Sherwin-williams Company (the) · NYSE:SHW
Sherwin-williams Company (the) — The Sherwin-Williams Company — Investor Day (June 2019)
160 slides from Sherwin-williams Company (the)'s investor day presentation, Jun 5, 2019
Slide 1: Financial Community Presentation
FINANCIAL COMMUNITY PRESENTATION C L E V E L AN D JUNE 5, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements The presentations today will contain certain “forward-looking statements," within the meaning of the federal securities laws, with respect to anticipated future performance (including sales and earnings), expected growth, future business plans and other matters. These stat
Slide 3: Industry Overview
INDUSTRY OVERVIEW JOHN MORIKIS C H A I R MA N & C H I E F E XE C U TI V E O F F I C E R FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 3
Slide 4: Global Paint & Coatings Industry
Global Paint & Coatings Industry Global Mix by Category (Based on $) Mix by Category (Based on $) 2% Special Architectural 6% 39% Purpose Paints Coatings 39% 20% 12% 2% 4% OEM Coatings 7% 41% 17% 11% Total Coatings 2018 ~9.7 Billion Gallons ~130 Billion Dollars Source: KNG Global Research The use of
Slide 5: Paint & Coatings Demand by Region
Paint & Coatings Demand by Region Geographic Split of Global Revenue Europe North America 23% 23% 23% 24% 23% 21% 25% Asia-Pacific 25% 46% 41% South America 4% 52% 43% 6% 3% ROW ~ 4% 3% All Coatings OEM Coatings Architectural Paints Special Purpose Coatings Sources: KNG Global Research The use of KN
Slide 6: Top Global Manufacturers
Top Global Manufacturers Coatings Industry 2018 Global Market All Others Top 10 Suppliers ~55% (>5,000 firms) Masco Source: KNG Global Research The use of KNG information in this presentation is for illustrative FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 6 and consistency purposes only; SHW hav
Slide 7: North America Paint & Coatings Industry
North America Paint & Coatings Industry Sales ($) Mix by Category North America Architectural Paint & Coatings Special Paints Purpose 41% 2018 22% ~1.5 Billion Gallons ~29.9 Billion Dollars OEM Coatings 37% Source: KNG Global Research The use of KNG information in this presentation is for illustrati
Slide 8: U.S. Architectural Coatings
U.S. ARCHITECTURAL COATINGS FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 8
Slide 9: U.S. Paint & Coatings Industry
U.S. Paint & Coatings Industry Architectural Paint Gallons & Square Footage Architectural Paint Gallons Nonresidential & Residential 900 260,000 Square Footage Nonresidential & Residential Sq. Ft in Thousands 850 PRIOR PEAK 250,000 800 Millions of Gallons 240,000 750 700 230,000 650 220,000 600 210,
Slide 10: U.S. Architectural Paints
U.S. Architectural Paints Estimated Breakdown by Segment New Non-Residential Residential 6% Repaint (Pro) (49M Gal) 29% (238M Gal) Non-Residential Repaint 15% New Residential (123M Gal) 12% (98M Gal) DIY 38% (311M Gal) 819 Million Gallons in 2018 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 10 So
Slide 11: U.S. Demographics
U.S. Demographics SILENT BABY BOOMERS GEN X MILLENNIALS iGEN (GEN Z) 1928-1945 1946-1964 1965-1980 (GEN Y) 1997-2012 1981-1996 - Transitioning to Senior Living - Aging in place; driving - Move up creates churn and - Forming households - Will further extend household Facilities remodeling spend drive
Slide 12: Housing Supply Not Keeping Pace
Housing Supply Not Keeping Pace Housing Surplus/ Deficit (LHS) Housing Surplus/Deficit (thousands) & Vacancy Rate (RHS) Housing Surplus/Deficit (thousands) Homeowner Vacancy Rate Cumulative Housing Surplus/Deficit (RHS) 800 0.03 800 4,000 600 600 Cumulative Surplus/Deficit (Thousands) 3,000 0.025 An
Slide 13: Household Growth vs. Completions & Placements
Household Growth vs. Completions & Placements Thousand of Housing Units 2,500 2,000 1,500 1,000 500 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 HVS Household Growth (3-Year Rolling Average) Completions & Placements New construction not keepin
Slide 14: Repaint & Remodel
Repaint & Remodel Leading Indicator of U.S. Remodeling Activity 10% $370 6.9% 6.9% 7.3% 7.3% 7.3% 7.0% 6.9% 6.9% 6.4% 6.3% 6.5% 5.2% $350 $352 5% $345 $339 $353 $330 $336 $330 $323 $310 $316 0% $315 $309 $305 $299 $290 -5% $270 $250 -10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2p Q3p Q4p 2017 2018 2019 4-Quarte
Slide 15: Remodeling Drivers
Remodeling Drivers Existing Home Sales & Monthly Housing Turnover Existing Home Sales Monthly Housing Turnover 30% 8.5% 8.0% 7.5% 20% Tax Credit 7.0% Expiration 10% 6.5% Y/Y % Change 6.0% 0% 5.5% 5.0% -10% 4.5% 4.0% -20% 3.5% 3.0% -30% 2.5% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 16: Remodeling Drivers
Remodeling Drivers Aging Housing Stock Share of Owner-Occupied Housing by Year Structure Built Median Age of Housing Stock 40 39 40 38 37 3% 34 35 16% 35 32 32 31 30 30 30 38% 28 28 27 15% 25 25 25 23 20 13% 15% 15 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Slide 17: Change in U.S. Home Values
Remodeling Drivers Change in U.S. Home Values Index 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 Price appreciation gives homeowners confidence to remodel FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 17 Source: Harvard Joint Center for Housing Studies, 2019, www.jchs.harvard.edu. All rights reserved.
