Rpm International Inc. · NYSE:RPM
Rpm International — Q2 2024 Earnings Presentation
31 slides from Rpm International's earnings presentation, Jan 4, 2024
Slide 1: Fiscal 2024 Second-Quarter Results
Fiscal 2024 Second-Quarter Results January 4, 2024
Slide 2: Forward-Looking Statements & Regulation G
Forward-Looking Statements & Regulation G This presentation contains “forward-looking statements” relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us and are subject to uncert
Slide 3: Record Consolidated Q2-24 Sales and Adjusted EBIT
Record Consolidated Q2-24 Sales and Adjusted EBIT Q2-24 FINANCIAL HIGHLIGHTS Consolidated Sales and Adjusted EBIT Growth 40% Sales Growth Adj. EBIT Growth(1) 36.4% 35% 33.1% $1.79B 30% 25% RECORD Q2 SALES UP SLIGHTLY FROM PY 20% 17.1% 15% 13.0% 13.7% 11.7% 12.3% 9.3% 10.4% 8 Consecutive 10% Quarters
Slide 4: Strong Execution and MAP 2025 Drive Record Consolidated Results
Strong Execution and MAP 2025 Drive Record Consolidated Results 2-Year Stacked Consolidated Q2 Growth CPG PCG SPG Consumer Consolidated 60% 50.6% Record Sales Q2-24 50% Record Adjusted EBIT¹ Q2-24 40% 30% HIGHLIGHTS • Record Q2 consolidated sales with strength in infrastructure, reshoring and high-
Slide 5: Sales Growth in USD by Region | Q2-24
Sales Growth in USD by Region | Q2-24 EUROPE NORTH AMERICA 15% of total sales 76% of total sales +8.9% -3.0% ASIA/PACIFIC 3% of total sales +6.4% AFRICA/MIDDLE EAST/ OTHER FOREIGN 1% of total sales LATIN AMERICA +13.0% 5% of total sales +21.7% Fiscal 2024 Second-Quarter Results | January 4, 2024 5
Slide 6: Fiscal 2024 Second-Quarter Financial Results | Consolidated
Fiscal 2024 Second-Quarter Financial Results | Consolidated Record Q2 sales and adjusted EBIT ($ in millions, except Q2 Q2 KEY POINTS 2024 2023 % Change per share amounts) • Record Q2 sales with volume growth in CPG & PCG and positive pricing in all segments Sales $1,792 $1,792 Up slightly • Sales i
Slide 7: Construction Products Group Q2 Results
Fiscal 2024 Second-Quarter Financial Results CPG generates record sales and adjusted EBIT Q2 Q2 ($ in millions, except margins) % Change Sales Components CONSTRUCTION 2024 2023 PRODUCTS GROUP Sales $661.8 $612.4 +8.1% Organic +6.1% EBIT1 $99.0 $77.8 +27.1% Acquisitions/ +0.6% Divestitures Adjusted E
Slide 8: Performance Coatings Group Q2 Results
Fiscal 2024 Second-Quarter Financial Results Record Q2 results driven by strong demand for engineered solutions and MAP 2025 benefits PERFORMANCE ($ in millions, except margins) Q2 2024 Q2 2023 % Change Sales Components COATINGS GROUP Sales $374.9 $356.8 +5.1% Organic +5.6% EBIT1 $60.1 $46.4 +29.5%
Slide 9: Specialty Products Group Q2 Results
Fiscal 2024 Second-Quarter Financial Results Challenging market conditions in specialty OEM end markets SPECIALTY ($ in millions, except margins) Q2 2024 Q2 2023 % Change Sales Components PRODUCTS GROUP Sales $177.0 $212.1 -16.6% Organic -14.6% EBIT1 $10.0 $27.4 -63.4% Acquisitions/ -2.7% Divestitur
Slide 10: Consumer Group Q2 Results
Fiscal 2024 Second-Quarter Financial Results Soft DIY demand pressured sales; MAP 2025 drove adjusted EBIT growth Q2 Q2 CONSUMER ($ in millions, except margins) 2024 2023 % Change Sales Components GROUP Sales $578.7 $610.4 -5.2% Organic -5.1% EBIT1 $97.2 $93.9 +3.5% Acquisitions/ 0.0% Divestitures A
Slide 11: Working Capital Management Results in All-Time Record Cash Flow from Operations
Working Capital Management Results in All-Time Record Cash Flow from Operations Inventories $1,500 Q2-24 Update $1,400 • Reduced inventories by $286.8 million from Q2-23 • Record Q2-24 cash flow from operations +$408.6 $1,300 million compared to +$167.4 million in Q2-23 In millions $1,200 • 1H-24 ca
Slide 12: RPM Innovation Center of Excellence
RPM Innovation Center of Excellence • Collaborative RPM facility to accelerate innovation • Located in Greensboro, NC with access to significant R&D talent • Speeds responsiveness to customers • Eliminates need for duplicate equipment in multiple facilities Shared resource for all RPM companies, par
Slide 13: Fiscal 2024 Third-Quarter Guidance
Fiscal 2024 Third-Quarter Guidance CATEGORY Q3-24 OUTLOOK (YOY) PRIOR-YEAR RECORD SALES | Consolidated Flat Construction Products Group +MSD % Performance Coatings Group +MSD % Specialty Products Group -Mid Teen % Consumer Group -LSD % ADJUSTED EBIT | Consolidated +25 % to 35 % LSD = Low Single Digi
Slide 14: Fiscal Year 2024 Guidance
Fiscal Year 2024 Guidance CATEGORY FY24 OUTLOOK (YOY) PRIOR-YEAR RESULTS PRIOR-YEAR RECORD SALES | Consolidated +LSD % +8.2% ADJUSTED EBIT | Consolidated +LDD to +Mid-Teen % +18.8% LSD = Low Single Digit | LDD = Low Double Digit Expected FY24 Trends • Continued MAP 2025 benefits • Positive commodity
Slide 15: Appendix
Appendix Reconciliation of Non-GAAP to GAAP Measures
Slide 16: Consolidated Statements of Income: Three Months
