am either busy working on PMI or on vacation, and the next one is way ahead, thereby my initial comment, I'm not a vacation. Very important point is that we only buy companies that require minimum post-merger integration PMI. AOC is already in good shape under our umbrella. Just to be clear, the chart was meant to show our readiness for the next one. Also note that we are in the process of finalizing permanent financing for the bridge, we borrowed upon the closing of AOC acquisition earlier this year. Indicative duration post such completion is around 4.8 years in total duration with average interest rate at 1.3% pretax.
Right-hand side is a repetition of what has been shown and also stated. There is no change in dividend policy. Buyback is not the primary use of capital. we will continuously look for M&A opportunities and the allocation of capital towards M&A.
I wanted to supplement the high cash conversion of our asset base. As a holding company, I have very limited concerns on the day-to-day cash operation of our assets as they are so much cash generative. We are putting a further emphasis on the cash conversion cycle. Well, my job is not to be annoyed for the redistribution of capital for normal operations. Organically, they can grow without any capital injection. It is pretty much all about M&A that requires additional capital at our partner companies or at a holding level, which we examine carefully with discipline.
Page 12 is an illustration of our mid- to long-term growth. Organically, we would look for a 10-plus percent growth on EPS. This is unchanged. Inorganically, we want to meaningfully add to such growth by reinvesting the capital for good and sizable companies. We see our way to achieving JPY 100, JPY 200 and even JPY 300 EPS in the long run if we execute right. I believe the key is to obtain conviction from our investors about the certainty of this organic and inorganic capabilities, which I understand is difficult to model. I hope I can continue to show a meaningfully successful track record going forward as we have done in the past.
I would like to conclude my presentation here with our usual statement of continued commitment towards MSV. We are very proud of being a unique company that have the strong will towards unlocking our full potential through the assembly of assets back with a very vigilant mindset and always keeping the option to say no to opportunities that do not serve for MSV. Well, thank you very much for listening.
This concludes Nippon Paint Holdings IR Day 2025. Thank you very much for taking the time to join us today. So you may now disconnect from the session. Thank you very much.
Thank you.
Thank you.
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Nippon Paint Holdings Co — Analyst/Investor Day - Nippon Paint Holdings Co., Ltd.
Nippon Paint Holdings Co — Analyst/Investor Day - Nippon Paint Holdings Co., Ltd.
📣 Kernbotschaft
- Kernaussage: IR Day 2025 bestätigt das „Asset‑assembler“-Modell: Kombination aus markengetriebenem dekorativem Geschäft, profitabler regionaler Expansion (China, Türkei) und gezielten Zukäufen (AOC) zur EPS‑Steigerung. Fokus liegt auf Cash‑Conversion, Margenpflege in China und diszipliniertem M&A‑Einsatz.
🎯 Strategische Highlights
- AOC‑Position: AOC als hochmargiger Formulierer (≈70% Umsatz Nordamerika; ≈70% SKUs kundenspezifisch), Ziel: mittlere einstellige organische Wachstumsrate mittelfristig und europaweite Bolt‑ons.
- China‑Prioritäten: NIPSEA China steuert auf profitables Wachstum: TUC (Endverbraucher) mit Color/Texture‑Strategie, Ausbau Tier‑3–6 via Asset‑light‑Partner und 2.000+ Community‑Stores‑Ziel für 2026; TUB (B2B) Pivot zu MRO und non‑residential Sektoren.
- Türkei & Alina: Turkey Group 2024: Umsatz USD 735 Mio, OP‑Marge 15.6%; Betek Marktanteil Dekor erwartet 36% in 2025, ETICS‑Anteil ~50% — Plattform für ME/NA/CA‑Expansion.
🔭 Neue Informationen
- China‑Zahlen: 2025‑Schätzung: adressierbarer TUC‑Markt −5%, TUC‑Umsatz −1%, TUB‑Umsatz −20%; Ziel 2026: TUC hohes einstelliger Wachstum, TUB stabilisiert.
- Guidance & Finanzen: Adjusted EPS‑Leitwert 2025 JPY 74.1 (ungeadjustet JPY 69). AOC‑Bridge‑Finanzierung in Finalisierung: Laufzeit ≈4.8 Jahre, Ø Zins ≈1.3% vor Steuern.
- M&A‑Disziplin: Weiterhin nur EPS‑akkretive Deals ab Jahr 1; Bereitschaft zu höherer Verschuldung temporär, aber klar limitierter Integrationsaufwand (minimales PMI).
⚡ Bottom Line
- Fazit für Anleger: Klare, konsistente Story: Markenstärke + lokale Betriebsdisziplin + selektive Zukäufe sollen langfristig EPS und Cashflow treiben. Kurzfristiges Risiko bleibt in China‑Nachfrage und Integrations‑/Bewertungsfragen bei M&A; mittelfristig bietet AOC‐Deal zusätzliche Margenstabilität und Diversifikation.
