Rpm International Inc. · NYSE:RPM
Rpm International — Q3 2023 Earnings Presentation
33 slides from Rpm International's earnings presentation, Apr 6, 2023
Slide 1: Fiscal 2023 Third-Quarter Results
Fiscal 2023 Third-Quarter Results April 6, 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 Q3-23 Sales and Adjusted EBIT
Record Consolidated Q3-23 Sales and Adjusted EBIT Consolidated Sales and Adjusted EBIT Growth FINANCIAL HIGHLIGHTS 40% Sales Growth Adj. EBIT Growth (1) 36.4% 35% 33.1% 30% 25% 20% 17.1% 15% 13.7% 11.7% $1.52B 9.3% 10% 5.7% 4.2% 5% RECORD Q3 SALES 0% 5 Consecutive +5.7% Q4-22 Q1-23 Q2-23 Q3-23 Quart
Slide 4: Record Q3 Sales For All Segments; Record Consolidated Q3 Adjusted EBIT
Record Q3 Sales For All Segments; Record Consolidated Q3 Adjusted EBIT CPG PCG SPG Consumer Consolidated Record Sales Record Adjusted EBIT¹ HIGHLIGHTS • Record Q3 sales in all four segments driven by increased pricing in response to continued inflation • Growth in businesses benefiting from increase
Slide 5: Sales Growth in USD by Region | Q3-23
Sales Growth in USD by Region | Q3-23 EUROPE NORTH AMERICA 15% of total sales 76% of total sales -3.6% +8.0% ASIA/PACIFIC 3% of total sales -0.9% AFRICA/MIDDLE EAST/ CONSOLIDATED OTHER FOREIGN TOTAL 1% of total sales LATIN AMERICA +6.5% +5.7% 5% of total sales +7.3% Fiscal 2023 Third-Quarter Results
Slide 6: Fiscal 2023 Third-Quarter Financial Results | Consolidated
Fiscal 2023 Third-Quarter Financial Results | Consolidated Record Q3 sales and adjusted EBIT ($ in millions, except Q3 Q3 KEY POINTS 2023 2022 % Change per share amounts) • Sales increased 5.7% resulting in Q3 record sales of $1.52 billion and include FX headwinds of 2.3% Sales $1,516 $1,434 +5.7% •
Slide 7: Construction Products Group Third-Quarter Financial Results
Fiscal 2023 Third-Quarter Financial Results CPG record Q3 sales; adjusted EBIT negatively impacted by lower fixed-cost leverage Q3 Q3 % Change CONSTRUCTION ($ in millions, except margins) 2023 2022 PRODUCTS GROUP Sales 497 482 +3.1% EBIT1 12 33 -65.0% Adjusted EBIT1 13 35 -62.1% Adjusted EBIT Margin
Slide 8: Performance Coatings Group Third-Quarter Financial Results
Fiscal 2023 Third-Quarter Financial Results Strong growth throughout PCG resulted in record Q3 sales and adjusted EBIT PERFORMANCE ($ in millions, except margins) Q3 2023 Q3 2022 % Change COATINGS GROUP Sales 300 271 +10.6% EBIT1 -9 25 -135.5% Adjusted EBIT1 31 27 +16.4% Adjusted EBIT Margin1 10.4%
Slide 9: Specialty Products Group Third-Quarter Financial Results
Fiscal 2023 Third-Quarter Financial Results Record Q3 revenue at SPG, with adjusted EBIT negatively impacted by reduced fixed-cost leverage SPECIALTY ($ in millions, except margins) Q3 2023 Q3 2022 % Change PRODUCTS GROUP Sales 191 189 +0.9% EBIT1 39 26 +52.3% Adjusted EBIT1 17 27 -37.0% Adjusted EB
Slide 10: Consumer Group Third-Quarter Financial Results
Fiscal 2023 Third-Quarter Financial Results Record Q3 sales and adjusted EBIT driven by MAP 2025 benefits and improved pricing Q3 Q3 CONSUMER ($ in millions, except margins) 2023 2022 % Change GROUP Sales 529 492 +7.5% EBIT1 68 17 +304.8% Adjusted EBIT1 48 17 +180.4% Adjusted EBIT Margin1 9.1% 3.5%
Slide 11: Balance Sheet and Cash Flow Update
