Sherwin-williams Company (the) · NYSE:SHW
Sherwin-williams Company (the) — The Sherwin-Williams Company — Investor Day (June 2021)
25 slides from Sherwin-williams Company (the)'s investor day presentation, Jun 8, 2021
Slide 1: Financial Overview
2021 F I NANCI AL CO M M UNI TY P RE S E NTATI O N FINANCIAL OVERVIEW AL M I S T Y S Y N SENIOR VICE PRESIDENT - FINANCE & CHIEF FINANCIAL OFFICER
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain "forward-looking statements," as defined under U.S. federal securities laws. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," “may,” “will,” “should," "project," "could," "plan," "g
Slide 3: Consolidated Sales
Consolidated Sales Consolidated Sales $ In Millions $18,362 $17,534 $17,901 $14,984 $11,856 4.6% 26.4% 17.0% 2.1% 2.6% 2016 2017 2018 2019 2020 FINANCIAL COMMUNITY PRESENTATION – JUNE 8, 2021 3 Refer to Financial Appendix 1: Income Statement
Slide 4: Consolidated Gross Profit
Consolidated Gross Profit Excluding Acquisition Related Costs & Other Adjustments Adjusted Gross Profit Adjusted Gross Margin $8,694 Proforma Gross Margin $8,072 $ In Millions $7,513 $6,886 $5,925 50.0% 46.0% 47.3% 45.1% 42.8% 45.9% 44.6% 2016 2017 2018 2019 2020 Expect Long-Term Gross Margin Range
Slide 5: SG&A Expense
SG&A Expense Excluding Acquisition Related Costs & Other Adjustments Adjusted SG&A Adjusted SG&A % to Sales Proforma SG&A % to Sales $5,498 $5,244 $ In Millions $4,969 $4,694 $4,102 34.6% 31.3% 31.1% 29.9% 29.3% 29.9% 28.3% 2016 2017 2018 2019 2020 Continue to Invest in Long-Term Growth Opportunitie
Slide 6: Operating Income
Operating Income Excluding Acquisition Related Costs & Other Adjustments Adjusted Operating Income $3,196 Adjusted Operating Income % to Sales Proforma Operating Income % to Sales $2,828 $ In Millions $2,544 $2,191 $1,824 17.4% 15.4% 15.8% 14.6% 14.5% 14.6% 14.8% 2016 2017 2018 2019 2020 Focus on Dr
Slide 7: Profit Before & After Tax
Profit Before & After Tax Excluding Acquisition Related Costs & Other Adjustments Adjusted Profit Before Tax $2,824 Adjusted Profit After Tax Continuing Operations $ In Millions $2,440 $2,260 $2,186 $1,957 $1,974 $1,729 $1,761 $1,430 $1,214 2016 2017 2018 2019 2020 PBT % to Sales 14.6% 13.1% 12.5% 1
Slide 8: Earnings Before Interest, Taxes, Depreciation & Amortization
Earnings Before Interest, Taxes, Depreciation & Amortization Excluding Acquisition Related Costs & Other Adjustments % to Sales $3,441 Adjusted EBITDA $3,057 $ In Millions $2,822 $2,423 $2,007 18.7% 16.9% 17.1% 16.2% 16.1% 2016 2017 2018 2019 2020 FINANCIAL COMMUNITY PRESENTATION – JUNE 8, 2021 8 Re
Slide 9: Working Capital Performance
Working Capital Performance Accounts Receivable + Inventory – Payables % to Sales Working Capital $ In Millions $2,055 $2,102 $2,035 $1,971 $1,764 13.6% 12.5% 12.4% 11.6% 11.7% 9.6% 2016* 2017** 2018 2019 2020 Target FY Working Capital as a % to Sales of 11% to 11.5% *PRO FORMA FINANCIAL COMMUNITY P
Slide 10: Cash Flow Performance, as Reported
Cash Flow Performance, as Reported In Millions of Dollars Uses of Cash $3,409 $3,105 • Capital Expenditures • Pay Dividends $2,321 • Acquisitions $1,944 $1,992 • Share Repurchases $1,884 $1,661 $1,693 • Manage Debt $1,309 $1,070 Net Operating Cash Net Operating Cash Less Cap. Ex. 2016 2017 2018 2019
Slide 11: Consistent Capital Allocation Philosophy
Consistent Capital Allocation Philosophy WE WILL NOT HOLD CASH • Maintain CAPEX Below 2% of Sales BALANCED CAPITAL KEY OBJECTIVES – FY21 - Excluding HQ & R&D ALLOCATION GOALS Facility Projects • BBB+ Target CAPEX Invest Rating • Dividend Return 30% of PY Earnings Dividend 30% of PY – FY21 Proposed I
Slide 12: Consolidated Net Operating Cash & Uses of Cash
Consolidated Net Operating Cash & Uses of Cash 5-Year Net Operating Cash: ~$10.9B 2016-2020 Uses of Cash • Capital Expenditures • Cash Dividends - Acquisitions - $77M in 2019 $3.5 $3.8 • Share Repurchases • Manage Debt $1.3 $1.9 FINANCIAL COMMUNITY PRESENTATION – JUNE 8, 2021 12
Slide 13: Debt to Adjusted EBITDA Ratio
Debt to Adjusted EBITDA Ratio Excluding Acquisition Related Costs & Other Adjustments Debt Adjusted EBITDA Debt to Adjusted EBITDA $ In Millions $11,755 $10,521 $9,344 $9,109 4.5 $8,685 4.3 $8,292 3.3 2.8 2.4 2.5 $3,441 $3,667 $2,822 $3,057 $2,617 $2,423 @ Close - 6/1/2017 2017 2018 2019 2020 Q1 202
