Sherwin-Williams Company (the) · NYSE:SHW
Sherwin-Williams Company (the) — The Sherwin-Williams Company — Investor Presentation (2011)
29 slides from Sherwin-Williams Company (the)'s investor presentation, Nov 25, 2011
Slide 1: Investor Presentation
Investor Presentation N-4 THE SHERWIN-WILLIAMS COMPANY
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-Looking 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 Market Overview • Sherwin Sherwin-Williams Williams Overview • Paint Stores • Consumer • Global Finishes • Sherwin-Williams Financial Overview The Sherwin-Williams Company - 2nd Quarter 2011
Slide 4: 2010 Coatings Industry
2010 Coatings Industry Global Mix by Category Total Coatings Special 2010 Purpose 6.6 6 6 Billion Billi Gallons G ll (+4%) 21% ~90 Billion Dollars (+5%) Architectural 41% OEM Product Finishes 38% Source: Kusumgar, Nerlfi & Growney; Segment Percents Based on Dollars The Sherwin-Williams Company - 2nd
Slide 5: 2010 Coatings Industry: Global Demand
2010 Coatings Industry Global Demand (US$) Europe 29% 29% Asia-Pacific 40% Americas 36% 28% 33% Rest of World All Coatings 3% 2% Architectural Coatings The Sherwin-Williams The Sherwin-Williams Company Company 2nd Quarter - 2nd -Quarter 2011 2011
Slide 6: 2010 Coatings Industry: Top Global Manufacturers
2010 Coatings Industry Top Global Manufacturers Top 10 suppliers Sherwin- Sherwin- represent ~60% Williams share of the global coatings market. Source: Kusumgar, Nerlfi & Growney, Company Data The Sherwin-Williams Company - 2nd Quarter 2011
Slide 7: U.S. Coatings Industry
U S Coatings Industry U.S. Sales ($) Mix by Category Total Coatings Special 2010 Purpose 1.15 1 15 Billi Billion Gallons G ll (+5 8%) (+5.8%) 22% 18.0 Billion Dollars (+7.7%) Architectural 49% OEM Product P d t Finishes 29% Source: U.S. Department of Commerce; Segment Percents Based on Dollars The S
Slide 8: U.S. Coatings Industry: Architectural Paint Demand Drivers
U S Coatings Industry U.S. Architectural Paint Demand Drivers Residential 2Q11 vs. 2Q10 2Q11 vs. 1Q11 New Construction (SA) Existing Home Turnover Residential Remodeling Non--Residential Non New Construction (SA) Non--Residential Maintenance Non The Sherwin-Williams Company - 2nd Quarter 2011
Slide 9: U.S. Coatings Industry: Industrial Coatings Demand Drivers
U S Coatings Industry U.S. Industrial Coatings Demand Drivers 1Q11 vs. 1Q10 1Q11 vs. 4Q10 OEM Product Finishes Industrial Production S Special i lPPurpose Infrastructure Investment (P&M) Vehicle Miles Driven (Auto Refinish) The Sherwin-Williams Company - 2nd Quarter 2011
Slide 10: Favorable Customer Mix
Favorable Customer Mix DIY Contractor Shift will Continue 45% 59% 55% 41% Contractor DIY Source: U.S. Dept of Commerce MA28F Report/Company Estimates The Sherwin-Williams Company - 2nd Quarter 2011
Slide 11: Company Overview: Financial Highlights
Company Overview Financial Highlights 2009 2010 Net Sales $7.09M $7.78M EBITDA $834M $924M Income $436M $462M % Sales 6.1% 5.9% Earnings Per Share $3.78 $4.21 Net Operating Cash $859M $707M Dividend Per Share $1 42 $1.42 $1 44 $1.44 Return on Assets 10.1% 8.9% Return on Shareholder Equity 27.1% 31.0
Slide 12: Company Overview: Revenue & Profit by Segment - 2010
Company Overview Revenue & Profit by Segment - 2010 Paint Stores Global Sales: $4.38 Billion Profit: $619.6 $619 6 Million Sales: $2.09 $2 09 Billion Profit %: 14.1 Profit: $123.7 Million Profit %: 5.9 Sales: $1.30 $1 30 Billion Profit: $204.0 Million Profit %: 15.7 Consumer Controlled Distribution
Slide 13: Paint Stores Group: Top Paint Store Chains
Paint Stores Group Top 10 Paint Store Chains – North America YE 2010 Est. Est Count 1 Yr Change 3,390 +36 Akzo Nobel/ICI/Glidden 495 -12 PPG 392 +2 Comex/Pro Paint, Inc. 334 +1 K ll M Kelly-Moore 162 -1 1 Cloverdale/Rodda 111 1,784 +10 +3 Dunn Edwards 108 +5 Diamond Vogel 68 -1 B j i M Benjamin Moor
