Rpm International Inc. · NYSE:RPM
Rpm International — 2022 Wells Fargo Industrials Conference
51 slides from Rpm International's conference presentation, May 4, 2022
Slide 1: 2022 Wells Fargo Industrials Conference RPM Investor Presentation
2022 Wells Fargo Industrials Conference RPM Investor Presentation Russell L. Gordon, VP & CFO Michael J. Laroche, VP-Controller & CAO May 4, 2022
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: RPM at a Glance
RPM at a Glance A world leader in specialty coatings, sealants, building materials and related services. Q U I C K FA C T S MANUFACTURING FACILITIES IN 26 COUNTRIES DIVIDEND RECORD 48 FOUNDED: 1947 HEADQUARTERS: Medina, OH NYSE STOCK LISTING: consecutive years (Symbol: RPM) of dividend increases FIS
Slide 4: Operating Groups Drive Growth & Efficiency Through Four Reportable Segments
Operating Groups Drive Growth & Efficiency Through Four Reportable Segments CONSTRUCTION PRODUCTS GROUP PERFORMANCE COATINGS GROUP FY21 Sales: $2.1 billion - 34% FY21 Sales: $1.0 billion - 17% Create and drive unique solutions Protecting, decorating and extending for the construction, restoration an
Slide 5: Strategic Balance: Repair & Maintenance vs. New Construction
Strategic Balance: Repair & Maintenance vs. New Construction* CONSTRUCTION PERFORMANCE PRODUCTS GROUP COATINGS GROUP 40% 60% ~30% 50% 50% CONSUMER GROUP ~70% SPECIALTY PRODUCTS GROUP 15% 50% 40% 85% New Repair & Specialty 10% Construction Maintenance OEM *Current estimates, which are subject to chan
Slide 6: Construction Products Group
Construction Products Group $2.1 billon Fiscal 2021 Sales GLOBAL BRANDS REGIONAL BRANDS 2022 Wells Fargo Industrials Conference | May 4, 2022 6
Slide 7: Construction Products Group Target Markets
Construction Products Group Target Markets Bridge Rail Transit 6 sides of the Building + Floor (seamless) + Fire protection Highway Tunnel Water Power + Concrete BUILDING ENVELOPE INFRASTRUCTURE Air | Moisture | Thermal Concrete | Concrete Protection 2022 Wells Fargo Industrials Conference | May 4,
Slide 8: Performance Coatings Group
Performance Coatings Group $1.0 billon Fiscal 2021 Sales COATINGS FLOOR SYSTEMS INFRASTRUCTURE STRUCTURES PROTECTIVE COATINGS SEAMLESS INDUSTRIAL FLOORING RESURFACING & REPAIRING BRIDGES FRP GRATINGS & RAILINGS FIREPROOFING SYSTEMS FLOORS FOR COMMERCIAL SPACES SPECIALTY MAINTENANCE PRODUCTS OUTDOOR
Slide 9: Performance Coatings Group Target Markets
Performance Coatings Group Target Markets • Customer Targets: End Users, Contractors, Architects & Engineers • Solving clients’ largest and most complex problems differentiates our products and services • Installation services encompass 40-50% of demand, complemented by niche technologies and know h
Slide 10: Consumer Group
Consumer Group $2.3 billon Fiscal 2021 Sales #1 Supplier in the #1 Caulk & Fastest Growing #1 Primer Brand #1 Brand of Wall Small Project Sealant Supplier Supplier of Wood in Customer Repair and Paint Category in North America Finishes in North Satisfaction Spackle in North Worldwide America among A
Slide 11: Consumer Group Target Markets
Consumer Group Target Markets • User Targets: DIY/Makers, Professionals, Industrial • Understanding targets’ needs and unmet needs drives innovation machine • Over 30,000 user insights have been gained in the past 24 months alone DIY DIY MAKERS PROFESSIONALS INDUSTRIAL 2022 Wells Fargo Industrials C
Slide 12: Specialty Products Group
Specialty Products Group $0.7 billon Fiscal 2021 Sales #1 Supplier of World Leading #1 in North America Global Market Leader Daylight Fluorescent Manufacturer of for Professional in Water-Based, Colorants Worldwide Professional Touch-up and Repair Antifouling Paints for Restoration and Products for
Slide 13: Specialty Products Group Target Markets
Specialty Products Group Target Markets Packaging, Safety Equipment, Furniture, Cabinetry, Food, Pharma, Cosmetics Agriculture, Forestry, Lumber Apparel Construction Pleasure Marine, Fuel, Restoration & Cleaning OEM Appliance, Auto, Marine Outdoor Recreation Equipment & Chemicals 2022 Wells Fargo In
Slide 14: Global Sales by Region | Fiscal 2021
Global Sales by Region | Fiscal 2021 CONSOLIDATED $6.1 billion OUTSIDE NA EUROPE $1.5 billion $1.1 billion – 17% NORTH AMERICA $4.6 billion – 75% AFRICA/MIDDLE EAST ASIA/PACIFIC $69 million – 1% $154 million – 3% SOUTH AMERICA $219 million – 4% 2022 Wells Fargo Industrials Conference | May 4, 2022 1
Slide 15: MAP to Growth
