The Sherwin-Williams Company (NYSE:SHW) Q1 2021 Earnings Conference Call April 27, 2021 11:00 AM ET Company Participants Jim Jaye - Senior Vice President-Investor Relations & Communications John Morikis - Chairman, President & Chief Executive Officer Al Mistysyn - Chief Financial Officer Conference Call Participants Ghansham Panjabi - Baird Bob Koort - Goldman Sachs Steve Byrne - Bank of America Jeff Zekauskas - JPMorgan P.J. Juvekar - Citi John McNulty - BMO Capital Markets David Begleiter - Deutsche Bank ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 Commission file number 1-04851 THE SHERWIN-WILLIAMS COMPANY (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Ohio 34-0526850 101 West Prospect Avenue Cleveland, Ohio 44115-1075 ...

The Sherwin-Williams Company (NYSE:SHW) Q4 2020 Earnings Conference Call January 28, 2021 11:00 AM ET Company Participants Jim Jaye - Senior Vice President of Investor Relations John Morikis - Chairman & Chief Executive Officer Al Mistysyn - Chief Financial Officer Conference Call Participants Ghansham Panjabi - Baird Jeff Zekauskas - JPMorgan Vincent Andrews - Morgan Stanley Greg Melich - Evercore ISI Mike Sison - Wells Fargo John McNulty - BMO Capital Markets Arun Viswanathan - RBC Capital Markets Steve B ...

4Q 2020 RESULTS & 2021 OUTLOOK JANUARY 28, 2021 Forward-Looking Statement This presentation may contain certain "forward-looking statements," as defined under U.S. federal securities laws. These forward-looking statements are based upon management's current expectations, estimates, assumptions and beliefs concerning future events and conditions. Readers and attendees are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements are necessarily subject to risks, unce ...

Financial Data and Key Metrics Changes - Consolidated sales for Q3 2020 increased by 5.2% to $5.12 billion, despite a negative currency impact of 0.9% [9] - Consolidated gross margin improved by 220 basis points to 47.9% [9] - Profit before tax rose by $165.8 million or 23.4% to $875.6 million [9] - Diluted net income per share increased by 24.4% to $7.66, with adjusted diluted earnings per share up 24.7% to $8.29 [10] - Net operating cash increased by 54.3% year-to-date to $2.56 billion [11] Business Line Data and Key Metrics Changes - The Americas Group and Consumer Brands Group sales were in line with updated guidance, while Performance Coatings Group sales were slightly better than expected [11] - Segment margin in the Americas Group improved to 25.1% due to operating leverage, favorable mix, and lower input costs [11] - Adjusted segment margin in Consumer Brands Group increased to 26.4% driven by strong topline growth and lower input costs [12] - Adjusted segment margin in Performance Coatings Group rose to 16% due to returning sales growth and lower input costs [13] Market Data and Key Metrics Changes - DIY business saw significant year-over-year growth, driven by stay-at-home projects during the pandemic [19] - Sales in new residential construction increased by mid-single digits, while residential repaint experienced double-digit growth [18] - Internationally, every region generated year-over-year growth, with double-digit increases in Europe and Australia [27] Company Strategy and Development Direction - The company plans to open approximately 55 new stores in the U.S. and Canada for the full year [24] - Continued investments in sales representatives, management trainees, and innovative products to drive growth [25] - Focus on leveraging e-commerce platforms to enhance sales [25] - The company aims to maintain a disciplined approach to M&A, targeting industrial space opportunities that fill technology gaps or strengthen regional presence [100] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamental strengths of end markets, despite challenges posed by the pandemic [44] - Anticipated fourth quarter consolidated net sales to increase by 3% to 7% compared to Q4 2019 [36] - Expectation of continued favorable product mix with growth in DIY and residential repaint segments [35] - Management acknowledged potential choppiness in demand recovery due to inventory replenishment dynamics [36] Other Important Information - The company approved a dividend of $1.34 per share, an increase of 18.6% over the previous year [43] - Capital expenditures for the year are guided at $280 million, including spending on new headquarters and R&D facilities [42] - The company resumed open market share purchases, investing $404 million in Q3 [43] Q&A Session Summary Question: Improvement in commercial and property maintenance sub-verticals - Management noted that improvement is due to jobs coming back online, with expectations for continued progress into 2021 [49] Question: Difference in DIY growth rates between stores and consumer brands - Management confirmed that DIY growth rates are very similar across both segments [72] Question: Factors behind margin increase - Management indicated that volume growth was the primary driver, followed by favorable product mix and pricing [120] Question: Scenario planning for potential COVID resurgence - Management emphasized confidence in execution capabilities and the experience of their teams to adapt to changing conditions [122] Question: Capital allocation and M&A opportunities - Management reiterated a disciplined approach to capital allocation, with ongoing discussions for potential M&A targets in the industrial space [100]

