Rpm International Inc. · NYSE:RPM
Rpm International — BoA Securities 2020 Global Agriculture and Materials Conference
48 slides from Rpm International's conference presentation, Feb 27, 2020
Slide 1: BoA Securities 2020 Global Agriculture and Materials Conference
BoA Securities 2020 Global Agriculture and Materials Conference Frank C. Sullivan Chairman and CEO February 27, 2020 RPM International Inc. BoA Conf 2/27/2020 1
Slide 2: Forward-Looking Statements & Regulation G
Forward-Looking Statements & Regulation G This presentation contains “Forward-Looking Statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements relate to our plans, expectations, estimates and beliefs of future events or our future financial performance and inv
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 FOUNDED: 1947 HEADQUARTERS: STOCK LISTING: Medina, OH NYSE (Symbol: RPM) 46 consecutive years of dividend increases FIS
Slide 4: Operating Groups Drive Growth & Efficiency
Operating Groups Drive Growth & Efficiency Through Four Reportable Segments CONSTRUCTION PERFORMANCE PRODUCTS GROUP COATINGS GROUP Proforma Sales: $1.9 billion - 34% Proforma Sales: $1.1 billion - 20% CONSUMER FY19 SALES: SPECIALTY GROUP PRODUCTS GROUP $5.6 BILLION Proforma Sales: $1.9 billion - 34%
Slide 5: Construction Products Group
Construction Products Group $1.9 billon Fiscal 2019 Proforma Sales GLOBAL BRANDS REGIONAL BRANDS BoA Conf 2/27/2020 5
Slide 6: Construction Products Group Target Markets
Construction Products Group Target Markets 6 sides of the Building • Bridge • Tunnel + Floor (seamless) • Rail • Water + Fire protection • Transit • Power + Concrete • Highway BUILDING ENVELOPE INFRASTRUCTURE Air | Moisture | Thermal Concrete | Concrete Protection BoA Conf 2/27/2020 6
Slide 7: Performance Coatings Group
Performance Coatings Group $1.1 billon Fiscal 2019 Proforma Sales COATINGS FLOOR SYSTEMS INFRASTRUCTURE FRP GRATING PROTECTIVE COATINGS SANITARY FLOORS FOOD & BEVERAGE RESURFACING & REPAIRING BRIDGES FIBERGLASS REINFORCED PLASTIC GRATINGS FIREPROOFING SYSTEMS FLOORS FOR COMMERCIAL SPACES BUILDING MA
Slide 8: Performance Coatings Group Target Markets
Performance Coatings Group Target Markets Manufacturing Metals & Mining Pulp & Paper Technology Bridge & Highway Water Wastewater Transportation Marine Commercial Spaces Food & Beverage Pharmaceutical Healthcare Offshore Oil & Gas Petrochemical Power Renewable Energy BoA Conf 2/27/2020 8
Slide 9: Consumer Group
Consumer Group $1.9 billon Fiscal 2019 Proforma 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 Americ
Slide 10: 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 BoA Conf 2/27/2020 10
Slide 11: Specialty Products Group
Specialty Products Group $0.7 billon Fiscal 2019 Proforma Sales #1 Supplier of World Leading #1 in North Global Market Daylight Manufacturer of America for Leader in Water- Fluorescent Professional Professional Based, Antifouling Colorants Restoration and Touch-up and Paints for the Worldwide Cleani
Slide 12: Specialty Products Group Target Markets
Specialty Products Group Target Markets Food, Pharma, Packaging, Safety Agriculture, Cosmetics Equipment, Forestry, Lumber Apparel Furniture and Appliance, Auto, Marine, Fuel, Restoration & Cabinetry Marine, Furniture Cleaning Construction Protection, Equipment & Cosmetics Chemicals BoA Conf 2/27/20
Slide 13: Positioning RPM for the Next Level of Growth
Positioning RPM for the Next Level of Growth STRONG HISTORY OF 2020 MAP BUILDING A ENTREPRENEURIAL TO GROWTH BETTER RPM GROWTH CONTINUES Extraordinary Transforming RPM into a Combining 72-year history more connected and entrepreneurial legacy of growth, innovation efficient company and the disciplin
Slide 14: 2020 MAP to Growth
2020 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 m
