On this page of StockholderLetter.com we present the latest annual shareholder letter from SHERWIN WILLIAMS CO — ticker symbol SHW. Reading current and past SHW letters to shareholders can bring important insights into the investment thesis.

 •  3/6/2025 Letter Continued (Full PDF)
 •  3/8/2023 SHW Stockholder Letter
 •  3/6/2024 SHW Stockholder Letter
 •  More "Specialty Chemicals" Category Stockholder Letters
 •  SHW Benford's Law Stock Score = 97

SHW Shareholder/Stockholder Letter Transcript:

success by
DESIGN
2 0 2 4 A N N UA L R E P O R T

22
branches &
facilities
CANADA
259
4
paint stores
63
facilities
4,428
228
facilities
UNITED
STATES
2
facilities
86
branches &
facilities
paint stores
CARIBBEAN
paint stores
24
334
branches &
facilities
24
facilities
paint stores
Corporate Headquarters
LATIN AMERICA /
SOUTH AMERICA
Paint Stores Group
Consumer Brands Group
Performance Coatings Group
success by
DESIGN
Success by Design is a proactive and
ENTERPRISE STRATEGIC PRIORITIES
disciplined approach which starts and ends
with helping our customers succeed.
We start by aligning on our desired outcomes,
then develop a roadmap to get us there and finally,
execute with alignment and speed. We have a clear
and consistent strategy, and we are continuously
ABOVE-MARKET
GROWTH
assessing and adapting to find areas where we can
create more value and further differentiate ourselves
ROS - RONAE - CASH
from competitors. Our enterprise strategic priorities
reflect our Success by Design approach, and they
reinforce each other with the common goal of driving
above-market growth and profitability.
Talent &
Culture
Sustainability
Simplification
Digitization
Supply Chain
Responsiveness

60
23
facilities
64,000+
EMEAI
branches &
facilities
employees across
120+
ASIA-PACIFIC
7
branches &
facilities
10
countries
facilities
1
facility
COMPANY SALES
BY SEGMENT
29%
14%
The Company was founded by Henry Sherwin and
Edward Williams in 1866. Today, we are a global leader in
the development, manufacture, distribution and sale of paint,
coatings and related products to professional, industrial,
commercial and retail customers.

57%
23.1 billion
2024 Net Sales
We provide differentiated solutions that drive customer productivity and profitability.
Paint Stores
Group
Consumer
Brands Group
Performance
Coatings Group
distribution model including 4,773
architectural paints, stains and
industrial customers in more than
operates a unique controlled-
sells a premier portfolio of branded
Company-owned stores that
related products through retailers
120 countries. Large-scale orders
and distributors in North America
are shipped factory-direct, with
and Europe. The Group also sells
smaller, customized batches
architectural paints and related
available through strategically
products in Latin America through
located blending facilities. Selected
serve as the exclusive outlets for
Sherwin-Williams branded paints

and related products in the USA,
Canada and the Caribbean. The
Group primarily serves professional
architectural paint contractors who
are supported by thousands of highly
trained store managers and field
sales reps. The Group also serves
targeted do-it-yourself customers.
334 Company-owned stores,
sells a broad range of coatings to
products are also sold through
dealers and retailers. Additionally,
Company-owned branches
the Group operates the Company   s
and authorized distributors.
global supply chain including
procurement, manufacturing
and distribution.
1