3Q 2020 RESULTS & 2020 OUTLOOK OCTOBER 27, 2020 Forward-Looking Statement 2 This presentation contains certain "forward-looking statements," as defined under U.S. federal securities laws, with respect to sales, earnings and other matters. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "could," "plan," "goal," "potential," "seek," "intend" or "anticipate" or the negative thereof or comparable terminology. These for ...

2020 INVESTOR PRESENTATION Forward-Looking Statements This presentation may contain certain "forward-looking statements," as defined under U.S. federal securities laws. These forward-looking statements are based upon management's current expectations, estimates, assumptions and beliefs concerning future events and conditions. 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 ...

Financial Data and Key Metrics Changes - Consolidated sales for Q2 2020 decreased by 5.6% to $4.6 billion, with an estimated negative impact from COVID-19 of approximately 8% [7][11] - Consolidated gross margin increased by 330 basis points to 48% from 44.7% [7] - Profit before tax increased by $71.7 million or 10.6% to $747.4 million [7] - Diluted net income per share increased by 28.8% to $6.48 from $5.03 [7] - Adjusted diluted earnings per share increased by 8.1% to $7.10 from $6.57 [8] - Net operating cash increased by 42% year-to-date to $1.07 billion [8] Business Segment Data and Key Metrics Changes - The Americas Group segment margin improved to 23.8% of sales, driven by favorable customer and product mix, lower input costs, and reduced spending [9] - Consumer Brands Group adjusted segment margin increased to 26.5% of sales, reflecting nearly 22% top line growth and lower input costs [9] - Performance Coatings Group adjusted segment margin decreased to 13.6% of sales, with lower input costs offsetting some sales decline [9] Market Data and Key Metrics Changes - DIY business continued to grow at an unprecedented pace throughout the quarter, with new residential and residential repaint showing positive growth in June [13][16] - Exterior paint sales increased by mid-single-digit percentage, while interior paint sales decreased by low-single-digit percentage but improved throughout the quarter [14] - Asia was the strongest performer in the Performance Coatings Group, down by a low-single-digit percentage, while all other regions were down by double-digit percentages [18] Company Strategy and Development Direction - The company plans to open approximately 50 new stores in 2020 and continues to invest in e-commerce and innovative products [15][22] - Focus on capturing current opportunities and delivering above-market growth as economies shift from containment to recovery [21][29] - Emphasis on maintaining strategic investments for long-term growth despite cost control measures [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted a faster-than-expected recovery in some end markets, with expectations for sequential improvement in demand for Q3 2020 [11][21] - The company anticipates Q3 consolidated net sales to be flat or down by a low-single-digit percentage compared to Q3 2019 [22] - Full-year 2020 sales guidance revised upward to approximately flat with last year, reflecting uncertainties in the operating environment [23] Other Important Information - The company has a strong balance sheet with $188 million in cash and approximately $3 billion of unused capacity under revolving credit facilities [26] - Capital expenditure guidance raised from $180 million to $280 million, primarily for architectural and packaging capacity expansions [27] - A cash dividend of $1.34 per share was approved, an increase of 18.6% over the previous year [27] Q&A Session All Questions and Answers Question: Update on long-term margin targets for Consumer Brands - Management is pleased with progress on operating margin within Consumer Brands and maintains a long-term target of 20% [32][34] Question: Comments on housing views and share gains - Management sees sequential improvement in residential repaint and is focused on driving share gains through customer relationships and solutions [41][42] Question: Impact of COVID-19 on demand in southern states - Management does not anticipate adjustments to sales floors and is prepared to serve customers wherever demand arises [75] Question: Trends in China and recovery prospects - Sales in Asia were down significantly due to COVID-19, with a slower recovery expected in the architectural business [82][83] Question: Outlook for commercial construction activity - Management is actively working to minimize potential impacts on commercial construction and is optimistic about future opportunities [86][87]

