Consolidated Financial Results
for the Fiscal Year Ended December 31, 2019
[IFRS]
February 13, 2020
Company name: NIPPON PAINT HOLDINGS CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 4612
URL: https://www.nipponpaint-holdings.com/
Representative: Masaaki Tanaka, Chairman of the Board, Representative Director of the Board, President & CEO
Contact: Ryosuke Tanaka, General Manager of Investor Relations
Phone: +81-6-6455-9140
Scheduled date of annual general meeting of shareholders: March 26, 2020
Scheduled date of commencing dividend payments: March 27, 2020
Scheduled date of filing the securities report: March 27, 2020
Availability of supplementary briefing material on consolidated financial results: Yes
Schedule of consolidated financial results briefing session: Yes(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Fiscal Year Ended December 31, 2019 (January 1, 2019 to
December 31, 2019)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Revenue
Operating profit
Profit before tax
ProfitFiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
692,009
10.3
78,060(9.8)
79,518 (10.7)
56,267 (15.2)
December 31, 2019
December 31, 2018627,670
2.9
86,542
1.3
89,075
1.5
66,316 (5.4)

Fiscal year ended
December 31, 2019
December 31, 2018

Profit attributable toowners of parent

Comprehensive
incomeMillion yen%

Million yen%

36,71745,351(19.0)(8.0)

32,66436,083(9.5)(54.1)

Basic earnings
per share

Fiscal year ended
December 31, 2019
December 31, 2018

Diluted earnings
per share

Return on
equityProfit before tax
to total assets

Operating profit
to revenue

Yen

Yen

%

%

%

114.48141.41114.45141.39

6.8
8.8

6.5
9.5

11.3
13.8

Reference: Share of profit of investments accounted for using equity method: Fiscal year ended December 31, 2019: ¥1,438 million
Fiscal year ended December 31, 2018: ¥1,235 million(2) Consolidated Financial Position

Total assets

As of December 31, 2019
As of December 31, 2018

Total equity

Equityattributable toowners ofparentEquityattributable toowners ofparent to total
assetsEquity per
share
attributable toowners ofparentMillion yen

Million yen

Million yen%

Yen

1,478,646
953,988687,979
647,618

552,922520,04737.4
54.5

1,723.75
1,621.54

(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at endof period

Million yen

Million yen

Million yen

Million yen

92,076
61,533(352,769)(37,439)

254,018
6,228

123,300
129,633

Fiscal year ended
December 31, 2019
December 31, 2018
2. Dividends

Annual dividends

Fiscal year ended
December 31, 2018
December 31, 2019

3rd
quarter- Year-end
end

Consolidated
Consolidated dividend on
Total
dividend
equitydividends
payoutattributable
paid
ratio
to owners ofparentMillion yen%%

1stquarter-end

2ndquarterend

Yen

Yen

Yen

Yen

Yen

－

22.00

－

23.00

45.00

14,431

31.8

2.8

－

22.00

－

23.00

45.00

14,435

39.3

2.7

Total

Note: The dividends forecast for the fiscal year ending December 31, 2020 is yet to be determined as the financial results forecast is
being examined at this time.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending December 31, 2020 (January 1, 2020 to
December 31, 2020)
The consolidated financial results forecast for the fiscal year ending December 31, 2020 is yet to be determinedas the Company is monitoring the epidemic situation of the novel coronavirus and cannot determine the financial
results forecast reasonably at this time. The financial results forecast will be disclosed promptly when it becomes
possible to make a forecast.

