Slides
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Q2 2025 Results July 22, 2025
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12Q 2025 Results (July 22, 2025) Certain statements contained in this presentation constitute “forward- looking statements” within the meaning of federal securiti es laws. These forward-looking statements are based upon management’s current expectations, predictions, estimates, assumptions and beliefs concerning future events and conditions and m ay discuss, among other things, anticipated future performance (including sales and earnings), expected growth, future business plans and the costs and potential liability for environmental -related matters and lead pigment and lead-based paint litigation. Any statement that is not historical in nature is a forward- looking statement and may be identified by the use of words and phrases such as “anticipate,” “aspire,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “potential,” “project,” “seek,” “should,” “strive,” “target,” “will,” or “would,” or the negati ve thereof or comparable terminology. Readers are cautioned not to place undue reliance on any forward- looking statements. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside our control, that could cause actual results to differ materially from such statements and from our historical result s, performance and experience. These risks, uncertainties and other factors include such things as: general business and economic conditions in the United States and worldwide; inflation rates, interes t rates, unemployment rates, labor costs, healthcare costs, recessionary conditions, geopolitical conditions, terrorist activity, armed conflicts and wars, public health crises, pandemics, outbreaks of disease, and supply chain disruptions; shifts in consumer behavior driven by economic downturns in cyclical segments of the economy; shortages and increases in the cost of raw materials and energy; c atastrophic events, adverse weather conditions and natural disasters (including those that may be related to climate change); the loss of any of our largest customers; increased competition or f ailure to keep pace with developments in key competitive areas of our business; cybersecurity incidents and other disruptions to our information technology systems; our ability to attract, retain, d evelop and progress a qualified global workforce; our ability to successfully integrate past and future acquisitions into our existing operations; risks and uncertainties associated with our expansion into and our operations in Asia, Europe, South America and other foreign markets; policy changes affecting international trade, including import/export restrictions and tariffs; our ability to achieve our strategies or expectations relating to sustainability considerations, including as a result of evolving legal, regulatory, and other standards, processes and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite suppliers, energy sources, or financing, and changes in carbon markets; damage to our business, reputation, image or brands due to negative publicity; the infringement or loss of our intellectual property rights or the theft or unauthorized use of our trade secrets or other confidential business information; a weakening of global credit markets or changes to our credit ratings; our ability to generate cash to service our indebtedness; fluctuations in foreign currency exchange rates and changing monetary policies; our ability to comply with a variety of complex U.S. and non- U.S. laws, rules and regulations; increases in tax rates, or changes in tax laws or regulations; our ability to comply with numerous, compl ex and increasingly stringent domestic and foreign health, safety and environmental (including related to climate change and chemical management) laws, regulations and requirements; our liability related to environmental investigation and remediation activities at some of our currently- and formerly-owned sites; the nature, cost, quantity and outcome of pending and future litigation, including lead pigment and lead- based paint litigation; and the other risk factors discussed in Part 1, Item 1A of our Annual Report on Form 10- K for the fiscal year ended December 31, 2024 and our other reports filed with the SEC. Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that m ay affect future results and that the above list should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obl igation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law. FORWARD-LOOKING STATEMENTS
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22Q 2025 Results (July 22, 2025) Consolidated sales within guidance range – growth in Paint Stores Group offset by continued softness in Consumer Brands Group and Performance Coatings Group Gross margin expanded 60 basis points to 49.4% – 12 th consecutive quarter of YoY gross margin expansion SG&A increase driven by broader restructuring initiative, sooner than anticipated building transition costs and continued targeted growth investments in Paint Stores Group given heightened share gain opportunities Excluding restructuring costs, building costs and acquisition-related amortization expense, SG&A costs increased by 3.8% in the quarter Adjusted EPS declined 8.6% to $3.38/share driven by previously guided to higher non-operating costs, sooner than anticipated building transition costs and targeted growth investments Returned $716 million to shareholders through share repurchases and dividends in the quarter ($ in millions, except per share data) 2Q 2025 2Q 2024 % Change Sales $6,314.5 $6,271.5 0.7% Gross Profit $3,118.3 $3,063.4 1.8% Gross Margin 49.4% 48.8% +60 bps Reported EPS $3.00 $3.50 -14.3% Adjusted EPS (1) $3.38 $3.70 -8.6% EBITDA (1) $1,260.8 $1,437.5 -12.3% % of Sales 20.0% 22.9% -290 bps Adjusted EBITDA (1) $1,319.8 $1,437.5 -8.2% % of Sales 20.9% 22.9% -200 bps Note: All comparisons are to the second quarter of the prior year, unless otherwise noted. Note: LSD/MSD/HSD = low, mid or high single digit %. DD = double digit %. (1) This is a non-GAAP financial measure. Reconciliation from reported EPS to Adjusted EPS and Net income to Adjusted EBITDA provided in Appendix. 2Q 2025 FINANCIAL PERFORMANCE OVERVIEW Our results include sooner than anticipated new building costs of ~$40 million pre-tax ($0.12/share) and previously anticipated higher year-over-year non- operating costs of ~$75 million pre-tax ($0.23/share).