Slide 18: Repaint & Remodel
Repaint & Remodel Baby Boomers Aging in Place Share of Home Improvement Spending (Percent) Age of Homeowners 55 & Over 35-54 Under 35 Older homeowners now account for fully half of improvement spending nationally Source: Harvard Joint Center for Housing Studies, Improving America’s Housing 2019, FIN
Slide 19: Repaint & Remodel
Repaint & Remodel Employment & Consumer Sentiment U.S. Monthly Unemployment Rate Consumer Sentiment Index 12.0% 120 10.0% 110 100 8.0% 90 6.0% 80 4.0% 70 2.0% 60 0.0% 50 1989 1990 1992 1994 1995 1997 1999 2000 2002 2004 2005 2007 2009 2010 2012 2014 2015 2017 2019 1989 1991 1993 1995 1997 1999 2001
Slide 20: Repaint & Remodel
Repaint & Remodel DIY Contractor Shift Will Continue in U.S. & Canada 38% 59% DIY/ Remodeler Paint Contractor 62% 41% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20
Slide 21: Commercial Construction
COMMERCIAL CONSTRUCTION FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 21
Slide 22: Commercial Construction Put in Place
Commercial Construction Put in Place $500 Annual U.S. Commercial Construction Completions ($bn) $450 $400 $350 $300 $250 $200 $150 $100 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Accumulated construction put in place drives maintenance opportunities FIN
Slide 23: Commercial Construction Starts
Commercial Construction Starts Painting is one of the last trades into projects Completions Strong Starts 12-18 Months $450 Commercial Construction Starts ($bn, SA) $400 $350 $300 $250 $200 $150 $100 $50 $- Sep 2016 Dec 2016 Sep 2017 Dec 2017 Sep 2018 Dec 2018 Jun 2016 Mar 2017 Jun 2017 Mar 2018 Jun
Slide 24: Industrial & Special Purpose Coatings
INDUSTRIAL & SPECIAL PURPOSE COATINGS FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 24
Slide 25: Industrial Demand by Region
Industrial Demand by Region Purchasing Managers Index (PMI) - Manufacturing US Manufacturing PMI Brazil Manufacturing PMI Eurozone Manufacturing PMI China Manufacturing PMI ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ‘19 ’06 ’08 ’10 ’12 ’14 ’16 ’18 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09
Slide 26: Industrial Coatings
Industrial Coatings Technology driven, specialty solutions that drive customer throughput and productivity FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 26
Slide 27: Urbanization
Urbanization Urban vs. Rural Global Population, 1950 - 2050 % of Population Living in Urban Areas 100% 2018 2030 2050 88% 89% 7 000 000 84% 81% 82% 80% 6 000 000 74% 72% 68% 68% 5 000 000 66% 59% 60% 55% 4 000 000 50% 3 000 000 43% 2 000 000 40% 1 000 000 0 20% 1955 1960 1965 1970 1975 1980 1985 199
Slide 28: Global Infrastructure Spending
Global Infrastructure Spending Infrastructure Investment Gap by Region, 2016-2040 Extent to which estimated investment need is greater than investment expected under current trends 60% 50% 47% 39% 40% 30% 19% 20% 16% 10% 10% 10% 0% AMERICAS AFRICA EUROPE OCEANIA ASIA WORLD Significant global backlog
Slide 29: Oil & Gas Infrastructure
Oil & Gas Infrastructure Capital Expenditures (In billions of dollars) Shell Exxon Occidental -18% -20% -40% 31.7 -15% +11% -39% -6% 33.0 +27% 8.9 26.1 22.1 23.0 26.5 -49% +39% 20.8 -5% +33% 19.6 5.3 5.0 16.2 15.4 3.6 2.7 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 -17
Slide 30: Global Beverage Cans
Global Beverage Cans EMEAI Beverage Cans Market Size 72.8 Billion Units* NAR Beverage Cans Market Growth 3% CAGR** Market Size 93.5 Billion Units* Market Growth -1% CAGR** APR Beverage Cans Market Size 120.0 Billion Units* Market Growth 4% CAGR** LAR Beverage Cans Market Size 39.3 Billion Units* Mar
Slide 31: Auto Refinish Demand
Auto Refinish Demand 3,300 3,250 3,200 U.S. Monthly Miles Driven (thousands) 3,150 3,100 3,050 3,000 2,950 2,900 2,850 2,800 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Miles driven continues to increase steadily, driving demand for automotive refinish FINANCIAL COMMUNITY PRESENTATION – JUNE 5
Slide 32: Company Overview
COMPANY OVERVIEW D AV I D S E W E L L PRESIDENT & C H I E F O P E R A TI N G O F F I C E R FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 1
Slide 33: Overview
OVERVIEW GLOBAL FOOTPRINT 2018 REVENUES $17.5 billion The Americas Group Consumer Brands Group Performance Coatings Group Corporate headquarters 60,000+ EMPLOYEES 120+ ~4,700 COUNTRIES STORES FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 2
Slide 34: Reportable Segments
Reportable Segments 55% 16% 29% of FY18 Sales of FY18 Sales of FY18 Sales The Americas Group Consumer Brands Group Performance Coatings Group Global Supply Chain FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 3
Slide 35: Introductions
