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 new consolidations (India, AOC) and volume increases in decorative paints.

• Net profit attributable to owners increased 25.7% to ¥36.998 billion, with EBITDA up 21.5% to ¥67.7 billion.

• OP margin expanded to 12.7% (+190bps YoY), with margin improvements from product mix and cost reductions.

• The AOC segment, consolidated for one month, contributed ¥16.75 billion in revenue and ¥5.96 billion in operating profit.

• Guidance for the full year remains unchanged, but exchange rate volatility and macroeconomic risks are key uncertainties.

Financial highlights

• Revenue reached a record Q1 high at ¥405.7 billion (+5.6% YoY); operating profit hit ¥51.4 billion (+24.7% YoY).

• Gross profit margin improved to 42.9% (+250bps YoY); basic EPS rose to ¥15.75.

• Net debt reduced to ¥471.0 billion as of March 31, 2025; equity ratio declined to 40.7% due to acquisition-related borrowings.

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

• Acquisition-related expenses for AOC were ¥1.1 billion in Q1; total acquisition-related expenses reached ¥2.141 billion.

Outlook and guidance

• No revision to full-year guidance; 2025 revenue forecast is ¥1,820,000 million, operating profit ¥244,000 million, and profit attributable to owners ¥162,000 million.

• Dividend forecast for 2025 is ¥16.00 per share.

• Sensitivity to exchange rates and raw material price volatility remains a key risk.

• Lower raw material costs could provide upside, but management remains cautious due to uncertain business sentiment.

• No material change in RMCC expected despite ongoing raw material price fluctuations.