Financial Data and Key Metrics Changes - Sherwin-Williams reported a consolidated sales increase of 2.6% to $4.15 billion for Q1 2020, with a gross margin improvement to 45.6% from 42.9% [15][17] - Profit before tax rose by $93.4 million to $392.3 million, and diluted net income per share increased to $3.46 from $2.62 [15][16] - Adjusted diluted earnings per share increased by 13.3% to $4.08 from $3.60 [16] - Adjusted EBITDA increased by $48 million to $623.1 million, representing 15% of sales [17] Business Line Data and Key Metrics Changes - The Americas group achieved same-store sales growth of 7.4% and improved segment margin by 140 basis points [18] - The Consumer Brands Group and Performance Coatings Group also reported improved segment margin performance [18] Market Data and Key Metrics Changes - The company noted a significant near-term demand pause across most end markets due to the pandemic, with DIY markets being less affected [9][28] - In residential repaint, demand is expected to return gradually as social distancing measures ease [29] - New residential construction starts were strong at the beginning of the year, but cancellations have increased due to the pandemic [30] - The protective and marine segment saw a sharp decline in sales tied to oil and gas, which represents about 40% of its sales [34] Company Strategy and Development Direction - The company plans to continue strategic investments in stores, products, and e-commerce despite the pandemic [12] - Sherwin-Williams anticipates opening approximately 50 new stores in 2020 while focusing on enhancing productivity and innovative products [35] - The company is executing a comprehensive response to the pandemic, including cost reductions and adjustments to operations [11][24] Management's Comments on Operating Environment and Future Outlook - Management believes the current demand situation is a pause rather than a destruction of demand, with confidence in long-term fundamentals [12][26] - The second quarter is expected to be challenging, with a projected sales decrease of low to mid-teens percentage compared to Q2 2019 [45] - Full-year sales guidance has been revised to reflect uncertainties, with expectations of flat to low single-digit percentage decrease if conditions improve in Q3 [46] Other Important Information - The company has a strong balance sheet with $239 million in cash and $2.5 billion of unused capacity under its revolving credit facility [51] - Capital expenditures for 2020 have been reduced from $320 million to $180 million due to the pandemic [55] - The company has committed to maintaining its dividend increase of 18.6% to $1.34 per share [54] Q&A Session Summary Question: Key trends in the Americas group and DIY sustainability - Management noted that the DIY boost is largely due to customers spending more time at home, but expects a gradual shift back to professional services as social distancing measures ease [58][64] Question: Demand pause versus disruption - Management expressed confidence that the current demand situation is a pause, citing fundamental needs in housing and ongoing relationships with major builders [69][70] Question: Raw material costs and trends - Management expects lower year-over-year raw material costs due to declines in crude oil prices, with a focus on the petrochemical side impacting pricing [83] Question: Sales dip during curbside pickup - Management indicated that while sales dipped when transitioning to curbside pickup, there has been a week-to-week improvement in sales as the company adapts to the new environment [85][87] Question: CapEx reduction details - The significant CapEx reduction is primarily due to paring back capacity projects and monitoring demand trends, with plans to reinvest as conditions improve [108]

The Sherwin-Williams Company (NYSE:SHW) Q4 2019 Earnings Conference Call January 30, 2020 11:00 AM ET Company Participants Jim Jaye - Senior Vice President, Investor Relations John Morikis - Chairman & Chief Executive Officer Al Mistysyn - Chief Financial Officer Conference Call Participants Christopher Parkinson - Credit Suisse Stephen Byrne - Bank of America Merrill Lynch Jeff Zekauskas - JPMorgan Ghansham Panjabi - Baird John McNulty - BMO Capital Markets Arun Viswanathan - RBC Capital Markets Kevin McCa ...