Consolidated Financial Results
for the Nine Months Ended September 30, 2019
[IFRS]
November 14, 2019
Company name: NIPPON PAINT HOLDINGS CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 4612
URL: https://www.nipponpaint-holdings.com/
Representative: Tetsushi Tado, President & CEO, Representative Director of the Board
Contact: Ryosuke Tanaka, General Manager of Corporate Communications
Phone: +81-6-6455-9140
Scheduled date of filing the quarterly securities report: November 14, 2019
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: Yes
Schedule of quarterly financial results briefing session: Yes(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Nine Months Ended September 30, 2019 (January 1, 2019 to
September 30, 2019)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Revenue
Operating profit
Profit before tax
ProfitNine months ended
Million yen%
Million yen%
Million yen%
Million yen%
September 30, 2019495,119
4.3
66,479(0.5)
65,928(3.8)
47,689 (6.0)
September 30, 2018
474,482－
66,810－68,529－50,758－Nine months ended
September 30, 2019
September 30, 2018

Profit attributable toowners of parent

Comprehensive
incomeMillion yen%

Million yen%

32,69735,017(6.6)－(2,790)37,149－－Basic earnings per
share

Nine months ended
September 30, 2019
September 30, 2018

Diluted earnings per
share

Yen

Yen

101.95109.19101.92
109.17

The Group has adopted IFRS starting from the fiscal year ended December 31, 2018. Accordingly, changes from the previous
corresponding period for the nine months ended September 30, 2018 have not been provided.

(2) Consolidated Financial Position
Total assets
As of September 30, 2019
As of December 31, 2018

Total equity

Equity attributableto owners of parent

Equity attributableto owners of parent
to total assets

Million yen

Million yen

Million yen%

1,417,522
953,988652,274
647,618

526,185
520,047

37.1
54.5

2. Dividends
1stquarter-end

2ndquarter-end

Yen

Yen

Annual dividends
3rdYear-endquarter-end

Fiscal year ended－
22.00
December 31, 2018
Fiscal year ending－
22.00
December 31, 2019
Fiscal year ending
December 31, 2019 (Forecast)
Note: Revision to the dividends forecast announced most recently: No

Total

Yen

Yen

Yen

－

23.00

45.00

23.00

45.00

－

3. Consolidated Financial Results Forecast for the Fiscal Year Ending December 31, 2019 (January 1, 2019 to
December 31, 2019)(% indicates changes from the previous corresponding period.)Basicearnings
per share

Operating profit

Profit before tax

Profit attributableto owners of parent

Million yen

Million yen%

Million yen%

Yen

Full year
640,000
2.0
77,000 (11.0)
78,000 (12.4)
Note: Revision to the financial results forecast announced most recently: No

39,000(14.0)

121.60

Revenue
Million yen%%

* Notes:(1) Changes in significant subsidiaries during the period under review: Yes
New: 4 companies
DuluxGroup Limited
DuluxGroup (New Zealand) Pty Ltd
Alesco Corporation Pty Ltd
Betek Boya ve Kimya Sanayi Anonim Sirketi(2) Changes in accounting policies and changes in accounting estimates
1) Changes in accounting policies required by IFRS: Yes
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
September 30, 2019: 325,402,443 shares
December 31, 2018: 325,402,443 shares2) Total number of treasury shares at the end of the period:
September 30, 2019: 4,655,147 shares
December 31, 2018: 4,689,703 shares
3) Average number of shares during the period:
Nine months ended September 30, 2019: 320,724,704 shares
Nine months ended September 30, 2018: 320,701,656 shares*These consolidated financial results are outside the scope of audit by Certified Public Accountants or auditing
corporations.
*Explanation of the proper use of financial results forecast and other notes(Caution concerning forward-looking statements)
The earnings forecasts and other forward-looking statements herein are based on information currently available to
the Company and certain assumptions that are judged to be reasonable, and the Company does not in any way
guarantee the achievement of the projections. Actual results, etc. may differ greatly from the forecast figuresdepending on various factors.