Slide 14: Paint Stores Group: Store Penetration
Paint Stores Group Store Penetration Households per Store Over 50,000 40,000 - 50,000 30,000 - 40,000 Under 30,000 The Sherwin-Williams Company - 2nd Quarter 2011
Slide 15: Paint Stores Group: Voluntary Turnover
Paint Stores Group Voluntary Turnover Manager 2.9% Assistant Mgr. 8.0% Sales Rep 4.8% The Sherwin-Williams Company - 2nd Quarter 2011
Slide 16: Consumer Group: End to End Supply Chain
Consumer Group End to End Supply Chain • 26 Manufacturing Sites • 10 Distribution Service Centers • 400 Tractors / 1 1,200 200 Trailers • More than 6,000 Employees The Sherwin-Williams Company - 2nd Quarter 2011
Slide 17: 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 - 2nd Quarter 2011
Slide 18: 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 - 2nd Quarter 2011
Slide 19: Consumer Group: U.S. Outlet Penetration
Consumer Group U.S. Outlet Penetration 56,000 Total U.S. Paint & g Outlets Coatings 38,000 Consumer Segment Customers Sherwin-Williams Stores 3,400 The Sherwin-Williams Company - 2nd Quarter 2011
Slide 20: Global Finishes Group
Global Finishes Group Automotive Aerospace Architectural Protective Marine OEM Finishes The Sherwin-Williams Company - 2nd Quarter 2011
Slide 21: 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 • Architectural • OEM Product Finish • Protective & Marine • Automotive • OEM Product
Slide 22: Consolidated Gross Profit
Consolidated Gross Profit $ Gross Profit % of Sales 4,000 3,598 3,499 3,481 3,413 3,263 3,500 3,080 3,000 2,701 $ Millions 2,455 2,500 45.4 46.0 2 000 2,000 44 2 44.2 44.9 44.8 42.8 43.7 43.8 1,500 1,000 500 0 2003 2004 2005 2006 2007 2008 2009 2010 The Sherwin-Williams Company - 2nd Quarter 2011
Slide 23: Consolidated Gross Profit and Raw Material Index
Consolidated Gross Profit $ Gross Profit % of Sales Raw Material Index 4,000 3,598 3,499 3,481 3,413 3,263 3,500 3,080 3,000 2,701 $ Millions 2,455 2,500 1.8 45.4 46.0 2 000 2,000 44 2 44.2 44.9 44.8 16 1.6 42.8 43.7 43.8 1,500 1.4 1,000 12 1.2 500 0 1.0 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 24: Selling, General & Admin Expense
Selling Selling, General & Admin Expense $ SG&A 2,728 3,000 2,597 2,644 2,535 % to Sales 2,513 2,326 2,500 , 2,069 2,000 Millions 1,500 35 7 35.7 $M 35.1 33.8 33.1 1,000 32.4 32.2 32.4 500 0 2004 2005 2006 2007 2008 2009 2010 The Sherwin-Williams Company - 2nd Quarter 2011
Slide 25: Working Capital Ratio
Working Capital Ratio (Accounts Receivable + Inventory – Payables)/Sales 20% 13.8% 15% 12.5% 12.7% 11.5% 11.7% 11.5% 11.9% 11.0% 10.7% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 The Sherwin-Williams Company - 2nd Quarter 2011
Slide 26: Uses of Cash
Uses of Cash 2006-2010 ($ Millions) 5-Year Net Operating Cash: $4,132.3 Capital Expenditures $709.5 Treasury Stock Purchases $781.7 Cash Dividends $2,473.0 $715 9 $715.9 Acquisitions The Sherwin-Williams Company - 2nd Quarter 2011
Slide 27: Stock Repurchase
Stock Repurchase 13.20 14.00 12.00 9.00 Shares 10.00 7.98 8.10 7.25 6 60 6.60 Millions of S 8 00 8.00 5.60 5.00 6.00 4.00 M 2.00 0.00 2003 2004 2005 2006 2007 2008 2009 2010 Avg. Common Shares Outstanding 147.0 144.7 141.1 137.3 130.9 119.3 115.4 108.2 A Avg. P Price/Share i /Sh $30 28 $30.28 $40 $4
Slide 28: Total Debt : EBITDA Ratio
Total Debt : EBITDA Ratio 83% 84% 88% 98% 113% 1148 1200 1047 946 924 1000 834 1045 ($ in Miillions) 800 965 875 834 818 600 400 200 0 2006 2007 2008 2009 2010 Total Debt EBITDA The Sherwin-Williams Company - 2nd Quarter 2011
Slide 29: Dividends Per Share 1979 – 2010
Dividends Per Share 1979 – 2010 1.44 $1.50 1.401.42 $1.40 $1.30 1.26 $1.20 $1.10 1.00 $1.00 $0.90 .82 $0.80 .68 $0 70 $0.70 .60 60 .62 62 .54 .58 $0.60 .48 $0.50 .40.45 $0.40 .32.35 .22 .25 .28 $0.30 .18 .19 19 .21 $0.20 .10 .12 .13 14 .16 13 .14 16 .06 .08 $0.10 .01 .04 .05 $0.00 1979 1981 1983 198
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