Rpm International Inc. · NYSE:RPM
Rpm International — Non-Deal Roadshow (August 2020)
51 slides from Rpm International's roadshow presentation, Aug 4, 2020
Slide 1: BMO Capital Markets Non-Deal Road Show
BMO Capital Markets Non-Deal Road Show Frank C. Sullivan Chairman and CEO Tuesday, August 4, 2020 RPM International Inc.
Slide 2: Forward-Looking Statements & Regulation G
Forward-Looking Statements & Regulation G This presentation contains “Forward-Looking Statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements relate to our plans, expectations, estimates and beliefs of future events or our future financial performance and inv
Slide 3: RPM At A Glance
RPM At A Glance A world leader in specialty coatings, sealants, building materials and related services. Q U I C K FA C T S MANUFACTURING FACILITIES IN 26 COUNTRIES DIVIDEND RECORD FOUNDED: 1947 HEADQUARTERS: STOCK LISTING: Medina, OH NYSE (Symbol: RPM) 46 consecutive years of dividend increases FIS
Slide 4: Operating Groups Drive Growth & Efficiency
Operating Groups Drive Growth & Efficiency Through Four Reportable Segments CONSTRUCTION PERFORMANCE PRODUCTS GROUP COATINGS GROUP FY20 Sales: $1.9 billion - 34% FY20 Sales: $1.1 billion - 20% CONSUMER FY20 SALES: SPECIALTY GROUP PRODUCTS GROUP $5.5 BILLION FY20 Sales: $1.9 billion - 35% FY20 Sales:
Slide 5: Construction Products Group
Construction Products Group $1.9 billon Fiscal 2020 Sales GLOBAL BRANDS REGIONAL BRANDS BMO NDRS 8/4/2020 5
Slide 6: Construction Products Group Target Markets
Construction Products Group Target Markets 6 sides of the Building • Bridge • Tunnel + Floor (seamless) • Rail • Water + Fire protection • Transit • Power + Concrete • Highway BUILDING ENVELOPE INFRASTRUCTURE Air | Moisture | Thermal Concrete | Concrete Protection BMO NDRS 8/4/2020 6
Slide 7: Performance Coatings Group
Performance Coatings Group $1.1 billon Fiscal 2020 Sales COATINGS FLOOR SYSTEMS INFRASTRUCTURE FRP GRATING PROTECTIVE COATINGS SANITARY FLOORS FOOD & BEVERAGE RESURFACING & REPAIRING BRIDGES FIBERGLASS REINFORCED PLASTIC GRATINGS FIREPROOFING SYSTEMS FLOORS FOR COMMERCIAL SPACES BUILDING MAINTENANCE
Slide 8: Performance Coatings Group Target Markets
Performance Coatings Group Target Markets Manufacturing Metals & Mining Pulp & Paper Technology Bridge & Highway Water Wastewater Transportation Marine Commercial Spaces Food & Beverage Pharmaceutical Healthcare Offshore Oil & Gas Petrochemical Power Renewable Energy BMO NDRS 8/4/2020 8
Slide 9: Consumer Group
Consumer Group $1.9 billon Fiscal 2020 Sales #1 Supplier in the #1 Caulk & Fastest Growing #1 Primer Brand #1 Brand of Wall Small Project Sealant Supplier Supplier of Wood in Customer Repair and Paint Category in North America Finishes in North Satisfaction Spackle in North Worldwide America among A
Slide 10: Consumer Group Target Markets
Consumer Group Target Markets • User Targets: DIY/Makers, Professionals, Industrial • Understanding targets’ needs and unmet needs drives innovation machine • Over 30,000 user insights have been gained in the past 24 months alone DIY DIY MAKERS PROFESSIONALS INDUSTRIAL BMO NDRS 8/4/2020 10
Slide 11: Specialty Products Group
Specialty Products Group $0.6 billon Fiscal 2020 Sales #1 Supplier of World Leading #1 in North Global Market Daylight Manufacturer of America for Leader in Water- Fluorescent Professional Professional Based, Antifouling Colorants Restoration and Touch-up and Paints for the Worldwide Cleaning Soluti
Slide 12: Specialty Products Group Target Markets
Specialty Products Group Target Markets Food, Pharma, Packaging, Safety Agriculture, Cosmetics Equipment, Forestry, Lumber Apparel Furniture and Appliance, Auto, Marine, Fuel, Restoration & Cabinetry Marine, Furniture Cleaning Construction Protection, Equipment & Cosmetics Chemicals BMO NDRS 8/4/202
Slide 13: Positioning RPM for the Next Level of Growth
