fy2018-fy2020 nippon paint holdings group …...2018/08/30 · decorative paints business in north...
TRANSCRIPT
FY2018-FY2020Nippon Paint Holdings Group Medium-term Management Plan
May 23, 2018
Tetsushi Tado, President & CEO
“N-20”
2
Agenda
1. NPHD Group Medium/Long-term Corporate Plan
2. Review of FY2015-FY2017 Medium-term Management Plan
3. Medium-term Management Plan “N-20”
4. NPHD Group Value Creation:
Maximizing Shareholders’ Value
5. ESG: Vision & Goals
NPHD: Nippon Paint Holdings
・・・・・・・・・・・・・ 3
・・・・ 5
・・・・・・・・・・・・・・・・・・・ 10
・・・・・・・・・・・・・・・・・・・・・・・・・・ 18
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 19
2014 2015 2016 2017 2018-20
¥/USD 106.4 121.0 109.4 112.0 110.0
¥/RMB 17.2 19.2 16.4 16.6 16.0
Earnings were converted using the following forex rates unless otherwise specified
3
NPHD Group Medium/Long-term Corporate Plan
Moving towards our goal Future Pull
[Commitment in 2020 in the FY2018-20 Medium-term Management Plan]
- Net sales target 750 billion yen in 2020
- Maximize value for all stakeholders ⇒ Maximize shareholders’ value
Become the top leader in all business domains & regions
The Leading company committed to continuously create new value
[Goal in 2030]
4
New Management Philosophy
The leading brand bringing colors & joy to everyday life through innovative coating solutions
To be the industry leader driven by passionate people using our strong business foundations to create value & inspire all stakeholders
Enacted January 2018
5
Review of FY2015-FY2017 Medium-term Management Plan
Achieved goals as strategic measures progressed in line with plans
• Achieved expansion in net sales & profits• Built an foundation for securing a Leading Position
5,357 5,141 6,053
7,000
13.3%
15.6%
12.4%
15.0%
0%
5%
10%
15%
20%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2015年度 2016年
1月~12月
2017年度 2017年目標
売上高 営業利益率
(6,700)*
FY2015-FY2017
*Forex rates used at the time the Mid-term Management Plan was devised
USD=¥119.2, RMB=¥19.0(100 million yen)
FY2015 2016Jan-Dec
FY2017 2017 targets
Net sales OP margin
6
Review of FY2015-FY2017 Medium-term Management Plan
Global paint & coatings demand: Mainly driven by demand in China and decorative paint business
2.1
0.5
1.2
3.2 3.6
5.8
1.3 2.0
4.6 4.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
中国 インド 他アジア 米州 欧州China India Europe
5.1
0.9
3.5
2.3
8.1
1.4
6.6
3.5
0.0
2.0
4.0
6.0
8.0
10.0
建築 自動車
(新車用)
工業用 その他
(自補修、船舶等)Decorative
GraphLeft 2010 actualCenter 2015 actualRight 2020 forecast
*Source: IPPIC*Forex: USD=¥110
<Region>
<Business Segments>
(Trillion yen)
(Trillion yen)
Other regions in Asia Americas
Automotive coatings (OEM)
Industrial coatings Others(Auto refinish, marine, etc.)
7
Review of FY2015-FY2017 Medium-term Management Plan
Sales by region: Strong business structure based in growing market, Asia
Japan
30%
China
43%
Other
Asia
18%
US &
Europe
9%Japan
29%
China
38%
Other
Asia
19%
US &
Europe
14%
< Shift of sales mix by region >
2014 actual
Japan
72%
China
12%
Other Asia
5%
US &
Europe
11%
(1) Enforced existing businesses and (2) implemented M&A to capture growing
demand in Asia, our largest market, and to achieve growth in the Americas & Europe
Asia ratio: 57%
2017 actual 2017 Medium-term Management Plan targets
8
Review of FY2015-FY2017 Medium-term Management Plan
Sales by business: Focus on decorative paint, which is highly growing & profitable segment
<Sales mix by business segment>
2014 actual
Automotive
coatings
38%
Decorative
paint
19%
Industrial
coatings
19%
Other
24%
Automotive
coatings
25%
Decorative
paint
51%
Industrial
coatings
12%
Other
12% Automotive
coatings
25%
Decorative
paint
55%
Industrial
coatings
12%
Other
8%
Implemented (1) growth strategies in existing business, and (2) M&A
to achieve further growth of largest market, the decorative paints business
Decorative paint ratio:more than 50%
2017 actual 2017 Medium-term Management Plan targets
・DUNN-EDWARDSAcquired bridgehead fordecorative paints business in North America
9
Review of FY2015-FY2017 Medium-term Management Plan
Business expansion in Asia, the Americas & Europe
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2014年度 2017年度
0
100
200
300
400
500
600
700
800
2014年度 2017年度
020406080
100120140160180200
2014年度 2017年度
Asia EuropeAmericas
・Expanded Mexico business
・CRF
・Bollig & KemperAcquired access to European auto OEMs
Existing businesses
New acquisition
・Expanded “one-stop service”
・Reinforced brand image
Existing businesses Existing businesses
・Expanded Turkey business
(100 million yen)
