Sherwin Williams : Quarterly Reporting Document

4Q and Full Year 2022 Results

January 26, 2023

Forward-Looking Statements

This presentation may contain certain "forward-looking statements," as defined under U.S. federal securities laws. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "could," "plan," "goal," "target," "potential," "seek," "intend," "aspire" or "anticipate" or the negative thereof or comparable terminology. These forward-looking statements are based upon current expectations, predictions, 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 of which are outside the control of the Company that could cause actual results to differ materially from such statements and from the Company's historical results, performance and experience. These risks, uncertainties and other factors include such things as: general business and economic conditions; the Company's ability to successfully integrate past and future acquisitions into its existing operations, as well as the performance of the businesses acquired; strengths of retail and manufacturing economies and the growth in the coatings industry; changes in the Company's relationships with customers and suppliers; changes in raw material availability and pricing; adverse weather conditions or natural disasters, including due to the impacts of climate change; and public health crises, including the duration, severity and scope of the COVID-19 pandemic and the actions implemented by international, federal, state and local public health and governmental authorities to contain and combat COVID-19, which may exacerbate one or more of the aforementioned and/or other risks, uncertainties and factors more fully described in the Company's reports filed with the Securities and Exchange Commission (SEC); and other risks, uncertainties and factors described from time to time in the Company's reports filed with the SEC. Since it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

1

2022 Full Year Financial Performance Highlights

($ in millions,	2022	2021	% Change
except per share data)
Sales	$22,148.9	$19,944.6	11.1%
Gross Profit	$9,325.1	$8,542.7	9.2%
Gross Margin	42.1%	42.8%	-70 bps
Reported EPS	$7.72	$6.98	10.6%
Adjusted EPS (1)	$8.73	$8.15	7.1%
EBITDA	$3,545.0	$3,155.9	12.3%
% of Sales	16.0%	15.8%	+20 bps
Net Operating Cash	$1,919.9	$2,244.6	-14.5%

• Sales increased 11.1% to a record $22.1 billion, driven by strength in professional architectural and North American industrial end markets
• • Low double-digit pricing, low-single-digit volume and low-single-digit contributions from acquisitions partially offset by slight FX headwinds
• Gross profit increased 9.2%; gross margin impacted by raw material cost inflation and supply chain inefficiencies
• SG&A as % of sales improved 70 bps to 27.2% - good cost control while continuing strategic long-term investments
• Adjusted EPS(1) increased 7.1% year-over-year to $8.73/share vs. $8.15/share in the prior year
• EBITDA increased 12.3% to $3.5 billion, or 16.0% of sales
• Generated net operating cash of $1.9 billion
• • Invested $1.0 billion in acquisitions that accelerated strategy
  • Repurchased 3.35 million shares at an average price of $263.64 per share
  • Increased annual dividend 9.1% to $2.40 per share

Note: All comparisons are to the prior year, unless otherwise noted	2
(1) Reconciliation from reported EPS to adjusted EPS provided in Appendix

4Q 2022 Financial Performance Highlights

($ in millions,	4Q 2022	4Q 2021	% Change
except per share data)
Sales	$5,230.5	$4,762.1	9.8%
Gross Profit	$2,233.8	$1,879.7	18.8%
Gross Margin	42.7%	39.5%	+320 bps
Reported EPS	$1.48	$1.15	28.7%
Adjusted EPS (1)	$1.89	$1.34	41.0%
EBITDA	$751.7	$533.4	40.9%
% of Sales	14.4%	11.2%	+320 bps
Net Operating Cash	$641.0	$193.9	230.6%

• Sales increased 9.8% to $5.2 billion - low double-digit pricing, flat volume and low-single-digit contributions from acquisitions partially offset by low-single-digit FX headwinds
• • Demand strength in professional architectural and North American industrial end markets
  • Further weakness in Europe and Asia end markets
• 320 basis point year-over-year improvement in gross margin, driven by sales growth and pricing actions
• • Modest sequential decline in raw material costs from Q3 2022
• SG&A expense as a percentage of sales decreased by 40 basis points to 29.8%
• Adjusted EPS(1) increased 41.0% year-over-year to $1.89/share vs. $1.34/share in the prior year
• EBITDA increased 40.9% to $751.7 million

Note: All comparisons are to the fourth quarter of the prior year, unless otherwise noted	3
(1) Reconciliation from reported EPS to adjusted EPS provided in Appendix

The Americas Group

• Sales increased 15.7% including mid-single-digit volume growth and high-single-digit pricing; same store sales increased 15.5%
• Pro architectural sales increased by high-teens
• DIY and Protective & Marine sales increased double-digits but below the guided segment range
• Segment profit increased $126.4 million, or 31.6% year-over-year, driven by solid volume and selling price increases, partially offset by higher raw material costs and higher SG&A costs related to long-term growth initiatives

($ in millions)	4Q 2022	4Q 2021	% Change
Sales	$3,071.1	$2,653.5	15.7%
Segment Profit	$526.7	$400.3	31.6%
Segment Margin	17.2%	15.1%	+210 bps

+DD	+DD	+DD	+DD	+DD	+DD
Res Repaint	New	Commercial	Property	DIY	Protective &
Residential	Maintenance	Marine

4Q-22 sales vs. 4Q-21 sales (HSD/MSD/LSD = high, mid or low single digit %. DD = double digit %)

4

Note: All comparisons are to the fourth quarter of the prior year, unless otherwise noted