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32Q 2025 Results (July 22, 2025) Sales up 2.3%: +MSD contribution from price/mix, volume -LSD – Protective and marine strongest growth; driven by energy and high- performance flooring – Residential repaint continued above market performance led by continued growth investments – New residential and commercial grew slightly led by new account growth – Property maintenance declines driven by continued delays in capex projects YoY segment profit increased, inclusive of targeted growth investments Res Repaint New Residential Commercial Property Maintenance DIY Protective & Marine 2Q-25 sales vs. 2Q-24 sales ($ in millions) 2Q 2025 2Q 2024 % Change Sales $3,702.2 $3,619.9 2.3% Segment Profit $916.5 $907.1 1.0% Segment Margin 24.8% 25.1% -30 bps +MSD +HSD-LSD Note: All comparisons are to the second quarter of the prior year, unless otherwise noted. Note: LSD/MSD/HSD = low, mid or high single digit %. DD = double digit %. PAINT STORES GROUP (PSG) -LSD+LSD +LSD
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42Q 2025 Results (July 22, 2025) Note: All comparisons are to the second quarter of the prior year, unless otherwise noted. Note: LSD/MSD/HSD = low, mid or high single digit %. DD = double digit %. (1) This is a non-GAAP financial measure. Adjusted segment profit equals Segment profit excluding the impact of adjustments management believes enhances investors’ understanding of operating performance; reconciliation from Segment profit to Adjusted segment profit provid ed in Appendix. +HSD NORTH AMERICA LATIN AMERICA EMEAI Sales down 4.1% driven by soft DIY demand in North America and an approximate 2% impact from unfavorable FX in Latin America, partially offset by sales growth in Europe – Soft existing home sales, lower consumer confidence and geopolitical dynamics contributing to continued market uncertainty Segment profit decreased primarily due to lower sales and supply chain inefficiencies due to lower volumes partially offset by good cost control Suvinil acquisition close remains on target for second half 2025 ($ in millions) 2Q 2025 2Q 2024 % Change Sales $809.4 $844.3 -4.1% Segment Profit $164.2 $204.4 -19.7% Segment Margin 20.3% 24.2% -390 bps Adjusted Segment Profit (1) $181.4 $220.4 -17.7% Adjusted Segment Margin 22.4% 26.1% -370 bps 2Q-25 sales vs. 2Q-24 sales -HSD CONSUMER BRANDS GROUP (CBG) -MSD +DD
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52Q 2025 Results (July 22, 2025) +HSD +DD +DD +DD +DD AUTO REFINISH COIL GENERAL INDUSTRIAL INDUSTRIAL WOOD PACKAGING ($ in millions) 2Q 2025 2Q 2024 % Change Sales $1,801.1 $1,806.4 -0.3% Segment Profit $245.1 $301.5 -18.7% Segment Margin 13.6% 16.7% -310 bps Adjusted Segment Profit (1) $302.3 $350.5 -13.8% Adjusted Segment Margin 16.8% 19.4% -260 bps Sales decreased 0.3%: -LSD impacts from unfavorable price/mix nearly fully offset by +LSD contribution from acquisitions and slightly positive contributions from volume Sales +MSD in Europe and +LSD in Asia and Latin America; sales -LSD in North America Strong growth in