Balance Sheet and Cash Flow Update Debt Maturity Debt Maturity Schedule Schedule Q3-23 Update $2,000 $1,800 • Paid $159.8 million in dividends and $1,600 repurchased $37.5 million of shares since $1,400 $646 beginning of fiscal year Amounts (in millions) $1,200 • Cash flow from operations +$72.1 mil
Slide 12: Transformational Forces Driving Opportunities
Transformational Forces Driving Opportunities Energy Transition Energy Efficient Reshoring Electric Vehicle Buildings Manufacturing • High-performance • Engineered flooring • Specified fireproofing • Protective coatings construction products systems • Engineered flooring • Specified fireproofing • H
Slide 13: 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 $53 Billion Inflation CARES Act American Rescue Plan Investment a
Slide 14: Engineered Solutions to Serve Growing EV and Battery Manufacturing
Engineered Solutions to Serve Growing EV and Battery Manufacturing CPG: High Range Water Reducer PCG: Thermo-Sorb VOC • Reduces water consumption by up to 30% • Up to 3 hours of passive fire protection • Requires less Portland cement • Low outgassing for clean rooms • Fast application CPG: Tuf-Stran
Slide 15: Innovation: Rust-Oleum's New Custom Spray 5-in-1
Innovation: Rust-Oleum’s New Custom Spray 5-in-1 • Patent-pending spraying technology • 5 spray patterns – increased precision, minimized drips, reduced waste • 30% greater corrosion resistance and color retention¹ • www.dawnofanewspray.com 1 – Compared to traditional Stops Rust formula Fiscal 2023
Slide 16: Fiscal 2023 Fourth-Quarter Guidance
Fiscal 2023 Fourth-Quarter Guidance CATEGORY Q4-23 OUTLOOK (YOY) PRIOR-YEAR RESULTS PRIOR-YEAR RECORD SALES | Consolidated Flat to prior year +13.7% Construction Products Group Decrease low to mid-single digits +18.5% Performance Coatings Group Increase mid-single digits +16.3% Specialty Products Gr
Slide 17: Appendix: Reconciliation of Non-GAAP to GAAP Measures
Appendix Reconciliation of Non-GAAP to GAAP Measures April 6, 2023
Slide 18: Consolidated Statements of Income: Three Months
Consolidated Statements of Income: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2023 % February 28, 2022 % % Change Net Sales $ 1,516,176 $ 1,433,879 5.7 Cost of Sales 978,142 64.5 935,293 65.2 Gross Profit 538,034 35.5 498,586 34.8 SG&
Slide 19: Consolidated Statements of Income: Nine Months
Consolidated Statements of Income: Nine Months ($ in thousands, except per share and percent data) Nine Months Ended (Unaudited) February 28, 2023 % February 28, 2022 % % Change Net Sales $ 5,240,204 $ 4,723,838 10.9 Cost of Sales 3,267,308 62.4 3,029,287 64.1 Gross Profit 1,972,896 37.6 1,694,551 3
Slide 20: 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 21: 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 22: 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): February 28, 2023 February 28, 2022 Reported Earnings per Diluted Share $ 0.21 $
Slide 23: Reconciliation of Reported to Adjusted EPS: Nine Months
Reconciliation of "Reported" to "Adjusted" EPS: Nine Months (Unaudited) Reconciliation of Reported Earnings per Diluted Share to Adjusted Nine Months Ended Earnings per Diluted Share (All amounts presented after-tax): February 28, 2023 February 28, 2022 Reported Earnings per Diluted Share $ 2.54 $ 2