Slide 15: 2020 MAP to Growth: Waves Exceeds Initial Target by 23%
2020 MAP to Growth: Waves 1 Exceeds Initial Target by 23% Annualized Run Rate to Benefit 2022: $106 MM EBIT WAVES PLAN MAP 2020 $106 Annualized Run Rate Annualized to Benefit 2021: $101 MM EBIT Run Rate Annualized Run Rate $ in millions to Benefit 2020: $290 $102 MM $101 $83 MM EBIT EBIT $41 MANUFAC
Slide 16: Fiscal 2020 Second-Quarter Reported Results
Fiscal 2020 Second-Quarter Reported Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP Three mos. ended Nov. 30 2019 2018 % ($ in millions, except per share amounts) Sales $500 $467 +6.9% EBIT $59 $38 +57.7% C O N S O L I D AT E D PERFORM ANC E COATINGS GROUP Three mos. ended Nov. 30 2019 2018 % T
Slide 17: Fiscal 2020 Second-Quarter Adjusted Results
Fiscal 2020 Second-Quarter Adjusted Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP Three mos. ended Nov. 30 2019 2018 % ($ in millions, except per share amounts) Sales $500 $467 +6.9% EBIT* $62 $43 +43.3% C O N S O L I D AT E D PERFORM ANC E COATINGS GROUP Three mos. ended Nov. 30 2019 2018 %
Slide 18: Fiscal 2020 Year-to-Date Reported Results
Fiscal 2020 Year-to-Date Reported Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP Six mos. ended Nov. 30 2019 2018 % ($ in millions, except per share amounts) Sales $1,036 $985 +5.2% EBIT $144 $105 +37.2% C O N S O L I D AT E D PERFORM ANC E COATINGS GROUP Six mos. ended Nov. 30 2019 2018 % Six
Slide 19: Fiscal 2020 Year-to-Date Adjusted Results
Fiscal 2020 Year-to-Date Adjusted Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP Six mos. ended Nov. 30 2019 2018 % ($ in millions, except per share amounts) Sales $1,036 $985 +5.2% EBIT* $149 $114 +30.8% C O N S O L I D AT E D PERFORM ANC E COATINGS GROUP Six mos. ended Nov. 30 2019 2018 % Si
Slide 20: RPM Stock Price Growth Outpacing Peers
RPM Stock Price Growth Outpacing Peers BoA Conf 2/27/2020 20
Slide 21: World Leader in Coatings, Sealants and Building Materials
World Leader in Coatings, Sealants and Building Materials $5.6 billion (May 31, 2019) Consumer Segment Specialty Segment Industrial Segment $1.9 billion (34%) $800 million (14%) $2.9 billion (52%) Entrepreneurial Operating Philosophy • Competitive Advantage of Leading Brands • Balance Between Consum
Slide 22: Operating Groups Drive Growth & Efficiency
Operating Groups Drive Growth & Efficiency Through Four Reportable Segments CONSTRUCTION PERFORMANCE PRODUCTS GROUP COATINGS GROUP Proforma Sales: $1.9 billion - 34% Proforma Sales: $1.1 billion - 20% CONSUMER FY19 SALES: SPECIALTY GROUP PRODUCTS GROUP $5.6 BILLION Proforma Sales: $1.9 billion - 34%
Slide 23: RPM is Positioned to Grow in New Markets and Product Channels
RPM is Positioned to Grow in New Markets and Product Channels $ in billions Pleasure Marine Cleaners, Powder Coatings, $1.1 Coatings, $0.50 $6 Caulks, Sealants & Cleaning/Restoration, Adhesives, $5 $0.25 Fluorescent Colorants, Wood Wood Care, $3 $0.150 Coatings, $10 Primers, $3 Food Coatings, $5 Sma
Slide 24: Construction Products Group Innovative New Products
Construction Products Group Innovative New Products Insulated Concrete Forms Level Top PC-AGG POWERply Endure Enable the construction of An easy-to-use, self-leveling BIO Adhesive stronger, highly energy resurfacing compound A two-part, bio-based roofing efficient concrete structures designed for ne
Slide 25: Performance Coatings Group Innovative New Products
Performance Coatings Group Innovative New Products Carboquick 200 Soilok Hygienic Systems This fast-cure, high-build This grout can stabilize soil, Seamless flooring, walls and polyaspartic coating provides shut off water intrusion and curbs unite to ensure dirt and corrosion protection, plus contai
Slide 26: Consumer Group Innovative New Products