Table of Contents
1. Qualitative Information on Quarterly Financial Results for the Period under Review ........................ 2(1) Explanation of Operating Results .................................................................................................... 2(2) Explanation of Financial Position .................................................................................................... 3(3) Explanation of Consolidated Financial Results Forecast and Other Forward-Looking Information 3
2. Condensed Quarterly Consolidated Financial Statements and Primary Notes ..................................... 4(1) Condensed Quarterly Consolidated Statements of Profit or Loss and Comprehensive Income ...... 4(2) Condensed Quarterly Consolidated Statement of Financial Position ............................................... 8(3) Condensed Quarterly Consolidated Statement of Changes in Equity ............................................ 10(4) Condensed Quarterly Consolidated Statement of Cash Flows ....................................................... 12(5) Notes to Condensed Quarterly Consolidated Financial Statements ............................................... 13(Notes on going concern assumption) ....................................................................................... 13(Changes in accounting policies) ............................................................................................... 13(Segment information) .............................................................................................................. 13(Business combinations, etc.) .................................................................................................... 16(Significant subsequent events) ................................................................................................. 20

1

1. Qualitative Information on Quarterly Financial Results for the Period under Review(1) Explanation of Operating Results
During the nine months ended September 30, 2019, consolidated revenue of the Company and its groupcompanies (collectively, the “Group”) increased by 4.3% from the corresponding period of the previous year (the“previous year”) to ¥495,119 million due to the acquisition of ownership of Australian Paint Manufacturer
DuluxGroup Limited and Turkish Paint Manufacturer Betek Boya ve Kimya Sanayi Anonim Sirketi, despite theeffects of yen appreciation. Consolidated operating profit decreased by 0.5% from the previous year to ¥66,479
million due to the subsidy income related to the removal of factories resulting from an environmental regulationin China for the previous year. Consolidated profit before tax decreased by 3.8% from the previous year to¥65,928 million, and profit attributable to owners of parent decreased by 6.6% from the previous year to ¥32,697
million.
Results by business segment are as follows.
“Oceania” has been added as a reportable segment since the third quarter ended September 30, 2019.
Japan
In this region, revenue for automotive coatings was higher than the previous year due to factors such asfavorable shipments of premium design and high value-added coatings in addition to a higher number of
automobiles manufactured than the previous year. As for industrial coatings, revenue was higher than the previous
year due to factors such as an increase in demand in line with restoration works following the natural disasters
that occurred in the previous year. As for trade-use paints, under solid market conditions, revenue was higher
than the previous year due to factors such as efforts to expand sales in the retail sector.
As a result, consolidated revenue for the Japan segment increased by 2.2% from the previous year to¥136,501 million. Consolidated operating profit decreased by 8.8% from the previous year to ¥32,816 million
due to factors such as an increase in raw material prices and the recording of share acquisition-related expenses
associated with the corporate acquisition announced in April 2019. ¥13,585 million of dividend income fromoverseas group companies (¥14,012 million in the previous year) is included in the consolidated operating profit.
All of this dividend income is eliminated under intersegment eliminations and other adjustments as it is an internaltransaction.
Asia
In this region, revenue for automotive coatings was significantly lower than the previous year due to adecrease in the number of automobiles manufactured in China, India and Thailand from the previous year. As for
trade-use paints, a mainstay business in Asia, revenue was higher than the previous year as a result of focusing
on sales promotion activities for mainstay interior residential paints and achieving favorable sales of decorative
paints for exterior in China, in spite of stagnant market conditions in Singapore, etc.
As a result of the effects of yen appreciation in addition to the aforementioned factors, consolidated revenue
for the Asia segment decreased by 1.1% from the previous year to ¥271,063 million. Consolidated operating
profit decreased by 1.1% from the previous year to ¥40,028 million due to factors such as the subsidy income
related to the removal of factories resulting from an environmental regulation in China for the previous year,
despite a decline in raw material prices.
Oceania
In this region, the profit or loss of DuluxGroup Limited since September 2019 has been reflected in theGroup’s consolidated financial results. The trade-use paint business and the paint peripheral business remainedsolid by virtue of sales promotion activities and a share increase under weak new housing market conditions inAustralia.
As a result, consolidated revenue for the Oceania segment was ¥13,148 million, and consolidated operating
profit was ¥2,897 million.
2

Americas
In this region, revenue for automotive coatings decreased from the previous year due to factors such as the
sluggish production of automobiles in the United States, a core region. In trade-use paints, revenue increased
from the previous year due to the sales expansion of high value-added products and an increase in the number ofshops.
As a result, consolidated revenue for the Americas segment increased by 0.4% from the previous year to¥56,911 million. Consolidated operating profit decreased by 7.3% from the previous year to ¥3,974 million due
to an increase in selling, general and administrative expenses resulting from factors such as a personnel increase.
Other
In this segment, revenue for automotive coatings decreased from the previous year due to the effects of yen
appreciation in addition to the sluggish production of automobiles in the region. The financial results of Betek
Boya ve Kimya Sanayi Anonim Sirketi, whose profit or loss since July 2019 has been reflected in the Group’s
consolidated financial results, remained solid.
As a result, consolidated revenue for the segment increased by 70.1% from the previous year to ¥17,493
million, and consolidated operating profit increased by 936.4% from the previous year to ¥352 million.