Slide 24: EBIT (Non-GAAP): RPM Consolidated: Three Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Three Months ($ in thousands, except per share and percent data) Three Months Ended (Unaudited) February 28, 2023 February 28, 2022 Net Income $ 27,239 $ 33,249 Provision for Income Taxes 15,248 7,248 Income Before Income Taxes 42,487 40,497 Interest Expe
Slide 25: EBIT (Non-GAAP): RPM Consolidated: Nine Months
EBIT** (Non-GAAP Measure): RPM Consolidated: Nine Months ($ in thousands, except per share and percent data) Nine Months Ended (Unaudited) February 28, 2023 February 28, 2022 Net Income $ 328,060 $ 293,160 Provision for Income Taxes 114,683 91,962 Income Before Income Taxes 442,743 385,122 Interest
Slide 26: EBIT (Non-GAAP): Construction Products Segment: Three Months
EBIT** (Non-GAAP Measure): Construction Products Segment: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2023 February 28, 2022 Income Before Income Taxes $ 8,181 $ 31,498 Add: Interest Expense, Net* 3,456 1,735 EBIT** (non-GAAP measure)
Slide 27: EBIT (Non-GAAP): Construction Products Segment: Nine Months
EBIT** (Non-GAAP Measure): Construction Products Segment: Nine Months ($ in thousands, except per share and percent data) Nine Months Ended (Unaudited) February 28, 2023 February 28, 2022 Income Before Income Taxes $ 192,836 $ 276,223 Add: Interest Expense, Net* 7,979 5,254 EBIT** (non-GAAP measure)
Slide 28: EBIT (Non-GAAP): Performance Coatings Segment: Three Months
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2023 February 28, 2022 (Loss) Income Before Income Taxes $ (8,351) $ 24,917 Add: Interest (Income), Net* (475) (76) EBIT** (non-GAAP m
Slide 29: EBIT (Non-GAAP): Performance Coatings Segment: Nine Months
EBIT** (Non-GAAP Measure): Performance Coatings Segment: Nine Months ($ in thousands, except per share and percent data) Nine Months Ended (Unaudited) February 28, 2023 February 28, 2022 Income Before Income Taxes $ 83,896 $ 97,849 Add: Interest (Income), Net* (947) (407) EBIT** (non-GAAP measure) 8
Slide 30: EBIT (Non-GAAP): Specialty Products Segment: Three Months
EBIT** (Non-GAAP Measure): Specialty Products Segment: Three Months ($ in thousands, except per share and percent data) Three Months Ended (Unaudited) February 28, 2023 February 28, 2022 Income Before Income Taxes $ 39,482 $ 25,881 Add: Interest (Income) Expense, Net* (28) 18 EBIT** (non-GAAP measur
Slide 31: EBIT (Non-GAAP): Specialty Products Segment: Nine Months
EBIT** (Non-GAAP Measure): Specialty Products Segment: Nine Months ($ in thousands, except per share and percent data) Nine Months Ended (Unaudited) February 28, 2023 February 28, 2022 Income Before Income Taxes $ 94,798 $ 71,028 Add: Interest (Income) Expense, Net* (23) 82 EBIT** (non-GAAP measure)
Slide 32: EBIT (Non-GAAP): Consumer Segment: Three Months
EBIT** (Non-GAAP Measure): Consumer Segment: Three Months ($ in thousands, except per share and percent data) (Unaudited) Three Months Ended February 28, 2023 February 28, 2022 Income Before Income Taxes $ 68,146 $ 16,893 Add: Interest (Income), Net* (18) (62) EBIT** (non-GAAP measure) 68,128 16,831
Slide 33: EBIT (Non-GAAP): Consumer Segment: Nine Months
EBIT** (Non-GAAP Measure): Consumer Segment: Nine Months ($ in thousands, except per share and percent data) (Unaudited) Nine Months Ended February 28, 2023 February 28, 2022 Income Before Income Taxes $ 278,708 $ 95,912 Add: Interest (Income), Net* (45) (211) EBIT** (non-GAAP measure) 278,663 95,70