Dividend Champion RPM: Robust Cash Flow to Combat Inflation

• CPG: Core business involves manufacturing and selling construction sealants and adhesives, coatings and chemicals, roofing systems, concrete admixtures and repair products; provides building envelope solutions, insulation cladding, flooring systems, and weatherproofing solutions. In Q3 FY2022, sales for this segment rose 21.7% year-on-year to $482 million, driven by 23.2% organic growth and a 2.2% contribution from acquisitions. Innovative building envelope solutions and differentiated repair offerings delivered benefits. • PCG: Provides high-performance flooring solutions, corrosion-control and fire-retardant coatings, infrastructure repair systems, fiberglass-reinforced plastic grating, and drainage systems. In Q3 FY2022, sales for this segment increased 19.6% year-on-year to $270.9 million, primarily due to 17.8% organic growth and a 3.4% contribution from acquisitions. • Consumer: Manufactures and sells rust-preventive, specialty-use, and decorative paints; caulks and sealants; primers; cement cleaners; floor sealers; wood-finishing paints; sandpaper and other abrasives; and other branded consumer products. Organic sales for this segment grew 3.6% in Q3 FY2022, while total segment sales rose 2.9% year-on-year to $491.6 million. • SPG: Manufactures and sells industrial cleaners for pharmaceutical and food industries; equipment for repair services; colorants; nail enamels; exterior coatings; edible coatings; specialty glazes; and other specialty OEM (“Original Equipment Manufacturer”) coatings. Sales for this segment totaled $189 million, up 11.9% year-on-year. 03 Financial Data ① Revenue and Profit • Net sales for Q3 FY2022 reached a record $1.43 billion, up 13.0% from $1.27 billion in the prior-year period. Operating profit for Q3 was $500 million, up 5.6% from $470 million in the prior-year period. • Frank C. Sullivan, Chairman and CEO of RPM, stated that RPM’s employees persevered through unprecedented supply-chain challenges, Omicron-related disruptions, and inflation—achieving record EBIT and record sales in Q3 despite the difficulties compared to last year. In September, RPM swiftly responded to supply-chain challenges by rapidly expanding internal resin production capacity at its newly acquired manufacturing facility in Texas. Moreover, RPM’s continued investment in its fastest-growing business areas drove accelerated growth in its high-performance construction and coating systems. Construction and industrial maintenance activity remained strong, energy markets began rebounding, and consumer takeout demand stayed robust. • In Q3 FY2022, RPM’s U.S. revenue accounted for 69% of total revenue, representing its primary income source. The company markets its product lines directly to contractors, distributors, and end customers—most of whom are located domestically in the United States. • In Q3 FY2022, RPM’s European revenue accounted for 17% of total revenue. Europe serves as the primary overseas market for RPM’s Consumer and SPG segments.

Sales Recover Across Four Divisions; RPM’s Net Income Rises Nearly 30% in Q2 FY2025

Frank C. Sullivan, Chairman and CEO of RPM, stated: “All four divisions posted positive volume growth and achieved record consolidated sales in Q2, marking the company’s 12th consecutive quarter of record adjusted EBIT—a result attributable to our employees’ dedication and the steady progress of the MAP 2025 initiative.” From a business-segment perspective, RPM’s Building Products Group, Performance Coatings Group, Specialty Products Group, and Consumer Group all posted organic sales growth in Q2. The company focused on repair-and-maintenance applications, successfully capturing specific organic growth opportunities—particularly excelling in technical solutions for high-performance construction projects. Additionally, businesses serving the residential end-market demonstrated stability and benefited from favorable weather conditions,” added Frank C. Sullivan. Specifically, the Building Products Group’s sales rose 4.3% year-on-year to $690 million; the Performance Coatings Group grew 1.4% year-on-year to $380 million, driven by flooring and protective coatings for high-performance construction projects. The Specialty Products Group’s sales increased 4.4% year-on-year to $185 million, supported by strong disaster-recovery responses to hurricane activity, robust growth in food coatings and additives, and stable demand from professional residential OEMs this quarter. The Consumer Group reported $590 million in sales, reflecting 2.7% organic growth offset by a 0.7% negative impact from foreign currency translation. Geographically, sales growth across North America was broadly solid, whereas performance varied across other regions. In Europe, profitability improved significantly, aided by the MAP 2025 initiative.

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KeyBanc lowered RPM International's price target to $117 citing consumer group decline and guidance downgrade, though maintaining an Overweight rating based on expected EBITDA growth.

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