(2) Explanation of Financial Position
Total assets at the end of the third quarter of the fiscal year under review increased by ¥463,533 million
from the end of the previous fiscal year to ¥1,417,522 million. Current assets increased by ¥61,845 million fromthe end of the previous fiscal year mainly due to factors such as an increase in trade and other receivables, despitea decrease in cash and cash equivalents. Additionally, non-current assets increased by ¥401,687 million from theend of the previous fiscal year. The increase was primarily attributable to factors such as an increase in property,
plant and equipment in line with the application of IFRS 16 and increases in property, plant and equipment andintangible assets resulting from the acquisition of DuluxGroup Limited and Betek Boya ve Kimya Sanayi
Anonim Sirketi.
Liabilities increased by ¥458,877 million from the end of the previous fiscal year to ¥765,247 million mainly
due to factors such as an increase in borrowings in line with the acquisition of DuluxGroup Limited and Betek
Boya ve Kimya Sanayi Anonim Sirketi.
Equity increased by ¥4,656 million from the end of the previous fiscal year to ¥652,274 million. This was
mainly attributable to factors such as an increase in retained earnings due to the recording of profit attributableto owners of parent, despite a decrease in foreign currency translation adjustment.
As a result, equity attributable to owners of parent to total assets fell from 54.5% at the end of the previous
fiscal year to 37.1%.
(3) Explanation of Consolidated Financial Results Forecast and Other Forward-Looking Information
There are no revisions from consolidated financial results forecast for the full year ending
December 31, 2019 announced on February 13, 2019.

3

2. Condensed Quarterly Consolidated Financial Statements and Primary Notes(1) Condensed Quarterly Consolidated Statements of Profit or Loss and Comprehensive Income
Condensed Quarterly Consolidated Statement of Profit or Loss
Nine Months Ended September 30, 2019
(Million yen)
For the nine months ended
September 30, 2018

For the nine months ended
September 30, 2019474,482(289,726)
184,756(125,142)
8,582(1,386)
66,8103,034(2,142)495,119(299,220)
195,898(134,016)
6,160(1,562)
66,4793,522(4,755)826

681

68,529(17,770)
50,75865,928(18,238)
47,68935,017
15,74150,75832,697
14,992
47,689109.19109.17101.95101.92

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit of investments accounted forusing equity method
Profit before tax
Income taxes
ProfitProfit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)4Third Quarter Ended September 30, 2019
(Million yen)
Third quarter ended
September 30, 2018
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit of investments accounted forusing equity method
Profit before tax
Income taxes
ProfitThird quarter ended
September 30, 2019

161,264(99,460)
61,804(42,424)
2,830
(272)
21,938
1,394(746)

182,694(110,383)
72,311(49,536)
2,443
(683)
24,534
1,172(2,412)250

224

22,837(5,692)
17,14523,519(6,573)
16,945

11,203
5,942
17,145

11,758
5,186
16,945

34.93
34.93

36.66
36.65

Profit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)5Condensed Quarterly Consolidated Statement of Comprehensive Income
Nine Months Ended September 30, 2019
(Million yen)
For the nine months ended
September 30, 2018

For the nine months ended
September 30, 201950,75847,689(1,713)

1,312

(25)

(18)

(1,739)1,294(11,108)(18,479)－(32,626)

(761)

(669)

(11,869)(51,775)(13,609)
37,149(50,480)(2,790)25,961
11,18837,149(11,730)
8,939(2,790)

ProfitOther comprehensive income
Items that will not be reclassified subsequently to profit
or loss
Financial assets measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans
Total of items that will not be reclassified subsequently
to profit or loss
Items that may be reclassified subsequently to profit orloss
Exchange differences on translation of foreign
operations
Cash flow hedges
Share of other comprehensive income of entities
accounted for using equity method
Total of items that may be reclassified subsequently to
profit or loss
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