Sherwin-Williams delivered record
results in 2024 in a difficult demand
environment while investing for
future success.
letter to
SHAREHOLDERS
S
herwin-Williams delivered record results in
2024 in a challenging demand environment
characterized by stubbornly high interest
rates, muted new and existing home sales,
cautious consumers and limited or delayed industrial
spending. Despite this choppy backdrop, we chose
to play offense. Why? Because we know end markets
go through cycles and eventually recover. Because
we see unprecedented opportunity amid uncertainty
and changes in the competitive landscape. And above
all, because we believe in our strategy, and we know
it works. We provide differentiated solutions to our
customers that drive their productivity and profitability
and for which they are willing to pay.
This clarity of mission enables us to act decisively and
with purpose. In 2024, we invested pre-emptively at
48.5% of Net sales.
    EBITDA1     or Earnings Before Interest, Taxes,
Depreciation and Amortization     increased 8.2% to
$4.5 billion. EBITDA margin increased 140 basis points
to 19.4% of Net sales.
    GAAP diluted net income per share increased
14.1% to a record $10.55 per share. Adjusted diluted
net income per share1 increased 9.5% to a record
$11.33 per share.
    We generated Net operating cash of $3.2 billion,
or 13.7% of Net sales. Of that amount, we returned
$2.5 billion to shareholders through share repurchases
and dividends.
    We continued to invest in the business through
a heightened level to position ourselves for sustained
$1.1 billion in capital expenditures. These investments
success. These targeted investments included
were largely aimed at growth initiatives, along with
customer-facing sales professionals, unique services
construction of our new global headquarters
and enterprise capabilities to drive growth, productivity
and efficiency. Returns from these investments are
already evident. We expect they will become even more
apparent over the long term, particularly when stronger
demand materializes.
and R&D center. We expect to begin occupying
these new facilities this year.
    Our balance sheet remained strong, and we finished
the year with net debt2 to trailing-twelve-month EBITDA
of 2.2x.
Alignment among our 64,000 employees has never
been stronger. Together, this team delivered the
following results in 2024 while steadily executing
on our enterprise strategic priorities:
    Consolidated Net sales increased to a record
$23.1 billion. This marked the 14 consecutive year
th
sales increased.
2
    Gross margin increased 180 basis points to
Success by Design
Success is not left to chance at Sherwin-Williams.
Instead, we focus on    Success by Design.    This
systematic approach begins with our end goal in mind
    delivering above-market growth and profitability by
helping our customers succeed. Step-by-step processes
1
This is a non-GAAP financial measure. See Item 7 of the Annual Report on Form 10-K for EBITDA and adjusted diluted net income per share reconciliations for 2024 and 2023.
2
Net debt equals total debt outstanding, net of cash and cash equivalents.

Allen J. Mistysyn, Senior Vice President     Finance and Chief Financial Officer, and Heidi G. Petz, Chair, President and
Chief Executive Officer
with clear accountability, clear metrics and clear ownership
drive our actions. We execute relentlessly, assessing
continued to build momentum within our enterprise strategic
priorities in 2024.
choice, a place where you can    Create Your Possible   

recognized us as one of America   s Best Large
Employers and Best Employers for Women, while
Newsweek    recognized us among America   s Most
Trustworthy Companies.

Simplification     We are committed to reducing and
avoiding complexity to optimize our cost position
and our speed to market as we grow and scale the
Company. We are encouraged by solid progress in raw
material consolidation, manufacturing productivity and
finished goods consolidation among many other areas.

Supply Chain Responsiveness     Our global supply
chain organization is a competitive advantage. Recent
key wins include strengthened relationships with key
suppliers, and capacity expansions in Statesville, NC,
Waco, TX, Orlando, FL, and Tournus, France. We are
well-positioned to meet anticipated robust demand
over the cycle.

Business Daily    ranked us among their Top 100 Most
Sustainable Companies. Visit https://corporate.sherwinwilliams.com/us/en/sustainability.html for the full story.
Talent & Culture     We aim to be the employer of
through life, career and connection. In 2024, Forbes
Sustainability     We do business the right way and
in lockstep with our customers. In 2024, Investors
and adapting all along the way. Using this approach, we


Operating with Discipline
We have deep and experienced teams in each of our three
operating groups. Their expertise, discipline and commitment
to our customers enabled us to navigate near-term demand
softness in 2024 while preparing us to continue winning well
into the future.
Paint Stores Group delivered record sales and profit before
tax. The Group opened 79 net new paint stores, added
100 new sales reps and territories, and hired more than
1,500 management trainees. Consumer Brands Group
expanded segment margin and profit before tax. The Group
strengthened its North American home-center partnerships
while executing initiatives with targeted Latin America and
Europe customers. Performance Coatings Group posted
record new business wins and profit before tax. Adjusted
segment margin increased to a new high and remained in the
range we have targeted for the second straight year.
Additional performance highlights from each of these three
terrific businesses are described later in this report.
Digitization     We continue to strengthen our datadriven platform to improve connectivity and decision
making which will drive our customers    success. This
year, we further enhanced our e-business platform and
harmonized selected ERP systems.
3



 3/6/2025 Letter Continued (Full PDF)