Consolidated Statements of Income: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended November 30, 2023 % November 30, 2022 % % Change Net Sales $ 1,792,275 $ 1,791,708 0.0 Cost of Sales 1,044,047 58.3 1,101,317 61.5 Gross Profit 748,228 41.7 690,391 38.5
Slide 17: Consolidated Statements of Income: Six Months
Consolidated Statements of Income: Six Months ($ in thousands, except per share and percent data) (Unaudited) Six Months Ended November 30, 2023 % November 30, 2022 % % Change Net Sales $ 3,804,132 $ 3,724,028 2.2 Cost of Sales 2,227,287 58.5 2,289,166 61.5 Gross Profit 1,576,845 41.5 1,434,862 38.5
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following are the non-GAAP financial measures used in this presentation: *Interest (Income) Expense, Net includes the combination of interest (income) expense and investment (income) expense, net. **EBIT is defined as earnings (loss) before interest and taxes. Managem
Slide 19: Adjustments Detail
Adjustments Detail a) Charges recorded in Cost of Goods Sold related to inventory write-offs in connection with restructuring activities at our Construction Products, Performance Coatings and Specialty Products segments. b) Reflects restructuring charges, including headcount reductions, impairments,
Slide 20: Reconciliation of Reported to Adjusted EPS: Three Months
Reconciliation of "Reported" to "Adjusted" EPS: Three Months (Unaudited) Reconciliation of Reported Earnings per Diluted Share to Adjusted Three Months Ended Earnings per Diluted Share (All amounts presented after-tax): November 30, 2023 November 30, 2022 Reported Earnings per Diluted Share $ 1.13 $
Slide 21: Reconciliation of Reported to Adjusted EPS: Six Months
Reconciliation of "Reported" to "Adjusted" EPS: Six Months (Unaudited) Reconciliation of Reported Earnings per Diluted Share to Adjusted Six Months Ended Earnings per Diluted Share (All amounts presented after-tax): November 30, 2023 November 30, 2022 Reported Earnings per Diluted Share $ 2.69 $ 2.3
Slide 22: EBIT (Non-GAAP): RPM Consolidated: Three Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended November 30, 2023 November 30, 2022 Net Income $ 145,815 $ 131,542 Provision for Income Taxes 50,009 43,593 Income Before Income Taxes 195,824 175,135 Interest Expense 30,34
Slide 23: EBIT (Non-GAAP): RPM Consolidated: Six Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Six Months ($ in thousands, except percent data) (Unaudited) Six Months Ended November 30, 2023 November 30, 2022 Net Income $ 347,128 $ 300,821 Provision for Income Taxes 117,850 99,435 Income Before Income Taxes 464,978 400,256 Interest Expense 62,166 5
Slide 24: EBIT (Non-GAAP): Construction Products Segment: Three Months
EBIT** (Non-GAAP Measure): Construction Products Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 98,398 $ 74,038 Add: Interest Expense, Net* 555 3,796 EBIT** (non-GAAP measure) 98,953 77,834 R
Slide 25: EBIT (Non-GAAP): Construction Products Segment: Six Months
EBIT** (Non-GAAP Measure): Construction Products Segment: Six Months ($ in thousands, except percent data) (Unaudited) Six Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 238,850 $ 180,793 Add: Interest Expense, Net* 3,951 4,576 EBIT** (non-GAAP measure) 242,801 185,369
Slide 26: EBIT (Non-GAAP): Performance Coatings Segment: Three Months
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 61,502 $ 46,709 Add: Interest (Income), Net* (1,425) (332) EBIT** (non-GAAP measure) 60,077 46,3
Slide 27: EBIT (Non-GAAP): Performance Coatings Segment: Six Months
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Six Months ($ in thousands, except percent data) (Unaudited) Six Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 106,323 $ 96,110 Add: Interest (Income), Net* (2,549) (526) EBIT** (non-GAAP measure) 103,774 95,584
Slide 28: EBIT (Non-GAAP): Specialty Products Segment: Three Months
EBIT** (Non-GAAP Measure): Specialty Products Segment: Three Months ($ in thousands, except percent data) Three Months Ended (Unaudited) November 30, 2023 November 30, 2022 Income Before Income Taxes $ 10,145 $ 27,431 Add: Interest (Income) Expense, Net* (104) 7 EBIT** (non-GAAP measure) 10,041 27,4
Slide 29: EBIT (Non-GAAP): Specialty Products Segment: Six Months
EBIT** (Non-GAAP Measure): Specialty Products Segment: Six Months ($ in thousands, except percent data) (Unaudited) Six Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 26,542 $ 55,316 Add: Interest (Income) Expense, Net* (203) 5 EBIT** (non-GAAP measure) 26,339 55,321 I
Slide 30: EBIT (Non-GAAP): Consumer Segment: Three Months
EBIT** (Non-GAAP Measure): Consumer Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 98,066 $ 93,873 Add: Interest (Income), Net* (869) (1) EBIT** (non-GAAP measure) 97,197 93,872 Restructuring
Slide 31: EBIT (Non-GAAP): Consumer Segment: Six Months
EBIT** (Non-GAAP Measure): Consumer Segment: Six Months ($ in thousands, except percent data) (Unaudited) Six Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 229,895 $ 210,562 Add: Interest (Income), Net* (1,619) (27) EBIT** (non-GAAP measure) 228,276 210,535 Restructur