Introductions… Al Mistysyn Pete Ippolito Rob Lynch Aaron Erter Joel Baxter Chief Financial President, President, President, President & GM, Officer The Americas Consumer Brands Performance Coatings Global Supply Group Group Group Chain FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 4
Slide 36: Core Commitment
CORE COMMITMENT Finding Solutions For Our Customers FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 5
Slide 37: Uniquely Positioned to Deliver Customer Value
UNIQUELY POSITIONED TO DELIVER CUSTOMER VALUE IMPROVING SOLUTION INDUSTRY DIFFERENTIATED CUSTOMER DRIVEN LEADING PRODUCT PRODUCTIVITY SERVICE INNOVATION DISTRIBUTION Providing Unique and Differentiated Solutions for Our Customers FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 6
Slide 38: Improving Customer Productivity
Core Commitment to Providing Customer Solutions IMPROVING CUSTOMER Relentless Customer Focus Through: PRODUCTIVITY • Identifying Unmet Customer Needs • Partnerships • Listening to Customer Insights • Improving Customers Profitability IMPROVING CUSTOMER SOLUTION DRIVEN INDUSTRY DIFFERENTIATED PRODUCT
Slide 39: Solution Driven Service
Core Commitment to Providing Customer Solutions SOLUTION DRIVEN Responsiveness, Agility & Speed SERVICE • Local Stores & Reps • Field & Tech Support • Targeted Training • Customization • Flexible Service Model IMPROVING CUSTOMER SOLUTION DRIVEN INDUSTRY DIFFERENTIATED PRODUCTIVITY SERVICE LEADING IN
Slide 40: Industry Leading Innovation
Core Commitment to Providing Customer Solutions INDUSTRY Innovative Industry Technologies LEADING INNOVATION • Industry Knowledge & Expertise • Leveraging Best Practices • Innovative Technologies & Platforms • Game Changing Solutions • Sustainability IMPROVING CUSTOMER SOLUTION DRIVEN INDUSTRY DIFFE
Slide 41: Differentiated Product Distribution
Core Commitment to Providing Customer Solutions DIFFERENTIATED PRODUCT DISTRIBUTION Global Scale with Local Support • Direct Relationship with Customer & End User • Controlled Distribution & Transportation • Effective & Efficient Delivery Capabilities • End-to-End Global Supply Chain IMPROVING CUSTO
Slide 42: Driving Shareholder Value
Driving Shareholder Value DRIVE DRIVE DRIVE CASH DRIVE GROWTH ROS GENERATION RONAE • U.S. Paint Stores Growth • Volume Growth • Earnings Growth • Asset Utilization 1.5x – 2x the Market • PCG/CBG Profit • Working Capital • Working Capital • PCG/CBG Customer Improvement Management Solutions • Consiste
Slide 43: Our Mission & Guiding Values
Our Mission & Guiding Values It is the Mission of The Sherwin-Williams Company to be the Supplier of the Highest Value Coatings Solutions in the World by Developing and Acquiring the Appropriate Resources to Continuously Improve the Performance of our Products, Services and People. INTEGRITY PEOPLE
Slide 44: Innovation & Sustainability
Innovation & Sustainability The Employer PROVIDING A SAFE & INCLUSIVE WORK ENVIRONMENT The Citizen MAKING A DIFFERENCE IN OUR COMMUNITIES The Steward GROWING OUR BUSINESS WITH CARE FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 13
Slide 45: Financial Overview
FINANCIAL OVERVIEW AL M I S T Y S Y N SENIOR VICE PRESIDENT - FINANCE & CHIEF FINANCIAL OFFICER FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 1
Slide 46: Forward-Looking Statements
Forward-Looking Statements The presentations today will contain certain “forward-looking statements," within the meaning of the federal securities laws, with respect to anticipated future performance (including sales and earnings), expected growth, future business plans and other matters. These stat
Slide 47: Consolidated Sales
Consolidated Sales In Millions of Dollars $17,534 $14,984 $11,856 $11,130 $11,339 2014 2015 2016 2017 2018 Expect 4% to 6% Sales CAGR Through FY20 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 3 Refer to Financial Appendix 1: Income Statement
Slide 48: Consolidated Gross Profit
Consolidated Gross Profit Excluding Acquisition Related & One-Time Costs Adjusted Gross Profit Adjusted Gross Margin Proforma Gross Margin $7,513 $ In Millions $6,886 $5,925 $5,559 $5,164 50.0% 49.0% 46.4% 46.0% 42.8% 45.9% 44.4% 44.6% 41.7% 2014 2015 2016 2017 2018 Expect Long Term Gross Margin Ran
Slide 49: SG&A Expense
SG&A Expense Excluding Acquisition Related & One-Time Costs Adjusted SG&A $4,969 Adjusted SG&A % to Sales $4,694 Proforma SG&A % to Sales $ In Millions $4,102 $3,823 $3,914 34.3% 34.5% 34.6% 31.3% 29.6% 30.1% 31.1% 29.9% 28.3% 2014 2015 2016 2017 2018 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 50: Operating Income
Operating Income Excluding Acquisition Related & One-Time Costs Adjusted Operating Income Adjusted Operating % to Sales $2,544 Proforma Operating % to Sales $ In Millions $2,191 $1,824 $1,647 $1,342 14.5% 15.4% 14.6% 12.1% 14.8% 14.6% 14.5% 14.3% 12.1% 2014 2015 2016 2017 2018 FINANCIAL COMMUNITY PR
