Sherwin-williams Company (the) · NYSE:SHW
Sherwin-williams Company (the) — The Sherwin-Williams Company — Investor Presentation (2021)
34 slides from Sherwin-williams Company (the)'s investor presentation, Jul 2, 2021
Slide 1: 2021 Investor Presentation
2021 INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain certain "forward-looking statements," as defined under U.S. federal securities laws. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," “may,” “will,” “should," "project," "could," "plan,"
Slide 3: Why Invest in SHW?
Why Invest in SHW? GROWTH OPPORTUNITIES BALANCE SHEET & CASH GENERATION INDUSTRY-LEADING BRAND PORTFOLIO ATTRACTIVE RETURNS STRATEGIC PARTNERSHIPS DISTRIBUTION & SERVICE SUCCESSFUL ACQUISITIONS WORLD CLASS SUPPLY CHAIN EXPERIENCED MGMT & TALENT PIPELINE INNOVATIVE PRODUCTS RESPONSIBLE CORPORATE CITI
Slide 4: Strategy and Values
Strategy and Values Providing The Right Solutions While Creating Guided by For Our Customers Shareholder Value Our Values INNOVATION PERFORMANCE CUSTOMER INDUSTRY LEADING INNOVATION MARKET SHARE IMPROVE FOCUSED GROWTH ROS INTEGRITY GROWTH PEOPLE VALUE ADDED DIFFERENTIATED SERVICE & DISTRIBUTION EXPE
Slide 5: About Us
ABOUT US 61,000+ FOUNDED IN EMPLOYEES 1866 120+ 2020 REVENUES SALES BY $18.4 billion GEOGRAPHY COUNTRIES 80% 4,770+ US / CANADA THE AMERICAS 16% GROUP STORES PERFORMANCE 27% 57% COATINGS GROUP 20% 137 REST OF WORLD (ROW) MANUFACTURING CONSUMER & DISTRIBUTION BRANDS GROUP FACILITIES INDUSTRY-LEADING
Slide 6: The Americas Group
Results 22.1% 2020 Sales THE AMERICAS New DIY Residential 20.2% GROUP 19.4% 19.7% $10.2B $10.4B Residential Repaint $9.6B $9.1B New Commercial Protective Property & Marine Maintenance 2017 2018 2019 2020 KEY DIFFERENTIATORS CUSTOMER TRADEMARK EXCEPTIONAL STORE COLOR DIGITAL RELATIONSHIPS SERVICE PRO
Slide 7: The Americas Group Overview
GROUP OVERVIEW THE AMERICAS 4,770+ GROUP STORES 3,400+ SALES REPS 3,125+ 2,600+ 1,050+ MANAGEMENT DELIVERY DRIVERS TRAINEES HIRED TRUCKS IN 2020 7
Slide 8: Consumer Brands Group
Results 2020 Sales APAC CONSUMER 21.9% ANZ* EMEAI 17.5% BRANDS GROUP 15.5% 13.6% $3.1B $2.7B $2.7B $2.2B North America *On 3/31/2021, the Company divested Wattyl, an Australian 2017 2018 2019 2020 and New Zealand manufacturer and seller of paint and coatings. KEY DIFFERENTIATORS HERO PREMIER CHANNEL
Slide 9: Consumer Brands Group: Channel Partners and Hero Brands
STRATEGIC CHANNEL PARTNERS CONSUMER BRANDS GROUP HERO BRANDS 9
Slide 10: Performance Coatings Group
Results 2020 Sales Automotive General Industrial PERFORMANCE Refinish 14.1% 14.5% Protective 13.0% 12.9% & Marine COATINGS GROUP $5.2B $5.0B $4.9B $3.7B Packaging Industrial Wood Coil 2017 2018 2019 2020 KEY DIFFERENTIATORS LOCAL GLOBAL PRODUCT COLOR CUSTOMER SERVICE MODEL EXPERTISE INNOVATION SOLUT
Slide 11: Performance Coatings Group Markets
PERFORMANCE COATINGS GROUP PROTECTIVE COIL AUTOMOTIVE & MARINE REFINISH GENERAL INDUSTRIAL PACKAGING INDUSTRIAL WOOD 11