6Third Quarter Ended September 30, 2019
(Million yen)
Third quarter ended
September 30, 2018
ProfitOther comprehensive income
Items that will not be reclassified subsequently to profit
or loss
Financial assets measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans
Total of items that will not be reclassified subsequently
to profit or loss
Items that may be reclassified subsequently to profit orloss
Exchange differences on translation of foreign
operations
Cash flow hedges
Share of other comprehensive income of entities
accounted for using equity method
Total of items that may be reclassified subsequently to
profit or loss
Total other comprehensive income
Comprehensive income

Third quarter ended
September 30, 201917,145

16,945

51

1,021

(49)

(6)

1

1,015

6,134

(4,513)－(12,315)

105

(295)

6,239

(17,123)

6,241
23,386(16,108)837

17,3396,047
23,386(1,582)
2,419
837

Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income7(2) Condensed Quarterly Consolidated Statement of Financial Position
As ofDecember 31, 2018
AssetsCurrent assets
Cash and cash equivalents
Inventories
Trade and other receivables
Other financial assets
Other current assets
Subtotal
Assets held for sale
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Investments accounted for using equity method
Other financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets

8(Million yen)
As of
September 30, 2019

129,633
65,807179,269
59,7759,456
443,941272
444,214124,941
90,458220,235
55,758
14,216505,611449
506,060

140,550
203,722
95,496
11,61240,942
14,374
3,075
509,774
953,988

231,729
511,40994,203
11,61952,021
3,250
7,228
911,461
1,417,522

As ofDecember 31, 2018

(Million yen)
As of
September 30, 2019

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Bonds and borrowings
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities

121,999
51,583
5,050
4,735
992
31,415
215,776

147,808395,302
23,387
12,285
3,332
42,072
624,188

Non-current liabilities
Bonds and borrowings
Other financial liabilities
Retirement benefit liability
Provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities

37,881
5,558
19,572385
1,209
25,98690,59350,206
41,39823,490876
1,618
23,468141,059

Total liabilities

306,370

765,247

EquityShare capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

78,862
63,247(6,444)
390,287(5,905)520,047
127,570647,618
953,988

78,86262,869(6,401)
408,538(17,683)
526,185
126,089652,274
1,417,522－

9

(3) Condensed Quarterly Consolidated Statement of Changes in Equity
For the Nine Months Ended September 30, 2018 (From January 1, 2018 to September 30, 2018)(Million yen)
Equity attributable to owners of parent

Share capital

Balance as of January 1, 2018

CapitalsurplusTreasurysharesRetainedearnings

Other
components ofequityTotal

Noncontrollinginterests

Total equity

78,862

63,262(6,454)360,249

15,471

511,392

125,549

636,941

Profit－－－35,017－35,017

15,74150,758Other comprehensive income

－

－

－

－

(9,055)(9,055)(4,553)(13,609)

Comprehensive income

－

－

－

35,017(9,055)25,961

11,18837,149Purchase of treasury shares

－

－

(4)

－

－

(4)

－

(4)

Disposal of treasury shares

－

0

0

－

(1)

0

－

0

Dividends－－－(14,110)－(14,110)(12,325)(26,436)

Share-based payment transactions

－

－

－

－

43

43

－

43

Changes in ownership interest in
subsidiaries

－

(33)

－

－

－

(33)

(197)

(231)

Change in scope of consolidation

－

－

－

－

－

－

521

521

Transfer from other componentsof equity to retained earnings
Transfer from other componentsof equity to non-financial assets

－

－

－

56

(56)

－

－

－

－

－

－

－

－

－

－

－

Capital increase of subsidiaries

－

－

－

－

－

－

－

－

Other

－

－

－

－

－

－

(21)

(21)

Total transactions with owners

－

(32)

(4)

(14,054)(13)(14,105)(12,024)(26,129)

Balance as of September 30, 201878,862

63,229(6,458)381,212

6,402

523,248

124,713647,96110

For the Nine Months Ended September 30, 2019 (From January 1, 2019 to September 30, 2019)(Million yen)
Equity attributable to owners of parent

Share capital

Balance as of January 1, 2019

CapitalsurplusTreasurysharesRetainedearnings

Other
components ofequityTotal

Noncontrollinginterests

Total equity

78,862

63,247(6,444)