* 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):December 31, 2019: 325,402,443 shares
December 31, 2018: 325,402,443 shares2) Total number of treasury shares at the end of the period:
December 31, 2019: 4,635,484 shares
December 31, 2018: 4,689,703 shares
3) Average number of shares during the period:
Fiscal year ended December 31, 2019: 320,732,869 sharesFiscal year ended December 31, 2018: 320,704,276 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. Overview of Operating Results ....................................................................................................... 2(1) Overview of Operating Results for the Period under Review ....................................................... 2(2) Overview of Financial Position for the Period under Review ....................................................... 3(3) Overview of Cash Flows for the Period under Review ................................................................. 3(4) Future Outlook ............................................................................................................................ 4
2. Basic Approach to Selection of Accounting Standards ..................................................................... 4
3. Consolidated Financial Statements and Primary Notes .................................................................... 5(1) Consolidated Statements of Profit or Loss and Comprehensive Income ....................................... 5(2) Consolidated Statement of Financial Position .............................................................................. 7(3) Consolidated Statement of Changes in Equity ............................................................................. 9(4) Consolidated Statement of Cash Flows ...................................................................................... 10(5) Notes to Consolidated Financial Statements ............................................................................... 11(Notes on going concern assumption) .................................................................................... 11(Changes in accounting policies) ........................................................................................... 11(Changes in presentation) ...................................................................................................... 11(Segment information) ......................................................................................................... 12(Impairment loss) ................................................................................................................. 15(Business combinations, etc.) ............................................................................................... 16(Per-share information) ......................................................................................................... 21(Significant subsequent events) ............................................................................................ 21

1

1. Overview of Operating Results(1) Overview of Operating Results for the Period under Review
During the fiscal year ended December 31, 2019, consolidated revenue of the Company and its groupcompanies (collectively, the “Group”) increased by 10.3% from the corresponding period of the previous year(the “previous year”) to ¥692,009 million due to the favorable decorative paint business in China and theacquisition of ownership of Australian paint manufacturer DuluxGroup Limited and Turkish paint manufacturer
Betek Boya ve Kimya Sanayi Anonim Sirketi, despite the effects of yen appreciation. Consolidated operating
profit decreased by 9.8% from the previous year to ¥78,060 million due to the recording of an impairment loss
on the Europe Automotive Business Group and an Indian automotive business company, despite low raw material
prices and the subsidy income related to the removal of factories resulting from an environmental regulation in
China in the previous year. Consolidated profit before tax decreased by 10.7% from the previous year to ¥79,518
million, and profit attributable to owners of parent decreased by 19.0% from the previous year to ¥36,717 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 at the same level as the previous year in an environment
where the number of automobiles manufactured remained solid, despite the effects of the consumption tax
increase and a decrease in the export of products. As for industrial coatings, revenue was at the same level as theprevious year, impacted by a decline in market conditions resulting from the disasters that occurred in the fourth
quarter of the fiscal year under review and the tax increase, despite an increase in demand for the fiscal year
under review in line with restoration works following the natural disasters that occurred in the previous year. As
for decorative 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 decreased by 0.1% from the previous year to¥182,585 million. Consolidated operating profit decreased by 15.2% from the previous year to ¥36,990 million
due to factors such as the recording of share acquisition-related expenses associated with the corporate acquisition
announced in April 2019. ¥13,585 million of dividend income from overseas group companies (¥14,012 million
in the previous year) is included in the consolidated operating profit. All of this dividend income is eliminatedunder intersegment eliminations and other adjustments as it is an internal transaction.
Asia
In this region, revenue for automotive coatings was lower than the previous year due to a decrease in thenumber of automobiles manufactured in China, India, and Thailand from the previous year. As for decorative
paints, a primary 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 forexteriors in China, in spite of stagnant market conditions in Singapore, etc.
As a result, consolidated revenue for the Asia segment increased by 1.0% from the previous year to ¥359,213
million. Consolidated operating profit decreased by 3.1% from the previous year to ¥50,769 million due to theeffects of yen appreciation, the subsidy income related to the removal of factories resulting from an environmental
regulation in China in the previous year, and the recording of an impairment loss on an Indian automotive businesscompany, 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 decorative 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.
2As a result, consolidated revenue for the Oceania segment was ¥47,578 million, and consolidated operating
profit was ¥5,861 million.
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 decorative 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 decreased by 0.8% from the previous year to¥74,618 million. Consolidated operating profit increased by 0.4% from the previous year to ¥5,010 million due
to factors such as improved product mix for decorative paints.
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 101.5% from the previous year to ¥28,012
million, and consolidated operating loss was ¥6,972 million, compared to an operating loss of ¥529 million in
the previous year, due to the recording of an impairment loss on the Europe Automotive Business Group.

