Rpm International Inc. · NYSE:RPM
Rpm International — Q4 2023 Earnings Presentation
31 slides from Rpm International's earnings presentation, Jul 26, 2023
Slide 1: Fiscal 2023 Fourth-Quarter and Year-End Results
Fiscal 2023 Fourth-Quarter and Year-End Results July 26, 2023
Slide 2: Forward-Looking Statements & Regulation G
Forward-Looking Statements & Regulation G This presentation contains “forward-looking statements” relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us and are subject to uncert
Slide 3: Record Consolidated Q4-23 Sales, Adjusted EBIT and Cash Flow From Operations
Record Consolidated Q4-23 Sales, Adjusted EBIT and Cash Flow From Operations FINANCIAL HIGHLIGHTS Consolidated Sales and Adjusted EBIT Growth 40% Sales Growth Adj. EBIT Growth(1) 36.4% 35% 33.1% $2.02B 30% 25% RECORD Q4 SALES 20% +1.6% 17.1% 15% 13.7% 11.7% 9.3% 6 Consecutive 10% Quarters $267.8M 5%
Slide 4: Agility and MAP 2025 Drive Record Fourth-Quarter Consolidated Results
Agility and MAP 2025 Drive Record Fourth-Quarter Consolidated Results CPG PCG SPG Consumer Consolidated Record Sales Record Adjusted EBIT¹ HIGHLIGHTS • Record consolidated sales and adjusted EBIT, despite prioritizing cash flow over profitability • Strong demand from infrastructure and reshoring cap
Slide 5: Sales Growth in USD by Region | Q4-23
Sales Growth in USD by Region | Q4-23 EUROPE NORTH AMERICA 14% of total sales 79% of total sales -1.9% +1.4% ASIA/PACIFIC 2% of total sales +17.5% AFRICA/MIDDLE EAST/ CONSOLIDATED OTHER FOREIGN TOTAL 1% of total sales LATIN AMERICA +7.9% +1.6% 4% of total sales +9.3% Fiscal 2023 Fourth-Quarter Resul
Slide 6: Fiscal 2023 Fourth-Quarter Financial Results | Consolidated
Fiscal 2023 Fourth-Quarter Financial Results | Consolidated Record Q4 sales and adjusted EBIT ($ in millions, except Q4 Q4 KEY POINTS 2023 2022 % Change per share amounts) • Record Q4 sales of $2.02 billion include FX headwinds of 1.4% Sales $2,016 $1,984 +1.6% • Sales driven by increased pricing in
Slide 7: Construction Products Group
Fiscal 2023 Fourth-Quarter Financial Results CPG record Q4 sales and adjusted EBIT Q4 Q4 % Change CONSTRUCTION ($ in millions, except margins) 2023 2022 PRODUCTS GROUP Sales 748 746 +0.3% EBIT1 117 122 -3.6% Adjusted EBIT1 124 122 +1.7% Adjusted EBIT Margin1 16.6% 16.4% +20 bps • Record sales led by
Slide 8: Performance Coatings Group
Fiscal 2023 Fourth-Quarter Financial Results Continued strong results with record Q4 sales and adjusted EBIT PERFORMANCE ($ in millions, except margins) Q4 2023 Q4 2022 % Change COATINGS GROUP Sales 358 329 +8.8% EBIT1 49 41 +20.2% Adjusted EBIT1 52 43 +21.5% Adjusted EBIT Margin1 14.4% 12.9% +150 b
Slide 9: Specialty Products Group
Fiscal 2023 Fourth-Quarter Financial Results Sales and adjusted EBIT negatively impacted by OEM slowdown and destocking SPECIALTY ($ in millions, except margins) Q4 2023 Q4 2022 % Change PRODUCTS GROUP Sales 193 226 -14.3% EBIT1 8 51 -83.4% Adjusted EBIT1 16 44 -63.1% Adjusted EBIT Margin1 8.4% 19.6
Slide 10: Consumer Group
Fiscal 2023 Fourth-Quarter Financial Results Strong adjusted EBIT growth driven by MAP 2025 benefits and improved pricing Q4 Q4 CONSUMER ($ in millions, except margins) 2023 2022 % Change GROUP Sales 716 683 +4.9% EBIT1 103 79 +30.0% Adjusted EBIT1 105 80 +30.4% Adjusted EBIT Margin1 14.6% 11.8% +28
Slide 11: Inventory Management Drives Q4 Cash Flow From Operations
