Rpm International Inc. · NYSE:RPM
Rpm International — NYSE Analysts Luncheon (July 2015)
31 slides from Rpm International's conference presentation, Jul 27, 2015
Slide 1: Accelerating Growth Investments
RPM INTERNATIONAL INC. RPM INTERNATIONAL INC. Exhibit 99.2 “Accelerating Growth Investments” NYSE Analysts Luncheon Frank C. Sullivan, Chairman & CEO July 27, 2015
Slide 2: Forward-Looking Statements & Regulation G
RPM INTERNATIONAL INC. Forward-Looking Statements & Regulation G This presentation contains “Forward-Looking Statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from expectations and are subject to certain risks and uncertainties such
Slide 3: Entrepreneurial Operating Philosophy
RPM INTERNATIONAL INC. Industrial Segment (2/3) Consumer Segment (1/3) Entrepreneurial Operating Philosophy Competitive Advantage of Leading Brands Balance Between Consumer and Industrial Businesses Growth Strategy Balanced Between Internal Investment and Acquisitions SALES: $4.6 billion
Slide 4: Entrepreneurial Operating Philosophy
RPM INTERNATIONAL INC. At Operating Companies Among Operating Companies At Corporate Entrepreneurial Operating Philosophy Customer-Centric/ Market-Focused Connections Creating Value Centralized Sales Distribution Treasury Marketing Manufacturing Capital Allocation Product Development Technology Glob
Slide 5: Unique Competitive Advantage
RPM INTERNATIONAL INC. Unique Competitive Advantage Industrial Industrial Paint & Coatings Paint & Coatings Construction Chemicals Construction Chemicals Consumer Consumer $170 billion global market
Slide 6: Deliberate Strategic Balance
Deliberate Strategic Balance Residential Repair & Maintenance 85% Commercial & Industrial Repair & Maintenance 60% RPM INTERNATIONAL INC. Consumer Industrial Residential Construction 15% Commercial Construction 40% Repair & Maintenance 70%
Slide 7: Market-Leading Consumer Brands
Market-Leading Consumer Brands RPM INTERNATIONAL INC. • Value-added partner • Innovative new products • Category management • Higher price points and margins for retailers • Immediate full-chain distribution • 80% U.S. vs. 20% ROW
Slide 8: Diverse Industrial Global Brands
Diverse Industrial Global Brands RPM INTERNATIONAL INC. • Fragmented global markets • Less cyclical repair & maintenance • Low customer concentration • 50% U.S. vs. 50% ROW
Slide 9: Growth Strategy
RPM INTERNATIONAL INC. Growth Strategy Acquisitions • International Expansion • Product Innovation
Slide 10: Acquisition Strategy
Acquisition Strategy RPM INTERNATIONAL INC. “The Best Home for Entrepreneurial Companies” Key requirements: Acquisition Focus: Key Takeaways: • Niche market leaders • Strong GP margins • Retain entrepreneurial management team • Geographic expansion • New markets • New products • 150+ acquisitions •
Slide 11: International Expansion: 2005 vs. 2015
RPM INTERNATIONAL INC. International Expansion: 2005 vs. 2015 North America $2,202 $3,195 86% 70% Asia/Pacific $27 $121 1.0% 2.6% Europe $251 $942 10% 20% South/Latin America $42 $251 1.7% 5.5% TOTAL $2,556 mm $4,595 Africa/Middle East $34 $86 1.3% 1.9% Dollars in millions
Slide 12: Connections Creating Value: Model for Success in Developing World
RPM INTERNATIONAL INC. Connections Creating Value: Model for Success in Developing World • Acquire platform company • Great management team • Market leader • Potential for rapid expansion • Established base of shared: Manufacturing Distribution Technology FY 15 FY 16 More to Come FY 13 FY 15 FY 14 F
Slide 13: Connections Creating Value: Leveraging Shared Technologies
RPM INTERNATIONAL INC. Connections Creating Value: Leveraging Shared Technologies
Slide 14: New Product Innovations
RPM INTERNATIONAL INC. New Product Innovations AlphaGuard RoofTec
Slide 15: Steve Knoop, CEO, Specialty Products Holding Corp.
RPM INTERNATIONAL INC. Steve Knoop Chief Executive Officer Specialty Products Holding Corp.
