Rpm International Inc. · NYSE:RPM
Rpm International — Wells Fargo Virtual 2020 Industrials Conference
49 slides from Rpm International's conference presentation, May 6, 2020
Slide 1: Wells Fargo VIRTUAL 2020 Industrials Conference
Wells Fargo VIRTUAL 2020 Industrials Conference Frank C. Sullivan Chairman and CEO Matthew T. Ratajczak Vice President – Global Tax and Treasurer May 6, 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 Proforma Sales: $1.9 billion - 34% Proforma Sales: $1.1 billion - 20% CONSUMER FY19 SALES: SPECIALTY GROUP PRODUCTS GROUP $5.6 BILLION Proforma Sales: $1.9 billion - 34%
Slide 5: Construction Products Group
Construction Products Group $1.9 billon Fiscal 2019 Proforma Sales GLOBAL BRANDS REGIONAL BRANDS Wells Fargo VIRTUAL 2020 Industrials Conference 5/6/20 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 Wells Fargo VIRTUAL 2020 Industrial
Slide 7: Performance Coatings Group
Performance Coatings Group $1.1 billon Fiscal 2019 Proforma 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 MA
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 Wells Fargo VIRTUAL 2020 Industr
Slide 9: Consumer Group
Consumer Group $1.9 billon Fiscal 2019 Proforma 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 Americ
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 Wells Fargo VIRTUAL 2020 Indus
Slide 11: Specialty Products Group
Specialty Products Group $0.7 billon Fiscal 2019 Proforma 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 Cleani
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 Wells Fargo VIRT
Slide 13: Positioning RPM for the Next Level of Growth
Positioning RPM for the Next Level of Growth STRONG HISTORY OF 2020 MAP BUILDING A ENTREPRENEURIAL TO GROWTH BETTER RPM GROWTH CONTINUES Extraordinary Transforming RPM into a Combining 72-year history more connected and entrepreneurial legacy of growth, innovation efficient company and the disciplin
Slide 14: 2020 MAP to Growth
2020 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 m
Slide 15: 2020 MAP to Growth: Wave 1 Exceeds Initial Target by 23%
2020 MAP to Growth: Wave 1 Exceeds Initial Target by 23% Annualized Run Rate to Benefit 2022: $106 MM EBIT WAVES PLAN MAP 2020 $106 Annualized Run Rate Annualized to Benefit 2021: $101 MM EBIT Run Rate Annualized Run Rate $ in millions to Benefit 2020: $290 $102 MM $101 $83 MM EBIT EBIT $41 MANUFACT
Slide 16: Fiscal 2020 Third-Quarter Reported Results
Fiscal 2020 Third-Quarter Reported Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP Feb. 29 Feb. 28 Three months ended 2020 2019 % ($ in millions, except per share amounts) Sales $372 $355 +4.7% EBIT1 $1.7 $(1.5) +207.6% C O N S O L I D AT E D PERFORM ANC E COATIN GS GROUP Feb. 29 Feb. 28 Feb. 2
Slide 17: Fiscal 2020 Third-Quarter Adjusted Results
Fiscal 2020 Third-Quarter Adjusted Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP Feb. 29 Feb. 28 Three months ended 2020 2019 % Sales $372 $355 +4.7% ($ in millions, except per share amounts) EBIT1 $6.0 $(0.3) +1,917.8% C O N S O L I D AT E D EBIT Margin1 1.6% (0.1)% nm Feb. 29 Feb. 28 PERFOR
Slide 18: Fiscal 2020 Year-to-Date Reported Results
Fiscal 2020 Year-to-Date Reported Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP Feb. 29 Feb. 28 Nine months ended 2020 2019 % Sales $1,408 $1,340 +5.0% ($ in millions, except per share amounts) EBIT1 $146 $103 +40.8% PERFORM ANC E COATIN GS GROUP C O N S O L I D AT E D Feb. 29 Feb. 28 Feb. 29
Slide 19: Fiscal 2020 Year-to-Date Adjusted Results
