Sherwin-Williams, which acquired Valspar in June 2017, has reported healthy 2017 year-end results
Consolidated net sales for the year increased 26.4% to a record $14.98 billion and increased 43.0% in the quarter to a record $3.98 billion.
Valspar sales since the month of June increased consolidated net sales in the year and quarter by 20.8% and 36.1%, respectively
Compared to the same periods in 2016, consolidated net sales increased $3.13 billion, or 26.4%, to $14.98 billion in the year and increased $1.20 billion, or 43.0%, to $3.98 billion in the quarter due primarily to higher paint sales volume in The Americas Group and the addition of Valspar sales since the month of June.
Commenting on the financial results, John G. Morikis, Chairman, President and Chief Executive Officer, said: “2017 was a year of record sales, net income, earnings per share, cash and EBITDA, but it will best be remembered as the year in which we joined forces with Valspar.
The enormous amount of effort and energy invested over the past seven months in bringing these two great companies together, strengthening our customer relationships, defining the right organisational structure and building momentum in every line of business is transforming Sherwin-Williams into a faster growing, financially stronger and more profitable enterprise. These efforts will continue throughout 2018 with similar effect.
"The Valspar business added a little more than $1 billion to net sales in the quarter. And while we still have work to do to restore Valspar's profitability, we are making good progress on integration, value capture and pricing to offset raw material inflation.
“Revenue synergies are, perhaps, the greatest long-term opportunity.
One example from Performance Coatings Group is the ability to leverage our legacy North American blending facilities to provide color matching on smallbatch production of some key Valspar industrial products, one example being coating for metal extrusion customers.
"The ability to run high volume and smallbatch jobs is helping us to expand our share of wallet with existing accounts and attract new ones.
"We expect to book most of the remaining costs to achieve these synergies in 2018, and we're increasingly confident in our long-term annual run rate range of $385 million to $450 million,” Morikis said.