Nippon Paint Holdings Co — Q3 2025 Earnings Call
1. Management Discussion
Thank you very much for waiting. We would now like to start Nippon Paint Holdings conference call on FY 2025 Q3 financial results. We have some housekeeping announcements before we start. [Operator Instructions] This conference call has Japanese-English simultaneous interpretation.
Wakatsuki-san, Tanaka-san, over to you.
Thank you very much. Good afternoon, ladies and gentlemen. I am Wakatsuki, Co-President of Nippon Paint Holdings. Thank you very much for taking the time to join us today despite your busy schedules. I would now like to explain the outline of our FY 2025 Q3 financial results.
First, please turn to Page 2. Let me briefly explain the changes we've made to our disclosure starting this quarter. Regarding the background, as you know, I have held numerous meetings with investors and received various feedback directly and indirectly. And many investors, especially overseas institutional investors comparing us to peers, said that while many overseas issuers publish adjusted figures, excluding various adjustment items for comparison, Nippon Paint's detailed disclosures are good, but often difficult to grasp at a glance. Some feedback also noted that the sheer volume of figures made it difficult to convey even very strong earnings results at first glance.
In response to these comments and with the primary goal of ensuring a correct understanding of our capabilities and proper peer comparison with our overseas competitors, we have now decided to proactively disclose adjusted profits. This is outlined in the upper section of the summary on Page 2. We also decided to change the terminology for growth rates and similar figures to align with industry standards like LSD, MSD and high -- HSD, low, mid- and high single digits and separate them into price mix and volume components in our disclosure. We will continue to disclose information under this policy for the time being, and we'll continue to listen to your constructive feedback to make further upgrades as necessary. Thank you for your continued support.
Next, Pages 3 and 4 are new additions. To help you understand our track record correctly through the long-term trends in our P&L, Page 3 shows the historical trend of Q3 revenue, adjusted operating profit and adjusted EPS since the adoption of IFRS in 2018 and the change to a Board composition with MSD as its mission.
Page 4 shows the trend in profit contributions from organic and inorganic growth. We believe this clearly demonstrates our strong growth track record and growth both organically and inorganically at a glance. We also plan to continue disclosing this information going forward. Particularly on Page 4, while organic profit declined temporarily in 2021 due to COVID-19 and rising raw material costs, it recovered significantly in 2022, minus 34.7% to 83.9%. This clearly demonstrates the robust resilience of our earnings power.
Next, Page 5, please, Q3 overview. Both revenue and operating profit continued to set new records with revenue increasing by 19% non-GAAP basis. China trading accounting change is included, and adjusted operating profit and EPS both growing by over 40%.
Regarding FX rates, the yen has strengthened overall compared to last year. For example, yen strengthened to JPY 147.8 against the U.S. dollar this year, from JPY 151.6 in Q3 FY 2024. JPY 20.5 against Chinese yuan this year versus JPY 21.1 last year. And JPY 94.5 against the Australian dollar this year versus JPY 100.5 last year. Despite these factors, we achieved substantial growth in both revenue and profit. Operating profit saw a solid contribution from organic growth, plus 8.7% and inorganic growth, 33.8%, with margins improving by approximately 3 percentage points.
Regionally, AOC continues to contribute strongly to earnings. The U.S. market is showing signs of bottoming out with declining interest rates, which is a positive development. In China, we achieved profit growth by avoiding aggressive sales expansion and firmly securing margins despite the persisting challenging business environment. In NIPSEA, except China, both volume and price/mix improved overall.
Next, Page 6, please. The outlook for FY 2025 remains unchanged, with revenue expected to reach a new record high. Regarding Q4, while demand is slowing in many regions, organic growth is still positive, but our currency FX outlook anticipates a stronger yen year-on-year. If the current weak yen persists, there could be some upside potential. But for the full year, it falls slightly short of our guidance of [indiscernible]. Operating profit, on the other hand, is expected to largely achieve the guidance on the pre-adjusted basis of JPY 244 billion.
Page 7. No specific comments on the heat map. Overall market conditions were flat in Q3, except for slightly favorable conditions in China's automotive sector, where we gained market share. The AOC segment shows some signs of bottoming out. So we anticipate nearly flat market conditions for Q4.
Next, turning to Page 8. Here, we outlined the situation of our major segments. Although I will leave the details for the Q&A, let me briefly comment on each region. First, for the Japan segment, basically, market conditions and volume remain challenging, but we are offsetting this with a favorable price mix, and we're achieving profit growth.
Regarding NIPSEA China, TUC's revenue is up by 1% despite challenging market conditions, and we secured sufficient profits. In TUC specifically, it experienced the situation of volume down by LSD, and price and mix up by LSD. Automotive sales grew by 7.9%, driven by increased production volumes and strong sales to Chinese manufacturers. The adjusted operating margin rose by 2.3 percentage points year-on-year, compensating for the revenue decline with margin expansion securing profit growth.
