RPM

• Overall Results

  • RPM delivered record fourth quarter and full year fiscal 2026 results, with every segment achieving record adjusted EBIT, marking the 16th quarter of record adjusted EBIT in the last 18 quarters
  • Consolidated sales grew 7.2% year-over-year, driven by high-performance building and infrastructure engineered solutions, acquisitions, and inflation-matching pricing; all international regions achieved double-digit sales growth led by emerging markets
  • Four consecutive years of record adjusted EBIT and working capital improvements have increased average annual operating cash flow by nearly 90% year-over-year since MAP 2025 launched, enabling acquisitions, organic investment, shareholder returns, and debt reduction

• Raw Material & Supply Chain

  • Center-led procurement secured contracted raw material supply that insulated RPM from spot price volatility, leading to slightly favorable price-cost mix in the fourth quarter
  • Spot raw material prices have declined from their peak, pointing to moderating inflation in the second half of fiscal 2027, though inflation will remain elevated in the first half of the fiscal year
  • Current tightness exists for propylene oxide-derived raw materials (North America, post-supplier plant fire) and MDI (supplier issues), but procurement has secured alternative supply to limit operational impact, though tightness adds to inflation

• Operational & Strategic Initiatives

  • Previously announced SDNA cost savings initiatives are on track to deliver $75 million of savings in fiscal 2027, serving as a down payment on the new MAP 3.0 strategic plan
  • The Green Belt operational efficiency program has trained 620 associates, built a pipeline of over $30 million in additional savings, and is now being expanded to administrative functions
  • RPM's core system selling strategy for high-performance buildings offers full multi-component system warranties, simplified procurement, and faster on-site construction, driving outperformance vs. peers and increasing RPM content per project; strategic bolt-on acquisitions continue to expand system capabilities
  • RPM has reorganized its emerging markets go-to-market to a centralized platform model based on its successful South Africa experience, driving broad-based double-digit growth across the Middle East, Africa, India, and Southeast Asia with room for significant further expansion

• Capital Allocation

  • Fiscal 2026 operating cash flow hit $899 million (second highest in company history); total shareholder returns (dividends + repurchases) hit $349 million, up 7% year-over-year
  • The board authorized a $700 million increase to the share repurchase program, adding to the $115 million remaining under the prior authorization; repurchases complement dividends and retain flexibility for organic growth and acquisitions
  • Fiscal 2026 CapEx was ~$224 million (slightly below prior year), focused on targeted growth projects including a shared European distribution center and new India production facility; $202 million was deployed for strategic small-to-mid-sized acquisitions focused on complementary system components and adjacent consumer categories

• Fiscal 2027 First Quarter Guidance

  • Sales are expected to grow in the mid-single-digit range, with all segments projected to grow; raw material inflation is expected to hit 5% to 6%, with implemented price increases offset inflation on a dollar basis
  • SG&A optimization will generate $25 million in cost benefits, partially offset by higher healthcare and benefit expenses
  • Adjusted EBITDA (new primary profit metric to align with peers and better reflect acquisition activity) is expected to grow in the mid-single-digit range, following prior year record results

• Fiscal 2027 Full Year Guidance

  • Total sales are expected to increase 3% to 7%, with M&A contributing approximately 1 percentage point to growth; adjusted EBITDA is expected to increase 5% to 10%
  • Raw material inflation will be highest in the first half of fiscal 2027, peaking at 6% to 8% in the second quarter; inflation will moderate in the second half but remain positive year-over-year, with price-cost moving from slightly negative in H1 to neutral in H2
  • SG&A optimization is expected to deliver ~$75 million in total annual benefits, partially offset by higher healthcare and benefit expenses; temporary headwinds from 2026 plant consolidations will diminish, partially offset by startup costs for new shared facilities
  • If current segment volume momentum (strong in construction/performance coatings, stabilization in consumer) holds, RPM expects to hit the upper end of the guidance range; volatility from geopolitical and tariff issues creates downside risk that would push results to the lower end of the range

1. Construction Products Group: Achieved record sales, driven by broad-based strength led by concrete admixtures, strong growth in roofing and wall systems for high-performance buildings (data centers, infrastructure projects), pricing increases to offset inflation, and foreign currency translation. Record adjusted EBIT was delivered via volume growth, operational efficiency improvements that leveraged fixed costs, favorable product mix, and SG&A optimization. It is a leading growth segment alongside Performance Coatings Group. There is no specific absolute financial value or revenue contribution percentage provided in the transcript.
2. Performance Coatings Group: Achieved record sales, with broad-based growth across businesses, led by infrastructure project solutions, food coatings and ingredients, emerging markets, and fireproofing systems for high-performance buildings, plus pricing to offset inflation. Record adjusted EBIT was driven by higher sales, volume-led improved fixed cost leverage, and SG&A optimization, partially offset by a $3.2 million bad debt expense from a customer bankruptcy. It is a leading growth segment alongside Construction Products Group. There is no specific absolute financial value or revenue contribution percentage provided in the transcript.
3. Consumer Group: Generated record sales driven by acquisitions and pricing to offset inflation, despite ongoing softness in DIY end markets with low single-digit negative organic volume. Adjusted EBIT grew as MAP operational improvements and SG&A optimization more than offset lower fixed cost absorption from reduced volumes and inflation; M&A integration also contributed to earnings growth. Adjusted EBIT excludes a $9.7 million non-cash impairment charge related to the color group. There is no specific absolute financial value or revenue contribution percentage provided in the transcript.