MAP to Growth PURPOSE VISION To position RPM for sustained, profitable growth To transform RPM into a more connected creating superior value for its customers, and efficient company focused on entrepreneurs, associates and shareholders. operational excellence and continuous improvement, while mainta
Slide 16: MAP to Growth Successfully Completed
MAP to Growth Successfully Completed Cost Saving Target Exceeded by $30 Million Center-Led Manufacturing WAVES PLAN Annualized Run Rate • Launched MS-168 manufacturing system $ in millions $86 $320 • Reduced manufacturing footprint by 28 facilities EBIT EBIT • Consolidated production to more strateg
Slide 17: 3-Year Cumulative Total Return
3-Year Cumulative Total Return Among RPM, the S&P 500 and a Customized Peer Group RPM’S TOTAL RETURN HAS OUTPERFORMED the S&P 500 by 22% and its Peer Group by 10% over the past 3 years This graph compares the cumulative three-year total return provided to stockholders on RPM International Inc.’s com
Slide 18: RPM is Positioned to Grow in New Markets and Product Channels
RPM is Positioned to Grow in New Markets and Product Channels $ in billions Cleaning/Restoration, $0.3 Powder Pleasure Marine Cleaners, $6 Coatings, $1.10 Coatings, $1 Caulks, Sealants & Adhesives, $5 Fluorescent Colorants, $0.2 Wood Care, $3 Wood Primers, $3 Food Coatings/Preservatives, Coatings, $
Slide 19: Innovative New Products Drive Organic Growth
Innovative New Products Drive Organic Growth Insulated Concrete Forms Construct stronger, highly energy efficient concrete structures capable of withstanding hurricanes. Nudura’s new XR35 form significantly increases insulation performance. Pyrocrete 341 A cementitious fireproofing that provides hyd
Slide 20: Acquisition Program Targets Niche Businesses with Leading Brands
Acquisition Program Targets Niche Businesses with Leading Brands Broadened focus beyond coatings and sealants to adjacent product categories, such as sanding, cleaning and others. Successful, niche businesses with ★ Achieve revenue synergies leading brands ★ New channels Above average gross prof
Slide 21: Intercompany Connections Drive Value Creation
Intercompany Connections Drive Value Creation Rust-Oleum and Tremco Leveraging Rust-Oleum’s retail relationships to expand the reach of Tremco’s product to contractors large and small Tremco and Fibergrate Connect to bring new rooftop safety solutions to market Wood Finishes and Rust-Oleum Wood Fini
Slide 22: Strategic Investments to Drive Growth and Efficiency
Strategic Investments to Drive Growth and Efficiency Manufacturing Center of Excellence Good Position in New Platform for Emblematic of Technology End Markets Building Maintenance New RPM Culture Date 6/7/21 Date 8/2/21 Date 9/7/21 Acquired Acquired Purchased Acquired By Carboline (PCG) Acquired By
Slide 23: Growth Opportunities & Positive Trends
Growth Opportunities & Positive Trends MARKET OPPORTUNITIES INDUSTRY TRENDS Abrasives & Infrastructure Nesting Schools Reopening Wall Paint Building Wall Single-Source Energy Efficiency Envelope Systems Construction 2022 Wells Fargo Industrials Conference | May 4, 2022 23
Slide 24: Fiscal 2022 Third-Quarter Highlights
Fiscal 2022 Third-Quarter Highlights FINANCIAL HIGHLIGHTS $1.43B Manufacturing Center of Excellence High-performance building solutions RECORD SALES +13% Making Significant $180.1M Investments in RETURNED TO SHAREHOLDERS $67M High-Growth through Dividends and RECORD EBIT Initiatives Share Repurchase
Slide 25: Fiscal 2022 Third-Quarter Financial Results | Consolidated
Fiscal 2022 Third-Quarter Financial Results | Consolidated Record sales and adjusted EBIT achieved despite supply disruption and inflation ($ in millions, except 3Q 3Q 3Q % Change per share amounts) 2022 2021 2020 HIGHLIGHTS F22 vs F21 F22 vs F20 • Sales increased 13.0% to a Q3 record of Sales $1,43
Slide 26: 3 of 4 Segments Achieved Record Third-Quarter Sales and Adjusted EBIT
3 of 4 Segments Achieved Record Third-Quarter Sales and Adjusted EBIT HIGHLIGHTS Third-Quarter Ended February 28, 2022 110% • Q3 performance reflects the 97.0% 89.7% 89.9% benefits of RPM’s balanced 90% business portfolio, where softness in one segment is 70% generally offset by strength in 50% the
Slide 27: Construction Products Group Third-Quarter Results
Fiscal 2022 Third-Quarter Financial Results CPG generated record third-quarter top- and bottom-line results CONSTRUCTION PRODUCTS GROUP ($ in millions, except 3Q 3Q 3Q % Change per share amounts) 2022 2021 2020 F22 vs F21 F22 vs F20 Sales $482 $396 $372 +21.7% +29.5% EBIT1 $33 $17 $2 +101.4% +1,911.
