shw_ir_slides_5_08

Christopher M. Connor Sean P. Hennessy Chairman & CEO Senior Vice President, Finance & CFO

Robert J. Wells Vice President, Corporate Communications & Public Affairs

The Sherwin-Williams Company – 1st Quarter 2008

Forward-Looking Statements

This presentation today will contain certain “forward-looking statements”, as defined under U.S. federal securities laws, with respect to sales, earnings and other matters. These forward-looking statements are based upon management’s current expectations, estimates, assumptions and beliefs concerning future events and conditions. 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 and experience. These risks, uncertainties and other factors include such things as: general business conditions, 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; unusual weather conditions; and other risks, uncertainties and other factors described from time to time in the Company’s reports filed with the Securities and Exchange Commission. 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.


Discussion Outline

• Coatings Market Overview

• Sherwin-Williams Overview

• Sherwin-Williams Investment Rationale– Diversified Customer Base– Controlled Distribution– Channel/Brand Strategy– Leading Technology– People Development & Retention– Growth from Acquisitions– Financial Strength


Coatings IndustryGlobal Demand

7.3 Billion Gallons81 Billion Dollars

United States 26%

Latin America 11%

Europe 32%

Asia Pacific 23%

Canada 4%

Other 4%

Source: U.S. Census Bureau, July 2007/CHEMARK


Coatings IndustryTop Manufacturers

Source: Coatings World

1 Sherwin-Williams 2 PPG 3 Valspar 4 Masco 5 ICI 6 DuPont 7 RPM 8 Comex 9 Akzo Nobel 10 Benjamin Moore

1 Akzo Nobel/ICI 2 PPG/SigmaKalon 3 Sherwin-Williams 4 Dupont 5 Valspar 6 RPM 7 BASF 8 Kansai 9 Nippon10 Sika

Worldwide United States

Source: Paint & Coatings Industry


U.S. Coatings IndustrySales ($) Mix by Category

Source: U.S. Department of Commerce; Segment Percents Based on Dollars

ArchitecturalCoatings

48%

Special Purpose

29%

OEM Finishes

23%

2007 1.28 Billion Gallons20.07 Billion Dollars


Source: McGraw-Hill Construction – spring 2008

-30%

-20%

-10%

0%

10%

20%

30%

Residential Commercial/Ind. Institutional

% I

ncre

ase/

Dec

reas

e

2003

U.S. Construction MarketAnnual Growth Rates by Market (sq. ft.)

2004 2005 2006 2007e 2008f


U.S. Existing Home SalesSeasonally Adjusted

Source: National Association of Realtors

0

1000

2000

3000

4000

5000

6000

7000

8000

. Jun-01

Dec-01

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Sal

es in

Tho

usan

ds o

f Uni

ts

% C

hang

e ov

er P

revi

ous

Yea

r


U.S. Architectural CoatingsGallons in Millions

2007 696 Million Gallons

DIY

39%PC

61%

1987527 Million Gallons

DIY

51%PC

49%

1997647 Million Gallons

DIY

42%PC

58%

Source: U.S. Dept of Commerce MA28F Report/Internal Estimates


DIY Channel Share, U.S.Most Recent Purchase by Store Type

Source: Proprietary Paint Industry Data, S-W Marketing

2007


Contractor Channel Share, U.S.Primary Outlet by Store Type

Source: National Marketing Measures: 2007

2007


Company OverviewFinancial Highlights

Net Sales $8.01M $7,810M

EBITDA $1,148M $1,050M

Income $616M $576M

% Sales 7.7% 7.4%

Earnings Per Share $4.70 $4.19

Net Operating Cash $875M $816M

Dividend Per Share $1.26 $1.00

Return on Assets 12.7% 11.5%

2007 2006


Company OverviewRevenue & Profit by Segment - 2007

Sales: $4.96 BillionProfit: $767 MillionProfit %: 15.5%

Sales: $1.31 BillionProfit: $224.2 MillionProfit %: 17.1%

Sales: $1.73 BillionProfit: $160.7 MillionProfit %: 9.3%

Paint StoresGlobal

Consumer

Controlled Distribution Accounts for 75% of Sales


Architectural Coatings

• Residential DIY• Residential Repaint (Pro)• New Residential• New Commercial & Institutional• Property Maintenance• Architects & Designers

Diversified Customer BaseResidential-Commercial-Industrial

Special Purpose Coatings

• Industrial Maintenance • Traffic Marking• Automotive Refinish• Marine• Aerosol Paints• Miscellaneous Special Purpose

OEM Finishes

• Kitchen Cabinets• Residential Furniture• Office Furniture• Wood Building Products• Metal Building Products• Heavy Equipment• Electronics• Military


Controlled Distribution Competitive Advantages

• Direct Relationship with Customer / End-User

• Control Over Brands, Pricing, Inventory, Staffing

• Control Pace and Place of Growth


3,325 2,643

ICI/Glidden 662 718PPG 450 250Comex/Pro Paint, Inc. 372 308Kelly-Moore 164 160Benjamin Moore 154 68 Cloverdale/Rodda 109 101Dunn Edwards 83 71Diamond Vogel 77 85Vista 46 46