Slide 51: Profit Before & After Tax
Profit Before & After Tax Excluding Acquisition Related & One-Time Costs & Tax Reform Adjusted Profit Before Tax Adjusted Profit After Tax Continuing Operations $2,185 $ In Millions $1,957 $1,729 $1,760 $1,549 $1,430 $1,258 $1,214 $1,054 $866 2014 2015 2016 2017 2018 PBT % to Sales 11.3% 13.7% 14.6%
Slide 52: Earnings Before Interest, Taxes, Depreciation & Amortization
Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) Excluding Acquisition Related & One-Time Costs % to Sales Adjusted EBITDA $2,821 $ In Millions $2,456 $2,007 $1,809 $1,521 16.0% 16.9% 16.4% 16.1% 13.7% 2014 2015 2016 2017 2018 Medium Term Target EBITDA as a % to Sales of 18.8% t
Slide 53: First Quarter 2019 Highlights
First Quarter 2019 Highlights 1Q18 1Q19 % Chg. External Sales $3.97B $4.04B +1.9% US/Canada SSS +5.2% +3.6% Consolidated EPS, Excluding Acquisition $3.57 $3.60 +0.8% Related & One-Time Costs EBITDA, Excluding Acquisition $582M $575M -1.2% Related & One-Time Costs FINANCIAL COMMUNITY PRESENTATION – J
Slide 54: 2019 Adjusted EPS Guidance Reconciliation
2019 Adjusted EPS Guidance Reconciliation Full Year EPS 2019 FULL YEAR GUIDANCE MID-POINT • Reaffirmed FY19 Adjusted EPS Guidance of Diluted Net Income per Share $17.43 $20.40 to $21.40 per Share, Excluding Acquisition Related Costs & Pension Plan Pension Plan Settlement Expense $0.27 Settlement Exp
Slide 55: Consolidated Run Rate Synergies
Consolidated Run Rate Synergies Synergies Allocations ($415M) …Run Rate Synergies Expected To Be Realized Revenue Synergies 6% SG&A 43% $415M $380M $230M Raw Material 37% Manufacturing/ 2017 2018 Long-Term Distribution/R&D Annual Synergy 14% COGS Target • 2018 P&L synergies of $180M • Expect to incu
Slide 56: Working Capital Performance
Working Capital Performance Accounts Receivable + Inventory – Payables % to Sales Working Capital $ In Millions $2,439 $2,055 $2,035 $2,294 $1,971 $1,139 13.6% 13.8% $975 12.5% 12.4% 11.6% 10.2% 8.6% 2014 2015 2016* 2017** 2018 1Q18 1Q19 Target FY Working Capital as a % to Sales of 11% to 11.5% *PRO
Slide 57: Cash Flow Performance, as Reported
Cash Flow Performance, as Reported In Millions of Dollars Net Operating Cash Net Operating Less Cap. Ex. (FCF) $1,944 $1,884 $1,661 $1,693 Uses of Cash $1,447 $1,309 • Capital Expenditures $1,213 • Pay Dividends $1,082 $1,070 • Manage Debt $881 • Acquisitions • Buy Back Stock 2014 2015 2016 2017 201
Slide 58: Net Operating Cash Less CapEx, as Reported
Net Operating Cash Less CapEx, as Reported In Millions of Dollars 2,000 1,500 1,000 500 0 (500) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 2015 (97) 359 483 469 1,213 2016 (132) 528 398 276 1,070 2017 190 312 613 546 1,661 2018 (2) 479 788 428 1,693 2019 (87) FINANCIAL COMMUNITY PRESENTATION – JUNE 5
Slide 59: Debt to EBITDA Ratio
Debt to EBITDA Ratio Excluding Acquisition Related & One-Time Costs Debt Debt to EBITDA Adjusted EBITDA $ In Millions $11,755 $10,521 $9,831 $9,344 4.5 4.3 3.3 3.5 2.8 $2,617 $2,821 $2,815 $2,456 @ Close - 6/1/2017 2017 2018 Q1 2019 2019F Targeting Long Term Debt to EBITDA Ratio of 2.0X to 2.5X FINA
Slide 60: Maturities of Long-Term Debt
Maturities of Long-Term Debt (as of December 31, 2018) SHW Acquisition - LT Debt VAL $ In Millions $1,650 $1,619 $1,500 $1,250 $1,250 $1,500 $650 $650 $500 $250 $250 $350 $300 $300 $300 $400 $400 $400 $119 $4 2018 2019 2020 2021 2022 … 2024 2025 2026 2027 … 2042 2045 2047 … 2097 Committed to Reducin
Slide 61: Consistent Capital Allocation Philosophy
Consistent Capital Allocation Philosophy Consistent Capital Allocation Philosophy WE WILL NOT HOLD CASH • Return Dividend to 30% of PY Earnings BALANCED CAPITAL KEY OBJECTIVES – FY19 Increased 31.4% ALLOCATION GOALS • BBB+ Target CAPEX Invest • Reduce Debt to EBITDA Leverage To Rating Below 3.0x - F
Slide 62: Rating Agencies
Rating Agencies Standard & Poor’s Rating Services May 2017 • Long-Term Rating at ‘BBB’ • Short-Term Rating at ‘A-2’ • Credit Watch Stable Moody’s Investors Services February 2019 • Long-Term Rating at ‘Baa3’ • Short-Term Rating at ‘P-3’ • Credit Watch Stable Fitch Ratings May 2017 • Long-Term Rating
Slide 63: Consolidated Net Operating Cash & Uses of Cash
Consolidated Net Operating Cash & Uses of Cash 5-Year Net Operating Cash: ~$7.7B 2014-2018 CASH DIVIDENDS USES OF CASH $2.4 DEBT REPAYMENT $3.1 • Capital Expenditures • Pay Dividends CAPITAL EXPENDITURES • Manage Debt • Acquisitions TREASURY STOCK PURCHASE • Buy Back Stock $1.1 $1.4 FINANCIAL COMMUN
Slide 64: Dividends Per Share
Dividends Per Share 2005 - 2019 +31.4% 2018 was 40th Consecutive Year of Dividend Increases $4.52* $3.36 $3.40 $3.44 $2.68 $2.20 $2.00 $1.46 $1.56 $1.40 $1.42 $1.44 $1.26 $1.00 $0.82 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Dividend Returned to 30% of Prior Year Ear