Packaging led by new accounts, share recovery and contributions from an acquisition Coil grew slightly inclusive of an acquisition: tariff related uncertainty negatively impacting demand Auto Refinish sales down slightly: new account wins nearly fully offset by soft core business and -LSD headwind from unfavorable FX General Industrial declines continue to be driven by softness in heavy equipment demand Industrial Wood sales decline: residential end markets remain challenging Segment profit decreased primarily due to increased costs to support sales, and a prior year gain on a sale of assets which did not repeat in the quarter 2Q-25 sales vs. 2Q-24 sales -LSD-LSD +DD PERFORMANCE COATINGS GROUP (PCG) Note: All comparisons are to the second quarter of the prior year, unless otherwise noted. Note: LSD/MSD/HSD = low, mid or high single digit %. DD = double digit %. (1) This is a non-GAAP financial measure. Adjusted segment profit equals Segment profit excluding the impact of adjustments management believes enhances investors’ understanding of operating performance; reconciliation from Segment profit to Adjusted segment profit provid ed in Appendix. -MSD +LSD
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62Q 2025 Results (July 22, 2025) Operating Cash Flow ($ in millions) STRONG FINANCIAL POSITION 6/30/2025 Cash $269.8 Liquidity Total Credit Facilities $4,000.0 (Less Amount Utilized) (1,765.1) Net Credit Available $2,234.9 6/30/2025 Total Debt / TTM EBITDA (2) 2.5x Net Debt (3) / TTM EBITDA (2) 2.4x Near-Term Debt Maturities (1) ($ in millions) Selected Financial Ratios Cash & Liquidity Position ($ in millions) $1,112.6 $1,202.9 2Q 2025 2Q 2024 $800 $350 $1,500 $400 $800 2025 2026 2027 2028 2029 (1) Full debt maturity schedule provided in Appendix. (2) This is a non-GAAP financial measure. Reconciliation from Net income to EBITDA provided in Appendix. (3) Net debt equals total debt outstanding, net of Cash and cash equivalents.
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72Q 2025 Results (July 22, 2025) Third Quarter 2025 Sales Up or down low-single digit percentage Foreign exchange: less than -1.0% Segments PSG: up low-single digit percentage CBG: down mid to high-single digit percentage PCG: up or down low-single digit percentage GAAP Earnings Per Share: $10.11-$10.41 Includes acquisition-related amortization expense of $0.77 per share and restructuring expenses of $0.32 per share Adjusted earnings per share: $11.20-$11.50 Raw materials: flat vs. prior year Capital expenditures: ~$730 million total, inclusive of ~$300 million for new buildings SG&A expenses: up low-single digit percentage Interest expense: ~$465 million Depreciation and amortization: ~$325 million and ~$330 million, respectively Tax rate: low 20s percent Updated Full Year 2025 Sales Up or down low-single digit percentage Segments PSG: up low-single digit percentage CBG: down mid to high-single digit percentage PCG: flat to up low-single digit percentage GUIDANCE Note: Please refer to the following slide for additional details on full year 2025 guidance.