• Broad macroeconomic and geopolitical volatility from renewed tariff wars and the ongoing Iran conflict is expected to continue through fiscal 2027, creating uncertainty around raw material prices, supply chains, and demand
• The consumer segment continues to face ongoing softness in DIY end markets, with low single-digit negative organic volume, and sensitivity to housing turnover, which remains at multi-decade lows due to elevated interest and mortgage rates
• Temporary raw material supply tightness and cost increases exist for propylene oxide-derived materials (post-supplier plant fire in North America) and MDI, with limited negative sales impact expected in the first quarter of fiscal 2027
• Economic uncertainty reduces demand visibility, particularly in the consumer segment, where stabilization is expected but a robust rebound is not anticipated
• Wage, salary, and benefit inflation will continue to be 3% to 4% in fiscal 2027, partially offsetting SG&A optimization savings
• Rising indirect costs from tariff impacts on steel and packaging, particularly for the consumer segment, create incremental inflation pressure

Q: What is the visibility for ongoing strength in Construction Products Group (CPG) and Performance Coatings Group (PCG) from onshoring and data center demand through fiscal 2027, and are there additional cost saving opportunities beyond the already announced targets? / A: Backlogs for CPG and PCG remain strong, but broader geopolitical volatility from renewed tariff wars and Middle East tensions will make fiscal 2027 another volatile year, and RPM expects to continue outperforming peers in this environment. Additional benefits will come from completing plant consolidations (including the Toronto CPG facility closure and European shared distribution centers), with $10 to $12 million in incremental benefits expected in the second half of 2027; the Green Belt initiative will continue to deliver incremental efficiencies, and more details on the MAP 3.0 plan will be shared at the November investor day. Total 2026 plant consolidation headwinds were $20 million, falling to $10 million in 2027.

Q: What was Q4 organic volume performance for the consumer segment, is DIY stabilizing, and will share repurchases maintain the recent $25 million quarterly pace? / A: Consumer segment had 2% to 3% negative Q4 organic volume, with acquisitions driving overall positive sales; after two years of steady declines, RPM expects consumer DIY has hit bottom, with stabilization expected in 2027, though no robust rebound is anticipated. Renewed tariffs could increase packaging costs for consumer products. With stronger balance sheet health and higher cash flow from MAP initiatives, RPM has more capital to deploy, and will maintain programmatic repurchases while being opportunistic if the stock price weakens.

Q: What is driving the strong growth in concrete admixtures, and why is emerging markets growth so broad-based? / A: RPM is gaining significant share in concrete admixtures as large peers face M&A integration challenges and regulatory actions, with demand supported by growth in data centers and infrastructure projects. Broad-based emerging markets growth follows a strategic reorganization: RPM shifted from a decentralized, low-attention small acquisition model to a centralized platform approach that improves governance, compliance, and cross-segment collaboration between CPG and PCG, replicating the successful South Africa model across the Middle East, Africa, India and Southeast Asia, with significant room for further expansion.

Q: How much of RPM's business comes from data centers, and how much share can RPM capture from projected large-scale future data center buildout? / A: Data centers currently represent just 1% to 2% of RPM's total revenue, but the segment is growing faster than the core business. Two-thirds of CPG and PCG revenue comes from maintenance and restoration, which drives consistent outperformance; RPM wins more data center project spend via its system selling model, which offers guaranteed performance, warranties, and faster construction that addresses labor shortages. Exposure is spread across Euclid Chemical admixtures, fiber FRP gratings, and Carboline corrosion/fireproof coatings.

Q: Does RPM's 2027 guidance represent a new long-term growth algorithm, and can RPM pursue larger acquisitions after improving its operational foundation? / A: The 3-7% sales/5-10% EBITDA growth guidance reflects the current volatile geopolitical environment, not a new baseline; if stability returns, RPM expects to deliver mid-single-digit revenue growth and double-digit earnings growth. RPM's strong balance sheet, credit metrics, and cash flow position it to pursue larger acquisitions if the right strategic fit arises, but capital allocation will remain disciplined and focused on strategic fit and returns, consistent with historical practice.