Slide 12: End-to-End Supply Chain
END-TO-END SUPPLY CHAIN D R I V E S C O N T I N U O U S I M P R O V E M E N T RESEARCH & GLOBAL SUPPLY CHAIN MANUFACTURING DISTRIBUTION TRANSPORTATION CUSTOMER DEVELOPMENT PROCUREMENT MANAGEMENT 12
Slide 13: Global Reach
GLOBAL REACH 243 21 230 CANADA PAINT STORES BRANCHES 4 7 BRANCHES & FACILITIES FACILITIES FACILITIES & FACILITIES 4,148 UNITED STATES 39 EMEAI PAINT 2 9 85 STORES BRANCHES ASIA-PACIFIC 7 & FACILITIES 46 FACILITIES FACILITIES PAINT FACILITIES STORES BRANCHES & FACILITIES CARIBBEAN 30 LATIN AMERICA /
Slide 14: Innovation
Innovation World Class Research & Development Leads to World Class New Products Maintenance & RAW MATERIALS TECHNOLOGY Durability Visual Appearance Custom Solutions Sustainability The Painting Process Time & Labor 14
Slide 15: Our Sustainability Pillars
Our Sustainability Pillars Sustainability Commitments Our Environmental Our Product Our Social Footprint Blueprint Imprint Climate Chemical Management Employee Engagement Energy Sustainably Advantaged Products Inclusion, Diversity & Equity Waste Lifecycle Assessment Community Engagement Emissions Em
Slide 16: Sustainable Product Stewardship
Sustainable Product Stewardship Ultra 9K® EcoSelect® ProMar® Krylon AquaGuard® valPure® V70 Powdura® Harmony® ProMar® SuperDeck® Waterborne Zero VOC 400 Quik-Tap™ Coating Solutions Non-BPA Epoxy ECO Zero VOC 200 HP Waterborne Basecoat Interior Latex Zero VOC Reusable Zinc-Free & Powder Coatings Inte
Slide 17: Financial Highlights
Financial Highlights Sales Adjusted EBITDA* Adjusted EPS* Net Operating Cash $ in billions $ in millions Reflects March 31, 2021 Stock Split $ in millions $18.4 $17.9 $3,441 $17.5 $3,409 $3,057 $8.19 $2,822 $15.0 $7.04 $2,423 $2,321 $6.18 $1,944 $2,007 $5.02 $1,884 $11.9 $1,809 $4.28 $11.3 $1,447 $3
Slide 18: Consistent Capital Allocation
Consistent Capital Allocation CONSISTENT CAPITAL ALLOCATION PHILOSOPHY: WE WILL NOT HOLD CASH CAPEX Dividend Strategic Share Investment Target 30% of M&A Repurchase Modest PY GAAP Clearly Defined Absent Strategic Requirements Earnings Criteria M&A <2.0% 42 11 93 TARGET AS CONSECUTIVE ACQUISITIONS MI
Slide 19: Returning Cash to Shareholders
Returning Cash to Shareholders All Amounts Reflect March 31, 2021 Stock Split Dividends Per Share Stock Repurchases (millions of shares) ~$8 BILLION INVESTED OVER LAST DECADE 2020 WAS THE 42ND $2.20* CONSECUTIVE YEAR 20.8 OF DIVIDEND INCREASES $1.79 Shares Avg. Price per Share $209.08 $1.51 14.1 13.
Slide 20: Comparison of Cumulative Five-Year Total Return
Comparison of Cumulative Five-Year Total Return $300 $250 $200 $150 $100 2015 2016 2017 2018 2019 2020 Peer group of companies comprised of the following: Akzo Nobel N.V., Axalta Coating Systems Ltd., BASF SE, Genuine Parts Company, H.B. Fuller Company, The Home Depot, Inc., Lowe’s Companies, Inc.,
Slide 21: Why Invest in SHW?