NIPSEA, except China, had growth in revenue and profit. Indonesia saw volume growth by mid-single digit, though currency had a negative impact. Turkey achieved double-digit growth in both volume and price. This adjustment attempts to incorporate the impact of applying IAS 29, the super-inflationary accounting -- hyperinflationary accounting.
In DGL Pacific, revenue increased despite largely flat market conditions, driven by continued volume and mix improvements [indiscernible] for the impact of yen appreciation. Meanwhile, in Europe, while the French market remained challenging, revenue grew, thanks to contributions from Southern Europe and JUB's business expansion. The stronger euro also provided a positive currency effect.
[Audio Gap]
thorough deliberation at the September Board meeting in its strategic session. Inclusive of the change in the disclosure method, we intend to continue constructive dialogue with all market participants going forward, and we appreciate your continued support.
Secondly, following the completion of the Tokyo Innovation Center in Shinagawa, we conducted a tour for investors. This included presentations from the CTO of Japan and NIPSEA, along with a Q&A session. And we were pleased to welcome participation from many investors and analysts. We'd like to express our sincere gratitude once again to all who attended.
Thirdly, turning to Page 10. This is the third major topic. We plan to hold an IR Day on November 26. This time, the event will feature a presentation from AOC. So it has been scheduled for the morning in Japan. Both co-presidents will also be speaking. So we are looking forward to seeing you there.
This concludes my brief presentation. And now I take questions from the audience. Thank you for your kind attention.
[Operator Instructions] First, from the Japanese channel. First questioner is Goldman Sachs Securities, Ikeda-san.
2. Question Answer
Ikeda from Goldman Sachs. So overall, the environment remains challenging in Q3, but operating profit progress is strong. So overall, I think you are seeing a good progress. By region, are there variabilities, differences? And the focus in the market, the TUC in China dropped in Q2. But in Q3, it has turned around and now picking up in Q3. Premium products are strong. So in the challenging China environment, what is working well? Is there a sign of improvement in the sentiment locally? So if you could particularly focus on the recovery in China, please?
Thank you very much. So overall, in China -- I will answer those two points. Overall, this is my honest feeling, the market is not good by any means. So as a macro economy, including the U.S., the interest rate decline is finally coming within sight, but we cannot expect a V-shaped recovery. Under such circumstances, in each region, we are trying to secure margin and market share. And in Australia, we are growing despite the tough environment in terms of volume and value.
Of course, there are differences among markets. In Australia, with the declining interest rate, the market may turn around and start picking up. But we cannot be optimistic. In Turkey, in Q3, we had a large campaign. And as I mentioned in the past, Nippon Paint, we have a strong capital -- Nippon Paint as a background. And so the sales promotion campaign is going well. Volume, of course, price in Q3, outperformed our expectation. So overall, FX, yen is a bit strong. So even including that, as you rightly said, we think we performed fairly well.
Next, on China. So how we look at 1% is one thing, but the market, Q2 was minus 5% to minus 10% -- it was minus 11%. So we could not be proud of that. But as I mentioned back then, we tightened our credit control and also made our inventory management more stringent. So in addition to the market environment, we tried to ensure our discipline.
How about Q3? We continue our tight credit control. As I've mentioned in the past, we -- the practice is to have everything paid by the end of the year by the distributors. And so we are stopping the sales if need be in some cases. So we are vigilant and being cautious here.
So there are some impacts on Q3, but the market is basically flat. So we're not winning big, but of course, we're not losing either, and premium is going very well. Price is generally declining, but the mix is improving. So margin is improving as well. So this is where we are. So from various perspectives, 1%.
In the current market environment, we are achieving market with the healthy business management. We're not pushing ourselves too much and achieving this result. And so we're securing profit.
So of course, from my standpoint, I never get satisfied, but I think we took the right steps. So I think I answered your questions.
So premium market is now being launched? Or the urban demand due to the tariff sectors had some purchase restraint is now coming back? Or are your products particularly doing well? What are the factors?
To be honest with you, the market is -- in Tier 0, 1, 2 and 3 to 6, the market is not good. So it's not that the urban areas are recovering. It's more our promotion bearing results, including some price reduction is being accepted well. And premium is selling well. And the premium has higher margin. And therefore, we are securing margin profit well.
The recovery of the market itself is not obvious. We cannot see a clear recovery in the market yet. Of course, we look at our competitors' numbers. But in our competition, the base is different. We have larger scale. And so the view that we have of our market from our standpoint is that the market is difficult. And so we're taking steps accordingly.
The next question is from SMBC Nikko Securities. Shintani-san, please go ahead with your question.
My name is Shintani. I have a question about AOC. So in Q3 and Q4, what is the situation going to be? And what's the outlook for the next fiscal year? So you mentioned the interest rate decline in the U.S., but it remains high, and I assume that you've been in a difficult market condition. But can you give us some more color on that?
