Sherwin-Williams Company (the) · NYSE:SHW

Sherwin-Williams Company (the) — The Sherwin-Williams Company — Investor Day (May 2013)

27 slides from Sherwin-Williams Company (the)'s investor day presentation, May 2013

  1. Slide 1: Industry Overview

    Industry Overview Chris Connor Chairman & CEO Financial Community Presentation – Thursday, Financial Community May Presentation 12,23,2011 – May 2013

  2. Slide 2: 2012 Coatings Industry

    2012 Coatings Industry Global Mix by Category Total Coatings Special 2012 Purpose 7.8 Billion Gallons (+5%) Architectural 20% ~104 Billion Dollars (+5%) 43% OEM Product Finishes 37% Financial Community Presentation Source: Orr & Boss Inc. / ChemQuest estimates; Segment Percents Based on Dollars – Th

  3. Slide 3: Coatings Demand by Region

    Coatings Demand by Region Share of Global Volume by Category EMEA N. America 28% 24% 31% 26% 33% 19% 24% Asia-Pacific 22% 37% 30% South America 7% 42% 49% 9% 4% 4% ROW ~ 4% All Coatings OEM Product Finishes Architectural Coatings Special Purpose Coatings Source: Orr & Boss, Company Estimates Financi

  4. Slide 4: Coatings Industry: Top Global Manufacturers - 2012

    Coatings Industry Top Global Manufacturers - 2012 • Top 10 suppliers account for ~57% global share All Others • More than 15,000 (>15,000 firms) companies make up the balance Source: Kusumgar, Nerlfi & Growney, CompanyFinancial Data Community Presentation – Thursday, Financial Community May Presenta

  5. Slide 5: Top Global Manufacturers – 2012 (ProForma)

    Coatings Industry Top Global Manufacturers – 2012 (ProForma) • Sherwin-Williams acquisition of Comex • PPG acquisition of Akzo Nobel N.A. All Others • Carlyle Group (>15,000 firms) acquisition of Dupont Performance Coatings • Valspar strategic supply relationship with Ace Hardware Source: Company Es

  6. Slide 6: U.S. Coatings Industry

    U.S. Coatings Industry Sales ($) Mix by Category Total Coatings Special 2012 Purpose 1.18 Billion Gallons (+13%) 14% 20.68 Billion Dollars (+11%) Architectural 57% OEM Product Finishes 29% Financial Community Presentation Source: American Coatings Association; Segment Percents Based on Gallons – Thu

  7. Slide 7: Architectural Coatings Gallons (Millions)

    U.S. Coatings Industry Architectural Coatings Gallons (Millions) 850 800 Millions of Gallons 750 ~ 740 – 760 million 700 ~ 671 Million 650 600 550 ~ ACA Estimate 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Financial Community Presentation Source: U.S

  8. Slide 8: Architectural Coatings Gallons (Millions)

    U.S. Coatings Industry Architectural Coatings Gallons (Millions) 850 800 Millions of Gallons 750 ~ 740 – 760 million 700 ~ 671 Million 650 ~ 636 Million 600 550 ~ ACA Estimate ~ S-W Estimate 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Financial Commu

  9. Slide 9: Architectural Coatings Gallons (Millions)

    U.S. Coatings Industry Architectural Coatings Gallons (Millions) 850 ~ 804 Million 800 Millions of Gallons 750 ~ 740 – 760 million 700 650 600 550 ~ ACA Forecast 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Financial Community Presentation Source: U.S

  10. Slide 10: Favorable Customer Mix

    Favorable Customer Mix DIY Contractor Shift will Continue 43% 59% 57% 41% Contractor DIY Source: U.S. Dept of Commerce/ACA/CompanyFinancial Estimates Community Presentation – Thursday, Financial Community May Presentation 12,23,2011 – May 2013

  11. Slide 11: DIY Channel Share, U.S. Home Centers

    DIY Channel Share, U.S. Most Recent Purchase by Store Type Mass Merchants 13% Paint Stores 17% Home Centers 59% Hardware 9% Lumber/Building Supply 2% Source: PCRP 2012 Financial Community Presentation – Thursday, Financial Community May Presentation 12,23,2011 – May 2013

  12. Slide 12: Contractor Channel Share, U.S. Paint Stores

    Contractor Channel Share, U.S. Primary Outlet by Store Type Home Center 6.0% Paint Stores 90.3% Hardware 1.8% Discount/Other 1.9% Source: S-W Marketing: 2012 Financial Community Presentation – Thursday, Financial Community May Presentation 12,23,2011 – May 2013

  13. Slide 13: Coatings Industry Demand Drivers

    U.S. Coatings Industry Demand Drivers • Architectural Paint – Residential – New / Turnover – Home Remodeling – Non-Residential – New / Maintenance Financial Community Presentation – Thursday, Financial Community May Presentation 12,23,2011 – May 2013

  14. Slide 14: Existing Home Sales in 000s Units

    Existing Home Sales in 000s Units 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 . Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Source: National Association of Realtors Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-0