FY2014 FY2017 FY2014 FY2017 FY2014 FY2017
New acquisition Existing businesses
New acquisition New acquisition
10
Medium-term Management Plan “N-20” Moving toward 2020
Establish overwhelming position in Asia to accelerate global growth
N-20
2020
3 years for growth
acceleration
2018
The leading company that continues to create new values
2015 2017
SC Ⅲ-1 N-20(SC Ⅲ-2)
Become a top leader in all business domains & regions
- 2020 net sales goal of 750 billion yen -
11
Key Initiatives
Implement 1.-3. key measures through “Global One Team”
1. Strengthen the businesses in existing segments
Increase share
Enhance strengths
Generate growth momentum
Rapid synergy effects2. Accelerate expansion of portfolio
Increase operating profit
Effectively use management resources
3. Improve earning capacity
Reinforce global management withRegion x Business
Enhance global collaboration with the functional departments
4. Enhance structure of “Global One Team”
Global deployment of GNN model
Implement M&A & accelerate PMI
Operating profit margin of 14% after growth
investment
Accelerate growth in each business segment
12
Key initiative: 1-1. Strengthen the Existing Segments
Transform from No. 1 into “overwhelming position”
Asia Business Nippon Paint South East Asia・・・NIPSEA
Gain further market share in architectural paints market in Asia & China- Accelerate brand penetration and enforce “one-stop services”
Accelerate growth in newly entered markets(e.g. coatings for wood furniture)
Expand portfolio and acquire new markets by implementing M&A
Ensure compliance with environmental regulations- Establish overwhelming competitiveness by business opportunities and
strengthened supply chain
Expand the lineup of eco-friendly products- Differentiate by strengthening development of water-based paints
13
Key Initiative: 1-2. Strengthen the Existing Segments
3 major operating companies: Measures to accelerate growth
Automotive Coatings Nippon Paint Automotive Coatings Co., Ltd.
Increase market share in OEM business- Major Japanese customers: Acquire the top share in global- Accelerate promotion to non-Japanese customers
Expand plastic coating market share among US/European Tier-1 customers
Trade-use Paints Nippon Paint Co., Ltd.
Capture the top market share in the domestic trade-use paints business Build the base for future growth in the US decorative paints market
Industrial Coatings Nippon Paint Industrial Coatings Co., Ltd
Increase domestic share of core businesses Secure an overwhelming position in domestic powder coatings business Build up a basement of “competitive-edge” model of Japan to deploy Asia with
the collaboration of group companies
14
Key Initiative: 2. Accelerate Expansion of Portfolio
Generate growth momentum & rapid synergy effects
Asia:Focus on reinforcing existing businesses to
establish an “overwhelming position”
Regions outside of Asia:Focus on reinforcing the earnings base of existing
businesses and seek for growth opportunities
15
Key Initiative: 3. Improve Earning Capacity
Share & develop our “strengths”, improve earnings capacity
Expand eco-friendly products
Enhance cooperation within the Group
Accelerate business speed
Enhance “one-stop services”
Take stock of seeds
Integrate business infrastructure
Delegate authority to RHQs
Provide new comfort
M&A
Strengthen brand power
Price strategy
Take in customers
Differentiate from
competitors
Development of high value
added products
Globally strengthening
CoGS reduction measures
Generate synergies
Thorough competitive targeting
Expand product line-up
Expand service domain
16
Key Initiative: 4. Reinforce the Structure of “Global One Team”
Globally expand the source of growth in Asia & unique management model
NN モデル
NPHDグループ
NIPPONPAINT
HOLDINGSGroup
(JAPAN)
NIPSEAGroup
Accelerate management speed
Strong collaborative system
Optimal resource allocation
GNN Model – Global NN Model -
NPHD Group
NN Model
17
FY2018-FY2020 Consolidated Earnings Plan
FY2020 goals: Net sales 750 billion yen & OP margin 14%
6,053 6,500
7,500
0
200
400
600
800
1,000
1,200
1,400
1,600
0
2,000
4,000
6,000
8,000
10,000
2017年 2018年計画 2020年目標
売上高 営業利益
(100 million yen)
Accelerate growth
FY2017 2020 goals2018 plan
Net sales OP margin
18
NPHD’s Group Value Creation: Maximizing Shareholders’ Value
ESG management = Implement ‘co-existence & co-prosperity’
Shareholders
The leading company committing to continuously create new values
Customers
Business partners
Rewarding career (meaningful work)
Services Diverse workstyles