Why Invest in SHW? GROWTH OPPORTUNITIES BALANCE SHEET & CASH GENERATION INDUSTRY-LEADING BRAND PORTFOLIO ATTRACTIVE RETURNS STRATEGIC PARTNERSHIPS DISTRIBUTION & SERVICE SUCCESSFUL ACQUISITIONS WORLD CLASS SUPPLY CHAIN EXPERIENCED MGMT & TALENT PIPELINE INNOVATIVE PRODUCTS RESPONSIBLE CORPORATE CITI
Slide 22: Appendix
Appendix SELECTED FINANCIAL & MARKET DATA 22
Slide 23: Global Paints & Coatings Industry
Global Paints & Coatings Industry Top Global Manufacturers Paint & Coatings Industry Coatings Industry 2020 Global Mix by Category (Based on $) Global Market Top 10 Suppliers ~50% Total Coatings 2020 Special Purpose Architectural Coatings Paints ~ 10.1 Billion 40% 20% Gallons All Others (Thousands ~
Slide 24: U.S. Architectural Paint Industry
U.S. Architectural Paint Industry New Residential Non-Residential Repaint (Pro) 5% 30% (44M Gal) (254M Gal) Non-Residential Repaint (Pro) 12% New Residential (103M Gal) 12% (102M Gal) DIY 41% (355M Gal) Sources: ACA, Department of Commerce, Dodge Data & Analytics, & Company Estimates ~858 Million Ga
Slide 25: U.S. Architectural Paint Industry: Gallons and Square Footage
U.S. Architectural Paint Industry Architectural Paint Gallons Non-Residential & Residential Square Footage 900 2020 270,000 ~858 Million (~3.2% YoY) 850 PRIOR 260,000 PEAK Millions of Gallons 800 250,000 Sq. Ft in Thousands 750 240,000 700 230,000 650 PRIOR PEAK 220,000 600 210,000 550 200,000 500 2
Slide 26: DIY Contractor Shift Expected to Continue in U.S. & Canada
DIY Contractor Shift Expected to Continue in U.S. & Canada 41% 59% DIY/ Remodeler Paint Contractor 59% 41% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 201
Slide 27: U.S. Demographics
U.S. Demographics SILENT BABY BOOMERS GEN X MILLENNIALS iGEN (GEN Z) 1928-1945 1946-1964 1965-1980 (GEN Y) 1997-2012 1981-1996 - Transitioning to Senior Living - Aging in place; driving - Move up creates churn and - Forming households - Will further extend Facilities remodeling spend drives remodeli
Slide 28: Debt Summary
Debt Summary (As of March 31, 2021) Maturities of Long-Term Debt Fixed vs. Floating Rate Debt EUR $1,619 Fixed Floating USD 9% $1,250 91% $800 $660 $650 $650 $550 $500 $500 $500 $350 $300 $24 $4 2023 2026 2021 2022 2024 2025 2027 2028 2029 2030 2042 2045 2046 2047 2048 2049 2050 2097 … … … 28
Slide 29: The Americas Group's Stores
The Americas Group’s Stores UNITED STATES Louisiana 72 Oregon 60 Newfoundland 1 Alabama 74 Maine 24 Pennsylvania 203 Nova Scotia 7 Alaska 7 Maryland 84 Rhode Island 12 Ontario 100 243 PAINT Arizona 70 Massachusetts 64 South Carolina 91 Prince Edward Island 1 STORES CANADA Arkansas 48 Michigan 122 So
Slide 30: Sherwin-Williams North American Paint Store Footprint
Sherwin-Williams North American Paint Store Footprint 30
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Management utilizes certain financial measures (including adjusted segment profit, adjusted EBITDA and adjusted diluted net income per share) that are not in accordance with U.S. generally accepted accounting principles (US GAAP) to analyze and manage the performance of t
Slide 32: Adjustments to Segment Profit
Adjustments to Segment Profit GAAP to Adjusted Pre-Tax Income by Segment Consumer Brands Group Performance Coatings Group ($ in millions) 2017 2018 2019 2020 ($ in millions) 2017 2018 2019 2020 Net external sales $ 2,154.7 $ 2,739.1 $ 2,676.8 $ 3,053.4 Net external sales $ 3,706.1 $ 5,166.4 $ 5,049.
Slide 33: Regulation G Reconciliation: Adjusted EBITDA
Regulation G Reconciliation Adjusted EBITDA ($ in millions) 2015 2016 2017 2018 2019 2020 Net income from continuing operations $ 1,053.8 $ 1,132.7 $ 1,769.5 $ 1,108.7 $ 1,541.3 $ 2,030.4 Interest expense 61.8 154.1 263.5 366.7 349.3 340.4 Income taxes 495.2 462.5 (300.2) 251.0 440.5 488.8 Depreciat
Slide 34: Regulation G Reconciliation: Adjusted EPS
Regulation G Reconciliation Adjusted EPS Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 Tax After- Tax After- Tax After- Tax After- Tax After- Tax After- Pre-Tax Pre-Tax Pre
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