Rpm International Inc. · NYSE:RPM
Rpm International — Investor Presentation (January 2024)
50 slides from Rpm International's investor presentation, Jan 11, 2024
Slide 1: Investor Presentation January 11, 2024
Investor Presentation January 11, 2024
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: RPM At a Glance
RPM At a Glance RPM Products and Services: • Extend asset life • Enable sustainability • Enhance appearances Q U I C K FA C T S DIVIDEND RECORD A world leader in specialty coatings, MANUFACTURING FACILITIES IN 26 COUNTRIES FOUNDED: HEADQUARTERS: STOCK LISTING: 1947 Medina, OH NYSE 50 consecutive yea
Slide 4: Compelling Investment Profile
Compelling Investment Profile DIVERSIFIED MULTIPLE FOCUS ON TRACK RECORD BUILDING A BUSINESS REVENUE MARGIN OF SHAREHOLDER BETTER WORLD MODEL DRIVERS ACHIEVEMENT RETURNS • Strategic balance • Strong organic growth • MAP 2025 initiatives • Sustainability • 50 consecutive years of opportunities, inclu
Slide 5: The Power of RPM: Four Reportable Segments
Operating Groups Drive Growth & Efficiency Through Four Reportable Segments THE POWER Entrepreneurial Approach to Customers with Leading Brands Driving Innovation and Growth Center-Led in Operations and Administration, Driving Efficiency and Continuous Improvement OF RPM Value of 168: Transparency,
Slide 6: Global Sales by Region | Fiscal 2023
Global Sales by Region | Fiscal 2023 EUROPE $1.0 billion – 14% NORTH AMERICA $5.7 billion – 79% AFRICA/MIDDLE EAST/ ASIA/PACIFIC OTHER FOREIGN $174 million – 2% $90 million – 1% LATIN AMERICA $292 million – 4% Investor Presentation | Jan. 11, 2024 6
Slide 7: Strategic Balance: Repair & Maintenance vs. New Construction
Strategic Balance: Repair & Maintenance vs. New Construction* CONSTRUCTION PERFORMANCE PRODUCTS GROUP COATINGS GROUP ~5% 40% ~30% 50% 50% 60% ~65% CONSUMER SPECIALTY GROUP PRODUCTS GROUP 15% 40% 50% 85% Repair & New Specialty Maintenance Construction OEM 10% *Current estimates, which are subject to
Slide 8: Positioned to Benefit from Stimulus Pipeline
Positioned to Benefit from Stimulus Pipeline Significant government stimulus expected to contribute to growth in construction, infrastructure and reshoring projects $1.2 Trillion $390 Billion $2.2 Trillion $1.9 Trillion Infrastructure $53 Billion Inflation CARES Act American Rescue Plan Investment a
Slide 9: Transformational Forces Driving Opportunities
Transformational Forces Driving Opportunities Infrastructure High-Performance Reshoring EV Capital Investments Buildings Investments • High-performance • Engineered flooring • Specified fireproofing • Protective coatings construction products systems • Engineered flooring • Specified fireproofing •
Slide 10: Multiple Solutions to Serve Global Infrastructure Market
Multiple 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 ex
Slide 11: Engineered Solutions to Serve Growing EV and Battery Capital Projects
Engineered Solutions to Serve Growing EV and Battery Capital Projects CPG: High Range Water Reducer PCG: Thermo-Sorb VOC • Reduces water consumption by up to 30% • Up to 3 hours of passive fire protection • Requires less Portland cement • Low outgassing for clean rooms • Fast application CPG: Tuf-St
Slide 12: Examples of Organic Growth Investments
Examples of Organic Growth Investments CARBOLINE END MARKET DIVERSIFICATION CPG ENHANCED BUILDING EFFICIENCY RPM INNOVATION CENTER OF EXCELLENCE Investor Presentation | Jan. 11, 2024 12
Slide 13: Innovative New Products Drive Organic Growth