So I think there is going to be more demand for pent-up. So how are you expecting such opportunity for the next fiscal year? And if that materializes, when we think about AOC's products, what is going to be the timeline for them to make tangible contribution?
So once again, the American market condition is not necessarily strong. So the volume is down by mid-single digit. On a year-on-year basis, it is negative. However, as you can see, we have been able to secure sufficient margin. In that sense, we can say that this is a resilient business and also they are being able to differentiate themselves in the market. It continues to be that way.
And in terms of concerns, as you said, the interest rate decline. As the authority, we believe that some people say they are being more cautious than it was expected. So unless we see a clear trend of interest rate decline, I believe it does not become a strong tailwind. But as the overall trend, we need to address inflation. And also, there is the revitalization of economy. And when that materializes, we will be able to see more pent-up demand.
And I believe it is too early to talk about the next fiscal year. In February, of course, we are hoping to give a guidance. But in terms of its long-term trend in the U.S., infrastructure-related spending is necessary. It continues to be important for our business. And the U.S. economy continues to be somewhat strong. And in the longer run, as announced in last October, we believe that we'll be able to grow in high single digit.
But if you ask if that will be realized in FY '26, our answer is that we do not have that visibility at the moment. So I'd like to reserve any further comments as of today. But in terms of infrastructure and housing-related demands, we have broad applications, and that is the strength of AOC. So we believe there is room left for further development.
And in Europe, the market condition is also not good. They have much more exposure to the U.S., but penetration of their business system in Europe, if that makes progress next fiscal year, as we've been saying, we believe that there is room for further growth there. That's all.
As a follow-up, so of course, you don't have a crystal ball for the market condition next year, but you said that you are being able to keep the margin as well as the market share. So given the difficult market conditions, what is it about AOC that the market is appreciating so much? It sounded like they're gaining share. So what is the situation? And about the expected margin improvement in Europe, do you have any expectation or visibility into that?
On the second point, well, we don't necessarily say that they're gaining share, but they are keeping the share. The market is down. So we are down as well, and we're not losing the share. I believe that is the correct way to interpret the current situation.
And just like in China, by doing sales expansion, sacrificing profits going after share, that is not the best solution in the current situation. And the AOC's strength is in -- it's a custom product. So they are offering added value. And it's important that they are capable of developing products that can gain understanding from the customers from the development phase. And they have a large proportion of custom products as introduced. So this is difficult to be lost, but we also cannot say that it won't be lost. We want to avoid making any confusion in the field. But in many different ways, I believe they are being able to offer added value in the non-general purpose or decorative areas.
And regarding Europe, so they have 70% exposure to the U.S., and they have slightly higher margin in the U.S. as well. So this business system needs to be better penetrated. But this business system is all about custom-made products, not general purpose. That needs to be further promoted and penetrated.
New product development is one measure. They will be taking a multifaceted approach. The CEO is also saying that there is room for improvement in Europe, also because of the characteristics of the market. So we have to wait for further developments. And everyone asks when it will happen, and we just need to ask you to wait. If we have any updates, we will share them with you.
Understood. That was very clear.
Just one more thing regarding AOC. So it's good that they have high margin. But as I said earlier, the sales and EBITDA -- well, the unit price fluctuates pretty rapidly. So we are not only looking at margin as an indicator. But of course, if it's higher, it's better. So in next year, we will be able to do a better year-on-year comparison.
Next is BofA Securities. Enomoto-san, please.
This is Enomoto-san from BofA Securities. So the share repurchase is my question. If I understand correctly, you have always said you will not do share buyback. But this time, you changed that. What led to this change? Change of your feeling or policy? And how did you come up with this size, the amount? And the most important point is about the retirement -- the cancellation of the repurchased stock -- treasury stock.
I never said I will never do it. I said, M&A rather than buyback, and this policy remains unchanged. So value creation through M&A is our long-term strategy, the core of our long-term strategy, Asset Assembler strategy. This model remains unchanged. But because the share price is so low, one investor said, "If you are an ex-banker, why is this high-performing good company is on sale for -- without premium? Don't you want to buy it?" And I thought, yes, I do. So it is like a pure financial investment. It's a pure financial decision.
Given our future EPS growth, if we can buy this current PER, I would like to go ahead and do it. So that is the reason. The trigger is a low share price, and the earnings is solid. But unfortunately, it deteriorated temporarily. And so as the usage of cash, we thought this is a viable option.
Now the size of our share buyback. Our leverage is quite at a level, and so the Japanese financial institutions trust our safe, trusting financial management and lending us at a low rate. So it is not a big policy change. As a financial decision and along with the deleveraging efforts and for future M&A potential, we thought that this JPY 30 billion hits the right balance. There is no deep science behind this. Why not JPY 35 billion, not JPY 40 billion, but JPY 30 billion? Because we thought of this and the future opportunity and with the size that has a certain level of impact, and that is why we came to this decision.
