I would like to begin by summarizing the financial results for the 2Q of FY2023.
On a Tanshin basis, there was noteworthy growth in both revenue and operating profit. Revenue saw a YoY increase of 7.6% to 362.7 bn yen, while operating profit experienced a remarkable YoY surge of 141.6% to 48.8 bn yen. The table in the bottom of the presentation illustrates the detailed breakdown of revenue growth. Positive contributions to revenue were driven by the volumes and price/mix of the decorative paints business, adjacencies business, and a new consolidation. However, there was a negative impact on revenue due to the depreciation of the Turkish lira.
In terms of profitability, the gross profit margin demonstrated a consistent improvement, which can be attributed to the ongoing moderation in raw material prices and the effective flow-through of pricing adjustments. Although our earnings in the 2Q exhibited remarkable strength, it's important to note that this performance was augmented by exceptional factors, including subsidy income in China and net insurance proceeds (after deducting costs) in DuluxGroup, which collectively amounted to around 6.9 bn yen. When considering the Non-GAAP perspective, which eliminates the effect of these one-off factors, along with the FX impact and new consolidation, the operating profit margin stood at 11.7%. This figure signifies a YoY and QoQ margin enhancement, highlighting continued improvement.
On a Non-GAAP basis, there was an 8.5% rise in revenue and a 42.4% increase in operating profit. In the Chinese decorative paints business, TUC revenue increased by 15%, whereas TUB revenue declined by 7%. The operating profit margin for the overall Chinese business reached 9.4%, marking a gain of 1.7 percentage points from the corresponding period last year. However, this represents a decline of 3.5 percentage points from the first quarter of FY2023. Notably, within the decorative paints business, the decrease in the operating profit margin was prominent, despite an increase in sales volume. This decline can be attributed to the deterioration of price/mix, which was influenced by substantial sales growth in economy range products.
Nippon Paint Holdings Co. Ltd. published this content on 18 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 August 2023 09:48:02 UTC.
Nippon Paint Holdings Co Ltd is a company mainly engaged in the manufacture and sale of coating materials and fine chemicals products. The Company is involved in the manufacture and sale of paint for automobile-, general- and industrial-uses, as well as fine chemicals. The Company operates in four business segments. The Japan segment conducts paint for automobile-, general- and industrial-uses, as well as fine chemicals business. The Asia segment conducts paint for automobile-, general- and industrial-uses, as well as fine chemicals business in China Singapore, Malaysia, Thailand, Korea, Southeast Asian countries, India. The Oceania segment conducts paint business, such as paint for general-, industrial-uses, and paints peripheral businesses. The Americas segment conducts paint for automobile business and contruction coating materials business.
NIPPON PAINT HOLDINGS CO., LTD. 
