Sherwin-Williams Company (the) · NYSE:SHW
Sherwin-Williams Company (the) — The Sherwin-Williams Company — Investor Day (May 2016)
27 slides from Sherwin-Williams Company (the)'s investor day presentation, May 26, 2016
Slide 1: Company Overview
Company Overview JOHN MORIKIS President & Chief Executive Officer
Slide 2: Why SHW?
Why SHW? • Market Leading Competitive Strengths • Controlled Distribution • Pricing Discipline • Brand Power • Technology Leadership • Strong Financial Position • Clear Strategy For Global Growth • Track Record of Generating Attractive Returns for Shareholders • Experienced Management Team and Stron
Slide 3: Financial Highlights (Non-GAAP)
Company Overview Financial Highlights (Non-GAAP) 2013 2014 2015 ‘13-’14 % Chg. ‘14-’15 % Chg. Net Sales $10.19B $11.13B $11.34B +9.3% +1.9% EBITDA $1,336M $1,521M $1,809M +13.8% +18.9% Net Income $753M $866M $1,053M +15.1% +21.7% % Sales 7.4% 7.8% 9.3% Earnings Per Share $7.26 $8.78 $11.16 +20.8% +2
Slide 4: Financial Highlights 1Q-16 vs 1Q-15
Company Overview Financial Highlights 1Q-16 vs 1Q-15 GAAP Non-GAAP 1Q-15 1Q-16 % Chg. 1Q-16 % Chg. Net Sales $2.45B $2.57B 5.1% $2.57B 5.1% EBITDA $255.0M $290.8 14.0% $322.0M 26.3% Net Income $131.4M $147.1M $169.7M 12.0% 29.1% % Sales 5.4% 5.7% 6.6% Earnings Per Share $1.38 $1.57 13.8% $1.81 31.2%
Slide 5: Reportable Segments
Reportable Segments The Americas Group Consumer Consumer Group Global Finishes Global Finishes Group Paint Stores Group Group Group Diversified Brands Protective & Marine Automotive Finishes Latin America Coatings Group Global Supply Chain Product Finishes Financial Community Presentation - May 26,
Slide 6: Revenue & Profit by Segment - 2015
Company Overview Revenue & Profit by Segment - 2015 Segment Revenues: $11.34B Segment Profit: $1.96B 20% Operating Profit as a % of Sales Average: 17.3% Latin America 15% Global Finishes Paint Stores 10% Consumer 5% 0% 20% 40% 60% 80% 100% Share of Revenue Financial Community Presentation - May 26,
Slide 7: Controlled Distribution
Controlled Distribution Controlled Distribution Accounts for ~75% of Consolidated Sales Financial Community Presentation - May 26, 2016
Slide 8: Controlled Distribution Advantages
Controlled Distribution Advantages • Direct Relationship with Customer / End-User • Control Over Brands, Pricing, Inventory, Staffing • Control Pace and Place of Growth Financial Community Presentation - May 26, 2016
Slide 9: Pricing Discipline
Pricing Discipline $ Gross Profit 6,000 5,559 $5,559 % of Sales 5,164 $5,164 Raw Material Index $4,617 4,617 5,000 $4,222 4,222 $3,745 3,745 4,000 3,499 $3,499 3,481 $3,481 $3,263 $ Millions 3,263 49.0 46.0 45.3 46.4 3,000 44.8 44.3 43.8 42.7 2,000 1.4 1,000 1.2 1.0 0 2008 2008 2009 2009 2010 2010 2
Slide 10: Brand Equity
Brand Equity Leading U.S. Brand Awareness Architectural Paint Brand Stain & Protective Finish Brand Aerosol Paint Brand Awareness Auto Specialty Paint Brand Painting Tool Brand Wood Sealer Brand Financial Community Presentation - May 26, 2016
Slide 11: Brand Marketing
Brand Marketing Strategic Brand Development & Extension Open/Expand New Distribution Extend Product Categories Capitalize on Current Distribution Platform Achieve Better Brand Alignment in Latin America Customer Relationship Branding Financial Community Presentation - May 26, 2016
Slide 12: Leading Technology
Leading Technology Total Technical Expenditures Research & Development Commercialization 160 140 120 100 Millions 80 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 % of Sales 1.5 1.3 1.3 1.3 1.4 1.3 1.5 1.5 1.4 1.4 1.3 Financial Community Presentation - May 26, 2016
Slide 13: Opportunity Territories