Slide 65: Treasury Stock Acquired
Treasury Stock Acquired 2010 - 1Q 2019 (000s) Average Price Avg. Shares Shares Per Share Total Dollars Outstanding 2010 5,000 $75.14 $375,700 108,786 2011 4,700 $78.16 $367,372 105,672 2012 4,600 $121.25 $557,766 103,930 2013 4,300 $178.90 $769,271 103,049 2014 6,925 $220.66 $1,528,074 98,741 2015 3
Slide 66: Summary Capitalization
Summary Capitalization Strong Financial Profile Provides Flexibility 1Q19 . • Liquidity Sources Increase $1.15B in 2018 Cash $0.09B • $2.7B Available at 3/31/19 Debt $9.8B • Expect to Maintain Balance Sheet Flexibility to Pursue Growth Opportunities Revolving Credit Facility $2.0B • Annual Cash Gene
Slide 67: FY20 Financial Target Update
FY20 Financial Target Update ORIGINAL FY20 TARGET UPDATE FY16 FY17 FY18 FY19 • Reaffirming Financial Targets PRO PRO ACTUAL GUIDANCE FY20 TARGETS FORMA FORMA • Timing Revised 4%-6% • Price Increases Implemented to Offset Net Sales $15.8B $16.6B $17.5B 4%-7% CAGR Growth Significant Raw Material Cost
Slide 68: A Strong Foundation
A STRONG FOUNDATION • Track Record of Financial Performance & Focused Execution • Large, Stable Revenue Base with Improving EBITDA Margins • Strong Balance Sheet & Getting Stronger • SHW Experienced & Determined Management Team …ON WHICH WE WILL CONTINUE TO BUILD • Grow Revenue Organically & through
Slide 69: Financial Appendix
g é §) SHERWIN-WILLIAMS. FINANCIAL APPENDIX
Slide 70: Appendix 1: Income Statement
Appendix 1: Income Statement (In Millions of Dollars) Excluding Acquisition Related Costs, Reconciliation to As Reported FY17 FY17 FY18 FY17 ACQUISTION EXCLUDING FY18 FY18 FY18 EXCLUDING ACQ AS ACQUISTION AS ONE TIME ACQUISITION RELATED COSTS REL & ONE TIME REPORTED (1) RELATED COSTS REPORTED COSTS
Slide 71: Appendix 2A: FY EBITDA
Appendix 2A: FY EBITDA (In Millions of Dollars) Excluding Acquisition Related Costs, Reconciliation to As Reported FY17 FY17 FY17 FY18 FY18 FY18 FY18 AS ACQUISITION EXCLUDING AS ONE TIME ACQUISITION EXCLUDING ACQ REPORTED RELATED ACQUISTION REPORTED COSTS RELATED COSTS REL & ONE TIME COSTS RELATED C
Slide 72: Appendix 2B: 1Q EBITDA
Appendix 2B: 1Q EBITDA (In Millions of Dollars) Excluding Acquisition Related Costs, Reconciliation to As Reported 1Q18 1Q18 1Q18 1Q18 1Q19 1Q19 1Q19 1Q19 AS REPORTED ONE TIME ACQUISTION EXCLUDING AS REPORTED ONE TIME ACQUISTION EXCLUDING COSTS RELATED ACQ REL & COSTS RELATED ACQUISTION ONE TIME REL
Slide 73: Appendix 3: 1Q Highlights
Appendix 3: 1Q Highlights (In Millions of Dollars) Regulation G Reconciliation 1Q18 1Q19 2018 2019 GUIDANCE ACTUAL ACTUAL ACTUAL LOW HIGH Diluted net income per common share $2.62 $2.62 $11.67 $16.93 $17.93 California litigation expense $1.09 Environmental expense provision $1.32 Pension plan settle
Slide 74: Appendix 4: 2017 Pro Forma
Appendix 4: 2017 PRO FORMA (In Millions of Dollars) FY17 FY17 FY17 FY17 FY17 AS ACQUISITION EXCLUDING PRO FORMA PRO FORMA REPORTED (1) RELATED COSTS ACQUISTION ADJUSTMENTS & TAX REFORM RELATED COSTS (2) BENEFITS (1) NET SALES $14,984 $14,984 $1,651 $16,635 INCOME BEFORE INCOME TAXES $1,469 ($488) $1
Slide 75: Appendix 5: Group Financials
Appendix 5: Group Financials (In Millions of Dollars) Excluding Acquisition Related Costs, Reconciliation to As Reported FY17 FY17 FY17 FY17 FY18 FY18 FY18 AS VAL PRO ACQUISITION PRO FORMA AS ACQUISITION PRO FORMA REPORTED FORMA RELATED REPORTED RELATED COSTS COSTS PCG Sales $3,706 $1,102 $4,808 $5,
Slide 76: The Americas Group
THE AMERICAS GROUP PETE IPPOLITO P R E S I D E N T, TH E A ME R I C A S G R O U P FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 1
Slide 77: The Americas Group Financial Highlights
The Americas Group Financial Highlights FY17 FY18 % Chg. Net Sales $9,117 $9,625 +5.6% Segment Profit $1,770 $1,898 +7.3% % Sales 19.4% 19.7% +0.3pts. 1Q18 1Q19 % Chg. Net Sales $2,080 $2,155 +3.6% Segment Profit $337 $331 -1.9% % Sales 16.2% 15.4% -0.8pts. FINANCIAL COMMUNITY PRESENTATION – JUNE 5,
Slide 78: Product Finishes
Customer Segments We Serve COMMERCIAL PRODUCT FINISHES FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 3
Slide 79: Customer Segments We Serve
STORES OUR & REPS SOLUTIONS MY SW.COM STORES & REPS DATA MY NEWSW.COM PRODUCTS COLOR DATA commercial COMMERCIAL new residential property management NEW TALENT PRODUCTS SERVICES res repaint architect & designer protective & marine product NAT’L finishes ACCOUNTS BRAND COLOR NATIONAL PRODUCT FINISHES
Slide 80: Stores & Reps
Stores & Reps North America North America 4,370 Stores 747 3,008 Reps Latin America Latin America Latin America 351 Stores Dealers 555 Reps 4,721 TOTAL 3,563 TOTAL FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 5
