YEAR ESTABLISHED: 1866
REVENUE: $7.426 billion
(2015: $10.24 billion)
(Note: Sherwin-Williams reported total revenue of $11,855,602 billon for fiscal 2016. However, for purposes of this report, sales of painting tools and equipment in the Paint Stores Group are not reported as part of coatings revenue. The above is Coatings World’s estimate.)
Architectural coatings; Industrial coatings; Protective and marine coatings; OEM product finishes ; Wood finishes; Aerospace coatings
John Morikis, chairman, president and CEO; Allen J. Mistysyn, senior vice president – finance and CFO; Sean Hennessy, senior VP, corporate planning, development and administration; and Jane Cronin, corporate controller.
The Sherwin-Williams Company reported $11,855,602 billion in net sales for 2016. Minus the sale of painting tools and equipment in the company’s Paint Store Group, Coatings World estimates the company’s paint and coatings sales to be approximately $7.426 billion.
Its Paints Stores Group is the leading operator of specialty paint stores in North America, with more than 4,000 stores located throughout the U.S., Canada and the Caribbean region and represents 65.7 percent of total sales. Its Paint Stores Group includes Sherwin-Williams branded paints and stains. Major brands include Sherwin-Williams, MAB, ProMar and SuperPaint. The Consumer Group comprises 13.4 percent of sales and sells branded, private label and licensed brand paints, stains, varnishes, industrial products, wood finishing products, aerosols, caulks and adhesives. Major brands include Dutch Boy, Krylon, Minwax, Thompson’s WaterSeal, Pratt and Lambert, Martin Senour, Ronseal and Duraseal. The company’s Global Finishes Group comprises 15.9 percent of total sales and manufactures and sells a wide range of OEM product finishes, protective and marine coatings and automotive finishes to a customer base in 120 countries. Key brands include Sherwin-Williams, Lazzuril, Excelo and Baco. The Latin America Coatings Group encompasses 5 percent of total sales. It manufactures a wide range of architectural paints and industrial coatings throughout Latin America.
John Morikis, chairman, president and CEO of Sherwin-Williams noted in his annual shareholders letter that 2016 was a year of many financial milestones, including record sales for the sixth consecutive year and record earnings for the fifth straight year.
“Excluding expenses related to the Valspar acquisition, EBITDA eclipsed $2 billion for the first time in our history and profit before tax, net income and earnings per share all increased by double-digit percentages,” he said. “Cash from operations surpassed $1.3 billion, and we finished the year with a cash balance of $889.8 million, which will be used to reduce the amount of debt required to complete the Valspar acquisition. Consolidated net sales for the year increased 4.6 percent to $11.86 billion. Revenue growth was aided by a change in revenue classification related to grossing up third-party service revenue, which increased annual sales by 1.1 percent. The positive effect of the change in revenue classification was more than offset by currency devaluation, which decreased revenue in U.S. dollars by 1.4 percent. Continued weak demand for certain industrial coatings products — particularly those used to maintain oil and gas production and storage assets and mining equipment — also negatively affected sales volumes throughout the year.
150 Year Celebration
Last year marked a milestone year for Sherwin-Williams as the Company celebrated its 150th anniversary with employees, customers and partners by highlighting the company’s long-standing commitment to innovation, color and community.
Founded in 1866 by Henry Sherwin and Edward Williams, the company launched the Celebration 150 initiative to honor the rich history and contributions from all employees, who today total more than 40,000 people worldwide. Sherwin-Williams hosted celebrations around the world, including the U.S., South America, Europe and Asia. In May, the Company hosted an event near its world headquarters in Cleveland, and John Morikis and other members of the management team rang the opening bell at the New York Stock Exchange.
Sherwin-Williams also marked the anniversary with community outreach programs worldwide. Throughout the year employees participated in paint renovation projects in schools, churches, community centers and other deserving organizations in many locations around the world.
Acquisition of Valspar
Sherwin-Williams has completed its acquisition of Valspar. With corporate headquarters in Cleveland, Ohio, the combined company generated pro forma 2016 revenues of $15.8 billion and employs approximately 60,000 associates worldwide. It has a prominent market position in architectural paint in North America, South America, China, Australia and the UK. In industrial coatings, the combined company is a global market leader in packaging coatings, coil coatings, general industrial coatings and industrial wood coatings.