Nippon Paint Hldgs Co Ltd

Thank you very much. And good afternoon, ladies and gentlemen. I am Wakatsuki, co-president of NPHD. Thank you very much for taking the time to join us today despite your busy schedule. I would now like to explain the outline of our FY2024 Q3 financial results. Thank you very much. Please turn to page three. This is today's summary. On a touching basis, revenue was 405.6 billion yen, up 3.2% year-on-year, achieving a record Q3 revenue, and operating profit was 47.3 billion yen, down 1.3%, basically flat year-on-year. As shown on the bottom right, the positive factors for revenue were paint volume, adjacencies business, and new consolidated subsidiaries, while the exchange rate and price mix were negative. On a non-GAAP basis, revenue increased by 1.8% and operating profit decreased by 13.1%. In Nipsey China's decorative business, TUC grew by 1% despite a tough market environment and TUV dropped by 16%. And Nipsey China total revenue grew by 2% on a non-GAAP basis. But operating profit fell by 32% on a non-GAAP basis, excluding subsidies. We are reviewing our costs, including operational efficiency, more rigorously in China and expect margins to improve from Q4 onwards through personnel optimization, et cetera. In a way, it was a tougher Q3 than expected. But overall, China, Turkey, and DGL direct Europe, especially France, were rather tough. And other than that, I think we were able to achieve a decent result in a tough market environment. In this context, the overview of nine months' cumulative results is shown on page four, with both revenue and operating profit reaching record highs. As I said before, there are some ups and downs depending on the region or quarter, but overall, I think all regions are generating good performance. As for the full year guidance on page 5, the yen continues to weaken, but some regions I mentioned earlier are facing difficulty on a local currency basis, so we have not made revisions. That said, we expect to exceed our initial forecast. And based on the Q4 outlook for exchange rates shown on the right, we expect revenue and operating profit to increase by about 15% in Q4 on the Tungsten basis. As a result, as shown on the lower half, we will aim for revenue and operating profit to exceed the initial forecast by about two percentage points and about 0.5 to 1 percentage point, respectively. So the guidance remains unchanged. We received approval from the authorities for our Indian business. We have not yet closed the deal, but these businesses are expected to contribute to consolidated earnings from Q4. I will not go into detail, however, as the impact on the overall picture is minor.

On pages 6 and 7, we update our foliar guidance for business growth and margin trends on the local currency basis assumed in August. Page 8, as for raw material market conditions, we are seeing overall stability, and page 9 shows the heat map. I'm moving on to page 10. Although I leave the details to Q&A, I would like to add two points first. One is, in Asia, negative growth is seen in Nipsey except China, but this is still largely due to inflation and hyperinflationary accounting in Turkey. Excluding Turkey, sales growth of Nipsey except China was about 5.4%. Indonesia is also showing fair signs of recovery at 7.9% growth. Secondly, in DGL, market conditions remained difficult in both the Pacific and Europe. But in the Pacific, sales grew by 3.1% and margins improved by 1 percentage point due to the contribution of small acquisitions in the adjacencies business. In Europe, only the French market remained challenging. resulting in a disappointing sales decline. Regarding other regions, they trended as expected. Page 11. As for main topics, first of all, we will hold our first IR day on December 2nd to deepen your understanding of our company from various aspects as a new attempt We will have DGL, which implements the so-called Western model, and NIPC, which implements the Asian model, explain our brand strategy from their respective perspectives. And as in the past, we will have our co-president, Weishu Kim, talk about the overall business of the NIPC group. And also Mr. Nakamura, chairman of the board, will discuss governance. We hope you will make spare time to attend this event. We held a briefing session on the integrated report on September 6th, and we received valuable feedback from you at the meeting and also subsequently. We would like to thank you again and will continue to strive for a more reader-friendly integrated report in the future. Moving on to page 12. We have already announced the acquisition of the AOC on October 28th. I would like to take your questions regarding this topic today as well, if necessary. That concludes my presentation. Thank you for your attention.