Nippon Paint (4612) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 revenue reached ¥405.6bn, up 3.2% year-on-year, with operating profit at ¥47.3bn, down 1.3% year-on-year; OP margin was 11.7%.

• Nine-month revenue hit a record ¥1,222.7bn, up 12.6% year-on-year, with operating profit at ¥141.8bn, up 7.7% year-on-year.

• All major segments reported revenue and operating profit growth for the nine months, with the Americas segment showing the highest operating profit growth at 26.3%.

• Decorative segment drove growth, while automotive revenue declined in Japan and China but rose in the Americas.

• Hyperinflationary accounting in Türkiye negatively impacted profit.

Financial highlights

• Q3 Non-GAAP revenue was ¥399.7bn (+1.8% YoY), with operating profit at ¥41.3bn (-13.1% YoY); OP margin 10.3%.

• Gross profit for the nine months was ¥492,242 million, up from ¥431,213 million year-over-year.

• Basic and diluted EPS for the period were ¥41.81, compared to ¥39.79 in the prior year.

• Net cash provided by operating activities was ¥66,226 million, down from ¥108,815 million year-over-year.

• EBITDA for Q3 was ¥64.2bn (+4.3% YoY), with an EBITDA margin of 15.8%.

Outlook and guidance

• Full-year 2024 revenue is forecast at ¥1,600,000 million (+10.9% YoY), with operating profit projected at ¥184,000 million and profit attributable to owners of parent at ¥124,000 million.

• Q4 revenue and operating profit are expected to exceed initial forecasts by about 2% and 0.5-1%, respectively, if FX rates hold.

• No changes to the previously announced earnings forecast.

• India business buybacks and acquisitions are expected to contribute from Q4.

• No dramatic recovery expected in China; TUC growth for the year expected in the mid-single digits.