(2) Overview of Financial Position for the Period under Review
Total assets at the end of the fiscal year ended December 31, 2019 increased by ¥524,657 million from theend of the previous fiscal year to ¥1,478,646 million. Current assets increased by ¥63,001 million from the endof the previous fiscal year mainly due to increases in trade and other receivables and inventories, despite adecrease in cash and cash equivalents. Additionally, non-current assets increased by ¥461,656 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,
intangible assets, and goodwill resulting from the acquisition of DuluxGroup Limited and Betek Boya ve Kimya
Sanayi Anonim Sirketi.
Liabilities increased by ¥484,297 million from the end of the previous fiscal year to ¥790,667 million mainly
due to an increase in borrowings in line with the acquisition of DuluxGroup Limited and Betek Boya ve Kimya
Sanayi Anonim Sirketi.
Equity increased by ¥40,360 million from the end of the previous fiscal year to ¥687,979 million. This was
mainly attributable to an increase in foreign currency translation adjustment and an increase in retained earnings
due to the recording of profit attributable to owners of parent.
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 37.4%.
(3) Overview of Cash Flows for the Period under Review
In the fiscal year ended December 31, 2019, operating activities resulted in an inflow of ¥92,076 million,
investing activities resulted in an outflow of ¥352,769 million, and financing activities resulted in an inflow of¥254,018 million, resulting in cash and cash equivalents (hereinafter “cash”) of ¥123,300 million, a decrease of¥6,333 million compared to the end of the previous fiscal year.
(Cash flows from operating activities)
Net cash provided by operating activities increased by ¥30,542 million from the previous year to ¥92,076
million. Primary factors include an increase in cash of ¥1,813 million due to a decrease in operating capital andincome taxes paid of ¥22,849 million, despite a cash inflow (excluding increases and decreases in operating3

capital) of ¥113,112 million, reflecting mainly non-cash expenses such as depreciation and amortization on profit
before tax.
(Cash flows from investing activities)
Net cash used in investing activities increased by ¥315,329 million from the previous year to ¥352,769
million. This was mainly attributable to an outflow of ¥318,655 million due to the acquisition of subsidiaries andan outflow of ¥22,764 million due to the purchase of property, plant and equipment.
(Cash flows from financing activities)
Net cash provided by financing activities increased by ¥247,789 million from the previous year to ¥254,018
million. Primary factors include an inflow of ¥301,178 million due to an increase in short-term borrowings, anoutflow of ¥21,209 million due to repayments of long-term borrowings, and an outflow of ¥26,743 million due
to dividends paid.

(4) Future Outlook
The consolidated financial results forecast for the fiscal year ending December 31, 2020 is yet to be
determined as the Company is monitoring the epidemic situation of the novel coronavirus and cannot determine
the financial results forecast reasonably at this time. The financial results forecast will be disclosed promptly
when it becomes possible to make a forecast.

2. Basic Approach to Selection of Accounting Standards
In order to further promote global management, improve the comparability of financial information, andenhance disclosure by standardizing accounting procedures amongst group companies, the Group has voluntarily
adopted International Financial Reporting Standards (IFRS) for consolidated financial statements in its annual
securities reports from the fiscal year ended December 31, 2018.

4

3. Consolidated Financial Statements and Primary Notes(1) Consolidated Statements of Profit or Loss and Comprehensive Income
Consolidated Statement of Profit or Loss
(Million yen)
For the fiscal year ended
December 31, 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 tax expense
ProfitProfit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)5

For the fiscal year ended
December 31, 2019627,670(385,506)
242,164(164,142)
10,700(2,179)86,542
4,432(3,134)

692,009(416,359)
275,649(190,435)
6,717(13,871)
78,0605,749(5,729)

1,235

1,438

89,075(22,758)
66,316

79,518(23,251)
56,26745,351
20,96566,31636,717
19,55056,267141.41141.39114.48114.45

Consolidated Statement of Comprehensive Income(Million yen)
For the fiscal year ended
December 31, 2018

For the fiscal year ended
December 31, 2019

66,31656,267(4,895)

3,229(1,353)(828)(6,248)2,400(23,070)

7,080－(32,737)

(914)

(346)

Comprehensive income(23,985)(30,233)
36,083(26,003)(23,602)32,664Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

22,752
13,33036,083

14,92917,73532,664

ProfitOther comprehensive income
Items that will not be reclassified to profit or loss
Net change in fair value of equity instruments
designated as measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans
Total of items that will not be reclassified to profit orloss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Cash flow hedges
Share of other comprehensive income of investments
accounted for using equity method
Total of items that may be reclassified to profit or loss
Total other comprehensive income6(2) 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