Slide 28: Performance Coatings Group Third-Quarter Results
Fiscal 2022 Third-Quarter Financial Results PCG revenue and adjusted EBIT increased to third-quarter record levels PERFORMANCE COATINGS GROUP ($ in millions, except 3Q 3Q 3Q % Change per share amounts) 2022 2021 2020 F22 vs F21 F22 vs F20 Sales $271 $227 $256 +19.6% +5.9% EBIT1 $25 $12 $22 +105.6% +
Slide 29: Specialty Products Group Third-Quarter Results
Fiscal 2022 Third-Quarter Financial Results SPG generated record third-quarter sales and adjusted EBIT SPECIALTY PRODUCTS GROUP ($ in millions, except 3Q 3Q 3Q % Change per share amounts) 2022 2021 2020 F22 vs F21 F22 vs F20 Sales $189 $169 $147 +11.9% +28.4% EBIT1 $26 $25 $13 +5.2% +99.7% Adjusted
Slide 30: Consumer Group Third-Quarter Results
Fiscal 2022 Third-Quarter Financial Results Demand remained strong, while raw material shortages and inflation impacted performance CONSUMER GROUP ($ in millions, except 3Q 3Q 3Q % Change per share amounts) 2022 2021 2020 F22 vs F21 F22 vs F20 Sales $492 $478 $399 +2.9% +23.3% EBIT1 $17 $43 $30 -60.
Slide 31: Poised to Benefit from Stimulus Investments in Infrastructure & Construction
Poised to Benefit from Stimulus Investments in Infrastructure & Construction Significant planned government spending in construction, infrastructure and Covid-19 to support meaningful growth and incremental upside for RPM given its leading presence in the construction and infrastructure end-markets
Slide 32: RPM is Building a Better World Through…
RPM is Building a Better World Through… Talent Development: Sustainable Products: RISE Roofing Training Efficient Operations: Restoration Water Reduction 2022 Wells Fargo Industrials Conference | May 4, 2022 32
Slide 33: Delivering Value to Shareholders
Delivering Value to Shareholders Only 41 publicly traded U.S. companies have an equal or better record* $2.8+ billion $1.75 Paid 48 $1.50 $1.25 Consecutive $1.00 Years of Dividend $0.75 Increases $0.50 $0.25 $0.00 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '1
Slide 34: Return to Fortune 500
Return to Fortune 500 RPM ranks 489 in first return to list since 1994 “Our return to the prestigious Fortune 500 for the first time since 1994 is an enormous achievement for RPM, particularly when you consider that we reached this milestone amidst a global pandemic that strained economies worldwide
Slide 35: Appendix: Reconciliations of Non-GAAP to GAAP Measures
Go-Forward Strategy to Drive Sustained Growth APPENDIX Reconciliations of Non-GAAP to GAAP Measures April 6, 2022 2022 Wells Fargo Industrials Conference | May 4, 2022 35
Slide 36: Consolidated Statements of Income: Three Months
Consolidated Statements of Income: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2022 % February 28, 2021 % % Change Net Sales $ 1,433,879 $ 1,269,395 13.0 Cost of Sales 935,293 65.2 797,454 62.8 Gross Profit 498,586 34.8 471,941 37.2 SG
Slide 37: Consolidated Statements of Income: Nine Months
Consolidated Statements of Income: Nine Months ($ in thousands, except per share and percent data) (Unaudited) Nine Months Ended February 28, 2022 % February 28, 2021 % % Change Net Sales $ 4,723,838 $ 4,361,981 8.3 Cost of Sales 3,029,287 64.1 2,650,213 60.8 Gross Profit 1,694,551 35.9 1,711,768 39
Slide 38: 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 39: Adjustments Detail
Adjustments Detail a) Charges recorded in Cost of Goods Sold related to inventory write-offs in connection with restructuring activities, partially offset by subsequent recoveries and revisions of accrual estimates. b) Reflects restructuring charges, including headcount reductions, closures of facil
Slide 40: 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): February 28, 2022 February 28, 2021 Reported Earnings per Diluted Share $ 0.25 $