Inventory Management Drives Q4 Cash Flow From Operations Inventories $1,500 $206M Q4-23 Update $1,400 Improvement QoQ • Paid $213.9 million in dividends and repurchased $1,300 $50.0 million of shares in FY23 • Reduced inventories by $205.8 million from Q3- In millions $1,200 $77M 23 and $77.1 millio
Slide 12: Engineered Solutions to Serve Global Infrastructure Market
Engineered Solutions to Serve Global Infrastructure Market Hydroelectric Plant Hartsfield Airport Gare du Nord Station Floor System Fire Protection Manitoba, Canada Infrastructure slide Wall System Georgia, USA Paris, France Maharashtra Tunnel Fire Protection to be completed Maharashtra, India once
Slide 13: Fiscal 2024 First-Quarter Guidance
Fiscal 2024 First-Quarter Guidance CATEGORY Q1-24 OUTLOOK (YOY) PRIOR-YEAR RESULTS PRIOR-YEAR RECORD SALES | Consolidated +LSD % +17.1% Construction Products Group +LSD % +13.2% Performance Coatings Group +MSD % +19.2% Specialty Products Group -HSD % +11.3% Consumer Group +LSD % +22.5% ADJUSTED EBIT
Slide 14: Fiscal Year 2024 Guidance
Fiscal Year 2024 Guidance CATEGORY FY24 OUTLOOK (YOY) PRIOR-YEAR RESULTS PRIOR-YEAR RECORD SALES | Consolidated +MSD % +8.2% ADJUSTED EBIT | Consolidated +LDD to +Mid-Teen % +18.8% MSD = Mid Single Digit | LDD = Low Double Digit Expected FY24 Trends • Modest economic growth • Moderating headwinds fr
Slide 15: Appendix: Reconciliation of Non-GAAP to GAAP Measures
Appendix Reconciliation of Non-GAAP to GAAP Measures July 26, 2023
Slide 16: Consolidated Statements of Income: Three Months
Consolidated Statements of Income: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended May 31, 2023 % 2022 % % Change Net Sales $ 2,016,210 $ 1,983,890 1.6 Cost of Sales 1,241,062 61.6 1,245,388 62.8 Gross Profit 775,148 38.4 738,502 37.2 SG&A 530,071 26.3
Slide 17: Consolidated Statements of Income: Fiscal Year
Consolidated Statements of Income: Fiscal Year ($ in thousands, except per share and percent data) (Unaudited) Fiscal Year Ended May 31, 2023 % 2022 % % Change Net Sales $ 7,256,414 $ 6,707,728 8.2 Cost of Sales 4,508,370 62.1 4,274,675 63.7 Gross Profit 2,748,044 37.9 2,433,053 36.3 SG&A 1,956,040
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following are the non-GAAP financial measures used in this presentation: *Interest (Income) Expense, Net includes the combination of interest (income) expense and investment (income) expense, net. **EBIT is defined as earnings (loss) before interest and taxes. Managem
Slide 19: Adjustments Detail
Adjustments Detail a) Charges recorded in Cost of Goods Sold related to inventory write-offs in connection with restructuring activities at our Consumer, Construction Products and Specialty Products segments, partially offset by subsequent recoveries and revisions of accrual estimates. b) Reflects r
Slide 20: Reconciliation of Reported to Adjusted EPS: Three Months
Reconciliation of "Reported" to "Adjusted" EPS: Three Months (Unaudited) Reconciliation of Reported Earnings per Diluted Share to Adjusted Three Months Ended May 31, Earnings per Diluted Share (All amounts presented after-tax): 2023 2022 Reported Earnings per Diluted Share $ 1.18 $ 1.54 Restructurin
Slide 21: Reconciliation of Reported to Adjusted EPS: Fiscal Year
Reconciliation of "Reported" to "Adjusted" EPS: Fiscal Year (Unaudited) Reconciliation of Reported Earnings per Diluted Share to Adjusted Fiscal Year Ended May 31, Earnings per Diluted Share (All amounts presented after-tax): 2023 2022 Reported Earnings per Diluted Share $ 3.72 $ 3.79 Restructuring