Fiscal 2020 Year-to-Date Adjusted Results SEGMENT RESULTS CONSTRUCTI ON PRODUCTS GROUP Feb. 29 Feb. 28 Nine months ended 2020 2019 % Sales $1,408 $1,340 +5.0% ($ in millions, except per share amounts) EBIT1 $155 $113 +36.5% C O N S O L I D AT E D EBIT Margin1 11.0% 8.5% +250 bps Feb. 29 Feb. 28 PERF
Slide 20: Select Cash Flow Items
Select Cash Flow Items ($ in millions) SUMMARIZED CASH FLOW AND FREE CASH FLOW METRICS Feb. 29 Feb. 28 FY20 vs FY19 Nine months ended 2020 2019 Source / (Use) Net Income $196 $134 $ 62 Stock-based Compensation $ 19 $ 21 ($ 2) Depreciation & Amortization $114 $108 $ 6 Working Capital $138 ($ 95) $233
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: Accelerating Acquisition Pace
Accelerating Acquisition Pace ✓ 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 with entrepreneurial leadership th
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 Wells Fargo V
Slide 28: International Expansion Opens New Markets
International Expansion Opens New Markets Sales by Region $ in millions CONSOLIDATED 2019 – $5,565 2002 – $1,960 OUTSIDE NA 2019 – $1,498 2002 – $235 EUROPE 2019 – $1,029 – 18% 2002 – $158 – 8% NORTH AMERICA 2019 – $4,067 – 73% 2002 – $1,725 – 88% AFRICA/MIDDLE EAST 2019 – $72 – 2% 2002 – $24 – 1% A
Slide 29: RPM Facility Closures: COVID-19
RPM Facility Closures: COVID-19 REPORT DATE: CLOSURE STATUS: FACILITY TYPE: April 29, 2020 Closure – Gov’t Shutdown Manufacturing Open/Reopened Other Office/Facility tremco illbruck Cologne, Germany Kirker Rust-Oleum Ross-Shire, Scotland Carboline Somerset, NJ, USA Lier, Norway USL Group Pettit Dryv
Slide 30: 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. Wells Far
Slide 31: Coronavirus: Stonhard Installs Flooring Solution at New York Pop-Up Hospital
Coronavirus: Stonhard Installs Flooring Solution at New York Pop-Up Hospital Wells Fargo VIRTUAL 2020 Industrials Conference 5/6/20 31
Slide 32: 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. Wells Fargo VIRTUAL 2020 Industrials Conference 5/6/20 32
Slide 33: Nudura ICF Home Withstands Hurricane
Nudura ICF Home Withstands Hurricane Wells Fargo VIRTUAL 2020 Industrials Conference 5/6/20 33
Slide 34: Appendix: Reconciliations of Non-GAAP Measures to GAAP Measures
Appendix Reconciliations of Non-GAAP Measures to GAAP Measures RPM International Inc.
Slide 35: 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 36: Adjustments Detail
Adjustments Detail (a) Inventory-related charges reflect the following in fiscal 2020: charges recorded in cost of goods sold that reflect product line and SKU rationalization at our Consumer segment, as well as inventory write-offs in connection with restructuring activities at our Construction Pro
Slide 37: EBIT (Non-GAAP Measure): RPM Consolidated
EBIT* (Non-GAAP Measure): RPM Consolidated (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Three months ended February 29, 2020 February 28, 2019 Net Income $ 12,090 $ 14,496 Provision (Benefit) for Income Taxes 4,218 (10,032) Income Before Income Taxes 16,308 4,464 Int
Slide 38: EBIT (Non-GAAP Measure): RPM Consolidated
EBIT* (Non-GAAP Measure): RPM Consolidated (As Reported) ($ in thousands, except per share and percent data) (Unaudited) Nine months ended February 29, 2020 February 28, 2019 Net Income $ 195,907 $ 133,855 Provision for Income Taxes 65,002 29,140 Income Before Income Taxes 260,909 162,995 Interest E
Slide 39: Reconciliation of Reported to Adjusted EPS
