The Sherwin-Williams Company has reported record consolidated net sales of US$19.94 billion, increasing 8.6 per cent in the year despite a number of headwinds, including “unprecedented” cost inflation and raw material availability issues that negatively impacted full year sales by an estimated mid-single digit percentage. Consolidated net sales for the fourth quarter rose 6.1 per cent.
Sherwin-Williams said consolidated net sales grew mainly because of selling price increases in all segments and higher product sales volume in the Performance Coatings Group, with all group businesses and regions delivering double digit percentage full year growth. This was partially offset by lower sales volumes in The Americas Group and the Consumer Brands Group, mainly due to raw material availability issues.
John Morikis, Chairman, President and Chief Executive Officer of Sherwin-Williams, said the full year and fourth quarter were marked by industry-wide supply chain disruptions, unprecedented cost inflation, and ongoing challenges related to the COVID-19 pandemic.
“The 61,000 dedicated employees of Sherwin-Williams refused to use these challenges as an excuse, but rather as an opportunity to get even closer to our customers,” Morikis said. “We focused on minimising the impact to their businesses through innovation, value-added services, and differentiated distribution.”
Morikis said that while the company focused on meeting customer needs, it also mitigated rising costs with pricing actions in all businesses throughout the year.
“Near term pressure on our margins was significant, but we remain highly confident they will recover – just as they have in past cycles – as we grow the business and see commodity costs moderate over time,” Morikis said.
Demand remains strong across Sherwin-Williams’ end markets, though the company expects raw material availability and COVID-related issues to continue until the end of the first quarter.
“Given these near-term headwinds, we expect first quarter 2022 consolidated net sales will be up a low to mid-single digit percentage compared to the first quarter 2021,” Morikis said. “For the full-year 2022, we anticipate our consolidated net sales will increase by a high single digit to low double digit percentage from 2021. We expect full year raw material costs to remain elevated but to moderate sequentially, and we will continue to implement pricing actions as appropriate to offset increased costs.
“We remain confident in our strategy, our capabilities and the differentiated product and service solutions we bring to customers, and we expect to outgrow the market long-term. Our business remains extremely well positioned and we are emerging as an even stronger company following the challenges we faced in 2021.
“Our strong cash generation will enable us to continue to make strategic growth investments in our business, return cash to our shareholders via dividends and share repurchases, and acquire growth businesses that fit our strategy. We remain steadfast in our focus on maximising shareholder value.”