Innovative New Products Drive Organic Growth Insulated Concrete Forms Construct stronger, highly energy efficient concrete structures capable of withstanding hurricanes. Nudura’s new XR35 form significantly increases insulation performance. Stonres RTZ-2 Seamless urethane floor system that is durabl
Slide 14: Acquisition Program Targets Niche Businesses with Leading Brands
Acquisition Program Targets Niche Businesses with Leading Brands CRITERIA BENEFITS ✓ Successful, niche businesses with ★ Achieve revenue synergies Broadened focus beyond leading brands ★ New channels coatings and sealants to ✓ Above average gross profit margins ★ New geographies adjacent product ✓ 7
Slide 15: MAP 2025 Overview
MAP 2025 Overview GOALS ¹ By May 31, 2025, RPM is targeting improvements to: $8.5B Revenue MAP 2025 is designed to amplify the strengths of 42% Gross Margin RPM’s growth-oriented, entrepreneurial culture, while leveraging the success of the 2020 MAP to Growth initiative to continue transforming RPM
Slide 16: MAP 2025 Focus Areas Built on Prior Successes
MAP 2025 Focus Areas Built on Prior Successes MAP 2020 successes MAP 2025 focus • Implemented MS-168 at over 40 larger facilities • Expand MS-168 to additional facilities Manufacturing • Created center-led manufacturing • Continue to optimize footprint (MS-168) • Purchased Corsicana, TX facility • E
Slide 17: MAP 2025 | $465M in Forecasted Benefits
MAP 2025 | $465M in Forecasted Benefits Wave Plan Annualized Total Annualized $185 M EBIT $465 M EBIT $500 $400 Annualized $160 M EBIT In millions $300 $200 Annualized $120 M EBIT $100 $0 ✓ WAVE 1 WAVE 2 WAVE 3 May 2023 May 2024 May 2025 Manufacturing MS-168 MS-168 expansion, continue to optimize fo
Slide 18: MAP 2025 Financial Goals
MAP 2025 Financial Goals FY22 Target Dollars in millions Improvement CAGR ¹ Actuals FY25 Total Revenue $6,708 +$1,792 $8,500 6.1% Gross Profit $2,433 +$1,137 $3,570 10.0% % margin 36.3% +570 bps 42.0% SG&A $1,788 -$422 $2,210 ² 5.4% % of sales 26.7% +70 bps 26.0% Adjusted EBIT $708 ³ +$652 $1,360 17
Slide 19: Sustainability = Building a Better World
Sustainability = Building a Better World Building a Better World is about engaging associates throughout RPM in our ongoing commitment to create a sustainable future using our values of transparency, trust and respect. These values fuel our continued focus on solutions that grow our business, drive
Slide 20: 2025 Sustainability Goals And Our Progress
2025 Sustainability Goals And Our Progress 2025 SUSTAINABILITY GOALS 2022 PROGRESS Reduce Scope 1 and Scope 2 greenhouse gas Reduced GHG by approximately 16% per ton of (GHG) emissions from our facilities by 20% per production. ton production. Reduce energy consumed in our facilities by 10% Reduced
Slide 21: Delivering Value to Shareholders
Delivering Value to Shareholders Only 41 publicly traded U.S. companies have an equal or better record* $3.3 Billion $2.00 Paid $1.75 $1.50 50 Consecutive $1.25 Years of $1.00 Dividend Increases $0.75 $0.50 $0.25 $0.00 74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '1
Slide 22: RPM Total Return Performance
RPM Total Return Performance Comparison of Cumulative Total Return vs. S&P 500 and a Customized Peer Group RPM OUTPERFORMED: $220 S&P 500 by Peers by 5.7% 17.8% $200 $180 RPM S&P 500 $160 Peer Group $140 $120 $100 $80 5/18 5/19 5/20 5/21 5/22 5/23 Since Start of MAP to Growth Program: FY19 – FY23 Th
Slide 23: Segment Overviews
| I ) Segment Overviews
Slide 24: Construction Products Group
Construction Products Group $2.6 billon Fiscal 2023 Sales Roofing Systems & Sealants Exterior Insulated Finishing Systems Insulated Concrete Forms Expansion Joints & Sealants Engineered Framing Systems Lightweight Insulated Bricks General Contracting (U.S.) General Contracting (Canada) Concrete Admi