Positioning RPM for the Next Level of Growth STRONG HISTORY OF MAP TO BUILDING A ENTREPRENEURIAL GROWTH BETTER RPM GROWTH CONTINUES Extraordinary Transforming RPM into a Combining 73-year history more connected and entrepreneurial legacy of growth, innovation efficient company and the discipline of
Slide 14: MAP to Growth Goals
MAP to Growth PURPOSE VISION To position RPM for sustained, profitable growth To transform RPM into a more connected creating superior value for its customers, and efficient company focused on entrepreneurs, associates and shareholders. operational excellence and continuous improvement, while mainta
Slide 15: MAP to Growth Slowed by Pandemic, but Still Delivering to the Bottom Line
MAP to Growth Slowed by Pandemic, but Still Delivering to the Bottom Line • During the fourth quarter, Coronavirus safety protocols – such as limits on travel and facility access – slowed some MAP to Growth initiatives, particularly manufacturing improvements and ERP consolidations. • In response to
Slide 16: Fiscal 2020 Fourth-Quarter Reported Results
Fiscal 2020 Fourth-Quarter Reported Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP May 31 May 31 Three months ended 2020 2019 % ($ in millions, except per share amounts) Sales $472 $560 (15.6)% EBIT1 $72 $84 (13.7)% C O N S O L I D AT E D PERFORM ANC E COATINGS GROUP May 31 May 31 May 31 May 3
Slide 17: Fiscal 2020 Fourth-Quarter Adjusted Results
Fiscal 2020 Fourth-Quarter Adjusted Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP May 31 May 31 Three months ended 2020 2019 % Sales $472 $560 (15.6)% ($ in millions, except per share amounts) EBIT1 $77 $88 (12.1)% C O N S O L I D AT E D EBIT Margin1 16.4% 15.7% +70 bps May 31 May 31 PERFORM
Slide 18: Fiscal 2020 Full-Year Reported Results
Fiscal 2020 Full-Year Reported Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP May 31 May 31 12 months ended 2020 2019 % Sales $1,880 $1,900 (1.0)% ($ in millions, except per share amounts) EBIT1 $218 $187 +16.4% PERFORM ANC E COATINGS GROUP C O N S O L I D AT E D May 31 May 31 May 31 May 31 12
Slide 19: Fiscal 2020 Full-Year Adjusted Results
Fiscal 2020 Full-Year Adjusted Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP May 31 May 31 12 months ended 2020 2019 % Sales $1,880 $1,900 (1.0)% ($ in millions, except per share amounts) EBIT1 $232 $201 +15.3% C O N S O L I D AT E D EBIT Margin1 12.3% 10.6% +170 bps May 31 May 31 PERFORM ANC
Slide 20: Record Cash Flow Generated in FY20
Record Cash Flow Generated in FY20 ($ in millions) SUMMARIZED CASH FLOW AND FREE CASH FLOW METRICS May 31 May 31 FY20 vs FY19 12 months ended 2020 2019 Source / (Use) Net Income $305 $268 $ 37 Stock-based Compensation $ 20 $ 31 ($ 11) Depreciation & Amortization $157 $142 $ 15 Working Capital $ 76 (
Slide 21: RPM is Positioned to Grow in New Markets and Product Channels
RPM is Positioned to Grow in New Markets and Product Channels $ in billions Pleasure Marine Cleaners, Powder Coatings, $1.1 Coatings, $0.50 $6 Caulks, Sealants & Cleaning/Restoration, Adhesives, $5 $0.25 Fluorescent Colorants, Wood Wood Care, $3 $0.150 Coatings, $10 Primers, $3 Food Coatings, $5 Sma
Slide 22: Construction Products Group Innovative New Products
Construction Products Group Innovative New Products Insulated Concrete Forms Level Top PC-AGG POWERply Endure Enable the construction of An easy-to-use, self-leveling BIO Adhesive stronger, highly energy resurfacing compound A two-part, bio-based roofing efficient concrete structures designed for ne
Slide 23: Performance Coatings Group Innovative New Products
Performance Coatings Group Innovative New Products Carboquick 200 Soilok Hygienic Systems This fast-cure, high-build This grout can stabilize soil, Seamless flooring, walls and polyaspartic coating provides shut off water intrusion and curbs unite to ensure dirt and corrosion protection, plus contai
Slide 24: Consumer Group Innovative New Products
Consumer Group Innovative New Products Turbo Spray Mold Killing Primer DynaFlex Ultra Delivers protection 4X faster The first and only EPA- An advanced exterior sealant than traditional aerosols in a registered primer that kills formulated for exterior large, easy-to-use can that existing mold, mild