And next, the cancellation, retirement on purchase. We do not plan to retire our treasury shares because -- I've said this a few times, I do not deny equity finance. So if EPS, it rises sufficiently, if there is an M&A that raises the EPS and ensures leverage stability, we may use our share for that purpose.
So if we cancel our shares, the share issuance and the release of the share, there is no difference in the procedure, but the license is different, registration license. Until we decide that we do not do equity finance, we will keep on -- hold on to it. So this is the difference of around hundreds of millions of yen, the license tax.
So no change in your dividend policy and share swap, is what you are trying to mean?
It's not just share exchange -- share swap, new share issuance. There is a capital increase. From common sense, mostly cash, debt and some equity is our model. So share exchange, to do this equity versus equity, our PER, if it's 50x, I do it. But otherwise, it doesn't make much sense. So of course, it will be a mixture. So it's not limited to share exchange. Rather, some other means is more appropriate, we think.
And dividend policy?
Yes, dividend. No change in dividend policy. Basically, we raised our dividend a little by little every year. So payout ratio is our policy. We will hit the right balance between M&A, deleveraging and the next M&A to create our value. This value creation is better than the short-term dividend. So this is consistent with what I've always said. And so nothing changes with the share buyback this time.
Next question is from Mizuho Securities from Yoshida-san.
This is Yoshida from Mizuho Securities. So I'd like to ask about the situation in Q3 and Q4. So you haven't changed the JPY 244 billion OP outlook for the full year, that means there will be a decline by about JPY 13 billion. And according to your presentation, you said that you're confident in achieving this full year target of JPY 240 billion. So from Q3 to Q4, what is the Q-on-Q negative factor? Is that China as always? And I think there is PPA of AOC. So from Q3 to Q4, how should we think about the change in the level?
Yes, Yoshida-san, as I've been saying, I hope that you don't look at our business on quarter-on-quarter business. So on a year-on-year basis, it is positive, as you can see on Page 6 on the right side. And as you pointed out, the adjusted -- no, in terms of OP before adjustment, there is PPA cost, which is temporary. And also, there is inventory step-up in AOC, which amounts to JPY 9 billion approximately. But these are not fixed. So we are not sure yet, but we haven't changed these assumptions so far.
And other than that, in Q4, on the contrary, so we will no longer have adjusted OP. But there is a sale of the land in Shinagawa, which is going to be a positive factor at around JPY 7 billion. Other than that, in last year, for the 2 months of Q4, we included India. Up to Q3, India was not included. But in Q4, we will have 2 months' worth of the India business, and we will have full contribution from AOC.
Because of all these factors, so JPY 46.5 billion is the previous year's OP, and we are expecting to go up by 20%. And so there is a strong increase year-on-year, and the margin is also slightly above as suggested, even when accounting -- taking into account all these fluctuating factors.
And on the right side, I hope you can also pay attention to these assumptions that we are assuming strong yen. In last year's Q4, it was moderately strong, and the exchange rate today is almost in line with the last year's. So we can expect a slight uplift. There are negative and positive factors, but in Q4, in general, we are confident that we can grow.
So in your speech earlier, so regarding AOC, I think you suggested that you're expecting steady growth. But are you excluding seasonality factors?
No, well...
So Q4 will have steady growth. Are you saying that it will be flat year-on-year?
Well, I didn't say that exactly. I'm just saying that there is a sign of steady growth. The situation is different from sales and volume. In terms of volume, it seems that we are bottoming out. But in December, to be honest, it is not a strong demand month, and we have Thanksgiving in the U.S. in November. So there will be ups and downs to a certain extent. So we're not being too optimistic. But we believe that we are seeing signs of bottoming out from the downward trend that we've been seeing, and that is a discussion happening in the AOC Board. That's what I shared.
Understood.
Yoshida-san, again, please don't analyze the business on a quarter-on-quarter basis, please.
I understand.
And just to be sure, I'd like to say something to Enomoto-san. It's not that we want to issue shares, and we are not going to do that if the current situation continues, but -- I'm repeating myself. But in the future, when the share price becomes more decent, and if we believe that we'll be able to achieve sufficient EPS after issuing shares by doing debt financing in some M&A opportunity, we may choose to do that. So if you ask us if we are not going to cancel the shares, I believe I had to answer it that way so that we can save the necessary expense for that licensing. That's it.
Next, Citigroup Securities, Nishiyama-san.
Nishiyama from Citigroup Securities. TUC China is my question. So this time, volume is negative low single digit. If I did not hear you wrong, you are making stringent on the credit loss. So this negative single -- low single digit, what is the breakdown? So is this a proactive impact from more stringent credit loss provision in the market situation? What is the breakdown of the factors? In local cities, SKSHU is now being aggressive, but it seems like top line growth is a bit weak. So if you could update me on that as well.
In Q2, credit enhancement, we do not have a breakdown in Q2. And this time, we will not do that either again. In Q2, I said, TUC distributors, there were not much, but a large distributor, the receivable is becoming rather long. And so we said until they pay, there will be some limitations applied on the wholesale side.