7(Million yen)
As ofDecember 31, 2019

129,633
65,807179,269
59,7759,456
443,941272
444,214

123,300
92,860212,844
65,158
12,623506,787428
507,216

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

240,319427,091
230,986
12,68054,381
2,818
3,151
971,430
1,478,646

As ofDecember 31, 2018

(Million yen)
As ofDecember 31, 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

153,277
384,049
12,4706,739
2,197
39,413598,147

Total liabilities

37,881
5,558
19,572385
1,209
25,98690,593306,370

58,14744,681
24,382900
1,847
62,560
192,519790,667

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

78,862
62,927(6,378)411,941
5,568
552,922
135,056
687,979
1,478,646－

Non-current liabilities
Bonds and borrowings
Other financial liabilities
Retirement benefit liability
Provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities8(3) Consolidated Statement of Changes in Equity(Million yen)
Equity attributable to owners of parent

Share capital

Balance as of January 1, 2018

CapitalsurplusTreasurysharesRetainedearnings

Other
components ofequityNoncontrollinginterests

Total

Total

78,862

63,262(6,454)360,249

15,471

511,392

125,549

636,941

Profit－－－45,351－45,351

20,96566,316

Other comprehensive income

－

－

－

－

(22,599)(22,599)(7,634)(30,233)

Comprehensive income

－

－

－

45,351(22,599)

22,752

13,33036,083Purchase of treasury shares

－

－

(7)

－

－

(7)

－

(7)

Disposal of treasury shares

－

18

16

－

(35)

0

－

0

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

Share-based payment transactions

－

－

－

－

54

54

－

54

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
Capital increase of consolidated
subsidiaries

－

－

－

(1,202)

1,202

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

790

790

Other

－

－

－

－

－

－

(97)

(97)

Total transactions with owners

－

(15)

9

(15,313)1,222(14,096)(11,309)(25,406)

Balance as of December 31, 201878,862

63,247(6,444)

390,287(5,905)520,047

127,570647,618

Profit－－－36,717－36,717

19,55056,267

Other comprehensive income

－

－

－

－

(21,787)(21,787)(1,815)(23,602)

Comprehensive income

－

－

－

36,717(21,787)

14,92917,73532,664Purchase of treasury shares

－

－

(11)

－

－

(11)

－

(11)

Disposal of treasury shares

－

162

77

－

(5)

234

－

234

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

Share-based payment transactions

－

－

－

－

10

10

－

10

Changes in ownership interest in
subsidiaries

－

(481)

－

－

－

(481)

(441)

(922)

Change in scope of consolidation

－

－

－

－

－

－

493

493

Transfer from other componentsof equity to retained earnings

－

－

－

(629)

629

－

－

－

Transfer from other componentsof equity to non-financial assets

－

－

－

－

32,62632,626－32,626

Capital increase of consolidated
subsidiaries

－

－

－

－

－

－

1,793

1,793

Other

－

－

－

－

－

－

(47)

(47)

Total transactions with owners

－

(319)

66

(15,063)

33,261

17,945(10,249)

7,695

Balance as of December 31, 201978,862

62,927(6,378)411,941

5,568

552,922

135,056

687,9799

(4) Consolidated Statement of Cash Flows(Million yen)
For the fiscal year ended
December 31, 2018

For the fiscal year ended
December 31, 2019

89,075
18,39032(2,432)
1,261

79,51825,76911,315(4,640)
4,782(1,235)(1,438)Cash flows from operating activities
Profit before tax
Depreciation and amortization
Impairment loss
Interest and dividend income
Interest expenses
Share of loss (profit) of investments accounted forusing
equity method
Loss (gain) on sale and retirement of property, plant andequipment, 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 (used in) operating activities(5,158)

(918)

1,220
(9,176)(1,625)(121)(2,128)(4,015)84,0871,384
1,930(1,348)(24,521)61,533(2,306)
(586)
4,706
(820)
(834)
36
114,583
2,543
2,095(4,297)(22,849)
92,076