Slide 25: Specialty Products Group Innovative New Products
Specialty Products Group Innovative New Products TRU-CORE for VerdeCoat 3-in-1 Repair Stick Engineered Woods A new “green” barrier coating Offers complete wood repairs Fully penetrates wood from specially formulated for with a single product, filling, the inside out with anti- packaging using ingred
Slide 26: Acquisition Program Targets Niche Businesses with Leading Brands
Acquisition Program Targets Niche Businesses with Leading Brands ✓ Successful, niche businesses with ★ Achieve revenue synergies leading brands ★ New channels ✓ Above average gross profit margins ★ New geographies CRITERIA ✓ 70% product line integrations BENEFITS ★ New technologies ✓ 30% stand-alone
Slide 27: Intercompany Connections Drive Value Creation
Intercompany Connections Drive Value Creation Rust-Oleum and Tremco Leveraging third-party Consumer Group MRO channel network Tremco and Fibergrate Connect to bring new rooftop safety solutions to market Dryvit and Euclid Chemical Shared technology speeds cure times of NewBrick product BMO NDRS 8/4/
Slide 28: International Expansion Opens New Markets
International Expansion Opens New Markets Sales by Region $ in millions CONSOLIDATED 2020 – $5,507 2002 – $1,960 OUTSIDE NA 2020 – $1,362 2002 – $235 EUROPE 2020 – $936 – 17% 2002 – $158 – 8% NORTH AMERICA 2020 – $4,145 – 75% 2002 – $1,725 – 88% AFRICA/MIDDLE EAST 2020 – $64 – 1% 2002 – $24 – 1% ASI
Slide 29: 5-Year and 10-Year Cumulative Total Return
5-Year and 10-Year Cumulative Total Return Among RPM, the S&P 500 and a Customized Peer Group RPM’S TOTAL RETURN HAS OUTPERFORMED S&P 500 by 44% the and its Peers by 19% over the past 10 years This graph compares the cumulative five-year and ten-year total return provided stockholders on RPM Interna
Slide 30: RPM vs. Peers and Indices
RPM vs. Peers and Indices Two-Year Stock Price Performance (3/31/18 – 3/31/20) BMO NDRS 8/4/2020 30
Slide 31: RPM is Building a Better World
RPM is Building a Better World From homes and to infrastructure, workplaces, …RPM’s products are trusted by consumers and precious and professionals worldwide to beautify landmarks… structures, protect them from harsh environments, prolong their lifecycles and enhance their sustainability. BMO NDRS
Slide 32: Coronavirus: Stonhard Installs Flooring Solution at New York Pop-Up Hospital
Coronavirus: Stonhard Installs Flooring Solution at New York Pop-Up Hospital BMO NDRS 8/4/2020 32
Slide 33: Nudura ICFs Part of First Net Zero Energy Public School in U.S.
Nudura ICFs Part of First Net Zero Energy Public School in U.S. BMO NDRS 8/4/2020 33
Slide 34: Nudura ICF Home Withstands Hurricane
Nudura ICF Home Withstands Hurricane BMO NDRS 8/4/2020 34
Slide 35: Appendix: Reconciliations of Non-GAAP Measures to GAAP Measures
Appendix Reconciliations of Non-GAAP Measures to GAAP Measures RPM International Inc.
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following are the non-GAAP financial measures used in this presentation: • EBIT is defined as earnings (loss) before interest and taxes. Management uses EBIT, as defined, as a measure of operating performance, since interest expense, net, essentially relates to corpor
Slide 37: Free Cash Flow Generation (Non-GAAP Measure)
Free Cash Flow Generation (Non-GAAP Measure) ($ in thousands) Fiscal Year Ended May 31, 2020 2019 2018 2017 2016 Cash Flows from Operating Activities: Net income $ 305,082 $ 267,687 $ 339,257 $ 184,671 $ 357,458 Depreciation and amortization 156,842 141,742 128,499 116,773 111,039 Working capital an
Slide 38: Adjustments Detail
Adjustments Detail BMO NDRS 8/4/2020 38
Slide 39: EBIT (Non-GAAP Measure): RPM Consolidated
EBIT* (Non-GAAP Measure): RPM Consolidated (As Reported) ($ in thousands, except per share and percent data) Three Months Ended May 31, (Unaudited) 2020 2019 Net Income $ 109,175 $ 133,832 Provision for Income Taxes 37,680 43,018 Income Before Income Taxes 146,855 176,850 Interest Expense 22,372 28,