Q3, large distributors did not see an increase. It's rather decreasing. But the smaller distributors are showing an increase. So overall, the distributors receivables extension did not happen until last year. But towards the year-end, we collect our receivables. Our policy remains unchanged. So under that discipline, we still have some remaining in Q3. So the reasons are Q2 and Q3, it had a similar negative impact.
Next comparison with SKSHU. As I've mentioned a few times, the base is different. The size is quite different between us and them. And SKSHU, their earnings is rising, but they're still lower than us. And we do not disclose, but TUC, TUV and industrial and automotive included, we have 15%. TUC is higher than that. You can sufficiently think that TUC is higher. So there are smaller segments that we are not watching closely. And there are quite a few in Q3, we had some that we could not capture fully. And how to address them is a high priority for the China team.
And one more is, we have this service. We were a pioneer, but this similar service is offered at a lower cost by our peers in Tier 3, Tier 6 cities. The profitability there is unknown, but the service were lower segment. Should we just not do it? Or we have to think more about that? But as I mentioned over and over, the overall revenue sales volume is much bigger for us. So without that big picture, looking at the quarter-by-quarter ups and downs, will be misleading. It is not that material. Rather, the smaller local players share, I think they're getting share from local -- small local players. So it's not that we are losing out.
One on credit control, if you could follow up. So Q2, Q3, you said you did a similar magnitude, and Y-o-Y growth is improving. Towards Q4, you will continue this or not?
So just to avoid misunderstanding, we're not doing credit control on a campaign basis. In our day-to-day business relation, if there are some longer receivable collection, we are continuing our traditional policy. We've always had this policy. But in the past, the payment period extension did not stand out. But in Q2, Q3, with the declining market situation, there are some where we cannot collect the receivables quick enough. And we have this overarching policy of collecting the receivables by year-end. And we cannot go against that. So it's not that we are suddenly starting this from tomorrow. I hope you could understand.
On that basis, for Q4, the demand will decline. So we will focus -- we may focus on collection more. So ideally, by the end of Q4, we can pretty much clear this receivables. And there may be some opportunity loss, but overall, the market factor is a bigger factor. So what is the market circumstances? It's not good. It's not bad. So as you see in the heat map, Q4 outlook, the TUC is green. So we think it is flat.
Next question is from Nomura Securities, Okazaki-san.
This is Okazaki from Nomura Securities. So I haven't been able to attend from the beginning. So I apologize if this has already been covered. But in China TUC market -- it's quite specific. But in the heat map, 3 months ago, it was on the second from the bottom, but now it's in the green. So I think this is based on the previous year results, but do you have an impression that you have better visibility now?
And I'd like to confirm Q3 TUC sales is down by single digit, but the premium zone mix is up. So overall, it is a plus. Is that the right way to understand?
Yes, that is correct. As I've been saying, overall, in Q2, year-on-year, the market is minus 5% to minus 10%. But this time, it is almost flat.
In FY '24 Q2 or Q3, we need to look at their situation as well. But in Q2 FY '24, it is almost flat. In Q2 FY '25, it is down, and then it is flattish in Q3, both for FY '24 and '25. So there are ups and downs. But we -- it is hard to say that the sentiment is improving just by looking at this.
In that sense, compared to the previous year, the market environment in the June and the September quarter, it has not changed. Is that what you're suggesting?
Well, it is light blue, right, the market.
But that's year-on-year, right?
Yes, it's year-on-year.
So it depends on the situation a year ago, right?
Yes. So as I said a year ago, it was flat. Q2 FY '24 was flattish. Q3 was flattish as well. And in FY '25, Q2 was down, minus 5% to 10%. And Q3 was flattish. So compared to Q2, it improved. But it is hard to say that there is significant improvement from -- on quarter-on-quarter basis, we can at least say that it wasn't as bad as Q2.
So in terms of future outlook, are you expecting things to be flat?
Yes, from flattish to slightly positive.
I'm sorry. Well, to be honest, the Chinese market, as I've been saying from the beginning, is not strong. But we have been able to develop premium opportunities, and we've been able to secure margin. So given the current environment, we have been focusing on how we can balance out.
I apologize for the dumb question.
No, no, that's not a dumb question. But I hope you can attend from the beginning from the next time.
Next, CLSA Securities. Joe Sun, please.
Joe Sun from CLSA Securities. On Page 31, I have a question. In the Americas, AOC comparison, the Americas demand and margin in Q3 was not so good. And July, September quarter was not so good in NA, North America. But in AOC, Q2, Q3, margin did not change much. The revenue was basically flat. So my feeling is, the Americas and AOC final demand is mostly for decorative. And so I think they are linked. So what is the background that led to this top line movement and margin movement? So if you could elaborate?
