YEAR ESTABLISHED: 1866
HEADCOUNT: 30,700 (2008)
Coatings REVENUEs: $5.824 billion t (2008: $6.521)
TotaL REVENUEs: $7.094 billion t (2008: $7.979)
net income: $435 million t (2008: $476)
• Paint Stores Group: 59%
• Consumer Group: 17%
• Global Finishes Group: 23%
Christopher M. Connor, chairman and CEO; John G. Morikis, president and COO; Sean P. Hennessy, senior vice president and CFO.
The largest of Sherwin-Williams’ three business segments, the Paint Stores Group, finished 2009 at $4.21 billion, a decline of 12.9 percent from 2008, while segment profit decreased 7.4 percent to $600.2 million. Due to its heavy mix of sales to professional painting contractors, this segment had a tough time during the recession. According to the company, industry-wide coating sales to professional painters declined more sharply than sales to DIY homeowners in 2009 for two reasons. First, because the hardest hit end markets—new residential and commercial construction—are painted exclusively by professionals. Second, cautious homeowners were understandably hesitant to hire contractors to do work they believe they can do themselves.
Sherwin-Williams believes the professional painter will be the fastest growing customer segment in the coatings market over the longer term, and pros prefer to shop at specialty paint stores for supplies and equipment. As a result, Sherwin-Williams continued to invest in new store locations in 2009. During the year it opened 53 stores in new markets and consolidated an additional 45 redundant store locations, for a net increase of eight new stores for the year. The store count in the U.S., Canada and the Caribbean now stands at 3,354.
Sherwin-Williams’ Consumer Group fulfills a dual mission for the company—supplying branded and private label products to retailers throughout North America and supporting the Paint Stores Group with new product research and development, manufacturing, distribution and logistics. The group operates 25 manufacturing plants and six distribution centers in North America.
Sales for the Consumer Group declined 3.7 percent to $1.23 billion for the year, primarily as a result of weak end market demand across most of the group’s retail customers. Segment profit for the year increased 12.2 percent to $157.4 million. In response to the continued deterioration in sales volume in North America, Consumer Group closed or idled an additional four manufacturing facilities and five distribution service centers.
Sales for the Global Finishes Group decreased 11.4 percent to $1.65 billion. Global Finishes Group manufactures and sells OEM finishes, automotive finishes, protective and marine coatings and architectural coatings to a growing customer base around the world.
It expanded its distribution platform, opening 10 new company-operated branches in Latin America and three in India. At the same time, in North America, it closed seven automotive finishes branches, eight product finishes facilities, as well as two manufacturing plants. Global Finishes Group ended the year with 539 branches in operation compared to 541 a year ago.
Sherwin-Williams has a long history of developing innovative new coatings products. In 2009, the company launched a new line of high-performance lubricants, cleaners and coating removers made with biodegradable, renewable resources under the Sprayon Eco-Grade brand. It also extended the successful Krylon Fusion paint for plastic line with the introduction of Krylon Fusion Brush-On, the first brush-on paint for plastic. Last year, Sherwin-Williams Protective and Marine Coatings unveiled its Sher-Release Silicone Fouling Release Coating System, a nontoxic alternative to conventional antifouling coatings.
Also, Sherwin-Williams’ new Dutch Boy Refresh interior paint with Arm & Hammer odor-eliminating technology earned GreenGuard Indoor Air Quality Certified status.
Sherwin-Williams recently completed construction of a new 215,000 square foot factory in Zhaoqing, China to serve its growing business with electronics and furniture manufacturers in South China. The company also announced plans to build a new blending facility in Langfang in North China, scheduled to open in June 2010.
Sherwin-Williams now operates five manufacturing plants and six blending facilities in China, Malaysia, Vietnam, the Philippines and Singapore, and research and development centers in China, Vietnam and Malaysia.
In Central Europe, during the first quarter of 2009, Sherwin-Williams acquired Altax Sp. zo.o. (Altax). Headquartered in Poznan, Poland, Altax is a leading innovator of protective wood care coatings and serves multiple channels, including industrial, professional and DIY. Included in the Consumer Group, the acquisition provides a platform for further growth in Central Europe.