Rpm International Inc. · NYSE:RPM
Rpm International — Q2 2023 Earnings Presentation
31 slides from Rpm International's earnings presentation, Jan 5, 2023
Slide 1: Fiscal 2023 Second-Quarter Results
Fiscal 2023 Second-Quarter Results January 5, 2023
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 Q2-23 Results with Increased Sales and Margins
Record Q2-23 Results with Increased Sales and Margins Consolidated Sales and Adjusted EBIT Growth FINANCIAL HIGHLIGHTS 40% 36.4% 35% Sales Growth Adj. EBIT Growth (1) 33.1% $1.79B 30% 25% RECORD Q2 SALES +9.3% 20% 17.1% 15% 13.0% 13.7% 11.7% ON TRACK TO EXCEED $196.2M 10% 9.3% $120M RECORD Q2 EBIT ¹
Slide 4: Record Q2 Sales For All Segments; Record Consolidated Q2 Adjusted EBIT
Record Q2 Sales For All Segments; Record Consolidated Q2 Adjusted EBIT CPG PCG SPG Consumer Consolidated Record Sales Record Adjusted EBIT¹ HIGHLIGHTS • Record Q2 sales in all four segments, despite significant FX headwinds • Sales driven by increased pricing in response to continued inflation • Sev
Slide 5: Sales Growth in USD by Region | Q2-23
Sales Growth in USD by Region | Q2-23 EUROPE NORTH AMERICA 14% of total sales 79% of total sales -11.7% +14.3% ASIA/PACIFIC 2% of total sales +3.3% AFRICA/MIDDLE EAST/ CONSOLIDATED OTHER FOREIGN TOTAL 1% of total sales LATIN AMERICA +6.0% +9.3% 4% of total sales +7.9% Fiscal 2023 Second-Quarter Resu
Slide 6: Fiscal 2023 Second-Quarter Financial Results | Consolidated
Fiscal 2023 Second-Quarter Financial Results | Consolidated Record Q2 sales and adjusted EBIT achieved ($ in millions, except Q2 Q2 HIGHLIGHTS 2023 2022 % Change per share amounts) • Sales increased 13.4% excluding FX, which was a headwind of 4.1%, resulting in Q2 Sales $1,792 $1,640 +9.3% record sa
Slide 7: Construction Products Group
Fiscal 2023 Second-Quarter Financial Results Record Q2 sales in CPG, but weakness in Europe and businesses serving new residential construction Q2 Q2 % Change CONSTRUCTION ($ in millions, except margins) 2023 2022 PRODUCTS GROUP Sales 634 614 +3.2% EBIT1 79 132 -40.0% Adjusted EBIT1 80 91 -12.0% Adj
Slide 8: Performance Coatings Group
Fiscal 2023 Second-Quarter Financial Results Broad-based strength in PCG resulted in record Q2 sales and adjusted EBIT PERFORMANCE ($ in millions, except margins) Q2 2023 Q2 2022 % Change COATINGS GROUP Sales 335 303 +10.8% EBIT1 45 38 +19.7% Adjusted EBIT1 46 40 +16.6% Adjusted EBIT Margin1 13.8% 1
Slide 9: Specialty Products Group
Fiscal 2023 Second-Quarter Financial Results SPG generated record Q2 sales and adjusted EBIT, led by food coatings and additives SPECIALTY ($ in millions, except margins) Q2 2023 Q2 2022 % Change PRODUCTS GROUP Sales 212 194 +9.5% EBIT1 27 21 +33.1% Adjusted EBIT1 30 21 +43.2% Adjusted EBIT Margin1
Slide 10: Consumer Group
Fiscal 2023 Second-Quarter Financial Results Record Q2 sales and margin expansions driven by improved material supply and pricing Q2 Q2 CONSUMER ($ in millions, except margins) 2023 2022 % Change GROUP Sales 610 529 +15.3% EBIT1 94 33 +184.2% Adjusted EBIT1 94 34 +180.3% Adjusted EBIT Margin1 15.4%
Slide 11: Capital Allocation Update
Capital Allocation Update $1.75 $1.50 49 Consecutive Q2-23 Update • $54.2 million of cash dividends Years of paid, marking 49th consecutive $1.25 year of dividend increases Dividend Annual dividends per share • Strategically-balanced portfolio of Increases maintenance-focused businesses $1.00 have p
Slide 12: Strategic Balance with Focus on Repair & Maintenance
Strategic Balance with Focus on Repair & Maintenance CONSTRUCTION PERFORMANCE PRODUCTS GROUP COATINGS GROUP ~5% 40% ~30% 50% 50% 60% ~65% CONSUMER SPECIALTY GROUP PRODUCTS GROUP 15% 40% 50% 85% Repair & New Specialty Maintenance Construction OEM 10% *Current estimates, which are subject to change ba
Slide 13: Why Customers Choose RPM
Why Customers Choose RPM Before After DIY with Rust-Oleum $350 Avg. Bathroom Remodel Cost $10,000¹ 1 – Source: Forbes Article, Nov. 7, 2022 How Much Does A Bathroom Remodel Cost? – Forbes Home Fiscal 2023 Second-Quarter Results | January 5, 2023 13
Slide 14: Fiscal 2023 Third-Quarter Guidance
Fiscal 2023 Third-Quarter Guidance CATEGORY Q3-23 OUTLOOK (YOY) PRIOR-YEAR COMPARABLE SALES | Consolidated Increase low-single digits to mid-single digits Versus prior-year record Construction Products Group Decrease low-single digits to mid-single digits Versus prior-year record Performance Coating
Slide 15: Appendix: Reconciliation of Non-GAAP to GAAP Measures
Appendix Reconciliation of Non-GAAP to GAAP Measures January 5, 2023
Slide 16: Consolidated Statements of Income: Three Months
Consolidated Statements of Income: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended November 30, 2022 % November 30, 2021 % % Change Net Sales $ 1,791,708 $ 1,639,538 9.3 Cost of Sales 1,101,317 61.5 1,056,924 64.5 Gross Profit 690,391 38.5 582,614 35.5
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, 2022 % November 30, 2021 % % Change Net Sales $ 3,724,028 $ 3,289,959 13.2 Cost of Sales 2,289,166 61.5 2,093,994 63.6 Gross Profit 1,434,862 38.5 1,195,965 36.