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82Q 2025 Results (July 22, 2025) Updated 2025 Sales Guidance Updated 2025 Full-Year Expense Guidance UPDATED 2025 GUIDANCE ADDITIONAL DETAILS & KEY COMPONENTS Volume Price / Mix FX Acq. / Div. Total Sales Paint Stores Group -LSD +LSD to +MSD NM NM +LSD Consumer Brands Group -LSD to -MSD -LSD -LSD NA -MSD to -HSD Performance Coatings Group Flat to +LSD -LSD Flat +LSD -LSD to +LSD Consolidated Flat to -LSD +LSD Flat Flat -LSD to +LSD SG&A expenses up low-single digit percentage, inclusive of ~$95 million (1) related to new buildings and low-single digit targeted Paint Stores Group growth investments Interest expense of ~$465 million, including $20 million (1) related to new HQ financing, as well as $30 million related to refinancing of 2024 and 2025 debt Other general expense increases by ~$100 million, including a ~$25 million increase year-over-year in environmental provisions, gain on sale or disposition of assets of ~$50 million in 2024 that we do not expect to repeat in 2025 and unfavorable FX losses; $96 million increase YoY in 1H 2025 Current Economic Backdrop – SOFTER FOR LONGER Home Mortgage Rates: Remain elevated near 7%; greater than 60% of outstanding mortgages are less than 4%. In June, Fannie Mae forecasted rates to end 2025 at around 6.5%, above prior forecast of 6.1%. U.S. Fed Interest Rate Cuts: Likelihood unclear. Too late to influence 2025 demand. US Consumer Confidence Index: Decreased sequentially in June and has been below 100 baseline level every month in 2025 since January. Housing Affordability: Remains challenging for many buyers given elevated home prices and high mortgage rates. Single Family Housing Starts: Down year-over-year for 6 straight months. Multi-Family Starts: Extended period of soft starts in 2024 resulting in soft completions through 2025. Existing Home Sales: Down year-over-year for 3 consecutive months. Leading Indicator of Remodeling Activity (LIRA): Slower levels of growth expected for 2026. Architectural Billing Index: Negative reading 21 of last 22 months for commercial construction projects. US Manufacturing PMI (ISM): In contraction March through June. Eurozone, Brazil, ASEAN Manufacturing PMI (S&P): In contraction. China choppy. Tariffs: Impact of August 1 reinstatement unclear. U.S. household debt: At record levels. Rising credit card and auto loan delinquencies. (1) Total 2025 costs for new buildings are ~$115 million, which includes ~$95 million of SG&A expenses and ~$20 million of Inter est expense. Note: NM = not meaningful, NA = not applicable
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2Q 2025 Results (July 22, 2025) 9 APPENDIX
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102Q 2025 Results (July 22, 2025) (1) Interest rate reflects the impact of a cross-currency swap which pays EUR and receives USD interest at fixed rates. (2) "Other" long-term debt is comprised of unamortized premiums, discounts and issuance costs. 84% 16%Fixed Floating Fixed vs. Floating Rate Debt Maturities of Long-Term Debt $800 $350 $500 $500 $300 $650 $1,250 $550 $500 $500 $1,500 $400 $800 $450 2025 2026 2027 2028 2029 2030 2031 2032 … 2042 … 2045 2046 2047 2048 2049 2050 2051 2052 USD EUR DEBT SUMMARY AS OF JUNE 30, 2025 6/30/2025 $ in millions Balance Int. Rate Short-Term: Domestic 1,695.1$ 4.62% Non-Domestic 11.6 2.97% Total Short-Term Borrowings 1,706.7$ 4.61% Long-Term: 10-year, 3.45% notes due 2025 400.0 3.45% 3-year, 4.25% notes due (1) 2025 400.0 3.62% 10-year, 3.95% notes due 2026 350.0 3.95% 10-year, 3.45% notes due (1) 2027 1,500.0 2.59% 3-year, 4.55% notes due (1) 2028 400.0 4.27% 10-year, 2.95% notes due (1) 2029 800.0 2.02% 10-year, 2.30% notes due 2030 500.0 2.30% 7-year, 4.80% notes due (1) 2031 450.0 4.22% 10-year, 2.20% notes due 2032 500.0 2.20% 30-year, 4.00% notes due 2042 300.0 4.00% 30-year, 4.40% notes due 2045 250.0 4.40% 30-year, 4.55% notes due 2045 400.0 4.55% 30-year, 4.50% notes due 2047 1,250.0 4.50% 30-year, 3.80% notes due 2049 550.0 3.80% 30-year, 3.30% notes due 2050 500.0 3.30% 30-year, 2.90% notes due 2052 500.0 2.90% Promissory Notes Various 0.1 0.53% Other (2) (70.5) 0.00% Total Long-Term Debt 8,979.6$ 3.37% Total Debt 10,686.3$ 3.57%