Slide 14: Maturities of Long-Term Debt
Maturities of Long-Term Debt as of March 31, 2021 & December 31, 2017 2017 $2,250 2021 $1,619 $1,619 $1,500 $ In Millions $1,250 $1,250 $800 $660 $650 $650 $650 $650 $545 $550 $500 $500 $500 $500 $350 $350 $300 $300 $300 $295 $25 $4 $4 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Slide 15: Dividends Per Share
Dividends Per Share 2005 - 2021 +22.9% 2020 was 42nd Consecutive Year $2.20* of Dividend Increases $1.79 $1.51 $1.12 $1.13 $1.15 $0.89 $0.73 $0.67 $0.47 $0.48 $0.49 $0.52 $0.42 $0.46 $0.33 $0.27 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Dividend Returned to
Slide 16: Capital Allocation: Strategic M&A
Capital Allocation Strategic M&A TARGET CRITERIA VALUE DRIVERS • Improve Technology Portfolio • Fit Core Competencies • Leverage Acquisitions Across Our Global Businesses • Strengthen Global Reach • Leadership in Key Technologies, Markets, • Supply Products Across • Fills Product or Capability Gap o
Slide 17: Share Repurchase History
Share Repurchase History 2011 – 2020 (millions) Shares 20.8 Avg. Price per Share $209.08 14.1 13.8 12.9 $154.99 11.7 10.7 $134.06 $92.86 $73.55 $59.63 4.6 5.0 $40.42 $26.05 2011 2012 2013 2014 2015 2016* 2017* 2018 2019 2020 317.0 311.8 309.1 296.2 283.6 283.5 284.8 285.0 280.3 275.8 Average Diluted
Slide 18: Summary Capitalization
Summary Capitalization Strong Financial Profile Provides Flexibility • $2.7B Remaining Liquidity Available at 12/31/2020 . 3/31/21 Cash $227M • Expect to Maintain Balance Sheet Flexibility to Pursue Growth Opportunities Debt $8.3B • Annual Cash Generation Comfortably Revolving Credit Facility $2.0B
Slide 19: A Strong Foundation
A STRONG FOUNDATION • Track Record of Financial Performance & Focused Execution In All Economic Environments • Large, Stable Revenue Base with Improving EBITDA Margins • Strong Balance Sheet • Experienced & Determined Management Team …ON WHICH WE WILL CONTINUE TO BUILD • Grow Revenue Organically & t
Slide 20: Second Quarter 2021 Sales Guidance
Second Quarter 2021 Sales Guidance Original April 27, 2021/Revised June 8, 2021 ORIGINAL APRIL 27, 2021 SECOND QUARTER 2021 SALES GUIDANCE Sales Guidance Up Mid to High-Teens By Segment: The Americas Group Up Mid to High-Teens Consumer Brands Group Down Low-Double-Digit to Mid-Teens Performance Coat
Slide 21: Second Quarter 2021 Sales Guidance
Second Quarter 2021 Sales Guidance Original April 27, 2021/Revised June 8, 2021 ORIGINAL APRIL 27, 2021 REVISED JUNE 8, 2021 SECOND QUARTER 2021 SALES GUIDANCE SECOND QUARTER 2021 SALES GUIDANCE Sales Guidance Up Mid to High-Teens Sales Guidance Up High-Teens By Segment: By Segment: The Americas Gro
Slide 22: Full Year 2021 Guidance
Full Year 2021 Guidance Sales & EPS ORIGINAL JANUARY 28, 2021 FULL YEAR 2021 SALES GUIDANCE Sales Guidance Up Mid to High-Single- Digits By Segment: The Americas Group Up Mid to High-Single- Digits Consumer Brands Group Up or Down Low-Single- Digits Performance Coatings Group Up Mid-Single Digits FI
Slide 23: Full Year 2021 Guidance
Full Year 2021 Guidance Sales & EPS ORIGINAL JANUARY 28, 2021 REVISED JUNE 8, 2021 FULL YEAR 2021 SALES GUIDANCE FULL YEAR 2021 SALES GUIDANCE Sales Guidance Up Mid to High-Single- Sales Guidance Up High-Single to Low- Digits Double Digits By Segment: By Segment: The Americas Group Up Mid to High-Si
Slide 24: Full Year 2021 Guidance
Full Year 2021 Guidance Sales & EPS ORIGINAL JANUARY 28, 2021 REVISED JUNE 8, 2021 FULL YEAR 2021 SALES GUIDANCE FULL YEAR 2021 SALES GUIDANCE Sales Guidance Up Mid to High-Single- Sales Guidance Up High-Single to Low- Digits Double Digits By Segment: By Segment: The Americas Group Up Mid to High-Si
Slide 25: Full Year 2021 Guidance
Full Year 2021 Guidance Sales & EPS ORIGINAL JANUARY 28, 2021 REVISED JUNE 8, 2021 FULL YEAR 2021 SALES GUIDANCE FULL YEAR 2021 SALES GUIDANCE Sales Guidance Up Mid to High-Single- Sales Guidance Up High-Single to Low- Digits Double Digits By Segment: By Segment: The Americas Group Up Mid to High-Si
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