Slide 41: Reconciliation of Reported to Adjusted EPS: Nine Months
Reconciliation of "Reported" to "Adjusted" EPS: Nine Months (Unaudited) Reconciliation of Reported Earnings per Diluted Share to Adjusted Nine Months Ended Earnings per Diluted Share (All amounts presented after-tax): February 28, 2022 February 28, 2021 Reported Earnings per Diluted Share $ 2.26 $ 2
Slide 42: EBIT (Non-GAAP Measure): RPM Consolidated: Three Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2022 February 28, 2021 Net Income $ 33,249 $ 38,466 Provision for Income Taxes 7,248 17,394 Income Before Income Taxes 40,497 55,860 Interest Expe
Slide 43: EBIT (Non-GAAP Measure): RPM Consolidated: Nine Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Nine Months ($ in thousands, except per share and percent data) (Unaudited) Nine Months Ended February 28, 2022 February 28, 2021 Net Income $ 293,160 $ 347,136 Provision for Income Taxes 91,962 117,049 Income Before Income Taxes 385,122 464,185 Interest
Slide 44: EBIT (Non-GAAP Measure): Construction Products Segment: Three Months
EBIT** (Non-GAAP Measure): Construction Products Segment: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2022 February 28, 2021 Income Before Income Taxes $ 31,498 $ 14,431 Add: Interest Expense, Net* 1,735 2,074 EBIT** (non-GAAP measure)
Slide 45: EBIT (Non-GAAP Measure): Construction Products Segment: Nine Months
EBIT** (Non-GAAP Measure): Construction Products Segment: Nine Months ($ in thousands, except per share and percent data) Nine Months Ended (Unaudited) February 28, 2022 February 28, 2021 Income Before Income Taxes $ 276,223 $ 184,613 Add: Interest Expense, Net* 5,254 6,325 EBIT** (non-GAAP measure)
Slide 46: EBIT (Non-GAAP Measure): Performance Coatings Segment: Three Months
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2022 February 28, 2021 Income Before Income Taxes $ 24,917 $ 12,158 Add: Interest (Income), Net* (76) (75) EBIT** (non-GAAP measure) 2
Slide 47: EBIT (Non-GAAP Measure): Performance Coatings Segment: Nine Months
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Nine Months ($ in thousands, except per share and percent data) Nine Months Ended (Unaudited) February 28, 2022 February 28, 2021 Income Before Income Taxes $ 97,849 $ 64,719 Add: Interest (Income), Net* (407) (53) EBIT** (non-GAAP measure) 97
Slide 48: EBIT (Non-GAAP Measure): Specialty Products Segment: Three Months
EBIT** (Non-GAAP Measure): Specialty Products Segment: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2022 February 28, 2021 Income Before Income Taxes $ 25,881 $ 24,560 Add: Interest Expense, Net* 18 64 EBIT** (non-GAAP measure) 25,899 2
Slide 49: EBIT (Non-GAAP Measure): Specialty Products Segment: Nine Months
EBIT** (Non-GAAP Measure): Specialty Products Segment: Nine Months ($ in thousands, except per share and percent data) (Unaudited) Nine Months Ended February 28, 2022 February 28, 2021 Income Before Income Taxes $ 71,028 $ 73,415 Add: Interest Expense, Net* 82 219 EBIT** (non-GAAP measure) 71,110 73
Slide 50: EBIT (Non-GAAP Measure): Consumer Segment: Three Months
EBIT** (Non-GAAP Measure): Consumer Segment: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2022 February 28, 2021 Income Before Income Taxes $ 16,893 $ 42,724 Add: Interest (Income) Expense, Net* (62) 60 EBIT** (non-GAAP measure) 16,831
Slide 51: EBIT (Non-GAAP Measure): Consumer Segment: Nine Months
EBIT** (Non-GAAP Measure): Consumer Segment: Nine Months ($ in thousands, except per share and percent data) (Unaudited) Nine Months Ended February 28, 2022 February 28, 2021 Income Before Income Taxes $ 95,912 $ 263,813 Add: Interest (Income) Expense, Net* (211) 187 EBIT** (non-GAAP measure) 95,701
RPM International — 2022 Wells Fargo Industrials Conference on 6ix