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 Sales related to inventory write-offs in connection with restructuring activities at our Consumer, Construction Products and Specialty Products segments, partially offset by subsequent recoveries and revisions of accrual estimates. b) Reflects restru
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, 2022 November 30, 2021 Reported Earnings per Diluted Share $ 1.02 $
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, 2022 November 30, 2021 Reported Earnings per Diluted Share $ 2.33 $ 2.0
Slide 22: 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 November 30, 2022 November 30, 2021 Net Income $ 131,542 $ 125,116 Provision for Income Taxes 43,593 38,038 Income Before Income Taxes 175,135 163,154 Interest
Slide 23: EBIT (Non-GAAP Measure): RPM Consolidated: Six Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Six Months ($ in thousands, except per share and percent data) Six Months Ended (Unaudited) November 30, 2022 November 30, 2021 Net Income $ 300,821 $ 259,911 Provision for Income Taxes 99,435 84,714 Income Before Income Taxes 400,256 344,625 Interest Exp
Slide 24: EBIT: 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 November 30, 2022 November 30, 2021 Income Before Income Taxes $ 75,453 $ 130,368 Add: Interest Expense, Net* 3,756 1,649 EBIT** (non-GAAP measure
Slide 25: EBIT: Construction Products Segment: Six Months
EBIT** (Non-GAAP Measure): Construction Products Segment: Six Months ($ in thousands, except per share and percent data) (Unaudited) Six Months Ended November 30, 2022 November 30, 2021 Income Before Income Taxes $ 184,655 $ 244,725 Add: Interest Expense, Net* 4,523 3,519 EBIT** (non-GAAP measure) 1
Slide 26: EBIT: 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 November 30, 2022 November 30, 2021 Income Before Income Taxes $ 45,294 $ 37,854 Add: Interest (Income), Net* (292) (247) EBIT** (non-GAAP measure)
Slide 27: EBIT: Performance Coatings Segment: Six Months
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Six Months ($ in thousands, except per share and percent data) (Unaudited) Six Months Ended November 30, 2022 November 30, 2021 Income Before Income Taxes $ 92,248 $ 72,932 Add: Interest (Income), Net* (473) (331) EBIT** (non-GAAP measure) 91,
Slide 28: EBIT: 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 November 30, 2022 November 30, 2021 Income Before Income Taxes $ 27,431 $ 20,591 Add: Interest Expense, Net* 7 29 EBIT** (non-GAAP measure) 27,438 20
Slide 29: EBIT: Specialty Products Segment: Six Months
EBIT** (Non-GAAP Measure): Specialty Products Segment: Six Months ($ in thousands, except per share and percent data) (Unaudited) Six Months Ended November 30, 2022 November 30, 2021 Income Before Income Taxes $ 55,316 $ 45,147 Add: Interest Expense, Net* 5 64 EBIT** (non-GAAP measure) 55,321 45,211
Slide 30: EBIT: Consumer Segment: Three Months
EBIT** (Non-GAAP Measure): Consumer Segment: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended November 30, 2022 November 30, 2021 Income Before Income Taxes $ 93,873 $ 33,104 Add: Interest (Income), Net* (1) (73) EBIT** (non-GAAP measure) 93,872 33,031
Slide 31: EBIT: Consumer Segment: Six Months
EBIT** (Non-GAAP Measure): Consumer Segment: Six Months ($ in thousands, except per share and percent data) (Unaudited) Six Months Ended November 30, 2022 November 30, 2021 Income Before Income Taxes $ 210,562 $ 79,019 Add: Interest (Income), Net* (27) (149) EBIT** (non-GAAP measure) 210,535 78,870