Gap: +1,208 +836

Source: Company Websites, Rauch Guide & Chain Store Guide

Controlled DistributionTop 10 Paint Store Chains – North America

2007 Est. 2002 Est.

2,117 1,807


Controlled Distribution Global Group

• Company-Operated Branches for Architectural, Automotive and OEM Finishes

• Added 50 Net New Locations in 2007 for a Total of 519 Branches


Paint

Aerosols

Wood Care

Applicators

Channel-Brand Strategy Leading Brands by Category and Channel

Sherwin-Williams Paint Store

Paint Dealer/Hardware

Mass Merchant/Department Specialty

PAINT STORES GROUP CONSUMER GROUP


53.462.6

73.478.2

83.6 86.2 88.7 88.3 91.3 95.4101.0 102.0

0

10

20

30

40

50

60

70

80

90

100

110

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Leading TechnologyTotal Technical Expenditures$

Mill

ions

% of Sales 1.3 1.3 1.5 1.6 1.6 1.7 1.7 1.6 1.5 1.3 1.3 1.3


Leading TechnologyNew Product Development

• Productivity Enhancing

• Sustainability

• Color Technology

• Safety and Security


People Development & RetentionRecognized Employer of Choice

FORTUNE FORTUNE ““100 Best Companies 100 Best Companies

to Work For”to Work For”

2005, 2006 & 20082005, 2006 & 2008

The PrincetonThe PrincetonReviewReview

““Best Entry LevelBest Entry LevelJobs” Jobs”

2005, 2006, 20072005, 2006, 2007& 2008& 2008

BusinessWeekBusinessWeek““100 Best Places to 100 Best Places to Launch A Career”Launch A Career”

2007 & 20082007 & 2008


New MTP Hires in 2007:

• Paint Stores Group 707

• Automotive Finishes 55

• Chemical Coatings Division 18

• Paint & Coatings Division 2

Total 782

People Development & RetentionSuccessful Recruiting Effort


Manager 4.4%

Assistant Mgr. 9.3%

Sales Rep 6.9%

People Development & RetentionVoluntary Turnover


Growth by Acquisition

• Completed 7 Transactions in 2007 for a Total Investment of $282 Million Generating Over $258 Million in Sales

• Completed 13 Transactions Over Last Five Years for a Total Investment of $940 Million Generating Over $870 Million in Sales


1,728

2,097 2,130 2,249 2,308 2,2202,339 2,455

2,701

3,080

3,4133,598

-300

200

700

1,200

1,700

2,200

2,700

3,200

3,700

$ M

illio

ns

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

$ Gross Profit

44.943.742.8

44.245.445.1

43.844.344.943.243.0

41.8

% to Sales

Consolidated Gross Profit


1,730 1,7851,882

2,069

2,3262,513 2,597

0

500

1,000

1,500

2,000

2,500

3,000

$ M

illio

ns

2001 2002 2003 2004 2005 2006 2007

$ SG&A

Selling, General & Admin Expense

32.432.232.433.834.834.434.1

% to Sales


Working Capital Ratio(Accounts Receivable + Inventory – Payables)/Sales

16.3%

13.8%

11.5% 11.0%

13.8%12.5%

11.7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2000 2001 2002 2003 2004 2005 2006 2007

12.7%


Net Operating Cash

Uses of Cash

• Acquisitions

• Capital Expenditures

• Buy Back Stock

• Manage Debt

• Pay Dividends

0100200300400500600700800900

2003 2004 2005 2006 2007

Net Operating Cash less Cap. Ex. & Dividends

Net Operating Cash

($ in

Mill

ions

)

558.9 544.7

716.7

351.7 340.9

460.0 460.0

815.8874.8

546.6


Stock Repurchase

6.70 6.707.98

6.60

8.10

5.60

13.2

4.1

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00M

illio

ns

of S

har

es

2001 2002 2003 2004 2005 2006 2007 2008

Avg. Common Shares Outstanding 156.9 152.4 147.0 144.7 141.1 137.3 130.9 122.1 (fully diluted / in millions)

(1Q)


Debt : EBITDA Ratio

678 745848

10471148

514

738621

875965

0

500

1000

1500

2003 2004 2005 2006 2007

Debt EBITDA

($ in

Mill

ions

)

76% 99% 73%83%

84%


Dividends Per Share1979 – 2008E

.01 .04 .05 .06 .08 .10 .12.13 .14 .16 .18 .19 .21 .22 .25 .28.32.35

.40.45 .48.54 .58 .60 .62

.68.82

1.00

1.26

1.40

$0.00$0.10$0.20$0.30$0.40$0.50$0.60$0.70$0.80$0.90$1.00$1.10$1.20$1.30$1.40$1.50

19

79

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

E


Summary

• Sherwin-Williams Investment Rationale

– Diversified Customer Base

– Controlled Distribution

– Channel/Brand Strategy

– Leading Technology

– People Development & Retention

– Growth from Acquisitions

– Financial Strength

shw_ir_slides_5_08

Economy & Finance

coatings industry sales

paint coatings industry

coatings industry changes

coatings world

dollars architectural

architectural coatings

store type source

adjusted source