Slide 22: EBIT: RPM Consolidated: Three Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Three Months ($ in thousands, except percent data) Three Months Ended May 31, (Unaudited) 2023 2022 Net Income $ 151,671 $ 199,306 Provision for Income Taxes 54,968 22,371 Income Before Income Taxes 206,639 221,677 Interest Expense 33,630 23,801 Investmen
Slide 23: EBIT: RPM Consolidated: Fiscal Year
EBIT** (Non-GAAP Measure): RPM Consolidated: Fiscal Year ($ in thousands, except percent data) Fiscal Year Ended May 31, (Unaudited) 2023 2022 Net Income $ 479,731 $ 492,466 Provision for Income Taxes 169,651 114,333 Income Before Income Taxes 649,382 606,799 Interest Expense 119,015 87,928 Investme
Slide 24: EBIT: Construction Products Segment: Three Months
EBIT** (Non-GAAP Measure): Construction Products Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended May 31, 2023 2022 Income Before Income Taxes $ 116,847 $ 120,286 Add: Interest Expense, Net* 437 1,419 EBIT** (non-GAAP measure) 117,284 121,705 Restructuring e
Slide 25: EBIT: Construction Products Segment: Fiscal Year
EBIT** (Non-GAAP Measure): Construction Products Segment: Fiscal Year ($ in thousands, except percent data) Fiscal Year Ended May 31, (Unaudited) 2023 2022 Income Before Income Taxes $ 309,683 $ 396,509 Add: Interest Expense, Net* 8,416 6,673 EBIT** (non-GAAP measure) 318,099 403,182 Inventory-relat
Slide 26: EBIT: Performance Coatings Segment: Three Months
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended May 31, 2023 2022 Income Before Income Taxes $ 49,861 $ 41,219 Add: Interest (Income), Net* (519) (168) EBIT** (non-GAAP measure) 49,342 41,051 Restructuring exp
Slide 27: EBIT: Performance Coatings Segment: Fiscal Year
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Fiscal Year ($ in thousands, except percent data) Fiscal Year Ended May 31, (Unaudited) 2023 2022 Income Before Income Taxes $ 133,757 $ 139,068 Add: Interest (Income), Net* (1,466) (575) EBIT** (non-GAAP measure) 132,291 138,493 Restructuring
Slide 28: EBIT: Specialty Products Segment: Three Months
EBIT** (Non-GAAP Measure): Specialty Products Segment: Three Months ($ in thousands, except percent data) Three Months Ended May 31, (Unaudited) 2023 2022 Income Before Income Taxes $ 8,481 $ 50,909 Add: Interest (Income) Expense, Net* (45) 4 EBIT** (non-GAAP measure) 8,436 50,913 Restructuring (cre
Slide 29: EBIT: Specialty Products Segment: Fiscal Year
EBIT** (Non-GAAP Measure): Specialty Products Segment: Fiscal Year ($ in thousands, except percent data) Fiscal Year Ended May 31, (Unaudited) 2023 2022 Income Before Income Taxes $ 103,279 $ 121,937 Add: Interest (Income) Expense, Net* (68) 86 EBIT** (non-GAAP measure) 103,211 122,023 Inventory-rel
Slide 30: EBIT: Consumer Segment: Three Months
EBIT** (Non-GAAP Measure): Consumer Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended May 31, 2023 2022 Income Before Income Taxes $ 99,449 $ 79,172 Add: Interest Expense (Income), Net* 3,417 (55) EBIT** (non-GAAP measure) 102,866 79,117 Restructuring expense
Slide 31: EBIT: Consumer Segment: Fiscal Year
EBIT** (Non-GAAP Measure): Consumer Segment: Fiscal Year ($ in thousands, except percent data) Fiscal Year Ended May 31, (Unaudited) 2023 2022 Income Before Income Taxes $ 378,157 $ 175,084 Add: Interest Expense (Income), Net* 3,372 (266) EBIT** (non-GAAP measure) 381,529 174,818 Inventory-related c