Consumer Group Innovative New Products Turbo Spray Mold Killing Primer DynaFlex Ultra Delivers protection 4X faster The first and only EPA- An advanced exterior sealant than traditional aerosols in a registered primer that kills formulated for exterior large, easy-to-use can that existing mold, mild
Slide 27: Specialty Products Group Innovative New Products
Specialty Products Group Innovative New Products TRU-CORE for VerdeCoat 3-in-1 Repair Stick Engineered Woods A new “green” barrier coating Offers complete wood repairs Fully penetrates wood from specially formulated for with a single product, filling, the inside out with anti- packaging using ingred
Slide 28: Accelerating Acquisition Pace
Accelerating Acquisition Pace ✓ Successful, niche businesses with ★ Achieve revenue synergies leading brands ★ New channels ✓ Above average gross profit margins ★ New geographies CRITERIA ✓ 70% product line integrations BENEFITS ★ New technologies ✓ 30% stand-alone with entrepreneurial leadership th
Slide 29: Intercompany Connections Drive Value Creation
Intercompany Connections Drive Value Creation Rust-Oleum and Tremco Leveraging third-party Consumer Group MRO channel network Tremco and Fibergrate Connect to bring new rooftop safety solutions to market Dryvit and Euclid Chemical Shared technology speeds cure times of NewBrick product BoA Conf 2/27
Slide 30: International Expansion Opens New Markets
International Expansion Opens New Markets Sales by Region $ in millions CONSOLIDATED 2019 – $5,565 2002 – $1,960 OUTSIDE NA 2019 – $1,498 2002 – $235 EUROPE 2019 – $1,029 – 18% 2002 – $158 – 8% NORTH AMERICA 2019 – $4,067 – 73% 2002 – $1,725 – 88% AFRICA/MIDDLE EAST 2019 – $72 – 2% 2002 – $24 – 1% A
Slide 31: Delivering Value to Shareholders
Delivering Value to Shareholders Cumulative Total Return Outpaces the Broader Market Comparison of Cumulative Total Return $500 $450 RPM RPM Outperformed the S&P 500 by $400 S&P 500 27% $350 $300 This graph compares the cumulative ten-year total return provided shareholders on RPM $250 International
Slide 32: RPM is Building a Better World
RPM is Building a Better World From homes and to infrastructure, workplaces, …RPM’s products are trusted by consumers and precious and professionals worldwide to beautify landmarks… structures, protect them from harsh environments, prolong their lifecycles and enhance their sustainability. BoA Conf
Slide 33: RPM is a Great Investment Opportunity
RPM is a Great Investment Opportunity Improved competitiveness in markets served and ability Continuous improvement culture focused on greater = to generate greater shareholder returns operational effectiveness Values-driven entrepreneurial growth culture drives + in manufacturing, procurement, IT a
Slide 34: Appendix: Reconciliations of Non-GAAP Measures to GAAP Measures
Appendix Reconciliations of Non-GAAP Measures to GAAP Measures RPM International Inc. BoA Conf 2/27/2020 34
Slide 35: Adjustments Details
Adjustments Details (a) Inventory-related charges reflect the following in fiscal 2020: charges recorded in cost of goods sold that reflect product line and SKU rationalization at our Consumer Segment, as well as inventory write-offs in connection with restructuring activities at our Construction Pr
Slide 36: EBIT (Non-GAAP Measure): RPM Consolidated
EBIT* (Non-GAAP Measure): RPM Consolidated (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Three months ended November 30, 2019 2018 Income Before Income Taxes $ 101,753 $ 66,593 Interest Expense 26,341 23,127 Investment (Income) Expense, Net (8,805) 7,033 EBIT* (non-GA
Slide 37: EBIT (Non-GAAP Measure): RPM Consolidated
EBIT* (Non-GAAP Measure): RPM Consolidated (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Six months ended November 30, 2019 2018 Income Before Income Taxes $ 244,602 $ 158,531 Interest Expense 54,658 47,533 Investment (Income) Expense, Net (14,190) 4,600 EBIT* (non-GA