Opportunity Territories Financial Community Presentation - May 26, 2016
Slide 14: Opportunity Territories: Maintenance & Durability
Opportunity Territories Maintenance & Durability Financial Community Presentation - May 26, 2016
Slide 15: Opportunity Territories: The Painting Process
Opportunity Territories The Painting Process Financial Community Presentation - May 26, 2016
Slide 16: Opportunity Territories: Custom Solutions
Opportunity Territories Custom Solutions Financial Community Presentation - May 26, 2016
Slide 17: Opportunity Territories: Customer Connectivity
Opportunity Territories Customer Connectivity Financial Community Presentation - May 26, 2016
Slide 18: Opportunity Territories: Visual Appearance & Visualization
Opportunity Territories Visual Appearance & Visualization Financial Community Presentation - May 26, 2016
Slide 19: Opportunity Territories: Sustainability
Opportunity Territories Sustainability Financial Community Presentation - May 26, 2016
Slide 20: People Development
People Development Talent Supply Chain In 2015 We… • Hired More Than 1,400 Management Trainees Company Wide • Retained More Than 91% of Our Global Workforce • Filled More Than 93% of Openings Internally Financial Community Presentation - May 26, 2016
Slide 21: Why VAL?
Why VAL? Sherwin-Williams: Significantly Expands Position in Asia-Pacific and EMEA New Businesses Extends Capability Set Into Packaging and Coil With Leadership Positions and Opportunities Provides Scale Platform to Enable Growth in Asia-Pacific Broadens Product Offerings With Well-Known Bra
Slide 22: Enhanced Scale
Enhanced Scale A More Balanced Global Coatings Company Sherwin-Williams Today Sherwin-Williams with Valspar (CY 2015 Revenue & Profit by Segment) (CY 2015 Pro Forma Revenue & Profit by Segment) 25% Segment Revenues: $11.34bn 25% Segment Revenues: $15.4bn(2) Segment Profit:$1.96bn(1) Segment Profit:$
Slide 23: Enhances Coverage
Enhances Coverage Alignment with Global Demand Sherwin-Williams Revenue by Geography Paints and Coatings Demand by Geography International Latin America RoW North America 16% International 7% 5% 19% 24% Asia Pacific Europe 42% 27% US US 76% 84% 2015: $11.3bn Pro Forma 2015: $15.6bn Sales: $120bn Fin
Slide 24: Exceptional Combination of Brands and Innovative Technologies
Exceptional Combination of Brands and Innovative Technologies Proven Global Brand Portfolio Innovative Technologies Resin Technology and Internal Manufacturing 49 Non-BPA Patent Portfolio Valspar Hydrochroma Zero VOC Color Dispersion AquaGuard Water-Based Coatings Valde Low-Temp Fast Cure
Slide 25: Clearly Defined & Meaningful Cost Synergies
Clearly Defined & Meaningful Cost Synergies $280 Million of Identified Synergies… …Expected To Be Realized by 2018 COGS $320 $280 SG&A Raw Material 42% $140 45% 2017 2018 Long-Term R&D Manufacturing Annual Synergy 5% /Distribution Target 8% Clear Path to Realize Identified Savings Expect to Incu
Slide 26: Transaction Creates Significant Value
Transaction Creates Significant Value Immediately Accretive to Earnings (Excluding One-Time Costs) Pro Forma Revenues Pro Forma EBITDA (CY2015 Sales, $ in Billions) (CY2015 EBITDA, $ in Billions) $4.3 $15.6 $2.8 $280mm $0.7 Synergies $2.5 $11.3 $1.8 EBITDA 16.0% 17.8%(1) Margin Pro Forma Pro Forma F
Slide 27: Introductions
Introductions… Jay Davisson Cheri Phyfer Joel Baxter David Sewell President President & GM, President & GM, President The Americas Group Diversified Brands Global Supply Chain Global Finishes Group Consumer Group Consumer Group Financial Community Presentation - May 26, 2016
The Sherwin-Williams Company — Investor Day (May 2016) on 6ix