So Page 31, this is cumulative. Yes. I saw other -- so in Q3 '22, '23, the Americas, automotive and decorative. So we have both. We do not disclose individually. But for decorative, basically, it's family repaint, that is the main battlefield. California, Nevada, Arizona are the main place. It's a premium brand. And as I said earlier, long-term interest rate is rising, meaning mortgage rate is rising. So moving -- this is negative to the moving -- changing houses.
On the other hand, AOC is decorative in a broad sense. And there is repainting but also infrastructure spending as well. So it is not impacted as much in terms of margin. But in Q3, mid-single-digit volume down on a year-on-year basis, U.S. challenging environment is coming out. And so we have the brand strength. But because it's done on an individual office basis, the fixed cost is high in the Americas. AOC is not the store branch operation. It's more B2B. So the fixed cost is controlled tightly. That is why the margin can be maintained even when volume goes down.
One quick follow-up is, so now the oil price -- crude oil price is declining. Is that a positive factor for AOC?
Well, this is, in general, for raw material. Raw material is declining. So it's, of course, a positive factor for us. But what we need to be careful of is how our competitors will move. We do not all move in one direction. In the U.S., Sherwin-Williams, they announced a big price rise. So if it's -- dominant like them, they have the good foundation to be able to raise their prices. We will raise price, but the scale of the price raise will be up to discussion.
Now in terms of cost, cost will come down. So how we balance them out is the basics of our business management. So we want to take dynamic measures. It's not that me, I will take measures. The local side will work hard to generate profit.
Next question is from UBS Securities. Omura-san, please.
This is Omura from UBS. Can you hear me?
Yes, Omura-san.
So given the time constraints, I'd like to quickly ask about China. So you've mentioned credit control continuing from Q2. So going forward, what should we expect for such customers? If credit improves, when will it happen? And based on your past experience, what needs to happen for you to be able to recover sales to such customers? So in the next 1 or 2 years, how should we expect?
Yes. Well, generally speaking, when the funds start to flow, there will be no delay in collecting receivables. So one of the causes is the poor market condition, resulting in low turnover in distributors, and delay in payment. So if the market condition improves, these things will automatically improve as well. And in the past, this was never actually brought up, suggesting that it was never a big issue. This also means that because of the current difficult market condition, we are having a slower turnover. So the best scenario is for the market condition to improve, and funds start to flow, and we can collect receivables.
So it is not that this is happening only with certain distributors. In Q2, we had this issue with some larger distributors. But as I've been saying, for distributors, basically, we've been doing credit control by using cash payment to settle everything by the end of the year, resulting in an improvement of the cash flow in Q4. So that is what -- why I have been making these comments. And this is one of the causes for the lower revenue.
I understand. Just to clarify, is it correct to assume that this kind of issue never happened? Because I was actually assuming that it did happen in the past.
Well, basically, in TUC, it wasn't zero, but it was not really noticeable. Of course, we need to do this strategically going forward. So it depends on the distributor. Maybe I'll cause misunderstanding if I say this officially, but it really depends on the counterpart. At the end of the day, it is important for us that we can safely collect receivables. And that decision would change depending on the economic strength. So we do not have any uniform operation, but with discipline, we are being flexible in adapting to the situation.
In the past, we did face similar challenges. But as I said previously, for TUB, we do have a longer-term receivables that have a different nature.
Since time has come, we will end the Q&A session. Wakatsuki-san, please.
Well, thank you very much until late in the evening. So this time, we changed the way we disclose. We want to convey an understandable story to the investors. So if you could look at the Page 3, CAGR from '18 is 16.4%. EPS CAGR is 17.6%. So this great growth is shown by our company. We don't think any other company can really do this. So we will work hard to continue this momentum. And that is why we decided to disclose this way.
Thank you very much again, and I ask you for your support.