390,287(5,905)520,047

127,570647,618

Profit－－－32,697－32,697

14,992

47,689Other comprehensive income

－

－

－

－

(44,427)(44,427)(6,052)(50,480)

Comprehensive income

－

－

－

32,697(44,427)(11,730)

8,939(2,790)Purchase of treasury shares

－

－

(6)

－

－

(6)

－

(6)

Disposal of treasury shares

－

104

49

－

－

153

－

153

Dividends－－－(14,433)－(14,433)(12,047)(26,481)

Share-based payment transactions

－

－

－

－

9

9

－

9

Changes in ownership interest in
subsidiaries

－

(481)

－

－

－

(481)

(441)

(922)

Change in scope of consolidation

－

－

－

－

－

－

475

475

Transfer from other componentsof equity to retained earnings
Transfer from other componentsof equity to non-financial assets

－

－

－

(13)

13

－

－

－

－

－

－

－

32,62632,626－32,626

Capital increase of subsidiaries

－

－

－

－

－

－

1,618

1,618

Other

－

－

－

－

－

－

(25)

(25)

Total transactions with owners

－

(377)

43

(14,447)

32,64917,867(10,420)

7,447

Balance as of September 30, 201978,86262,869(6,401)

408,538(17,683)

526,185

126,089652,27411

(4) Condensed Quarterly Consolidated Statement of Cash Flows(Million yen)
For the nine months ended
September 30, 2018

For the nine months ended
September 30, 2019

68,52914,220(1,420)941

65,92817,746(2,648)
2,860

(826)

(681)

(3,742)(1,040)(374)(12,476)(1,372)(29)(1,910)(3,632)
57,904
855
1,070
(962)
(15,907)42,959(2,634)(13,428)
1,609
(348)
412
7,062
74,8381,998
1,353(2,406)(16,990)
58,793(1,546)(526)

11,1391,823(14,339)
4,695(1,111)(126)
240(1,215)
－
(567)
(363)
(3,196)(15,115)
2,817(1,621)(161)
6(318,655)(57)(3,639)(36)(335,167)(2,040)351(7,080)(469)－(14,110)(902)
71(24,181)315,096－(21,200)(5,788)
1,611(14,433)(1,225)(6)
274,052(868)(2,371)

14,713
101,876
116,590(4,692)
129,633
124,941

Cash flows from operating activities
Profit before tax
Depreciation and amortization
Interest and dividend income
Interest expenses
Share of loss (profit) of investments accounted forusing equity method
Loss (gain) on sale and retirement of property, plantand equipment, and intangible assets
Decrease (increase) in inventories
Decrease (increase) in trade and other receivables
Increase (decrease) in trade and other payables
Increase (decrease) in retirement benefit liability
Increase (decrease) in provisions
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Net decrease (increase) in time deposits
Net decrease (increase) in short-term investment
securities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of investments in subsidiaries
Payments for sale of investments in subsidiaries
Payments for loans receivable
Other
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease liabilities
Capital contribution from non-controlling interests
Dividends paid
Dividends paid to non-controlling interests
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period12(5) Notes to Condensed Quarterly Consolidated Financial Statements(Notes on going concern assumption)
There is no relevant information.
(Changes in accounting policies)
The major standard which the Group has applied since the first quarter ended March 31, 2019 is as follows.
IFRS
Details of new/amended standard
IFRS 16 “Leases”

For all leases of a lessee, in principle, the rights to use the assets and the obligations
associated with payments shall be reflected in the consolidated financial statements.

In applying IFRS 16, the Group has applied transitional provisions stipulated in paragraph C5 (b) andrecognized the cumulative effect of initial application at the date of initial application (January 1, 2019). Due totransition to IFRS 16, right-of-use assets increased by ¥32,985 million, lease liabilities increased by ¥20,860
million, and other non-current assets decreased by ¥12,429 million. Right-of-use assets and lease liabilities areincluded in property, plant and equipment and other financial liabilities (current and non-current), respectively.
The Group has used practical expedients stipulated in paragraph C10 (a)-(e) of IFRS 16 when applying IFRS
16 to leases previously classified as operating leases under IAS 17.

