Sherwin-Williams Company (the) · NYSE:SHW
Sherwin-Williams Company (the) — The Sherwin-Williams Company — Financial Community Presentation 2014
21 slides from Sherwin-Williams Company (the)'s conference presentation, May 22, 2014
Slide 1: Financial Overview
Financial Overview Sean Hennessy Senior Vice President – Finance & Chief Financial Officer
Slide 2: Consolidated Sales
Consolidated Sales $ Millions 12,000 10,186 9,534 10,000 8,766 7,810 8,005 7,980 7,776 7,191 7,094 8,000 6,114 6,000 4,000 2,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 % Change vs. Prior Year: 13.1 17.6 8.6 2.5 (0.3) (11.1) 9.6 12.7 8.8% 6.8% Financial Community Presentation – May 22, 2
Slide 3: Consolidated Gross Profit
Consolidated Gross Profit $ Millions $ Gross Profit % to Sales 5,000 4,617 4,222 4,500 3,745 4,000 3,413 3,598 3,499 3,481 3,263 3,500 3,080 2,701 3,000 2,500 46.0 2,000 44.2 44.9 44.8 45.3 42.8 43.7 43.8 44.3 42.7 1,500 1,000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013 Financial Commun
Slide 4: SG&A Expense
SG&A Expense $ Millions $ SG&A % to Sales 3,468 3,500 3,200 2,961 2,728 3,000 2,513 2,597 2,644 2,535 2,326 2,500 2,069 2,000 35.7 35.1 1,500 33.8 32.4 33.1 33.8 33.6 34.0 32.4 32.2 1,000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013 Financial Community Presentation – May 22, 2014 * Exclu
Slide 5: Operating Income
Operating Income* $ Millions 1,149 1,200 $ Operating Income % to Sales 1,002 947 1,000 903 855 753 784 754 728 800 632 600 11.6 12.5 10.5 10.7 11.3 400 10.3 10.3 9.7 9.9 8.9 200 0 2004 2005 2006 2007 2008 2009 2010 2011 2012** 2013 * Consolidated Gross Profit Minus SG&A Expenses Financial Community
Slide 6: 2013 Reportable Segments
2013 Reportable Segments $ Millions Net External Segment Sales Profit ROS* Paint Stores Group 6,002 991 16.5% Consumer Group 1,342 242 18.0% Global Finishes Group 2,005 171 8.5% Latin America Coatings Group 832 39** 4.6% Administrative 5 (356) - * Based on net external sales only. Financial Communit
Slide 7: Profit Before & After Tax
Profit Before & After Tax $ Millions 1,200.0 Profit Before Tax 1,086.0 Profit After Tax 1,000.0 912.9 907.3 834.3 800.0 741.5 753.0 714.5 656.2 677.8 615.6 622.8 631.0 580.2 576.1 600.0 463.3 476.9 435.8 462.5 441.9 332.1 400.0 200.0 0.0 2004 2005 2006 2007 2008 2009 2010 2011* 2012** 2013 PBT % to
Slide 8: Working Capital Ratio
Working Capital Ratio (Accounts Receivable + Inventory – Payables)/Sales 15.0% 13.8% 12.5% 12.7% 13.0% 11.7% 11.9% 11.2% 10.7% 10.9% 10.8% 10.5% 11.0% 9.0% 7.0% 5.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Financial Community Presentation – May 22, 2014
Slide 9: Working Capital & Days
Working Capital & Days $ Millions 2008 2009 2010 2011 2012 2013 Accounts Receivable $770.0 $696.1 $916.7 $989.9 $1,032.5 $1,097.8 Days 58 53 56 56 55 54 Inventories $864.2 $738.5 $917.7 $926.8 $920.3 $970.8 Days 104 96 94 96 91 86 Accounts Payable $738.1 $674.7 $909.6 $965.1 $923.0 $998.5 Days 68 68
Slide 10: Working Capital & Days
Working Capital & Days $ Millions 1Q 2013 1Q 2014 Accounts Receivable $1,130.9 $1,174.1 Days 53 50 Inventories $1,013.7 $1,096.8 Days 102 99 Accounts Payable $1,023.3 $1,130.3 Days 70 68 Net Working Capital $1,121.3 $1,140.6 % to Sales 11.7% 11.0% Financial Community Presentation – May 22, 2014
Slide 11: Net Operating Cash