Cash flows from investing activities
Net decrease (increase) in time deposits
Net decrease (increase) in marketable securities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Payments for acquisition of subsidiaries
Payments for sale of shares of subsidiaries
Payments for acquisition of businesses
Payments for loans receivable
Other
Net cash provided by (used in) investing activities(34,472)
12,333(18,399)
6,202(1,676)(63)(1,868)
－
－
(543)
1,048
(37,439)(4,518)(1,167)(22,764)
4,205(2,679)(237)(318,655)(57)(2,622)(3,612)(658)(352,769)

22,354
16,995(7,104)(629)
689(14,110)(12,038)70
6,228

301,178
7,054(21,209)(8,133)
1,881(14,433)(12,310)(8)
254,018(2,565)341

27,757
101,876
129,633(6,333)
129,633
123,300

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 obligations
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 period10(5) Notes to 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 fiscal year ended December 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 obligations increased by ¥20,860
million, and other non-current assets decreased by ¥12,429 million. Right-of-use assets and lease obligations 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.

(Changes in presentation)(Consolidated statement of cash flows)“Impairment loss,” which was included in “Other” under “Cash flows from operating activities” during theprevious fiscal year, has become significant in value, and is separately presented from the fiscal year ended
December 31, 2019. To reflect this change, the consolidated financial statements for the previous fiscal year havebeen rearranged.
As a result, “Other” of ¥(3,982) million, which was presented in “Cash flows from operating activities” on
the consolidated statement of cash flows during the previous fiscal year, has been rearranged to “Impairment loss”
of ¥32 million and “Other” of ¥(4,015) million.
“Income taxes refund,” which was separately presented in “Cash flows from operating activities” during theprevious fiscal year, is no longer significant in value, and is included in “Income taxes paid” from the fiscal year
ended December 31, 2019. To reflect this change, the consolidated financial statements for the previous fiscal year
have been rearranged.
As a result, “Income taxes paid” of ¥(24,968) million and “Income taxes refund” of ¥447 million, which were
presented in “Cash flows from operating activities” on the consolidated statement of cash flows during the previous
fiscal year, have been rearranged to “Income taxes paid” of ¥(24,521) million.
“Payments into time deposits” and “Proceeds from withdrawal of time deposits,” which were separately
presented in “Cash flows from investing activities” during the previous fiscal year, are no longer significant invalue, and are presented as “Net decrease (increase) in time deposits” from the fiscal year ended December 31,
2019. To reflect this change, the consolidated financial statements for the previous fiscal year have been rearranged.
As a result, “Payments into time deposits” of ¥(37,021) million and “Proceeds from withdrawal of time
deposits” of ¥2,549 million, which were presented in “Cash flows from investing activities” on the consolidated
statement of cash flows during the previous fiscal year, have been rearranged to “Net decrease (increase) in time
deposits” of ¥(34,472) million.
“Payments for loans receivable,” which was included in “Other” under “Cash flows from investing activities”
during the previous fiscal year, has become significant in value, and is separately presented from the fiscal year
ended December 31, 2019. To reflect this change, the consolidated financial statements for the previous fiscal year
have been rearranged.

11As a result, “Other” of ¥505 million, which was presented in “Cash flows from investing activities” on the
consolidated statement of cash flows during the previous fiscal year, has been rearranged to “Payments for loans
receivable” of ¥(543) million and “Other” of ¥1,048 million.
“Repayments of lease obligations,” which was included in “Other” under “Cash flows from financing
activities” during the previous fiscal year, has become significant in value, and is separately presented from thefiscal year ended December 31, 2019. To reflect this change, the consolidated financial statements for the previous
fiscal year have been rearranged.
As a result, “Other” of ¥(558) million, which was presented in “Cash flows from financing activities” on the
consolidated statement of cash flows during the previous fiscal year, has been rearranged to “Repayments of leaseobligations” of ¥(629) million and “Other” of ¥70 million.

(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, decorative 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 businessgrowth.
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 fiscal year
ended December 31, 2019.
Segment information for the previous fiscal year is presented based on the changed reportable segmentcategories.

