Sherwin-Williams Company (the) · NYSE:SHW
Sherwin-Williams Company (the) — The Sherwin-Williams Company — Investor Presentation (2012)
35 slides from Sherwin-Williams Company (the)'s investor presentation, 2012
Slide 1: Investor Presentation
Investor Presentation THE SHERWIN-WILLIAMS COMPANY
Slide 2: Forward-Looking Statements
Forward-Looking Forward Looking Statements This presentation today will contain certain “forward forward-looking looking statements” statements , as defined under U.S. federal securities laws, with respect to sales, earnings and other matters. These forward-looking statements are based upon manageme
Slide 3: Discussion Outline
Discussion Outline • Coatings C ti M Market k t Overview O i • Sherwin-Williams Overview – Paint Stores Group – Consumer Group – Latin America Coatings Group – Global Gl b l Finishes Fi i h G Group • Sherwin-Williams Financial Overview The Sherwin-Williams Company - 3rd Quarter 2012
Slide 4: 2011 Coatings Industry
2011 Coatings Industry Global Mix by Category Total Coatings Special 2011 Purpose P 7 4 Billion Gallons (+5%) 7.4 21% ~99 Billion Dollars (+5%) Architectural 41% OEM Product Finishes 38% Source: Kusumgar, Nerlfi & Growney; Segment Percents Based on Dollars The Sherwin-Williams Company - 3rd Quarter
Slide 5: 2011 Coatings Industry: Global Demand
2011 Coatings Industry Global Demand (US$) Europe 29% 29% Asia‐Pacific 40% Americas 36% 28% 33% Rest of World 3% All Coatings Architectural Coatings 2% The Sherwin-Williams Company - 3rd Quarter 2012
Slide 6: Top Global Manufacturers - 2011
Coatings Industry Top Global Manufacturers - 2011 • Top 10 suppliers account for ~57% global share All Others (>15,000 firms) • More M than h 15,000 15 000 companies make up the balance Source: Kusumgar, Nerlfi & Growney, Company Data The Sherwin-Williams Company - 3rd Quarter 2012
Slide 7: U.S. Coatings Industry
U.S. Coatings Industry Sales ($) Mix by Category Total Coatings Special 2011 Purpose p 1.04 Billion Gallons ((+1%) %) 16% 18.66 Billion Dollars (+5.3%) Architectural 58% OEM Product Finishes 26% Source: U.S. Department of Commerce; Segment Percents Based on Dollars The Sherwin-Williams Company - 3rd
Slide 8: U.S. Coatings Industry: Architectural Coatings Gallons
U.S. Coatings g Industry y Architectural Coatings Gallons (Millions) 900 ~803 Milllions of Galllons 800 >185 Million 700 Gallons Lost 600 ~ 615 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: U.S. Department of Commerce MA325F Report The Sherwin-Williams Company - 3
Slide 9: Favorable Customer Mix
Favorable Customer Mix DIY Contractor Shift will Continue 44% 59% 56% 41% Contractor DIY Source: U.S. Dept of Commerce/Company Estimates The Sherwin-Williams Company - 3rd Quarter 2012
Slide 10: DIY Channel Share, U.S.
DIY Channel Share,, U.S. Most Recent Purchase by Store Type Home Centers 61% Mass Merchants 14% Lumber/ Paint Stores Building Supply 15% 2% Hardware 9% Source: PCRP 2011 The Sherwin-Williams Company - 3rd Quarter 2012
Slide 11: Contractor Channel Share, U.S.