Net Operating Cash $ Millions 1200 1083.8 Uses of Cash 1000 887.9 876.2 859.2 • Acquisitions • Capital Expenditures 800 706.6 735.8 712.1 • Buy Back Stock 605.3 569.8 • Manage Debt 600 546.4 • Pay Dividends 425.0 428.5 400 200 0 2008 2009 2010 2011 2012 2013 Net Operating Cash Net Operating Cash les
Slide 12: Shareholder Cash Generated
Shareholder Cash Generated Net Operating Cash Less Capex $ Millions Actual $ $ Per Share 917.1 1,000.0 900.0 759.0 800.0 700.0 600.0 442.4 500.0 332.3 9.16 400.0 6.49 300.0 191.3 200.0 3.09 2.16 1.94 100.0 0.0 1993 1998 2003 2008 2013 Financial Community Presentation – May 22, 2014
Slide 13: 2014 First Quarter Cash Flow
2014 First Quarter Cash Flow $ Millions 2013 2014 Net Operating Cash (91.1) (83.1) Capital Expenditures (31.2) (29.4) Dividends (51.7) (55.1) Free Cash Flow (174.1) (167.6) Financial Community Presentation – May 22, 2014
Slide 14: Free Cash Flow
Free Cash Flow Four Years by Quarter 650 550 450 350 250 150 50 -50 -150 -250 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Year 2010 -181 286 178 141 425 2011 -219 180 272 196 429 2012 -228 280 294 224 570 2013 -174 301 388 197 712 2014 -168 Financial Community Presentation – May 22, 2014
Slide 15: Total Debt : EBITDA Ratio
Total Debt : EBITDA Ratio 88% 98% 113% 103% 151% 129% 1,705 1,722 1800 1600 1336 1400 1129 1200 1,045 993 946 965 924 965 1000 834 818 800 600 400 200 0 2008 2009 2010 2011 2012 2013 EBITDA Total Debt Financial Community Presentation – May 22, 2014
Slide 16: Debt Maturity Schedule
Debt Maturity Schedule December 31, 2013 Due Date $ Millions 3.125% Senior Notes 2014 $500.0 1.350% Senior Notes 2017 $700.0 7.375% Debentures 2027 $119.2 4.000% Senior Notes 2042 $300.0 Other $6.7* Total Long Term Debt $1,625.9 Financial Community Presentation – May 22, 2014 * Includes $3.5 million
Slide 17: Interest Expense, Earnings Coverage and Debt to Capitalization
Interest Expense, Earnings Coverage and Debt to Capitalization Interest Exp. (Millions) Earnings Cov. (Times) 80.0 71.6 70.6 67.2 65.7 70.0 62.7 60.0 49.6 50.0 40.0 42.5 42.8 39.9 40.0 30.0 18.4x 11.9x 10.6x 18.3 20.0 14.5x 15.5x 14.2x 13.4x 13.7x 16.6x 10.0 0.0 2004 2005 2006 2007 2008 2009 2010 20
Slide 18: Rating Agencies
Rating Agencies Standard & Poor’s Rating Services April 2014 • Affirm Long-Term Rating at ‘A’ • Affirm Short-Term Rating at ‘A-1’ • Stable Outlook Moody’s Investors Services April 2014 • Affirm Long-Term Rating at ‘A-3’ • Affirm Short-Term Debt Rating at ‘P-2’ • Stable Outlook Fitch Ratings May 2014
Slide 19: Treasury Stock Acquired
Treasury Stock Acquired 2004-2013 Average Price Avg. Shares Shares Per Share Total Dollars Outstanding (000) 2004 6,600,000 40.00 263,980,168 144,736 2005 8,076,000 44.14 356,493,265 141,079 2006 5,600,000 54.49 305,158,657 137,342 2007 13,200,000 65.39 863,138,211 130,925 2008 7,250,000 54.28 393,5
Slide 20: Dividends Per Share
Dividends Per Share 1979 – 2014 $2.25 2.20 2.00 $2.00 $1.75 1.56 1.42 1.44 1.46 $1.50 1.40 1.26 $1.25 1.00 $1.00 .82 $0.75 .68 .62 .58 .60 .54 $0.50 .45 .48 .40 .32 .35 .25 .28 .21 .22 $0.25 .14 .16 .18 .19 .08 .10 .12 .13 .01 .04 .05 .06 $0.00 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Slide 21: Uses of Cash
Uses of Cash 2009-2013 ($ Millions) 5-Year Net Operating Cash: $4,285 Cash Dividends $840.9 $720.0 Capital Expenditures Treasury Stock $2,462.7 $590.4 Purchases Acquisitions Financial Community Presentation – May 22, 2014
The Sherwin-Williams Company — Financial Community Presentation 2014 on 6ix