Nippon Paint (4612) Q2 2026 earnings summary

Executive summary

• Achieved record-high revenue and adjusted operating profit in Q2 FY2026, with revenue up 19.4% and adjusted operating profit up 30.4% year-over-year, driven by strong organic growth, price pass-throughs, cost control, higher sales volume, improved product mix, and favorable FX effects.

• All major regions except NIPSEA China posted higher revenue and profit, with Japan, NIPSEA ex-China, and DuluxGroup (Pacific) benefiting from volume growth and price revisions.

• NIPSEA China maintained solid margins through cost management despite market softness and higher raw material costs.

• Revenue for the six months ended June 30, 2026, rose 20.1% year-over-year to ¥1,023,683 million, driven by the acquisition of AOC, higher sales volumes, and favorable foreign exchange effects.

• Comprehensive income surged to ¥226,141 million from a loss of ¥62,927 million in the prior year period, mainly due to positive foreign currency translation adjustments.

Financial highlights

• Q2 FY2026 revenue: ¥533.4bn (+19.4% YoY); adjusted operating profit: ¥94.9bn (+30.4% YoY); adjusted OP margin: 17.8% (+1.5pp YoY); adjusted EPS: ¥29.4 (+31.7% YoY).

• 1H FY2026 revenue: ¥1,023.7bn (+20.1% YoY); adjusted operating profit: ¥172.4bn (+34.0% YoY).

• Gross profit for the period was ¥443,191 million, up from ¥356,785 million year-over-year.

• Full-year adjusted operating profit forecast: ¥316bn (+13.6% YoY); adjusted EPS: ¥95.7 (+10% YoY); reported operating profit forecast: ¥283bn; EPS: ¥81.5.

• Basic and diluted earnings per share increased to ¥45.30 from ¥35.98 year-over-year.

Outlook and guidance

• Full-year 2026 revenue forecast revised upward to ¥2,000,000 million (+12.7% YoY), mainly due to favorable FX and robust first-half performance.

• Adjusted operating profit forecast unchanged at ¥316bn (+13.6% YoY), with higher raw material costs in H2 expected to be offset by price pass-through and cost reductions.

• Operating profit forecast remains at ¥283bn; profit attributable to owners of parent revised down to ¥189bn.

• Basic earnings per share forecast revised to ¥81.45; annual dividend forecast maintained at ¥17 per share.

• Cautious assumptions for H2 due to persistent raw material cost pressures, subdued China real estate, and global uncertainties.