Contractor Channel Share,, U.S. Primary Outlet by Store Type Paint Stores 90.2% Hardware 1.6% Home Centers 6.3% Discount / Other 1.9% Source: S‐W Marketing: 2011 The Sherwin-Williams Company - 3rd Quarter 2012
Slide 12: Company Overview: Financial Highlights
Company Overview Financial Highlights 2011 2010 % Chg. g Net Sales $8.77M $7.78M 12.7% EBITDA $965M $924M 4.4% Income $442M* $462M (4.3%) % Sales 5.0% 5.9% Earnings Per Share $4 14* $4.14 $4 21 $4.21 (1 7%) (1.7%) Net Operating Cash $736M** $707M 4.1% Dividend Per Share $1.46 $1.44 Return on Assets
Slide 13: Company Overview: Adjusted Earnings & Net Operating Cash
Company Overview Adjusted Earnings & Net Operating Cash 2011 2010 % Chg. g Net Sales $8.77M $7.78M 12.7% EBITDA $965M $924M 4.4% Income $517M $462M 11.9% % Sales 5.9% 5.9% Earnings Per Share $4 84 $4.84 $4 21 $4.21 15 0% 15.0% Net Operating Cash $806M $707M 14.0% Dividend Per Share $1.46 $1.44 Retur
Slide 14: Company Overview: 2012 Financial Highlights
Company Overview 2012 Financial Highlights YTD YTD 9-30-12 9-30-11 % Chg. Net Sales $7.31B $6.70B 9.2% EBITDA $977M $781M 25.1% Income $563M $427M 31 8% 31.8% % Sales 7.7% 6.4% Earnings Per Share $5.37 $3.98 34.9% The Sherwin-Williams Company - 3rd Quarter 2012
Slide 15: Revenue & Profit by Segment - 2011
Company Overview Revenue & Profit by Segment - 2011 Global Paint Stores Sales: $1.88 Billion Sales: $4.78 Billion Profit: $ $90.3 Million Profit: $645.7 $645 7 Million Profit %: 4.8 Profit %: 13.5 Sales: $1.27 Billion Profit: $173.7 $173 7 Million Profit %: 13.6 Sales: $.828 Billion Profit: $75.5 Mi
Slide 16: Top Paint Store Chains - North America
Paint Stores Group p Top 10 Paint Store Chains – North America YE 2011 Est. Est Count 1 Yr Change 3,450 +60 Akzo Nobel/ICI/Glidden 558 +4 PPG 393 +2 Comex/Pro / Paint,, Inc. 317 ‐21 Kelly‐Moore 154 ‐9 Dunn Edwards 109 1,831 +1 ‐26 Cloverdale/Rodda 104 +2 Diamond Vogel 67 ‐1 1 Benjamin Moore 84 0 Vis
Slide 17: Paint Stores Group: Store Penetration
Paint Stores Group Store Penetration The Sherwin-Williams Company - 3rd Quarter 2012
Slide 18: Paint Stores Group: Voluntary Turnover
Paint Stores Group Voluntary Turnover Manager 4.2% Assistant Mgr Mgr. 8 9% 8.9% Sales Rep 4.0% The Sherwin-Williams Company - 3rd Quarter 2012
Slide 19: Consumer Group: End to End Supply Chain
Consumer Group End to End Supply Chain • 32 Manufacturing Sites • 7 Distribution Service Centers • 400 Tractors / 1,200 Trailers • M More than h 6 6,000 000 E Employees l The Sherwin-Williams Company - 3rd Quarter 2012
Slide 20: Consumer Group: Raw Material Breakdown
Consumer Group Raw Material Breakdown Containers (14%) Metal or Plastic Solvents (12%) Resins/Latex (36%) Acrylic (Latex Paints) Alkyd (Oil Paints) Epoxy (Epoxy Paints) Pigments (29%) Titanium Dioxide Pigments Paint Fillers Extenders Additives (9%) The Sherwin-Williams Company - 3rd Quarter 2012
Slide 21: Brand Power
Brand Power Leading U.S. Brand Awareness #1 Architectural Paint Brand #1 Stain St i & Protective P t ti Fi Finish i hBBrand d #1 Aerosol Paint Brand #1 Auto Specialty Paint Brand #1 Painting Tool Brand #1 Wood Sealer Brand The Sherwin-Williams Company - 3rd Quarter 2012
Slide 22: Consumer Group: U.S. Outlet Penetration
Consumer Group U.S. Outlet Penetration 56,000 Total U.S. Paint & Coatings Outlets 38,000 Consumer Segment Customers 3,450 Sherwin-Williams Stores The Sherwin-Williams Company - 3rd Quarter 2012
Slide 23: Latin America Coatings
Latin America Coatings Mexico Venezuela El Salvador Ecuador Perú Brazil Ur g a Uruguay Chile Argentina S-W Operations S-W Licensees The Sherwin-Williams Company - 3rd Quarter 2012