Slide 25: Construction Products Group: Target Markets
Construction Products Group Target Markets Bridge Rail Transit 6 sides of the Building + Floor (seamless) + Fire protection Highway Tunnel Water Power + Concrete BUILDING ENVELOPE INFRASTRUCTURE Air | Moisture | Thermal Concrete | Concrete Protection Investor Presentation | Jan. 11, 2024 25
Slide 26: Performance Coatings Group
Performance Coatings Group $1.3 billon Fiscal 2023 Sales COATINGS FLOOR SYSTEMS STRUCTURES PROTECTIVE COATINGS SEAMLESS INDUSTRIAL FLOORING FRP GRATINGS & RAILINGS FIREPROOFING SYSTEMS FLOORS FOR COMMERCIAL OUTDOOR ENVIRONMENTS SPACES Investor Presentation | Jan. 11, 2024 26
Slide 27: Performance Coatings Group: Target Markets
Performance Coatings Group Target Markets • Customer Targets: End Users, Contractors, Architects & Engineers • Solving clients’ largest and most complex problems differentiates our products and services • Installation services encompass 40-50% of demand, complemented by niche technologies and know-h
Slide 28: Consumer Group
Consumer Group $2.5 billon Fiscal 2023 Sales #1 Supplier in the #1 Caulk & Sealant Fastest Growing #1 Primer Brand in #1 Brand of Wall Small Project Paint Supplier in North Supplier of Wood Customer Satisfaction Repair and Spackle Category Worldwide America Finishes in North among Professionals in N
Slide 29: Consumer Group: Target Markets
Consumer Group Target Markets • User Targets: DIY/Makers, Professionals, Industrial • Understanding market needs drives innovation DIY MAKERS PROFESSIONALS INDUSTRIAL Investor Presentation | Jan. 11, 2024 29
Slide 30: Specialty Products Group
Specialty Products Group $0.8 billon Fiscal 2023 Sales #1 Supplier of Daylight A Leading Manufacturer #1 in North America for A Global Market Leader A Leading Manufacturer Fluorescent Colorants of Professional Professional Touch-up in Antifouling and of Superior Edible Worldwide Restoration and and
Slide 31: Specialty Products Group: Target Markets
Specialty Products Group Target Markets Packaging, Safety Equipment, Furniture, Cabinetry, Food, Pharma, Cosmetics Agriculture, Forestry, Lumber Apparel Construction Pleasure Marine, Fuel, Outdoor Restoration & Cleaning OEM Appliance, Auto, Marine Recreation Equipment & Chemicals Investor Presentati
Slide 32: Financial Results
Financial Results mM
Slide 33: Fiscal 2024 Second-Quarter Financial Results | Consolidated
Fiscal 2024 Second-Quarter Financial Results | Consolidated Record Q2 sales and adjusted EBIT ($ in millions, except Q2 Q2 KEY POINTS 2024 2023 % Change per share amounts) • Record Q2 sales with volume growth in CPG & PCG and positive pricing in all segments Sales $1,792 $1,792 Up slightly • Sales i
Slide 34: Construction Products Group Q2 Results
Fiscal 2024 Second-Quarter Financial Results CPG generates record sales and adjusted EBIT Q2 Q2 ($ in millions, except margins) % Change Sales Components CONSTRUCTION 2024 2023 PRODUCTS GROUP Sales $661.8 $612.4 +8.1% Organic +6.1% EBIT1 $99.0 $77.8 +27.1% Acquisitions/ +0.6% Divestitures Adjusted E
Slide 35: Performance Coatings Group Q2 Results
Fiscal 2024 Second-Quarter Financial Results Record Q2 results driven by strong demand for engineered solutions and MAP 2025 benefits PERFORMANCE ($ in millions, except margins) Q2 2024 Q2 2023 % Change Sales Components COATINGS GROUP Sales $374.9 $356.8 +5.1% Organic +5.6% EBIT1 $60.1 $46.4 +29.5%
Slide 36: Specialty Products Group Q2 Results