Slide 16: SPHC
RPM INTERNATIONAL INC. SPHC • +$400 million in sales • 5 Platforms • 10 Businesses • 1 Theme: Specialty Products
Slide 17: SPHC Growth Strategy
RPM INTERNATIONAL INC. SPHC Growth Strategy • Organic Growth – Product innovation and technology investments pay dividends – Attacking market niches in traditional product areas • Acquisition Growth – Chapter 11 process provides pent up demand for high quality acquisition opportunities – Always seek
Slide 18: Consistent Financial Performance
RPM INTERNATIONAL INC. Consistent Financial Performance
Slide 19: Balanced Business = Steady Growth
RPM INTERNATIONAL INC. Balanced Business = Steady Growth Consolidated Sales +8.5% +11.7% +8.0% +7.2% +5.0% Net Income +16.1% +14.2% +14.5% +20.9% +10.7% Note: Specialty Products Holding Corp. (SPHC) was deconsolidated on May 31, 2010 and reconsolidated on Jan. 1, 2015. Net income and EBIT excludes o
Slide 20: Consistent Financial Performance: 30-Year Growth Profile
RPM INTERNATIONAL INC. Consistent Financial Performance: 30-Year Growth Profile 10.6% 30-yr. CAGR 11.9% 30-yr. CAGR Note: Specialty Products Holding Corp. (SPHC) was deconsolidated on May 31, 2010 and reconsolidated on Jan. 1, 2015 Note: Net income excludes one-time adjustments taken in FY2013 and 2
Slide 21: Consecutive Years of Dividend Increases
41 Consecutive Years of Dividend Increases + 8.3% 10/9/14 Acquired Yield on Original Investment RPM INTERNATIONAL INC. • Only 45 of all 19,000 U.S. publicly traded companies have an equal or better record • The compounding benefit of reinvesting a growing cash dividend first envisioned by a $25 mm c
Slide 22: Consistent Financial Performance: Superior Shareholder Return
Consistent Financial Performance: Superior Shareholder Return Outperform: S&P 500 by 86% Peers by 17% RPM INTERNATIONAL INC. Comparison of Cumulative Total Return Among RPM International Inc., the S&P 500 Index and a Peer Group RPM International, Inc. 100.00 109.55 138.24 154.37 101.69 137.38 169.51
Slide 23: Fiscal 2015 Fourth-Quarter Results
Fiscal 2015 Fourth-Quarter Results ($ in millions, except per share amounts) RPM INTERNATIONAL INC. Three Months Ended May 31, Consolidated % Sales $1,373 $1,277 +7.5% EBIT $204 $172 +18.7% Net Income $128 $109 +17.7% EPS $0.94 $0.80 +17.5% Three Months Ended May 31, Consumer % Sales $495 $508 (2.6)
Slide 24: Fiscal 2016 Outlook
RPM INTERNATIONAL INC. Fiscal 2016 Outlook
Slide 25: Capital Allocation: Fiscal 2006-2015
Capital Allocation: Fiscal 2006-2015 Dividends Capex Asbestos Acquisitions TOTAL RPM INTERNATIONAL INC. $1,054,367 $673,215 $575,096 $1,226,622 $3,529,300 Dividends Capex 19% Asbestos 16% Acquisitions 35% 30%
Slide 26: Fiscal 2016 Outlook: Accelerating Growth Investments
RPM INTERNATIONAL INC. Fiscal 2016 Outlook “Accelerating Growth Investments” • CapEx increase from $85 million to $120 million; large investments in: – Tremco Roofing: AlphaGuard – Kirker U.S. bottling and UK expansion – Euclid Chemical: Tuf-Strand Macro Fibers – Euclid Chemical Latin America: const
Slide 27: Fiscal 2016 Outlook
RPM INTERNATIONAL INC. Fiscal 2016 Outlook SPHC Core RPM Total FY2015 ADJUSTED EPS* $0.05 $2.33 $2.38 *Fiscal 2015 U.S. GAAP diluted EPS of $1.78, adjusted for ASC 740 potential repatriation of foreign earnings of $0.60 per share.
Slide 28: Fiscal 2016 Outlook
RPM INTERNATIONAL INC. Fiscal 2016 Outlook SPHC Core RPM Total FY2015 ADJUSTED EPS* $0.05 $2.33 $2.38 Adjustments to FY15 EPS: Earnout reversals ($0.15) ($0.15) SPHC/SEC legal & Q4 restructuring $0.07 $0.07 FY2015 Adjusted EPS Base $0.05 $2.25 $2.30 *Fiscal 2015 U.S. GAAP diluted EPS of $1.78, adjus
Slide 29: Fiscal 2016 Outlook
RPM INTERNATIONAL INC. Fiscal 2016 Outlook SPHC Core RPM Total FY2015 ADJUSTED EPS* $0.05 $2.33 $2.38 Adjustments to FY15 EPS: Earnout reversals ($0.15) ($0.15) SPHC/SEC legal & Q4 restructuring $0.07 $0.07 FY2015 Adjusted EPS Base $0.05 $2.25 $2.30 SPHC incremental contribution $0.15 $0.15 RPM core
Slide 30: Fiscal 2016 Outlook
RPM INTERNATIONAL INC. Fiscal 2016 Outlook SPHC Core RPM Total FY2015 ADJUSTED EPS* $0.05 $2.33 $2.38 Adjustments to FY15 EPS: Earnout reversals ($0.15) ($0.15) SPHC/SEC legal & Q4 restructuring $0.07 $0.07 FY2015 Adjusted EPS Base $0.05 $2.25 $2.30 SPHC incremental contribution $0.15 $0.15 RPM core
Slide 31: Good Value in a Great Company
Good Value in a Great Company RPM INTERNATIONAL INC. “Hire the best people you can find. Create an atmosphere that will keep them. Then let them do their jobs.” Frank C. Sullivan, 1947
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