A Unique Growth Opportunity f Sh for Sherwin‐Williams i Willi Chris Connor Chris Connor Chairman & CEO Sean Hennessy Sean Hennessy Bob Wells Bob Wells Senior Vice President, Senior Vice President, Finance & CFO Corporate Communications Financial Community Presentation – Thursday, May 12, 2011 Forward-Looking Forward Looking Statements The presentation today will contain “forward‐looking statements” Th i d ill i “f d l ki ” concerning the proposed acquisition of Comex. These forward‐looking statements are based upon management’s current expectations, estimates, assumptions and beliefs. Forward‐looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from such statements and from our historical results and experience. Any forward‐ looking statement speaks only as of today, and we have no obligation to looking statement speaks only as of today, and we have no obligation to update or revise any forward‐looking statement, whether as a result of new information, future events or otherwise. If you would like more information about the risks involved with forward‐looking statements, please see our SEC filings SEC filings. Financial Community Presentation – Thursday, May 12, 2011 Call Agenda Call Agenda • Transaction Summary • Who is Comex? • Why y does this acquisition q make sense? • What will the combined entity look like? • How will the deal be financed? • Other questions? 1 Financial Community Presentation – Thursday, May 12, 2011 Transaction Summary Transaction Summary • Sherwin-Williams to acquire Consorcio Comex, S.A. de d C.V. C V for f approximately i t l $2.34 $2 34 billion billi in i cash h – Expected to be EPS accretive in first 12 months – EPS dilutive in initial quarter q • Complements Sherwin-Williams’ growth strategy – Expands architectural paint business in Americas – Increases retail distribution in many markets where our store count is low • Completion of acquisition subject to customary regulatory approvals 2 Financial Community Presentation – Thursday, May 12, 2011 Who is Comex? • Founded in Mexico in 1952 • Total company sales of $1.4 $1 4 Billion • 66% in Latin America, 34% in U.S. and Canada • Respected family of brands • Second largest g specialty p y paint p store organization g in the Western Hemisphere - Over 3,300 points of sale in Mexico operated by 750 independent concessionaires - 240 company-operated stores in the United States 3 - 78 company-operated stores and 1500 independent d l dealers iin C Canada d Financial Community Presentation – Thursday, May 12, 2011 Who is Comex? Mexico U.S. and Canada Sales: $ $935M Sales: $ $488M Architectural Paint 64% Architectural Paint 91% Industrial 25% Building g Materials 3% 4 Resin ((other)) 5% Industrial 9% • ~75% of sales from Architectural Paint • ~20% of sales from Industrial Coatings Financial Community Presentation – Thursday, May 12, 2011 Why Comex Makes Sense Why Comex Makes Sense • Augments current business mix – Sales heavily skewed toward Architectural Paint; balance from 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 count is low: Mexico, western U.S. and Canada • Strengthens family of brands – Iconic I i brand b d iin M Mexico i – Contractor brand loyalty in U.S. and Canada 5 Financial Community Presentation – Thursday, May 12, 2011 y Why Comex Makes Sense Top 10 Paint Store Chains – North America YE 2011 Est. YE 2011 Est Count 6 1 Yr Change 3,450 +60 Akzo Nobel/ICI/Glidden PPG 558 393 Comex/Pro Paint Inc Comex/Pro Paint, Inc. 318 Kelly‐Moore 154 1,831 Dunn Edwards 109 Cloverdale/Rodda C o e da e/ odda 104 0 Diamond Vogel 67 Benjamin Moore 84 Vista 45 +4 +2 ‐21 21 ‐9 +1 +2 ‐1 0 ‐4 Gap: +86 +1,619 Source: Independent Research, Company Websites, Rauch Guide, Chain Store Guide ‐26 Financial Community Presentation – Thursday, May 12, 2011 Paint Stores Group p Store Penetration 7 Financial Community Presentation – Thursday, May 12, 2011 p Paint Stores Group + Comex Store Penetration Comex Operations General Color Wheel Frazee 8 Kwall Parker Financial Community Presentation – Thursday, May 12, 2011 Sherwin Williams + Comex Sherwin‐Williams + Comex Paint Stores Group Latin America Coatings Group 9 Financial Community Presentation – Thursday, May 12, 2011 Sherwin‐Williams 2011 Sales: $8.77 B Global Finishes Paint Stores Group Consumer Latin America 10 Financial Community Presentation – Thursday, May 12, 2011 Sherwin‐Williams + Comex Pro Forma 2011 Sales: $10.19B Global Finishes Paint Stores Group Consumer Latin America 11 • Strengthens our U.S. & Canadian Paint Stores business • Doubles our Latin American coatings business • Company-operated Compan operated stores, stores concessionaires and direct sales account for more than 75% of combined sales Financial Community Presentation – Thursday, May 12, 2011 a c a g g ts Financial Highlights • • • • • Acquisition for approximately $2.34 billion in cash Attractively priced at ~1.7x Sales Initial quarter dilutive / first 12 months accretive Fi Finance $2.0 $2 0 billion billi iin 5 5, 10 10, and d 30 year ttranches h Debt to EBITDA ratio – Currently 1.0x – At closing 3.0x – 2018 1.25x • Dividend Di id d payoutt ratio ti remains i consistent i t t • Stock buybacks reduced for two years 12 Financial Community Presentation – Thursday, May 12, 2011 Questions? Financial Community Presentation – Thursday, May 12, 2011