Slide 40: EBIT (Non-GAAP Measure): RPM Consolidated
EBIT* (Non-GAAP Measure): RPM Consolidated (As Reported) Fiscal Year Ended May 31, ($ in thousands, except per share and percent data) 2020 2019 (Unaudited) Net Income $ 305,082 $ 267,687 Provision for Income Taxes 102,682 72,158 Income Before Income Taxes 407,764 339,845 Interest Expense 101,003 10
Slide 41: Reconciliation of "Reported" to "Adjusted" EPS
Reconciliation of "Reported" to "Adjusted" EPS (Unaudited) Three Months Ended May 31, 2020 2019 Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): Reported Earnings per Diluted Share $ 0.84 $ 1.02 Inventory-related charges
Slide 42: Reconciliation of "Reported" to "Adjusted" EPS
Reconciliation of "Reported" to "Adjusted" EPS (Unaudited) Fiscal Year Ended May 31, 2020 2019 Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): Reported Earnings per Diluted Share $ 2.34 $ 2.01 Inventory-related charges (
Slide 43: EBIT (Non-GAAP Measure): Construction Products Segment
EBIT** (Non-GAAP Measure): Construction Products Segment (As Reported) ($ in thousands and percent data) (Unaudited) Three Months Ended May 31, 2020 2019 Income Before Income Taxes $ 70,339 $ 82,448 Add: Interest Expense, Net* 2,033 1,366 EBIT** (non-GAAP measure) 72,372 83,814 Inventory-related cha
Slide 44: EBIT (Non-GAAP Measure): Construction Products Segment
EBIT** (Non-GAAP Measure): Construction Products Segment (As Reported) ($ in thousands and percent data) (Unaudited) Fiscal Year Ended May 31, 2020 2019 Income Before Income Taxes $ 209,663 $ 178,823 Add: Interest Expense, Net* 8,265 8,334 EBIT** (non-GAAP measure) 217,928 187,157 Inventory-related
Slide 45: EBIT (Non-GAAP Measure): Performance Coatings Segment
EBIT** (Non-GAAP Measure): Performance Coatings Segment (As Reported) ($ in thousands and percent data) (Unaudited) Three Months Ended May 31, 2020 2019 Income Before Income Taxes $ 18,728 $ 32,398 Add: Interest Expense, Net* 2 79 EBIT** (non-GAAP measure) 18,730 32,477 Inventory-related charges (a)
Slide 46: EBIT (Non-GAAP Measure): Performance Coatings Segment
EBIT** (Non-GAAP Measure): Performance Coatings Segment (As Reported) ($ in thousands and percent data) Fiscal Year Ended May 31, (Unaudited) 2020 2019 Income Before Income Taxes $ 102,345 $ 77,388 Add: Interest Expense (Income), Net* (18) 481 EBIT** (non-GAAP measure) 102,327 77,869 Inventory-relat
Slide 47: EBIT (Non-GAAP Measure): Consumer Segment
EBIT** (Non-GAAP Measure): Consumer Segment (As Reported) ($ in thousands and percent data) (Unaudited) Three Months Ended May 31, 2020 2019 Income Before Income Taxes $ 74,612 $ 99,371 Add: Interest Expense, Net* 54 122 EBIT** (non-GAAP measure) 74,666 99,493 Inventory-related charges (a) 8,852 8,4
Slide 48: EBIT (Non-GAAP Measure): Consumer Segment
EBIT** (Non-GAAP Measure): Consumer Segment (As Reported) ($ in thousands and percent data) (Unaudited) Fiscal Year Ended May 31, 2020 2019 Income Before Income Taxes $ 198,024 $ 217,448 Add: Interest Expense, Net* 272 538 EBIT** (non-GAAP measure) 198,296 217,986 Inventory-related charges (a) 14,52
Slide 49: EBIT (Non-GAAP Measure): Specialty Segment
EBIT** (Non-GAAP Measure): Specialty Segment (As Reported) ($ in thousands and percent data) (Unaudited) Three Months Ended May 31, 2020 2019 Income Before Income Taxes $ 2,901 $ 19,968 Add: Interest Expense (Income), Net* 57 (93) EBIT** (non-GAAP measure) 2,958 19,875 Restructuring Expense (b) 926
Slide 50: EBIT (Non-GAAP Measure): Specialty Segment
EBIT** (Non-GAAP Measure): Specialty Segment (As Reported) ($ in thousands and percent data) (Unaudited) Fiscal Year Ended May 31, 2020 2019 Income Before Income Taxes $ 57,933 $ 86,018 Add: Interest Expense (Income), Net* 62 (425) EBIT** (non-GAAP measure) 57,995 85,593 Inventory-related charges (a
Slide 51: EBIT & EBITDA (Non-GAAP Measures)
EBIT* & EBITDA (Non-GAAP Measures) *EBIT is defined as earnings before interest and taxes, while EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT as a (in