Presentation - Sherwin-Williams
Presentation - Sherwin-Williams
Presentation - Sherwin-Williams
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A Unique Growth Opportunityfor <strong>Sherwin</strong>‐<strong>Williams</strong>Chris ConnorSean Hennessy Bob WellsChairman & CEOSenior Vice President,Finance & CFOSenior Vice President,Corporate CommunicationsFinancial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Forward-Looking StatementsThe presentation today will contain “forward‐looking statements”concerning the proposed acquisition of Comex. These forward‐lookingstatements are based upon management’s current expectations, estimates,assumptions and beliefs. Forward‐looking statements are necessarilysubject to risks, uncertainties and other factors, many of which are outsideof our control, that could cause actual results to differ materially from suchstatements and from our historical results and experience. Any forward‐looking statement speaks only as of today, and we have no obligation toupdate or revise any forward‐looking statement, whether as a result of newinformation, future events or otherwise. If you would like more informationabout the risks involved with forward‐looking statements, please see ourSEC filings.Financial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Call Agenda• Transaction Summary• Who is Comex?• Why does this acquisition make sense?• What will the combined entity look like?• How will the deal be financed?• Other questions?1Financial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Transaction Summary• <strong>Sherwin</strong>-<strong>Williams</strong> to acquire Consorcio Comex, S.A.de C.V. for approximately $2.34 billion in cash– Expected to be EPS accretive in first 12 months– EPS dilutive in initial quarter• Complements <strong>Sherwin</strong>-<strong>Williams</strong>’ growth strategy– Expands architectural paint business in Americas– Increases retail distribution in many markets where ourstore count is low2• Completion of acquisition subject to customaryregulatory approvalsFinancial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Who is Comex?3• Founded in Mexico in 1952• Total company sales of $1.4 Billion• 66% in Latin America, 34% in U.S.and Canada• Respected family of brands• Second largest specialty paint store organization inthe Western Hemisphere- Over 3,300 points of sale in Mexico operated by 750independent concessionaires- 240 company-operated stores in the United States- 78 company-operated stores and 1500 independentdealers in CanadaFinancial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Who is Comex?Architectural Paint64%MexicoSales: $935MU.S. and CanadaArchitectural Paint91%Sales: $488MBuildingMaterials3%Resin (other)5%Industrial25%Industrial9%4• ~75% of sales from Architectural Paint• ~20% of sales from Industrial CoatingsFinancial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Why Comex Makes Sense• Augments current business mix– Sales heavily skewed toward Architectural Paint; balancefrom Industrial and Building Materials– Improves scale throughout Latin America– Provides technology development / transfer opportunities• Expands retail distribution– Increases store coverage in markets where our store countis low: Mexico, western U.S. and Canada• Strengthens family of brands– Iconic brand in Mexico– Contractor brand loyalty in U.S. and Canada5Financial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Why Comex Makes SenseTop 10 Paint Store Chains –North AmericaCountYE 2011 Est.1 Yr Change3,450 +606Akzo Nobel/ICI/Glidden 558 +4PPG 393 +2Comex/Pro Paint, Inc. 318 ‐21Kelly‐Moore 154 ‐91,831Dunn Edwards 109 +1‐26Cloverdale/Rodda e/ odda 104 +2Diamond Vogel 67 ‐1Benjamin Moore 84 0Vista 45 ‐4Gap: +1,619 +86Source: Independent Research, Company Websites, Rauch Guide, Chain Store GuideFinancial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Paint Stores GroupStore Penetration7Financial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Paint Stores Group + ComexStore Penetration8Comex OperationsGeneralColor WheelFrazeeKwalParkerFinancial Community <strong>Presentation</strong> – Thursday, May 12, 2011
<strong>Sherwin</strong>‐<strong>Williams</strong> + ComexPaint Stores GroupLatin America Coatings Group9Financial Community <strong>Presentation</strong> – Thursday, May 12, 2011
<strong>Sherwin</strong>‐<strong>Williams</strong>2011 Sales: $8.77 BPaint Stores GroupGlobal FinishesConsumerLatin America10Financial Community <strong>Presentation</strong> – Thursday, May 12, 2011
<strong>Sherwin</strong>‐<strong>Williams</strong> + ComexPro Forma 2011 Sales: $10.19BPaint Stores GroupGlobal FinishesConsumerLatin America11• Strengthens our U.S. & Canadian Paint Stores business• Doubles our Latin American coatings business• Company-operated operated stores, concessionaires and direct salesaccount for more than 75% of combined salesFinancial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Financial ca Highlightsg 12• Acquisition for approximately $2.34 billion in cash• Attractively priced at ~1.7x Sales• Initial quarter dilutive / first 12 months accretive• Finance $2.0 billion in 5, 10, and 30 year tranches• Debt to EBITDA ratio– Currently 1.0x– At closing 3.0x– 2018 1.25x• Dividend id d payout ratio remains consistentt• Stock buybacks reduced for two yearsFinancial Community <strong>Presentation</strong> – Thursday, May 12, 2011
Questions?Financial Community <strong>Presentation</strong> – Thursday, May 12, 2011
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