Slide 38: Reconciliation of Reported to Adjusted EPS
Reconciliation of "Reported" to "Adjusted" EPS (Unaudited) Three months ended November 30, 2019 2018 Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): Reported Earnings per Diluted Share $ 0.59 $ 0.37 Inventory-related cha
Slide 39: Reconciliation of Reported to Adjusted EPS
Reconciliation of "Reported" to "Adjusted" EPS (Unaudited) Six months ended November 30, 2019 2018 Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): Reported Earnings per Diluted Share $ 1.41 $ 0.89 Inventory-related charg
Slide 40: EBIT (Non-GAAP Measure): Construction Products Segment
EBIT** (Non-GAAP Measure): Construction Products Segment (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Three months ended November 30, 2019 2018 Income Before Income Taxes $ 57,123 $ 35,357 Add: Interest Expense, Net* 2,074 2,189 EBIT** (non-GAAP measure) 59,197 37,54
Slide 41: EBIT (Non-GAAP Measure): Construction Products Segment
EBIT** (Non-GAAP Measure): Construction Products Segment (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Six months ended November 30, 2019 2018 Income Before Income Taxes $ 139,803 $ 100,401 Add: Interest Expense, Net* 4,101 4,479 EBIT** (non-GAAP measure) 143,904 104,
Slide 42: EBIT (Non-GAAP Measure): Performance Coatings Segment
EBIT** (Non-GAAP Measure): Performance Coatings Segment (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Three months ended November 30, 2019 2018 Income Before Income Taxes $ 33,320 $ 22,299 Add: Interest (Income) Expense, Net* (25) 223 EBIT** (non-GAAP measure) 33,295
Slide 43: EBIT (Non-GAAP Measure): Performance Coatings Segment
EBIT** (Non-GAAP Measure): Performance Coatings Segment (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Six months ended November 30, 2019 2018 Income Before Income Taxes $ 61,377 $ 30,624 Add: Interest Expense, Net* 104 341 EBIT** (non-GAAP measure) 61,481 30,965 Inven
Slide 44: EBIT (Non-GAAP Measure): Consumer Segment
EBIT** (Non-GAAP Measure): Consumer Segment (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Three months ended November 30, 2019 2018 Income Before Income Taxes $ 34,456 $ 41,836 Add: Interest Expense, Net* 56 123 EBIT** (non-GAAP measure) 34,512 41,959 Inventory-relate
Slide 45: EBIT (Non-GAAP Measure): Consumer Segment
EBIT** (Non-GAAP Measure): Consumer Segment (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Six months ended November 30, 2019 2018 Income Before Income Taxes $ 93,614 $ 92,805 Add: Interest Expense, Net* 161 297 EBIT** (non-GAAP measure) 93,775 93,102 Inventory-related
Slide 46: EBIT (Non-GAAP Measure): Specialty Segment
EBIT** (Non-GAAP Measure): Specialty Segment (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Three months ended November 30, 2019 2018 Income Before Income Taxes $ 18,762 $ 26,119 Add: Interest Expense (Income), Net* 7 (105) EBIT** (non-GAAP measure) 18,769 26,014 Restr
Slide 47: EBIT (Non-GAAP Measure): Specialty Segment
EBIT** (Non-GAAP Measure): Specialty Segment (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Six months ended November 30, 2019 2018 Income Before Income Taxes $ 42,089 $ 49,935 Add: Interest (Income), Net* (19) (198) EBIT** (non-GAAP measure) 42,070 49,737 Restructurin
Slide 48: EBIT & EBITDA (Non-GAAP Measures)
EBIT* & EBITDA (Non-GAAP Measures) *EBIT is defined as earnings before interest and taxes, while EBITDA is (In thousands) defined as earnings before interest, taxes, depreciation and 2015 (2) 2016 2017 2018 2019 amortization. We evaluate the profit performance of our segments Net income $ 228,328 $
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