Slide 24: Latin America Coatings
Latin America Coatings Architectural Protective & Marine Product Finishes S-W Stores Dealers Home Centers/Mass The Sherwin-Williams Company - 3rd Quarter 2012
Slide 25: Latin America Coatings: Controlled Distribution & Dedicated Dealers
Latin America Coatings Controlled Distribution & Dedicated Dealers 255 Company operated Company-operated Dedicated Dealers stores throughout the Region in Mexico & Argentina The Sherwin-Williams Company - 3rd Quarter 2012
Slide 26: Global Finishes Group
Global Finishes Group Automotive Aerospace Protective Marine OEM Finishes The Sherwin-Williams Company - 3rd Quarter 2012
Slide 27: Global Finishes Group: Expanding Global Platform
Global Finishes Group Expanding Global Platform • Automotive • OEM Product Finish • Protective & Marine • Architectural • OEM Product Finish • Industrial Wood Coatings • Automotive • Aerospace • Protective & Marine • Protective & Marine • OEM Product Finish • OEM Product Finish • Automotive A t ti •
Slide 28: Consolidated Gross Profit
Consolidated Gross Profit $ Gross Profit % of Sales 3,745 4,000 3,598 3,481 3,413 3,499 3,263 3,500 3,080 2,701 3,000 $ Millions 2,500 46.0 44 8 44.8 2 000 2,000 44 2 44.2 44 9 44.9 43 8 43.8 42.8 43.7 42.7 1,500 1,000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 The Sherwin-Williams Company - 3rd
Slide 29: Consolidated Gross Profit with Raw Material Index
Consolidated Gross Profit $ Gross Profit % of Sales Raw Material Index 3,745 4,000 3,598 3,481 3,413 3,499 3,263 3,500 3,080 2,701 3,000 $ Millions 2,500 1.8 46.0 44 8 44.8 2 000 2,000 44 2 44.2 44 9 44.9 43 8 43.8 42.8 43.7 42.7 1.6 1,500 1.4 1,000 1.2 500 0 1.0 2004 2005 2006 2007 2008 2009 2010 2
Slide 30: Selling, General & Admin Expense
Selling, General & Admin Expense $ SG&A % of Sales 2,961 3,000 2,728 2,597 2,644 2,535 2,513 2,326 , 2,500 2 069 2,069 $ Millions 2,000 1 500 1,500 35 7 35.7 35.1 33.8 33.1 33.8 32.4 32.2 32.4 1,000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 The Sherwin-Williams Company - 3rd Quarter 2012
Slide 31: Working Capital Ratio
Working Capital Ratio (Accounts Receivable + Inventory – Payables)/Sales 20% 13.8% 15% 12.5% 12.7% 11 7% 11.7% 11.5% 11.9% 11 9% 10.7% 10.9% 10% 5% 0% 2004 2005 2006 2007 2008 2009 2010 2011 The Sherwin-Williams Company - 3rd Quarter 2012
Slide 32: Uses of Cash
Uses of Cash 2007-2011 ($ Millions) 5 Year Net Operating Cash: $4 5-Year 052 4 $4,052.4 Capital Expenditures $653.4 Treasury Stock P h Purchases $2,529.4 $799.9 C h Di Cash Dividends id d $709.1 Acquisitions The Sherwin-Williams Company - 3rd Quarter 2012
Slide 33: Stock Repurchase
Stock Repurchase 13.20 14.00 12.00 9.00 Shares 10.00 8.10 7.25 6 60 6.60 Millions of S 8.00 8 00 5.60 5.00 6.00 4.70 4.00 M 2.00 0.00 2004 2005 2006 2007 2008 2009 2010 2011 Avg. Common Shares Outstanding 144.7 141.1 137.3 130.9 119.3 115.4 108.2 103.4 Avg Price/Share Avg. $40 00 $40.00 $44 $44.14 1
Slide 34: Total Debt : EBITDA Ratio
Total Debt : EBITDA Ratio 84% 88% 98% 113% 103% 1148 1200 946 924 96 965 1000 834 Millions) 1045 993 800 965 834 818 ($ in M 600 400 200 0 2007 2008 2009 2010 2011 Total Debt EBITDA The Sherwin-Williams Company - 3rd Quarter 2012
Slide 35: Dividends Per Share 1979 – 2012
Dividends Per Share 1979 – 2012 1.56 $1.60 1.46 1.421.44 1.40 $1.40 1.26 $1.20 1 00 1.00 $1.00 .82 $0.80 .68 58 .58 .60 .62 $0.60 .54 .45 .48 .40 $0.40 .32 .35 .22 .25 .28 18 .19 .21 .18 $0.20 .12 .13 16 .14 .16 .05 .06 .08 .10 .01 .04 $0.00 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 199
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