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112Q 2025 Results (July 22, 2025) (1) Acquisition-related amortization expense, which is included within Selling, general and administrative expenses, consists of the amortization of intangible assets related to the Valspar acquisition. These intangible assets are primarily customer relationships and intellectual property and are being amorti zed over their remaining useful lives. Valspar acquisition-related amortization expense is adjusted due to its significance as a result of the purchase price assigned to finit e-lived intangible assets at the date of acquisition and the related impact on underlying business performance and trends. While these intangible assets contribute to the Company ’s revenue generation, the related revenue is not excluded. REGULATION G RECONCILIATION ADJUSTMENTS TO SEGMENT PROFIT ($ in millions) Paint Stores Group Consumer Brands Group Performance Coatings Group Admin Consolidated Net sales 3,702.2$ 809.4$ 1,801.1$ 1.8$ 6,314.5$ Segment profit 916.5 164.2 245.1 (340.1) 985.7 % of Net sales 24.8% 20.3% 13.6% NM 15.6% Severance and other restructuring expenses - 1.7 8.2 49.1 59.0 Acquisition-related amortization (1) - 15.5 49.0 - 64.5 Adjusted Segment Profit 916.5$ 181.4$ 302.3$ (291.0)$ 1,109.2$ % of Net sales 24.8% 22.4% 16.8% NM 17.6% Three Months Ended June 30, 2025 Paint Stores Group Consumer Brands Group Performance Coatings Group Admin Consolidated 3,619.9$ 844.3$ 1,806.4$ 0.9$ 6,271.5$ 907.1 204.4 301.5 (239.6) 1,173.4 25.1% 24.2% 16.7% NM 18.7% - - - - - - 16.0 49.0 - 65.0 907.1$ 220.4$ 350.5$ (239.6)$ 1,238.4$ 25.1% 26.1% 19.4% NM 19.7% Three Months Ended June 30, 2024
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122Q 2025 Results (July 22, 2025) (1) The tax effect is calculated based on the statutory rate and the nature of the item, unless otherwise noted. (2) Acquisition-related amortization expense, which is included within Selling, general and administrative expenses, consists of the amortization of intangible assets related to the Valspar acquisition. These intangible assets are primarily customer relationships and intellectual property and are being amortized over their remaining useful lives. Valspar acquisition-related amortization expense is adjusted due to its significance as a result of the purchase price assigned to finite- lived intangible assets at the date of acquisition and the related impact on underlying business performance and trends. While these intangible assets contribute to the Company’s revenue generation, the related revenue is not excluded. REGULATION G RECONCILIATION ADJUSTED EPS and EBITDA Pre-Tax Tax Effect (1) After-Tax Pre-Tax Tax Effect (1) After-Tax Diluted net income per share 3.00$ 3.50$ Severance and other restructuring expenses 0.23$ 0.05$ 0.18 -$ -$ - Acquisition-related amortization (2) 0.26 0.06 0.20 0.26 0.06 0.20 Adjusted diluted net income per share 3.38$ 3.70$ Three Months Ended Three Months Ended June 30, 2025 June 30, 2024 ($ in millions) Three Months Ended June 30, 2025 Three Months Ended March 31, 2025 Three Months Ended December 31, 2024 Three Months Ended September 30, 2024 Three Months Ended June 30, 2024 Net income 754.7$ 503.9$ 480.1$ 806.2$ 889.9$ Interest expense 112.4 103.8 98.5 103.4 110.8 Income taxes 231.0 149.1 135.5 216.6 283.5 Depreciation 79.3 79.9 80.1 74.4 71.8 Amortization 83.4 81.0 81.8 81.2 81.5 EBITDA 1,260.8$ 917.7$ 876.0$ 1,281.8$ 1,437.5$ Severance and other restructuring expenses 59.0 19.3 - - - Adjusted EBITDA 1,319.8$ 937.0$ 876.0$ 1,281.8$ 1,437.5$ % to Net sales: EBITDA 20.0% 17.3% 16.5% 20.8% 22.9% Adjusted EBITDA 20.9% 17.7% 16.5% 20.8% 22.9% Net sales for EBITDA and Adjusted EBITDA % calculation 6,314.5$ 5,305.7$ 5,297.2$ 6,162.5$ 6,271.5$