Slide 81: Sales Calls a Year
SALES CALLS A YEAR SALES CALLS A DAY FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 6
Slide 82: My SW.COM
My SW.COM FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 7
Slide 83: Data
Data SEAMLESS EXPERIENCE ACTIONABLE INFORMATION PERSONALIZED COMMUNICATION FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 8
Slide 84: New Products
NEW PRODUCTS NEW PRODUCTS 2018 NEW 25 North America Products 2018 NEW 30 Latin America Products FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 9 9
Slide 85: New Products: DIY
New Products DIY FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 10
Slide 86: New Products: New Residential
New Products NEW RESIDENTIAL FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 11
Slide 87: New Products: Commercial
New Products COMMERCIAL FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 12
Slide 88: New Products: Res Repaint
New Products RES REPAINT FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 13
Slide 89: New Products
NEW PRODUCTS NEW PRODUCTS 2018 NEW 25 North America Products 2018 NEW 30 Latin America Products FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 14 14
Slide 90: SKU Rationalization
New Products SKU RATIONALIZATION 2014 2015 2016 2017 2018 Latin America North America FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 15
Slide 91: National Accounts
National Accounts MULTI FAMILY NEW RESIDENTIAL RETAIL FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 16
Slide 92: Color
Color + APP FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 17
Slide 93: Talent
Talent Outside Sales Representatives Asa SalesRep, you represent our company’scommitment to professionalism, and that means 1,295 neat, clean and pressed clothing isessential. Tops MTP’S Bottoms Hired in 2018 Sherwin-Williams St yle Guide Lookbook – For Internal Use Only FINANC
Slide 94: Talent
Talent MT PETE IPPOLITO 33 President YRS The Americas Group 19 29 33 13 27 26 YRS YRS YRS YRS YRS YRS MARK RICH TODD ALBERTO TODD JONATHAN PROVENSON GILMORE WIPF BENAVIDEZ STEPHENSON REID President President President President President President Eastern Division Canada Division Southeast Division
Slide 95: Stores Salute Video
The Americas Group Stores Salute Video FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 20
Slide 96: Services
Services 3,000+ TRUCKS 2,300+ DRIVERS FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 21
Slide 97: Deliveries a Year
DELIVERIES A YEAR DELIVERIES A DAY FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 22
Slide 98: Services: Painter Training Program
Services HOME WORK PAINTER TRAINING PROGRAM FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 23
Slide 99: Services
Services New Res Repaint Residential Customized Upgrades Custodian Homeowner Sell Sheets Guide Portal FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 24
Slide 100: Brand
Brand FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 25
Slide 101: Sizzle Video
The Americas Group Sizzle Video FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 26
Slide 102: FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 27
Slide 103: Product Finishes
STORES OUR & REPS SOLUTIONS MY SW.COM STORES & REPS DATA MY NEWSW.COM PRODUCTS COLOR DATA commercial COMMERCIAL new residential property management NEW TALENT PRODUCTS SERVICES res repaint architect & designer protective & marine product NAT’L finishes ACCOUNTS BRAND COLOR NATIONAL PRODUCT FINISHES
Slide 104: Paint Brand Awareness
# PAINT BRAND SW 6871 Positive Red AWARENESS 2018 MarketVision Research FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 29
Slide 105: Preferred Brand by Professional Painters
# PREFERRED BRAND BY SW 6520 PROFESSIONAL Honest Blue PAINTERS 2018 MarketVision Research FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 30
Slide 106: Net Promoter Score
RECOGNITION SW 6840 NET Exuberant Pink PROMOTER SCORE 2018 Medallia FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 31
Slide 107: In Customer Satisfaction
# IN CUSTOMER SATISFACTION INTERIOR PAINTS AND PAINT SW 6811 RETAILERS” Honorable Blue 2019 J.D. Power **Tie for First Place among Interior Paints in the J.D. Power 2019 Paint Satisfaction Study. For J.D. Power 2019 award information, visit jdpower.com/awards FINANCIAL COMMUNITY PRESENTATION – JUNE
Slide 108: Success By Design
Success By Design FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 33
Slide 109: Consumer Brands Group
CONSUMER BRANDS GROUP ROB LYNCH P R E S I D E N T, C O N S U ME R B R A N D S G R O U P FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 1
Slide 110: CBG Video
Consumer Brands Group CBG Video FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 2
Slide 111: What is the Consumer Brands Group?
