Sherwin-Williams Company (the) · NYSE:SHW

Sherwin-Williams Company (the) — The Sherwin-Williams Company — Investor Day (May 2014)

27 slides from Sherwin-Williams Company (the)'s investor day presentation, May 22, 2014

  1. Slide 1: Industry Overview

    Industry Overview Chris Connor Chairman & Chief Executive Officer

  2. Slide 2: 2013 Coatings Industry: Global Mix by Category

    2013 Coatings Industry Global Mix by Category OEM Product Special Purpose Finishes 21% 42% Total Coatings Architectural 2013 37% ~8.3 Billion Gallons (+6.4%) ~108.7 Billion Dollars (+4.5%) Source: Kusumgar, Nerlfi & Growney, Financial Community Presentation – May 22, 2014 Company Estimates

  3. Slide 3: Coatings Demand by Region

    Coatings Demand by Region Share of Global Revenue by Category EMEA North 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 Financial Community Presentation – May 22

  4. Slide 4: Top Global Manufacturers - 2013

    Coatings Industry Top Global Manufacturers - 2013 Akzo Nobel • Top 10 suppliers account for ~57% global share All Others (>10,000 firms) • More than 10,000 companies make up the balance Financial Community Presentation – May 22, 2014 Source: Kusumgar, Nerlfi & Growney, Company Data

  5. Slide 5: U.S. Coatings Industry Mix by Category

    U.S. Coatings Industry Sales ($) Mix by Category OEM Product Finishes Architectural 29% Total Coatings 57% Special Purpose 2013 14% ~1.2 Billion Gallons (+5.2%) ~21.8 Billion Dollars (+5.6%) Source: ACA; Company Estimates Financial Community Presentation – May 22, 2014 Segment Breakdown Based on Gal

  6. Slide 6: Architectural Coatings Gallons (Millions)

    U.S. Coatings Industry Architectural Coatings Gallons (Millions) 850 800 750 ~ 740 – 760 million Millions of Gallons 700 650 ~ 652 Million 600 550 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Financial Community Presentation – May 22, 2014 Source: U.S

  7. Slide 7: Architectural Coatings Gallons (Millions)

    U.S. Coatings Industry Architectural Coatings Gallons (Millions) 850 800 750 ~ 740 – 760 million Millions of Gallons 700 ~ 701 Million 650 600 550 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Financial Community Presentation – May 22, 2014 Source: U.S

  8. Slide 8: Favorable Customer Mix

    Favorable Customer Mix DIY Contractor Shift will Continue 42% 59% 58% 41% Contractor DIY Financial Community Presentation – May 22, 2014 Source: U.S. Dept of Commerce/ACA/Company Estimates

  9. Slide 9: U.S. Architectural Paint Market: Current

    U.S. Architectural Paint Market Breakdown by Segment (Current) Residential Repaint (Pro) 25% Non-Residential (175M Gal) Repaint New Non- 16% Residential (112M Gal) 6% (42M Gal) DIY New Residential 42% 11% (294M Gal) (77M Gal) 701 Million Gallons Financial Community Presentation – May 22, 2014 Source

  10. Slide 10: U.S. Architectural Paint Market: Peak

    U.S. Architectural Paint Market Breakdown by Segment (Peak) Residential Non-Residential Repaint (Pro) Repaint New Build 23% 15% (185M Gal) (121M Gal) +77M Repaint (Pro) New Non- +19M Residential 7% (54M Gal) DIY 38% (304M Gal) Repaint (DIY) New Residential 18% +10M (142M Gal) 807 Million Gallons Fin

  11. Slide 11: U.S. Architectural Paint Market: Normal

    U.S. Architectural Paint Market Breakdown by Segment (Normal) Residential Non-Residential Repaint (Pro) Repaint New Build 24% 16% +48M (182M Gal) (122M Gal) Repaint (Pro) New Non- +17M Residential 7% (53M Gal) DIY 38% (294M Gal) Repaint (DIY) New Residential ~Flat 15% (114M Gal) 760 Million Gallons

  12. Slide 12: Coatings Industry Demand Drivers

    U.S. Coatings Industry Demand Drivers ◆ Architectural Paint – Residential – New / Turnover – Home Remodeling – Non-Residential – New / Maintenance Financial Community Presentation – May 22, 2014

  13. Slide 13: Existing Home Sales

    Existing Home Sales in 000s of units 1,000 2,000 3,000 4,000 5,000 6,000 8,000 7,000 0 . Mar-00 Jun-00 Sep-00 Dec-00 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 Dec-05 Financial Community Presentation – May 22,