Thank you. With that, we will close Nippon Paint Holdings conference call on FY 2025 Q3 financial results. Thank you very much for your attendance today. Please discontinue your telephone.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]
Transkripte auf Deutsch freischalten
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Nippon Paint Holdings Co — Q3 2025 Earnings Call
Nippon Paint Holdings Co — Q3 2025 Earnings Call
📊 Quartal auf einen Blick
- Umsatz: +19% (non‑GAAP, neue angegebene Kennzahl)
- Adjusted OP: >+40% YoY (operatives Ergebnis, bereinigt um Einmaleffekte)
- EPS: >+40% (Ergebnis je Aktie, bereinigt)
- Margen: Verbesserung um ~3 Prozentpunkte; organisches OP‑Wachstum +8.7%, inorganisch +33.8%
- Regionen: AOC trägt stark, China leicht positiv (+1% Revenue TUC) trotz schwieriger Nachfrage
🎯 Was das Management sagt
- Disclosure‑Änderung: Einführung von expliziten "adjusted" Kennzahlen und standardisierter Wachstums‑Terminologie (LSD/MSD/HSD) für bessere Peer‑Vergleichbarkeit
- Fokus Marge vor Volumen: China: striktes Kredit‑ und Bestandsmanagement, Premium‑Mix statt aggressive Marktanteilskämpfe
- Kapitalallokation: M&A bleibt Kernstrategie; zugleich einmalige Share‑Buyback‑Maßnahme von JPY30 Mrd wegen niedriger Bewertung, Aktien werden nicht sofort annulliert
🔭 Ausblick & Guidance
- Jahresausblick: Unverändert, Umsatz auf Rekordniveau erwartet; operatives Ergebnis (vor Bereinigungen) rund JPY244 Mrd
- Q4‑Risiken: Nachfrageträgheit in vielen Märkten und starker Yen können Guidance leicht drücken; positives Upside durch Landverkauf (~JPY7 Mrd) und volle AOC‑Beiträge
❓ Fragen der Analysten
- China: Analysten fragten nach Treibern der leichten Erholung; Management betont strenge Kreditkontrolle, Premium‑Mix und disziplinierte Vertriebspolitik
- AOC/USA & Europa: Nachfrage in den USA bodenständig, AOC hält Margen durch Custom‑Produkte; Wachstum in Europa abhängig von Sondierung der US‑orientierten Geschäftsmodelle
- Share Buyback: Nachfrage nach Motivation und Kündigungspolitik; Management nennt niedrige Bewertung als Trigger, behält Aktien für mögliche zukünftige Equity‑Finanzierungen
⚡ Bottom Line
- Fazit: Solide Q3‑Performance mit starken bereinigten Gewinnzahlen; Management zeigt disziplin bei Margen und Liquidität. Buyback stützt Bewertung, M&A‑Priorität bleibt bestehen. Kurzfristig begrenzen Yen‑Stärke und gedämpfte Nachfrage das Aufwärtspotenzial.
Finanzdaten von Nippon Paint Holdings Co
Umsatz
Der Umsatz stellt die Summe aller Einnahmen eines Unternehmens z. B. für dessen Produkte oder Dienstleistungen dar.
Umsatz (TTM) einfach erklärtDirekte Kosten
Direkte Kosten sind die Kosten, die direkt im Zusammenhang mit der Herstellung des Produkts oder der Dienstleistung entstehen.
Bruttoertrag
Der Bruttoertrag gibt an, wie viel vom Umsatz nach Abzug der direkten Herstellkosten im Unternehmen verbleibt. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von der Bruttomarge (engl. Gross Margin).
Brutto Marge einfach erklärtVertriebs- und Verwaltungskosten
Die Vertriebs- & Verwaltungskosten (engl. Selling, General & Administrative expenses, kurz SG&A) beinhalten alle Aufwände für Marketing und den Verkauf sowie die allgemeine Verwaltung des Unternehmens.
Forschungs- und Entwicklungskosten
Die Forschungs- und Entwicklungskosten (engl. research & development costs, kurz R&D) geben Auskunft darüber, wie viel das Unternehmen in die Forschung und die Entwicklung seiner Produkte investiert. Vor allem prozentual vom Umsatz und im Vergleich zu direkten Wettbewerbern sind die Kosten interessant.
EBITDA
Das EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) ist der Gewinn des Unternehmens vor Zinsen, Steuern und Abschreibungen. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von der EBITDA-Marge.
Abschreibungen
Abschreibungen stellen Wertminderungen von Vermögensgegenständen des Unternehmens dar (z.B. durch Abnutzung von Maschinen).
EBIT (Operatives Ergebnis)
Das EBIT (engl. Earnings Before Interest and Taxes) ist der Gewinn des Unternehmens vor Zinsen und Steuern, das auch als operatives Ergebnis bezeichnet wird. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von
der EBIT-Marge.
Nettogewinn
Der Nettogewinn stellt den Gewinn oder Verlust nach Abzug aller Kosten dar.
Nettogewinn einfach erklärtaktien.guide Premium
| Jun '26 |
+/-
%
|
||
| Umsatz | 1.945.486 1.945.486 |
16 %
16 %
100 %
|
|
| - Direkte Kosten | 1.111.633 1.111.633 |
13 %
13 %
57 %
|
|
| Bruttoertrag | 833.853 833.853 |
21 %
21 %
43 %
|
|
| - Vertriebs- und Verwaltungskosten | 549.075 549.075 |
13 %
13 %
28 %
|
|
| - Forschungs- und Entwicklungskosten | - - |
-
-
|
|
| EBITDA | 367.654 367.654 |
31 %
31 %
19 %
|
|
| - Abschreibungen | 79.410 79.410 |
21 %
21 %
4 %
|
|
| EBIT (Operatives Ergebnis) EBIT | 288.244 288.244 |
34 %
34 %
15 %
|
|
| Nettogewinn | 197.496 197.496 |
33 %
33 %
10 %
|
|
Angaben in Millionen JPY.
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| Hauptsitz | Japan |
| Mitarbeiter | 38.481 |
| Webseite | www.nipponpaint-holdings.com |


