Sherwin-Williams | Strategy and Financial highlights Information from ICIS

Edited from: 'Letter to shareholders', annual report 2008, “Sherwin-Williams reports first quarter 2009 financial results” and company website.

Each year Sherwin-Williams measures its success by the results it achieves and by its progress in positioning the company for stronger performance in the future. Although the company states that it has seen a “challenging market” it is looking ahead with “indelible confidence” in the future of company.

Sherwin-Williams states that the recession has decreased US demand for coatings and other building materials over the past two years and this has expanded to global markets. On this basis, it believes that the “catalyst for recovery” is not yet in sight.

“This has made it increasingly difficult to forecast our industry with any degree of confidence. We believe that the weak demand for paint and coatings we saw in the US and many international markets during the fourth quarter of 2008 is likely to continue for the foreseeable future”, says chairman and chief executive officer, Christopher Connor.

Sherwin-Williams further believes that industry-wide demand in most markets has eroded to the point that positive volume growth in 2009 is “unlikely”. However, it will continue to focus on serving a diverse and increasingly global professional customer base, expanding its distribution domestically and abroad, developing new and innovative products, managing expenses and working capital and generating cash which it says will see the company through the “difficult and persistent cycle”.

“We are equally confident that these same factors will produce superior results and returns for our shareholders over the long term”, says Connor.

In addition, the company is continuing to invest in its business to come out of the recessionary period a much stronger and well-positioned company. The Paint Stores area of its business opened 12 new stores in the first quarter of 2009 while closing 19 redundant stores. For 2009, it expects its Paint Stores segment to open 40 to 50 new stores while slowing the rate at which it will close redundant store locations.

Sherwin-Williams has also acquired five separate companies over the last 12 months, including Inchem in southeast Asia, Euronavy in Portugal and Altax in Poland. These acquisitions, along with two domestic acquisitions, are said to increase its “breadth” of product offerings and expand its global reach.

“Our balance sheet continues to be fiscally sound and capable of financing our planned business growth in the foreseeable future”, says Connor.

For the second quarter of 2009, Sherwin-Williams anticipates that its consolidated net sales will decline 9% to 12% over last year’s second quarter. With sales at that level, it expects diluted net income per common share for the second quarter to be in the range of $1.20 to $1.45 per share compared to $1.45 per share last year.

For the full year 2009, based on economic indicators currently available, the company is revising its 22 January 2009 guidance for estimated consolidated net sales to a mid to high single-digit percentage decrease over 2008. With sales at that revised level, it is reaffirming its guidance that diluted net income per common share for 2009 is expected to be in the range of $3.00 to $4.00 per share compared to $4.00 per share earned in 2008.

Please see Paints demand recovery remains elusive - US Sherwin-Williams on ICIS news.

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Financial highlights: Sherwin-Williams, year ended 31 December

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Sherwin-Williams Company Structure

Sherwin-Williams is engaged in the manufacture, distribution and sale of coatings and related products to professional, industrial, commercial and retail customers in North and South America. Sherwin-Williams was founded in 1866 by Henry Sherwin and Edward Williams. Sherwin bought a stake in the company called Truman Dunham & Co which sold painter’s pigments, linseed oil, colours, brushes and other products for furnishing and decorating.
More about Sherwin-Williams Structure

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