Morgan Stanley Chemicals & Agriculture Conference

Transcription

1 Morgan Stanley Chemicals & Agriculture Conference November 15, 2017 Russell L. Gordon Vice President and Chief Financial Officer RPM INTERNATIONAL INC. 1

2 Forward-Looking Statements & Regulation G This presentation contains Forward-Looking Statements as defined in the Private Securities Litigation Reform Act of Actual results may differ materially from expectations and are subject to certain risks and uncertainties such as those described in RPM s periodic reports and statements filed with the Securities and Exchange Commission and available through the company s website, The company does not intend to update any forward-looking statements made in this presentation. This presentation includes certain company data that do not directly conform to generally accepted accounting principles, or GAAP, and certain company data that has been restated for improved clarity, understanding and comparability, or pro forma. All non-gaap data in this presentation are indicated by footnote. Tables reconciling such data with GAAP measures are available through our website, under Investor Information/Presentations. RPM INTERNATIONAL INC. 2

3 About RPM $5 billion SEGMENTS Consumer $1.7 billion (34%) Specialty $714 million (14%) Industrial $2.6 billion (52%) GROUPS Entrepreneurial Operating Philosophy Competitive Advantage of Leading Brands Balance Between Consumer and Industrial Markets Growth Strategy Balanced Between Internal Investment and Acquisitions Connections Creating Value Sustainable Shared Value RPM INTERNATIONAL INC. 3

4 Leading Brands Consumer Specialty Industrial RPM INTERNATIONAL INC. 4

5 Diverse INDUSTRIAL Global Brands 52% of net sales PRODUCT CATEGORIES Construction Sealants Roofing Systems Flooring Systems Corrosion Control Coatings FRP Gratings/Components Waterproofing Coatings Concrete Admixtures & Repair Fireproofing Coatings SEGMENT OVERVIEW Fragmented global markets Less cyclical repair & maintenance Low customer concentration 50% U.S. vs. 50% ROW RPM INTERNATIONAL INC. 5

6 Market-Leading CONSUMER Brands 34% of net sales PRODUCT CATEGORIES Small-Project Paints Primer-Sealers Caulks & Sealants Hobby & Craft Products Wood Stains & Finishes Rust-Preventative Paints Concrete Coatings SEGMENT OVERVIEW Value-added partner Market innovation leader Category management Higher retailer price points/margins Immediate full-chain distribution 80% U.S. vs. 20% ROW RPM INTERNATIONAL INC. 6

7 SPECIALTY Niche Businesses 14% of net sales PRODUCT CATEGORIES Exterior Insulating Finishes Fluorescent Pigments Powder Coatings Marine Coatings Wood Stains & Finishes Restoration & Cleaning Solutions Edible Coatings SEGMENT OVERVIEW Generate higher margins Serve smaller niche markets Independent, entrepreneurial 70% U.S. vs. 30% ROW RPM INTERNATIONAL INC. 7

8 Growth Drivers Acquisitions New Products Connections RPM INTERNATIONAL INC. 8

9 Key Requirements for Acquisitions Best home for Entrepreneurial Companies Niche businesses with leading brands Above average gross profit margins Entrepreneurial leadership that stays 70% product line integrations 30% stand-alone Achieve revenue synergies New channels New geographies RPM INTERNATIONAL INC. 9

10 FY Acquisition Review SEGMENT TYPE LEADERSHIP 17% 48% 30% 39% 35% 70% 61% Industrial Consumer Specialty Product Line Stand-Alone Remains Retired/ Integrated RPM INTERNATIONAL INC. 10

11 New Product Innovations SkyBEAM AlphaGuard RPM INTERNATIONAL INC. 11

12 Connections Creating Value: Euclid Group Global Construction Chemicals Business Recent Initiatives Increte secures Genting Casino project in Malaysia via Flowcrete Asia Euclid products launched in India via Flowcrete plant in Chennai New Viapol (Brazil) and Toxement (Colombia) plants to manufacture Flowcrete and RPM Belgium products RPM INTERNATIONAL INC. 12

13 Consistent Financial Performance RPM INTERNATIONAL INC. 13

14 44 Consecutive Years of Dividend Increases $1.25 $1.00 $0.75 $0.50 $0.25 Acquired Yield on Original Investment Today 2.5% 10 yrs. 5.2% 25 yrs. 12.2% Dividend per share +6.7% $0.32/qtr. 10/5/17 $2.0 billion Paid $0.00 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 Only 41 of all 19,000 U.S. publicly traded companies have an equal or better record The compounding benefit of reinvesting a growing cash dividend first envisioned by a $25 mm company in 1973 continues today in a $5 bb company paying out +$157 mm per year RPM INTERNATIONAL INC. 14

15 Consistent Financial Performance: Superior Shareholder Return Comparison of Cumulative Total Return Among RPM International Inc., the S&P 500 Index, a Current Peer Group and Prior Peer Group Outperform: S&P 500 by 70% Current Peers by 28% RPM Prior Peer Group RPM S&P 500 Prior Peer Group Current Peer Group Ten-year comparison based on $100 invested on 5/31/07 in stock or index including reinvestment of dividends. Fiscal year ending May 31. Prior Peer Group includes Akzo Nobel N.V., Ferro Corporation, GCP Applied Technologies Inc., H.B. Fuller Company, Masco Corporation, PPG Industries, Inc., and The Sherwin-Williams Company. Current Peer Group includes Akzo Nobel N.V., Axalta Coating Systems Ltd, Ferro Corporation, GCP Applied Technologies Inc., H.B. Fuller Company, Masco Corporation, PPG Industries, Inc., and The Sherwin- Williams Company. Current Peer Group S&P /07 5/08 5/09 5/10 5/11 5/12 5/13 5/14 5/15 5/16 5/17 RPM International Inc S&P Prior Peer Group Current Peer Group RPM INTERNATIONAL INC. 15

16 Consistent Financial Performance Consolidated Sales +1.3% +8.5% +11.7% +8.0% +7.3% +5.0% +4.8% +3.0% Net Income +39.4% +16.1% +11.5% +14.5% +20.9% +10.7% +9.8% -3.5% Note: Specialty Products Holding Corp. (SPHC) was deconsolidated on May 31, 2010 and reconsolidated on Jan. 1, Net income excludes adjusted items. RPM INTERNATIONAL INC. 16

17 Capitalism that Works for Everyone Hire the best people you can find. Create an atmosphere that will keep them. Then let them do their jobs. Frank C. Sullivan, 1947 RPM INTERNATIONAL INC. 17