(Segment information)(1) Summary of reportable segments
The reportable segments of the Group categorize the business composition of the Group for which separate
financial information is available and are subject to periodical evaluation by the Board of Directors, which is thehighest decision-making body, in order to make decisions regarding management resource allocation andperformance assessment. The Group’s primary businesses are the paint and coating business which manufacturesand sells automotive coatings, trade-use paints, industrial coatings, fine chemicals and other paints, and the paintperipheral business which manufactures and sells paint-related products such as adhesives. The Company andseparate local companies are responsible for domestic activities, and overseas, separate local companies are
responsible for the Asia, Oceania, Americas, and other regions. Each company is an individual management unit,
and concerning which items to carry, comprehensive strategic proposals are made for each region to foster
business growth.
As a result, the Group consists of segments divided by region with manufacture and sales structure as a base,and the four reportable segments are “Japan,” “Asia,” “Oceania” and “Americas.”“Other” contains business activities by overseas subsidiaries in Europe, etc. Those business activities aremanaged individually, but are not material enough to be disclosed separately as an independent segment of theGroup.
(Changes in reportable segments)“Oceania” has been added to the reportable segments as a result of the acquisition of all shares in
DuluxGroup Limited and the inclusion of the company and its 42 subsidiaries in the scope of consolidation in
the third quarter ended September 30, 2019.
Segment information for the nine months ended September 30, 2018 is presented based on the changed
reportable segment categories.

13

(2) Performance by reportable segment
For the Nine Months Ended September 30, 2018 (From January 1, 2018 to September 30, 2018)(Million yen)
Reportable segment
Japan

Asia

133,553

Intersegment revenue

Other

Total

464,196

10,286474,482－

474,482

175

32,882555

33,438(33,438)－－

56,859497,078

10,841

507,920(33,438)

474,482－

4,289

80,761

33

80,795(13,985)

66,810Oceania

Americas

Subtotal

273,958－

56,68329,891

2,816

－

Total

163,444276,775

Segment profit

35,99040,481

Revenue
Revenue fromexternal customers

Condensed
quarterly
Adjustment
consolidated(Note)
financialstatements

Finance income

3,034

Finance costs
Share of profit ofinvestments accounted
for using equity method
Profit before tax(2,142)826
68,529Note: Adjustments to “intersegment revenue” and “segment profit” are primarily due to intersegment eliminations.

For the Nine Months Ended September 30, 2019 (From January 1, 2019 to September 30, 2019)(Million yen)
Reportable segment
Other

Total

477,625

17,493495,119－495,119107

31,523630

32,153(32,153)－

13,14857,018509,148

18,124527,272(32,153)495,119

2,897

3,974

79,717352

80,069(13,589)

66,479

Japan

Asia

Oceania

Americas

Subtotal

136,501

271,063

13,14856,911

Intersegment revenue

28,541

2,874

－

Total

165,043

273,938

Segment profit

32,81640,028

Revenue
Revenue from externalcustomers

Condensed
quarterly
Adjustment
consolidated(Note)
financialstatements

Finance income

3,522

Finance costs
Share of profit ofinvestments accounted
for using equity method
Profit before tax(4,755)681
65,928

Note: Adjustments to “intersegment revenue” and “segment profit” are primarily due to intersegment eliminations.

14

(3) Information on products and services
Sales categories by business have been changed to the “paint and coating business” and the “paint peripheralbusiness” since the third quarter ended September 30, 2019.
Revenue for the nine months ended September 30, 2018 is presented based on the changed sales categories
by business.
For the Nine Months Ended September 30, 2018 (From January 1, 2018 to September 30, 2018)(Million yen)
Japan

Asia

Oceania

Americas

Other

Total

Paint and coating business

133,553

273,958－

56,683

10,286

Automotive coatings

33,21055,689－20,5999,541

119,041

Trade-use paints

33,824

180,894－

33,682－

248,401

Industrial coatings

29,465

21,569－－190

51,225474,482

Fine chemicals

6,556

5,100

－

2,277

546

14,481Other paints

30,496

10,705－124

741,332

－

－

－

－

－

－

133,553

273,958－

56,683

10,286474,482

Paint peripheral business
Total

For the Nine Months Ended September 30, 2019 (From January 1, 2019 to September 30, 2019)(Million yen)
Japan

