Nippon Paint (4612) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenue rose 5.6% year-over-year to ¥405.7 billion, with operating profit up 24.7% to ¥51.4 billion, both record highs, driven by decorative paint growth, new consolidations (India, AOC), and improved RMCC ratio.

• Net profit attributable to owners increased 25.7% to ¥37.0 billion, and EBITDA rose 21.5% to ¥67.7 billion.

• The AOC segment, newly consolidated, contributed ¥16.8 billion in revenue and ¥6.0 billion in operating profit.

• Adjusted (Non-GAAP) revenue was flat (-0.3% YoY), but would have risen 1.6% under comparable conditions, reflecting changes in China’s trading business model.

• Growth was supported by volume increases in decorative paints and strong performance in Japan and China.

Financial highlights

• Gross profit margin improved to 42.9% (+250bps YoY), with gross profit at ¥174,092 million.

• Basic EPS for Q1 was ¥15.75, up 25.7% year-over-year.

• Net debt reduced to ¥471.0 billion as of March 31, 2025.

• Hyperinflationary accounting in Türkiye negatively impacted revenue by ~¥0.4 billion and OP by ~¥1.3 billion.

• Equity attributable to owners/total assets ratio declined to 40.7% from 51.8% at year-end.

Outlook and guidance

• Full-year 2025 revenue forecast is ¥1,820,000 million (up 11.1%), with operating profit projected at ¥244,000 million (up 30.0%) and profit attributable to owners at ¥162,000 million (up 27.2%).

• No changes to previously announced guidance; dividend forecast for 2025 is ¥16.00 per share.

• Management remains cautious due to FX volatility and macroeconomic risks but expects continued resilience and double-digit margins in Japan.

• Lower raw material costs could provide upside, but RMCC ratio is expected to remain stable.

• Automotive production outlook may shift due to U.S. tariffs; demand in China’s TUB segment remains weak.