12(2) Information on reportable segments
For the fiscal year ended December 31, 2018 (From January 1, 2018 to December 31, 2018)(Million yen)
Reportable segment
Japan

Asia

182,817

Intersegment revenue

Other

Total

Adjustment(Note 1)

Consolidated
financialstatements

Oceania

Americas

Subtotal

355,746－

75,207613,770

13,900627,670－

627,670

34,911

3,480

－

217

38,609738

39,348(39,348)－

Total

217,729359,226－

75,424652,380

14,638667,018(39,348)627,670

Segment profit (loss)

43,63652,418－

4,989

101,044(529)

100,514(13,972)

86,542

Revenue
Revenue fromexternal customers

Finance income

4,432

Finance costs
Share of profit ofinvestments accounted
for using equity
methodProfit before tax(3,134)
1,235
89,075

Other items
Depreciation and
3,815
11,5072,850
18,174216
18,390－－amortization
Impairment loss
16
16
16
32
－
－
－
－
Capital expenditures
3,990
13,1292,608
19,7282,725
22,453－－(Note 2)
Note 1: Adjustments to “intersegment revenue” and “segment profit (loss)” are primarily due to intersegment eliminations.
Note 2: These mainly consist of expenditures for property, plant and equipment and intangible assets.

13

18,39032
22,453

For the fiscal year ended December 31, 2019 (From January 1, 2019 to December 31, 2019)(Million yen)
Reportable segment
Other

Total

Adjustment(Note 1)

Consolidated
financialstatements

Japan

Asia

Oceania

Americas

Subtotal

182,585359,21347,57874,618663,996

28,012

692,009－

692,009

Intersegment revenue

34,028

4,051

－

142

38,221846

39,067(39,067)－

Total

216,614363,264

47,57874,760702,218

28,858731,077(39,067)

692,009

Segment profit (loss)

36,99050,769

5,861

5,010

98,632(6,972)91,659(13,599)

78,060

Revenue
Revenue fromexternal customers

Finance income

5,749

Finance costs
Share of profit ofinvestments accounted
for using equity
methodProfit before tax(5,729)1,438
79,518Other items
Depreciation and
4,284
13,491
2,169
4,617
24,562
1,207
25,769－amortization
Impairment loss
734
2,630
131
3,497
7,818
11,315－－
Capital expenditures
7,077
15,651
1,383
7,313
31,426
3,836
35,263－(Note 2)
Note 1: Adjustments to “intersegment revenue” and “segment profit (loss)” are primarily due to intersegment eliminations.
Note 2: These mainly consist of expenditures for property, plant and equipment and intangible assets.

14

25,76911,31535,263

(3) Information on products and services
Sales categories by business have been changed to the “paint and coating business” and the “paint peripheralbusiness” in the fiscal year ended December 31, 2019.
Revenue for the previous fiscal year is presented based on the changed sales categories by business.
For the fiscal year ended December 31, 2018 (From January 1, 2018 to December 31, 2018)(Million yen)
Japan

Asia

Paint and coating business

182,817355,746－

75,207

13,900627,670

Automotive coatings

45,837

74,188－27,31012,846160,182

Decorative paints

46,823231,056－

44,630－322,511

Industrial coatings

40,61627,886－－261

68,764

Fine chemicals

8,907

6,626

－

3,095

759

19,390

Other paints

40,632

15,987－170

3156,822

－

－

－

－

－

－

182,817355,746－

75,207

13,900627,670

Paint peripheral business
Total

Oceania

Americas

Other

Total

For the fiscal year ended December 31, 2019 (From January 1, 2019 to December 31, 2019)(Million yen)
Japan

Asia

Paint and coating business

182,585359,213

Automotive coatings

44,879Decorative paints

48,248Industrial coatings

40,69025,643

Fine chemicals

8,693

6,047

Other paints

40,074

Paint peripheral business
Total

Oceania

Americas

Other

Total

26,582

74,61823,462

666,462

67,070－25,915

11,777

149,643

243,671

24,57745,3898,804

370,690

2,004

－

1,832

70,170

－

3,135

1,043

18,92016,779－177

457,036－－20,996－4,550

25,547

182,585359,21347,57874,61828,012

692,009(Impairment loss)
In the fiscal year ended December 31, 2019, an impairment loss of ¥11,315 million was recorded partly due
to a profitability decline in line with revisions to the business plans of some consolidated subsidiaries of theCompany. The impairment loss is included in “Other expenses” on the consolidated statement of profit or loss.
The main components of the impairment loss are as follows.
(Million yen)
Reportable segment