Employees
Colors Growth opportunitiesSafety/security
Governance VOC/CO2 reduction
Local communities
Environmental preservation
Revitalize regions
Investment returns
Hazardous substance reduction
Business growth
Comfort QCD
19
ESG: Vision & Goals
Theme Vision Issues FY2020 Goals (degree of achievement)
GovernanceGovernance system capable enough to compete globally
・Share the new management philosophy
・Establish RHQ management system (Americas, Europe, Asia)
In global
(1) Penetrate the new management philosophy
(2) Establish CSR promotion system(3) Deploy NN model
“Overall harmony of global governance”
EnvironmentCreate value by
dealing with environment and
expand businesses and earnings
・ Create and spread eco-friendly products
• Proper management of chemical substances
In global
(1) Promote development and expansion of eco-friendly products
(2) Manage properly and reduce emission of chemical substances
Diversity“Diversified
knowledge” by gathering diverse
personnel
・ Collaboration among diverse personnel
• Decision-making should be done by diverse personnel
• Safe and secured workplace
In global
(1) Build an HR system with uniform standards
(2) Retain high-skilled personnel and provide diverse workstyle
(3) Secure personnel that are active to work on a world-wide level
(4) Zero serious accidents
21
P/L
(100 million Yen)
Net sales 5,357.5 5,140.8 6,052.5 6,500.0 7,500.0
Operating profit 713.5 800.0 749.6 780.0 1,050.0
Operating profit margin 13.3% 15.6% 12.4% 12.0% 14.0%
Ordinary income 746.1 827.8 768.2 820.0 -
Net income※1 300.2 360.1 371.2 355.0 -
※1 Net income attributable to owners of the parent
FY 2015 2020 goal2016
Jan-DecFY 2017 2018 plan
22
Net sales & OP by region
(100 million Yen)
Net sales 1,742.8 1,716.1 1,759.1 1,775
Operating profit※1 291.6 320.6 306.3 294
Net sales 3,174.0 2,977.5 3,470.3 3,800
Operating profit 377.5 433.4 408.3 458
Net sales 331.6 321.7 682.3 780
Operating profit 51.8 51.5 31.7 62
Net sales 109.1 125.5 140.8 145
Operating profit -9.0 -3.7 2.5 4
Net sales 5,357.5 5,140.8 6,052.5 6,500
Operating profit 713.5 800.0 749.6 780
※1 Excluding dividends from overseas group companies
Americas
Others(MainlyEurope)
TOTAL
Japan
Asia
2018 plan2016
Jan-DecFY 2017FY 2015
23
Net sales by business segment
(100 million Yen)
Automotive coatings 1,387.6 1,393.8 1,484.4 1,553
Decorative paints(Including heavy duty)
2,533.5 2,368.8 3,088.5 3,465
Industrial coatings 682.8 682.9 730.5 716
Others( Marine & Auto refinishes, etc)
579.7 514.9 560.4 566
Coatings total 5,183.6 4,960.4 5,863.7 6,300
Fine chemicals 173.8 180.4 188.8 200
Total 5,357.5 5,140.8 6,052.5 6,500
2018 planFY 20172016
Jan-DecFY 2015
24
Net sales by region & business segment (100 million Yen)
Automotive coatings 396.5 404.2 434.3 437
Decorative paints(Including heavy duty)
437.4 423.7 415.2 432
Industrial coatings 380.1 393.4 397.0 414
Others( Marine & Auto refinishes, etc)
439.6 408.5 422.3 399
Fine chemicals 89.2 86.2 90.3 93
Automotive coatings 599.5 584.2 646.8 690
Decorative paints(Including heavy duty)
2,096.1 1,940.5 2,299.2 2,578
Industrial coatings 302.7 286.9 328.4 300
Others( Marine & Auto refinishes, etc)
128.1 113.4 136.2 165
Fine chemicals 47.5 52.6 59.8 67
Automotive coatings 297.9 289.5 275.8 290
Decorative paints(Including heavy duty)
- - 374.1 455
Fine chemicals 31.1 30.4 31.1 33
Automotive coatings 93.5 110.1 127.5 136
Fine chemicals 6.1 5.8 7.7 7
5,357.5 5,140.8 6,052.5 6,500Total
2018 planFY 20172016
Jan-DecFY 2015
Japan
Asia
Americas
Others(MainlyEurope)
25
Capital expenditures, depreciation, R&D expenses, dividends
(100 million Yen)
190.3 221.5 248.1 220
Property, plant andequipment
94.4 83.0 105.1 -
Intangible assets 67.4 61.8 73.2 -
Total 161.8 144.8 178.3 180
R&D expenses 151.8 147.7 148.1 160
Depreciation
Capital expenditures
FY 20152016
Jan-DecFY 2017 2018 plan
<Dividends>
1H Full year 1H Full year 1H Full year 1H Full year
Dividends (yen/share) 15 20 20 20 20 42 22 45
Payout ratio (%) ※ - 27.8 - 29.2 - 27.6 - 30.4
※ IFRS basis
2018 planFY 2017FY 2015 FY 2016
The forward-looking statements in this document are based on information
available at the time of preparation and involve inherent risks and uncertainties.
Accordingly, actual results and performance may differ significantly from these
forward-looking statements. Please be advised that Nippon Paint Holdings Co.,
Ltd. and information providers shall not be responsible for any damage suffered
by any person relying on any information or statements contained herein.