Asia

Paint and coating business

136,501

271,063

7,075

56,911

15,667487,221

Automotive coatings

34,68949,598－19,763

8,807

112,859

Trade-use paints

36,434

185,176

6,582

34,702

4,651

267,547

Industrial coatings

30,27319,929

493

－

922

51,618Fine chemicals

6,580

4,493

－

2,299

767

14,140

Other paints

28,524

11,865

－

146

518

41,055

－

－

6,072

－

1,825

7,898

136,501

271,063

13,14856,911

17,493495,119

Paint peripheral business
Total

Oceania

15

Americas

Other

Total

(Business combinations, etc.)
For the Nine Months Ended September 30, 2018 (From January 1, 2018 to September 30, 2018)
There is no relevant information.
For the Nine Months Ended September 30, 2019 (From January 1, 2019 to September 30, 2019)(Acquisition (acquisition of ownership) of Australian DuluxGroup Limited)(1) Overview of business combination
1) Name and business of acquiree
Name of acquiree
Description of business: DuluxGroup Limited and its 42 subsidiaries: Manufacture and sale of premium branded paint & coatings and home
improvement products mainly in Oceania* DuluxGroup Limited has an associate accounted for using equity method.
2) Date of acquisition
August 21, 20193) Percentage of voting equity interests acquired
100%4) Method of obtaining control of acquiree
Share acquisition in exchange for cash as consideration
5) Primary reasons for the acquisition
Although the paints market in Australia and New Zealand (hereinafter referred to as “ANZ”) is an
attractive market that continues to grow steadily even in developed countries, DuluxGroup Limited has thelargest share of the ANZ paints market. DuluxGroup Limited is a leading company in ANZ with a wealthof iconic brands especially in the decorative paint segment and continues to expand its market share aheadof the No. 2 ranking player. Therefore, it is expected that the share acquisition will further strengthen thebusiness foundation of the Company, since the share acquisition enables the Company to secure a strong
position in the decorative paint business, which has a great demand for paints in the world and high potential
for growth, and to balance the Company’s portfolio in both fast-growing regions and stable-growth expected
regions, and will greatly contribute to the progress of the medium-term management plan of the Company.
Therefore, the Company decided to conduct the share acquisition.
(2) Fair values of assets and liabilities as of the date of business combination(Million yen)
Fair value
Cash and cash equivalents

2,906

Property, plant and equipment

47,672Intangible assets

5,710

Other assets

52,342

Fair value of liabilities assumed
Fair value of assets acquired and liabilities
assumed, net(96,380)
12,25116

Trade and other receivables
Contractual amount due(Million yen)
Fair value

18,924

18,541163

163

19,087

18,704(382)－

18,70418,704

Trade receivables
Receivables
Total
Best estimate of contractual cash flows notexpected to be collected
Net total

The amount of assets acquired and liabilities assumed is provisionally calculated based on currently
available information as the allocation of cost has not yet been completed at the end of the third quarter ended
September 30, 2019. Accounting treatments at acquisition will be revised if a revision or addition to theaforementioned amount is required as new information arises within one year from the date of the acquisition
about the facts and circumstances which existed on the date of transaction.
(3) Consideration transferred and goodwill(Million yen)AmountConsideration transferred (cash)A262,932

Basis adjustments
Fair value of assets acquired and liabilities
assumed, net
Non-controlling interests (Note 1)B

31,720C

12,251D(156)

A+B-(C-D)

282,244

Goodwill (Note 2)

Note 1: Non-controlling interests are measured at the proportion of non-controlling interests to the fair valueof the acquiree’s identifiable net assets.
Note 2: Goodwill primarily reflects the ability to generate excess earnings in the future and synergies withexisting businesses. The goodwill does not include any amount which is expected to be deductible
for tax purposes.
(4) Acquisition-related expenses
Line item:

Selling, general and administrative expenses

Amount:¥1,425 million(5) Effects on the consolidated statement of profit or loss
1) Acquiree’s financial results on and after the date of acquisition recognized in the consolidated statement of
profit or loss
(Million yen)
For the fiscal year ending
December 31, 2019
(From September 1, 2019
to September 30, 2019)
Revenue
13,148
Profit1,826

172) Effects on the consolidated statement of profit or loss in the case where the business combination is assumed
to have been executed at beginning of period(Million yen)
For the fiscal year ending
December 31, 2019
(From January 1, 2019
to September 30, 2019)
Revenue
103,747
Profit5,069

The pro forma information (unaudited information) has not been reviewed.
(6) Effects of business combination on cash flows(Million yen)AmountConsideration paid for acquisition

294,652

Cash and cash equivalents(2,906)