Type

AmountProperty, plant and equipment
Asia

Goodwill

1,125

Other intangible assets

Other

718

786

Property, plant and equipment

6,749

Goodwill

1,046

Other intangible assets

23

15

(Business combinations, etc.)
For the fiscal year ended December 31, 2018 (From January 1, 2018 to December 31, 2018)
There is no relevant information.
For the fiscal year ended December 31, 2019 (From January 1, 2019 to December 31, 2019)(Acquisition (acquisition of ownership) of Australian DuluxGroup Limited)(1) Overview of business combination
1) Name and business of acquiree
Name of acquiree: DuluxGroup Limited and its 42 subsidiaries

and sale of premium branded paint & coatings and home
Description of business : Manufacture
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 wealth of
iconic brands especially in the decorative paint segment and continues to expand its market share ahead of
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

54,141Intangible assets

125,809

Other assets

52,342

Fair value of liabilities assumed
Fair value of assets acquired and liabilities
assumed, net(134,350)
100,84816

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

Note: Consideration for acquisition is allocated to assets and liabilities based on the fair value at the date ofobtaining control. The allocation of consideration for acquisition was completed at the end of the
fiscal year ended December 31, 2019. Revisions to the initial provisional amounts are as follows.
Property, plant and equipment¥6,468 million increase
Intangible assets¥120,099 million increase
Fair value of liabilities assumed¥37,970 million increase
Goodwill¥88,597 million decrease(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

100,848

D(156)

A+B-(C-D)

193,647

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 ended
December 31, 2019
(From September 1, 2019
to December 31, 2019)
Revenue
47,578
Profit3,628

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 ended
December 31, 2019
(From January 1, 2019
to December 31, 2019)
Revenue
138,128
Profit6,320

The pro forma information (unaudited information) has not been audited.
(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 thedecorative paint market in Turkey. Its major brands Filli Boya and Fawori have a large market share and ahigh 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
at which Betek Boya ve Kimya Sanayi Anonim Sirketi will expand its business. Accordingly, the Company
18

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

7,917

Other assets

22,623

Fair value of liabilities assumed
Fair value of assets acquired and liabilities
assumed, net(36,812)5,777

Trade and other receivables(Million yen)Contractual amount due
Trade receivables
Receivables
Total
Best estimate of contractual cash flows notexpected to be collected
Net total

Fair value

17,251

14,566327

327

17,57914,893(2,685)－

14,893

14,893

Note: Consideration for acquisition is allocated to assets and liabilities based on the fair value at the date ofobtaining control. The allocation of consideration for acquisition was completed at the end of the
fiscal year ended December 31, 2019. Revisions to the initial provisional amounts are as follows.
Intangible assets¥7,897 million increase
Fair value of liabilities assumed¥1,584 million increaseNon-controlling interests¥18 million increase
Goodwill¥6,295 million decrease(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

5,777

D

531

A+B-(C-D)

22,116

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 ended
December 31, 2019
(From July 1, 2019
to December 31, 2019)
Revenue
15,080
Profit2,0682) 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 ended
December 31, 2019
(From January 1, 2019
to December 31, 2019)
Revenue
29,220
Profit1,212

The pro forma information (unaudited information) has not been audited.
(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

23,54820

(Per-share information)
The basis of calculations of basic earnings per share and diluted earnings per share is as below.
For the fiscal year ended
December 31, 2018

For the fiscal year ended
December 31, 201945,351

36,717－－

Diluted earnings (million yen)

45,351

36,717Weighted-average number of common shares issued(thousands of shares)

320,704

320,732

50

72

Increase due to exercise of stock options(thousands of shares)

50

52

Increase due to restricted share compensation
plan (thousands of shares)－

20

Weighted-average number of common shares usedin the calculation of diluted earnings per share(thousands of shares)

320,754

320,805

Basic earnings per share (yen)141.41114.48

Diluted earnings per share (yen)141.39114.45

Profit attributable to owners of parent (million yen)
Adjustment to profit used in the calculation ofdiluted earnings per share (million yen)

Increase in the number of common shares used in
the calculation of diluted earnings per share(thousands of shares)(Significant subsequent events)
There is no relevant information.

21