Fiscal 2024 Second-Quarter Financial Results Challenging market conditions in specialty OEM end markets SPECIALTY ($ in millions, except margins) Q2 2024 Q2 2023 % Change Sales Components PRODUCTS GROUP Sales $177.0 $212.1 -16.6% Organic -14.6% EBIT1 $10.0 $27.4 -63.4% Acquisitions/ -2.7% Divestitur
Slide 37: Consumer Group Q2 Results
Fiscal 2024 Second-Quarter Financial Results Soft DIY demand pressured sales; MAP 2025 drove adjusted EBIT growth Q2 Q2 CONSUMER ($ in millions, except margins) 2024 2023 % Change Sales Components GROUP Sales $578.7 $610.4 -5.2% Organic -5.1% EBIT1 $97.2 $93.9 +3.5% Acquisitions/ 0.0% Divestitures A
Slide 38: Working Capital Management Results in Record Cash Flow from Operations
Working Capital Management Results in All-Time Record Cash Flow from Operations Inventories $1,500 Q2-24 Update $1,400 • Reduced inventories by $286.8 million from Q2-23 $1,300 • Record Q2-24 cash flow from operations +$408.6 million compared to +$167.4 million in Q2-23 In millions $1,200 • 1H-24 ca
Slide 39: Appendix: Reconciliation of Non-GAAP to GAAP Measures
Appendix Reconciliation of Non- GAAP to GAAP Measures
Slide 40: Consolidated Statements of Income: Three Months
Consolidated Statements of Income: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended November 30, 2023 % November 30, 2022 % % Change Net Sales $ 1,792,275 $ 1,791,708 0.0 Cost of Sales 1,044,047 58.3 1,101,317 61.5 Gross Profit 748,228 41.7 690,391 38.5
Slide 41: 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 42: Adjustments Detail
Adjustments Detail a) Charges recorded in Cost of Goods Sold related to inventory write-offs in connection with restructuring activities at our Construction Products, Performance Coatings and Specialty Products segments. b) Reflects restructuring charges, including headcount reductions, impairments,
Slide 43: 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 Earnings per Diluted Share (All amounts presented after-tax): November 30, 2023 November 30, 2022 Reported Earnings per Diluted Share $ 1.13 $
Slide 44: EBIT Reconciliation: RPM Consolidated Three Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended November 30, 2023 November 30, 2022 Net Income $ 145,815 $ 131,542 Provision for Income Taxes 50,009 43,593 Income Before Income Taxes 195,824 175,135 Interest Expense 30,34
Slide 45: EBIT Reconciliation: Construction Products Segment
EBIT** (Non-GAAP Measure): Construction Products Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 98,398 $ 74,038 Add: Interest Expense, Net* 555 3,796 EBIT** (non-GAAP measure) 98,953 77,834 R
Slide 46: EBIT Reconciliation: Performance Coatings Segment
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 61,502 $ 46,709 Add: Interest (Income), Net* (1,425) (332) EBIT** (non-GAAP measure) 60,077 46,3
Slide 47: EBIT Reconciliation: Specialty Products Segment
EBIT** (Non-GAAP Measure): Specialty Products Segment: Three Months ($ in thousands, except percent data) Three Months Ended (Unaudited) November 30, 2023 November 30, 2022 Income Before Income Taxes $ 10,145 $ 27,431 Add: Interest (Income) Expense, Net* (104) 7 EBIT** (non-GAAP measure) 10,041 27,4
Slide 48: EBIT Reconciliation: Consumer Segment
EBIT** (Non-GAAP Measure): Consumer Segment: Three Months ($ in thousands, except percent data) (Unaudited) Three Months Ended November 30, 2023 November 30, 2022 Income Before Income Taxes $ 98,066 $ 93,873 Add: Interest (Income), Net* (869) (1) EBIT** (non-GAAP measure) 97,197 93,872 Restructuring
Slide 49: Adjustments Detail FY23
Adjustments Detail FY23 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) Refle
Slide 50: EBIT Reconciliation: 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
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