Purchase of shares of subsidiaries

291,745(Acquisition (acquisition of ownership) of Turkish Betek Boya ve Kimya Sanayi Anonim Sirketi)(1) Overview of business combination
1) Name and business of acquiree
Name of acquiree: Betek Boya ve Kimya Sanayi Anonim Sirketi and its 8 subsidiaries

Description of business : Manufacture and sale of decorative paint and construction materials* Betek Boya ve Kimya Sanayi Anonim Sirketi has an entity accounted for using equity method.
2) Date of acquisition
July 10, 20193) Percentage of voting equity interests acquired
99.71%
4) Method of obtaining control of acquiree
Share acquisition in exchange for cash as consideration
5) Primary reasons for acquisition
The decorative paint market in Turkey is an appealing market for which high growth is expected. Betek
Group, which is the group of companies the Company is acquiring shares, was founded in 1988 and handles
ETICS (External Thermal Insulation Composite System: insulation materials), etc. in addition to decorative
paint and industrial coatings for construction. Betek Group is a leading company that has the top share in
the decorative paint market in Turkey. Its major brands Filli Boya and Fawori have a large market share anda high brand-recognition level. In addition to the regions in Asia and China, where the Company has had astrong presence, the Company will position itself as a leading player in the Turkish markets with strong
expected growth, capturing the high growth potential of the Turkish markets. Furthermore, by contributing
know-how and business resources the Company has accumulated through its Asian paint and coatingsbusiness into Betek Boya ve Kimya Sanayi Anonim Sirketi, it will be possible to further accelerate the speed
18

at which Betek Boya ve Kimya Sanayi Anonim Sirketi will expand its business. Accordingly, the Company
decided to conduct the share acquisition, firmly believing that the transaction will greatly contribute to theprogress of the Company’s medium-term management plan and the realization of its medium/long-term
management policies.
(2) Fair values of assets and liabilities as of the date of business combination(Million yen)
Fair value
Cash and cash equivalents

3,813

Property, plant and equipment

8,235

Intangible assets

19

Other assets

22,623

Fair value of liabilities assumed
Fair value of assets acquired and liabilities
assumed, net(35,228)(536)

Trade and other receivables
Contractual amount due(Million yen)
Fair value

17,251

14,566327

327

17,57914,893(2,685)－

14,893

14,893

Trade receivables
Receivables
Total
Best estimate of contractual cash flows notexpected to be collected
Net total

The amount of assets acquired and liabilities assumed is provisionally calculated based on currently
available information as the allocation of cost has not yet been completed at the end of the third quarter ended
September 30, 2019. Accounting treatments at acquisition will be revised if a revision or addition to theaforementioned amount is required as new information arises within one year from the date of the acquisition
about the facts and circumstances which existed on the date of transaction.
(3) Consideration transferred and goodwill(Million yen)AmountConsideration transferred (cash)A

26,456

Basis adjustments
Fair value of assets acquired and liabilities
assumed, net
Non-controlling interests (Note 1)

B

906

C

(536)

D

512

A+B-(C-D)

28,411

Goodwill (Note 2)

Note 1: Non-controlling interests are measured at the proportion of non-controlling interests to the fair valueof the acquiree’s identifiable net assets.
Note 2: Goodwill primarily reflects the ability to generate excess earnings in the future and synergies withexisting businesses. The goodwill does not include any amount which is expected to be deductible
for tax purposes.

19(4) Acquisition-related expenses
Line item:

Selling, general and administrative expenses

Amount:¥556 million(5) Effects on the consolidated statement of profit or loss
1) Acquiree’s financial results on and after the date of acquisition recognized in the consolidated statement of
profit or loss
(Million yen)
For the fiscal year ending
December 31, 2019
(From July 1, 2019
to September 30, 2019)
Revenue
7,825Profit1,0352) Effects on the consolidated statement of profit or loss in the case where the business combination is assumed
to have been executed at beginning of period(Million yen)
For the fiscal year ending
December 31, 2019
(From January 1, 2019
to September 30, 2019)
Revenue
21,960
Profit167

The pro forma information (unaudited information) has not been reviewed.
(6) Effects of business combination on cash flows(Million yen)AmountConsideration paid for acquisition

27,362

Cash and cash equivalents(3,813)Purchase of shares of subsidiaries

23,548(Significant subsequent events)
There is no relevant information.

20