What is the Consumer Brands Group? Industry Leading Brands Strategic Retail Partners FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 3
Slide 112: Consumer Brands Group Financial Highlights
Consumer Brands Group Financial Highlights Pro forma Results FY17 FY18 % Chg. Net Sales $2,701 $2,739 +1.4% Segment Profit $394 $372 -5.5% % Sales 14.6% 13.6% -1.0pts. 1Q18* 1Q19* % Chg. Net Sales $656 $655 -0.3% Segment Profit $106 $111 +4.5% % Sales 16.2% 16.9% +0.7pts. *EXCLUDING ACQUISTION RELAT
Slide 113: Integration Successfully Complete
Integration Successfully Complete Integration Highlights Optimizing our brand Strengthening strategic Creating a best in class portfolio partnerships organization Simplification. Execution. Capabilities. FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 5
Slide 114: Talented Leadership Team
Consumer Brands Group Talented Leadership Team Rob Lynch President, Consumer Brands Group 38 Years of Experience Heidi Petz Richard Meagher Tom Liebhardt Daniel Scalabrino Brian Padden President & GM, Retail NA President & GM, ANZ SVP, Marketing SVP, Controller VP & GM, Sales - Europe 22 Years of Ex
Slide 115: Business Overview
Consumer Brands Group Business Overview Value Proposition Sherwin-Williams Consumer Brands Group provides our strategic channel partners access to a portfolio of industry-leading brands, supported by best-in-class, high-touch service. Consumer Focused Customer Driven FINANCIAL COMMUNITY PRESENTATION
Slide 116: Consumer Focused & Customer Driven
Consumer Brands Group Consumer Focused & Customer Driven Consumer Insights The Right Brands The Right Segments The Right Solutions FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 8
Slide 117: Consumer Focused & Customer Driven
Consumer Brands Group Consumer Focused & Customer Driven Custom Retail Solutions The Right Support The Right Practices The Right Brands FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 9
Slide 118: Our Solutions
Consumer Brands Group Consumer Focused & Customer Driven OUR SOLUTIONS • Strong Portfolio of Hero Brands • Associate Training & Field Support • Superior Category Management • Digital Leadership • Best-in-class In-store Experience FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 10
Slide 119: Strong Portfolio of Hero Brands
Consumer Brands Group Strong Portfolio of Hero Brands Product Over 10,000 points of Focused on #1 Selling #1 Applicator A Trusted Name Trusted by Pros for Distribution “Design it Interior Wood Brand Preferred in Spray Paint Over 100 Years Yourselfers” Stain* by Pros** #2 Market Share A Recognized Le
Slide 120: Associate Training & Field Support
Consumer Brands Group Associate Training & Field Support ASSOCIATE TRAINING & FIELD SUPPORT OPPORTUNITIES Enhance Vendor Color Expert Premium Improve Draw In-Store Event Service Focused Training Brands Focus / Close Rates Execution Models Training Program Consumer Focused Customer Driven FINANCIAL C
Slide 121: Superior Category Management
Consumer Brands Group Superior Category Management SUPERIOR CATEGORY MANAGEMENT OPPORTUNITIES Store Level and Multi-Brand Inventory Multi-Brand Promotional Regional Cross- Optimization Cross-Promotions Enhancement Optimization Merchandising Consumer Focused Customer Driven FINANCIAL COMMUNITY PRESEN
Slide 122: Digital Leadership
Consumer Brands Group Digital Leadership Consumer Focused Customer Driven FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 14
Slide 123: Best-in-Class In-Store Experience
Consumer Brands Group Best-in-Class In-Store Experience BEST-IN-CLASS IN-STORE EXPERIENCE OPPORTUNITIES Consumer Tools Simplify Color Clear Focus on All Along Purchase In-Aisle Selling Tools Decisions Premium Funnel Consumer Focused Customer Driven FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 15
Slide 124: Consumer Focused & Customer Driven
Consumer Brands Group Consumer Focused & Customer Driven OUR SOLUTIONS • Strong Portfolio of Hero Brands • Associate Training & Field Support • Superior Category Management • Digital Leadership • Best-in-class In-store Experience Simplification. Execution. Capabilities. FINANCIAL COMMUNITY PRESENTAT
Slide 125: Performance Coatings Group
PERFORMANCE COATINGS GROUP AAR O N E R T E R P R E S I D E N T & G E N E R A L MA N A G E R , P E R F O R MA N C E C O A TI N G S G R O U P FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 1
Slide 126: Performance Coatings Group Financial Highlights
Performance Coatings Group Financial Highlights Pro forma Results FY17 FY18 % Chg. Net Sales $4,808 $5,166 +7.5% Segment Profit $653 $668 +2.3% % Sales 13.6% 12.9% -0.7pts. 1Q18* 1Q19* % Chg. Net Sales $1,228 $1,231 +0.2% Segment Profit $148 $153 +3.1% % Sales 12.1% 12.4% +0.3pts. *EXCLUDING ACQUIST
Slide 127: Customer Focus & Centricity
Performance Coatings Group Customer Focus & Centricity Providing Customer Solutions The Right Industrial Segments Local Service Model Global Expertise FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 3
Slide 128: The Right Industrial Segments
Performance Coatings Group The Right Industrial Segments PROTECTIVE COIL AUTOMOTIVE GENERAL INDUSTRIAL PACKAGING & MARINE COATINGS INDUSTRIAL WOOD Provide solutions that customers use to differentiate in their industries FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 4
Slide 129: Local Service Model
Performance Coatings Group Local Service Model BRANCHES TECH SUPPORT VENDOR MANAGED E-BUSINESS DROP-SHIP INVENTORY Provide a local service model that makes it easy to do business FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 5
Slide 130: Global Expertise
Performance Coatings Group Global Expertise APPLICATION SPECS CERTIFICATIONS INNOVATION 120 CENTERS COUNTRIES Provide global expertise that helps our customers make smarter decisions FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 6
Slide 131: Addressing Customer Challenges
Performance Coatings Group Addressing Customer Challenges Identifying Customer Challenges Product Performance Color Sustainability Flexible Service Model FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 7
Slide 132: Product Performance Solutions
Performance Coatings Group Product Performance Solutions Customers need durability that gives them… PERFORMANCE PROTECTION PEACE OF MIND FIRETEX FX 6002 CARC DURAPLATE 6000 120 MINUTES OF FIRE PROTECTION CHEMICAL-AGENT RESISTANCE IMMERSION-READY IN A SINGLE COAT ZERO INFRARED SIGNATURE FINANCIAL COM