  14. Slide 14: New Home Sales vs. Existing Home Sales

    Existing Home Sales in 000s Units 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 0 . 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 Dec-05 Mar-06 Jun-06 U.S. Architectural Paint Financial Community Presentation –

  15. Slide 15: Housing Starts: Single Family

    000s Units 1,000 1,200 1,400 1,600 1,800 2,000 0 200 400 600 800 . Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Single Family 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 Financial Community Presentation – May 22, 2014 Sep-06 Housing St

  16. Slide 16: Housing Starts: Structures with 5+ Units

    000s Units 50 0 100 150 200 250 300 350 400 450 . 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 Structures w/ 5+ Units Dec-05 Mar-06 Jun-06 000 Units in structures with 5 units or more Sep-06 Financial Community P

  17. Slide 17: U.S. Home Ownership Rate

    U.S. Home Ownership Rate Lowest Rate in 19 Years Recession Home Ownership Rate Seasonally Adjusted Home Ownership Rate Financial Community Presentation – May 22, 2014 Source: U.S. Census Bureau

  18. Slide 18: Remodeling Activity

    Remodeling Activity LIRA Index 170 20% 14.5% 160 13.1% 15% 11.0%10.7% 9.4% 158.9 9.5% 8.4% 9.0% 10% 150 7.4% 6.3% 6.2% 153.1 145.5 4.2% 4.5% 4.5% 140.5 5% 139.9 Billions of $ 140 0.5% 0.3% 138.8 -0.4% -1.3% -1.5% 0% 130 -4.4% 128.7 126.8 126 127 -6.7% 123.1 -5% 120.9 121.5 119.4 120 114.3 114.7 -10%

  19. Slide 19: New Non-Residential Square Footage

    U.S. Architectural Paint New Non-Residential Square Footage 160,000 2006 vs. 2005: 2007 vs. 2006: 2008 vs. 2007: 2009 vs. 2008: 2010 vs. 2009: 2011 vs. 2010: 2012 vs. 2011: 2013 vs. 2012 140,000 +1% -5% -19% -46% -18% -2% +4% +6% Non-Residential Sq.Ft. in 000s 120,000 100,000 80,000 60,000 40,000 20

  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 – May 22, 2014

  21. Slide 21: Manufacturing Activity

    U.S. Manufacturing Activity 65 60 Index (>50=Expansion) 55 50 45 40 Eleven Consecutive Months of Expansion in U.S. Manufacturing 35 30 25 20 Oct Nov Dec Oct Nov Dec Oct Nov Dec Oct Nov Dec Mar Apr Mar Apr Mar Apr Mar Apr Mar Apr Jan May Jun Jul Aug Jan May Jun Jul Aug Jan May Feb Jun Jul Aug Jan May

  22. Slide 22: Positive Manufacturing Outlook

    U.S. Manufacturing Activity Positive Manufacturing Outlook April March Index 2014 2014 Change Direction Rate of Change PMI 54.9 53.7 +1.2 Growing Faster New Orders 55.1 55.1 0.0 Growing Same Production 55.7 55.9 -0.2 Growing Slower Employment 54.7 51.1 +3.6 Growing Faster Inventories 53.0 52.5 +0.5

  23. Slide 23: Eurozone Industrial Production

    Eurozone Industrial Production Early Signs of Improvement Rate of Expansion/Contraction 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% M13 A M J J A S O N D J F - M14 - Y-o-Y M-o-M Financial Community Presentation – May 22, 2014 Source: Eurolast

  24. Slide 24: 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

  25. Slide 25: U.S. Infrastructure Investment

    Protective & Marine Coatings U.S. Infrastructure Investment 30 25 20 Percent Change 15 10 5 0 -5 2011 2012 2013 2014p Utilities Manufacturing Power/Comm. Mining Water/Waste Water Financial Community Presentation – May 22, 2014 Source: IHS Global Insight

  26. Slide 26: Light Vehicle Sales

    Light Vehicle Sales 1,600,000 United States 140,000 Mexico 1,400,000 120,000 1,200,000 100,000 1,000,000 80,000 800,000 60,000 600,000 40,000 400,000 200,000 20,000 -- -- Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 2,500,000 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

  27. Slide 27: Vehicle Miles Driven

    U.S. Vehicle Miles Driven Moving 12-Month Total Vehicle Miles Traveled 3,500,000 3,000,000 Millions of miles 2,500,000 Miles Driven Have Stabilized Since 2009 2,000,000 1,500,000 1,000,000 Jan-85 Jan-90 Jan-08 Jan-86 Jan-87 Jan-88 Jan-89 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99

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