  15. Slide 15: Existing Home Sales vs. New Home Sales

    Existing Home Sales in 000s Units 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 . Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Source: National Association of Realtors / U.S. Census Dec-05 Mar-06 Financial Ju

  16. Slide 16: Housing Starts (SAAR), Single Family

    000 Units 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 . Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Source: U.S. Census Bureau Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-

  17. Slide 17: Housing Starts (SAAR), Structures with 5+ Units

    000 Units 0 50 100 150 200 250 300 350 400 450 . Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Source: U.S. Census Bureau Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08

  18. Slide 18: Remodeling Activity

    Remodeling Activity LIRA Index 160 25% 19.7% 16.8% 20% 150 145.5 15% 10.6% 140 8.2% 8.8% 10% 134.4 Billions of $ 3.7% 2.2% 2.1% 5% 130 0.5% -0.4% 0.0% 127 -1.3% -2.1% -1.4% 124.1 0% -4.4% 121.6 120 -6.7% -5% 114.3 114 114.8 115.1 112 113.1 112.3 111.6 112.6 112.3 -10% 110.7 110 -15% 100 -20% Q4-09 Q

  19. Slide 19: Non-Residential Square Feet

    U.S. Architectural Paint 160,000 Non-Residential 2006 vs. 2005: 2007 vs. 2006: 2008 vs. 2007: 2009 vs. 2008: 2010 vs. 2009: 2011 vs. 2010 2012 vs. 2011: 2013 140,000 1% -5% -19% -46% -18% -2% +4% Non-Residential Sq.Ft. in 000s 120,000 100,000 80,000 60,000 40,000 20,000 0 May May May May May May May

  20. Slide 20: Coatings Industry Demand Drivers

    U.S. Coatings Industry Demand Drivers • Architectural Paint – Residential – New / Turnover – Home Remodeling – Non-Residential – New / Maintenance • OEM Product Finishes – Industrial Production Financial Community Presentation – Thursday, Financial Community May Presentation 12,23,2011 – May 2013

  21. Slide 21: U.S. Manufacturing Activity

    U.S. Manufacturing Activity 65 60 55 50 45 40 35 30 25 20 May May May May Mar Mar Mar Mar Mar Jul Jul Jul Jul Dec Dec Dec Dec Feb Jun Feb Jun Feb Jun Feb Jun Feb Nov Nov Nov Nov Sept Sept Sept Sept Oct Oct Oct Oct Jan Jan Jan Jan Jan Apr Apr Apr Apr Apr Aug Aug Aug Aug 2009 2010 2011 2012 2013 Sourc

  22. Slide 22: U.S. Manufacturing Activity

    U.S. Manufacturing Activity April March Index 2013 2013 Change Direction Rate of Change PMI 50.7 51.3 -0.6 Growing Slower New Orders 52.3 51.4 +0.9 Growing Faster Production 53.5 52.2 +1.3 Growing Faster Employment 50.2 54.2 -4.0 Growing Slower Inventories 46.5 49.5 -3.0 Contracting Faster Order Bac

  23. Slide 23: Coatings Industry Demand Drivers

    U.S. Coatings Industry Demand Drivers • Architectural Paint – Residential – New / Turnover – Home Remodeling – Non-Residential – New / Maintenance • OEM Product Finishes – Industrial Production • Special Purpose – Infrastructure Investment – Light Vehicle Sales – Miles Driven Financial Community Pre

  24. Slide 24: U.S. Infrastructure Investment

    Protective & Marine Coatings U.S. Infrastructure Investment 25 20 15 Percent Change 10 5 0 -5 -10 2011 2012 2013p -15 Commercial Manufacturing Power/Comm. Mining Non-Building Source: IHS Global Insight Financial Community Presentation – Thursday, Financial Community May Presentation 12,23,2011 – May

  25. Slide 25: Light Vehicle Sales

    Light Vehicle Sales 2011 2012 2013 2,000,000 United States Mexico 150,000 1,500,000 1,000,000 100,000 500,000 50,000 -- -- Apr. May July Nov. Aug. Sept. Jan. Mar. June Dec. Feb. Oct. Nov. July Apr. May Aug. Sept. Jan. Mar. June Dec. Feb. Oct. 400,000 Brazil 2,500,000 China 2,000,000 300,000 1,500,00

  26. Slide 26: Vehicle Miles Driven

    U.S. Vehicle Miles Driven Rolling 12 Month Miles Recession 3.0 2.8 2.6 2.4 Trillions of Miles 2.2 2.0 1.8 1.6 1.4 1.2 1.0 Source: www.fhwa.dot.gov Financial Community Presentation – Thursday, Financial Community May Presentation 12,23,2011 – May 2013

  27. Slide 27: Sherwin-Williams Perspective

    Sherwin-Williams Perspective Market Summary 1. Remain Bullish on Americas Expect Pace of Growth in Most Segments to Exceed Rest of World 2. U.S. Architectural Market Remains Poised for a Multi-Year Rebound 3. Painting Contractor Share is Back on a Sustainable Growth Path with Favorable Demographics

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