Slide 133: Color Solutions
Performance Coatings Group Color Solutions Customers need color that is… CONSISTENT FAST FORWARD-LOOKING AUTOMOTIVE: COIL COLOR SAMPLES: MARKET & FAST, ACCURATE COLOR MATCHES 15K ARCHITECT MATCHES DESIGN TRENDS: DESIGNHOUSE FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 9
Slide 134: DesignHouse Video
Performance Coatings Group DesignHouse Video FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 10
Slide 135: Sustainability Solutions
Performance Coatings Group Sustainability Solutions Customers need an industrial coating that can… MEET SPECS ADDRESS END-USERS PERFORM FLUROPON: LEED V4 VALPURE V70 ULTRA 9K CERTIFICATION FOR ARCHITECTS VALPURE V70 – STAYING AHEAD FASTER CYCLE TIME IN A OF NON-BPA CONSUMER TREND WATERBASED SYSTEM F
Slide 136: Flexible Service Model Solutions
Performance Coatings Group Flexible Service Model Solutions Customers need a coatings provider who is… NEARBY RESPONSIVE COMPREHENSIVE VALSPAR PRODUCTS COLOR EXPRESS AUTOMOTIVE BUSINESS SMALL-BATCH THRU FACILITIES TINTABLE SOLUTIONS CONSULTING & TRAINING FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 20
Slide 137: Differentiated Solutions
Performance Coatings Group Differentiated Solutions OUR SOLUTIONS • Innovative Products & Technologies • Local Service Model • Global Expertise FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 13
Slide 138: Divisional Leadership
Performance Coatings Group Divisional Leadership Bruce Irussi Justin Binns Karl Jorgenrud General Industrial Automotive Protective & Marine 35 years experience 22 years experience 25 years experience Deep Coatings Industry Experience Sam Shoemaker Mike Bourdeau Colin Davie Packaging Coil Coatings In
Slide 139: Employee Video
Performance Coatings Group Employee Video FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019 15
Slide 140: Global Supply Chain
GLOBAL SUPPLY CHAIN J O E L B AX T E R P R E S I D E N T & G E N E R A L MA N A G E R , GLOBAL SUPPLY CHAIN 1 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 141: Global Footprint
Global Footprint RUSSIA CANADA UNITED STATES CHINA INDIA BRAZIL AUSTRALIA SOUTH AFRICA 2 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 142: One Focused Organization
Global Supply Chain One Focused Organization Share Best Practices Worldwide End-to-End Supply Chain 3 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 143: End-to-End Supply Chain
End-to-End Supply Chain Drive Continuous Improvement Research & Global Supply Chain Development Procurement Management Manufacturing Distribution Transportation Customer 4 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 144: Accelerating Operational Excellence
Accelerating Operational Excellence One Continuous Improvement Culture Leveraging Best Practices Sustainable Results OPERATIONAL EXCELLENCE FOCUS AREAS SAFETY QUALITY SERVICE COST PEOPLE 5 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 145: Global Business Management System
Global Business Management System Management Continuous Accelerated Time Review Improvement Root Cause Management End-to-End Supply Chain PEOPLE SYSTEMS TOOLS PROCESSES 6 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 146: What This Accomplishes
What This Accomplishes Drives Customer Solutions Cost Reduction Accelerated Growth 7 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 147: Focus Areas
Focus Areas Operational Excellence Global Procurement Innovation Excellence 8 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 148: Safety
Safety Recordable Case Rate 2018 9 Source: The North American Industry Classification System (NAICS) FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 149: Net Fixed Assets
Net Fixed Assets Value in Dollars 2017 2018 10 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 150: Working Capital % to Sale
Working Capital % to Sale Maintain Negative Working Capital 2016 2017 2018 11 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 151: Rationalization Opportunities
Rationalization Opportunities RUSSIA CANADA UNITED STATES CHINA INDIA BRAZIL AUSTRALIA SOUTH AFRICA 12 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 152: Operational Excellence Savings
Operational Excellence Savings 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 13 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 153: Controlled Transportation
NORTH AMERICA Controlled Transportation 7 Day Operations Inbound Raw Materials Unattended Deliveries Internal Tank wagon Deliveries Temperature Controlled Equipment Consistent On Time Service 14 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 154: Typical Coatings Product
Typical Coatings Product 2019 est. vs. 2018 Industry * Resins/Latex (43%) -1 to 3% Acrylic (Latex Paints) Alkyd (Oil Paints) Epoxy (Epoxy Paints) Pigments (27%) 0 to 1.5% Titanium Dioxide Pigments Paint Fillers Extenders Containers (13%) 3 to 4% Metal or Plastic Additives (9%) 1 to 3% Solvents (8%)
Slide 155: Global Procurement Benefits
Global Procurement Benefits Raw Material Efficiencies Internal Development 16 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 156: Raw Material Efficiency
Raw Material Efficiency INCREMENTAL NEXT GENERATION EFFICIENCY DESIGNED DISRUPTION BREAKTHROUGH BREAKTHROUGH 17 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 157: Resin/Latex
Resin/Latex Dual Sourcing Strategy – Internal vs. External • Internal Development • Engineered Polymer Solutions • External Suppliers 2016 2017 2018 Controlled Production (lbs.) 18 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 158: Innovation Pipeline
Innovation Pipeline STAGE 1 STAGE 2 STAGE 3 STAGE 4 Technology Technology Concept Definition Commercialization Assessment Development Maintenance & Durability Visual Appearance Custom Solutions Sustainability The Painting Process Time & Labor 19 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 159: New Architectural Product Launches
New Architectural Product Launches 16 21 24 33 2013 2015 2017 2019 2012 2014 2016 2018 23 40 25 30+ 20 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
Slide 160: Summary
Summary Focused Global Supply Chain Organization Leveraging Systems, Tools & Processes Deliver Best in Class Service 21 FINANCIAL COMMUNITY PRESENTATION – JUNE 5, 2019
The Sherwin-Williams Company — Investor Day (June 2019) on 6ix