Reconciliation of "Reported" to "Adjusted" EPS (Unaudited) Three months ended February 29, 2020 February 28, 2019 Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): Reported Earnings per Diluted Share $ 0.09 $ 0.11 Inventor
Slide 40: Reconciliation of Reported to Adjusted EPS
Reconciliation of "Reported" to "Adjusted" EPS (Unaudited) Nine months ended February 29, 2020 February 28, 2019 Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): Reported Earnings per Diluted Share $ 1.50 $ 1.00 Inventory
Slide 41: EBIT: Construction Products Segment
EBIT** (Non-GAAP Measure): Construction Products Segment (As Reported) ($ in thousands and percent data) (Unaudited) Three months ended February 29, 2020 February 28, 2019 (Loss) Before Income Taxes $ (478) $ (4,025) Add: Interest Expense, Net* 2,130 2,489 EBIT** (non-GAAP measure) 1,652 (1,536) Inv
Slide 42: EBIT: Construction Products Segment
EBIT** (Non-GAAP Measure): Construction Products Segment (As Reported) ($ in thousands and percent data) (Unaudited) Nine months ended February 29, 2020 February 28, 2019 Income Before Income Taxes $ 139,324 $ 96,375 Add: Interest Expense, Net* 6,231 6,968 EBIT** (non-GAAP measure) 145,555 103,343 I
Slide 43: EBIT: Performance Coatings Segment
EBIT** (Non-GAAP Measure): Performance Coatings Segment (As Reported) ($ in thousands and percent data) (Unaudited) Three months ended February 29, 2020 February 28, 2019 Income Before Income Taxes $ 22,240 $ 14,365 Add: Interest Expense (Income), Net* (123) 62 EBIT** (non-GAAP measure) 22,117 14,42
Slide 44: EBIT: Performance Coatings Segment
EBIT** (Non-GAAP Measure): Performance Coatings Segment (As Reported) ($ in thousands and percent data) (Unaudited) Nine months ended February 29, 2020 February 28, 2019 Income Before Income Taxes $ 83,617 $ 44,990 Add: Interest Expense (Income), Net* (20) 401 EBIT** (non-GAAP measure) 83,597 45,391
Slide 45: EBIT: Consumer Segment
EBIT** (Non-GAAP Measure): Consumer Segment (As Reported) ($ in thousands and percent data) (Unaudited) Three months ended February 29, 2020 February 28, 2019 Income Before Income Taxes $ 29,798 $ 25,272 Add: Interest Expense, Net* 57 119 EBIT** (non-GAAP measure) 29,855 25,391 Inventory-related cha
Slide 46: EBIT: Consumer Segment
EBIT** (Non-GAAP Measure): Consumer Segment (As Reported) ($ in thousands and percent data) (Unaudited) Nine months ended February 29, 2020 February 28, 2019 Income Before Income Taxes $ 123,413 $ 118,078 Add: Interest Expense, Net* 219 417 EBIT** (non-GAAP measure) 123,632 118,495 Inventory-related
Slide 47: EBIT: Specialty Segment
EBIT** (Non-GAAP Measure): Specialty Segment (As Reported) ($ in thousands and percent data) (Unaudited) Three months ended February 29, 2020 February 28, 2019 Income Before Income Taxes $ 12,942 $ 16,115 Add: Interest Expense (Income), Net* 24 (135) EBIT** (non-GAAP measure) 12,966 15,980 Inventory
Slide 48: EBIT: Specialty Segment
EBIT** (Non-GAAP Measure): Specialty Segment (As Reported) ($ in thousands and percent data) (Unaudited) Nine months ended February 29, 2020 February 28, 2019 Income Before Income Taxes $ 55,031 $ 66,049 Add: Interest Expense (Income), Net* 6 (332) EBIT** (non-GAAP measure) 55,037 65,717 Inventory-r
Slide 49: EBIT & EBITDA (Non-GAAP Measures)
EBIT* & EBITDA (Non-GAAP Measures) *EBIT is defined as earnings before interest and taxes, while EBITDA is (In thousands) defined as earnings before interest, taxes, depreciation and 2015 (2) 2016 2017 2018 2019 amortization. We evaluate the profit performance of our segments Net income $ 228,328 $
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